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A Project Report on

A study on Analysis of mutual fund performance at Ascent Consultancy Service Pvt. Ltd BY

GUNASHEKHARA I S 1NH15MBA54 Submitted to

DEPARTMENT OF MANAGEMENT STUDIES NEW HORIZON COLLEGE OF ENGINEERING, OUTER RING ROAD, MARATHALLI, BANGALORE In partial fulfillment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION Under the guidance of

INTERNAL GUIDE Dr. A. R. Sainath NHCE

ETERNAL GUIDE Rajeeth Das

Ascent Consultancy Service Pvt. Ltd

2015-2017

CERTIFICATE

This is to certify that Gunashekhara I s bearing 1NH15MBA54 is a confide student of Master of Business Administration course of the Institute 2016-17, autonomous program, affiliated to Visvesvaraya Technological University, Belgaum. Project report on ‘A NA LIS IS OF MUTUA L F UND P ER FO RM A NCE A T A S CE NT CO NS UL TA NCY SERVIC E PVT.LT D’ is prepared by him under the guidance of Dr. Sainath, Professor, in partial fulfillment of requirements for the award of the degree of Master of Business Administration of Visvesvaraya Technological University, Belgaum Karnataka.

Signature of Internal Guide

Signature of HOD

Signature of principal

DECLARATION

I, Gunashekhara , hereby declare that the Internship report entitled ‘A nal ysi s of Mutu al fun d p erfo rmance a t a scent cons ul tancy servic e Pv t. Ltd’ prepared by me under the guidance of Dr. Sainath, Professor, of M.B.A Department, New Horizon College of Engineering. I also declare that this mini project work is towards the partial fulfillment of the university regulations for the award of the degree of Master of Business Administration by Visvesvaraya Technological University, Belgaum.

I have undergone a project for a period of sixteen weeks. I further declare that this project is based on the original study undertaken by me and has not been submitted for the award of a degree/diploma from any other University / Institution.

Signature of Student Place: Date:

ACKNOWLEDGEMENT I express my deep sense of gratitude to chairman DR. MOHAN MANGHNANI and Principal DR. MANJUNATHA, New Horizon College Of Engineering, for giving the opportunity of being the part of this institution and for generous help to complete the project. I am extremely thankful and pay my gratitude to head of the department DR. SHEELAN MISRA for her valuable guidance and support on completion of this project in its presently. I express my special thanks to my internal guide Dr A R SAINATH, professor for him valuable guidance, support, motivation and inspirations at every stage throughout the period of my project work. I would like to thank Mr. RANJEETH DAS. and the Management staff of the ASCENT CONSULTENCY SERVICE PVT LTD, Bangalore for giving me opportunity to conduct to study and to be associated with the company. Finally, I wish to thank my Parents, Friends and to all who helped me in the successful completion of this project.

GUNASHEKHARA I S USN NO: 1NH15MBA54

INDEX Chapter 1 1.1

Topic chosen for the study ……………………….1

1.2

Need for the study ……………………………......3

1.3

Objective of the study……………………………..3

1.4

Scope of the study………………………………....4

1.5

Research methodology…………………………….4

1.6

Review of literature………………………………..5

1.7

Limitation of the study…………………………….8

Chapter 2 2.1 Company profile…………………………………….9 2.2 Vision & Mission……………………………………10 2.3 Key attributes……………………………………......11 2.4 Service……………………………………………....12 Chapter 3 3.1 mutual fund in India …………..……………………14 3.2 advantages and disadvantages of mutual fund ….....15 3.3 types of mutual fund scheme……………………......16 3.4 mutual fund structure in India..............................…...20 3.5 mutual fund operation flow chart …………………..25 3.6 Best mutual fund in India …………………………...26 3.7 Some facts growth for the mutual fund India……….27 3.8 Role of mutual fund in stock exchange………………..28

Chapter 4 Analysis and interpretation of data………………………...42 Chapter 5 5.1 Findings……………………………………………..60 5.2 Suggestions……………………………………….....61 5.3 Conclusion…………………………………………..62

Bibliography Annexure

List of Tables

Titles

Page No.

4.1 Table showing on what kind of investment options respondents 28 prefer 4.2 Table showing Investment avenues

30

4.3 Table showing investment portfolio

32

4.4 Table showing awareness of mutual fund

34

4.5 Table showing proportion of amount invest in mutual fund

36

4.6 Table showing interest to the area investor in mutual fund

38

4.7 Table showing Investors opinion of open ended and close

40

ended scheme. 4.8 Table showing on schemes preferred by the investors

42

4.9 Table showing Table showing on while buying a mutual fund.

44

4.10 Table showing Number of investor contact while investing.

46

4.11 Table showing Number of investor deals with different

48

scheme. 4.12 Table showing Trade option Preferred by investor

50

4.13 Table showing Objective behind trading in Mutual Fund.

52

4.14 Table showing percentage of return expect in Mutual Fund.

53

4.15 Table showing Investor willing to take Risk.

54

4.16 Table showing Opinion about RELIANCE Mutual Fund.

55

4.17 table showing investment motive with reliance mutual fund

56

4.18 table showing factor considering by investing in mutual fund

58

List of graph

Titles

Page No.

4.1Graph shoeing on what kind of investment options 29 respondents prefer 4.2 Graph showing Investment avenues

31

4.3 Graph showing investment portfolio

33

4.4 Graph showing awareness of mutual fund

35

4.5 Graph showing proportion of amount invest in mutual fund 37 4.6 Graph showing interest to the area investor in mutual fund

39

4.7 Graph showing Investors opinion of open ended and close 41 ended scheme. 4.8 Graph showing on schemes preferred by the investors

42

4.9 Graph showing on while buying a mutual fund.

44

4.10 Graph showing Number of investor contact while 46 investing. 4.11 Graph showing Number of investor deals with different 48 scheme. 4.12 Trade option Preferred by investor

50

4.13 Graph showing behind trading in Mutual Fund.

51

4.14 Graph showing percentage of return expect in Mutual 53 Fund. 4.15 Graph showing Investor willing to take Risk.

54

4.16 Graph showing Opinion about RELIANCE Mutual Fund. 55 4.17 Graph showing investment motive with reliance mutual

57

fund 4.18 Graph showing factor considering by investing in mutual fund

59

EXECUTIVE SUMMARY

Financial market’s main function is to facilitate transfer of funds from surplus sectors to deficit sectors. A financial market consists of investor or buyers, sellers, dealers and does not refer to physical location. Indian financial system consists of two markets, viz. money and capital market. The core of money market is the inter-bank call money market. It has two components - organised and unorganised.

Capital market provides the framework in which savings and investments take place. On one hand it enables companies to raise resources from the investing community and on the other, it facilitate households to invest their savings in industrial or commercial activities. The capital market consists of primary and secondary segments. In primary market it deals with the issue of new instruments by the corporate sector such as equity shares, preference shares, and debentures. The secondary market or stock exchanges where existing Securities are traded. Capital market plays a major role in Indian financial system.

So, Equities & mutual fund is the part of capital market. Mutual fund industry in India began with setting up of Unit Trust of India (UTI) in 1964 by the government of India. Now a day mutual fund is playing very important role in the industry. Investors will get the benefit of return, capital appreciation, tax benefits and safety to their investment and companies will get the capital for their growth. Recently they have also started Systematic Investment Plan(SIP) with the help of this even small investors (minimum of Rs. 100)can start investing, by this even students can also invest in this fund. So, we came to know how this mutual fund works. .

The saving of an individual are spread through different means of investment one of them is mutual fund which is a growing investment now a days because of diversified risk and lack of time to look after their money.

Chapter 1 INTRODUCTION 1.1 About the topic FINANCE Finance is regarded as „life blood of enterprise‟. This is because in the Modern Money-Oriented Economy, Finance is one of the basic foundations for all kinds of economic activities; it is the master key which provides access to all the sources for being employed in Manufacturing and Merchandising activities.” Finance is also called the “wheel, marrow of bones and spirit of trade, commerce and industry.” The word finance comes from the Latin word “finis”, under Roman law contracts was not completed until there was a binding contract for monetary/ credit agreements

FINANCIAL MANAGEMENT Financial management Emerged as a distinct field of study at the time of 20th century. When one goes through history of financial management it is clear that in the past the scope of financial management has limited to certain activities , with a focus mainly on certain episodic events like formation instance of capital , major expansion , merger, recognition and liquidation in the life cycle of firm. Financial management is descriptive and institutional in nature. In the past, greater emphasis was given on day – to-day problems faced by financial managers were responsible only for maintaining financial records, preparing reports on the company‟s status, performance and arranging funds needed by the company. Their special services were utilized only when required via, problem with dearth of funds and to procurement of additional funds. Driven by growing trend of globalization, the revolutionary developments in information technology and emergence of the digital era, one can witness phenomenal changes in the world of finance. Today modern corporate finance is changing from domestic funding to multi currency funding. Financial control is changing from simple accounting to integrated control systems based on enterprise resource planning.

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Investment management is shifting from simple equity and debt products to complex derivatives products like options, futures, and swaps. Financial services like banking &insurance are getting geared up for virtual delivery in a seamless digital world. These far reaching developments in the world of finance have redefined the role of financial manager. The fiancé manager‟s, therefore concerned with all financial activities of planning of fund raising, allocation and controlling but not with just any one of them besides, he has handle such financial problems that are encountered by a firm at the time of incorporation, liquidation , consolidation ,recognition and the like situations that occur frequently. The finance managers of today are called upon to evolve financial strategies that dovetail with the firms competitive business strategies. In a competitive environment, access to the cheapest funds is a key element of competitiveness. A finance manager needs to evaluate his firms cash needs and decide, for example whether to use debt or equity funding, whether to have fixed or floating debt, whether to borrow in rupees or in foreign currency, whether to do currency and / or interest swaps to reduce its funding cost, whether to issue GDR‟S (Global Depository Receipts) ADR‟s (American Depository Receipts) or to go for a local secondary issue and so on. For each alternative or combination of alternatives, he needs to evaluate his net costs, the risk involved, the timing issue and so on. For this finance manger should have analytical bent of mind and intellectuality in various financial concepts.

SPECIFIC AREA OF THE TOPIC CHOSEN MUTUAL FUND A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them. 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.

2

Definition of Mutual FundThe SEBI (MF) Regulations, 1993 defines mutual fund as “A fund established in the form of a trust by a sponsor to raise monies by the trustees through the sale of units to the public under one or more schemes for investing in securities in accordance with these regulations 1.2 NEED FOR THE STUDY The project has been undertaken with the aim of Analysing the Mutual funds of the. And also to analyse how the operation has been undertaken to communicate with the client & how the services is offered by the company. These operations may involve the following problems  The operations involved in India Info line Ltd.  Differences between Equities & Mutual funds operations and  Mutual understanding between company & its clients.

1.3 OBJECTIVES OF THE STUDY The research is undertaken with an objective to know the following aspects:  To study the investment pattern by the respondents in Mutual Funds  To know the perception of investors for investing in a Mutual Fund Scheme  To identify the most demandable scheme of mutual fund  To find whether investment in Equities is better or mutual fund is better  To identify the risk & return involved in Equities and Mutual funds

1.4 SCOPE OF THE STUDY The study conducted on “Analysis of Mutual fund performance in India” swith reference to ascent consultancy in the real world has wider scope. The economic activity concerned with great fluctuations in the economic system. Nowadays the business people are interested to invest in the mutual funds and equities. They are giving a much importance to this particular field, which leads to study more about this area. By conducting study in this specified field can understand how the risk and return involved in the future time with the past experience. The study brings light in various segment, they are,  To gain new and valid ideas. 3

 To know the current issues as regards to the research area.  To gain more knowledge, by direct and personal experience.  To broaden the perspective and set the work in context.  To know the actual importance of this research.  To spot the areas which have not been researched 1.5 RESEARCH METHODOLOGY: A Research design is a method and procedure for acquiring information needed to solve the problem. A research design is the basic plan that helps in the data collection or analysis. It specifies the type of information to be collected the sources and data collection procedure. The present study is descriptive and it is a fact finding investigation with adequate interpretation. It is undertaken in many circumstances. When the researcher is interested in knowing, the characteristics of certain groups such as age, educational level, occupation or income, interested in knowing the proportion of in a given population who have behaved in particular manner, making the projections of certain things, or determining the relationships between two or more variables, descriptive study may be necessary. Descriptive data are commonly used as directed bases of marketing decisions, these studies are well structured.

DATA COLLECTION In order to information from the respondent survey method has been adopted. A neatly constructed questionnaire was prepared to collect information from the respondents regarding information about the mutual fund. It contains both open-ended and close-ended questionnaire.

Primary Data. Primary data is the first hand data collected by the researcher directly it‟s the fresh data. The sources of primary data from this study purpose are as follows :  Observation  Interviews  Questionnaires

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Secondary Data: Secondary data is the already available information collected someone hence For their own study purpose and it is the published sources of information. The secondary data sources for this study purpose are:  Text books  Company broachers , documents & other related materials  Websites

1.6 REVIEW OF LITERATURE Any scholars‟ Researchers and writers have done the study on “Analysis of mutual fund performance in India”. Where the objectives were completely different on the basis of the needs they had as on when it got a raised. The researchers hear as viewed all such work on the same, for the purpose of these study but the objectives of the researcher on this area on completely different than that of those and the need two is also having variation is it. As to increase the knowledge on the same by getting some sort of the practiced exposure Literature on mutual fund performance evaluation is enormous. A few research studies that have influenced the preparation of this paper substantially are being followed. Sharpe, W illiam F. (1966) suggested a measure for the evaluation of Mutual fund performan ce. Drawing on results obtained in the field of portfolio analysis, economist Jack L. Treynor‟s has suggested a new predictor of mutual fund performance, one that differs from virtually all those used previously by incorporating the volatility of a fund's return in a simple yet meaning ful manner. Michael C. Jensen (1967) derived a risk - adjusted measure of portfolio performance (Jensen‟s alpha) that estimates how much a manager‟s forecasting ability contributes to fund‟s returns. As indicated by Stat man (2000), the e SDAR of a fund portfolio is the excess return of the portfolio over the return of the benchmark index, where the portfolio is leveraged to have the benchma rk index‟s standard deviation.S.Narayan Rao, et. al., evaluated performance of Indian mutual funds in a bear market through

relative

p e r f or m a n c e

index,

r i sk -r et u r n

a n a l ys i s ,

T r e y n o r ‟ s r a t i o , S h a r p e ‟ s r a t i o , S h a r p e ‟ s measure , Jensen‟s measure, and Fame‟s measure. The study used 269 open-ended schemes (out of total schemes of 433) for computing 5

relative performance index. Then after excluding funds whose returns are less than risk-free returns, 58 schemes are finally used for further analysis. The results of performance measures suggest that most of mutual fund schemes in the sample of 58were able to satisfy investor‟s expectations by giving excess returns over expected returns based on both premium for systematic risk and total risk. Bijan Roy, etc. all cond ucted an empirical study on conditional performance of Indian mutual funds. This paper measures the performance of various mutual funds with both unconditional and conditional f o r m o f T r e y n o r ‟ s Maguey

m od e l

and

H e nd r i ...