A Project Proposal on
PERFORMANCE OF MUTUAL FUNDS
Submitted By: Ram prakash pandey
T.U. Reg. No. : 7-2-0558-0069-2017
Exam Symbol No:
Aims College, Butwal
Submitted To:
The Faculty of Management
Tribhuwan University
Kathmandu
In the partial fulfillment of the requirements for the degree of
Bachelor of Business Studies(BBS)
september 2021
Butwal
1.General background of the study
Economic growth can be achieved through the development of a capital market which
can meet the financial requirements of the country. One of vital components of financial
system is financial institutions which can serve the dual purpose- generating savings from
the public and providing funds for investment purpose. The mutual fund industry is one
such financial institution which raises funds through the sale of the small units to public
and provides funds for investment among various sectors (Rani& Hooda, 2017).
A mutual fund is an investment vehicle made up of money collected from many investors
for the purpose of investing in securities such as stocks, bonds, money market instrument
and other assets. Mutual funds are operated by professional money managers, who
allocate the fund’s investments and attempt to produce capital gains and income for the
fund’s investors. The decisions are made by the fund manager and the profit is distributed
at the year-end in the form of cash dividend. The present worth of investment can be
known from the weekly/monthly NAV published by the company. NAV stands for the
Net Assets Value.
The first mutual fund was established in Europe around 1774. When we look at the time
frame, the concept of mutual fund seems to be originated 244 years ago but in the context
of Nepal the mutual fund came into existence only 27 years ago. Therefore, introduction
of mutual fund seems new for Nepalese investors. With the flotation of NCM Mutual
Fund in 2050 B.S. (1993 A.D.), the Nepali market entered into the era of mutual funds. It
was an open-ended scheme with a collected fund of just Rs.100 Million. These days,
merchant bankers are coming up with funds 5 to 10 times larger than that, which have
become a pivotal part of the Nepali stock market. Currently, there are 26 mutual fund
schemes running in the Nepali stock market. These mutual funds have to be approved by
Securities Board of Nepal (SEBON under Mutual fund Regulation Act 2010 and
Directives 2012) first to publish the offer letter and accept the funds as initial public
offerings. When the fund units are allotted, they are listed in NEPSE (Nepal Stock
Exchange) where they can be freely bought and sold. NEPSE is Nepal's only stock
exchange market.
In the current scenario, mutual funds are less attraction compared to shares of commercial
banks, insurance, development banks, finances and microfinances. The various
schemes/options that are available to investors worldwide are not available to local
investors in Nepal. In spite of the recent growth in the Nepalese securities market, the
success and performance of mutual funds is not noticeable in the country. However, these
available mutual funds in Nepal have not only provided alternative avenues of investment
to the benefits of investor but also source of raising funds to the benefits of corporate
investor.
2.Statement of problems
In the securities market, there are different financial instruments which are frequently
traded to the demand and supply. The driving force for making any decision depends
upon investors experiences, fundamental and technical analysis, different psychological
factors, advices from friends and families, risk etc. NEPSE is the only stock exchange
Nepal which was established in 1993. in Nepal there are only few listed mutual funds and
the only information that an investor get is the monthly balance sheet and NAV. The
study will tried to address the following research questions:
1.what is the performance of selected mutual fund?
2.what is the level of dividend?
3.Objective of the study
The purpose of this study is to performance evaluation of selected mutual funds in the
period of study. This study evaluated the management effectiveness of selected mutual
fund in Nepal for the purpose of benefiting mutual fund manager and investors. The
objectives of study are as follows:
1. To analyze the performance of selected mutual fund.
2. To examine the level of dividend.
4.Significance of the study
This study give and insight about mutual fund industry of developing country and also
help in the management effectiveness upcoming mutual funds. This study is significant in
following way:
1. It will show which investment company is better in terms of return and its
consistency.
2. It also provide encouragement and insight to handle the problems to mutual
fund managers.
3. It also provide information to investor and literature to the researcher.
5.Methodology of the study
Research methodology is the way to systematically solve the research problem. It
includes the various steps that are adopted by the researcher to solve the problem along
with the logic behind them.
5.1 Design of the study
A research design is a plan of the proposed research work. The study is based on
descriptive research design. It seeks to assess the selected mutual funds and to describe
and evaluate the performance of these mutual funds. Various statistical and financial
tools have been used to analyze the subject matter.
5.2 Population and sample
Since the concept of mutual fund is still in practice in Nepalese financial market. It has
been not able to cover a wide range. There are 26 mutual funds trading in NEPSE
market . Hence, Laxmi Value Fund-1, NMB Sulav Investment Fund-1, are considered as
convenience sample. These two mutual fund monthly sample have been taken from the
period of 2017/18 to 2019/20.
5.3 Source and methods of data collection
This study is mainly based on secondary data which is collected from published and
unpublished sources. Secondary data have been collected in order to achieve the real and
factual result out of this research. The secondary sources of data are the information
received from books, journal and article concerned with the study, annual reports and
their websites.
5.4 Data collection procedure
The data collections a major part of this study since it plays a key role in the analysis.
This study is totally based on the secondary data so, the accuracy in result depends upon
the accuracy of secondary data. This research was conducted by collecting secondary
data from the website of respective mutual fund scheme manager .The data were recorded
from their monthly balance sheet.
5.5 Data processing
The basic structure of this research is descriptive and analytical as well. In order to make
the study more precise, the data are presented in the tabular from Multi line Charts and
diagrams are used to clarify and verify the data presented. Various financial and
statistical tools are used to evaluate the performance of selected mutual funds.
5.6 Plan of data analysis
After the collection of required data through different secondary sources, researcher will
statistically analyze to get the result.Basically financial and statistical tools have been
used for data analysis.
The tools are categories as:
A.Financial tools
Net assets value
B. Statistical tools
Average rate of return
Standard deviation
5.7 Data presentation
Presentation of data refers to the organization of the data into tables,graphs or charts so
that logical and statistical conclusion can be derived from the collected measurement.
Some of the tools are as follows:
Tables
Diagram
Formula
6.Organization of the study
This project work report shall have the following three chapters.The organization of the
study will be as follows:
Chapter I:Introduction
The first chapter will include Background ,Profile of mutual fund,Objective of the
study,Review,Method,Limitation of the study and Organization of the study.
Chapter II:Data presentation and analysis
The second chapter will include data presentation and analysis which is the most
important chapter of the study.
Chapter III:Summary and conclusion
The third chapter will include summary of the study and conclusion that flows from the
study.
7.Limitations of the study
Although efforts have been made to research the objective of the study.The following
limitations cannot be ignored:
1. The study principally based on the secondary data. So, the calculation and conclusion
of the study fully dependent on the accuracy of the data provided by the organization.
2. Performance evaluation of all mutual funds was not possible because of non
availability of sufficient data.
3. This study undertake as partial fulfillment of the requirement for the degree of
Bachelor of business studies. So its analysis tools and research arenbased on academic
course.
4. Among the 26 mutual fund ,only 2 will be taken as a sample for the study.
5. This study will cover the short time period.
8. Time Allotment
The study will be completed within the following time framework
Topic Selection 3 days
Proposal writing 5 days
Data collection 5 days
Data presentation and analysis 10 days
Preparation of report 5 days
Proof reading 3 days
Sitting and printing 4 days
Total time 35 days
9. References
Thapa Yashu (2019)
Pandow bilal (2017)
Business research method
Fundamentals of investment
Websites:
www.laxmicapital.com.np
www.nmbcl.com.np
