piyush kumar-pg09073
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OBJECTIVE OF STUDYOBJECTIVE OF STUDY::
y The main purpose of doing this project was toknow about mutual fund and its functioning. This
helps to know in details about mutual fund
industry right from its inception stage, growth
and future prospects.
y It also helps in understanding different schemes
of mutual funds. Because my study depends
upon prominent funds in India and their
schemes like equity, income, balance as well as
the returns associated with those schemes.
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ABOUT COMPANY:ABOUT COMPANY:y VISIONTo be a dominant player in the Indian mutual fund space, recognizedfor its high levels of ethical and professional conduct and acommitment towards enhancing investor interests.
y ORGANIZATION AND MANAGEMENT
HDFCAsset Management Company Ltd (AMC) was incorporated
under the CompaniesAct, 1956, on December 10, 1999, and wasapproved to act as anAsset Management Company for the HDFCMutual Fund by SEBI vide its letter dated June 30, 2000.
The registered office of theAMC is situated at Ramon House, 3rdFloor,H.T. Parekh Marg, 169, Backbay Reclamation, Churchgate,Mumbai - 400 020.
The present equity shareholding pattern of theAMC is as follows :
Housing Development Finance Corporation Limited 60
Standard Life Investments Limited 40
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PRODUCTSPRODUCTS
y Equity Funds
y HDFC Growth Fund
y HDFC Long TermAdvantage Fund
y HDFC Index Fund
y HDFC Equity Fund
y HDFC Capital Builder Fund
y HDFC Tax saver
y HDFC Top 200 Fund
y HDFC Core & Satellite Fund
y HDFC Premier Multi-Cap Fund
y HDFC Long Term Equity Fund
y HDFC Mid-Cap Opportunity Fund
y Balanced Funds
y HDFC Children's Gift Fund Investment
Plan
y HDFC Children's Gift Fund Savings Plan
y HDFC Balanced Fund
y HDFC Prudence Fund
y Debt Funds
y HDFC Income Fund
y HDFC Liquid Fund
y HDFC Gilt Fund Short Term Plan
y HDFC Gilt Fund Long Term Plan
y HDFC Short Term Plan
y HDFC Floating Rate Income Fund ShortTerm Plan
y HDFC Floating Rate Income Fund LongTerm Plan
y HDFC Liquid Fund - PREMIUM PLAN
y HDFC Liquid Fund - PREMIUM PLUSPLAN
y HDFC Short Term Plan - PREMIUMPLAN
y HDFC Short Term Plan - PREMIUM PLUSPLAN
y HDFC Income Fund Premium Plan
y HDFC Income Fund Premium plus Plan
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Working of Mutual Fund.Working of Mutual Fund.
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STRUCTURE OF A MUTUAL
FUND:
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MutualMutual Fund InvestmentFund Investment
StrategiesStrategiesy Systematic Investment Plan (SIPs):
These are best suited for young people who have started their careersand need to build their wealth.
y SystematicWithdrawal Plan (SWPs):
These plans are best suited for people nearing retirement. In theseplans an investor invests in a mutual fund scheme and is allowed towithdraw a fixed sum of money at regular intervals to take care of expenses.
y SystematicTransfer Plan (STPs):
They allow the investors to transfer on a periodic basis a specifiedamount from one scheme to another within the same fund familymeaning two schemes belonging to the same mutual fund.
y One Time Investment:
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Mutual Funds relative to other comparable
financial products:Schemes Return Convenience Safety Volatility Liquidity
Equity HighModerate
Low High High
FI Bonds Moderate
HighHigh Moderate Moderate
Corporate
Debentures
ModerateLow
Moderate Moderate Low
Company fixed ixDeposits
ModerateModerate
Low Low Low
Bank Deposits Low
HighHigh Low High
PPF Moderate
HighHigh Low Moderate
Life Insurance LowModerate
High Low Low
Gold ModerateLow
High Moderate Moderate
Real Estate HighLow
Moderate High Low
Mutual Funds HighHigh
High Moderate High
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INTRA HDFC MUTUAL FUND SCHEMES PERFORMANCE
COMPARISION:
My Anal
ysis on HDFC schemes:-For the calculation of statistical variables, which are linked
to the market, we are calculating a common index. They
are:-HDFC GROWTH FUND BSE SENSEX
HDFC EQUITY FUND S&P CNX 500
HDFC TOP 200 BSE 200
HDFC CAPITAL BUILDER FUND S&P CNX 500
HDFC CORE AND SATELLITE FUND BSE 200
HDFC PREMIER MULTI CAP FUND S&P CNX 500
HDFC LONG TERM ADV. FUND BSE SENSEX
HDFC TAX SAVER S&P CNX 500
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CALCULATIONS:CALCULATIONS:I took Eight schemes ofHDFC of same market (Equity Diversified),
because we have to analyze all this with respect to market risk, hence
it is mandatory to choose same risk profiles scheme.
SCHEME SD BETA RP SR RANK-SR TR RANK-TR
HDFCGROWTH
FUND
10.90 0.9820 8.67 0.80 2 8.83 2
HDFC EQUITY
FUND
11.60 0.9390 7.54 0.65 3 8.03 3
HDFC TOP 200 10.90 0.9030 10.49 0.96 1 11.62 1
HDFC CAPITAL
BUILDER FUND
11.00 0.8690 -0.06 0.01 8 0.07 8
HDFC CORE AND
SATELLITE FUND
12.20 1.002 -1.53 0.13 5 1.53 6
HDFC PREMIER
MULTI CAP FUND
12.10 0.9740 1.53 0.13 6 1.57 5
HDFC LONG
TERM ADV. FUND
10.50 0.9350 -2.20 0.21 4 2.35 4
HDFC TAX SAVER 11.10 0.8890 -0.17 0.02 7 0.19 7
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ANALYSIS:ANALYSIS:
y Here all funds are of the equity-diversified
category.HDFC Top 200 has highest Sharpe
ratio among all these funds. More the value
of Sharpe Ratio we ranked them higherSimilarly, we can analyze all schemes.
y On the basis of Treynor Ratio also HT200
is ranked first.Higher the value of Treynor
ratio, higher the rank .We can relatively
analyze all the schemes among each other.
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FUND HOUSE SCHEME R-SR R-TR R ALPHA 0VER RANK
SBI MUTUAL
FUNDMAGNUM EQUITY 8 8 1 5
SBI MUTUAL
FUND
MAGNUM
GLOBA
L
15 15 15 15
SBI MUTUAL
FUND
MAGNUM
CONTRA7 5 9 8
RELIANCE
MUTUAL FUNDEQUITY 11 9 13 11
RELIANCE
MUTUAL FUND
EQUITY
OPPORTUNITY13 13 10 13
RELIANCE
MUTUAL FUNDGROWTH 2 6 2 3
HDFC MUTUALFUND
EQUITY 6 4 8 6
HDFC MUTUAL
FUNDGROWTH 4 3 6 4
HDFC MUTUAL
FUNDTOP 200 3 1 5 2
UTI MUTUAL
FUNDMASTERSHARE 10 7 12 10
UTI MUTUAL
FUND MA
STER VA
LUE 14 14 14 14
UTI MUTUAL
FUNDEQUITY 12 12 11 12
BIRLA MUTUAL
FUND
FRONTLINE
EQUITY1 2 3 1
BIRLA MUTUAL
FUNDINDIA GENNEXT 9 11 7 9
BIRLA MUTUAL
FUNDMID CAP 5 10 4 7
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ANALYSIS:ANALYSIS:
I have taken three-year return, standard deviation and beta of all the
schemes from web site and magazine.
We ranked all schemes according to Sharpe Ratio, Treynor Ratio,
Alpha, .Here we already suppose that there are only three products,
hence the sum of the all five ranking will tell something.
Frontline equity of birla sunlife Mutual Fund ranked 1 in all measure
hence this scheme will get total sum of rank 6. Similarly, we calculate
the sum of the respective scheme.
Lowest value of the sum has ranked first. The rest schemes ranked
accordingly. 6 is the lowest value among these, hence it ranked first.
Similarly, we ranked all schemes.
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OVERALL RANKOVERALL RANKFund House TotalTally Over Rank
SBI Mutual Fund 5+15+18 38
Reliance Mutual
Fund
11+13+3 27
HDFC Mutual
fund
6+4+2 12
UTI Mutual Fund 10+14+12 36
Birla Sunlife
Mutual
Fund
9+7+1 17
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There are only three product of each fund house,then the weighted ranking of scheme will giveweight to the fund house ranking.Suppose HDFC mutual fund get weightage by theirschemes (4 by Growth, 2 by Top 200 and by 6
Equity), and its weighted rank will be decided by thesum of these ranking.Similarly, we get the sum of all fund house schemesand evaluate the weighted ranking of the fundhouse.HDFC Mutual Fund has got least value of the
sum, hence it ranked first among these five-fundhouses. Rest fund house ranked accordingly.
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Findings:Findings:
y Study found that more young people are likely to involved in
financial activities. They more frequently visit banks and meet
financial advisors.
y Study shows professional advisors are considered to be more
reliable source of mutual funds information, not because they
provide human touch to investor but others are not aggressively
proposed, advertised, availed and used .
y An another observation made by study was , many a time advisors
themselves do not get timely updates fromAMCs. This leads them
not to offer some of schemes those may give good returns
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RECOMMENDATIONS:RECOMMENDATIONS:y
There are numbers of traditional ways of saving. They giveguaranteed return with low risk.High risk associated investment
options was not considered a right decision. India is a young
country having a considerably big part of young people. They need a
right direction for investment options.
y We need proper management of advisory services, more schemes,
financial advisors and institutions to cater untouched markets.
y Industry need to revise its business strategy. Investors perception
is not prioritized yet. Instead of completing targets, advisorsworking under institutions should consider the requirement of
investors. We need to change pattern of selling mutual funds
schemes.
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CONCLUSION:y Investors need a financial intermediary who provides the required
knowledge and professional expertise on successful investing.
y As the investor always try to maximize the returns and minimize
the risk. Mutual fund satisfies these requirements by providing
attractive returns with affordable risks.
y The fund industry has already overtaken the banking industry, more
funds being under mutual fund management than deposited with
banks.
y The rising stock market has also instilled greater confidence among
fund investors who are investing more into the market through the
MF route than ever before.
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THANK YOUTHANK YOU
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