03-09-2016, 10:12 AM
1452242916-6404041430719816MANJUSINGHMBASynopsisandGuideAcceptanceForm7..NEWWWWW.docx (Size: 48.39 KB / Downloads: 7)
Objectives of the project :
Objective of working on this project is to analyze the Past Performance of the various Mutual Funds Schemes on the basis of their Historical NAV’s and application of statistical tools on the same. This helps in understanding the performance of mutual fund schemes in terms of both risk as well as return involved. A mutual fund is a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. The mutual fund will have a fund manager who is responsible for investing the gathered money into specific securities (stocks or bonds). When investors invest in a mutual fund, they are buying units or portions of the mutual fund and thus on investing becomes a unit holder of the fund.Mutual funds are considered as one of the best available investments as compare to others they are very cost efficient and also easy to invest in, thus by pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on their own. But the biggest advantage to mutual funds is diversification, by minimizing risk & maximizing returns. Mutual funds are set up to buy many stocks. Beyond that, investors can diversify even more by purchasing different kinds of stocks which helps to spreading out investors’ money across different types of investments and hence, reduces risk tremendously up to certain extent. It could take you weeks to buy all these investments, but if you purchased a few mutual funds you could be done in a few hours because mutual funds automatically diversify in a predetermined category of investments.
8. Problem Statement :
All the problems of mutual fund industry have been classified in the following categories:-
Problems related to structure- The problems related to structure under SEBI (Mutual Funds) Regulations,1996 are pertaining to regulations 2 (q), 7, 16 (5) , 24 (3) , 21 (b) , 24 (2) , 32, 33,43, & 44. AMFI has taken a lead & made representations to the SEBI & the Central Govt. to amend the regulations. The problems related to the Indian Trusts Act ,1882 are pertaining to individual/collective liability.
Problems related to the investors- The success of a mutual fund depends upon the confidence of the investors. UTI has established a marketing network of branches, chief representatives, collection centers and franchise offices throughout the country. All the problems related to the investors are, lack of awareness and poor after sales service to the investors. The investors believed, so far, that the mutual funds promoted by UTI, LIC, and nationalized banks are guaranteed by the Central Govt. The majority of the new investors don’t understand the concept, operations and advantages of investment in mutual funds before investing. The researcher has undertaken surveys of individual investors and members of Ahmedabad Stock Exchange to analyse the awareness of investors about the mutual fund schemes .
Problems related to working-The inventible funds of the mutual funds increase when sales are more than the redemptions and decrease when the redemptions are more than sales creating the problems of maintaining liquidity. The investors prefer to invest in equity funds during boom period and shift their investments to debt funds during the recession period. There are several problems related to UTI such as non-disclosure of portfolio, inter scheme transfer of funds, lack of professional fund managers, sale & repurchase of units of US-64 at prices not related to its NAV, bureaucratic working, etc.
The mutual funds are bound to invest the funds as per their investment objectives of each scheme published in the offer document. After the issue is over, it becomes the mandate and the mutual funds have no choice to invest the funds in other securities, which can provide higher returns.
The greater transparency, increased innovations, better services to the investors, liquidity and higher returns will make mutual fund schemes more popular and investors friendly.
9. Methodology to be used :
METHODOLOGY: A Sample of 5 Schemes each from 5 different types of Funds is being taken. Types of Funds taken are follows: Diversified funds, Large cap funds, Mid cap funds, Small cap funds and Sector funds.
Analysis has been done by using following Statistical tools:
• Sharpe Ratio: It indicates the Risk-Return Performance of Portfolio.
• Beta: It measures the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.
• Standard Deviation: It shows the historical volatility.
• Annualized Return: It indicate the return on return over the period of times.
SIGNIFICANCE:
• Able to learn the various analytical tools of Mutual Fund like Beta, Standard Deviation, Compounded annual growth rate (CAGR) and Sharp Ratio.
• Get complete overview of Mutual Fund industries in India.
• Able to know the past performance of various Mutual Funds Schemes.