Mutual Funds are among the hottest favorites with

all types of investors. Investing in mutual funds

ranks among one of the preferred ways of creating
wealth over the long term. In fact, mutual funds
represent the hands-off approach to entering the
equity market. There are a wide variety of mutual
funds that are viable investment avenues to meet a
wide variety of financial goals. This section explains
the various aspects of Mutual Fund
 A
PROJECT
ON

“Return generated from Mutual fund and

IPO”

FOR THE SESSION

2007-2008

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF DEGREE OF

Bachelor of Business Administration

Submitted To: Submitted By:

Prof. A.S. Khalsa RAVIRAJ DUBEY
!
 PREFACE

The research provides an opportunity to a student to demonstrate application of his /

her knowledge, skill and competencies required during the technical session. Research
also helps the student to devote his / her skill to analyze the problem to suggest
alternative solutions, to evaluate them and to provide feasible recommendations on the
provided data.

The research is on the topic of “RETURN GENERATED FROM MUTUAL FUND AND IPO OF THE

BANKING SECTOR”. Although I have tried my level best to prepare this report an error free
report every effort has been made to offer the most authenticate position with accuracy.
 DECLARATION

I hereby declare that the following project report titled “RETURN GENERATED FROM
MUTUAL FUND & IPO” is an authentic work done by me.

This is to declare that all my work indulged in the completion of this Project Report
such as research, survey, data analysis & interpretation is a profound and honest
work of mine.

RAVIRAJ DUBEY
CHAPTER 1:- CONCEPTUAL OVERVIEW.

1.1 Introduction to the Topic.

CHAPTER 2:- RESEARCH AND METHODOLOGY

2.1 Objective of the Study.

2.2 Method

2.3 Significance

2.4 Hypothesis

2.5 Limitations

CHAPTER 3:- CONCEPT OF MUTUAL FUND

3.1 Mutual fund meaning

3.2 A brief history of mutual fund in India

3.3 Types of mutual fund

3.4 Advantage of mutual fund

3.5 Disadvantage of mutual funds

3.6 Picking of mutual fund

CHAPTER 4:- CONCEPT OF IPO

4.1 Introduction of IPOs

4.2 Why Do Companies Offer IPOs

4.3 How to make IPOs

CHAPTER 5:- CASE STUDY

5.1 Introduction to the Mutual Fund Company& IPO (NSE) release of the above
Companies last 3 Year in same period

5.2 Introduction of Mutual Fund Scheme

5.3 Data Analysis

CHAPTER 6:- FINDINGS

CHAPTER 1
 Return generated from Mutual Fund & Initial Public
Offering

Conceptual Overview:-

Mutual Fund:-
Mutual Fund is a investment company that pools money from shareholders and invests
in a variety of securities, such as stocks, bonds and money market instruments. Most
open-end mutual funds stand ready to buy back (redeem) its shares at their current net
asset value, which depends on the total market value of the fund's investment portfolio
at the time of redemption. Most open-end mutual funds continuously offer new shares to
investors
IPO – Initial Public Offering
As you can see, the road to an IPO is a long and complicated one. You may have noticed that
individual investors aren't involved until the very end. This is because small investors aren't the
target market. They don't have the cash and, therefore, hold little interest for the underwriters.
If underwriters think an IPO will be successful, they'll usually pad the pockets of their favourite
institutional client with shares at the IPO price. The only way for you to get shares (known as an
IPO allocation) is to have an account with one of the investment banks that is part of the
underwriting syndicate. But don't expect to open an account with Rs.1, 000 and be showered
with an allocation. You need to be a frequently trading client with a large account to get in on a
hot IPO.

Bottom line, your chances of getting early shares in an IPO are slim to none unless you're on
the inside. If you do get shares, it's probably because nobody else wants them. Granted, there
are exceptions to every rule and it would be incorrect for us to say that it's impossible. Just keep
in mind that the probability isn't high if you are a small investor

Public issues can be classified into Initial Public offerings and further public offerings. In a public
offering, the issuer makes an offer for new investors to enter its shareholding family. The issuer
company makes detailed disclosures as per the DIP guidelines in its offer document and offers
it for subscription. Initial Public Offering (IPO ) is when an unlisted company makes either a
fresh issue of securities or an offer for sale of its existing securities or both for the first time to
the public. This paves way for listing and trading of the issuer’s securities.
OBJECTIVES
1) To Study of Return generated from various mutual fund and IPO
2) To Know various scheme of mutual fund

SIGNIFICANCE: -

The significance of this study of mutual fund helps us to know various Investment
options. With specific mutual fund offer several advantages over investing in
individual stock including diversification and professional management.

IPO based on the company’s goodwill. IPO helps to raise the fund to invest in
project to stimulate growth and if successful to increase the value per share of
the company.

RESEARCH METHODOLOGY: -
The return of the last three year of the company which is equity diversifies and
comparison of the company’s mutual fund and IPO to be made generated to
various IPO. The sample of three IPO to concern of the same period

LIMITATIONS: -
Period, Scheme to make conclude to different Inferences
 3.1 MEANING OF THE MUTUAL FUND
A mutual fund is a common pool of money into which investor place their conurbation that are to
be invested in accordance with stated objectives. The ownership o the fund is thus joint or
“mutual” the fund belong to all investors. A single investor ownership of the fund is in the same
proportion as the amount of the contribution made by him or her bear to the total amount of the
fund.
A mutual fund uses the money collected from investor to those assets which are
specifically permitted by it stated investment objective. Thus equity would buy mainly equity
assets ordinary shares preferences share, warrants etc. A bond fund would mainly buy debt
instrument such as debenture, bond, or government securities. It is this asset which is owned by
the investor in the same proportion as their contribution bear to the total contribution of al
investors put together.
When an investors subscribes to a mutual fund. He or she buys a part of the
assets or the pool of funds that are outsourcing at that time.
It is no different from buying “share” of a joint stock company in which case the purchase makes
the investor a part owner of the company and its assets. In fact in the U.S. A. a mutual fund is
constituted as an investment company and an investor “buy into the fund” meaning he buy the
shares of the fund.
In India mutual fund is constituted as a trust and the investor subscribes to the
“units” issued by the fund which is where the term unit trust comes from. However whether the
investor gets fund share or units is only a matter of legal distinction in any case. Mutual fund
shareholder assets throughout this workbook we have used the term unit holder to denote the
mutual fund investor in line with the common Indian usage of the term. The term unit holder
includes the mutual fund account. A units-holder includes the mutual fund account-holder or
closed and fund share-holder.
A unit holder in UTI US-64 share is the same as a UTI master share holder or an
investor in all an alliance or DSP Merrill luchor prudential ICICI or TATA or TEMPTON or SBI or
any other fund manager’s open-end or closed-end scheme.

Since each owner is a part owner of a mutual fund, it is necessary to establish the value of his
part. In other word each share or unit that an investor holds need to be assigned a value since
the units held by an investor evidence the owner ship of the fund’s assets the value of total
assets of the fund when divided by the total number of units issued by the mutual fund gives us
the value of on a units.
This is generally called the NAV (NET ASSETS VALUE) of one unit or one share.
The value of an investor’s part ownership is thus determined by NAV of the number of unit held.
Lets us see an example. If the value of a fund’s assets stand at Rs 1000 and it has 10 investors
who have brought 10 units each, the total number of units issued is 100, and the value one units
is Rs 10.00 (1000/100). If a single investor in fact owns 3 units the value of’ ownership of the
fund will be Rs 30.00 (1000/100*3) units. Not that the value of the fund’s investment will keep
fluctuating with the market price movement causing the Net Assets Value also to fluctuated.
For example if the value of our assets increased from Rs 1000 to 1200 , the
value of our investor’s holding of 3 units will be (1200/1000*3) Rs 36.
The investment value can go up or down depending on the market value of the fund is assts.
Understanding Mutual Funds

Mutual fund is a trust that pools money from a group of investors (sharing common financial
goals) and invest the money thus collected into asset classes that match the stated investment
objectives of the scheme. Since the stated investment objectives of a mutual fund scheme
generally form the basis for an investor's decision to contribute money to the pool, a mutual fund
can not deviate from its stated objectives at any point of time.
Every Mutual Fund is managed by a fund manager, who using his investment management
skills and necessary research works ensures much better return than what an investor can
manage on his own. The capital appreciation and other incomes earned from these investments
are passed on to the investors (also known as unit holders) in proportion of the number of units
they own.
 Concept of Mutual Fund

Many investor with common

financial objectives pool their money

Investors, on a proportionate basis, get mutual

fund units for the sum contributed to the pool

The money collected from investors is invested into

shares, debentures and other securities by the fund
manager

The fund manager realizes gains or losses, and collects

dividend or interest income

Any capital gains or losses from such investments are

passed on to the investors in proportion of the number of

When an investor subscribes for the units of a mutual fund, he becomes part owner of the
assets of the fund in the same proportion as his contribution amount put up with the corpus (the
total amount of the fund). Mutual Fund investor is also known as a mutual fund shareholder or a
unit holder.
Any change in the value of the investments made into capital market instruments (such as
shares, debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is
defined as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a
scheme is calculated by dividing the market value of scheme's assets by the total number of
units issued to the investors.
For example:
A. If the market value of the assets of a fund is Rs. 100,000
B. The total number of units issued to the investors is equal to 10,000.
C. Then the NAV of this scheme = (A)/(B), i.e. 100,000/10,000 or 10.00
D. Now if an investor 'X' owns 5 units of this scheme Then his total contribution to the fund
is Rs. 50 (i.e. Number of units held multiplied by the NAV of the scheme)

3.2 A brief history of Mutual Fund in India

Unit Trust of India (UTI) was the first mutual fund set up in India in the year 1963. In early
1990s, Government allowed public sector banks and institutions to set up mutual funds. UTI has
an extensive marketing network of over 40,000 agents all over the country.
In the year 1992, Securities and exchange Board of India (SEBI) Act was passed. The
objectives of SEBI are – to protect the interest of investors in securities and to promote the
development of and to regulate the securities market.

In 1995, the RBI permitted private sector institutions to set up Money Market Mutual Funds
(MMMFs). They can invest in treasury bills, call and notice money, commercial paper,
commercial bills accepted/co-accepted by banks, certificates of deposit and dated government
securities having unexpired maturity up to one year.

As far as mutual funds are concerned, SEBI formulates policies and regulates the mutual funds
to protect the interest of the investors. SEBI notified regulations for the mutual funds in 1993.
Thereafter, mutual funds sponsored by private sector entities were allowed to enter the capital
market. The regulations were fully revised in 1996 and have been amended thereafter from time
to time. SEBI has also issued guidelines to the mutual funds from time to time to protect the
interests of investors.
All mutual funds whether promoted by public sector or private sector entities including those
promoted by foreign entities are governed by the same set of Regulations. There is no
distinction in regulatory requirements for these mutual funds and all are subject to monitoring
and inspections by SEBI. The risks associated with the schemes launched by the mutual funds
sponsored by these entities are of similar type.
 3.3 TYPES OF MUTUAL FUNDS
General Classification of Mutual Funds
1. Open-end Funds/Closed-end Funds
Open-end Fund:-
Funds that can sell and purchase units at any point in time are classified as
Open-end Funds. The fund size (corpus) of an open-end fund is variable (keeps
changing) because of continuous selling (to investors) and repurchases (from the
investors) by the fund. An open-end fund is not required to keep selling new units
to the investors at all times but is required to always repurchase, when an
investor wants to sell his units. The NAV of an open-end fund is calculated every
day.

Closed-end Funds
Funds that can sell a fixed number of units only during the New Fund Offer
(NFO) period are known as Closed-end Funds. The corpus of a Closed-end Fund
remains unchanged at all times. After the closure of the offer, buying and
redemption of units by the investors directly from the Funds is not allowed.
However, to protect the interests of the investors, SEBI provides investors with
two avenues to liquidate their positions:
Closed-end Funds are listed on the stock exchanges where investors can buy/sell units from/to
each other. The trading is generally done at a discount to the NAV of the scheme. The NAV of a
closed-end fund is computed on a weekly basis (updated every Thursday).
Closed-end Funds may also offer "buy-back of units" to the unit holders. In this case, the corpus
of the Fund and its outstanding units do get changed.

2. Load Funds/No Load Fund

Load Funds:
Mutual Funds incur various expenses on marketing, distribution, advertising,
portfolio churning, fund manager's salary etc. Many funds recover these
expenses from the investors in the form of load. These funds are known as Load
Funds. A load fund may impose following types of loads on the investors:
Entry Load - Also known as Front-end load, it refers to the load charged to an investor at the
time of his entry into a scheme. Entry load is deducted from the investor's contribution amount
to the fund.
Exit Load - Also known as Back-end load, these charges are imposed on an investor when he
redeems his units (exits from the scheme). Exit load is deducted from the redemption proceeds
to an outgoing investor.
Deferred Load - Deferred load is charged to the scheme over a period of time.
Contingent Deferred Sales Charge (CDSC) - In some schemes, the percentage of exit load
reduces as the investor stays longer with the fund. This type of load is known as Contingent
Deferred Sales Charge.

No-load Funds
All those funds that do not charge any of the above mentioned loads are known
as No-load Funds.

3. Tax-exempt Funds /Non Tax exempt Funds

Tax-exempt Funds:
Funds that invest in securities free from tax are known as Tax-exempt Funds. All
open-end equity oriented funds are exempt from distribution tax (tax for
distributing income to investors). Long term capital gains and dividend income in
the hands of investors are tax-free.

Non-Tax-exempt Funds
Funds that invest in taxable securities are known as Non-Tax-exempt Funds. In
India, all funds, except open-end equity oriented funds are liable to pay tax on
distribution income. Profits arising out of sale of units by an investor within 12
months of purchase are categorized as short-term capital gains, which are
taxable. Sale of units of an equity oriented fund is subject to Securities
Transaction Tax (STT). STT is deducted from the redemption proceeds to an
investor
1. Equity Funds
Equity funds are considered to be the more risky funds as compared to other fund types,
but they also provide higher returns than other funds. It is advisable that an investor
looking to invest in an equity fund should invest for long term i.e. for 3 years or more.
There are different types of equity funds each falling into different risk bracket. In the
order of decreasing risk level, there are following types of equity funds:
a. Aggressive Growth Funds - In Aggressive Growth Funds, fund managers
aspire for maximum capital appreciation and invest in less researched shares of
speculative nature. Because of these speculative investments Aggressive
Growth Funds become more volatile and thus, are prone to higher risk than other
equity funds.

b. Growth Funds - Growth Funds also invest for capital appreciation (with time
horizon of 3 to 5 years) but they are different from Aggressive Growth Funds in
the sense that they invest in companies that are expected to outperform the
market in the future. Without entirely adopting speculative strategies, Growth
 Funds invest in those companies that are expected to post above average
earnings in the future.

c. Speciality Funds - Speciality Funds have stated criteria for investments and
their portfolio comprises of only those companies that meet their criteria. Criteria
for some speciality funds could be to invest/not to invest in particular
regions/companies. Speciality funds are concentrated and thus, are
comparatively riskier than diversified funds.. There are following types of
speciality funds:
i. Sector Funds: Equity funds that invest in a particular
sector/industry of the market are known as Sector Funds. The
exposure of these funds is limited to a particular sector (say
Information Technology, Auto, Banking, Pharmaceuticals or Fast
Moving Consumer Goods) which is why they are more risky than
equity funds that invest in multiple sectors.
ii. Foreign Securities Funds: Foreign Securities Equity Funds have
the option to invest in one or more foreign companies. Foreign
securities funds achieve international diversification and hence they
are less risky than sector funds. However, foreign securities funds
are exposed to foreign exchange rate risk and country risk.
iii. Mid-Cap or Small-Cap Funds: Funds that invest in companies
having lower market capitalization than large capitalization
companies are called Mid-Cap or Small-Cap Funds. Market
capitalization of Mid-Cap companies is less than that of big, blue
chip companies (less than Rs. 2500 crores but more than Rs. 500
crores) and Small-Cap companies have market capitalization of less
than Rs. 500 crores. Market Capitalization of a company can be
calculated by multiplying the market price of the company's share by
the total number of its outstanding shares in the market. The shares
of Mid-Cap or Small-Cap Companies are not as liquid as of Large-
Cap Companies which gives rise to volatility in share prices of these
companies and consequently, investment gets risky.
iv. Option Income Funds*: While not yet available in India, Option
Income Funds write options on a large fraction of their portfolio.
Proper use of options can help to reduce volatility, which is
otherwise considered as a risky instrument. These funds invest in
 big, high dividend yielding companies, and then sell options against
their stock positions, which generate stable income for investors.

d. Diversified Equity Funds - Except for a small portion of investment in liquid

money market, diversified equity funds invest mainly in equities without any
concentration on a particular sector(s). These funds are well diversified and
reduce sector-specific or company-specific risk. However, like all other funds
diversified equity funds too are exposed to equity market risk. One prominent
type of diversified equity fund in India is Equity Linked Savings Schemes (ELSS).
As per the mandate, a minimum of 90% of investments by ELSS should be in
equities at all times. ELSS investors are eligible to claim deduction from taxable
income (up to Rs 1 lakh) at the time of filing the income tax return. ELSS usually
has a lock-in period and in case of any redemption by the investor before the
expiry of the lock-in period makes him liable to pay income tax on such income(s)
for which he may have received any tax exemption(s) in the past.

e. Equity Index Funds - Equity Index Funds have the objective to match the
performance of a specific stock market index. The portfolio of these funds
comprises of the same companies that form the index and is constituted in the
same proportion as the index. Equity index funds that follow broad indices (like
S&P CNX Nifty, Sensex) are less risky than equity index funds that follow narrow
sectoral indices (like BSEBANKEX or CNX Bank Index etc). Narrow indices are
less diversified and therefore, are more risky.

f. Value Funds - Value Funds invest in those companies that have sound
fundamentals and whose share prices are currently under-valued. The portfolio
of these funds comprises of shares that are trading at a low Price to Earnings
Ratio (Market Price per Share / Earning per Share) and a low Market to Book
Value (Fundamental Value) Ratio. Value Funds may select companies from
diversified sectors and are exposed to lower risk level as compared to growth
funds or speciality funds. Value stocks are generally from cyclical industries
(such as cement, steel, sugar etc.) which make them volatile in the short-term.
Therefore, it is advisable to invest in Value funds with a long-term time horizon as
risk in the long term, to a large extent, is reduced.

g. Equity Income or Dividend Yield Funds - The objective of Equity Income or

Dividend Yield Equity Funds is to generate high recurring income and steady
 capital appreciation for investors by investing in those companies which issue
high dividends (such as Power or Utility companies whose share prices fluctuate
comparatively lesser than other companies' share prices). Equity Income or
Dividend Yield Equity Funds are generally exposed to the lowest risk level as
compared to other equity fund

2. Debt / Income Funds

Funds that invest in medium to long-term debt instruments issued by private companies, banks,
financial institutions, governments and other entities belonging to various sectors (like
infrastructure companies etc.) are known as Debt / Income Funds. Debt funds are low risk
profile funds that seek to generate fixed current income (and not capital appreciation) to
investors. In order to ensure regular income to investors, debt (or income) funds distribute large
fraction of their surplus to investors. Although debt securities are generally less risky than
equities, they are subject to credit risk (risk of default) by the issuer at the time of interest or
principal payment. To minimize the risk of default, debt funds usually invest in securities from
issuers who are rated by credit rating agencies and are considered to be of "Investment Grade".
Debt funds that target high returns are more risky. Based on different investment objectives,
there can be following types of debt funds:
a. Diversified Debt Funds - Debt funds that invest in all securities issued by entities
belonging to all sectors of the market are known as diversified debt funds. The best
feature of diversified debt funds is that investments are properly diversified into all
sectors which results in risk reduction. Any loss incurred, on account of default by a debt
issuer, is shared by all investors which further reduces risk for an individual investor.

b. Focused Debt Funds* - Unlike diversified debt funds, focused debt funds are narrow
focus funds that are confined to investments in selective debt securities, issued by
companies of a specific sector or industry or origin. Some examples of focused debt
funds are sector, specialized and offshore debt funds, funds that invest only in Tax Free
Infrastructure or Municipal Bonds. Because of their narrow orientation, focused debt
funds are more risky as compared to diversified debt funds. Although not yet available in
India, these funds are conceivable and may be offered to investors very soon.

c. High Yield Debt funds - As we now understand that risk of default is present in all debt
funds, and therefore, debt funds generally try to minimize the risk of default by investing
in securities issued by only those borrowers who are considered to be of "investment
grade". But, High Yield Debt Funds adopt a different strategy and prefer securities
issued by those issuers who are considered to be of "below investment grade". The
 motive behind adopting this sort of risky strategy is to earn higher interest returns from
these issuers. These funds are more volatile and bear higher default risk, although they
may earn at times higher returns for investors.

d. Assured Return Funds - Although it is not necessary that a fund will meet its objectives
or provide assured returns to investors, but there can be funds that come with a lock-in
period and offer assurance of annual returns to investors during the lock-in period. Any
shortfall in returns is suffered by the sponsors or the Asset Management Companies
(AMCs). These funds are generally debt funds and provide investors with a low-risk
investment opportunity. However, the security of investments depends upon the net
worth of the guarantor (whose name is specified in advance on the offer document). To
safeguard the interests of investors, SEBI permits only those funds to offer assured
return schemes whose sponsors have adequate net-worth to guarantee returns in the
future. In the past, UTI had offered assured return schemes (i.e. Monthly Income Plans
of UTI) that assured specified returns to investors in the future. UTI was not able to fulfil
its promises and faced large shortfalls in returns. Eventually, government had to
intervene and took over UTI's payment obligations on itself. Currently, no AMC in India
offers assured return schemes to investors, though possible.

e. Fixed Term Plan Series - Fixed Term Plan Series usually are closed-end schemes
having short term maturity period (of less than one year) that offer a series of plans and
issue units to investors at regular intervals. Unlike closed-end funds, fixed term plans are
not listed on the exchanges. Fixed term plan series usually invest in debt / income
schemes and target short-term investors. The objective of fixed term plan schemes is to
gratify investors by generating some expected returns in a short period.
3. Gilt Funds
Also known as Government Securities in India, Gilt Funds invest in government papers (named
dated securities) having medium to long term maturity period. Issued by the Government of
India, these investments have little credit risk (risk of default) and provide safety of principal to
the investors. However, like all debt funds, gilt funds too are exposed to interest rate risk.
Interest rates and prices of debt securities are inversely related and any change in the interest
rates results in a change in the NAV of debt/gilt funds in an opposite direction.

4. Money Market / Liquid Funds

Money market / liquid funds invest in short-term (maturing within one year) interest bearing debt
instruments. These securities are highly liquid and provide safety of investment, thus making
money market / liquid funds the safest investment option when compared with other mutual fund
types. However, even money market / liquid funds are exposed to the interest rate risk. The
typical investment options for liquid funds include Treasury Bills (issued by governments),
Commercial papers (issued by companies) and Certificates of Deposit (issued by banks).

5. Hybrid Funds
As the name suggests, hybrid funds are those funds whose portfolio includes a blend of
equities, debts and money market securities. Hybrid funds have an equal proportion of debt and
equity in their portfolio. There are following types of hybrid funds in India:
a. Balanced Funds - The portfolio of balanced funds include assets like debt securities,
convertible securities, and equity and preference shares held in a relatively equal
proportion. The objectives of balanced funds are to reward investors with a regular
income, moderate capital appreciation and at the same time minimizing the risk of
capital erosion. Balanced funds are appropriate for conservative investors having a long
term investment horizon.
b. Growth-and-Income Funds - Funds that combine features of growth funds and income
funds are known as Growth-and-Income Funds. These funds invest in companies having
potential for capital appreciation and those known for issuing high dividends. The level of
risks involved in these funds is lower than growth funds and higher than income funds.
c. Asset Allocation Funds - Mutual funds may invest in financial assets like equity, debt,
money market or non-financial (physical) assets like real estate, commodities etc.. Asset
allocation funds adopt a variable asset allocation strategy that allows fund managers to
switch over from one asset class to another at any time depending upon their outlook for
specific markets. In other words, fund managers may switch over to equity if they expect
equity market to provide good returns and switch over to debt if they expect debt market
to provide better returns. It should be noted that switching over from one asset class to
another is a decision taken by the fund manager on the basis of his own judgment and
understanding of specific markets, and therefore, the success of these funds depends
upon the skill of a fund manager in anticipating market trends.

6. Commodity Funds-
Those funds that focus on investing in different commodities (like metals, food grains, crude oil
etc.) or commodity companies or commodity futures contracts are termed as Commodity Funds.
A commodity fund that invests in a single commodity or a group of commodities is a specialized
commodity fund and a commodity fund that invests in all available commodities is a diversified
commodity fund and bears less risk than a specialized commodity fund. "Precious Metals Fund"
and Gold Funds (that invest in gold, gold futures or shares of gold mines) are common
examples of commodity funds.

7. Real Estate Funds

Funds that invest directly in real estate or lend to real estate developers or invest in
shares/securitized assets of housing finance companies, are known as Specialized Real Estate
Funds. The objective of these funds may be to generate regular income for investors or capital
appreciation.

8. Exchange Traded Funds (ETF)

Exchange Traded Funds provide investors with combined benefits of a closed-end and an
open-end mutual fund. Exchange Traded Funds follow stock market indices and are traded on
stock exchanges like a single stock at index linked prices. The biggest advantage offered by
these funds is that they offer diversification, flexibility of holding a single share (tradable at index
linked prices) at the same time. Recently introduced in India, these funds are quite popular
abroad.

9. Fund of Funds
Mutual funds that do not invest in financial or physical assets, but do invest in other mutual fund
schemes offered by different AMCs, are known as Fund of Funds. Fund of Funds maintain a
portfolio comprising of units of other mutual fund schemes, just like conventional mutual funds
maintain a portfolio comprising of equity/debt/money market instruments or non financial assets.
Fund of Funds provide investors with an added advantage of diversifying into different mutual
fund schemes with even a small amount of investment, which further helps in diversification of
risks. However, the expenses of Fund of Funds are quite high on account of compounding
expenses of investments into different mutual fund schemes.
 3.4 Advantages of Mutual Funds

Since their creation, mutual funds have been a popular investment vehicle for investors. Their
simplicities along with other attributes provide great benefit to investors with limited knowledge,
time, or money. To help you decide whether mutual funds are best for you and your situation,
we are going to look at some reasons why you might want to consider investing in mutual funds.

1. Diversification
One rule of investing that both large and small investors should follow is asset
diversification. Used to manage risk, diversification involves the mixing of investments
within a portfolio. For example, by choosing to buy stocks in the retail sector and
offsetting them with stocks in the industrial sector, you can reduce the impact of the
performance of any one security on your entire portfolio. To achieve a truly diversified
portfolio, you may have to buy stocks with different capitalizations from different
industries and bonds having varying maturities from different issuers. For the individual
investor this can be quite costly.

By purchasing mutual funds, you are provided with the immediate benefit of instant
diversification and asset allocation without the large amounts of cash needed to create
individual portfolios. One caveat (beware), however, is that simply purchasing one
mutual fund might not give you adequate diversification - check to see if the fund is
sector or industry specific. For example, investing in an oil and energy mutual fund might
spread your money over fifty companies, but if energy prices fall, your portfolio will likely
suffer.

2. Economies of Scale
The easiest way to understand an economy of scale is by thinking about volume
discounts: in many stores the more of one product you buy, the cheaper that product
becomes. For example, when you buy a dozen donuts, the price per donut is usually
cheaper than buying a single one. This occurs also in the purchase and sale of
securities. If you buy only one security at a time, the transaction fees will be relatively
large.

Mutual funds are able to take advantage of their buying and selling size and thereby
reduce transaction costs for investors. When you buy a mutual fund, you are able to
diversify without the numerous commission charges. Imagine if you had to buy the 10-20
stocks needed for diversification. The commission charges alone would eat up a good
 chunk of your savings. Add to this the fact that you would have to pay more transaction
fees every time you wanted to modify your portfolio - as you can see the costs begin to
add up. Mutual funds are able to make transactions on a much larger scale

3. Divisibility
Many investors don't have the exact sums of money to buy round lots of securities. One
to two hundred dollars is usually not enough to buy a round lot of a stock, especially
after deducting commissions. Investors can purchase mutual funds in smaller
denominations, ranging from Rs100 to Rs1000 minimums. So, rather than having to wait
until you have enough money to buy higher-cost investments, you can get in right away
with mutual funds. This leads us to the next advantage.
4. Liquidity
Another advantage of mutual funds is the ability to get in and out with relative ease. You
can sell mutual funds at any time as they are as liquid as regular stocks. Both the
liquidity and smaller denominations of mutual funds provide mutual fund investors the
ability to make periodic investments through monthly purchase plans while taking
advantage of Rupee-cost averaging.
5. Professional Management
When you buy a mutual fund, you are also choosing a professional money manager.
This manager will use the money that you invest to buy and sell stocks that he or she
has carefully researched. Therefore, rather than having to research thoroughly every
investment before you decide to buy or sell, you have a mutual fund's money manager
to handle it for you.

As with any investment, there are risks involved in buying mutual funds. These
investment vehicles can experience market fluctuations and sometimes provide returns
below the overall market. Also, the advantages gained from mutual funds are not free:
many of them carry loads, annual expense fees and penalties for early withdrawal. In the
next article we will take a closer look at some of these drawbacks so you can decide if
mutual funds are right for you.
 3.5 Disadvantages of Mutual Funds

Like many investments, mutual funds offer advantages and disadvantages, which are important
for you to consider and understand before you decide to buy. Here we explore some of the
drawbacks of mutual funds.

1. Fluctuating Returns
Mutual funds are like many other investments without a guaranteed return. There is
always the possibility that the value of your mutual fund will depreciate. Unlike fixed-
income products, such as bonds and Treasury bills, mutual funds experience price
fluctuations along with the stocks that make up the fund. When deciding on a particular
fund to buy, you need to research the risks involved - just because a professional
manager is looking after the fund, that doesn't mean the performance will be stellar.

2. Diversification?
Although diversification is one of the keys to successful investing, many mutual fund
investors tend to over diversify. The idea of diversification is to reduce the risks
associated with holding a single security; over diversification (also known as
diversification) occurs when investors acquire many funds that are highly related and so
don't get the risk reducing benefits of diversification.
At the other extreme, just because you own mutual funds doesn't mean you are
automatically diversified. For example, a fund that invests only in a particular industry or
region is still relatively risky.

3. Cash, Cash and More Cash

As you know already, mutual funds pool money from thousands of investors, so
everyday investors are putting money into the fund as well as withdrawing investments.
To maintain liquidity and the capacity to accommodate withdrawals, funds typically have
to keep a large portion of their portfolio as cash. Having ample cash is great for liquidity,
but money sitting around as cash is not working for you and thus is not very
advantageous

4. Costs
Mutual funds provide investors with professional management; however, it comes at a
cost. Funds will typically have a range of different fees that reduce the overall payout. In
mutual funds the fees are classified into two categories: shareholder fees and annual
 fund-operating fees.
The shareholder fees, in the forms of loads and redemption fees, are paid directly by
shareholders purchasing or selling the funds. The annual fund operating fees are
charged as an annual percentage - usually ranging from 1-3%. These fees are assessed
to mutual fund investors regardless of the performance of the fund. As you can imagine,
in years when the fund doesn't make money these fees only magnify losses.

5. Misleading Advertisements
The misleading advertisements of different funds can guide investors down the wrong
path. Some funds may be incorrectly labelled as growth funds, while others are
classified as small-cap or income. The SEC requires funds to have at least 80% of
assets in the particular type of investment implied in their names. The remaining assets
are under the discretion solely of the fund manager.
The different categories that qualify for the required 80% of the assets, however, may be
vague and wide-ranging. A fund can therefore manipulate prospective investors by using
names that are attractive and misleading. Instead of labeling itself a small cap, a fund
may be sold
under the heading growth fund.

6. Evaluating Funds
Another disadvantage of mutual funds is the difficulty they pose for investors interested in
researching and evaluating the different funds. Unlike stocks, mutual funds do not offer
investors the opportunity to compare the P/E ratio, sales growth, earnings per share, etc. A
mutual fund's net asset value gives investors the total value of the fund's portfolio less liabilities,
but how do you know if one fund is better than another?
Furthermore, advertisements, rankings and ratings issued by fund companies only describe
past performance. Always note that mutual fund descriptions/advertisements always include the
tagline "past results are not indicative of future returns". Be sure not to pick funds only because
they have performed well in the past - yesterday's big winners may be today's big losers.

Conclusion
When you buy any investment, it's important to understand both the good and bad points. If the
advantages that the investment offers outweigh its disadvantages, it's quite possible that mutual
funds are something to consider. Whether you decide in favour or against mutual funds, the
probability of a successful portfolio increases dramatically when you do your homework.
 3.7 Mutual Funds: Picking A Mutual Fund
Buying and Selling
You can buy some mutual funds (no-load) by contacting the fund companies directly. Other
funds are sold through brokers, banks, financial planners, or insurance agents. If you buy
through a third party there is a good chance they'll hit you with a sales charge (load).
That being said, more and more funds can be purchased through no-transaction fee programs
that offer funds of many companies. Sometimes referred to as a "fund supermarket," this
service lets you consolidate your holdings and record keeping, and it still allows you to buy
funds without sales charges from many different companies. Popular examples are Schwab's
OneSource, Vanguard's Fund Access, and Fidelity's Funds Network. Many large brokerages
have similar offerings.
Selling a fund is as easy as purchasing one. All mutual funds will redeem (buy back) your
shares on any business day. In the United States, companies must send you the payment
within seven days.

The Value of Your Fund

Net asset value (NAV), which is a fund's assets minus liabilities, is the value of a mutual fund.
NAV per share is the value of one share in the mutual fund, and it is the number that is quoted
in newspapers. You can basically just think of NAV per share as the price of a mutual fund. It
fluctuate everyday as fund holdings and shares outstanding change.
When you buy shares, you pay the current NAV per share plus any sales front-end load. When
you sell your shares, the fund will pay you NAV less any back-end load.
 IPO Basics: Introduction
The term initial public offering (IPO) slipped into everyday speech during the tech bull market of
the late 1990s. Back then, it seemed you couldn't go a day without hearing about a dozen new
dotcom millionaires in Silicon Valley who were cashing in on their latest IPO. The phenomenon
spawned the term siliconaire, which described the dotcom entrepreneurs in their early 20s and
30s who suddenly found themselves living large on the proceeds from their internet companies'
IPOs.

• So, what is an IPO anyway?

• How did everybody get so rich so fast?
• And, most importantly, is it possible for mere mortals like us to get in on an IPO?

All these questions and more will be answered in this tutorial.

Tracking stocks appear when a large company spins off one of its divisions into a separate
entity. The rationale behind the creation of tracking stocks is that individual divisions of a
company will be worth more separately than as part of the company as a whole.
From the company's perspective, there are many advantages to issuing a tracking stock. The
company gets to retain control over the subsidiary but all revenues and expenses of the division
are separated from the parent company's financial statements and attributed to the tracking
stock. This is often done to separate a high-growth division with large losses from the financial
statements of the parent company. Most importantly, if the tracking stock rockets up, the parent
company can make acquisitions with the subsidiary's stock instead of cash.

While a tracking stock may be spun off in an IPO, it's not the same as the IPO of a private
company going public. This is because tracking stocks usually have no voting rights, and often
there is no separate board of directors looking after the rights of the tracking stock. It's like
you're a second-class shareholder! This doesn't mean that a tracking stock can't be a good
investment. Just keep in mind that a tracking stock isn't a normal IPO.

Why Go Public?
Going public raises cash, and usually a lot of it. Being publicly traded also opens many
financial doors:
 • Because of the increased scrutiny, public companies can usually get better rates
when they issue debt.
• As long as there is market demand, a public company can always issue more stock.
Thus, mergers and acquisitions are easier to do because stock can be issued as part
of the deal.

Trading in the open markets means liquidity. This makes it possible to implement things like
employee stock ownership plans, which help to attract top talent.

Being on a major stock exchange carries a considerable amount of prestige. In the past, only
private companies with strong fundamentals could qualify for an IPO and it wasn't easy to get
listed.

The internet boom changed all this. Firms no longer needed strong financials and a solid history
to go public. Instead, IPOs were done by smaller start ups seeking to expand their businesses.
There's nothing wrong with wanting to expand, but most of these firms had never made a profit
and didn't plan on being profitable any time soon. Founded on venture capital funding, they
spent like Texans trying to generate enough excitement to make it to the market before burning
through all their cash. In cases like this, companies might be suspected of doing an IPO just to
make the founders rich. This is known as an exit strategy, implying that there's no desire to stick
around and create value for shareholders. The IPO then becomes the end of the road rather
than the beginning.

How can this happen? Remember: an IPO is just selling stock. It's all about the sales job. If you
can convince people to buy stock in your company, you can raise a lot of money.

Why Do Companies Offer IPOs?

In general, companies offer IPOs in order to raise money that they need for business expansion
and new business opportunities. By offering shares to investors, a company stands to bring in a
lot of money. They can then use this money to grow their business. The more their business
grows, in turn, the higher the share prices grow and the more money is generated by investors
purchasing shares. Unlike business loans, which need to be repaid with interest, IPOs do not
have this disadvantage. It is investors who take the risk -- although also a potential gain --
buying shares. If the company loses money and they will not have to repay their investors,
although investors in general demand high accountability from a company they are buying
stocks from.

Many companies simply see offering IPOs as the next stage in business growth. Since public
companies often enjoy larger profits and can draw on a larger capital base than private
businesses, IPOs seem like the logical way to grow a company for many CEOs.

Who Can Join the IPO Program?

Public investors can purchase IPOs through their regular investment channels, although they
will need to act fast to take advantage of the initial low IPO costs. Businesses can take
advantage of IPOs simply by offering public shares on the market. To do this, they require a
corporate lawyer, transparent business and financial practices, and an investment banker. They
also need a medium -- usually a stock exchange -- to actually sell the shares. Most businesses
additionally hire marketers or someone who can advertise or market the stock.

What are the Benefits of IPOs?

For businesses, stocks and shares are a fast way to raise revenue for business expansion and
growth. They also can take a business to the next level. By becoming a publicly traded
company a business can take advantage of new, larger opportunities and can start working
towards incorporation and even worldwide expansion. IPO gives a company fast access to
public capital. Even though public offering can be costly and time consuming, the tradeoffs are
very appealing to companies. IPOs are also a relatively low risk for businesses and have the
potential for huge gains and for huge opportunities. The more investors wish to invest in a
company, the more the company stands to or from IPOs and other stock offerings.

For the investor, IPOs are attractive mainly because they may be undervalued. Initially, to make
IPOs more attractive, many companies will offer their initial public offering at a low rate. This
helps to encourage investors, and investors will often buy IPOs, thinking that the new company
or the newly public company will be the next big thing with a huge profit margin. As prices grow
and demand for the IPOs grows, early investors stand to make a lot of profit -- and very quickly.

If you hope to invest in companies, understanding the answer to the question what is an IPO? is
essential to your success. An initial public offering, the first time a company offers shares to the
general public, is a great way to start building profit. Since IPOs are in some cases undervalued
they can often be sold with it a short period for good profit

How to make an IPO?

To make an IPO, a company has to file a prospectus with the Securities and Exchange Board
of India (SEBI) stating the purpose of raising the money and disclosing other details of the
company and its directors.
Once it is approved by SEBI, the company files the prospectus with the registrar of the company
to initiate the process of IPO. According to SEBI norms, a minimum of 30% of any IPO is
reserved for retail investors — those who are applying for shares worth less than Rs 1,00,000.
The shares are allotted on a pro-rata basis among applicants. That means, if the retail investor
portion of the IPO is oversubscribed by two times, every applicant will get half of the number of
shares he applied for.
For large investors, whose application size is more than Rs 1,00,000 each, there is a minimum
reservation of 10%. In this category too, shares are allotted on a pro-rata basis.

How is the offer price fixed?

The offer price for shares in a public offer can be fixed before the issue. It can also be
discovered through gauging the demand in the market for shares at various price points. The
second method is called the book-building route.

In this, the issue manager fixes a price-band rather than a single price for the IPO and asks
investors to bid for shares in that price range.

The price band is fixed on the basis of the fundamentals of the company, the performance of
share prices of other companies in the same sector on bourses and market survey conducted
by issue managers.

IPO Basics: Getting In On an IPO

The Underwriting Process
Getting a piece of a hot IPO is very difficult, if not impossible. To understand why, we need to
know how an IPO is done, a process known as underwriting.

When a company wants to go public, the first thing it does is hire an investment bank. A
company could theoretically sell its shares on its own, but realistically, an investment bank is
required - it's just the way Wall Street works. Underwriting is the process of raising money by
either debt or equity (in this case we are referring to equity). You can think of underwriters as
middlemen between companies and the investing public. The biggest underwriters are Goldman
Sachs, Merrill Lynch, Credit Suisse First Boston, Lehman Brothers and Morgan Stanley.

The company and the investment bank will first meet to negotiate the deal. Items usually
discussed include the amount of money a company will raise, the type of securities to be issued
and all the details in the underwriting agreement. The deal can be structured in a variety of
ways. For example, in a firm commitment, the underwriter guarantees that a certain amount will
be raised by buying the entire offer and then reselling to the public. In a best efforts agreement,
however, the underwriter sells securities for the company but doesn't guarantee the amount
rose. Also, investment banks are hesitant to shoulder all the risk of an offering. Instead, they
form a syndicate of underwriters. One underwriter leads the syndicate and the others sell a part
of the issue.

Once all sides agree to a deal, the investment bank puts together a registration statement to be
filed with the SEBI. This document contains information about the offering as well as company
info such as financial statements, management background, any legal problems, where the
money is to be used and insider holdings. The SEBI then requires a cooling off period, in which
they investigate and make sure all material information has been disclosed. Once the SEBI
approves the offering, a date (the effective date) is set when the stock will be offered to the
public.

During the cooling off period the underwriter puts together what is known as the red herring.
This is an initial prospectus containing all the information about the company except for the offer
price and the effective date, which aren't known at that time. With the red herring in hand, the
underwriter and company attempt to hype and build up interest for the issue. They go on a road
show - also known as the "dog and pony show" - where the big institutional investors are
courted.

As the effective date approaches, the underwriter and company sit down and decide on the
price. This isn't an easy decision: it depends on the company, the success of the road show
and, most importantly, current market conditions. Of course, it's in both parties' interest to get as
much as possible.
Finally, the securities are sold on the stock market and the money is collected from investors.
 5.1 INTRODUCTION OF THE COMPANY

STATE BANK OF INDIA: - State Bank of India (SBI) (LSE:SBID) is government-owned and is
the largest bank in India. If one measures by the number of branch offices, SBI is the second
largest bank in the world. It traces its ancestry back to the Bank of Calcutta, which was
established in 1806; this makes SBI the oldest commercial bank in the Indian subcontinent. SBI
provides various domestic, international and NRI products and services, through its vast
network in India and overseas. With an asset base of $126 billion and its reach, it is a regional
banking behemoth.

In recent years the bank has focused on three priorities, first, reducing its huge staff through
Golden handshake schemes known as the Voluntary Retirement Scheme, which saw many of
its best and brightest defect to the private sector, second, computerizing its operations and
third, trying to change the attitude of its largely rude staff through a programme aptly named
'Parivartan' or 'change'. On the whole, the Bank has been successful in the first two initiatives
but has failed in the third.

ICICI BANK:- ICICI Bank (BSE: ICICI) (formerly Industrial Credit and Investment Corporation
of India) is India's largest private sector bank in market capitalization and second largest overall
in terms of assets. ICICI Bank has total assets of about USD 79 Billion (end-Mar 2007), a
network of over 950 branches and offices, about 3600 ATMs, and 24 million customers (as of
end July 2007). ICICI Bank offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and through its specialised
subsidiaries and affiliates in the areas of investment banking, life and non-life insurance,
venture capital and asset management. ICICI Bank's equity shares are listed in India on stock
exchanges at Kolkata and Vadodara, the Stock Exchange, Mumbai and the National Stock
Exchange of India Limited and its ADRs are listed on the New York Stock Exchange (NYSE).

KOTAK MAHINDRA BANK:- Established in 1985, The Kotak Mahindra group has long been
one of India's most reputed financial organizations, offering complete financial solutions. From
commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking,
the group caters to the financial needs of individuals and corporate. It was previously known as
the Kotak Mahindra Finance Limited, a non-banking financial organization. In February 2003,
Kotak Mahindra Finance Ltd, the group's flagship company was given the license to carry on
banking business by the Reserve Bank of India (RBI). Kotak Mahindra Finance Ltd. is the first
company in the Indian banking history to convert to a bank.
 The bank is headed by Mr. K.M. Gherda as Chairman and Mr. Uday Kotak as Executive Vice
Chairman & Managing Director. Dr. Shankar Acharya is the chairman of board of Directors in
the company

The Bank has its registered office at Nariman Bhavan, Nariman Point, Mumbai

5.2 INTRODUCTION OF FUND SCHEME

EQUITY DIVERSIFY

These funds diversify 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 under-performance in some stocks or sectors in which the fund has invested is balanced by
the superior performance of other stocks or sectors.

SBI MUTUAL FUND SCHEME:-

Mutual Fund SBI Mutual Fund

Scheme Name Magnum Equity Fund - Dividend
an open ended equity scheme, the objective of the scheme is to
provide the investor long-term capital appreciation by investing in
Objective of Scheme high growth companies along with the liquidity of an open-ended
scheme through investments primarily in equities and the balance
in debt and money market instruments.
Scheme Type Open Ended
Scheme Category Growth
Launch Date 29-Oct-1993
Minimum Subscription
1000
Amount
 Entry Load (From Date: Sep 01, 2007)

Entry Load
Investment Amount (Rs.)
(%)
From To
0.00 49,999,999.00 2.25%
50,000,000.00 0.00 0.00%

Exit Load (From Date: Sep 01, 2007)

No. of Exit
Investment Amount
days of Load
(Rs.)
Investment (%)
From To From To
0 6 0.00 49,999,999.00 1.00%
0 0 50,000,000.00 0.00 0.00%

ICICI PRUDENTIAL FUND:-

Mutual Fund ICICI Prudential Mutual Fund

Scheme Name Pru ICICI Growth Fund- Dividend
an open ended equity scheme, the objective of the scheme is to
provide the investor long-term capital appreciation by investing in
Objective of Scheme high growth companies along with the liquidity of an open-ended
scheme through investments primarily in equities and the balance
in debt and money market instruments.
Scheme Type Open Ended
Scheme Category Growth
Launch Date Jun 04, 1998
Minimum Subscription
1000
Amount
Entry Load (From Date: Mar 03, 2008)
Entry Load
Investment Amount (Rs.)
(%)
From To
0.00 49,999,999.00 0.00%
0.00 49,999,999.00 0.00%
0.00 49,999,999.00 0.00%
50,000,000.00 0.00 0.00%

KOTAK MAHINDRA BANK:-

Mutual Fund Kotak Manhindra Mutual Fund

Scheme Name Kotak 30 - Dividend
an open ended equity scheme, the objective of the scheme is to
provide the investor long-term capital appreciation by investing in
Objective of Scheme high growth companies along with the liquidity of an open-ended
scheme through investments primarily in equities and the balance
in debt and money market instruments.
Scheme Type Open Ended
Scheme Category Growth
Launch Date Dec 11, 1998
Minimum Subscription
1000
Amount

Entry Load (From Date: Apr 01, 2007)

Entry Load
Investment Amount (Rs.)
(%)
From To
0.00 0.00 2.25%

Exit Load (From Date: Apr 01, 2007)

Exit
No. of days of Investment Amount
Load
Investment (Rs.)
(%)
From To From To
0 0 0.00 0.00 0.00%
 4.3 DATA ANAYLSIS

As per this Analysis and finding the all “scheme and their IPO” in the same period and
their calculation is:

MUTUAL FUND SCHEME (ICICI GROWTH FUND (G))

YEA AVERAGE RETURN STANDARD DEVIATION COFFICIENT OF

R VARIENCE
I II III IV I II III IV I II III IV
QT QT QTR QTR QT QTR QTR QTR QTR QTR QTR QTR
R R R
2005

2006

2007

ICICI GROWTH FUND (G)

 MUTUAL FUND SCHEME(ICICI GROWTH FUND (D))
YEA AVERAGE RETURN STANDARD DEVIATION COFFICIENT OF
R VARIENCE
I II III IV I II III IV I QTR II III IV
QT QT QTR QTR QT QTR QTR QTR QTR QTR QTR
R R R
2005

2006

2007

! "# $ % &

Average return of ICICI GROWTH FUND (D) is inconsistence and their variance
 '
YEA AVERAGE RETURN STANDARD DEVIATION COFFICIENT OF
R VARIENCE
I II III IV I II III IV I II III IV
QT QT QTR QTR QT QTR QTR QTR QTR QTR QTR QTR
R R R
2005

2006

2007

IPO OF ICICI BANK

 SBI MANGUM GLOBAL FUND (G)
YEA AVERAGE RETURN STANDARD DEVIATION COFFICIENT OF
R VARIENCE
I II III IV I II III IV I QTR II III IV
QT QT QTR QTR QT QTR QTR QTR QTR QTR QTR
R R R
2005

2006

2007

SBI MANGUM GLOBAL FUND (G)

 (
YEA AVERAGE RETURN STANDARD DEVIATION COFFICIENT OF
R VARIENCE
I II III IV I II III IV I II III IV
QT QT QTR QTR QT QTR QTR QTR QTR QTR QTR QTR
R R R
2005

2006

2007

SBI MANGUM EQUITY FUND (D)

YEA AVERAGE RETURN STANDARD DEVIATION COFFICIENT OF
R VARIENCE
I II III IV I II III IV I II III IV
QT QT QTR QTR QT QTR QTR QTR QTR QTR QTR QTR
R R R
2005

2006

2007

IPO OF SBI
 KOTAK 30 (D)
YEA AVERAGE RETURN STANDARD DEVIATION COFFICIENT OF VARIENCE
R
I II III IV I II III IV I II III IV
QT QT QTR QTR QT QTR QTR QTR QTR QTR QTR QTR
R R R
2005

2006

2007

'% " ) *
 ' ' *
YEA AVERAGE RETURN STANDARD DEVIATION COFFICIENT OF
R VARIENCE
I II III IV I II III IV I QTR II III IV
QT QT QTR QTR QT QTR QTR QTR QTR QTR QTR
R R R
2005

2006

2007

'% " ) * !

INTERPRETATION:-
Average return of “KOTAK 30 (G)” in 2005 is good and after that in 2006 was low but in 2007
average NAV was higher than 2006.
 ' ' '
YEA AVERAGE RETURN STANDARD DEVIATION COFFICIENT OF
R VARIENCE
I II III IV I II III IV I II III IV
QT QT QTR QTR QT QTR QTR QTR QTR QTR QTR QTR
R R R
2005

2006

2007

' % " ) + $ ) ,- %

!" # #$ " !% &! ' &

# $ !" ( #! " #!#
In 2006 the average return of the KOTAK 30 (D) increased respectively in quartly and
after that in 2007 was good all the over the year.
 .

,$ / ,$ ! 0
As per this Analysis all the “Mutual funds scheme and their IPO” in the same
period and their calculation is:
i) Average Return
ii) Standard Deviation
iii) Coefficient of Variance
After the study of the Banking sector such as State bank of India, Kotak Mahindra Bank
and ICICI Bank as well as their IPO in the last three year from 2005 to 2007 in the same
period through statistical tools and in this project found that:-

Mutual fund scheme is ICICI growth fund (D) & ICICI growth fund
(G)
of average return is increase in respectively in year whereas their
coefficient of standard deviation high and low in a respectively year.
If the variance is more in a particular year that means the fund
scheme is inconsistent and fluctuation is more.

In the case of SBI mutual fund scheme and the IPO such as SBI
global fund (G) is more return than SBI equity fund (G). The main
thing is noticed that the coefficient of standard deviation is less
varied in the respectively year that’s by the return of Global fund
(G) is more than Global equity fund (G). Whereas as for as their
IPO is decreased in respectively year.

Average return of “KOTAK 30 (G)” in 2005 is good and after that in

2006 was low but in 2007 average NAV was higher than 2006.
Whereas the concern about the IPO of Kotak is more over the
period.

In the all case we found that growth fund scheme of any class is as
good as all other scheme dividend scheme.

IPO of Kotak is more consistent over the period than SBI and ICICI
.
BIBLOGRAPHI
• AMFI Text book
• Mutual fund book
WEBSITE:
• www.indiainfoline.com
• www.nseindia.com
• www.mutualfundsindia.com
• www.usectrade.com
 1

2
ANAXURE:

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VARIOUS MUTUAL FUND SCHEME

Snapshot of Mutual Fund Schemes
Mutual Fund Investment
Objective Risk Who should invest Investment horizon
Type Portfolio
Treasury Bills,
Liquidity + Certificate of Those who park
Money Moderate Income Deposits, their funds in current
Negligible 2 days - 3 weeks
Market + Reservation of Commercial accounts or short-
Capital Papers, Call term bank deposits
Money
Short-term Call Money,
Funds Commercial
(Floating - Papers,
Liquidity + Little Interest Those with surplus 3 weeks -
short-term) Moderate Income Treasury Bills,
Rate short-term funds 3 months
CDs, Short-term
Government
securities.
Bond Funds Predominantly
Credit Risk & Debentures, Salaried &
Regular Income Interest Rate Government conservative More than 9 - 12 months
(Floating - Risk securities, investors
Long-term) Corporate Bonds
Salaried &
Security & Interest Rate Government
Gilt Funds conservative 12 months & more
Income Risk securities
investors
Aggressive
Equity Long-term Capital
High Risk Stocks investors with long 3 years plus
Funds Appreciation
term out look.
To generate
returns that are NAV varies Portfolio indices
Aggressive
Index Funds commensurate with index like BSE, NIFTY 3 years plus
investors.
with returns of performance etc
respective indices
Balanced ratio of
Capital Market
equity and debt
Balanced Growth & Regular Risk and Moderate &
funds to ensure 2 years plus
Funds Income Interest Rate Aggressive
igher returns at
Risk
lower risk

Investment Investment
Ideal Instruments
Objective horizon
Short-term
1- 6 months Liquid/Short-term plans
Investment
Capital Appreciation Over 3 years Diversified Equity/ Balanced Funds
Regular Income Flexible Monthly Income Plans / Income Funds
Tax Saving 3 yrs lock-in Equity-Linked Saving Schemes (ELSS)