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PERFORMANCE AND PROSPECTS OF MUTUAL FUNDS WITH SPECIAL REFERENCE TO

LARGE CAPITAL EQUITY ORIENTED SCHEMES IN INDIA

Mr. Sudip Banerjee

Assistant Professor (Sanskriti University, Mathura,U.P,India)

E.Mail Id: b_sudeep@rediffmail.com

1

Table of Contents

 

Page No

1:- Chapter:

Introduction

 
 

A Brief History of Mutual Fund Industry

4

Growth of Mutual Funds in India

5

 

6

 

Mutual Funds Schemes By Structure

Various Investment Options Mutual Funds Offer

 

7

 

Equity Linked Mutual Funds

8

Large Capital Funds

9-10

2:- Chapter: Need & Objective of the study

11

3:- Chapter: Present state of knowledge

12-13

4:- Chapter: Research Design and Methodology

14

5:- Chapter: Analysis

15-32

6:-Chapter:

Findings & Conclusions

33-34

Questionnaires

 

35

Abbreviations

 

36

References and Bibliography

37

2

ABSTRACT

A Mutual Fund is a trust that pools the savings of the number of investors who shares a common financial goal like capital

appreciation and dividend earning. The money collected from the investors systematically invested in capital market

instruments such as shares, debentures or other securities. The income earned through these investments realized by its

investors in the proportion of number of units owned by them. Because of diversification investment and professionally

managed by the fund house at a relatively low cost create an opportunity for the investors to invest in this market. As on

31st March 2015, the mutual fund industry AUM was Rs. 11.88 lakh crores of 45 fund house of total 11606 schemes.

Keywords: Mutual Funds, Fund of Funds schemes, Asset Under Management.

3

CHAPTER-1

INTRODUCTION

A BRIEF HISTORY OF MUTUAL FUNDS

The origin of mutual fund industry in India by Unit Trust of India (UTI) in the year 1963. In 1963, UTI was established by

an Act of Parliament. UTI was set up by the Reserve Bank of India. The first scheme, and for long one of the largest

launched by UTI, was Unit Scheme 1964.In 1978 UTI was separated from the RBI and the Industrial Development Bank

of India took over the regulatory and administrative control. , It had a monopoly till 1987-1988, the assets under

management (AUM) of UTI had grown to Rs 6,700 Crores.

In the year 1987 public sector banks and institutions were allowed to establish mutual funds. The State Bank of India

established SBI Mutual Fund in June 1987 followed by Canbank Mutual Fund (Dec 1987), LIC Mutual Fund

(June1989),PNB Mutual Fund(Aug 89),Indian Bank Mutual Fund(Nov 1989), Bank of India Mutual Fund(Jun 1990) and

GIC Mutual Fund (Dec 1990) . From 1987-88 to 1992-93, the AUM increased 7 times from Rs 6,700 crores to Rs 47,004

crores. During this period, investors showed interest in mutual funds, allocating a larger part of their savings to

investments in the funds.

In 1993 permission granted for the entry of private sector funds. This gave the open market for the private players and

Indian investors a broader choice of 'fund families' and increasing competition to the existing public sector funds. Foreign

fund management companies were also allowed to operate mutual funds, most of them coming into India through their

joint ventures with Indian promoters. Kothari Pioneer (now merged with Franklin Templeton) was the first private sector

mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were revised more comprehensive Mutual Fund Regulations in 1996. The

current Mutual Fund industry now functions under the SEBI (Mutual Fund) Regulations 1996.

Budget of the Union Government in 1999 declared tax free of all mutual funds dividends in the hands of the investors.

4

GROWTH OF MUTUAL FUNDS IN INDIA

The Indian Mutual Fund has passed through three phases.

The first phase was between 1964 to 1987 and the only player was the Unit Trust of India, which had a total asset

of Rs. 6,700 crores at the end of year 1988.

The second phase is between 1987 and 1993 during which period 8 Fund houses were established (LIC,GIC and 6

by Commercial Banks). From 1987-88 to 1992-93, the AUM increased 7 times from Rs 6,700 Crores to Rs

47,004 crores.

The third phase in 1993 Kothari Pioneer Mutual Fund was the first Fund established by the private sector in

collaboration with a foreign Fund.

Several private sectors Mutual Funds were launched in 1993 and 1994.

As at the end of financial year 2000(31st march) 32 Fund houses were functioning with Rs 1, 13,005 crores as

total assets under management.

As at the end of January 2003, there were 33 mutual fund houses with total assets of Rs 1, 21,805 crores.

As at the end of September, 2004, there were 29 Fund houses, which manage assets of Rs.153108 crores under

421 schemes.

As on 31st March 2015, the mutual fund industry AUM was Rs. 11.88 lakh crores of 45 fund house of total 11606

schemes.

5

VALUATION OF MUTUAL FUND

When a scheme is first made available for investment, it is called a New Fund Offer (NFO). During the NFO, investors

may have the chance of buying the units at their face value. Post NFO, when they buy into schemes, they need to pay a

price that is linked to its NAV (Net Asset Value).

MUTUAL FUNDS SCHEMES BY STRUCTURE

A.

Open-Ended Schemes

These schemes do not have a fixed maturity. An open-ended fund is available for subscription all through the year in

units at net asset value (NAV) related prices. The key feature is liquidity. The existing investors can buy additional

units or new investors buy units of the open ended schemes.

B.

Close-Ended Schemes

Schemes that have a stipulated maturity period (ranging from 2 to 15 years) are called close-ended schemes. One can

invest directly in the scheme at the time of the initial issue or later from stock exchange where they are listed. There

are two exit options available to an investor after the initial offer period closes. Investors can sell the units of the

scheme on the stock exchanges where they are listed or after the maturity period. 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 units directly to the Mutual Fund

through periodic repurchase at NAV related prices.

C.

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 pre-determined intervals at NAV related prices.

6

VARIOUS INVESTMENT OPTIONS MUTUAL FUNDS OFFER

To cater to different investment needs, Mutual Funds offer various investment options. Some of the important investment

options include:

A. Growth Option:

Dividends are not paid-out under the Growth Option and the investor realizes the capital appreciation by an increase

in NAV.

B. Dividend Payout Option:

Dividends are paid-out to investors. However, the NAV of the mutual fund scheme falls to the extent of the dividend

payout.

C. Dividend Re-investment Option:

Here the dividend accrued on mutual funds is automatically re-invested in purchasing additional units in open-ended

funds. In most cases mutual funds offer the investor an option of collecting dividends or re-investing the same.

MUTUAL FUNDS SCHEMES ARE MAINLY THREE CATEGORIES BY OBJECTIVES:

Equity or Growth Scheme

• Income or Debt Scheme

• Balanced Scheme

7

EQUITY LINKED MUTUAL FUNDS

Equity fund schemes invest in shares of companies that are listed on the stock exchange. Equity linked mutual Funds have

the potentiality of superior returns than all other investments schemes but it carries highest risk as well.

There are different varieties of equity mutual funds offer by mutual funds companies. These are as follows:

1. LARGE CAP FUNDS: Equity oriented mutual funds that invest > 75% in CRISIL-defined Large Cap Stocks for

a minimum of six out of nine months in each period over the past 3 years.

2. MID CAP FUNDS: Equity oriented mutual funds that invest > 45% and < 75% in CRISIL-defined Large Cap

Stocks for a minimum of six out of nine months in each period over the past 3 years.

3. SMALL CAP FUNDS: Equity oriented mutual funds that invest < 45% in CRISIL-defined Large Cap Stocks for

a minimum of six out of nine months in each period over the past 3 years.

4. SECTORIAL FUNDS: Invests in specific sector so mutual fund companies purchase stocks of such companies.

Like Banking & Finance, Pharma & Healthcare, Technology sector etc.

5. THEMATIC FUNDS:

Invests in bunch of sectors that are characteristics by a common theme such as

infrastructure, FMCG, cement, power etc. These thematic schemes are riskiest investment because they are

typically very specific limited area of investment not diversified nature.

6. ARBITRAGE FUNDS: It is a kind of equity investment where fund managers take the advantages of different

price in the different markets. For instance buying a share in BSE and sale the same share in NSE at a higher

price. Most arbitrage funds take contrary positions between the equity market and the futures and options market.

7. EQUITY

ORIENTED

HYBRID

SPECIALITY

FUNDS:

Speciality funds

such as

children

plans,

education plans, etc. investing predominantly in equity oriented securities will form part of this

category.

8. ELSS (Equity linked saving Scheme): An ELSS is a diversified equity mutual fund which has a majority of the

corpus invested in equities.

Investors can exit ELSS by selling it after 3 years. The biggest advantage of

investment of such scheme is that tax benefits under Section 80C of Income Tax Act 1961.

8

LARGE CAPITAL FUNDS

At the end of 31 st March 2015 there were 35 fund houses handing 122 large cap open ended fund with a market capitalization of rupees seven thousand and nine hundred Crore, out of 35 fund houses only 9 fund houses handling 71 close ended schemes with market capitalization of Rs 724 crore.

RISK FACTORS OF LARGE CAPITAL EQUITY ORIENTED SCHEMES

Mutual fund investments are subject to market risk but that risk can reduce by systematically and professionally managed

by the fund manager. Large capital equity oriented schemes invest only blue chips stocks whose market prices down

towards movement less compare to mid-cap and small cap stocks. But till market risk cannot be ignored due to volatility

of share prices in the market.

ADVANTAGES OF LARGE CAPITAL EQUITY ORIENTED SCHEMES

Every categories of mutual investment has some advantages and dis advantages. For some investors, large capital equity

oriented schemes is less risky investment because of the following advantages -

1. Professional Management professionally managed by the fund managers and focus only large capital oriented

thirty or fifty stocks where to invest and opportunity of good return.

2. Diversification investment strategy Instead on investment on the specific sectorial based companies and industry

spreading the investment in wide range of various to

reduces the risk of losses.

3. Easy exits facility - Easy exit facility gives to opportunities to the investors to prefer investment.

4. Affordability- Large capital equity oriented schemes minimum investment amount Rs 5000 so a retail investor can

easily afford to invest and in the opportunity of subsequent purchases.(ELSS schemes a person can even start

investment of Rs 500)

5. Systematic Approach to Investment- Open ended schemes offer the investment opportunities through a Systematic

Investment plan (SIP), Systematic withdrawal plan (SWP) and systematic transfers plan (STP).

6. Return Potential- These types of schemes have the capacity to give good return on investment because here fund

manager invest money only in the profitable stocks.

7. Quality Transparency Level: Daily basis up to date information to the pubic created a trust among the investors.

9

DISADVANTAGES OF LARGE CAPITAL EQUITY ORIENTED SCHEMES

1.

High transaction cost: As because large capital equity oriented schemes are directly investing money in the share

market so brokerage charges and high taxation leads to high transaction cost. Other cost like annual operating

expenses including management fees etc all these costs has to bear by investors which adversely affects investors

return.

2.

Market Volatility: Large capital equity oriented schemes are directly investing money in the share market so if

market is not performing well which adversely affect investor’s schemes. Although during the negative sentiment of

the market a smart fund manager can even generate positive return by investing in derivative markets buts every

scheme has its own limitation due its own rules and regulations so market volatility cannot be ignore.

10

NEED OF THE STUDY:

CHAPTER-2

The need for studying the performance of Equity oriented mutual funds is to help the retail investors to

make valued judgment in selecting equity oriented funds. Information regarding investors at micro level is not available or

published. Therefore, this has to be collected with such survey.

HYPOTHESIS OF THE STUDY:

Null hypothesis

: There is no significant difference between the returns of various large cap equity oriented mutual

funds respective schemes/products of Mutual funds.

OBJECTIVIES

1. To know the investors interest in various types of large cap equity oriented schemes.

2. To study the performance of selected large cap equity oriented selected schemes.

3. Comparative analysis of selected schemes with benchmark performance to find out the benchmark return

and fund return.

4. To identify the return in terms of investment.

11

CHAPTER-3

PRESENT STATE OF KNOWLEDGE

1.

Ippolito (1992) states that investor is ready to invest in those fund or schemes which have resulted good rewards and

most investors’ is attracted by those funds or schemes that are performing better over the worst.

2.

Sujit Sikidar and Amrit Pal Singh (1996) conducted a survey to peep in to the behavioral aspects of the investors of

the North-Eastern region in direction of equity and mutual fund investment. The survey resulted that because of tax

benefits mutual funds are preferred by the salaried and self-employed individuals. UTI and SBI schemes were catch

on in that region of the country over any other fund and the other fund had been proved archaic during the time of

survey.

3.

Madhusudhan V Jambodekar (1996) conducted his study to size-up the direction of mutual funds in investors and

to identify factors influence mutual fund investment decision. The study tells that open-ended scheme is most favored

among other things that income schemes and open-ended schemes and income schemes are preferred over closed-

ended and growth schemes. Newspapers are used as information source, safety of principal amount and investor

services are priority points for investing in mutual funds.

4.

Raja Rajan (1997) underlined segmentation of investors and mutual fund products to increase popularity of mutual

funds.

5.

Goetzman (1997) opined that investor’s psychology affects mutual fund selection for investment in and to withdraw

from fund.

6.

Debasish (2009) studied the performance of selected schemes of mutual funds based on risk and return models and

measures. The study covered the period from April 1996 to March 2005 (nine years). The study revealed that Franklin

Templeton and UTI were the best performers and Birla Sun life, HDFC and LIC mutual funds showed poor

performance.

12

7.

Prabakaran and Jayabal (2010) evaluated the performance of mutual fund schemes. The study conducted is on a

sample of 23 schemes which were chosen basing on the priority given by the respondents in Dharmapuri district in a

survey and covers the study from April 2002 to March 2007. The study used themethodology of Sharpe and Jensen

for the performance evaluation of mutual funds.

The results of the study found that 13 schemes out of 23 schemes selected had superior performance than the

benchmark portfolio in terms of Sharpe ratio, 13 schemes had superior performance of Treynor ratio and 14 schemes

had superior performance according to Jensen measure.

8. Garg (2011) examined the performance of top ten mutual funds that was selected on the basis of previous

yearsreturn. The study analyzed the performance on the basis of return, standard deviation, beta as well as

Treynor, Jensen and Sharpe indexes. The study also used Carhart’s four-factor model for analyze the

performance of mutual funds. The results revealed that Reliance Regular Saving Scheme Fund had achieved

the highest final score and Canara Robeco Infra had achieved the lowest final score in the one year category.

13

CHAPTER-4

RESEARCH DESIGN AND METHODOLOGY

Data:

Primary & Secondary Data.

Data source(Primary)

Survey of Mutual Fund Investors.

Data source(Secondary)

Research papers, Books, Journals, websites etc.

Period of study:

Daily Net Asset Value movement starting from 1 st April 2015 to 30 th March

2017.

Quarterly Asset Under Management growth

1 st quarter April to June 2015,2016

2 nd quarter July to Sept 2015,2016

3 rd quarter Oct to Dec 2015.2016

4 th quarter Jan to March2016.2017

Tools:

Simple statistical tools such as trend analysis in respect of time series.

Universe size:

At the end of 31 st March 2015 there were 35 fund houses handing 122 large cap open ended schemes with a market capitalization of Rs 7900 Crore, out of 35 fund houses only 9 fund houses handling 71 close ended schemes with market capitalization of Rs 724 Crore.

Sample:

Total 122 large cap open ended equity oriented schemes top 5 schemes will be

analyzed in respect of AUM dated 31 st March 2015. Total 71 large cap close

ended equity oriented schemes top 5 schemes will be analyzed in respect of

AUM dated 31 st March 2015.

14

CHAPTER-5

PRIMARY DATA COLLECTION:

The primary study focuses on the perceptions of the Mutual Funds investors about large capital equity oriented schemes.

A survey was conducted in Delhi during the month of May 2017. A pre tested questionnaire was served to the 30

respondents who have prior knowledge of Mutual fund various categories of investment and their features. The questions

as related to Mutual funds large capital equity oriented schemes investment, risk factors and expectations of returns.

RESPONDENT PROFILE

The questionnaire has been served to fifteen target respondents. Responses from fifteen respondents have been considered

in the study. The Respondents are categorizes

1. To their Qualification.

2. To their age.

3. Their Monthly Family income.

4. Preference level for investment in Mutual Funds.

5. Reason for investment in Mutual Funds.

6. Total Saving Percentage in contributed in Mutual funds.

7. Expectations of return from the investment.

8. Scheme selecting Criteria.

9. Factors to be consider while selecting existing large capital equity oriented Schemes.

10. Type of large capital equity oriented schemes investors prefer most.

15

Primary Data Analysis

Questionnaires data have been analyzed via chart diagram for easier to understand which mentions below:

1. Qualification of Investors

Qualifcation of the Investors

23% 44% 33%
23%
44%
33%

Post GraduateQualifcation of the Investors 23% 44% 33% Under Graduate others

Under GraduateQualifcation of the Investors 23% 44% 33% Post Graduate others

othersQualifcation of the Investors 23% 44% 33% Post Graduate Under Graduate

Majority of investors are Post Graduate, while under others professionals like CA, Cost Accountant, Company Secretary

and diploma holders have been considered.

2. Age of Investors

Age Profile of Investors

Above 50 years 4 41-50 years 10 Population 31-40 years 14 Between 20-30 years 2
Above 50 years
4
41-50 years
10
Population
31-40 years
14
Between 20-30 years
2
0
2
4
6
8
10
12
14
16

From the above bar chart, we can say that the highest number of investors belong to the age group between 31 to 40 years

and in the second position of age group between 41 to 50 years.

16

3.

Monthly Family Income of Investors

Monthly Family Income

9

8 7 6 0 Below Rs15000 15001-25000 25001-35000 35001-45000 Above Rs 45000
8
7
6
0
Below Rs15000
15001-25000
25001-35000
35001-45000
Above Rs 45000

Population

Different earning groups of people are investing money in mutual funds. But earning groups below rupees fifteen

thousand have not been consider because they are less savers due to high cost of living in Delhi even though if they save

then also mutual funds investment may not be best attractively option for them it may be cause of lack of awareness

because now only investing rupees five hundreds a investors can join in this investment arena.

4. Preference Level while investing in Mutual Funds

Preference Level for Investment in Mutual Funds

Low Risk Liquidity High Return Company reputation 6 4 Population 16 4 0 2 4
Low Risk
Liquidity
High Return
Company reputation
6
4
Population
16
4
0
2
4
6
8
10
12
14
16
18
Majority of Investors are giving most preference to higher return before investing in mutual funds.

17

5.

Which factor of mutual fund allure you most?

Factors allure to invest in MF

9

7 6 5 3 Market oriented Better return Professionally Regular income Tax Benefits Investment manage
7
6
5
3
Market oriented
Better return
Professionally
Regular income
Tax Benefits
Investment
manage

investment

Population9 7 6 5 3 Market oriented Better return Professionally Regular income Tax Benefits Investment manage

From the above graph it is clear that better return is the main criteria for choosing investment in mutual funds but also tax

benefits, Market oriented investment and Regular income are the other factors of mutual funds’ investments.

6. From Total Saving Percentage of saving in Mutual Funds

Total saving Percentage of Mutual Funds

12

10 6 2 0 Below 10% 10-25% 25-50% 50-75% Above 75%
10
6
2
0
Below 10%
10-25%
25-50%
50-75%
Above 75%

PopulationTotal saving Percentage of Mutual Funds 12 10 6 2 0 Below 10% 10-25% 25-50% 50-75%

Out of Total savings majority of investors invest 10-25% of savings in mutual funds.

18

7.

Expectations of Return

Expectations of Return

14

10 4 2 Below 10% 10%-15% 15-20% Above 20%
10
4
2
Below 10%
10%-15%
15-20%
Above 20%

Population

Majority of investors expect return from the scheme 15-20% where they invest. As because Investors have Prior

knowledge of mutual funds returns so there expectation of return is realistic.

8. Scheme Selecting Criteria

Reason for selecting large Capital scheme

12

8 6 4 High Return Safe & Secure Return Goodwill of scheme Recommended by
8
6
4
High Return
Safe & Secure Return
Goodwill of scheme
Recommended by

Advisor

Population

Majority of investors prefer to select a scheme which has already given good return in the past.

19

9.

Factors focused most while selecting a particular Fund

Scheme selecting Criteria

12

8 6 4 Growth of NAV Growth of AUM Company Reputation Fund Manager Track Record
8
6
4
Growth of NAV
Growth of AUM
Company Reputation
Fund Manager Track
Record

Population

From the chart majority of investors before investing prefer to invest on the scheme in respect of growth of NAV fund but

also growth of asset under management, company reputation and fund manager’s track record also effect on investment

decisions.

10. large cap equity Scheme you prefer most for investing

Type of large cap equity Scheme prefer most for investing

10

8 7 5 Thematic Diversified Index Arbitrage
8
7
5
Thematic
Diversified
Index
Arbitrage

Population

Here investors prefer to invest diversified schemes because of flexibility of changes investment as per opportunities.

20

SECONDARY DATA ANALYSIS

Secondary data which is collected for the study from the various websites information regarding large Capitalization

Equity Oriented Fund at the end of 31 st March 2015 there were 35 fund houses handing 122 large cap open ended schemes

with a market capitalization of Rs 7900 Crore, out of 35 fund houses only 9 fund houses handling 71 close ended schemes

with market capitalization of Rs 724 Crore.

5 Open ended large cap equity schemes to be analyzed:

SCHEMES NAME

Total AUM Rs in Crores

Birla Sun Life Frontline Equity Fund - Growth

7900.40

L&T Equity Fund-Dividend Option

2537.20

Sbi Blue Chip Fund-Regular Plan Growth

1404.01

HDFC Growth Fund - Growth Option

1194.40

Franklin India Bluechip Fund- Direct - Growth

0973.50

5 close ended large cap equity schemes to be analyzed:

SCHEMES NAME

Total AUM Rs in Crores

ICICI Prudential Value Fund - Series 1 -Dividend

934.81

ICICI Prudential Growth Fund- Series 1 Dividend

629.48

ICICI Prudential Value Fund - Series 2 - Dividend

590.22

ICICI Prudential Growth Fund - Series 2 Dividend

463.78

DSP Black Rock 3 Years Close Ended Equity Fund - Regular Plan - G

671.50

21

1.

Birla Sun Life Frontline Equity Fund - Growth

Birla Sun Life Frontline Equity Fund - Growth

Amout in Crore

11,878

10,717

10,960

8,071

9,364

Jun-15

Sep-15

Dec-15

Mar-16

Jun-16

Sep-16

Dec-16

Mar-17

8,516

8,774

8,459

Above chart shows the quarterly growth of Assets Under Management of Birla Sun Life Frontline Equity Fund Growth

Option in the eight consecutive quarters which is in the positive node.

Rs 10000 invested: Birla Sun Life Frontline Equity Fund Growth Option Vs Nifty 50 Birla
Rs 10000 invested: Birla Sun Life Frontline Equity
Fund Growth Option Vs Nifty 50
Birla Sun Life
14000
Frontline Equity
Fund - Growth,
12000
12050
Nifty 50, 10995
10000
8000
Nifty 50
6000
4000
Birla Sun Life Frontline Equity
Fund - Growth
2000
0

In respect to comparative study of NAV movement of investment Rs 10000, it has been seen that Birla Sun Life Frontline

Equity Fund Growth Option is better performer then the benchmark which is taken as Nifty 50.

22

2.

L&T Equity Fund-Dividend Option

L&T Equity Fund-Dividend Option

2,601.60 2,563.60 2,524.70 2,502.20 2,487.80 2,490.80 2,402.90 Amount in Crore 2,275.50 Jun-15 Sep-15 Dec-15
2,601.60
2,563.60
2,524.70
2,502.20
2,487.80
2,490.80
2,402.90
Amount in Crore
2,275.50
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17

Above chart shows the quarterly growth of Assets Under Management of L&T Equity Fund-Dividend Option in the eight

consecutive quarters which is in mixed trends but majority is in the positive node.

Rs 10000 invested: L &T Equity Fund Direct Plan Dividend Vs Nifty 50

12000

10000

8000

6000

4000

2000

0

Plan Dividend Vs Nifty 50 12000 10000 8000 6000 4000 2000 0 Nifty 50, 10995 L&T

Nifty 50, 10995

L&T Equity Fund- Direct Plan-Dividend Option, 10219

Nifty 500 Nifty 50, 10995 L&T Equity Fund- Direct Plan-Dividend Option, 10219 L&T Equity Fund-Direct Plan- Dividend

L&T Equity Fund-Direct Plan- Dividend Option50 12000 10000 8000 6000 4000 2000 0 Nifty 50, 10995 L&T Equity Fund- Direct Plan-Dividend

In respect to comparative study of NAV movement of investment Rs 10000, it has been seen that L&T Equity Fund-

Dividend Option is under performer then the benchmark which is taken as Nifty 50.

23

3.

Sbi Blue Chip Fund-Regular Plan Growth

Sbi Blue Chip Fund-Regular Plan Growth

8,582.50 7,320.90 6,412.80 5,981.60 4,796.70 2,741.60 2,321.10 1,737.10 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16
8,582.50
7,320.90
6,412.80
5,981.60
4,796.70
2,741.60
2,321.10
1,737.10
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17

Amount in Crore

Above chart shows the quarterly growth of Assets Under Management of SBI Blue Chip Fund-Regular Plan Growth in the

eight consecutive quarters which is very well in positive trends.

Rs 10000 invested: SBI Blue Chip Fund Regular Plan VS Nifty 50 14000 SBI BLUE
Rs 10000 invested: SBI Blue Chip Fund Regular
Plan VS Nifty 50
14000
SBI BLUE CHIP
FUND-REGULAR
PLAN GROWTH,
12000
11869
Nifty 50, 10995
10000
8000
Nifty 50
6000
4000
2000
SBI BLUE CHIP FUND-
REGULAR PLAN GROWTH
0

In respect to comparative study of NAV movement of investment Rs 10000, it has been seen that Sbi Blue Chip Fund-

Regular Plan Growth is better performer then the benchmark which is taken as Nifty 50.

24

4.

HDFC Growth Fund - Growth Option

HDFC Growth Fund - Growth Option

1,152.90

1,135.50

1,104.00

Amount in Crore

Jun-15

Sep-15

Dec-15

Mar-16

Jun-16

Sep-16

Dec-16

Mar-17

955.2

932.9

991.9

956.9

990.3

Above chart shows the quarterly growth of Assets Under Management of HDFC Growth Fund Growth Option in the eight

consecutive quarters which is in mixed trends.

Rs 10000 invested: HDFC Growth Fund Growth Option Vs Nifty 50 HDFC Growth Fund Growth
Rs 10000 invested: HDFC Growth Fund Growth
Option Vs Nifty 50
HDFC Growth Fund
Growth Option,
14000
12153
12000
Nifty 50, 10995
10000
Nifty 50
8000
6000
HDFC Growth Fund Growth
Option
4000
2000
0

In respect to comparative study of NAV movement of investment Rs 10000, it has been seen that HDFC Growth fund

Growth option is better performer then the benchmark which is taken as Nifty 50.

25

5.

Franklin India Blue chip Fund- Direct Growth

Franklin India Bluechip Fund- Direct - Growth

3022.1 2223.2 2021.4 1872.1 1694.4 Amount in Crore 1458.1 1263.7 1183.7 Jun-15 Sep-15 Dec-15 Mar-16
3022.1
2223.2
2021.4
1872.1
1694.4
Amount in Crore
1458.1
1263.7
1183.7
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17

Above chart shows the quarterly growth of Assets Under Management of Franklin India Blue chip Fund- Direct Growth

in the eight consecutive quarters which is in positive trends.

Rs 10000 invested in Franklin India Bluechip Fund- Direct - Growth Vs Nifty 50 14000
Rs 10000 invested in Franklin India Bluechip Fund- Direct -
Growth Vs Nifty 50
14000
Franklin India
Bluechip Fund- Direct
- Growth, 11756
12000
Nifty 50, 10995
10000
8000
Nifty 50
6000
4000
Franklin India Bluechip Fund-
Direct - Growth
2000
0

In respect to comparative study of NAV movement of investment Rs 10000, it has been seen that Franklin India Blue chip

Fund- Direct Growth

is better performer then the benchmark which is taken as Nifty 50.

26

CLOSED ENDED LARGE CAPITALIZATION EQUITY FUND

6. ICICI Prudential Value Fund - Series 1 Dividend

ICICI Prudential Value Fund - Series 1 -Dividend

892.4 881 853.4 790.7 741.7 732.2 432.6 Amount in Crore 258.2 Jun-15 Sep-15 Dec-15 Mar-16
892.4
881
853.4
790.7
741.7
732.2
432.6
Amount in Crore
258.2
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17

Above chart shows the quarterly growth of Assets Under Management of ICICI Prudential Value Fund Series I Dividend option in the eight consecutive quarters which is in very sharply falling in the consecutive quarter.

Rs 10000 invested ICICI Prudential Value Fund - Series 1 - Dividend vs Nifty 50

12000

10000

8000

6000

4000

2000

0

1 - Dividend vs Nifty 50 12000 10000 8000 6000 4000 2000 0 Nifty 50, 10995

Nifty 50, 10995

ICICI Prudential Value Fund - Series 1 - Dividend, 9099

Nifty 500 Nifty 50, 10995 ICICI Prudential Value Fund - Series 1 - Dividend, 9099 ICICI Prudential

ICICI Prudential Value Fund - Series 1 -Dividend50 12000 10000 8000 6000 4000 2000 0 Nifty 50, 10995 ICICI Prudential Value Fund -

In respect to comparative study of NAV movement of investment Rs 10000, it has been seen that ICICI Prudential Value

Fund Series I Dividend option is under performer then the benchmark which is taken as Nifty 50.

27

7.

ICICI Prudential Growth Fund- Series 1 Dividend

ICICI Prudential Growth Fund- Series 1 Dividend

627.2 616.5 583.5 583.5 572.9 564.5 Amount in Crore 539.1 535.3 Jun-15 Sep-15 Dec-15 Mar-16
627.2
616.5
583.5
583.5
572.9
564.5
Amount in Crore
539.1
535.3
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17

Above chart shows the quarterly growth of Assets Under Management of ICICI Prudential Growth Fund Series I Dividend

option in the eight consecutive quarters which is mixed trend.

Rs 10000 invested: ICICI Prudential Growth Fund Series 1 Dividend Vs Nifty 50

12000

10000

8000

6000

4000

2000

0

1 Dividend Vs Nifty 50 12000 10000 8000 6000 4000 2000 0 Nifty 50, 10995 ICICI

Nifty 50, 10995

ICICI Prudential Growth Fund- Series 1 Dividend, 10271

Nifty 500 Nifty 50, 10995 ICICI Prudential Growth Fund- Series 1 Dividend, 10271 ICICI Prudential Growth Fund-

ICICI Prudential Growth Fund- Series 1 DividendNifty 50 12000 10000 8000 6000 4000 2000 0 Nifty 50, 10995 ICICI Prudential Growth Fund-

In respect to comparative study of NAV movement of investment Rs 10000, it has been seen that ICICI Prudential

Growth Fund Series I Dividend option is under performer then the benchmark which is taken as Nifty 50.

28

8.

ICICI Prudential Value Fund - Series 2 Dividend

ICICI Prudential Value Fund - Series 2 - Dividend

572.0 568.7 540.0 501.2 470.1 464.4 375.5 Amount in Crore 172.5 Jun-15 Sep-15 Dec-15 Mar-16
572.0
568.7
540.0
501.2
470.1
464.4
375.5
Amount in Crore
172.5
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17

Above chart shows the quarterly growth of Assets Under Management of ICICI Prudential Value Fund Series 2 Dividend

option in the eight consecutive quarters which is in very sharply falling in the consecutive quarter.

Rs 10000 invested: ICICI Prudential Value Fund -Series 2-Dividend Vs Nifty 50

12000

10000

8000

6000

4000

2000

0

2-Dividend Vs Nifty 50 12000 10000 8000 6000 4000 2000 0 Nifty 50, 10995 ICICI Prudential

Nifty 50, 10995 ICICI Prudential Value Fund - Series 2 - Dividend, 9072

Nifty 50Nifty 50, 10995 ICICI Prudential Value Fund - Series 2 - Dividend, 9072 ICICI Prudential Value

ICICI Prudential Value Fund - Series 2 - Dividend50 12000 10000 8000 6000 4000 2000 0 Nifty 50, 10995 ICICI Prudential Value Fund -

In respect to comparative study of NAV movement of investment Rs 10000, it has been seen that ICICI Prudential Value

Fund Series 2 Dividend option is under performer then the benchmark which is taken as Nifty 50.

29

9.

ICICI Prudential Growth Fund - Series 2 Dividend

ICICI Prudential Growth Fund - Series 2 Dividend

477.4 471 465.1 463.1 456.8 454.9 Amount in Crore 432.3 419.7 Jun-15 Sep-15 Dec-15 Mar-16
477.4
471
465.1
463.1
456.8
454.9
Amount in Crore
432.3
419.7
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17

Above chart shows the quarterly growth of Assets Under Management of ICICI Prudential Growth Fund Series 2 Dividend

option in the eight consecutive quarters which is mixed trends.

Rs 10000 invested: ICICI Pridential Growth Fund

Series 2 Dividend Vs Nifty 50

ICICI Prudential Growth Fund - Series 2 Dividend, 11362

Nifty 50, 10995

Nifty 50Growth Fund - Series 2 Dividend, 11362 Nifty 50, 10995 ICICI Prudential Growth Fund - Series

ICICI Prudential Growth Fund - Series 2 Dividend50 ICICI Prudential Growth Fund - Series 2 Dividend, 11362 Nifty 50, 10995 Nifty 50 12000

12000

10000

8000

6000

4000

2000

0

11362 Nifty 50, 10995 Nifty 50 ICICI Prudential Growth Fund - Series 2 Dividend 12000 10000

In respect to comparative study of NAV movement of investment Rs 10000, it has been seen that ICICI Prudential

Growth Fund Series 2 Dividend option is better performer then the benchmark which is taken as Nifty 50.

30

10. DSP Black Rock 3 Years Close Ended Equity Fund - Regular Plan - G

DSP BlackRock 3 Years Close Ended Equity Fund - Regular Plan - G

Amount in Crore

818

855.4

794.3

668

682.2

684.1

692.6

632.1

Jun-15

Sep-15

Dec-15

Mar-16

Jun-16

Sep-16

Dec-16

Mar-17

Above chart shows the quarterly growth of Assets Under Management of DSP Black Rock 3 Years Close Ended Equity Fund - Regular Plan Growth option in the eight consecutive quarters which is in positive trends.

Rs 10000 invested: DSP Black Rock 3 years Close ended Equity Fund -G vs Nifty 50

DSP BlackRock 3 Years Close Ended Equity Fund - Regular Plan - Growth, 13338

15000

10000

5000

0

Fund - Regular Plan - Growth, 13338 15000 10000 5000 0 Nifty 50, 10995 Nifty 50

Nifty 50, 10995

Nifty 50Plan - Growth, 13338 15000 10000 5000 0 Nifty 50, 10995 DSP BlackRock 3 Years Close

DSP BlackRock 3 Years Close Ended Equity Fund - Regular Plan - GrowthDSP BlackRock 3 Years Close Ended Equity Fund - Regular Plan - Growth, 13338 15000 10000

In respect to comparative study of NAV movement of investment Rs 10000, it has been seen that of DSP Black Rock 3

Years Close Ended Equity Fund - Regular Plan Growth option is better performer then the benchmark which is taken as

Nifty 50.

31

Comparative Analysis between Fund and Bench mark Return

Name of the Fund

Bench Mark

2 years Fund

Bench mark

Return

Return

Birla Sun Life Frontline Equity Fund - Growth

Nifty 50

20.50%

9.95%

L&T Equity Fund-Dividend Option

Nifty 50

2.19%

9.95%

Sbi Blue Chip Fund-Regular Plan Growth

Nifty 50

18.69%

9.95%

HDFC Growth Fund - Growth Option

Nifty 50

21.53%

9.95%

Franklin India Bluechip Fund- Direct - Growth

Nifty 50

17.56%

9.95%

ICICI Prudential Value Fund - Series 1 -Dividend

Nifty 50

-9.01%

9.95%

ICICI Prudential Growth Fund- Series 1 Dividend

Nifty 50

2.71%

9.95%

ICICI Prudential Value Fund - Series 2 - Dividend

Nifty 50

-9.28%

9.95%

ICICI Prudential Growth Fund - Series 2 Dividend

Nifty 50

13.62%

9.95%

DSP Black Rock 3 Years Close Ended Equity Fund - Regular Plan - G

Nifty 50

33.38%

9.95%

32

CHAPTER-6

FINDINGS & CONCLUSIONS:

PRIMARY DATA ANALYSIS

From the Primary data analysis I have come to the conclusion that smart and educated customers only prefer to select

investment mutual fund as an option for investment. Majority of the Investors belongs to the age group between 30 to 50

years they are investing money in the various mutual funds schemes out of which between 31 years to 40 years are most

risk takers and most aggressive while considering their return expectations. A stable earning is also a factor to invest in

regular interval in Mutual funds various schemes because of Systematic Investment Plan (SIP) option choose. High

expectation of return attracts investors to invest in the mutual fund investment. While investing in the Mutual fund

investments investors are cautious they are risk spreader which is result of they are investing a certain percentage of

investment in Mutual fund not the full savings money. When it’s come to select scheme to invest investors prefer to look

at past track record of specific scheme and then they select a scheme. As because investors investing in large capitalized

scheme and it have been observed from the primary survey that diversification type of schemes is the most preferable type

of option while selecting investment nature.

33

SECONDARY DATA ANALYSIS

Open Ended Schemes:

From the primary data analysis it has been observed that investors preferring invest money in the scheme which is

better performing and which has a good track record so HDFC Growth Fund - Growth Option and Birla Sun Life Frontline

Equity Fund Growth option has given better return compare to other three schemes and we have to remember that

HDFC is the second largest fund house followed by ICICI and Birla sun life is also held fourth position.

Close ended schemes:

From the close ended 71 large capitalized schemes 26 schemes alone holding by ICICI.ICICI was the second largest fund

house as per 31 st March 2015 but in march year ended 2017 it has become the largest player in the entire mutual fund

industry and majority of the starting schemes are the most successful closed ended schemes which has largest asset under

management. Although majority of the selected close ended schemes of ICICI Prudential Fund has not given satisfactory

result in that respect I can say DSP Black Rock 3 Years Close Ended Equity Fund - Regular Plan Growth option is the

best performing fund in terms of return as a result we are seeing that the assets under management is in increasing trends

in quarter to quarters.

CONCLUSION:

Diversification nature of investment schemes are the most preferred choice of investment strategy. Open ended schemes

are better option to invest in terms of return prospective and those types of schemes are preferred most who has given

good return in the previous year’s whereas closed ended schemes major schemes funds AUM reduces over the years due

to poor performance.

34

QUESTIONNAIRE ON EQUITY ORIENTED MUTUAL FUND

Name:

Address:

Contact Number:

1. Qualification: Pl tick (√).

a) Under Graduate

2. Your Age

b) Post Graduate

c) Professionals

d) Others

a) Between 20-30 years b) 31-40 years c) 41-50 years d) Above 50 years

3. What is your monthly family income approximately? Pl tick (√).

a) Rs Below 15,000

45,000

e) Rs. 45,001 and above

b) Rs. 15,001 to25000 c) Rs. 25,001 to35,000 d) Rs. 35,001 to Rs

4. While investing your money in Mutual Fund, factors your preference level as is highest?

a) Company Reputation b) High Return c) Liquidity d) Low Risk

5. Which features of the mutual funds allure you most? Pl tick (√).

a) Diversification of Investment

b) Better return and safety

c) Professionally manage

investment

d) Regular income

e) Tax Benefits

6. From your total savings Percentage contribution towards investment in Mutual Fund? Pl tick (√).

a)

b)

c) 25%-50%

10%-25%

Below 10%

d)

e)

50%- 75%

Above 75%

7. Percentage of return per annum that you are expecting? Pl tick (√).

a)

b)

5%-10%

10%-15%

c)

d)

15%- 20%

Above 20%

8. Reason for choosing for the Large Cap type of Scheme? Pl tick (√).

a) High Return b) Safe & Secure Return

of scheme

c) Recommendation by Advisor d) Goodwill

9. While selecting existing any large cap Fund under equity oriented scheme factors focuses

by you most?

a) Growth of NAV

b) Growth of Asset Under

Management

c) Company Reputation

d) Fund Manager Track Record

10. Which type of large cap equity Scheme you prefer most for investing? Pl tick (√).

a) Thematic

b) Diversified

35

c)Index

d) Arbitrage

LIST OF ABBREVIATIONS AUM Assets Under Management CRISIL Credit Rating Information Services of India Limited
LIST OF ABBREVIATIONS AUM Assets Under Management CRISIL Credit Rating Information Services of India Limited

LIST OF ABBREVIATIONS

LIST OF ABBREVIATIONS AUM Assets Under Management CRISIL Credit Rating Information Services of India Limited
LIST OF ABBREVIATIONS AUM Assets Under Management CRISIL Credit Rating Information Services of India Limited

AUM

Assets Under Management

CRISIL

Credit Rating Information Services of India Limited

ELSS

Equity Linked Savings Schemes

FMCG

Fast Movable Consumer Goods

GIC

General Insurance Corporation

HDFC

Housing Development Finance Corporation

LIC

Life Insurance Corporation

MF

Mutual Fund

NAV

Net Asset Value

Nifty 50 N’ational Stock Exchange F‘ifty’

NFO

New Fund Offer

SBI

State Bank of India

SEBI

Securities and Exchange Board of India

SIP

Systematic Investment Plan

STP

Systematic Transfers Plan

SWP

Systematic Withdrawal Plan

UTI

Unit Trust of India

36

REFERENCES

1)

Rajan, R. (1998). Stages in life cycle and investment pattern. The Indian Journal of Commerce,

27-36.

2)

Rathnamani, R. N. (2013). Performance evaluation of Equity Mutual Funds. International Journal of Business and Managment Invention, 18-24.

3)

Shah, S. M. (2012). Preference of Investors for Indian Mutual Funds and its Performance Evaluation. Pacific Business Review International, 62-76.

4)

Vechalekar, G. P. (2013). Perception of Indian Investors towards investment in mutual funds with special reference to MIP Funds. IOSR Journal of Economics and Finance , 66-74.

5)

Vyas, R. (2012). Mutual Fund Investors Behavior and Perception in Indore City. Journal of Arts,Science and Commerce, 67-75.

6)

Dr.B.Nimalathan; Mr.R.Kumar Gandhi; ―Mutual fund financial performance analysis‖( A Comparative study on equity diversified schemes and equity mid cap schemes ) , excel international journal of multi disciplinary management studies, vol 2 pp 91,96.

7)

Dr.R.Narayanasamy, V. Rathnamani (2013) :Performance Evaluation of Equity Mutual Funds (On Selected Equity Large Cap Funds) International Journal of Business and Management Invention ISSN (Online): 2319 8028, PP.18-24

8)

Garg, Sanjay (2011). A Study on Performance Evaluation of Selected Indian Mutual Funds. International Journal of Innovation Creativity and Management (IJICM), 1(1), 1-10. years).

WEB SITES:

1. http://www.slideshare.net/navnit1188/performance-evaluation-of-mutual-funds-4912211

2. http://mutualfunds.about.com/od/analyzingamutualfund/a/How-To-Analyze-Mutual-Fund-

Performance.htm

3. http://www.moneycontrol.com/mutual-funds

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