Performance Evaluation of Mutual Funds at UTI SECURETIES

A study on Performance Evaluation of Mutual Funds with Reference to risk and return
CONTENTS - Executive Summary - Introduction - Literature review - Purpose of the study - Objectives
BABASAB PATIL
-1-
EXECUTIVE SUMMARY
UTI securities ltd. (UTISEL) has been working as an independent professional entity for providing financial intermediary and advisory services to corporate institutional and retail clientele. This project emphasis on, The Performance of Mutual Funds with reference to Risk and Returns, conducted at UTI Securities Ltd. In this project I have analyzed the Mutual Funds Schemes, particularly the Equity Diversified open ended (growth) schemes and evaluated the returns and the risk associated with those schemes.
OBJECTIVES OF THE STUDY

To know the performance of Mutual Fund of different companies.
To evaluate the returns and the risk associated with mutual funds.
To evaluate the investment performance of mutual funds with risk
adjustment, by using the theoretical parameters as suggested by William. Sharpe, Treynor and Jensen.
BABASAB PATIL
-2-
LIMITATIONS:
Not single work is an exception to the limitations every work has got its limitations. The data collection here in this project is strictly confined to the secondary sources. No primary data was associated with the project. Collecting historical NAV is very difficult. Selection of the schemes for the study is also a very difficult task because of the wide variety of schemes. The results of the study are subjected to inconsistencies arising out of the assumptions made to make the portfolios comparable viz., sample selection procedure, portfolio proportion assumption etc.
RESEARCH METHODOLOGY: Data source: Secondary data from Reports from UTI securities and other reports related websites.
Introduction
BABASAB PATIL
-3-
An investment means employment of funds on assets (i.e. securities or mutual funds or any of the investment avenues) with the aim of earning income as well as capital appreciation. There are mainly two attributes while investing to any of the funds i.e. time and risk. There are mainly four objectives, which the investments activities will carry on. Those are: Return from the investment Risk involved Liquidity Hedge against inflation Safety Convenience There are many alternatives investment avenues which are open to the investors to suit their needs and nature .The selection of investment alternatives depends up on the required level of return and the risk tolerance level. These alternatives range from financial securities to traditional non-securities investment. Following are the various investment alternatives. Negotiable and fixed income securities Equity shares Preference share Debentures Bonds Indira vikas patra &Kisan Vikas patra Government securities Money market securities (i.e. treasury bill, commercial paper, certificate of Deposit etc)
Non-negotiable securities
BABASAB PATIL
-4-
Bank deposit Post office deposit NBFC deposit Tax saving schemes Public provident fund scheme National saving scheme Life insurance Mutual funds Real estate
BABASAB PATIL
-5-
LITERATURE REVIEW
Introduction to Mutual Funds What is a Mutual Fund? Like most developed and developing countries the mutual fund cult has been catching on in India. There are various reasons for this. Mutual funds make it easy and less costly for investors to satisfy their need for capital growth, income and/or income preservation. And in addition to this a mutual fund brings the benefits of diversification and money management to the individual investor, providing an opportunity for financial success that was once available only to a select few.
Understanding Mutual funds is easy as it's such a simple concept: a mutual fund is a company that pools the money of many investors -- its shareholders -- to invest in a variety of different securities. Investments may be in stocks, bonds, money market securities or some combination of these. Those securities are professionally managed on behalf of the shareholders, and each investor holds a pro rata share of the portfolio -entitled to any profits when the securities are sold, but subject to any losses in value as well.
For the individual investor, mutual funds provide the benefit of having someone else manage your investments and diversify your money over many different securities that may not be available or affordable to you otherwise. Today, minimum investment requirements on many funds are low enough that even the smallest investor can get
BABASAB PATIL
-6-
started in mutual funds.
A mutual fund, by its very nature, is diversified that is, its assets are invested in many different securities. Beyond that, there are many different types of mutual funds with different objectives and levels of growth potential, furthering your chances to diversify.
Evolution:
In most of the countries, mutual funds have emerged as strong rivals to banking industry in mobilizing savings funds. The reason that may attributed to same is that in the banking sector there are many restrictions for investment in the capital market, there as the mutual funds have been a free access to these markets which in other words have given then an upper hand in the matter of operations. Consequently, the returns from mutual funds investment are higher compared to the returns out of savings in banks in an ideal market condition. Thus, he mutual funds i8ndusty has witnessed a tremendous growth in countries like Mexico and South Africa.
Mutual Funds can be broadly classified under 3 heads namely a) Investment Trust
BABASAB PATIL
-7-
b) Holding companies c) Finance Companies Out of the above the investment trust got a boost because of good public response and today we have in India Unit Trust of India that was constituted on similar lines with the unit trust in the U.S.A. The unit trusts are open-ended schemes where the investor can buy and sell Unit at his only will and wish. The other advantage of unit Trust is that even a small investor can hold shares of many companies and enjoy the returns arising lot of the investment. The unit trust of India was constituted under the unit Trust of India act, 1963 and became operational in the year 1964 with the basic objectives of mobilizing savings through the sale of units and investing them in corporate securities with the idea of maximizing yield from them and capital appreciation with inbuilt liquidity. The unit trust of India still commands a good position among mutual fund in India and approximately 90% of the investments in mutual fund are in the schemes floated by unit trust of India. The unit trust of India has many highlights in its performance so far. The monopoly of unit trust of India was brought to an end with the entry of public sector mutual funds in the year 1987. Canara bank, State Bank of India, Punjab National Bank and Indian bank floated the premier mutual funds that came into being during 1987.
DEFINITIONS:
The reason for increased response towards mutual funds world over is on account of investment analyst, who takes investment decisions based on research.
BABASAB PATIL
-8-
The concept of the lower risk carried on by the investor as the funds are diverted with professional body of investment analyst, who take investment decisions based on research. The concept of mutual fund has been defined in various ways. According to SEBI (Mutual Fund) regulatins1993, Mutual fund means a fund established in the form of trust by sponsor to raise moneys by the trustees through the sale of units to the public under one or more schemes for investing in securities in accordance with these regulations. However in the Indian context it is safe to define Mutual Fund as trusts accepting savings from the investors and invest the same as per the objectives incorporated in the trust deed to manage diversified portfolio which in turn assure reasonable returns to the investors.
Why invest in Mutual Funds.

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

One of the primary benefits of mutual funds is that an investor has access to professional management. A good investment manager is certainly worth the fees you will pay. Good mutual fund managers with an excellent research team can do a better job of monitoring the companies they have chosen to invest in than you can, unless you have time to spend on researching the companies you select for your portfolio. That is because Mutual funds hire full-time, high-level investment professionals. Funds can afford to do so as they manage large pools of money. The managers have real-time access to crucial market information and are able to execute trades on the largest and most cost-effective scale. When you buy a mutual fund, the primary asset you are buying is the manager, who will be controlling which assets are chosen to meet the funds' stated investment objectives.
Diversification
A crucial element in investing is asset allocation. It plays a very big part in the success of any portfolio. However, small investors do not have enough money to
BABASAB PATIL
-9-
properly allocate their assets. By pooling your funds with others, you can quickly benefit from greater diversification. Mutual funds invest in a broad range of securities. This limits investment risk by reducing the effect of a possible decline in the value of any one security. Mutual fund unit-holders can benefit from diversification techniques usually available only to investors wealthy enough to buy significant positions in a wide variety of securities.
Low Cost
A mutual fund let's you participate in a diversified portfolio for as little as Rs.5,000, and sometimes less. And with a no-load fund, you pay little or no sales charges to own them.
Convenience and Flexibility

Investing in mutual funds has its own convenience. While you own just one security rather than many, you still enjoy the benefits of a diversified portfolio and a wide range of services. Fund managers decide what securities to trade, collect the interest payments and see that your dividends on portfolio securities are received and your rights exercised. It also uses the services of a high quality custodian and registrar. Another big advantage is that you can move your funds easily from one fund to another within a mutual fund family. This allows you to easily rebalance your portfolio to respond to significant fund management or economic changes.
BABASAB PATIL
-10-
Liquidity
In open-ended schemes, you can get your money back promptly at net asset value related prices from the mutual fund itself.
Transparency
Regulations for mutual funds have made the industry very transparent. You can track the investments that have been made on you behalf and the specific investments made by the mutual fund scheme to see where your money is going. In addition to this, you get regular information on the value of your investment.
Variety
There is no shortage of variety when investing in mutual funds. You can find a mutual fund that matches just about any investing strategy you select. There are funds that focus on blue-chip stocks, technology stocks, bonds or a mix of stocks and bonds. The greatest challenge can be sorting through the variety and picking the best for you.
Mutual fund route offers several important advantages.

The popular saying, dont keep all the egg in one basket is quite
appropriate in the case of instruments, if an investor wishes to maximize his returns, he should invest in a variety of securities available across the market. However, a small investor with his limited savings can not acquire a number of securities of different companies and industries. proportion of the average market. Thus, the investor gets a This specific character of mutual fund
investment avenues further, the modern portfolio they states that, diversification reduces the risk and improves the scope for higher returns. Professionals who have knowledge and experience in security analysis and portfolio management manage the corpus amount mobilized by the mutual funds under various schemes. Research is continuous process in mutual funds, where they identify the under valued and high yielding securities and make will-timed purchases and sales. An investor of a mutual fund schemes may gain out its professional management. The investor can save his cost and time in identifying
BABASAB PATIL
-11-
the securities; he can share the benefits of reach and management costs of the funds with other investor. Mutual funds are floating different schemes with variety investment objectives. This creates an opportunity among investors to choose the schemes based on their objective, motivations, and requirements. In addition to the above advantages, the Indian mutual funds are specifically offering the following benefits to the investors. In the case of investment in equity shares or debentures, the allotment
would be based on lost or proportional. Whereas, almost all the mutual funds promise assure allotment to all investors to the extent of amount subscribed by them. This reduces the investors time. Mutual funds offer certain tax incentives to the investors and additional tax benefits for investing in tax planning schemes. The presence of the Mutual fund institutions in the economy offers certain advantages to the economy Mutual funds are the financial intermediaries, which mobilize the savings
from surplus units and transfer them to the capital and money market by investing in a variety of financial instruments. Mutual funs with support of their professional managers, carefully analyses the prospects of new companies and new industries if the prospects are good, subscribe large amounts to he equity and debt capital of newly established companies. Mutual funds as institutional investors, with their professional expertise in the stock trading. The increased participation of professional rational investment reduces the undesirable speculation in the capital market.
Classification of Mutual Fund Schemes

BABASAB PATIL
-12-
Any mutual fund has an objective of earning income for the investors and/ or getting increased value of their investments. To achieve these objectives mutual funds adopt different strategies and accordingly offer different schemes of investments. On this basis the simplest way to categorize schemes would be to group these into Operational classification highlights the two main types of schemes, i.e., openended and close-ended which are offered by the mutual funds. Portfolio classification projects the combination of investment instruments and investment avenues available to mutual funds to manage their funds. Any portfolio scheme can be either open ended or close ended
A. Operational Classification or on Structural basis:

Open Ended Schemes:
As the name implies the size of the scheme (Fund) is open i.e., not specified or pre-determined. Entry to the fund is always open to the investor who can subscribe at any time. Such fund stands ready to buy or sell its securities at any time. It implies that the capitalization of the fund is constantly changing as investors sell or buy their shares. Further, the shares or units are normally not traded on the stock exchange but are repurchased by the fund at announced rates. Open-ended schemes have comparatively better liquidity despite the fact that these are not listed. The reason is that investor can any time approach mutual fund for sale of such units. No intermediaries are required. Moreover, the realizable amount is certain since repurchase is at a price based on declared net asset value (NAV). No minute-to-minute fluctuations in rates haunt the investors. The portfolio mix of such schemes has to be investments, which are actively traded in the market. Otherwise, it will not be possible to calculate NAV. This is the reason that generally open-ended schemes are Equity Based. Moreover, desiring frequently traded securities, open-ended schemes hardly have in their portfolio shares of comparatively new and smaller companies since these are not generally traded. In such funds, option to reinvest its dividend is
BABASAB PATIL
-13-
also available. Since there is always a possibility of withdrawals, the management of such funds becomes more tedious as managers have to work from crisis to crisis. Crisis may be on two fronts, one is, that unexpected withdrawals require funds to maintain a high level of cash available every time implying thereby idle cash. Fund managers have to face questions like what to sell. He could very well have to sell his most liquid assets. Second, by virtue of this situation such funds may fail to grab favorable opportunities. Further, to match quick cash payments, funds cannot have matching realization from their portfolio due to intricacies of the stock market. Thus, success of the open-ended schemes to a great extent depends on the efficiency of the capital market. The holders of the shares in the fund can resell them to issuing Mutual Fund Company at any time They receive in turn the net asset value (NAV) of the shares at the time of resale. Such mutual funds companies place their funds in the secondary securities market. They do not participate in new issue markets to pension funds or life insurance investment companies. Can sell an unlimited number of shares and thus keep going larger. The open end mutual funds by or sell their own share. These companies ell new shares at NAV plus a loading or management fee and redeem scheme at NAV. UTIS Unit scheme, 1964 and CANCIGO and CANGICT are few examples of such funds. The minimum corpus for and openended fund is fifty crores a per SEBI guidelines. (b) Close Ended Schemes: Such schemes have a definite period after which their shares/units can be redeemed. Unlike open-ended funds, these funds have fixed capitalization, i.e., their corpus normally does not change throughout its life period. Close ended fund units trade among the investors in the secondary market since these are to be quoted on the stock exchanges. Their price is determined on the basis of demand and supply in the market. Their liquidity depends on the efficiency and understanding of the engage broker. Their price is free to deviate from NAV, i.e., there is every possibility that the market price may be above or below its NAV. If one takes into account the issue expenses, conceptually close ended fund units cannot be traded at a premium or over NAV because the price of a package of
BABASAB PATIL
-14-
investments, i.e., cannot exceed the sum of the prices of the investments constituting the package. Whatever premium exists that may exist only on account of speculative activities. In India as per SEBI (MF) Regulations every mutual fund is free to launch any or both types of schemes. Close ended mutual funds are different form the open-ended mutual fund. Close-ended and investment company has definite target amount for the funds and can not sell more shares after its initial offering. Its growth in terms of numbers is limited. Its shares are issued like together companys new issue listed and quoted at stock ex change. That minimum corpus for Close-ended fund is Rs20 crores. Closeended funds changed funds the secondary market acquisition of corporate securities. There is no necessary relationship between the price of close-ended mutual fund share and its NAV. Its shares may les per the current NAV per share, per more,(at a premium) as per less(at discount). Investors doubts about the abilities of the funds management lack of sales effort (brokers earn less commission of close ended schemes then open ended schemes) risk ness of the fund.
B. Portfolio classification of mutual funds. These are specific mutual funds, which are structured for feeding a particular invests able purpose. The objective of funds provide fixed return for those who design safety
BABASAB PATIL
-15-
Equity (Stock) Funds: Equity Funds are those that invest primarily in stock. The actual portfolio holing, trading style, portfolio turnover, etc, are widely depending on the funds investment objectives and managers style. Aggressive Growth: These funds are also called capital Appreciation fund. Having an investment objective of maximum capital gains, with minimal or no concern for dividends or income. These funds tend to be some of the most volatile, with share price rise that can be thrilling and drop that can be frightening. Not only do the portfolios holding them be volatile, but many aggressive growth funds magnify the volatility by using borrowed money (leverage) to increase the size of the position held. Some funds in this category growth funds fall into the aggressive growth area. Aggressive growth funds purchase shares of stock in smaller companies, which have a chance to grow at a faster pace than more mature companies. Of course, there is also greater risk involved with investing in less established companies. Aggressive growth funds are usually recommended for the investors who seek longterm capital appreciation and will not need access to money for at least ten years.
Balanced:
Funds invest in a mix of common stock and corporate bonds. The weighting of going piece of the mix depends on the fund managers perceptions of where the markets and economy are going. Some preferred stock and convertible securities are commonly allowed, as are cash equivalents such and Treasury Bills, CDs, and commercial paper.
Global:
It is Similar to international, but with the option of investing anywhere globally including the U.S.
Growth:
BABASAB PATIL
-16-
The goal for these funds is long-term growth of capital. Growth funds own shares of medium to large companies, and could include such familiar blue chip names as IBM and GENERAL ELECTRIC. Normally, these established companies will grow at a moderate pace, and will pay regular dividends to owner of its shares. If mutual fund is the owner the fund will collect these dividend and pass them to mutual funds shareholders once are more per year. While capital appreciation is major objective of these type of fund income derived from dividends is secondary objectives investments are typically in long growth stocks, with a lower portfolio turnover then the aggressive growths funds. Dividends yield tend to be low.
Growth and income:

Despite the name, fund in this category are typically more interested in growth than income with typical dividend rates on the portfolios in the 1% range. The usual portfolio is Blue Chip stock, with some income enhancing securities like convertible preferred stocks are bonds thrown in to the mix.
Index:
Unlike traditional stock funds, which are managed actively by a portfolio manager based on analysis of economic and market movements, index funds are passively managed. A passively managed fund buys and holds securities selected to represent its unmanaged target index, such as standard and poor 500 index.
Sector:
Concentrates investments on a narrow market sector like Health care, internal stocks, bio technology, and so on. Sector funds tend to be volatile as industry groups fall into and out of favor; portfolios are diversified only within industry group.
Real estate funds:
BABASAB PATIL
-17-
Real estate funds are of close-ended type. The funds are named so because primary investment is real estate ventures.
Bond funds:
Bond funds are objective of safety. Bond funds are liquid prices of funds fluctuates with changing interest rates.
C. Geographical Classification of Mutual Funds

National boundaries provide territorial restrictions on the sale and purchase of mutual funds units or share, as is the case in commodity trade or service in view of the, Mutual funds which operate with in the nation boundaries are different form those which are meant for subscription of foreigners or the countries national living out side its share. The classification is of broadly tow types.
BABASAB PATIL
-18-
1) Domestic Mutual Funds 2) Offshore Mutual Funds
Domestic Mutual Funds

Domestic Mutual Funds are the saving schemes, which are open for mobilizing saving of the nationals with in the country. All the Mutual fund schemes in vogue in the country vis--vis, UTI, GIC Mutual Fund, LIC Mutual Fund, SBI Mutual fund, CAN Bank Mutual Fund, PNBMF and BOIMF are the domestic schemes.
Offshore Mutual Funds

The basic objective of opening offshore Mutual fund scheme is to attract foreign capital for investment purposes in the country of the issuing company. Offshore Mutual Funds thus facilitate cross border fund flow, which is a direct route for getting foreign currency without political strings or domination on the issue country. From investment point of view too, offshore Mutual funds open up domestic capital market to the international investor and global portfolio investments. The major point of difference between offshore Mutual funds and Domestic Mutual funds is the currency and country risk for the global investors as the source of funds from am broad because of high risk in a higher return in the invested funds can be expected. Like domestic mutual funds, the offshore Mutual funds can also be functionally classified into Close-ended or Open-ended funds. The Major Offshore Mutual Funds opened so far have been close-ended schemes providing redemption of the units for individual investors only at the end of the period specified in the scheme. UTIs India funds 1986, India growth fund, SBIs India Magnum, Can Banks Indo-Swiss Himalayan fund, 1990 and Common wealth equity fund are all close-ended offshore funds.
BABASAB PATIL
-19-
Characteristics of Mutual Fund Schemes

The following are mutual fund scheme characteristics of the Indian mutual fund schemes.
Assurance of minimum returns:

Mutual funds in general do not assure any minimum returns to their
investors. Returns are paid to the investors, commensurate with the returns earned by the fund on the portfolio, as portfolio consists of various securities, whose returns are subject to market risks. Contrary to this, the Indian mutual
BABASAB PATIL
-20-
fund schemes launched during 1987 to 1990 assured specific returns while marketing their schemes. I n 1991, SEBI together with the union ministry of finance ordered the mutual funds not assume minimum returns. Recently, SEBI has formulated of policy that, mutual funds with a track record ;of 5 years will be allowed to offer fixed returns. SEBI shall prescribe the returns to be assured from time to time. However, no fund will be allowed to offer fixed return for more than 1 year.
Multiple Option
Most of the mutual fund schemes are offering different option to the
investor under one scheme. For example growth oriented scheme may offer option of either regular income plan, dividend shall be distributed to the investor, and under second dividend will be re-invested and the total amount at the time of redemption. act. Growth with capital gain. Immediate monthly income. Deferred monthly income. Accumulated income and benefits under section 80 1 of the income
Lock in period
Mutual fund schemes offer documents that contain a clause of lock in period ranging from one year to 3 years. Till the completion of the minimum period, the investors are neither allowed to trade the units on the stock exchange nor avail repurchased facility. Liquidity
BABASAB PATIL
-21-
a) Open-ended mutual funds offer the facility of repurchase, and the closeended schemes are also offering repurchase after a minimum period of two to three year. b) Mutual funds units can be pledged or mortgaged in favor of commercial banks or financial institutions, and can obtain a loan according to the rules and regulations of the bank or financial institution. c) Mutual fund can be transferred in favors of any individuals.
PURPOSE OF THE STUDY
The purpose of the study is to know the returns and the risk associated with the Mutual Funds Equity Diversified schemes and to find out which best scheme to recommend.
BABASAB PATIL
-22-
SCOPE OF THE STUDY

The present study includes 4 years average returns of the mutual funds, which have the total corpus (mass, quantity, amount,) value, of more than 10000 crores. For my study I have scanned all the mutual funds companies and have taken only those schemes which are having the corpus value of more than 400 crores and age of the fund is more than 3 years. This study covers only equity diversified schemes which are subject to more fluctuating risks and returns. Since the number and nature of stocks, the proportion of stocks in the portfolio and the relative ness of portfolio to the index considered, differs, the portfolios are averaged at 0.5 for these factors for variance determination. To evaluate the performance of the Mutual Fund schemes, Sharpes index, Treynors index and Jensens Alpha measures are applied.
OBJECTIVES OF THE STUDY
To know the performance of Mutual Fund of different companies.
To evaluate the returns and the risk associated with mutual funds.
BABASAB PATIL
-23-
To evaluate the investment performance of mutual funds with risk
adjustment, by using the theoretical parameters as suggested by William. Sharpe, Treynor and Jensen.
BABASAB PATIL
-24-
CONTENTS - Organization Profile - Date Collection Methods Measuring Tools
BABASAB PATIL
-25-
ORGANIZATION PROFILE
UTI SECURITIES LTD., (UTISEL) was incorporated on June 28, 1994 by Unit Trust of India as its 100% subsidiary and on the repealing of the UTI Act, the capital was now held by the Administrator of the Specified Undertaking of Unit Trust of India (ASUUTI), on April 17, 2006 the entire share capital of the company was transferred from SUUTI to Securities Trading Corporation Of India Ltd. [STCI] and its nominees. UTISEL has been working as an independent professional entity for providing financial intermediary and advisory services to corporate institutional and retail clientele. The Company has built up a reputation for transparent and fair execution of transactions, which have been well received and appreciated by its clientele. The staff at UTI Securities strives to maintain the quality of services offered to its clients at the highest degree. The Company has grown from an institutional brokerage house to a full-fledged financial intermediary having nationwide presence in major cities with branches and franchisees to service a wide range of clients. We are committed to gradually enhancing our network in the near future. The Company has also invested in the joint-venture company with Standard Chartered Bank viz. Standard Chartered UTI Securities (P) Ltd. that is engaged in primary dealership and Government securities. The Company has started Commodity Trading through its subsidiary, UTISEC COMMODITIES LIMITED, which provides facility of commodity trading on NCDEX and MCX. Mission and Vision: To emerge as one of the leading providers of stock brokerage, investment banking and related services, at par with the best in the world".
Management profile:
BABASAB PATIL
-26-
Mr. Dipankar Basu: Chairman Mr. Dipankar Basu was appointed as Chairman and Director on the Board of UTI Securities Limited at the Meeting of the Board of Directors held on April 17, 2006.
Mr. Basu is the non-executive Chairman of Securities Trading Corporation of India Limited and Rain Calcining Limited. Mr. Basu brings with him long experience and specialized knowledge of financial markets in India. He has been the Chairman of State Bank of India until August 1995. While acting as the Chairman, Mr. Dipankar Basu served as a Member on the Boards of number of SBI subsidiaries including those engaged in investment banking and fund management. He has been a Board member of number of companies engaged in both financial and non-financial businesses.
Even after retirement in 1995, Mr. Basu has been actively engaged in wide spectrum of functions including being a member of the Disinvestment Commission set up to advise the Government of India on public sector disinvestments. He has also been a member of the Narsimhan Committee on Banking Sector Reforms.
Mr. Gopalakrishnan Narayanan: Director
Mr. Gopalakrishnan Narayanan, currently the Managing Director of Securities Trading Corporation of India Limited has been appointed as an Additional Director on the Board of our Company with effect from April 17, 2006.
Being qualified as BSc and CAIIB, Mr. Narayanan brings with him more than 36 years of experience and knowledge. He joined Bank of India in 1970. Large part of Mr.
BABASAB PATIL
-27-
Narayanans career was in International Treasury and Foreign Exchange related areas. He has had two stints of Overseas Assignments at Tokyo and Jersey Branches of Bank of India.
Mr. Narayanan has attended number of trainings conducted by in-house training college, Bankers Training College of Reserve Bank of India in Treasury and Forex related areas. He has been a regular guest faculty on Treasury & Forex related subjects in in-house training colleges & Bankers Training College of Reserve Bank of India.
Dr. D C Anjaria: Director An MBA in finance from the IIM (A), he has had 20 years of experience with Citibank N.A. in India and overseas. He worked as Chief of Staff with Citicorp Investment Bank in Paris, France. In 1988, Dr. Anjaria joined the Unit Trust of India to establish and head UTI Institute of Capital Markets, a unique specialised training and research institution. Currently he runs an independent consulting operation- International Financial Solutions Pvt. Ltd. to advise clients in areas including corporate strategy, financial risk management and use of derivative products.
Shri A Rama Mohan Rao: Managing Director
Chartered Accountant by profession, Shri Rao is the Managing Director of the Company since July 2002. He has worked with UTI for a period of 22 years in various functional areas of marketing, accounting, operations, Investments and Fund Management in different capacities. He worked as Branch Manager at UTI Branches, as Functional Head in International
BABASAB PATIL
-28-
Finance and Investment Department and also as one of the Chief Investment Officers for UTI schemes. He has represented as one of the Indian Delegates at the Asia Oceania Regional Meeting for Investment Managers held at Singapore in 2002. At UTISEL he is responsible for the overall management and performance of the Company. Products and services: You have the right to pursue financial independence ... your way. Usectrade is committed to help you do just that. We deliver State-of-the-art Tools, excellent Customer Care, Affordable Pricing and Innovative Technology so you can follow your own path. Need based solutions, that is, what our Product Bouquet is all about Equity: At Usectrade, you can place online trades for virtually any stock listed on NSE & BSE. Usectrade offers plenty of powerful ways to place stock orders ... along with the trading tools and services that help you move quickly and conveniently. Ways to trade stock Delivery based Trading: Place delivery based orders for all stocks listed on NSE & BSE Intra-day Trading: Execute Margin Orders upto 3 to 4 times your available funds. The same is available for select group of stocks listed on NSE & BSE. ANST: Sell shares before you receive the same in your demat account. You can avail of this facility 1st and 2nd day after the buy order date. Derivative: With a Derivative-approved Usec trade account, you can pursue a wide range of Futures & Options trading strategies with speed and ease. We deliver the support, information and structure that quickly lets you spot potential opportunities and act on them fast
BABASAB PATIL
-29-
Mutual Fund: At Usectrade, we offer access to more than 1000 mutual fund schemes from leading fund families. These funds provide broad diversification and cover a range of investment objectives, philosophies, asset classes and risk exposures. Trades may be placed via the Internet, Interactive Voice Response (IVR) phone system or with a broker. IPO: IPO or Initial Public Offer presents excellent opportunities for gaining high returns on your investments in a relatively short period of time. We have made investing in IPOs hassle free. All that is required is Buying POWER and rest is at the click of a button. No paperwork no queues. Get information on IPO news, Forthcoming IPOs and a lot more on Usectrade.com Commodities: Metals, energies, grains and livestock whatever you wish to trade, you'll find it on our commodity trading system. Plus, you'll get a comprehensive suite of educational, analytical, and execution tools that makes trading commodities easy.
Insurance:
Usectrade in association with Birla Sunlife brings you a secure insurance option without the hassles and worries of a conservative insurance plan. With least paperwork, you get the dual benefit of a risk cover and savings. What's more, we shall send you regular reminders about your premium payments due.
Bonds
Fixed income securities can help reduce your risk within an investment portfolio while providing a steady stream of income over time. Currently you can choose to
BABASAB PATIL
-30-
invest online in GOI Bonds. If you are looking to diversify your portfolio, possibly improve your tax efficiency and/or reducing your risk exposure, you may want to consider making fixed income securities part of your personal investment strategy
Research: Charting Tools - Get a combined view of stocks, rapid price changes and volume increases with this pre-trade analytic tool. Enables you to do technical market analysis of stocks on price, volume, market cap and P/E for NSE/BSE Benchmark against Domestic as well as International Indices. Sector Watch - You can access sector-wise information to track sectors and individual scrips within the sector, which makes analysis easy for you.
Corporate Infohub - We provide you with exhaustive company information, detailed financials and ratios. And we also allow you to evaluate financials across peer companies. Our extensive database covers more than 4000 companies.
Newsroom - View live market news from the most reliable sources on equity, debt, politics and general events. You even have access to live news analysis, market commentary and happening stocks.
Customer Service & Other Value Added Services Online Query Resolution - With our "Quick Mail" tool you can resolve all your problems online.
Online Ledger - View your Digital Contract Note, summary of your transactions using
BABASAB PATIL
-31-
Online "Bills & Accounts"
My Inbox - Maintain records of all Important notifications related to your account
SMS Alerts - Set Price based Alerts for Stocks of your choice Dedicated Customer Care Centre & State-of- the-art Phone-2-Trade Desk
Interactive Demo - A step-by-step guide to enable you to navigate through the process of Investing Online on our website Usectrade.com Subscription to Mailers - Subscribe to our Inhouse Research Reports covering our entire Product Bouquet
Investment Banking and Advisory Services

Investment Banking is one of the prime focus areas of the company and we provide value added, customized solutions to our clients. Leveraging on the knowledge, expertise and experience of our professionals, we offer services that range from managing public issues, debt and equity placements, corporate advisory services and financial consultancy to facilitating mergers and acquisitions. The Investment Banking Team's business philosophy emphasizes:
Long-term relationship with clients. A strong research-based advice. Innovative solutions and speedy execution.
BABASAB PATIL
-32-
Ethical and transparent conduct of business.
It has always been the endeavor of UTI Securities to bring all the market constituents together in a mutually beneficial relationship. Equity capital Markets The Issue Management group focuses on public issues, open offers and buy back issues. Our proximity to large institutions gives us an added advantage in placing large equity issues. This division is supported by a nationwide network comprising of 12 branches, 15 franchisees and sub-brokers across the country for retail distribution. Within a short span, UTISEL has already been recognized as one of the leading merchant bankers in India. UTI Securities has consistently provided professional guidance and expert services. Over the years, it has developed strong relationships with institutional investors and other market intermediaries, enabling it to structure and successfully place a wide array of Capital Market products that meet the requirements of the issuer, investor and the market.
The Equity Capital Markets group offers the following services:

Initial Public Offerings Rights Issues Buy-Back Underwriting Open Offers Delisting of Securities Private Equity
The Equity Capital Markets group seamlessly draws on the expertise provided by the Equity Research and Equity Sales teams on all the public offerings. We have been associated with a number of issues in different capacities as Lead
BABASAB PATIL
-33-
Managers, Co Managers, Syndicate/Sub-syndicate Members, etc. in the past. We successfully lead managed recently the public issue of Four Soft Ltd., a software products company, with an issue size aggregating Rs. 200 million. We were also involved as a syndicate member in the issue of Indraprastha Gas Ltd. where we procured over 12,000 applications.
Our Clients: We are currently lead managing the issues of SMS Pharmaceuticals, a bulk drugs manufacturer; Glenmark Laboratories Ltd. which is in formulations segment; Vivimed Labs Ltd., manufacturer of pharmaceutical ingredients catering to the personal care industry and Crew BOS Products Ltd., a fashion accessories manufacturer. The size of the said issues ranges from Rs. 150 million to Rs. 500 million. We are also Lead Managing Rights Issue of Varun Shipping Company Ltd of Rs.130 -150 Crores. We also pursue Buyback/Delisting offers amongst others. We are aiming at making further inroads by securing mandates of premier companies in the Pharmaceutical, Textiles, Information Technology, Hospitality, Banking and Housing Finance industries amongst others.
Private Equity The Private Equity Group arranges equity placement through the off-market route using its privileged relationships with various Venture Capital and Strategic & Portfolio Equity investor who operate from within the country as well as from abroad. The Private Equity group assists companies seeking capital infusions in the form of seed capital, venture capital, angel investment, strategic investment, and mezzanine financing from the private equity marketplace.
BABASAB PATIL
-34-
The private equity group identifies start up, later stage projects for investing in well-managed companies, which are placed to grow rapidly and to take advantage of the favourable economic conditions existing within the space with a clearly defined business model. Private Equity Group has followed the philosophy of being a multisector player, as it believes that in the Indian context it ensures an optimum balance of risk and return to its investors. Private Equity Group has demonstrated its industry expertise in different sectors by backing diverse sectors like Pharma, Power, Entertainment, Information Technology etc. The Private Equity division has been successful in arranging pre IPO funding from venture capitalists/Private Equity investors. Recently we have done the placement for Four Soft Ltd. and Glenmark Laboratories Ltd. aggregating Rs. 140 million.
Data Collection:
Data source: Secondary data from Reports from UTI securities and other reports related websites.
Measuring tools and Techniques:

Techniques of analysis:
1.
Return:
Return on a typical investment consists of two components. The basic is the
periodic cash receipts (or income) on the investment, either in the form of interest or dividends. The second component is the change in the price of the assets-commonly called the capital gain or loss. This element of return is the difference between the
BABASAB PATIL
-35-
purchase price and the price at which the assets can be or is sold; therefore, it can be a gain or a loss. The return has been calculated as under: NAVt NAVt-1 Portfolio return: Rit =--------------------------------NAV t-1 Where Rit is the difference between Net Asset Values for two consecutive days dividend by the NAV of the preceding day. M.indt M.indt-1 Market return: Rmt =-------------------------------M.indt-1
Where Rmt is the difference between market indices of two consecutive days dividend by the market index for the preceding day
2.
Risk :
Risk is neither good nor bad. Risk in holding securities is generally associated
with the possibility that realized returns will be less than expected returns. The difference between the required rate of returns on mutual fund investment and the risk free return is the risk premium. Risk can be measured in terms of Beta & standard deviations.
Standard deviation:
It is used to measure the variation in individual returns from the average expected returns over a certain period. Standard deviation is used in the concept of risk of a portfolio of investments. Higher standard deviation means a greater fluctuation in expected return.
BABASAB PATIL
-36-
SD =
n X2 (X)2
n (n-1)
Beta :
Beta measures the systematic risk and shows how prices of securities respond to the market forces. It is calculated by relating the return on a security with return for the market. By convention, market will have beta 1.0.Mutual fund is said to be volatile, more volatile or less volatile. If beta is grater than 1 the stock is said to be riskier than market. If beta is less than 1, the indication is that stock is less risky in comparison to market. If beta is zero then the risk is the same as that of the market. Negative beta is rare.
= Covar / (SD)2
Where, Covariance (covar) is the average of the products of deviations for each data point pair. And, covar is calculated as:
Covar = 1/n (xi x)(yi - y)

Where, x = scheme returns. y = market returns. = mean.
nxy - (x)( y)
2
nx2-(x)
Where, n = number of years X = rolling returns of the BSE index
BABASAB PATIL
-37-
Y = rolling returns of the schemes
3.
Sharpe index
Sharpe index measures risk premium of a portfolio, relative to the total amount
of risk in the portfolio. Sharpe index summarizes the risk and return of a portfolio in a single measure that categorizes the performance of funds on the risk- adjusted basis. The larger the Sharpes index the portfolio over performs the market and vise versa. Formula to calculate Sharpes measure is:
St =
RP - Rf
SD
Where,
st = Sharpes index Rp= portfolio return Rf= Risk free rate of return (5%)
BABASAB PATIL
-38-
SD= Standard Deviation of the port folio
4.
Treynors Index
Treynors model is on the concept of the characteristics straight line. The
characteristics line has drawn a relationship between the market return and a specific portfolio without taking into consideration any direct adjustment for risk. It is also known as reward to volatility ratio and is defined as:
The formula for Treynors Index is:
Portfolio avg return (Rp) risk-free rate of interest (Rf) Treynor index (Tn) = Beta coefficient of portfolio (Bp)
Rp -Rf Tn = Bp
BABASAB PATIL
-39-
It measures portfolio risk in terms of beta, which is weighted average of individual security beta. The ratio is investors, for who the fund represents only a fraction of their total assets. The higher the ratio better is the performance.
5. Alpha
The size of the alpha exhibits the stocks unsystematic return and its average return independent of market return. If the fund produces the expected return at the level of risk assumed, the fund would have an alpha equal to zero. A positive alpha indicates that the manager produced return greater than expected for the risk taken. Alpha is calculated by comparing the funds actual performance with the risk-adjusted expected return. Where Rp = portfolio return Rf = Risk free rate of return (5%) Rm = average market return =(Rp - Rf) - Beta (Rm- Rf)
BABASAB PATIL
-40-
BABASAB PATIL
-41-
CONTENTS - Methodology - Results & Discussion with Charts & Graphs - Conclusion - Bibliography
Methodology
The following table shows the list of AMC in India & the corpus value of individual AMC in the month of October and November 2006.
S.No 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. Mutual Fund LIC Mutual Fund UTI Mutual Fund Benchmark Mutual Fund Reliance Mutual Fund Kotak Mahindra Mutual Fund Pru ICICI Mutual Fund DSP Merrill Lynch Mutual Fund HDFC Mutual Fund PRINCIPAL Mutual Fund Deutsche Mutual Fund Birla Mutual Fund HSBC Mutual Fund JM Mutual Fund SBI Mutual Fund ABN AMRO Mutual Fund Fidelity Mutual Fund Standard Chartered Mutual Fund ING Vysya Mutual Fund AUM 31/01/2007 16480.90 41622.51 8951.09 34636.90 13542.09 35232.16 14277.26 29555.13 11887.17 6138.66 17474.97 10312.24 4664.6 15961.26 5738.67 5786.05 12894.13 3834.43 AUM 31/12/2006 12458.88 37789.97 5659.42 3152.28 10938.29 32664.03 11781.10 27552.96 10050.54 5155.57 16821.57 9691.28 4097.05 15496.18 5335.14 5399.96 12541.59 35781.17 Increase/ Change % Decrease 4022.02 32.28 3832.54 10.14 3291.67 58.16 3064.62 9.71 2603.8 23.80 2568.13 7.86 2559.16 21.84 2002.17 7.27 1836.63 18.27 982.72 19.06 653.2 3.88 620.95 6.41 567.55 13.85 465.09 3.00 403.53 7.56 386.09 7.15 352.54 2.81 256.26 7.16
BABASAB PATIL
-42-
19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29.
DBS Chola Mutual Fund Morgan Stanley Mutual Fund Tata Mutual Fund Sahara Mutual Fund Sundaram Mutual Fund Escorts Mutual Fund Quantum Mutual Fund BOB Mutual Fund Taurus Mutual Fund Franklin Templeton Investments Canbank Mutual Fund
2145.33 3026.44 12521.86 203.33 6854.99 127.70 55.15 150.21 258.29 23832.70 2304.91
1938.74 2864.58 12472.36 160.94 6818.87 123.18 51.51 165.49 275.92 23920.26 2737.86
206.59 161.87 47.51 42.39 36.12 4.52 3.65 -15.28 -17.63 -87.57 -332.85
10.66 5.65 0.38 26.34 0.53 3.67 7.09 -9.23 -6.39 -.037 -12.62
The AMC which have the AUM of more than 10,000Crs 1st STEP:
The selection of AMCs for analysis is on the basis of AUM value of individual AMC. From all the AMCs, the fund, which have the AUM of more than 10,000crs only those AMCs are taken for the study. The following table shows the list of AMCs, which have the AUM of more than 10,000Crs in the month of December 2006 and January 2007, & the % change in the values in a month also are shown. S. No
AMC
AUM AUM Absolute %Change 31/01/2007 31/12/2006 change
1. 2. 3.
UTI Mutual Fund Pru ICICI Mutual Fund Reliance Mutual Fund
41622.51 35232.16 34636.90
37789.97 32664.03 3152.28
3832.54 2568.13 3064.62
10.14 7.86 9.71
BABASAB PATIL
-43-
4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.
HDFC Mutual Fund Franklin Templeton Investments Birla Mutual Fund LIC Mutual Fund SBI Mutual Fund DSP Merrill Lynch Mutual Fund Kotak Mahindra Mutual Fund Standard Chartered Mutual Fund Tata Mutual Fund PRINCIPAL Mutual Fund HSBC Mutual Fund
29555.13 23832.70 17474.97 16480.90 15961.26 14277.26 13542.09 12894.13 12521.86 11887.17 10312.24
27552.96 23920.26 16821.57 12458.88 15496.18 11781.10 10938.29 12541.59 12472.36 10050.54 9691.28
2002.17 -87.57 653.2 4022.02 465.09 2559.16 2603.8 352.54 47.51 1836.63 620.95
7.27 -.037 3.88 32.28 3.00 21.84 23.80 2.81 0.38 18.27 6.41
BABASAB PATIL
-44-
2nd STEP
Equity diversified Schemes: There are varieties of schemes offered by the AMCs. Equity diversified is one of the schemes offered by the AMC. The selection criteria of schemes are totally based on the fund size and age of the fund. The scheme, which has the corpus value of more than 400crs and the age of the fund, is more then 3yrs only those funds are qualified for the analysis.
Equity Diversified Fund diversifies their portfolio evenly across stocks and industry sectors. The returns from them tend to be moderately high over a long-term horizon but since the prices of equity shares fluctuate on the stock markets, the net asset value is subject to these fluctuations. These funds suit investors who have moderate risk appetite. In a diversified fund, the risk of down-side is mitigated by the breadth of variety of stocks in the portfolio. Since the portfolio is diversified, the underperformance in some stocks or sectors in which the fund has invested is balanced by the superior performance of other stocks or sectors
BABASAB PATIL
-45-
The following are the equity-diversified schemes in the selected funds at the current date.1/02/2007
Tables for fund size and fund age UTI Mutual Fund
BABASAB PATIL
-46-
S. No
1. 2. 3. 4. 5. 6. 7. 8. 9. 10 . 11 . 12 . 13 . 14 . 15 . 16 .
Scheme Name
Fund Size
Date of Inception
31/12/1991
Fund Age
15.16 9.58 14.08 2.83 20.33 14.75 7.33 1.08 1.91 7 3.41 9.08
Fund Class
ED ED ED ED ED ED ED ED ED ED ED ED ED ED ED ED
UTI Master Plus 91(G) UTI Index Select Equity (G) UTI Mastergrowth 93 (G) UTI Large Cap (G) UTI Mastershare (G) UTI Equity Fund (G) UTI Growth & Value Fund (G) UTI Leadership Equity Fund (G) UTI Dividend Yield Fund (G) UTI India Advantage Equity (G) UTI Dynamic Fund (G) UTI Master Value Fund (G) UTI Mid Cap (G) UTI Opportunities Fund (G) UTI Contra Fund (G) UTI Wealth Builder Fund (G)
863.52 216.36 346.95 25.53 1,828. 1,451.73 151.96 1,027.84 516.88 55.84 128.27 647.68
12/05/97 18/01/93 07/04/04

19/09/1986
18/05/92
28/10/99
30/01/06 03/05/05
05/02/00 12/09/03
01/06/98 80.70 497.79 20/07/05 640.04 22/03/06 905.02

07/09/06 0.41 0.91 07/04/04 2.83 1.58
BABASAB PATIL
-47-
S. No 1. 2. 3. 4. 5. 6. 7. 8.
Scheme Name
Pru ICICI Infrastructure (G) Pru ICICI Dynamic Plan (G) Pru ICICI Services Indus. (G) Pru ICICI Growth (G) Pru ICICI Emerging S.T.A.R.(G) Pru ICICI Discovery Fund (G) Pru ICICI Fusion Fund (G)
Fund Size 1,562.32

1,533.33
Date
of Age
of Fund class ED ED ED ED ED ED ED ED
inception 16/08/05
18/10/2002
the fund 1.5 4.33 1.25
424.02 406.88 933.66 05/10/04 908.60 23/07/04 634.15 1,025.49 18/11/05 19/06/98
8.66 2.75 2.58
27/02/06 (1)
05/10/01(5.33)
Pru ICICI Power (G)
Prudential ICICI Mutual Fund
BABASAB PATIL
-48-
S. No
Scheme Name
Fund Size
Date
of Age the fund

1.75 2.25 1.58 11.58 10.5 0.58
of Fund class
ED ED ED ED ED ED
inception
10/05/05 01/11/04 07/03/05 07/09/95 08/09/95 07/03/06
1. 2. 3. 4. 5. 6.
Reliance RSF Equity (G) Reliance NRI Equity Fund (G) Reliance Equity Opp. Fund (G) Reliance Vision Fund (G) Reliance Growth Fund (G) Reliance Equity Fund (G)
160.50 121.23 2,214.79 2,415.31 3,243.92 4,455.25
Reliance Mutual Fund
HDFC Mutual Fund

S. No 1. 2. 3. 4. 5. Scheme Name HDFC Growth Fund (G) HDFC Core & Satellite Fund (G) HDFC Top 200 Fund G) HDFC Equity Fund (G) HDFC Premier Multi-Cap (G) Fund Size 379.40 646.03 1,621.10 3,907.14 673.81 Date of Age of the Fund fund 6.41 1.41 10.5 12.5 1.91 class ED ED ED ED ED inception 11/09/00 10/09/04 19/08/96 08/12/94 21/03/05
BABASAB PATIL
-49-
6.
HDFC Capital Builder Fund (G)
657.84
16/12/93
13.16
ED
S. No Scheme Name 7. HDFC Long Term Equity Fund (G) 1. Franklin India Opportunity. (G) 2. 3. 4. 5. 6. 7. Franklin India Growth Fund Franklin India Prima Plus (G) Franklin India Blue chip (G) Franklin (I) Flexi Cap (G) Franklin (I) Smaller Co's (G) Templeton (I) Equity Income(G)
Fund Size Date of Age of Fund 1,478.01 27/01/06 1.08 ED (crs.) inception the fund class 687.15 19/02/2000 7 ED 25.06 878.70 2575.97 3,364.79 1,211.47 1,749.86 07/02/2000 7 28/09/94 12.41 ED ED ED ED ED ED
30/11/1993 13.25 09/02/05 14/12/05 20/04/06 2 1.16 0.83
Franklin Templeton Mutual Funds
Birla Mutual Fund
S. No 1. 2. 3.
Scheme Name
Fund Size 396.18
Date
of Age of the Fund fund 0.42 1 1.58 class ED ED ED
inception 08/09/2006 24/02/2006 12/07/2005
Birla Long Term Adv. Fund (G) Birla Infrastructure Fund (G) Birla India GenNext Fund (G) 474.08 159.40
BABASAB PATIL
-50-
4. 5. 6. 7.
Birla India Opportunities (G) Birla Advantage Fund (G)

Birla Midcap Fund (G)
83.17 475.06 228.43 440.00
25/08/2003 24/02/95
3.5 12
ED ED
01/10/02
28/09/05
4.33 1.42
7.77
ED ED ED ED
Birla Top 100 Fund (G)
8. 9.
Birla Equity Fund (G)
506.37
124.74
08/27/98
30/08/2002
Birla Frontline Equity (G)
4.5
3.32
v.
Birla Dividend Yield Plus (G)
415.89
02/07/03
LIC Mutual Fund

S. No 1. 2. Scheme Name Fund Size 99.28 1. LIC MF Growth Fund 82.93 2. LIC MF Equity Fund (G) 11/01/93 14.08 ED Date of Age of the Fund fund 12.5 class ED
inception 10/08/94
SBI Mutual Fund

S. No 1. 2. 3. Scheme Name Magnum Global Fund (G) Magnum Midcap Fund (G) Magnum Contra Fund (G) Fund Size 954.15 427.81 1,448.78 Date of Age of the Fund class ED ED ED
inception fund 22/09/1994 12.42 17/03/05 31/07/99 1.91 7.57
BABASAB PATIL
-51-
4. 5. 6. 7. 8. 9.
SBI Magnum Equity Fund (D) Magnum Comma Fund (G Magnum Multiplier Plus (G) Magnum Multicap Fund (G) Magnum Emerging Businesses (G) Magnum NRI Fund - FA Plan (G)
265.98 457.58 745.07 1,079.18 267.94 13.64 214.38
1/01/1991 25/07/05 01/03/93 16/09/05 17/09/04 13/01/04 15/09/06
16.03 1.58 13.91 1.41 2.41 3.08 0.41
ED ED ED ED ED ED
10 SBI Arbitrage Oppor. Fund (G) . 11 SBI Blue Chip Fund (G) .
1,936.34
20/01/06
1.08
DSP Merrill Lynch Mutual Fund

S. No 1. 2. 3. 4. Scheme Name DSP-ML Small & MidCap- Inst (G) DSP-ML Small & Mid Cap Fund (G) DSP-ML Opportunities (G) DSP-ML Equity Fund Fund Size 54.59 1,389.79 1,356.20 695.41 Date of Age of the Fund fund 0.41 0.41 6.83 9.83 class ED ED ED ED
inception 29/09/06 29/09/06 18/04/00 07/04/97
BABASAB PATIL
-52-
5. 6.
DSP-ML Top 100 Equity (G) DSP-ML India T.I.G.E.R. (G)
299.47 1,481.34
21/02/03 25/05/04
4 2.75
ED ED
Kotak Mutual Fund

S. No 1. 2. 3. 4. 5. Scheme Name Kotak Lifestyle Fund (G) Kotak 30 (G) Kotak Opportunities Fund (G) Kotak Global India Scheme (G) Kotak Contra (G) Fund Size 384.15 432.01 224.26 111.85 143.59 Date of Age of the Fund fund 1 8.16 2.5 3.08 1.58 class ED ED ED ED ED
inception 22/02/06 22/12/98 25/08/04 16/01/04 01/07/05
Standard Chartered Mutual Fund

S. No Scheme Name Fund Date of Age of the Fund
BABASAB PATIL
-53-
1. 2. 3. S. No 1. 2. 3. 4. 5. 6. 7. 8. 9.
StanChart Imperial Equity (G) StanChart Classic Equity (G) StanChart Premier Equity (G) Scheme Name
Tata Infrastructure Fund (G)
Size 251.16 372.11 161.21 Date
inception 21/02/06 14/07/05 26/09/05
fund 1 3.16 2.83
class ED ED ED
Fund Size 1,187.91 106.38 292.23 440.12 181.46 84.53 33.29 154.51 146.18 201.42
of Age of the Fund fund 2.16 class
inception 22/12/04 24/05/96 07/05/98 30/03/93 10/05/05 15/06/04 15/06/94 15/06/05 27/10/04 25/10/05
ED ED ED ED ED ED ED ED ED ED
Tata Select Equity Fund (G)
10.75 8.75 13.96 1.75 2.66 12.66 1.66 2.33 1.33
Tata Pure Equity Fund (G)
Tata Equity Opp. Fund (G)
Tata Service Industries (G)
Tata Equity P/E Fund (G)
Tata Growth Fund (G)
Tata Mid Cap Fund (G)
Tata Dividend Yield Fund (G)
10 Tata Contra Fund (G) .
BABASAB PATIL
-54-
Tata Mutual Fund

S. No 1. 2. 3. 4. 5. 6. 7. 8. Scheme Name Principal Large Cap Fund (G) Principal Resurgent IEF (G) Fund Size Date 251.90 260.89 of Age of Fund class ED ED ED ED ED ED ED ED
inception 19/10/05 30/06/00 25/10/00 08/06/05 22/02/05 19/03/04 07/02/06 22/09/04
the fund 1.33 6.66 6.33 1.66 2 2.91 1 2.41
Principal Growth Fund (G) 260.03 Principal Junior Cap Fund (G) Principal Focussed Adv. (G) Principal Global Oppor (G) Principal Infra & Serv Ind (G) Principal Dividend Yield (G) 71.00 60.31 436.71 266.92 139.01
Principal Mutual Fund
HSBC Mutual Fund

BABASAB PATIL
-55-
4 Step: Absolute returns:

The selected funds returns from date of launch to date of inception Scheme Name
1. UTI Master Plus 91(G) 2. UTI Mastershare (G) 3. UTI Equity Fund (G) 4. UTI Master Value Fund (G) 5. Pru ICICI Dynamic Plan (G) 6. Pru ICICI Growth (G) 7. Pru ICICI Power (G) 8. Reliance Vision Fund (G) 9. Reliance Growth Fund (G) 10. HDFC Top 200 Fund G) 11. HDFC Equity Fund (G) 12. HDFC Capital Builder Fund (G) 13. Franklin India Opportunity. (G) 14. Franklin India Prima Plus (G) Scheme Name 15. Franklin India Blue chip (G) 16. Birla Advantage Fund (G) HSBC India Opportunities (G) 17. Birla Dividend Yield Plus (G) HSBC Equity Fund (G) 18. Magnum Global Fund (G) 19. Magnum Contra Fund (G) HSBC Midcap Equity Fund (G) 20. Magnum Multiplier Plus (G)
DOI NAV ()
1yr
13.8 7.8 -2.2 -5.4 23.4 14.5 15.6 13.7 17.1 12.3 15.3 2.5 16.9
2yr
98.8 66.8 64.9 44.2 143.4 105.9 116.6 100.3 124.8 104.4 119.8 69.4 124.5
3yr
4yr
62.79 33.08 30.86 27.23 63.59 89.80 78.11 171.46 259.81 105.32 144.18 59.74 24.20 133.87 Fund 124.12 Size 120.87 607.88 40.07
120.5 309.2 110.4 -121.3 313.5 90.5 389.1 258.5 -160.5 354.2 191.0 559.2 185.8 795.4 267.3 982.5 178.8 553.7 197.9 554.2 184.2 444.6 193.0 376.4
S. No 1. 2. 3.
21.5 116.1 170.3 469.2 Date of Age of the Fund 13.2 99.3 144.9 449.7 inception fund class 10.3 91.0 155.9 368.9 13/02/04 3 ED -2.6 45.0 98.7 -ED 770.8 790.3 ED 544.9 562.9 ED 541.5 471.0 --
936.53 03/12/02 4.16 41.40 17.3 148.9 380.9 35.71 15.1 133.6 334.2 311.51 11.2 03/05/05 50.92 139.8 1.75 260.9
21. DSP-ML Opportunities (G) 52.64 11.9 102.8 178.5 HSBC Advantage Fund 1,216.9016.0 27/01/06 1.08 4. 22. DSP-ML Equity India Fund (G 37.47 112.3 205.2 23. Kotak 30 (G) 65.64 12.1 106.9 176.2 24. Tata Equity Opp. Fund (G) 55.55 5.8 101.0 180.1 25. HSBC India Opportunities 27.13 21.6 109.7 198.8 (G)
BABASAB PATIL
-56-
26. HSBC Equity Fund (G)
68.72
16.7
91.1
164.3
--
By observing the absolute returns of the schemes we find that Reliance Growth Fund (G) is the one which is giving the good returns from the date of launch.
5th STEP: METHODOLOGY Returns Scheme Names

1. UTI Master Plus 91(G) 2. UTI Mastershare (G) 3. UTI Equity Fund (G) DOI NAV Annualized returns (%) (28/02/07) 62.79 33.08 30.86 1 yr 13.8 7.8 -2.2 2yr 41.0 29.2 28.4 3yr 30.2 28.1 30.3 4yr 32.6 -32.8 4 yrs Avg Rtn 29.4 21.7 22.33
BABASAB PATIL
-57-
4. UTI Master Value Fund (G)

5. 6. 8. 9. 10. 11. 12. 13. 14. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. Pru ICICI Dynamic Plan (G) Pru ICICI Growth (G) Reliance Vision Fund (G) Reliance Growth Fund (G) HDFC Top 200 Fund G) HDFC Equity Fund (G) HDFC Capital Builder Fund (G) Franklin India Opportunity. (G) Franklin India Prima Plus (G) Birla Advantage Fund (G) Birla Dividend Yield Plus (G) Birla Equity Fund(G) Magnum Global Fund (G) Magnum Contra Fund (G) Magnum Multiplier Plus (G) DSP-ML Opportunities (G) DSP-ML Equity Fund Kotak 30 (G) Tata Equity Opp. Fund (G) HSBC India Opportunities (G) HSBC Equity Fund (G)
7. Pru ICICI Power (G)
15. Franklin India Blue chip (G)
27.23 62.25 89.80 78.11 171.46 259.81 105.32 144.18 59.74 24.20 133.87 124.12 120.87 40.07 175.05 41.40 35.71 50.92 52.64 37.47 65.64 55.55 27.13 68.72
-5.4 52.5 14.5 15.6 13.7 17.1 12.3 15.3 2.5 16.9 21.5 13.2 10.3 -2.6 16.4 17.3 15.1 11.2 11.9 16.0 12.1 5.8 21.6 16.7
20.1 57.2 43.5 47.2 41.5 49.9 43.0 48.3 30.2 49.8 47.0 41.2 38.2 20.4 49.1 57.8 52.8 54.9 42.4 45.7 43.8 41.8 44.8 38.2
24.0 41.8 37.6 42.8 41.9 54.3 40.7 43.9 41.6 43.1 39.3 34.8 36.8 25.7 50.0 68.8 63.1 53.4 40.7 45.1 40.3 41.0 44.0 38.3
37.4 52.5 35.3 45.8 55.0 61.0 45.6 45.6 40.3 36.6 41.6 40.6 36.2 -46.1 54.2 54.8 45.2 46.0 45.0 41.7 ----
19.03 51 32.73 37.85 38.03 45.58 35.4 38.28 28.65 36.6 37.35 32.45 30.38 14.5 40.4 49.53 46.45 41.18 35.25 37.95 34.48 29.53 36.8 31.07
Market Return
Market Return Sensex 1 yr
22.60
2yr
43.50
3yr
35.00
4yr
30.80
Avg rtrn
32.98
BABASAB PATIL
-58-
Risk
Standard Deviation:
BABASAB PATIL
-59-
Scheme Names
DOI NAV
Annualized Returns (%) 4 1 yr 2 yr 3 yr 4 yr

30.2 28.1 30.3 24.0 41.8 37.6 42.8 41.9 54.3 40.7 43.9 41.6 43.1 39.3 34.8 36.8 25.7 50.0 68.8 63.1 53.4 40.7 45.1 40.3 41.0 44.0 38.3 32.6 -32.8 37.4 52.5 35.3 45.8 55.0 61.0 45.6 45.6 40.3 36.6 41.6 40.6 36.2 -46.1 54.2 54.8 45.2 46.0 45.0 41.7 ----
yr (SD)
Avg
13.8 7.8 -2.2 -5.4 52.5 14.5 15.6 13.7 17.1 12.3 15.3 2.5 16.9 21.5 13.2 10.3 -2.6 16.4 17.3 15.1 11.2 11.9 16.0 12.1 5.8 21.6 16.7 41.0 29.2 28.4 20.1 57.2 43.5 47.2 41.5 49.9 43.0 48.3 30.2 49.8 47.0 41.2 38.2 20.4 49.1 57.8 52.8 54.9 42.4 45.7 43.8 41.8 44.8 38.2 29.4 21.7 22.33 19.03 51 32.73 37.85 38.03 45.58 35.4 38.28 28.65 36.6 37.35 32.45 30.38 14.5 40.4 49.53 46.45 41.18 35.25 37.95 34.48 29.53 36.8 31.07 11.38 12.05 16.45 17.89 6.52 12.63 14.95 17.39 19.52 15.53 15.42 18.16 14.20 11.05 13.15 13.41 15.04 16.09 22.36 21.37 20.43 15.72 14.64 14.99 20.56 13.17 12.44
1. UTI Master Plus 91(G) 2. UTI Mastershare (G) 3. UTI Equity Fund (G) 4. UTI Master Value Fund (G)
5. 6. Pru ICICI Dynamic Plan (G) Pru ICICI Growth (G)
62.79 33.08 30.86 27.23 62.25
89.80 7. Pru ICICI Power (G) 78.11 8. Reliance Vision Fund 171.46
9. 10. 11. 12. 13. 14. (G) Reliance Growth Fund (G) HDFC Top 200 Fund G) HDFC Equity Fund (G) HDFC Capital Builder Fund (G) Franklin India Opportunity. (G) Franklin India Prima Plus (G)
259.81 105.32 144.18 59.74 24.20 133.87 124.12 120.87 40.07 175.05 41.40 35.71 50.92 52.64 37.47 65.64 55.55 27.13 68.72
15. Franklin India Blue chip (G)

16. Birla Advantage Fund (G) 17. Birla Dividend Yield Plus (G) 18. Birla Equity Fund(G) 19. Magnum Global Fund (G) 20. Magnum Contra Fund (G) 21. Magnum Multiplier Plus (G) 22. DSP-ML Opportunities (G) 23. DSP-ML Equity Fund
24. Kotak 30 (G)

25. Tata Equity Opp. Fund (G) 26. HSBC India Opportunities (G) 27. HSBC Equity Fund (G)
BABASAB PATIL
-60-
SD =
n X2 (X)2
n (n-1)
It is used to measure the variation in individual returns from the average expected returns over a certain period. Standard deviation is used in the concept of risk of a portfolio of investments. Higher standard deviation means a greater fluctuation in expected return.
BETA:
S.No Scheme Names

1. 2. 3. UTI Master Plus 91(G) UTI Mastershare (G) UTI Equity Fund (G)
4 Years avg Returns
Beta
0.45974 0.5195 0.51445
29.4 21.7 22.33
BABASAB PATIL
-61-
4. 5. 6. 7. 8. 9. 1 0. 1 1. 1 2. 1 3. 1 4. 1 5. 1 6.
UTI Master Value Fund (G)

Pru ICICI Dynamic Plan (G)
19.03 51
0.38752 0.04588 0.50621 0.53133
Pru ICICI Growth (G)
32.73 Pru ICICI Power (G)

Reliance Vision Fund (G)
37.85 38.03
0.42884 0.53642
Reliance Growth Fund (G)
45.58
HDFC Top 200 Fund G)
35.4
HDFC Equity Fund (G)
0.50859
38.28
HDFC Capital Builder Fund (G)
0.55997
28.65
Franklin India Opportunity. (G)
0.47609
36.6
Franklin India Prima Plus (G)
0.58826
37.35 Franklin India Blue chip (G) 32.45

Birla Advantage Fund (G)
0.43023
0.46015 0.48017
30.38
BABASAB PATIL
-62-
1 7. 1 8. 1 9. 2 0. 2 1. 2 2. 2 3. 2 4. 2 5. 2 6. 2
Birla Dividend Yield Plus (G)
14.5
Birla Equity Fund(G)
0.57688
40.4
Magnum Global Fund (G)
0.57362
49.53
Magnum Contra Fund (G)
0.74307
46.45
Magnum Multiplier Plus (G)
0.67269
41.18
DSP-ML Opportunities (G)
0.77797
35.25
DSP-ML Equity Fund
0.50358
37.95
Kotak 30 (G)
0.50899
34.48
Tata Equity Opp. Fund (G)
0.53857
29.53
HSBC India Opportunities (G)
0.87693
36.8
HSBC Equity Fund (G)
0.56432 0.52537
31.07
BABASAB PATIL
-63-
= Covar / m2
Where, Covariance (covar) is the average of the products of deviations for each data point pair. And, covar is calculated as:
Covar = 1/n (xi x)(yi - y)
m2 = Market Variance
Beta describes the relationship between the stocks return and the index returns. it describes the risk in the portfolio with comparing market risk as 1 . If beta =1 One percent changes in market index return causes exactly one percent change in the stock returns. it indicates that the stock moves in tandem with the market . If Beta <1 Then the stock is less volatile compared to the market. If Beta >1 Then the stock is more volatile compared to the market. The stock value With more then 1 beta value is considered to be risky. If Beta ve: native Beta indicates that the stock returns moves in the opposite direction to the market return.
Returns and risk for the top 10 companies having the highest portfolio returns (Rp).
BABASAB PATIL
-64-
Scheme Names
DOI nav
5 Avg Rtrn
yrs SD
Beta
1. Pru ICICI Dynamic Plan (G) 2. Magnum Global Fund (G) 3. Magnum Contra Fund (G) 4. Reliance Growth Fund (G) 5. Magnum Multiplier Plus (G) 6. Birla Equity Fund(G) 7. HDFC Equity Fund (G) 8. Reliance Vision Fund (G) 9. DSP-ML Equity Fund 10. Pru ICICI Power (G)
62.25 41.40 35.71 259.81 50.92 175.05 144.18 171.46 37.47 78.11
51 49.53 46.45 45.58 41.18 40.4 38.28 38.03 37.95 37.85
6.52 22.36 21.37 19.52 20.43 16.09 15.42 17.39 14.64 14.95
0.05 0.74 0.67 0.54 0.78 0.57 0.56 0.43 0.51 0.53
Sharpes Index:
Sharpes index measures the risk premium of the portfolio relative to the total amt of risk in the portfolio. This risk premium is the difference between the portfolios average rate of return and the risk less rate of return. The index assigns the highest values to assets that have best risk-adjusted average rate of returns.
Scheme Names
DOI NAV
4 Yr Avg
28/02/07
BABASAB PATIL
-65-
A study on Performance Evaluation of Mutual Funds with Reference to risk and return Rtrn
Rp
1. Pru ICICI Dynamic Plan (G) 2. Magnum Global Fund (G) 3. Magnum Contra Fund (G) 4. Reliance Growth Fund (G) 5. Magnum Multiplier Plus (G) 6. Birla Equity Fund(G) 7. HDFC Equity Fund (G) 8. Reliance Vision Fund (G) 9. DSP-ML Equity Fund 10. Pru ICICI Power (G) 62.25 41.40 35.71 259.81 50.92 175.05 144.18 171.46 37.47 78.11 51 49.53 46.45 45.58 41.18 40.4 38.28 38.03 37.95 37.85
Rf
5 5 5 5 5 5 5 5 5 5
Sd()
6.52 22.36 21.37 19.52 20.43 16.09 15.42 17.39 14.64 14.95
St
7.06 1.99 1.94 2.08 1.77 2.20 2.16 1.90 2.25 2.20
St =
Where, Rp Rf
Rp - Rf
Sd()
= Average portfolio returns = Risk free rate of rate (5%) Standard Deviation (Risk) of returns
Sd() =
Treynors Index:
Treynors index sums up the risk and return of the portfolio in a single number, while categorizing the performance of the portfolio.
Scheme Names
DOI NAV
4 Yr Avg Rtrn
28/02/07
Rp
51 49.53
Rf
5 5
Beta
0.05 0.74
Tr
1002.62 59.93
1. Pru ICICI Dynamic Plan 62.25 (G) 2. Magnum Global Fund (G) 41.40
BABASAB PATIL
-66-
3. Magnum Contra Fund (G) 4. Reliance Growth Fund (G) 5. Magnum Multiplier Plus (G) 6. Birla Equity Fund(G) 7. HDFC Equity Fund (G) 8. Reliance Vision Fund (G) 9. DSP-ML Equity Fund 10. Pru ICICI Power (G)
35.71 259.81 50.92 175.05 144.18 171.46 37.47 78.11
46.45 45.58 41.18 40.4 38.28 38.03 37.95 37.85
5 5 5 5 5 5 5 5
0.67 0.54 0.78 0.57 0.56 0.43 0.51 0.53
61.62 75.65 46.51 61.71 59.43 77.02 64.74 61.83
Tr =
Rp Rf
Tr = Treynors Performance index
Rp = Average portfolio returns Rf = Risk free rate of rate (5%)
p = A Measure of
systematic risk ( Co-efficient to be estimated)
Jensens Alpha index:
Scheme Names
1. Pru ICICI Dynamic Plan (G) 2. Magnum Global Fund (G) 3. Magnum Contra Fund (G) 4. Reliance Growth Fund (G) 5. Magnum
DOI NAV
28/02/07 62.25
Rp
Rf
BetaRm
Alfa
51 5 5 5 5 5 0.05 0.74 0.67 0.54 0.78 32.98 32.98 32.98 32.98 32.98
44.72 23.74 22.63 25.57 14.41
/
974.636 31.947 33.638 47.670 18.526
41.40 35.71 259.81
49.53 46.45 45.58
50.92
41.18
BABASAB PATIL
-67-
Multiplier Plus (G) 6. Birla Equity Fund(G) 7. HDFC Equity Fund (G) 8. Reliance Vision Fund (G) 9. DSP-ML Equity Fund 10. Pru ICICI Power (G) Where,
175.05 144.18 171.46 37.47 78.11
40.4 38.28 38.03 37.95 37.85
5 5 5 5 5
0.57 0.56 0.43 0.51 0.53
32.98 32.98 32.98 32.98 32.98
19.35 17.61 21.03 18.71 17.98
33.733 31.452 49.042 36.756 33.846
= ( Rp- Rf)-beta(Rm- Rf)
Rp = Average Portfolio Return Rf = Risk Free rate of interest (5%) = A measure of systematic risk Rm = Average Market Return
Performance evaluation for Top 10 equity diversified schemes on the basis of three Performance Indexes i.e., (Sharpes, Treynors and Jensens Performance Index).
Scheme Names
1. Pru ICICI Dynamic Plan (G) 2. Magnum Global Fund (G) 3. Magnum Contra Fund (G) 4. Reliance Growth Fund (G) 5. Magnum Multiplier Plus (G) 6. Birla Equity Fund(G)
NAV 28/02/07
62.25 41.40 35.71 259.81 50.92 175.05
Rp
51 49.53 46.45 45.58 41.18 40.4
Beta
0.05 0.74 0.67 0.54 0.78 0.57
SD
6.52 22.36 21.37 19.52 20.43 16.09
Sharpes Treynors
7.06 1.99 1.94 2.08 1.77 2.20 1002.62 59.93 61.62 75.65 46.51 61.71
Jensens
974.636 31.947 33.638 47.670 18.526 33.733
BABASAB PATIL
-68-
A study on Performance Evaluation of Mutual Funds with Reference to risk and return 7. HDFC Equity Fund (G) 8. Reliance Vision Fund (G) 9. DSP-ML Equity Fund 10. Pru ICICI Power (G) 144.18 171.46 37.47 78.11 38.28 38.03 37.95 37.85 0.56 0.43 0.51 0.53 15.42 17.39 14.64 14.95 2.16 1.90 2.25 2.20 59.43 77.02 64.74 61.83 31.452 49.042 36.756 33.846
RANKING OF SCHEMES
Ranking on the basis of Sharpes Performance index:

DOI NAV 28/02/07
62.25 37.47 175.05 78.11 144.18 259.81 41.40 35.71 171.46 50.92
Scheme Names
1. Pru ICICI Dynamic Plan (G) 2. DSP-ML Equity Fund 3. Birla Equity Fund(G) 4. Pru ICICI Power (G) 5. HDFC Equity Fund (G) 6. Reliance Growth Fund (G) 7. Magnum Global Fund (G) 8. Magnum Contra Fund (G) 9. Reliance Vision Fund (G) 10. Magnum Multiplier
Rp
51 37.95 40.4 37.85 38.28 45.58 49.53 46.45 38.03 41.18
SD
6.52 14.64 16.09 14.95 15.42 19.52 22.36 21.37 17.39 20.43
Sharpes Index
7.055 2.251 2.200 2.197 2.158 2.079 1.992 1.940 1.899 1.77
Rank
1 2 3 4 5 6 7 8 9 10
BABASAB PATIL
-69-
Plus (G)
Chart showing the performance according to Sharpes Index
Chart showing the performance according to Sharpe's Index
Pru ICICI Dynamic Plan (G) DSP-ML Equity Fund Birla Equity Fund(G) Pru ICICI Power (G) HDFC Equity Fund (G) Reliance Growth Fund (G) Magnum Global Fund (G) Magnum Contra Fund (G) Reliance Vision Fund (G)
8 7 6 Sharpe's Measure 5 4 3 2 1 0
Equity Diversified Schemes
Magnum Multiplier Plus (G)
BABASAB PATIL
-70-
According to Sharpes performance index Pru ICICI Dynamic Plan is the best Equity Diversified Scheme because this scheme is having the best risk-adjusted rate of return.
Ranking on the basis of Treynors index:
Scheme Names
1. Pru ICICI Dynamic Plan (G) 2. Reliance Vision Fund (G) 3. Reliance Growth Fund (G) 4. DSP-ML Equity Fund 5. Pru ICICI Power (G) 6. Birla Equity Fund(G) 7. Magnum Contra Fund (G) 8. Magnum Global Fund (G) 9. HDFC Equity Fund (G) 10. Magnum Multiplier Plus (G)
DOI RP NAV 28/02/07

62.25 171.46 259.81 37.47 78.11 175.05 35.71 41.40 144.18 50.92 51 38.03 45.58 37.95 37.85 40.4 46.45 49.53 38.28 41.18
Beta
0.05 0.43 0.54 0.51 0.53 0.57 0.67 0.74 0.56 0.78
Treynors Rank Index

1002.62 77.02 75.65 64.74 61.83 61.71 61.62 59.93 59.43 46.51 1 2 3 4 5 6 7 8 9 10
BABASAB PATIL
-71-
Chart showing the performance according to Treynors Index
Chart showing the performance according to Treynor's Index
1. Pru ICICI Dynamic Plan (G) 1. Reliance Vision Fund (G) 0 . Reliance Growth Fund (G) 1. DSP-ML Equity Fund
11 11 0000 Treynor's measure 000
0 . Pru ICICI Power (G) 000 000 000 0 Equity Diversified Schems 1. Birla Equity Fund(G) 0 . Magnum Contra Fund (G) 1. Magnum Global Fund (G) 0 . HDFC Equity Fund (G) 1 . Magnum Multiplier 1 Plus (G)
BABASAB PATIL
-72-
According to Treynors performance index Pru ICICI Dynamic Plan ranked as first best Equity Diversified Scheme because this scheme is having the best riskadjusted rate of return followed by Reliance Vision Fund (G).
Scheme Names
1. Pru ICICI Dynamic Plan (G) 2. Reliance Vision Fund (G) 3. Reliance Growth Fund (G) 4. DSP-ML Equity Fund 5. Pru ICICI Power (G) 6. Birla Equity Fund(G) 7. Magnum Contra Fund (G) 8. Magnum Global Fund (G) 9. HDFC Equity Fund (G) 10. Magnum Multiplier Plus (G)
DOI NAV 28/02/07

62.25 171.46 259.81 37.47 78.11 175.05 35.71 41.40 144.18 50.92
Rp
51 38.03 45.58 37.95 37.85 40.4 46.45 49.53 38.28 41.18
Jensens Measure
974.64 49.04 47.67 36.76 33.85 33.73 33.64 31.95 31.45 18.53
Rank
1 2 3 4 5 6 7 8 9 10
Ranking on the basis of Jensens Alfa Measure:
BABASAB PATIL
-73-
Chart showing the performance according to Jensen's performance measure
Chart showing the performance according to Jensen's Performance Measure
1200 1000 Jensen's Measure 800 600
1. Pru ICICI Dynamic Plan (G) 2. Reliance Vision Fund (G) 3. Reliance Growth Fund (G) 4. DSP-ML Equity Fund 5. Pru ICICI Power (G) 6. Birla Equity Fund(G)
400 200 0 Equity Diversified Schemes
7. Magnum Contra Fund (G) 8. Magnum Global Fund (G) 9. HDFC Equity Fund (G) 10. Magnum Multiplier Plus (G)
BABASAB PATIL
-74-
According to Jensens performance Measure, Pru ICICI Dynamic Plan ranked as first best Equity Diversified Scheme followed by Reliance Vision Fund (G).
Classification of Risk into Systematic (un-diversifiable) and Unsystematic (diversifiable)
Scheme Names
5 yrs SD Avg Rtrn
Beta ()
Systematic Risk (2*m2)
Unsystematic Risk (SD Systematic risk)
(% ) Systemat ic Risk
2.45
(%) UnSystematic Risk
1.
2.
3.
4.
5.
6. 7.
8.
Pru ICICI Dynami c Plan (G) Magnum Global Fund (G) Magnum Contra Fund (G) Reliance Growth Fund (G) Magnum Multipli er Plus (G) Birla Equity Fund(G) HDFC Equity Fund (G) Reliance Vision
51 6.52 49.53 22.36 46.45 21.37 0.67269 45.58 19.52 41.18 20.43 40.4 38.28 15.42 38.03 17.39 16.09 0.536 42 0.777 97 0.573 62 0.559 97 0.428 84
0.4525118
0.045 88 0.743 07
0.002105
6.3605499
97.55
0.552153
-19.465133
100.00
0.00
-12.907396
100.00
0.00
0.2877464
-2.2765522
100.00
0.00
0.6052373
-25.416225 -8.8344997 -8.3323946 3.4594439
100.00
0.00
0.3290399
100.00
0.00
0.3135664 0.1839037
100.00 80.11
0.00 19.89
BABASAB PATIL
-75-
Fund (G) DSPML Equity Fund Pru ICICI Power (G)
9.
37.95 14.64 37.85 14.95
0.508 99 0.531 33
0.2590708
-4.9843996
100.00
0.00
10.
0.2823116
-6.434867
100.00
0.00
When we consider the systematic and un-systematic risk Pru ICICI Dynamic (G) has got 2.45% of systematic risk and 97.55% of unsystematic risk and Reliance Vision Fund (G) 80.11% systematic risk and 19.89% of unsystematic risk. And other all schemes have got 0% of Unsystematic risk.
BABASAB PATIL
-76-
Finding and Suggestions:

According to the Absolute returns of the scanned Equity Diversified Schemes of the top listed AMCs, Reliance Growth Fund (G) is the one which is giving good returns from the date of launch. According to Sharpes performance Index we find that Pru ICICI Dynamic Plan (G) is ranked as 1st and DSP-ML Equity Fund as 2nd rank and Birla Equity Fund (G) as 3rd Rank. The Sharpes index considers total risk of the Scheme. According to Treynors Performance Index, Pru ICICI Dynamic Plan (G) is ranked as 1st followed by Reliance Vision Growth (G) (2nd Rank) and Reliance Growth Fund (G) (3rd Rank). The Treynors index considers the return premium for systematic risk undertaken. According to Jensens Performance Index, Pru ICICI Dynamic Plan (G) is ranked as 1st followed by Reliance Vision Fund (G) (2nd Rank) and Reliance Growth Fund (G) (3rd Rank). The Jensens index compares the actual or relized return of the portfolio with calculated return and hence depicts the predictive ability of the managerial personnel. According to all the three indexes Pru ICICI Dynamic Plan (G). is the best equity diversified scheme because this particular scheme is having the best risk adjusted rate of return. When we consider the systematic and un-systematic risk, Pru ICICI Dynamic (G) has got 2.45% systematic risk and 97.55% of unsystematic
BABASAB PATIL
-77-
risk and Reliance vision (G) 80.11% systematic risk and 19.89% of unsystematic risk. And other all schemes have 0% of Unsystematic risk which means that they are diversified to the fullest extent and the risk is only due to market factors.
Conclusion
The construction of the mutual fund schemes portfolio is done by taking various factors so even after evaluating the mutual funds and ranking them we cannot say which is the best scheme in all.
BABASAB PATIL
-78-
Bibliography UTI records

Text Books referred: Punithvathy. Pandian Fisher and Jorden
Web Sites: www.moneycontrol.com
www.amfiindia.com www.icicidirect.com
BABASAB PATIL
-79-

Performance Evaluation of Mutual Funds at UTI SECURETIES

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Performance Evaluation of Mutual Funds at UTI SECURETIES

Uploaded by

Copyright:

Available Formats

A study on Performance Evaluation of Mutual Funds with Reference to risk and return

OBJECTIVES OF THE STUDY

To evaluate the investment performance of mutual funds with risk

started in mutual funds.

Why invest in Mutual Funds.

Professional investment management

Convenience and Flexibility

Mutual fund route offers several important advantages.

Classification of Mutual Fund Schemes

A. Operational Classification or on Structural basis:

Growth and income:

Real estate funds:

C. Geographical Classification of Mutual Funds

1) Domestic Mutual Funds 2) Offshore Mutual Funds

Domestic Mutual Funds

Offshore Mutual Funds

Characteristics of Mutual Fund Schemes

Assurance of minimum returns:

PURPOSE OF THE STUDY

SCOPE OF THE STUDY

OBJECTIVES OF THE STUDY

To know the performance of Mutual Fund of different companies.

To evaluate the investment performance of mutual funds with risk

CONTENTS - Organization Profile - Date Collection Methods Measuring Tools

Mr. Gopalakrishnan Narayanan: Director

Shri A Rama Mohan Rao: Managing Director

Online "Bills & Accounts"

My Inbox - Maintain records of all Important notifications related to your account

Investment Banking and Advisory Services

Ethical and transparent conduct of business.

The Equity Capital Markets group offers the following services:

Measuring tools and Techniques:

Covar = 1/n (xi x)(yi - y)

Where, n = number of years X = rolling returns of the BSE index

Y = rolling returns of the schemes

SD= Standard Deviation of the port folio

The formula for Treynors Index is:

AUM AUM Absolute %Change 31/01/2007 31/12/2006 change

41622.51 35232.16 34636.90

37789.97 32664.03 3152.28

3832.54 2568.13 3064.62

10.14 7.86 9.71

4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

12/05/97 18/01/93 07/04/04

01/06/98 80.70 497.79 20/07/05 640.04 22/03/06 905.02

Fund Size 1,562.32

the fund 1.5 4.33 1.25

8.66 2.75 2.58

Pru ICICI Power (G)

Prudential ICICI Mutual Fund

of Age the fund

160.50 121.23 2,214.79 2,415.31 3,243.92 4,455.25

Reliance Mutual Fund

HDFC Mutual Fund

HDFC Capital Builder Fund (G)

30/11/1993 13.25 09/02/05 14/12/05 20/04/06 2 1.16 0.83

Franklin Templeton Mutual Funds

Birla Mutual Fund

Fund Size 396.18

of Age of the Fund fund 0.42 1 1.58 class ED ED ED

inception 08/09/2006 24/02/2006 12/07/2005

Birla India Opportunities (G) Birla Advantage Fund (G)

83.17 475.06 228.43 440.00