A FINAL REPORT ON PORTFOLIO MANAGEMENT

(STANDARD CHARTERED MUTUAL FUND)

Project Report

Submitted in the partial fulfillment of Requirement for the award of the

MASTER DEGREE IN BUSINESS ADMINISTRATION

Submitted by

N.Vamsi Krishna

REG NO : 036070174

Under the guidance of

Mrs: RIZWANA BANO

NIZAM INSTITUTE OF BUSINESS MANAGEMENT (NIBM)

ERRAMANZIL , HYDERABAD
Feb 26 2009,

TO WHOM EVER IT MAY CONCERN

This to certify that the project report title PORTFOLIO

MANAGEMENT submitted in the partial fulfillment for the award of mba
programme of department of business management, Osmania,
Hyderabad was carried out by
N.Vamsi Krishna reg (036070174) a student of NIBM college Erramanzil
Hyderabad. His performance during this period found to be good.
 DECLARATION

I, N.Vamsi Krishna a student of NIBM PG COLLEGE, affiliated to Osmania

University pursuing M.B.A course, here by declare that the project report
titled PO RTFOLI O MANAGEMENT I, is an original work carried out
by me availing the guidance and services of my Project Guide.

(N.Vamsi
Krishna)

ABSTRACT
I joined STANDARDCHARTERED Asset Management Company on 03
May’08. Association in this esteemed organization has given me immense
exposure to corporate culture as well as the whole investment scenario in
India. I do not hesitate to say that prior to join in STANDARDCHARTERED
Asset Management Company I just had a vague idea about what mutual
funds are but today I am in a position to advice any potential investor on
how to invest his money wisely. Under the kind and able guidance of my
company guide Mr.Venkat and my faculty guide Mrs. Rizwana Bano, there
has been lot of value addition to my knowledge.

As per the schedule described in my project proposal I have completed all

the phases of my project My job at the company requires me to be
updated about the Equity market. This gives great opportunity of learning
about the ups and downs of the market and it is indeed a very enriching
experience working in this company.

ACKNOWLEDGEMENT

I take this proud privilege to acknowledge gracefully the help I received

from different sources in preparation of this report.

I offer my heartfelt thanks to my guide Rizwana Banu, Osmania University

for encouragement and valuable suggestions, which she extended, to me
from time to time. I am deeply indebted to Mr Venkat, Assistant Manager
Sales, and STANDARDCHARTERED AMC who rendered inestimable
assistance in addition to his guidance, critical interest and kind
encouragement throughout the course of this work. Also I am grateful to
Mr. Dhanmesh Tripati, Manager Sales, and STANDARDCHARTERED AMC
for his watchful and inspiring guidance.

Finally, I acknowledge the help of various persons in the office as well as

in the college for the suggestions rendered from time to time towards the
preparation of this report.

(N.
Vamsi Krishna)

CONTENTS

CHAPTER TITLE
____________________________________________________________________

1. INTRODUCTION

Scope of the study

Objectives of the study
 Research Methodology
Limitations of the study

2. REVIEW OF LITERATURE

Company Profile
History of mutual fund
Organization Structure
Types of schemes

3. DATA ANALYSIS AND INTERPRETATION

Portfolio Analysis

4. SUMMARY OF FINDINGS

Suggestions & Recommendations

Conclusion

5. REFERENCE & BIBILOGRAPHY

 INTRODUCTION

INTRODUCTION

1.A. WHAT ARE MUTUAL FUNDS?

Pooled Veh icle

A mutual fund (MF) is a vehicle to pool money from investors, with a
promise that professional managers who are expected to honor the
promise would invest the money in a particular manner.

Mutual funds in India are governed by the regulations of Securities and

Exchange Board of India (SEBI).
 Professional Manage ment

The idea behind a MF is that investors lack the time or the inclination or
the skills to manage their own investments. Professional managers,
acting on behalf of the MF, manage the investments for the benefit of
investors, in return for a management fee.

The organisation that manages the investment is the Asset Management

Company (AMC). Employees of the AMC who perform this role of
managing investments are the Fund Managers.

Schemes
Investors have their individual preferences on how they would like their
money invested and how much risk they are willing to take.

Professional managers can choose to manage each individual investor’s

money as per the investor’s preferences. Such personal treatment, often
referred to as

Portfolio Management Scheme (PMS) in India, entails significant demands

on the time of the managers. PMS is therefore economically feasible only
for investment portfolios above a particular value. The breakeven asset
size, which depends on the cost structure of the manager, is rarely below
Rs 10,00,000.

It is possible to balance the time and cost required to manage investments

by grouping investors together based on their preferences. In this
manner, the focus of the investment activity can be shifted from a single
investor (in the case of PMS) to a group of investors having similar
expectations (in the case of a MF).

For ease of management and reporting, such a group of investors is

identified with a ‘mutual fund scheme’. In commercial terminology, the
investors have invested in a scheme – and the professional managers
manage the scheme. A MF can, and typically does, have several schemes
to cater to different investor preferences.

Money in Trust
The MF manages investments of the scheme for the benefit of its
investors. Every scheme has an:
• investment portfolio (Portfolio Statement);
• account of income and expenditure (Revenue Account); and
• Account of assets and liabilities (Balance Sheet).

In order to ensure fairness to investors, the expenditure that can be

charged to the scheme, whether as management fees or as other
expenses, is regulated by SEBI.

The gains of any scheme (after accounting for income, permitted

expenses, profits and losses from the investment activity) would belong to
its investors. Similarly losses, if any, would need to be borne by its
investors, upto the amount invested. Thus, the MF manages the moneys
in trust for the benefit of investors
Legal f ram ewor k

Across the world, the MF sector is viewed as a critical mechanism to

channel funds of investors into the capital market. Since these investors
are often not so well qualified to invest, the mutual fund business is highly
regulated. Regulations vary from country to country. But broadly they
provide for :
• checks and balances in the legal structure;
• pre-qualifications to start a MF;,
• permissible schemes and investments;
• control over marketing process;
• level of operational flexibility to the professional investors;
• Valuation of securities etc.
•

The flow chart below describes broadly the working of a mutual fund:
SCOPE OF THE STUDY

1. This is confined to Hyderabad City but it can be extended to

other city in near feature.

2. Further their researcher’s outcome is useful for the company, it

takes the necessary steps for maintaining and improving the
Standard Chartered Bank in Hyderabad City

3. This Study gives about the Investors attitude towards portfolio

of various Equity schemes.

4. The survey is centered on the investors for he purpose of

Investors relation on Equity schemes

5. The study helps the company to understand the effective ways

of risk & returns of various schemes .
OBJECTIVES OF THE STUDY

1. To know the various types of Equity Fund schemes used by the

Investors.

2. To study the perceptions of Investors on schemes of Mutual Funds.

3. To find out which media is more effective in creating the Mutual

Funds awareness

4. To study the Mutual funds are most worthy than the other banking
schemes

5. To study Investors satisfaction on the Mutual Funds portfolio

performance.

6. To study the Mutual funds worthiness.

7. To study about the portfolio analysis of various Equity schemes .

RESEARCH METHODOLOGY

Research Methodology

A research design is a specification of methods, procedure for acquiring

information needed. It is overall pattern or frame work of the project that
stipulates what information is to be collected from which sources and by
what procedures. Research is a systematic and intensive study directed
towards a more complete knowledge of the subject studied

PRIMARY DATA

Data collected directly from the account certain ratios are computed and
certain has also been prepared to perform the economic , industry and
company analysis. the economic indicators are

• GROSS DOMESTIC PRODUCT

• INFLATION
• INDUSTRIES
• AGRICULTURE

SECONDARY DATA

• COMPANY JOURNALS
• INTERNET
• COMPANY WEBSITES
• TEXT BOOKS

LIMITATIONS OF THE STUDY

Some of the limitations of the studies are:

1. The researcher can encountered all the limitations inherent in the
“interview” form study

2. The field work is limited only to Hyderabad

3. Findings and suggestions also restricted to certain extent and they

are not applicable to test

4. The sample size is limited to Equity schemes, therefore any

generalizations would be significant only to that extent.

5. The study was conducted with in short span of time 6-8 weeks. The
findings and the data based on this information are to be

6. Treated in that stipulation time only.

7. The inference made from the study may considerably differ from
universal characteristics.

8. The respondents might have given a biased response.

REVIEW OF LITERATURE
 STADARDCHARTERED
ASSET
MANAGEMENTCOMPANY
(PROFILE)

COMPANY PROFILE

Overview

Standard Chartered – leading the way in Asia, Africa and the

Middle East
Standard Chartered PLC is listed on both the London Stock Exchange and
the Stock Exchange of Hong Kong and is ranked in the top 25 among
FTSE-100 companies, by market capitalization.
Standard Chartered has a history of over 150 years in banking and is in
many of the world’s fastest growing markets. It has an extensive global
network of over 1,200 branches (including subsidiaries, associates and
joint ventures) in 56 countries in the Asia Pacific Region, South Asia, the
Middle East, Africa, the United Kingdom and the Americas. As one of the
world’s most international banks, Standard Chartered employs over
44,000 people, representing 89 nationalities, worldwide.
Serving both Consumer and Wholesale Banking customers, the Bank
combines deep local knowledge with global capability to offer a wide
range of innovative products and services as well as award winning
solutions.
Standard Chartered is committed to be the Right Partner to all our
stakeholders by living its values in its approach to managing its people,
exceeding expectations of its customers, making a difference in the
communities that we operate in and working with its regulators. The Bank
is trusted across its network for its standard of governance and corporate
responsibility.

A brief history of Standard Chartered

Standard Chartered is the world's leading emerging markets bank

headquartered in London. Its businesses however, have always been
overwhelmingly

international. This is summary of the main events in the history of

Standard Chartered and some of the organizations with which it merged.

The early years

Standard Chartered is named after two banks which merged in 1969. They
were originally known as the Standard Bank of British South Africa and
the Chartered Bank of India, Australia and China. Of the two banks, the
Chartered Bank is the older having been founded in 1853 following the
grant of a Royal Charter from Queen Victoria. The moving force behind
the Chartered Bank was a Scot, James Wilson, who made his fortune in
London making hats. James Wilson went on to start The Economist, still
one of the world's pre-eminent publications. Nine years later, in 1862, the
Standard Bank was founded by a group of businessmen led by another
Scot, John Paterson, who had emigrated to the Cape Province in South
Africa and had become a successful merchant. Both banks were keen to
capitalise on the huge expansion of trade between Europe, Asia and Africa
and to reap the handsome profits to be made from financing that trade.
The Chartered Bank opened its first branches in 1858 in Calcutta and
Mumbai.

A branch opened in Shanghai that summer beginning Standard

Chartered's unbroken presence in China. The following year the
Chartered Bank opened a branch in Hong Kong and an agency was opened
in Singapore. In 1861 the Singapore agency was upgraded to a branch
which helped provide finance for the rapidly developing rubber and tin
industries in Malaysia. In 1862 the Chartered Bank was authorised to
issue bank notes in Hong Kong. Subsequently

it was also authorised to issue bank notes in Singapore, a privilege it

continued to exercise up until the end of the 19th Century. Over the
following decades both the Standard Bank and the Chartered Bank printed
bank notes in a variety of countries including China, South Africa,
Zimbabwe, Malaysia and even during the

siege of Makeking in South Africa. Today Standard Chartered is still one

of the three banks which prints Hong Kong's bank notes.

Expansion in Africa and Asia

The Standard Bank opened for business in Port Elizabeth, South Africa, in
1863. It pursued a policy of expansion and soon amalgamated with several
other banks

including the Commercial Bank of Port Elizabeth, the Colesberg Bank, the
British Kaffarian Bank and the Fauresmith Bank. The Standard Bank was
prominent in the financing and development of the diamond fields of
Kimberly in 1867 and later extended its network further north to the new
town of Johannesburg when gold was discovered there in 1885. Over time,
half the output of the second largest goldfield in the world passed through
the Standard Bank on its way to London. In 1892 the Standard Bank
opened for business in Zimbabwe, and expanded into Mozambique in 1894,
Botswana in 1897, Malawi in 1901, Zambia in 1906, Kenya, Zanzibar and
the Democratic Republic of Congo (D.R.C.), in 1911 and Uganda in 1912.
Of these new businesses, Botswana, Zanzibar and the D.R.C. proved the
most difficult and the branches soon closed.

A branch in Botswana opened again in 1934 but lasted for only a year and
it was not until 1950 that the Bank re-opened for business in Botswana. In
Asia the Chartered Bank expanded opening offices in, Myanmar in 1862,
what is now Pakistan and Indonesia in 1863, the Philippines in 1872,
Malaysia in 1875, Japan in 1880 and Thailand in 1894. Some 34 years
after the Chartered Bank appointed an agent in Sri Lanka it opened a
branch in 1892 to take advantage of business from the tea,and rubber
industries. During 1904 a branch opened in Vietnam. Both the Chartered
and the Standard Bank opened offices in New York and Hamburg in the
early 1900s. The Chartered Bank gaining the first branch licence to be
issued to a foreign bank in New York.

Standard Chartered in the 1990s

Even within this period of apparent retrenchment Standard Chartered
expanded its network, re-opening in Vietnam in 1990, Cambodia and Iran
in 1992, Tanzania

in 1993 and Myanmar in 1995. With the opening of branches in Macau and
Taiwan in 1983 and 1985 plus a representative office in Laos (1996),
Standard Chartered now has an office in every country in the Asia Pacific
Region with the exception of North Korea. In 1998 Standard Chartered
concluded the purchase of a controlling interest in Banco Exterior de Los
Andes (Extebandes), an Andean

Region bank involved primarily in trade finance. With this purchase

Standard Chartered now offers full banking services in Colombia, Peru
and Venezuela. In 1999, Standard Chartered acquired the global trade
finance business of Union Bank of Switzerland. This acquisition makes
Standard Chartered one of the leading clearers of dollar payments in the
USA. Standard Chartered also opened a new subsidiary, Standard
Chartered Nigeria Limited in Lagos, acquired 75 per cent of the equity of
Nakornthon Bank, Thailand; and agreed terms to acquire 89 per cent of
the share capital of Metropolitan Bank of the Lebanon.

Standard Chartered today

Today Standard Chartered is the world's leading emerging markets bank
employing 30,000 people in over 500 offices in more than 50 countries
primarily

in countries in the Asia Pacific Region, South Asia, the Middle East,
Africa, Americas. The new millennium has brought with it two of the
largest acquisitions in the history of the bank with the purchase of
Grindlays Bank from the ANZ Group and the acquisition of the Chase
Consumer Banking operations in Hong Kong in 2000.These acquisitions
demonstrate Standard Chartered firm committed to the emerging markets,
where we have a strong and established presence and where we see our
future growth.

Establishment of Standard Chartered Bank around the world

Country Year Established Country Year Established
United Kingdom 1853 Australia 1964
China, India, Sri
1858 Mexico, Oman 1968
Lanka
Hong Kong,
1859 Peru 1973
Singapore
Indonesia, Pakistan 1863 Jersey 1978
Philippines 1872 Brazil 1979
Malaysia 1875 Venezuela 1980
Japan 1880 Falkland Islands, 1983
 Macau
Zimbabwe 1892 Taiwan 1985
The Gambia, Sierra
1894 Cameroon 1986
Leone, Thailand
Ghana 1896 Nepal 1987
Botswana 1897 Vietnam 1990
Cambodia, South
USA 1902 1992
Africa
Bangladesh 1905 Iran 1993
Zambia 1906 Colombia 1995
Kenya 1911 Laos, Argentina 1996
Uganda 1912 Nigeria 1999
Tanzania 1917 Lebanon 2000
Bahrain 1920 Cote d’Ivoire 2001
Jordan 1925 Mauritius 2002
Korea 1929 Turkey 2003
Qatar 1950 Afghanistan 2004
Brunei, UAE 1958

Strategic alliances and acquisitions in 2005

2005 ushered in a historic year for us as we achieved several milestones

with a number of strategic alliances and acquisitions that will extend our
customer or geographic reach and broaden our product range.
• We completed, rebranded and successfully integrated SC First Bank
in Korea, which to date is the biggest acquisition in our history.
• We completed full integration between Standard Chartered Bank
Thailand and Standard Chartered Nakornthon Bank in October.
• We formed strategic alliances with Fleming Family & Partners to
expand private wealth management in Asia and the Middle East
 • We acquired stakes in ACB Vietnam and Travelex
• We acquired the business operations of American Express Bank in
Bangladesh
• We acquired a stake in Bohai Bank in Tianjin, China, making us the
first foreign bank to be allowed a stake in a local bank in China.

HISTORY OF MUTUAL FUNDS 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. The history of mutual funds in India can be broadly divided
into four distinct phase s:

FIRST P HASE – 1 96 4-8 7

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.
SECON D PHAS E – 198 7-1 99 3 (ENTRY OF PUB LIC 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 non- UTI Mutual Fund established in
June 1987 followed by the following.
 Canbank 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 mutual fund (June 1989)
 GIC mutual fund (December 1990.)
 At the end of 1993, the mutual fund industry had assets under
management of Rs.47, 004 crores.

THIRD PHASE – 19 93- 20 03 (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.
The number of mutual fund houses went on increasing, with many foreign
mutual funds setting up funds in India and also the industry has witnessed
several mergers and acquisitions. As at the end of January 2003, there
were 33 mutual funds with total assets of Rs. 1, 21,805 cores. The Unit
Trust of India with Rs.44, 541 Crores of assets under management was
way ahead of other mutual funds.

FOURTH PHASE – SINC E FEBRUARY 2 00 3

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 September 2004, there were
29 funds, which manage assets of Rs.153108 Crores under 421 scheme.
 ORGANIZATION OF MUTUAL FUNDS

Investors

Every investor, given her financial position and personal disposition, has a
certain inclination to take risk (risk profile / risk appetite). The
hypothesis is that by taking an incremental risk (of losing capital, wholly
or partly), it would be possible for the investor to earn an incremental
return.

But assuming risk without regularly monitoring it is foolhardy. Therefore,

it would be prudent for investors who take a risk to be able to manage
this risk.

MF is a solution for investors who lack the time, the inclination or the
skills to actively manage their investment risk in individual securities.
They can delegate this role to the MF, while retaining the right and the
obligation to monitor their investments in the scheme (which, in turn,
invests in individual securities).

In the absence of a MF option, the moneys of such “passive” investors

would lie either in bank deposits or other “safe” investment options, thus
depriving the investors of the possibility of earning a better return.

Investing through a MF would make economic sense for an investor if her

investment, over the medium to long term, fetches a return (net of all
costs and expenses) that is higher than what she would otherwise have
earned by investing directly.

Because the goal of investing is to accumulate real wealth – an enhanced

ability to pay for goods and services – the ultimate focus of the long-term
investor must be on real, not nominal, returns.
The following categories of investors are eligible to invest in Indian
mutual funds:
 Resident Indian adult individuals, either singly or jointly (not exceeding
three);
 Parents / lawful guardians on behalf of minors;
 Companies, corporate bodies registered in India;
 Registered societies and co-operative societies authorized to invest in
such Units;
 Religious and charitable trusts under the provisions of 11(5) of the
Income Tax Act, 1961 read with Rule 17C of the Income Tax Rules,
1962;
 Trustees of private trusts authorized to invest in mutual fund schemes
under their trust deeds;
 Partners of partnership firms;
 Association of persons or body of individuals, whether incorporated or
not;
 Hindu Undivided Families (HUFs), in the sole name of the Karta;
 Banks (including co-operative banks and regional rural banks) and
financial institutions and investment institutions;
 Non-resident Indians / Persons of Indian origin resident abroad (NRIs)
on full repatriation or non-repatriation basis;
 Overseas corporate bodies (OCBs), firms and societies which are held
directly or indirectly but ultimately to the extent of at least 60% by
NRIs and trusts in which at least 60% of the beneficial interest is
similarly held irrevocably by such persons, on full repatriation basis
(subject to RBI approval);
 Other mutual funds registered with SEBI;
 Foreign institutional investors (FIIs) registered with SEBI;
 International multilateral agencies approved by the Government of
India.
 Army / Navy / Airforce, para-military units and other eligible
institutions;
 Scientific and industrial research organisations

Trustees

Trustees are the people within a mutual fund organization, who are
responsible for ensuring that investors’ interests are properly taken care
of.
In return for their services, they are paid trustee fees, which is normally
charged to the scheme.

Asse t Manag eme nt Compa ny (AMC)

AMCs manage the investment portfolios of schemes. An AMC’s income

comes from the management fees it charges to the schemes. The
management fee is calculated as a percentage of net assets managed.
Some countries provide for performance based management fees as well.

In order to earn the management fee, any AMC has to employ people and
bear all the establishment costs that are related to its activity, such as for
premises, furniture, computers and other assets, software development,
communication costs etc. These are to be met out of the management fee
earned.
Expenses such as on trustee fees, marketing etc. can be directly borne by
the mutual fund scheme. However, in some cases, competition in the
marketplace could force an AMC to bear some of these costs, which
would otherwise have been borne by investors in the schemes.

So long as the income through management fees more than covers its
expenses, an AMC is economically viable.

Given the nature of the activity, a certain minimum establishment and

infrastructure is necessary for an AMC’s functioning. Since costs cannot
be reduced below a base level, AMCs need to have a reasonable corpus of
assets under management (AUM), below which it may not be viable.

The breakeven level of AUM is a function of cost structure of the AMC

and distribution of assets between schemes (debt schemes and index
schemes generally yield a lower management fee). As a thumb-rule, in
the Indian context it is difficult for an AMC to breakeven if its AUM is
below Rs 2,000crore.

Distributors

Distributors earn a commission for bringing investors into the schemes of

a MF. This commission is an expense for the scheme, although there are
occasions when an AMC chooses to bear the cost, wholly or partly.
Depending on the financial and physical resources at their disposal, the
distributors could be:
 Tier 1 distributors (having an owned or franchised network reaching
out to investors all across the country); or
 Tier 2 distributors (regional players with some reach within their
region); or
 Tier 3 distributors (marginal players).

It is paradoxical that distributors earn a commission from the AMC, but

are expected to safeguard the financial health of investors from whom
they do not earn a fee. It is almost like a doctor earning a commission
from the pharmaceutical company, but expected to safeguard the physical
health of the patient who does not pay him anything.

In recognition of the anomaly in the distribution structure, a body of

financial planners is expected to emerge in the Indian financial market.
They will safeguard investor’s interest in return for a fee from the
investor.

Reg istrars

The investor’s holding in schemes is typically tracked by the scheme’s

Registrar and Transfer agent (R&T). Some AMCs prefer to handle this
role inhouse. The registrar / AMC maintains an account of the investor’s
investments in and dis-investment from the scheme. Requests to invest
more money into a scheme, or to recover moneys against existing
investments in the scheme are processed by the R&T.

Since the database of investors is maintained by the R&T, internet based

transactions of existing investors in the schemes of an AMC are effected
through the R&T’s database servers.

Records of unitholders determine the scheme’s unit capital (discussion

follows), which is a significant component of the liability side of any MF
scheme.
 Custodian / Depository

The custodian maintains custody of the securities in which the scheme

invests (as distinct from the registrar who tracks the investment by
investors in the scheme). This ensures an ongoing independent record of
the investments of the scheme. The custodian also follows up on various
corporate actions, such as rights, bonus and dividends declared by
investee companies.

In a situation where securities are increasingly being dematerialised, the

role of the depository for such independent record of investments is
growing.

In the recent securities market scam, a large investor parted with some of
its funds without gaining custody of the securities where they were
supposed to have invested. When the scam broke out, they realized that
the money was gone, but they did not have the securities. The custodian
in the MF structure is in a position to prevent such risks.

DIAGRAM
 Types of schemes

MF schemes can be offered with any of a range of investment objectives,

each corresponding to a certain point in the risk –return matrix. In a
broad sense, they can be categorised based on tenor or asset class or
position philosophy or geography.

Types of scheme s by Tenor

Open- end sche mes

These are schemes that do not have a fixed maturity. The MF ensures
liquidity by announcing sale and re-purchase price for the units of an
open-end scheme on an ongoing basis.

Investors who wish to exit from an open-end scheme can offer their units
to the MF for redemption, generally called re-purchase . Similarly, the MF
can sell new units to investors desirous of participating in the scheme,
generally called sale.

Every such transaction goes to change the unit capital of the scheme.
The unit capital would increase when additional units are sold; it would
decrease if existing units are re-purchased. This is elaborated in Chapter
7.

Additionally, the MF can choose to provide liquidity through listing of the

scheme in the stock market. In such a scenario, investors can either
trade in the market (in which case there is no change in unit capital of the
scheme); or opt for the
sale and re-purchase route (in which case unit capital of the scheme is
impacted).
As can be expected, arbitrage opportunities come up when there are two
alternative options for dealing in the same units.

Closed-e nd sche mes

These are schemes that have a fixed maturity. Liquidity in such schemes
is available through listing in the stock market. Trades in the market
entail change in the ownership of the units, but do not alter the scheme’s
unit capital.

Occasionally, closed-end schemes provide a re-purchase option to

investors, either for a specified period or after a specified period,
normally up to a total limit for all investors together, or a limit per
investor. Such re-purchase would reduce the unit capital of the scheme.

It is not normal for closed-end schemes to sell new units on an ongoing

basis, though they could make a rights offering to existing investors.

Types of scheme s by asset class

Secur ities

• Equity Schemes

Equity schemes invest primarily in equities. Depending on the scheme

objective, investments could be in growth stocks (where earnings growth
is expected to be

attractive), momentum stocks (that go up or down in line with the market),

or value stocks (where the fund manager is of the view that current
valuations in the market do not reflect intrinsic value), or income stocks
(that earn high returns through dividends).

• Debt / incom e Schem es

 Gilt Schemes
Gilt schemes invest in government securities. Apart from being the most
liquid securities in the debt market, government securities are eligible for
liquidity support,

 Bond Schemes
These schemes invest in bond securities issued by the government or any
other issuer.

 Junk Bond Schemes

Junk bond schemes invest in securities that are below investment grade.
The hope is that attractive returns in such poor-quality investments would
more than make up for the higher risk of losing the entire investment in
some cases.

‘High yield’ bonds is a politically correct way of referring to junk bonds.

SEBI guidelines limit investment in unrated securities and securities that

are below investment grade to 25 per cent of the net assets of any
scheme. Therefore, it is not possible to have a junk bond scheme in India.

 Money market / Liquid Schemes

These schemes invest in short term debt instruments. As will be seen in
Chapter 7, such schemes are less volatile.

 Balanced Schemes
Balanced schemes invest in a mix of equity and debt. The debt
investments ensure a basic interest income, which the fund manager
hopes to top up with capital gains on the investment portfolio. However,
losses can eat into the basic interest income and capital.

The greatest benefit of a balanced investment program is that it makes

risk more palatable. An allocation to bonds moderates the short term
volatility of stocks, giving the risk averse long term investor the courage
and confidence to sustain a heavy allocation to equities. Choose a balance
of stocks and bonds according to your unique circumstances – your
investment objectives, your time horizon, your level of comfort with risk,
and your financial resources.

One of the common allocations used in these types of funds is known as

the robot mix: 55 per cent in stock, 35 per cent in bonds, and 10 per cent
in cash equivalents.

A capital protected scheme is a kind of balanced scheme, where a part of

the initial issue proceeds is invested in gilts that would mature to a value
equivalent to the unit capital of the scheme. Thus, the investors’ capital is
protected. The remaining issue proceeds (excess over what is required
to be invested in gilts for capital protection) is invested in risky
investments.
In such schemes, an investor’s worst case scenario is that her investment
does not grow. But the principal amount invested is covered by maturity
proceeds from the investment in gilt securities.

 Physical assets

Technically, mutual funds can invest in any asset. This includes real
estate, precious metals (gold, silver), other metals (aluminium, steel), oil
and commodities. The regulatory framework in India however does not
currently permit MFs to invest in physical assets. SEBI is actively
considering a proposal to permit schemes that would invest in real estate.

Types of scheme s by Position

Philosophy

 Sector funds

Regular equity funds invest in a mix of equities that are spread across
different sectors. Therefore they are often referred to as diversified
equity funds.

Sector funds, on the other hand, are expected to invest in only a specific
sector. For instance, an energy fund would only invest in energy
companies. Thus, an investor who is bullish about energy and wants an
upside that is linked entirely to this sector (without a dilution arising out
of exposure to other sectors) would invest in such a fund.

As per the ‘Standard Observations’ (explained in Chapter 8), at least 65

per cent of the investible moneys of any fund need to be invested in the
concerned sector / type of security.

In India, on account of a mix of legal slackness, fund managers’ lack of

guts and investors’ lack of understanding of the concept, we have a
situation where sector funds have ended up becoming diversified equity
funds with a bias towards the identified sector! Unfortunately, we have
also seen diversified equity funds managed as if they were sector funds.

 Index funds

Index funds seek to have a position that replicates an identified index,

say, BSE Sensex or NSE Nifty. Such a position can be created through
either of 2 methods -
 It can be done by maintaining an investment portfolio that replicates
the composition of the chosen index. Thus, the stocks in such a fund’s
portfolio would be the same as are used in calculating the index. The
proportion of each stock in the portfolio too would be the same as the
weight of the stock in the calculation of that index.

 This replicating style of investment is called passive investment.

Index funds are therefore often called passive funds. Funds that are
not passive are managed funds.

 Index schemes are also referred to as unmanaged schemes (since they

are passive) or tracker schemes (since they seek to track a specific
index).

 Passive investment places lower demands on the time and efforts of

the AMC. All that is required is a good system that would integrate the
valuation of

securities (from the market) and information of sales and re-purchases of

units (from the registrar) and generate the requisite buy / sell orders.
Therefore, management fees for index funds are lower than for managed
schemes.

 Alternately, a MF, through its research can identify a basket of

securities and / or derivatives whose movement is similar to that of the
index. Schemes that invest in such baskets can be viewed as active
index funds.

 Internationally, MFs have proprietary models that help create baskets

that seek to outperform the market during a boom, while falling lesser
in a bearish market.

 Enhanced Index Funds

The enhanced index fund is a managed index fund that seeks to beat the
performance of its benchmark index by at least 0.1 per cent, but no more
than 2 per cent. (If the index fund’s performance were to exceed this 2
per cent cap, it would then be considered a stock mutual fund.)

 Exchange Traded Funds

These are open-end funds that trade on the exchange. Like index funds,
they are benchmarked to a stock exchange index.

The differences with respect to index funds are :

 A single NAV is applicable for the day in the case of any open-end
funds. Therefore, a single price would be applicable for all investors
who buy units of an open-end index funds on the day. Similarly, a
single price would be recoverable by all investors who wish to exit
from an open-end index fund on any day.

 ETF, on the other hand, is traded in the market place. Therefore its
price keeps changing during the day. This intra-day fluctuation in
ETFs appeals to short-term investors.

 The ETF’s AMC does not offer sale and repurchase prices for the
Units. Instead, it appointsdesignated market intermediaries (market
makers) who buy or sell units from the investors.

 Thus, an investor who wants to invest in an ETF would go to a market

maker who is expected to offer two-way quotes at all times. An
 investor who chooses to invest in the ETF would thus know precisely
how many units in the ETF she will get against her investment.

 The moneys collected from investors would be invested in index scrips

by the market maker. These investments would become a part of the
ETF’s portfolio.

 Based on two-way quotes of the market maker, the investor would

know how much she would recover if she were to exit from the ETF.
On exit, the ETF will

release index scrips from its portfolio, which the market maker would sell
to pay the investor.

 The market maker makes money based on the spread in the two-way
quote. Competition between market makers is expected to keep the
bid-ask spread low.

 This structure also ensures that the AMC does not need to pay a
commission to market intermediaries for bringing investors into the
fund. Similarly, there are no loads recovered by the AMC (the concept
of loads is discussed in Chapter 6).

 Thus, a significant element of cost is eliminated for the investors.

Investors only bear a cost that is implicit in the bid-ask spread. Low
expense ratio is an attraction for any investor.

 Returns in an open-end fund can be affected by significant churning of

unit holding. Suppose today many large applications are received in
the fund, and tomorrow there are several large redemptions. The fund
manager would be under pressure to buy and sell securities in the
market to match such sudden inflows and outflows. Besides, most
open-end funds maintain 5-10% in liquid assets to meet the cash flow
requirements for possible redemptions. These factors can pull down
returns in an open-end index fund.
ETFs, as seen earlier, have a different structure where the fund receives
(if investor invests) and gives securities (if investor disinvests). Since
such transactions are effected in kind, short-term investments and
disinvestments do not affect the performance of the fund. Long-term
investors like this feature in ETFs.
  Fixed Maturity Plans / Serial Schemes

As will be explained in Chapter 4, an investor in a debt security gets her

expected yield if she holds a fixed coupon debt security until maturity.
But if she sells her security earlier, then what she recovers would depend
on the market situation at the time of sale. She could equally end up with
a capital gain or a capital loss.

Fixed Maturity Plans (FMP) seek to eliminate the risk of such capital loss
by investing exclusively in a pre-specified debt security. Thus, if an
investor is

desirous of investing for four years, she can invest in a fund that will
invest in a pre-specified 4-year security.

On maturity, the scheme would redeem the security and pay the investor.
The investor, however, can exit earlier. But what she would recover in an
early exit would depend on the market situation at her time of exit.

Thus, an investor is assured a fixed return, if she stays invested in the

scheme for the period originally envisaged. But she also has an earlier
exit option, in case she invests in a FMP that is structured as an open-end
scheme.

Normally, an assured returns scheme can be offered only if there is a

named guarantor who offers the guarantee. A FMP is an‘assured returns
scheme’ through the back door, since the investor is reasonably assured
of the expected return (subject to credit risk and re-investment risk) if
she holds the units for the originally envisaged period – but the return is
assured without a named guarantor.
Further, as explained later in this chapter, mutual funds are tax efficient.
The income accrued in the scheme would not bear a tax, and would
therefore be

revested on “gross basis”. If the same income were to be received

directly by the investor, it would be subject to tax, thus reducing the
amount available for re-investment.
When a series of FMPs are issued for different maturities, they are called
Serial Funds. These can choose to invest exclusively in government
securities, in which case they become ‘Serial Gilts’. Alternatively, they
can invest in non-government securities, in which case they become
‘Serial Bond Schemes’.

Non-government securities of course have a risk of default (credit risk),

which does not exist for government securities.

 Hedge Funds or Leveraged Funds

While the name ‘hedge funds’ gives a psychological comfort of a fund

being low on risk, nothing can be further away from the truth.

Hedge funds are leveraged funds where the fund manager invests a mix of
funds belonging to its investors (unit capital and reserves) and funds from
lenders (borrowed funds). A leveraging of two would mean that for every
Re 1 of unit capital, an additional Rs 2 is borrowed, thus investing Rs 3 in
the market.

Borrowed funds have interest and repayment obligationsthat are

independent of how the market performs. Thus, in bad market conditions,
a non-leveraged fund only needs to bear a loss; a leveraged fund would
also need to generate additional resources to meet the interest and
repayment obligations on borrowed funds.

However, when the returns on the investment portfolio are higher than
the cost of borrowed funds, investors in a leveraged fund earn super-
normal return.

The following illustration will explain the concept better:

 Scheme : A B C
Leverage: Nil 1 2
time time
s
Unit Capital (Rs) 100 100 100
Loans (Rs) 0 100 200
Investible funds 100 200 300
(Rs)

Interest rate on loan N/A 15% 15%

Portfolio Return 20% 20% 10%

Earning before 20 40 30
interest (Rs)
Interest (Rs) 0 15 30
Profit (Rs) 20 25 -

Return on unit 20% 25 0%

capital %

Hedge funds are therefore extremely risky funds; the level of risk being a
function of the extent of leveraging. Why then the name ‘hedge fund’?

Suppose an investor has a short-sold position of Rs 100 in the market. If

the market goes up by 20%, then the investor effectively loses Rs 20.

If such an investor wants to neutralize this short-sold position, she can

either purchase stocks worth Rs 100. Or, if she invests in Scheme B in
the above example, she only needs to invest Rs 80 to fully reverse her
short-sold

position of Rs 100. The 25% gain on Rs 80 invested in Scheme C will give

her Rs 20 – precisely the amount she would lose in her earlier short-sold
position.

Thus, if a person already has an exposure that he wants to reverse, hedge

funds help him do that with minimum capital outlay (and therefore cost).
Hence the name ‘hedge funds’.
As seen in Scheme C, it is also easy for hedge funds to wipe out their
profits or even report significant losses.

Thus far, by limiting the scope for borrowing by MFs (as detailed in
Chapter 7), the Indian regulatory framework has kept hedge funds out.

 Option income
Suppose you would like the right, but not the obligation (an option) to buy
100 shares of Company Z from me at a price of Rs 15 some time in the
future. I will give you that option only if you pay me an option premium.
(In option market terminology, I would be the writer of that option).

The option premium would be my income, because it is not refundable to

you. There are 2 implications for me as the option writer:

• If the stock of Company Z rises above Rs 15 in the market, you would

exercise your option. in which case I would lose out on the opportunity
of gaining from that appreciation (opportunity loss).

• If I operate on a fully hedged basis, then I will retain 100 shares of

Company Z in my portfolio, so that I can offer them if you exercise
your option.

Thus, I effectively lose my right to sell the shares (dead asset). During
the period that I hold the share, the dividend would belong to me ( holding
income).

A typical option income fund will earn option premium through writing
options on securities where the holding income is attractive enough to
retain the security as ]a dead asset. The underlying view of the fund is
that holding income plus option premium more than covers for the
opportunity loss.

Option Income funds are permitted in India, though none has been
launched so far.
 Types of scheme s by Geogra phy

 Country / Region funds

Country funds invest in securities from a specific country or region. The
underlying belief is that the chosen country or region is expected to
demonstrate superior performance, which, in turn, would be favourable for
the securities (equity or debt) of that country.

For instance, funds that invested in Japan between 1990 and 1991 would
have nearly doubled their assets in the boom that followed. But funds that
were invested in South East Asia during 1997-98 bit the dust.

The returns on country funds are affected not only by the performance of
the market where they are invested, but also by changes in exchange
rates.

 Offshore funds
Offshore funds mobilise moneys from investors for investment outside
their country.

Indian mutual funds have been permitted to invest in foreign debt

securities in countries with fully convertible currencies. The debt
instruments, short term or long term, would need to have the highest
rating (foreign currency credit rating) by accredited/registered credit
rating agencies, say A-1/AAA by Standard & Poor, P-1/AAA by Moody’s,
F1/AAA by Fitch IBCA, etc. The MF may also invest in government
securities where the countries are AAA rated.

Indian mutual funds may also iInvest in the units / securities issued by
overseas mutual funds or unit trusts, which invest in the aforesaid
securities or are rated as mentioned above and are registered with
overseas regulators.
For Indian mutual funds as an industry, there is a cap of $500mn on
investment in American Depository Receipts (ADR) / Global Depository
Receipts (GDR) and foreign securities. Each mutual fund is permitted to
invest up to 10% of its net assets as on 31.3.2002. The foreign
investment limit for each mutual fund cannot be more than US$50 mn, nor
less than US$5mn.

PORTFOLIO MANAGEMENT ANALYSIS

 Equity Funds

STANDARD CHARTERED CLASSIC EQUITY FUND

Fund Objective; To maximize performance by investing in diversified

portfolio with out any cap bias that can generate long-term capital
growth.

Fund Investments is not restricted to any particular market sector or

company size, thereby investing across all sectors without market
capitalization bias covering large-cap, small-cap and mid-cap companies.

STANDARD CHARTERED Classic Equity Fund offers you a portfolio

whose core is invested in fundamentally strong companies that may or
may not be in current market favour. The remainder of the portfolio is
invested in companies / sectors that attempt to capture an oncoming
market bias ahead of the market rally.

Fund without any cap bias

In common parlance, when we say a company is big, one concludes the
bigness is on account of the number of employees it employs, its turnover,
its market share in its industry, but in the stock market universe what
determines size is the market capitalization. Market capitalization (or
commonly referred to as Market Cap) which is nothing but the product of
two components- number of shares that have been issued by the company
and the current share price of the company. You multiply these two and
viola you get the market capitalization.

The stock market universe can be broadly classified into three categories
of stocks (refers to companies which are listed on the stock exchange).
Large cap, Medium cap and Small cap companies.

Though there is no formal definition of categorization of companies into

Large, Medium or Small, broadly speaking Large Cap refers to companies
with large market capitalization and small- in the Indian context can be
construed as companies with market capitalization between Rs 50 - Rs
150 crores and quite naturally Medium Capitalisation refers to companies
that fall in between Large and Small.
The ground rule quite simply is - a large cap company is relatively much
safer as compared to a company with a small-cap. Due to their small size,
lack of established brand equity, minimal liquidity, small cap
companies are most susceptible to economic and environmental threats.

Evaluating Large and Mid cap companies

There are relevant benchmarks that try and slot companies as per their
market cap. For example, the BSE 200 is an index that comprises the top
200 listed companies based primarily on their market capitalization. The
BSE 500index represents nearly 93% of the total market capitalization on
Bombay Stock Exchange Limited. The BSE Mid-Cap tracks the
performance of companies whose market capitalization falls between 80
-95% of aggregate total market capitalization and the BSE Small-Cap
index tracks the performance of remaining 5% companies (95-100%).

All funds have a benchmark (which serves as a basis for comparison) and
the investment strategy of the fund decides what kind of companies a fund
would invest in.

A fund that invests in small and mid cap companies can also be diversified
in the
sense that it invests across various industries within the small and mid
cap space.

The Classic Equity Fund – Diversification across market caps

The STANDARD CHARTERED Classic Equity Fund is an open-ended

diversified equity fund that will endeavor to invest in well-managed
sustainable businesses. The portfolio of securities will be well diversified
across market caps and sectors, so identified, to mitigate overall risk.

Diversification follows the maxim of not putting all your eggs in one
basket. The extent of diversification can though differ. When we say the
Classic Equity fund has no market cap bias, we are merely referring to the
fact that the Fund selects companies irrespective of their market cap. It
does so purely on the merit of the company’s current performance and
future promise it holds. However the fund mindful of its motive of true
diversification it would try and ensure that there is no concentration of
companies belonging to a particular market cap or a particular industry/
sector.

Unique Features of Classic Equity Fund?

The Classic Equity Fund seeks to outperform the market by employing

strategies like sector rotation and moving weights dynamically across
different market capitalization spectrum.

De-mystifying Sector Rotation

When you travel to a foreign country it is quite natural to expect the local
attire to differ from the attire at home. And the best way to gel well in a
foreign country is to follow the old maxim Whe n In R om e Do As The
Roma ns Do .

By doing so you are merely, and most importantly, temporarily changing

your external demeanor and attire but you are certainly not changing your
intrinsic
character or basic nature. You do so purely to gain instant acceptability
and thus profit from it.

Thematic preference

While well-managed companies do perform well in the long run, from

time-to-time, there are certain themes that seem to catch investor fancy.
And it is this that the Classic Equity Fund tries to capture. Carrying
forward the analogy to the Classic Equity Fund, one could describe this
fund as a fu\intrinsic core comprising well-managed companies that hold
great promise in the future or the long-term but an adaptable exterior that
seeks to dip into the current market sentiment and attempts to profit from
it by investing in companies that have caught investor fancy.

Market Preference

For example the BSE Mid-Cap 200 Index scaled its new high in two long
rallies of about seven months each between July 2003 and January 2004,
and from August 2004 to March 2005. Thus it is not uncommon to hear
stocks belonging to a particular sector are performing better as the
market anticipates that the build-up of certain market-related, consumer
preference related or economy related conditions portend better for some
sectors than others.

While each of these rallies was driven primarily by the expectations of an

upturn in economic activity, the underlying factors and sectoral themes
that propelled them were different. First the sector focus was skewed
towards pharma and software (global outsourcing story- where the world
at large considered India as a cheaper base for manufacturing and
delivering service and hence companies that), banking (led by the decline
in interest rates) and power (based on power reforms- the power sector
caught the fancy of the markets on account of the sector emerging from
the regulatory haze and was driven by huge capital investments.).

Sectoral Preference

More recently with the economy growing at 8-9 %, consumption (that is

when consumers i.e. people like you and me spend or consume goods and
services) was a dominant theme in the markets. And this purely domestic
consumption story is one of the few ideas that professional investors are
almost unanimously positive about

Traditionally the universe of stocks that benefited from the consumption

theme was restricted to the FMCG sector but no longer. Sectors like
retailing, media, tourism, alcoholic beverages, automobiles, telecom and
housing too stand to gain during a consumption theme. However within
this theme, the performance in the stock market over the past year has
been mixed. Obvious beneficiaries of consumption, such as FMCG,
retailing and hotels have been under-performers. So it not necessary that
all sectors within a theme perform equally well.

The one thing to remember in such market fancies is that companies in

such sectors tend to witness a sharper rise in prices in the medium term.
Again it is not uncommon for markets to be in an experimental phase for
the market, where sectors and stocks may catch investor fancy for a
month or quarter, only to be dumped unceremoniously in the next few
months.

Future Preferred Sectors

There is an opportunity here. But deciphering these conditions much

before they occur and further on the sectors within it is easier said than
done. This is much like a surfer trying to predict the size of the next big
wave and accordingly position himself to ride it rather than get swamped
by it.

Thus a fund that seeks to do just this, that is, predict the next big wave
and ride it when it actually develops can have very volatile returns in the
short to medium term.

Consistancy

The point therefore is simple. Anticipating the dominant theme and within
that the sector is something that even to most professionals is a
challenge. Therefore most diversified equity funds prefer cherry-picking
robust well-managed companies with a clear eye only on the long term.

Such funds therefore tend to under-perform when a particular theme is in

vogue and if the stocks in the fund’s portfolio do not figure in the current
market rally. So while the long term performance may look promising, it is
the medium term performance that may suffer.

The Classic Equity Fund attempts to plug that and attempts to stay within
a band of acceptability by attempting to ensure that a part of its portfolio
stays contemporary by taking medium term exposures in sectors that
have caught the market fancy.

The Classic Equity Fund does not lose its intrinsic character or basic
nature of a diversified equity fund. A large part of the portfolio comprises
companies that are carefully handpicked with a view on the long term but
has a small portion that keeps rotating sectors by investing in those
sectors and in turn companies that look promising in the medium term.
The fund manager of the Classic Fund would attempt to constantly scan
the environment and interpret which sectors-and in turn companies-
would profit from the build –up of prevalent conditions in the near future
and thus attempt to invest early on and thus attempt to profit from these
investments.

Conclusion

Trying to mimic the Classic Equity Fund is much like investing a certain
percentage of your portfolio in a core diversified fund and a certain
percentage
that you keep rotating across sector funds trying to capitalize on the
market fancy for a particular sector. Trying to mimic this is easier said
than done for often trying to decipher which sector will catch the market
fancy is a challenge even to the most seasoned investment professional.

The Classic Equity Fund attempts to does this for you and does away with
the need of having to maintain two different sets of funds one for the very
long term and one that takes advantage of the medium term. By
attempting to rotate sectors the fund is more in touch with prevalent
conditions.

Risk and Returns

RISK

Mean -1.23
StandardPerformance
Scheme Deviation 4.99
(%) as on FEB 20, 2009
Sharpe -0.27
1 Month 3 6 Months 1 Year 3 Years 5 Years Sinc e
Beta Months 0.83 Inceptio
n

-2.7 2 3. 96 -3 4.2 9 -48. 42 -4. 05 NA 2. 87

Treynor -1.61
Sortino -0.43
Correlation 0.83
Fama -0.15

Portfolio

PORTFOLIO ATTRIBUTES STYLE BOX

16.48 as on Dec-
P/E
- 2008

P/B 4.75 as on - Dec-

2008

Dividend Yield 1.48 as on Dec- -

2008

Market Cap (Rs. in 66,387.54 as on

crores) Dec- - 2008

Large
72.32 as on Jan -
2009

Mid 5.45 as on Jan - 2009

Small NA

32.35 as on Jan -
Top 5 Holding (%)
2009

No. of Stocks 23

Expense Ratio (%) 2.33

TOP 10 HOLDINGS

Percentage
Percentage
of Change
Stock Sector P/E of Net Qty Value
with last
Assets
month

Other Debts Debt Investments NA 12.51 NA 26.95 9.97

Oil & Gas, Petroleum &

Reliance Industries Ltd Refinery
13.33 8.07 131,432 17.40 7.39

Bharti Airtel Ltd Telecom 16.13 7.38 250,865 15.90 -11.42

Hindustan Unilever Ltd Diversified 27.23 6.38 525,313 13.74 4.50

Bharat Heavy Electricals Electricals & Electrical

22.36 5.86 95,552 12.62 -3.07
Ltd Equipments
Engineering & Industrial
Larsen & Toubro Limited Machinery
15.93 4.66 145,648 10.05 29.86

Computers - Software &

Infosys Technologies Ltd Education
14.05 4.32 71,204 9.30 17.09

State Bank of India Banks 9.13 3.57 66,850 7.69 2.26

Hindustan Petroleum Oil & Gas, Petroleum &

-0.47 3.31 249,600 7.13 4.69
Corporation Ltd Refinery
21.41
Bajaj Auto Ltd Auto & Auto ancilliaries 10.60 3.15 143,256 6.79

Whats In Whats out

Maruti Udyog Ltd

No Changes
Jubilant Organosys Limited

SECTOR ALLOCATION

Auto & Auto ancilliaries 3.15

Banks 9.35
Computers - Software & Education 4.32

Current Assets 7.93

Debt Investments 12.51

Diversified 6.38

Electricals & Electrical Equipments 5.86

Engineering & Industrial Machinery 6.25

Finance 5.74

Miscellaneous 1.79

Oil & Gas, Petroleum & Refinery 16.98

Packaging 1.61

Pharmaceuticals 2.92

Plastic 2.25

Power Generation, Transmission & Equip 2.87

Steel 2.72

Telec om 7.38

ASSSSET ALLOCATION (%)

E qui ty Deb t Cas h & Equ iv alen t

79.57 12.51 7.92

STANDARD CHARTERED IMPERIAL EQITY FUND

The fund’s compact portfolio of large-caps is likely to weather the
current market correction better.
The one-year return, although at -2.5 per cent, has declined lesser than
the diversified fund category average of -14 per cent, suggesting that the
portfolio may have higher tolerance to bear phases. The large-cap tilt
also holds promise for a lead rally when the market makes a recovery.
However, given the fund’s short track record of just over two years since
its launch in March 2006, investors can avoid fresh exposure to the fund
and instead watch its performance against such peers as Sundaram Select
Focus or Kotak-30.
The fund’s monthly return pattern since its launch also suggests that
while it has managed to contain the downside better than its benchmark
BSE-200, the returns on the upside have lagged behind.

SUITABULITY:

Standard Chartered Imperial Equity provides exposure to stocks of

companies that are large in terms of their business as well as market
capitalization. To this extent, the fund may be suitable for novice
investors looking to enter the equity market through exposure to
prominent stocks.

The compact portfolio of less than 25 stocks also allows the fund to take
focused bets, which, if timed well, hold potential for higher returns.

PERFORMANCE:

The time of launch did not prove to be very auspicious for the fund as it
had to face the May 2006 correction soon after raising funds. However,
the correction could have provided a good window of opportunity to enter
the market.

The fund’s return of about 11 per cent since its launch in March 2006 is
superior to returns generated by diversified funds that were launched
during the same period. This performance appears reasonable given the
bout of corrections and the absence of any prolonged rally since the fund
launch.

Standard Chartered Imperial returned 15 per cent over the last two years,
beating its benchmark by two percentage points. However, the monthly
return since inception suggests that it has had difficulty in consistently
beating the benchmark. While it did so in just 11 of the 26 months since
inception, the fund has performed well against the Sensex — beating the
index over 80 per cent of the times.

PORTFOLIO OVERVIEW:
 The fund, as part of its strategy, also seeks to invest in companies that
have unlocked potential by hiving off potential businesses and also in
companies that are into emerging sectors. The portfolio holds stocks such
as Larsen & Toubro, Suzlon Energy and Gujarat NRE Coke, reflecting the
above themes.

The fund increased exposure to software and Parma as defensive bets.

This has reduced losses after its worst quarterly performance between
January-March 2008.

OBJECTIVE

To generate long-term capital growth from an actively managed portfolio

of predominantly equity and equity related instruments. The Scheme
portfolio would acquire, inter alia, small and medium size businesses with
good long term potential, which are available at cheap valuations. Such
securities would be identified through disciplined fundamental research
keeping in view medium to long-term trends in the business environment

FUND FEATURES
Type of Scheme Open Ended

Nature Equity
Option Growth
Fund Manager
Inception Date Kenneth
Sep Andrade .
26, 2005
SIP
Face Value (Rs/Unit) 10
STP
Fund Size in Rs. Cr. 507.68 as on Jan 30, 2009
SWP
Expense ratio(%) 2.43
Portfolio Turnover Ratio(%) 127

Last Dividend Declared NA

Minimum Investment
5000
(Rs)
Purchase Redemptions Daily
NAV Calculation Daily

Amount Bet. 0 to 49999999 then Entry load is 2.25%. and

Entry Load
Amount greater than 50000000 then Entry load is 0%.

If redeemed bet. 0 Year to 1 Year; ; and Amount Bet. 0 to

Exit Load 49999999 then Exit load is 1%. and Amount greater than
50000000 then Exit load is 0%.

SCHEME PERFORMANCE (%) AS ON FEB 20, 2009

Since
1 M on th 3 M on th s 6 M on th s 1 Year 3 Years 5 Year s
Ince pti on

-1.70 9.18 -26.21 -35.83 NA NA 0.37

RISK
Mean -0.88
Standard Deviation 5.05
Sharpe -0.20
Beta 0.86

Treynor -1.15
Sortino -0.33
Correlation 0.85
Fama 0.22

PORTFOLIO

PORTFOLIO STYLE BOX

TOP TEN HOLDINGS
 Percentage of
Percentage of
Stock Sector P/E Qty Value Change with
Net Assets
last month
Auto & Auto ancilliaries 6.06
Banks 15.89
Other Debts Debt Investments NA 11.33 NA 15.15 67.77
Cement 4.34
Reliance Industries Oil & Gas, Petroleum
Computers - Software&&Refinery
Education 13.33 7.43 75,076 9.94 4.4131.75
Ltd
Current
State Assets
Bank of India Banks 9.13 6.63 77,000 8.86 13.16
-8.34
Debt
Oil & Investments
Natural Gas Oil & Gas, Petroleum 11.33
8.79 6.12 125,000 8.19 63.69
Corpn Ltd & Electrical
& Refinery
Electricals Equipments 6.02
ICICI BANK LTD. Banks
Finance 11.13 5.94 190,870 7.94 2.06-8.70

MetalsAirtel Ltd
Bharti Telecom 16.13 5.40 114,000 7.23 1.03
-11.36
Oil & Gas, PetroleumTobacco
& Refinery
& Pan 23.51
ITC Ltd 21.26 5.39 400,000 7.20 109.67
Masala
Pharmaceuticals 1.41
Indian Oil Oil & Gas, Petroleum
Telecom -1.16 4.74 142,200 6.34 5.404.66
Corporation Ltd & Refinery
Infosys
TobaccoTechnologies
& Pan MasalaComputers - Software
14.05 4.41 45,150 5.90 5.3975.43
Ltd & Education
Ambuja Cements
Cement 7.50 4.34 819,000 5.80 1.10
Ltd

WHATS IN WHATS OUT

Reliance Petroleum Ltd Larsen & Toubro Limited

Maruti Suzuki India Ltd
Maruti Udyog Ltd
ABB Ltd
Punjab National Bank
Sun Pharmaceuticals Industries Ltd

SECTOR ALLOCATION

ASSET ALLOCATION
 Equity Debt Cash & Equivalent

75.51 11.33 13.16

STANDARD CHARTERED PREMIER EQUITY

1.start of a period of high growth and profitability.

2. The investments will attempt to capture shifts in the business

environment with regard to new business opportunities, new technologies,
new trends, etc.

3. The fund has a bias towards a portfolio of companies which are going
to undergo transformational changes in their business prospects.

We rely predominantly on in-house primary research of companies in this

portfolio. This requires meeting up with top management, employees,
dealers, trade bodies, etc

The fund invests in small and medium-sized businesses in emerging

segments or markets. This gives the portfolio a “venture-capital” feel and
makes it riskier than even the typical mid-cap fund.

The fund lacks a long track record and, therefore, need not form part of
one’s core portfolio. It could, however, complement other mid-cap funds
in a portfolio and help boost overall returns. Investments can be planned
in phases, as the fund is likely to encounter a greater degree of volatility
than the average diversified fund.

PERFORMANCE:
Premier Equity has delivered a return of 26 per cent over the past year,
beating benchmark BSE-200 by a whopping 17 percentage points. Its
performance is equally impressive against the broader benchmark, the
BSE-500.

The fund has withstood the turbulent period over the last six months and
three months better than the average fund in the diversified equity
category. It has shed about 28 per cent of its value since the beginning of
the year, in line with the BSE-500. The net asset value has doubled since
its launch in October 2005, while the BSE-500 has gained 75 per cent in
absolute terms. However, Premier Equity has witnessed periodic bouts of
underperformance and even sharp slides in value as several stocks in the
portfolio enjoy expensive valuations and are more vulnerable to a
meltdown.

PORTFOLIO OVERVIEW:

The fund follows a bottom-up approach to investing. The latest portfolio

does not reveal any sector biases. Investments are stock-specific and the
fund takes measured exposures to stocks. The top ten stocks account for
about 45 per cent of the portfolio. The latest portfolio, as on April 30,
2008, sported about 27 stocks.

The fund appears to favour stocks that have a niche within their category
or are leaders in emerging categories. Within a mature sector such as
FMCG, for instance, the fund has homed in on Jyothy Laboratories. Stocks
such as Alphageo, Entertainment Network, Time Technoplast, Vimta Labs,
Educomp Solutions, Onmobile Global and 3M India are stocks with
leadership status in nascent segments. Many of these stocks have
delivered significant returns over the past year and trade at premium
valuations. In the near term, these stocks may remain range-bound as
investors stay away from richly valued stocks.

However, from a long-term perspective, they continue to hold promise.

Importantly, the ability to continue to pick such stocks ahead of the
market would be key to sustaining the fund’s performance.

Premier Equity does not have a specific mid-cap mandate, but the fund is
inherently mid-cap biased. It, however, periodically curtails inflows into
the fund
to ensure that it remains at a manageable size. This offers some
protection to investors as it ensures that the fund sticks to its original
mandate.

OBJECTIVE

To generate long-term capital growth from an actively managed portfolio

of predominantly equity and equity related instruments. The Scheme
portfolio would acquire, inter alia, small and medium size businesses with
good long term potential, which are available at cheap valuations. Such
securities would be identified through disciplined fundamental research
keeping in view medium to long-term trends in the business environment.

FUND FEATURE
Type of Scheme Open Ended

Nature Equity
Option Growth
Inception Date Sep 26, 2005
Face Value (Rs/Unit) 10
Fund Size in Rs. Cr. 507.68 as on Jan 30, 2009

Last Divdend Declared NA

Minimum Investment (Rs) 25000

Fund Manager
Purchase Redemptions Kenneth
Daily Andrade .

SIP
NAV Calculation Daily

STP
Entry Load Amount Bet. 0 to 49999999 then Entry load
is 2.25%.
SWP
Exit Load If redeemed bet. 0 Year to 1 Year; Exit load
Expense ratio(%) 2.15
is 1%.
Portfolio Turnover Ratio(%) 21

Scheme Performance (%) as on FEB 20, 2009

Since
1 Month 3 Months 6 Months 1 Year 3 Years 5 Years
Inception
 -1.70 3.69 -37.13 -47.85 3.35 NA 5.60

RISK

Mean -1.12

Standard Deviation 4.78

Sharpe -0.26

Beta 0.72

Treynor -1.70

Sortino -0.40

Correlation 0.71

Fama -0.08

PORTFOLIO
 PORTFOLIO ATTRIBUTE STYLE BOX

P/E 14.89 as on Dec -

2008

P/B 2.65 as on Dec -

2008

Dividend Yield 1.24 as on Dec -

2008

Market Cap (Rs. 3,217.71 as on

in crores) Dec - 2008

Large 6.86 as on Jan -

2009

Mid 56.17 as on Jan -

2009

Small 8.44 as on Jan -

2009

Top 5 Holding 26.34 as on Jan -

(%) 2009

No. of Stocks 26

Expense Ratio 2.15

(%)

TOP 10 HOLDINGS
 Percentage
Percentage
of Change
Stock Sector P/E of Net Qty Value
with last
Assets
month

Other Debts Debt Investments NA 17.75 NA 90.11 34.04

29.0 4,800,00
Shree Renuka Sugars Ltd. Sugar 7.52 38.16 8.16
2 0
11.4 6,317,77
Exide Industries Ltd Auto & Auto ancilliaries 5.06 25.68 -13.08
8 3

Other Equities Miscellaneous NA 4.94 NA 25.10 -13.38

Shriram Transport 1,313,94

Finance 4.49 4.87 24.72 -3.50
Finance Company Ltd 5
Coromandel Fertilisers Fertilizers, Pesticides & 1,846,78
4.41 3.95 20.07 15.24
Ltd Agrochemicals 9
12.7
Blue Dart Express Ltd Miscellaneous 3.70 432,231 18.80 2.70
5
Power Generation, 16.6 2,732,00
PTC India Ltd. 3.63 18.43 -1.88
Transmission & Equip 7 4

Axis Bank Ltd Banks 9.74 3.55 415,000 18.00 -28.67

Balrampur Chini Mills 10.3 3,000,00

Sugar 3.54 17.97 20.40
Ltd 0 0

SECTOR ALLOCATION

Auto & Auto ancilliaries 7.45

Banks 3.55

Cement 4.56

Computers - Software & Education 1.47

Consumer Durables 2.35

Current Assets 5.84

Debt Investments 17.75

Electricals & Electrical Equipments 3.31

Engineering & Industrial Machinery 1.58

Fertilizers, Pesticides & Agrochemicals 6.53

Finance 6.49

Housing & Construction 2.71

Leather 2.37

Miscellaneous 8.65

Oil & Gas, Petroleum & Refinery 1.14

Power Generation, Transmission & Equip 3.63

Sugar 11.06

Textiles 5.15

Trading 2.36

Transport & Travel 2.04

ASSET ALLOCATION

Equity Debt Cash & Equivalent

76.41 17.75 5.84

STANDARD CHARTERED ARBITRAGE FUND

The STANDARD CHARTERED Arbitrage Fund is a fund that invests

predominantly in arbitrage opportunities in the cash and the derivative
segments of the equity markets. As an open ended equity fund, it offers
the tax benefits that equity schemes enjoy and with up to 35% allocation
in debt and money market instruments, the fund has relatively low
investment risk.

FUND FACTS

OBJECTIVE
The investment objective of the Scheme is to generate capital
appreciation and income by predominantly investing in arbitrage
opportunities in the cash and the derivative segments of the equity
markets and the arbitrage opportunities available within the derivative
segment and by investing the balance in debt and money market
instruments.

FUND FEATURES

Type of Scheme Open Ended Fund Manager

Arjun Parthasarthy ,
Mr. Ashwin Patni .
Nature Equity
SIP
Option Growth
STP
Inception Date Nov 30, 2006
SWP
Face Value
10 Expense ratio(%) 1.75
(Rs/Unit)
Fund Size in Rs. 302.33 as on Jan Portfolio Turnover 78
Cr. 30, 2009 Ratio(%)

Last Divdend Declared NA

Minimum Investment (Rs) 5000

Purchase Redemptions Daily

NAV Calculation Daily

Entry Load Entry Load is 0%.

If redeemed bet. 0 Days to 30 Days; Exit load is

Exit Load
0.25%.

RISK RETURN

Scheme Performance (%) as on Feb 20, 2009

 Sin ce
1 Mo nt h 3 M on th s 6 Mo nt hs 1 Year 3 Year s 5 Years
In cept io n

0.23 1.49 3.99 6.33 NA NA 7.96

RISK

Mean 0.13 Treynor 0.11

Standard 0.22 Sortino 0.21

Deviation
Correlation 0.28
Sharpe 0.12
-0.17
0.25 Fama
Beta

PORTFOLIO

PORTFOLIO PERRFORMANCE STYLE BOX

P/ E
11.46 as on Dec -
2008

P/ B
1.90 as on Dec -
2008

Div idend Yield

2.49 as on Dec -
2008

Mar ket Ca p (R s. 30,740.92 as on

in cro res) Dec - 2008

Lar ge
35.86 as on Jan-
2009

Mid
31.45 as on Jan -
2009

Smal l
1.50 as on Jan -
2009

Top 5 Ho ldin g 16.11 as on Jan -

(%) 2009

No . of Sto ck s 105

Ex pense Rat io 1.75

(%)
 WHATS IN WHATS OUT
Chambal Fertilisers & Chemicals Ltd IBN18 Broadcast Ltd.
Jet Airways India Ltd Wire and Wireless India Ltd.
Jindal Steel and Power Ltd. Satyam Computer Services Ltd
Industrial Development Bank of India Associated Cement Companies Ltd
Ltd

TOP 10 HOLDINGS

Percentage
Percentage
of Change
Stock Sector P/E of Net Qty Value
with last
Assets
month

Other Debts Debt Investments NA 14.46 NA 43.73 93.14

Global Tele- 19.0
Telecom 3.83 521,530 11.58 6.88
Systems Ltd 8
Ultratech Cement
Cement 5.19 3.53 269,200 10.66 2.72
Ltd.
Tobacco & Pan 21.2
ITC Ltd 3.44 578,250 10.41 63.38
Masala 6
Balrampur Chini 10.3 1,377,60
Sugar 2.73 8.25 13.09
Mills Ltd 0 0
Hindustan Oil & Gas,
-0.4
Petroleum Petroleum & 2.20 232,700 6.65 4.74
7
Corporation Ltd Refinery
Ranbaxy -6.1
Pharmaceuticals 2.08 291,962 6.30 -32.72
Laboratories Ltd 6
Electricals &
Bharat Heavy 22.3
Electrical 2.04 46,701 6.17 312.55
Electricals Ltd 6
Equipments
JaiPrakash Housing & 12.7
1.99 788,250 6.01 747.41
Associates Ltd. Construction 8
Hindalco 1,179,46
Metals 3.34 1.91 5.77 234.34
Industries Ltd 9

SECTOR ALLOCATION

Auto & Auto ancilliaries 1.30

Banks 8.08

Cement 6.10

Chemicals 1.54

Computers - Software & Education 3.63

Consumer Durables 0.40

Current Assets 16.68

Debt Investments 14.46

Diversified 0.32

Electricals & Electrical Equipments 2.10

Electronics 0.04

Engineering & Industrial Machinery 1.66

Entertainment 0.15

Fertilizers, Pesticides & Agrochemicals 0.99

Finance 3.27

Hotels & Resorts 0.24

Housing & Construction 3.91

Metals 2.09

Oil & Gas, Petroleum & Refinery 6.89

Pharmaceuticals 4.11

Power Generation, Transmission & Equip 4.15

Steel 2.81

Sugar 3.43

Telecom 6.16

Textiles 0.70

Tobacco & Pan Masala 3.83

Transport & Travel 0.96

ASSET ALLOCATION

Equity Debt Cash & Equivalent

68.86 14.47 16.67

STANDARDCHARTERED TAX SAVER (ELSS) FUND

STANDARD CHARTERED Tax Saver (ELSS) Scheme is a ten year old

equity linked savings scheme. It is a scheme formulated under the Equity
Linked Savings Scheme, 2005, issued by the Indian Central Government.
Accordingly, investment made by individuals, HUFs and / or specified
category of BOI / AOPs (as per ELSS notification) in the Scheme up to a
sum of Rs. 100,000 in a financial year would qualify for deduction under
Section 80-C of the Act.

Investors other than these specified investors shall not qualify for the tax
benefit as mentioned under Section 80-C of the Income Tax Act.

The investment objective of the Scheme is to seek to generate long-term

capital growth from a diversified portfolio of predominantly equity and
equity-related securities. In accordance with ELSS, investments in equity
and equity related instruments shall be to the extent of at least 80% of net
assets of the Scheme.

Investments in the scheme shall be locked in for a period of 3 years from

the date of allotment.

How to redeem?

Units can be redeemed / switched out only after the expiry of lock-in
period of three years. Thereafter the Units can be redeemed (i.e., sold
back to the Fund), at the Applicable NAV (hereinafter defined) on relevant
business days. Repurchase facility is available on all business days on
completion of lock in period of 3 years from the date of allotment.

The lock in period may be changed prospectively if so permitted by the

applicable regulations (SEBI Regulations and the ELSS guidelines). A Unit
holder may request redemption of a specified amount or a specified
number of Units, (subject to the minimum redemption amount which is
presently in multiples of Rs. 500/-) the number of Units specified will be
considered for deciding the redemption amount.

OBJECTIVE
The investment objective of the Scheme is to seek to generate long-term
capital growth from a diversified portfolio of predominantly equity and
equity-related securities.

FUND FEATURES

Type of Scheme Close Ended

Nature Equity

Option Growth

Inception Date Feb 23, 2007

Face Value (Rs/Unit) 10

Fund Size in Rs. Cr. 42.99 as on Jan 30, 2009

Fund Manager Ajay Bodke .

SIP
STP
SWP
Expense ratio(%) 2.43

Portfolio Turnover Ratio(%) 55

Last Divdend Declared NA

Minimum Investment (Rs) 500

Purchase Redemptions Daily

NAV Calculation Daily

Entry Load Entry Load is 0%.

Exit Load Exit Load is 0%.

RETURNS

Scheme Performance (%) as on FEB 20, 2009

 Since
1 M on th 3 M on th s 6 Mo nt hs 1 Year 3 Years 5 Years
Ince pti on
-2.18 4.24 -34.21 -49.62 NA NA -17.22

RISK

Mean -1.28 Treynor -1.70

Standard Deviation 5.06 Sortino -0.43

Sharpe -0.27 Correlation 0.81

Beta 0.81 Fama -0.18

PORTFOLIO

PORTFOLIO ATTRIBUTES STYLE BOX

P/E 15.90 as on Dec
- 2008

P/B 3.98 as on Dec -

2008

Dividend Yield 1.53 as on Dec -

2008

Market Cap (Rs. 61,425.07 as on

in crores) Dec - 2008

Large 70.60 as on Jan-

2009

Mid 14.57 as on Jan -

2009

Small NA

Top 5 Holding 30.39 as on Jan -

(%) 2009

No. of Stocks 23

Expense Ratio 2.43

(%)
TOP 10 HOLDINGS
 Percentage
Percentage
of Change
Stock Sector P/E of Net Qty Value
with last
Assets
month

Oil & Gas, Petroleum & 13.3

Reliance Industries Ltd 7.95 25,806 3.42 7.51
Refinery 3

State Bank of India Banks 9.13 6.87 25,640 2.95 -10.73

18.8
HDFC Bank Ltd Banks 6.17 28,660 2.65 -7.38
6

11.4 513,46
Exide Industries Ltd Auto & Auto ancilliaries 4.86 2.09 -15.70
8 0

Hindustan Petroleum Oil & Gas, Petroleum & -0.4

4.56 68,500 1.96 4.87
Corporation Ltd Refinery 7

27.2
Hindustan Unilever Ltd Diversified 4.46 73,202 1.92 4.79
3

Power Generation, 21.0 100,24

NTPC Limited. 4.42 1.90 4.95
Transmission & Equip 4 5

Larsen & Toubro Engineering & Industrial 15.9

3.90 24,308 1.68 48.63
Limited Machinery 3

Computers - Software & 14.0

Infosys Technologies Ltd 3.82 12,558 1.64 17.08
Education 5

Bharat Heavy Electricals & Electrical 22.3

3.79 12,350 1.63 -3.14
Electricals Ltd Equipments 6

SECTOR ALLOCATION

Auto & Auto ancilliaries 7.92

Banks 14.97

Cement 2.59
Computers - Software & Education 3.82

Current Assets 14.39

Diversified 4.46

Electricals & Electrical Equipments 3.79

Engineering & Industrial Machinery 6.73

Finance 5.75

Miscellaneous 0.45

Oil & Gas, Petroleum & Refinery 15.61

Packaging 2.60

Pharmaceuticals 3.72

Plastic 1.69

Power Generation, Transmission & Equip 4.42

Steel 3.34

Telecom 3.74

ASSET ALLOCATION

Equity Debt Cash & Equivalent

85.61 0.00 14.39

SUGGESTIONS & RECOMENDATIONS

SUGGESTIONS AND RECOMMENDATION

1. The Mutual Funds Manager has to spend more on advertisement

and other promotional activities to create awareness among the
public

2. The Mutual Funds Manager has to introduce some new schemes

and offers in the market to increase the sale of Mutual Funds.

3. The equity fund is very high risky, so during the depressed

economy they should inform to investors and put them in some
other schemes which give them reasonable returns.

4. The Mutual Funds booklet should have to issue to each investor,

in order to get a clear – cut idea about Mutual Funds.

5. It has to maintain better services to capture the market.

 CONCLUSION

The Mutual Fund there by collects money or funds from a group of

people with similar investment goals. The Mutual Fund scheme is well
known to a good percentage of population. The advertisement has become
an affective tool to wake public awareness. The switching off from the
Mutual Funds is very Low. The investment Manager has to guide the
investors to choose the correct Mutual Funds, which they prefer.
 REFERENCES
&
BIBILOGRAPHY

REFERENCES

Websites
http://www.valueresearchonline.com/funds/amclist.asp
www.standard charteredmf.com
http://www.moneycontrol.com/mf/returns.php
http://www.investopedia.com/articles/mutualfund/
http://finance.indiamart.com/india_business_information/mutual_funds_concept.html
http://finance.indiamart.com/india_business_information/drawbacks_of_mutual_funds.ht
ml
http://sify.com/finance/mf/moreheadlines.php?ctid=2&cid=20803
www.mutualfundsindia.com
www.sify.com/finance

Bibliography
Edwin J Elton & Martin J Gruber; Modern Portfolio Theory and Investment
Analysis
Pg no.: 160-209, 630-672

V. K Bhalla; Security Analysis and Portfolio management

Pg No.501-552

David F Swensen; Pioneering Portfolio management

Pg. No 132-155

Samir J Barua, J R Varma, V Raghunathan; Portfolio Management

Pg. No 120-146.