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Regional College of Management Autonomous

Chakadola Vihar, Chandrasekharpur

Bhubaneswar - 751023, Orissa

An Project Report On

Organisation Study

And

Risk And Return of Mutual fund

With

Submited By

Manoj Das Gupta

(1001247109)

UNDER THE GUIDANCE AND SUPERVISION OF

PROF. VISHWAJIT RAWAT MR. RAKESH KASHWANI

SENIOR PROFESSOR BRANCH MANAGER

RCMA RELIGARE SECURITIES LTD


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Certificate

This is to certify that this report is the result of Internship undergone

by Manoj Das Gupta the register number 1001247109 at RELIGARE

SECURITIES LIMITED, under the guidance and supervision of

PROF.VISHWJIT RAWAT. This has not formed a Basis for the award of any

degree/diploma for any college.

Place: Bhubaneswar PROF:VISHWJIT ROUT

Date: (FACULTY GUIDE)


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Guides Certificate

This to certify that this report titled An Organizationalstudy and risk and return analysis of mutual funds at Religare securities

Limited is the result of Internship undertaken by MANOJ DAS GUPTAbearing the register number 1001247109 at RELIGARE SECURITIES Limited,

Varanasi, under my guidance and supervision. This has not formed a basis for the

award of any degree/ diploma for any university.

Place: Bhuwaneswar (MANOJ DAS GUPTA)

Date: Reg.No: 1001247109


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Acknowledgment

The internship training which I underwent for last

5 weeks at Religare securities limited from 23rd May 2011 to 30th June 2011 has

been most enthralling weeks of my life. It was a great pleasure to work in one of

the major financial service providing firm.

This project is made successful by the

combining efforts of a no. of officials whose knowledge and experience have

helped me a lot. This project cannot completed unless and until, I fulfil my duty of

thanking those persons to whom I deeply indebted. I wish to express my deep

gratitude towards them to their whole hearted support and existence.

Firstly I would like to thank PROF: PRABIR PAL

DIRECTOR, Regional College of Management Autonomous, Bhuwaneswar, who

has given his valuable support during my Internship.

I am also extremely thankful to Prof

VISHWAJIT RAWAT, Regional College of Management Autonomous, who has

guided me to do this project by giving valuable suggestion and advice.

Further, I am grateful to Mr. RAKESH

KASHWANI Branch manager Religare securities limited to allow me to go my

internship in their organization. They all guided during the training period and

helped me in each and every step to prepare this report.

At the end I am also thankful to my friends to help me in preparing my report.


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Contents PART A EXECUTIVE SUMMARY

RELIGARE ENTERPRISES LIMITED

AN INTRODUCTION

PROMOTERS MISSION AND VISION STATEMENTS

INDUSTRY PROFILE

SUBSIDIARIES COMPANIES OF RELIGARE ENTERPRISE LIMITED

THE REGISTERED OFFICE OF RSL

BOARD OF DIRECTORS OF RSL

KEY PERSONS OF RELIGARE SECURITIES LIMITED

FINANCIAL PERFORMANCE OF RELIGARE SECURITIES LIMITED

STRATEGY

THE RELIGARE EDGE

PRODUCT PORTFOLIO IN RELIGARE ENTERPRISE LIMITED

PRODUCTS OFFERED BY RELIGARE SECURITIES LIMITED

ORGANIZATION STRUCTURE

BRANCH STRUCTURE

DEPOSITORY PARTICIPANT SERVISES

MUTUAL FUNDS

INSURANCE MARKETING

SWOT ANALYSIS

STRENGTHS

WEAKNESS

OPPORTUNITIES

THREATS

SUGGESTIONS AND RECOMMENDATIONS

BIBLIOGRAPHY


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Content PART B

INTRODUCTION TO MUTUAL FUND

BACKGROUND OF THE STUDY

CONCEPT OF MUTUAL FUND

SCHEMES OF MUTUAL FUNDS

ADVANTAGES OF MUTUAL FUND

DISADVANTAGES OF MUTUAL FUND

RISK INVOLVED IN MUTUAL FUNDS

STATEMENT OF THE PROBLEM

OBJECTIVES OF THE STUDY

SCOPE OF THE STUDY

LIMITATIONS OF THE STUDY

RESEARCH DESIGN

SAMPLE DESIGN

CALCULATION OF RETURN AND RISK OF SELECTED MUTUAL

FUND SCHEMES

CALCULATED RISK AND RETURN OF DIFFERENT MUTUAL FUNDS

INTERPRETATION

FINDINGS & RECOMMENDATIONS

CONCLUSION

BIBLIOGRAPHY


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Executive summary

The P.G.D.M course offered by the REGIONAL COLLEGE OF

MANEGEMENT AUTONOMOUS BHUWANESWAR has its

own unique syllabus that requires its P.G.D.M students to undertake an

internship with any of the leading business houses for a period ranging from 5

weeks to 6 weeks. The purpose of this internship is to enable the students to

appreciate and understand the practical world vis--vis the theoretical inputadministered during regular academic sessions. This helps in creating Managers

who are equipped with the experience of linking the theoretical inputs with

those of practical exposure and come out with creative solutions / ideas in

Enhancing the business. In partial fulfilment of PG.D.M degree ofRCMA .

The company chosen was Religare securities limited. Religare is

one of the leading equity and securities firm in India.

The company currently handles almost 4-5% of the total volumes traded

on NSE and in the realm of online trading and investments it currently

holds a share of close to 8% of the market, as per some recent published reports.

This project is a study of organizational structure in RELIGRE

SECURTIES LTD and the RISK AND RETURN

ANALYSIS OF MUTUAL FUNDS.


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PART A

ORGANIZATIONAL STUDY


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RELIGARE ENTERPRISES LIMITED

VALUES THAT BIND


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An Introduction

Religare is a financial services company in India, offering

a wide range of financial products and services targeted at retail investors,

high net worth individuals and corporate and institutional clients.

Religare is promoted by the promoters of Ranbaxy Laboratories Limited.

They operate from 7 regional offices and 43 sub-regional offices and

have a presence in 498 cities and towns controlling 1837 locations managed by them

and their Business Associates all over India, as well as a representative office in London.

While the majority of their offices provide the full complement of our services, they

also have dedicated offices for clients investment banking, institutional brokerage,

portfolio management services and priority client services.

They employed approximately 10,000 fulltime employeesas on March 31, 2011. Their employees are broadly categorized into seven

departments: sales, operations, technology, risk management, research, administrationand support.


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Registered and Corporate Office of the Company

Registered Office Address:-

Delhi:D3,P3B,District Centre, Saket,New Delhi - 110017,India.T: +91-11-3912-5000F: +91-11-3912-6050

Corporate Office Address:-

Noida:A-3, 4, 5, Sector-125, Noida,Uttar Pradesh - 201 301,India.T: +91-0120-339-1000

Mumbai:GYS Infinity, Paranjpe B Scheme,Subhash Road, Near Garware House,

Vile Parle (E),Mumbai - 400057T: +91-022-6673-7100


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Promoters

The following individuals are the Promoters of the Company:

1. Mr. Malvinder Mohan Singh; and

2. Mr. Shivinder Mohan Singh.

Mr. Malvinder Mohan Singh

Chairman and one of our Promoters, graduated

in Economics from St. Stephens College, Delhi and holds an MBA

degree from the Fuqua School of Business, Duke University, U.S.A. Mr.

Singh is the CEO and managing director of Ranbaxy Laboratories

Limited. Mr. Singh joined Ranbaxy Laboratories Limited in 1998 and

worked through various functions of general management, sales and marketing,

finance and business development. Prior to being appointed as CEO and managing

director of Ranbaxy Laboratories Limited (RLL),he was responsible for

RLLs global operations, as President Pharmaceuticals. Mr. Singh is also a

member of the National Council for the CII and is co-chairman of the CII National

Committee on Intellectual Property Rights, Research and Development, Technology

and Innovation. Further, Mr. Singh is a member of the Young Global LeadersForum, which is an initiative of the World Economic Forum. Mr. Singh is on the

Board of Visitors of Duke University and member of the Board of Trade,

Ministry of Commerce and Industry, Government of India. As the Director of

the Company,


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he has been responsible for advising and counselling management on corporate

decisions, providing strategic guidance and oversight, approving managements

business plans, and monitoring the Companys performance against the strategic

business plans, overseeing management of the business on a regular basis,ensuring ethical behaviour and compliance with various laws and regulations.

Mr. Shivinder Mohan Singh

One of their Promoters, graduated with

a B.A. (Hons.) degree in mathematics from St. Stephens College, Delhi

and holds an MBA degree with specialization in health sector

management from the Fuqua School of Business, Duke University, U.S.A. Mr.

Singh is on the board of directors of RLL, fellow of Aspens

India Leadership Initiative and board of visitors of Fuqua School of

Business, Duke University, U.S. He held the position of Chief Operating

Officer of the Fortis Hospital, Mohali for two years, during which he led

his team in developing a strong work culture. He has also led the

acquisition of Escorts Heart Institute & Research Centre Limited

(EHIRCL) by Fortis Healthcare Limited and is currently the managing

director of EHIRCL. As the Director of the Company, he has been

responsible for advising and counselling management on corporate decisions,

providing strategic guidance and oversight, approving managements

business plans, and monitoring the Companys performance against the

strategic business plans, overseeing management of the business on a regularbasis, ensuring ethical behaviour and compliance with various laws and

regulations.


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MISSION AND VISION STATEMENTS

Vision

To build Religare as a globally trusted brand

in the financial services domain and present it

as the Investment Gateway of India

Mission

Providing financial care driven by the core values of diligence and

transparency.

Brand Essence

Religare is driven by ethical and dynamic processes forwealth creation


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INDUSTRY PROFILE

India is one of the fastest growing economies in

the world with a rapidly expanding financial services sector. After

adjustments for purchasing power parity, Indias economy is the fourth

largest in the world in terms of Gross Domestic Product (GDP). An

efficient securities market provides the necessary channel for flow ofresources

from the providers of capital to the users of capital for economic

development. The overall growth of the economy and activity are also

important factors, which determine availabilityof resources.

Indian Finacial Sector

The Indian financial services industry has

Experienced significant growth in the last few years. There has been a

considerable broadening and deepening of the Indian financial markets due to

various financial market reforms undertaken by the Indian regulators, the

introduction of innovative financial instruments in recent years and the entry of

sophisticated domestic and international financial services participants. Sectors

such as banking, asset management and brokerage have been liberalized to

allow private sector involvement, which has contributed to the development

and modernization of the financial services sector.


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This is particularly evident in the non-banking financial services sector, such as

brokerage, residential mortgage and insurance services, where new products and

expanding delivery channels have helped these sectors to achieve high growth rates

recently.

Financial services accounted for approximately 14% of total GDP

in fiscal 2007. The combined average daily turnover of the BSE and the

NSE for different market segments has increased from approximately Rs.4.8 billion

in March 1996 to approximately Rs. 312.1 billion in March 2006. Over this

period, there has also been a substantial growth in the market for otherfinancial products such as insurance, and mutual funds.

Industry Outlook

Existing low penetration levels, increasing affordability of

credit and rising income levels have led to a growing demand for retail

financial products. India has a substantial retail investor base throughout the

country that has a large pool of untapped surplus funds. The market confidence of

small investors has increased with growing levels of education and financial

awareness, and the strengthening of regulatory systems. The financial services

industry is undergoing consolidation. In the future, it is expected that marketshare will be captured by financial services providers who can offer a complete

range of financial products and services.


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COMPANYS HISTORY

Religare enterprise limited:-

Religare was originally incorporated as

Vajreshwari Cosmetics Private Limited on January 30, 1984. The name

of the Company was subsequently changed to Religare Enterprises PrivateLimited pursuant to a special resolution of our shareholders dated January 10,

2006. The fresh certificate of incorporation consequent to the change of name was

granted to our Company on January 31, 2006, by the Registrar of Companies, Punjab,

Himachal Pradesh & Chandigarh at Jalandhar.

The status of our Company was changed

to a public limited company by a special resolution of the members dated July 14,

2006. The fresh certificate of incorporation consequent to the change of name

was granted to their Company on August 11, 2006, by the Registrar of

Companies, NCT at New Delhi.

Historically, they conducted business as separate companies.

Their business was carried on by Fortis Securities Limited, Fortis Comdex

Limited and Fortis Finvest Limited, some of which were subsidiaries of certain

of their Promoter Group companies. In order to integrate their financial services

operations under the Religare name, the Company acquired a controlling stake in

Fortis Securities Limited, Fortis Comdex Limited and Fortis Finvest Limited and

subsequently, acquired a 100% stake in these entities and in Religare Insurance

Broking Limited and Religare Venture Capital Private Limited. These entities are

now their Companys subsidiaries.


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SUBSIDIARY COMPANIES OF

RELIGARE ENTERPRISE

LIMITED


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Subsidiaries companies of Religare enterprise

limited

Religare AMC Limited

Asset Management Business Portfolio Management

Religare Finvest Limited

Lending and Distribution business

AEGON Religare Life Insurance Co. Ltd.

Life Insurance Company, JV withAegon(26%),

Religare(44%), and Bennett &Coleman(30%)

Religare Insurance Broking Limited

Life Insurance Broking Business Non-Life Insurance Broking Business

Religare Macquarie Wealth Mgmt. Ltd.

JV with Macquarie for WealthManagement Business

Religare Arts Initiative Limited

Business of Art Art Gallery Art Advisory

Religare Securities Limited

Retail Equity Broking Online Investment Portal Depository Services

Religare Venture Capital Limited

Private Equity and Investment Manager

Religare Commodities Limited

Commodity Broking Business

Religare Insurance Holding Company

Limited

Religare Capital Markets Limited

PE and M&A Advisory

Institutional Broking Investment Banking

Religare Realty Limited (RRL):-

Religare Finance Ltd.

Capital Market Financing


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BOARD OF DIRECTORS OF RSL

The Board of Directors of RSL currently comprises the following persons:

Mr. Sunil Godhwani

Chairman and Managing Director

Mr Shachindra Nath

Group CEO

Mr. Anil Saxena

Chief Financial Officer

Mr. Harpal Singh

Non Executive Director

Mr. Deepak Ramchand Sabnani

Independent Director

Ms. Kathryn Matthews


Mr. Padam Bahl


Mr. J. W. Balani


Ms. Sunita Naidoo


Mr. Stuart D Pearce


Mr. R. K. Shetty

Alternate to Mr. J. W. Balani

Capt. G. P. S. Bhalla

Alternate to Mr. Deepak Sabnani
http://www.religare.com/OurLeaders.aspx#sunilhttp://www.religare.com/OurLeaders.aspx#sunilhttp://www.religare.com/OurLeaders.aspx#shivinderhttp://www.religare.com/OurLeaders.aspx#shivinderhttp://www.religare.com/OurLeaders.aspx#shivinderhttp://www.religare.com/OurLeaders.aspx#shivinderhttp://www.religare.com/OurLeaders.aspx#harpalhttp://www.religare.com/OurLeaders.aspx#harpalhttp://www.religare.com/OurLeaders.aspx#Deepakhttp://www.religare.com/OurLeaders.aspx#Deepakhttp://www.religare.com/OurLeaders.aspx#Kathrynhttp://www.religare.com/OurLeaders.aspx#Kathrynhttp://www.religare.com/OurLeaders.aspx#Padamhttp://www.religare.com/OurLeaders.aspx#Padamhttp://www.religare.com/OurLeaders.aspx#Balanihttp://www.religare.com/OurLeaders.aspx#Balanihttp://www.religare.com/OurLeaders.aspx#Sunitahttp://www.religare.com/OurLeaders.aspx#Sunitahttp://www.religare.com/OurLeaders.aspx#StuartDhttp://www.religare.com/OurLeaders.aspx#StuartDhttp://www.religare.com/OurLeaders.aspx#Shettyhttp://www.religare.com/OurLeaders.aspx#bhallahttp://www.religare.com/OurLeaders.aspx#bhallahttp://www.religare.com/OurLeaders.aspx#bhallahttp://www.religare.com/OurLeaders.aspx#Shettyhttp://www.religare.com/OurLeaders.aspx#StuartDhttp://www.religare.com/OurLeaders.aspx#Sunitahttp://www.religare.com/OurLeaders.aspx#Balanihttp://www.religare.com/OurLeaders.aspx#Padamhttp://www.religare.com/OurLeaders.aspx#Kathrynhttp://www.religare.com/OurLeaders.aspx#Deepakhttp://www.religare.com/OurLeaders.aspx#harpalhttp://www.religare.com/OurLeaders.aspx#shivinderhttp://www.religare.com/OurLeaders.aspx#shivinderhttp://www.religare.com/OurLeaders.aspx#sunil


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Key persons of Religare securities limited:-

Mr.Sunil Godhwani

is the CEO and Managing Director of our Company. He is a

Graduate in chemical engineering and has a master degree in industrial

engineering and finance from Polytechnic Institute, New York. He has more than

20 years experience in business. Mr. Godhwani joined our Board on July 13,

2006. He was appointed as CEO And Managing Director of our Company on April

9, 2007. Mr.Godhwani is also the managing director of Fortis Financial Services

Limited. Prior to becoming the Managing Director of our Company,

Mr. Shachindra Nath

(Group Chief Executive Officer) Religare Enterprises Ltd.,

aged 39 years, carries the overall responsibility for managing all pivotal

operations of the group. He is associated with Religare since the year 2000 and is

prominently known as a dynamic strategist.Mr. Nath started his professional

career immediately after his graduation at theage of 21 years and worked as

Commercial Trainee with Garware Wall Ropes, after which alongside his legal

studies worked as consultant to gain hands on experience in Finance, Costing and

Taxation. He then moved to run a Non Woven Plant with a Carpet Export

Company. He has over 16 years of experience in the financial services industry.


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Mr Anil Saxena

(Chief Financial Office) plays a crucial role as the preserver of

assets, cost and value-adding growth as he takes the final call in managingprosperity, funding the groups aggressive growth plans and keeping the faith of

the stakeholders, our biggest asset. He is responsible for ensuring that

investments give stable growth, good corporate affairs and risk management. He

received Bachelors degree in Commerce from the University of Delhi. He is a

member of the Institute of Chartered Accountants of India as well as the Institute

of the Cost and Works Accountants of India. He has over 16 years of experience in

the financial services industry and is with Religare since the past 9 years.


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Financial Performance of Religare securities limited:-

Balance sheet (Rs crore)

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06

Sources of funds

Owner's fund

Equity share capital 127.81 76.29 76.08 64.40 50.00

Share application money 0.18 1,800.16 - - -

Preference share capital 25.00 25.00 - - -

Reserves & surplus 2,408.07 617.19 405.24 223.89 3.65

Loan funds

Secured loans - - - - -

Unsecured loans 22.22 - 75.40 3.50 18.85

Total 2,583.28 2,518.64 556.72 291.79 72.50

Uses of funds

Fixed assets

Gross block 25.67 3.73 0.56 0.01 -

Less : revaluation reserve - - - - -

Less : accumulated depreciation 4.54 0.36 0.05 - -

Net block 21.12 3.37 0.51 0.01 -

Capital work-in-progress - 0.01 0.07 - -

Investments 2,653.85 2,023.55 545.28 289.81 72.52

Net current assets

Current assets, loans & advances 87.85 496.81 21.42 7.53 0.04

Less : current liabilities & provisions 179.54 5.10 10.57 5.56 0.06

Total net current assets -91.69 491.71 10.86 1.97 -0.02

Miscellaneous expenses not written - - - - -

Total 2,583.28 2,518.64 556.72 291.79 72.50

Notes:

Book value of unquoted investments 2,629.83 1,025.74 493.99 262.80 -

Market value of quoted investments 20.89 11.28 34.87 29.78 -

Contingent liabilities 380.01 585.01 92.03 30.00 -

Number of equity sharesoutstanding (Lacs) 1278.14 762.90 760.84 643.97 500.00


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STRATEGY

Increase geographical presence:-

They intend to further expand the scale of their operations,

explore new distribution channels and increase their reach and client base

domestically and internationally. They are focused on increasing the

number of our client relationships through our network of offices across

India. Their emphasis is on expanding the scale of operations as well as

growing network in the smaller Indian cities, which they believe present

attractive opportunities to grow their client base and revenues. They also

intend to establish offices in key overseas markets, including the Middle

East and Western Europe. As the global profile of the Indian financial

markets improves, they expect to experience significant interest from

overseas institutional and non-resident Indian investors in Indian financial

services. Their initial emphasis will be on using their proposed

international offices as supplementary distribution channels for their

offerings in the Indian markets and on channelling Indian investments in

the international financial markets. Our long-term international strategy

includes our participation in overseas financial markets by setting up

regulated financial services companies in such jurisdictions.


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Expand our Internet-based delivery

They plan to significantly enhance our on-line

trading capabilities and have established their on-line trading system to

complement our other products and services offerings. They also have

established a dedicated advisory desk for on-line services and a sales

force of direct marketers that they expect in the next several months to

increase to 2,500 covering 100 cities. They believe that we have the

technological platform and systems in place to accommodate and service

significant increases in on-line trading accounts and clients. They believe

that an Internet-based, easily scalable product delivery model will enable

us to respond effectively to the competitive challenges of discount equity

brokerages and eventually move into delivering a wider range of products

and services on-line.

Grow existing product lines and expand our

products and services portfolio:-

They seek continually to introduce new

products that provide clients access to a range of financial products and

services to suit their varied needs. In addition to growing our traditional

equity brokerage business, we intend to develop their recent initiatives such as


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commodities and insurance brokerage and personal credit

services. They are establishing separate subsidiaries to handle different

product lines which we expect will form significant parts of our business

going forward. In particular, we intend that wealth management serviceswill be located in Religare Wealth Management Services Limited;

investment banking and transaction advisory services will be located in

Religare Capital Markets Limited; and PLS and other consumer lending will be

located in Religare Finance Limited. We believe this

reorganization will enable us to better develop these businesses, possibly

in conjunction with Indian and international partners. We have already

applied to SEBI to sponsor an AMC in a joint venture with Aegon

International N.V., a global provider of insurance and pension services.

Continue to develop client relationships:-

We plan to grow our business primarily by growing the

number of client relationships as we believe that increased client relationships

will add stability to our business. We seek to build on existing relationships and also

focus on bringing into our portfolio major, multi-national corporations, large profitable

public sector corporations and middle market companies. We also believe that the rapid

growth in the middle market company sector offers us a significant opportunity to

provide a wide variety of financial services and products to this segment. We also seek

to offer our clients diversified products and services to increase our revenues

percentage.


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Strategic acquisitions and alliances:-

They seek to pursue strategic acquisition opportunities

to enhance our capabilities, address specific industry opportunities to

enhance further their industry and technical expertise, grow their

operations geographically and benefit from an expanded client base. The

Indian brokerage industry is experiencing significant consolidation

involving the growth of corporate brokerage houses and increasing marginalization

of small and regional brokers. Stricter regulatory and higher capital requirements have

hastened this process, which provides opportunities for well-capitalized,

professionally-managed corporate brokers, such as us, to acquire smaller participants

and brokers associated with regional exchanges. We intend to target selectively such

brokers for acquisition to expand our retail business.

The Religare edgePan India footprint

Ethical business practices

Nationwide presence including Mandi Locations for in-depth andfirsthand information

Offline/Online delivery models

Powerful research and analytics supported by a pool of highlyskilled Research Analysts Single window for all investment needs

through your unique CRN


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PRODUCT PORTFOLIO


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Product portfolio in Religare enterprise limited:-

They have divided our product and service offering

under three broad client interface categories: Retail Spectrum, Wealth

Spectrum and Institutional Spectrum.


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Retail Spectrum:- covers equity brokerage services, commodity brokerage

services, personal financial services (financial planning for the retail investor,

including the distribution of mutual funds, savings products, life insurance and

initial public offerings (IPOs) and personal credit (personal loans services (PLS)and loans against shares (LAS)).Retail Spectrum focuses on clients who keep less

than Rs. 2.5 million on a continuing basis, in the form of either equity trading

account margin, mutual fund investment, portfolio management investments or

insurance premiums paid up.

Wealth Spectrum:- covers products and services which are geared to service

high net worth individuals and provide wealth advisory services (on an assetallocation model), PMS (discretionary equity investments), priority client equity

services (non-discretionary equity trading services), art initiatives (an art fund

which they intend shortly to launch as an investment diversification product) and

international equity investment advisory services. Wealth Spectrum focuses on

clients who keep at least Rs. 2.5 million on a continuing basis or more in the form of

equity trading account margins, mutual fund investments, portfolio

management investment or insurance premiums paid up.

Institutional Spectrum:- covers products and services which cater under one

service offering to corporate and institutional clients, including domestic

mutual funds, FIIs, banks and corporate customers.The Institutional Spectrum

provides services to the institutional investor community through institutional

brokerage and investment banking services. We also link corporate clients with a

transaction advisory group,which consists of account managers through whominstitutional clients are able to access the full range of our services.


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Products offered by Religare securities limited:-

-Equity & Derivatives

-Depository

-Portfolio Management Services- International Advisory

-Institutional Broking Services- Investment Banking

Equity and derivatives:-Trading in Equities with Religare truly empowers

you for your investment needs. A highly process driven, diligent approach

backed by powerful Research & Analytics and one of the best in class dealing

rooms ensures that you have a superlative experience. Further, Religare also has

one of the largest retail networks, with its presence in more than 900 locations

across more than 320 towns & cities. This means, you can walk into any of

these branches and connect to our highly skilled and dedicated relationshipmanagers to get the best services. You could also choose to enjoy the freedom to

execute your own trade through our online mechanism.

Depository:-RSL provides depository services to investors as a Depository

Participant with NSDL and CDSL. The Depository system in

India links issuers, Depository Participants, Depositories National

Securities Depository Limited (NSDL) and Central Depository Services (India)

Limited (CDSL) and clearing houses / clearing Corporation of

Stock Exchanges. These facilitate holding of securities in dematerialized form and

securities transactions are processed by means of account transfers.


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Portfolio Management Services

They are registered with SEBI to provide PMS. They

offer fully discretionary portfolio management services to provide

individualized services for clients for a variety of asset classes to fit the

investors specific investment parameters. We currently have five PMS

products: Caterpillar, Panther, Tortoise, Elephant and Leo. These products

are designed for the varying preferences, objectives, risk tolerance and investment

horizons of their customers.PMS operate on a multi-fund manager approach where

the fund manager team is headed by a chief investment officer and each scheme

is supported by a fund manager and one research analyst with its ownoperations, risk and customer support team.

Existing products under our PMS are:

Panther

Panther is targeted at investors who are willing to take high risks for high returns. It

is an aggressive scheme that is positioned across sectors and market caps and has

a high portfolio turnover. Investment strategy includes investments across

sectors with a view to take advantage ofvarious market conditions and identifies

stocks which have high volatility buy potential. This product also aggressively uses

derivatives for hedging and maximizing returns from the portfolio.


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Tortoise

Tortoise aims to achieve gradual growth in portfolio value over a period of time

by way of careful and judicious investment in fundamentally strong and

attractively valued shares. It is a moderate scheme that promises medium risks

and medium returns along with medium portfolio turnover. Its investment strategy

includes investment across sectors to take advantage of lower valuation of

companies with high growth potential and a consistent track record over a longer

period of time.

Elephant

Elephant aims to generate steady returns over a longer investment horizon by

investing in securities selected from the BSE 100 and NSE 100 indices. This

plan is suitable for the low risk and low return investor with a strategy to invest in

blue chip companies, as these companies have steady performance and reduced

liquidity risk in the market. The plan identifies and selects stocks with long-term

growth prospects trading at modest relative valuations.

Caterpillar

Caterpillar aims to achieve capital appreciation over a long period of time by

investing in a diversified portfolio. The scheme offers high risks and high returns

but with a low portfolio turnover. Its investment strategy includes investment in

shares which are poised to receive a re-rating due to a change in business, potential

attractiveness for a particular sector in the future or business diversification

leading to a better operating performance. The scheme identifies and selects

stocks in the early stages of an upturn and in sectors currently ignored by the market.


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Leo

Leo is aimed at retail customers and structured to provide medium to long-term

capital appreciation by investing in stocks across the market capitalization range.

This scheme is a mix of moderate and aggressive investment strategies. Its aim is

to have a balanced portfolio comprising selected investments from both

Tortoise and Panther. Exposure to derivatives is taken within permissible

regulatory limits.

International Advisory

International Advisory Fund Management Services (AFMS) - A new horizon for

international investments: -

They provide their wealth clients an opportunity to

invest in international financial instruments (currently limited to the US). Equities,

Mutual Funds and Debts are some of the key instruments available and the clients

have the option to choose from various asset allocation modules.

Why Invest Overseas?

Avenues for enhancing returns, minimizing risk and portfolio

diversification Global outreach of opportunities Pre-approved route for

resident individuals to invest (Healthy Govt. Patronage and favorable regulatory

developments)

Institutional Broking Services:-

The mission of this division is to

institutionalize and implement a process driven approach to cater to the needs of

leading corporate houses and institutions.


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The division would like to be seen as a one stop investment gateway and

knowledge repository for its clients servicing their unique and sophisticated

needs. The division is structured as a separate SBU and is housed out of

Mumbai, manned by a small yet fleet footed and extremely skilled group of top

notch professionals drawn from the best in the industry.

The key highlights of our service platter are:

Highly skilled, dedicated dealing, research and sales teams Dealingcapabilities on the NSE, BSE and in the cash and derivatives segment In-depth,detailed and insightful coverage of more than 60 stocks across diverse sectors. Thesectors covered are FMCG, Hotels, Media, Pharma, Auto, Cement, Steel pipes,Logistics, Telecom, Construction and much more.

Investment Banking:-

Their investment banking professionals maintain

relationships with businesses, private equity firms, other financial

institutions and high net worth individuals and provide them with corporate

finance and investment banking advice. They have divided our investment banking

business into merchant banking and transaction advisory services. Their

investment banking services are being expanded to include underwriting public

equity offerings, mergers and acquisitions advisory services, corporate

restructuring services, placement of private debt and equity offerings and rendering

general investment banking and transaction advisory services.

They provide innovative, integrated and best-fit solutions totheir corporate customers. It is continuous endeavor to provide value enhancement

through diverse financial solutions on an ongoing basis, through offerings like

Corporate Debt, Private Equity,

IPO, ECB, FCCB, GDR/ADR etc.


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Investment Banking with Religare offers

the following services:

Corporate Finance

they focus on finding right and relevant partners for their

clients , who not only help in adding value but also improve the future valuation of

the organization. We specialize in structured financing and providing advisory

services related to financial planning, modeling and advising on financial

requirements.

Corporate finance products offered by they:

Placement of Debt

Syndication of Domestic Loan / Foreign Currency Loan

Securitization

Debt Swap & Loan Restructuring

Short Term Corporate Debt

Working Capital (Cash Credit & Short term Loan)

Capital Market Instruments

Overseas Acquisition

Placement of Equity (Private Equity)

Both for listed and unlisted companies

Merchant Banking

IPO/FPO/RIGHTS

Mergers & Acquisitions

Corporate Advisory Services

ADR/GDR/FCCB

BUY BACK OF SHARES


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ORGANIZATIONAL STRUCTURE


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ORGANIZATIONAL STRUCTURE


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Mutual funds and insurance:-

In addition to the products and

services offered by Religare securities a separate section is present in the

branch Which handles distribution of mutual funds, life and non-life

products. The employees of Religare securities are equipped with the

knowledge of other products present in Religare enterprise limited

FUNCTIONS OF DEPARTMENTS

DEPOSITORY PARTICIPANT SERVISES:

FRONT OFFICE:

In front office the following services are done.

shares to physical form

BACK OFFICE:

Maintenance of all demat accounts. Giving intimation relatedto the due of AMC.s to their account holders. Sends quarterly information to theholders related to the holdings.


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MARKETING:

In this department where the demat account is

marketed, marketing executives are seeks for prospective customers, they helps in

opening of an account and provide other door to door services.

ACCOUNTS:

1. Maintaining the purchases stores department.

2. Internal auditing.

3. Payments and receipts.

MUTUAL FUNDS:-

MARKETING

Religare has mainly under taken the distribution of financial

products at commission basis; part of this mutual fund marketing is also one of the

functions. In these functions executives sells almost all the mutual fund

schemes.

Executives market the mutual fund schemes by

1 direct selling

2. Telemarketing


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INSURANCE

MARKETING:

Religare markets all companies life and non-lifeinsurances products Such as ICICI, BIRLA SUNLIFE, TATA AIG, LICetc.

Executives market the insurance products by

1. Direct marketing

2. Tele marketing

BACK OFFICE:

In this department it maintains the necessary records of theclients insurance and mutual funds which are taken by the Religare


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SWOT ANALYSIS


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Strengths

Regional management for retail branch network

Geographical distribution with deep penetration in India

Diversified product portfolio

Distinctive expertise with focused servicing model

Geared to address the competitive challenges of discount

brokerage through online investment portal

Weakness:

Insufficient Advertisement policyNot well known

Less human resource

Opportunities:

Increase in the number of investors entering the stock

market Growing IPO issues

Can make of technology to market product (e-selling).

Threats:

Existing Competitors

Market Uncertainty

Broad economic factors like inflation etc.


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SUGGESTIONS AND RECOMMENDATIONS

1) Giving Multi department skill, Multi work skill training

to employees in order to give the tough competition to competitors and

also employees become more skilled.

2) Competitors like Karvy, Indiabulls, etc. are known better

than Religare. The company lacks publicity. A good portion of the

general public is not quite aware of the existence of such an investmentfirm like Religare, which caters to most of the available

investing instruments. The company could undertake promotional

activities with the general public as the target group. They could

make aware of the services they render to the public. This could attract

new customers which can be transformed into a long lasting relationship?

This could be put into action by having print advertisements in papers like

The Economic Times, Business Line, and Financial Express etc.

Advertisement in CNBC-India could give a very good brand image to the

company.

3) The company acts as a mediatory for most of the

investment options. It gives people access to a wide variety of mutual

funds, Insurance schemes etc for third party companies. The company canstart its own mutual fund and start investing in stocks, debts and

government securities. It has a special and dedicated Research Desk

who is into constant monitoring of the share markets. It can take

advantage of this and start a separate mutual fund. People will have good

confidence in this and the business can also be profitable.


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4) As presently the human resource is less compared to

competitors, the operations of the branch can be increased by increasing

the human resource.


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BIBILOGRAPHY:

.

www.religare.in


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PART B

RISK AND RETURN ANALYSIS OF

MUTUAL FUNDS


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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 different mutual

fund schemes is to analyze the performance of mutual funds by using

risk, return as a parameter.

Historical data were taken for calculating risk, return. Analysis has done on

percentage method for comparing 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 new clients who want to invest in

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.


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INTRODUCTION TO MUTUAL FUND

Background of the study

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.The end of millennium marks 40 years of existence of mutual funds in this

country.The ride through these 40 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 Mutual Fund

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


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Those securities are professionally managed on behalf of

the shareholders, and each investor holds a prorate 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 investorsoperating 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. 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.

Schemes of Mutual funds.

(1) 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.


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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 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.

(2) 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 fund shave 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.


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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:

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 offluctuations 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-banks 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.


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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 weight age comprising of an index. NAV.s ofsuch 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

"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).


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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.

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:-

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 rupeesin 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.


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4. Convenience and Flexibility:-

You own just one security rather than many, yet enjoy the benefit 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 orbusiness 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.


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8. Life Cycle Planning:-

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 moveto 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 placeyour 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.


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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.

13. Automatic Direct Deposit:-

You can usually arrange to have regular, third-party payments such asSocial 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 record keeping 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.


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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, notmutual 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 funds 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,


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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 trust someone else with your money

when you invest in a mutual fund.

6. Trading Limitations:-

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.


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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 is strict rulesabout 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,

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.


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Risk Involved in Mutual Funds

All investments involve some form of risk, which should be evaluated them

potential rewards when an investment is selected.

Managing risk At times the prices or yields of all the securities

in a particular market rise or fall due to broad outside influences. When this

happens, the stock prices of both an outstanding, highly profitable companyand a fledgling corporation may be affected. This change in price is due to

market risk.

Interest rate risk sometimes referred to as .loss of purchasing

power.Whenever inflation sprints forward faster than the earnings on your

investment, you run the risk that you will actually be able to buy less, not more.

Inflation risk also occurs when prices rise faster than your returns.

Credit risk in short, how stable is the company or entity to

which you lend your money when you invest? How certain are you that it will be

able to pay the interest you are promised, or repay your principal when the

investment matures?

Inflation risk Changing interest rates affect both equities and

bonds in many ways. Investors are reminded that .predicting. Which way rates will

go is rarely successful. A diversified portfolio can help in offsetting these changes.

Effect of loss of key professional and inability to adopt an industry.


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Key asset is often the personnel who run the business i.e. intellectual

properties of the key employees of the respective companies. Given the ever-

changing complexion of few industries and the high obsolescence levels,

availability of qualified, trained and motivated personnel is very critical for thesuccess of industries in few sectors. It is, therefore, necessary to attract key

personnel and also to retain them to meet the changing environment and

challenges the sector offers. Failure or inability to attract/retain such qualified key

personnel may impact the prospects of the companies in the particular sector in

which the fund invests.

Exchange risks A number of companies generate revenues in

foreign Currencies and may have investments or expenses also denominated in

foreign currencies. Changes in exchange rates may, therefore, have a positive

or negative impact on companies which in turn would have an effect on the

investment of the fund.

Investment risks The sectoral fund schemes, investments will

be Predominantly in equities of select companies in the particular sectors.

Accordingly, the NAV of the schemes are linked to the equity

performance of such companies and may be more volatile than a more diversified

portfolio of equities.

Changes in government policy

Changes in Government policy especially in regard to the tax

benefits may impact the business prospects of the companies leading to an impact

on the investments made by the fund.


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Statement of the Problem

In the current economic scenario 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 at comparing mutual fund schemes in form their

risk, return &liquidity and also creating awareness about Mutual Fund Schemes

among the investors.

Objectives of the Study

Saving money is not enough. Each of us also need to invest ones savings

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

education of ones children, for buying a house, or for ones own golden years. But

the rapidly growing number of investment avenues often led to confusion.

Objectives of the study are to provide information to individual investors

regarding their risk, and choosing the best investment options to match theirgoals and attitude to risk.

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

2. Analyzing the performance of mutual fund schemes.

3. Provide information about pros and cons of investing in Mutual Funds.


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Scope of the study.

The project primarily deals with mutual funds, The study is limited to

compare different mutual fund schemes in respect of their risk, & return

The study covers 2 sectors (FMGC and infrastructure),Index Fund -

Sensex Plan and Midcap Fund 12 randomly selected mutual fund

schemes(3 for each segment) out of mutual fund industry in India for comparison.

The analysis is strictly based on unit price information. Other company

performance indicators are not considered. It focuses on every month ending

closing prices of during the period from1ST JUNE, 2004 to 31ST JUNE, 2007.

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


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Research Design

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 different

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 mutual fund

schemes.

Since it is not possible to compare all the 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 mutual fund industry in India.

Hence by stratified random sampling 12 mutual fund schemes out

of whole mutual fund industry were selected.

Mutual funds schemes were selected according to their weight age of

the FMGC, infrastructure midcap and sensex stocks in theportfolio of schemes. Monthly unit prices of the selected 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

JUNE, 2004 to 31ST JUNE, 2007.

Sample Design

1. Relative population: -mutual fund industry in India.

2. Sampling frame:-list of population, elements from which sample

is drawn


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3. Method of sampling: - stratified random sampling.

Stratification or division of population into homogeneous group

was done on the basis of mutual fund schemes.

4. Variables: - monthly calculated risk and returns were used for

comparing different mutual fund schemes

Sample Size:-12 mutual fund schemes were selected. Sample

Description:-


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Calculation of Return and Risk of Selected

Mutual Fund Schemes

Calculation ofrisk and return of FMGC funds ICICI

Prudential FMCG

R r1 r-r1 (r-r1)2

2007 June 11.11

2007 July 11.73 5.580558056 3.996363847 1.584194209 2.509671291

2007 August 12.72 8.439897698 3.996363847 4.443533851 19.74499309

2007 September 13.16 3.459119497 3.996363847 -0.53724435 0.288631492

2007 October 12.87 -2.20364741 3.996363847 -6.20001126 38.44013967

2007 November 15.18 17.94871795 3.996363847 13.9523541 194.668185

2007 December 16.72 10.14492754 3.996363847 6.148563689 37.80483544

2008 January 17.34 3.708133971 3.996363847 -0.28822987 0.0830764612008 February 17.52 1.038062284 3.996363847 -2.95830156 8.75154814

2008 March 18.06 3.082191781 3.996363847 -0.91417206 0.835710567

2008 April 18.85 4.374307863 3.996363847 0.377944016 0.142841679

2008 May 20.85 10.61007958 3.996363847 6.613715729 43.74123574

2008 June 21.48 3.021582734 3.996363847 -0.97478111 0.950198219

2008 July 24.21 12.70949721 3.996363847 8.71313336 75.91869294

2008 August 27.87 15.11771995 3.996363847 11.1213561 123.6845616

2008 September 29.72 6.637961966 3.996363847 2.641598119 6.978040623

2008 October 27.04 -9.01749663 3.996363847 -13.0138604 169.3605647

2008 November 29.96 10.79881657 3.996363847 6.802452721 46.27336302

2008 December 32.48 8.411214953 3.996363847 4.414851106 19.49091029

2009 January 34.1 4.987684729 3.996363847 0.991320882 0.982717091

2009 February 35.43 3.900293255 3.996363847 -0.09607059 0.009229559

2009 March 39.46 11.37454135 3.996363847 7.378177502 54.43750325

2009 April 40.4 2.382159149 3.996363847 -1.61420469 2.605656809

2009 May 36.8 -8.91089108 3.996363847 -12.9072549 166.59723

2009 June 33.25 -9.64673913 3.996363847 -13.6431029 186.1342589

2009 July 33.09 -0.48120300 3.996363847 -4.47756685 20.04860494

2009 August 36.75 11.06074343 3.996363847 7.06437958 49.90545885

2009 September 39.06 6.285714286 3.996363847 2.289350439 5.241125431

2009 October 38.71 -0.89605734 3.996363847 -4.89242119 23.93578515

2009 November 41.13 6.25161457 3.996363847 2.255250723 5.086155823

2009 December 40.47 -1.60466812 3.996363847 -5.60103197 31.371559162010 January 41.61 2.816901408 3.996363847 1.179462439 1.391131644

2010 February 39.42 -5.26315789 3.996363847 -9.25952174 85.73874289

2010 March 39.07 -0.88787417 3.996363847 -4.8842380 23.85578106

2010 April 38.74 -0.84463783 3.996363847 -4.84100167 23.43529723

2010 May 41.98 8.363448632 3.996363847 4.367084785 19.07142952

2010 June 42.45 1.119580753 3.996363847 -2.87678309 8.275880972

Total 3.996363847 Total 1497.790748

SD 6.450216939


69/98

Return=(P1/P0*100)-100

Where,

P1 = Current month price,P0 = Previous month price

R1= R/n,

where n=number of months.

R1= 3.9963638

SD=(R-R1)2/n

=1497.790748/36= 6.450216939

Risk and return of ICICI Prudential FMCG

Factor Percentage

Risk 6.450216939

Return 3.9963638


70/98

SBI Magnum Sector Umbrella FMCG

R r1 r-r1 (r-r1)2

2007 June 9.47

2007 July 10.16 7.286166843 1.363752338 5.922414505 35.074993572007 August 10.94 7.677165354 1.363752338 6.313413016 39.85918392

2007 September 11.3 3.290676417 1.363752338 1.926924079 3.713036406

2007 October 11.65 3.097345133 1.363752338 1.733592795 3.005343978

2007 November 13.36 14.67811159 1.363752338 13.31435925 177.2721622

2007 December 13.43 0.523952096 1.363752338 -0.83980024 0.705264447

2008 January 13.21 -1.63812360 1.363752338 -3.00187594 9.01125917

2008 February 13.61 3.028009084 1.363752338 1.664256746 2.769750517

2008 March 13.52 -0.66127847 1.363752338 -2.02503081 4.10074978

2008 April 13.5 -0.14792899 1.363752338 1.511681332 2.285180449

2008 May 14.58 8 1.363752338 6.636247662 44.03978303

2008 June 14.97 2.674897119 1.363752338 1.311144781 1.719100638

2008 July 16.47 10.02004008 1.363752338 8.656287742 74.93131748

2008 August 16.88 2.489374621 1.363752338 1.125622283 1.267025523

2008 September 17.33 2.665876777 1.363752338 1.302124439 1.695528056

2008 October 16.69 -3.69301788 1.363752338 -5.05677022 25.57092512

2008 November 17.3 3.654883164 1.363752338 2.291130826 5.24928046

2008 December 18.56 7.283236994 1.363752338 5.919484656 35.0402986

2009 January 19.91 7.273706897 1.363752338 5.909954559 34.92756289

2009 February 21.75 9.241587142 1.363752338 7.877834804 62.0602812

2009 March 15.72 -27.7241379 1.363752338 -29.0878902 846.1053603

2009 April 16.64 5.852417303 1.363752338 4.488664965 20.14811317

2009 May 13.83 -16.8870192 1.363752338 -18.2507715 333.0906629

2009 June 14.02 1.373825018 1.363752338 0.01007268 0.0001014592009 July 13.51 -3.63766048 1.363752338 -5.00141282 25.01413023

2009 August 14.23 5.32938564 1.363752338 3.965633302 15.72624749

2009 September 14.57 2.389318342 1.363752338 1.025566004 1.051785628

2009 October 14.81 1.647220316 1.363752338 0.283467978 0.080354094

2009 November 14.68 -0.87778528 1.363752338 -2.24153761 5.024490893

2009 December 14.34 -2.31607629 1.363752338 -3.67982863 13.54113876

2010 January 14.34 0 1.363752338 -1.36375233 1.859820439

2010 February 12.97 -9.55369595 1.363752338 -10.9174482 119.1906772

2010 March 13.07 0.771010023 1.363752338 -0.59274231 0.351343452

2010 April 13.62 4.208110176 1.363752338 2.844357838 8.090371511

2010 May 14.16 3.964757709 1.363752338 2.601005371 6.765228942

2010 June 13.85 -2.18926553 1.363752338 -3.55301787 12.62393602Total 1.363752338 Total 1972.96179

Sd 7.403005752


71/98

Return = (P1/P0*100)-100

Where,

P1= Current month price,

P0= Previous month price

R1= R/n,


R1= 1.363752338

SD = (R- R1)2/n

=1972.96179/36

=7.403005752

Risk and return of SBI Magnum Sector Umbrella -

FMCG Fund

Factor Percentage

Risk 7.403005752

Return 1.363752338


72/98

Franklin FMCG Fund

R r1 r-r1 (r-r1)2

2007 June 13.79

2007 July 14.31 3.770848441 2.754708549 1.016139891 1.032540279

2007 August 14.65 2.375960867 2.754708549 -0.37874768 0.143449807

2007 September 15.4 5.119453925 2.754708549 2.364745375 5.592020691

2007 October 14.97 -2.79220779 2.754708549 -5.54691634 30.7682809

2007 November 16.87 12.69205077 2.754708549 9.937342219 98.75077037

2007 December 18.12 7.409602845 2.754708549 4.654894296 21.66804091

2008 January 18.74 3.421633554 2.754708549 0.666925005 0.444788962

2008 February 19.34 3.201707577 2.754708549 0.446999028 0.199808131

2008 March 19.62 1.447776629 2.754708549 -1.30693192 1.708071045

2008 April 19.68 0.305810398 2.754708549 -2.44889815 5.997102158

2008 May 21.56 9.552845528 2.754708549 6.798136979 46.21466639

2008 June 22.41 3.942486085 2.754708549 1.187777536 1.410815475

2008 July 24.05 7.318161535 2.754708549 4.563452986 20.82510315

2008 August 26.26 9.189189189 2.754708549 6.43448064 41.4025411

2008 September 27.98 6.549885758 2.754708549 3.795177208 14.40337004

2008 October 25.87 -7.54110078 2.754708549 -10.2958093 106.0036899

2008 November 28.32 9.470429068 2.754708549 6.715720519 45.10090209

2008 December 30.07 6.179378531 2.754708549 3.424669982 11.72836448

2009 January 31.89 6.052544064 2.754708549 3.297835514 10.87571908

2009 February 33.83 6.083411728 2.754708549 3.328703178 11.08026485

2009 March 37.05 9.518179131 2.754708549 6.763470581 45.74453431

2009 April 38.34 3.481781377 2.754708549 0.727072827 0.528634896

2009 May 33.58 -12.4152321 2.754708549 -15.1699406 230.1271003

2009 June 32.95 -1.87611673 2.754708549 -4.63082528 21.444542832009 July 32.76 -0.57663125 2.754708549 -3.3313398 11.09782492

2009 August 34.76 6.105006105 2.754708549 3.350297556 11.22449371

2009 September 35.5 2.128883774 2.754708549 -0.62582477 0.391656649

2009 October 35.92 1.183098592 2.754708549 -1.57160995 2.46995786

2009 November 35.52 -1.11358574 2.754708549 -3.86829429 14.96370076

2009 December 34.91 -1.71734234 2.754708549 -4.47205089 19.99923918

2010 January 35.57 1.890575766 2.754708549 -0.86413278 0.746725467

2010 February 33.33 -6.29744166 2.754708549 -9.05215021 81.94142349

2010 March 32.59 -2.22022202 2.754708549 -4.97493057 24.74993419

2010 April 33.36 2.362687941 2.754708549 -0.39202060 0.153680157

2010 May 35.57 6.62470024 2.754708549 3.86999169 14.97683568

2010 June 34.98 -1.65870115 2.754708549 -4.4134097 19.4781852Total 2.754708549 Total 975.3887794

Sd 5.205202471


73/98

Return = (P1/P0*100)-100

Where,



R1= R/n,


R1= 2.754708549

S=(R-R1)2/n

=975.3887794

= 5.205202471

Risk and return of Franklin FMCG Fund

Factor Percentage

Risk 5.205202471

Return 2.754708549

Average risk and return of FMGC FUNDS

NAME RISK RETURN

ICICI Prudential 3.996363847 6.450216939

SBI Magnum Sector

Umbrella - FMCG 7.403005752 1.363752338

Franklin FMCG Fund 5.205202471 2.754708549

AVG 6.352808387 2.704941578


74/98

FINDINGS:-

Sbi magnum sector umbrella-FMGC has the highest risk factor of 7.4/month

Icici prudential FMCG has the highest return of 3.99/month

Calculation of risk and return of infrastructure

ICICI Prudential Infrastructure

R r1 r-r1 (r-r1)2

2008 September 10.73

2008 October 9.66 -9.97204100 2.355218603 -12.3272596 151.9613295

2008 November 10.83 12.11180124 2.355218603 9.756582639 95.1909048

2008 December 11.67 7.756232687 2.355218603 5.401014084 29.17095314

2009 January 12.68 8.654670094 2.355218603 6.299451491 39.68308909

2009 February 13.18 3.943217666 2.355218603 1.587999063 2.521741023

2009 March 13.71 4.02124431 2.355218603 1.666025707 2.775641655

2009 April 15.04 9.700948213 2.355218603 7.34572961 53.9597435

2009 May 12.98 -13.6968085 2.355218603 -16.0520271 257.6675745

2009 June 12.04 -7.24191063 2.355218603 -9.59712923 92.10488955

2009 July 12.46 3.48837209 2.355218603 1.13315349 1.284036832

2009 August 13.82 10.91492777 2.355218603 8.559709166 73.26862101

2009 September 14.04 1.591895803 2.355218603 -0.7633228 0.582661697

2009 October 14.77 5.199430199 2.355218603 2.844211597 8.089539606

2009 November 15.78 6.838185511 2.355218603 4.482966908 20.0969923

2009 December 16.03 1.584283904 2.355218603 -0.77093469 0.59434031

2010 January 16.63 3.742981909 2.355218603 1.387763306 1.925886994

2010 February 15.13 -9.01984365 2.355218603 -11.3750622 129.3920414

2010 March 13.71 -9.38532716 2.355218603 11.74054577 137.8404149

2010 April 14.91 8.7527352 2.355218603 6.397516627 40.92821899

2010 May 15.89 6.572769953 2.355218603 4.21755135 17.78773939

2010 June 16.51 3.901825047 2.355218603 1.546606444 2.391991494Total 2.355218603 Tota 1159.218352

SD 7.429729059


75/98

Return = (P1/P0*100)-100Where,

P1= Current month price,P0= Previous month priceR1= R/n,


R1= 2.355218603

SD = (R- R1)2/n

= 1159.218352/21

= 7.429729059

Risk and return of ICICI Prudential InfrastructureFund

Factor Percentage

Risk 7.429729059

Return 2.355218603


76/98

Birla Infrastructure Fund

R r1 r-r1 (r-r1)2

2009 March 10.41

2009 April 10.99 5.571565802 2.11677123 3.454794572 11.935605542009 May 9.83 -10.5550500 2.11677123 -12.6718212 160.5750544

2009 June 8.94 -9.05391658 2.11677123 -11.1706878 124.7842662

2009 July 9.02 0.894854586 2.11677123 -1.22191664 1.493080284

2009 August 9.9 9.756097561 2.11677123 7.639326331 58.35930679

2009 September 10.77 8.787878788 2.11677123 6.671107558 44.50367605

2009 October 11.23 4.271123491 2.11677123 2.154352261 4.641233666

2009 November 12.08 7.569011576 2.11677123 5.452240346 29.72692479

2009 December 12.09 0.082781457 2.11677123 -2.03398977 4.137114396

2010 January 12.33 1.985111663 2.11677123 -0.13165956 0.017334242

2010 February 11.37 -7.78588807 2.11677123 -9.9026593 98.06266136

2010 March 11.3 -0.61565523 2.11677123 -2.73242646 7.466154375

2010 April 12.28 8.672566372 2.11677123 6.555795142 42.978449942010 May 13.06 6.351791531 2.11677123 4.235020301 17.93539695

2010 June 13.82 5.819295559 2.11677123 3.702524329 13.70868641

Total 2.11677123 Total 620.3249454

SD 6.43078505

Return = (P1/P0*100)-100

Where,



R1= R/n,

Where n=number of months.

R1= 2.11677123

SD = (R- R1)2/n

= 620.3249454/15

= 6.43078505


77/98

Risk and return of Birla Infrastructure Fund

FactorPercentage

Risk 6.43078505

Return 2.11677123


78/98

Tata Infrastructure Fund

Return = (P1/P0*100)-100

Where, p1= Current month price,


R1= R/n,

R r1 r-r1 (r-r1)2

2008 January 10.06

2008 February 10.54 4.771371769 3.708737375 1.062634395 1.1291918562008 March 10.59 0.474383302 3.708737375 -3.23435407 10.46104627

2008 April 10.74 1.416430595 3.708737375 -2.29230678 5.254670373

2008 May 11.22 4.469273743 3.708737375 0.760536368 0.578415567

2008 June 11.19 -0.26737967 3.708737375 -3.97611705 15.80950683

2008 July 11.99 7.149240393 3.708737375 3.440503018 11.83706102

2008 August 13.04 8.757297748 3.708737375 5.048560373 25.48796184

2008 September 14 7.36196319 3.708737375 3.653225815 13.34605886

2008 October 12.55 -10.3571428 3.708737375 -14.0658802 197.8489867

2008 November 14.22 13.30677291 3.708737375 9.598035534 92.1222861

2008 December 14.97 5.274261603 3.708737375 1.565524229 2.45086611

2009 January 16.78 12.09084836 3.708737375 8.382110989 70.25978462

2009 February 17.4 3.694874851 3.708737375 -0.01386252 0.000192172009 March 19.91 14.42528736 3.708737375 10.71654998 114.8444435

2006 April 21.74 9.191361125 3.708737375 5.48262375 30.05916319

2009 May 19.09 -12.1895124 3.708737375 -15.8982497 252.7543465

2009 June 17.68 -7.38606600 3.708737375 -11.0948033 123.094662

2009 July 17.55 -0.73529411 3.708737375 -4.44403149 19.74941591

2009 August 19.35 10.25641026 3.708737375 6.547672882 42.87202016

2009 September 20

religare final 00012 chk

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