Objective of working on this project is to analyze the Past Performance of the various Mutual Funds Schemes on the basis of their Historical NAV’s and application of statistical tools on the same. This helps in understanding the performance of mutual fund schemes in terms of both risk as well as return involved.
View more Documents from eNotesMBA A Study of Performance of Mutual Fund Schemes - Document Transcript
1. 1 SR. NO CONTENTS PG. NO.1. CONCEPTUAL OVERVIEW: 52. RESEARCH METHODOLOGY: 2.1 Objectives 8 2.2 Methodology 8 2.3 Significance 8 2.4 Limitations 93. THEORETICAL BACKGROUND: 3.1 Mutual Fund 11 3.2 History of Mutual Fund 13 3.3 Types of Mutual Fund 16 CASE STUDY4 22 DATA ANALYSIS5. 43 FINDINGS6. 64 REFERENCES. 70Get more projects at MBAeNotes
2. 2 CHAPTER 1 CONCEPTUAL OVERVIEW
3. 3 CONCEPTUAL OVERVIEW 1. BASICS OF MUTUAL FUND A mutual fund is a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. The mutual fund will have a fund manager who is responsible for investing the gathered money into specific securities (stocks or bonds). When investors invest in a mutual fund, they are buying units or portions of the mutual fund and thus on investing becomes a 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. But the biggest advantage to mutual funds is diversification, by minimizing risk & maximizing returns.Mutual funds are set up to buy many stocks. Beyond that, investors can diversify even more by purchasing different kinds of stocks which helps to spreading out investors’ money across different types of investments and hence, reduces risk tremendously up to certain extent.It could take you weeks to buy all these investments, but if you purchased a few mutual funds you could be done in a few hours because mutual funds automatically diversify in a predetermined category of investments.
4. 4 CHAPTER 2 RESEARCH METHODOLOGY
5. 52.1) OBJECTIVES:Objective of this study is to analyze the Past Performance of the various Mutual Funds Schemes on the Basis of there Historical NAV’s and application of statisticaltools on the same. This helps in understanding the performance of mutual fund schemes in terms of both risk as well as return involved.2.2 METHODOLOGY:A Sample of 5Schemes each from 5different types of Funds is being taken.Types of Funds taken are follows: Diversified funds Large cap funds Mid cap funds Small cap funds Sector funds Analysis has been done by using following Statistical tools: Sharpe Ratio: It indicates the Risk-Return Performance of Portfolio. Beta: It measures the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Standard Deviation: It shows the historical volatility. Annualized Return: It indicate the return on return over the period of times.2.3 SIGNIFICANCE: Able to learn the various analytical tools of Mutual Fund like Beta, Standard Deviation, Compounded annual growth rate (CAGR) and Sharp Ratio. Get complete overview of Mutual Fund industries in India. Able to know the past performance of various Mutual Funds Schemes.
6. 6 Investors are able to know the investment pattern and market trend of investing in various sectors.2.4 LIMITATIONS: Samples sizes is limited factor, only last fives years of Data has been taken. Past performance may not guarantee the future return. Micro level data have been taken in analysis; Macro level data may affect the returns.
7. 7 CHAPTER 3 THEORETICAL BACKGROUND
8. 8 3.1 Mutual Fund:A Mutual Fund is kinds of trust that pools the savings of a number of investors,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 realized is 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.3.1.1 Advantages of Mutual Fund:a) Professional Management - The basic advantage of funds is that, they are professionally managed by well qualified professional. Investors purchase funds because they do not have the time or the expertise to manage their own portfolio.b) Diversification - Purchasing units in a mutual fund instead of buying individual stocks or bonds, the investors risk is spread out and minimized up to certain extent.The idea behind diversification is to invest in a large number of assets so that a loss in any particular investment is minimized by gains in others.c) Economies of Scale - Mutual fund buy and sell large amounts of securities at a time, thus help to reducing transaction costs, and help to bring down the average cost of the unit for their investors.d)Liquidity - Just like an individual stock, mutual fund also allows investors to liquidate their holdings as and when they want.
9. 9e) Simplicity - Investments in mutual fund is considered to be easy, compare to other available instruments in the market, and the minimum investment is small. Most AMC also have automatic purchase plans whereby as little as Rs. 2000, where SIP start with just Rs.50 per month basis.3.1.2 Disadvantages of Mutual Fund:a) Professional Management- Some funds don’t perform according to the market,as their management is not dynamic enough to explore the available opportunity in the market, thus investor loose there money.b) Costs – The biggest source of AMC income is generally from the entry & exit load which they charge from investors, at the time of purchase. The mutual fund industries are thus charging extra cost under layers of jargon.c) Dilution - Because funds have small holdings across different companies, high returns from a few investments often dont make much difference on the overall return. Dilution is also the result of a successful fund getting too big. When money pours into funds that have had strong success, the manager often has trouble findings good investment for all the new money.d) Taxes - when making decisions about your money, fund managers don't consideryour personal tax situation. For example, when a fund manager sells a security, capital-gain tax is triggered, which affects how profitable the individual is from the sale. It might have been more advantageous for the individual to defer the capital gains liability
10. 10 3.2 History of Mutual Fund in India:The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank of India. The history of mutual funds in India can be broadly divided into four distinct phases:First Phase-(1964-87):Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was setup 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 fromthe 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 asset sunder management’sSecond Phase –1987-93(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 InsuranceCorporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fundestablished in June 1987 followed by Can bank 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 mutualfund 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.
11. 11Third 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, 1993was 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 merger sand 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 ofassets 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 wasbifurcated 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 doesn't come under the purview of the Mutual Fund Regulation The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It isregistered 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
12. 12crores 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 takingplace among different private sector funds, the mutual fund industry has entered itscurrent phase of consolidation and growth.A graph indicates the growth of assets over the years.
13. 133.3 Types of Mutual Funds Schemes:3.3.1 ON THE BASIS OF STRUCTURE: a) Open - Ended Schemes: An open-end fund is one that is available for subscription throughout 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, where you can buy and sell the mutual fund unit at any time. b) Close - Ended Schemes: These schemes have a pre-specified maturity period. One can invest directly in the scheme at the time of the initial issue. Depending on the structure of the scheme there are two exit options available to an investor after the initial offer period closes. First, the Investors can transact (buy or sell) the units of the scheme on the stock exchanges where they are listed. Second, some close-ended schemes provide an additional option of selling the units directly to the Mutual Fund through periodic repurchase at the schemes NAV. SEBI Regulations ensure that at least one of the two exit routes is provided to the investor. c) Interval Schemes: 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.
14. 14 3.3.2 ON THE BASIS OF NATURE: a) Equity fund: These funds invest a maximum part of their Principal amount into equities holdings. The structure of the fund may vary different for different schemes and the fund manager’s outlook on different stocks. Equity investments are meant for a longer term, thus Equity funds rank high on the risk-return matrix. b) 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. c) Balance fund: They are a mix of both equity and debt funds. They invest in both equities and fixed income securities, which are in line with pre-defined investment objective of the scheme. These schemes aim to provide investors with the best of both the Funds. Equity part provides growth and the debt part provides stability in returns.
15. 15 3.3.3 ON THE BASIS OF INVESTMENT OBJECTIVE: a) Growth Schemes: These Schemes are also known as equity schemes. The aim of these schemes is to provide capital appreciation over medium to long term. These schemes normally invest a major part of their fund in equities and are willing to bear short-term decline in value for possible future appreciation b) Income Schemes: These are also known as debt schemes. The aim of these schemes is to provide regular and steady income to investors. These schemes generally invest in fixed income securities such as bonds and corporate debentures. Capital appreciation in such schemes may be limited c) Money Market Schemes: These Schemes aim to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer, short-term instruments, such as treasury bills, certificates of deposit, commercial paper and inter-bank call money.
16. 16 3.3.4 Types of Funds taken for analysis: a) Large Cap Funds: These are those types of Funds which invest their money in large Blue chip Companies, having with a market capitalization of more than Rs 1000 crores. Investing in large cap is a low risk-return preposition because such funds are widely research and information available. One of the advantage of large cap funds are that they are less volatile than mid cap and small cap funds because investors are investing in this types of fund for a long term prospective and help to keep these fund away from the volatility of the markets. Top Performer under this category: 1) HDFC Top 200: It’s Compounded Annualized Returns of last 5 years is 24.5%. 2) Reliance Large Cap Fund: It’s Compounded Annualized Returns of last 5 years is 22.6%. 3) Franklin India Blue Chip: It’s Compounded Annualized Returns of last 5 years is 20.7%. 4) Kotak 30: It’s Compounded Annualized Returns of last 5 years is 19%. 5) DSPML Top 100 Equity: It’s Returns of last year is 18.4%. b) Mid Cap Funds: This types of Funds invest their money in mid sizes companies. Companies having market Capitalization between the Rs 500crores to Rs 1000 crores are come under the mid cap companies. Mid Cap Funds are very volatile and tends to fall if the market is fall in bad times. But this gives good return in
17. 17 short term. Top Performer under this category: 1) IDFC Premier equity fund: It’s Compounded Annualized Returns of last 5 years is 29.2%. 2)Sundaram select mind cap fund (G): It’s Compounded Annualized Returns of last 5 years is 24.8%. 3) Reliance Growth: It’s Compounded Annualized Returns of last 5 years is 23%. 4) Birla Sun life mid cap fund: It’s Compounded Annualized Returns of last 5 years is 21.9%. 5) L&T mid cap fund: It’s Compounded Annualized Returns of last 5 years is 17%. c) Small Cap Funds: These types of Funds are investing their money in Small size companies. Companies having market capitalization up to Rs 500 crores come under the categories of Small Cap companies. Small Cap Funds are more volatile than Mid Cap & Large Cap Funds. It’s Risk-Return Matrix are very high. Top performer under this category: 1) L&T Small cap fund: 2) JP Morgan India smaller companies fund(G) 3) HSBC Small cap fund 4) Sundaram select small cap fund (G): d) Sector Funds: These types of Funds are investing their money in particular sector of the
18. 18 economy. Such as infrastructure, Banking, Retail, FMCG, ect. These Funds are more volatile than Diversified funds having stocks of many sectors. These Funds are high risk -reward category. These types of Funds are only for the short term investors, who are able to take high risk ability. Top Performer funds under this category: 1) Reliance Diversified Power sector fund (G): It’s Compounded Annualized Returns of last 5 years is 27.8%. 2) Reliance Banking fund (G): It’s Compounded Annualized Returns of last 5 years is 25.7%. 3) Reliance Pharma (G): It’s Compounded Annualized Returns of last 5 years is 25.4%. 4) ICICI Prudential infrastructure fund (G): It’s Compounded Annualized Returns of last 5 years is 20.5%. 5) UTI Banking sector fund (G): It’s Compounded Annualized Returns of last 5 years is 20.4%.
19. 19 e) Diversified funds: These are a kind of funds which invest there most of there money in different sectors like FMCG, Infrastructure, Pharma, ect. This helps to Diversified there Risk into various sectors. If one sector is going down then other sector may compensate the loss. These types of funds give consistent return without much volatility in long term. Top Performer Funds under this category: 1) IDFC Premium Equity fund-planA (G): It’s Compounded Annualized Returns of last 5 years is 26.9%. 2) Reliance regular saving fund-Equity growth: It’s Compounded Annualized Returns of last 5 years is 26% return. 3) HDFC Top 200- Growth: It’s Compounded Annualized Returns of last 5 years is 21.5%. 4) HDFC Equity fund (G): It’s Compounded Annualized Returns of last 5 years is 21.3%. 5) Birlasunlife frontline Equity fund: It’s Compounded Annualized Returns of last 5 years is 21.2%.
20. 20 CHAPTER 4 CASE STUDY
21. 214.1 RELIANCE MUTUAL FUND:Reliance Mutual Fund is India’s leading Mutual Fund with Quarter Average Assetsunder management (AAUM) of Rs 102066Crores.Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is oneof the fastest growing mutual funds in the country. RMF offers investors a well-rounded portfolio of products to meet varying investor requirements and haspresence in 159 cities across the country. Reliance Mutual Fund constantlyendeavors to launch innovative products and customer service initiatives to increasevalue to investors. "Reliance Mutual Fund schemes are managed by Reliance CapitalAsset Management Limited., a subsidiary of Reliance Capital Limited, which holds93.37% of the paid-up capital of RCAM. The schemes that I have taken for analysis from Reliance Mutual Fund are:4.1.1 RELIANCE BANKING FUND (G) [under Sector Fund]: The primaryinvestment objective of the Scheme is to seek to generate continuous returns by actively investing in equity and equity related or fixed income securities ofcompanies in the Banking Sector.Fund overview: Fund Types- Open Ended Investment Plan- Growth Assets sizes- Rs1466 Crores Launches date- May21, 2003 Benchmark- Bank Nifty Fund Manager- Mr. Sunil Singhania
22. 224.1.2 RELIANCE MEDIA & ENTERTAINMENT FUND(G) [under Sector Fund]: The primary investment objective of the Scheme is to generate consistent returns by investing in equity / equity related or fixed income securities of media& entertainment and other associated companies. Fund overview: Fund Types- Open Ended Investment Plain- Growth Assets sizes- Rs112.05 crores Launch date- Sep 27, 2007 Benchmark- NA Fund Manager- Mr. Sailesh Raj Bhan4.1.3 RELIANCE VISION (G) [under large cap fund]: Seeks to provide long term capital appreciation by primarily investing in growth oriented stocks.Fund overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs 61crores Launch date- Aug’8, 2007 Bench mark- BSE 100 Fund Manager- Mr. Ashwani Kumar
23. 234.2 UTI MUTUAL FUND:UTI Mutual Fund was started in 14, January 2003 by UTI Trustee Co, Pvt. Ltd. formanaging the schemes of UTI Mutual Fund. UTIAMC provides professionallymanaged back office support for all business services of UTI Mutual Fund inaccordance with the provisions of the Investment Management Agreement, the TrustDeed, the SEBI Regulations and the objectives of the schemes.Since February 3, 2004, UTIAMC is also a registered portfolio manager under theSEBI for undertaking portfolio management services. UTIAMC also acts as themanager and marketer to offshore funds through its 100 % subsidiary, UTIInternational Limited, registered in Guernsey, Channel Islands.UTIAMC presently manages a capital of over Rs. 65, 38,724.42 lakhs as on 31stDecember 2010. UTI Mutual Fund has a track record of managing a variety ofschemes catering to the needs of every class of citizens. It has a nationwide networkconsisting 148 UTI Financial Centers (UFCs) and UTI International offices inLondon, Dubai and Bahrain.UTIAMC has a well-qualified, professional fund management team, which has beenfully empowered to manage funds with greater efficiency and accountability in thesole interest of the unit holders.UTIMF has consistently reset and upgraded transparency standards. All thebranches, UFCs and registrar offices are connected on a robust IT network to ensurecost-effective quick and efficient service.The schemes that I have taken for analysis from UTI Mutual Fund are:4.2.1 UTI INFRASTRUCTURE FUND(G) [under Sector Fund] : Investment Objective is capital appreciation by investing in the companies engaged in thesectors like Metals, Real Estate, Oil ; Gas, Power, Chemicals, Engineering etc.
24. 24Fund overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs 1581crores Launch date- Apr7, 2004 Bench mark- BSE 100 Fund Manager- Mr. Sanjay Dongre4.2.2 UTI LARGE EQUITY FUND (G) [under large cap Fund]: The Scheme is designed specifically for large corporate investors and as well as high net worthy investors who would like to invest large amount in exclusive Scheme which allow sentry and exit at NAV. Fund overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs 2170crores Launch date- may18, 1992 Bench mark- BSE sensitive index Fund Manager- Mr. Anoop Bhaskar
25. 254.2.3 UTI MID CAP FUND [ under Mid cap fund]: It’s aims to provide to investors growth of capital over a period of time by investing in mid cap stock ,aswell as to make periodical distribution of income from investment in stocks ofrespective sectors of the Indian economy.Fund overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs 375crores Launch date- Apr 07, 2004 Bench mark- CNX mid cap Fund Manager- Mr. Anoop Bhaskar
26. 264.3 SBI MUTUAL FUND:SBI Mutual Fund is India’s largest bank sponsored mutual fund and has a trackrecord in judicious investments and consistent wealth creation. The fund traces itslineage to SBI - India’s largest banking enterprise. The institution has grown immensely since its inception and today it is Indias largest bank, patronized by over80% of the top corporate houses of the country.SBI Mutual Fund is a joint venture between the State Bank of India and Society General Asset Management, one of the world’s leading fund managementcompanies that manages over US$ 500 Billion worldwide.In twenty years of operation, the fund has launched 38 schemes and successfully redeemed fifteen of them. In the process it has rewarded its investors handsomely with consistent returns.A total of over 5.8 million investors have reposed their faith in the wealth generationexpertise of the Mutual Fund.Today, the fund manages over Rs. 42,100 crores of assets and has a diverse profile ofinvestors actively parking their investments across 38 active schemes.The fund serves this vast family of investors by reaching out to them through network of over 130 points of acceptance, 29 investor service centers, 59 investorservice desks and 6 Investor Service Points.SBI Mutual is the first bank-sponsored fund to launch an offshore fund – Resurgent India Opportunities Fund. The schemes that I have taken for analysis from SBI Mutual Fund are:
27. 274.3.1SBI MAGNUM SECTOR UMBRELLA-PHARMA (G) [under sector Fund]:It provides the investor’s maximum growth opportunity through equity investment sin stocks of growth oriented sector called Pharma in long run.Fund overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs 39.69 crores Launch date- JUL 14, 1999 Bench mark- BSE health care Fund Manager- Mr. Sohini Andani4.3.2 SBI MAGNAM EQUITY FUND (G)[ under large cap Fund]: To provideinvestors long term capital appreciation along with the liquidity of an open-endedscheme. The scheme will invest in a diversified portfolio of equities of high growthcompanies.Fund overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs 469 crores Launch date- jan 1, 1991 Bench mark- BSE 100 Fund Manager- Mr. R Srinivasan
28. 284.3.3 SBI MAGNUM MID CAP FUND [under mid cap Fund]: To provideinvestors with opportunities for long term growth in capital along with the liquidityof an open ended scheme by investing predominantly in a well diversified basket ofequity stocks of companies and in debt and money market instruments.Fund overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs 303crores Launch date- Mar 17.2005 Bench mark- CNX MID CAP Fund Manager- Mr. Sohini Andani
29. 294.4 FRANKLIN TEMPLETION MUTUAL FUND:Franklin Templeton Investments is one of the largest financial services groups in theworld based at San Mateo, California USA. The group has US$ 642.3 billion inassets under management globally.Franklin Templeton has offices in 33 locations across India and manages averageAUM of Rs. 42142.21 crores for over 22 lakhs investors (as on September 30, 2010).The schemes that I have taken for analysis from FRANKLIN TEMPLETION MutualFund are:4.4.1 FRANKLIN TEMPLETION FMCG FUND [under Sector Fund]: Thescheme aims to achieve long term capital appreciation through exclusively investingin shares of Fast Moving Consumer Goods Companies. Fund overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs 51crores Launch date- Mar 31.1999 Bench mark- NA Fund Manager- Anil Prabhudas4.5 JM FINANCIAL MUTUAL FUND:It is one of India s first private sector mutual funds-an integral part of the first wavethat commenced operations in 1993-94.It is a part of JM Financial Group , which hasa rich heritage, built over three decade.
30. 30Groups origins can be traced back to the 1950s when the Kampani family began toget involved in Indias then capital markets. JM Financial & Investment Consultancy Services was founded on September 15, 1973. JM Financial Asset Management Private Limited started operations in December1994 with a simultaneous launch of three funds-JM Liquid Fund (now JM Income Fund), JM Equity Fund and JM Balanced Fund. Today, JM Financial Mutual Fundoffers a bouquet of funds that caters to the diverse needs of both its institutional andindividual investors.It’s mission is to manage risk effectively while generating top quartile returns acrossall product categories. We believe that to cultivate investor loyalty, we must providea safe haven for their investments. We are focussed on helping our investors realizetheir investment goals through prudent advice, judicious fund management, accurateresearch, and strong systems of managing risk scientifically.The schemes that I have taken for analysis from JM FINANCIAL Mutual Fund are:4.5.1 JM LARGE CAP FUND (G) [under large cap Fund]: The Scheme aims toprovide long term capital appreciation from a portfolio that is investedpredominantly in equity and equity related instruments in the Healthcare sector. Fund overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs5.1 crores Launch date- Jun 9.2004 Bench mark- BSE Health care sector Fund Manager- Mr. Sanjay Chhabaria
31. 314.5.2 JM MID CAP FUND [under mid cap Fund]: The investment objective of theScheme is to provide capital appreciation by primarily investing in mid cap fund.Fund overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs9.7 crores Launch date- Jun 9.2004 Bench mark- BSE 500 Fund Manager- Mr. Sanjay Chhabaria4.5.3 JM SMALL & MID CAP FUND (G)[under small cap Fund]: The investmentobjective of the Scheme is to provide capital appreciation by primarily investing insmall cap and mid-cap stocks. Fund overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs 58 crores Launch date- Mar 9, 2007 Bench mark- CNX MID CAP Fund Manager- Mr. Sanjay Chhabaria
32. 324.6BIRLA SUNLIFE MUTUAL FUND:Birla Sun Life Asset Management Company Ltd. (BSLAMC) is a joint venturebetween the Aditya Birla Group and the Sun Life Financial Services Inc. of Canada.The joint venture brings together the Aditya Birla Groups experience in the Indianmarket and Sun Lifes global experience.Birla Sunlife Mutual Fund is established in 1994 .It offer a range of investmentoptions, including diversified and sector specific equity schemes, fund of fundschemes, hybrid and monthly income funds, a wide range of debt and treasuryproducts and offshore funds. BSLAMC is one of the largest team of researchanalysts in the industry, dedicated to tracking down the best companies to invest in.BSLAMC strives to provide transparent, ethical and research-based investments andwealth management services.The schemes that I have taken for analysis from BIRLA SUNLIFE Mutual Fundare:4.6.1BIRLASUNLIFE ADVANTAGE FUND [under Large cap Fund]: To achievelong-term growth of capital through investments mainly in equity and equity relatedinstruments. Fund overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs 414 crores Launch date- Feb 24, 1995 Bench mark- BSE Sensitive index Fund Manager- Mr. Ajay Argal
33. 334.6.2BIRLASUNLIFE SMALL & MID CAP FUND [under small cap Fund]:It objective is to generate consistent long-term capital appreciation by investingpredominantly in equity and equity related securities of companies considered to besmall and mid cap. It may also invest a certain portion of its corpus in fixed incomesecurities including money market instruments, in order to meet liquidityrequirements from time to time.Fund overview Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs 189 crores Launch date- Apr 9, 2007 Bench mark- CNX MID CAP Fund Manager- Mr. Ankit Sancheti
34. 344.7 KOTAK MAHINDRA MUTUAL FUND:Kotak Mahindra is one of Indias leading financial institutions, offering completefinancial solutions that encompass every sphere of life. From commercial banking, tostock broking, to mutual funds, to life insurance, to investment banking, the groupcaters to the financial needs of individuals and corporate.The group has a net worth of Rs.7,911 crore and employs around 20,000 employeesacross its various businesses, servicing around 7 million customer accounts through adistribution network of 1,716 branches, franchisees and satellite offices across morethan 470 cities and towns in India and offices in New York, California, SanFrancisco, London, Dubai, Mauritius and Singapore.Kotak Mahindra Asset Management Company Limited (KMAMC), a wholly ownedsubsidiary of KMBL, is the Asset Manager for Kota Mahindra Mutual Fund(KMMF). KMAMC started operations in December 1998 and has over 10 Lacinvestors in various schemes. KMMF offers schemes catering to investors withvarying risk - return profiles and was the first fund house in the country to launch adedicated gilt scheme investing only in government securities.The schemes that I have taken for analysis from KOTAK MAHINDRA MutualFund are:4.7.1 KOTAK MAHINDRA MID CAP FUND [under mid cap Fund]: Theinvestment objective of Kotak Midcap is to generate capital appreciation from adiversified portfolio of equity & equity related securities. The scheme predominantlyinvests in companies in the mid market capitalization segment across sectors. Thescheme is well positioned to provide the benefit of potential growth offered by midcap stocks which are likely to become tomorrows large caps.Fund overview:
35. 35 Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs 254 crores Launch date- jan 28, 2005 Bench mark- CNX Nifty junior Fund Manager- Mr. Pankaj Tibrewal4.7.2 KOTAK EQUITY FOF [under Diversified fund]: To generate long-termcapital appreciation from a portfolio created by investing predominantly in open-ended diversified equity schemes of Mutual Funds registered with SEBI.Fund overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs 49 crores Launch date- Aug 09, 2004 Bench mark- NA Fund Manager- Mr. Sajit Pisharodi
36. 364.8 SUNDARAM BNB PARIBAS MUTUAL FUND:Sundaram Mutual, identifying an investment opportunity long before it manifests asone, is the heart of our business belief.Being in the financial sector for a long time has given us a great understanding of theIndian economy and that guides us while picking the companies for its Funds. Onceit unearth a potential opportunity, it’s Financial Experts spend countless time toresearch the companies, to see what will deliver the best returns for your money. Itsfinancial experts are fine tuned to the larger global picture and all its complexities aswell as the intricacies of the Indian market. We track global economic trends andmarket behaviour to better understand the domestic markets. We are constantly onthe trail of promising opportunities and once identified, a new theme is thoroughlyresearched and tested on various platforms before being offered to the investingpublic.The schemes that I have taken for analysis from SUNDARAM BNB PARIBASMutual Fund are:4.8.1 SUNDARAM SELECT MID CAP FUND (G) [under mid cap fund]:Sundaram Select Mid Cap Fund is an open ended equity scheme that seeks capitalappreciation by investing in diversified stocks that are generally termed as mid -caps.Fund overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs 2294 crores Launch date- Jul 19, 2002 Bench mark- BSE Mid cap index Fund Manager- Mr. Satish Ramanathan
37. 374.8.2SUNDARAM BNB PARIBAS SELECT SMALL CAP FUND(G)[small capfund]: The primary investment objective of the scheme is to generate consistentlong-term returns by investing predominantly in equity/equity related instruments ofcompanies that can be termed as small cap.Fund objective: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs 364 crores Launch date- Jan 24, 2006 Bench mark- BSE Small cap index Fund Manager- Mr. Satish Ramanathan4.8.3 SUNDARAM BNB PARIBAS GROWTH FUND (G)[under Diversifiedfund]:It seeks to achieve capital appreciation by investing in a well diversified basket ofequities and equity-related instruments. Income generation would be the secondaryconsideration.Fund Overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- - Launch date- - Bench mark- - Fund Manager- -
38. 384.9 L & T MUTUAL FUND:L&T Mutual Fund is one of the premier mutual funds in India that serves theinvestment needs of investors through a suite of acclaimed mutual fund schemes.With world class investment management practices and an equally competent fundmanagement team, L&T Mutual Fund helps its investors reach their financial goals.Whether you are an individual investor, institution, or finance professional, you cangain from the products and expertise that we offer.L&T Mutual Fund is backed by one of the most trusted and valued brands, L&TFinance – incorporated as Non Banking Finance Company in November 1994, hasearned the trust of thousands of investors by adapting well to the changing marketingdynamics and emerging as a profitable venture despite the turbulences in theFinancial market over the past few years.The schemes that I have taken for analysis from L & T Mutual Fund are:4.9.1 L & T SMALL CAP FUND [under small cap fund]: The scheme seeks togenerate long term capital appreciation by investing predominantly in equity andequity related instruments of companies with small cap.Fund overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs 20 crores Launch date- Dec 20, 2007 Bench mark- BSE Small cap index Fund Manager- Mr. Anant Deep Katre
39. 394.10 TATA MUTUAL FUND:Tata Mutual Fund has earned the trust of lakhs of investors with its consistentperformance and world-class service.It manages around Rs20,854.00 crores (average AUM for the quarter of October-December 2010) worth of assets across its varied offerings. Tata Mutual Fund offersan investment option for everyone, whether you are a businessman or salariedprofessional, a retired person or housewife, an aggressive investor or a conservativecapital builder.The Tata Asset Management philosophy is centered on seeking consistent, long-termresults. Tata Asset Management aims at overall excellence, within the framework oftransparent and rigorous risk controls.Tata Mutual Fund offers investors a broad range of managed investment products invarious asset classes and risk parameters, with operational flexibility to suit theirvaried investment needs.It offer a wide range of services to assist investors have a fulfilling and rewardingfinancial planning experience with us. It have designed our services keeping in mindthe needs of our investors, giving them a smooth and hassle-free financial planningprocess.The schemes that I have taken for analysis from TATA Mutual Fund are:1.10.1 TATA DIVIDENT YIELD FUND (G) [under Diversified fund]: ToProvide income distribution and / or medium to long term capital gains by investing predominantly in high dividend yield stocks.Fund overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs 177 crores Launch date- Oct 27, 2004
40. 40 Bench mark- BSE Sensitive index Fund Manager- Mr. Mahendra Jajoo / Sachin Relekar4.11 HDFC MUTUAL FUND:HDFC Asset Management Company Ltd (AMC) was incorporated under theCompanies Act, 1956, on December 10, 1999, and was approved to act as an AssetManagement Company for the HDFC Mutual Fund by SEBI vide its letter dated July3, 2000.In terms of the Investment Management Agreement, the Trustee has appointed theHDFC Asset Management Company Limited to manage the Mutual Fund. The paidup capital of the AMC is Rs. 25.161 crore. The AMC is managing 28 open-endedschemes of the Mutual Fund some are HDFC Growth Fund, HDFC Equity Fund,
41. 41HDFC Top 200 Fund, HDFC Capital Builder Fund, HDFC Core & Satellite Fund,HDFC Premier Multi-Cap Fund, and HDFC Index Fund.The AMC is also managing 7 closed ended Schemes some are HDFC Long TermEquity Fund, HDFC Infrastructure Fund, and HDFC Fixed Maturity Plans - SeriesXI, HDFC Fixed Maturity Plans - Series XII.The AMC is also providing portfolio management / advisory services.The schemes that I have taken for analysis from HDFC MUTUAL FUND are:4.11.1 HDFC TOP200 FUND [under Diversified fund]: It objective is to generatelong term capital appreciation by investing in a portfolio of equities and equitylinked instruments drawn from the BSE 200 Index.Fund Overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs. 9425 crores Launch date- Oct 27, 2004 Bench mark- BSE 200 index Fund Manager- Mr. Prashant Jain4.12 RELIGARE MUTUAL FUND:Religare Mutual Fund is managed by Religare Asset Management CompanyLimited, a subsidiary of Religare Securities Limited (RSL). The AMC wasincorporated on May 20, 2005 and the mutual fund was set up on July 24, 2006.It manages Assets around Rs104 billion dollars. Religare Asset Management aims toserve investment needs of individual investors, corporate and institutions throughmutual funds and sub-advised portfolios. Its product portfolio is managed byindividually focused management teams to create optimum balance and results. Theyare committed to providing financial care and top class service. They subscribe to
42. 42sustainable business models and process that factor in the dynamism of the businessin fast changing market scenarios.The schemes that I have taken for analysis from Religare Mutual Fund are: 4.12.1 RELIGARE SMALL &MID CAP FUND [under small cap fund]: The Scheme seeks to provide long term capital appreciation by investing in a portfolio that is predominantly constituted of equity and equity related instruments of mid and small cap companies. Fund overview: Fund Types- Open Ended Investment Plan- Growth Assets Sizes- Rs 22.4 crores Launch date- Jan 7, 2008 Bench mark- NA Fund Manager- Mr. Vinay Paharia
43. 43 CHAPTER 5 DATA ANALYSIS5.1 Diversified Funds:1) CAGR Kotak Reliance Sundaram Tata Dividend HDFCYr/Schemes Equity Diversified Balance yield TOP200 FOF Power fund
44. 44Last 1 yrs 103.78 86.03 96 71.52 102.25Last3 yrs 20.3 13.08 32.07 12.61 20.7Last 5yrs 19.14 21.11 40.16 16.47 29.14 CAGR 120 100 Percent(%) 80 60 40 last 1 yrs 20 last3 yrs 0 last 5yrs Tata Kotak Reliance Sundaram HDFC dividend Equity FOF diversified balance TOP200 yield power fund SchemesINTERPRETATIONS:a) In last 1yr HDFC, Tata and Reliance gave maximum return of 102.2%, 103.7%and 96% respectively, Followed by Kotak and Sundaram by 86.03% and 71.5%respectively.b) In last 3 & 5 yrs, Reliance gave maximum return against its competitors.2) Standard DeviationYrs/Schemes Tata Kotak Reliance Sundaram HDFC Dividend Equity Diversified Balance fund TOP200 yield FOF powerLast 1 yrs 0.071419205 0.09292427 0.101266115 0.068953248 0.0932788
45. 45Last 3 yrs 0.099664831 0.09966483 0.111054683 0.082246954 0.0968572Last 5yrs 0.087110732 0.11201375 0.09839249 0.085491183 0.0841035 STANDARD DEVIATION 0.12 0.1 0.08 (in Rs) 0.06 0.04 last 1 yrs 0.02 last3 yrs 0 last 5yrs Tata divident Kotak Equity Reliance Sundaram HDFC yield FOF diversified balance fund TOP200 power SchemesINTERPRETATIONS:a) As far as the Standard Deviation in last 1 yrs is concern, it is high in Reliance,which is 0.1 and low in Sundaram (0.068).b) In last 3years, again Reliance has high Standard Deviation about 0.011 followedby Kotak and Tata by0.09 both.c) But in last5 yrs, Kotak is highly volatile followed by Reliance and Tata.3) BetaYrs/Schemes Tata Kotak Reliance Sundaram HDFC Dividend Equity Diversified Balance fund TOP200 yield FOF Power 0.685522556 0.91563 3 0.970784506 0.839178531 0.889744
46. 46 Last 1 yrs Last 3 yrs 0.173402004 0.1508907 0.100171515 0.094652253 0.127550 Last 5yrs -0.01188823 0.1985720 0.970784506 0.120147547 0.167198 BETA 1.2 1 0.8 0.6 (in Rs) 0.4 last 1 yrs 0.2 last3 yrs 0 last 5yrs -0.2 Tata Kotak Reliance Sundaram HDFC divident Equity FOF diversified balance TOP200 yield power fund Schemes INTERPRETATIONS: a) In last 1 yr Reliance has high Beta about 0.97 as compare to others. b) In last 3 yrs all the funds are less volatile with Nifty, but in last 5 yrs Reliance has high Beta of 0.97, so it has high volatility. c) Tata dividend has low Beta in all the year. 4) Sharpe RatioYrs/Schemes Tata Kotak Reliance Sundaram HDFC TOP200 Dividend Equity Diversified Balance
47. 47 yield FOF power fundLast 1 yrs 2.82288 1.92184 1.941195962 1.78291329 2.189613153Last3 yrs 0.54053 0.36523 0.75575441 0.34489246 0.551588391Last 5yrs 0.46532 0.68236 0.991355024 0.50778455 0.82590418 SHARPE RATIO 3 2.5 2 (in Rs) 1.5 1 last 1 yrs 0.5 last3 yrs 0 Tata divident Kotak Equity Reliance Sundaram HDFC last 5yrs yield FOF diversified balance fund TOP200 power Schemes INTERPRETATIONS: a) As far as last 1 yr is concern, Tata has highest Sharpe ratio (2.8), followed by HDFC (2.1), Reliance (1.94), Kotak (1.92) and Sundaram (1.7) . b) In last 3 yrs & 5 yrs, Reliance has highest Sharpe Ratio against its competitors. c) Tata has low Beta in all the years. 5.2 Sector Fund 1) CAGR (in %)
48. 48Yr/Schemes Reliance Franklin UTI SBI Reliance Banking(G) FMCG(G) infrastructure(G) magnum Media&Ent(G) Pharma(G)Last1 yrs 120.55 68.57 66.77 112.96 18.94Last3 yrs 30.21 17.52 10.89 3.61 2.07Last 5yrs 25.37 21.73 23.23 12.31 88.77 CAGR 140 Percentage(%) 120 100 80 60 40 20 0 last1 yrs last3 yrs last 5yrs Schemes INTERPRETATIONS: a) In last1 years, Reliance Banking and SBI gave highest return of 120% and 112.9% respectively against its competitors. b) In last 3 years, Reliance Banking gave highest return of 30.2%. And In last 5 yr, Reliance Media & Ent give maximum return of 88.7%. 2) Standard Deviation
49. 49Yr/Schemes Reliance Franklin UTI SBI Reliance banking(G) FMCG(G) infrastructure(G) magnum Media&Ent(G) Pharma(G)Last1 yrs 0.128943375 0.054102785 0.094154994 0.095626797 0.107992407Last3 yrs 0.115829428 0.060318612 0.104597968 0.109212679 0.118757826Last 5yrs 0.102489584 0.060205922 0.09752141 0.09470864 0.104554454 STANDARD DEVIATION 0.14 0.12 0.1 (in Rs) 0.08 0.06 0.04 0.02 0 last1 yrs last3 yrs last 5yrs Schemes INTERPRETATIONS: a) In all the three years is concern Reliance Banking has highest Standard Deviation, so it is highly volatile as compare to its competitors. b) Franklin FMCG is less volatile as compare to its competitors, so it is less Risky to invest in this Fund. 3) Beta
50. 50Yr/Schemes Reliance Franklin UTI SBI magnum Reliance banking(G) FMCG(G) infrastructure(G) Pharma(G) Media&Ent(G)Last1 yrs 1.230722931 0.162919496 0.914220081 0.85286803 1.031589083Last3 yrs 0.213887277 0.054444645 0.096699523 0.130467228 0.231784503Last 5yrs 0.248025961 0.093340307 0.145949941 0.168794462 0.26664004 BETA 1.4 1.2 1 (in Rs) 0.8 0.6 0.4 0.2 0 last1 yrs last3 yrs last 5yrs Schemes INTERPRETATIONS: a) In last 1 yr, Reliance Banking has high Beta of 1.2, so it is highly volatile as compare to its competitors. b) Overall, Franklin FMCG is less volatile as compare to its competitors, so it is less Risky to invest in this Fund. 4) Sharpe ratio
51. 51Yr/Schemes Reliance Franklin UTI SBImagnum Reliance banking(G) FMCG(G) infrastructure(G) Pharma(G) Media&Ent(G)Last1 yrs 1.867210636 2.60860683 1.550735632 1.919779766 1.738190637Last3 yrs 0.701616713 0.59406659 0.296815592 0.125784902 -0.044702739Last 5yrs 0.642094973 0.76680298 0.611539329 0.339000122 0.40984207 SHARPE RATIO 3 2.5 2 (in Rs) 1.5 1 0.5 0 last1 yrs -0.5 last3 yrs last 5yrs Schemes INTERPRETATIONS: a) In last 1 yr Franklin FMCG has highest Sharpe Ratio of 2.6 as compare to its competitors, so it is good indicator for it. b) In last 3 yrs Reliance Banking & Franklin FMCG has high Sharpe Ratio of 0.7 and 0.5respectively and Reliance Media & Ent. has lowest of -0.4. c) In last 5 yrs, Franklin has highest Sharpe ratio of 0.7 and SBI has lowest of 0.3. 5.3 Large cap Funds 1) CAGR
52. 52Yrs/Schemes Reliance UTI JM large Birlasunlife SBI magnum vision equity(G) cap adv fund eqlast 1 yrs 88.44 82.65 48.28 14.48 94.09last 3 yrs 14.1 16.34 0.8 8.24 37.61last 5 yrs 23.39 18.02 7.94 18.16 21.11 CAGR 100 90 80 Percentage(%) 70 60 50 40 last 1 yrs 30 last 3 yrs 20 10 last 5 yrs 0 Reliance UTI JM largecap Birlasunlife SBI magnum vision equity(G) adv fund eq SchemesINTERPRETATIONS:a) In last 1 yr, CAGR of SBI, Reliance vision & UTI has high by94%, 88.4%, and82.6% respectively, as compare to its competitors.b) In last 3&5 yrs SBI gave highest return of about 37.6% &21.1% respectively.c) Overall, Birlasunlife adv. Fund gave least return.2) Standard DeviationYrs/Schemes Reliance UTI JM large Birlasunlife SBI magnum
53. 53 vision equity(G) cap adv fund eqLast 1 yrs 0.09991376 0.0744288 0.0783383 0.115973242 0.097667168Last 3 yrs 0.10018448 0.0833512 0.0888638 0.112693896 0.105668883Last 5 yrs 0.08864059 0.0780083 0.0813522 0.096871642 0.095151301 STANDARD DEVIATION 0.14 0.12 Percentage(%) 0.1 0.08 0.06 last 1 yrs 0.04 0.02 last 3 yrs 0 last 5 yrs Reliance UTI JM Birlasunlife SBI vision equity(G) largecap adv fund magnum eq SchemesINTERPRETATIONS:a) In last 1, 3&5 years, Birlasunlife adv. fund has high Standard Deviation, so it ishighly volatile as compare to its competitors.b) Overall, UTI equity is least volatile fund among its competitors, so it is better toinvest in such a less risky fund.
54. 543) BetaYrs/Schemes Reliance UTI JM large Birlasunlife SBI magnum vision equity(G) cap adv fund eqLast 1 yrs 0.17248455 0.7078600 0.7575292 1.128608674 0.93092074Last 3 yrs 0.13229572 0.1190345 0.0703577 0.165711517 0.139890907Last 5 yrs 0.17248455 0.1607937 0.1049985 0.206156923 0.182037128 BETA 1.2 1 0.8 in(Rs) 0.6 last 1 yrs 0.4 last 3 yrs 0.2 last 5 yrs 0 Reliance UTI JM largecap Birlasunlife SBI magnum vision equity(G) adv fund eq SchemesINTERPRETATIONS:a) In last 1 yr, Birlasunlife has a high Beta of 1.1 as compare to its competitors,which shows high volatility.b) In last 1yr, Reliance vision has low Beta (0.17)c) JM large cap in last 3&5 yrs also has low Beta about 0.7 &0.1 respectively, so it isless risky and safer to invest.
55. 554) Sharpe RatioYr/Schemes Reliance UTI JM large cap Birlasunlife SBI magnum eq vision equity(G) adv fundLast 1 yrs 2.194170308 0.01409560 0.3844196 1.741029813 1.80743058Last 3 yrs 0.377029792 0.46218302 -0.0158758 0.237019813 0.200605215Last 5 yrs 0.646034027 0.5301262 0.2093977 0.485836378 0.53402252 SHARPE RATIO 2.5 2 Percentage(%) 1.5 1 last 1 yrs last 3 yrs 0.5 last 5 yrs 0 Reliance UTI equity(G) JM largecap Birlasunlife SBI magnum -0.5 vision adv fund eq SchemeINTERPRETATIONS:a) In last 1 yr Reliance vision, SBI eq& Birlasunlife has high Sharpe Ratio about2.1, 1.8 &1.7respectively, which shows good indicators.UTI has low which is.01.b) In last 3&5 years, JM large cap has a less Sharpe ratio about -.01 &0.2respectively, which shows its poor Performance.
56. 565.4 Midcap Fund1) CAGRYrs/Schemes JM midcap SBI magnum UTI Kotak Sundaram mid cap midcap midcap select mid capLast1yrs 110 119.2 129.86 109.6 139.49Last3 yrs 7.9 1.2 13.14 5.2 15.94Last 5yrs 14.54 16.86 16.49 17.19 28.38 CAGR 160 140 120 100 (in Rs) 80 60 last1yrs 40 20 last3 yrs 0 last 5yrs JM midcap SBI magnum UTImidcap Kotak Sundaram mid cap midcap select mid cap SchemesINTERPRETATIONS:a) In last 1 yr, Sundaram midcap gave highest return about 139.4%, followed byUTI,SBI and JM by 129.8%, 119%, and 110% respectively, and Kotak gave lowest retunof 109.6%b) In last 3&5 yrs, Sundaram gave highest return about 15.9% & 28.3% respectively.And SBI gave lowest return.
57. 572) Standard DeviationYrs/Schemes JM SBI magnum UTI midcap Kotak Sundaram midcap mid cap midcap select mid capLast1yrs 0.1182776 0.156138896 0.1040285 0.1010611 0.150454556Last3 yrs 0.1129622 0.144536727 0.1173093 0.1118037 0.130397639Last 5yrs 0.102009 0.229935443 0.105609 0.09941857 0.109763284 STANDARD DEVIATION 0.25 0.2 0.15 in (Rs) 0.1 last1yrs 0.05 last3 yrs 0 last 5yrs JM midcap SBI magnum UTImidcap Kotak Sundaram mid cap midcap select mid cap SchemesINTERPRETATIONS:a) In last 1 yr, Standard Deviation of SBI midcap has very high about 0.15whichshows high volatility. Followed by Sundaram about 0.11.b) In last 3& 5yrs, alsoSBI shows high Standard Deviation about 0.14 & 0.22.
58. 583) BetaYrs/Schemes JM midcap SBI magnum UTI Kotak Sundaram mid cap midcap midcap select mid capLast1yrs 1.143846 1.512159602 0.998759 0.9419961 1.428028244Last3 yrs 0.154830 0.187077319 0.157491 0.1782199 0.184278143Last 5yrs 0.192531 0.229935443 0.207778 0.21723842 0.21284543 BETA 1.6 1.4 1.2 1 (in Rs) 0.8 0.6 last1yrs 0.4 0.2 last3 yrs 0 last 5yrs JM midcap SBI magnum UTImidcap Kotak midcap Sundaram mid cap select mid cap SchemesINTERPRETATIONS:a) In last 1 yr, Beta of SBI and Sundaram has high about 1.5 &1.4 respectively, ascompare to its competitors .UTI and Kotak shows low Beta about0.99 &0.94respectively.b) In last 3 & 5 years. All the Funds showed almost equal Beta.
59. 59 4) Sharpe RatioYrs/Schemes JM SBI magnum UTI midcap Kotak Sundaram select midcap mid cap midcap mid caplast1yrs 1.883957 1.590404948 2.3660246 2.1446380 1.81157006last3 yrs 0.230390 0.143719771 0.3559378 0.1710649 0.115906618last 5yrs 0.388877 0.435169362 0.437773 0.48133648 0.682191305 SHARPE RATIO 2.5 2 1.5 (in Rs) 1 last1yrs 0.5 last3 yrs 0 last 5yrs JM midcap SBI magnum UTImidcap Kotak midcap Sundaram mid cap select mid cap Schemes INTERPRETATIONS: a) In last 1year Sharpe Ratio of UTI is highest about 2.3 followed by Kotak(2.1),JM(1.88),Sundaram(1.81) and SBI(1.5). b) In last 3 years, UTI & JM shows highest Sharpe ratio about 0.35 & 0.23 respectively. SBI showed lowest about 0.14. c) In last 5 years, Sundaram (0.68) shows highest Sharpe ratio and JM (0.38) shows lowest.
60. 605.5 Small cap Fund1) CAGRYrs/Schemes Sundaram JM small Birlasunlife L&T small Religare small cap & mid cap small&mid cap cap small&mid capLast 1yr 9.4 113.48 140.75 119.77 133.77Last 3 yrs 6.51 -17.27 4.26 -14.99 7.36Last 5 yrs CAGR 160 140 120 100 80 in(Rs) 60 last 1yr 40 last 3 yrs 20 0 last 5 yrs -20 Sundaram JM small & Birlasunlife L&T small Religare -40 smallcap mid cap small&mid cap small&mid cap cap SchemesINTERPRETATIONS:a) In last 1 yr, Birlasunlife small midcap gave highest return about140.7% followedby Religare small& midcap, L&T & JM about 133.7, 119.7%, and 113.4%respectively.b) In last 3 yr, Religare small cap give highest return about 7.3% against itscompetitors.JM small cap gave -17%.
61. 612) Standard DeviationYrs/Schemes Sundaram JM small & Birlasunlife L&T Religare small cap mid cap small&mid small small&mid cap cap capLast1yr 0.052904985 0.14490943 0.119329293 0.102897 0.084923964Last3 yrs 0.098308914 0.160988697 0.122212359 0.138513 0.11489531Last5 yrs - - - - - STANDARD DEVIATION 0.18 0.16 0.14 0.12 (in Rs) 0.1 0.08 0.06 last 1yr 0.04 0.02 last 3 yrs 0 last 5 yrs Sundaram JM small & Birlasunlife L&T small Religare smallcap mid cap small&mid cap small&mid cap cap SchemesINTERPRETATIONS:a) JM small cap Funds have high Standard deviation, which shows high volatility ascompare to its competitors.b) Sundaram small cap shows least standard deviation, which shows its strength.
62. 623) BetaYrs/Schemes Sundaram JM small & Birlasunlife L&T Religare small cap mid cap small&mid small small&mid cap cap capLast 1yr 0.757755664 1.277975835 1.132571413 0.923006 0.791631306Last3 yrs 0.156519161 0.233322213 0.179818858 0.491886 0.442382937Last5 yrs - - - - - BETA 1.4 1.2 1 in(Rs) 0.8 0.6 last 1yr 0.4 0.2 last 3 yrs 0 last 5 yrs Sundaram JM small & Birlasunlife L&T small Religare smallcap mid cap small&mid cap small&mid cap cap SchemesINTERPRETATIONS:a) In last 1 yr, there is high Beta in JM small&mid cap (1.2) and low in Sundaramsmall cap(0.7)b) In last 3 yrs,L&T and Religare shown high Beta about 0.49&0.44. Sundaram haslow Beta about 0.15.
63. 634) Sharpe RatioYrs/Schemes Sundaram JM small & Birlasunlife L&Tsmall Religare small cap mid cap small&mid cap small&mid cap capLast 1yr 0.740297547 1.624960177 2.216180638 2.258105041 2.902924217Last 3 yrs -0.52788846 -0.16756146 0.165643299 -0.32554 0.323392115Last 5 yrs - - - - - SHARPE RATIO 3.5 3 2.5 2 (in Rs) 1.5 last 1yr 1 last 3 yrs 0.5 0 last 5 yrs -0.5 Sundaram JM small & Birlasunlife L&T small Religare -1 smallcap mid cap small&mid cap small&mid cap cap SchemesINTERPRETATIONS:a) In last 1 yr, Religare small& midcap shows highest Sharpe ratio of 2.9 against itscompetitors, whereas Sundaram shows lowest, which is0.74.b) In last 3 yrs,again Religare shows high Sharpe ratio of 0.32 and low in Sundaramabout -.052.
67. 67 6.1.5Performance Sheet (Small cap Fund) Fig (in %)Schemes CAGR( CAGR CAGR Rank1 yr Rank 2yrs Rank 3yrs 1yrs) (3yrs) (5yrs)1.Sundaram small 9.4 6.51 5 2 -cap2.JM small&mid cap 113.48 -17.27 4 5 -3.Birlasunlife small 140.75 4.26 1 3 -midcap4.L&T smallcap 119.75 -14.99 3 4 -5.Religare small 133.77 7.36 2 1 -midcap
68. 686.2Finding &suggestions6.2.1Diversified Fundsa) The Performance of Tata Dividend & HDFC top200 are better than their competitors because there Sharpe ratio & CAGR are relatively high against their competitors, there Beta & Standard Deviation both are low.b) The Performance of Reliance Diversified & Sundaram are poor because of therelow Sharpe ratio & CAGR. Also they are more risky as compare to there competitorsbecause of there high Beta.c) I would suggest giving first priority to HDFC TOP200 and second to Tata Dividend.6.2.2 Sector Fundsa) The Performance of Reliance Banking on the Basis of CAGR is outperforming ascompare to its competitors. Its Sharpe ratio is also good after Franklin FMCG.b) Those who want to take high return as well as risk Reliance Banking is good forthem because its Beta is also high among its competitors.c) Those who want to keep them safe and able to take less risk, for them Franklin isbetter option.6.2.3 Large cap Fundsa) SBI & Reliance vision both have good CAGR and Sharpe ratio, But Reliance havevery less Beta as compare to SBI, so Reliance should be the priority for investment.
69. 69b) JM large cap & Birlasunlife adv both is poor performer as far as CAGR andSharpe ratio is concern, so try to avoid them.6.3.4 Mid cap Fundsa) Sundaram select mid cap is the top performer in term of CAGR and Sharpe ratio,but have relatively high Beta, It is good for Risk taking investors.b) UTI is second best performer, also have low Beta as compare to Sundaram selectmid cap, so it is good for safe investment.c) CAGR & Sharpe ratio of SBI is relatively low and its Beta and Standard Deviationare very high as compare to its competitors, so try to avoid it.6.3.5 Small cap Fundsa) Sharpe ratio and CAGR of Religare are relatively high, also its Beta is low, and soit is good to invest in this fund.b) Sundaram small cap has very low CAGR & Sharpe ratio.
70. 70 CHAPTER 6 REFRENCES
71. 716.1 Books:
1) Donald E Fischer ,Security Analysis & Portfolio Management
The author of this blog is Manish Patidar, he is an MBA in Marketing. By profession he is a professor, teaching MBA students in India. You can contact Manish Patidar at firstname.lastname@example.org or email@example.com