Uti Mutual Fund Project

8/10/2019 Uti Mutual Fund Project

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'a#ter of $u#ine## Admini#tration and thi# wor. ha# been #ubmitted to

$ana#thali 3ni"er#it%4 Raja#than5he information gi"en in thi# project i# true to the be#t of m%

.nowledge

Swati dalal-anita .umari

'$A 66nd Sem

ACKNOWLEDGEMENT

Super"i#ion and guidance of a large number of indi"idual# ha"econtributed to the #ucce##ful completion of thi# project5hi# project i# ahumble attempt to #.etch down the contribution of all tho#e per#on# who

ha"e directl% or indirectl% gi"en their preciou# time and help along withproper guidance for ma.ing thi# report in the following #hape6 am highl% than.ful to 'r )arendra ar%a 3564 without who#epermi##ion project of 356 would ha"e been ca#tle in the air 6 than. 'r)arendra ar%a project coordinator who pro"ided me with their#uper"i#ion and guidance in completing thi# project effecti"el%7a#t but not the lea#t4 6 pa% m% gratitude to m% parent#4 famil% member#4friend#4 facult% member# of $ana#thali 3ni"er#it% and all member# of3564 for their #upport and whole hearted cooperation in drafting thi#

report


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5able of content

8O'PA)Y PRO967:

1. Introduction

The Indian mutual fund industry has come a long way since its modest

beginning in form of establishment of Unit Trust of India in 1963. Today it boasts


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of large number of private sector players with total asset under management close

to Rs. !9"!""" crore. The mutual funds offer a nice avenue for investors who do

not have the re#uisite $nowledge! a large corpus or the time to $eep tab on the

mar$ets and ta$e investment decisions.

%owever the with the large number of schemes and fund houses clamoring

for attention! the common investor faces two main challenges. &irstly! that of

choosing a scheme that is appropriate for his investment needs. 'econdly!

choosing among a particular category of scheme the fund house that will perform

and beat the mar$et. The financial services industry along with its aggressive

mar$eting entices people to chase performance by touting ()star mutual funds or

emerald stoc$s. *aga+ines and television channels are not far behind in getting

e,perts to tell you how you should identify these gems. The common investor

generally loo$s at criteria such as past performance! or star fund manager for

ma$ing investment decision. %owever these choices may turns out to entirely

incorrect due to varied reasons such as! changing mar$et dynamics! e,it of star

fund manger etc.

In this report we attempt to answer the second dilemma of an investor that

of performance evaluation of the mutual fund house. -e compare five schemes of

UTI mutual fund on various parameters and finally comment on the performance

of these schemes.

Vision

To be the most referred *utual &und.

*issionTo ma$e uti mutual fund/

The most trusted brand! admired by all sta$eholders The largest and most efficient money manager with global presence

The best in class customer service provider

The most preferrd employer

The most innovative and best wealth creator

0 socially responsible organi+ation $nown for best corporate governance

Genesis


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anuary 12! ""3 is when UTI *utual &und started to pave its path following thevision of UTI 0sset *anagement o. 4td. 5UTI0*! which was appointed byUTI Trustee o! vt. 4td. for managing the schemes of UTI *utual &und and theschemes transferred7migrated from the erstwhile Unit Trust of India.UTI0* provides professionally managed bac$ office support for all businessservices of UTI *utual &und in accordance with the provisions of the Investment*anagement 0greement! the Trust 8eed! the ':I 5*utual &unds Regulationsand the ob;ectives of the schemes. 'tate)of)the)art systems and communicationsare in place to ensure a seamless flow across the various activities underta$en byUTI*&.

'ince &ebruary 3! ""2! UTI0* is also a registered portfolio manager under the':I 5ortfolio *anagers Regulations! 1993 for underta$ing portfoliomanagement services. UTI0* also acts as the manager and mar$eter tooffshore funds through its 1"" < subsidiary! UTI International 4imited! registeredin =uernsey! hannel Islands.

UTI0sset Under *anagement presently manages a corpus of over Rs.69!1"!("9.2( la$hs as on 3"th une "11 5source/www.amfiindia.com. UTI*utual &und has a trac$ record of managing a variety of schemes catering to theneeds of every class of citi+ens. It has a nationwide networ$ consisting 12> UTI&inancial entres 5U&s and UTI International offices in 4ondon! 8ubai and:ahrain.

UTI0* has a well)#ualified! professional fund management team! which hasbeen fully empowered to manage funds with greater efficiency and accountabilityin the sole interest of the unit holders. The fund managers are ably supported by a

strong in)house securities research department. To ensure investors? interests! aris$ management department is also in operation.

Reliability

UTI*& has consistently reset and upgraded transparency standards. 0ll thebranches! U&s and registrar offices are connected on a robust IT networ$ toensure cost)effective #uic$ and efficient service. 0ll these have evolved UTI*&to position as a dynamic! responsive! restructured! efficient and transparent entity!fully compliant with ':I regulations.

Investment !iloso"!y

UTI *utual &und?s investment philosophy is to deliver consistent and stablereturns in the medium to long term with a fairly lower volatility of fund returnscompared to the broad mar$et. It believes in having a balanced and well)diversified portfolio for all the funds and a rigorous in)house research basedapproach to all its investments. It is committed to adopt and maintain good fundmanagement practices and a process based investment management.
http://www.amfiindia.com/http://www.amfiindia.com/


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UTI *utual &und follows an investment approach of giving as e#ual animportance to asset allocation and sectoral allocation! as is given to securityselection while managing any fund. It combines top)down and bottom)upapproaches to enable the portfolios7funds to adapt to different mar$et conditionsso as to prevent missing an investment opportunity.

In terms of its funds performance! UTI *utual &und aims to consistently remainin the top #uartile vis)@)vis the funds in the peer group.

*umbai1st&eb ""3

O#$ECTIVE O% T&E 'T(D)

The ob;ective of study is to compare uti?s ( mutual funds on certain parameterssuch as /

Type of investors

Ab;ective of the investment

'I returns provided by various mutual fund and its fundpositioning in the mar$et.


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'COE O% 'T(D)

The scope of the study is to promote and sell the funds of uti mutual funds to thecustomers of the ban$s so that they can be awared of investing money in 'I?s ofmutual fund.

-e have noted that similar schemes will generally have similar investmentob;ectives! ris$)return grade! entry e,it loads and loc$)in periods. %owever! weobserve that even when these similar schemes operate in same environment! withsame constraints there is a mar$ed difference in there performance. -e evaluatethe absolute as well as relative performance of the schemes based on differentmeasure stated above

*UTU04 &UB8'

*utual funds are investment companies that pool money from investors at large and offer to selland buy bac$ its shares on a continuous basis and use the capital thus raised to invest in

securities of different companies. This article helps you to $now in depth on/ Is it possible todiversify investment if invested in mutual fundsC &ind more on the wor$ing of mutual fundDnow more about the legal aspects in relation to the mutual funds 0t the beginning of thismillennium! mutual funds out numbered all the listed securities in Bew Eor$ 'toc$ ,change.*utual funds have an upper hand in terms of diversity and li#uidity at lower cost in comparisonto bonds and stoc$s. The popularity of mutual funds may be relatively new but not their originwhich dates bac$ to 1>th century. %olland saw the origination of mutual funds in 1FF2 asinvestment trusts before spreading to 0nglo)'a,on countries in its current form by 1>6>. -e will


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discuss now as to what are mutual funds before going on to seeing the advantages of mutualfunds. *utual funds are investment companies that pool money from investors at large and offerto sell and buy bac$ its shares on a continuous basis and use the capital thus raised to invest insecurities of different companies. The stoc$s these mutual funds have are very fluid and are used

for buying or redeeming and7or selling shares at a net asset value. *utual funds posses shares ofseveral companies and receive dividends in lieu of them and the earnings are distributed amongthe share holders. 0 :rief of %ow *utual &unds -or$ *utual funds can be either or both ofopen ended and closed ended investment companies depending on their fund managementpattern. 0n open)end fund offers to sell its shares 5units continuously to investors either in retailor in bul$ without a limit on the number as opposed to a closed)end fund. losed end funds havelimited number of shares. *utual funds have diversified investments spread in calculatedproportions amongst securities of various economic sectors. *utual funds get their earnings intwo ways. &irst is the most organic way! which is the dividend they get on the securities theyhold. 'econd is by the redemption of their shares by investors will be at a discount to the currentB0Gs 5net asset values. 0re *utual &unds Ris$ &ree and -hat are the 0dvantagesC Ane must

not forget the fundamentals of investment that no investment is insulated from ris$. Then itbecomes interesting to answer why mutual funds are so popular. To begin with! we can saymutual funds are relatively ris$ free in the way they invest and manage the funds. The investmentfrom the pool is well diversified across securities and shares from various sectors. Thefundamental understanding behind this is not all corporations and sectors fail to perform at atime. 0nd in the event of a security of a corporation or a whole sector doing badly then thepossible losses from that would be balanced by the returns from other shares. This logic has seenthe mutual funds to be perceived as ris$ free investments in the mar$et. Ees! this is not entirelyuntrue if one ta$es a loo$ at performances of various mutual funds. This relative freedom fromris$ is in addition to a couple of advantages mutual funds carry with them. 'o! if you are a retailinvestor and planning an investment in securities! you will certainly want to consider the

advantages of investing in mutual funds. 4owest per unit investment in almost all the cases Eourinvestment will be diversified Eour investment will be managed by professional moneymanagers

0bout *utual &und


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%ow does a *utual fund wor$C0 mutual fund is a collection of stoc$s! bonds! or other securities owned by a group of investorsand managed by a professional investment company. &or an individual investor to have adiversified portfolio is difficult. :ut he can approach to such company and can invest into shares.*utual funds have become very popular since they ma$e individual investors to invest in e#uityand debt securities easy. -hen investors invest a particular amount in mutual funds! he becomesthe unit holder of corresponding units. In turn! mutual funds invest unit holders money in stoc$s!bonds or other securities that earn interest or dividend. This money is distributed to unit holders.If the fund gets money by selling some stoc$s at higher price the unit holders also are liable to

get capital gains. 0 mutual fund is #uite simply a collection of stoc$s! bonds! or other securitiesowned by a group of investors and managed by a professional investment company. Thus themutual funds are not the depositing instrument that has guarantee of getting certain amount but itis li$e any other securities where the investor can have capital gains or loss.

0dvantages of *utual &undro*essional +ana,ement - The primary advantage of funds 5at least theoretically is theprofessional management of your money. Investors purchase funds because they do not have thetime or the e,pertise to manage their own portfolio. 0 mutual fund is a relatively ine,pensiveway for a small investor to get a full)time manager to ma$e and monitor investments.

Diversi*ication :y owning shares in a mutual fund instead of owning individual stoc$s orbonds! your ris$ is spread out. The idea behind diversification is to invest in a large number of

assets so that a loss in any particular investment is minimi+ed by gains in others. In other words!the more stoc$s and bonds you own! the less any one of them can hurt you 5thin$ about nron.4arge mutual funds typically own hundreds of different stoc$s in many different industries. Itwouldn?t be possible for an investor to build this $ind of a portfolio with a small amount ofmoney.

Economies o* 'cale :ecause a mutual fund buys and sells large amounts of securities at a time!its transaction costs are lower than you as an individual would pay.


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Li/uidity ust li$e an individual stoc$! a mutual fund allows you to re#uest that your shares beconverted into cash at any time.

'im"licity :uying a mutual fund is easyH retty well any ban$ has its own line of mutualfunds! and the minimum investment is small. *ost companies also have automatic purchaseplans whereby as little as Rs 1""" can be invested on a monthly basis.

%istory of *utual &und in India

ioneer of mutual fund is UTI in 1963.

0ctual growth started in 19>F.

The dramatic improvement through #uality wise and #uantity wise.

*ain reason for its poor growth is new concept in the country.

4arge sections of Indian investor are yet to be intellectual with this concept.

%ence the it is prime responsibility of all *utual &und companies ! to ma$e the product

correctly abreast of selling.

There are four 2 phases according to the development of sector

&irst hase 1962)19>F

1962 to 19>F/ Unit Trust of India 5UTI was established on 1963 by an 0ct of

arliament.

It was set up by the Reserve :an$ of India and functioned under the Regulatory and

administrative control of the Reserve :an$ of India.

In 19F> UTI was de)lin$ed from the R:I and the Industrial 8evelopment :an$ of India

5I8:I too$ over the regulatory and administrative control in place of R:I.

The first scheme launched by UTI was Unit 'cheme 1962. 0t the end of 19>> UTI hadRs.6!F"" cores of asset

'econd hase 19>F)1993 5ntry of ublic 'ector &unds

19>F mar$ed the entry of non) UTI! public sector mutual funds set up by public sectorban$s and 4ife Insurance orporation of India 54I and =eneral Insurance orporationof India 5=I.

':I *utual &und was the first non) UTI *utual &und established in une 19>F followed

by anban$ *utual &und 58ec >F! un;ab Bational :an$ *utual &und 50ug >9! Indian:an$ *utual &und 5Bov >9! :an$ of India 5un 9"! :an$ of :aroda *utual &und 5Act9.

4I established its mutual fund in une 19>9 while =I had set up its mutual fund in

8ecember 199".

0t the end of 1993! the mutual fund industry had assets under management of Rs.2F!""2

crores.

Third hase 1993)""3 5ntry of rivate 'ector &unds

-ith 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. 0lso! 1993 was theyear in which the first *utual &und Regulations came into being! under which all mutualfunds! e,cept UTI were to be registered and governed.

The erstwhile Dothari ioneer 5now merged with &ran$lin Templeton was the first

private sector mutual fund registered in uly 1993.


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The 1993 ':I 5*utual &und Regulations were substituted by a more comprehensive

and revised *utual &und Regulations in 1996. The industry now functions under the':I 5*utual &und 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 andac#uisitions.

0s at the end of anuary ""3! there were 33 mutual funds with total assets of Rs.

1!1!>"( crores.

The Unit Trust of India with Rs.22!(21 crores of assets under management was way

ahead of other mutual funds.

&ourth hase since &ebruary ""3

In &ebruary ""3! following the repeal of the Unit Trust of India 0ct 1963 UTI was

bifurcated into two separate entities. Ane is the 'pecified Underta$ing of the Unit Trustof India with assets under management of Rs.9!>3( crores as at the end of anuary ""3!

representing broadly! the assets of U' 62 scheme! assured return and certain otherschemes.

The 'pecified Underta$ing of Unit Trust of India! functioning under an administrator and

under the rules framed by =overnment of India and does not come under the purview ofthe *utual &und Regulations.

The second is the UTI *utual &und 4td! sponsored by ':I! B:! :A: and 4I. It is

registered with ':I and functions under the *utual &und Regulations

-ith the bifurcation of the erstwhile UTI which had in *arch """ more than Rs.F6!"""

crores of assets under management and with the setting up of a UTI *utual &und!conforming to the ':I *utual &und Regulations! and with recent mergers ta$ing placeamong different private sector funds! the mutual fund industry has entered its current

phase of consolidation and growth. The graph indicates the growth of assets over theyears.


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=RA-T% IB 0''T' UB8R *0B0=*BT

Regulations*utual &unds in India are governed by the'E#I 0+utual %und Re,ulations 1223as amendedfrom time to time.

Argani+ation of *utual &und

The structure consists of'"onsor

'ponsor is the person who acting alone or in combination with another body corporateestablishes a mutual fund. 'ponsor must contribute at least 2"< of the net worth of theInvestment *anaged and meet the eligibility criteria prescribed under the 'ecurities and,change :oard of India 5*utual &unds Regulations! 1996.The 'ponsor is not responsible or


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liable for any loss or shortfall resulting from the operation of the 'chemes beyond the initialcontribution made by it towards setting up of the *utual &und.

Trust

The *utual &und is constituted as a trust in accordance with the provisions of the Indian Trusts0ct! 1>> by the 'ponsor. The trust deed is registered under the Indian Registration 0ct! 19">.

Trustee

Trustee is usually a company 5corporate body or a :oard of Trustees 5body of individuals. Themain responsibility of the Trustee is to safeguard the interest of the unit holders and inter aliasensure that the 0* functions in the interest of investors and in accordance with the 'ecuritiesand ,change :oard of India 5*utual &unds Regulations! 1996! the provisions of the Trust8eed and the Affer 8ocuments of the respective 'chemes. 0t least 73rd directors of the Trusteeare independent directors who are not associated with the 'ponsor in any manner.

Asset +ana,ement Com"any 0A+C

The Trustee as the Investment *anager of the *utual &und appoints the 0*. The 0* is

re#uired to be approved by the 'ecurities and ,change :oard of India 5':I to act as an assetmanagement company of the *utual &und. 0tlas ("< of the directors of the 0* is anindependent director who is not associated with the 'ponsor in any manner. The 0* must havea net worth of at least 1" crore at all times.

Re,istrar and Trans*er A,ent

The 0* if so authori+ed by the Trust 8eed appoints the Registrar and Transfer 0gent to the*utual &und. The Registrar processes the application formJ redemption re#uests and dispatchesaccount statements to the unit holders. The Registrar and Transfer agent also handlescommunications with investors and updates investor records.

Types of *utual &und

E/uity Oriented 'c!emesThese schemes! also commonly called =rowth 'chemes! see$ toinvest a ma;ority of their funds in e#uities and a small portion in money mar$et instruments.'uch schemes have the potential to deliver superior returns over the long term. %owever!because they invest in e#uities! these schemes are e,posed to fluctuations in value especially inthe short term.

#uity schemes are hence not suitable for investors see$ing regular income or needing to usetheir investments in the short)term. They are ideal for investors who have a long)term investmenthori+on. The B0G prices of e#uity fund fluctuates with mar$et value of the underlying stoc$which are influenced by e,ternal factors such as social! political as well as economic.

Inde4 'c!emes

Inde, &unds replicate the portfolio of a particular inde, such as the :' 'ensitive inde,! 'K

B' (" inde, 5Bifty! etc These schemes invest in the securities in the same weight agecomprising of an inde,. B0Gs of such schemes would rise or fall in accordance with the rise orfall in the inde,! though not e,actly by the same percentage due to some factors $nown asLtrac$ing errorM in technical terms. Becessary disclosures in this regard are made in the offerdocument of the mutual fund scheme. There are also e,change traded inde, funds launched bythe mutual funds! which are traded on the stoc$ e,changes.

'ector '"eci*ic 'c!emes

These are the funds7schemes! which invest in the securities of only those sectors or industries as


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specified in the offer documents. e.g. harmaceuticals! 'oftware! &ast *oving onsumer =oods5&*=! etroleum stoc$s! etc. The returns in these funds are dependent on the performance ofthe respective sectors7industries. -hile these funds may give higher returns! they are more ris$ycompared to diversified funds. Investors need to $eep a watch on the performance of those

sectors7industries and must e,it at an appropriate time. They may also see$ advice of an e,pert.

Ta4 'avin, 'c!emes

These schemes offer ta, rebates to the investors under specific provisions of the Income Ta, 0ct!1961 as the =overnment offers ta, incentives for investment in specified avenues. e.g. #uity4in$ed 'avings 'chemes 54''. ension schemes launched by the mutual funds also offer ta,benefits. These schemes are growth oriented and invest pre)dominantly in e#uities. Their growthopportunities and ris$s associated are li$e any e#uity)oriented scheme.

Income5Debt Oriented 'c!eme

The aim of income funds is to provide regular and steady income to investors. 'uch schemesgenerally invest in fi,ed income securities such as bonds! corporate debentures! =overnmentsecurities and money mar$et instruments. 'uch funds are less ris$y compared to e#uity schemes.These funds are not affected because of fluctuations in e#uity mar$ets. %owever! opportunities ofcapital appreciation are also limited in such funds. The B0Gs of such funds are affected becauseof change in interest rates in the country. If the interest rates fall! B0Gs of such funds are li$elyto increase in the short run and vice versa. %owever! long term investors may not bother aboutthese fluctuations.

&ybrid5#alanced 'c!emes

These schemes are commonly $nown as balanced schemes. These schemes invest in bothe#uities as well as debt. :y investing in a mi, of this nature! balanced schemes see$ to attain theob;ective of income and moderate capital appreciation and are ideal for investors with aconservative! long)term orientation. :alanced &und and =ift &und are e,amples of hybridschemes.

*oney *ar$et74i#uid 'chemesThese funds are also income funds and their aim is to provide easy li#uidity! preservation ofcapital and moderate income. These schemes invest e,clusively in safer short)term instrumentssuch as treasury bills! certificates of deposit! commercial paper and inter)ban$ call money!government securities! etc. Returns on these schemes fluctuate much less compared to otherfunds. These funds are appropriate for corporate and individual investors as a means to par$ theirsurplus funds for short periods.

Gilt 'c!emes

These funds invest e,clusively in government securities. =overnment securities have no defaultris$. B0Gs of these schemes also fluctuate due to change in interest rates and other economic

factors as are the case with income or debt oriented schemes.Arbitra,e %und0rbitrage is one of the most effective ways to insulate against mar$et volatility. 0n arbitragefund buys e#uities in the cash mar$et and simultaneously sells in the futures mar$et! thusensuring mar$et neutrality for the investment. In other words! it is a uni#ue asset class by itselfwhere returns are generated by capturing the pricing differential between the cash and the futuresmar$ets. It is also termed as a mar$et)neutral fund where the returns are not going to be impactedby volatility in the mar$et.


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ranging from one month to five years. &*s can be compared to fi,ed deposits of a ban$. -hilea fi,ed deposit offers a Pguaranteed? return! returns in &*s are only Pindicative?. Typically! thefund house fi,es a Ptarget amount? for a scheme! which it ties up informally with borrowersbefore the scheme opens. That way it $nows the interest rate it will earn on its investments!

providing the Pindicative return? to investors.

+ont!ly Income lans

*onthly income plans! or *Is! as they are more popularly $nown! are a category of mutualfunds that invest mainly in debt instruments. Anly about 1")")< of the assets are allocated toe#uity stoc$s. :ut the very name monthly income plan is a misnomer! as these funds do notguarantee a monthly income. 4i$e any other fund! the returns are mar$et)driven. Though manyfund houses strive to declare a monthly dividend! they have no such obligation. *Is arelaunched with the ob;ective of giving a monthly income to investors! but the periodicity dependsupon the option chosen by the investor. These are generally monthly! #uarterly! half)yearly andannual options. 0 growth option is also available! where the investors do not receive regulardividends! but gains in the form of capital appreciation.

*utual &und ategory 3 Eear Return

I8& remier #uity #uity ".9 percent

IB= 8ividend Eield #uity ".36 percent

Reliance Regular 'avings #uity #uity 19.(> percent

:irla 'un 4ife 8ividend #uity 1>.F percent

UTI 8ividend Eield #uity 1>.6> percent

III rudential &und #uity 1F.32 percent

%8& Top "" 8iversified 1F.16 percentReliance Regular %ybrid ".12 percent

%8& rudence %ybrid 16.2 percent

6. Di**erent +utual *und 'c!emes

There are currently wide varieties of mutual funds schemes available in Indian mar$ets these can

be classified on following basis!

1. *oney *ar$et54i#uid funds

. #uity

a. 'trategy

a.i. 0ggressive growth

a.ii. =rowth


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a.iii. Galue

a.iv. :lend

a.v. =rowth and income

b. :y si+e

b.i. 4arge caps

b.ii. *idcaps

b.iii. 'mall caps

c. Inde,

d. International

d.i. =lobal

d.ii. Us

d.iii. ountry specific

d.iv. merging mar$ets

e. 'ector funds

3. :ond

a. *unicipal

b. orporate

c. *ortgage)bac$edd. =I4T

2. &loating rate funds

a. 'hort)term

b. 4ong)term

(. #uity 4in$ed 'aving 'chemes 54''

6. Apen)ended and close ended

*oreover! the finance minister *r. hidambaram in his Union budget of ""F)">! proposed

the Indian mutual fund industry to play bigger part in infrastructure development in India. This


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mean they can now directly invest into infrastructure pro;ect by launching dedicated

infrastructure development funds.

7. 'ome 8ey terms

A. O"en Ended 'c!eme) 0 type of mutual fund where there are no restrictions on the

amount of shares the fund will issue. If demand is high enough! the fund will continue to

issue shares no matter how many investors there are. *ost of the mutual funds available

in the mar$etplace are open)end funds. Apen)end funds are generally managed actively

and are priced according to their net asset value 5B0G.

#. Close Ended0 fund that has a fi,ed amount of shares outstanding! unli$e mutual funds

which are open)ended 5allow new shares to be purchased. losed)end funds behave

more li$e stoc$s because they trade on an e,change and the price is determined by

mar$et demand after an initial IA process. closed)end funds can trade below their net

asset value or above it.

C. Net Asset Value) The net asset value 5B0G of a mutual fund is simply its assets minusits liabilities. In other words! B0G e#uals the fundQs worth. %owever B0G listed here are

on per unit basis i.e. total B0G of mutual fund divided by the number of units issued.

D. Entry5E4it Load ) ntry load is the commission that an investor has to pay while

purchasing units of a mutual fund. This is a certain percentage that the mutual fund

charges to meet its e,penses. ertain funds have ,it 4oad which means a similar $ind of

commission but it?s charged when the investor e,its the scheme.

E. 'tandard deviation/ It tells us how much the return on the fund is deviating from the

e,pected normal returns.


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%. 0lpha Ratio/ It tells us how the mutual fund has beaten it inde,. If it is greater than "!

then we say it has a positive alpha. The greater the number! the greater the out)

performance.

G. :eta/ It tells us how the fund would respond to swings in the mar$et. If the beta is more

than 1! then the funds swings will be greater than the mar$et swings and vice versa.

&. 'harpe Ratio/ It tells us whether the returns of a portfolio are due to smart investment

decisions or due to e,cess ris$. This measurement is very useful because although one

mutual fund can give higher returns than its peers! it is only a good investment if the

higher returns do not come with too much additional ris$. The greater a portfolioQs 'harpe

ratio! the better is its ris$)ad;usted performance.

I. Treynor Ratio9It is similar to the 'harpe ratio. Instead of comparing the fundQs ris$)

ad;usted performance to the ris$)free return! it compares the fundQs ris$ ad;usted

performance of the relative inde,.

$. 4ar,e ca" *unds 9 Lar,e ca" *unds are t!ose mutual *unds:;!ic! loo< *or ca"ital

a""reciation by investin, "rimarily in stocs

1. =eneral arameters

a. Investment Ab;ective
http://www.investmentyogi.com/MutualFunds/default.aspxhttp://www.investmentyogi.com/MutualFunds/default.aspxhttp://www.investmentyogi.com/MutualFunds/default.aspx


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b. Ris$ and Return =rade

c. orpus

d. urrent B0G

e. ntry7,it 4oad

f. Top urrent %olding 5sectors and stoc$s and changes

g. Ather 'pecific information

. erformance based comparison

a. 0bsolute returns

b. erformance w.r.t. standard benchmar$

c. 'td dev and :eta

d. 'harpe ratio 5Ri)Rf 7 'td dev

e. B0G movement over past 3 years

.


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:uild your future/

To meet largest e,penses of your life li$emarriages! education or a house you need to startinvesting early. 'ave a small amount everymonth7#uarter and loo$ forward to a bright future.

Rela, and accumulate wealth/

-ith 'I you don?t re#uire investing a huge sumof money and start with an amount as little as Rs.("". Eou can accumulate wealth over long)term.

Reduce ris$/

&or efficient participation in this highly volatilemar$et! 'I helps you average out your cost bygenerating superior returns in the long run. Itreduces ris$ associated with lump suminvestments.

n;oy the ease/

'et yourself free from cumbersome paperwor$.ust identify the amount and scheme you wish toinvest in and then choose from options li$e 0uto8ebit7'. The amount will automatically getdebited on a date of your choice. Eou can alsogive monthly7#uarterly post)dated che#ues for theamount you wish to invest.

About 'ystematic Investment lan 0'I

&ollow a disciplined approach towards investing in UTI *& schemes.*a$e regular investments through 'ystematic Investment lanaccording to pre)opted schedules. To $now more about this time testedmechanism!


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#uild your investment at re,ular intervals

:y 'ystematic Investment lan you can invest apre)determined among of money in chosenschemes at the applicable B0G based 'ale rice

on each transaction date. ach transaction willfetch you additional units that will be added toyour investment account

'te" by ste": reac! out *or

your ,oals

) 'et your financial goals) Identify the scheme

) 8ecide the 'I amount

) 4oo$ for a long)term commitment/ Apt for bigger gains asthrough 'I returns increase with e,tended time hori+on.0imfor the big picture/ To

get the most out of themar$et fluctuations! startinvesting today. The sooneryou start! the earlier youreach your financial goals.

) 'tart investing

#ene*it *rom (TI 'I

Ru"ee cost avera,in,/ -ith UTI 'I you caninvest a uniform amount regularly and average outthe cost of ac#uisition of units. This average costper unit will determine your overall return on yourinvestments.


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+ont! Amount you

invest 0Rs.

'ale rice

1 7??? 1?

6 7??? 16

7 7??? 1?

@ 7???

B 7??? 1?

Total 1B???

0s evident from above table! when investedthrough 'I! the average purchase price wor$s outas low at 9.>36! compared to a lump suminvestment of Rs. 1".

ower of compounding/ :y e,tending yourinvestment period you can earn profit on your

profit! and accumulate more wealth. Theillustrated graph given below proves this fact.


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(TI +(T(AL %(ND 'C&E+E

(TI#an


26/33

(TIDividend )ield %undTy"e O* 'c!eme Apen)nded #uity Ariented 'cheme

Date O* Ince"tion 117"27""(

'c!eme Obective 0n open)ended e#uity scheme. It aims to provide medium to long term

capital gains and7or dividend distribution by investing predominantly in

e#uity and e#uity related instruments which offer high dividend yield.Asset Allocation %igh dividend yield e#uity and e#uity related instruments. Ather e#uity or

e#uity related instruments. 8ebt and money mar$et instruments. 6()1""


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(TIO""ortunities %und

Ty"e O* 'c!eme Apen nded #uity &und

Date O* Ince"tion 167"F7""(

'c!eme Obective This scheme see$s to generate capital appreciation and7or income

distribution by investing the funds of the scheme in e#uity shares and e#uity)

related instruments. The focus of the scheme is to capitalise on opportunities

arising in the mar$et by responding to the dynamically changing Indian

economy by moving its investments amongst different sectors as prevailing

trends change.Asset Allocation #uity 9"< to 1""

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Uti Mutual Fund Project