Introduction to Mutual Funds & UTI investment plans

NAME ROLL.NO

1 PARIKSHIT MORE 07

2 PRAJAKTA WADEKAR 31

3 SAUMIT PATKI 02

4 POONAM HAZARE 14

5 PRIYANKA SANGLE 23

PREFACE

N.G.BEDEKAR COLLEGE OF COMMERCE

MUTUAL FUND INVESTMENT STRATEGIES

GROUP MEMBERS

Investment as a whole is a vast subject. It deals with many financial aspects; it provides knowledge about various investing strategies. There are various types of investment those are mutual funds, share market, banking, venture capital etc. Investment is, perhaps, one of the most practical-oriented subjects in commerce curriculum. This subject aims to provide knowledge about investment strategies, various types of investment & risks related to investment. Mutual funds are developing a very important role in investment field. Mutual funds provide good returns as well as they are more prone to risk. Though they are risky type of investment they provide overwhelming returns.

ACKNOWLEDGEMENT

This project is the result of combined group efforts & deliberation & discussion with the people related to the very field of auditing. WE wish to sincerely thank & acknowledge the efforts of the following in helping to shape it into its present form.First we want to thank Prof. Sindhu Pramod Madam for encouraging us at every stage of this project.Secondly we would extend our vote of thanks to UNIT TRUST OF INDIA for helping us in providing information about their mutual fund.Last but not the least we are thankful to all those who helped us & whose critical & Important opinion improved our project.

INDEX:SR NO.

PARTICULARS PAGE NO.

1 INTRODUCTION 1

2 IMPORTANT CHARACTERISTICS 3

3 OBJECTIVES 3

4 MUTUAL FUND STRUCTURE 4

5 MUTUAL FUND OPERATION 7

6 SEBI GUIDELINES 8

7 MUTUAL FUND TYPES 10

8 SCHEME TYPES 11

9 DIFFERENT MODES OF INCOME FROM

MUTUAL FUNDS

14

10 MUTUAL FUND STRATEGIES 15

11 VISIT TO UTI: OVERVIEW OF THEIR INVESTMENT PLANS 18

12 ANALYSIS 36

13 CONCLUSION 36

14 BIBILIOGRAPHY 38

INTRODUCTION TO MUTUAL FUNDS

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 appreciations realized 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.

A Mutual Fund is a body corporate registered with the Securities and Exchange Board of

India (SEBI) that pools up the money from individual/corporate investors and invests the

same on behalf of the investors/unit holders, in Equity shares, Government securities,

Bonds, Call Money Markets etc, and distributes the profits. In the other words, a Mutual

Fund allows investors to indirectly take a position in a basket of assets.

Mutual Fund is a mechanism for pooling the resources by issuing units to the investors

and investing funds in securities in accordance with objectives as disclosed in offer

document. Investments in securities are spread among a wide cross-section of industries

and sectors thus the risk is reduced. Diversification reduces the risk because all stocks

may not move in the same direction in the same proportion at same time. Investors of

mutual funds are known as unit holders.

Mutual Funds are essentially investment vehicles where people with similar

investment objective come together to pool their money and then invest accordingly. Each

unit of any scheme represents the proportion of pool owned by the unit holder (investor).

Appreciation or reduction in value of investments is reflected in net asset value (NAV) of

the concerned scheme, which is declared by the fund from time to time. Mutual fund

schemes are managed by respective Asset Management Companies (AMC). Every AMC

assigns a fund manager the duties and responsibilities with regard to the schemes.

As we all know that mutual funds are pools of savings of investors, these investors

in proportion to their investments share the profits or losses. Buying a mutual fund is like

buying a small slice of a big pizza. The owner of a mutual fund unit gets a proportional

share of the fund’s gains, losses, income and expenses. The mutual funds normally come

out with a number of schemes with different investment objectives which are launched

from time to time. A Mutual Fund is required to be registered with Securities Exchange

Board of India (SEBI) which regulates securities markets before it can collect funds from

the public.

IMPORTANT CHARACTERISTICS OF A MUTUAL FUND

A Mutual Fund actually belongs to the investors who have pooled their Funds. The ownership of the mutual fund is in the hands of the Investors.

A Mutual Fund is managed by investment professional and other Service providers, who earns a fee for their services, from the funds.

The pool of Funds is invested in a portfolio of marketable investments.

The value of the portfolio is updated every day.

The investor’s share in the fund is denominated by “units”. The value of the units changes with change in the portfolio value, every day. The value of one unit of investment is called net asset value (NAV).

The investment portfolio of the mutual fund is created according to The stated Investment objectives of the Fund.

OBJECTIVES OF A MUTUAL FUND

To Provide an opportunity for lower income groups to acquire without much difficulty, property in the form of shares.

To cater mainly of the need of individual investors who have limited means.

To Manage investors portfolio that provides regular income, growth, safety, liquidity, tax advantage, professional management and diversification.

MUTUAL FUND STRUCTURE

The Structure Consists:

The structure of mutual funds in India is governed by the SEBI Regulations, 1996.

These regulations make it mandatory for mutual funds to have a 3-tier structure of

Sponsors-Trustee-AMC (Asset Management Company). The Sponsor is the

promoter of mutual fund, and appoints the Trustee. The Trustees are responsible to

the investors in the mutual funds, and appoint the AMC for managing the

investment portfolio. The AMC is the business face of the mutual funds, as it

manages all the affairs of mutual funds. The mutual funds and AMC have to be

registered by the SEBI.

Sponsor

Sponsor is the person who acting alone or in combination with another body

corporate establishes a mutual fund. Sponsor must contribute at least 40% of the

net worth of the Investment Managed and meet the eligibility criteria prescribed

under the Securities and Exchange Board of India (Mutual Funds) Regulations,

1996.The Sponsor is not responsible or liable for any loss or shortfall resulting

from the operation of the Schemes beyond the initial contribution made by it

towards setting up of the Mutual Fund

Trust

The Mutual Fund is constituted as a trust in accordance with the provisions of the

Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered under the

Indian Registration Act, 1908.

Trustee

Trustee is usually a company (corporate body) or a Board of Trustees (body of

individuals). The main responsibility of the Trustee is to safeguard the interest of

the unit holders and inter-alia ensure that the AMC functions in the interest of

investors and in accordance with the Securities and Exchange Board of India

(Mutual Funds) Regulations, 1996, the provisions of the Trust Deed and the Offer

Documents of the respective Schemes. At least 2/3rd directors of the Trustee are

independent directors who are not associated with the Sponsor in any manner.

Asset Management Company (AMC)

The AMC is appointed by the Trustee as the Investment Manager of the Mutual

Fund. The AMC is required to be approved by the Securities and Exchange Board

of India (SEBI) to act as an asset management company of the Mutual Fund. At

least 50% of the directors of the AMC are independent directors who are not

associated with the Sponsor in any manner. The AMC must have a net worth of at

least 10 crores at all times.

Registrar and Transfer Agent

The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer

Agent to the Mutual Fund. The Registrar processes the application form,

redemption requests and dispatches account statements to the unit holders.

Custodian

A custodian handles the investment back office of a mutual fund. Its

responsibilities include receipt and delivery of securities, collection of income,

distribution of dividends, and segregation of assets between schemes. The sponsor

of a mutual fund cannot act as a custodian to the fund. For example, Deutsche

Bank is a custodian, but it cannot service Deutsche Mutual Fund, its mutual fund

arm.

Depository

Indian capital markets are moving away from having physical certificates for securities, to ownership of these securities in ‘dematerialized’ form with a Depository.

MUTUAL FUND OPERATION

(Mutual Fund Operation Flow Chart)

INVESTOR

STOCKS AND SECURITY

FUND MANAGER

GENERATE RETURN

INVEST IN

MANAGER

PASS TO INVESTORS

MUTUAL FUND OPERATION

GUIDELINES FOR MUTUAL FUNDS

Mutual funds cannot invest more than 10 per cent of the total net assets of a scheme in the short-term deposits of a single bank, the Securities and Exchange Board of India said on Monday.Announcing guidelines for parking of funds in short-term deposits of scheduled commercial banks (SCBs) by mutual funds, the regulator said that investment cap would also take into account the deposit schemes of the bank's subsidiaries.The SEBI has also defined 'short term' for funds' investment purposes as a period not exceeding 91 days.Besides, the parking of funds in short-term deposits of all SCBs has been capped at 15 per cent of the net asset value (NAV) of a scheme, which can be raised to 20 per cent with prior approval of the trustees.The parking of funds in short-term deposits of associate and sponsor SCBs together should not exceed 20 per cent of total deployment by the MF in short-term deposits, it added.The SEBI said that these guidelines are aimed at ensuring that funds collected in a scheme are invested as per the investment objective stated in the offer document of an MF scheme.The new guidelines would be applicable to all fresh investments whether in a new scheme or an existing one. In cases of an existing scheme, where the scheme has already parked funds in short-term deposits, the asset management company have been given three-months time to conform with the new guidelines.The SEBI has also asked the trustees of a fund to ensure that no funds are parked by a scheme in short term deposit of a bank, which has invested in that particular scheme.The SEBI guidelines say that asset management companies (AMCs) shall not be permitted to charge any investment and advisory fees for parking of funds in short-term deposits of banks in case of liquid and debt-oriented schemes.

What are the new SEBI guidelines all about?

Relevant extract of the SEBI circular released on June 30, 2009 (SEBI/IMD/CIR No. 4/168230/09) is as follows:'In order to empower the investors in deciding the commission paid to distributors in accordance with the level of service received, to bring about more transparency in payment of commissions and to incentivize long term investment, it has been decided that:

There shall be no entry load for all mutual fund schemes

The scheme application forms shall carry a suitable disclosure to the effect that

the upfront commission to distributors will be paid by the investor directly to the distributor, based on his assessment of various factors including the service rendered by the distributorOf the exit load or CDSC charged to the investor, a maximum of 1% of the

Redemption proceeds shall be maintained in a separate account which can be used by the AMC to pay commissions to the distributor and to take care of other marketing and selling expenses. Any balance shall be credited to the scheme immediatelyThe distributors should disclose all the commissions (in the form of trail

commission or any other mode) payable to them for the different competing schemes of various mutual funds from amongst which the scheme is being recommended to the investor.

This circular shall be applicable for :Investments in mutual fund schemes (including additional purchases and

switch-in to a scheme from other schemes) with effect from August 1, 2009

Redemptions from mutual fund schemes (including switch-out from other schemes) with effect from August 1, 2009

New mutual fund schemes launched on and after August 1, 2009; and

Systematic Investment Plans (SIPs) registered on or after August 1, 2009'

MUTUAL FUND—TYPES

1. OPEN-ENDED MUTUAL FUNDS:-

The holders of the shares in the Fund can resell them to the issuing Mutual Fund

company at the time. They receive in turn the net assets value (NAV) of the shares at the

time of re-sale. Such Mutual Fund Companies place their funds in the secondary

securities market. They do not participate in new issue market as do pension funds or life

insurance companies. Thus they influence market price of corporate securities. Open-end

investment companies can sell an unlimited number of Shares and thus keep going larger.

The open-end Mutual Fund Company Buys or sells their shares. These companies sell

new shares NAV plus a Loading or management fees and redeem shares at NAV. In other

words, the target amount and the period both are indefinite in such funds.

2. CLOSED-ENDED MUTUAL FUNDS:-

A closed–end Fund is open for sale to investors for a specific period, after which further

sales are closed. Any further transaction for buying the units or repurchasing them,

Happen in the secondary markets, where closed end Funds are listed. Therefore new

investors buy from the existing investors, and existing investors can liquidate their units

by selling them to other willing buyers. In a closed end Funds, thus the pool of Funds can

technically be kept constant. The asset management company (AMC) however, can buy

out the units from the investors, in the secondary markets, thus reducing the amount of

funds held by outside investors. The price at which units can be sold or redeemed

Depends on the market prices, which are fundamentally linked to the NAV. Investors in

closed end Funds receive either certificates or Depository receipts, for their holdings in a

closed end mutual Fund

MUTUAL FUND SCHEME TYPES:

Equity Diversified Schemes:-

These schemes mainly invest in equity. They seek to achieve long-term capital

appreciation by responding to the dynamically changing Indian economy by moving

across sectors such as Lifestyle, Pharma, Cyclical, Technology, etc.

Sector Schemes:-

These schemes focus on particular sector as IT, Banking, etc. They seek to generate long-

term capital appreciation by investing in equity and related securities of companies in that

particular sector.

Index Schemes:-

These schemes aim to provide returns that closely correspond to the return of a particular

stock market index such as BSE Sensex, NSE Nifty, etc. Such schemes invest in all the

stocks comprising the index in approximately the same weightage as they are given in

that index.

Exchange Traded Funds (ETFs):-

ETFs invest in stocks underlying a particular stock index like NSE Nifty or BSE Sensex.

They are similar to an index fund with one crucial difference. ETFs are listed and traded

on a stock exchange. In contrast, an index fund is bought and sold by the fund and its

distributors.

Equity Tax Saving Schemes:-

These work on similar lines as diversified equity funds and seek to achieve long-term

capital appreciation by investing in the entire universe of stocks. The only difference

between these funds and equity-diversified funds is that they demand a lock-in of 3 years

to gain tax benefits.

Dynamic Funds:-

These schemes alter their exposure to different asset classes based on the market

scenario. Such funds typically try to book profits when the markets are overvalued and

remain fully invested in equities when the markets are undervalued. This is suitable for

investors who find it difficult to decide when to quit from equity.

Balanced Schemes:-

These schemes seek to achieve long-term capital appreciation with stability of investment

and current income from a balanced portfolio of high quality equity and fixed-income

securities.

Debt Schemes:-

These schemes basically invest in debt.

Medium-Term Debt Schemes

These schemes have a portfolio of debt and money market instruments where the average

maturity of the underlying portfolio is in the range of five to seven years.

Short-Term Debt Schemes

These schemes have a portfolio of debt and money market instruments where the average

maturity of the underlying portfolio is in the range of one to two years.

Money Market Debt Schemes:-

These schemes invest in debt securities of a short-term nature, which generally means

securities of less than one-year maturity. The typical short-term interest-bearing

instruments these funds invest in Treasury Bills, Certificates of Deposit, Commercial Paper

and Inter-Bank Call Money Market.

Medium-Term Gilt Schemes:-

These schemes invest in government securities. The average maturity of the securities in

the scheme is over three years.

Short-Term Gilt Schemes:-

These schemes invest in government securities. The securities invested in are of short to

medium term maturities.

Floating Rate Funds:-

They invest in debt securities with floating interest rates, which are generally linked to

some benchmark rate like MIBOR. Floating rate funds have a high relevance when interest

rates are on the rise helping investors to ride the interest rate rise.

Monthly Income Plans (MIPS):-

These are basically debt schemes, which make marginal investments in the range of 10-

25% in equity to boost the scheme’s returns. MIP schemes are ideal for investors who seek

slightly higher return that pure long-term debt schemes at marginally higher risk.

DIFFERENT MODES OF RECEIVING THE INCOME

EARNED FROM MUTUAL FUND INVESTMENTS

Mutual Funds offer three methods of receiving income:

Growth Plan:-

In this plan, dividend is neither declared nor paid out to the investor but is built into the

value of the NAV. In other words, the NAV increases over time due to such incomes and

the investor realizes only the capital appreciation on redemption of his investment.

Income Plan:-

In this plan, dividends are paid-out to the investor. In other words, the NAV only reflects

the capital appreciation or depreciation in market price of the underlying portfolio.

Dividend Re-investment Plan:-

In this case, dividend is declared but not paid out to the investor, instead, it is reinvested

back into the scheme at the then prevailing NAV. In other words, the investor is given

additional units and not cash as dividend.

MUTUAL FUND INVESTING STRATEGIES:

1. Systematic Investment Plans (SIPs)

These are best suited for young people who have started their careers and need to build

their wealth. SIPs entail an investor to invest a fixed sum of money at regular intervals in

the Mutual fund scheme the investor has chosen, an investor opting for SIP in xyz Mutual

Fund scheme will need to invest a certain sum on money every month/quarter/half-year in

the scheme.

EXAMPLE:

MONTH AMOUNT INVESTED

NAV UNITS

JAN 1000 RS.10 100

FEB 1000 RS.8 125

MAR 1000 RS.12.5 80

AVERAGE COST PER UNIT UNDER THE PLAN = 3000/305 = RS. 9.84

AVERAGE NAV = (10 + 8 + 12.50)/3 = RS. 10.17

2. Systematic Withdrawal Plans (SWPs)

These plans are best suited for people nearing retirement. In these plans, an investor

invests in a mutual fund scheme and is allowed to withdraw a fixed sum of money at

regular intervals to take care of his expenses

3. Systematic Transfer Plans (STPs)

They allow the investor to transfer on a periodic basis a specified amount from one

scheme to another within the same fund family – meaning two schemes belonging to the

same mutual fund. A transfer will be treated as redemption of units from the scheme from

which the transfer is made. Such redemption or investment will be at the applicable

NAV. This service allows the investor to manage his investments actively to achieve his

objectives. Many funds do not even charge any transaction fees for his service – an added

advantage for the active investor.

NET ASSET VALUE

• The net asset value (NAV) is the market value of the fund's underlying securities. Calculated at the end of the trading day.

• Actual value of one unit of a given scheme on any given business date.• Reflects the liquidation value of the fund's investments on that

particular day after accounting for all expenses

MARKET VALUE OF ASSETS - LIABILITIES• NAV = --------------------------------------------------

(PER UNIT) UNITS OUTSTANDING

TYPES OF MUTUAL FUND

VISIT TO UNIT TRUST OF INDIA: THE SCHEMES

MUTUAL FUNDS

EQUITY SCHEMES

1)INDEX FUNDS2)DIVIDEND YIELD FUNDS

3)DIVERSIFIED4)THEMATIC

5)SECTOR FUND

BALANCED SCHEMES DEBT SCHEMES

1)INCOME FUND2)LIQUID FUND

EQUITY SCHEMES

1) INDEX FUND:A)UTI MASTER INDEX FUND:

Investment objectiveThe principle investment objective of the scheme is to invest in securities of companies comprising the SENSEX and endeavor to achieve return equivalent to SENSEX by passive investment. The scheme will be managed by replicating the index in the weight age of the SENSEX with the intention of minimizing the performance differences between the scheme and the SENSEX in capital terms, subject to market liquidity, cost of trading, management expenses and other factors which may cause tracking error.

MINIMUM INVESTMENT AMOUNT- 5000NAV PER UNIT AS ON MAY 31ST 2010- RS 52.20.

LOAD STRUCTUREEntry load Holding period Exit loadNil <15 days 1%Nil >=15 days nil

FUND PERFORMANCE AS ON MAY 31ST 2010Performance comparison with Benchmark Index

Compound Annualised returns

NAV (%) BSE Sensex (%)

1 Year3 Years5 YearsSince Inception

16.084.6320.1014.87

15.865.2220.3214.91

Past performance may or may not be sustained in the future

SIP RETURNS

1 YEAR (RS) 3 YEARS (RS) 5 YEARS (RS)Investment Amount

Investment Value

Yield (%)

12000

12462

7.26

36000

42394

10.93

60000

81310

12.12

Note: systematic investment plan (SIP) returns are worked out assuming investment of rs 1000 every month at NAV per unit of the scheme as on the first working day for the respective time periods. The loads have not been taken into account.

B) UTI NIFTY INDEX FUNDS:

INVESTMENT OBJECTIVE:The principle investment objective of the scheme is to invest in stocks of companies comprising S & P CNX nifty index and Endeavour to achieve return equivalent to nifty by “passive” investments. The scheme will be managed by replicating the index in the same weight age as in the S & P CNX nifty index with the intention of minimizing the performance differences between the scheme and the S & P CNX nifty index in capital terms, subject to market liquidity, cost of trading, management expenses and other factors which may cause tracking errors. The scheme would alter the scripts or weights as and when the same are altered in the S & P CNX nifty index.MINIMUM INVESTMENT AMOUNT- 5000NAV PER UNIT AS ON MAY 31ST 2010GROWTH / INCOME: RS 31.65/ RS 16.12

LOAD STRUCTUREEntry load Holding period Exit loadNil <15 days 1%Nil >=15 days nil


Compound Annualized returns

NAV (%) BSE Sensex (%)


13.584.8119.2211.91

14.335.7919.4811.37

Past performance may or may not be sustained in the future.

SIP RETURNS1 YEAR (RS) 3 YEARS (RS) 5 YEARS (RS)

Investment Amount

Investment Value

Yield (%)

12000

12488

7.68

36000

42266

10.73

60000

81365

12.15

Note: systematic investment plan (SIP) returns are worked out assuming investment of RS 1000 every month at NAV per unit of the scheme as on the first working day for the respective time periods.

2) DIVIDEND YIELD FUND:

INVESTMENT OBJECTIVEThe investment objective of the scheme is to provide medium term to long term capital gains and or dividend distribution by investing predominantly in equity and equity related instruments, which offer high dividend yield. There can be no assurance that investment objective of the scheme will be realized.MINIMUM INVESTMENT AMOUNT: RS 5000NAV AS ON 31ST MAY 2010GROWTH/ INCOME: RS 28.61/ RS 14.18

FUND PERFORMANCE AS ON MAY 31ST 2010Performance comparison with Benchmark IndexCompound Annualized returns

NAV (%) BSE 100 (%)

1 Year3 YearsSince Inception

40.1117.6322.99

18.656.5721.62

Assuming that all payouts during the period have been re invested in the units of the scheme at the immediate ex-dividend nav. past performance may or may not be sustained in the future.


Investment Amount

Investment Value

Yield (%)

12000

13833

29.70

36000

51549

24.81

60000

103284

21.90

3) DIVERSIFED FUNDS:A) UTI MASTERSHARE:

INVESTMENT OBJECTIVE:This schemes aims at securing for the unit holders capital appreciation by investing the funds of the scheme in equity shares, equity related instruments and fully convertible bonds/ debentures of companies. Investment may also be made in iisues of partly convertible debentures/ bonds including those issued on rights basis subject to the condition that, as far as possible, the non-convertible portion of the debentures/bonds so acquired or subscribed shall be disinvested within a period of 12 months from the date of acquisition.MINIMUM INVESTMENT AMOUNT: RS 5000NAV AS ON 31ST MAY 2010GROWTH/ INCOME: RS 48.20/ RS 28.46.



NAV (%) BSE 100 (%)


24.648.9218.3816.49

18.656.5720.2015.22

Assuming that all payouts during the period have been re invested in the units of the scheme at the immediate ex-dividend nav. past performance may or may not be sustained in the future.


Investment Amount

Investment Value

Yield (%)

12000

12933

14.83

36000

44326

14.02

60000

85338

14.08


B) UTI MASTERPLUS: INVESTMENT OBJECTIVE:

Investment objective of the scheme is capital appreciation through investments in equity and equity related instruments.MINIMUM INVESTMENT AMOUNT: RS 5000NAV AS ON 31ST MAY 2010GROWTH/ INCOME: RS 73.88/ RS 53.26



NAV (%) BSE 100 (%)


14.851.9817.3913.70

15.865.2220.3212.58

Assuming that all payouts during the period have been re invested in the units of the scheme at the immediate ex-1dividend nav. past performance may or may not be sustained in the future


Investment Amount

Investment Value

Yield (%)

12000

12395

6.21

36000

40883

8.45

60000

76857

9.85


4) THEMATIC FUND:A) UTI MNC FUND

INVESTMENT OBJECTIVEThe funds collected under the scheme shall be invested predominantly in stock of multinational corporation other liquid stocks. The funds collected under the scheme shall be invested in the equities and equity related instruments. The risk profile of investment could be high.MINIMUM INVESTMENT AMOUNT: RS 5000NAV AS ON 31ST MAY 2010GROWTH/ INCOME: RS 50.60/ RS 34.08



NAV (%) BSE 100 (%)


45.4410.8617.3516.98

36.557.9719.2510.66


Investment Amount

Investment Value

Yield (%)

12000

13957

31.80

36000

50633

23.50

60000

90866

16.63

Note: systematic investment plan (SIP) returns are worked out assuming investment of rs 1000 every month at NAV per unit of the scheme as on the first working day for the respective time periods. The loads have not been taken into account

B) UTI MID CAP FUND INVESTMENT OBJECTIVE

Investment objective is “capital appreciation “by investing primarily in mid cap stocks.MINIMUM INVESTMENT AMOUNT: RS 5000NAV AS ON 31ST MAY 2010GROWTH/ INCOME: RS 29.33/ RS 21.82



NAV (%) BSE 100 (%)


53.089.6415.3620.92

44.8711.1720.4522.22



Investment Amount

Investment Value

Yield (%)

12000

14258

36.91

36000

51347

24.52

60000

87310

15.01


5) SECTOR FUND:A) UTI PHARMA & HEALTHCARE FUND :

INVESTMENT OBJECTIVEInvestment will be made in stock of companies engaged in manufacturing of pharmaceuticals bulk drugs, formulation & OTC drugs, medical equipment and accessories, personal healthcare products and also companies owing/managing hospitalsMINIMUM INVESTMENT AMOUNT: RS 5000NAV AS ON 31ST MAY 2010GROWTH/ INCOME: RS 35.44/ RS 28.84



NAV (%) BSE 100 (%)


67.9714.8216.3215.15

64.6913.7417.4415.97


Investment Amount

Investment Value

Yield (%)

12000

15719

62.51

36000

56076

31.07

60000

97796

19.65

B) UTI BANKING SECTOR FUND : INVESTMENT OBJECTIVE

Investment objective is “capital appreciation “through investment in the stock of the companies/institution engaged in the banking and financial services activities.

MINIMUM INVESTMENT AMOUNT: RS 5000NAV AS ON 31ST MAY 2010GROWTH/ INCOME: RS 36.20/ RS 22.00



NAV (%) BSE 100 (%)


35.4816.9523.4123.26

26.2613.9621.9621.03



Investment Amount

Investment Value

Yield (%)

12000

13885

30.57

36000

52898

26.71

60000

106161

23.04

Note: systematic investment plan (SIP) returns are worked out assuming investment of RS 1000 every month at NAV per unit of the scheme as on the first working day for the respective time periods. The loads have not been taken into account

C)UTI ENERGY FUND: INVESTMENT OBJECTIVE

Investment will be made in stock engaged in the following areas:-Petrol sector covering industries such as oil and gas drilling and exploration, refining of crude oil, distribution of oil, gas, petro products, pipelines and manufacturing of downstream oil products. All types of products power generation companies. Companies which are in to production of ethanol. Business related to storage of energy and companies involved in business of delivery energy in different forms. Industrial manufacturing companies which are into manufacturing of equipment related to energy development (like petro and power), and related areas, pipes /cables and laying them. It will also include manufacturing of bulbs and related system. Consultancy and finance: companies involved in consulting and financing this businesses.




NAV (%) BSE 100 (%)

1 YearSince Inception

19.26-8.97

10.08-6.69



Investment Amount

Investment Value

Yield (%)

12000

12723

11.43

36000

41497

9.47

60000

70149

6.19

Note: systematic investment plan (SIP) returns are worked out assuming investment of rs 1000 every month at NAV per unit of the scheme as on the first working day for the respective time periods. The loads have not been taken into account

4) BALANCED FUNDS:A) UTI BALANCED FUNDS:

INVESTMENT OBJECTIVE: The scheme aims to invest in a portfolio of equity / equity related securities and fixed income securities (debt and money market securities) with a view to generating regular income together with capital appreciation.MINIMUM INVESTMENT AMOUNT: Growth / Income: RS 1000 / 5000NAV AS ON 31ST MAY 2010:GROWTH/ INCOME: RS 75.76/ RS 22.29

LOAD STRUCTURE.

FUND PERFORMANCE AS ON MAY 31ST 2010Performance comparison with Benchmark IndexCompound Annualized returns

GROWTH OPTION (%)

CRISIL BALANCED FUND INDEX* (%)

1 Year3 Years

23.258.94

11.507.87

ENTRY LOAD HOLDING PERIOD

EXIT LOAD

NIL < 1 YEAR 1%

NIL >= 1 YEAR NIL

5 YearsSince Inception

15.1717.76

15.13N.A

*Benchmark- CRISIL Balance Fund Index has weight age of 60% to Nifty Index & 40% to Composite Bond IndexAssuming that all payouts during the period have been reinvested in the units of the scheme at the immediate ex-div NAV.

5) INCOME FUNDS:A)UTI BOND FUND:

INVESTMENT OBJECTIVE: The scheme will retain the flexibility to invest in the entire range of debt and money market instruments. The flexibility is being retained to adjust the portfolio in response to a change in the risk to return equation for asset classes under investment, with a view to maintain risks within manageable limits.MINIMUM INVESTMENT AMOUNT:Regular growth option: Rs 1000Fixed amount withdrawal: Rs 30000Variable withdrawal: Rs 30000Income option: Rs 20000

NAV AS ON 31ST MAY 2010:GROWTH/ INCOME: RS 27.07/ RS 11.44

LOAD STRUCTURE.

ENTRY LOAD EXIT LOAD

NIL NIL



GROWTH PLAN (%)

CRISIL COMP. BOND INDEX* (%)


5.867.426.598.59

4.747.065.71N.A

Past performance may or may not be sustained in the future.

B) UTI GUILT ADVANTAGE FUND: INVESTMENT OBJECTIVE: To generate credit risk-

free return through investment in sovereign securities issued by the Central government and / or State Government and / or any security unconditionally guaranteed by the Central Government and / or State Government for repayment of principal and interest. However there can be no assurance that the investment objective of the scheme will be achieved.


LOAD STRUCTURE.

ENTRY LOAD NIL

EXIT LOAD

DIVIDEND AND GROWTH PLANS – NIL.

PF PLAN (WITHIN 365 DAYS)– 1%



NAV GROWTH OPTION (%)

I-Sec LIBEX (%)


3.148.096.988.29

2.949.447.85N.A

Assuming that all payouts during the period have been reinvested in the units of the scheme at the immediate ex-div NAVPast performance may or may not be sustained in the future.

6) LIQUID FUNDS:A)UTI MONEY MARKET FUND:

INVESTMENT OBJECTIVE: To provide highest possible current income consistent with preservation of capital and providing liquidity from investing in a diversified portfolio of short term money market securities.MINIMUM INVESTMENT AMOUNT: RS 10000NAV AS ON 31ST MAY 2010GROWTH/ INCOME: RS 2589.46/ RS 2580.75

LOAD STRUCTURE.


NIL NIL

Compounded Annualized Returns

Growth* Regular (%)

CRISIL Liquid Fund Index (%)

7 days 3.93 3.79

1 month 4.10 3.45

3 months 4.13 3.92

1 year 4.19 3.13

3 years 6.61 6.16

5 years 6.66 6.19

Since inception 7.53 NA


Annualized returns Past performance may or may not be sustained in the future.

B) UTI LIQUID FUND CASH PLAN: INVESTMENT OBJECTIVE:

The investment objective of the scheme is to generate steady and reasonable income, with low risk and high level of liquidity from a portfolio of money market securities and high quality debt.MINIMUM INVESTMENT AMOUNT:

Retail: RS 10000 and Institutional: RS 10000000NAV AS ON 31ST MAY 2010GROWTH/ INCOME: RS 1500.42/ RS 1056.29

LOAD STRUCTURE.

FUND PERFORMANCE AS ON MAY 31ST 2010Compounded Annualized Returns

Growth* Regular (%)

CRISIL Liquid Fund Index (%)

7 days 4.68 3.79

1 month 4.58 3.45

3 months 4.41 3.92

1 year 4.37 3.13

3 years 6.76 6.16

5 years 6.78 6.19

Since inception 6.71 5.73

Performance comparison with Benchmark Index


NIL NIL

ANALYSIS & CONCLUSION

The schemes of UTI are very attractive. They offer very good opportunity to youngsters. Their schemes like dividend yield fund & wealth builder fund which are under specific investment plans offer a great opportunity to youngsters to invest in mutual fund. There are many types of schemes which are attractive. UTI’s other schemes which involve investment in sectors such as banking, energy, pharma & healthcare fund provides great opportunity for investors.

Though investment in these schemes provides good returns the returns are depended on the overall market scenario. If the investment of mutual funds is weak it will provide the investors with marginal returns. The value of the investors will not be maximized.

Mutual funds mobilize the savings of the investors & invest them in profitable investments. They provide investors with good NAV. But these mutual funds are not fully risk free investment. They most probably depend on the share market & other securities. If these yield better returns then the mutual funds. And if the returns to the MF are bad then there might be a chance of no declaration of interest/dividend. Though mutual funds provide a attractive earnings the risk factor should also be taken into consideration.THE FOLLOWING ARE THE % OF PEOPLE INVESTING IN MUTUAL FUNDS

60%

40%

INVESTORS

YESNO

WORK DONESR NO

NAME ROLL NO. WORK DONE

1 PARIKSHIT MORE 07 TYPING, EDITING

2 PRAJAKTA WADEKAR 31 TYPING, EDITING

3 SAUMIT PATKI 02 TYPING, EDITING

4 PRIYANKA SANGLE 23 TYPING

`5 POONAM HAZARE 14 TYPING

Bibliography1. UTI MUTUAL FUND – KEY INFORMATION MEMORANDUM FOR EQUITY &

BALANCED SCHEMES.2. INDIAN MUTUAL FUNDS – SHRI K P GHOSH3. UTI INVESTMENT BROUCHER

Introduction to Mutual Funds & UTI investment plans

Documents

Transcript of Introduction to Mutual Funds & UTI investment plans