VES Institute of Management

Studies & Research

SUMMER INTERNSHIP POLICY (SIP)
GUIDELINES & PROCEDURES
(Based upon AICTE Guidelines)
1
 Program MMS
MMS

Batch Year:
2021-2023

Roll No:
124

Student Name:

Ankur Ashok Phadke

Specialization:

Finance

Faculty Mentor:

Prof. Anju Motwani

Name of the Industry:

Portfolio Management Services and Mutual Fund Services

Industry Mentor:

Mrs. Shital Bane

Note: Summer Internship Project (SIP)Starts on 1st May,2022

Ends on 30th June,2022

2
 INDEX
Chapter Contents
1 INTERNSHIP & ITS IMPORTANCE
1.1 Title Page. Annexure I

2 INTERNSHIP REPORT
2.1 Introduction. 07
2.1.1 About PMS Industry. 07
2.1.2 About Mutual Fund Industry. 08
2.1.3 About Mavira Investment Service. 09

2.2 Objectives. 10

3 MONITORING & EVALUATION OF INTERNSHIP

3.1 Evaluation of PMS Industry. 11
3.2 Evaluation of Mutual Fund Industry and Concepts. 13

4 INTERNSHIP NBA OUTCOMES

4.1 Mutual Fund Analysis. 36
4.1.1 Quant Large and Mid-Cap Fund Analysis. 37
4.1.2 HDFC Money Market Fund Analysis. 43
4.1.3 Parag Parikh Flexi-Cap Fund Analysis. 46
4.2 Learning Outcomes and Mutual Fund Recommendations 52
5 Annexure
I Certificate. Annexure II
II Declaration. Annexure III

3
 ANNEXURE I

SUMMER INTERNSHIP
PROJECT (SIP)

A STUDY OF MUTUAL FUND AND ANALYSIS

Submitted in partial fulfillment for the award of the degree of Master

in Management Studies (MMS)
(AICTE)

Submitted By
ANKUR ASHOK PHADKE

(Roll No.124)

Under The Guidance of

PROF. ANJU MOTWANI

2021- 2023

VES Institute of Management Studies & Research

4
14
ANNEXURE II

Certificate

This is to certify that project titled A study on Mutual Fund and Analysis
is successfully completed by

Mr.Ankur Ashok Phadke

during the 1st Year, in partial fulfillment of the MMS recognized by AICTE for the academic year 2021
through

This project work is original and not submitted earlier for the award of any degree diploma or associate ship of any
other University / Institution

Name:

Date: (Signature of the Faculty mentor)

5
 ANNEXURE III

DECLARATION

I hereby declare that this Project submitted by me to the is a bonafide work undertaken by me and it is
not submitted to any other University or institution for the award of any degree diploma certificate or
published any time before.

Name: Ankur Ashok Phadke

Roll No: 124 (Signature of the student)

6
 Introduction

A. About Portfolio Management Service (PMS) Industry: -

a. Meaning of PMS: -

Portfolio Management Services (PMS), is investment management services offered by the Portfolio
Manager. The investment portfolio can be diversified into stocks, fixed income, and other
structured products.
b. Types of Portfolio Management Services: -
i. Active Portfolio Management: -
The active portfolio manager aims to make better returns than the overall markets i.e. to generate
Alpha
ii. Passive Portfolio Management: -
The active portfolio manager aims to make better returns than the overall markets i.e. to generate
Alpha
iii. Discretionary Portfolio Management: -
A discretionary manager is given full flexibility to make decisions for the investor. While the
individual goals, risk appetite and time-frame are taken into consideration, the manager adopts
the appropriate strategy which he thinks is the best suiting the investment policy statement.
iv. Non-Discretionary Portfolio Management: -
The non-discretionary manager is more like an advisor than a portfolio manager himself. He advises
the investor in which routes are best to take. The risks and rewards are cleared mentioned in the
advisory note while the discretion to take action is totally with the investor.

A portfolio investment with PMS is just equivalent to buying a phone having a screen protected
with the tempered glass.
Active decision making by the PMS protects the investor from such falls marginally. Given the
benefits of higher returns, diversified portfolio, risk management and customized.

7
 A. How does a PMS House Function?

1. Higher Capital Investment: -

The minimum investment is governed by SEBI and it has mandated that one must have a
minimum corpus of INR 50 lac to start investing with PMS. This makes it a bit difficult for
the investor from lower income profiles.
Not every investor shall be able to avail such premium services because of these criteria. This is one
of the biggest disadvantages of investing with a PMS house.

2. Higher Costs: -

PMS charges asset management fees as a percentage of investment amount. The asset management
fees vary between 2-2.5%. For example, if the investment amount is INR 10 lakhs then the asset
management fees charged would be around Rs.20,000 to Rs.25,000.

3. No Performance Guarantee: -

The PMS houses are a party to profits but not to losses. It is a well understood phenomenon that the
risk involved in investing into financial markets is higher and there is no guarantee for a superior
performance.

B. About Mutual Funds Industry: -

a. What is Mutual Fund: -

A mutual fund is a financial vehicle that pools assets from shareholders to invest in securities like
stocks, bonds, money market instruments, and other assets. A mutual fund's portfolio is
structured and maintained to match the investment objectives stated in its prospectus.
b. Types of Mutual Funds in India are Categorized by SEBI: -
i. Equity Funds (Min 60-65% Invest in Equity).
ii. Debt Funds (Min 60-65% Invest in Debt).

8
 iii. Hybrid Funds (Equity and Debt based on Scheme Type).
iv. Solution Oriented/Sectoral Funds.
v. Others (E.g., ETF)
c. How Mutual Fund Industry Works: -

Mutual funds are operated by professional money managers, who allocate the fund's assets and
attempt to produce capital gains or income for the fund's investors.
i. Mutual Funds Helps in Diversification in various assets classes.
ii. Mutual Funds enable to achieve Economics of Scale.
iii. Professional Management.
iv. Transperancy

C. About Mavira Investment Service: -

Mavira Investment Services is a registered investment advisory company under the (Investment Advisers)
Regulation,2013. With strong market research and market understanding Mavira designs unique and optimized
investment plans that suits customer’s needs.Mavira constantly keep updated with ongoing market trends and
numbers, to plan and modify portfolio in real time basis to ensure that client will get most out of his investments.

Services offered by MAVIRA: -

1. Portfolio Advisory Services
2. Financial Planning Services
3. Retirement Planning Services
VISION: -
To become the most credible organization for wealth creation.

MISSION: -
To provide consistent performance along with capital protection and top-quality services.

Investment Philosophy: -
Mavira’s core belief lies in building a portfolio with compounding opportunities. After conducting
fundamental research from the bottom-up approach, we identify and invest in growing companies
which enable us to identify a multibagger and create wealth for a long term.

9
 Objectives

The objective of this project is to know and understand the PMS Industry and Mutual Fund
Distribution and related services and to identify various investment opportunities based on the
various past financial performances.

The main objectives of the report are:

1) To conduct the best company in the Mutual Fund Investment Opportunities for clients for long-
term investment and short-term investment by using Fundamental and Technical Analysis.

2) To identify the perfect entry and exit points and take a position in the market and minimize the
risk.

3) Comparative Analysis of the Mutual Funds and providing clients with necessary decision making
based on goals and financial capabilities with an objective to maximize the return and minimize
the risk of Investment.

10
A. Details of Work Done:

a. Portfolio Management Services: -

➢ PMS Services have grown at 400% in last 5 Years in India.

➢ Portfolio management Services (PMS) and alternative investment fund (AIF) structures are
expected to cross ₹50 lakh crore in the next 10 years, according to a report by PMS Bazaar.

➢ As per the PMS and AIF information, analytics and comparisons platform, growth at a 20%
compounded annual growth rate (CAGR) for the next decade to see alternative investments
emerge as a powerful tool of wealth creation.

11
12
b. Mutual Fund Working: -

How much return you should consider by investment or what is the real rate of return?

The minimum real return is

Inflation + Tax

Why so that?

Because the best enemies of your Investments are inflation and tax as they eat your money and
return.

Your Investments should give you at least more than inflation and tax together. if an instrument
giving you a return more than inflation and tax is the best.

Now we will look after various financial instruments?

1) Bank Fixed Deposits

2) Commodities like Gold and Silver
3) Bonds and Company Fixed Deposits, Non-convertible Debentures (NCD), Money market
instruments
4) PPF, EPF
5) Mutual Funds
6) Shares etc.

1) Bank FD

Bank FD’s the worst investments so far. On averagely it is giving you around 5% returns and
Inflation which is around 6-7% and over and above that its charges you TDS and all. Keeping
your FDs For emergencies is a good decision but from an investor's point of view, it is worst.

2) Commodities - Gold and Sliver

As per data after the 1900s, Gold is giving you 10% in the long term which is a huge time of
horizon around 10-20 years which is one of the best investments.

3) Bonds, NCD and Money market instruments.

There are bonds and money market instruments which are issued by the government and private
entities which are Safer.

4) PPF and EPF

Public provident fund is where you have to deposit up to 1.5 lakhs which has a lock-in period.
The employee provident fund is where employee and employer contributions are in these bank
accounts.

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5) Mutual Funds

A pool of money contributed by people which is invested in equities and debts.

6) Shares

A Share is a share in the share capital of the company.

Shares and Mutual funds are the riskiest instruments because they get affected by the smallest news
in an economy.

Shares or Mutual Funds?

In shares, there and two main aspects you should consider while buying any share of the
company.
1)Quantitative Measures
2)Qualitative Measures

● Quantitive measures like revenue growth, EBITDA, PAT, its assets and liabilities, EPS, P/E
ratio, P/B ratio etc. These numerical data you have to consider while buying any stock/share.
● Qualitative measures like global policies and standards, future prospects, industry analysis,
government policies and much more.
● And over and above that who should know when to buy the share, hold it and sell it at right time.

Rather than doing this industry research how if someone who is an expert and has a handsome
experience doing research for you and managing hard-earned money on behalf. These experts
will pick financial instruments for you and give you returns as per your goal and risk appetite.
Someone is saving you a precious gift which is the time which is spent on research and hand-
picking a stock.

As Mr Warren Buffet says

“If you don’t find a way to make money while you sleep,
You will work until you die”

Every coin has two sides. Now we will see some advantages and disadvantages of Mutual Funds.

Advantages

1) Advanced Portfolio Management Services

When we buy a mutual fund, a Fund Manager is appointed to manage money who has the
expertise and experience the one who buys, holds and sell the units at right time.

2) Dividend Reinvestment
As dividend and other incomes is declared by fund reports by this income either you can reinvest
it or redeem it.
14
3) Risk reduction
As there is diversification, your risk can be distributed by the sum of money invested

4) Convenience and fair pricing

Mutual Funds are easy to invest in and easy to understand. You do not have to have a Demat
Account, pay brokerage and search for stocks.

Disadvantages

1) High expense ratio and sales charges

Sometimes mutual funds charge hefty charges on expense ratio and sales charges. Though there
are some mutual funds which have no sales charges. Fees will get reduced.

2) Management Abuse
Sometimes fund manager makes a window dressing to the AMC. It includes unnecessary
excessive trading, replacement of stocks, and selling loser stocks prior to the quarter end.

3) Tax inefficiency
Investors do not have control over capital gains.

4) Weak execution strategy

If you buy units at any time the mutual funds will be bought at the closing price.

If per se India has a population of around 140 cr. people. Out of which around 40 cr. people are
an investable population. As per the RBI report of Consumer spending outlook, around 31% of
Indians are fine with investing in Mutual funds. Out of which only 7% of the population is
investing in mutual funds. India has a great opportunity to increase its share worldwide.

If the number is doubled or quadruples, we are not enough in increasing our share. American
population is investing around 51% of the population.

15
Technical definitions you should know while investing in mutual funds: -

1) Mutual fund units: -

As a company issues its shares mutual funds issue a unit of holding a mutual fund.

2) Asset Management Company: -

Setting an AMC is the most difficult task. There are various prerequisites laid down by
the Securities Exchange Board of India (SEBI) which is a regulator or governing authority of all
AMCs in India. SEBI holds all rights to grant and dismiss AMC's license to the corporate body.
It is a large-scale business; people's hard-earned money is at stake and regulators need to ensure
it. For keeping transparency and accountability SEBI has given a setup to how should be
structure of AMC.

3) Fund Sponsor: -

It is a corporate body that applies to SEBI to set up an AMC. After an ‘In-Principal Approval’ by
SEBI sponsor has to set up a Trustee.

4) Trustee: -

After the approval, the sponsor has to register a trust and appoint a board of trustees. This board
should be independent and not associated with sponsors. The trustee keeps eye on AMC
16
 activities on account of unitholders.

5) Custodian: -

AMC appoints a custodian who holds all shares bought by AMC.

6) Registrar and Transfer Agent:-

RTA is appointed by AMC. These RTA’s secure clients and keep all records of clients as folio no.,
transferring units etc.

Example:-

Company Name Quant Mutual Fund

Sponsor Quant Capital Finance and Investments

Private Ltd.

Trustee Quant Mutual Fund

Asset Management Company Quant Money Managers Ltd.

Custodian HDFC bank Ltd.

Registrar and Transfer Agent (RTA) Karvy Fintech Private Ltd.

7) Assets Under Management (AUM): -

AUM means a market value of financial instruments held by the company.

Fund Houses (AMC) Schemes AUM held by AMC Unique Investors

44 More than 2500 37.37 lakh crores 3.32 cr. people

schemes

8) Net Asset Value (NAV): -

It is the value of each unit of a mutual fund scheme. NAV can be calculated by

Net AUM
_________________________________

Total Units issued by company

17
9) Expense ratio: -

An interest which is charged by AMC to operate activities.

10) Exit Load: -

A preclosure charge levied to the investor if the investor is opting out before 1 year. Generally,
1% exit load is levied.

11) New Fund Offer (NFO): -

NFO is the first-time raising capital from the public launched by AMC which is utilized for
buying securities.

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12) Riskometer: -

RISKOMETER is nothing but a meter which shows the risk and return relationship.
This Riskometer is compulsory to show on every scheme.

14) Open-ended and close-ended funds: -

An open-ended fund is a fund where investors can enter and exit at any point in time. whereas a
closed-ended fund has stipulated years of lock-in period an investor can exit after the lock-in
period.

15) Regular Plan: -

When an investor applies to mutual by the way of a mutual fund distributor who acts as an
intermediary between AMC and the Investor.

16) Direct Plan: -

When an investor invests in a mutual fund by applying directly to AMC it is called Direct Plan.

17) Dividend Payout: -

The fund manager buys the stock of companies. When the company distribute the dividend and
received it by a fund manager. This dividend belongs to the unitholder. After this, AMC gives an
option to unitholders whether this dividend will be distributed to unitholders or will be
reinvested in to get more units of a mutual fund.

18) Dividend Reinvestment: -

This plan receives dividends on our behalf and will be reinvested in the same fund.

19
 19) Growth Plan: -

In this plan, investors do not receive any dividend. The profits earned by that investment are
ploughed back and the ‘Compounding effect’ works well.

In most cases, there are two types of investment modes present here.

1) Lumpsum Investment: -

A one-time investment of an entire chunk of capital.

2) Systematic Investment Plan (SIP): -

An investment is made in a mutual fund at a fixed date and a fixed amount gets debited by the
bank of an investor.

3) Systematic Transfer Plan (STP): -

In STP, an investor puts a lump sum of money in debt funds and at a fixed date a fixed sum of
money is transferred to an equity mutual fund. This plan is useful for people who do not have a
fixed income or a large sum of income and they wanted to time the market.

4) Systematic Withdrawal Plan (SWP):-

In this, an investor, withdraws a fixed sum of money on a monthly, quarterly or annually basis.
The units get sold and the remaining money still is invested and the units sold are dependent
upon NAV movement.
For E.g. If an investor wants to withdraw Rs.5000 per month at that time the NAV was Rs.10
then the investor has to sell 500 units. In next month, NAV goes to Rs.20 the investor will only
sell 250 units and in next month, NAV drops to Rs.5 the investor has to sell 1000 units to meet
the requirements.

While investing, there are two categories of managing funds

1) Actively managed funds: -

Actively managed funds are where the fund manager has the flexibility to choose the investment
portfolio.

2) Passive funds: -
Passive funds invest on the basis of a specified index. Whose performance seeks to track.

20
 In 2018, SEBI has reclassified its mutual fund schemes.

Commonly, there are five types of categories of mutual funds that can be issued by AMC.
In this category, there are various sub-categories that can be offered. Here are the main
categories-

● Equity Funds
● Debt Funds
● Hybrid Funds
● Solution-oriented Funds
● Other schemes

The sub-categories are as follows

Equity Funds: - As the name suggests, this money will be invested in equities.

Debt Funds: - In this, money will get invested in bonds, commercial papers, company FDs,
money market instruments, non-convertible debentures etc.

Hybrid Funds: - These funds invest in both equities and debt as per market conditions.

Solution-oriented Funds: - In solution-oriented funds, money will be invested for some specific
goal.

Other Funds: - Mainly this includes index funds and fund of funds.

What is allocation of funds is recommended in debt and equities funds?

General Rule = 100 - Your age.

21
 If your age is let us say 30, then 30% of your money will be invested in debt funds and the
remaining which is 70% should be invested in equity funds.

But, the flaw in this rule is we are not considering our risk appetite and time period.An investor
can be conservative, balanced and aggressive. A 70-year-old person can be aggressive as he has
a risk-taking ability and a 25-year-old guy can be conservative at the same time.

Now by taking this aspect, we should allocate funds as per thinking of an investor's risk-taking
ability.

Here is the table where allocation is suggested.

Investor Type
/ Time period Next 3 years 3-7 years More than 7 years

In % Equity Debt Equity Debt Equity Debt

Conservative – 100 30-20 70-80 20 80

Balanced – 100 40-50 50-60 50 50

Aggressive – 100 50-60 40-50 80 20

Now we will see the equity funds in detail.

Before explaining the equity funds you should know some terminologies

● Market Capitalization

Formula for the market cap is

Current market price of that share(CMP) (x) Number of outstanding shares of a company.

● Index

An index measures the price performance of the basket of securities using some methodology and
metric. Eg. SENSEX, Nifty etc.

What is a classification of large-cap, mid-cap and small-cap securities?

Large-cap- 1st to 100th company in terms of market cap

Mid cap- 101st to 250th company in terms of market cap

Small cap- 250th and onwards company in terms of the market cap

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1) Equity Funds:-

1. Large-cap Fund: -

An open-ended equity scheme predominantly investing in large-cap stocks. The minimum

investment in large-cap companies shall be 80 per cent of total assets.

2. Mid-cap Fund: -

An open-ended equity scheme predominantly investing in mid-cap stocks. The minimum

investment in mid-cap companies shall be 65 per cent of total assets.

3. Small-cap Fund: -

An open-ended equity scheme predominantly investing in small-cap stocks. The minimum

investment in small-cap companies shall be 65 per cent of total assets.

4. Large & Midcap Fund: -

An open-ended equity scheme predominantly investing in large-cap and mid-cap stocks. The
minimum investment in large-cap companies shall be 35 per cent of total assets. The minimum
investment in mid-cap companies shall be 35 per cent of total assets.

23
 5. Multi-cap Fund: -

An open-ended equity scheme predominantly investing in large-cap stocks. The minimum

investment in large-cap companies shall be 25 per cent of total assets.
An open-ended equity scheme predominantly invests in large-cap stocks. The minimum
investment in mid-cap companies shall be 25 per cent of total assets.

An open-ended equity scheme predominantly invests in large-cap stocks. The minimum

investment in small-cap companies shall be 25 per cent of total assets.

6. Focused Fund: -

An open-ended equity scheme predominantly investing in a maximum of 30 stocks. The minimum

investment in equity and equity-related instruments shall be 65 per cent of total assets.

7. Dividend-Yield Fund: -

A type of equity fund where money will get invested in companies which regularly declare
dividends.

8. Value Fund: -

An open-ended equity schemes following a value investment strategy. The minimum investment
in equity and equity related instruments shall be 65 percent of total assets.

9. Sector / Thematic Fund: -

An open-ended equity schemes predominantly investing in specific sectors like a bank, power,
auto, infrastructure, steel, cement etc., The minimum investment in these sector companies shall
be 80 percent of total assets.

10. Equity Linked Saving Schemes Fund (ELSS): -

An open-ended equity-linked saving scheme with a statutory lock-in period of 3 years and tax
benefit. The minimum investment in equity and equity-related instruments shall be 80 per cent of
total assets. (In accordance with the Equity Linked saving scheme,2005 notified by the Ministry of
Finance).

11. Flexi-cap Fund: -

In this scheme, without any restriction money can be invested in equity and equity-related
instruments in large-cap, mid-cap, small-cap. This is useful for mitigating your risk.

24
2) Debt Funds :-

1. Overnight Fund: -

An open-ended debt scheme investing in overnight securities. The investment is in overnight

securities having a maturity of 1 day.

2. Liquid Fund: -

An open-ended debt scheme investing in liquid securities. The investment is in securities having a
maturity of up to 91 days only.

3. Ultra-Short Duration Fund: -

An open-ended debt scheme investing in ultra-short-term securities. The investment is in

securities having a maturity of from 3 months to 6 months only.

4. Low Duration Fund: -

An open-ended debt scheme investing in low-duration securities. The investment is in securities

having a maturity of from 6 months to 12 months only.
5. Money market Fund: -

An open-ended debt scheme investing in money market instruments. The investment is in

securities having a maturity up to 1 year only.

6. Short Duration Fund: -

25
 An open-ended debt scheme investing in short-term securities. The investment is in overnight
securities having the maturity of from 1 year to 3 years only.

7. Medium Duration Fund: -

An open-ended debt scheme investing in medium term securities. The investment is in securities
having a maturity of from 3 years to 4 years only.

8. Medium to Long Duration Fund: -

An open-ended debt scheme investing in medium-term securities. The investment is in overnight

securities having a maturity of from 4 years to 7 years only.

9. Long Duration Fund: -

An open-ended debt scheme investing in long-term securities. The investment is in overnight

securities having a maturity of greater than 7 years only.

10. Dynamic Fund: -

This fund is across the debt securities.

11. Corporate Bond Fund: -

An open-ended debt funds scheme predominantly investing in AA+ and above rated corporate
bonds. The minimum investment in corporate bonds shall be 80 per cent of total assets.

12. Credit Risk Fund: -

An open-ended debt funds scheme predominantly investing in below AA+ and above rated
corporate bonds. The minimum investment in corporate bonds shall be 65 percent of total assets.

13. Banking and PSU Fund: -

An open-ended debt funds scheme predominantly investing in banks, PSU ,FI and Municiple
bonds. The minimum investment in bonds shall be 80 percent of total assets.

14. Glit Fund: -

An open-ended debt funds scheme predominantly investing in government securities. The

minimum investment in securities shall be 80 percent of total assets.

15. Glit Fund with 10-year constant duration Fund :-

An open-ended debt funds scheme predominantly investing in government securities having a

maturity of 10 years. The minimum investment in securities shall be 80 per cent of total assets.

16. Floater Fund: -

26
 An open-ended debt funds scheme predominantly investing in securities having a floating rate of
return. The minimum investment in securities shall be 65 per cent of total assets.

3) Hybrid Funds :-

1. Conservative Hybrid Fund: -

An open-ended hybrid scheme investing predominantly in debt instruments. Around 75-90 percent
is invested in debt and 10-25 percent is invested in equities of total assets.

2. Balanced Hybrid or Aggressive Hybrid Fund: -

a. Balanced Hybrid: -
An open-ended hybrid scheme investing predominantly in equity and debt instruments.
Around 40-60 percent is invested in debt and 40-60 per cent is invested in equities of total
assets.
b. Aggressive Hybrid: -
An open-ended hybrid scheme investing predominantly in equity instruments. Around 65-80
percent is invested in debt and 20-35 per cent is invested in equities of total assets.

3. Balanced Advantage Fund: -

An open-ended hybrid scheme investing both instruments dynamically.

4. Multi-asset Allocation Fund: -

An open-ended scheme which invests in at least three asset classes and investment should be at
least 10 per cent of total assets.

5. Arbitrage Fund: -
An open-ended scheme investing in arbitrage opportunities. An investment in equity should be at
least 65 per cent of total assets.

6. Equity Balanced Fund: -

27
 An open-ended scheme investing across securities. An investment in equity should be at least 65
per cent in equity and at least 10 per cent in debt securities.

4) Solution-oriented Funds: -

1. Retirement Fund: -

An open-ended solution-oriented scheme has a lock-in period of 5 years or till retirement age.

2. Children’s Fund: -

An open-ended solution-oriented scheme has a lock-in period of 5 years or till the child attain the
age of majority.

5) Other Schemes :-
1. Index / ETF Fund: -

An open-ended scheme replicating tracking a specific index and investing in these index securities

2. Fund of Fund: -
An open-ended scheme where money will get invested in various mutual fund schemes.

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- Comparison Between Funds: -

Now we know, all of the above are the sub-types of the classes of mutual funds.If you observe
neatly basically there are only two types of main funds. Equity and Debt.

1. How do we compare between two peer funds?

2. Are there any parameters to compare?

3. Are there any techniques to compare?

While comparing these fund, you should compare funds returns for 3-years and 5-years rolling
returns because 1-2 years and 5-7 years rolling returns will be short and long duration.

While comparing for equity and debt funds, there are various different parameters.

29
Equity Fund: -

Mostly in comparison, equity fund NIFTY and SENSEX is used.

30
Fund Name- Canara Robeco Emerging Equities Direct Growth (3-Years)

1. Returns: -

As we know everyone is investing here for getting higher returns. These returns were always been
compared with various types of subcategories of index.
e.g.
Here we can see Canara Roberco equity large and mid-cap fund is compared with S & P BSE 200
trailing returns. If we see 3-years returns it is more than category and index returns.

2. Sharpe Ratio: -

It means excess returns over and above of the risk-free instrument such as G-secs, T-bills but not
Bank FD’s because bank can file a bankruptcy notice.

Its formula is

31
 Return earned by fund - Returns earned by risk-free instrument
___________________________________________

Standard Deviation

Standard deviation is for every unit of risk that you take for getting these much returns

Now you can understand lower the standard deviation, higher the Sharpe ratio is and vise versa.

As you can see in the above fund, the S.D is 21.91 which is lower than the index, therefore Sharpe
ratio
of that fund is higher.

3. Alpha: -

Alpha is the excess return generated by the fund over and above the market scenario.Whatever the
market rate earns it is what it is, but the skill is how much the fund manager is performing with the
market scenario.
In short, Alpha indicates higher the risk higher the return.

In the above you can see above the alpha is 3.64 which is far lower than the index. Which can be
good or bad either time. If the market is bullish then it's bad and vice versa.

4. Beta: -

Beta is basically calculated because it gives a risk and return measure.

Beta means how much a fund behaves whethe n market goes up or down the when market moves by
point.
It means the lower the Beta better it is.

In the above you can see beta of fund is 0.96 which is lower than index which is better.

5. Capture Ratio: -

Capture ratio means how the fund is taking advantage of the market scenario which can be good or
bad as well.

Mainly this is the skill of the Fund Manager.

There are two types of capture ratio is as follows

1) Upside: -
Upside means how the fund is performing when the index goes up by 100 points.
Higher the upside better it is.

In the above fund, when the index moves up by 100 points the fund is moving up by 104 points
which is great.

32
2) Downside: -
Downside ratio means how much the fund is performing when the index goes up by 100 points.
Lower the downside is better it is.

In above fund, when index moves down by 100 points the fund is moving by 90 points which far
better than category numbers.

6. Maximum Drawdown: -

Maximum drawdown is a percentage where when the market dips down how much the fund is
falling.
Lower the fall is what is better than this.

As you can see in the above fund when the index is dipping to 28.57% the fund only falls to 25.66%
which is good compared.

7. Sortino: -

Sortino is where your downside risk is taken in replacement of S.D. in Sharpe ratio.
Its formula is

Return earned by fund - Returns earned by risk-free instrument

____________________________________________________
Drawdown Risk

Other than these Quantitive measures there are various qualitative measures should be taken into
consideration while selecting an equity fund like AMC Financials, who the Fund Manager his
history,background, his past data, his experience etc.

33
Measurement Tools to Study Debt Fund: -

While comparing debt funds, there are various ratios. We should compare returns with index.

CRISIL has given us indexes which can be taken into comparison for risk and returns.

34
1. Average Maturity: -

Average maturity means after how many years your fund will free your money to you. In short, for
how much time interval your money will be locked in. This measure is useful to return that the fund
is giving me over and above the risk-free instrument.

2. Yield to Maturity (YTM): -

It means how much return you would get if you held that bond till maturity.

Eg. Now if you invest in bond say Rs.5000 at the coupon rate of 4% p.a. Which is
Rs.200 p.a. After a month, market drops down, your bond price which can be traded is increased it
becomes Rs.5500 eventhough price goes up the interest remains the same then yield will be Rs.200 /
Rs.5500 which is 3.6% approx. which reduces YTM that means at the time of maturity you will only
get 3.6% return while buying and vise versa.

It means there is an inverse relationship between YTM and bond price.

NOTE: -
Bonds can be traded in markets like shares does. Bonds prices may go down or up depending upon
demand and supply relationship and further interpretation of market scenario of interest rates.

3. Impact of Interest on Yield: -

It means how bond price fluctuates with the change in interest rates.

If interest rates in market goes up and your bond has lower interest rates than market the bond price
goes down so that effective yield is goes up.

If interest rates in market goes down and your bond interest rate is higher than market interest rate
then the price of the bond goes up and effective yield is goes down.

4. Macaulay Duration :-

It means how much duration it takes to the bond for returning your money invested.
Lower the duration is better it is.

5. Modified Duration :-

Modified duration is relationship between NAV of fund with market interest rates.

It means if modified duration of fund is 4 years and in future the market interest rates goes up by 1%
then the NAV of the fund will fall by 4% and vise versa.

6. Credit Quality :-

As per the SEBI guidelines, every fund should posses a credit rating.
35
In debt fund scenario, is the fund have that much solvency of repaying back that money which we are
going to invest?
There are some credit rating agencies which gives us rating.

MUTUAL FUND ANALYSIS

For the purpose of Study and calculating return we have taken example of Rs.10,000 per month
SIP investment in all the categorize of Investments.

For the Purpose of report, I have studied following Mutual Fund Schemes.

1. Quant Large & Mid cap Fund (In Equity Category)

2. Parag Parekh Flexi-Cap Fund (In Hybrid Category)

3. HDFC Money Market Fund (In Debt Category)

36
 Quant Large & Mid Cap Fund

➢ Investment Objective: -
The scheme seeks to provide capital appreciation by
investing in a portfolio of Large and Midcap companies

➢ Fund Manager: -
Mr. Ankit A Pande, he has done CFA and MBA
Prior to joining Quant Mutual Funds he has worked with
Infosys Finacle. Began his career in equity research in
2011.

➢ Assets Under Management: -

₹ 8,788 Crs.

➢ Corporate Office: -
6th Floor, Sea Breeze Building, Appa Saheb Marathe
Marg, Prabhadevi, Mumbai, 400025`

About Quant Large and Mid Cap Fund

Quant Large and Mid-Cap Fund Direct-Growth is a Large & MidCap mutual fund scheme from
Quant Mutual Fund. This fund has been in existence for 9 yrs 6 m, having been launched on
01/01/2013.

Quant Large and Mid-Cap Fund Direct-Growth has ₹136 Crores worth of assets under management
(AUM) as on 30/06/2022 and is small fund of its category. The fund has an expense ratio of 0.56%,
which is less than what most other Large & Midcap funds charge.
37
Quant Large and Mid-Cap Fund Direct-Growth returns of last 1-year are 11.68%. Since launch, it
has delivered 17.51% average annual returns. The fund has doubled the money invested in it every
3 yrs.
Quant Large & Mid Cap Fund Detailed Analysis: -

➢ Standard Deviation: -
Is a measure of Risk, which from the above data we can see this fund has more @21.04 compared
to Industry average of 18.15
➢ Beta: -
Is a measure of Volatility, on analysis we can see that even though the fund is a risky one but was
able to mainatin beta at 0.83 which is close to category average as well.
➢ Alpha: -
It defines in simple terms an extra return which the fund manager was able to generate than the
Index or standard followed by general market and from the data we can clearly see that this fund
is able to generate awesome aplha of 7.69 % which is way more than category average as well.
➢ Sortino and Sharpe Ratio: -
Measures Risk Adjusted Return of Fund which has also outperformed the category average.
➢ Expenses Ratio: -
It is the charges which the AMC Charges to the investor for handling the investment. Expenses Ratio
of 0.56% is reasonably low, as per SEBI it cannot exceed 2.5%, but when comparing the fund
ratio with SEBI it is low.

38
 Asset Allocation and Top Stocks Holding of Fund

➢ Sectoral Allocation: -
o Service Sector Allocation forms major part of Fund @19.63%
o Finance Sector is another major Investment allocation @17.57%
o Consumer and Materials forms approx 10-11% fund allocation.

➢ Allocation by Market Cap: -

As the fund major investment is Large and Mid Cap funds so we can see from fund allocation
data.
o Large Cap Companies form major portion @60.6%
o Mid Cap Companies forms the balance portion @38.85%
o Balance is Cash Holding to meet working capital needs.
➢ Top Holdings of this Fund
o Ambuja Cement Ltd---> 6.15%
o ITC Ltd---> 6.02%
o Indian Hotels Ltd--->5.12%
o Patanjali Foods Ltd--->4.85%
o State Bank of India--->3.12%
39
 Historical Trend in Sector Stocks Holding in last 6 months

➢ In last 6-month time frame we can see that the Fund has gradually decrease its exposure in Service
sector which was 30.25% inDec,21 has now came to 19.63% as on May,22.

➢ On the contrary Fund has increase its holding in Finance and Material and Automobile Sector.

o Finance Sector allocation raised from 10.04% to 17.57%

o Material Sector allocation raised from 0% to 10.8%
o Automobile Sector allocation raised from 1.89% to 5.32%

40
Trailing Return of Fund over a period of various Time 6 Months Frame

➢ Trailing Return are the returns generated over a given period of time i.e., yield to date maturity
and is considered as an important measure to calculate mutual fund performance.

➢ From the above data we can see that this fund has consistently outperformed one year, 3 years, 5
years and 7 years trailing return when compared to category average.

➢ As the fund has completed only 9 years of existence due to which we where not able to identify 10
years and 15 years return data.

41
Example of SIP of Rs.10,000 invested per month for 5 years calculation.

➢ The SIP Calculation was done with of Rs.10,000/- SIP per month in this fund with 5-year time
Frame which is compounded @18.12% CAGR and can reach Rs.9.43 lakhs if the historical rate
prevails in future.

➢ Mutual Fund is one of the best investment avenues as when compared with FD and Gold Mutual
Category Average as well as this fund have outperformed, this shows the importance of Mutual
Fud long term investments.

42
 HDFC Money Market Fund

➢ Investment Objective: -
The scheme seeks to generate income / capital appreciation
by investing in money market instruments.

➢ Fund Manager: -
o Amar Kalkundrikar: -
Mr. Kalkundrikar has done B.Com, CA, CFA, and MBA
from Columbia Business School.
Prior to joining Nippon India Mutual Fund, he has worked
with HDFC Asset Management Company Limited where
he has handled multiple roles in Investment.
o Vikash Agarwal: -
Mr. Agarwal is a B.Com., CA, CFA
Prior to joining HDFC AMC, he has worked with Larsen
& Toubro Ltd.

➢ AUM: -
₹12,713 Crs

➢ Corporate Office: -
Ground Floor, Mafatlal House, H.T Parekh Marg
Backbay Reclamation Churchgate Mumbai, 400020.

About HDFC Money Market Fund

HDFC Money Market Fund Direct Plan-Growth is a Money Market mutual fund scheme from Hdfc Mutual
Fund. This fund has been in existence for 9 yrs 6 m, having been launched on 01/01/2013. HDFC Money
Market Fund Direct Plan-Growth has ₹12,713 Crores worth of assets under management (AUM) as on
30/06/2022 and is medium-sized fund of its category. The fund has an expense ratio of 0.21%, which is close
to what most other Money Market funds charge.

HDFC Money Market Fund Direct Plan-Growth returns of last 1-year are 3.92%. Since launch, it has
delivered 7.32% average annual returns.

HDFC Money Market Fund Direct Plan-Growth scheme's ability to deliver returns consistently is in-line with
most funds of its category. Its ability to control losses in a falling market is above average.

The fund's credit profile is very high indicating it has lent to borrowers whose quality is excellent. Most funds
in this category lend to better borrowers and hence the risk of default in this fund is higher than the category.
The fund's top holdings are in Reserve Bank of India, Axis Bank Ltd., National Bank For Agriculture & Rural
Development, Indusind Bank Ltd., Standard Chartered Capital Ltd..
43
Performance Ratio: -
➢ Std Dev is 0.77 which shows it is less volatile to market
This Fund
movements, as this is a debt and money market fund it is less
depend on equity market and rather depend on Interest rate
1. Std Dev: - 0.77
movements.
2. Sortino: - 7.08
3. Alpha: - 3.17 ➢ As the fund invest in RBI Instruments and Government
4. Sharpe Ratio: - 2.47 Bonds but still was able to generate an alpha of 3.17 keeping
5. Beta: - 1.51 beta to low of 1.51
6. Expenses Ratio: - 0.41%

Asset Allocation of Fund

➢ Top Debt Holdings: -

o RBI Bonds and Instruments form main part of Investment @9.14%

o Axis Bank, NABARD, Indusind Bank contributes to Investment of 5-6% each.

➢ Allocation of Instruments: -

o Investment in Commercial paper is almost 55% showing a large exposure to one category which
may make the fund more expose to default risk as Commercial papers are backed by Corporates so
chances of Dishonored are high.
o Certificate of Deposit, State Development Loan, Treasury Bills form almost 40% allocation.

44
 Investment Calculator of SIP of ₹ 10,000 for 5 Years Calculation

➢ As this is a low-risk investment the return on the same are also low compared to Equity
Instruments.
➢ Though this fund was able to generate more return than category average not marginally great but
somewhat more return of 0.13%
➢ However, this fund was not able to bit the Bank FD returns and Gold as well which out performed
heavily by almost 2.5-5% p.a. CAGR for 5-year time period.

➢ Compared to Category return with other funds this fund ranks 2nd when compared for 5 years
return calculation

45
 Parag Parikh Flexi Cap Fund
➢ Investment Objective: -

The scheme aims to achieve long-term capital

appreciation by investing primarily in equity
and equity related instruments

➢ Fund Manager: -
o CA CFA Raj Mehta
o CA CFA CFP Rajeev Thakkar
o CFA CQF BTech Rukun Tarachandani

➢ AUM: -
₹ 24,790 Crs

➢ Corporate Office: -
81/82, 8th Floor, Sakhar Bhavan, Ramnath
Goenka Marg, 230 Nariman Point Mumbai,
400021

About Parag Parekh Flexi-Cap Fund: -

Parag Parikh Flexi Cap Fund Direct-Growth is a Multi Cap mutual fund scheme from Ppfas Mutual
Fund. This fund has been in existence for 9 yrs 1 m, having been launched on 13/05/2013. Parag
Parikh Flexi Cap Fund Direct-Growth has ₹22,324 Crores worth of assets under management (AUM)
as on 30/06/2022 and is medium-sized fund of its category. The fund has an expense ratio of 0.79%,
which is close to what most other Multi Cap funds charge.

Parag Parikh Flexi Cap Fund Direct-Growth returns of last 1-year are 5.55%. Since launch, it has
delivered 18.97% average annual returns. The fund has doubled the money invested in it every 3 yrs.

Parag Parikh Flexi Cap Fund Direct-Growth scheme's ability to deliver returns consistently is in-line
with most funds of its category. Its ability to control losses in a falling market is high.

➢ The fund has the majority of its money invested in Financial, Services, Technology,
Consumer Staples, Automobile sectors. It has taken less exposure in Financial, Services sectors
compared to other funds in the category.
➢ The fund's top 5 holdings are in ITC Ltd., Bajaj Holdings & Investment Ltd., Alphabet Inc
Class A, Microsoft Corporation (US), Housing Development Finance Corp. Ltd
46
➢ As this a Flexi-Cap Fund with exposure in international stocks especially US based companies
it is ideal for investors with high-risk appetite and long-term investment goals of 5-7 years.
➢ Standard Deviation is 19.29 which is very high showing a high volatility of risk is involved.
➢ Alpha has outstandingly performed with 9.06% extra return over index followed by stock and
keeping beta volatility as low to 0.78
➢ Risk adjusted return are reasonably maintained at 1.02 Sortino and 0.94 Sharpe ratio.

47
 Asset Allocation of Fund

➢ Top Stock Holdings: -

o ITC Ltd ---> 8.96%
o Bajaj Holdings and Investments Ltd---> 7.98%
o Alphabet Inc (Parent Co. of Google) --->6.93%
o Microsoft Corporation ---> 6.68%
From the above analysis we can see that this fund has more exposure in LargeCap stocks which
we can also see from allocation as per market cap graph where almost 55.42% of funds are
allocated in this category.

➢ Allocation of Sector: -
Finance and Service sector forms major part of Fund Allocation of 51%.

48
To understand the fund holding sector wise I analyzed 6 months fund holding in different sectors and
changes in the same which can affect favorably or adversely in near future.
➢ Finance Sector holding are almost same for last 6 months.

➢ Services Sector allocation has remarkably increased from 7.74% to 20.76% in service sector and
on the other hand allocation to Technology sector has decreased from 28.02% to 12.04% showing
stocks maybe overpriced so some profit booking is done by stocks and shifted those funds to
service sector

49
➢ Trailing Return are the returns generated over a given period of time i.e., yield to date maturity
and is considered as an important measure to calculate mutual fund performance.

➢ From the above data we can see that this fund has consistently outperformed one year, 3 years, 5
years and 7 years trailing return when compared to category average.

➢ As the fund has completed only 8 years of existence due to which we were not able to identify 10
years and 15 years return data.

50
Example of SIP of Rs.10,000 invested per month for 5 years calculation.

➢ The SIP Calculation was done with of Rs.10,000/- SIP per month in this fund with 5-year time
Frame which is compounded @19.93% CAGR and can reach Rs.9.84 lakhs if the historical rate
prevails in future.

➢ Mutual Fund is one of the best investment avenues as when compared with FD and Gold Mutual
Category Average as well as this fund have outperformed, this shows the importance of Mutual
Fud long term investments.

51
LEARNING FROM MY SUMMER INTERNSHIP: -

1. In the first week of May 2022, I got to know about the structure and workings of the firm as how
the firm is, its basic structure
2. Onwards I get to know various clients and clientele profile their history, financial goal and needs
and requirements.
3. In mid-May 2022, I called various clients and asked them for additional funds required as there is
a market down scenario.
4. In that interaction, we have raised over 80 lakh rupees from clients for investments.
5. Since the end of May till mid of June my mentor has allowed me to study in-depth of Mutual Fund
and discussed with me various schemes in mutual funds.
6. After analyzing the client profile, we have suggested clients make changes in their portfolio to get
more returns on the money invested.
7. Till June end we have changed various mutual schemes of clients.

- Recommended Mutual Fund Schemes: -

1. Quant Active Fund.

2. Nippon India Small-cap Fund.

3. Mirae Asset Mid-Cap Fund.

4. UTI Flexi-cap Fund.

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