Mutual Funds - Group 4

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MUTUAL FUNDS

SUBJECT

PORTFOLIO MANAGEMENT

PRESENTED TO

PROF.GIRISH HISARIA


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BHAVIN MODI - 10

MITESH TALIM - 32

MONALI MOHANTY - 35 NIDHI GUPTA - 38

SACHIN NAIR 47

SUMAN KALA- 59

TONY CHACKO VARGHESE - 63


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A mutual fund is nothing more than a collection of

stocks and/or bonds.

A mutual fund as a company that brings together a

group of people and invests their money in stocks,

bonds, and other securities.

The income earned is shared by its unit holders in

proportion to the number of units owned by them.


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Suitable investment for the common man - an

opportunity to invest in a diversified, professionally

managed basket of securities at a relatively low cost.

WAYSTO MAKE MONEY FROM MF

a. Dividends on stocks and interest on bonds

b. Securities that have increased in price - capitalgain. Most funds also pass on these gains toinvestors in a distribution.


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- In 1963, finance ministerShri T Krishnaswami gavethe idea of mutual funds

- The origin of mutual fund industry in India is with

the introduction of the concept of mutual fund byUTI in the year 1963.

- Though the growth was slow, but it accelerated fromthe year 1987 when non-UTI players entered theindustry.

- In the past decade, Indian mutual fund industry hadseen a dramatic improvements, both quality-wise aswell as quantity-wise.


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THE FUND SPONSOR

Person or corporate body that establishes the Fund

and registers it with SEBI.

Form a Trust and appoint a Board ofTrustees.

Appoints Custodian and Asset Management.

TRUSTEE

Protector of unit holders interests. 2/3 of the trustees shall be independent persons and

shall not be associated with the sponsors.


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AMC

Will float and manage the different investment schemes in thename of Trust and in accordance with SEBI regulations

CUSTODIAN Has the responsibility of physical handling and safe

keeping of the securities.

. DEPOSITORIES

Indian capital markets are moving away from physicalcertificates for securities to dematerialized form with aDepository.

Will hold the dematerialized security holdings of theMutual Fund.


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ABNAMRO Mutual Fund Birla Sun Life Mutual Fund

HDFC Mutual Fund HSBC Mutual Fund

ING Vysya Mutual Fund Prudential ICICI Mutual Fund

Sahara Mutual Fund State Bank of India Mutual Fund

Tata Mutual Fund Kotak Mahindra Mutual Fund

Unit Trust of India Mutual Fund Reliance Mutual Fund

Standard Chartered Mutual Fund Franklin Templeton India MF

Morgan Stanley Mutual Fund India Escorts Mutual Fund

Alliance Capital Mutual Fund Benchmark Mutual Fund

Canbank Mutual Fund Chola Mutual Fund

LIC Mutual Fund GIC Mutual Fund


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BY STRUCTURE

o Open ended schemes- is one that is available forsubscription all through the year. These do not have

a fixed maturity.o Fund manager issues new shares to investors and

buys back shares from investors wishing to leavethe fund

o Close ended schemes - has a stipulated maturityperiod which generally ranges from 3 to 15 years.The fund is open for subscription only during aspecified period.


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BY INVESTMENT OBJECTIVES

Equity funds - Such schemes normally invest amajority of their corpus in equities. Ideal for long

term investment . Risk factor is more.

Income fund provides regular and steady income

to investors. Invest in fixed income securities such

as bonds, corporate debentures andG

overnmentsecurities . Ideal for capital stability and regular

income.


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Balanced fund - The aim of balanced funds is toprovide both growth and regular income

Money Market FundsEasy liquidity, preservation

of capital and moderate income. Invests in safer

short-term instruments - treasury bills, certificates of

deposit, commercial paper and inter-bank callmoney. Ideal for Corporate and individuals to park

money for short period.


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SPECIAL SCHEMES Industry Specific Schemes -invest only in the industriesspecified. The investment of these funds is limited tospecific industries like Infotech , FMCG, Pharmaceuticalsetc.Index Funds - attempt to replicate the performance of a

particular index such as the BSE Sensex or the NSE 50

Sectoral Funds - are those which invest exclusively in aspecified sector. This could be an industry or a group ofindustries or various segments such as 'A' Group shares orinitial public offerings.


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Fund of Funds (FOFs) -The amount collected from

issue of this type of units is invested in other mutual

fund companies units. It enables double diversification.

Real Estate Funds - The investment is made in real

estate business and it is in closed end form


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Income Funds

Equity Funds

Balanced Funds

Money Market Fund


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- Minimization of risk (Diversification of portfolio)

- Expert and professional management

- Low brokerage and transaction costs

- Liquidity

- Flexibility

- Wide choice of schemes


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Professional Management

Dilution

Taxes

No tailor made portfolios


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PRODUCT RETURNS SAFETY LIQUIDITY TAXBENEFITS

BANKDEPOSISTS

Low High High No

EQUITYINSTRUMENTS

High Low High or Low No

FD OFCOMPANAIES

Moderate Low Low No

BONDS Moderate Moderate Moderate Yes

LIFEINSURANCES

Moderate High Low Yes

MF (OPENENDED)

Moderate Moderate High No

MF ( CLOSEDENDED) Moderate Moderate High Yes


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Equity funds

Balanced funds

Debt funds


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Rank 1: Very Good performance in thecategory.

Rank 2: Good performance in the category

Rank 3 : Average performance in the category

Rank 4 : Below average performance in thecategory

Rank 5 : Relatively weak performance in thecategory


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ICICI Prudential Focused Bluechip Equity Fund.

UTI Equity fund.

Advantages

Higher Liquidity due to broader investorparticipation.

Relatively lower volatility compared to mid andsmall cap stocks.


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Higher return.

Rank 1 is being given for the portfolio.


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Investments of ICICI Bank, L&T and someother bluechip investments stocks of

companys like Bajaj Auto ,Axis Bank, PNB.

Currently ITC is the top holding with 7.36%followed by ONGC and PNB with 6.97% and

6.17% respectively.

Asset size is more than Rs 1000 crore.


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It is a good Mutual fund to invest in as itsmajor holdings are in the Banking Sector andthe Oil and Gas sector

Both the above sectors are doing very well andare the sectors which are majorly invested in.

Therefore the risk to lose money is less as thesesectors are showing continuous growth.


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The UTI Equity Fund has also greaterallocation of shares in Financial Sector 21%,Energy-16%, IT- 14.4%.

These sectors are growing steadily over theyears thus investment in these sectors is good.

Its has 9% in Automobile industry , but thissector is recently during going less growth due

to increase in fuel prices, so there mightb

e riskinvolved here

But all other sectors are showing positivegrowth.


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HDFC Prudent Fund.

HDFC Monthly Income Plan LTP.

Advantages

NAV for HDFC Prudent IS 221.48 while forHDFC Monthly Income is 23.21.

1 year return are 3.2% and 5.7%. 5 year return are 18.3% and 11.4%.

Ranks are 2 and 1 for portfolio.


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stock sector P/E %assets qty

cash Current assets na 4.16 Na

er financec r . lt

I . . 4

Tata S ns inance na 5. 5 550

NABARD I na .11 54450

RuralElectrificati nC r

I 14.15 . 050

H usingDevl .

inance C r

H C .4 .4 0

Tata Steel lt Steel 10. 4. 1 400


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Top 5 Holdings Infosys Technologies Ltd (Software) 4.29 State Bank of India (Financial Services) 4.22

State Bank of India (Financial Services) 4.15 ICICI Bank Ltd. (Financial Services) 3.87 ICICI Bank Ltd. (Financial Services) 3.77

Risk is less as investment is majorly in finance and IT

sector


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Top 5 Sectors (%)-

Consumer Goods 20.19

Financial Service 19.61

Industrial Materials 13.43

Energy 12.32

Software 9.70


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HSBC FLEXI DEBT BOND.

JP MORGAN INDIA SHORT TERM INCOMEFUND.


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Top HoldingsHOLDINGS RATINGS ASSET%

Oriental Bank OfCommerce

P1+ 9.09

Indian Overseas Bank A1+ 8.71

Corporation Bank A1+ 8.71

Andhra Bank PR1+ 8.67

State Bank of Patiala A1+ 5.45

Vijaya Bank PR1+ 5.37

IDBI Bank PR1+ 5.07


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Advantages

Return is good and ranked 1st for investment.

Risk is less as compared to equity and balancedfunds.

Investment in high growth sectors.


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SECTOR ALLOCATION (%)

Sector Funds Banks 56.96

Current Assets 2.32

Miscellaneous -0.14

NBFC 29.75

Sugar 11.11


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STOCK SECTOR P/E %ASSETS

Electr steelsti t

teel err set l

. .

Re i t I i ftw re 32.l2 .1

Edelweiss pit l NB 43.3 10.2

D M hrir he ic ls .44 .3

eder l B k B ks 13.4 .0

Axis B k B ks 15.3 .24

Ecl i ce NB NA 5.


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Modified duration/average maturity for JPMorgan is very low which shows good forinvestment, rank is 1.

Return is good and ranked 1st for investment.

Major investment in Financial Sector .


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Mutual Funds - Group 4

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