investment+in+equity+_+mutual+fund+schemes-mallikarjuna-0486

Comparative study of Investment in Equity & Mutual Fund Schemes

A RESEARCH REPORT

ON

“Comparative Study of Investment in Equity & Mutual Fund Schemes”

Submitted in partial fulfillment of the requirements of

the M.B.A Degree Course of Bangalore University

Submitted By

MALLIKARJUNA HIREMATH (REGD.NO:04XQCM 6051)

Under the Guidance and Supervision Of

DR. N.S. MALAVALLI

M.P.BIRLA INSTITUTE OF MANAGEMENT Associate Bharatiya Vidya Bhavan

# 43, Race Course Road, Bangalore-560001 2005-2006

M.P. BIRLA INSTITUTE OF MANAGEMENT

1


Declaration I hereby declare that this report titled “Comparative Study of Investment in

Equity & Mutual Fund Schemes” is a record of independent work carried out by me,

towards the partial fulfillment of requirements for MBA course of Bangalore University at

M.P.Birla Institute of Management. This has not been submitted in part or full

towards any other degree.

PLACE: BANGALORE DATE: MALLIKARJUNA HIREMATH


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Principal’s Certificate This to certify that this report titled “Comparative Study of Investment in

Equity & Mutual Fund Schemes” has been prepared by

MALLIKARJUNA HIREMATH bearing the registration no.04 XQCM 6051

under the guidance and supervision of DR. N.S.MALAVALLI ,MPBIM, Bangalore.

Place: Bangalore Principal Date: (Dr.N.S.Malavalli)


3


GUIDE’S CERTIFICATE This is to certify that the Research Report entitled “Comparative Study of

Investment in Equity & Mutual Fund Schemes”, done by

MALLIKARJUNA HIREMATH bearing Registration No.04 XQCM 6051 is a

bonafide work done carried under my guidance during the academic year 2005-06 in a partial

fulfillment of the requirement for the award of MBA degree by Bangalore University. To the

best of my knowledge this report has not formed the basis for the award of any other degree.

Place: Bangalore Date : DR.N.S. MALAVALLI


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ACKNOWLEDGEMENT

I am thankful to DR. N.S.MALAVALLI, M.P.Birla institute of Management,

Bangalore, who has guided me to do this project by giving valuable suggestions and advice.

Finally, I express my sincere gratitude to all my friends and well wishers who helped me to do

this project.

MALLIKARJUNA HIREMATH


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INDEX

Chapter No

Particulars Page no

Research Extract 01

1 Introduction

a. Background of the Study

b. Statement of the Problem

c. Objectives of the Study

d. Scope of the Study

e. Limitations of the Study

02-17

18

19

20

21

2 Research Methodology

a. Methodology

b. Sampling technique

c. Sample size

d. Sample description

22

23

24

25

3 26-76 Analysis and Interpretation

4 Summary and Conclusion

a. Findings

b. Recommendations

c. Conclusion

77-78

79-80

81

Annexure

Bibliography


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LIST OF TABLES:

Table No Particulars Page No

1.1 Average risk of selected mutual funds 45

1.2 Average return of selected mutual funds 47

1.3 Risk and return of ACC Ltd 54

1.4 Risk and return of Bajaj Auto Ltd 58

1.5 Risk and return of BHEL 62

1.6 Risk and return of ICICI Bank 66

1.7 Risk and return of Satyam Computers Ltd 70

1.8 Average risk of selected companies 71

1.9 Average return of selected companies 73

1.10 Comparison of Equity Capital and mutual funds in

respect of their risk

75


respect of their return

76


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LIST OF GRAPHS:

Table No Particulars Page No

1.1 Average risk of selected mutual funds 45

1.2 Average return of selected mutual funds 47

1.3 Risk and return of ACC Ltd 54

1.4 Risk and return of Bajaj Auto Ltd 58

1.5 Risk and return of BHEL 62

1.6 Risk and return of ICICI Bank 66

1.7 Risk and return of Satyam Computers Ltd 70

1.8 Average risk of selected companies 71

1.9 Average return of selected companies 73


respect of their risk

75


respect of their return

76


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RESEARCH EXTRACT

In the current economic scenario interest rates are falling and fluctuation in

the share market has put investors in confusion. One finds it difficult to take

decision on investment. This is primarily, because of investments are risky in

nature and investors have to consider various factors before investing in

investment avenues.

These factors include risk, return, volatility of shares and liquidity. The

main objective of comparing investment in equity shares with mutual fund

schemes is to analyze the performance of mutual funds with their benchmark

and comparing them with equities by using risk, return, beta and alpha as a

parameter.

Historical data were taken for calculating risk, return, alpha and beta.

Analysis has done on percentage method for comparing equity shares with

mutual fund schemes. Compare to equities mutual funds are less risky with

stable returns and mutual funds gives the investor a diversified portfolio.

Those who have well knowledge in equity market they can go for equity

investments rather that investing in mutual funds because no control on the

expenses made by the fund manager.

The study will guide the new investor who wants to invest in equity and

mutual fund schemes by providing knowledge about how to measure the risk


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and return of particular scrip or mutual fund scheme. The study recommends

new investors to go for mutual funds rather than equities, because of high risk

and market instability.

a. Background of the study:

Introduction to Equity Capital and Mutual Fund

Issue of shares is the most important method of raising capital. Finance raised

by the issue of shares serves as a financial floor to the company’s capital

structure. Shares indicate the ownership or equity interest in the assets of the

company. Shares are of different nominal or face values and of different kinds

to attract different kinds of investors. The maximum amount of capital to be

raised by the issue of shares is mentioned in the memorandum of association.

During 1990-91 and 1991-92, equity accounts for 35 to 39 percent of

the total capital raised respectively. This proportion was reversed in 1992-93,

the first year of free pricing, when the share of equity increased to 62 percent.

He share of equity finance increased to a high of 73.18 percent in 1994-95.

However, in 1995-96 there is a rise in the importance of debt largely due to

the high interest rates in the economy and negative returns from the

secondary market.

The mutual fund industry in India started in 1964 with the formation of

Unit Trust of India, at the initiative of the Government of India. The 1993 SEBI

Regulations were substituted by a more comprehensive and revised Mutual

Fund Regulations in 1996.


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The end of millennium marks 36 years of existence of mutual funds in

this country. The ride through these 36 years is not been smooth. Investor

opinion is still divided. While some are for mutual funds others are against it.

UTI commenced its operations from July 1964. The impetus for establishing a

formal institution came from the desire to increase the propensity of the

middle and lower groups to save and to invest. UTI came in to existence

during a period marked by great political and economic turmoil that depressed

the financial market; entrepreneurs were rather hesitant to enter the capital

markets.

Concept of Equity Capital and Mutual Fund

The term Equity literally means the stock or ownership of a company. They

are also known as ordinary shares. The rate of dividend on equity shares

varies according to the amount of profit available and the intention of board of

directors. In the event of winding up of the company, equity shares can be

refunded only after all other claims, including those of preference shares for

the refund of their capital, have been met.

Equity capital or financing is money raised by a business in exchange

for a share of ownership in the company. Ownership is represented by owning

shares of stock outright or having the right to convert other financial

instruments into stock of that private company. Two key sources of equity

capital for new and emerging businesses are angel investors and venture

capital firms.

Equity capital is represented by funds that are raised by a business, in

exchange for a share of ownership in the company. Equity financing allows a

business to obtain funds without incurring debt, or without having to repay a

specific amount of money at a particular time.

The Equity Capital Markets Group (ECM) oversees the Firm's activities

in the primary equity and equity-linked markets, as well as monetization and M.P. BIRLA INSTITUTE OF MANAGEMENT

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equity derivatives. It provides support in the origination of primary market

transactions and manages their structuring, syndication, marketing and

distribution.

The world over, it’s been shown that over long tenures, equities–with

their risk premia–have provided approximately 7 percentage points higher

returns than risk-free options. People have to accumulate significant amounts

of wealth during their working years. Right now, a 17-year bond gives you

only 5.5 per cent. So, it is imperative that these people have some exposure

to equity.

A mutual fund is a trust that pools the money of many investors -- its

shareholders -- to invest in a variety of different securities. Investments may

be in stocks, bonds, money market securities or some combination of these.

Those securities are professionally managed on behalf of the shareholders,

and each investor holds a pro rata share of the portfolio -- entitled to any

profits when the securities are sold, but subject to any losses in value as well.

A mutual fund is a group of investors operating through a fund

manager to purchase a diverse portfolio of stocks or bonds. There are myriad

kinds of mutual funds, each with its own goals and methodologies. Whether or

not a mutual fund is a good investment is a matter of much public debate, with

many claiming they are excellent for the average person, and others saying

they are simply a poor way to invest.

For the individual investor, mutual funds provide the benefit of having

someone else manage your investments, take care of recordkeeping for your

account, and diversify your rupees over many different securities that may not

be available or affordable to you otherwise. Today, minimum investment

requirements on many funds are low enough that even the smallest investor

can get started in mutual funds.


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A mutual fund, by its very nature, is diversified -- its assets are invested

in many different securities. Beyond that, there are many different types of

mutual funds with different objectives and levels of growth potential, furthering

your chances to diversify.

Many critics of mutual funds point out that scarcely over 20% of mutual

funds outperform the Standard and Poor's 500 Index. This means that nearly

80% of the time, an investor would have been more profitable by simply

buying equal shares in all 500 of the companies currently on the S&P 500.

Schemes of Mutual funds

Schemes according to Maturity Period:

A mutual fund scheme can be classified into open-ended scheme or close-

ended scheme depending on its maturity period.

Open-ended Scheme:

An open-ended fund or scheme is one that is available for subscription and

repurchase on a continuous basis. These schemes do not have a fixed

maturity period. Investors can conveniently buy and sell units at Net Asset

Value (NAV) related prices which are declared on a daily basis. The key

feature of open-end schemes is liquidity.

Close-ended Scheme:

A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years.

The fund is open for subscription only during a specified period at the time of

launch of the scheme. Investors can invest in the scheme at the time of the

initial public issue and thereafter they can buy or sell the units of the scheme

on the stock exchanges where the units are listed. In order to provide an exit

route to the investors, some close-ended funds give an option of selling back

the units to the mutual fund through periodic repurchase at NAV related M.P. BIRLA INSTITUTE OF MANAGEMENT

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prices. SEBI Regulations stipulate that at least one of the two exit routes is

provided to the investor i.e. either repurchase facility or through listing on

stock exchanges. These mutual funds schemes disclose NAV generally on

weekly basis.

Schemes according to Investment Objective:

A scheme can also be classified as growth scheme, income scheme, or

balanced scheme considering its investment objective. Such schemes may be

open-ended or close-ended schemes as described earlier. Such schemes

may be classified mainly as follows:

Growth / Equity Oriented Scheme:

The aim of growth funds is to provide capital appreciation over the medium to

long- term. Such schemes normally invest a major part of their corpus in

equities. Such funds have comparatively high risks. These schemes provide

different options to the investors like dividend option, capital appreciation, etc.

and the investors may choose an option depending on their preferences.

Income / Debt Oriented Scheme:

The aim of income funds is to provide regular and steady income to investors.

Such schemes generally invest in fixed income securities such as bonds,

corporate debentures, Government securities and money market instruments.

Such funds are less risky compared to equity schemes. These funds are not

affected because of fluctuations in equity markets.

Balanced Scheme:


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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. These are appropriate for

investors looking for moderate growth. They generally invest 40-60% in equity

and debt instruments. These funds are also affected because of fluctuations

in share prices in the stock markets. However, NAVs of such funds are likely

to be less volatile compared to pure equity funds.

Money Market or Liquid Fund:

These funds are also income funds and their aim is to provide easy liquidity,

preservation of capital and moderate income. These schemes invest

exclusively in safer short-term instruments such as treasury bills, certificates

of deposit, commercial paper and inter-bank call money, government

securities, etc. Returns on these schemes fluctuate much less compared to

other funds. These funds are appropriate for corporate and individual

investors as a means to park their surplus funds for short periods.

Gilt Fund:

These funds invest exclusively in government securities. Government

securities have no default risk. NAVs of these schemes also fluctuate due to

change in interest rates and other economic factors as is the case with

income or debt oriented schemes.

Index Funds:

Index Funds replicate the portfolio of a particular index such as the BSE

Sensitive index, S&P NSE 50 index (Nifty), etc, these schemes invest in the

securities in the same weightage comprising of an index. NAV’s of such

schemes would rise or fall in accordance with the rise or fall in the index,

though not exactly by the same percentage due to some factors known as


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"tracking error" in technical terms. Necessary disclosures in this regard are

made in the offer document of the mutual fund scheme.

Sector Specific Schemes:

These are the funds/schemes which invest in the securities of only those

sectors or industries as specified in the offer documents. e.g.

Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG),

Petroleum stocks, etc. The returns in these funds are dependent on the

performance of the respective sectors/industries.

Tax Saving Schemes:

These schemes offer tax rebates to the investors under specific provisions of

the Income Tax Act, 1961 as the Government offers tax incentives for

investment in specified avenues. e.g. Equity Linked Savings Schemes

(ELSS). Pension schemes launched by the mutual funds also offer tax

benefits. These schemes are growth oriented and invest pre-dominantly in

equities. Their growth opportunities and risks associated are like any equity-

oriented scheme.


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Advantages of Equity Capital and Mutual Fund:

Advantages of Equity Capital:

1. High dividend and high value:-

In times of prosperity, the equity shareholders get a very high rate of dividend,

sufficiently higher than that on preference shares. At the same time, their

share value will also go up in the market.

2. Voting rights:-

It is only the equity shareholders who enjoy voting rights on all the policy

matters of the company.

3. Pre-emptive right to new shares:-

Equity shareholders have the pre-emptive right to purchase new shares.

Under the provisions of the companies act, the existing shareholders of the

company have a right to allotment of newly issued shared.

4. Many privileges and rights:-

Equity shareholders enjoy many privileges and rights. For example, they can

vote at meetings, elect directors, control the directors to run the company


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efficiently and profitably, look into the books and records of the company and

transfer or sell their shareholdings.

Advantages of Mutual Fund:

1. Professional Investment Management:-

By pooling the funds of thousands of investors, mutual funds provide full-time,

high-level professional management that few individual investors can afford to

obtain independently. Such management is vital to achieving results in today's

complex markets. Your fund managers' interests are tied to yours, because

their compensation is based not on sales commissions, but on how well the

fund performs.

2. Diversification:-

Mutual funds invest in a broad range of securities. This limits investment risk

by reducing the effect of a possible decline in the value of any one security.

Mutual fund shareowners can benefit from diversification techniques usually

available only to investors wealthy enough to buy significant positions in a

wide variety of securities.

3. Low Cost:-


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If you tried to create your own diversified portfolio of 50 stocks, you'd need at

least Rs.1,00,000 and you'd pay thousands of rupees in commissions to

assemble your portfolio. A mutual fund lets you participate in a diversified

portfolio for as little as Rs.10,000, and sometimes less. And if you buy a no-

load fund, you pay or no sale charges to own them.

4. Convenience and Flexibility:-

You own just one security rather than many, yet enjoy the benefits of a

diversified portfolio and a wide range of services. Fund managers decide what

securities to trade, clip the bond coupons, collect the interest payments and

see that your dividends on portfolio securities are received and your rights

exercised.

5. Quick, Personalized Service:-

Most funds now offer extensive websites with a host of shareholder services

for immediate access to information about your fund account. Or a phone call

puts you in touch with a trained investment specialist at a mutual fund

company who can provide information you can use to make your own

investment choices, assist you with buying and selling your fund shares.

6. Ease of Investing:-

You may open or add to your account and conduct transactions or business

with the fund by mail, telephone or bank wire. You can even arrange for

automatic monthly investments by authorizing electronic fund transfers from

your checking account in any amount and on a date you choose.

7. Total Liquidity, Easy Withdrawal:-

You can easily redeem your shares anytime you need cash by letter,

telephone, bank wire or check, depending on the fund. Your proceeds are

usually available within a day or two.

8. Life Cycle Planning:-


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With no-load mutual funds, you can link your investment plans to future

individual and family needs -- and make changes as your life cycles change.

You can invest in growth funds for future college tuition needs, then move to

income funds for retirement, and adjust your investments as your needs

change throughout your life.

9. Market Cycle Planning:-

For investors who understand how to actively manage their portfolio, mutual

fund investments can be moved as market conditions change. You can place

your funds in equities when the market is on the upswing and move into

money market funds on the downswing or take any number of steps to ensure

that your investments are meeting your needs in changing market climates.

10. Investor Information:-

Shareholders receive regular reports from the funds, including details of

transactions on a year-to-date basis. The current net asset value of your

shares (the price at which you may purchase or redeem them) appears in the

mutual fund price listings of daily newspapers. You can also obtain pricing

and performance results for the all mutual funds at this site, or it can be

obtained by phone from the fund.

11. Periodic Withdrawals:-

If you want steady monthly income, many funds allow you to arrange for

monthly fixed checks to be sent to you, first by distributing some or all of the

income and then, if necessary, by dipping into your principal.

12. Dividend Options:-

You can receive all dividend payments in cash. Or you can have them

reinvested in the fund free of charge, in which case the dividends are

automatically compounded. This can make a significant contribution to your

long-term investment results. M.P. BIRLA INSTITUTE OF MANAGEMENT

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13. Automatic Direct Deposit:-

You can usually arrange to have regular, third-party payments -- such as

Social Security or pension checks -- deposited directly into your fund account.

This puts your money to work immediately, without waiting to clear your

checking account, and it saves you from worrying about checks being lost in

the mail.

14. Recordkeeping Service:-

With your own portfolio of stocks and bonds, you would have to do your own

recordkeeping of purchases, sales, dividends, interest, short-term and long-

term gains and losses. Mutual funds provide confirmation of your transactions

and necessary tax forms to help you keep track of your investments and tax

reporting.

15. Safekeeping:-

When you own shares in a mutual fund, you own securities in many

companies without having to worry about keeping stock certificates in safe

deposit boxes or sending them by registered mail. You don't even have to

worry about handling the mutual fund stock certificates; the fund maintains

your account on its books and sends you periodic statements keeping track of

all your transactions.

16. Retirement and College Plans:-

Mutual funds are well suited to Individual Retirement Accounts and most

funds offer IRA-approved prototype and master plans for individual retirement

accounts (IRAs) and Keogh, 403(b), SEP-IRA and 401(k) retirement plans.

17. Online Services:-

The internet provides a fast, convenient way for investors to access financial

information. A host of services are available to the online investor including

direct access to no-load companies. Visit Company Links to access these

Companies.

18. Sweep Accounts:- M.P. BIRLA INSTITUTE OF MANAGEMENT

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http://www.mfea.com/FundCompanies/default.asp


With many funds, if you choose not to reinvest your stock or bond fund

dividends, you can arrange to have them swept into your money market fund

automatically. You get all the advantages of both accounts with no extra

effort.

19. Asset Management Accounts:-

These master accounts, available from many of the larger fund groups,

enable you to manage all your financial service needs under a single umbrella

from unlimited check writing and automatic bill paying to discount brokerage

and credit card accounts.

Disadvantages of Equity Capital and Mutual Fund

Disadvantages of Equity Capital: 1. No refund of capital:-

Since equity shares cannot be refunded, excessive issue of such shares may

leads to overcapitalization, particularly when the earning capacity of the

company declining.

2. Benefits only in prosperity:-

During the periods of prosperity, the company has to distribute heavy

dividends on these shares.

3. Manipulation of control:-

Since the equity shares have proportionate voting power, the company’s

management may be vitiated by manipulation of votes, clique-formation,

abuse of proxy rights etc.

4. High risk:-


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Equity share holders cannot claim dividend as a matter of right, because the

decision to fit the rate of dividend on equity shares is vested in the Board of

Directors. Therefore investors as a class may find equity shares unsafe,

unattractive and unremunerative.

5. Unhealthy Speculation:-

During the period of boom, the market value of shares will go up, which leads

to unhealthy speculation in the stock market.

Disadvantages of Mutual Fund:

There are certainly some benefits to mutual fund investing, but you should

also be aware of the drawbacks associated with mutual funds.

1. No Insurance:-

Mutual funds, although regulated by the government, are not insured against

losses. The Federal Deposit Insurance Corporation (FDIC) only insures

against certain losses at banks, credit unions, and savings and loans, not

mutual funds. That means that despite the risk-reducing diversification

benefits provided by mutual funds, losses can occur, and it is possible

(although extremely unlikely) that you could even lose your entire investment.

2. Dilution:-

Although diversification reduces the amount of risk involved in investing in

mutual funds, it can also be a disadvantage due to dilution. For example, if a

single security held by a mutual fund doubles in value, the mutual fund itself

would not double in value because that security is only one small part of the


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fund's holdings. By holding a large number of different investments, mutual

funds tend to do neither exceptionally well nor exceptionally poorly.

3. Fees and Expenses:-

Most mutual funds charge management and operating fees that pay for the

fund's management expenses (usually around 1.0% to 1.5% per year). In

addition, some mutual funds charge high sales commissions, 12b-1 fees, and

redemption fees. And some funds buy and trade shares so often that the

transaction costs add up significantly. Some of these expenses are charged

on an ongoing basis, unlike stock investments, for which a commission is paid

only when you buy and sell (see Investor Guide University: Fees and

Expenses).

4. Poor Performance:-

Returns on a mutual fund are by no means guaranteed. In fact, on average,

around 75% of all mutual funds fail to beat the major market indexes, like the

S&P 500, and a growing number of critics now question whether or not

professional money managers have better stock-picking capabilities than the

average investor.

5. Loss of Control:-

The managers of mutual funds make all of the decisions about which

securities to buy and sell and when to do so. This can make it difficult for you

when trying to manage your portfolio. For example, the tax consequences of a

decision by the manager to buy or sell an asset at a certain time might not be

optimal for you. You also should remember that you are trusting someone

else with your money when you invest in a mutual fund.

6. Trading Limitations:-


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Although mutual funds are highly liquid in general, most mutual funds (called

open-ended funds) cannot be bought or sold in the middle of the trading day.

You can only buy and sell them at the end of the day, after they've calculated

the current value of their holdings.

7. Size:-

Some mutual funds are too big to find enough good investments. This is

especially true of funds that focus on small companies, given that there are

strict rules about how much of a single company a fund may own. If a mutual

fund has $5 billion to invest and is only able to invest an average of $50

million in each, then it needs to find at least 100 such companies to invest in;

as a result, the fund might be forced to lower its standards when selecting

companies to invest in.

8. Inefficiency of Cash Reserves:-

Mutual funds usually maintain large cash reserves as protection against a

large number of simultaneous withdrawals. Although this provides investors

with liquidity, it means that some of the fund's money is invested in cash

instead of assets, which tends to lower the investor's potential return.

9. Different Types:-

The advantages and disadvantages listed above apply to mutual funds in

general. However, there are over 10,000 mutual funds in operation, and these

funds vary greatly according to investment objective, size, strategy, and style.

Mutual funds are available for virtually every investment strategy (e.g. value,


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growth), every sector (e.g. biotech, internet), and every country or region of

the world. So even the process of selecting a fund can be tedious.

.

b. Statement of the Problem:

In the current economic scenario interest rates are falling and fluctuation in

the share market has put investors in confusion. One finds it difficult to take

decision on investment. This is primarily, because investments are risky in

nature and investors have to consider various factors before investing in

investment avenues. Therefore the study aims to compare equity and mutual

fund schemes in form their risk, return & liquidity and also creating awareness

about Equity and Mutual Fund Schemes among the investors.


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C. Objectives of the Study: Saving money is not enough. Each of us also need to invest one’s savings

intelligently in order to have enough money available for funding the higher

education of one’s children, for buying a house, or for one’s own golden

years. But the rapidly growing number of investment avenues often lead to

confusion. Objectives of the study are to provide information to individual

investors regarding their risk, and choosing the best investment options to

match their goals and attitude to risk.

1. To compare Equity and Mutual Fund Schemes in respect of their risk &

return.

2. Analyzing the performance of equity shares and mutual fund schemes

with their benchmark.


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3. Finding the Volatility of shares by using beta.

4. Provide information about pros and cons of investing in Equity and

Mutual Funds

d. Scope of the Study

The project primarily deals with equity, derivatives, mutual funds, portfolio

management.

The study is limited to compare equity capital and mutual fund

schemes in respect of their risk, return and liquidity. The study covers 5

randomly selected stocks out of 30 BSE Sensex companies and 5 randomly

selected mutual fund schemes out of mutual fund industry in India for

comparison. The analysis is strictly based on share price and unit price

information. Other company performance indicators are not considered. It


28


focuses on every month ending closing prices of during the period from 1st

Apr, 2003 to 31st Mar, 2006.

e. Limitations of the Study

The time period for the project was limited to only one and half month and

information provided is limited to the extent of internet and journals.


29


Research Methodology The whole study can be termed as comparative study. It is also a desk

research hence; there is no field work and collection of primary date for this

research.

The study centers on comparing equity and mutual fund schemes in

respect of their risk, return and liquidity. However, with the objective and

scope of the study in mind, it was decided to base the study on return series

of selected stocks and mutual fund schemes.

BSE being the premier exchange of India was chosen for selecting

stocks. It is widely accepted that BSE Sensex is the one of the most reliable


30


index of the stock exchange that reflects present day market condition. Since

it is not possible to compare all the 30 scrips in the index with all Mutual Fund

Schemes due to time and resource constraints, sampling techniques were

considered. Randomly selected samples will facilitate inference of the

population, in our case BSE Sensex and mutual fund industry in India. Hence

by stratified random sampling 5 scrip’s out of 30 sensex and 5 mutual fund

schemes out of whole mutual fund industry were selected.

The initial examination of the composition of index revealed that it is

composed of primarily two types of industries: manufacturing and services in

the ratio of 3 : 2. there for to give correct picture appropriate weight was

assigned to manufacturing industries and hence three scrip’s from

manufacturing and two from service industries were randomly selected and in

case of mutual funds it consists basically large cap, mid cap, small cap,

sectoreal funds and contra funds there fore one fund from each area were

selected.

Monthly share price and unit prices of the selected scrip’s and units

were collected from historical data. In order to avoid bias, at least three years

monthly data was decided to be necessary. The reference period is from 1st

Apr, 2003 to 31st Mar, 2006.

a. Sampling technique:

The quality of research output and the validity of its findings depend upon

appropriateness of the sampling design selected for the study. It was needed

to apply inferential statistical analysis, hence probability sampling was chosen

to be essential.

Criteria for Selecting Sampling Techniques

It is intended to generalize the finding based on the sample

examination to the population, therefore, probability sampling adopted

in order to have a representative sample.


31


Since the population is heterogeneous stratified random sampling was

taken.

Probability sampling produces high degree of precision compared to

non probability sampling.

Sample Design

1. Relative population – 30 BSE sensitivity index companies and mutual

fund industry in India.

2. Sampling frame – list of population, elements from which sample is drawn

(see the annexure).

3. Method of sampling – stratified random sampling. Stratification or division

of population into homogeneous group was done on the basis of industry.

4. Variables – monthly calculated risk and returns were used for comparing

equity and mutual fund schemes.

b. Sample size:

Five companies and five mutual fund schemes were selected.


32


C. Sample Description:

EQUITIES BENCHMARK

ACC LIMITED BSE SENSEX

BAJAJ AUTO LIMITED BSE SENSEX

BHEL BSE SENSEX

ICICI BANK LIMITED BSE SENSEX


33


SATYAM COMPUTER SERVICES LIMITED BSE SENSEX

MUTUAL FUNDS BENCHMARK

RELIANCE MUTUAL FUND BSE SENSEX

FRANKLIN INDIA PRIMA FUND BSE 100

SUNDARAM SMILE FUND BSE 500

PRUDENTIAL ICICI MUTUAL FUND BSE 100

SBI MUTUAL FUND BSE 100

Calculation of Return and Risk of Selected Mutual Fund Schemes and their Bench Marks

Risk and Return of Bench Marks

1. BSE SENSEX:

Calculation of Return and Standard Deviation Date SENSEX Return in % R -R1 (R - R1)2

30-03-03 3048.72 30-04-03 2959.79 -2.92 -6.83 46.6530-05-03 3180.75 7.47 3.56 12.6730-06-03 3607.13 13.41 9.50 90.2531-07-03 3792.61 5.14 1.23 1.5129-08-03 4244.73 11.92 8.01 64.16


34


30-09-03 4453.24 4.91 1.00 1.0031-10-03 4906.87 10.19 6.28 39.4428-11-03 5044.82 2.81 -1.10 1.2131-12-03 5838.96 15.74 11.83 139.9530-01-04 5695.67 -2.45 -6.36 40.4527-02-04 5667.51 -0.49 -4.40 19.3631-03-04 5590.6 -1.36 -5.27 27.7730-04-04 5655.09 1.15 -2.76 7.6231-05-04 4759.62 -15.83 -19.74 389.6730-06-04 4795.46 0.75 -3.16 9.9930-07-04 5170.32 7.82 3.91 15.2931-08-04 5192.08 0.42 -3.49 12.1830-09-04 5583.61 7.54 3.63 13.1829-10-04 5672.27 1.59 -2.32 5.3830-11-04 6234.29 9.91 6.00 36.0031-12-04 6602.69 5.91 2.00 4.0031-01-05 6555.94 -0.71 -4.62 21.3428-02-05 6713.86 2.41 -1.50 2.2531-03-05 6492.82 -3.29 -7.20 51.8429-04-05 6154.44 -5.21 -9.12 83.1731-05-05 6715.11 9.11 5.20 27.0430-06-05 7193.85 7.13 3.22 10.3729-07-05 7635.42 6.14 2.23 4.9731-08-05 7805.43 2.23 -1.68 2.8230-09-05 8634.48 10.62 6.71 45.0231-10-05 7892.32 -8.6 -12.51 156.5030-11-05 8788.81 11.36 7.45 55.5030-12-05 9397.93 6.93 3.02 9.1231-01-06 9919.89 5.55 1.64 2.6928-02-06 10370.2 4.54 0.63 0.4031-03-06 11280 8.77 4.86 23.62Total 140.6 1474.39

Bench Mark Return and Risk (BSE Sensex)

Return = (P1 /P0 *100)-100

Where, P1 = Current month price,

P0 = Previous month price

R1 = ΣR/n, where n=number of months.

R1 = 140.60/36

=3.9


35


SD = √ Σ(R- R1)2 /n

= √1474.39/36

SD = 6.4

2. BSE 100:

Calculation of Return and Standard Deviation

BSE 100 Return in % R -R1 (R - R1)2 Date 30-03-03 1716.28 30-04-03 1671.63 -2.60 -6.32 39.96 30-05-03 1641.44 -1.81 -5.53 30.54 30-06-03 1819.36 10.84 7.12 50.68 31-07-03 1893.45 4.07 0.35 0.12 29-08-03 2229.25 17.73 14.01 196.42 30-09-03 2314.62 3.83 0.11 0.01 31-10-03 2485.43 7.38 3.66 13.39 28-11-03 2594.94 4.41 0.69 0.47 31-12-03 3074.87 18.49 14.77 218.30


36


30-01-04 2946.14 -4.19 -7.91 62.51 27-02-04 2923.99 -0.75 -4.47 20.00 31-03-04 2966.31 1.45 -2.27 5.16 30-04-04 3025.14 1.98 -1.74 3.02 31-05-04 2525.35 -16.52 -20.24 409.71 30-06-04 2561.16 1.42 -2.30 5.30 30-07-04 2755.22 7.58 3.86 14.88 31-08-04 2789.07 1.23 -2.49 6.21 30-09-04 2997.97 7.49 3.77 14.21 29-10-04 3027.96 1.00 -2.72 7.40 30-11-04 3231.25 6.71 2.99 8.96 31-12-04 3456.54 6.97 3.25 10.58 31-01-05 3521.71 1.89 -1.83 3.37 28-02-05 3611.9 2.56 -1.16 1.34 31-03-05 3481.88 -3.60 -7.32 53.58 29-04-05 3313.45 -4.84 -8.56 73.23 31-05-05 3601.73 8.70 4.98 24.80 30-06-05 3800.24 5.51 1.79 3.21 29-07-05 4072.15 7.16 3.44 11.80 31-08-05 4184.83 2.77 -0.95 0.91 30-09-05 4566.63 9.12 5.40 29.20 31-10-05 4159.59 -8.91 -12.63 159.60 30-11-05 4849.87 16.59 12.87 165.76 30-12-05 4953.28 2.13 -1.59 2.52 31-01-06 5254.97 6.09 2.37 5.62 28-02-06 5422.67 3.19 -0.53 0.28 31-03-06 5904.17 8.88 5.16 26.62 Total 133.96 1679.66

Bench Mark Return and Risk (BSE 100)

Return = (P1 /P0 *100)-100



R1 = ΣR/n,

Where n=number of months.

R1 = 133.96/36


37


= 3.72

SD = √ Σ(R- R1)2 /n

= √1679.66/36

SD = 6.83

3. BSE 500:

Calculation of Return and Standard Deviation

BSE 500 Return in % R – R1 (R - R1)2Date 30-03-03 1164.68 30-04-03 1182.01 1.49 -2.60 6.77 30-05-03 1235.78 4.55 0.46 0.21 30-06-03 1373.56 11.15 7.06 49.83 31-07-03 1439.3 4.79 0.70 0.48 29-08-03 1687.35 17.23 13.14 172.77


38


30-09-03 1748.43 3.62 -0.47 0.22 31-10-03 1877.14 7.36 3.27 10.70 28-11-03 1991.74 6.11 2.02 4.06 31-12-03 2366.36 18.81 14.72 216.64 30-01-04 2246.83 -5.05 -9.14 83.56 27-02-04 2228.41 -0.82 -4.91 24.11 31-03-04 2243.6 0.68 -3.41 11.62 30-04-04 2321.25 3.46 -0.63 0.40 31-05-04 1891.75 -18.50 -22.59 510.44 30-06-04 1923.78 1.69 -2.40 5.74 30-07-04 2081.26 8.19 4.10 16.78 31-08-04 2125.65 2.13 -1.96 3.83 30-09-04 2276.87 7.11 3.02 9.14 29-10-04 2319.3 1.86 -2.23 4.96 30-11-04 2518.67 8.60 4.51 20.31 31-12-04 2634.51 4.60 0.51 0.26 31-01-05 2726.49 3.49 -0.60 0.36 28-02-05 2825.65 3.64 -0.45 0.21 31-03-05 2434.66 -13.84 -17.93 321.38 29-04-05 2610.5 7.22 3.13 9.81 31-05-05 2829.2 8.38 4.29 18.38 30-06-05 2928.31 3.50 -0.59 0.34 29-07-05 3124.78 6.71 2.62 6.86 31-08-05 3273 4.74 0.65 0.43 30-09-05 3521.83 7.60 3.51 12.34 31-10-05 3198.69 -9.18 -13.27 175.97 30-11-05 3568.37 11.56 7.47 55.76 30-12-05 3795.96 6.38 2.29 5.23 31-01-06 4004.96 5.51 1.42 2.00 28-02-06 4130.07 3.12 -0.97 0.93 31-03-06 4516.73 9.36 5.27 27.79 Total 147.26 1790.64

Bench Mark Return and Risk(BSE 500)

Return = (P1 /P0 *100)-100



X1 = ΣR/n,


R1 = 147.26/36


39


= 4.09

SD = √ Σ(R- R1)2 /n

= √1790.64/36

SD = 7.05

1. Reliance Vision Fund:-

Reliance Vision Fund is large cap open ended growth fund. Its objective is to

achieve long term growth of capital through a research based investment

approach. Monthly risk and return from 30th Apr 2003 to 31st Mar 2006 is

calculated below.

Return=P1 /P0 *100



R1 = ΣR/n, = 190.14/36, = 5.28 M.P. BIRLA INSTITUTE OF MANAGEMENT

40



SD = √ Σ(R- R1)2 /n, = √1704.71/36

SD = 6.88

Calculation of Beta

B = [Σ(Ra –Ra1)(Rm-Rm1)]/ Σ(Rm-Rm1)2

Where Ra = Return on Company, Ra1= Average return on company

Rm= Return on market, Rm1= Average return on market

= 1424.07/1474.39

B = 0.96

Calculation of Alpha

Alpha = (Ra1 - Rm1)*B

= (5.16-3.9)*0.96

=1.2 Calculation of Risk And Return

Net Asset Value Return in % (R) R - R1 (R- R1)2Date 30-Mar-2003 27.66 ------ ----- ---- 30-Apr-2003 27.86 4.85 -0.43 0.18 30-May-2003 31.45 13.7 8.42 70.89 27-Jun-2003 34.70 10.03 4.75 22.56 31-Jul-2003 37.58 8.29 3.01 9.06 29-Aug-2003 43.31 16.39 11.11 123.43 30-Sep-2003 48.11 9.99 4.71 22.18 31-Oct-2003 53.04 10.24 4.96 24.6 28-Nov-2003 57.89 9.14 3.86 14.89 31-Dec-2003 68.51 18.34 13.06 170.56 30-Jan-2004 63.69 -7.03 -12.31 151.53 27-Feb-2004 65.39 2.66 -2.62 6.86 31-Mar-2004 63.11 -3.48 -8.76 76.73


41


30-Apr-2004 65.34 3.53 -1.8 3.24 31-May-2004 54.44 -16.68 -21.96 482.24 30-Jun-2004 56.26 3.34 -1.94 3.76 30-Jul-2004 60.9 8.24 2.96 8.76 31-Aug-2004 63.94 4.99 -1.04 1.08 30-Sep-2004 68.7 7.44 2.16 4.66 29-Oct-2004 69.11 1.45 -3.83 14.66 30-Nov-2004 74.76 7.25 1.97 3.88 31-Dec-2004 82.08 9.79 4.51 20.34 31-Jan-2005 83.14 1.6 -3.68 13.54 28-Feb-2005 90.19 8.14 2.86 8.17 31-Mar-2005 86.7 -3.86 -9.14 83.53 29-Apr-2005 86.10 -0.69 5.97 35.64 31-May-2005 91.64 6.43 1.15 1.32 30-Jun-2005 91.49 -0.16 -5.44 29.59 31-Jul-2005 99.74 9.01 3.73 13.91 31-Aug-2005 104.82 5.09 -0.19 0.03 30-Sep-2005 114.32 9.06 3.78 14.28 31-Oct-2005 105.35 -7.84 13.12 172.13 30-Nov-2005 118.05 12.05 6.77 45.83 30-Dec-2005 125.97 6.7 1.42 2.01 31-Jan-2006 134.38 6.67 1.39 1.93 28-Feb-2006 139.26 3.63 -1.92 3.68 31-Mar-2006 155.75 11.84 6.56 43.03 Total 190.14 1704.71 Calculation of Beta

Date Return of company

Return of market Ra-Ra1 Rm-Rm1

[(Ra-Ra1) (Rm-Rm1)] (Rm-Rm1)2

30-04-03 0.72 -2.92 -4.44 -6.83 30.33 46.6530-05-03 12.89 7.47 7.73 3.56 27.52 12.6730-06-03 10.33 13.41 5.17 9.5 49.12 90.2531-07-03 8.3 5.14 3.14 1.23 3.86 1.5129-08-03 15.25 11.92 10.09 8.01 80.82 64.1630-09-03 11.08 4.91 5.92 1 5.92 1.0031-10-03 10.25 10.19 5.09 6.28 31.97 39.4428-11-03 9.14 2.81 3.98 -1.1 -4.38 1.2131-12-03 18.35 15.74 13.19 11.83 156.04 139.9530-01-04 -7.04 -2.45 -12.2 -6.36 77.59 40.4527-02-04 2.67 -0.49 -2.49 -4.4 10.96 19.3631-03-04 -3.49 -1.36 -8.65 -5.27 45.59 27.77


42


30-04-04 3.53 1.15 -1.63 -2.76 4.50 7.6231-05-04 -16.68 -15.83 -21.84 -19.74 431.12 389.6730-06-04 3.34 0.75 -1.82 -3.16 5.75 9.9930-07-04 8.25 7.82 3.09 3.91 12.08 15.2931-08-04 4.99 0.42 -0.17 -3.49 0.59 12.1830-09-04 7.44 7.54 2.28 3.63 8.28 13.1829-10-04 0.6 1.59 -4.56 -2.32 10.58 5.3830-11-04 8.18 9.91 3.02 6 18.12 36.0031-12-04 9.79 5.91 4.63 2 9.26 4.0031-01-05 1.29 -0.71 -3.87 -4.62 17.88 21.3428-02-05 8.48 2.41 3.32 -1.5 -4.98 2.2531-03-05 -3.87 -3.29 -9.03 -7.2 65.02 51.8429-04-05 -0.69 -5.21 -5.85 -9.12 53.35 83.1731-05-05 6.43 9.11 1.27 5.2 6.60 27.0430-06-05 -0.16 7.13 -5.32 3.22 -17.13 10.3729-07-05 9.02 6.14 3.86 2.23 8.61 4.9731-08-05 5.09 2.23 -0.07 -1.68 0.12 2.8230-09-05 9.06 10.62 3.9 6.71 26.17 45.0231-10-05 -7.85 -8.6 -13.01 -12.51 162.76 156.5030-11-05 12.06 11.36 6.9 7.45 51.41 55.5030-12-05 6.71 6.93 1.55 3.02 4.68 9.1231-01-06 6.68 5.55 1.52 1.64 2.49 2.6928-02-06 3.63 4.54 -1.53 0.63 -0.96 0.4031-03-06 11.84 8.77 6.68 4.86 32.46 23.62Total 185.61 140.61 1424.07 1474.39

2. Franklin India Prima Fund:-

Franklin India Prima Fund is mid cap open ended growth fund. Its

objective is to achieve long term growth of capital through a research based

investment approach. Monthly risk and return from 30th Apr 2003 to 31st Mar

2006 is calculated below.

Return = (P1 /P0 *100) - 100




43


R1 = ΣR/n,


R1 = 201.9/36

= 5.6

SD = √ Σ(R- R1)2 /n

= √1669.164/36

SD = 6.8

Calculation of Beta




= 375.48/1679.2

B = 0.22


Alpha = (Ra1-Rm1)*B

= (5.64-3.72)*0.22 =0.42

Calculation of Risk and Return

Net Asset Value Return in % (R) R- R1 (R- R1)2 Date 30-Mar-2003 29.33 ----- ----- ----- 30-Apr-2003 30.55 4.15 -1.45 2.1 30-May-2003 37.23 21.86 16.26 264.38 30-Jun-2003 41.14 10.5 4.9 24.01 31-Jul-2003 45.70 11.08 5.48 30.03 29-Aug-2003 49.05 7.33 1.73 2.99 30-Sep-2003 52.04 6.09 0.49 0.24 31-Oct-2003 56.93 9.39 3.79 14.36 28-Nov-2003 64.97 14.12 8.52 72.59 31-Dec-2003 80.59 24.04 18.44 340.03


44


30-Jan-2004 73.49 -8.81 -14.41 207.64 27-Feb-2004 72.14 -1.83 -7.43 55.2 31-Mar-2004 72.43 0.04 -5.56 30.91 30-Apr-2004 71.86 -0.78 -6.38 40.7 31-May-2004 78.32 8.98 3.38 11.42 30-Jun-2004 79.04 0.09 -5.51 30.36 30-Jul-2004 75.49 -4.49 -10.09 101.8 31-Aug-2004 81.64 8.14 2.54 6.45 30-Sep-2004 84.73 3.78 -1.82 3.31 29-Oct-2004 88.06 3.93 -1.67 2.78 30-Nov-2004 97.23 10.41 4.81 23.13 31-Dec-2004 109.93 13.06 7.46 55.65 31-Jan-2005 108.91 -0.92 -6.52 42.51 28-Feb-2005 117.09 7.51 1.91 3.64 31-Mar-2005 113.63 -2.95 -8.55 73.1 29-Apr-2005 118.08 3.91 -1.69 2.85 31-May-2005 124.54 5.47 -0.13 0.01 30-Jun-2005 122.89 -1.32 -6.92 47.88 29-Jul-2005 126.52 2.95 -2.65 7.02 31-Aug-2005 127.9 1.09 -4.51 20.34 30-Sep-2005 130.06 1.68 -3.92 15.36 31-Oct-2005 149.4 14.87 9.27 85.93 30-Nov-2005 164.69 10.23 4.63 21.43 30-Dec-2005 174.03 5.67 0.07 0.004 31-Jan-2006 180.17 3.52 -2.08 4.32 28-Feb-2006 182.34 1.2 -4.4 19.36 31-Mar-2006 196.88 7.91 2.31 5.33 Total 201.9 1669.164 Calculation of Beta



[(RaRa1) (Rm-Rm1)] (Rm-Rm1)2

30-03-03 30-04-03 4.16 -2.6 -1 -6.32 6.32 39.9430-05-03 21.87 -1.81 16.71 -5.53 -92.41 30.5830-06-03 10.5 10.84 5.34 7.12 38.02 50.6931-07-03 11.08 4.07 5.92 0.35 2.07 0.1229-08-03 7.33 17.73 2.17 14.01 30.40 196.2830-09-03 6.1 3.83 0.94 0.11 0.10 0.0131-10-03 9.4 7.38 4.24 3.66 15.52 13.4028-11-03 14.12 4.41 8.96 0.69 6.18 0.4831-12-03 24.04 18.49 18.88 14.77 278.86 218.1530-01-04 -8.81 -4.19 -13.97 -7.91 110.50 62.57


45


27-02-04 -1.84 -0.75 -7 -4.47 31.29 19.9831-03-04 0.4 1.45 -4.76 -2.27 10.81 5.1530-04-04 -0.79 1.98 -5.95 -1.74 10.35 3.0331-05-04 8.99 -16.52 3.83 -20.24 -77.52 409.6630-06-04 0.92 1.42 -4.24 -2.3 9.75 5.2930-07-04 -4.49 7.58 -9.65 3.86 -37.25 14.9031-08-04 8.15 1.23 2.99 -2.49 -7.45 6.2030-09-04 3.78 7.49 -1.38 3.77 -5.20 14.2129-10-04 3.93 1 -1.23 -2.72 3.35 7.4030-11-04 10.41 6.71 5.25 2.99 15.70 8.9431-12-04 13.06 6.97 7.9 3.25 25.68 10.5631-01-05 -0.93 1.89 -6.09 -1.83 11.14 3.3528-02-05 7.51 2.56 2.35 -1.16 -2.73 1.3531-03-05 -2.95 -3.6 -8.11 -7.32 59.37 53.5829-04-05 3.92 -4.84 -1.24 -8.56 10.61 73.2731-05-05 5.47 8.7 0.31 4.98 1.54 24.8030-06-05 -1.32 5.51 -6.48 1.79 -11.60 3.2029-07-05 2.95 7.16 -2.21 3.44 -7.60 11.8331-08-05 1.09 2.77 -4.07 -0.95 3.87 0.9030-09-05 1.69 9.12 -3.47 5.4 -18.74 29.1631-10-05 14.87 -8.91 9.71 -12.63 -122.64 159.5230-11-05 10.23 16.59 5.07 12.87 65.25 165.6430-12-05 5.67 2.13 0.51 -1.59 -0.81 2.5331-01-06 3.53 6.09 -1.63 2.37 -3.86 5.6228-02-06 1.2 3.19 -3.96 -0.53 2.10 0.2831-03-06 7.97 8.88 2.81 5.16 14.50 26.63

203.23 375.48 1679.20Total 133.96

3. Prudential ICICI FMCG Plan

Prudential ICICI FMCG Plan is sector open ended growth fund. Its objective is

to achieve long term growth of capital through a research based investment

approach. Monthly risk and return from 30th Apr 2003 to 31st Mar 2006 is

calculated below.

Return=(P1 /P0 *100) - 100



46




R1 = 178.5/36

= 4.96

SD = √ Σ(R- R1)2 /n

= √1567.54/36

SD = 6.6

Calculation of Beta




= 1102.22/1679.2

B = 0.65


Alpha = (Ra1-Rm1)*B

= (4.96-3.72)*0.65

=0.80 Calculation of Return and Risk

Net Asset Value Return in % R -R1 (R - R1)2 Date 30-03-03 7.43 30-04-03 7.48 0.67 -4.49 20.13 30-05-03 8.28 10.70 5.54 30.64 30-06-03 9.05 9.30 4.14 17.14 31-07-03 9.36 3.43 -1.73 3.01 29-08-03 10.23 9.29 4.13 17.10 30-09-03 10.11 -1.17 -6.33 40.11 31-10-03 10.31 1.98 -3.18 10.12 28-11-03 11.03 6.98 1.82 3.33 31-12-03 12.85 16.50 11.34 128.61 30-01-04 12.04 -6.30 -11.46 131.41 27-02-04 11.88 -1.33 -6.49 42.11


47


31-03-04 11.13 -6.31 -11.47 131.63 30-04-04 12.06 8.36 3.20 10.21 31-05-04 10.92 -9.45 -14.61 213.53 30-06-04 11.11 1.74 -3.42 11.70 30-07-04 11.73 5.58 0.42 0.18 31-08-04 12.72 8.44 3.28 10.76 30-09-04 13.16 3.46 -1.70 2.89 29-10-04 12.87 -2.20 -7.36 54.22 30-11-04 15.18 17.95 12.79 163.55 31-12-04 16.72 10.14 4.98 24.85 31-01-05 17.34 3.71 -1.45 2.11 28-02-05 17.52 1.04 -4.12 16.99 31-03-05 18.06 3.08 -2.08 4.32 29-04-05 18.85 4.37 -0.79 0.62 31-05-05 20.85 10.61 5.45 29.70 30-06-05 21.48 3.02 -2.14 4.57 29-07-05 24.21 12.71 7.55 56.99 31-08-05 27.87 15.12 9.96 99.16 30-09-05 29.72 6.64 1.48 2.18 31-10-05 27.04 -9.02 -14.18 201.00 30-11-05 29.96 10.80 5.64 31.80 30-12-05 32.48 8.41 3.25 10.57 31-01-06 34.11 5.02 -0.14 0.02 28-02-06 35.43 3.87 -1.29 1.66 31-03-06 39.46 11.37 6.21 38.62 Total 178.50 1567.54

Calculation of Beta



[(Ra-a1) (Rm-Rm1)] (Rm-Rm1)2

30-03-03 30-04-03 0.67 -2.6 -4.49 -6.32 28.38 39.9430-05-03 10.7 -1.81 5.54 -5.53 -30.64 30.5830-06-03 9.3 10.84 4.14 7.12 29.48 50.6931-07-03 3.43 4.07 -1.73 0.35 -0.61 0.1229-08-03 9.29 17.73 4.13 14.01 57.86 196.2830-09-03 -1.17 3.83 -6.33 0.11 -0.70 0.0131-10-03 1.98 7.38 -3.18 3.66 -11.64 13.4028-11-03 6.98 4.41 1.82 0.69 1.26 0.4831-12-03 16.5 18.49 11.34 14.77 167.49 218.1530-01-04 -6.3 -4.19 -11.46 -7.91 90.65 62.57


48


27-02-04 -1.33 -0.75 -6.49 -4.47 29.01 19.9831-03-04 -6.31 1.45 -11.47 -2.27 26.04 5.1530-04-04 8.36 1.98 3.2 -1.74 -5.57 3.0331-05-04 -9.45 -16.52 -14.61 -20.24 295.71 409.6630-06-04 1.74 1.42 -3.42 -2.3 7.87 5.2930-07-04 5.58 7.58 0.42 3.86 1.62 14.9031-08-04 8.44 1.23 3.28 -2.49 -8.17 6.2030-09-04 3.46 7.49 -1.7 3.77 -6.41 14.2129-10-04 -2.2 1 -7.36 -2.72 20.02 7.4030-11-04 17.95 6.71 12.79 2.99 38.24 8.9431-12-04 10.14 6.97 4.98 3.25 16.19 10.5631-01-05 3.71 1.89 -1.45 -1.83 2.65 3.3528-02-05 1.04 2.56 -4.12 -1.16 4.78 1.3531-03-05 3.08 -3.6 -2.08 -7.32 15.23 53.5829-04-05 4.37 -4.84 -0.79 -8.56 6.76 73.2731-05-05 10.61 8.7 5.45 4.98 27.14 24.8030-06-05 3.02 5.51 -2.14 1.79 -3.83 3.2029-07-05 12.71 7.16 7.55 3.44 25.97 11.8331-08-05 15.12 2.77 9.96 -0.95 -9.46 0.9030-09-05 6.64 9.12 1.48 5.4 7.99 29.1631-10-05 -9.02 -8.91 -14.18 -12.63 179.09 159.5230-11-05 10.8 16.59 5.64 12.87 72.59 165.6430-12-05 8.41 2.13 3.25 -1.59 -5.17 2.5331-01-06 5.02 6.09 -0.14 2.37 -0.33 5.6228-02-06 3.87 3.19 -1.29 -0.53 0.68 0.2831-03-06 11.37 8.88 6.21 5.16 32.04 26.63Total 178.5 133.96 1102.22 1679.20

4. Sundaram S.M.I.L.E. Fund

Sundaram S.M.I.L.E. Fund is Mid cap open ended growth fund. Its objective is

to achieve capital appreciation by investing in diversified stocks that are

generally termed as 'Small and Midcaps' and by investing in other equities.

Monthly risk and return from 28th Feb 2005 to 31st Mar 2006 is calculated

below.

Return = (P1 /P0 *100)-100




49



R1 = -3.31/14

= -0.23

SD= √ Σ(R- R1)2 /n

= √873.52/14

SD= 7.89

Calculation of Beta




= 415/637.71

B = 0.65


Alpha = (Ra1-Rm1)*B

= (-0.23-4.09)*0.65

= -2.8 Calculation of Return and Risk

Date Net Asset Value Return in % R -R1 (R - R1)2 31-01-05 11.01 28-02-05 10.19 -7.45 -7.23 52.24 31-03-05 10.07 -1.18 -0.96 0.92 29-04-05 10.14 0.70 0.92 0.84 31-05-05 11 8.48 8.70 75.71 30-06-05 11.23 2.09 2.31 5.34 29-07-05 12.21 8.73 8.95 80.04 31-08-05 13.19 8.03 8.25 68.00 30-09-05 13.5 2.35 2.57 6.61 31-10-05 10.21 -24.37 -24.15 583.24 30-11-05 10.13 -0.78 -0.56 0.32 30-12-05 10.12 -0.10 0.12 0.01 31-01-06 10.13 0.10 0.32 0.10


50


28-02-06 10.14 0.10 0.32 0.10 31-03-06 10.14 0.00 0.22 0.05 Total -3.31 873.52

Calculation of Beta



[(Ra-a1) (Rm-Rm1)] (Rm-m1)2

28-02-05 -7.45 3.64 -7.23 -0.45 3.25 0.2031-03-05 -1.18 -13.84 -0.96 -17.93 17.21 321.4829-04-05 0.7 7.22 0.92 3.13 2.88 9.8031-05-05 8.48 8.38 8.7 4.29 37.32 18.4030-06-05 2.09 3.5 2.31 -0.59 -1.36 0.3529-07-05 8.73 6.71 8.95 2.62 23.45 6.8631-08-05 8.03 4.74 8.25 0.65 5.36 0.4230-09-05 2.35 7.6 2.57 3.51 9.02 12.3231-10-05 -24.37 -9.18 -24.15 -13.27 320.47 176.0930-11-05 -0.78 11.56 -0.56 7.47 -4.18 55.8030-12-05 -0.1 6.38 0.12 2.29 0.27 5.2431-01-06 0.1 5.51 0.32 1.42 0.45 2.0228-02-06 0.1 3.12 0.32 -0.97 -0.31 0.9431-03-06 0 9.36 0.22 5.27 1.16 27.77

-3.31 147.26 415.00 637.71Total

5. SBI MSFU CONTRA

SBI MSFU CONTRA is open ended growth fund. Its objective is to achieve

capital appreciation by investing in diversified stocks. Monthly risk and return

from 31st May 2005 to 31st Mar 2006 is calculated below.

Return=P1 /P0 *100


P0 = Previous month price M.P. BIRLA INSTITUTE OF MANAGEMENT

51


R1 = ΣR/n, where n=number of months. X1 = 70.64/11 = 6.42 SD = √ Σ(R- R1)2 /n = √337/11 SD = 5.53

Calculation of Beta




= -67.35/677.99

B = -0.09


Alpha = (Ra1-Rm1)*B

= (6.42-5.57)*-0.09

= 0.76 Calculation of Return and Risk

Date Net Asset Value Return in % R -R1 (R - R1)2 29-04-05 16.52 31-05-05 17.16 3.87 -2.55 6.48 30-06-05 17.66 2.91 -3.51 12.29 29-07-05 19.87 12.51 6.09 37.14 31-08-05 21.91 10.27 3.85 14.80 30-09-05 23.04 5.16 -1.26 1.59 31-10-05 21.53 -6.55 -12.97 168.32 30-11-05 24.1 11.94 5.52 30.44 30-12-05 24.92 3.40 -3.02 9.11 31-01-06 27.08 8.67 2.25 5.05 28-02-06 28.43 4.99 -1.43 2.06 31-03-06 32.26 13.47 7.05 49.73 Total 70.64 337.00


52


Calculation of Beta


Return of market Ra-Ra1 Rm-m1

[(Ra-a1) (Rm-Rm1)] (Rm-m1)2

31-05-05 3.87 -2.55 8.7 -8.12 -70.64 65.9330-06-05 2.91 -3.51 5.51 -9.08 -50.03 82.4529-07-05 12.51 6.09 7.16 0.52 3.72 0.2731-08-05 10.27 3.85 2.77 -1.72 -4.76 2.9630-09-05 5.16 -1.26 9.12 -6.83 -62.29 46.6531-10-05 -6.55 -12.97 -8.91 -18.54 165.19 343.7330-11-05 11.94 5.52 16.59 -0.05 -0.83 0.0030-12-05 3.4 -3.02 2.13 -8.59 -18.30 73.7931-01-06 8.67 2.25 6.09 -3.32 -20.22 11.0228-02-06 4.99 -1.43 3.19 -7 -22.33 49.0031-03-06 13.47 7.05 8.88 1.48 13.14 2.19Total 70.64 61.23 -67.35 677.99

Table1.1

Average risk of selected mutual fund schemes

Mutual Fund Schemes Risk Beta Alpha

Reliance Vision fund 6.9 0.96 1.2

Franklin India prima fund 6.8 0.22 0.42

Pru icici FMCG sector fund 6.6 0.65 0.8

Sundaram SMILE fund 7.89 0.65 -2.8

SBI Contra Fund 5.53 -0.09 0.76

Total 33.72


53


Bench Mark 6.4

Average risk = 33.72/5

=6.74

Chart 1.1

Risk factor of Mutual Funds

-4

-2

0

2

4

6

8

10

Relian

ce V

ision

fund

Frank

lin In

dia pr

ima f

und

Pru ic

ici FM

CG secto

r fun

d

Sunda

ram S

MILE fu

nd

SBI Con

tra F

und

Bench

Mark

Mutual funds & Bench Mark

Ris

k, B

eta

& A

lpha

in %

RiskBetaAlpha

ANALYSIS:

Sundaram SMILE fund has the highest risk factor of 7.89% with 0.65%

beta and -2.8% of alpha.

SBI Contra Fund has the lowest risk factor of 5.53% with -0.09% of

beta and 0.76% of alpha.

Bench Mark has the risk factor of 6.4%


54


On an average Mutual Fund Schemes have the risk factor of 6.74%

INTERPETATION:

Risk is a major factor influence all type of investors. In the above selected

Mutual Fund Schemes average risk factor is 6.74% even though the risk

factor of bench mark is 6.4%, it is very close to average risk. It is showing

Mutual Funds are also risky.

Table1.2

Average return of selected mutual fund schemes

Mutual Fund Schemes Return

Reliance Vision fund 5.16

Franklin India prima fund 5.64

Pru icici FMCG sector fund 4.96

Sundaram SMILE fund -0.23

SBI Contra Fund 6.42


55


Total 21.85

3.9 Bench Mark

Average Return = 21.95/5

=4.39

Chart1.2

Return of selected Mutual Funds

-101234567

Relian

ce Visi

on fu

nd

Franklin

India

prima f

und

Pru ici

ci FM

CG secto

r fund

Sunda

ram SMILE fu

nd

SBI Con

tra Fun

d

Bench

Mark

Mutual Funds & Bench Mark

Ret

urn

In %

Return

ANALYSIS:

SBI Contra Fund has got the highest return of 6.42%

Sundaram SMILE fund got the negative return of -0.23%

Bench Mark return is 3.9%

On an average Mutual Fund Schemes have got 4.39% per month.


56


INTERPETATION: Return is a major factor influencing factor to all type of investors. In the above

selected Mutual Fund Schemes average return is 4.39%, compared to bench

mark return mutual fund returns are good and it will attract more and more

customers.

Calculation of Return and Risk of Selected companies

Calculation of Return and Risk of Bench Mark(BSE SENSEX)

Date SENSEX Return in % R -R1 (R – R1)2 30-03-03 3048.72 30-04-03 2959.79 -2.92 -6.83 46.6530-05-03 3180.75 7.47 3.56 12.6730-06-03 3607.13 13.41 9.50 90.2531-07-03 3792.61 5.14 1.23 1.5129-08-03 4244.73 11.92 8.01 64.16


57


30-09-03 4453.24 4.91 1.00 1.0031-10-03 4906.87 10.19 6.28 39.4428-11-03 5044.82 2.81 -1.10 1.2131-12-03 5838.96 15.74 11.83 139.9530-01-04 5695.67 -2.45 -6.36 40.4527-02-04 5667.51 -0.49 -4.40 19.3631-03-04 5590.6 -1.36 -5.27 27.7730-04-04 5655.09 1.15 -2.76 7.6231-05-04 4759.62 -15.83 -19.74 389.6730-06-04 4795.46 0.75 -3.16 9.9930-07-04 5170.32 7.82 3.91 15.2931-08-04 5192.08 0.42 -3.49 12.1830-09-04 5583.61 7.54 3.63 13.1829-10-04 5672.27 1.59 -2.32 5.3830-11-04 6234.29 9.91 6.00 36.0031-12-04 6602.69 5.91 2.00 4.0031-01-05 6555.94 -0.71 -4.62 21.3428-02-05 6713.86 2.41 -1.50 2.2531-03-05 6492.82 -3.29 -7.20 51.8429-04-05 6154.44 -5.21 -9.12 83.1731-05-05 6715.11 9.11 5.20 27.0430-06-05 7193.85 7.13 3.22 10.3729-07-05 7635.42 6.14 2.23 4.9731-08-05 7805.43 2.23 -1.68 2.8230-09-05 8634.48 10.62 6.71 45.0231-10-05 7892.32 -8.6 -12.51 156.5030-11-05 8788.81 11.36 7.45 55.5030-12-05 9397.93 6.93 3.02 9.1231-01-06 9919.89 5.55 1.64 2.6928-02-06 10370.2 4.54 0.63 0.4031-03-06 11280 8.77 4.86 23.62Total 140.6 1474.39

Return = (P1 /P0 *100)-100



R1 = ΣR/n, where n=number of months. M.P. BIRLA INSTITUTE OF MANAGEMENT

58


R1 = 140.60/36 =3.9 SD = √ Σ(R- R1)2 /n = √1474.39/36 SD = 6.4

1. ACC Limited:-

Calculation of Return and Risk

Date Scrip Value Return in % R -R1 (R – R1)2 30-03-03 137 30-04-03 128.1 -6.50 -10.22 104.3730-05-03 136.9 6.87 3.15 9.9230-06-03 169.1 23.52 19.80 392.0731-07-03 174.8 3.37 -0.35 0.12


59


29-08-03 219 25.29 21.57 465.0930-09-03 186.5 -14.84 -18.56 344.4831-10-03 207.1 11.05 7.33 53.6628-11-03 222.2 7.29 3.57 12.7531-12-03 252.4 13.59 9.87 97.4430-01-04 271 7.37 3.65 13.3227-02-04 261 -3.69 -7.41 54.9131-03-04 255.25 -2.20 -5.92 35.0830-04-04 276 8.13 4.41 19.4431-05-04 247 -10.51 -14.23 202.4130-06-04 232.9 -5.71 -9.43 88.9030-07-04 236 1.33 -2.39 5.7131-08-04 263 11.44 7.72 59.6130-09-04 267.3 1.63 -2.09 4.3529-10-04 263.5 -1.42 -5.14 26.4430-11-04 287.65 9.17 5.45 29.6531-12-04 320.1 11.28 7.56 57.1731-01-05 352 9.97 6.25 39.0128-02-05 362.6 3.01 -0.71 0.5031-03-05 369.8 1.99 -1.73 3.0129-04-05 376 1.68 -2.04 4.1831-05-05 381.15 1.37 -2.35 5.5230-06-05 384.5 0.88 -2.84 8.0729-07-05 450 17.04 13.32 177.2931-08-05 472.45 4.99 1.27 1.6130-09-05 467.6 -1.03 -4.75 22.5331-10-05 438 -6.33 -10.05 101.0130-11-05 516.5 17.92 14.20 201.7130-12-05 537.5 4.07 0.35 0.1231-01-06 566 5.30 1.58 2.5028-02-06 597.9 5.64 1.92 3.6731-03-06 764 27.78 24.06 578.91Total 190.72 3226.54

Calculation of Beta


Return of market Ra-Ra1 Rm-m1


30-04-03 -6.5 -2.92 -10.22 -6.83 69.80 46.65


60


30-05-03 6.87 7.47 3.15 3.56 11.21 12.6730-06-03 23.52 13.41 19.8 9.5 188.10 90.2531-07-03 3.37 5.14 -0.35 1.23 -0.43 1.5129-08-03 25.29 11.92 21.57 8.01 172.78 64.1630-09-03 -14.84 4.91 -18.56 1 -18.56 1.0031-10-03 11.05 10.19 7.33 6.28 46.03 39.4428-11-03 7.29 2.81 3.57 -1.1 -3.93 1.2131-12-03 13.59 15.74 9.87 11.83 116.76 139.9530-01-04 7.37 -2.45 3.65 -6.36 -23.21 40.4527-02-04 -3.69 -0.49 -7.41 -4.4 32.60 19.3631-03-04 -2.2 -1.36 -5.92 -5.27 31.20 27.7730-04-04 8.13 1.15 4.41 -2.76 -12.17 7.6231-05-04 -10.51 -15.83 -14.23 -19.74 280.90 389.6730-06-04 -5.71 0.75 -9.43 -3.16 29.80 9.9930-07-04 1.33 7.82 -2.39 3.91 -9.34 15.2931-08-04 11.44 0.42 7.72 -3.49 -26.94 12.1830-09-04 1.63 7.54 -2.09 3.63 -7.59 13.1829-10-04 -1.42 1.59 -5.14 -2.32 11.92 5.3830-11-04 9.17 9.91 5.45 6 32.70 36.0031-12-04 11.28 5.91 7.56 2 15.12 4.0031-01-05 9.97 -0.71 6.25 -4.62 -28.88 21.3428-02-05 3.01 2.41 -0.71 -1.5 1.07 2.2531-03-05 1.99 -3.29 -1.73 -7.2 12.46 51.8429-04-05 1.68 -5.21 -2.04 -9.12 18.60 83.1731-05-05 1.37 9.11 -2.35 5.2 -12.22 27.0430-06-05 0.88 7.13 -2.84 3.22 -9.14 10.3729-07-05 17.04 6.14 13.32 2.23 29.70 4.9731-08-05 4.99 2.23 1.27 -1.68 -2.13 2.8230-09-05 -1.03 10.62 -4.75 6.71 -31.87 45.0231-10-05 -6.33 -8.6 -10.05 -12.51 125.73 156.5030-11-05 17.92 11.36 14.2 7.45 105.79 55.5030-12-05 4.07 6.93 0.35 3.02 1.06 9.1231-01-06 5.3 5.55 1.58 1.64 2.59 2.6928-02-06 5.64 4.54 1.92 0.63 1.21 0.4031-03-06 27.78 8.77 24.06 4.86 116.93 23.62Total 190.72 140.6 1267.64 1474.39

Return=P1 /P0 *100




61


R1 = ΣR/n, where n=number of months. R1 = 190.72/36 =5.29 SD = √ Σ(R- R1)2 /n = √3136.92/36 SD = 9.33

Calculation of Beta




= 1267.64/1474.39

B = 0.86


Alpha = (Ra1-Rm1)*B

= (5.29-3.9)*0.86

=1.19

Table No 1.3

Risk and return of ACC Ltd.

Factor Percentage

Risk 9.33


62


Return 5.29

Beta 0.86

Alpha 1.19

Chart No 1.3

Risk & Return of ACC Ltd.

0

1

2

3

4

5

6

7

8

9

10

Risk Return Beta Alpha

Factors

Per

cent

age

Percentage

ANALYSIS:

ACC Ltd. has a risk factor of 9.33%

Its rate of return on a monthly average is 5.29%

Alpha and Beta are 1.19 and 0.86 respectively

INTERPETATION:

Beta of the ACC ltd. is 0.86 which is less than one; it shows the less volatility

of scrip with respect to market. Risk of the share is 9.33% and the rate of

return is only 5.29%.

2. BAJAJ AUTO LIMITED:- Calculation of Return and Risk

Date Scrip Value Return in % R - R1 (R - R1)2 481.1 30-03-03 482.2 0.23 -3.49 12.1930-04-03

485 0.58 -3.14 9.8630-05-03 576 18.76 15.04 226.2930-06-03 575 31-07-03 -0.17 -3.89 15.16


63


705 22.61 18.89 356.7829-08-03 746.5 5.89 2.17 4.6930-09-03 863.8 15.71 11.99 143.8431-10-03

918 6.27 2.55 6.5328-11-03 1160 26.36 22.64 512.6431-12-03 1119 -3.53 -7.25 52.6330-01-04 920 -17.78 -21.50 462.4127-02-04 876 -4.78 -8.50 72.2931-03-04 943 7.65 3.93 15.4330-04-04 879 -6.79 -10.51 110.3931-05-04 895 1.82 -1.90 3.6130-06-04

831.9 -7.05 -10.77 116.0030-07-04 909 9.27 5.55 30.7831-08-04 990 8.91 5.19 26.9530-09-04 954 -3.64 -7.36 54.1229-10-04

1020 6.92 3.20 10.2330-11-04 1127 10.49 6.77 45.8431-12-04 1050 -6.83 -10.55 111.3531-01-05 990 -5.71 -9.43 89.0128-02-05

1021 3.13 -0.59 0.3531-03-05 1080 5.78 2.06 4.2429-04-05 1243 15.09 11.37 129.3431-05-05 1310 5.39 1.67 2.7930-06-05 1325 1.15 -2.57 6.6329-07-05 1405 6.04 2.32 5.3731-08-05 1640 16.73 13.01 169.1630-09-05 1665 1.52 -2.20 4.8231-10-05

2075.5 24.65 20.93 438.2630-11-05 2064.9 -0.51 -4.23 17.9030-12-05 2229.9 31-01-06 7.99 4.27 18.24

28-02-06 2600 16.60 12.88 165.8231-03-06 2749 5.73 2.01 4.04Total 194.47 3455.96

Calculation of Beta




30-03-03 30-04-03 0.23 -2.92 -3.49 -6.83 23.84 46.6530-05-03 0.58 7.47 -3.14 3.56 -11.18 12.6730-06-03 18.76 13.41 15.04 9.5 142.88 90.25


64


31-07-03 -0.17 5.14 -3.89 1.23 -4.78 1.5129-08-03 22.61 11.92 18.89 8.01 151.31 64.1630-09-03 5.89 4.91 2.17 1 2.17 1.0031-10-03 15.71 10.19 11.99 6.28 75.30 39.4428-11-03 6.27 2.81 2.55 -1.1 -2.81 1.2131-12-03 26.36 15.74 22.64 11.83 267.83 139.9530-01-04 -3.53 -2.45 -7.25 -6.36 46.11 40.4527-02-04 -17.78 -0.49 -21.5 -4.4 94.60 19.3631-03-04 -4.78 -1.36 -8.5 -5.27 44.80 27.7730-04-04 7.65 1.15 3.93 -2.76 -10.85 7.6231-05-04 -6.79 -15.83 -10.51 -19.74 207.47 389.6730-06-04 1.82 0.75 -1.9 -3.16 6.00 9.9930-07-04 -7.05 7.82 -10.77 3.91 -42.11 15.2931-08-04 9.27 0.42 5.55 -3.49 -19.37 12.1830-09-04 8.91 7.54 5.19 3.63 18.84 13.1829-10-04 -3.64 1.59 -7.36 -2.32 17.08 5.3830-11-04 6.92 9.91 3.2 6 19.20 36.0031-12-04 10.49 5.91 6.77 2 13.54 4.0031-01-05 -6.83 -0.71 -10.55 -4.62 48.74 21.3428-02-05 -5.71 2.41 -9.43 -1.5 14.15 2.2531-03-05 3.13 -3.29 -0.59 -7.2 4.25 51.8429-04-05 5.78 -5.21 2.06 -9.12 -18.79 83.1731-05-05 15.09 9.11 11.37 5.2 59.12 27.0430-06-05 5.39 7.13 1.67 3.22 5.38 10.3729-07-05 1.15 6.14 -2.57 2.23 -5.73 4.9731-08-05 6.04 2.23 2.32 -1.68 -3.90 2.8230-09-05 16.73 10.62 13.01 6.71 87.30 45.0231-10-05 1.52 -8.6 -2.2 -12.51 27.52 156.5030-11-05 24.65 11.36 20.93 7.45 155.93 55.5030-12-05 -0.51 6.93 -4.23 3.02 -12.77 9.1231-01-06 7.99 5.55 4.27 1.64 7.00 2.6928-02-06 16.6 4.54 12.88 0.63 8.11 0.4031-03-06 5.73 8.77 2.01 4.86 9.77 23.62Total 194.47 140.6 1425.94 1474.39

Return = (P1 /P0 *100) -100



65



Calculation of Beta




= 1425.94/1474.39

B = 0.96


Alpha = (Ra1-Rm1)*B

= (5.4-3.9)*0.96

=1.44

Table No 1.4

Risk and return of Bajaj Auto Ltd

Factor Percentage

Risk 9.63

Return 5.4


66


Beta 0.96

Alpha 1.44

Chart 1.4

Risk & Return of Bajaj Ltd

0

2

4

6

8

10

12


Factor

Per

cent

age

Percentage

ANALYSIS:

Bajaj Ltd. has a risk factor of 9.63%



INTERPETATION:

Beta of the Bajaj ltd. is 0.96 which is very close to one; it shows the equal

volatility of scrip with respect to market. Risk of the share is 9.63% and the

rate of return is only 5.4%.

3. BHEL:-


Date Scrip Value Return in

% X -X1 (X - X1)2 219.9 30-03-03

30-04-03 228.2 3.77 0.05 0.00


67


256 12.18 8.46 71.6130-05-03 266 3.91 0.19 0.0330-06-03

275.05 3.40 -0.32 0.1031-07-03 339.7 23.50 19.78 391.4429-08-03

365 7.45 3.73 13.9030-09-03 428 17.26 13.54 183.3431-10-03 430 0.47 -3.25 10.5828-11-03 495 15.12 11.40 129.8831-12-03

579.45 17.06 13.34 177.9730-01-04 617.95 6.64 2.92 8.5527-02-04

566 -8.41 -12.13 147.0631-03-04 642 13.43 9.71 94.2430-04-04 452 -29.60 -33.32 1109.8931-05-04

496.45 9.83 6.11 37.3830-06-04 549.1 10.61 6.89 47.4130-07-04

555.25 1.12 -2.60 6.7631-08-04 580 4.46 0.74 0.5430-09-04 630 8.62 4.90 24.0229-10-04 600 -4.76 -8.48 71.9430-11-04

728.9 21.48 17.76 315.5431-12-04 729 0.01 -3.71 13.7431-01-05 865 18.66 14.94 223.0728-02-05 799 -7.63 -11.35 128.8231-03-05 815 2.00 -1.72 2.9529-04-05 880 7.98 4.26 18.1131-05-05

842.3 -4.28 -8.00 64.0730-06-05 986 17.06 13.34 177.9729-07-05

1099 11.46 7.74 59.9131-08-05 1109 0.91 -2.81 7.9030-09-05 1099 -0.90 -4.62 21.3631-10-05

1434.5 30.53 26.81 718.6630-11-05 1379 -3.87 -7.59 57.5930-12-05 1730 31-01-06 25.45 21.73 472.33

28-02-06 1911 10.46 6.74 45.4631-03-06 2162 13.13 9.41 88.63Total 258.52 4942.75

Calculation of Beta



[(Ra-Ra1) (Rm-Rm1)]

(Rm-Rm1)2

30-03-03 30-04-03 3.77 -2.92 0.05 -6.83 -0.34 46.6530-05-03 12.18 7.47 8.46 3.56 30.12 12.6730-06-03 3.91 13.41 0.19 9.5 1.81 90.2531-07-03 3.4 5.14 -0.32 1.23 -0.39 1.51


68


29-08-03 23.5 11.92 19.78 8.01 158.44 64.1630-09-03 7.45 4.91 3.73 1 3.73 1.0031-10-03 17.26 10.19 13.54 6.28 85.03 39.4428-11-03 0.47 2.81 -3.25 -1.1 3.58 1.2131-12-03 15.12 15.74 11.4 11.83 134.86 139.9530-01-04 17.06 -2.45 13.34 -6.36 -84.84 40.4527-02-04 6.64 -0.49 2.92 -4.4 -12.85 19.3631-03-04 -8.41 -1.36 -12.13 -5.27 63.93 27.7730-04-04 13.43 1.15 9.71 -2.76 -26.80 7.6231-05-04 -29.6 -15.83 -33.32 -19.74 657.74 389.6730-06-04 9.83 0.75 6.11 -3.16 -19.31 9.9930-07-04 10.61 7.82 6.89 3.91 26.94 15.2931-08-04 1.12 0.42 -2.6 -3.49 9.07 12.1830-09-04 4.46 7.54 0.74 3.63 2.69 13.1829-10-04 8.62 1.59 4.9 -2.32 -11.37 5.3830-11-04 -4.76 9.91 -8.48 6 -50.88 36.0031-12-04 21.48 5.91 17.76 2 35.52 4.0031-01-05 0.01 -0.71 -3.71 -4.62 17.14 21.3428-02-05 18.66 2.41 14.94 -1.5 -22.41 2.2531-03-05 -7.63 -3.29 -11.35 -7.2 81.72 51.8429-04-05 2 -5.21 -1.72 -9.12 15.69 83.1731-05-05 7.98 9.11 4.26 5.2 22.15 27.0430-06-05 -4.28 7.13 -8 3.22 -25.76 10.3729-07-05 17.06 6.14 13.34 2.23 29.75 4.9731-08-05 11.46 2.23 7.74 -1.68 -13.00 2.8230-09-05 0.91 10.62 -2.81 6.71 -18.86 45.0231-10-05 -0.9 -8.6 -4.62 -12.51 57.80 156.5030-11-05 30.53 11.36 26.81 7.45 199.73 55.5030-12-05 -3.87 6.93 -7.59 3.02 -22.92 9.1231-01-06 25.45 5.55 21.73 1.64 35.64 2.6928-02-06 10.46 4.54 6.74 0.63 4.25 0.4031-03-06 13.13 8.77 9.41 4.86 45.73 23.62Total 258.52 140.6 1413.30 1474.39

Return = (P1 /P0 *100) -100



R1 = ΣR/n, where n=number of months. R1 = 258.52/36


69


=7.18 SD = √ Σ(X- X1)2 /n = √4511.48/36 SD = 11.19

Calculation of Beta




= 1413.3/1474.39

B = 0.958


Alpha = (Ra1-Rm1)*B

= (7.18-3.9)*0.958

=3.14

Table 1.5

Calculation of Return and Risk of BHEL

Factor Percentage

Risk 11.19


70


Return 7.18

Beta 0.958

Alpha -3.14

Chart 1.5

Risk & Return of BHEL

-4

-2

0

2

4

6

8

10

12


Factor

Per

cent

age

Percentage

ANALYSIS:

BHEL has a risk factor of 11.19%


Alpha and Beta are -3.14 and 0.958 respectively

INTERPETATION:

Beta of the BHEL. is 0.958 which is very close to one; it shows the equal



4. ICICI BANK LTD:-


Date Scrip Value Return in

% X -X1 (X - X1)2 30-03-03 133.96 30-04-03 121.4 -9.38 -13.10 171.50


71


30-05-03 137.67 13.40 9.68 93.7430-06-03 150.2 9.10 5.38 28.9631-07-03 158.6 5.59 1.87 3.5129-08-03 184.55 16.36 12.64 159.8230-09-03 194.95 5.64 1.92 3.6731-10-03 248.1 27.26 23.54 554.2928-11-03 249.9 0.73 -2.99 8.9731-12-03 295.7 18.33 14.61 213.3730-01-04 287.25 -2.86 -6.58 43.2727-02-04 271.8 -5.38 -9.10 82.7831-03-04 295.9 8.87 5.15 26.4930-04-04 315.2 6.52 2.80 7.8531-05-04 258.2 -18.08 -21.80 475.4030-06-04 266.8 3.33 -0.39 0.1530-07-04 269.45 0.99 -2.73 7.4431-08-04 278.56 3.38 -0.34 0.1130-09-04 286.05 2.69 -1.03 1.0629-10-04 299 4.53 0.81 0.6530-11-04 340.2 13.78 10.06 101.1931-12-04 370.75 8.98 5.26 27.6731-01-05 360.6 -2.74 -6.46 41.7028-02-05 380.75 5.59 1.87 3.4931-03-05 393 3.22 -0.50 0.2529-04-05 375.1 -4.55 -8.27 68.4731-05-05 392.05 4.52 0.80 0.6430-06-05 421.55 7.52 3.80 14.4729-07-05 536 27.15 23.43 548.9631-08-05 481.7 -10.13 -13.85 191.8430-09-05 600.35 24.63 20.91 437.2931-10-05 497.15 -17.19 -20.91 437.2330-11-05 537.15 8.05 4.33 18.7130-12-05 584.7 8.85 5.13 26.3431-01-06 609.15 4.18 0.46 0.2128-02-06 615.1 0.98 -2.74 7.5331-03-06 589.25 -4.20 -7.92 62.77Total 169.65 3871.80

Calculation of Beta





72


30-04-03 -9.38 -2.92 -13.1 -6.83 89.47 46.6530-05-03 13.4 7.47 9.68 3.56 34.46 12.6730-06-03 9.1 13.41 5.38 9.5 51.11 90.2531-07-03 5.59 5.14 1.87 1.23 2.30 1.5129-08-03 16.36 11.92 12.64 8.01 101.25 64.1630-09-03 5.64 4.91 1.92 1 1.92 1.0031-10-03 27.26 10.19 23.54 6.28 147.83 39.4428-11-03 0.73 2.81 -2.99 -1.1 3.29 1.2131-12-03 18.33 15.74 14.61 11.83 172.84 139.9530-01-04 -2.86 -2.45 -6.58 -6.36 41.85 40.4527-02-04 -5.38 -0.49 -9.1 -4.4 40.04 19.3631-03-04 8.87 -1.36 5.15 -5.27 -27.14 27.7730-04-04 6.52 1.15 2.8 -2.76 -7.73 7.6231-05-04 -18.08 -15.83 -21.8 -19.74 430.33 389.6730-06-04 3.33 0.75 -0.39 -3.16 1.23 9.9930-07-04 0.99 7.82 -2.73 3.91 -10.67 15.2931-08-04 3.38 0.42 -0.34 -3.49 1.19 12.1830-09-04 2.69 7.54 -1.03 3.63 -3.74 13.1829-10-04 4.53 1.59 0.81 -2.32 -1.88 5.3830-11-04 13.78 9.91 10.06 6 60.36 36.0031-12-04 8.98 5.91 5.26 2 10.52 4.0031-01-05 -2.74 -0.71 -6.46 -4.62 29.85 21.3428-02-05 5.59 2.41 1.87 -1.5 -2.81 2.2531-03-05 3.22 -3.29 -0.5 -7.2 3.60 51.8429-04-05 -4.55 -5.21 -8.27 -9.12 75.42 83.1731-05-05 4.52 9.11 0.8 5.2 4.16 27.0430-06-05 7.52 7.13 3.8 3.22 12.24 10.3729-07-05 27.15 6.14 23.43 2.23 52.25 4.9731-08-05 -10.13 2.23 -13.85 -1.68 23.27 2.8230-09-05 24.63 10.62 20.91 6.71 140.31 45.0231-10-05 -17.19 -8.6 -20.91 -12.51 261.58 156.5030-11-05 8.05 11.36 4.33 7.45 32.26 55.5030-12-05 8.85 6.93 5.13 3.02 15.49 9.1231-01-06 4.18 5.55 0.46 1.64 0.75 2.6928-02-06 0.98 4.54 -2.74 0.63 -1.73 0.4031-03-06 -4.2 8.77 -7.92 4.86 -38.49 23.62Total 169.65 140.6 1746.98 1474.39

Return = (P1 /P0 *100) -100



73



Calculation of Beta




= 1746.98/1474.39

B = 1.18


Alpha = (Ra1-Rm1)*B

= (4.71-3.9)*1.18

=0.96

Table No 1.6

Calculation of Return and Risk of ICICI Bank Ltd


74


Factor Percentage

Risk 10.37

Return 4.71

Beta 1.18

Alpha 0.96

Chart No 1.6

Risk & Return of ICICI Bank Ltd.

0

2

4

6

8

10

12


Factor

Per

cent

age

Percentage

ANALYSIS:

ICICI Bank Ltd. has a risk factor of 10.37%



INTERPETATION:

Beta of the ICICI Bank Ltd. is 1.18 which is higher to one; it shows the high



5. SATYAM:-

Calculation of Return and Risk Date Scrip Value Return in X -X1 (X - X1)2


75


% 30-03-03 186.5 30-04-03 162 -13.14 -16.86 284.1530-05-03 161.9 -0.06 -3.78 14.3030-06-03 190.8 17.85 14.13 199.6731-07-03 175.05 -8.25 -11.97 143.3929-08-03 208.65 19.19 15.47 239.4630-09-03 241 15.50 11.78 138.8731-10-03 298.55 23.88 20.16 406.4128-11-03 315 5.51 1.79 3.2031-12-03 361.8 14.86 11.14 124.0430-01-04 380 5.03 1.31 1.7227-02-04 314.95 -17.12 -20.84 434.2431-03-04 320 1.60 -2.12 4.4830-04-04 334 4.38 0.66 0.4331-05-04 300 -10.18 -13.90 193.2030-06-04 309 3.00 -0.72 0.5230-07-04 327 5.83 2.11 4.4331-08-04 342.5 4.74 1.02 1.0430-09-04 373.4 9.02 5.30 28.1129-10-04 371 -0.64 -4.36 19.0330-11-04 417.6 12.56 8.84 78.1631-12-04 408 -2.30 -6.02 36.2331-01-05 401 -1.72 -5.44 29.5528-02-05 401.55 0.14 -3.58 12.8431-03-05 390 -2.88 -6.60 43.5129-04-05 402 3.08 -0.64 0.4131-05-05 457 13.68 9.96 99.2330-06-05 498 8.97 5.25 27.5829-07-05 535.9 7.61 3.89 15.1431-08-05 508 -5.21 -8.93 79.6830-09-05 520 2.36 -1.36 1.8431-10-05 579.8 11.50 7.78 60.5330-11-05 653.9 12.78 9.06 82.0930-12-05 710 8.58 4.86 23.6131-01-06 741 4.37 0.65 0.4228-02-06 771 4.05 0.33 0.1131-03-06 823.9 6.86 3.14 9.87Total 165.44 2841.49

Calculation of Beta


76


Return of company


[(Ra-Ra1) (Rm-Rm1)] (Rm-Rm1)2 Date

30-03-03 30-04-03 -13.14 -2.92 -16.86 -6.83 115.15 46.6530-05-03 -0.06 7.47 -3.78 3.56 -13.46 12.6730-06-03 17.85 13.41 14.13 9.5 134.24 90.2531-07-03 -8.25 5.14 -11.97 1.23 -14.72 1.5129-08-03 19.19 11.92 15.47 8.01 123.91 64.1630-09-03 15.5 4.91 11.78 1 11.78 1.0031-10-03 23.88 10.19 20.16 6.28 126.60 39.4428-11-03 5.51 2.81 1.79 -1.1 -1.97 1.2131-12-03 14.86 15.74 11.14 11.83 131.79 139.9530-01-04 5.03 -2.45 1.31 -6.36 -8.33 40.4527-02-04 -17.12 -0.49 -20.84 -4.4 91.70 19.3631-03-04 1.6 -1.36 -2.12 -5.27 11.17 27.7730-04-04 4.38 1.15 0.66 -2.76 -1.82 7.6231-05-04 -10.18 -15.83 -13.9 -19.74 274.39 389.6730-06-04 3 0.75 -0.72 -3.16 2.28 9.9930-07-04 5.83 7.82 2.11 3.91 8.25 15.2931-08-04 4.74 0.42 1.02 -3.49 -3.56 12.1830-09-04 9.02 7.54 5.3 3.63 19.24 13.1829-10-04 -0.64 1.59 -4.36 -2.32 10.12 5.3830-11-04 12.56 9.91 8.84 6 53.04 36.0031-12-04 -2.3 5.91 -6.02 2 -12.04 4.0031-01-05 -1.72 -0.71 -5.44 -4.62 25.13 21.3428-02-05 0.14 2.41 -3.58 -1.5 5.37 2.2531-03-05 -2.88 -3.29 -6.6 -7.2 47.52 51.8429-04-05 3.08 -5.21 -0.64 -9.12 5.84 83.1731-05-05 13.68 9.11 9.96 5.2 51.79 27.0430-06-05 8.97 7.13 5.25 3.22 16.91 10.3729-07-05 7.61 6.14 3.89 2.23 8.67 4.9731-08-05 -5.21 2.23 -8.93 -1.68 15.00 2.8230-09-05 2.36 10.62 -1.36 6.71 -9.13 45.0231-10-05 11.5 -8.6 7.78 -12.51 -97.33 156.5030-11-05 12.78 11.36 9.06 7.45 67.50 55.5030-12-05 8.58 6.93 4.86 3.02 14.68 9.1231-01-06 4.37 5.55 0.65 1.64 1.07 2.6928-02-06 4.05 4.54 0.33 0.63 0.21 0.4031-03-06 6.86 8.77 3.14 4.86 15.26 23.62Total 165.44 140.6 1226.24 1474.39

Return = (P1 /P0 *100) - 100

Where, P1 = Current month price, M.P. BIRLA INSTITUTE OF MANAGEMENT

77




Calculation of Beta




= 1226.24/1474.39

B = 0.83


Alpha = (Ra1-Rm1)*B

= (4.59-3.9)*0.958

=0.66

Table No 1.7

Calculation of Return and Risk of Satyam Computers Ltd


78


Factor Percentage

Risk 8.84

Return 4.59

Beta 0.83

Alpha 0.66

Chart No 1.7

Risk & Return of Satyam Computers

0

1

2

3

4

5

6

7

8

9

10


Factor

Per

cent

age

Percentage

ANALYSIS:

Satyam Computers has a risk factor of 8.84%



INTERPETATION:

Beta of the Satyam Computers is 0.83 which is lower than one; it shows the

low volatility of scrip with respect to market. Risk of the share is 8.84% and

the rate of return is only 4.59%.

Table No 1.8


79


Average risk of selected Company shares

Company Risk

ACC Limited 9.33

Bajaj Auto Limited 9.63

BHEL 11.19

ICICI Bank 10.37

Satyam 8.84

Total 49.36

Bench Mark 6.4

Average risk = 49.36/5

=9.87

Chart No 1.8

Risk Profile

0

2

4

6

8

10

12

ACCLimited

Bajaj AutoLimited

BHEL ICICI Bank Satyam Bench M ark

Companies & Bench Mark

Ris

k in

%

Risk


80


ANALYSIS:

BHEL has the highest risk factor of 11.19% with 0.958% beta and -3.14% of alpha.

Satyam Computers has the lowest risk factor of 8.84% with 0.83% of beta and 0.66% of alpha.

Bench Mark has the risk factor of 6.4%

On an average Equity shares have the risk factor of 9.87%

INTERPETATION:

Risk is a major factor influence all type of investors. In the above selected

Equity Shares average risk factor is 9.87% and the risk factor of bench mark

is 6.4%, it is showing equities are more risky.


81


Table No 1.9

Average return of selected Company shares

Company Return

ACC Limited 5.29

Bajaj Auto Limited 5.40

BHEL 7.18

ICICI Bank Ltd. 4.71

Satyam 4.59

Total 27.17

Bench Mark 3.9

Average return = 27.17/5

= 5.43

Chart No 1.9

Return Profile

012345678

ACCLimited

BajajAuto

Limited

BHEL ICICI BankLtd.

Satyam BenchMark

Companies & Bench Mark

Ret

urn

in %

Return


82


ANALYSIS:

BHEL shares have got the highest return of 7.18%

Satyam Computers shares have got the lower return of 4.59%

Bench Mark return is 3.9%

On an average equity shares have got 5.43% per month.

INTERPETATION:

Return is a major factor influencing factor to all type of investors. In the above

selected equity shares average return is 5.43%, compared to bench mark

return of 3.9% selected equity shares returns are good and it will attract more

and more customers.


83


Comparison of Selected Equity Capital and Mutual Fund Schemes in respect their Risk

Table No 1.10

Investment Avenues Risk

Mutual funds 6.74

Equity capital 9.87

Chart No 1.10

0

5

10

15

Ris

k

Investment Avenues

Risk Profile

Mutual funds Equity capital

ANALYSIS:

Mutual funds have the risk on an average of 6.74%

Equity shares have the risk on an average of 9.87%

INTERPETATION:

Equity capital and Mutual fund schemes are subjected to market risk. Based

on the above analysis mutual funds have an average risk of 6.74% which is

compared to equity shares risk of 9.87% is lower. Those who would like to

take risk can go for equity investments.


84


Comparison of Selected Equity Capital and Mutual Fund Schemes in respect their Return

Table No 1.11

Investment Avenues Return

Mutual funds 4.39

Equity capital 5.43

Chart No 1.11

0123456

Ret

urn

Investment Avenues

Return Profile

Mutual fundsEquity capital

ANALYSIS:

Mutual funds have average return of 4.39%

Equity shares have the return on an average of 5.43%

INTERPETATION:

Equity capital and Mutual fund schemes are subjected to market risk. Based

on the above analysis mutual funds have an average return of 4.39% which is

compared to equity shares return of 5.43% is lower. Those who would like to

take risk can go for equity investments for getting higher return.


85


FINDINGS AND RECOMMENDATIONS:

Saving money is not enough. Each of us also need to invest one’s savings



years.

FINDINGS

Investments in both equity capital and mutual fund schemes are

subjected to market risk.

Now a day’s investments in equity and mutual fund schemes are

increases because of falling interest rates and awareness of equity

capital and mutual fund schemes in the minds of investors.

BHEL has a highest risk factor of 11.19% and Satyam Computers has

a lowest risk factor of 8.84%, where as benchmark risk is 6.4% which

shows investing in equity is more risky.

BHEL has a highest return on a monthly average of 8.18% and Satyam

Computers has a lowest return on a monthly average of 4.59%, where

as benchmark return is only 3.9% which shows higher the risk higher

the return.

Sundaram SMILE fund has higher risk factor of 7.89% with a negative

return of 0.23% where as Reliance Vision Fund has higher risk factor of

6.9% with a return of 5.16% per month.

On the basis of above analysis mutual funds have a risk factor on an

average 6.74%, and their returns are 4.39% per month

On the basis of above analysis Equity shares have a risk factor on an

average 9.87%, and their returns are 5.43% per month

On the basis of above statements it has proved higher the risk higher

the return and lower the risk lower the return.


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Investment in mutual fund schemes gives diversified portfolio to

investors.

Standard deviation is one of the best ways for finding risk of scrip’s

mutual fund units.

In case of both equities and mutual funds(open ended) liquidity is very

high, with in three working days mutual funds will converted into cash

and liquidity of equity is based on demand and supply conditions of the

market for a particular scrip.


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RECOMMENDATIONS

Now a day’s Indian capital market is attracting more and more foreign

institutional investors (FII’s) because of economic stability and

increasing growth rate, it leads to gradual increase in the stock market

indices.

This is the right time to invest in share and mutual funds because of

above reason.

Interest rates are falling gradually and equity markets are booming

because of this reason investors can move from bank deposits to

mutual funds and equities.

Five basic norms of smart investing:

Investors must have a portfolio approach to wealth.

One must analyze one's risk appetite.

One must possess a long-term outlook

Never forget to do homework and analysis.

It is essential to have control over one's emotions.

Investment in both equity capital and mutual fund schemes are subjected to

market risk. Following are the recommendations given to investors for

investing rationally in equity capital and mutual fund schemes

Aggressive Growth Funds

Investors who can assume the risk of potential loss in value of their

investment in the hope of achieving substantial and rapid gains. They are not

suitable for investors who must conserve their principal or who must maximize

current income.


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Growth Funds

Although growth funds are more conservative than aggressive growth funds,

they are still relatively volatile. They are suitable for growth-oriented investors

but not investors who are unable to assume risk or who are dependent on

maximizing current income from their investments.

Growth and Income Funds

Growth and income funds have low to moderate stability of principal and

moderate potential for current income and growth. They are suitable for

investors who can assume some risk to achieve growth of capital but who

also want to maintain a moderate level of current income.

Fixed-Income Funds

Fixed-income funds are suitable for investors who want to maximize current

income and who can assume a degree of capital risk in order to do so. Again,

carefully read the prospectus to learn if a fund's investment policy with respect

to yield and risk coincides with your own objectives.

Balanced/Equity Income funds

Balanced and equity income funds are suitable for conservative investors who

want high current yield with some growth.

Money Market Funds

Money market funds are suitable for conservative investors who want high

stability of principal and moderate current income with immediate liquidity.


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CONCLUSION

Saving money is not enough. Each of us also need to invest one’s savings



years.

The study will guide the new investor who wants to invest in equity and mutual

fund schemes by providing knowledge about how to measure the risk and

return of particular scrip or mutual fund scheme. The study recommends new

investors to go for mutual funds rather than equities, because of high risk and

market instability.

From the calculation it is found that the average risk of equities based on

sample size is 9.87 & they are earning 5.43% returns per month where as

mutual funds average risk based on sample size is only 8.74 & they are

earning 4.39% per month.


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ANNEXURES

BSE Sensex Companies

Industry Companies (Population Elements)

Random Selected Co. (Sample)

Manufacturing

1. Bajaj Auto Ltd.,

2. Hero Honda Motors Ltd.,

3. Maruti Udyog Ltd.,

4. Tata Motors Ltd.,Ranbaxy Laboratories Ltd.,

5. Rambaxy Laboratories Ltd.,

6. Dr.Reddy’s Laboratories Ltd.,

7. Cipla Ltd.,

8. BHEL

9. TISCO

10. L & T Ltd.,

11. ACC Ltd.,

12. Gujarath Ambuja Cements Ltd.,

13. Tata Power Co. Ltd.,

14. Reliance Equity Ltd.,

15. Grasim Industries Ltd.,

16. Reliance Industries Ltd.,

17. Hondalco Industries Ltd.,

18. Hindustan Lever Ltd.,

19. ITC Ltd.,

1. Bajaj Auto Ltd.,

2. BHEL

3. ACC Ltd.,


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20. Hindustan Petroleum Corp. Ltd.,

21. ONGC Ltd.,

Service

1. Infosys Technologies Ltd.,

2. Wipro Ltd.,

3. Satyam Computer Services Ltd.,

4. HDFC

5. HDFC Bank Ltd.,

6. ICICI Bank Ltd.,

7. State Bank of India

8. Bharti Tele Ventures Ltd.,

9. Zee telefilms Ltd.,

ICICI Bank Ltd.,

Satyam Computer Services Ltd.,

Mutual Fund Industry in India

Mutual fund Companies (Population Elements)

Random Selected Schemes (Sample)

ABN AMRO Mutual Fund

Birla Sun Life Mutual Fund

BOB Mutual Fund

Canbank Mutual Fund

DBS Chola Mutual Fund

Deutsche Mutual Fund

Escorts Mutual Fund

Franklin Templeton Mutual Fund

HDFC Mutual Fund

HSBC Mutual Fund

ING Vysya Mutual Fund

JM Financial Mutual Fund

Kotak Mahindra Mutual Fund

LIC Mutual Fund

Reliance Mutual Fund

Franklin Templeton Mutual Fund

Prudential ICICI Mutual Fund

SBI mutual fund

Sundaram Mutual Fund

PRINCIPAL Mutual Fund


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Prudential ICICI Mutual Fund Reliance Mutual Fund

Sahara Mutual Fund

SBI mutual fund

Standard Chartered Mutual Fund

Sundaram Mutual Fund

Tata Mutual Fund

Taurus Mutual Fund

GROWTH IN ASSETS UNDER MANAGEMENT

Note:

Erstwhile UTI was bifurcated into UTI Mutual Fund and the Specified Undertaking of the Unit Trust of

India effective from February 2003. The Assets under management of the Specified Undertaking of the

Unit Trust of India has therefore been excluded from the total assets of the industry as a whole from

February 2003 onwards.


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BIBLIOGRAPHY

Key information memorandums.

• Franklin Templeton KIM

• Reliance mutual fund KIM

• SBI mutual fund KIM

Preeti Singh, Investment Management, Eleventh edition, Himalaya

Publishing House, Page No.150,388,389.

www.amfiindia.com / Historical NAVs of mutual fund schemes

www.bseindia.com / Historical share prices of companies.


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