Summer Intrnship Project

SUMMER INTERNSHIP PROJECT
AT
N. J. INDIA INVEST Pvt. Ltd.
AND
RESEARCH STUDY
ON
ANALYSIS OF EQUITY MUTUAL FUND SCHEMES
SUBMITTED BY
DHWANI MALDE
ENROLLMENT NO.
157700592069
GUIDED BY
Prof. (Dr.) AJAY SHAH
ACADEMIC YEAR
2016-17
SUBMITTED TO
SHRI JAYSHUKHLAL VADHAR INSTITUTE OF MANAGEMENT
STUDIES (JVIMS)
BIPIN T. VADHAR COLLEGE OF MANAGEMENT JAMNAGAR
AFFILIATED TO
GUJARAT TECHNOLOGICAL UNIVERSITY
AHEMDABAD
1
Students Declaration
I, DHWANI MALDE, student of Shri Jayshukhlal Vadhar Institute of Management Studies and hereby
declare that this project is a result of culmination of my sincere efforts in one reputed company NJ
INDIA INVEST during the academic year of 2016 2017
I declare that this submitted work is done solely by me and to the best of my knowledge no such work has
been submitted by any other person for the award of degree. I also declare that all the information
collected from various primary and secondary sources have been duly acknowledge in this project report.
NAME OF STUDENT: DHWANI MALDE

ENROLLMENT NO.:157700592069
SIGNATUER:
ACKNOWLEDGEMENT
I would like to acknowledge the support and contribution provided by Branch Manager Mr Ravindra
Pansara and other staff members of the organization where the training was undertaken as well as of the
respondents who helped me carry out my research work successfully. I am also thankful to my Project
Guide Dr. Ajay D Shah for his constant support and guidance. I would like to thank the Institute for
giving me the opportunity to take up the training and project work.
(DHWANI MALDE.)
PREFACE
As a part of my course curriculum of MBA in summer internship program, we are assigned some
practical studies as well as the theoretical knowledge in the related areas for completing the management
research project. I am preparing comprehensive report on MF industry and ANALYSIS OF MUTUAL
FUND SCHEMES (EQUITY SCHEMES).
The basic idea of assignment of this project is to augment the knowledge of students about the industry in
its totality. This makes students more conscious about industry and it makes student capable analysing
industry's position in the competitive market. This may also enhance student's logical ability.
So far as the selection of the industry is concerned, I have chosen the MF industry. In my project, I am
making use of Primary and secondary data.
This project has enhanced my knowledge about Mutual Fund and the industry as whole. I have gained lot of
knowledge from this project and I believe this will help me in near future.
TABLE OF CONTENTS
Title Page
Students Declaration
Acknowledgement
Preface
Executive Summary
Industry Overview
Company Profile
General Information
12
Mission and Vision
13
Products and Service
13
Management Team
15
Overview of Departments
16
Review Literature
24
Introduction to topic
31
Research Methodology
38
Problem Statement
40
Objective of Study
40
Scope of Study
40
Hypothesis
40
Research Design
41
Sample Design
41
Limitation of Study
41
Data Analysis and Interpretation
42
Findings
90
Conclusion
91
5
EXECUTIVE SUMMARY
NJ India Invest Pvt. Ltd. Has made significant achievement in the country ever since 1994 with the start
of providing financial services. The immense potential of NJ has motivated to provide customer
satisfaction and wealth creation.
The research objective of the study is to provide solution to the investors confusion regarding which
Equity scheme to invest. To provide proper analysis regarding the Risk in the schemes under study and
their Returns. The research method used for the study is Descriptive study with the sample of 20 Equity
schemes. The data is collected through secondary source.
The result of the study suggest that out of 20 schemes under study 19 schemes have outperformed the
Benchmark. Only 1 scheme Franklin India Balanced Fund Gr. has underperformed its Benchmark.
The study shows the result of the selected schemes only. The schemes shows result based on last five
years data only. The study shows the result based on data collected from secondary source only.
INDUSTRY
OVERVIEW
INDUSTRY PROFILE
A mutual fund is a type of professionally managed collective investment vehicle that pools money
from many investors to purchase securities. A common pool of money into which investor put their
contribution. This money is to be invested according to the pre-stated objectives of the fund. Ownership
of the fund is joint or mutual amongst all investors -equivalent to the contribution made as a proportion of
the overall fund Ownership through holding of units at NAV
MUTUAL FUNDS INDUSTRIES IN INDIA

The origin of mutual fund industry in India is with the introduction of the concept of mutual fund
by UTI in the year 1963. Though the growth was slow, but it accelerated from the year 1987 when nonUTI player entered the industry
First Phase - 1964-1987

Unit Trust of India (UTI) was established in 1963 by an Act of Parliament. It was set up by the
Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve
Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India
(IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by
UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs. 6,700 crores of assets under management.1
Second Phase - 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non-UTI, public sector mutual funds set up by public sector banks. SBI
Mutual Fund was the first non-UTI Mutual Fund established in June 1987 followed by Canbank Mutual
Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank
of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989
while GIC had set up its mutual fund in December 1990.
At the end of 1993, the mutual fund industry had assets under management of Rs. 47,004 crores.2
Third Phase - 1993-2003 (Entry of Private Sector Funds)
With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which
the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be
registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the
first private sector mutual fund registered in July 1993.
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 Fund)
Regulations 1996.
1,2: www.amfiindia.com
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 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.3
Fourth Phase - since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated
into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under
management of Rs. 29,835 crores as at the end of January 2003, representing broadly, the assets of US 64
scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India,
functioning under an administrator and under the rules framed by Government of India and does not come
under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is registered with
SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which
had in March 2000 more than Rs. 76,000 crores of assets under management and with the setting up of a
UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking
place among different private sector funds, the mutual fund industry has entered its current phase of
consolidation and growth.4
The graph indicates the growth of assets over the years.
3, 4:www.amfiindia.com
PLAYERS IN THE SECTOR

NJ INDIA INVEST is the leading company dealing in the Mutual Funds. Following are its competitors :-
Karvy:
The Karvy Group was formed in 1983 in Hyderabad, India. Karvy ranks among the top players in
almost all the fields it operates. Karvy Computershare limited is Indias largest registrar and transfer
agents with a client base of nearly 500 blue chips corporate, managing over 2cr accounts. Karvy Stock
Brokers Limited is member of National Stock Exchange of India and Bombay Stock Exchange.1
AnandRathi:
AnandRathi is a leading full service securities firm providing the entire gamut of financial
services. The firm, founded in 1994 by Mr. Anand Rathi, today has a pan India presence as well as an
international presence through offices in Dubai and Bangkok. AnandRathi provides a breadth of financial
and advisory services including wealth management, investment banking, corporate advisory, brokerage
& distribution of equities, commodities, mutual funds and insurance.2
India Infoline:
India Infoline (IIL) is engaged in business of equities broking, wealth advisory services and
portfolio management services. The company was incorporated in October 1995 as Probity Research &
Services and later in April 2000 the name was changed to India Infoline.com. Then in March 2001 the
company again changed its name to India Infoline. It has pan- India presence through its distribution
network of 607 branches, 151 franchisees located in 346 cities. The company also has presence
in Dubai, New York and Singapore.3
India Bulls:
In middle of 1999, Sameer Gehlaut and his close IIT Delhi friend Rajiv Rattan got together and
bought a defunct securities company with a NSE membership and started offering brokerage services. A
Few months later, their friend Saurabh Mittal also joined them. By December 1999, the company
embarked on its journey to build one of the first online platforms in India for offering internet brokerage
services. In January 2000, the 3 founders incorporated India bulls Financial Services and made it as the
flagship company.4
Prudent:
The Prudent Insurance Brokers team is the key driving force of the company. Our team comprises
of over 160 professionals from diverse backgrounds, to understand better our clients businesses and risk5
Bonanza:
Bonanza is a leading Financial Services & Brokerage House. It also distributes mutual
funds of various AMCs.6
1,2,3,4,5,6: www.mutualfundsofindia.com
10
COMPANY
PROFILE
11
GENERAL INFORMATION
Two dynamic young men after completing their education were about start their career when they
show the growing scope of the financial service sector. Both of them decided to jump into the same field
and came out with the dynamic concept of NJ Capital Stock now, which is known as NJ India Invest.
The word NJ stands for the first letter of Neeraj Choksi and Jignesh Desai the founder directors of NJ
India Invest.
NJ India Invest Pvt. Ltd is one of the leading advisory and distributors of financial products and
services in India. Established in the year 1994, NJ has over a decade of rich exposure in financial
investment space, portfolio advisory services and distribution of financial products. NJ prides in being a
professionally managed, quality focused and customer centric
organization. The strength of NJ lies in the strong domain
knowledge in investment consultancy and the delivery of
sustainable value to client with support from cutting-edge
technology platform, developed in-house.
Presently, has over INR 30000+ Corers of mutual fund

assets under advice. It is a reflection of the trust, commitment
and values that NJ Shares with its client. In India, at present NJ
is present at 130 locations in 22 states. Today provides over
24000 of such advisory with a unique and 1500000 customers ,
comprehensive 360 Advisory Platform to grow their business
and offer quality solution to their clients.. Making innovations,
accessions, and value-additions, a constant process providing customers with solution for tomorrow
which keeps them above the curve, today at our experience knowledge and understanding enables us to
provide you with the expected value in an enhance way.
At NJ we believe in ..
Having single window, multiple solutions that are integrated for simplicity and sapience.
Making innovations, accessions, value additions, and a constant process.
Providing customers with solutions for tomorrow which will keep them above the curve, today.
12
Mission and Vision

Mission:
Ensure creation of the desired value for our customer, employees and associated, through constant
improvement, innovation and commitment to service and quality. At NJ they are provide solution which
meet expectation and maintain high professional and ethical standard along the adherence to service
commitment.
Vision:
To be the leader in our field of business through
Total customer satisfaction
Commitment to excellence
Determinant to succeed with strict adherence to compliance
Successful wealth creation of our customer
PRODUCTS & SERVICES

Product:
NJ India Invest offers advisory and distribution services on the following products.
Investment Products:
Mutual funds covering all AMCs & all schemes,
Fixed Deposits of companies,
PMS products (Third party & NJ)
Government/RBI bonds,
Infrastructure Bonds,
Approved securities for charitable trusts, etc.
Direct Equity
Bullion
Insurance
Real Estate:
Residential properties
Commercial properties
13
360 - Advisory Platform of NJ Fundz
The NJ Wealth Platform is a comprehensive, 3600 platform offering end- to- end solutions,
required for a successful financial products distribution practice. It offers distributors, called as Partners,
with a basket of wealth products in addition to comprehensive solutions in all important areas of business,
backed by cutting edge IT services, The platform has managed to successfully transforms the lives of
many distributors across India.
NJ is first in the Indian Mutual Fund Industry to offer a Complete Business Platform to Advisors
With this philosophy, we try to offer all possible products, services and support which an Advisor
would need in his business.
The support functions are generally in the following areas:
Business Planning and Strategy
Training and Development Self and of employees
Products and Service Offerings
Business Branding
Marketing
Sales and Development
Technology
Advisors Resources - Tools, Calculators, etc.
Research
Communications
With this comprehensive supporting platform, the NJ Funds Partners stays ahead of the curve in each
respect compared to other Advisors/competitors in the market.
14
MANAGEMENT TEAM
The management at NJ brings together a team of people with wide experience and knowledge in the
financial services domain. The management has strong visions for NJ as a globally respected company
providing comprehensive services in financial sector. The 'Customer First' philosophy in deeply ingrained
in the management at NJ. The aim of the management is to bring the best to the customers in terms.
Range of products and services offered
Quality Customer Service
Mr Abhisekh
Dubey
Mr. Vinayak
Rajput
Mr. Dhaval Desai
Mr. Col. Dixit
Mr. Janak Patel
Mr. Janesh Bhatt
Mr. Rakesh
Tokarkar
Mr.
Mohammmadali
sayied
Mr. Samanvay
Maniar
Management Team at NJ.

Management Team at NJ: www.njwealth.com
15
Mr. Misbah
Baxamusa
Sales and Product Team
Jignesh
Desai
MR. Sirish Patel
Functional Team
Jt. Managing Director
Neeraj
Choksi
Mr. Husaini
Kanchwala
Mr. Jigesh Desai
Mr. Manish
Gadhvi
Mr. Prashant
Kakkad
Mr. Safaraz
Patel
Mr. Tushar
Bhajantri
Mr. Vinay
Baraiya
OVERVIEW
OF
DEPARTMENT
16
HUMAN RESOURCE DEPARTMENT

Manpower is one of the important aspects to be taken into consideration. If a company has highly
advance technology for the production unit but does not have well skilled labour to operate the
machineries them all the technology is a waste. Even after having highly advanced technology the unit
cannot excel in its production objectives. Human resource management deals with the human aspect of
the organization.
Personal management is various experts are defining management of manpower as follows:
Thus in short, it is concerned with the obtaining and maintaining of satisfactory and satisfied work
costs.
Managing
Directing
Vice
President
Associate
Vice
President
Regional
Manager
Branch
Manager
UM
Branch
Manager
UM
UM
Branch
Manager
UM
UM = Unit Manager
17
UM
UM
FINANCE DEPARTMENT
Money flow:
Money Flow
Receipt
Monthly
Payment
Brokerage
Brokerage
Monthly
Other
Salary, Rent,
etc.
The above diagram shows the flow of the money taking place at the NJ India Invest the money flow
through two channels receipts and the payment.
1. Receipt:As we know that the NJ India Invest works as a distributor of the mutual fund, they have a receipt in the
form of the brokerage. The company has their receipt as brokerage.
2. Payment:In the NJ India Invest the payment part is divided into three parts.
Brokerage
Monthly expenses
Other
18
Acquisition of the fund

As NJ India invest is private company so the initial fund was acquire from own fund from two managing
directors of the company who are Neeraj Chocksi and Jignesh Desai. Now the fund is acquired from their
profit only.
Capital structure
In NJ India Invest, the manager of the company has developed an appropriate capital structure, which is
advantage to the company so NJ India Invest has the capital structure of their own funds. They are not
borrowing any fund from anywhere else.
Turnover of the company

Turnover of the NJ India Invest in last 10 years is 1000 corers, so we can say that on an average annual
turnover of the company are 100 corers. But at the time of depression, the turnover was less than 100
corers and at the time of boom, the turnover may exceed than 100 corers.
Profitability and dividend

In NJ India Invest is providing brokerage to their partners from their profit and the brokerage structure is
as follows:
Equity and Balance fund
- 0.50 to 0.75 paisa
Debt fund
- 0.70 to 1 rupees
Short term fund
- 0.40 to 0.50 paisa
ELSS
- 2.50 to 3%
19
MARKETING DEPARTMENT
What is market?
Market was traditionally place where buyers and seller gathered to buy and sale of goods.
What is marketing?
Marketing is an organizational function and a set of processing for creating communication and
delivering value to the customer and for managing customer relationship in ways that benefit to its stock
holders
Marketing Environment:The marketing team will help us give the relative support needed fro effective sales, creating
brand and for the development of our business. NJ India Invest is the corporate distribution of mutual
fund. But now a day there are many competitor in the market so this work is dangerous for marketing
department. There are many competitors for NJ India Invest in the market as follow:
SR.NO.
Competitors
Product
Insurance Company
Insurance
Securities
Share, Bond
Bank
MF, FD
Share Broking
Share
Real Asset
Machinery
Fixed Asset
Land
Loan Giver
Loan
20
NJ GROUP
DIVISION
NJ India invest has two broad distinct division of business as follows
1) Fund Network:-
NJ Fundz Network, started in 2003, is a dedicated channel for providing independent financial
advisors or IFA's with a complete business platform for the strengthening and development of their
advisory practice. NJ offers advisors under its network with all the products; support and services that
enables them add considerable value to their business, emerge as a 'new age professional financial
advisor' and compete confidently in the industry. NJ Fundz Network is a unique, first time in India
concept that offers such comprehensive business platform to independent financial advisors1
1. www.njwealt.com
21
2) Wealth Advisory:-
The NJ wealth Advisory Network is among Indias largest and most successful network of
advisors in the financial services industry. The NJ Wealth Advisory Platform is a comprehensive, 360
platform offering end-to-end solution, required for a successful wealth advisory practice. Started in 2003,
the network seeks to reach out to the common man and extend the opportunity to create wealth advisory
network today has over 24000* Advisors, called as NJ Partners, spread across India catering to over 15*
lakh investors and having an AUA close to Rs.30, 000* crores. The platform offers partner with a basket
of wealth product in addition to comprehensive solutions in all important areas of business, backed by
cutting edge IT service. 2
3) NJ Gurukul:-
The NJ Gurukul is a venture aimed at providing valuable training & education support to the young,
emerging talent pool in India. Started in year 2007, NJ Gurukul today offers a very wide range of training
programs across India in all major cities. With special focus on the financial advisors community. The NJ
Gurukul has a Board of Trainers with over 35 well qualified, professional trainers empanelled across
India for delivering training programs. Within a short time, NJ Gurukul has trained over 30,000
participants in over 50 locations across India. NJ Gurukul is an authorised Education Provider (EP) with
FPSB India to deliver training for the prestigious Certified Financial Planner - CFPCM Certification. 3
4) NJ Technologies:-
Technology has traditionally been NJ's key strength. Our offering on the technological front is
unmatched, vibrant, and comprehensive in nature. Finlogic Technologies (India) Pvt. Ltd. does all the
development & support work in-house on a continuous basis. It has successfully developed &
implemented a powerful support system for the mutual fund distribution business at NJ with a provision
for integrating the same with other investment products as well as the financial accounting system.4
2,3,4. www.njwealth.com
22
5) PMS:-
NJ leverages its reach experience in wealth and portfolio management to offer investor with the
smart investment offering that cater to the need for wealth creation and preservation. Our PMS strategies
give investor the desired a freedom and peace of mind for their investment and feel assured. Within a
short time, our offerings are already providing to be a winning choice for investors.5
6) NJ Insurance Broker:-
Insurance constitutes a very important aspect of any person's or family's financial life. Though we are
all familiar with the "insurance" term, there exists a huge gap in "what the customer need" and "what the
customer gets". Nj Insurance Brokers, realises this "need gap" and aims to fulfil it by providing you with
360 degree service offering to identify, satisfy and manage your insurance needs.6
7) NJ Reality:-
At, Nj realty, we seek to offer an integrated services model offering end-to-end
services to
various stake holders in realty program management & execution. The idea is to associate with
stakeholders and engage actively in various stages of program management of various size, either
residential or commercial in nature. Recently, our project is going on at Dahej.7
8) Global Wealth Advisory
NJ Global Invest (Ltd.) is a new venture wherein NJ seeks to offer a Global Wealth Advisory
platform to advisors for offshore funds across the globe. The vision at Global Wealth Advisory platform
is to offer a single window for investment opportunities across the globe to customers. The idea is to
bring to customers a wide range of offshore fund schemes (domiciled in Mauritius, Luxembourg, Dublin
and other jurisdictions), through advisors on the Global Wealth Advisory platform. NJ Global Invest
seeks to provide an offshore fund distribution platform & offshore Portfolio Advisory services under a
B2B distribution model. 8
23
LITERATUER REVIEW
Ashraf and Sharma, 2014 Performance Evaluation of Indian Equity Mutual Funds against
Established Benchmarks Index International Journal of Accounting Research.
In this paper, an attempt has been made to analyses the performance of equity mutual funds industry
against risk free rate and benchmarks return over the five years. The samples consists 10 growths
oriented- open ended- equity mutual fund schemes belong to 5 public and 2 private mutual fund
companies. Results are tested through risk-return analysis, Coefficient of Variation, Treynors ratio,
Sharps ratio, Jensens measure, Famas measure and Regression analysis. The data used is monthly
closing NAVs and benchmark market index closing for the study period of April 2007 to March 2012.
The risk return analysisrevealed that out of 10 schemes 3 have underperform the market, 7 are found to
havelower total risk than the market and all the schemes have given returns higher than risk free rates.
The Treynor ratio of all the mutual funds scheme are over perform the benchmark market index and
Sharpe ratio of 3 mutual funds scheme underperform the benchmark market index. The result of
regression analysis suggests that benchmark market return index has statistically significant impact on
mutual fund return at 5% level of significance.
24
Altius Shodh A STUDY OF RISK AND RETURN RELATIONSHIP OF DIFFERENT MODES OF

INVESTMENT IN INDIAN EQUITY MUTUAL FUND SCHEMES WITH REFERENCE TO
LARGE CAP SEGMENT Journal of Management and Commerce
The asset management industry globally has shown a steady growth trajectory. Developed countries
economy is cooling down or at least slow-down, investors are moving out of saturated markets like US,
UK and Europe, characterized by their increasing levels of debt and looking towards emerging markets
such as India, China, Brazil, Turkey to give a new direction to growth.
A mutual fund is the ideal investment vehicle for today's complex and modern financial scenario. Markets
for equity shares, bonds and other fixed income instruments, real estate, derivatives and other assets have
become mature and information driven. Price changes in these assets are driven by global events
occurring in faraway places. A typical individual is unlikely to have the knowledge, skills, inclination and
time to keep track of events, understand their implications and act speedily. An individual also finds it
difficult to keep track of ownership of his assets, investments, brokerages dues and bank transactions etc.
A mutual fund is the answer to all these situations.
25
PERFORMANCE EVALUATION OF SELECT EQUITY FUNDS IN INDIA. IJSSIR, Vol. 2 (5),

MAY (2013)
There are around 58 Asset Management Companies (AMC) offering mutual funds in India. All these fund
houses have several mutual fund schemes in each segment like equity, debt, gilt and liquid funds. Out of
which equity segment is flourished and most of the investors are attracted towards equity mutual fund
schemes. Because of availability of wide range of equity MF schemes in each AMC, it would be difficult
for the investor to choose the best scheme.
It is appropriate to consider risk and return of each fund to yield better returns before taking investment
decision. Hence Present study is an attempt of identifying risk and returns of equity funds and comparing
the same with bench mark returns and peers to help mutual fund investors in choosing better funds as
investment avenue
26
Ms.M.V.Subha1, Ms. S. Jaya Bharathi An Empirical Study on the Performance of Select Mutual Fund
Schemes in India
This paper has mainly aimed at examining the investment performance of Indian Mutual funds in terms of
a) Sharpe Ratio b) Treynor Ratio and c) Jensen differential return measure. The study used daily NAV
for 51 mutual fund schemes for a period of one year from 1st October 2004 to 30th September 2005, and
the empirical results reported here indicated a mixed performance of sample schemes during the study
period. The Sharpe Ratio indicates good performance by majority of the scheme, while in terms of
Treynor ratio only few schemes show good performance. The Jensens measure, alpha is positive for 98%
of the funds which shows that the funds are generating good returns. The returns of the funds are positive
and hence in general we can say that the performance of the Mutual funds during this period is
satisfactory. However we have to note that except one scheme no other scheme has produced excess
return in the market and the funds are not adequately diversified. With the positive outlook at the Capital
Market, we can hope that the Mutual fund industry would perform better in the days to come.
27
Theodore Prince Frank Bacon Analyzing Mutual Fund Performance Against Established Performance
Benchmarks: A Test of Market Efficiency Research in Business and Economics Journal
The efficient market hypothesis maintains that active investment management is pointless. Rather, an
investor is better off deploying a passive investment strategy by utilizing a market index alternative.
However, the existence of a significant mutual fund industry illustrates a belief to the contrary. This
paper analyzes the small cap growth stock sector of the mutual fund industry against risk-free and market
returns over the ten years 1997-2006. Results are tested against a toolkit of performance benchmarks to
see if expected performance closely corresponds to the actual results.
Development of various
performance benchmarks has allowed investors to quantitatively assess various portfolio alternatives and
has established that diversification can reduce systematic risk. Mutual funds are a way for most investors
to achieve these results without the need for expensive research and excessive trading costs. The results
indicate that some excess returns have been generated; however, beyond a handful of the funds, it is
impossible to rely upon a single benchmark as a reliable indicator of even past performance. A portfolio
approach of combining the benchmarks does not seem to work any better. The evidence tends to support
market efficiency since for the most part, the actively managed funds examined in this study produced
returns that were largely expected.
28
Dr. R.S. Rai, Dr. T.V. Raman, Mr. Gaurav Shreekant, Volume : 4 | Issue : 12 | Dec 2014 Comparing
Returns Between Large and Mid & Small Cap Equity Mutual Funds in India Indian Journal of
Applied Research
Mutual funds are increasingly becoming popular vehicles of investments in financial markets worldwide.
In this paper we attempt to test two popular beliefs w.r.t. mutual funds performance. The first belief being
that the mid and small cap funds provide higher returns to investors than the large-cap funds. The
second belief being that active management of funds by fund mangers results into superior returns by
funds than their respective benchmark indices. In the present study an attempt has been made to compare
the performance of returns of largecap and mid & small-cap equity mutual funds in India between
them as well with their benchmark indices over one, three and five year time durations. In all, 40 equity
open ended mutual fund schemes are selected - 22 large-cap and 18 mid & small-cap schemes and their
annualized over last 1, 3, and 5-years are compared. It is observed that the mid & small-cap schemes
performed significantly better than the large-cap schemes over all the three selected periods. It is also
found that during all the three time durations, the average annualized returns of in both of the selected
categories to be significantly superior to their respective benchmark indices.
29
Sahil Jain Analysis of Equity Based Mutual Funds in India. IOSR Journal of Business and
Management (IOSRJBM)
The last decade has seen a tremendous growth in the mutual fund industry. As per the latest data the
assets under management in this industry is more than Rs 6.8 thousand billion. Today the Indian market is
flooded with more than a thousand mutual fund schemes, promising better returns than others. In this
paper an attempt has been made to analyze the performance of equity based mutual funds. A total of 45
schemes offered by 2 private sector companies and 2 public sector companies, have been studied over the
period April 1997 to April 2012 (15 years). The analysis has been made using the risk-return relationship
and Capital Asset Pricing Model (CAPM). The overall analysis finds that HDFC and ICICI have been the
best performers, UTI an average performer and LIC the worst performer which gave below- expected
returns on the risk-return relationship.
30
INTRODUCTION
TO TOPIC
31
CONCEPT
A mutual fund is pool money collected from investor and it invested according to investment objectives.
A mutual fund is created when investor put their money together. It is therefore a pool of investors fund.
The term mutual means that the investors contribute to the pool and also benefit from the pool. There are
no other claimants to the funds. The pool of fund held mutually by investors is the mutual fund.
DEFINITION OF MUTUAL FUND:

A mutual fund is nothing more than collection of stock and bonds. You can think of a mutual fund
company that brings together a group of people and invest their money in stock, bonds, and other
securities. Each investor own share, which represent a portion of the holdings of the fund.
32
STRUCTUER OF MUTUAL FUND INDUSTRY.
SPONSOR:
Sponsor is the person who acts alone or in combination with another body corporate to establish a
mutual fund.
TRUSTEE:
The main responsibility of the Trustee is to safeguard the interest of the unit holders and ensure
that the AMC functions in the interest of investors and in accordance with the SEBI Regulations.
ASSET MANAGEMENT COMPANY:

The AMC is appointed by the Trustee as the Investment Manager of the Mutual Fund. The AMC
is required to be approved by the Securities and Exchange Board of India (SEBI) to act as an asset
management company of the Mutual Fund.
33
REGISTRAR AND TRANSFER AGENT:

The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent to the
Mutual Fund.
CUSTODIAN:
A custodian handles the investment back office of a mutual fund. Its responsibilities include
receipt and delivery of securities, collection of income, distribution of dividends, and segregation of
assets between schemes. The sponsor of a mutual fund cannot act as a custodian to the fund. For example,
Deutsche Bank is a custodian, but it cannot service Deutsche Mutual Fund, its mutual fund arm.
DISTRIBUTOR:
An individual or an entity facilitating buying and selling of units of mutual fund by investors.
A distributor earns upfront/trail commission for bringing in investors into the mutual fund schemes.
34
MUTUAL FUND OPERATION
Types of Mutual fund
35
AS PER CONSTITUTION
A. Open handed fund:

An open-end fund is one that sells and repurchases units at all times. When the fund sells units, the investor
buys them from the fund. When the investor redeems the units, the fund repurchases the units from the investor. An
investor can buy units or redeem units from the fund itself at a price based on the net asset value (NAV) per unit.
B. Close handed fund:

Closed-end fund is fixed, as it makes a one-time sale of a fixed number of units. After the offer
closes, closed-end funds of not allow investors to buy or redeem units directly from the funds. However,
to provide the much-needed liquidity to investors, closed-end funds a list on a stock exchange.
C. Interval Scheme:
These schemes combine the features of open ended and close ended schemes. They may be traded on
the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV based
prices.
AS PER INVESTMENT OBJECTIVE:

Equity Funds:
An equity fund is a mutual fund that invests principally in stocks. It can be actively or passively
(index fund) managed. Equity funds are also known as stock funds. Equity mutual funds are principally
categorized according to company size, the investment style of the holdings in the portfolio and
geography. In many ways, equity funds are ideal investment vehicles for investors that are not as wellversed in financial investing or do not possess a large amount of capital with which to invest. Equity
funds are practical investments for most people.
Debt Funds (or Income Funds):

Debt Mutual Funds mainly invest in a mix of debt or fixed income securities such as Treasury
Bills, Government Securities, Corporate Bonds, Money Market instruments and other debt securities of
different time horizons. Generally, debt securities have a fixed maturity date & pay a fixed rate of
interest.
Hybrid Schemes:
These schemes are commonly known as balanced schemes. These schemes invest in both Equity as
well as Debt. By investing in a mix of this nature, balanced schemes seek to attain the objective of income and
moderate capital appreciation and are ideal for investors with a conservative, long term orientation.
36
Money Market/Liquid Funds:

A money market fund (also called a money market mutual fund) is an open-ended mutual
fund that invests in short-term debt securities such as US Treasury bills and commercial paper. Money
market funds are widely (though not necessarily accurately) regarded as being as safe as bank deposits yet
providing a higher yield.
Tax-exempt vs. Non-Tax-exempt Funds:

ELSS is a type of diversified equity mutual fund which is qualified for tax exemption under
section 80C of the Income Tax Act, and offers the twin-advantage of capital appreciation and tax benefits.
It comes with a lock-in period of three years.
Gilt Funds:
Gilt Funds are mutual funds that invest only in government securities. They are preferred by risk
averse and conservative investors who wish to invest in the shadow of secure government bonds.
Description: Since gilt funds invest only in government bonds, investors are protected from credit risk.
Sector Funds:
Sector funds portfolios consist of investments in only one industry or sector of the market such as
Information Technology, Pharmaceuticals or Fast Moving Consumer Goods. Since sector and company
specify risk than diversified equity funds
Diversified Equity Funds:

An investment fund that contains a wide array of securities to reduce the amount of risk in the
fund. Actively maintaining diversification prevents events that affect one sector from affecting an entire
portfolio, make large losses less likely. A diversified fund contrasts with specialized or focused funds,
such as sector funds, which focus on stocks in specific sectors such as biotechnology, pharmaceuticals
etc.
Index Funds:
An index fund tracks the performance of a specific stock market index. The objective is to match the
performance of the stock market by tracking an index that represents the overall market. The fund invests in shares
that constitute the index and in the same proportions the index.
37
RESEARCH
METHODOLGY
38
INTRODUCTION
A mutual fund is a professionally managed type of collective investment scheme that pools money from
many investors and invests it in stocks, bonds, short-term money market instruments and other securities.
There are many reasons why investors prefer mutual funds. Buying shares directly from the market is one
way of investing. But this requires spending time to find out the performance of the company whose share
is being purchased, understanding the future business prospects of the company, finding out the track
record of the promoters and the dividend, bonus issue history of the company etc. An informed investor
needs to do research before investing. However, many investors find it cumbersome and time consuming
to pore over so much of information, get access to so much of details before investing in the shares.
Investors therefore prefer the mutual fund route. They invest in a mutual fund scheme which in turn takes
the responsibility of investing in stocks and shares after due analysis and research. The investor need not
bother with researching hundreds of stocks. It leaves it to the mutual fund and its professional fund
management team.
As we have seen that there are many Mutual Fund schemes in India. The investor is has very large
number of option which is a benefit but at the same time a demerit because it is hard to choose among
large number of schemes which scheme to choose. And if the customer chooses wrong scheme he would
end up making lose instead of profit. So, this study is focused on solving the investors confusion
regarding which scheme to choose by analysing their risk and return. We have taken 20 Equity Mutual
Fund schemes and their return for last 5 years.
39
PROBLEM STATEMENT:
In a competitive situation with multiple mutual funds operating in Indian market, it is necessary to
know about the performance of different mutual funds as the investor chooses the scheme based on the
performance of the mutual fund. In this study, our focus is upon performance of different Equity Mutual
Funds schemes. Hence our study is conducted to solve the problem of the investor in choosing among
different schemes.
OBJECTIVES OF THE STUDY:

The present study is concerned with the following objectives:
To compare the performance of selected schemes with benchmark index to see whether the
scheme is outperforming or underperforming the benchmark.
To examine the performance of selected schemes by using the portfolio performance evaluation
models namely Sharpe, Treynor and Jensen.
Scope of the Study:

Present study focuses on equity segment and best rated mutual funds (20 schemes of various fund houses)
by last 5 year ratings based on its CAGR returns were chosen for the study. The study focuses on
comparison of risk and return of each equity scheme with its benchmark index to identify outperforming
and underperforming mutual fund schemes.
Hypothesis:
H0: The return of mutual fund schemes is higher than the benchmark index.
H1: The return of mutual fund schemes is lower than the benchmark index.
40
RESEARCH DESIGN
DATA SOURCE:
There are two source of data collection. Primary source and Secondary source, we have
used the Secondary source for collecting data for the research.
DATA COLLECTION INSTRUMENT:
There are different instrument/ tools for data collection like Questionnaire, magazines,
journals, websites, etc. We have collected data from Publisher Records, Reliable Websites.
RESEARCH TYPE:
The research type is Descriptive study.
SAMPLING DESIGN
SAMPLE SIZE:
Sample size for the research is 20 Mutual Fund schemes of different Fund House.
SAMPLING METHOD:
The sampling method used for the research is Simple Random Sampling method.
LIMITATIONS OF STUDY
The study shows results of selected schemes only.
The study is based on data for last five years only.
The study is based on secondary data only.
41
DATA
ANALYSIS
42
BASICS ABOUT RATIOS

Traditionally, it was a tendency to overlook the risk involved in equity diversified mutual funds
that is one of the important elements in the measurement of the performance of mutual fund schemes. In
financial terms risk is defined as variability in expected return from investment. Following tools and
techniques have been used to measure the performance of various equity diversified mutual funds.
Beta:
It describes the relationship between the stocks return and the index returns. It is a measure of the
volatility of a security as compared to the market as whole. Beta signifies the risk or volatility relative to
the Benchmark indices.
By, definition benchmark indices hold Beta of 1. For example if funds Beta is 1.2, it simply
means that fund is 1.2 times more volatile than the benchmark index.
B = COV(x, y) / Var(x)
Alpha:
A measure of performance on a risk-adjusted basis. Alpha, often considered the active return on
an investment, gauges the performance of an investment against a market index used as a benchmark,
since they are often considered to represent the markets movement as a whole. The excess returns of
a fund relative to the return of a benchmark index is the fund's alpha.
Alpha is most often used for mutual funds and other similar investment types. It is often
represented as a single number (like 3 or -5), but this refers to a percentage measuring how
the portfolio or fund performed compared to the benchmark index (i.e. 3% better or 5% worse)
= {(Fund return-Risk free return) (Funds beta) *(Benchmark return- risk free
return)}.
Correlation Co-efficient:
It measures the nature and the extent of relationship between the stock market index returns and a
funds return in a particular period.
r=
nxy (x)( y)
nx2 (x)2 ny2 (y)2
43
Co-efficient of Determination:
The square of correlation of co-efficient is the co-efficient of determination. It gives the
percentage variation in the stocks return explained by the variation in the market return.
= r2
Treynors Ratio:
The Treynor Ratio, named after Jack L. Treynor, one of the fathers of modern portfolio theory. It
is also known as Reward to Volatility ratio. To calculate Treynor ratio, risk free rate is subtracted from
portfolio returns and dividing the result by the Beta of the portfolio returns. Treynor ratio is a riskadjusted measure based on Beta.
T = R RFR/
Where,
R Return on investment.
RFR Risk Free Return
Sharpes Ratio:
Sharpes ratio is also known as Reward to Risk ratio. The Sharpe ratio is the average return
earned in excess of the risk-free rate per unit of volatility or total risk. To calculate Sharpe ratio, risk free
rate is subtracted from portfolio returns and dividing the result by the Standard deviation of the portfolio
returns. The higher the Sharpe ratio better the performance.
S = R RFR/
Mean:
The mean average is a quick mathematical measure of a number of data points as a unit. It will tell
you important information about a group of data in your business. It is almost a summary of all the data in
your dataset.
Mean = Sum of X values / N (Number of values).
Standard Deviation:
The degree that a single value in a group of values varies from the mean (average) of the
distribution. Standard deviation is a statistical measure that uses past performance of an investment or
portfolio to determine the potential range of future performance and assess the probability of that
performance. Standard deviations can be calculated for an individual security or for the entire portfolio
44
Variance:
Variance = s2
Jensen Ratio (JR):

A risk-adjusted performance measure that represents the average return on a portfolio over and
above that predicted by the capital asset pricing model (CAPM), given the portfolio's beta and the average
market return. This is the portfolio's alpha. In fact, the concept is sometimes referred to as "Jensen's
alpha."
Jensen's Alpha is important to investors because they need to look not only at the total return of a
security or portfolio, but also at the amount of risk involved in achieving that return.
The basic idea is that to analyze the performance of an investment manager you must look not
only at the overall return of a portfolio, but also at the risk of that portfolio. For example, if there are
two mutual funds that both have a 12% return, a rational investor will want the fund that is less risky.
Jensen's measure is one of the ways to help determine if a portfolio is earning the proper return for its
level of risk. If the value is positive, then the portfolio is earning excess returns. In other words, a positive
value for Jensen's alpha means a fund manager has "beat the market" with his or her stock picking skills.
The higher the ratio, the more a portfolio has earned above the level predicted.
Jensen Ratio (JR) =
---------
45
TABLE OF SHARPE, TRENYOR, JENSON RATIO AND RSQ.

Schemes
SBI
Bluechip
Fund Growth
BNP
Paribas
Equity
Fund Growth
Birla Sun
Life Top
100 Fund
- Growth
Birla Sun
Life
Frontline
Equity
Fund Reg Growth
UTI
Equity
Fund Growth
Mirae
Asset
Emergin
g
Bluechip
Fund- Gr
SBI
Magnum
Midcap
Fund Growth
BNP
Paribas
RFR
Sd2 of
fund
Beta
RSQ
Sharpe
Treynor
Jensen
9%
58.0122
1.207125
0.95031
0.7056
4.475
6.4995
9%
57.6063
0.445018
0.13006
-0.3733
-6.3596
8.46
9%
67.3078
1.327607
0.99073
0.3268
2.0249
3.3984
54.3416
1.1939
0.99247
0.3474
2.2339
4.3654
9%
58.0224
1.232151
0.98995
0.2503
1.5462
3.4456
9%
136.903
1.389658
0.88366
1.2588
10.5300
3.1220
9%
155.614
1.437225
0.83153
1.400
9.9777
2.3498
9%
142.560
1.307716
0.75146
0.78122
7.1270
0.1192
9%
46
MidCap
Fund-Gr
Franklin
India
Prima
Fund Growth
UTI Mid
Cap
Fund Growth
Birla Sun
Life
India
GenNext
Fund Growth
Kotak
Select
Focus
Fund Reg Growth
Franklin
India
Prima
Plus- Gr
SBI
Magnum
Multi
Cap
Fund- Gr
Mirae
Asset
India
Opportu
nities
Fund Reg Growth
Tata
Balanced
9%
95.7545
1.120006
0.82066
1.1825
10.2946
4.4448
9%
189.385
1.630041
0.87888
0.8691
7.3374
1.0311
9%
44.4008
0.780949
0.59812
0.8333
9.2793
11.0722
9%
65.7798
1.202927
0.95790
0.3456
5.2080
5.125
9%
73.2753
1.241857
0.91648
0.7157
4.9339
4.6182
9%
57.7603
1.091559
0.89826
0.9894
6.8914
7.5750
9%
78.5261
1.340312
0.99617
0.4842
3.2015
2.3556
9%
63.4971
1.190146
0.95714
0.5351
3.5798
6.7142
47
FundReg- Gr
ICICI
Prudenti
al
Balanced
- Growth
SBI
Magnum
Balanced
Fund Growth
HDFC
Balanced
Fund- Gr
Franklin
India
Balanced
Fund- Gr
9%
40.9051
0.971970
0.99096
0.6714
4.3975
9.2261
9%
47.7758
1.021682
0.93746
0.6512
4.4074
8.7874
9%
55.5512
1.104365
0.94202
0.6241
4.2119
8.2647
9%
43.2987
0.910833
0.82211
0.7397
5.3249
9.34610
INTERPRETATION:
The current average risk free rate i.e. is the bank rate is 9%
As per the rule of Beta, if scheme Beta is greater than 1 it means that the company is more volatile
than the benchmark, and vice versa.
Only two schemes i.e. BNP Paribas Equity Fund Gr. has Beta < 1. So, the schemes are less
volatile than the Benchmark.
UTI Midcap Fund Growth has highest Beta greater than 1, which means it is more volatile than
Benchmark.
As per the Sharpe ratio definition, the scheme SBI Magnum Midcap Fund Gr. has highest sharpe
ratio i.e. 1.4% means fund has better performance.
The scheme BNP Paribas Equity Fund Gr. has negative sharpe ratio (-0.3733) hence, funds
performance is poor
Jensen ratio indicate how much the fund has outperformed the expected return in comparison to
risk associated, the highest Jensen ratio is of Birla Sunlife India GenNext Fund Gr. with 11.07%.
Hence, the scheme has outperformed the Benchmark by 11.07% in comparison to risk associated.
BNP Paribas Midcap Fund Gr. has lowest Jensen ratio i.e. 0.1192%. hence scheme has
underperformed the Benchmark.
48
LARGE CAP FUND

SBI Bluechip Fund Growth
YEAR
Fund (y)
Benchmark
(x)
4.4
-2.03
14.39
3.47
22.89
12.39
15.8
7.79
TOTAL
57.48
21.62
Mean
14.37
5.405
The above table shows the data of SBI Bluechip Fund for last 1 year, 2 year, 3 year, 5 year. It
shows the average return of 5 years of Fund as well as Benchmark. The funds average return is 14.37%
and that of Benchmark is 5.405%. Hence, we can say that in longrun the Fund has outperformed the
Benchmark return. The Benchmark used for the fund is Nifty 50. Return given by the fund is 165.86%
more than the Benchmark.
49
RESULT OF TEST
t-Test: Two-Sample Assuming

Unequal Variances
Fund
Benchmark
Mean
14.37
5.405
Variance
58.0122
37.83396667
Observations
Hypothesized Mean Difference
Df
t Stat
1.831441
P(T<=t) one-tail
0.058377
t Critical one-tail
1.94318
P(T<=t) two-tail
0.116755
t Critical two-tail
2.446912
INTERPRETATION:
The table has been prepared with the help of Excel. From the table it can be interpreted
that fund has outperformed the benchmark as, T calculated ( 1.8314) is less than T tabulated (1.94318). So,
H0: Accepted
H1: Rejected
50
BNP Paribas Equity Fund - Growth
Year
Fund
Benchmark
-2.37
-2.03
9.94
3.47
2.46
12.39
14.65
7.79
Total
24.68
21.62
Mean
6.17
5.405
The above table shows the data of BNP Paribas Equity Fund Growth for last 1 year, 2 year, 3 year,
5 year. It shows the average return of 5 years of Fund as well as Benchmark. The funds average return is
6.17% and that of Benchmark is 5.405%. Hence, we can say that in longrun the Fund has outperformed
the Benchmark return. The Benchmark used for the fund is Nifty 50. Return given by the fund is 14.15%
more than the Benchmark.
51
RESULT OF TEST

Unequal Variances
Fund
Benchmark
6.17
5.405
57.60633
37.83396667
Observations
Df
Mean
Variance
t Stat
0.156612
P(T<=t) one-tail
0.440344
t Critical one-tail
1.94318
P(T<=t) two-tail
0.880687
t Critical two-tail
2.446912
INTERPRETATION:
H0: Accepted
H1: Rejected
52
Birla Sunlife Top 100 Fund - gr
Year
Fund
Benchmark
2.26
-2.03
8.93
3.47
21.73
12.39
13.83
7.79
Total
46.75
21.62
Mean
11.687
5.405
The above table shows the data of Birla Sunlife Top - 100 Fund Growth for last 1 year, 2 year, 3
year, 5 year. It shows the average return of 5 years of Fund as well as Benchmark. The funds average
return is 11.68% and that of Benchmark is 5.405%. Hence, we can say that in longrun the Fund has
outperformed the Benchmark return. The Benchmark used for the fund is Nifty 50. Return given by the
fund is 116.23% more than the Benchmark.
53
RESULT OF TEST

Unequal Variances
Fund
Benchmark
11.6875
5.405
67.30789
37.83396667
Observations
Hypothesized Mean
Difference
Df
Mean
Variance
t Stat
1.225391
P(T<=t) one-tail
0.133172
t Critical one-tail
1.94318
P(T<=t) two-tail
0.266343
t Critical two-tail
2.446912
INTERPRETATION:
H0: Accepted
H1: Rejected
54
Birla Sunlife Frontline Equity Fund Growth
Year
Fund
Benchmark
2.67
-2.03
9.98
3.47
20.34
12.39
13.67
7.79
Total
46.66
21.62
Mean
11.665
5.405
55
RESULT OF TEST

Unequal Variances
Fund
Benchmark
11.665
5.405
54.34163
37.83396667
Observations
Df
Mean
Variance
t Stat
1.304056
P(T<=t) one-tail
0.120003
t Critical one-tail
1.94318
P(T<=t) two-tail
0.240006
t Critical two-tail
2.446912
INTERPRETATION:
H0: Accepted
H1: Rejected
56
UTI Equity Fund - Growth.
Year
Fund
Benchmark
1.25
-2.03
9.61
3.47
19.48
12.39
13.28
7.79
Total
43.62
21.62
Meam
10.905
5.405
57
RESULT OF TEST

Unequal Variances
Fund
Benchmark
10.905
5.405
58.02243
37.83396667
Observations
Df
Mean
Variance
t Stat
1.123523
P(T<=t) one-tail
0.152074
t Critical one-tail
1.94318
P(T<=t) two-tail
0.304148
t Critical two-tail
2.446912
INTERPRETATION:
H0: Accepted
H1: Rejected
58
Smallcap and Midcap

Mirae Asset Emerging Bluechip Fund Growth
Year
Fund
Benchmark
9.95
7.67
22.51
11.42
38.54
25.5
23.56
11.00
Total
94.56
55.59
Mean
23.64
13.89
outperformed the Benchmark return. The Benchmark used for the fund is S&P BSE Sensex Midcap.
Return given by the fund is 70.19% more than the Benchmark.
59
RESULT OF TEST

Unequal Variances
Fund
Benchmark
23.64
13.8975
136.9031
62.644425
Observations
Df
Mean
Variance
t Stat
1.379359
P(T<=t) one-tail
0.113143
t Critical one-tail
2.015048
P(T<=t) two-tail
0.226287
t Critical two-tail
2.570582
INTERPRETATION:
H0: Accepted
H1: Rejected
60
SBI Magnum Midcap Fund - Growth
Year
Fund
Benchmark
7.86
7.67
23.64
11.42
38.41
25.5
23.48
11
Total
93.39
55.59
Mean
23.34
13.89
The above table shows the data of SBI Magnum Midcap Fund - Growth for last 1 year, 2 year, 3
61
RESULT OF TEST

Unequal Variances
Fund
Benchmark
23.3475
13.8975
155.6149
62.644425
Observations
Df
Mean
Variance
t Stat
1.279309
P(T<=t) one-tail
0.128469
t Critical one-tail
2.015048
P(T<=t) two-tail
0.256938
t Critical two-tail
2.570582
INTERPRETATION:
H0: Accepted
H1: Rejected
62
BNP Paribas Mid Cap Fund - Growth
Year
Fund
Benchmark
3.02
7.67
16.99
11.42
31.8
25.5
21.5
11
Total
73.31
55.59
Mean
18.32
13.89
The above table shows the data of BNP Paribas Midcap Fund - Growth for last 1 year, 2 year, 3
63
RESULT OF TEST

Unequal Variances
Fund
Benchmark
18.3275
13.8975
142.5605
62.644425
Observations
Df
Mean
Variance
t Stat
0.6185
P(T<=t) one-tail
0.281665
t Critical one-tail
2.015048
P(T<=t) two-tail
0.56333
t Critical two-tail
2.570582
INTERPRETATION:
H0: Accepted
H1: Rejected
64
Franklin India Prima Fund Growth
Year
Fund
Benchmark
8.31
7.67
20.32
11.42
32.25
25.5
21.26
11
Total
82.14
55.59
Mean
20.53
13.89
The above table shows the data of Franklin India Prima Fund - Growth for last 1 year, 2 year, 3
65
RESULT OF TEST

Unequal Variances
Fund
Benchmark
20.535
13.8975
95.75457
62.644425
Observations
Df
Mean
Variance
t Stat
1.054771
P(T<=t) one-tail
0.16607
t Critical one-tail
1.94318
P(T<=t) two-tail
0.33214
t Critical two-tail
2.446912
INTERPRETATION:
H0: Accepted
H1: Rejected
66
UTI Mid Cap Fund - Growth
Year
Fund
Benchmark
4.83
7.67
19.32
11.42
38.43
25.5
21.26
11
Total
83.84
55.59
Mean
20.96
13.89
The above table shows the data of UTI Midcap Fund - Growth for last 1 year, 2 year, 3 year, 5
year. It shows the average return of 5 years of Fund as well as Benchmark. The funds average return is
the Benchmark return. The Benchmark used for the fund is S&P BSE Sensex Midcap. Return given by
the fund is 50.90% more than the Benchmark.
67
RESULT OF TEST

Unequal Variances
Fund
Benchmark
20.96
13.8975
189.3858
62.644425
Observations
Df
Mean
Variance
t Stat
0.889738
P(T<=t) one-tail
0.20718
t Critical one-tail
2.015048
P(T<=t) two-tail
0.414361
t Critical two-tail
2.570582
INTERPRETATION:
H0: Accepted
H1: Rejected
68
DIVERSIFIED FUND
Birla Sun Life India GenNext Fund Growth
Year
Fund
Benchmark
4.61
-0.01
18.30
5.59
18.30
15.79
17.03
8.87
Total
58.24
30.24
Mean
14.56
7.56
The above table shows the data of Birla Sunlife India GenNext Fund - Growth for last 1 year, 2
year, 3 year, 5 year. It shows the average return of 5 years of Fund as well as Benchmark. The funds
average return is 20.53% and that of Benchmark is 13.89%. Hence, we can say that in longrun the Fund
has outperformed the Benchmark return. The Benchmark used for the fund is Nifty500. Return given by
the fund is 92.59% more than the Benchmark.
69
RESULT OF TEST

Unequal Variances
Fund
Benchmark
14.5596
7.56
44.40089
43.54493333
Observations
Hypothesized Mean
Difference
Df
Mean
Variance
t Stat
1.492779
P(T<=t) one-tail
0.093051
t Critical one-tail
1.94318
P(T<=t) two-tail
0.186102
t Critical two-tail
2.446912
INTERPRETATION:
H0: Accepted
H1: Rejected
70
Kotak Select Focus Fund Growth
Year
Fund
Benchmark
5.13
-0.01
15.30
5.59
24.98
15.79
15.64
8.87
Total
61.05
30.24
Mean
15.26
7.56
The above table shows the data of Kotak Select Focus Fund - Growth for last 1 year, 2 year, 3
outperformed the Benchmark return. The Benchmark used for the fund is Nifty500. Return given by the
71
RESULT OF TEST

Unequal Variances
Fund
Benchmark
15.2633
7.56
65.77982
43.54493333
Observations
Df
Mean
Variance
t Stat
1.473491
P(T<=t) one-tail
0.095525
t Critical one-tail
1.94318
P(T<=t) two-tail
0.191051
t Critical two-tail
2.446912
INTERPRETATION:
H0: Accepted
H1: Rejected
72
Franklin India Prima Plus Growth
Year
Fund
Benchmark
3.88
-0.01
16.31
5.59
24.71
15.79
15.59
8.87
Total
60.49
30.24
Mean
15.12
7.56
The above table shows the data of Franklin India Prima Plus - Growth for last 1 year, 2
has outperformed the Benchmark return. The Benchmark used for the fund is Nifty500. Return given by
the fund is 100% more than the Benchmark.
73
RESULT OF TEST

Unequal Variances
Fund
Benchmark
Mean
15.12343
7.56
Variance
73.27535
43.54493333
Observations
Df
t Stat
1.399553
P(T<=t) one-tail
0.105584
t Critical one-tail
1.94318
P(T<=t) two-tail
0.211169
t Critical two-tail
2.446912
INTERPRETATION:
H0: Accepted
H1: Rejected
74
SBI Magnum Multi Cap Fund - Growth
Year
Fund
Benchmark
7.68
-0.01
17.26
5.59
26.13
15.79
15.02
8.87
Total
66.09
30.24
Mean
16.52
7.56
The above table shows the data of SBI Magnum Multicap Fund - Growth for last 1 year, 2 year, 3
outperformed the Benchmark return. The Benchmark used for the fund is Nifty500. Return given by the
75
RESULT OF TEST

Unequal Variances
Fund
Benchmark
Mean
16.52255
7.56
Variance
57.76038
43.54493333
Observations
Df
t Stat
1.780924
P(T<=t) one-tail
0.062608
t Critical one-tail
1.94318
P(T<=t) two-tail
0.125216
t Critical two-tail
2.446912
INTERPRETATION:
H0: Accepted
H1: Rejected
76
Mirae Asset India Opportunities Fund - Growth
Year
Fund
Benchmark
2.72
-0.01
11.46
5.59
24.15
15.79
14.87
8.87
Total
53.20
30.24
Mean
13.29
7.56
The above table shows the data of Mirae Asset India Opportunities Fund - Growth for last
1 year, 2 year, 3 year, 5 year. It shows the average return of 5 years of Fund as well as Benchmark. The
funds average return is 13.29% and that of Benchmark is 7.56%. Hence, we can say that in longrun the
Fund has outperformed the Benchmark return. The Benchmark used for the fund is Nifty500. Return
given by the fund is 75.79% more than the Benchmark.
77
RESULT OF TEST

Unequal Variances
Fund
Benchmark
Mean
13.29998
7.56
Variance
78.52619
43.54493333
Observations
Df
t Stat
1.039043
P(T<=t) one-tail
0.169416
t Critical one-tail
1.94318
P(T<=t) two-tail
0.338832
t Critical two-tail
2.446912
INTERPRETATION:
that fund has outperformed the benchmark as, T calculated (1.0390) is less than T tabulated (1.94318). So,
H0: Accepted
H1: Rejected
78
Balanced Fund
Tata Balanced Fund - Growth
Year
Fund
Benchmark
2.76
-3.43
12.83
2.09
21.90
11.71
15.58
7.34
Total
53.06
17.71
Mean
13.26
4.42
The above table shows the data of TATA Balanced Fund - Growth for last 1 year, 2 year, 3 year, 5
year. It shows the average return of 5 years of Fund as well as Benchmark. The funds average return is
the Benchmark return. The Benchmark used for the fund is CRISIL Balanced Fund- Aggressive Index.
Return given by the fund is 200% more than the Benchmark.
79
RESULT OF TEST

Unequal Variances
Fund
Benchmark
Mean
13.26408
4.4275
Variance
63.49716
42.907225
Observations
Df
t Stat
1.713303
P(T<=t) one-tail
0.068745
t Critical one-tail
1.94318
P(T<=t) two-tail
0.137491
t Critical two-tail
2.446912
INTERPRETATION:
H0: Accepted
H1: Rejected
80
ICICI Prudential Balanced - Growth
Year
Fund
Benchmark
5.67
-3.43
11.34
2.09
20.84
11.71
15.24
7.34
Total
53.09
17.71
Mean
13.27
4.42
The above table shows the data of ICICI Prudential Balanced Fund - Growth for last 1 year, 2
has outperformed the Benchmark return. The Benchmark used for the fund is CRISIL Balanced FundAggressive Index. Return given by the fund is 200.23% more than the Benchmark.
81
RESULT OF TEST

Unequal Variances
Fund
Benchmark
13.2737
4.4275
40.90511
42.907225
Observations
Df
Mean
Variance
t Stat
1.932559
P(T<=t) one-tail
0.050742
t Critical one-tail
1.94318
P(T<=t) two-tail
0.101483
t Critical two-tail
2.446912
INTERPRETATION:
H0: Accepted
H1: Rejected
82
SBI Magnum Balanced Fund - Growth
Year
Fund
Benchmark
4.52
-3.43
13.37
2.09
21.31
11.71
14.80
7.34
Total
54.01
17.71
Mean
13.50
4.42
The above table shows the data of SBI Magnum Balanced Fund - Growth for last 1 year, 2 year, 3
outperformed the Benchmark return. The Benchmark used for the fund is CRISIL Balanced FundAggressive Index. Return given by the fund is 205.43% more than the Benchmark.
83
RESULT OF TEST

Unequal Variances
Fund
Benchmark
Mean
13.50248
4.4275
Variance
47.77584
42.907225
Observations
Df
t Stat
1.905954
P(T<=t) one-tail
0.052649
t Critical one-tail
1.94318
P(T<=t) two-tail
0.105297
t Critical two-tail
2.446912
INTERPRETATION:
The table has been prepared with the help of Excel. From the table it can be interpreted that fund
has outperformed the benchmark as, T calculated (1.9059) is less than T tabulated (1.94318). So,
H0: Accepted
H1: Rejected
84
HDFC Balanced Fund Growth
Year
Fund
Benchmark
5.49
-3.43
11.43
2.09
23.38
11.71
14.33
7.34
Total
54.63
17.71
Mean
13.65
4.42
The above table shows the data of HDFC Balanced Fund - Growth for last 1 year, 2 year, 3
outperformed the Benchmark return. The Benchmark used for the fund is CRISIL Balanced FundAggressive Index. Return given by the fund is 202.82% more than the Benchmark.
85
RESULT OF TEST

Unequal Variances
Fund
Benchmark
Mean
13.65718
4.4275
Variance
55.55126
42.907225
Observations
Df
t Stat
1.860329
P(T<=t) one-tail
0.056086
t Critical one-tail
1.94318
P(T<=t) two-tail
0.112173
t Critical two-tail
2.446912
INTERPRETATION:
has outperformed the benchmark as, T calculated (1.9059) is less than T tabulated (1.94318). So,
H0: Accepted
H1: Rejected
86
Franklin India Balanced Fund - Growth
Year
Fund
Benchmark
4.99
-3.43
15.51
2.09
20.82
11.71
14.11
7.34
Total
55.42
17.71
Mean
13.85
4.42
The above table shows the data of Franklin India Balanced Fund - Growth for last 1 year, 2
has outperformed the Benchmark return. The Benchmark used for the fund is CRISIL Balanced FundAggressive Index. Return given by the fund is 213.35% more than the Benchmark.
87
RESULT OF TEST

Unequal Variances
Fund
Benchmark
Mean
13.85615
4.4275
Variance
43.29877
42.907225
Observations
Df
t Stat
2.031004
P(T<=t) one-tail
0.04427
t Critical one-tail
1.94318
P(T<=t) two-tail
0.088541
t Critical two-tail
2.446912
INTERPRETATION:
has unperformed the benchmark as, T calculated (2.0310) is more than T tabulated (1.94318). So,
H0: Rejected
H1: Accepted
88
FINDINGS
The study was undertaken to analyse the performance of different schemes against it Benchmark.
The major findings of the study are as follows:
Out of 20 schemes under study 19 schemes have outperformed their Benchmark.

One of the Balanced fund scheme Franklin India Balanced Fund Gr. has underperformed
its Benchmark
The lowest Beta is of BNP Paribas Equity Fund Growth which is 0.4450. So, the scheme
is less volatile than any other scheme.
The Variance of ICICI Prudential Balanced Growth is lowest i.e. is 40.9051% hence, has
lowest volatility. So, it has less risk.
UTI Midcap Fund Gr. has highest Variance of 189.38% hence, it is more risky.
Mirae Asset Emerging Bluechip Fund Gr. has highest average return which is 23.64%
BNP Paribas Equity Fund Gr. has lowest average return which is 6.17%
The scheme SBI Magnum Midcap Fund Gr. has highest sharpe ratio i.e. 1.4% means fund
has better performance.
Mirae Asset Emerging Bluechip Fund- Gr has highest treynor ratio with 10.5%
The highest Jensen ratio is of Birla Sunlife India GenNext Fund Gr. with 11.07%
In Largcap fund SBI Bluchip Fund Gr. has highest average return in comparison to its
Benchmark.
In Small and Midcap fund Mirae Asset Emerging Bluechip Fund Gr. has highest average
return in comparison to its Benchmark
In Diversified Equity fund SBI Magnum Multicap Fund Gr. has highest average return in
comparison to its Benchmark.
In Balanced fund, Franklin India Balanced Fund Gr has highest average return in
comparison to its Benchmark.
89
CONCLUSION
This study has been carried out to evaluate the performance of selected 20 equity schemes during
the study period of last 1year, 2 year, 3 year, and 5 year. An attempt has been made to evaluate the funds
performance and managers ability to pick the undervalued stocks. The study revealed that except one all
the sampled schemes have performed better than market. Supporting the established relationship of high
risk- high return, better performing schemes are exposed to higher risk.
In terms of overall performance as measured by portfolio returns Sharpe measure, SBI Magnum
Midcap Fund Gr. is the best scheme, as per trenyor measure Mirae Asset Emerging Bluechip Fund- Gr is
the best scheme and as per jenson measure Birla Sunlife India GenNext Fund Gr. is the best scheme.
90
BIBLOGRAPHY
To complete the project on NJ INDIA INVEST PVT.LTD successfully I have referred following books and
websites
BOOKS:1) Nj Fundz watch

2) Opportunity booklet of NJ
3) Nj Wealth watch
4) Ken Black, Business Statistics, New Delhi, Wiley India Pvt Ltd., 5th edition,2010
5) Report on financial planning
WEBSITES:
www.amfi.com
www.bseindia.com
www.mutualfundindia.com/schemewatch
www.njindiainvest.com
www.njwealth.com
www.investopedia.com
www. mospi.nic.in.
91

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SUMMER INTERNSHIP PROJECT

NAME OF STUDENT: DHWANI MALDE

Mission and Vision

Products and Service

Data Analysis and Interpretation

MUTUAL FUNDS INDUSTRIES IN INDIA

First Phase - 1964-1987

PLAYERS IN THE SECTOR

Presently, has over INR 30000+ Corers of mutual fund

Making innovations, accessions, value additions, and a constant process.

Mission and Vision

To be the leader in our field of business through

Total customer satisfaction

Determinant to succeed with strict adherence to compliance

Successful wealth creation of our customer

PRODUCTS & SERVICES

Mutual funds covering all AMCs & all schemes,

Fixed Deposits of companies,

PMS products (Third party & NJ)

Approved securities for charitable trusts, etc.

360 - Advisory Platform of NJ Fundz

The support functions are generally in the following areas:

Business Planning and Strategy

Training and Development Self and of employees

Products and Service Offerings

Sales and Development

Advisors Resources - Tools, Calculators, etc.

Management Team at NJ.

Sales and Product Team

MR. Sirish Patel

Jt. Managing Director

HUMAN RESOURCE DEPARTMENT

Acquisition of the fund

Turnover of the company

Profitability and dividend

- 0.50 to 0.75 paisa

Short term fund

- 0.40 to 0.50 paisa

At, Nj realty, we seek to offer an integrated services model offering end-to-end

8) Global Wealth Advisory

Altius Shodh A STUDY OF RISK AND RETURN RELATIONSHIP OF DIFFERENT MODES OF

PERFORMANCE EVALUATION OF SELECT EQUITY FUNDS IN INDIA. IJSSIR, Vol. 2 (5),

DEFINITION OF MUTUAL FUND:

STRUCTUER OF MUTUAL FUND INDUSTRY.

ASSET MANAGEMENT COMPANY:

REGISTRAR AND TRANSFER AGENT:

MUTUAL FUND OPERATION

Types of Mutual fund

A. Open handed fund:

B. Close handed fund:

AS PER INVESTMENT OBJECTIVE:

Debt Funds (or Income Funds):

Money Market/Liquid Funds:

Tax-exempt vs. Non-Tax-exempt Funds:

Diversified Equity Funds:

OBJECTIVES OF THE STUDY:

Scope of the Study:

BASICS ABOUT RATIOS

nx2 (x)2 ny2 (y)2

Mean = Sum of X values / N (Number of values).

Jensen Ratio (JR):

TABLE OF SHARPE, TRENYOR, JENSON RATIO AND RSQ.

LARGE CAP FUND

t-Test: Two-Sample Assuming