mutual funds

INTRODUCTION

The SEBI regulations, 1993 defines a mutual fund as a fund in the form of a trust by a sponsor, to raise money 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. It is a diversified portfolio i.e. to distribute investment among different companies or securities in order to limit losses in the particular market or industry.The origin of Mutual fund industry in India is with the introduction of the concept of UTI in the year 1963. Until 1987 UTI enjoyed a monopoly in the Indian Mutual fund market. Then a host of other government controlled Indian financial companies came up with their own funds these are: SBI, Canara Bank and PNB. This market was made opened to private players in 1993.TYPES OF MUTUAL FUND SCHEMES:-DEBT ORIENTED SCHEME:-The aim of debt oriented scheme is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, and government securities. Such funds are less risky as compared to equity schemes.DIVERSIFIED EQUITY FUND SCHEME:-The aim of diversified equity fund is to provide capital appreciation over the medium to long term. Such schemes normally invest in equities. Such funds have comparatively high risk and high return. The equity funds are high on the risk scale as the share prices are volatile. These funds try to reduce the risk by diversifying the investments in different types of shares. One of the greatest advantages of equity funds is instant diversification.BALANCED FUND SCHEME:-The aim of balanced fund scheme is to provide both growth and regular income as such scheme invests both in equities and debt securities in the proportion indicated in their offer documents. These are appropriate for investors looking for moderate growth.Here in this project our main focus is on Diversified Equity Fund Scheme.

1.1 MUTUAL FUND INDUSTRY IN INDIATHE EVOLUTIONThe formation of Unit Trust of India marked the evolution of the Indian mutual fund industry in the year 1963. The primary objective at that time was to attract the small investors and it was made possible through the collective efforts ofthe Government of Indiaand the Reserve Bank of India. The history of mutual fund industry in India can be better understood divided into following phases:Phase 1. Establishment and Growth of Unit Trust of India - 1964-87Unit Trust of India enjoyed complete monopoly when it was established in the year 1963 byan act of Parliament. UTI was set up by the Reserve Bank of India and it continued to operate under the regulatory control of the RBI until the two were de-linked in 1978 and the entire control was tranferred in the hands of Industrial Development Bank of India (IDBI). UTI launched its first scheme in 1964, named asUnit Scheme1964 (US-64), which attracted the largest number of investors in any single investment scheme over the years.

UTI launched more innovative schemes in 1970s and 80s to suit the needs of different investors. It launched ULIP in 1971, six more schemes between 1981-84, Children's Gift Growth Fund and India Fund (India's first offshore fund) in 1986, Mastershare (Inida's first equity diversified scheme) in 1987 andMonthly Income Schemes(offering assured returns) during 1990s. By the end of 1987, UTI's assets under management grew ten times to Rs 6700 crores.Phase II. Entry of Public Sector Funds - 1987-1993The Indian mutual fund industry witnessed a number of public sector players entering the market in the year 1987. In November 1987, SBI Mutual Fund fromthe State Bank of Indiabecame the first non-UTI mutual fund in India. SBI Mutual Fund was later followed by Canbank Mutual Fund, LIC Mutual Fund, Indian Bank Muatual Fund, Bank of India Mutual Fund,GIC Mutual Fundand PNB Mutual Fund. By 1993, the assets under management of the industry increased seven times to Rs. 47,004 crores. However, UTI remained to be the leader with about 80% market share.

1992-93Amount MobilisedAssets Under ManagementMobilisation as % of gross Domestic Savings

UTI11,05738,2475.2%

Public Sector1,9648,7570.9%

Total13,02147,0046.1%

Phase III. Emergence of Private Secor Funds - 1993-96The permission given to private sector funds including foreign fund management companies (most of them entering through joint ventures with Indian promoters) to enter the mutal fund industry in 1993, provided a wide range of choice to investors and more competition in the industry. Private funds introduced innovative products, investment techniques and investor-servicing technology. By 1994-95, about 11 private sector funds had launched their schemes.

Phase IV. Growth and SEBI Regulation - 1996-2004The mutual fund industry witnessed robust growth and stricter regulation from the SEBI after the year 1996. The mobilisation of funds and the number of players operating in the industry reached new heights as investors started showing more interest in mutual funds.

Invetors' interestswere safeguarded by SEBI andthe Governmentoffered tax benefits to the investors in order to encourage them. SEBI (Mutual Funds) Regulations, 1996 was introduced by SEBI that set uniform standards for all mutual funds in India.The Union Budgetin 1999 exempted all dividend incomes in the hands of investors from income tax. Various Investor Awareness Programmes were launched during this phase, both by SEBI and AMFI, with an objective to educate investors and make them informed about the mutual fund industry.

In February 2003, the UTI Act was repealed and UTI was stripped of its Special legal status as a trust formed by an Act of Parliament. The primary objective behind this was to bring all mutual fund players on the same level. UTI was re-organised into two parts: 1. The Specified Undertaking, 2. The UTI Mutual Fund.

Presently Unit Trust of India operates under the name of UTI Mutual Fund and its past schemes (like US-64, Assured Return Schemes) are being gradually wound up. However, UTI Mutual Fund is still the largest player in the industry. In 1999, there was a significant growth in mobilisation of funds from investors and assets under management which is supported by the following data:

GROSS FUND MOBILISATION (RS. CRORES)

FROMTOUTIPUBLIC SECTORPRIVATE SECTORTOTAL

01-April-9831-March-9911,6791,7327,96621,377

01-April-9931-March-0013,5364,03942,17359,748

01-April-0031-March-0112,4136,19274,35292,957

01-April-0131-March-024,64313,6131,46,2671,64,523

01-April-0231-Jan-035,50522,9232,20,5512,48,979

01-Feb.-0331-March-03*7,259*58,43565,694

01-April-0331-March-04-68,5585,21,6325,90,190

01-April-0431-March-05-1,03,2467,36,4168,39,662

01-April-0531-March-06-1,83,4469,14,71210,98,158

ASSETS UNDER MANAGEMENT (RS. CRORES)

AS ONUTIPUBLIC SECTORPRIVATE SECTORTOTAL

31-March-9953,3208,2926,86068,472

Phase V. Growth and Consolidation - 2004 OnwardsThe industry has also witnessed several mergers and acquisitions recently, examples of which are acquisition of schemes of Alliance Mutual Fund by Birla Sun Life, Sun F&C Mutual Fund and PNB Mutual Fund byPrincipal Mutual Fund. Simultaneously, more international mutal fund players have entered India like Fidelity, Franklin Templeton Mutual Fund etc. There were 29 funds as at the end of March 2006. This is a continuing phase of growth of the industry through consolidation and entry of new international and private sector players.

1.2 REASONS FOR SELECTING THIS TOPICWe have selected this topic so as to analyse the selected equity diversified fund schemes in India. Through this study we get to know about equity diversified mutual fund schemes offered by various marketers. By comparative analysis of selected equity diversified mutual funds we will be able to get the best company for Mutual investment. This project gives insight about the Mutual fund and the risk associated with this. The need of the study arises for learning the variables available that distinguish the mutual fund of selected companies.Mutual Funds have become a widely popular and effective way for investors to participate in financial markets in an easy, low-cost fashion, while muting risk characteristics by spreading the investment across different types of securities, also known as diversification. It can play a central role in an individual's investment strategy. They offer the potential for capital growth and income through investment performance, dividends and distributions under the guidance of a portfolio manager who makes investment decisions on behalf of mutual fund unit holders. So Mutual fund is good topic for study and we will be able to get the theoretical knowledge about mutual fund in detail.

LITERATURE REVIEW

Ms. Rajeswari T.R., Prof. V.E. Rama Moorthy (2001) in the paper An Empirical Study on Factors Influencing the Mutual Fund Scheme Selection by Retail Investors have expressed that mutual fund is a retail product designed to target small investors, salaried people and others who are not intimidated by the mysteries of stock market but, nevertheless, like to reap the benefits of stock market investing. At the retail level, investors are unique and are a highly heterogeneous group. Gupta and Sehgal (1998) evaluated performance of 80 mutual fund schemes over four years (1992-96). The study tested the proposition relating to fund diversification, consistency of performance, parameter of performance and risk-return relationship. The study noticed the existence of inadequate portfolio diversification and consistency in performance among the sample schemes. Shome (1994) based on growth schemes examined the performance of the mutual fund industry between April 1993 to March 1994 with BSE SENSEX as market surrogate. The study revealed that, in the case of 10 schemes, the average rate of return on mutual funds were marginally lower than the market return while the standard. Jenson, Michal C. (1967), The Performance of Mutual Funds in the Period 1945 1964, The Journal of Finance, Vol 23, No. 2, pp.389 416. The research paper indicates the past performance of the fund, predict the future demand of the fund, investors attract to invest in Mutual Fund. Roshni Jayams (2002) study brought out that equities had a good chance of appreciation in future. The researcher was of the view that, investors should correctly judge their investment objective and risk appetite before picking schemes, diversified equity funds were typically safer than others and index funds were the best when market movements were not certain. The researcher suggested Systematic Withdrawal Plan (SWP) with growth option was more suitable for investors in need of regular cash inflows. In 2010-11, equity markets traded within a narrow zone with both the Nifty and the Sensex ending the year with gain (10.94%) while the broader index BSE 500 closing with a paltry gain (8.55%).Franklin India Blue-chip Fund, DSP Blackrock Top 100 Equity and ICICI Prudential Top 100 Equity are three 5-star rated funds in this category with (14.20%, 13.41% and 12.35%) annualized return respectively during the three-year period ending March 31, 2011.[ magazineBusiness Today Edition: June 2011]. In 2013, UTI Infrastructure and Tata Infrastructure Plan A have emerged the top underperformers for the year, lagging their benchmarks by 17% and 16%, respectively. Others that lagged their benchmarks include DSPBR TIGER Reg (15.7%), SBI Emerging Businesses (12.5%), Reliance Regular Savings Equity (10.7%), HDFC Growth (10.6%), Reliance Growth (8.9%), SBI Contra (7.8%) and Reliance Vision (7.1%). HDFC Top 200, which alone manages more than Rs10, 000 crore by way of assets, underperformed by 0.22%.[E-PaperThe Financial Express Updated: Jan 02 2014] HDFC Top 200 emerges as the best fund with a 10-year track record during which it gave an annual return (31.66%). In the three-year period also, it topped the category return (17.46%). Therefore, that it's a 5-star rated fund [magazineBusiness Today Edition: June 2011]. HDFC Equity (27% annualized return in three years), HDFC Capital Builder (25.5%) and Tata Ethical Fund (25%) are the other 5-star funds in the group [MagazineBusiness today Edition: June 2012]. In 2013, Over 90 per cent of the 183 equity schemes lagged the index from January 1 to December 12. Their average returns stood at a measly 2.5 per cent [Paper--Business Line Published on: December 14, 2013].

PROBLEM STATEMENT & OBJECTIVE OF THE STUDY3.1 PROBLEM STATEMENTThe issues related to the choice of schemes among the public and private sector funds on the one hand and high risk associated schemes such as equity funds, on the other, have become highly important for every investor. It is relevant that even a single wrong decision of Fund Manager may put the investors in a financial crisis, sometimes leading to their bankruptcy. Therefore a proper performance evaluation measure is required as it will remove confusion and help the small investors in selecting suitable Mutual Funds Schemes for investment. The performance evaluation of Mutual Funds and the identification of successful Fund Managers are of great interest to investors, general public and academicians. A number of studies have been conducted across the world, including India, to find out the performance of mutual funds by using different performance measures. Hence the present study was undertaken to analyze the performance of Open Ended Equity Mutual Fund Schemes. It was against this background, the present study was undertaken.

3.2 OBJECTIVE OF THE STUDY:- To evaluate the performance of selected Equity Diversified Mutual Funds Schemes in India on the basis of risk and returns. To compare the performance of selected Equity Diversified Mutual Funds Schemes in India on the criterias such as variance, CAGR, beta, alpha and performance ratios like Sharpe ratio. To rank the selected fund on the basis of risk and returns.3.3 SCOPE OF THE STUDY:-The present study comprises of 20 mutual fund schemes launched by different private sector. The time period of this research work is 4 months. The performance of selected Mutual Funds schemes is evaluated on the basis of risk and return. Then these schemes have been compared with the bench mark return to evaluate the performance of these schemes.

RESEARCH METHODOLOGY4.1 RESEARCH DESIGNDESCRIPTIVE RESEARCH DESIGN4.2 SOURCES OF DATA COLLECTIONSECONDARY DATAWebsite of MF companies, AMFI and business magazines.4.3 SAMPLING PROCEDURESAMPLE SIZE: 20 EQUITY DIVERSIFIED MUTUAL FUND SCHEMES.SAMPLING TOOLS: Standard Deviation, Variance, Beta, Sharpe ratio and Alpha.4.4 LIMITATIONS OF THE STUDY1. Due to lack of time it is nearly impossible to get all the information to make the project complete. Hence there may arise discrepencies in actual facts.2. Due to lack of proper specialised skills in data processing the data may reveal in exact inferences, however proper points have been taken to make it exact.3. Since the fund selected for study were open ended equity based growth Mutual Funds the fund composition kept on changimg over the time perios, so it become difficult to understand the fund properties as historical data pertaining to the fund composition was not properly available.4. Because of unavailability of historical data and fund composition it was difficult to ascertain the performance to the fund properties and a simple evaluation was done against the market performance.5. Due to lack of knowledge and experience the findings may not be true to a very large extent.

20 EQUITY DIVERSIFIED MUTUAL FUNDS SCHEMES SELECTED FOR ANALYSIS1. Canara Robeco Equity Diversified Fund - Regular Plan.

Objective:-The scheme aims to generate capital appreciation by investing in equity and equity related securities. The scheme would follow bottom-up investment style by identifying companies with strong competitive position in good business and having quality management.

2. Tata Equity Opportunities Plan A.

Objective:-The scheme aims to provide capital appreciation by investing in equity and equity related instruments of well researched value and growth oriented companies.

3. ICICI Prudential SPICE Fund.

Objective:-The scheme seeks to track the returns of the BSE Sensex through investment in a basket of stocks drawn from the constituents of BSE sensex.

4. Birla Sun Life India Opportunities Fund.

Objective:-The scheme seeks to achieve superior long-term growth of capital through an equity portfolio, which focuses on emerging opportunities in the field of global outsourcing. This would include sectors such as IT, telecom, pharmaceuticals, biotechnology, auto ancillaries, textiles etc.

5. DSP BlackRock Top 100 Equity Fund - Regular Plan.

Objective:-The scheme seeks to generate capital appreciation from a portfolio that largely consists of equity and equity related securities of the 100 largest corporate, by market capitalisation, listed on either BSE or NSE.

6. Tata Index Sensex Plan A.

Objective:-The scheme aims to provide medium to long term capital gains, by investing in equity shares of only those companies comprised in the BSE Sensex and in the same proportion as that of the index, regardless of their investment merit.

7. HDFC Index Fund - Sensex Plus Plan.

Objective:-The scheme aims to invest 80 to 90% of its assets in the companies that form the Sensex and between 10 and 20% of the assets in the companies which are not included in the Sensex.

8. UTI Equity Fund.

Objective:-UTI Equity Fund is open ended equity scheme with an objective of investing at least 80% of its funds in equity and equity related instrument with medium to high risk profile and upto 20% in debt and money market instruments with low to medium risk profile.

9. Birla Sun Life Equity Fund.

Objective:-The fund seeks long-term growth of capital and regular income through 90% investment in equities and 10% in debt and money market portfolio.

10. HDFC Equity Fund.

Objective:-The scheme seeks to provide long-term capital appreciation by predominantly investing in high growth companies.

11. HDFC Long Term Advantage Fund.Objective:-It is aimed at providing capital appreciation by investing predominantly in equity and equity related instruments.

12. HDFC TaxSaver Fund.

Objective:-The scheme seeks capital appreciation with at least 80 per cent exposure to equities, FCDs, preference shares and bonds of companies.

13. ICICI Prudential Dynamic Fund - Regular Plan.

Objective:-The scheme aims to invest primarily in equities and for defensive consideration in fixed income securities including money market instruments with the aim of generating capital appreciation. The actual percentage of investments in will be decided after considering the prevailing market and economic conditions.

14. Reliance Banking Fund.

Objective:-The scheme aims to generate continuous returns by actively investing in equity, equity related or fixed income securities of banks. The proportion of investment between equity and debt will be decided based on the view of the fund manager on anticipated movement in both debt as well as equity markets.

15. Reliance Growth Fund.

Objective:-The scheme aims at long term growth of capital through research based investment approach. The funds will be invested in Equity and equity related instruments, and there will be an exposure to debt and money market instruments also.

16. SBI Magnum Global Fund.

Objective:-The scheme seeks to prove maximum growth opportunities from a portfolio of equity and debt instruments of companies having high growth potential.

17. SBI Nifty Index.

Objective:-The scheme is a passively managed index fund, which would invest in all the stocks comprising S&P CNX Nifty Index in the same proportion as their weightage in the index.

18. UTI Transportation and Logistics Fund.

Objective:- An open-ended equity fund with the objective to provide Capital appreciation through investments in the stocks of the companies engaged in providing transportation services, design, manufacture, distribution or sale of transportation equipment and companies in the logistics sector.

19. SBI Pharma.

Objective:- The scheme seeks maximum growth opportunities through investments in Pharma stocks.

20. SBI FMCG Fund. Objective:- The scheme seeks maximum growth opportunities through investments in FMCG stocks.

STATISTICAL TOOLSAlpha: Alpha basically is the difference between the returns an investor expects from a fund A positive alpha means the fund has outperformed its benchmark index. Whereas a negative alpha indicates an underperformance of the fund. The more positive an alpha the healthier for investors.Alpha = Rp [ Rf + ( Rm Rf ) Beta ]Where, Rp = Realized return Rm = Market return Rf = Risk free return Beta: Beta is a measure of the volatility of a particular fund in comparison to the market as a whole, that is, the extent to which the fund's return is impacted by market factors. Beta is calculated using a statistical tool called regression analysis. By definition, the market benchmark index of Sensex and Nifty has a beta of 1.0.Conservative investors should focus on mutual funds schemes with low beta. Aggressive investors can opt to invest in mutual fund schemes which have higher beta value for higher returns taking more risk. Beta = Covariance of the fund and the market / Variance of market returnsStandard Deviation (SD): The total risk (market risk, security-specific risk and portfolio risk) of a mutual fund is measured by Standard Deviation (SD). In mutual funds, the standard deviation tells us how much the return on a fund is deviating from the expected returns based on its historical performance. In other words can be said it evaluates the volatility of the fund. The standard deviation of a fund measures this risk by measuring the degree to which the fund fluctuates in relation to its average return of a fund over a period of time. In other words, it is a measure of the consistency of a mutual fund's returns. A higher SD number indicates that the net asset value (NAV) of the mutual fund is more volatile and, it is riskier than a fund with a lower SD. Standard Deviation =Root of [Sigma (( Return Of The Fund Expected Rate Of The Return)^2)/n-1]

Sharpe Ratio: Sharpe ratio (SR) is another important measure that evaluates the return that a fund has generated relative to the risk taken. Risk here is measured by SD. It is used for funds that have low correlation with benchmark index. This ratio helps an investor to know whether it is a safe bet to invest in this fund by taking the quantum of risk. The higher the Sharpe ratio (SR), the better a funds return relative to the amount of risk taken. In other words, a mutual fund with a higher SR is better because it implies that it has generated higher returns for every unit of risk that was taken. On the contrary, a negative Sharpe ratio indicates that a risk-free asset would perform better than the fund being analyzed.Sharpe Ratio = (Expected portfolio return - Risk free rate) / Portfolio standard deviationCAGR : CAGR isn't the actual return in reality. It's an imaginary number that describes the rate at which an investment would have grown if it grew at a steady rate. You can think of CAGR as a way to smooth out the returns.

DATA ANALYSIS

RETURNS OF SELECTED EQUITY DIVERSIFIED MUTUAL FUND SCHEMES

RETURN (%)20042005200620072008200920102011201220132014

Canara Robeco Equity Diversified Fund 17.6037.0331.3563.42-50.8492.9820.67-15.8631.324.316.14

Tata Equity Opportunities Plan A29.8651.1737.9576.36-60.9195.129.81-23.0333.728.696.46

ICICI Prudential SPICE Fund13.8942.5447.6946.78-51.1278.4118.77-23.7729.0010.505.63

Birla Sun Life India Opportunities Fund.20.6142.1132.4221.19-62.01109.6116.97-30.1128.9224.868.06

DSP Black Rock Top 100 Equity Fund 25.0142.9046.6064.93-45.5477.1316.80-19.8530.292.233.31

Tata Index Sensex Plan A.14.1537.7346.4545.20-53.0678.8317.13-24.8026.098.675.27

HDFC Index Fund - Sensex Plus Plan17.5241.4445.5446.59-47.0880.6019.13-20.6328.536.045.09

UTI Equity Fund.22.34

40.2222.7847.48-45.2585.1720.50-19.0932.157.567.54

Birla Sun Life Equity Fund.44.1454.2942.8469.91-56.6289.2514.16-29.3835.747.119.06

HDFC Equity Fund.

27.5362.7035.8653.61-49.68105.5729.22-26.7234.143.8210.15

HDFC Long Term Advantage Fund.

46.4755.6323.0040.62-52.3988.8928.37-23.4828.8310.9610.96

HDFC TaxSaver Fund.49.38

74.8434.1239.44-51.5599.0726.42-22.6226.595.098.64

ICICI Prudential Dynamic Fund - Regular Plan

15.7058.5158.3140.78-44.7979.9321.26-20.3230.5816.338.11

Reliance Banking Fund57.92

29.1918.6376.95-37.8482.8946.08-31.9860.52-10.379.35

Reliance Growth Fund42.57

68.7341.0076.85-54.1197.4017.18-27.4037.82-2.475.23

SBI Magnum Global Fund.

68.5978.0256.6352.37-66.65119.5618.10-14.2135.989.718.87

SBI Nifty Index.10.0733.8242.0549.46-53.2774.7417.99-24.6128.366.195.84

UTI Transportation and Logistics Fund. -42.4911.92-0.97-48.77132.1326.56-19.2837.7224.6914.21

SBI Pharma.

50.9044.4112.636.74-49.2084.2929.14-5.5437.0626.055.95

SBI FMCG Fund.26.5838.205.5828.38-32.9766.3748.086.1855.309.293.59

Table (1)

Table (1) shows the annual return of 10 years i.e. from 2004 to 2014 of selected equity diversified Mutual Fund schemes.

PERFORMANCE ANALYSIS OF SELECTED EQUITY DIVERSIFIED MUTUAL FUND SCHEMES BASED ON SHARPE RATIO ANALYSIS AND RANKING

Sharpe Ratio: Sharpe ratio (SR) is an important measure that evaluates the return that a fund has generated relative to the risk taken. Risk here is measured by SD. This ratio helps an investor to know whether it is a safe bet to invest in this fund by taking the quantum of risk. The higher the Sharpe ratio (SR), the better a funds return relative to the amount of risk taken. In other words, a mutual fund with a higher SR is better because it implies that it has generated higher returns for every unit of risk that was taken.Sharpe Ratio = (Expected portfolio return - Risk free rate) / Portfolio standard deviationMF SCHEMESSHARPE RATIORANK

Canara Robeco Equity Diversified Fund Regular plan 0.17 9

Tata Equity Opportunities Plan A 0.19 8

ICICI Prudential SPICE Fund 0.06 11

Birla Sun Life India Opportunities Fund 0.25 5

DSP Black Rock Top 100 Equity Fund - Regular Plan -0.02 14

Tata Index Sensex Plan A -0.04 16

HDFC Index Fund - Sensex Plus Plan 0.01 13

UTI Equity Fund

0.20 7

Birla Sun Life Equity Fund 0.10 10

MF SCHEMESSHARPE RATIORANK

HDFC Equity Fund 0.03 12

HDFC Long Term Advantage Fund 0.17 9

HDFC TaxSaver Fund 0.03 12

ICICI Prudential Dynamic Fund - Regular Plan 0.23 6

Reliance Banking Fund 0.01 13

Reliance Growth Fund -0.08 17

SBI Magnum Global Fund 0.57 4

SBI Nifty Index -0.03 15

UTI Transportation and Logistics Fund 0.67 3

SBI Pharma 1.16 1

SBI FMCG Fund 1.15 2

Table (2)TOP FIVE MUTUAL FUND SCHEMES OF ON THE BASIS OF SHARPE RATIO SBI Pharma SBI FMCG Fund UTI Transportation and Logistics Fund SBI Magnum Global Fund Birla Sun Life India Opportunities Fund

BOTTOM FIVE MUTUAL FUND SCHEMES Reliance Growth Fund Tata Index Sensex Plan A SBI Nifty Index DSP Black Rock Top 100 Equity Fund - Regular Plan HDFC Index Fund - Sensex Plus Plan

STATISTICAL DATA OF SELECTED MUTUAL FUND SCHEMES

Name of The SchemeBeta()Alpha()Standard Deviation()R-Squared

Canara Robeco Equity Diversified Fund - Regular Plan0.812.9714.830.92

Tata Equity Opportunities Plan A0.823.2214.990.91

ICICI Prudential SPICE Fund0.911.4916.080.99

Birla Sun Life India Opportunities Fund0.644.2015.620.51

DSP BlackRock Top 100 Equity Fund - Regular Plan0.930.2416.930.93

Tata Index Sensex Plan A0.93-0.1916.440.99

HDFC Index Fund - Sensex Plus Plan0.900.6415.960.99

UTI Equity Fund0.853.5415.330.95

Birla Sun Life Equity Fund0.992.3718.080.92

HDFC Equity Fund1.121.2920.680.90

HDFC Long Term Advantage Fund0.913.3916.710.91

HDFC TaxSaver Fund0.921.0217.210.88

ICICI Prudential Dynamic Fund - Regular Plan

0.854.1916.170.86

Reliance Banking Fund0.96-0.7430.890.97

Reliance Growth Fund0.99-0.9818.88-0.08

SBI Magnum Global Fund0.668.8814.920.61

SBI Nifty Index

1.00-0.0117.551.00

UTI Transportation and Logistics Fund0.9914.9421.470.66

SBI Pharma

0.913.7012.130.89

SBI FMCG Fund0.901.8414.720.88

Table (3)

PERFORMANCE EVALUATION OF SELECTED FUNDS ON THE BASIS OF RISK AND RETURN

Name of the fund10 years returnAlpha()Rank

Canara Robeco Equity Diversified Fund 18.452.979

Tata Equity Opportunities Plan A16.653.2212

ICICI Prudential SPICE Fund15.481.4914

Birla Sun Life India Opportunities Fund.13.024.2015

DSP Black Rock Top 100 Equity Fund 17.780.2410

Tata Index Sensex Plan A.13.69-0.1916

HDFC Index Fund - Sensex Plus Plan16.480.6413

UTI Equity Fund.

16.723.5411

Birla Sun Life Equity Fund.

18.752.378

HDFC Equity Fund.

20.131.295


18.723.396

HDFC TaxSaver Fund

21.001.024

ICICI Prudential Dynamic Fund - Regular Plan22.084.192

Reliance Banking Fund

20.33-0.7417

Reliance Growth Fund

20.79-0.9818


24.028.881

SBI Nifty Index12.94-0.0119

UTI Transportation and Logistics Fund. -14.94-

SBI Pharma.

18.523.707

SBI FMCG Fund.

23.261.843

Table (4)

TOP FIVE MUTUAL FUNDS SCHEMES ON THE BASIS OF RISK AND RETURN SBI Magnum Global Fund ICICI Prudential Dynamic Fund - Regular Plan SBI FMCG Fund HDFC TaxSaver Fund HDFC Equity FundBOTTOM FIVE MUTUAL FUNDS SCHEMES ON THE BASIS OF RISK AND RETURN SBI Nifty Index Reliance Growth Fund Reliance Banking Fund Tata Index Sensex Plan A Birla Sun Life India Opportunities Fund

COMPARATIVE ANALYSIS BETWEEN FUNDS AND BENCHMARK RETURN (CAGR OF 10 YEARS)

Name of the fundBench Mark10 years ReturnBench Mark returnDifference Rank

Canara Robeco Equity Diversified Fund CNX Nifty18.4513.764.698

Tata Equity Opportunities Plan ACNX Nifty16.6513.762.8911

ICICI Prudential SPICE FundCNX Nifty15.4813.761.7213

Birla Sun Life India Opportunities Fund.CNX Nifty13.0213.76-0.7415

DSP Black Rock Top 100 Equity Fund CNX Nifty17.7813.764.029

Tata Index Sensex Plan A.CNX Nifty13.6913.76-0.0714

HDFC Index Fund - Sensex Plus PlanCNX Nifty16.4813.762.7212

UTI Equity Fund.

CNX Nifty16.7213.762.9610


CNX Nifty18.7513.764.996

HDFC Equity Fund.

CNX Nifty20.1313.766.375


CNX Nifty18.7213.764.967

HDFC TaxSaver Fund

CNX Nifty21.0013.767.243

ICICI Prudential Dynamic Fund - Regular PlanCNX Nifty22.0813.768.322


S&P BSE Bankex20.3316.633.7-


CNX Nifty20.7913.767.034


CNX Nifty24.0213.7610.261

SBI Nifty IndexCNX Nifty12.9413.76-0.8216

UTI Transportation and Logistics Fund. - - - --

SBI Pharma.

S&P BSE Healthcare18.5215.942.58-

SBI FMCG Fund.

S&P BSE FMCG23.2621.951.31-

Table (5)TOP MUTUAL FUNDS SCHEMES ON THE BASIS OF CAGR OF 10 YEARS SBI Magnum Global Fund ICICI Prudential Dynamic Fund - Regular Plan HDFC TaxSaver Fund Reliance Growth Fund HDFC Equity FundBOTTOM MUTUAL FUNDS SCHEMES ON THE BASIS OF CAGR OF 10 YEARS SBI Nifty Index Birla Sun Life India Opportunities Fund. Tata Index Sensex Plan A ICICI Prudential SPICE Fund HDFC Index Fund - Sensex Plus Plan

COMPARATIVE ANALYSIS BETWEEN FUNDS AND BENCHMARK RETURN (CAGR of 5 years)

Name of the fundBench Mark5 years ReturnBench Mark returnDifference Rank




Birla Sun Life India Opportunities Fund.CNX Nifty24.0215.808.224

DSP Black Rock Top 100 Equity Fund CNX Nifty16.7015.800.915

Tata Index Sensex Plan A.CNX Nifty16.2815.800.4816

HDFC Index Fund - Sensex Plus PlanCNX Nifty18.7115.802.9112

UTI Equity Fund.

CNX Nifty21.3515.805.559


CNX Nifty19.6315.803.8311

HDFC Equity Fund.

CNX Nifty24.1415.808.343


CNX Nifty23.6615.807.865

HDFC TaxSaver Fund

CNX Nifty22.5415.806.748



S&P BSE Bankex25.3724.351.02-


CNX Nifty18.7815.802.9814


CNX Nifty29.4815.8013.682

SBI Nifty Index.CNX Nifty15.6315.80-0.1717

UTI Transportation and Logistics Fund.CNX Nifty33.4715.8017.671

SBI Pharma.


SBI FMCG Fund.

S&P BSE FMCG34.5528.116.44-

Table (6)

TOP MUTUAL FUNDS SCHEMES ON THE BASIS OF CAGR OF 5 YEARS UTI Transportation and Logistics Fund SBI Magnum Global Fund HDFC Equity Fund. Birla Sun Life India Opportunities Fund HDFC Long Term Advantage Fund.BOTTOM MUTUAL FUNDS SCHEMES ON THE BASIS OF CAGR OF 5 YEARS SBI Nifty Index Tata Index Sensex Plan A DSP Black Rock Top 100 Equity Fund Reliance Growth Fund ICICI Prudential SPICE Fund

COMPARATIVE ANALYSIS BETWEEN FUNDS AND BENCHMARK RETURN (CAGR of 3 years)

Name of the fundBench Mark3 years ReturnBench Mark returnDifferenceRank


Tata Equity Opportunities Plan ACNX Nifty13.3812.15 1.2310

ICICI Prudential SPICE FundCNX Nifty14.4812.15 2.337

Birla Sun Life India Opportunities Fund.CNX Nifty19.6112.15 7.463

DSP Black Rock Top 100 Equity Fund CNX Nifty8.3212.15 -3.8317

Tata Index Sensex Plan A.CNX Nifty12.9712.15 0.8211

HDFC Index Fund - Sensex Plus PlanCNX Nifty12.0712.15 -0.0815

UTI Equity Fund.

CNX Nifty14.2712.15 2.128


CNX Nifty16.1612.15 4.015

HDFC Equity Fund.

CNX Nifty12.6712.15 0.5212


CNX Nifty8.254.25 46

HDFC TaxSaver Fund

CNX Nifty5.814.25 1.569

ICICI Prudential Dynamic Fund - Regular PlanCNX Nifty9.434.25 5.184


S&P BSE Bankex2.33 2.27 0.06-


CNX Nifty3.184.25 -1.0716


CNX Nifty14.964.25 10.712

SBI Nifty Index.CNX Nifty4.674.25 0.4213

UTI Transportation and Logistics Fund.CNX Nifty19.204.25 14.951

SBI Pharma.

S&P BSE Healthcare22.2719.03 3.24-

SBI FMCG Fund.

S&P BSE FMCG24.1323.78 0.35-

Table (7)

TOP MUTUAL FUNDS SCHEMES ON THE BASIS OF CAGR OF 3 YEARS UTI Transportation and Logistics Fund SBI Magnum Global Fund. Birla Sun Life India Opportunities Fund ICICI Prudential Dynamic Fund - Regular Plan Birla Sun Life Equity Fund

BOTTOM MUTUAL FUNDS SCHEMES ON THE BASIS OF CAGR OF 3 YEARS DSP Black Rock Top 100 Equity Fund Reliance Growth Fund HDFC Index Fund - Sensex Plus Plan Canara Robeco Equity Diversified Fund SBI Nifty Index

COMPARATIVE ANALYSIS BETWEEN FUNDS AND BENCHMARK RETURN (CAGR of 2 years)Name of the fundBench Mark2 years ReturnBench Mark returnDifference Rank


Tata Equity Opportunities Plan ACNX Nifty13.3812.15 1.239

ICICI Prudential SPICE FundCNX Nifty14.4812.15 2.337

Birla Sun Life India Opportunities Fund.CNX Nifty19.6112.15 7.462

DSP Black Rock Top 100 Equity Fund CNX Nifty8.3212.15 -3.8316

Tata Index Sensex Plan A.CNX Nifty12.9712.15 0.8210

HDFC Index Fund - Sensex Plus PlanCNX Nifty12.0712.15 -0.0813

UTI Equity Fund.

CNX Nifty14.2712.15 2.128

Birla Sun Life Equity Fund.CNX Nifty16.1612.15 4.015

HDFC Equity Fund.

CNX Nifty12.6712.15 0.5211


CNX Nifty15.0512.15 2.96

HDFC TaxSaver Fund

CNX Nifty11.4312.15 -0.7215

ICICI Prudential Dynamic Fund - Regular PlanCNX Nifty16.5512.15 4.44


S&P BSE BANKEX10.81 9.74 1.07-


CNX Nifty8.2312.15 -3.9217


CNX Nifty17.2012.15 5.053

SBI Nifty Index.CNX Nifty12.0212.15 -0.1314

UTI Transportation and Logistics Fund.CNX Nifty24.6012.15 12.451

SBI Pharma.

S&P BSE Healthcare29.7225.48 4.24-

SBI FMCG Fund.

S&P BSE FMCG22.9223.45 -0.53-

TABLE (8)

TOP MUTUAL FUNDS SCHEMES ON THE BASIS OF CAGR OF 2 YEARS UTI Transportation and Logistics Fund Birla Sun Life India Opportunities Fund. SBI Magnum Global Fund. ICICI Prudential Dynamic Fund - Regular Plan Birla Sun Life Equity FundBOTTOM MUTUAL FUNDS SCHEMES ON THE BASIS OF CAGR OF 2 YEARS Reliance Growth Fund DSP Black Rock Top 100 Equity Fund HDFC TaxSaver Fund SBI Nifty Index HDFC Index Fund - Sensex Plus Plan

COMPARATIVE ANALYSIS BETWEEN FUNDS AND BENCHMARK RETURN (CAGR of 1 year)

Name of the fundBench Mark1 years ReturnBench Mark returnDifferenceRank




Birla Sun Life India Opportunities Fund.CNX Nifty41.2020.0821.122

DSP Black Rock Top 100 Equity Fund CNX Nifty16.4120.08-3.6717

Tata Index Sensex Plan A.CNX Nifty20.5020.080.4212

HDFC Index Fund - Sensex Plus PlanCNX Nifty17.5120.08-2.5716

UTI Equity Fund.

CNX Nifty23.1720.083.099


CNX Nifty28.5420.088.464

HDFC Equity Fund.

CNX Nifty25.0120.084.937


CNX Nifty26.4220.086.345

HDFC TaxSaver Fund

CNX Nifty24.7120.084.638



S&P BSE BANKEX13.0012.300.7-


CNX Nifty18.0320.08-2.0515


CNX Nifty25.8720.085.796

SBI Nifty Index.CNX Nifty19.5720.08-0.5114

UTI Transportation and Logistics Fund.CNX Nifty61.2020.0841.121

SBI Pharma.


SBI FMCG Fund.

S&P BSE FMCG17.5020.12-2.62-

Table (9)

TOP MUTUAL FUNDS SCHEMES ON THE BASIS OF CAGR OF 1 YEAR UTI Transportation and Logistics Fund Birla Sun Life India Opportunities Fund ICICI Prudential Dynamic Fund - Regular Plan Birla Sun Life Equity Fund HDFC Long Term Advantage Fund. BOTTOM MUTUAL FUNDS SCHEMES ON THE BASIS OF CAGR OF 1 YEAR DSP Black Rock Top 100 Equity Fund HDFC Index Fund - Sensex Plus Plan Reliance Growth Fund SBI Nifty Index Canara Robeco Equity Diversified Fund

6.1 FINDINGS By analyzing the selected equity diversified mutual fund schemes we find out that the return of multiple schemes vary in the year 2004 to 2014 like HDFC Long Term Advantage Fund is giving 10.96% return that is higher among other schemes and also giving good return during the overall period. But there is also UTI Transportation and Logistics Fund is giving 14.21% return at the end of the period but throughout the period is not giving good return. And also HDFC Equity Fund is giving good return with 10.15%. By doing the ranking of selected mutual fund schemes on the basis of performance ratio like Sharpe ratio we find out SBI Pharma has got the 1st rank with 1.16 Sharpe ratio among all the selected schemes and SBI FMCG Fund has got the 2nd rank with 1.15 Sharpe ratio whereas Reliance Growth Fund has got the 17th rank with -0.08 Sharpe ratio. On the basis of various statistical data beta(), alpha(), standard deviation() and R-Squared we find out that which scheme is giving good return and which are providing average return. Here SBI Magnum Global Fund is providing 8.88 alpha with minimum 14.92 standard deviation among all the selected schemes and has a 0.61 R-Squared with 0.66 beta. Whereas Reliance Banking Fund is giving negative -0.74 alpha with maximum 30.89 standard deviation among all the selected schemes and 0.97 R-Squared have a 0.96 beta. By evaluating the performance of selected funds we found that SBI Magnum Global Fund has a 10 year return is 24.02% and a maximum 8.88 alpha with highest return fund among all the selected schemes and ranked as 1st also ICICI Prudential Dynamic Fund - Regular Plan has giving 10 year return is 22.08% with a 4.19 alpha and ranked as 2nd. Whereas SBI Nifty Index has a 10 year return is 12.94% with a negative -0.01 alpha and ranked as 19th. By doing the comparative analysis between various selected funds and their benchmark return on the basis of CAGR of 10 year or in the long year period we found that SBI Magnum Global Fund has a benchmark CNX Nifty 10 year return is 24.02% with a benchmark return 13.76% and the difference between them is 10.26% and ranked as 1st among all the selected schemes also ICICI Prudential Dynamic Fund - Regular Plan has got 2nd rank with a benchmark CNX Nifty. Whereas SBI Nifty Index has a 10 year return 12.94% with a benchmark return 13.76% and the difference between them is -0.82% and got a 17th rank. On the basis of CAGR of 5 year also in long term period UTI Transportation and Logistics Fund has got the 1st rank with a 33.47% return of 5 year and a benchmark return 15.80% and the difference between them is 17.67% with a benchmark CNX Nifty after that SBI Magnum Global Fund has got the 2nd rank with the difference between the actual return and a benchmark return 13.68% and the benchmark is CNX Nifty. By doing the comparative analysis between various selected funds and their benchmark return on the basis of CAGR of 3 years or in the medium term period we found that here UTI Transportation and Logistics Fund has performed best and got 1st rank with the benchmark CNX Nifty and SBI Magnum Global Fund has got 2nd rank. Whereas DSP Black Rock Top 100 Equity Fund has performed worst and got 17th rank. By doing the comparative analysis between various selected funds and their benchmark return on the basis of CAGR of 2 year or in the medium term period we found that here also UTI Transportation and Logistics Fund got the 1st rank with the benchmark CNX NIFTY same as in the long term period of 5 year after that Birla Sun Life India Opportunities Fund got the 2nd rank with the same benchmark CNX Nifty. Whereas Reliance Growth Fund has got the 17th rank with the benchmark CNX Nifty. On the basis of CAGR of 1 year or in short term period UTI Transportation and Logistics Fund got the 1st rank with the benchmark CNX NIFTY same as in the long term period of 5 year after that Birla Sun Life India Opportunities Fund got the 2nd rank with the same benchmark CNX Nifty among all the selected fund. Whereas DSP Black Rock Top 100 Equity Fund has got the 17th rank with the benchmark CNX Nifty.

6.2 SUGGESTIONS On the basis of the findings of the study, the following suggestions are given below to investors and mutual fund companies. 1. The investors first should set their investment goal and accordingly select the schemes and option according to their goals and return earning needs. 2. As the equity mutual fund schemes do assume more risk than other income and balanced schemes, risk takers are advised to select equity mutual funds schemes for investment. 3. The year wise analysis of the present study shows that no one sample scheme earned either positive or negative value continuously during the study period. Hence investors are advised that to select the schemes for investing based on the long term performance. 4. The fund managers must first identify the portfolio allocation under risk and return proposition. After that they have to select the stocks for fund allocation. 5. In general, high level of risk provides high return. Hence the equity fund managers are advised to select the correct stocks according to the expectation of investors.

6.3 CONCLUSIONFrom foregoing performance analysis of the selected equity diversified mutual fund schemes, its clear that all the funds have performed well during the study period 2004 to 2014. It is essential for investors to consider statistical parameters like alpha, beta, standard deviation while investing in mutual funds apart from considering NAV and TOTAL RETURN in order to ensure consistent performance of mutual funds. In the analysis we can conclude that for investors point of view investment in UTI Transportation and Logistics Fund is better in order to achieve maximum return whether for short term period or medium term period or long term period. ICICI Prudential Dynamic Fund - Regular Plan, Birla Sun Life India Opportunities Fund, SBI Magnum Global Fund and Birla Sun life Equity Fund are also giving good return to the investors throughout the period. So it is good for the investors to invest in these top mutual funds.

BIBLIOGRAPHYBOOKS:1. Security analysis and portfolio management by P. Pandian.2. Financial management by Prasanna Chandra.3. Investment analysis and portfolio management by R. Madhumati and M. Ranganatham

MAGAZINES:1. Business Today2. Economic Times3. Business Times

WEBSITES:www.valueresearchonline.comwww.morningstar.comwww.moneycontrol.comwww.amfiindia.comhttp://en.wikipedia.org/wiki/Mutual_funds_in_Indiahttp://businesstoday.intoday.in/story/how-to-choose-the-best-mutual-fund-for-your-portfolio/1/15779.htmlhttp://businesstoday.intoday.in/story/indis-best-mutual-funds-2012-money-today-rankings/1/184733.htmlhttp://www.thehindubusinessline.com/markets/as-sensex-soars-on-largecap-rally-diversified-funds-find-the-going-tough/article5460220.ecehttp://www.financialexpress.com/news/top-diversified-equity-mutual-funds-faced-heat-in-cy13/1214277http://www.investopedia.com/terms/c/cagr.a

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