BANASTHALI UNIVERSITY

A Project Report
On
COMPARISON OF UTI MUTUAL FUNDS

Submitted in the fulfillment of the requirement of the award of

the degree of
MASTERS OF BUSINESS ADMINISTRATION
(Year 2010-2011)
Supervised By:
Submitted By:
Mr. Narendra Arya
Swati Dalal (7572)
(Senior Manager)
Vanitakumari(7585)

DECLARATION
We hereby declare that the project work entitled COMPARISON OF
UTI MUTUAL FUNDS is an authenticated work carried by me at UTI
under the guidance of Mr. Narendra arya for the award of the degree of

Master of Business Administration and this work has been submitted to

Banasthali University, Rajasthan.
The information given in this project is true to the best of my
knowledge.
Swati dalal
Vanita kumari
MBA IInd Sem

ACKNOWLEDGEMENT
Supervision and guidance of a large number of individuals have
contributed to the successful completion of this project. This project is a
humble attempt to sketch down the contribution of all those persons who
have directly or indirectly given their precious time and help along with
proper guidance for making this report in the following shape.
I am highly thankful to Mr. Narendra arya UTI, without whose
permission project of UTI would have been castle in the air. I thank Mr.
Narendra arya project coordinator who provided me with their
supervision and guidance in completing this project effectively.
Last but not the least, I pay my gratitude to my parents, family members,
friends, faculty members of Banasthali University and all members of
UTI, for their support and whole hearted co-operation in drafting this
report.

Table of content

COMPANY PROFILE

1. Introduction
The Indian mutual fund industry has come a long way since its modest
beginning in form of establishment of Unit Trust of India in 1963. Today it boasts

of large number of private sector players with total asset under management close
to Rs. 2,90,000 crore. The mutual funds offer a nice avenue for investors who do
not have the requisite knowledge, a large corpus or the time to keep tab on the
markets and take investment decisions.
However the with the large number of schemes and fund houses clamoring
for attention, the common investor faces two main challenges. Firstly, that of
choosing a scheme that is appropriate for his investment needs. Secondly,
choosing among a particular category of scheme the fund house that will perform
and beat the market. The financial services industry along with its aggressive
marketing entices people to chase performance by touting 5-star mutual funds or
emerald stocks. Magazines and television channels are not far behind in getting
experts to tell you how you should identify these gems. The common investor
generally looks at criteria such as past performance, or star fund manager for
making investment decision. However these choices may turns out to entirely
incorrect due to varied reasons such as, changing market dynamics, exit of star
fund manger etc.
In this report we attempt to answer the second dilemma of an investor that
of performance evaluation of the mutual fund house. We compare five schemes of
UTI mutual fund on various parameters and finally comment on the performance
of these schemes.

Vision
To be the most Preferred Mutual Fund.
Mission
To make uti mutual fund:
The most trusted brand, admired by all stakeholders
The largest and most efficient money manager with global presence
The best in class customer service provider
The most preferrd employer
The most innovative and best wealth creator
A socially responsible organization known for best corporate governance
Genesis

January 14, 2003 is when UTI Mutual Fund started to pave its path following the
vision of UTI Asset Management Co. Ltd. (UTIAMC), which was appointed by
UTI Trustee Co, Pvt. Ltd. for managing the schemes of UTI Mutual Fund and the
schemes transferred/migrated from the erstwhile Unit Trust of India.
UTIAMC provides professionally managed back office support for all business
services of UTI Mutual Fund in accordance with the provisions of the Investment
Management Agreement, the Trust Deed, the SEBI (Mutual Funds) Regulations
and the objectives of the schemes. State-of-the-art systems and communications
are in place to ensure a seamless flow across the various activities undertaken by
UTIMF.
Since February 3, 2004, UTIAMC is also a registered portfolio manager under the
SEBI (Portfolio Managers) Regulations, 1993 for undertaking portfolio
management services. UTIAMC also acts as the manager and marketer to
offshore funds through its 100 % subsidiary, UTI International Limited, registered
in
Guernsey,
Channel
Islands.
UTIAsset Under Management presently manages a corpus of over Rs.
69,10,509.45 lakhs as on 30th June 2011 (source:www.amfiindia.com). UTI
Mutual Fund has a track record of managing a variety of schemes catering to the
needs of every class of citizens. It has a nationwide network consisting 148 UTI
Financial Centres (UFCs) and UTI International offices in London, Dubai and
Bahrain.
UTIAMC has a well-qualified, professional fund management team, which has
been fully empowered to manage funds with greater efficiency and accountability
in the sole interest of the unit holders. The fund managers are ably supported by a
strong in-house securities research department. To ensure investors interests, a
risk management department is also in operation.
Reliability
UTIMF has consistently reset and upgraded transparency standards. All the
branches, UFCs and registrar offices are connected on a robust IT network to
ensure cost-effective quick and efficient service. All these have evolved UTIMF
to position as a dynamic, responsive, restructured, efficient and transparent entity,
fully compliant with SEBI regulations.

Investment Philosophy
UTI Mutual Funds investment philosophy is to deliver consistent and stable
returns in the medium to long term with a fairly lower volatility of fund returns
compared to the broad market. It believes in having a balanced and welldiversified portfolio for all the funds and a rigorous in-house research based
approach to all its investments. It is committed to adopt and maintain good fund
management practices and a process based investment management.

UTI Mutual Fund follows an investment approach of giving as equal an

importance to asset allocation and sectoral allocation, as is given to security
selection while managing any fund. It combines top-down and bottom-up
approaches to enable the portfolios/funds to adapt to different market conditions
so as to prevent missing an investment opportunity.
In terms of its funds performance, UTI Mutual Fund aims to consistently remain
in the top quartile vis--vis the funds in the peer group.
Mumbai
1st Feb 2003

OBJECTIVE OF THE STUDY

The objective of study is to compare utis 5 mutual funds on certain parameters

such as :

Type of investors

Objective of the investment

SIP returns provided by various mutual fund and its fund

positioning in the market.

SCOPE OF STUDY

The scope of the study is to promote and sell the funds of uti mutual funds to the
customers of the banks so that they can be awared of investing money in SIPs of
mutual fund.
We have noted that similar schemes will generally have similar investment
objectives, risk-return grade, entry exit loads and lock-in periods. However, we
observe that even when these similar schemes operate in same environment, with
same constraints there is a marked difference in there performance. We evaluate
the absolute as well as relative performance of the schemes based on different
measure stated above

MUTUAL FUNDS
Mutual funds are investment companies that pool money from investors at large and offer to sell
and buy back its shares on a continuous basis and use the capital thus raised to invest in
securities of different companies. This article helps you to know in depth on: Is it possible to
diversify investment if invested in mutual funds? Find more on the working of mutual fund
Know more about the legal aspects in relation to the mutual funds At the beginning of this
millennium, mutual funds out numbered all the listed securities in New York Stock Exchange.
Mutual funds have an upper hand in terms of diversity and liquidity at lower cost in comparison
to bonds and stocks. The popularity of mutual funds may be relatively new but not their origin
which dates back to 18th century. Holland saw the origination of mutual funds in 1774 as
investment trusts before spreading to Anglo-Saxon countries in its current form by 1868. We will

discuss now as to what are mutual funds before going on to seeing the advantages of mutual
funds. Mutual funds are investment companies that pool money from investors at large and offer
to sell and buy back its shares on a continuous basis and use the capital thus raised to invest in
securities of different companies. The stocks these mutual funds have are very fluid and are used
for buying or redeeming and/or selling shares at a net asset value. Mutual funds posses shares of
several companies and receive dividends in lieu of them and the earnings are distributed among
the share holders. A Brief of How Mutual Funds Work Mutual funds can be either or both of
open ended and closed ended investment companies depending on their fund management
pattern. An open-end fund offers to sell its shares (units) continuously to investors either in retail
or in bulk without a limit on the number as opposed to a closed-end fund. Closed end funds have
limited number of shares. Mutual funds have diversified investments spread in calculated
proportions amongst securities of various economic sectors. Mutual funds get their earnings in
two ways. First is the most organic way, which is the dividend they get on the securities they
hold. Second is by the redemption of their shares by investors will be at a discount to the current
NAVs (net asset values). Are Mutual Funds Risk Free and What are the Advantages? One must
not forget the fundamentals of investment that no investment is insulated from risk. Then it
becomes interesting to answer why mutual funds are so popular. To begin with, we can say
mutual funds are relatively risk free in the way they invest and manage the funds. The investment
from the pool is well diversified across securities and shares from various sectors. The
fundamental understanding behind this is not all corporations and sectors fail to perform at a
time. And in the event of a security of a corporation or a whole sector doing badly then the
possible losses from that would be balanced by the returns from other shares. This logic has seen
the mutual funds to be perceived as risk free investments in the market. Yes, this is not entirely
untrue if one takes a look at performances of various mutual funds. This relative freedom from
risk is in addition to a couple of advantages mutual funds carry with them. So, if you are a retail
investor and planning an investment in securities, you will certainly want to consider the
advantages of investing in mutual funds. Lowest per unit investment in almost all the cases Your
investment will be diversified Your investment will be managed by professional money
managers
About Mutual Fund

How does a Mutual fund work?

A mutual fund is a collection of stocks, bonds, or other securities owned by a group of investors
and managed by a professional investment company. For an individual investor to have a
diversified portfolio is difficult. But he can approach to such company and can invest into shares.
Mutual funds have become very popular since they make individual investors to invest in equity
and debt securities easy. When investors invest a particular amount in mutual funds, he becomes
the unit holder of corresponding units. In turn, mutual funds invest unit holders money in stocks,
bonds or other securities that earn interest or dividend. This money is distributed to unit holders.
If the fund gets money by selling some stocks at higher price the unit holders also are liable to
get capital gains. A mutual fund is quite simply a collection of stocks, bonds, or other securities
owned by a group of investors and managed by a professional investment company. Thus the
mutual funds are not the depositing instrument that has guarantee of getting certain amount but it
is like any other securities where the investor can have capital gains or loss.
Advantages of Mutual Fund
Professional Management The primary advantage of funds (at least theoretically) is the
professional management of your money. Investors purchase funds because they do not have the
time or the expertise to manage their own portfolio. A mutual fund is a relatively inexpensive
way for a small investor to get a full-time manager to make and monitor investments.
Diversification - By owning shares in a mutual fund instead of owning individual stocks or
bonds, your risk is spread out. The idea behind diversification is to invest in a large number of
assets so that a loss in any particular investment is minimized by gains in others. In other words,
the more stocks and bonds you own, the less any one of them can hurt you (think about Enron).
Large mutual funds typically own hundreds of different stocks in many different industries. It
wouldnt be possible for an investor to build this kind of a portfolio with a small amount of
money.
Economies of Scale - Because a mutual fund buys and sells large amounts of securities at a time,
its transaction costs are lower than you as an individual would pay.

Liquidity - Just like an individual stock, a mutual fund allows you to request that your shares be
converted into cash at any time.
Simplicity - Buying a mutual fund is easy! Pretty well any bank has its own line of mutual
funds, and the minimum investment is small. Most companies also have automatic purchase
plans whereby as little as Rs 1000 can be invested on a monthly basis.
History of Mutual Fund in India
Pioneer of mutual fund is UTI in 1963.
Actual growth started in 1987.
The dramatic improvement through quality wise and quantity wise.
Main reason for its poor growth is new concept in the country.
Large sections of Indian investor are yet to be intellectual with this concept.
Hence the it is prime responsibility of all Mutual Fund companies , to make the product
correctly abreast of selling.
There are four 4 phases according to the development of sector
First Phase 1964-1987
1964 to 1987: Unit Trust of India (UTI) was established on 1963 by an Act of
Parliament.
It was set up by the Reserve Bank of India and functioned under the Regulatory and
administrative control of the Reserve Bank of India.
In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India
(IDBI) took over the regulatory and administrative control in place of RBI.
The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had
Rs.6,700 cores of asset
Second Phase 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non- UTI, public sector mutual funds set up by public sector
banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation
of India (GIC).
SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed
by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian
Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct
92).
LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in
December 1990.
At the end of 1993, the mutual fund industry had assets under management of Rs.47,004
crores.
Third Phase 1993-2003 (Entry of Private Sector Funds)
With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the
year in which the first Mutual Fund Regulations came into being, under which all mutual
funds, except UTI were to be registered and governed.
The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first
private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive
and revised Mutual Fund Regulations in 1996. The industry now functions under the
SEBI (Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign mutual funds
setting up funds in India and also the industry has witnessed several mergers and
acquisitions.
As at the end of January 2003, there were 33 mutual funds with total assets of Rs.
1,21,805 crores.
The Unit Trust of India with Rs.44,541 crores of assets under management was way
ahead of other mutual funds.
Fourth Phase since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust
of India with assets under management of Rs.29,835 crores as at the end of January 2003,
representing broadly, the assets of US 64 scheme, assured return and certain other
schemes.
The Specified Undertaking of Unit Trust of India, functioning under an administrator and
under the rules framed by Government of India and does not come under the purview of
the Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations
With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000
crores of assets under management and with the setting up of a UTI Mutual Fund,
conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place
among different private sector funds, the mutual fund industry has entered its current
phase of consolidation and growth. The graph indicates the growth of assets over the
years.

GROWTH IN ASSETS UNDER MANAGEMENT

Regulations
Mutual Funds in India are governed by the SEBI (Mutual Fund) Regulations 1996as amended
from time to time.
Organization of Mutual Fund

The structure consists of

Sponsor
Sponsor is the person who acting alone or in combination with another body corporate
establishes a mutual fund. Sponsor must contribute at least 40% of the net worth of the
Investment Managed and meet the eligibility criteria prescribed under the Securities and
Exchange Board of India (Mutual Funds) Regulations, 1996.The Sponsor is not responsible or

liable for any loss or shortfall resulting from the operation of the Schemes beyond the initial
contribution made by it towards setting up of the Mutual Fund.
Trust
The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian Trusts
Act, 1882 by the Sponsor. The trust deed is registered under the Indian Registration Act, 1908.
Trustee
Trustee is usually a company (corporate body) or a Board of Trustees (body of individuals). The
main responsibility of the Trustee is to safeguard the interest of the unit holders and inter alias
ensure that the AMC functions in the interest of investors and in accordance with the Securities
and Exchange Board of India (Mutual Funds) Regulations, 1996, the provisions of the Trust
Deed and the Offer Documents of the respective Schemes. At least 2/3rd directors of the Trustee
are independent directors who are not associated with the Sponsor in any manner.
Asset Management Company (AMC)
The Trustee as the Investment Manager of the Mutual Fund appoints the AMC. The AMC is
required to be approved by the Securities and Exchange Board of India (SEBI) to act as an asset
management company of the Mutual Fund. Atlas 50% of the directors of the AMC is an
independent director who is not associated with the Sponsor in any manner. The AMC must have
a net worth of at least 10 crore at all times.
Registrar and Transfer Agent
The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent to the
Mutual Fund. The Registrar processes the application form; redemption requests and dispatches
account statements to the unit holders. The Registrar and Transfer agent also handles
communications with investors and updates investor records.
Types of Mutual Fund
Equity Oriented Schemes These schemes, also commonly called Growth Schemes, seek to
invest a majority of their funds in equities and a small portion in money market instruments.
Such schemes have the potential to deliver superior returns over the long term. However,
because they invest in equities, these schemes are exposed to fluctuations in value especially in
the short term.
Equity schemes are hence not suitable for investors seeking regular income or needing to use
their investments in the short-term. They are ideal for investors who have a long-term investment
horizon. The NAV prices of equity fund fluctuates with market value of the underlying stock
which are influenced by external factors such as social, political as well as economic.
Index Schemes
Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P
NSE 50 index (Nifty), etc These schemes invest in the securities in the same weight age
comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or
fall in the index, though not exactly by the same percentage due to some factors known as
tracking error in technical terms. Necessary disclosures in this regard are made in the offer
document of the mutual fund scheme. There are also exchange traded index funds launched by
the mutual funds, which are traded on the stock exchanges.
Sector Specific Schemes
These are the funds/schemes, which invest in the securities of only those sectors or industries as

specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer Goods
(FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of
the respective sectors/industries. While these funds may give higher returns, they are more risky
compared to diversified funds. Investors need to keep a watch on the performance of those
sectors/industries and must exit at an appropriate time. They may also seek advice of an expert.
Tax Saving Schemes
These schemes offer tax rebates to the investors under specific provisions of the Income Tax Act,
1961 as the Government offers tax incentives for investment in specified avenues. e.g. Equity
Linked Savings Schemes (ELSS). Pension schemes launched by the mutual funds also offer tax
benefits. These schemes are growth oriented and invest pre-dominantly in equities. Their growth
opportunities and risks associated are like any equity-oriented scheme.
Income/Debt Oriented Scheme
The aim of income funds is to provide regular and steady income to investors. Such schemes
generally invest in fixed income securities such as bonds, corporate debentures, Government
securities and money market instruments. Such funds are less risky compared to equity schemes.
These funds are not affected because of fluctuations in equity markets. However, opportunities of
capital appreciation are also limited in such funds. The NAVs of such funds are affected because
of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely
to increase in the short run and vice versa. However, long term investors may not bother about
these fluctuations.
Hybrid/Balanced Schemes
These schemes are commonly known as balanced schemes. These schemes invest in both
equities as well as debt. By investing in a mix of this nature, balanced schemes seek to attain the
objective of income and moderate capital appreciation and are ideal for investors with a
conservative, long-term orientation. Balanced Fund and Gift Fund are examples of hybrid
schemes.
Money Market/Liquid Schemes
These funds are also income funds and their aim is to provide easy liquidity, preservation of
capital and moderate income. These schemes invest exclusively in safer short-term instruments
such as treasury bills, certificates of deposit, commercial paper and inter-bank call money,
government securities, etc. Returns on these schemes fluctuate much less compared to other
funds. These funds are appropriate for corporate and individual investors as a means to park their
surplus funds for short periods.
Gilt Schemes
These funds invest exclusively in government securities. Government securities have no default
risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic
factors as are the case with income or debt oriented schemes.
Arbitrage Fund
Arbitrage is one of the most effective ways to insulate against market volatility. An arbitrage
fund buys equities in the cash market and simultaneously sells in the futures market, thus
ensuring market neutrality for the investment. In other words, it is a unique asset class by itself
where returns are generated by capturing the pricing differential between the cash and the futures
markets. It is also termed as a market-neutral fund where the returns are not going to be impacted
by volatility in the market.

For any arbitrage fund, the following market conditions are beneficial a bullish market and a
volatile market. While the fund performs very well in bullish markets, a volatile market gives it
opportunities for early exit, thus enhancing the overall yield of the portfolio. However, a
prolonged bear phase is not an ideal situation for this kind of product.
Difference between Arbitrage Fund & Income Fund both in terms of risk and returns In terms of
returns, an arbitrage fund is better than an income product. An income product has a fixed yieldto-maturity while in an arbitrage product, the yields are better due to lower cost of carry and are
usually in the range of 10-14%. Secondly, the risk parameters are similar or lower than an
income product. An arbitrage fund does not carry any credit rating risk and interest rate risk,
while the returns can be much higher than an income product. Added to this, a mutual fund
arbitrage product enjoys all the tax benefits enjoyed by mutual fund products Derivatives in India
have more often been used for speculation purposes than for hedging and arbitrage. What are
your views on this? Both in India and the world over, derivatives have been widely used as a
leverage product but as the trends are changing and the investors are maturing, the other tools
like hedging and risk free arbitrage strategies are also being widely used.
Gold Exchange-Traded Schemes
Exchange-traded funds (ETFs) are mutual fund schemes that are listed and traded on exchanges
like stocks. ETFs trading value is based on the net asset value (NAV) of the assets it represents.
Generally, ETFs invest in a basket of stocks and try to replicate a stock market index such as the
S&P CNX Nifty or BSE Sensex, a market sector such as energy or technology, or a commodity
such as gold or petroleum. Recently, the Securities and Exchange Board of India (SEBI)
amended its regulations and allowed mutual funds launch gold exchange-traded funds (GETFs)
in India. Two mutual funds, UTI mutual fund and Benchmark Mutual Fund, has been launched.
These funds got listed on the National Stock Exchange (NSE). A gold-exchange traded fund unit
is like a mutual fund unit backed by gold as the underlying asset and would be held mostly in
demat form. An investor would get a securities certificate issued by the mutual fund running the
Gold-ETF defining the ownership of a particular amount of gold. GETFs are designed to offer
investors a means of participating in the gold bullion market without the necessity of taking
physical delivery of gold, and to buy and sell through trading of a security on a stock exchange.
With gold being one of the important asset classes, GETFs will provide a better, simpler and
affordable method of investing as compared to other investment methods like bullion, gold coins,
gold futures, or jewelry.
Maturity Plans (FMPs)
Safe, predictable and better post-tax returns than bank FDs Rising interest rates not only mean
rising EMIs but also offer an opportunity to earn higher returns. Debt schemes are now offering
attractive returns with short-term rates in the region of 8-10%. Call money rates have been
moving higher to about 7.5-8% due to tight liquidity conditions. With the RBI deciding to raise
the cash reserve ratio (CRR), liquidity conditions have worsened. Tightness in the money
markets is expected to continue till the end of the current financial year and investors can
consider investing in short term options like FMPs or floating rate schemes. Fixed maturity
plans, or FMPs as they are popularly called, are close-ended funds with a fixed tenure and invest
in a portfolio of debt products whose maturity coincides with the maturity of the product.
The primary objective of a FMP is to generate income while protecting the capital by investing
in a portfolio of debt and money market securities. The tenure can be of different maturities,

ranging from one month to five years. FMPs can be compared to fixed deposits of a bank. While
a fixed deposit offers a guaranteed return, returns in FMPs are only indicative. Typically, the
fund house fixes a target amount for a scheme, which it ties up informally with borrowers
before the scheme opens. That way it knows the interest rate it will earn on its investments,
providing the indicative return to investors.
Monthly Income Plans
Monthly income plans, or MIPs, as they are more popularly known, are a category of mutual
funds that invest mainly in debt instruments. Only about 10-20-% of the assets are allocated to
equity stocks. But the very name monthly income plan is a misnomer, as these funds do not
guarantee a monthly income. Like any other fund, the returns are market-driven. Though many
fund houses strive to declare a monthly dividend, they have no such obligation. MIPs are
launched with the objective of giving a monthly income to investors, but the periodicity depends
upon the option chosen by the investor. These are generally monthly, quarterly, half-yearly and
annual options. A growth option is also available, where the investors do not receive regular
dividends, but gains in the form of capital appreciation.
Mutual Fund

Category

3 Year Return

IDFC Premier Equity

Equity

20.92 percent

ING Dividend Yield

Equity

20.36 percent

Reliance Regular Savings Equity Equity

19.58 percent

Birla Sun Life Dividend

Equity

18.72 percent

UTI Dividend Yield

Equity

18.68 percent

ICICI Prudential Fund

Equity

17.34 percent

HDFC Top 200

Diversified 17.16 percent

Reliance Regular

Hybrid

20.14 percent

HDFC Prudence

Hybrid

16.24 percent

2. Different Mutual fund Schemes

There are currently wide varieties of mutual funds schemes available in Indian markets these can
be classified on following basis,
1. Money Market(Liquid funds)
2. Equity
a. Strategy
a.i.

Aggressive growth

a.ii.

Growth

a.iii.

Value

a.iv.

Blend

a.v.

Growth and income

b. By size
b.i.

Large caps

b.ii.

Midcaps

b.iii.

Small caps

c. Index
d. International
d.i.

Global

d.ii.

Us

d.iii.

Country specific

d.iv.

Emerging markets

e. Sector funds
3. Bond
a. Municipal
b. Corporate
c. Mortgage-backed
d. GILT

4. Floating rate funds

a. Short-term
b. Long-term
5. Equity Linked Saving Schemes (ELSS)
6. Open-ended and close ended
Moreover, the finance minister Mr. P Chidambaram in his Union budget of 2007-08, proposed
the Indian mutual fund industry to play bigger part in infrastructure development in India. This

mean they can now directly invest into infrastructure project by launching dedicated
infrastructure development funds.
3. Some Key terms
A. Open Ended Scheme- A type of mutual fund where there are no restrictions on the
amount of shares the fund will issue. If demand is high enough, the fund will continue to
issue shares no matter how many investors there are. Most of the mutual funds available
in the marketplace are open-end funds. Open-end funds are generally managed actively
and are priced according to their net asset value (NAV).
B. Close Ended- A fund that has a fixed amount of shares outstanding, unlike mutual funds
which are open-ended (allow new shares to be purchased). Closed-end funds behave
more like stocks because they trade on an exchange and the price is determined by
market demand after an initial IPO process. closed-end funds can trade below their net
asset value or above it.
C. Net Asset Value- The net asset value (NAV) of a mutual fund is simply its assets minus
its liabilities. In other words, NAV equals the fund's worth. However NAV listed here are
on per unit basis i.e. total NAV of mutual fund divided by the number of units issued.
D. Entry/Exit Load - Entry load is the commission that an investor has to pay while
purchasing units of a mutual fund. This is a certain percentage that the mutual fund
charges to meet its expenses. Certain funds have Exit Load which means a similar kind of
commission but its charged when the investor exits the scheme.
E. Standard deviation: It tells us how much the return on the fund is deviating from the
expected normal returns.

F. Alpha Ratio: It tells us how the mutual fund has beaten it index. If it is greater than 0,
then we say it has a positive alpha. The greater the number, the greater the outperformance.
G. Beta: It tells us how the fund would respond to swings in the market. If the beta is more
than 1, then the funds swings will be greater than the market swings and vice versa.
H. Sharpe Ratio: It tells us whether the returns of a portfolio are due to smart investment
decisions or due to excess risk. This measurement is very useful because although one
mutual fund can give higher returns than its peers, it is only a good investment if the
higher returns do not come with too much additional risk. The greater a portfolio's Sharpe
ratio, the better is its risk-adjusted performance.
I. Treynor Ratio: It is similar to the Sharpe ratio. Instead of comparing the fund's riskadjusted performance to the risk-free return, it compares the fund's risk adjusted
performance of the relative index.
J. Large cap funds : Large cap funds are those mutual funds, which look for capital
appreciation by investing primarily in stocks of large blue chip companies* that
have more potential of earning growth and higher profit
K. Small cap funds : Small cap mutual funds are essentially stock funds devised at
maximizing returns or growth. The term small cap refers to the capitalization of a
corporation in the stock market which is any where between $ 300 and $ 2 billion.
L. Mid cap funds : The core strategy of mid-cap related funds is to identify and invest in
companies that have just embarked on the growth curve
Comparison Criterias
1. General Parameters
a. Investment Objective

b. Risk and Return Grade

c. Corpus
d. Current NAV
e. Entry/Exit Load
f. Top Current Holding (sectors and stocks) and changes
g. Other Specific information
2. Performance based comparison
a. Absolute returns
b. Performance w.r.t. standard benchmark
c. Std dev and Beta
d. Sharpe ratio (Ri-Rf / Std dev)
e. NAV movement over past 3 years
.

Build your future:

To meet largest expenses of your life like
marriages, education or a house you need to start
investing early. Save a small amount every
month/quarter and look forward to a bright future.

Relax and accumulate wealth:

With SIP you dont require investing a huge sum
of money and start with an amount as little as Rs.
500. You can accumulate wealth over long-term.

Reduce risk:
For efficient participation in this highly volatile
market, SIP helps you average out your cost by
generating superior returns in the long run. It
reduces risk associated with lump sum
investments.

Enjoy the ease:

Set yourself free from cumbersome paperwork.
Just identify the amount and scheme you wish to
invest in and then choose from options like Auto
Debit/ECS. The amount will automatically get
debited on a date of your choice. You can also
give monthly/quarterly post-dated cheques for the
amount you wish to invest.

About Systematic Investment Plan (SIP)

Follow a disciplined approach towards investing in UTI MF schemes.
Make regular investments through Systematic Investment Plan
according to pre-opted schedules. To know more about this time tested
mechanism,

Build your investment at regular intervals

By Systematic Investment Plan you can invest a
pre-determined among of money in chosen
schemes at the applicable NAV based Sale Price
on each transaction date. Each transaction will
fetch you additional units that will be added to
your investment account

Step by step, reach out for

your goals
-

Set your financial goals

Identify the scheme
Decide the SIP amount
Look for a long-term commitment: Opt for bigger gains as
through SIP returns increase with extended time horizon.Aim
for the big picture: To
get the most out of the
market fluctuations, start
investing today. The sooner
you start, the earlier you
reach your financial goals.
- Start investing

Benefit from UTI SIP

Rupee cost averaging: With UTI SIP you can
invest a uniform amount regularly and average out
the cost of acquisition of units. This average cost
per unit will determine your overall return on your
investments.

Month

Amount you
invest (Rs.)

Sale Price

3000

10

3000

12

3000

10

3000

3000

10

Total

15000

As evident from above table, when invested

through SIP, the average purchase price works out
as low at 9.836, compared to a lump sum
investment of Rs. 10.

Power of compounding: By extending your

investment period you can earn profit on your
profit, and accumulate more wealth. The
illustrated graph given below proves this fact.

UTI MUTUAL FUND SCHEME

UTI-Banking Sector Fund

Type Of Scheme
Open Ended Equity
Date Of Inception

Asset Allocation

09/03/2004
An open-ended equity fund with the objective to provide capital appreciation
through investments in the stocks of the companies/institutions engaged in
the banking and financial services activities.
At least 90% in equity / equity related instruments

Face Value

Rs.10/-

Scheme Objective

Min Investment Amt Rs. 5,000/Plan

Entry Load

Latest Nav

Date

Growth Option

42.4400

07/29/2011

Income Option

19.5700

07/29/2011

Fund Manager

Entry Load Nil (Any application size)

< 1 years - 1%
>= 1 years - Nil
Mr.Arun Khurana, Mr. Anoop Bhaskar

Remark

--

Exit Load

Presentation

UTI-Dividend Yield Fund

Type Of Scheme
Open-Ended Equity Oriented Scheme
Date Of Inception
Scheme Objective

Asset Allocation

Face Value

11/04/2005
An open-ended equity scheme. It aims to provide medium to long term
capital gains and/or dividend distribution by investing predominantly in
equity and equity related instruments which offer high dividend yield.
High dividend yield equity and equity related instruments. Other equity or
equity related instruments. Debt and money market instruments. 65-100%. 035%. 0-10%
Rs. 10

Min Investment Amt Rs.5000

Plan

Entry Load

Latest Nav

Date

Income

14.3200

07/29/2011

Growth

32.3300

07/29/2011

Fund Manager

Entry Load Nil (Any application size)

< 1 years - 1%
>= 1 years - Nil
Mrs. Swati Kulkarni

Remark

--

Exit Load

Presentation

UTI-Opportunities Fund
Type Of Scheme
Open Ended Equity Fund
Date Of Inception

Asset Allocation

16/07/2005
This scheme seeks to generate capital appreciation and/or income
distribution by investing the funds of the scheme in equity shares and equityrelated instruments. The focus of the scheme is to capitalise on opportunities
arising in the market by responding to the dynamically changing Indian
economy by moving its investments amongst different sectors as prevailing
trends change.
Equity 90% to 100%

Face Value

Rs.10

Scheme Objective

Min Investment Amt Rs.5000

Plan

Entry Load
Exit Load
Fund Manager
Remark

Presentation

Latest Nav

Date

INCOME RETAIL

14.0100

07/29/2011

GROWTH RETAIL

27.7700

07/29/2011

Entry Load Nil (Any application size)

< 1 years - 1%
>= 1 years - Nil
Mr. Harsha Upadhyaya
UTI-Grandmaster Unit Scheme,UTI-Master Equity Plan 1998,UTI-Master
Equity Plan 1999,UTI-PEF Unit Scheme & UTI-Unit Scheme 1992 have
been merged with UTI-Opportunities Fund.

UTI-Equity Fund (Formerly UTI-Mastergain Unit Scheme)

Type Of Scheme

Open Ended Equity Fund

Date Of Inception

Asset Allocation

20/04/1992
UTI Equity Fund is open-ended equity scheme with an objective of
investing at least 80% of its funds in equity and equity related instrument
with medium to high risk profile and upto 20% in debt and money market
instruments with low to medium risk profile.
At least 80% in equity, upto 20% in debt

Face Value

Rs.10

Scheme Objective

Min Investment AmtRs. 5,000/Plan

Entry Load

Latest Nav

Date

Income Option

48.7000

07/29/2011

Growth Option

55.1100

07/29/2011

Fund Manager

Entry Load Nil (Any application size)

< 1 years - 1%
>= 1 years - Nil
Mr. Anoop Bhaskar

Remark

--

Exit Load

Presentation

UTI-Master Value Fund

Open Ended Equity Fund
01/06/1998

An open-ended equity fund investing in stocks which are cu

under valued to their future earning potential and carry me

profile to provide 'Capital Appreciation'.
100% in Equity
Rs.10
Rs. 5,000/-

Latest Nav
Income Option

23.5200

Growth Option

53.6200

Entry Load Nil (Any application size)

< 1 years - 1%
>= 1 years - Nil
Mr. Anoop Bhaskar
--

LATEST NEWS
Thiruvananthapuram, Feb 2 : UTI Mutual Fund Wednesday announced its tie-up with HDFC
Bank for an investor education initiative called 'Swatantra' in Kerala, Karnataka and Tamil Nadu.
"We are happy to partner with India's oldest fund house UTI Mutual Fund in this unique investor
education initiative. HDFC Bank's huge network of rural and semi-rural branches across Kerala,
Karnataka and Tamil Nadu will interact with millions of people living in rural areas to impart
financial knowledge which hitherto has been the domain of the urban rich," HDFC Bank's senior
executive vice-president (private banking group and third party products) Nitin Rao said.
As part of this initiative, two 'UTI Knowledge Caravans' will travel through small towns of
Kerala, Karnataka and Tamil Nadu. The caravans were flagged off here Wednesday by Dhiraj
Relli, HDFC Bank's executive vice-president and head of branch banking (south).
The caravans will cover more than 7,300 km in about 56 days. Investor meets will be held in
around 130 towns and will be conducted in local languages Tamil, Malayalam and Kannada.
UTI Asset Management Company's chief marketing officer Jaideep Bhattacharya said 'Swatantra'
was India's journey to financial freedom.
"Taking this initiative to the next level, UTI Mutual Fund has tied up with HDFC Bank, the
largest distributor of mutual fund products, for continuing its efforts for spreading financial
literacy in the small towns of Kerala, Karnataka and Tamil Nadu," said Bhattacharya. (IANS)

FINDINGS
1. All investments in mutual funds and securities are subject to market risks and the NAV of
the units under the scheme may go up or down depending upon the factors and forces
affecting the securities market.
2. Past performance of the sponsor/mutual fund/schemes/AMC is not necessarily an
indication of future results and may not necessarily provide basis for comparison with
other investment.
3. All mutual funds and securities investments are subject to market risks and there can be
no assurance or guarantee that the objectives of the scheme will be achieved.
4. The schemes of UTI are subject to risk relating to credit , interest rates, liquidity,
securities lending, reinvestment risk, default risk and investment in overseas markets,
trading in debts and equity derivatives.

5.
6.

Uti has continously performed better than bombay stock exchange since last 3-4 years.
The large number of investors who are above 40 yrs are more interested in investing
dividebd yield fund because they are more conservative and this funds provide regular
return to the investors.
7. The regular investor with aggressive style of fund managemnt invests in opportunity
fund as they can bear more risks

RESEARCH AND METHODOLOGY

For the purpose of searching data we have taken whole data from secondary source.
For selling the above five funds of uti mutual funds we have adopted direct marketing and
procedure was :
1. The uti has tied up with its sponsor banks like SBI, BANK OF BARODA, BANK OF
INDIA, PUNJAB NATIONAL BANK.
2. Then as a managment trainee uti has send us to two of the sponserd bank for selling SIPs
to bank customers directly.
3. As the customer arrives in the bank we have to introduce our self and funds of uti to
them.
4. The another way of selling uti mutual fund was to promote it through the camps
organised by banks.

LIMITATIONS
1. The nav has been calculated assuming that all payouts durind the period have been
reinvested in the units of the scheme at the immediate ex- div NAV
2. Past performance of the funds may or may not be sustained in future
3. Returns are computed on the basis of compounded annual growth rate.
4. SIP returns are worked out assuming investment of Rs 1000 every month at NAV per unit
of the scheme as on the 1st working day for the respective time periods and loads have not
been taken into account.

CONCLUSION

It can be concluded from the above report that it totally depends upon customers style of
management that in which funds he is more interested in investing but the most prefferd fund of
uti mutual fund is dividend yield fund. As it provides a regular return and is a diversified large
mid cap fund.
Uti opportunity fund is a diversified large cap oriented fund with aggressive style of funds
management and is suitable for regular equity investors.
The SIP gives more retuns than the lumpsum amount.

BIBLIOGRAPHY

Magazine of uti mutual funds

Annual report
Organizational Behaviour By Stephen. P. Robbins
www.utimf.com
www.mutualfundsnavindia.com
www.utihistory.com