Comparative Analysis About Different Schemes of Elss (Tax Saving Scheme) in Amc

CHAPTER I- INTRODUCTION
AN INTRODUCTION TO MUTUAL FUNDS

Over the past decade, American investors increasingly have turned to mutual funds to
save for retirement and other financial goals. Mutual funds can offer the advantages of
diversification and professional management. But, as with other investment choices,
investing in mutual funds involves risk. And fees and taxes will diminish a fund's
returns. It pays to understand both the upsides and the downsides of mutual fund
investing and how to choose products that match your goals and tolerance for risk. It is
an ideal investment vehicle for a common man in complex and modern financial
scenario.
DEFINITION OF MUTUAL FUNDS

Mutual Funds Definition refers to the meaning of Mutual Fund, which is a fund,
managed by an investment company with the financial objective of generating high
Rate of Returns. These asset management or investment management companies
collects money from the investors and invests those money in different Stocks, Bonds
and other financial securities in a diversified manner. Before investing they carry out
thorough research and detailed analysis on the market conditions and market trends of
stock and bond prices. These things help the fund mangers to speculate properly in the
right direction.
TEEN ANALYST ADVICE:

Mutual funds are great because they offer regular investors a chance to diversify their
portfolios, which is something they may not be able to do on their own. Consider this,
if you want to build a diversified portfolio of 30 stocks, you would probably need
$30,000 to get started ($1000 per stock...which is usually the norm). Or you could
open up an account with a mutual fund for just $1000.
A mutual fund is a professionally managed type of collective investment
scheme that pools money from many investors and invests it in stocks, bonds, short-
term money market instruments, and/or other securities. The mutual fund will have a
fund manager that trades the pooled money on a regular basis. The net proceeds or
losses are then typically distributed to the investors annually.
CONCEPT OF MUTUAL FUNDS
A mutual fund, by its very nature, is diversified -- its assets are invested in many
different securities. The investments by the Mutual Funds are made in equities, bonds,
debentures, call money etc., depending on the terms of each scheme floated by the
Fund. The current value of such investments is now a day is calculated almost on daily
basis and the same is reflected in the Net Asset Value (NAV) declared by the funds from
time to time. This NAV keeps on changing with the changes in the equity and bond
market. Any change in the value of the investments made into capital market
instruments (such as shares, debentures etc) is reflected in the Net Asset Value (NAV)
of the scheme.
FOR EXAMPLE:
If the market value of the assets of a fund is Rs. 100,000
The total number of units issued to the investors is equal to 10,000.
Then the NAV of this scheme = (A)/(B), i.e. 100,000/10,000 or 10.00
Now if an investor 'X' owns 5 units of this scheme
Then his total contribution to the fund is Rs. 50 (i.e. Number of units held multiplied by
the NAV of the scheme).
Therefore, the investments in Mutual Funds is not risk free, but a good managed Fund
can give you regular and higher returns than when you can get from fixed deposits of a
bank etc.
SOME OF THE DISTINGUISHING CHARACTERISTICS OF MUTUAL FUNDS
INCLUDE THE FOLLOWING:
Investors purchase mutual fund shares from the fund itself (or through a broker
for the fund) instead of from other investors on a secondary market, such as the
New York Stock Exchange or NASDAQ Stock Market.
The price that investors pay for mutual fund shares is the fund's per share net
asset value (NAV) plus any shareholder fees that the fund imposes at the time of
purchase (such as sales loads).
Mutual fund shares are "redeemable," meaning investors can sell their shares
back to the fund (or to a broker acting for the fund).
Mutual funds generally create and sell new shares to accommodate new
investors. In other words, they sell their shares on a continuous basis, although
some funds stop selling when, for example, they become too large.
The investment portfolios of mutual funds typically are managed by separate
entities known as "investment advisers" that are registered with the SEC.
HISTORY OF MUTUAL FUNDS

The origin of mutual fund industry in India is with the introduction of the concept of
mutual fund by UTI in the year 1963. Though the growth was slow, but it accelerated
from the year 1987 when non-UTI players entered the industry. The mutual fund
industry can be broadly put into four phases according to the development of the sector.
Each phase is briefly described as under.
FIRST PHASE - 1964-87

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 crores of assets under
management.
SECOND PHASE - 1987-1993 (ENTRY OF PUBLIC SECTOR

FUNDS)
Entry of non-UTI mutual funds. SBI Mutual Fund was the first 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 in 1989 and GIC in 1990. The end of 1993 marked Rs.47,004 as assets under
management.
THIRD PHASE - 1993-2003 (ENTRY OF PRIVATE SECTOR
FUNDS)
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.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

This phase had bitter experience for UTI. It was bifurcated into two separate entities.
One is the Specified Undertaking of the Unit Trust of India with AUM of Rs.29,835
crores (as on January 2003).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 AUM 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. As at the end of September, 2004, there
were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.
STRUCTURE OF MUTUAL FUND

Every MF will comprise a sponsor, trustee, AMC, custodian and registrar, and is
regulated by SEBI .The structure of mutual fund is discussed in detail.
SPONSOR
The company that sets up the MF is called the sponsor. It is typically a financial
institution, bank, investment house or even an individual that contributes at least 40 per
cent to the net worth of the asset management company (AMC) .The sponsor initiates
the fund's activities by appointing the trustees, the AMC and custodians.
TRUSTEE
The trustee monitors the operations of the various schemes and safeguards investor
interests. The trustees can also review the AMCs operations and transactions, including
contracts with various agencies such as custodians and registrars.
ASSET MANAGEMENT COMPANY.
The AMC seeks to multiply the invested money in the fund in line with the scheme's
investment objective. It should have a networth of at least Rs 10 crore. The AMC is a
key player in the MF game and does everything to make the most of your investment. It
launches new schemes, manages them, and employs the fund management team,
including the fund manager. The sponsor appoints the AMC and the trustees review its
operations.
CUSTODIAN.
An MF needs to store and record transactions, for which it relies on banks or financial
institutions that are designated custodians. The custodian maintains custody of the
securities in which the scheme invests (as distinct from the registrar who tracks the
investment by investors in the scheme).The custodian also follows up on various
corporate actions, such as rights, bonus and dividends declared by investor companies.
R&T AGENTS
Registrars and transfer agents (R&T agents) handle all paperwork involving investor
servicing. Their services include processing initial public offerings, dispatch of
certificates, account statements, annual reports and dividend warrants.
GROWTH OF MUTUAL FUNDS IN INDIA

Over the years not only the new types of mutual funds emerged, the way, in which
mutual funds were sold also changed. But, the Growth of Mutual Funds has not
stopped. It is continuing to evolve to a better future, where investors will get newer
opportunities. In March 2012, mutual funds were net buyers worth Rs.4,041.88 crores,
gross purchases being Rs.14889.15 crore and gross sales Rs.10847.27 crore making
March the most active month for the mutual fund industry in India. May of year 2017
was considered the most active month when mutual funds were net buyers of worth
Rs.3,334.99 crores.
THE GRAPH INDICATES THE GROWTH OF ASSETS OVER THE YEARS:
SOME FACTS FOR THE GROWTH OF MUTUAL FUNDS IN INDIA

100% growth in the last 6 years.
Number of foreign AMC's are in the que to enter the Indian markets like
Fidelity Investments, US based, with over US$1trillion assets under
management worldwide.
Our saving rate is over 23%, highest in the world. Only channelizing these
savings in mutual funds sector is required.
We have approximately 29 mutual funds which is much less than US having
more than 800. There is a big scope for expansion.
'B' and 'C' class cities are growing rapidly. Today most of the mutual funds are
concentrating on the 'A' class cities. Soon they will find scope in the growing
cities.
Mutual fund can penetrate rural like the Indian insurance industry with simple
and limited products.
SEBI allowing the MF's to launch commodity mutual funds.
Emphasis on better corporate governance.
Trying to curb the late trading practices.
Introduction of Financial Planners who can provide need based advice.
SCOPE OF MUTUAL FUNDS IN INDIA.
In todays world, Scope of Mutual Funds has become so wide, that people sometimes
take long time to decide the mutual fund type; they are going to invest in. Several
Investment Management Companies have emerged over the years who offer various
types of Mutual Funds, each type carrying unique characteristics and different
beneficial features. In March 2006, mutual funds were net buyers worth Rs.4,041.88
crores, gross purchases being Rs.14889.15 crore and gross sales Rs.10847.27 crore
making March the most active month for the mutual fund industry in India. May of year
2005 was considered the most active month when mutual funds were net buyers of
worth Rs.3,334.99 crores The mutual fund industry is expected to grow at a rate of
13.4% over the next 10 years. It is estimated that by 2010 March-end, the total assets of
all scheduled commercial banks should be Rs 40,90,000 crore. The annual composite
rate of growth is expected 13.4% during the rest of the decade. In the last 5 years we
have seen annual growth rate of 9%. According to the current growth rate, by year
2010, mutual fund assets will be double.
With this growth rate, the mutual fund investments have become
one of the most popular modes of investments. Many foreign players entered the Indian
Mutual Fund Industry eying the opportunities. Among them the US Mutual Funds
companies played an important role in the development of the sector.
US COMPANIES INVESTING IN MUTUAL FUNDS
FRANKLIN TEMPLETON INDIA MUTUAL FUND
MORGAN STANLEY MUTUAL FUND
ALLIANCE CAPITAL MUTUAL FUND
PRUDENTIAL ICICI MUTUAL FUND
STEPS TO CHOOSE RIGHT MUTUAL FUND FOR

YOURSELF
If you decide to invest in mutual funds, be sure to obtain as much information about the
fund before you invest. And don't make assumptions about the soundness of the fund
based solely on its past performance or its name. Here, some steps are made out which
help in selecting right mutual fund for you. Follow these steps:
SET LONG-TERM GOALS.

It's important to know what your timeline is. If you don't need the money for 20 years,
you can afford to be more aggressive in your fund choice. You could potentially invest
in a more risky sector like emerging markets. A shorter time horizon means you'll want
to stick with a more conservative fund.
IDENTIFY THE TYPES OF FUNDS YOU NEED (E.G.,
GROWTH) TO REACH YOUR GOALS.
Getting started will be easier if you first focus your search on a specific type of fund
with a specific investing objective. Eventually, your goal should be to build a portfolio
that includes both stock and bond funds with various investment objectives and
investment styles for maximum diversity.
DO MORE READING.
Visit the library or buy some specialized books on mutual fund investing that will build
on what you have learned from this unit. Some useful references are: Mutual Funds for
Dummies by Eric Tyson, (For Dummies, 2007), Morningstar Guide to Mutual Funds:
Five-Star Strategies for Success (Wiley, 2007) and Common Sense on Mutual Funds:
New Imperatives for the Investor by John C. Bogle (Wiley, 2000).
LOOK FOR A WELL-MANAGED FUND.

There will be plenty of information available on the fund you plan on investing in. You
can order a prospectus and read the Web site. Cut through the marketing lingo and
focus on three important factors: performance, management and consistency. Also
check with independent research companies that cover mutual funds. Morningstar,
www.morningstar.com, a mutual fund rating and data firm, is a great resource.
GET SOURCES OF INFORMATION :PROSPECTUS:

The prospectus is the fund's selling document and contains valuable information, such
as the fund's investment objectives or goals, principal strategies for achieving those
goals, principal risks of investing in the fund, fees and expenses, and past performance.
The prospectus also identifies the fund's managers and advisers and describes how to
purchase and redeem fund shares. While they may seem daunting at first, mutual fund
prospectuses contain a treasure trove of valuable information.
STATEMENT OF ADDITIONAL INFORMATION ("SAI")

Also known as "Part B" of the registration statement, the SAI explains a fund's
operations in greater detail about the history of the fund, fund policies on borrowing
and concentration, the identity of officers, directors, and persons who control the fund,
investment advisory and other services, brokerage commissions, tax matters, and
performance such as yield and average annual total return information.
SHAREHOLDER REPORTS
A mutual fund also must provide shareholders with annual and semi-annual reports
within 60 days after the end of the fund's fiscal year and 60 days after the fund's fiscal
mid-year. These reports contain a variety of updated financial information, a list of the
fund's portfolio securities, and other information.
PAST PERFORMANCE
A fund's past performance is not as important as you might think. Advertisements,
rankings, and ratings often emphasize how well a fund has performed in the past. But
studies show that the future is often different. This year's "number one" fund can easily
become next year's below average fund.
LOOKING BEYOND A FUND'S NAME

Don't assume that a fund called the "XYZ Stock Fund" invests only in stocks or that the
"Martian High-Yield Fund" invests only in the securities of companies headquartered
on the planet Mars. The SEC requires that any mutual fund with a name suggesting that
it focuses on a particular type of investment must invest at least 80% of its assets in the
type of investment suggested by its name. But funds can still invest up to one-fifth of
their holdings in other types of securities including securities that you might
consider too risky or perhaps not aggressive enough.
DETERMINE YOUR SELECTION CRITERIA AND

ELIMINATE FUNDS.
You can whittle down the over 8,000 fund universe to a manageable list in short order
by using a few criteria to help with the elimination process. For example, suppose you
are looking for a stock fund to invest for retirement. Right there, you have cut the
number to a little over 5,000 funds by eliminating all the bond and money market
funds. Perhaps you will toss out all funds that have a sales commission, all stock funds
with an expense ratio over 1.4%, funds that have an investment minimum over $3,000,
any fund where the managers tenure is less than 5 years, and all funds that have not
outperformed 60% of comparable funds over the last 3 and 5 five years, etc. Applying
these criteria as you research your favorites, pay most attention to performance, cost to
invest, and risk.
CHECK FOR CONSISTENCY

Pick a mutual fund that has yielded good returns year after year. That indicates the fund
can be successful under a variety of conditions.
KNOW THE RISKS

Mutual funds are not thought of as extremely risky investments, mainly because they
invest in hundreds of stocks. But this is no reason to go into a fund blind. Make sure to
read the part of the prospectus that talk about risk. Some sectors of the market can
perform badly even when the majority of stocks are going up. Be aware of what sector
or sectors the fund invests in, and what can go wrong with these areas.
AVOID SALES CHARGES

Also known as loads or commissions, these charges may be incurred for buying (front-
end load) or selling the fund (back-end load, deferred sales or redemption fees). Stay
away from them.
LOOK FOR LOW EXPENSE RATIOS

These ratios represent the annual fees that mutual funds charge and include
management fees, administrative costs, distribution fees and some operating expenses.
If possible, these fees should be under one percent annually.
CONSIDER THE MANAGER
Managers determine when a fund's stock or bond should be bought or sold. Look for
one who has longevity with the fund and company.
ASK THE EXPERTS

Search the Internet for financial planners, investment advisors and mutual fund
companies. You also can access information on all varieties of mutual funds and what
experts consider being the top picks.
CALL OR WRITE FOR A PROSPECTUS

A prospectus for a mutual fund is the selling document legally required to be distributed
to mutual fund investors. It describes the funds investment strategy as well as the risks
and costs of an investment.
MAKE YOUR PURCHASE

While you can always do business by mail, and in some cases, at a local investment
center, most mutual fund groups offer a toll-free number for telephone assistance. Of
course, if you are buying a fund with a sales commission, the broker or financial
planner executes your order.
CONTINUALLY BUY MORE SHARES

One of the best ways to grow your investments is to use a dollar-cost averaging strategy
investing a fixed number of dollars (e.g., $50) in a mutual fund(s) at periodic
intervals, usually monthly or quarterly. When the price of the fund is low, your dollars
buy more shares. When the funds NAV moves higher, you will buy fewer shares.
REVIEW PERIODICALLY
After you have selected your mutual fund, set up a regular review schedulegenerally
at the end of the yearto ensure its performance remains consistent with your
investment objectives and level of investment risk. Look at a fund's track record and
portfolio. Don't obsess over a mutual fund's double-digit return. Review the fund
company's prospectus before investing. You'll learn the goals and its strategy for
achieving them. Seek the advice of an accountant and/or a tax expert regarding the
implications of your investment before you buy. Who Can Help
HOW TO FILL UP THE APPLICATION FORM OF A MUTUAL

FUND SCHEME?
An investor must mention clearly his name, address, number of units applied for and
such other information as required in the application form. He must give his bank
account number so as to avoid any fraudulent encashment of any cheque/draft issued by
the mutual fund at a later date for the purpose of dividend or repurchase. Any changes
in the address, bank account number, etc at a later date should be informed to the
mutual fund immediately.
TYPES OF MUTUAL FUNDS

A mutual fund has several schemes in which investor can invest. There are structure
based schemes distinguished by their maturity periods. Then there are objective based
schemes that offer different risk reward options. It has also some special schemes that
invest in specific sectors.
MUTUAL FUNDS CAN CLASSIFY ON THE FOLLOWING BASES:-

MUTUAL FUND RISK
Mutual funds face risks based on the investments they hold. The risk return trade-off
indicates that if investor is willing to take higher risk then correspondingly he can
expect higher returns and vise versa if he pertains to lower risk instruments, which
would be satisfied by lower returns. For example, if an investors opt for bank FD,
which provide moderate return with minimal risk. But as he moves ahead to invest in
capital protected funds and the profit-bonds that give out more return which is slightly
higher as compared to the bank deposits but the risk involved also increases in the same
proportion.
RISKS ASSOCIATED WITH MUTUAL FUNDS

RISK RETURN TRADE OFF
MARKET RISK
CREDIT RISK
INFLATION RISK
INTEREST RATE RISK
POLITICAL RISK
LIQUIDITY RISK
TAXATION OF MUTUAL FUNDS
The dividend distributed by both debt funds and equity funds is tax-free in investors
hands. In case of EQUITY FUNDS, no dividend distribution tax is payable by the
mutual fund. However, in the case of DEBT FUNDS, the mutual fund has to pay a
Dividend Distribution Tax (12.5 % Surcharge @10% + education cess ( @2% on
Income Tax and surcharge) + secondary and higher education cess ( @1% on Income
Tax and surcharge i.e 14.1625% ) on the amount of dividend distributed to individuals
and HUFs and for other than Equity Oriented Funds ( except Money Market & Liquid
funds ) it is ( 20% + Surcharge @10% + education cess ( @2% on Income Tax and
surcharge) + secondary and higher education cess ( @1% on Income Tax and surcharge
i.e 22.66%.
In the case of short term capital gains (profits that accrue from the sale of
units within one year from the date of purchase) earned on the sale of EQUITY
FUNDS, tax is applicable as 15%+ applicable Surcharge + education cess ( @2% on
Income tax and surcharge) + secondary and higher education cess ( @1% on income
tax & surcharge) , subject to STT. Short term capital gains on DEBT FUNDS attract tax
at the personal income tax rate applicable to assessee and for FIIs it is 30%+ applicable
Surcharge + education cess ( @2% on Income tax and surcharge) + secondary and
higher education cess ( @1% on income tax & surcharge)
Long term capital gains (profits that accrue from the sale of units after one
year from the date of purchase) earned on the sale of EQUITY FUNDS are tax free in
hands of Investor. In case of DEBT FUNDS, long term capital gains computed as
( 10% without cost Inflation index benefit or 20% with cost inflation index benefit
whichever is lower + applicable Surcharge + education cess ( @ 2% on Income tax
and surcharge) + secondary and higher education cess ( @ 1% on Income Tax and
surcharge) to Investor and for Foreign Institutional Investors it is. (10 % + applicable
Surcharge + education cess ( @2% on Income Tax and surcharge) + secondary and
higher education cess ( @1% on Income Tax and surcharge).
ADVANTAGES OF MUTUAL FUNDS
Investing in mutual has various benefits, which makes it an ideal investment avenue.
Following are some of the primary benefits:
INVESTORS HAVE ACCESS TO PROFESSIONAL

INVESTMENT MANAGEMENT
GREATER DIVERSIFICATION
LOW COST
CONVENIENCE AND FLEXIBILITY
LIQUIDITY
TRANSPARENCY
VARIETY
ECONOMIES OF SCALE
SIMPLICITY
LESS RISK
CHOICE OF SCHEMES
SAFETY
DISADVANTAGES OF MUTUAL FUNDS

But mutual funds also have features that some investors might view as disadvantages,
such as:
PROFESSIONAL MANAGEMENT
COSTFUL
DILUTION
TAXES
LACK OF CONTROL
PRICE UNCERTAINTY
COSTS DESPITE NEGATIVE RETURNS
COSTS CONTROL NOT IN THE HANDS OF AN INVESTOR-
NO CUSTOMIZED PORTFOLIOS
DIFFICULTY IN SELECTING A SUITABLE FUND SCHEME -
CHAPTER II- REGULATORY BODIES
Mutual funds in India are regulated by two following regulatory bodies. These
governing make rules and to make its functioning smooth so that care can be taken of
all the parties involve in the industry. To protect the interest of the investors, SEBI
formulates policies and regulates the mutual funds. It notified regulations in 1993 (fully
revised in 1996) and issues guidelines from time to time.SEBI approved Asset
Management Company (AMC) manages the funds by making investments in various
types of securities. Custodian, registered with SEBI, holds the securities of various
schemes of the fund in its custody
SECURITIES AND EXCHANGE BOARD OF INDIA
ASSOCIATION OF MUTUAL FUNDS IN INDIA
SECURITIES AND EXCHANGE BOARD OF INDIA

ESTABLISHMENT
In 1988 the Securities and Exchange Board of India (SEBI) was established by the
Government of India through an executive resolution, and was subsequently upgraded
as a fully autonomous body (a statutory Board) in the year 1992 with the passing of the
Securities and Exchange Board of India Act (SEBI Act) on 30th January 1992. The
basic objectives of the Board were identified as:
To protect the interests of investors in securities;
To promote the development of Securities Market;
To regulate the securities market and
For matters connected therewith or incidental thereto.
PREAMBLE
[ACT NO. 15 OF 1992]
The Preamble of the Securities and Exchange Board of India describes the basic
functions of the Securities and Exchange Board of India as:
..to protect the interests of investors in securities and to promote the development
of, and to regulate the securities market and for matters connected therewith or
incidental thereto
ROLE OF SEBI IN MUTUAL FUND INDUSTRY

To protect the interest of the investors, SEBI formulates policies and regulates the
mutual funds. It notified regulations in 1993 (fully revised in 1996) and issues
guidelines from time to time
THE SEBI (MUTUAL FUNDS) REGULATIONS, 1996:
The revised regulations embodied far reaching changes in the regulation and
functioning of mutual funds. The revised regulations provide for:
enhanced level of investor protection

empowerment of investors
stringent disclosure norms in the offer documents, so that investors are better
informed, better advised, better aware of risks and rewards
standardization of norms for valuation of assets, computation of Net Asset
Values (NAVs) of schemes of mutual funds and accounting standards and
policies
complete freedom to asset management companies to structure schemes in
accordance with investor preferences
removal of quantitative restrictions on investment by mutual funds and
replacement by prudential supervision
replacement of vetting of offer documents by filing
guaranteed return schemes by mutual funds permitted provided returns
including capital were guaranteed
indication of expected returns based on hypothetical portfolio permitted
better governance of mutual funds through higher responsibilities and
empowerment of trustees as front-line regulators of mutual funds
closer scrutiny through off site and on site inspections
code of ethics for asset management companies
ASSOCIATION OF MUTUAL FUNDS IN INDIA (AMFI)

With the increase in mutual fund players in India, a need for mutual fund association in
India was generated to function as a non-profit organization. Association of Mutual
Funds in India (AMFI) was incorporated on 22nd August, 1995.AMFI is an apex body
of all Asset Management Companies (AMC) which has been registered with SEBI. Till
date all the AMCs are that have launched mutual fund schemes are its members
ASSOCIATION OF MUTUAL FUNDS IN INDIA
706-708, Balarama
Bandra-Kurla Complex
Bandra (East)
Mumbai - 400 051.
Tel No. : 26590382 / 26590206 / 26590243 / 26590246
FAX No. : 26590235 / 26590209
AMFI Website: http://www.amfiindia.com/
CHAPTER III- CORPORATE PROFILE
BANK OF BARODA
Bank of Baroda is an Indian state-owned International banking and financial
services company headquartered in Vadodara (earlier known as Baroda) in Gujarat,
India. It is the second largest bank in India, next to State Bank Of India. Its
headquarters is in Vadodara, it has a corporate office in Mumbai.
Based on 2017 data, it is ranked 1145 on Forbes Global 2000 list. BoB has total assets
in excess of 3.58 trillion, a network of 5493 branches in India and abroad, and 10441
ATMs as of Sept, 2016.
The bank was founded by the Maharaja of Baroda, Maharaja Sayajirao Gaekwad III on
20 July 1908 in the Princely State of Baroda, in Gujarat. The bank, along with 13 other
major commercial banks of India, was nationalized on 19 July 1969, by
the Government of India and has been designated as a profit-making public sector
undertaking (PSU).
In 2015, Bank of Baroda officials recently stumbled upon illegal transfers of a
whopping Rs 6,172 crores in foreign exchange, made to Hong Kong through newly
opened accounts in the bank's Ashok Vihar branch.
As many as 10 banks have been merged with Bank of Baroda during its journey so far:
Hind Bank Ltd (1958)

New Citizen Bank of India Ltd (1961)
Surat Banking Corporation (1963)
Tamil Nadu Central Bank (1964)
Umbergaon People Bank (1964)
Traders Bank Limited (1988)
Bareilly Corporation Bank Ltd (1998)
Benares State Bank Ltd (2002)
South Gujarat Local Area Bank Ltd (2004)
Memon Cooperative Bank Limited (2011)
PRODUCTS AND SERVICES
Credit Cards,
Consumer Banking,
Corporate Banking,
Finance And Insurance,
Investment Banking,
Mortgage Loans,
Private Banking,
Private Equity,
Wealth Management
CONTACT
Bank of Baroda
Suraj Plaza-1, Sayaji Ganj,
Vadodara -390020
http://www.bankofbaroda.com
Phone : (0265)2361852
Fax : (0265)2362914
BARODA PIONEER ASSET MANAGEMENT COMPANY LIMITED
Baroda Pioneer Asset Management Company Limited is a joint venture between two
large and well-established financial services companies - Bank of Baroda and Pioneer
Investments. Baroda Pioneer Mutual Fund is positioned to serve the varied asset
management needs of investors in India through a range of equity, debt and money
market offerings. Since the formation of the joint venture in 2008, Baroda Pioneer has
been working to create an operational and servicing platform well suited to the exacting
requirements of our existing and potential investors.
The Company operates out of 40 locations in India and manages quarterly average
assets of about Rs. 9116.60 cr. for the quarter ending June 2016
With a focus on enhancing the overall customer experience, Baroda Pioneer Asset
Management Company is working towards:
1. Enhancing the existing product range to include products that will provide
investors with a much wider choice suited to their diverse needs and risk
profiles
2. Providing access to international product offerings through the range of
products available with Pioneer Investments across its global network
3. Providing superior and consistent investment performance through sound local
investment management supported by expertise available across the globe
4. Creating an increasing number of access points for investors through the vast
branch network of Bank of Baroda
5. Bringing in the highest levels of compliance and corporate governance
6. Introducing increasingly innovative and useful service features on an ongoing
basis
7. Making it easier for investors to receive prompt and efficient/effective/the best
levels of customer service
KEY PERSONNEL OF BARODA PIONEER MUTUAL FUND
Chief Executive Officer
Mr. Anthony Heredia
Mr. Kiran Deshpand Chief Operating Officer and Chief

Financial Officer
Mr. Sanjay Chawla Chief Investment Officer
Mr. Mahmood Basha Head Sales
Mr. Alok Sahoo Head, Fixed Income
Mr. Dipak Acharya Fund Manager Equity
Ms. Hetal P. Shah Fund Manager (Debt)
Ms. Farhana Mansoor Head - Compliance and Company

Secretary
Mr. Amitabh Ambastha Investor Relations Officer
SCHEMES IN BARODA PIONEER MUTUAL FUND
Different Types of Funds Offered by Baroda Pioneer Mutual Fund

The variety offered by the Baroda Pioneer Mutual Fund is mention below:
1. Baroda Pioneer Equity Fund

The main investment goal of the equity plans is to ensure long-term growth of
the investors. Minimum 65 percent funds of the corpus are put in equity or
securities related to equity. It makes the investors the partial owners of the equity
securities in investors fund portfolio. These funds are ideal for the investors
have a high-risk appetite and seeking returns for the long-term.
Baroda Pioneer Infrastructure Fund
It helps in generating long-term cap appreciation with equity and investments
related to it. The risk factor involved in this scheme is high.
Baroda Pioneer ELSS96

It helps in generating capital growth that is long-term with the help of the equity
investment vehicles, as it provides tax deductions for the investors of the mutual
fund under Section 80C of the Income Tax Act, 1961. The risk level associated
with it is moderate.
Baroda Pioneer Growth Fund
It helps in generating capital appreciation for the long-term with the help of the
equity and the investment options related to it. The risk factor involved in this
scheme is high.
Baroda Pioneer Balance Fund
It helps in generating capital appreciation for long-term. By making the
investment in debt and equity securities along with money market instruments, it
ensures stability. The risk level associated with this scheme is moderate.
Baroda Pioneer PSU Equity Fund
It helps in generating capital appreciation for long-term by making investment
domestic PSUs equity stocks. The risk level associated with these schemes is
high.
2. Baroda Pioneer Debt Income Funds

The main investment goal of income or debt funds is to ensure the protection of
capital along with the medium growth. Minimum 65 percent of the funds
amount is invested in the securities that are fixed-income, viz. corporate
debentures, bonds, money market instruments, and government securities/
(GILTS).
Baroda Pioneer Short-term Bond Fund
It helps in income generation with the help of a portfolio comprising short-term
money market and debt securities. The risk level associated with these schemes
is low.
Baroda Pioneer PSU Bond Fund
It helps in stable returns generation while neutralizing risk levels by making an
investment in fixed-income vehicles of PSUs financial institutions and banks.
The risk level associated with these schemes is low.
Baroda Pioneer Treasury Advantage Fund
It helps in liquidity and returns generation by making investments in money
market and debt securities vehicles. The risk level associated with these schemes
is low.
Baroda Pioneer Income Fund

It helps in regular income generation by making the investments in fixed-income
securities that are of high quality. At the same time, it strikes a perfect balance
between reward and risk. The risk level associated with these schemes is low.
Baroda Pioneer GILT Fund
It helps in income generation by making investments in securities offered by the
government. The risk level associated with these schemes is low.
Baroda Pioneer MIP Fund
It helps in regular income generation along with capital appreciation by making
investments in money market and debt vehicles. Along with that, it generates
capital appreciation for long-term by making the investment in a share in the
instruments related to equity. The risk level associated with these schemes is
medium.
Baroda Pioneer Dynamic Bond Fund
It helps in returns generation by making investments for long-term in
government securities or/and corporate bonds. The risk level associated with
these schemes is low.
3. Baroda Pioneer Liquid Fund

The main goal of liquid funds is to enable liquidity while preserving capital and
generating medium income with neutralized risks. Majorly, these funds make
investment vehicles that are for short-term like certificates of deposit,
commercial paper, and treasury bills. Generally, the time period is of 91 days.
Baroda Pioneer Liquid Fund
It helps in income generation through investments that add liquidity. The
investment is made in debt securities and money market vehicles. The risk level
associated with these schemes is low.
Why Select Baroda Pioneer Mutual Fund?

The following are the reasons why you should go for Baroda Pioneer Mutual
Fund:
Asset Allocation
The allocation of 75 percent to 100 percent of the main asset is done in money
market vehicles having a low-risk profile.
Well-Established
With approx Rs. 3,385 Crore assets under its management, the fund house is
eligible and totally able to manage your investment very well.
CHAPTER IV- RESEARCH METHODOLOGY
OBJECTIVE OF THE STUDY

The objective of the study is to help the investors to find out the best ELSS schemes in
India on the basis of various risk adjusted measures and returns so that each and every
aspect is studied about ELSS schemes and the investor should invest in the best one.
SCOPE OF THE STUDY
Scope of the study is limited only to ELSS schemes. And moreover only those ELSS
schemes of various AMC s are taken in this study which are among top 7 in The AUM
as on 30 MAY 2017 and which are having a track record of 5 years.
IMPORTANCE OF THE STUDY
The investor would naturally be interested in knowing that which scheme is better for
him. He would have to make intelligent decision that which funds to choose so that he
can get a good return on his investment. So to help the investor in choosing the right
fund by evaluating all the criteria is the motto of this study.
DATA COLLECTION
Both primary and secondary data is taken for this study (for the qtr ending may 2017)
and on the basis of this data all evaluation work has been done.
TOOLS FOR EVALUATING PERFORMANCE

The tools which are taken for evaluating the performance are risk adjusted measures
and returns of the ELSS schemes.
RISK ADJUSTED MEASURES ARE:
BETA
Beta is a fairly commonly used measure of risk. It basically indicates the level of
volatility associated with the fund as compared to the benchmark. A beta that is greater
than one means that the fund is more volatile than the benchmark, while a beta of less
than one means that the fund is less volatile than the index.
STANDARD DEVIATION
Standard Deviation allows you to evaluate the volatility of the funds. The Standard
Deviation of a fund measures this risk by measuring the degree to which the fund
fluctuates in relation to its mean return, the average return of a fund over a period of
time.
SHARPE RATIO
Sharpe ratio indicates the quality of returns. It shows the return given by fund per unit
of risk it takes. It measures fund performance in terms of total risk. The Sharpe ratio
measures the return of a mutual fund compared to the risk free rate of return. The risk
free rate of return is the 91-day t-bill rate.
R- SQUARED
R squared that measures the correlation. The R-squared of a fund advises investor if the
beta of a mutual fund is measured against an appropriate benchmark. R-squared values
range between 0 and 1, where 0 represents no correlation and 1 represents full
correlation. If a funds beta has an R-squared value that is close to 1, the beta of the
fund should be trusted. On the other hand, an R-squared value that is less than 0.5
indicates that the beta is not particularly useful because the fund is being compared
against an inappropriate benchmark.
ALPHA
Alpha is the difference between the returns one would expect from a fund, given its
beta, and the return it actually produces. An alpha of 1.0 means the fund produces a
return 1% higher than its beta would predict. An alpha of -1.0 means the fund produces
a return 1% lower.
RETURNS & AUM (for the year 2017)

ELSS Schemes are also been evaluated on the basis of returns given by the schemes
over the years. Returns of 1 year are in absolute returns produced by the fund in the last
one year whereas the returns for the 2, 3, and 5 year are on the CAGR basis.
LIMITATIONS OF THE STUDY
As because of lack of time I have not calculated the various risk adjusted measures
and returns of the various ELSS schemes. Rather I have taken the secondary data so
this study relies on the accuracy of data. Secondly only those schemes of various
AMCS are taken which are among top 7 in the AUM as on 30 MAY 2017. Because of
it, many other ELSS funds are not evaluated.
EQUITY LINKED SAVING SCHEME
An equity-linked saving scheme (ELSS) is a great investment option that offers the
twin benefits of tax saving and capital gains. According to the new Income Tax Act, Sec
80C investments in ELSS are allowed as deduction from the total income, up to
maximum Rs100, 000 in a financial year.
ELSS schemes have a three-year lock-in period, which works to the
investors benefit as the fund manager can have a portfolio of stocks that can out-
perform over a period of time. Equity Linked Saving Scheme is an open-ended equity
growth scheme that is offered by mutual funds in line with existing ELSS guidelines
.The investor also has the option to choose between growth and dividend options, and
systematic investment plans (SIP). The dividends earned in this scheme ELSS are tax
free. The returns at the maturity period are also tax free.
ELSS is the best option for investors who are looking with a time frame
of 3-5 years. The short term weakness in the market will glide down and will earn the
investor with better returns in the long run. The performance and the ability of the
stocks in the long run can never be beaten with any other financial instruments. The
ELSS beats mostly all the equity based mutual fund schemes. The minimum investment
that can be made on ELSS is Rs.500 and multiples of it. The fund should be allotted to
the investors to those who have applied with the prescribed form before March 31
every year. From the date of allotment the fund should be hold for three years. On the
completion of the three years the investor gets the option to tender the units for
repurchase.
In the case with the death of the investor the nominee will be able to
withdraw the investment only after a period of one year from the allotment date. ELSS
units are transferable, pledged, or assigned after the lock in period of three years. A
statement of accounts or certificate of investment will be acknowledged by the fund to
the investor. The fund will be terminated at the close of the tenth year from the year of
allotment of units.
The funds will also ensure that the funds of the plan are invested to the
extent of 80% in the specified securities. The funds should make sure that the
investments should be made within a period of six months from the date of closure of
the plan every year. The pending investments would be utilized in short term money
markets or other liquid instruments. After the completion of three years with a fund
they should make sure that they hold 20% of net assets of the plan in short term money
instruments and others which would enable them to redeem the investments for those
unit holders who wish to tender the units for repurchase. ELSS is one of the best
options and an excellent mode of investments.
In short we can say Equity Linked Saving Scheme is an open-ended
equity growth scheme that is offered by mutual funds in line with existing ELSS
guidelines. The investments under this type of scheme are subject to a lock-in period of
3 years and, as per the Finance Act 2005, are allowed the benefit of income deduction
up to Rs. 1,00,000. ELSS offers the benefits of tax saving and capital gains.
WHY SHOULD ONE INVEST ELSS?

Lock-in for three years helps in staying invested over a long period
Investments in equity over a long-term delivers better returns
Tax savings and high returns
Through SIPs, one can invest small amount of Rs 500 in ELSS every month.
FEATURES
Individuals, Hindu Undivided Families (HUFs) and companies.
The units can be easily transferred by filling out a transfer form.
Nomination facility is available with ELSS.
A maximum investment of Rs 10,000 to claim an income tax rebate of 20 %
Open-ended mutual funds have no maturity period. However, to claim tax
rebate under Section 88, the minimum lock-in period is three years.
In the case of open-ended schemes, the units can be sold anytime after the initial
lock-in period of three years. In the case of closed-end schemes, the units can be
sold only on the due date specified.
ADVANTAGES OF ELSS
Lock-in for three years prevents unnecessary withdrawals and allows your
money to grow over a period of time
Investments in equity over a long-term delivers better returns than that of other
savings instruments and similar to other equity schemes
Tax savings and high returns
Long term investment in equities gives better returns than any other
investment instrument.
It gives tax benefits
Gives the flexibility to invest small amounts through a Systematic Investment
Plan (SIP)
TAX BENEFITS:
Dividends from mutual funds are fully exempt from income tax under Section 10(33).
Equity funds (schemes that invest 50 per cent of their funds in equity) are also exempt
from dividend tax. ELSSs offer under section 88 tax rebate on investments up to Rs
10,000 in a financial year. The difference between the selling price and the cost price is
taxable as capital gains in the year of sale, at 10 per cent or 20 per cent, depending on
whether or not you claim indexation benefits.
PLUSES
Possibility of high returns
Lock-in period of only three years
Easy transfer
Low tax incidence (10 per cent) on redemption
Efficient service, especially in the case of private mutual funds
MINUSES
High risk
Difficult to choose the right fund (But not if you use the services of the
Matchmaker!
COMPARATIVE ANALYSIS OF ELSS AND OTHER

TAX SAVING INSTRUMENTS
PARTICULARS PPF NSC ELSS ULIP
Lock-in Period 15 6 3 3
Min Investment Rs.500 Rs.100 Rs.500
May differ
from plan
to plan
Max Investment Rs.70000 Rs.100000 Rs.100000 Rs.100000
qualifying u/s 80C
Risk Level Low Low Medium- Medium-
High high
Returns 8%* 8%** Market Market
linked linked
Taxability of Tax free Taxable # Tax free N.A
Interest/Dividend
* Compounded annually
** Compounded half yearly.
# Taxable but accrued interest available for 80C benefits until 5 years
Compared to all other tax planning schemes available today, ELSS has the shortest
lock-in period. It also has the potential to give you superior returns over other tax
saving instruments.
ELSS IS BETTER OPTION THAN OTHER TAX SAVING

INSTRUMENTS THIS CAN BE EXPLAINED WITH THE
FOLLOWING ILLUSTRATION
Lets assume you invest Rs. 1 lakh this year in an ELSS scheme and you are in the
highest tax bracket.
Invested Amount = Rs. 1,00,000/-
Income Tax saved = Rs. 30,000 (30% tax slab)
Net amount Invested = Rs. 70,000/- (I have deducted the 30,000 because you get it
back up front after your investment as income tax benefit and you effectively
invested only Rs. 70,000)
Let us assume your equity investment grows at the rate of 15% per annum.
Investment value at the end of the First year = 1,15,000/-
Investment value at the end of the Second year = 1,32,250/-
Investment value at the end of the Third year = 1,52,087/-
Assuming you encashed your investment at the end of the 3rd year you will get Rs.
1,52,087/-
Profit you realized = Rs. 82,087/- (You invested only Rs. 70000 effectively remember
the tax saved)
Profit percentage = 117% (For 3 years together)
RETURNS % PER YEAR = 39%
A Return of 39% per annum is something we cannot expect in any other form of
investment. Thus ELSS schemes make one of the best investment options.
SIP SYSTEMATIC INVESTMENT PLAN ROUTE FOR ELSS
One of the best ways to invest in ELSS is to save and invest on a regular basis. A
Systematic Investment Plan (SIP) in ELSS gives the best combination of investments
available to investors. The minimum investment in an ELSS through the SIP route can
be as small as Rs 500.
SIP helps an investor take advantage of the fluctuations in the stock
markets by rupee cost averaging. Rupee cost averaging can be explained with the help
of the following example. If Rs 1,000 is invested a month at a price of Rs 20 a unit, the
investor will have bought 50 units (1,000/20). But at a price of Rs 10 per unit, he will
have bought 100 units (1000/10). Investing a fixed sum regularly means averaging out
the cost, as the investor gets fewer units when the price goes up and more when the
price goes down. An SIP ensures that an investor buys more when the markets are
falling and less when it's peaking. But if an investor backs out when the markets are
falling, he won't be buying and this will not get him to average his price, the primary
reason behind the success of investing through the SIP route.
When markets are falling, it's psychologically difficult for an investor to
enter. On the other hand, when the market is at a peak, a lot of investors enter the
market. Due to this, the investor ends up buying high and selling low. So, it's very
important to continue with the SIP even when the markets are falling.
In the current volatile market, starting an SIP would be beneficial to an investor as he
can take the benefit of highs as well as the lows and can average out his purchases.
WHY SIP?
Mutual Fund investments are managed by qualified and experienced

professionals who have the expertise of investment techniques, backed by
dedicated investment research team
You can purchase scheme units at a lesser cost as most of the Asset
Management Companies (AMCs) charge less entry load (for some scheme
even NIL) for SIP investments, as compared to normal purchases in the scheme.
SIPs make the volatility in the market work in your favour. Since a fixed
amount is invested more units are purchased when a scheme NAV is low and
fewer units when the NAV is high. As a result, over a period of time these
market fluctuations are generally averaged. Thus the average cost of your
investment is often reduced.
Since you invest regularly, it makes you disciplined in your savings, which
leads to wealth accumulation.
CHAPTER 5- ANALYSIS AND FINDINGS
PERFORMANCE EVALUATION OF ELSS FUNDS

ON THE BASIS OF RISK ADJUSTED MEASURES:-
A. BETA
B. STANDARD DEVIATION
C. SHARPE RATIO
D. R-SQUARED
E. ALPHAS
A.PERFORMANCE EVALUATION OF ELSS FUNDS

ON THE BASIS OF BETA
Beta is a fairly commonly used measure of risk. It basically indicates the level of
volatility associated with the fund as compared to the benchmark. So quite naturally the
success of beta is heavily dependent on correlation between a fund and its benchmark.
Thus if the funds portfolio doesnt have a relation with the benchmark index then a
beta would be grossly inadequate. A beta that is greater than one means that the fund is
more volatile than the benchmark, while a beta of less than one means that the fund is
less volatile than the index. A fund with a beta very close to 1 means the funds
performance closely matches the index or benchmark. If, for example, a fund has a beta
of 1.03 in relation to the BSE Sensex, the fund has been moving 3% more than the
index. Therefore, if the BSE Sensex increased 10% the fund would be expected to
increase 10.30%.
Investors expecting the market to be bullish may choose funds exhibiting high
betas, which increase investors chances of beating the market. If the investor expects
the market to be bearish in the near future, the funds that have betas less than 1 are a
good choice because they would be expected to decline less in value than the index.
NAME OF ELSS SCHEME BETA RANKING
AXIS LONG TERM EQUITY FUND 0.90 2
RELIENCE TAX SAVER ELSS FUND 1.26 3
DSP BLACKROCK TAX SAVER FUND 1.05 2
BIRLA SUNLIFE TAX RELIEF 96 FUND 0.97 1
FRANKLIN INDIA TAX SHIELD FUND 0.87 2
BNP LONG TERM EQUITY FUND 1.09 3
INVESCO INDIA TAX FUND 1.01 NA
BETA
INTERPRETATION:-
BETA IS A MEASURE OF AN INVESTMENTS VOLATILITY VIS--VIS THE
MARKET. BETA OF LESS THAN 1 MEANS THAT THE SECURITY WILL BE
LESS VOLATILE THAN THE MARKET. A BETA OF GREATER THAN 1 IMPLIES
THAT THE SECURITY PRICE WILL BE MORE VOLATILE THAN THE MARKET.
ACCORDING TO BETA THE BEST ELSS FUND IS BIRLA SUNLIFE TAX RELIEF
96 FUND AND AT LAST ARE BNP LONG TERM EQUITY FUND AND RELIENCE TAX
SAVER ELSS FUND.
B.PERFORMANCE EVALUATION OF ELSS FUNDS
ON THE BASIS OF STANDARD DEVIATION
Standard Deviation allows you to evaluate the volatility of the funds. Put differently it
allows you to measure the consistency of he returns. Volatility is often a direct indicator
of the risk taken by the fund. The Standard Deviation of a fund measures this risk by
measuring the degree to which the fund fluctuates in relation to its mean return, the
average return of a fund over a period of time. A security that is volatile is also
considered higher risk because its performance may change quickly in either direction
at any moment. A fund that has a consistent four-year return of 3%, for example, would
have a mean, or average, of 3%. The Standard Deviations for this fund would then be
zero because the funds return in any given year does not differ formats four-tear mean
of 3%. On the other hand, a fund that in each of the last four years returned- 5%, 17%,
2% and 30% will have mean return of 11%.The fund Will also exhibit a high standard
deviation because each year the return of the fund differs from the mean return This
fund is therefore more risky because it fluctuates widely between negative and positive
returns within a short period.
NAME OF ELSS SCHEME STANDARD RANKING

DEVIATION
AXIS LONG TERM EQUITY FUND 13.72% 4
RELIENCE TAX SAVER ELSS FUND 5.89% 3
DSP BLACKROCK TAX SAVER FUND 15.59% 5
BIRLA SUNLIFE TAX RELIEF 96 FUND 16.10% 6
FRANKLIN INDIA TAX SHIELD FUND 3.95% 1
BNP LONG TERM EQUITY FUND 16.77% 7
INVESCO INDIA TAX FUND 4.57% 2
STANDARD DEVIATION
INTERPRETATION:-
Standard deviation is a statistical measure of the range of an investments
performance. When a mutual fund has a high standard deviation, it means
its range of performance is wide, implying greater volatility.
According to Standard Deviation the best ELSS fund is FRANKLIN INDIA

TAX SHIELD FUND, and at last is BNP LONG TERM EQUITY FUND.
C.PERFORMANCE EVALUATION OF ELSS FUNDS
ON THE BASIS OF SHARPE RATIO
William Sharpe created a metric for fund performance, which enables the ranking of
funds on risk-adjusted return basis. This measure is based on the comparison of excess
return per unit of risk, risk being measured by standard deviation. Excess return is
defined as the actual return of the fund less risk free rate. Higher the Sharpe ratio, better
the fund. Sharpe ratio indicates the quality of returns. It shows the return given by fund
per unit of risk it takes. It measures fund performance in terms of total risk. The Sharpe
ratio measures the return of a mutual fund compared to the risk free rate of return. The
risk free rate of return is the 91-day t-bill rate. This should be similar to money market
returns. Often this ratio is used to determine if a mutual fund is able to beat the money
market. The Trimark Select Growth Fund has a Sharpe ratio over the last 5 years of
0.57. The recent range of Sharpe Ratios for global equity funds went from as low a
1.11 to a high of 0.94. A positive Sharpe ratio means the fund did better on a risk
adjusted basis than the 91-day t-bill rate. In other words, the higher the Sharpe ratio, the
better. The Sharpe ratio tells you about history but it does not tell you anything about
the future. Just because a fund has a positive Sharpe ratio for the last 5 years does not
mean it will outperform money market instruments for the next 5 years.
NAME OF ELSS SCHEME SHARPE RANKING

RATIO
INVESCO INDIA TAX FUND 0.28 6
SHARPE RATIO
INTERPRETATION: -
The Sharpe is a measure of risk-adjusted returns. It is calculated using
standard deviation and excess return to determine reward per unit of risk.
According to Sharpe Ratio the best ELSS fund is AXIS LONG TERM
EQUITY FUND and at last place is RELIENCE TAX SAVER ELSS
FUND
D.PERFORMANCE EVALUATION OF ELSS FUNDS
ON THE BASIS OF R-SQUARED
The success of Beta is dependent on the correlation of a fund to its benchmark or its
index. Thus whilst considering the beta of any security, you should also consider
another statistic-R squared that measures the correlation. The R-squared of a fund
advises investor if the beta of a mutual fund is measured against an appropriate
benchmark. Measuring the correlation of a funds movements to that of an index, R-
squared describes the level of association between the funds volatility and market risk,
more specifically, the degree to which a funds volatility is a result of the day-to-day
fluctuations experienced by the overall market.
R-squared values range between 0 and 1, where 0 represents no correlation and 1
represents full correlation. If a funds beta has an R-squared value that is close to 1, the
beta of the fund should be trusted. On the other hand, an R-squared value that is less
than 0.5 indicates that the beta is not particularly useful because the fund is being
compared against an inappropriate benchmark
NAME OF ELSS SCHEME R- SQUARED RANKING

R-SQUARED
INTERPRETATION:-
R-Squared is a statistical measure that represents the percentage of a fund
or securitys movements that can be explained by movements in a
benchmark index.
According to R- Squared the best ELSS fund are two BNP LONG TERM
EQUITY FUND & INVESCO INDIA TAX FUND and at last is FRANKLIN INDIA
TAX SHIELD FUND.
E. PERFORMANCE EVALUATION OF ELSS FUNDS
ON THE BASIS OF ALPHAS
Alpha is the difference between the returns one would expect from a fund, given its
beta, and the return it actually produces. An alpha of 1.0 means the fund produces a
return 1% higher than its beta would predict. An alpha of -1.0 means the fund produces
a return 1% lower. If a fund returns more than its beta then it has a positive alpha and if
it return less, then it has a negative alpha. Once the beta of a fund is known, alpha
compares the funds performance to that of the benchmarks risk-adjusted returns. It
allows you to ascertain if the funds return outperformed the market, given the same
amount of risk.
The higher a funds risk level, the greater the returns it must generate in order to
produce a high alpha. Normally one would like to see a positive alpha for all of the
funds you own. But a high alpha does not means a fund is doing a bad job nor is the
vice versa true. Because alpha measures the out-performance related to beta. So the
limitations that apply to beta would also apply to alpha. Alpha can be used to directly
measure the value added or subtracted by a funds manager.
The accuracy of an alpha rating depends on two factors:

The assumption that market risk, as measured by beta, is the only risk measure
necessary;
The strength of the funds correlation to a chosen benchmark such as the BSE
Sensex or the Nifty
NAME OF ELSS SCHEME ALPHA RANKING

RELIENCE TAX SAVER ELSS FUND -2.95 4
DSP BLACKROCK TAX SAVER FUND -2.26 3
BIRLA SUNLIFE TAX RELIEF 96 FUND -3.54 5
FRANKLIN INDIA TAX SHIELD FUND -4.40 6
BNP LONG TERM EQUITY FUND -6.66 7
ALPHAS
INTERPRETATION: -
Alphas are perceived as a measurement of a portfolio managers
performance. The technical formula for calculating alpha is: (end price +
distribution price per share start price) / (start price)
According to ALPHAS the best ELSS fund is INVESCO INDIA TAX

FUND and at last place is BNP LONG TERM EQUITY FUND
PERFORMANCE EVALUATION OF ELSS FUNDS

ON THE BASIS OF RETURNS & AUM
A. 1 YEAR RETURN
B. 2 YEAR RETURN
C. 3 YEAR RETURN
D. 5 YEAR RETURN
E. AUM
A. PERFORMANCE EVALUATION OF ELSS FUNDS

ON THE BASIS OF 1 YEAR RETURN
NAME OF ELSS SCHEME RETURNS RANKING

(%)
*THE RETURNS WHICH ARE SHOWN IN THE TABLE IS ABSOLUTE IN TERMS OF LAST ONE
QUARTER
1 YEAR RETURN
INTERPRETATION:-
According to 1 YEAR RETURNS the best ELSS fund is RELIENCE TAX SAVER ELSS
FUND and at last is BNP LONG TERM EQUITY FUND
B.PERFORMANCE EVALUATION OF ELSS FUNDS

ON THE BASIS OF 2 YEAR RETURN

(%)
*THE RETURNS WHICH ARE SHOWN IN THE TABLE ARE NOT ABSOLUTE THEY ARE GIVEN
ACCORDING TO CAGR
2 YEAR RETURN
INTERPRETATION:-
According to 2 year returns basis the best ELSS fund is DSP BLACKROCK TAX SAVER
FUND and at last is BNP LONG TERM EQUITY FUND
C.PERFORMANCE EVALUATION OF ELSS FUNDS
ON THE BASIS OF 3 YEAR RETURNS

(%)
3 YEAR RETURN
INTERPRETATION:-
According to 3 YEAR RETURNS the best ELSS fund is BIRLA SUNLIFE TAX RELIEF
96 FUND and at last place is BNP LONG TERM EQUITY FUND
D.PERFORMANCE EVALUATION OF ELSS FUNDS
ON THE BASIS OF 5 YEAR RETURNS

(%)
5 YEAR RETURN
INTERPRETATION:-
According to 5 year returns the best ELSS Fund is AXIS LONG TERM EQUITY FUND
And at last place is BNP LONG TERM EQUITY FUND
E.PERFORMANCE EVALUATION OF ELSS FUNDS
ON THE BASIS OF AUM
NAME OF ELSS SCHEME AUM ( RS IN RANKING

CRORES)
AUM
INTERPRETATION:-
According to AUM the best ELSS fund is AXIS LONG TERM EQUITY FUND and at last
place is INVESCO INDIA TAX FUND.
FINDINGS OF THE STUDY
ON THE BASIS OF BETA THE BEST ELSS FUND IS:-
BIRLA SUNLIFE TAX RELIEF 96 FUND
ON THE BASIS OF STANDARD DEVIATION THE BEST FUND IS :-

FRANKLIN INDIA TAX SHIELD FUND
ON THE BASIS OF SHARPE RATIO THE BEST ELSS FUND IS:-

AXIS LONG TERM EQUITY FUND
ON THE BASIS OF R-SQUARED THE BEST ELSS FUND ARE:-

BNP LONG TERM EQUITY FUND
INVESCO INDIA TAX FUND
ON THE BASIS OF ALPHAS THE BEST ELSS FUND IS:-

ON THE BASIS OF 1 YEAR RETURN THE BEST ELSS FUND IS:-

RELIANCE TAX SAVER FUND
ON THE BASIS OF 2 YEAR RETURN THE BEST ELSS FUND IS :-

DSP BLACKROCK TAX SAVER FUND
ON THE BASIS OF 3 YEAR RETURN BEST ELSS FUND IS :-

BIRLA SUNLIFE TAX RELIEF 96 FUND
ON THE BASIS OF 5 YEAR RETURN BEST ELSS FUND IS:-

ON THE BASIS OF AUM THE BEST ELSS FUND IS :-
So the above are the different schemes which are coming out as best ELSS schemes in
the different criteria. But AXIS LONG TERM EQUITY FUND is the best ELSS scheme
as it has topped in the FOUR criterias which are chosen for the purpose of evaluation.
According to the study conducted via questionnaire the study which
conducted over 150 persons says that
Around 68% people have invested in mutual funds and they are an
employee of private firm.
The people who have invested in mutual funds and whose annual
income is Between 2 lakh to 4 lakh have invested more in
comparison to other categories.
Majority of people invest in Banks securities then real estate then

gold and at last mutual funds
Percentage to savings from total income less than 25%
Factors which people see while investing

Safety
Less risk
Liquidity
Return
Most of the people know about ELSS fund and the person comes in
tax slab have already invested in ELSS funds their investment
patter in ELSS fund is Monthly(SIP)
Before investing they look past performance, ratings of ratings

agency and mostly name of the AMC.
They all get information about the funds from the financial
consultants and financial institutions and at last form TV and
internet.
According to the survey the best fund is AXIS LONG TERM

EQUITY FUND as it gives decent returns and the name of the
AMC is well known after this BIRLA SUNLIFE TAX RELEIF 96
FUND and INVESCO INDIA TAX FUND comes to the 2nd
position.
BIBLIOGRAPHY
www.amfiindia.com
www.sebi.gov.in
www.sbimf.com
www.mutualfundsindia.com
www.valueresearchonline.com
www.utimf.com
www.hdfcmf.com
www.birlamf.com
www.licmf.com
www.icicimf.com
REFERENCE BOOKS:
FINANCIAL INSTITUTIONS AND MARKETS - L.M.BHOLE

INVESTMENT MANAGEMENT - V.K.BHALLA
ANNEXRE
1- FACTSHEET
BIRLA SUN LIFE TAX RELIEF 96
AMC BIRLA SUN LIFE ASSET MANAGEMENT

COMPANY LTD
AN OPEN-ENDED EQUITY LINKED SAVINGS
OBJECTIVE SCHEME (ELSS) WITH THE OBJECTIVE OF LONG
TERM GROWTH OF CAPITAL THROUGH A
PORTFOLIO WITH A TARGET ALLOCATION OF 80%
EQUITY, 20% DEBT AND MONEY MARKET
SECURITIES
LAUNCH DATE MARCH 1996
FUND MANAGER AJAY GARG
MIN INVESTMENT AMOUNT 500
ENTRY LOAD NIL
NIL
EXIT LOAD
NAME OF HOLDING % NET ASSETS
TOP 5 HODINGS
RELIANCE INDUSTRIES 6.84
LARSEN & TOUBRO 6.43
RELIANCE INFRASTRUCTURE 4.91
INFOSYS TECHNOLOGIES 4.73
JINDAL STEEL & POWER 4.34
TOP 5 SECTORS SECTORS % NET ASSET
FINANCIAL 24.23
ENERGY 17.46
METALS 10.38
ENGINEERING 10.18
TECHNOLOGY 7.30
BENCHMARK S&P BSE 200
NET ASSETS AS ON 30 MAY 2017 RS. 2432.88 CRORE

RISK ADJUSTED MEASURES
(As on 30 MAY 2017)
BETA STANDARD SHARPE R- ALPHAS

DEVIATION RATIO SQUARED
0.97 16.10% 0.49 0.94 1.18
RETURNS
(AS ON 30 MAY 2017)
1 YEAR 2 YEAR 3 YEAR 5 YEAR

22.60 % 13.90 % 19.60 % 23.02 %
AMC AXIS ASSET MANAGEMENT COMPANY LTD
TO GENERATE INCOME AND LONG-TERM

OBJECTIVE CAPITAL APPRECIATION FROM A DIVERSIFIED
PORTFOLIO OF PREDOMINANTLY EQUITY AND
EQUITY-RELATED SECURITIES. HOWEVER,
THERE CAN BE NO ASSURANCE THAT THE
INVESTMENT OBJECTIVE OF THE SCHEME WILL
BE ACHIEVED.
LAUNCH DATE 29 December 2009
FUND MANAGER JINESH GOPANI
MIN INVESTMENT AMOUNT 500
ENTRY LOAD NIL
NIL
EXIT LOAD
TOP 5 HODINGS
RELIANCE PETROLEUM 3.96
INDIAN OIL CORP. 3.94
JAI PRAKASH ASSOCIATES 3.74
ENERGY 20.51
SERVICES 10.56
METALS 9.95
CONSTRUCTION 8.80
ENGINEERING 8.67
BENCHMARK S&P BSE200

(As on 30 MAY 2017)

0.90 13.72 1.31 0.93 -2.95
RETURNS
(As on 30 MAY 2017)

17.70 % 10.60 % 18.10 % 24.70 %
RELIANCE TAX SAVER (ELSS) FUND
AMC RELIANCE NIPPON LIFE ASSET

MANAGEMENT LTD
TO GENERATE LONG TERM CAPITAL
OBJECTIVE APPRECIATION FROM A PORTFOLIO
THAT IS INVESTED PREDOMINANTLY IN EQUITY
AND EQUITY-RELATED
INSTRUMENTS.
LAUNCH DATE 21 September 2005
FUND MANAGER ASHWANI KUMAR
MIN INVESTMENT AMOUNT RS 500
ENTRY LOAD NIL
EXIT LOAD NIL

TOP 5 HOLDINGS NAME OF HOLDING % NET ASSETS
ICICI BANK 6.19

STATE BANK OF INDIA 4.60
BLUE STAR 3.67
FINANCIAL 16.55
FMCG 12.95
ENGINEERING 11.71
AUTOMOBILE 6.21
TECHNOLOGY 6.18
BENCHMARK S&P BSE100

(AS ON 30 MAY 2017)

1.26 5.89 0.26 0.90 -3.54
RETURNS
(AS ON 30 MAY 2017)

28.09 % 12.70 % 16.50 % 23.00 %
DSP BLACKROCK TAX SAVER FUND
AMC HDFC ASSET MANAGEMENT COMPANY LTD
TO ACHIEVE LONG TERM GROWTH OF CAPITAL.

OBJECTIVE
LAUNCH DATE 17 November 2006
FUND MANAGER ROHIT SINGHANIA
ENTRY LOAD NIL
EXIT LOAD NIL

TOP 5 HODINGS
ICICI BANK 6.38
CROMPTON GREAVES 4.35
DR. REDDY'S LAB 4.18
BHARTI AIRTEL 3.83
FINANCIAL 19.79
HEALTH CARE 11.04
ENERGY 9.42
TECHNOLOGY 9.31
FMCG 8.52
BENCHMARK CNX 500

(AS ON 30 MAY 2017)

1.05 15.59% 1.25 0.95 -2.26
RETURNS
(AS ON 30 MAY 2017)

27.90 % 17.01 % 17.60 % 22.90 %
FRANKLIN INDIA TAX SHIELD FUND
AMC FRANKLIN TEMPLETON ASSET

MANAGEMENT (INDIA) PVT. LTD
THE FUND IS A BLEND OF LARGE AND
OBJECTIVE MID/SMALL CAP FUND, WITH THE OBJECTIVE
OF BEING ABLE TO PROVIDE STEADY
RETURNS AND MAINTAINED EQUITY
EXPOSURE OF 93%.
LAUNCH DATE 10 APRIL 1999
FUND MANAGER LAKSHMIKANTH REDDY & R. JANAKIRAMAN
ENTRY LOAD NIL
EXIT LOAD NIL

TOP 5 HODINGS
WIPRO 6.17
CADILA HEALTHCARE 5.03
NTPC 4.93
TOP 5 SECTORS SECTORS % NET ASSETS
ENERGY 16.56
TECHNOLOGY 12.42
ENGINEERING 11.44
HEALTH CARE 10.34
FINANCIAL 9.79
BENCHMARK CNX 100

(AS ON 30 MAY 2017)

0.87 3.95% 1.14 0.87 -4.40
RETURNS
(AS ON 30 MAY 2017)
17.50% 11.10% 17.40% 25.50%
BNP LONG TERM EQUITY FUND
AMC BNP PARIBAS ASSET

MANAGEMENT
OBJECTIVE EARLIER KNOWN AS DHANTAXSAVER '97, THE
SCHEME
SEEKS MAXIMUM CAPITAL GROWTH WITH
EQUITY ALLOCATION UP TO 85 PER CENT OF
THE CORPUS. ALLOCATION TO DEBENTURES
AND MONEY MARKET INSTRUMENTS CAN BE
UP TO 15% EACH.
LAUNCH DATE 20 December 2005
FUND MANAGER KARTHIKRAJ LAKSHMANAN & ABHIJEET

DEY
MIN INVESTMENT AMOUNT RS. 500
ENTRY LOAD NIL
EXIT LOAD NIL

TOP 5 HODINGS
SAIL 8.11
RELIANCE COMMUNICATIONS 5.25
TOP 5 SECTORS SECTORS % NET ASSETS
FINANCIAL 24.42
ENERGY 19.91
COMMUNICATION 13.94
DIVERSIFIED 13.31
METALS 12.11
BENCHMARK NIFTY 200

(AS ON 30 MAY 2017)
Beta Standard Sharpe ratio R-Squared Alphas

Deviation
1.09 16.77% 0.88 0.96 -6.66
RETURNS
(AS ON 30 MAY 2017)

17.00 % 8.60 % 14.30 % 19.90 %
AMC INVESCO ASSET MANAGEMENT (INDIA)

PRIVATE LTD.
OBJECTIVE THE PRIME OBJECTIVE OF THIS SCHEME IS TO

DELIVER THE BENEFIT OF INVESTMENT IN A
PORTFOLIO OF EQUITY SHARES, WHILE
OFFERING DEDUCTION ON SUCH INVESTMENTS
MADE IN THE SCHEME UNDER SECTION 80COF
THE INCOME-TAXACT, 1961. IT ALSO SEEKS TO
DISTRIBUTE INCOME PERIODICALLY DEPENDING
ON
DISTRIBUTABLE SURPLUS.
LAUNCH DATE 20 November 2006
FUND MANAGER TAHER BADSHAH & VINAY PAHARIA
ENTRY LOAD NIL
EXIT LOAD NIL

TOP 5 HODINGS NAME OF HOLDING % NET ASSETS

ICICI BANK 3.68
JINDAL STEEL & POWER 3.44
TOP 5 SECTORS SECTORS %NET ASSETS

ENERGY 20.47
FINANCIAL 17.60
ENGINEERING 10.47
DIVERSIFIED 9.35
METALS 8.97
BENCHMARK S&P BSE 100

(AS ON 30 MAY 2017)

1.01 4.57% 0.28 0.96 1.20
RETURNS
(AS ON 30 MAY 2017)

20.20 % 11.30 % 17.00 % 21.30 %

Comparative Analysis About Different Schemes of Elss (Tax Saving Scheme) in Amc

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Comparative Analysis About Different Schemes of Elss (Tax Saving Scheme) in Amc

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CHAPTER I- INTRODUCTION

AN INTRODUCTION TO MUTUAL FUNDS

DEFINITION OF MUTUAL FUNDS

TEEN ANALYST ADVICE:

HISTORY OF MUTUAL FUNDS

FIRST PHASE - 1964-87

SECOND PHASE - 1987-1993 (ENTRY OF PUBLIC SECTOR

FOURTH PHASE - SINCE FEBRUARY 2003

STRUCTURE OF MUTUAL FUND

GROWTH OF MUTUAL FUNDS IN INDIA

THE GRAPH INDICATES THE GROWTH OF ASSETS OVER THE YEARS:

SOME FACTS FOR THE GROWTH OF MUTUAL FUNDS IN INDIA

STEPS TO CHOOSE RIGHT MUTUAL FUND FOR

SET LONG-TERM GOALS.

LOOK FOR A WELL-MANAGED FUND.

GET SOURCES OF INFORMATION :PROSPECTUS:

STATEMENT OF ADDITIONAL INFORMATION ("SAI")

LOOKING BEYOND A FUND'S NAME

DETERMINE YOUR SELECTION CRITERIA AND

CHECK FOR CONSISTENCY

KNOW THE RISKS

AVOID SALES CHARGES

LOOK FOR LOW EXPENSE RATIOS

ASK THE EXPERTS

CALL OR WRITE FOR A PROSPECTUS

MAKE YOUR PURCHASE

CONTINUALLY BUY MORE SHARES

HOW TO FILL UP THE APPLICATION FORM OF A MUTUAL

TYPES OF MUTUAL FUNDS

MUTUAL FUNDS CAN CLASSIFY ON THE FOLLOWING BASES:-

RISKS ASSOCIATED WITH MUTUAL FUNDS

INVESTORS HAVE ACCESS TO PROFESSIONAL

DISADVANTAGES OF MUTUAL FUNDS

SECURITIES AND EXCHANGE BOARD OF INDIA

ASSOCIATION OF MUTUAL FUNDS IN INDIA

SECURITIES AND EXCHANGE BOARD OF INDIA

ROLE OF SEBI IN MUTUAL FUND INDUSTRY

enhanced level of investor protection

ASSOCIATION OF MUTUAL FUNDS IN INDIA (AMFI)

Hind Bank Ltd (1958)

PRODUCTS AND SERVICES

BARODA PIONEER ASSET MANAGEMENT COMPANY LIMITED

Chief Executive Officer

Mr. Anthony Heredia

Mr. Kiran Deshpand Chief Operating Officer and Chief

Mr. Alok Sahoo Head, Fixed Income

Mr. Dipak Acharya Fund Manager Equity

Ms. Hetal P. Shah Fund Manager (Debt)

Ms. Farhana Mansoor Head - Compliance and Company

Mr. Amitabh Ambastha Investor Relations Officer

SCHEMES IN BARODA PIONEER MUTUAL FUND

Different Types of Funds Offered by Baroda Pioneer Mutual Fund

1. Baroda Pioneer Equity Fund

Baroda Pioneer ELSS96

2. Baroda Pioneer Debt Income Funds

Baroda Pioneer Income Fund

3. Baroda Pioneer Liquid Fund

Why Select Baroda Pioneer Mutual Fund?

CHAPTER IV- RESEARCH METHODOLOGY

OBJECTIVE OF THE STUDY

SCOPE OF THE STUDY

IMPORTANCE OF THE STUDY

TOOLS FOR EVALUATING PERFORMANCE