A Study on Mutual Fund Management

Research project submitted in partial fulfilment For The Awarded

of Degree of Master Of Business Administration (2023-2024)

By

SHUBHAM SINGH

to the

GNIOT GROUP OF INSTITUTIONS

GREATER NOIDA KONOWLEDGE PARK2

29 JANUARY 2024

Submitted by Guided by

SHUBHAM SINGH Dr. Rk Tomer

Student id Associate professor

Mba A4 23272114

Batch (2023-25)

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

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

Name : Dr. RK TOMER ASSOCIATE PROFESSOR

Department : MBA

GNIOT GROUP OF INSTITUTION 29

JANUARY 2024

DECLARATION

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I hereby declare that this project report entitled “A study on mutual fund management ” was carried
out by me for the degree of MBA under the guidance and supervision of Dr. RK TOMER (Name
of the Supervisor and designation) of Department of MBA, GNIOT College. The interpretations
put forth are based on my reading and understanding of the original texts and they are not
published anywhere in any form. The other books, articles and websites, which I have made use
of are acknowledged at the respective place in the text. This report research is not submitted at
any othe colleges and university.

Place: Noida

Name of the Student: SHUBHAM SINGH

Class & Section: MBA Section – A4 id no - 23272114

Date: 29 January 2024

ACKNOWLEDGEMENT

It is a matter of great pleasure to thank all esteemed who helped me to complete my final research
successfully otherwise it would not be possible.

Acknowledgement is not only a ritual but also an expression indeptedness to all those. Who have
helped in the completion process of the project. on of the most pleasant aspect in

Collecting the necessary and vital information and compiling it is the opportunity to thanks all.

Those who activity contributed to it. I would like to express my deepest gratitude and thanks to PROF,
RK TOMER, DR ANURAG JOSHI ( CLASS CO-ORDINATOR ) DR RAJKUMAR (HEAD OF DEPARTMENT)
and Project guide DR RK TOMER of the valuable guidance and constant encouragement which extend to
me through my research project .

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

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 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

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.

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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.
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.

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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 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,
investmentgrade 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

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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 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.

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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 standalone
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.

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:

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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, Reliance Capital was
ranked as the 77th largest corporation in India with 5th rank in 'NonBanking 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.

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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 selfdecide
and then go through the process of investment. Thus, from the individual investor’s angle mutual
funds are very much advantageous.
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.

CHAPTER 2 : REVIEW OF LITERATURE

2.1 International Reviews
2.2 National Reviews

2.1 International reviews:

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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.
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

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 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
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

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 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
meanvariance 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.

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.

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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.
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

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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
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

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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

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.

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 • 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.

CHAPTER 4: Data representation and analysis

4.1 Data representation and interpretation

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 4.2 Hypothesis Testing

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.

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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.

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, midsized, 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

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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 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

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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.

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.

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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.

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 Manager 1 year 3 year Beta Downside
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 & bond Vikram C. 20.58 11.23 1.20 126.75

• 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

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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.
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
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

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 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.
• 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.

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• 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 equitydebt ratio.

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:

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

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

segregatedfunds/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-
themutual-funds/39547 https://www.federatedinvestors.com/resources/resources-for/individual-

investors/fund-objectiveandstyle.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/ 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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