INTRODUCTION

Analysis on various mutual fund schemes includes estimating the risk by

calculating Alpha, Beta, Standard deviation and Sharp ratio. Return of the particular fund can
also be estimated by Net asset value (NAV), Compound average annual return, and fund’s total
return. Best Five Mutual fund schemes from the reliance have been selected to analyze. Asset
under management (AUM) can also be calculated to know the present value of fund. Equity
exposure of each scheme and schemes which will give higher return can also be determined.

Alpha, Beta, Standard deviation and Sharp ratio are the main four important statistical
tools to calculate the risk of the each and every mutual fund scheme. The intrinsic value of
mutual fund depends on a multitude of factors. The evaluation of the mutual fund provides a feed
back about the performance to evolve better management strategy. Even though evaluation of
mutual fund’s performance is considered to be the last stage of investment process, it is a
continuous process. The managed portfolios are commonly known as mutual funds. Their
relative merits of return and risk criteria are evaluated.

Analysis of various mutual fund schemes helps to people in the areas of Professional
management, Diversification, Convenient administration, Return potential, Low costs,
Transparency, Flexibility, Choice of scheme and Well-regulated.

Choosing a mutual fund scheme is a tough task today than ever. With over 30 fund
houses to pick from, and most of them claiming first-rate performance, investors are finding it
extremely difficult to select a scheme. For example, if one has to look at the performance of most
of the equity funds I the last year, most of them have returned 100% or more. How can one find
fault with any of them. The case is not very different in the debt segment, too. Only percentage
point differentiates the top performers.

INDUSTRY PROFILE
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 The mutual fund industry in India started in 1963 with the formation of Unit Trust of
India, at the initiative of the Government of India and Reserve Bank of India. Though the growth
was slow, but it accelerated from the year 1987 when non- UTI players entered the industry.

In the past decade, Indian mutual fund industry had seen dramatic improvements, both
quality wise as well as quantity wise. Before, the monopoly of the market had seen an ending
phase; the Asset under Management (AUM) was Rs. 6,700 cr. The private sector entry to the
fund family raised the AUM to Rs. 4,700 cr in March 1993 and till March 2007; it reached the
height of Rs. 3, 25,000 cr.

Putting the AUM of the Indian Mutual Funds Industry into comparison, the total of its
less than the deposits of SBI alone, constitute less than 11% of the total deposits held by the
Indian banking industry.

The main reason of its poor growth is that the mutual fund industry in India is new in the
country. Large sections of Indian investors are yet to be in telling actuated with the concept.
Hence, it is the prime responsibility of all mutual fund companies, to market the product
correctly abreast to the development of the sector. Each phase is briefly described as:

FIRST PHASE – 1964-87:

Unit Trust of India 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 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 and General Insurance Corporation of India. SBI
Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Can bank
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

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1993, the mutual fund industry had assets under management of Rs.47, 004 crores.

THIRD PHASE – 1993-2003 (ENTRY OF PRIVATE SECTOR FUNDS):

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in
which the first Mutual Fund Regulations came into being, under which all mutual funds, except
UTI were to be registered and governed. The erstwhile Kothari Pioneer was the first private
sector mutual fund registered in July 1993.

The 1993 SEBI Regulations were substituted by a more comprehensive and revised
Mutual Fund Regulations in 1996. The industry now functions under the SEBI Regulations 1996.

The number of mutual fund houses went on increasing, with many foreign mutual funds
setting up funds in India and also the industry has witnessed several mergers and acquisitions. As
at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1, 21,805 crores.
The Unit Trust of India with Rs.44, 541 crores of assets under management was way ahead of
other mutual funds.

FOURTH PHASE – SINCE FEBRUARY 2003:

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India
with assets under management of Rs.29, 835 crores as at the end of January 2003, representing
broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified
Undertaking of Unit Trust of India, functioning under an administrator and under the rules
framed by Government of India and does not come under the purview of the Mutual Fund
Regulations.
The second is the UTI Mutual Fund 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

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mutual fund industry has entered its current phase of consolidation and growth. As at the end of
September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421
schemes.

GROWTH OF MUTAL FUND IN INDIA:

The Indian Mutual Fund has passed through three phases. The first phase was between
1964 and 1987 and the only player was the Unit Trust of India, which had a total asset of Rs.
6,700 crores at the end of 1988.

The second phase is between 1987 and 1993 during which period 8 Funds were
established. The total assets under management had grown to 61,028 crores at the end of 1994
and the number of schemes was 167.
The third phase began with the entry of private and foreign sectors in the Mutual Fund
industry in 1993. Kothari Pioneer Mutual Fund was the first Fund to be established by the private
sector in association with a foreign Fund.
As at the end of financial year 2000 32 Funds were functioning with Rs. 1, 13,005 crores
as total assets under management. As on august end 2000, there were 33 Funds with 391
schemes and assets under management with Rs 1, 02,849 crores. The securities and Exchange
Board of India came out with comprehensive regulation in 1993 which defined the structure of
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Mutual Fund and Asset Management Companies for the first time. Several private sectors
Mutual Funds were launched in 1993 and 1994. The share of the private players has risen rapidly
since then. Currently there are 34 Mutual Fund organizations in India managing 1, 02,000 crores.

COMPANY PROFILE

INTRODUCTION:

“Success is a journey, not a destination.” If we look for examples to prove this quote
then we can find many but there is none like that of karvy. Back in the year 1981, five people
created history by establishing karvy and company which is today known as karvy, the largest
financial service provider of India.

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SUCCESS SUTRAS OF KARVY:

The success story of karvy is driven by 8 success sutras adopted by it namely trust,
integrity, dedication, commitment, enterprise, hard work and team play, learning and innovation,
empathy and humility. These are the values that bind success with karvy.

VISION OF KARVY:

To achieve & sustain market leadership, Karvy shall aim for complete customer
satisfaction, by combining its human and technological resources, to provide world class quality
services. In the process Karvy shall strive to meet and exceed customer's satisfaction and set
industry standards.

MISSION STATEMENT:

“Our mission is to be a leading and preferred service provider to our customers, and we
aim to achieve this leadership position by building an innovative, enterprising , and technology
driven organization which will set the highest standards of service and business ethics.”

COMPANY OVERVIEW:

Karvy was established as karvy and company by five chartered accountants during the
year 1979-80, and then its work was confined to audit and taxation only. Later on it diversified
into financial and accounting services during the year 1981-82 with a capital of rs.150000. It
achieved its first milestone after its first investment in technology. Karvy became a known name
during the year 1985-86 when it forayed into capital market as registrar.

EVOLUTION OF KARVY:

It is well said that success is a journey not a destination and we can see it being proved by
karvy. Under this section we will see that how this “karvy and company” of 1980 became
“karvy” of 2008. Karvy blossomed with the setting up of its first branch at Mumbai during the
year 1987-88. The turning point came in the year 1989 when it decided to enter into one of the
not only emerging rather potential field too i.e; stock broking. It added the feather of stock
broking into its cap. At the same time it became the member of Hyderabad Stock Exchange
through associate firm karvy securities ltd and then karvy never looked back……..it went on
adding services one after another, it entered into retail stock broking in the year 1990. Karvy
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investor service centers were set up in the year 1992. Karvy which already enjoyed a wide
network through its investor service centers, entered into financial product distribution services
in the year 1993. One year more and karvy was now dealing into mutual fund services too in the
year 1994 but it didn’t stopped there, it stepped into corporate finance and investment banking in
the year 1995.

Karvy’s strategy has always been being the first entrant in the market. Karvy again hit the
limelight by becoming the first registrar in the country to be awarded ISO 9002 in the year 1997.
Then it stepped into the other most happening sector i.e.; IT enabled services by establishing its
own BPO units and at a gap of just 1 year it took the path of e-Business through its website
www.karvy.com . Then it entered into insurance services in the year 2001 with the launch of its
retail arm “karvy- the finapolis: your personal finance advisor”. Then in the year 2002 it
launched its PCG (Private Client Group) which looks after its High Net worth Individuals .and
maintain their portfolio and provides them with other financial services. In the year 2003, it
commenced secondary debt and WDM trading.

It was a decade which saw many Indian companies going global…..so why the largest
financial service provider of India should lag behind? Hence, karvy launched “karvy global
services limited” after entering into a joint venture with Computershare, Australia in the year
2004.the year 2004 also saw karvy entering into commodities marketing through karvy
comtrade. Year 2005 saw karvy establishing a separate branch for its insurance services under
the head “karvy insurance broking ltd” and in the same year, after being impressed with the rapid
growth of karvy stock broking limited, PCG group of Hong Kong acquired 25% stake at KSBL.
In the year 2006, karvy entered into one of the hottest sector of present time i.e real estate
through Karvy realty& services (India) ltd. hence , we can see now karvy being established as
the lagest financial service provider of the country.

THE SUCCESS LADDER:

ORGANIZATION STRUCTURE OF KARVY:

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HOW KARVY ACHIEVED IT?

The core competency of karvy lies in the following points due to which it enjoys a
competitive edge over its competitors. The following culture adopted by karvy makes it all time
favorite among its clientele:

✔ Professionally managed by qualified and trained manpower.

✔ Uniquely structured in-house software and hardware department

✔ Query handling within 48 hrs.

✔ Strong secretarial, accounting and audit systems.

✔ Unique work culture of working 7 days a week in 3 shifts.

✔ Unmatched network spreading all over India.

HOW ACHIEVEMENTS SOUNDS SYNONYMOUS TO KARVY:

The landmarks achieved by karvy very well define its success story. In the previous pages,
we learnt how a company started by five chartered accountants, named as karvy and company
turned into today’s karvy group, the largest financial intermediary of India. But success didn’t
came to karvy at a flow, the hard work and dedication of its workforce made it what it is today…
gradually it achieved the following landmarks and now it has became what we call the karvy
group, now it is:

 Largest independent distributor for financial products.

 Amongst the top 5 stock broker.

 Among the top 3 depository participants.

 Largest network of branches & business associates.

 ISO 9002 certified operations by DNV.

 Amongst top 10 investment bankers.

 Adjudged as one of the top 50 IT users in India by MIS south Asia.

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  Full- fledged IT driven operation.

 India’s no.1 registrar & securities transfer agent.

CLIENTES OF KARVY:

Karvy’s culture has helped karvy in achieving such a distinct position in the market
where it can boast of its huge client base. Be it a retail investor investing Rs. 500 in a SIP in
Reliance mutual fund or be it the largest corporate house of the country: Reliance industries-
everybody is heading towards karvy for their wealth maximization, lets have a look at the
clientele of karvy:

According to the datas published in year 2007, karvy stock broking ltd. Operates through
more than 12000 terminals, more than 290000 accounts are maintained and commands over
3.14% market share of NSE. The distribution services have access to more than Rs. 40 billion
Assets under Management. Karvy being a depository participant with both NSDL and CDSL
manages more than 700000 accounts from more than 380 locations. Talking about the registry
services, it manages over 750 public/ right issues. At the same time; it is managing over 16
million portfolios as registrar.

If we took a look at some of the top corporate houses availing the services of karvy then
we have: Reliance, IOC, IDBI,LIC, Hindustan Unilever, Principal Mutual Fund, Duetsche
Mutual Fund, Yogokawa, Marico Industries, Patni Computers, Morgan Stanley, Glenmark,
CRISIL, 3M, Kotak Mahindra Bank, Bharti Televenture, Infosys Technologies, Wipro, Infotech,
IPCL,TATA consultancy services, UTI mutual fund etc. Thus in total karvy serves over 16
million investors and 300 corporates.

PRODUCT PROFILE

Now karvy group consists of 8 highly renowned entities which are as follow:

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1. : The first securities registry to receive ISO 9002 certification in India.
Registered with SEBI as Category I Registrar, is Number 1 Registrar in the Country. The award
of being ‘Most Admired’ Registrar is one among many of the acknowledgements we received for
our customer friendly and competent services.

2. : karvy stock broking ltd. Consists of five units namely stock broking
servics, depository participant, advisory services, distribution of financial products, advisory
services and private client goups.

3. : it is registered with SEBI as a category 1 merchant banker. Its clientele

includesinclude leading corporate, State Governments, foreign institutional investors, public and
private sector companies and banks, in Indian and global markets.

4. : karvy insurance broking ltd is also a part of karvy stock broking ltd. At
Karvy Insurance Broking Limited both life and non-life insurance products are provided to retail
individuals, high net-worth clients and corporates

5. : The company provides investment, advisory and brokerage services in

Indian Commodities Markets. And most importantly, it offer a wide reach through our branch
network of over 225 branches located across 180 cities.

6. : Karvy Global is a leading business and knowledge process outsourcing

Services Company offering creative business solutions to clients globally. It operates in banking
and financial services, inurance, healthcare and pharmaceuticals, media , telecom and
technology. It has its sales and business development office in New York, USA and the offshore
global delivery center in Hyderabad, India

7. : Karvy Realty (India) Limited is engaged in the business of real estate and
property services offering:

• Buying/ selling/ renting of properties

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 • Identifying valuable investments opportunities in the real estate sector

• Facilitating financial support for real estate and investments in properties

• Real estate portfolio advisory services

8. : it is a joint venture between Computershare, Australia and Karvy

Consultants Limited, India in the registry management services industry.

NEED FOR THE STUDY

✔ The main purpose of doing this project was to know about different scheme in
reliance mutual fund.

✔ This helps to know in details about different scheme in reliance mutual fund right
from its inception stage, growth and future prospects.

✔ It also helps in understanding different schemes in reliance mutual funds.

✔ This project will suggest an investor to choose one among the best of equity fund
schemes of reliance mutual fund.

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 OBJECTIVES OF THE STUDY

PRIMARY OBJECTIVE

➢ To analyze the relationship between risk and return of equity funds of

reliance mutual fund.

SECONDARY OBJECTIVE

➢ To evaluate the reliance mutual fund.

➢ To calculate the rate of return earned over the period.
➢ To measure rise taken by the fund.
➢ To measure return per unit of risk.
➢ To provide valuable suggestion and recommendations.

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 SCOPE OF THE STUDY

 Scope of the project is restricted to 5 equity fund managed by reliance mutual

fund. They are: 1. Reliance Growth Fund, 2. Reliance Vision Fund, 3. Reliance
Banking Fund, 4. Reliance Diversified Power Sector Fund 5. Reliance pharma
Fund.
 Its analysis of relationship between risk and return; it helps in understanding te
performance of reliance mutual fund schemes.
 The techniques of risk and return can be used as an effective mechanism to provide
suggestions to an investor of reliance mutual fund

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 RESEARCH METODLOGY

Business Research is an organized, data based, systematic, critical, objective, scientific

inquiry or investigation in to a specific problem undertaken, with the purpose of finding answers
or solutions to it. The information provided could be the result of a careful analysis of data
gathered first hand or of the data that are already available.

RESEARCH DESIGN

Descriptive research design:

The descriptive research includes surveys and fact-finding enquires of different kinds.
The major purpose of descriptive research is description of the state of affairs, as it exists at
present. The major characteristic of this method is researchers has no control over the variables,
he can only report what has happened or what is happening. The descriptive study is under taken
in order to ascertain and be able to describe the characteristics of the variables of interest in a
situation.

DATA COLLECTION

The data collection is the data constitute the foundation on which the super structure of
statistical analysis is built. The results obtained from the analysis are properly interpreted and
policy decisions are taken. Hence if the data are accurate and in adequate, the whole analysis
may be faulty and the decisions will be misleading.

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SECONDARY DATA COLLECTION:
The research has collected the secondary data from the company’s records, products
pamphlet, internet, previous project reports. The study is based on secondary data.

TECHNIQUES OF ANALYSIS
Beta:

Beta = [Cov (r, Km)] / [StdDev (Km)] 2

Where:
r is the return rate of the investment; Km is the return rate of the asset class.

Alpha:

Alpha = [(sum of x)-((b) (sum of x))]/n

Where:

n = number of observations; b = beta of the found.

Standard Deviation:

Where N is the number of samples taken.

Sharp Ratio:

S(x) = (r-R) / StdDev(x)

Where x is some investment; r is the average annual rate of return of x; R is the best available
rate of return of a “risk-free” security (i.e. cash); StdDev is the standard deviation of r.

Net Asset Value (NAV):

NAV = Market value of asset – Liabilities

No. of. Shares out Standing
REVIEW OF LITERATURE

PERFORMANCE IN INDIA:

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 The industry has steadily grown over the decade. For example, before the public sector
mutual funds entry, UTI was managing around Rs 6,700 crore on its own. Public sector mutual
funds also helped accelerate the growth of assets under management. UTI and its public sector
counterparts were managing around Rs 47,000 crore when Kothari Pioneer, the first private
sector mutual fund, set up shop in 1993. Before the US 64 fiasco, there were 33 mutual funds
with total assets of Rs 1, 21,805 crore as on January 2003. The UTI was way ahead of other
mutual funds with Rs 44,541 crore assets under management. The industry overall has performed
well over the years. Of course, there were a few funds houses, which disappointed investors.
However, overall performance has been good. However, lack of awareness still impedes the
growth of the mutual fund industry. Unlike developed countries, most of the household savings
still go to bank deposits in India.

1. Financial Management of Private and Public Equity Mutual Funds in India: An Analysis
of Profitability (By H.J Sondhi and PK Jain from The ICFAI Journal of applied finance,
July 2005) This article examines the rates of returns generated by equity mutual funds,vis-à-
vis,364 days T-bills and the Bombay Stock Exchange-100(BSE-100) National Index during the
period 1993-2002.Rate of return on 364 days T-bill is the surrogate measure for risk free return
and the BSE-100 National index has been chosen as proxy for market portfolio in our analysis.
Equity mutual funds predominantly invest in company equities and hence are risky investments
while choosing to invest in equity mutual funds, the investors expect not only risk premium but
also better returns than the market portfolio. The paper has been divided in to four
sections.Section1 outlines the scope and methodology of the study that includes, inter alia, the
basis of computation of rate of return earned by the equity mutual funds,364 days T-bills and
BSE-100 National Index,Section2 computes and analyzes rates of return.Section3 is concerned
with comparison to rates of return of private sector company sponsored equity mutual funds and
PSU sponsored equity mutual funds Concluding observations have been recapitulated in Section.
2. RelativeRisk Return Analysis Use the Proprietary Bubble Analysis of the Relative Risk and
Return Analysis of Mutual Funds by the ICICI Bank Private Bank Advisory Group.
3. Mutual Fund Investments are subject to Market Risks (Portfolio Organizer, October
2005) this article deals with the risk of Mutual Fund Investments, Types of risks, and the
common mistakes done by investor while choosing the funds for the purpose of investing,
Investors responsibility in Investing

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4. Empirical Investigation on the Investment Managers’ Stock Selection Abilities: The
Indian Experience (By Ramesh Chander from The ICFAI Journal of applied finance,
August 2005) The study examined the stock selection abilities of investment managers in India
across the fund characteristics as well as the persistence of such performance. It also investigated
performance variability for a sample of 80 investment schemes for the period starting from
January 1998-December 2002.On the whole, the results reported documents significant statistical
evidences for passive stock selection abilities of Indian investment managers. It points to the
consistency of performance across the measurement criteria. Investment Performance depends
on the stock selection and pertains to the successful micro forecasting for company specific
events. It refers to the manager’s ability to identify under or overvalued securities.
5. Mutual Fund Industry in India: On a growth Trail (Cover Story, Chartered Financial
Analyst, July 2005) the mutual fund industry in India has been on a roll as the assets under
management continue to see strong spurt in growth. The assets under management swelled to Rs.
1, 67,978 cr. By May 31, 2005 from Rs.1, 01,565 cr. In January 2000.This apart, the industry has
also seen a spurt in the number of schemes on offer which amount to 460 at present, catering to
varied needs of investors. A booming economy, soaring stock market and a conducive regulatory
environment, amongst a slew of other factors have added to the growth of the industry. Given the
huge opportunity in sub-urban and rural markets, which lie hitherto untapped and growing
income levels in the country, the industry’s future look bright.
6. Managing Mutual Fund Investments in the Era of change (By Kulbhushan Chandel and OP
Verma from the ICFAI Journal of applied finance, October 2005): The study is confined to
evaluate the performance of mutual funds on the basis of weekly returns compared with risk free
security returns and BSE Index. The present study includes the five different sector specific
schemes. Among these 25 schemes, only sector specific schemes floated by different institutions
have been studied .To evaluate the performance of funds only three performance measures have
been applied i.e. Sharpe Index, Treynor Index and Jensen’s measure. It is observed that the
performance of sample schemes during the study period is best. However; there are some
instances where poor performance has been reflected.

A number of studies have examined the impact of firm-specific variables such as firm
size and book-to-market-value, as in Fama and French (1992), while other studies have
examined the impact of the macro-economic factors, as in Chen, Roll and Ross (1986),
Antoniou, Garret and Priestly (1998), and Poon and Taylor (1992).
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Journal of Research into New Media Convergence: The International Technologies: This
very journal is basically an interview which is done by Patrick Crogan to Samuel Weber. The
title is Targeting, Television and Networking: An Interview with Samuel Weber. Here a light is
thrown on various aspects by the interviewee on the targeting, media and networking.
According to him;
The ‘target’ is someone who doesn’t fit the usual criteria so one doesn’t have the same
kind of search procedures as in the normal hiring process. The target of opportunity can be a
function of affirmative action policy or be somebody whose qualifications are unusual enough
that one would not find them with a regular search process following criteria peculiar to an
individual discipline.
On the one hand the association of targeting with the aim of controlling the future,
controlling the environment by identifying a target, localizing it and hitting it or reaching it,
depending on what area a person is in, and on the other hand the notion of opportunity, which
suggests the unpredictable emergence of an event that can’t be entirely planned The coupling of
the two terms suggests that targeting, rather than just designating an abstract activity in which,
unencumbered by constraints of time and space, he identify something that he/she wants to
accomplish or goals to be reach and then everything is done to achieve that, involves responding
in a very determinate situation spatially and temporally to an unpredicted, unforeseen event,
trying to get that event in some sense under control.
The word ‘opportunity’ itself is interesting because it already condenses this idea of the
unpredictable, singular event being turned into an occasion to do something else. An opportunity
means precisely to be able to do something with the event. Quite literally, the word suggests a
portal, op-port-unity; a gateway through which one can pass into another domain. The latter can
be construed as a realm of goals, and then the opportunity is instrumental zed, like the target. But
it can also suggest an area that may not be definable strictly or primarily in terms of goals, aims
or ends. In the latter case you can’t be absolutely sure that you are going to be able to reach your
target or even that there is one. So you have this tension between the two terms, target and
opportunity.
In the financial domain as well, where the maximization of profit in the short term takes
precedence over all other considerations and has come to undermine the very foundations of the
capitalist economy that produced it in the first place.

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Analyzing Mutual Fund Risk By Arturo Neto , CFA (Contact Author | Biography)Filed
Under: Economics, Mutual Funds: There are a number of attractive mutual funds and fund
managers that have performed very well over both long-term and short-term horizons.
Sometimes, performance can be attributable to a mutual fund manager's superior stock-picking
abilities and/or asset allocation decisions. In this article, we'll summarize how to analyze a
mutual fund's portfolio and determine whether there are specific performance drivers.

Port folio analysis: - All mutual funds have a stated investment mandate that specifies whether
the fund will invest in large companies or small companies, and whether those companies exhibit
growth or value characteristics. It is assumed that the mutual fund manager will adhere to the
stated investment objective. It's a good start to understand the fund's specific investment
mandate, but there is more to fund performance that can only be revealed by digging a bit deeper
into the fund's portfolio over time.

1. Sector Weights: Sometimes fund managers will gravitate toward certain sectors either
because they have deeper experience within those sectors, or the characteristics they look for
in companies force them into certain industries. A reliance on a particular sector may leave a
manager with limited possibilities if they have not broadened their investment net.
To determine a fund's sector weight, we must either use analytical software or sources like
Yahoo! or MSN. Regardless of how the information is obtained, the investor must compare
the fund to its relevant indexes to determine where the fund manager increased or decreased
his allocation to specific sectors relative to the index. This analysis will shed light on the
manager's over/underexposure to specific indexes in order to gain additional insight on the
fund manager's tendencies or performance drivers. The analysis can be as simple as listing
the fund and relevant indexes side by side with a breakdown by sector. For example, for a
large cap manager, the simplest way to determine sector reliance is to place the fund's sector
breakdown next to both the S&P 500 Growth Index and the S&P 500 Value Index. Both of
these indexes exhibit unique sector breakdowns because certain sectors routinely fall into the
value category, while others fall into the growth category. Technology, known more as a
growth sector, will have a higher weight in the S&P Growth Index than in the S&P 500
Value Index. Industrials, on the other hand, known as a value sector, will have a higher
weight in the S&P 500 Value Index than in the S&P 500 Growth Index. identify any

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tendencies the fund manager may have.
2. Attribution Analysis: There are fund managers who claim to have a top-down approach
and others that claim to have a bottom-up approach to stock-picking. Top-down indicates that
a fund manager evaluates the economic environment to identify global trends and then
determines which regions or sectors will benefit from these trends. The fund manager will
then look for specific companies within those regions or sectors that are attractive. A bottom-
up approach, on the other hand, ignores, for the most part, macroeconomic factors when
searching for companies to invest in. A manager that employs a bottom-up methodology will
filter the entire universe of companies based on certain criteria, such as valuation, earnings,
size, growth, or a variety of combinations of these types of factors. They then perform
rigorous due diligence on the companies that pass through each phase of the filtering process.

Step 1: Determine the sector weights for both the fund and the index.
Step 2: Calculate the contribution of each sector for the fund by multiplying the sector
weight by the sector return. Repeat for the index.
Step 3: Calculate the rate of return for the fund by adding the contribution of each sector
together. Repeat for the index. In this case, the fund had a return for the period of 4.38%. The
second chart shows the same calculations for the relevant benchmark. We could see that the
total return for the benchmark was 3.55% and that the fund outperformed the benchmark by
0.83%.
Step 4: Calculate the overweight amount by subtracting the index weight for each sector
from the fund weight for each sector.
Step 5: Calculate performance by subtracting the index return for each sector from the fund
return for each sector. Notice that the fund had a 30% weight to Sector 1 while the
benchmark only had a 20% weight. As such, the fund manager over allocated to this sector
assuming it would outperform. We can see from the return of 4.2% for Sector 1 within the
fund was 2% less than the return for the same sector within the benchmark. Now this might
get a bit tricky: The fund manager made the correct choice of allocating to Sector 1 as the
sector for the benchmark had a return of 6.2%, the highest of all five sectors; however, the
security selection within the sector was not very good and therefore the fund only had a 4.2%
return.

20
 Step 6: Calculate the selection attribution by multiplying the benchmark weight with the
difference in performance.
Step 7: Calculate the allocation attribution by multiplying the index return for each sector by
the overweight amount.
Step 8: Calculate the interaction by multiplying the overweight column by the performance
column.
The third chart shows the calculation of both allocation and security selection contribution. In
this example, the manager contribution to performance for overweighting Sector 1 was 0.62%
but the manager did a poor job of security selection, which resulted in a contribution of -0.4%.
The last chart shows the active management effect of positive 0.88% minus the unexplained
portion of -0.055, resulting in active management contribution of 0.825%.
As you can see, this information is very useful to determine whether a manager is driving
performance through asset allocation (top-down) or security selection (bottom-up) analysis. The
results of this analysis should be compared to the fund's stated mandate and the fund manager's
process.
A study on the performance and characteristics on the Swedish fund market Author: Johan
Bergström; Victor Sundén; [2008]:- Abstract: In this paper we study the relation between fund
performance and a set of fund-specific attributes of Sweden funds in the period 2003-2007,
extending the existing research on fund performance. The paper studies a sample of about 90
Sweden funds, performing a number of different statistical tests to verify the robustness of the
results. We generate the risk-adjusted return of the funds, by regressing fund returns against
appropriate benchmarks. We use these estimates as a measure of fund performance and then
analyze the relation between fund performance and attributes such as fund size, flows,
management fees, past performance and a proxy for trading activity. We find evidence of a
significant, positive relationship between fund size and risk-adjusted return as well as a positive
relation between the money flow to funds and risk-adjusted return, i.e. the existence of “smart
money”. We also find some evidence of persistence in the sample.

Risk and Return in Mutual Fund Selection: - How to interpret statistical measures of risk. BY
ROBERT A. CLARFELD AND PHYLLIS BERNSTEIN JULY 1997:- Mutual fund investors
still get only half the story. The focus—in both the financial press and in advertisements—is on
investment return, often precisely quantified by historical returns over several time intervals,
with any mention of the funds relative risk relegated to imprecise generalities.
21
 Mutual fund lists featuring "funds to consider for the next millennium" or "the 17 greatest
funds in the history of the universe" appear frequently in the media and make interesting reading.
But, over time, such lists have not proven to be particularly insightful. Funds with records of
steady gains and favorable risk—reward characteristics usually are better choices for long-term
investors. This may be apparent following a deep market correction but difficult to fathom
during rising markets, a time when many of these same funds are labeled "laggards." Reducing
mutual fund selection to simplistic levels presumes an ignorant investing public, which does little
to promote successful investing.

This article is designed to help CPAs interpret the various statistical measures of risk as
they apply to mutual funds so they will be in a better position to advise their clients on this often
complex aspect of stock and bond investing. Knowing how to interpret this information correctly
will make it easier for CPAs to make responsible and informed investment recommendations to
their clients.

UNDERSTANDING RISK:-Many investors believe the United States is in a period of great

uncertainty in its investment markets. This is a conclusion that applies during all market
conditions—except in hindsight. The risk an investor takes is what provides the opportunity for
higher returns. Recognizing this makes it clear that more emphasis should be placed on risk
analysis when CPAs and their clients make investment decisions. Risk analysis is central to
mutual fund research. Focusing on the long-term relationship between risk and return will enable
CPAs to establish realistic expectations as to expected performance under various market
conditions.

Risk exists when there is uncertainty about whether future returns will differ from the
expected returns. Risk is an attribute that without context is neither good nor bad. Accordingly,
the CPAs role is not to eliminate risk but, rather, to control risk and to make sure that clients are
adequately compensated for the risks they take. The difference between the required rate of
return on a mutual fund—given its risk—and the risk-free rate is the risk premium.

MEASURING RISK: - Since assuming risk is inherent to the investment process, mutual fund
investors must be adequately and consistently rewarded for the risks they assume. Prudent
research means searching for fund managers who consistently produce returns justifying the risks
they have taken.

22
Modern portfolio theory research developed a number of statistics that make it possible to more
precisely quantify the relationship between risk and return. These measurements help determine

• Funds volatility (standard deviation).

• How closely a fund mirrors a particular market index (R²).

• How volatile a fund is compared with that market index (Beta).

• How much of funds risk-adjusted return is created by a talented manager (Alpha)

LIMITATIONS OF THE STUDY

• The study is based on secondary data

• The analysis is based on one company

• The study is restricted to limit duration (3 months).

• Risk management is the wide topic and it’s difficult to analyze thoroughly with
in the short period

• This analysis is carried based on certain assumptions hence the analysis would be
biased

23
 34ANALYSIS AND INTERPRETATIONS

Reliance Growth Fund as on January 29, 2010

Investment objective

The primary investment objective of the Scheme is to achieve long-term growth of capital by
investment in equity and equity related securities through a research based investment approach.
However, it may be understood that the above is only indicative. The above pattern may be
altered by the Investment Manager in line with the Investment Objective.

Fund manager: Mr. Sunil B. Singhania

Volatility Measures:

Standard deviation 37.29

Sharp ratio 0.41

Beta 1

Dividend plan 54.1992

Growth plan 422.5226

PERFORMANCE
Since
6 months 1 Year 3 Years 5 Years
Inception

Growth Fund 19.61 107.28 14.26 30.09 29.69

BSE100 9.38 85.39 6.47 20.3 12.37

24
 Table No: 3.1.1

Inference:-

Fund performed very well when compared with Benchmark index (BSE SENSEX) since
inception.

Chart No: 3.1.1

TABLE : 3.1.2
MONTHLY RETURNS OF RELIANCE GROWTH FUND NAV FOR THE PEROID OF
APRIL 2005 – MARCH 2010

DATE NAV (Rs) DIVIDEND (Rs) RETURN (Fund)

31/03/2005 32.61 5
29/04/2005 33.66 1.05
31/05/2005 36.16 2.5
30/06/2005 36.75 0.59
31/07/2005 41.13 4.38
31/08/2005 45.72 4.59

25
30/09/2005 47.57 1.85
31/10/2006 42.94 -4.63
30/11/2005 47.74 4.8
30/12/2005 48.57 3 0.892840385
31/01/2006 52.01 3.44
28/02/2006 52.82 0.81
31/03/2006 48.31 7.5 -4.36800833
28/04/2006 55.34 7.03
31/05/2006 49.36 -5.98
30/06/2006 44.66 -4.7
31/07/2006 43.34 -1.32
31/08/2006 48.34 5
29/09/2006 52.55 4.21
31/10/2006 53.08 2.5 0.577573739
30/11/2006 55.1 2.02
29/12/2006 57.01 1.91
31/01/2007 59.12 2.11
28/02/2007 10.94 -48.18
31/03/2007 47.86 7.5 37.60555759
30/04/2007 50.8 2.94
31/05/2007 47.86 -2.94
29/06/2007 56.7 8.84
31/07/2007 59.77 3.07
31/08/2007 53.86 3.5 -5.851442195
28/09/2007 60.06 6.2
31/10/2007 69.89 9.83
30/11/2007 72.38 2.49
31/12/2007 81.43 9.05
31/01/2008 67.48 -13.95
29/02/2008 65.61 -1.87
31/03/2008 50.67 6.5 -14.84092974
30/04/2008 56.16 5.49
30/05/2008 53.7 -2.46
30/06/2008 45.18 -8.52
31/07/2008 48.2036 3.0236
31/08/2008 42.6755 -5.5281
30/09/2008 42.6755 0
31/10/2008 33.1429 -9.5326
28/11/2008 30.471 -2.6719
31/12/2008 32.8738 2.4028
30/01/2009 30.7907 -2.0831
27/02/2009 29.4795 -1.3112
31/03/2009 29.3961 2 -0.015556244
29/04/2009 34.4708 5.0747
29/05/2009 46.1747 11.7039

26
 30/06/2009 46.2197 0.045
31/07/2009 49.8809 3.6612
31/08/2009 51.9222 2.0413
30/09/2009 55.8195 3.8973
30/10/2009 53.4006 5 -2.329325568
30/11/2009 51.9876 -1.413
31/12/2009 54.8143 2.8267
29/01/2010 53.1127 -1.7016
26/02/2010 53.0201 0.8 -0.077537689
11/3/2010 55.4667 2.4466

Monthly Mean Return 0.402079532

Annualized Monthly Return 24.12477195
Inference:-

It is inferred from the above table that Reliance Growth Funhas given annualised return
of 24.12% for the Period of April 2005 to March 2010.

CHART: 3.1.2

MONTHLY RETURNS OF RELIANCE GROWTH FUND FOR THE PERIOD OF

APRIL 2005 – FEBURARY 2009

Reliance Vision Fund as on January 29, 2010

Investment Objective:
The primary investment objective of the Scheme is to achieve long-term growth of capital
by investment in equity and equity related securities through a research based investment
approach.
Fund Manager: Mr. Ashwani Kumar

Volatility Measures:

27
 Standard deviation 37.29

Sharp 0.41
Beta 1

Dividend Plan 41.4501

Growth Plan 239.5465

PERFORMANCE

Since
6 months 1 Year 3 Years 5 years
Inception
Equity Opportunities
30.5 86.65 8.72 23.82 24.81
Fund
BSE100 9.38 85.39 6.47 20.3 12.37

Table No: 3.1.3

Inference:-

Fund performed very well when compared with Benchmark index (BSE SENSEX) since
inception.

CHART NO: 3.1.3

28
 TABLE: 3.1.4

MONTHLY RETURNS OF RELIANCE VISION FUND NAV FOR THE PEROID OF

APRIL 2005 – MARCH 2010
DATE NAV (Rs) DIVIDEND (Rs) RETURN (Fund)
31/03/2005 33.2 5
29/04/2005 33 -0.2
31/05/2005 35.12 2.12
30/06/2005 35.06 -0.06
31/07/2005 38.22 3.16
31/08/2005 40.16 1.94
30/09/2005 43.78 3.62
31/10/2005 40.35 -3.43
30/11/2005 45.24 4.89
30/12/2005 45.25 3 0.076312997
31/01/2006 47.89 2.64
28/02/2006 50.03 2.14
31/03/2006 48.31 7.5 -1.570089946
28/04/2006 51.38 3.07
31/05/2006 44 -7.38
30/06/2006 42.7 -1.3
31/07/2006 43.08 0.38
31/08/2006 46.34 3.26
29/09/2006 49.81 3.47
31/10/2006 50.99 2 1.22015258
30/11/2006 52.13 1.14
29/12/2006 54.74 2.61
31/01/2007 47.01 8 -7.583854585
28/02/2007 43.76 -3.25
31/03/2007 43.31 -0.45
30/04/2007 46.91 3.6
31/05/2007 43.31 -3.6
29
 29/06/2007 52.92 9.61
31/07/2007 55.96 3.04
31/08/2007 54.7 -1.26
28/09/2007 60.06 5.36
31/10/2007 65.49 3 5.47995005
30/11/2007 64.55 -0.94
31/12/2007 70.21 5.66
31/01/2008 60.16 -10.05
29/02/2008 58.7 -1.46
31/03/2008 43.06 7 -15.52074957
30/04/2008 46.26 3.2
30/05/2008 44.25 -2.01
30/06/2008 35.94 -8.31
31/07/2008 38.5091 2.5691
31/08/2008 35.0355 -3.4736
30/09/2008 35.0355 0
31/10/2008 27.9335 -7.102
28/11/2008 26.9556 -0.9779
31/12/2008 28.942 1.9864
30/01/2009 27.3057 -1.6363
27/02/2009 26.0832 -1.2225
31/03/2009 25.9406 2 -0.065922292
29/04/2009 29.2417 3.3011
29/05/2009 38.4738 9.2321
30/06/2009 38.0466 -0.4272
31/07/2009 41.3579 3.3113
31/08/2009 41.7586 0.4007
30/09/2009 46.1048 4.3462
30/10/2009 43.4097 -2.6951
30/11/2009 41.3967 9 -1.805673066
31/12/2009 43.5886 2.1919
29/01/2010 41.3658 -2.2228
26/02/2010 41.4501 1.02 0.108958051
11/3/2010 42.9 1.4499

Monthly Mean Return 0.176339737

Annualized Monthly Return 10.58038421

Inference:-

It is inferred from the above table that Reliance Growth Funhas given annualised return
of 10.58% for the Period of April 2005 to March 2010.

CHART: 3.1.4
30
 MONTHLY RETURNS OF RELIANCE VISION FUND FOR THE PERIOD OF APRIL
2005 – FEBURARY 2009

Reliance Banking Fund as on January 29, 2010

Investment Objective:

The primary investment objective of the scheme is to generate continuous returns by

actively investing in equity and equity related or fixed income securities of Banks.

Fund Manager - Mr. Sunil Singhania

Volatility Measures:

Standard deviation 38.78

Sharp 0.67

Beta 1.03

Dividend Plan 29.4033

Growth Plan 73.6623

PERFORMANCE

Since
6 months 1 Year 3 Years 5 years
Inception

Banking Fund 20.4 98.27 23.39 25.1 34.69

S&P CNX Bank
Index 18.17 95.62 12.94 21.05 29.2

Table No: 3.1.5

31
Inference:-

Fund performed very well when compared with S&P CNX Bank Index since inception.

Chart: 3.1.5

TABLE : 3.1.6

MONTHLY RETURNS OF RELIANCE BANKING FUND NAV FOR THE PEROID OF

APRIL 2005 – MARCH 2010
DATE NAV (Rs) DIVIDEND (Rs) RETURN (Fund)
31/03/2005 20.34 3
29/04/2005 19.03 -1.31
31/05/2005 20.31 1.28
30/06/2005 20.99 0.68
31/07/2005 24.61 3.62
31/08/2005 24.48 -0.13

32
30/09/2005 26.71 2.23
31/10/2006 23.32 -3.39
30/11/2005 24.59 1.27
30/12/2005 21.35 4 -3.077332249
31/01/2006 21.35 0
28/02/2006 20.84 -0.51
31/03/2006 16.32 -4.52
28/04/2006 15.82 -0.5
31/05/2006 15.2 -0.62
30/06/2006 13.09 -2.11
31/07/2006 14.38 1.29
31/08/2006 13.07 -1.31
29/09/2006 18.13 5.06
31/10/2006 18.69 0.56
30/11/2006 19.7 1.01
29/12/2006 19.36 -0.34
31/01/2007 20.3 0.94
28/02/2007 16.45 2 -3.751477833
31/03/2007 16.63 0.18
30/04/2007 17.76 1.13
31/05/2007 16.63 -1.13
29/06/2007 21.25 4.62
31/07/2007 22.78 1.53
31/08/2007 22.64 -0.14
28/09/2007 25.74 3.1
31/10/2007 26.58 0.84
30/11/2007 26.45 2 -0.054755455
31/12/2007 28.52 2.07
31/01/2008 27.32 -1.2
29/02/2008 26.45 -0.87
31/03/2008 22.18 -4.27
30/04/2008 24.64 2.46
30/05/2008 22.3 -2.34
30/06/2008 18.11 -4.19
31/07/2008 20.4732 2.3632
31/08/2008 20.1403 -0.3329
30/09/2008 20.1403 0
31/10/2008 16.1242 -4.0161
28/11/2008 15.8557 -0.2685
33
 31/12/2008 17.7356 1.8799
30/01/2009 16.2437 -1.4919
27/02/2009 14.3839 -1.8598
31/03/2009 15.4691 1.0852
29/04/2009 18.8265 3.3574
29/05/2009 26.1508 7.3243
30/06/2009 25.992 -0.1588
31/07/2009 27.099 1.107
31/08/2009 25.2564 2 -1.768796539
30/09/2009 29.1262 3.8698
30/10/2009 28.6996 -0.4266
30/11/2009 30.3555 1.6559
31/12/2009 30.0596 -0.2959
29/01/2010 29.356 -0.7036
26/02/2010 29.4033 1.69 0.104869151
11/3/2010 30.8514 1.4481

Monthly Mean Return 0.182986785

Annualized Monthly Return 10.97920708

Inference:-

It is inferred from the above table that Reliance Growth Funhas given annualised return
of 10.58% for the Period of April 2005 to March 2010.

CHART: 3.1.6

MONTHLY RETURNS OF RELIANCE BANKING FUND FOR THE PEROID OF

APRIL 2005 – MARCH 2010

Reliance Pharma Fund as on January 29, 2010

Investment Objective:-

34
 The primary investment objective of the scheme is to seek to generate consistent returns
by investing in equity and equity related or fixed income securities of Pharma and other
associated companies.

Fund Manager - Mr. Sailesh Raj Bhan

Volatility Measures:

Standard deviation 36.28

Sharp 0.72

Beta 1.06

Dividend Plan 32.2923

Growth Plan 43.3026

PERFORMANCE

Since
6 months 1 Year 3 Years 5 years
Inception
Pharma fund 50.54 139.51 27.25 27.36 29.15
BSE-HC 25.83 74.71 7.67 12.22 14.26

Table: 3.1.7

Inference:-

Fund performed very well when compared with Benchmark index (BSE Health Care)
since inception.

35
 Chart: 3.1.7

TABLE: 3.1.8

RELIANCE PHARMA FUND NAV FOR THE PEROID OF APRIL 2005 – MARCH 2010

DATE NAV (Rs) DIVIDEND (Rs) RETURN (Fund)

31/03/2005 12.15
29/04/2005 11.86 -0.29
31/05/2005 12.97 1.11
30/06/2005 13.3 0.33
31/07/2005 14.61 1.31
31/08/2005 16 1.39
30/09/2005 15.69 -0.31
31/10/2006 14.02 -1.67
30/11/2005 16.19 2.17
30/12/2005 16.39 4 0.44706609
31/01/2006 17.46 1.07
28/02/2006 17.98 0.52
31/03/2006 18.79 0.81
28/04/2006 19.64 0.85
31/05/2006 16.589 -3.051
36
30/06/2006 14.9124 -1.6766
31/07/2006 14.8439 -0.0685
31/08/2006 17.3782 2.5343
29/09/2006 18.2849 0.9067
31/10/2006 18.5753 0.2904
30/11/2006 18.8251 0.2498
29/12/2006 19.1398 0.3147
31/01/2007 19.8327 0.6929
28/02/2007 16.9229 1.5 -2.834167333
31/03/2007 17.0994 0.1765
30/04/2007 18.7051 1.6057
31/05/2007 17.0994 -1.6057
29/06/2007 22.002 4.9026
31/07/2007 22.7237 0.7217
31/08/2007 21.4995 -1.2242
28/09/2007 21.7865 0.287
31/10/2007 23.0309 1.2444
30/11/2007 21.752 -1.2789
31/12/2007 26.416 4.664
31/01/2008 19.6858 -6.7302
29/02/2008 20.7242 1.0384
31/03/2008 17.3621 1.5 -3.289720849
30/04/2008 19.326 1.9639
30/05/2008 18.9237 -0.4023
30/06/2008 17.575 -1.3487
31/07/2008 18.4276 0.8526
31/08/2008 17.6943 -0.7333
30/09/2008 17.6943 0
31/10/2008 14.1642 -3.5301
28/11/2008 14.0845 -0.0797
31/12/2008 15.9388 1.8543
30/01/2009 14.1402 -1.7986
27/02/2009 13.8812 -0.259
31/03/2009 15.204 1.3228
29/04/2009 15.8915 0.6875
29/05/2009 20.0278 4.1363
30/06/2009 20.1635 0.1357
31/07/2009 22.6739 2.5104
31/08/2009 23.9825 1.5 1.374755359
30/09/2009 26.7942 2.8117
30/10/2009 26.7706 -0.0236
30/11/2009 29.2269 2.4563
31/12/2009 32.784 3.5571
37
 29/01/2010 31.633 -1.151
26/02/2010 32.2923 0.97 0.68996418
11/3/2010 33.9615 1.6692

Monthly Mean Return 0.371723291

Annualized Monthly Return 22.30339745

Inference:-

It is inferred from the above table that Reliance Growth Funhas given annualised return
of 22.30% for the Period of April 2005 to March 2010.

CHART: 3.1.8

MONTHLY RETURNS OF RELIANCE PHARMA FUND FOR THE PEROID OF

APRIL 2005 – MARCH 2010

Reliance Diversified Sector Fund as on January 29, 2010

Investment Objective –

The primary investment objective of the scheme is to seek to generate continuous return
by actively investing in equity and equity related or fixed income securities of Power and other
associated companies Securitized debt up to 100% of the corpus. The scheme may have an
exposure of up to 90% of its net assets in foreign securities.
However, it may be understood that the above is only indicative. The above pattern may be
altered by the Investment Manager in line with the Investment Objective.
Fund Manager - Mr. Sunil Singhania

Volatility Measures:

Standard deviation 38.78

Sharp 0.67

Beta 1.03

38
Dividend Plan 46.4634

Growth Plan 74.7162

PERFORMANCE

Since
6 months 1 Year 3 Years 5 years
Inception
Diversified Power
Fund 12.65 94.24 26.33 43.47 42.12
S&P CNX Bank
Index 4.99 53.19 14.43 24.84 22.84
Table: 3.1.9

Inference:-

Fund performed very well when compared with S&P CNX Bank Inception since
inception.

Chart: 3.1.9

39
 TABLE:3.1.10

RELIANCE DIVERSIFIED SECTOR FUND NAV FOR THE PEROID OF APRIL 2005 –
MARCH 2010
DATE NAV (Rs) DIVIDEND (Rs) RETURN (Fund)
31/03/2005 14.31
29/04/2005 14.47 0.16
31/05/2005 15.23 0.76
30/06/2005 15.58 0.35
31/07/2005 17.85 2.27
31/08/2005 19.43 1.58
30/09/2005 20.61 1.18
31/10/2006 18.96 -1.65
30/11/2005 21.59 2.63
30/12/2005 18.99 4 -2.414729041
31/01/2006 20.83 1.84
28/02/2006 21.91 1.08
31/03/2006 24.87 2.96
28/04/2006 24.99 0.12
31/05/2006 21.7975 -3.1925
30/06/2006 20.0308 -1.7667
31/07/2006 20.4674 0.4366
31/08/2006 22.433 1.9656
29/09/2006 24.5436 2.1106
31/10/2006 26.4324 1.8888
30/11/2006 29.8653 3.4329
29/12/2006 30.1741 0.3088
31/01/2007 30.5996 0.4255
28/02/2007 26.4092 2.5 -4.108699586
31/03/2007 26.0804 -0.3288
30/04/2007 28.7362 2.6558
31/05/2007 26.0804 -2.6558
29/06/2007 33.2504 7.17
31/07/2007 36.3598 3.1094
31/08/2007 34.1088 3 -2.168491295
28/09/2007 38.7219 4.6131
31/10/2007 50.5208 11.7989
30/11/2007 52.466 1.9452
31/12/2007 56.8144 4.3484
31/01/2008 50.4632 -6.3512
29/02/2008 48.8515 -1.6117
31/03/2008 42.1742 1.5 -6.646594699
40
 30/04/2008 44.9972 2.823
30/05/2008 42.0708 -2.9264
30/06/2008 35.2083 -6.8625
31/07/2008 38.2306 3.0223
31/08/2008 34.348 -3.8826
30/09/2008 34.348 0
31/10/2008 26.5329 -7.8151
28/11/2008 24.9402 -1.5927
31/12/2008 27.227 2.2868
30/01/2009 26.3476 -0.8794
27/02/2009 25.3458 -1.0018
31/03/2009 25.1115 2 -0.155391463
29/04/2009 29.074 3.9625
29/05/2009 38.8966 9.8226
30/06/2009 39.4656 0.569
31/07/2009 41.9618 2.4962
31/08/2009 43.4897 1.5279
30/09/2009 46.375 2.8853
30/10/2009 45.0982 -1.2768
30/11/2009 47.0848 1.9866
31/12/2009 48.8749 1.7901
29/01/2010 46.7287 -2.1462
26/02/2010 46.4634 0.78 -0.248607903
11/3/2010 48.37 1.9066

Monthly Mean Return 0.575596434

Annualized Monthly Return 34.53578601
Inference:-

It is inferred from the above table that Reliance Growth Funhas given annualised return
of 34.54% for the Period of April 2005 to March 2010.

CHART:3.1.10

MONTHLY RETURN OF RELIANCE DIVERSIFIED SECTOR FUND NAV FOR THE

PEROID OF APRIL 2005 – MARCH 2010

TABLE: 3.1.11

41
 ANALYSIS OF RELATIONSHIP BETWEEN RISK AND RETURN – FROM APRIL
2005 TO FEBURARY 2010

ANNUALISED
ANNUALISED
SCHEMES PERIOD STANDARD SHARP RATIO
RETURN
DEVIATION
RELIANCE GROWTH 24.12%
60months 37.29% 0.41
FUND

RELIANCE VISION FUND 60months 10.58% 37.29% 0.41

RELIANCE BANKING 11%

60months 38.78% 0.67
FUND

RELIANCE PHARMA 22.3%

60months 36.28% 0.72
FUND

RELIANCE
DIVERSIFIED SECTOR 60months 34.54% 38.78% 0.67
FUND

INTERFERENCE:-

Reliance Pharma Fund has the highest Sharp ratio and hence it is the best among the
funds taken for analysis for the period April 2005 to March 2010 and Reliance Growth Fund is
the most conservative fund chosen for analysis for the period April 2005 to March 2010.

CHART: 3.1.11

ANNUALISED RETURN FROM APRIL 2005 – FEBURARY 2010

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 RISK FOR PERIOD APRIL 2005 – MARCH 2009

Chart: 3.1.12

Chart: 3.1.13

TABLE: 3.1.12

ANALYSIS OF RELATIONSHIP BETWEEN RISK AND RETURN – FROM APRIL

2007 TO MARCH 2010

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 ANNUALISED
ANNUALISED
SCHEMES PERIOD STANDARD SHARP RATIO
RETURN
DEVIATION
RELIANCE
36months 14.472% 22.374% 0.246
GROWTH FUND

RELIANCE
36months 6.348% 22.374% 0.246
VISION FUND

RELIANCE
36months 6.6% 23.268% 0.402
BANKING FUND

RELIANCE
36months 13.38% 21.768% 0.432
PHARMA FUND

RELIANCE
DIVERSIFIED 36months 20.724% 23.268% 0.402
SECTOR FUND

INTERFRENCE:-

Reliance Pharma Fund has the highest Sharp ratio and hence it is the best among the
funds taken for analysis for the period April 2007 to March 2010 and Reliance Growth Fund is
the most conservative fund chosen for analysis for the period April 2007 to March 2010.

FINDINGS FROM THE STUDY

➢ Reliance Diversified Sector has given the maximum return for the period April 2005 to
March 2010.

➢ Reliance Vision fund has given the minimun return for the period April 2005 to March
2010.

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➢ Reliance Growth Fund has been associated with maximum risk during the period April
2005 to March 2010.

➢ Reliance Pharma Fund has been associated with minimum risk during the period April
2005 to March 2010.

➢ In terms of risk adjusted returns Relaince Diversified Sector is the best for the period of
April 2005 to March 2010.

➢ In terms of risk adjusted returns Relaince Vision Fund is the wrost for the period of April
2005 to March 2010.

SUGGESTION AND RECOMMENDATION

➢ For the investors looking for the least risky fund, Relaince Pharma Fund is the right fund
as the associated with the fund is minimum.

➢ For investor looking for high return funds, Reliance Diversified Sector Fund is the right
fund as it has given the maximum returns during the period of April 2005 to March 2010.

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 ➢ For investors who are looking for funds with highest Risk Adjust Return, Reliance
Growth fund is the right fund

CONCLUSION

Reliance mutual fund is one of the largest Asset Management Company in the country. It
manages more than 48 equity schemes and overall and more than 55 schemes for domestic as
well as international investors. The total assets managed by Reliance Mutual Fund as on
September 30, 2009 are Rs. 929.79 Crore.

The total investors’ accounts handled by Reliance Mutual Fund are more than 8 million.
For the benefit of the existing investors and for the new investors the study would of great help.
The existing investor can check whether their investment is with the right funds, whether the risk
associated with the funds are acceptable for them. And for the new investors, the study would
help them in identifying the right funds as per their return expectation and risk appetite.

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 The analysis suggest that Reliance Growth fund is the most conservative fund among the
diversified equity Funds and Reliance Diversified Sector Fund is the best among the equity
funds managed by Reliance Mutual fund in terms of Risk Adjusted Returns.

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