“COMPARATIVE ANALYSIS OF DIVERSIFIED LARGE

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Journal of Information and Computational ScienceISSN: 1548-7741INDUSTRY PROFILEA mutual fund is a pool of money, collectedfrom investors, and is invested according tocertain investment options. A mutual fund is atrust that pools the savings of a number ofLQYHVWRU¶Vwhoshare a common financial goal.A mutual fund is created when investors puttheir money together. It is therefore a pool ofthe LQYHVWRU¶Vfunds. The money thus collectedis then invested in capital market instrumentssuch as shares, debentures and othersecurities. The income earned through theseinvestments and the capital appreciationsrealized are shared by its unit holders inproportion to the number of units owned bythem.A Mutual fund is a professionally managedfirm of collective investments that poolsmoney from many investors and invests it instocks, bonds, short term money marketinstruments and other securities.In a mutual fund, the fund manager, who isknown as the portfolio manager, trades theIXQG¶Vunderlying securities, realizing capitalgains or losses, and collects the dividend orinterest income.Second Phase - 1987-1993 (Entry of PublicSector Funds)The year 1987 marked the entry of otherpublic sector mutual funds. The SBI MutualFund was the first non-UTI Mutual Fundestablished in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab NationalBank Mutual Fund (Aug 89), Indian BankMutual Fund (Nov 89), Bank of India (Jun90), Bank of Baroda Mutual Fund (Oct 92).LIC established its mutual fund in June 1989while GIC had set up its mutual fund inDecember 1990. At the end of 1993, themutual fund industry had assets undermanagement of Rs. 47,004 cores.Third Phase - 1993-2003 (Entry of PrivateSector Funds)History of the Mutual fund: - The mutualfund industry in India started in 1963 with theformation of Unit Trust of India, at theinitiative of the Government of India andReserve Bank of India. The history of mutualfunds in India can be broadly divided into fourdistinct phasesFirst Phase - 1964-1987 (Growth of UTI)In 1963, UTI was established by an Act ofParliament. It was set up by the Reserve Bankof India and functioned under the RegulatoryVolume 10 Issue 3 - 2020and administrative control of the ReserveBank of India. In 1978 UTI was de-linkedfrom the RBI and the Industrial DevelopmentBank of India (IDBI) took over the regulatoryand administrative control in place of RBI.The first scheme launched by UTI was UnitScheme 1964. At the end of 1988 UTI had Rs.6,700 cores of assets under management.266A new era in the mutual fund industry beganin 1993 with the permission granted for theentry of private sector funds. This gave theIndian investors a broader choice of fundfamilies and increases the competition to theexisting public sector funds. Quitesignificantly foreign fund managementcompanies were also entered into the Indianmarket. The number of mutual fund houseswent on increasing, with many foreign mutualfunds setting up funds in India and also theindustry has witnessed several mergers andacquisitions.www.joics.org

ξFourth Phase - since February 2003In February 2003, following the repeal of theUnit Trust of India Act 1963 UTI wasbifurcated into two separate entities. One isthe Specified Undertaking of the Unit Trust ofIndia with assets under management of Rs.29,835 cores as at the end of January 2003,representing broadly, the assets of US 64scheme, assured return and certain otherschemes. The Specified Undertaking of UnitTrust of India, functioning under anadministrator and under the rules framed byGovernment of India and does not come underthe purview of the Mutual Fund Regulations.ξTypes of Mutual Funds based on AssetClassTYPES OF MUTUAL FUND:ξ(Figure1)TYPES OF MUTUALSTRUCTUREFUNDSBYIn terms of ease with which investors canenter and exit funds, mutual funds are broadlydivided into two classes:ξClose-ended funds: New Fund Offersof close-ended funds providedliquidity window on a periodic basissuch as monthly or weekly.Redemption of units can be madeduring specified intervals. Therefore,such funds have relatively lowliquidity.Interval Ended Schemes: Theseschemes combine the feature of bothopen ended and close ended schemes.Open-ended funds: Investors can buyand sell the units from the fund, at anypoint of time.Equity Funds: These are funds thatinvest in equity stocks/shares ofcompanies. These are considered highrisk funds but also tend to provide high

Journal of Information and Computational ScienceξISSN: 1548-7741immediate but moderate returns.Money markets are also referred to ascash markets and come with risks interms of interest risk, reinvestment riskand credit risks.Balanced or Hybrid Funds: Theseare funds that invest in a mix of assetclasses. In some cases, the proportionof equity is higher than debt while inothers it is the other way round. Riskand returns are balanced out this way.Types of MutualInvestment ObjectiveFundsbasedξξIncome funds: Under these schemes,money is invested primarily in fixedincome instruments e.g. bonds,debentures etc. with the purpose ofproviding capital protection andregular income to investors.Liquid funds: Under these schemes,money is invested primarily in shortterm or very short-term instrumentse.g. T-Bills, CPs etc. with the purposeof providing liquidity. They areconsidered to be low on risk withmoderate returns and are ideal forinvestors with short-term investmenttimelines.Tax-Saving Funds (ELSS): These arefunds that invest primarily in equityshares. Investments made in theseVolume 10 Issue 3 - 2020ξonGrowth funds: Under these schemes, moneyis invested primarily in equity stocks with thepurpose of providing capital appreciation.They are considered to be risky funds ideal forinvestors with a long-term investmenttimeline. Since they are risky funds they arealso ideal for those who are looking for higherreturns on their investments.ξξ268ξξfunds qualify for deductions under theIncome Tax Act. They are consideredhigh on risk but also offer high returnsif the fund performs well.Capital Protection Funds: These arefunds where funds are split betweeninvestmentinfixedincomeinstruments and equity markets. This isdone to ensure protection of theprincipal that has been invested.Fixed Maturity Funds: Fixedmaturity funds are those in which theassets are invested in debt and moneymarket instruments where the maturitydate is either the same as that of thefund or earlier than it.Pension Funds: Pension funds aremutual funds that are invested in witha really long term goal in mind. Theyare primarily meant to provide regularreturns around the time that theinvestor is ready to retire. Theinvestments in such a fund may besplit between equities and debt marketswhere equities act as the risky part ofthe investment providing higher returnand debt markets balance the risk andprovide lower but steady returns. Thereturns from these funds can be takenin lump sums, as a pension or acombination of the two.Gold Fund: - The fund will invest inshares of companies engaged in goldmining and processing. Through goldprices influence these shares, theprices of these shares are more closelylinked to the profitability and goldreserves of the companies. Therefore,NAV of these funds do not closelymirror gold prices.www.joics.org

Journal of Information and Computational ScienceISSN: 1548-7741Types of Mutual Funds based on SpecialtyξξξξξSector Funds: These are funds thatinvest in a particular sector of themarket e.g. Infrastructure funds investonly in those instruments or companiesthat relate to the infrastructure sector.Returns are tied to the performance ofthe chosen sector. The risk involved inthese schemes depends on the natureof the sector.Index Funds: These are funds thatinvest in instruments that represent aparticular index on an exchange so asto mirror the movement and returns ofthe index e.g. buying sharesrepresentative of the BSE Sensex.Fund of funds: These are funds thatinvest in other mutual funds andreturns depend on the performance ofthe target fund. These funds can alsobe referred to as multi manager funds.These investments can be consideredrelatively safe because the funds thatinvestors invest in actually hold otherfunds under them thereby adjusting forrisk from any one fund.Emerging market funds: These arefunds where investments are made indeveloping countries that show goodprospects for the future. They do comewith higher risks as a result of thedynamic political and economicsituations prevailing in the country.International funds: These are alsoknown as foreign funds and offerinvestments in companies located inother parts of the world. Thesecompanies could also be located inemerging economies. The onlycompanies that ZRQ¶Wbe invested inVolume 10 Issue 3 - 2020269ξξξξξwill be those located in the LQYHVWRU¶Vown country.Global funds: These are funds wherethe investment made by the fund canbe in a company in any part of theworld. They are different frominternational/foreign funds because inglobal funds, investments can be madeeven the investor's own country.Real estate funds: These are the fundsthat invest in companies that operate inthe real estate sectors. These funds caninvest in realtors, builders, propertymanagement companies and even incompanies providing loans. Theinvestment in the real estate can bemade at any stage, including projectsthat are in the planning phase, partiallycompleted and are actually completed.Commodity focused stock funds:These funds GRQ¶Winvest directly in thecommodities.Theyinvestincompanies that are working in thecommodities market, such as miningcompaniesorproducersofcommodities. These funds can, attimes, perform the same way thecommodity is as a result of theirassociation with their production.Market neutral funds: The reasonthat these funds are called marketneutral is that they GRQ¶Winvest in themarkets directly. They invest intreasury bills, ETFs and securities andtry to target a fixed and steady growth.Inverse/leveraged funds: These arefunds that operate unlike traditionalmutual funds. The earnings from thesefunds happen when the markets falland when markets do well these fundstend to go into loss. These arewww.joics.org

Journal of Information and Computational ScienceξξξISSN: 1548-7741generally meant only for those who arewilling to incur massive losses but atthe same time can provide huge returnsas well, as a result of the higher riskthey carry.Asset allocation funds: The assetallocation fund comes in two variants,the target date fund and the targetallocation funds. In these funds, theportfolio managers can adjust theallocated assets to achieve results.These funds split the invested amountsand invest it in various instrumentslike bonds and equity.Gilt Funds: Gilt funds are mutualfunds where the funds are invested ingovernment securities for a long term.Since they are invested in governmentsecurities, they are virtually risk freeand can be the ideal investment tothose who GRQ¶Wwant to take risks.Exchange traded funds: These arefunds that are a mix of both open andclose ended mutual funds and aretraded on the stock markets. Thesefunds are not actively managed; theyare managed passively and can offer alot of liquidity. As a result of theirbeing managed passively, they tend tohave lower service charges (entry/exitload) associated with them.MUTUAL FUND TYPES BY MARKETSIZE: By company size, mutual funds can becategorized as the following types:ξξξFODVVLILHG DV ‡OHVV YRODWLOH OHVOHVVUHWXUQ·type.Mid Cap Funds: These funds invest alarge portion of their corpus incompanies with mid-size marketcapitalization. These funds generallyoffer medium returns over a period oftime. These funds are classified as‡PHGLXP YRODWLOH PHGLXP ULVNmedium returns type.Small Cap Funds: These funds invest alarge portion of their corpus incompanies with small size marketcapitalization these funds generallyoffer more returns over a period oftime. These funds are classified as‡PRUH YRODWLOH PRUH, moreULVNUHWXUQV·W\SHStructure of Mutual FundThe structure of Mutual Funds in India is athree-tier one. There are three distinct entitiesinvolved in the process – the sponsor (whocreates a Mutual Fund), trustees and the assetmanagement company (which oversees thefund management). The structure of MutualFunds has come into existence due to SEBI(Securities and Exchange Board of India)Mutual Fund Regulations, 1996. Under theseregulations, a Mutual Fund is created as aPublic Trust.Large Cap Funds: These funds investa large option of their corpus incompanieswithlargemarketcapitalization. These funds generallyoffer stable and sustainable returnsover a period of time. These funds areVolume 10 Issue 3 - 2020270www.joics.org

Journal of Information and Computational ScienceISSN: 1548-7741ξξξfive years with a positive Net worthfor all the previous five years.The net worth of the sponsor in theimmediate last year has to be greaterthan the capital contribution of theAMC.The sponsor must show profits in atleast three out of five years whichincludes the last year as well.The sponsor must have at least 40%share in the net worth of the assetmanagement company.Any entity that fulfills the above criteria canbe termed as a sponsor of the Mutual Fund.2. Trust and Trustees1. The Fund SponsorThe Fund Sponsor is the first layer in thethree-tier structure of Mutual Funds in India.SEBI regulations say that a fund sponsor isany person or any entity that can set up aMutual Fund to earn money by fundmanagement. This fund management is donethrough an associate company which managesthe investment of the fund. A sponsor can beseen as the promoter of the associatecompany. A sponsor has to approach SEBI toseek permission for a setting up a MutualFund. Once SEBI agrees to the inception, aPublic Trust is formed under the Indian TrustAct, 1882 and is registered with SEBI.Trustees are appointed to manage the trust andan asset management company is createdcomplying with the Companies Act, 1956.3. Asset Management CompaniesThere are eligibility criteria given by SEBI forthe fund sponsor:ξThe sponsor must have experience infinancial services for a minimum ofVolume 10 Issue 3 - 2020Trust and trustees form the second layer of thestructure of Mutual Funds in India. A trust iscreated by the fund sponsor in favor of thetrustees, through a document called a trustdeed. The trust is managed by the trustees andthey are answerable to investors. They can beseen as primary guardians of fund and assets.Trustees can be formed by two ways – aTrustee Company or a Board of Trustees. Thetrustees work to monitor the activities of theMutual Fund and check its compliance withSEBI (Mutual Fund) regulations. They alsomonitor the systems, procedures, and overallworking of the asset management company.:LWKRXW WKH WUXVWHHV DSSURYDO 0& FDQfloat any scheme in the market. The trusteeshave to report to SEBI every six months aboutthe activities of the AMC.271Asset Management Companies are the thirdlayer in the structure of Mutual Funds. Theasset management company acts as the fundmanager or as an investment manager for thewww.joics.org

Journal of Information and Computational ScienceISSN: 1548-7741FINDINGS(Figure7)Interpretation:The Sharpe ratio is the measure of averagereturn earned in excess of the risk-free rate perunit of total risk .The ratio of RelianceBanking fund is high i.e,0.518 which ispositive compared to other schemes and isalso ranked 1 among performance of thescheme. High value of Sharpe indicates thatthe fund is performing well in respect to therisk associated with it.On the other hand the lowest amount ofSharpe Ratio shows that the fund is notperforming well in response to the riskinvolved herein.Volume 10 Issue 3 - 2020284All four schemes like Reliance LargeCap Fund, Reliance Banking Fund,Reliance Power and Infra Fund,Reliance Pharma Funds averagereturns were more than Nifty 50.However, when compared to RelianceConsumption fund, Nifty 50 has notgiven good average return wherein thisfund has given Negative return.When compared all schemes withNifty 50, it show the StandardDeviation of all funds are lessconsistency.Alpha is clearly denoting that the Fourfunds (Reliance Large Cap, Banking,Power and Infra, Pharma) have outerperformed than the Market Index Nifty50. But Reliance Consumption Fundhas underperformed than the MarketIndex Nifty 50.The Beta of Reliance Banking fundi.e.1.26 has more risk as compared toother schemes having moderate risk.The Average returns of RelianceBanking fund is 19.43 which givesmore return as compared to Reliancelarge cap & other sectorial funds.The Alpha of Reliance Banking fund is6.79 which indicates that the portfolioouter performed the benchmark indexby 6.79. And also compared toReliance large cap & other sectorialfunds its performance was good in themarket.www.joics.org

Journal of Information and Computational ScienceISSN: 1548-7741The Sharpe ratio is the measure ofaverage return earned in excess of therisk-free rate per unit of total risk .Theratio of Reliance Large Cap fund ishigh i.e,0.518which is positivecompared to other schemes and is alsoranked 1 among performance of thescheme. High value of Sharpeindicates that the fund is performingwell with respect to the risk associatedwith it.From this study found that RelianceBanking fund got first place based onpast performance by using Averagereturn, Alpha, Beta and Sharpe Index.SUGGESTIONSCurrently Reliance Consumption fundis falling down; investing in the sameis not suggested to the investor.The Reliance Banking fund, theaverage return is positive, standarddeviation and variance are more ascompared to index value, the beta,Sharpe Index are having positivevalues, risk associated in this fund isvery low, hence it is low risky to investin this fund is suggested to invest.The Adviser should be aware ofstandard deviation and beta values ofthe each fund. And they should adviceproducts according to investor’s goaland time constraints.Volume 10 Issue 3 - 2020285CONCLUSIONThis project report helps the investors, whenthey are in confusion whether to invest inReliance Large Cap and other RelianceSectoral Funds, in that situation investors cantake decision based on this project report.This Concludes following points as:Theprojectinvestigatestheperformance of 5 Reliance mutual fundschemes for the period from April2014 to March 2019(Five years) oftransition economy. Daily NAV ofdifferent schemes have been used tocalculate the returns from the fundschemes. Nifty 50 has been used formarket portfolio. The historicalperformance of the selected schemeswere evaluated on the basis of Sharpeindex measure whose results will beuseful for investors for taking betterinvestment decisions.Investing in Reliance Banking Fundwill be the better option for Investorswho are seeking stable Capitalappreciation with less Risk associated.This study also creates awarenessamong the investor community therebybefore choosing the Reliance mutualfund scheme, the investor shouldundergo fact sheet thoroughly and hehas to choose the best one. Investorsshould stick to their goals in anysituations.www.joics.org

Journal of Information and Computational ScienceISSN: 1548-7741BIBLIOGRAPHYAMFI. (2013). Research and information.Retrieved JULY 07, 2019, from tion/mf-historyBahl, D. (2012). Comparative analysis ofMutual Fund schemes. IRJC, 67-79.Bazaar, B. (2017, JULY 01). Mutual unds.htmlDr.Raghu.G. (2017). A Comparative Analysison Various Mutual Fund Schemes of. issn, 7385.fund, R. M. (n.d.). Retrieved July 14, 2019,from dR.Nandhini. (2017). A Study on thePerformance of Equity Mutual Funds (Withspecial reference to equity large cap and midcap mutual funds). IOSR, 67-72.Shefali.G. (2015). COMPARATIVE STUDYON PERFORMANCE EVALUATION OFSECTORAL MUTUAL FUND SCHEMESOF INDIAN COMPANIES.Vani.Kamath. (2013). Comparative Study ofMidcap Funds. IJSR, 1288-1289.Vikas.C, D. (2014). Performance Evaluationof Mutual Funds: A Study of SelectedDiversified Equity Mutual Funds in India.ICBLCSR, 82-85.AnnexureAbbreviations[The below are the Abbreviations used in theabove Report]AMC- Asset Management CompanyKalpesh.P.P, P. (2012). COMPARATIVESTUDYONPERFORMANCEEVALUATION OF MUTUAL FUNDSCHEMES. Research World, -is-mutualfund.aspx. Retrieved July 7, 2019, -is-mutualfund.aspxNAV- Net Asset ValueUTI- Unit Trust of IndiaIPO – Initial Public OfferELSS – Equity Linked Saving SchemeNSE – National Stock ExchangeMIBOR - Mumbai Inter-Bank Offered RateNimalathasan.B. (2017). Mutual FundFinancialPerformanceAnalysis:AComparative Study on Equity Diversifiedschemes and Equity Mid-Cap Schemes.Research Gate.Volume 10 Issue 3 - 2020286www.joics.org

Journal of Information and Computational ScienceISSN: 1548-7741Title of the Graphs[The bellows are the reference number andtitle of the Graphs, which have been used inthe Report]Figure 1 – Types of Mutual Funds.Figure 2- The Cyclical process of the MutualFund operation In IndiaFigure 3- Organization Structure of BelgaumReliance Mutual FundFigure 4- Showing Returns of all schemesFigure 5- Showing Beta of all schemesFigure 6- Showing Alpha of all schemesFigure 7- Showing Sharpe Index of allschemesVolume 10 Issue 3 - 2020287www.joics.org

performance of diversified large cap fund and sectoral fund in Reliance mutual fund. To compare the diversified large cap fund with sectoral fund in Reliance mutual fund Methodology: The methodology adopted was Non- Probabilistic method, Judgmental Sampling as only Large Cap fund and sectoral Mutual Fund schemes are selected for

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