PROJECT REPORT

(Submitted for the Degree of B.Com, Honors in Accounting & Finance Under the
University of Calcutta)

TOPIC OF THE STUDY

ANALYSIS OF MUTUAL FUND

TITLE OF THE PROJECT

A STUDY OF MUTUAL FUND IN INDIA

SUBMITTED BY

SAGAR KHATUA

CU REGISTRATION NO - 122-1111-0320-18

CU ROLL NO - 181122-21-0412

COLLEGE ROLL NO – 481

SUPERVISED BY

N. GUPTA

CITY COLLEGE OF COMMERCE AND BUSINESS ADMINISTRATION

MONTH & YEAR OF SUBMISSION

JULY 2021

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 ACKNOWLEDGEMENT
It gives me immense pleasure to present on “ANALYSIS OF MUTUAL FUND” carried out in
partial fulfilment of B.COM semester VI (Honours) study and working on this project was an
incredible experience that will have a tremendous impact on my career.

No work can be carried out without the help and guidance of various people. I would like to take
the opportunity to express my gratitude to those who have been helpful to me in completing the
project report.

I would like to express my sincere thanks to my Principal Dr. Sandip Kumar Paul. my
project Supervisor Niloy Gupta sir for a regular follow up and valuable suggestions provided
throughout.

Deepest appreciation and thanks go to my respective family for their patience and understanding
and also the respondents for their time and cooperation by filling up the questionnaire without
which the project report could not be completed

Sagar Khatua

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Annexure-1

Supervisor’s Certificate

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 TABLE OF CONTENTS
INDEX

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 INTRODUCTION
BACKGROUND
A strong financial market with broad participation is essential for a developed economy. With
this broad objective India‟s first mutual fund was establishment in 1963, namely, Unit Trust of
India (UTI), at the initiative of the Government of India and Reserve Bank of India „with a view
to encouraging saving and investment and participation in the income, profits and gains
accruing to the Corporation from the acquisition, holding, management and disposal of
securities’.

In the last few years the MF Industry has grown significantly. The history of Mutual Funds in
India can be broadly divided into five distinct phases as follows:

FIRST PHASE (1964-1987)

The Mutual Fund industry in India started in 1963 with formation of UTI in 1963 by an Act of
Parliament and functioned under the Regulatory and administrative control of the Reserve Bank
of India (RBI). 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. Unit Scheme
1964 (US ‟64) was the first scheme launched by UTI. At the end of 1988, UTI had ₹ 6,700 crores
of Assets Under Management (AUM).

SECOND PHASE (1987-1983) – Entry of public sector in Mutual funds

The year 1987 marked the entry of 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. 1987), Punjab National Bank Mutual Fund (Aug. 1989), Indian
Bank Mutual Fund (Nov 1989), Bank of India (Jun 1990), Bank of Baroda Mutual Fund (Oct.
1992). 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 MF industry had assets under management of ₹47,004
crores.

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THIRD PHASE (1993-2003) – Entry of privet sector in Mutual funds

The Indian securities market gained greater importance with the establishment of SEBI in April
1992 to protect the interests of the investors in securities market and to promote the development
of, and to regulate, the securities market.

In the year 1993, the first set of SEBI Mutual Fund Regulations came into being for all mutual
funds, except UTI. The erstwhile Kothari Pioneer (now merged with Franklin Templeton MF)
was the first private sector MF registered in July 1993. With the entry of private sector funds in
1993, a new era began in the Indian MF industry, giving the Indian investors a wider choice of
MF products. The initial SEBI MF Regulations were revised and replaced in 1996 with a
comprehensive set of regulations, viz., SEBI (Mutual Fund) Regulations, 1996 which is currently
applicable.

The number of MFs increased over the years, with many foreign sponsors setting up mutual
funds in India. Also the MF industry witnessed several mergers and acquisitions during this
phase. As at the end of January 2003, there were 33 MFs with total AUM of ₹1,21,805 crores,
out of which UTI alone had AUM of ₹44,541 crores.

FORTH PHASE ( FEB 2003- APR 2014)

In February 2003, following the repeal of the Unit Trust of India Act 1963, UTI was bifurcated
into two separate entities, viz., the Specified Undertaking of the Unit Trust of India (SUUTI) and
UTI Mutual Fund which functions under the SEBI MF Regulations. With the bifurcation of the
erstwhile UTI and several mergers taking place among different private sector funds, the MF
industry entered its fourth phase of consolidation.

Following the global melt-down in the year 2009, securities markets all over the world had
tanked and so was the case in India. Most investors who had entered the capital market during
the peak, had lost money and their faith in MF products was shaken greatly. The abolition of
Entry Load by SEBI, coupled with the after-effects of the global financial crisis, deepened the
adverse impact on the Indian MF Industry, which struggled to recover and remodel itself for over

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two years, in an attempt to maintain its economic viability which is evident from the sluggish
growth in MF Industry AUM between 2010 to 2013.

FIFTH PHASE ( CURRENT PHASE – SINCE MAY 2014 )

Taking cognisance of the lack of penetration of MFs, especially in tier II and tier III cities, and
the need for greater alignment of the interest of various stakeholders, SEBI introduced several
progressive measures in September 2012 to "re-energize" the Indian Mutual Fund industry and
increase MFs‟ penetration.

In due course, the measures did succeed in reversing the negative trend that had set in after the
global melt-down and improved significantly after the new Government was formed at the
Center.

Since May 2014, the Industry has witnessed steady inflows and increase in the AUM as well as
the number of investor folios (accounts).

 The Industry‟s AUM crossed the milestone of ₹10 Trillion (₹10 Lakh Crore) for the
first time as on 31st May 2014 and in a short span of about three years the AUM size
had increased more than two folds and crossed ₹ 20 trillion (₹20 Lakh Crore) for the first
time in August 2017. The AUM size crossed ₹ 30 trillion (₹30 Lakh Crore) for the first
time in November 2020.

 The overall size of the Indian MF Industry has grown from ₹ 7.31 trillion as on 31st May
2011 to ₹ 33.06 trillion as on 31st May 2021, more than 4½ fold increase in a span of 10
years.

 The MF Industry‟s AUM has grown from ₹ 13.82 trillion as on May 31, 2016 to ₹33.06
trillion as on May 31, 2021, more than 2 fold increase in a span of 5 years.

 The no. of investor folios has gone up from 4.84 crore folios as on 31-May-2016 to 10.04
crore as on 31-May-2021, more than 2 fold increase in a span of 5 years.

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  On an average 8.66 lakh new folios are added every month in the last 5 years since May
2016.

The growth in the size of the Industry has been possible due to the twin effects of the regulatory
measures taken by SEBI in re-energising the MF Industry in September 2012 and the support
from mutual fund distributors in expanding the retail base.

MF Distributors have been providing the much needed last mile connect with investors,
particularly in smaller towns and this is not limited to just enabling investors to invest in
appropriate schemes, but also in helping investors stay on course through bouts of market
volatility and thus experience the benefit of investing in mutual funds.

MF distributors have also had a major role in popularising Systematic Investment Plans (SIP)
over the years. In April 2016, the no. of SIP accounts has crossed 1 crore mark and as on 31st
May 2021 the total no. of SIP Accounts are 3.88 crore.

WHAT ARE MUTUAL FUNDS ??

A mutual fund is a collective investment vehicle that collects & pools money from a number of
investors and invests the same in equities, bonds, government securities, money market
instruments.

The money collected in mutual fund scheme is invested by professional fund managers in stocks
and bonds etc. in line with a scheme‟s investment objective. The income / gains generated from
this collective investment scheme are distributed proportionately amongst the investors, after
deducting applicable expenses and levies, by calculating a scheme‟s “Net Asset Value” or NAV.
In return, mutual fund charges a small fee .In short, mutual fund is a collective pool of money
contributed by several investors and managed by a professional Fund Manager.

Mutual Funds in India are established in the form of a Trust under Indian Trust Act, 1882, in
accordance with SEBI (Mutual Funds) Regulations, 1996.The fees and expenses charged by the
mutual funds to manage a scheme are regulated and are subject to the limits specified by SEBI.

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 JUSTIFICATION OF THE STUDY

The main purpose of doing this project was to know about mutual fund and its functioning. This
helps to know in details about mutual fund industry right from its inception stage, growth and
future prospects. It also helps in understanding different schemes of mutual funds. Because my
study depends upon prominent funds in India and their schemes like equity, income, balance as
well as the returns associated with those schemes. The project study was done to ascertain the
asset allocation, entry load, exit load, associated with the mutual funds. Ultimately this would
help in understanding the benefits of mutual funds to investors

REVIEW OF LITERATURE

Literature on mutual fund performance evaluation is enormous. A few research studies that have
influenced the preparation of this project substantially are discussed in this section.
L.M Bhole and his book “FINANCIAL INSTITUTIONS AND MARKETS” has examined that the
information of different type of scheme of mutual fund like open ended scheme, close ended scheme,
debt scheme, balanced scheme.

V.K.Bhalla and his book “INVESTMENT MANAGEMENT” deals with concept and theories of risk
factor of mutual fund have been elaborately discussed in the book.

Sushil Mukherjee‟s book has studies the various type of advantages of mutual fund and also examined
that how the risk factor of mutual fund influenced the investment of mutual
fund.

Abhipsa Mishra and his book “INDIAN MUTUAL FUND AND MARKET DEVLOPMENT IN INDIA”
concerned with history of mutual fund as well as how mutual fund industry grow and developed and also
deals with how mutual fund industry influenced with a increase the saving of Household savings.

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 OBJECTIVE OF THE STUDY

• To give a brief idea about the benefits available from Mutual Fund investment

• To give an idea of the types of schemes available.

• To discuss about the market trends of Mutual Fund investment.

• To study some of the mutual fund schemes and analyse them

• Observe the fund management process of mutual funds

• Explore the recent developments in the mutual funds in India

• To give an idea about the regulations of mutual funds

RESEARCH & METHODOLOGY

Research Methodology is a systematic method of discovering new facts or verifying old facts,
their sequence, inter-relationship, casual explanation and the natural laws which governs them.
There are mainly two types of research methodology i.e. Primary research and Secondary
research.
To achieve the objective of studying the stock market data has been collected
This study is completely based on the secondary data. This data is collected from various sources
especially from the journals, magazines

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