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A

PROJECT REPORT ON

“COMPARITIVE ANALYSIS OF TOP 100 MUTUAL FUND

&

OPPORTUNITIES FUND AT UTI MUTUAL FUND”

UTI ASSET MANAGEMENT COMPANY LIMITED

By

B.SRUJAN KUMAR

B618

Company Guide Faculty guide

Mr. Sudhir Hotkar, Mr. Lohithkumar

Senior Manager Assistant Professor

SIVA SIVANI INSTITUTE OF MANAGEMENT

Secunderabad

(2012-14)

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Acknowledgement

I would take this opportunity to express my sincere gratitude to all the persons for their

valuable assistance and continuous support during my project.

I am grateful to my faculty guide, Mr. Lohithkumar Asst. Professor, Finance, Siva Sivani

Institute of Management for his guidance and supporting me in doing the project. His inputs and

suggestions have played a crucial role at every stage of the project .His continuous guidance

throughout my project helped me to complete this project in a timely and systematic

manner.

I am grateful to Mr. Sudhir Hotkar, Senior Manager, (UTI Mutual Funds, Warangal branch) for

his guidance and support during preparation of the project. His inputs and suggestions have

played a crucial role at every stage in the preparation of the project.

Finally, I would like to thanks all the staff members at UTI AMC who provided their

valuable inputs throughout the duration of my project, which really helped in successful

completion of my project report.

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Declaration

I hereby declare that this project report titled “Comparative Analysis Of Top 100 Mutual

Fund & Opportunities Fund at UTI Mutual Funds” is an original work, done by me during

the academic year 2012-13 under the guidance of my faculty guide Mr. Lohithkumar, Assistant

professor of Siva Sivani Institute of Management and my company guide MR. Sudhir Hotkar

Senior Manager at UTI Asset Management company limited for the partial fulfillment of the

requirements for the award of the POST GRADUATE DIPLOMA IN MANAGEMENT

(BIFAAS).

Place: Secunderabad

Date: B.SRUJAN KUMAR

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Index

Chapter

Contents

Page. No

Chapter 1

Introduction

5-13

Chapter 2

Industry Profile

14-17

Chapter 3

Company Profile

18-27

Chapter 4

Research Methodology

28-31

Chapter 5

Data Analysis & Interpretation

32-47

Chapter 6

Findings & Suggestions

48-49

Chapter 7

Conclusion

50-52

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Chapter-1

Introduction

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Introduction:-

A mutual fund is a financial intermediary that allows a group of investors to pool their money

together with a predetermined investment objective. The mutual fund will have a fund manager

who is responsible for investing the gathered money into specific securities (stocks or bonds).

When investors invest in a mutual fund, they are buying units or portions of the mutual fund and

thus on investing becomes a unit holder of the fund.

Mutual funds are considered as one of the best available investments as compare to others they

are very cost efficient and also easy to invest in, thus by pooling money together in a mutual

fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to

do it on their own. But the biggest advantage to mutual funds is diversification, by minimizing

risk & maximizing returns.

Mutual funds are set up to buy many stocks. Beyond that, investors can diversify even more

by purchasing different kinds of stocks which helps to spreading out investors’ money across

different types of investments and hence, reduces risk tremendously up to certain extent.

It could take you weeks to buy all these investments, but if you purchased a few mutual funds

you could be done in a few hours because mutual funds automatically diversify in a

predetermined category of investments.

A Mutual is a pool of money, which is collected from many investors and is invested by an asset

management company to achieve some objective of the investors. Thus, a mutual fund is a

collective investment process. An Asset management Company(AMC) collects many investor

money. It invest this in various securities to generate return for the investor. Investor get returns

after deducting the related expenses. If there is any loss, it would be borne by the investors. An

Asset management company manages the pool of money; therefore, it is also an “indirect form of

investment” for investors.

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It is necessary that every pool of investor should have one common investment objective because

the investment objective decides where the investment is to be made. If the common objective is

to take risk for higher returns in medium to long term ,then investment will be made in equity. If

the objective is lower returns in medium to long term” then investment will be made in equity. If

the objective is lower return with safety of principal then investment is done in debt instrument.

The pool of money witch is contributed mutually by all investors are the benefits will be shared

mutually by all investor is the mutual fund. Thus a Mutual Fund is the most suitable investment

for the common man as it offers an opportunity to invest in a diversified, professionally managed

basket of securities at a relatively low cost.

POOL

OF

MONEY

100 CR

A

B

C

D

E

INVESTO

R A

INVEST

5000

INVESTOR

B INVEST

5000 INVESTOR

C INVEST

6000

INVESTOR

D INVEST

5000

INVESTOR

E INVEST

5000

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Mutual Fund Operation Chart

Distinguishing Characteristics Of Mutual Fund:

The traditional, distinguishing characteristics of the mutual fund may include the following:

1) Investors purchase mutual fund shares from the fund itself (or through a broker for the fund)

instead of from other investors on a secondary market

2) The price that investors pay for mutual fund shares is the fund's per share net asset value

(NAV) plus any shareholder fees that the fund imposes at the time of purchase (such as sales

loads).

3) Mutual fund shares are "redeemable," meaning investors can sell their shares back to the fund

(or to a broker acting for the fund).

4) Mutual funds generally create and sell new shares to accommodate new investors. In other

words, they sell their shares on a continuous basis, although some funds stop selling when,

for example, they become too large.

Investor

Securities

Returns Fund

manager

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5) The investment portfolios of mutual funds typically are managed by separate entities known

as "investment advisers" that are registered with the SEBI.

Importance of Mutual Fund:

Small investors face a lot of problems in the share market, limited resources, lack of professional

advice, lack of information etc. Mutual funds have come as a much needed help to these

investors. It is a special type of institutional device or an investment vehicle through which the

investors pool their savings which are to be invested under the guidance of a team of experts in

wide variety of portfolios of Corporate securities in such a way, so as to minimize risk, while

ensuring safety and steady return on investment. It forms an important part of the capital market,

providing the benefits of a diversified portfolio and expert fund management to a large number,

particularly small investors. Now a days, mutual fund is gaining its popularity due to the

following reasons :

With the emphasis on increase in domestic savings and improvement in deployment of

investment through markets, the need and scope for mutual fund operation has increased

tremendously. The basic purpose of reforms in the financial sector was to enhance the

generation of domestic resources by reducing the dependence on outside funds. This calls

for a market based institution which can tap the vast potential of domestic savings and

canalize them for profitable investments. Mutual funds are not only best suited for the

purpose but also capable of meeting this challenge.

An ordinary investor who applies for share in a public issue of any company is not

assured of any firm allotment. But mutual funds who subscribe to the capital issue made

by companies get firm allotment of shares. Mutual fund latter sell these shares in the

same market and to the Promoters of the company at a much higher price. Hence, mutual

fund creates the investors confidence.

The mindset of the typical Indian investor has been summed up by Mr.S.A. Dave,

Chairman of UTI, in three words; Yield, Liquidity and Security. The mutual funds, being

set up in the public sector, have given the impression of being as safe a conduit for

investment as bank deposits. Besides, the assured returns promised by them have

investors had great appeal for the typical Indian investor.

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As mutual funds are managed by professionals, they are considered to have a better

knowledge of market behaviors. Besides, they bring a certain competence to their job.

They also maximize gains by proper selection and timing of investment.

Another important thing is that the dividends and capital gains are reinvested

automatically in mutual funds and hence are not fritted away. The automatic reinvestment

feature of a mutual fund is a form of forced saving and can make a big difference in the

long run.

The mutual fund operation provides a reasonable protection to investors. Besides,

presently all Schemes of mutual funds provide tax relief under Section 80 L of the

Income Tax Act and in addition, some schemes provide tax relief under Section 88 of the

Income Tax Act lead to the growth of importance of mutual fund in the minds of the

investors.

As mutual funds creates awareness among urban and rural middle class people about the

benefits of investment in capital market, through profitable and safe avenues, mutual fund

could be able to make up a large amount of the surplus funds available with these people.

The mutual fund attracts foreign capital flow in the country and secure profitable

investment avenues abroad for domestic savings through the opening of off shore funds

in various foreign investors.

Advantages

It’s important to remember that features that matter to one investor may not be important for

others. Whether any particular feature is an advantage for you will depend on your unique

circumstances. For some investors, mutual funds provide an attractive investment choice because

they generally offer the following features:

1) Professional Management—Professional money managers research, select, and monitor the

performance of the securities the fund purchases.

2) Diversification—Diversification is an investing strategy that can be neatly summed up as

“Don’t put all your eggs in one basket.” Spreading your investments across a wide range of

companies and industry sectors can help lower your risk if a company or sector fails. Some

investors find it easier to achieve diversification through ownership of mutual funds rather than

through ownership of individual stocks or bonds.

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3) Affordability—Some mutual funds accommodate investors who don’t have a lot of money to

invest by setting relatively low dollar amounts for initial purchases, subsequent monthly

purchases, or both.

4) Liquidity—Mutual fund investors can readily redeem their shares at the cur-rent NAV—plus

any fees and charges assessed on redemption—at any time.

Disadvantages:-

But mutual funds also have features that some investors might view as disadvantages, such as:

Costs despite Negative Returns—Investors must pay sales charges, annual fees, and

other expenses regardless of how the fund performs. And, depending on the timing of

their investment, investors may also have to pay taxes on any capital gains distribution

they receive—even if the fund went on to perform poorly after they bought shares

Lack of Control—Investors typically cannot ascertain the exact make-up of a fund’s

portfolio at any given time, nor can they directly influence which securities the fund

manager buys and sells or the timing of those trades.

Price Uncertainty—with an individual stock, you can obtain real-time (or close to real-

time) pricing information with relative ease by checking financial websites or by calling

your broker. You can also monitor how a stock’s price changes from hour to hour—or

even second to second. By contrast, with a mutual fund, the price at which you purchase

or redeem shares will typically depend on the fund’s NAV, which the fund might not

calculate until many hours after you’ve placed your order. In general, mutual funds must

calculate their NAV at least once every business day.

Types Of Mutual Fund Schemes :

The objectives of mutual funds are to provide continuous liquidity and higher yields with high

degree of safety to investors. Based on these objectives, different types of mutual fund schemes

have evolved.

1)Functional

Open-Ended Event

Close-Ended Scheme

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Functional Classification of Mutual Funds

1) Open-ended schemes: In case of open-ended schemes, the mutual fund continuously offers to

sell and repurchase its units at net asset value (NAV) or NAV-related prices. Unlike close-ended

schemes, open-ended ones do not have to be listed on the stock exchange and can also offer

repurchase soon after allotment. Investors can enter and exit the scheme any time during the life

of the fund. Open-ended schemes do not have a fixed corpus. The corpus fund increases or

decreases, depending on the purchase or redemption of units by investors. There is no fixed

redemption period in open-ended schemes, which can be terminated whenever the need arises.

The fund offers a redemption price at which the holder can sell units to the fund and exit.

Besides, an investor can enter the fund again by buying units from the fund at its offer price.

Such funds announce sale and repurchase prices from time-to-time. UTI’s US-64 scheme is an

example of such a fund. The key feature of open-ended funds is liquidity. They increase liquidity

of the investors as the units can be continuously bought and sold. The investors can develop their

income or saving plan due to free entry and exit frame of funds. Open-ended schemes usually

come as a family of schemes which enable the investors to switch over from one scheme to

another of same family.

2) Close-ended schemes: Close-ended schemes have a fixed corpus and a stipulated maturity

period ranging between 2 to 5 years. Investors can invest in the scheme when it is launched. The

scheme remains open for a period not exceeding 45 days. Investors in close-ended schemes can

buy units only from the market, once initial subscriptions are over and thereafter the units are

listed on the stock exchanges where they are bought and sold. The fund has no interaction with

investors till redemption except for paying dividend/bonus. In order to provide an alternate exit

route to the investors, some close-ended funds give an option of selling back the units to the

mutual fund through periodic repurchase at NAV related prices. If an investor sells units directly

to the fund, he cannot enter the fund again, as units bought back by the fund cannot be reissued.

The close-ended scheme can be converted into an open-ended one. The units can be rolled over

by the passing of a resolution by a majority of the unit--holders.

3) Interval scheme: Interval scheme combines the features of open-ended and close-ended

schemes. They are open for sale or redemption during predetermined intervals at NAV related

prices.

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Portfolio Classification:-

Here, classification is on the basis of nature and types of securities and objective of investment.

1) Income funds: The aim of income funds is to provide safety of investments and regular

income to investors. Such schemes invest predominantly in income-bearing instruments like

bonds, debentures, government securities, and commercial paper. The return as well as the risk is

lower in income funds as compared to growth funds.

2) Growth funds: The main objective of growth funds is capital appreciation over the medium-

to-long- term. They invest most of the corpus in equity shares with significant growth potential

and they offer higher return to investors in the long-term. They assume the risks associated with

equity investments. There is no guarantee or assurance of returns. These schemes are usually

close-ended and listed on stock exchanges.

3) Balanced funds: The aim of balanced scheme is to provide both capital appreciation and

regular income. They divide their investment between equity shares and fixed nice bearing

instruments in such a proportion that, the portfolio is balanced. The portfolio of such funds

usually comprises of companies with good profit and dividend track records. Their exposure to

risk is moderate and they offer a reasonable rate of return.

4) Money market mutual funds: They specialize in investing in short-term money market

instruments like treasury bills, and certificate of deposits. The objective of such funds is high

liquidity with low rate of return.

Asset Management Company (AMC):-

AMC is involved in the daily administration and also acts as investment advisor for the fund. A

sponsor promotes an asset management company, which usually is a reputed corporate entity

with sound record of profits. An AMC typically has three departments

Fund Management

Sales & Marketing

Operations & Accounting

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Chapter-2

Industry Profile

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History of the Indian Mutual Fund 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 and started its operations in 1964 with

the issue of units under the scheme US-64. The history of mutual funds in India can be broadly

divided into four distinct phases: -

First Phase- 1964-87:-

Unit Trust of India (UTI) was established on 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

LTI 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

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.

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The second is the UTI Mutual Fund Ltd, 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. As at the end of

October 31, 2003, there were 31 funds, which manage assets of Rs. 126726 crores under 386

schemes.

The graph indicates the growth of assets over the years

Erstwhile UTI was bifurcated into UTI Mutual Fund and the Specified Undertaking of the Unit

Trust of India effective from February 2003. The Assets under management of the Specified

Undertaking of the Unit Trust of India has therefore been excluded from the total assets of the

industry as a whole from February 2003 onwards.

MUTUAL FUND COMPANIES IN INDIA

1. Joint Ventures –predominantly Indians

a. SBI Funds Management Private Ltd.

b. Birla Sun Life Asset Management Co Ltd.

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c. DSP Black Rock Fund Management Ltd.

d. HDFC Asset Management Co

e. Prudential ICICI Asset Management Co.Ltd

f. Benchmark Asset Management Co Private. Ltd

g. Cholamandalam Asset Management Co.Ltd

h. Credit Capital Asset Management CO.Ltd

i. Kotak Mahindra Asset Management Co. Ltd

j. Reliance Capital Asset Management Ltd

k. Tata Asset Management Ltd

2. Others

a. BOB Asset Management Co. Ltd.

b. Canbank investment Management Services Ltd.

c. UTI Asset Management Co Private Ltd.

3. Institutions

a. Jeevan Bima Sahayog Asset Management Co Ltd.

4. Joint Ventures –Predominantly Foreign :

a. ABN AMRO Asset Management (India)Ltd

b. Deutsche Asset Management (India) Private Ltd

c. Fidelity Fund Management Private Ltd

d. Franklin Templeton Asset Management (India) Private Ltd

e. HSBC Asset Management (India) private Ltd

f. ING Investment Management private Ltd

g. Morgan Stanley Investment Management private Ltd

h. Standard Chartered Asset Management Co private .Ltd

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Chapter-3

Company Profile

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UTI Asset Management Co. (P) Ltd

UTI Mutual Fund:-

UTI AMC is a company incorporated under companies act 1956.In UTI AMC the investment

agreement is executed between UTI Trustee company Ltd and UTI AMC on December 9 2002

UTI AMC was registered by SEBI to act as Asset Management Company for UTI Mutual Fund

vide its letter of January 2003.

The paid up capital of UTI AMC has been subscribed equally by four sponsors: State Bank of

India, Life Insurance Corporation of India, Bank of Baroda and Punjab National Bank.

UTIAMC, apart from managing the schemes of UTI Mutual Fund, also manages the schemes

transferred/migrated from the erstwhile Unit Trust of India, in accordance with the provisions of

the Investment Management Agreement, the Trust Deed, and the SEBI (Mutual Funds)

Regulations.

History:-

Unit Trust of India (UTI) was established on 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 crore of assets under management. Despite being the

trendsetter in the segment, the UTI mutual fund could not sustain the initial tempo and was on

the verge of a collapse in 2001, before the government bailed it

The fund's sponsors are public sector financial giants like Life Insurance Corporation, SBI, Bank

of Baroda and Punjab National Bank. The sponsors hold equal stakes in the asset management

company, UTI Asset Management Company Private Limited. UTI Mutual Fund remains the

largest fund in the country with assets of over Rs.35, 028 crore under management.

UTI was divided into two parts, UTI Mutual Fund (UTI MF) and a specified undertaking of UTI

or UTI-I. UTI MF was brought under SEBI regulations while UTI-I was kept under direct

government control since its schemes offered guaranteed returns.

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The three strong pillars of UTI MF are:-

1. Fund Management

2. Investor Services

3. Large Distribution Reach

Vision:-

To be the most Preferred Mutual Fund.

Mission:-

Our mission is to make UTI Mutual Fund:

The most trusted brand, admired by all stakeholders

The largest and most efficient money manager with global presence

The best in class customer service provider

The most preferred employer

The most innovative and best wealth creator

A socially responsible organization known for best corporate governance

Fund Management

UTI MF has a highly qualified and professional Management Team to care of the unit holder’s

investments. An equally strong in-house research department to support the fund Management

team in their decision making process. UTI MF has the distinction of being the only mutual fund

in India with a full macroeconomic research cell. The integration of world-class practices in day-

to-day working and up gradation thereof on a continuous base allows UTI MF to meet the

challenges existing and emerging and maintain its leadership position. Some of the notable

practices are:

Higher empowerment the Fund Manager for greater efficiency and accountability.

Creation of a Risk Management Department to ensure better management of risks

associated with fund management so as to eliminate future NAV’s.

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Vigorous and regular investment monitoring to enable better health of the future

employed and step-up/ensure recovery of existing NPA’s.

Benchmarking of the fund with suitable and well-accepted indices to ensure objective

assessment of the fund’s performance.

Greater transparency by monthly disclosure of portfolios daily NAVs and well

documented monthly fact sheet to provide complete information on scheme

performance.

Reduced sales and repurchase load for various schemes thereby enhancing the returns for

the investors.

With several of UTI MF’s schemes attaining critical size the expense ratios have been

brought down for the benefit of investors.

In-house Equity and Debt research capabilities

UTI MF is the only mutual fund in India to have a 12 member strong research team to track,

research and evaluate macroeconomic indicators, capital markets, financial sector and mutual

fund. The In-house research team has gained expertise in research of equities as well as debt.

Portfolio Management Services

UTI AMC has started a new division to offer wealth management solutions to its clients. The

division, operating under the brand name of Axel, shall offer the entire suit of wealth

management solutions to private clients like HNI’s, trusts, corporates and NRI’s etc. to begin

with Axel shall offering discretionary portfolio management services to these clients under the

following 2 schemes.

1. Axel FF: under this scheme, a fixed management fee of upon 2.50% per annum of the

NAV of the client’s portfolio shall be charged. Additional applicable taxes shall be

charged on the amount of fee.

2. Axel VF: under this scheme, management fees shall be charged as combination of fixed

and variable basis. Fixed fees shall be up to 1.50% per annum of the NAV of the client’s

portfolio and variable fees shall be up to 10% of the positive annual portfolio returns.

Additional applicable taxes shall be charged on the amount of fees.

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New Initiatives Of Uti Mf

UTI MF has approached Government of India to seek approval from Pension Regulation and

Development Authority of India for offering pension products and through its subsidiary

UTITSL (UTI Technology Services Ltd) it has applied for becoming centralized record keeping

Agency (CRA) for all Indian pensioners.

Diverse Investor Base:

Nearly 65% of the investor’s accounts of the Indian MF industry is with UTI MF which

endorses the fact that the country’s largest MF enjoys tremendous investors “trust &

Confidence”.

UTI MF is proud to be associated with various esteemed companies/organization as our

investors. These investors are the largest Banks of the country, co-operative banks, largest

software companies, largest MNC’s, charitable &religious trusts, provident funds, army &

defense forces, stock exchange, port trusts, trade association and leading lights of the society

in additional to most of the common people.

Almost each of the top 1500 investors/savers of the Indian economy have investment in one

of the funds of UTI Mutual Funds.

Largest Mutual Fund Houses in India with total assets of Rs30000 crores and more under

management.

Able Fund Management team, with a well-diversified portfolio under all Schemes.

53 demotic schemes and 4 offshore schemes to clear to the whole gamut of your investment

needs.

The fund house with the largest number of retail investors. More than 6 million investors

have invested in various funds.

Distribution network of 63 financial centers ,343 chief

Representative/chief agents and over 18,000 AMFI certified financial advisors.

Nation –wide network of satellite connecting all UFC’s and branches.

Central processing center for attaining better service standard at lower cost.

Currently UTI AMC has four offshore funds namely

1. India Fund

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2. Indian IT Fund

3. Indian Infrastructure Fund

4. Indian Pharma Fund

ORGANISATION STRUCTURE OF A MUTUAL FUND INDUSTRY

KEY POINTS

Mutual funds in India have a 3-tier structure of Sponsor-Trustee-AMC

Sponsor creates the AMC and the trustee company appoints the boards of both these

companies with SEBI approval

Sponsor is the promoter of the fund.

The Mutual fund is formed as a trust in India and not as a company.

The sponsor contributes the AMCs capital.

Investor’s money is held in the Trust (mutual fund). The AMC gets a fee for managing

the funds, according to the mandate of the investors.

The trustees make sure that the funds are managed according to the investor’s mandate.

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Sponsor should have at least a 5-year track record in the financial services business and

should have made profit at least 3 out of the 5 years.

Trustees are appointed by the sponsor with SEBI approval.

Sponsors of the UTI AMC:-

State Bank of India

Life Insurance Corporation of India

Bank of Baroda

Punjab National Bank

Custodians:-

Stock Holding Corporation of India Ltd

Registrars and Transfer Agents:-

1. UTI Technology services Ltd

2. Computer Age Management services pvt .Ltd

3. Datamatics Financial Software & Services Ltd

4. Karvy Computer Shares Pvt .Ltd

LIST OF MUTUAL FUNDS OF UTI

EQUITY FUNDS CATEGORY:

Diversified Funds:

UTI MASTER SHARE UNIT SCHEME

UTI MASTER PLUS UNIT SCHEME

UTI EQUITY FUND

UTI CONTRA FUND

UTI WEALTH BUILDER FUND

UTI TOP 100 FUND

Specialty/ Theme Based Funds:

UTI MNC FUND

UTI MASTER VALUE FUND

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UTI SERVICE INDUSTRIES FUND

UTI INFRASTRUCTURE FUND

UTI MIDCAP FUND

UTI DIVIDEND YIELD FUND

UTI OPPORTUNITIES FUND

UTI LEADERSHIP EQUITY FUND

UTI INDIA LIFESTYLE FUND

UTI WEALTH BUILDER FUND SER.- 2

Sector Funds:

UTI PHARMA & HEALTHCARE FUND

UTI BANKING SECTOR FUND

UTI ENERGY FUND

UTI TRANSPORTATION & LOGISTICS FUND

Tax Planning Funds:

UTI EQUITY TAX SAVING PLAN

UTI MEPLUS

UTI LONGTERM ADVANTAGE FUND- SER. 1

UTI LONGTERM ADVANTAGE FUND- SER. 2

Arbitrage Fund:

UTI SPREAD FUND

INDEX FUNDS CATEGORY

Pure Index Funds:

UTI MASTER INDEX FUND

UTI NIFTY INDEX FUND

Exchange Index Fund:

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UTI SUNDER

BALANCED FUNDS CTAEGORY:

Pure Balanced Funds:

UTI BALANCED FUND

Segment Focused Funds:

UTI UNIT LINKED INSURANCE PLAN

UTI CHARITABLE & RELIGIOUS TRUST & REISTERED SOCEITY

UTI CHILDREN’S CAREER BALANCED PLAN

UTI RETIRMENT BENEFIT PENSION FUND

UTI MAHILA UNIT SCHEME

UTI CCP ADVANTAGE FUND

Monthly Income Schemes:

UTI MONTHLY INCOME SCHEME

UTI MIS ADVANTAGE

INCOME FUNDS CTAEGORY:

Segment Focused Funds:

UTI BOND FUND

UTI TREASURY ADVANTAGE FUND

UTI G-SEC FUND-INVESTMENT PLAN

UTI GILT ADVANTAGE FUND- LTP

UTI SHORT TERM INCOME FUND

UTI FLOATING RATE FUND

UTI G-SEC FUND- SHORT TERM PLAN

UTI DYNAMIC BOND FUND

LIQUID FUNDS CATEGORY:

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UTI MONEY MARKET FUND

UTI LIQUID FUND-CASH PLAN

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Chapter-4

Research Methodology

- 29 -

Scope of the Study:

The scope of the study is about the analyzing the performance of different mutual fund schemes to suggest measures to overcome underperformance of funds.

Objectives of the Study:

To study the performance of the selected mutual funds and comparing with the UTI Mutual Funds.

To offer the suggestions for investors to choose best schemes

The need of the study aimed to know the awareness in the public about the various

products and services provided by UTI-MF.

A study was also conducted to measure the performance of various funds on the basis of

various performance measuring ratios such as sharp ration, total expense ratio, standard

deviation, Beta

The study was basically undertaken to understand the financial needs of the customers

and to provide or suggest them products and services according their financial products.

Methodology

For the first part of analysis i.e. fund returns, I have taken five top funds of same category

of different fund houses and compared their returns 5 years.

For the second part of analysis i.e. risk profile, I have compared these five funds with

respect to their standard deviation, Sharpe ratio, beta, alpha and r- squared.

The comparison of the funds is done using the bar charts and thus arriving at a conclusion

after analyzing those charts.

Data Collection:

The data, which is collected for the purpose of study, is divided into 2 bases:

Primary Data:

In dealing with real life problem it is often found that data at hand are

inadequate, and hence, it becomes necessary to collect data that is appropriate. There

are several ways of collecting the appropriate data which differ considerably in context of

money costs, time and other resources at the disposal of the researcher.

Primary data can be collected either through experiment or through survey.

The data collection for this study was done in the following manner:

Secondary Data:

The data has been collected from their officially website and AMFI and other sources

- 30 -

Limitations:

The study is limited to equity diversified growth scheme

Only 5 growth orient mutual funds are compared and analyzed

performance cannot be judged by the performance of the particular scheme

Period of the study is 45days

Extreme variability in MARKET

Unawareness among investors is next in the line. The investor does not want to invest in

Mutual Funds because of the myth that investment in these funds lead to insensitive

returns. They think that market is highly volatile and will not be able to give him the

secured returns.

The investor also does not want to invest because of the greater r isk attached with

equity. Rather, he wants to invest in a fixed instrument from where he may be able to get

secured returns instead of having unasserted returns.

Review of Literature:

“Comparative analysis of mutual funds” by L. Rajarajeswari examines each investment alternative has its own strengths and weaknesses. Some options seek to achieve superior returns

(like equity), but with corresponding higher risk. Other provide safety (like PPF) but at the expense of liquidity and growth. Other options such as FDs offer safety and liquidity, but at the cost of return. Mutual funds seek to combine the advantages of investing in arch of these

alternatives while dispensing with the shortcomings. Indian stock market is semi-efficient by nature and, is considered as one of the most respected

stock markets, where information is quickly and widely disseminated, thereby allowing each security's price to adjust rapidly in an unbiased manner to new information so that, it reflects the

nearest investment value. And mainly after the introduction of electronic trading system, the information flow has become much faster. But sometimes, in developing countries like India, sentiments play major role in price movements, or say, fluctuations, where investors find it

difficult to predict the future with certainty. Some of the events affect economy as a whole, while some events are sector specific. Even in one particular sector, some companies or major market

player are more sensitive to the event. So, the new investors taking exposure in the market should be well aware about the maximum potential loss, i.e. Value at risk.

It would be good to diversify one's portfolio to include equity mutual funds and stocks. The benefit of diversification are that while risk exposure from a particular asset may not be very

high, it would also give the opportunity of participating in the party in the equity markets- which may have just begun- in a relatively safe manner(than investing directly into stock markets). Mutual funds are one of the best options for investors to choose from. It must be realized that the

performance of different funds varies time to time. Evaluation of a fund performance is meaningful when a fund has access to an array of investment products in market. An investor can

choose from a variety of funds to suit his risk tolerance, investment horizon and objective. Direct

- 31 -

investment in equity offers capital growth but at high risk and without the benefit of diversification by professional management offered by mutual funds.

- 32 -

Chapter-5

Data Analysis

&

Interpretation

- 33 -

Analysis

UTI Mutual fund

Years UTI returns

2013 6.74305

2012 0.001001

2011 -0.000671

2010 0.000413

2009 0.001500

Findings:

The returns of UTI Mutual Funds in the year 2008 is high (0.0015) when compared to 2013 the returns were 0.746 In the year 2011 the returns were negative (0.0005)

-0.001

-0.0005

0

0.0005

0.001

0.0015

0.002

2008 2009 2010 2011 2012 2013 2014

UTI Mutual fund returns

returns

- 34 -

DSP Black Rock Mutual fund

Year DSP Blackrock returns

2013 -0.000626

2012 0.001093

2011 0.000700

2010 0.000625

2009 0.002383

2008 -0.010662

2007 2.980209

Findings:

The returns of DSP Balck Rock in the year 2008is in negetive(-0.010115)when compared to

2013 the returns were -0.001.Whereas It has profits in the year 2009-2012 as comapring 2007-

08.

-0.01200000

-0.01000000

-0.00800000

-0.00600000

-0.00400000

-0.00200000

0.00000000

0.00200000

0.00400000

2013 2012 2011 2010 2009 2008 2007

DSP Blackrock Mutual fund returns

DSP Blackrock returns

- 35 -

LIC Nomura Mutual fund

year Returns

2013 -0.066514

2012 0.091264

2011 -0.013082

2010 0.00555

2009 0.003935

2008 -0.056544

2007 2.980230

`

Findings :

The returns of LIC Nomura Mutual Funds were more fluctuating year by year i.e., in 2007-08

returns are (- 0.00375).In year 2009-10 the returns has raised to 0.0025 and again in 2011 it

falled drastically to (-0.0015).In year 2013 the returns are (-0.0005)

-0.004

-0.003

-0.002

-0.001

0

0.001

0.002

0.003

2006 2007 2008 2009 2010 2011 2012 2013 2014

LIC Nomura Mutual fund returns

returns

- 36 -

Edelweiss Top 100 Fund

Year Returns of Edelweiss top 100 funds

2013 -0.020698

2012 0.087886

2011 -0.083542

2010 0.092521

2009 2.902309

Findings:

The returns of Edelweiss Mutual Funds were high in the year 2009-10 but during the year 2013

the company’s returns were (-0.0001)

-0.001

-0.0008

-0.0006

-0.0004

-0.0002

0

0.0002

0.0004

0.0006

0.0008

2013 2012 2011 2010 2009

Edelweiss Top 100 fund returns

returns of edelweiss top

100 funds

- 37 -

Birla Sun Life Mutual Fund

Years Returns of Birla Mutual funds

2013 -0.00104

2012 0.00128

2011 -0.00146

2010 0.00049

2009 0.00264

2008 2.98023

`

Findings:

The returns of Birla Sunlife Mutual Funds in the year 2008 were positive when compared to

2013 the returns were (-0.001).

-0.002

-0.0015

-0.001

-0.0005

0

0.0005

0.001

0.0015

0.002

0.0025

0.003

2013 2012 2011 2010 2009 2008

Birla Mutual fund returns

returns of Birla Mutual funds

- 38 -

Comparison of UTI top 100 equity growth fund with other mutual fund companies

years UTI Mutual

Fund

DSP BR

Mutual Fund

LIC Nomura

Mutual Fund

EDELWEISS

Mutual Fund

BIRLA

SUNLIFE Mutual Fund

2013 6.74305 -0.000626259 -0.000665138 -0.02069 -0.001049961

2012 0.001001929 0.001093667 0.000921264 -0.020698 -0.001049961

2011 -0.000671377 0.000700226 -0.001309824 -0.020698 -0.001049961

2010 0.000413553 0.000625293 0.00054455 -0.095437 -0.001049961

2009 0.001500033 0.002383465 0.00213935 -0.3206982 -0.001049961

Finding:

After analysis of the given 5 companies (i.e. 2009-13) DSP Blackrock is performing well when compared to UTI Mutual Funds and other companies.

-0.006 -0.004 -0.002 0 0.002 0.004 0.006

UTI Mutual Funds

DSP BR Mutual Fund

LIC Nomura Mutual Fund

EDELWEISS Mutual Fund

BIRLA SUNLIFE Mutual Fund 2013

2012

2011

2010

2009

Returns Of Different Mutual Fund Company schemes

- 39 -

Risk Adjusted Performance Measures

Risk Adjusted

Performance Measure

UTI Mutual

Fund

DSP BR

Mutual Fund

LIC Nomura

Mutual Fund

Edelweiss

Mutual Fund

Birla Sunlife

Mutual Fund

Jensen ratio 0.000351705 0.000228 -0.00029 0.019916 -0.02717

Trenor's ratio 26.371 14.4119 11.3738 50.6896 36.0399

Sharpe ratio 21.372176 14.411 11.3738 20.7547 36.0399

Findings:

In Edelweiss company the Trenor’s ratio is more when compared to all other funds 50(it is high

than all other funds). For Birla, DSP and LIC the trenor’s and Sharpe ratio is equal i.e.,45, 25 and

10 respectively. In UTI the Trenor’s ratio is more than Sharpe i.e., 35.

-10

0

10

20

30

40

50

60

UTI Mutual

Fund

DSP BR Mutual

fund

LIC Nomura

Mutual Fund

Edelweiss

Mutual Fund

Birla Mutual

Funds

Jensen

Trenor's ratio

Sharpe ratio

- 40 -

Risk profile

Findings:

Edelweiss company has greater standard deviation when compared to other companies i.e.,

0.45.Beta is high in LIC whereas for DSP & Edelweiss were negative(less than 0.05).

-0.1

0

0.1

0.2

0.3

0.4

0.5

UTI Mutual

Fund

DSP BR

Mutual fund

LIC Nomura

Mutual Fund

Edelweiss

Mutual Fund

Birla Mutual

Funds

SD

Beta

Risk UTI Mutual Fund

DSP BR Mutual fund

LIC Nomura Mutual fund

Edelweiss Mutual Fund

Birla Sun Life Mutual Fund

SD 0.046231 0.09333 0.02854 0.47601 0.0316

Beta 0.037467 -0.06855 0.086869 -0.01949 0.027414

- 41 -

UTI Opportunities Fund

Year Returns of UTI Opportunities fund

2013 0.0002418

2012 -0.0004258

2011 0.0002345

2010 -0.0002997

2009 -0.0011977

2008 0.0014945

Findings:

The returns of UTI Opportunittes Fund in the year 2009 were (-0.0012) when compared to 2013

the returns are positive i.e., 0.0001.

-0.0015

-0.001

-0.0005

0

0.0005

0.001

0.0015

0.002

2007 2008 2009 2010 2011 2012 2013 2014

UTI Opportunities Fund returns

Returns of Opportunities

fund

- 42 -

HSBC Opportunities Fund

Year Returns of HSBC Opportunities fund

2007 0.00106

2008 -0.00177

2009 0.00100

2010 0.00031

2011 -0.00058

2012 0.00051

2013 -0.00059

Findings:

The returns of HSBC Opportunities Funds were negative in the year 2013(-0.0007). In 2008 the

returns were very low i.e.,(0.00155)

-0.002

-0.0015

-0.001

-0.0005

0

0.0005

0.001

0.0015

2006 2007 2008 2009 2010 2011 2012 2013 2014

HSBC Opportunities fund returns

returns of Opportunities

fund

- 43 -

Franklin mutual fund

year Returns of Opportunities fund

2013 0.00044

2012 -0.00040

2011 0.00044

2010 -0.00022

2009 -0.00088

Findings:

The returns of Franklin Mutual Funds in the year 2009 were (-0.0009) when compared to 2013

the returns were 0.0004. In 2011 and 2013 the returns were high.

-0.001

-0.0008

-0.0006

-0.0004

-0.0002

0

0.0002

0.0004

0.0006

2008 2009 2010 2011 2012 2013 2014

Franklin Opportunities Fund returns

returns of Opportunities

fund

- 44 -

Mirae Mutual Fund

Findings:

The returns of Mirae Mutual Funds were positive in all the years from 2008 to 2013 i.e., 0.998 to

0.99. In 2008-10 the company has high returns

-0.0015

-0.001

-0.0005

0

0.0005

0.001

0.0015

2007 2008 2009 2010 2011 2012 2013 2014

Mirae India Opportunities fund returns

year Returns Opportunities fund

2013 8.63076

2012 -0.000509

2011 0.000239

2010 -0.000367

2009 -0.001331

2008 0.000964

- 45 -

Comparison of UTI Opportunities growth fund with other mutual fund companies

Year UTI Mutual Fund HSBC Mutual Fund FRANKLIN

Mutual Fund

MIRAE Mutual

Fund

2008 0.001494463 -0.001773453 0.0014637 0.000964385

2009 -0.001197687 0.001002012 -0.000883968 -0.00133128

2010 -0.000299652 0.000318627 -0.00022562 -0.000367204

2011 0.000234533 -0.000584406 0.000443507 0.000239484

2012 -0.000425803 0.000517448 -0.000404424 -0.000509193

2013 0.000241838 -0.000597976 0.000444592 8.63076E-05

Findings:

UTI Mutual Fund returns were high in the year 2008(i.e.0.0015) when compared to other

companies. But in the year 2013 Franklin returns are higher than UTI Mutual Funds. The returns of HSBC were fluctuating in all the years.

-0.002 -0.001 0 0.001 0.002

2008

2009

2010

2011

2012

2013

MIRAE Mutual Fund

FRANKLIN Mutual Fund

HSBC Mutual Fund

UTI Mutual Fund

- 46 -

Risk Adjustment Measures

Risk Adjustment Measure

UTI Mutual Fund

HSBC Mutual Fund

FRANKLIN Mutual Fund

MIRAE Mutual Fund

Jenson -0.02155 -3.42969 -0.01746 -0.019042

Trenors 5.1131 -6.89433 7.8926 26.9798

Sharp ratio 12.43033 12.18074 7.8956 14.9219

Findings:

Trenors ratio is high for MIRAE mutual fund when compared to all the companies i.e., (26.9798)

whereas HSBC mutual fund is performing negative(-6.894). Sharp ratio is also high in MIRAE

mutual fund i.e.,14.9219. For all the companies Jenson ratio is negative (HSBC mutual fund is

not performing well when compared to other companies).

-10

0

10

20

30

40

50

UTI Mutual

Fund

HSBC Mutual

Fund

FRANKLIN

Mutual Fund

MIRAE

Mutual Fund

Sharp ratio

Trenors

Jenson

- 47 -

Risk Profile

Risk UTI Mutual Fund

HSBC Mutual Fund

FRANKLIN Mutual Fund

MIRAE Mutual Fund

SD 0.94847 0.11118 -0.000125183 0.021267

Beta 0.323219 0.147766 0.006966632 0.662065

Findings:

Standard deviation is negative for FRANKLIN mutual fund (i.e.,-0.000125183). Beta is high for

HSBC mutual fund (i.e.,0.11118) whereas for other companies they were very low.

-0.02

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

UTI Mutual

Fund

HSBC Mutual

Fund

FRANKLIN

Mutual Fund

MIRAE Mutual

Fund

Beta

SD

- 48 -

Chapter-6

Findings & Suggestions

- 49 -

FINDINGS OF THE STUDY:

Findings:

The investors give more preference to regular income funds beside the consideration of

Diversified equity

Opportunities funds

And the major finding is that I have compared UTI with other mutual fund companies

and I came to know that Edelweiss Mutual Fund was performing better than other funds.

While dealing with them I have observed that the performance of the Edelweiss Mutual

Fund schemes is quite good and the demand for those schemes is also good. I came to

know that UTI top 100 equity is the most popular fund among individual investors.

According to them the 3yr and 5yr returns of the funds are very good. One of the reason

for great demands of AMCs fund is the Brand Value of UTI, as it is the largest AMC of

country

In Edelweiss company the Trenor’s ratio is more when compared to all other funds

Edelweiss company has greater standard deviation when compared to other companies

Suggestions:

The Asset Management Company must design the portfolio in such a way, to increase the

returns.

Take the beta ratios of various funds and suggest wither the fund is volatile or not

Use treynor’s ratio and tell wither the fund of the company is giving returns justifying the

market risk to which all the similar funds are subject to.

While investing into mutual funds the investor need to pick up a fund which performance

better to get better returns

The Asset Management Company must dedicate itself to a more professional

management of the Fund because it motivates the investors and potential investors to

invest in Mutual Funds.

The Asset Management Company must make sure that the Net Asset Value (NAV) of the

fund remains considerably high because it is the most important factor that would be

checked by the investors before investing in Mutual Funds.

The Asset Management Company must organize itself professionally and manage the

Fund efficiently and with dedication to earn the goodwill of the public

The Asset Management Company must make sure that the Net Asset Value (NAV) of the

fund remains considerably high because it is the most important factor that would be

checked by the investors before investing in Mutual Funds.

- 50 -

Chapter-7

Conclusion

- 51 -

Conclusion:-

The future of primary market is growing at a very high pace. Taking this thing into

consideration, there are lots of opportunities for the UTI Asset management Pvt Ltd to tap the

golden opportunities from the Indian market.

UTI Asset Management Pvt Ltd has emerged a very strong player in the field of distribution of

financial product within a short period of one year time in Northern India and is giving stiff

competition to all the players in the market including the banks. It is expanding its area of

business, if the progress of UTI MF goes in the same way, than I can say that there is bright

future for UTI MF in coming years. They have much potential to expand their distribution

network in northern India.

The company is currently following huge investment and growth strategies. A part from the

market growth rate the distribution industry doesn’t seem so attractive. Hence the firm should be

selective using growth strategies. This is not to undermine the bright future of UTI MF, just a

check to be a cautious.

There is little awareness about mutual fund in India; people have accepted it as a one of the

major investment avenue. Mutual funds will become one of the sought after investment avenues.

As far as the other investment products marketed by UTI MF are concerned, they have a ready

market. The only thing, which it needs to focus on, is that they should have a strong network so

that prompt services and availability of forms is made available to the investor at a short notice,

and if it keeps the traditional base for marketing in India, which is a price sensitive market, we

can say that UTI MF has a great future ahead.

- 52 -

BIBLIOGRAPHY

www.utimf.com/

www.amfiindia.com

www.sebi.com

www.utimf.com

www.NSE.com

www.economictimes.indiatimes.com/Mutual_fund

Reference Books

Security Analysis and Portfolio Management : Donald E Fischer, Ronald J Jordan·

Outlook Money·

Mutual fund review

How to rate management of mutual funds : Harvard Business review·

Association of mutual funds in India (AMFI) Publications and quarterly reports·

Securities and Exchange Board of India·

Investopedia· Mutual Fund Performance : W. Sharpe· Market Timing, Selectivity, and

Mutual Fund Performance: An Empirical Investigation·

Fact sheets of different fund house