comparative analysis on mutual fund scheme mba project

8/12/2019 Comparative Analysis on Mutual Fund Scheme MBA Project

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Comparative Analysis on Mutual Fund Scheme

With reference to Sundaram finance Ltd.

Report submitted in partial fulfillment of

POS !RA"#A$ "%PLOMA %& MA&A!$M$&

C$R%F%CA$

This is to certify that '''''has completed the project titled (Comparative analysis

on the mutual fund scheme) from Sundaram finance Ltdunder my guidance

completed the project successfully, for the partial fulfillment of the course: Dissertation in

term= 3rdof the post Graduate Diploma in Management- XXXXX specialization !atch

XXXX"#

$%&'()*+G+M+'T

This project in itself is an acnoledgement to the inspiration, dri.e and .alua/le

guidance contri/uted to it /y many indi.iduals# This project ould ne.er ha.e /een the

light of day ithout the help and guidance that ha.e /een recei.ed#

0 ould lie to e1press my sincere appreciation and thans to ''''ho guided me all

throughout the summer training# 0t is under her .alua/le guidance, constant interest and

encouragement 0 ha.e completed this project# 2e de.oted his e.er-precious time from his

/usy schedule and helped in complete understanding of the mutual fund industry in 0ndia#


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inally 0 ould lie to than my professor '''', hose most .alua/le e1pertise as

training to me to /e success#

"$CLARA%O&

0, !#4anthosh &umar ,declare in full consciousness that this has /een carried out /y me is

original and in no ay has /een copied or is reproduction of any prior e1isting or#


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"ate*

Si+nature

Place*


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CO&$&S*,

C-AP$R %

0ntroduction

4cope of study

'eed for study

(/jecti.e

Methodology

Data %ollection

4ampling

4ampling techni5ue

Tools used

*imitations of the study

C-AP$R %%

0ndustry 6rofile

%ompany profile

C-AP$R %%%

Theory of the study

C-AP$R %

Data analysis and interpretation

C-AP$R

indings, conclusion, suggestions


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C-AP$R

/

Introduction

Scope of the study

Need for study

Objective

Methodology -

Data collection and processing

Sampling technique

Sam palling technique

Tools used

imitations of the study


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Mutual fund: $n 0ntroduction

$ mutual fund is a form of collecti.e in.estment# 0t is a pool of money collected from

.arious in.estors hich is in.ested according to the stated in.estment o/jecti.e# The fund

manager is the person ho in.ests the money in different types of securities according tothe predetermined o/jecti.es# The portfolio of a mutual fund is decided taing into

consideration this in.estment o/jecti.e# Mutual fund in.estors are lie shareholders and

they on the fund# The income earned through these in.estments and the capital

appreciation realized /y the scheme is shared /y its unit holders in proportion to the

num/er of units oned /y them# The .alue of the in.estments can go up or don,

changing the .alue of the in.estors holding# Mutual funds are one of the /est in.estments

e.er created /ecause they are .ery cost efficient and .ery easy to in.est in#

The in.estment in securities through mutual funds is spread across ide range of

industries and sectors and thus the ris is reduced# Di.ersification reduces the ris

/ecause all stocs may not mo.e in the same direction at the same time# 7arious fund

houses issue units to the in.estors in accordance ith the 5uantum of money in.ested /y

them# 0n.estors of mutual funds are non as unit holders#

0n 0ndia a mutual fund is re5uired to /e registered ith 4ecurities +1change !oard of

0ndia 84+!09 hich regulates the securities maret#

$D7$'T$G+4 ( 0'7+4T0'G 0' MT$* 'D4:

There are se.eral that can /e attri/uted to the groing popularities and suita/ility of

mutual funds as an in.estment .ehicle especially for retail in.estors#


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6rofessional management:

Mutual funds pro.ide the ser.ices of e1perienced and silled professionals, /aced /y a

dedicated in.estment research team that analysis the performance and prospects of

companies and selects suita/le in.estments to achie.e the o/jecti.es of the scheme#

Di.ersification:

Mutual funds in.est in a num/er of companies across a /road cross- section of industries

and sectors# This di.ersification reduces the ris /ecause seldom do all stocs decline at

the sane time and in the same proportion# ;ou achie.e this di.ersification through a

mutual fund ith far less money than you can do on your on#

%on.enient administration:

0n.esting in a mutual fund reduces paperor and helps you a.oid many pro/lems such

as /ad deli.eries, delayed payment and follo up ith /roers and companies# Mutualfunds sa.e your time and mae in.esting easy and con.enient#


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*o costs:

Mutual funds are a relati.ely less e1pensi.e ay to in.est compared to directly in.esting

in the capital marets /ecause the /enefits of scale in /roerage, custodial and other fees

translate into loer costs for in.estors#

*i5uidity:

0n open ended schemes, the in.estors get the money /ac promptly at net asset .alue

related prices from the mutual fund# 0n closed end schemes, the units can /e sold on a

stoc e1change at the pre.ailing maret price or the in.estor can a.ail of the facility of

direct repurchase at '$7 related prices /y mutual fund#

Transparency:

;ou get regular information on the .alue of your in.estment in addition to disclosure on

the specific in.estments made /y your scheme, the proportion in.ested in each class of

assets and the fund managers in.estment strategy and outloo#

le1i/ility:

Through features such as regular in.estment plans, regular ithdraal plans and di.idend

rein.estment plans, you can systematically in.est or ithdra funds according to yourneeds and con.enience#

$fforda/ility:

0n.estors indi.idually may lac sufficient funds to in.est in high-grade stocs# $ mutual

fund /ecause of its large corpus allos e.en a small in.estor to tae the /enefit of its

in.estment strategy#

%hoice of schemes:

Mutual funds offer a family of schemes to suit your .arying needs o.er a lifetime#

0mportance of Mutual und:


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4mall in.estors face a lot of pro/lems in the share maret, limited resources, lac of

professional ad.ice, lac of information etc# Mutual funds ha.e come as a much needed

help to these in.estors# 0t is a special type of institutional de.ice or an in.estment .ehicle

through hich the in.estors pool their sa.ings hich are to /e in.ested under theguidance of a team of e1perts in ide .ariety of portfolios of corporate securities in such

a ay, so as to minimize ris, hile ensuring safety and steady return on in.estment# 0t

forms an important part of the capital maret, pro.iding the /enefits of a di.ersified

portfolio and e1pert fund management to a large num/er, particularly small in.estors#

'o days, mutual fund is gaining its popularity due to the folloing reasons#

)ith the emphasis on increase in domestic sa.ings and impro.ement in deployment of

in.estment through marets, the need and scope for mutual fund operation has increased

tremendously#

The /asic purpose of reforms in the financial sector as to enhance the generation of

domestic Tripathy, Mutual und in 0ndia: $ inancial 4er.ice in %apital # # # >?"

resources /y reducing the dependence on outside funds# This calls for a maret /ased

institution hich can tap the .ast potential of domestic sa.ings and chanalise them for

profita/le in.estments# Mutual funds are not only /est suited for the purpose /ut alsocapa/le of meeting this challenge#

$n ordinary in.estor ho applies for share in a pu/lic issue of any company is not

assured of any firm allotment# !ut mutual funds ho su/scri/e to the capital issue made

/y companies get firm allotment of shares# Mutual fund latter sell these shares in the same

maret and to the 6romoters of the company at a much higher price# 2ence, mutual fund

creates the in.estors confidence#

The phyche of the typical 0ndian in.estor has /een summed up /y Mr# 4# $# Da.e,%hairman of T0, in three ords@ ;ield, *i5uidity and 4ecurity# The mutual funds, /eing


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companies# 4ince different companies come out ith similar themes in the same season, it

/ecomes crucial for the company to constantly perform ell so as to sur.i.e the

competition and pro.ide ma1imum capital appreciation or return as the case may /e#

(ther than the maret the performance of the fund depends on the ind of stoc chosen

/y the fund managers of the company#

The analysis is done on the performance of funds ith the same theme or sector and

reason out hy a fund performs /etter than the others in the lot#

'++D (< T2+ 4TD;:

The study first tries to understand the composition of the selected funds hich determines

the scope of performance for the funds, folloed /y use of ratios that are rele.ant in5uantifying and understanding the ris and return relationships for each mutual fund

scheme under consideration# Then a comparati.e analysis of the mutual fund schemes is

done to see hich fund has performed the /est#

This study is significant to the company as it loos into the minute details that

differentiate the performances of funds of different companies ith same theme or sector

under similar maret conditions# This ould help the company to de.elop#

(!C+%T07+4 ( T2+ 4TD;:

To understand the unctions of an $sset Management %ompany

To understand the performances of .arious schemes using .arious tools to measure the

performances#

To measure and compare the performance of selected mutual fund schemes of different

mutual fund companies and other $sset Management %ompanies#

M$-O"OLO!0*

"ata collection:


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The data re5uired for the study may /e collected either from primary sources or from

secondary sources# $ major portion of the data in this study has /een collected through

secondary sources of data#

4econdary data sources include:

6u/lished material and annual reports of mutual fund companies

(ther pu/lished material of mutual funds#


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# !irla !ond 0nde1 und F Groth

E# 2D% 2igh 0nterest und F Groth

3# 0%0%0 6rudential !lended 6lan - (ption ! F Groth

# 4undaram !'6 6ari/as fund- Groth

!alanced fund:

# !irla !alance und F Groth

E# 2D% !alanced und F Groth

3# 0%0%0 6rudential !alanced F Groth

# 4undaram !'6 6ari/as /alanced- Groth

or the purpose of estimating the performance of schemes in terms of returns, '$7 of the

schemes are taen into consideration# $s data relating to '$7 is a.aila/le more

fre5uently than any other data it is taen as the /asis for estimation#

6eriod of the 4tudy:

The study co.ered a period of 3 years from EAAH to EAA> to assess the performance of the

schemes in terms of returns#

Tools I Methods:

!eta:

0t descri/es the relationship /eteen the stocs return and the inde1 returns# The /eta

.alue may /e interpreted in the folloing manner, Ja K change in 'ifty inde1 ould

cause a #AEK /eta" change in the particular fund# 0t is the slope of characteristic

regression line#

0t signifies that a fund ith a /eta of more than ill rise more than the maret and also

fall more than maret# Thus, if one lies to /eat the maret on the upside, it is /est to

in.est in a high-/eta fund# !ut one must eep in mind that such a fund ill also fall more

than the maret on the ay don# 4o, o.er an entire cycle, returns may not /e much

higher than the maret#

4imilarly, a lo-/eta fund ill rise less than the maret on the ay up and lose less onthe ay don# )hen safety of in.estment is important, a fund ith a /eta of less than one


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is a /etter option# 4uch a fund may not gain more than the maret on the upside, /ut it

ill protect returns /etter hen maret falls#

)here,

n F 'um/er of days

1 F


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1 F Mean .alue of returns of the inde1

N F !eta .alue of the fund

%orrelation %o-efficient:

0t measures the nature and the e1tent of relationship /eteen the stoc maret inde1

returns and a funds return in a particular period#

%o-efficient of Determination:

The s5uare of correlation of co-efficient is the co-efficient of determination# 0t gi.es the

percentage .ariation in the stocs return e1plained /y the .ariation in the maret return#

rE

Treynors


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in.estment or portfolio to determine the potential range of future performance and assess

the pro/a/ility of that performance# 4tandard de.iations can /e calculated for an

indi.idual security or for the entire portfolio

7ariance:

7ariance: 7ariance = sE

1ensen Ratio 21R3*

$ ris-adjusted performance measure that represents the a.erage return on a portfolio

o.er and a/o.e that predicted /y the capital asset pricing model %$6M", gi.en the

portfolioLs /eta and the a.erage maret return# This is the portfolioLs alpha# 0n fact, the

concept is sometimes referred to as PCensenLs alpha#P

Q

Censen


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0ndustry 6rofile

%ompany 6rofile

%&"#SR0 PROF%L$

olloing diagram gi.es the structure of 0ndian financial system:


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0'D4T


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0'D4T


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modern concept of mutual funds# The 4$ is, hoe.er, considered to /e the Mecca of

modern mutual funds# !y the early - R3As 5uite a large num/er of close - ended mutual

funds ere in operation in the #4#$# Much latter in RH, the committee on finance for

the pri.ate sector recommended mo/ilization of sa.ings of the middle class in.estors

through unit trusts# inally in Culy RB, the concept too root in 0ndia hen nit Trust of

0ndia as set up#

0'D0$' MT$* 'D 0'D4TB hen the T0 monopoly as /roen hen 4!0 and %an /an mutual fundentered the arena# This as folloed /y the entry of others lie !(0, *0%, G0%, etc#


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sponsored /y pu/lic sector /ans# 4tarting ith an asset /ase of ?:

nit Trust of 0ndia T0" as esta/lished on RB3 /y an $ct of 6arliament# 0t as set up

/y the


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4econd 6hase F R>?-RR3 +ntry of 6u/lic 4ector unds":

R>? mared the entry of non- T0, pu/lic sector mutual funds set up /y pu/lic sector

/ans and *ife 0nsurance %orporation of 0ndia *0%" and General 0nsurance %orporationof 0ndia G0%"# 4!0 Mutual und as the first non- T0 Mutual und esta/lished in Cune

R>? folloed /y %an/an Mutual und Dec >?", 6unja/ 'ational !an Mutual und

$ug >R", 0ndian !an Mutual und 'o. >R", !an of 0ndia Cun RA", !an of !aroda

Mutual und (ct RE"# *0% esta/lished its mutual fund in Cune R>R hile G0% had set up

its mutual fund in Decem/er RRA

$t the end of RR3, the mutual fund industry had assets under management of


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under the rules framed /y Go.ernment of 0ndia and does not come under the pur.ie of

the Mutual und


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E# $0G Glo/al 0n.estment Group

Mutual und'O$ 'O$ 'O$ 'O$

3# !enchmar Mutual und B?>H#B A H3EH>#AR A

# !irla 4un *ife Mutual und E3?RB#3? RAH#? E???AA#H> >RA#B

H# !(! Mutual und R?HR# A AER#EE AB# %an /an Mutual und ERAA#R A EB?AR#RE A

?# D!4 %hola Mutual und E?3A>#RR A E??#E> A

># Deutsche Mutual und ?E>3B>#H A ?>>3?#? A

R# D46 Merrill *ynch Mutual

und>H3E>#> A ?B3H#?> A

A# +scorts Mutual und 3E?#H A ?H# A

# idelity Mutual und >>3>#?3 3BH#>B >3?H#> ?B#H3

E# ranlin Templeton Mutual

und

EBE?B3H#? 3AB3B#E EH3BR?#HR 3A#H

3# 2D% Mutual und3BBBB#? A 33>>>EA#>B A

# 24!% Mutual und H>HB#A> A 3HA> A

H# 0%0%0 6rudential Mutual und HA?A3AA# 3RA?#3> HRR>B#R 3>?A#

B# 0'G 7ysya Mutual und H??>B#3B >>?#3E H33H#H? >3HB#

?# CM inancial Mutual und 3??ER#? A 3HA>>#3 A

># C6 Morgan Mutual und 'O$ 'O$ 'O$ 'O$

R# &ota Mahindra Mutual und B?EEHH#HB HA>#EE HH33#B3 HEBE>#AB

EA# *0% Mutual und RRAE#E A RBRE>E#HH AE# *otus 0ndia Mutual und 3BE3#>3 A E>AHRB#? A

EE# Morgan 4tanley Mutual und 3>ABB#R A 3AAAH#3R A

E3# 6#B3 A >RRBRH#AB A

3A# Tata Mutual und A>>>#>B A 3H3>#A? A

3# Taurus Mutual und 3AH?#E3 A 3AR>#?H A

3E# T0 Mutual und AA?AB#>? A 3B???E3#3R A

Grand Total ?BA#B E?B#33 3>B3>E>H#B EBB?#H


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M$


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# $!' $ME

# !irla 4un *ife Mutual und H#B3BE3H# !(! Mutual und A#AEBHEBA?3

B# %an/an Mutual und A#BREBE3?

?# D!4 %hola Mutual und A#H>AEHEE

># Deutsche Mutual und #>BAE?RB3

R# D46 Merrill *ynch Mutual und 3#AHA>EB

A# +scorts Mutual und A#A3A3EA>A?

# idelity Mutual und E#>H33B

E# ranlin Templeton Mutual und B#HB?EBAEE

3# 2D% Mutual und >#??ABERHR

# 24!% Mutual und 3#RH>>?R

H# 0%0%0 6rudential Mutual und #RA3RBA33

B# 0'G 7ysya Mutual und #HEH?HRAH

?# CM inancial Mutual und A#RA?AABE

># C6Morgan Mutual und

R# &ota Mahindra Mutual und 3#?B>>AE

EA# *0% Mutual und E#HA>BABHH

E# *otus 0ndia Mutual und A#?EBEE?>H

EE# Morgan 4tanley Mutual und A#>AE3EBR>

E3# 6HABB?B

3A# Tata Mutual und 3#>RAH3# Taurus Mutual und A#A?>H?H>3

3E# T0 Mutual und R#H>33RR>>

COMPA&0 PROF%L$


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The %ompany as incorporated in RH, ith the o/ject of financing the purchase of

commercial .ehicles and passenger cars#

The company as started ith a paid-up capital of


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Company -ierarchy

Organizational Hierarchy

Managing Director

Chief Executive Officer

Directors

Vice President

National Head

Zonal Head

Regional Head

erritory Manager

!ssistant Manager

rainee Manager

Mana+erial Functions

"ales

#ranch

Re+ional Sales Mana+er 4ranch

Mana+er

erritory Mana+er

Re+ional

Mana+er

Assistant Mana+er


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C-AP$R

000

Theory of the study


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Types of Mutual unds:

Mutual fund schemes may /e classified on the /asis of its structure and its in.estment

o/jecti.e#

!y 4tructure:

Open,end Funds: $n open-end fund is one that is a.aila/le for su/scription all through

the year# These do not ha.e a fi1ed maturity# 0n.estors can con.eniently /uy and sell

units at 'et $sset 7alue P'$7P" related prices# The ey feature of open-end schemes is

li5uidity#

Closed,end Funds: $ closed-end fund has a stipulated maturity period hich generally

ranging from 3 to H years# The fund is open for su/scription only during a specified

period# 0n.estors can in.est in the scheme at the time of the initial pu/lic issue and

thereafter they can /uy or sell the units of the scheme on the stoc e1changes here they

are listed# 0n order to pro.ide an e1it route to the in.estors, some close-ended funds gi.ean option of selling /ac the units to the Mutual und through periodic repurchase at

'$7 related prices# 4+!0


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short-term instruments such as treasury /ills, certificates of deposit, commercial paper

and inter-/an call money#


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%hanges in the ta1 las, trade regulations, administrated prices, etc are some of the many

political factors that create maret ris# $lthough collecti.ely, as citizens, e ha.e

indirect control through the poer of our .ote indi.idually, as in.estors, e ha.e .irtually

no control#

0nflation ris:

0nterest rate ris relates to futures changes in interest rates# or instance, if an in.estor

in.ests in a long F term de/t mutual fund scheme and interest rates increase, the '$7 of

the scheme ill fall /ecause the scheme ill /e end up holding de/t offering loer

interest rates#

!usiness ris:

!usiness ris is the uncertainty concerning the future e1istence, sta/ility, and profita/ility

of the issuer of the security# !usiness ris is inherent in all /usiness .entures# The future

financial sta/ility of a company cannot /e predicted or guaranteed, nor can the price of its

securities# $d.erse changes in /usiness circumstances ill reduce the maret price of the

companys e5uity resulting in proportionate fall in the '$7 of the mutual fund scheme,

hich has in.ested in the e5uity of such a company#

+conomic ris:

+conomic ris in.ol.es uncertainty in the economy, hich, in turn, can ha.e an ad.erse

effect on a companys /usiness# or instance, if monsoons fail in a year, e5uity stocs of

agriculture F /ased companies ill fall and '$7s of mutual funds, hich ha.e in.ested

in such stocs, ill fall proportionately#

T$X !+'+0T4:-

The ta1man has o.er the years, /een more or less ind to mutual funds, ith las .arying

from time to time@ the o.erall o/jecti.e has /een to encourage the groth of the mutual

funds industry# %urrently, a .ariety of ta1 las apply to mutual funds, hich are /roadly

listed /elo:

%apital gains:


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nits of mutual fund schemes held for a period more than E months are treated as long

term capital assets# 0n such cases, the unit holder has the option to pay capital gains ta1 at

either EAK ith inde1ation" or AK ithout inde1ation#

Ta1 deducted at source:

or any income credited or paid /y a fund, no ta1 is deducted or ithheld at source# The

rele.ant sections in the income ta1 act go.erning this pro.ision are section R& and

RB$#

)ealth ta1:

Mutual fund units are not currently treated as assets under section E of the ealth ta1 actand are therefore not lia/le to ta1#

0ncome from units:

$ny income recei.ed from units of the schemes of the mutual fund specified under

section E3D" is e1empt under section A33" of the act# )hile section AE3D" e1empts

income of specified mutual funds from ta1 hich currently includes all mutual funds

operating in 0ndia", section A33" e1empts income from funds in the hands of the unitholder# 2oe.er, this does not mean that there is no ta1 at all on income distri/utions /y

mutual fund#

0ncome distri/ution ta1:

$s per pre.ailing ta1 las, income distri/uted /y schemes other than open-end e5uity

schemes is su/ject to ta1 at EAK plus surcharge of AK"# or this purpose, e5uity

schemes ha.e /een defined to /e those schemes that ha.e more than HAK of their assetsin the form of e5uity# (pen-end e5uity schemes ha.e /een left out of the pur.ie of this

distri/ution ta1 for a period of three years /eginning from $pril RRR#


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"ifferent Modes of Receivin+ the %ncome $arned From Mutual Fund %nvestments

Mutual funds offer three methods of recei.ing income:

Groth plan:

0n this plan, di.idend is neither declared or paid out to the in.estor /ut is /uilt into the

.alue of the '$7# 0n other ords, the '$7 increases o.er time due to such incomes andthe in.estor realizes only the capital appreciation on redemption of his in.estment#

0ncome funds:

0n this plan, di.idend are paid outs to the in.estor# 0n other ords, the '$7 only reflects

the capital appreciation or depreciation in maret price of the underlying portfolio#

Di.idend re-in.estment plan:

0n this case, di.idend is declared /ut not paid out to the in.estor, instead, it is rein.ested

/ac into the scheme at the then pre.ailing '$7# 0n other ords, the in.estor is gi.en

additional units and not cash as di.idend#

'et asset .alue '$7"

The net asset .alue of the fund is the cumulati.e maret .alue of the asset fund net of its

lia/ilities# 0n other ords, if the fund is dissol.ed or li5uidated, /y selling off all the

assets in the fund, this is the amount that the shareholders ould collecti.ely on# This

gi.es ride to the concept of net asset .alue per unit, hich is the .alue, represented /y the

onership of one unit in the fund# 0t is calculated simply /y di.iding the net asset .alue of

the fund /y the num/er of units# 2oe.er, most people refer loosely to the '$7 per unit

as '$7, ignoring the per unitU# )e also a/ide /y the same con.ention#


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CALC#LA%O& OF &A

The most important part of the calculation is the .aluation of the assets oned /y the

fund# (nce its is calculated, the '$7 is simply the net .alue of assets di.ided /y the

num/er of units outstanding# The detailed methodology for the calculation of the asset

.alue is gi.en /elo#

$sset .alue is e5ual to

4um of maret .alue of sharesOde/entures

Vli5uid assetsOcash held, if any

Vdi.idendOinterest accrued

$mount due on unpaid assets

+1penses accrued /ut not paid

Details on the a/o.e items:

or li5uid sharesOde/entures, .aluation is done on the /asis of the last or closing maret

price on the principal e1change here the security is traded#

or illi5uid and unlisted andOor thinly traded sharesOde/entures, the .alue has to /e

estimated# or shares, this could /e the /oo .alue per share or an estimated maret price#

0f suita/le /enchmars are a.aila/le# ore de/entures and /onds, .alue is estimated on the

/asis of yields of compara/le li5uid securities after adjusting for illi5uidity# The .alue of

fi1ed interest /earing securities mo.es in a direction opposite to interest rate changes

.aluation of de/entures and /onds is a /ig pro/lem since most of them are unlisted and

thinly traded# This gi.es considera/le leeay to the $M%s on .aluation and some of the

$M%s are /elie.ed to tae ad.antage of this and adopt fle1i/le .aluation policies

depending on the situation#


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0nterest is paya/le on de/enturesO/onds on periodic /asis say e.ery B months# !ut, ith

e.ery passing day, interest is said to /e accrued, at the daily interest rate, hich is

calculated /y di.iding the periodic interest payment ith the num/er of days in each

period#

Thus, accrued interest on a particular day is e5ual to the daily interest rate multiplied /ythe num/er of days since the last interest payment date#

sually, di.idends are proposed at the time of annual general meeting and /ecome due on

the record date# There is a gap /eteen the dates on hich it /ecomes due and the actual

payment date# 0n the immediate period, it is deemed to /e $ccruedU# +1penses including

management fees, custody charges etc# $re calculated on daily /asis#


39/83

M##AL F#&" %&$S%&! SRA$!%$S

4ystematic in.estment plan 406s":

These are /est suited for young people ho ha.e started there careers and needs to /uilt

there ealth# 4ips entail the in.estor to in.est a fi1ed sum of money at regular inter.als in

the mutual fund schemes the in.estor as chosen, an in.estor opting for sip in 1yz mutual

fund scheme ill need to in.est certain sum on money e.ery monthO5uarterOhalf yearly in

the scheme# !y in.esting through sip, one ends up /uying more units hen the price is

lo and feer units hen the price is high# 2oe.er, o.er a period of time these maret

fluctuations are generally a.eraged# $nd the a.erage cost of the in.estment is oftenreduced# 0t is far /etter to in.est small amount of money regularly, rather than sa.e up to

mae a large in.estment# This is /ecause hile sa.ing is in the lump sum, it may not earn

much interest#

4ystematic ithdraal plan 4)6s":

These plans are suited for people nearing retirement #0n these plans, an in.estor in.est in a

mutual fund scheme and is alloed to ithdra a fi1ed sum of money at regular inter.als

to tae care of its e1penses#

4ystematic transfer plan 4T6s":

They allos in.estor to transfer on a periodic /asis a specified amount from one scheme

to another ithin the same fund family- meaning to schemes /elonging to the same

mutual fund# $ transfer ill /e treated as redemption of units from the scheme from

hich the transfer is made# 4uch redemption or in.estment ill /e at the applica/le '$7#This ser.ice allos the in.estor to manage his in.estments acti.ely to achie.e his

o/jecti.es# Many funds do not e.en charge any transaction fees for his ser.ice- an added

ad.antage for the acti.e in.estor#


40/83

%2$6T+R

!irla $d.antage und F Groth

0n.estment informationund Type (pen- +nded

0n.estment 6lan Groth

$sset 4ize


43/83

2D% +5uity und F Groth

0n.estment 0nformation

und Type (pen- +nded


$sset 4ize


44/83


45/83

+S0T; 'D ('+ M('T2 %(M6$


46/83

"$%%E"&ON"'

a" or in.estor ith high ris appetite go for: 4undaram !'6 6ari/as - Groth

/" or in.estor ith moderate ris appetite: Go for 0%0%0 6rudential Dynamic 6lan -Groth

c" or in.estor ith lo ris appetite: 2D% +5uity und - Groth

+S0T; 'D 40X M('T24 %(M6$


47/83

"$%%E"&ON"'

a" or in.estor ith high ris appetite go for: !irla $d.antage und - Groth

/" or in.estor ith moderate ris appetite: Go for 2D% +5uity und F Groth

c" or in.estor ith lo ris appetite: 4undaram !'6 6ari/as Groth

Sundaram 4&P Paribas fund 2!ro?th3

"A$ S@P

C&'

&%F0

R$#R&

2'3

&A R$#R&

203

'9 09 '0 20,0/3 20,0

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H

3#HE

R

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AH

EB3A#A

H

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E

EB#H?AB B?H#3H ?AH#RRR

E

BRA#HAE H#BE?R>E

E#

-e/-

AB

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H

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R

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3B#B

B

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H

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B3#

OAL 75.79866 76.86=78 /77>.66 95=5.5> /7>


48/83

8 7 57

CALC#LA%O& OF A4O$ A4L$

4eta Alfa Standard

"eviation

Coefficient of

determination

Sharpe

ratio

2SR3

reynor

Ratio

2R

1ensen

Ratio

21R3

5.7599 /.69:7: /5.96>7 5.7:77 6.>:599 76.>977: 9.59>/

&ote 2% have taen RF benchmar 7.: the fiBed deposit of ban interest the days

duration is = year3

4irla Advanta+e Fund D !ro?th

"A$ S@P

C&'

&%F0

R$#R&

2'3

&A R$#R&

203

'9 09 '0 20,0/3 20,039

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H BB#>B

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49/83

-e/-

A?

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3 3H#E

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75.79866

69.=7>

9

/7/7.5>

/

69.=7>777

8 //8=.=


4eta Alfa Standard

"eviation

Coefficient of

determination

Sharpe

ratio

2SR3

reynor

Ratio

2R

1ensen

Ratio

21R3/.556 ,/.59: //.99= ,/.5/>6


duration is = year3


50/83

-"FC $Euity Fund D !ro?th

"A$ S@P

C&'

&%F0

R$#R&

2'3

&A R$#R&

203

'9 09 '0 20,0/3 20,

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H ?#?>

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AH

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OAL

75.79866

78.899

76.86=7

8

9=5=.6:

9

9576.76

/ 78.89/< /=5


4eta Alfa Standard

"eviation

Coefficient of

determination

Sharpe

ratio

2SR3

reynor

Ratio

2R

1ensen

Ratio

21R3

/.5:7 ,5./> /9.55 5.7>9.:


51/83


duration is = year3

%C%C% Prudential "ynamic Plan D !ro?th

"A$ S@P

C&'

&%F0

R$#R&

2'3

&A R$#R&

203

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H

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EB#H?AB

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H

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> 3#?>R

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3 A#H3EH

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> A#R33

? -3#ERB3

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AB

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B#3BR? E3#H>E

E3#HBRHH -H#ER3 E?#RRB


52/83


53/83

-"FC eEuity

fund,!ro?th

/.5:7 ,5./> /9.55 5.7>9.:6

Sundaram

4&P Paribas,

!ro?th

5.759

9

/.69:7

:

/5.96>7 5.7:77 6.>:599 76.>977

:

9.59>/

Alpha @ 4eta*

The a/o.e ta/le shos that 0%0%0 6rudential dynamic plan-Groth fund is comparati.ely

more .olatile ith a /eta of , A#R?3 though compared to the maret all the funds are

safer to in.est# $nd also the alpha .alues of fe funds are positi.e and fe funds are

negati.e# 0%0%0 6rudential dynamic plan-Groth is shoing an alpha of E#>E hich

suggests that the fund is ell di.ersified and 5uite efficient in reducing the impact of

maret ris#

Co,efficient of "etermination*

$ll company is ha.ing positi.e coefficient of determination

Sharpes Ratio @ reynors Ratio*

4harp 0n the a/o.e ta/le, the Treynors ratio for !irla $d.antage und - Groth folloed

/y 0%0%0 6rudential Dynamic 6lan - Groth and then 2D% +5uity und - Groth# 0t

suggests that !irla $d.antage und - Groth is gi.ing highest returns o.er the ris free

returns after taing the maret ris in to account# (n the other hand 2D% e5uity fund-

Groth is gi.ing the loest returns# The sharpes ratio of !irla $d.antage und - Groth

fund highest suggesting that after taing the total ris in to consideration the fund is

gi.ing good return return o.er and a/o.e the ris free returns#

rom the a/o.e it can /e suggested that 2D% e5uity fund-Groth can /e ruled out of

in.estment decision alternati.e# $mong the other three funds !irla is gi.ing higher

returns taing loer ris as compared to 4undaram !'6 6ari/as-Groth and 0%0%0, and

2D% hich is gi.ing loer returns#

De/t und

Sundaram 4&P Paribas 4ond Saver 2!3*


54/83


und Type (pen-+nded


$sset 4ize


55/83


und Type (pen-+nded


$sset 4ize5/8 ,5.//7=7


56/83


und Type (pen-+nded


$sset 4ize


57/83

4irla 4ond %ndeB Fund D !ro?th*


und Type (pen-+nded


$sset 4ize


58/83

D+!T 'D ('+ M('T2 %(M6$


59/83

a"or in.estor ith high ris appetite go for 4undaram !'6 6ari/as /ond sa.er-Groth

/"or in.estor ith moderate ris appetite: Go for 2D% 2igh 0nterest und - Groth

c"or in.estor ith lo ris appetite: 0%0%0 6rudential !lended 6lan - (ption ! F Groth

D+!T 'D 40X M('T24 %(M6$


60/83

"$%%E"&ON"'

a"or in.estor ith high ris appetite go for 2D% 2igh 0nterest und F Groth

/"or in.estor ith moderate ris appetite: Go for 0%0%0 6rudential !lended 6lan -

(ption ! F Groth

c"or in.estor ith lo ris appetite: 4undaram !'6 6ari/as /alance fund-Groth

Sundaram 4&P Paribas 4ond Saver 2!3*

"A$ S@P

C&'

&%F

0

R$#

R&S

2'3

&A R$#R

&S

203

'9 09 ' 0 20,0/3 20,0/39

-jun-

AH

EA>?#

HH

3#HE

R

3-(ct-

AH

EB3A#

AH

EH#R>?

3#B>3

E

EB#H?AB

B?H#3H #HAHB

EB

3#>>?

H?

-

A#3H3BE

3A>

A#E?E

-e/-

AB

ER?#

HH

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H

H#R>

R R#AA3

3

B>#HR>

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?#3?R3

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3 E#H>H>R?

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61/83

E-Cun-

A>

?3R#

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A#>B3

?

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B

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OA

L

75.798

66

76.86=7

8

/77>.66

8

=/.776

>8

/:/.>=

=8

,=.=6 7.:9:=5

/

CALC#LA%O& OF A4O$ A4L$*

4eta Alfa Standard

"eviation

Coefficient of

determination

Sharpe

ratio

2SR3

reynor

Ratio

2R

1ensen

Ratio

21R3

,5.


62/83

3-(ct-

AB

3HBR#B EA#HA3

#3R3

#>33H

EA#3?E

> 3#3H3>E

3 3?#H>AH

-

>#E?

E

B>#B3

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3?#E H#RAAR

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R E#>RR3E

E?#A?H?

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L

75.79866

/:.=7789

/77>.66

8

9


63/83

2D% 2igh 0nterest und F Groth:

"A$ S@P

C&'

&%F0

R$#R&S

2'3

&A R$#R&S

203

'9 09 ' 0 20,0/3 20,0

-jun-AH EA>?#H

H

E3#3

3-(ct-

AH

EB3A#A

H

EH#R>?

E3#B>E

R #B33>

B?H#3H

E#?AAHR

E#3A

H

-

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-e/-

AB

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B A#3RR>B?

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3

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>

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R R#

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AB

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A#?BH>H

-

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R A#H>HR -#A??HH

-

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? >?#EA

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3HBR#B EA#HA3

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EA#3?E

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OAL

75.79866

/=..66

8 8=.7


64/83

4eta Alfa Standard

"eviation

Coefficient of

determination

Sharpe

ratio

2SR3

reynor

Ratio

2R

1ensen

Ratio

21R3

,5.5:/7 9.5:/ 6.


65/83

A? H

>

R

> H

B#H>EH

E

-e/-

A>

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H

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E#EH

3 3#?33

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B#3RB

3 A#>H

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E#AH?E3?

>#ARR #E3EEE

-EE#3RE

->#AHH

E B#?3

OAL 75.79866

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8

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>

=

,

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/ :9:.5


4eta Alfa Standard

"eviation

Coefficient of

determination

Sharpe

ratio

2SR3

reynor

Ratio

2R

1ensen

Ratio

21R3

,5.5/97 9.>9> = ,5.95>7> ,5.:.>> ,959.>9


duration is = year3

Findin+s and Su++estions*

Companys

&ame

4eta Alfa Standard

"eviation

Coeffici

ent of

determi

nation

Sharp

e ratio

2SR3

reynor

Ratio

2R

1ensen

Ratio

21R3

%C%C% , 9.>9> = ,5.95>7> ,5.:.>> ,959.>9


66/83

Prudential

4lended plan

option,4,

!ro?th

5.5/97

-"FC hi+h

interest fund,

!ro?th

,

5.5:/7

9.5:/ 6.


67/83

!alance und

Sundaram 4&P Paribas 4alance Fund,!ro?th*


und Type (pen-+nded


$sset 4ize


68/83

-"FC 4alanced Fund D !ro?th


und Type (pen-+nded0n.estment Type Groth

$sset 4ize


69/83

%C%C% Prudential 4alanced D !ro?th


und Type (pen-+nded


$sset 4ize


70/83

4irla 4alance Fund D !ro?th


und Type (pen-+nded


$sset 4ize


71/83

!$*$'%+D 'D-('+ M('T2 %(M6$


72/83

rom the a/o.e ta/le e can see that 0%0%0 6


73/83

rom the a/o.e ta/le e can see that 4undaram !'6 6ari/as /alance fund-Groth is

gi.ing the highest a/solute return o.er B months A#EH>3" hile it is highest in term of

fluctuation of returns .ariance=A#AAAE3"# !0?#H

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74/83

B H#AE>B3E

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75.798

66

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68

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:

9

5.5555

8/:.///:


4eta Alfa Standard

"eviation

Coefficient of

determination

Sharpe

ratio

2SR3

reynor

Ratio

2R

1ensen

Ratio

21R3

5.>5//> 5.7585 6.9>6 66.>:>< /.:5=>


duration is = year3

4irla 4alance Fund D !ro?th

"A$ S@P

C&'

&%F0

R$#R

& 2'3

&A

R$#R

&S

203

'9 09 '0 20,0/3 20,0/39

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75/83

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76/83

-"FC 4alanced Fund D !ro?th

"A$ S@P

C&'

&%F0

R$#R&

2'3

&A R$#R&S

203

'9 09 '0 20,0/3 20,0/39

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3-(ct-

AH

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8

=6/7.85

9 9::/

/6.69/=

/ 9:95.:/>


4eta Alfa Standard

"eviation

Coefficient of

determination

Sharpe

ratio

2SR3

reynor

Ratio

2R

1ensen

Ratio

21R3

/.==6> ,/.=97 />.= 8.6:86 >5.>78 ,5.779


duration is = year3


77/83

%C%C% Prudential 4alanced D !ro?th

"A$ S@P

C&'&%F0

R$#R&

2'3

&A R$#R&S

203

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>:.8:7=/

/77>.66

8

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=

/:8=.>:

6

7 8>6


78/83


79/83

PAR%4AS

4ALA&C$"

F#&"*

Alpha @ 4eta

The a/o.e ta/le shos that 2D% !alanced und - Groth fund is comparati.ely more

.olatile ith a /eta of #33>B, though compared to the maret all the funds are safer to

in.est and they are ha.ing less .olatility also# $nd also the alpha .alues of all the funds

are negati.e e1pected 4undaram !'6 6ari/as !alance und hich shos that the funds

are gi.ing returns not justifying the ris taen# 4undaram !'6 6ari/as !alance und is

shoing an alpha of A#RAA hich suggests that the fund is ell di.ersified and 5uite

efficient in reducing the impact of maret ris#

Co,efficient of "etermination

$ll company is ha.ing positi.e coefficient of determination#

Sharpes Ratio @ reynors Ratio

4harp 0n the a/o.e ta/le, the Treynors ratio for 4undaram !'6 6ari/as !alance und is

the highest folloed /y 2D% and then !0


80/83

Su++estion +iven to the Company

The study has tried pro.e that mere returns of a fund or the past performance is not good

enough to mae a sound decision on in.estment for the future#

There is a need to understand .arious a.aila/le tools of comparati.e analysis and their

significance in maing an in.estment decision#

There tools help in analyzing the consistency of performance of the funds o.er a period of

time#

Thus hile gi.ing a suggestion to a potential in.estor on in.estments#

The ad.isor can

Tae the /eta ratios of .arious funds and suggest ither the fund is .olatile or not

se correlations and suggest hether the /enchmar taen /y the company for

judging the performance is good enough or not#

se treynors ratio and tell ither the fund of the company is gi.ing returns

justifying the maret ris to hich all the similar funds are su/ject to#


81/83

Mutual fund: $n 0ntroduction

$ mutual fund is a form of collecti.e in.estment# 0t is a pool of money collected from.arious in.estors hich is in.ested according to the stated in.estment o/jecti.e# The fund

manager is the person ho in.ests the money in different types of securities according to

the predetermined o/jecti.es# The portfolio of a mutual fund is decided taing into

consideration this in.estment o/jecti.e# Mutual fund in.estors are lie shareholders and

they on the fund# The income earned through these in.estments and the capital

appreciation realized /y the scheme is shared /y its unit holders in proportion to the

num/er of units oned /y them# The .alue of the in.estments can go up or don,

changing the .alue of the in.estors holding# Mutual funds are one of the /est in.estments

e.er created /ecause they are .ery cost efficient and .ery easy to in.est in#

4iblio+raphy and references

4oos: 4ecurity $nalysis and portfolio ManagementU /y Donald ischer I


82/83

)# Money control#com

#historicalnifty#yahoofinancial#com

#sundaram!'6 6ari/as# in

#sharean#com

1ournal*

$uthor /y annan, I 'edunchez 0ndian $ comparati.e study on performance of

pri.ate mutual fundsU+conomic panorama issue date, BAOAOEAAH

4isodiya, $mith 4ingh, Mutual funds performance-%omparati.e analysisU

0%$0, HO?OEAA#
http://www.historical/http://www.sundaram/http://www.historical/http://www.sundaram/


83/83

comparative analysis on mutual fund scheme mba project

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