Documentos de Académico
Documentos de Profesional
Documentos de Cultura
On
PERFORMANCE
COMPARISON OF
DIFFERENT MUTUAL
FUNDS
ACKNOWLEDGEMENT
With limitless humility, I would like to praise and thank God, the Supreme and the merciful,
who blessed me with all the favorable circumstances to go through this project.
I am highly grateful to my project coordinator, Mr. Rohit Pal Singh for all his guidance and
support during the course of this training. I am indebted to all the staff members of ICICI
Prudential who were always ready to help me.
I wish to express my profound gratitude to Dr. K.Santi Swarup, Deptt. Of Management,
Faculty of Social Sciences for his learned guidance, constant encouragement and valuable
suggestions.
I am highly obliged to my parents, brother and sister. I am also indebted to my venerable
relatives and friends whose love and affection has played a vital role during the course of this
training.
-Kavita Singh
CONTENTS
ACKNOWLEDGEMENT............................................................................................ 2
OBJECTIVES OF THE STUDY.................................................................................... 4
COMPANYS PROFILE.............................................................................................. 5
INTRODUCTION...................................................................................................... 8
MUTUAL FUND INDUSTRY....................................................................................... 8
HISTORY OF MUTUAL FUND INDUSTRY.................................................................10
WHAT IS A MUTUAL FUND?.................................................................................. 14
MUTUAL FUNDS STRUCTURE............................................................................... 16
TYPES OF MUTUAL FUNDS................................................................................... 26
BENEFITS OF INVESTING THROUGH A MUTUAL FUND..........................................34
DISADVANTAGES OF MUTUAL FUND....................................................................35
PERFORMANCE MEASURES OF MUTUAL FUNDS...................................................36
PERFORMANCE COMPARISON OF MUTUAL FUNDS OF FIVE COMPANIES..............40
CALCULATION OF RISK FREE RATE OF RETURN....................................................42
Birla Sun Life Mutual Fund................................................................................... 43
Kotak Mahindra Mutual Fund............................................................................... 48
Escorts Mutual Fund............................................................................................. 53
ICICI Prudential Mutual Fund................................................................................ 58
Reliance Mutual Fund........................................................................................... 63
DATA ANALYSIS AND INTERPRETATION.................................................................74
CROSS TABULATION............................................................................................. 86
RESULTS AND FINDINGS...................................................................................... 91
SUGGESTIONS...................................................................................................... 92
CONCLUSIONS..................................................................................................... 93
REFERENCES........................................................................................................ 94
APPENDIX............................................................................................................. 95
To study about the risk factors involved in the Mutual Funds and How to analyze it?
To study the performance indices that can be used for mutual fund comparison.
To compare mutual funds of selected five companies on the basis of their return and
Sharpe Index.
To study the people in which age and income group prefer mutual funds over other
investment options.
COMPANYS PROFILE
ICICI Prudential Asset Management Company enjoys the strong parentage of Prudential plc,
one of UK's largest players in the insurance & fund management sectors and ICICI Bank, a
well-known and trusted name in financial services in India.
ICICI Prudential Asset Management Company, in a span of just over eight years, has forged a
position of pre-eminence in the Indian Mutual Fund industry as one of the largest asset
management companies in the country with average assets under management of Rs.
83,069.89 Crore (as of April 30, 2010).
The Company manages a comprehensive range of schemes to meet the varying investment
needs of its investors spread across 230 cities in the country.
Average Assets Under Management
Number of Funds Managed
Sponsors
Securities and Exchange Board of India, vide its letter no. MFD/PM/567/02 dated June 4,
2002, has accorded its approval in recognizing ICICI Bank Ltd. as a co-sponsor consequent
to the merger of ICICI Ltd. with ICICI Bank Ltd.
ICICI Bank is India's second-largest bank with total assets of Rs. 3,997.95 billion (US$ 100
billion) at March 31, 2008 and profit after tax of Rs. 41.58 billion for the year ended March
31, 2008. ICICI Bank is second amongst all the companies listed on the Indian stock
exchanges in terms of free float market capitalization Free float holding excludes all
promoter holdings, strategic investments and cross holdings among public sector entities.
The Bank has a network of about 1,308 branches and 3,950 ATMs in India and presence in 18
countries. ICICI Bank offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and through its
specialised subsidiaries and affiliates in the areas of investment banking, life and non-life
insurance, venture capital and asset management.
The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in
Unites States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International
Finance Centre and representative offices in United Arab Emirates, China, South Africa,
Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches
in Belgium and Germany.
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National
Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on
the New York Stock Exchange (NYSE). (Source: Overview at www.icicibank.com).
Headquartered in London, Prudential plc and its affiliated companies together constitute one
of the world's leading financial services groups. Prudential provides insurance and financial
services in a number of markets around the world, including in Asia, the US, the UK, Europe
and the Middle East.
Founded in 1848, the company has 249 billion in funds under management (as of 31
December 2008) and more than 21 million customers worldwide. Prudential has been writing
life insurance in the United Kingdom for 160 years and has had the largest long-term fund in
the United Kingdom, for over a century. In the United Kingdom, Prudential is a leading
retirement savings and income solutions and life assurance provider. M&G is Prudential's
fund management business in the United Kingdom and Europe, with almost 140 billion in
funds under management (as of 31 December 2008).
In the United States, Jackson National Life, which we acquired in 1986, is one of the largest
life insurance companies providing retirement savings and income solutions. In Asia,
Prudential is the leading Europe-based life insurer in terms of market coverage and number of
top three ranking positions. It is also one of the largest and most successful fund managers in
Asia with more top five market rankings than any other regional player.
Today, Prudential has life insurance and fund management operations spanning 13 diverse
markets in Asia. Prudential plc is incorporated and with its principal place of business in the
United Kingdom. It is not affiliated in any manner with Prudential Financial, Inc., a company
whose principal place of business is in the United States.
Integrity
Customer First
Boundaryless
Ownership
Passion.
MANAGEMENT TEAM
FUND MANAGERS
Mr. S. Naren
Mr. Chaitanya Pandey
BOARD OF DIRECTORS
Asset Management Company
INTRODUCTION
1. Sponsors
They are the individuals who think of starting a mutual fund. The Sponsor approaches SEBI,
the market regulator and also the regulator for mutual funds. Not everyone can start a mutual
fund. SEBI will grant a permission to start a mutual fund only to a person of integrity, with
significant experience in the financial sector and a certain minimum net worth. These are just
some of the factors that come into play.
2. Trust
Once SEBI is satisfied with the credentials and eligibility of the proposed Sponsors, the
Sponsors then establish a Trust under the Indian Trust Act 1882. Trusts have no legal identity
in India and thus cannot enter into contracts. Hence the Trustees are the individuals
authorized to act on behalf of the Trust. Contracts are entered into in the name of the
Trustees. Once the Trust is created, it is registered with SEBI, after which point, this Trust is
known as the mutual fund.
the
investors (unit holders) money. In return for this money management on behalf of the
mutual fund, the AMC is paid a fee for the services provided. This fee is to be borne by
the investors and is deducted from the money collected from them.
The AMC has to be approved by SEBI and it functions under the supervision of its Board of
Directors, and also under the direction of the Trustees and the regulatory framework
established by SEBI. It is the AMC, which in the name of the Trust, that floats new schemes
and manages these schemes by buying and selling securities.
1992-93
Amount
Mobilized
Assets Under
Management
Mobilization as
% of gross
Domestic
Savings
UTI
11,057
38,247
5.2%
Public
Sector
1,964
8,757
0.9%
Total
13,021
47,004
6.1%
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
industry now functions under SEBI Regulations, 1996. At the end of January 2003, there
were 33 mutual funds with total assets of Rs. 1,21,805 crores. The UTI with Rs. 44,541
crores of AUM 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.
Growth in Assets under Management
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.
The Assets under Management(AUM) have grown at a rapid pace over the past few years at a
CAGR of 35% for the past few years at a CAGR of 35 percent for the five- year period from
31 March, 2005 to 31 March, 2009. Over the 10-year period from 1999 to 2009
encompassing varied economic cycles, the industry grew at 22% CAGR.
This growth was despite two falls in the AUM the first being after year 2001 due to dotcom
bubble burst and the second in 2008, consequent to the global economic crisis.
11
12
WHAT IS AN INVESTMENT?
In finance, the purchase of a financial product or other item of value with an expectation of
favorable future returns. In general terms, investment means the use money in the hope of
making more money.
There are three fundamentals of investment :
Safety
Liquidity
Return
INVESTMENT AVENUES
Debt
Investments
Insurance
Equity
Primary Market
Secondary Market
PPF
Post Office
1.
2.
3.
4.
5.
6.
7.
8.
Post Office
Public Provident Fund
Bank Fixed Deposits
Government Securities or Gilts
RBI Taxable Bonds
Insurance
Company Debentures
Company Fixed Deposits
9. Infrastructure Bonds
1.
2.
3.
4.
5.
Mutual Funds
Shares and Stock Markets
Gold & Silver
Property
Foreign Exchange
A mutual fund is a legal vehicle that enables a collective group of individuals to:
i.
Pool their surplus funds and collectively invest in instruments / assets for a
ii.
iii.
s, on a proportionate basis, get mutual fund units for the sum contributed t
d from investors is invested into shares, debentures and the other securities
e fund manager realize gains or losses, and collects dividend or interest inc
An individual as a single investor is likely to have lesser amount of money at disposal than
say, a group of friends put together. Now, lets assume that this group of individuals is a
Hence, technically speaking, a mutual fund is an investment vehicle which pools investors
money and invests the same for and on behalf of investors, into stocks, bonds, money market
instruments and other assets. The money is received by the AMC with a promise that it will
be invested in a particular manner by a professional manager (commonly known as fund
managers). The fund managers are expected to honor this promise. The SEBI and the Board
of Trustees ensure that this actually happens.
When an investor subscribes for the units of a mutual fund, he becomes part owner of the
assets of the fund in the same proportion as his contribution amount put up with the corpus
(the total amount of the fund). Mutual Fund investor is also known as a mutual fund
shareholder or a unit holder.
Any change in the value of the investments made into capital market instruments (such as
shares, debentures etc.) is reflected in the Net Asset Value (NAV) of the scheme. NAV is
defined as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a
scheme is calculated by dividing the market value of scheme's assets by the total number of
units issued to the investors.
For example:
A. If the market value of the assets of a fund is Rs. 100,000
B. The total number of units issued to the investors is equal to 10,000.
C. Then the NAV of this scheme = (A)/(B), i.e. 100,000/10,000 or 10.00
D. Now if an investor 'X' owns 5 units of this scheme
E. Then his total contribution to the fund is Rs. 50 (i.e. Number of units held multiplied
by the NAV of the scheme).
These regulations have since been replaced by the SEBI (Mutual Funds) Regulations, 1996.
The structure indicated by the new regulations is indicated as under. A mutual fund comprises
four separate entities, namely sponsor, mutual fund trust, AMC and custodian. The sponsor
establishes the mutual fund and gets it registered with SEBI.
The mutual fund needs to be constituted in the form of a trust and the instrument of the trust
should be in the form of a deed registered under the provisions of the Indian Registration Act,
1908.
The Custodian maintains the custody of the securities in which the scheme invests. It also
keeps a tab on corporate actions such as rights, bonus and dividends declared by the
companies in which the fund has invested. The Custodian is appointed by the Board of
Trustees. The Custodian also participates in a clearing and settlement system through
approved depository companies on behalf of mutual funds, in case of dematerialized
securities.
The sponsor is required to contribute at least 40% of the minimum net worth (Rs. 10 crore)
of the asset management company. The board of trustees manages the MF and the sponsor
executes the trust deeds in favour of the trustees. It is the job of the MF trustees to see that
16
schemes floated and managed by the AMC appointed by the trustees are in accordance with
the trust deed and SEBI guidelines
TYPES OF RETURN
There are three ways, where the total returns provided by mutual funds can be enjoyed by
investors:
1. Income is earned from dividends on stocks and interest on bonds. A fund pays out
nearly all income it receives over the year to fund owners in the form of a distribution.
2. If the fund sells securities that have increased in price, the fund has a capital gain.
Most funds also pass on these gains to investors in a distribution.
3. If fund holdings increase in price but are not sold by the fund manager, the fund's
shares increase in price. You can then sell your mutual fund shares for a profit. Funds
will also usually give you a choice either to receive a check for distributions or to
reinvest the earnings and get more shares.
17
Sharpe ratio. These statistical measures are historical predictors of investment risk/volatility
and are all major components of modern portfolio theory (MPT).
The MPT is a standard financial and academic methodology used for assessing the
18
Individual tolerance for risk varies, creating a distinct "investment personality" for each
investor. Some investors can accept short-term volatility with ease, others with near panic. So
whether you consider your investment temperament to be conservative, moderate or
aggressive, you need to focus on how comfortable or uncomfortable you will be as the value
of your investment moves up or down.
Managing Risks
Mutual funds offer incredible flexibility in managing investment risk. Diversification and
Automatic Investing (SIP) are two key techniques you can use to reduce your investment risk
considerably and reach your long-term financial goals.
Diversification
When you invest in one mutual fund, you instantly spread your risk over a number of
different companies. You can also diversify over several different kinds of securities by
investing in different mutual funds, further reducing your potential risk.
Diversification is a basic risk management tool that you will want to use throughout your
lifetime as you rebalance your portfolio to meet your changing needs and goals. Investors,
who are willing to maintain a mix of equity shares, bonds and money market securities have a
greater chance of earning significantly higher returns over time than those who invest in only
the most conservative investments.
Additionally, a diversified approach to investing -- combining the growth potential of equities
with the higher income of bonds and the stability of money markets -- helps moderate your
risk and enhance your potential return.
The Unitholders of the Scheme can benefit by investing specific Rupee amounts periodically,
for a continuous period. Mutual fund SIP allows the investors to invest a fixed amount of
Rupees every month or quarter for purchasing additional units of the Scheme at NAV based
prices.
Here is an illustration using hypothetical figures indicating how the SIP can work for
investors:
20
Suppose an investor would like to invest Rs.1,000 under the Systematic Investment Plan on a
quarterly basis.
Amount Invested (Rs.)
Initial
1000
Investment
1
1000
2
1000
3
1000
4
1000
5
1000
6
1000
7
1000
8
1000
9
1000
10
1000
11
1000
TOTAL
12,000
Average unit cost Rs 12,000/1,435.9 = Rs 8.36
10
No. of Units
Purchased
100
8.20
7.40
6.10
5.40
6.00
8.20
9.25
10.00
11.25
13.40
14.40
-
121.95
135.14
163.93
185.19
166.67
121.95
108.11
100.00
88.89
74.63
69.44
1,435.90
TYPES OF RISKS
All investments involve some form of risk. Even an insured bank account is subject to the
possibility that inflation will rise faster than your earnings, leaving you with less real
21
purchasing power than when you started (Rs. 1000 gets you less than it got your father when
he was your age).
Consider these common types of risk and evaluate them against potential rewards when you
select an investment.
Market Risk
At times the prices or yields of all the securities in a particular market rise or fall due to broad
outside influences. When this happens, the stock prices of both an outstanding, highly
profitable company and a fledgling corporation may be affected. This change in price is due
to "market risk".
Inflation Risk
Credit Risk
22
In short, how stable is the company or entity to which you lend your money when you invest?
How certain are you that it will be able to pay the interest you are promised, or repay your
principal when the investment matures?
Changing interest rates affect both equities and bonds in many ways. Investors are reminded
that "predicting" which way rates will go is rarely successful. A diversified portfolio can help
in offseting these changes.
Exchange Risk
A number of companies generate revenues in foreign currencies and may have investments or
expenses also denominated in foreign currencies. Changes in exchange rates may, therefore,
have a positive or negative impact on companies which in turn would have an effect on the
investment of the fund.
Investment Risk
The sectoral fund schemes, investments will be predominantly in equities of select companies
in the particular sectors. Accordingly, the NAV of the schemes are linked to the equity
performance of such companies and may be more volatile than a more diversified portfolio of
equities.
Changes in Government policy especially in regard to the tax benefits may impact the
business prospects of the companies leading to an impact on the investments made by the
fund.
REGULATORY AUTHORITIES
23
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.
According to SEBI Regulations, two thirds of the directors of Trustee Company or board of
trustees must be independent. The Association of Mutual Funds in India (AMFI) reassures the
investors in units of mutual funds that the mutual funds function within the strict regulatory
framework. Its objective is to increase public awareness of the mutual fund industry. AMFI
also is engaged in upgrading professional standards and in promoting best industry practices
in diverse areas such as valuation, disclosure, transparency etc.
25
26
Open-ended schemes
These funds are sold at the NAV based prices, generally calculated on every business day.
These schemes have unlimited capitalization, open-ended schemes do not have a fixed
maturity - i.e. there is no cap on the amount you can buy from the fund and the unit capital
can keep growing. These funds are not generally listed on any exchange.
Open-ended funds are bringing in a revival of the mutual fund industry owing to increased
liquidity, transparency and performance in the new open-ended funds promoted by the private
sector and foreign players. Open-ended funds score over close-ended ones on several counts.
Some of these are listed below:
a) Any time exit option : The issuing company directly takes the responsibility of providing
an entry and an exit. This provides ready liquidity to the investors and avoids reliance on
transfer deeds, signature verifications and bad deliveries.
b) Tax advantage : Though Budget 2004 proposals envisage a tax rate of 20.91%(Corporate
investors) and 13.06875% (Non-Corporate investors) on dividend distribution made by the
Debt funds, the funds continue to remain attractive investment vehicles. In equity plans there
is no distribution tax.
27
c) Any time entry option : An open-ended fund allows one to enter the fund at any time and
even to invest at regular intervals (a systematic investment plan).
The open ended funds offered by ICICI Prudential Mutual Fund are
Gilt-Treasury
Gilt-Investment
Balanced Fund
Growth Fund
Tax Plan
FMCG Fund
Technology Fund
28
The closed-ended fund managed by ICICI Prudential Mutual Fund is ICICI Premier.
Classification according to investment objectives
Objectives
Mutual funds have specific investment objectives such as growth of capital, safety of
principal, current income or tax-exempt income. In general mutual funds fall into three
general categories:
Fixed-Income funds invest in government or corporate securities that offer fixed rates
of return.
i) Growth Funds
These funds seek to provide growth of capital with secondary emphasis on dividend. They
invest in shares with a potential for growth and capital appreciation. Because they invest in
well-established companies where the company itself and the industry in which it operates
are thought to have good long-term growth potential, growth funds provide low current
income. Growth funds generally incur higher risks than income funds in an effort to secure
more pronounced growth.
These funds may invest in a broad range of industries or concentrate on one or more industry
sectors. Growth funds are suitable for investors who can afford to assume the risk of potential
loss in value of their investment in the hope of achieving substantial and rapid gains.
They are not suitable for investors who must conserve their principal or who must maximize
current income.
ii) Growth and Income Funds
Growth and income funds seek long-term growth of capital as well as current income. The
investment strategies used to reach these goals vary among funds. Some invest in a dual
29
of growth stocks,
or fixed-income
securities such as corporate bonds and money market instruments. Others may invest in
growth stocks and earn current income by selling covered call options on their portfolio
stocks. Growth and income funds have low to moderate stability of principal and moderate
potential for current income and growth. They are suitable for investors who can assume
some risk to achieve growth of capital but who also want to maintain a moderate level of
current income.
iii) Fixed-Income Funds
The goal of fixed income funds is to provide current income consistent with the preservation
of capital. These funds invest in corporate bonds or government-backed mortgage securities
that have a fixed rate of return. Within the fixed-income category, funds vary greatly in their
stability of principal and in their dividend yields. High-yield funds, which seek to maximize
yield by investing in lower-rated bonds of longer maturities, entail less stability of principal
P
o
t
e
n
ti
a
l
R
e
t
u
r
n
Low
Risk
30
High
Some fixed-income funds seek to minimize risk by investing exclusively in securities whose
timely payment of interest and principal is backed by the full faith and credit of the Indian
Government. Fixed-income funds are suitable for investors who want to maximize current
income and who can assume a degree of capital risk in order to do so.
iv) Balanced Fund
The Balanced fund aims to provide both growth and income. These funds invest in both
shares and fixed income securities in the proportion indicated in their offer documents. Ideal
for investors who are looking for a combination of income and moderate growth.
v) Money Market Funds/Liquid Funds
For the cautious investor, these funds provide a very high stability of principal while seeking
a moderate to high current income. They invest in highly liquid, virtually risk-free, short-term
debt securities of agencies of the Indian Government, banks and corporations and Treasury
Bills. Because of their short-term investments, money market mutual funds are able to keep a
virtually constant unit price; only the yield fluctuates.
Therefore, they are an attractive alternative to bank accounts. With yields that are generally
competitive with - and usually higher than -- yields on bank savings account, they offer
several advantages. Money can be withdrawn any time without penalty. Although not insured,
money market funds invest only in highly liquid, short-term, top-rated money market
instruments.
Money market funds are suitable for investors who want high stability of principal and
current income with immediate liquidity.
vi) Specialty/Sector Funds
These funds invest in securities of a specific industry or sector of the economy such as health
care, technology, leisure, utilities or precious metals. The funds enable investors to diversify
31
holdings among many companies within an industry, a more conservative approach than
investing directly in one particular company.
Sector funds offer the opportunity for sharp capital gains in cases where the fund's industry is
"in favor" but also entail the risk of capital losses when the industry is out of favor. While
sector funds restrict holdings to a particular industry, other specialty funds such as index
funds give investors a broadly diversified portfolio and attempt to mirror the performance of
various market averages.
Index funds generally buy shares in all the companies composing the BSE Sensex or NSE
Nifty or other broad stock market indices. They are not suitable for investors who must
conserve their principal or maximize current income.
A summary is presented in the table below of the various funds and their investment
objectives.
32
33
Characteristics
FD's
Bonds
Mutual Funds
Accessibility
Low
Low
High
Tenor
Fixed(medium)
Fixed(Long)
No Lock-in
Min. Investment
Rs.1000
Rs.5000
Rs.5000
Tax Benefits
None
80L, 88
Dividend Tax-Free
Liquidity
Low
Very Low
Very High
Convenience
Medium
Tedious
Very High
Transparency
None
None
Very High
Equity Funds
Debt Funds
34
buying and selling your fund units, provide fund information and answer questions about
your account status.
vi)Liquidity
In open-ended schemes, you can get your money back promptly at net asset value related
prices from the mutual fund itself.
vii) Transparency
You get regular information on the value of your investment in addition to disclosure on the
specific investments made by the mutual fund scheme.
36
37
individual stocks. For a well-diversified portfolio the total risk is equal to systematic risk.
Rankings based on total risk (Sharpe measure) and systematic risk (Treynor measure) should
be identical for a well-diversified portfolio, as the total risk is reduced to systematic risk.
Therefore, a poorly diversified fund that ranks higher on Treynor measure, compared with
another fund that is highly diversified, will rank lower on Sharpe Measure.
Jenson Model
Jenson's model proposes another risk adjusted performance measure. This measure was
developed by Michael Jenson and is sometimes referred to as the Differential Return Method.
This measure involves evaluation of the returns that the fund has generated vs. the returns
actually expected out of the fund given the level of its systematic risk. The surplus between
the two returns is called Alpha, which measures the performance of a fund compared with the
actual returns over the period. Required return of a fund at a given level of risk (Bi) can be
calculated as: Ri = Rf + Bi (Rm - Rf)
Where, Rm is average market return during the given period. After calculating it, alpha can
be obtained by subtracting required return from the actual return of the fund.
Higher alpha represents superior performance of the fund and vice versa. Limitation of this
model is that it considers only systematic risk not the entire risk associated with the fund and
an ordinary investor can not mitigate unsystematic risk, as his knowledge of market is
primitive.
Fama Model
The Eugene Fama model is an extension of Jenson model. This model compares the
performance, measured in terms of returns, of a fund with the required return commensurate
with the total risk associated with it. The difference between these two is taken as a measure
of the performance of the fund and is called net selectivity.
The net selectivity represents the stock selection skill of the fund manager, as it is the excess
return over and above the return required to compensate for the total risk taken by the fund
manager. Higher value of which indicates that fund manager has earned returns well above
the return commensurate with the level of risk taken by him.
39
40
DATA COLLECTION
The task of data collection begins after a research problem has been defined. While
deciding about the method of data collection to be used for the study, the researcher should
keep in mind two types of data viz, primary and secondary.
NAV and corresponding returns of 5 Mutual Funds Schemes:
In this study, we have selected the 5 mutual fund companies. Following is the NAV and
corresponding return of last 1 year starting from 1 st April, 2009 to 31st March, 2010. The
funds are chosen randomly from the available means.
Primary data may be described as those data that have been observed and recorded by the
researchers for the first time to their knowledge. Primary data can be classified into two
types:
Primary
data
can
be
collected
through
several
methods.
Some
of
the
Observation method
Interview method
Secondary data are collected from various websites as well as books, newspapers, research
papers.
41
42
Here, 91-DAY GOVERNMENT OF INDIA TREASURY BILLS are used as a riskfree asset, and they pay a fixed rate of interest and have exceptionally
low default risk.
The risk-free asset has zero variance in returns (hence is risk-free); it is also
uncorrelated with any other asset (by definition: since its variance is zero).
As a result, when it is combined with any other asset, or portfolio of assets, the
change in return and also in risk is linear.
Source:- www.rbi.com
Mont
h
Apr09
May09
Jun09
Jul-09
Aug09
Sep09
Oct09
Nov09
Dec09
Jan10
Feb10
Mar10
Yield
3.81
3.25
3.34
3.22
3.34
3.33
3.23
3.27
3.54
3.85
4.11
4.33
Therefore, the average yield = 3.55% is the risk free rate of return
No. of schemes
No. of schemes including
71
219
options
Gilt Fund
Equity Schemes
Debt Schemes
Short term debt Schemes
Equity & Debt
Money Market
16
64
106
17
10
0
Key Personnel:
Suvarna (COO), Abhay Palnitkar (CFO), Sanjay Singal (CMO), Bhavdeep Bhatt (Head
Products).
Monthly
Return
48.3132
183.76 - 195.43
6.3507
195.43 - 194.66
-0.394
194.66 - 216.34
216.34 - 216.34
11.1374
0
216.34 - 231.95
7.2155
231.95 - 223.08
-3.8241
223.08 - 239.77
7.4816
239.77 - 252.08
5.1341
252.08 - 241.77
-4.09
241.77 - 237.14
-1.915
237.14 - 252.91
6.6501
AVERAGE RETURN
6.84%
45
S t
Rp R f
6.84% 3.55%
13.39
S t 0.235
St
Sharpe Index =
free rate of return
31.9038
32.3045
33.0633
32.8129
33.0589
33.3736
33.9135
33.7813
33.8415
33.7849
33.7849
33.9643
Monthly
Return
-0.5514
1.2560
2.3489
-0.7573
0.7497
0.9519
1.6177
-0.3898
0.1782
-0.1673
0.0000
0.5310
AVERAGE RETURN
0.4806 %
S t
Rp R f
0.48% 3.55%
0.942
S t 3.259
St
Sharpe Index =
free rate of return
Monthly
Return
21.3184
Apr-09
7.13 - 8.65
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
8.65 - 10.66
10.66 - 10.28
10.28 - 11.44
11.44 - 11.44
11.44 - 12.19
12.19 - 11.42
11.42 - 12.24
12.24 - 12.87
12.87 - 12.15
12.15 - 12.09
12.09 - 12.85
23.2370
-3.5647
11.2840
0.0000
6.5559
-6.3167
7.1804
5.1471
-5.5944
-0.4938
6.2862
AVERAGE RETURN
5.4199 %
47
S t
Rp R f
5.4199% 3.55%
9.60
S t 0.1947
St
Sharpe Index =
Standard Deviation
Average
Sharpe
Rank
Return
Index
6.8383
Ratio
0.235
Growth
Birla Sun Life Income Fund
%
0.4806
-3.259
III
48
-Growth
Birla Sun Life Tax Plan (Growth)
%
5.4199
0.1947
II
The fund is promoted by Kotak Mahindra Bank, one of India's leading financial institutions
that offer financial solutions ranging from commercial banking, stock broking, life insurance
and investment banking. Kotak Mahindra Asset Management Company Limited, a wholly
owned subsidiary of Kotak Mahindra Bank, is the asset manager for Kotak Mahindra mutual
fund.
The company is headed by Uday Kotak of Kotak Bank as chairman and the fund
management function is headed by Sandesh Kirkire, chief executive officer.
Kotak
Mahindra mutual fund launched its schemes in December 1998 and today manages assets of
4, 34,504 investors in various schemes. Kotak Mahindra mutual fund was the first fund house
in the country to launch a dedicated gilt scheme investing only in government securities.
49
50
No. of schemes
No. of schemes including options
50
119
Equity Schemes
Debt Schemes
Short term debt Schemes
Equity & Debt
Money Market
Gilt Fund
22
74
8
1
0
7
Monthly
Return
10.7438
33.6543
-0.8790
9.5145
0.0000
7.3936
-3.5319
6.5249
3.3017
51
Jan-10
Feb-10
Mar-10
34.354 - 33.1050
33.1050 - 32.9910
32.9910 - 34.8960
-3.6357
-0.3444
5.7743
AVERAGE RETURN
5.7097%
S t
Rp R f
5.709% 3.55%
10.06
S t 0.2144
St
Sharpe Index =
free rate of return
Monthly
Return
2.0794
4.8342
-0.5249
3.1455
0.0000
0.5066
0.7907
1.6684
0.9080
-0.5250
52
Feb-10
Mar-10
14.5702 - 14.5597
14.5597 - 14.8148
-0.0721
1.7521
AVERAGE RETURN
1.2136%
S t
Rp R f
1.2136% 3.55%
1.59
S t 1.4634
St
Sharpe Index =
Standard Deviation
Monthly
Return
9.4058
53
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
9.98 - 13.789
13.789 - 13.447
13.447 - 14.894
14.894 - 14.894
14.894 - 15.918
15.918 - 14.9270
14.9270 - 16.06
16.06 - 16.675
16.675 - 15.85
15.85 - 15.8110
15.8110 - 17.1080
38.1663
-2.4802
10.7608
0.0000
6.8753
-6.2257
7.5903
3.8294
-4.9475
-0.2461
8.2031
AVERAGE RETURN
(in %age)
5.9110%
S t
Rp R f
5.911% 3.55%
11.66
S t 0.1637
St
54
Average
Sharp Index
Rank
Kotak Equity-FOF-Growth
Return
5.7097 %
Ratio
0.2144
1.2136 %
- 1.4634
III
(Growth)
Kotak Tax Saver-Scheme-
5.9110 %
0.1637
II
Growth
No. of schemes
No. of schemes including options
Equity Schemes
Debt Schemes
Short term debt Schemes
Equity & Debt
Money Market
Gilt Fund
13
30
13
7
4
4
0
2
55
36.6330
56.9001
55.5782
60.7149
60.7149
63.0134
60.7351
64.4480
68.3673
65.7441
64.8682
70.1250
AVERAGE RETURN
Monthly
Return
5.2204
55.3247
-2.3232
9.2423
0.0000
3.7857
-3.6156
6.1133
6.0813
-3.8369
-1.3323
8.1038
6.8970%
56
Rp R f
S t
6.897% 3.55%
15.252
S t 0.210
St
Sharpe Index =
- Risk free rate of return
28.2081
27.8613
28.1730
28.1160
28.1160
28.3370
28.4620
28.9679
28.9170
29.0567
29.0088
29.2065
AVERAGE RETURN
Monthly
Return
3.8838
-1.2294
1.1188
-0.2023
0.0000
0.7860
0.4411
1.7775
-0.1757
0.4831
-0.1649
0.6815
0.6167 %
57
Rp R f
S t
0.6167 3.55%
1.28
S t 2.289
St
Sharpe Index =
Risk free rate of return
27.2905
37.1072
38.6629
40.8944
40.8944
42.8570
41.6245
44.1556
45.8891
44.3687
42.6067
45.3606
Monthly
Return
5.0285
35.9711
4.1924
5.7717
0.0000
4.7992
-2.8758
6.0808
3.9259
-3.3132
-3.9713
6.4635
58
AVERAGE RETURN
5.1727 %
S t
Rp R f
5.1727 3.55%
10.449
S t 0.155
St
Sharpe Index =
Standard Deviation
Average
Sharp Index
Rank
Return
6.8970 %
Ratio
0.210
(Growth)
Escorts Income Plan
0.6167 %
-2.289
III
(Growth)
Escorts Tax Plan (Growth) 5.1727 %
0.155
II
59
No. of schemes
No. of schemes including options
Equity Schemes
Debt Schemes
Short term debt Schemes
Equity & Debt
Money Market
Gilt Fund
98
317
59
213
23
4
0
7
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
72.94 - 79.73
79.73 - 99.72
99.72 - 98.41
98.41 - 107.67
107.67 - 107.67
107.67 - 116.39
116.39- 111.17
111.17 - 118.36
118.36 - 123.01
123.01 - 116.67
116.67 - 116.96
116.96 - 125.02
AVERAGE RETURN
Monthly
Return
9.3090
25.0721
-1.3137
9.4096
0.0000
8.0988
-4.4849
6.4676
3.9287
-5.1541
0.2486
6.8912
4.8727%
S t
Rp R f
4.8727% 3.55%
8.189
S t 0.1615
St
Sharpe Index =
return - Risk free rate of return
Portfolio average
Standard
Deviation
61
Month
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
27.7341
29.4577
29.0718
29.4018
29.2732
29.2732
29.3743
29.5396
30.0600
29.8737
29.9950
29.7610
29.4577
29.0718
29.4018
29.2732
29.2732
29.3743
29.5396
30.0600
29.8737
29.9950
29.7610
29.9240
AVERAGE RETURN
Monthly
Return
6.2147
-1.3100
1.1351
-0.4374
0.0000
0.3454
0.5627
1.7617
-0.6198
0.4060
-0.7801
0.5477
0.6522 %
S t
Rp R f
0.6522% 3.55%
1.9472
S t 1.488
St
Sharpe Index =
return - Risk free rate of return
Portfolio average
Standard
Deviation
Month
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
56.88 - 63.84
63.84 - 85.02
85.02 - 85.95
85.95 - 100.63
100.63 - 100.63
100.63 - 107.97
107.97 - 106.29
106.29 - 113.55
113.55 - 121.69
121.69 - 118.88
118.88 - 120.47
120.47 - 127.34
AVERAGE RETURN
Monthly
Return
12.2363
33.1767
1.0939
17.0797
0.0000
7.2940
-1.5560
6.8304
7.1686
-2.3091
1.3375
5.7027
7.3379 %
S t
Rp R f
7.3379% 3.55%
9.9567
S t 0.3804
St
Sharpe Index =
return - Risk free rate of return
Portfolio average
Standard
Deviation
Particular
Average
Sharpe
Rank
Return
4.8724 %
Index Ratio
0.1615
II
(Growth Option)
ICICI Prudential Income Plan-
0.6522 %
-1.488
III
(Growth Option)
ICICI Prudential Tax Plan-
7.3379 %
0.3804
(Growth Option)
Reliance mutual fund, promoted by the Anil Dhirubhai Ambani (ADAG) group, is one of
the fastest growing mutual funds in India having doubled its assets over the last one year. In
March, 2006, the Reliance mutual fund emerged as the largest private sector fund house in
the country, overtaking Prudential ICICI which has been holding that position for many
years.
The sponsor of the fund is Reliance Capital Limited, the financial services arm of ADAG.
Reliance Capital Asset Management Limited, a wholly owned subsidiary of Reliance Capital
Limited, acts as the AMC to the fund. Directors of the company include Amitabh
Jhunjhunwala, a senior executive of ADAG.
No. of schemes
No. of schemes including options
Equity Schemes
Debt Schemes
57
185
60
100
15
2
0
6
64
Month
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Monthly
Return
7.9079
30.0957
-0.4210
8.1060
0.0000
6.5443
-6.3837
5.1419
3.0108
-4.2536
-0.6881
2.8296
4.3241
Rp R f
S t
4.3241% 3.55%
9.3198
S t 0.0831
St
Sharpe Index =
Portfolio average
Standard
Deviation
Month
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
30.4693
29.9680
30.0525
29.9510
29.9510
30.0241
30.2366
30.6048
30.5788
30.7195
30.6491
30.8515
AVERAGE RETURN
Monthly
Return
4.8586
-1.6453
0.2820
-0.3377
0.0000
0.2434
0.7084
1.2177
-0.0850
0.4601
-0.2292
0.6604
0.5111
66
Rp R f
S t
0.5111% 3.55%
1.54
S t 1.9719
St
Sharpe Index =
Portfolio average
Standard
Deviation
Month
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Monthly
Return
10.5662
30.8322
0.6334
9.3000
0.0000
7.2114
-3.9636
6.7212
67
Dec-09
Jan-10
Feb-10
Mar-10
16.9834
18.2047
17.6641
17.6091
18.2047
17.6641
17.6091
18.7234
AVERAGE RETURN
(in %age)
7.1911
-2.9696
-0.3114
6.3280
5.9616
S t
Rp R f
5.9616% 3.55%
9.22
S t 0.2613
St
Sharpe Index=
return - Risk free rate of return
Portfolio average
Standard
Deviation
Average
Sharp Index
Rank
68
Return
4.3241 %
Ratio
0.0831
II
Plan-(Growth Option)
Reliance Income Fund-Retail
0.5111 %
-1.9719
III
5.9666 %
0.2613
Sharp
e
Index
0.235
Kotak
Growth Plan
0.214
4
Escorts
Growth Plan
0.21
0.083
1
0.161
5
Retur
n
6.84
%
Kotak Growth
Plan
5.71
%
Escorts
Growth Plan
6.90
%
4.87
%
4.32
%
Sharp
e
Index
-3.259
Kotak Income
Plan
Escorts
Income Plan
1.463
4
-2.289
1.971
9
-1.488
The income funds of Kotak are doing better than others by the riskadjusted performance measure.
Retur
n
0.48%
71
Kotak Income
Plan
1.21%
Escorts
Income Plan
0.62%
0.65%
0.51%
Sharp
e
Index
0.194
7
0.163
7
Escorts Tax
0.155
72
Plan
Reliance Tax Saver
Plan
0.261
3
0.380
4
Retur
n
6.84
%
Kotak Growth
Plan
5.71
%
Escorts
Growth Plan
6.90
%
4.87
%
4.32
%
73
74
Research Methodology
a)
b)
c)
Universe: Agra
d)
e)
f)
g)
h)
75
Investment Willingness
Investment
Number Of Respondents
Yes
68
No
32
Total
100
We observe that 68% of all the respondents invest in mutual fund. We have got 32%
of our total respondents who do not invest in any mutual fund at all.
76
Awareness Level
Information
Number Of Respondents
Yes
56
No
24
Not Much
20
Total
100
We observe that 56% of all the respondents have complete information of mutual
funds. We have got 24% of our total respondents who do not have complete information of
mutual fund at all and 20% of our total respondents have some information of mutual fund.
3) Are you an investor, who is interested in getting good deduction from tax?
Information
Number Of Respondents
Yes
89
No
11
Total
100
77
We observe that 89% of all the respondents are interested in getting good deduction
from tax. We have got 11% of our total respondents who are not interested in getting good
deduction from tax at all.
Number Of
Respondents
Yes
76
No
24
Total
100
We observe that 76% of all the respondents knows mutual fund is a good instrument
of tax saving. We have got 24% of our total respondents who are mutual fund is a good
instrument of tax saving.
78
Income Group
Income group
Number Of Respondents
Upto 1,00,000
25
1,00,001-2,00,000
60
2,00,001-3,00,000
10
TOTAL
100
We observe that 25% of all the respondents fall under income group of less than
1,00,000. We have got 60% of our total respondents fall under income group of 1,00,0012,00,000 and 10% of our respondents fall under income group of 2,00,001-3,00,000 while 5%
of our respondents fall under income group of 3,00,000 & more.
Investment Holding
Investment
Number Of Respondents
Equity market
20
Mutual fund
54
Govt. bond
Real estate
Bank FD
48
Post office
26
Insurance
45
79
We observed that many respondents invest in more than one instrument of saving.
The people are not channelizing all of their savings in just one Investment Avenue.
80
Investment purpose
Number Of
Respondents
High return
20
Tax benefit
18
Saving
45
Wealth creation
10
Risk diversification
Total
100
We observe that 20% of all the respondents Invest for the purpose of high return, 18%
Invest for the purpose of tax benefit, 45% Invest for the purpose of saving, 10% Invest for the
purpose of wealth creation , 7% Invest for the purpose of risk diversification.
81
Number Of Respondents
Less than 5%
5%-10%
65
10-15%
20
15%-20%
Total
100
We observe that 3% of all the respondents get less than 5%, 65% of all the respondents get
between 5%-10%, 20% of all the respondents get between 10%-15%, 7% of all the
respondents get between 15%-20% and 5% of all the respondents get more than 20%.
9) Which types of funds would you like to prefer for your investment in mutual fund?
Fund Preference
Investment preference
Number Of
Respondents
Equity fund
65
Debt fund
11
Balanced fund
24
Total
100
82
We observe that 65% of all the respondents prefer investment in equity fund, 11% of
all the respondents prefer investment in Debt fund, and remaining 24% of all the respondents
prefer investment in balanced fund.
10) Give your preference for tax saving plan of ICICI PRUDENTIAL ?
ICICI Tax saving Plan
Number Of Respondents
Most preferred
12
Favorably preferred
16
Preferred
44
Least preferred
11
Not preferred
17
Total
100
We have observed that a large number of investors prefer ICICI tax plan.
83
CROSS TABULATION
84
NOTE: - The cross tabulation is done to analyze that how many investors in
various classes and age groups prefer Mutual Funds over other investment
options.
20-30
5
12
0
0
3
30-40
6
8
0
1
1
40-50
1
2
0
0
0
50-60
0
0
0
0
0
0
4
25
1
1
20
0
1
5
0
0
0
>60
0
0
0
0
0
Total
12
22
0
1
4
0
0
0
1
6
50
It is observed that people in the age group of 20-30 years are more open to mutual funds
holding and equity market. The share of mutual fund holding decreases as the age increases.
It is observed that people above the age of 40 prefer Life Insurance policies and Government
Securities over Equity and Mutual Funds.
85
Professional
Equity Market
Mutual Funds
Govt. Bonds
Real Estate
Bank Fixed
Deposits
Post Office
Life Insurance
Total
20-30
0
3
0
0
0
30-40
2
4
0
0
0
40-50
2
0
0
5
1
50-60
0
0
0
0
1
0
0
3
0
1
8
0
0
8
0
0
1
>60
Total
0
0
0
0
0
4
7
0
5
2
0
0
0
0
1
20
We observe that people in the age category of 30-40 and 40-50 years have a certain
preference for Equity holdings, Mutual Fund, Real Estate. However these people are very
conscious for the assured return and security.
86
20-30
1
0
0
1
1
30-40
3
6
0
4
2
40-50
0
0
0
0
1
50-60
0
0
0
0
0
0
0
3
2
0
17
0
0
1
0
0
1
>60
Total
0
0
0
0
0
5
6
0
5
4
0
0
0
2
0
22
We observe that maximum classification of investment is made in 30-40 age group investors.
Also they are holding a diversified portfolio which includes PPF, Postal Schemes, Fixed
Deposit, as well as Equity Schemes (Mutual fund, Stock Market).
Age group 20-30 holds investments in Equity Market, Bank FD, and some also hold their
Money in Real Estate. Business class people focuses more on high return with moderate
security of return so majority of their investment is made in Mutual Investment.
87
Retired Class
Equity Market
Mutual Funds
Govt. Bonds
Real Estate
Bank Fixed
Deposits
Post Office
Life Insurance
Total
20-30
0
0
0
0
0
30-40
0
0
0
0
0
40-50
0
0
0
0
0
50-60
0
0
0
1
1
0
0
0
0
0
0
0
0
0
2
0
4
>60
Total
0
0
0
0
0
0
0
0
1
1
1
3
4
3
3
8
It is observed in this category mostly consisting of retired people the preference for mutual
fund holding is low. However, Bank Fixed Deposits, Post Schemes, Life Insurance have the
greatest preference amongst people in this category.
88
89
SUGGESTIONS
There is need to build awareness of the new funds among the investors with constantly being
in contact with them.
Some of investors have asked for periodical market report about stock market so that they can
get the knowledge properly.
AMCs should go for increasing more awareness about different facilities of investment such
as SIP& STP among investors.
ICICI must try to locate hard working distributors who are providing good business in their
respective geographical area.
Investors are never going to accept the entry load during NFO. So such type of activity
should be avoided as much as possible.
The company should advertise their tax saving plan more so that they can gain more
customers.
90
CONCLUSIONS
The mutual fund investors prefer more of the equity fund as they want more return on their
money. They avoid going in the debt fund because they can get same amount of return on
their banks that is also without taking any risk.
Usually people preferred to invest in mutual fund during NFO rather than seeing the
performance of mutual fund scheme. Sometimes due to lack of detailed awareness about
mutual fund schemes the investors seek advice of distributors.
Investors feel that the AMC should go for more promotional activities & should try to come
up with new innovative schemes which can easily be understood by the investors.
Even after seeing the market crash in May 2006 people still thinks that mutual fund is much
reliable way to invest in stock market. So investors are not going for redemption during crash
& were ready to wait. In fact during the crash time many people were ready to invest in
mutual fund.
People will not accept the entry load if the company would any such type loads during NFO
because during NFO the investors were not sure whether the given scheme can really give
them better return or not.
91
REFERENCES
I.
II.
III.
IV.
V.
Value research
Economic times Newspaper
www.icicipruamc.com
www.reliancemutual.com
Indian Mutual Fund Industry The Future in a Dynamic Environment A report by KPMG.
VI.
VII.
www.nseindia.com
www.bseindia.com
VIII.
IX.
X.
XI.
www.rbi.org.in
www.kotakmutual.com
www.escortsmutual.com
www.mutualfund.birlasunlife.com
XII.
www.sebigov.in
XIII.
Gupta,Gitanjali and Panwar, Sudha, Investment Performance of Mutual Funds, April 2009.
APPENDIX
QUESTIONNAIRE
92
PART A
PART - B
1) Do you invest your saving in mutual fund?
a) Yes
b) No
a) Yes
b) No
4) Do you know mutual fund is a good instrument of tax saving?
a) Yes
b) No
5) Among which of the following income group you fall?
a) Upto 1,00,000
b) 1,00,001-2,00,000
c) 2,00,001-3,00,000
d) 3,00,001 & more
6) Which are the investments you hold at present?
a) Equity market
b) Mutual fund
c) Govt. bond
d) Real estate
e) Bank FD
f) Post office
g) Insurance
7) What is the Basic purpose of your investments?
a) High return
b) Tax benefit
c) Saving
d) Wealth creation
e) Risk diversification
8) What returns do you receive at present from all your investments?
a) Less than 5%
b) 5%-10%
94
c) 10-15%
d) 15%-20%
e) Greater than 20%
9) Which types of funds would you like to prefer for your investment in mutual fund?
a) Equity fund
b) Debt fund
c) Balanced fund
10) Give your preference for tax saving plan of ICICI PRUDENTIAL?
a) Most preferred
b) Favorably preferred
c) Preferred
d) Least preferred
e) Not preferred
11) Rank the following investment options according to your preference.
a) Equity market
b) Mutual fund
c) Govt. bond
d) Real estate
e) Bank FD
f) Post office
g) Insurance
95