performance evaluation of index funds
TRANSCRIPT
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Under Guidance of:
Mr.S.Raja,
Associate Professor,
PGDM, ESB.By:
P.Mounika,
2nd PGDM,
ESB.
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REVIEW OF LITERATURE
SAPAR & NARAYAN (2003):
Examined the performance of Indian Mutual funds
through various Financial tools.
Sample of 269 schemes out of 433.
58 schemes were able to satisfy investor’s
expectations by giving excess returns over expected
returns.
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RAO D. N(2006):
He studied the financial performance of
selected open ended schemes.
Analyzed that:
Growth Plans have generated higher returns
than Dividend Plans with higher risk.
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NEED OF THE STUDY
In the present market, it is noticed that number
of schemes have been floated.
It is difficult for Average Investor to evaluate
the performance.
It is also significant to know which fund is
performing well.
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PROJECT TITLE
“A COMPARITIVE STUDY ON PERFORMANCE
EVALUATION OF SELECTED INDEX SCHEMES
WITH REFERENCE IN SBI MUTUAL FUND AT
BANGALORE FOR A PERIOD OF 5 YEARS
2009-2014”
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OBJECTIVES
Evaluate performance of INDEX Funds in
terms of their RISK and RETURN.
To Suggest appropriate fund.
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SCOPE
Study is carried on particularly selected Index Mutual
funds like :
SBI Magnum Index fund, Tata Index fund nifty plan,
LIC Nomura Index nifty plan, Franklin Index, UTI Nifty
Index fund, HDFC Index nifty plan, ICICI Pru spice plan and
Quantum index fund.
The study is limited to Index funds. So, it is not applicable
to other funds.
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LIMITATIONS
Used past information which may not be the
exact indicator of future performance.
Limited to only Index schemes.
Study was conducted for a specified time
period
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INDUSTRY PROFILE
Started in 1963 with the formation of Unit Trust of India.
SEBI starts regulating from 1993 which defined the
structure of Mutual fund and AMC.
o First Phase(1964 – 1987):
First scheme – UTI scheme
o Second Phase (1987 – 1993):
Entry of Public sector funds
o Third Phase (1993 – 2003):
Entry of Private sector funds
o Fourth Phase (since February 2003)
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FACILITIES TO INVESTORS
Re-purchase facilities
Re-issue facility
Roll over
Lateral shifting
Dividend sweep facility
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ASSETS UNDER MANAGEMENT
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COMPANY PROFILE
SBI Fund management pvt. Ltd was established in 1987.
It is a joint venture between SBI and AMUNDI.
The fund manages over Rs.72, 000 crores of assets and has a diverse profile
of investors actively parking their investments across 38 active schemes.
Objective is to pool investments from small investors.
VISION:
To have consistent track record of returns.
SERVICES:
1)Mutual Funds
2)Portfolio Management and Advisory services
3)Offshore Funds
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MUTUAL FUND OPERATION
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STRUCTURE OF MUTUAL FUND
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RESEARCH TYPE:
Exploratory Research
SOURCE:
Secondary source -
• sbimf.com
• Moneycontrol.com
• Factsheets
FINANCIAL TOOLS USED:
• Standard deviation
• Beta
• Sharpe ratio
• Treynor ratio
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DATA ANALYSIS
Average Fund Return
FUND AVERAGE RETURN
SBI 14.03
Tata 13.97
LIC 13.49
Franklin 14.23
UTI 14.04
HDFC 13.54
ICICI 15.80
Quantum 14.96
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12
12.5
13
13.5
14
14.5
15
15.5
16
SBI Tata LIC Franklin UTI HDFC ICICI Quantum
Graph showing Average Returns
Average Returns
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BETA VALUES
FUND BETA VALUES
SBI 0.977
TATA 0.97
LIC 0.890
FRANKLIN 0.98
UTI 0.97
HDFC 0.93
ICICI 0.98
QUANTUM 0.97
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BETA VALUES
0.84
0.86
0.88
0.9
0.92
0.94
0.96
0.98
1
SBI TATA LIC FRANKLIN UTI HDFC ICICI QUANTUM
BETA
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STANDARD DEVIATION
FUND STANDARD DEVIATION
SBI 16.53
TATA 16.40
LIC 15.07
FRANKLIN 16.72
UTI 16.52
HDFC 15.81
ICICI 16.70
QUANTUM 16.41
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14
14.5
15
15.5
16
16.5
17
SBI TATA LIC FRANKLIN UTI HDFC ICICI QUANTUM
STANDARD DEVIATION
STANDARD DEVIATION
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RISK ADJUSTED RETURN
FUND RISK ADJ. RETURN
SBI 4.24
TATA 4.26
LIC 4.47
FRANKLIN 4.25
UTI 6.22
HDFC 4.28
ICICI 4.73
QUANTUM 4.55
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RISK ADJUSTED RETURN
3.9
4
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
SBI TATA LIC FRANKLIN UTI HDFC ICICI QUANTUM
RISK ADJ. RETURN
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SHARPE RATIO
FUND SHARPE RATIO RANK
SBI 0.36 4
TATA 0.36 4
LIC 0.36 4
FRANKLIN 0.372 3
UTI 0.36 4
HDFC 0.35 5
ICICI 0.46 1
QUANTUM 0.42 2
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0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
SBI TATA LIC FRANKLIN UTI HDFC ICICI QUANTUM
SHARPE RATIO
SHARPE RATIO
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TREYNOR RATIO
FUND TREYNOR RATIO RANK
SBI 6.17 5
TATA 6.15 7
LIC 6.16 6
FRANKLIN 6.35 3
UTI 6.22 4
HDFC 5.95 8
ICICI 7.95 1
QUANTUM 7.17 2
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0
1
2
3
4
5
6
7
8
9
SBI TATA LIC FRANKLIN UTI HDFC ICICI QUANTUM
TREYNOR RATIO
TREYNOR RATIO
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Findings:
• In terms of average returns, ICICI fund is performing well
with 15.80
• The beta of all companies are closer to benchmark i.e., 1.
This indicates all are defensive in nature.
• When compared with others, the Standard Deviation of LIC
is comparatively low.
• According to Sharpe and Treynor ratio ICICI Pru spice plan
has performed very well when compared with other funds
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Suggestions
Investors can go ahead in investing in ICICI Pru spice
plan and Quantum Index fund to acquire better returns
SBI AMC has to revise its fund portfolio to increase
fund returns and to provide investors a secure
investment
Mutual fund companies should take more efforts on
spreading awareness about Index schemes
Educate investors by conducting awareness program
especially in rural areas
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CONCLUSION
All funds are performing well, but ICICI have
performed better than others.
Investors should be very carefull at the time of
investing.
If proper information regarding schemes are
provided then there is a chance of increase in
investors investment.
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