Performance Evaluation Risk and Return of Mutual Fund

A study on “Performance Evaluation of Mutual Funds with
Reference to risk and return”
CONTENTS
- Executive Summary
- Introduction
- Literature review
- Purpose of the study
- Objectives
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EXECUTIVE SUMMARY
UTI securities ltd. (UTISEL) has been working as an independent
professional entity for providing financial intermediary and advisory services to
corporate institutional and retail clientele. This project emphasis on, “The
Performance of Mutual Funds with reference to Risk and Returns”, conducted at
UTI Securities Ltd. In this project I have analyzed the Mutual Funds Schemes,
particularly the Equity Diversified open ended (growth) schemes and evaluated
the returns and the risk associated with those schemes.
OBJECTIVES OF THE STUDY
 To know the performance of Mutual Fund of different companies.
 To evaluate the returns and the risk associated with mutual funds.
 To evaluate the investment performance of mutual funds with risk
adjustment, by using the theoretical parameters as suggested by
William. Sharpe, Treynor and Jensen.
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LIMITATIONS:
Not single work is an exception to the limitations every work has got its
limitations. The data collection here in this project is strictly confined to the
secondary sources. No primary data was associated with the project. Collecting
historical NAV is very difficult. Selection of the schemes for the study is also a very
difficult task because of the wide variety of schemes. The results of the study are
subjected to inconsistencies arising out of the assumptions made to make the
portfolios comparable viz., sample selection procedure, portfolio proportion
assumption etc.
RESEARCH METHODOLOGY:
Data source:
Secondary data - Reports from UTI securities and other reports
from related websites.
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Introduction
An investment means employment of funds on assets (i.e. securities or mutual

funds or any of the investment avenues) with the aim of earning income as well as
capital appreciation. There are mainly two attributes while investing to any of the
funds i.e. time and risk. There are mainly four objectives, which the investments
activities will carry on. Those are:
 Return from the investment

 Risk involved
 Liquidity
 Hedge against inflation
 Safety
 Convenience
There are many alternatives investment avenues which are open to the
investors to suit their needs and nature .The selection of investment alternatives
depends up on the required level of return and the risk tolerance level. These
alternatives range from financial securities to traditional non-securities investment.
Following are the various investment alternatives.
Negotiable and fixed income securities
 Equity shares
 Preference share
 Debentures
 Bonds
 Indira vikas patra &Kisan Vikas patra
 Government securities
 Money market securities (i.e. treasury bill, commercial paper,
certificate of Deposit etc)
Non-negotiable securities
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 Bank deposit
 Post office deposit
 NBFC deposit
 Tax saving schemes
 Public provident fund scheme
 National saving scheme
 Life insurance
 Mutual funds
 Real estate
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LITERATURE REVIEW
Introduction to Mutual Funds
What is a Mutual Fund?
Like most developed and developing countries the mutual fund cult has been
catching on in India. There are various reasons for this. Mutual funds make it easy
and less costly for investors to satisfy their need for capital growth, income and/or
income preservation.
And in addition to this a mutual fund brings the benefits of diversification and
money management to the individual investor, providing an opportunity for financial
success that was once available only to a select few.
Understanding Mutual funds is easy as it's such a simple concept: a mutual
fund is a company that pools the money of many investors -- its shareholders -- to
invest in a variety of different securities. Investments may be in stocks, bonds, money
market securities or some combination of these. Those securities are professionally
managed on behalf of the shareholders, and each investor holds a pro rata share of the
portfolio -- entitled to any profits when the securities are sold, but subject to any
losses in value as well.
For the individual investor, mutual funds provide the benefit of having someone else
manage your investments and diversify your money over many different securities
that may not be available or affordable to you otherwise. Today, minimum investment
requirements on many funds are low enough that even the smallest investor can get
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started in mutual funds.
A mutual fund, by its very nature, is diversified that is, its assets are invested in many
different securities. Beyond that, there are many different types of mutual funds with
different objectives and levels of growth potential, furthering your chances to
diversify.
Evolution:
In most of the countries, mutual funds have emerged as strong rivals to

banking industry in mobilizing savings funds. The reason that may attributed to
same is that in the banking sector there are many restrictions for investment in
the capital market, there as the mutual funds have been a free access to these
markets which in other words have given then an upper hand in the matter of
operations. Consequently, the returns from mutual funds investment are higher
compared to the returns out of savings in banks in an ideal market condition.
Thus, he mutual funds i8ndusty has witnessed a tremendous growth in countries
like Mexico and South Africa.
Mutual Funds can be broadly classified under 3 heads namely
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a) Investment Trust
b) Holding companies
c) Finance Companies
Out of the above the investment trust got a boost because of good public
response and today we have in India Unit Trust of India that was constituted on
similar lines with the unit trust in the U.S.A.
The unit trusts are open-ended schemes where the investor can buy and sell
‘Unit’ at his only will and wish. The other advantage of unit Trust is that even a
small investor can hold shares of many companies and enjoy the returns arising
lot of the investment.
The unit trust of India was constituted under the unit Trust of India act,
1963 and became operational in the year 1964 with the basic objectives of
mobilizing savings through the sale of units and investing them in corporate
securities with the idea of maximizing yield from them and capital appreciation
with inbuilt liquidity. The unit trust of India still commands a good position
among mutual fund in India and approximately 90% of the investments in
mutual fund are in the schemes floated by unit trust of India.
The unit trust of India has many highlights in its performance so far. The
monopoly of unit trust of India was brought to an end with the entry of public
sector mutual funds in the year 1987. Canara bank, State Bank of India, Punjab
National Bank and Indian bank floated the premier mutual funds that came into
being during 1987.
DEFINITIONS:
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The reason for increased response towards mutual funds world over is on
account of investment analyst, who takes investment decisions based on research.
The concept of the lower risk carried on by the investor as the funds are diverted
with professional body of investment analyst, who take investment decisions based
on research. The concept of mutual fund has been defined in various ways.
According to SEBI (Mutual Fund) regulatins1993, “Mutual fund means

a fund established in the form of trust by sponsor to raise moneys by the trustees
through the sale of units to the public under one or more schemes for investing
in securities in accordance with these regulations”.
However in the Indian context it is safe to define “Mutual Fund as trusts

accepting savings from the investors and invest the same as per the objectives
incorporated in the trust deed to manage diversified portfolio which in turn
assure reasonable returns to the investors.”
Why invest in Mutual Funds.

Investing in mutual has various benefits which makes it an ideal investment
avenue. Following are some of the primary benefits.
Professional investment management

One of the primary benefits of mutual funds is that an investor has access to
professional management. A good investment manager is certainly worth the fees you
will pay. Good mutual fund managers with an excellent research team can do a better
job of monitoring the companies they have chosen to invest in than you can, unless
you have time to spend on researching the companies you select for your portfolio.
That is because Mutual funds hire full-time, high-level investment professionals.
Funds can afford to do so as they manage large pools of money. The managers have
real-time access to crucial market information and are able to execute trades on the
largest and most cost-effective scale. When you buy a mutual fund, the primary asset
you are buying is the manager, who will be controlling which assets are chosen to
meet the funds' stated investment objectives.
Diversification
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A crucial element in investing is asset allocation. It plays a very big part in the
success of any portfolio. However, small investors do not have enough money to
properly allocate their assets. By pooling your funds with others, you can quickly
benefit from greater diversification. Mutual funds invest in a broad range of securities.
This limits investment risk by reducing the effect of a possible decline in the value of
any one security. Mutual fund unit-holders can benefit from diversification techniques
usually available only to investors wealthy enough to buy significant positions in a
wide variety of securities.
Low Cost
A mutual fund let's you participate in a diversified portfolio for as little as
Rs.5,000, and sometimes less. And with a no-load fund, you pay little or no sales
charges to own them.
Convenience and Flexibility

Investing in mutual funds has it’s own convenience. While you own just one
security rather than many, you still enjoy the benefits of a diversified portfolio and a
wide range of services. Fund managers decide what securities to trade, collect the
interest payments and see that your dividends on portfolio securities are received and
your rights exercised. It also uses the services of a high quality custodian and
registrar. Another big advantage is that you can move your funds easily from one fund
to another within a mutual fund family. This allows you to easily rebalance your
portfolio to respond to significant fund management or economic changes.
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Liquidity
In open-ended schemes, you can get your money back promptly at net asset
value related prices from the mutual fund itself.
Transparency
Regulations for mutual funds have made the industry very transparent. You
can track the investments that have been made on you behalf and the specific
investments made by the mutual fund scheme to see where your money is going. In
addition to this, you get regular information on the value of your investment.
Variety
There is no shortage of variety when investing in mutual funds. You can find a
mutual fund that matches just about any investing strategy you select. There are funds
that focus on blue-chip stocks, technology stocks, bonds or a mix of stocks and bonds.
The greatest challenge can be sorting through the variety and picking the best for you.
Mutual fund route offers several important advantages.
 The popular saying, “don’t keep all the egg in one basket” is quite
appropriate in the case of instruments, if an investor wishes to maximize
his returns, he should invest in a variety of securities available across the
market. However, a small investor with his limited savings can not
acquire a number of securities of different companies and industries.
Thus, the investor gets a proportion of the average market. This specific
character of mutual fund investment avenues further, the modern portfolio
they states that, diversification reduces the risk and improves the scope
for higher returns.
 Professionals who have knowledge and experience in security analysis
and portfolio management manage the corpus amount mobilized by the
mutual funds under various schemes. Research is continuous process in
mutual funds, where they identify the under valued and high yielding
securities and make will-timed purchases and sales. An investor of a
mutual fund schemes may gain out its professional management. The
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investor can save his cost and time in identifying the securities; he can
share the benefits of reach and management costs of the funds with other
investor.
 Mutual funds are floating different schemes with variety investment
objectives. This creates an opportunity among investors to choose the
schemes based on their objective, motivations, and requirements.
 In addition to the above advantages, the Indian mutual funds are
specifically offering the following benefits to the investors.
 In the case of investment in equity shares or debentures, the allotment

would be based on lost or proportional. Whereas, almost all the
mutual funds promise assure allotment to all investors to the extent of
amount subscribed by them. This reduces the investor’s time.
 Mutual funds offer certain tax incentives to the investors and
additional tax benefits for investing in tax planning schemes.
The presence of the Mutual fund institutions in the economy offers certain
advantages to the economy-
 Mutual funds are the financial intermediaries, which mobilize the savings
from surplus units and transfer them to the capital and money market by
investing in a variety of financial instruments.
 Mutual funs with support of their professional managers, carefully
analyses the prospects of new companies and new industries if the
prospects are good, subscribe large amounts to he equity and debt capital
of newly established companies.
 Mutual funds as institutional investors, with their professional expertise in
the stock trading. The increased participation of professional rational
investment reduces the undesirable speculation in the capital market.
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Classification of Mutual Fund Schemes
Any mutual fund has an objective of earning income for the investor’s
and/ or getting increased value of their investments. To achieve these objectives
mutual funds adopt different strategies and accordingly offer different schemes
of investments. On this basis the simplest way to categorize schemes would be
to group these into
Operational classification highlights the two main types of schemes, i.e., open-
ended and close-ended which are offered by the mutual funds.
Portfolio classification projects the combination of investment instruments and

investment avenues available to mutual funds to manage their funds. Any portfolio
scheme can be either open ended or close ended
A. Operational Classification or on Structural basis:
Open Ended Schemes:
As the name implies the size of the scheme (Fund) is open – i.e., not
specified or pre-determined. Entry to the fund is always open to the investor
who can subscribe at any time. Such fund stands ready to buy or sell its
securities at any time. It implies that the capitalization of the fund is constantly
changing as investors sell or buy their shares. Further, the shares or units are
normally not traded on the stock exchange but are repurchased by the fund at
announced rates. Open-ended schemes have comparatively better liquidity
despite the fact that these are not listed. The reason is that investor can any time
approach mutual fund for sale of such units. No intermediaries are required.
Moreover, the realizable amount is certain since repurchase is at a price based
on declared net asset value (NAV). No minute-to-minute fluctuations in rates
haunt the investors. The portfolio mix of such schemes has to be investments,
which are actively traded in the market. Otherwise, it will not be possible to
calculate NAV. This is the reason that generally open-ended schemes are Equity
Based.
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Moreover, desiring frequently traded securities, open-ended schemes

hardly have in their portfolio shares of comparatively new and smaller
companies since these are not generally traded. In such funds, option to reinvest
its dividend is also available. Since there is always a possibility of withdrawals,
the management of such funds becomes more tedious as managers have to work
from crisis to crisis. Crisis may be on two fronts, one is, that unexpected
withdrawals require funds to maintain a high level of cash available every time
implying thereby idle cash. Fund managers have to face questions like ‘ what to
sell’. He could very well have to sell his most liquid assets. Second, by virtue of
this situation such funds may fail to grab favorable opportunities. Further, to
match quick cash payments, funds cannot have matching realization from their
portfolio due to intricacies of the stock market. Thus, success of the open-ended
schemes to a great extent depends on the efficiency of the capital market. The
holders of the shares in the fund can resell them to issuing Mutual Fund
Company at any time They receive in turn the net asset value (NAV) of the
shares at the time of resale. Such mutual funds companies place their funds in
the secondary securities market. They do not participate in new issue markets
to pension funds or life insurance investment companies. Can sell an unlimited
number of shares and thus keep going larger. The open end mutual funds by or
sell their own share.
These companies ell new shares at NAV plus a loading or management

fee and redeem scheme at NAV. UTI’S Unit scheme, 1964 and CANCIGO
and CANGICT are few examples of such funds. The minimum corpus for and
open-ended fund is fifty crores a per SEBI guidelines.
(b) Close Ended Schemes:
Such schemes have a definite period after which their shares/units can be
redeemed. Unlike open-ended funds, these funds have fixed capitalization, i.e.,
their corpus normally does not change throughout its life period. Close ended
fund units trade among the investors in the secondary market since these are to
be quoted on the stock exchanges. Their price is determined on the basis of
demand and supply in the market. Their liquidity depends on the efficiency and
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understanding of the engage broker. Their price is free to deviate from NAV,
i.e., there is every possibility that the market price may be above or below its
NAV. If one takes into account the issue expenses, conceptually close ended
fund units cannot be traded at a premium or over NAV because the price of a
package of investments, i.e., cannot exceed the sum of the prices of the
investments constituting the package. Whatever premium exists that may exist
only on account of speculative activities. In India as per SEBI (MF) Regulations
every mutual fund is free to launch any or both types of schemes. Close– ended
mutual funds are different form the open-ended mutual fund. Close-ended and
investment company has definite target amount for the funds and can not sell
more shares after its initial offering. Its growth in terms of numbers is limited.
Its shares are issued like together company’s new issue listed and quoted at
stock ex change. That minimum corpus for Close-ended fund is Rs20 crores.
Close-ended funds changed funds the secondary market acquisition of corporate
securities.
There is no necessary relationship between the price of close-ended

mutual fund share and its NAV. Its shares may les per the current NAV per
share, per more,(at a premium) as per less(at discount). Investor’s doubts about
the abilities of the funds management lack of sales effort (brokers earn less
commission of close ended schemes then open ended schemes) risk ness of the
fund.
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B. Portfolio classification of mutual funds.
These are specific mutual funds, which are structured for feeding a
particular invests able purpose. The objective of funds provide fixed return for
those who design safety
Equity (Stock) Funds:
Equity Funds are those that invest primarily in stock. The actual portfolio
holing, trading style, portfolio turnover, etc, are widely depending on the fund’s
investment objectives and manager’s style.
Aggressive Growth:
These funds are also called capital Appreciation fund. Having an investment
objective of maximum capital gains, with minimal or no concern for dividends or
income. These funds tend to be some of the most volatile, with share price rise that
can be thrilling and drop that can be frightening. Not only do the portfolios holding
them be volatile, but many aggressive growth funds magnify the volatility by using
borrowed money (leverage) to increase the size of the position held. Some funds in
this category growth funds fall into the aggressive growth area.
Aggressive growth funds purchase shares of stock in smaller companies, which

have a chance to grow at a faster pace than more “mature” companies. Of course,
there is also greater risk involved with investing in less established companies.
Aggressive growth funds are usually recommended for the investors who seek long-
term capital appreciation and will not need access to money for at least ten years.
Balanced:
Funds invest in a mix of common stock and corporate bonds. The weighting of
going piece of the mix depends on the fund manager’s perceptions of where the
markets and economy are going. Some preferred stock and convertible securities are
commonly allowed, as are cash equivalents such and Treasury Bills, CDs, and
commercial paper.
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Global:
It is Similar to international, but with the option of investing anywhere

globally including the U.S.
Growth:
The goal for these funds is long-term growth of capital. Growth funds own
shares of medium to large companies, and could include such familiar “blue chip”
names as IBM and GENERAL ELECTRIC. Normally, these established companies
will grow at a moderate pace, and will pay regular dividends to owner of its shares. If
mutual fund is the owner the fund will collect these dividend and pass them to mutual
funds shareholders once are more per year. While capital appreciation is major
objective of these type of fund income derived from dividends is secondary objectives
investments are typically in long – growth stocks, with a lower portfolio turnover then
the aggressive growths funds. Dividends yield tend to be low.
Growth and income:
Despite the name, fund in this category are typically more interested in growth
than income with typical dividend rates on the portfolios in the 1% range. The usual
portfolio is Blue Chip stock, with some income enhancing securities like convertible
preferred stocks are bonds thrown in to the mix.
Index:
Unlike traditional stock funds, which are managed actively by a portfolio

manager based on analysis of economic and market movements, index funds are
passively managed. A passively managed fund buys and holds securities selected to
represent its unmanaged target index, such as standard and poor 500 index.
Sector:
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Concentrates investments on a narrow market sector like Health care, internal

stocks, bio technology, and so on. Sector funds tend to be volatile as industry groups
fall into and out of favor; portfolios are diversified only within industry group.
Real estate funds:
Real estate funds are of close-ended type. The funds are named so because
primary investment is real estate ventures.
Bond funds:
Bond funds are objective of safety. Bond funds are liquid prices of funds
fluctuates with changing interest rates.
C. Geographical Classification of Mutual Funds
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National boundaries provide territorial restrictions on the sale and

purchase of mutual funds units or share, as is the case in commodity trade or
service in view of the, Mutual funds which operate with in the nation
boundaries are different form those which are meant for subscription of
foreigners or the countries national living out side its share. The classification is
of broadly tow types.
1) Domestic Mutual Funds
2) Offshore Mutual Funds
Domestic Mutual Funds
Domestic Mutual Funds are the saving schemes, which are open for
mobilizing saving of the nationals with in the country. All the Mutual fund
schemes in vogue in the country vis-à-vis, UTI, GIC Mutual Fund, LIC Mutual
Fund, SBI Mutual fund, CAN Bank Mutual Fund, PNBMF and BOIMF are the
domestic schemes.
Offshore Mutual Funds
The basic objective of opening offshore Mutual fund scheme is to attract

foreign capital for investment purposes in the country of the issuing company.
Offshore Mutual Funds thus facilitate cross border fund flow, which is a direct
route for getting foreign currency without political strings or domination on the
issue country.
From investment point of view too, offshore Mutual funds open up

domestic capital market to the international investor and global portfolio
investments.
The major point of difference between offshore Mutual funds and

Domestic Mutual funds is the currency and country risk for the global investors
as the source of funds from am broad because of high risk in a higher return in
the invested funds can be expected. Like domestic mutual funds, the offshore
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Mutual funds can also be functionally classified into Close-ended or Open-

ended funds.
The Major Offshore Mutual Funds opened so far have been close-ended
schemes providing redemption of the units for individual investors only at the
end of the period specified in the scheme. UTIs India funds 1986, India growth
fund, SBIs India Magnum, Can Bank’s Indo-Swiss Himalayan fund, 1990 and
Common wealth equity fund are all close-ended offshore funds.
Characteristics of Mutual Fund Schemes
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The following are mutual fund scheme characteristics of the Indian

mutual fund schemes.
 Assurance of minimum returns:
Mutual funds in general do not assure any minimum returns to their

investors. Returns are paid to the investors, commensurate with the returns
earned by the fund on the portfolio, as portfolio consists of various securities,
whose returns are subject to market risks. Contrary to this, the Indian mutual
fund schemes launched during 1987 to 1990 assured specific returns while
marketing their schemes.
I n 1991, SEBI together with the union ministry of finance ordered the
mutual funds not assume minimum returns. Recently, SEBI has formulated of
policy that, mutual funds with a track record ;of 5 years will be allowed to offer
fixed returns. SEBI shall prescribe the returns to be assured from time to time.
However, no fund will be allowed to offer fixed return for more than 1 year.
 Multiple Option
Most of the mutual fund schemes are offering different option to the
investor under one scheme. For example growth oriented scheme may offer
option of either regular income plan, dividend shall be distributed to the
investor, and under second dividend will be re-invested and the total amount at
the time of redemption.
 Immediate monthly income.

 Deferred monthly income.
 Accumulated income and benefits under section 80 1 of the
income act.
 Growth with capital gain.
 Lock in period
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Mutual fund schemes offer documents that contain a clause of lock in

period ranging from one year to 3 years. Till the completion of the minimum
period, the investors are neither allowed to trade the units on the stock exchange
nor avail repurchased facility.
 Liquidity
a) Open-ended mutual funds offer the facility of repurchase, and the close-
ended schemes are also offering repurchase after a minimum period of two to
three year.
b) Mutual funds units can be pledged or mortgaged in favor of commercial

banks or financial institutions, and can obtain a loan according to the rules and
regulations of the bank or financial institution.
c) Mutual fund can be transferred in favors of any individuals.
PURPOSE OF THE STUDY
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The purpose of the study is to know the returns and the risk associated with
the Mutual Fund’s Equity Diversified schemes and to find out which best scheme to
recommend.
SCOPE OF THE STUDY
 The present study includes 4 years average returns of the mutual funds, which
have the total corpus (mass, quantity, amount,) value, of more than 10000
crores.
 For my study I have scanned all the mutual funds companies and have taken
only those schemes which are having the corpus value of more than 400 crores
and age of the fund is more than 3 years.
 This study covers only equity diversified schemes which are subject to more
fluctuating risks and returns.
 Since the number and nature of stocks, the proportion of stocks in the portfolio
and the relative ness of portfolio to the index considered, differs, the portfolios
are averaged at 0.5 for these factors for variance determination.
 To evaluate the performance of the Mutual Fund schemes, Sharpe’s index,
Treynor’s index and Jensen’s Alpha measures are applied.
OBJECTIVES OF THE STUDY
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 To know the performance of Mutual Fund of different companies.
 To evaluate the returns and the risk associated with mutual funds.
 To evaluate the investment performance of mutual funds with risk
adjustment, by using the theoretical parameters as suggested by William.
Sharpe, Treynor and Jensen.
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CONTENTS
- Organization Profile
- Date Collection Methods
- Measuring Tools
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ORGANIZATION PROFILE
UTI SECURITIES LTD., (UTISEL) was incorporated on June 28, 1994 by
Unit Trust of India as its 100% subsidiary and on the repealing of the UTI Act, the
capital was now held by the Administrator of the Specified Undertaking of Unit Trust
of India (ASUUTI), on April 17, 2006 the entire share capital of the company was
transferred from SUUTI to Securities Trading Corporation Of India Ltd. [STCI] and
its nominees. UTISEL has been working as an independent professional entity for
providing financial intermediary and advisory services to corporate institutional and
retail clientele. The Company has built up a reputation for transparent and fair
execution of transactions, which have been well received and appreciated by its
clientele. The staff at UTI Securities strives to maintain the quality of services offered
to its clients at the highest degree.
The Company has grown from an institutional brokerage house to a full-
fledged financial intermediary having nationwide presence in major cities with
branches and franchisees to service a wide range of clients. We are committed to
gradually enhancing our network in the near future.
The Company has also invested in the joint-venture company with Standard
Chartered Bank viz. Standard Chartered UTI Securities (P) Ltd. that is engaged in
primary dealership and Government securities. The Company has started Commodity
Trading through its subsidiary, UTISEC COMMODITIES LIMITED, which provides
facility of commodity trading on NCDEX and MCX.
Mission and Vision:
To emerge as one of the leading providers of stock brokerage, investment banking and
related services, at par with the best in the world".
Management profile:
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Mr. Dipankar Basu: Chairman
Mr. Dipankar Basu was appointed as Chairman and Director on the Board of UTI
Securities Limited at the Meeting of the Board of Directors held on April 17, 2006.
Mr. Basu is the non-executive Chairman of Securities Trading Corporation of
India Limited and Rain Calcining Limited. Mr. Basu brings with him long experience
and specialized knowledge of financial markets in India. He has been the Chairman of
State Bank of India until August 1995. While acting as the Chairman, Mr. Dipankar
Basu served as a Member on the Boards of number of SBI subsidiaries including
those engaged in investment banking and fund management. He has been a Board
member of number of companies engaged in both financial and non-financial
businesses.
Even after retirement in 1995, Mr. Basu has been actively engaged in wide spectrum
of functions including being a member of the Disinvestment Commission set up to
advise the Government of India on public sector disinvestments. He has also been a
member of the Narsimhan Committee on Banking Sector Reforms.
Mr. Gopalakrishnan Narayanan: Director
Mr. Gopalakrishnan Narayanan, currently the Managing Director of Securities
Trading Corporation of India Limited has been appointed as an Additional Director on
the Board of our Company with effect from April 17, 2006.
Being qualified as BSc and CAIIB, Mr. Narayanan brings with him more than 36
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years of experience and knowledge. He joined Bank of India in 1970. Large part of
Mr. Narayanan’s career was in International Treasury and Foreign Exchange related
areas. He has had two stints of Overseas Assignments at Tokyo and Jersey Branches
of Bank of India.
Mr. Narayanan has attended number of trainings conducted by in-house training
college, Bankers Training College of Reserve Bank of India in Treasury and Forex
related areas. He has been a regular guest faculty on Treasury & Forex related
subjects in in-house training colleges & Bankers Training College of Reserve Bank of
India.
Dr. D C Anjaria: Director
An MBA in finance from the IIM (A), he has had 20 years of experience with
Citibank N.A. in India and overseas. He worked as Chief of Staff with Citicorp
Investment Bank in Paris, France. In 1988, Dr. Anjaria joined the Unit Trust of India
to establish and head UTI Institute of Capital Markets, a unique specialised training
and research institution. Currently he runs an independent consulting operation-
International Financial Solutions Pvt. Ltd. to advise clients in areas including
corporate strategy, financial risk management and use of derivative products.
Shri A Rama Mohan Rao: Managing Director
Chartered Accountant by profession, Shri Rao is the Managing Director of the
Company since July 2002. He has worked with UTI for a period of 22 years in
various functional areas of marketing, accounting, operations, Investments and Fund
BABASAB PATIL
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Management in different capacities.
He worked as Branch Manager at UTI Branches, as Functional Head in International
Finance and Investment Department and also as one of the Chief Investment Officers
for UTI schemes. He has represented as one of the Indian Delegates at the Asia
Oceania Regional Meeting for Investment Managers held at Singapore in 2002. At
UTISEL he is responsible for the overall management and performance of the
Company.
Products and services:
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Place delivery based orders for all stocks listed on NSE & BSE
Intra-day Trading:
Execute Margin Orders upto 3 to 4 times your available funds. The same is available
for select group of stocks listed on NSE & BSE.
ANST: Sell shares before you receive the same in your demat account. You can avail
of this facility 1st and 2nd day after the buy order date.
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Derivative:
With a Derivative-approved Usec trade account, you can pursue a wide range of
Futures & Options trading strategies with speed and ease. We deliver the support,
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them fast
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paperwork, you get the dual benefit of a risk cover and savings. What's more, we shall
send you regular reminders about your premium payments due.
Bonds
Fixed income securities can help reduce your risk within an investment
portfolio while providing a steady stream of income over time. Currently you can
choose to invest online in GOI Bonds. If you are looking to diversify your portfolio,
possibly improve your tax efficiency and/or reducing your risk exposure, you may
want to consider making fixed income securities part of your personal investment
strategy
Research:
Charting Tools - Get a combined view of stocks, rapid price changes and volume
increases with this pre-trade analytic tool. Enables you to do technical market analysis
of stocks on price, volume, market cap and P/E for NSE/BSE Benchmark against
Domestic as well as International Indices.
Sector Watch - You can access sector-wise information to track sectors and individual
scrips within the sector, which makes analysis easy for you.
Corporate Infohub - We provide you with exhaustive company information, detailed
financials and ratios. And we also allow you to evaluate financials across peer
companies. Our extensive database covers more than 4000 companies.
Newsroom - View live market news from the most reliable sources on equity, debt,
politics and general events. You even have access to live news analysis, market
commentary and happening stocks.
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Customer Service & Other Value Added Services
Online Query Resolution - With our "Quick Mail" tool you can resolve all your
problems online.
Online Ledger - View your Digital Contract Note, summary of your transactions
using Online "Bills & Accounts"
My Inbox - Maintain records of all Important notifications related to your account
SMS Alerts - Set Price based Alerts for Stocks of your choice
Dedicated Customer Care Centre & State-of- the-art Phone-2-Trade Desk
Interactive Demo - A step-by-step guide to enable you to navigate through the
process of Investing Online on our website Usectrade.com
Subscription to Mailers - Subscribe to our Inhouse Research Reports covering our
entire Product Bouquet
Investment Banking and Advisory Services
Investment Banking is one of the prime focus areas of the company and we provide
value added, customized solutions to our clients. Leveraging on the knowledge,
expertise and experience of our professionals, we offer services that range from
managing public issues, debt and equity placements, corporate advisory services and
financial consultancy to facilitating mergers and acquisitions.
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The Investment Banking Team's business philosophy emphasizes:-
• Long-term relationship with clients.
• A strong research-based advice.
• Innovative solutions and speedy execution.
• Ethical and transparent conduct of business.

It has always been the endeavor of UTI Securities to bring all the market
constituents together in a mutually beneficial relationship.
Equity capital Markets

The Issue Management group focuses on public issues, open offers and buy
back issues. Our proximity to large institutions gives us an added advantage in placing
large equity issues. This division is supported by a nationwide network comprising of
12 branches, 15 franchisees and sub-brokers across the country for retail distribution.
Within a short span, UTISEL has already been recognized as one of the leading
merchant bankers in India.
UTI Securities has consistently provided professional guidance and expert
services. Over the years, it has developed strong relationships with institutional
investors and other market intermediaries, enabling it to structure and successfully
place a wide array of Capital Market products that meet the requirements of the
issuer, investor and the market.
The Equity Capital Markets group offers the following services:
• Initial Public Offerings
• Rights Issues
• Buy-Back
• Underwriting
• Open Offers
• Delisting of Securities
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• Private Equity
The Equity Capital Markets group seamlessly draws on the expertise provided by the
Equity Research and Equity Sales teams on all the public offerings.
We have been associated with a number of issues in different capacities as
Lead Managers, Co Managers, Syndicate/Sub-syndicate Members, etc. in the past.
We successfully lead managed recently the public issue of Four Soft Ltd., a software
products company, with an issue size aggregating Rs. 200 million. We were also
involved as a syndicate member in the issue of Indraprastha Gas Ltd. where we
procured over 12,000 applications.
Our Clients:
We are currently lead managing the issues of SMS Pharmaceuticals, a bulk drugs
manufacturer; Glenmark Laboratories Ltd. which is in formulations segment;
Vivimed Labs Ltd., manufacturer of pharmaceutical ingredients catering to the
personal care industry and Crew BOS Products Ltd., a fashion accessories
manufacturer. The size of the said issues ranges from Rs. 150 million to Rs. 500
million. We are also Lead Managing Rights Issue of Varun Shipping Company Ltd of
Rs.130 -150 Crores. We also pursue Buyback/Delisting offers amongst others.
We are aiming at making further inroads by securing mandates of premier companies
in the Pharmaceutical, Textiles, Information Technology, Hospitality, Banking and
Housing Finance industries amongst others.
Private Equity
The Private Equity Group arranges equity placement through the off-market
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route using its privileged relationships with various Venture Capital and Strategic &
Portfolio Equity investor who operate from within the country as well as from abroad.
The Private Equity group assists companies seeking capital infusions in the form of
seed capital, venture capital, angel investment, strategic investment, and mezzanine
financing from the private equity marketplace.
The private equity group identifies start –up, later stage projects for investing
in well-managed companies, which are placed to grow rapidly and to take advantage
of the favourable economic conditions existing within the space with a clearly defined
business model. Private Equity Group has followed the philosophy of being a multi-
sector player, as it believes that in the Indian context it ensures an optimum balance of
risk and return to its investors. Private Equity Group has demonstrated its industry
expertise in different sectors by backing diverse sectors like Pharma, Power,
Entertainment, Information Technology etc.
The Private Equity division has been successful in arranging pre IPO funding
from venture capitalists/Private Equity investors. Recently we have done the
placement for Four Soft Ltd. and Glenmark Laboratories Ltd. aggregating Rs. 140
million.
Data Collection:
Data source:
Secondary data - Reports from UTI securities and other reports
from related websites.
Measuring tools and Techniques:
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Techniques of analysis:
1. Return:
Return on a typical investment consists of two components. The basic is the

periodic cash receipts (or income) on the investment, either in the form of interest or
dividends. The second component is the change in the price of the assets-commonly
called the capital gain or loss. This element of return is the difference between the
purchase price and the price at which the assets can be or is sold; therefore, it can be
a gain or a loss.
The return has been calculated as under:
NAVt – NAVt-1
Portfolio return: Rit =---------------------------------
NAV t-1
Where Rit is the difference between Net Asset Values for two consecutive days
dividend by the NAV of the preceding day.
M.indt – M.indt-1
Market return: Rmt =--------------------------------
M.indt-1
Where Rmt is the difference between market indices of two consecutive days
dividend by the market index for the preceding day
2. Risk :
Risk is neither good nor bad. Risk in holding securities is generally associated
with the possibility that realized returns will be less than expected returns. The
difference between the required rate of returns on mutual fund investment and the
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risk free return is the risk premium. Risk can be measured in terms of Beta &
standard deviations.
 Standard deviation:
It is used to measure the variation in individual returns from the average

expected returns over a certain period. Standard deviation is used in the concept of
risk of a portfolio of investments. Higher standard deviation means a greater
fluctuation in expected return.
SD = n ∑X2 – (∑X)2
n (n-1)
 Beta :
Beta measures the systematic risk and shows how prices of securities respond
to the market forces. It is calculated by relating the return on a security with return
for the market. By convention, market will have beta 1.0.Mutual fund is said to be
volatile, more volatile or less volatile. If beta is grater than 1 the stock is said to be
riskier than market. If beta is less than 1, the indication is that stock is less risky in
comparison to market. If beta is zero then the risk is the same as that of the market.
Negative beta is rare.
ß = Covar / (SD)2
Where, Covariance (covar) is the average of the products of deviations for

each data point pair. And, covar is calculated as:
Covar = 1/n Σ(xi –µ x)(yi - µy)
Where, x = scheme returns.
y = market returns.
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µ = mean.
β = nΣxy - (Σx)( Σy)
nΣx2-(Σx) 2
Where, n = number of years
X = rolling returns of the BSE index
Y = rolling returns of the schemes
3. Sharpe index
Sharpe index measures risk premium of a portfolio, relative to the total

amount of risk in the portfolio. Sharpe index summarizes the risk and return of a
portfolio in a single measure that categorizes the performance of funds on the risk-
adjusted basis. The larger the Sharpe’s index the portfolio over performs the market
and vise versa.
Formula to calculate Sharpe’s measure is:
RP - Rf
St =
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SD
Where,
st = Sharpe’s index
Rp= portfolio return
Rf= Risk free rate of return (5%)

SD= Standard Deviation of the port folio
4. Treynor’s Index
Treynor’s model is on the concept of the characteristics straight line. The

characteristics line has drawn a relationship between the market return and a specific
portfolio without taking into consideration any direct adjustment for risk. It is also
known as reward to volatility ratio and is defined as:
The formula for Treynor’s Index is:
Portfolio avg return (Rp) – risk-free rate of interest (Rf)
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Treynor index (Tn) =
Beta coefficient of portfolio (Bp)
Rp -Rf
Tn =
Bp
It measures portfolio risk in terms of beta, which is weighted average of

individual security beta. The ratio is investors, for who the fund represents only a
fraction of their total assets. The higher the ratio better is the performance.
5. Alpha
The size of the alpha exhibits the stock’s unsystematic return and its average
return independent of market return. If the fund produces the expected return at the
level of risk assumed, the fund would have an alpha equal to zero. A positive alpha
indicates that the manager produced return greater than expected for the risk taken.
Alpha is calculated by comparing the fund’s actual performance with the risk-
adjusted expected return.
Where Rp = portfolio return
Rf = Risk free rate of return (5%)
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Rm = average market return
-
α =(Rp Rf) - Beta (Rm- Rf)
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CONTENTS
- Methodology
- Results & Discussion with Charts & Graphs
- Conclusion
- Bibliography
Methodology
The following table shows the list of AMC in India & the corpus value
of individual AMC in the month of October and November 2006.
S.No Mutual Fund AUM AUM Increase/ Change

31/01/2007 31/12/2006 %
Decrease
1. LIC Mutual Fund 16480.90 12458.88 4022.02 32.28
2. UTI Mutual Fund 41622.51 37789.97 3832.54 10.14
3. Benchmark Mutual Fund 8951.09 5659.42 3291.67 58.16
4. Reliance Mutual Fund 34636.90 3152.28 3064.62 9.71
5. Kotak Mahindra Mutual Fund 13542.09 10938.29 2603.8 23.80
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6. Pru ICICI Mutual Fund 35232.16 32664.03 2568.13 7.86

7. DSP Merrill Lynch Mutual Fund 14277.26 11781.10 2559.16 21.84
8. HDFC Mutual Fund 29555.13 27552.96 2002.17 7.27
9. PRINCIPAL Mutual Fund 11887.17 10050.54 1836.63 18.27
10. Deutsche Mutual Fund 6138.66 5155.57 982.72 19.06
11. Birla Mutual Fund 17474.97 16821.57 653.2 3.88
12. HSBC Mutual Fund 10312.24 9691.28 620.95 6.41
13. JM Mutual Fund 4664.6 4097.05 567.55 13.85
14. SBI Mutual Fund 15961.26 15496.18 465.09 3.00
15. ABN AMRO Mutual Fund 5738.67 5335.14 403.53 7.56
16. Fidelity Mutual Fund 5786.05 5399.96 386.09 7.15
17. Standard Chartered Mutual Fund 12894.13 12541.59 352.54 2.81
18. ING Vysya Mutual Fund 3834.43 35781.17 256.26 7.16
19. DBS Chola Mutual Fund 2145.33 1938.74 206.59 10.66
20. Morgan Stanley Mutual Fund 3026.44 2864.58 161.87 5.65
21. Tata Mutual Fund 12521.86 12472.36 47.51 0.38
22. Sahara Mutual Fund 203.33 160.94 42.39 26.34
23. Sundaram Mutual Fund 6854.99 6818.87 36.12 0.53
24. Escorts Mutual Fund 127.70 123.18 4.52 3.67
25. Quantum Mutual Fund 55.15 51.51 3.65 7.09
26. BOB Mutual Fund 150.21 165.49 -15.28 -9.23
27. Taurus Mutual Fund 258.29 275.92 -17.63 -6.39
28. Franklin Templeton Investments 23832.70 23920.26 -87.57 -.037
29. Canbank Mutual Fund 2304.91 2737.86 -332.85 -12.62
The AMC which have the AUM of more than 10,000Crs
1st STEP:
The selection of AMCs for analysis is on the basis of AUM value of individual
AMC. From all the AMCs, the fund, which have the AUM of more than 10,000crs
only those AMCs are taken for the study.
The following table shows the list of AMCs, which have the AUM of more
than 10,000Crs in the month of December 2006 and January 2007, & the % change in
the values in a month also are shown.
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S. No AMC AUM AUM Absolute %Change

31/01/2007 31/12/2006 change
1. UTI Mutual Fund 41622.51 37789.97 3832.54 10.14
2. Pru ICICI Mutual Fund 35232.16 32664.03 2568.13 7.86
3. Reliance Mutual Fund 34636.90 3152.28 3064.62 9.71
4. HDFC Mutual Fund 29555.13 27552.96 2002.17 7.27
5. Franklin Templeton Investments 23832.70 23920.26 -87.57 -.037
6. Birla Mutual Fund 17474.97 16821.57 653.2 3.88
7. LIC Mutual Fund 16480.90 12458.88 4022.02 32.28
8. SBI Mutual Fund 15961.26 15496.18 465.09 3.00
9. DSP Merrill Lynch Mutual Fund 14277.26 11781.10 2559.16 21.84
10. Kotak Mahindra Mutual Fund 13542.09 10938.29 2603.8 23.80
11. Standard Chartered Mutual Fund 12894.13 12541.59 352.54 2.81
12. Tata Mutual Fund 12521.86 12472.36 47.51 0.38
13. PRINCIPAL Mutual Fund 11887.17 10050.54 1836.63 18.27
14. HSBC Mutual Fund 10312.24 9691.28 620.95 6.41
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2nd STEP
Equity diversified Schemes:
There are varieties of schemes offered by the AMCs. Equity diversified is one of
the schemes offered by the AMC. The selection criteria of schemes are totally based
on the fund size and age of the fund. The scheme, which has the corpus value of more
than 400crs and the age of the fund, is more then 3yrs only those funds are qualified
for the analysis.
Equity Diversified Fund diversifies their portfolio evenly across stocks and
industry sectors. The returns from them tend to be moderately high over a long-term
horizon but since the prices of equity shares fluctuate on the stock markets, the net
asset value is subject to these fluctuations. These funds suit investors who have
moderate risk appetite. In a diversified fund, the risk of down-side is mitigated by the
breadth of variety of stocks in the portfolio. Since the portfolio is diversified, the
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under-performance in some stocks or sectors in which the fund has invested is
balanced by the superior performance of other stocks or sectors
The following are the equity-diversified schemes in the selected funds

at the current date.1/02/2007
Tables for fund size and fund age
UTI Mutual Fund
S. No Scheme Name Fund Size Date of Fund Fund

Inception Age Class
1. UTI Master Plus 91(G) 863.52 31/12/1991 15.16 ED
2. UTI Index Select Equity (G) 216.36 12/05/97 9.58 ED

3. UTI Mastergrowth 93 (G) 346.95 18/01/93 14.08 ED
4. UTI Large Cap (G) 25.53 07/04/04 2.83 ED
5. UTI Mastershare (G) 1,828. 19/09/1986 20.33 ED
6. UTI Equity Fund (G) 1,451.73 18/05/92 14.75 ED
7. UTI Growth & Value Fund (G) 151.96 28/10/99 7.33 ED
8. UTI Leadership Equity Fund (G) 1,027.84 30/01/06 1.08 ED
9. UTI Dividend Yield Fund (G) 516.88 03/05/05 1.91 ED
10 UTI India Advantage Equity (G) 55.84 05/02/00 7 ED
.
11 UTI Dynamic Fund (G) 128.27 12/09/03 3.41 ED
.
12 UTI Master Value Fund (G) 647.68 9.08 ED
. 01/06/98
13 UTI Mid Cap (G) 80.70 07/04/04 2.83 ED
.
14 UTI Opportunities Fund (G) 497.79 1.58 ED
. BABASAB PATIL 20/07/05
15 UTI Contra Fund (G) -46- 640.04 0.91 ED
. 22/03/06
16 UTI Wealth Builder Fund (G) 905.02 07/09/06 0.41 ED
.
S. No Scheme Name Fund Date of Age of Fund

Size inception the fund class
1. Pru ICICI Infrastructure (G) 1,562.32 1.5 ED
16/08/05
2. Pru ICICI Dynamic Plan (G) 1,533.33 18/10/2002 4.33 ED
3. Pru ICICI Services Indus. (G) 424.02 1.25 ED

18/11/05
4. Pru ICICI Growth (G) 406.88 19/06/98 8.66 ED
5. Pru ICICI Emerging S.T.A.R.(G) 933.66 2.75 ED

05/10/04
6. Pru ICICI Discovery Fund (G) 908.60 2.58 ED
23/07/04
7. Pru ICICI Fusion Fund (G) 634.15 27/02/06 ED
(1)
8. Pru ICICI Power (G) 1,025.49 ED
05/10/01(5.33)
Prudential ICICI Mutual Fund
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Size inception the class
fund
1. Reliance RSF – Equity (G) 160.50 10/05/05 1.75 ED
2. Reliance NRI Equity Fund 121.23 01/11/04 2.25 ED

(G)
3. Reliance Equity Opp. Fund 2,214.79 07/03/05 1.58 ED

(G)
4. Reliance Vision Fund (G) 2,415.31 07/09/95 11.58 ED
5. Reliance Growth Fund (G) 3,243.92 08/09/95 10.5 ED
6. Reliance Equity Fund (G) 4,455.25 07/03/06 0.58 ED
Reliance Mutual Fund
HDFC Mutual Fund

S. No Scheme Name Fund Date of Age of the Fund
Size inception fund class
1. HDFC Growth Fund (G) 379.40 11/09/00 6.41 ED
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2. HDFC Core & Satellite Fund 646.03 10/09/04 1.41 ED

(G)
3. HDFC Top 200 Fund G) 1,621.10 19/08/96 10.5 ED
HDFC Equity
4. Scheme
S. No Name Fund (G) 3,907.14
Fund 08/12/94
Date of12.5
Age ofEDFund
5. HDFC Premier Multi-Cap (G) 673.81 21/03/05 1.91
Size (crs.) inception the fund
ED
class
1. Franklin India Opportunity. (G) 687.15 19/02/2000 7 ED
6. HDFC Capital Builder Fund (G) 657.84 16/12/93 13.16 ED
2. Franklin India Growth Fund 25.06 07/02/2000 7 ED
7. HDFC Long Term Equity Fund 1,478.01 27/01/06 1.08 ED
(G)
3. Franklin India Prima Plus (G) 878.70 28/09/94 12.41 ED
4. Franklin India Blue chip (G) 2575.97 30/11/1993 13.25 ED
5. Franklin (I) Flexi Cap (G) 3,364.79 09/02/05 2 ED
6. Franklin (I) Smaller Co's (G) 1,211.47 14/12/05 1.16 ED
7. Templeton (I) Equity Income(G) 1,749.86 20/04/06 0.83 ED
Franklin Templeton Mutual Funds
Birla Mutual Fund

1. 396.18 08/09/2006 0.42 ED
Birla Long Term Adv. Fund (G)
2. Birla Infrastructure Fund (G) 474.08 24/02/2006 1 ED
3. Birla India GenNext Fund (G) 159.40 12/07/2005 1.58 ED
4. Birla India Opportunities (G) 83.17 25/08/2003 3.5 ED
5. Birla Advantage Fund (G) 475.06 24/02/95 12 ED
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6. Birla Midcap Fund (G) 228.43 01/10/02 4.33 ED
7. Birla Top 100 Fund (G) 440.00 28/09/05 1.42 ED
8. Birla Equity Fund (G) 506.37 08/27/98 7.77 ED
9. Birla Frontline Equity (G) 124.74 30/08/2002 4.5 ED
v. Birla Dividend Yield Plus (G) 415.89 02/07/03 3.32
LIC Mutual Fund

1. 99.28 10/08/94 12.5 ED
1. LIC MF Growth Fund
2. 82.93 11/01/93 14.08 ED

2. LIC MF Equity Fund (G)
SBI Mutual Fund

1. Magnum Global Fund (G) 954.15 22/09/199 12.42 ED
4
2. Magnum Midcap Fund (G) 427.81 17/03/05 1.91 ED
3. Magnum Contra Fund (G) 1,448.78 31/07/99 7.57 ED
4. SBI Magnum Equity Fund (D) 265.98 1/01/1991 16.03 ED
5. Magnum Comma Fund (G 457.58 25/07/05 1.58 ED
6. Magnum Multiplier Plus (G) 745.07 01/03/93 13.91 ED
7. Magnum Multicap Fund (G) 1,079.18 16/09/05 1.41 ED
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8. Magnum Emerging Businesses 267.94 17/09/04 2.41 ED

(G)
9. Magnum NRI Fund - FA Plan (G) 13.64 13/01/04 3.08 ED
10 SBI Arbitrage Oppor. Fund (G) 214.38 15/09/06 0.41

.
11 SBI Blue Chip Fund (G) 1,936.34 20/01/06 1.08
.
DSP Merrill Lynch Mutual Fund

1. DSP-ML Small & MidCap- Inst 54.59 29/09/06 0.41 ED
(G)
2. DSP-ML Small & Mid Cap Fund 1,389.79 29/09/06 0.41 ED
(G)
3. DSP-ML Opportunities (G) 1,356.20 18/04/00 6.83 ED
4. DSP-ML Equity Fund 695.41 07/04/97 9.83 ED
5. DSP-ML Top 100 Equity (G) 299.47 21/02/03 4 ED
6. DSP-ML India T.I.G.E.R. (G) 1,481.34 25/05/04 2.75 ED
Kotak Mutual Fund
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1. Kotak Lifestyle Fund (G) 384.15 22/02/06 1 ED
2. Kotak 30 (G) 432.01 22/12/98 8.16 ED
3. Kotak Opportunities Fund (G) 224.26 25/08/04 2.5 ED
4. Kotak Global India Scheme (G) 111.85 16/01/04 3.08 ED
5. Kotak Contra (G) 143.59 01/07/05 1.58 ED
Standard Chartered Mutual Fund

1. StanChart Imperial Equity (G) 251.16 21/02/06 1 ED
2. StanChart Classic Equity (G) 372.11 14/07/05 3.16 ED
3. StanChart Premier Equity (G) 161.21 26/09/05 2.83 ED
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Tata Mutual Fund
S. No Scheme Name Fund Size Date of Age of the Fund

inception fund class
1. Tata Infrastructure Fund (G) 1,187.91 22/12/04 2.16 ED
2. Tata Select Equity Fund (G) 106.38 24/05/96 10.75 ED
3. Tata Pure Equity Fund (G) 292.23 07/05/98 8.75 ED
4. Tata Equity Opp. Fund (G) 440.12 30/03/93 13.96 ED
5. Tata Service Industries (G) 181.46 10/05/05 1.75 ED
6. Tata Equity P/E Fund (G) 84.53 15/06/04 2.66 ED
7. Tata Growth Fund (G) 33.29 15/06/94 12.66 ED
8. Tata Mid Cap Fund (G) 154.51 15/06/05 1.66 ED
9. Tata Dividend Yield Fund (G) 146.18 27/10/04 2.33 ED
10 Tata Contra Fund (G) 201.42 25/10/05 1.33 ED

.
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Principal Mutual Fund

1. Principal Large Cap Fund 251.90 19/10/05 1.33 ED
(G)
2. Principal Resurgent IEF 260.89 30/06/00 6.66 ED
(G)
3. Principal Growth Fund 260.03 25/10/00 6.33 ED
(G)
4. Principal Junior Cap Fund 71.00 08/06/05 1.66 ED
(G)
5. Principal Focussed Adv. 60.31 22/02/05 2 ED
(G)
6. Principal Global Oppor 436.71 19/03/04 2.91 ED
(G)
7. Principal Infra & Serv Ind 266.92 07/02/06 1 ED
(G)
8. Principal Dividend Yield 139.01 22/09/04 2.41 ED
(G)
HSBC Mutual Fund

1. HSBC India Opportunities (G) 607.88 13/02/04 3 ED
2. HSBC Equity Fund (G) 936.53 03/12/02 4.16 ED
3. HSBC Midcap Equity Fund (G) 311.51 03/05/05 1.75 ED
4. HSBC Advantage India Fund (G 1,216.90 27/01/06 1.08 ED
4 Step:
Absolute returns:
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The selected funds returns from date of launch to date of

inception
DOI
Scheme Name 1yr 2yr 3yr 4yr
NAV
()
1. UTI Master Plus 91(G) 62.79 13.8 98.8 120.5 309.2
2. UTI Mastershare (G) 33.08 7.8 66.8 110.4 --
3. UTI Equity Fund (G) 30.86 -2.2 64.9 121.3 313.5
4. UTI Master Value Fund (G) 27.23 -5.4 44.2 90.5 389.1
5. Pru ICICI Dynamic Plan 63.59 23.4 143.4 258.5 --
(G)
6. Pru ICICI Growth (G) 89.80 14.5 105.9 160.5 354.2
7. Pru ICICI Power (G) 78.11 15.6 116.6 191.0 559.2
8. Reliance Vision Fund (G) 171.46 13.7 100.3 185.8 795.4
9. Reliance Growth Fund (G) 259.81 17.1 124.8 267.3 982.5
10. HDFC Top 200 Fund G) 105.32 12.3 104.4 178.8 553.7
11. HDFC Equity Fund (G) 144.18 15.3 119.8 197.9 554.2
12. HDFC Capital Builder Fund 59.74 2.5 69.4 184.2 444.6
(G)
13. Franklin India Opportunity. 24.20 16.9 124.5 193.0 376.4
(G)
14. Franklin India Prima Plus 133.87 21.5 116.1 170.3 469.2
(G)
15. Franklin India Blue chip (G) 124.12 13.2 99.3 144.9 449.7
16. Birla Advantage Fund (G) 120.87 10.3 91.0 155.9 368.9
17. Birla Dividend Yield Plus 40.07 -2.6 45.0 98.7 --
(G)
18. Magnum Global Fund (G) 41.40 17.3 148.9 380.9 770.8
19. Magnum Contra Fund (G) 35.71 15.1 133.6 334.2 790.3
20. Magnum Multiplier Plus 50.92 11.2 139.8 260.9 544.9
(G)
21. DSP-ML Opportunities (G) 52.64 11.9 102.8 178.5 562.9

22. DSP-ML Equity Fund 37.47 16.0 112.3 205.2 541.5
23. Kotak 30 (G) 65.64 12.1 106.9 176.2 471.0
24. Tata Equity Opp. Fund (G) 55.55 5.8 101.0 180.1
25. HSBC India Opportunities 27.13 21.6 109.7 198.8 --
(G)
26. HSBC Equity Fund (G) 68.72 16.7 91.1 164.3 --
By observing the absolute returns of the schemes we find that Reliance
Growth Fund (G) is the one which is giving the good returns from the date of launch.
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5th STEP:
METHODOLOGY
 Returns
Scheme Names DOI Annualized returns (%) 4 yrs

NAV Avg Rtn
(28/02/07
)
1 yr 2yr 3yr 4yr
1. UTI Master Plus 91(G) 62.79 13.8 41.0 30.2 32.6 29.4
2. UTI Mastershare (G) 33.08 7.8 29.2 28.1 -- 21.7
3. UTI Equity Fund (G) 30.86 -2.2 28.4 30.3 32.8 22.33
4. UTI Master Value Fund (G) 27.23 -5.4 20.1 24.0 37.4 19.03
5. Pru ICICI Dynamic Plan (G) 62.25 52.5 57.2 41.8 52.5 51
6. Pru ICICI Growth (G) 89.80 14.5 43.5 37.6 35.3 32.73
7. Pru ICICI Power (G) 78.11 15.6 47.2 42.8 45.8 37.85
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8. Reliance Vision Fund (G) 171.46 13.7 41.5 41.9 55.0 38.03
9. Reliance Growth Fund (G) 259.81 17.1 49.9 54.3 61.0 45.58
10. HDFC Top 200 Fund G) 105.32 12.3 43.0 40.7 45.6 35.4
11. HDFC Equity Fund (G) 144.18 15.3 48.3 43.9 45.6 38.28
12. HDFC Capital Builder Fund (G) 59.74 2.5 30.2 41.6 40.3 28.65
13. Franklin India Opportunity. (G) 24.20 16.9 49.8 43.1 36.6 36.6
14. Franklin India Prima Plus (G) 133.87 21.5 47.0 39.3 41.6 37.35
15. Franklin India Blue chip (G) 124.12 13.2 41.2 34.8 40.6 32.45
16. Birla Advantage Fund (G) 120.87 10.3 38.2 36.8 36.2 30.38
17. Birla Dividend Yield Plus (G) 40.07 -2.6 20.4 25.7 -- 14.5
18. Birla Equity Fund(G) 175.05 16.4 49.1 50.0 46.1 40.4
19. Magnum Global Fund (G) 41.40 17.3 57.8 68.8 54.2 49.53
20. Magnum Contra Fund (G) 35.71 15.1 52.8 63.1 54.8 46.45
21. Magnum Multiplier Plus (G) 50.92 11.2 54.9 53.4 45.2 41.18
22. DSP-ML Opportunities (G) 52.64 11.9 42.4 40.7 46.0 35.25
23. DSP-ML Equity Fund 37.47 16.0 45.7 45.1 45.0 37.95
24. Kotak 30 (G) 65.64 12.1 43.8 40.3 41.7 34.48
25. Tata Equity Opp. Fund (G) 55.55 5.8 41.8 41.0 -- 29.53
26. HSBC India Opportunities (G) 27.13 21.6 44.8 44.0 -- 36.8
27. HSBC Equity Fund (G) 68.72 16.7 38.2 38.3 -- 31.07
Market Return
Market Return 1 yr 2yr 3yr 4yr Avg rtrn

Sensex 22.60 43.50 35.00 30.80 32.98
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Risk
 Standard Deviation:
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Scheme Names DOI Annualized Returns (%) 4 yr (SD)
NAV Avg
1 yr 2 yr 3 yr 4 yr
1. UTI Master Plus 62.79 13.8 41.0 30.2 32.6 29.4 11.38
91(G)
2. UTI Mastershare 33.08 7.8 29.2 28.1 -- 21.7 12.05
(G)
3. UTI Equity Fund 30.86 -2.2 28.4 30.3 32.8 22.33 16.45
(G)
4. UTI Master Value 27.23 -5.4 20.1 24.0 37.4 19.03 17.89
Fund (G)
5. Pru ICICI Dynamic Plan 62.25 52.5 57.2 41.8 52.5 51 6.52
(G)
6. Pru ICICI Growth (G) 89.80 14.5 43.5 37.6 35.3 32.73 12.63
7. Pru ICICI Power 78.11 15.6 47.2 42.8 45.8 37.85 14.95
(G)
8. Reliance Vision Fund 171.4 13.7 41.5 41.9 55.0 38.03 17.39
(G)
6
9. Reliance Growth Fund 259.8 17.1 49.9 54.3 61.0 45.58 19.52
(G)
1
10. HDFC Top 200 Fund G) 105.3 12.3 43.0 40.7 45.6 35.4 15.53
2
11. HDFC Equity Fund (G) 144.1 15.3 48.3 43.9 45.6 38.28 15.42
8
12. HDFC Capital Builder 59.74 2.5 30.2 41.6 40.3 28.65 18.16
Fund (G)
13. Franklin India 24.20 16.9 49.8 43.1 36.6 36.6 14.20
Opportunity. (G)
14. Franklin India Prima 133.8 21.5 47.0 39.3 41.6 37.35 11.05
Plus (G)
7
15. Franklin India Blue 124.1 13.2 41.2 34.8 40.6 32.45 13.15
chip (G)
2
16. Birla Advantage Fund 120.8 10.3 38.2 36.8 36.2 30.38 13.41
(G)
7
17. Birla Dividend Yield 40.07 -2.6 20.4 25.7 -- 14.5 15.04
Plus (G)
18. Birla Equity Fund(G) 175.0 16.4 49.1 50.0 46.1 40.4 16.09
5
19. Magnum Global Fund 41.40 17.3 57.8 68.8 54.2 49.53 22.36
(G)
20. Magnum Contra Fund 35.71 15.1 52.8 63.1 54.8 46.45 21.37
(G)
21. Magnum Multiplier Plus 50.92 11.2 54.9 53.4 45.2 41.18 20.43
(G)
22. DSP-ML Opportunities 52.64 11.9 42.4 40.7 46.0 35.25 15.72
(G)
23. DSP-ML Equity Fund 37.47 16.0 45.7 45.1 45.0 37.95 14.64
24. Kotak 30 (G) 65.64 12.1 43.8 40.3 41.7 34.48 14.99
25. Tata Equity Opp. Fund 55.55 5.8 41.8
BABASAB PATIL 41.0 -- 29.53 20.56
(G)
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26. HSBC India 27.13 21.6 44.8 44.0 -- 36.8 13.17
Opportunities (G)
27. HSBC Equity Fund (G) 68.72 16.7 38.2 38.3 -- 31.07 12.44
SD = n ∑X2 – (∑X)2
n (n-1)
It is used to measure the variation in individual returns from the average

expected returns over a certain period. Standard deviation is used in the
concept of risk of a portfolio of investments. Higher standard deviation means
a greater fluctuation in expected return.
 BETA:
S.No Scheme Names 4 Years avg

Beta
Returns
1. UTI Master Plus 91(G) 29.4 0.45974
2. UTI Mastershare (G) 21.7 0.5195
3. UTI Equity Fund (G) 22.33 0.51445
4. UTI Master Value Fund (G) 19.03 0.38752
5. Pru ICICI Dynamic Plan (G) 51 0.04588
6. Pru ICICI Growth (G) 32.73 0.50621
7. Pru ICICI Power (G) 37.85 0.53133
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8. Reliance Vision Fund (G)

38.03
0.42884
9. Reliance Growth Fund (G) 45.58 0.53642
1 HDFC Top 200 Fund G)
35.4 0.50859
0.
1 HDFC Equity Fund (G)
38.28 0.55997
1.
1 HDFC Capital Builder Fund (G)
28.65 0.47609
2.
1 Franklin India Opportunity. (G)
36.6 0.58826
3.
1 Franklin India Prima Plus (G)
37.35 0.43023
4.
1 Franklin India Blue chip (G)
32.45 0.46015
5.
1 Birla Advantage Fund (G)
30.38 0.48017
6.
1 Birla Dividend Yield Plus (G)
14.5 0.57688
7.
1 Birla Equity Fund(G)
40.4 0.57362
8.
1 Magnum Global Fund (G)
49.53 0.74307
9.
2 Magnum Contra Fund (G)
46.45 0.67269
0.
2 Magnum Multiplier Plus (G)
41.18 0.77797
1.
2 DSP-ML Opportunities (G)
35.25 0.50358
2.
2 DSP-ML Equity Fund
37.95 0.50899
3.
2 Kotak 30 (G)
34.48 0.53857
4.
2 Tata Equity Opp. Fund (G) 29.53 0.87693
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2 HSBC India Opportunities (G)

36.8 0.56432
6.
2 HSBC Equity Fund (G)
31.07 0.52537
7.
ß = Covar / σm2
Where, Covariance (covar) is the average of the products of deviations for

each data point pair. And, covar is calculated as:
Covar = 1/n Σ(xi –µ x)(yi - µy)
σm2 = Market Variance
Beta describes the relationship between the stock’s return and the index returns. it
describes the risk in the portfolio with comparing market risk as 1 .
If beta =1
One percent changes in market index return causes exactly one percent change in
the stock returns. it indicates that the stock moves in tandem with the market .
If Beta <1
Then the stock is less volatile compared to the market.
If Beta >1
Then the stock is more volatile compared to the market. The stock value
With more then 1 beta value is considered to be risky.
If Beta –ve: native Beta indicates that the stock returns moves in the opposite
direction to the market return.
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Returns and risk for the top 10 companies having the highest
portfolio returns (Rp).
Scheme Names DOI nav 5 yrs SD Beta

Avg
Rtrn
1. Pru ICICI Dynamic Plan 62.25 51
6.52 0.05
(G)
2. Magnum Global Fund (G) 41.40 49.53 22.36 0.74
3. Magnum Contra Fund (G) 35.71 46.45 21.37 0.67
4. Reliance Growth Fund (G) 259.81 45.58 19.52 0.54
5. Magnum Multiplier Plus 50.92 41.18
20.43 0.78
(G)
6. Birla Equity Fund(G) 175.05 40.4 16.09 0.57
7. HDFC Equity Fund (G) 144.18 38.28 15.42 0.56
8. Reliance Vision Fund (G) 171.46 38.03 17.39 0.43
9. DSP-ML Equity Fund 37.47 37.95 14.64 0.51
10. Pru ICICI Power (G) 78.11 37.85 14.95 0.53
Sharpe’s Index:
Sharpe’s index measures the risk premium of the portfolio relative to the total
amt of risk in the portfolio. This risk premium is the difference between the
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portfolio’s average rate of return and the risk less rate of return. The index assigns the
highest values to assets that have best risk-adjusted average rate of returns.
4 Yr
DOI NAV Avg
Scheme Names 28/02/07 Rtrn Rf Sd(σ) St
Rp
1. Pru ICICI Dynamic Plan 62.25 51 7.06
5 6.52
(G)
2. Magnum Global Fund (G) 41.40 49.53 5 22.36 1.99
3. Magnum Contra Fund (G) 35.71 46.45 5 21.37 1.94
4. Reliance Growth Fund 259.81 45.58 2.08
5 19.52
(G)
5. Magnum Multiplier Plus 50.92 41.18 1.77
5 20.43
(G)
6. Birla Equity Fund(G) 175.05 40.4 5 16.09 2.20
7. HDFC Equity Fund (G) 144.18 38.28 5 15.42 2.16
8. Reliance Vision Fund (G) 171.46 38.03 5 17.39 1.90
9. DSP-ML Equity Fund 37.47 37.95 5 14.64 2.25
10. Pru ICICI Power (G) 78.11 37.85 5 14.95 2.20
Rp - Rf
St = Sd(σ)
Where,
Rp = Average portfolio returns
Rf = Risk free rate of rate (5%)
Sd(σ) = Standard Deviation (Risk) of returns
Treynor’s Index:
Treynor’s index sums up the risk and return of the portfolio in a
single number, while categorizing the performance of the portfolio.
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4 Yr
DOI NAV
Scheme Names Avg Rtrn Beta
28/02/07
Rp
Rf Tr
β
1. Pru ICICI Dynamic Plan 62.25
51 5 0.05 1002.62
(G)
2. Magnum Global Fund (G) 41.40 49.53 5 0.74 59.93
3. Magnum Contra Fund (G) 35.71 46.45 5 0.67 61.62
4. Reliance Growth Fund 259.81
45.58 5 0.54 75.65
(G)
5. Magnum Multiplier Plus 50.92
41.18 5 0.78 46.51
(G)
6. Birla Equity Fund(G) 175.05 40.4 5 0.57 61.71
7. HDFC Equity Fund (G) 144.18 38.28 5 0.56 59.43
8. Reliance Vision Fund (G) 171.46 38.03 5 0.43 77.02
9. DSP-ML Equity Fund 37.47 37.95 5 0.51 64.74
10. Pru ICICI Power (G) 78.11 37.85 5 0.53 61.83
Rp – Rf
Tr =
βp
Tr = Treynor’s Performance index

Rp = Average portfolio returns
Rf = Risk free rate of rate (5%)
βp = A Measure of systematic risk ( Co-efficient to be estimated)
Jensen’s Alpha index:
DOI
Alfa
Scheme Names BetaRm
NAV Rp Rf α/β
28/02/07 α
β
1. Pru ICICI 62.25 51 5 0.05 32.98 44.7 974.636
Dynamic Plan 2
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(G)
2. Magnum 41.40
23.7
Global Fund 49.53 5 0.74 32.98 31.947
4
(G)
3. Magnum 35.71
22.6
Contra Fund 46.45 5 0.67 32.98 33.638
3
(G)
4. Reliance 259.81
25.5
Growth Fund 45.58 5 0.54 32.98 47.670
7
(G)
5. Magnum 50.92
14.4
Multiplier Plus 41.18 5 0.78 32.98 18.526
1
(G)
6. Birla Equity 175.05 19.3
40.4 5 0.57 32.98 33.733
Fund(G) 5
7. HDFC Equity 144.18 17.6
38.28 5 0.56 32.98 31.452
Fund (G) 1
8. Reliance Vision 171.46 21.0
38.03 5 0.43 32.98 49.042
Fund (G) 3
9. DSP-ML 37.47 18.7
37.95 5 0.51 32.98 36.756
Equity Fund 1
10. Pru ICICI 78.11 17.9
37.85 5 0.53 32.98 33.846
Power (G) 8
α = ( Rp- Rf)-beta(Rm- Rf)

Where,
Rp = Average Portfolio Return
Rf = Risk Free rate of interest (5%)
β = A measure of systematic risk
Rm = Average Market Return
Performance evaluation for Top 10 equity diversified schemes on
the basis of three Performance Indexes i.e., (Sharpe’s, Treynor’s
and Jensen’s Performance Index).
NAV
Scheme Names Rp Beta SD Sharpe’s Treynor’s Jensen’s
28/02/07
1. Pru ICICI
Dynamic 62.25 51 0.05 6.52 7.06 1002.62 974.636
Plan (G)
2. Magnum 41.40 49.53 0.74 22.36 1.99 59.93 31.947
Global Fund
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(G)
3. Magnum
Contra Fund 35.71 46.45 0.67 21.37 1.94 61.62 33.638
(G)
4. Reliance
Growth 259.81 45.58 0.54 19.52 2.08 75.65 47.670
Fund (G)
5. Magnum
Multiplier 50.92 41.18 0.78 20.43 1.77 46.51 18.526
Plus (G)
6. Birla Equity
175.05 40.4 0.57 16.09 2.20 61.71 33.733
Fund(G)
7. HDFC
Equity Fund 144.18 38.28 0.56 15.42 2.16 59.43 31.452
(G)
8. Reliance
Vision Fund 171.46 38.03 0.43 17.39 1.90 77.02 49.042
(G)
9. DSP-ML
37.47 37.95 0.51 14.64 2.25 64.74 36.756
Equity Fund
10. Pru ICICI
78.11 37.85 0.53 14.95 2.20 61.83 33.846
Power (G)
RANKING OF SCHEMES
Ranking on the basis of Sharpe’s Performance index:
DOI
Sharpe’s
Scheme Names NAV Rp SD Rank
Index
28/02/07
1. Pru ICICI Dynamic 7.055
62.25 51 6.52 1
Plan (G)
2. DSP-ML Equity Fund 14.64 2.251
37.47 37.95 2
3. Birla Equity Fund(G) 16.09 2.200
175.05 40.4 3
4. Pru ICICI Power (G) 14.95 2.197
78.11 37.85 4
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5. HDFC Equity Fund (G) 15.42 2.158

144.18 38.28 5
6. Reliance Growth Fund 19.52 2.079
259.81 45.58 6
(G)
7. Magnum Global Fund 22.36 1.992
41.40 49.53 7
(G)
8. Magnum Contra Fund 21.37 1.940
35.71 46.45 8
(G)
9. Reliance Vision Fund 17.39 1.899
171.46 38.03 9
(G)
10. Magnum Multiplier 20.43
50.92 41.18 1.77 10
Plus (G)
Chart showing the performance according to Sharpe’s Index

Chart showing the performance according to Sharpe's Index Pru ICICI Dynamic
Plan (G)
8 DSP-ML Equity Fund
7 Birla Equity Fund(G)
6 Pru ICICI Power (G)

Sharpe's Measure
5 HDFC Equity Fund (G)
4
Reliance Growth Fund
(G)
3
Magnum Global Fund
(G)
2
Magnum Contra Fund
1 (G)
BABASAB PATIL Reliance Vision Fund
0 -68- (G)
Magnum Multiplier Plus
Equity Diversified Schemes (G)
According to Sharpe’s performance index Pru ICICI Dynamic Plan is the

best Equity Diversified Scheme because this scheme is having the best risk-adjusted
rate of return.
Ranking on the basis of Treynor’s index:
Scheme Names DOI RP Beta Treynor’s Rank

NAV Index
28/02/07
1. Pru ICICI Dynamic 0.05
62.25 51 1002.62 1
Plan (G)
2. Reliance Vision 38.03 0.43
171.46 77.02 2
Fund (G)
3. Reliance Growth 0.54
259.81 45.58 75.65 3
Fund (G)
4. DSP-ML Equity 0.51 64.74
37.47 37.95 4
Fund
5. Pru ICICI Power 78.11 0.53 61.83
37.85 5
(G)
6. Birla Equity 0.57 61.71
175.05 40.4 6
Fund(G)
7. Magnum Contra 0.67
35.71 46.45 61.62 7
Fund (G)
8. Magnum Global 0.74
41.40 49.53 59.93 8
Fund (G)
9. HDFC Equity Fund 0.56
144.18 38.28 59.43 9
(G)
10. Magnum Multiplier 0.78
50.92 41.18 46.51 10
Plus (G)
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Chart showing the performance according to Treynor’s Index
Chart showing the performance according to Treynor's Index 1. Pru ICICI Dynamic
Plan (G)
1200 2. Reliance Vision Fund
(G)
3. Reliance Growth Fund
1000 (G)
4. DSP-ML Equity Fund
Treynor's measure
800
5. Pru ICICI Power (G)
600
6. Birla Equity Fund(G)
400 7. Magnum Contra Fund

(G)
8. Magnum Global Fund
200
(G)
9. HDFC Equity Fund
0 (G)
Equity Diversified Schems 10. Magnum Multiplier
Plus (G)
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According to Treynor’s performance index Pru ICICI Dynamic Plan ranked

as first best Equity Diversified Scheme because this scheme is having the best risk-
adjusted rate of return followed by Reliance Vision Fund (G).
DOI Jensen’s
Scheme Names NAV Rp Measur Rank
28/02/07 e
1. Pru ICICI Dynamic Plan (G) 974.64
62.25 51 1
2. Reliance Vision Fund (G) 49.04
171.46 38.03 2
3. Reliance Growth Fund (G) 47.67
259.81 45.58 3
4. DSP-ML Equity Fund 36.76
37.47 37.95 4
5. Pru ICICI Power (G) 33.85
78.11 37.85 5
6. Birla Equity Fund(G) 33.73
175.05 40.4 6
7. Magnum Contra Fund (G) 33.64
35.71 46.45 7
8. Magnum Global Fund (G) 31.95
41.40 49.53 8
9. HDFC Equity Fund (G) 31.45
144.18 38.28 9
10. Magnum Multiplier Plus (G) 18.53
50.92 41.18 10
Ranking on the basis of Jensen’s Alfa Measure:
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Chart showing the performance according to Jensen's performance

measure
Chart showing the performance according to Jensen's Performance

Measure
1. Pru ICICI Dynamic
Plan (G)
1200
2. Reliance Vision Fund
(G)
1000 3. Reliance Growth
Fund (G)
4. DSP-ML Equity Fund
Jensen's Measure
800
5. Pru ICICI Power (G)
600
6. Birla Equity Fund(G)
400 7. Magnum Contra Fund

(G)
200 8. Magnum Global Fund

(G)
9. HDFC Equity Fund
0 (G)
Equity Diversified Schemes 10. Magnum Multiplier
Plus (G)
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According to Jensen’s performance Measure, Pru ICICI Dynamic Plan ranked as

first best Equity Diversified Scheme followed by Reliance Vision Fund (G).
Classification of Risk into Systematic (un-diversifiable) and

Unsystematic (diversifiable)
Scheme 5 yrs SD Beta Systematic Unsystematic (% ) (%)

Risk Risk Un-
Names Avg (ß) Systemat
(SD -
(ß2*σm2) ic Systematic
Rtrn Systematic
Risk
risk) Risk
1. Pru 51
ICICI 0.0458
Dynami 6.52 0.002105 6.3605499 2.45 97.55
c Plan 8
(G)
2. Magnu 49.5
m 0.7430
3 22.3
Global 0.552153 -19.465133 100.00 0.00
6
Fund 7
(G)
3. Magnu 46.4
m 5 21.3 0.6726
Contra 0.4525118 -12.907396 100.00 0.00
Fund 7 9
(G)
4. Reliance 45.5
Growth 8 19.5 0.5364
Fund
0.2877464 -2.2765522 100.00 0.00
2
(G) 2
5. Magnu 41.1
m 8 0.7779
20.4
Multipli 0.6052373 -25.416225 100.00 0.00
3
er Plus 7
(G)
6. Birla 40.4
Equity 16.0 0.5736
0.3290399 -8.8344997 100.00 0.00
Fund(G) 9
2
7. HDFC 38.2 15.4 0.3135664 -8.3323946 100.00 0.00
Equity 0.5599
8 2
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Fund
(G) 7
8. Reliance 38.0
Vision 3 17.3 0.4288
Fund
0.1839037 3.4594439 80.11 19.89
9
(G) 4
9. DSP- 37.9
ML 5 14.6 0.5089
Equity
0.2590708 -4.9843996 100.00 0.00
4
Fund 9
10. Pru 37.8
ICICI 5 14.9 0.5313
Power
0.2823116 -6.434867 100.00 0.00
5
(G)
3
When we consider the systematic and un-systematic risk Pru ICICI Dynamic (G)
has got 2.45% of systematic risk and 97.55% of unsystematic risk and Reliance
Vision Fund (G) 80.11% systematic risk and 19.89% of unsystematic risk. And other
all schemes have got 0% of Unsystematic risk.
BABASAB PATIL
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Finding and Suggestions:
 According to the Absolute returns of the scanned Equity Diversified

Schemes of the top listed AMCs, Reliance Growth Fund (G) is the one
which is giving good returns from the date of launch.
 According to Sharpe’s performance Index we find that Pru ICICI

Dynamic Plan (G) is ranked as 1st and DSP-ML Equity Fund as 2nd rank
and Birla Equity Fund (G) as 3rd Rank. The Sharpe’s index considers
total risk of the Scheme.
 According to Treynor’s Performance Index, Pru ICICI Dynamic Plan (G)

is ranked as 1st followed by Reliance Vision Growth (G) (2nd Rank) and
Reliance Growth Fund (G) (3rd Rank).
The Treynor’s index considers the return premium for systematic
risk undertaken.
 According to Jensen’s Performance Index, Pru ICICI Dynamic Plan (G)

is ranked as 1st followed by Reliance Vision Fund (G) (2nd Rank) and
Reliance Growth Fund (G) (3rd Rank).
The Jensen’s index compares the actual or relized return of the
portfolio with calculated return and hence depicts the predictive ability
of the managerial personnel.
 According to all the three indexes Pru ICICI Dynamic Plan (G). is the
best equity diversified scheme because this particular scheme is having
the best risk adjusted rate of return.
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 When we consider the systematic and un-systematic risk, Pru ICICI

Dynamic (G) has got 2.45% systematic risk and 97.55% of unsystematic
risk and Reliance vision (G) 80.11% systematic risk and 19.89% of
unsystematic risk. And other all schemes have 0% of Unsystematic risk
which means that they are diversified to the fullest extent and the risk is
only due to market factors.
Conclusion
The construction of the mutual fund scheme’s portfolio is done by taking
various factors so even after evaluating the mutual funds and ranking them we cannot
say which is the best scheme in all.
BABASAB PATIL
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Bibliography
 UTI records
 Text Books referred:

 Punithvathy. Pandian
 Fisher and Jorden
 Web Sites:
 www.moneycontrol.com
 www.amfiindia.com
 www.icicidirect.com
BABASAB PATIL
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Performance Evaluation Risk and Return of Mutual Fund

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Performance Evaluation Risk and Return of Mutual Fund

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A study on “Performance Evaluation of Mutual Funds with

Reference to risk and return”

- Purpose of the study

UTI securities ltd. (UTISEL) has been working as an independent

professional entity for providing financial intermediary and advisory services to

Performance of Mutual Funds with reference to Risk and Returns”, conducted at

the returns and the risk associated with those schemes.

OBJECTIVES OF THE STUDY

 To know the performance of Mutual Fund of different companies.

 To evaluate the investment performance of mutual funds with risk

adjustment, by using the theoretical parameters as suggested by

William. Sharpe, Treynor and Jensen.

subjected to inconsistencies arising out of the assumptions made to make the

portfolios comparable viz., sample selection procedure, portfolio proportion

Secondary data - Reports from UTI securities and other reports

from related websites.

An investment means employment of funds on assets (i.e. securities or mutual

 Return from the investment

Following are the various investment alternatives.

Negotiable and fixed income securities

Introduction to Mutual Funds

What is a Mutual Fund?

money management to the individual investor, providing an opportunity for financial

success that was once available only to a select few.

Understanding Mutual funds is easy as it's such a simple concept: a mutual

invest in a variety of different securities. Investments may be in stocks, bonds, money

market securities or some combination of these. Those securities are professionally

losses in value as well.

started in mutual funds.

different objectives and levels of growth potential, furthering your chances to

In most of the countries, mutual funds have emerged as strong rivals to

Mutual Funds can be broadly classified under 3 heads namely

According to SEBI (Mutual Fund) regulatins1993, “Mutual fund means

However in the Indian context it is safe to define “Mutual Fund as trusts

Why invest in Mutual Funds.

Professional investment management

Convenience and Flexibility

Mutual fund route offers several important advantages.

 In the case of investment in equity shares or debentures, the allotment

Classification of Mutual Fund Schemes

Portfolio classification projects the combination of investment instruments and

A. Operational Classification or on Structural basis:

Open Ended Schemes:

Moreover, desiring frequently traded securities, open-ended schemes

These companies ell new shares at NAV plus a loading or management

(b) Close Ended Schemes:

There is no necessary relationship between the price of close-ended

B. Portfolio classification of mutual funds.

Equity (Stock) Funds:

Aggressive growth funds purchase shares of stock in smaller companies, which

It is Similar to international, but with the option of investing anywhere

Growth and income:

Unlike traditional stock funds, which are managed actively by a portfolio

Concentrates investments on a narrow market sector like Health care, internal

Real estate funds:

C. Geographical Classification of Mutual Funds

National boundaries provide territorial restrictions on the sale and

1) Domestic Mutual Funds

2) Offshore Mutual Funds

Domestic Mutual Funds

Offshore Mutual Funds

The basic objective of opening offshore Mutual fund scheme is to attract

From investment point of view too, offshore Mutual funds open up

The major point of difference between offshore Mutual funds and

Mutual funds can also be functionally classified into Close-ended or Open-

Characteristics of Mutual Fund Schemes