PRESENTED BY:

Himanshu Gurani
Roll no. 33

INTRODUCTION

Project name Comparative analysis of Mutual funds

Company RR Investors Capital Services Private Ltd.
Office New Delhi
Training period 52 days
Training specialization FINANCE
Mentor Mr. Tarun Pathak (AVP)
My specialization of learning is:- Mutual funds

OVERVIEW OF MUTUAL
FUND
Mutual fund is aninvestment
vehiclemade up of a pool of funds
collected from many investors for the
purpose ofinvestingin securities such as
stocks,
bonds,money
market
instruments and similar assets. Mutual
funds are operated bymoney managers,
who invest the fund's capital and attempt
to producecapital gainsand income for
the fund's investor

HISTORY OF MUTUAL FUND

o Phase 1- 1964-87: Growth of Unit Trust
of India
o Phase 2-1987-93: Entry of Public Sector
Funds
o Phase 3 1993-1996: Emergence of
Private Funds
o Phase 4 1996-99: Growth and SEBI
Regulation
o Phase 5 1999 2004: Emergence of a
large and uniform industry
o Phase 6 From 2004 onwards:

WORKING OF MUTUAL FUND

MUTUAL FUND
ADVANTAGES & DISADVANTAGES

Diversification
Professional
management
Liquidity
Economies of scale
Tax benefits

Fluctuating returns
Dilution
Fees and expenses
Loss of control

MUTUAL FUND INVESTING

STRATEGIES

Systematic Investment Plan(SIP)

Systematic Withdrawal Plan(SWP)
Systematic Transfer Plan(STP)
Fixed Maturity Plan(FMP)

TAXES UNDER MUTUAL

FUND

SEBI GUIDELINES
Mutual funds are to be established in the
form of a trust under the Indian Trust
Act,1882.
They have to set up a board of Trustees
and Trustee Companies and constitute their
Board of Directors.
The minimum net worth of AMCs is
stipulated at Rs. 5 crore
All schemes floated by mutual funds are to
be registered with SEBI.

LEADING AMCs IN INDIA

Axis Asset Management Company Ltd.

Birla Sun Life Asset Management Company Ltd
Baroda Pioneer Asset Management Company Ltd
Deutsche Asset Management (India) Pvt. Ltd.
Edelweiss Asset Management Ltd
Franklin Templeton Asset Management (India) Pvt
Ltd.
HSBC Asset Management (India) Pvt. Ltd.
IDBI Asset Management Ltd.
JPMorgan Asset Management India Pvt. Ltd.
Kotak Mahindra Asset Management Company Ltd.
SBI Funds Management Private Ltd.

TOP 5 BALANCED MUTUAL FUNDS

Fund
Name

Crisil
Rank

Manag AUM(in
er
Rs.
Crores)

NAV(in 1 Year
Rs)
CAGR

3 Year
CAGR

DSP-BR
Balanced
fund

Rank 3

Atul
Bhole

1,069.64 126.74
8

19.9%

24.4%

Birla Sun
Life 95
fund

Rank 1

Mahes
h Patil

2632.13

649.63
0

18.4%

23.9%

HDFC
Balanced
fund

Rank 2

Chirag
Setalw
ad

5127.32

123.36
4

16.6%

26.7%

TATA
Balanced
fund

Rank 3

S.
Raghu
Achary
a

5630.83

187.68
4

12.5%

24.1%

ICICI

Rank 3

Manish

2637.50

107.09

19.9%

23.9%

COMPANY PROFILE
RR Investors Capital Services Private Ltd.
Head office : 412-422, 4th Floor,
Indraprakash Building 21, Barakhamba
road, New delhi, 110001
Telephone: 011-23636362, 011-23636363
Toll free: 1800110444
Managing director : Mr. Rajat Prasad
Email : rrinvestor@rrfcl.com
Website : www.rrfinance.com

VISION & MISSION

To be the most efficient and diversified
service providers in the Indian financial and
insurance markets.
Our Priorities
Customers
Vendors
Employees
Shareholders
By Order.

Corporate
Structure
Corporate
Structure

RR Financial Consultants Ltd.

Equity
Brokers
RR Equity Brokers P. Ltd.

Investme
nt
Banking
RR Investors Capital Services

Insurance
Brokers

NBFC

RR Insurance Brokers P. Ltd.

RR Fincap P. Ltd.

Ltd.

Commodit
y Brokers
RR Commodity Brokers P. Ltd.

Investor
Securities
RR Investor Securities Trading P.
Ltd.

Delhi

Research
RR Information & Research P. Ltd.

24 PAN India RR
Offices
Agent Presence
in 500 cities

IT
Solutions
RR IT Solutions P. Ltd.

Commodity
Brokers

RR is Present in
all metro cities

Foundation
RR Foundation

Product range of the Company

Financial Products

Insurance Products

Stock Broking
Products

Mutual Fund

Life Insurance

Equity

Fixed Deposit

General Insurance

Commodity

IPO
Bonds
Tax Saving Schemes

Derivatives

Regional Offices Location

Mumbai
Bangalore
Calcutta
Lucknow

Dehradun
Vadodra
Jaipur
Annual Turnover of 2015:44 Crore
Ahembdabad
Market Capitalization:- 12.21 Crore
Share Price:- 11.00

Research Study
HDFC Balanced Fund
ICICI Pru Value discovery Fund
Scheme name

HDFC
Balanced
Fund

ICICI Pru
value
discovery
Fund

NAV

121.95

125.88

1 Year return

15.9%

14.2%

2 Year return

13.0%

12.6%

3 Year return

27.1%

34.2%

Methods Of Comparison
Sharpe Ratio
The Sharpe ratio developed by William F.
Sharpe, is the ratio of a portfolios total return
minus the risk free rate divided by the standard
deviation of portfolio, which is a measure of its
risk. Sharpe ratio measures the performance of
the portfolio compared to the risk taken- the
higher the Sharpe ratio, the better the
performance and greater the profits for taking
the additional risk.

Sharpe Ratio= Risk premium/ standard deviation of

the portfolio return
Risk premium = Total portfolio return risk free rate
Portfolio returns of HDFC Balanced fund
1 year return =15.9%
2 year return =13.0%
3 year return =27.1%
5 year return =17.6%

Risk free rate = 6.56%

Standard deviation = 5.285%
Sharpe ratio = 15.9-6.56/5.28
= 1.769

Portfolio return of ICICI Value Discovery fund

1 year return=14.2%
2 year return=12.6%
3 year return=34.2%
5 year return=24.1%

Risk free Rate = 6.56

Standard deviation = 8.66%

Sharpe ratio = 14.2-6.56/8.66

= 0.882

Treynor Ratio
Treynor Ratio= Total portfolio return
risk free rate/ Portfolio beta
1 year Portfolio return of HDFC
=15.9%
Risk free rate =6.56%
Portfolio beta of HDFC= 0.674684
Treynor ratio=15.9-6.56/0.674684
=13.8435

1 year Portfolio return of ICICI= 14.2%

Risk free rate = 6.56%
Portfolio beta of ICICI = 0.798965

Treynor ratio =14.2-6.56/0.798965

=9.5623
Since, the Treynor ratio of HDFC
balanced fund is higher
HDFC Balanced fund is better than
the ICICI value discovery fund

Jensens Alpha
Alphais a coefficient that is
proportional to theexcess returnof a
portfolio over its required return, or its
expected return, for its expected risk
as measured by its beta. Jensens
alpha can be positive, negative, or
zero. Note that, by definition, Jensens
alpha of the market is zero. If the
alpha is negative, then the portfolio is
underperforming the market; thus,
higher alphas are more desirable.

Jensens Alpha = Total Portfolio Return

Risk Free Rate [Portfolio Beta (Market
Return Risk Free Rate)]
1 year Portfolio return of HDFC = 15.9%
Risk free rate = 6.56%
Portfolio beta = 0.674684134
Market return = 0.104690464

Jensen alpha = 15.9%-6.56%[0.674684134*(0.104690464-0.065)]

= 15.9%-6.56%-[0.026779]
= 9.313221

Portfolio return of ICICI = 14.2%

Risk free rate = 6.56%
Portfolio beta = 0.798964883
Market return = 0.104690464

Jensen alpha = 14.2%-6.56%[0.798964883*(0.104690464-0.065)]

= 14.2%-6.56%-[0.031711]
= 7.608289
As Jensens Alpha suggests that higher
alphas are more desirable; HDFC Fund is
better than ICICI Fund.