A SUMMER INTERNSHIP PROGRAM REPORT ON

MUTUAL FUNDS

By
K.Sai vikas
(212218672086)
At
KARVY STOCK BROKING PVT LTD

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 KARVY STOCK BROKING LTD.
A report submitted is a partial
Fulfilment of the requirement of MBA
Program AURORA PG COLLEGE HYD

Distribution list:

Computer guide: faculty guide:

Mr.Rajesh Kumar V Dr.Mohan Kumar

AURORA PG COLLEGE HYD

Date of submission: SEP26th2019

2
 AUTHORIZATION

This is to certified that this report is submitted in partial fulfilment of

the requirement of pg program of AURORA PG COLLEGE,HYDERABAD.

This report document titled: “MUTUAL FUNDS” is a submission of work

done by Mr.k sai vikas as a part of partial completion of this study at
Karvy Stock Broking Limited. during the internship program under the
guidance of Mr.Rajesh Kumar v.

This report has been formally submitted to prof, Dr Mohan Kumar,

AURORA PG COLLEGE,Hyderabad

k.Sai Vikas
212218672086
Batch 2018-2020
AURORA PG COLLEGE

3
 ACKOWLEDGEMENT

The satisfaction that accompanies the successful completion of any task would be incomplete
without mentioning people who made it possible, whose encouragement and consistent
guidance crowned my efforts with success.

I would sincerely like to thank Mr S Venkat Srinivas Reddy (Zone head, Karvy Stock Broking LTD,
Hyderabad) for giving me the opportunity to do my summer internship project at Karvy Stock
Broking Ltd, And for all the support and encouragement during the assignment.

I am highly indebted to Mr Rajesh.v, Senior manager, Karvy Stock Broking ltd., and other
employees at the Stock broking group for their suggestions, constant inspiration and prompt
guidance to carry out and complete this study.

A special thanks to all my work mates,college and seniors. All of them have been very kind
whenever needed. I am highly grate full to AURORA PG COLLEGE for helping me get such a
wonderful experience and know the coorperate world better

Finally I express my profound thanks to my teachers, my family as well as friends for their
constant encouragement.

k.Sai Vikas
212218672086
Batch 2018-2020
AURORA PG COLLEGE

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 TABLE OF CONTENTS

Acknowledgment Page no: 5

List of Tables Page no: 6

List of Illustrations Page no: 7-8

Summary Page no: 9

Introduction Page no: 10-12

a) Global Scenario
b) Indian Scenario

An Overview of the Company Page no:12-31

a) Introduction
b) Objectives &Limitations
c) Methodology

Results or Findings Page no:32-38

Page no:39
Discussions

Conclusions and/or Page no:39

Recommendations

Appendices Page no: 40

Bibliography Page no:41

Glossary Page no:42

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 List of Tables & Illustrations:

Table 1 Page no 33
(SBI Blue Chip Fund Details and Returns)

Table 2 Page no 34
(Kotak Select focus regular fund details and
returns)

Table 3 Page no 34
(UTI Bond fund details & returns)

Table 4 Page no 35
(Axis Dynamic fund details and returns)

Table 5 Page no 35
(Birla sun life balanced 95 details & returns)

Table 6 Page no 36
(Reliance regular saving fund)

Table 7 Page no 37
(Asset allocation of each select fund)

Table 8 Page no 38
(Valuation and performance of each select
fund)

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 ABBREVATION:
ADRs - American Depository Receipts
AMFI - Association of Mutual Funds in India
AUM - Assets under Management
BSE - Bombay Stock Exchange
C&D - Corporatisation and Demutualisation
CAGR - Compounded Annual Growth Rate
CC - Clearing Corporation
CDSL - Central Depositary Services (India) Limited
CH - Clearing House
MSX - Madras Stock Exchange
ECS - Electronic Clearing Scheme
EDIFAR - Electronic Data Information Filing and Retrieval
EPS - Earnings Per Share
FIIs - Foreign Institutional Investors
FMCG - Fast Moving Consumer Goods
GDP - Gross Domestic Product
GDRs - Global Depository Receipts
GDS - Gross Domestic savings
GETFs - Gold Exchange Traded Funds
GIC - General Insurance Corporation 14
ICICI - Industrial Credit and Investment Corporation of India
IDBI - Industrial Development Bank of India

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IFCI - Industrial Financial Corporation of India
IMSS - Integrated Market Surveillance System
IPF - Investor Protection Fund
IPO - Initial Public Offering
LIC - Life Insurance Corporation
MDA - Multiple Discriminate Analysis
MF - Mutual Fund
MIDC - Maharashtra Industrial Development Corporation
MNC - Multi National Company
NCAER - National Council for Applied Economic Research
NISM - National Institute of Securities Markets
NSCCL - National Securities Clearing Corporation Limited
NSDL - National Securities Depository Limited
NSC - National Savings Certificate
NSE - The National Stock Exchange
PAN - Permanent Account Number 15
PE ratio - Price Earnings ratio
PPF - Public Provident Fund
PSE - Public Sector Enterprises
QIBs - Qualified Institutional Buyers
RBI - Reserve Bank of India
RSEs - Regional Stock Exchanges
SEBI - Security Exchange Board of India
SGF - Settlement Guarantee Fund

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 SUMMARY
Primary investment objective of any individual or organisation is to maximize the returns and
minimizing Market risk and Credit risk through diversification Mutual Funds (MF) have become
one of the most attractive ways for the average person to invest their money. It is said that Bank
investment is the first priority of people to invest their savings and the second place is for
investment in Mutual Funds and other avenues. A Mutual Fund pools resources from thousands
of investors and then diversifies its investment into many different holdings such as stocks,
bonds, or Government securities in order to provide high relative safety and returns.
The Project is a ‘FINANCE PROJECT’ which tries to explain in layman’s language about the
history, growth, & pros and cons of investing in Mutual Funds and the second part of it, mutual
portfolio and also investors preference while investing in mutual fund with questionnaire and
analysis of the questionnaire. The main objective of the project was to get an Overview of
Mutual Fund Industry, its set up, its working and to find out the risks and returns of Equity, on
various schemes available to customers.
The project includes a brief idea about the growth of MF industry (History), the broad idea
about the organization and concept of MF and SEBI Guidelines on Mutual Funds. There are
many improvements pending in the field and it has to happen as soon as possible so as to call
the MF industry as an organized and well-developed sector. The past performance of MF is not
necessarily indicative of future performance of the scheme and no
AMC guarantees returns and safety of principal.
Here I have a in dept study on mutual funds and created ideal mutual fund portfolios and also
have focused on investors perception and preferences while investing in mutual fund with
questionnaire and surveys. Mutual funds provide a better opportunity to achieve financial goals
provides a person choose the right fund that matches the risk return profile. Mutual fund is a
trust that pools the saving of a number of investors who share common financial goals. Indian
Mutual fund industry offers a plethora of schemes and serves broadly all types of investors.

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 AN OVERVIEW OF INDUSTRY

Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago.
The earliest records of security dealings in India are meagre and obscure. The East India
Company was the dominant institution in those days and business in its loan securities used to
be transacted towards the close of the eighteenth century. By 1830's business on corporate
stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading list was
broader in 1839, there were only half a dozen brokers recognized by banks and merchants
during 1840 and 1850. The 1850's witnessed a rapid development of commercial enterprise and
brokerage business attracted many men into the field and by 1860 the number of brokers
increased into 60. In 1860-61 the American Civil War broke out and cotton supply from United
States of Europe was stopped; thus, the 'Share Mania' in India begun. The number of brokers
increased to about 200 to 250. However, at the end of the American Civil War, in 1865, a
disastrous slump began (for example, Bank of Bombay Share which had touched Rs 2850 could
only be sold at Rs. 87). At the end of the American Civil War, the brokers who thrived out of Civil
War in 1874, found a place in a street (now appropriately called as Dalal Street) where they
would conveniently assemble and transact business. In 1887, they formally established in
Bombay, the "Native Share and Stock Brokers' Association" (which is alternatively known as
“The Stock Exchange "). In 1895, the Stock Exchange acquired a premise in the same street and
it was inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated. The Second
World War broke out in 1939. It gave a sharp boom which was followed by a slump. But, in
1943, the situation changed radically, when India was fully mobilized as a supply base. On
account of the restrictive controls on cotton, bullion, seeds and other commodities, those
dealing in them found in the stock market as the only outlet for their activities. They were

10
anxious to join the trade and their number was swelled by numerous others. Many new
associations were constituted for the purpose and Stock Exchanges in all parts of the country
were floated. The Uttar Pradesh Stock Exchange Limited (1940), Nagpur Stock Exchange Limited
(1940) and Hyderabad Stock Exchange Limited (1944) were incorporated. In Delhi two stock
exchanges - Delhi Stock and Share Brokers' Association Limited and the Delhi Stocks and Shares
Exchange Limited - were floated and later in June 1947, amalgamated into the Delhi Stock
Exchange Association Limited. Most of the exchanges suffered almost a total eclipse during
depression. Lahore Exchange was closed during partition of the country and later migrated to
Delhi and merged with Delhi Stock Exchange. Bangalore Stock Exchange Limited was registered
in 1957 and recognized in 1963.

STOCK EXCHANGE

The stock markets in India are regulated by the central government under the Securities
Contracts (Regulation) Act, 1956 which provides for the recognition of stock exchanges,
supervision and control of recognized stock exchanges, regulation of contracts in securities,
listing of securities, transfer of securities, and many other related functions. The Securities
and Exchange Board of India Act, 1992 provides for the establishment of the Securities and
Exchange Board of India (SEBI) to protect investors’ interest in securities and promote and
regulate the securities market.

1. Bombay Stock Exchange.

2. National Stock Exchange.

BOMBAY STOCK EXCHANGE

Bombay Stock Exchange is a voluntary, non-profit-making association of broker members. It

emerged as a premier stock exchange after 1960s. The increased pace of industrialization
caused by the two world wars, protection to the domestic industry, and government’s fiscal

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 policies aided the growth of new issues which, in turn, helped the BSE to prosper. BSE
dominated the Indian capital market by accounting for more than 60 per cent of the all-India
turnover.

NATIONAL STOCK EXCHANGE (NSE)

With the liberalization of the Indian economy, it was found inevitable to lift the Indian stock
market trading system on par with the international standards. On the basis of the
recommendations of high powered Pherwani Committee, the National Stock Exchange was
incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and Investment
Corporation of India, Industrial Finance Corporation of India, all Insurance Corporations,
selected commercial banks and others. Trading at NSE can be classified under two broad
categories:

(a) Wholesale debt market and

(b) Capital market.

NSE has several advantages over the traditional trading exchanges. They are as follows:

1) NSE brings an integrated stock market trading network across the nation.
2) Investors can trade at the same price from anywhere in the country since inter market
operations are streamlined coupled with the countrywide access to the securities.
3) Delays in communication, late payments and the malpractice’s prevailing in the
traditional trading mechanism can be done away with greater operational efficiency and
informational transparency in the stock market operations, with the support of total
computerized network.

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TRADING PATTERN OF THE INDIAN STOCK MARKET

Trading in Indian stock exchanges are limited to listed securities of public limited companies.
They are broadly divided into two categories, namely, specified securities (forward list) and non-
specified securities (cash list). Equity shares of dividend paying, growth-oriented companies
with a paid-up capital of at least Rs.50 million and a market capitalization of at least Rs.100
million and having more than 20,000 shareholders are, normally, put in the specified group and
the balance in non-specified group. A member broker in an Indian stock exchange can act as an
agent, buy and sell securities for his clients on a commission basis and also can act as a trader or
dealer as a principal, buy and sell securities on his own account and risk, in contrast with the
practice prevailing on New York and London Stock Exchanges, where a member can act as a
jobber or a broker only. The nature of trading on Indian Stock Exchanges are that of age old
conventional style of face-to-face trading with bids and offers being made by open outcry.
However, there is a great amount of effort to modernize the Indian stock exchanges in the very
recent times.

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 AN OVERVIEW OF THE COMPANY
The KARVY group was formed in 1983 at Hyderabad, India. Karvy ranks among the top player in
almost all the field it operates. Karvy Computers shares Ltd is India’s largest Register and
Transfer Agent with a client base of nearly 500 blue chips corporate managing over 2 core
accounts. Karvy stock brokers Ltd, member of National stock Exchange of India. With over
6,00,000 active accounts, it ranks among the top 5 Depository Participated in India, registered
with NSDL and CDSL karvy COM trade, Member of NCDEX and MCX ranks among the top0 3
commodity brokers in the country. Karvy Insurance Brokers is registered as a Broker with IRDA
and ranks among the top 5 insurance agent in the country. Registered with AMFI as a corporate
Agent Karvy is also among the top Mutual fund mobilize with over Rs. 5,000 cores under
management. Karvy Realty Services, which started in 2006, has quick established itself as broker
who adds value, in the realty sector. Karvy global offers niche off shoring services to client in the
US.
Karvy has 575 offices over 375 locations across India overseas at Dubai and New York.
Over 9,000 high qualified people staff Karvy.

Karvy – Early Days:-

Karvy the name comes from the names of the directors:
K – Kutumbha rao
A – Ajay Kumar
R – Rama Krishna
V – Vaidyanadan
Y – Yugandhar

The birth last of Karvy was on a modest scale in 1979. It began with the vision and enterprise of
a small group of practicing Chartered Accounts who founded the flagship company. Karvy
started with consulting and financial accounting and carved inroads into the field of registry and
share accounting by 1985. Since then, Karvy have utilized its experiences and superlative
enterprise to go from.
Strength to Strength ….. To better its services, to provide new ones, to innovative, diversity and
the process, evolved karvy as one of India’s premise integrated financial services enterprise.

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GROWTH AND DEVELOPMENT OF KARVY
Over the last 20 years Karvy has travelled the success route, towards building a reputation as an
integrated financial services provider, offering a wide spectrum of services. And they have made
the journey by taking the route of quality service. Path breaking innovation in service and
versatility in service.
Their highly qualified manpower, cutting-edge technology, comprehensive infrastructure and
total customer- focus has secured for us the position of an emerging financial services giant
enjoying the confidence and support of an enviable clientele across diverse fields in the
financial world.
With the experience of years of holistic financial behind us and years of complete expertise in
the industry to look forward to, they have now emerged as a premier integrated financial
services provider.
And today, they can look with pride at the fruits of their mastery and experience
Comprehensive financial services that are competently segregated to service and manage a
diverse range of customer requirements.

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 PRESENT STATUS OF THE KARVY
Present Karvy is a member of National stock Exchange (NSE), the Bombay stock Exchange (BSE),
and The Hyderabad stock Exchange (HSE).Market analysis and market predictions are done by
professional management team.
KARVY as covering the spectrum of financial services such as stock Broking Services, Advisory
Services, Stock broking ,Depository Participants, Distribution of financial products – mutual
funds, fixed deposits, equities, Insurance Broking Commodities Broking, Personal Finance
Advisory Services, Merchant Banking and corporate Finance, Placement Finance, Placement of
equity, IPO’s, among other.

VISION OF KARVY
To achieve and sustain market leadership, Karvy shall aim for complete customer satisfaction, by
combining its human and technological resources to provide world class quality services. In the
process Karvy shall strive to meet and exceed customer’s satisfaction and set industry
standards.
Their values and vision of attaining total competence in their servicing has served as the
building block for creating a great financial enterprise, which stands solid on their fortresses of
financial strength – their various companies.

MISSION OF KARVY

“Our mission is to be a leading and preferred services provider to our customers, and we aim to
achieve this leadership by building an innovative, enterprising, and technology driven
organization which will highest standards of services and business ethics.”

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MILE STONES OF KARVY

KARVY GROUP COMPANIES

 KARVY ONLINE
 KARVY DISTRIBUTION
 KARVY COMTRADE
 KARVY PRIVATE WEALTH
 KARVY DATA MANAGEMENT SERVICES LIMITED
 KARVY COMPUTERSHARE (P) LTD.
 KARVY REALITY
 KARY FINANCIAL SERVICES
 KARVY COMTRADE

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Member – National Stock Exchange (NSE), the Bombay Stock Exchange (BSE), and the
Hyderabad Stock Exchange (HSE),
Karvy Stock Broking Limited, one of the cornerstones of the Kavry edifice, flows freely toward
attaining diverse goals of the customer through varied services, creating a plethora of
opportunities for the customer by opening up investment vistas backed by research-based
advisory services. Here, growth knows no limits and success recognizes no boundaries. Helping
the customer create waves in his portfolio and empowering the investor completely is the
ultimate goal.
Why should Investors choose for KARVY …?
Excellence is next to nothing and here at Karvy everybody tries to offer excellence services to its
client through its offerings maintaining the Karvy culture which included:-
1. Controlled and low cost services culture:- Karvy is there to serve its client at the minimum
possible costs.
2. Longer volume processing capability:- Being the largest financial service provider in the
country. It has the unique distinction of operating its activities on a large scale which benefits all
the parties cordially.
3. Adherence to strict time Schedule:- Karvy knows that time is money and tries it best to finish
the task within the stipulated time schedule.
4. Expertise in coordinating Multi-location Responses:- Karvy has got a wide network and
hence I can find its branches at most of the places in India. Thus it enjoys its presence
everywhere and co-ordinates among itself in solving the quarries and in responding to any
situation.
5. Expertise in managing independent entities such as Banks, Post-offices, etc:- The work
culture of Karvy and the ethics followed inside Karvy Makes its workforce with everybody. So
the Karvy person establishes good coordination with independent entities too.
6. Pooling of Group Resources:- Karvy group consists of 8 subsidiaries. So it can easily pool up
its resource for accomplishment of its goals, whenever needed.

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 STOCK BROKING SERVICES
It is an undisputed fact that the stock market is unpredictable and yet enjoys a high success rate
as a wealth management and wealth accumulation option. The difference between
unpredictability and safety anchor in the market is provided by in –depth knowledge of market
functioning and changing trends, planning with foresight and choosing options with care. This is
what they provide in their Stock Broking services.
They offer services that are beyond just a medium for buying and selling stocks and
shares. Instead they provide services which are multi dimensional and multi-focused in their
scope. There are several advantages in utilizing their stock Broking services, which are the
reasons why it is one of the best in the country.
They offer trading on a vast platform; National Stock Exchange. Bombay Stock Exchange
and Hyderabad stock Exchange .More importantly, they make trading safe to the maximum
possible extent, by accounting for several risk and planning accordingly. They are assisted in this
takes by their in-depth research, constant feedback and sound advisory facilities. Their highly
skilled research team, comprising of technical analysts as well as fundamental specialists, secure
result-oriented information on market trends, market analysis and market predictions.
This crucial information is given as a constant feedback to their customers, through
daily reports delivered thrice daily; The Pre-session Report, where market scenario for the day is
predicted, The Mid- session Report, timed to arrive during lunch break, where the market
forecast for the rest of the day is given and the post-session Report, the final report for the day,
where the market and report itself is reviewed. To add to this repository of information, they
publish a monthly magazine.
“The Finapolis” which analyzed the latest stock market treads and takes a close look at the
various investment options, and products available in the market, while a weekly report, called
“Karvy Bazaar Baatein”, keeps clients more informed on the immediate trends in the stock
market. In addition, their specific industry reports give comprehensive information on various
industries. Besides this, they also offer special portfolio analysis packages that provide daily
technical advice on scraps for successful portfolio management and provide customized
advisory services to help you make the right financial moves that are specifically suited to their
portfolio.
Stock Broking services are widely networked across India, with the number of trading
terminals providing retail stock broking facilities. Its services have increasingly offered customer
oriented convenience, which they provide to a spectrum of investors. High-net worth or
otherwise, with equal dedication and competence.

19
But true to their spirit, this success is not their final destination, but just a platform to launch
further enhanced quality services to provide you the latest in convenient, customer-friendly
stock management.
Over the years Karvy have ensured that the trust of customers is their biggest returns.
Factors such as their success in the Electronic custody business has helped build on their
tradition of trust even more. Consequentially their retail client base expanded very fast.
To empower the investor further they have made serious efforts to ensure that their
research calls are disseminated systematically to all their stock broking clients through various
delivery channels like email, chat, SMS, phone calls etc.
Their foray into commodities broking has been path breaking and they are in the
process of converting existing traders in commodities into the more organized mainstream of
trading in commodity futures, both as a trading and risk hedging mechanism.
In the future, their focus will be emerging businesses and to meet this objective, they
have enhanced their manpower and revitalized their knowledge base with enhances focus on
Futures and Options as well as commodities business.

PRODUCT SEGMENT OF KSBL

 EQUITY
 DERIATIVE
 CURRENCY TRADING
 FUTURES AND OPTIONS (F&O)
 CUSTODY ACCOUNTS
 MUTUAL FUNDS
 INSURANCE
 LOANS AGAINST SHARE
 IPO
 PORTFOLIO MANAGEMENT
 PROPERTY SECURITY
 MARGIN FUNDING

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 “3CET” and “SWOT Analysis”

C – Company
C – Customer
C – Competitor
E – Environment
T – Technology.

S – Strength
W – Weakness
O – Opportunity
T – Threat.

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 COMPANY OVERVIEW
Our mission: To be the leading and preferred service provider to our customers, and we aim
to achieve this leadership position by building an innovative, enterprising, and technology
driven organization which will set the highest standards of service and business ethics.

Our Vision: Strive to be the leaders and experts through our processes, people and
technology offering the unique blend that delivers superior value by establishing and
maintaining the highest levels of services and professionalism.

 Karvy Started its business by a group of 5 people (Charted Accountants) in 1979.

 Karvy stands for
K – Kuntumbha rao
A – Ajay Kumar
R – Rama Krishna
V – Vaidyanadan
Y – Yugandhar
 CMD Of Karvy Group Of Companies is “C. Parthasarathy”
 Services provided by Karvy are
1985 – Registrar.
1990 – Financial product distribution/Retail Broking with HSE.
1995 – Merchant Banking/NSE Membership cash segment.
1997/1999 – Depository participant with NSDL & CDSL.
2001 – Private client group/Equity research/NSE membership/Derivatives.
2003 – Institutional Broking/Debt market broking/Commodities Broking/Insurance
Broking/Realty Broking/Online Retail Broking/Forex & Currencies Derivatives/Data
management/Insurance Repository/Analytics/Market Research.
 Karvy group of companies in INDIA,
They are,
Karvy Stock Broking ltd,
Karvy comtrade ltd,
Karvy financial services ltd,
Karvy realty (INDIA) ltd,
Karvy capital ltd,
Karvy investors services ltd,

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 Karvy Computershare pvt,
Karvy insurance repository ltd.

 Karvy group of companies across world

Karvy Inc, USA,
Karvy global services Inc, USA,
Karvy middle – east LLC, Dubai,
Karvy computer share WLL, Bahrain,
Karvy insights ltd,
Karvy analytics ltd,
Karvy solar power ltd.
 Karvy is present across 940 locations.
 Karvy has around 485 offices, 525 business associates.

Customers
 Karvy has a very large number of customer base.
 The customers are classified in to two types
1. Ultra HNI(High Network Individual)
(Net worth > 1 crore)
2. HNI(High Network Individual)
(Net worth 10 lakhs to 1 crore)
3. RETAIL
(Less than 10 lakhs

Segmentation
 Karvy uses demographic segmentation strategy and segment people based on their age and
risk appetite.
 Karvy uses selective specialization strategy for targeting.
 Target customers for the Karvy Stock Broking are Professionals, Business people and HNIs.
 Company focusing on Customer service, Customer retention and New Client Acquisition and
Advisory.

ADVERTISING

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 Tied up with different E-commerce websites like Flipkart and Amazon.
 Organizing Road Shows with Reputed Companies.
 Organizing Investor awareness Programs in Top corporate companies.
 Karvy also publish its weekly Stock Market Newsletter ‘Karvy Bazaar Baatein’ and monthly
magazine ‘The Finapolis’ to guide investors.

Market Positioning:
 Market positioning statements of Karvy are “At Karvy we give you single window service” and
“We also ensure your comfort”.
 So, Karvy focus on the customers who prefer almost all investment activities at same place by
providing number of various financial services.
 At Karvy a person can purchase or sell shares, debentures etc. and at the same place also
Demat it.
 Karvy also provides other investment option to the same person at same place like Mutual
Fund, Insurance, Fixed Deposit, and Bonds etc. and help the Clients for designing his portfolio.
By this way Karvy provides comfort to its customers.

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 COMPETITORS
 Karvy is one among the top five players in stock broking.
 The Major competitors for Karvy are:

1. ICICI Direct: This is by far the biggest stock broker in India. They were the first one to
provide online brokerage in India way back in 2000 and with their integration with ICICI bank,
they soon became the market leader. They have a good customer service and there is
software is also easy to easy. But there brokerage is on very high side and lately all trader have
moved away from them. It is still good for investor, which is someone who doesn’t trade
often.

2. IIFL: A fastest growing financial services solution provider in India. India Info line is listed on
BSE (532636) and NSE (INDIAINFO) for securities trading.IIFL offers trading platform and
research-based advice for entire range of financial products including Stocks, Derivatives,
Commodities, Insurance, FD's, Loans, Bonds etc.

3. Kotak Securities: Kotak Securities Ltd, a subsidiary of Kotak Mahindra Bank was founded in
1994. They offer stock broking services and distributes financial products in India. They have
1209 branches, franchisees and satellite offices offers services to 11.95 Lakh customers. They
corporate members with the Bombay Stock Exchange and the National Stock Exchange.

4. Share khan/India bulls: These are also two of more well know brokers in India. They are
somewhere in between a full service broker and a discount broker. Being just a stock broker,
they provide decent brokerage structure and customer service.

25
 KARVY STRATERGIES TO OVERCOME THE COMPETITION:
a.Providing outstanding service with less brokerage (0.02% for intraday, 0.2% for delivery).

b. Karvy has a research team which is accessible to all their clients.

c.Karvy also provides expert advice to all its clients regarding stocks(ASK EXPERT) An online
service available From 7.30 A.M Till 11.00 P.M

d. Karvy has its mobile application for Android/ios/windows. They also have Desktop and Web
application.

Business Environment
Micro and Macro factors affecting the share market
 Government stability
 IIP (Industry Production Index)
 RBI Repo rates and interest rates structure
 Rating upgrade/downgrade
 Performance of the international markets
 Inflation
 GDP

26
 Karvy Insights very strongly believes in

 Personal enrichment and growth: We have over 1 million man hours of training
behind us as an organization, and the management is personally committed to learning
initiatives, both structured and unstructured. We believe very strongly in equipping
individuals to take on new challenges and explore uncharted territory.
 A work-life balance: Work can get stressful, and all consuming- especially work in
market research and we realize that. We are strongly committed to a flexible work schedule,
no late hours unless absolutely necessary and to integrating fun and enjoyment with business.
 Carving your own career path: Opportunities for growth are unlimited, and we
hope you will grow as fast as the organization. We have dedicated programs in place, with
opportunities to explore new areas of business, and the opportunity to learn from other Karvy
businesses ranging from data management to transaction processing.
 Holistic employee-employer relationships: At Karvy, we believe that once a
Karvyite, always a Karvyite and we think of your relationship with the organization as one
characterized by longevity, permanence and a sincere, long standing relationship. Just as you
mould the organization, we hope to mould, guide and help you through your career, and open
up new opportunities for you as you grow within the organization.

TECHNOLOGY

27
 Omnesys Technologies is the company that developed and monitors the Karvy website.
 The website provides best user experience possible.
 It displays everything in detail
 The website looks like

 Karvy uses “NEST TRADER” software.

 Karvy has its official mobile application which is reliable to use (android/ios/windows).

SWOT ANAYLYSIS

Strengths Weakness
Technology No exclusive bank

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 Unique products
Large customer base
Customer loyalty
Brand name
Opportunity Threats
New technology Substitute products
New products Government policies
New Services Intense competition
Online market Change in customer opinion
International expansion

WHO’S WHO OF THE COMPANY

 Mr. C. Parthasarathy, Chairman & Managing Director
 Mr. M. Yugandhar, Managing Director
 Mr. M. S. Ramakrishna, Director
 Mr. V. Mahesh, Managing Director – Karvy Data Management
 Mr. V. Ganesh, CEO – Karvy Computershare
 Mr. Sushil Sinha, Whole time Director – Karvy Comtrade
 Mr. P. B. Ramapriya, Vice President & Head – Financial Products Distribution
 Mr. Rajiv R. Singh, Vice President & business Head – Karvy Stock Broking Limited
 Mr. J. Ramaswamy, group head – Corporate affairs
 Mr. Deepak Gupta, Group head – HR
Mr. G. Krishna Hari, Group Head – finance

OBJECTIVE OF THE STUDY:

 To Study the organisational structure of mutual funds in India.

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  To Study the investment options available in mutual funds.
 To examine the performance of select mutual funds.

SCOPE OF THE STUDY:

 The Study covers the basic meaning, concepts, structure and the organisations of the
mutual funds.
 This study is made to explain about the returns from the types of mutual funds from
various schemes.
 The data analysis is done by considering five years.

LIMITATIONS:

 The study is based on the secondary data available from the websites and books as
primary data is not accessible.
 There may be a lack of accuracy as the data used for the study is secondary data.
 This study is limited to the various schemes in the types of mutual funds.
The analysis is done only in few types of mutual funds with the data available

INTRODUCTION TO MY PROJECT

A Mutual fund is an investment vehicle that is made up of a pool of funds collected from many
investors for the purpose of investing in securities such as stocks, bonds, money market
instruments and similar assets. Mutual funds are operated by money managers who invest the

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funds capital and attempt to produce capital gains and income for the funds investors. A mutual
funds portfolio is structured and maintained by the investors objectives stated in the
prospectus. One of the advantage of the mutual fund is that they give small investors access to
the professionally managed, diversified portfolios of equities, bonds and other securities, which
would be quite difficult to create with a small amount of capital. In mutual funds each
shareholder participates proportionally in the gain or loss of the fund. Mutual fund units, or
shares, are issued and can typically be purchased or redeemed as needed at the funds current
net asset value (NAV) per share, which is sometimes expressed as NAVPS. Mutual funds as an
intermediation mechanism and products play an important role in India’s financial sector
development. Apart from pooling resources from small investors, they also provide informed
decision making mechanism to them. Thus they contribute to not only financial sector
participation, but also financial inclusion and thereby enhance market efficiency. Additionally,
they contribute to financial stability and help in enhancing market transparency.

The working of a mutual fund is as follows.

1) The investors pool their money with the Fund manager

2) Fund manager will invest in the securities
3) Those securities generate returns in the form of money
4) The returns are passed back to the investors

ORGANISATIONAL STRUCTURE OF MUTUAL FUNDS IN INDIA

STRUCTURE OF MUTUAL FUNDS:

The mutual funds in India are regulated by SEBI MF Regulations, 1996.Under the Regulations
mutual fund is formed as a Public Trust under the Indian Trust Act, 1882. These regulations

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stipulate a three tiered structure of entities – Sponsor(Creator), Trustees, and Asset
Management Company(fund manager) for carrying different functions of a mutual fund.

SPONSOR:

A Sponsor is a body corporate who establishes a mutual fund. It may be one person acting alone
or together with another corporate body. Additionally, the sponsor is expected to contribute
40% of the net worth of AMC. However if a person holds 40% or more of the net worth of an
AMC, he shall be deemed to be a sponsor and will be required to fulfil the eligibility criteria
specified in the mutual fund regulations.

TRUST:

As Per the Indian Trust Act 1882, Trust has no legal identity in India and cannot enter in to
contracts hence Trustees are the people who act on behalf of trust. Contracts are entered into
in the name of trustees. Once the Trust is created, it is registered with SEBI after which this trust
is known as mutual fund. It is important to understand the difference between Sponsor and
Trust. They are the separate entities. Sponsor is not the Trust, i.e., Sponsor is not the mutual
fund. It is the trust which is mutual fund.

ASSET MANAGEMENT COMPANY:

The role of the AMC is highly significant in the mutual fund operation. They are the fund
managers, they invest the investors’ money in various securities (equity, debt, money market
instruments) after proper research of the market conditions and the financial performance of
the individual companies and specific securities in the effort to meet or beat average market

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return and analysis. They also look after the administrative functions of a mutual fund for which
they charge managing fee.

CUSTODIANS:

The mutual fund is required by law to protect their portfolio securities by placing them with a
Custodian. Mostly all mutual funds use qualified bank as custodians. Only the registered
Custodian under the SEBI can act as custodian.

REGISTRAR AND TRANSFER AGENT:

Registrar and Transfer agent is a separate entity. Registrar and Transfer agent has a responsibility
of performing many administrative jobs like processing of application of investors, creating units
when new investment is made, removing units when investors made redemptions, Keeping full
records of investors, processing dividend payout. Mutual fund investors are spread across the
country to small cities and towns so it is not possible to provide these services to investors at all
these places by Asset Management Company.

CLASSIFICATION OF MUTUAL FUNDS:

Mutual funds are classified based on structure and based on assets

Based on structure they are classified as

1) Open-ended funds

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2) Closed-ended funds

3) Interval funds

Based on Assets they are classified as

1) Equity funds
2) Debt funds
3) Balanced or hybrid funds

OPEN-ENDED FUNDS:

These funds are open always for investment and redemption. Units in this type of scheme can
be bought and redeemed during any business day at the prevailing NAV. These funds do not
have a fixed maturity period. Hence liquidity is considered to be a key feature of an open-ended
fund.

The price of these type of funds while investing or redemption vary on the NAV of the fund, and
therefore directly reflects on the funds’ performance.

CLOSED-ENDED FUNDS:

These type of funds are open for only short time period for investment. After the time is
completed no new investment is allowed. The scheme remains in existence only for specific
time after that the fund closes and the money is returned to the investors. These schemes are

listed in the stock market as when an investor wants to exit he can sale he units through the
stock market price. The price is determined by the market and hence it is different from the NAV
per share of investment held by the fund.

INTERVAL FUNDS:

Interval funds have both the qualities of open-ended and closed-ended funds.

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These type of funds are opened to repurchase of shares at different intervals during the fund
tenure. During this interval the find is open for sale or redemption of units.

Equity Funds:

Funds that invest in equity stocks/shares of companies are called as equity funds. These
type of funds are generally considered to be high risk funds but they also tend to provide
high returns. As these funds invest in stocks, returns do fluctuate thereby posing higher
risk.

Debt Funds:

Funds that invest in debt instruments like company debentures, government bonds are
called as debt funds. Debt funds generally invest in fixed income bearing instruments.
These funds are relatively low-risk-low-return schemes. Debt funds can be further
categorized into Money market or liquid income schemes, Gilt Funds, Income funds and
Fixed Maturity Plans (FMP).

Hybrid Funds:

Funds that invest in equities and debt investments in varying proportions are called as
hybrid funds. In some cases, the proportion of equity is higher than debt, such funds are
called as equity oriented funds. In other cases, the proportion of debt is higher than
equity, such funds are called as debt oriented funds. In this way the risk and returns
associated with the fund are balanced out. These type of funds are relatively more stable
than pure equity funds.

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STUDY OF INVESTMENT OPTIONS AVAILABLE IN MUTUAL FUNDS

Mutual funds offer various options for investing; one should preferably consider his or her
convenience while investing in mutual funds. Some of the key modes of investment
offered by mutual funds are:

 Lump sum (or)One time Investment

 Systematic Investment Plan
 Systematic Transfer Plan

Lump sum (or) one time investment:

This option is suitable to the investors who can invest their huge amount of money at a
time in funds; there is no limit for investment. It attracts the market risk.

Lump Sum Investment can be rewarding only if the long term trend of the economy is
positive. More suitable if you are ready to take High Risk in anticipation of High Return.

Systematic investment plan:

SIP is a disciplined Mode of Investment. You can start SIP with a lower investment
amount; SIP can help you steadily build a corpus over time. Through SIP, you invest a fixed
amount every month, irrespective of the market movements. As the investment

happens on a regular basis, you get an opportunity to invest at various market levels. So
when the markets fall, you buy more units with the same amount; while if the market
trends higher, you buy less units and simultaneously the value of your existing units grow.
So in the long run your cost of buying is averaged out and your Average Cost per Unit may
work out to be lesser than the Average Price per Unit.

Systematic Transfer Plan:

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STP helps in gradually investing a large corpus in a selected asset class which are less risky
funds and gives better funds. STP is a relatively safer investment method than lump sum
investment and may prove to be a higher yielding method than SIP investment. This
option also provides the benefit of rupee cost averaging where we can buy the more
number of units when the prices have fall down and can gain more returns whenever the
prices rises again

Net Asset Value Calculation

The formula for a mutual fund's NAV calculation is straightforward:

NAV = (assets - liabilities) / number of outstanding shares

METHODOLOGY:

 I have done this project based on the data provided by the company.
 I have chosen mutual funds because it is considered one of the important financial
instruments useful in tax savings.
 I have taken the secondary data from different mutual funds providers.
 I analysed the returns and performance of every company in different funds like Debt,
Equity and balanced funds.
 The analysis is done on the selected mutual funds, the funds are stated below

 EQUITY

1) SBI Blue Chip Fund

2) Kotak Select focus regular fund

 DEBT

1) UTI Bond fund

2) Axis Dynamic fund

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  BALANCED FUNDS

1) Birla sun life balanced 95

3) Reliance regular saving fund

RESULTS OF FINDINGS

PERFORMANCE OF SELECT MUTUAL FUNDS

RETURNS:

The complete details and returns of the selected equity funds, debt funds, and balanced funds
are shown below in table format.

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EQUITY

Table - 1

SBI Blue Chip Fund Details and Returns

PERIOD RETURNS
3Months 4.38%
6 Months 17.10%
1 Year 15.40%
3 Years 14.95%
5 Years 20.21%

Fund Type – Open-ended growth fund

Launch date- Jan. 20, 2006

Minimum Investment- 5000

Asset size – 8582.51 crs

Net asset value – 35.408

Table - 2

Kotak Select focus regular fund details and returns

PERIOD RETURNS
3Months 5.56%
6 Months 21.07%
1 year 23.52%
3Years 18.17%
5 Years 21.76%
Fund Type – open-ended growth fund

Launch date-Aug. 20 2009

Asset size – 6335.80 crs

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Minimum Investment- 5000

Net asset value- 30.696

DEBT FUNDS

Table - 3

UTI Bond fund details and returns

PERIOD RETURNS
3 Month 2.55%
6 Months 2.72%
1 Year 13.34%
3 Years 10.64%
5 Years 9.73%

Fund Type –open-ended growth fund

Launch date- july 17, 1998

Asset Size- 1115.08 crs

Minimum Investment- 1000

Net asset value- 51.27

Table -4

Axis Dynamic fund details and returns

PERIOD RETURNS
3 MONTHS 2.25%
6 MONTHS 1.73%
1 YEAR 10.69%

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3 YEARS 10.19%
5 YEARS 9.43%

Fund Type – open-ended growth fund

Launch date-jan 03, 2013

Asset size- 339.34 crs

Minimum Investment- 5000

Net asset value- 17.29

BALANCED FUNDS

Table - 5

Birla sun life balanced 95 details and returns

PERIOD RETURNS
1 MONTH 3.41%
3 MONTHS 14.04%
1 YEAR 16.74%
3 YEARS 14.19%
5 YEARS 18.15%
Fund Type – open-ended growth fund

Launch date- Feb 10, 1995

Asset size- 5927.15 crs

Minimum Investment-5000

Net asset value- 711.270

Table -6

Reliance regular saving fund

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PERIOD RETURNS
3 MONTHS 5.96%
6 MONTHS 17.32%
1 YEAR 19.17%
3 YEARS 13.78%
5 YEARS 17.27%

Fund Type – open-ended growth fund

Launch date-May 10, 2005

Asset size- 3545.62 crs

Minimum Investment- 5000

Net asset value- 50.960

ASSET ALLOCATION:

Asset allocation is an investment strategy that aims to balance risk and reward by apportioning
a portfolio's assets according to an individual's goals, risk tolerance and investment horizon. The
three main asset classes - equities, fixed-income, and cash and equivalents - have different
levels of risk and return, so each will behave differently over time.

Table –7

Asset allocation of each select fund

FUND NAME EQUITY DEBT OTHERS

SBI Blue Chip fund 90.51 1.58 0.14
Kotak select focus regular fund 94.82 1.09 4.10
UTI Bond fund 0 96.31 3.69
Axis Dynamic Fund 0 95.68 4.32
Birla sun life balanced 95 fund 72.92 19.13 7.95

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Reliance regular saving fund 67.32 21.95 10.74

Table – 8

Valuation of performance of each select fund

STOCKS SHARPE SORTINO STANDARD BETA VALUE MEAN

RATIO RATIO DEVIATION
EQUITY
SBI Blue chip 0.07 0.11 1.87 0.9 0.144
Fund
Kotak select 0.09 0.14 2.03 0.97 0.180
focus regular
fund
DEBT
UTI bond fund 0.16 0.31 0.51 1.24 0.078
Axis dynamic 0.14 0.28 0.49 1.19 0.067
fund

BALANCE
FUNDS
Birla sun life 0.07 0.12 1.57 1% 0.133
balanced 95
Reliance regular 0.06 0.10 1.61 2%(0.015) 0.147
saving fun
Beta is a measure used in fundamental analysis to determine the volatility of an asset or
portfolio in relation to the overall market. How to Calculate Beta

The formula for calculating beta is the covariance of the return of an asset with the return of
the benchmark divided by the variance of the return of the benchmark over a certain period.

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 Discussion

Fruitful and many facts came to the light. The following were the findings of the study :

 People with less experience were inclined towards investment in the mutual funds.
It attracted as a safer avenue as compared to share market.
 Mutual funds are more of an investment option than the speculative avenue. People
tend to gain through long term investment rather than through short term.
 Equity , ELSS(equity linked saving scheme) and SIP(systematic investment planning)
are among the most preferred funds with respect to their returns, risk and stability.
 Old age people do not prefer to take much risk and hence don’t get more returns.
 AMCs are preferred by a lot of people as the knowledge on market is less. Brokers
and equity advisor are specially trained by the management to give a proper guide
to the people.
 Most of the people look at the returns that are given by a fund and more than 35
respondents are in this favour and only 8 people are there who consider the fund
name and current Net asset value of the fund before investing into Mutual Fund.

CONCLUSIONS

Optimum mutual fund portfolios were created by various schemes of different AMCs.
The schemes were selected on the basis of their performance in the past years, their volatility
and the changes in their NAV(Net Asset Value).
The mutual fund portfolios were then divided as per the risk profile or the risk appetite of the
investors such as aggressive, moderate and conservative.
After creation of the mutual fund portfolio the analysis of each scheme mentioned in the
portfolio was done separately to have a clear idea about the schemes being mentioned in the
portfolio.

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Appendices:

STP helps in gradually investing a large corpus in a selected asset class which are less risky
funds and gives better funds.

STP is a relatively safer investment method than lump sum investment and may prove to
be a higher yielding method than SIP investment.

This option also provides the benefit of rupee cost averaging where we can buy the more
number of units when the prices have fall down and can gain more returns whenever the
prices rises again

BIBLIOGRAPHY

www.AMFI.com
www.moneycontrol.com
www.valuesearcher.com
www.google.com
www.mutualfundsindia.com

www.moneycontrol,com

www.karvy.com

www.investopedia.com

www.bankbazaar.com

www.economictimesindia.com

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GLOSSARY

AMC

An Asset Management Company is the fund house or the company that manages the money.

NAV

The Net Asset Value is the price of a unit of a fund. When a fund comes out with an NFO, it is
priced Rs 10. Later, depending on the value of the investments, this price could rise or fall.

Load

This is a fee that is charged when you buy or sell the units of a fund.

When you buy the units of a fund, you pay a percentage of it as a fee. This is known as the entry
load.

Let's say you are investing Rs 10,000 and the entry load is 2%. That means you pay Rs 200 as the
entry load and Rs 9,800 is invested in the fund.

Now, let's assume you are selling the units of your fund. And the Rs 10,000 you invested initially
is now Rs 15,000. Let's further assume the exit load is 2%. So you pay Rs 300 and get back Rs
14,700.

Generally, if funds charge an entry load, they will not charge an exit load. Or vice versa. Only
one of the loads is charged.

The load is a percentage of the NAV.

Portfolio

This is the term given to all the investments made by the fund as well as the amount held in
cash.

Corpus

Let's assume a very small mutual fund has an initial investment of 1,000 units and each unit is
worth Rs 10. Hence, the total amount with the fund is Rs 10,000. This is referred to as the
46
corpus. Later, some other investors invest Rs 2,000. Now the corpus will be Rs 12,000 (Rs 10,000
+ Rs 2,000).

The total amount invested (Rs 12,000) is called the corpus or the total amount of money
invested in the fund.

AUM

Assets Under Management is the total value of all the investments currently being managed by
the fund.

Let's say the corpus is Rs 12,000 but, due to a rise in the price of the shares it has invested in,
the value of the units has increased. So the Rs 12,000 invested is now worth Rs 15,000. This
figure is referred to as AUM.

Diversified equity mutual fund

This is a mutual fund that invests in stocks of various companies in various sectors.

ELSS

Equity Linked Saving Schemes are diversified equity mutual funds with a tax benefit under
Section 80C of the Income Tax Act.
To avail of the tax benefit, your money must be locked up for at least three years.

Balanced fund

A fund that invests in both equity (shares) and debt (fixed return investments) is known as a
balanced fund.

Debt fund

These are funds that invest in fixed return investments like bonds. A liquid fund is one that
invests in money market instruments, these are fixed return investments of a very short tenure.

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NFO

A New Fund Offering is the term given to a new mutual fund scheme.

SIP

A Systematic Investment Plan refers to periodic investing in a mutual fund. Every month or every
three months, the investor will have to commit to putting in a fixed amount. This will go towards
the purchase of units.

Let's say that every month you commit to investing, say, Rs 1,000 in your fund. At the end of a
year, you would have invested Rs 12,000.

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 CONCLUSION:

Apart from the theoretical work I have also closed 3 Demat accounts and one insurance

policy (on I maximiser. I have worked on talking to the clients personally and through calls

during this exercise, I have given 3 leads on Demat accounts through phone calls and one

directly talked to the customer and convinced him to close the account and also took part in

Karvy marketing strategies like the events that they conducted at Ravindra Bharathi where

governor of Telangana and AP also attended for women's day. I also had an opportunity to

talk to apartment secretary in Hyderabad to have a permission for displaying a Karvy

financial products outlets in the apartments and as Karvy also has a house maker books for

house wife's to make them understand house hold finance and how karvy could help them. I

have also generated a client for karvy for mortgage loan and understood how this process has

been made. I have a generated and closed a insurance lead for karvy under cluster manager

Rajesh at karvy.I have also been a part of Karvy events where I have learned about presentation
and

organization skills and sales tactics. I have also called several customers and took a feedback

and stored it in karvy database system. In the financial year ending I have been working

under team leader Rajesh sir where I have seen how to handle stress when the deadlines have

approached and need to complete the sales target on insurance. As our team leader had made

few teams so the we went to the apartments and talked to the presidents and took an

appointment where karvy can have a stall push their products.

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