TABLE OF CONTENTS

CHAPTER No. CONTENTS PAGE No.

1.1 Introduction
1.2 Objectives of the study
CHAPTER-I 1.3 Need of the study 2-6
1.4 Scope of the study
1.5 Research Methodology
1.6 Limitations

CHAPTER-II Review of Literature 7-12

CHAPTER-III Company Profile 13-25

CHAPTER-IV Theoretical Framework 26-41

CHAPTER-V Data analysis and interpretation 42-57

CHAPTER-VI 6.1 Findings

6.2 Suggestions 58-60
6.3 Conclusion
Bibliography 61

1
 CHAPTER-I
INTRODUCTION

2
1.1 INTRODUCTION

A mutual fund is a professionally managed investment fund that pools money from many investors
to purchase securities. These investors may be retail or institutional in nature. Mutual funds have
advantages and disadvantages compared to direct investing in individual securities. The primary
advantages of mutual funds are that they provide economies of scale, a higher level of
diversification, they provide liquidity, and they are managed by professional investors. On the
negative side, investors in a mutual fund must pay various fees and expenses.

Primary structures of mutual funds include open-end funds, unit investment trusts, and closed-end
funds. Exchange-traded funds (ETFs) are open-end funds or unit investment trusts that trade on an
exchange. Mutual funds are also classified by their principal investments as money market funds,
bond or fixed income funds, stock or equity funds, hybrid funds or other. Funds may also be
categorized as index funds, which are passively managed funds that match the performance of an
index, or actively managed funds. Hedge funds are not mutual funds; hedge funds cannot be sold
to the general public and are subject to different government regulations.

In Mutual fund industry has developed by leaps and bounds, A proper evaluation measure will
remove misunderstanding and help small investors to decide approximately the level of
investment in various mutual fund schemes, so as to minimize the risk maximize the returns.
Further the growing rivalry in the market forces the fund managers to work hard to satisfy investor
and the management. A regular performance assessment of the mutual funds is essential for the
investors and the fund manager also on the basis of the returns associated with the risk free security
and stock market directories.

The prevailing government was started establishing various financial institutions for fulfilling the
obligation for industries and agricultures; it also started state-owned financial institution for
providing the finance without any interruption. UTI is one of the largest and oldest mutual funds
in the country. Later on the other private sector companies and financial institutions adopted this
mechanism and started to mobilize fund through the concept of mutual fund.

India economy stood among the fastest growing economy in the world. The huge potential market
is also unlocked for the mutual fund industry; this would accelerate the growth of the industry.

3
Generally Indian economy called as a redeemable economy, 80% of population has saved more
than 35% of GDP rate. The present saving shell channelized in the mutual fund industry as it
proposals a variety of investment avenues.

As it can be noticeable, there is huge and potential growth in the mutual fund area. The mutual
fund industry is very sound and growth oriented in the next future based on the continuous
developmental actions in this sooner.

1.2 NEED FOR THE STUDY

The principal objective of every investor is to maximize his investments and to earn more from his
savings. Hence the key question of interest to us in this study is whether the mutual funds‟
investments will have more advantages when compared with other investments. This study is
useful to the investors to taking decisions relating to investments in mutual funds. By comparing
the Magnum contra fund with other equity funds like TATA, Kotak, UTI and L&T contra fund in
the area of risk and returns investor will make decisions easily. The study has been done using the
statistical tools like Sharpe’s and Treynor’s Ratios.

1.3 OBJECTIVES OF THE STUDY

● The basic objective of the present study is to evaluate the performance of selected mutual
funds in India.
● To analyze the risk and return of the selected mutual funds traded in Indian mutual funds
industry.
● To compare the performance the mutual funds using Sharpe and Treynor ratios.

4
SCOPE OF THE STUDY

My scope of study is related to working with mutual funds in Indian market .In the research
my project deals with types of mutual funds, regulators, risk and returns, investment strategies,
broker, sub broker and mutual fund distribution.

METHODOLOGY OF THE STUDY

Primary data:

For analysis purpose I make conversation with mutual fund distributors and mutual fund
investors.

Secondary data:

For this project work I have taken data from research paper, journal, websites and articles.
For historical data I collected from AMFI website.

Sample size:

● SBI
● UTI
● AXIS
● RELIANCE
● ADITHYA BIRLA

5
 Statistical tools

● Treynor Ratio

Formula
𝑝𝑜𝑟𝑡𝑓𝑜𝑙𝑖𝑜 𝑟𝑒𝑡𝑢𝑟𝑛−𝑟𝑖𝑠𝑘 𝑓𝑟𝑒𝑒 𝑟𝑎𝑡𝑒
Treynor Ratio = 𝑝𝑜𝑟𝑡𝑓𝑜𝑙𝑖𝑜 𝑏𝑒𝑡𝑎

● Sharpe Ratio

Formula
𝑝𝑜𝑟𝑡𝑓𝑜𝑙𝑖𝑜 𝑟𝑒𝑡𝑢𝑟𝑛−𝑟𝑖𝑠𝑘 𝑓𝑟𝑒𝑒 𝑟𝑎𝑡𝑒
Sharpe Ratio = 𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛 (𝑜𝑓 𝑎𝑠𝑠𝑒𝑡 𝑟𝑒𝑡𝑢𝑟𝑛)

LIMITATIONS

● The data provided by the investor and the agents can’t be held true as 100% correct.
● The study was conducted to understand with respect to Risk involved in broking firm
and investors, which is a part of the equity share market.
● To understand the overall working of mutual funds, the period of 45 days is not enough.

6
 CHAPTER-II

REVIEW OF LITERATURE

7
Norma Gonzalez (January 1, 1995)

Conceptualizing the households of working-class Latino students as being rich in funds of

knowledge has had transformative consequences for teachers, parents, students, and researchers.
Teachers' qualitative, ethnographic study of their own students' households has unfolded as a
viable method for bridging the gap between school and community. The focus of the home visit is
to gather details about the accumulated knowledge base that each household assembles in order to
ensure its own subsistence. Teachers also participate in study groups that offer a forum for the
collective analysis of the household findings, and they form curriculum units that tap into the
household funds of knowledge. New avenues of communication between school and home foster
confianza, or mutual trust.

M. F. Kaplan (11, 1, 1967)

The Griffith crack theory of fracture strength is discussed. Tests were performed on concrete
beams with crack simulating notches, and two methods, which have been called the analytical and
the direct experimental methods, were used to determine the critical strain-energy-release rate
associated with the rapid extension of the crack. There was good agreement between Go values
for beams with different notch depths and which were loaded both by the third-point and center-
point methods. However, 3 x 4 x 16 in. beams gave somewhat larger Cc values than did 6 x 6 x
20-in. beams. Although further research is necessary, the indications are that the Griffith concept
of a critical strain-energy-release rate being a condition for rapid crack propagation and consequent
fracture, i s applicable to concrete. The critical strain-energy-release rate may be ascertained by
suitable analytical and experimental procedures and the fracture strength of concrete containing
cracks can thereby be predicted.

Michael F. Good child (20 November 2007)

In recent months there has been an explosion of interest in using the Web to create, assemble, and
disseminate geographic information provided voluntarily by individuals. Sites such as Wikimedia
and OpenStreetMap are empowering citizens to create a global patchwork of geographic

8
information, while Google Earth and other virtual globes are encouraging volunteers to develop
interesting applications using their own data. I review this phenomenon, and examine associated
issues: what drives people to do this, how accurate are the results, will they threaten individual
privacy, and how can they augment more conventional sources? I compare this new phenomenon
to more traditional citizen science and the role of the amateur in geographic observation.

Mark F. Pittance (02 Apr 1999)

Human mesenchyme al stem cells are thought to be multipotent cells, which are present in adult
marrow, that can replicate as undifferentiated cells and that have the potential to differentiate to
lineages of mesenchyme tissues, including bone, cartilage, fat, tendon, muscle, and marrow
stromal. Cells that have the characteristics of human mesenchyme stem cells were isolated from
marrow aspirates of volunteer donors. These cells displayed a stable phenotype and remained as a
monolayer in vitro. These adult stem cells could be induced to differentiate exclusively into the
adipocytes, chondrocytes, or osteocytes lineages. Individual stem cells were identified that, when
expanded to colonies, retained their multiline age potential.

Shanti, N. S.

In this paper, an attempt has been made to evaluate the performance of 32 growth-oriented open-
ended Equity Linked Savings Schemes (ELSS) of tax-saving mutual funds in India. Performance
has been analyzed by comparing the monthly returns of the funds with that of Indian stock market
benchmark Sample CNX NIFTY. For this purpose, risk-adjusted performance measures suggested
by Sharpe, Treynor and Jensen have been used. The Net Asset Value (NAV) of tax saving schemes
from 2006-07 to 2011-12 has been considered. There was volatility in the performance of all the
funds during the entire period of study. All the schemes follow the same pattern in returns and
move along with the stock market index Sample CNX NIFTY. As expected, all the funds showed
negative returns during 2008-09 and it was higher than that of the stock market index. The average
return of most of the schemes is higher and the average risk is lower than the benchmark Sample
CNX NIFTY.

9
Raphie Hayat & Roman Kraus’s (2, June 2011)

Islamic equity funds (IEFs) differ fundamentally from conventional equity funds since Muslims
are prohibited to invest in certain companies/sectors and pay or receive interest. This paper
analyzes the risk and return characteristics of a sample of 145 IEFs over the period 2000 to 2009.
Our results show that IEFs are underperformers compared to Islamic as well as to conventional
equity benchmarks. This underperformance seems to have increased during the recent financial
crisis. We also find that IEF managers are bad market timers. They try to time the market, but in
doing so, reduce the return rather than increasing it. An important implication of our results is that
Muslim investors might improve their performance by investing in index tracking funds or ETFs
rather than to invest in individual IEFs.

Gruber and Christopher R. (2 Apr., 1996)

We examine predictability for stock mutual funds using risk-adjusted returns. We find that past
performance is predictive of future risk-adjusted performance. Applying modern portfolio theory
techniques to past data improves selection and allows us to construct a portfolio of funds that
significantly outperforms a rule based on past rank alone. In addition, we can form a combination
of actively managed portfolios with the same risk as a portfolio of index funds but with higher
mean return. The portfolios selected have small but statistically significant positive risk-adjusted
returns during a period where mutual funds in general had negative risk-adjusted returns.

Jenny Jordan (01 November 2002)

Effective advertising strategies are of growing importance in the mutual fund industry due to keen
competition and changes in market structure. But the dominant variables in financial decision
making, investor's perceived investment risk and expected return, have not yet been analyzed in
an advertising context, although these product related evaluations can be influenced by advertising
and therefore serve as additional indicators of advertising effectiveness. In this study, the authors

10
use a large-scale experimental study (n=499) to detect how risk-return assessments of private
investors are influenced by specific elements of print ads. In this context, judgmental heuristics
used systematically by private investors play a crucial role.

Mahesh K Patel

In this paper the performance evaluation of Indian mutual funds is carried out through relative
Performance index, risk-return analysis, Treynor's ratio, Sharp's ratio, Sharp's measure, Jensen's
Measure, and Fame’s measure. The data used is daily closing NAVs. The source of data is website
of Association of Mutual Funds in India (AMFI). The study period is 1st January 2007 to 31st
December, 2011. The results of performance measures suggest that most of the mutual fund have.
Given positive return during 2007 to 2011.

BURTON G. MALKIEL. June 1995

Several recent studies suggest that equity mutual fund managers achieve superior returns and that
considerable persistence in performance exists. This study utilizes a unique data set including
returns from all equity mutual funds existing each year. These data enable us more precisely to
examine performance and the extent of survivorship bias. In the aggregate, funds have
underperformed benchmark portfolios both after management expenses and even gross of
expenses. Survivorship bias appears to be more important than other studies have estimated.
Moreover, while considerable performance persistence existed during the 1970s, there was no
consistency in fund returns during the 1980s.

11
Kavitha Ranganathan

Consumer behavior from the marketing world and financial economics has brought together to the
surface an exciting area for study and research: behavioral finance. The realization that this is a
serious subject is, however, barely dawning. Analysts seem to treat financial markets as an
aggregate of statistical observations, technical and fundamental analysis. A rich view of research
waits this sophisticated understanding of how financial markets are also affected by the 'financial
behavior' of investors. With the reforms of industrial policy, public sector, financial sector and the
many developments in the Indian money market and capital market, Mutual Funds which has
become an important portal for the small investors, is also influenced by their financial behavior.
Hence, this study has made an attempt to examine the related aspects of the fund selection behavior
of individual investors towards Mutual funds, in the city of Mumbai. From the researchers and
academicians point of view, such a study will help in developing and expanding knowledge in this
field.

12
 CHAPTER - III

COMPANY PROFILE

13
SEBI:
SEBI is a statutory regulatory body established on the 12th of April, 1992. It monitors and
regulates the Indian capital and securities market while ensuring to protect the interests of the
investors formulating regulations and guidelines to be adhered to. The head office of SEBI is in
Bandra Kurla complex, Mumbai.

STRUCTURE OF SEBI:

SEBI has a corporate framework comprising various departments each managed by a department
head. There are about 20+ departments under SEBI. Some of these departments are corporation
finance, economic and policy analysis, debt and hybrid securities, enforcement, human
resources, investment management, commodity derivatives market regulation, legal affairs, and
more.
The hierarchical structure of SEBI consists of the following members:

 The chairman of SEBI is nominated by the Union Government of India.

 Two officers from the Union Finance Ministry will be a part of this structure.
 One member will be appointed from the Reserve Bank of India.
 Five other members will be nominated by the Union Government of India.

Functions of SEBI

 SEBI is primarily set up to protect the interests of investors in the securities market.
 It promotes the development of the securities market and regulates the business.
 SEBI provides a platform for stockbrokers, sub-brokers, portfolio managers, investment
advisers, share transfer agents, bankers, merchant bankers, trustees of trust deeds,
registrars, underwriters, and other associated people to register and regulate work.
 It regulates the operations of depositories, participants, custodians of securities, foreign
portfolio investors, and credit rating agencies.
 It prohibits inner trades in securities, i.e. fraudulent and unfair trade practices related to
the securities market.
 It ensures that investors are educated on the intermediaries of securities markets.
 It monitors substantial acquisitions of shares and take-over of companies.
 SEBI takes care of research and development to ensure the securities market is efficient
at all times.

14
Authority and Power of SEBI
The SEBI has three main powers:
i. Quasi-Judicial: SEBI has the authority to deliver judgements related to fraud and other
unethical practices in terms of the securities market. This helps to ensure fairness, transparency,
and accountability in the securities market.
ii. Quasi-Executive: SEBI is empowered to implement the regulations and judgements made
and to take legal action against the violators. It is also authorized to inspect Books of accounts
and other documents if it comes across any violation of the regulations.
iii. Quasi-Legislative: SEBI reserves the right to frame rules and regulations to protect the
interests of the investors. Some of its regulations consist of insider trading regulations, listing
obligation, and disclosure requirements. These have been formulated to keep malpractices at bay.
Despite the powers, the results of SEBI’s functions still have to go through the Securities
Appellate Tribunal and the Supreme Court of India.

Mutual Fund Regulations by SEBI

Some of the regulations for mutual funds laid down by SEBI are:

1. A sponsor of a mutual fund, an associate or a group company, which includes the asset
management company of a fund, through the schemes of the mutual fund in any form
cannot hold:
(a)10% or more of the shareholding and voting rights in the asset management company
or any other mutual fund.
(b)An asset management company cannot have representation on a board of any other
mutual fund.
2. A shareholder cannot hold 10% or more of the shareholding directly or indirectly in the
asset management company of a mutual fund.
3. No single stock can have more than 35% weight in the index for a sectorial or thematic
index; the cap is 25% for other indices.
4. The cumulative weight of the top three constituents of the index cannot exceed 65%.
5. An individual constituent of the index should have a trading frequency of a minimum of
80%.
6. Funds must evaluate and ensure compliance to the norms at the end of every calendar
quarter. The constituents of the indices must be made public by publishing it on their
website.
7. New funds must submit their compliance status to SEBI before being launched.
8. All liquid schemes must hold a minimum of 20% in liquid assets such as government
securities, repurchase agreement on government Securities, cash, and treasury bills.
9. A debt mutual fund can invest up to only 20% of its assets in one sector; previously the
cap was 25%. The additional exposure to housing finance companies (HFCs) is updated
to 15% from 10% and a 5% exposure on securitized debt based on retail housing loan and
affordable housing loan portfolios.
15
 10. As per SEBI’s recommendation, the amortization is not the only method for evaluating
debt and money market instruments. The market-to-market methodology is also used.
11. An exit penalty will be levied on investors of liquid schemes who exit the scheme within
a period of seven days.
12. Mutual funds schemes must invest only in the listed non-convertible debentures (NCD).
Any fresh investment in commercial papers (CPs) and equity shares are allowed in listed
securities as per the guidelines issued by the regulator.
13. Liquid and overnight schemes are no longer allowed to invest in short-term deposits,
debt, and money market instruments that have structured obligations or credit
enhancements.
14. When investing in debt securities having credit enhancements, a minimum of four times
security cover is mandatory for investing in mutual funds schemes. A prudential limit of
10% is prescribed on total investment by such schemes in debt and money market
instruments.

Mutual Funds and SEBI

Mutual funds are managed by Asset Management Companies (AMC), which need to be
approved by SEBI. A Custodian who is registered with SEBI holds the securities of various
schemes of the fund. The trustees of the AMC monitor the performance of the mutual fund and
ensure that it works in compliance with SEBI Regulations.
The firm must be established as a separate AMC to offer mutual funds. The net worth of such
parent firm or AMC must be Rs. 50,000,000. Mutual funds dealing exclusively with money
markets must register with the Reserve Bank of India (RBI); all other mutual funds must register
with SEBI. Recently, a self-regulation agency for mutual funds has been set up called
Association of Mutual Funds of India (AMFI).
The AMFI is focused on developing the Indian mutual fund industry with professional and
ethical qualities. The AMFI aims to enhance the operational standards in all areas with a view to
protect and promote mutual funds and its stakeholders.
Till date, there are 44 Asset Management Companies that are registered with SEBI and are
members of AMFI. Some of them are Aditya Birla Sun Life AMC Limited, BNP Paribas Asset
Management India Private Limited, Edelweiss Asset Management Limited, and Quant Money
Managers Limited.
A sponsor of a mutual fund scheme, a group of the company or an associate, which involves
AMC of the fund, cannot hold the following in any form:

 10% or above of the voting rights and shareholding in the AMC or any other mutual fund
scheme.
 An AMC cannot have representation on the board of any other mutual fund.
 Shareholders can’t hold more than 10% of the shares both directly and indirectly in AMC
of the mutual fund.

16
SEBI Guidelines on Mutual Funds Reclassification

 Funds must be named based on the core intent of the fund and asset mix. It should specify
the risk associated clearly.
 SEBI has suggested 16 for debt funds, 10 classifications for equity funds, 6
classifications for hybrid, 2 for solution funds, and 2 for index funds.
 SEBI has reclassified large-cap, mid-cap, and small-cap based on market cap relative
rankings rather than absolute market cap cut-offs.
 The debt fund classification is prescribed based on the duration of the fund and the asset
quality mix.
All categories except index funds can only have one fund per classification, i.e. an AMC
can have a maximum of 34 funds other than index funds.

COMPANY PROFILE
Angel Broking's tryst with excellence in customer relations began in 1987. Today, Angel has
emerged as one of the most respected Stock-Broking and Wealth Management Companies in
India. With its unique retail-focused stock trading business model, Angel is committed to
providing ‘Real Value for Money’ to all its clients.

The Angel Group is a member of the Bombay Stock Exchange (BSE), National Stock Exchange
(NSE) and the two leading Commodity Exchanges in the country: NCDEX & MCX. Angel is
also registered as a Depository Participant with CDSL.

OUR BUSINESS:
▪ Equity Trading
▪ Commodities
▪ Portfolio Management Services
▪ Mutual Funds
▪ Life Insurance
▪ IPO
▪ Depository Services
▪ Investment Advisory
▪ Angel Group
▪ Angel Broking Ltd.
▪ Angel Commodities Broking Ltd.
▪ Angel Securities Ltd.

17
Our Vision
To provide best value for money to investors through
innovative products, trading/investments strategies,
state of the art technology and personalized service.

Our Motto

To have complete harmony between quality-in-process and

continuous improvement to deliver exceptional service that will
delight our Customers and Clients.

Our CRM Policy : Customer is King

“A Customer is the most Important Visitor on our

premises. He is not dependent on us, but we are
dependent on him. He is not an interruption in our
work. He is the purpose of it. He is not an outsider in
our business. He is part of it. We are not doing him a
favor by serving him. He is doing us a favor by
giving us an opportunity to do so.”
- Mahatma Gandhi

Business Philosophy

● Ethical practices & transparency in all our dealings

● Customers interest above our own
● Always deliver what we promise
● Effective cost management

18
Our Quality Assurance Policy

We are committed to providing world-class products and services

which exceed
the expectations of our customers, achieved by teamwork and a
process of
continuous improvement.

19
Mr. Dinesh Thakkar
Founder Chairman & Managing Director
The Angel Group of Companies was brought to life by Mr. Dinesh Thakkar. He ventured into
stock trading with an intention to raise capital for his own independent enterprise. However, he
recognized the opportunity offered by the stock market to serve individual investors. Thus
India’s first retail-focused stock-broking house was established in 1987. Under his leadership,
Angel became the first broking house to embrace new technology for faster, more effective and
affordable services to retail investors.

Mr. Thakkar is valued for his understanding of the economy and the stock-market. The print and
electronic media often seek his views on the market trend as well as investment strategies.

Mr. Lalit Thakkar

Managing Director – Institutional broking
Mr. Lalit Thakkar is the motivating force behind Angel’s highly acclaimed Research team. He’s
been a part of the senior management team since the Angel Group’s inception. His technical and
fundamental outlook has provided impetus to Angel’s market research team. Research-based &
personalized advisory services are Angel’s forte, and Mr. Lalit Thakkar has undoubtedly been
the brain behind it.

When it comes to analyzing the market, Mr. Lalit Thakkar is truly a genius. His hands-on
experience and fundamental knowledge of the market can predict the market trend early. His
views on the market trend are often quoted in the print and electronic media.

Investing in shares or stock market is inarguably the best route to long-term wealth
accumulation. However, it can also be a very risky proposition due to high risk-return trade-off
prevalent in the stock market. Hence, it is more appropriate to take help of an experienced and
trustworthy expert who will guide you as to when, where and how to invest. Angel provides
guidance in the exciting world of stock market with suitable trading solutions and value-added
tools and services to enhance your trading experience.

Online Trading

Three different online products tailored for traders & investors

Customized single screen Market Watch for multiple exchanges
Real-time rates
Flash news & intra-day calls
Intra-day & historical charts with technical tools
Online research
E-broking & back-office software training
Quality Research
Wide range of daily, weekly and special Research reports
Expert Sector Analysts with professional industry experience
Advisory
Real-time market information with News updates

20
Investment Advisory services
Dedicated Relationship Managers
Portfolio Management Services
Support

24x7 Web-enabled Back Office

Centralized Help Desk
Live Chat support system
The derivative segment is a highly lucrative market that gives investors an opportunity to earn
superlative profits (or losses) by paying a nominal amount of margin. Over past few years,
Future & Options segment has emerged as a popular medium for trading in financial markets.
Future contracts are available on Equities, Indices, Currency and Commodities.

Angel with its membership as Trading and Clearing Member of NSE F&O Segment and BSE
Derivatives Segment, provides you a gateway to the exciting world of derivative market.
Work Culture. At Angel, we keep exploring new paths to provide the best value to all our
internal and external customers. We consider people as our biggest asset and believe in creating
long term relationships by nurturing talent from within. A fast-growing, forward-looking
organization like ours, demands HR to be a key responsibility area of our core management
team.

Our HR team constantly explores ways to enhance and augment the knowledge base and
productivity of all Angels by providing various learning and development Programs. Our three
tier Leadership Development program helps all star performers to grow and develop their
managerial skills to become effective mentors for their teams and thereby take on the next level
of responsibility effectively. Ours is a winning team of highly determined, motivated, and
adaptable people, all working diligently to take Angel's exciting success story forward.

21
 ● Work ● HR Philosophy ● Employee ● Performance
Culture ● Leadership Engagement Management
● Career Academy ● Proud to be an ● PF and FNF
Angel Status

HR Philosophy
At Angel, People come first. Along with our customers, our employees are equally vital to our
organization. The Business of HR is to foster an entrepreneurial spirit – whereby Angels can
operate with ownership as an entrepreneur (profit center) within the confines of their job role and
earn over and above their fixed salaries.

We believe in inculcating a sense of responsibility and ownership in all Angels which brings out
the entrepreneurial zeal to explore potential within as well as beyond job boundaries.

Our HR Philosophy is to engage employees at professional, emotional and material levels.

● We aim to create an environment conducive to both personal and professional

development of the employees, leading to a productive and happy work force
● Angel believes that people impact business and therefore each and every Angel is a key
resource and a valuable asset
● Our business philosophy of being transparent in all our dealings with our customers, is
equally applicable in dealings with employees
● We encourage initiative, provide professional freedom and empower Angels based on
trust

22
ONLINE SHARE TRADING

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Enjoy access to comprehensive market information with Angel Market Watch. Get instant online
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Angel Broking Stock Trading, Demat, Brokerage and Reviews 2016

Angel Group has emerged as one of the top 3 retail broking houses in India. Incorporated in
1987, it has memberships on BSE, NSE and the two leading commodity exchanges in India i.e.
NCDEX & MCX. Angel is also registered as a depository participant with CDSL.

Angel's retail stock broking house offering a gamut of retail centric services.

● Ebroking
● Investment Advisory
● Portfolio Management Services
● Wealth Management Services

23
 ● Commodities Trading

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Angel Broking Rating (by the customers)

67 Votes

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Angel Broking's Trading Platforms

Angel Broking offers 5 trading platforms to its customers:

1. Angel Eye

A browser-based portfolio tracking & trading application with various features including a
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2. Angel SpeedPro

An application trading platform that provides automatic updates; makes the market
accessible to investors from different terminals along with other features.

24
3. Angel Trade

It is a browser based trading platform. The rates are updated automatically. This platform is
useful for investors & traders to access market from different terminals.

4. Angel Lite

A browser-based mobile trading tool that can be used with low GPRS connectivity. This
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5. Angel Swift

An app for accessing the markets and for trading using smart phones and other tablet
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Equity and Commodity Market using this platform.

25
 CHAPTER-IV

THEORETICAL FRAMEWORK

26
Mutual Fund:

A mutual fund is a pool of money from numerous investors who wish to save or make money just
like you. Investing in a mutual fund can be a lot easier than buying and selling individual stocks
and bonds on your own. Investors can sell their shares when they want.

Professional Management.

Each fund's investments are chosen and monitored by qualified professionals who use this money
to create a portfolio. That portfolio could consist of stocks, bonds, money market instruments or a
combination of those.

Fund Ownership.

As an investor, you own shares of the mutual fund, not the individual securities. Mutual funds
permit you to invest small amounts of money, however much you would like, but even so, you can
benefit from being involved in a large pool of cash invested by other people. All shareholders share
in the fund’s gains and losses on an equal basis, proportionately to the amount they've invested.

Mutual Funds are diversified.

By investing in mutual funds, you could diversify your portfolio across a large number of securities
so as to minimize risk. By spreading your money over numerous securities, which is what a mutual
fund does, you need not worry about the fluctuation of the individual securities in the fund's
portfolio.

27
Mutual Fund Objectives:

There are many different types of mutual funds, each with its own set of goals. The investment
objective is the goal that the fund manager sets for the mutual fund when deciding which stocks
and bonds should be in the fund's portfolio.

For example, an objective of a growth stock fund might be: This fund invests primarily in the
equity markets with the objective of providing long-term capital appreciation towards meeting
your long-term financial needs such as retirement or a child’s education.

Depending on investment objectives, funds can be broadly classified in the

following 5 types:

Aggressive growth means that you will be buying into stocks which have a chance for dramatic
growth and may gain value rapidly. This type of investing carries a high element of risk with it
since stocks with dramatic price appreciation potential often lose value quickly during downturns
in the economy. It is a great option for investors who do not need their money within the next five
years, but have a more long-term perspective. Do not choose this option when you are looking to
conserve capital but rather when you can afford to potentially lose the value of your investment.

As with aggressive growth, growth seeks to achieve high returns; however, the portfolios will
consist of a mixture of large-, medium- and small-sized companies. The fund portfolio chooses to
invest in stable, well established, blue-chip companies together with a small portion in small and
new businesses. The fund manager will pick, growth stocks which will use their profits grow,
rather than to pay out dividends. It is a medium - long-term commitment, however, looking at past
figures, sticking to growth funds for the long-term will almost always benefit you. They will be
relatively volatile over the years so you need to be able to assume some risk and be patient.

A combination of growth and income funds, also known as balanced funds, are those that have a
mix of goals. They seek to provide investors with current income while still offering the potential
for growth. Some funds buy stocks and bonds so that the portfolio will generate income whilst still
keeping ahead of inflation. They are able to achieve multiple objectives which may be exactly
what you are looking for. Equities provide the growth potential, while the exposure to fixed income

28
securities provides stability to the portfolio during volatile times in the equity markets. Growth
and income funds have a low-to-moderate stability along with a moderate potential for current
income and growth. You need to be able to assume some risk to be comfortable with this type of
fund objective.

That brings us to income funds. These funds will generally invest in a number of fixed-income
securities. This will provide you with regular income. Retired investors could benefit from this
type of fund because they would receive regular dividends. The fund manager will choose to buy
debentures, company fixed deposits etc. in order to provide you with a steady income. Even though
this is a stable option, it does not go without some risk. As interest-rates go up or down, the prices
of income fund shares, particularly bonds, will move in the opposite direction. This makes income
funds interest rate sensitive. Some conservative bond funds may not even be able to maintain your
investments' buying power due to inflation.

The most cautious investor should opt for the money market mutual fund which aims at
maintaining capital preservation. The word preservation already indicates that gains will not be an
option even though the interest rates given on money market mutual funds could be higher than
that of bank deposits. These funds will pose very little risk but will also not protect your initial
investments' buying power. Inflation will eat up the buying power over the years when your money
is not keeping up with inflation rates. They are, however, highly liquid so you would always be
able to alter your investment strategy.

TYPES OF MUTUAL FUNDS

Closed-End Funds:

A closed-end fund has a fixed number of shares outstanding and operates for a fixed duration
(generally ranging from 3 to 15 years). The fund would be open for subscription only during a
specified period and there is an even balance of buyers and sellers, so someone would have to be
selling in order for you to be able to buy it. Closed-end funds are also listed on the stock exchange
so it is traded just like other stocks on an exchange or over the counter. Usually the redemption is

29
also specified which means that they terminate on specified dates when the investors can redeem
their units.

Open-End Funds:

An open-end fund is one that is available for subscription all through the year and is not listed on
the stock exchanges. The majority of mutual funds are open-end funds. Investors have the
flexibility to buy or sell any part of their investment at any time at a price linked to the fund's Net
Asset Value.

Benefits of mutual funds:

Stocks, bonds, money market instruments-as an investor, you have a wide variety of choices, and
it would be difficult to find one type of investment vehicle that effectively takes Advantage of all
of today investment options. That's why you may want to consider diversifying your portfolio over
a variety of investment vehicles as mutual funds do for you. In addition to providing you with the
flexibility to create an investment plan based on your individual goals, mutual funds offer many
other advantages such as professional management, affordability and diversification.

Benefits of investing in a mutual fund:

As an investor, you would like to get maximum returns on your investments, but you may not have
the time to continuously study the stock market to keep track of them. You need a lot of time and
knowledge to decide what to buy or when to sell. A lot of people take a chance and speculate,
some get lucky, most don t. This is where mutual funds come in. Mutual funds offer you the
following advantages:

30
Professional management.

Qualified professionals manage your money, but they are not alone. They have a research team
that continuously analyses the performance and prospects of companies. They also select suitable
investments to achieve the objectives of the scheme. It is a continuous process that takes time and
expertise which will add value to your investment. Fund managers are in a better position to
manage your investments and get higher returns.

Diversification:

The cliché, "don't put all your eggs in one basket" really applies to the concept of intelligent
investing. Diversification lowers your risk of loss by spreading your money across various
industries and geographic regions. It is a rare occasion when all stocks decline at the same time
and in the same proportion. Sector funds spread your investment across only one industry so they
are less diversified and therefore generally more volatile.

More choice:

Mutual funds offer a variety of schemes that will suit your needs over a lifetime. When you enter
a new stage in your life, all you need to do is sit down with your financial advisor who will help
you to rearrange your portfolio to suit your altered lifestyle.

Affordability:

As a small investor, you may find that it is not possible to buy shares of larger corporations. Mutual
funds generally buy and sell securities in large volumes which allow investors to benefit from
lower trading costs. The smallest investor can get started on mutual funds because of the minimal
investment requirements. You can invest with a minimum of Rs.500 in a Systematic Investment
Plan on a regular basis.

Tax benefits:

Investments held by investors for a period of 12 months or more qualify for capital gains and will
be taxed accordingly. These investments also get the benefit of indexation.

31
Liquidity:

With open-end funds, you can redeem all or part of your investment any time you wish and receive
the current value of the shares. Funds are more liquid than most investments in shares, deposits
and bonds. Moreover, the process is standardized, making it quick and efficient so that you can
get your cash in hand as soon as possible.

Rupee-cost averaging:

With rupee-cost averaging, you invest a specific rupee amount at regular intervals regardless of
the investment's unit price. As a result, your money buys more units when the price is low and
fewer units when the price is high, which can mean a lower average cost per unit over time. Rupee-
cost averaging allows you to discipline yourself by investing every month or quarter rather than
making sporadic investments.

Transparency:

The performance of a mutual fund is reviewed by various publications and rating agencies, making
it easy for investors to compare fund to another. As a unit holder, you are provided with regular
updates, for example daily NAVs, as well as information on the fund's holdings and the fund
manager's strategy.

Regulations:

All mutual funds are required to register with SEBI (Securities Exchange Board of India). They
are obliged to follow strict regulations designed to protect investors. All operations are also
regularly monitored by the SEBI.

Investing In Equities:

The following common investment approach runs through our diversified and sector equity funds.

32
Bottom-Up Approach:

We follow a bottom-up approach to stock picking. Our goal is to pick the best companies
regardless of the sector. And once our fund managers are confident about a company's prospects,
they fully back their decision, investing heavily into that company. That's why typically the top 5
to 10 companies in a portfolio account for a substantial portion of the fund's total assets'. However,
we do keep a close watch on sector exposure in diversified funds and individual stock exposure in
sector funds to ensure that the exposure does not tilt too much towards one sector or stock.

Fundamental Investors:

We are fundamental investors. We rely on in-house research as the basis for our investment
decision-making. Our research is not restricted to looking at the financial numbers - it goes much
beyond the published reports. Our fund managers and research analysts meet as many people in a
company as possible to get a much better overall perspective and to discover the not-so-obvious
pieces and trends that can turn into big opportunities over time.

Focus on Quality:

We focus on 'quality'. Companies where we have the slightest doubts on management or the
Quality of their financials and business models are ignored. Our focus on quality and an aversion
to excessively speculative companies may result in giving up short-term gains as happens when
markets overheat, but this strategy gives our funds superior performance over market cycles.

Long-Term Investors:

We are patient investors and do not get perturbed by market volatility. Once we have identified
'value' in a stock and invested, we stick to it as long as there are no fundamental ‘negative’ changes
even if the particular stock goes out-of-favor in the market. In fact, we use volatility as an
opportunity to buy more as we believe that sooner or later, the market will recognize the inherent
value and the stock will bounce back.

33
Methodical and Deliberate:

We are also methodical and deliberate in our investment style. We focus more on emerging themes,
the big picture and the long term-ignoring rumors, 'hot tips' and 'whisper estimates'.

Look for Trends:

We believe spotting changes and trends early can be rewarding. So we try to understand not just
how companies and industries are today but also how they will be tomorrow. As a result, we make
substantial investments to ensure that we have a grasp on significant changes.

We put Unit holder First:

We take our responsibility as custodians of our investors' money seriously. While we are proud of
our industry-leading performance, we understand that just resting on our laurels is not enough.
Teamwork and a disciplined approach, rather than flamboyance, are the keys to investing success.

Investing in debt:

Our approach to fixed-income investing emphasizes a single-minded focus on delivering steady

returns while carefully controlling risk factors.

We believe that safety is of paramount importance and do not hesitate to give up short term
speculative gains.

We manage default risk through a careful selection process including analysis of the rating, the
integrity and efficiency of management, the general finances of the company, and an in-depth
study of the specific borrowing program. (Why is the money needed? Is the expansion necessary?
Will it generate sufficient revenues to interest and principal?

We manage interest-rate risk by maintaining the portfolio maturity of the fund at intermediate
levels and do not believe in timing the market interest rates.

We maintain a prudent balance between government securities and corporate bonds, and ensure
adequate diversification through strict limits on single company exposures.

34
We take advantage of our strong and proprietary equity research, to help identify the strongest
issuers of debt and discover undervalued sectors.

We have stringent liquidity norms to ensure that the portfolio can be liquidated at any time to meet
redemptions.

Advantages of mutual funds:

The advantages of mutual funds are as follows.

1) Advanced Portfolio Management:

You pay a management fee as part of your expense ratio, which is used to hire a professional
portfolio manager who buys and sells stocks, bonds, etc. This is a relatively small price to pay for
help in the management of an investment portfolio.

2) Dividend Reinvestment:

As dividends and other interest income is declared for the fund, it can be used to purchase
additional shares in the mutual fund, thus helping your investment grow.

3) Risk Reduction (Safety):

A reduced portfolio risk is achieved through the use of diversification, as most mutual funds will
invest in anywhere from 50 to 200 different securities - depending on their focus. Several index
stock mutual funds own 1,000 or more individual stock positions.

35
4) Convenience and Fair Pricing

Mutual funds are common and easy to buy. They typically have low minimum investments (some
around $2,500) and they are traded only once per day at the closing net asset value (NAV). This
eliminates price fluctuation throughout the day and various arbitrage opportunities that day traders
practice.

Disadvantages of Mutual Funds

1) No Control over Portfolio.

If you invest in a fund, you give up all control of your portfolio to the mutual fund money managers
who run it.

2) Capital Gains.
Anytime you sell stock, you’re taxed on your gains. However, in a mutual fund, you’re taxed
when the fund distributes gains it made from selling individual holdings – even if you
haven’t sold your shares. If the fund has high turnover, or sells holdings often, capital gains
distributions could be an annual event. That is, unless you’re investing via a Roth IRA,
traditional IRA, or employer-sponsored retirement plan like the 401k.

3) Fees and Expenses.

Some mutual funds may assess a sales charge on all purchases, also known as a “load” – this is
what it costs to get into the fund. Plus, all mutual funds charge annual expenses, which are
conveniently expressed as an annual expense ratio – this is basically the cost of doing
business. The expense ratio is expressed as a percentage, and is what you pay annually as
a portion of your account value. The average for managed funds is around 1.5%.
Alternatively, index funds charge much lower expenses (0.25% on average) because they
are not actively managed. Since the expense ratio will eat directly into gains on an annual
basis, closely compare expense ratios for different funds you’re considering.

36
 4) Cash Drag.
Mutual funds need to maintain assets in cash to satisfy investor redemptions and to maintain
liquidity for purchases. However, investors still pay to have funds sitting in cash because
annual expenses are assessed on all fund assets, regardless of whether they’re invested or
not. According to a study by William O’Reilly, CFA and Michael Preisano, CFA,
maintaining this liquidity costs investors 0.83% of their portfolio value on an annual basis.

Risk and Returns.

Returns are the gains or losses from a security in a particular period and are usually quoted as a
percentage. What kind of returns can investors expect from the capital markets? A number of
factors influence return.

Risk:

In the investing world, the dictionary definition of risk is the chance that an investment's actual
return will be different than expected. Risk means you have the possibility of losing some, or even
all, of your original investment. Low levels of uncertainty (low risk) are associated with low
potential returns. High levels of uncertainty (high risk) are associated with high potential

Returns. The risk/return tradeoff is the balance between the desire for the lowest possible risk and
the highest possible return. Investment risks can be divided into two categories: systematic and
unsystematic.

Systematic Risk:

Also known as "market risk" or "un-diversifiable risk", systematic risk is the uncertainty inherent
to the entire market or entire market segment. Also referred to as volatility, systematic risk is the
day-to-day fluctuations in a stock's price. Volatility is a measure of risk because it refers to the
behavior, or "temperament," of your investment rather than the reason for this behavior. Because

37
market movement is the reason why people can make money from stocks, volatility is essential for
returns, and the more unstable the investment the more chance there is that it will experience a
dramatic change in either direction

Interest rates, recession and wars all represent sources of systematic risk because they affect the
entire market and cannot be avoided through diversification. Systematic risk can be mitigated only
by being hedged.

Unsystematic Risk:

Also known as "specific risk," "diversifiable risk" or "residual risk," this type of uncertainty comes
with the company or industry you invest in and can be reduced through diversification. For
example, news that is specific to a small number of stocks, such as a sudden strike by the
employees of a company you have shares in, is considered to be unsystematic risk.

Credit or Default Risk:

Credit risk is the risk that a company or individual will be unable to pay the contractual interest or
principal on its debt obligations. This type of risk is of particular concern to investors who hold
bonds in their portfolios. Government bonds, especially those issued by the federal government,
have the least amount of default risk and the lowest returns, while corporate bonds tend to have
the highest amount of default risk but also higher interest rates. Bonds with a lower chance of
default are considered to be investment grade, while bonds with higher chances of default are
considered to be junk bonds. Bond rating services, such as Moody's, allows investors to determine
which bonds are investment-grade and which bonds are junk.

38
Country Risk:

Country risk refers to the risk that a country won't be able to honor its financial commitments.
When a country defaults on its obligations it can harm the performance of all other financial
instruments in that country as well as other countries it has relations with. Country risk applies to
stocks, bonds, mutual funds, options and futures that are issued within a particular country. This
type of risk is most often seen in emerging markets or countries that have a severe deficit.

Foreign-Exchange Risk:

When investing in foreign countries you must consider the fact that currency exchange rates can
change the price of the asset as well. Foreign-exchange risk applies to all financial instruments that
are in a currency other than your domestic currency. As an example, if you are a resident of
America and invest in some Canadian stock in Canadian dollars, even if the share value
appreciates, you may lose money if the Canadian dollar depreciates in relation to the American
dollar.

Interest Rate Risk:

Interest rate risk is the risk that an investment's value will change as a result of a change in interest
rates. This risk affects the value of bonds more directly than stocks.

Political Risk:

Political risk represents the financial risk that a country's government will suddenly change its
policies. This is a major reason why developing countries lack foreign investment.

39
Returns:

Taxes:

Different types of investments are taxed differently. The type of account an investment is held in
and a taxpayer's tax bracket also affect the amount by which taxes diminish investment returns.
For example, the interest paid on municipal bond investments is generally not taxable, and gains
on investments held in a retirement account like an IRA or 401(k) are not taxable until the money
is withdrawn.

Fees:

Investors pay brokerage fees to buy and sell certain investments. They also pay management fees.
These fees diminish investment returns.

Compounding:

As we discussed in Section 4, the frequency with which your investment returns are reinvested
and able to earn additional returns can significantly impact your total returns. The more frequently
earnings are compounded, the better. Daily compounding is better than annual compounding.

Now that we understand the major factors that influence returns, let's look at the historical returns,
average returns and variability of returns from investing in the stock and bond mar

40
41
 CHAPTER-V

DATA ANALYSIS AND INTERPRETATION

42
DATA • The basic objective of the present study is to evaluate the
performance of selected mutual funds in India.
UTI MUTUAL FUNDS (EQUITY FUNDS – GROWTH):
UTI MUTUAL FUNDS NIFTY
DATE OPEN CLOSE RR OPEN CLOSE RR
1 Mar 2014 to 30 Jun2014 69.21 85.4 23.39 6729.5 6696 -0.49
1 July 2014 to 30 Sep 2014 86.44 91.94 6.36 7629 7721 1.21
1 Oct 2014 to 31 Dec 2014 91.81 98.58 7.37 7990.4 8322 4.15
1 Jan 2015 to 31 Mar 2015 99.14 102.94 3.83 8272.8 8809 6.48
1 Apr 2015 to 30 Jun 2015 104.11 101.6 -2.41 8953.9 8182 -8.63
1 July 2015 to 30 Sep 2015 102.69 100.46 -2.17 8376.3 8533 1.87
1 Oct 2015 to 31 Dec 2015 101.01 99.9 -1.10 7992.1 8066 0.92
1 Jan 2016 to 31 Mar 2016 100.3 96.62 -3.67 7938.5 7564 -4.72
1 Apr 2016 to 30 Jun 2016 96.47 104.25 8.06 7718.1 7850 1.71
1 July 2016 to 30 Sep 2016 104.81 109.83 4.79 8313.1 8639 3.91
1 Oct 2016 to 31 Dec 2016 111.86 101.04 -9.67 8666.2 8626 -0.47
1 Jan 2017 to 31 Mar 2017 100.84 114.61 13.66 8210.1 8561 4.28
1 Apr 2017 to 30 Jun 2017 114.83 118.22 2.95 9220.6 9304 0.91
1 July 2017 to 30 Sep 2017 119.54 121.85 1.93 9588 10077 5.10
1 Oct 2017 to 31 Dec 2017 122.52 131.45 7.29 9893.3 10335 4.47
1 Jan 2018 to 31 Mar 2018 130.39 128.5 -1.45 10532 11028 4.71
1 Apr 2018 to 30 Jun 2018 130.68 138.5 5.98 10152 10739 5.79
1 July 2018 to 30 Sep 2018 138.54 134.83 -2.68 10732 11357 5.82
1 Oct 2018 to 31 Dec 2018 135.36 136.08 0.53 11752 10930 -6.99
1 Jan 2019 to 31 Mar 2019 136.28 140.46 3.07 10843 11514 6.19
AVG 3.30 AVG 1.93
S.D 6.90 S.D 4.22
VAR 47.60 VAR 17.83

43
 (𝑐𝑜𝑣𝑎𝑟.𝑟𝑝,𝑟𝑚) (6.54)
Beta = = =0.37
𝑐𝑜𝑣𝑎𝑟.𝑚 17.83

INTERPRETATION

From the above calculation UTI Mutual Fund is from the year March 2014 to Jan 2019.The rate
of return highest in the quarter of March 2014 to June 2014 with rate of return as 23.39 and the
lowest rate of return in the quarter of Oct 2016 to Dec 2016 as -9.67 and from the above calculation
of The overall positive total return of UTI Mutual Fund is 3.30.The Beta Value 0.37.

44
 (𝑹𝒑−𝑹𝒇) (𝟑.𝟑𝟎−𝟏.𝟖𝟏)
Treynor’s Ratio = = = 3.67
𝑩𝒑 𝟎.𝟑𝟕

INTERPRETATION

Treynor ratio is a measure of returns earned in excess of the risk-free return at a given level of
market risk. It highlights the risk-adjusted returns generated by a mutual fund scheme. This ratio
was given by Jack Treynor thereby expanding the contribution of William Sharpe towards modern
portfolio theory. The calculated Treynor’s ratio is 3.67 which means 3.67 time’s higher market
and volatility rate.

(𝑹𝒑−𝑹𝒇) (𝟑.𝟑𝟎−𝟏.𝟖𝟏)
Sharpe’s Ratio = = = 0.19
𝝈𝒑 𝟔.𝟗𝟎

INTERPRETATION

Components of the Ratio. When analyzing the Sharpe ratio, the higher the value, the more excess
return investors can expect to receive for the extra volatility they are exposed to by holding a riskier
asset. Similarly, a risk-free asset or a portfolio with no excess return would have a Sharpe ratio of
zero. The calculated Sharpe’s ratio is 0.19 which means 0.19 time’s higher market and volatility
rate.

45
SBI MUTUAL FUDS (SMALL CAP FUNDS – GROWTH):

SBI MUTUAL FUNDS NIFTY

DATE OPEN CLOSE RR OPEN CLOSE RR
1 Mar 2014 to 30 Jun 2014 14.6 20.02 37.12 6729.5 6696.4 -0.49
1 July 2014 to 30 Sep 2014 20.33 23.99 18.00 7629 7721.3 1.21
1 Oct 2014 to31 Dec 2014 23.61 28.9 22.41 7990.35 8322.2 4.15

1 Jan 2015 to 31 Mar 2015 28.83 29.71 3.05 8272.8 8808.9 6.48

1 Apr 2015 to 30 Jun 2015 30.22 31.05 2.75 8953.85 8181.5 -8.63

1 July 2015 to 30 Sep 2015 31.71 31.64 -0.22 8376.25 8532.9 1.87

1 Oct 2015 to 31 Dec 2015 31.78 34.87 9.72 7992.05 8065.8 0.92

1 Jan 2016 to 31 Mar 2016 34.5 32.1 -6.96 7938.45 7563.6 -4.72

1 Apr 2016 to 30 Jun 2016 31.89 34.37 7.78 7718.05 7849.8 1.71

1 July 2016 to 30 Sep 2016 34.41 38.39 11.57 8313.05 8638.5 3.91

1 Oct 2016 to 31 Dec 2016 38.24 36.05 -5.73 8666.15 8625.7 -0.47

1 Jan 2017 to 31 Mar 2017 36.04 42.34 17.48 8210.1 8561.3 4.28

1 Apr 2017 to 302017 42.48 45.34 6.73 9220.6 9304.1 0.91

1 July 2017 to 30 Sep 2017 45.4 51.24 12.86 9587.95 10077 5.10

1 Oct 2017 to 31 Dec 2017 51.27 65.34 27.44 9893.3 10335 4.47

1 Jan 2018 to 31 Mar 2018 65.45 58.04 -11.32 10531.7 11028 4.71

1 Apr 2018 to 30 Jun 2018 58.18 51.1 -12.17 10151.7 10739 5.79

1 July 2018 to 30 Sep 2018 51.64 47.24 -8.52 10732.4 11357 5.82
1 Oct 2018 to 31 Dec 2018 46.94 49.85 6.20 11751.8 10930 -6.99

1 Jan 2019 to 31 Mar 2019 49.89 47.81 -4.17 10842.9 11514 6.19
AVG 6.70 AVG 1.81
S.D 13.31 S.D 4.33
VAR 168.36 VAR 17.83

46
 Beta

(𝑐𝑜𝑣𝑎𝑟.𝑟𝑝,𝑟𝑚) (−1.04)
= = = 0.058
𝑐𝑜𝑣𝑎𝑟.𝑚 17.83

INTERPRETATION

From the above calculation SBI Mutual Fund is from the year March 2014 to Jan 2019.The rate of
return highest in the quarter of March 2014 to June 2014 with rate of return as 37.12 and the lowest
rate of return in the quarter of Apr 2018 to Jun 2018 as -12.17 and from the above calculation of
The overall positive total return of SBI Mutual Fund is 6.70.The Beta Value 0.058.

47
 (𝑅𝑝−𝑅𝑓) (6.70−1.81)
Treynor’s Ratio = = = -83.83
𝐵𝑝 −0.058

INTERPRETATION

Treynor ratio is a measure of returns earned in excess of the risk-free return at a given level of
market risk. It highlights the risk-adjusted returns generated by a mutual fund scheme. This ratio
was given by Jack Treynor thereby expanding the contribution of William Sharpe towards modern
portfolio theory. The calculated Treynor’s ratio is -83.83 which means -83.83 time’s higher market
and volatility rate.

(𝑅𝑝−𝑅𝑓) (6.70−1.81)
Sharpe’s Ratio = = = 0.36
𝜎𝑝 6.90

INTERPRETATION

Components of the Ratio. When analyzing the Sharpe ratio, the higher the value, the more excess
return investors can expect to receive for the extra volatility they are exposed to by holding a riskier
asset. Similarly, a risk-free asset or a portfolio with no excess return would have a Sharpe ratio of
zero. The calculated Sharpe’s ratio is 0.36 which means 0.36 time’s higher market and volatility
rate.

48
AXIS MUTUAL FUNDS (EQUITY FUNDS –DIRECT PIAN –GROWTH):

AXIS MUTUAL FUNDS NIFTY

DATE OPEN CLOSE RR OPEN CLOSE RR
1 March 2014 to 30 June 2014 14.09 17.42 23.63 6729.5 6696.4 -0.49
1 July 2014 to 30 Sep 2014 17.65 18.14 2.78 7629 7721.3 1.21
1 Oct 2014 to 31 Dec 2014 18.06 19.65 8.80 7990.35 8322.2 4.15
1 Jan 2015 to 31 Mar 2015 19.77 19.99 1.11 8272.8 8808.9 6.48
1 Apr 2015 to 30 Jun 2015 20.19 19.89 -1.49 8953.85 8181.5 -8.63
1 July 2015 to 30 Sep 2015 20.09 19.35 -3.68 8376.25 8532.9 1.87
1 Oct 2015 to 31 Dec 2015 19.39 19.71 1.65 7992.05 8065.8 0.92
1 Jan 2016 to 31 Mar 2016 19.79 18.89 -4.55 7938.45 7563.6 -4.72
1 Apr 2016 to 30 Jun 2016 18.83 20.31 7.86 7718.05 7849.8 1.71
1 July 2016 to 30 Sep 2016 20.41 21.17 3.72 8313.05 8638.5 3.91
1 Oct 2016 to 31 Dec 2016 21.62 19.19 -11.24 8666.15 8625.7 -0.47

1 Jan 2017 to 31 Mar 2017 19.21 21.86 13.79 8210.1 8561.3 4.28
1 Apr 2017 to 30 Jun 2017 22 23.36 6.18 9220.6 9304.1 0.91
1 July 2017 to 30 Sep 2017 23.58 24.99 5.98 9587.95 10077 5.10
1 Oct 2017 to 31 Dec 2017 25.12 26.42 5.18 9893.3 10335 4.47
1 Jan 2018 to 31 Mar 2018 26.6 26.19 -1.54 10531.7 11028 4.71
1 Apr 2018 to 30 Jun 2018 26.61 28.87 8.49 10151.7 10739 5.79
1 July 2018 to 30 Sep 2018 28.86 28.31 -1.91 10732.4 11357 5.82
1 Oct 2018 to 31 Dec 2018 28.33 28.99 2.33 11751.8 10930 -6.99
1 Jan 2019 to 31 Mar 2019 29.06 29.74 2.34 10842.9 11514 6.19
AVG 3.47 AVG 1.81
S.D 7.16 S.D 4.22
VAR 51.25 VAR 17.8
3

49
 (𝑐𝑜𝑣𝑎𝑟.𝑟𝑝,𝑟𝑚) (5.95)
Beta = = = 0.334
𝑐𝑜𝑣𝑎𝑟.𝑚 17.83

INTERPRETATION

From the above calculation AXIS Mutual Fund is from the year March 2014 to Jan 2019.The rate
of return highest in the quarterly of March 2014 to June 2014 with rate of return as 23.63 and
the lowest rate of return in the quarterly of Oct 2016 to Dec 2016 as -11.24 and from the above
calculation of positive total return of AXIS Mutual Fund is 3.47.The Beta Value as 0.334.

50
 (𝑅𝑝−𝑅𝑓) (3.47−1.81)
Treynor’s Ratio = = = 4.97
𝐵𝑝 0.334

INTERPRETATION

Treynor ratio is a measure of returns earned in excess of the risk-free return at a given level of
market risk. It highlights the risk-adjusted returns generated by a mutual fund scheme. This ratio
was given by Jack Treynor thereby expanding the contribution of William Sharpe towards modern
portfolio theory. The calculated Treynor’s ratio is 4.97 which means 4.97 time’s higher market
and volatility rate.

(𝑅𝑝−𝑅𝑓) (3.47−1.81)
Sharpe’s Ratio = = = 0.23
𝜎𝑝 7.16

INTERPRETATION

Components of the Ratio. When analyzing the Sharpe ratio, the higher the value, the more excess
return investors can expect to receive for the extra volatility they are exposed to by holding a riskier
asset. Similarly, a risk-free asset or a portfolio with no excess return would have a Sharpe ratio of
zero. The calculated Sharpe’s ratio is 0.23 which means 0.23 time’s higher market and volatility
rate.

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RELIANCE MUTUAL FUNDS (INCOME FUND-GROWTH):

RELIANCE MUTUAL FUNDS NIFTY

DATE OPEN CLOSE RR OPEN CLOSE RR
1 March 2014 to 30 June 2014 39.29 40.77 3.77 6729.5 6696.4 -0.49
1 July 2014 to 30 Sep 2014 40.93 41.58 1.59 7629 7721.3 1.21
1 Oct 2014 to 31 Dec 2014 41.59 44.45 6.88 7990.35 8322.2 4.15
1 Jan 2015 to 31 Mar 2015 44.46 45.55 2.45 8272.8 8808.9 6.48
1 Apr 2015 to 30 Jun 2015 45.66 44.96 -1.53 8953.85 8181.5 -8.63
1 July 2015 to 30 Sep 2015 45.12 47.01 4.19 8376.25 8532.9 1.87
1 Oct 2015 to 31 Dec 2015 46.96 46.78 -0.38 7992.05 8065.8 0.92
1 Jan 2016 to 31 Mar 2016 46.86 47.97 2.37 7938.45 7563.6 -4.72
1 Apr 2016 to 30 Jun 2016 48.14 49.14 2.08 7718.05 7849.8 1.71
1 July 2016 to 30 Sep 2016 49.22 51.93 5.51 8313.05 8638.5 3.91
1 Oct 2016 to 31 Dec 2016 52.27 53.25 1.87 8666.15 8625.7 -0.47
1 Jan 2017 to 31 Mar 2017 53.88 53.21 -1.24 8210.1 8561.3 4.28
1 Apr 2017 to 30 Jun 2017 53.2 54.89 3.18 9220.6 9304.1 0.91
1 July 2017 to 30 Sep 2017 54.64 55.34 1.28 9587.95 10077 5.10
1 Oct 2017 to 31 Dec 2017 55.42 54.56 -1.55 9893.3 10335 4.47
1 Jan 2018 to 31 Mar 2018 54.58 55.04 0.84 10531.7 11028 4.71
1 Apr 2018 to 30 Jun 2018 55.06 54.59 -0.85 10151.7 10739 5.79
1 July 2018 to 30 Sep 2018 54.6 55.44 1.54 10732.4 11357 5.82
1 Oct 2018 to 31 Dec 2018 55.48 57.91 4.38 11751.8 10930 -6.99
1 Jan 2019 to 31 Mar 2019 57.89 58.35 0.79 10842.9 11514 6.19
AVG 1.86 AVG 1.81
S.D 2.28 S.D 4.22
VAR 5.21 VAR 17.8
3

52
 (𝑐𝑜𝑣𝑎𝑟.𝑟𝑝,𝑟𝑚) (−0.48)
Beta = = = -0.026
𝑐𝑜𝑣𝑎𝑟.𝑚 17.83

INTERPRETATION

From the above calculation RELIANCE Mutual Fund is from the year March 2014 to Jan 2019.The
rate of return highest in the quarterly of Oct 2014 to Dec 2014 with rate of return as 6.88 and the
lowest rate of return in the quarterly of Oct 2017 to Dec 2017 as -1.55 and from the above
calculation of positive total return of RELIANCE Mutual Fund is 3.47.The Beta Value as 0.026.

(𝑅𝑝−𝑅𝑓) (1.86−1.81)
Treynor’s Ratio = = = -1.73
𝐵𝑝 −0.026

53
INTERPRETATION

Treynor ratio is a measure of returns earned in excess of the risk-free return at a given level of
market risk. It highlights the risk-adjusted returns generated by a mutual fund scheme. This ratio
was given by Jack Treynor thereby expanding the contribution of William Sharpe towards modern
portfolio theory. The calculated Treynor’s ratio is -1.73 which means -1.73 time’s higher market
and volatility rate.

(𝑅𝑝−𝑅𝑓) (1.86−1.81)
Sharpe’s Ratio = = = 0.02
𝜎𝑝 2.28

INTERPRETATION
Components of the Ratio. When analyzing the Sharpe ratio, the higher the value, the more excess
return investors can expect to receive for the extra volatility they are exposed to by holding a riskier
asset. Similarly, a risk-free asset or a portfolio with no excess return would have a Sharpe ratio of
zero. The calculated Sharpe’s ratio is 0.02 which means 0.02 time’s higher market and volatility
rate.

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ADITYA BIRAL MUTUAL FUNDS (A.B SUN LIFE INCOME

FUND-REGULAR PLAN-GROWTH):

ADITYA BIRLA MUTUAL FUNDS NIFTY

DATE OPEN CLOSE RR OPEN CLOSE RR

1 Mar 2014 to 30 Jun 2014 53.63 55.94 4.31 6729.5 6696.4 -0.492
1 July 2014 to 30 Sep 2014 56.17 57.24 1.90 7629 7721.3 1.21
1 Oct 2014 to 31 Dec 2014 57.27 61.41 7.23 7990.35 8322.2 4.153
1 Jan 2015 to 31 Mar 2015 61.4 63.1 2.77 8272.8 8808.9 6.48
1 Apr 2015 to 30 Jun 2015 63.24 62.35 -1.41 8953.85 8181.5 -8.626
1 July 2015 to 30 Sep 2015 62.59 64.92 3.72 8376.25 8532.9 1.87
1 Oct 2015 to 31 Dec 2015 64.86 64.27 -0.91 7992.05 8065.8 0.923
1 Jan 2016 to 31 Mar 2016 69.13 66.06 -4.44 7938.45 7563.6 -4.723
1 Apr 2016 to 30 Jun 2016 66.24 67.68 2.17 7718.05 7849.8 1.707
1 July 2016 to 30 Sep 2016 67.85 72.05 6.19 8313.05 8638.5 3.915
1 Oct 2016 to 31 Dec 2016 72.1 73.52 1.97 8666.15 8625.7 -0.467
1 Jan 2017 to 31 Mar 2017 74.63 73.29 -1.80 8210.1 8561.3 4.278
1 Apr 2017 to 30 Jun 2017 73.27 75.81 3.47 9220.6 9304.1 0.905
1 July 2017 to 30 Sep 2017 75.49 76.43 1.25 9587.95 10077 5.102
1 Oct 2017 to 31 Dec 2017 76.54 75.56 -1.28 9893.3 10335 4.468
1 Jan 2018 to 31 Mar 2018 75.6 75.96 0.48 10531.7 11028 4.71
1 Apr 2018 to 30 Jun 2018 76.2 75.23 -1.27 10151.7 10739 5.789
1 July 2018 to 30 Sep 2018 75.25 76.15 1.20 10732.4 11357 5.816
1 Oct 2018 to 31 Dec 2018 76.18 79.4 4.23 11751.8 10930 -6.989
1 Jan 2019 to 31 Mar 2019 79.35 80.33 1.24 10842.9 11514 6.194
AVG 1.55 AVG 1.811
S.D 2.81 S.D 4.223
VAR 7.92 VAR 17.83

55
OBJECTIVE 1:

To analyze the risk and return of the selected mutual funds traded in Indian mutual funds industry.

(𝑐𝑜𝑣𝑎𝑟.𝑟𝑝,𝑟𝑚) (1.71)
Beta = = = 0.10
𝑐𝑜𝑣𝑎𝑟.𝑚 17.83

INTERPRETATION

From the above calculation ADLTYA BIRAL Mutual Fund is from the year March 2014 to Jan
2019.The rate of return highest in the quarterly of Oct 2014 to Dec 2014 with rate of return as 7.23
and the lowest rate of return in the quarterly of Jan 2017 to Mar 2016 as -4.44 and from the above
calculation of positive total return of ADLTYA BIRAL Mutual Fund is 1.55.The Beta Value as
0.10.

56
OBJECTIVE 2: To compare the performance the mutual funds using Sharpe and Treynor ratios.

(𝑅𝑝−𝑅𝑓) (1.55−1.81)
Treynor’s Ratio = = = -2.71
𝐵𝑝 0.10

INTERPRETATION

Treynor ratio is a measure of returns earned in excess of the risk-free return at a given level of
market risk. It highlights the risk-adjusted returns generated by a mutual fund scheme. This ratio
was given by Jack Treynor thereby expanding the contribution of William Sharpe towards modern
portfolio theory. The calculated Treynor’s ratio is -2.71 which means -2.71 time’s higher market
and volatility rate.

(𝑅𝑝−𝑅𝑓) (1.55−1.81)
Sharpe’s Ratio = = = -0.09
𝜎𝑝 2.81

INTERPRETATION
Components of the Ratio. When analyzing the Sharpe ratio, the higher the value, the more excess
return investors can expect to receive for the extra volatility they are exposed to by holding a riskier
asset. Similarly, a risk-free asset or a portfolio with no excess return would have a Sharpe ratio of
zero. The calculated Sharpe’s ratio is -0.09 which means -0.09 time’s higher market and volatility
rate.

57
 CHAPTER-VI

FINDINGS, SUGGESTIONS AND CONCLUSION

58
 SUGGESTION

The study has tried proving that mere returns of a fund or the past performance is not good enough
to make a sound decision on investment for the future.

There is a need to understand various available tools of comparative analysis and their significance
in making an investment decision.

There tools help in analyzing the consistency of performance of the funds over a period of time.

Thus while giving a suggestion to a potential investor on investments.

The investor need to observe

⮚ Take the beta ratios of various funds and suggest wither the fund is volatile or not
⮚ Use correlations and suggest whether the benchmark taken by the company for judging the
performance is good enough or not.
⮚ Use treynor’s ratio and tell wither the fund of the company is giving returns justifying the
market risk to which all the similar funds are subject to.

A mutual fund is a form of collective investment. It is a pool of money collected from various
investors which is invested according to the stated investment objective. The fund manager is the
person who invests the money in different types of securities according to the predetermined
objectives. The portfolio of a mutual fund is decided taking into consideration this investment
objective. Mutual fund investors are like shareholders and they own the fund. The income earned
through these investments and the capital appreciation realized by the scheme is shared by its unit
holders in proportion to the number of units owned by them. The value of the investments can go
up or down, changing the value of the investors holding. Mutual funds are one of the best
investments ever created because they are very cost efficient and very easy to invest in mutual
funds.

59
 CONCLUSION

Mutual fund makes you disciplined in your savings. Every month you are forced to keep aside a
fixed amount.

As you see above, it helps you make money over the long term. Since you get more units when
the NAV drops and fewer when it rises, the cost averages out over time. So you tide over all the
ups and downs of the market without any drastic losses. Also, a number of mutual funds do not
charge an entry load if you opt for mutual funds.

This fee is a percentage of the amount you are investing. And if you do not exit (sell your units)
within a year of buying the units, you do not have to pay an exit load (same as an entry load, except
this is charged when you sell your units). If, however, you do sell your units within a year, you
would be charged an exit load. So it pays to stay invested for the long-run. The best way to enter
a mutual fund is via an SIP. But to get the benefit of an SIP, think of at least a three-year time
frame when you won't touch your money. Of course you would lose money if your units lost value
over time.

What most SIP Mutual funds don't tell you is that they recover their fees as monthly charges by
selling your units, so while you are buying more units when the market is down, more of your
units are also being sold to fund the monthly charges of the Mutual fund. Also the Bid and Offer
of the Mutual Fund is around 7% and this is the front load or expense you pay for buying the units
each month. Also sometimes the Mutual fund will have annual fee charges.

In spite of the above drawbacks the retail investors' benefit in the long term horizon of 5–8 years
is enormous. Only make sure that you can switch your funds from stock market to money market
at short notice when the markets are really in a correction phase to safeguard the profits which you
have made when the market was in a booming phase.

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BIBLIOGRAPHY AND REFERENCES

Books: “Security Analysis and portfolio Management” by Donald Fischer & Ronald Jordan, 6th
edition published by prentice Hall 1995.

WEB SITES:

⮚ www.amfi.com
⮚ Www. Money control.com
⮚ www.historicalnifty.yahoofinancial.com
⮚ www.networthstockbroking.in
⮚ www.sharekan.com

JOURNAL:

⮚ Author by kannan, & Nedunchez Indian “A comparative study on performance of private

mutual funds”Economic panorama issue date, 60/10/2005
⮚ Sisodiya, Amith Singh, “Mutual funds performance-Comparative analysis” ICFAI,
15/7/2004.

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