Project Report on Different Schemes of Mutual Fund

8/11/2019 Project Report on Different Schemes of Mutual Fund

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Track Record of the Different Schemes of Mutual funds and their comparative

analysis

EXECUTIVE SUMM R!"

Primary investment objective of an individual or organization is to maximize the returnsand minimizing Market risk through effective diversification.

Mutual funds have become latest buzz word for the average person to invest theirmoney. It is said that the bank investment is the first priority of people to invest theirsavings and next and safer investment place is in mutual funds. A Mutual fund poolsresources from thousands of investors and then diversifies its investment into manydifferent holdings such as in stocks bonds!debt instruments "overnment securities etin order to provide more safer and relatively high returns as compared with #ixeddeposits etc. $he Project is basically %#I&A&'( P)*+('$, which tries to explain in layman-slanguage about the history growth and pros cons of investing in mutual funds.

In the second part of this project it will cover the detailed track record of the three

Mutual fund schemes such as / #ranklin 0lue chip #und I'I'I Prudential Power and 12#' capital builder fund.And also comparative analysis of these funds with their respective benchmark indices$he main reason for selecting these three schemes is / All three schemes incepted in theyear 3445 and since then they are in market it will give me an opportunity to take idepth 36 year track records with market performance and also to know how these fund performed during market crash!ups and downs of the market movement.

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Topic of the study"

&Track Record of the Different Schemes of Mutual funds and their comparative

analysis'

Main ($)ective of the *ro)ect"

&Understandin+ the Concept of Mutual funds, and comparative analysis of three

Mutual fund schemes'

Su$ ($)ectives"

3. 7tudy the Mutual fund industry in India8. Analyzing the performance of three funds since 3445.9. $o study the performance of schemes compared to their respective benchmark.5. $o study the risk involved in these 9 schemes compared to their 0enchmark.

Research Desi+n" 2escriptive research is study of existing facts to a conclusion. In this research I willmake an attempt to analyze the performance of the funds and also how much riskassociated with them.



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Methodolo+y"

*rimary data" 2iscussion with company "uide and with other officials

Secondary Data /

3. Materials Provided by *rganization like :3; )esearch reports :8; Monthly fact sheets

8. 0usiness Magazines like:3; Mutual funds insight:8; Money $oday etc.

9. Internet./ www.bseindia.com www.nseindia.com www.valueresearch.com etc.



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0enefits of the study/

3. $his study will help us to know the workings and concept of Mutual funds.8. this research helps to find how much return can earned by investing in Mutual

funds as compared with #29. It will also help to convince the others regarding how Mutual #unds re better risk

adjusted as compared with direct investment through shares.5. and finally it will give Picture about how these three funds :#ranklin

0luechip I'I'I Prudential power 12#' capital builder fund; performing over last 36 years.

-imitations / Main


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.I/DI/0S (. T1E *R(2ECT RE"

Among these three funds more popular among investors is #ranklin blue chipfund.

0oth #ranklin blue chip fund and I'I'I pru power fund faced problems during8=== and 8==3 main reasons are/

3.>etan Parek-s case and

8.7eptember 33th attack on ?7 @$*

12#' capital 0uilder fund faced crucial period during 8== main reason was its portfolio then mainly consisting of #M'" companies and in that year theydrastically came down.

Among these three funds highest 0eta is of #ranklin i.e =.4 lowest is of 12#'capital builder fund and sharp ratio high in case of #ranklin and low in case of 12#''0 fund .

I'I'I Pru Power-s performance is more or less is stable even if we see its0($A Alpha 7harp ratio and average returns also good i.e 8.B .

Average )eturn is high in case of 12#' '0 #und i.e 9.=5

#ranklin blueCchip fund once upon a time it was considered to be as star in mutua

funds but due to high market volatility in the year 8== and 8==D but now from8==B +anuary on words it could salvage some of its lost pride because ofcomparatively low volatility in 0lue chip stocks



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SU00ESTI(/3REC(MME/D T(/ T( I/VEST(RS"

0y the study and analysis of the mutual fund industry it will be better to suggest that eventhough mutual funds are subject to risk but they are better risk adjusted as compared withstocks from last five years it has become a buzz word for investment main reason it iuseful in case of getting tax reductions etc.

If a person wants to earn more as compared to 0ank #2 where possible returns are just3=C38E where as in mutual fund minimum is around 36C8=E mutual funds are goooption compared with stock market .

If person does not want to take much risk then he can invest in the funds like 12#''apital builder fund because as we have already seen in returns chart compared withother two fundsF#ranklin blueCchip and I'I'I powerG.that it has given constant returns inshorter period of time with less 0($A and arithmetic mean return is also high

If a person is more interested and ready to take risk then the #ranklin 0lueCchip fund wil

the good option. 0y looking at its 0($A and 72 )isk both are high but if person invest inthis fund for more than 5 years he will get returns around 96E.

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Mutual funds

The concept"

In earlier times HdirectH was the only investment vehicle available. If we wanted to bfixed deposit!bond we had to apply on our own. 7imilarly when we wanted to buyshares we had to call upstock brokers who would procure shares on our behalf andsame was the case with property. $he cost involved in HdirectH buying is least amongstinvestment vehicles. 1owever we need to have skills and time to use this form of investing.

Another investment vehicle is a mutual fund. Mutual fund works on the concept of pooling in money. Assume there are 6 to friends who want to invest money in a particular asset class say e uity. Also assume they do not have skills and time. 1oweverone of them knows an expert who regularly invests in stock markets. All these friends goto an expert and give him their investment amount. $he expert invests on their behalf. If

there is profit in investment they all benefit and if there is any loss they suffer. (xpertsget certain fee for investing on their behalf. $his is the concept of a mutual fund.Investing in mutual fund is slightly expensive than JdirectJ form of investing. 1oweverthe decisionCmaking and procedure of investing is transferred to the Mutual #und'ompany. Insurance as an investment vehicle works somewhat similar to mutual fundwhile traditional insurance plans invest only in debtCbased products and are not marklinked.

vehicle for investin+ in stocks and $onds

A mutual fund is not an alternative investment option to stocks and bonds rather it poothe money of several investors and invests this in stocks bonds money markinstruments and other types of securities.0uying a mutual fund is like buying a small

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slice of a big pizza. $he owner of a mutual fund unit gets a proportional share of thefund-s gains losses income and expenses.

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Each mutual fund has a specific stated o$)ective

$he fund-s objective is laid out in the fundHs prospectus which is the legal document thcontains information about the fund its history its officers and its performance

.und ($)ective 4hat the fund 5ill invest in( uity F"rowthG *nly in stocks2ebt FIncomeG *nly in fixedCincome securitiesMoney Market Fincluding"iltG

In shortCterm money market instruments Fincludinggovernment securitiesG

0alanced Partly in stocks and partly in fixedCincome securitiesin order to maintain a HbalanceH in returns and risk

Mana+ed $y an sset Mana+ement Company 6 MC7

$he company that puts together a mutual fund is called an AM'. An AM' may haveseveral mutual fund schemes with similar or varied investment objectives.

$he AM' hires a professional money manager who buys and sells securities in line with

the fundHs stated objective.

ll MCs Re+ulated $y SE#I, .unds +overned $y #oard of Directors

$he 7ecurities and (xchange 0oard of India F7(0IG mutual fund regulations re uire thatthe fund-s objectives are clearly spelt out in the prospectus.

In addition every mutual fund has a board of directors that is supposed to represent th

shareholdersH interests rather than the AM'-s.



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.or small and medium investor 8 5ho does not have skills and time 8 mutual fund

seems the $est option%

'urrently in India we have mutual funds which invest mainly in two asset classes deband e uity. And now many mutual fund companies also investing in real estateinfrastructure projects natural energy resources etc.

Mutual funds concept can $e 5ell understood 5ith the follo5in+ dia+ram"

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Project Report on Different Schemes of Mutual Fund

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