A PROJECT REPORT

On
MUTUAL FUND
(SYSTEMATIC INVESTMENT PLANS)
IN SECURITY INVESTMENT PLATFROM

By
RAJESH KUMAR SAHU
Roll no.:-13209V160018
At
BHUBANESWAR STOCK EXCHANGE LIMITED
(ODISHA CAPITAL MARKET & ENTERPRISES LIMITED)

A report submitted in partial fulfilment of the requirements of

MBA summer internship program
Submitted to

Dr. Rashmita sahoo Mr. Bipin Bihari dutta

Asst. professor company Guide
Dept. Of Business Administration Assistant manager
Utkal University Bhubaneswar stock Exchange Ltd.
Vani vihar

1
 DECLARATION

This is to certify that the project titled “SYSTEMATIC INVESTMENT PLANS IN

SECURITY INVESTMENT PLATFROM” is a bona fide work done by Rajesh
kumar sahu, Roll no:-13209V160018, Batch 2016- 18 in partial fulfilments of the
requirements for the award of the degree MBA and submitted to Department of Business
Administration

This work was not submitted earlier at any other University or Institute for the award of
the degree.

Yours faithfully,

RAJESH KUMAR SAHU

Roll no. 13209V160018

Dept. Of Business Administration

Utkal University,Vani vihar

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 Authorisation

This is to certify that this is a bonafide project report submitted in partial fulfilment
of the requirements of MBA program of Utkal University.

This report document titled “SYSTEMATIC INVESTMENT PLANS IN SECURITY

INVESTMENT PLATFROM” is a submission of work done by Rajesh kumar sahu.

This report has been formally submitted to Dr. Rashmita Sahoo(Asst. professor),
Department of Business Administration, Utkal University.
And to Mr. Bipin Bihari dutta, Assistant Manager, Bhubaneswar Stock
Exchange Ltd.

This report has been verified and authenticated by:

Dr.Rashmita Sahoo
Asst. Professor
Business Administration
Utkal University

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 ACKNOWLEDGEMENT
I would like to take this opportunity to thank all those who helped me in the successful
completion of my Summer Internship Program .My Summer Internship Program at
Bhubaneswar Stock Exchange Ltd. has been a rewarding experience. The project undertaken
during the internship was regarding ― SYSTEMATIC INVESTMENT PLANS IN SECURITY
INVESTMENT PLATFROM”
I am most grateful to Mr. Bipin Bihari dutta, Assistant Manager, Bhubaneswar Stock Exchange
Ltd. my mentor and company guide for his never-ending support. He has been a constant source
of inspiration at each and every step of my research work.

I am immensely thankful to Dr. Rashmita Sahoo, for being a guiding force and leading me
throughout the process of Summer Internship Program.

I would also like to thank all my friends and colleagues, whom I worked with, for their constant
support.

RAJESH KUMAR SAHU

Roll no. 13209V160018

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 CONTENTS:
Abstract 08
1.Introduction 09
1.1 Objective of the project 09
1.2 Purpose of the project 10
1.3 Scope of the project 10
1.4 Research type 10
1.5 Research methodology 10
2. A brief about Mutual Funds 11
2.1 Definition 11
2.2 Structure 12
2.3 Classification of Mutual Funds 13
2.4 History of mutual funds in India 16
2.5 Terminology of mutual funds 19
2.6 Tax benefits of mutual funds 20
2.7 Selection of best mutual funds 21
3. About SIP (Systematic Investment Plans) 22
3.1 Concept of SIP 23
3.2 Working of SIP 24
3.3 Features of SIP 25
3.4 Benefits of SIP 25
3.5 Disadvantages of SIP 26
3.6 Defining the investment objectives 26
3.7 SIP calculator 27
3.8 Rupee cost averaging 27

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 3.9 Power of compounding 28
3.10 Importance of SIP 28
3.11 Comparison of SIP with other investment avenues 28
4. Research by Direct Survey Method 29
4.1 Back Ground of Survey 30
4.2 Importance of Survey 32
4.3 Objective of Survey 34
4.4 Methodology of Survey 36
4.5 Data analysis & Interpretation 40
4.6 Limitation of Survey 44
4.7 Result & Findings 45
5. Principle of RCA & Graphical Presentation 46
5.1 Analysis of RCA 46
5.2 Interpretation 46
5.3 Findings from RCA 47
6. Secondary Research & Data analysis 47
6.1 Top Rank Mutual Fund 48
6.2 Top & best SIP Mutual fund 48
6.3 Long Term performance of Equity based fund(SIP) 48
6.4 Comparison & analysis 49
6.5 Equity Based Mutual fund category 49
6.6 Observation & Findings 51
7. Performance evaluation of SIP by Sharpe Measure 53
8. Final Conclusion & recommendation 54
9. References 55
10. Web links 55

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 ABSTRACT

Investors have a plethora of investment options, either directly or indirectly. On top of it, new
ways of making investment have come up with the advent and development of technology. This
is particularly true about the mutual fund industry in that a new way of investment in mutual
funds by paying a fixed amount of money on equal intervals, known as systematic investment
plan (SIP). It resembles to a recurring deposit scheme of a bank or post office. The SIP has
gained a sizable popularity and hence a structured study in Indian context is in place. And it is
also important to understand and analyze investor’s perception and expectations and unveil some
extremely valuable information to support financial decision making of mutual funds. The
objectives of the present paper include comparison of SIP with lump sum investment using data.
Hence the effort in this direction will be a very useful for the policy makers, Regulators and fund
managers for designing strategies for future implications. Since a sizable population is still using
the traditional investment options and are deprived of the benefits of SIP, the findings of the
proposed research would be of immense benefits to the society.

The present study aims to compare the SIP (Systematic Investment Plan) with Lump sum
Investment and also to put on some knowledge about key factors that influence investor’s
investment behavior. It is an attempt to find out factors affecting individual decision making on
basis of age, gender and occupation.

Responses of randomly selected individuals have been compiled, analyzed and observed and
they have been analyzed in accordance with few other factors, which have given many
interesting facts and have helped to understand different influencing factors for an investor to
invest in different class of assets

In this study not only the research has been done on the investor’s awareness and preferences
towards mutual funds and SIP schemes but also performance evaluation has been done on the
returns of the various mutual fund and SIP schemes. Last 5 years data has been collected and
analyzed. Using rupee cost averaging concept SIP’s efficiency is evaluated. Further comparison
of performance of SIP with Lump sum is done using Sharpe measure. Finally, after brooding into
the matter it is found that SIP is the winner in all the cases of analysis. Even from the survey it is
found that the investors also prefer SIP schemes more than that of lump sum investment.

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 1. INTRODUCTION:

Choosing a wise investing option is very necessary to minimize the risk and to maximize
the return because a balance is required to be maintained between the risk and return.
With the fulfilment of this objective, SIP has played a significant role in the Indian
financial market. It’s gives opportunities to small investors to invest their small amount
and to take return of financial market with minimum risk.

The punch line famous in the investment industry “Systematic Investment Plans –
Small Savings, Big Returns” holds well. Although, the concept of systematic
investments are also available in post offices etc., but today SIPs have become
synonymous to Mutual Funds which are regulated by Securities and Exchange Board of
India (SEBI). Average Indian families have one or two earning members. So the scope of
saving is also limited, which further reduces down the scope of bulk investment out of
those savings. Therefore, SIPs can play an important role, as the concept itself is based
upon small regular amount to be invested.

Systematic investment plans is a plan of mutual fund, in which the investments are done
by paying a fixed amount at every predetermined date. Systematic Investing in a Mutual
Fund is the answer to preventing the drawbacks of equity investment and still enjoying the
high returns.

Mutual Fund SIP is a monthly based investment plan through which an investor could
invest a fixed sum into mutual funds every month at pre-decided dates. This hedges the
investor from market instability and derives maximum benefit as the investment is done at
regular basis irrespective of market conditions. SIP is a feature especially designed for
investors who wish to invest small amounts on a regular basis to build wealth over a long
term.

1.1 OBJECTIVES OF THE PROJECT

Objectives always provide the route and direction to a study to achieve its ultimate goal.
The main objectives of this article are to understand the concept of Systematic
Investment Plan, as prevalent in the Mutual Fund Industry in India and to comparatively
analyze Systematic Investment Plans Vis a Vis other investment avenues.

Over a long term horizon, equity investments have given returns which far exceed those
from the debt based instruments. They are probably the only investment option, which
can build large wealth. In short term, equities exhibit very sharp volatilities, which many
of us find difficult to stomach. Investment in equities requires one to be in constant touch
with the market and a lot of research. Buying good securities require one to invest fairly
large amounts.

The Purpose of choosing the project is to know

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 - Investor option for entry into mutual fund
 LUMPSUM
 SIP
- Comparative analysis between Lump sum and SIP
- Investor delight when investment is through SIP
- Procedure for investment in SIP

1.2 PURPOSE OF THE PROJECT:

The purpose of the project is to gain knowledgeable insights on composition, pattern, risk
and return associated with the funds and SIP, to analyse and find which fund or scheme is
performing the best with respect to the market. Also, find out the reasons of deviation of
individual fund performance than that of the market benchmark performance. It also aims
at creating awareness, analysing data and comparison of SIP with lump sum investment.

1.3 SCOPE OF THE PROJECT:

It includes risk associated with the various mutual funds schemes and the SIP plans,
returns generated from those schemes and also the basic rationality behind the difference
between the market rate of return and rate of return. It will also help us to compare the
performance of mutual funds and SIP schemes and find out which yields better returns.

Systematic Investment Plan (SIP) is the best way to build up capital over a period of time
for those who don’t have lump sum amount to invest as the risk will be reduce in to
investing long term equity based mutual funds SIP. SIP plans will build up investors
gradually drop by drop. Here is equity funds best suited for the SIP Route. SIPs are the
best way to build up a good corpus. Different equity based mutual fund growth schemes
like large cap, Small & midcap, diversified equity, thematic infrastructure, ELSS and
sector funds etc will be suited for SIP.Equity based small and midcap funds offer the
maximum scope for capital appreciation. There is lot of scope for investors residing in
India.

1.4 RESEARCH TYPE:

Conclusive and explorative approach has been adopted in the project. As here the topic of
research problem has been explored so that hidden facts can come to into light and then
the max allocation criteria in SIP are known.

A comprehensive literature review has been carried out to evaluate the financial
performance of Mutual fund schemes on different parameters. To find Systematic
Investment Plan (SIP) is a regular investment plan enabling an investor to purchase units
of a mutual fund scheme. This strategy is primarily modelled with the underlying concept
of rupee-cost averaging. This unique strategy facilitates investors to restrict their unit
purchase in a rising market and expands them in a falling market. According to the article

9
 the disciplined mechanism like SIP helps long term investors to reap good returns over a
Period of time.”
Research focused on financial performance analysis of Mutual fund schemes of selected
banks. Performance through the statistical parameters (std. deviation, Beta and Alpha)
ratio analysis (sharp ratio, Treynor ratio and Jension ratio) recommended investors based
on past performance analysis. To evaluate the performance of different mutual fund
schemes on the basis of returns & comparison with their benchmark and also to appraise
the performance of different category of funds using risk adjusted measures as suggested
by Sharpe, Treynor and Jeanson.

1.5 RESERCH METHODOLOGY:

The methodology used is qualitative and quantitative in nature. It is more of an

exploratory research to get a deep insight of comparative analysis between lump sum and
SIP.
The methodology includes the overall research design, the sampling procedure and data
collection method. The methodology adopted by me for purpose of finding the
investment behaviour of investor is DIRECT SURVEY METHOD with the help of
questionnaire and secondary research by data analysis. The project starts with analysing
the data i.e. the recent NAV values of various SIP schemes and mutual fund schemes for
past five years. Then evaluation of performance of SIP with lump sum investment with
the help of analysing data Rupee Cost averaging and empirical method of Sharpe
measure.

2. A BRIEF OF MUTUAL FUNDS

2.1 Definition
Mutual funds are investment companies that pool money from investors at large and offer
to sell and buy back its shares on a continuous basis and use the capital thus raised to
invest in securities of different companies. The stocks these mutual funds have are very
fluid and are used for buying or redeeming and/or selling shares at a net asset value.
Mutual funds posses shares of several companies and receive dividends in lieu of them and
the earnings are distributed among the share holders.

Mutual funds can be either or both of open ended and closed ended investment companies
depending on their fund management pattern. An open-end fund offers to sell its shares
(units) continuously to investors either in retail or in bulk without a limit on the number as
opposed to a closed-end fund. Closed end funds have limited number of shares.Mutual
funds have diversified investments spread in calculated proportions amongst securities of
various economic sectors. Mutual funds get their earnings in two ways. First is the most

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 organic way, which is the dividend they get on the securities they hold. Second is by the
redemption of their shares by investors will be at a discount to the current NAVs (net asset
values). Basically,

1. Collect money from investors

2. Invest through well diversified portfolio according to investors‟ requirement
3. Earning as dividend, or assets appreciation
4. Redeem whenever investor want in open ended and at certain time in close ended

How Mutual fund works is shown below:

As in the figure, Money is pooled in by the fund managers of various Asset Management
companies and by investing in the security market; they generate returns which in return
goes to the Investors in the form of dividend and capital gains

2.2 STRUCTURE:

In the US, a mutual fund is registered with the Security Exchange Commission (SEC)
and is overseen by a board of directors (if organized as a corporation) or board of trustees
(if organized as a trust). The board is charged with ensuring that the fund is managed in
the best interests of the fund's investors and with hiring the fund manager and other
service providers to the fund.
The fund manager also known as the fund sponsor or fund management company, trades
(buys and sells) the fund's investments in accordance with the fund's investment
objective. A fund manager must be a registered investment advisor. Funds that are
managed by the same fund manager and that have the same brand name are known as a
"fund family" or "fund complex".

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 A mutual fund's investment portfolio is continuously monitored by the fund's portfolio
managers. In India the structure is as follows:

2.3 Classification of Mutual Funds:

There are 3 types of mutual funds: open-end, interval, and closed-end. The most common
type, the open-end fund, must be willing to buy back shares from investors every
business day. Exchange-traded funds (or "ETFs" for short) are open-end funds or unit
investment trusts that trade on an exchange. Open-end funds are most common, but
exchange-traded funds have been gaining in popularity.

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Mutual funds are generally classified by their principal investments. The four main
categories of funds are money market funds, bond or fixed income funds, stock or equity
funds and hybrid funds. . Funds may also be categorized as passively or actively
managed.

Different Types of Mutual Fund Schemes According to Maturity Period:

(a) Open-ended Fund / Scheme: An open ended scheme or a fund is one that is
available for subscription and repurchase on a continuous basis. These schemes
do not have a fixed maturity period and investors can continuously buy and sell
units at NAV related prices, which are declared on daily basis. Thus, the key
feature of an open-ended scheme is liquidity.

(b) Close-ended Fund / Scheme: A close-ended fund or scheme has a stipulated

maturity period e.g. 5-7 years. The fund is open for subscription only during a
specified period at the time of launch of the scheme. Investors can invest in the
scheme at the time of new fund issue and thereafter they can buy or sell the units
of the scheme on the stock exchanges where the units are listed. In order to
provide an exit route to the investors, some close-ended funds give an option of
selling back the units to the mutual fund through periodic repurchase at NAV
related prices. SEBI regulations stipulate that at least one of the two exit routes is

13
 provided to the investor i.e. either repurchase facility or through listing on the
stock exchanges. These mutual fund schemes generally disclose NAV on weekly
basis.

Schemes according to Investment Objectives:

A scheme can also be classified as growth scheme, income scheme or balanced scheme
considering its investment objective. Such schemes may be open-ended or close-ended schemes.
Such schemes may be classified mainly as follows:

(a) Growth / Equity Oriented Schemes:

The aim of growth funds is to provide capital appreciation over the medium to
long-term. Such schemes normally invest a major part of their corpus in equities.
Such funds have comparatively high risks. These schemes provide different
options to the investors like dividend option; capital appreciation etc. and the
investors may choose an option depending on their preference. Growth schemes
are good for investors having a long-term outlook seeking appreciation over a
period of time.

(b) Income / Debt Oriented Scheme:

The aim of income funds is to provide regular and steady income to investors.
Such schemes generally invest in fixed income securities such as bonds, corporate
debentures, government securities and money market instruments. Such funds are
less risky as compared to equity schemes. These funds are not affected because of
fluctuations in equity markets. However, opportunities of capital appreciation are
also limited in such funds. The NAVs of such funds are only affected because of
change in interest rates in the country. If the interest rates fall, NAVs of such
funds are likely to increase in the short run and vice versa. However, long-term
investors may not bother about these fluctuations.

(c) Balanced Fund:

The aim of balanced funds is to provide both growth and regular income as such
schemes invest both in equities and fixed income securities in the proportion
indicated in their offer documents. These are appropriate for investors looking for
moderate growth. The funds generally invest from 40:60 to 60:40 percent in
equity and debt instruments respectively. These funds are also affected because of
fluctuations in share prices in the stock markets. However, NAVs of such funds
are likely to be less volatile as compared to pure equity funds.

(d) Money Market or Liquid Fund:

These funds are also income funds and their aim is to provide easy liquidity,
preservation of capital and moderate income. These schemes invest exclusively in
safer short-term instruments such as treasury bills, certificates of deposits,
commercial paper and inter-bank call money, government securities etc. Returns
on these schemes fluctuate much less as compared to other schemes. These funds

14
 are appropriate for corporate and individual investors as a means to park their
surplus funds for short duration.

(e) Gilt Fund:

These funds invest exclusively in government securities. Government securities
have no default risk. (f) Index Funds. Index funds replicate the portfolio (of
scripts as well as proportion) of a particular index such as BSE Sensex, NSE Nifty
etc.

(f) Sector Specific Funds / Schemes:

These funds / schemes invest in the securities of a particular sector of industries
as specified in the offer documents; e.g. Pharmaceuticals, Software, Cement,
Banking etc. Returns are more but risk is also more.

(g) Tax saving Schemes:

These schemes offer tax rebates to the investors under specific provisions of the
Income Tax Act, 1961. Government offers tax incentives for investments in
specified avenues e.g. Equity Linked Saving Schemes (ELSS). These 4 schemes
are growth oriented and invest predominantly in equities. The returns and risks
associated are like any other equity-oriented scheme. Almost all mutual funds
charge about 2 – 2.5% more than NAV while purchasing the mutual funds by the
investors which is known as ‘Entry Load’

2.4 HISTORY OF MUTUAL FUNDS IN INDIA

The mutual fund industry is a lot like the film star of the finance business. Though it is
perhaps the smallest segment of the industry, it is also the most glamorous – in that it is a
young industry where there are changes in the rules of the game every day, and there are
constant shifts and upheavals. The mutual fund is structured around a fairly simple
concept, the mitigation of risk through the spreading of investments across multiple
entities, which is achieved by the pooling of a number of small investments into a large
bucket. Yet it has been the subject of perhaps the most elaborate and prolonged
regulatory effort in the history of the country. The mutual fund industry started in India in
a small way with the UTI Act creating what was effectively a small savings division
within the RBI. Over a period of 25 years this grew fairly successfully and gave investors
a good return, and therefore in 1989, as the next logical step, public sector banks and
financial institutions were allowed to float mutual funds and their success emboldened
the government to allow the private sector to foray into this area. The initial years of the
industry also saw the emerging years of the Indian equity market, when a number of
mistakes were made and hence the mutual fund schemes, which invested in lesser-known
stocks and at very high levels, became loss leaders for retail investors

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 First Phase – 1964-87

 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament.

 The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988
UTI had Rs. 6,700 crores of assets under management.

Second Phase – 1987-1993 (Entry of Public Sector Funds)

 1987 marked the entry of non- UTI, public sector mutual funds set up by public
sector banks and Life Insurance Corporation of India (LIC) and General Insurance
Corporation of India (GIC).
 SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987
followed by 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).
 At the end of 1993, the mutual fund industry had assets under management of Rs.
47,004 crores.

Third Phase – 1993-2003 (Entry of Private Sector Funds)

 With the entry of private sector funds in 1993, a new era started in the Indian
mutual fund industry, giving the Indian investors a wider choice of fund families.
 In 1993, the first Mutual Fund Regulations came into being, under which all
mutual funds, except UTI were to be registered and governed.
 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.With the increase in
the number of mutual fund houses many foreign mutual funds was found to be
setting up funds in India and also there were several mergers and acquisitions.
 At the end of January 2003, there were 33 mutual funds with total assets of Rs.
1,21,805 crores. The Unit Trust of India with Rs. 44,541 crores of assets under
management was way ahead of other mutual funds.

Fourth Phase – since February 2003

 In February 2003, following the repeal of the Unit Trust of India Act 1963, UTI
was bifurcated into two separate entities. The first one is the Specified Undertaking of
the Unit Trust of India with assets under management of Rs. 29,835 crores at the end
of January 2003, representing broadly, the assets of US 64 scheme, assured return.
The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations.
 With the bifurcation of the 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.
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  With recent mergers taking place among different private sector funds, the mutual
fund industry has entered its current phase of consolidation and growth. The
following graph indicates the growth of assets over the years

2.5 TERMINOLOGY OF MUTUAL FUNDS

Asset Management Company

An Asset Management Company (AMC) is a highly regulated organization that pools

money from investors and invests the same in a portfolio. They charge a small
management fee, which is normally 1.5 per cent of the total funds managed.

NAV

NAV or Net Asset Value of the fund is the cumulative market value of the assets of the
fund net of its liabilities. NAV per unit is simply the net value of assets divided by the
number of units outstanding. Buying and selling into funds is done on the basis of NAV-
related prices. NAV is calculated as follows:

Market value of the fund's investments + Receivables + Accrued Income- Liabilities-

Accrued Expenses

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 Number of Outstanding units

The NAV of a scheme has to be declared at least once a week. However many Mutual
Fund declare their NAV for their schemes on a daily basis. As per SEBI Regulations, the
NAV of a scheme shall be calculated and published at least in two daily newspapers at
intervals not exceeding one week. However, NAV of a close-ended scheme targeted to a
specific segment or any monthly income scheme (which is not mandatorily required to be
listed on a stock exchange) may be published at monthly or quarterly intervals.

Exit Load:

The non refundable fee paid to the Asset Management Company at the time of
redemption/Transfer of units between schemes of mutual funds is termed as exit load. It
is deducted from the NAV (selling price) at the time of such redemption/ transfer.

Redemption price:

Redemption price is the price received on selling units of open-ended scheme. If the fund
does not levy an exit load, the redemption price will be same as the NAV. The
redemption price will be lower than the NAV in case the fund levies an exit load.

Repurchasing price:

Repurchase price is the price at which a close-ended scheme repurchases its units.
Repurchase can either be at NAV or can have an exit load.

Switch:

Some Mutual Funds provide the investor with an option to shift his investment from one
scheme to another within that fund. For this option the fund may levy a switching fee.
Switching allows the Investor to alter the allocation of their investment among the
schemes in order to meet their changed investment needs, risk profiles or changing
circumstances during their lifetime.

Shut-Out Period:

After the closure of the Initial Offer Period, on an ongoing basis, the Trustee reserves a
right to declare Shut-Out period not exceeding 5 days at the end of each
month/quarter/half-year, as the case may be, for the investors opting for payment of
dividend under the respective Dividends Plans. The declaration of the Shut-Out period is
envisaged to facilitate the AMC/the Registrar to determine the Units of the unit holders
eligible for receipt of dividend under the various Dividend Options. Further, the Shut-Out
period will also help in expeditious processing and dispatch of dividend warrants. During
the Shut-Out period investors may make purchases into the Scheme but the Purchase
Price for subscription of units will be calculated using the NAV as at the end of the first
Business Day in the following month/quarter/half-year as the case may be, depending on

18
 the Dividend Plan chosen by the investor. Therefore, if investments are made during the
Shut -Out period, Units to the credit of the Unit holder's account will be created only on
the first Business Day of the following month/ quarter/half year, as the case may be,
depending on the dividend plan chosen by the investor. The Shut-Out period applies to
new investors in the Scheme as well as to Unit holders making additional purchases of
Units into an existing folio. The Trustee reserves the right to change the Shut-Out period
and prescribe new Shut- Out period, from time to time
.
The issuers of Mutual funds in India

Unit Trust of India was the first mutual fund which began operations in 1964. Other
issuers of Mutual funds are Public sector banks like SBI, Canara Bank, Bank of India,
Institutions like IDBI, ICICI, GIC, LIC, and Foreign Institutions like Alliance, Morgan
Stanley, Templeton and Private financial companies like Kothari Pioneer, DSP Merrill
Lynch, Sundaram, Kotak Mahindra, and Cholamandalam etc. there are many new
upcoming fund houses like Edelweiss, J.P. Morgan, Axis Bank.

2.6 TAX BENEFITS IN MUTUAL FUNDS

When we talk about a mutual fund for taxation purposes, we mean the legally constituted
trust that holds the investors‟ money. It is trust that earns and receives income from
investments it makes on behalf of the investors. Most countries do not impose any tax on
this entity – the trust – because the income it earns is meant for the investors. The trust is
considered to be only a pass-through vehicle. It would amount to double taxation if the
trust first pays a tax and then investor also is made to pay. Generally, the trust that is
exempted and the investor pay the taxes on his share of the income. After the 1999-2000
Budget, the investors are totally exempt from paying any tax on the dividend income they
receive from the mutual funds, while certain types of schemes pay some taxes. This
section explains what the fund or the trust pays by way of tax.

Tax Provision

Generally, income earned by mutual fund registered with SEBI is exempt from tax.
However, income distributed to unit-holders by a closed-end debt fund is liable to a dividend
distribution tax at a rate stipulated by the Government. This tax is not applicable to
distributions made by open-end equity-oriented funds.

Impact on the Fund and the Investor

It should be noted that although this tax is payable by the fund on its distributions and out of
its income, the investor are indirectly since the fund’s NAV, and therefore the value of his
investment will come down by the amount of tax paid by the fund. For example, if a closed-
end or debt fund declares a dividend distribution of Rs. 100, Rs. 10.20, if tax rate is 10.20%)
will be the tax in the hands of the fund. While the investor will get Rs. 100, the fund will
have Rs. 10.20 less to invest. The funds current cash flow will diminish by Rs. 10.20 paid as

19
 tax, and its impact will be reflected in the lower value of the fund’s NAV and hence
investor’s investment on a compounded basis in future periods.

Also, the tax bears no relationship to the investor’s tax bracket and is payable by the fund
even if the investor’s income does not exceed the taxable limit prescribed by the Income Tax
Act.

In fact, since the tax is on distributions, it makes income schemes less attractive in
comparison to growth schemes, because the objective of income schemes is to pay regular
dividends.

The fund cannot avoid the tax eve if the investor chooses to reinvest the distribution back
into the fund. For example, the fund will still pay Rs. 10.20 tax on the announced
distribution, even if the investor chooses to reinvest his dividends in the concerned scheme.

Tax benefits to the Investor

Dividends Received From Mutual Funds

 Income distributed by a fund is exempted in the hands of investors

 No TDS on any income distribution by mutual fund

Capital Gains on Sale of Units

However, if the investor sells his units and earns “Capital Gains”, the investor is subject
to the Capital Gains Tax as under:

If units are held for not more than 12 months, they will be treated as short term capital asset,
otherwise as long term capital asset.

 Tax law definition of Capital Gains = Sale consideration – (Cost of Acquisition + Cost of
Improvements + Cost of transfer)

 If the units were held for over one year, the investor gets the benefit of “Indexation”,
which means his purchase price is marked up by an inflation index, so his capital gains
amount is less than otherwise. Purchase Price of a long term capital asset after Indexation
is computed as, Cost of acquisition or improvement = actual cost of acquisition or
improvement * cost inflation index for year of transfer / cost inflation index for year of
acquisition or improvement or for 1981, whichever is less. Since, April 1, 2003, all
dividends, declared by debt-oriented mutual funds (i.e. mutual funds with less than 50%
of assets in equities), are tax-free in the hands of the investor. A dividend distribution tax
of 12.5% (including surcharge) is to be paid by the mutual fund on the dividends declared
by the fund. Long-term debt funds, government securities funds (G-sec/gilt funds),
monthly income plans (MIPs) are examples of debt-oriented funds. Dividends declared
by equity-oriented funds (i.e. mutual funds with more than 50% of assets in equities) are
tax-free in the hands of investor. There is also no dividend distribution tax applicable on
these funds under section 115R. Diversified equity funds, sector funds, balanced funds

20
 are examples of equity-oriented funds. Amount invested in tax-saving funds (ELSS)
would be eligible for deduction under Section 80C, however the aggregate amount
deductible under the said section cannot exceed Rs 100,000.
Section 2(42A):
Under Section 2(42A) of the Act, a unit of a mutual fund is treated as short-term capital
asset if the same is held for less than 12 months. The units held for more than twelve
months are treated as long-term capital asset.
Section 10(38):
Under Section 10(38) of the Act, long term capital gains arising from transfer of a unit of
mutual fund is exempt from tax if the said transaction is undertaken after October 1, 2004
and the securities transaction tax is paid to the appropriate authority. This makes long-
term capital gains on equity-oriented funds exempt from tax from assessment year 2005-
06. Short-term capital gains on equity-oriented funds are chargeable.

2.7 SELECTION OF BEST MUTUAL FUND

Choice of any scheme would depend to a large extent on the investor preferences. For an
investor willing to undertake risks, equity funds would be the most suitable as they offer
the maximum returns. Debt funds are suited for those investors who prefer regular income
and safety. Gilt funds are best suited for the medium to long-term investors who are averse
to risk. Balanced funds are ideal for medium- to long-term investors willing to take
moderate risks. Liquid funds are ideal for Corporate, institutional investors and business
houses who invest their funds for very short periods. Tax Saving Funds are ideal for those
investors who want to avail tax benefits. An important aspect while selecting a particular
scheme is the duration of the investment

‘DOs’ In Selecting the Best Mutual Fund

 Draw down your investment objective. There are various schemes suitable for different
needs. For example retirement plan, capital growth etc. Also get clear about your time
frame for investment and returns. Equity funds are not advisable for short term because
of their long term nature. You can consider money market and floating rate funds for
short term gains. This equals asking - What kind of mutual fund is right for me?

 Once you have decided on a plan or a couple of them, collect as much information as
possible on them from different sources offering them. Funds' prospectus and advisors
may help you in this.

 Pick out companies consistently performing above average. Mutual funds industry
indices are helpful in comparing different funds as well as different plans offered by
them. Some of the industry standard fund indices are Sensex, Nifty, BSE 500 etc. With
the latter rating the Socially Responsible Funds only. Also best mutual funds draw good
results despite market volatility. 4. Get a clear picture of fees & associated cost, taxes (for
non-tax free funds) for all your short listed funds and how they affect your returns. Best
mutual funds have lower cost out go.

21
  Best mutual funds maximize returns and minimize risks. A number called as Sharpe
Ratio explains whether a fund is risk free based on its expected returns compared against
a risk free money market fund. 6. Some funds have the advantage of low minimum initial
investments. You can start investing even with Rs. 1000 a month. This is advisable for
building asset bases over a long period with small regular investment

‘DON'Ts’ In Selecting Best Mutual Funds

Like there are pit falls in every investment sphere you must be careful about even while investing
in mutual funds. Here is a list of don'ts you must consider for selecting best performing mutual
funds

 Don't go by the past performance alone. For, an average of performance over a period
will not tell you whether the performance is growing or at least maintained in the recent
years.

 Don't go by hearsay about the reputations of a fund. There are various rating agencies
which index the mutual funds regularly based on multiple factors. It forms your first step
in finding the best performing mutual funds.

 Don't invest huge sums of money in a single fund or all the money in one go. Spread out
your investments rationally. For example: Index funds for high returns, bond funds for
lower risks, 401 (k) retirement plans and so on.

Risks involved in investing in Mutual Funds

Mutual Funds do not provide assured returns. Their returns are linked to their performance.
They invest in shares, debentures and deposits. All these investments involve an element of risk.
The unit value may vary depending upon the performance of the company and companies may
default in payment of interest/principal on their debentures/bonds/deposits. Besides this, the
government may come up with new regulation which may affect a particular industry or class of
industries. All these factors influence the performance of Mutual Funds.

3. SYSTEMATIC INVESTMENT PLAN

SIP is an investment option that is presently available only with mutual funds. The other
investment option comparable to SIPs is the recurring deposit schemes from Post office and
banks. Basically, under an SIP option an investor commits making a regular
(monthly/quarterly) investment in a particular mutual fund/deposit. Investor can now use
auto debit (ECS) facility from Banks to automatically debit SIP amount from your account.
There is no need to give bulk of cheques for SIP. For that you should have account in
nationalized banks. For SIP through ECS, you have to provide bank details like account no.,
branch name, MICR no. etc.

22
 SIP mainly helps us to get addicted to an investment principle –
Income-savings =Expenditure, instead of following the principle of:-
Income-Expenditure =Savings.

SIP also helps investor to overcome the problems of when to invest in the equity markets
irrespective of the state of the market. SIP takes away the decision making and converts it
into a mechanised one. The lowering of risk by entering at different time period however has
the disadvantage of averaging out returns.

Finally when considering a SIP investor should not that it does not assure a return and
continue investing without interruption as missing a few instalments could lead to
termination of SIP Since the time equity markets have been engulfed by volatility, the most
frequently heard advice is that best way to invest in equity is “invest via the systematic
investment plan routs for long term”.

3.1 CONCEPT OF SIP:

Just like banks and post office offers recurring deposit scheme mutual funds offer on SIP
option. The investor opting for a Sip option commit investing a pre-specified sum of money
at regular internal in a particular mutual fund scheme. Each periodic investment entitles
investors to receive units of that mutual fund scheme, which is subject to its NAV prevailing
at that time.

3.2 WORKING OF SIP:

Suppose A decides to invest in mutual fund through SIP with monthly investment of Rs
1000/- for a period of 12 months. Starting from Jan-2014 to Dec-2014 in a fund named
“XYZ”. The payment can be made through 12 post dated cheques of Rs 1000 or through
ECS facility.

Brief Summary:
Monthly Investment Rs. 1000/-
Total Investments in 12 months Rs.1000x12=Rs.12000/-
Total no of units credited to “A”=194.925 Nos
Avg cost /unit=Rs61.5621

Note: Entry & exit loads applicable to SIP. In this example, the Entry & exit loads have not
taken for purpose of simplification

Benefits to “A”:

 Convenience and affordability because of an easy payment method.

 Helps “A” to develop the habit of disciplined investing as she/he is compelled to fulfil
commitment of making a fixed payment every month.

23
  Rupees cost average benefit :
 “A” receives 194.925 units at an average cost of Rs.61.5621. However if “A” had
invested the whole Rs 12000/- at one go, he would have received different no of units as
following.
1st Jan-2014 – He would have received 259.24 units
1st Jul-2014 - He would have received 193.11 units
1st Dec-2014- He would have received 133.45 units
Since it is not so simple for anyone to perfectly time the market, it makes a more sensible
approach to invest through SIP. Thus SIP allows “A” to take benefit of all the highs and
lows of the market during 12 months period.
Flexibility to redeem units at any time or making a change in monthly investment
amount.

Here is the graphical presentation of the performance of HDFC Index Fund for the year 2014
given below:

3.3 FEATURES OF SIP

1. Affordable to small investors.

It is affordable to pay a small amount regularly than paying a large amount as a whole.
Moreover many Asset Management companies (From which you purchase mutual fund
share) charges very less to entry loads for SIP when compared to other one time
investments.

2. Low market risk through Rupees Cost Averaging.

24
 This is the best feature in this policy. The success in market depend upon pure timing
.Highest profit can be gained when you invest in right stocks at the right time i.e. when
markets are on a high. The problem here is we can not foresee this timing every time.
This problem can be eliminated through rupees cost averaging.

3. Compounding effect.

It means the early you invest, the better you gain. Let’s say planned for SIP for 10 years
investing Rs.1000/- monthly, you stopped after 10 years. Then your friends invested
same amount for 20 years. But due to compound effect, at the end of 20 years, you will
get higher outcome than your friend.

4. Easy Liquidity.

You can have the liberty to exit at any time even before the agreed time period. But
some exit load shall be charged.

5. Mode of payment.

 Through Electronic clearance service (ECS).Here mutual fund will debit certain
amount from your account as per your instruction.
 Post dated Cheque

3.4 BENEFIT OF SIP

 Investments are consistent and steady

 Power of compounding : More the length of investment, more the earning
 Power of rupees cost averaging : Market volatility shall work wonders for you
 It is an entirely mechanised process and involves no complication.
 It will not cause strain on ones budget due to small investment.

3.5 DISADVANTAGE OF SIP

No downside protection:
Investor should remember that despite of all the advantages that SIPs have, they are
subject to market risk and do not protect investor from making a loss or ensure them
profits in falling market.

Port folio risk remains:

SIPs are also subject to security risk. Mutual fund schemes investing in portfolios that
turns out to generate negative returns are bound to make investors incur a loss even if the
investment is made through SIPs.

Ideal profile of investors:

25
 Investors have a long term investment horizon, be willing to invest regularly, keep
patience.

3.6 Defining the investment objective:

Investor should invest with a clear objective in their mind. It helps figure out an
indicative time period for which the investments would have to be made.

Almost all mutual fund houses have started SIPs. Some fixed amount (generally in
multiples of Rs. 1,000 /-; however some mutual funds like Reliance Mutual Fund permit
5 multiples of Rs. 50 /- also) is invested every month from the investors’ bank account.
Some experts state that such investments have numerous advantage. Firstly it inculcates
habit of regular investments and secondly since units are allotted every month as per
NAV of that particular day, the fluctuations in the market do not affect much, and thus
these are most appropriate investment option for a common investor. However, I feel that
these statements amount to only half-truth. The reasons are explained in the succeeding
paragraphs. In a broad sense, ‘Bull Phase’ i.e. when share prices rise day by day and
‘Bear Phase’ i.e. when share prices fall day by day, are two phases in which the stock
market behaves. When any phase is going on, it may be possible that some time the
market is very volatile and it is not possible to know in which direction it is moving, it
may also be possible that the market is very stable for a few days with only minor
fluctuations. Let us see how all this affects the SIP.

NAV OF SIP UNITS (BULL PHASE)

16
14
12
10
8 NAV OF SIP UNITS (BULL
6 PHASE)

4
2
0
jan 5 2014 feb 5 2014 apr 5 2014 oct 5 2014 dec 5 2014

Here NAV value is taken into account without considering dividends because if dividends are
distributed, NAV will remain more or less the same.

26
Suppose, the investor had Rs. 12,000 /- available on 5th of January and he had invested the
complete amount, he would have got 1090.90 units instead of 962.21. If we take the mirror
image of the graph, it would indicate the bear phase.

NAV of mutual funds ( bear phase)

16

14

12

10

8
NAV of mutual funds bear
6 phase

0
jan 5 feb 5 apr 5 jun 5 oct 5 dec 5
2006 2006 2006 2006 2006 2006

3.7 SIP Calculator

This is a calculator used to calculate the returns on various schemes of SIP and help us
compare the performance of various mutual funds

Systematic investing of mutual funds is a answer to preventing the pitfalls of equity

investment and still enjoying the high returns.SIP calculator shows us that how small
investments at regular intervals can yield us better returns over long term period of time.

Returns of various schemes are calculated using this calculator online.

In the calculator we have to enter 5 details i.e.

1. Mutual fund type

2. Scheme type
3. Investment Amount
4. SIP Frequency
5. SIP Date: start and end date
Then finally calculate the returns of the SIP plans. The result of the calculation done
using the calculator can be found in the snapshot below

3.8 Rupee cost averaging

27
 Investing through SIP one can end up buying more units when price is low and fewer units
when price is high. However, over a period of time these market fluctuations of price are
generally averaged and average cost of investment is generally reduced. This is the
advantage we get in rupee cost averaging. Thus we find this in SIP.

3.9 POWER OF COMPOUNDING

This is the most important advantage which we get in SIP.

Suppose two persons invested in SIP plans. Preeti invested at age of 25 for 35 years Rs
10000, then stopped and Rohit started at 35 yrs and invested for 25 yrs the same amount.

If they have invested the same amount annually till 35 years they could have fetched
1.013 crores.

Then sir has asked me to choose certain types of investment plans of SIP and find out the
details like their features from the Offer Document of that scheme.

Here is the format of SIP calculator and even the output obtained after the calculation of
a prticular SIP Plan.

Then after going into the details of at least 5 plans, start comparing the calculated returns
obtained from SIP calculator of those plans, further analysis will be done regarding SIP plans
and their performance.

3.10 IMPORTANCE OF SIP:

SIP has played a significant role in individual portfolio due to its benefits. It gives
opportunities to small investors to invest their small amount and to take advantages of
financial market. These benefits are-

1. Ease: The process of investing in SIP is very easy. It can be operated by just
providing post dated cheques with the completed Electronic Clearing system (ECS)
instructions. The SIP facility is generally available in most of the mutual fund schemes;
the main schemes for SIP are like Fixed Income generating schemes, Child Fund
Schemes etc.

2. Portfolio Diversification: Portfolio diversification is the best way to reduce the risk.
In SIP, the Mutual Funds invest in various companies, across a broad cross-section of
industries and sectors, in line with the objectives of the scheme. This diversification
reduces the risk because hardly ever do all stocks decline at the same time and in the
same proportion. We achieve this diversification through a Mutual Fund with far less
money than one can do on his own.

28
 3. Professional Management: The next importance of SIP is that with the help of it the
investor avails the services of experienced and skilled professionals who are backed by a
dedicated investment research team. Who always lead to invest after the analyses of the
performance and prospects of companies and help to achieve the objectives of the
scheme.

4. Reduction of Risks: An investor holds a diversified portfolio when he makes some

investment in mutual funds. In adverse case of losses, the loss is shared by all the unit
holders of the fund. Thus, the risk is reduced as compared to direct market where in
adverse cases all the money is lost.

6. Advantage of compounding of money: SIP provides opportunities for investing early

and to keep investing regularly. These regular amounts of savings, (no matter however
small) may go for a long way in creating a considerable amount of wealth over a long-
term and help in achieving our ultimate goal of accumulating wealth through the
compounding interest rate or return.

3.11 Comparison of SIP with other investment avenues:

SIP is better in comparison to other investment avenues on the basis of annual income,
investment term, risk, tax benefits and liquidity. Investors prefer SIP because it helps to
minimize the cost and maximize the return in individual portfolio.

SIP has a lot of merit. At the same time the demerits of the scheme cannot be ignored. For
instance, when the market has a continuous rising trend, a security risk is involved. Investing in a
sector fund such as IT through SIP during boom-time would not give the investor much benefit,
since the number of units accumulated would keep decreasing. Secondly, in a falling market,
SIPs do not necessarily ensure profit but only protect the investor from losses.
4. RESEARCH BY DIRECT SURVEY METHOD

4.1 BACKGROUND OF SURVEY

This project is solely designed and constructed for knowing the Awareness of mutual fund -SIP
plan in the minds of people and their Preferences for SIP As Compared to other Investment
Avenues. To some extent it also covers the distribution channel for the selling and promotion of
Mutual Fund- SIP through Financial intermediates.
4.2 IMPORTANCE OF SURVEY
The importance of the study encompasses the various investment avenues available in our
country. It analyses various investment options on certain criteria and then compares all the
options with mutual funds. The basic idea of this project is to find out whether the people are
Aware about Mutual Fund as instrument of tax saving in the investment Avenue and better as
compared to other competitive investment Avenues.

29
 In order to determine customer needs and to implement marketing strategies and programs
organization aimed at satisfying those needs. As competition become more intense company
needs information on effectiveness of their marketing tools

Due to this study investors will get very good knowledge of mutual fund and they will find the
best way to invest their savings.

4.3 OBJECTIVES OF SURVEY

Primary Objective:

Investors preference about the Mutual Fund-SIP as Compared to other Investment Avenues
available in India at different age group and income level.

Secondary Objective

To infer whether mutual fund-SIP is better options or not as compared to other Investment
avenues

4.4 METHODOLOGY OF SURVEY

a) Research Design: Descriptive Design

b) Data Collection Method: Survey Method

c) Universe: Odisha (East and Central )

d) Sampling Method: Convenience sampling method

e) Sample Size: 90 respondents

f) Sampling Unit: Businessmen, Government Servant, Professional, Retired Individuals

g) Data Source: Primary data

h) Data Collection Instrument: Structured Questionnaire

4.5 DATA ANALYSIS AND INTERPRETATION

a) Name -Total no of respondents =90
b) Age-Age Group between 22 years to 65 Years
c) Your Educational qualification?

EDUCATIONAL QUALIFICATION
Graph-C
30
 3 8
8 Matriculation
28
Intermidiate
Bachelor Degree
33 Master Degree
Other

We observe that 36.7% of all respondents are having Bachelor Degree, 31.1% of all
respondents are having Master Degree, and 8.9 % each of all respondents are having
Matriculation & Intermediate education.

Graph-E

70

60

50

40

30 Series1
20

10

0
Rs 1 Rs 2 Rs 3 Rs 4 Rs 5 Above Rs
lakh- 2 lakhs-3 lakhs-4 lakhs-5 lakhs-6 6 lakhs
lakhs lakhs lakhs lakhs lakhs

Table-E

Rs 1 lakh- 2 lakhs 2 2.20%

Rs 2 lakhs-3 lakhs 6 6.70%
Rs 3 lakhs-4 lakhs 6 6.70%
Rs 4 lakhs-5 lakhs 3 3.30%
Rs 5 lakhs-6 lakhs 4 4.40%
Above Rs 6 lakhs 65 72.20%

31
It is observe that 72.2% of total respondents fall under income group of 6lakhs and
above.
F. Do you save monthly?

MONTHLY SAVING

Graph-F

Yes
No

84

Table-F

Yes 84 93.30%
No 3 3.30%

It is observed that 93.3% of all the respondents save monthly and only 3.3% do not save
month.

32
 H. Where do you invest often?

INVESTMENT OPTION

Graph-I

Bank fixed deposit

Post office schemes

9
28
Gold, silver or other
30 precious metals
5 Real estate
2 11

Mutual fund

Shares/bonds/debentures

Table-I

Bank fixed deposit 28 31.10%

Post office schemes 5 5.60%
Gold, silver or other precious 11 12.20%
metals
Real estate 2 2.20%
Mutual fund 30 33.30%
Shares/bonds/debentures 9 10%

It is observed that 33.3% of all respondents invest in mutual fund for high return which is
highest and 31.1% invest in bank fixed deposit for risk free return.

33
 I. Why do you invest mutual funds?

OBJECTIVE OF INVESTMENT IN MUTUAL FUND

Graph-J

35
30
25
20
15
Series1
10
5
0
Less risk and Tax Both tax Other
high returns exemptions exemptions
and better
returns

Table-J

Less risk and high returns 25 27.80%

Tax exemptions 8 8.90%
Both tax exemptions and 31 34.40%
better returns
Other 0 0%

It is observed that 34.4% invest in mutual fund for tax exemptions and better returns. It is
also observed that 27.8 % invest in mutual fund for high return.

34
 J. How did you know about investment in mutual funds?

INVESTMENT AWARENESS IN MUTUAL FUND

Graph-K

11
27
Advertisement
21 TV/Radio/Website
Family members

4 Friends and relatives

19
Financial advisors

Table-K

Advertisement 11 12.20%
TV/Radio/Website 21 23.30%
Family members 4 4.40%
Friends and relatives 19 21.10%
Financial advisors 27 30%

35
We observed that 30% of all respondents get information through financial advisors and
23.3% of respondents get information through media and web site.

K. Which schemes of Mutual funds do you prefer based on maturity?

SCHEME OF MUTUAL FUND

Graph-L

50
45
40
35
30
Series1
25
20
15
10
5
0
Open ended close ended

Table-L

Open ended 48 53.30%

close ended 35 38.90%

It is observed that 53.3% of all respondents prefer open ended scheme for long term
investment for high.

36
 M. Which is the following funds do you prefer?

PREFERENCE OF FUND TO INVEST

Graph-M

70

60

50

40
Series1
30

20

10

0
Equity/growth Debt/income Hybrid

Table-M

Equity/growth 64 71.10%
Debt/income 11 12.20%
Hybrid 10 11.10%

We observed that 71.1% of all respondents prefer for equity /growth fund for investment
for high return.

37
N. Do you invest in SIP?

INVESTMENT IN SIP
Graph-N

21

Yes
No
66

Table-N

Yes 66 73.30%
No 21 23.30%

It is observed that 73.3% all respondents invest in SIP for low risk , good return and
regular investment.

38
O. What type of scheme do you prefer in equity fund (SIP)?

SIP SCHEME PREFERENCE

Graph-O

0
1 11
19 Advantage fund
MID cap
Equity plan
MNC Fund
1 33
Index fund
Dividend yield plus

Table-O

Advantage fund 1 1.10%

MID cap 11 12.20%
Equity plan 33 36.70%
MNC Fund 1 1.10%
Index fund 19 21.10%
Dividend yield plus 0 0%

39
We observed that 36.7% of all respondents invest in equity plan for the purpose of high
return.

P. What type of schemes do you prefer in hybrid funds?

HYBRID FUND PREFERENCE

Graph-P

10
7
MIP I
MIP II
49 Balanced funds

Table-P

MIP I 10 11.10%
MIP II 7 7.80%
Balanced funds 49 54.40%

We observed that 54.4% of all respondents invest in balanced fund for the purpose of risk
diversification.

40
Q. Which brand of mutual funds do you prefer?

BRAND OF MUTUAL FUND

Graph-Q

35

30

25

20
Series1
15

10

0
ICICI Birla HDFC SBI Other
Prudential sunlife

Table-Q

ICICI Prudential 24 26.70%

Birla sunlife 10 11.10%
HDFC 13 14.40%
SBI 33 36.70%
Other 0 0%

41
It is observed that 36.7% of all respondents invest in SBI mutual fund and 26.7% of all
respondents invest in ICICI prudential because of good brand , good performance and
better awareness and good service.

R. Why do you prefer a particular brand of mutual fund?

REASON FOR BRAND PREFERENCE

Graph-R

50
45
40
35
30
25
20
15
10 Series1
5
0

Table-R

Performance 23 25.60%
Diversification 5 5.60%
Investment 49 54.40%

42
 strategy
Fund Manager 10 11.10%

We observed that 54.4% of all respondents prefer to invest for investment strategy and
25.6% of all respondents prefer to invest for better performance.

S. What is the level of your satisfaction with mutual fund investment?

SATISFACTION LEVEL WITH MUTUAL FUND INVESTMENT

Graph-S

60

50

40

30 Series1

20

10

0
Not fair Average Good Very Good Excellent

Table-S

43
 Not fair 0 0%
Average 5 5.60%
Good 56 62.20%
Very Good 25 27.80%
Excellent 1 1.10%

We observed that 62.2% of all respondents have good level of satisfaction with mutual
fund investment.

T. Where can you lodge your complaint against a mutual fund?

AWARENESS TO LODGE COMPLAIN AGAINST A MUTUAL FUND

Graph-T

70

60

50

40
Series1
30

20

10

0
RBI SEBI IRDA FMC

44
 Table-T

RBI 9 10%
SEBI 70 77.80%
IRDA 9 10%
FMC 0 0%

It observed that 77.8% of all respondents are aware of SEBI as the dispute settlement
authority and receive complaint.

4.6 LIMITATIONS OF THE SURVEY

Sample size was limited to 90 because of limited time and thus unable to represent the whole
population.
The research is limited to Odisha (east & central) only, if the same research would have been
carried in another area, the results could vary.
Sometimes the respondents because of there business didn’t able to concentrate while filling up
the questions.
My own inexperience and limited approach might have affect the research study

4.7 RESULTS AND FINDINGS

We observe that 33.3% of all the respondents invest in mutual fund. We have got 31.1% of our
total respondents who invest in bank fixed deposit any mutual fund at all.

We observe that 30% of all the respondents have complete information of mutual fund through
their financial advisor and 23.3% of all the respondents get information of mutual funds through
TV, Radio and website.

We observe that 43.3%% of all the respondents are interested in getting good deduction from tax
as well as getting good return.

We observe that 71.1% of all the respondents prefer to invest in Equity / growth fund for getting
good return, 12.2% invest in debt fund and 11.1 % invest in hybrid fund.
We have observe that most of the investors prefer to save in SBI mutual fund and ICICI
prudential.

45
We observe that 73.3 % of all respondents invest in SIP for systematic planned saving for less
risk and good return. We observe that 36.7% of SIP investor invest in Equity planned for the
purpose of high return.

We observe that 62.2% of the all respondents have good level of satisfaction with mutual fund
investment and 27.8% have very good level of satisfaction with mutual fund investment.

5. PRINCIPLE OF RCA & GRAPHICALY ANALYSIS

Rupee Cost Averaging: A Principle that Governs SIP

Systematic Investment Plan (SIP enables an investor to regularly invest in a fund in the same
way as one invests in a recurring deposit scheme of a bank. In a SIP, investors buy units of the
mutual funds by contributing a fixed (and often small) amount of money at regular intervals. In
the SIP, investors do not have to worry about market timing. In other words, the issue of
determining the best time to invest does not arise. Basically, SIP is governed by the principle of
Rupee Cost Averaging (RCA).

5.1 Analysis:
RCA is a strategy that helps to avoid the perennial concern about the right time to invest. “To
buy low and sell high” is every investor’s ambition. However, one cannot predict the future with
any degree of accuracy. So, the best way to avoid the nagging regrets of missing out the best
time to buy or sell is to rely on RCA which takes the guess work out of timing the markets.

5.2 Interpretation:

Assume that Rs.1000 is invested monthly for a period of six months in the units of a certain SIP.
Table 1 shows the declining prices of the units of the scheme from January through June i.e.
from the level of Rs.32 to a level of Rs.11 in a falling market that enable an investor to get an
increased number of units on his investment from month to month till June.

Table 1 also shows that at the end of six months if the plan of investing Rs.1000 every month is
followed, on total investment of Rs.6000 the investor gets 331 units of a scheme at a Weighted
Average Price (WAP) of Rs.18.12 per unit. On the other hand, if one worries about when to
invest such entire Rs.6000 into the scheme at one time knowing that the market is falling but
never knowing when it is likely to be flatten out, one is likely to invest this sum at the Simple
Average Price (SAP) of Rs.20.17 per unit. In this way, one would be able to purchase an average
of only 298 units. Clearly, RCA works out to be a better strategy.

Similarly, using the same SIP, one can consider a situation where the market is rising as shown
in Table 2. Here the prices are reversed and increase from a low of Rs.11 to a high of Rs.32 by
June.

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5.3 Findings:
The two tables show that in following the SIP of investing Rs.1000 every month, one has 331
units of the scheme at a WAP of Rs.18.12 per unit. However, in case one invests the entire
Rs.6000 in one go on a random date, the expected price will be Rs.20,17 and one will have only
298 units on an average. Thus, the RCA system is a winner.

That is why the RCA principle is also called the no-brainer strategy. Incidentally, it should be
noted that SIPs normally do not charge an entry load. However, AMCs often do charge an exit
load if an SIP investor redeems the units prematurely. The offer document indicates the lock-in
period during which exit load is applicable.

6. SECONDARY RESERACH & DATA ANALYSIS

6.3 LONG TERM PERFORMANCE OF EQUITY BASED MUTUAL

FUNDS (SYSTEMATIC INVESTMENT PLAN)
Most of domestic savings go in to bank deposits, post office deposits & provident fund etc. Small
investors are still not aware that inflation eats into a chunk of their saving & they need
instruments that give healthy inflation adjusted returns. Very few investors are doing proper
planning & determining investment objectives at right time investing systematically in the right
avenues but the most of investors are not investing their money with proper financial planning.
Mutual fund is one of the options for investors to invest their money into equity based mutual
fund schemes. The most of mutual fund houses of objectives is to seek long term capital
appreciation by investing in a portfolio that is substantial investment in equity & equity related
securities of large cap, mid & small cap, diversified equity, thematic infrastructure, tax saving
funds, etc.

Mutual fund companies save the interest of the investors by taking care of their investment with
good returns. The fund manager has the flexibility to choose the investment portfolio, within the
parameter of the investment objectives of the scheme. In the long run, equity market is a good
place of the economy but in short run, markets can get fluctuating &volatile in nature which
leads fear.

BRIEF OF THE STUDY

1. To evaluating and comparative analysis of the long term performances of selected equity
based mutual funds SIP. (Large cap, Small & Mid cap, Diversified Equity, Thematic
Infrastructure, ELSS and Sector funds)

2. To identify the investment in equity based mutual fund Systematic investment plans (SIP)
that can gain momentum and increase percentage of income.

3. To find out what way is the risk minimized in long term performance of Equity based
mutual fund (SIP).

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 6.4 COMPARISION AND ANALYSIS OF DATA
The most of information collected the factsheet of different mutual fund houses by using
various websites like www.valueresearchonline.com, www.moneycontrol.com,
www.mutualfundindia.com, etc. and also from the various publications of government of India,
RBI, SEBI, AMFI and also from relevant reports, periodicals, and newspapers are collected and
analyzed.

6.4.1 COMPARING AND EVALUATE LONG TERM PERFORMANCE OF

MUTUAL FUNDS WITHIN THE VARIOUS EQUITY BASED CATEGORIES
REPRESENT

Literature suggests that the different equity based mutual fund schemes seem to have the
following potential risks.
1. Diversified equity funds have multiple sectors. Even if a few sectors poorly perform, other better
performing sectors can make up. Diversified equity funds are less risky than sector funds.
2. Thematic funds are variation of sector funds. Here the investment as per thematic infrastructure
fund, there is multiple sectors, like power, transportation, cement, steel, contracting in real estate
are connected to infrastructure.
3. Mid-cap funds which are less liquidity and less researched in the market than the large cap fund.
Thus the liquidity risk is more in such portfolio. As they are not strong as the frontline stocks,
they become riskier during volatile market.
4. Sector fund suffers from concentration risk; the entire investment is in a single sector. If the
sector performs poorly, then the scheme returns are seriously affected.

The following tools are available for performance evaluation & comparative analysis of different
equity based mutual fund schemes.

• Fluctuation in returns is used as measure of risk. The fluctuation in returns can be assessed
in relation to itself or in relation with benchmark. So the following measures are commonly used.

• Standard Deviation: To measure the fluctuation in periodic returns of a scheme to its own
average return. Mutual funds with low standard deviation are considered as less volatile than one
with high standard deviation.
• Beta: measures the fluctuation in periodic returns in the scheme, as compared to fluctuation in
periodic return of a diversified stock index over the same period. The diversified stock index has
beta 1. Schemes, whose beta is more than 1, are seen as more volatile than the market. Or less
than 1 is considered as less volatile than the market.
• Sharpe ratio: an investor invests with government, and earns a risk free return. T- Bill index is
a good measure of this risk free return. Through investment in scheme, a risk is taken, and return
earned. The difference between two returns is risk premium. Sharpe ratio uses standard deviation
as a measure of risk. So higher the Sharpe ratio better the scheme is considered or vice versa.
• Jensen Alpha: if the fund produces expected return at the level of risk assumed. The fund
would have Alpha equal to zero. A positive Alpha indicates that the fund manager produced

48
return greater than expected for the risk taken. It defines the difference between actual portfolio
return and estimated bench mark return.
• Benchmark: benchmark is considered for comparison with schemes return. In this study used
different benchmark for different category benchmark use for large cap

6.5 EQUITY BASED MUTUAL FUNDS CATEGORY

1. LARGE CAP EQUITY MUTUAL FUND: This study selected ten schemes which are
operating from last five years for the period 2010 to 2015 on basis of top returns and
benchmark returns. Use as benchmark in this category Viz. CNX Nifty, S&P BSE100,
and S&P BSE200.

Table – (a) Equity Large-Cap Mutual Fund Schemes based on the Annual Compounded Returns
of 5 years & Rest Data is avg. of 5 Years.

Large cap schemes Return % Mean Standard Sharpe Beta Alpha

deviation
ICICI Pru Focused 17.77 20.95 15.28 0.93 0.9 5.58
Blue chip Equity IO
ICICI Pru Focused 16.48 20.09 15.26 0.87 0.9 4.73
Blue chip Equity(G)
UTI Equity Fund (G) 15.94 21.30 15.7 0.92 0.92 5.78
Birla Sun life Top 15.80 22.5 17.51 0.9 1.01 5.94
100(G)
UTI Opportunities 15.70 19.49 14.82 0.86 0.85 4.61
Fund(G)
L&T Equity Fund (G) 15.10 18.69 16.64 0.71 0.97 2.54
ICICI Pru Top 100 15.10 21.79 16.54 0.91 0.95 5.95
Funds (G)
Reliance Equity 15.51 15.57 0.85 0.93 6.79
Opportunities
CNX Nifty 10.73 16.85 16.85 0.6
Category 11.62 16.92 16.03 0.63 0.91 1.21
S and P BSE 100 10.32 16.78 17.54 0.54
Category 14.20 25.7 20.62 0.96 1.05 8.75
S & P BSE 200 10.29 16.65 17.70 0.55
Category 13.41 19.49 16.58 0.75 0.94 3.58

Data: www.valueresearchonline.com, www.moneycontrol.com

As per table ( a ) , it clear that the annual compounded returns value range from 17.77% to 15.10
%. The highest returns of returns of the ICICI Pru focused Bluechip equity growth is 17.77% and
followed by ICICI Pru focused (G) & UTI Equity fund (G) respectively returns are 16.48% and
15.94%. Table clear that the schemes are outperformed which is more than benchmark &

49
category returns. The standard deviation of all the schemes ranges from is less than the
benchmark index and category standard deviation it means all the schemes are less volatile.

Beta is the coefficient of mutual funds volatility. All the schemes of beta range from 1.01 to 0.85
which is less than one except Birla sun life top 100, however all schemes are less risky. Schemes
Sharpe ratio ranges from 0.93 to 0.71 which is higher than the category and benchmark so all the
schemes has a reward that the risk standard of its peers. All schemes Alpha ranges from 6.79 to
2.54 are positive &outperformed well. As per the comparison of all the above schemes it clear
that all schemes returns are up to mark. Investor can invest their money into higher schemes like
ICICI Pru focused Bluechip equity

(G) followed by ICICI Pru focused (G) & UTI Equity fund (G) of large cap equity based mutual
fund where risk is low .

2. SMALL & MID CAP EQUITY MUTUAL FUND: For this study selected ten schemes
which are operating in the market from last five years for the period 2010 to 2015 on
basis of top returns and benchmark returns. Use as benchmark in this category Viz.
CNX midcap, S&P BSE small cap.

Table – (b) Equity Small & Midcap Mutual Fund Schemes based on the Annual Compounded
Returns of 5 Years & rest Data is avg. of 5 year
Small and midcap Return Mean Std. dev Sharpe Beta Alpha
schemes (%pa)
DSP-BR Micro Cap Fund 26.22 29.21 21.43 1.03 1.07 12.10
- RP (G)
Can Robeco Emerg- 25.76 30.92 21.91 1.0 1.06 13.84
Equities (G)
Religare Invesco Mid N 25.12 27.91 19.41 1.09 1.02 11.34
SmallCap (G)
HDFC MidCap 23.60 27.27 18.54 1.02 0.94 11.14
Opportunities (G)
Franklin (I) Smaller Cos 23.20 33.63 19.26 1.37 1.01 17.14
(G)
BNP Paribas Mid Cap 23.10 28.8 18.5 1.15 1.01 12.53
Fund (G)
ICICI Pru Value 23.10 29.91 19.10 1.21 1.00 13.60
Discovery Fund (G)
Birla Sun Life MNC 22.80 25.4 17.52 1.05 0.83 10.59
Fund (G)
UTI Mid Cap (G) 22.40 30.27 20.89 1.10 1.01 13.47
S & P BSE small cap 8.56 15.29 25.5 0.33
Category 18.82 25.75 20.61 0.91 1.05 8.85
CNX Midcap 11.35 16.64 23.15 0.41
Category
Data: www.valueresearchonline.com, www.moneycontrol.com,

50
As per table (b) it clear that the annual compounded returns value range from 26.22% to 22.40
%. The highest returns of the DSP-BR micro cap fund (G) are 26.22% and Can Robeco Emerg.
Equity (G) & Religare Invesco mid and small cap (G) respectively returns are 25.76% and
25.12%. Table clear that the schemes are outperformed which is more than benchmark &
category returns. The standard deviation of all the schemes ranges are less than the benchmark
index and category standard deviation it means all the schemes are less volatile. Beta is the
coefficient of mutual funds volatility. All the schemes of beta range from 1.07 to 0.83 which is
more than one, however all schemes are slightly high risky. Schemes Sharpe ratio ranges from
1.37 to 1.02 which is higher than the category and benchmark so all the schemes has a reward
that the risk standard of its peers. All schemes Alpha ranges from 17.14 to 10.59 are positive
&outperformed well. As per the comparison of all the above schemes it clear that all schemes
returns are up to mark. Investor can invest their money into higher returns schemes like DSP-BR
micro cap fund (G), Can Robeco Emerg. Equity (G) & Religare Invesco mid and small cap (G)
small &midcap equity based mutual fund where risk is slightly high .

3. DIVERSIFIED EQUITY MUTUAL FUND: This study selected 10 schemes which are
operating from last five years for the period 2010 to 2015 on basis of top returns and
benchmark returns. Use as benchmark in this category Viz. CNX 500 and CNX Service
sector.
Table-(c) Diversified Equity Mutual Fund Schemes based on the Annual Compounded Returns
of 5 years & Rest Data is avg. of 5 Years

Diversified Equity Schemes Return (%pa) Mean Std. Sharpe Beta Alpha
Dev
UTI MNC Fund (G) 22.64 24.31 15.79 1.09 0.71 10.14
ICICI Pru Exp&Other 21.82 31.54 17.04 1.42 0.59 18.78
Services-RP (G)
Reliance Equity Oppor - RP 21.56 24.6 18.17 0.94 0.97 8.5
(G)
Birla SL India GenNext (G) 19.70 22.61 16.25 0.95 0.83 7.48
Franklin High Growth Cos 18.80 28.0 18.25 1.16 1.02 11.44
(G)
ICICI Pru Dynamic Plan - 17.70 21.15 15.43 0.92 0.85 6.23
Inst.
BNP Paribas Dividend Yield 17.00 20.8 15,22 0.91 0.82 6.11
(G)
Franklin India Prima Plus (G) 16.62 20.95 15.62 0.87 0.89 5.60
CNX 500 10.40 16.85 18.25 0.54
Category 11.50 20.31 18.74 0.73 1.01 3.70
CNX Service sector 12.01 17.54 17.59 0.60
CNX MNC 14.25 20.32 17.78 0.76
CNX 200 10.20 16.80 18.13 0.54
Category 12.20 20.32 18.74 0.74 1.02 2.70
CNX NIFTY 10.73 16.93 16.93 0.59
Data: www.valueresearchonline.com, www.moneycontrol.com,

51
As per table (c) it clear that the annual compounded returns value range from 22.64% to 16.62
%. The highest returns of returns of the UTI MNC fund growth is 22.64% and followed by ICICI
Pru Export & other services (G) & Reliance equity opportunity (G) respectively returns are
21.82% and 21.56%. Table clear that the schemes are outperformed which is more than
benchmark & category returns. The standard deviation of all the schemes ranges from is less than
the benchmark index and category standard deviation it means all the schemes are less volatile.

Beta is the coefficient of mutual funds volatility. All the schemes of beta range from 1.02 to 0.59
which is less than one except Franklin high growth cos. (G), however all schemes are less risky.
Schemes Sharpe ratio ranges from 1.42 to 0.87 which is higher than the category and benchmark
so all the schemes has a reward that the risk standard of its peers. All schemes Alpha ranges from
18.78 to 5.60 are positive & outperformed well. As per the comparison of all the above schemes
it clear that all schemes returns are up to mark. Investor can invest their money into higher
schemes like UTI MNC fund (G), ICICI Pru Export & other services(G) and Reliance Equity
opportunity regular (G) of Diversified equity based mutual fund where risk is low .

4. THEMATIC INFRASTRUCTURE EQUITY MUTUAL FUND: This study selected

9 schemes which are operating from last five years for the period 2010 to 2015 on basis
of top returns and benchmark returns. Use as benchmark in this category Viz.CNX Infra.,
S&P BSE Oil & gas.

Beta is the coefficient of mutual funds volatility. All the schemes of beta range from 1.73 to 1.01
which is more than one,however all schemes are high risky. Schemes Sharpe ratio ranges from
1.12 to 0.23 which is higher than the category and benchmark so all the schemes has a reward
that the risk standard of its peers. All schemes Alpha ranges from 12.20 to -5.23 are negative &
underperformed except Franklin Build India fund (G). As per the comparison of all the above
schemes it clears that all schemes returns are not up to mark. Investor can invest their money into
higher scheme Franklin Build India fund (G) of thematic infrastructure large cap equity based
mutual fund where risk is low .

5. ELSS TAX SAVING EQUITY MUTUAL FUND: This study selected ten schemes
which are operating from last five years for the period 2010 to 2015 on basis of top
returns and benchmark returns.

As per the comparison of all the above schemes it clear that all schemes returns are up to mark.
Investor can invest their money into higher schemes like the Reliance TaxSaver (G), ICICI Pru
Tax (G) & Religare Invesco Tax plan (G) of Tax saver equity based mutual fund where risk is
low.

6. EQUITY SECTOR MUTUAL FUND: This study selected ten schemes which are
operating from last five years for the period 2010 to 2015 on basis of top returns and
benchmark returns. Use as benchmark in this category Viz. CNX FMCG, B &S BSE
FMCG

52
Schemes Sharpe ratio ranges from 1.28 to 0.89 which is higher than the category and benchmark
so all the schemes has a reward that the risk standard of its peers. All schemes Alpha ranges from
20.31 to -2.64 are positive &outperformed well except UTI Pharma & Healthcare. As per the
comparison of all the above schemes it clear that all schemes returns are up to mark. Investor can
invest their money into higher schemes UTI Transport & logistic fund (G), SBI FMCG Fund &
SBI Pharma.

7. SYSTEMATIC INVESTMENT PLAN (SIP) ; performance evaluation of SIP plan through

collected data from returns calculator www.moneycontrol.com, the data taken for last five year
information related to NAV of various schemes from various category of Equity Based mutual
fund from 2010 to 2015

6.6 OBSERVATION AND FINDINGS

 Long term returns of large cap equity growth fund schemes are comparatively less than small
& mid cap, Tax Saving fund schemes & equity sector fund schemes. But this schemes risk is
low as compare to small & mid cap, equity sector fund schemes.
 Investors those who don’t want to take big risk they can invest their money into large cap
equity schemes like ICICI Prufocused Bluechip equity (G) followed by ICICI Pru focused
(G) & UTI Equity fund (G) .
 This research shows that long term return of midcap & small cap funds, some schemes are
giving high returns as compared to other equity based mutual fund.
 Investor can invest their money into higher returns schemes like DSP-BR micro cap fund
(G), Can Robeco Emerg. Equity (G) & Religare Invesco mid and small cap (G) small &
midcap equity based mutual fund where risk is slightly high.
 The investors those who can afford high risk investment may have the result of equity sector
fund & small & midcap fund which have high potential return on mutual funds.
 The highest-return funds are Equity Sector fund schemes; investor can invest their money
into UTI Transport & logistic fund (G), SBI FMCG Fund & SBI Pharma.
 The investor who cannot offered lump sum amount of investment they can start their long
term investment in Equity based Mutual fund schemes through SIP and get a good amount of
returns

7. PERFORMANCE EVALUATION OF SIP BY SHARPE MEASURE

Here in this paper HDFC mutual fund return has been compared with the HDFC SIP
return for the period May-2012 to April-2015 .For this purpose we have used annual returns
based on NAV (Net asset Value ) while annual yields on 364day Treasury bill as risk free return.
The investment performance has been analysed in terms of Sharpe measure. The decision can be
taken by comparing risk and return from each mode of investment SIP or One-Time investment.
Sharpe ratio is considered better as it considers the total risk.

53
8. FINAL CONCLUSION AND RECOMMENDATIONS

(a) Many of people do not have invested in mutual fund due to lack of awareness although they
have money to invest.
(b) There is a need to build awareness of mutual fund as well as the new funds among the
investors with constantly being in contact with them.

(c) As the awareness and income will grow, the number of mutual fund investors will also
increase.

(d) Some of investors have asked for periodical market report about stock market so that they
can get the knowledge properly.

(e) Also the main purpose of investment for most of the respondents is tax saving and growth.

(f) The mutual funds company should advertise their tax saving plan more so that they can gain
more customers

(g) The AMC’s should go for increasing more awareness about different facilities of investment
in SIP& Mutual fund among investors according to the need of investors.

(h) The equity based mutual fund (SIP) schemes have lot of potential to give high returns but
investors should be aware about the Schemes those are really operating & giving high
returns.

(i) The investors prefer to go for investment with less risky in nature, some of the investors treat
mutual funds risky but as per analysis mutual funds (SIP) always give good returns if
investment is for long time period

(j) The company should target for more and more young investors as well as for persons having
good amount to invest. They should try to highlight the benefits of SIP such as rupee cost averaging,
power of compounding, etc.

(k) Using Sharpe measure performance of top 10 mutual funds of various types (growth, equity,
diversified, etc) has been analyzed and even some of the top performing schemes of various
companies has been selected and comparative analysis has been done between lump sum & SIP
investment. From this SIP was found to be winner. This can be clearly seen in tables
(a),(b),(c),(d),(e),(f) & (g).

(l) Further, as per Sharpe measure, the performance evaluation of SIP Plans against one time
investment, using HDFC funds SIP plans and one time investment plan as the sample and
annual returns, indicates that the return from the SIP is much better than the return from one
time investment mode. In order to get better results from SIP these plans should be held for a
long period of time. These things have been clearly proved in the table A and graphically
presented in Graph A.

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 (m)Investors have options to invest by way of SIP or to invest by lump sum amount. Small
investors can invest through Systematic Investment Plan by way to build high capital to
reduce investment as risk in Equity based Mutual fund Schemes.

(n) However, in this project after analysing in various ways it is found that performance of SIP is
much better than lump sum investment and must be preferred by all the investors and from
the survey it was found that already most of the investors prefer

9. REFERENCES:
1. Times Internet Limited 2015. The Economic Times. [online] Available
from:http:economictimes.indiatimes.com

2. PANDEY, IM, 2011. FINANCIAL Management 10th edition. New Delhi: Vikas publishing
House Pvt Ltd.

3. Business Standard News: http:/www-standard.com/article/pf/benefits-of-equity-system...

4. InvestingAnswers,Inc. 2015. Prospectus.[online] Available from:

htt://www.investinganswers.com/financial-dictionary/mutual-fundsetfs/prospectus-929

5. Garima Gupta and Prabhjot Kaur 2008) in their article “Wealth Accumulation through
SIP” published in Portfolio Organizer.

6. Sharpe (1966) mutual fund performance journal of business.

7. International Journal of Computing and Business Research.

10. WEB LINKS

1. www.moneycontrol.com

2. www.hdfcfund.com

3. www.wikipedia.org

4. www.hdfcsec.com

5. www.bseindia.com

6. www.investing.com

7. www.onemint.com

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