Comparative Analysis On Mutual Fund Scheme: Post Graduate Diploma in Management

Comparative Analysis on Mutual Fund Scheme
With reference to Sundaram finance Ltd.
Report submitted in partial fulfillment of
POST GRADUATE DIPLOMA IN MANAGEMENT
CERTIFICATE This is to certify that XXXXX has completed the project titled Comparative analysis on the mutual fund scheme from Sundaram finance Ltd under my guidance completed the project successfully, for the partial fulfillment of the course: Dissertation in term= 3rd of the post Graduate Diploma in Management- XXXXX specialization (Batch XXXX).
ACKNOWLEGEMENT
This project in itself is an acknowledgement to the inspiration, drive and valuable guidance contributed to it by many individuals. This project would never have been the light of day without the help and guidance that have been received. I would like to express my sincere appreciation and thanks to XXXX who guided me all throughout the summer training. It is under her valuable guidance, constant interest and encouragement I have completed this project. He devoted his ever-precious time from his busy schedule and helped in complete understanding of the mutual fund industry in India.
Finally I would like to thank my professor XXXX, whose most valuable expertise was training to me to be success.
DECLARATION
I, B.Santhosh Kumar ,declare in full consciousness that this has been carried out by me is original and in no way has been copied or is reproduction of any prior existing work.
Date: Signature Place:
CONTENTS:-
CHAPTER I Introduction Scope of study Need for study Objective Methodology Data Collection Sampling Sampling technique Tools used Limitations of the study
CHAPTER II Industry Profile Company profile CHAPTER III Theory of the study CHAPTER IV Data analysis and interpretation CHAPTER V Findings, conclusion, suggestions
CHAPTER
1
Introduction Scope of the study Need for study Objective Methodology Data collection and processing Sampling technique Sam palling technique Tools used
Limitations of the study
Introduction:
A mutual fund is a form of collective investment. It is a pool of money collected from various investors which is invested according to the stated investment objective. The fund manager is the person who invests the money in different types of securities according to the predetermined objectives. The portfolio of a mutual fund is decided taking into consideration this investment objective. Mutual fund investors are like shareholders and they own the fund. The income earned through these investments and the capital appreciation realized by the scheme is shared by its unit holders in proportion to the number of units owned by them. The value of the investments can go up or down, changing the value of the investors holding. Mutual funds are one of the best investments ever created because they are very cost efficient and very easy to invest in .
The investment in securities through mutual funds is spread across wide range of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction at the same time. Various fund houses issue units to the investors in accordance with the quantum of money invested by them. Investors of mutual funds are known as unit holders. In India a mutual fund is required to be registered with Securities Exchange Board of India [SEBI] which regulates the securities market.
ADVANTAGES OF INVESTING IN MUTUAL FUNDS:

There are several that can be attributed to the growing popularities and suitability of mutual funds as an investment vehicle especially for retail investors.
Professional management:
Mutual funds provide the services of experienced and skilled professionals, backed by a dedicated investment research team that analysis the performance and prospects of companies and selects suitable investments to achieve the objectives of the scheme.
Diversification:
Mutual funds invest in a number of companies across a broad cross- section of industries and sectors. This diversification reduces the risk because seldom do all stocks decline at the sane time and in the same proportion. You achieve this diversification through a mutual fund with far less money than you can do on your own.
Convenient administration:
Investing in a mutual fund reduces paperwork and helps you avoid many problems such as bad deliveries, delayed payment and follow up with brokers and companies. Mutual funds save your time and make investing easy and convenient.
Return potential:
Over a medium to long term, mutual funds have the potential to provide a higher return as they invest in a diversified basket of selected securities.
Low costs:
Mutual funds are a relatively less expensive way to invest compared to directly investing in the capital markets because the benefits of scale in brokerage, custodial and other fees translate into lower costs for investors.
Liquidity:
In open ended schemes, the investors get the money back promptly at net asset value related prices from the mutual fund. In closed end schemes, the units can be sold on a stock exchange at the prevailing market price or the investor can avail of the facility of direct repurchase at NAV related prices by mutual fund.
Transparency:
You get regular information on the value of your investment in addition to disclosure on the specific investments made by your scheme, the proportion invested in each class of assets and the fund managers investment strategy and outlook.
Flexibility:
Through features such as regular investment plans, regular withdrawal plans and dividend reinvestment plans, you can systematically invest or withdraw funds according to your needs and convenience.
Affordability:
Investors individually may lack sufficient funds to invest in high-grade stocks. A mutual fund because of its large corpus allows even a small investor to take the benefit of its investment strategy.
Choice of schemes:
Mutual funds offer a family of schemes to suit your varying needs over a lifetime.
Importance of Mutual Fund:

Small investors face a lot of problems in the share market, limited resources, lack of professional advice, lack of information etc. Mutual funds have come as a much needed help to these investors. It is a special type of institutional device or an investment vehicle through which the investors pool their savings which are to be invested under the guidance of a team of experts in wide variety of portfolios of corporate securities in such a way, so as to minimize risk, while ensuring safety and steady return on investment. It forms an important part of the capital market, providing the benefits of a diversified portfolio and expert fund management to a large number, particularly small investors. Now days, mutual fund is gaining its popularity due to the following reasons.
With the emphasis on increase in domestic savings and improvement in deployment of investment through markets, the need and scope for mutual fund operation has increased tremendously.An ordinary investor who applies for share in a public issue of any company is not assured of any firm allotment. But mutual funds who subscribe to the capital issue made by companies get firm allotment of shares. Mutual fund latter sell these shares in the same market and to the Promoters of the company at a much higher price. Hence, mutual fund creates the investors confidence.
As mutual funds are managed by professionals, they are considered to have a better knowledge of market behaviors. Besides, they bring a certain competence to their job. They also maximize gains by proper selection and timing of investment. Another important thing is that the dividends and capital gains are reinvested automatically in mutual funds and hence are not fritted away. The automatic reinvestment feature of a mutual fund is a form of forced saving and can make a big difference in the long run.
The mutual fund operation provides a reasonable protection to investors. Besides, presently all Schemes of mutual funds provide tax relief under Section 80 L of the Income Tax Act and in addition, some schemes provide tax relief under Section 88 of the Income Tax Act lead to the growth of importance of mutual fund in the minds of the investors. As mutual funds creates awareness among urban and rural middle class people about the benefits of investment in capital market, through profitable and safe avenues, mutual fund could be able to make up a large amount of the surplus funds available with these people. The mutual funds attracts foreign capital flow in the country and secure profitable investment avenues abroad for domestic savings through the opening of off shore funds in various foreign investors. Lastly another notable thing is that mutual funds are controlled and regulated by S E B I and hence are considered safe. Due to all these benefits the importance of mutual fund has been increasing.
SCOPE OF STUDY:
The study was carried out for a period of 60 days, in which the main focus was to follow the performance of the different-different mutual fund companies and assent management companies. Since different companies come out with similar themes in the same season, it becomes crucial for the company to constantly perform well so as to survive the competition and provide maximum capital appreciation or return as the case may be. Other than the market the performance of the fund depends on the kind of stock chosen by the fund managers of the company. The analysis is done on the performance of funds with the same theme or sector and reason out why a fund performs better than the others in the lot.
NEED FOR THE STUDY:

The study first tries to understand the composition of the selected funds which determines the scope of performance for the funds, followed by use of ratios that are relevant in quantifying and understanding the risk and return relationships for each mutual fund scheme under consideration. Then a comparative analysis of the mutual fund schemes is done to see which fund has performed the best. This study is significant to the company as it looks into the minute details that differentiate the performances of funds of different companies with same theme or sector under similar market conditions. This would help the company to develop.
OBJECTIVES OF THE STUDY:

To understand the Functions of an Asset Management Company To understand the performances of various schemes using various tools to measure the performances. To measure and compare the performance of selected mutual fund schemes of different mutual fund companies and other Asset Management Companies.
METHODOLOGY:
Data collection:
The data required for the study may be collected either from primary sources or from secondary sources. A major portion of the data in this study has been collected through secondary sources of data.
Secondary data sources include:

Published material and annual reports of mutual fund companies Other published material of mutual funds. Research based online portals. Unpublished sources also.
Sample Profile:
The sample required for the study has been selected through random sampling method from the available list of mutual fund schemes in the market. Broadly the sample of 12 mutual fund schemes includes equity funds, debt funds and balanced funds.
The study has taken three broad categories of funds
Equity Funds Debt funds Balanced fund
Equity Funds:
1.Birla Advantage Fund Growth 2.HDFC Equity Fund Growth 3. ICICI Prudential Dynamic Plan Growth 4.Sundaram BNP Paribas growth fund- Growth
Debt funds:
1. Birla Bond Index Fund Growth 2. HDFC High Interest Fund Growth 3. ICICI Prudential Blended Plan - Option B Growth
4. Sundaram BNP Paribas fund- Growth
Balanced fund:
1. Birla Balance Fund Growth 2. HDFC Balanced Fund Growth 3. ICICI Prudential Balanced Growth 4. Sundaram BNP Paribas balanced- Growth For the purpose of estimating the performance of schemes in terms of returns, NAV of the schemes are taken into consideration. As data relating to NAV is available more frequently than any other data it is taken as the basis for estimation.
Period of the Study:

The study covered a period of 3 years from 2005 to 2008 to assess the performance of the schemes in terms of returns.
Tools & Methods: Beta:

It describes the relationship between the stocks return and the index returns. The beta value may be interpreted in the following manner, a 1% change in Nifty index would cause a 1.042% (beta) change in the particular fund. It is the slope of characteristic regression line. It signifies that a fund with a beta of more than 1 will rise more than the market and also fall more than market. Thus, if one likes to beat the market on the upside, it is best to invest in a high-beta fund. But one must keep in mind that such a fund will also fall more than the market on the way down. So, over an entire cycle, returns may not be much higher than the market. Similarly, a low-beta fund will rise less than the market on the way up and lose less on the way down. When safety of investment is important, a fund with a beta of less than one is a better option. Such a fund may not gain more than the market on the upside, but it will protect returns better when market falls.
= nxy (x)( y)
nx2 (x)2
Where, n Number of days x Returns of the index y Returns of the fund
Alpha:
It indicates that the stock return is independent of the market return. If the portfolio is well diversified, the alpha value would turn out to be zero. The intercept of characteristic regression line is alpha.
Alpha shows whether the particular fund has produced returns justifying the risks it is taking by comparing its actual return to the one 'predicted' by the beta. Alpha can be seen as a measure of a fund manager's performance. This is what the fund has earned over and above (or under) what it was expected to earn. Thus, this is the value added (or subtracted) by the fund manager's investment decisions. This can be clearly seen from the fact that Index funds always haveor should have, if they track their index perfectlyan alpha of zero. Thus, a passive fund has an alpha of zero and an active fund's alpha is a measure of what the fund manager's activity has contributed to the fund's returns. On the whole a positive alpha implies that a fund has performed better than expected, given its level of risk. So higher the alpha better are returns.
= y - x
Where, y Mean value of returns of the fund x Mean value of returns of the index Beta value of the fund
Correlation Co-efficient:
It measures the nature and the extent of relationship between the stock market index returns and a funds return in a particular period.
r=
nxy (x)( y) . 2 2 2 nx (x) ny (y)

2
Co-efficient of Determination:
The square of correlation of co-efficient is the co-efficient of determination. It gives the percentage variation in the stocks return explained by the variation in the market return.
r2
Treynors Ratio:
The Treynor Ratio, named after Jack L. Treynor, one of the fathers of modern portfolio theory, helps analyze returns in relation to the market risk of the fund. The Ratio, also known as the reward-to-volatility ratio, provides a measure of performance adjusted for market risk. Higher the Treynor Ratio, the better the performance under analysis. It is a ratio that helps the portfolio managers to determine the excess return generated as the difference between the funds return and the risk free return. The excess return to beta ratio measures the additional return on a fund per unit of systematic risk. Ranking of the funds is done based on this ratio.
T = R RFR
Where, R Return on investment. RFR Risk Free Return
Sharpes Ratio:
Sharpes ratio is similar to treynors ratio the difference being, instead of beta here we take standard deviation. As standard deviation represents the total risk experienced by the fund, it reflects the returns generated by undertaking all possible risks. A higher Sharpes ratio is better as it represents a higher return generated per unit of risk.
S = R RFR
Return
A return is a measurement of how much an investment has increased or decreased in value over any given time period. In particular, an annual return is the percentage by which it increased or decreased over any twelve-month period.
Formula: (P1-p0) P0
Mean:
The mean average is a quick mathematical measure of a number of data points as a unit. It will tell you important information about a group of data in your business. It is almost a summary of all the data in your dataset.
Mean: Mean = Sum of X values / N (Number of values).
Standard Deviation:
The degree that a single value in a group of values varies from the mean (average) of the distribution. Standard deviation is a statistical measure that uses past performance of an investment or portfolio to determine the potential range of future performance and assess the probability of that performance. Standard deviations can be calculated for an individual security or for the entire portfolio
Variance:
Variance: Variance = s2
Jensen Ratio (JR):

A risk-adjusted performance measure that represents the average return on a portfolio over and above that predicted by the capital asset pricing model (CAPM), given the
portfolio's beta and the average market return. This is the portfolio's alpha. In fact, the concept is sometimes referred to as "Jensen's alpha."
Jensen Ratio (JR) = ----------------
Data Processing and Analysis:

Data is processed with the help of Microsoft Excel and SPSS (Statistical Package for Social Sciences). The NAVs for six months of all the funds and their benchmarks were entered into the spreadsheet and the above mentioned tools were used to get the final values for the comparative analysis and interpretations.
Limitations of the Study:

The present study has the following limitations The study has been restricted to only a few schemes. The data is analyzed for a limited period of 3 years.
CHAPTER II
Industry Profile Company Profile
INDUSTRY PROFILE
Following diagram gives the structure of Indian financial system:
INDUSTRY PROFILE
Following diagram gives the structure of Indian financial system:
INDUSTRY PROFILE: MUTUAL FUNDS:

Mutual funds go back to the times of the Egyptians and Phoenicians when they sold shares in caravans and vessels to spread the risk of these ventures. The foreign and colonial government Trust of London of 1868 is considered to be the fore-runner of the
modern concept of mutual funds. The USA is, however, considered to be the Mecca of modern mutual funds. By the early - 1930s quite a large number of close - ended mutual funds were in operation in the U.S.A. Much latter in 1954, the committee on finance for the private sector recommended mobilization of savings of the middle class investors through unit trusts. Finally in July 1964, the concept took root in India when Unit Trust of India was set up.
INDIAN MUTUAL FUND INDUSTRY
The end of millennium marks 36 years of existence of mutual funds in this country. The ride through these 36 years is not been smooth. Investor opinion is still divided. While some are for mutual funds others are against it. UTI commenced its operations from July 1964 .The impetus for establishing a formal institution came from the desire to increase the propensity of the middle and lower groups to save and to invest. UTI came into existence during a period marked by great political and economic uncertainty in India. With war on the borders and economic turmoil that depressed the financial market, entrepreneurs were hesitant to enter capital market. The already existing companies found it difficult to raise fresh capital, as investors did not respond adequately to new issues. Earnest efforts were required to canalize savings of the community into productive uses in order to speed up the process of industrial growth. The then Finance Minister, T.T. Krishnamachari set up the idea of a unit trust that would be "open to any person or institution to purchase the units offered by the trust. However, this institution as we see it, is intended to cater to the needs of individual investors, and even among them as far as possible, to those whose means are small." His ideas took the form of the Unit Trust of India, an intermediary that would help fulfill the twin objectives of mobilizing retail savings and investing those savings in the capital market and passing on the benefits so accrued to the small investors. UTI commenced its operations from July 1964 "with a view to encouraging savings and investment and participation in the income, profits and gains accruing to the Corporation from the acquisition, holding, management and disposal of securities." Different provisions of the UTI Act laid down the structure of management, scope of business, powers and functions of the Trust as well as accounting, disclosures and regulatory requirements for the Trust. One thing is certain the fund industry is here to stay. The industry was one-entity show till 1986 when the UTI monopoly was broken when SBI and Can bank mutual fund
entered the arena. This was followed by the entry of others like BOI, LIC, GIC, etc. sponsored by public sector banks. Starting with an asset base of Rs. 25 crore in 1964 the industry has grown at a compounded average growth rate of 27% to its current size of Rs.90000 crore.
The period 1986-1993 can be termed as the period of public sector mutual funds (PMFs). From one player in 1985 the number increased to 8 in 1993. The party did not last long. When the private sector made its debut in 1993-94, the stock market was booming. The openings up of asset management business to private sector in 1993 saw international players like Morgan Stanley, Jardine Fleming, JP Morgan, George Soros and Capital International along with the host of domestic players join the party. But for the equity funds, the period of 1994-96 was one of the worst in the history of Indian Mutual Funds. 1999YEAR OF THE FUNDS
Mutual funds have been around for a long period of time to be precise for 36 yrs but the year 1999 saw immense future potential and developments in this sector. This year signaled the year of resurgence of mutual funds and the regaining of investor confidence in these MFs. This time around all the participants are involved in the revival of the funds ----- the AMCs, the unit holders, the other related parties. However the sole factor that gave lifer to the revival of the funds was the Union Budget. The budget brought about a large number of changes in one stroke. An insight of the Union Budget on mutual funds taxation benefits is provided later.
It provided centre stage to the mutual funds, made them more attractive and provides acceptability among the investors. The Union Budget exempted mutual fund dividend given out by equity-oriented schemes from tax, both at the hands of the investor as well as the mutual fund. No longer were the mutual funds interested in selling the concept of mutual funds they wanted to talk business which would mean to increase asset base, and to get asset base and investor base they had to be fully armed with a whole lot of schemes for every investor .So new schemes for new IPOs were inevitable. The quest to attract investors extended beyond just new schemes. The funds started to regulate themselves and were all out on winning the trust and confidence of the investors under the aegis of the Association of Mutual Funds of India (AMFI) One cam say that the industry is moving from infancy to adolescence, the industry is maturing and the investors and funds are frankly and openly discussing difficulties opportunities and compulsions.
First Phase 1964-87:
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management.
Second Phase 1987-1993 (Entry of Public Sector Funds):
1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990 At the end of 1993, the mutual fund industry had assets under management of Rs.47, 004 crores.
Third Phase 1993-2003 (Entry of Private Sector Funds):
With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under management was way ahead of other mutual funds.
Fourth Phase since February 2003 In February 2003:
Following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29, 835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of
the Mutual Fund Regulations. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.
PRESENT ASSET UNDER MANAGEMENT OF MUTUAL FUND COMPANIES:

AVERAGE SUM OF MUTUAL FUND COMPANIES FOR THE MONTH Excluding fund Fund of Excluding fund fund of Of funds Funds of funds funds 1. ABN AMRO Mutual Fund 687443.08 36549.73 626525.88 35964.53
2. AIG Global Investment Group Mutual Fund 3. Benchmark Mutual Fund 4. Birla Sun Life Mutual Fund 5. BOB Mutual Fund 6. Can bank Mutual Fund 7. DBS Chola Mutual Fund 8. Deutsche Mutual Fund 9. DSP Merrill Lynch Mutual Fund 10. Escorts Mutual Fund 11. Fidelity Mutual Fund 12. Franklin Templeton Mutual Fund 13. HDFC Mutual Fund 14. HSBC Mutual Fund 15. ICICI Prudential Mutual Fund 16. ING Vysya Mutual Fund 17. JM Financial Mutual Fund 18. JP Morgan Mutual Fund 19. Kotak Mahindra Mutual Fund 20. LIC Mutual Fund 21. Lotus India Mutual Fund 22. Morgan Stanley Mutual Fund 23. PRINCIPAL Mutual Fund 24. Quantum Mutual Fund 25. Reliance Mutual Fund 26. Sahara Mutual Fund 27. SBI Mutual Fund 28. Standard Chartered Mutual Fund 29. Sundaram BNP Paribas Mutual Fund 30. Tata Mutual Fund 31. Taurus Mutual Fund 32. UTI Mutual Fund Grand Total
N/A 641785.64 2371946.37 9759.11 291004.49 247308.99 728368.45 1185328.84 13247.54 881348.73 2627635.74 3614666.74 1458564.08 5070300.11 571786.36 377249.74 N/A 1672255.56 990442.2 362314.83 318066.94 1314851.07 6105.59 5914347.61 17646.54 1966082.91 1617021.76 1014528.63 1408188.86 30547.23 4007016.87 41417160.61
N/A 0 1905.17 0 0 0 0 0 0 4365.86 30636.2 0 0 3907.38 81847.32 0 N/A 54018.22 0 0 0 0 0 0 0 0 1534.45 0 0 0 0 214764.33
N/A 543258.09 2177700.58 10249.22 267091.92 211747.28 718837.47 1176345.78 11715.44 844375.84 2536497.59 3388820.86 1350481 4599486.19 445335.57 350488.13 N/A 1454533.63 969282.55 280596.17 310005.39 1089590.26 6015.5 5763304.33 17316.89 1952036.51 1583682.27 899695.06 1345348.07 30198.75 3677723.39 38638285.61
N/A 0 1890.64 0 0 0 0 0 0 4476.53 31101.51 0 0 3870.1 83156.41 0 N/A 52628.06 0 0 0 0 0 0 0 0 1579.72 0 0 0 0 214667.5
MARKET SHARE OF MUTUAL FUND COMPANIES AS ON 20, JUNE 2007

1. ABN AMRO Mutual Fund 1.621515733
2. AIG Global Investment Group Mutual Fund 3. Benchmark Mutual Fund 4. Birla Sun Life Mutual Fund 5. BOB Mutual Fund 6. Canbank Mutual Fund 7. DBS Chola Mutual Fund 8. Deutsche Mutual Fund 9. DSP Merrill Lynch Mutual Fund 10. Escorts Mutual Fund 11. Fidelity Mutual Fund 12. Franklin Templeton Mutual Fund 13. HDFC Mutual Fund 14. HSBC Mutual Fund 15. ICICI Prudential Mutual Fund 16. ING Vysya Mutual Fund 17. JM Financial Mutual Fund 18. JPMorgan Mutual Fund 19. Kotak Mahindra Mutual Fund 20. LIC Mutual Fund 21. Lotus India Mutual Fund 22. Morgan Stanley Mutual Fund 23. PRINCIPAL Mutual Fund 24. Quantum Mutual Fund 25. Reliance Mutual Fund 26. Sahara Mutual Fund 27. SBI Mutual Fund 28. Standard Chartered Mutual Fund 29. Sundaram BNP Paribas Mutual Fund 30. Tata Mutual Fund 31. Taurus Mutual Fund 32. UTI Mutual Fund
1.40600982 5.636121131 0.026526073 0.691262347 0.548024522 1.860427963 3.044508216 0.030320807 2.185334641 6.564726022 8.770629459 3.495188719 11.90396033 1.152575905 0.907100624 3.764488012 2.508606515 0.726212785 0.80232698 2.819975687 0.015568755 14.91604568 0.044817956 5.052078474 4.098738453 2.328506676 3.48190415 0.078157583 9.518339988
COMPANY PROFILE
The Company was incorporated in 1954, with the object of financing the purchase of commercial vehicles and passenger cars.
The company was started with a paid-up capital of Rs.2.00 Lacs and later went public in 1972. The Company's shares were listed in the Madras Stock Exchange in 1972 and in the National Stock Exchange in January 1998. Subsequently, the equity shares of the Company have been delisted from Madras Stock Exchange Limited (MSE) with effect from January 27, 2004, in accordance with SEBI (Delisting of Securities) Guidelines, 2003, for voluntary delisting.
Sundaram BNP Paribas Asset Management Company Ltd., the investment managers of Sundaram BNP Paribas Mutual Fund, is a joint venture between the Sundaram finance Group and the BNP Paribas asset management. The joint venture brings together the Sundaram Finance Group's experience in the Indian market and BNP Paribas global experience.
Since its inception in 1996, Sundaram Mutual fund has emerged as one of India's leading Mutual Funds managing assets of a large investor base. The fund offers a range of investment options, which include diversified and sector specific equity schemes, fund of fund schemes, hybrid and monthly income funds, a wide range of debt and treasury products and offshore funds. Sundaram BNP Paribas follows a long-term, fundamental research based approach to investment. The approach is to identify companies, which have excellent growth prospects and strong fundamentals. The fundamentals include the quality of the companys management, sustainability of its business model and its competitive position, amongst other factors. Sundaram BNP Paribas Asset Management Company has one of the largest team of research analysts in the industry, dedicated to tracking down the best companies to invest in.
SUNDARAM FINANCE: Sundaram Finance Limited is engaged primarily in the business of financing. The activities of the Company span savings products like deposits and mutual funds, car and commercial vehicle finance, insurance, home loans, software solutions, business process outsourcing, tyre finance, fleet cards and logistics services. Sundaram Finance Limited has a network of over 150 branches spread across India. The Company was incorporated in 1954, with the object of financing the purchase of commercial vehicles and passenger cars. The company was started with a paid-up capital of Rs.2.00 Lakes and later went public in 1972.The Company's shares were listed in the Madras Stock Exchange in 1972 and in the National Stock Exchange in January 1998.
Company Hierarchy
Organizational Hierarchy
Managing Director Chief Executive Officer Directors Vice President National Head Zonal Head Regional Head Territory Manager Assistant Manager Trainee Manager
Managerial Functions Sales Regional Sales Manager Territory Manager Regional Manager Assistant Manager Branch Manager Branch
CHAPTER
III
Theory of the study
Types of Mutual Funds:

Mutual fund schemes may be classified on the basis of its structure and its investment objective.
By Structure:
Open-end Funds: An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices. The key feature of open-end schemes is liquidity. Closed-end Funds: A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where they are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor.
Interval Funds: Interval funds combine the features of open-ended and close-ended schemes. They are open for sale or redemption during pre-determined intervals at NAV related prices.
By Investment Objective:
Growth Funds: The aim of growth funds is to provide capital appreciation over the medium to long term. Such schemes normally invest a majority of their corpus in equities. It has been proved that returns from stocks, have outperformed most other kind of investments held over the long term. Growth schemes are ideal for investors having a long-term outlook seeking growth over a period of time. Income Funds: The aim of income funds 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. Income Funds are ideal for capital stability and regular income. Balanced Funds: The aim of balanced funds is to provide both growth and regular income. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income securities in the proportion indicated in their offer documents. In a rising stock market, the NAV of these schemes may not normally keep pace, or fall equally when the market falls. These are ideal for investors looking for a combination of income and moderate growth. Money Market Funds: The aim of money market funds is to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer shortterm instruments such as treasury bills, certificates of deposit, commercial paper and interbank call money. Returns on these schemes may fluctuate depending upon the interest rates prevailing in the market. These are ideal for Corporate and individual investors as a means to park their surplus funds for short periods.
Other Schemes:
Tax Saving Schemes: These schemes offer tax rebates to the investors under specific provisions of the Indian Income Tax laws as the Government offers tax incentives for investment in specified avenues. Investments made in Equity Linked Savings Schemes (ELSS) and Pension Schemes are allowed as deduction u/s 88 of the Income Tax Act, 1961. The Act also provides opportunities to investors to save capital gains u/s 54EA and 54EB by investing in Mutual Funds. Industry Specific Schemes :Industry Specific Schemes invest only in the industries specified in the offer document. The investment of these funds is limited to specific industries like Infotech, FMCG, and Pharmaceuticals etc. Index Schemes: Index Funds attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50 Sectoral Schemes: Sectoral Funds are those, which invest, exclusively in a specified sector. This could be an industry or a group of industries or various segments such as 'A' Group shares or initial public offerings.
RISKS ASSOCIATED WITH MUTUAL FUNDS
Investing in mutual funds, as with any security, does not come without risk. One of the most basic economic principles is that risk and reward are directly correlated. In other words, the greater the potential risk the greater the potential return. The types of risk commonly associated with mutual funds are:
Market risk:
Market risk relates to the market value of a security in the future. Market prices fluctuate and are susceptible to economic and financial trends, supply and demand, and many other factors that cannot be precisely predicted or controlled.
Political risk:
Changes in the tax laws, trade regulations, administrated prices, etc are some of the many political factors that create market risk. Although collectively, as citizens, we have indirect control through the power of our vote individually, as investors, we have virtually no control.
Inflation risk:
Interest rate risk relates to futures changes in interest rates. For instance, if an investor invests in a long term debt mutual fund scheme and interest rates increase, the NAV of the scheme will fall because the scheme will be end up holding debt offering lower interest rates.
Business risk:
Business risk is the uncertainty concerning the future existence, stability, and profitability of the issuer of the security. Business risk is inherent in all business ventures. The future financial stability of a company cannot be predicted or guaranteed, nor can the price of its securities. Adverse changes in business circumstances will reduce the market price of the companys equity resulting in proportionate fall in the NAV of the mutual fund scheme, which has invested in the equity of such a company.
Economic risk:
Economic risk involves uncertainty in the economy, which, in turn, can have an adverse effect on a companys business. For instance, if monsoons fail in a year, equity stocks of agriculture based companies will fall and NAVs of mutual funds, which have invested in such stocks, will fall proportionately.
TAX BENEFITS:The taxman has over the years, been more or less kind to mutual funds, with laws varying from time to time; the overall objective has been to encourage the growth of the mutual funds industry. Currently, a variety of tax laws apply to mutual funds, which are broadly listed below:
Capital gains:
Units of mutual fund schemes held for a period more than 12 months are treated as long term capital assets. In such cases, the unit holder has the option to pay capital gains tax at either 20% (with indexation) or 10% without indexation.
Tax deducted at source:

For any income credited or paid by a fund, no tax is deducted or withheld at source. The relevant sections in the income tax act governing this provision are section 194K and 196A.
Wealth tax:
Mutual fund units are not currently treated as assets under section 2 of the wealth tax act and are therefore not liable to tax.
Income from units:

Any income received from units of the schemes of the mutual fund specified under section 23(D) is exempt under section 10(33) of the act. While section 10(23D) exempts income of specified mutual funds from tax (which currently includes all mutual funds operating in India), section 10(33) exempts income from funds in the hands of the unit holder. However, this does not mean that there is no tax at all on income distributions by mutual fund.
Income distribution tax:

As per prevailing tax laws, income distributed by schemes other than open-end equity schemes is subject to tax at 20% (plus surcharge of 10%). For this purpose, equity schemes have been defined to be those schemes that have more than 50% of their assets in the form of equity. Open-end equity schemes have been left out of the purview of this distribution tax for a period of three years beginning from April 1999.
Different Modes of Receiving the Income Earned From Mutual Fund Investments
Mutual funds offer three methods of receiving income:
Growth plan:
In this plan, dividend is neither declared or paid out to the investor but is built into the value of the NAV. In other words, the NAV increases over time due to such incomes and the investor realizes only the capital appreciation on redemption of his investment.
Income funds:
In this plan, dividend are paid outs to the investor. In other words, the NAV only reflects the capital appreciation or depreciation in market price of the underlying portfolio.
Dividend re-investment plan:

In this case, dividend is declared but not paid out to the investor, instead, it is reinvested back into the scheme at the then prevailing NAV. In other words, the investor is given additional units and not cash as dividend.
Net asset value (NAV)

The net asset value of the fund is the cumulative market value of the asset fund net of its liabilities. In other words, if the fund is dissolved or liquidated, by selling off all the assets in the fund, this is the amount that the shareholders would collectively own. This gives ride to the concept of net asset value per unit, which is the value, represented by the ownership of one unit in the fund. It is calculated simply by dividing the net asset value of the fund by the number of units. However, most people refer loosely to the NAV per unit as NAV, ignoring the per unit. We also abide by the same convention.
CALCULATION OF NAV
The most important part of the calculation is the valuation of the assets owned by the fund. Once its is calculated, the NAV is simply the net value of assets divided by the number of units outstanding. The detailed methodology for the calculation of the asset value is given below.
Asset value is equal to
Sum of market value of shares/debentures +liquid assets/cash held, if any +dividend/interest accrued Amount due on unpaid assets Expenses accrued but not paid
Details on the above items:
For liquid shares/debentures, valuation is done on the basis of the last or closing market price on the principal exchange where the security is traded. For illiquid and unlisted and/or thinly traded shares/debentures, the value has to be estimated. For shares, this could be the book value per share or an estimated market price. If suitable benchmarks are available. Fore debentures and bonds, value is estimated on the basis of yields of comparable liquid securities after adjusting for illiquidity. The value of fixed interest bearing securities moves in a direction opposite to interest rate changes valuation of debentures and bonds is a big problem since most of them are unlisted and thinly traded. This gives considerable leeway to the AMCs on valuation and some of the AMCs are believed to take advantage of this and adopt flexible valuation policies depending on the situation. Interest is payable on debentures/bonds on periodic basis say every 6 months. But, with every passing day, interest is said to be accrued, at the daily interest rate, which is calculated by dividing the periodic interest payment with the number of days in each period.
Thus, accrued interest on a particular day is equal to the daily interest rate multiplied by the number of days since the last interest payment date. Usually, dividends are proposed at the time of annual general meeting and become due on the record date. There is a gap between the dates on which it becomes due and the actual payment date. In the immediate period, it is deemed to be Accrued. Expenses including management fees, custody charges etc. Are calculated on daily basis.
MUTUAL FUND INVESTING STRATEGIES Systematic investment plan (SIPs):

These are best suited for young people who have started there careers and needs to built there wealth. Sips entail the investor to invest a fixed sum of money at regular intervals in the mutual fund schemes the investor as chosen, an investor opting for sip in xyz mutual fund scheme will need to invest certain sum on money every month/quarter/half yearly in the scheme. By investing through sip, one ends up buying more units when the price is low and fewer units when the price is high. However, over a period of time these market fluctuations are generally averaged. And the average cost of the investment is often reduced. It is far better to invest small amount of money regularly, rather than save up to make a large investment. This is because while saving is in the lump sum, it may not earn much interest.
Systematic withdrawal plan (SWPs):

These plans are suited for people nearing retirement .In these plans, an investor invest in a mutual fund scheme and is allowed to withdraw a fixed sum of money at regular intervals to take care of its expenses.
Systematic transfer plan (STPs):

They allows investor to transfer on a periodic basis a specified amount from one scheme to another within the same fund family- meaning two schemes belonging to the same mutual fund. A transfer will be treated as redemption of units from the scheme from which the transfer is made. Such redemption or investment will be at the applicable NAV. This service allows the investor to manage his investments actively to achieve his objectives. Many funds do not even charge any transaction fees for his service- an added advantage for the active investor.
CHAPTER IV
Data analysis and interpretation
Data Analysis and Interpretation

Introduction:
Asset allocation strategies of various select mutual fund schemes are presented in the following tables.
Equity Funds:
Sundaram BNP Paribas Growth Fund (G):
Investment Information Fund type Investment Plan Asset Size (Rs cr) Min .Investment Last Dividend Bonus Asset Allocation Equity Debt Mutual Funds Money Market Cash / Call Open-Ended Growth 26.05 (Jul-31-2008) Rs 5,000 N.A. N.A. Percentage held 0.00 73.87 N.A 0.00 26.13
Asset Allocation(% ) Sundaram BNP Paribas Growth fund

0% 26% Equity Debt 0% Mutual Funds Money Market 74% Cash / Call
SCHEME PERFORMANCE:
1month -0.05635 3month 0.06 6month 0.362075 1year -0.16089
Birla Advantage Fund Growth

Investment information Fund Type Investment Plan Asset Size (RS cr) Min .Investment Last Dividend Bonus Asset Allocation (%) Equity Debt Money Market Cash / Call Open- Ended Growth 433.61(May-30-2008) Rs. 5,000 N.A N.A Percentage held 84.89 0.00 0.00 15.10
Asset Allocation (% ) of Birla Advantage Fund (G)
15% Equity Cash / Call 85%
SCHEME PERFORMANCE
1 month -0.00779 3 months 0.352075 6 months -0.02593 1 yrs* -0.15439
HDFC Equity Fund Growth

Investment Information Fund Type Investment Plan Asset Size(Rs cr) Min. Investment Last Dividend Bonus Asset Allocation (%) Equity Debt Mutual fund Mutual Market Cash / Call Open- Ended Growth 4,030.92(May-30-2008) Rs.5,000 N.A N.A Percentage held 98.51 0.00 N.A 1.85 -0.36
Asset Allocation (% ) of HDFC Equity Fund (G)
2%
0% Equity Money Market Cash / Call 98%
SCHEME PERFORMANCE 1 month

0.080941
3 months
0.151203
6 months
0.136557
1 yrs*
-0.08444
ICICI Prudential Dynamic Plan Growth

Investment Information Fund Type Investment Type Investment Plan Asset Size (Rs cr) Last Dividend Bonus Asset Allocation(%) Equity Debt Mutual Fund Money Market Cash / Call Open-Ended Growth 1,783.12(May-30-2008) Rs. 5,000 N.A N.A Percentage held 85.24 3.78 N.A 0.00 11.01
Asset Allocation (% ) of ICICI Pru Dynamic Plan (G)
4%
11% Equity Debt Cash / Call 85%

0.091597
3 months
0.119449
6 months
0.082544
1 yrs*
-0.06898
(EQUITY FUND ONE MONTH COMPARISON OF RETURN)

Company Name and Fund HDFC Equity Fund - Growth Birla Advantage Fund - Growth ICICI Prudential Dynamic Plan Growth Sundaram BNP Paribas Growth Absolute return
0.080941 -0.00779
Mean return
0.00285 (0.28%) -0.31817 (-31.81%) 0.003216 (0.32%)
Standard Deviation
0.011736 1.102299
Variance 0.000137733 1.215063085 0.000168714 0.000325
0.091597
0.012989
-0.05635
-0.00249(0.25%)
0.018029
ONE MONTH OF EQUITY FUND

0.15 0.1 0.05 VALUE 0 -0.05 1 -0.1 -0.15 -0.2 TIME PERIOD OF NAV 4 7 10 13 16 19 22 25 28 Sundaram BNP paribas-growth ICICI Purdential Dynamic plan-growth Birla Advantage fund -growth HDFC Equity Fund Growth
FINDINGS:
From the above table we can see that ICICI Prudential Dynamic Plan - Growth fund is giving the highest absolute return over 1 months (0.091597) while it is highest in term of fluctuation of returns (variance=0.000168714). HDFC Equity Fund - Growth is having the minimum fluctuation in return generated (variance=0. 0.000137733).
SUGGESTIONS:
a) For investor with high risk appetite go for: Sundaram BNP Paribas - Growth b) For investor with moderate risk appetite: Go for ICICI Prudential Dynamic Plan Growth c) For investor with low risk appetite: HDFC Equity Fund - Growth
(EQUITY FUND SIX MONTHS COMPARISON OF RETURN)

Company Name and Fund HDFC Equity Fund - Growth Birla Advantage Fund - Growth ICICI Prudential Dynamic Plan Growth IC Sundaram BNP Paribas Growth Absolute return 0.136557 -0.02593 0.082544 0.362075 Mean return 0.000897 0.01695 0.000628 0.001909 Standard Deviation 0.018978 1.020131 0.019227 0.024218 Variance 0.0003601 1.0406672 0.0003696 0.000586
SIX MONTH OF EQUITY FUND

0.6 0.4 0.2 0 VALUE -0.2 1 -0.4 -0.6 -0.8 -1 -1.2 TIME PERIOD OF NAV 21 41 61 81 101 121 141 161 181 Sundaram BNP paribas-growth ICICI Purdential Dynamic plan-growth Birla Advantage fund growth HDFC Equity Fund Growth
FINDINGS:
From the above table we can see that Sundaram BNP Paribas Growth fund is giving the highest absolute return over 6 months (0.362075) while it is highest in term of fluctuation of returns (variance=0.000586). HDFC Equity Fund - Growth is also having the less fluctuation in return generated (variance=0.0003601).
SUGGESTIONS:
a) For investor with high risk appetite go for: Birla Advantage Fund - Growth b) For investor with moderate risk appetite: Go for HDFC Equity Fund Growth c) For investor with low risk appetite: Sundaram BNP Paribas Growth
Sundaram BNP Paribas fund (Growth)

DATE 1-jun-05 3-Oct-05 1-Feb-06 1-Jun-06 3-Oct-06 1-Feb-07 1-Jun-07 1-Oct-07 1-Feb-08 2-Jun-08 TOTAL S&P CNX NIFTY 2087.55 2630.05 2971.55 2962.25 3569.6 4137.2 4297.05 5068.95 5317.25 4739.6 RETURN (X) NAV 34.5129 25.9874 12.98454 -0.31297 20.503 15.90094 3.863724 17.96349 4.89845 -10.8637 90.92488 43.6832 51.9849 53.2689 61.1365 70.6645 75.7267 88.6473 94.3535 84.3726 26.57064 19.00433 2.469948 14.76959 15.5848 7.16371 17.06215 6.43697 -10.5782 98.48394 675.345 168.5984 -0.097949 420.3728 252.8399 14.92837 322.6869 23.99482 118.0199 1996.884 705.9992 361.1646 6.100643 218.1409 242.8859 51.31874 291.1168 41.43458 111.8983 2030.06 690.502 246.7626 -0.77301 302.8209 247.813 27.6786 306.4956 31.53118 -4.50569048 114.9184 1967.749 21.52085831 3.72651E-09 463.1473 952.3833 15.62798424 8.061670825 8.472712356 3.826933155 4.642137592 3.778950152 6.119485488 244.2339 64.99054 71.78685 14.64542 21.54944 14.28046 37.4481 20.30125 RETURN (Y) X2 Y2 XY (Y-Y1) (Y-Y)2
CALCULATION OF ABOVE TABLE

Beta 0.9022 Alfa 1.82595 Standard Deviation 10.2869 Coefficient of determination 0.9599 Sharpe ratio (SR) 8.65022 Treynor Ratio (TR 98.62995 Jensen Ratio (JR) 2.0261
Note (I have taken RF benchmark 9.5 the fixed deposit of bank interest, the days duration is 3 year)
Birla Advantage Fund Growth

DATE 1-jun-05 3-Oct-05 1-Feb-06 1-Jun-06 3-Oct-06 1-Feb-07 1-Jun-07 1-Oct-07 1-Feb-08 2-Jun-08 S&P CNX NIFTY 2087.55 2630.05 2971.55 2962.25 3569.6 4137.2 4297.05 5068.95 5317.25 4739.6 RETURN (X) NAV RETURN (Y) X2 Y2 XY (Y-Y1) (Y-Y)2
66.86 25.9874 84.34 12.98454 98.4 -0.31297 96.08 20.503 111.36 15.90094 129.21 3.863724 132.97 17.96349 153.95 4.89845 159.08 -10.8637 139.97 -12.0128 82.397 98.48394 3.332251 -10.5782 144.3079 1889.662 130.5037 1919.061 -22.1155837 82.3969994 489.099 1143.38 15.778 6.43697 11.10389 16.32286 -6.77050927 45.8398 2.909991 17.06215 248.9451 283.4278 5.67523504 32.20829 16.02909 7.16371 8.46805 11.2434 -7.19276851 51.73592 15.90341 15.5848 256.9319 254.8777 5.92633483 35.12144 -2.35772 14.76959 252.9186 326.0676 5.80065382 33.64758 16.67062 2.469948 5.55886 0.737892 -12.4604836 155.2637 26.14418 19.00433 277.9095 216.4604 6.56785892 43.13677 26.57064 683.5182 679.4194 16.0414177 257.3271
TOTAL
90.92488

Beta 1.008 Alfa -1.025 Standard Deviation 11.2713 Coefficient of determination 0.9392 Sharpe ratio (SR) 4.78116 Treynor Ratio (TR 53.4623 Jensen Ratio (JR) -1.0168
HDFC Equity Fund Growth

DATE 1-jun-05 3-Oct-05 1-Feb-06 1-Jun-06 3-Oct-06 1-Feb-07 1-Jun-07 1-Oct-07 1-Feb-08 2-Jun-08 S&P CNX NIFTY 2087.55 2630.05 2971.55 2962.25 3569.6 4137.2 4297.05 5068.95 5317.25 4739.6 RETUR N (X) NAV RETURN (Y) X2 Y2 XY (Y-Y1) (Y-Y)2
71.78
25.9874
26.57064 94.324 31.40708 19.00433 112.483 19.25173 2.469948 112.327 -0.13869 14.76959 132.634 18.07847 15.5848 152.415 14.91397 7.16371 161.903 6.225109 17.06215 184.165 13.75021 6.43697 191.075 3.75207 -10.5782 167.237 -12.4757 94.76422 98.48394 155.6438 2303.852 135.5326 2098.981 14.07803 18.37933 189.0682 247.0017 3.64744846 6.35068985 22.5784894 94.764217 13.30388 40.33126 509.7882 1307.684 38.75198 24.0521 222.4266 237.1462 4.81121379 3.87765092 23.14778 15.03618 326.831 370.6627 7.97570733 63.61191 0.019234 0.043405 370.629 249.9749 9.14896809 10.2414476 83.70362 104.8872 986.4045 816.1883 21.304313 453.8738
12.98454 -0.31297 20.503 15.90094 3.863724 17.96349 4.89845 -10.8637 90.92488
TOTAL

ICICI Prudential Dynamic Plan Growth

DATE 1-jun-05 3-Oct-05 1-Feb-06 1-Jun-06 3-Oct-06 1-Feb-07 1-Jun-07 1-Oct-07 1-Feb-08 2-Jun-08 TOTAL S&P CNX NIFTY 2087.55 2630.05 2971.55 2962.25 3569.6 4137.2 4297.05 5068.95 5317.25 4739.6 RETURN (X) NAV RETURN (Y) X2 Y2 XY (Y-Y1) (Y-Y)2
28.7764 25.9874 38.8002 12.98454 44.1348 -0.31297 48.7833 20.503 55.6132 15.90094 68.1413 3.863724 70.0892 17.96349 77.9361 4.89845 81.6861 -10.8637 74.5291 90.92488 -8.76159 105.7468 4.811634 -10.5782 98.48394 76.76543 2450.251 95.18326 2056.622 -18.8643 14.82191 355.8636 1232.174 11.19559 6.43697 23.15182 23.56955 -5.29113 27.99601 2.858619 17.06215 125.3413 201.1118 1.092831 1.194279 22.52721 7.16371 8.171701 11.04491 -7.24414 52.47758 14.00049 15.5848 507.475 358.2038 12.42445 154.3669 10.5325 14.76959 196.0137 287.0519 3.897728 15.19228 13.7489 2.469948 110.9337 -3.29634 0.429745 0.184681 34.83341 19.00433 189.0322 178.5232 3.646138 13.29432 26.57064 1213.366 905.2297 24.73064 611.6046

Findings and Suggestions:

Companys Name ICICI Prudential dynamic planGrowth HDFC equity fund-Growth Birla advantage fund-Growth Sundaram BNP Paribas-Growth Beta Alfa Standard Deviation 11.7 Coefficien t of determina tion 0.87065 Sharpe ratio (SR) 6.6017 Treynor Ratio (TR 84.203 Jensen Ratio (JR) 2.705
0.9173
2.482
1.059 1.008 0.9022
-0.16 -1.025 1.82595
12.00 11.2713 10.2869
0.96700 0.9392 0.9599
5.522 4.78116 8.65022
62.572 53.462 98.62995
-0.152 -1.0168 2.0261
Alpha & Beta:
The above table shows that ICICI Prudential dynamic plan-Growth fund is comparatively more volatile with a beta of , 0.9173 though compared to the market all the funds are safer to invest. And also the alpha values of few funds are positive and few funds are negative. ICICI Prudential dynamic plan-Growth is showing an alpha of 2.482 which suggests that the fund is well diversified and quite efficient in reducing the impact of market risk.
Co-efficient of Determination:
All company is having positive coefficient of determination

Sharpes Ratio & Treynors Ratio:
Sharp In the above table, the Treynors ratio for Birla Advantage Fund - Growth followed by ICICI Prudential Dynamic Plan - Growth and then HDFC Equity Fund - Growth. It suggests that Birla Advantage Fund - Growth is giving highest returns over the risk free returns after taking the market risk in to account. On the other hand HDFC equity fundGrowth is giving the lowest returns. The sharpes ratio of Birla Advantage Fund - Growth fund highest suggesting that after taking the total risk in to consideration the fund is giving good return return over and above the risk free returns. From the above it can be suggested that HDFC equity fund-Growth can be ruled out of investment decision alternative. Among the other three funds Birla is giving higher returns taking lower risk as compared to Sundaram BNP Paribas-Growth and ICICI, and HDFC which is giving lower returns.
Debt Fund
Sundaram BNP Paribas Bond Saver (G):
Investment Information Fund Type Investment Plan Asset Size(Rs cr) Min. Investment Last Dividend Bonus Asset Allocation(%) Equity Debt Mutual Funds Money Market Cash/Call Open-Ended Growth 26.05(jul-31-2008) Rs 5,000 N.A. N.A. Percentage held 0.00 73.87 N.A. 0.00 26.13
Asset Allocation(% ) Sundaram BNP paribas Bond Saver(Growth)

0% 26% Equity Debt 0% Mutual Funds Money Market 74% Cash/Call
SCHEME PERFORMANCE
1 month -0.007171
3 months 0.005541
6 months -0.02451
1 year -0.06966
ICICI Prudential Blended Plan - Option B Growth:

Investment Information Fund Type Investment Plan Asset Size(Rs cr) Min .Investment Last Dividend Bonus Asset Allocation(%) Equity Debt Money Market Cash / Call Open-Ended Growth 16.90(May-30-2008) Rs. 5,000 N.A N.A Percentage held 0.00 82.13 0.00 17.87
Asset Allocation (% ) of ICICI Pru Blended Plan - B (G)
18% Debt Cash / Call 82%
SCHEME PERFORMANCE
1 month
-0.00901
3 months
-0.02317
6 months
-0.06014
1 yrs*
-0.11939
HDFC High Interest Fund Growth:

Investment Information Fund Type Investment Plan Asset Size (Rs cr) Min . Investment Last Dividend Bonus Asset Allocation (%) Equity Debt Money Market Cash / Call
Open-Ended Growth 42.74(May-30-2008) Rs,5000 N.A N.A Percentage held 0.00 67.72 28.76 3.52
Asset Allocation (% ) of HDFC High Interest Fund (G)
4% 29% Debt Money Market 67% Cash / Call

0.004217
3 months
0.005554
6 months
-0.04516
1 yrs*
-0.07683
Birla Bond Index Fund Growth:

Investment Information Fund Type Investment Plan Asset Size(Rs cr) Min . Investment Last Dividend Bonus Asset Allocation (%) Equity Debt Money Market Cash / Call Open-Ended Growth 0.35(May-30-2008) Rs.25,000 N.A N.A Percentage held 0.00 33.40 0.00 66.60
Asset Allocation (% ) of Birla Bond Index Fund Plan A
33% Debt Cash / Call 67%
SCHEME PERFORMANCE 1 month -0.00418 3 months -0.0157 6 months -0.03895 1 yrs* -0.07688
(DEBT FUND ONE MONTH COMPARISON OF RETURN)

Company Name and Fund Birla Bond Index Fund Growth HDFC High Interest Fund Growth ICICI Prudential Blended Plan Option B Growth Sundaram BNP paribas bond saver-Growth Absolute return -0.00418 0.004217 -0.00901 Mean return Standard Deviation 0.000256 0.000831 0.000202 Variance
-0.00015 0.000151 -0.00032
0.000000065 0.00000069 0.00000004
-0.007171
-0.00021
0.001614
0.00000260
ONE MONTH DEBT FUND

0.008 0.006 0.004 VALUE 0.002 0 -0.002 -0.004 -0.006 TIME PIREOD OF NAV 1 4 7 10 13 16 19 22 25 28 31 Birla bond index fundgrowth HDFC high interest fund -growth ICICI prudential blended plan option B-growth Sundaram paribas balance fund-growth
FINDINGS:
From the above table we can see that HDFC High Interest Fund Growth fund is giving the highest absolute return over 1 months (0.004217) while it is highest in term of fluctuation of returns (variance=0.00000069). ICICI Prudential Blended Plan - Option B Growth is having the minimum fluctuation in return generated (variance=0.00000004).
SUGGESTIONS:
a)For investor with high risk appetite go for Sundaram BNP Paribas bond saver-Growth b)For investor with moderate risk appetite: Go for HDFC High Interest Fund - Growth c)For investor with low risk appetite: ICICI Prudential Blended Plan - Option B Growth
(DEBT FUND SIX MONTHS COMPARISON OF RETURN)

Company Name and Fund Birla Bond Index Fund Growth HDFC High Interest Fund Growth ICICI Prudential Blended Plan Option B Growth Sundaram BNP Paribas balance fund-Growth Absolute return -0.03895 -0.04516 -0.06014 Mean Standard Deviation 0.000366 0.001262 0.000832 Variance
-0.00022 -0.00026 -0.00035
0.000000133 0.000001592 0,000000692
-0.02451
-0.00013
0.001223
0.0000015
SIX MONTH OF DEBT FUND

0.01 0.008 0.006 VALUE 0.004 0.002 0 -0.002 1 -0.004 -0.006 -0.008 TIME PERIOD OF NAV 22 43 64 85 106 127 148 169 HDFC High Interest Fund - Growth ICICI Prudential Blended Plan - Option B - Growth Sundaram BNP Paribas Bond Saver Growth Birla bond index fund
FINDINGS:
From the above table we can see that Sundaram BNP Paribas balance fund-Growth is giving the highest absolute return over 1 months (-0.02451) while it is highest in term of fluctuation of returns (variance=0.0000015). Birla Bond Index Fund - Growth is having the minimum fluctuation in return generated (variance=0.000000133).
SUGGESTIONS:
a)For investor with high risk appetite go for HDFC High Interest Fund Growth b)For investor with moderate risk appetite: Go for ICICI Prudential Blended Plan Option B Growth c)For investor with low risk appetite: Sundaram BNP Paribas balance fund-Growth Sundaram BNP Paribas Bond Saver (G):
DATE 1-jun-05 3-Oct-05 1-Feb-06 1-Jun-06 3-Oct-06 1-Feb-07 1-Jun-07 1-Oct-07 1-Feb-08 2-Jun-08 S&P CNX NIFTY 2087.55 2630.05 2971.55 2962.25 3569.6 4137.2 4297.05 5068.95 5317.25 4739.6 RETURN S (X) 25.9874 12.98454 -0.31297 20.503 15.90094 3.863724 17.96349 4.89845 -10.8637 NAV 34.5129 43.6832 51.9849 19.00433 53.2689 61.1365 70.6645 15.5848 75.7267 88.6473 94.3535 84.3726 7.16371 17.06215 6.43697 -10.5782 14.92837 322.6869 23.99482 17.35638 118.0199 0.780423 -9.59716 2.222212 4.148884 5.759686 36.58948 0.456679074 20.40743 2.58589722 -0.696786608 0.485512 0.208556 6.686864 2.469948 14.76959 -0.097949 0.416935 420.3728 252.8399 3.385804 1.859393 37.72665 21.68246 -0.216606189 -0.089493519 0.008009 26.57064 675.345 168.5984 0.322985 7.379349 -0.20208 -0.934497019 0.259853393 0.067524 0.046918 0.873285 1.505626 31.88757 -0.353162308 -1.011884046 0.124724 1.023909 RETURNS (Y) X2 Y2 XY (Y-Y1) (Y-Y1)2
TOTAL
90.92488
98.48394
1996.884
31.99864
151.6334
-3.75638
9.525301
CALCULATION OF ABOVE TABLE: Beta -0.78209 Alfa 19.5008 Standard Deviation 1.02877 Coefficient of determination -0.794198 Sharpe ratio (SR) 86.4955 Treynor Ratio (TR -113.7771 Jensen Ratio (JR) -24.9342
Birla Bond Index Fund Growth:

DATE 1-jun-05 3-Oct-05 1-Feb-06 1-Jun-06 3-Oct-06 1-Feb-07 1-Jun-07 1-Oct-07 1-Feb-08 2-Jun-08 S&P CNX NIFTY 2087.55 2630.05 2971.55 2962.25 3569.6 4137.2 4297.05 5068.95 5317.25 4739.6 RETURN S (X) 25.9874 12.98454 -0.31297 20.503 15.90094 3.863724 17.96349 4.89845 -10.8637 NAV RETURNS (Y) X2 Y2 XY (Y-Y1) (Y-Y1)2
10.7207 10.9312 11.0239 11.1885 11.3934 11.5874 11.7673 12.0175 12.2912 12.4884
1.963491 0.848031 1.493119 1.831345 1.70274 1.552548 2.126231 2.277512 1.6044
675.345 168.5984 -0.097949 420.3728 252.8399 14.92837 322.6869 23.99482 118.0199
3.855298 0.719157 2.229406 3.353823 2.899324 2.410407 4.520859 5.187061 2.574099
51.02603 11.0113 -0.4673 37.54805 27.07517 5.998619 38.19453 11.15628 -17.4297
-8.13927 -9.25473 -8.60964 -8.27142 -8.40002 -8.55021 -7.97653 -7.82525 -8.49836
66.24776 85.65 74.12591 68.41631 70.56033 73.10612 63.62501 61.23451 72.22212
TOTAL
90.92488
15.39942
1996.884
27.74943
164.113
-75.5254
635.1881

Beta 0.00792 Alfa 1.631 Standard Deviation 8.4009 Coefficient of determination 0.220977 Sharpe ratio (SR) -1.559 Treynor Ratio (TR -1654.1 Jensen Ratio (JR) 10.10
HDFC High Interest Fund Growth:

DATE 1-jun-05 3-Oct-05 1-Feb-06 1-Jun-06 3-Oct-06 1-Feb-07 1-Jun-07 1-Oct-07 1-Feb-08 2-Jun-08 S&P CNX NIFTY 2087.55 2630.05 2971.55 2962.25 3569.6 4137.2 4297.05 5068.95 5317.25 4739.6 RETURNS (X) NAV RETURNS (Y) X2 Y2 XY (Y-Y1) (Y-Y1)2
23.3
25.9874 675.345
23.6829
12.98454
1.643348
168.5984
2.700591 0.159893
0.097949 420.3728 252.8399
24.34405 12.58468 -1.07755 18.86982 15.33874 3.713852 14.5008 -0.15446 -10.9462 77.17369
23.7776
-0.31297
0.399867 0.764585 1.633179 0.562201

14.92837
23.9594
20.503
0.58459 2.667275 0.316071 0.022462
24.3507
15.90094
24.4876
3.863724
24.5243
17.96349
0.149872
322.6869
25.3735
4.89845
3.462688
23.99482
11.99021 25.53189
118.0199
26.6556
-10.8637
5.05291 0.082534 13.75118

1996.884
26.6776
TOTAL 90.92488
0.006812 43.9798
8.45942 9.70289 9.33817 8.46958 9.54056 9.95289 6.64007 5.04985 10.0202 77.1737
71.56173 94.14614 87.20151 71.73379 91.02226 99.05998 44.09056 25.50099 100.4049 684.7219

Beta -0.0519 Alfa 2.051 Standard Deviation 8.722 Coefficient of determination -0.3572 Sharpe ratio (SR) -1.757 Treynor Ratio (TR 295.2 Jensen Ratio (JR) -39.52
ICICI Prudential Blended Plan - Option B Growth:

DATE 1-jun-05 3-Oct-05 1-Feb-06 1-Jun-06 3-Oct-06 1-Feb-07 1-Jun-07 1-Oct-07 1-Feb-08 2-Jun-08 S&P CNX NIFTY 2087.55 2630.05 2971.55 2962.25 3569.6 4137.2 4297.05 5068.95 5317.25 4739.6 RETURNS (X) 25.9874 10.212 12.98454 10.3942 -0.31297 20.503 15.90094 3.863724 11.414 17.96349 11.8158 4.89845 12.2543 -10.8637 12.5064 TOTAL 90.92488 2.057237 22.46471 1996.884 3.711133 118.0199 4.232224 60.32767 -22.3492 213.8663 3.520238 23.99482 13.7725 18.1788 2.580233 322.6869 12.39208 63.23575 10.6886 10.8771 11.1269 2.832349 1.763561 2.296568 14.92837 6.657605 9.969311 1.784175 0.097949 420.3728 252.8399 1.919219 168.5984 3.183282 8.0222 3.110148 5.274225 23.16671 -0.88643 36.15829 36.51759 NAV 10.0197 675.345 3.683402 49.87552 8.18355 8.31858 7.27041 -8.3392 7.80619 7.52253 6.58252 6.39163 8.04552 68.4601 66.97041 69.19885 52.85888 69.54224 60.93663 56.58841 43.32959 40.8529 64.73044 525.0083 RETURNS (Y) X2 Y2 XY (Y-Y1) (Y-Y1)2

Beta -0.0129 Alfa 2.626 Standard Deviation 7.6376 Coefficient of determination -0.20696 Sharpe ratio (SR) -0.790 Treynor Ratio (TR -465.66 Jensen Ratio (JR) -202.62

Companys Name ICICI Prudential Blended plan optionB-Growth HDFC high interest fund-Growth Birla Bond index fund-Growth Sundaram BNP Paribas Bond SaverGrowth Beta Alfa Standard Deviation 7.6376 Coefficient of determinat ion -0.20696 Sharpe ratio (SR) -0.790 Treynor Ratio (TR -465.66 Jensen Ratio (JR) -202.62
-0.0129
2.626
-0.0519 0.00792 -0.78209
2.051 1.631 19.5008
8.722 8.4009 1.02877
-0.3572 0.220977 -0.794198
-1.757 -1.559 86.4955
295.2 -1654.1 -113.7771
-39.52 10.10 -24.9342
Alpha & Beta: The above table shows that Birla Bond index fund-Growth is comparatively more volatile with a beta of 0.00792, though compared to the market all the funds are safer to invest. And also the alpha values of all the funds are positive which shows that the funds are giving returns justifying the risk taken. Sundaram BNP Paribas Bond Saver-Growth is showing an alpha of 19.5008 which suggests that the fund is well diversified and quite efficient in reducing the impact of market risk. Co-efficient of Determination: Here all values are not in positive form of the co-efficient of determination of all the fund of the debt. Sharpes Ratio & Treynors Ratio Sharp In the above table, the Treynors ratio for HDFC High Interest Fund Growth fund the highest here almost all funds are in negative form and same are in positive form. It suggests that HDFC High Interest Fund Growth fund fund is giving highest returns over the risk free returns after taking the market risk in to account. On the other hand Sundaram BNP Paribas Bond Saver-Growth Fund is giving the lowest returns. With more volatility the Sharpes ratio here all fund are in negative or HDFC High Interest Fund Growth fund giving highest, suggesting that after taking the total risk in to consideration the fund is giving good return over and above the risk free returns.
Balance Fund
Sundaram BNP Paribas Balance Fund-Growth:
Investment Information Fund Type Investment Plan Asset Size (Rs cr) Min. Investment Last Dividend Bonus Asset Allocation (%) Equity Debt Mutual Funds Money Market Cash/Call
Open-Ended Growth 38.93(jul-31-2008) Rs 5,000 N.A. N.A. Percentage held 65.24 0.00 N.A. 0.00 34.73
Asset Allocation(% ) Sundaram BNP paribas Balance fund- Growth
35%
Equity Debt Mutual Funds Money Market Cash/Call
0%
65%
SCHEME PERFORMANCE :
1month -0.06171 3 months 0.049549 6 months 0.258134 1year -0.11245
HDFC Balanced Fund Growth

Investment Information Fund Type Investment Type Asset Size (Rs cr) Min .Investment Last Dividend Bonus Asset Allocation (%) Equity Debt Money Market Cash / Call Open-Ended Growth 104.85(May-30-2008) Rs.5,000 N.A N.A Percentage held 69.00 23.92 5.78 1.30
Asset Allocation (% ) HDFC Balanced Fund Growth
8% 21% Equity Debt Cash / Call 71%

0.060717
3 months
0.134735
6 months
0.03934
1 yrs*
-0.04338
ICICI Prudential Balanced Growth

Investment Information Fund Type Investment Plan Asset Size (Rs cr) Min. Investment Last Dividend Bonus Asset Allocation (%) Equity Debt Mutual Fund Money Market Cash / Call
Open-Ended Growth 336.97(May-30-2008) Rs.5000 N.A N.A Percentage held 70.75 21.16 N.A 0.00 8.09
Asset Allocation (% ) of ICICI Prudential Balanced Growth
8% 21% Equity Debt Cash / Call 71%

0.08432
3 months
0.191765
6 months
0.134518
1 yrs*
-0.01043
Birla Balance Fund Growth

Investment Information Fund Type Investment Plan Asset Size(Rs cr) Min. Investment Last Dividend Bonus Asset Allocation (%) Equity Debt Money Market Cash / Call
Open-Ended Growth 106.38(May-30-2008) Rs.5000 N.A N.A Percentage held 67.39 17.73 0.00 14.88
Asset Allocation (%) of Birla Balance (G)
Cash / Call 15% Debt 18% Equity 67%

0.04743
3 months
0.063018
6 months
0.107463
1 yrs*
-0.06401
(BALANCED FUND-ONE MONTH COMPARISON OF RETURN)

Company Name and fund
Birla Balance Fund Growth HDFC Balanced Fund - Growth ICICI Prudential Balanced - Growth Sundaram BNP Paribas Balance fund-Growth -0.06171 -0.00211
Absolute return
0.04743
Mean return
0.001684 (0.16%)
Standard Deviation
0.00757
Variance
0.000057304
0.060717
0.002144 (0.21%)
0.008681
0.0000753559
0.08432
0.002947 (0.29%)
0.01032
0.000106502
0.016475 0.000271
ONE MONTH OF BALANCE FUND

0.15 0.1 0.05 RETURNS 0 -0.05 1 -0.1 -0.15 -0.2 NAV 4 7 10 13 16 19 22 25 28 HDFC Balanced Fund - Growth Birla Balance Fund Growth Sundaram BNP Paribas Balanced Fund - Growth ICICI Prudential Balanced - Growth
FINDINGS:
From the above table we can see that ICICI PRUDENTIAL balanced growth fund is giving the maximum absolute one month return (0.08432)but is also highest in terms of volatility (Variance=0.000106502) while Sundaram BNP Paribas Balance fund-Growth is having the lowest volatility (variance=0.000271) so far as return in concerned. SUGGESTIONS:
a) For investor with high risk appetite: Go for the ICICI balanced growth fund. b) For investor with moderate risk appetite: Go Birla Balance Fund Growth. c) For investor with low risk appetite: Go Sundaram BNP Paribas Balance fundGrowth.
(BALANCED FUND-SIX MONTHS COMPARISON OF RETURN)
Company Name and fund

Birla Balance Fund - Growth HDFC Balanced Fund - Growth ICICI Prudential Balanced - Growth c Sundaram BNP Paribas balance fund-Growth
Absolute return
0.107463
Mean return
0.00066
Standard Deviation
0.013267
Variance
0.000176
0.03934
0.000312843
0.013947
0.000194
0.134518 0.258134
0.000848329 0.001404
0.016753 0.015584
0.000280 0.000243
SIX MONTH BALANCE FUND

0.25 0.2 0.15 RETURNS 0.1 0.05 0 -0.05 1 -0.1 -0.15 -0.2 NAV Birla Balance Fund Growth 22 43 64 85 106 127 148 169 Sundaram BNP Paribas Balanced Fund - Growth ICICI Prudential Balanced - Growth HDFC Balanced Fund - Growth
FINDINGS:
From the above table we can see that Sundaram BNP Paribas balance fund-Growth is giving the highest absolute return over 6 months (0.258134) while it is highest in term of fluctuation of returns (variance=0.000243). BIRLA balanced fund is having the minimum fluctuation in return generated (variance=0.000176).
SUGGESTIONS:
a)For investor with high risk appetite: Go for ICICI prudential BALANCED FUND b)For investor with moderate risk appetite: Go for BIRLA BALANCED fund c)For investor with low risk appetite: Go for BIRLA BALANCED fund.
Sundaram Bnp Paribas Balance fund:

DATE 1-jun-05 3-Oct-05 1-Feb-06 1-Jun-06 3-Oct-06 1-Feb-07 1-Jun-07 1-Oct-07 1-Feb-08 S&P CNX NIFTY 2087.55 2630.05 2971.55 2962.25 3569.6 4137.2 4297.05 5068.95 5317.25 RETURN (X) NAV 20.817 25.9874 12.98454 -0.31297 20.503 15.90094 3.863724 17.96349 4.89845 23.5915 27.671 28.4686 29.6999 32.839 34.5182 40.0552 41.9518 13.32805 17.29225 2.88244 4.325116 10.5694 5.113432 16.04081 4.734966 675.345 168.5984 0.097949 420.3728 252.8399 14.92837 322.6869 23.99482 177.6369 299.0217 8.308461 18.70663 111.7121 26.14719 257.3077 288.1489 22.4199 23.19399 -2.24246 5.028632 2-Jun-08 4739.6 -10.8637 37.1317 -11.4896 118.0199 132.0112 124.8197 -18.467 341.0316 ssTOTA L 90.92488 62.79684 1996.884 1053.272 1282.652 0.000047 615.1115 346.3614 224.5319 -0.90211 88.67784 168.0633 19.75689 6.350622 10.31482 -4.09499 -2.65231 3.591969 -1.86399 3.474477 9.063386 82.14497 40.3304 106.3955 16.76892 7.034753 12.90224 RETURN (Y) X2 Y2 XY (Y-Y1) (Y-Y1)2

Birla Balance Fund Growth

DATE S&P CNX NIFTY 2087.55 18.01 3-Oct-05 1-Feb-06 1-Jun-06 3-Oct-06 1-Feb-07 1-Jun-07 2630.05 2971.55 2962.25 3569.6 4137.2 4297.05 25.9874 20.96 12.98454 23.03 -0.31297 22.84 20.503 26.14 15.90094 28.37 3.863724 29.59 1-Oct-07 5068.95 17.96349 33.63 1-Feb-08 5317.25 4.89845 32.45 2-Jun-08 4739.6 -10.8637 30.91 TO TAL 92488 90. 58.1091 -4.74576 199 6.884 -3.50877 118.0199 22.52226 887.7828 51.55653 1282.29 -14.8485 58.1091 220.4786 632.25 13.65326 23.99482 12.31148 -17.1875 -13.6115 185.2738 4.300317 322.6869 186.4115 245.2602 3.550501 12.60606 8.530987 14.92837 18.49273 16.61524 -5.80244 33.66834 14.44834 252.8399 72.77774 135.6507 -1.57177 2.47047 -0.82501 420.3728 208.7544 296.2342 4.345576 18.88403 9.875954 -0.097949 0.680643 0.258202 -10.9278 119.4162 16.37979 168.5984 97.53447 128.2348 -0.22681 0.051441 675.345 268.2975 425.6682 6.277025 39.40104 RETURN (X) NAV RETURNS (Y) X2 Y2 XY (Y-Y1) (Y-Y1)2
1-jun-05

Beta 0.645 Alfa -0.09 Standard Deviation 8.3815 Coefficient of determination 0.940012 Sharpe ratio (SR) 3.5326 Treynor Ratio (TR 45.905 Jensen Ratio (JR) 0.1395
HDFC Balanced Fund Growth

DATE 1-jun-05 3-Oct-05 1-Feb-06 1-Jun-06 3-Oct-06 1-Feb-07 1-Jun-07 1-Oct-07 1-Feb-08 2-Jun-08 S&P CNX NIFTY 2087.55 2630.05 2971.55 2962.25 3569.6 4137.2 4297.05 5068.95 5317.25 4739.6 25.9874 24.464 12.98454 26.057 -0.31297 26.458 20.503 15.90094 32.09 3.863724 32.002 17.96349 34.957 4.89845 38.158 -10.8637 90.9 2488 34.843 24.62308 -25.5 109.7462 118.0199 199 6.884 22.73077 23.99482 606.2959 650.25 3819.402 120.6149 277.0243 2551 14.52032 -35.6028 18.82131 210.8396 1267.557 2520.516 -0.67692 322.6869 516.6879 408.3239 12.62801 159.4666 16.50769 14.92837 0.458225 -2.61544 -10.7797 116.2016 29.944 3.084615 26.81538 420.3728 252.8399 272.5039 262.4878 6.404932 41.02316 12.25385 -0.097949 9.514852 719.0649 -0.96539 549.7957 -7.01814 16.71262 49.25435 279.3118 29.90769 168.5984 150.1567 159.1106 2.151086 4.627172 RETURN (X) NAV RETURNS (Y) X2 Y2 XY (Y-Y1) (Y-Y1)2
20.576 675.345 894.4701 777.2232 19.80493 392.2352
TOTAL

ICICI Prudential Balanced Growth

DATE S&P CNX NIFTY RETURN (X) NAV RETURNS (Y) X2 Y2 XY (Y-Y1) (Y-Y1)2
1-jun-05 3-Oct-05 1-Feb-06 1-Jun-06 3-Oct-06 1-Feb-07 1-Jun-07 1-Oct-07 1-Feb-08 2-Jun-08
2087.55 2630.05 2971.55 2962.25 3569.6 4137.2 4297.05 5068.95 5317.25 4739.6
25.9874 12.98454 -0.31297 20.503 15.90094 3.863724 17.96349 4.89845 -10.8637
20.37 25.16 28.26 28.7 31.45 35.84 36.45 40.35 42.15 36.95
23.51497 12.32114 1.556971 9.581882 13.95866 1.702009 10.69959 4.460967 -12.3369
675.345 168.5984 0.097949 420.3728 252.8399 14.92837 322.6869 23.99482 118.0199
552.954 151.8106 2.424159 91.81245 194.8443 2.896834 114.4812 19.90022 152.1989
611.093 159.9844 -0.48728 196.4573 221.9559 6.576093 192.2019 21.85182 134.0243
35.85187 -53.1382 1.556971 9.581882 13.95866 1.702009 10.69959 4.460967 -12.3369
1285.356 2823.664 2.424159 91.81245 194.8443 2.896834 114.4812 19.90022 152.1989
TOTAL
90.92488
65.45931
1996.88 4
1283.323
1543.657
12.33689
4687.579

Note (I have taken Rf benchmark 9.5 the fixed deposit of bank interest, the days duration is 3 year)

Companys Name ICICI Prudential Balanced Growth HDFC Balanced Fund Growth Birla Balance Fund Growth SUNDARAM BNP PARIBAS BALANCED FUND: Beta 0.8189 Alfa -0.9907 Standard Deviation 22.8219 Coefficient of determination 0.95068 Sharpe ratio (SR) 1.619 Treynor Ratio (TR) 45.1329 Jensen Ratio (JR) -1.209
1.3386 0.645 0.60116
-1.329 -0.09 0.9040
16.7351 8.3815 8.2672
0.8863 0.940012 0.7959
4.8548 3.5326 6.4468
60.694 45.905 88.6567
-0.992 0.1395 1.5036
Alpha & Beta
The above table shows that HDFC Balanced Fund - Growth fund is comparatively more volatile with a beta of 1.3386, though compared to the market all the funds are safer to invest and they are having less volatility also. And also the alpha values of all the funds are negative expected Sundaram BNP Paribas Balance Fund which shows that the funds are giving returns not justifying the risk taken. Sundaram BNP Paribas Balance Fund is showing an alpha of 0.9040 which suggests that the fund is well diversified and quite efficient in reducing the impact of market risk.
Co-efficient of Determination
All company is having positive coefficient of determination.

Sharpes Ratio & Treynors Ratio
Sharp In the above table, the Treynors ratio for Sundaram BNP Paribas Balance Fund is the highest followed by HDFC and then BIRLA. It suggests that Sundaram BNP Paribas Balance Fund is giving highest returns over the risk free returns after taking the market risk in to account. On the other hand ICICI Prudential Balanced - Growth fund is giving the lowest returns. The Sharpes ratio of Sundaram BNP Paribas Balance Fund is highest suggesting that after taking the total risk in to consideration the fund is giving good return
over and above the risk free returns. From the above it can be suggested that Sundaram BNP Paribas Balance Fund can be ruled out of investment decision alternative. Among the other three funds.
CHAPTER V
Findings , conclusion , suggestions
Suggestion given to the Company
The study has tried prove that mere returns of a fund or the past performance is not good enough to make a sound decision on investment for the future. There is a need to understand various available tools of comparative analysis and their significance in making an investment decision. There tools help in analyzing the consistency of performance of the funds over a period of time. Thus while giving a suggestion to a potential investor on investments. The advisor can Take the beta ratios of various funds and suggest wither the fund is volatile or not Use correlations and suggest whether the benchmark taken by the company for judging the performance is good enough or not. Use treynors ratio and tell wither the fund of the company is giving returns justifying the market risk to which all the similar funds are subject to.
Mutual fund: An Introduction A mutual fund is a form of collective investment. It is a pool of money collected from various investors which is invested according to the stated investment objective. The fund manager is the person who invests the money in different types of securities according to the predetermined objectives. The portfolio of a mutual fund is decided taking into consideration this investment objective. Mutual fund investors are like shareholders and they own the fund. The income earned through these investments and the capital appreciation realized by the scheme is shared by its unit holders in proportion to the number of units owned by them. The value of the investments can go up or down, changing the value of the investors holding. Mutual funds are one of the best investments ever created because they are very cost efficient and very easy to invest in.
Bibliography and references
Books: Security Analysis and portfolio Management by Donald Fischer & Ronald Jordan, 6th edition published by prentice Hall 1995.
Web sites: www.amfi .com Www. Money control.com www.historical nifty.yahoofinancial.com www.sundaram BNP Paribas. in www.sharekan.com Journal: Author by kannan, & Nedunchez Indian A comparative study on performance of private mutual fundsEconomic panorama issue date, 60/10/2005 Sisodiya, Amith Singh, Mutual funds performance-Comparative analysis ICFAI, 15/7/2004.

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Comparative Analysis on Mutual Fund Scheme

With reference to Sundaram finance Ltd.

Report submitted in partial fulfillment of

POST GRADUATE DIPLOMA IN MANAGEMENT

Date: Signature Place:

Limitations of the study

ADVANTAGES OF INVESTING IN MUTUAL FUNDS:

Importance of Mutual Fund:

NEED FOR THE STUDY:

OBJECTIVES OF THE STUDY:

Secondary data sources include:

The study has taken three broad categories of funds

Equity Funds Debt funds Balanced fund

Period of the Study:

Tools & Methods: Beta:

Where, n Number of days x Returns of the index y Returns of the fund

nxy (x)( y) . 2 2 2 nx (x) ny (y)

Where, R Return on investment. RFR Risk Free Return

Jensen Ratio (JR):

Jensen Ratio (JR) = ----------------

Data Processing and Analysis:

Limitations of the Study:

Following diagram gives the structure of Indian financial system:

INDUSTRY PROFILE: MUTUAL FUNDS:

INDIAN MUTUAL FUND INDUSTRY

Second Phase 1987-1993 (Entry of Public Sector Funds):

Fourth Phase since February 2003 In February 2003:

PRESENT ASSET UNDER MANAGEMENT OF MUTUAL FUND COMPANIES:

MARKET SHARE OF MUTUAL FUND COMPANIES AS ON 20, JUNE 2007

Types of Mutual Funds:

RISKS ASSOCIATED WITH MUTUAL FUNDS

Tax deducted at source:

Income from units:

Income distribution tax:

Dividend re-investment plan:

Net asset value (NAV)

Asset value is equal to

Details on the above items:

MUTUAL FUND INVESTING STRATEGIES Systematic investment plan (SIPs):

Systematic withdrawal plan (SWPs):

Systematic transfer plan (STPs):

Data Analysis and Interpretation

Asset Allocation(% ) Sundaram BNP Paribas Growth fund

Birla Advantage Fund Growth

Asset Allocation (% ) of Birla Advantage Fund (G)

15% Equity Cash / Call 85%

HDFC Equity Fund Growth

Asset Allocation (% ) of HDFC Equity Fund (G)

0% Equity Money Market Cash / Call 98%

SCHEME PERFORMANCE 1 month

ICICI Prudential Dynamic Plan Growth

Asset Allocation (% ) of ICICI Pru Dynamic Plan (G)

11% Equity Debt Cash / Call 85%

SCHEME PERFORMANCE 1 month

(EQUITY FUND ONE MONTH COMPARISON OF RETURN)

Variance 0.000137733 1.215063085 0.000168714 0.000325

ONE MONTH OF EQUITY FUND

(EQUITY FUND SIX MONTHS COMPARISON OF RETURN)