1. A Project Report
On
Portfolio management and Mutual fund analysis
Submitted by
Sweti Kejariwal
At
IDBI Bank
From
1 June, 2013 to 31 July, 2013
Under the Guidance of
CA ShilpaBhide Mr
……….. fund manager
PUMBA IDBI Bank
In partial fulfilment for the award of the degree
of
MASTERS IN BUSINESS ADMINISTRATION
FINANCE
Department of Management Sciences (PUMBA)
University of Pune
(2012-2014)

2. 1
“PORTFOLIO MANAGEMENT
AND
MUTUAL FUND ANALYSIS”

3. 2
Department of Management Sciences (PUMBA)
University of Pune
(2012-2014)
Department of Management Sciences (PUMBA)
University of Pune
CERTIFICATE
This is to certify that the Summer Project report titled “Portfolio Management and
Mutual Fund analysis”carried out by Sweti Kejariwal atIDBI Bankhas
beensubmitted by 2nd
yearMBA++ Finance, student of The Department of
Management Sciences (PUMBA), University of Pune, towards the partial fulfilment
of the requirement for the award of the Masters in Business Administration
(MBA) and the same has been satisfactorily carried out under the guidance of CA
ShilpaBhideduring the academic year.
CA ShilpaBhideDr. (Capt.) C. M. Chitale
Project Guide External Prof. and HOD
PUMBA Examiner PUMBA

4. 3
ACKNOWLEDGEMENT
I am delighted to have undertaken the equity analysis project at the IDBI Bank. I take immense pleasure in
submitting the final project report which is a reflection of my work for the past two months at IDBI
Bank.
I am grateful to my guides Mrs……… at IDBI Bank whose scholarly guidance, constant encouragement
and untiring patience have been the pillars of my success in this effort.
I would also take this opportunity to thank my mentor CA ShipaBhidewhose constant motivation helped
me to finish the project efficiently.
I would also like to express my gratitude to our Dr. (Capt.) C. M. Chitale, Head of the Department,
PUMBA.
Last but not the least, I am thankful to all those who have directly or indirectly extended their support to
me. Without their help this project could not have been completed.
- Sweti Kejariwal

5. 4
Preface
Theprojecton “portfolio management and mutual fund analysis”
wascarriedoutinIDBIbankF.CRoadBranch.TheintentionbehindtakingoverthisprojectwithIDBIbankwasto
primarily
understandtheroleofbanksinprovidinginvestmentsolutionsandadvicestoitscustomers.Theprojectwascarriedo
utfortheperiodoftwomonthsi.e.fromJune1,2013toJuly31,2013.Theprojectwasdonebyanalyzingthediffere
ntinvestmentoptionsavailableandtocomparethemwiththemutualfundinvestments.Forthepurposeofanalyzi
ngtheinvestmentpatternandselectingeffectiveandbeneficialschemesofmutualfundsdifferentavailablesche
meswerethoroughly*analyzedandthenaidealportfolioofthoseinvestmentoptionsavailablewasmade.
Finallytheidealportfoliowascreatedtounderstandtheimportanceofportfoliomanagementandtoeasetheselect
ionofdifferentmutualfundschemesandtheweightagetobegiventothem.

6. 5
SR.NO. PARTICULARS PAGE
NO.
1. Company’s Profile 6
2. Objective 7
3. Theoretical background 7
4. Portfolio management 10
5. History of mutual fund 12
6. Mutual fund 20
7. Measures of risk 22
8. Research Methodology 26
9. Data analysis 35
10. Findings 37
11. Limitations 38
12. Conclusion 39

7. 6
Company’s profile
IDBI Bank Ltd. is today one of India's largest commercial Banks. For
over 40 years, IDBI Bank has essayed a key nation-building role, first as the
apex Development Financial Institution (DFI) (July 1, 1964 to September
30, 2004) in the realm of industry and thereafter as a full-service commercial
Bank (October 1, 2004 onwards). As a DFI, the erstwhile IDBI stretched its
canvas beyond mere project financing to cover an array of services that
contributed towards balanced geographical spread of industries,
development of identified backward areas, emergence of a new spirit of
enterprise and evolution of a deep and vibrant capital market. On October 1,
2004, the erstwhile IDBI Bank converted into a Banking company (as
Industrial Development Bank of India Limited) to undertake the entire
gamut of Banking activities while continuing to play its secular DFI role.
Post the mergers of the erstwhile IDBI Bank with its parent company (IDBI
Ltd.) on April 2, 2005 (appointed date: October 1, 2004) and the subsequent
merger of the erstwhile United Western Bank Ltd. with IDBI Bank on
October 3, 2006, the tech-savvy, new generation Bank with majority
Government shareholding today touches the lives of millions of Indians
through an array of corporate, retail, SME and Agri products and services.
Headquartered in Mumbai, IDBI Bank today rides on the back of a robust
business strategy, a highly competent and dedicated workforce and a state-
of-the-art information technology platform, to structure and deliver
personalised and innovative Banking services and customised financial
solutions to its clients across various delivery channels
As on March 31, 2013 IDBI Bank has a balance sheet of Rs. 3,22,769
crore and business size (deposits plus advances) of Rs 4,23,423 crore. As an
Universal Bank, IDBI Bank, besides its core banking and project finance
domain, has an established presence in associated financial sector businesses
like Capital Market, Investment Banking and Mutual Fund Business. Going
forward, IDBI Bank is strongly committed to work towards emerging as the
'Bank of choice' and 'the most valued financial conglomerate', besides
generating wealth and value to all its stakeholders.

8. 7
Objectives
o PrimarilytounderstandthebasicconceptsofPortfoliomanagementandMutual
funds anditsbenefitsasaninvestmentavenue.
o Secondly,tocompareandevaluatetheperformanceofdifferentequitymutualf
und schemesofdifferentcompaniesonthebasisofrisk,returnandvolatility.
o Thirdly,tosuggesttheschemeswhichareoutperformersandlaggards.
o Finallytocreateanidealportfolioinwhichriskwillbedistributedtowardsdiffer
ent schemesandwillearnhigherrateofreturn.
THEREOTICAL BACKGROUND
INVESTMENT OPTIONS:
Investment options are
savingsformanimportantpartoftheeconomyofanynation.Withthesavingsinveste
dinvarious options available to the people, the money acts as the driver
forgrowth of the
country.Indianfinancialscenetoopresentsaplethoraofavenuestotheinvestors.Thou
ghcertainlynotthebestordeepestofmarketsintheworld,ithasreasonableoptionsfor
anordinarymantoinvesthissavings.Letusexamineseveralofthem.
Banks
Banks are
consideredasthesafestofalloptions,bankshavebeentherootsofthefinancialsyste
msin
India.Promotedasthemeanstosocialdevelopment,banksinIndiahaveindeedplay
edan
importantroleintheruralupliftment.Foranordinarypersonthough,theyhaveacted
asthe
safestinvestmentavenuewhereinapersondepositsmoneyandearnsinterestonit.T

9. 8
hetwomain modes of investment inbanks, savings accounts and Fixed
deposits have
beeneffectivelyusedbyoneandall.However,todaytheinterestratestructureinthec
ountryisheadedsouthwards,keepinginlinewithglobaltrends.Withthebanksoffer
inglittleabove9
percentintheirfixeddepositsforoneyear,theyieldshavecomedownsubstantiallyi
nrecenttimes.Addtothis,theinflationarypressuresineconomyandyouhaveapositi
onwherethe
savingsarenotearning.Theinflationiscreepingup,toalmost8percentattimes,andt
hismeansthatthevalueofmoneysavedgoesdowninsteadofgoingup.Thiseffective
lymarsanychanceofgainingfromtheinvestmentsinbanks.
Post office
Justlikebanks,postofficesinIndiahaveawidenetwork.Spreadacrossthenation,th
eyoffer
financialassistanceaswellasservingthebasicrequirementsofcommunication.A
mongall
savingoptions,Postofficeschemeshavebeenofferingthehighestrates.Addedtoiti
sthefactthattheinvestmentsaresafewiththedepartmentbeingaGovernmentofInd
iaentity.Sothetwobasicandmostsoughtforfeatures,thoseofreturnsafetyandquan
tumofreturns
werebeinghandsomelytakencareof.Thoughcertainlynotthemostefficientsyste
msintermsofservicestandardsandliquidity,thesehavestillmanagedtoattractthea
ttentionofsmall,retailinvestors.However,withthegovernmentannouncingitsint
entionofreducingthe interest rates insmall savings options, this avenue is
expected to lose some of
theinvestors.PublicProvidentFundsactasoptionstosaveforthepostretirementpe
riodformostpeopleandhavebeenconsideredgoodoptionlargelyduetothefactthat
returnswerehigherthanmostotheroptionsandalsohelpedpeoplegainfromtaxben
efitsundervarioussections.Thisoptiontooislikelytolosesomeofitssheenonacco
untofreductionintheratesoffered.
Company Fixed Deposits
Anotheroft-
usedroutetoinvesthasbeenthefixeddepositschemesfloatedbycompanies.
Companies have used fixed deposit schemes as a means of mobilizing funds

10. 9
for their
operationsandhavepaidinterestonthem.Thesaferacompanyisrated,thelesserthe
return
offeredhasbeenthethumbrule.However,thereareseveralpotentialroadblocksint
hese.Firstofall,thedangeroffinancialpositionofthecompanynotbeingunderstoo
dbythe
investorlurks.Theinvestorsrelyonintermediarieswhomoreoftenthannot,dontre
vealthe
entiretruth.Secondly,liquidityisamajorproblemwiththeamountbeingreceived
monthsaftertheduedates.Prematureredemptionisgenerallynotentertainedwitho
utcutsinthereturnsoffered andthough they presentareasonableoptionto
counterinterestraterisk(especiallywhentheeconomyisheadedforalowinterestre
gime),thesafetyofprincipal
amounthasbeenfoundlacking.ManycasesliketheKuberGroupandDCMGroupf
iascoeshaveresultedinlowconfidenceinthisoption.
Theoptionsdiscussedaboveareessentiallyfortherisk-
averse,peoplewhothinkofsafety
andthenquantumofreturn,inthatorder.Forthebrave,itisdabblinginthestockmark
et.Stock marketsprovide an option to invest in a high risk, high return game.
While the potentialreturnismuchmorethan10-
11percentanyoftheoptionsdiscussedabovecan generally generate, the risk
isundoubtedly of the highest order. But then, the general
principleofencounteringgreaterrisksanduncertaintywhenoneseekshigherretur
nsholds
true.However,asenticingasitmightappear,peoplegenerallyarecluelessastohowt
hestockmarketfunctionsandintheprocesscanendangerthehard-earnedmoney.
Forthosewhoarenotadeptatunderstandingthestockmarket,thetaskofgenerating
superior
returnsatsimilarlevelsofriskisarduoustosaytheleast.ThisiswhereMutualFunds
comeintopicture.

11. 10
Portfolio Management
Aninvestorconsideringinsecuritiesisfacedwiththeproblemofchoosingfrom
amongalarge number of securities. His choice depends upon the risk return
characteristics ofindividual
securities.Hewouldattempttochoosethemostdesirablesecuritiesandliketoalloc
atehisfundsoverthisgroupofsecurities.Againheisfacedwithproblemofdeciding
whichsecuritiestoholdandhowmuchtoinvestineach.Theinvestorfacesaninfinit
enumberofpossibleportfoliosorgroupsofsecurities.Theriskandreturncharacteri
sticsof portfolios differ from those of individualsecurities combining to form
a portfolio. Theinvestor tries to choose the optimal portfoliotakinginto
consideration the risk returncharacteristicsofallpossibleportfolios.
Phases of portfolio management
Security Analysis
Portfolio Analysis
Portfolio Selection
Portfolio Revision
Portfolio evaluation
o Security Analysis
1. Fundamental Analysis: This analysis concentrates on
thefundamentalfactorsaffectingthecompanysuchasEPS(Earningpershar
e)ofthecompany,thedividend
payoutratio,competitionfacedbythecompany,marketshare,qualityofma

12. 11
nagementetc.
2. Technical Analysis:
Thepastmovementinthepricesofsharesisstudiedtoidentify trends and
patterns and then tries to predict the future price movement.
Currentmarketpriceiscomparedwiththefuturepredictedpricetodetermin
ethemispricing.
Technicalanalysisconcentratesonpricemovementsandignoresthefunda
mentalsof theshares.
3. Efficient market hypothesis: This is comparatively more recent
approach.This approach holds that market prices instantaneously and
fully reflect all relevantavailable
information.Itmeansthatthemarketpriceswillalwaysbeequalthe intrinsic
value.
o Portfolio Analysis
Aportfolioisagroupofsecuritiesheldtogetherasinvestment.Itisanattempttosprea
d theriskallover.Thereturn&riskofeachportfolio
hastobecalculatedmathematically
andexpressedquantitatively.Portfolioanalysisphaseofportfolio management
consists ofidentifying the range of possible portfolios that can be constituted
from a given set ofsecurities and calculating their risk for further analysis.
o Portfolio Selection
Thegoalofportfolioconstructionistogenerateaportfoliothatprovidesthehighestr
eturnsatagivenlevelofrisk.HarryMarkowitzportfoliotheoryprovidesboththeco
nceptualframeworkandtheanalyticaltoolsfordeterminingtheoptimalportfolio
inadisciplinedandobjectiveway.
o Portfolio Revision
Theinvestor/portfoliomanagerhastoconstantlymonitortheportfoliotoensuretha
titcontinuestobeoptimal.Astheeconomyandfinancialmarketsarehighlyvolatile
dynamicchangestakeplacealmostdaily.Astimepassessecuritieswhichwereonce
attractivemayceasetobeso.Newsecuritieswithanticipationofhighreturnsand
lowriskmayemerge.

13. 12
o Portfolio evaluation
Portfolio evaluation is the process, which is concerned with assessing
the
performanceoftheportfoliooveraselectedperiodoftimeintermsofreturn&risk.
Theevaluationprovidesthenecessaryfeedbackforbetterdesigningofportfoliothe
nexttimearound.
s
History of Mutual Fund
The first mutual funds were established in Europe. One researcher
credits a Dutch merchant with creating the first mutual fund in 1774. The first
mutual fund outside the Netherlands was the Foreign & Colonial Government
Trust, which was established in London in 1868. It is now the Foreign &
Colonial Investment Trust and trades on the London stock exchange.
Mutual funds were introduced into the United States in the
1890s. They became popular during the 1920s. These early funds were
generally of the closed-end type with a fixed number of shares which often
traded at prices above the value of the portfolio.
The first open-end mutual fund with redeemable shares was
established on March 21, 1924. This fund, the Massachusetts Investors Trust,
is now part of the MFS family of funds. However, closed-end funds remained
more popular than open-end funds throughout the 1920s. By 1929, open-end
funds accounted for only 5% of the industry's $27 billion in total assets.
After the stock market crash of 1929, Congress passed a series of acts
regulating the securities markets in general and mutual funds in particular.
The Securities Act of 1933 requires that all investments sold to the public,
including mutual funds, be registered with the Securities and Exchange
Commission and that they provide prospective investors with
a prospectus that discloses essential facts about the investment.
The Securities and Exchange Act of 1934 requires that issuers of securities,
including mutual funds, report regularly to their investors; this act also
created the Securities and Exchange Commission, which is the principal
regulator of mutual funds. The Revenue Act of 1936 established guidelines

14. 13
for the taxation of mutual funds, while the Investment Company Act of
1940 governs their structure.
When confidence in the stock market returned in the 1950s, the mutual
fund industry began to grow again. By 1970, there were approximately 360
funds with $48 billion in assets. The introduction of money market funds in
the high interest rate environment of the late 1970s boosted industry growth
dramatically. The first retail index fund, First Index Investment Trust, was
formed in 1976 by The Vanguard Group, headed by John Bogle; it is now
called the Vanguard 500 Index Fund and is one of the world's largest mutual
funds, with more than $100 billion in assets as of January 31, 2011.
Fund industry growth continued into the 1980s and 1990s, as a result
of three factors: a bull market for both stocks and bonds, new product
introductions (including tax-exempt bond, sector, international and target
date funds) and wider distribution of fund shares. Among the new
distribution channels were retirement plans. Mutual funds are now the
preferred investment option in certain types of fast-growing retirement plans,
specifically in 401(k) and other defined contribution plans and in individual
retirement accounts (IRAs), all of which surged in popularity in the 1980s.
Total mutual fund assets fell in 2008 as a result of the credit crisis of 2008.
In 2003, the mutual fund industry was involved in a scandal involving
unequal treatment of fund shareholders. Some fund management companies
allowed favored investors to engage in late trading, which is illegal,
or market timing, which is a practice prohibited by fund policy. The scandal
was initially discovered by then-New York State Attorney General Eliot
Spitzer and resulted in significantly increased regulation of the industry.
At the end of 2011, there were over 14,000 mutual funds in the United
States with combined assets of $13 trillion, according to the Investment
Company Institute (ICI), a trade association of investment companies in the
United States. The ICI reports that worldwide mutual fund assets were $23.8
trillion on the same date.
Mutual funds play an important role in U.S. household finances and
retirement planning. At the end of 2011, funds accounted for 23% of
household financial assets. Their role in retirement planning is particularly
significant. Roughly half of assets in 401(k) plans and individual retirement
accounts were invested in mutual funds

15. 14
Mutual Fund
A Mutual Fund is a trust that pools the savings of a number of investors
who share a common financial goal. The money thus collected is then
invested in capital market instruments such as shares, debentures and other
securities. The income earned through these investments and the capital
appreciation realised are shared by its unit holders in proportion to the
number of units owned by them. Thus a Mutual Fund is the most suitable
investment for the common man as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at a relatively low
cost.The flow chart below describes broadly the working of a mutual fund:
There are many entities involved and the diagram below illustrates the

16. 15
organizational set up of a mutual fund:
MutualFundsareessentiallyinvestmentvehicleswhere peoplewith
similarinvestmentobjectivecometogethertopooltheirmoneyandtheninvestacco
rdingly.Eachunitofanyschemerepresentstheproportionofpoolownedbytheunit
holder(investor).Appreciationor
reductioninvalueofinvestmentsisreflectedinnetassetvalue(NAV)oftheconcern
edscheme,whichisdeclaredbythefundfromtimetotime.Mutualfundschemesare
managedbyrespectiveAssetManagementCompanies(AMC).Differentbusines
sgroups/financialinstitutions/bankshavesponsoredtheseAMCs,eitheraloneori
ncollaborationwithreputedinternational firms. Several international fundslike
Alliance and Templeton are
alsooperatingindependentlyinIndia.ManymoreinternationalMutualFundgiant
sareexpectedtocomeintoIndianmarketsinthenearfuture.
Thebenefitsonofferaremanywithgoodpost-
taxreturnsandreasonablesafetybeingthehallmarkthatwenormallyassociatewith
them.Someoftheothermajorbenefitsofinvestinginthemare:
The advantages of investing in a Mutual Fund are:
 Professional Management
Diversification
Potential of returns
Flexible, Affordable and a Low Cost affair
 Liquidity
 Transparency
well regulated

17. 16
Professional management
MutualFundsemploytheservicesofskilledprofessionalswhohaveyearsofexperi
encetobackthemup.Theyuseintensiveresearchtechniquestoanalyzeeachinvest
mentoptionforthe potentialofreturns along with their risk levels to come up
with the figures
forperformancethatdeterminethesuitabilityofanypotentialinvestment.
Diversification
Investmentsarespreadacrossawidecross-
sectionofindustriesandsectorsandsotheriskis
reduced.Diversificationreducestheriskbecauseallstocksdontmoveinthesamedi
rectionatthesametime.OnecanachievethisdiversificationthroughaMutualFund
withfarlessmoneythanonecanonhisown.
Potential of Returns
Returnsinthemutualfundsaregenerallybetterthananyotheroptioninanyotherave
nue
overareasonableperiodoftime.Peoplecanpicktheirinvestmenthorizonandstayp
utinthechosenfundfortheduration.Equityfundscanoutperformmostotherinvest
mentsoverlongperiodsbyplacinglong-
termcallsonfundamentallygoodstocks.Thedebtfundstoowilloutperformothero
ptionssuchasbanks.Thoughtheyareaffectedbytheinterestrateriskingeneral,ther
eturnsgeneratedaremoreastheypicksecuritieswithdifferentdurationthat
havedifferentyieldsandsoareabletoincreasetheoverallreturnsfromtheportfolio.
Flexible, Affordable and a Low Cost affair
MutualFundsofferarelativelylessexpensivewaytoinvestwhencomparedtoother
avenues
suchascapitalmarketoperations.Thefeeintermsofbrokerages,custodialfeesand
othermanagementfeesaresubstantiallylowerthanotheroptionsandaredirectlylin
kedtothe
performanceofthescheme.Investmentinmutualfundsalsooffersalotofflexibility
withfeatures such as regularinvestmentplans, regular withdrawal plans
and dividendreinvestment plans enablingsystematicinvestment or
withdrawal of funds. Even

18. 17
theinvestors,whocouldotherwisenotenterstockmarketswithlowinvestiblefund
s,canbenefit fromaportfoliocomprisingofhigh-
pricedstocksbecausetheyarepurchasedfrompooledfunds.
Ashasbeendiscussed, mutualfunds offer
severalbenefitsthatareunmatchedbyother
investmentoptions.Postliberalization,theindustryhasbeengrowingatarapidpac
eandhascrossedRs.100000croresizeintermsofitsassetsundermanagement.How
ever,duetothe
lowkeyinvestorawareness,theinflowundertheindustryisyettoovertaketheinflo
wsinbanks.Risinginflation,fallinginterestratesandavolatileequitymarketmake
adeadly cocktail for the investor for whom mutual funds offer a route out of
the impasse. The
investmentsinmutualfundsarenotwithoutrisksbecausethesameforcessuchasreg
ulatory
frameworks,governmentpolicies,interestratestructures,performanceofcompan
iesetc.that
rattletheequityanddebtmarkets,actonmutualfundstoo.Butitistheskilloftheman
agingrisksthatinvestmentmanagersseektoimplementinordertostriveandgenera
tesuperiorreturnsthanotherwisepossiblethatmakesthemabetteroptionthanman
yothers.
Liquidity
Fixeddepositswithcompaniesorinbanksareusuallynotwithdrawnprematurebec
ausethereisapenalclauseattachedtoit.Theinvestorscanwithdraworredeemmone
yattheNet AssetValuerelatedpricesintheopen-endschemes.Inclosed-
endschemes,theunitscanbetransactedattheprevailingmarketpriceonastockexc
hange.Mutualfundsalsoprovidethe
facilityofdirectrepurchaseatNAVrelatedprices.Themarketpricesoftheseschem
esaredependentontheNAVsoffundsandmaytradeatmorethanNAV(knownasPr
emium)or
lessthanNAV(knownasDiscount)dependingontheexpectedfuturetrendofNAV
whichin
turnislinkedtogeneralmarketconditions.Bullishmarketmayresultinschemestra
dingatPremiumwhileinbearishmarketsthefundsusuallytradeatDiscount.Thism
eansthatthemoneycanbewithdrawn
anytime,withoutmuchreductioninyield.Somemutualfundshowever,chargeexit
loadsforwithdrawalwithinaperiod.
Besidestheseimportantfeatures,mutualfundsalsoofferseveralotherkeytraits.Im
portantamongthemare:

19. 18
Transparency
Being under a regulatory framework, mutual funds have to disclose
their holdings, investment
patternandalltheinformationthatcanbeconsideredasmaterial,beforeallinvestors
.Thismeansthattheinvestmentstrategy,outlooksofthemarketandschemerelated
detailsare disclosed withreasonablefrequency to ensurethat transparency
exists in the
system.ThisisunlikeanyotherinvestmentoptioninIndiawheretheinvestorknows
nothingasnothingisdisclosed.
Well Regulated
Unlikethecompanyfixeddeposits,wherethereislittlecontrolwiththeinvestment
being
consideredasunsecureddebtfromthelegalpointofview,theMutualFundindustry
isvery
wellregulated.Allinvestmentshavetobeaccountedfor,decisionsjudiciouslytake
n.SEBI
actsasatruewatchdoginthiscaseandcanimposepenaltiesontheAMCsatfault.The
regulations,designedtoprotecttheinvestors
interestsarealsoimplementedeffectively.
Riskinvolved in investing in Mutual Funds
MutualFundsdonotprovideassuredreturns.Theirreturnsarelinkedtotheir
performance. They
investinshares,debenturesanddeposits.Alltheseinvestmentsinvolveanelement
ofrisk. The unitvalue may vary depending upon the performance of the
company andcompanies may defaultin payment of interest / principal on
their debentures / bonds /
deposits.Besidesthis,thegovernmentmaycomeupwithnewregulations,whichm
ayaffect
aparticularindustryorclassofindustries.Allthesefactorsinfluencetheperforman
ceof Mutual fund.

20. 19
Net Asset Value(NAV):
NAV is the market value of the assets of the scheme minus its
liabilities. The per unit NAV is the net asset value of the scheme divided by
the number of units outstanding on the valuation date.
Sale price:
It is the price investor pay when he invests in a scheme.it is also called
offer price. It may include a sales load (entry load).
Repurchase price:
This is the price at which a close-ended scheme repurchases its units
and it may include a back-end load. This is also called bid price.
Redemption price:
This is the price at which open-ended schemes repurchase their units
and close-ended schemes redeem their units on maturity. Such prices are
NAV related.
Sales load:
Sales load is a charge collected by a scheme when it sells the unit. It is
also called, „front-end load or entry load. Schemes that do not charge a load
are called „no load‟ schemes.
Measurement of risk
Riskreferstothepossibilitythattheactualoutcomeofaninvestmentwilldiff
erfromthe
expectedoutcome.Inotherwordswecansaythatriskreferstovariabilityordispersi
on.Ifanyinvestmentissaidtoinvariableitmeansthatitistotallyriskfree.Whenever
wecalculate the mean reutru of an investment, we also need to calculate the
variability in the returns.

21. 20
Standard deviation:
Standard deviation is a representive of the risk associated with a given
security(stocks, bonds, property, etc.), or the risk of a portfolio of securities.
Risk is an important factor in determing how to efficiently manage a portfolio
of investments because it determines the variation in returns on the asset
and/or portfolio and gives investors a mathematical basis for investment
decisions. The overall concept of risk is tha as it increases, the expected
return on the asset will increase as a result of the risk premium earned. In
other words, investors should expect a higher return on an investment when
said investment carries a higher level of risk.
For example, you have a choice between two stocks. Stock A historically
returns 5% to investors with a standard deviation of 10%, stock B
historically returns 6% to investors and carries a standard deviation of 20%.
On the basis of risk and return, stock A is the acceptable choice because
earning an extra 1% with stock B is not worth double the amount of risk as
stock A. in other words, stock B is more likely to lose money for the
investor more often than stock A will under the same circumstances, and
will only return 1% more than stock A.
Beta:
Beta is a measure of the volatility, or systematic risk, of a security or a
portfolio, in comparison to the market as a whole. Think of beta as the
tendency of a security's returns to respond to swings in the market. A beta of
1 indicates that the security's price will move with the market. A beta of less
than 1 means that the security will be less volatile than the market. A beta of
greater than 1 indicates that the security's price will be more volatile than the
market. For example, if a stock's beta is 1.2, it's theoretically 20% more
volatile than the market.
Many utilities stocks have a beta of less than 1. Conversely, most
high-tech Nasdaq-based stock shave a beta of greater than 1, offering the
possibility of a higher rate of return, but also posing more risk.
Essentially, beta expresses the fundamental tradeoff between
minimizing risk and maximizing return. Let's give an illustration: Say a
company has a beta of 2; this means it is two times as volatile as the overall
market. If we expect the market to provide a return of 10% on
an investment, then we would expect the company to return 20%. On the
other hand, if the market were to decline and provide a return of -6%,
investors in that company could expect a return of -12% (a loss of 12%). If a

22. 21
stock had a beta of 0.5, we would expect it to be half as volatile as the
market; a market return of 10% would mean a 5% gain for the company.
Alpha:
Alpha is often described to the value that a portfolio manager adds to
or subtracts from an investments return. Alpha is measured in direct
relationship to the investment‟s benchmark.
A positive alpha of 1.0 means the fund has outperformed its benchmark
index by 1%. Correspondingly, a similar negative alpha would indicate an
underperformance of 1%. For both portfolio managers and investors, more
alpha is always better.
R-Squared (R2
):
The R-Squared measure reveals what percentage of a fund‟s
movements can be related to movements in its benchmark index. An R-
Squared of 100 would mean that all of the fund‟s movements are perfectly
explained by its benchmark; Index funds normally achieve this ideal. A high
R-squared means the beta on a fund is actually a useful measurement. A low
R-squared means ignore the beta.
Sharpe ratio:
Sharpe Ratio is a risk-to-reward measure developed by Nobel
Laureate William Sharpe. The calculation for Sharpe Ratio is a risk-adjusted
measure, which can be used by an investor to see how well a mutual fund
has performed based upon its risk level. An investor can compare similar
funds and look for the one with the higher Sharpe Ratio, which would
indicate the better risk-adjusted performance. Using the Sharpe Ratio, an
investor can gain an expectation as to how well the return of a particular
mutual fund compensates the investor for the risk taken.
Treynor ratio:
It is
developedbyJackTreynor.Thisperformancemeasureevaluatesfundsonthebasis
of
Treynor'sIndex.ThisIndexisaratioofreturngeneratedbythefundoverandabove
riskfreerateofreturn(generallytakentobethereturnonsecuritiesbackedbythe
government, as there isno credit risk associated), during a given period

23. 22
andsystematicriskassociatedwithit(beta).Symbolically,itcanberepresentedas:
Treynor‟sIndex (Ti) = (Ri-Rf)/Bi
Where, Ri represents return on fund, Rf represents Risk free Rate of
Return & Bi represents Beta of the fund.
Allrisk-
averseinvestorswouldliketomaximizethisvalue.Whileahighandpositive
Treynor'sIndexshowsasuperiorrisk-
adjustedperformanceofafund,alowand
negativeTreynor'sIndexisanindicationofunfavorableperformance.
Jenson Model
Jenson‟s model proposes another risk adjusted performance measure.
This measure was developed by Micheal Jenson and is sometimes
referredtoastheDifferential Return
Method.Thismeasureinvolvesevaluationofthereturnsthatthefundhas
generatedvs.thereturnsactuallyexpectedout of thefund giventhelevelof its
systematicrisk.ThesurplusbetweenthetworeturnsiscalledAlpha,whichmeasure
s
theperformanceofafundcomparedwiththeactualreturnsovertheperiod.Require
d returnofafundatagivenlevelofrisk(Bi)canbecalculatedas:
Ri=Rf+Bi(Rm-Rf)
Where,Rmisaveragemarketreturnduringthegivenperiod.Aftercalculatin
git, alphacanbeobtainedbysubtractingrequiredreturnfromtheactualreturnofthe
fund.
Higheralpharepresentssuperiorperformanceofthefundandviceversa.Li
mitation
ofthismodelisthatitconsidersonlysystematicrisknottheentireriskassociated
withthefundandanordinary investorcannotmitigateunsystematicrisk, ashis
knowledgeofmarketisprimitive.
Turnover:
In an investment portfolio, turnover refers to the number of shares
traded in a given period.Expressed as a percentage, it tells us what portion of
the securities (stocks, bonds or both) in a fund's portfolio are bought and
sold during the course of a year.

24. 23
The four major reasons investors should be concerned about turnover
include:
There is an abundance of research that shows that buy-and-hold fund
managers (low turnover) outperform their colleagues who trade
frequently (high turnover). One of the reasons for this is that the
former spend less on trading commissions than the latter. Trading
costs are coming down, but they can still represent a significant fund
expense.
Trading costs are not included in a fund's expense ratio. Thus,
transaction costs are often ignored by investors because they are
buried as a dollar figure, as opposed to a percentage of assets, in a
fund's Statement of Additional Information (SAI). It is likely that only
a tiny fraction of mutual fund investors are even aware of this
document, let alone familiar with its content.
The greater the number of trades, the more often the manager has to
be making the right decision. A high volume of trading places a lot of
pressure on managers to avoid making mistakes in investing
judgments.
A high level of fund trading activity generally occasions a higher-than-
average amount ofcapital gains. Mutual funds must pay out these gains
as dividends to fund shareholders, which are then subject to capital
gains taxes. For investors in taxable funds, i.e., not in tax-deferred
accounts, high portfolio-turnover funds are not tax efficient.
A low portfolio turnover rate is a very positive fund investment quality.
However, it must be remembered that the nature or investing style of a
fund can impose certain "structural" features on portfolio management
that influence its trading activities:
Small-cap stock, international and growth funds tend to have higher
turnover rates. These funds are more transaction intensive as the
manager‟s maneuver for competitive advantages.
Index funds should have low turnover rates, no matter what their category.
Trading is a natural function of bond funds, which puts their turnover
rates way up on the scale.
Funds that carry only a small number of securities in their portfolios
oftentimes reflect high turnover rates because of the impact of a single
trade on a major holding.
Whatever the category of mutual fund being considered, the lower the

25. 24
portfolio turnover percentage the better. While this measurement may vary
from year to year, a fund's trading activity is within the control of the
manager and should consistently fall, historically, within a reasonable range.
Research Objective
Toevaluateinvestmentperformanceofselectedmutualfundsintermsofriskan
d return.
Toevaluateandcreateanidealportfolioconsistingthebestmutualfundscheme
s whichwillearnhighestpossiblereturnsandwillminimizetherisk.
Basically to understand the concept of portfolio management and its
relation to mutual fund.
Toanalyzetheperformanceofmutualfundschemesonthebasisofvarious
parameters.
Scope of Project
ThefundsareselectedtowhichIDBIBankisadvisor.TheSchemeswerecategori
zed andselectedonevaluatingtheirperformanceandrelativerisk.
Thescopeoftheprojectismainlyconcentratedonthedifferentcategoriesofthe
mutualfundssuchasequityschemes,debtfunds,balancedfundsandequitylinke
d savingsschemesetc.
The ideal portfolio is created by analyzing the risk pattern of the schemes
and distributingtheoverallrisktoearnmaximumreturns.
Research Methodology
ResearchMethodologyisaveryorganizedandsystematicmediumthroughwhic
ha particularcaseorproblemcanbesolved.
Itisanalytical,descriptiveandquantitativeresearchwherethecomparisonbetwe
en
thedifferentmutualfundschemesismadeonthebasisofrisk,volatilityandreturn.
Fordatacollectionpurposethesecondarysourcewasusedlikemutualfundfactsh
eet, books,websitesandIDBIbankmutualfundrecovers.

26. 25
Findings and Analysis
Thecollectionofinformationisbasedonthesecondaryprobe.
Theinformationhasbeencollectedthroughvariousbooks,studiesandannualrep
orts of variousinstitutionslike Reliance,IDBI, ICICI,and HDFC
etc.Inadditionvarious
journals,magazines,articles,books,publisheddocumentshavealsobeenconsid
ered intheprojectwork.
Anattempthasbeenmadetoevaluatetheperformanceoftheselectedmutualfund
schemes. Performance of mutual fund schemes has been evaluated by
using the following performance measures (a) Risk (b) S.D. (c) Beta (d)
Jensenalpha(e) SharpeRatio.
Limitations
Togetaninsightintheprocessofportfolioallocationanddeploymentoffunds
by fundmanagerisdifficult.
Theprojectisunabletoanalyseseachandeveryschemeofmutualfundstocreat
ethe idealportfolio.
The portfolio of mutual fund investments can change according to the
market conditions. This project is carried out and evaluated on the basis
of the market conditionsfrom1stJuneto31stJuly2013.
Conclusion
Outofthedifferentschemesthathasbeencomparednoneoftheschemeisbetteron
all thefrontslikerisk,volatilityandthereturns.
Mutualfundinvestmentsarenotshortterminvestmentavenuesbuttheyaremoreof
a longterminvestmentavenue.

27. 26
Data Analysis
Prudential ICICI balanced fund:
Schemes Objectives: The scheme seeks to generate long-term capital appreciation
and current income by investing in a portfolio that is investing in equities and
related securities as well as fixed income and money market securities. The
approximate allocation to equity would be in the range of 60-80 per cent with a
minimum of 51 per cent, and the approximate debt allocation is 40-49 per cent,
with a minimum of 20 per cent.
Composition:
Equity:65.85
Debt:32.96
Cash:1.19
Analysis:
Standard deviation:11.90
Sharpe ratio:0.18
Beta:0.78
Alpha:3.60
R-Squared:0.87
Trailing returns:
1 week 1 month 3 month 1 year 2 year 3year 5 year
3.15 -3.29 -3.17 10.30 8.40 7.92 9.60

28. 27
HDFC BALANCED FUND
Schemes Objectives:The scheme seeks to generate capital appreciation with
current income from a combined portfolio of equity and debt instruments. Under
normal circumstances the scheme would take 60 % exposure to equity instruments
while the balance would be allocated to debt instruments
Composition:
Equity:70.18
Debt:28.90
Cash:0.92
Analysis:
Standard deviation:12.68
Sharpe ratio:-0.09
Beta:0.80
Alpha:0.41
R-Squared:0.81
Trailing returns:
1 week 1 month 3 month 1 year 2 year 3year 5 year
-0.07 -5.27 -8.61 -1.54 1.94 3.46 11.23

29. 28
ICICI prudential top 100 reg
Schemes Objectives:The scheme seeks to generate long term capital appreciation
by investing predominantly in equities that is 95% in equities while the rest would
be invested in debt and money market instruments.
Composition:
Equity:95.53
Debt:8.12
Cash:-3.65
Analysis:
Standard deviation:18.15
Sharpe ratio:-0.03
Beta:0.94
Alpha:1.46
R-Squared:0.96
Trailing returns:
1 week 1 month 3 month 1 year 2 year 3year 5 year
-0.01 -4.02 -6.81 4.06 8.62 3.51 7.89

30. 29
Kotak balance
Schemes Objectives:The scheme seeks to exploit the capital appreciation of
equity and the stable returns of debt by investing a substantial amount in debt and
money market instruments. It aims to minimize the risk that arises out of even the
most carefully picked equity stocks.
Composition:
Equity:66.71
Debt:40.37
Cash:-7.08
Analysis:
Standard deviation:12.09
Sharpe ratio:-0.12
Beta:0.81
Alpha:0.09
R-Squared:0.91
Trailing returns:
1 week 1 month 3 month 1 year 2 year 3year 5 year

31. 30
-2.17 -4.99 -7.99 3.56 7.47 2.04 7.13
Franklin India Bluechip:
Schemes Objectives:The scheme seeks aggressive growth and aims to provide
medium to long term capital appreciation through investment in shares of quality
companies and by focusing on well-established large sized companies.
Composition:
Equity: 91.82
Debt: 0.02
Cash: 8.16
Analysis:
Standard deviation: 15.79
Sharpe ratio: -0.12
Beta: 0.81
Alpha: -0.16
R-Squared: 0.96
Trailing returns:
1 week 1 month 3 month 1 year 2 year 3year 5 year

32. 31
-0.62 -7.34 -11.75 -0.01 3.40 1.39 8.95
Axis Equity:
Schemes Objectives:The scheme aims to generate regular long term capital
growth from a diversified and actively managed portfolio of equity and equity
related securities.
Composition:
Equity: 89.17
Debt: 1.64
Cash: 9.19
Analysis:
Standard deviation: 16.68
Sharpe ratio: -0.03
Beta: 0.86
Alpha: 1.27
R-Squared: 0.96
Trailing returns:

33. 32
1 week 1 month 3 month 1 year 2 year 3year 5 year
-0.83 -6.10 -8.32 11.20 9.14 2.91 -
Birla sun life MIP:
Schemes Objectives:The scheme primarily seeks regular monthly income and also
aims at capital growth with a predominant exposure to debt and money market
instruments. The fund invests in a mix of high quality fixed income securities and a
small portion in equities (a maximum of 15%).
Composition:
Equity: 13.10
Debt: 75.74
Cash: 11.17
Analysis:
Standard deviation: 3.85
Sharpe ratio: 0.01
Beta: 0.70
Alpha: 0.48
R-Squared: 0.75
Trailing returns:

34. 33
1 week 1 month 3 month 1 year 2 year 3year 5 year
-0.36 -2.25 -3.90 4.76 6.51 5.63 8.60
Reliance Liquidity:
Schemes Objectives:The scheme seeks to provide optimal return consistent with
moderate level of risk and high liquidity. The fund would invest in money market
instruments.
Composition:
Equity: 0
Debt: 111.30
Cash: -11.30
Analysis:
Standard deviation: 0.19
Sharpe ratio: 11.85
Beta: 0.08
Alpha: 2.10
R-Squared: 0.09
Trailing returns:
1 week 1 month 3 month 1 year 2 year 3year 5 year

35. 34
0.22 0.80 1.99 8.70 9.26 8.84 7.72
UTI Top 100
Schemes Objectives:The scheme aims to provide long term capital appreciation /
dividend distribution be investing at least 65 per cent of assets in equity and equity
related instruments of top 100 stocks by market capitalization listed on BSE. Rest
of the assets will be invested in other equities or money & debt market securities.
Composition:
Equity: 90.89
Debt: 1.52
Cash: 7.59
Analysis:
Standard deviation: 14.87
Sharpe ratio: -0.09
Beta: 0.75
Alpha: 0.21
R-Squared: 0.91
Trailing returns:

36. 35
1 week 1 month 3 month 1 year 2 year 3year 5 year
-1.73 -7.28 -8.88 1.27 4.44 1.53 -
IDEAL PORTFOLIO
Fund Name P/E Ratio P/B Ratio Top5 holdings(%)
Axis equity 30.62 4.80 33.35
Birla sun life MIP 28.67 3.99 3.37
Franklin Indian Bluechip 17.64 2.97 32.47
ICICI prubal red 23.91 4.20 16.10
HDFC Balanced 15.62 3.37 13.26
ICICI Pru top 100 reg 16.00 2.66 34.14
Kotak balance 17.77 3.96 17.90
Reliance Liquidity - - -
UTI Top 100 31.03 5.47 32.37
Fund Name Category Risk grade Return grade Rating
Axis equity equity Below avg Above avg ****
Birla sun life
MIP
Hybrid Below avg Above avg ****

37. 36
Franklin
Indian
Bluechip
Equity Below avg High *****
ICICI prubal
red
Hybrid Below avg Avg ****
HDFC
Balanced
Hybrid Below avg High ****
ICICI Pru top
100 reg
Equity Avg Above avg ****
Kotak balance Hybrid Avg Avg ***
Reliance
Liquidity
Debt Below avg Above avg ****
UTI Top 100 Equity Low Avg ****
The ground rules of mutual fund investing
Mosesgavetohisfollowers10commandmentsthatweretobefollowedtilletern
ity.The
worldofinvestmentstoohasseveralgroundrulesmeantforinvestorswhoarenovicesinth
eirownrightandwishtoenterthemyriadworldofinvestments.Thesecomeinhandyfor
thereiseverypossibilityoflosingwhatonehasifduecareisnottaken.
1. Assessyourself:Self-
assessmentofone‟sneeds;expectationsandriskprofileisofprime
importancefailingwhich;onewillmakemoremistakesinputtingmoneyin
rightplacesthanotherwise.Oneshouldidentifythedegreeofriskbearingcapacityo
ne has and also clearlystate the expectations from the investments.
Irrationalexpectationswillonlybringpain.
2. Trytounderstandwherethemoneyisgoing:Itisimportanttoidentifythenatureo
finvestmentandtoknowifoneiscompatiblewiththeinvestment.Onecanlosesubst
antiallyifonepicksthewrongkindofmutualfund.Inordertoavoidanyconfusioniti
sbettertogothroughtheliteraturesuchasofferdocumentandfact
sheetsthatmutualfundcompaniesprovideontheirfunds.

38. 37
3. Don'trushinpickingfunds,thinkfirst:onefirsthastodecidewhathewantsthem
oneyforanditisthisinvestmentgoalthatshouldbetheguidinglightforallinvestme
ntsdone.Itisthusimportanttoknowtherisksassociatedwiththefundandalignitwit
hthequantumofriskoneiswillingtotake.Oneshouldtakealookattheportfolioofth
efundsforthepurpose.Excessiveexposuretoanyspecificsectorshouldbeavoided
,asitwillonlyaddtotheriskoftheentireportfolio.Mutualfunds
investwithacertainideologysuchasthe"ValuePrinciple"or"GrowthPhilosophy"
.Bothhavetheirshareofcriticsbutbothphilosophiesworkforinvestorsofdifferent
kinds.Identifyingtheproposedinvestmentphilosophyofthefundwillgiveaninsig
htintothekindofrisksthatitshallbetakinginfuture.
4. Don’tput all the eggsin one basket: This old age adage is of utmost
importance.Nomatterwhattheriskprofileofapersonis,itisalwaysadvisabletodiv
ersifytherisksassociated.Soputtingone‟smoneyindifferentassetclassesis
generally the best optionasit averages the risks in each category. Thus,
eveninvestorsofequityshouldbejudiciousandinvestsomeportionoftheinvestm
entin
debt.Diversificationeveninanyparticularassetclass(suchasequity,debt)isgood.
Not all fund managers have the sameacumen of fund management and
withidentificationofthebestmanbeingatoughtask,itisgoodtoplacemoneyinthe
handsofseveralfundmanagers.Thismightreducethemaximumreturnpossible,b
utwillalsoreducetherisks.
5. Beregular:Investingshouldbeahabitandnotanexerciseundertakenatone‟swish
es,ifonehastoreallybenefitfromthem.Aswesaidearlier,sinceitisextremely
difficulttoknowwhentoenterorexitthemarket,itisimportanttobeatthemarketbyb
eingsystematic.ThebasicphilosophyofRupeecostaveragingwouldsuggestthatif
oneinvestsregularlythroughtheupsanddownsofthemarket,hewouldstandabette
rchanceofgeneratingmorereturnsthanthemarketfortheentireduration.The
SIPs(SystematicInvestmentPlans)offeredbyallfundshelpsinbeingsystematic.
Allthatoneneedstodoistogivepost-
datedchequestothefundandthereafteronewillnotbeharriedlater.TheAutomatici
nvestmentPlansofferedbysomefundsgoesastepfurther,astheamountcanbedirect
ly/electronicallytransferredfromtheaccountoftheinvestor.
6. Doyourhomework:Itisimportantforallinvestorstoresearchtheavenuesavailabl

39. 38
e tothem irrespective of the investor category they belong to. This
isimportantbecauseaninformedinvestorisinabetterdecisiontomakerightdecisi
ons.
Havingidentifiedtherisksassociatedwiththeinvestmentisimportantandsoonesho
uldtrytoknowallaspectsassociatedwithit.Askingtheintermediariesisoneofthew
aystotakecareoftheproblem.
7. Find the right funds: Finding funds that do not charge much fees is
ofimportance,asthefeechargedultimatelygoesfromthepocketoftheinvestor.Thi
sisevenmoreimportantfordebtfundsasthereturnsfromthesefundsarenotmuch.F
undsthatchargemorewillreducetheyieldtotheinvestor.Findingtherightfundsis
importantandoneshouldalsousethesefundsfortaxefficiency.Investorsofequitys
houldkeepinmindthatalldividendsarecurrentlytax-freeinIndiaandsotheirtax
liabilitiescanbereducedifthedividendpayoutoptionisused.Investorsofdebtwill
bechargedataxondividenddistributionandsocaneasilyavoidthepayoutoptions.
8. Keeptrackofyourinvestments:Findingtherightfundisimportantbutevenmorei
mportantistokeeptrackofthewaytheyareperforminginthemarket.Ifthemarketis
beginningtoenterabearishphase,theninvestorsofequitytoowillbenefitbyswitchi
ngtodebtfundsasthelossescanbeminimized.Onecanalwaysswitch
backtoequityiftheequitymarketstartstoshowsomebuoyancy.
9. Knowwhentosellyourmutualfunds:Knowingwhentoexitafundtooisofutmost
importance. One
shouldbookprofitsimmediatelywhenenoughhasbeenearnedi.e.theinitialexpe
ctationfromthefundhasbeenmetwith.Otherfactorslikenon-
performance,hikeinfeechargedandchangeinanybasicattributeofthefundetc.ares
omeofthereasonsfortoexit.
Investmentsinmutualfundstooarenotrisk-
freeandsoinvestmentswarrantsomecautionandcarefulattentionoftheinvestor.Investi
nginmutualfundscanbeadiceybusinessforpeoplewhodonotremembertofollowtheser
ulesdiligently,aspeoplearelikelytocommitmistakesbybeingignorantoradventurouse
noughtotakerisksmorethanwhattheycan
absorb.Thisisthereasonwhypeoplewoulddowelltoremembertheserulesbeforetheyse
touttoinvesttheirhard-earnedmoney.

40. 39
Limitations:
Thisreportgives aninsightaboutmutualfunds andmutualfundschemesbutwithfew
limitationsasfollows:
Thebigquestionishowtojudgeamutualfundbeforeinvesting?Itisimportantforan
investortoconsiderafund‟sperformanceoverseveralyears.
Thereportonlyanalysesequitymutualfundschemesofonlysomefundsandtherear
earound42AMCsofferingwiderangeofschemebuttoanalyzethemisatedious
task.
Thisinformationismainlyregardingofthosemutualfundswerecollectedtowhich
IDBI is an advisor.
Differentfundmanagersadoptdifferentstrategiestoimproveperformance.While
one
fundmanagermayhaveinvestedinspeculativestocksmayoveraperiod,anotheron
e who haveinvested in speculative stocks may have struck gold in that year
to outperformtheformerbyalongway.
Lack
ofproperknowledgeandawarenessaboutadvantagesanddisadvant
agesassociatedwithvariousschemesamongtheinvestor.
Usuallythereisatendencyamonginvestorstoignoretheconsistencyofreturnsover
aperiodoftimerathertheyfocusonabsolutereturnsgeneratedintheshortterm.
Conclusion:
Afterstudying&analyzingdifferentmutualfundschemesthefollowingconclusio
nscanbemade:
Winning
withstocksmeansperformingatleastaswellasamajormarketindexoverthelongha
ul.Ifonecansidestepthecommoninvestormistakes,thenonehas

41. 40
takenthefirstandbiggeststepintherightdirection.
Diversified stock portfolios have offered superior long term inflation
protection.
Equitiesareespeciallyimportanttodaywithpeoplelivinglongerandretiringearly.
Tounderstandstockfunds,oneneedstobefamiliarwiththecharacteristicsofthe
differenttypesofcompaniestheyhold.
Portfoliomanagershavedoneafairlygoodjobingeneratingpositivereturns.Itmay
leadtogaininvestors‟confidence.Thusoverallgoodperformanceofthefundsisa
signofdevelopmentinneweraincapitalmarket.
Onthebasisoftheanalysistheperformanceoftheschemesduringthestudyperiod
can be concluded to be good.
Thosewhowanttoeliminatetheriskelementbutstillwanttoreapabetterthenit
wouldbeadvisabletogofordebtorarbitrageschemeswhichensurebothsafetyandr
eturns.
SothefutureofmutualfundsinIndiaisbright,becauseitmeetsinvestorsneedsperfectly
.ThiswillgiveboosttoIndianinvestorsandwillattractforeigninvestorsalso.Itwilllea
dtothegrowthofstronginstitutionalframeworkthatcansupportthecapitalmarketsint
helongrun.