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IJRFM

Volume 5, Issue 4 (April, 2015)


(ISSN 2231-5985)
International Journal of Research in Finance and Marketing (IMPACT FACTOR 4.088)

Comparative Analysis of Mutual Fund Schemes available at


Kotak Mutual Fund and HDFC Mutual Fund
*Dr. Shriprakash Soni
Assistant Professor,
MAEERS, MIT College of Engineering,
Centre for Management Studies and Research,
Kothrud, Pune, Maharashtra, India
**Prof. Dr. Deepali Bankapue
Assistant Professor,
MAEERS, MIT College of Engineering,
Centre for Management Studies and Research,
Kothrud, Pune, Maharashtra, India
***Mr. Mahesh Bhutada
MBA-II Student,
MAEERS, MIT College of Engineering,
Centre for Management Studies and Research,
Kothrud, Pune, Maharashtra, India
mbhutada77@gmail.com

Abstract:
Generally, when an investor decides to study the investment options readily available in
todays confusing, complex and risky environment, he thoroughly evaluates all the
investment options. While evaluating such multiple options, prima facie, he naturally
considers several factors like Past performance of the option under study, Risk adjusted
returns from the invested plan, Share in the portfolio policy, Fund house, Back Returns i.e.
percentage of Interest / Dividend and Consistent rate of return on investment, to mention a
few. In the words of Warren Buffett, Risk comes from not knowing what you are doing.
If, at all, an investor decides to follow all these options for his investment,
quite strictly, preferably he would come to a rational conclusion of an option of Mutual
Funds. However, when an investor decides to opt for Mutual Funds, he proceeds with the
assumptions that the performance of mutual funds is relatively good, the return on mutual
fund is better as compared to the returns on fixed deposits with banks or posts. The
performance of mutual funds is good because of proper portfolio and risk management and
it is linked and dependent on the stock market. As Robert Arnott has commented, In
investing, what is comfortable is rarely profitable.
Keywords: Mutual Fund, Share Market, Performance, Returns, Risk.

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IJRFM
Volume 5, Issue 4 (April, 2015)
(ISSN 2231-5985)
International Journal of Research in Finance and Marketing (IMPACT FACTOR 4.088)

Introduction:
Stock market plays a very vital role in developing economy like India and also attracting the
rural people in recent years. Investors usually observe that all capital market investment
avenues are risky. Moreover, in case an investor decides to invest in shares in order to
obtain higher returns in short time with least investment, he should necessarily possess
adequate technical knowledge related to share market. Also, he is needed to devote
disproportionate time to get proper technical knowledge to be expert investor in the share
market. As a result, it is observed that there is an increasing and inclining trend towards
investment in mutual funds. As per Dave Ramsey, Financial peace isnt the acquisition of
stuff. Its learning to live on less than you make, so you can give money back and have
money to invest. You cant win until you do this.
After several social interactions with eminent financial personalities, experts and analysts,
the researcher realized that mutual fund is indeed one of the upcoming investment options.
The performance of the Indian Mutual Fund Industry accounted for an impressive growth in
funds mobilized after Globalization in India. Assets Under Management has increased from
Rs. 47000 crores in March, 1993 to Rs. 613979 crores in March, 2010. It had shown an
outstanding and amazing growth. Thereafter, the researcher tried to search the literature
related to performance of mutual funds. However, it was found that a lot of literature is not
available on the said topic because it appears that substantial research work in this area is
still to be done. Researcher also observed that investors always get confused where to make
investment. Therefore, it was decided to conduct the research on Mutual Funds
performance as one of the investment options because as Robert Kiyosaki directed, Its
not how much money you make, but how much money you keep, how hard it works for
you, and how many generations you keep it for.
This study is an attempt to understand the performance of share market and to analyse the
correlation of performance of mutual funds between two reputed companies. As a part of
this study, data is collected regarding performance of mutual funds and for the financial
years 201011, 201112, 201213, 201314 and 201415. Five Equity Mutual Funds, One
Balanced Fund and Two Debt Funds are taken as sampling.

Literature Review:
Gupta Ramesh (1989) evaluated the fund performance in India comparing the returns
earned by schemes of similar risk and similar constraints. Vidhyashankar S. (1990), Bansal L.
K. (1991), Batra and Bhatia (1992), Saha Asish and Rama Murthy Y. Sree. (1993-94), Shome
(1994), Kale and Uma (1995), Jaydev (1996), Gupta and Sehgal (1998), Irissappane Aravazhi

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IJRFM
Volume 5, Issue 4 (April, 2015)
(ISSN 2231-5985)
International Journal of Research in Finance and Marketing (IMPACT FACTOR 4.088)
(2000) also identified that there was trend in shift from bank or company deposits to mutual
funds due to its superiority and return, liquidity, safety and capital appreciation played a
predominant role in the preference of the schemes by investors. Narasimhan M. S. and
Vijayalakshmi S. (2001), Roshni Jayam (2002), Singh, Jaspal and Subhash Chander (2003),
Satish D. (2004), Sondhi H. J. and Jain P. K. (2005), Muthappan P. K. and Damodharan E.
(2006), Sanjay Kant Khare (2007), Dr. Vikas Kumar (2011) also studied the performance of
various mutual funds schemes and found that mutual funds provided better returns to the
investors.
Venugopalan S. (1992), Ansari (1993), Venkateshwarlu M. (2004) conducted the survey of
investors and suggested some guidelines to the investors on returns, benchmark
comparison, diversification, selectivity and market timing skills. Vaid, Seema (1994),
Tripathy, Nalini Prava (1996), Kumar V. K. (1999), Gupta Amitabh (2000), Abhishek Kumar
(2012) conducted the study on mutual fund industry and studies revealed that the industry
showed a continuous growth.

Concept of Mutual Fund:


A Mutual Fund is a trust that pools the savings of number of investors who share a common
financial goal. The money collected from investors is invested in capital market instruments
such as shares, debentures and other securities. Mutual fund issues units to the investors in
accordance with quantum of money invested by the investors. Investors of mutual funds are
known as unit holders. 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 lower cost.
In India, there are many companies, both public and private that are engaged in the trading
of mutual funds. Wide varieties of Mutual Fund Schemes are available in the market.
Investors can invest their money in different types of mutual funds depending upon their
individual investment objectives.
Like different investment avenues, mutual funds also offer advantages and disadvantages,
which are important for any investor to consider and understand before they decide to
invest in mutual fund.

Advantages of Mutual Funds:


Diversification, Continuous professional management, Economies of scale, Liquidity is the
important advantages of Mutual Funds.

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IJRFM
Volume 5, Issue 4 (April, 2015)
(ISSN 2231-5985)
International Journal of Research in Finance and Marketing (IMPACT FACTOR 4.088)
Disadvantages of Mutual Funds:
Fluctuating returns, Diversification, Misleading Advertisement and Operating Costs are the
disadvantages of Mutual Funds.

Scope of Study:
The main focus of the study was to track the performance of the different mutual fund
schemes. Since different companies come out with similar themes in the same season, it
becomes difficult for the company to constantly perform well so as to survive the
competition and provide maximum capital appreciation or return as the case may be. Other
than the market, the performance of the fund depends on the kind of stock selected by the
fund managers of the company.
The analysis is done on the performance of funds with the same theme or sector and reason
out why a fund performs better than the others in the lot. It is limited to investors and their
investment preferences. Study objective is to investigate the return on investment in share
market and to understand the fund sponsor qualities influencing the selection of Mutual
Funds/Schemes. Also to find out that how far the mutual fund schemes are able to win the
confidence of the investors.

Need for the Study:


The main purpose of this study is to know about mutual fund and its functioning. This helps
to know in details about mutual fund industry right from its inception stage, growth and
future prospects. It also helps in understanding different schemes of mutual funds, since the
study depends upon different schemes like Equity, Dept, Balanced as well as the returns
associated with those schemes. The study was done to analyse the returns associated with
the different mutual funds. Ultimately this would help in understanding the benefits of
mutual funds to investors.

Objectives of the Study:


1. To study the various schemes available at Kotak Mutual Fund and HDFC Mutual
Fund.
2. To analyze and compare the performance of different mutual fund schemes offered
by Kotak Mutual Fund and HDFC Mutual Fund.
3. To know the factors that affects on the performance of mutual fund schemes.
4. To find out the best scheme available for investors by comparing their performance.
5. To compare the similar schemes of Kotak Mutual Fund with HDFC Mutual Fund and
find out the reasons behind the difference in their performances.

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IJRFM
Volume 5, Issue 4 (April, 2015)
(ISSN 2231-5985)
International Journal of Research in Finance and Marketing (IMPACT FACTOR 4.088)

Research Methodology:
Sr. No.
1
2
3
4
5
6

Particulars
Type of Data
Population
Sampling Area
Nature of Source of Data
Sampling Methodology
Sample Size

7
8

Period of Study
Method of Data Collection

Statistical Tools & Techniques

Details
Secondary Data.
Mutual Funds in India.
Private Sector.
Quantitative.
Convenience Sampling.
10 Mutual Fund Schemes of Equity, 4 of Debt
and 2 of Balanced categories.
5 years 2010-11 to 2014-15.
Fund Factsheet published by Kotak Mutual
Fund & HDFC Mutual Fund, Other published
material of Mutual Funds and Research based
online portals.
Standard Deviation, Sharpe Ratio, Beta, RSquared, Alpha

Limitations of the Study:


1. Research is based on the secondary data.
2. The study is restricted to only two Mutual Fund Companies.
3. The data is limited to performance of the mutual funds only for the period of last five
years.
4. The data is limited to 16 schemes only.

Data Analysis and Interpretation:


1) KOTAK SELECT FOCUS V/s HDFC CAPITAL BUILDER FUND
Table No: 1.1
Investment Information
Fund Objective

Fund type
Investment Plan
Risk Grade
Return Grade
Asset Size as on 31.3.2015
NAV as on 31.3.2015

Kotak Select Focus Fund


The investment objective of
the scheme is to generate
long-term capital appreciation
from a portfolio of equity and
equity related securities,
generally focused on a few
selected sectors.
Open-Ended Equity
Growth
Average
High
Rs. 2450 crore
Rs. 22.809

HDFC Capital Builder Fund


The fund seeks to invest in
companies that are priced
below their fair value
thereby generating capital
appreciation in the longterm.
Open-Ended Equity
Growth
Average
Above Average
Rs. 890.8 crore
Rs. 199.457

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IJRFM
Volume 5, Issue 4 (April, 2015)
(ISSN 2231-5985)
International Journal of Research in Finance and Marketing (IMPACT FACTOR 4.088)
KOTAK SELECT FOCUS VS HDFC CAPITAL BUILDER FUND
Table No: 1.2
Year

Kotak Select Focus Fund (%)

2014-15
2013-14
2012-13
2011-12
2010-11

57.87
6.18
33.45
-22.29
20.05

HDFC Capital Builder Fund


(%)
51.95
10.37
28.42
-23.64
28.44

Graph No. 1
57.87
51.95

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33.45 28.42

28.44
20.05

40

6.18 10.37

20
0
2010-11

-20

2011-12
2012-13
-22.29 -23.64

-40

2013-14

2014-15

Year
KOTAK SELECT FOCUS (%)

HDFC CAPITAL BUILDER FUND(%)

Interpretation:
Kotak Select Focus Fund and HDFC Capital Builder Fund, both scheme focused on large
sector, so there is long term growth with minimum fluctuation. Graph No.1 revealed that
both schemes has given good returns in last five years except in the year 2011-12 because of
down trend in the large cap fund. If compare the data available in the current year, Kotak
Select Focus has given more returns than HDFC Capital Builder Fund where as in the year
2013-14, HDFC Capital Builder scheme was good. It means both the schemes are good and
very well managed as well as giving similar average return in long period.
2) KOTAK MID-CAP V/s HDFC MID-CAP OPPORTUNITIES FUND

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Volume 5, Issue 4 (April, 2015)
(ISSN 2231-5985)
International Journal of Research in Finance and Marketing (IMPACT FACTOR 4.088)
Table No: 2.1
Kotak Mid-Cap Fund
Fund Objective

Fund type
Investment Plan
Risk Grade
Return Grade
Asset Size as on 31.3.2015
NAV as on 31.3.2015

Kotak Midcap is an openended


equity
growth
scheme. The investment
objective is to generate
capital appreciation from a
diversified portfolio of equity
&
equity
related
instruments.
Open-Ended Equity
Growth
Above Average
Below Average
Rs. 343 crore
Rs. 51.159

HDFC Mid-Cap
Opportunities Fund
The aim of the fund is to
generate long-term capital
appreciation from a portfolio
that is substantially
constituted of equity and
equity related securities of
mid- and small cap
companies.
Open-Ended Equity
Growth
Above Average
Above Average
Rs. 9645.8 crore
Rs. 36.748

KOTAK MID-CAP VS HDFC qMID-CAP OPPORTUNITIES FUND


Table No: 2.2
Year
2014-15
2013-14
2012-13
2011-12
2010-11

Kotak Mid-Cap (%)


74.02
-4.91
50.23
-26.90
28.00

HDFC Mid-Cap (%)


76.63
9.64
39.62
-18.31
32.13

Graph No. 2
74.02 76.63

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50.23
39.62

60
40

28 32.13

9.64

20
0
-20
-40

2010-11

2011-12
-26.9

2012-13

-4.91
2013-14

2014-15

-18.31
Year

KOTAK MID-CAP (%)

HDFC MID-CAP (%)

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IJRFM
Volume 5, Issue 4 (April, 2015)
(ISSN 2231-5985)
International Journal of Research in Finance and Marketing (IMPACT FACTOR 4.088)
Interpretation:
Kotak Mid-Cap and HDFC Mid-Cap, both scheme focused on only medium and small sector,
so there is high returns with maximum risk. Graph No. 2 revealed that HDFC Mid-Cap has
given good returns in last 4 years than Kotak Mid-Cap except in the year 2012-13 where
Kotak Mid-Cap has given 11% extra returns. In the current year, both the schemes have
given very good return because of BJP win in the election and stable government. During the
year 2013-14 Kotak Mid Cap has given negative returns and HDFC Mid-Cap has given positive
return which shows that HDFC Mid-Cap is very well managed than Kotak Mid-Cap and there
is scope for improvement for Kotak Mid-Cap.
3) KOTAK TAX SEVER VS HDFC TAX SAVER FUND
Table No: 3.1
Investment Information
Fund Objective

Fund type
Investment Plan
Risk Grade
Return Grade
Asset Size as on 31.3.2015
NAV as on 31.3.2015

Kotak Tax Sever Fund


The investment objective of the
scheme is to generate long-term
capital appreciation from a
diversified portfolio of equity and
equity related securities and
enable investors to avail the
income tax rebate, as permitted
from time to time.
Open-Ended
Growth
High
Average
Rs. 512 crore
Rs. 31.398

HDFC Tax Saver Fund


The scheme seeks
capital appreciation
with at least 80 per cent
exposure to equities,
FCDs, preference shares
and bonds of
companies.
Open-Ended
Growth
Above Average
Average
Rs. 5032.4 crore
Rs. 398.162

KOTAK TAX SAVER VS HDFC TAX SAVER FUND


Table No: 3.2
Year

Kotak Tax Saver Fund (%)

HDFC Tax Saver Fund (%)

2014-15

56.61

56.36

2013-14

-6.25

5.09

2012-13

36.25

26.59

2011-12

-26.03

-22.62

2010-11

19.93

26.42

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IJRFM
Volume 5, Issue 4 (April, 2015)
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International Journal of Research in Finance and Marketing (IMPACT FACTOR 4.088)
Graph No. 3
56.36
56.61

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40

36.25
26.59

26.42
19.93

20

-6.25

5.09

0
2010-11
2011-12
2012-13
-26.03
-22.62

-20
-40

2013-14

2014-15

Year
KOTAK TAX SAVER (%)

HDFC TAX SAVER FUND (%)

Interpretation:
Kotak Tax Saver and HDFC Tax Saver are the schemes invested its money for 3 year lock in
period for the purpose of tax saving. The schemes aim is not to achieve high return but save
the Tax. Graph No.3 revealed that Kotak Tax Saver scheme is more aggressive than HDFC Tax
Saver because it has given high positive returns as well as high negative returns. If compare
the data in the year 2013-14, Kotak Tax Saver has given negative returns where as HDFC Tax
Saver has given positive returns and during the year 2012-13, Kotak Tax Saver has given high
returns than HDFC Tax Saver. It means Kotak scheme is more aggressive than HDFC scheme.
4) KOTAK 50 VS HDFC TOP 200 FUND
Table No: 4.1
Investment Information
Fund Objective

Fund type
Investment Plan
Risk Grade
Return Grade
Asset Size as on 31.3.2015
NAV as on 31.3.2015

Kotak 50 Fund
The investment objective of
the Scheme is to generate
capital appreciation from a
portfolio of predominantly
equity and equity related
securities. The portfolio will
generally comprise of equity
& equity related instruments
of around 50 companies
which may go up to 59
companies.
Open-Ended Equity
Growth
Average
Above Average
Rs. 725 crore
Rs. 173.55

HDFC Top 200 Fund


The scheme seeks capital
appreciation and would
invest up to 90 per cent in
equity and the remaining in
debt instruments. Also, the
stocks would be drawn from
the companies in the BSE
200 Index as well as 200
largest capitalized
companies in India.
Open-Ended Equity
Growth
High
Above Average
Rs. 13488.4 crore
Rs. 342.678

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IJRFM
Volume 5, Issue 4 (April, 2015)
(ISSN 2231-5985)
International Journal of Research in Finance and Marketing (IMPACT FACTOR 4.088)
KOTAK 50 VS HDFC TOP 200 FUND
Table No: 4.2
Year

KOTAK 50 (%)

HDFC TOP 200 (%)

2014-15

42.46

2013-14

4.26

4.06

2012-13

23.41

32.43

2011-12

-18.46

-24.30

2010-11

16.29

25.05

46.52

Graph No. 4
46.52
42.46

50
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32.43
23.41

40
25.05
16.29

30
20

4.26 4.06

10
0
2010-11

-10
-20

2011-12
-18.46

2012-13

2013-14

2014-15

-24.3

-30

Year
KOTAK 50 (%)

HDFC TOP 200 (%)

Interpretation:
Kotak 50 scheme has been focusing on Top 50 to 59 companies where as HDFC 200 has been
focusing on Top 200 companies. These schemes have been focusing on top companies, so
there are high returns with minimum fluctuation. If compare the data available in the above
Graph, it can be said that both schemes are very good and very well managed. The schemes
have given positive returns in last 5 years except in the year 2011-12 because of European
crises, unstable government and high inflation rate. HDFC Top 200 was more aggressive than
Kotak 50, so it has high positive as well as negative returns.
5) KOTAK BALANCE VS HDFC BALANCED FUND

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IJRFM
Volume 5, Issue 4 (April, 2015)
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International Journal of Research in Finance and Marketing (IMPACT FACTOR 4.088)
Table No: 5.1
Investment Information
Fund Objective

Kotak Balance Fund


To achieve growth by
investing in equity & equity
related instruments,
balanced with income
generation by investing in
debt & money market
instruments.

Fund type

Open-Ended and Hybrid:


Equity-oriented
Growth
Below Average
Below Average
Rs. 371 crore
Rs. 15.65

Investment Plan
Risk Grade
Return Grade
Asset Size as on 31.3.2015
NAV as on 31.3.2015

HDFC Balanced Fund


The scheme seeks to generate
capital appreciation with
current income from a
combined portfolio of equity
and debt instruments. Under
normal circumstances the
scheme would take 60 %
exposure to equity
instruments while the balance
would be allocated to debt
instruments
Open-Ended and Hybrid:
Equity-oriented
Growth
Below Average
Above Average
Rs. 3541.0 crore
Rs. 107.455

KOTAK BALANCE VS HDFC BALANCED FUND


Table No: 5.2
Year

Kotak Balance Fund (%)

HDFC Balanced Fund (%)

2014-15

28.55

51.47

2013-14

6.23

8.78

2012-13

24.79

26.58

2011-12

-14.06

-10.57

2010-11

12.43

25.49

Graph No. 5

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51.47

60
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50
40

12.43

20

28.55

24.79 26.58

25.49

30

6.23 8.78

10
0
2010-11

-10
-20

2011-12
-14.06 -10.57

2012-13

2013-14

2014-15

Year
KOTAK BALANCE (%)

HDFC BALANCED FUND (%)

Interpretation:
Kotak Balance Fund and HDFC Balanced Fund, both schemes have been investing its money
into Equity as well as Debt fund, so there are high returns with minimum fluctuations. Graph
No.5 has revealed that HDFC Balanced Fund has given very good returns than Kotak Balance
during last 5 Years. It shows that HDFC Balanced Fund is well managed and very good
portfolio than Kotak Balanced Fund, so investors should select HDFC scheme than Kotak in
Balanced Fund.
6) KOTAK SENSEX ETF FUND VS HDFC INDEX FUND - SENSEX PLAN
Table No: 6.1
Investment Information

Kotak Sensex ETF Fund

Fund Objective

The objective of the scheme


is to provide returns that
correspond to the total
returns of BSE Sensex Index.

Fund type

Open-ended and Equity:


Large Cap
Growth
Average
Average
Rs. 8 crore
Rs. 281.08

Investment Plan
Risk Grade
Return Grade
Asset Size as on 31.3.2015
NAV as on 31.3.2015

HDFC Index Fund - Sensex


Plan
The scheme aims to
generate returns that are
commensurate with the
performance of BSE Sensex,
subject to tracking errors.
Open-ended and Equity:
Large Cap
Growth
Average
Below Average
Rs. 83.6 crore
Rs. 237.20

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IJRFM
Volume 5, Issue 4 (April, 2015)
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International Journal of Research in Finance and Marketing (IMPACT FACTOR 4.088)
KOTAK SENSEX ETF FUND VS HDFC INDEX FUND - SENSEX PLAN
Table No: 6.2
Year

Kotak Sensex ETF Fund (%)

HDFC Index Fund - Sensex


Plan (%)

2014-15

31.12

30.63

2013-14

10.34

10.06

2012-13

27.24

26.53

2011-12

-23.94

-25.17

2010-11

18.32

17.56

Graph No. 6

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27.24

30

31.12

26.53

30.63

18.32 17.56

20

10.34 10.06

10
0
2010-11

-10

2011-12

2012-13

2013-14

2014-15

-20
-23.94 -25.17

-30

Year
KOTAK SENSEX ETF FUND (%)

HDFC INDEX FUND - SENSEX PLAN (%)

InterpretationKotak Sensex Fund and HDFC Index Fund Sensex Plan, both the schemes are Indexed scheme
which means their portfolio is similar to Index and in this case the portfolio of both the
schemes are matched to Sensex top 30 Blue Chip companies. Graph No.6 has revealed that
both schemes has given similar returns because their portfolio is similar but still there is little
difference in every year because of their cash money ratio means their investment in cash
form. So it can be said that both schemes are very good and investors can select any scheme
according to their convenience.
7) KOTAK LIQUID VS HDFC LIQUID FUND

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Volume 5, Issue 4 (April, 2015)
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International Journal of Research in Finance and Marketing (IMPACT FACTOR 4.088)
Table No: 7.1
Investment Information
Fund Objective

Kotak Liquid Fund


Kotak Liquid is an openended debt scheme. The
investment objective of the
Scheme is to provide
reasonable returns and high
level of liquidity by investing
in debt and money market
instruments of different
maturities so as to spread
the risk across different
kinds of issuers in the debt
markets.

Fund type
Investment Plan
Risk Grade
Return Grade
Asset Size as on 31.3.2015
NAV as on 31.3.2015

Open-Ended and Debt Liquid


Growth
Average
Average
Rs. 3552 crore
Rs. 2836.63

HDFC Liquid Fund


The scheme aims at
enhancement of income,
consistent with a high level
of liquidity, through a
judicious portfolio mix of
money market and debt
instruments. Under normal
circumstances, the fund will
have a 50-90 per cent
exposure to money market
instruments while holding
10-50 per cent in debt
instruments.
Open-Ended and Debt Liquid
Growth
Above Average
Average
Rs. 10284.8 crore
Rs. 27.57

KOTAK LIQUID VS HDFC LIQUID FUND


Table No: 7.2
Year
2014-15
2013-14
2012-13
2011-12
2010-11

Kotak Liquid Fund (%)


9.09
9.25
9.69
8.98
5.51

HDFC Liquid Fund (%)


9.10
9.28
9.56
8.80
5.15

Graph No. 7
R
e
t
u
r
n
s

8.98 8.8

10
8
6

9.69 9.56

9.25 9.28

9.09

2012-13

2013-14

2014-15

9.1

5.51 5.15

4
2
0
2010-11

2011-12

Year
KOTAK LIQUID (%)

HDFC LIQUID FUND (%)

Interpretation:

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Kotak Liquid Fund and HDFC Liquid Fund are the schemes in which money has been invested
in money market instruments, so these schemes are very liquid means ready to convert in
cash form. Graph No.7 has revealed that both the schemes has given good returns in last five
years and there was no negative returns because all the money market instruments are debt
fund and it gives interest on their investment as well as these funds are very less fluctuating
in nature so it gives less returns than equity but constantly. And if compare both the
schemes are very good and investors can select according to their convenience.
8) KOTAK GILT INVESTMENT-REGULAR PLAN VS HDFC GILT FUND - LONG TERM PLAN
Table No: 8.1
Investment Information

Kotak Gilt InvestmentRegular Plan

HDFC Gilt Fund - Long Term


Plan

Fund Objective

Kotak Gilt Investment is an


open-ended dedicated gilt
unit scheme. The investment
objective of the Scheme is to
generate risk-free returns
through investments in
sovereign securities issued
by the Central and/or State
Government(s) and/or
reverse reposing such
securities.

The scheme is a dedicated


gilt scheme which seeks to
generate reasonable returns
with investments in
government securities,
securities guaranteed by GoI
with medium to long term
residual maturities

Fund type

Open-Ended and Debt Gilt


Medium & Long Term

Open-Ended and Debt Gilt


Medium & Long Term

Investment Plan

Growth

Growth

Risk Grade

Above Average

Above Average

Return Grade

Below Average

Average

Asset Size as on 31.3.2015

Rs. 833 crore

Rs. 2464.9 crore

NAV as on 31.3.2015

Rs. 47.82

Rs. 28.44

KOTAK GILT INVESTMENT VS HDFC GILT FUND - LONG TERM PLAN


Table No: 8.2

2014-15
2013-14
2012-13
2011-12
2010-11

Kotak Gilt Investment Fund (%)

HDFC Gilt Fund (%)

17.09
0.06
14.63
7.04
5.06

19.03
1.42
11.02
5.06
5.89

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Graph No. 8
19.03
17.09

20
R
e
t
u
r
n
s

14.63
15

11.02

10

5.06 5.89

7.04
5.06

5
0.06

1.42

0
2010-11

2011-12

2012-13

2013-14

2014-15

Year
KOTAK GILT INVESTMENT (%)

HDFC GILT FUND (%)

Interpretation:
Kotak Gilt Investment Fund and HDFC Gilt Fund are the schemes invested their money in
Government Securities so there is minimum risk with good returns. Graph No. 8 has revealed
that Kotak Gilt Investment has given high returns during the year 2011-12 and 2012-13
where as HDFC Gilt Fund has given good returns during the year 2010-11, 2013-14 and 201415 as compared to Kotak Gilt Investment. And if compare their average returns then both
schemes has given similar return so it can be said that both schemes are good and investors
can select any scheme according to their interest.
Risk Analysis of different Mutual Fund Schemes of Kotak as on 31 March, 2015
Table No: 9.1
Tools

Kotak
Select
Focus
Fund
15.29

Kotak
Mid-Cap
Fund

Kotak Tax
Saver
Fund

Kotak 50
Fund

Kotak
Balance
Fund

Kotak
Sensex
ETF Fund

19.25

16.70

15.41

9.81

13.64

1.19

1.01

0.87

0.90

0.91

0.82

Beta

1.00

1.13

1.08

1.03

0.84

0.94

R-Squared

0.89

0.72

0.87

0.93

0.90

0.98

Alpha

8.18

8.15

3.68

3.43

2.46

1.76

Standard
Deviation
Sharpe Ratio

Interpretation:
There are five major indicators of risk in Investment. These are applicable to the analysis of
Stocks, Bonds, and Mutual Fund portfolios. They are Alpha, Beta, R-Squared, Standard
Deviation and the Sharpe Ratio. The data from table no.9.1 has revealed that Standard

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Deviation of Kotak Mid-Cap (19.25) is higher than other funds. It has indicated that Kotak
Mid-Cap scheme is more volatile because a higher SD indicates that the Net Asset Value
(NAV) of that Mutual Fund is more volatile and, it is riskier than a fund with lower SD. While
comparing Sharpe Ratio, it can be said that only Kotak Select Focus (1.19) has risk adjusted
performance because a Mutual Fund with a higher Sharpe Ratio is better because it implies
that it has generated higher returns for every unit of risk was taken. Beta compares a funds
volatility to a benchmark index over a 36 month time period. All the funds except Kotak
Balance Fund and Kotak Sensex ETF Fund have more than 1 Beta which shows that these
funds are more volatile than their benchmark. A beta of lesser than 1 indicates the
investment is less volatile than the market and these schemes are conservative in nature.
R-Squared reflects the percentage of a funds movement that can be explained by
movements in its benchmark index. If compared all the schemes in Kotak Mutual Fund, it can
be said that all the funds are giving similar returns to their benchmark except Kotak Mid-Cap
which is having 0.72 R-Squared. If the funds R-Squared value is between 0.85 to 1, the funds
performance should be trusted. Alpha basically is the difference between the returns an
investor expects from a fund, given its beta, and the return it actually produces. If compared
Alpha mentioned in the table no.9.1, it can be said that Kotak Select Focus and Kotak MidCap has outperformed its benchmark index and it offered higher positive Alpha. A positive
Alpha means the fund has outperformed its benchmark index. Whereas, a negative Alpha
means the Fund has underperformed to its benchmark index. The more positive an Alpha is
the healthier for investors.
Risk Analysis of different Mutual Fund Schemes of HDFC as on 31 March, 2015
Table No: 9.2
Tools

HDFC
Capital
Builder
Fund
14.68

HDFC
Mid-Cap
Fund

HDFC Tax
Saver

HDFC
Top 200
Fund

HDFC
Balanced
Fund

HDFC
Index
Fund

15.94

17.62

18.43

11.91

13.48

1.07

1.36

0.80

0.69

1.21

0.80

Beta

0.96

0.89

1.10

1.21

0.92

0.93

R-Squared

0.90

0.64

0.82

0.90

0.73

0.98

Alpha

5.96

12.76

3.05

0.52

7.26

1.42

Standard
Deviation
Sharpe Ratio

Interpretation:
The data from table no.9.2 has revealed that Standard Deviation of HDFC Top 200 Fund
(18.43) and HDFC Tax Saver (17.62) are higher than other funds which means these two

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funds are more volatile in nature and riskier than other funds. All other funds are also having
more than 11 SD which means every HDFC scheme is more volatile and produce high returns
(High Risk High Returns). While comparing Sharpe Ratio, HDFC Mid- Cap is having higher
Sharpe Ratio (1.36) which means this fund has generated high returns with minimum risk
taken and it has better risk adjusted performance as compare to others. Beta compares
funds volatility to its benchmark index, If compare Beta then it can be said that HDFC Top
200 Fund (1.21 Beta) is more volatile than its benchmark and generated high returns. More
than 1 Beta indicates that funds are more risky and aggressive in nature than its benchmark.
R-Squared shows the correlation between funds movement to its benchmark index. If
compared all the Schemes of HDFC, it can be said that most of the funds are giving similar
returns to their benchmark but HDFC Mid-Cap and HDFC Balanced Fund are different than
their benchmark because these schemes are having less R-Squared. If compared above
schemes Alpha then it can be said that HDFC Mid-Cap and HDFC Balanced Fund are having
higher Alpha and these funds have outperformed its benchmark index because a higher
positive Alpha shows higher positive returns.

Findings:
1.

Kotak Select Focus and HDFC Capital Builder Fund, Both schemes have given similar
average returns in last 5 years.

2.

HDFC Mid-Cap is very well managed than Kotak Mid-Cap and also given higher returns
in last 5 years.

3.

Kotak Tax Saver scheme was more aggressive than HDFC Tax Saver and given higher
positive as well as negative returns.

4.

HDFC Top 200 was more aggressive and well managed than Kotak 50.

5.

HDFC Balanced Fund is well managed and good portfolio than Kotak Balanced Fund also
given higher returns in past 5 years.

6.

Kotak Sensex Fund and HDFC Sensex Plan, both schemes are very good and given
similar average returns in last 5 years.

7.

Kotak liquid and HDFC liquid, both schemes have given similar returns in last 5 years
and having similar portfolio.

8.

Kotak Gilt Investment and HDFC Gilt Fund, both schemes have given very fluctuating
returns during last 5 years.

9.

Kotak Mid-Cap Scheme is having higher Standard Deviation, Higher Beta and Higher
Alpha, so this Scheme has generated higher returns

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10. HDFC Top 200 Fund is having higher Standard Deviation and Higher Beta, so this
scheme is more aggressive in nature.
11. Every scheme of Kotak and HDFC are having good Positive Alpha, so it has produced
good returns in the last year.

Conclusions:
After the study of Comparative Analysis of Mutual Fund Schemes Available at Kotak Mutual
Fund & HDFC Mutual Fund, it can be conclude that
1. Both the companies are offering similar types of schemes for different sectors and taking
similar amount of risk, so they provided close returns with minimum fluctuation.
2. Kotak Mutual Fund schemes are more aggressive in Large Cap Equity schemes and HDFC
Mutual Fund schemes are more aggressive in Mid Cap Equity schemes where as both the
companies schemes are very well managed in debt market.
3. Election result, Crisis, Inflation, Budget and any such big events (factors) affect on the
performance of Mutual Fund Schemes.
4. Kotak Select Focus is the best scheme in Large cap Equity, HDFC Mid-Cap is the best
scheme in Mid-Cap sector and HDFC Balanced Fund is the best scheme in Balanced Fund
for investment.
5. Risk taken by different schemes, Alpa & Beta ratio and portfolio are the major reasons
behind the difference in performance of both Mutual Fund Schemes.
6. The Indian Mutual Funds Industry has changed totally for good since last one decade
and has shown substantial growth and potential. Though the Asset under Management
and number of schemes has increased significantly, it is yet to be a household product,
and needs to cover the retail segment effectively.

Suggestions:
1. Kotak Select Focus and HDFC Capital Builder, Kotak Sensex Fund and HDFC Sensex Plan,
Kotak Gilt Investment and HDFC Gilt Fund are the schemes which have given similar
returns during last five years, so investors should select these schemes according to their
convenience and interest.
2. Mutual Fund Liquid schemes are always beat inflation rate and give positive
performance but low returns, so those investors want constant returns they should
invest their money in this schemes.
3. Those investors who are ready to take high risk they should select Kotak Tax Saver and
HDFC Top 200, because these schemes are aggressive in nature.

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4. Investors should select Equity schemes for high returns in long period where as they can
select Debt schemes for constant returns with minimum risk for short period.
5. Investors should select HDFC Balanced Fund instead of Kotak Balanced Fund because it is
well managed and given higher returns.

Bibliography:
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1. Jayadev, Investment Policy & Performance of Mutual Funds, Kanishka Publishers &
Distributors, New Delhi, (1998).
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9. Irissappane, Aravazhi Paradigm Shifts In the Performance of Indian Mutual Funds: An
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Mutual Funds Schemes, Finance India, Vol. XX(3), (September 2006), pp.965-983.
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25. Vidhyashankar S, Mutual Funds: Emerging Trends In India, Chartered Secretary, Vol.20
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Factsheets:
1. HDFC Fund Factsheet
2. Kotak Fund Factsheet

Websites:
1. http://www.kotakmutual.com
2. http://www.valueresearch.com
3. http://www.moneycontrol.com
4. http://www.amfiindia.com
5. http://www.bseindia.com
6. http://www.nseindia.com
7. http://www.indiainfoline.com

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