Summer Project Report

A Study on
Factors Affecting Investors Preference for Mutual Funds in India and Performance Evaluation of Mutual Funds in India With
Submitted to the
School of Management studies University of Hyderabad

In Partial Fulfillment of the Requirement for the Award of the Degree of
Master of Business Administration
Under the Guidance of
Dr. Chetan Srivastava Lecturer, School of Management Studies University of Hyderabad
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Ankit Singh 08MBMA12
CERTIFICATE
This is to certify that the project work entitled Factors Affecting Investors
Preference for Mutual Funds in India and Performance Evaluation of Mutual Funds in India has been carried out and submitted by Mr. Ankit Singh under my
guidance in partial fulfillment of his Masters Of Business Administration at SCHOOL OF MANAGEMENT STUDIES, UNIVERSITY of HYDERABAD.
Date: 21/04/09
Dr. Chetan Srivastava Faculty Member School Of Management Studies University Of Hyderabad
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DECLARATION
This to declare that the project title Factors Affecting Investors Preference for Mutual Funds in India and Performance Evaluation of Mutual Funds in India is an authentic record of my original work carried out under the guidance of Dr. Chetan Srivastava, Lecturer in Marketing, School of Management Studies, University of Hyderabad. The project work has been carried out solely for the purpose of submission in partial fulfillment of Master of Business Administration at School of Management Studies, University of Hyderabad. I further declare that I have not submitted this document to any other School, University, or Institution in whatever manner.
Date -
Ankit Singh 08MBMA12
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ACKNOWLEDGEMENTS
First of all I express my gratitude to my project guide Dr. Chetan Srivastava, Lecturer, School of Management Studies, University of Hyderabad. His able guidance at each step of the project helped me to broaden my outlook on the project and in successful completion of the project. I shall always remember his polite way of correction and constant encouragement by asking various questions. I would like to express my gratitude to my Project Supervisor, Ms. Nandita Banerjee, Centre Manager at Reliance Money Lucknow who had spared her valuable time in assisting me during my project work. It has been a great privilege to work under the supervision of Mr. Gaurav Nagar, Manager at Reliance Mutual Fund, Lucknow. Their sympathetic, accommodating and constructive nature remained a constant source of inspiration for me throughout the duration of this project work. I convey my regards and special thanks to Dr. V. Venkata Ramana, Professor and Dean, School of Management Studies, University of Hyderabad for giving me this opportunity for doing summer internship at Reliance Money. I would also thank Dr. Mary Jessica and Dr. G.V.R.K. Acharyulu, Faculty, School of Management Studies, University of Hyderabad, for their guidance and support for the completion of project work. I specially thank all the faculty members of the School of Management Studies for having equipped me with the skills and the ability through their inputs, which assisted me in the completion of the project. I am thankful to all the personnel at Reliance Money for their utmost co-operation also I Page | 4
wish to thank all those people who have directly or indirectly been instrumental in successful completion of this project work. Finally, I would like to thank my Parents, Family, Friends, Colleagues and God Almighty for their unending inspiration and encouragement.
(1) Executive Summary

The report contains the brief description of the Mutual Fund Industry in India. It contains the findings and analysis of the survey conducted to gather primary data to judge the factors that influence the investors most before taking decision to make any investment in mutual funds. Further an attempt has been made to know as to how important the various qualities of a mutual fund scheme, various qualities of an Asset Management Company (AMC) and importance of various services provided by the AMCs are to the investor while making investment in a particular scheme. The attempt has also been made to categorize investors based on various demographic factors such as age, income, etc. and to present a comparative analysis of the various demographic factors. The size of the sample is limited to 200 only. More than 33 % of the investors prefer fixed deposits for making investment. The investors first look for safety of capital in mutual funds. More than 67 % of the investors first prefer open ended funds. About half of the total mutual fund investors have invested in equity schemes. The study also reveals that the investors prefer to take decision regarding the investments on their own. The investors consider the reputation of the portfolio managers as the least important factor in the selection of the funds/schemes. The investors consider the reputation of the company as the most important quality while making selection of a particular fund or scheme. They have given highest importance to daily disclosure of NAV in case of investor services. The report also deals with the performance evaluation of Mutual Funds in India vis-a-vis the Benchmark Index of the funds with the help of Beta (a measure of systematic risk), Standard Deviation (a measure of total risk), Sharpe Ratio, Treynors Ratio, Jensen Measure (a measure of fund manager performance), and Fama Measure. For this purpose, 10 similar equity schemes of 10 fund houses have been taken as sample, out of which 9 schemes are open ended and 1 scheme Page | 5
is closed ended. The top 10 fund houses are selected on the basis of their Assets under Management (AUM) as on 30th June 2009. More than 75% of corpus of each scheme is invested in equity stocks. The study covers the period of 36 months from 31st July 2006 to 30th June 2009. The data used is monthly closing NAVs. The source of data is the respective website of a particular scheme and also the mutualfundsindia.com and amfi.com.
It is evident from the analysis that fund managers were not successful in satisfying the investors with their performance. Under quarterly analysis only 7 funds out of the 10 funds selected were able to earn more than market returns and only 6 funds were able to earn more than the risk free rate. Under half yearly analysis only 4 funds out of the 10 funds selected were able to earn more than market returns and only 9 funds were able to earn more than the risk free rate. Under yearly analysis only 6 funds out of the 10 funds selected were able to earn more than market returns and only 9 funds were able to earn more than the risk free rate.
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(2) Table of Contents Certificate Declaration Acknowledgements

1. Executive Summary 2. Table of Contents 3. Company Profile 4. History of Indian Mutual Funds Industry 5. Background and Need for Study 6. Statement of Problem 7. Objective of Study 8. Testable Hypothesis 9. Limitations of Study 10. Theoretical Framework 11. Literature Review
(i) (ii) (iii) 1-2 3 4-7 8-9 10 10-11 12 13 13 14 15-22 23-24 24 24 24-35 36-56 Page | 7
12. Research Methodology

(a) Designing of Questionnaire (b) Duration of Study (c) Sample Selection 1. Data Collection and Analysis 2. Performance analysis of Mutual Funds
3. Comparison of Funds on the basis of Index
57-59 60 61 62 63 64-65 66-67 68 69-72
4. Overall ranking of Mutual Funds

(a) On the basis of Jensen alpha (b) On the basis of Jensen Alpha (c) On the basis of Total Risk (d) On the basis of Portfolio Diversification 1. Findings of the Study 2. Suggestions 3. Bibliography and References 4. Annexure I-II
(1) COMPANY PROFILEReliance Capital Ltd is a part of the Reliance - Anil Dhirubhai Ambani (ADA) Group, and is ranked among the 25 most valuable private companies in India. Reliance Capital is one of India's leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking groups, in terms of net worth. Reliance Capital has interests in asset management and mutual funds, life and general insurance, private equity and proprietary investments, stock broking, depository services, distribution of financial products, consumer finance and other activities in financial services. The Reliance ADA Group is one of India's top 2 business houses, and has a market capitalization of over Rs.2,90,000 crore (US$ 75 billion), net worth in excess of Rs.55,000 crore (US$ 14 billion), cash flows of Rs. 11,000 crore (US$ 2.8 billion) and net profit of Rs. 7,700 crore (US$ 1.9 billion). Reliance MoneyReliance Money is a group company of Reliance Capital; one of India's leading and fastest growing private sector financial services companies, ranking among the top 3 private sector
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financial services and banking companies, in terms of net worth. Reliance Capital is a part of the Reliance ADA Group.
About Reliance Money in brief Reliance Money is a part of the Reliance Anil Dhirubhai Ambani Group and is promoted by Reliance capital. The fastest growing private sector financial services company in India ranked amongst the 3 private sector financial companies in terms of net worth. Reliance Money is a comprehensive financial solution provider that enables one to carry out trading and investment activities in a secure, cost-effective and convenient manner. Through Reliance Money, one can invest in a wide range of asset classes from Equity, Equity and Commodity Derivatives, Mutual Funds, Insurance products, IPOs to availing services of Money transfer and Money changing. Reliance Money offers the convenience of on-line and off-line transactions through a variety of means, including its, portal, call & Transact, Transaction Kiosks and at its network of affiliates. Some key steps of the company are Success is a journey, not destination if we look for examples to prove this quote then we can find many but there is none like that of Reliance Money. This company is today known as the largest financial service provider of India. Page | 9
Success sutras of Reliance MoneyThe success story of the company is driven by 9 success sutras adopted by in namely Trust, Integrity, Dedication, commitment, Enterprise, Hard work, Home work, Team work play , Learning and Innovation, Empathy and Humility and last but not least is its Network. Mission statement: Mission of the company is to be a leading and preferred service provider to the customers, and aims to achieve this leadership position by building an innovative, enterprising and technology driven organization which will set the highest standards of service and business ethics. Vision of Reliance Money: To achieve and in market leadership Reliance Money aimed for complete customer satisfaction, by combining its human and technological resources, to provide world class quality services. In the process Reliance Money strived to meet and exceed customers satisfaction and set industry standards. ORGANIZATION HIERARCHY
RELIANCE MONEY (Head Office Mumbai)
BRANCH OFFICE
Cluster Head
Business Development Executives Page | 10
Centre Manager
Executives
Sales Promoters
PRODUCTS AND SERVICESEquity- Reliance Money offers its clients competitively priced Equity broking, PMS and Portfolio Advisory Services. Trading execution assistance provided to clients.
Mutual Funds- Reliance Money offers dedicated research & expert advice on Mutual Funds. Life-Insurance- Clients can choose from different plans of almost all Insurance Companies where they can invest their money. A team of experts will suggest the best Insurance scheme which suits the clients requirement. General Insurance- Reliance Money assists in areas of Health insurance, Travel insurance, Home insurance and Motor insurance. Commodities- Reliance Money is a single platform to trade on both the major commodity exchanges i.e. NCDEX and MCX. In addition in-house research desk shall provide research reports on all major commodities which shall enable in getting views for trading and diversify clients holdings. Trade Execution assistance is also provided to clients. Structured Products, Art Investments- Structured Products is a new class of financial products for investors apprehensive of increased volatility in stock markets. Specially designed products Page | 11
could include Equity, Index-linked in nature, Real Estate Funds, Art Funds, Overseas Investments and Infrastructure Investments. Tax Planning- Reliance Moneys wealth management offerings include tax related services like: Tax Planning & advisory services and filling Tax returns for individuals. Real Estate Advisory Services- It provides Broking Model for lease/rent and buy/sell of property, Property Valuation, Real-estate Consulting Corporate earning model, etc. Offshore Investments- Reliance Money provides a unique opportunity to invest in international financial markets through the online platform which includes different product ranges. (2) HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank the. The history of mutual funds in India can be broadly divided into four distinct phases First Phase 1964-87Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management. Second Phase 1987-1993 (Entry of Public Sector Funds)1987 marked the entry of non- UTI, public sector mutual funds. These were set up by public sector banks, Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in
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December 1990. At the end of 1993, the mutual fund industry had assets under management of Rs.47, 004 crores. Third Phase 1993-2003 (Entry of Private Sector Funds)With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under management was way ahead of other mutual funds. Fourth Phase since February 2003In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76, 000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of Page | 13
September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes. Current status of Mutual Funds Industry in IndiaAt present there are 36 AMCs functioning in India. The total Assets under Management of all these AMCs as on 31st August, 2009 are Rs. 749,915.52 crores with Reliance Mutual Fund on the top with Rs. 117,313.78 crores under its management and Quantum Mutual Fund on the lowest with Rs. 70.33 crores under its management. Mutual Fund at the lowest with 11 schemes. The total number of schemes under operation is 3756 with ICICI Prudential Mutual Fund at the top with 323 Schemes and Quantum
(5) BACKGROUND AND NEED FOR THE STUDY- MF is a retail product designed to target small investors, salaried people and others who are intimidated by the stock market but, nevertheless, like to reap the benefits of stock market investing. At the retail level, investors are unique and are a highly heterogeneous group. Hence, designing a general product and expecting a good response will be futile except the case of UTI monopoly during 1964-1987. But with the entry of public sector banks and financial institutions in the field and the globalization and liberalization measures announced by the government led to a paradigm shift in the mind set of investors and the capital market environment became more unfriendly to retail investors. They had no other choice but to turn to MFs to reap the benefits of stock market investing. Hence, the need to be innovative in designing the product was not felt and investors had to choose from among the limited schemes offered. After the entry of private sector companies into the industry the competition started growing in the industry. Currently (as on 31/8/2009) there are 3756 schemes running with 36 AMCs (Source: Mutualfundsindia.com) with varied objectives and AMCs compete against one another by launching new products or repositioning old ones. The investors are having a lot of options to choose from so he is confused in his selection of the product. The choice of investors is affected by the different features of the scheme, the reputation of the AMCs, various services provided by the companies to the investors. Unless the MF schemes are tailored to his changing needs, and Page | 14
unless the AMCs understand the fund selection/switching behavior of the investors, survival of funds will be difficult in future. With this background an attempt is made in this paper to study the factors influencing the fund/scheme selection behaviour of Retail Investors. Over the last few years mutual funds are giving impressive returns, especially Equity Funds. There is a need to know the returns provided by the individual schemes and the risk levels at which they are delivered in comparison with the market and the risk free rates. The aim is also to identify the out-performers. There is a need to evaluate the performance of Indian Mutual Fund Schemes. (6) STATEMENT OF PROBLEM- The expectations of investors influence the price of the securities, the volume traded and various other financial operations in actual practice. These expectations of investors are influenced by their perception and humans generally relate perception to action. The evidence of prevalence of such a psychological state is seen among MF investors in India. For instance, UTI, which is synonymous to mutual funds in India, had a glorious past and perceived as a safe, high yield investment vehicle with the added tax benefit. Many UTI account holders have justified their beliefs by staying invested in UTI schemes even after the 1999 bail out and the July 2001 episode of repurchase freeze on US 64 for 6 months. People also believe that something they own is better than something they do not own. For instance, the existence of many poor performing funds with investors staying invested with them? In general, rules for investment, the analysis of investment and discussion of financial behaviour tend to assume behaviour, which is logical and internally consistent in various ways. Investor behaviour does not; however, always appear to conform to such expectational norms. Much of economic and financial theory is based on the notion that individuals act rationally and consider all available information in the decision making process. However, in the financial literature, there are no clear models, which explain the influence of perception and beliefs on expectations and decision making. No doubt, reality is so complex that trying to fit individual investors behaviour into a model is impossible. Investors behaviour may change from period to period even if the other variables influencing the behaviour are held constant. However, to a certain extent, the concepts can be borrowed from social psychology where behavioural patterns, rational and irrational are observed and empirically tested. On the same Page | 15
lines certain models can be developed to identify the financial behaviour, to the extent of the availability of the explanatory variables. Such models can help to understand the why and how? aspect of investor behaviour, which can have managerial implications for policy makers. The fund managers manage the portfolio of the mutual funds by undertaking the risk so they are expected to perform better than the market. The investment strategy and management style are qualitative but the fund return is the only quantitative indicator to judge the performance of mutual funds. Return alone should not be considered as the basis of measurement of the performance of a Mutual Fund scheme, it should also include the risk taken by the fund manager because different funds will have different levels of risk attached to them. There must be some performance indicator that will reveal the quality of stock selection of various AMCs. Hence, with this background, this study attempts to evaluate the behavioural aspects of fund selection techniques of individual investors during the period, May 2009 to August 2009 and also attempts to judge the performance of mutual funds using traditional measures.
(7) OBJECTIVES OF STUDY

The investors do not evaluate all possible product attributes while making a choice, but the marketers search is for identification of The key buying criteria or The key choice criteria or determinant attributes which are defined as certain features of a product offering that are closely associated with preferences. The study has the following general objectives1. To identify preferred saving avenue among investors and to identify the saving pattern of
investors. 2. To categorize investors as being inclined towards investment products based on certain parameters such as sex, age, qualifications, occupation, annual income etc. The study has the following specific objectives1. To judge the importance of factors that influences the investors to invest in mutual funds
and to identify the scheme preference of investors. 2. To perceive the preferred communication mode of investors. Page | 16
3. To identify the information sources influencing the scheme selection decision of investors.
4. To evaluate fund qualities that would affect the selection of Mutual Funds.
5. To understand the fund sponsor qualities influencing the selection of MFs/Schemes. 6. To evaluate investor related services that would affect the selection of Mutual funds.
7.
To compare the performance of the selected funds of different companies with the help of Sharpe Measure, Treynor Measure and Beta, measures of performance.
8. To examine the degree of correlation that exists between fund and market return.
9. To evaluate the diversification of the Portfolio of the selected funds. 10. To assess the Performance and selectivity skills of fund managers.
(8) TESTABLE HYPOTHESIS- The following hypothesis is made in the study1. The investors consider all the qualities of the fund as important in the selection of the
fund/scheme.
2. The investors consider all the qualities of AMC important in the selection of the scheme. 3. The investors consider all the investor services important in the selection of the scheme. 4. The portfolios are well diversified and fund managers are able to generate returns more
than that of the market because of their knowledge and stock selection skills.
(9) LIMITATIONS OF STUDY1. Sample size was limited to 200 only out of which only 60 respondents had invested in
Mutual Funds. The sample size may not represent whole market. 2. The study has not been conducted over an extended period of time considering both market ups and downs. The market state has a significant influence on the buying patterns and preferences of investors. The study cannot capture such situations. Page | 17
3. This study is limited to the investors of Lucknow, Varanasi and Kanpur only. Therefore
the inferences cannot be generalized. 4. A few respondents were not able to understand some of the terms of the questionnaire which may affect the study to a little extent.
5. Only 10 selected equity schemes of top 10 AMCs based on their Assets under
Management as on June 30, 2009 are evaluated for their performance.

6. The performance evaluation of mutual funds is restricted to a period of three years
starting from June 30, 2006 to June 30, 2009 to evaluate the performance of selected Mutual Funds but not from their inception.
7. The NAVs used in the study are obtained from amfi.com and also from
Mutualfundsindia.com, which in turn is supplied by the members. Members in turn have not followed any uniform role in the computation of NAV due to the flexibilities offered under SEBI Regulations. 8. This study excludes the effect of entry and exit loads of the Mutual funds. 9. The dividends if any are assumed to be paid in the end of the study period i.e. either at the end of the last quarter, or at the end of the last half year, or at the end of the previous year, as the case may be. (10) THEORETICAL FRAMEWORK Mutual Fund industry today is one of the most preferred investment avenues in India. However, with a large number of schemes to choose from, the retail investor faces problems in selecting funds. Factors such as investment strategy and management style are qualitative, but the funds record is an important indicator too. Though past performance alone cannot be indicative of future performance, it is, frankly, the only quantitative way to judge how good a fund is at present. Therefore, there is a need to correctly assess the past performance of different Mutual Funds. There must be some performance indicator that will reveal the quality of stock selection of various AMCs. The idea behind performance evaluation is to find the returns provided by the individual schemes and the risk levels at which they are delivered in comparison with the market and the risk free rates. The aim is also to identify the out-performers. The objective of the study is to evaluate the performance of Indian Mutual Fund Schemes. Return alone should not be considered as the basis of measurement of the performance of Page | 18
a Mutual Fund scheme, it should also include the risk taken by the fund manager because different funds will have different levels of risk attached to them. Risk associated with a fund, in a general, can be defined as Variability or fluctuations in the returns generated by it. The higher the fluctuations in the returns of a fund during a given period, higher will be the risk associated with it. These fluctuations in the returns generated by a fund are resultant of two guiding forces. First, general market fluctuations, which affect all the securities, present in the market, called Market risk or Systematic risk and second, fluctuations due to specific securities present in the portfolio of the fund, called Unsystematic risk. The Total Risk of a given fund is sum of these two and is measured in terms of standard deviation of returns of the fund. Systematic risk, on the other hand, is measured in terms of Beta, which represents fluctuations in the NAV of the fund vis-a-vis market. The more responsive the NAV of a Mutual Fund is to the changes in the market; higher will be its beta. Beta is calculated by relating the returns on a Mutual Fund with the returns in the market. While Unsystematic risk can be diversified through investments in a number of instruments, systematic risk cannot. In order to determine the risk-adjusted returns of investment portfolios, several eminent authors have worked since 1960s to develop composite performance indices to evaluate a portfolio by comparing alternative portfolios within a particular risk class. These measures are Sharpe Measure, Treynor Measure, Jensen Alpha and Fama Measure. (11) LITERATURE REVIEWIppolito (1992) and Bogle (1992) says that fund/scheme selection by investors is based on past performance of the funds and money flows into winning funds more rapidly than they flow out of losing funds. Goetzman (1997) states that there is a evidence that investor psychology affects the fund/scheme selection and switching. Lu Zheng (1998) examined the fund selection ability of MF investors and found that the investors decisions are based on short-term future performance and investors use fund specific information in their selection decision. Madhusudhan V. Jambodekar (1996) conducted a study to assess the awareness of MFs among investors, to identify the information sources influencing the buyer decision and the factors influencing the choice of a particular fund. The study revealed that income schemes and openended schemes are preferred over growth schemes and close-ended schemes during the prevalent market conditions. Investors look for Safety of Principal, Liquidity and Capital Appreciation in Page | 19
order of importance; Newspapers and Magazines are the first source of information through which investors get to know about MFs / Schemes and the investor service is the major differentiating factor in the selection of MFs. Shanmugham (2000) conducted a survey of 201 individual investors to study the information sourcing by investors, their perceptions of various investment strategy dimensions and the factors motivating share investment decisions, and reports that among the various factors, psychological and sociological factors dominated the economic factors in share investment decisions. Sujit Sikidar and Amrit Pal Singh (1996) carried out a survey with an objective to understand the behavioural aspects of the investors of the North Eastern region towards equity and mutual funds investment portfolio. The survey revealed that the salaried and self employed formed the major investors in mutural fund primarily due to tax concessions. Syama Sunder (1998) conducted a survey to get an insight into the mutual fund operations of private institutions with special reference to Kothari Pioneer. The survey revealed that Agents play a vital role in spreading the Mutual Fund culture; open-end schemes were much preferred then; age and income are the two important determinants in the selection of the fund/scheme; brand image and return are the prime considerations while investing in any Mutual Fund. Anjan Chakarabarti and Harsh Rungta (2000) stressed the importance of brand effect in determining the competitive position of the AMCs. Their study reveals that brand image factor, though cannot be easily captured by computable performance measures, influences the investors perception and hence his fund/scheme slection. SEBI NCAER Survey (2000) was carried out to estimate the number of households and the population of individual investors, their economic and demographic profile, portfolio size, investment preference for equity as well as other savings instruments. This is a unique and comprehensive study of Indian Investors, for, data was collected from 3,00,0000 geographically dispersed rural and urban households. Some of the relevant findings of the study are : Households preference for instruments match their risk perception; Bank Deposit has an appeal across all income class; 43% of the non-investor households equivalent to around 60 million households (estimated) apparently lack awareness about stock markets; and, compared with low income groups, the higher income groups have higher share of investments in Mutual Funds (MFs) signifying that MFs have still not become truly the investment vehicle for small investors. Nevertheless, the study predicts that in the next two years (i.e., 2000 hence) the investment of Page | 20
households in MFs is likely to increase. Sharad Panwar and Dr. R. Madhumathi found that public-sector sponsored, private-sector Indian sponsored and private-sector foreign sponsored mutual funds do not differ statistically in terms of portfolio characteristics such as net assets, common stock%, market capitalization, holdings, Top Ten %. However, there is a statistical difference between three classes of public-sector sponsored, private-sector Indian sponsored and private-sector foreign sponsored mutual funds in terms of average standard deviation, average variance and average coefficient of variation. Portfolio risk characteristics measured through private-sector Indian sponsored mutual funds seems to have outperformed both Public- sector sponsored and Private-sector foreign sponsored mutual funds. Residual variance is not linearly related to investment performance in terms of Jensens alpha and portfolio beta, regardless of the benchmark index used. The general linear model of analysis of covariance establishes differences in performance among the three classes of mutual funds in terms of portfolio diversification. S.Narayan Rao , evaluated performance of Indian mutual funds in a bear market through relative performance index, risk-return analysis, Treynors ratio, Sharpes ratio, Sharpes measure , Jensens measure, and Famas measure. The study used 269 open-ended schemes (out of total schemes of 433) for computing relative performance index. Then after excluding funds whose returns are less than risk-free returns, 58 schemes are finally used for further analysis. The results of performance measures suggest that most of mutual fund schemes in the sample of 58 were able to satisfy investors expectations by giving excess returns over expected returns based on both premium for systematic risk and total risk Jayadev (1996) evaluated the performance of 62 mutual funds schemes using NAV data for varying period between 1987 and 1995. He reported superior performance for bulk (30 out of 44) of the sample schemes when total risk was considered. However, in terms of systematic risk only 24 out of 44 schemes outperformed the benchmark portfolio. He also found that Indian mutual funds were not properly diversified. Further, in terms of Famas measure, he did not find selectivity ability of the fund manager. Amitab Gupta (2001) in his study, the selected schemes were evaluated with respect to the broad based BSE National Index to find out whether the schemes were able to beat the market. The most important and widely used measures of performance arePage | 21
(1) (Beta) Co-efficient (A Measure of Systematic Risk)
(2) Sharpes Measure of Performance

(3) Treynors Measure of Performance
(4) Jensens Measure of Performance

(5) Famas Measure of Performance
(6) Standard Deviation (A Measure of Total Risk) (7) Co-efficient of Determination: Measure of Diversification ( a) (Beta) Co-efficient - The beta is a measure of systematic risk or Non-diversifiable risk. The beta of a stock measures the sensitivity or volatility of the stock with reference to a broad based market index, e.g. SENSEX in India. In the case of Mutual Funds it represents fluctuations in NAV of a Mutual Fund vis--vis base market. The more responsive the NAV of a Mutual Fund is to the changes in the market the higher will be its beta and vice-versa. It is calculated by relating the returns on a Mutual Fund with the returns in the Market. A beta of 1 indicates that the security's price will move with the market, and the stock is called unity stock. A beta of less than 1 means that the security will be less volatile than the market and the stock is called low beta stock. A beta of greater than 1 indicates that the security's price will be more volatile than the market and the stock is called high beta stock. In the study it is assumed that the Beta is consistent during the period of study.
E.g. A beta of 1.2 for a stock would indicate that this stock is 20 per cent riskier than the Index. Similarly, a beta of 0.9 would indicate that this stock is 10 per cent (100-90) less risky than the Index. And, of course, a beta of one would mean that the stock is as risky as the stock market index. Beta is calculated using the following formula =N XY - X( Y)N X2- ( X)2
Where, X = Market or Index Return, and, Y = Return on Fund.

= Beta of the Fund.
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N = Number of Periods ( b) Sharpes Measure of Performance - This measure was developed by William Sharpe in 1966. Sharpe Measure measures the risk Premiums of the portfolio (average portfolio return less risk free return) relative to the total amount of risk in the portfolio (standard deviation of the portfolio). The Sharpe measure adjusts portfolio performance for total risk rather than market risk. It is also called reward-to-variability ratio. The Sharpe ratio tells us whether a portfolio's returns are due to smart investment decisions or a result of excess risk. The higher the Sharpe ratio for a portfolio, the better the portfolio has performed. major limitation of the Sharpe ratio is that it is based on the Capital Market Line (CML). The major character of the capital market line is only the efficient portfolios can be plotted on the CML but not inefficient. Hence it is assumed that a managed portfolio (mutual fund scheme) is an efficient portfolio. E.g.- If the portfolio A has an average return of 10% with a standard deviation of 2%, and portfolio B has an an average return of 12% with a standard deviation of 4%. Also risk free rate of return is 5%. Then the Sharpe Index for A is equal to 2.5 and for B is equal to 1.75. Therefore A will be ranked as better portfolio than B, because its Sharpe index is higher than that of B (2.5 1.75) despite the fact that portfolio B had a higher return.
It is calculated using the following formulaSt= rt- r* t
Where, St = Sharpe Index r* = riskless rate of interest (T - bill) t = Standard deviations of the returns of portfolio t
rt = average return on portfolio t
( c) Treynors Measure of Performance - This measure was developed by Jack Treynor in 1965. The Treynor measure is a relative measure of performance for investment managers and measures the return premium per unit of systematic risk (risk that cannot be diversified) as measured by the beta or relative volatility of the portfolio. While a high and positive Treynor's Page | 23
Index shows a superior risk-adjusted performance of a fund, a low and negative Treynor's Index is an indication of unfavorable performance. It is also called reward-to-volatility ratio. The major limitation of the Treynor Index is that it can be applied to the schemes with positive betas during the bull phase of the market. The results will mislead if applied during bear phase of the market to the schemes with negative betas. The second limitation is it ignores the reward for unsystematic or unique risk. E.g.- If the portfolio A has an average return of 10% with a Beta of 0.5, and portfolio B has an an average return of 12% with a Beta of 1.0. Also risk free rate of return is 5%. Then the Treynors Index for A is equal to 0.10 and for B is equal to 0.07. Therefore A will be ranked as better portfolio than B, because its index is higher than that of B (0.10 0.07) despite the fact that portfolio B had a higher return. It is calculated using the following formulaTn= rn- r*n
Where, Tn = Treynors Index r* = riskless rate of interest (T - bill)

n
= Beta coefficient of portfolio n
rn = average return on portfolio n
( d) Jensens Measure of Performance - This measure was developed by Michael Jensen in 1968. This measures the Portfolio Managers predictive ability i.e. his ability to earn returns through successful prediction of security prices which are higher than those which an ordinary investor would expect given the level of riskiness of his portfolio and average market return i.e. the expected (CAPM) returns. It is a measure of absolute performance on a risk adjusted basis. A positive value for Jensen's alpha means that the fund manager has "beat the market" with his or her stock picking skills and vice-versa. If it is equal to zero then it indicates neutral performance by portfolio manager. A positive value of this would indicate that the scheme has provided a higher return over the CAPM return and lies above Security Market Line (SML) and a negative value would indicate it has provided a lower than expected returns and lies below Page | 24
SML. The Jensen model assumes that the portfolio is fully invested and is subjected to the limitations of CAPM. Limitation of this model is that it considers only systematic risk not the entire risk associated with the fund and an ordinary investor cannot mitigate unsystematic risk, as his knowledge of market is primitive. It is calculated using the following formulaRjt- RFt= j+ j (RMt- RFt)
Where, Rjt= Average return on portfolio j for a period t

RFt= Riskless rate of interest for a period t j= Intercept that measures the forecasting ability of the portfolio manager j= A measure of systematic risk for Portfolio j RMt = Average return of a market portfolio for period t
( e) Famas Measure of Performance - This measure was developed by Eugene Fama in 1972. This model is an extension of Jenson model. This model compares the performance, measured in terms of returns, of a fund with the required return commensurate with the total risk associated with it. The difference between these two is taken as a measure of the performance of the fund and is called Net Selectivity. The Net Selectivity represents the stock selection skill of the fund manager, as it is the excess returns over and above the return required to compensate for the total risk taken by the fund manager. A positive value for Fama indicates that the fund earned returns higher than expected returns and lies above Capital Market Line (CML) and a negative value indicates that the fund earned returns lower than expected returns and will lie below the Capital Market Line (CML). It is calculated using the following formulaFP = rP- rf
P m rm - rf
Page | 25
Where, FP = Famas Measure for Portfolio,

rP = Portfolio Return, rf = Risk Free Return, P= Standard Deviation of the Portfolio Returns m= Standard Deviation of the Market Returns rm= Market Return.
The purpose of performance evaluation is that it should be in a position to identify the mistakes and suggest a direction for the correction. A comparison of Sharpes and Treynors ratio will help the fund managers to correct their actions from risk angle and comparison of Jensens and Famas measures will help from return angle. ( f) Standard Deviation It measures the absolute dispersion or variability or volatility. It shows how the values in a series deviate from the mean value of the series. It is also used as a measure of risk. The greater the Standard Deviation the greater the volatility in the fund returns i.e. the greater the total risk associated with a particular fund. It is calculated using the following formula = (x-x)2N
Where, = Standard Deviation, X = Values of the series,

x = Mean of the series,
N = Number of items in a series. (g) Co-efficient of Correlation The correlation measures the degree of relationship between two variables. The co-efficient of correlation varies between -1 to +1. The higher the correlation the greater is the degree of relationship between the variables. The correlation is used in this study to measure the relationship between the fund returns and market returns. Its formula is similar to that of the Beta. It is as followsr=N XY - X( Y)N X2- ( X)2
(h) Co-efficient of Determination It measures the diversification of the portfolio. It is the square of the Co-efficient of Correlation. Page | 26
(i) Returns on Fund - Returns on fund is calculated using the following formulaRf=NAVt+1+Dt+1- NAVtNAVt
Where, Rf = Returns on Mutual Fund.

NAVt= Net Asset Value at the end of the previous Period, NAVt+1= Net Asset Value at the end of the current Period, Dt+1 = Dividend received during the current Period.
( j) Returns on Market Index - Returns on Market Index is calculated using the following formulaRm=Mt+1-Mt Mt
Where, Rm= Return on Market Index,

Mt+1= Market Index at the end of Current Period, Mt= Market Index at the end of Previous Period,
(12) RESEARCH METHODOLOGY

(a) Designing of Questionnaire- To understand the savings preference, investment preference, scheme preference, time horizon for investment and objectives for investment in Mutual Funds, and to identify the information sources influencing scheme selection, and the preferred mode of communication, a questionnaire (ANNEXURE I) was designed and the respondents were asked to rank their preferences on a ranking scale. The questionnaire also contains 21 factors that are of varied importance to investors while taking decision to invest in Mutual Funds. These factors are divided into 3 major groups Scheme Qualities, AMC Qualities and Investor Services. The investors were asked to rate the importance of each of these factors on a 5 point scale ranging from Highly Important (1) to not at all Important (5). These factors are as follows(A) Scheme Qualities1. Funds/Schemes performance record 2. Funds/Schemes brand name 3. Schemes portfolio constituents 4. Reputation of scheme(s), portfolio manager(s)
Page | 27
5. Investment/Withdrawal facilities 6. Rating by a rating agency 7. Innovativeness of the Scheme 8. Products with tax benefits 9. Entry and Exit load 10. Safety of capital
(B)
AMC Qualities1. Private Sector / Public Sector ownership 2. Reputation of the company 3. Range of schemes with different qualities 4. Efficiency of research wing 5. Companys expertise in managing money
(C)
Investor Services1. Disclosure of investment objectives, method and Periodicity of valuation in
advertisement.
2. Disclosure of method periodicity of schemes sales and repurchase in offer document. 3. Announcement of NAV on every trading day 4. Disclosure of deviation of the investments from the expected pattern. 5. Disclosure of investments at regular intervals. 6. Mutual Fund Investors grievance redressal machinery.
(b) Duration of Study- The survey is conducted for a period of two months starting from May 10, 2009 to July 10, 2009. The performance of the Mutual Funds is calculated for a period of three years starting from July 2006 to June 2009. (c) Sample Selection- The survey is conducted on 120 investors out of which 60 investors invested in Mutual Funds. The sample for study includes 29 Government Employees, 26 Private Sector Employees, 21 Self-Professionals, 27 Businessmen, and 13 Retired Government Employees so as to get effective results. Out of total 120 respondents, 55 investors invested
Page | 28
through Reliance Money. The survey was conducted in certain areas of Lucknow, Kanpur and Varanasi only. For the second part of the study the sample includes 10 similar equity schemes of Top 10 fund houses selected on the basis of their Assets under Management (AUM) as on 30th June 2009. This includes 9 open ended schemes and 1 closed ended scheme. More than 75% of corpus of each scheme is invested in equity stocks. (13) Data Collection and Analysis- The report is based on primary as well as secondary data. For the first part of the study Primary data was collected through the above designed Questionnaire using telephone calls, e-mails and also personal interviewing the respondents. The data is analyzed using the correlation analysis, chi-square test and analysis of variance. For the second part Secondary data is collected from the offer document of the funds, the websites of respective AMCs, amfiindia.com and MutualFundsindia.com. The data is analyzed using the Sharpe Measure, Treynors Measure, Jensen Measure, Fama Measure, Standard Deviation and Correlation Analysis. The profile of the investors is given below-
RESPONSES DURING THE SURVEY
INVESTOR PROFILE
NO. OF RESPONDENTS
SEX Male Female AGE Below 30 30-40 40-50 50 and above 42 70 54 34 Page | 29 136 64
OCCUPATION Salaried Businessman Professional Retired ANNUAL INCOME Below 2,00,000 2,00,000-3,00,000 3,00,000-4,00,000 Above 4,00,000 ANNUAL SAVINGS Below 50,000 50,000 100,000 100,000 150,000 Above 150,000 INVESTMENTS Fixed Deposits Mutual Funds Life Insurance Stock Market Postal Savings Others OBJECTIVE Liquidity / Safety Growth Returns 21 16 12 Page | 30 75 60 28 22 6 9 67 52 43 38 51 77 38 34 75 47 41 37
Tax Benefits TYPE OF FUNDS Open-Ended Funds Close-Ended Funds Interval-Funds SCHEME PREFERENCE Equity (Growth) Equity (Dividend) Debt Balanced Sector Specific
11
41 13 6
19 8 17 10 6
INFLUENCE OF ENVIRONMENTAL FACTORS
ROUTE
NO OF RESPONDENTS
Self Evaluation Advisors Commercials Friends/Family
21 17 13 9
MODE OF COMMUNICATION FOR RECEIVING UPDATES AND PERFORMANCE
MODE
NO OF RESPONDENTS
Page | 31
Personal Communication Internet / e-mail Telephone No Preference
21 16 14 9
Analysis of the Findings- The relationship between important factors has been analyzed with the help of Chi-Square Test. The following pairs have been analyzed1. Income and Savings- The relationship between the savings and investment can be
presented with the help of following table and diagram, Income / Savings Below 2,00,000 2,00,000-3,00,000 3,00,000-4,00,000 Above 4,00,000 Below 50,000 47 19 1 0 50,000-100,000 4 37 10 1 100,000-150,000 0 21 17 5 Above 150,000 0 0 6 32
Page | 32
2. Savings and Investments-
Investments / Savings Fixed Deposits Mutual Funds Life Insurance Stock Market Postal Savings Others
Below 50,000 42 13 5 3 3 1
50,000-100,000 16 16 11 6 1 2
100,000-150,000 9 15 7 7 2 3
Above 150,000 8 16 5 6 0 3
Page | 33
3. Age and Time HorizonAge / Time Below 30 30-40 40-50 50 and above Below 1 year 7 15 8 6 1-3 years 10 16 19 17 3-5 years 13 25 12 9 Above 5 years 12 14 15 2
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4. Age and InvestmentAge / Investment Below 30 30-40 40-50 50 and above Fixed Deposits 9 25 22 19 Mutual Funds 26 20 12 2 Life Insurance 2 12 11 3 Stock Market 5 11 4 2 Postal Savings 0 0 2 4 Others 0 2 3 4
5. Age and SchemeAge / Scheme Equity (Growth) Equity (Dividend) Debt Balanced Sector Specific Page | 35
Below 30 30-40 40-50 50 and above
11 6 2 0
2 3 3 0
7 5 4 1
3 4 2 1
3 2 1 0
A. RANKING OF AMC QUALITIES-
NO OF AMC QUALITIES 1 Private Sector / Public Sector ownership Reputation of the company Range of schemes with 21 25 24 RESPONDENTS 2 16 17 20 3 12 11 9 4 7 6 3 5 4 1 4
RANK (Based on Weighted Average) One Two Three Reputation of the company Range of schemes with different qualities Companys expertise in Page | 36
different qualities Efficiency of research wing Companys expertise in managing money 13 19 16 20 10 16 12 4 9 1 Four Five
managing money Private Sector / Public Sector ownership Efficiency of research wing
Anova: Single Factor (AMC Qualities) SUMMARY Groups Count Sum Average Variance Column 1 5 60 12 46.5 Column 2 5 60 12 88 Column 3 5 60 12 99.3 Column 4 5 60 12 7.5 Column 5 5 60 12 78.5 ANOVA df MS 4 0.16 20 63.96 24
Source of Variation Between Groups Within Groups Total
SS 0.64 1279.2 1279.84
F P-value 0.0025 0.99999
F crit 2.86608
The F Value is much less than the critical or table value which means that people consider all the qualities of AMC as important while investing in a fund. Therefore the hypothesis that investors consider all the qualities of the AMC as important factor while making investment in mutual funds stands accepted. The difference in the sample is due to random sampling error.
B. RANKING OF SCHEME QUALITIES SCHEME QUALITIES NO OF RANK
Page | 37
RESPONDENTS 1 Funds/Schemes performance record Funds/Schemes brand name Schemes portfolio constituents 32 29 15 2 21 15 12 3 5 10 21 4 2 5 9 5 0 1 3
(Based on Weighted Average) One Two Three Safety of Capital Funds/Schemes performance record Products with tax benefits Funds/Schemes brand name Entry and Exit load Investment/Withdrawal facilities Schemes portfolio constituents New Features of the Scheme Rating by a rating agency Reputation of scheme(s), portfolio manager(s)
Entry and Exit load Investment/Withdrawal facilities
29
14
Four
21
19
11
Five
Rating by a rating agency New Features of the Scheme Products with tax benefits Reputation of scheme(s), portfolio manager(s) Safety of Capital
12
14
14
11
Six
13 26 13 32
21 24 5 18
10 6 11 7
6 3 17 2
10 1 14 1
Seven Eight Nine Ten
The F Value is much less than the critical value or table value which shows that investors consider all the qualities of the a scheme as important factor while selecting a particular scheme. Therefore the hypothesis that, investors consider all the qualities of the scheme important while selecting a particular scheme stands accepted. The differences in the sample are due to the random sampling error. The ANOVA calculation is given on the next pagePage | 38
A ova: Sin Factor (Schem Qualities) n gle e SU M R M A Y Groups Count Sum Average Variance Colum 1 n 5 60 12 193.5 Colum 2 n 5 60 12 118 Colum 3 n 5 60 12 45 Colum 4 n 5 60 12 108.5 Colum 5 n 5 61 12.2 57.2 Colum 6 n 5 60 12 4.5 Colum 7 n 5 60 12 31.5 Colum 8 n 5 60 12 144.5 Colum 9 n 5 60 12 20 Colum 10 n 5 60 12 170.5 A NOV A df M S 4 509.17 45 34.14 49
Source of Variation B een G etw roups W G ps ithin rou T otal
SS 2036.68 1536.3 3572.98
F 14.9142
P-value 7.8E -08
F crit 2.57874
C. RANKING OF INVESTOR SERVICES-
NO OF SCHEME QUALITIES 1 Disclosure of investment objectives, method and Periodicity of valuation in advertisement Disclosure of method, RESPONDENTS 2 3 4 5
RANK (Based on Weighted Average)
31
23
One
Announcement of NAV on every trading day
27
18
10
Two
Disclosure of investment Page | 39
periodicity of schemes sales and repurchase in offer document
objectives, method and Periodicity of valuation in advertisement Disclosure of method, periodicity of schemes sales and repurchase in offer document Mutual Fund Investors grievance redressal machinery Disclosure of investments at regular intervals Disclosure of deviation of the investments from the expected pattern
Announcement of NAV on every trading day Disclosure of deviation of the investments from the expected pattern Disclosure of investments at regular intervals Mutual Fund Investors grievance redressal machinery
32
21
Three
19
24
11
Four
18
24
13
Five
20
26
10
Six
Anova: Single Factor (Scheme Qualities) SUMMARY Groups Count Sum Average Variance Column 1 5 60 12 197.5 Column 2 5 60 12 112.5 Column 3 5 60 12 198.5 Column 4 5 60 12 89.5 Column 5 5 60 12 90.5 Column 6 5 61 12.2 112.2 ANOVA df MS 5 0.03333 24 133.45 29
Source of Variation Between Groups Within Groups Total
SS 0.166667 3202.8 3202.967
F P-value F crit 0.00025 1 2.62065
The F value is less than the table value which means that the investor consider all the investor services as important while selecting a particular scheme. Hence the hypothesis that
Page | 40
investor considers all the investor services as important in their fund scheme selection stands true. The difference in the sample is due to the random sampling error.
(14) PERFORMANCE ANALYSIS OF MUTUAL FUNDS

The performance of Mutual Funds has been measured for a period of three years starting from July 2006 to June 2009. The funds performance is analyzed and a comparison is made between the performance of various funds with their respective benchmark index with the help of above discussed methods on Quarterly, Half-yearly, and Yearly basis in order to present a more comparative analysis. It is done keeping in mind the different investment periods of the investors. The funds chosen belong to the top 10 AMCs in India as on 30 th June 2009. The rankings of the AMCs are based on the total AUM under them as on the date. The funds are selected based on their corpus. More than 75% of the total corpus of each fund is invested in the equity. The following 10 Equity funds are included in the study (1) Birla Sunlife Equity Fund (2) Templeton India Equity Fund (3) UTI Equity Fund Page | 41
(4) SBI Equity Fund (5) Kotak Emerging Equity Scheme (6) HDFC Equity Fund (7) LIC Equity Fund (8) ICICI Discovery Fund (9) IDFC Imperial Equity Fund (10) Reliance Equity Fund The analysis of the various mutual funds is as follows-
(1) Birla Sunlife Equity Fund - It is a open-ended equity fund. The date of inception is August 27, 1998 with a NAV of Rs. 10. The Benchmark Index is BSE 200. The primary investment objective is to provide long term capital appreciation through a portfolio with a target allocation of 90% in Equity. Its Asset Allocation is 93.70% in Equity, 3.30% in Debt and 3.00% in Cash and Cash Equivalent at the end of July 2009. The fund size is Rs. 1112.67 crores as on July 31, 2009. Its results are as followsRp (%) Rm (%) Rf (%) Rp Rm Rp - Rf Rm - Rf
( m)
Sharpe (St)m
Treynor (Tn)m
Quarterly Results 6.16 5.12 4.58 1.04 1.58 0.54 22.40 0.02 0.54
Half-Yearly Results 12.65 11.91 4.64 0.74 8.01 7.27 35.33 0.21 7.27
Yearly Results 18.52 13.52 4.51 5.00 14.01 9.01 21.21 0.42 9.01 Page | 42
Where, Rp = Average Returns for Fund for particular period,

Rm = Average Returns for the Market Index for particular period, Rf = Risk free Rate of Return (T-Bill),
= Standard Deviation of the Returns, r = Correlation of fund returns with market returns, r2 = Co-efficient of Determination eta ( )p Sharpe (St)p Treynor (Tn)p Jensen ( j ) Fama (FP) ( p) (r) (r2)
Quarterly Results 1.07 0.06 1.48 1.00 0.99 24.25 0.991 0.982
Half-Yearly Results 0.98 0.22 8.17 0.89 Yearly Results 1.30 0.50 10.78 2.29 2.30 27.66 0.999 0.998 0.81 35.03 0.991 0.982
(a) Quarterly Analysis- The Beta of fund and the standard deviation of the fund returns is
more than that of the market in relation to risk free rate. This shows that the fund is more volatile and risky as compared to the market both in terms of Systematic Risk and Total Risk but it is compensating for that risk by earning 1.04% more than market and also earning 1.58% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama calculated for the fund is positive which shows that the fund manager has beaten the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
Page | 43
(b) Half-Yearly Analysis- The Beta of fund and the standard deviation of the fund returns is
less than that of the market in relation to risk free rate. This shows that the fund is less risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk and it is also compensating for the risk by earning 0.74% more than market and 8.01 % more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama calculated for the fund is positive which shows that the fund manager has beaten the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
(c) Yearly Analysis- The Beta of fund and the standard deviation of the fund returns is more
than that of the market in relation to risk free rate. This shows that the fund is more risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk but it is compensating for that risk by earning 5.00% more than market and also earning 14.01% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama calculated for the fund is positive which shows that the fund manager has beaten the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
(2) Templeton India Equity Fund- It is a diversified open ended equity fund. The date of inception is May 18, 2006 with a NAV of Rs. 10 per unit. The Benchmark Index is BSE 200. The primary investment objective is to provide a combination of regular income and long term capital appreciation by investing primarily in stocks that have a current or potentially attractive dividend yield. Its Asset Allocation is 93.81% in Equity and 6.19% in Cash and Cash Equivalent at the end of July 2009. The fund size is Rs. 1175.62 crores as on July 31, 2009. Its results are as follows-
Page | 44
Rp (%)
Rm (%)
Rf (%)
Rp - Rm
Rp - Rf
Rm - Rf
( m)
Sharpe (St)m
Treynor (Tn)m
Yearly Results 69.37 13.52 4.51 55.85 64.86 9.01 21.21 0.42 9.01

= Standard Deviation of the Returns, r = Correlation of fund returns with market returns, r2 = Co-efficient of Determination eta ( )p Sharpe (St)p Treynor (Tn)p Jensen ( j) Fama (FP) ( p) (r) (r2)
(a) Quarterly Analysis- The Beta of fund is less than that of the market and the standard
deviation of the fund returns is more than that of the market. This shows that the fund is less risky as compared to the market in terms of Systematic Risk but it is more volatile Page | 45
and risky as compared to the market in terms of Total Risk and it is compensating for the risk by earning 11.58% more than market and also earning 12.12% more than the RiskFree rate. Sharpe ratio and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama calculated for the fund is positive which shows that the fund manager has beaten the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
(b) Half-Yearly Analysis- The Beta of fund and the standard deviation of the fund returns is
more than that of the market. This shows that the fund is more risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk but it is compensating for the risk by earning 22.61% more than market and 29.88 % more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama calculated for the fund is positive which shows that the fund manager has beaten the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
(c) Yearly Analysis- The Beta of fund is less than that of the market and the standard
deviation of the fund returns is more than that of the market. This shows that the fund is less risky as compared to the market in terms of Systematic Risk but it more volatile and risky as compared to the market in terms of Total Risk and it is compensating for the risk by earning 55.85% more than market and also earning 64.86% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama calculated for the fund is positive which shows that the fund manager has beaten the market with his stock selection skills. There is a low degree of positive correlation between the fund returns and market returns and portfolio is not well diversified. (3) UTI Equity Fund- It is an open ended equity fund. The date of inception is April 20, 1992 with a NAV of Rs. 10 per unit. The Benchmark Index is BSE 100. The principal investment Page | 46
objective is to provide long term capital appreciation through investing at least 80% of its funds in equity and equity related instrument with medium to high risk profile and upto 20% in debt and money market instruments with low to medium risk profile. Its Asset Allocation is 90.68% in Equity, 2.25% in Debt and 7.07% in Cash and Cash Equivalent at the end of July 2009. The fund size is Rs. 1629.68 crores as on July 31, 2009. Its results are as followsRp (%) Rm (%) Rf (%) Rp Rm Rp - Rf Rm - Rf
( m)
Sharpe (St)m
Treynor (Tn)m
Quarterly Results 3.32 5.10 4.58 (-1.78) (-1.26) 0.52 21.78 0.02 0.52
Half-Yearly Results 6.55 11.84 4.64 (-5.29) 1.91 7.20 34.62 0.21 7.20
Yearly Results 10.37 13.81 4.51 (-3.44) 5.86 9.30 20.42 0.46 9.30

Quarterly Results 0.71 -0.08 -1.77 (-1.63) (-1.64) 15.85 0.989 0.978
Half-Yearly Results 0.40 0.09 4.78 (-0.97) (-2.12) 19.47 0.726 0.527 Page | 47
Yearly Results 0.70 0.41 8.37 (-0.65) (-0.65) 14.23 0.999 0.998
(a) Quarterly Analysis- The Beta and the standard deviation of the fund returns is less than
that of the market. This shows that the fund is less risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk. It is earning 1.78% less than market and also earning 1.26% less than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is negative and less than that of the market which shows that the funds performance is not up to the mark when compared to the market. The Jensens Alpha and Fama calculated for the fund is negative which shows that the fund manager has not been able to beat the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
(b) Half-Yearly Analysis- The Beta and the standard deviation of the fund returns is less
than that of the market. This shows that the fund is less risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk. It is earning 5.29% less than market but is earning 1.91% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is less than that of the market which shows that the funds performance is not up to the mark when compared to the market. The Jensens Alpha and Fama calculated for the fund is negative which shows that the fund manager has not been able to beat the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
(c) Yearly Analysis- The Beta and the standard deviation of the fund returns is less than that
of the market. This shows that the fund is less risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk. It is earning 3.44% less than market but is earning 5.86% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is less than that of the market which shows that the funds performance is not up to the mark when compared to the market. The Jensens Alpha and Fama calculated for the fund is negative which shows that the fund manager has not been able to beat the market with his stock selection skills. There is Page | 48
a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
(4) SBI Equity Fund- It is a diversified open ended equity fund. The date of inception is January 1, 1991 with a NAV of Rs. 10 per unit. The Benchmark Index is BSE 100. The primary investment objective is to provide the investor Long-term capital appreciation by investing in 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. Its Asset Allocation is 92.51% in Equity, 1.35% in Debt and 6.14% Cash and Cash Equivalent at the end of July 2009. The fund size is Rs. 370.56 crores as on July 31, 2009. Its results are as followsRp (%) Rm (%) Rf (%) Rp - Rm Rp - Rf Rm - Rf
( m)
Sharpe (St)m
Treynor (Tn)m
Yearly Results 16.10 13.81 4.51 2.29 11.59 9.30 20.42 0.46 9.30

= Standard Deviation of the Returns, r = Correlation of fund returns with market returns, r2 = Co-efficient of Determination.
Page | 49
eta ( )p
Sharpe (St)p
Treynor (Tn)p
Jensen ( j )
Fama (FP)
( p)
(r)
(r2)
(a) Quarterly Analysis- The Beta of fund is less than that of the market and the standard
deviation of the fund returns is more than that of the market. This shows that the fund is less risky as compared to the market in terms of Systematic Risk but it is more volatile and risky as compared to the market in terms of Total Risk and it is compensating for the risk by earning 0.70% more than market and also earning 1.22% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama calculated for the fund is positive which shows that the fund manager has beaten the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
(b) Half-Yearly Analysis- The Beta and the standard deviation of the fund returns is more
than that of the market. This shows that the fund is more risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk. It is compensating for the risk by earning 0.70% more than market but is earning 7.90% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama calculated for the fund is positive which shows that the fund manager has beaten the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified. Page | 50
of the market. This shows that the fund is less risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk. But still it is earning 2.29% more than market and 11.59% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama calculated for the fund is positive which shows that the fund manager has beaten the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
(5) Kotak Emerging Equity Scheme- It is a diversified close-ended equity fund. The date of inception is March 30, 2007 with a NAV of Rs. 10. The Benchmark Index is BSE Midcap. The primary investment objective is to generate long-term capital appreciation from a portfolio of equity and equity related securities, by investing predominantly in mid and small cap companies. Its Asset Allocation is 81.77% in Equity and 3.35% in Debt and 14.88% in Cash and Cash Equivalent at the end of July 2009. The fund size is Rs. 134.09 crores as on July 31, 2009. Its results are as followsRp (%) Rm (%) Rf (%) Rp - Rm Rp Rf Rm - Rf
( m)
Sharpe (St)m
Treynor (Tn)m
Quarterly Results 0.14 3.98 4.58 (-3.84) (-4.44) (-0.60) 33.23 -0.02 (-0.60)
Half-Yearly Results -1.33 5.49 4.64 (-6.82) (-5.97) Yearly Results -18.62 -11.61 4.51 (-7.01) (-23.13) (-16.12) 5.86 -2.75 (-16.12) 0.85 48.05 0.02 0.85
Page | 51
= Standard Deviation of the Returns, r = Correlation of fund returns with market returns, r2 = Co-efficient of Determination. eta ( )p Sharpe (St)p Treynor (Tn)p Jensen ( j ) Fama (FP) ( p) (r) (r2)
Half-Yearly Results 0.80 -0.15 -7.46 (-6.65) Yearly Results 0.78 -3.10 -29.65 (-10.56) (-2.65) 7.47 1.000 1.000 (-6.67) 39.96 0.972 0.945
that of the market. This shows that the fund is less risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk but it is earning 4.44% less than market and 0.60% less than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is negative and less than that of the market which shows that the funds performance is not up to the mark with that of the market. The Jensens Alpha and Fama calculated for the fund is negative which shows that the fund manager has not been able to beat the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
than that of the market. This shows that the fund is less risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk. It is earning 6.82% less than market and 5.97% less than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is negative and less than that of the Page | 52
market which shows that the funds performance is not up to the mark with that of the market. The Jensens Alpha and Fama calculated for the fund is negative which shows that the fund manager has not been able to beat the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
(c) Yearly Analysis- The Beta of fund is less than that of the market and the standard
deviation of the fund returns is more than that of the market. This shows that the fund is less risky as compared to the market in terms of Systematic Risk but it is more volatile and risky as compared to the market in terms of Total Risk. It is earning 7.01% less than market and 23.13% less than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is negative and less than that of the market which shows that the funds performance is not up to the mark with that of the market. The Jensens Alpha and Fama calculated for the fund is negative which shows that the fund manager has not been able to beat the market with his stock selection skills. There is a positive perfect correlation between the fund returns and market returns and portfolio is highly diversified. (6) HDFC Equity Fund - It is a open-ended equity fund. The date of inception is January 1, 1995 with a NAV of Rs. 10. The Benchmark Index is S & P CNX 500. The primary investment objective is to provide capital appreciation through investments predominantly in equity oriented securities. Its Asset Allocation is 94.74% in Equity and 5.26% in Cash and Cash Equivalent at the end of July 2009. The fund size is Rs. 4337.71 crores as on July 31, 2009. Its results are as followsRp (%) Rm (%) Rf (%) Rp - Rm Rp - Rf Rm - Rf
( m)
Sharpe (St)m
Treynor (Tn)m
Yearly Results Page | 53
15.12
12.71
4.51
2.41
10.61
8.20
21.91
0.37
8.20

that of the market. This shows that the fund is less risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk but still it is earning 0.78% more than market and 1.02% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama calculated for the fund is positive which shows that the fund manager has beaten the
Page | 54
market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
than that of the market. This shows that the fund is less risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk. It is earning 0.82% less than market and 6.02% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama calculated for the fund is positive which shows that the fund manager has beaten the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
of the market. This shows that the fund is less risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk. But still it is earning 2.41% more than market and 10.61% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama calculated for the fund is positive which shows that the fund manager has beaten the market with his stock selection skills. There is a positive perfect correlation between the fund returns and market returns and portfolio is highly diversified.
(7) LIC Equity Fund- It is a open ended equity fund. The date of inception is February 15, 1999 with a NAV of Rs. 10. The Benchmark Index is S & P CNX Nifty. The primary investment objective is to obtain maximum possible capital growth consistent with reasonable levels of safety and security by investing the funds mainly in equities and also in debts and other permitted instruments of capital and money market. Its Asset Allocation is 96.22% in Equity and 3.68% in Cash and Cash Equivalent at the end of July 2009. The fund size is Rs. 103.49 crores as on July 31, 2009. Its results are as followsPage | 55
Rp (%)
Rm (%)
Rf (%)
Rp - Rm
Rp - Rf
Rm - Rf
( m)
Sharpe (St)m
Treynor (Tn)m
Quarterly Results 12.21 4.35 4.58 7.86 7.63 (-0.23) 18.63 -0.01 (-0.23)
Yearly Results 46.84 12.60 4.51 34.24 42.33 8.09 18.71 0.43 8.09

(a) Quarterly Analysis- The Beta and the standard deviation of the fund returns is more
than that of the market. This shows that the fund is more risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk and it is compensating for Page | 56
the risk by earning 7.86% more than market and 7.63% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama calculated for the fund is positive which shows that the fund manager has beaten the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
than that of the market. This shows that the fund is more risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk and it is compensating for the risk by earning 19.39% more than market and 25.06% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama calculated for the fund is positive which shows that the fund manager has beaten the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
(c) Yearly Analysis- The Beta and the standard deviation of the fund returns is more than
that of the market. This shows that the fund is more risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk and it is compensating for the risk by earning 34.24% more than market and 42.33% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama calculated for the fund is positive which shows that the fund manager has beaten the market with his stock selection skills. There is a positive perfect correlation between the fund returns and market returns and portfolio is well diversified.
(8) ICICI Discovery Fund - It is a open-ended equity fund. The date of inception is August 14, 2004 with a NAV of Rs. 10. The Benchmark Index is S & P CNX Nifty. The primary investment objective is to generate returns through a combination of dividend income and capital Page | 57
appreciation by investing primarily in a well diversified portfolio of value stocks. Its Asset Allocation is 79.54% in Equity and 20.46% in Cash and Cash Equivalent at the end of July 2009. The fund size is Rs. 300.74 crores as on July 31, 2009. Its results are as followsRp (%) Rm (%) Rf (%) Rp - Rm Rp - Rf Rm - Rf
( m)
Sharpe (St)m
Treynor (Tn)m
Quarterly Results 4.40 4.35 4.58 0.05 (-0.18) (-0.23) 18.63 -0.01 (-0.23)
Yearly Results 10.06 12.60 4.51 (-2.54) 5.55 8.09 18.71 0.43 8.09

Quarterly Results 1.21 -0.01 -0.14 0.10 0.12 24.13 0.940 0.883
Half-Yearly Results 1.03 0.13 4.30 (-1.41) Yearly Results (-1.58) 33.02 0.976 0.952
Page | 58
0.21
0.30
26.42
3.85
(-2.46)
18.55
0.922
0.850
(a) Quarterly Analysis- The Beta and the standard deviation of the fund returns is more
than that of the market. This shows that the fund is more risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk and it is earning 0.05% more than market and 0.18% less than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is negative but more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama calculated for the fund is positive which shows that the fund manager has beaten the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
than that of the market. This shows that the fund is more risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk and it is earning 1.24% less than market and 4.43% more than the Risk-Free rate. Sharpe ratio for the fund is less and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market in terms of systematic risk but not in terms of total risk. The Jensens Alpha and Fama calculated for the fund is negative which shows that the fund manager has not able to beat the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
of the market. This shows that the fund is less risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk and it is earning 2.54% less than market and 5.55% more than the Risk-Free rate. Sharpe ratio for the fund is less and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market in terms of systematic risk but not in terms of total risk. The Jensens Alpha for the fund is positive but Fama for the fund is negative which again shows that the fund manager has beaten Page | 59
the market with his stock selection skills in terms of systematic risk not in terms of total risk. There is a positive perfect correlation between the fund returns and market returns and portfolio is well diversified.
(9) IDFC Imperial Equity Fund - It is a open-ended equity fund. The date of inception is March 16, 2006 with a NAV of Rs. 10. The Benchmark Index is S & P CNX Nifty. The primary investment objective is to seek to generate capital appreciation and/or provide income distribution from a portfolio of predominantly equity and equity related instruments. Its Asset Allocation is 83.81% in Equity and 16.19% in Cash and Cash Equivalent at the end of July 2009. The fund size is Rs. 353.59 crores as on July 31, 2009. Its results are as followsRp (%) Rm (%) Rf (%) Rp - Rm Rp - Rf Rm - Rf
( m)
Sharpe (St)m
Treynor (Tn)m
Quarterly Results 5.20 4.35 4.58 0.85 0.62 (-0.23) 18.63 0.01 (-0.23)
Yearly Results 17.52 12.60 4.51 4.92 13.01 8.09 18.71 0.43 8.09

= Standard Deviation of the Returns, r = Correlation of fund returns with market returns, r2 = Co-efficient of Determination
Page | 60
eta ( )p
Sharpe (St)p
Treynor (Tn)p
Jensen ( j)
Fama (FP)
( p)
(r)
(r2)
Half-Yearly Results 0.68 0.08 2.76 (-1.98) Yearly Results 0.65 1.05 20.01 7.75 7.67 12.38 0.985 0.970 (-2.48) 23.90 0.890 0.792
that of the market. This shows that the fund is less risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk but still it is earning 0.85% more than market and 0.62% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama calculated for the fund is positive which shows that the fund manager has beaten the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
than that of the market. This shows that the fund is less risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk and it is earning 3.79% less than market and 1.88% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is less than that of the market which shows that the funds performance is not up to the mark with market. The Jensens Alpha and Fama calculated for the fund is negative which shows that the fund manager has not able to beat the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
of the market. This shows that the fund is less risky and volatile as compared to the Page | 61
market both in terms of Systematic Risk and Total Risk but still it is earning 4.92% more than market and 13.01% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama for the fund is positive which again shows that the fund manager has beaten the market with his stock selection skills. There is a positive perfect correlation between the fund returns and market returns and portfolio is well diversified.
(10) Reliance Equity Fund- It is a diversified open ended equity fund. The date of inception is March 28, 2006 with a NAV of Rs. 10. The Benchmark Index is S & P CNX Nifty. The primary investment objective is to seek to generate capital appreciation and provide long-term growth opportunities by investing in a portfolio constituted of equity and equity related securities of top 100 companies by market capitalization and the secondary objective is to generate consistent returns by investing in debt and money market securities. Its Asset Allocation is 92.51% in Equity, 1.35% in Debt and 6.14% Cash and Cash Equivalent at the end of July 2009. The fund size is Rs. 370.56 crores as on July 31, 2009. Its results are as followsRp (%) Rm (%) Rf (%) Rp - Rm Rp - Rf Rm - Rf
( m)
Sharpe (St)m
Treynor (Tn)m
Quarterly Results 4.14 4.35 4.58 (-0.21) (-0.44) (-0.23) 18.63 0.01 (-0.23)
Yearly Results 12.49 12.60 4.51 (-0.11) 7.98 8.09 18.71 0.43 8.09
Where, Rp = Average Returns for Fund for particular period, Page | 62
Half-Yearly Results 0.83 0.17 5.27 (-0.34) Yearly Results 0.92 0.45 8.67 0.53 0.38 17.59 0.983 0.966 (-0.44) 26.40 0.986 0.972
that of the market. This shows that the fund is less risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk and it is earning 0.21% less than market and 0.44% less than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is less than that of the market which shows that the fund has not performed better than the market. The Jensens Alpha and Fama calculated for the fund is negative which shows that the fund manager has not been able to beat the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
than that of the market. This shows that the fund is less risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk and it is earning 1.3% less than market and 4.37% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is less than that of the market which shows that the funds performance is not up to the mark with market. The Jensens Page | 63
Alpha and Fama calculated for the fund is negative which shows that the fund manager has not able to beat the market with his stock selection skills. There is a high degree of positive correlation between the fund returns and market returns and portfolio is well diversified.
of the market. This shows that the fund is less risky and volatile as compared to the market both in terms of Systematic Risk and Total Risk and it is earning 0.11% less than market and 7.98% more than the Risk-Free rate. Sharpe ratio and Treynor Ratio for the fund is more than that of the market which shows that the fund has performed better than the market. The Jensens Alpha and Fama for the fund is positive which again shows that the fund manager has beaten the market with his stock selection skills. There is a positive perfect correlation between the fund returns and market returns and portfolio is well diversified.
(15) COMPARISON OF FUNDS ON BASIS OF INDEX

(1) Base Index- BSE 200- There are two open-ended equity funds having benchmark index
of BSE 200, Birla Sunlife Equity Fund and Templeton India Equity Fund. The second fund is better than the first one both in terms of systematic risk and unsystematic risk under quarterly and yearly analysis and first fund is better than the second one under half yearly analysis. The first fund has underperformed as compared to the second one both on the Sharpe and Treynor Measure of Performance under quarterly, half yearly and annual analysis. The returns of the first fund are highly correlated to the market as compared to the second fund under quarterly, half yearly and annual analysis. The portfolio of the first fund is highly diversified as compared to second fund under quarterly, half yearly and annual analysis. Page | 64
The Jensen alpha and Fama which are the measures of fund managers performance for the second fund are more than the first fund under quarterly, half yearly and annual analysis which shows that the seconds fund manager has performed better than the first funds manager in terms of stock picking skills.
(2) Base Index- BSE 100- There are two open-ended equity funds having benchmark index
of BSE 100, UTI Equity Fund and SBI Equity Fund. The first fund is better than the second one both in terms of systematic risk and unsystematic risk under quarterly, half-yearly and yearly analysis. The first fund has underperformed as compared to the second one both on the Sharpe and Treynor Measure of Performance under quarterly, half yearly and annual analysis. The returns of the first fund are highly correlated to the market as compared to the second fund under quarterly and yearly analysis and are less correlated to the market as compared to the first one under half yearly analysis. The portfolio of the first fund is highly diversified as compared to second fund under quarterly and yearly analysis and less diversified under the half-yearly analysis.
The Jensen alpha and Fama which are the measures of fund managers performance for the second fund are more than the first fund under quarterly, half yearly and annual analysis which shows that the seconds fund manager has performed better than the first funds manager in terms of stock picking skills.
(3) Base Index- S & P CNX Nifty- There are four open-ended equity funds having
benchmark index of S & P CNX Nifty, LIC Equity Fund, ICICI Discovery Fund, IDFC Imperial Equity Fund and Reliance Equity Fund. The third fund is best both in terms of systematic risk and total risk followed by the fourth fund, second fund and first find under quarterly, half yearly and yearly analysis. The first fund has performed best on the Sharpe Measure under quarterly analysis followed by third second and fourth fund. It is also best on the Sharpe measure under half-yearly analysis followed by fourth, second and third fund. The third fund is Page | 65
best on Sharpe measure under the yearly analysis followed by first, fourth and second fund. The first fund has performed best on the Treynor measure under quarterly analysis followed by third, second and fourth fund. It is also best on the Treynor measure under half-yearly analysis followed by fourth, second and third fund. The second fund is best on Treynor measure under the yearly analysis followed by third, first and fourth fund. The returns of the third fund are highly correlated to the market followed by fourth, second and first fund under quarterly analysis. The returns of the fourth fund are highly correlated to the market followed by second, third and first fund under half yearly analysis. The returns of the third fund are highly correlated to the market followed by fourth, first and second fund under yearly analysis. The portfolio of the third fund is highly diversified followed by fourth, second and first fund under quarterly analysis. The portfolio of the fourth fund is highly diversified followed by second, third and first fund under half yearly analysis. The portfolio of the third fund is highly diversified followed by fourth, first and second fund under yearly analysis.
The Jensen alpha and Fama for the first fund is the highest positive followed by third and second fund under quarterly analysis which shows that fund manager for the first fund has done the best in terms of stock picking skills. The Jensen alpha for the fourth fund is negative under quarterly analysis which shows that the fund manager has not been able to beat the market with the stock selectivity skills. The Jensen alpha and Fama for the first fund is positive under half yearly analysis which shows that the fund manager has beaten the market with his stock picking skills. The Jensen alpha and Fama for the second, third and fourth fund is negative under half-yearly analysis which shows that the fund manager has not been able to beat the market with his stock selection skills. The Jensen alpha for the first fund is highest positive under yearly analysis followed by the third, second and fourth fund which shows that the fund manager for the first fund has performed the best in terms of stock selection skills. The Fama for the first fund is highest positive under yearly followed by third and fourth fund which shows that the fund manager for the first fund has performed the best Page | 66
in terms of stock selection skills whereas the Fama for the second fund is negative which shows that the fund manager has not been able to beat the market with the stock selectivity skills.
(16) OVERALL RANKING OF TEN MUTUAL FUNDS

(a) ON THE BASIS OF JENSEN ALPHA- The Jensen Alpha measures the performance of the Fund Manager in terms of his predictive ability and stock selection skills, considering the systematic risk associated with the fund. On the basis of this measure all the fund can be ranked as followsRANK 1. FUND QUARTERLY Templeton India Equity HALF-YEARLY Templeton India Equity YEARLY Templeton India Equity
Page | 67
Fund 2. 3. LIC Equity Fund Birla Sunlife Equity Fund IDFC Imperial Equity Fund HDFC Equity Fund SBI Equity Fund ICICI Equity Fund Reliance Equity Fund UTI Equity Fund Kotak Emerging Equity Scheme
Fund LIC Equity Fund Birla Sunlife Equity Fund
Fund LIC Equity Fund IDFC Imperial Equity Fund ICICI Equity Fund SBI Equity Fund HDFC Equity Fund Birla Sunlife Equity Fund Reliance Equity Fund UTI Equity Fund Kotak Emerging Equity Scheme
4. 5. 6. 7. 8. 9.
SBI Equity Fund HDFC Equity Fund Reliance Equity Fund UTI Equity Fund ICICI Equity Fund IDFC Imperial Equity Fund Kotak Emerging Equity Scheme
10.
It can be seen from the above table in terms of the performance of fund manager in terms of his predictive ability and stock selection skills, considering the systematic risk associated with the fund, top performer is Templeton India Equity Fund in quarterly, half yearly and yearly analysis. The Kotak Emerging Equity Scheme is at the lowest.
Page | 68
(b) ON THE BASIS OF FAMA- The Fama Measures the performance of fund manager in terms of his predictive ability and stock selection skills considering the total risk associated with the fund. On the basis of this measure the funds can be ranked as follows-
It can be seen from the above table in terms of the performance of fund manager in terms of his predictive ability and stock selection skills, considering the total risk associated with the FUND QUARTERLY Templeton India Equity Fund LIC Equity Fund Birla Sunlife Equity Fund IDFC Imperial Equity Fund HDFC Equity Fund ICICI Equity Fund Reliance Equity Fund SBI Equity Fund UTI Equity Fund Kotak Emerging Equity Scheme HALF-YEARLY Templeton India Equity Fund LIC Equity Fund Birla Sunlife Equity Fund YEARLY Templeton India Equity Fund LIC Equity Fund IDFC Imperial Equity Fund SBI Equity Fund HDFC Equity fund Birla Sunlife Equity Fund Reliance Equity fund UTI Equity Fund ICICI Equity fund Kotak Emerging Equity Scheme
RANK
1. 2. 3.
4. 5. 6. 7. 8. 9.
SBI Equity Fund HDFC Equity Fund Reliance Equity Fund ICICI Equity Fund UTI Equity Fund IDFC Imperial Equity Fund Kotak Emerging Equity Scheme
10.
fund, top performer is Templeton India Equity Fund in quarterly, half yearly and yearly analysis. The Kotak Emerging Equity Scheme is at the lowest.
Page | 69
(c) ON THE BASIS OF TOTAL RISK- The Total Risk is measured with the help of Standard Deviation. On this basis funds can be ranked as followsRANK FUND QUARTERLY LIC Equity Fund Templeton India Equity Fund SBI Equity Fund Kotak Emerging Equity Scheme Birla Sunlife Equity Fund ICICI Equity Fund HDFC Equity Fund Reliance Equity Fund IDFC Imperial Equity Fund UTI Equity Fund HALF-YEARLY LIC Equity Fund Templeton India Equity Fund Kotak Emerging Equity Scheme SBI Equity Fund Birla Sunlife Equity Fund ICICI Equity Fund HDFC Equity Fund Reliance Equity Fund IDFC Imperial Equity Fund UTI Equity Fund YEARLY Templeton India Equity Fund LIC Equity Fund
1.
2.
3.
Birla Sunlife Equity Fund
4. 5. 6. 7. 8. 9.
HDFC Equity fund ICICI Equity Fund SBI Equity Fund Reliance Equity fund UTI Equity Fund IDFC Imperial Equity Fund Kotak Emerging Equity Scheme
10.
It can be seen from the above table in terms of the performance of fund manager in terms of his predictive ability and stock selection skills, considering the total risk associated with the fund, top performer is Templeton India Equity Fund in quarterly, half yearly and yearly analysis. The Kotak Emerging Equity Scheme is at the lowest.
Page | 70
(d) ON THE BASIS OF PORTFOLIO DIVERSIFICATTION- This is measured with the help of Coefficient of Determination. On this basis the funds can be ranked as followsRANK FUND QUARTERLY IDFC Imperial Equity Fund Birla Sunlife Equity Fund UTI Equity Fund HDFC Equity Fund Reliance Equity Fund Kotak Emerging Equity Scheme ICICI Equity Fund SBI Equity Fund LIC Equity Fund Templeton India Equity Fund HALF-YEARLY SBI Equity Fund HDFC Equity Fund Birla Sunlife Equity Fund Reliance Equity Fund ICICI Equity Fund Kotak Emerging Equity Scheme IDFC Equity Fund LIC Equity Fund Templeton India Equity Fund UTI Equity Fund YEARLY Kotak Emerging Equity Scheme Birla Sunlife Equity Fund UTI Equity Fund SBI Equity fund HDFC Equity Fund IDFC Imperial Equity Fund Reliance Equity fund LIC Equity Fund ICICI Equity Fund Templeton India Equity Fund
1. 2. 3. 4. 5. 6. 7. 8. 9.
10.
It can be seen from the above table in terms of the diversification of the portfolio of the fund top performer is IDFC Imperial Equity Fund in quarterly ranking; SBI Equity Fund is the top performer in half yearly ranking, and Kotak Emerging Equity Scheme in yearly ranking. The
Page | 71
Templeton India Equity Fund is the lowest performer in quarterly and annual analysis; UTI Equity Fund is the lowest performer in half yearly analysis.
(17) FINDINGS OF THE STUDY- The study conducted during May 2009 to July 2009 reveals the following1. Savings Instrument Preference among Individual Investors- The study reveals that
the most preferred investment is Fixed Deposits as it is one of the few investments which enable an average investor to get reasonable and regular returns along with safety of capital. The Mutual Funds are on the second and Life Insurance is on the third among 6 choices.
2. Objective of Investment in Mutual Funds- The investors first look for safety in mutual
funds, followed by growth, returns and Tax Benefits.

3. Type of Mutual Fund- More than 67 % of the investors first prefer open ended funds,
less than 23 % of the investors favor close-ended equity funds and only 10 % of the investors favor Interval funds.
4. Scheme Preference of investors- Out of the 60 respondents 27 have invested in Equity
Schemes (19 in growth schemes and 8 in dividend schemes), 17 in debt schemes, 10 in balanced schemes and only 6 in sector specific schemes.
5. Preferable Route to Mutual Fund Investing Among Individual Investors- The study
reveals that the scheme decision is made by the respondents on their own and other factors influencing their decisions are followed by advisors, commercials and the least by suggestions of friends and family.
6. Preferred Mode of Communication for receiving Updates- The factors are ranked on
the basis of the weighted average. The survey shows that 21 persons used personal visit Page | 72
to distribution centers to know about the updates, 16 wanted to use internet to know about the same, 14 preferred to call directly to the office to know about the performance of mutual funds and rest 9 preferred nothing to know about the updates.
7. Importance of Scheme Qualities- The weighted average is calculated by assigning
weights from 1 to 5 in the order of importance i.e. 5 to Rank 1, 4 to rank 2, 3 to rank 3, 2 to rank 4 and 1 to rank 5. The study reveals that the investors consider the safety of capital as the most important factor in the selection of their scheme followed by schemes performance record and tax benefits and they consider the reputation of the portfolio managers as the least important factor in the selection of fund.
8. Importance of AMC Qualities- The investors consider the reputation of the AMC as the most important factor affecting their choice of the mutual funds followed by range of different schemes, companys expertise in managing money, ownership of the company and they give least importance to the efficiency of research wing of the company. 9. Importance of Investor Services- The investors give more importance to daily
disclosure of NAV by the companies followed by disclosure of facts relating to mutual fund investments and they give least importance to disclosure of deviation of the investments from the expected pattern which shows that investors focus on the performance of funds rather than the pattern of investments.
10. Performance Evaluation of Mutual Funds- It is evident from the above analysis that
fund managers were not successful in satisfying the investors with their performance. Under quarterly analysis only 7 funds out of the 10 funds selected were able to earn more than market returns and only 6 funds were able to earn more than the risk free rate. Under half yearly analysis only 4 funds out of the 10 funds selected were able to earn more than market returns and only 9 funds were able to earn more than the risk free rate. Under yearly analysis only 6 funds out of the 10 funds selected were able to earn more than market returns and only 9 funds were able to earn more than the risk free rate.
Page | 73
(18) SUGGESTIONS- The following suggestions can be given based on the study1. Since the investors are highly focused towards liquidity in the schemes more and more open-ended schemes should be brought into the market by the companies. 2. The investors are also having more interest in Equity schemes, so the companies should pay more focus on marketing of Equity schemes.
3. The investors prefer Personal visit to know about the updates regarding their Mutual
Funds, so the companies should focus on opening up of service centers in the country to provide the investors knowledge about the mutual funds.
4. The investors give priority to self evaluation in scheme selection in spite of their less
knowledge about the market so there is a need on the part of the middlemen to win the confidence of the investors. This will help the middlemen in getting more number of customers in long term.
5. Out of the total audience of 200 only 60 have invested in Mutual Funds. Thos shows that
there may be less knowledge of mutual funds among the investors regarding the mutual funds or there may be negative perception regarding mutual funds in the minds of investors. The AMCs and Sponsors etc. should pay focus on the education of the investors and try to remove the negativity in the minds of the investors about the mutual funds. 6. When it comes to the qualities of the fund/scheme the investors prefer safety of capital invested in mutual funds followed by funds performance record and tax benefits. So the Page | 74
companies should focus on safety of capital i.e. the company should design balanced schemes in order to protect the capital invested and the funds should offer tax benefits. The fund managers should be able to perform well in order to build up the image of the funds. 7. The qualities of an AMC also affect the scheme selection of investors. The reputation of the AMCs is highly important factor for the investors affecting their selection of a particular AMC followed by range of schemes and their expertise in managing money. Therefore the companies should focus on building up of their brand in the market in order to gain more customers. This can be done by improving the performance of the funds in the market and also by offering wide range of schemes in the market to target different group of investors.
8. The investor services are also important for the investors in their selection of a particular
fund/AMC. The daily NAV disclosure is the most important factor which affects the choice of the investors followed by disclosure of objectives of investment, method and periodicity of valuation and Disclosure of method of sale and repurchase in offer document. So the AMCs should be as transparent as possible and follow the norms stipulated by SEBI and AMFI in order to gain the confidence of investors and thereby building up the image in tn the market.
Page | 75
Bibliography and References

1. Customer Orientation in Designing Mutual Fund Products - An Analytical
Approach to Indian Market Preferences by Dr Tapan K Panda and Dr Nalini Prava Tripathy.
2. An Empirical Study on Factors Influencing the Mutual Fund/Scheme Selection by
Retail Investors by - Ms. T.R. Rajeswari and Prof. V.E. Rama Moorthy.
3. Performance Evaluation of Indian mutual Funds by Dr. S. Narayan Rao. 4. Analysis of components of investment performance an empirical study of mutual
funds in India by Dr. S. Anand & Dr. V Murugaiah.

5. Whats the right investment mix for you? Business India, August 2, 2004. 6. Investor Home Psychology and Behavior finance. 7. Security Analysis and Portfolio M anagement, by Fisher and Jordan. 8. Mutualfundsindia.com 9. Amfiindia.com 10. Investopedia.com 11. Review of M arketing research Volume-5 by Naresh Malhotra.
Page | 76
Annexure - I
Questionnaire for Study
Page | 77
NAME ______________________________ E-MAIL ___________________________________________ Please tick markI.
AGE: Below 30
[ ]
30 40 Female
[ ] [ ]
40 50
[ ]
50 and above
[ ]
II. GENDER: III. INCOME:
Male [ ] < 200,000 [ ]
200,000-300,000 [ ] Below graduate [ ] Married [ ]
300.000-400,000 [ ] Professional [ ] [ ] Graduate [ ] Unmarried
400,000 > [ ] Retired [ ]
IV. OCCUPATION: V. QUALIFICATION:
Salaried [ ]
Businessman [ ]
Above Graduate [ ]
VI. MARITAL STATUS:
Please fill inSAVINGS = Rs ____________ / Year What % of your savings are invested for 5 years and above __________________ (approx.) What % of your savings are invested for 3-5 years__________________ (approx.) What % of your savings are invested for 1-3 years___________________ (approx) What % of your savings are invested for less than one year________________ (approx) Please rank the choices according to your preferences as indicated in exampleGive Rank 1 to the most preferred option. Give Rank 2 to the next best option and so on. Page | 78
EXAMPLE: Which season do you like most? Rainy [3] Winter [1] Summer [2] [ ] Postal Savings 1. Which of the following do you prefer for investment? [ ] Mutual funds [ ] Stock Market [ ] Fixed Deposits [ ] Others [ ] Returns [ ] Growth [ ] Tax Benefits [ ] Life Insurance
2. What were the most important factors while selecting a mutual fund scheme? [ ] Liquidity [ ] Risk factor [ ] Open-Ended Funds [ ] Equity [ ] Friends/family 6. 1. Which funds do you prefer for investment? [ ] Closed-Ended Funds [ ] Balanced [ ] Advisors [ ] Interval Funds [ ] Sector Specific [ ] Self-evaluation 4. Which schemes you are interested to invest in? [ ] Debt [ ] Commercials 5. Which environmental forces influenced you the most to invest in mutual fund? Which mode of communication do you prefer most for receiving updates and [ ] Telephone [ ] Internet/E-mail [ ] Direct Mail [ ] Self-Visit
performance of your scheme/portfolio of mutual fund investment?
GIVE MARKS OUT OF 5 TO EACH OF THE ATTRIBUTES FOR THEIR IMPORTANCE WHILE MAKING A INVESTMENT DECISION. Give: 1 for Highly Important Factor Give: 2 for Important Give: 3 for Moderately Important / Unmarked Give: 4 for Less Important Give: 5 for Not at all Important. Please Refer ExampleGrade Funds Popularity 4
SCHEMES QUALITIES
1. Funds/Schemes performance record
Page | 79
2. Funds/Schemes brand name 3. Schemes portfolio constituents 4. Reputation of scheme(s), portfolio manager(s) 5. Investment/Withdrawal facilities 6. Rating by a rating agency 7. Innovativeness of the Scheme 8. Products with tax benefits 9. Entry and Exit load 10. Safety of capital
AMC QUALITIES
1. Private Sector / Public Sector ownership 2. Reputation of the company 3. Range of schemes with different qualities 4. Efficiency of research wing 5. Companys expertise in managing money
INVESTOR SERVICES
1. Disclosure of investment objectives, method and Periodicity of valuation in advertisement
Page | 80
2. Disclosure of method periodicity of schemes sales and
repurchase in offer document

3. Announcement of NAV on every trading day 4. Disclosure of deviation of the investments from
the expected

pattern
5. Disclosure of investments at regular intervals
6. Mutual Fund Investors grievance redressal machinery
Page | 81
Annexure II
Name, NAV History, Fund Returns, Index History and Index Returns of Selected Schemes
(1) BIRLA SUNLIFE EQUITY FUND
Page | 82
Year Month 2006 Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun
NAV 55.64 67.39 76.87 64.09 76.37 77.44 98.95 68.8 57.54 54.31 42.93 39.85 64.39 Sum ( ) Average
QUARTERLY ANALY SIS Fund Market Market Div Returns (Y) Index Returns (X) 1271.02 1495.48 1655.74 1556.72 1804.81 2118.86 2656.52 1932.41 1644.18 1555.7 1156.59 1140.43 1767.09
X^2
XY
2007
10 10
2008
2009
21.117901 14.067369 -3.616495 19.160555 14.495221 27.776343 -30.46993 -16.36628 -5.613486 -20.95378 -7.17447 61.580928
17.659832 10.716292 -5.980408 15.936713 17.400724 25.374966 -27.25784 -14.91557 -5.381406 -25.65469 -1.397211 54.949449
311.87 114.839 35.7653 253.979 302.785 643.889 742.99 222.474 28.9595 658.163 1.9522 3019.44 3776.21
372.9386 150.75 21.62812 305.3563 252.2273 704.8238 830.5446 244.1124 30.20845 537.5628 10.02425 3383.838 4547.601
20
74.003868 61.450849 11.385211 5.1209041 HALF Y EARLY ANALY SIS 1271.02 1655.74 1804.81 2656.52 1644.18 1156.59 1767.09
2006 2007 2008 2009
Jun Dec Jun Dec Jun Dec Jun
55.64 76.87 76.37 98.95 57.54 42.93 64.39 Sum ( ) Average
10 10
38.156003 12.358527 42.660731 -41.84942 -25.39103 49.988353
30.268603 9.0032251 47.191117 -38.10775 -29.65551 52.784479
916.188 81.0581 2227 1452.2 879.449 2786.2 8342.1
1154.929 111.2666 2013.208 1594.787 752.9841 2638.609 8265.783
20
75.923163 71.484162 12.65386 Y EARLY ANALY SIS 1271.02 1804.81 1644.18 1767.09
2006 2007 2008 2009
Jun Jun Jun Jun
55.64 76.37 57.54 64.39 Sum ( ) Average
10 10
55.23005 -11.56213 11.904762 55.572681 18.524227
41.996979 -8.900106 7.4754589 40.572332 13.524111
1763.75 79.2119 55.8825 1898.84
2319.495 102.9042 88.99356 2511.393
20
Page | 83
(2) TEMPLETON INDIA EQUITY INCOME FUND
Page | 84
z
QUARTERLYANALY SIS Year Month 2006 Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun NAV 9.52 10.56 11.82 11.87 12.72 14.71 16.75 13.14 12.1 10.39 7.59 7.83 11.59 Sum( ) Average Div. Fund Returns (Y) Market Index 1271.02 1495.48 1655.74 1556.72 1804.81 2118.86 2656.52 1932.41 1644.18 1555.7 1156.59 1140.43 1767.09 Market Returns (X) X^2 XY
2007
7 7 7
2008
2009
10.92437 11.931818 0.4230118 66.133109 15.644654 61.454793 -21.55224 45.357686 -14.13223 -26.94899 3.1620553 48.020434
17.659832 10.716292 -5.980408 15.936713 17.400724 25.374966 -27.25784 -14.91557 -5.381406 -25.65469 -1.397211 54.949449
311.87 114.839 35.7653 253.979 302.785 643.889 742.99 222.474 28.9595 658.163 1.9522 3019.44 6337.11
192.9225 127.8648 -2.529783 1053.944 272.2283 1559.413 587.4675 -676.5358 76.05127 691.3679 -4.418058 2638.696 6516.473
21
200.41847 61.450849 16.701539 5.1209041 HALF Y EARLYANALY SIS 1271.02 1655.74 1804.81 2656.52 1644.18 1156.59 1767.09
2006 2007 2008 2009
9.52 11.82 12.72 16.75 12.1 7.59 11.59 Sum( ) Average
7 7 7
24.159664 66.835871 86.713836 14.029851 -37.27273 52.700922
30.268603 9.0032251 47.191117 -38.10775 -29.65551 52.784479
916.188 81.0581 2227 1452.2 879.449 2786.2 8342.1
731.2793 601.7384 4092.123 -534.646 1105.342 2781.791 8777.627
21
207.16742 71.484162 34.527903 11.914027 Y EARLYANALY SIS 1271.02 1804.81 1644.18 1767.09
2006 2007 2008 2009
Jun Jun Jun Jun
9.52 12.72 12.1 11.59 Sum( ) Average
7 14
107.14286 105.18868 -4.214876 208.11666 69.37222
41.996979 -8.900106 7.4754589 40.572332 13.524111
1763.75 79.2119 55.8825 1898.84
4499.676 -936.1904 -31.50813 3563.486
21
Page | 85
(3) UTI EQUITY FUND
Page | 86
NAV 26.52 28.48 30.14 28.4 32.36 36.9 44.3 35.2 30.91 30.29 24.17 23.92 31.78 Sum( ) Average
QUARTERLYANALY SIS Fund Market Market Div Returns (Y) Index Returns (X) 5382.11 6328.33 6982.56 6587.21 7605.37 8967.41 11154.4 8232.82 7029.74 6691.57 4988.04 4942.51 7571.49
X^2
XY
2007
2008
2009
1 3
14.932127 5.8286517 -5.773059 13.943662 14.029666 20.054201 -20.54176 -12.1875 -2.005823 -20.20469 -1.03434 32.859532
17.580837 10.338114 -5.661964 15.45662 17.908925 24.387978 -26.19204 -14.61322 -4.810562 -25.45785 -0.912783 53.191192
309.086 106.877 32.0578 238.907 320.73 594.773 686.023 213.546 23.1415 648.102 0.83317 2829.3 6003.38
262.5193 60.25727 32.68685 215.5219 251.2562 489.0814 538.0307 178.0986 9.649138 514.368 0.944128 1747.838 4300.251
2006 2007 2008 2009
26.52 30.14 32.36 44.3 30.91 24.17 31.78 Sum( ) Average
1 3
21.191554 6.6357001 -0.679852 -27.44921 3.9792947 35.622673
29.736479 8.919508 46.664528 -36.97776 -29.04375 51.792889 71.091894 11.848649
884.258 79.5576 2177.58 1367.35 843.539 2682.5 8034.79
630.1622 59.18718 -31.72496 1015.01 -115.5736 1845.001 3402.062
39.300159 6.5500266 Y EARLYANALY SIS 5382.11 7605.37 7029.74 7571.49
2006 2007 2008 2009
Jun Jun Jun Jun
26.52 32.36 30.91 31.78 Sum( ) Average
2 1 3
29.562594 -4.480841 6.0498221 31.131576 10.377192
41.308334 -7.568731 7.7065439 41.446147 13.815382
1706.38 57.2857 59.3908 1823.06
1221.182 33.91428 46.62322 1301.719
Page | 87
(4) SBI EQUITY FUND
Page | 88
NAV 25.51 29.02 27.57 26.56 30.58 30.06 41.52 29.06 24.34 23.36 18.16 18.03 27.48 Sum( ) Average
QUARTERLYANALY SIS Fund Market Market Div Returns (Y) Index Returns (X) 5382.11 6328.33 6982.56 6587.21 7605.37 8967.41 11154.4 8232.82 7029.74 6691.57 4988.04 4942.51 7571.49
X^2
XY
2007
2008
2009
13.75931 12.232943 -3.663402 15.135542 -1.700458 54.757152 -30.00963 -16.24226 -4.026294 -22.26027 -0.715859 52.412646
17.580837 10.338114 -5.661964 15.45662 17.908925 24.387978 -26.19204 -14.61322 -4.810562 -25.45785 -0.912783 53.191192
309.086 106.877 32.0578 238.907 320.73 594.773 686.023 213.546 23.1415 648.102 0.83317 2829.3 6003.38
241.9002 126.4656 20.74205 233.9443 -30.45337 1335.416 786.0136 237.3517 19.36874 566.6988 0.653424 2787.891 6325.992
10
69.679414 61.215244 5.8066179 5.1012703 HALF Y EARLYANALY SIS 5382.11 6982.56 7605.37 11154.4 7029.74 4988.04 7571.49
2006 2007 2008 2009
25.51 27.57 30.58 41.52 24.34 18.16 27.48 Sum( ) Average
5 5
27.675421 10.917664 52.125572 -41.37765 -25.3903 51.321586
29.736479 8.919508 46.664528 -36.97776 -29.04375 51.792889
884.258 79.5576 2177.58 1367.35 843.539 2682.5 8034.79
822.9696 97.38019 2432.415 1530.053 737.4296 2658.093 8278.341
10
75.27229 71.091894 12.545382 11.848649 Y EARLYANALY SIS 5382.11 7605.37 7029.74 7571.49
2006 2007 2008 2009
Jun Jun Jun Jun
25.51 30.58 24.34 27.48 Sum( ) Average
5 5
39.474716 -4.054938 12.900575 48.320353 16.106784
41.308334 -7.568731 7.7065439 41.446147 13.815382
1706.38 57.2857 59.3908 1823.06
1630.635 30.69073 99.41885 1760.744
Page | 89
(5) KOTAK EMERGING EQUITY SCHEME
Page | 90
NAV ------10.01 11.65 12.43 17.02 11.1 8.61 7.75 5.92 5.49 7.65 Sum( ) Average
QUARTERLYANALY SIS Fund Market Market Div Returns (Y) Index Returns (X) --------16.383616 6.695279 36.92679 -34.78261 -22.43243 -9.988386 -23.6129 -7.263514 39.344262 ------5384.12 6527.03 7422.43 9789.49 6427.82 5386.48 4798.29 3235.05 2956.23 5076.34 --------21.227424 13.718337 31.890634 -34.33958 -16.20052 -10.91975 -32.57911 -8.618723 71.71668
X^2 --------450.604 188.193 1017.01 1179.21 262.457 119.241 1061.4 74.2824 5143.28 9495.68
XY --------347.782 91.8481 1177.619 1194.42 363.417 109.0706 769.2873 62.60221 2821.64 6937.686
2007
2008
2009
0 0 0 0 0 0 0 0 0 0 0 0 0
1.2701042 35.895401 0.1411227 3.9883779 HALF Y EARLYANALY SIS ------46.094421 -49.41246 -31.24274 29.222973 ----6527.03 9789.49 5386.48 3235.05 5076.34 ------49.983836 -44.97691 -39.9413 56.916895 21.982525 5.4956312
2006 2007 2008 2009
----11.65 17.02 8.61 5.92 7.65 Sum( ) Average
0 0 0 0 0 0 0
------2498.38 2022.92 1595.31 3239.53 9356.15
------2303.976 2222.42 1247.876 1663.281 7437.552
-5.337803 -1.334451 Y EARLY ANALY SIS -----26.09442 -11.14983 -37.24425 -18.62212 --6527.03 5386.48 5076.34
2006 2007 2008 2009
Jun Jun Jun Jun
--11.65 8.61 7.65 Sum( ) Average
0 0 0 0
-----17.47426 -5.757749 -23.23201 -11.616
----305.35 33.1517 338.501
----455.9806 64.1979 520.1785
Page | 91
(6) HDFC EQUITY FUND
Page | 92
NAV 33.98 39.95 43.4 37.42 43.38 47.98 58.61 38.25 33.03 33.62 25.92 21.85 34.71 Sum ( ) Average
QUARTERLY ANALYSIS Fund Market Market Div Returns (Y) Index Returns (X) 2562.5 2988.25 3295.05 3145.35 3625.75 4188.55 5354.7 3825.85 3203.35 3058.6 2295.75 2294.85 3469.7
X^2
XY
2007
2008
5.5
2009
17.569158 8.6357947 -2.258065 15.927312 10.603965 22.155065 -25.35404 -13.64706 1.7862549 -22.90303 -4.128086 58.855835
16.614634 10.266879 -4.543178 15.27334 15.522306 27.841377 -28.55155 -16.27089 -4.518707 -24.94115 -0.039203 51.195067
276.046 105.409 20.6405 233.275 240.942 775.142 815.191 264.742 20.4187 622.061 0.00154 2620.93 5994.8
291.9051 88.66266 10.25879 243.2632 164.598 616.8275 723.8971 222.0498 -8.071563 571.228 0.161833 3013.128 5937.909
8.5
67.243106 57.848918 5.6035921 4.8207432 HALF YEARLY ANALYSIS 2562.5 3295.05 3625.75 5354.7 3203.35 2295.75 3469.7
2006 2007 2008 2009
33.98 43.4 43.38 58.61 33.03 25.92 34.71 Sum ( ) Average
5.5 3 8.5
27.72219 11.474654 35.108345 -34.26037 -21.52589 45.486111
28.587317 10.036267 47.685306 -40.17685 -28.33284 51.135794
817.235 100.727 2273.89 1614.18 802.75 2614.87 8223.65
792.503 115.1627 1674.152 1376.474 609.8895 2325.968 6894.149
64.005049 68.934991 10.667508 11.489165 YEARLY ANALYSIS 2562.5 3625.75 3203.35 3469.7
2006 2007 2008 2009
Jun Jun Jun Jun
33.98 43.38 33.03 34.71 Sum ( ) Average
5.5 3 8.5
42.377869 -11.18027 14.168937 45.366539 15.12218
41.492683 1721.64 -11.65 135.723 8.314733 69.1348 38.157412 12.719137 1926.5
1758.371 130.2502 117.8109 2006.433
Page | 93
(7) LIC EQUITY FUND
Page | 94
NAV 11.13 18.54 21.27 19.17 21.39 25.16 34.71 22.45 19.08 19.23 14.83 14.45 21.62 Sum ( ) Average
X^2
XY
2.5
2007
2008
2009
66.576819 28.209277 -9.873061 11.580595 17.625058 57.829889 -35.32123 -15.01114 0.7861635 -22.88092 -2.562374 49.619377
14.711336 10.533943 -3.651926 12.998652 16.280712 22.249993 -22.87329 -14.6573 -2.953806 -24.53458 2.0884376 42.044721
216.423 110.964 13.3366 168.965 265.062 495.062 523.188 214.837 8.72497 601.946 4.36157 1767.76 4390.63
979.4339 297.1549 36.05569 150.5321 286.9485 1286.715 807.9129 220.0228 -2.322174 561.3737 -5.351357 2086.233 6704.708
7.5
2006 2007 2008 2009
11.13 21.27 21.39 34.71 19.08 14.83 21.62 Sum ( ) Average
2.5 5
113.56694 0.5641749 85.647499 -45.03025 -22.27463 45.78557
26.794962 8.872025 42.153162 -34.17799 -26.76368 45.011236
717.97 78.7128 1776.89 1168.13 716.295 2026.01 6484.01
3043.022 5.005374 3610.313 1539.043 596.1512 2060.865 10854.4
7.5
178.2593 61.889714 29.709883 10.314952 Y EARLY ANALY SIS 3128.2 4318.3 4040.55 4291.1
2006 2007 2008 2009
Jun Jun Jun Jun
11.13 21.39 19.08 21.62 Sum ( ) Average
2.5 5
114.6451 12.57597 13.312369 140.53344 46.844481
38.044243 -6.431929 6.2008885 37.813202 12.604401
1447.36 41.3697 38.451 1527.19
4361.586 -80.88775 82.54852 4363.247
7.5
Page | 95
(8) ICICI DISCOVERY FUND
Page | 96
NAV 16.76 20.14 18.76 16.8 17.88 18.44 22.19 15.4 12.91 11.83 9.31 8.98 13.52 Sum ( ) Average
QUARTERLY ANALY SIS Fund Market Market Returns (Y) Index Returns (X) 3128.2 3588.4 3966.4 3821.55 4318.3 5021.35 6138.6 4734.5 4040.55 3921.2 2959.15 3020.95 4291.1
X^2
XY
2 2 1.2 1.2
2007
2008
2009
1.2 7.6
20.167064 3.0784508 -10.44776 18.333333 3.1319911 26.843818 -30.59937 -8.376623 -8.365608 -21.30178 -3.544576 63.919822
14.711336 10.533943 -3.651926 12.998652 16.280712 22.249993 -22.87329 -14.6573 -2.953806 -24.53458 2.0884376 42.044721
216.423 110.964 13.3366 168.965 265.062 495.062 523.188 214.837 8.72497 601.946 4.36157 1767.76 4390.63
296.6845 32.42822 38.15445 238.3086 50.99105 597.2747 699.9084 122.7787 24.71038 522.6301 -7.402625 2687.491 5303.958
2006 2007 2008 2009
16.76 18.76 17.88 22.19 12.91 9.31 13.52 Sum ( ) Average
2 2 1.2 1.2 1.2 7.6
23.866348 5.9701493 30.816555 -36.4128 -27.88536 58.10956
26.794962 8.872025 42.153162 -34.17799 -26.76368 45.011236
717.97 78.7128 1776.89 1168.13 716.295 2026.01 6484.01
639.4979 52.96731 1299.015 1244.516 746.3149 2615.583 6597.895
54.464453 61.889714 9.0774089 10.314952 Y EARLY ANALY SIS 3128.2 4318.3 4040.55 4291.1
2006 2007 2008 2009
Jun Jun Jun Jun
16.76 17.88 12.91 13.52 Sum ( ) Average
4 2.4 1.2 7.6
30.548926 -14.3736 14.020139 30.195464 10.065155
38.044243 -6.431929 6.2008885 37.813202 12.604401
1447.36 41.3697 38.451 1527.19
1162.211 92.44999 86.93732 1341.598
Page | 97
(9) IDFC IMPERIAL EQUITY FUND
Page | 98
NAV 9.58 11.02 11.89 11.4 12.77 15.16 18.29 14.64 11.66 11.72 9.65 9.88 12.35 Sum ( ) Average
X^2
XY
2007
2008
1.5
2009
1.2 2.7
15.031315 7.8947368 -4.12111 12.017544 18.71574 20.646438 -19.95626 -10.10929 0.5145798 -17.66212 2.3834197 37.145749
14.711336 10.533943 -3.651926 12.998652 16.280712 22.249993 -22.87329 -14.6573 -2.953806 -24.53458 2.0884376 42.044721
216.423 110.964 13.3366 168.965 265.062 495.062 523.188 214.837 8.72497 601.946 4.36157 1767.76 4390.63
221.1307 83.16271 15.04999 156.2119 304.7056 459.3831 456.4654 148.1749 -1.519969 433.3326 4.977623 1561.783 3842.857
2006 2007 2008 2009
9.58 11.89 12.77 18.29 11.66 9.65 12.35 Sum ( ) Average
1.5 1.2 2.7
24.112735 7.4011775 43.226312 -28.04811 -17.23842 9.7165992
26.794962 8.872025 42.153162 -34.17799 -26.76368 45.011236
717.97 78.7128 1776.89 1168.13 716.295 2026.01 6484.01
646.0998 65.66343 1822.126 958.6281 461.3637 437.3561 4391.237
39.170288 61.889714 6.5283813 10.314952 Y EARLY ANALY SIS 3128.2 4318.3 4040.55 4291.1
2006 2007 2008 2009
Jun Jun Jun Jun
9.58 12.77 11.66 12.35 Sum ( ) Average
1.5 1.2 2.7
33.298539 3.0540329 16.209262 52.561834 17.520611
38.044243 -6.431929 6.2008885 37.813202 12.604401
1447.36 41.3697 38.451 1527.19
1266.818 -19.64332 100.5118 1347.686
Page | 99
(10) RELIANCE EQUITY FUND
Page | 100
NAV 9.46 10.75 11.69 11.04 12.75 14.47 17.77 13.28 11.7 11.74 9.8 9.29 12.98 Sum ( ) Average
X^2
XY
2007
2008
2009
0 0 0 0 0 0 0 0 0 0 0 0 0
13.636364 8.744186 -5.560308 15.48913 13.490196 22.805805 -25.2673 -11.89759 0.3418803 -16.5247 -5.204082 39.720129
14.711336 10.533943 -3.651926 12.998652 16.280712 22.249993 -22.87329 -14.6573 -2.953806 -24.53458 2.0884376 42.044721
216.423 110.964 13.3366 168.965 265.062 495.062 523.188 214.837 8.72497 601.946 4.36157 1767.76 4390.63
200.6091 92.11075 20.30583 201.3378 219.63 507.429 577.9465 174.3866 -1.009848 405.4266 -10.8684 1670.022 4057.326
2006 2007 2008 2009
9.46 11.69 12.75 17.77 11.7 9.8 12.98 Sum ( ) Average
0 0 0 0 0 0 0
23.572939 9.0675791 39.372549 -34.15869 -16.23932 32.44898
26.794962 8.872025 42.153162 -34.17799 -26.76368 45.011236
717.97 78.7128 1776.89 1168.13 716.295 2026.01 6484.01
631.636 80.44779 1659.677 1167.475 434.6239 1460.569 5434.429
54.064036 61.889714 9.0106726 10.314952 Y EARLYANALY SIS 3128.2 4318.3 4040.55 4291.1
2006 2007 2008 2009
Jun Jun Jun Jun
9.46 12.75 11.7 12.98 Sum ( ) Average
0 0 0 0
34.778013 -8.235294 10.940171 37.48289 12.494297
38.044243 -6.431929 6.2008885 37.813202 12.604401
1447.36 41.3697 38.451 1527.19
1323.103 52.96883 67.83878 1443.911
Page | 101
Thank You
Page | 102
Page | 103

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A Study on

School of Management studies University of Hyderabad

Master of Business Administration

Under the Guidance of

Dr. Chetan Srivastava Lecturer, School of Management Studies University of Hyderabad

Ankit Singh 08MBMA12

Ankit Singh 08MBMA12

(1) Executive Summary

(2) Table of Contents Certificate Declaration Acknowledgements

12. Research Methodology

3. Comparison of Funds on the basis of Index

57-59 60 61 62 63 64-65 66-67 68 69-72

4. Overall ranking of Mutual Funds

Business Development Executives Page | 10

(7) OBJECTIVES OF STUDY

Management as on June 30, 2009 are evaluated for their performance.

(1) (Beta) Co-efficient (A Measure of Systematic Risk)

(2) Sharpes Measure of Performance

(4) Jensens Measure of Performance

Where, X = Market or Index Return, and, Y = Return on Fund.

It is calculated using the following formulaSt= rt- r* t

Where, Tn = Treynors Index r* = riskless rate of interest (T - bill)

= Beta coefficient of portfolio n

rn = average return on portfolio n

Where, Rjt= Average return on portfolio j for a period t

Where, FP = Famas Measure for Portfolio,

Where, = Standard Deviation, X = Values of the series,

Where, Rf = Returns on Mutual Fund.

Where, Rm= Return on Market Index,

(12) RESEARCH METHODOLOGY

Investor Services1. Disclosure of investment objectives, method and Periodicity of valuation in

RESPONSES DURING THE SURVEY

INFLUENCE OF ENVIRONMENTAL FACTORS

Self Evaluation Advisors Commercials Friends/Family

MODE OF COMMUNICATION FOR RECEIVING UPDATES AND PERFORMANCE

Personal Communication Internet / e-mail Telephone No Preference

2. Savings and Investments-

Below 30 30-40 40-50 50 and above

A. RANKING OF AMC QUALITIES-

Source of Variation Between Groups Within Groups Total

SS 0.64 1279.2 1279.84

F P-value 0.0025 0.99999

B. RANKING OF SCHEME QUALITIES SCHEME QUALITIES NO OF RANK

Entry and Exit load Investment/Withdrawal facilities

Seven Eight Nine Ten

Source of Variation B een G etw roups W G ps ithin rou T otal

SS 2036.68 1536.3 3572.98

P-value 7.8E -08

C. RANKING OF INVESTOR SERVICES-

RANK (Based on Weighted Average)

Announcement of NAV on every trading day

Disclosure of investment Page | 39

periodicity of schemes sales and repurchase in offer document

Source of Variation Between Groups Within Groups Total

SS 0.166667 3202.8 3202.967

F P-value F crit 0.00025 1 2.62065

(14) PERFORMANCE ANALYSIS OF MUTUAL FUNDS

Where, Rp = Average Returns for Fund for particular period,

Where, Rp = Average Returns for Fund for particular period,

Where, Rp = Average Returns for Fund for particular period,

Where, Rp = Average Returns for Fund for particular period,

Where, Rp = Average Returns for Fund for particular period,

Yearly Results Page | 53

NAME E-MAIL _____________ Please tick markI.