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By
K.MADHUSOOTHANAN
VMM 6OO
INTRODUCTION
Investment is a commitment of funds made in the
expectation of some positive return. If the investment is
properly undertaken, the returns will match with the risk
the investor assumes. Investment goals vary from person
to person, business to business. While some want
security, others give more weightage to returns alone.

There are various types of investments such as real

estate, stocks and shares, bonds and debentures, mutual
funds, fixed deposits, insurance, national saving
certificate etc. As far as the returns are high the risk
involved is also more. A concept, which balances the risk
and returns, is mutual funds.
—UTUAL FUND

Ä A mutual fund is nothing more than a collection

of stocks and/or bond. One can think of a
mutual fund as a company that brings together a
group of people and invests their money in
stocks, bonds, and other securities. Each
investor owns shares, which represent a portion
of the holdings of the fund.
 

 
Ä The flow chart below describes broadly the
working of a mutual fund:
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 Because a mutual fund buys and
sells large amounts of securities at a time, its transaction
costs are lower than what an individual would pay.
 Just like an individual stock, a mutual fund
allows an investor to request that his shares be converted
into cash at any time.
Ä
Ä   Buying a mutual fund is easy! Pretty well
any bank has its own line of mutual funds, and the
minimum investment is small. Most companies also
have automatic purchase plans whereby as little as 500
Rupees can be invested on a monthly basis
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Ä They are one of the reputed India¶s leading Mutual
Funds, with Quarter Average Assets Under
Management (AAUM) of Rs. 1,02,066 Crores
Ä Reliance Mutual Fund, a part of the Reliance - Anil
Dhirubhai Ambani Group
Ä Reliance Capital Ltd
has interests in asset management, life and general
insurance, private equity and
proprietary investments, stock broking and other
financial services.
Ä Reliance Mutual Fund (RMF) is one of India¶s
leading Mutual Funds, with Quarter Average
Assets Under Management (AAUM) of Rs.
1,02,066 Crores
Ä Reliance Mutual Fund (RMF) is one of India¶s
leading Mutual Funds, with Quarter Average
Assets Under Management (AAUM) of Rs.
1,02,066 Crores
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Ä Mutual Funds and securities investments are
subject to market risks and there is no assurance or
guarantee that the objectives of the Scheme will be
achieved
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RESEARCH —ETHODOLOGY
Ä a a
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 !
The descriptive research includes surveys and
fact-finding enquires of different kinds. The major
purpose of descriptive research is description of the
state of affairs, as it exists at present. The major
characteristic of this method is researchers has no
control over the variables, he can only report what
has happened or what is happening.

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Ä "   "
The study is based on secondary data.
Ä   a"   " !
The research has collected the secondary data
from the company¶s records, products pamphlet,
internet.
TECHNIQUES OF ANALYSIS

Ä 2
!
Beta = [Cov (r, Km)] / [StdDev (Km)] 2
Where:
r is the return rate of the investment;
Km is the return rate of the asset class.
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!

S(x) = (r-R) / StdDev(x)

Where x is some investment; r is the average

annual rate of return of x; R is the best available
rate of return of a ³risk-free´ security (i.e. cash);
StdDev is the standard deviation of r.
 
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Ä #
$ #%!

Return = Current NAV Value ± Previous NAV Value +

Dividend
Previous NAV Value
Ä 





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