final sania

A Project ReportOn

Competitive portfolio

analysis of different

mutual funds

AtSundaram BNP Paribas

AMC Ltd.

SUBMITTED BY: SUBMITTED TO:

Sania walia Dr.Sumninder Kaur Bawa MBA (fyic) 9th sem Roll No-472543

Department of Commerce and Business Management

Guru Nanak Dev University, Amritsar

ACKNOWLEDGEMENT

Gratitude is the hardest emotion to express and often one does not find

adequate words to convey that how one feels. But no work is complete till

you pay your gratitude to those who helped you in completing your work. It

gives me tremendous pleasure in acknowledging the valuable assistance

extended to me by various personalities in successful completion of this

project.

I take this opportunity to express my profound sense of gratitude and

respect to all those who helped me throughout the duration of this project.

I would especially like to thank, Mr. Rakesh kumar(manager) at

Sundaram BNP Paribas AMC Ltd for giving me the opportunity to

complete my project in this esteemed organization.

.I would like to thank the Finance department for giving me this

opportunity to work on this project. Their guidance and help led to the

successful completion of my project.

Sania walia

MBA (Fyic) 9th sem

Guru Nanak Dev University

Amritsar.

Index

1. Company profile

2. Theoretical background

3. Schemes of sundaram mutual funds

4. Risk factors

5. Competitive analysis

6. SWOT analysis

7. Findings and recommendations

8. Conclusion

9. Limitations

10. References

Company

Profile

SUNDARAM FINANCE LTD

Sundaram Finance has grown over the past decades on the foundations of

dedicated customer service, fair business practices, efficient, safe and trusted

financial policies.

STRONG VALUES

Faith. Depositor Confidence. Institutional Trust. Investor Steadfastness.

Employee loyalty. These five pillars support the strong edifice of Sundaram

Finance. An edifice built in 1954, when Shri T.S.Santhanam envisioned the future

of Hire-purchase Finance in India. Sundaram Finance was promoted by Madras

Motor Insurance Company, a part of the reputed TVS Group.

A visionary ahead of his times, Shri Santhanam identified the opportunities that

arose as a fledgling nation embarked on the path of development, anticipating

the important role the finance industry would play in the emerging market

scenario in the country. It was his foresight and entrepreneurial instincts, which

laid the foundations of Sundaram Finance. Foundations that would ensure a

secure future.

IN RECOGNITION OF SERVICE TO INVESTORS

A Certificate of honour was given by the Chartered Financial Analyst of the

Institute of Chartered Financial Analyst, in recognition of the Company's efforts to

set a trail blazing record of investor rewards , fostering the equity cult on ethical

lines among the top hundred investor rewarding companies in India for the period

1990-95.

1954- Birth of Sundaram Finance

1972-First finance company to be listed on the Madras Stock Exchange.

1981-Started Leasing operations.Formation of Lakshmi General Finance

1994-Receivables crossed Rs. 1000 crore (Rs. 10 billion)

1995- Deposits crossed Rs. 500 crore (Rs. 5 billion)

1996- Formed Sundaram Newton Asset Management Company Ltd. in

collaboration with Newton Management Ltd., UK.

1996- Received Best Tax Payer Award

1997-Received Best Tax Payer Award

1997-Receivables crossed Rs. 2000 crore (RS. 20 billion)

1998- Promoted Fiat Sundaram Auto Finance Limited, a joint venture with

Fidis S.p.A., Italy

1999- Promoted Sundaram Home Finance Limited with equity

participation from International Finance Corporation (IFC), Washington,

and FMO Netherlands

2000- Promoted Royal Sundaram Alliance Insurance Company Limited, a

joint venture with Royal & Sun Alliance Plc, for Non-Life Insurance Awards

AWARDS RECEIVED BY SUNDARAM

“Second Best Tax Payer” in the category of Private Sector Company for

Assessment Year 1994-95 in Tamil Nadu Region, from the Income Tax

Department, Tamil Nadu.

“Best Tax Payer” in the category of Private Sector Company for

Assessment Year 1995-96 in Tamil Nadu Region, from the Income Tax

Department, Tamil Nadu.

“Pioneering Service Award” to Shri T S Santhanam Chairman, from

Chennai Good Transport Association.

“Sarige Ratna Award” to Shri T S Santhanam, Chairman, from the

Bangalore City Lorry Transporting Agents’ Association (Regd).

“Most Valued Customer Award” to Shri T S Santhanam Chairman, from

the State Bank of India.

“The Best Financier of the New Millennium 2000” to Shri. G K Raman,

Managing Director, from the All India Motor Transport Congress.

Sundaram BNP PAM- Joint Venture

We have a joint venture with BNP PAM this year

Give us an access to global resource and global markets

Enable us to manage /advice FII customers including BNP’s

Designing new products especially structured products

Better management of risk control function.

BNP Paribas – A Global Player

Europe’s leading financial institution

Largest bank by markt cap in euro zone

Second largest European bank in terms of net profits

BNP PAM – Asset management arm has around 300bn AUM

Present in 12 geographic locations.

Sundaram BNP Paribas Asset Management

Company Ltd

ABOUT THE COMPANY

SUNDARAM Mutual which currently has assets under management of Rs. 5,164

Crs*, believes in helping investors reach their financial goals by delivering

consistent performance through sensible investment practices.

The sponsor of the fund is SUNDARAM Finance, one of India’s leading financial

services companies, with an asset base of over Rs.2,500 Crores, a deposit base

over Rs.700 Crores and over 460,000 customers.

The investment manager for the fund is SUNDARAM Asset Management

Company, a fully-owned subsidiary of SUNDARAM Finance. The AMC was

started in 1996 as a joint venture between SUNDARAM Finance (61%) and

Newton Investment Management (39%). Subsequent to the acquisition of

Newton by US-based Mellon Financial Corporation, SUNDARAM Finance, in

2002, acquired the 39% stake of Newton in the AMC.

Vision

To be a significant player in the Indian asset management space and be one of

the top ten asset managers

Mission

To provide people the best experience in accessing financial markets

Philosophy

o To take the least cost and most effective solution

o Never ever take short-cuts

o Admit and share mistakes - internally

o Take necessary steps to avoid repetition of work

o Respect others, their needs, religion and sentiments

o Be on time always

o Communicate freely and maintain confidentiality

o Develop and maintain trust

o Work as a coherent team

Sundaram Mutual has assets under management to the tune of USD 425.19

million helps investors to reach their financial goals by delivering consistent

performance through judicious investment practices

Theoretical

Background

MUTUAL FUNDS

CONCEPT

A Mutual Fund is a trust that pools the savings of a number of investors who

share a common financial goal. The money thus collected is then invested in

capital market instruments such as shares, debentures and other securities. The

income earned through these investments and the capital appreciation realised

are shared by its unit holders in proportion to the number of units owned by them.

Thus a Mutual Fund is the most suitable investment for the common man as it

offers an opportunity to invest in a diversified, professionally managed basket of

securities at a relatively low cost. The flow chart below describes broadly the

working of a mutual fund:

Mutual Fund Operation Flow Chart

ORGANISATION OF A MUTUAL FUND

There are many entities involved and the diagram below illustrates the

organizational set up of a mutual fund:

Organization of a Mutual Fund:

ADVANTAGES OF MUTUAL FUNDS

The advantages of investing in a Mutual Fund are:

Professional Management

Diversification

Convenient Administration

Return Potential

Low Costs

Liquidity

Transparency

Flexibility

Choice of schemes

Tax benefits

Well regulated

TYPES OF MUTUAL FUND SCHEMES

Wide variety of Mutual Fund Schemes exist to cater to the needs such as

financial position, risk tolerance and return expectations etc. The table below

gives an overview into the existing types of schemes in the Industry.

Schemes of

Sundaram

Mutual Funds

RANGE OF PRODUCTS OFFERED BY SUNDARAM MUTUAL:

1. EQUITY:

Sundaram Growth Fund

Sundaram Tax Saver OE

Sundaram Select Midcap

Sundaram Select Focus

Sundaram India Leadership Fund

Sundaram S.M.I.L.E Fund

Sundaram CAPEX Opportunities Fund

2. DEBT:

Sundaram Bond Saver

Sundaram Income Plus

Sundaram Select Debt

Sundaram Money Fund

Sundaram Floating Rate Fund

Sundaram Gilt Fund

Sundaram Value Plus

3. HYBRID:

Sundaram Balanced Fund

Sundaram Monthly Income Plan

Equity Schemes

1. Sundaram growth fund

For those who prefer 'consistent' out-performance over the long term.

If you happen to be someone who believes that your investment should meet

your financial targets in a sure-footed manner over the long term, Sundaram

Growth Fund would suit you best. Sundaram Growth Fund invests in equity

(stocks and shares) of companies in a careful manner, to ensure that your

investments are diversified, thereby protecting them from sharp fluctuations in

the stock market, while trying to ensure that it outperforms the stock market

consistently over the long term.

Out-performance by Sundaram Growth Fund

Ever since its inception, Sundaram Growth Fund has consistently out-performed

its benchmark, the BSE 200. The following table highlights how the process-

driven policies and investment practices of Sundaram Mutual have consistently

delivered better returns

Annual Returns

Period Sundram Growth Fund BSE 200

Last 5 Years 13.61% 6.84%

Last 3 Years 39.74% 30.11%

Last 2 Years 66.89% 55.43%

Last 1 Year 27.43% 18.27%

Source: Value Research Fund Performance Report, March 31, 2005 Past

performance may or may not be sustained in the future

FUND SYNOPSIS

Fund Name: Sundaram Growth Fund

Fund Type: Open-ended Equity Fund

Fund Objective: To achieve capital appreciation by investing in a well

diversified basket of equities and equity-related instruments.

Income generation would be the secondary consideration.

Minimum investment:

Rs.2, 000/- only

Investment Options: • Growth

• Dividend - Dividend payout

- Dividend reinvestment

2. Sundaram Tax Saver

The budget has brought about a change in the tax saving scenario. All

instruments that offered tax benefits under Section 88. Under section 88 earlier,

15% of a maximum investment of Rs. 10,000 (i.e. Rs.1, 500) could be deducted

from tax payable for investors with income between Rs.1.5 - Rs.5 lacs. No

benefits were available for investors with incomes greater than Rs.5 lacs.

With Section 80C, people can now invest up to Rs.1 lac in one or more of the

above instruments and deduct this from taxable income. This provides a tax

saving of Rs. 30, 000/- per annum at the highest tax slab (30% of Rs. 1, 00,000

invested) regardless of the income bracket of the taxpayer.

Given this background, we present Sundaram Tax Saver, one of the top

performing funds in its category.

PERFORMANCE

Annual Returns (in %)

STS BSE 200

Since Inception 19.78

Last 5 years 15.98 6.84

Last 3 years 44.78 30.11

Last 2 years 76.67 55.43

Last 1 year 63.14 18.27

Source: Value Research Fund Performance Report (March 31, 2005). Past

performance may or may not be sustained in the future.

Fund Synopsis:

Fund Name: Sundaram Tax Saver

Fund Type: Open Ended Equity Linked Savings Scheme.

Fund objective: To achieve capital appreciation by investing in a well

diversified basket of equities and equity related

instruments.

Asset Allocation: upto 100% in equities, upto 20% in debt and 20% in

money market instruments

Investment

Options:

Subject to 3 year lock-in

(I) Growth,

(II) Dividend - (a) Dividend Payout

(b) Dividend Re- investment

Minimum Investment: Rs.500

3. Sundaram Select Midcap

Scheme Type Open ended Equity Scheme

Scheme Objective To primarily achieve capital appreciation by investing in

diversified stocks that are generally termed as

'midcaps'.

Asset Allocation 75-100% Equity instruments (Including ADRs and GDRs)

0-25% Equity Futures & Options including those of indices

0-25% Cash, cash equivalents, money market instruments.

Investment options

1. Growth

2. Dividend (Payout & Re-investment)

For whom Sundaram Select Midcap invests in midcap stocks that have the

potential to become leaders of tomorrow. It is ideal for investors willing to take a

little risk for relatively higher than market gains.

Minimum investment: Rs.5000

4. Sundaram select focus


Scheme Objective

To achieve capital appreciation by investing in very few

select stocks

Asset Allocation 75-100% Equity instruments (Including ADRs and GDRs)

0-25% Equity Futures & Options including those of indices

0-25% Cash, cash equivalents, money market instruments

Investment options

1. Growth


For whom Sundaram Select Focus is a concentrated equity fund that invests

in a maximum of around 30 stocks. It is for investors looking for rapid capital

appreciation with risk levels moderated by predominant investments in

fundamentally strong large caps.


5. Sundaram India Leadership Fund


Scheme Objective To achieve capital appreciation by investing in select stocks

of companies which meet criteria of 'Leaders' in their

respective sectors/sub sectors. The leaders

are identified as the top two/three companies in any

sector/sub sector in terms of net revenue or total income.

Asset Allocation 65-100% Leadership stocks

0-35% Stocks of conglomerates and potential leaders

0-25% Equity Futures and Options

0-15% Money Market

Investment options 1. Growth


For whom Sundaram India Leadership Fund invests in companies that

are leaders in their sectors/ sub sectors. Investments in this

fund will allow give the investor the advantage of

higher returns during economic upswings and reduce

the downside risk when the market corrects.


6. S.M.I.L.E Fund

SUNDARAM Small and Medium Indian Leading Equities Fund

Issue Opens : Jan 3, 2005

Sundaram S.M.I.L.E. Fund is an open ended equity fund that invests

predominantly in Small and Mid cap stocks. With a smaller allocation to large cap

stocks, this fund is also rooted in stability and liquidity

Fund Synopsis:

Fund Type: Open ended equity fund

Fund objective: To achieve capital appreciation by investing mainly in small

and mid-cap stocks in a diversified manner ‘Small and Mid-caps’ are defined as

any stock whose market capitalization is equal or lower than the market

capitalization of the largest market capitalization stock in CNX Midcap 200 index.

Investment Options

Growth,

Dividend payout, dividend re-investment

Facilities

Systematic Investment Plan

Systematic Withdrawal Plan

Systematic Transfer Plan All the above facilities entail a minimum

value of Rs.250 only (On ongoing basis only, when the fund reopens

for continuous sale and repurchase)

Minimum investment Rs.5, 000/-

7. Sundaram capex fund

India is booming. More money is being spent on garments, TVs, phones,

personal computers, cars, houses … As a result, companies across a wide

spectrum of industries are announcing capacity expansion plans.

It's a wonderful time for Capital Goods companies - the biggest beneficiaries of

this boom. They supply the capital goods and services to hungry industries and

quietly reap the benefits from capital expenditure (CAPEX) incurred to expand

capacities! And they benefit right away!

Here's your opportunity to take advantage of India's massive capital expenditure

(CAPEX) in capacity expansion. Invest in Sundaram CAPEX Opportunities Fund

and earn rich rewards while the whole of India splurges

Fund synopsis

Fund name: Sundaram CAPEX Opportunities Fund

Fund Type: Open-ended equity Fund.

Fund Objective:

To generate consistent long-term returns by investing

predominantly in equity/equity related instruments of

companies in the capital goods sector.

Asset Allocation:

Equity & equity related instruments of companies in the capital

goodssector (including investments in ADR's and GDR's): 70% - 100%

Other equities (including investments in ADR's and GDR's): 0% - 30%

Money market instruments: 0% - 15%

Benchmark: BSE Capital Goods Index

Options / Plans:

Growth

Dividend - (i) Payout (ii) Reinvestment


Risk Factor

Mutual Funds and all Securities Investments are subject to market risks and

there is no assurance or guarantee that the Fund's objectives will be

acheived. As with any investment in stocks and shares, the NAV of the

units issued under the schemes can go up or down depending upon the

factors and forces affecting the Capital market. Past performance of the

Sponsor / Mutual fund does not guarantee the future performance of the

schemes of the Mutual Fund. The names of the schemes do not, in any

manner, indicate either the quality of the schemes, their future prospects or

their returns. The NAV of the schemes may be affected by settlement

periods and transfer procedures.Trading volumes may restrict the liquidity

of the scheme's investments. Investors in the schemes are not being

offered any guaranteed returns. The Sponsor is not responsible for any loss

resulting from the operations of the schemes beyond the contribution of

Rs.1 lakh made by it towards setting up the Sundaram Mutual Fund. Please

refer to the offer document before investing.

Competitive

Analysis

Category-1: Equity - mid cap

Comparison table 1

Fund name Launch date Rating

Franklin India prima Nov 1993 5 stars

Kotak mid cap Jan 2005 Not rated

Sundaram select-mid cap July 2002 5 stars

Reliance growth Oct 1995 5 stars

Source: Morningstar rating agency.comComparison table 2

Fund name Risk grade Return grade

Franklin India Prima Average high

Kotak Mid Cap Not rated Not rated

Sundaram Select Mid Cap Low high

Reliance growth Low high

0=NOT RATED1= LOW2=AVERAGE3=HIGH

Source: http://www.valueresearch.com

Comparison table 3

Minimum investment is- 5000Source: http://www.valueresearch.com

Fund name Expense ratio

Min.initial investment

Franklin India Prima 1.90 5000

Kotak Mid Cap 2.30 5000

Sundaram Select Mid Cap 2.31 5000

Reliance Growth 1.96 5000

http://www.valueresearch.com/


Category -2: Equity tax planning Comparison table: 1

Fund name Launch date rating

Franklin India index tax Feb 2001 2 stars

Kotak tax saver Oct 2005 Not rated

Sundaram tax saver Nov 1999 3 stars

Reliance tax saver Aug 2005 Not rated

Source: Morningstar rating agency.com


Franklin India index tax Avg Low

Kotak tax saver Not Rated Not rated

Sundaram taxsaver Avg High

Reliance tax saver Not rated Not rated

Comparison table 2

1 = LOW2 = AVERAGE3 = HIGH



Comparison table 3


Category-3: Equity diversified

Comparison table 1

Fund name Expense ratio Min.initial investment

Franklin India Index Tax 1.50 500

Kotak Tax Saver 2.41 500

Sundaram Tax Saver 2.13 500

Reliance Tax Saver 2.50 500


Fund name Launch date rating

Franklin India opportunity March 2005 Not rated

Kotak conta July 2005 Not rated

Sundaram select focus July 2002 3 stars

Reliance vision Oct 1995 5 stars

Source: Morningstar rating agency.com

Comparison table 2

1 = LOW2 = AVERAGE3 = HIGH


Comparison table 3


Franklin India Opportunity Not rated Not rated

Kotak Conta Not Rated Not rated

Sundaram Select Focus avg avg

Reliance Vision Low high


Minimum investment 5000Source: http://www.valueresearch.com

Fund name Expense ratio

Min.initial investment

Franklin India Opportunity 2.34 5000

Kotak Conta 2.22 5000

Sundaram Select Focus 2.15 5000

Reliance Vision 2.50 5000


SWOT Analysis

SWOT Analysis

In my training period of 6 week at Sundaram BNP Paribas Asset Management

Company Ltd I have experience and analyzed the strength,Weakness

opportunity and threat of the company.

Before explaining this I would like to define clearly that what is swot analysis?

Definitions of SWOT

Strengths are attributes of the organization that are helpful to the achievement

of the objective

Weaknesses are attributes of the organization that are harmful to the

achievement of the objective.

Opportunities are external conditions that are helpful to the achievement of the

objective.

Threats are external conditions that are harmful to the achievement of the objective.

SWOT Analysisi of sundaram BNP Paribas Asset

Management Company Ltd.

S-strength of the companyThe strength of the company are many like

Well established brand of south

Performance wise sundaram schemes are up in the market

Efficient team of sundaram is the biggest asset for the company

Quite imprasive infrastructure

Relationship selling. sundaram direct sales force maintains a good

relationship with customers

W-weakness of the companyNext take a look at the W of SWOT

Brand power is not effective. Awareness of brand among the people is

not there.The brand is not so popular out of south region

Company is not providing any Marketing material which will helpful in

advertising field.

Product material are also not sufficient which slow down the growth of the

company

T-Threat for the company It is use ful to take the T in SWOT and look at the threat

The continious threat is the threat from fluctuaion in the sensex

Particular fund of the compititor performing well i is another threat to

survive and to lead in the market

Compititor’s action that is attractive schemes (like free holiday

pacakages,contast) of the compititor is also a threat of loosing customers.

O-Opportunity for the companyNow consider O in SWOT although there are many threat from competition in

the online area,it is providing great opportunity

The biggest threat can become the biggest opportunity

sundaram has many avenus to explor for increasing opportunity in the

future these include performance of schemes

sundaram select mid cap

sundaram select focus and

sundaram leadership fund

are some schemes which are performing supeb in the market and is

leading in from other top companis schemes.

improving customer relationship and incresaing sales through better

integration is also the opportunity to grow in the market

Findings &

Recommendations

Findings & Recommendation

After completing my research I find that sundaram mutual fund are performing

quite well in the market as compared to other companies.

In spite of not having brand name only on the basis of its performance sundaram

mutual fund is giving tough competition to the top companies of mutual fund

Some schemes of sundaram mutual fund like

Sundaram select madcap

Sundaram select focus

Sundaram India leadership fund are giving best and high return to their

customers in spite of downfall in the market when almost all the mutual

fund goes negative sundaram mid cap was giving the positive and good

return to the customers.

Recommendation:

Sundaram AMC Ltd. can become a good brand name in the market on the basis

of its performance the need is to give emphasize on the following point

o Sufficient product material should be available in the office.

o Proper and effective marketing should be done to spread

awareness n the market

o Marketing material should be provided for advertise the brand

name of the company.

Conclusion

Conclusion

Mutual funds are emerging as an important financial intermediary for the

investing public in India. Conceptually and operationally they are different. The

investors need to understand the working of a mutual fund and the increasingly

diverse and complex investment options brought to them by a large number of

mutual funds.

The mutual fund industry in India started in 1963 with the formation of Unit Trust

of India, at the initiative of the Government of India and Reserve Bank the.

Sundaram Mutual has assets under management helps investors to reach

their financial goals by delivering consistent performance through judicious

investment practices. It is clear through competitive analysis that in spite of

not having brand name sundaram’s funds are performing quite well in the

market and the need is of brand awareness only.

Limitations

Project was entirely based on secondary information.

Time restraint is another factor which limit my study

Limited resources were available to conduct this study.

Refrences

Book- portfolio management and mutual fund

Puplication ICFAI /august 2004

http://www.valueresearch.com

http:www.amfiindia.com

http://www.moneycontrol.com

http://www.sundarambnpparibas.in

http://www.google.com

http://www.google.com/

http://www.sundarambnpparibas.in/

http://www.moneycontrol.com/

http://www.amfiindia.com/


Thankyou

final sania

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