mutual fund.docx

Definition:-Mutual funds is nothing, the participation of the investor who are not enable to invest their money in the share market and hence they participate in the mutual funds When an investor buy the unit of the Mutual funds what happen the manager of the company invest in the shares.The process is that the manager of the company goes to the people and sells the units of the Mutual funds and hence collects the money and then invests the money in the shares.What happen which dont have the power to invest in the shares they also participates in the shares because when they invest in the Mutual funds then automatically they invest in the shares because the fund manager invest it in the shares

SEBI

TRUSTEESPONSORSOPERATIONSMARKET / SALEMARKET / SALEDISTRIBUTORSAMCFUND MANAGERMUTUAL FUNDSSCHEMEINVESTOR

Role of a Fund Manager:

Fund managers are responsible for implementing a consistent investment strategy that reflects the goals and objectives of the fund. Normally, fund managers monitor market and economic trends and analyze securities in order to make informed investment decisions.

How are mutual funds regulated?

All Asset Management Companies (AMCs) are regulated by SEBI and/or the RBI (in case the AMC is promoted by a bank). In addition, every mutual fund has a board of directors that represents the unit holders interests in the mutual fund.

What is an Asset Management Company (AMC)?

The company that manages a mutual fund is called an AMC. For all practical purposes, it is an organized form of a money portfolio manager. An AMC may have several mutual fund schemes with similar or varied investment objectives. The AMC hires a professional money manager, who buys and sells securities in line with the fund's stated objective.

Are investments in mutual fund units risk-free or safe?

This depends on the underlying instrument that a mutual fund invests in, based on its investment objectives. Mutual funds that invest in stock market-related instruments cannot be termed risk-free or safe as investment in shares are inherently risky by nature, whereas funds that invest in fixed-income instruments are relatively safe and those that invest only in government securities are the safest.

How is NAV calculated?

The value of all the securities in mutual funds portfolio is calculated daily. From this, all expenses are deducted and the resultant value divided by the number of units in the fund is the funds NAV or its Net Asset Value.

Introduction:-Mutual funds are financial intermediaries in the investment business. They collect funds from public and invest on the behalf of the investors as pass through entity with losses and gain with accruing to the investors only. Mutual funds sell their shares to their investors; invests the proceeds in a wide choice of securities in the financial market. Owner of shares receive prorate shares of the earning from these assets, minus management and other fees assessed by the fund.Mutual funds are defined by the different authors in different words meaning on the same thing I. e. it is non banking and non depository financial intermediary which act as an important vehicle for bringing wealth holders and deficit units together indirectly. Mutual funds are pooling funds together and then investing that funds in different securities thus reduce risk by diversificationOrigin of Mutual funds :The origin of the modern mutual funds industry may be traced to Robert Fleming first investment trust set up in the 1870s when he promised to manage the finance of the moneyed classes of Scotland. Flemings trust called foreign and colonial investment Trust was formed as Limited company, to invest in the selection of 18 overseas Government stocks, as average yields of 8 Percent. The moneyed people latched on to the trust idea in a period of falling interest rates.In India, excepting UTI all other mutual funds are organized and set up under Indian trust act 1882. And UTI is set up under special act, the UTI act, amended by the parliament in1963.We can divide the four phases Phase 1(1964-1986) The Unit trust of India (UTI) has the distinction of laying the foundation of mutual funds industry in India. The trust was establish under UTI act, 1963, a special act of parliament and became operational in July 1964. It started with the basic objective of mobilizing the savings through the sale of units and investing them in corporate securities, for maximizing yield and capital appreciation.The institution maintained its monopoly till 1987, with its different scheme like monthly income, capital gains scheme equity linked scheme plan etc. Its most popular scheme has been the unit scheme 1964, which is the first open ended scheme. Over the years, UTI has emerged as a large investment institution; with a well spread out network, it has successfully managed its domestic and offshore mutual funds. During this phase, UTI was the only fund company in India, and its funds family included five income oriented open-ended schemes, which were sold largely through its agent network built up over years.Phase 2 (1987-1992)When the mutual funds become free for Public sectorThe second phase, witness the entry of funds companies sponsored by the state owned bank and financial institution. In 1987, SBI mutual funds Canara bank mutual funds were set up as trust under the Indian trust Act 1882, by the respective sponsors, the state bank of India andCanara bank. By the 1990, the two state sector insurance giant, LIC and GIC and state owned bank namely Indian India issued another set of guidelines in June 1990, which emphasized that arms lengths relationship be maintained between the sponsor and MAC.Phase 3 (1992-..)The phase for open field policy The year 1993 marked a turning point in the history of mutual funds in India. As a part of the economic liberalization and reform process, the Government launched a series of measures for financial sectors including setting up of SEBI issued the mutual funds regulation in January 1993. Also the mutual funds industry opened up to private domestic and international players. Kothari groups of companies, in joint venture with pioneer of US Funds Company, set up first private mutual funds, the Kothari Pioneer mutual funds, in 1993. This was soon fallowed from Morgan Stanley. Subsequently, several mutual fund trusts set up by the domestic and foreign companies either in joint venture as independent entities.

The contribution of mutual funds toward the EconomyEvery entity present in the economy has its own role in the economy. For performing that role in the Economy it charges to somebody and gives some benefits to him. If these benefits provided by that by that entity are more than the cost, then that entity exist in the economy and we can say that this entity is performing well. The investment needed for different household not conform to ant standard pattern. First they determine clearly their investment objectives, including the combination of safety, income capital growth and price level protection they are seeking.Second, they must decide they must of investment to be used and the proportions of each to be acquired. Third, they must select specific investment of the desire type, making sure that quality stability and other features are obtained as needed. Finally, they should study the long run values of suitable investment and time their purchase and sales with due regard for the price behavior of characteristically unstable investment markets. The proper handling of the fourfold task is an assignment of no mean proportions.In choosing specific investment, investors will need definite ideas regarding a number of features of investments. The following are some factors which investor consider while designing his investment policy. They are not offered in any order denoting importance, the emphasis each should receive varies with the situation of each investor.1. Safety (Risk reduction) :Household investors are in financial surplus, and are therefore the net primary lenders to the financial markets, and the industrial commercial and government sectors in financial deficit and are therefore net borrowers from the financial markets. But always there is a risk involved of a borrower being unable to pay the interest to repay the principal when it is due. This risk is known as default risk or credit risk.Also there is a certainty attached to the income stream derived from investment project, since the value of equity investment will rise if the underlying capital stock is used productively and will decline or even vanish if it used unproductively. This risk is called equity risk. Investors therefore want safety against this risk in the investments, even though the returns on the investment may be low.

2. Capital appreciation:The ultimate objective of an individual in household sector, say, is to maximize the expected welfare of utility of this lifetime consumption stream. For that sometime he looks for larger return than a safe investment. These types of investors are more interested in priced gain rather than income.Therefore they invest in speculative assets like equity shares, which have radical price variation. In this type of investments value of principal is of prime concern

3. Regular income (Stability of income)The factor is important in arranging an investment portfolio for an individual who depend closely on income. The risk related to the assets giving regular income has less risk as com [pared to the investment, which provide capital growth.4. LiquidityEvery investor require minimum, quick recourse fund available to meet emergencies. Furthermore, a sound portfolio will look to the sure and quick availability of additional fund which may be needed for business opportunities, or estate taxes. Therefore liquidity is one of the important factor considers while investing.5. Freedom from care about investmentThe existence of important risk in every class of investment makes it impossible to buy good thing and forget them. T/Constant skilled supervision is necessary to obtain good returns. Those who wish to minimize the attention required by their investment should therefore make quality their watch word.6. Proper investmentsThe proper handling of investment task is very difficult. It demands technical knowledge, diligence, and some experience, but it is the essence of successful investment management for an individual. In country like India, where the literacy level is very low the investors from, household sector lakes in knowledge or in them required for successful investment in capital marketClassification of mutual funds:-Mutual funds can be classified in to fallowing three based categories.1. Portfolio classification of mutual funds. 2. Functional classification of mutual funds.3. Geographical classification of mutual funds.

1. Portfolio classification of mutual funds

I) Growth funds:-These funds invest mostly equity shares and assume the risk associated with the equity investment. The main objective of the growth funds is to appreciate the capital.II) Income funds:-These funds mostly invest in bonds, like debt instruments, like debentures. Their basis is towards providing safety of investment and regular income.III) Balance funds:-They are divide their investment between equity shares and bonds in order to meets the objective of safety, capital appreciation and regularity of income.IV) Tax exempt funds:-They invest their funds in such investments, which receive benefits and enjoy exclusive tax free treatment.V) Index funds:-These funds invest only in those shares, which are included in the market indices and in exactly in the same proportion, so that the value of such index varies with the market index.VI) Hedge funds:-Mutual funds, which employ their funds by speculative trading, i.e. by buying shares whose prices are likely to rise and selling shares whose prices are likely to fall, are called hedge funds.VII) Money market funds:-Specialize in investing in short-term money market instrument like certificate of deposits the emphasis on liquidity with low rate of return.VIII) Special funds:-These funds invest only in specialized channels like a specific country (India funds, Japan funds, and Korea funds) a specific category of companies, real stat.

1. Functional classification of mutual funds:-

I) Open ended Scheme:- Mutual funds may have open ended scheme under which an investor is free to join the fund or withdrew from their funds at any time after an initial lock in period. Such funds announce sale and repurchase prices from time to time. UTIs US 64 scheme is an example of such fund. In open ended mutual funds, the holder can resell the shares in the fund to the issuing mutual fund company and receive in turn the net asset value (NAV) of the shares. The open ended fund can buy or sell their own shares.II) Closed ended Funds:-Such mutual funds do not issue shares or unit or repurchase or redeem on a periodic basis. Units of such schemes can redeem only on termination or through dealing in share market. In close ended scheme the period of the scheme specified. Close ended scheme has definite target amount for the funds and cannot sell more after initial offering.2. Geographical classification of mutual funds:-

3. Domestic funds:-

Domestic funds are the savings schemes. Which are opened for mobilizing saving of investors in household sector in the country. They can invest in the securities in the financial markets within the country.

4. Offshore funds:-Such mutual funds can invest in securities of foreign companies and such investment requires RBI permission.Mutual funds Investment VS Individual investment

5. Amount of funds available:-Fund manager have a large amount of funds, which provide them economies of scale by which they can absorb any losses in the stock market and can continue investing in the stock market.On the other hand, individual investors dont have large amount of funds for investments. Therefore if the suffer any losses in the market, it become very difficult for him to regain his position. Thus mutual funds provide stability to the stock market.6. Portfolio diversification:-Also mutual funds have portfolio diversification, of securities because of large amount of funds available with them, which helps in reduction in risk. But the portfolio diversification of securities is not possible for an individual investor. Therefore mutual funds help the investor in reducing the risk.Information and data available:-AMCs have large amount of funds available with them, so can afford information and data required for investments through equity research team. Although individual investor can access to the information he cant afford informationProfessional management:-Fund manager have professionals who have various analytical techniques available with them for analyzing data of various companies. But many investors dont have basic knowledge about investment thus making them incapableof making informed decision. Thus fund managers help the individual investors in proper investment in the financial market by analyzing the data and information available.

Continuous monitoring of investments:-As the AMCs have the information and data with them and also they have various analytical techniques available with the, they can continuously monitor the progress of the companies in which they have invested their funds. On the other hands, investors at time dont have sufficient knowledge and time to monitor the performance of companies in which they have invested. Fund management thus helps the investors in talking the worry out of their investments. The present state of the mutual funds their performance and profitability has been a cause of concern. Concern have been expressed in various quarters, including investors association about the legality and ethics of certain practice fallowed by mutual funds and the fund management capabilities of the fund managers.Questions have been raised about the accountability and responsibility of the asset management companies towards their investors, and the role of trustee in supervising the asset management companies in fulfilling their obligations towards the investors.Therefore we must consider the issue and try to work on them to ensure that mutual funds develop in to vibrant and efficient investment vehicles, providing the benefits of security markets to millions of investors.

LIC IntroductionLIC Mutual Fund was set up by Life Insurance Corporation of India on 19th June 1989 with a corpus of Rs. 2 crores. LIC Mutual Funds are managed by LIC Mutal Fund Asset Management Company Ltd which was formed on 20th April 1994 in compliance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1993.

Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. But the Act discriminated between foreign and Indian companies on many accounts, putting the Indian companies at a disadvantage.

19th of January, 1956, that life insurance in India was nationalized. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost. Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices, 7 zonal offices and the Corporate office. LICs Wide Area Network covers 100 divisional offices and connects all the branches through a Metro Area Network. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. LICs ECS and ATM premium payment facility is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info Centres have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices.

PRUDENTIAL ICICI MUTUAL FUNDS

ICICI Prudential is a joint venture between ICICI Bank and Prudential plc engaged in the business of life insurance in India. ICICI Prudential is the largest private insurance company and second largest insurance in India after LIC. ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse, and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA).ICICI Prudential Life's capital stands at Rs. 37.72 billion (as on March, 2008) with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. The company has assets held over Rs. 30,000 crore as on April 30, 2008.ICICI Prudential Life is also the only private life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings..Arguably the most innovative Indian Life insurer in terms of customer services and products, ICICI Prudential has one of the largest distribution and servicing network with over 2,000 proprietary offices & customer touch points across India. The 30,000 employee strong organization has one of the largest agency distribution in the industry.In June, 2009 ICICI Prudential Life Insurance has decided to snap its tie up with TTK Healthcare to settle insurance claims of its users.

Objective of study:-To compare the returns given by two mutual funds mentioned above VS with the index and also to compare the relative returns given by two mutual funds.To see if they are able to achieve the objective with regard to managing the portfolio as they have spelt out in their offer documents.To see if there is acquits liquidity offered by the mutual funds.To see if they are transparent in disclosing their portfolioon a regular basis and dealing with public.

Hypothesis for the project are as follows:-

Portfoliomanaged by professional bodies like mutual funds five better returns in comparison to return given by index. More transparent the portfolio, more are the returns and public confidence in term of mobilization of funds. Schemes of LIC mutual fund that have been taken for the comparison withPru. ICICI mutual fund have given better returns in comparison to both LIC Mutual funds and BSE-sensex.

Research methodology:-The research methodology that I followed during preparation of project consisted of primary collection of data from various internet sites like mutualfundindia.com bseindia.com. I also took data from the site of mutual funds like pruicici.com. the data given in the fact sheets of both the mutual fund also proved to be great help.The secondary source of data consist question being asked to market analysts as to the appropriate method for the performance evaluation of mutual funds. Majority of them suggested the tactual comparison of returns is the correct evaluation method of evaluating the mutual funds. I prepared a questionnaire to ask various people as to the mutual funds they like with regard to their transparency, portfolio disclosure and service standards. Majority of them showed a preference towards investing mutual funds of private sector especially pro ICICI and LIC.

The Mutual funds Boom:-The history of mutual funds begins in 1964 that was the year of the Unit Trust of India Launched in 1964. It was only 1987 that the banks and insurance companies got in to the act, with state bank of India taking the initiative 40% of the funds promoted by the banks and insurance companies were launched in the go-go year in the 1987 and 1993. The first private fund. Kothari Pioneer (Now ITI pioneer) was launched in to 1993. More fund were joined the party and the total asset under management grew to Rs. 61.301crore in 1994. But as the Sensex dropped, investor preference shifted to fix income instruments in 1996.here most new entrants found it difficult to complete with UTI. Which has assured return debt.Products. The period 1996-98 was the worst in the history of mutual funds. But several asset management companies used the opportunity of restructure their portfolio and were ready for the 1999 boom in equities. In 1999- 2000, the value of asset under management swelled to Rs. 167946 Crore. Then the great equity melt down happened. Today, there are 34 mutual fund houses managing 614 scheme and Rs 94571 crorein assets. Not all of them will survive, but performance and transparency will tell in the long run.

Pro ICICI Balanced FundSummary informationOn Mar. 31, 2010

Fund Name Pru.ICICI Mutual funds

Asset management CompanyPro ICICI AMC Ltd.

OwnershipJoint venture

TypeOpen ended

Investment Objective Income and Growth

Launch dateNovember 09, 1999

Net Asset (Fund size)Rs. 262.86.crore

Fund managerMr.Prashant Kothari

Growth Option47.30

Entry LoadNil

Exit Load 1%

Performance table

PeriodNameLast 1YearLast 3YearLast 5 YearSince Inception

Pro ICICI Balanced Fund66.27.114.814.5

Asset allocation31st Mar.2010 (%)Finance - Banks - Public Sector10.0Computers Software10Diversified9.0Finance - Banks - Private Sector9.0Refineries9.0Cigarettes6.0Finance Investments4.0Auto, cars & Jeeps3.0Engineering Heavy3.0Oil Drilling And Exploration3.0

Sr. No.Top 10 Holding Scripts name Listed on stock exchangeMarket Value(Rs In Lakhs)% to NAV

1Finance - Banks - Public Sector2628.610.0

2Computers - Software2628.610.0

3Diversified2365.749.0

4Finance - Banks - Private Sector2365.749.0

5Refineries2365.749.0

6Cigarettes1577.166.0

7Finance - Investments1051.444.0

8Auto - Cars & Jeeps788.583.0

9Engineering - Heavy788.583.0

10Oil Drilling And Exploration788.583.0

LIC Balanced FundSummary informationOn Mar. 31, 2010

Fund Name Equity - Balanced Fund

Asset management CompanyLIC Mutual Fund Asset Management Company Ltd.


TypeOpen Ended

Investment Objective Growth

Launch dateJanuary 01, 1991

Net Asset (Fund size)Rs. 30.73rore

Fund managerMrs.BichitraMahapatra

Growth Option47.30

Dividend Option21.95

Entry LoadNil

Exit Load 1%

Performance table


LIC Balanced Fund

-23.3732-3.253210.02765.3061

Asset allocation31st Mar.2010 (%)Power - Transmission/Equipment15.0Telecommunication - Services15.0Finance - Banks - Public Sector8.0Pharmaceuticals7.0Cement Major7.0Finance - Banks - Private Sector5.0Power - Generation/Distribution5.0Aluminum4.0Personal Care4.0Diversified3.0


1BhartiAirtel279.33579.09

2Jyoti Structures236.6217.7

3Power Grid Corpo216.33927.04

4Ambuja Cements Ltd.207.42756.75

5Ranbaxy Labs.203.73996.63

6IDBI Bank Ltd.197.59396.43

7RelianceCommu.Ltd173.00995.63

8YES Bank Ltd.160.10335.21

9PTC India2145.115.03

10Hindustan Unilever L2025.664.31

ICICI Prudential Growth PlanSummary informationOn Mar. 31, 2010

Fund NamePru. ICICI MF.

Asset Management CompanyPru. ICICI AMC Ltd.

OwnershipJoint Venture

Types Open ended

Investment objectiveIncome and growth

Launch dateJuly 09, 1998

Net asset (Fund Size)389.56crore

Fund managerMr.SankaranNaren

NAV120.51

Entry LoadNIL

Exit loadNIL

Performance table


ICICI Growth Plan

87.441.6158.4120.650

Asset allocation31st Mar.2010 (%)Diversified16.0Computers- Software15.0Finance - Banks - Private Sector11.0Telecommunications Service7.0Finance Housing6.0Oil Drilling and Exploration6.0Engineering Heavy5.0Power - Generation/Distribution5.0Metals - Non Ferrous Copper4.0Pharmaceuticals4.0


1Reliance Inds.279.335716.0

2Infosys Techno.236.62115.0


4HDFC207.42757.0

5ICICI Bank203.73996.0

6Bharat Heavy Elec.197.59396.0

7L & T173.00995.0


9HDFC Bank

2145.114.0

10Cairn India Ltd2025.664.0

LICMF Growth Fund (G)

Summary informationOn Mar. 31, 2010

Fund Name LIC MF Growth fund LIC MF Growth fund



TypeOpen Ended


Launched date 01, Aug., 94

Net Asset sizeRs. 82.53crore

Fund managerMrs. Ramasamy

Growth Option11.81

Entry LoadNil

Exit Load 1% if exit within 1 years for any investment.

Performance table


LIC Growth Fund

103.9610.4615.2610.19

Asset allocation31st Mar.2010 (%)Automobiles2.25Gas & others1.9Transports1.41Fertilizers1.03Pharma0.82Media & Entertainment0.64Non Ferrous Metal0.32Auto Ancillary0.32Hotel1.91Textile products1.32


1Reliance Inds727.2797.155

2ITC331.99675.46

3ONGC285.21835.10

4State Bank of India274.82314.37

5Larsen & Toubro268.97584.22

6Reliance Infra.214.4013.78

7H D F C418.40683.49


9Relience Communication196.85912.93

10TCS191.01182.87

Pro ICICI Tax Plan


Fund NamePro. ICICI Mutual funds

Asset Management CompanyPro. ICICI AMC Ltd


Type Open ended

Investment objectiveIncome and Growth

Launch DateAug. 19 1999

Net asset (Fund Size)Rs. 1011.03 Crore

Fund ManagerMr.SankaranNaren

Growth Option119.69

Entry LoadNil

Exit LoadNil

Performance table


Pro ICICI Tax Plan

117.374575820.6026.60

Asset allocation31st Mar.2010 (%)Computers Software11.0Pharmaceuticals10.0Diversified6.0Fertilisers Nitrogenous/Phosphate5.0Finance Banks Private Sector5.0Power Generation/Distribution5.0Telecommunications Service5.0Chemicals Specialty Others4.0Finance Housing4.0Personal Care4.0


1CadilaHealthcare5449.45175.39

2Infosys Techno.5085.48095.03


4ZuariIndustrie4600.18654.55

5Reliance Inds.4266.54664.22

6HDFC4195.77454.15

7NTPC4185.66424.14

8Corporation Bank4064.34064.02


10PidiliteInds.3245.40633.21

LICMF Tax Plan (G)


Fund Name LIC Mutual fund Tax PlanLIC Mutual fund Tax Plan



TypeOpen Ended


Launch date 01, Jan. 97 01, Jan. 97

Net Asset (Fund size)Rs. 40.98crore


Growth Option26.69

Entry LoadNil


Performance table


LIC Tax Plan

77.813.089.178.28

Asset allocation31st Mar.2010 (%)Oil & others5.27Software4.8Powers & others4.8Constructions & others3.38Automobiles3.3Industrial products2.58Ferrous metals2.49Cements2.46Media & entertainment1.91Textile products1.32



2ITC331.99675.46

3ONGC285.21835.10

4State Bank of India274.82314.37



7H D F C418.40683.49


9Relience Communication196.85912.93

10TCS191.01182.87

ICICI Prudential Flexible Income Plan Premium Growth Summary informationOn Mar. 31, 2010




Types Open ended

Investment objectiveIncome and growth

Launch dateSeptember 27, 2002

Net asset (Fund Size)35669.76 crore

Fund managerMr.ChaitanyaPande, Amit Mehta

NAV170.64

Entry LoadNIL

Exit loadNIL

Performance table


Pro ICICI Flexible Income

5.237.767.067.45

Asset allocation31st Mar.2010 (%)Banks45.63Current Assets16.42Sovereign14.74NBFC6.17Petroleum, Gas and petrochemical products4.69HFC3.54Food & Food Processing, Beverages2.24FI1.55Diversified1.34Steel and Ferrous Metal1.26

Sr.No.Top 10 holdings Scripts Name Listed o Stock exchangeMarket Value (RS. In Lakhs ) % of NAV

1Canara Bank309970.21448.69

2Central Bank257535.66727.22

3Punj. NationlBak884624.3159044.98

4Bank of India172284.94084.83

5IDBI Bank Ltd.164794.29124.62

6Union Bank of In157660.33924.42

7Oriental Bank of444477.3123843.53

8HDFC121990.57923.42

9Syndicate Bank119493.6963.35

10UCO Bank116640.11523.27

LICMF Opportunities Fund (G)


Fund Name Equity Balanced Fund



TypeOpen Ended


Launch date31-Jan-05



Growth Option17.19

Entry LoadNil


Performance table


LIC Opportunity Fund (G)

75.112.850.0011.56

Asset allocation31st Mar.2010 (%)Banks15.44Petroleum products12.23Powers & others10.13Telecommunication services8.97Industrial capital goods8.47Consumers Non durables6.7Oil & others5.69Finance5.41Cement4.12Ferrous Metals3.92



2ITC331.99675.11


4O N G C274.82314.23



7H D F C418.40686.44

8Petronet LNG257.93093.97


10ICICI Bank191.01182.94

ICICI Pru Index Fund-Nifty PlanSummary informationOn Mar. 31, 2010




Types Open ended

Investment objectiveGrowth

Launch date15 Feb. 2002

Net asset (Fund Size)97.59 crore

Fund managerKayzadEnglim

NAV176.09

Entry LoadNIL

Exit loadNIL

Performance table


Pro.ICICIindex fund

94.612.220.821.4

Asset allocation31st Mar.2010 (%)Petroleum, Gas and petrochemical products16.56Banks15.91FMCG7.04Current Assets6.93Auto & Auto Ancillaries5.84Engineering and Capital Goods5.83HFC4.63Non Ferrous metals3.64Construction materials2.02Construction and Infrastructure1.21

Sr.No.Top 10 holdings Scripts Name Listed o Stock exchangeMarket Value (RS. In Lakhs ) % of NAV

1Petroleum Products1024.69510.5

2Software663.6126.8

3icici bank ltd517.2275.3

4Diversified478.1914.9

5Consumer Non Durables361.0833.7

6Finance331.8063.4

7hdfc bank ltd331.8063.4

8state bank of india ltd292.773.0

9bharat heavy electricals ltd214.6982.2

10bhartiairtel ltd204.9392.1

LICMF Index Fund - Nifty Plan (G)


Fund Name Equity Balanced Fund



TypeOpen Ended


Launch date14-Nov-02



Growth Option17.19

Entry LoadNil

Exit Load Nil

Performance table


LIC Index Fund

88.66.515.216.9

Asset allocation31st Mar.2010 (%)Banks15.44Petroleum products12.23Powers & others10.13Telecommunication services8.97Industrial capital goods8.47Consumers Non durables6.7Oil & others5.69Finance5.41Cement4.12Ferrous Metals3.92



2ITC679.478.7


4O N G C507.656.5



7H D F C320.214.1



10ICICI Bank203.062.6

Comparison of NAVs Of ICICI Balanced Fund v/s LIC Balanced fund

Comparison of NAVs Of ICICI Growth Fund v/s LIC Growth Plan

Comparison of NAVs Of ICICI Tax Plan v/s LIC Tax Plan

Comparison of NAVs Of ICICI Flexible income v/s LIC Opportunity fund

Comparison of NAVs Of ICICI Index fund v/s LIC Index fund

Pru. ICICI Balanced (G)Since its inception on 9th November 1999, it has done very well beating all parameters. It reached to Rs. 9.50 on 31st Dec. 2000. On subsequent downturn it touched to Rs. 8.40/- on 31st Dec. 2001. It has recovered to 11.41/- as on 31st January 2002, and by the end of 31st Dec. 2003 it gone up to 16.50/- along with upward move of sensex. The NAVs increases up to 26.77 at the end of 31st Dec. 2005, Rs. 26.96 and 34.63 at the 31st Dec. 2006 and then increase as 47.3 at 31st Dec. 200, then fall down with sensex fallen down in 2008.But Now at the date of 31st Dec. 2009, the NAV of the this Mutual fund is 40.050.

LIC Mutual Funds Balanced Funds

The inception date of LIC MF Balanced Fund is01-Aug-94 and in the year 2000 it reached to 18.78, in 2001 it decreases to 15.71. in 2005 it reached to 27.02, after that in the year 2006 it touched to 42.75. in the year of 2008 it was 50.517, but in 2009 it goes a little down as 38.709.

Pru. ICICI Growth Plan (G)July 09, 1998 the inception date of the this scheme after that in 1999 the NAV goes to the 14.570 and in 2000 it goes to 32.630, but in 2001 it decreases to the17.330, after a slow growth the NAV reached 44.270 in the year of 2005. After that the scheme reached 103.220 in the year of 2008. But it decreases in the year 2009 as 72.940.LIC Mutual Funds Growth Fund (G)01-Aug-94 inception date in 2000 it goes to the 4.970, and in the year 2002 it decreases to the 2.129 then started to increase and goes to 5.393 in the year 2004 and 6.188 in 2005. In 2006 it goes to the 10.424, and in 2007 it was 9.970, in the year 2008 it was 10.186 and then decreases to 6.593 in the year of 2009.

Pru. ICICI Tax Plan (G)Aug. 19 1999 the scheme was launched and in the next year it reached to the 21.48 in the year of 2000, but it cant stay at the same place it slipped in next year to the 10.33. In the year of the 2005 the NAV touched the height as 47.37 and after that the NAV increases every year it went to 92.74 in the year of 2008, but it slipped to 56.88 in the year of the 2009.

LIC Mutual fund Tax Plan01-Jan-97 launch date of this scheme. The NAV was 10.87 in the year of the 1999, in 2000 the NAV was 16.5. in 2001 it slipped to the 7.0, In Mar. 2005 the NAV was 16.484, in 2006 it reached to the 25.112. In the year 2007 the NAV Increased 24.265.in 2008 it was 26.7 and in the year 2009 the NAV slipped to 16.686.ICICI Flexible Income September 27, 2002 the inception date of the scheme in 2003 it reached 107.75, and in the year 2004 it reached to the 119.43 and increase year by year. In the year 2008 the NAV reached to the 149.35. and lastly in the year of the 2009 it reached to 162.970.LIC Mutual fund opportunity fund31-Jan-05 inception date of the mutual funds, in the same year the NAV fall a little bit but in the next year the NAV cover the return and reached to 15.337. And in the year 2007 the NAV was 15.916, in the 2008 it reached to the 17.558. The last year was not good for this scheme and the NAV slipped to 10.866.

Pru. ICICI Index Fund Nifty plan (G)The inception date is 15th Feb. 2002. The year 2003 was not good for this scheme because the NAV was negative 8.328, but in one year it reached to 15.181, in 2005 it was 17.235. in the year 2006 it reached to 29.91,in the year 2007 it was 34.037 and it reached a high NAV as 42.855. But in the Year 2009 the NAV decreases to the 27.965.

LIC MF Index Fund - Nifty Plan (G)14 Nov. 2002 when this scheme launched, in the year 2003 it go down to 8.438, and in the year 2004 it recovered and reached to 13.503, and the year 2005 the NAV was 15.026. in the year 2006 it was 21.993, it increases year by year and in the year 2008 it was 27.744, in the year 2009 the NAV was 17.252.

Performance evaluation tools of Mutual funds

The tool according to me, which is relevant in the Indian scenario to evaluate the performance of the mutual funds is Comparison of returns Comparison of Returns:-We all are always interested in discovering of the performance of the mutual funds, whether the management of the mutual funds is performing well, that is, has management done better through his selective buying and selling of securities that would have been achieved through merely buying the market picking up a large no of securities randomly and holding them throughout the period?

One of the most popular of measuring management performance is by comparing the yield of managed portfolio with the market or with the random portfolio. The portfolio yields formula parallels the holding period yield,Formula for stocks that is presented as {(NAVT + D t)/NAVt-1}-1Where,NAV t = Per share net asset value at the end of the year t.D t= the total of all distribution both income and capital Gain per share during the year.NAV= Per share net asset value at the end of previous year.

It is clear that by concede ration of returns or yields alone, mutual funds on the average have well between the Sensex. In spite of negative returns of the sensex, the returns for the mutual funds are positive one.First if the managed portfolio did better than the unmanaged portfolio, the investor in the mutual funds should not rejoice too soon. He has to pay the management fee as well as suffer a reduction in equity equal to the loading charges (in the case of a load fund). So, he must incurred by purchasing a mutual funds rather than purchasing a diversified portfolio on his own and paying the commission.Second, the investor must determine the relative riskiness of the portfolio under analysis. The managed portfolio could have achieved higher returns than the markets or an unmanaged portfolio by taking on considerably more risk investments. It is not surprising under such circumstances for higher return to occur, for higher returns should go along with the higher risks. Since the differential returns earned by a manager may be due to difference in the exposure to risk forms that of the index or typical manager, there would be merit in the attempting to adjust the return for any difference in risk exposure.

Comparison of return of Ten Mutual FundName1 Year3 Year 5 Year Since Inception

Pru. ICICI Balanced Fund (G)65.3%24.2%98.7%303.7%

LIC MF Balanced Fund (G)42.4%29.5%88.8%`147.2%

Pru. ICICI Growth Plan (G)87.4%41.6%158.4%1030.7%

LIC MF Growth Fund (G)108.1%23.8%81.5%204%

Pru. ICICI Tax Plan (G)156.7%54.5%152.4%1156.5%

LIC MF Tax Plan (G)79.5%14.1%56.1%189.2%

Pru. ICICI Flexible income Plan (G)5.2%25.1%40.5%70%

LIC MF Opportunity Fund (G)78.0%12.9%73.2%73.2%

Pru. ICICI Index Fund Nifty plan (G)93.4%44.2%156.7%376.1%

Pru. LIC MF Index Fund Nifty Plan (G)87.4%23.5%101.7%207.6%

As it can be seen from the above that all funds have given high return in the last year. As the index goes to healthy the returns also rise.

The first objective is to compare the return given by two mutual funds in comparison with the index and also to compare the relative returns given by two mutual funds.Name1 Year3 Year 5 Year Since Inception



Name1 Year3 Year 5 Year Since Inception






LIC MF Tax Plan (G)79.5%14.1%56.1%189.2%




Pru. LIC MF Index Fund Nifty Plan (G)87.4%23.5%101.7%207.6%

It can be seen from the above that all the funds out perform the sensexby wide margin over a long period of time.As we are seing that ICICI Balnced fund is better in the First year than the LIC balanced Fun, But in 3rd year it is less than the LicBalncedfund , in 5th Year it is highest.Pru. ICICI Growth Fund was a lower performer than the LIC growth fund but in 3rd and 5th year the ICICI Growth fund performed very well.Pru. ICICI Tax plan was performed very well in the comparison of the LIC Tax plan in all the comparison as you are seeing in the above table that in 1st , 3rd , 5th the ICICI tax Plan is best.Pru. ICICI Flexible income if you will compare with LIC Opportunity fund only in the 3rd year the ICICI flexible income is better than the LIC Opportunity fund and in the 1st and in the 5th year it is lower than the LIC opportunity fund.ICICI Index fund is better performer in the 1st year 3rd year, and 5th year than the LIC Index Fund.







LIC MF Tax Plan (G)79.5%14.1%56.1%189.2%




LIC MF Index Fund Nifty Plan (G)87.4%23.5%101.7%207.6%

Hypothesis testing-1

Hypothesis testing-1

NavsPeriodICICI Bal.LIC Bal.ICICI Grow.LICGrow.ICICI Tax.LICTax.ICICI Flex.LICOpport.ICICI IndexLICIndex

Mar.0733.56042.06889.1809.97082.50024.265137.38015.91634.03723.397

Mar.0837.28050.517103.22010.18692.74026.700149.35017.55842.65527.744

Mar.0926.38038.70972.9406.59356.88016.686162.97010.86627.96517.252

Mar.1040.37052.990120.65011.885125.65026.899170.66217.32146.85128.022

All the Funds selected for the analysis well performed.ICICI Flexible income is the best among all the funds.Hence this hypothesis accepted.

Hypothesis Testing- 2To prove the second hypothesis that more transparent the portfolio, more are the returns and public confidence in terms of mobilization of funds, I took structured interview of people (Sample size 50) who invest regularly in mutual funds.(Is given in ,Annexure A)

I found that majority of them used to look up to UTI of meeting their investment needs in mutual funds. In last three years, simce the debacle suffered by UTI in 1998 particularly in its largest and most popular scheme UTI-64 people have lost the faith in the UTI . Now after the latest episode Involving UTI where lack of transparency regarding its disclosure of portfolio. UTI has lost trust of people so much that many people have taken a view to never invest in any scheme in UTI.It is my surprise many people are aware of private mutual funds Specially ICICI Mutual funds and LIC Mutual funds. People who have invested in the ICICI and LIC they are very happy according to their transparency and performance. Both these funds give very high quality of services with regard to sending transaction statement, repurchase facility on any working day. Both these funds are very transparent with regard to disclosure of their portfolios, sending newsletter to its holders on quarterly basis. Information about NAVs are available 24 hours on partial usual funs companies. It can be said that people feel confident while invest both these mutual funds.

As to the performance of both LIC and ICICI both performed very well in the last one year. But if you will see in the last three year and five years the performance was up and down but at the average it was good.Hence this hypothesis is accepted.







LIC MF Tax Plan (G)79.5%14.1%56.1%189.2%




LIC MF Index Fund Nifty Plan (G)87.4%23.5%101.7%207.6%

Hypothesis Testing-3To prove this hypothesis three schemes of each LIC and ICICI Mutual funds were taken.All schemes of ICICI Have performed well by a wide margin over a three year periods however in the last one year, schemes of ICICI mutual funds performed very well. As the sensex grow. As mutual funds are for long term investment, it can be said that scheme of LIC has underperformed.

On the other hand in comparison of schemes of LIC and ICICI Prudential, ICICI has performed well than the LIC Mutual funds. You can see that the Mutual funds of the ICICI is well performer than the LIC Mutual funds in the 1st year, in 3rd Year, in 5th Year also.Hence this hypothesis is accepted

Future scope and limitationsFuture Scope:-This project is specifying to equity scheme of Pru. ICICI fund and LIC MF which are similar in nature. Further it can be done to similar scheme of other mutual funds. The tool, which I have adapted to evaluate the performance of mutual funds, the comparison of actual returns method, but other theoretical methods, can be adapt to evaluate the returns.

Limitations:-The most important limitation that is very apparent is that I has adapted only comparison of Return method for evaluating the performance of mutual funds, while there are theoretical methods for evaluating the performance for mutual funds. In our country, people always look for actual returns, which they are actually going to get.Other limitation is that the project is restricted to only five schemes of both the mutual funds where it can be extended to other schemes of both these mutual funds and also extended to other mutual funds.

Conclusion and recommendations:-After a study that I have made, I come to conclusion that all the diversified funds that I have selected for study have giving high returns in last one year and in some cases to to the that they were normally performed as the sensex was performing, some time what happen that the NAV s went down of the face value because of the sensex as we can say recession was the main cause due to which 2006 to 2008 themutual funds of both companies were restricted to grow or they were underperforming.The mutual funds of both the companies gave a highest return from the periods of the Mar. 2000 till the 2006, in between this period the return was very good of both companies and from the 2006 to 2008 both the companies were underperforming, and from the starting of the 2009 the return and NAV,s of both the companies were classical.

It can be seen that all these funds have performed very well but the comparison of LIC with ICICI both are very different in the status, some funds of the ICICI is equal to the LIC Funds and mostly they have very high NAVs than the LIC Mutual funds.But both companies are performing well according to their Funds.

Bibliography:-Books1. Investment management2. (V.K. Bhalla)3. 2. Banking theory, law & practices4. (Gorden & Natrajan)5. 3. Insurance & risk management6. (Dr. P.K. Gupta)Internet sites1. www.lic.com2. www.iciciprulife.com3. www.google.com4. Onlineindia.com5. Valuesearchonlin.com6. Moneycontrol.comNews Papers1. The Economic Times of India~ 59 ~

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