A

PROJECT REPORT
ON
COMPARATIVE ANALYSIS OF MUTUAL FUNDS
{ICICI MUTUALFUNDS & AXIS MUTUAL FUNDS}
SUBBMITTED TO
THE University Of Mumbai
IN PARTIAL FULFILLMENT FOR THE AWARD
OF THE DEGREE OF BACHELOR OF MANAGEMENT STUDIES
ACADEMIC YEAR 2015-2016
SUBMITTED BY
AKSHAY SANJAY KADAM
SEAT NO.1247313
UNDER THE GUDIANCE OF
PROF.HASIT KUMAR NAGARIYA
THE SIA COLLEGE OF HIGHER EDUCATION
P-88, MIDC RESIDENTIAL ZONE, SAGARLI
DOMBIVILI (EAST)

ACADEMIC YEAR 2015-2016

DECLARATION
I hereby declare that the project titled Comparative Analysis of Mutual
Funds {ICICI Mutual Funds & AXIS Mutual Funds}submitted by me is based
on actual work carried out by me under the guidance and supervision of Prof
Mr. HASIT KUMAR NAGARIYA
The information submitted in this project work is true and original to
the best of my knowledge and belief.

Akshay sanjay kadam

SEAT NO .1247313

ACKNOWLEDGEMENT
It is a matter of great pleasure of me in submitting the project report on
Comparative Analysis of Mutual Funds {ICICI Mutual Funds & AXIS Mutual
Funds} for the fulfillment of the requirement of my course.
I am thankful to all those who have helped me in preparing this report.
Words seem to be inadequate to express my sincere thanks to Prof .Mr.HASIT
KUMAR NAGARIYA for his valuable guidance, constructive criticism,
untiring efforts and immense encouragement during the entire course of the
study to which my efforts have been rewarded.
I express my sincere thanks to our Principal Dr. Mrs.
Padmaja Arvind and our Librarian Mrs. Bharti Rao for giving me all the
facilities during my project and helping and guiding me during my research
work.
I also want to thank all my friends and parents who have
supported me and gave their timely guidance.

CERTIFICATE

This is to certify thatMr.AKSHAY SANJAY

KADAM .student of BMS (Bachelor of management studies) semester v
(2015-2016) Seat no.1247313 Has successfully completed his project work
onCOMPARATIVE ANALYSIS OF MUTUAL FUNDS {ICICI
MUTUALFUNDS & AXIS MUTUAL FUNDS}Under the guidance of Prof.
HASIT KUMAR NAGARIYA as per Mumbai University syllabus.

COURSE CO. ORDINATOR

PROJECT GUIDE

EXTERNAL EXAMINAR

PRINCIPAL

INDEX
SR NO

TOPIC

PAGE NO.

CHAPTER

Introduction

NO 1

Background of the study

CHAPTER
NO 2

Literature review

8 41

Research & Methodology

42 51

Analysis & findings

52 59

Conclusion

60

5.1

Bibliography

61

5.2

Annexure

62

CHAPTER

6-7

NO 3
CHAPTER
NO 4
CHAPTER
NO 5

CHAPTER
NO.1
INTRODUCTION

About the project

Title of study
The present study is titled COMPARATIVE ANALYSIS OF MUTUAL
FUNDS {ICICI MUTUALFUNDS & AXIS MUTUAL FUNDS}
The study is made by reference to ICICI Mutual Funds and AXIS Mutual funds

Objective of the study

To study the Mutual funds.
To study and compare the products of ICICI Mutual Funds and AXIS
Mutual funds.

Scope of the study:

The scope of study is limited up to ICICI Mutual Funds and AXIS Mutual
funds.
RESEARCH METHODOLOGY
Source of data:
Primary data:
The primary data was collected by the means of interview. The questionnaire
contained 10 questions which reflect the products and types are offered in the
mutual fund industry. They are analysed in form of graph and tables in the
interpretation.

Secondary data:
In order to have proper understanding of the products and types of mutual
funds provided in India a study was done from the various sources such as
reference books, newspapers, official websites and internet.

CHAPTER
NO.2
LITERATURE REVIEW

INTRODUCTION
A mutual fund is a type of professionally managed collective investment
scheme that pools money from many investors to purchase securities. While
there is no legal definition of the term "mutual fund", it is most commonly
applied only to those collective investment vehicles that are regulated and sold
to the general public. They are sometimes referred to as "investment
companies" or "registered investment companies." Most mutual funds are
7

"open-ended," meaning stockholders can buy or sell shares of the fund at any
time. Hedges are not considered a type of mutual fund.
Mutual funds are generally classified by their principal investments. The four
main categories of funds are money market funds, bond or fixed income funds,
stock or equity funds and hybrid funds. Funds may also be categorized as index
or actively managed.

Investors in a mutual fund pay the funds expenses, which reduce the fund's
returns/performance. There is controversy about the level of these expenses. A
single mutual fund may give investors a choice of different combinations of
expenses (which may include sales commissions or loads) by offering several
different types of share classes. 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.
HISTORY:
The first mutual funds were established in Europe. One researcher credits a
Dutch merchant with creating the first mutual fund in 1774. The first mutual
fund outside the Netherlands was the Foreign & Colonial Government Trust,
8

which was established in London in 1868. It is now the Foreign & Colonial
Investment Trust and trades on the London stock exchange.
MUTUAL FUNDS IN INDIA

Until 1981, Unit Trust of India (UTI) was the sole mutual fund in the country.
This was due to the restrictive policies adopted by the Government of India with
regards to the financial services industry.

STRUCTURE OF A MUTUAL FUND:

The formation and operation of the mutual funds are governed by the Securities
Exchange Board of India Mutual Funds Regulations 1993. Later it was replaced
by the Securities Exchange Board of India Mutual Funds Regulations 1996. The
mutual fund comprises four separate entities, namely. Sponsor, mutual fund
trustee, asset Management Company and the custodian. They are assisted by
independent entities such as banks, registrars and the transfer agents.

sponsor
Board of
trustees

Mutual funds
Holds unit
holder Enter
complaint to
SEBI

AMC

Custodian

Floats and
Manages new
schems

Custodional
services

SPONSOR
A mutual fund is to be establishes by a sponsor and registered with the SEBI. A
sponsor can be any person acting alone or in combination with a corporate body.
However, a sponsor should have the following requirements:
Should have a sound track record.
Should have been carrying on business in financial services for a period
of not less than five years.
Should have positive net worth in all preceding five years.
Should have profits after providing for deprecations, interest and tax in
three out of the immediately preceding five years including the fifth year.
10

 Should contribute at least 40% of the net worth of the Asset Management
Company (AMC).
Should not have been guilty of fraud or convicted for any offence.
TRUSTEE
Mutual funds are establishing in the form of a trust. The trustees should be
persons of ability, integrity and standing. Two third of them should be
independent person (1998). A trustee should not be an associate or a subsidiary
or be associated with a sponsor in any manner. He should be appointed with the
prior approval of the SEBI. The meeting of the trustees shall be held at least
once in two calendar months and at least six such meetings shall be held in
every year. An AMC or any of its officers / employees is not eligible to act as
trustees to any mutual funds.
The trustees have the responsibilities to safeguard the interest of the
investors. They have wide powers to overview, supervise and monitor the
activities of an Asset Management Company. If the conduct of the business is
not in compliance with SEBIs regulations, they can take remedial measures
against an Asset Management Company as required. They have powers to
dismiss an Asset Management Company. Nevertheless, it should be approved by
SEBI.
Asset Management Company
A sponsor or trustee appoints an AMC, and it should be approved by the board.
An appointee can be terminated by a majority of trustees or 75% of the unit
holders of the schemes. The AMC should have a sound track record, general
reputation and fairness in transaction. The director of AMC should possess
adequate professional experiences in finance and financial services. An AMC
should have a net worth of not less than Rs. 10 core. Each director of an Asset
Management Company is required to give the details of his dealings in
securities with the trustees, on a quarterly basis.
An Asset Management Company manages the various schemes of mutual
fund with the help of a team of professionals with adequate experiences. They
carry out market research for building the portfolio of a particular mutual fund.
An Asset Management Company takes all the reasonable steps, exercise and due
diligence to ensure that investment of funds pertaining to any scheme is not
contrary to SEBIs regulations and trust deed.
Custodian
Mutual funds have a custodian. Custodians carry out custodial services
for the various schemes of a fund. It is their duty to send intimation of the
custodial services rendered to the board. A custodian, or its director, or partners
11

will not be directly or indirectly associated with any in any way. A custodian
shall not be appointed in case a sponsor or its associates hold 50% or more of
the voting rights of the share capital of a custodian, or where 50% or more
directors of the custodians represents the interest of the sponsor or its associates.

Operations of mutual funds:

Mutual fund offers unit or shares to the public by issuing an offer
document or prospectus and collecting the funds. The money collected is
invested as per the investment objectives stated in the offer documents/
prospectus. Mutual funds generally invest in a wide range of securities in
different industries with the aim of reducing the risk exposure. The investment
should be within the norms prescribed by SEBI.
An expert fund manager is employed to manage each scheme. He carries
out the specific task of purchasing and selling shares and debentures at the
12

appropriate time in the market. Mutual fund managers are under the control of
the board of trustees of the fund. They guide the operation of the fund.
All the mutual fund websites allow investors to download the
application forms and offer document of their products. Some of the mutual

funds permits downloading other transactions forms such as redemption slips

and transfer form as well.
Mutual funds generally publish their net assets value every Friday.
After the annual accounts are audited, the mutual funds ascertain the income
earned by them they distribute at least 90% of their income by the way of
dividend to the unit holders. After the duration of the scheme is over, mutual
funds sell the securities pertaining to the schemes. It redeems the unit by paying
the investors their capital and also plays capital gains according to the number
of units held by the investors.

DO'S AND DON'TS OF MUTUAL FUNDS INVESTING:

Investing in mutual funds is a good habit. The best benefit of mutual funds is
that they allow diversification of investment at a lesser cost than could be
possible for you as an individual investor. Holding too many funds is not good.
Your choice of type of fund must depend on your investment goal, time horizon,
and risk appetite and so on. Below we discuss a set of do's and don'ts for
investment in mutual funds.
Don't: Invest in a fund without reviewing its performance and offer
document
Don't simply invest in a fund because your friend has bought it recently or it
was recommended on a website or TV program. In a market boom most funds
will do well but that doesn't suggest that all of them will consistently perform.
Do: Select a fund with proven track record and go through its offer
document
13

The Scheme Information Document is the rule book of the fund. It is the most
reliable source for getting information on facts such as the fund's objective of
investment, what kind of shares it will invest in, proportion of investment in
various market caps in case of an equity fund, expense ratio and so on. Also
read the most recent Fact Sheet of the fund to get an idea of the current
composition of the fund's holdings and current fund manager. You can find all
relevant documents on the mutual fund's website.
Don't: Blindly chase a fund for its current performance or overlook
another for its lacklustre performance in the near past.
Track the fund's performance in a market boom and market crash. Invest in a
fund with at least 5 years of performance. Stay away from NFOs if you are a
new to mutual funds. Most new funds don't really offer anything new; they just
have fancy names with slight variation in the portfolio composition. Check the
fund manager's credibility. Is he/she an experienced one? Are there others funds
he/she has been managing successfully? Is the AMC known for a good set of
fund managing team and well performing funds?
Don't: Panic
Don't check your fund's NAV every day or week or even month. NAV may
fluctuate in the short term but all that matters is the percentage gain or loss.
Over a period short term losses cancel out with gains. So keep your cool and
don't rush to sell your units fearing you'll lose your money provided you are
confident that you made the investment choice after proper research.
Do: Hold your peace
Monitor your fund's performance once a year. Withdraw from it only if its
performance has been poor compared to its peers for over a year or so owing to
fundamental factors such as change in composition of portfolio, change in fund
manager, etc.
Don't: Invest huge amounts all at once
If you're making a lump sum investment, don't put all the money allocated for a
goal into a fund all at once. You risk buying units at a costlier price and possibly
your whole investment if in case it is a bad fund.
Do: Invest via SIPs

14

Avail the benefit of rupee cost averaging by investing amounts periodically

through Systematic Investment Plans. If you must invest in lump sum break the
amount up and invest after a time interval.
Don't: Simply chase performance
That a fund has been performing consistently does guarantee that its
performance will be great when you want to redeem units because markets are
subject to volatility.

Do: Invest according to your risk profile

Your risk appetite will depend on your investment goal, time horizon and age. If
you need the money in say less than 3 years and if it meant for an important
goal that cannot missed like your child's education you might consider investing
in a balanced fund instead of an equity fund. Similarly if you are a senior citizen
you might prefer less allocation to equity in your portfolio. Unless you are in
need of regular income choose to reinvest dividends.
Don't: Ignore expenses
Mutual funds charge fee from investors for covering management expenses,
transaction charges and so on. Funds also charge an exit load for withdrawal
before a specified time period. Although charges alone don't matter much, if you
must choose among equally well performing funds go with the one having
lower expense ratio.
Do: Compare expense ratios
Especially in case of index funds which are passively managed expense ratio is
a determinant for fund selection. Index funds simply track an index so the
returns of all funds tracking a particular index are expected to be identical. Here
you can choose the fund with lower expense ratio. In the long term high
expense ratios can eat away a significant portion of you returns due to the effect
of compounding.

15

TYPES OF MUTUAL FUNDS:

The mutual fund industry of India is continuously evolving. Along the way,
several industry bodies are also investing towards investor education. Yet,
according to a report by Boston Analytics, less than 10% of our households
consider mutual funds as an investment avenue. It is still considered as a highrisk option. In fact, a basic inquiry about the types of mutual funds reveals that
these are perhaps one of the most flexible, comprehensive and hassle free
modes of investments that can accommodate various types of investor needs.
Various types of mutual funds categories are designed to allow investors to
choose a scheme based on the risk they are willing to take, the investable
amount, their goals, the investment term, etc

Let us have a look at some important mutual fund schemes under the
following three categories based on maturity period of investment:
I. Open-Ended - This scheme allows investors to buy or sell units at any point
in time. This does not have a fixed maturity date.
1. Debt/ Income - In a debt/income scheme, a major part of the investable fund
are channelized towards debentures, government securities, and other debt
16

instruments. Although capital appreciation is low (compared to the equity

mutual funds), this is a relatively low risk-low return investment avenue which
is ideal for investors seeing a steady income.
2. Money Market/ Liquid - This is ideal for investors looking to utilize their
surplus funds in short term instruments while awaiting better options. These
schemes invest in short-term debt instruments and seek to provide reasonable
returns for the investors.
3. Equity/ Growth - Equities are a popular mutual fund category amongst retail
investors. Although it could be a high-risk investment in the short term,
investors can expect capital appreciation in the long run. If you are at your
prime earning stage and looking for long-term benefits, growth schemes could
be an ideal investment.
3. i. Index Scheme - Index schemes is a widely popular concept in the west.
These follow a passive investment strategy where your investments replicate the
movements of benchmark indices like Nifty, Sensex, etc.
3. Ii. Sectoral Scheme - Sectoral funds are invested in a specific sector like
infrastructure, IT, pharmaceuticals, etc. or segments of the capital market like
large caps, mid-caps, etc. This scheme provides a relatively high risk-high
return opportunity within the equity space.
3. Iii. Tax Saving - As the name suggests, this scheme offers tax benefits to its
investors. The funds are invested in equities thereby offering long-term growth
opportunities. Tax saving mutual funds (called Equity Linked Savings Schemes)
has a 3-year lock-in period.
4. Balanced - This scheme allows investors to enjoy growth and income at
regular intervals. Funds are invested in both equities and fixed income
securities; the proportion is pre-determined and disclosed in the scheme related
offer document. These are ideal for the cautiously aggressive investors.

II. Closed-Ended - In India, this type of scheme has a stipulated maturity

period and investors can invest only during the initial launch period known as
the NFO (New Fund Offer) period.
1. Capital Protection - The primary objective of this scheme is to safeguard the
principal amount while trying to deliver reasonable returns. These invest in
17

high-quality fixed income securities with marginal exposure to equities and

mature along with the maturity period of the scheme.
2. Fixed Maturity Plans (FMPs) - FMPs, as the name suggests, are mutual
fund schemes with a defined maturity period. These schemes normally comprise
of debt instruments which mature in line with the maturity of the scheme,
thereby earning through the interest component (also called coupons) of the
securities in the portfolio. FMPs are normally passively managed, i.e. there is no
active trading of debt instruments in the portfolio. The expenses which are
charged to the scheme are hence, generally lower than actively managed
schemes.
III. Interval - Operating as a combination of open and closed ended schemes, it
allows investors to trade units at pre-defined intervals.
(A)

By Structure

Open-Ended Schemes
These do not have a fixed maturity. You deal with the Mutual Fund for your
investments and redemptions. The key feature is liquidity. You can conveniently
buy and sell your units at Net Asset Value (NAV) related prices, at any point of
time.
Schemes that have a stipulated maturity period (ranging from 2 to 15 years) are
called close ended schemes. You can invest in the scheme at the time of the
initial issue and thereafter you can buy or sell the units of the scheme on the
stock exchanges where they are listed. The market price at the stock exchange
could vary from the schemes NAV on account of demand and supply situation,
unit holders expectations and other market factors. One of the characteristics of
the close-ended schemes is that they are generally traded at a discount to NAV;
but closer to maturity, the discount narrows. Some close-ended schemes give
you an additional option of selling your units to the
Mutual Fund through periodic repurchase at
NAV related prices. SEBI Regulations ensure that at least one of the two exit
routes is provided to the investor under the close ended schemes.
Interval Schemes
These 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
predetermined intervals at NAV related prices.
By investment objectives
18

Growth schemes
Aim to provide capital appreciation over the medium to long term. These
schemes normally invest a majority of their funds in equities and are willing to
bear short term decline in value for possible future appreciation.
These schemes are not for investors seeking regular income or needing their
money back in the short term.
Ideal for:
Investors in their prime earning years.
Investors seeking growth over the long term.
Income scheme
Aim to provide regular and steady income to investors. These schemes
generally invest in fixed income securities such as bonds and corporate
debentures.
Capital appreciation in such schemes may be limited.

Ideal for:
Retired people and others with a need for capital stability and regular
income.
Investors who need some income to supplement their earnings.
Balanced Schemes
Aim to provide both growth and income by periodically distributing a part of
the income and capital gains they earn. They invest in both shares and fixed
income securities in the proportion indicated in their offer documents. In a
rising stock market, the NAV of these schemes may not normally keep pace or
fall equally when the market falls.
Ideal for:
Investors looking for a combination of income and moderate growth.
Money Market / Liquid Schemes
Aim to provide easy liquidity, preservation of capital and moderate income.
These schemes generally invest in safer, short term instruments such as treasury
bills, certificates of deposit, commercial paper and interbank call money.
Returns on these schemes may fluctuate, depending upon the interest rates
prevailing in the market.
19

Ideal for:
Corporates and individual investors as a means to park their surplus funds
for short periods or awaiting a more favourable investment alternative.
Tax Saving Schemes (Equity Linked Saving
Scheme - ELSS)
These schemes offer tax incentives to the investors under tax laws as prescribed
from time to time and promote long term investments in equities through
Mutual Funds.

Ideal for:
Investors seeking tax incentives.
Special schemes
This category includes index schemes that attempt to replicate the performance
of a particular index such as the BSE Sensex, the NSE 50 (NIFTY) or sector
specific schemes which invest in specific sectors such as Technology,
Infrastructure, Banking, Pharma etc.
Besides, there are also schemes which invest exclusively in certain segments of
the capital market, such as Large Caps, Mid-Caps, and Small
Caps, Micro Caps, 'A' group shares, shares issued through Initial Public
Offerings (IPOs), etc.
Index fund schemes are ideal for investors who are satisfied with a return
approximately equal to that of an index.
Sectoral fund schemes are ideal for investors who have already decided to
invest in a particular sector or segment.
Fixed Maturity Plans (FMPs)
Fixed Maturity Plans (FMPs) are investment Schemes floated by mutual funds
and are close ended With a fixed tenure, the maturity period Ranging from one
month to three/five years. These plans are predominantly debt-oriented, while
some of them may have a small equity component.
The objective of such a scheme is to generate steady returns over a fixedmaturity period and protect the investor against market fluctuations.
FMPs are typically passively managed fixed income schemes with the fund
manager locking into investments with maturities corresponding with the
maturity of the plan. FMPs are not guaranteed products.
Exchange Traded Funds
Exchange Traded Funds are essentially index funds that are listed and traded on
exchanges like stocks. Globally, ETFs have opened a whole new panorama of
20

investment opportunities to retail as well as institutional investors. ETFs enable

investors to gain broad exposure to entire stock markets as well as in specific
sectors with relative ease, on a real-time basis and at a lower cost than many
other forms of investing.
An ETF is a basket of stocks that reflects the composition of an index, like
S&P CNX Nifty, BSE
Sensex, CNX Bank Index, CNX PSU Bank Index, etc. The ETF's trading value
is based on the net asset value of the underlying stocks that it represents. It can
be compared to a stock that can be bought or sold on real time basis during the
market hours. The first ETF in India, Benchmark Nifty Bees, opened for
subscription on December 12, 2001 and listed on the NSE on January 8, 2002.
Capital Protection Oriented Schemes
Capital Protection Oriented Schemes are schemes that endeavour to protect the
capital as the primary objective by investing in high quality fixed income
securities and generate capital appreciation by investing in equity / equity
related instruments as a secondary objective. The first Capital Protection
Oriented Fund in India, Franklin Templeton Capital Protection Oriented Fund
opened for subscription on October 31, 2006.
Gold Exchange Traded Funds
Gold Exchange Traded Funds offer investors an innovative, cost-efficient and
secure way to access the gold market. Gold ETFs are intended to offer investors
a means of participating in the gold bullion market by buying and selling units
on the Stock Exchanges, without taking physical delivery of gold. The first
Gold ETF in India, Benchmark GETF, opened for subscription on February 15,
2007 and listed on the NSE on April 17, 2007.
Quantitative Funds
A quantitative fund is an investment fund that selects securities based on
quantitative analysis.
The managers of such funds build computer based models to determine whether
or not an investment is attractive. In a pure "quant shop" the final decision to
buy or sell is made by the model. However, there is a middle ground where the
fund manager will use human judgment in addition to a quantitative model. The
first Quant based Mutual Fund Scheme in India, Lotus Agile Fund opened for
subscription on October 25, 2007.
Fund investing Abroad
With the opening up of the Indian economy, Mutual Funds have been permitted
to invest in foreign securities/ American Depository Receipts (ADRs) / Global
Depository Receipts (GDRs). Some of such schemes are dedicated funds for
21

investment abroad while others invest partly in foreign securities and partly in
domestic securities. While most such schemes invest in securities across the
world there are also schemes which are country specific in their investment
approach.
Funds of Funds
Fund of Funds are schemes that invest in other mutual fund schemes. The
portfolio of these schemes comprise only of units of other mutual fund schemes
and cash / money market securities/ short term deposits pending deployment.
The first FOF was launched by Franklin Templeton Mutual Fund on October 17,
2003.
Fund of Funds can be Sector specific e.g. Real Estate FOFs, Theme
specific e.g. Equity FOFs, Objective specific e.g. Life Stages FOFs or Style
specific e.g. Aggressive/ Cautious FOFs etc. Please bear in mind that any one
scheme may not meet all your requirements for all time. You need to place your
money judiciously in different schemes to be able to get the combination of
growth, income and stability that is right for you. Remember, as always, higher
the return you seek higher the risk you should be prepared to take.

Net asset value or NAV

Net Asset Value is the market value of the assets of the scheme minus its
liabilities. The per unit NAV is the net asset value of the scheme divided by the
number of units outstanding on the valuation date.
Everything you buy has a price, and this is true for investing too. But what is the
price of a mutual fund? How much do you need to pay to invest in a fund's
scheme? This amount will depend on the fund's net asset value or NAV, which is
the price at which the fund is bought and sold in the open market.
The NAV represents the price of one unit of the mutual fund. For example, if a
fund's NAV is Rs 20 and you want to invest Rs 10,000, you will be allotted 500
units in the fund.

22

Calculation

The NAVs of funds are reported widely in newspapers and investment portals.
In fact, open-ended funds are mandated to disclose their NAVs on a daily basis
while close-ended schemes usually disclose their NAVs on a weekly basis.
What constitutes a fund's NAV?
The asset allocation mix of a mutual fund includes securities and cash.
Securities comprise of equities, bonds and other debt instruments. The values of
these securities change at every trading interval and so does the NAV of the
mutual fund. The NAV is the total market value of all the assets held in the
mutual fund portfolio less the liabilities, divided by all the outstanding units.
The market value of the investments is calculated according to the last traded or
closing price of the securities.
Usually, the calculation of an NAV is tedious during trading hours as the price
of the underlying holdings (especially stocks) keeps changing. Though it is
theoretically possible to calculate the NAV during trading hours, it is bound to
change the next minute. Given this, the NAVs are usually declared after market
23

closing. The costs and expenses of the fund, such as management fee and
operating expenses (registrar and transfer agent fee, marketing and distribution
fee, audit fee and custodian fee) are deducted while calculating the NAV.
The NAV of an open-ended fund does not state whether a fund is overpriced or
under-priced. In other words, a fund with a high NAV does not mean that it is
more expensive in relation to a fund that has a low NAV. It only indicates the
market value of the investment portfolios, and has nothing to do with valuation
terminology of premium or discount.
Closed-ended funds issue a fixed number of units that are traded on the stock
exchanges or in the over-the-counter market. Typically, such funds do not trade
at their NAVs and their prices tend to generate premium or discount relative to
their NAVs due to the demand and supply factors.

Uses of NAV
The NAV helps in assessing the performance of the fund. Various analysis tools
like point-to-point return, Compound Annual Growth Rate and Return on
investment, are derived using the NAV of the fund. Moreover, advanced
analysis of risk-adjusted returns, such as Sharpe and Trey nor ratios, alpha and
beta are not possible without the NAV.
A fund's NAV helps the investors to assess the worth of their investments and
determine how the value of the investments has moved over time. For instance,
in 2010, you purchased 1,000 units of a fund at Rs 15, so your investment was
Rs 15,000. After two years, the NAV rises to Rs 20. This means that the value of
your investment has grown to Rs 20,000 and if you redeem the units now, you
will make a profit of Rs 5,000. Moreover, the base of investment strategies
like SIP, SWP and STP rests on the NAV of the fund.
24

Factors influencing the NAV:-

Load and no load factor:In a no load factor fund, an Asset Management Company bears most of the
expenses, and initial NAVs tend be closer to the issue priceas compared to
those of a load scheme. The repurchase price of units of mutual funds of (Unit
Trust of India) UTI is determined as follows:

Valuation:
SEBI regulations prescribed that closing prices of securities are to be taken for
the purpose of valuation. Sometimes the fund may not through a deal at the
closing price. Further, to assign a realizable value, funds may use the lowest
traded price for the day for NAV calculation. The extent of traded volumes in
securities could also present problems. Adoption of prices established through
low trading volumes relative to the fund holdings, could inflate the NAV if the
prices are higher.

Non- traded Debt instrument:

The SEBI regulation state that all traded securities equities and debt are
to be valued at market value. In case of non traded securities, the valuation
process becomes difficult in hybrid securities like convertible debt. In
convertible debt, the debt and the equity component have to be valued
separately. Accordingly to SEBI, the non-traded debt instruments are to be
valued on a yield-to-maturity basis. The discounting rate depends on the
25

prevailing interest rate and the opportunity cost of the funds. If the discounting
rate is not correctly assigned, the discounting factor would be high and the NAV
would be low.

Debt-equity mix:
The Debt equity mix also affects the NAV. In rising interest situation, if the debt
component is high, the NAV will be low and vice-versa. Thus in this case of
balanced fund or debt fund, an investor should look into the market interest rate
as well.

Sales price
Is the price you pay when you invest in a scheme? Also called Offer Price. It
may include a sales load.
Repurchase price
Is the price at which units under open-ended schemes are repurchased by the
Mutual fund? Such prices are NAV related.
Redemption price
Is the price at which close-ended schemes redeem their units on maturity? Such
prices are NAV related.

How to Invest In Mutual Fund

26

Step One-Identify your investment needs.

Your financial goals will vary, based on your age, lifestyle, financial
independence, family commitments, level of income and expenses among many
other factors. Therefore, the first step is to assess your needs. Begin by asking
yourself these questions:
(1) What are my investment objectives and needs?
Probable Answers: I need regular income or need to buy a home or finance a
wedding or educate my children or a combination of all these needs.
(2) How much risk am I willing to take?
Probable Answers: I can only take a minimum amount of risk or I am willing to
accept the fact that my investment value may fluctuate or that there may be a
short term loss in order to achieve long term potential gain.
(3) What are my cash flow requirements?
Probable Answers: I need a regular cash flow or I need a lump sum amount to
meet a specific need after a certain period or I dont require a current cash flow
but I want to build my assets for the future.
By going through such an exercise, you will know what you
want out of your investment and can set the foundation for a sound Mutual Fund
Investment strategy.
Step Two- Choose the right Mutual Fund
27

Once you have a clear strategy in mind, you now have to choose which Mutual
Fund and scheme you want to invest in. The offer document of the scheme tells
you its objectives and provides supplementary details like the track record of
other schemes managed by the same Fund Manager. Some factors to evaluate
before choosing a particular Mutual Fund are:
The track record of performance over the last few years in relation to the
appropriate yardstick and similar funds in the same category.
How well the Mutual Fund is organised to provide efficient, prompt and
personalised service.
Degree of transparency as reflected in frequency and quality of their
communications.
Step Three - Select the ideal mix of Schemes.
Investing in just one Mutual Fund scheme may not meet all your investment
needs. You may consider investing in a combination of schemes to achieve your
specific goals.
The following charts could prove useful in selecting a combination of
schemes that satisfy your needs.

AGGRESSIVE PLAN

28

This plan may suit:

Investors in their prime earning years and willing to take more risk.
Investors seeking growth over a long term.
AGGRESSIVE PLAN

This plan may suit:

Investors seeking income and moderate growth
Investors looking for growth and stability with moderate risk.

CONSERVATIVE PLAN
29

This plan may suit:

Retired and other investors who need to preserve capital and earn regular
income.

Step Four - Invest regularly

For most of us, the approach that works best is to invest a fixed amount at
specific intervals, say every month. By investing a fixed sum each month, you
get fewer units when the price is high and more units when the price is low, thus
bringing down your average cost per unit. This is called rupee cost averaging
and is a disciplined investment strategy followed by investors all over the
world. With many open-ended schemes offering systematic investment plans,
this regular investing habit is made easy for you.
Step Fifth - Keep your taxes in mind
As per the current tax laws, Dividend/Income Distribution made by mutual
funds is exempt from Income Tax in the hands of investor. However, in case of
debt schemes Dividend/ Income Distribution is subject to Dividend Distribution
Tax. Further, there are other benefits available for investment in Mutual Funds
under the provisions of the prevailing tax laws. You may therefore consult your
tax advisor or Chartered Accountant for specific advice to achieve maximum
tax efficiency by investing in mutual funds.
Step Sixth Start early
30

It is desirable to start investing early and stick to a regular investment plan.

If you start now, you will make more than if you wait and invest later. The
power of compounding lets you earn income on income and your money
multiplies at a compounded rate of return.
Step Seven- The final step
All you need to do now is to get in touch with a Mutual Fund or your advisor
and start investing. Reap the rewards in the years to come. Mutual Funds are
suitable for every kind of investor whether starting a career or retiring,
conservative or risk taking, growth oriented or income seeking.
Re purchase or back ended load
Is a charge collected by a scheme when it sells the units? Also called, Frontend load. Schemes that do not charge a load are called No Load schemes. Is a
charge collected by a scheme when it buys back the units from the unit holders?
Average annual total return
The SEC requires that mutual funds report the average annual compounded
rates of return for 1-year, 5-year and 10-year periods using the following
formula:
P (1+T) n = ERV
Where:
P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the 1-, 5-, or 10-year periods at the end
of the 1-, 5-, or 10-year periods (or fractional portion).
Turnover
Turnover is a measure of the volume of a fund's securities trading.
It is expressed as a percentage of average market value of the
portfolio's long-term securities. Turnover is the lesser of a fund's
purchases or sales during a given year divided by average longterm securities market value for the same period. If the period is
less than a year, turnover is generally annualized.
Composition of the portfolio:
Every mutual fund publishes their portfolio composition. The portfolio may
consist of equities, debt and money market instruments. Comparing the
proportion of equities and debt in the portfolio with the proportion given in the
31

offer documents helps to find out the deviation, if any. A comparison of the
portfolio components over the years given an idea about the changes made in
the portfolio asset composition. If the equity exposure is larger, the level of risk
would also be high. In a debt fund, the risk is higher if funds are invested in
privately placed corporate debts. However, investments in listed debentures or
government securities lower the risk.
Income Generated:
The gross income of a fund as a percentage of net assets should be analysed. It
is the total income earned in a year, including unrealised appreciation in the
value of investments divided by the net asset. This gives a fair idea about the
funds performance. Likewise the net income as a percentage of the net asset
can also be calculated. This can be compared with the income generated from
the alternative investment avenues. The performance of the fund can be
compared with the benchmark mutual fund index.

Income Composition:
This can be obtained from the annual reports of the mutual funds.
Income may be in the form of dividend, interest, realized gains and other
income. It should be evaluated in relation to the portfolio composition.
In equity fund, a large amount of income from interest indicates
inefficient management. If the income is generated through profit booking in a
debt fund, it signals the poor management of the fund. Likewise, if there is
proportion of income from other source of profits from inter scheme transfer, it
shows that the income is not generated from a particular and it signals a caution
to the investor.
Turnover of the portfolio:
The extent of activity in a schemes portfolio is studied through the portfolio
turnover. Turnover rate is the total value of the investments sold or purchased
during a year divided by the average net assets. Purchase and sale turnover are
separately disclosed in certain schemes. A 100% turnover means that scheme
keeps in the stock portfolio for one year on an average. A 200% turnover
indicates that the stocks are held for six months, whereas 50% turnover
indicates that the stocks are held for 2 years.
32

The turnover rate clearly indicates the activity of fund. A low turnover rate
means that buy and hold strategy is adopted by the fund. High rate of turnover
indicates the active management of the fund. Return is generated through proper
timing of the market but the risk component is high in this type of management.
Average Maturity period of the portfolio:
The average of the years to the maturity of bonds and debentures in
the portfolio of fund is given in the balance sheet of some of the mutual funds.
A portfolio with longer maturity provides immunity to fluctuations. A longer
maturity period is advantageous if the interest rate is declining. But in an
environment of rising interest rate, it is disadvantageous to the investor.
The average yield of all the investment should also be calculated. It
can be compressed with the benchmark index or alternate index. This
comparison gives a better understanding of a performance of the debt fund.
Average of the Price-earnings Ratio:
In an equity fund, the average P/E of the stock in the portfolio
calculated. It can be compared with the P/E of the market index like P/E of the
Sensex. This gives an idea about the valuation commended by the portfolio
stocks. A high P/E ratio indicates a wider market attention received by the
concerned stock and a scope for further capital appreciation.
Beta of the portfolio:
Beta indicates the volatility of the performance of a scheme against the security
market. If beta of a portfolio is equal to one, it indicate that the funds, portfolio
and the market are moving in tandem. A 0.40 beta indicates that a 1% change in
the market performance cause 4% change in the performance of funds
portfolio.
A portfolio with a high value of beta above one performs well in the bull market
but is risky during the bear period and vice versa.

33

REGULATION REGARDING MUTUAL FUND:

Conversion of Close- ended Scheme into Open ended Schemes:
According to Regulations 33 (3) of SEBI (Mutual Fund) Regulations 1996, the
units of the close-ended scheme may be converted into open-ended scheme, if
the offer document of such schemes discloses the option and the period of the
such conversion of the unit holders are provided with an option to redeem their
units in full. Before the conversion, a draft of the communication to unit holder
shall be submitted to SEBI, which shall include the following:
a) A latest portfolio of scheme in the format prescribed for half year
disclosures, the details of financial performance of a schemesince
inception in the manner prescribed under the standard offer and a
document along with comparison with appropriate bench marks.
b) The addendum to the offer document detailing the modification made in
the scheme (if any).
Further, when a scheme is re-opened for fresh subscription, the
disclosures contained in the offer document of a scheme should be revised and
updated.
Moreover, the unit holders shall be given a period of at least 30 days for
the purpose of exercising the exit option. The unit holders who opt to redeem
their holdings in part or full, shall be allowed to exit at the net asset value
applicable for the day on which such request is received during the prescribed
period.
Investments by Mutual Funds:
34

SEBI has laid down rules and regulations regarding the investments of
mutual funds to protect an investor. Some of these are listed below:
The funds collected under any scheme of the mutual fund shall be
invested only in transferable securities in the money, capital and debts
markets.
Money market scheme of the mutual funds shall be invested in the money
market instruments in accordance with the directions issued by the RBI.
The mutual fund shall not advance any loans for any purpose.
Every mutual fund shall compute and carry out valuation of its
investment in its portfolio and publish the same in accordance with the
valuation norms specified in the eight (schedule).
Every mutual fund shall compute the NAV of each scheme by dividing
the net asset of the scheme by the number of units outstanding on the date
of valuation.
The NAV of a scheme shall be calculated and published at least in two
daily newspapers at intervals of not exceeding one week.
The price at which units are sold and repurchased should be made
available to an investor.
A mutual fund scheme can invest up to 10% of its NAV in the listed and
unlisted securities or units of venture capital fund.

Restrictions on Investment:
Mutual funds should not invest more than 15% of its NAV in a single debt
instrument rated below the investment grade by a credit rating agency. It can be
extended to 20% of the NAV of a scheme with prior approval by the board of
trustees and the board of Asset Management Company. The above condition is
also applicable to the unrated debt instruments. No mutual fund under all its
schemes should own more than 10% of any companys paid up capital carrying
voting rights. Transfer of investments from one scheme to another scheme in the
same mutual fund shall only be allowed if:
Such transfers are done at the prevailing market price for quoted
instruments on spot basis.
35

 The securities so transferred should be in conformity with the investment

objective of a scheme to which such transfer has been made.
The aggregate of the inter scheme management made by all scheme under
the same management or in scheme under the management of any other
schemeof Asset Management Company should not exceed 5% of net
asset value of the fund.
Every mutual fund shall get the securities purchased or transferred in the
name of the mutual fund on account of the concerned scheme, whereas
investments are intended to be of long term nature.
If there is a pending deployment of funds in securities in terms of
investment objectives of the scheme, a mutual fund can invest the funds
of the scheme in short term deposits of scheduled commercial banks.
No mutual fund scheme shall make an investment in any unlisted security
of an association or group company of the sponsor; or any security issued
by way of private placement by an association or group company of the
sponsor; or the listed securities of group companies of a sponsor which
are in excess of 30% of the net assets of all the schemes of a mutual fund.
No mutual fund scheme shall invest more than 10% of its NAV in the
equity shares or equity related instruments of any company. However, the
limit of 10% shall not be applicable for investments in index funds or
sector or industry specific schemes.
A mutual fund scheme shall not invest more than 5% of its NAV in equity
shares or equity related instruments of any company in case of openended scheme and 10% of its NAV in case of close-ended schemes.
Investments in Foreign Securities:
The mutual funds can now make investments on foreign debt securities
in countries with fully convertible currencies. They invest in short-term
as well as long-term debt instrument with high credit ratings. They may
also invest in government securities if the countries are AAA rated.
They may also invest in units issued by overseas Mutual Funds or unit
trusts which invest in aforesaid securities. However, while investing
they have to adhere to the following guidelines.
o The boards of Asset Management Companys and trustees shall
exercise due to diligence in making investment decisions. They
shall make a detailed analysis of risks and returns of investments in
36

foreign investments in foreign securities by comparing with them

with the likely yields of securities available in the domestic market.
Investments shall be made in liquid and actively traded securities.
The intentions to invest in foreign securities shall be disclosed in the offer
documents along with the attendant risk factors and exposure limits.
The existing schemes can invest in the foreign securities if the offer
documents provides for such investments. Any additional disclosure as
specified above shall be informed to unit holders by way of addendum.
The Asset Management Companys shall send periodic reports to the
trustees, which would include the performance of investments made in
foreign securities in various countries. It should also inform the amount
invested in various schemes and any breach of exposure limit laid down
in the offer document.

Rules Regarding Advertisement:

An advertisement should disclose the objective of a scheme.
It should be truthful, fair, and clear and shall not contain a statement of
promises or forecast which is untrue or misleading.
It should not be framed to exploit the lack of experience or knowledge of
the investors.
All the investment issued by a mutual fund or its sponsor or asset
management company, shall state, all investments in mutual funds and
securities are subject to market risks and the NAV of the schemes may go
or up down depending upon the factors and forces affecting the securities
market.

The advertisement shall not compare one fund with another, explicitly or
implicitly, unless the comparison is fair and all information relevant to the
comparison is included in the advertisement.
The offer document and advertisement shall not be misleading or contains
any statement or opinion, which is incorrect or false.

What is a Systematic Investment Plan? How does it work?

37

What is a Systematic Investment Plan?

A Systematic Investment Plan or SIP is a smart and hassle free mode for
investing money in mutual funds. SIP allows you to invest a certain predetermined amount at a regular interval (weekly, monthly, quarterly, etc.). A SIP
is a planned approach towards investments and helps you inculcate the habit of
saving and building wealth for the future.
How does it work?
A SIP is a flexible and easy investment plan. Your money is auto-debited from
your bank account and invested into a specific mutual fund scheme. You are
allocated certain number of units based on the on-going market rate (called
NAV or net asset value) for the day.
Every time you invest money, additional units of the scheme are purchased at
the market rate and added to your account. Hence, units are bought at different
rates and investors benefit from Rupee-Cost Averaging and the Power of
Compounding.
Rupee-Cost Averaging
With volatile markets, most investors remain sceptical about the best time to
invest and try to 'time' their entry into the market. Rupee-cost averaging allows
you to opt out of the guessing game. Since you are a regular investor, your
money fetches more units when the price is low and lesser when the price is
high. During volatile period, it may allow you to achieve a lower average cost
per unit.

Power of Compounding
Albert Einstein once said, "Compound interest is the eighth wonder of the
world. He, who understands it, earns it... he who doesn't... pay it." The rule for
compounding is simple - the sooner you start investing, the more time your
money has to grow.

38

 Example
if you started investing Rs. 10000 a month on your 40th birthday, in 20
years time you would have put aside Rs. 24 lakhs. If that investment
grew by an average of 7% a year, it would be worth Rs. 52.4 lakhs when
you reach 60.
However, if you started investing 10 years earlier, your Rs. 10000 each
month would add up to Rs. 36 lakh over 30 years. Assuming the same
average annual growth of 7%, you would have Rs. 1.22 Cr on your
60th birthday - more than double the amount you would have received if
you had started ten years later!
Other Benefits of Systematic Investment Plans
Disciplined Saving - Discipline is the key to successful investments.
When you invest through SIP, you commit yourself to save regularly.
Every investment is a step towards attaining your financial objectives.
Flexibility - While it is advisable to continue SIP investments with a
long-term perspective, there is no compulsion. Investors can discontinue
the plan at any time. One can also increase/ decrease the amount being
invested.
Long-Term Gains - Due to rupee-cost averaging and the power of
compounding SIPs have the potential to deliver attractive returns over a
long investment horizon.
Convenience - SIP is a hassle-free mode of investment. You can issue a
standing instruction to your bank to facilitate auto-debits from your bank
account.
SIPs have proved to be an ideal mode of investment for retail investors
who do not have the resources to pursue active investments.

39

What is Active fund Management?

40

How mutual funds suits your age?

41

CHAPTER
NO.3

RESEARCH METHODOLOGY

ICICI MUTUAL FUND:

CICI Prudential Mutual Fund (the Fund) offers a wide range of retail and
corporate investment solutions across different asset classes like Equity, Fixed
Income and Gold.
The Fund House has continuously aimed to provide investors with financial
solutions to aid them in achieving their lifecycle objectives. It has constantly
been on the forefront of innovation and has introduced products aligned to meet
customer needs leading to a well-diversified portfolio of around 57 mutual fund
products. The success of the endeavours is evident in the mutual fund investor
base that has witnessed significant growth from 210 to over 2 Million currently.
ICICI Prudential Mutual Fund gained from managing funds as per its
investment objectives and was able to deliver superior risk adjusted returns. The
consistent long term performance was achieved on the strength of fundamentals,
process driven investment approach with enough flexibility for the fund
managers to manage their funds in their unique style and insight.
The fund house over the last 18 years has garnered trust of its investors and has
emerged as the leading and preferred investment solution provider in India. The
fund house has always aimed to fulfil its fiduciary responsibility of managing
investor's wealth with prudence and due diligence.

42

Products of Equityfund (Mutual fund):

Equity schemes endeavour to provide potential for high growth and returns with
a moderate to high risk by investing in shares. Such schemes are either actively
or passively (replicate indices) managed, and are best suited for investors with a
long term investment horizon.
ICICI Prudential Dynamic Plan
ICICI Prudential Focused Bluechip Equity Fund
ICICI Prudential Value Discovery Fund
ICICI Prudential Infrastructure Fund
ICICI Prudential Child Care Plan(Gift)
ICICI Prudential Tax Plan
ICICI Prudential Top 200 Fund
ICICI Prudential Technology Fund
ICICI Prudential Blended Plan A
ICICI Prudential US Bluechip Equity Fund
ICICI Prudential Top 100 Fund
43

 ICICI Prudential MidCap Fund

ICICI Prudential Export and Other Services Fund
ICICI Prudential Dividend Yield Equity Fund
ICICI Prudential Balanced Advantage Fund
ICICI Prudential Indo Asia Fund
ICICI Prudential FMCG Fund
ICICI Prudential Banking and Financial Services Fund
ICICI Prudential Target Returns Fund
ICICI Prudential Index Fund
ICICI Prudential Nifty Junior Index Fund

Products of Debt fund (Mutual fund):

Debt Funds primarily invests in bonds and other debt instruments, and will suit
investors who want to optimize current income assuming low to moderate levels
of risk.
ICICI Prudential Flexible Income Plan
ICICI Prudential Savings Fund
ICICI Prudential Ultra Short Term Plan
ICICI Prudential Liquid Plan
44

 ICICI Prudential Money Market Fund

ICICI Prudential Short Term Plan
ICICI Prudential Income Plan
ICICI Prudential Blended Plan B
ICICI Prudential Gilt Fund Investment Plan-PF Option
ICICI Prudential Gilt Fund Treasury Plan-PF Option
ICICI Prudential Long Term Plan
ICICI Prudential Short Term Gilt Fund
ICICI Prudential Long Term Gilt Fund
ICICI Prudential Corporate Bond Fund
ICICI Prudential Income Opportunities Fund
ICICI Prudential Dynamic Bond Fund
ICICI Prudential Banking And PSU Debt Fund
ICICI Prudential Regular Savings Fund
ICICI Prudential Multiple Yield Fund (MYF)

45

 ICICI Prudential Capital Protection Oriented Fund

46

AXIS Mutual Funds:

Axis Mutual Fund launched its first scheme in October 2009
Since then Axis Mutual fund has grown strongly. We attribute our success thus far to our 3
founding principles - Long term wealth creation, Outside in (Customer) view and Long
term relationship.

A-well-rounded product suite that consists of 53 Schemes (6 Equity, 33 Debt, 12

Hybrid, 1 Gold FOF & 1 Gold ETF)

Over 7 lac relaxed investors

Presence in over 75 cities

Products of Equity fund (Mutual fund):
The primary objective of the equity asset class is to provide capital growth /
appreciation by investing in the equity and equity related instruments of
companies over medium to long term.
Equity/ Growth Funds:
Axis Enhanced Arbitrage Fund - Regular Growth
Axis Equity Fund - Regular Growth
Axis Equity Saver Fund - Regular Growth
Axis Enhanced Arbitrage Fund - Regular Growth
Axis Focused 25 Fund - Regular Growth
Axis Long Term Equity Fund - Regular Growth
Axis Mid Cap Fund - Regular Growth
Axis Long Term Equity Fund - Regular Growth

.Products of Debt fund (Mutual fund):

Axis Banking Debt Fund - Regular Growth

Axis Constant Maturity 10 Year Fund - Regular Growth
Axis Dynamic Bond Fund - Regular Growth
Axis Fixed Income Opportunities Fund - Regular Growth
47

Axis Gold ET
Axis Gold ETF - Regular Growth
Axis Gold Fund - Regular Growth
Axis Income Fund - Regular Growth
Axis Short Term Fund - Regular Growth
Axis Treasury Advantage Fund - Regular Growth

AREA OF INTEREST OF MUTUAL FUND OF ICICI MUTUAL FUND:

Equity fund (Mutual fund):
ICICI Prudential MidCap Fund:
ICICI Prudential Midcap Fund is an open-ended diversified equity fund that
selects Emerging Stocks in the mid-cap space, targeted at returns over a long
term investment horizon. It aims at bringing you the benefit of investing in the
leaders of tomorrow.
Investment Philosophy
This fund is focused on the mid-cap sector and follows a fundamental bottom
up approach to identify growth sectors. It is diversified within its theme, and
focused on investing in carefully selected stocks, offering best possible potential
growth opportunities.
Key Benefits

Midcap companies have the potential to deliver significant capital

appreciation due to faster earning growth and subsequent re-rating.

It gives you an opportunity to gain from the performance of

midcap stocks which have higher earnings potential.

It allows you to compliment a portfolio focused primarily on largecap stocks.

This product is suitable for investors who are seeking*:

Long term wealth creation solution

An equity fund that aims for capital appreciation by investing in

diversified mid cap stocks.
48

High risk.

(BROWN)

Debt fund (Mutual fund):

ICICI Prudential Flexible Income Plan:
The debt market offers its own risk-to-return trade-off, which is triggered by
changes in interest rates and the impact they have on debt securities. To a fund
manager, however, the changes in the yield curve not only offers risk, but also
opportunities to benefit by actively managing these risks and making use of an
opening to increase returns.
ICICI Prudential Flexible Income Plan, an open-ended income fund, seeks to
actively manage such risks as a conscious investment strategy by allowing the
fund manager to switch the allocation from a 100% debt stance to a 100% cash
stance, which provides the flexibility to implement yield curve strategies, or
manage interest rate volatility better.
Investment Philosophy
This debt fund invests entirely in both, short and long term debt securities of the
government and the corporate sector. Its objective is to earn returns in the form
of interest income and capital gains, which equals long term deployment in debt
markets. The fund intends to minimize risks from liquidity and credit, while
actively seeking to manage interest rate risks.
Key Benefits

A portfolio which strategically deploys funds in the debt markets to

take advantage of interest rate risks.

Facilitates participation in markets that are large and institutiondominated.

Provides the potential to earn total return from both interest and
capital gains, with the attendant risks of capital loss as well.

This product is suitable for investors who are seeking*:

49

Short term savings solution

A Debt Fund that aims to maximise income by investing in debt and

money market instruments while maintaining optimum balance of yield,
safety and liquidity.

Low risk.
(BLUE)

AREA OF INTEREST OF MUTUAL FUND OF AXIS MUTUAL FUND)

Equity fund (Mutual fund):
Axis Mid Cap Fund Regular Growth
Axis Midcap Fund can help you do just that. Get more for your family.
Like any other equity fund, it invests in a basket of stocks. But unlike large
cap equity funds, it invests in carefully chosen mid-sized companies that
have the potential to offer more growth potential than the usual large blue
chip companies. While this means that it carries greater risk and volatility,
the higher growth potential makes it complement diversified funds in a
portfolio. Its just what you might need to provide for that extra bit that
your family wants.

50

Key benefits:

In a growing economy like India, future large cap companies will emerge
for todays midcap companies. Hence an investment in selected midcap
companies may offer relatively better returns.

Axis Midcap fund looks to combine growth potential of mid cap

companies with the track record of larger companies. Therefore even while
searching for growth opportunities; the fund is able to maintain a sharp focus
on risk. Investment in larger mid caps help to reduce the business and price
risk that is inherent in this space

Objectives:
Long term investment.

Investment in diversified basket of equity stocks of Midcap companies to

provide opportunities for long term growth in capital.

High risk.
(BROWN)

Debt fund (Mutual fund):

Axis Fixed Income Opportunities Fund Regular Growth
The Debt Market in India presents different investment opportunities for the
investing connoisseur. There are options like the Axis Constant Maturity 10 year
fund where one can get an indirect play on the 10 year G Sec benchmark or you
have the Axis Fixed Income Opportunities a fund that tries to capture best
opportunities across accrual, credit and duration spectrum with controlled risk

Key benefits:
51

o A low risk fund suitable for an investment horizon of 6 months or

more
o Investing in a portfolio of debt and money market instruments
o Portfolio targets an average maturity in the range of 1 to 3 years
o Endeavors to capture opportunities in the yield curve spreads in the
short duration segment
Objectives:
Stable returns in the short to medium term
Investment in debt and money market instruments across the yield curve
and credit spectrum

Low risk.

(BLUE)

52

CHAPTER
NO.4
ANYLISIS & FINDINGS

(1) What are the objectives of this plan? Or (4) which people will go for this
plan?

NAME

TYPE

OBJECTIVE

ICICI Prudential
Debt fund
Flexible Income Plan

ICICI Prudential
MidCap Fund

Equity fund

53

Short term savings solution

A Debt Fund that aims to
maximise income by investing in debt
and money market instruments while
maintaining optimum balance of yield,
safety and liquidity.
Low risk.

(BLUE)

Long term wealth creation

solution

An equity fund that aims for

capital appreciation by investing in

diversified mid cap stocks.

Axis Fixed Income

Opportunities Fund
RegularGrowth

Debt fund

High risk.

(BROWN)

A low risk fund suitable for an investment

horizon of 6 months or more
Investing in a portfolio of debt and money
market instruments
Portfolio targets an average maturity in the
range of 1 to 3 years
Low risk.

Axis Mid Cap Fund

RegularGrowth

Equity fund

(BLUE)

An open ended equity scheme

Focused on emerging sectors/businesses
that have potential to deliver high growth
Focus on liquidity and risk management
Suitable for an investment horizon of at
least 3-5 years or more

High risk.

(BROWN)

(2)What are the customers based for this plan? Or (5) what is the mode of
investment?

NAME

TYPE

plans

ICICI Prudential
Debt fund
Flexible Income Plan

ICICI Prudential
MidCap Fund

Equity fund

54

Short term savings solution

Long term wealth creation

solution

Axis Fixed Income

Opportunities Fund
RegularGrowth

Debt fund

Axis Mid Cap Fund

RegularGrowth

Equity fund

Regular income for medium term

short to medium term

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
short term

Column1

(3)In what type of securities would this plan invest?

NAME

TYPE

Invest in

ICICI Prudential
Debt fund
Flexible Income Plan

55

A Debt Fund that aims to

maximise income by investing in debt
and money market instruments while
maintaining optimum balance of yield,
safety and liquidity.

ICICI Prudential
MidCap Fund

Equity fund

An equity fund that aims for

capital appreciation by investing in
diversified mid cap stocks.

Axis Fixed Income

Opportunities Fund
RegularGrowth

Debt fund

A low risk fund suitable for an

investment horizon of 6 months or more.

Axis Mid Cap Fund

RegularGrowth

Equity fund

Focused on emerging sectors/businesses

that have potential to deliver high growth.

Focus on liquidity and risk management.

(6) What is the application amount of this plan?
NAME

TYPE

Application amount in rupees

ICICI Prudential
Debt fund
Flexible Income Plan

Rs. 5,000 (plus in multiples of Re.1)

ICICI Prudential
MidCap Fund

Equity fund

Axis Fixed Income

Opportunities Fund
RegularGrowth

Debt fund

Rs. 5,000 (plus in multiples of

Re.1)
Minimum Investment
Rs 5,000 in multiples of Rs 1 thereafter
Additional Purchase
Rs 1,000 in multiples of Rs 1 thereafter

Axis Mid Cap Fund

RegularGrowth

Equity fund

Minimum Investment
Rs 1,000 in multiples of Rs 1 thereafter

(7) What is entry load and exit load in this plan?

NAME

TYPE

Entry load

Exit Load
56

ICICI
Prudential
Flexible
Income Plan

Debt
fund

Nil. Upfront commission Nil

shall be paid directly by
the investor to the AMFI
registered
Distributors
based on the investors'
assessment of various
factors
including
the
service rendered by the
distributor.

ICICI
Prudential
MidCap
Fund

Equity Nil. Upfront commission

fund
shall be paid directly by
the investor to the AMFI
registered
Distributors
based on the investors'
assessment of various
factors
including
the
service rendered by the
distributor.

Upto 18 months 1%
of applicable NAV,
more than 18 months Nil

Axis Fixed
Income
Opportunities
Fund Regular
Growth

Debt
fund

If redeemed/switched
out within 12 months
from the date of
allotment:
- For 10% of
investment : Nil
- For remaining
investment : 1%
If redeemed/switched
out after 12 months
from the date of
allotment: Nil
Load comments
Last updated on 30
June 2015.

NA

57

Axis Mid Cap

Fund Regular
Growth

Equity
fund

NA

NA

(8)What is SIP and SWP (Systematic Withdrawal Plan) in this plan?

NAME

TYPE

SIP

SWP

ICICI
Prudential
Flexible
Income Plan

Debt
fund

Monthly: Minimum Rs.1, 000 + 5

post - dated cheques for a
minimum of Rs.1, 000 each
Quarterly: Minimum Rs. 5000 +
3 post - dated cheques of Rs.
5000 each.

Minimum of
Rs.500
and
multiples of
Re1/-

ICICI
Prudential
MidCap Fund

Equity
fund

Monthly SIP: Rs. 1,000/- (plus in Rs. 500/- and

multiple of Re. 1/-), Minimum in multiples
installments: 6. Quarterly SIP: of Re. 1/Rs. 5,000/- (plus in multiple of
Re. 1/-), Minimum installments
4.

Axis Fixed Income

Opportunities
Fund Regular
Growth

Debt
fund

Axis Mid Cap

Fund Regular
Growth

Equity
Rs 1,000 in multiples of Rs
1 thereafter
fund

(9)What is the date of inception?

NAME

TYPE

Date of inception

58

ICICI Prudential
Debt fund
Flexible Income Plan

27/09/2002

ICICI Prudential
MidCap Fund

Equity fund

Axis Fixed Income

Opportunities Fund
RegularGrowth

Debt fund

Axis Mid Cap Fund

RegularGrowth

Equity fund

28/10/2004

15/7/2014

18/2/2011

(10)How to identify color of mutual fund?

NAME

TYPE

color

ICICI Prudential
Debt fund
Flexible Income Plan

Low risk.

(BLUE)

ICICI Prudential
MidCap Fund

Equity fund

High risk.

(BROWN)

Axis Fixed Income

Opportunities Fund
RegularGrowth

Debt fund

Low risk.

(BLUE)

59

Axis Mid Cap Fund

RegularGrowth

Equity fund

High risk.

(BROWN)

IDENTIFICATION
5
4.5
4
3.5
3
IDENTIFICATION

2.5
2
1.5
1
0.5
0
ICICI Prudential Flexible Income Plan

Axis Fixed Income Opportunities Fund Regular Growth

FINDINGS:
The mutual funds is best in case of investments than bank
investments.
It all depends on the terms of systematic investment plan.
The mutual funds of ICICI Prudential mutual funds are the best as
my point of view.
The AXIS mutual fund are also good but not up to the mark or
standard.
60

 The equity fund are at low risk and debt or income funds has high
risks.
The equity fund can be identified in blue colour and debt fund in
brown colour.

CHAPTER
NO.5
CONCLUSION
61

Mutual funds now represent perhaps most appropriate investment opportunity

for most investors. As financial markets become more sophisticated and
complex, investors need a financial intermediary who provides the required
knowledge and professional expertise on successful investing. As the investor
always try to maximize the returns and minimizes the risk. Mutual funds satisfy
these requirements by providing attractive returns with affordable risks. The
mutual fund industry has already taken the banking industry, more funds being
under mutual fund management than deposits with the banks. With the
emergence of tough competition in this sector, mutual funds are launching a
variety of schemes which caters to the requirement of the particular class of
investors. Risk takers for getting capital appreciation should invest in growth
equity schemes. Investors who are need of regular income should invest in
income plans.
The stock market has been rising now a day. This in turn has not only
protected the money invested in funds but has also to help grow these
investments.
This has also instilled greater confidence among investors who are
investing more into the market through the Mutual Fund route than ever before.
In the Mutual fund industry the ICICI Mutual fund is the largest as they
are good in services. In AXIS mutual fund the services are there but it is the
newest one.

Bibliography:https://www.amfiindia.com/new-to-mutual-funds
http://www.mutualfundindia.com/
http://www.icicipruamc.com/
62

http://www.sebi.gov.in/sebiweb/home/list/3/39/0/1/Mutual-Funds
http://www.moneycontrol.com
Books:The prudent fact sheet journals of ICICI mutual funds of July 2014.
Special studies in finance(rph)

Annexure
COMMON QUESTIONER FORMAT FOR THESE FOUR PLANS:
QUESTIONER
Q.1.
Q.2.
Q.3.
Q.4.
Q.5.

What are the objectives of this plan?

What are the customers based for this plan?
In what type of securities would this plan invest?
Which people will go for this plan?
What is the mode of investment?
63

Q.6.
Q.7.
Q.8.
Q.9.
Q.10.

What is the application amount of this plan?

What is entry load and exit load in this plan?
What is SIP and SWP (Systematic Withdrawal Plan) in this plan?
What is the date of inception?
How to identify color of mutual fund?

64