Project Sindu'

8/3/2019 Project Sindu'

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A COFFEE DAY VENTURE

EXECUTIVE SUMMARY

At present scenario there are a wide range of investment alternatives available for the

investors. Mutual funds are one of the investment vehicles which mobilize funds from small

and retail investors. Investor who finds it difficult to invest directly in the equity share and

debt instrument of a company can invest these financial assets through mutual fund. The

investor is overwhelmed by the choice offered by the choice offered by the mutual fund

companies. The intervention of the regulatory body securities and exchange board of India

(SEBI) has made fund operation more transparent and costs are reduced, thereby making

mutual fund more attractive to the investors and also it has lunched online terminal for mutual

funds and made the investors easier to trade these without any entry load & exit load.

Apart from among the above merits, mutual fund are becoming more popular among the

investors because they are managed by the highly skilled professionals who have sound

knowledge about the securities market and wide experience in undertaking investment and

are also good at the online terminal procedure . The risk is also minimized because the funds

are invested in diversified portfolio. In spite of reduced risk and low cost, mutual funds have

been found wanting on adequate return frontier all over the world. On the other hand mutual

funds also given higher returns than the market.

The study was conducted at way2wealth brokers private limited, Bangalore. The present

study on the online trading of mutual funds & the performance evaluation of mutual funds

while these are trading online, by using the performance measure models developed by

Treynor, Sharpe and Jenson. Based on the measure the five funds considered study are

ranked. The individual funds return are compared with the market returns i.e. the NIFTY

returns as a benchmark.

1. INDUSTRY PROFILE

INTRODUCTION OF ORIGIN OF INDIAN STOCK MARKET

T JOHN INSTITUTE OF TECHNOLOGY, BANGALORE Page 1


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The origin of the stock market in India goes back to the end of the eighteenth century, when

long-term negotiable securities were first issued. However, for all practical purpose, the real

beginning occurred in the middle of the nineteenth century after the enactment of the old

companies act in 1850, which introduced the feature of limited liability and generated investor

interest in corporate securities.

An important early event in the development of the stock market in India was the formation of

the native share and stock brokers association at Bombay in 1875, the precursor of the

present day Bombay stock exchange. This was followed by the formation of associations

exchange in Ahmadabad (1894), Calcutta (1908), and Madras (1937).

Stock exchange means anybody of individuals whether incorporated or not, constituted for

the purpose of regulating or controlling the business of buying, selling or dealing in securities.

These securities include:

I. Shares, scrips, stocks, bonds, debenture stock or other marketable securities of a like

nature or of any incorporated company or other body corporate

II. Government securities; and

III.Rights or interest in securities.

OVERVIEW

A stock exchange is a forum for trading in securities representing shares of firms. an

exchange provides ways by which financing is raised by sales of shares to outstanding

investors .The key regulator governing stock exchanges , brokers, depositories , depository

participants, mutual funds , FIIs and other participants in Indian secondary and primary

market is the securities and exchange board of India (SEBI) Ltd.

EXCHANGE OF INDIA:

The stock exchange, Mumbai (BSE) and the national stock exchange (NSE) are the

countrys two leading exchanges . both the exchanges have switched over from the

open outcry trading systems to a fully automated computerized mode of trading known



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as BOLT (BSE on line trading ) and NEAT (national exchange automated trading ) system .

There are 20 other regional exchanges, connected via the inter-connected stock exchanges

(ICSE). The BSE and NSE allow nationwide trading via their VSAT systems.

BSE: Bombay stock exchange is the oldest stock exchange in Asia with rich heritage

of over 133 years of existence . What is now popularly known as BSE was established as the

native share & stock brokers association in 1875. BSE is the first stock exchange in the

country which obtained permanent recognition from the government of India under the

securities contacts (regulation) Act (SCRCA) 1956. BSEs pivotal and pre-eminent role in

the development of the Indian capital market is widely recognized. BSE has two worlds

prominent exchanges, deutsche Borse and Singapore exchange, as its strategic partners.

Today, BSE is the top in the number of listed companies and worlds 5 th in

handling of transaction through its electronic trading systems. The BSE Index,

SENSEX, is Indias first and most popular stock market benchmark index and it

provides an efficient and transparent market for trading in equity, debt instrument and

derivatives.

NSE: NSE was set up by leading institutions to provides a modern, fully automatedscreen-based trading systems with national reach. The exchanges have brought about

unparalleled transparency, speed efficiency, safety and market integrity. It has set up

facilities that serve as a model for the securities industry in the world terms of

systems, practices and procedures. NSE is the third largest stock exchanges in the world

in terms of the number of trades in equities it is the second fastest growing stock

exchanges in the world with a recorded growth of percent.

A stock broker is someone who buys and sells stock on the behalf of clients for a

predetermined commissions . the stock broker basically works as an coordinating the

activities of the buyer and seller on stock exchanges. Along with the trading of

stocks, many stock broker indulge in giving advice to the clients as to which stocks, mutual

funds , debentures to buy or sell brokers have been trading of stocks and securities for

over300



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Years, but it was not until 1800, when Americas oldest stock exchange-the

Philadelphia stock exchange- was established, that the business of trading in us stocks

and securities became organized and regulated.

SECURITY EXCHANGE BOARD OF INDIA (SEBI):

The securities and exchange board of India was established an April 12, 1992 in

accordance with The provisions of the securities and exchange board of India act

1992. The main objective of the SEBI is-

To protect the interest of investors in securities and to promote the development

of, and regulate the securities market and for matters connected there with or

incidental thereto, thus SEBI is the main body Indian stock exchange.

BROKING INSIGHT

The Indian broking industry is one of the oldest trading industries that has been

around even before the establishments of the BSE in 1875. Despite passing through a

number of changes in the post liberalization period, the industry has found its

sustainable growth. with the purpose of gaining a deeper understanding about the role

of the Indian stock broking industry in the countrys economy.

Booming stock markets and growing retail interest in equity and equity related investments;

Indian stock broking firms are on an expansions drive to increase their network into more

cities and town to lure clients into stock investments. Having witnessed a high level of

consolidation in the last 3-4 years, the domestic stock broking houses could tap the IPO

market to raise funds for their expansions, besides merger and acquisitions.

Considering the ongoing macroeconomics bullishness in India, more stock broking

companies should opt for private or public (or both) funding routes. The stock broking

business has come to hog the limelight with increase in FLL inflows, transparency and

improved tax regime. The volumes on stocks exchange have grown markedly over the years.



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And so has the broking industry stands out in between an IT service company and a bank.

This is because it provides both service and a trading platform backed by the latest

technology.

FINANCIAL MARKET

The financial markets have been classified as cash market, derivatives markets, debt

market and commodities market. Cash market, also known as spot is the most sought after

amongst investors. Majority of the sample broking firms are dealing in the cash market,

followed by derivatives and commodities. 27 percent firm is dealing only in the cash market,

whereas 35 percent are into cash and derivatives. Almost 20 percent firms trade in cash,

derivatives and commodities market. Firms that are into cash, derivatives and debt are 7

percent. On the other hand, firms into cash and commodities are 3% cash & debt market and

commodities alone are 2 percent 4 percent firms trade in all the markets.

TYPES OF BROKER

Full service Broker A Full service broker can provide a bunch of service such as

investments research advice, tax planning and retirement planning.

Discount Broker- A discount Broker lets you buy and sell stocks at a low rate but doesnt

provide any investment advice.

Direct access broker a direct access broker lets you trade directly with the electronic

traders tent to use access broker.


Full Service Broker Discount Broker

Broker

Direct Access-broker


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GROWTH

The last decade has been exceptionally good for stock markets in India. in the back

of wide ranging reforms in regulation and market practice as also the growing

participation of foreign institutional investments, stock markets in India have showed

phenomenal growth in the early 1990s. The stock market capitalization in mid-2007 is

nearly the same size as that of the gross domestic product as compared to about 25

percent of the latter in the early 2000s. Investor base continued to grow from domestic and

international markets. The value of share trading witnessed a sharp jump too. Stock markets

became intensely technology and process driven giving little scope for manual interventions

that has been the source of market abuse in the past. Electronic trading, digital certification,

straight through processing, electronic contract notes, online broking have emerged as major

trend in technology. Risk management became robust reducing the recurrence of payment

defaults. Product expansions took place in a speedy manner .Indian equity market now offer,

in addition to trading in equities, opportunity in trading of derivatives in future and options in

index and stocks. ETFs are showing

Gradual growth. Within five year of introduction of derivatives, Indian stock market now is

ranked first in stock future and fourth in index futures.

The stock market helps channel savings in our economy. This is the most amusing

assumption the lot. At the best of times, the primary market has generated some savings

from the public who saluted the spirit of entrepreneurship of several business groups,

including the Oswals, the Bhansalis,The Orkay Mehras, the Deepaks and the Ruias.



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2. COMPANY PROFILE

2.1) BACKGROUND OF THE COMPANY

Way2wealths legacy dates back to Sivan securities (1984), a premier financial intermediary

and business incubator for IT start up firms, spun off its securities broking arm as

way2wealth. Launched with aim of making investing simpler, more understandable and

profitable for investors, way2wealth has established in itself as one of Indias premier

investments consultancy firms.

Way2wealth offer an extensive range of products and services under one roof, for the

convenience and benefit of our customer, the company having more services, over 1 lakh

customer relationships through a team of 750 wey2wealth manager across over 125 easily

accessible investment outlets in country.

i).PARENT COMPANY

Coffee Day Holdings, billion group more popularly known for creating business such as

Amalgamated Bean Coffee Trading Company Ltd, (Indias largest Coffee Conglomerate

and coffee exporter ), caf coffee day and providing venture capital to companies viz;kshema technologies, mind tree ltd, I-Vega, Tanglin Developments,ittiam etc.

ii). THE VISIONRY

The visionary behind way2wealth, Mr.V.G.Siddhartha, founded Sivan securities and has been

involved in the Indian capital markets since 1984. His business interests spreads across coffee

retailing, plantations, real estates, venture capital, and financial services.

2.2) NATURE OF BUSINESS CARRIED

Way2wealth securities (p) ltd., investment Consultancy Company, provides broking and

financial advisory services in India. It offers trading services in equity, equity derivatives, and

commodity derivatives. And currency derivatives. The company provides investments

products, including mutual funds and insurance; portfolio management, which includes risk



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managed investments solutions; and corporate advisory, including treasury management,

hedging in commodities and currencies.

2.3 VISION, MISSION & QUALITY POLICYVISION

To be amongst most trusted power utility company of the country by providing environment

friendly power on most cost effective basis, ensuring prosperity for its stake holders and

growth with human face.

MISSION

To be the pre-eminent destination for personalized financial solutions helping individual

create wealth.

To ensure most cost effective power for sustained growth of India.

To continuously upgrade and knowledge and skills of its human resources.

To achieve excellence in every activity the company undertakes.

QUALITY POLICY

To achieve and retain leadership, way2wealth shall aim for complete customer satisfaction,

by combining its human and technologies resources, to provide superior quality financialservices. In the process, way2wealth will strive to exceed customers expectations.

2.4 PRODUCT / SERVICE PROFILE

PRODUCT PROFILE:

One-stop shop for investments needs &consultancy across products.

Personalized service through designated relationship managers.

Hassle free and seamless execution for the administrative aspects of your investments

process.

Excellent back office operation.

Proven risk management system.

Equipped to institutional and retail



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W2WWW

Insurance advisory and

distribution

Structured commodity product&

arbitrage

Proprietary

trading

Funding MTF, IPO,

MF

Portfolio management and

services

Mutual funds advisory and

distribution

Equity, derivatives &

commodities

Currency

derivatives


i). Equity trading (NSE&BSE): the Indian market is almost wholly dominated by two

major stock exchanges- national stock exchange of India ltd. (NSE) and the Bombay stock

exchange (BSE). The benchmark indices of two exchanges nifty of NSE and Sensex of BSE

are closely followed. The two exchanges also have an F&O (futures and options) segment for

trading in equity derivatives including the indices. The major player in the Indian equity

market is mutual funds, financial institutions and FIIs representing mainly venture capital

funds and private equity Funds.



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ii). Derivatives (NSE): it is a financial instrument that is derived from some other asset,

index, event, value or conditions. The derivatives trade enters into an agreement to exchange

cash or asset over time based on the underlying assets.

iii). Commodities trading (NCDEX&MCX): Commodities derivatives marketare amongst

the worlds largest financial conceived as a hedging platforms for producers and consumers

in the local markets, commodity derivatives trading today has evolved to provide

sophisticated investment and risk managed opportunities to various organizations around the

world.

iv). Currency future trading (NSE&MCX-SX): Participants in India have the choice of

trading on either the multi commodities exchange of India (MCX) or national commodities

& derivatives exchange limited (NCDEX) on a verity of commodities spanning energy,

metals, precious metals and agriculture products.

v). Mutual fund: Advising retail individuals, HNIs and corporate treasure, we offer a choice

of manual funds spanning all investments objective and asset classes and have a systematic 4-

step advisory process comprising, background profiling, risk profiling, model portfolio

creation, review and Re balancing.

vi).Insurance advisory and distribution: The insurance advisory: the insurance advisory

services provides clients with timely and actionable information about the impact of current

and emerging technologies on the life and annuity and the properly casualty insurance market

as well analysis on a firms position. Within the industry.

SERVICE PROFILE

i). Treasury management

W2W advices institutional and wholesale for their investments in various asset classes to help

manage yields treasureries and optimize the portfolio yields. a structured methodology is

employed for assessment, portfolio modeling, performance measurement and periodic review.

ii). Hedging in commodities and currencies



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W2W has specialized team, with vast experience in domestic and global markets advising

corporate and SMEs in their hedging programs.

iii). Employee Stock option planning to and advisory:

ESOP planning structuring and plan execution are important tasks for corporate planning to

issue ESOPs their employees. The company extends comprehensive assistance in the entire

process, further; the company assists corporate employees in sourcing ESOPs loans through

company tie-ups.

iv). Tax Filling and financial planning to employee

Essentially an employee welfare initiative by corporate. The company assists this initiative

by rolling temporary kiosks at work sites during the tax filing season. Corporate employee

gets spot advice assistance in filling and submission of other income tax returns through

qualified charted accounts.

2.5 AREAS OF OPERATION

The investment outlets propagate a unique ambiance of comfort and convenience reflecting,

transparency of operation. Way2wealth operates in major parts of India, comprising of164

branches spread across 62+ cities, with 750+wealth managers.

Major state are- Andhra Pradesh , Bihar, Chandigarh, Delhi, Goa, Gujarat, Haryana,

Karnataka, Kerala, Madhya Pradesh, Orissa, Tamil nadu, west Bengal and Uttar Pradesh.

2.6) OWNERSHIP PATTERN

The way2wealth stock broking is a private limited, which is ventured by coffee day. The chief

executive officer of way2wealth is Mr. M R Shashibhushan, and Mr. Sunil Ramrakhiani is a

chief operating officer.

2.7) COMPITITORS INFORMATION



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INFRASTRUCTUR AL FACILITIES:

R&D:

Research W2W has a dedicated team of analysis specializing in commodities and

commodities trading. The team comprises analyst from different fields such as economies,

agriculture science. Statistics, and finance among other. This diverse manpower mix helps to

co to do a multi perspective analysis of all commodities and filter the information as per thedurationof the trading call. the team is equipped to serve both institutional and retail clients,

the company research , well recognized in the industry is based on primary surveys,

interaction with physical markets player, fundamental, derivatives, technical and statistical

analysis, giving it sense of completeness.

Analysts have access to the latest market data, charts, markets intelligence etc. constantly

analyzing the data to facilitate customer trading decision. Company research is aimed not only

at the long term trader & investors, but also caters to the needs of short term / intraday trader.


1. Religare Securities Ltd 7. Reliance Money2. Motilal Oswal Securities 8. HDFC securities3. Indian bulls Ltd 9. Indian INFO line4. Kotak securities 10. Bajaj Capital

5. ICICI direct.com 11. Angel Broking6.Share khan 12. Geojit Financial Services Ltd


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TRADING FACILITIES

Although delivery based traders are a small propositions of the overall volumes, they form a

sizeable amount in absolute terms on the exchanges. The company has extensive experience

in executing delivery based trades in various commodities including bullion, pulse, food

grains and spices. a specialized cell has been set up to help you take advantage of the

arbitrage opportunities and facilitate spot market transaction in various commodities the

members of this desk also have significant expertise in executing large orders effectively at

lowest impact cost.

TRAINING FACILITIES

Excellence in Administration & facilities arrangement primarily responsible forinfrastructure development through mobilization of administration & facilities

Management to develop new branches, infrastructure, vendors administration policies for

the companys services & manage exciting relationships. A combination of which leads to

customer & employee good will and market visibility.

Training and knowledge needs- the company have training programs for our business

associates and their staff on an ongoing basis to keep them abreast of latest market

developments, product innovations etc . Additionally, specific programs are available to help

prepare for relevant regulatory certification exams.

2.9) ACHIVEMENTS AND AWARDS

1. Achieved Best Top performer award in card sales for year 2005

2. Corporate Excellence Award, year 2007.

3. Best performer award for vikas Kumar from SIP Company

4. D&B Equity Broking Award for the improving broking house, 2010.

5. HDFC AMC Recognition Award Outstanding Mobilization.

6. Templeton Certificate of Appreciation Outstanding Performance.

7. TATA MF Certificate of Appreciation Outstanding Mobilization

8. Birla Sun Life AMC Certificate of Excellence-Outstanding Mobilization

2.10) WORK FLOW MODEL:



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NSE/ BSE

BROKERS

CLIENT SUB-BROKERS

(ONLINE

DEMAT BANK BROKERS

BROKER

NSE

the stock exchange of NSE and BSE, from which the datas will flow to respective brokers,

from that it goes to sub broker, and even individual trader through online, clients has to open

Demat and bank account which will be given to broker who will submit to the exchange.



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TRANSACTION CYCLE :

2.11) FUTURE GROWTH AND PROSPECT S OFWAY 2 WEALTH:

Way2wealth, investment advisory firms, is on the lookout for a strategic partner to fuel its

growth plans. According to a senior official of the company, it is going in for this strategicdivestment to fuel its aggressive growth plan of spreading its networks to tap the new partner

in control to drive future growth the investment boom in the markets. The company has close

to 500 professional in its rolls and has a strong 50 plus points of presence in the country.


TRADE EXECUTIONDECUSION TO TRADE

CLEARING OF TRADESFUNDS / SECURITIES

SETTLEMENT OF TRADE

PLACING ORDER

TRANSACTION CYCLE


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Going forward

The company NBFC will be functional to roll out products.

company endeavor to become the market leader ,and have recently added to our

existing

product offering , investments banking , merchant banking, M&A advisory, PE

advisory

To cater to the unique needs of institution, FIs bank etc. will be setting up dedicated

Services, institutional quality desk based out of Mumbai.

NRI desk will be set up in foreign location.

other business to be added are-

Real Estate Broking Exclusive tie up for distribution of personal loan

For successful implementation of a strategy large or small the management needs take to

account of all seven factors. They are all interdependence, if one element changes then this

will affect all the rest. Change in hr systems like internal career plan and management

training will have an impact on the organizational culture (management style) and thus will

affect the structure, process and finally characteristics competencies of the organization.

3. MCKE NSYS 7S FRAME WORK



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The 7 s model is better known as McKinsey 7-s. This is because the two persons who

developed this model, tom peter and Robert waterman, have been consultant at McKinsey &

co at the time. They published their 7=s model in their article structure is not organization

(1980). and in research work books the art of Japanese management (1981) and in search

of excellence(1982).The model starts on premise that An organization is not just structure,

but consist seven elements with a complex relation between them;

For successful implementation of a strategy large or small the management needs to take to

account of all seven factors. They are all interdependent, if one element changes then this will

affect all the rest. A change in HR-systems like internal career plan management training will

have an impact on the organizational culture (management style) and thus will affect the

structure, process and finally characteristics competencies of the organization.

3.1) STRUCTUR E :

Organizational structure is relatively more durable under organizational arrangements and

relationships. It prescribes the formal relationships among various position and activities.



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VPCEOHead ofproduct

marketing. &

online

Head of

investing

Head of

PMS

Head of

research

Head of

channel

Head of

operation & risk

management

Head of

HRD

Head of

marketing&

communicatio

n

Head of

Finance


Arrangement about with other members, what roles he is to perform and what rules and

procedure exists to guide the various activities performed by member are all part of the

organizational structure. There exist formal and informal way of communication in the

organization.

Head



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BRANCH

HEAD

BRANCH

MANAGER

TECHNICAL

ANALYST

FUNDAMENT

AL. ANALYST

DEALERSRELATIONSHIP

MANAGER AND

MARKET

EXECUTIVE


COMPANY STRUCTURE:

3.2) SKILLS:

It is a distinctive capability of personnel of the organization as a whole. They undertake

weekly cash course for updating the staff to get to know about different strategy followed by

the organization. The training is given to the staff in such a way that the errors committed by

him are minimized and accuracy in the execution of order. In addition in addition to this when

NSE /BSE comes with new products, proper training is given to the staffs.



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3.3) STYLE:

All organization has their own distinctive culture and management style. It includes their

dominant values, beliefs and norms which structure refers develop over time. It also entails

the way manager interact with their employees and way they spend their time.

As in the case of way2wealth the top manager of the company arranges for the meeting with

their concerned employees/staff and discussions are made regarding the positions of the stock

market and how to go about it.

The style of Way 2Wealth is bottom up (i.e.) the information flows from lower level to the

upper level (i.e.) the feedback is given by staff to the top manager.

3.4) STRATEGY

It is plan of action; an organization prepares in response to or in anticipation of changes in its

external environment. Way2weallth advises the clients, by enhancing their profit & by

reducing their financial taxation that is tax planning is done.

The main strategy is to create long-term wealth and more returns on investment employed for

clients and depending on the clients need long-term planning advised by these people through

capital market. The new strategy is to go global as soon as possible.

3.5) SYSTEMEvery organization has some system / internal process to support and implementation the

strategy and run day today affairs. The organization are simplifying and modernizing their

process by innovation and use o new technology to make the decisions making process

quicker.

Way2wealth mainly comprises of two types of system, namely,

1. Order execution system

In the case of order execution system, it mainly deals with buying and selling of stocks. The

order is been executed only when the buying and selling price matches each other.

In case of buying of the shares function key 1 or + sign used

In case of sharing shares function key 2 or - sign is used

The software used by the organization is ODIN, META STOCK& EMTRADE.



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2. Merit rating systems

The shares or stock the company is rated on the basis of earning per share (EPS), market price

and the brand value of the company.

3.6) STAFF

Staffing is the process of acquiring human recourses for the organization and assuring that

they have potential to contribute to the achievements of the organizations goals. It includes

selection, placements, training and development of appropriate qualified employee. Total

employees 1001-2500.

It consist of staffs like-

Fundamental analyst

Technical analyst

Dealers

Back office

Relationship manager

Powers and responsible of head of departments

1. As a fundamental analyst, he prepares the balance sheet for the organization. He also

works on EPS &P/E ratio. Apart from this, he is entitled to recommend the short,

medium and long term investment.

2. As a technical analyst, he works on chart this is akin to an ECG of patient this can tick

by tick (seconds) to hours. This can be mainly useful for day trader. He also gives

recondition to the investors

3. Dealers are the people who execute the orders. They require speed and knowledge of

all the companies and not afford to make mistakes (i.e.) he is suppose to be very

active. In case of dealers who handle number of accounts has, to have an idea

about their portfolios (i.e.) when to buy and sell their securities



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4. In the case of back office, contacts and billing are made. it also includes pay in and

pay outs and preparations of Demat (depository) account. Their main responsibility

is to make delivery institutions challan duly signed; otherwise it will go for auction.

5. The relationship manager are said to be high net worth investors (HNI) (i.e.) to get big

investors to the organization. They create volume to generate more brokerage at the

same time they see that the clients profits also increases. At the same time he also

briefs from time to time about the stock market to the fresh investors.

3.7) SHARED VALUES

In way2wealth all the members shares some common fundamental ideas or guiding

concepts around which the business is built. This may be to make money or to achieve

excellence in particular fields. These values and common goals keep the employee

working towards the common destination.

4. SWOT ANALYSIS



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4.1) STRENGHTS:

1. Way2wealth has very strong foundation with 25 years of experience, in the

financial service industry.

2. It has 750 wealth managers across the country with a research desk for

fundamental and technical analyst, which has been a great strength of the

way2wealt

3. Way2wealth online is far more cost effective than offline trading; hence there is

no additional cost.

4. One of the largest financial investors of India, comprising many branches in

major state of India.

5. Live streaming quotes for all segments. That is equal importance is given to all

category of investors.

6. Way2wealth offers free demat account to the investors

7. Economical trading system with most Competitive brokerage structure.

4.2) WEAKNESSES:

1. Way2wealth has its branches only its branches only in some major states of India; it

does not have any global presence.



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2. Inadequate human resource

3. Growth without direction

4. Loss of corporate control

4.3) OPPORTUNITIES :

1. Widen new market segments.

2. To expand to foreign markets.

3. Attract more people of providing customer centric products.

4. Apply R&D skills in new areas.

4.4) THREATS :

1. Threats from existing stock brokers are who has global presence in the market.

2. Frequent changes in the policy of SEBI may affect the company policy and strategy.

3. Threats from new entrance of stock broking firms with most competitive strategy.

4. Unfavourable economic conditions in the market have a adverse effect on the

investment policy.

5. Execution of risk.

6. LEARNING EXPERIENCE

It has been good learning in way2wealth. I have got practical knowledge about what exactly

the stock broking firms do and how they trade. In the organization learned about how to



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advice the clients with regards to their investments decisions, in way 2 wealth I learned how

the customers account will be maintained that is the portfolio management, and also got

know about the organizational Etiquette which is to be followed in organization.

Thus in way2wealth got real practical exposure to stock broking firm and their business, and

gained in debt knowledge in broking division.

.

CHAPTER -7

DESIGN OF THE STUDY

7.1 GENERAL INTRODUCTION

A Mutual fund is a trust that pools savings from a number of investor who share a common

financial goal. The money thus collected is then invested in capital market instrument such as

shares, debentures, and other securities. The income earned through this investment and the

capital appreciation realized is shared by its unit holders in proportion to the number of units

owned by them. thus mutual funds 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.



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The operations are much more transparent now. An investor has to bear some expenses for

investing through mutual funds.

The mutual fund industry is started India with the introduction of the concept of mutual fund

by UTI in the year 1936. Though the growth was slow, but it accelerated from the year 1987

when non UTI player entered the industry .Till 1986 the unit trust of India mutual fund in

India. In 1987 public sector banks and insurance companies were permitted to set up

subsidiaries to undertaken mutual fund business. Securities Exchange Board of India (SEBI)

formulated the mutual fund regulations in 1993, which for the first time established a

comprehensive regulatory framework for the mutual fund industry. Since then several mutual

funds have been set up by the private and joint sectors.

The growth path of Mutual Fund Investment India is attributed to the high saving pattern inIndia. This is a healthy status of the MF industry in India when compared to Japan, France

and China. The Mutual fund sector in India though has huge potential, yet the limited

participation of the rural sector will always act as a deterrent factor. The other hurdles in this

regard are lack of awareness, inferior distribution channel and limited banking services in the

rural regions. The best instrument of investing money nowadays is the mutual fund. Investing

in a stock market has become risky these days due to the high volatility in the market.

The flow chart below describe broadly the working of a Mutual Fund

MUTUAL OPERATION FLOW CHART



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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 appreciation realized are shared by the units holders in proportion to the number of

units owned by them .The flow chart above describe the working of a mutual fund.

CHARACTERISTICS OF MUTUAL FUNDS

The ownership is in the hands of the investors who have pooled in their funds.

It is managed by a team of investment professionals and other service providers.

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

The investors share is denominated by units whose value is called as Net Asset

Value (NAV) which changes every day.

The investment portfolio is created according to the stated investment objectives of the

fund.

ORGANISATION OF A MUTUAL FUND

There are many entities involved in a mutual fund organization and the diagram below

illustrates the organizational set up.

Sponsor



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The sponsor of a mutual fund is like the promoter of a company .The sponsor may be bank,

financial institution, or a financial services company. It may be Indian or foreign. The sponsor

is responsible for setting up and establishing the mutual fund .the sponsor is the settle of the

mutual fund trust. The sponsor delegates the trustee function to the trustees.

Trustees

A trust is notional entity that cannot in its own name, so, the trust enters into contracts in the

name of trustees .appointed by the sponsor, and the trustees can be either individual or a

corporate body (a trustee company).

Asset Management Company

The asset management company (AMC), also referred to as the investment manager, is a

separate company appointed by the trustees to run the mutual fund .the AMC should have a

certificate from SEBI to act as designing the schemes, launching schemes investments and

interacting with the investors. In return for its services, the AMC is compensates in the form

of investment management and advisory fees.

Mutual fund

The mutual fund is constituted as a trust under the Indian trust act, 1881, and registered with

SEBI; the beneficiaries of the trust are the investors who invest in various schemes of themutual fund.

Custodian

The custodian handles the investment back office operation of a mutual fund .It look after the

receipt and delivery of securities, collection of income distribution of dividends, and

segregation of the assets between schemes.

Registrars and Transfer Agents

The registrars and transfer agents handle investors related services such as issuing units,

redeeming units,

SEBI GUIDELINES FOR MUTUAL FUNDS



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Mutual fund shall be established in the form of trusts under Indian Trust Act

and will be authorized for business by SEBI.

Mutual funds shall be operated only by Established Asset Management Companys

setup for the purpose. At least 50% of the board of AMC must be independent directors

with no interest in the sponsoring organization.

The minimum net worth to be maintained at all times is prescribed at Rs 5 crore. SEBI

vested with powers to withdraw authorization given to AMC in case investor

interests are not taken care of business activity.

MUTUAL FUNDS AS AN INSTRUMENT FOR INVESTMENT

Diversification

It means that investor must spread his investment across different securities .Individual

investor can scarcely achieve such diversification.

Liquidity

Unit or share of mutual fund can be traded in the secondary market or sold back at the notified

repurchase price.

Assured allotment

Investors are assured of allotment when they apply for the unit or shares of mutual fund.

Small Investments

The minimum investment ranges from Rs 1000 to Rs 5000. No other avenue of investments

offers such a wide range of choice for such an affordable sum.

Tax advantage

They dont have to pay tax on their interests and dividend income as well as capital gains.

Secondly dividends distributed by mutual funds are tax exempt in the hands recipient.

TYPES OF MUTUAL FUND SCHEMES



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a) Based on Structure

open -Ended Schemes

Close- Ended schemes

Interval Schemes

b) Based on Objectives

Growth/Equity schemes

Income/debt funds

Money market

Balanced schemes

C) Other Schemes

Tax savings

special schemes

1. Sector specific schemes

2. Index schemes

Open-ended FUND/Scheme

The unit offered by these schemes are available for sale and repurchase on any business day at

NAV based prices. Hence, the unit capital of the scheme keeps changing each day. such

schemes thus offer very high liquidity to investors and are becoming increasingly popular in

India .Please note that an open ended fund is NOT obliged to keep selling /issuing new

units at all times , and may stop issuing further subscription to new investors. On the other

hand, an open-ended fund rarely denies to its investors, the facility to redeem existing units.

Close Ended Schemes

The close-ended funds have a fixed maturity period. The first time investments are made

when the close end schemes is kept open for a limited period. Once closed, the units are listed

on a stock exchange. These schemes are lunched with new fund Offer (NFO) with a stated

maturity period after which the units are fully redeemed at NAV linked prices. In the interim,

investors can buy or sell units on the stock exchanges where they are generally listed. Unlike



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open-ended schemes, the unit capital in close ended schemes may offer direct repurchase

facility to the investors. Close-ended schemes are usually more liquid as compared to open-

ended schemes and hence trade at a discount to the NAV .this discount tends towards the

NAV closer to the maturity date of the scheme.

Interval Schemes

These schemes combine the features of open ended and close ended schemes .They may be

traded on the stock exchange or may be open for sale or redemption during pre-determined

intervals at NAV based prices.

Growth/Equity Schemes

These schemes, also commonly called growth schemes, seek to invest a majority of their

funds in equities and a small portion in money market instrument. Such schemes have the

potential to deliver superior returns over the long term. However, because they invest in

equities these schemes are exposed to fluctuations in value especially in the short term.

Equity schemes are hence not suitable for investors seeking regular income or needing to use

their investment horizon. the NAV prices of equity fund fluctuates with market value of the

underlying stock which are influenced by external factors such as social ,political as well as

economic

Income/Debt Schemes

These schemes, also commonly known as income schemes, invest in debt securities such as

corporate bonds, debentures and government securities. The prices of these schemes tend to

be more stable compared with equity schemes and most of the returns to the investors are

generated through dividends or steady capital appreciation .these schemes are ideal for

conservative investors or those who are not in a take higher equity risks however, as

compared to the money market they have a higher price fluctuation risk and compared to guilt

fund have a higher credit risk.

Money Market Schemes

These schemes invest in short term instruments such as commercial paper, certificates of

deposits, Treasury bills, and deposit with banks. The schemes are the least volatile of all the



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types of schemes because of their investments in money market instrument with short-term

maturities. These schemes have become popular with institutional investors and high net-

worth individual having short-term surplus funds

.

Balanced Schemes

The aim of balance fund is to provide both growth and regular income as schemes invests

both in equities and fixed income securities in the proportion indicated in their offer

documents. These are appropriate for investors looking for moderate growth. such schemes

are ideal for investors with a conservative long-term orientation.

Tax savings schemes

Investors are being encouraged to invest in equity markets through equity linked savings

schemes by offering them a tax rebate. Units purchased cannot be assigned /

transferred/pledged/redeemed/ switched-out until completion of 3 years from the date of

allotment of the respective units.

Sector specific schemes

A sector specific schemes invests its corpus in the equity stocks of a given sector such asinformation technology, telecommunication , these schemes appeal to investors interested in

taking a bet on specific sectors.

Index schemes

index schemes replicate the portfolio of a particular index such as the BSE sensitive index,

S&P NSE 50 index (NIFTY), etc these schemes invest in the securities in the same weight age

comprising of an index. NAV of such schemes would rise or fall in accordance with the risk

or fall in the index. Though not exactly by the same percentage due some as tracking error

in technical terms.

TRADING OF MUTUAL FUNDS ON STOCK EXCHANGES



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SEBI recently came out with major change in the mutual fund industry by launching a

platform to enable buying and redeeming of mutual fund units on the exchange.

Investor can now buy or redeem the open ended mutual on NSE through a broker or an online

trading account just like one buy and sell stocks. SEBI has introduced trading in open ended

mutual fund through the national stock exchange (NSE). Investor can operate for the physical

delivery of units and need not have a separate demat account. Further, the investor can operate

for the online platform offered by the NSE and BSE or the offline way i.e. through distributor

or directly through MF houses. For the facility of holding units in the physical form and

transact as they have been doing till date.

The regulator is trying to make investment in mutual funds easier and transparent for the

investor community. This year two fold change has been bought about. They include the

abolishment of the entry load and listing on the mutual fund on the exchange. As we know,

that SEBI had earlier abolished initial issue expenses and mutual fund schemes were allowed

to recover expenses connected with sales and distribution through entry load only. Further,

investors making direct application to the mutual funds were exempted from entry load.

The mutual funds advisory committee is also looking at more reforms. The advisory is

recommending the asset management companies lower the fund management fees from the

present. The fund houses currently charges for the first Rs 100 crore garnered by scheme, and

1 per cent thereafter .it is also recommending net asset value calculation.In the long run, these changes will not only boost the Rs 7.23 trillion Indian mutual fund

industries, but also be very beneficial for the investors as it will be a lot more convenient,

easy, and transparent and investor friendly.

Objectives

Reduce the paper work and ensuring errors

Enable transparency to customers

Provide customer with a single, mutual funds / distributors- independent view of his

portfolio.

Advantages Investors:



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Elimination of paper work: Application forms, cheques, collection

statements, etc.

Faster Execution: Allotment by way of demats credit and investor

gets demat account statement along with other investments.

Convenience: Existing investors can invest through same channel

and same point as secondary market.

Members:

More products to offer: Now investors can buy mutual fund units

through their Member.

Convenience: Members are accustomed with existing system and canleverage it by using it for Mutual fund trading.

Increase Customer: Investor who are currently investing in mutual

fund can be introduced to secondary markets.

Entry Load and Exit Load

The fee paid while entering a mutual fund. Investors dealing directly with the company do not

pay any entry load. Large investors bringing 5 crore and more are exempted from the entry

load. The entry load on equity fund has been standardized at 2.25 percent .it serves to

discourage the frequent buying and selling.

Exit load is fee paid while existing a mutual fund. The fee ranges from 4 percent to 0 percent.

it is made to discourage the investors from making the withdrawals . The exit load will be

waived off if an investor holds an investment for a certain number of 5 years.

As per the SEBI circular entry load for the schemes, existing or new, of mutual fund has

been removed. The investor would pay the commission upfront to distributors directly. The

distributors should disclose the commission, trail or otherwise, received by them for different

schemes / mutual funds, which they are distributing or advising the investors.

ONLINE TRADING OF MUTUAL FUNDS



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The process of buying and/or selling financial securities, currencies and commodities through

the Internet is known as online trading. For the purpose of trading online, investors need to

exercise patience as well as use the right proprietary software provided by several brokers.

Online trading is an internet based investment activity which does not involve any direct

involvement of the broker. There are several leading online trading portals in India along with

the online trading platforms of the biggest stock houses like the NSE and BSE. Online

investments in mutual funds has picked up after the abolition of entry load by the Securities

and Exchange Board of India (SEBI). With an online account, Investor can access their

mutual funds online avoiding the need for multiple brokers, multiple bank accounts. There is

also no need to call an agent and one of the biggest benefits of online investment is the

complete privacy. Investor doesnt share their investment details with anyone.

Investor can register and buy mutual funds through broking companies offering online

services - just like equity demat accounts. All you need is a one-time registration through the

website, which may be free or levy a small transaction fee. Investor can switch between

funds, discontinue a systematic investment plan (SIP) at the click of a button, or even get a

consolidated statement of all your holdings.

Benefits of Online Trading

Transparency: Online trading provides transparency on all the information related to

the time of order placement till the final settlement. Every step of online trading is

subject to scrutiny, since this provides transparency to the trading process.

Best prices: Investors, by way of online trading, can get the best quotes for mutual

funds because of high transparency in the system.

Added convenience and liquidity: One can carry out online trading anytime during

business hours. This also helps in providing liquidity to investors.

Low commissions: Investors can make transactions frequently, without the need to

worry about the burden of commissions; thus making day trading and short-term

trading more feasible.

Dangers of Online Trading

Technology problems: Delays in transactions may be caused due to Internet

connection outages or power failures.



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A mentor's absence: As there is no guidance from professionals, online trading may

involve formulation of improper trading strategies which in turn would lead to huge

losses

Overtrading: Online traders usually have a long term strategy before investing.

However, the attraction of capitalizing on short term movements might make them

buy and sell more often. Since the commission levels in online trading are low,

investors are lured into day trading. This takes them away from their well-researched

and long term trading strategy, causing great losses in the long run.

7.2 RESEARCH DESIGN

The research design is descriptive in nature, the study attempts to analyze and evaluate the

existing data system, through the financial data. For the purpose, risk adjusted performance

measures suggested by Jenson, Treynor and Sharpe are employed. Here the comparison is

done on the various well performed Schemes selected from different fund houses or asset

Management companies. The analysis is done on the percentage of return from the period

starting from March 09, 2010 to march 08, 2011.

7.3 STATEMENT OF THE PROBLEM

The retail investor faces problems in selecting funds. Factor such as investment strategy and

management style are qualitative, though past performance alone cannot be indicative of

future performance, it is only quantitative way to judge how good a fund is at present.

Therefore, there is a need to correctly assess the past performance of different mutual funds.

The online trading now made customers convoluted to buy and purchase the mutual funds.

The online trading terminal is difficult to understand for the common people . In this study

attempt is made to evaluate the performance of equity diversified growth oriented mutual fund

schemes of different asset Management Company on the basis monthly return compared with

bench mark returns and know the procedure of online trading.

7.4 OBJECTIVES OF THE STUDY

a) To compare the performance of various Asset Management Companies offering

equity diversified growth oriented schemes.

b) To know the price fluctuation of different schemes when these are traded online.



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c) To know the effect on different schemes after making the mutual funds to trade

online.

d) To suggest the investor of the performance of various asset management companies

by ranking them based on the performance measures.

e) To measure and analyze the returns of sampled mutual fund equity diversified

growth oriented schemes and compares them with the market returns.

7.5 SCOPE OF THE STUDY

a) The return of the schemes is compared with the bench mark which is nifty index.

b) The sample 5 diversified growth oriented schemes selected for the study represents

the population of equity diversified growth oriented schemes offered by differentasset management companies.

c) The performance of the mutual fund schemes are evaluated based on the quarterly

returns for the year starting from 09,March 2010 to 08,March 2011.

d) The study considers only equity diversified growth oriented mutual fund schemes.

7.6 LIMITATIONS OF THE STUDY

a) Only FIVE growth oriented mutual funds are compared and analyzed.

b) The study is limited to equity diversified growth schemes.

c) The major portion of the study is based on the secondary data

7.7 METHODOLOGY OF DATA COLLECTION

Source of data

All the data used is secondary in nature. The data like daily fund NAV and benchmarking

indices are considered from various sources like mutualfundsindia.com, nseindia.com,moneycontorl.com.

7.8 SAMPLING PLAN

7.8.1 Sampling Design



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Sampling design used is convenience sampling. Five equity diversified growth oriented

mutual fund schemes each from different asset management co are selected.

7.8.2 Sample size

FIVE diversified growth oriented schemes they are:

1. ICICI Pru growth(Growth)

2. BIRLA Sun life (Growth)

3. Kotak opportunity fund(Growth)

4. HDFC equity Fund(Growth)

5. Sundaram BNP Paribas Growth Fund(Growth)

ICICI PRUDENTIAL MUTUAL FUND

ICICI Prudential Asset Management Company Ltd. is a joint venture between ICICI Bank,

Indias second largest commercial bank & a well-known and trusted name in the financial

services in India, & Prudential Plc, One of the United Kingdoms largest players in the

financial services sectors.

In a span of just over 12 years, The Company has forged a position of pre-eminence as one of

the largest Asset Management Companys in the country, contributing significantly towards

the growth of the Indian mutual fund industry.

.

As an Asset Management Company, We have over 15 years of experience and are currently

managing a comprehensive range of schemes of more than 46 Mutual funds and a wide range

of PMS Products for our investors, spread across the country. We service this investor base

with our own branch network of over 160 branches and a distribution reach of over 42,000

channel partner

BIRLA SUN LIFE MUTUAL FUND

Birla Sun Life Asset Management Company Ltd. (BSLAMC), the investment managers of

Birla Sun Life Mutual Fund, is a joint venture between the Aditya Birla Group and the Sun



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Life Financial Services Inc. Of Canada. The joint venture brings together the Aditya Birla

Group's experience in the Indian market and Sun Life's global experience.

Established in 1994, Birla Sun Life Mutual fund has emerged as one of India's leading

flagships of Mutual Funds business managing assets of a large investor base. Our solutions

offer a range of investment options, Including diversified and sector specific equity schemes,

fund of fund schemes, hybrid and monthly income funds, a wide range of debt and treasury

products and offshore funds.

Birla Sun Life Asset Management Company has one of the largest team of research analysts

in the industry, Dedicated to tracking down the best companies to invest in. BSLAMC strives

to provide transparent, Ethical and research-based investments and wealth management

services.

KOTAK MAHINDRA MUTUAL FUND

Kotak Mahindra is one of India's leading financial institutions, offering complete financial

solutions that encompass every sphere of life. From commercial banking, to stock broking, to

mutual funds, to life insurance, to investment banking, the group caters to the financial needs

of individuals and corporate.

The group has a net worth of Rs.7,911 crore and employs around 20,000 employees across its

various businesses, servicing around 7 million customer accounts through a distribution

network of 1,716 branches, franchisees and satellite offices across more than 470 cities and

towns in India and offices in New York, California,San Francisco, London, Dubai, Mauritius

Kotak Mahindra Asset Management Company Limited (KMAMC),a wholly owned

subsidiary of KMBL, is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF).

KMAMC started operations in December 1998 and has over 10 Lac investors in various

schemes. KMMF offers schemes catering to investors with varying risk - return profiles and

was the first fund house in the country to launch a dedicated gilt scheme investing only in

government securities

SUNDARAM MUTUAL FUNDS



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Sundaram BNP Paribas mutual fund is a joint venture between Sundaram Finance and French

banking giant BNP Paribas. Sponsors of the fund are Sundaram Finance Limited and BNP

Paribas Asset Management, which is the asset management arm of BNP Paribas.

Sundaram Finance is one of India's largest non-banking companies with an asset base in

excess of Rs 3,000 crore and annual revenues of over Rs350 crore. BNP Paribas is one of the

largest European banks with a total asset base of 1.2 trillion and market capitalization of

around 57 billion.

Sundaram BNP Paribas Asset Management Company Limited is the fund manager to the

mutual fund. BNP Paribas acquired a 49 per cent in the AMC in August, 2006, with

Sundaram Finance holding the balance. T. P. Raman is the managing director and CEO of the

AMC. Fund management function is headed by N Prasad, chief investment officer. As of end

August 2006, the fund has assets of over Rs.5, 808 crore under management.

HDFC MUTUAL FUND

HDFC Asset Management Company Ltd (AMC) was incorporated under the Companies Act,

1956, on December 10, 1999, and was approved to act as an Asset Management Company for

the HDFC Mutual Fund by SEBI vide its letter dated July 3, 2000.

In terms of the Investment Management Agreement, the Trustee has appointed the HDFC

Asset Management Company Limited to manage the Mutual Fund. The paid up capital of the

AMC is Rs. 25.161 crore.

7.9 OPERATIONAL DEFINITIONS

Return can be defined as the amount or rate of proceeds, gain, profit which accrues to an

economic agent from an undertaking or enterprise or real/ financial investment. It is a

motivating force behind investment, the objective of investors is usually to maximize return.



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a). Return = Ending NAV- Beginning NAV + Dividend paid during the period x100

Beginning NAV

b) Standard Deviation of return =. RA-RA*2

N-1

c) Beta = (RA-RA*) (Rm-Rm*)

RM-RM*2

d) COV (RA, RM) = (RA-RA*) (RM-RM*)(N-1)



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e) 2M(Variance) = (RM- RM*)

(N-1)

Whereas;

RA: Return of the portfolio A

RM: Return of the market M

N : Number of periods

2M: Variance

RM*: Average return of market

RA*: Average return of portfolio A

f) Net Asset Value (NAV)

In simple words, net asset value is the market value of the securities held by the scheme.

Since market value of securities changes every day, NAV of a scheme also varies on day to-

day basis. It is the current price of every unit of a fund.

Formula for the Calculation Net Asset Value (NAV)

Net Asset Value = Market Value of Investment



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No. of units Outstanding

7.10 TOOLS & TECHNIQUES

a) Performance Measure

Treynor Measure

Sharpe Measure

Jenson Measure

a) Statistical Tools

Mean

Standard Deviation

Beta

Variance

Treynors Performance Index :

According to him systematic risk or beta is the appropriate measure of risk. He relates the

excess of return on a portfolio to the beta i.e. systematic risk

Treynor Measure = Rp-Rf

p

Whereas;

Rp: Average rate of return on portfolio

Rf: Risk free return

p: Beta of portfolio A

Sharpes performance Index



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The Sharpes measure is similar to the Treynors measure except that it employs

standard deviation and not beta value as the measure of risk.

Sharpe Measure= Rp Rf

p

Whereas;



p : Standard Deviation of Portfolio A

Jensons performance Index

It reflects the difference between the return actually earned on portfolio and the return the

portfolio was supposed to earn.

Jenson Measure= Rp - Rf + Rm- Rf

Whereas;



Rm: Average return on market portfolio

: Portfolio beta



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Mean

The mean is the mathematical average of a set of numbers .The average is calculated by

adding up two or more scores and dividing the total by the number of scores.

Mean = X

N

Whereas:

X: Value in the set

N: Number of values in the set

Standard Deviation

It measures how widely values are dispersed from the average. Dispersion is the

difference between the actual value and the average value, The large the difference

between the closing price and the average price, the higher the standard deviations will

be and the higher the volatility and vice versa.

Standard deviation of return = RA-RA*2

N-1



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CHAPTER -8

ANALYSIS AND INTERPRETA TION OF DATA

ICICI PRU GROWTH (Growth)

Fund Name : Open-Ended

Asset Size (Rs cr) : 383.62(31-12-2010)

Launch Date : July 09, 1998

Fund Manager : Mr. Sanjay Parekh

Objective of the fund To seek to generate long-term capital appreciation from a portfolio that is invested

predominantly in equity related securities

TABLE NO 1.1

Table showing the schemes returns



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Source: The Historical NAV is retrieved from moneycontrol.com

TABLE NO 1.2

Table showing market returns

Date

Quarterly

S&P CNX

Nifty

opening

(Thousands)

S&P CNX

Nifty

closing

(Thousands)

Quarterl

y

Returns

(RM)

Mean

(RM*)

( RM

RM *)

RM-

RM*2

(RA-RA)

(RM-RM*)

09Mar10

08June10

5121.05 4987.10 -2.68 1.53 4.21 17.7241 19.968

09June10

08Sep10

4985.05 5607.85 11.10 1.53 9.57 91.5849 85.909

09Sep10

08Dec10

5608.30 5903.70 5.00 1.53 3.47 12.0409 6.450

09Dec10

08Mar11

5924.25 5520.80 -7.30 1.53 8.33 69.3889 53.80

TOTAL X =6.12 166.127

Source: The Historical S&P CNX Nifty is compiled from nseindia.com


Date

Quarterly

Opening

NAV(Rs)

Closing

NAV(Rs)

Quarterly

Returns(

RA)

Mean

(RA*)

(RA RA*) RA-RA*2

09Mar10

08June10

120.90 118.36 -2.10 2.643 4.743 22.49

09June10

08Sep10

119.09 132.94 11.62 2.643 8.977 80.58

09Sep10

08Dec10

133.69 139.71 4.502 2.643 1.859 3.455

09Dec10

08Mar11

137.38 132.63 -3.45 2.643 6.093 37.12

TOTAL X=10.52 143.645


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TABLE NO 1.3

Table for Performance Measure Calculations

Particulars ICIC PRU S&P CNX NIFTY

Average Return 2.643 1.53

Beta 0.8710 1

Risk 6.919 7.937

Treynor -5.9207 -6.27

Sharpe 0.7453 0.7899

Jenson 0.30417 0

INTERPRETATION

From the above table, ICICI Pru Fund Growth

Earned an average return of 2.643 percent as against the market return of 1.53

percent.

Beta value indicates that 1 percent decrease in the market portfolio returns results in

0.8710 percent.

Standard deviation(risk) of 7.937 percent indicates the high volatility of market

return



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The positive alpha value (jenson ratio) indicates superior performance fund in

comparison to the market.

The low variability ratio (Sharpe ratio) indicates that the investor is not able to earn

superior returns than the market for the additional risk taken.

The reward to variability ratio (Treynor ratio) is higher than the bench mark.

GRAPH NO 1.1

Chart showing the Growth scheme and market returns of ICICI Pru Growth

KOTAK OPPORTUNITIES FUND (Growth)


Asset Size (Rs cr) : 936.17 (31-01-2011)

Minimum Investment: Rs 5000

Launch Date : 09-09-2004

Fund Manager : Mr. Krishna Sangavi

Objective of the Fund

The Scheme aims to generate capital appreciation from a diversified portfolio of equity and

equity related securities.



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TABLE NO 1.4

Table showing the schemes return

Date

Quarterly

Opening

NAV(Rs)

Closing

NAV(Rs)

Quarterly

Returns(RA)

Mean

(RA*)

(RA RA*) RA-RA*2

09Mar10

08June10

41.99 42.10 0.26 1.76 -1.5 2.25

09June10

08Sep10

42.35 49.14 16.03 1.76 14.27 203.632

09Sep10

08Dec10

49.51 48.56 -1.918 1.76 3.678 13.527

09Dec10

08Mar11

47.14 43.69 -7.31 1.76 9.07 82.26

TOTAL X=7.062 301.669


TABLE NO 1.5


Date

Quarterly

S&P CNX

Nifty

opening

(Thousands)

S&P CNX

Nifty closing

(Thousands)

Quarterl

y

Returns

(RM)

Mean

(RM*)

( RM

RM

*)

RM-

RM*2

(RA-RA)

(RM-RM*)

09Mar10

08June10

5121.05 4987.10 -2.68 1.53 4.21 17.7241 6.315

09June10

08Sep10

4985.05 5607.85 11.10 1.53 9.57 91.5849 136.56

09Sep10

08Dec10

5608.30 5903.70 5.00 1.53 3.47 12.0409 12.762



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09Dec10

08Mar11

5924.25 5520.80 -7.30 1.53 8.33 69.3889 75.55

TOTAL X =6.12 218.557


TABLE NO 1.6


Particulars KOTAK Opportunity

Fund-Growth

S&P CNX NIFTY


Beta 1.145 1

Risk 10.027 7.937

Treynor -5.275 -6.27

Sharpe 0.602 -0.7899

Jenson 1.07915 0

INTERPRETATION

From the above table, Kotak opportunities fund-growth



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percent.

Beta value indicates that 1 percent decrease in the market portfolio returns results in

1.145 percent.

Standard deviation(risk) of 10.027 percent indicates the high volatility of fund in

comparison to the market

The positive alpha value (Jenson ratio) indicates superior performance fund in




The reward to variability ratio (Treynor ratio) is higher than the bench mark

GRAPH NO 1.2

Chart showing the Growth scheme and market returns of Kotak Opportunities Growth

SUNDARAM BNP PARIBAS GROWTH FUND (Growth)


Asset Size (Rs cr) : 136.73 (31-01-2011)





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Fund Manager : Mr. J. Venkateshan

Objective of the fund

To achieve capital appreciation by investing in a well-diversified basket of equities & equity

related instrument mainly large-caps.

TABLE NO 1.7



TABLE NO 1.8


Date

Quarterly

S&P CNX

Nifty

opening

(Thousands)

S&P CNX

Nifty

closing

(Thousands)

Quarterly

Returns

(RM)

Mean

(RM*)

( RM

RM *)

RM-

RM*2

(RA-RA*)

(RM-RM*)

09Mar10

08June10

5121.05 4987.10 -2.68 1.53 4.21 17.724

1

15.122


Date

Quarterly

Opening

NAV(Rs)

Closing

NAV(Rs)

Quarterly

Returns

(RA)

Mean

(RA*)

(RA RA*) RA-RA*2

09Mar10

08June10

84.09 82.49 -1.902 1.69 3.592 12.902

09June10

08Sep10

82.90 97.49 14.59 1.69 12.9 166.41

09Sep10

08Dec10

98.02 100.25 2.23 1.69 .54 .29

09Dec10

08Mar11

96.75 88.86 -8.155 1.69 9.845 96.92

TOTAL X=6.763


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09June10

08Sep10

4985.05 5607.85 11.10 1.53 9.57 91.584

9

123.453

09Sep10

08Dec10

5608.30 5903.70 5.00 1.53 3.47 12.040

9

1.873

09Dec10

08Mar11

5924.25 5520.80 -7.30 1.53 8.33 69.388

9

82.008

TOTAL X=6.12 222.456


TABLE NO 1.9


Particulars Sundaram BNP Paribas S&P CNX NIFTY


Beta 1.166 1

Risk 9.6007 7.937

Treynor -3.67 -6.27

Sharpe -5.238 -0.7899

Jenson 4.317 0

INTERPRETATION

From the above table, Sundaram BNP Paribas-growth



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percent.

Beta value indicates that 1 percent increase in the market portfolio returns results in

1.166 percent.







The reward to variability ratio (Treynor ratio) is higher than the bench mark.

GRAPH NO 1.3

Chart showing the Growth scheme and market returns Sundaram BNP Paribas Growth

BIRLA SUN Life Equity (Growth )




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Asset Size (Rs cr) : 1.107(31-12-2010)



Fund Manager : Mr. Mahesh Patil


Long term growth, through a portfolio with a target allocation of 90% equity 10% debt and

money market securities.

TABLE NO 1.10



TABLE NO 1.11


Date

Quarterly

S&P CNX

Nifty

opening

(Thousands)

S&P CNX

Nifty

closing

(Thousands)

Quarterly

Returns

(RM)

Mean

(RM*)

( RM

RM *)

(RM-

RM*)2

(RA-RA*)

(RM-RM*)


Date

Quarterly

Opening

NAV(Rs)

Closing

NAV(Rs)

Quarterly

Returns

(RA)

Mean

(RA*)

(RA RA*) RA-RA*2

09Mar10

08June10

247.24 243.89 -1.35 .950 2.3 5.29

09June10

08Sep10

244.56 284.35 16.27 .950 15.32 234.70

09Sep10

08Dec10

285.74 281.17 -1.599 .950 2.549 6.497

09Dec10

08Mar11

273.59 247.54 -9.52 .950 10.47 109.62

TOTAL X=3.801 356.107


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09Mar10

08June10

5121.05 4987.10 -2.68 1.53 4.21 17.7241 9.685

09June10

08Sep10

4985.05 5607.85 11.10 1.53 9.57 91.5849 147

09Sep10

08Dec10

5608.30 5903.70 5.00 1.53 3.47 12.0409 8.845

09Dec10

08Mar11

5924.25 5520.80 -7.30 1.53 8.33 69.3889 87.215

TOTAL X=6.12 252.743


TABLE NO 1.12


Particulars Birla Sun Life S&P CNX NIFTY


Beta 1.521 1

Risk 10.895 7.937

Treynor -4.50 -6.27Sharpe 0.6290 -0.7899

Jenson 2.6867 0

INTERPRETATION



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From the above table, BIRLA SUN Life Equity -growth

Earned an average return of 9.50percent as against the market return of 1.53

percent.


1.521 percent.






superior returns than the market for the additional risk taken. The reward to variability ratio (Treynor ratio) is higher than the bench ma

GRAPH NO 1.4

Chart showing the Growth scheme and market returns BIRLA SUN Life Growth

HDFC EQUITY FUND ( Growth)


Asset Size (Rs cr) : 8,288.98 (31-01-2011)



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Fund Manager : Mr. Prashant Jain


The schemes is aims at providing capital appreciation through investments predominantly in

equity oriented securities

TABLE NO 1.13


DateQuarterly

OpeningNAV(Rs)

ClosingNAV(Rs)

QuarterlyReturns

Mean(RA*)

(RA RA*) RA-RA*2

09Mar10

08June10

231.14 239.49 3.612 4.53 -.918 .843

09June10

08Sep10

241.37 284.17 17.732 4.53 13.202 174.29

09Sep10

08Dec10

285.29 293.81 2.896 4.53 -1.544 2.3839

09Dec10

08Mar11

286.01 268.22 -6.22 4.53 10.75 115.56

TOTAL X=18.11 293.07


TABLE NO 1.14


Date

Quarterly

S&P CNX

Nifty

opening

(Thousands)

S&P CNX

Nifty closing

(Thousands)

Quarterly

Returns

(RM)

Mean

(RM*)

( RM

RM *)

(RM-

RM*)2

(RA-RA

(RM-RM



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09Mar10

08June10

5121.05 4987.10 -2.68 1.53 4.21 17.7241 3.864

09June10

08Sep10

4985.05 5607.85 11.10 1.53 9.57 91.5849 126.34

09Sep10

08Dec10

5608.30 5903.70 5.00 1.53 3.47 12.0409 5.357

09Dec10

08Mar11

5924.25 5520.80 -7.30 1.53 8.33 69.3889 89.547

TOTAL X= 6.12 217.38


TABLE NO 1.15


Particulars HDFC Equity Fund S&P CNX NIFTY


Beta 1.1397 1

Risk 9.883 7.937

Treynor -2.869 -6.27

Sharpe 0.3308 -0.7899



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Jenson 3.876 0

INTERPRETATION

From the above table, HDFC EQUITY FUND (Growth)


percent.


1.1397 percent.



The positive alpha value (Jenson ratio) indicates that the performance of the fund is

superior to the market performance.

The high variability ratio (Sharpe ratio) indicates that the investor is can earn

superior returns by taking greater risk than the market

The reward to variability ratio (Treynor ratio) is higher than the bench mark which

indicates its superior performance..

GRAPH NO 1.5

Chart showing the Growth scheme and market returns HDFC Equity Fund Growth



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RANKINGS

TABLE NO 1.16

Table showing the performance of the mutual funds schemes using the Treynors ratio

SL

NO

FUND NAME TREYNORS RANK

1 ICICI Pru Growth (Growth) -5.9207 5

2 Kotak Opportunities Fund (Growth) -5.275 4

3 Sundaram BNP Paribas Growth (Growth) -3.67 3

4 Birla Sun Life Equity(Grow

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