Beruflich Dokumente
Kultur Dokumente
COMPARITIVE ANALYSIS BETWEEN THE SUNDARAM MUTUAL FUND AND OTHER MUTUAL FUNDS
In
Submitted to:
DEPARTMENT OF MANAGEMENT
TABLE OF CONTENTS
1. Acknowledgement 2. Preface 3. Declaration 4. Certificate by Organization 5. Problem Definition 6. Objective/ Purpose of the Project 7. Introduction 8. Theoretical Background 9. Company Profile 10. Research Methodology 11. Study Methodology Used 12. Survey and Sampling techniques 13. Hypothesis 14. Findings
: : : : : : : : : : : : : :
03
a) Comparison of Sundaram Mutual Fund with other funds of Sundaram b) Comparison of Sundaram Mutual Fund with the Market
c) Comparison of Sundaram Mutual Fund with other Mutual Funds as
: : : :
Acknowledgement
While working as project trainee at Sundram Finance Limited at Regional Office at Delhi, I stand immensely indebted to my guide in Sundram Finance, Mr. S.P.Krishna Kumar (Incharge-North Region, Sundram Direct) for his invaluable help. His contribution has helped a great deal in timely completion of this project. His full cooperation and support has helped me in obtaining great deal of knowledge about Mutual Funds. My sincere thanks to other members of Sundram Finance who gave their valuable guidance and help in completing the project. My special thanks to the clients of Sundram Finance who patiently heard about the schemes and plans of mutual funds and gave their responses which helped me in gaining practical knowledge as to deal with Mutual Funds.
Preface
MBA program is one of the most reputed professional courses in the field of Management. Summer Training is an integral part of MBA. As a complementary to that every trainee has to submit a report on the research work conducted in that institute. This report is thus prepared for the summer summer training project work done at Sundram Finance Limited, Delhi. The topic of the project is, Comparison between Sundaram Mutual Fund and other Mutual Fund. Investment means putting your money to work to earn more money. If done wisely it can help to meet one's financial goals like buying a new house, paying for a college education, education, enjoying a comfortable retirement or whatever is important to an individual. One needs to make decisions about how much he/she wants to invest and where to invest. To choose he needs to know current good options available and their relative risk exposures. These help are given to a client in Sundram Finance Limited as to in which Mutual Fund they can invest and what risks are related to it. They manage all the respected returns of their clients and timely inform them for the switching to be done between funds in cases of expected downfall in returns of their Mutual Funds in future. This report is an attempt to present a report on account of interview and survey with the customers and consumers.
BIT (MESRA)
BIT (MESRA)
DECLARATION
I, Mr.
Hereby declare that this project report is the record of authentic work carried out by me during the period from May 30th to July 10th and has not been submitted to any other University or Institute for the award of any degree / diploma etc.
This is to certify that Mr. Vijay Shanker Kumar & Mr. Surendra Kumar Paswan,. pursuing Master of Business Administration at Birla Institute of Technology, Mesra, Ranchi has worked under my supervision and guidance on his dissertation entitled Comparative Analysis Between The Sundram Mutual Fund And Other Mutual Funds at Sundram Finance Limited, Delhi from May 30th knowledge this is an original piece of work. 2009 to July 10
th
Mr.S.P.Krishna Kumar Incharge-North Sundram Direct. Sundram Finance Limited New Delhi-110001.
Problem Definition
Investment Planning :
Investment means putting money to work to earn more money. If its done wisely, it can help one meet their financial goals like buying a new house, paying for a college education, enjoying a comfortable retirement, or whatever is important to you. One does not have tot be wealthy to be an investor. Investing even a small amount can produce considerable rewards over the long-term, especially if they does it regularly. But one needs to make decision about how much one wants to invest and where he wants to invest it. To choose wisely, one needs to know the investment options thoroughly and their relative risk exposures.
Liquidity How accessible is ones money? How easily can an investment can be converted to cash,
since part of ones invested money must be available to cover any financial emergencies.
Safety What is the risk involved ? The biggest risk is the risk of losing the money invested. Another
equally important risk is that ones investments will not provide enough growth or income to offset the impact of inflation, which could lead to a gradual increase in the cost of living. There are additional risks as well (decline in economic growth). But the biggest risk of all is not investing at all. 7
Return What can be expected to get back on amount invested? Investment are made for the
purpose of generating returns. Safe investments often promise a specific, though limited return. Those that involve more risk offer the opportunity to make or lose- a lot of money.
Investment Approaches :
used. Most people adopt the following approaches : i) Moderate: Take moderate risk by investing in mutual funds, bonds, select blue chip equity shares etc. 8
ii) iii)
Conservative : Take only limited risk by concentrating on secure, fixed- income investments etc. Aggressive : Take major risk on investments in order to have higher returns speculative or unpredictable equity share etc. like
Types of investment risks: There are different risks with different types of investments :
i) ii) Credit Risk : The risk is that the issuer of the security will default, or not repay the principal amount. Valid for corporate bonds etc. Liquidity Risks : The risks is that the security is not sellable or tradable in the market, in other words money gets stuck unnecessarily creating an asset- liability mismatch. Valid for bonds, stocks etc. iii) Market Risks : The risk is that financial markets are volatile in nature. Volatility means sudden swings in value from high to low, or the reverse. Mutual Funds and all Securities Investments are subject to market risks and there is no assurance or guarantee that the Fund's objectives will be achieved. As with any investment in stocks and shares, the NAV of the units issued under the schemes can go up or down depending upon the factors and forces affecting the Capital market. Past performance of the Sponsor / Mutual fund does not guarantee the future performance of the schemes of the Mutual Fund. The names of the schemes do not, in any manner, indicate either the quality of the schemes, their future prospects or their returns. The NAV of the schemes may be affected by settlement periods and transfer procedures.
Trading volumes may restrict the liquidity of the scheme's investments. Investors in the schemes are not being offered any guaranteed returns.
The Objective of this project is to help investors analyze and compare various funds and then select the one which best suits their requirements and risk taking capabilities. This project compares the Sundaram Mutual Funds with other Funds of similar kind to help investors analyze their funds ranking and returns they will get, with those of Sundaram Funds. This project in no way aims to show other funds poor for investing; as all Mutual Funds are subject to various risks attached with them so they may fluctuate on short durations. This project helps investors gain knowledge of Sundaram Funds and an overall comparisons of returns provided with all the other funds of similar kind.
10
Introduction
Mutual funds: A mutual fund is a professionally-managed form of collective investments that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. In other words we can say that A Mutual Fund is a trust registered with the Securities and Exchange Board of India (SEBI), which pools up the money from individual / corporate investors and invests the same on behalf of the investors /unit holders, in equity shares, Government securities, Bonds, Call money markets etc., and distributes the profits. Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are known as Unitholders. The profits or losses are shared by the investors in proportion to their investments. The mutual funds normally come out with a number of schemes with different investment objectives, which are launched from time to time. A mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public. There are three basic categories : Equity, Debt, and Cash. They are also known as three basic asset classes. Equity: or Stocks are ownership shares investors buy in a corporation. When equity investments are made, they become part owners( to the extend of shareholding) of the company where invested in. There is no particular rate of return indicated while investing. The current value of holding is reflected in the price at which the stock / share is traded in the stock markets. Therefore this is relatively riskier form of investment. Equity Funds : A Mutual Funds Scheme that achieves the benefits of diversification by investing in the stocks of companies across a large number of sectors. As a result, it minimizes the risk of exposure to a single company or sector is called Equity Fund Debt
instruments : Also known as bonds are loans investors make to corporations and
governments. They promise a fixed return at the time of making the investment. Also the promise of getting the money back is dependent on who is making the promise. Therefore it provides with the promise that principal will be returned along with the interest payable thereof. Floating-Rate Debt Fund : A fund comprising of bonds for which the interest rate is adjusted periodically according to a predetermined formula, usually linked to an index 11
Cash : investments include money in bank savings accounts and other liquid investment options.
Balanced / Hybrid Fund : The aim of Balanced Funds is to provide both growth and regular income as such Schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. They generally invest 40-60% in equity and debt instruments are called Balanced funds.
12
Parameters
INCOME funds
Bank Post office Company Deposits MIS f.d. 8% (for 6 6% -7% years) (for 1 year) Low to medium Low
Returns
Returns are not assured.They 5% (for 1 depend on portfolio and interest year) rate movemennt Debt funds are safe as they invest in debentures Very high High High
Safety
High Low
No No
No No
No No
Tax free in the hands of the investor. MF pays a Dividend Distribution Tax of 12.5% plus a Tax benefit surcharge of 2.5% (Individual case) and 20% plus surcharge of 2.5 % (corporate case)
Tax benefit available No TDS U/S 80 L Tax benefit Fully TDS on available taxable. interest U/S 80 L above Rs. 5000
13
Debt Funds :
The goal of fixed income funds is to provide high current income consistent with the preservation of capital. Growth of capital is of secondary importance . These funds invest in corporate bonds or government securities that have a fixed rate of return The funds are suitable for investors who want to maximize current income and who do not wish to assume a high degree of capital risk in order to do so. Since bond prices fluctuate with changing interest rates, there is some principal risk involved despite the fund's conservative nature. The funds offered under this category are Sundaram Bond Saver, Sundaram Income Plus, Sundaram Select Debt, Sundaram Money Fund, Sundaram Floating Rate Fund.
Equity Funds:
Equity Funds seek to provide maximum growth of capital with secondary emphasis on dividend or interest income. They invest in common stocks with a high potential for rapid growth and capital appreciation. An equity fund gives an exposure to the stock market. The fund would have longterm growth potential but provide low current income. They are not suitable for investors who are risk averse and are focused on maximizing current income or conserving capital. The funds offered under this category are : Sundaram Growth fund, Sundaram Select Focus, Sundaram Select Mid- Cap, Sundaram India Leadership Fund, Sundaram S.M.I.L.E Fund.
Balanced Funds :
Balanced Funds are more evenly invested in equities and income securities. Balanced and equity income funds are suitable for conservative investors who want high current yield with some growth. If one seeks to generate long term capital appreciation and current income, an investment in the balanced fund would be ideal. It gives one an exposure to the stock market without the entire risk of the stock market. The funds offered under this category are the Sundaram Monthly Income Plus, Balanced Fund. Sundaram
14
Theoretical Background
About Mutual Funds: History of the Indian Mutual Funds Industry:
The mutual funds industry in India started in 1963 with the formation of Unit Trust of India, as the initiative of the Government of India and Reserve Bank of India. The history of the Mutual Funds in India can be broadly divided into four distinct phases.
15
The 1993, SEBI Mutual Fund Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI Mutual Funds Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual Funds with the total Assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs. 44,541 crores of Assets under management was way ahead of other mutual funds.
Concept
16
A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them. Thus a mutual fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
Professional Management Diversification Convenient Administration Return Potential Low Costs Liquidity Transparency Flexibility Choice of Schemes Tax Benefits Well regulated
Sales Price:
It is the price one pays when they invest in a scheme. Also called Offer Price. It may include a sales load.
Repurchase Price:
It is the price at which a close-ended schemes repurchases its units and it may include a back-end load. This is also called Bid-Price.
Redemption Price:
It is the price at which open-ended schemes repurchase their units and close-ended schemes redeems their units on maturity. Such prices are NAV related.
Sales Load:
17
It is a charge collected by a scheme when it sells the units. Also called as 'Front-End' load. Schemes that do not charge a load are called ' No Load' schemes.
RETURNS
FUND MANAGER
Generates SECURITIES
Invest in
Mutual Funds offer good investments opportunities to the investors. They carry certain risks. Mutual funds is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document.
Diversification of funds reduces the risks because all stocks may not move in the same direction in the same proportion at the same time. Mutual funds issues units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are known as Unit holders. The profits or losses are shared by the investors in the proportion to their investments. Mutual Funds comes out with number of schemes with different investment objectives which are launched from time to time. It is required to be registered with (SEBI) Securities and Exchange Board of India. History of Mutual funds and role of SEBI :
18
In 1963, Unit trust of India was upon the first mutual funds set up in India. US64 is the first mutual funds. In 1990's Govt allowed public sector banks and institutions to set up mutual funds. In 1992,SEBI Act was passed. Objective of SEBI To protect the interest of investors in securities and to promote the development of and to regulate the securities market. SEBI formulates policies and regulates the mutual Funds to protect the interest of the investors. SEBI notified regulations for mutual funds in 1993. Then mutual funds sponsored by private sector entities were allowed to enter the capital market. All Mutual Funds whether promoted by public sector, private sector or foreign entities are governed by the same set of regulations. All mutual Funds are monitored and inspected by SEBI. Risks associated with mutual funds schemes are of same type. UTI is not registered with SEBI as a mutual fund.
Mutual fund is set up in form of trust. It has sponsor, trustees, asset management company and custodian. Trust is established by a sponsor or more than one sponsor who is like a promoter of a company.
The trustees of the mutual fund hold its properties for the benefit of the unit holders.
AMC approved by SEBI manages the funds by making investments in various types of securities. Custodian, who is registered with SEBI, holds the securities of various schemes of the funds in its custody. The trustees are vested with the general power of superintendence and direction over AMC. They monitor the performance and compliance of SEBI Regulations by the mutual funds. 2/3 of the directors of trustees company or board of trustees must be independent . i.e. They should not be associated with the sponsor. 50% of AMC directors must be independent. All mutual funds are required to be registered with SEBI before they launch any scheme.
The performance of a particular scheme is denoted by NAV. NAV is the market value of the securities held by the schemes. Market Value of securities changes everyday; therefore NAV also changes. NAV per unit is the market value of securities of a scheme divided by the total number of units of the scheme.
19
NAV is required to be disclosed by the mutual fund on regular/daily/weekly basis. The value of each unit of the mutual fund, known as the net asset value (NAV), is mostly calculated daily based on the total value of the fund divided by the number of shares currently issued and outstanding. The value of all the securities in the portfolio in calculated daily. From this, all expenses are deducted and the resultant value divided by the number of units in the fund is the funds NAV.
NAV =
Total value of the fund---------------------. No. of shares currently issued and outstanding
Types of Mutual Funds: 1) Schemes according to Maturity period: A) Open-ended Fund Scheme:
It is one that is available for subscription and repurchase on a continue basis. They don't have a fixed maturity period. They can easily buy and sell at NAV related prices. Their key feature is liquidity.
C) Balanced Funds:
Their aim is to provide both growth and regular income. They give moderate growth to the investors. They generally invest 40-60% in equity and debt.
E) Gilt Funds :
These funds invest exclusively in government securities. Government securities have no default risk.
F) Index Funds:
They replicate the portfolio of a particular index e.g. BSE, NSE . They invest in the securities in the same weight comprising of an index. Exchange traded index funds are traded on the stock exchanges. Sector specific Funds :-These are the schemes/ funds which invest in the securities of only these sectors or industries as specified in the offer document. e.g. FMCG, S/W etc. The returns in these funds are dependent on the performance of their respective sectors. They are more risky.
Act 1961. as the Govt offers tax incentives for investment in specified avenues. E.g. ELSS(Equity Linked Savings Schemes),pension Schemes. They are like Growth/Equity oriented funds.
Costs associated: Expenses: AMCs charge an annual fee, or expense ratio that covers administrative expenses, salaries, advertising expenses, brokerage fee, etc. A 1.5% expense ratio means the AMC charges Rs1.50 for every Rs100 in assets under management. A fund's expense ratio is typically to the size of the funds under management and not to the returns earned. Normally, the costs of running a fund grow slower than the growth in the fund size - so, the more assets in the fund, the lower should be its expense ratio Loads: Entry Load/Front-End Load (0-2.25%) - its the commission charged at the time of buying the fund to cover the cost of selling, processing etc. Exit Load/Back- End Load (0.25-2.25%) - it is the commission or charged paid when an investor exits from a mutual fund; it is imposed to discourage withdrawals. It may reduce to zero with increase in holding period. Load or No Load Fund:
-- Load fund is one that charges a percentage of NAV for entry or exit. Each time one buys or sells units in the fund, a charge will be applicable. These charges generally affect their yields/returns. Efficient funds may have higher returns inspite of load. A no load fund is one that does not charge for entry or exit. The investors may enter the fund/scheme at NAV and no additional charges are payable on purchase or sale of units.
Can a Mutual Fund impose fresh load or increase the load beyond the level mentioned in the offer documents.
No, Mutual Fund cannot increase the load beyond the level mentioned in the offer document. Any change,will be applicable only to prospective investments. In case of new loads,the mutual funds are required to amend their offer document so that the new investors are aware of loads at the time of investments.
load, if applicable.
How long will it take for transfer of units after purchase from stock markets:
According to SEBI regulations transfer of units is required to be done within 30 days from the date of lodgement of certificates with the Mutual Funds in case of close ended schemes.
period of time. It is a convenient and systematic way to 'invest while you earn' and provides an opportunity to invest regularly, thereby averaging the acquisition cost of units.
2) Diversification:
Since a mutual fund scheme invests in number of stocks and/or debentures, the associated risks are greatly reduced.
4) Liquidity:
Investments in mutual funds are completely liquid and can be redeemed at Net Assets Value (NAV) related price on any working day.
5) Transparency:
You will always have access to up-to-date information on the value of your investment in addition to the complete portfolio of investments, the proportion allocated to different assets and the fund managers investment strategy.
6) Flexibility:
Through features such as regular investment plans, regular withdrawal plans and dividend investment plans, you can systematically invest or withdraw funds according to your needs and convenience.
SEBI regulated:
All mutual funds are registered with SEBI and function within the provisions and regulations that protect the interests of investors. AMFI is the supervisory body of Mutual Fund Industry While most investment options provide most of these features, only Mutual Funds provide all of these options. 25
Objective
Risk type
Investment Portfolio Treasury Bills, Certificate of Deposits, Commercial papers, call money
Investment horizon
Money market
Those who park their funds in current account or short term bank deposit
2 days - 3 weeks
Short term funds Liquidity + Little interest (Floating Moderate Income rate Short term)
Call money, commercial papers. Treasury bills, CDs, Short Term G- secs.
3 weeks - 3 months
Credit risk & Bond funds Regular Income Interest rate ( Floating risk Long-term) Security& income Interest rate risk
Gilt funds
Salaried and conservative Aggressive investors with long term out look.
Equity funds
Stocks
3 years plus
Index funds
To generate returns which are Nav, vary with Portfolio index commensurate index like BSE NIFTY with returns of performance etc respective index
Aggressive investors.
3 years plus
Balanced ratio of Capital market equity and debt Balanced Growth & regular risk and funds to ensure funds income interest risk igher returns at lower risk
2 year plus
26
1. Returns on mutual fund vary according to the scheme opted. Equity Funds can provide high but inconsistent returns depending on the market performance. Debt funds provide relatively stable returns. (Past performance is not a guarantee for future return.) 2. Debt funds are subject to interest rate risk and credit risk. Debt funds are comparatively safer as they invest in government securities and highly rated corporate and government papers. 3. Liquidity in mutual funds is high, as it promises to pay on demand. 4. Diversification is important parameter for mutual funds as they invest in diverse securities, which is not available with others. This also reduces the risk factor. Documents required (PAN mandatory): 1) Proof of identity : 1.Photo PAN card 2. In case of non-photo PAN card in addition to copy of PAN card any one of the following: driving license/passport copy/ voter id/ bank photo pass book.
2) Proof of address (any of the following): latest telephone bill, latest electricity bill, Passport, latest bank passbook/bank account statement, latest Demat account statement, voter id, driving license, ration card, rent agreement.
3) Offer document: an offer document is issued when the AMCs make New Fund Offer (NFO). Its advisable to every investor to ask for the offer document and read it before investing. An offer document consists of the following: 4) Standard Offer Document for Mutual Funds (SEBI Format) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) Summary Information Glossary of Defined Terms Risk Disclosures Legal and Regulatory Compliance Expenses Condensed Financial Information of Schemes Constitution of the Mutual Fund Investment Objectives and Policies Management of the Fund Offer Related Information.
27
Key Information Memorandum: A key information memorandum, popularly known as KIM, is attached along with the mutual fund form. And thus every investor gets to read it. Its contents are: 1. Name of the fund. 2 Investment objective 3. Asset allocation pattern of the scheme. 4. Risk profile of the scheme 5. Plans & options 6. Minimum application amount/ no. of units 7. Benchmark index 8. Dividend policy 9. Name of the fund manager(s) 10.Expenses of the scheme: load structure, recurring expenses 11.Performance of the scheme (scheme return v/s. benchmark return) 12. Year- wise return for the last 5 financial year.
Company Profile
SUNDARAM FINANCE LIMITED
Sundaram Finance has grown over the past decades on the foundations of dedicated customer service, fair business practices, efficient, safe and trusted financial policies. 28
The Company was incorporated in 1954, with the object of financing the purchase of commercial vehicles and passenger cars. Be it lenders, depositors, shareholders, customers or employees, Sundaram Finance has always enjoyed an excellent relationship with all its stakeholders. In fact, the Company owes its impressive track record to these long standing relationships. Today, Sundaram Finance has come a long way from its position of being the leading Hire-purchase Finance Company to become the leader in its chosen field. Driven by the sincerity of Shri Santhanams concern for commitment to and passion for the small truck operators, at a time when the focus was only on financing large truck operators, Sundaram Finance emerged as a leading financier of the transport sector. Devoting its services to the growth of the road transport industry, Sundaram Finance is today synonymous with automotive financing in the country. Today, Sundaram Finance has a nationwide network supported by a dedicated team of service oriented personnel, who ensure personalized customer service. Sundaram Finance remains true to its core values of prudence, fairness, transparency and service excellence which have enabled it to emerge as a leader in its chosen field. At Sundaram Finance, values are defined by the services rendered to the customer. Long before customer satisfaction became a fashionable concept, Sundaram Finance distinguished itself by providing a host of value-added services which transcend the ordinary approach. At Sundaram Finance, service is a way of life. From being the leader in hire-purchase, Sundaram Finance has spread its activities and today its range of financial services encompasses Leasing and Car Finance. Sundaram Finance also offers Home Finance and Asset Management through its subsidiaries. Sundaram Finance achieved its leadership position by a unique combination of traditional conservatism and judicious dynamism. The values envisioned and inculcated by Shri T.S.Santhanam have endured and inspired the professional workforce at Sundaram Finance to a very high degree of commitment and dedication. The prudent practices followed by the Company such as strong credit appraisal skills, effective receivables management, well defined documentation and procedures have become industry benchmarks. At Sundaram Finance, people are its most valuable assets. The Company conducts regular inhouse training programmes that help motivate employees and improve leadership and managerial abilities. Every employee at Sundaram Finance is proud to represent an institution that values professional integrity, above all else. Sundaram Finance not only invests in its people but also in the latest advanced state-of-the-art technology. It set industry standards by computerising and networking all its offices through a variety of communication media including VSAT installations. These ensure efficient and smooth functioning of all its systems and procedures resulting in better customer service. 29
Be it lenders, depositors, shareholders, customers or employees, Sundaram Finance has always enjoyed an excellent relationship with all its stakeholders. In fact, the Company owes its impressive track record to these long standing relationships. Today, Sundaram Finance has come a long way from its position of being the leading Hire-purchase Finance Company to become the leader in its chosen field. Sundaram Medical Foundation (SMF), a non-profit Trust set up in 1990, exemplifies the commitment of Sundaram Finance Group to the community and its citizens. Dedicated to setting new standards in quality healthcare to the community in a cost-effective manner without compromising on patient care, medical competence, service courteousness and compassion, Dr. Rangarajan Memorial Hospital is a hospital under SMF, where caring is not a sub-speciality in medicine. Endowed with a large corpus Fund, the hospital is today, equipped with up-to-date medical infrastructure and provides a wide range of medical services fulfilling a long felt need for providing quality healthcare at affordable costs. The Company was incorporated in 1954, with the object of financing the purchase of commercial vehicles and passenger cars. The company was started with a paid-up capital of Rs.2.00 Lakhs and later went public in 1972. The Company's shares were listed in the Madras Stock Exchange in 1972 and in the National Stock Exchange in January 1998. Subsequently, the equity shares of the Company have been delisted from Madras Stock Exchange Limited (MSE) with effect from January 27, 2004, in accordance with SEBI (Delisting of Securities) Guidelines, 2003, for voluntary delisting. The sponsor of the fund is Sundaram Finance Limited, one of the most respected names in financial services today. Sundaram Finance has an asset base of over Rs.2,500 crores, a deposit base of over Rs.700 crores and over 4.6 lakh customers.
A trust deed was executed between the Sponsor and the Trustee Company on March 22, 2004 and
registered with the Sub-Registrar, Triplicane, Chennai. The Trustee Company assumed the 30
trusteeship from April 1, 2004. SM funds continue to be managed by Sundaram Asset Management Co Ltd. (AMC) under an investment management agreement Main Building : Sundaram Medical Foundation, Shanthi Colony 4th Avenue, Anna Nagar, Chennai 600 040. Ph: 044 2626 8844 . Annex: Sundaram Medical Foundation, 783/784, 17th Main Road, Tirumangalam, Anna Nagar, Chennai 600 040. Ph: 044 2622 0103 / 2622 0104 / 2622 0105 / 2622 0106.
First finance company to be listed on the Madras Stock Exchange. Started Leasing operations. Formation of Lakshmi General Finance
31
Deposits crossed Rs. 500 crore (Rs. 5 billion) Formed Sundaram Newton Asset Management Company Ltd. in collaboration with Newton Management Ltd., UK. Received Best Tax Payer Award
Promoted Fiat Sundaram Auto Finance Limited, a joint venture with Fidis S.p.A., Italy Promoted Sundaram Home Finance Limited with equity participation from International Finance Corporation (IFC), Washington, and FMO Netherlands Promoted Royal Sundaram Alliance Insurance Company Limited, a joint venture with Royal & Sun Alliance Plc, for Non-Life Insurance Promoted Sundaram Infotech Solutions - Infotech division of Sundaram Finance
Merger with LGF making SF Billion dollar Balance sheet NBFC BNP Paribas Asset Management Group, France acquires 49.90 % stake in Sundaram Asset Management Company Ltd from SFL. Union de Credit pour le Batiment SA (UCB), a wholly owned subsidiary of BNP Paribas SA, France acquires 49.90% stake in Sundaram Home Finance Ltd from SFL.
32
Directors: Sri S Ram Sri S Narayanan Sri A Rangaswam Sri T R Seshadri Sri S Ravindran Sri S Prasad Sri Aroon Raman Managing Director Sri T T Srinivasaraghavan Deputy Managing Director Sri Srinivas Acharya Company Secretary Sri S Venkatesan, CFO & Secretary Compliance Officer Sri P Viswanathan, Deputy Secretary & Compliance Office
Senior Management
S Venkatesan CFO & Secretary P S Raghavan Executive Director & Head Sundaram Business Services A N Raju Executive Director
33
Paramesh Krishnaier Executive Director K Swaminathan Senior Vice President (Sundaram Infotech Solutions) M Ramaswamy Senior Vice President & Head Treasury Harsha Viji Senior Vice President (Special Projects) S Ravindran Vice President & Head Northern Region P Viswanathan Vice President & Deputy Secretary J Raghunathan Vice President (Sundaram Infotech Solutions) S Srinivasan Vice President & Head Leasing K Manivannan Vice President (Training) S Sivakumar General Manager (Operations) T S Venkataraman General Manager (Operations) M J Kulkarni General Manager & Head Western Region S Ramachandran General Manager (Audit) Venkatesh Kumaraswami General Manager (Sundaram Business Services) K Sankara Kumar General Manager & Head Distribution
Awards
Second Best Tax Payer in the category of Private Sector Company for Assessment Year 1994-95 in Tamil Nadu Region, from the Income Tax Department, Tamil Nadu.
34
Rolling Trophy by Rotary Club of Madras South West for Best Employer-Employee
Relationship for the year 1995-96.
Best Tax Payer in the category of Private Sector Company for Assessment Year 1995-96 in Tamil Nadu Region, from the Income Tax Department, Tamil Nadu. Automan Award to Shri T S Santhanam, Chairman, from Motor India in 1998. Pioneering Service Award to Shri T S Santhanam Chairman, from Chennai Good
Transport Association.
Sarige Ratna Award to Shri T S Santhanam, Chairman, from the Bangalore City Lorry Transporting Agents Association (Regd). Most Valued Customer Award to Shri T S Santhanam Chairman, from the State Bank
of India.
The Best Financier of the New Millennium 2000 to Shri. G K Raman, Managing
Director, from the All India Motor Transport Congress.
Products Range
Commercial Vehicles Finance Car Finance Home Loans Tyre Finance Insurance Asset Management Equipment Finance Fleet Card InfoTech Solutions Business Process Outsourcing Logistics Services
1. Old Establishment Sundram Finance Limited is one of the oldest and largest Investment 35
spread all over the country. It covers all Metros and other important financial centres. They have a team of over 4000 highly experienced employees including MBAs, CAs, Financial Analysts, Investment Consultants, Law Graduates and Stock Market experts. Our operations are fully computerised.
3.
SEBI Authorisation Sundram Finance is authorised by Securities & Exchange Board of India (SEBI), a Government body specially created for investor's protection. As per recent notification SEBI has warned that Dealing with unregistered Brokers is risky and SEBI will not be in a position to entertain any complaints against such unregistered Brokers.
4.
After Sales Service Service with a smile is their motto. Their investments Consultant are specially trained to provide highly personalised and professional advice to their investor clients. Their role does not end when the client has made the investment. They are known for their excellent After Sales Services.
5. Vast Variety of Schemes -- They offer the largest variety of investment schemes suited
to individual requirements of their clients keeping in view their return expectation. They are fully fledged Financial Supermarket offering advice to their clients for investment in the following schemes :-A) Fixed Deposit B) Mutual Funds
6)
Investor Protection They have a full fledged investor protection cell which currently monitors/analyses performance and health of companies helping them give unbiased investment advice.
7) Large number Of Satisfied Clients Last but not the least, their biggest strength is their
vast and dedicated clientele of around 4.6 lakhs individual investor spread all over India. The list of their clients includes cream of Indian Society retired Governors, Diplomats, Bureaucrats, and top Corporate Executives, Army & Civil officers and Housewives etc..
36
My Project Research:
My project research is based on Exploratory and Conclusive Research.
Exploratory Research Part : -- Initially when I joined Sundram Finance I had very little
knowledge of Mutual Funds. I studied what are Mutual Funds and then I studied through various types of good Mutual Fund schemes which are currently available in the market. I studied the fact sheets of the IPOs Funds which were launched at that time. I studied the behaviour of various investors of different risk profiles who all invested in different types of funds. It was an overall general study of the different funds and their working in the market, how Fund managers manage different portfolios.
Conclusive Research Part: -- My study then narrowed up into Sundram Mutual Funds. I
studied its different types of schemes available, how fund Managers have allocated the portfolio to be so much diversified so as to minimise risks. I studied its ranking in the market and its risk bearing capacities. I used to explain about the Sundaram Fund schemes to the prospective investors.
37
Study Methodology
I have used Primary data by way of direct interactions with clients/investors. I learned their risk taking capabilities and used to inform them of various Funds available according to their needs. I have used secondary data in form of Fact Sheets. I studied the Fact Sheets of Various Fund of Sundram Finance Limited and Product Guide of Sundram Mutual Fund. I have used the Fact Sheets of different Company Mutual Funds. I have used the performance report of mutual funds of different company.
I surveyed the investors which are Sundram Finance Clients as taken personal interview . I had a sample size was of 25 investors. They were all Sundram Finance Clients. I studied their risk taking capabilities. I came to know whether they opted for Equity holding and were ready to accept any volatility of market, the risk attached with it. Whether they were ready to invest in Debt shares and have a secured investment. Mainly people wanted to invest in Equity Shares. Some were themselves updated with market ups and downs and therefore used to switch on daily basis. They were mainly Equity market players.
39
Hypothesis
Initially, I studied all the funds fact sheets of different Mutual Funds available in the market, and then I found Sundaram Mutual Fund to be one of the best among all the Funds I dealt with. Therefore I opted to continue my project on this Fund and compare it with other funds available and mark its standing in the market. Therefore my study narrowed down to comparing the Sundaram Fund with other similar category funds operating in the market. I finally accept my hypothesis, and found Sundaram Mutual Fund to be better managed by its fund managers, and readily accepted by investors. It has a very good ranking in the market and even equity players have to bear minimum amount of risk. Investors who all have invested in it mostly have not switched over to other funds. This fund has the best type of diversified portfolio thus reducing the overall risk attached with it. Sundaram S.M.I.L.E. fund, Sundaram India leadership Fund, Sundaram Balanced Fund, Sundaram TaxSaver Fund Sundaram Growth Fund, all are found to be in a better position in the market than other general Equity funds available. Thus my hypothesis is accepted.
40
Findings
Sundram BNP Paribas Mutual Fund:
Investment manager for Sundaram BNP Paribas Mutual Fund sponsored by Sundaram Finance & Newton Group in 1996. Newton exited in 2002. BNP Paribas Asset Management (BNPP AM) became a partner in 2006. The Company is now a joint venture between Sundram Finance(50.1% stake)and BNP ASEET Management(49.9% stake) The sponsors have an equal in management.
Mutual Funds: Sundaram Mutual believes in helping investors reach their financial goals
by delivering consistent performance through sensible investment practices. The range of products offered by Sundaram Mutual is as follows:
No. of schemes No. of schemes including options Equity Schemes Debt Schemes Short term debt Schemes Equity & Debt Money Market Gilt Fund
49 188 36 127 15 6 0 2
41
Sundaram Select Debt Sundaram Money Fund Sundaram Floating rate Fund
Sundaram Select Focus Sundaram India Leadership Fund Sundaram S.M.I.L.E. Fund
Latest NAV Scheme Name Sundaram BNP Paribas Bond SaverAnnual Dividend Sundaram BNP Paribas Bond SaverBonus Option Sundaram BNP Paribas Bond Saver42 NAV (Net Repurchase Asset Value) Price 10.3884 14.2161 26.9792 10.3884 14.2161 26.9792 Sale Price Date
Growth Sundaram BNP Paribas Bond SaverHalf-Yearly Dividend Sundaram BNP Paribas Bond SaverInstitutional Plan - Bonus Option Sundaram BNP Paribas Bond SaverInstitutional Plan(Annual Dividend) Sundaram BNP Paribas Bond SaverInstitutional Plan(Growth) Sundaram BNP Paribas Bond SaverInstitutional Plan(Half-Yearly Dividend) Sundaram BNP Paribas Bond SaverInstitutional Plan(Qtrly Dividend) Sundaram BNP Paribas Bond SaverQtrly Dividend 10.5891 14.0986 0.0000 27.1019 0.0000 10.6176 10.5696 10.5891 14.0986 0.0000 27.1019 0.0000 10.6176 10.5696 10.5891 08-Jun-2009 14.0986 08-Jun-2009 0.0000 08-Jun-2009 27.1019 08-Jun-2009 0.0000 08-Jun-2009 10.6176 08-Jun-2009 10.5696 08-Jun-2009
Sundaram BNP Paribas Income PlusAppreciation Sundaram BNP Paribas Income PlusDividend 43
14.4541 11.7358
14.4541 11.7358
3)
Objective : Sundaram BNP Paribas Select Debt seeks to earn regular income by investing primarily in fixed income securities, which may be paid as dividend or reinvested at the option of the investor. Structure : Open Ended Income Scheme Inception Date : August 30, 2002 Plans and Options under the Plan : Dynamic Asset Plan, Short Term Asset Plan. Face Value (Rs/Unit): Rs 10. Minimum Investment : Rs. 5000.
EntryLoad :Nill Exit Load : Nill Latest NAV Scheme Name Sundaram BNP Paribas Select DebtShort-term Asset Plan-Annual Div Sundaram BNP Paribas Select DebtShort-term Asset Plan-Appreciation Option Sundaram BNP Paribas Select DebtShort-term Asset Plan-Fortnighty Dividend Reinvst Sundaram BNP Paribas Select DebtShort-term Asset Plan-Half-Yearly Div Sundaram BNP Paribas Select DebtShort-term Asset Plan-Monthly Dividend Reinvst Sundaram BNP Paribas Select DebtShort-term Asset Plan-Quarterly Div Sundaram BNP Paribas Select DebtShort-term Asset Plan-Weekly Dividend Reinvst NAV (Net Repurchase Asset Value) Price 10.9298 14.9945 10.9298 14.9945 Sale Price Date
10.9771
10.9771
10.9771 08-Jun-2009
10.9184
10.9184
10.9184 08-Jun-2009
Objective : Sundaram BNP Paribas Money Fund seeks to provide a level of income consistent with the preservation of capital, liquidity and lower level of risk, through investments made primarily in money market and debt securities. The aim is to optimize returns while providing liquidity. Structure:Open Ended Liquid Scheme Inception Date : March 06, 2000 Plans and Options under the Plan : Dynamic Asset Plan, Short Term Asset Plan. Face Value (Rs/Unit): Rs. 10 Minimum Investment : Rs. 10,000. Entry Load : Nil. Exit Load : Nil
Latest NAV Scheme Name Sundaram BNP Paribas Money FundQuarterly Dividend Reinvestment Sundaram BNP Paribas Money FundAppreciation Sundaram BNP Paribas Money FundDaily Dividend Reinvestment Sundaram BNP Paribas Money FundFortnightly Div Reinvst Sundaram BNP Paribas Money FundMonthly Div. Reinvst Sundaram BNP Paribas Money FundWeekly Div. Reinvst Sundaram BNP Paribas Money Fund Super Institutional Daily Div. Reinvest Sundaram BNP Paribas Money Fund Super Institutional fortnightly Div.Rein Sundaram BNP Paribas Money Fund Super Institutional Growth Sundaram BNP Paribas Money Fund Super Institutional monthly Div. Sundaram BNP Paribas Money Fund Super Institutional Qrtly Div. Reinvest Sundaram BNP Paribas Money Fund Super Institutional weekly Div. Rein Sundaram BNP Paribas Money FundInstitutional Plan-Daily Div. Reinvestment 45 NAV (Net Repurchase Asset Value) Price 10.7894 18.4283 10.0953 10.4071 10.2783 10.6155 10.0953 0.0000 18.7804 0.0000 0.0000 0.0000 10.0953 10.7894 18.4283 10.0953 10.4071 10.2783 10.6155 10.0953 0.0000 18.7804 0.0000 0.0000 0.0000 10.0953 Sale Price Date
10.7894 08-Jun-2009 18.4283 08-Jun-2009 10.0953 08-Jun-2009 10.4071 08-Jun-2009 10.2783 08-Jun-2009 10.6155 08-Jun-2009 10.0953 08-Jun-2009 0.0000 08-Jun-2009 18.7804 08-Jun-2009 0.0000 08-Jun-2009 0.0000 08-Jun-2009 0.0000 08-Jun-2009 10.0953 08-Jun-2009
Sundaram BNP Paribas Money FundInstitutional Plan-Fortnightly Div Reinvestment Sundaram BNP Paribas Money FundInstitutional Plan-Growth Option Sundaram BNP Paribas Money FundInstitutional Plan-Monthly Div. Reinvestment Sundaram BNP Paribas Money FundInstitutional Plan-Quarterly Div. Reinvestment Sundaram BNP Paribas Money FundInstitutional Plan-Weekly Div. Reinvestment
11.0254
11.0254
0.0000 08-Jun-2009
10.6517
10.6517
10.6517 08-Jun-2009
15.6539 08-Jun-2009
10.5298
10.5298
10.5298 08-Jun-2009
0.0000
0.0000
0.0000 08-Jun-2009
10.7270 13.2957
10.7270 13.2957
-Flexible Income Plan Regular Growth Sundaram BNP ParibasFlexible Fund -Flexible Income Plan Regular - Half Yearly Dividend Sundaram BNP Paribas Flexible Fund -Flexible Income Plan Regular Monthly Dividend Sundaram BNP Paribas Flexible Fund -Flexible Income Plan Regular Quarterly Dividend Sundaram BNP Paribas Flexible FundShort Term Plan - Institutional Daily Dividend Sundaram BNP Paribas Flexible FundShort Term Plan - Institutional Growth Sundaram BNP Paribas Flexible FundShort Term Plan - Institutional Monthly Dividend Sundaram BNP Paribas Flexible FundShort Term Plan - Institutional Weekly Dividend Sundaram BNP Paribas Flexible FundShort Term Plan Regular - Growth 10.8278 10.8278 10.8278 08-Jun-2009
10.3364
10.3364
10.3364 08-Jun-2009
11.0235
11.0235
11.0235 08-Jun-2009
10.2956 13.4288
10.2956 13.4288
47
Plans and Options under the Plan : Dividend, Growth. Face Value (Rs/Unit): Rs. 10 Minimum Investment : Rs. 2000. Entry Load : For applications < Rs.2 crore: 2.25%. For applications = or > Rs. 2 crore: Nil Exit Load : Nil.
Latest NAV Scheme Name Sundaram BNP Paribas Growth FundDividend Sundaram BNP Paribas Growth FundGrowth NAV (Net Repurchase Asset Value) Price 10.7377 67.6877 10.7377 67.6877 Sale Price Date
Latest NAV 48
Scheme Name Sundaram BNP Paribas Select Midcap-Dividend Sundaram BNP Paribas Select Midcap-Growth
Sale Price
Date
16.1456 08-Jun-2009
Latest NAV Scheme Name Sundaram BNP Paribas Select FocusDividend Sundaram BNP Paribas Select FocusGrowth NAV (Net Repurchase Asset Value) Price 10.8745 70.8853 10.8745 70.8853 Sale Price Date
49
Objective : Sundaram BNP Paribas India Leadership Fund seeks to achieve capital appreciation by investing in select stocks of companies which meet criteria of \'Leaders\' in their respective sectors/sub sectors. The leaders are identified as the top two/three companies in any sector/sub sector in terms of net revenue or total income. Structure : Open Ended Equity Scheme Inception Date : June 18, 2004 Plans and Options under the Plan : Dividend, Growth. Face Value (Rs/Unit): Rs. 10 Minimum Investment : Rs. 5000. Entry Load : For applications < Rs.2 crore: 2.25%. For applications = or > Rs. 2 crore: Nil Exit Load : Nil. Latest NAV Scheme Name Sundaram BNP Paribas India Leadership Fund-Dividend Sundaram BNP Paribas India Leadership Fund-Growth NAV (Net Repurchase Asset Value) Price 11.1192 30.6207 11.1192 30.6207 Sale Price Date
50
Latest NAV
Scheme Name Sundaram BNP Paribas S.M.I.L.E.Fund-Dividend Sundaram BNP Paribas S.M.I.L.E.Fund-Growth
NAV (Net Repurchase Asset Value) Price 12.9476 22.9662 12.6563 22.4495
Sale Price
Date
Latest NAV
Latest NAV Scheme Name Sundaram BNP Paribas Monthly Income Plan-Quarterly-Dividend Sundaram BNP Paribas Monthly Income Plan-Growth Sundaram BNP Paribas Monthly Income Plan-Half-yearly Dividend Sundaram BNP Paribas Monthly Income Plan-Monthly Dividend NAV (Net Repurchase Asset Value) Price 10.7802 14.2634 10.6160 10.5002 10.7802 14.2634 10.6160 10.5002 Sale Price Date
ANALYSIS
I.
Scheme Sundaram BNP SMILE Fund Sundaram BNP TaxSaver Sundaram BNP Select Midcap Sundaram BNP India Leadership Fund Sundaram BNP Tax Saver Sundaram BNP Select Focus Sundaram BNP Growth Fund Sundaram BNP Balanced Fund Sundaram BNP Capex Opportunities 52
Sub-Obj Equity-Diversified Equity-ELSS Equity-Diversified Equity-Diversified Equity-ELSS Equity-Diversified Equity-Diversified Balanced Equity-Diversified
NAV 25.53 35.07 103.05 31.56 35.07 73.21 70.11 37.51 20.79
Inceptn 21.64 22.58 40.68 26.25 22.58 33.71 21.72 15.89 24.66
Fund Sundaram BNP Rural India Fund Sundaram BNP Media and Entertainment Opportunities Fund Sundaram BNP Monthly Income Plan Sundaram BNP Bond Saver(Institutional) Sundaram BNP Bond Saver Sundaram BNP Income Plus Sundaram BNP Gift Fund Sundaram BNP Money Fund Sundaram BNP Global Advantage Fund Sundaram BNP Money Fund(Super Institutional plan) Equity-Diversified Sectorial Media And Entertainment MIP Income Income Income Gift Liquid FOP Liquid 10.95 13.37 14.33 27.09 26.96 14.45 14.61 18.43 08.60 18.78 16.22 -NA07.86 10.54 09.28 04.05 03.36 07.48 25.61 08.23 03.64 33.73 06.84 04.69 09.05 05.48 04.78 06.82 -08.23 07.75
(Sources-www.valueresearch.com)
53
Explanation:
We can see from the above graph that Sundaram BNP Rural India Fund has performed well this year, whereas if compared within the scheme we can see that sundaram select mid-cap has performed better since inception than any other scheme, and is still performing better since last year.
II.
54
B)Sundaram Select Midcap Growth :-Performance(%)as on 31,March2009 Sundram Select Mid Cap
Average Mid Cap Funds All Equity Funds Large Cap Funds BSE Mid Cap BSE Sensex S&P CNX Nifty CNX 100 CNX Mid Cap CNX Nifty Junior BSE Small Cap BSE 500 S&P CNX 500
1Year -44.3
-48.3 -36.9 -34.3 -54.0 -37.9 -36.2 -37.6 -45.4 -45.6 -58.6 -42.8 -40.0
2Years -19.3
-22.8 -14.2 -9.6 -25.9 -13.8 -11.1 -12.5 -16.2 -20.6 -29.2 -15.7 -14.6
3Years -9.4
-16.3 -8.4 -3.9 -17.9 -4.9 -3.9 -5.1 -10.7 -12.2 -21.0 -7.9 -7.6
5Years 19.6
14.6 12.3 14.0 7.2 11.7 11.3 10.4 9.5 5.0 12.0 9.4 9.5
C)Sundaram BNP Paribas TaxSaver Fund Table:-Performance(%)as on 31,March2009 Sundram TaxSaver Peer Group Average Sahara Tax Gain Magnum Tax Gain HDFC Tax Saver 56 1 Year -32.0 -39.4 -32.5 -40.4 -36.2 2Years -7.0 -14.4 -6.7 -15.3 -14.9 3years -3.4 -9.7 -5.8 -6.0 -9.6 5Years 22.8 12.4 14.8 26.4 19.3
Birla Sun Life Tax Plan Reliance Tax Saver UTI Equity Tax Saving Tata Tax Saving Kotak Tax Saver LIC MF Tax Plan All Equity Fund BSE 200 BSE Mid Cap BSE Sensex S&P CNX Nifty CNX100 CNX Midcap CNX Nifty Junior BSE Small Cap BSE 500 S&P CNX 500
-39.2 -30.7 -37.7 -39.4 -44.2 -37.5 -36.9 -41.0 -54.0 -37.9 -36.2 -37.6 -45.4 -45.6 -42.8 -58.6 -40.0
-16.5 -14.5 -13.1 -15.1 -18.9 -17.1 -14.4 -14.4 -25.9 -13.8 -11.1 -12.5 -16.2 -20.6 -15.7 -29.2 -14.6
-10.0 -10.0 -10.6 -11.2 -11.2 -12.7 -8.4 -6.9 -17.9 -4.9 -3.9 -5.1 -10.7 -12.2 -7.9 -21.0 -7.6
13.1 -----8.9 10.0 -----2.1 12.3 9.2 7.3 11.7 11.3 10.4 9.4 5.0 9.4 12.0 9.5
Sources-sundram funds fact sheets) Comment: The above table shows a comparison between the Sundaram Taxsaver Fund and other similar category funds and the market. It can be seen that Sundaram Taxsaver Fund has shown 22.8% as on 5 years performance, which is better than Sahara Tax Gain, HDFC Tax Saver, Birla Sun Life Tax Saver and Tata Tax Saver. The average performance of similar category funds is 12.4% which is lower than Sundram Tax Saver and all the market index has showed less then Sundram tax Saver Mutual Fund.
ING Balanced Fund ICICI Prudential Balanced Fund JM Balanced Fund Average Performance Of Similar Fund S&P Nifty BSE Sensex BSE 200 CNX 500
Comment:
58
Comment:
Comment
59
Track Record of Sundram BNP Paribas Mutual Fund With respect to Market Index (Performance and AUM as on May31, 2009) Assets Under Management -13469 crore Assets Under Management-12413 crore (End of month) (Average)
Fund/Index
Launch Period
One Year
Three Years
Five Years
23.6 23.6 23.9 29.1 24.5 23.9 35.2 21.7 23.9 --------------------------------
Since Launch
20.2 14.0 -----33.4 25.1 26.7 40.1 27.3 26.7 25.5 24.1 23.4 20.8 14.6 23.4
Sundram Growth Fund BSE 200 S&P CNX 500 Sundram Select Focus S&P CNX Nifty S&P CNX 500 Sundram Select Mid Cap BSE Mid Cap S&P CNX 500 Sundram India Leadership S&P CNX Nifty S&P CNX 500 Sundram SMILE Fund CNX Mid Cap S&P CNX 500
Apr-97
7.3 11.2 10.7 14.7 13.1 10.7 7.6 0.0 10.7 6.9 13.1 10.7 11.0 6.8 10.7
July-02
July-02
July-04
Feb-05
Feb-07
Feb-07
Jun-00
Sundram Tax Saver BSE 200 S&P CNX 500 Sundram Capex Opportunities BSE Capital Goods S&P CNX 500 Sundram Rural India BSE 500 S&P CNX 500 Sundram Energy Opportunities BSE Oil & Gas S&P CNX 500 Sundram Financial Opportunities CNX Banks S&P CNX 500 Sundram Entertainment Opportu. CNX Media S&P CNX 500 Sundram Money fund CRISIL Liquid Fund Index Sundram Ultra Short Term Fund CRISIL Liquid Fund Index Sundram Bond Saver CRISIL Composite Bond Saver Sundram Monthly Income Plan CRISIL MIP Blended Index
Nov-99
14.6 11.2 10.7 10.5 17.5 10.7 2.6 9.9 10.7 ------------------------------------------------------------------------------------------7.0 6.7 5.6 8.5
22.6 14 14.2 19.6 27.2 13.1 1.9 3.8 4.5 -10.8 0.2 -25.1 31.5 27.5 0.3 31.3 -30.2 -2.8 7.7 7.3 8.8 7.9 9.0 ------6.9 7.2
Sep-05
May-06
Jun-08
Jun-08
-----------------------
Jun-08
----------------------
Mar-00
8.3 8.6
Apr-07
8.8 8.6
Dec-97
9.1 8.8
Jan-04
6.6 7.5
(Sources-www.sundrambnpparibas.in)
61
III] COMPARISON OF SUNDARAM MUTUAL FUNDS WITH OTHER FUNDS AS RANKED AND RATED:
A)Ranked:
1)Medium term Institutional plan: S No Scheme Name 12 13 11 4 3 2 10 1 9 8 7 6 5 Start Date End Date Nav Nav HSBC Income Inv Inst 10.00 9.94 Religare Active Income Fund Inst 10.00 9.67 ING Income Inst 10.00 10.02 Sundaram BNP Paribas Bond Saver Inst 12.57 14.07 Principal Income Inst 13.50 15.20 HSBC Flexi Debt Inst 10.53 12.15 Tata Dynamic Bond B 13.40 13.76 ICICI Prudential Income Inst 24.23 30.48 DSPBR Strategic Bond Inst 1000.00 1039.74 JP Morgan India Active Bond Inst 10.01 10.49 Tata Income Plus HI 13.41 14.35 Kotak Flexi Debt Inst 10.08 10.92 ICICI Prudential Income Opportunities Inst 10.00 10.85 Ranking is taken on July 1,2009 By Value Research.Com Return -0.64 -3.30 0.20 11.97 12.57 15.40 2.72 25.81 3.97 4.73 7.07 8.39 8.50
2)Hybrid Debt oriented Plan S No Scheme Name Start Date Nav End Date Nav Return
20 16 15
ICICI Prudential Real Estate Sec Inst Kotak Wealth Builder Series 1 Franklin Templeton Capital Safety 3 Yr
62
S No Scheme Name 14 13 12 11 10 9 8 7 6 5 4 3 2 1 19 18 17
Start Date Nav Franklin Templeton FTF Series IX Plan A 9.65 Sundaram BNP Paribas Capital Protection Oriented 1 5Y 10.21 Franklin Templeton Capital Protection 3 Yr 10.61 Birla Sun Life Capital Protection Oriented 5 Yrs 10.04 UTI Capital Protection Oriented 3Y Retail 10.61 Franklin Templeton FTF Series IX Plan B 9.61 Franklin Templeton FTF Series I 60 Month 14.28 Franklin Templeton FTF Series VI-60 Months 11.31 Franklin Templeton FTF Series IV 60 Months 11.65 Franklin Templeton FTF Series VIII-60 Months Plan A 10.43 Franklin Templeton Capital Safety 5 Yr 10.39 Franklin Templeton Capital Protection 5 Yr 10.34 UTI Capital Protection Oriented 5Y Retail 10.37 Franklin Templeton FTF Series II 60 Month 12.86 Birla Sun Life Capital Protection Oriented 3 Yrs 10.34 SBI Capital Protection Oriented Fund Series I 9.71 Sundaram BNP Paribas Capital Protection Oriented 1 3Y 11.03 Ranking is taken on July 1,2009 By Value Research.Com
End Date Nav Return 10.72 11.35 11.81 11.22 11.88 10.87 16.21 12.84 13.27 11.89 12.08 12.04 12.09 15.25 10.98 10.57 12.01 11.15 11.20 11.26 11.75 12.01 13.13 13.47 13.55 13.95 14.01 16.28 16.52 16.58 18.53 6.22 8.81 8.96
16 15 14 13 12 11 10 9 8 7 6 5
Tata Tax Saving HDFC LT Advantage Franklin India Index Tax Magnum Taxgain DBS Chola Tax Saver Sundaram BNP Paribas Taxsaver Birla Sun Life Tax Relief 96 HSBC Tax Saver Equity Fidelity Tax Advantage Religare Tax Plan Franklin India Taxshield HDFC Taxsaver
36.82 82.55 30.07 40.82 10.62 29.18 62.08 9.16 12.25 9.88 121.50 122.54
40.54 91.15 33.46 45.65 12.13 33.44 71.43 10.61 14.24 11.58 144.68 148.27
10.10 10.42 11.29 11.83 14.22 14.60 15.06 15.86 16.30 17.21 19.08 21.00
63
S No 4 3 2 1 20 19 18 17
Scheme Name Start Date Nav End Date Nav Reliance Tax Saver 11.76 14.30 Taurus Tax Shield 21.80 26.67 Sahara Tax Gain 20.20 25.68 Canara Robeco Equity Tax Saver 12.98 17.33 ICICI Prudential Tax Plan 80.81 86.26 DSPBR Tax Saver 10.88 11.73 LICMF Tax Plan 22.13 24.11 Baroda Pioneer ELSS 96 18.45 20.10 Ranking is taken on July 1,2009 By Value Research.Com
S No Scheme Name 1 2 3 4
UTI Banking Sector Reg Reliance Banking Retail Sundaram BNP Paribas Financial Services Opportunities Ret JM Financial Services Sector 9.67 Ranking is taken on July 1,2009 By Value Research.Com
64
65
S No 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1
Scheme Name Start Date Nav Tata FHF Series 5 36 Months Plan G 11.23 Reliance FHF V 3Y Plan Series I Inst 10.67 HDFC FMP 18M Jan 2008 Wholesale 10.23 HDFC FMP 36M Jun 2007 Retail 10.83 HDFC FMP 18M Apr 2008 (2) Wholesale 10.03 Sundaram BNP Paribas FTP 16M Inst 10.07 HDFC FMP 18M Apr 2008 Wholesale 10.04 HDFC FMP 36M Jun 2007 Wholesale 10.87 UTI Fixed Term Sr IV PIX May 08 10.05 SBI Debt Fund Series 18 Months 3 Retail 10.05 SBI Debt Fund Series 18 Months 3 Inst 10.05 ING Fixed Maturity Series XXXII Retail 10.74 Templeton FHF Series IV Plan A Ret 10.51 Templeton FHF Series IV Plan A Inst 10.53 ING Fixed Maturity Series XXXII Inst 10.78 Ranking is taken on July 1,2009 By Value Research.Com
End Date Nav 12.42 11.82 11.33 12.00 11.14 11.18 11.15 12.09 11.19 11.20 11.20 12.01 11.78 11.80 12.11
Return 10.68 10.70 10.77 10.81 11.00 11.04 11.05 11.25 11.28 11.40 11.41 11.83 11.99 12.11 12.38
B)Rated:
Scheme Name Reliance Tax Saver Fund HSBC Tax Saver Equity Fund Fidelity Tax Advantage Fund Sundaram TaxSaver HDFC TaxSaver DSP Blackrock Tax Saver Fund Franklin India Tax shield SBI Magnum Tax Gain Scheme 93 - Growth UTI Equity Tax Savings Plan - Growth Tata Tax Saving Fund ICICI Prudential Tax plan - Growth HDFC Long Term Advantage Fund - Growth Birla Sun Life Tax Plan - Growth Kotak TaxSaver - Growth Fortis Tax Advantage Plan - Growth Principal Personal Taxsaver Birla Sun Life Tax Relief 96 - Growth PRINCIPAL Tax Savings Fund
Ranking
66
Scheme Name Canara Robeco Income Scheme ICICI Prudential STP ICICI Prudential Income Fund IDFC D B F- Plan A Birla Sun Life Income Plus Fortis Flexi Debt Fund Kotak Bond Deposit IDFC SSIF - Invt. Plan Reliance Income Fund Reliance Short Term Fund DSP BlackRock Strategic Bond Fund DWS Short Maturity Fund HDFC Income Fund Templeton India Income Fund Templeton India IBA - Plan A Birla Sun Life Income Fund LIC Bond Fund DSP BlackRock Bond Fund UTI Bond Fund HDFC HIF Sundaram BNP Paribas Bond Saver HSBC Flexi Debt Fund - Ret PRINCIPAL Income Fund Tata Income Fund DWS Premier Bond Fund SBI Magnum Income
Scheme Name Birla Sun Life Savings Fund - IP - Growth ICICI Prudential Liquid - I P - Growth HDFC Cash Mgmt Fund - Treasury Advantage - WP Growth UTI Treasury Advantage Fund - IP - Growth UTI Liquid Fund - Cash Plan - IP - Growth Birla Sun Life Cash Plus - I P - Growth Religare Ultra Short Term Fund - IP - Growth HSBC Ultra Short Term Bond Fund - IP - Growth DWS Insta Cash Plus Fund - IP - Growth Canara Robeco Liquid - IP - Growth
67
Sundaram BNP Paribas Ultra Short Term - IP - Growth HDFC Liquid Fund - Premium Plan - Growth Tata Liquid Fund - HIP - Growth JM High Liquidity - I P - Growth PRINCIPAL Cash Mgmt Fund LO- I P - Growth ING Treasury Advantage Fund - IP - Growth SBI Premier Liquid Fund - IP - Growth Templeton India Ultra Short Bond Fund - IP - Growth Reliance Liquid Fund - TP - IP - Growth DWS Money Plus Fund - IP - Growth Templeton India TMA - IP - Growth DSP BlackRock Money Manager Fund - IP - Growth Canara Robeco Treasury Advantage Fund - IP - Growth IDFC Money Manager - Invest Plan - Plan B - Growth Fidelity Ultra Short Term Debt Fund - IP - Growth Religare Liquid Fund - IP - Growth IDFC Money Manager - Treasury Plan - Plan B - Growth ING Liquid Fund - IP - Growth IDFC Cash Fund - Plan B - IP - Growth
Fund House
5 star
4star
3 star
2 star
1star
Total
DSP Black Rock Deutshe Sundram BNP Benchmark SBI Mutual Reliance Mutual Sahara Mutual IDFC HDFC Mutual ICICI Prudential Canara Robeco Baroda Pioneer 68
2 2 2 1 2 2 1 1 0 2 0 0
2 0 4 1 3 1 1 0 5 2 2 1
0 0 2 0 2 2 0 1 2 3 2 0
0 0 0 0 1 1 2 0 4 3 0 2
0 0 0 1 2 0 0 0 0 0 1 0
4 2 8 3 10 6 4 2 11 10 5 3
4 2 6 2 5 3 2 1 5 4 2 1
100 100 75 67 50 50 50 50 45 40 40 33
HSBC Mutual Franklin Templeton Birla Sun Life Kotak Mutual Tata Mutual UTI Mutual DBS Chola Principal ING Mutual LIC Mutual Taurus Mutual Fortish Mutual JM Mutual Fidelity Mutual
0 0 0 0 1 1 0 0 0 0 0 0 0 0
1 3 4 2 2 2 1 1 0 0 0 0 0 0
1 6 10 1 6 8 1 3 3 1 3 1 1 1
0 1 1 4 3 4 1 3 1 4 1 1 1 0
1 0 0 1 1 1 3 1 2 1 0 1 1 0
3 10 15 18 13 16 6 8 6 6 4 3 3 1
1 3 4 2 3 3 1 1 0 0 0 0 0 0
33 30 27 25 23 19 17 13 0 0 0 0 0 0
The ratings are a composite measure of historical risk adjusted returns based on the weighted average monthly returns for the past three- and five years periods. Five stars indicate that a fund is in the top 10 % of its category in terms of historical risk adjusted returns. Four stars indicate that a fund is in the next 22.5% of its category. Three stars indicate that a fund is in the next 35% of its category. Two stars indicate that a fund is in the next 22.5% of its category. One star indicate that a fund is in the bottom 10% of its category.
(Rating source: Value Research: analysis: In House; Value Research rating as on December31, 2008)
69
SchemeName IDFC Dynamic Bond Fund - Plan A IDFC Super Saver Income Fund Investment Plan A Tata Short Term Bond Fund
RankingCategory Open Ended Debt - Long Term Open Ended Debt - Long Term
Award
Open Ended Debt - Short Term Open Ended Diversified Equity Birla Sun Life Dividend Yield Plus Aggressive Open Ended Diversified Equity Birla Sun Life MNC Fund Aggressive Open Ended Diversified Equity DSP BlackRock Top 100 Equity Fund Aggressive Open Ended Diversified Equity Fidelity International Opportunities Fund Aggressive Open Ended Diversified Equity UTI Dividend Yield Fund Aggressive Open Ended Diversified Equity Birla Sun Life Frontline Equity Fund Defensive Open Ended Diversified Equity ICICI Prudential Dynamic Plan Defensive Open Ended Diversified Equity IDFC Imperial Equity Fund Defensive Open Ended Diversified Equity Reliance Equity Fund Defensive Open Ended Diversified Equity UTI Equity Fund Defensive Open Ended Diversified Equity UTI Opportunities Fund Defensive Franklin India Index Fund - NSE Nifty Open Ended Equity Index Plan Open Ended Equity Linked Savings Sundaram BNP Paribas Taxsaver Fund Scheme (ELSS) LIC MF Floating Rate Fund - Short Term Open Ended Floating Rate Fund Templeton India Government Securities Open Ended Gilt Composite Plan Templeton India Government Securities Open Ended Gilt Long Term Plan ICICI Prudential Flexible Income Plan Open Ended Liquid Plus Kotak Flexi Debt Fund Open Ended Liquid Plus LIC MF Liquid Fund Open Ended Liquid Plus Tata Floater Fund Open Ended Liquid Plus Birla Sun Life Liquid Plus - Institutional Open Ended Liquid Plus - Institutional Plan Plan Open Ended Liquid Plus - Institutional Fortis Money Plus - Institutional Plan Plan Open Ended Liquid Plus - Institutional Lotus India Liquid Plus - Institutional Plan Plan HDFC Multiple Yield Fund - Plan 2005 Open Ended Marginal Equity Reliance Monthly Income Plan Open Ended Marginal Equity
70
SchemeName Tata Balanced Fund Birla Sun Life Income Plus IDFC Dynamic Bond Fund - Plan A Tata Short Term Bond Fund ICICI Prudential Infrastructure Fund IDFC Premier Equity Fund Birla Sun Life Frontline Equity Fund HDFC Growth Fund ICICI Prudential Dynamic Plan Kotak 30 Fund Sundaram BNP Paribas Select Focus Fund Franklin India Index Fund - NSE Nifty Plan SBI Magnum Tax Gain Scheme 93 Canara Robeco Floating Rate Fund Short Term PRINCIPAL Floating Rate Fund Flexible Maturity Plan Birla Sun Life Gilt Plus Regular Plan IDFC Government Securities Investment Plan A Kotak Flexi Debt Fund Reliance Liquidity Fund Canara Robeco Liquid - Institutional Plan
RankingCategory Open Ended Balanced Open Ended Debt - Long Term Open Ended Debt - Long Term Open Ended Debt - Short Term Open Ended Diversified Equity Aggressive Open Ended Diversified Equity Aggressive Open Ended Diversified Equity Defensive Open Ended Diversified Equity Defensive Open Ended Diversified Equity Defensive Open Ended Diversified Equity Defensive Open Ended Diversified Equity Defensive Open Ended Equity Index Open Ended Equity Linked Savings Scheme (ELSS) Open Ended Floating Rate Fund Open Ended Floating Rate Fund Open Ended Gilt Open Ended Gilt
Award
Open Ended Liquid Plus Open Ended Liquid Plus Open Ended Liquid Plus - Institutional Plan Open Ended Liquid Plus - Institutional ICICI Prudential Liquid - Institutional Plan Plan HSBC Monthly Income - Savings Plan Open Ended Marginal Equity LIC MF Floating Rate - Monthly Income Open Ended Marginal Equity Plan A DSP BlackRock Technology.com Fund Open Ended Sectoral - Technology
71
Limitations
Less awareness in general masses is one of the biggest hurdles of the success of the
Mutual Fund. Despite of various opportunity in mutual fund industry the general investor is right now not fully aware with the mutual fund. People do not feel like investing large amounts in mutual funds. I was unable to collect full information of clients as they did not feel free to disclose their details with me.
The time was short to learn and gain better knowledge of the working of the Sundram
Finance.
Office of Sundram Finance branch was situated at Barahakhamba (Connaught Place) a
very crowdy place and very reputed place so that the customers are very time oriented.
I have a limit sample size (25) only.
72
Recommendations
It is found that there is less awareness of Mutual Funds among the general public, they are totally unaware of the benefits it provides above the bank and other investments. People should be made aware about its advantages by various techniques like publishing it in common magazines which are mostly read by the general public like India Today. People are scared about investing in such funds, they think that its very risky and such large amounts of their money will be lost, this thinking should be removed by the financial Institutions who help investors in investing their money. Even the people employed in the Financial Institutions has very little knowledge of different funds available in the market and their ranking in the market because of which investors who are even ready to invest, but because of no full information which can satisfy them; they also fear to invest their money. This should be avoided. Employees should be properly trained.
Investors feel their personal information is leaked out, the institutions fail to provide to the investors full information secrecy. Employees in the Financial Institutions do not hear to the investors and doesnt provide correct advice, this should be avoided.
73
Conclusion
Thus, I conclude that Mutual Funds are though subject to market risk but are better than any other direct investments. Here risk is very well diversified and managed by Fund Managers. Fund Managers keep themselves fully aware of the current market scenario and keep on updating their fund portfolios, the investor doesnt have to consider about such risks. The investors get such opportunities as switching to any other fund any day they want.. I saw Sundaram Mutual Funds as the one having most well diversified portfolio. The risk is fully diversified. Sundaram- Tax Saver, Select Mid Cap, Select Focus, Growth, S.M.I.L.E funds are doing quite well in market. Investors who are Equity players and also want a secured investment of their money can go in for this type of fund.
74
Bibliography
2. Sundaram Fund Fact Sheet 3. Other Fund Fact Sheets 4. Economic Times
5. Mutualfundsindia.com 6. Outlookmoney.com 7. Wiseinvestoronline.com 8. Sundaramfinancials.com
9. Research Value
75