Description
Emmerging Market Of Mutual Funds In India With Special Reference To Kotak Mutual Fund.
INDEX
1. INTRODUCTION 2. RESEARCH OBJECTIVE 3. ORGANISATION OF A MUTUAL FUND 4. HISTORY OF MUTUAL FUND IN INDIA 5. MUTUAL FUND INVESTING 6. PRODUCT 7. ABOUT KOTAK MUTUL FUND 8. RESEARCH METHODOLOGY 9. DATA ANALYSIS 10. CONCLUSION AND RECOMMENDATION 11. QUESTIONS 12. BIBIOGRAPHY
5 6 7 8 13 15 20
37 46 47 52
INDEX OF ILLUSTRATUION
1
.Mutual fund Flow Chart
5 6 10 11 18 28 29 30 37 38 40 43
2. Organization of Mutual Fund 3. Growth in Asset under Management 4. Fund by nature 5. Broad mutual fund type 6. All type of mutual fund 7. SIP cycle 8. STP 9. Relative performance 10. Sector weightings of kotak 30 11. Trailing return of kotak 30 12. Asset allocation of kotak -30
INTRODUCTION
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 invested by the fund manager in different types of Securities depending upon the objective of the scheme. These could range from shares to debentures to money market instruments. The income earned through these investments and the capital appreciations realized by the scheme are shared by its unit holders in proportion to the number of units owned by them (pro rata). 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 portfolio at a relatively low cost. Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual Funds. Each Mutual Fund scheme has a defined investment objective and strategy.
CONCEPT OF MUTUL FUND
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 appreciation realized is 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. The flow chart below describes broadly the working of a mutual fund.
Mutual Fund Operation Flow Chart
ORGANISATION OF A MUTUAL FUND
There are many entities involved and the diagram below illustrates the organizational set up of a mutual fund:
RESEARCH OBJECTIVES
PRIMARY OBJECTIVE
? To study emerging market of mutual funds in India with special reference to KOTAK MAHINDRA.
SECONDARY OBJECTIVES
? To analyze the performance of mutual fund schemes on the basis Risk, Return and other various parameters. ? How to improve organization with the specific feedback from the tool and become more attractive for new potential clients and retain current clients. ? To know and categorized customer on the basis of various parameters such as age, income and preference to help the organization to find out potential clients.
REVIEW OF LITERATURE
History of Mutual Fund in India:
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. The history of mutual funds in India can be broadly divided into four distinct phases:
?
First Phase – 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6, 700 crores of assets under management.
?
Second Phase – 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first nonUTI 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 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 (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. ? The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. ? 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 mutual fund industry has entered its current phase of consolidation and growth. As at the end of March, 2006, there were 29 funds.
• Future Scenario
The asset base will continue to grow at an annual rate of about 30 to 35 % over the next few years as investor’s shift their assets from banks and other traditional avenues. Some of the older public and private sector players will either close shop or be taken over. ? SEBI is working out the norms for enabling the existing mutual fund schemes to trade in derivatives. Importantly, many market players have called on the Regulator to initiate the process immediately, so that the mutual funds can implement the changes that are required to trade in Derivatives.
Money Market Funds
Gilt Funds
Debt Funds
Flexible Asset
Equity Funds
Hybrid High Yield Funds Debt Funds
Flexible Asset allocation Funds
Risk Level
High Yield Debt Funds
Hybrid Funds Debt Funds Equity Funds Aggressive Growth
allocation Funds
Aggressive Growth Funds
Growth Funds Diversified Equity Funds
Index Funds
Focused Debt Funds
Value Funds Growth and Income funds Balanced Funds
Equity Income Funds
Money Market Funds
Gilt Funds
Diversified Debt Funds
Type of Fund
Fund by Nature
MUTUL FUND INVESTING
Mutual funds have gained in popularity with the investing public especially in the last two decades following what is now known as the longest bull run of twenty years. Mutual funds have created wealth for retirees and general safe financial players with the rise in stock prices. This article throws light on:
• • •
What are the factors that prompt investors to invest in mutual funds? What are the risks involved in investing in mutual funds? Who regulates mutual funds?
Anyone who is aware of stock market is not new to mutual funds. Mutual funds have gained in popularity with the investing public especially in the last two decades following what is now known as the longest bull run of twenty years. At the outset mutual funds have created wealth for retirees and general safe financial players with the rise in stock prices. But why invest in mutual funds and why is investing in mutual funds a popular option? How beneficial are they and what are the risk factors involved in mutual funds investing? After all they are also a kind of instruments of investments. Why Invest In Mutual Funds? If anyone is investing in stock market and are afraid of its somewhat unpredictable fluctuations, one can definitely consider investing in mutual funds. Some of the reasons that go strongly in favor of mutual funds are their lowest risk factors owing to diversification of assets in to various sectors and scrips or instruments within. As with the risk, the costs of unit share too are spread across making them affordable by almost any one. If a person is looking at open end funds he/she can always purchase them from the company at the NAV minus some loads or expenses. The closed end funds give you the flexibility of independent stocks while combining the best of the features of mutual funds. How Mutual Funds Manage To Reduce Their Risk? Fund managers allocate available funds in a specified proportion among various instruments of investments. Consider a fund being well diversified across the spectrum of exchange listed stocks and bonds which yield a guaranteed return in addition to being invested in money markets and real estates. While bonds and money market investments provide a low but steady return, other instruments are of high yielding character in a short period. The higher risk of high yielding portfolio is compensated for by the investments in bonds in events of adverse market behavior. The portfolio will be constantly reviewed and adjusted to variations in order to maximize returns and minimize risks. This means, fund managers buy or sell stocks or bonds as per the dictates of the fund and market pulls. For example an investment in a perceived risky instrument will be sold immediately and reinvested in a prospective media of the time.
PRODUCT
Different people have different investment needs. The ability to take risks while investing in financial products varies accordingly. In this section we present our wide range of Mutual Fund schemes, which span across the risk-reward spectrum.
Types of funds
Money Market Funds
The money market consists of short-term debt instruments, mostly Treasury bills. This is a safe place to park your money. You won't get great returns, but you won't have to worry about losing your principal. A typical return is twice the amount you would earn in a regular checking/savings account and a little less than the average certificate of deposit (CD).
Bond/Income Funds
Income funds are named appropriately: their purpose is to provide current income on a steady basis. When referring to mutual funds, the terms "fixed-income," "bond," and "income" are synonymous. These terms denote funds that invest primarily in government and corporate debt. While fund holdings may appreciate in value, the primary objective of these funds is to provide a steady cash flow to investors. As such, the audience for these funds consists of conservative investors and retirees. Bond funds are likely to pay higher returns than certificates of deposit and money market investments, but bond funds aren't without risk. Because there are many different types of bonds, bond funds can vary dramatically depending on where they invest. For example, a fund specializing in high-yield junk bonds is much more risky than a fund that invests in government securities. Furthermore, nearly all bond funds are subject to interest rate risk, which means that if rates go up the value of the fund goes down.
Balanced Funds
The objective of these funds is to provide a balanced mixture of safety, income and capital appreciation. The strategy of balanced funds is to invest in a combination of fixed income and equities. A typical balanced fund might have a weighting of 60% equity and 40% fixed income. The weighting might also be restricted to a specified maximum or minimum for each asset class. A similar type of fund is known as an asset allocation fund. Objectives are similar to those of a balanced fund, but these kinds of funds typically do not have to hold a specified percentage of any asset class. The portfolio manager is therefore given freedom to switch the ratio of asset classes as the economy moves through the business cycle.
Equity Funds
Funds that invest in stocks represent the largest category of mutual funds. Generally, the investment objective of this class of funds is long-term capital growth with some income. There are, however, many different types of equity funds because there are many different types of equities. A great way to understand the universe of equity funds is to use a style box an example of which is below. The idea is to classify funds based on both the size of the companies invested in and the investment style of the manager. The term value refers to a style of investing that looks for high quality companies that are out of favor with the market. These companies are characterized by low P/E and price-to-book ratios and high dividend yields. The opposite of value is growth, which refers to companies that have had (and are expected to continue to have) strong growth in earnings, sales and cash flow. A compromise between value and growth is blend, which simply refers to companies that are neither value nor growth stocks and are classified as being somewhere in the middle. For example, a mutual fund that invests in large-cap companies that are in strong financial shape but have recently seen their share prices fall would be placed in the upper left quadrant of the style box (large and value). The opposite of this would be a fund that invests in startup technology companies with excellent growth prospects. Such a mutual fund would reside in the bottom right quadrant (small and growth).
Global/International
Funds
An international fund (or foreign fund) invests only outside your home country. Global funds invest anywhere around the world, including your home country. It's tough to classify these funds as either riskier or safer than domestic investments. They do tend to be more volatile and have unique country and/or political risks. But, on the flip side, they can, as part of a well-balanced portfolio, actually reduce risk by increasing diversification. Although the world's economies are becoming more inter-related, it is likely that another economy somewhere is outperforming the economy of your home country.
Specialty
Funds
This classification of mutual funds is more of an all-encompassing category that consists of funds that have proved to be popular but don't necessarily belong to the categories we've described so far. This type of mutual fund forgoes broad diversification to concentrate on a certain segment of the economy. Sector funds are targeted at specific sectors of the economy such as financial, technology, health, etc. Sector funds are extremely volatile. There is a greater possibility of big gains, but you have to accept that your sector may tank. Regional funds make it easier to focus on a specific area of the world. This may mean focusing on a region (say Latin America) or an individual country (for example, only Brazil). An advantage of these funds is that they make it easier to buy stock in foreign countries, which is otherwise difficult and expensive. Just like for sector funds, you have to accept the high risk of loss, which occurs if the region goes into a bad recession.
Socially-responsible funds (or ethical funds) invest only in companies that meet the criteria of certain guidelines or beliefs. Most socially responsible funds don't invest in industries such as tobacco, alcoholic beverages, weapons or nuclear power. The idea is to get a competitive performance while still maintaining a healthy conscience.
Index Funds
The last but certainly not the least important are index funds. This type of mutual fund replicates the performance of a broad market index such as the S&P 500 or Dow Jones Industrial Average (DJIA). An investor in an index fund figures that most managers can't beat the market. An index fund merely replicates the market return and benefits investors in the form of low fees.
ABOUT KOTAK MUTUL FUND
Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporate. The group has a net worth of around Rs.5,997 crore and employs around 20,000 employees across its various businesses servicing around 5 million customer accounts through a distribution network of branches, franchisees, representative offices and satellite offices across 370 cities and towns in India and offices in New York, London, Dubai, Mauritius and Singapore. Kotak Mahindra Asset Management Company Limited (KMAMC), a wholly owned subsidiary of KMBL, is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF). KMAMC started operations in December 1998 and has over 10 Lac investors in various schemes. KMMF offers schemes catering to investors with varying risk - return profiles and was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities.
About Kotak Mahindra Bank
The erstwhile Sponsor Company, Kotak Mahindra Finance Limited (KMFL) was converted into Kotak Mahindra Bank Limited (Kotak Bank) in March 2003 after being granted a banking license by the Reserve Bank of India. Thus, the Sponsor of the Fund is Kotak Bank. KMFL promoted by Mr. Uday S. Kotak, Mr. S.A.A. Pinto and Kotak & Co., was incorporated on November21, 1985 under the name Kotak Capital Management Finance Limited. In early 1986, the promoters were joined by Late Mr.Harish Mahindra and Mr. Anand G. Mahindra and the Company’s name was changed to Kotak Mahindra Finance Limited. Mr. Uday Kotak, a scion of the Kotak family, was an outstanding student through school, Sydenham College (Bombay University) and Jamanalal Bajaj Institute of Management Studies (Bombay University). Mr. S. A. A. Pinto, trained as a lawyer, has held seniorpositions in well-known organisations like ICI and Grindlays Bank. For instance, he was part of the team in Grindlays Bank,which started the first merchant banking unit in India in 1968. Mr. Harish Mahindra an industrialist of repute played a prominent role in social service and public life, thereby earning him high esteem. Mr. Anand Mahindra, an MBA from HarvardUniversity, is the Managing Director of one of India’s most reputed industrial firms, Mahindra & Mahindra Limited. KMFL started with a capital base of Rs. 30.88 lakh. From being a provider of a single financial product, KMFL grew substantiallyduring the seventeen years of its existence into a highly diversified financial services company and has now converted into a Bank. As on March 31, 2008, the net worth (capital plus reserves & surplus) of Kotak Bank is Rs. 3,535.49 crore andcombined with its subsidiaries, the Group net worth (before minority interest) is Rs. 5824 crore. There are over 92,200 shareholders of Kotak Bank. The Sponsor and its subsidiaries/associates offer wide ranging financial services such as loans,lease and hire purchase, consumer finance, home loans, commercial vehicles and car finance, investment banking, stock broking, mutual funds, primary market distribution of equity and debt products and life insurance. The group has offices (including representative offices and franchise offices) in 370 Indian cities and also present internationally in Mauritius, San Francisco, London, Dubai, New York and Singapore. Kotak Mahindra (UK) Limited, a subsidiary of Kotak Bank, is the firstcompany owned from India to be registered with the Financial Services Authority in UK. Kotak Mahindra Old Mutual Life Insurance Limited is a joint venture between Kotak Bank and Old Mutual Plc based in the UK and with large presence in theSouth African insurance market. Some of the other subsidiaries of Kotak Bank are Kotak Investment Advisors Ltd formerly
known as (Kotak Mahindra Securities Limited), Kotak Mahindra Prime Limited, Kotak Mahindra (International) Limited, Kotak Mahindra Trusteeship Services Limited (formerly known as Kotak Mahindra Private-Equity Trustee Limited), Kotak MahindraInvestments Limited, Kotak Mahindra Inc., and Kotak Forex Brokerage Limited.The Sponsor has been consistently profitable and dividend paying company since inception.The Sponsor has vested the trustee functions in the Trustee. The Sponsor is represented by directors on the boards of theTrustee and the AMC in accordance with the Regulations. The Sponsor is neither responsible nor liable for any loss resulting from the operations of the Schemes.
Service at kotak
All Type Of Mutual Fund
Our Corporate & Registered Office Address
SIP
The Systematic Investment Plan (SIP) is a simple and time honored investment strategy for accumulation of wealth in a disciplined manner over long term period. The plan aims at a better future for its investors as an SIP investor gets good rate of returns compared to a one time investor.
What is Systematic Investment Plan
A specific amount should be invested for a continuous period at regular intervals under this plan. SIP is similar to a regular saving scheme like a recurring deposit. It is a method of investing a fixed sum regularly in a mutual fund. • SIP allows the investor to buy units on a given date every month. The investor decides the amount and also the mutual fund scheme. • While the investor's investment remains the same, more number of units can be bought in a declining market and less number of units in a rising market. • The investor automatically participates in the market swings once the option for SIP is made.
• •
SIP ensures averaging of rupee cost as consistent investment ensures that average cost per unit fits in the lower range of average market price. An investor can either give post dated cheques or ECS instruction and the investment will be made regularly in the mutual fund desired for the required amount. SIP generally starts at minimum amounts of Rs.1000/- per month and upper limit for using an ECS is Rs.25000/- per instruction. For instance, if one wishes to invest Rs.1, 00,000/- per month, then they need to do it on four different dates.
SIP Cycle
SWP
A service offered by a mutual fund that provides a specific payout amount to the shareholder at predetermined intervals, generally monthly, quarterly, semiannually or annually.
STP
While investing in a debt fund normally assures you of fairly consistent returns, equities have the potential to create wealth. But the unpredictability in equity funds can be quite a deterrent when you make a choice. To combine the best of both worlds, we present Systematic Transfer plan.
s
Average assets under management for the month May 2010 for
KOTAK MAHINDRA ASSET MANEGEMENT CO. LTD
Rs 1,023.26 Cr
NAV (NET ASSET VALUE) FOR ALL MUTUL FUND OF KOTAK MAHINDRA ASSET MANEGEMENT CO. LTD
Kotak 30 Dividend Kotak 30 Growth
29-06-10 29-06-10
30.825 97.736
Kotak Midcap Scheme Dividend Kotak Midcap Scheme Growth
29-06-10 29-06-10
16.824 24.186
Kotak Opportunities Dividend Kotak Opportunities Growth
29-06-10 29-06-10
14.265
44.095
Kotak Lifestyle Dividend Kotak Lifestyle Growth
29-06-10 29-06-10
10.835 12.511
Kotak Global India Dividend Kotak Global India Growth
30-06-10 30-06-10
13.662 19.278
Kotak Tech
30-06-10
5.948
Kotak Emerging Equity Scheme Dividend Kotak Emerging Equity Scheme Growth
30-03-10 30-03-10
10.978 10.978
DETAILS OF KOTAK 30
Mutual Fund Scheme Name Scheme Type Scheme Category
Kotak Mahindra Mutual Fund Kotak 30 Open Ended Growth
Latest Net Asset Value Scheme NAV Name Net Asset Value Repurchase Price Sales Price Date Kotak 30-(Dividend) 30.825 30.517 30.825 29-Jun-2010 Kotak 30-(Growth) 97.736 96.759 97.736 29-Jun-2010
Latest Assets Under Management (AUM Rs in Lacs) Scheme NAV Name Average AUM For The Month As At The End Of Kotak 30-(Dividend) 35668.04 May-2009 Kotak 30-(Growth) 44077.59 May-2009
Current Stats & Profile Latest NAV 97.74 (29/06/10) 52-Week High 98.67 (28/06/10) 52-Week Low 71.27 (13/07/10) Fund Category Equity: Diversified Type Open End
Trailing Returns As on 29 Jun 2010 Year to Date 1-Month 3-Month 1-Year
Fund Category 37.04 46.72 5.37 7.41 2.77 51.63 25.75 0.93
Launch Date Risk Grade Return Grade Net Assets (Cr) Benchmark
December 1998 Below Average Average 1023.24 (31/05/10) S&P CNX Nifty 5256.15(29/06/10)
3-Year 9.15 11.50 5-Year 23.15 26.11 Return Since 22.4 -Launch Returns upto 1 year are absolute and over 1 year are annualised.
Top Holdings As on 29/06/10 Relative Performance (Fund Vs Category Average) Name of Holding Instrument % Net Assets Reliance Industries Equity 5.75 State Bank of India Equity 3.77 Bharti Airtel Equity 4.99 ONGC Equity 3.14 Kotak Mahindra Bank Term Deposits 4.53 ICICI Bank Equity 3.23 Larsen & Toubro Equity 3.67 • Infosys Technologies Equity 5.71 NTPC Equity 3.24 BHEL Equity 3.03 Indicates an increase or decrease or no change in holding since last portfolio
SCOPE OF PROJECT
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. India has a burgeoning population of middle class now estimated around 300 million. A typical Indian middle class family can have liquid savings ranging from Rs.2 to Rs.10 Lacs today. Investments in Banks are liquid and safe, but with the falling rate of interest offered by Banks on Deposits, it is no longer attractive. At best a part can be saved in bank deposits, but what are the other sources of investment for the common man? Mutual Fund is the ready answer. Viewed in this sense globally India is one of the best markets for Mutual Fund Business, so also for Insurance business. This is the reason that foreign companies compete with one another in setting up insurance and mutual fund business units in India. The sheer magnitude of the population of educated white collar employees provides unlimited scope for development of Mutual Fund Business in India. ? The funds are selected which are preferred by customers of various banks. The Schemes were categorized and selected on evaluating their performance and relative risk for last 1 month to 3 years. ? The scope of the project is mainly concentrated on the different categories of the mutual funds such as income schemes, growth funds, balanced funds and liquid plan schemes and tax saver plans. ? The scope of the project is to categorized customer on the basis of various parameters such as age, income and preference to help the organization to find out potential clients.
RESEARCH METHODOLOGY
Research methodology is a very organized and systematic way through which a particular case or problem can be solved efficiently. It is a step-by-step logical process, which involves: ? Defining a problem. ? Laying the objectives of research. ? Source of data. ? Method of data collation. ? Tabulation of data. ? Data analysis and processing. ? Conclusion and recommendation. The task of data collection begins after a research problem has been defined and research design / plan chalked out. While deciding about the method of data collection to be used for the study. The researcher should keep in mind two types of data primary and Secondary.
PRIMARY DATA SOURCES:
• • Through interaction with employees. Through questionnaires filled from the consumer.
SECONDARY DATA SOURCES:
• • • Through Internet, various official sites of the company. Through pamphlets and brochures of the company Journals & Magazine
There are many tools that can be used for the project work. Some tools are as follows: ? Observation Method: - Observation method is one of the tools used to collect the primary data to get past and current information. ? Through Questionnaire: - Questionnaire can be varying effective tool for the data collection it contains list of questions sent to the respondent. ? Through Schedules: - By this schedule tool we can categories the people in a different group to know the opinion about their work environment or about the company.
? Interview Method: - In the interview tool the questionnaire are pre-designed for which the answers are to be obtained. The two major tools have been used for the research work. 1) Questionnaire Method. 2) Interview Method.
LIMITATIONS OF THE STUDY:
The study also has the some limitations which are as follows: ? The study is restricted to secondary data only ? The time is the main constraint so limited period of time is spent on this study. ? The support from the management side may be limited due to their pre occupied meetings and work. ? Not possible to get whole information because of their business secret and lack of awareness among people. ? Mutual fund industries are so developed as compared to stock market.
DATA ANALYSIS
TABLE :1 INVESTMENT OF PEOPLE IN CURRENT SCENARIO INVESTMENT Mutual funds Stocks Govt. bonds and securities Fixed deposit Insurance NO. OF PEOPLE 84 52 17 28 22 PERCENTAGE 42% 26% 07% 14% 11%
INTERPRETATION: There are various investment avenues available for investor. But in survey I found that mutual funds have a significant market share. In crisis of market, people are investing more in mutual funds. Although mutual fund has a tremendous scope of growth. Some people are investing in insurance & G-sec. because of purpose of security. The major part of the sample taken has invested in the Mutual Funds. Still there are few who are not investing in MF. TABLE: .2FACTORS INFLUENCING THE INVESTMENT DECISION OF INVESTORS: Influencing factor Broker Friends Self No. of people 64 40 60 Percentage 32% 20% 30%
Magazine News
12 20
6% 10%
INTERPRETATION: There are many factors which influence the investment decision of the investors. It may be the current news (political, technological, financial, etc.), Magazines, friends, etc. in the study it proved that many people trust the brokers most for the investment decisions. These are the ones who have less experience. The “SelfEvaluation” is the next major factor. The experienced person trust himself thereafter he/she invests. Magazines and current News also matters. Any bad news can make a person change his/her decision TABLE:3 -AG E OF INVESTOR Age Under 30 30-40 46-60 60 and above No. of people 58 84 46 12 Percentage 29% 42% 23% 6%
INTERPRETATION: It is clear from above data that 42% of investor is belonging to age group of 30-40 who are predominantly private employees. TABLE: .4 -HOW STABLE YOUR CURRENT INCOME Income Very unstable Moderately unstable Moderately stable Very stable No.of people 02 24 106 68 Percentage 01% 12% 53% 34%
INTERPRETATION: From above data it is clear that majority of investors have moderately stable income. It means that they invest from their saving. And invest frequently. Only 1% has very unstable income so it is a healthy sign for mutual fund industry.
TABLE-5 AVERAGE INVESTMENT PERIOD OF INVESTORS:Investment Period Less than 6 months 6 months to 1 year 1 year to 3 year More than 3 year No. of people 14 20 62 84 Percentage 7% 10% 31% 42%
INTERPRETATION: The investment period is very important to increase the profits. The timing must be right enough to benefit from fluctuations. The smart investor decides it in advance for how much time he would be keeping his money in the market and when he should leave squaring-up. Many people consider the investment for 9 months – 2 years as a right option. Still some want to be invested for over 2 years. The least responded to the 3-9 months period TABLE: .6 PREFERENCES IN MUTUAL FUNDS:Sector Equity-Normal ELSS Balanced Debt Other No. of people 58 52 32 54 4 Percentage 29% 26% 16% 27% 2%
INTERPRETATION: There are different types of mutual funds available in the market according to the needs of the investors. There are Equity funds, ELSS, Income Funds, Balanced Funds, etc. The highest sought after fund is the Income fund which offers a regular income through investments in the Govt. Bonds. The risk is also low in this. It is followed by the Equity Fund which offers higher returns but it is riskier also. Some people would like to have Equity Linked Saving Schemes (ELSS). This provides some exemption in the Tax also. TABLE:7 -EXPECTED RATE OF RETURN Rate of return 0-10% 10-20% 20-30% 30 & above No of people 24 52 108 16 Percentage 12% 26% 54% 8%
INTERPRETATION: From above data I found that in current scenario of financial market nobody can expect return of more than 10%. There are 54% investors expect the return of 20-30% in a period for 1yea to 3 year.
Table:8RISK TAKEN BY PEOPLE Risk taken High Medium Low No. of people 26 142 32 Percentage 13% 71% 16%
INTERPRETATION: People invest in mutual fund always seeks high return with low risk. But in this case 71% people want to go beyond the low risk level and to achieve high growth. There are still 13% people who can bear high risk in this financial crisis.
TABLE: 9EXPERIENCE IN THE MARKET:Experience Less then 1 year 1 to 4 year More than 4 year No. of people 52 42 106 Percentage 26% 21% 53%
INTERPRETATION: The experience in the market was the factor which influenced the investments. There are some people who have experience of less than a year. These are those investors who entered into the market after noticing the rise in the market. The achievement of 21,000 marks by SENSEX was motivational force in this. Major part was having vast experience that is of more than 4 years. These are the ones who have been in the market and saw it rising to conquer the 10.000 to 21000 peak
TABLE: 10- PREFERENCE IN MODE OF INVESTMENT:Mode of investment Mahindra & Mahindra Tata other No. of people 46 68 76 Percentage 23% 34% 38%
INTERPRETATION: The investor of mutual fund follows the different mode of investment. In such a volatile market majority of people invest in Kotak about 36%.
CONCLUSION
Winning with stocks means performing at least as well as a major market index over the long haul. If one can sidestep the common investor mistakes, then one has taken the first and biggest step in the right direction. The most important consideration while making investment decision was Return aspect followed by Safety, Liquidity and Taxability Diversified stock portfolios have offered superior long term inflation Protection. Equities are especially important today with people living longer and retiring early. To understand stock funds, one needs to be familiar with the characteristics of the different types of companies they hold. Portfolio managers have done a fairly good job in generating positive returns. It may lead to gain investors confidence. On the basis of the analysis the performance of the schemes during the study period can be concluded to be good. Those who want to eliminate the risk element but still want to reap a better then it would be advisable to go for balanced fund and tax saving schemes which ensure both safety and returns. So the future of mutual funds in India is bright, because it meets investor s needs perfectly. This will give boost to Indian investors and will attract foreign investors also. It will lead to the growth of strong institutional framework that can support the capital markets in the long run.
RECOMMENDATIONS
1. To build a successful investment strategy you should carefully structure your investment plan to achieve your goals without taking more risk than you can afford you are comfortable with. You also need to consider how much time you have to reach various goals and your personal circumstances 2. No single asset is appropriate for all your goals at any given point of the in life you will probably want to keep apart your money secure and accessible invested for growth but the proportions of safety income and growth will change as prepare for and then move past successive investment objectives 3. Asset allocation which means combining different types of assets in varying amounts depending on your goals is the key to successful investment strategy 4. The key to building wealth is to start investing early and regularly these regular amounts of saving however small can grow into a substantial amount of wealth over the long term 5. A wise investment strategy may be to have an investment portfolio that also consists of more than just granted return shames. That way one is protected against the impact of future inflation. Furthermore unlike in the past when the interest rate was flat rate were flat and administered today interest rates are market driven and volatile.
BIBLIOGRAPHY
1. WEBSITES: ? www.mutualfundsindia.com ? www.easymf.com ? www.amfiindia.com ? www.eassytown.com ? www.google.com ? www.valueresearchonline.com ? www.investopedia.com ? www.kotakmahindra.in ? NSE:www.nseindia.com ? SEBI:www.sebi.gov.in ? KOTAK BANK:www.kotak.com ? KOTAL MUTUAL FUND:www.kotakmutualfund.com BOOKS AND MAGAZINES ? Security analysis & Portfolio management by V.K. Bhalla
QUESTIONNAIRE
Name: Address:
Sex: Contact No:
1. Where you will invest your money in current scenario? A. Mutual Fund C. Fixed deposit E. Govt. bonds and securities 2. Which factor influences your investment decision? A. Broker C. Self E. News 3. What is your age? A. Under 30 C. 44-59 B. 30-40 D. 60 and over B. Friend D. Magazine F. Others B. Insurance D. Stock market
4. How stable is your current income source? A. Very unstable C. Moderately stable B. Moderately unstable D. Very Stable
5. How much long do you prefer your investment? A. Less than 6 Months C. 1- 3 Years B.6 Months -1 Year D. Greater than 3 years
6. Which scheme of mutual fund do you prefer for investment? A. Equity C. Balanced E. Other 7. Your expected rate of return? A.0-10% C.20-30% 8. How much you can take risk? A. High B. Medium C. Low B.10-20% D.30& above B.ELSS D. Debt
9. How experienced are you at investing in bonds or bond mutual funds? A. < 1 Year B. 1 – 4 Years C. > 4 Year
10. Which company’s mutual fund attracts you more? A. Mahindra & mahindra B. Tata C. other
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
WHAT IS AMC? WHO CONTROL AMC FUCTIONS? WHAT IS THE ROLE OF SEBI? HOW MUTUAL FUND WORKS? WHAT IS AMFI? WHAT IS ADVANTAGE AND DIS ADVANTAGE OF MUTUAL FUND? HOW MANY STOCK TYPE OF MUTUAL FUNDS ARE THERE?. WHAT IS THE ROLE OF A FUND MANAGER? HOW MANY AMC’S ARE THERE IN INDIA? WHICH IS THE BIGGEST AMC IN INDIA?
•
WHAT IS AMC?
AMC stands for asset Mgt Company. Its provide comprehensive Services to the banks and financial institutions to manage the market risk,and design strategies to reduce risk and implements. And also provide the portfolio risk based on balance sheet to reduce risks like interest rate risk, liquidity risk,yield risk etc
• WHO CONTROL AMC FUCTIONS?
Function of AMC control by SEBI
•
WHAT IS THE ROLE OF SEBI?
To protect the interest of the investors, SEBI formulates policies and regulates the mutual funds. It notified regulations in 1993 (fully revised in 1996) and issues guidelines from time to time. MF either promoted by public or by private sector entities including one promoted by foreign entities is governed by these Regulations. SEBI approved Asset Management Company (AMC) manages the funds by making investments in various types of
securities. Custodian, registered with SEBI, holds the securities of various schemes of the fund in its custody. The general power of superintendence and direction over AMC is vested with the trustees. According to SEBI Regulations, two thirds of the directors of trustee company or board of trustees must be independent. They should not be associated with the sponsors. 50% of the directors of AMC must be independent. All mutual funds are required to be registered with SEBI before they launch any scheme.
•
How Mutual Fund Works?
Every mutual fund has a goal - either growing its assets (capital gains) and/or generating income (dividends) for its investors. Distributions in the form of capital gains (short-term and long-term) and dividends may be passed on (paid) to shareholders as income or reinvested to purchase more shares. For tax purposes, keep track of your distributions and cost basis of purchased/reinvested shares. Like any business, mutual funds have risks and costs associated with returns. As a shareholder, the risks of a fund and the expenses associated with fund's operation directly impact your return.
•
WHAT IS AMFI?
The Association of Mutual Funds in India (AMFI) is dedicated to developing the Indian Mutual Fund Industry on professional, healthy and ethical lines and to enhance and maintain standards in all areas with a view to protecting and promoting the interests of mutual funds and their unit holders.
•
WHAT IS ADVANTAGE AND DISADVANTAGE OF MUTUAL FUND?
Advantages What are the key advantages of mutual fund investing? Diversification
Professional Management: Convenience: .Liquidity: Minimum Initial Investment: .Disadvantages Risks and Costs:
•
HOW MANY STOCK TYPE OF MUTUAL FUND?
1.
Large Cap: Primarily invests in "Blue-chip" companies - large, well-known industrials, utilities,
technology, and financial services companies with large market capitalization. Large cap stocks are perceived to be less risky than smaller capitalized companies. Mid Cap: Primarily invests in companies whose market capitalization is smaller than large caps but larger than small caps. Mid caps are generally considered more risky than large cap stocks but have a higher return expectation. Small Cap: Primarily invests in emerging companies, thought to have potential for future growth and profit. Small caps are generally considered the riskiest stocks compared to larger capitalized firms but carry the expectation of higher returns. Small cap funds are subject to greater volatility than those in other asset categories. International: Primarily invests in stocks traded on foreign exchanges but purchased in the United States by U.S. fund companies. International funds are subject to additional risks such as currency fluctuation, political instability and the potential for illiquid markets. Sector: Primarily invests in specific industry sectors such as technology, financials, health, or energy. Since sector funds focus their investments on companies involved in a specific industry sector, the funds may involve a greater degree of risk that an investment in other mutual funds with greater diversification.
2.
3.
4.
5.
•
WHAT IS THE ROLE OF A FUND MANAGER?
The individuals involved in fund management (mutual, pension, trust funds or hedge funds) must have a high level of educational and professional credentials and appropriate investment managerial experience to qualify for this position. Investors should look for long-term, consistent fund performance with a fund manager whose tenure with the fund matches its performance time period. The whole point of investing in a fund is to leave the investment management function to the professionals. Therefore, the quality of the fund manager is one of the key factors to consider when analyzing the investment quality of any particular fund
•
HOW MANY MUTUAL FUNDS ARE ASSOCIATED WITH AMFI?
46
•
WHICH IS THE OLDEST AMC IN INDIA?
UTI
Bibliography
AMFI: www.amfiindia.com NSE: www.nseindia.com VALUE RESERCH GOOGLE: www.google.com SEBI: www.sebi.gov.in KOTAK BANK: www.kotak.com KOTAL MUTUAL FUND: www.kotakmutualfund.com
doc_694077881.doc
Emmerging Market Of Mutual Funds In India With Special Reference To Kotak Mutual Fund.
INDEX
1. INTRODUCTION 2. RESEARCH OBJECTIVE 3. ORGANISATION OF A MUTUAL FUND 4. HISTORY OF MUTUAL FUND IN INDIA 5. MUTUAL FUND INVESTING 6. PRODUCT 7. ABOUT KOTAK MUTUL FUND 8. RESEARCH METHODOLOGY 9. DATA ANALYSIS 10. CONCLUSION AND RECOMMENDATION 11. QUESTIONS 12. BIBIOGRAPHY
5 6 7 8 13 15 20
37 46 47 52
INDEX OF ILLUSTRATUION
1
.Mutual fund Flow Chart
5 6 10 11 18 28 29 30 37 38 40 43
2. Organization of Mutual Fund 3. Growth in Asset under Management 4. Fund by nature 5. Broad mutual fund type 6. All type of mutual fund 7. SIP cycle 8. STP 9. Relative performance 10. Sector weightings of kotak 30 11. Trailing return of kotak 30 12. Asset allocation of kotak -30
INTRODUCTION
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 invested by the fund manager in different types of Securities depending upon the objective of the scheme. These could range from shares to debentures to money market instruments. The income earned through these investments and the capital appreciations realized by the scheme are shared by its unit holders in proportion to the number of units owned by them (pro rata). 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 portfolio at a relatively low cost. Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual Funds. Each Mutual Fund scheme has a defined investment objective and strategy.
CONCEPT OF MUTUL FUND
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 appreciation realized is 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. The flow chart below describes broadly the working of a mutual fund.
Mutual Fund Operation Flow Chart
ORGANISATION OF A MUTUAL FUND
There are many entities involved and the diagram below illustrates the organizational set up of a mutual fund:
RESEARCH OBJECTIVES
PRIMARY OBJECTIVE
? To study emerging market of mutual funds in India with special reference to KOTAK MAHINDRA.
SECONDARY OBJECTIVES
? To analyze the performance of mutual fund schemes on the basis Risk, Return and other various parameters. ? How to improve organization with the specific feedback from the tool and become more attractive for new potential clients and retain current clients. ? To know and categorized customer on the basis of various parameters such as age, income and preference to help the organization to find out potential clients.
REVIEW OF LITERATURE
History of Mutual Fund in India:
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. The history of mutual funds in India can be broadly divided into four distinct phases:
?
First Phase – 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6, 700 crores of assets under management.
?
Second Phase – 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first nonUTI 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 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 (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. ? The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. ? 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 mutual fund industry has entered its current phase of consolidation and growth. As at the end of March, 2006, there were 29 funds.
• Future Scenario
The asset base will continue to grow at an annual rate of about 30 to 35 % over the next few years as investor’s shift their assets from banks and other traditional avenues. Some of the older public and private sector players will either close shop or be taken over. ? SEBI is working out the norms for enabling the existing mutual fund schemes to trade in derivatives. Importantly, many market players have called on the Regulator to initiate the process immediately, so that the mutual funds can implement the changes that are required to trade in Derivatives.
Money Market Funds
Gilt Funds
Debt Funds
Flexible Asset
Equity Funds
Hybrid High Yield Funds Debt Funds
Flexible Asset allocation Funds
Risk Level
High Yield Debt Funds
Hybrid Funds Debt Funds Equity Funds Aggressive Growth
allocation Funds
Aggressive Growth Funds
Growth Funds Diversified Equity Funds
Index Funds
Focused Debt Funds
Value Funds Growth and Income funds Balanced Funds
Equity Income Funds
Money Market Funds
Gilt Funds
Diversified Debt Funds
Type of Fund
Fund by Nature
MUTUL FUND INVESTING
Mutual funds have gained in popularity with the investing public especially in the last two decades following what is now known as the longest bull run of twenty years. Mutual funds have created wealth for retirees and general safe financial players with the rise in stock prices. This article throws light on:
• • •
What are the factors that prompt investors to invest in mutual funds? What are the risks involved in investing in mutual funds? Who regulates mutual funds?
Anyone who is aware of stock market is not new to mutual funds. Mutual funds have gained in popularity with the investing public especially in the last two decades following what is now known as the longest bull run of twenty years. At the outset mutual funds have created wealth for retirees and general safe financial players with the rise in stock prices. But why invest in mutual funds and why is investing in mutual funds a popular option? How beneficial are they and what are the risk factors involved in mutual funds investing? After all they are also a kind of instruments of investments. Why Invest In Mutual Funds? If anyone is investing in stock market and are afraid of its somewhat unpredictable fluctuations, one can definitely consider investing in mutual funds. Some of the reasons that go strongly in favor of mutual funds are their lowest risk factors owing to diversification of assets in to various sectors and scrips or instruments within. As with the risk, the costs of unit share too are spread across making them affordable by almost any one. If a person is looking at open end funds he/she can always purchase them from the company at the NAV minus some loads or expenses. The closed end funds give you the flexibility of independent stocks while combining the best of the features of mutual funds. How Mutual Funds Manage To Reduce Their Risk? Fund managers allocate available funds in a specified proportion among various instruments of investments. Consider a fund being well diversified across the spectrum of exchange listed stocks and bonds which yield a guaranteed return in addition to being invested in money markets and real estates. While bonds and money market investments provide a low but steady return, other instruments are of high yielding character in a short period. The higher risk of high yielding portfolio is compensated for by the investments in bonds in events of adverse market behavior. The portfolio will be constantly reviewed and adjusted to variations in order to maximize returns and minimize risks. This means, fund managers buy or sell stocks or bonds as per the dictates of the fund and market pulls. For example an investment in a perceived risky instrument will be sold immediately and reinvested in a prospective media of the time.
PRODUCT
Different people have different investment needs. The ability to take risks while investing in financial products varies accordingly. In this section we present our wide range of Mutual Fund schemes, which span across the risk-reward spectrum.
Types of funds
Money Market Funds
The money market consists of short-term debt instruments, mostly Treasury bills. This is a safe place to park your money. You won't get great returns, but you won't have to worry about losing your principal. A typical return is twice the amount you would earn in a regular checking/savings account and a little less than the average certificate of deposit (CD).
Bond/Income Funds
Income funds are named appropriately: their purpose is to provide current income on a steady basis. When referring to mutual funds, the terms "fixed-income," "bond," and "income" are synonymous. These terms denote funds that invest primarily in government and corporate debt. While fund holdings may appreciate in value, the primary objective of these funds is to provide a steady cash flow to investors. As such, the audience for these funds consists of conservative investors and retirees. Bond funds are likely to pay higher returns than certificates of deposit and money market investments, but bond funds aren't without risk. Because there are many different types of bonds, bond funds can vary dramatically depending on where they invest. For example, a fund specializing in high-yield junk bonds is much more risky than a fund that invests in government securities. Furthermore, nearly all bond funds are subject to interest rate risk, which means that if rates go up the value of the fund goes down.
Balanced Funds
The objective of these funds is to provide a balanced mixture of safety, income and capital appreciation. The strategy of balanced funds is to invest in a combination of fixed income and equities. A typical balanced fund might have a weighting of 60% equity and 40% fixed income. The weighting might also be restricted to a specified maximum or minimum for each asset class. A similar type of fund is known as an asset allocation fund. Objectives are similar to those of a balanced fund, but these kinds of funds typically do not have to hold a specified percentage of any asset class. The portfolio manager is therefore given freedom to switch the ratio of asset classes as the economy moves through the business cycle.
Equity Funds
Funds that invest in stocks represent the largest category of mutual funds. Generally, the investment objective of this class of funds is long-term capital growth with some income. There are, however, many different types of equity funds because there are many different types of equities. A great way to understand the universe of equity funds is to use a style box an example of which is below. The idea is to classify funds based on both the size of the companies invested in and the investment style of the manager. The term value refers to a style of investing that looks for high quality companies that are out of favor with the market. These companies are characterized by low P/E and price-to-book ratios and high dividend yields. The opposite of value is growth, which refers to companies that have had (and are expected to continue to have) strong growth in earnings, sales and cash flow. A compromise between value and growth is blend, which simply refers to companies that are neither value nor growth stocks and are classified as being somewhere in the middle. For example, a mutual fund that invests in large-cap companies that are in strong financial shape but have recently seen their share prices fall would be placed in the upper left quadrant of the style box (large and value). The opposite of this would be a fund that invests in startup technology companies with excellent growth prospects. Such a mutual fund would reside in the bottom right quadrant (small and growth).
Global/International
Funds
An international fund (or foreign fund) invests only outside your home country. Global funds invest anywhere around the world, including your home country. It's tough to classify these funds as either riskier or safer than domestic investments. They do tend to be more volatile and have unique country and/or political risks. But, on the flip side, they can, as part of a well-balanced portfolio, actually reduce risk by increasing diversification. Although the world's economies are becoming more inter-related, it is likely that another economy somewhere is outperforming the economy of your home country.
Specialty
Funds
This classification of mutual funds is more of an all-encompassing category that consists of funds that have proved to be popular but don't necessarily belong to the categories we've described so far. This type of mutual fund forgoes broad diversification to concentrate on a certain segment of the economy. Sector funds are targeted at specific sectors of the economy such as financial, technology, health, etc. Sector funds are extremely volatile. There is a greater possibility of big gains, but you have to accept that your sector may tank. Regional funds make it easier to focus on a specific area of the world. This may mean focusing on a region (say Latin America) or an individual country (for example, only Brazil). An advantage of these funds is that they make it easier to buy stock in foreign countries, which is otherwise difficult and expensive. Just like for sector funds, you have to accept the high risk of loss, which occurs if the region goes into a bad recession.
Socially-responsible funds (or ethical funds) invest only in companies that meet the criteria of certain guidelines or beliefs. Most socially responsible funds don't invest in industries such as tobacco, alcoholic beverages, weapons or nuclear power. The idea is to get a competitive performance while still maintaining a healthy conscience.
Index Funds
The last but certainly not the least important are index funds. This type of mutual fund replicates the performance of a broad market index such as the S&P 500 or Dow Jones Industrial Average (DJIA). An investor in an index fund figures that most managers can't beat the market. An index fund merely replicates the market return and benefits investors in the form of low fees.
ABOUT KOTAK MUTUL FUND
Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporate. The group has a net worth of around Rs.5,997 crore and employs around 20,000 employees across its various businesses servicing around 5 million customer accounts through a distribution network of branches, franchisees, representative offices and satellite offices across 370 cities and towns in India and offices in New York, London, Dubai, Mauritius and Singapore. Kotak Mahindra Asset Management Company Limited (KMAMC), a wholly owned subsidiary of KMBL, is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF). KMAMC started operations in December 1998 and has over 10 Lac investors in various schemes. KMMF offers schemes catering to investors with varying risk - return profiles and was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities.
About Kotak Mahindra Bank
The erstwhile Sponsor Company, Kotak Mahindra Finance Limited (KMFL) was converted into Kotak Mahindra Bank Limited (Kotak Bank) in March 2003 after being granted a banking license by the Reserve Bank of India. Thus, the Sponsor of the Fund is Kotak Bank. KMFL promoted by Mr. Uday S. Kotak, Mr. S.A.A. Pinto and Kotak & Co., was incorporated on November21, 1985 under the name Kotak Capital Management Finance Limited. In early 1986, the promoters were joined by Late Mr.Harish Mahindra and Mr. Anand G. Mahindra and the Company’s name was changed to Kotak Mahindra Finance Limited. Mr. Uday Kotak, a scion of the Kotak family, was an outstanding student through school, Sydenham College (Bombay University) and Jamanalal Bajaj Institute of Management Studies (Bombay University). Mr. S. A. A. Pinto, trained as a lawyer, has held seniorpositions in well-known organisations like ICI and Grindlays Bank. For instance, he was part of the team in Grindlays Bank,which started the first merchant banking unit in India in 1968. Mr. Harish Mahindra an industrialist of repute played a prominent role in social service and public life, thereby earning him high esteem. Mr. Anand Mahindra, an MBA from HarvardUniversity, is the Managing Director of one of India’s most reputed industrial firms, Mahindra & Mahindra Limited. KMFL started with a capital base of Rs. 30.88 lakh. From being a provider of a single financial product, KMFL grew substantiallyduring the seventeen years of its existence into a highly diversified financial services company and has now converted into a Bank. As on March 31, 2008, the net worth (capital plus reserves & surplus) of Kotak Bank is Rs. 3,535.49 crore andcombined with its subsidiaries, the Group net worth (before minority interest) is Rs. 5824 crore. There are over 92,200 shareholders of Kotak Bank. The Sponsor and its subsidiaries/associates offer wide ranging financial services such as loans,lease and hire purchase, consumer finance, home loans, commercial vehicles and car finance, investment banking, stock broking, mutual funds, primary market distribution of equity and debt products and life insurance. The group has offices (including representative offices and franchise offices) in 370 Indian cities and also present internationally in Mauritius, San Francisco, London, Dubai, New York and Singapore. Kotak Mahindra (UK) Limited, a subsidiary of Kotak Bank, is the firstcompany owned from India to be registered with the Financial Services Authority in UK. Kotak Mahindra Old Mutual Life Insurance Limited is a joint venture between Kotak Bank and Old Mutual Plc based in the UK and with large presence in theSouth African insurance market. Some of the other subsidiaries of Kotak Bank are Kotak Investment Advisors Ltd formerly
known as (Kotak Mahindra Securities Limited), Kotak Mahindra Prime Limited, Kotak Mahindra (International) Limited, Kotak Mahindra Trusteeship Services Limited (formerly known as Kotak Mahindra Private-Equity Trustee Limited), Kotak MahindraInvestments Limited, Kotak Mahindra Inc., and Kotak Forex Brokerage Limited.The Sponsor has been consistently profitable and dividend paying company since inception.The Sponsor has vested the trustee functions in the Trustee. The Sponsor is represented by directors on the boards of theTrustee and the AMC in accordance with the Regulations. The Sponsor is neither responsible nor liable for any loss resulting from the operations of the Schemes.
Service at kotak
All Type Of Mutual Fund
Our Corporate & Registered Office Address
SIP
The Systematic Investment Plan (SIP) is a simple and time honored investment strategy for accumulation of wealth in a disciplined manner over long term period. The plan aims at a better future for its investors as an SIP investor gets good rate of returns compared to a one time investor.
What is Systematic Investment Plan
A specific amount should be invested for a continuous period at regular intervals under this plan. SIP is similar to a regular saving scheme like a recurring deposit. It is a method of investing a fixed sum regularly in a mutual fund. • SIP allows the investor to buy units on a given date every month. The investor decides the amount and also the mutual fund scheme. • While the investor's investment remains the same, more number of units can be bought in a declining market and less number of units in a rising market. • The investor automatically participates in the market swings once the option for SIP is made.
• •
SIP ensures averaging of rupee cost as consistent investment ensures that average cost per unit fits in the lower range of average market price. An investor can either give post dated cheques or ECS instruction and the investment will be made regularly in the mutual fund desired for the required amount. SIP generally starts at minimum amounts of Rs.1000/- per month and upper limit for using an ECS is Rs.25000/- per instruction. For instance, if one wishes to invest Rs.1, 00,000/- per month, then they need to do it on four different dates.
SIP Cycle
SWP
A service offered by a mutual fund that provides a specific payout amount to the shareholder at predetermined intervals, generally monthly, quarterly, semiannually or annually.
STP
While investing in a debt fund normally assures you of fairly consistent returns, equities have the potential to create wealth. But the unpredictability in equity funds can be quite a deterrent when you make a choice. To combine the best of both worlds, we present Systematic Transfer plan.
s
Average assets under management for the month May 2010 for
KOTAK MAHINDRA ASSET MANEGEMENT CO. LTD
Rs 1,023.26 Cr
NAV (NET ASSET VALUE) FOR ALL MUTUL FUND OF KOTAK MAHINDRA ASSET MANEGEMENT CO. LTD
Kotak 30 Dividend Kotak 30 Growth
29-06-10 29-06-10
30.825 97.736
Kotak Midcap Scheme Dividend Kotak Midcap Scheme Growth
29-06-10 29-06-10
16.824 24.186
Kotak Opportunities Dividend Kotak Opportunities Growth
29-06-10 29-06-10
14.265
44.095
Kotak Lifestyle Dividend Kotak Lifestyle Growth
29-06-10 29-06-10
10.835 12.511
Kotak Global India Dividend Kotak Global India Growth
30-06-10 30-06-10
13.662 19.278
Kotak Tech
30-06-10
5.948
Kotak Emerging Equity Scheme Dividend Kotak Emerging Equity Scheme Growth
30-03-10 30-03-10
10.978 10.978
DETAILS OF KOTAK 30
Mutual Fund Scheme Name Scheme Type Scheme Category
Kotak Mahindra Mutual Fund Kotak 30 Open Ended Growth
Latest Net Asset Value Scheme NAV Name Net Asset Value Repurchase Price Sales Price Date Kotak 30-(Dividend) 30.825 30.517 30.825 29-Jun-2010 Kotak 30-(Growth) 97.736 96.759 97.736 29-Jun-2010
Latest Assets Under Management (AUM Rs in Lacs) Scheme NAV Name Average AUM For The Month As At The End Of Kotak 30-(Dividend) 35668.04 May-2009 Kotak 30-(Growth) 44077.59 May-2009
Current Stats & Profile Latest NAV 97.74 (29/06/10) 52-Week High 98.67 (28/06/10) 52-Week Low 71.27 (13/07/10) Fund Category Equity: Diversified Type Open End
Trailing Returns As on 29 Jun 2010 Year to Date 1-Month 3-Month 1-Year
Fund Category 37.04 46.72 5.37 7.41 2.77 51.63 25.75 0.93
Launch Date Risk Grade Return Grade Net Assets (Cr) Benchmark
December 1998 Below Average Average 1023.24 (31/05/10) S&P CNX Nifty 5256.15(29/06/10)
3-Year 9.15 11.50 5-Year 23.15 26.11 Return Since 22.4 -Launch Returns upto 1 year are absolute and over 1 year are annualised.
Top Holdings As on 29/06/10 Relative Performance (Fund Vs Category Average) Name of Holding Instrument % Net Assets Reliance Industries Equity 5.75 State Bank of India Equity 3.77 Bharti Airtel Equity 4.99 ONGC Equity 3.14 Kotak Mahindra Bank Term Deposits 4.53 ICICI Bank Equity 3.23 Larsen & Toubro Equity 3.67 • Infosys Technologies Equity 5.71 NTPC Equity 3.24 BHEL Equity 3.03 Indicates an increase or decrease or no change in holding since last portfolio
SCOPE OF PROJECT
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. India has a burgeoning population of middle class now estimated around 300 million. A typical Indian middle class family can have liquid savings ranging from Rs.2 to Rs.10 Lacs today. Investments in Banks are liquid and safe, but with the falling rate of interest offered by Banks on Deposits, it is no longer attractive. At best a part can be saved in bank deposits, but what are the other sources of investment for the common man? Mutual Fund is the ready answer. Viewed in this sense globally India is one of the best markets for Mutual Fund Business, so also for Insurance business. This is the reason that foreign companies compete with one another in setting up insurance and mutual fund business units in India. The sheer magnitude of the population of educated white collar employees provides unlimited scope for development of Mutual Fund Business in India. ? The funds are selected which are preferred by customers of various banks. The Schemes were categorized and selected on evaluating their performance and relative risk for last 1 month to 3 years. ? The scope of the project is mainly concentrated on the different categories of the mutual funds such as income schemes, growth funds, balanced funds and liquid plan schemes and tax saver plans. ? The scope of the project is to categorized customer on the basis of various parameters such as age, income and preference to help the organization to find out potential clients.
RESEARCH METHODOLOGY
Research methodology is a very organized and systematic way through which a particular case or problem can be solved efficiently. It is a step-by-step logical process, which involves: ? Defining a problem. ? Laying the objectives of research. ? Source of data. ? Method of data collation. ? Tabulation of data. ? Data analysis and processing. ? Conclusion and recommendation. The task of data collection begins after a research problem has been defined and research design / plan chalked out. While deciding about the method of data collection to be used for the study. The researcher should keep in mind two types of data primary and Secondary.
PRIMARY DATA SOURCES:
• • Through interaction with employees. Through questionnaires filled from the consumer.
SECONDARY DATA SOURCES:
• • • Through Internet, various official sites of the company. Through pamphlets and brochures of the company Journals & Magazine
There are many tools that can be used for the project work. Some tools are as follows: ? Observation Method: - Observation method is one of the tools used to collect the primary data to get past and current information. ? Through Questionnaire: - Questionnaire can be varying effective tool for the data collection it contains list of questions sent to the respondent. ? Through Schedules: - By this schedule tool we can categories the people in a different group to know the opinion about their work environment or about the company.
? Interview Method: - In the interview tool the questionnaire are pre-designed for which the answers are to be obtained. The two major tools have been used for the research work. 1) Questionnaire Method. 2) Interview Method.
LIMITATIONS OF THE STUDY:
The study also has the some limitations which are as follows: ? The study is restricted to secondary data only ? The time is the main constraint so limited period of time is spent on this study. ? The support from the management side may be limited due to their pre occupied meetings and work. ? Not possible to get whole information because of their business secret and lack of awareness among people. ? Mutual fund industries are so developed as compared to stock market.
DATA ANALYSIS
TABLE :1 INVESTMENT OF PEOPLE IN CURRENT SCENARIO INVESTMENT Mutual funds Stocks Govt. bonds and securities Fixed deposit Insurance NO. OF PEOPLE 84 52 17 28 22 PERCENTAGE 42% 26% 07% 14% 11%
INTERPRETATION: There are various investment avenues available for investor. But in survey I found that mutual funds have a significant market share. In crisis of market, people are investing more in mutual funds. Although mutual fund has a tremendous scope of growth. Some people are investing in insurance & G-sec. because of purpose of security. The major part of the sample taken has invested in the Mutual Funds. Still there are few who are not investing in MF. TABLE: .2FACTORS INFLUENCING THE INVESTMENT DECISION OF INVESTORS: Influencing factor Broker Friends Self No. of people 64 40 60 Percentage 32% 20% 30%
Magazine News
12 20
6% 10%
INTERPRETATION: There are many factors which influence the investment decision of the investors. It may be the current news (political, technological, financial, etc.), Magazines, friends, etc. in the study it proved that many people trust the brokers most for the investment decisions. These are the ones who have less experience. The “SelfEvaluation” is the next major factor. The experienced person trust himself thereafter he/she invests. Magazines and current News also matters. Any bad news can make a person change his/her decision TABLE:3 -AG E OF INVESTOR Age Under 30 30-40 46-60 60 and above No. of people 58 84 46 12 Percentage 29% 42% 23% 6%
INTERPRETATION: It is clear from above data that 42% of investor is belonging to age group of 30-40 who are predominantly private employees. TABLE: .4 -HOW STABLE YOUR CURRENT INCOME Income Very unstable Moderately unstable Moderately stable Very stable No.of people 02 24 106 68 Percentage 01% 12% 53% 34%
INTERPRETATION: From above data it is clear that majority of investors have moderately stable income. It means that they invest from their saving. And invest frequently. Only 1% has very unstable income so it is a healthy sign for mutual fund industry.
TABLE-5 AVERAGE INVESTMENT PERIOD OF INVESTORS:Investment Period Less than 6 months 6 months to 1 year 1 year to 3 year More than 3 year No. of people 14 20 62 84 Percentage 7% 10% 31% 42%
INTERPRETATION: The investment period is very important to increase the profits. The timing must be right enough to benefit from fluctuations. The smart investor decides it in advance for how much time he would be keeping his money in the market and when he should leave squaring-up. Many people consider the investment for 9 months – 2 years as a right option. Still some want to be invested for over 2 years. The least responded to the 3-9 months period TABLE: .6 PREFERENCES IN MUTUAL FUNDS:Sector Equity-Normal ELSS Balanced Debt Other No. of people 58 52 32 54 4 Percentage 29% 26% 16% 27% 2%
INTERPRETATION: There are different types of mutual funds available in the market according to the needs of the investors. There are Equity funds, ELSS, Income Funds, Balanced Funds, etc. The highest sought after fund is the Income fund which offers a regular income through investments in the Govt. Bonds. The risk is also low in this. It is followed by the Equity Fund which offers higher returns but it is riskier also. Some people would like to have Equity Linked Saving Schemes (ELSS). This provides some exemption in the Tax also. TABLE:7 -EXPECTED RATE OF RETURN Rate of return 0-10% 10-20% 20-30% 30 & above No of people 24 52 108 16 Percentage 12% 26% 54% 8%
INTERPRETATION: From above data I found that in current scenario of financial market nobody can expect return of more than 10%. There are 54% investors expect the return of 20-30% in a period for 1yea to 3 year.
Table:8RISK TAKEN BY PEOPLE Risk taken High Medium Low No. of people 26 142 32 Percentage 13% 71% 16%
INTERPRETATION: People invest in mutual fund always seeks high return with low risk. But in this case 71% people want to go beyond the low risk level and to achieve high growth. There are still 13% people who can bear high risk in this financial crisis.
TABLE: 9EXPERIENCE IN THE MARKET:Experience Less then 1 year 1 to 4 year More than 4 year No. of people 52 42 106 Percentage 26% 21% 53%
INTERPRETATION: The experience in the market was the factor which influenced the investments. There are some people who have experience of less than a year. These are those investors who entered into the market after noticing the rise in the market. The achievement of 21,000 marks by SENSEX was motivational force in this. Major part was having vast experience that is of more than 4 years. These are the ones who have been in the market and saw it rising to conquer the 10.000 to 21000 peak
TABLE: 10- PREFERENCE IN MODE OF INVESTMENT:Mode of investment Mahindra & Mahindra Tata other No. of people 46 68 76 Percentage 23% 34% 38%
INTERPRETATION: The investor of mutual fund follows the different mode of investment. In such a volatile market majority of people invest in Kotak about 36%.
CONCLUSION
Winning with stocks means performing at least as well as a major market index over the long haul. If one can sidestep the common investor mistakes, then one has taken the first and biggest step in the right direction. The most important consideration while making investment decision was Return aspect followed by Safety, Liquidity and Taxability Diversified stock portfolios have offered superior long term inflation Protection. Equities are especially important today with people living longer and retiring early. To understand stock funds, one needs to be familiar with the characteristics of the different types of companies they hold. Portfolio managers have done a fairly good job in generating positive returns. It may lead to gain investors confidence. On the basis of the analysis the performance of the schemes during the study period can be concluded to be good. Those who want to eliminate the risk element but still want to reap a better then it would be advisable to go for balanced fund and tax saving schemes which ensure both safety and returns. So the future of mutual funds in India is bright, because it meets investor s needs perfectly. This will give boost to Indian investors and will attract foreign investors also. It will lead to the growth of strong institutional framework that can support the capital markets in the long run.
RECOMMENDATIONS
1. To build a successful investment strategy you should carefully structure your investment plan to achieve your goals without taking more risk than you can afford you are comfortable with. You also need to consider how much time you have to reach various goals and your personal circumstances 2. No single asset is appropriate for all your goals at any given point of the in life you will probably want to keep apart your money secure and accessible invested for growth but the proportions of safety income and growth will change as prepare for and then move past successive investment objectives 3. Asset allocation which means combining different types of assets in varying amounts depending on your goals is the key to successful investment strategy 4. The key to building wealth is to start investing early and regularly these regular amounts of saving however small can grow into a substantial amount of wealth over the long term 5. A wise investment strategy may be to have an investment portfolio that also consists of more than just granted return shames. That way one is protected against the impact of future inflation. Furthermore unlike in the past when the interest rate was flat rate were flat and administered today interest rates are market driven and volatile.
BIBLIOGRAPHY
1. WEBSITES: ? www.mutualfundsindia.com ? www.easymf.com ? www.amfiindia.com ? www.eassytown.com ? www.google.com ? www.valueresearchonline.com ? www.investopedia.com ? www.kotakmahindra.in ? NSE:www.nseindia.com ? SEBI:www.sebi.gov.in ? KOTAK BANK:www.kotak.com ? KOTAL MUTUAL FUND:www.kotakmutualfund.com BOOKS AND MAGAZINES ? Security analysis & Portfolio management by V.K. Bhalla
QUESTIONNAIRE
Name: Address:
Sex: Contact No:
1. Where you will invest your money in current scenario? A. Mutual Fund C. Fixed deposit E. Govt. bonds and securities 2. Which factor influences your investment decision? A. Broker C. Self E. News 3. What is your age? A. Under 30 C. 44-59 B. 30-40 D. 60 and over B. Friend D. Magazine F. Others B. Insurance D. Stock market
4. How stable is your current income source? A. Very unstable C. Moderately stable B. Moderately unstable D. Very Stable
5. How much long do you prefer your investment? A. Less than 6 Months C. 1- 3 Years B.6 Months -1 Year D. Greater than 3 years
6. Which scheme of mutual fund do you prefer for investment? A. Equity C. Balanced E. Other 7. Your expected rate of return? A.0-10% C.20-30% 8. How much you can take risk? A. High B. Medium C. Low B.10-20% D.30& above B.ELSS D. Debt
9. How experienced are you at investing in bonds or bond mutual funds? A. < 1 Year B. 1 – 4 Years C. > 4 Year
10. Which company’s mutual fund attracts you more? A. Mahindra & mahindra B. Tata C. other
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
WHAT IS AMC? WHO CONTROL AMC FUCTIONS? WHAT IS THE ROLE OF SEBI? HOW MUTUAL FUND WORKS? WHAT IS AMFI? WHAT IS ADVANTAGE AND DIS ADVANTAGE OF MUTUAL FUND? HOW MANY STOCK TYPE OF MUTUAL FUNDS ARE THERE?. WHAT IS THE ROLE OF A FUND MANAGER? HOW MANY AMC’S ARE THERE IN INDIA? WHICH IS THE BIGGEST AMC IN INDIA?
•
WHAT IS AMC?
AMC stands for asset Mgt Company. Its provide comprehensive Services to the banks and financial institutions to manage the market risk,and design strategies to reduce risk and implements. And also provide the portfolio risk based on balance sheet to reduce risks like interest rate risk, liquidity risk,yield risk etc
• WHO CONTROL AMC FUCTIONS?
Function of AMC control by SEBI
•
WHAT IS THE ROLE OF SEBI?
To protect the interest of the investors, SEBI formulates policies and regulates the mutual funds. It notified regulations in 1993 (fully revised in 1996) and issues guidelines from time to time. MF either promoted by public or by private sector entities including one promoted by foreign entities is governed by these Regulations. SEBI approved Asset Management Company (AMC) manages the funds by making investments in various types of
securities. Custodian, registered with SEBI, holds the securities of various schemes of the fund in its custody. The general power of superintendence and direction over AMC is vested with the trustees. According to SEBI Regulations, two thirds of the directors of trustee company or board of trustees must be independent. They should not be associated with the sponsors. 50% of the directors of AMC must be independent. All mutual funds are required to be registered with SEBI before they launch any scheme.
•
How Mutual Fund Works?
Every mutual fund has a goal - either growing its assets (capital gains) and/or generating income (dividends) for its investors. Distributions in the form of capital gains (short-term and long-term) and dividends may be passed on (paid) to shareholders as income or reinvested to purchase more shares. For tax purposes, keep track of your distributions and cost basis of purchased/reinvested shares. Like any business, mutual funds have risks and costs associated with returns. As a shareholder, the risks of a fund and the expenses associated with fund's operation directly impact your return.
•
WHAT IS AMFI?
The Association of Mutual Funds in India (AMFI) is dedicated to developing the Indian Mutual Fund Industry on professional, healthy and ethical lines and to enhance and maintain standards in all areas with a view to protecting and promoting the interests of mutual funds and their unit holders.
•
WHAT IS ADVANTAGE AND DISADVANTAGE OF MUTUAL FUND?
Advantages What are the key advantages of mutual fund investing? Diversification
Professional Management: Convenience: .Liquidity: Minimum Initial Investment: .Disadvantages Risks and Costs:
•
HOW MANY STOCK TYPE OF MUTUAL FUND?
1.
Large Cap: Primarily invests in "Blue-chip" companies - large, well-known industrials, utilities,
technology, and financial services companies with large market capitalization. Large cap stocks are perceived to be less risky than smaller capitalized companies. Mid Cap: Primarily invests in companies whose market capitalization is smaller than large caps but larger than small caps. Mid caps are generally considered more risky than large cap stocks but have a higher return expectation. Small Cap: Primarily invests in emerging companies, thought to have potential for future growth and profit. Small caps are generally considered the riskiest stocks compared to larger capitalized firms but carry the expectation of higher returns. Small cap funds are subject to greater volatility than those in other asset categories. International: Primarily invests in stocks traded on foreign exchanges but purchased in the United States by U.S. fund companies. International funds are subject to additional risks such as currency fluctuation, political instability and the potential for illiquid markets. Sector: Primarily invests in specific industry sectors such as technology, financials, health, or energy. Since sector funds focus their investments on companies involved in a specific industry sector, the funds may involve a greater degree of risk that an investment in other mutual funds with greater diversification.
2.
3.
4.
5.
•
WHAT IS THE ROLE OF A FUND MANAGER?
The individuals involved in fund management (mutual, pension, trust funds or hedge funds) must have a high level of educational and professional credentials and appropriate investment managerial experience to qualify for this position. Investors should look for long-term, consistent fund performance with a fund manager whose tenure with the fund matches its performance time period. The whole point of investing in a fund is to leave the investment management function to the professionals. Therefore, the quality of the fund manager is one of the key factors to consider when analyzing the investment quality of any particular fund
•
HOW MANY MUTUAL FUNDS ARE ASSOCIATED WITH AMFI?
46
•
WHICH IS THE OLDEST AMC IN INDIA?
UTI
Bibliography
AMFI: www.amfiindia.com NSE: www.nseindia.com VALUE RESERCH GOOGLE: www.google.com SEBI: www.sebi.gov.in KOTAK BANK: www.kotak.com KOTAL MUTUAL FUND: www.kotakmutualfund.com
doc_694077881.doc