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OF MUTUAL FUNDS
MUTUAL FUND OPERATION
FLOW CHART
TYPES OF MUTUAL FUNDS
SCHEMES
According to Maturity Period
Open Ended
Close Ended
Balanced Scheme
INSTRUMENTS OF
INVESTMENT
EQUITY
CONVERTIBLE DEBENTURES
BETA
ALPHA
STANDARD DEVIATION
BETA
A Beta is a measure of risk. It compares a
mutual fund’s volatility with that of a
benchmark. If the beta of the stock is 1, it
means that the returns in the stock are highly
correlated to the benchmark index.
If Beta is greater than 1, it means the stock is
more volatile.
If Beta is less than 1, than the stock is less
volatile.
COMPARATIVE ANALYSIS
(BETA)
LARGE CAP FUND
0.96
0.94
0.92
0.9
0.88 BETA
0.86
0.84
Franklin HDFC PRU ICICI Reliance
India TOP 200 Growth Vision
Bluechip
MID CAP FUND
1
0.98
0.96
0.94
0.92
0.9
BETA
0.88
0.86
0.84
Franklin HDFC Reliance
Prima Capital Growth
Builder
ALPHA
Alpha is a financial term describing that part
of an investor’s return that is due to the skills
of the investment manager, as distinct from the
return of the market as a whole.
• αi < rf: the manager or firm has destroyed
value
• αi = rf: the manager or firm has neither created
nor destroyed value
• αi > rf: the manager or firm has created value
LARGE CAP FUNDS
5
4.5
4
3.5
3
2.5
2
ALPHA
1.5
1
0.5
0
Franklin HDFC PRU ICICI Reliance
India TOP 200 Growth Vision
Bluechip
MID CAP FUNDS
6
5
4
3
2
1
ALPHA
0
-1
-2
-3
Franklin HDFC Reliance
Prima Capital Growth
Builder
STANDARD DEVIATION
The total risk of a given fund is
measured in terms of standard
deviation.
It tells us how much the values have
29
28
27 STANDARD
DEVIATION
26
25
24
23
22
Franklin HDFC Reliance
Prima Capital Growth
Builder
FINDINGS
ICICI PRU--
-This fund has an aggressive stock-picking style, but
with a careful eye on risk control.
-The fund has a great exposure to banking and
software sector stocks.
FRANKLIN TEMPLETON—