A study on mutual fund in india
A study on mutual fund in india
A report on “ A Study on Comparative Analysis of Mutual Funds in India” Submitted in partial fulfilment of the requirement For MBA degree course By Vinoth K (Reg.
No. : 0920034) Under the Guidance of Faculty Guide Company Guide Dr. Jeevananda S. Mr Darwin Edwin Coordinator Senior Manager Dept. of MBA, Kotak Mahindra Bank Ltd.
Vinoth 0920034 Date: CUIM Bangalore ACKNOWLEDGEMENT I consider it my privilege to express a few words of gratitude and respect to all those who guided and inspired me in the successful completion of the project. I wish to take this opportunity to express my deep sense of gratitude to thank Mr. Guruprasad (Senior Manager, Kotak Mahindra Bank Ltd. ) and my guide and reporting Officer Mr.
Darwin Edwin (Sr.
The company profile and analysis of the survey have been explained in detail. Methodology: The Analysis includes Top 5 funds among the selected 6 AMCs for the four types of Mutual funds. 1)Data Collection Method: Secondary data were used for analyses such as (NAV) and performance of various schemes of the asset management companies 2)Research Design: For this study descriptive method is used for analyzing the performance of the funds which describes the characteristics based on the schemes and the performance based on the various asset management companies. )Statement of the problem: This study gains importance to understand the reason for the more redemption in the Kotak funds under study and the changes need in their portfolio. 4)Objective of the study: To compare the equity Diversified and Tax Planning fund performance of the Kotak Funds with their competitors The Findings are as follows: •In Large cap, Franklin India Blue chip is performing extremely well by having highest rating among the selected AMCs with its good portfolio.
Almost all the tools used to identify the performance shows the better result in terms of risk and return to the investor •In Mid cap, Reliance Growth is top performing fund by having highest Alpha and Sharpe ratio. The portfolio is having major percentage of Banking and Metal & mining which is performing well in the market made this fund to perform well. •In ELSS, HDFC Tax Saver is performing extremely well by having highest among the selected AMCs and its expense is less which in turn giving good return to their investors. The portfolio had invested majorly in Banking, Pharmaceuticals and in Automotive.
7 Limitations of the study70 2. 8 Tools used for analysis70 3Company Profile74 4Data Analysis and Interpretation76 4. 1 Large Cap76 4. 2 Mid Cap84 4. 3 ELSS92 4.
4 Opportunities100 5Summary of Findings, Suggestions and Conclusion108 6. 1 Findings 108 6. Suggestions 111 6. 3 Conclusion 112 Bibliography113 LIST OF TABLES Table No. PARTICULARSPAGE NO.
2 aMid Cap84 4. 2 bRatings for Mid Cap85 4. 2. 1Kotak Mid cap87 4. 2.
2Tata Mid cap88 4. 2. 3HDFC Equity89 4. 2. 4Reliance Growth90 4.
3Tata Equity Opportunities105 4. 4. 4Reliance Opportunities106 4. 4. 5Franklin India Opportunities107 LIST OF CHARTS FIGURE NO. PARTICULARSPAGE NO.
4. 1Large cap78 4. 2Mid cap86 4. 3ELSS94 4. 4Opportunities102 CHAPTER 1 INTRODUCTION 1. 1Introduction: Investment is the use of money to earn income or profit.
The mutual fund will have a fund manager who is responsible for investing the gathered money into specific securities (stocks or bonds). When you invest in a mutual fund, you are buying units or portions of the mutual fund and thus on investing becomes a shareholder or unit holder of the fund.
Mutual funds are considered as one of the best available investments as compare to others they are very cost efficient and also easy to invest in, thus by pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on their own.
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. Interval scheme: Interval Schemes are that scheme, which combines the features of open-ended and close-ended schemes. The units may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV related prices.
The risk return trade-off indicates that if investor is willing to take higher risk then correspondingly he can expect higher returns and vise versa if he pertains to lower risk instruments, which would be satisfied by lower returns. For example, if an investors opt for bank FD, which provide moderate return with minimal risk. But as he moves ahead to invest in capital protected funds and the profit-bonds that give out more return which is slightly higher as compared to the bank deposits but the risk involved also increases in the same proportion. Overview of existing schemes By Investment objective:
The structure of the fund may vary different for different schemes and the fund manager’s outlook on different stocks. The Equity Funds are sub-classified depending upon their investment objective, as follows: •Diversified Equity Funds •Mid-Cap Funds •Sector Specific Funds •Tax Savings Funds (ELSS) Debt Funds: The objective of these Funds is to invest in debt papers. Government authorities, private companies, banks and financial institutions are some of the major issuers of debt papers.
By investing in debt instruments, these funds ensure low risk and provide stable income to the investors.
And hence, the returns from such schemes would be more or less equivalent to those of the Index. 4)Sector specific schemes: These are the Funds/ schemes which invest in specific core sectors like energy, telecommunications, IT, construction, transportation and financial services.
Advantages of Mutual Funds •Diversification: An investor undertakes risk if he invests all his funds in a single scrip. Mutual funds invest in a number of companies across various industries and sectors. This diversification reduces the risk of the investment. •Professional Management: An investor lacks the knowledge of he capital market operations and does not have large resources to reap the benefits of investment. Hence, he requires the help of an expert.
Investors encounter fewer risks when they invest in mutual funds than when they buy and sell stocks on their own. However, anyone who invests through a mutual fund runs the risk of losing money.
•Fees and commissions: All funds charge administrative fees to cover their day-to-day expenses. Some funds also charge sales commissions or “ loads” to compensate brokers, financial consultants, or financial planners. Even if you don’t use a broker or other financial adviser, you will pay a sales commission if you buy shares in a Load Fund. Taxes: During a typical year, most actively managed mutual funds sell anywhere from 20 to 70 percent of the securities in their portfolios. If your fund makes a profit on its sales, you will pay taxes on the income you receive, even if you reinvest the money you made.
The mutual fund industry can be broadly put into four phases according to the development of the sector. Each phase is briefly described as under. 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 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 This phase had bitter experience for UTI. It was bifurcated into two separate entities.
Here it describes the characteristics based on the schemes and the performance based on the various asset management companies 2. 3 REVIEW OF AMC’S FUND PORTFOLIO 2. 3.
1 KOTAK MAHINDRA Kotak 30: About the Scheme: Kotak 30 is an open-ended equity growth scheme that invests predominantly in large cap stocks that are diversified across sectors and form a significant proportion of total market capitalization. The scheme does offers some flavour of mid-caps (maximum exposure up to 20%) to potentially enhance returns. Fund Objective: The scheme seeks capital appreciation, through investments in equities.
09 Cipla 30. 88900, 0002. 95 Tata Consultancy Services 30. 96404, 4912. 95 Bharat Heavy Electricals 9. 23117, 3002.
79 HDFC Bank 29. 01145, 0002. 77 Lupin 28. 76168, 5222. 74 Sterlite Industries (India) 27. 75335, 0002.
064, 000, 0001. 2 Sintex India 17. 85549, 4371. 70 Oil and Natural Gas Corporation 17. 40165, 0001. 66 Jubilant Organosys 17.
00500, 0001. 62 Allahabad Bank 16. 461, 000, 0001. 57 CESC 16. 26400, 0001.
241. 84 Money MarketValue Rs in cr. )Rating% Collateral Borrowing ; Lending obligation59. 995. 72 Others / UnlistedValue (Rs in cr.
)Rating% Mahindra ; Mahindra Ltd. -MAY2010 -Futures 13. 081. 25 Net Receivable / PayableValue (Rs in cr. )Rating% Net Current Assets/(Liabilites) -20.
7623, 0002. 33 Zuari Industries 3. 7356, 0002. 31 Pantaloon Retail 3. 5585, 0002. 9 ING Vysya Bank 3.
44108, 0002. 13 United Phosphorous 3. 40200, 0002. 11 Alstom Projects 3. 3855, 0142.
7965, 0001. 73 Mphasis 2. 7240, 0001. 69 Dalmia Cement (Bharat) 2. 73102, 9171.
69 GVK Power & Infrastructure . 71600, 0001. 68 Glenmark Pharma 2. 70100, 0001. 67 Torrent Pharmaceuticals 2.
36650, 0001. 46 Exide Industries 2. 33190, 0001. 44 IRB Infrastructure Developers 2. 3280, 0001.
43 Asian Paints 2. 2911, 0001. 42 Radico Khaitan 2. 27175, 0001. 41 CESC 2.
88175, 0001. 16 Bata India 1. 7965, 0001. 11 United Bank of India 1. 67200, 0001.
03 Corporation Bank 1. 6330, 0001. 01 Bhushan Steel 1. 619, 0001. 00 Century Textiles and Industries 1.
The portfolio offers a diversified mix across various sectors. As it is a close ended architecture, the investor has to compulsorily lock in ones fund for 3 years. Fund Objective: To generate capital appreciation from a diversified portfolio of equity & equity related securities and enable investors to avail the income tax rebate, as permitted from time to time Portfolio Holding: Top Holdings EquityValue (Rs in cr. )Qty%
Sintex India 4. 87150, 0003. 02 Allahabad Bank 4.
03 Oracle Financial Services Software 3. 2515, 0002. 01 Hathway Cable and Datacom 3. 21152, 7721. 98 Maharashtra Seamless 3. 1580, 0001. 95 Jubilant Organosys 3. 0690, 0001. 89 United Spirits 3. 0224, 0001. 87
Shree Cements 2. 9713, 7041. 84 Chambal Fertilisers and Chemicals 2. 96450, 0001. 83 Voltas 2. 90160, 0001. 79 Cummins India 2. 8650, 0001. 77 Sesa Goa 2. 7965, 0001. 73 Mphasis 2. 7240, 0001. 69 Dalmia Cement (Bharat) 2. 73102, 9171. 69 GVK Power & Infrastructure 2. 71600, 0001. 68 Glenmark Pharma 2. 70100, 0001. 67 Torrent Pharmaceuticals 2. 7050, 2231. 67 JSW Energy 2. 64210, 0001. 63 Sadbhav Engineering 2. 6320, 0001. 63 KSK Energy Ventures 2. 60135, 0001. 61 Tata Tea 2. 5324, 0001. 56 Crompton Greaves 2. 5095, 0001. 55 Federal Bank 2. 4885, 0001. 54 Voltamp Transformers 2. 4727, 0001. 53 Orient Paper and Industries 2. 46390, 0001. 2 Container Corporation of India 2. 4418, 8001. 51 Ashok Leyland 2. 40400, 0001. 49 Arvind 2. 36650, 0001. 46 Exide Industries 2. 33190, 0001. 44 IRB Infrastructure Developers 2. 3280, 0001. 43 Asian Paints 2. 2911, 0001. 42 Radico Khaitan 2. 27175, 0001. 41 CESC 2. 2856, 0001. 41 Jagran Prakashan 2. 28189, 8551. 41 Zee Entertainment Enterprises 2. 2875, 0001. 41 SKF India 2. 2749, 1711. 40 Stride Arcolab 2. 2667, 5001. 40 Lupin 2. 1312, 5001. 32 Motherson Sumi Systems 2. 12150, 0001. 31 Gujarat NRE Coke 2. 03221, 4221. 26 Birla Corporation 1. 9950, 0001. 23 Balrampur Chini Mills 1. 96235, 0001. 21 Titan Industries 1. 969, 2131. 21
Tata Motors May 2010 -Derivatives 19. 700. 74 Net Receivable / PayableValue (Rs in cr. )Rating% Net Receivable/Payable -86. 53-3. 25 Sector Weightages: Asset Allocation: DSPBR Tax saver About the Scheme: An open Ended equity linked savings scheme, whose primary investment objective is to seek to generate medium to long-term capital appreciation from a diversified portfolio that is substantially constituted of equity and equity related securities of corporates, and to enable investors avail of a deduction from total income, as permitted under the Income Tax Act, 1961 from time to time. Fund Objective:
The scheme seeks to generate medium to long-term capital appreciation from a diversified portfolio that is substantially constituted of equity and equity related securities Portfolio Holding: Top Holdings EquityValue (Rs in cr. )Qty% Reliance Industries 31. 76307, 2563. 79 Infosys Technologies 28. 22103, 0643. 36 HDFC Bank 21. 66108, 2942. 58 Voltas 21. 621, 195, 0002. 58 ING Vysya Bank 20. 52644, 1452. 45 ICICI Bank 19. 01199, 6642. 27 Larsen and Toubro 18. 27113, 1362. 18 State Bank of India 17. 8577, 5642. 13 Dr Reddys Laboratories 17. 81141, 3172. 12 Ipca Laboratories 17. 43665, 8402. 08 Bajaj Electricals 16. 77731, 8502. 00
Tata Mid Cap Fund is positioned to invest predominantly in equity / equity related instruments of mid cap companies. Mid Cap companies for the purpose of this scheme information document are generally those companies that are either included in the CNX Midcap index or one that fall within market cap requirement of CNX Midcap index. Fund Objective: The scheme aims to invest in companies that are either included in the CNX Midcap 200 Index or the ones that fall within market cap requirement of this index. Portfolio Holding: Top HoldingsApr-30-2010 EquityValue (Rs in cr. )Qty% Oracle Financial Services Software 3. 9118, 0003. 2 Crompton Greaves 3. 85146, 2503. 66 Bank Of Baroda 3. 7354, 0003. 55 Castrol India 3. 72101, 0603. 54 Exide Industries 3. 61295, 0043. 43 Sterlite Technologies 3. 51342, 0003. 33 Nava Bharat Ventures 3. 3980, 0193. 23 CESC 3. 3382, 0003. 17 Gujarat State Petronet 3. 29345, 0053. 13 KEC International 3. 1255, 5402. 97 Jindal Steel & Power 2. 9039, 0002. 76 Unichem Laboratories 2. 8770, 0012. 73 LIC Housing Finance 2. 7829, 0002. 64 Polaris Software Lab 2. 77150, 0032. 63 Jain Irrigation Systems 2. 7425, 0002. 60 Torrent Pharmaceuticals 2. 7150, 6812. 58 Pantaloon Retail 2. 6263, 0002. 49 Sun TV Network 2. 5360, 0002. 40 Asian Paints 2. 912, 0002. 37 Ratnamani Metals and Tubes 2. 42190, 0002. 30 AIA Engineering 2. 3660, 0002. 24 Oriental Bank of Commerce 2. 3466, 0002. 22 Firstsource Solutions 2. 31750, 0162. 20 Tulip Telecom 2. 1926, 0002. 08 Shiv Vani Oil & Gas Exploration Services 2. 1150, 0012. 01 Tamil Nadu Newsprint and Papers 2. 07209, 0051. 97 Voltas 1. 99110, 0001. 89 Divis Laboratories 1. 9228, 5001. 83 Hindustan Zinc 1. 8615, 0001. 77 Allahabad Bank 1. 65100, 0001. 57 Piramal Healthcare 1. 6030, 0011. 52 Texmaco 1. 32100, 0001. 26 Century Textiles and Industries 1. 3125, 0001. 25 Rain Commodities 1. 3072, 9501. 24 Mphasis 1. 2418, 2041. 18 Biocon 1. 2140, 0001. 5 Mcleod Russel (India) 1. 1951, 8991. 13 Central Bank of India 1. 1370, 0031. 07 Dishman Pharmaceuticals & Chemicals 1. 1050, 0001. 04 ESS DEE Aluminium 1. 0421, 0000. 98 Bata India 0. 9635, 0010. 92 Prakash Industries 0. 5424, 0000. 52 Cadila Healthcare 0. 417, 1990. 39 WABCO-TVS (INDIA) 0. 034000. 03 Cash / CallValue (Rs in cr. )Rating% Cash, Others 7. 727. 31 Sector Weightages: Asset Allocation: Tata Equity Opportunities About the Scheme: From time to time, equity markets present opportunities for investors to profit from. The Tata Equity Opportunities Fund aims at proactively taking advantage of those opportunities.
Positioned as a “ stock picker’s delight”, it is a diversified equity fund which undertakes rigorous research to identify opportunities in equity markets that could be for instance, turnaround companies or stocks being re-rated by the market, companies benefitting from changing economic fundamentals, etc. Being a multi-cap fund, it invests in small, medium and large cap stocks wherever the fund manager spots an opportunity. It is hence very actively managed and dynamic in nature, although stock picking is based on a sound bottom-up approach. Fund Objective:
