Ahmednagar Jilha Maratha Prasarak Samaj’s

NEW ARTS COMMERCE & SCIENCE

COLLAGE,AHMEDNAGAR

“A PROJECT REPORT ON”

Study Of Mutual Funds

SUBMITTED BY

MR. ANURAG YOSEF BHUJANG

SUBMIITED TO

HOD DR. Mangesh Waghmare

NEW ARTS COMMERCE & SCIENCE COLLAGE,AHMEDNAGAR

Under the Guidance of

Abhijit Sathbhai Sir

IN PARTIAL FULFILLMENT OF REQUIREMENT FOR BACHELOR OF BUSINESS

ADMINISTRATION

2023-2024
 DECLARATION

I hereby declare that the project entitled “Study Of Mutual Funds” is

bonafiderecord of work done by ANURAG YOSEF BHUJANG a
student of BBA (Finance) and is submitted to department of BBA of
New Arts Commerce & Science collage Ahmednagar. In partial
fulfillment to therequirement for the degree
This work has never been submitted to any Educational Institution as per
good of my knowledge

Signature of Student

Mr. ANURAG YOSEF BHUJANG

 CERTIFICATE
It is to certify that the work contained in the project report titled “ Study on Mutual fund
Management ”, by ANURAG YOSEF BHUJANG, has been carried out under my supervision
and that this work has not been submitted elsewhere for a degree.

Signature of the supervisor: ………………………

Name : Abhijit Sathbhai Sir

Department : BBA DEPARTMENT

NEW ARTS COMMERCE & SCIENCE COLLAGE,AHMEDNAGAR

5th November 2023

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Table of Contents
CHAPTER 1: INTRODUCTION OF THE TOPIC ................................................................ 1
1.1 Rationale of the Study...................................................................................................... 2

1.2 Introduction to the industry ......................................................................................... 2 - 6

1.3 Introduction to the company ............................................................................................. 6

1.4 Justification of the topic ................................................................................................... 7

CHAPTER 2: REVIEW OF LITERATURE ...................................................................... 9-15

CHAPTER 3: RESEARCH METHODOLOGY ................................................................... 16
3.1 Objectives of the Study ................................................................................................... 17

3.2 Research Hypothesis ....................................................................................................... 17

3.3 Scope of the Study ..........................................................................................................17

3.4 Limitation of the study .................................................................................................... 17

CHAPTER 4: DATA REPRESENTATION & ANALYSIS ............................................... 18

4.1 Data representation & Interpretation....................................................................... 19 - 23

4.2 Hypothesis Testing......................................................................................................... 24

CHAPTER 5. RESULTS & DISCUSSION .......................................................................... 25

5.1 Major Findings ............................................................................................................... 26

5.2 Discussions .................................................................................................................... 27

5.3 Conclusion .................................................................................................................... 28

Refrences ................................................................................................... 28

Bibliography ............................................................................................. 30

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CHAPTER 1: INTRODUCTION OF THE TOPIC
1.1 Rationale of the Study

1.2 Introduction to the industry

1.3 Introduction to the company

1.4 Justification of the topic

1
 STUDY ON MUTUAL FUND MANAGEMENT
Introduction to the topic
1.1 Rationale of the study

There are a lot of investment avenues available today in the financial market for an investor with
an investable surplus. He can invest in Bank Deposits, Corporate Debentures, and Bonds where
there is low risk but low return. He may invest in Stock of companies where the risk is high and
the returns are also proportionately high. The recent trends in the Stock Market have shown that
an average retail investor always lost with periodic bearish tends. People began opting for
portfolio managers with expertise in stock markets who would invest on their behalf. Thus we
had wealth management services provided by many institutions. However they proved too costly
for a small investor. These investors have found a good shelter with the mutual funds.
Mutual fund industry has seen a lot of changes in past few years with multinational companies
coming into the country, bringing in their professional expertise in managing funds worldwide.
In the past few months there has been a consolidation phase going on in the mutual fund industry
in India. Now investors have a wide range of Schemes to choose from depending on their
individual profiles.

1.2 Introduction to the 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 of India. The history of mutual funds in
India can be broadly divided into four distinct phases

First Phase - 1964-1987

Unit Trust of India (UTI) was established in 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.

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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
Canbank 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 funds.

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

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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, 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.

Types of Mutual Fund:

1. Money market funds

These funds invest in short-term fixed income securities such as government bonds, treasury
bills, bankers’ acceptances, commercial paper and certificates of deposit. They are generally a
safer investment, but with a lower potential return then other types of mutual funds. Canadian
money market funds try to keep their net asset value (NAV) stable at $10 per security.
2. Fixed income funds

These funds buy investments that pay a fixed rate of return like government bonds, investment-
grade corporate bonds and high-yield corporate bonds. They aim to have money coming into
the fund on a regular basis, mostly through interest that the fund earns. High-yield corporate
bond funds are generally riskier than funds that hold government and investment-grade bonds.
3. Equity funds

These funds invest in stocks. These funds aim to grow faster than money market or fixed income
funds, so there is usually a higher risk that you could lose money. You can choose from different
types of equity funds including those that specialize in growth stocks (which don’t usually pay
dividends), income funds (which hold stocks that pay large dividends), value stocks, large-cap
stocks, mid-cap stocks, small-cap stocks, or combinations of these.
4. Balanced funds

These funds invest in a mix of equities and fixed income securities. They try to balance the aim
of achieving higher returns against the risk of losing money. Most of these funds follow a
formula to split money among the different types of investments. They tend to have more risk

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than fixed income funds, but less risk than pure equity funds. Aggressive funds hold more
equities and fewer bonds, while conservative funds hold fewer equities relative to bonds.

5. Index funds

These funds aim to track the performance of a specific index such as the S&P/TSX Composite
Index. The value of the mutual fund will go up or down as the index goes up or down. Index
funds typically have lower costs than actively managed mutual funds because the portfolio
manager doesn’t have to do as much research or make as many investment decisions.

6. Specialty funds

These funds focus on specialized mandates such as real estate, commodities or socially
responsible investing. For example, a socially responsible fund may invest in companies that
support environmental stewardship, human rights and diversity, and may avoid companies
involved in alcohol, tobacco, gambling, weapons and the military.

7. Fund-of-funds

These funds invest in other funds. Similar to balanced funds, they try to make asset allocation
and diversification easier for the investor. The MER for fund-of-funds tend to be higher than
stand-alone mutual funds.

Diversify by investment style

Portfolio managers may have different investment philosophies or use different styles of
investing to meet the investment objectives of a fund. Choosing funds with different investment
styles allows you to diversify beyond the type of investment. It can be another way to reduce
investment risk.

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4 common approaches to investing

1. Top-down approach – looks at the big economic picture, and then finds industries or
countries that look like they are going to do well. Then invest in specific companies within
the chosen industry or country.
2. Bottom-up approach – focuses on selecting specific companies that are doing well, no
matter what the prospects are for their industry or the economy.
3. A combination of top-down and bottom-up approaches – A portfolio manager managing a
global portfolio can decide which countries to favour based on a top-down analysis but build
the portfolio of stocks within each country based on a bottom-up analysis.
4. Technical analysis – attempts to forecast the direction of investment prices by studying past
market data.

1.3 Introduction to the company

Some of the 5 popular asset management companies are:

1. Axis mutual fund - Axis Mutual Fund is an asset management company in India. It was
established in 2009 and is headquartered in Mumbai. Axis Mutual Fund offers various types of
mutual fund schemes to invest in India, such as equity funds, hybrid funds, debt funds, and more.

2. Kotak mutual fund - Kotak Mahindra Asset Management Company Limited (KMAMC), a
wholly owned subsidiary of Kotak Mahindra bank Limited (KMBL), is the Asset Manager for
Kotak Mahindra Mutual Fund (KMMF). KMAMC started operations in December 1998 and has
approximately 74 Lac investors in various schemes.

3. Reliance mutual fund - Reliance Capital Limited is an Indian diversified financial

services holding company promoted by Reliance Anil Dhirubhai Ambani Group. Reliance
Capital, a constituent of Nifty Midcap 50 and MSCI Global Small Cap Index, is a part of the
Reliance Group. It is amongst India's leading and most valuable financial services companies in
the private sector. As on 31 March 2017, the net worth of the company stood at Rs 16,548 crore,
while its total assets as on the date stood at Rs 82,209 crore. In Fortune India 500 list of 2018,

6
Reliance Capital was ranked as the 77th largest corporation in India with 5th rank in 'Non-
Banking Finance' category.

4. HDFC mutual funds - Housing Development Finance Corporation Limited (HDFC) is an

Indian financial services company based in Mumbai, India. It is a major housing finance provider
in India. It also has a presence in banking, life and general insurance, asset management, venture
capital, realty, education, deposits and education loans.

5. SBI mutual funds - SBI Mutual Fund was incorporated in 1987 with its corporate head
office located in Mumbai, India. SBIFMPL is a joint venture between the State Bank of India,
an Indian public sector bank, and Amundi, a European asset management company. A
shareholder agreement in this regard has been entered on April 13, 2011, between SBI &
AMUNDI Asset Management. Accordingly, SBI currently holds 63% stake in SBIFMPL and the
37% stake is held by AMUNDI Asset Management through a wholly owned subsidiary, Amundi
India Holding. SBI & AMUNDI Asset Management shall jointly develop the company as an
asset management company of international repute by adopting global best practices and
maintaining international standards.

1.4 Justification of the topic

In case of individual investor there is higher return by way of dividends and capital appreciation.
Risk of loss is reduced as the funds are managed by well informed professional managers. Risk
of loss is reduced as the funds are managed by well informed professional managers.

It is also reduced due to diversification of portfolio in terms of companies and industries.

Further, since the returns are automatically invested, the scope for capital appreciation is
enhanced.

As the savings and investments of a large number of investors are pooled the advantage of
economies of scale accrues. The individual investor is spared of the ordeal of having to self-
decide and then go through the process of investment. Thus, from the individual investor’s angle
mutual funds are very much advantageous.

7
From the point of view of capital market, if the foreign investors are also investing, due to
increased volume of trading operation the liquidity for the domestic market players is enhanced.
Such competition with a market regulator surely, and to an extent even otherwise, would
automatically demand a higher investor discipline by way of increased disclosure, improved
information flow, etc.

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CHAPTER 2 : REVIEW OF LITERATURE

2.1 International Reviews

2.2 National Reviews

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2.1 International reviews:

Review of literature is important to a scholar in order to know what has been established and
documented as there are critical summaries of what is already known about a particular topic.
Therefore a review of literature helps in relating the present study to the previous ones in the
same field.
1. Martin P. and McCann B. (1998) in their book titled “The Investor’s Guide to Fidelity
Funds – Winning Strategies for Mutual Fund Investing” have very nicely guided investors
regarding issues related with mutual fund investing. They have advised that Investors should
focus on sectors of the global economy that have the greatest potential for profit in order to beat
the market averages. By combining this approach with the safety provided by mutual funds’
inherent diversification, mutual funds become an investment vehicle with all the advantages of
trading individual securities and none of the disadvantages. Like any other investment, it is
essential to develop a strategy for selecting which funds to buy and sell – and when. These
decisions should not be left to the emotions or to chance. 
2. Gremillion L (2005) in his book “Mutual Fund Industry Handbook – A Comprehensive
Guide for Investment Professionals” has given detailed information about working of mutual
fund industry. It has also mentioned the different type of challenges faced by various
professionals connected with this industry. The book has provided a broad and comprehensive
sweep of information and knowledge, which will help everybody who has serious interest in the
industry.
3. Tyson E (2007) in his book “Mutual Funds for DUMMIES” (5th edition) has provided
practical and profitable techniques of mutual fund investing that investors can put to work now
and for many years to come. By proper selection investor can identify good schemes, where fund
managers invest in securities as per that match investors’ financial goals. Investors can spend
their time doing the activities in life that they enjoy and are best at. Mutual Funds should
improve investors’ investment returns as well as their social life. The book helps investors how
to avoid mutual fund investing pitfalls and maximizing their chances for success. Whenever any
investor wants to buy or sell a mutual fund, the decision needs to fit his overall financial
objectives and individual situation.

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4. Jank S (2010) in his Discussion Paper on “Are there disadvantaged clieneles in mutual
funds?” has mentioned that mutual fund investors chase past performance, even though
performance is not persistent over time. This means that investors buy mutual funds that had a
high return in the past. On the other hand, investors are reluctant to withdraw their money from
the worst performing funds. This behavior has often been attributed to the irrationality of mutual
fund investors. Sophisticated investors rationally chase past performance, because high past
performance is a signal for managerial ability. No significant difference was found between
investor composition of the worst performing funds and those with average performance.
5. Cici G et al (2014) in their Discussion Paper on “Market transparency and the marking
precision of bond mutual fund managers” have stated that the transparency enhancing TRACE
(Trade Reporting and Compliance Engine) system was associated with large and statistically
decreases in cross fund bond mark dispersion.
6. Mary Jane Lenard , Syed H. Akhter, B Pervaiz Alamc (2003 ) in their paper titled
“Mapping Mutual Fund Investor Characteristics and Modeling Switching Behavior” have
empirically investigated investor attitudes toward mutual funds. Their model, based on investor
responses, develops an investor's "risk profile" variable. Results indicate that regardless o f
whether the investors invest in non-employer plans or in both employer and non-employer plans,
they consider their investment risk, fund performance, investment mix, and the capital base o f
the fund before switching funds. The model developed in this study can also assist in predicting
investors' switching behavior . In the paper titled “How to measure mutual fund performance:
economic versus statistical relevance”
7. Roger Otten Dennis Bams ( 2004 ) have explored the added value o f introducing extra
variables such as size, book to market, momentum and a bond index to the existing mutual fund
performance models. Their search for most suitable model to measure mutual fund performance
has resulted in the conclusion that conditional models add strong economic relevance because o f
the ability to detect patterns in fund betas. This enables the investor to monitor the dynamic
behavior o f mutual fund managers.
8. Javier Gil-Bazo and Pablo Ruiz-Verdu (2009 ) in their paper titled “The Relation between
Price and Performance in the Mutual Fund Industry” have highlighted Gruber (1996 ) theory that
investors buy actively managed equity mutual funds, even though on average such funds
underperform index funds. Their study reveals another puzzling fact about the market for equity

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mutual funds: Funds with worse before free performance charge higher fees. This negative
relation between fees and performance is robust and can be explained as the outcome o f
strategic fee setting by mutual funds in the presence o f investors with different degrees of
sensitivity to performance. They found that better fund governance may bring fees more in line
with performance.
9. Stephanos Papadamou and Costas Siriopoulos, (2004 ) in their paper titled “American
equity mutual funds in European markets: Hot hands phenomenon and style analysis”
empirically prove that the American no-load equity mutual funds that invest in European stocks
and keep their managers for more than three years, in order to investigate the persistence o f
short term performance and the related investment style. The results showed an under
performance compared to the Eurostoxx index and a hot hands phenomenon does not persist,
with some exceptions. Mutual funds that performed well in a five month evaluation period
continued to generate superior performance in the next four months. According to style analysis
a portfolio constructed by growth-large, growth-medium and value large capitalization stocks
outperformed any other investment style. However, well diversified finds were the most mean-
variance efficient, style consistent funds.
10. Steven Kaplan and Antoinette Scholar (2005) investigated the performance and capital
inflows o f private equity partnerships. Average fund returns (net of fees) approximately equal
the S&P 500 although substantial heterogeneity across funds exists. Returns persist strongly
across subsequent funds of a partnership. Better performing partnerships are more likely to raise
follow-on funds and larger funds. This relationship is concave, so top performing partnerships
grow proportionally less than average performers. At the industry level, market entry and fund
performance are procyclical; however, established funds are less sensitive to cycles than new
entrants. Several o f these results differ markedly from those for mutual funds.

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2.2 National Reviews:

1. Singh B K (2012) in an article “A study on investors’ attitude towards mutual funds as an

investment option” from International Journal of Research in Management has reiterated the
need for spreading the awareness about Mutual Funds among common masses. There is a strong
need to make people understand the unique features of investment in Mutual Funds. From the
existing investors point of view the benefits provided by mutual funds like return potential and
liquidity have been perceived to be most attractive by the invertors’ followed by flexibility,
transparency and affordability.
2. Divya K. (2012) in the article “A Comparative study on evaluation of Selected Mutual Funds
in India” from International Journal of Marketing and Technology has suggested that the
investment managers whose performance is below benchmark index should have a relook at their
investment strategy and asset allocation. Investing styles should be redesigned according to up &
down swings of the market to generate superior performance. To increase the efficiency and
popularity of mutual funds, the regulator should set the standard criteria of benchmarks which
will be helpful to asset management companies.
3. Vanaja V. and Karrupasamy R (2013) in the article “A study on the performance of select
Private Sector Balanced Category Mutual Fund Schemes in India” from International Journal of
Management Sciences and Business Research have mentioned that Out of five private sector
balanced category mutual funds (under study) two earned a return above the average returns.
Two have made negative returns. All the private sector balanced category funds selected for the
study have a positive Sharpe ratio. The range of excess returns over risk free return per unit of
total risk is wide. All the funds selected for the study have a positive Treynor ratio. All the funds
selected for the study has positive Jensen’s alpha indicating superior performance.
4. Narayanasamy R. and Rathnamani V (2013) in an article “Performance Evaluation of
Equity Mutual Funds(on selected Equity Large Cap Funds)” from International Journal of
Business and Management Invention have mentioned that all funds performed well during the
period under study despite volatility in the market. The fall in NIFTY during the year 2011
impacted the performance of all selected mutual funds. In order to ensure consistent performance
of mutual funds, investors should also consider statistical parameters like alpha, beta, standard
deviation besides considering NAV and total return.

13
5. Santhi N.S. and Gurunathan K. (2013) in the article “The growth of Mutual Funds and
Regulatory Challenges” from Indian Journal of Applied Research have mentioned that as mutual
fund industry has grown tremendously over past few years, Regulators are keeping close watch
on any potential impact of mutual fund products on financial stability and market volatility. The
growth of mutual funds has been accompanied by innovative products and servicing methods.
Regulators will have to do balancing act by carefully managing risks and not imposing
unnecessary regulation.
6. Iqbal N (2013) in an article titled, “Market Penetration and Investment Pattern of Mutual
Fund Industry” from International Journal of Advanced Research in Management and Social
Sciences has mentioned that although mutual funds are predominantly present in urban areas but
have started capturing rural markets also through new range of products, new strategies adopted
for Rural Market Penetration and with new awareness programs. As rural market integrate more
and more with urban, there will be huge inflow of investors. The responsibility of various
intermediaries’ especially mutual funds will increase manifold.
7. Sharma R and Pandya N K (2013) in the article “Investing in Mutual Fund: An overview”
from Asian Research Journal of Business Management mentioned that still number of people are
not clear about functioning of Mutual Funds, as a result so far they have not made a firm opinion
about investment in mutual funds. As far existing investors, return potential and liquidity have
been perceived to be most attractive. There is a lot of scope for the growth of mutual funds in
India. People should take decision based on performance of Mutual fund rather than considering
whether it is private sector or public sector.
8. Sharma N. and Ravikumar R (2013) in an article “Analysis of the Risk and Return
relationship of Equity based Mutual Fund in India” from International Journal of Advancements
in Research & Technology have mentioned that their study investigated the performance of
Equity based mutual fund schemes using Capital Asset Pricing Model (CAPM). In the long run
private and public sector mutual funds have performed well. But while comparing the
performance over last 15 years it is found that private sector mutual funds have outperformed the
Public Sector mutual funds. The schemes of private sector mutual funds not only performed
better than those of public sector mutual funds but were also found to be less risky.
9. Vasantha S.(2013) in an article “Evaluating the Performance of some selected open ended
equity diversified Mutual fund in Indian mutual fund Industry” from International Journal of

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Innovative Research in Science, Engineering and Technology have stated that risk appetite of an
investor plays an important role in selection of mutual fund. While deciding their investment in
mutual funds investor should take decision based on their investment objective and analyze the
fund based on various criteria such as risk prevailing in the market, variations on the return and
deviations in the return etc.
10. Jani D and Jain R (2013) in an article “Role of Mutual Funds in Indian Financial System as
a Key Resource Mobilizer” from Abhinav Journal (International Monthly Referred Journal of
Research in Management & Technology) have reiterated that since fundamentals of Indian
economy are relatively strong, the economy will be on a successful path in the coming year. As
economy grows, Mutual Funds are going to be key resource mobilizer for Indian financial
system. Indian Mutual Fund industry is going to observe good growth rate in near Future.

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CHAPTER 3 : RESEARCH METHODOLOGY

3.1: Objectives of the study

3.2: Research Hypothesis

3.3: Scope of the study

3.4: Limitation of the study

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3.1 Objectives of the study
1. To study some of the mutual fund schemes and analyse them
2. Explore the recent development in the mutual funds in India.
3. To give an idea about the regulations of mutual funds.
4. To give a brief idea about the benefits available from Mutual Fund investment.

3.2 Research Hypothesis

 Null hypothesis (H0) = Equity funds perform better than debt and hybrid funds.
 Alternative hypothesis (H1) = Equity funds do not perform better than Debt and Hybrid
funds.

3.3 Scope of the study

In my project the scope is limited to some prominent mutual funds in the mutual fund industry. I
analyzed the funds depending on their schemes like equity, income, balance. But there is so
many other schemes in mutual fund industry like specialized (banking, infrastructure, pharmacy)
funds, index funds etc.

3.4 Limitation of the study

 The limited information in the secondary survey report is a fundamental obstacle in
finding out the true consequences of investing in a mutual fund system by investors.
 The study is limited to the different schemes available under the mutual funds selected.
 The study is limited to selected mutual fund schemes.
 The lack of information sources for the analysis part.

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CHAPTER 4: Data representation and analysis
4.1 Data representation and interpretation

4.2 Hypothesis Testing

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4.1 Data representation and interpretation
A. Equity Funds:

1. Large cap - also known as big caps are shares that trade for corporations with a
market capitalization of $10 billion or more. Large-cap stocks tend to be less volatile during
rough markets as investors fly to quality and stability and become more risk-averse.

S.no. Fund Fund 1 year 3 year Beta Downside

manager return(%) return(%) (%) risk(%)
1. Axis bluechip fund Shreyash D. 20.74 15.26 0.78 70.28
2. BNP Paribas Abhijeet D. 25.09 12.02 0.84 83.25
3. Nippon India Sailesh Raj 25.11 8.04 1.10 131.15

 Axis fund gave highest return in 3 year, but lowest in 1 year and its risk is also the lowest
of all.
 Nippon India gave highest return in 1 year, but lowest in 3 year, the risk is also high.

2. Large cap and Mid cap - These mutual funds select stocks for investment from the largest 250
stocks listed in the Indian markets (highest market capitalization). Larger stocks are expected to
be less risky whereas smaller stocks may have higher potential to grow .

S.no. Fund Fund 1 year 3 year Beta Downside

manager return(%) return(%) (%) risk(%)
1. Invesco growth Pranav G. 23.51 10.52 0.93 86.94
2. Kotak equity Harsha U. 27.62 11.56 0.94 88.29
3. Sundaram S krishna 20.63 10.14 1.65 104.85

 Kotak gave highest return in both 1 and 3 year, with medium risk. 

3. Flexi cap - A flex-cap fund allows investors to diversify their investment portfolio across
companies of different market capitalisation, mitigating risk and lowering volatility. They are
also referred to as diversified equity funds or multi-cap funds.

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S.no Fund Fund 1 year 3 year Beta Downside
manager return(%) return(%) (%) risk(%)
1. UTI flexi Ajay T. 35.13 16.77 0.97 80.63
2. DSP equity Atul B. 24.61 12.63 0.99 92.96
3. Kotak flexi Harsha U. 24.89 10.79 0.94 88.47

 UTI flexi gave highest return in both the years with lowest risk

4. Multi Cap –in Multi cap equity funds invest in companies of all sizes and across sectors.
Unlike large or mid cap funds, they can decide how money gets allocated between big, mid-
sized, and small companies. This flexibility also allows them to make changes the portfolio as
market conditions change.

S.no. Fund Fund 1 year 3 year Beta Downside

manager return(%) return(%) (%) risk(%)
1. BNP Paribas Abhijeet D. 23.27 7.68 0.92 101.35
2. ICICI Pru Sanskaran N. 30.55 9.53 1.00 100.32
3. Invesco India Amit N. 26.38 7.96 1.03 101.65
 ICICI pru. Gave highest return in both the years, with lowest risk.

5. Mid Cap Funds - Mid Cap Mutual Funds are equity funds that invest in the mid-sized
companies of India. The companies are some of the fastest-growing companies in India and are
at a stage today's leaders were a few years back.

S.no Fund Fund 1 year 3 year Beta Downside

manager return(%) return(%) (%) risk
1. DSP midcap Vinit S. 27.77 10.10 0.85 76.91
2. Nippon India Manish G. 32.72 10.91 0.96 87.95
3. Franklin India R jankirama 32.55 8.30 0.92 85.73
 Nippon India gave highest return in both the years, but the risk was high.

6. Small Cap - Small Cap equity funds invest in the smallest companies in India. These
companies are beyond the top 250 companies and are mostly unheard in our daily lives. While

20
they can deliver fantastic returns, small cap companies are incredibly volatile, and you can see
losses in short to medium term.
S.no Fund Fund 1 year 3 year Beta Downside
manager return return (%) risk
1. Axis small cap Anupam T. 23.05 14.22 0.76 61.14
2. Kotak small cap Pankaj T. 52.07 13.07 0.94 82.77
3. Nippon India Samir R. 46.16 7.34 0.97 92.66
 Kotak small cap gave high return in 1 year but low in 3 year, risk is medium.
 Axis small cap gave highest return in 3 year but lowest in 1,with the lowest risk.

B. Debt Funds:
1. Banking and PSUs debt - Banking and PSU funds are debt funds that lend only to banks and
public sector companies. The high quality of borrowers allows these loans mean the risk of
default is very less. However, they do get affected if interest rates in the economy go up.
S.no Fund Fund 1 year 3 year Standard
manager return(%) return(%) deviation(%)
1. Kotak banking & Deepak A. 7.42 8.92 2.42
PSU
2. IDFC banking & Anurag M. 8.21 9.43 2.48
PSU
3. Axis banking & Aditya P. 7.61 8.80 2.08
PSU
 IDFC gave highest return in both the years.

2. Medium term debt - Medium term/duration funds are debt funds that lend to quality
companies for 3 or more years. The longer tenure of loan means these funds returns are subject
to the interest rate changes that borrowing companies undergo due to positive or negative
economic cycles over time.

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S.no Fund Fund 1 year 3 year Standard
manager return(%) return(%) deviation(%)
1. IDFC Bond Suyash Ch. 6.56 8.06 2.57
2. Axis Strategic Bond Devang S. 7.65 7.79 2.60
3. L&T resurgent India Shriram R. 6.31 6.95 3.32
 Axis gave high return in 1 year, IDFC gave high return in 3 year.

3. Short Duration Debt - Short term funds are debt funds that lend to companies for a period of
1 to 3 years. These funds mostly take exposure only in quality companies that have proven
record of repaying their loans on time as well as have sufficient cash flows from their business
operations to justify the borrowing.
S.no Fund Fund 1 year 3 year Standard
manager return(%) return(%) Deviation(%)
1. Axis short term Devang S. 7.97 8.44 1.78
2. IDFC bond Suyash Ch. 7.28 8.22 1.94
3. L&T short term Shriram R. 7.17 8.01 1.81
 Axis gave highest return in both the years.

4. Long Duration - Long Duration funds are debt funds that lend to quality companies for 5 or
more years. The tenure of loan means that investment is more or less exposed to the entire
economic cycle and hence is inherently more risky than other Debt Funds.
S.no Fund Fund 1 year 3 year Standard
Manager return(%) return(%) deviation(%)
1. IDFC bond Inc. Suyash Ch. 5.82 8.88 4.13
2. SBI magnum income Dinesh A. 7.69 9.06 2.98
3. Kotak bond Abhishek B. 6.70 8.77 3.75
 SBI gave highest return in both the years.

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C. Hybrid Funds:
1. Aggressive Hybrid Funds - are balanced funds invest primarily in stocks with some
allocation to FD-like instruments. Spreading out of investments means these funds are less risky
than pure equity funds with almost similar returns in the long run.
S.no Fund Fund 1 year 3 year Beta Downside
Manager return(%) return(%) (%) risk(%)
1. BNP Paribas K.Lakshmanan 22.45 13.39 1.01 97.41
2. SBI Equity R.Srinivasan 18.96 11.11 1.08 119.32
3. DSP Equ & Vikram C. 20.58 11.23 1.20 126.75
bond
 BNP gave highest return in both the years, with the lowest risk.

2. Conservative Hybrid - Conservative Hybrid funds invest primarily in FD-like instruments

with some allocation to stocks. These funds look to provide more returns than bank fixed
deposits without taking too much risk.
S.no Fund Fund 1 year 3 year Beta Downside
Manager return(%) return(%) (%) risk(%)
1. ICICI Pru Rajat Ch. 11.43 9.10 0.88 40.14
2. Franklin India S. Paudwal 7.34 6.68 1.18 140.65
3. DSP Reg Sav Vinit S. 9.18 4.08 1.47 238.58
 ICICI gave highest return in both the years, with the lowest risk.

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4.2 Hypothesis Testing
 Upon analysis of different Types of Mutual Funds it can be observed that average 1year
return of equity funds always ranged above 20% with the Highest reaching upto 52.07%
in the Equity small cap fund by Kotak.It was observed that 3years returns were
significantly lower and inconsistent with 1 year returns of equity funds ,with Flexi equity
funds showing the highest 3 years returns of 16.77% in the equity fund segment.
 Debt funds had significantly low 1years returns compared to equity funds , with highest
returns reaching upto only 8.21% by the Banking and PSU debt fund of IDFC. It was
observed their 3 years returns were very consistent with 1 year Returns of Debt funds but
still were less than the 3 years returns of most Equity funds.
 Upon Analysis of Hybrid funds it was observed that Aggressive Hybrid funds had
significantly higher 1year returns than conservative Hybrid funds.
 1year return of Aggressive Hybrid funds stood at par with large cap equity funds but
much lower than Mid, multi and small cap funds. However It was observed that 3years
returns of Hybrid funds were much more higher and consistent with their 1year returns
compared to equity funds.
 Upon risk analysis it was observed that Debt carried the least degree of risk subject to
least rate of return. It was observed that beta of Hybrid funds were above 1.0 on an
average which showed higher volatility compared to the equity funds whose beta was
mostly below 1.
 Downward risk was also observed to be the highest in Hybrid funds compared to equity
funds.
 Therefore since most Equity funds showed higher returns than other funds and had a risk
lower than Hybrid funds.
 The null hypothesis is accepted that equity funds perform better than debt and Hybrid
funds.

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CHAPTER 5: Results and discussion
5.1 Major findings

5.2 Discussions

5.3 Conclusions

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5.1 Major findings

 Primarily, mutual funds are regulated by the Securities and Exchange Board of India (SEBI).
 A mutual fund should have the approval of RBI in order to provide a guaranteed returns
scheme.
 The Ministry of Finance acts as a supervisor of RBI and SEBI and appellate authority under
SEBI regulations.
 The Association of Mutual Funds in India (AMFI) has been made to develop this Mutual
Fund Industry of India on professional and ethical lines and to enhance and maintain
standards in all areas with a view to protect and promote the interests of mutual funds and
their unitholders.
 It offers you professional management. Through mutual funds, investors get access to the
professional money managers who have expertise and experience in the field of buying,
selling and monitoring investments by the investors.
 It helps you in holding a wide variety of shares at a much lower price than you really could
own by yourself. If one investment in the Fund decreases in value that does not mean that the
other will also be decreased, it may increase as well. By holding shares in the market you can
take advantage of the changing environment in the industry. It helps in diversification.
 It gives opportunities to the small investors to take part in the professional asset management
and they can have low investment minimums.
 Most of the mutual funds allow investors to deal with shares on any business day. Many
funds provide you with an automatic purchase program. It is according to the convenience of
the investors and helps them in gaining the best out of the money invested.

 The higher level of diversification since the basket of a portfolio will be aimed at spreading
the investment in order to offer protection against concentration risks.
 They provide regular liquidity as shareholders of open-ended funds and unit investment trusts
may sell their holdings back to the fund at regular intervals at a price equal to the NAV of the
fund’s holdings.
 Managed by professional investors who have rich experience in investment and can
understand the nerves of the market.

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 Since mutual funds are regulated by a Government body i.e. AMFI in India, it offers
protection and comfort to the investors before considering investment opportunity.
 All mutual funds are required to report the same level of information to the investors which
makes it relatively easier for comparison in case of diversification.
 These funds provide regular reports of their performance and are also easily available on the
internet to understand past trends as well as the strategies implemented.

5.2 Discussions

Upon findings of the research we can say that:

 Equity funds are preferred for both high risk and moderate risk taking investors. Well,
Equity funds are also an ideal investment option for small investors. The benefits which
make equity funds suitable for small investors are: low risk, small capital for investment
and diversified portfolio.
 Debt funds carry low risk - preferable for retired class. Unlike equity mutual funds, a debt
mutual fund is not subject to market conditions. Investments are made in securities with a
fixed maturity period and a rate of interest. New investors usually start with a low-risk
appetite. Debt mutual funds serve as a great avenue of investment for such investors.
There is steady returns without the fear of losing it all due to markets crashing.
 Hybrid funds - preferable for Young and adventurous investors who are willing to take
high risks for a high return in the long term. A balanced fund offers investors the benefit
of diversification since it combines both equity and debt. When share prices go down, the
debt component in these kinds of hybrid mutual funds ensures stability. So these funds
are able to withstand shocks during a bear phase. Generally debt and equity have an
inverse correlation; they move in different directions. So having a balanced fund helps
you hedge your bets. One thing you must remember is that balanced funds do not do as
well when the market is on a bull run. Another point is that when share prices rise, fund
managers will have to sell stocks in these kinds of hybrid mutual funds to maintain the
required equity-debt ratio.

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5.3 Conclusions
Mutual fund industry have developed itself very fastly in today’s times . Mutual fund industry in
India is maturing with increase in the number of investors and increasing geographical spread.
MF in India have become major players in the equity and corporate bond markets and are also
providing crucial liquidity support to the money market. Consequently, their influence on price
movements in equity and debt markets as also domestic liquidity conditions has increased over
time.

This research was made to understand the management of mutual funds, the schemes which
Asset management companies offers and analysing them from the given data.

REFERENCES:
https://www.indiastudychannel.com/projects/666-a-study-on-mutual-funds-in-india.aspx

https://www.getsmarteraboutmoney.ca/invest/investment-products/mutual-funds-segregated-
funds/how-mutual-funds-work/

https://www.investopedia.com/terms/m/mutualfund.asp

https://www.investopedia.com/terms/a/asset_management_company.asp#:~:text=An%20asset%20ma
nagement%20company%20(AMC)%20invests%20pooled%20funds%20from%20clients,investment%20c
ompanies%20sponsoring%20mutual%20funds.

https://www.yourarticlelibrary.com/investment/mutual-funds-rationale-for-and-strengthening-the-
mutual-funds/39547

https://www.federatedinvestors.com/resources/resources-for/individual-investors/fund-objective-and-
style.do?hint=page

https://www.amfiindia.com/research-information/mf-history

https://www.etmoney.com/mutual-funds

https://blog.ipleaders.in/mutual-funds-regulation-in-india/

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https://www.angelbee.in/mutual-funds/hybrid-funds

Bibliography:

 Research Methodology - C.R Kothari

 Principals of Statistics - Dr.S.M Shukla
 Advanced Statistics - Dr.S.M Shukla and Dr.K.L Gupta

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