Thesis portfolio management

Property of Project Guru, www.projectguru.co.cc 1

Introduction to Portfolio Management
Investing in securities such as shares, debentures, and bonds
is profitable as well as exciting. It is indeed rewarding, but involves a great deal of risk
and calls for scientific knowledge as well artistic skill. In such investments both rationale
and emotional responses are involved. Investing in financial securities is now considered
to be one of the best avenues for investing one savings while it is acknowledged to be one
of the best avenues for investing one saving while it is acknowledged to be one of the
most risky avenues of investment.
“It is rare to find investors investing their entire savings
in a single security. Instead, they tend to invest in a group of securities. Such a
group of securities is called portfolio”. Creation of a portfolio helps to reduce risk,
without sacrificing returns. Portfolio management deals with the analysis of individual
securities as well as with the theory and practice of optimally combining securities into
portfolios. An investor who understands the fundamental principles and analytical aspects
of portfolio management has a better chance of success.

Portfolio Management
An investor considering investment in securities is faced with the problem of choosing
from among a large number of securities and how to allocate his funds over this group of
securities. Again he is faced with problem of deciding which securities to hold and how
much to invest in each. The risk and return characteristics of portfolios. The investor tries
to choose the optimal portfolio taking into consideration the risk return characteristics of
all possible portfolios.
As the risk return characteristics of individual securities as well as portfolios also change.
This calls for periodic review and revision of investment portfolios of investors.
An investor invests his funds in a portfolio expecting to get good returns consistent with
the risk that he has to bear. The return realized from the portfolio has to be measured and
the performance of the portfolio has to be evaluated.
It is evident that rational investment activity involves creation of an investment portfolio.
Portfolio management comprises all the processes involved in the creation and
maintenance of an investment portfolio. It deals specifically with the security analysis,
portfolio analysis, portfolio selection, portfolio revision & portfolio evaluation. Portfolio
management makes use of analytical techniques of analysis and conceptual theories
regarding rational allocation of funds. Portfolio management is a complex process which
tries to make investment activity more rewarding and less risky.

Selection of Portfolio
The selection of portfolio depends upon the objectives of the investor. The selection of
portfolio under different objectives are dealt subsequently
Objectives and asset mix
If the main objective is getting adequate amount of current income, sixty percent of the
investment is made in debt instruments and remaining in equity. Proportion varies
according to individual preference.
Growth of income and asset mix
Here the investor requires a certain percentage of growth as the income from the capital
he has invested. The proportion of equity varies from 60 to 100 % and that of debt from 0
to 40 %. The debt may be included to minimize risk and to get tax exemption.
Capital appreciation and Asset Mix
It means that value of the investment made increases over the year. Investment in real
estate can give faster capital appreciation but the problem is of liquidity. In the capital
market, the value of the shares is much higher than the original issue price.
Safety of principle and asset mix
Usually, the risk adverse investors are very particular about the stability of principal.
Generally old people are more sensitive towards safety.

Risk and return analysis
The traditional approach of portfolio building has some basic assumptions. An investor
wants higher returns at the lower risk. But the rule of the game is that more risk, more
return. So while making a portfolio the investor must judge the risk taking capability and
the returns desired.
Diversification
Once the asset mix is determined and risk – return relationship is analyzed the next step is
to diversify the portfolio. The main advantage of diversification is that the unsystematic
risk is minimized.

Evolution of Portfolio Management
Portfolio management is essentially a systematic method of maintaining one‘s investment
efficiently. Many factors have contributed to the existence and development of the
concept.
In the early years of the century analyst used financial statements to find the value of the
securities. The first to be analyzed using this was Railroad Securities of the USA. A
booklet entitled ―The Anatomy of the Railroad‖ was published by Thomas F. Woodlock
in 1900. As the time progressed this method became very important in the investment
field, although most of the writers adopted different ways to publish there data.
They generally advocated the use of different ratios for this purpose. John Moody in his
book ―The Art of wall Street Investing‖, strongly supported the use of financial ratios to
know the worth of the investment. The proposed type of analysis later on became the
―common-size‖ analysis.
The other major method adopted was the study of stock price movement with the help of
price charts. This method later on was known as Technical Analysis. It evolved during
1900-1902 when Charles H. Dow, the founder of the Dow Jones and Co. presented his
view in the series of editorials in the Wall Street Journal in USA. The advocates of
technical analysis believed that stock prices movement is ordered and systematic and the
definite pattern could be identified. There investment strategy was build around the
identification of the trend and pattern in the stock price movement.

Another prominent author who supported the technical analysis was Ralph N. Elliot who
published a book in the year 1938 titled ―The Wave Principle‖. After analyzing 75 years
data of share price, he concluded that the market movement was quite orderly and
followed a pattern of waves. His theory is known as Elliot Wave Theory.
According to J.C. Francis the development of investment management can be traced
chronologically through three different phases.
First phase is known as Speculative Phase. Investment was not a wide spread activity, but
a cake of few rich people. The process is speculative in nature. Investment management
was an art and needed skills. Price manipulation was resorted to by the investors. During
this time period pools and corners were used for manipulation. The result of this was the
stock exchange crash in the year 1929. Finally the daring speculative ventures of
investors were declared illegal in the US by the Securities Act of 1934.
Second phase began in the year 1930. The phase was of professionalism. After coming up
of the Securities Act, the investment industry began the process of upgrading its ethics,
establishing standard practices and generating a good public image. As a result the
investments market became safer place to invest and the people in different income group
started investing. Investors began to analyze the security before investing.
During this period the research work of Benjamin Graham and David L. Dood was
widely publicized and publicly acclaimed. They published a book ―Security Analysis‖ in
1934, which was highly sought after. There research work was considered first work in
the field of security analysis and acted as the base for further study. They are considered
as pioneers of security analysis as a discipline.
Third phase was known as the scientific phase. The foundation of modern portfolio
theory was laid by Markowitz. His pioneering work on portfolio management was
described in his article in the Journal of Finance in the year 1952 and subsequent books
published later on.

He tried to quantify the risk. He showed how the risk can be minimized through proper
diversification of investment which required the creation of the portfolio. He provided
technical tools for the analysis and selection of optimal portfolio. For his work he won
the Noble Prize for Economics in the year 1990.
The work of Markowitz was extended by the William Sharpe, John Linter and Jan
Mossin through the development of the Capital Asset Pricing Model (CAPM).
If we talk of the present the last two phases of Professionalism and Scientific Analysis
are currently advancing simultaneously with investment in various financial instruments
becoming safer, with proper knowledge to each and every investor.

Role of Portfolio Management
There was a time when portfolio management was an exotic term. A practice which is
beyond the reach of the small investor, but the time has changed now. Portfolio
management is now a common term and is widely practiced in INDIA. The theories and
concepts relating to portfolio management now find there way in the front pages of the
financial newspapers and magazines.
In early 90‘s India embarked on a program of economic liberalization and globalization,
with high participation of private players. This reform process has made the Indian
industry efficient, with rapid computerization, increased market transparency, better
infrastructure and customer services, closer integration and higher volume. The markets
are dominated by large institutional investors with their diversified portfolios. A large
number of mutual funds have come up in the market since 1987. With this development
investment in securities has gained considerable momentum
Along with the spread of the securities investment way among Indian investors have
changed due to the development of the quantitative techniques. Professional portfolio
management, backed by research is now being adopted by mutual funds, investment
consultants, individual investors and big brokers. The Securities Exchange Board of India
(SEBI) is a regulatory body in INDIA. It ensures that the stock market is free from fraud,
and of course the main objective is to ensure that the investor‘s money is safe.

With the advent of computers the whole process of portfolio management has become
quite easy. The computer can absorb large volumes of data, perform the computations
accurately and quickly give out the results in any desired form. Moreover simulation,
artificial intelligence etc provides means of testing alternative solutions.
The trend towards liberalization and globalization of the economy has promoted free flow
of capital across international borders. Portfolio not only now include domestic securities
but foreign too. So financial investments can‘t be reaped without proper management.
Another significant development in the field of investment management is the
introduction to Derivatives with the availability of Options and Futures. This has
broadened the scope of investment management.
Investment is no longer a simple process. It requires a scientific knowledge, a systematic
approach and also professional expertise. Portfolio management is the only way through
which an investor can get good returns, while minimizing risk at the same time.
So portfolio management objectives can be stated as: -
Risk minimization.
Safeguarding capital.
Capital Appreciation.
Choosing optimal mix of securities.
Keeping track on performance.

WHAT IS MUTUAL FUND??
A mutual fund is a form of collective investment that pools money from many investors
and invests the money in stocks, bonds, short-term money market instruments, and/or
other securities.
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 invested by the fund manager in
different types of securities depending upon the objective of the scheme. These could
range from shares to debentures to money market instruments. The income earned
through these investments and the capital appreciation realized by the scheme is 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 portfolio at a relatively low cost. The
small savings of all the investors are put together to increase the buying power and hire a
professional manager to invest and monitor the money. Anybody with an investible
surplus of as little as a few thousand rupees can invest in Mutual Funds. Each Mutual
Fund scheme has a defined investment objective and strategy.
The flow chart below describes broadly the working of a mutual fund.

A mutual fund is a managed group of owned securities of several corporations. These
corporations receive dividends on the shares that they hold and realize capital gains or
losses on their securities traded. Investors purchase shares in the mutual fund as if it was
an individual security. After paying operating costs, the earnings (dividends, capital gains
or loses) of the mutual fund are distributed to the investors, in proportion to the amount
of money invested.
A mutual fund may be either an open-end or a closed-end fund. An open-end mutual fund
does not have a set number of shares; it may be considered as a fluid capital stock. The
number of shares changes as investors buys or sell their shares. Investors are able to buy
and sell their shares of the company at any time for a market price. However the open-
end market price is influenced greatly by the fund managers. On the other hand, closed-
end mutual fund has a fixed number of shares and the value of the shares fluctuates with
the market. But with close-end funds, the fund manager has less influence because the
price of the underlining owned securities has greater influence
Mutual fund is a mechanism for pooling the resources by issuing units to the investors
and investing funds in securities in accordance with objectives as disclosed in offer
document. Investments in securities are spread across a wide cross-section of industries
and sectors and thus the risk is reduced. Diversification reduces the risk because all
stocks may not move in the same direction in the same proportion at the same time.

Mutual fund issues units to the investors in accordance with quantum of money invested
by them. Investors of mutual funds are known as unit holders. The profits or losses are
shared by the investors in proportion to their investments. The mutual funds normally
come out with a number of schemes with different investment objectives, which are
launched from time to time.
The concept of mutual fund originated in Belgium by the ―Society Generale de
Belgique” in the year 1822. Unit Trust of India was the first mutual fund set up in India
in the year 1963. In early 1990s, Government allowed public sector banks and institutions
to set up mutual funds. SEBI formulates policies and regulates the mutual funds to
protect the interest of the investors. All mutual funds whether promoted by public sector
or private sector entities including those promoted by foreign entities are governed by the
same set of Regulations.
A mutual fund is set up in the form of a trust, which has sponsor, trustees, Asset
Management Company (AMC) and custodian. The trust is established by a sponsor or
more than one sponsor who is like promoter of a company. The trustees of the mutual
fund hold its property for the benefit of the unit holders. Asset Management Company
(AMC) approved by SEBI manages the funds by making investments in various types of
securities. Custodian, who is registered with SEBI, holds the securities of various
schemes of the fund in its custody. The trustees are vested with the general power of
superintendence and direction over AMC. They monitor the performance and compliance
of SEBI Regulations by the mutual fund.
The performance of a particular scheme of a mutual fund is denoted by Net Asset Value
(NAV). In simple words, Net Asset Value is the market value of the securities held by the
scheme. Since market value of securities changes every day, NAV of a scheme also
varies on day-to-day basis. The NAV per unit is the market value of securities of a
scheme divided by the total number of units of the scheme on any particular date. For
example, if the market value of securities of a mutual fund scheme is Rs 200 lakhs and
the mutual fund has issued 10 lakhs units of Rs. 10 each to the investors, then the NAV

per unit of the fund is Rs.20. NAV is required to be disclosed by the mutual funds on a
regular basis - daily or weekly - depending on the type of scheme.

TYPES OF MUTUAL FUNDS SCHEMES
Mutual fund schemes may be classified on the basis of its structure and its investment
objective-:
A) By Structure
1) Open-ended Fund
An open-end fund is one that is available for subscription all through the year. These do
not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset
Value ("NAV") related prices. The key feature of open-end schemes is liquidity. The
term Mutual fund is the common name for an open-end investment company. Being
open-ended means that at the end of every day, the investment management company
sponsoring the fund issues new shares to investors and buys back shares from investors
wishing to leave the fund.

2) Closed-end Funds
A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15
years. The fund is open for subscription only during a specified period. 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 they 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. 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.
3) Interval Funds
Interval funds combine the features of open-ended and close-ended schemes. They are
open for sale or redemption during pre-determined intervals at NAV related prices.
B) By Investment Objective
1) Growth Funds
The aim of growth funds is to provide capital appreciation over the medium to long term.
Such schemes normally invest a majority of their corpus in equities. It has been proved

that returns from stocks, have outperformed most other kind of investments held over the
long term. Growth schemes are ideal for investors for a period of time.
2) Income Funds
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
and Government securities. Income Funds are ideal for capital stability and regular
income.
3) Balanced Funds
The aim of balanced funds is to provide both growth and regular income. Such schemes
periodically distribute a part of their earning and invest both in equities and fixed income
securities in the proportion indicated in their offer documents. In a rising stock market,
the NAV of these schemes may not normally keep pace, or fall equally when the market
falls. These are ideal for investors looking for a combination of income and moderate
growth.
4) Money Market Funds
The aim of money market funds is to provide easy liquidity, preservation of capital
and moderate income. These schemes generally invest in safer short-term instruments
such as treasury bills, certificates of deposit, commercial paper and inter-bank call
money. Returns on these schemes may fluctuate depending upon the interest rates
prevailing in the market. Money market funds have relatively low risks, compared to
other mutual funds (and most other investments). By law, they can invest in only
certain high-quality, short-term investments issued by the U.S. government, U.S.
corporations, and state and local governments. Money market funds try to keep their

net asset value (NAV) — which represents the value of one share in a fund — at a
stable $1.00 per share. But the NAV may fall below $1.00 if the fund's investments
perform poorly. Investor losses have been rare, but they are possible. Money market
funds pay dividends that generally reflect short-term interest rates, and historically the
returns for money market funds have been lower than for either bond or stock funds.
That's why "inflation risks" — the risk that inflation will outpace and erode
investment returns over time — can be a potential concern for investors in money
market funds.

HISTORY OF INDIAN MUTUAL FUND INDUSTRY
The mutual fund industry in India started in 1963 with the formation of Unit Trust of
India, at the initiative of the Government of India and Reserve Bank the. The history of
mutual funds in India can be broadly divided into four distinct phases

First Phase – 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up
by the Reserve Bank of India and functioned under the Regulatory and administrative
control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the
Industrial Development Bank of India (IDBI) took over the regulatory and administrative
control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the
end of 1988 UTI had Rs.6, 700 crores of assets under management.
Second Phase – 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non- UTI, public sector mutual funds set up by public sector
banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation
of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June
1987 followed by Can bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund
(Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda
Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set
up its mutual fund in December 1990
At the end of 1993, the mutual fund industry had assets under management of Rs.47, 004
crores
Third Phase – 1993-2003 (Entry of Private Sector Funds)
With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the
year in which the first Mutual Fund Regulations came into being, under which all mutual
funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer
(now merged with Franklin Templeton) was the first private sector mutual fund registered
in July 1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive
and revised Mutual Fund Regulations in 1996. The industry now functions under the
SEBI (Mutual Fund) Regulations 1996
The number of mutual fund houses went on increasing, with many foreign mutual funds
setting up funds in India and also the industry has witnessed several mergers and

acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets
of Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44, 541 crores of assets under
management was way ahead of other mutual fund
Fourth Phase – since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust
of India with assets under management of Rs.29, 835 crores as at the end of January
2003, representing broadly, the assets of US 64 scheme, assured return and certain other
schemes. The Specified Undertaking of Unit Trust of India, functioning under an
administrator and under the rules framed by Government of India and does not come
under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76, 000 crores of
assets under management and with the setting up of a UTI Mutual Fund, conforming to
the SEBI Mutual Fund Regulations, and with recent mergers taking place among
different private sector funds, the mutual fund industry has entered its current phase of
consolidation and growth. As at the end of September, 2004, there were 29 funds, which
manage assets of Rs.153108 crores under 421 schemes.
GROWTH IN ASSETS UNDER MANAGEMENT

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

Trends in Transactions on Stock Exchanges by Mutual Funds (since
January 2000)
Equity
(Rs in
Crores)
Debt (Rs
in
Crores)
Time
Gross
Purchase
Gross
Sales
Net
Purchase/
Sales
Gross
Purchase
Gross
Sales
Net
Purchase/
Sales
Jan 2000-March 2000. 11070.54 11492.19 -421.65 2764.72 1864.29 900.43
April 2000 -March 2001. 17375.78 20142.76 -2766.98 13512.17 8488.68 5023.49
April 2001-March 2002. 12098.11 15893.99 -3795.88 33583.64 22624.42 10959.22
April 2002-March 2003 14520.89 16587.59 -2066.70 46663.83 34059.41 12604.42
April 2003-March 2004 36663.58 35355.67 1307.91 63169.93 40469.18 22700.75
April 2004-March 2005 45045.25 44597.23 448.02 62186.46 45199.17 16987.29
April 2005-March 2006 100435.90 86133.70 14302.20 109804.91 73003.67 36801.24
April 2006. 12752.47 9631.91 3120.56 11227.96 6800.08 4427.88
May 2006. 18345.43 10452.07 7893.36 15386.47 7774.06 7612.41
June 2006. 7843.52 9820.47 -1976.95 14235.54 8906.90 5328.64
July 2006. 7552.18 7633.89 -81.71 15982.62 8266.41 7716.21
August 2006. 8851.58 8425.14 426.44 16169.28 11853.22 4316.06
September 2006. 10345.23 9005.54 1339.69 12878.65 9591.24 3287.41
October 2006. 9944.46 9947.97 -3.51 10314.44 7929.50 2384.94
November 2006. 12675.21 12700.04 -24.83 13296.65 6961.92 6334.73
December 2006. 13181.43 11554.38 1627.05 7584.70 6256.15 1328.55
January 2007. 11643.60 12985.83 -1342.23 10830.62 8427.46 2403.16
February 2007. 12697.09 12971.14 -274.05 10351.99 7682.98 2669.01
March 2007 (upto 10th) 3844.74 4568.60 -723.86 4784.63 2660.08 2124.55
Total (April '06 - March '07) 129676.94 119696.98 9979.96 143043.55 93110.00 49933.55

Trends in Transactions on Stock Exchanges by Mutual Funds
Equity (Rs in crores) Debt (Rs in crores)
Transactio
n Date
Gross
Purchase
s
Gross
Sales
Net
Purchase
s / Sales
Gross
Purchase
s
Gross
Sales
Net
Purchase
s/ Sales
01.03.07 767.80 796.92 -29.12 845.18 411.54 433.64
02.03.07 442.25 567.57 -125.32 238.24 272.74 -34.50
05.03.07 707.38 541.24 166.14 981.15 591.73 389.42
06.03.07 528.54 460.10 68.44 1148.53 243.93 904.60
07.03.07 338.20 717.76 -379.56 690.76 282.95 407.81
08.03.07 578.23 617.99 -39.76 533.50 524.92 8.58
09.03.07 482.34 867.02 -384.68 347.27 327.74 19.53
10.03.07 0.00 0.00 0.00 0.00 4.53 -4.53
Total 3844.74
4568.6
0 -723.86 4784.63
2660.0
8 2124.55

Union Budget 2007-08 & the Mutual Fund Industry
The 2007-08 budget presented by the Finance Minister was also a low impact budget,
compared with the last year, whose fundamental message was for overall growth of the
economy and a positive emphasis to be put on agricultural and rural development, as well
as education, which will certainly give a long term boost to the growth of the economy.
The reduction in fiscal deficit is also a positive step and the government will also increase
spending on education by 34%.
Markets have seen a major correction over the last few trading sessions. On 28th
the
markets was hit hard from both sides, internally as well as externally. The budget had a
few shockers when the dividend distribution tax was hiked, and on the other side the
global market saw major meltdown with the Asian market were beaten the most, Chinese
markets alone lost around 9% over the day. The Indian markets could not sustain the
beating it got from both ends and saw the maximum decline witnessed in the last eight
months. The market was around 200 points down after the markets opened for the day.

But the announcement of the FM to hike dividend distribution tax saw another fall of
more than 300 points which the markets was not able to recover till the end of the day.
Among the major sectors Cement is clearly the most hit, and to some extent IT services
also got hit, because of bringing both the sector under MAT.
The announcement of MAT of 11.3 % on IT companies was misinterpreted by the market
on the budget day, by responding in negative, but saw some recovery, in the next trading
day when markets realized that MAT can be used as a deferred tax asset by IT companies
post FY 2010 to offset taxes, Secondly SEZs are still MAT free. Hence the impact is not
severe as was thought on the budget day. Secondly, as per Finance Minister FBT on
ESOP is still under notification.
The Indian Mutual Fund industry also suffered on announcement of the hike in dividend
distribution tax. The DDT for the money market and liquid mutual funds has been
proposed to be brought at par at 25%. Currently the rate is 12.5% for retail investor and
23% for institutional investors. The FM said that this was being done to restrict the
arbitrage opportunities used by these schemes.
Another proposal put up by the Finance Minister was for Mutual Funds to play a bigger
role in infrastructure development by launching and operating dedicated infrastructure
funds which would directly invest into core sector projects. The Indian Mutual Fund
industry already have schemes which are sector specific and invest into infrastructure
sector through equities. Now after this particular proposal Mutual Funds can directly
invest into infrastructure projects.
FM also allowed delivery based short selling for institutional participants. Mostly in all
developed countries short selling is allowed. In India, till recently only the retail investors

were allowed to enjoy this. Along with FII, Mutual Fund houses are also allowed for
delivery based short selling.
FM has proposed to bring the asset management services offered by individuals under the
service tax bracket. The individuals who provide investment fund management advisory
services will now have to pay service tax. The managers will have to register themselves
with the Central Excise department and have to pay service tax, if their service fee is
more than Rs.8 lakh per annum.
Along with the above the FM also proposed for the retail investor to invest abroad
through Mutual Funds. Currently the industry has quite a few mutual fund schemes which
invest dedicatedly abroad. A few more schemes invest partially abroad.
On a whole, the budget other than the DDT hike for the liquid and the money market
mutual funds and the infrastructure funds didn‘t have much in store for the Mutual Fund
industry.
To summarize, the Budget will sustain high economic growth through larger investments,
increased savings and building of manpower capabilities.

USAGE OF MUTUAL FUND
Mutual funds can invest in many different kinds of securities. The most common are
cash, stock, and bonds, but there are hundreds of sub-categories. Stock funds, for
instance, can invest primarily in the shares of a particular industry, such as technology or
utilities. These are known as sector funds. Bond funds can vary according to risk (high
yield or junk bonds, investment-grade corporate bonds), type of issuers (government
agencies, corporations, or municipalities), or maturity of the bonds (short or long term).
Both stock and bond funds can invest in primarily US securities (domestic funds), both
US and foreign securities (global funds), or primarily foreign securities (international
funds).
By law, mutual funds cannot invest in commodities and their derivatives or in real estate.
However, there do exist real estate investment trusts, or REITs, which invest solely in
real estate or mortgages, and mutual funds are allowed to hold shares in REITs. A mutual
fund may restrict itself in other ways. These restrictions, permissions, and policies are
found in the prospectus, which every open-end mutual fund must make available to a
potential investor before accepting his or her money.
Most mutual funds' investment portfolios are continually adjusted under the supervision
of a professional manager, who forecasts the future performance of investments
appropriate for the fund and chooses the ones which he or she believes will most closely
match the fund's stated investment objective. A mutual fund is administered through a
parent management company, which may hire or fire fund managers.

Mutual funds are subject to a special set of regulatory, accounting, and tax rules. Unlike
most other types of business entities, they are not taxed on their income as long as they
distribute substantially all of it to their shareholders. Also, the type of income they earn is
often unchanged as it passes through to the shareholders. Mutual fund distributions of
tax-free municipal bond income are also tax-free to the shareholder. Taxable distributions
can either be ordinary income or capital gains, depending on how the fund earned it.
ADVANTAGES AND DISADVANTAGES OF MUTUAL FUND
ADVANTAGES
 Professional Management
Mutual Funds provide the services of experienced and skilled professionals, backed by a
dedicated investment research team that analyses the performance and prospects of
companies and selects suitable investments to achieve the objectives of the scheme.
 Diversification
Mutual Funds invest in a number of companies across a broad cross-section of industries
and sectors. This diversification reduces the risk because seldom do all stocks decline at
the same time and in the same proportion. You achieve this diversification through a
Mutual Fund with far less money than you can do on your own.
 Convenient Administration

Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such
as bad deliveries, delayed payments and follow up with brokers and companies. Mutual
Funds save your time and make investing easy and convenient.
 Return Potential
Over a medium to long-term, Mutual Funds have the potential to provide a higher return
as they invest in a diversified basket of selected securities.
 Low Costs
Mutual Funds are a relatively less expensive way to invest compared to directly investing
in the capital markets because the benefits of scale in brokerage, custodial and other fees
translate into lower costs for investors.
 Liquidity
In open-end schemes, the investor gets the money back promptly at net asset value
related prices from the Mutual Fund. In closed-end schemes, the units can be sold on a
stock exchange at the prevailing market price or the investor can avail of the facility of
direct repurchase at NAV related prices by the Mutual Fund.
 Transparency
You get regular information on the value of your investment in addition to disclosure on
the specific investments made by your scheme, the proportion invested in each class of
assets and the fund manager's investment strategy and outlook.

 Flexibility
Through features such as regular investment plans, regular withdrawal plans and dividend
reinvestment plans, you can systematically invest or withdraw funds according to your
needs and convenience.
 Affordability
Investors individually may lack sufficient funds to invest in high-grade stocks. A mutual
fund because of its large corpus allows even a small investor to take the benefit of its
investment strategy.
 Choice of Schemes
Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.
 Well Regulated
All Mutual Funds are registered with SEBI and they function within the provisions of
strict regulations designed to protect the interests of investors. The operations of Mutual
Funds are regularly monitored by SEBI.

DISADVANTAGES
 Costs Despite Negative Returns
Investors must pay sales charges, annual fees, and other expenses (which we'll
discuss below) regardless of how the fund performs. And, depending on the timing of
their investment, investors may also have to pay taxes on any capital gains
distribution they receive — even if the fund went on to perform poorly after they
bought shares.
 Lack of Control
Investors typically cannot ascertain the exact make-up of a fund's portfolio at any
given time, nor can they directly influence which securities the fund manager buys
and sells or the timing of those trades.
 Price Uncertainty
With an individual stock, you can obtain real-time (or close to real-time) pricing
information with relative ease by checking financial websites or by calling your
broker. You can also monitor how a stock's price changes from hour to hour — or
even second to second. By contrast, with a mutual fund, the price at which you
purchase or redeem shares will typically depend on the fund's NAV, which the fund
might not calculate until many hours after you've placed your order. In general,
mutual funds must calculate their NAV at least once every business day, typically
after the major U.S. exchanges close.

HOW TO INVEST IN MUTUAL FUND??
Step One - Identify your Investment needs
Your financial goals will vary, based on your age, lifestyle, financial independence,
family commitments, and level of income and expenses among many other factors.
Therefore, the first step is to assess your needs. You can begin by defining your
investment objectives and needs which could be regular income, buying a home or
finance a wedding or educate your children or a combination of all these needs, the
quantum of risk you are willing to take and your cash flow requirements.
Step Two - Choose the right Mutual Fund

The important thing is to choose the right mutual fund scheme which suits your
requirements. The offer document of the scheme tells you its objectives and provides
supplementary details like the track record of other schemes managed by the same Fund
Manager. Some factors to evaluate before choosing a particular Mutual Fund are the track
record of the performance of the fund over the last few years in relation to the appropriate
yardstick and similar funds in the same category. Other factors could be the portfolio
allocation, the dividend yield and the degree of transparency as reflected in the frequency
and quality of their communications. For selecting the right scheme as per your specific
requirements,
Step Three - Select the ideal mix of Schemes
Investing in just one Mutual Fund scheme may not meet all your investment needs. You
may consider investing in a combination of schemes to achieve your specific goals.
Step Four - Invest regularly
The best approach is to invest a fixed amount at specific intervals, say every month. By
investing a fixed sum each month, you buy fewer units when the price is higher and more
units when the price is low, thus bringing down your average cost per unit. This is called
rupee cost averaging and is a disciplined investment strategy followed by investors all
over the world. You can also avail the systematic investment plan facility offered by
many open end funds.
Step Five- Start early
It is desirable to start investing early and stick to a regular investment plan. If you start
now, you will make more than if you wait and invest later. The power of compounding

lets you earn income on income and your money multiplies at a compounded rate of
return.
Step Six - The final step
All you need to do now is to for online application forms of various mutual fund schemes
and start investing. You may reap the rewards in the years to come. Mutual Funds are
suitable for every kind of investor - whether starting a career or retiring,
conservative or risk taking, growth oriented or income seeking
RIGHTS OF A MUTUAL FUND UNIT HOLDER
A unit holder in a Mutual Fund scheme governed by the SEBI (Mutual Funds)
Regulations is entitled to:
1) Receive unit certificates or statements of accounts confirming the title within 6
weeks from the date of closure of the subscription or within 6 weeks from the date
of request for a unit certificate is received by the Mutual Fund.
2) Receive information about the investment policies, investment objectives,
financial position and general affairs of the scheme.

3) Receive dividend within 42 days of their declaration and receive the redemption
or repurchase proceeds within 10 days from the date of redemption or repurchase.
4) Vote in accordance with the Regulations to:-
 Approve or disapprove any change in the fundamental investment policies of the
scheme, which are likely to modify the scheme or affect the interest of the unit
holder. The dissenting unit holder has a right to redeem the investment.
 Change the Asset Management Company.
 Wind up the schemes.
5). Inspect the documents of the Mutual Funds specified in the scheme's offer
document.
CRITICISM OF MUTUAL FUNDS
The primary criticism of actively managed mutual funds comes from the historical fact
that, over long periods of time, most have not returned as much as an index fund would.
There are also other criticisms levied against mutual funds as a consequence of the first
criticism. One critique covers the concept of the sales load, an upfront or deferred fee as
high as 8.5 percent of the amount invested in a fund. Firstly, some critics do not believe
that this should be charged on a percentage basis instead of a flat fee basis. A so-called
flat fee, annual fee or wrap fee does very little for an investor other than insure that they
will pay an advisor a commission for as many years as their relationship exists. It helps

an advisor create predictable (and since most investments trend upwards) increasing
income flow. Secondly this payment for advice and other services seems dubious to these
critics because with so many mutual funds underperforming, but yet visibly attracting
money, the advice given seemingly would be bad advice.
Mutual funds are also seen by some to have a systemic conflict of interest with regards to
their size. Fund companies typically make money by charging a management fee of
anywhere between 0.5-2.5 percent of the funds total assets. Although theoretically this
could motivate them to cause the fund to perform well, since a well performing fund
would cause the amount invested in the fund to rise and thus increasing the fee earned, it
also could motivate the fund to focus on attracting more and more new investors, as the
new investors adding money to the fund would also cause the assets of the fund to
increase. Many investors believe however that the larger the pool of money one works
with, the harder it is to invest. Thus the harder it becomes for the mutual fund to perform
well. Thus a fund company can be focused on attracting new customers, hurting its
existing investors' performance. A great deal of the funds costs are flat and fixed costs,
such as the salary for the manager. Thus it can be more profitable to the fund to try and
allow it to grow as large as possible, instead of limiting its assets.
Other practices of mutual funds have been criticized from time to time, such as funds
allowing market timing. More recent criticisms have focused on the fund managers
accepting extravagant gifts in exchange for trading stocks through certain investment
banks, who presumably overcharge the fund compared to what another, non-gifting
investment bank would charge

TABLE OF MUTUAL FUND SCHEMES
Mutual
Fund
Type
Objective Risk
Investment
Portfolio
Who should
invest
Investment
horizon
Money
Market
Liquidity +
Moderate
Income +
Reservation
of Capital
Negligible
Treasury Bills,
Certificate of
Deposits,
Commercial
Papers, Call Money
Those who park
their funds in
current accounts
or short-term
bank deposits
2 days - 3
weeks

Short-
term
Funds
(Floating
- short-
term)
Liquidity +
Moderate
Income
Little
Interest
Rate
Call Money,
Commercial
Papers, Treasury
Bills, CDs, Short-
term Government
securities.
Those with
surplus
short-term funds
3 weeks -
3 months
Bond
Funds
(Floating
- Long-
term)
Regular
Income
Credit Risk
& Interest
Rate Risk
Predominantly
Debentures,
Government
securities,
Corporate Bonds
Salaried &
conservative
investors
More than
9 - 12
months
Gilt
Funds
Security &
Income
Interest
Rate Risk
Government
securities
Salaried &
conservative
investors
12 months
& more
Equity
Funds
Long-term
Capital
Appreciation
High Risk Stocks
Aggressive
investors with
long term out
look.
3 years plus
Index
Funds
To generate
returns that
are
commensurate
with returns
of respective
indices
NAV varies
with index
performance
Portfolio indices
like BSE, NIFTY
etc
Aggressive
investors.
3 years plus
Balanced
Funds
Growth &
Regular
Capital
Market Risk
Balanced ratio of
equity and debt
Moderate &
Aggressive
2 years plus

Income and Interest
Risk
funds to ensure
higher returns at
lower risk
FREQUENTLY USED TERMS
Net Asset Value (NAV)
Net Asset Value is the market value of the assets of the scheme minus its liabilities. Per
unit NAV is the net asset value of the scheme divided by the number of units outstanding
on the Valuation Date. It is calculated as
Total market value of the assets or securities – liabilities in the portfolio of the fund

Number of fund‘s units (shares) outstanding
Sale Price
It is the price you pay when you invest in a scheme. It is also called as Offer Price. It may
include a sales load.
Repurchase Price
It 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
It 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
It is a charge collected by a scheme when it sells the units. Also called as ‗Front-end‘
load. Schemes that do not charge a load are called ‗No Load‘ schemes. Generally it is
2.25% for subscription below Rs. 2 Crores, 1.25% for Rs. 2 Crore to Rs. 5 Crore and nil
above Rs. 5 Crore. However the load structure varies from company to company.
Repurchase or „Back-end‟ Load
It is a charge collected by a scheme when it buys back the units from the unit holders. It
is 2.25% and is charged if the investment is redeemed before six months from the date of
investment in a mutual fund.

RESEARCH METHODOLOGY
RESEARCH:-

Research is a voyage of discovery, a movement from unknown to known. In common
parlance, it refers to a scientific and systematic search for pertinent information on a
specific topic. It is the pursuit of truth with the help of study, observation, comparison
and experiment.
RESEARCH METHOD:-
Research methods may be understood as all those method / techniques that are used by
the researcher during the course of studying his research problem.
RESEARCH METHODOLOGY:-
Research methodology is a way to solve the problem scientifically and systematically.
In this we study the various steps that are generally adopted by researcher in studying his
research problem along with the logic behind them.
When we talk about research methodology, we not only talk of the research methods but
also the comparison of the logic behind the method we use in the context of our research
study and explain why we are using a particular method and why not others.
Research Objectives
 To compare performance of different mutual funds in last 1 year.
 To compare the return of a mutual fund using different investment ways.
 To develop a new investment way in mutual funds.

 To compare the different portfolios being maintained by selected mutual funds.
 To understand the concept and importance of Mutual Fund & Portfolio
Management in today‘s scenario.
RESEARCH DESIGN: -
A research design is the arrangement of conditions for collection and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in
procedure. The research design used in my study is basically exploratory in nature.
METHOD OF DATA COLLECTION: -
The study made in use secondary sources.
SECONDARY DATA COLLECTION: Secondary data have been collected from
various Books and websites..
SAMPLING DESIGN: -
A sample design is a definite plan for obtaining a sample from a given population .It
refers to the technique or the procedure the researcher would adopt in selecting items for

the sample i.e. the size of the sample. Judgment sampling has been adopted to select the
Mutual Funds.
SAMPL E SIZE: -
Nine
ANALYSIS OF DATA: -
The data after collection has to be processed and analyzed with the outline laid for the
purpose at the time of developing the research plan. This is essential for a scientific study
and for insuring that we have all relevant data for making contemplated comparison and
analysis.
Technically speaking processing implies editing, coding, classification and tabulation of
collected data so that they are amenable to analysis.
The term analysis refer to the computation of certain measures along with searching for
patterns of relationship that exist among data groups .To analyze the data percentages,
graphs, pie charts etc are used. After that interpretations are drawn and finally, a list of
suggestions and recommendations is put forward.
I hope the study will be interesting for a layman, a good experience for the
teacher and a key for the industrial pioneers in understanding and facing challenges.

Introduction to the Topic

The topic of study is “Comparative Analysis of Different Mutual Funds and
Investing Ways”. In it 9 mutual funds have been selected and there performance is
compared in last 1 year starting from 1st
February 2006 to 31st
January 2007. For this
there Net Asset Values is used and portfolio maintained is studied. Further returns of
different investing ways will be compared in the same mutual fund like One Time
Investment, Systematic Investment Plan. Further study would be done to find out that can
we develop a new way of investing in them and if yes than what the pre requisite for its
implementation. The whole study will be carried out in a manner like firstly different
mutual funds will be selected. Than there NAV‘s will be noted from 1st
February 2006 to
31st
January 2007. Using some calculations performance will be compared. Using the
Fact Sheet of the selected mutual fund minute details of each will be studied.
The Mutual Funds under study are as follows: -
SBI MAGNUM CONTRA
RELIANCE GROWTH FUND
FRANKLIN INDIA PRIMA FUND
HDFC EQUITY FUND
DSPML OPPORTUNITIES FUND
KOTAK BOND REGULAR FUND
JM INCOME FUND
LIC MF BOND
UTI BOND

SBI MUTUAL FUND

Incorporated 29 JUNE 1987
Ownership Public
Ownership Pattern Foreign - 37%,
Domestic-63%
Sponsor State Bank of India, Society
General Asset Management
Fund
The fund takes contrarian call on the markets. It has given compounded annual returns of
67% in past 5 years against the category average of 46%. It is the top wealth creator for
the year 2006-07. The fund has mainly shifted its focus to large cap space. It also
contains a large cash component of Rs 120 Crore, which amounts to about 10% of its
portfolio. This prudence, along with its successful bet on banking stocks has helped the
fund out perform the category.
Magnum Contra-G Fund Rating

Current Stats & Profile
Latest NAV 34.63 (12/03/07)
52-Week High 39.91 (06/02/07)
52-Week Low 25.02 (14/06/06)
Fund Category Equity: Diversified
Type Open End
Launch Date July 1999
Risk Grade Below Average
Return Grade High
Net Assets (Cr) 1,448.78 (28/02/07)
Benchmark BSE 100
Trailing Returns
As on 12 Mar 2007 Fund Category
Year to Date -7.65 -8.15
1-Month -9.08 -8.49
3-Month -0.83 -1.40
1-Year 13.17 6.47
3-Year 57.66 33.18
5-Year 53.60 37.90
Return Since Launch 32.58 --
Returns upto 1 year are absolute and over 1 year are
annualized.
Relative Performance (Fund Vs Category Average)
Portfolio
Security Instrument % Net Assets
Praj Industries Equity 4.97
Reliance Industries Equity 4.89
Hindustan Zinc Equity 3.78

Mahindra & Mahindra Equity 3.73
Jai Prakash Associates Equity 3.49
Aditya Birla Nuvo Equity 7.47
India Cements Equity 5.19
F A G Bearings India Equity 4.95
Motor Industries Co. Equity 4.42
Kansai Nerolac Paints Equity 3.1
Torrent Pharmaceuticals Equity 3.1
India Infoline Equity 2.97
C C L Products (I) Equity 2.88
Cummins India Equity 2.85
T V S Motor Co. Equity 2.84
Ashok Leyland Equity 2.61
Merck Ltd. Equity 2.53
Esab India Equity 2.48
Federal Bank Equity 2.09
Sundaram Fasteners Equity 1.86
Ruchi Soya Inds. Equity 1.81
Sesa Goa Equity 1.8
Raymond Equity 1.72
Indraprastha Gas Equity 1.36
Infotech Enterprises Equity 1.31
Ansal Prop & Infra Equity 1.27
T I L Equity 1.26
Ciba Speciality Chemicals Equity 1.24

Top Sectors in Portfolio
Composition of Various Sectors
0
2
4
6
8
10
12
14
16
18
Basic/Engineerin
HealthCare
Automobile
Services
FinancialServices
Metals&Metal
Energy
Sector
%Coposition Composition of Various
Sectors
Basic/Engineering 15.67
Diversified 13.61
Health Care 12.62
Construction 12.37
Automobile 11.13
FMCG 5.6
Services 5.53
Chemicals 4.34
Financial Services 3.77
Technology 2.21
Metals & Metal
Products 1.8
Textiles 1.72
Energy 10.83

RELIANCE MUTUAL FUND
Incorporated 30 June 1995
Ownership Private
Domestic-100%
Sponsor Reliance Capital Ltd
About Reliance Mutual Fund
Reliance Mutual Fund (RMF) was established as a trust under the Indian Trusts Act,
1882 with Reliance Capital Limited (RCL), as the Settlor/Sponsor and Reliance Capital
Trustee Co. Limited (RCTCL), as the Trustee.
RMF has been registered with the Securities & Exchange Board of India (SEBI) vide
registration number MF/022/95/1 dated June 30, 1995. The name of Reliance Capital
Mutual Fund has been changed to Reliance Mutual Fund effective from March 2004.
Reliance Mutual Fund was formed to launch various schemes under which units are
issued to the Public with a view to contribute to the capital market and to provide
investors the opportunities to make investments in diversified securities.

The main objectives of the Trust are:
To carry on the activity of a Mutual Fund as may be permitted at law and
formulate and devise various collective Schemes of savings and investments for
people in India and abroad and also ensure liquidity of investments for the Unit
holders;
To deploy Funds thus raised so as to help the Unit holders earn reasonable returns
on their savings and
To take such steps as may be necessary from time to time to realize the effects
without any limitation.
RELIANCE GROWTH FUND
It is a mid cap fund with around 75% in mid cap and a maximum of 25% in large caps.
Large cap exposure gives fund tremendous liquidity but not in bearish time. It uses
opportunistic style of investment i.e. looking at companies that are scalable in sectors
with growth and management passion to grow. It invests nearly in 60 stocks with a
bottom up approach. In top holdings, 5.3% of the assets are invested in Reliance
Industries. The fund also invests across sectors such as steel, infrastructure, textile &
cement, which move with economic and GDP growth. It is also one of the wealth creators
in the year 2006-07. Last year return of this fund is 34.22%.
FUND DATA
Structure Open-ended Equity Growth Scheme
Inception Date October 8, 1995
Corpus Rs 3214.06 crore (January 31, 2007)
Minimum Investment Rs 5,000
Fund Manager Mr. Sunil Singhania

Entry Load <2cr - 2.25%; >_2cr<5cr - 1.25 %;> _5cr - Nil
Exit Load Nil
Benchmark BSE 100 Index
SPECIAL FEATURE Reliance Any Time Money Card
INVESTMENT OBJECTIVE To achieve long-term growth of capital by investing in
Equity and equity related securities through a research-
Based investment approach.
PORTFOLIO OF RELIANCE GROWTH FUND
Holdings Weightage (%)
Equities 87.87
JSW Steels Ltd 4.51
Reliance Industries Ltd 3.93
Bharat Earth Movers Ltd 3.74
Jindal Saw Ltd 3.44
Divis Laboratories Ltd 2.84
Jaiprakash Associates 2.63
Northgate Technologies Ltd 2.55
Gujarat State Fertilizers & Chemicals Ltd 2.22
Cambridge Solutions Ltd 2.15
Adani Enterprises Ltd 2.03
Bombay Dyeing & Mfg Company Ltd 2.03
Bank Of Baroda 1.94
Escort India Ltd 1.94
Jain Irrigation Systems Ltd 1.93
Strides Arcolabs Ltd 1.89
Lupin Ltd 1.87
HCL Technologies Ltd 1.82
State Bank Of India 1.77
Greaves Cotton Ltd 1.61
Dena Bank 1.55

AIA Engineering Ltd 1.52
United Phosphorous Ltd 1.47
Jindal Steel & Power Ltd 1.45
Crompton Greaves Ltd 1.45
Maharashtra Seamless Ltd 1.40
Radico Khaitan Ltd 1.40
Gujarat Mineral Development Corporation 1.39
Bharati Shipyard Ltd 1.38
Orient Paper & Industries Ltd 1.34
Shivvani Oil And Gas Exploration 1.29
Allcargo Global Logistics Ltd 1.26
NIIT Technologies Ltd 1.24
Mahanagar Telephone Nigam Ltd 1.19
Bharat Petroleum Corp Ltd 1.17
Gammon India Ltd 1.16
Tamilnadu Newsprint Ltd 1.11
GHCL Ltd 1.06
Hexaware Technologies Ltd 1.03
Tata Motors 1.02
Educomp Solutions Ltd 1.02
Equity < 1% Of Corpus 14.11
Derivatives, Cash & Other Receivables 12.13
Grand Total 100.00
SECTOR ALLOCATION
Industry % Allocation
Ferrous Metals 10.81
Industrial Capital Goods 9.72
Software 8.08
Pharmaceuticals 6.89

Banks 5.27
Petroleum Products 5.11
Chemicals 4.53
Construction 4.14
Auto 3.94
Industrial Products 3.54
Fertilizers 3.39
Consumer Non Durables 2.93
Auto Ancillaries 2.72
Information Technology 2.55
Trading 2.03
Pesticides 1.47
Minerals/Mining 1.39
Cement 1.34
Oil 1.29
Transportation 1.26
Telecom - Services 1.19
Paper 1.11
Textiles – Cotton 0.97
Net Asset Value
Date Net Asset Value
Wednesday, February 01, 2006 201.18
Wednesday, March 01, 2006 210.22
Monday, April 03, 2006 229.75
Monday, May 01, 2006 251.68
Thursday, June 01, 2006 215.11
Monday, July 03, 2006 199.51
Tuesday, August 01, 2006 193.2
Friday, September 01, 2006 218.12

Tuesday, October 03, 2006 234.47
Wednesday, November 01, 2006 250.23
Friday, December 01, 2006 261.78
Tuesday, January 02, 2007 270.05
FRANKLIN INDIA PRIMA FUND
Fund
FRANKLIN India Prima Fund is a 12 year old diversified equity fund with a specific
focus on mid/small cap stocks from India‘s emerging businesses. The investment
approach is style-agnostic i.e. neither pure growth nor value addition. This style is chosen
keeping in mind that different styles tend to out perform in different market conditions. If
Rs. 1,000 is invested every month for last five years than there present value would have
been Rs 2.12 lakh. Its NAV shoot up from Rs 19.95 in 2001 to Rs. 174.84 in 2006. The
fund holds around 40 stocks in its portfolio, with the top 10 holdings accounting for
43.04% of its net assets. The fund holds about Rs 172 Crore as cash. The corpus of the
fund is Rs 2,418 Crore. The main feature of the fund is that it hasn‘t seen heavy
redemption pressures throughout its 12 years. It is also one of the wealth creator funds.
Last year return of this fund is 20.56%.
Fund Style

Fund Facts
Asset Allocation Portfolio Concentration
Equity 94% Top 3 sectors 41.90%
Debt 0% Top 5 holdings 26.67%
Other 6% Top 10 holdings 43.04%
Franklin India Prima-G
Fund Rating
Current Stats & Profile
Latest NAV 184.17 (12/03/07)
52-Week High 220.51 (16/01/07)
52-Week Low 139.55 (14/06/06)
Fund Category Equity: Diversified
Type Open End
Launch Date November 1993
Risk Grade Average
Return Grade Above Average
Net Assets (Cr) 1,583.62 (28/02/07)
Benchmark S&P CNX 500
Trailing Returns
As on 12 Mar 2007 Fund Category
Year to Date -14.08 -8.15
1-Month -11.76 -8.49
3-Month -6.78 -1.40
1-Year -2.52 6.47
3-Year 35.98 33.18
5-Year 48.12 37.90
Return Since Launch 24.51 --
Returns upto 1 year are absolute and over 1 year are
annualised.
Relative Performance (Fund Vs Category Average)

Portfolio
Stock Instrument % Net Assets
Aditya Birla Nuvo Equity 7.47
India Cements Equity 5.19
F A G Bearings India Equity 4.95
Ipca Laboratories Equity 4.31
Kansai Nerolac Paints Equity 3.1
Torrent Pharmaceuticals Equity 3.1
India Infoline Equity 2.97
C C L Products (I) Equity 2.88
Cummins India Equity 2.85
T V S Motor Co. Equity 2.84
Ashok Leyland Equity 2.61
Merck Ltd. Equity 2.53
Esab India Equity 2.48
Federal Bank Equity 2.09
Sundaram Fasteners Equity 1.86
Ruchi Soya Inds. Equity 1.81
Sesa Goa Equity 1.8
Raymond Equity 1.72
Indraprastha Gas Equity 1.36
Infotech Enterprises Equity 1.31
Ansal Prop & Infra Equity 1.27
T I L Equity 1.26
Ciba Speciality
Chemicals Equity 1.24

Top Holdings in Portfolio
% Composition
0
2
4
6
8
10
12
14
16
18
Basic/Engineering
Diversified
HealthCare
Construction
Automobile
FMCG
Services
Chemicals
FinancialServices
Technology
Metals&Metal
Products
Textiles
Sector
%Composition
Net Asset Value
Monday, April 03, 2006 201.75
Monday, May 01, 2006 209.27
Monday, July 03, 2006 162.61
Sector
%
Composition
Basic/Engineering 15.67
Diversified 13.61
Health Care 12.62
Construction 12.37
Automobile 11.13
FMCG 5.6
Services 5.53
Chemicals 4.34
Financial Services 3.77
Technology 2.21
Metals & Metal
Products 1.8
Textiles 1.72

HDFC MUTUAL FUND
Ownership Private
Domestic-100%
Sponsor Housing Development Finance Corporation Ltd.
Fund Speak
The main feature of this fund is that it has beaten its category for eight consecutive years.
The fund is not having large portfolio with number of stocks between 30– 40. Top 5
stocks account for 35-40%. The funds investment policy is to buy quality and sustainable
businesses at a reasonable price. So even if a sector don‘t perform well now, but has
potential to perform in future, the fund will hold on to it. The fund is also known for
quick sector move. The fund doesn‘t offer good returns in 1-2 years, but in long term. It
is also the wealth creator fund. Last year return of this fund is 31% nearly.

Portfolio
Name of Instrument Industry + Quantity Market/ % to
Fair
Value NAV
(Rs. In
Lakhs)
EQUITY & EQUITY
RELATED
Lanco Infratech Ltd Engineering 48,119 125.59 0.33
Subtotal 125.59 0.33
(a) Listed / awaiting listing on Stock Exchanges
Divis Laboratories Ltd. Pharmaceuticals 87,707 2,635.60 6.88
Infosys Technologies Ltd. Software 117,602 2,563.37 6.69
Bharat Heavy Electricals Ltd.
Industrial Capital
Goods 80,000 2,004.60 5.23
Bharti Airtel Ltd.
Telecom -
Services 310,000 1,955.17 5.10
Crompton Greaves Ltd.
Industrial Capital
Goods 700,000 1,854.30 4.84
State Bank of India Banks 140,000 1,843.87 4.81
Reliance Industries Ltd. Petroleum 140,000 1,742.23 4.55

Products
Apollo Tyres Ltd. Auto Ancillaries 472,796 1,726.18 4.51
Sun Pharmaceutical Industries
Ltd. Pharmaceuticals 164,531 1,670.24 4.36
ITC Ltd.
Consumer Non
Durables 900,000 1,665.90 4.35
Kansai Nerolac Paints Ltd.
Consumer Non
Durables 186,000 1,589.93 4.15
Thermax Ltd.
Industrial Capital
Goods 416,969 1,588.23 4.15
Oil & Natural Gas
Corporation Ltd. Oil 172,500 1,487.55 3.88
Sundaram Clayton Ltd. Auto Ancillaries 112,000 1,367.02 3.57
Grasim Industries Ltd. Cement 47,500 1,321.90 3.45
Hindustan Lever Ltd.
Consumer Non
Durables 500,000 1,176.00 3.07
Satyam Computer Services
Ltd. Software 240,000 1,102.80 2.88
Hindustan Petroleum
Corporation Ltd.
Petroleum
Products 325,000 915.85 2.39
Tata Motors Ltd. Auto 110,000 890.07 2.32
Aditya Birla Nuvo Ltd. Textile Products 75,928 881.83 2.30
Birla Corporation Ltd. Cement 224,964 825.84 2.16
ISMT Ltd. Metals
1,174,66
8 811.70 2.12
Hanung Toys & Textiles Ltd Textile Products 519,066 670.37 1.75
Solar Explosives Ltd. Chemicals 424,937 590.45 1.54
Eimco Elecon (India) Ltd. Engineering 145,072 507.10 1.32
Voltamp Transformers Ltd Power 75,890 452.61 1.18
Phoenix Lamps Ltd. Auto Ancillaries 308,766 389.82 1.02

Global Vectra Helicorp Ltd Transportation 159,810 256.26 0.67
Chennai Petroleum
Corporation Ltd.
Petroleum
Products 98,859 218.23 0.57
Great Eastern Shipping
Company Ltd. Transportation 96,000 209.81 0.55
EID Parry (India) Ltd.
Consumer Non
Durables 144,640 201.92 0.53
Great Offshore Ltd. Transportation 24,000 145.41 0.38
Subtotal 37,262.16 97.27
Total 37,387.75 97.60
MONEY MARKET INSTRUMENTS
Reverse Repos 873.55 2.28
Subtotal 873.55 2.28
Total 873.55 2.28
OTHERS
Net Current Assets 42.14 0.12
Net Assets 38,303.44 100.00
Top Holding
Sectoral Assets(%)
Industrial Capital Goods 14.22
Consumer Non Durables 12.10
Pharmaceuticals 11.24
Software 9.57
Auto Ancillaries 9.10
Petroleum Products 7.51
Cement 5.61
Telecom - Services 5.10
Banks 4.81

Assets(%)
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
IndustrialCapital
Goods
Pharmaceuticals
AutoAncillaries
Cement
Banks
Oil
Metals
Transportation
Power
Sector
%Assets
Net Asset Value
Monday, April 03, 2006 130.819
Monday, May 01, 2006 134.053
Thursday, June 01, 2006 112.237
Monday, July 03, 2006 114.59
Textile Products 4.05
Oil 3.88
Auto 2.32
Metals 2.12
Engineering 1.65
Transportation 1.60
Chemicals 1.54
Power 1.18
Money Market
Instruments/Net
Receivables 2.40

DSP Merrill Lynch Opportunities Fund
Fund
The fund maintains a complicated portfolio. The fund has constantly figured in the top
25% of its category. The funds mandate is to move around promising sectors. The
portfolio is highly diversified. Technology stock is the favourite, but fund also has
automobiles, FMCG, metals and engineering. If a sector isn‘t performing the fund
believes in buy and hold strategy. There is no mid and small cap stock in the portfolio as
the exposure doesn‘t typically exceeds 30%. Its fund managers are Mr. Anup
Maheshwari and Mr. Soumendra Lahiri. It is also a wealth creator fund. Last year return
of this fund is 36.4%.
Type of Scheme: Open ended growth scheme
Options available: Growth
Dividend
Payout
Reinvest
Minimum Application
amount:
First Purchase - Rs. 5,000/-
Subsequent Purchase - Rs. 1,000/-
Entry Load:  For Regular investments

2.25% : For investments < Rs 5.0 crs
Nil : For investments >= Rs 5.0 crs
 For SIP investments
1%
Exit Load: NIL
Contingent Deferred
Sales Charge (CDSC):
 For SIP investments
1.25% : If investment is redeemed before the
completion of 2 years
Nil : If investment is redeemed on or after the
completion of 2 years
Under normal circumstances, it is anticipated that the asset allocation shall be as follows:
Indicative Asset Allocation
Instrument
Indicative Allocation (% of
Corpus)
Risk Profile
Equity and equity-related
securities
80% - 100% Medium to High
Fixed income securities
(debt* and money market
securities)
0% - 20% Low to Medium
*Debt securities/instruments are deemed to include securitised debts.
HIGHLIGHTS
Cut Off Time - Subscription 3:00 PM

Cut Off Time -Redemption 3:00 PM
Cut Off Time - Switching 3:00 PM
Redemption cheques issued^
Normally within 3 Business Days of the
receipt of redemption request
Systematic Investment Plan (SIP) Monthly and Quarterly Options available
Minimum Investment for SIP Rs. 2000/- (Effective November 15,2006)
Systematic Withdrawal Plan (SWP)
Weekly, Monthly and Quarterly Options
available
Minimum Withdrawal for SWP Rs. 1,000/-
Systematic Transfer Plan (STP)
Weekly, Monthly and Quarterly Options
available
Minimum Transfer for STP Rs. 1000/-
INVESTMENT OBJECTIVE
An Open Ended growth Scheme, seeking to generate long term capital appreciation and
whose secondary objective is income generation and the distribution of dividend from a
Portfolio constituted of equity and equity related securities concentrating on the
Investment Focus of the Scheme.
ASSET ALLOCATION
Equity & Equity related securities: 80% - 100%
Fixed Income securities (Debt* & Money market securities): 0% - 20%.
Debt securities/ instruments are deemed to include securitised debts

Portfolio
Sr.No. Name of the Instrument Industry Market Value % to Net Assets
(Rs. In lakhs)
EQUITY & EQUITY RELATED
(a) Listed / awaiting listing on the stock exchanges
1 Reliance Industries Petroleum Products 6,338.44 4.26%
2 L&T Industrial Capital Goods 5,621.09 3.78%
3 Infosys Technologies Software 5,553.37 3.73%
4 Tata Consultancy Services Software 4,632.03 3.11%
5 Reliance Communication 4,279.49 2.88%
6 Grasim Industries Cement 4,105.98 2.76%
7 Bharti Televentures Telecom - Services 4,095.93 2.75%
8 ONGC Oil 4,072.42 2.74%
9 Zee Entertainment Media & Entertainment 4,061.53 2.73%
10 Satyam Computer Services Software 3,972.92 2.67%
11 Aditya Birla Nuvo Textile Products 3,736.21 2.51%
12 Tata Motors Auto 3,556.37 2.39%
13 Jaiprakash Industries Construction 3,502.68 2.35%
14 Crompton Greaves Industrial Capital 3,420.59 2.30%
Goods
15 Deccan Chronicle Holdings Media & 3,277.04 2.20%
Entertainment
16 BHEL Industrial Capital Goods 3,228.42 2.17%
17 State Bank of India Banks 3,189.03 2.14%
18 ITC Consumer Non Durables 3,066.23 2.06%
19 Sterlite Industries Non - Ferrous Metals 2,763.33 1.86%

20 Century Textiles Cement 2,756.03 1.85%
21 Gujarat Ambuja Cements Cement 2,689.09 1.81%
22 Mahindra & Mahindra Auto 2,657.02 1.79%
23 ICICI Bank Banks 2,503.18 1.68%
24 Dr. Reddy‘s Laboratories Pharmaceuticals 2,198.83 1.48%
25 TV 18 Media & Entertainment 2,167.36 1.46%
26 Hindustan Lever Consumer Non Durables 2,035.25 1.37%
27 MphasiS BFL Software 1,995.66 1.34%
28 Ansal Properties Construction 1,961.41 1.32%
29 Siemens Industrial Capital Goods 1,880.10 1.26%
30 Bharat Electronics Industrial Capital Goods1,784.84 1.20%
31 Amtek Auto Auto Ancillaries 1,754.56 1.18%
32 Wire and Wireless Media & Entertainment 1,722.55 1.16%
33 Voltas Consumer Durables 1,627.39 1.09%
34 Lanco Infratech Engineering 1,623.97 1.09%
35 HCL Technologies Software 1,559.48 1.05%
36 Hindustan Construction Construction 1,463.70 0.98%
37 Karur Vysya Bank Banks 1,374.13 0.92%
38 United Phosphorus Pesticides 1,307.21 0.88%
39 BPCL Petroleum Products 1,268.59 0.85%
40 ACC Cement 1,245.82 0.84%
41 Tech Mahindra Software 1,199.95 0.81%
42 Birla Corporation Cement 1,194.11 0.80%
43 Jindal Saw Pipes Industrial Capital Goods 1,162.32 0.78%
44 Cipla Pharmaceuticals 1,094.23 0.74%
45 IOC Petroleum Products 1,087.51 0.73%
46 SAIL Ferrous Metals 1,075.56 0.72%
47 Hindalco Non - Ferrous Metals 1,051.35 0.71%
48 IPCL Petroleum Products 1,047.60 0.70%
49 Bombay Dyeing Chemicals 1,009.92 0.68%

50 Graphite India Industrial Products 949.62 0.64%
51 Colgate Consumer Non Durables 936.43 0.63%
52 Hexaware Technologies Software 918.13 0.62%
53 GE Shipping Transportation 869.41 0.58%
54 Mcleod Russell Consumer Non Durables 776.29 0.52%
55 NRB Bearings Industrial Products 764.44 0.51%
56 Sun TV Media & Entertainment 755.82 0.51%
57 Pantaloon Retail Retailing 752.44 0.51%
58 B L Kashyap & Sons Construction 741.82 0.50%
59 HPCL Petroleum Products 717.67 0.48%
60 Hindalco Rights Non - Ferrous Metals 690.61 0.46%
61 DCM Shriram Consolidated Fertilisers 652.77 0.44%
62 Financial Technologies Software 634.71 0.43%
63 Mastek Software 601.11 0.40%
64 Nestle Consumer Non Durables 579.26 0.39%
65 Bannari Amman Sugar Consumer 567.27 0.38%
Non Durables
66 Karur Vysya Bank - Rights Banks 540.97 0.36%
67 Sesa Goa Ferrous Metals 315.16 0.21%
68 I-Flex Solutions Software 291.70 0.20%
69 Centurion Bank of Punjab Banks 284.10 0.19%
70 Bajaj Auto Auto 277.22 0.19%
71 Maruti Udyog Auto 274.24 0.18%
72 Voltamp Transformers Industrial Capital 114.52 0.08%
Goods
73 Network18 Media & Entertainment 78.90 0.05%
Total 140,056.43 94.11%
DERIVATIVES
74 ICICI Feb 2007 Banks 1,293.32 0.87%
75 BHEL Feb 2007 Industrial Capital Goods 622.16 0.42%

76 Bharti Feb 2007 Telecom - Services 315.72 0.21%
77 Century Textiles Feb 2007 Cement 230.92 -0.16%
Total 2,000.28 1.34%
MONEY MARKET INSTRUMENTS
Cash & Equivalent
CBLO / Reverse Repo Investments 6,417.46 4.31%
Net Receivables / (Payables) 347.60 0.23%
Total 6,765.06 4.55%
Grand Total 148,821.77 100.00%
Major Holdings
Sector % Assets
MEDIA &
ENTERTAINMENT 8.11
CEMENT 7.9
PETROLEUM
PRODUCTS 7.03
BANKS 6.17
TELECOM - SERVICES 5.84
CONSUMER NON
DURABLES 5.35
CONSTRUCTION 5.15
AUTO 4.55
NON - FERROUS
METALS 3.03
OIL 2.74
TEXTILE PRODUCTS 2.51
PHARMACEUTICALS 2.21
AUTO ANCILLARIES 1.18
INDUSTRIAL 1.15

% Assets
0
2
4
6
8
10
12
14
16
MEDIA&
PETROLEUM
TELECOM-
CONSTRUCTION
NON-FERROUS
TEXTILE
AUTO
CONSUMER
FERROUS
CHEMICALS
RETAILING
CASH&
INDUSTRIAL
Sector%Assets
Transportation has a share of 0.58% and Retailing has a share of 0.51% in the portfolio.
Net Asset Value
Monday, April 03, 2006 49.51
Monday, May 01, 2006 51.84
Monday, July 03, 2006 43.44
PRODUCTS
CONSUMER DURABLES 1.09
ENGINEERING 1.09
FERROUS METALS 0.93
PESTICIDES 0.88
CHEMICALS 0.68
FERTILISERS 0.44
CASH & EQUIVALENT 4.55
SOFTWARE 14.35
INDUSTRIAL CAPITAL
GOODS 11.98

KOTAK MAHINDRA MUTUAL FUND
Ownership Private
Domestic-100%
Sponsor Kotak Mahindra Finance Ltd
Corpus Rs. 52.38 Crore
Ideal Investment Horizon 1-2 year
Fund Manager Mr. Ritesh Jain
Kotak Mahindra is one of India's leading financial institutions, offering complete
financial solutions that encompass every sphere of life. From commercial banking, to
stock broking, to mutual funds, to life insurance, to investment banking, the group caters
to the financial needs of individuals and corporates.
The group has a net worth of around Rs.2,900 crore and employs around 8,800
employees across its various businesses servicing around 2 million customer accounts
through a distribution network of branches, franchisees, representative offices and

satellite offices across 282 cities and towns in India and offices in New York, London,
Dubai and Mauritius.
Kotak Mahindra Asset Management Company Limited (KMAMC), a wholly owned
subsidiary of KMBL, is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF).
KMAMC started operations in December 1998 and has over 4 Lac investors in various
schemes. KMMF offers schemes catering to investors with varying risk - return profiles
and was the first fund house in the country to launch a dedicated gilt scheme investing
only in government securities.
Fund
This fund has generated a decent income for its investors with reasonably low level of
volatility. 60-70% of its portfolio consists of high yield assets such as bonds, commercial
paper, corporate deposits and securitised debts. The balance is employed in riskier
government securities. Risk management is most important for this fund. Emphasis on
high yield portfolio has kept the fund‘s volatility low. It is the fourth best performing
income fund in past six months based on returns. The portfolio of the scheme consists of
debt and money market instruments. The investment strategy is to invest across wide
maturity horizons and different kind of issuers in debt market, the G-Sec component is
normally maintained between 30-50% and it generally doesn‘t invest in corporate bonds
with less than AA rating. It is to be noted that NAV of this fund never fell down, even
when the Sensex was down. The fund is income generator. Last year return of this fund is
7%.

Net Asset Value
Monday, April 03, 2006 18.3392
Monday, May 01, 2006 18.4542
Thursday, June 01, 2006 18.5166
Monday, July 03, 2006 18.6115

Portfolio

JM INCOME FUND

Inception 1st
April, 1995
Fund Manager Mr. Dwijendra Srivastava
Bench Mark Index CRISIL COMPOSITE BOND FUND INDEX
Corpus Rs 26.58 Crore.
Investment Objective
To generate stable long term returns with low risk strategy and capital appreciation/
accretion through investment in debt instruments and related securities besides
preservation of capital.
JM Financial Mutual Fund is one of India's first private sector mutual funds-an integral
part of the first wave that commenced operations in 1993-94. Today, they are among the
top most mutual funds in the country, ranked by assets managed, and enjoy a superior
performance record.
The Group's origins can be traced back to the 1950s when the Kampani family began to
get involved in India's then nascent capital markets. J.M. Financial and Investment
Consultancy Services was founded on September 15, 1973. Under the leadership of
Chairman Nimesh N. Kampani, the JM Group has played a stellar and multi-faceted role
in the development of India's capital markets. Apart from helping companies raise
finance, JM has also been instrumental in educating a burgeoning and prospering middle

class about the advantages of investing in blue chip companies. In 1999, they commenced
a joint venture with Morgan Stanley Dean Witter, that today spans investment banking,
broking, fixed income and retail distribution.
JM Financial Asset Management Private Limited, the Asset Management Company of
JM Financial Mutual Fund, is not a part of this joint venture. Sponsored by J.M. Financial
and Investment Consultancy Services Pvt. Ltd., and co-sponsored by JM Financial Ltd.,
JM Financial Asset Management Private Limited started operations in December 1994
with a simultaneous launch of three funds-JM Liquid Fund (now JM Income Fund), JM
Equity Fund and JM balanced Fund. Today, JM Financial Mutual Fund offers a bouquet
of funds that caters to the diverse needs of both its institutional and individual investors.
Their mission is to manage risk effectively while generating top quartile returns across all
product categories. They believe that to cultivate investor loyalty, they must provide a
safe haven for their investments.
They are focused on helping their investors realize their investment goals through prudent
advice, judicious fund management, impeccable research, and strong systems of
managing risk scientifically.
Fund
The fund has given a one year return of 2.6% and five year return of 7.7%. The
philosophy behind investment is that invest in papers that offers value to the investor i.e.
they consider the relative value and the spread offered by the paper in a maturity bucket
instead of just the absolute yield. The fund is in medium risk-return segment. The net
assets are mainly invested in AAA rated instruments. The top 5 holdings account for
55.6% of total assets. The major risks associated are Interest Rate Risk, Liquidity Risk,
and Reinvestment Risk. Nearly 25% of total assets are held as cash. The portfolio
basically includes corporate bonds, money market instruments, g-sec investments. The
fund is income generator. Last year return of this fund is 3%.

Portfolio

Net Assets Value
Monday, April 03, 2006 27.7041
Monday, May 01, 2006 27.8435
Thursday, June 01, 2006 27.9194
Monday, July 03, 2006 27.8875

UTI BOND FUND
UTI Mutual Fund is managed by UTI Asset Management Company Private Limited who
has been appointed by the UTI Trustee Company Private Limited for managing the
schemes of UTI Mutual Fund and the schemes transferred / migrated from UTI Mutual
Fund.
The UTI Asset Management Company has its registered office at : UTI Tower, Gn
Block, Bandra - Kurla Complex, Bandra (East), Mumbai - 400 051 will provide
professionally managed back office support for all business services of UTI Mutual Fund
(excluding fund management) in accordance with the provisions of the Investment
Management Agreement, the Trust Deed, the SEBI (Mutual Funds) Regulations and the
objectives of the schemes. State-of-the-art systems and communications are in place to
ensure a seamless flow across the various activities undertaken by UTI AMC.
UTI AMC is a registered portfolio manager under the SEBI (Portfolio Managers)
Regulations, 1993 on February 3 2004, for undertaking portfolio management services
and also acts as the manager and marketer to offshore funds through its 100 % subsidiary,
UTI International Limited, registered in Guernsey, Channel Islands.
UTI Mutual Fund has come into existence with effect from 1st February 2003. UTI Asset
Management Company presently manages a corpus of over Rs. 34500 Crore.
UTI Mutual Fund has a track record of managing a variety of schemes catering to the

needs of every class of citizenry. It has a nationwide network consisting 70 UTI Financial
Centers (UFCs) and UTI International offices in London, Dubai and Bahrain. With a
view to reach to common investors at district level, 4 satellite offices have also been
opened in select towns and districts. It has a well-qualified, professional fund
management team, who has been highly empowered to manage funds with greater
efficiency and accountability in the sole interest of unit holders. The fund managers are
also ably supported with a strong in-house equity research department. To ensure better
management of funds, a risk management department is also in operation.
It has reset and upgraded transparency standards for the mutual funds industry. All the
branches, UFCs and registrar offices are connected on a robust IT network to ensure cost-
effective quick and efficient service. All these have evolved UTI Mutual Fund to position
as a dynamic, responsive, restructured, efficient, and transparent and SEBI compliant
entity.
Fund
It is a income scheme with relatively low volatility and stable returns. Time horizon of
investment is medium. Investing way being conservative, so a portfolio of Corporate
Bonds and g-sec is made. The fund has seen a slow but sure growth in NAV. The fund
avoids extreme swings in either maturity or duration. It has a corpus of Rs. 388.98 Crore.
The top 10 holdings has major share of corporate bonds than g-sec. nearly 61.7% holding
is of AAA rated bonds. Emphasis is on adding value through multiple, diversified
strategies combined with volatility analytics, and adjustment to traditional variables such
as sector, coupon & quality of companies. The average maturity of its portfolio is 3 years.
Its fund manager is Mr. Amandeep Chopra. Last year return of this fund is 4.7%.
Portfolio
NAME OF THE INSTRUMENT QUANTITY
MARKET-
VALUE
% TO
NAV
Debt Instruments -

(a) Listed/awaiting listing on Stock Exchanges
NCDR 7.86% UTI BANK LTD. MATURING 25/07/2012 300 3001.23 9.58
NCD 6% TATA TEA LTD. MATURING 08/06/2007 20 2278.06 7.27
NCD 8.65% CITIFINANCIAL CONSUMER FINANCE INDIA LTD. MATURING
05/08/2008 150 1484.03 4.74
NCDR 7.45% HDFC LTD. MATURING 10/08/2009 100 1004.8 3.21
NCD 8.7% HINDALCO INDUSTRIES LTD. MATURING 23/04/2007 200 1001.46 3.2
NCD 8.78% POWER FINANCE CORPORATION LTD. MATURING 11/12/2016 100 976.21 3.12
NCD 14.75% RELIANCE INDUSTRIES LTD. MATURING 13/02/2008 1000000 686.39 2.19
NCD 8.71% INDIAN RAILWAYS FIN CORPN LTD. MATURING 15/03/2007 50 500.72 1.6
NCD 9.25% LIC HOUSING FINANCE LTD. MATURING 18/02/2009 3 299.8 0.96
NCD 6.98% INDIAN RAILWAYS FIN CORPN LTD. MATURING 31/03/2007 30 299.78 0.96
TOTAL:(a) Listed/awaiting listing on Stock Exchanges 11532.48
(b) Unlisted
NCDR 6.58% INDUSTRIAL DEVELOPMENT BANK OF INDIA LIMITED.
MATURING 23/08/2010 250 2500 7.98
PTC 8.8479% ICICI BANK LTD MATURING 22/10/2009 25 2366.27 7.55
NCD 6.58% TATA SONS LTD. MATURING 14/05/2008 15 1452.54 4.64
PTC 0% TATA MOTORS LTD. MATURING 14/01/2008 15 1090.64 3.48
NCD 13.05% HONGKONG & SHANGHAI BANKING CORP.LT MATURING
10/08/2009 10 1079.8 3.45
NCD 8.75% CITICORP FINANCE INDIA LTD. MATURING 12/09/2009 100 986.82 3.15
PTC 11.22% STANDARD CHARTERED BANK MATURING 15/05/2014 1000000 736.73 2.35
PTC 0% ICICI BANK LTD MATURING 07/02/2009 20 536.45 1.71
NCD 11.75% CITIBANK N.A. MATURING 31/01/2010 5 530.98 1.69
PTC 11.85% LIC HOUSING FINANCE LTD. MATURING 01/04/2007 25 0.64 *
PTC 11.85% HDFC LTD. MATURING 01/06/2007 20 0.63 *
PTC 10.25% LIC HOUSING FINANCE LTD. MATURING 01/05/2007 7 0.25 *
TOTAL:(b) Unlisted 13096.69
TOTAL:Debt Instruments - 24629.17
Others -
GSEC 7.59% RESERVE BANK OF INDIA MATURING 23/03/2015 150000000 1450.35 4.63
C D KOTAK MAHINDRA BANK LTD. MATURING 21/12/2007 100000000 928.03 2.96
GSEC 7.44% RESERVE BANK OF INDIA MATURING 23/03/2012 85000000 826.64 2.64
TOTAL: 3205.02
NET CURRENT ASSETS 0 2729.61 8.71
C P EXIM BANK MATURING 12/07/2007 80000000 769.08 2.45
TOTAL: 3498.69
TOTAL:Others - 6703.71

TOTAL:UTI-Bond Fund 31332.88
Net Asset Value
Monday, April 03, 2006 20.6422
Monday, May 01, 2006 20.7818
Thursday, June 01, 2006 20.8577
Monday, July 03, 2006 20.8763

LIC Mutual Fund Bond
Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989 and
contributed Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was
constituted as a Trust in accordance with the provisions of the Indian Trust Act, 1882.
The Settlor is not responsible for the management of the Trust. The Settlor is also not
responsible or liable for any loss or shortfall resulting in any of the schemes of LIC
Mutual Fund.
The Trustees of the LIC Mutual Fund have exclusive ownership of Trust Fund and are
vested with general power of superintendence, discretion and management of the affairs
of the Trust. LIC Mutal Fund Asset Management Company Ltd. was formed on 20th
April 1994 in compliance with the Securities and Exchange Board of India (Mutual
Funds) Regulations, 1993. The Company commenced business on 29th April 1994. The
Trustees of LIC Mutual Fund have appointed LIC Mutual Fund Asset Management
Company Ltd. as the Investment Managers for LIC Mutual Fund. The Trustees are
responsible for appointing a Custodian. The Trustees should also ensure that the activities
of the Trust and the Asset Management Company are in accordance with the Trust Deed
and the SEBI Mutual Fund Regulations as amended from time to time. The Trustees have
also to report periodically to SEBI on the functioning of the Fund.

The investors under the schemes can obtain a copy of the Trust Deed, the text of the
concerned Scheme as also a copy of the Annual Report, on a written request made to the
LIC Mutual Fund Asset Management Company Ltd.
Fund
Life Insurance Corporation Mutual Fund Bond is one of the consistent performers in the
income category fund. This is due to high exposure to corporate bonds. In August 2006 it
was having 87.4% of its net assets as corporate bonds. It is the only income fund that
doesn‘t give exposure to government security. The average maturity of its portfolio is 1.3
years. Ten year yield of the fund is nearly 7.6-7.7%. In its portfolio 24.3% holding is of
AA- & AA+ bonds. The annual average return is 7.75% in comparison to the category
average of 7.34%. Last year return of this fund is 4.43%.
Net Assets Value
Monday, April 03, 2006 19.1114
Monday, May 01, 2006 19.2687
Thursday, June 01, 2006 19.3326
Monday, July 03, 2006 19.3877

Portfolio
Debt Instruments - Bonds/Debentures
Listed / Awaiting Listing on Stock Exchanges
I C I C I BANK Banks AAA 1800 1,839.23 17.1
T I S C O
Ferrous
Metals
AAA 1650000 1,794.02 16.67
A C C Cement AA+ 50 515.7 4.79
SUNDARAM FINANCE Finance AA+ 50 500 4.65
FINOLEX INDUSTRIES Chemicals AA- 5 493.58 4.59
GOVT. SECURITIES
Govt
Securities
Sovereign 500000 491.55 4.57
RABO INDIA FINANCE Finance P1+ 37 370 3.44
Privately placed / Unlisted
JSW STEEL
Ferrous
Metals
AA- 2200000 1,209.30 11.24
DSP ML CAPITAL Finance AAA(FSO) 100 1,000.00 9.29
KOTAK MAHINDRA
PRIME
Finance AA+ 100 1,000.00 9.29
Securitised Debt
INDIAN RETAIL ABS
TRUST
Finance AAA(SO) 3 294.86 2.74
ASSET SECURITIESFinance AAA(SO) 14 128.95 1.2

TRUST
Total: 9,637.19 89.57
Money Market & Net Receivables/Payables
Cash 'n' Call, Current
Assets & Receivables
1,121.64 10.43
Total: 1,121.64 10.43
Scheme Total: 10,758.83 100
Graphical Representation of the Portfolio
Net Assets
17.1
16.67
4.79
4.654.594.573.44
11.24
9.29
9.29
2.74
1.2
10.43
I C I C I BANK
T I S C O
A C C
SUNDARAM FINANCE
FINOLEXINDUSTRIES
GOVT. SECURITIES
RABO INDIA FINANCE
JSW STEEL
DSP ML CAPITAL
KOTAK MAHINDRA PRIME
INDIAN RETAIL ABS TRUST
ASSET SECURITIES TRUST
Cash 'n' Call, Current Assets & Receivables

Different Investing ways in Mutual Fund
There are basically two ways to invest in a Mutual Fund. These are: -
One Time Investment
Systematic Investment Plan (SIP)
Let us discuss each.
One time investment
In this way of investment investor pays the entire investment amount in one time only.
The minimum amount that must be invested in such a way is Rs. 5,000/- only. An entry
load of 2.25% (nearly every fund charges) has to be paid by the investor. Depending
upon the Net Asset Value (NAV) of the fund units are allotted to the investor. Let us
understand it with the help of an example.
Let an investor wants to invest Rs 12,000/- in one time only in Reliance Equity Fund. At
the date of investment let the NAV of the fund be Rs 12/- per unit. Than the number of
units that the investor will get is as follows: -
Total Investment Rs 12,000/-
NAV Rs 12/-

Entry Load 2.25%
Effective NAV that investor will get [Present Day NAV + 2.25% (Present Day NAV)]
i.e. 12 + (2.25*12)/100 = Rs 12.27/-
Units actually purchased by investor = Rs 12,000 / Rs 12.27 = 978 Units.
This way of investment is recommended for those investors who are sensitive because
"emotions" may make the investor susceptible to "mistakes in timings of his purchases
and sales". However with this way of investment the investor might loose future
opportunities as available in SIP due to fluctuations in Sensex.
Systematic Investment Plan (SIP)
SIP is a method of investing a fixed sum, regularly, in a mutual fund. It is very similar to
regular saving schemes like a recurring deposit.
An SIP allows you to buy units on a given date each month, so that you can implement an
investment / saving plan for yourself. Once you have decided on the amount you want to
invest every month and the mutual fund scheme in which you want to invest, you can
either give post-dated cheques or ECS instruction, and the investment will be made
regularly. SIPs generally start at minimum amounts of Rs 500 per month and the upper
limit for using an ECS is Rs 25000 per instruction. Therefore, if you wish to invest Rs
100,000 per month, you may need to do it on 4 different dates.
In this way of investment investor pays the entire investment amount over a time period
generally 1 year. The minimum amount that must be invested in such a way is Rs. 6,000/-
only i.e. Rs 500/- a month at least continuously for one year. An investor can invest any
amount in multiple of 5. Entry load of 2.25% (nearly every fund charges) has to be paid
by the investor every month. Depending upon the Net Asset Value (NAV) of the fund
units are allotted to the investor. Let us understand it with the help of an example.

Thesis portfolio management

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (20)

Ähnlich wie Thesis portfolio management

Ähnlich wie Thesis portfolio management (20)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

Thesis portfolio management