Indu finance

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CHAPTER 1

INTRODUCTION

1.1INDUSTRY PROFILE

A Mutual Fund is a trust that pools the savings of a number of
investors who share a common financial goal. The money thus collected is
then invested in capital market instruments such as shares, debentures and
other securities. The income earned through these investments and the
capital appreciation realized are shared by its unit holders in proportion to
the number of units owned by them. Thus a Mutual Fund is the most suitable
investment for the common man as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at a relatively low
cost. The flow chart below describes broadly the working of a mutual fund:

Mutual Fund Operation Flow Chart

1.1.1 ORGANIZATION OF A MUTUAL FUND

2

There are many entities involved and the diagram below
illustrates the organizational set up of a mutual fund:

1.1.2 ADVANTAGES OF MUTUAL FUNDS
• Professional Management

• Diversification
• Convenient Administration
• Return Potential
• Low Costs
• Liquidity
• Transparency
• Flexibility
• Choice of schemes
• Tax benefits

• Well regulated

1.1.3 TYPES OF MUTUAL FUND SCHEMES

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Wide variety of Mutual Fund Schemes exists to cater to the needs
such as financial position, risk tolerance and return expectations etc. The
table below gives an overview into the existing types of schemes in the
Industry.

1.1.4 TERMS USED IN MUTUAL FUND

Net Asset Value (NAV)

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Net Asset Value is the market value of the assets of the scheme minus
its liabilities. The per unit NAV is the net asset value of the scheme divided
by the number of units outstanding on the Valuation Date.

Sale Price

Is the price we pay when we invest in a scheme. Also called Offer
Price. It may include a sales load.

Repurchase Price

Is the price at which a close-ended scheme repurchases its units and it
may include a back-end load. This is also called Bid Price.

Redemption Price

Is the price at which open-ended schemes repurchase their units and
close-ended schemes redeem their units on maturity. Such prices are NAV
related.

Sales Load

Is a charge collected by a scheme when it sells the units. Also called,
‘Front-end’ load. Schemes that do not charge a load are called ‘No Load’
schemes.

Repurchase or ‘Back-end’ Load

5

Is a charge collected by a scheme when it buys back the units from the
unit holders.

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1.2 COMPANY PROFILE

KRISH FINANCE, is a premier integrated financial services
provider. Krish finance has a professional management team and ranks
among the best in technology, operations and research of various industrial
segments.

The group of professionals founded the parent company in 2002 and
today it has evolved as integrated financial service company of repute,
offering various financial services to suit every requirement/ need by
investors. By virtue of its access to million of Indian share holders, in
addition to companies banks and financial institutions. Krish finance has
been in the process built up a positive reputation with regulatory authorities
and other government agencies emphasis on the following factors has been
instrumental in helping them attain the leadership in the financial service
sector.

Financial services provided by Krish finance:

1. Stock broking
2. Depository Participants
3. Distribution of financial products
o Mutual funds,
o Bonds,
o Fixed deposit,
o Equities,

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4. Insurance Broking
5. Commodities Broking
6. Personal Finance Advisory Services
7. Merchant Banking & Corporate Finance
8. Placement of equity
9. IPO’s

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Quality Policy

To achieve and retain leadership, Krish finance shall aim for complete
customer satisfaction, by combining its human and technological resources,
to provide superior quality financial services. In the process, Krish finance
will strive to exceed Customer's expectations.

Quality Objectives:

1. Build in-house processes that will ensure transparent and harmonious
relationships with its clients and investors to provide high quality of
services.
2. Establish a partner relationship with its investor service agents and
vendors that will help in keeping up its commitments to the customers.
3. Provide high quality of work life for all its employees and equip them
with adequate knowledge & skills so as to respond to customer's needs.
4. Continue to uphold the values of honesty & integrity and strive to
establish unparalleled standards in business ethics.
5. Use state-of-the art information technology in developing new and
innovative financial products and services to meet the changing needs of
investors and clients.
6. Strive to be a reliable source of value-added financial products and
services and constantly guide the individuals and institutions in making a
judicious choice of it.
7. Strives to keep all stake-holders (shareholders, clients, investors,

employees, suppliers and regulatory authorities) proud and satisfied.

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CHAPTER II

STATEMENT OF THE PROBLEM, SCOPE OF THE STUDY,
OBJECTIVES, LIMITATIONS AND METHODOLOGY OF THE
STUDY

2.1 STATEMENT OF THE PROBLEM

Mutual funds pool the funds of small investor and invest it in the
securities. As the investors do not know in which portfolio the fund
managers will go investment, the performance such as the risk and the return
associated with each fund type will only affect the investor. Here the risk
associated with each type will vary, hence the return will also vary. Since the
investors are investing based on the scheme category such as private or
public sector funds.

Costs are the biggest problems with mutual funds. These costs eat into
our return and they are the main reason why the majority of funds reason
why the majority of funds end up with sub par performance. Some cities of
the industry say that mutual funds companies get away with the fees they
charges only the average investors does not understand what he/she is
paying for: fees can be broken allow into two categories.

1. On going yearly fees to keep is invested in the fund.
2. Transaction fees paid when we buy or sell shares in a fund.

2.2 SCOPE OF THE STUDY

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This study was undertaken with the existing mutual funds in the
websites. These funds are already used by the researcher for the analysis.

This study covers various schemes for analysis. They are Escorts
mutual fund, GIC mutual fund, JM mutual fund, Kotak mutual fund, ING
Vysya mutual fund, Taurus mutual fund, Reliance mutual fund.

2.3 OBJECTIVES OF THE STUDY

The analysis on the performance of private and public sector mutual
funds is made with

2.3.1 Primary Objective

To compare the public sector and private sector mutual fund
performance.

2.3.2 Secondary Objectives

1. To evaluate the performance of the funds based on market risk.
2. To increase returns on the portfolio through successful prediction of

future securing prices.
3. To protect a company’s current earnings from competitive pressure
through economic moat.
4. To provide a steady cash flow to investors.

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5. To evaluate the performance of the funds based on total risk.

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2.4 LIMITATIONS OF THE STUDY

• Analysis and interpretation is only based on the open - end schemes.
• Dividend schemes were not taken into consideration in this study.
• This study considers the period between 2008-2010 and before and
after this period were not taken into consideration.
• The analysis and interpretation of the fund is based only on the past
performance.

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2.5 METHODOLOGY OF THE STUDY

The present study was conducted at Krish finance Private Limited
using the secondary data. The main sources of secondary data are obtained
from company websites. Informal discussions were made with the industry
staff. During the course of discussions the staff expresses their opinions
regarding the funds.

2.5.1 Data collection method

Secondary data were used for analyses such as (NAV) and
performance of various schemes of the asset management companies.

The net asset value (NAV) of the funds were collected from various
websites. The benchmark indices were collected from the respective
company’s fact sheets and also from the company’s common application
forms.

2.5.2 Research design

"Analytic", it is important to clearly identify the objectives of the
study (preferably identifying the specific parameters to be measured –
see Rothman and Greenland) and the rationale (i.e., the case for
conducting the research). There are innumerable decisions, judgments,
and compromises that must be made during the design, conduct,
analysis, and interpretation of a study, and the principal guideposts for
making them are the study objectives and rationale. For example, if
the objective is to test hypotheses,

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2.6 TOOLS USED FOR ANALYSIS

Sharpe, Treynor and Jensen Method

Portfolio performance was measured mostly in terms of returns in
early days, though there was an awareness of the concept of risk, which was
difficult to quantify. Risk could not be incorporated in evaluation, as there
was no measures that combined both return and risk. Returns on portfolios
performance are Sharpe Ratio, Treynor measure and Jensen measure. These
are absolute measure of portfolio performance that can be used to rank
different portfolios.

2.6.1 RETURN

For each mutual fund scheme under study, the monthly returns are
computed as:

NAVt − NAVt −1
Ri =
NAVt _ 1

2.6.2 AVERAGE

R = ΣRi / n

I = 1,2,3 …………….. n

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2.6.3 RISK

Standard deviation : Measurement of Total Risk

Financial analysts and statisticians prefer to use a quantitative risk
surrogate called the clash of returns, denoted by αI.

The standard deviation and he variance are equally acceptable and
equivalent quantitative measures of an asset’s total risk. The variance and
standard deviation are computed from logarithmic monthly returns.

[( )
σI = Σ Ri − R / n
2
]
1/ 2

2.6.4 BETA

Measurement of Systematic Risk

To obtain the measure of systematic risk (Beta) of the mutual fund
scheme, Market Model is applied.

NΣ XY − EΣ ΣY
β =
NΣX 2 − (ΣX) 2

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2.6.5 RISK-LESS ASSET

By definition, a risk less asset has zero variability of returns. If an
investor buys an asset at the beginning of the holding period with the known
terminal value, such type of asset can be called as risk-less or risk free asset.
Government securities and nationalized bank deposits fall under this
category. As the government securities are not easily available to the
common man, we take the nationalized bank deposits as the risk free asset
and the interest rate on such deposits are considered as risk free return.

2.6.6 SHARPE RATIO

This is a measure of risk-adjusted return on a portfolio. It is a ratio of
excess return to the standard deviation of portfolio returns. An implicit
assumption of the Sharpe ratio is that the portfolio is not combined with
other risky portfolios. It is relevant for performance evaluation when
comparing mutually exclusive portfolios.

The Sharpe measure follows his earlier work on capital asset pricing
model (CAPM) dealing specifically with capital market line (CML).

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The Sharpe measure of performance denoted by S is given by

Ri − Rf
S =
σi

Where,

Ri = the average rate of return on portfolio ‘i’ during a specified time
period.
Rf = the average rate of return on a risk free investment during the same
period

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2.6.7 TREYNOR MEASURE

This is also a measure of risk-adjusted return on a portfolio. It is a
ratio of excess return to the systematic risk (β) of the portfolio. It is relevant
for performance measurement when evaluating portfolios separately or in
combination with other portfolios. A high treynor measure indicated a
favourable relationship between risk and return on the portfolio.

Sharpe Ratio and Treynor measure give the same results in the case of
highly diversified portfolios as the total risk of portfolios approaches that of
a market portfolio.

Ri − Rf
T =
β

Where,

Ri = the average rate of return on portfolio ‘i' during a specified time
period.
Rf = the average rate return on a risk free investment during the same
period.
β = the slope of the fun’s characteristic line during that time period (this
indicates portfolio’s relative volatility with respect to market portfolio).

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A larger ‘T’ value indicates a better portfolio performance for all
investors regardless of their risk performances. The numerator of this ratio
(Ri-Rf) is the risk premium and the denominator is a measure of market risk.
The Treynor measure is risk premium per unit of systematic risk.

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2.6.8 JENSEN’S ALPHA

This is the difference between a fund’s actual return and the return on
a benchmark portfolio with the same systematic risk (β) of the portfolio
whose performance is being valuated. It measures the ability of active fund
management to earn returns in excess of the reward for market risk. We can
infer meaningful results if it is used to compare two portfolios with similar
betas.

Jensen’s measure is also based on capital asset pricing model. CAPM
estimates the expected return on any security or portfolio by the following
expression:

E (Ri) = Rf + βi [E(Rm-Rf)

Where,

E (Ri) = expected return on security or portfolio I

Rf = Risk free return
βI = Systematic risk (beta) of security

E (Rm) = expected return on the market portfolio I

Jensen’s alpha (α) is defined as:

Ri – Rf = αI + βI (Rm-Rf) + εI

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The value of ‘aj’ suggests whether the portfolio manager possesses
superior (inferior) market timing and stock selection skills. A positive (α) is
an indication of superior fund management ability.

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CHAPTER III

REVIEW OF LITERATURE

We cannot find only project on the comparison of the various types of
funds. But a related project is found, the fund families being rated on their
performance. This study was done by value research.

3.1 METHODOLOGY OF THE STUDY

Methodology is a way to systematically solve the research problem. It
explains the various steps that are generally adopted by the researcher in
studying the research problems along with the logic behind it.

3.2 RESULTS OF THE STUDY

The rating scores of a fund house majority of whose funds are un-
rated may not depict the complete story.

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EQ Dbt Hybrid ST
Escort Growth plan 12 - - 17
Escort income bond 6 4 13 6
Escort Income Plan 14 19 - 17
GIC Growth Plus II 22 21 14 1
Escort Tax Plan 10 10 - 21
GIC DMAT - 20 - 5
Taurus star share 5 3 6 12
LIC MF Equity Fund 11 1 7 -
LIC Bond Fund 4 5 1 7
LIC MF Govt. Security Fund 16 25 8 24
Escort Balanced Fund 2 9 2 23
Kotak Gilt Fund - 22 - 14
GIC Opportunity Fund 23 23 17 3
GIC Fortune 94 19 11 4 18
JM Equity Fund 15 2 5 8
Kotak Bond Fund 21 16 10 4
ING Financial 9 6 15 9
JM Balanced Fund 8 8 9 19
JM Basic Fund 1 14 - 16
Kotak Tech 20 24 - 2
Kotak MNC 18 15 16 11
LIC - MF Growth Fund - 17 - 22
Reliance Retail Plan Fund 3 7 3 20

It concusses, that Reliance Equity fund is performing well, and Escort
mutual fund is doing good in case of debt funds is performing well in hybrid
funds. In short term funds, LIC mutual funds performance is good.

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CHAPTER IV
DATA ANALYSIS AND INTERPRETATION

Table 4.1
Escorts Growth Plan

2008 2009 2010
Month
Return Index Return Index Return Index
Jan 2.654 3.645 1.615 4.986 12.003 3.187
Feb 2.624 0.637269 3.212 2.078 8.251 2.290
Mar 5.967 7.78365 6.712 3.636 7.997 2.355
Apr 2.476 3.91725 0.984 0.386 5.707 7.890
May 6.078 9.293456 12.282 16.583 10.699 8.805
Jun 7.791 11.55789 0.757 0.081 3.067 5.426
Jul 4.644 5.869298 7.607 5.973 10.888 5.262
Aug 10.761 13.31084 3.626 0.128 6.665 2.756
Sep 3.140 3.696144 5.150 6.963 3.895 7.624
Oct 15.648 9.291876 0.870 0.390 10.739 10.198
Nov 1.329 1.621901 6.262 9.221 7.754 12.835
Dec 9.519 14.45042 10.559 7.039 7.382 4.974

S.D 6.22 6.33 6.23
Beta 0.772 0.842 0.401

Sharpe 5.26 0.01 0.34
Treynor 7.64 0.05 5.62
Jensen 0.36 3.75 5.72
Correlatio
n 0.91 0.93 0.08

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INTERPRETATION

In Sharpe method, the Escorts Growth plan 2008 Portfolio has
higher return than other portfolio. That means the company performs better
fund in the year 2008.

In Treynor’s method, the Portfolio of 2008 has higher return than
other portfolio.

In Jensen’s method, the Portfolio of 2010 has higher return than
other portfolio.

It is known from the correlation that the relationship between the
Escorts Growth plan stock return and stock market index return is high in
2009.

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Table 4.2
Escorts Income Bond

2008 2009 2010
Month
Jan 0.054 1.368 2.584 1.165 2.039 0.232
Feb 0.843 0.361 0.370 0.003 0.462 0.375
Mar 3.040 0.198 0.445 0.507 1.401 0.363
Apr 1.699 0.856 1.030 0.164 2.427 0.372
May 2.594 1.304 1.419 0.068 4.369 0.361
Jun 5.574 0.744 1.205 0.701 0.779 0.418
Jul 0.091 0.274 0.066 1.423 2.977 0.728
Aug 2.508 1.394 1.402 0.697 1.555 0.960
Sep 0.704 1.775 3.221 0.355 0.057 0.279
Oct 0.157 0.134 1.404 1.138 3.226 0.444
Nov 4.202 0.405 2.102 0.135 1.736 0.765
Dec 3.586 0.391 7.761 0.230 1.762 0.450

S.D 2.38 2.77 2.31
Beta 0.302 0.725 2.582

Sharpe 3.39 6.41 16.21
Treynor 7.17 6.28 2.16
Jensen 0.32 5.01 14.95
Correlation 0.08 0.19 0.40

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INTERPRETATION

In Sharpe method, the Escorts Income Bond 2010 Portfolio has
higher return than other portfolio. That means the company performs better
fund in the year 2010.

other portfolio.

other portfolio.

stock return and stock market index return is high in 2010.

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Table 4.3
Escorts Income Plan

2008 2009 2010
Month
Jan 0.803 5.299 0.228 5.360 0.391 2.714
Feb 0.464 0.768 0.666 1.769 0.566 2.107
Mar 1.205 7.617 0.865 4.361 0.400 2.339
Apr 1.579 5.105 0.363 1.294 0.374 7.987
May 1.044 7.300 0.275 16.024 0.416 8.911
Jun 0.612 11.722 0.127 0.153 0.324 6.374
Jul 0.580 4.878 0.174 6.187 0.214 4.539
Aug 0.490 13.448 0.448 0.445 0.328 2.873
Sep 0.546 2.991 0.147 6.729 0.402 8.133
Oct 0.502 9.505 0.232 0.662 0.353 9.852
Nov 0.856 0.849 0.526 8.958 0.427 11.124
Dec 1.324 13.398 0.435 6.037 0.110 5.098

S.D 0.37 0.27 0.11
Beta 0.018 0.005 0.001

Sharpe 0.83 0.86 0.88
Treynor 3.47 1.44 6.90
Jensen 0.94 0.37 0.36

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INTERPRETATION

In Sharpe method, 2010 Portfolio has higher return than other
portfolio. That means the company performs better fund in the year 2010.

other portfolio.

other portfolio.


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Table 4.4

Escorts Tax Plan

2008 2009 2010
Month
Jan 3.762 5.299 1.491 5.360 1.206 2.714
Feb 4.959 0.768 4.517 1.769 5.135 2.107
Mar 5.904 7.617 5.714 4.361 5.792 2.339
Apr 2.851 5.105 0.306 1.294 6.441 7.987
May 6.628 7.300 16.432 16.024 6.963 8.911
Jun 8.696 11.722 1.583 0.153 4.078 6.374
Jul 5.421 4.878 6.676 6.187 7.712 4.539
Aug 12.412 13.448 2.581 0.445 5.382 2.873
Sep 2.413 2.991 3.226 6.729 9.789 8.133
Oct 15.191 9.505 0.003 0.662 9.193 9.852
Nov 1.357 0.849 5.595 8.958 7.888 11.124
Dec 15.060 13.398 8.143 6.037 4.595 5.098

S.D 7.10 6.61 6.57
Beta 0.907 0.908 0.803

Sharpe 5.35 0.45 2.41
Treynor 4.90 3.21 1.12
Jensen 0.39 4.62 2.81

INTERPRETATION


31

other portfolio.

other portfolio.


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Table 4.5

Escort Balanced Fund

2008 2009 2010
Month
Jan 1.7970 8.452 4.370 4.078 4.400 2.962
Feb 3.1779 2.164 0.618 5.298 0.630 5.863
Mar 4.6906 5.747 6.015 0.835 6.004 5.221
Apr 1.2131 2.214 0.519 4.073 0.506 4.998
May 4.3139 8.495 11.183 0.488 11.274 1.886
Jun 5.9484 3.237 0.758 3.418 0.681 2.893
Jul 4.0678 6.972 5.820 0.615 5.829 4.094
Aug 11.1112 4.914 3.787 9.794 3.690 5.674
Sep 3.9788 2.368 7.027 0.602 6.951 4.945
Oct 11.5740 4.665 6.503 2.153 6.891 1.206
Nov 0.3638 1.396 5.650 3.488 5.547 1.583
Dec 12.4841 3.523 4.569 3.235 5.050 0.425

S.D 5.56 5.83 5.90
Beta 0.639 0.181 0.134

Sharpe 4.95 1.60 1.06
Treynor 33.19 35.74 28.57
Jensen 7.83 0.94 0.96

INTERPRETATION

33


other portfolio.

other portfolio.


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Table 4.6
GIC Growth Plus II

2008 2009 2010
Month
Jan 3.083 3.609 7.934 6.600 7.754 3.624
Feb 0.889 0.680 2.785 2.796 3.846 2.952
Mar 2.857 7.917 3.027 1.799 0.308 2.155
Apr 1.715 1.274 4.771 1.096 4.719 6.462
May 3.959 14.863 8.956 17.108 7.888 8.235
Jun 8.238 10.303 2.961 0.032 10.253 3.685
Jul 7.394 4.983 0.917 7.027 1.096 6.016
Aug 7.742 16.419 4.495 1.695 2.783 4.253
Sep 0.148 1.489 3.050 6.877 3.032 6.083
Oct 5.048 6.653 1.576 0.250 1.735 10.074
Nov 2.282 3.428 5.739 9.440 5.609 10.625
Dec 10.740 16.617 7.265 8.814 6.851 4.991

S.D 4.67 5.26 5.53
Beta 0.512 0.590 0.186

Sharpe 3.48 0.22 0.03
Treynor 52.18 2.62 1.09
Jensen 0.21 2.76 0.43

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INTERPRETATION


other portfolio.

other portfolio.


36

Table 4.7
GIC DMAT

2008 2009 2010
Month
Jan 2.284 3.645 1.179 4.986 0.181 3.187
Feb 0.774 0.637 2.058 2.078 2.110 2.290
Mar 3.585 7.784 2.536 3.636 6.184 2.355
Apr 0.265 3.917 0.483 0.386 3.761 7.890
May 6.842 9.293 11.983 16.583 8.612 8.805
Jun 8.712 11.558 2.596 0.081 4.666 5.426
Jul 6.208 5.869 2.115 5.973 9.572 5.262
Aug 10.267 13.311 1.698 0.128 2.618 2.756
Sep 1.332 3.696 5.034 6.963 10.151 7.624
Oct 15.543 9.292 2.609 0.390 2.499 10.198
Nov 1.031 1.622 7.543 9.221 2.521 12.835
Dec 11.695 14.450 9.007 7.039 2.510 4.974

S.D 6.16 5.52 5.56
Beta 0.753 0.690 0.428

Sharpe 5.18 0.21 0.93
Treynor 48.06 1.99 14.25
Jensen 0.11 3.41 0.86

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INTERPRETATION


other portfolio.

other portfolio.


38

Table 4.8
GIC Fortune 94

2008 2009 2010
Month
Jan 2.384 0.465 8.144 1.030 2.803 0.340
Feb 0.142 0.459 0.357 0.056 5.689 0.408
Mar 6.553 0.288 0.554 0.098 1.681 0.442
Apr 1.064 0.646 0.334 0.299 2.105 0.440
May 14.941 0.817 15.275 0.302 8.621 0.297
Jun 10.831 0.728 4.341 0.266 1.385 0.297
Jul 5.011 0.328 0.749 0.210 6.337 0.748
Aug 11.966 0.699 1.706 0.352 4.193 0.918
Sep 1.692 1.720 5.716 0.241 5.209 0.283
Oct 8.303 0.474 0.341 0.621 0.680 0.575
Nov 7.635 0.190 12.349 0.209 0.401 0.367
Dec 17.408 0.255 7.310 0.359 0.683 0.375

S.D 7.30 7.09 3.99
Beta 0.348 1.904 0.179

Sharpe 6.00 3.12 18.20
Treynor 6.76 0.50 28.03
Jensen 7.87 10.39 2.75

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INTERPRETATION


other portfolio.

other portfolio.


40

Table 4.9

LIC MF Equity Fund

2008 2009 2010
Month
Jan 1.210 5.299 4.011 5.360 2.219 2.714
Feb 2.853 0.768 6.131 1.769 5.212 2.107
Mar 4.515 7.617 3.590 4.361 0.431 2.339
Apr 0.138 5.105 1.590 1.294 2.278 7.987
May 8.642 7.300 14.867 16.024 7.738 8.911
Jun 8.657 11.722 0.154 0.153 5.173 6.374
Jul 7.471 4.878 5.387 6.187 3.419 4.539
Aug 14.590 13.448 3.024 0.445 9.789 2.873
Sep 2.857 2.991 5.000 6.729 3.393 8.133
Oct 11.459 9.505 0.455 0.662 9.727 9.852
Nov 4.180 0.849 5.416 8.958 10.068 11.124
Dec 13.379 13.398 8.815 6.037 3.930 5.098

S.D 5.98 6.36 5.70
Beta 0.781 0.881 0.747

Sharpe 4.70 0.40 2.35
Treynor 42.68 2.95 19.97
Jensen 1.09 4.08 1.58

INTERPRETATION


41

other portfolio.

other portfolio.


42

Table 4.10

LIC MF Bond Fund

2008 2009 2010
Month Return Index Return Index Return Index
Jan 0.995 1.368 0.211 1.165 2.262 0.232
Feb 0.737 0.361 0.075 0.003 1.530 0.375
Mar 0.723 0.198 1.306 0.507 1.577 0.363
Apr 1.742 0.856 0.255 0.164 3.512 0.372
May 1.382 1.304 0.598 0.068 0.055 0.361
Jun 0.358 0.744 1.143 0.701 4.548 0.418
Jul 0.430 0.274 0.191 1.423 0.397 0.728
Aug 1.247 1.394 0.131 0.697 1.698 0.960
Sep 0.774 1.775 0.191 0.355 0.223 0.279
Oct 0.238 0.134 0.376 1.138 0.338 0.444
Nov 0.218 0.405 0.398 0.135 5.121 0.765
Dec 1.183 0.391 0.210 0.230 0.211 0.450

S.D 0.84 0.60 2.54
Beta 0.234 0.052 2.768

Sharpe 5.68 8.26 16.74
Treynor 12.52 13.47 2.08
Jensen 0.87 0.30 1.67

43

INTERPRETATION


other portfolio.

other portfolio.


44

Table 4.11

LIC MF Govt. Securities Fund

2008 2009 2010
Jan 1.552 0.864 0.324 0.524 0.984 0.244
Feb 0.019 0.022 0.384 0.343 0.883 0.316
Mar 1.474 0.284 1.300 0.018 0.311 0.298
Apr 1.874 0.674 0.307 0.314 1.216 0.441
May 1.888 0.688 0.813 0.094 1.117 0.425
Jun 0.826 0.555 0.738 0.120 0.563 0.468
Jul 1.033 0.219 0.025 0.279 0.538 0.421
Aug 2.050 0.574 0.253 0.060 0.321 0.464
Sep 1.073 0.723 0.237 0.391 0.354 0.313
Oct 0.006 0.288 1.954 0.807 0.538 0.444
Nov 0.806 0.433 0.481 0.060 0.669 0.478
Dec 2.054 0.143 1.077 0.054 0.563 0.438

S.D 1.34 0.87 0.59
Beta 0.307 1.739 0.855

Sharpe 14.71 34.96 46.07
Treynor 12.38 5.65 10.27
Jensen 1.24 10.11 5.52

45

INTERPRETATION


other portfolio.

other portfolio.


46

Table 4.12

LIC MF Growth Fund

2008 2009 2010
Jan 4.071 0.864 1.386 0.524 2.716 0.244
Feb 1.107 0.022 3.382 0.343 1.761 0.316
Mar 4.509 0.284 0.080 0.018 3.633 0.298
Apr 3.579 0.674 3.143 0.314 5.468 0.441
May 13.099 0.688 15.491 0.094 3.980 0.425
Jun 7.974 0.555 0.447 0.120 0.419 0.468
Jul 12.389 0.219 3.957 0.279 9.916 0.421
Aug 15.199 0.574 1.090 0.060 5.542 0.464
Sep 4.611 0.723 4.998 0.391 2.834 0.313
Oct 11.827 0.288 1.394 0.807 9.906 0.444
Nov 0.715 0.433 7.651 0.060 8.627 0.478
Dec 11.447 0.143 7.678 0.054 5.672 0.438

S.D 7.02 5.99 5.93
Beta 1.183 0.496 7.805

Sharpe 22.64 11.65 13.44
Treynor 4.95 6.60 3.33
Jensen 12.92 1.36 14.71

47

INTERPRETATION


other portfolio.

other portfolio.


48

Table 4.13

ING Financial

2008 2009 2010
Jan 7.642 0.936 6.660 2.129 2.242 0.555
Feb 0.963 0.004 7.621 1.016 2.750 0.773
Mar 7.854 0.412 5.000 0.345 1.581 0.683
Apr 12.254 0.722 2.279 0.297 2.778 0.328
May 1.365 1.822 15.085 0.385 11.111 0.278
Jun 11.960 0.970 1.095 1.072 2.215 0.554
Jul 2.530 0.634 4.272 1.815 9.406 1.270
Aug 7.407 1.409 3.145 0.356 6.220 1.530
Sep 4.948 2.004 5.966 0.475 1.145 1.553
Oct 9.789 2.269 0.662 1.335 7.203 0.779
Nov 2.305 1.043 9.201 0.109 8.422 1.094
Dec 10.972 1.237 12.340 0.216 7.834 0.635

S.D 7.87 7.61 5.72
Beta 0.471 1.500 1.724

Sharpe 0.18 2.40 10.89
Treynor 0.40 1.63 4.63
Jensen 0.90 10.34 7.24

49

INTERPRETATION


other portfolio.

other portfolio.


50

Table 4.14
Kotak Gilt

2008 2009 2010
Jan 0.261 1.498 0.242 5.138 0.194 0.679
Feb 0.422 0.588 0.278 1.451 1.545 0.709
Mar 0.528 0.594 0.370 2.699 0.321 0.907
Apr 0.731 1.082 0.183 0.044 0.191 0.439
May 0.392 2.815 0.190 0.112 0.190 0.355
Jun 0.309 1.164 1.940 1.703 1.879 0.035
Jul 0.416 0.954 1.641 3.652 1.645 1.879
Aug 0.506 2.044 0.191 1.515 0.192 3.481
Sep 0.368 3.066 0.191 1.515 0.190 3.376
Oct 0.238 0.728 0.194 1.812 0.194 0.801
Nov 0.244 2.055 0.197 0.069 0.194 2.140
Dec 0.234 0.973 0.191 0.235 0.379 0.490

S.D 0.15 0.62 0.84
Beta 0.034 0.121 0.016

Sharpe 3.49 2.19 3.53
Treynor 15.23 9.54 5.68
Jensen 0.18 1.20 0.24

51

INTERPRETATION


other portfolio.

other portfolio.


52

Table 4.15
Kotak Opportunities

2008 2009 2010
Jan 1.078 3.609 1.270 6.600 0.511 3.624
Feb 0.817 0.680 2.113 2.796 3.189 2.952
Mar 2.228 7.917 1.598 1.799 4.592 2.155
Apr 0.670 1.274 0.308 1.096 2.978 6.462
May 4.623 14.863 7.579 17.108 2.625 8.235
Jun 3.993 10.303 0.815 0.032 0.759 3.685
Jul 2.682 4.983 2.934 7.027 2.260 6.016
Aug 3.993 16.419 1.080 1.695 2.196 4.253
Sep 1.885 1.489 1.854 6.877 3.571 6.083
Oct 6.038 6.653 0.596 0.250 6.358 10.074
Nov 0.051 3.428 3.361 9.440 3.148 10.625
Dec 9.683 16.617 5.017 8.814 3.051 4.991

S.D 3.40 3.21 3.40
Beta 0.368 0.418 0.486

Sharpe 2.31 0.09 0.93
Treynor 18.11 1.45 11.42
Jensen 0.31 1.93 2.34

INTERPRETATION

53


other portfolio.

other portfolio.


54

Table 4.16
Kotak Bond Fund

2008 2009 2010
Jan 0.939 1.368 0.231 1.165 0.386 0.232
Feb 0.312 0.361 0.027 0.003 0.550 0.375
Mar 0.464 0.198 1.258 0.507 0.288 0.363
Apr 1.736 0.856 0.133 0.164 0.189 0.372
May 1.460 1.304 0.729 0.068 0.916 0.361
Jun 0.380 0.744 1.124 0.701 0.440 0.418
Jul 0.754 0.274 0.344 1.423 0.635 0.728
Aug 1.584 1.394 0.079 0.697 0.292 0.960
Sep 0.965 1.775 0.234 0.355 0.317 0.279
Oct 0.295 0.134 0.162 1.138 0.389 0.444
Nov 0.512 0.405 0.050 0.135 0.384 0.765
Dec 1.382 0.391 1.030 0.230 0.308 0.450

S.D 0.92 0.65 0.31
Beta 0.509 0.009 0.381

Sharpe 2.42 8.30 11.32
Treynor 3.05 19.19 10.22
Jensen 2.48 0.04 1.89

INTERPRETATION


55

other portfolio.

other portfolio.


56

Table 4.17
Kotak Tech

2008 2009 2010
Jan 9.393 0.465 8.995 1.030 2.099 0.340
Feb 1.079 0.459 0.504 0.056 4.502 0.408
Mar 8.729 0.288 7.499 0.098 1.809 0.442
Apr 14.926 0.646 2.249 0.299 12.888 0.440
May 1.853 0.817 0.585 0.302 14.537 0.297
Jun 11.157 0.728 2.115 0.266 5.168 0.297
Jul 4.774 0.328 6.637 0.210 1.509 0.748
Aug 7.270 0.699 4.740 0.352 6.403 0.918
Sep 17.595 1.720 4.768 0.241 2.783 0.283
Oct 1.523 0.474 5.090 0.621 5.941 0.575
Nov 5.933 0.190 8.946 0.209 7.713 0.367
Dec 6.553 0.255 0.576 0.359 9.229 0.375

S.D 9.31 5.37 7.32
Beta 10.282 4.014 3.539

Sharpe 9.07 5.95 7.26
Treynor 6.06 4.26 5.48
Jensen 59.20 25.17 23.39

INTERPRETATION


57

other portfolio.

other portfolio.

It is known from the correlation that the relationship between the stock
return and stock market index return is high in 2008.

58

Table 4.18
Kotak MNC

2008 2009 2010
Jan 2.729 3.609 9.812 6.600 0.739 3.624
Feb 0.471 0.680 4.875 2.796 19.191 2.952
Mar 7.951 7.917 1.556 1.799 0.745 2.155
Apr 5.388 1.274 4.179 1.096 3.413 6.462
May 13.788 14.863 10.335 17.108 8.640 8.235
Jun 4.853 10.303 4.037 0.032 1.717 3.685
Jul 7.394 4.983 3.862 7.027 6.025 6.016
Aug 8.780 16.419 6.923 1.695 8.649 4.253
Sep 4.943 1.489 8.460 6.877 0.446 6.083
Oct 5.718 6.653 0.398 0.250 6.832 10.074
Nov 7.770 3.428 6.983 9.440 10.886 10.625
Dec 18.635 16.617 8.152 8.814 6.365 4.991

S.D 7.67 6.44 8.30
Beta 0.814 0.781 0.576

Sharpe 5.93 0.73 1.38
Treynor 55.91 6.64 14.29
Jensen 0.12 2.44 2.21

59

INTERPRETATION


other portfolio.

other portfolio.


60

Table 4.19
JM Equity Fund

2008 2009 2010
Jan 1.210 5.299 4.011 5.360 2.219 2.714
Feb 2.853 0.768 6.131 1.769 5.212 2.107
Mar 4.515 7.617 3.590 4.361 0.431 2.339
Apr 0.138 5.105 3.446 1.294 2.278 7.987
May 8.642 7.300 14.867 16.024 7.738 8.911
Jun 8.657 11.722 0.154 -0.153 5.173 6.374
Jul 7.471 4.878 5.387 6.187 3.419 4.539
Aug 14.590 13.448 3.024 0.445 9.789 2.873
Sep 2.857 2.991 5.000 6.729 3.393 8.133
Oct 11.459 9.505 0.455 0.662 9.727 9.852
Nov 4.180 0.849 5.416 8.958 10.068 11.124
Dec 13.379 13.398 8.815 6.037 3.930 5.098

S.D 5.98 6.40 5.70
Beta 0.781 0.875 0.747

Sharpe 4.70 0.38 2.35
Treynor 42.68 2.81 19.97
Jensen 1.09 3.89 1.58

61

INTERPRETATION


other portfolio.

other portfolio.


62

Table 4.20

JM Balanced Fund

2008 2009 2010
Jan 2.226 8.452 3.519 4.078 2.306 2.962
Feb 1.105 2.164 3.170 5.298 2.431 5.863
Mar 3.961 5.747 1.301 0.835 1.760 5.221
Apr 0.631 2.214 0.345 4.073 2.754 4.998
May 6.946 8.495 10.193 0.488 3.777 1.886
Jun 5.377 3.237 0.484 3.418 1.665 2.893
Jul 5.824 6.972 3.920 0.615 3.481 4.094
Aug 5.071 4.914 1.382 9.794 5.480 5.674
Sep 34.058 2.368 3.258 0.602 3.269 4.945
Oct 6.063 4.665 0.173 2.153 6.977 1.206
Nov 2.468 1.396 4.041 3.488 8.402 1.583
Dec 21.589 3.523 5.998 3.235 3.119 0.425

S.D 12.65 4.31 4.20
Beta 1.426 0.083 0.238

Sharpe 8.15 1.36 0.13
Treynor 24.48 66.43 1.99
Jensen 10.79 1.08 0.08

INTERPRETATION


63

other portfolio.

other portfolio.


64

Table 4.21

JM Basic Fund

2008 2009 2010
Jan 3.941 3.645 17.542 4.986 7.759 3.187
Feb 4.936 0.637 2.941 2.078 1.382 2.290
Mar 30.000 7.784 6.255 3.636 4.541 2.355
Apr 1.472 3.917 1.408 0.386 4.631 7.890
May 13.281 9.293 19.508 16.583 3.603 8.805
Jun 8.236 11.558 1.762 -0.081 0.749 5.426
Jul 4.889 5.869 8.082 5.973 0.472 5.262
Aug 17.305 13.311 2.075 0.128 4.757 2.756
Sep 6.038 3.696 3.946 6.963 7.143 7.624
Oct 0.736 9.292 2.000 0.390 9.136 10.198
Nov 15.195 1.622 3.114 9.221 12.156 12.835
Dec 7.205 14.450 3.584 7.039 2.893 4.974

S.D 12.90 8.40 6.24
Beta 1.351 0.982 0.817

Sharpe 8.77 0.44 2.17
Treynor 45.38 2.98 17.48
Jensen 8.11 8.32 4.36

INTERPRETATION

65


other portfolio.

other portfolio.


66

Table 4.22

Taurus Star Share

2008 2009 2010
Jan 3.934 3.645 10.184 4.986 5.172 3.187
Feb 0.333 0.637 6.648 2.078 13.901 2.290
Mar 10.265 7.784 7.082 3.636 2.683 2.355
Apr 4.936 3.917 3.153 0.386 4.569 7.890
May 12.132 9.293 5.487 16.583 10.268 8.805
Jun 14.352 11.558 6.290 0.081 3.073 5.426
Jul 2.838 5.869 9.357 5.973 12.000 5.262
Aug 17.318 13.311 14.184 0.128 16.955 2.756
Sep 0.657 3.696 6.376 6.963 0.039 7.624
Oct 9.189 9.292 0.216 0.390 12.187 10.198
Nov 10.572 1.622 6.938 9.221 14.493 12.835
Dec 10.445 14.450 16.040 7.039 7.227 4.974

S.D 8.22 8.62 9.63
Beta 0.938 0.830 0.995

Sharpe 6.64 0.23 3.35
Treynor 49.47 1.89 22.15
Jensen 0.01 2.08 1.96

67

INTERPRETATION


other portfolio.

other portfolio.


68

Table 4.23

Reliance Retail Plan Fund

2008 2009 2010
Jan 1.294 5.299 0.298 5.360 0.556 2.714
Feb 0.441 0.768 0.044 1.769 0.787 2.107
Mar 0.982 7.617 1.506 4.361 0.502 2.339
Apr 1.682 5.105 0.512 1.294 0.271 7.987
May 1.378 7.300 0.700 16.024 0.860 8.911
Jun 0.437 11.722 1.353 0.153 0.626 6.374
Jul 0.840 4.878 0.313 6.187 0.488 4.539
Aug 1.559 13.448 0.573 0.445 0.246 2.873
Sep 1.097 2.991 0.474 6.729 0.302 8.133
Oct 0.342 9.505 0.282 0.662 0.231 9.852
Nov 0.471 0.849 0.367 8.958 0.354 11.124
Dec 1.610 13.398 0.692 6.037 0.189 5.098

S.D 1.02 0.75 0.22
Beta 0.080 0.027 0.010

Sharpe 0.27 0.88 0.82
Treynor 24.40 13.45 54.11
Jensen 0.08 0.06 0.39

INTERPRETATION

69


other portfolio.

other portfolio.


CHAPTER V

FINDINGS, SUGGESTIONS AND CONCLUSION

70

5.1 FINDINGS

1. The ability of the portfolio manager to minimize the amount of insurable
risk.

2. Incase of Security fund LIC MF govt. security fund showed increase in

performance based on both sharpe ratio under the period of analysis.

3. Incase of mutual plan Reliance retail plan showed increase in

performance based on both treynor ratio under the period of analysis.

4. Investors treat their holdings like rented goods.

5. Most of the investors ignore the long – term periods.

6. Economic moat prevents competitors from stealing market share.

7. Bond / income fund is to provide a steady cashflow to investors.

71

5.2 SUGGESTIONS

1. Investors should know about the basic elements of mutual fund.

2. Investors should choose their risk level and according to that they

have to choose the funds.

3. Investors should analyze the company performance and then invest

the funds.

4. Investors should know the market trends.

5. Investors should wait for the long - term returns.

6. Effects of differential degrees of risk on the return of the portfolios

must be taken into account.

72

5.3 CONCLUSION

It can be easily concluded that most of the fund returns can be
attributed to the market that were in direct correlation with the market. But
in the sample of 23 funds considered for this study one fund; it perform as
the market and for this fund the return generated can be attributed to the
market

Mutual funds are funds that pool the money of several investors to
invest in equity or debt markets. Mutual Funds could be Equity funds, Debt
funds or balanced funds. Funds are selected on quantitative parameters like
derivatives, risk adjusted returns, and market analysis of fund performance
and investment styles through regular interactions due diligence processes
with fund managers.

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