CONTENT

Chapter No Name of the concept Page no

I. Introduction 4

Statement of the problem 5

Need of the study 6

Overview 8

Objectives of the study 9

How do mutual funds work? 10

Scope of the study 11

Methodology of the study 12

Limitations of the study 12

II. Financial and statistical tools for measurement 13

III. Review of literature

IV. Industry profile

V. Company profile

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 VI. Data analysis and interpretation

VII. Findings, suggestions and conclusion

VIII. Bibliography

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 A STUDY ON DIFFERENT TYPES OF MUTUAL FUNDS

UTI, MUTUAL FUNDS, INDUSTRY STUDY

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 Chapter 1

1.1 -Introduction of mutual fund

It is a trust that collects money from a number of investors who share a common investment
objective and invests the same in equities, bonds, money market instruments and/or other
SECURITIES.A mutual fund is an investment vehicle that pools money from several investors to
invest in a mix of assets like stocks, bonds, government securities, and even gold. Mutual funds allow
investors to achieve portfolio diversification and professional management, with returns and risks
based on the performance of the fund’s investments.
The funds are managed by financial experts called FUND MANAGER. It allows individual investors
to gain exposure to a professionally-managed portfolio and potentially benefit from economies of
scale, while spreading risk across multiple investments.

 Mutual funds charge annual fees, expense ratios, or commissions, which lower
their overall returns.
 Mutual funds give individual investors access to diversified, professionally
managed portfolios.
 A mutual fund may combine different investment styles and company sizes.
 The gains (or losses) on the investment are shared collectively by the investors in
proportion to their contribution to the fund.

The project creates an awareness that the mutual fund is worthy investment practice. The
various schemes of mutual funds provide the investor with a wide range of investment
options according to his risk-bearing capacities and interest. Besides, they also give a
handy return to the investor. The project analyses various schemes of mutual fund by
taking different mutual fund schemes from
different AMC

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 1.2- STATEMENT OF THE PROBLEM

Mutual funds are the avenues for common investors to reap the benefit of share market
performance. Investing directly by an investors are fraught with highest level of risk &
uncertainty. Retail investors do not actively participate in share market. Therefore there
is a necessity to create awareness of the utility of investing in mutual funds schemes to
enjoy a return.
The present study aims to answer a few questions in this respect. What is the
performance of mutual funds in context to their risk and return incurred during the study
period? Whether the mutual funds have outperformed to the market or not. What is the
position of the mutual fund performance among the different schemes? Which type of
mutual funds are performing well and which are below the expectation level? What are
the basic motives for investing in mutual fund in India? What is the impact of regulatory
norms on the mutual funds’ performance?
These are some questions which the present study attempts to answer

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 1.3- NEED OF THE STUDY

The study basically made to educate the investors about Mutual Funds. Analyze the various
schemes to highlight the risk and return of diversity of investment that mutual funds offer. Thus,
through the study one would understand how a common man could fruitfully convert a pittance
into great penny by wisely investing into the right scheme according to his risk- taking abilities.

A small investor is the one who is able to correctly plan & decide in which profitable safe
instrument to invest. To lock up one’s hard earn money in a savings bank’s account is not
enough to counter the monster of inflation. Using simple concepts of diversification, power of
compound interest, stable returns limited exposure to equity investment, one can maximize his
returns on investments & multiply one’s saving.

Investment is a serious proposition one has to look into various factors before deciding on the
instruments in which to invest. To save is not enough. One must invest wisely get maximum
returns. One must plan investment in such a way that his investment objectives are satisfied. A
sound investment is one which gives the investor reasonable returns with a proper profitable
management. This report gives the details about various investment objectives desired by an
investor, details about the concept and working of mutual fund.

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 WHY YOU SHOULD INVEST IN THE MUTUAL FUNDS?

One of the primary benefits is diversification, which reduces the risk of loss by spreading
investment across a wide range of assets. Mutual funds also provide professional management,
allowing you to
leverage the expertise of fund managers who make investment decisions based on their research
and analysis.

As investment goals vary from person to person – post-retirement expenses, money for
children’s education or marriage, house purchase, etc. – the investment products required to
achieve these goals too vary. Mutual funds provide certain distinct advantages over investing in
individual securities. Mutual funds offer multiple choices for investment across equity shares,

corporate bonds, government securities, and money market instruments, providing an excellent
avenue for retail investors to participate and benefit from the uptrends in capital markets. The
main advantages are that you can invest in a variety of securities for a relatively low cost and
leave the investment decisions to a professional manager .

DIVERSIFICATION PROFESSIONAL MANAGEMENT

CONVENIENCE TRANSPARENCY
EASY INVESTMENT GOOD RETURNS

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 1.4 - OVERVIEW

The mutual funds 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 phases.
1st phase = 1964-1987
2nd phase =1987-1993
3rd phase =1993-2003
4th phase=2003

UTI AMC is one of the largest asset managers in the country with a total Asset Under Management of
INR 15.56 lakh crore and the investment manager to UTI Mutual Fund schemes, managing Quarterly
Average AUM of INR 2.39 lakh crore as of March 31, 2023 with more than 12.2 million live folios as of
March 31, 2023.
The company also manages the portfolios of domestic and offshore funds; and offers discretionary,
non-discretionary and advisory services to high-net-worth clients, corporates, and institutions; and
also offers retirement solutions and private equity funds in India and 35+ countries through the
principal and subsidiary business entities.

It has a nationwide network comprising 190+ UTI Financial Centres and more than 210 District
Associates as of September 2023. Our history and track record in the mutual fund industry, strong
brand recognition, distribution reach, performance and client relationships provide a platform for
future growth.

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 1.5 - OBJECTIVES OF THE STUDY

 To understand the concept of Mutual Funds.

 To study the different Sectoral Mutual Funds in India.
 To analyze the performance of different sectoral mutual funds.
 To identify the best Sectoral Mutual Funds to invest India.
 To suggest the best mutual funds for investor.
 Capital growth :- Growing the initial investment over time.
 Income generation:- Providing a steady income through investments in fixed-income
instruments
 Risk reduction: Spreading investments across different asset classes to reduce risk
 Liquidity: Allowing investors to buy or redeem units at any time
 Tax benefits: Providing tax deductions under certain circumstances
 Wealth creation: Providing access to diversified portfolios to grow wealth over time
 Professional management: Having professional fund managers make investment decisions
based on the fund

1. Wealth Creation:

One of the primary objectives of mutual funds is to help investors grow their wealth over time. By investing in
a diversified portfolio of securities, mutual funds aim to generate returns that outpace inflation and provide
long-term capital appreciation.

2.Risk Diversification:

Mutual funds pool money from many investors and invest in a variety of securities across different sectors and
asset classes. This diversification helps spread risk and reduce the impact of market volatility on investors’
portfolios.

3. Liquidity:

Mutual funds offer liquidity to investors, allowing them to buy or sell units on any business day at the
prevailing Net Asset Value (NAV). This liquidity feature makes mutual funds more accessible and convenient
compared to direct investments in individual stocks or bonds.

4. Professional Management:

Mutual funds are managed by professional fund managers who have expertise in analyzing financial markets
and selecting suitable investment opportunities. These managers aim to maximize returns while managing risk
according to the fund’s investment objectives

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 1.6 - HOW DO MUTUAL FUNDS WORK?

A mutual fund pools money from multiple investors to invest in a diversified portfolio of assets, such
as stocks, bonds, or other securities
 Pooling Money: Investors buy shares or units of the mutual fund, contributing their money
to the fund. This collective pool of money is managed by professional fund managers.
 Investment Strategy: The fund manager uses the pooled money to buy a variety of assets
according to the fund’s investment objectives and strategy. For example, a stock fund might
invest in a range of companies, while a bond fund might invest in various government or
Value Changes: As the prices of the assets within the fund fluctuate, the NAV also changes. If
the investments perform well, the NAV goes up; if they perform poorly, the NAV goes down.
 Value Changes: As the prices of the assets within the fund fluctuate, the NAV also changes. If
the investments perform well, the NAV goes up; if they perform poorly, the NAV goes down.
 Fees: Mutual funds charge fees for managing the investments. These fees can include
management fees, administrative costs, and sometimes exit load. It’s important to
understand these fees as they can affect your overall returns
 Buying and Selling: Investors can buy or redeem (sell) their mutual fund shares at the NAV
price at the end of each trading day. This means the value you receive when you sell your
shares is based on the NAV at that day’s market close.

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 1.7 - SCOPE OF THE STUDY

The scope has grown enormously over the years. In the first age of mutual funds, when the
investment management companies started to offer mutual funds, choices were few. Even though
people invested their money in mutual funds as these funds offered them diversified investment
option for the first time. By investing in these funds they were able to diversify their investment in
common stocks, preferred stocks, bonds and other financial securities. At the same time they also
enjoyed the advantage of liquidity. With Mutual Funds, they got the scope of easy access to their

invested funds on requirement.

But, in todays world, Scope of Mutual Funds has become so wide, that people sometimes take
long time to decide the mutual fund type, they are going to invest in. Several Investment
Management Companies have emerged over the years who offer various types of Mutual
Funds, each type carrying unique characteristics and different beneficial features.
The scope of mutual funds encompasses a wide range of investment options and strategies
that can be used for asset allocation, risk management, long-term growth, and professional
management. Mutual funds provide investors with access to a diverse range of investments,
such as stocks, bonds, and cash, allowing them to diversify their portfolios and reduce risk.
They offer liquidity, tax-efficiency, and low minimum investment options, making them
accessible to investors of all levels. Additionally, mutual funds are cost-efficient, providing
investors with access to a diverse range of investments at a lower cost than they would have
to pay to purchase the securities individually.

Mutual funds fall into three categories:

 Equity funds are made up of investments of only common stock. These can be riskier (and
earn more money) than other types
 Fixed-income funds are made up of government and corporate securities that provide a fixed
return and are usually low risk.
 Balanced funds combine both stocks and bonds in the investment pool and offer a moderate
to low risk. While low risk may sound good, it is also accompanied by lower rates of return-
meaning you risk less, but your investment won’t earn as much. You have to decide how
much risk you’re willing to take on before you invest your money.

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 1.8 - METHODOLOGY OF THE STUDY

One of the most important use of research methodology is that it helps in identifying the
problem, collecting and analyzing the required information and providing an alternative
solution to the problem. It also helps in collecting the vital information that is required by the
top management to assist them for the better decision making both day to day decisions and
critical ones.

The process used to collect information and data for the purpose of making business
decisions. The methodology may include publication research, interviews, surveys and other
research techniques, and could include both present and historical information.

1.9 - LIMITATIONS

 Lack of information sources for the analysis part.

 Time, cost and location factors become major difficulties in completion of research.
 The data provided by the prospects may not be 100% correct as they too have their
limitations.
 Lack of accessibility to mutual fund companies to collect primary data.
 Lack of accessibility to primary data.

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 FINANCIAL AND STATISTICAL TOOLS FOR MEASUREMENT

In this research I have used the following techniques to study the performance of Mutual Funds
which are as under:

AVERAGE

Average means numbers or names, arrays or references that contained numbers. Other words average
means number representations of numbers.

STANDARD DEVIATION

Standard deviation is a measure of total risk, defined as the sum of systematic and non-systematic
risk. One may define it as the dispersion of outcomes around the mean, which is the average return
for a sample of data. Accordingly, it is a measure of central tendency. The greater an investment's
standard deviation, the greater is its risk Standard deviation provides investors with a mathematical
basis for their investment decisions. Standard deviation is a measure of variability or diversity that
shows how much variation there is from the mean. The standard deviation of a data set is the square
root of its variance.

BETA

A relative measure of the sensitivity return on security is to change in the broad market index return.
Beta measure the systematic risk, it shows how prices of securities respond to the market forces. Beta
is calculated by relating the return on a security with return for the market. Market will have 1.0, if
the beta is greater than 1 than the stock is said to be very riskier than market risk, beta less than 1
than the stock is said to be not that much riskier as compare to the market risk beta involved market
risk, and market risk involved political risk, inflation risk, and interest rate risk.

SHARPE-RATIO

A Sharpe ratio indicates the risk premium of portfolio relative to the total amount of risk in
the portfolio. Sharpe ratio summarizes. The risk and return of a portfolio in a single measure thatcate
gories the performance of funds on the risk adjusted basis. The larger the Sharpe ratio, the portfolio is
over performing the market and vice versa.

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