RISK AND RETURN ANALYSIS OF SELECTED SCHEMES OF BIRLA SUN LIFE MUTUAL FUND

RISK AND RETURN ANALYSIS OF SELECTED
SCHEMES OF BIRLA SUN LIFE MUTUAL FUND
• Student Name : RAMALINGAM.J
• Faculty Guide : professor, V.Vanaja.
• Organization : Birla Sun Life Mutual Fund
• Organizational Guide: Mr.G.Cholai
20/04/2015
Department of Management Studies Sri
Ramakrishna Engineering College Project 1

Chapter 2
• ORGANISATION PROFILE
Birla Sun Life Asset Management Company Ltd.
(BSLAMC), the investment manager of Birla Sun Life Mutual
Fund, is a joint venture between the Aditya Birla Group and
the Sun Life Financial Inc. of Canada. The joint venture brings
together the Aditya Birla Group's experience in the Indian
market and Sun Life's global experience.
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HISTORY OF THE ORGANISATION
 It was Established in 1994, Birla Sun Life Mutual fund
has emerged as one of India's leading flagships of Mutual
Funds business managing assets of a large investor base.
They are solutions offer a range of investment options,
including 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.
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MANAGEMENT
Chief executive officer-Mr. ABalasubramanian
Co-Chief Investment Officer- Mr. Mahesh Patil
Chief Operation Officer - Ms. Keerti Gupta
Head - Finance and Accounts - Mr. Parag Joglekar
Head-Compliance & Risk Management - Ms. Rama Vasantharajan
Head Legal, Compliance and Secretarial - Mr. Rajiv Joshi
Head Marketing - Ms. Molly Kapoor
Head – Business Development - Mr. Bhavdeep Bhatt
Head - Institutional Sales - Mr. Anil Shyam
Co-Head - Retail Sales and Distribution - Mr. Sidharth Damani
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ORGANISATION STRUCTURE
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PRODUCT PROFILE AND MARKET
POTENTIAL
There are 4 types of products:
1.wealth creation solutions-27 funds
2.Tax savings solutions-2 funds
3.Regular income solutions-4 funds
4.Savings solutions-17 funds
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Cont….
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Ramakrishna Engineering College Project
7
(BLUE) investors understand that their principal
will be at low risk.
(yellow) investors understand theat their
principal will be at medium risk
(BROWN) investors understand that their
principal will be at high risk

COMPETITIVE STRENGTH OF
THE COMPANY
SWOT Analysis
Strength
1. Has Network of 600 branches and advisors spread over 1500 towns in
India having over 130,000 advisors
2. Backed By Aditya Birla Brand and Sun Life financial services
3. Emphasis on Customer Satisfaction through Transparent Functioning
4. Strong Capital Base
Weakness
1. Low Presence in Rural Market
2. Lesser advertising as compared to competitors
Opportunity
1. Growing potential in the Rural Market
2. Alignment with Government Schemes
3. Better awareness amongst people for getting insurance
Threats
1. Economic crisis and economic instability
2. Entry of new NBFCs in the sector
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DESCRIPTION OF VARIOUS
FUNCTIONAL AREAS
• Aditya Birla Financial Services
• Birla Sun Life Mutual Fund
• Finance and Accounts
• Compliance & Risk Management
• Legal, Compliance and Secretarial
• Marketing
• Business Development
• Institutional Sales
• Retail Sales and Distribution
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Chapter 3
• MACRO-MICRO ECONOMIC ANALYSIS
MACRO ANALYSIS:
Birla sun life mutual fund company operated in 26 countries
all over the world.
17% contribute the Indian economic growth
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MICRO ANALYSIS
• In Indian level the Birla sun life mutual fund company 4th
place.
• 12062 Billion .
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Chapter 1
INTRODUCTION OF THE STUDY
• The assessment of investors' risk tolerance by investment firms
is a crucial issue both for regulators and for the industry.
• The accurate identification of the client's risk attitude allows
solid relationships to be built and avoids the clients’ mistrust
induced by BIRAL SUN LIFE downturn.
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REVIEW OF LITERATURE
Sapar & Narayan(2003)
evaluates the performance of 269 open ended schemes of mutual funds in a
bear market using relative performance index, risk-return analysis,
Treynor's ratio, Sharp's ratio, Sharp's measure, Jensen's measure, and
Fama's. The results obtained advocate that most of the mutual fund
schemes in the sample outperformed the investor's expectations by giving
excess return over expected return based on premium for systematic risk
and total risk.
Sapar, Narayan Rao and Madava, Ravindran, “Performance Evaluation of Indian
Mutual Funds”. Available at SSRN:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=433100
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Cont….
Kalpesh P Prajapati and Mahesh K Patel (2012)
Evaluated the performance of Indian mutual funds using
relative performance index, risk-return analysis, Treynor's
ratio, Sharp's ratio, Sharp's measure, Jensen's measure, and
Fama's measure. The data used is daily closing NAVs from 1st
January 2007 to 31st December, 2011 and concluded that most
of the mutual funds have given positive return during the
period of study.
Kalpesh P Prajapati and Mahesh K Patel (2012), Comparative Study On
Performance Evaluation Of Mutual Fund Schemes Of Indian Companies,
Researchers world, Journal of Arts, Science & CommerceVol–III, Issue3(3),
July 2012, pp. 47-59
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Cont….
• Ramesh Chander (2002)
a study on “Performance Appraisal of Mutual Funds in India”
appraised the performance of mutual funds in India as
suggested by Sharpe, Treynor and Jenson. The study also
examined the portfolio management practices of mutual fund
managers with respect to portfolio construction, portfolio
management, portfolio evaluation and disclosure practices.
Ramesh Chander “Performance Appraisal of Mutual Funds in India” Excel Books,
New Delhi (2002).
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STATEMENT OF THE PROBLEM
In the current economic scenario interest rates are falling and
fluctuation in the share market has put investors in confusion. One
finds it difficult to take decision on investment. This is primarily,
because investments are risky in nature and investors have to
consider various factors before investing in investment avenues.
Mutual funds are considered as the most sutable investment avenue
for a common man as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at a
relatively low cost. Therefore the study aims their risk & return and
evaluation about mutual fund schemes in Birla Sun Life
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OBJECTIVES OF THE STUDY
• To analysis the mutual funds schemes on the basis of risk-
return parameters.
• To appraise performance of mutual funds on the basis of risk
adjusted measures as suggested by Sharpe, Treynor and Jensen
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SCOPE OF THE STUDY
The project primarily deals with the analysis of risk &
return evaluation of Birla Sun Life mutual funds as on
01/01/2012 to 31/12/2014. This study confines as how mutual
fund is good investment avenue for investors. The present
study focused on NAV of the sample units.
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METHODOLOGY
The whole study can be termed as evaluative study. It is also
a desk research.
Method of data collection
Secondary data has been collected from websites of the
companies and from the fact sheet of the schemes.
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Tool used for analysis
• Alpha
• Beta
• Correlation
• STD
• Sharpe Ratio
• Jensen
• Treynor Ratio
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ANALYSIS AND INTERPRETATION
WEALTH CREATION SOLUTION:
The return of Birla Sun Life Mutual Fund, Wealth
Creation Solution ranges from 14.02 to 4.69; risk ranges from
0.15 to -0.13; correlation ranges from 0.04 to -0.01; standard
deviation ranges from 1.23 to 0.32.
The Birla Sun Life Mutual Fund, Wealth Creation
Solution Sharpe Ratio ranges from -0.01 to 0.16; Treynor
Ratio ranges from -12.25 to 45.92; Jenson Ratio ranges from
0.01 to 0.14.
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Cont….
TAX SAVINGS SOLUTIONS:
The return of Birla Sun Life Mutual Fund, Tax Savings
Solutions value is 11.72 and 11.52; Risk and Correlation is 0;
Standard Deviation is 0.88.
The Birla Sun Life Mutual Fund, Tax Savings Solutions
Sharpe Ratio is 0.10; Treynor Ratio ranges from -268.3 to -
25.17; Jenson Ratio ranges from 0.11 to 0.12.
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Cont….
• REGULAR INCOME SOLUTIONS:
The return of Birla Sun Life Mutual Fund, Regular Income
Solutions ranges from 4.30 to 6.34; risk ranges from 0.01 to
0.001; correlation ranges from 0.02 to 0.004; standard
The Birla Sun Life Mutual Fund, Regular Income Solutions
of Sharpe Ratio ranges from 0.09 to 0.13; Treynor Ratio
ranges from 2.81 to 13.33; Jenson Ratio ranges from 0.04 to
0.06.
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Cont….
SAVINGS SOLUTIONS:
The return of Birla Sun Life Mutual Fund, Savings
Solution ranges from 4.44 to 2.71; risk ranges from 0.001 to -
0.007; correlation ranges from 0.082 to -0.023; standard
The Birla Sun Life Mutual Fund, Regular Income Solutions
of Sharpe Ratio ranges from 0.01 to 0.43; Treynor Ratio
ranges from -6.40 to 13.71; Jenson Ratio ranges from 0.03 to
0.04.
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RECOMMENDATION
1. Birla Sun Life has to review their portfolio frequently to
maximize the wealth of the investors. (Data support)
2. Birla Sun Life has to invest in firms, which are having good
offers and high Growth opportunities such as shares listed in
Group A.
3. The awareness of mutual fund & its various schemes should be
increased among the people by proper advertising, promotion
and conducting investors meet.
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25

Thank You
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26

RISK AND RETURN ANALYSIS OF SELECTED SCHEMES OF BIRLA SUN LIFE MUTUAL FUND

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RISK AND RETURN ANALYSIS OF SELECTED SCHEMES OF BIRLA SUN LIFE MUTUAL FUND