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Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989 and
contributed Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was
constituted as a Trust in accordance with the provisions of the Indian Trust Act, 1882.
The settler is not responsible for the management of the Trust. The settler is also not
responsible or liable for any loss or shortfall resulting in any of the schemes of LIC
Mutual Fund.

The Trustees of the LIC Mutual Fund have exclusive ownership of Trust Fund and are
vested with general power of superintendence, discretion and management of the
affairs of the Trust. LIC Mutual Fund Asset Management Company Ltd. was formed
on 20th April 1994 in compliance with the Securities and Exchange Board of India
(Mutual Funds) Regulations, 1993. The Company commenced business on 29th April
1994. The Trustees of LIC Mutual Fund have appointed LIC Mutual Fund Asset
Management Company Ltd. as the Investment Managers for LIC Mutual Fund. The
Trustees are responsible for appointing a Custodian. The Trustees should also ensure
that the activities of the Trust and the Asset Management Company are in accordance
with the Trust Deed and the SEBI Mutual Fund Regulations as amended from time to
time. The Trustees have also to report periodically to SEBI on the functioning of the

The investors under the schemes can obtain a copy of the Trust Deed, the text of the
concerned Scheme and also a copy of the Annual Report, on a written request made to
the LIC Mutual Fund Asset Management Company Ltd. at a nominal price of Rs. 10/-

Asset under Management

LIC Mutual Fund 4239269.03



SHRI P. N. MEHTA (Independent Director)

SHRI P. N. SHAH (Independent Director)

SHRI V.G. SUBRAMANIAN (Independent Director)

SHRI M. RAGHAVENDRA (Independent Director)



SHRI T. S. VIJAYAN (Chairman)

SHRI C. R. THAKORE (Independent Director)

SHRI C. R. THAKORE (Independent Director)

SHRI R. R. NAIR (Director)

SHRI T. S. VISHWANATH (Independent Director)

SHRI H. N. MOTIWALLA (Independent Director)

SHRI SUSHOBHAN SARKER (Director & Chief Executive)


A mutual fund is a managed group of owned securities of several corporations.

These corporations receive dividends on the shares that they hold and realize
capital gains or losses on their securities traded. Investors purchase shares in the
mutual fund as if it was an individual security. After paying operating costs, the
earnings (dividends, capital gains or losses) of the mutual fund are distributed to
the investors, in proportion to the amount of money invested. Investors hope
that a loss on one holding will be made up by a gain on another. Heeding the
adage "Don't put all your eggs in one basket" the holders of mutual fund shares
are able collectively to gain the advantage by diversifying their investments,
which might be beyond their financial means individually.

A mutual fund may be either an open-end or a closed-end fund. An open-end

mutual fund does not have a set number of shares; it may be considered as a
fluid capital stock. The number of shares changes as investors buys or sell their
shares. Investors are able to buy and sell their shares of the company at any time
for a market price. However the open-end market price is influenced greatly by
the fund managers. On the other hand, closed-end mutual fund has a fixed
number of shares and the value of the shares fluctuates with the market. But
with close-end funds, the fund manager has less influence because the price of
the underlining owned securities has greater influence.
Assets Under Management (AUM) as at the end of SEP-2009 (Rs in
Sr. Mutual Fund Name Average AUM For The Month
Excluding Fund Fund Of Funds -
of Domestic
Funds - Domestic
including Fund of
Funds - Overseas

1 AIG Global Investment Group Mutual Fund 170215.52 0

2 Axis Mutual Fund N/A N/A

3 Baroda Pioneer Mutual Fund 448650.77 0

4 Benchmark Mutual Fund 136960.19 0

5 Bharti AXA Mutual Fund 33980.51 0

6 Birla Sun Life Mutual Fund 6305586.60 1884.85

7 Canara Robeco Mutual Fund 760332.46 0

8 DBS Chola Mutual Fund 265116.25 0

9 Deutsche Mutual Fund 1386223.86 0

10 DSP BlackRock Mutual Fund 1758731.91 0

11 Edelweiss Mutual Fund 11361.97 0

12 Escorts Mutual Fund 20267.96 0

13 Fidelity Mutual Fund 919197.57 5396.85

14 Fortis Mutual Fund 949706.49 8675.79

15 Franklin Templeton Mutual Fund 2844923.98 28374.96

16 Goldman Sachs Mutual Fund N/A N/A

17 HDFC Mutual Fund 9042726.31 0

18 HSBC Mutual Fund 750255.91 0

19 ICICI Prudential Mutual Fund 8011957.45 2942.87

20 IDFC Mutual Fund 2379293.84 1235.47

21 ING Mutual Fund 196028.47 17709.72

22 JM Financial Mutual Fund 877658.27 0

23 JPMorgan Mutual Fund 454577.99 0

24 Kotak Mahindra Mutual Fund 3624694.55 12653.74

25 LIC Mutual Fund 4239269.03 0

26 Mirae Asset Mutual Fund 25158.56 0

27 Morgan Stanley Mutual Fund 231102.37 0

28 PRINCIPAL Mutual Fund 888198.32 0

29 Quantum Mutual Fund 7724.42 77.26

30 Reliance Mutual Fund 11825143.66 0

31 Religare AEGON Mutual Fund N/A N/A

32 Religare Mutual Fund 1385415.09 0

33 Sahara Mutual Fund 22195.82 0

34 SBI Mutual Fund 3487344.70 0

35 Shinsei Mutual Fund 21980.89 0

36 Sundaram BNP Paribas Mutual Fund 1330356.94 0

37 Tata Mutual Fund 2020715.56 0

38 Taurus Mutual Fund 100033.14 0

39 UTI Mutual Fund 7358879.67 0

Grand Total 74291967 78951.51

Review of literature
History of Mutual Funds

History of Mutual Funds has evolved over the years and it is sure to appear as
something very interesting for all the investors of the world. In present world, mutual
funds have become a main form of investment because of its diversified and liquid
features. Not only in the developed world, but in the developing countries also
different types of mutual funds are gaining popularity very fast in a tremendous way.
But, there was a time when the concept of Mutual Funds was not present in the
There is an ambiguity about the fact that when and where the Mutual Fund Concept
was introduced for the first time. According to some historians, the mutual funds were
first introduced in Netherlands in 1822. But according to some other belief, the idea
of Mutual Fund first came from a Dutch Merchant ling back in 1774. In 1822, that
idea was further developed. In 1822, the concept of Investment Diversification was
properly incorporated in the mutual funds. In fact, the Investment Diversification is
the main attraction of mutual funds as the small investors are also able to allocate
their little Funds in a diversified way to lower Risks.
After 1822 in Netherlands, the Mutual Funds Concept came in Switzerland in 1849
and thereafter in Scotland in the 1880s. After being popular in Great Britain and
France, Mutual fund concept travelled to U.S.A in the 1890s. In 1920s and 1930s, the
Mutual Fund popularity reached a new high. There was record investment done in
mutual funds. But, before 1920s, the mutual funds were not like the modern day
mutual funds.
The modern day mutual funds came into existence in 1924, in Boston. Massachusetts
Investors Trust introduced the Modern Mutual Funds and the funds were available
from 1928. At present this Massachusetts Investors Trust is known as MFS
Investment Management Company. After the glorious year of 1928, Mutual fund
ideas expanded to different levels and different regulations came for well functioning
of the funds.
Still today, the funds are evolving and improving in order to offer people much wider
choices and better advantages for fulfilment of their various investment needs and
financial objectives.
Growth of Mutual Funds

Growth of Mutual Funds has been gradual and it took really long years to evolve the
modern day mutual funds. Mutual Funds emerged for the first time in Netherlands in
the 18th century. Then it got introduced to Switzerland, then Scotland and then to
United States in the 19th century.

The very idea of mutual funds came from the urge to deliver a form of Diversified
Investment Solution. Over the years the idea developed and people received more and
more choices of Diversified Investment Portfolio through the mutual funds.

When in 1924, Massachusetts Investors Trust first introduced mutual funds in U.S,
they found it difficult to gain the trust of the investors. It was very natural that the
people took time to adapt to a new investment idea. There emerged some confusion
regarding the Taxation of Investment Income from mutual funds as there was no
Regulation or legislation.

Laws started to came in existence from 1940s. The result was not immediate. The
Mutual Fund Concept achieved warm reception only in the middle of 1950s. By the
end of fifties and in first half of 1960s mutual fund investment triggered up

Monetary Fund’s benefited a lot from the mutual funds. Earlier investors was used to
invest directly in the stock market and many times suffered from loss due to wrong
Speculation. But, with the mutual funds which were handled by efficient Fund
Managers, Investment Risks was lowered by a great extent. The diversified
investment structure of mutual funds also diversified risk and this contributed
tremendously in the Growth of Mutual Funds.

Over the years not only the new types of mutual funds emerged, the way, in which
mutual funds were sold also changed. But, the Growth of Mutual Funds has not
stopped. It is continuing to evolve to a better future, where investors will get newer

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 (6 by banks and one each by
LIC and GIC). 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(31st march) 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 (SEBI) came out with comprehensive
regulation in 1993 which defined the structure of 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.

Working of Mutual Fund

Types of
Mutual Funds

By By Other
Structure Investment Schemes
Ended Tax
Schemes Growth Saving
Schemes Schemes
Close (ELSS)
Schemes Income Special
Schemes Schemes
Schemes Balanced Index
Schemes Scheme
Money Specific
Market Scheme
Schemes s


Open ended Mutual Funds

It is a type of mutual fund where there are no restrictions on the amount of shares the fund
will issue. If demand is high enough, the fund will continue to issue shares no matter how
many investors there are. Open-end funds also buy back shares when investors wish to sell.
Most of the mutual funds available in the marketplace are open-end funds. Open-end funds
are generally managed actively and are priced according to their net asset value (NAV).
Open-end funds are wide-ranging. Some Open-end funds are more conservative and provide
consistent returns with low risk, and some are more aggressive in seeking to make capital
gains through constant trading.

Close ended Mutual Funds

When an investment company issues a fixed number of shares in an actively managed
portfolio of securities, it is referred to as close ended mutual funds. The shares are traded in
the market just like common stock. The main difference with closed-end funds is that market
price of the shares is determined by supply and demand and not by net-asset value (NAV).Its
stipulated maturity period ranges from 3 to 15 years.

Interval Schemes
It is a fund that combines the features of open-ended and closed-ended schemes, making the
fund open for sale or redemption during pre-determined intervals. In other words, this is a
mutual fund with redemption features in between those of closed-end and open-end funds.

Growth Schemes

It is a diversified portfolio of stocks that has capital appreciation as its primary goal, and it
thereby invests in companies that reinvest their earnings into expansion, acquisitions, and/or
research and development. Most growth funds offer higher potential growth but usually at a
higher risk.

Income Schemes
This scheme seeks to provide stable current income by investing in securities that pay interest.
Income funds typically invest in utility stocks and blue chips.
Balanced Scheme
It is a type of mutual fund that invests its assets into the money market, bonds, preferred
stock, and common stock with the intention to provide both growth and income. A balanced
fund is geared towards investors looking for a mixture of safety, income, and capital
appreciation. The amount the mutual fund invests into each asset class usually must remain
within a set minimum and maximum. It is also known as “Asset Allocation Fund”.

Money Market Schemes

Money Market Schemes aim to provide easy liquidity, preservation of capital and moderate
income. These schemes generally invest in safer, short-term instruments, such as treasury
bills, certificates of deposit, commercial paper and inter-bank call money.

Tax Saving Schemes

Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from time to
time. Under Sec.88 of the Income Tax Act, contributions made to any Equity Linked Savings
Scheme (ELSS) are eligible for rebate @20% to a maximum of Rs10, 000 per financial year.

Index Schemes
It is a portfolio of investments that is weighted the same as a stock-exchange index in order to
mirror its performance. This process is also referred to as "indexing". Investing in an index
fund is a form of passive investing. The primary advantage to such a strategy is the lower
management expense ratio on an index fund. Also, a majority of mutual funds fail to beat
broad indexes such as the S&P 500.

Sector Specific Schemes

It is an investment fund that makes investments solely in businesses that operates in
a particular industry or sector of the economy. Since the holdings of this type of fund are in
the same industry, there is an inherent lack of diversification by sector associated with these
funds. These funds tend to increase substantially in price when there is an increased demand
for the product or service offering provided by the businesses in which the funds invest. On
the other hand, if there is a downturn in the specific sector in which a sector fund invests, the
fund will face heavy losses due to the lack of diversification in its holdings.


To analyze performance of selected mutual funds on the basis of risk & return
• To guide the investor

The study is limited for selected equity diversified fund and sector fund

The analysis is made on secondary data

The analysis is for 3 years (sep. 07 to sep. 09)

Research Methodology

Secondary Data:

The Secondary data is the one which have been already collected by someone else &
which have already been passed through the statistical process. Internet, magazines,
books & company referrals were the sources of secondary data. Data which is not
originally collected, but rather obtained from published or unpublished sources are
known as secondary data. Secondary data is a means to reprocess and reuse collected
information as an indication for betterments of the service or product. In secondary
data, information relates to a past period. Secondary data is obtained from some other
organization than the one instantaneously interested with current research project.
Tools of study


The chance is that an investment's actual return will be different than expected. This
includes the possibility of losing some or all of the original investment. Risk is
usually measured by calculating the standard deviation of the historical returns or
average returns of a specific investment.

Risk is defined as the chance that an investment's actual return will be different than
expected. This includes the possibility of losing some or all of the original investment.

Those of us who work hard for every penny we earn have a harder time parting with
money. Therefore, people with less disposable income tend to be, by necessity, more
risk averse. On the other end of the spectrum, day traders feel if they aren't making
dozens of trades a day there is a problem. These people are risk lovers.

When investing in stocks, bonds, or any investment instrument, there is a lot more
risk than you'd think. In the next section, we'll take a look at the different kind of risk
that often threatens investors' returns.
Different Types of Risk

Let's take a look at the two basic types of risk:

Systematic Risk

Systematic risk influences a large number of assets. A significant political event, for
example, could affect several of the assets in your portfolio. It is virtually impossible
to protect yourself against this type of risk.

Unsystematic Risk

Unsystematic risk is sometimes referred to as "specific risk". This kind of risk affects
a very small number of assets. An example is news that affects a specific stock such
as a sudden strike by employees. Diversification is the only way to protect yourself
from unsystematic risk. (We will discuss diversification later in this tutorial).

Now that we've determined the fundamental types of risk, let's look at more specific
types of risk, particularly when we talk about stocks and bonds.

Credit or Default Risk

Credit risk is the risk that a company or individual will be unable to pay the
contractual interest or principal on its debt obligations. This type of risk is of
particular concern to investors who hold bonds in their portfolios. Government bonds,
especially those issued by the federal government, have the least amount of default
risk and the lowest returns, while corporate bonds tend to have the highest amount of
default risk but also higher interest rates. Bonds with a lower chance of default are
considered to be investment grade, while bonds with higher chances are considered to
be junk bonds. Bond rating services, such as Moody's, allows investors to determine
which bonds are investment-grade, and which bonds are junk. (To read more, see
Junk Bonds: Everything You Need To Know, What Is A Corporate Credit Rating and
Corporate Bonds: An Introduction To Credit Risk.)

Country Risk

Country risk refers to the risk that a country won't be able to honour its financial
commitments. When a country defaults on its obligations, this can harm the
performance of all other financial instruments in that country as well as other
countries it has relations with. Country risk applies to stocks, bonds, mutual funds,
options and futures that are issued within a particular country. This type of risk is
most often seen in emerging markets or countries that have a severe deficit. (For
related reading, see What Is An Emerging Market Economy?)

Foreign-Exchange Risk

When investing in foreign countries you must consider the fact that currency
exchange rates can change the price of the asset as well. Foreign-exchange risk
applies to all financial instruments that are in a currency other than your domestic
currency. As an example, if you are a resident of America and invest in some
Canadian stock in Canadian dollars, even if the share value appreciates, you may lose
money if the Canadian dollar depreciates in relation to the American dollar.

Interest Rate Risk

Interest rate risk is the risk that an investment's value will change as a result of a
change in interest rates. This risk affects the value of bonds more directly than stocks.
(To learn more, read How Interest Rates Affect The Stock Market.)

Political Risk

Political risk represents the financial risk that a country's government will suddenly
change its policies. This is a major reason why developing countries lack foreign

Market Risk

This is the most familiar of all risks. Also referred to as volatility, market risk is
the the day-to-day fluctuations in a stock's price. Market risk applies mainly to stocks
and options. As a whole, stocks tend to perform well during a bull market and poorly
during a bear market - volatility is not so much a cause but an effect of certain market
forces. Volatility is a measure of risk because it refers to the behavior, or
"temperament", of your investment rather than the reason for this behaviour. Because
market movement is the reason why people can make money from stocks, volatility is
essential for returns, and the more unstable the investment the more chance there is
that it will experience a dramatic change in either direction.
The Risk-Return Trade-off

The risk-return trade-off is the balance an investor must decide on between the desires
for the lowest possible risk for the highest possible returns. Remember to keep in
mind that low levels of uncertainty (low risk) are associated with low potential returns
and high levels of uncertainty (high risk) are associated with high potential returns.

The risk-free rate of return is usually signified by the quoted yield of "U.S.
Government Securities" because the government very rarely defaults on loans. Let's
suppose that the risk-free rate is currently 6%. Therefore, for virtually no risk, an
investor can earn 6% per year on his or her money. But who wants 6% when index
funds are averaging 12-14.5% per year? Remember that index funds don't return
14.5% every year, instead they return -5% one year and 25% the next and so on. In
other words, in order to receive this higher return, investors much also take on
considerably more risk.

The following chart shows an example of the risk/return trade-off for investing. A
higher standard deviation means a higher risk:

Diversifying Your Portfolio

Standard Deviation

A measure of the dispersion of a set of data from its mean. The more spread apart the
data, the higher the deviation. Standard deviation is calculated as the square root of

In finance, standard deviation is applied to the annual rate of return of an investment

to measure the investment's volatility. Standard deviation is also known as historical
volatility and is used by investors as a gauge for the amount of expected volatility.

Sharpe Ratio

A ratio developed by Nobel laureate William F. Sharpe to measure risk-adjusted

performance. The Sharpe ratio is calculated by subtracting the risk-free rate - such
as that of the 10-year U.S. Treasury bond - from the rate of return for a portfolio and
dividing the result by the standard deviation of the portfolio returns.

The Sharpe ratio tells us whether a portfolio's returns are due to smart investment
decisions or a result of excess risk. This measurement is very useful because although
one portfolio or fund can reap higher returns than its peers, it is only a good
investment if those higher returns do not come with too much additional risk. The
greater a portfolio's Sharpe ratio, the better its risk-adjusted performance has been. A
negative Sharpe ratio indicates that a risk-less asset would perform better than the
security being analyzed.


A measure of the volatility, or systematic risk, of a security or a portfolio in

comparison to the market as a whole. Beta is used in the capital asset pricing model
(CAPM), a model that calculates the expected return of an asset based on its beta and
expected market returns.

Analysis of selected mutual funds



Equity Market Value (Rs. Qty Hold %


Housing Development Finance Corporation 6.33 25,000 6.11

Larsen and Toubro 6.25 41,487 6.04
NTPC 5.45 252,992 5.27
Jaiprakash Associates 5.42 224,999 5.24
Bharat Heavy Electricals 4.9 22,000 4.74
Reliance Industries 4.89 25,000 4.73
Steel Authority of India 4.39 250,003 4.24
State Bank of India 3.63 20,000 3.51
Reliance Industrial Infrastructure 3.53 34,538 3.41
Petronet LNG Ltd 3.49 500,501 3.38
Bharti Airtel 3.28 80,000 3.17
ICICI Bank 3.19 42,000 3.08
Tata Power Company 3.18 24,412 3.07
Kotak Mahindra Bank 2.94 45,001 2.84
GAIL India 2.88 86,832 2.78
Tata Communications 2.73 54,128 2.64
IFCI 2.56 500,000 2.48
Cairn India 2.36 100,000 2.28
Tata Motors 2.17 51,443 2.1
Ranbaxy Laboratories 2.1 75,002 2.03
Punjab National Bank 2.07 30,000 2
Oil and Natural Gas Corporation 2 17,152 1.93
Reliance Petroleum 1.82 150,000 1.76
Bank Of India 1.52 45,991 1.47
HDFC Bank 1.5 10,000 1.45
Siemens 1.45 30,001 1.4
Neyveli Lignite Corporation 1.37 100,000 1.33
Indian Oil Corporation 1.37 25,000 1.32
Idea Cellular 1.18 150,000 1.14
Power Grid Corporation of India 1.12 94,758 1.08
Sun Pharmaceutical Industries 1 8,500 0.96
Religare Enterprises 0.97 25,001 0.94
Maruti Suzuki India 0.91 6,430 0.88
PTC India 0.91 100,000 0.88
Balrampur Chini Mills 0.83 70,004 0.8
Axis Bank 0.73 8,000 0.71
Cipla 0.58 21,001 0.56
Provogue (India) 0.55 102,128 0.53
Vijaya Bank 0.44 100,000 0.42
Oriental Bank of Commerce 0.34 20,000 0.33
Reliance Communications 0.28 10,002 0.27
Union Bank of India 0.23 10,000 0.23
Bank Of Baroda 0.22 5,000 0.21
IDBI Bank 0.21 20,000 0.2
Indian Hotels Company 0.17 24,996 0.16
Parekh Aluminex 0.13 13,264 0.13
Cash n Call, Current Assets & Receivables 3.91 3.78
TOTAL ASSETS 103.48 100



Beta [%] SD [%] Sharpe Ratio [%]

0.8499 11.3396 0.0441

LIC Equity fund is having good allocation in various funds. The fund have 0.8499 %
of Beta means it is low risky. The standard deviation of fund is 11.33 means the
returns of the fund are volatile. The sharp ratio is 0.0441 means fund is having low
excess income.



of Net
Stock Assets

Other Equities 9.97

Reliance Infrastructure Ltd. 6.19
Reliance Industries Ltd. 4.98

Jindal Steel and Power Ltd. 4.89


Torrent Power Ltd 4.02

Tata Power Company Ltd 3.89

JaiPrakash Associates Ltd. 3.74

Oil & Natural Gas Corpn Ltd 3.64

State Bank of India 3.02


Scheme Return

Beta [%] SD [%] Sharpe Ratio [%]

0.75 4.66 -0.14

Reliance Diversified Power Fund is good in allocation with the beta of 0.75 means the

fund is low risky. The standard deviation is 4.66 means less volatile with index. The

sharpe ratio is -0.14 means the excess returns are also high.


Percentage of
Stock Net Assets


State Bank of India 13.89
HDFC Bank Ltd 9.63

Punjab National Bank 8.12

Axis Bank Ltd 7.2

Bank of Baroda 5.98

Bank Of India 5.05
Stock Holding
Corporation of India
Ltd 4.3
Union Bank Of India
Ltd 3.91

Federal Bank Ltd 3.67



Scheme Return

Beta [%] SD [%] Sharpe Ratio [%]

1.08 6.92 -0.03


UTI Thermatic Banking Fund is having the Beta of 1.08 which means the fund is
highly risky negatively correlated with index.

The standard deviation of the fund is 6.92 which show the return is less volatile with
the stock. The sharpe ratio is -0.03 means the fund is have high excess income.

Stock Percentage of Net Assets

State Bank of India 18.18
Bank of Baroda 9.18
Canara Bank Ltd. 8.18
Punjab National Bank 7.38
Corporation Bank 5.33
Andhra Bank 5.23
Oriental Bank of Commerce Ltd 3.95
Federal Bank Ltd 2.96
Kotak Mahindra Bank Ltd. 2.61


Scheme Return

Beta [%] SD [%] Sharpe Ratio [%]

0.99 6.37 -0.03

Reliance banking fund having good allocation in banking sector and financial
institutions. The beta of fund is 0.99 which shows the risk of the fund. The standard
deviation of the fund is 6.37 means the fund is less volatile with stock. the sharpe ratio
of the fund is -0.03 means the fund is have high excess income.

Following are the important findings of my study based on the analysis and
interpretation of the data collected.

1) The equity diversified funds are low risky but, they also have low returns as
compare to sectoral funds.

2) The sectoral funds are having high and high returns as compare to equity
diversified funds

The most vital problem spotted is of ignorance. Investors should be made aware of the
benefits. Nobody will invest until and unless he is fully convinced. Investors should
be made to realize that ignorance is no longer bliss and what they are losing by not

Mutual funds offer a lot of benefit which no other single option could offer. But most
of the people are not even aware of what actually a mutual fund is? They only see it as
just another investment option. So the advisors should try to change their mindsets.
The advisors should target for more and more young investors. Young investors as
well as persons at the height of their career would like to go for advisors due to lack
of expertise and time.


With the globalize economy and immense competition among countries for faster
development of their respective economies, the significance of Mutual Funds and
Foreign investment has taken manifold. With a buoyant vibrant and experienced stock
market, India today is looking ahead to surpass China in terms of foreign Investment
and growth prospects. Stock exchange being the barometer of the economy plays a
vital role in showcasing growth of an economy and luring investment. While studying
the role of Mutual fund and FIIs in Stock Market, I discussed with a few persons who
are into stock broking business. And the information they have provided shows that
though the investment and participation of domestic investors are rising, still, they
have not been able to prove themselves to be as influential as mutual funds and FIIs.
Importance and the role of Mutual funds and FIIs play in the Indian stock market can
be seen from the fact that the recent surge in Sensex and NIFTY is attributed to the
active participation of FIIs in the Stock Market. Despite being aware of the Asian
economic crisis where FIIs role was of a major concern, the importance of foreign
capital in the development of economy cannot be undermined in anyway so the
people more emphasis on mutual fund to earn more return increasing our benefit .


1. Books & Magazines:

 Fact Sheet and Offer Document of LIC Mutual Fund

 “Investing In Mutual Funds” – Mr. Ujjwal Marathe

 Mutual Funds Products and Services

 “Portfolio Management” – Mr. S. Kevin

2. Websites: