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EXECUTIVE SUMMARY
The project is done at Sharekhan Financial Services Pvt Ltd, with the main intention to construct A comparative
study of market volatility on equity and Debt fund investment with reference to Sharekhan.
The main objective is to evaluate the performance of Debt and Equity of selected companies in terms of return. To
analyse the category of potential funds for investment.
The study based on the historical prices of selected funds from January 2013 to December 2017. All the scrip’s of
NIFTY 50 are considered for the study and basic calculation like Returns, Standard deviation, Beta, Covariance, and
Sharpe ratio treynor ratio correlation are computed. Reliance small cap equity fund is fetching high return when
compared to other fund the aggressive investors can invest in such fund, who can take high risk and get high return.
Under debt fund, Reliance medium term is suitable for the investor who is risk taker . the risk involved in funds is
high as it fetches high return. Based on the study it is evident that investors can take a right decision regarding their
portfolio by analysing the investment and market behaviour with the help of technical analysis , which determines
the risk factors. COMPARATIVE
STUDY OF MARKET VOLATILTY ON EQUITY
AND DEBT FUND INVESTMENT
DEPARTMENT OF MBA - GAT Page 2
INTRODUCTION ABOUT THE INTERNSHIP
The study conducted at SHAREKHAN LIMITED at Bangalore. About the work culture of company. The
mainbaimbofgthe studynistto knowbthe position of internship is the integralbpart of thebacademic programs
ofbMBA. Internship is bthe incentive bto link thebgapnbetweenn knowledgebandbitsbapplicationbthroughna
seriesbof interventionnthat will enable2studentsmof MBA programs2to pick up experiences and2presentation tonthe
organizations.
The 10 week2internship3has4been placedvduring the 4th2semester of 1MBA 2program as its attends that purpose1of
providingbcriticalminsight to the studentsgas wellvprovidingbindustry withvgraduates ofvabhigh calibre
whovaregreadybtohgethaheadjinutheyworldtfromidayyone.
Investment in securities exchanges are for the most part affected by the sharp examination and thinking which help
in anticipating the market in any event to some degree. Over the previous years, various specialized and speculations
for examination have developed; these joined with current innovation guides, which fill the need of a speculator. The
giant players in the market, as Foreign Institutional Investors, Mutual Funds, and so on have the mastery ability and
access for different analytical instruments and make utilization of them. The greater part of the little speculators are
not in position to profit out from advertising the way Mutual Funds do. For the most part little speculator's ventures
depend available assessments, inside data, through gossip, tips and establishment. The little financial specialists
intensely rely on intermediaries and broking house for their speculations. Theyhcan contribute throughttheiMutual
Fundiwho is moreeexperiencedeand master inythisifield5than5a little speculator5himself. COMPARATIVE
STUDY OF MARKET VOLATILTY ON EQUITY AND DEBT FUND
INVESTMENT
DEPARTMENT OF MBA - GAT Page 3
TOPIC CHOSEN FOR THE STUDY
“A COMPARATIVE STUDY OF MARKET VOLATILITY EQUITY AND DEBT FUND INVESTMENT
WITH REFERENCE TO SHAREKHAN”
1.1NEEDvFORgTHEgSTUDY
The1main determination of1undertaking of1this study was1tomknowfaboutjmutualufunduand its routine. It also
helpsuin considerate different schemes of equity and debt mutual fund schemes in Indiaias well as theoreturns
connected with thosedschemes. Thisrstudy alsowhelps understand the remunerations of mutuallkfunds tolinvestors.
This makes a necessity for the investors to analysis the behavioural aspects of these funds at the time of market
volatility.
1.2 OBJECTIVESeOF THErSTUDY
1. To evaluate thegperformance of debt and equityqfund of selected companies in terms of return.
2.To analyse the category of potential funds for investment.
1.3 SCOPE OF THE STUDY
Even though there are number of companies that deal with equity and debt funds schemes, only 8 selected
companies are taken into consideration from Indian Market. Funds are selected based on the top performer of share
khan and investor preference Top 8 company’s equity and debt fund are considered to evaluate, compare and for
ranking purpose. Traditional investment like Standard deviation, Mean, Beta and Sharpe index, trey nor index are
adopted for measuring the volatility and return
1.4 METHODOLOGY OF THE STUDY
To examine the mutual fund schemes performance, It comprises of 4 IDFC classic equity fund, BNP Paribas equity
fund, Reliancersmall cap fund, Aditya Birlawsun life midcap fund. and 4 Reliance medium term fund, BNP Paribas
short term Income Fund, Aditya Birla Sun life Saving Fund, Kotak Income Opportunities Fund, dailyrclosing NAV
of differentrschemes have been COMPARATIVE STUDY OF MARKET VOLATILTY ON
EQUITY AND DEBT FUND INVESTMENT
DEPARTMENT OF MBA - GAT Page 4
used in thewstudy for the periodoof five years i.e. January 2013 to December 2017 S&P NSE. NIFTY 50 hasAbeen
used for marketaportfolio. In the studyAmonthly yield on 91 day treasuryAbills have beenAused as riskAfree rate
.Different Parameters Has been used to evaluate the performance of Debt and Equity Funds.
1.5 HYPOTHESIS
H01 : There is no significant difference of performance between IDFC Equity and Nifty 50.
H11 : There is a significant difference of performance between IDFC Equity and Nifty 50.
H02 : There is no significant difference of performance between BNP Paribas Equity fund and Nifty 50.
H12 : There is a significant difference of performance between BNP Paribas Equity fund and Nifty 50.
H03 : There is no significant difference of performance between Reliance Small Cap fund and Nifty 50.
H13 : There is a significant difference of performance between Reliance Small Cap fund and Nifty 50.
H04 : There is no significant difference of performance between Aditya Birla Sun life Midcap Fund and Nifty 50.
H14 : There is a significant difference of performance between Aditya Birla Sun life Midcap Fund and Nifty 50.
H05 : There is no significant difference of performance between Reliance Medium Term Fund and Nifty 50.
H15 : There is a significant difference of performance between Reliance Medium Term Fund and Nifty 50.
COMPARATIVE STUDY OF MARKET VOLATILTY ON EQUITY AND DEBT
FUND INVESTMENT
DEPARTMENT OF MBA - GAT Page 5
H06 : There is no significant difference of performance between BNP Paribas Short Term Income Fund and Nifty
50.
H16 : There is a significant difference of performance between BNP Paribas Short Term Income Fund and Nifty 50.
H07 : There is no significant difference of performance between Kotak Income Opportunities Fund and Nifty 50.
H17 : There is a significant difference of performance between Kotak Income Opportunities Fund and Nifty 50.
H08 : There is no significant difference of performance between Aditya Birla sun life saving fund and Nifty 50.
H18 : There is a significant difference of performance between Aditya Birla sun life saving fund and Nifty 50.
1.6 SOURCES OF DATA
1. Secondary Data
The data used for research is only Secondary Data which were collected from Share khan and National stock
Exchange (NSE), Money Control, value research online.
1.7 STATISTICAL TOOLS USED FOR ANALYSIS
AnalysisAhas beenAdone by using followingAstatistical tools:
1. Average Mean
2. Standard Deviation
3. Beta value
4. Sharpe Index Value
5. Trey nor Index Value
6. Correlation. COMPARATIVE
STUDY OF MARKET VOLATILTY ON EQUITY
AND DEBT FUND INVESTMENT
DEPARTMENT OF MBA - GAT Page 6
MEAN
A mean is the sumAof a list of numbersAdivided by the number ofAnumbers in the list, which is the overall average
of that particular information. Mean is can also be used to find the average rate of returnAover a periodAof time.
Mean= Total sum/ Total No of Numbers in the list
STANDARDADEVIATION
It is measure of the valuesAof the variablesTaround its mean or it is the squareAroot of the squared deviation from
the mean divided by the number of observances. HigherFstandard deviationRmeans a greater fluctuationRin
expectedRreturn.
BETA
Beta means the systematic risk and shows how prices of securities respond to the market forces. It is calculated by
relating the return on a security with return for the market. By convention, market will have beta 1.00 mutual fund is
said to be volatile, more volatile or less volatile. If beta is greater than 1 the stock is said to be risker than market. If
beta less than 1, the indication is that stock is less risky in comparison to market. If beta is zero then the rsik is same
as that of the market. Negative beta is rare.
Beta= covariance (Rx, Rm)
Variance (Rm)
SHARPE INDEX VALUE
Sharpe Index measure risk premium of a portfolio, relative to the total amount for risk in the portfolio. Index
summarizes the risk and return of a portfolio in a single measure that categorizes the performance of the funds on the
risk adjusted basis. The greater the Sharpe Index, the COMPARATIVE STUDY OF MARKET
VOLATILTY ON EQUITY AND DEBT FUND INVESTMENT
DEPARTMENT OF MBA - GAT Page 7
portfolio performance well over performance of the market and vice versa.
SharpeAindex= portfolioBaverageCreturn (Rp) –risk freeBrate ofRreturn (Rf)
Standard deviation ofUthe portfolioTreturn
TREYNOR INDEX VALUE
The performance measureYdevelopedEby Jark trainer hisRreferred to has trainer ratioRor revolved to volvality
ratioTit is the ratio of theUreward or riskQpremium to the vitality of return as6measured by portfolio. The numerator
of the Treynor measureTis the risk premiumUearned by the portfolio the denominator, the systematic risk. The Trey
nor measureRreflects the excess returnTearned per unit of risk.
Trey nor8index = portfolio averageUreturn (Rp) –risk free rateRof return (Rf)
BetaTcoefficient of portfolio COMPARATIVE
STUDY OF MARKET VOLATILTY ON
EQUITY AND DEBT FUND INVESTMENT
DEPARTMENT OF MBA - GAT Page 8
1.8 REVIEW LITERATURE
Parikalpana ( 2016) -In the present investigation 10 top performing plans offered by Reliance Mutual Funds are
chosen to make a relative report on the risk and return offered by these assets. To understandingYthe risk and
returnOrelationships for each shared fund schemeEunderRconsideration. Investors who wish to take a higher risk for
higher returns can choose Reliance Banking Fund To assess the past execution of chosen open ended Equity mutual
subsidize plans of Reliance. For bench marking and examination reason BSE-Sensex and NSE-Nifty isused.To
consider risk free return yield on91-day Treasury bills is acknowledged which 8.52% , during my examination
period.
Ms M.VHSubha Ms .SDJaya Bharathi2(2007) -This paper attempts to assess select Indian open end mutual fund
schemes by utilizing such measures to toss light on the risk and returns ofYthe plans. To decide theUperformance of
selectRopen end mutualUfund plans utilizing different stastical measures like Sharpe ratio,Treynor proportion, and
Jensen Differential measure. The Sharpe Ratio indicates great performance by majority share of the plan, while
regarding Trey nor proportion just couple of plans indicate great performance. The returns of the funds are positive
and henceforth all in all we can say that the performance of the Mutual assets during this period is acceptable.
R Kumar Gandhi , R Perumal(2016)-This paper attempts that the analyse the performance of the mutual fund with
the selected banks like stateGbank of India, Canara7bank, ICICI bank, HDFCWbank and this mutual fund used
different parameters such as8standard deviation, beta , SharpePratio, trey nor Jensen alpha and NAV for calculating
the mutual fund to obtain information quickly and inexpensively a convenience sampling could be adapted. The
canara rabeco equity fund tax saver schemes have shown the good performance compare to the other banking sector
.
M V SubhaHMs Ojaya Bharath (2007)-This paper is study about analyis and performance ofGselected
mutualHfunds schemes the analysis and performance of the risk and return of the selected opened ended mutual fund
by using secondary data by statisical tools like sharpe ratio terynor jenson ratio. For the 51 mutual funds schemes
The NAV value is considered from the 1st oct 2004 to 30th sept 2005.the results of the
COMPARATIVE STUDY OF MARKET VOLATILTY ON EQUITY AND DEBT
FUND INVESTMENT
DEPARTMENT OF MBA - GAT Page 10
funds is positive and they performance of mutual funds during this period satisfactory.
Goel and Laveena (2015)-It emphasized on Debt and equity schemes briefly and evaluates the performance of
debt and equity schemes of HDFC MF co over a period of 5 years to examine theJfunds sensitivity toRtheRmarket
fluctutation. Different tools are used for rating the perforamance like sharpe, beta , average, NAV and standard
deviation. It concluded, that performance of debt fund schemes are relatively effective than of equity fund schemes.
Nagaraju (2013)-the article evaluated the performance of equity and debt fund of selected companies fund over a
period of 5 years. Different tools are used to measure the risk and return like standard deviation , treynor ratio it
concluded that in return aspect equity fund to be preferred and in risk ascept debt fund to be preferred by the
investor.
Selvavinyagam (2012)-the article focused on performance of various schemes in equity fund and debt of the share
trading firm the toolsEused for this study areRstandard deviation, beta. Among the selected schemes debt fund
schemes shown the highest rate of return.
Dimple Batra and Gujan Batra(2012)-the article attempted to have A dea comparsion of systematic and lumpsum
and investments in mutual funds tries to find out the individual measures of efficiency corresponding of inputs and
outputs of targets.they are using tools like standard deviation and beta to know about the investors to invest in
particular funds through either SIP or lumpsum. They are highlights the benefits of SIP.
K Srinivas Reddy(2013)-This paper is deals about the performanceRevaluation of mutual fundsRin India the
evaluated the selected funds on the basis of previous performance ratios like sharpe, treynor and jeason alpha
comparing with the nifty 50 market index choosing 3 three funds HDFC,ICICI , Birla analysis and considering
quaretely basis returns and risk.
COMPARATIVE STUDY OF MARKET VOLATILTY ON EQUITY AND DEBT
FUND INVESTMENT
DEPARTMENT OF MBA - GAT Page 11
N Bhagyasree and B Kishore-The presents paper about the ARstudy on performance EvaluationRof Mutual
FundsTSchemes in India. PerformanceRof open Ended and growth ended equity fund schemesOto know about the
return and risk market volatility of the selected funds by using tools like Sharpe trey nor ratio, beta, standard
deviation, for 50 schemes for the period 5 years. The Sharpe ratios were positive in all schemes and show the greater
risk and return.
Gandhi (2016) this article focused on investor’s investment decision making towards mutual fund by using
statistical tools and ratio analysis of mutual fund schemes of selected banks. The mainGobjective of this researchRis
to exploits the use of statistical tool and ratio analysis in the terms of financial performance ofTselected mutualPfund
schemes. The research findings are useful for investors to make their investment decision.
Qamruzzaman (2014) thisbstudy found that, the selectedbmutual funds showsbpositive monthlybreturn and
upward trend in comparison tobmarket return. Different risk return measuresbshows similar performancebindication
with the exceptionbof few mutual funds schemebdue to marketbreturn. Hence, it is necessarybto float more mutual
fundsbas these are good instrumentsbof mobilizingbsavings and providingbinvestment opportunities to smallbsavers.
Mehta (2012) he tries to identify needs of mutual fund investors, their preference for mutual funds schemes and
its performance evaluations.. The objective is tobknow the preference ofbmutual fund investors andbperformance
evaluation of thebpreferred schemes bybinvestors. The survey isbundertaken forbeducated investors and the finding
reveal the factors that influencebbuying behavior of mutual fund investors and the preferablebmode to invest in
mutualbfunds market.
Vyas (2012) he tries to understand and analyze the factor that highlights the investor’s perception and
expectations about mutual funds. It found that most of the investors invest in mutualbfund for not more thanb3years
and they used to quitbfrom fund which now not
COMPARATIVE STUDY OF MARKET VOLATILTY ON EQUITY AND DEBT
FUND INVESTMENT
DEPARTMENT OF MBA - GAT Page 12
givingbdesired result. This study also foundbthat maximumbnumber of investor did not analyze risk in their
investmentband they are depends upon their brokers andbagent for their work.
Padmaj (2013) he tries to explain about the investor’s awarenessbtowards mutual funds, investor’sbperceptions,
their preferencesband the extent ofbsatisfaction towards mutual funds. bThe data was collectedbthrough primary
andbsecondary sources. Some suggestionsbwere also made tobincrease the awarenessbtowards mutual funds and
measuresbto select appropriate mutualbfunds tobmaximize the returns.
Kumar, (2014) he tries to analyze the performancebof ELSS funds reflect abhigher elementbof investment
riskband do ELSS funds provides a higher risk adjusted return as compared tobdiversified equity funds
andbbenchmark indexes. Thebregulatory provision of ELSSbfunds, apparently tend tobincrease the element
ofbinvestment riskbof these funds as compared to the regularbdiversified equitybfunds.
Mohanasundari (2016) he tries to analyze the various tax saving mutual fund investment avenues available to
investors. ELSS funds are open-endedbdiversified equitybschemes offered bybmutual funds inbIndia. The study is
undertaken to analyze bibliographic review of the risk and return of variousbmutual fundbschemes. And the best
performing ELSS scheme of mutual fund is being suggested.
To be the best retail brokering brand in the retail business of stock marketing.
MISSION
To educated and empower the individual investor to make better investment better decision through the quality
advice and superior services.
2.6 PRODUCTS AND SERVICES PROFILE
A Sharekhanboutlet offers thebfollowing SERVICES
Online BSE andbNSE executions.
Fundamental research.
Depositorybservices: Demat transactions.
Derivativesbtrading {futuresband options}
Commoditiesbtrading on NCDEX and MCX
IPO’s and Mutual fundsbDistribution
Internet –basedbonline trading SpeedbTrade
Portfolio management services.
Equities and Derivatives Trading .
Daily trading calls based on technical Analysis.
COMPARATIVE STUDY OF MARKET VOLATILTY ON EQUITY AND DEBT
FUND INVESTMENT
DEPARTMENT OF MBA - GAT Page 18
INDIAN
BULLS
HDFC
SECURI
TIES
ICICI
DIRECT
INDIAN
INFOLI
NE
KOTAK
2.7 PRODUCTS
Mutual fundbschemes.
Insurance
Portfoliobmanagement system
bShares-online andboffline.
bBonds
bFixed deposits
bCommodities.
WEAKNESSES:
High employee turnover.
Less awareness in the market.
Localized presencebdue to insufficientbinvestments for countrybwide expansion.
Lack of awarenessbamong customersbbecause of non-aggressivebpromotional