Canara Sip

A STUDY ON MANAGING INVESTMENT
PORTFOLIO THROUGH SYSTEMATIC

INVESTMENT PLAN IN MUTUAL FUNDS
By:-
Jyothi Acharya -122601056

Nikita L. DSouza- 122602032
Department of Commerce
BBM (E-Banking and Finance)
&
(Financial Markets)
DEPARTMENT OF COMMERCE,
MANIPAL UNIVERSITY,
MANIPAL- 576104,
KARNATAKA, INDIA.
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DECLARATION
We, Jyothi Acharya (122601056), student of BBM [e-Banking & Finance], and Nikita L.
DSouza(122602032), student of BBM [Financial Markets], Department of Commerce, Manipal
University, declare that the Project Report entitled A Study On Managing Investment Portfolio
Through Systematic Investment Plan In Mutual Funds, being submitted to the Department of
Commerce, Manipal University in partial fulfillment of the requirements for the award of BBM
[e-Banking & Finance] & [Financial Markets], is our original work and the same was not earlier
submitted to any other Degree/Diploma/Fellowship or any other similar title or prizes.
Name: Jyothi Acharya Name: Nikita L. DSouza
Registration No:- 122601056 Registration No:- 122602032

Date:- Date:-
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ACKNOWLEDGEMENT
A summer project is a golden opportunity for learning and self-development. We consider
ourselves very lucky and honored to have so many wonderful people lead us through in
completion of this project.
We Nikita L. DSouza and Jyothi Acharya, students of Department Of Commerce, Manipal

University, BBM (E-Banking & Finance) & (Financial Markets) take this opportunity to express
our profound gratitude and deep regards to Mr. Sandeep Shenoy, Head of Department (HOD),
who has kept the internship as part of our degree which has led to great experience and immense
attained knowledge which has helped us attain corporate experience. And we would like to thank
our guide Mr. Vikram Baliga Sir for his exemplary guidance, monitoring and constant
encouragement throughout the course of this thesis. The blessing, help and guidance given by
him time to time shall carry us a long way in the journey of life on which we are about to
embark.
We are highly indebted to Canara Robeco for their guidance and constant supervision as well as
for providing necessary information regarding the project & also for their support in completing
the project.
We are obliged to the staff members of Canara Robeco, for the valuable information provided
by them in their respective fields. We are grateful for their cooperation during the period of our
assignment.
We express our deepest thanks to the Mrs. Upasna Saboo, Head of Human Resource for giving
us the opportunity to work in this company. Mr. Sharath Shetty Sir, our project guide, Mr. K.
Gopi Sir and Mr. Ravi Kumar Sir for taking part in useful decision & giving us necessary
advices and guidance and making the resources available at the right time and providing valuable
insights leading to the successful completion of our project.
We would also like to thank all the faculty members of Department Of Commerce, Manipal
University for their critical advice and guidance without which this project would not have been
possible.
Last but not the least we place a deep sense of gratitude to our family members and friends who
have been constant source of inspiration during the preparation of this project work.
With the help of all the people mentioned above we now have greater confidence in the things
that we are capable of achieving in the near future.
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Jyothi Acharya Nikita DSouza
LIST OF TABLES AND CHARTS

Sr. No. Tables and Charts Page No.
1 Structure of Mutual Funds 11
2 Concept of Mutual Funds 16
3 Classification of Mutual Funds on the basis of its structure 21
4 Classification on types of Mutual Funds 26
5 Assets Under Management- Growth Chart 36
6 Table 1: AUM of Indian Mutual Fund Industry 37
7 AUM of Indian Mutual Fund Industry Chart 38
8 Net inflow/outflow of AUM 40
9 Table 2: Resource mobilization by private and public sector by Mutual Fund 41
10 Growth in Mutual Fund 41
11 Market share of leading Mutual Funds 42
12 AUM composition by product category 43
13 AUM composition by investor segment 44
14 Industry AUM comparison 45
15 Mutual Fund Industry 46-47
16 Business module 53
17 Canara Robeco Schemes 59-77
18 Benefit of SIP over Lumpsum 83
19 Canara Robeco Emerging Equities 84-87
20 SIP Building wealth 87
21 Comparing SIP with other investment 87
22 Comparing SIP with Lumpsum 88-89
23 Steps in SIP 91-92
24 Case study of SIP 95-97
25 SIP Calculator 97-98
26 Auto Debit Form 99-100
TABLE OF CONTENTS
Chapters Topics Pages
Chapter 1 Introduction 7
Introduction to Mutual Funds 8
Characteristics of Mutual Funds 10
Structure of Mutual Funds 11
Advantages of Mutual Funds 14
Disadvantages of Mutual Funds 15
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Concept of Mutual Funds 16
History of Mutual Funds 17
Chapter 2 Classification of Mutual Fund 20
Classification on the basis of structure 22
Classification on the basis of types of Mutual Funds 26
Classification according to investment objective 27
How investors choose between funds 30
Chapter 3 Mutual Fund Industry trends 34
Mutual Fund Industry trends 35
AUM growth 36
Mutual Fund industry crosses Rs 10 lakh crores in May 39
Market share of leading Mutual Funds 42
AUM distributions by AMCs 45
Chapter 4 Review of Literature 48
Chapter 5 Company Profile 51
Canara Robeco 52
Business Module 53
Performance measure 56
Products of Canara Robeco 58
Schemes of Canara Robeco 59
Facilities provided by Canara Robeco 78
Chapter 6 Systematic Investment Plan 81
Systematic Investment Plan- Introduction 82
Canara Robeco- NAV Emerging Equities 84
Comparing SIP 87
Comparison between sip and Lumpsum investment 88
Why SIP 90
Steps in SIP 91
Benefits of SIP 93
Disadvantages of SIP 94
Case study SIP 95
Sip calculator 97
SIP Auto Debit Form 98
Conditions under which sip would yield /no0t yield positive results 101
Common misconception of SIP 103
Findings from the study 104
Conclusion 105
Bibliography 106
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NEED FOR THE STUDY
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OBJECTIVE OF THE STUDY
To study and understand the workings of Systematic Investment Planning in Mutual
Funds with special reference to Canara Robeco.

To make a comparison of Systematic Investment Planning and Lumpsum investments in
the Portfolio of customers.
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Chapte
r1
Introduction
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Introduction to Mutual Funds
Mutual fund is a pool of funds which is divided into units of equal value and sold to investing
public and the funds so collected are utilized for collective investments in various capitals and
money market instrument. In todays market people invest money to gain more. So when they
take into account, they mostly look out for Investment Company where they can get more
income.
Investment companies can be classified into closed-end and open-end investment companies.
Closed-end is when it is readily transferable in the market. Open-end funds sell their own shares
to investors and ready to buy back their old shares. If we talk about the investment options today,
in India we have so many investment companies like UTI, LIC etc., all have their own special
ways of servicing the customers. The investors also feel that they are worth to be the part of that
company. These days people mainly look for avoiding tax so normally they look out for some
investments which can help them in doing so. When it comes to this point of view, people mainly
look out for mutual fund.
Mutual fund is a trust at law; it is a special type of managed, pooled portfolio financial company
or financial service organization that sells shares/units/stocks in itself, to the public to obtain its
resources and it invests the savings so mobilized or pooled in a large, diversified, & sound
portfolio of equity shares, bonds, money market instruments etc., Redeemable trust certificates
are sold to investors at net asset value (NAV) plus a small commission. All interest/dividend and
principal repayments are distributed to the holders of the certificates.
Mutual Funds are a vehicle for retail and institutional investors to benefit from the capital
markets. They offer different kinds of schemes to cater to various types of investors, retail,
companies and institutions. Mutual fund schemes are offered to investors for the first time
through a New Fund Offering (NFO). Thereafter, close-ended schemes stop receiving money
from investors, though these can be bought on the stock exchanges where they are listed. Open-
ended schemes sell and re-purchase their units on an ongoing basis. Know Your Client (KYC)
process is centralized in the mutual fund industry. Therefore, the Investor needs to complete the
formalities only once with the designated KYC service provider. The KYC confirmation thus
obtained is valid for investment with any mutual fund.
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A feature of mutual fund schemes is the low minimum investment amount as low as Rs.1,000
for some schemes. This makes it possible for small investors to invest. The expense ratio (which
is not more than 2.5% in many schemes, especially liquid and index funds and goes below 0.05%
in some schemes being low also helps in making mutual funds a good instrument for building
wealth over the long term.
Mutual funds are closely regulated by the Securities & Exchange Board of India (SEBI). The
applicable regulation is the SEBI (Mutual Fund) Regulations, 1996. Under the regulations, the
Board of Trustees performs an important role in protecting the interests of investors in mutual
fund schemes. Another protective feature is the checks and balances in the mutual fund system.
For instance, while the Asset Management Company (AMC) handles the investment
management activity, the actual custody of the investments is with an independent custodian.
Investor records are mostly maintained by the registrar and transfer agents (RTAs), who offer
their services to multiple mutual funds. In some cases, the AMC itself maintains the investor
records.
SEBI also regulates the investments that mutual fund schemes can make. For instance,
commodities other than gold are not permitted. Even within the permissible investments, SEBI
has prescribed limits for different kinds of schemes. Rigorous standards of disclosure and
transparency make sure that investors get a complete view of their investments on a regular
basis. Consolidated Account Statements, mandated by SEBI, ensure that the investors
investments across various mutual funds in the industry are consolidated into a single monthly
statement. Even those investors, who do not transact, receive their statement of accounts every 6
months.
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Characteristics of MF
A mutual fund actually belongs to the investors who have pooled their funds. The
ownership of the MF is in the hands of the investors.
A MF is managed by investment professionals and other service providers, who earn a

fee for their services from the fund.
The pool of funds is invested in a portfolio of marketable investment. The value of the
portfolio is updated every day.
The investors share in the fund is denominated by units. The value of the units changes
with change in the portfolios value, every day. The value of one unit of investment is
called as the net assets value or NAV.
The investment portfolio of the Mutual fund is vested according to the stated Investment
objectives of the fund.
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.
Mutual fund shares are redeemable, meaning investors can sell their shares back to the
fund (or to broker acting for the fund).
Mutual Funds generally create and sell new shares to accommodate new investors. IN
other words, it sells its 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.
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Structure of Mutual Funds
A mutual fund is set up in the form of a trust, which has sponsor, trustees, Asset Management
Company (AMC) and custodian. The trust is established by a sponsor or more than one sponsor
who is like promoter of a company. The trustees of the mutual fund hold its property for the
benefit of the unit holders. Asset Management Company (AMC) approved by SEBI manages the
funds by making investments in various types of securities. Custodian, who is registered with
SEBI, holds the securities of various schemes of the fund in its custody. The trustees are vested
with the general power of superintendence and direction over AMC. They monitor the
performance and compliance of SEBI Regulations by the mutual fund.
SEBI Regulations require that at least two thirds of the directors of trustee company or board of
trustees must be independent i.e. they should not be associated with the sponsors. Also, 50% of
the directors of AMC must be independent. All mutual funds are required to be registered with
SEBI before they launch any scheme. However, Unit Trust of India (UTI) is not registered with
SEBI (as on January 15, 2002).
The Structure of Mutual Funds
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Securities Exchange Board of India
Set up in the year 1992, SEBI Act was passed. The objectives of SEBI are to protect the
interest of investors in securities and to promote the development of and to regulate the securities
market
Role of SEBI
Formulates policies and regulates the mutual funds to protect the interest of the investors.
SEBI notified regulations for the mutual funds in 1993.
SEBI has also issued guidelines to the mutual funds from time to time to protect the interests
of investors.
All mutual funds whether promoted by public sector or private sector entities including those
promoted by foreign entities are governed by the same set of Regulations.
All mutual funds are subject to monitoring and inspections by SEBI.
Sponsor -
They are the Promoters of the Mutual Fund
They are given the charge to form a Trust and appoint Trustees. They are also responsible for
appointing the Custodian and AMC
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Eligibility Criteria for Selection of Sponsors: Over5 year of sound financial Track Record 3
Year Profit making record at least 40% contribution to AMC Capital
He must have net worth in the immediate preceding year more than the capital contribution
in AMC.
Trustees Trustee Company -
Fiduciary Responsibility for investor funds as a Board of Trustees or Trustee Company
Appointed by Sponsor with SEBI approval.
They in turn appoint an Asset Management Company (AMC) to manage the portfolio of
securities registered ownership of investments is with Trust. Trustees hold the Unit Holders
money in fiduciary capacity.
There should be at least 4 Trustees (2/3 should be independent) right to seek regular
information and remedial action. All major decisions need trustee approval.
Asset Management Company -

The AMC is responsible for the operational aspects of the Mutual Fund. It holds an
Investment Management agreement with Trustees.
It is a SEBI registered entity Requirement of minimum 10 crores of net worth to be
maintained at all times at least 1/2 of the board members to be independent and it cannot
have any other business interest Structured as a private limited company (Sponsors and
Associates hold capital)
AMC of one Mutual Fund cannot be trustee of another Mutual Fund. 75% of the Unit
Holders jointly can terminate the AMC appointment.
To define and maintain high professional and ethical standards in all areas of operation of
mutual fund industry.
To interact with the Securities and Exchange Board of India (SEBI) and to represent to SEBI
on all matters concerning the mutual fund industry.
To represent to the Government, Reserve Bank of India and other bodies on all matters
relating to the Mutual Fund Industry.
To undertake nationwide investor awareness programme so as to promote proper
understanding of the concept and working of mutual funds.
To disseminate information on Mutual Fund Industry and to undertake studies and research
directly and/or in association with other bodies.
Custodian -
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Responsible for the safe keeping of investments of the funds and receipt of all benefits due
to the fund. Participates in Clearing System on behalf of the Fund
Registered with SEBI
Registrar & Transfer Agent

Responsible for unit holders record maintenance and servicing including purchase,
repurchase and transfer of units
Responsible for updating Investor Records and Transactions.
Advantages of Mutual Funds
Portfolio diversification: is a benefit derived from investment in securities spread across

various companies, industries, issuers and maturities. The portfolio will not be affected by
the performance of one or few of the securities.
Mutual funds feature low transaction cost from economies of scale. Since the fund invests
large sums of money, the costs of research, broking, demat and custodial services come
down. Small amounts invested in a fund get the benefits of the large pool.
Professional Management by mutual funds offers expertise in managing the investors

funds, bringing the benefits of research, analysis and process-driven approach to investing.
Portfolio diversification and the professional management of funds offer reduction in risk
for the investors. The investment is always in a managed portfolio and not a single stock or
sector. Instead of a large outlay of funds to achieve these objectives directly, investors can
choose mutual funds, investing as little as Rs. 500 to get these benefits at a low cost.
Investors can choose their investment to suit their particular needs and preferences. Mutual
funds offer closed and open-ended schemes, offer options to stay invested, receive or reinvest
dividends. These variations offer higher flexibility of when to invest, how to receive the
returns, how to stay invested and when to redeem the units.
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Investors interests are protected while investing in mutual funds as they are governed by
the Securities and Exchange Board of India (SEBI) (Under the SEBI mutual funds)
Regulations, 1996, which require extensive disclosures and fair business practices.
Mutual funds encourage systematic investments .Investors can choose systematic

investment plans to invest regularly ,systematic withdrawal plans to withdraw regularly in
order to structure regular cash flow from the investment account or systematic transfer plans
to transfer money from one scheme to another.
Mutual fund transactions are convenient, flexible and easy to conduct. Investors are
assigned a folio when they buy units and they can use transactions slips to conduct various
transactions, including purchasing more units from the folio. Mutual funds also offer
convenience of part withdrawal of investments and make additional investments in the
account.
Mutual funds structure the portfolio in such a way that they are able to provide liquidity to
the investor. Investors can take their money out when they need it by redeeming their units
with the fund, or by selling units on the stock exchange where they are listed.
Mutual funds investments offer significant tax advantages to investors. Incomes that are
taxable when earned directly, such as interest income, can be left invested in the fund to grow
over years .incidence of tax is only when the investor transacts in a fund and as capital gains
rather than interest income.
Mutual fund distributors have to be registered with AMFI obtain an ARN and abide by the
prescribed code of ethics .The structure of mutual funds is also well regulated, offering a
high level of information disclosure ,investor protection and regulatory controls.
Disadvantages of Mutual Funds
Mutual funds are not customized portfolios: Mutual Funds are like pre-plated meals; there
is no customized assembling of the meal by the customer. Mutual funds are standard
products, managed centrally, offering significant advantages to investors who are not
equipped to make complex investment choices. Investors do not exercise any direct control
on how the portfolio is managed, but participate equitably in it. Customized portfolios are
usually offered as portfolio management services (PMS).
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No direct control over cost: investors in a mutual fund participate in the pool of funds,
according to the proportion they have contributed. The costs for managing the fund are
centrally incurred and apportioned to every unit. Investors cannot directly determine what
cost can be incurred and how it would be apportioned. SEBI has however, imposed limits on
the amount and type of cost a mutual fund can incur.
Mutual funds offer too many products: to the investors, making a choice among many
funds become tough when so many variants of the same product are available in the market.
Mutual funds try to vary their products, even if slightly, to provide a choice to customers. If
these are similar in objective and performance, investors may find it tough to differentiate the
products and make the right choice for their needs.
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Concept of Mutual Funds
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When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets
of the fund in the same proportion as his contribution amount put up with the corpus (the total
amount of the fund). Mutual Fund investor is also known as a mutual fund shareholder or a unit
holder. 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. NAV is defined
as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a scheme is
calculated by dividing the market value of scheme's assets by the total number of units issued to
the investors.
History of the Indian Mutual Fund Industry
The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the
initiative of the Government of India and Reserve Bank. The history of mutual funds in India can
be broadly divided into four distinct phases.
First Phase 1964-87
An Act of Parliament established Unit Trust of India (UTI) on 1963. 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)
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 Can
bank 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.
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AMOUNT 1992-93 ASSETS UNDER MOBILIZATION
MOBILIZED MANAGEMENT AS % OF
GROSS
DOMESTIC
SAVINGS
11,057 UTI 38,247 5.2%
PUBLIC
1,964 8,757 0.9%
SECTOR
13,021 TOTAL 47,004 6.1%
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.
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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. As at the end of October 31, 2003,
there were 31 funds, which manage assets of Rs.126726 crores under 386 schemes.
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Chapte
r2
Classification of Mutual Funds
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Mutual funds may be classified on the basis of its structure and its investment
objective:
MUTUAL FUNDS
STRUCTURE OTHERS BY INVESTMENT
SECTOR
SPECIFIC
OPEN SCHEME
ENDED S GROWTH
SCHEME SCHEME
S
TAX
SAVING
S
CLOSE SCHEME
ENDED S
SCHEME
S BALANCED
SCHEMES
SPECIAL
SCHEME
S
INCOME
INTERVAL SCHEMS
INDEX
SCHEMES SCHEMES
MONEY
MARKET
SCHEMES
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By Structure
Open-ended Funds
An open-end fund is one that is available for subscription all through the year. These do not have
a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV")
related prices. The key feature of open-end schemes is liquidity.
Benefits of Open Ended Funds:
i. Liquidity
In open-ended mutual funds, you can redeem all or part of your units any time you wish.
Some schemes do have a lock-in period where an investor cannot return the units until
the completion of such a lock-in period.
ii. Convenience
An investor can purchase or sell fund units directly from a fund, through a broker or a
financial planner. The investor may opt for a Systematic Investment Plan (SIP) or a
Systematic Withdrawal Advantage Plan (SWAP). In addition to this an investor
receives account statements and portfolios of the schemes.
iii. Flexibility
Mutual Funds offering multiple schemes allow investors to switch easily between various
schemes. This flexibility gives the investor a convenient way to change the mix of his
portfolio over time.
iv. Transparency
Open-ended mutual funds disclose their Net Asset Value (NAV) daily and the entire
portfolio monthly. This level of transparency, where the investor himself sees the
underlying assets bought with his money, is unmatched by any other financial instrument.
Thus the investor is in the know of the quality of the portfolio and can invest further or
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redeem depending on the kind of the portfolio that has been constructed by the
investment manager.
Closed-ended Funds
A closed-end fund has a stipulated maturity period which generally ranging from 3- 15 years. It
can be subscribed only during a specified period. Investors can invest in the scheme at the time
of initial public issue and then they can buy or sell the units of the scheme on the stock
exchanges where they are listed. In order to provide an exit route, it provides an option of selling
back the units to the Mutual Fund through periodic repurchase at NAV related prices. SEBI
Regulations stipulate that at least one of the two exit routes is provided to the investor.
Interval Funds
Interval funds combine the features of open-ended and close-ended schemes. They are open for
sale or redemption during pre-determined intervals at NAV related prices.
By Investment Objective
Growth Funds
Such schemes normally invest a majority of their corpus in equities. It has been proven that
returns from stocks, have outperformed most other kind of investments held over the long term.
It is ideal for investors with long-term outlook seeking growth over a period of time.
Income Funds
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 and Government
securities. Income Funds are ideal for capital stability and regular income.
Balanced Funds
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The aim of balanced funds is to provide both growth and regular income. Such schemes
periodically distribute a part of their earning and invest both in equities and fixed income
securities in the proportion indicated in their offer documents. In a rising stock market, the NAV
of these schemes may not normally keep pace, or fall equally when the market falls. These are
ideal for investors looking for a combination of income and moderate growth.
Money Market Funds
The aim of money market funds is to provide easy liquidity, preservation of capital and moderate
income. These schemes generally invest in safer short-term instruments such as T-bills, C.Ds,
commercial paper and inter-bank call money. Returns on these schemes may fluctuate depending
upon the interest rates prevailing in the market. These are ideal for Corporate and individual
investors to park their surplus funds for short periods.
Load Funds
A Load Fund is one that charges a commission for entry or exit for purchase or sale of units in
the fund. It ranges from 1%- 2%, worth paying if the fund has a good performance history.
No-Load Funds
A No-Load Fund is one that does not charge a commission for entry or exit for the purchase or
sale of units in the fund. The advantage is that the entire corpus is put to work.
Other Schemes
Tax Saving Schemes
These schemes offer tax rebates under specific provisions of the Indian Income Tax laws as the
Government offers tax incentives for investment in specified avenues. Investments made in
Equity Linked Saving Schemes and Pension Schemes are allowed as deduction u/s 88 of the
Income Tax Act, 1961. It also provides opportunities to save capital gains u/s 54EA and 54EB
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provided the capital asset has been sold prior to April 1, 2000 and the amount is invested before
September 30, 2000.
Special Schemes
Industry Specific Schemes
Industry Specific Schemes invest only in the industries specified in the offer document. The
investment is limited to specific industries like InfoTech, FMCG, and Pharmaceuticals etc.
Index Schemes
Index Funds attempt to replicate the performance of a particular index such as the BSE Sensex or
the NSE 50.
Sectorial Schemes
Sectorial Funds are those, which invest exclusively in a specified industry or a group of
industries or various segments such as 'A' Group shares or initial public offerings.
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Classification or types of mutual fund
Mutual funds in India offer a wide array of schemes that cater to needs suitable to any age,
financial position, risk tolerance and return expectations. Mutual funds may be classified on the
basis of its structure and its investment objective:
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BROAD MUTUAL
FUNDS TYPE
EQUTIY DEBT/ INCOME

HYBRID OTHERS
FUNDS
DIVERSIFIED
DEBT PLAN
COMMODITY
FUNDS
DIVERSIFI
ED EQUITY ASSET
FUNDS ALLOCATTIO
(ELSS) N
FOCUSED
DEBT FUNDS REAL
ESTATE
FUNDS
VALUE
FUNDS
GROWTH AND HIGH
INCOME FUND YEILD EXCHANGE
DEBT FUND TRADED
FUNDS
SECTOR
FUNDS
BALANCED
FUNDS
FIXED TERM FUNDS OF
GROWTH PLAN SERIES
FUNDS FUNDS
ASSURED
SPECIALITY RETURN
FUNDS FUND
INDEX FUNDS
Classification according to Investment Objective:
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The schemes can also be classified as growth scheme, income scheme, or balanced scheme
considering its investment objective. These schemes can be open-ended or close-ended schemes.
Such schemes may be classified mainly as follows:
Equity/Growth Oriented Scheme
The aim of growth funds is to provide capital appreciation over the medium to long- term. Such
schemes normally invest a major part of their corpus in equities. Such funds have comparatively
high risks. These schemes provide different options to the investors like dividend option, capital
appreciation, etc. and the investors may choose an option depending on their preferences. The
investors must indicate the option in the application form. The mutual funds also allow the
investors to change the options at a later date. Growth schemes are good for investors having a
long-term outlook seeking appreciation over a period of time.
Income 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.
Balanced Fund
These funds are considered moderate since investors seek growth and stability but with moderate
risk. The aim of balanced funds is to provide both growth and regular income as such schemes
invest both in equities and fixed income securities in the proportion indicated in their offer
documents. These are appropriate for investors looking for moderate growth.
31 | P a g e
They generally invest 40-60% in equity and debt instruments. These funds are also affected
because of fluctuations in share prices in the stock markets. However, NAVs of such funds are
likely to be less volatile compared to pure equity funds.
Money Market or Liquid Fund
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 Fund
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 is the case with income or debt oriented schemes.
Index Funds
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.
32 | P a g e
Hybrid funds
Hybrid funds invest in both bonds and stocks or in convertible securities. Balanced funds, asset
allocation funds, target date or target risk funds and lifecycle or lifestyle funds are all types of
hybrid funds.
Hybrid funds may be structured as funds of funds, meaning that they invest by buying shares in
other mutual funds that invest in securities. Most fund of funds invest in affiliated funds
(meaning mutual funds managed by the same fund sponsor), although some invest in unaffiliated
funds (meaning those managed by other fund sponsors) or in a combination of the two.
Sector specific funds/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.
Exchange Trade Funds
These are new variety of mutual funds that first became available in 1993. The exchange-traded
fund or ETF is often structured as an open-end investment company, though ETFs may also be
structured as unit investment trusts, partnerships, investments trust, grantor trusts or bonds (as an
33 | P a g e
exchange-traded note). ETFs combine characteristics of both closed-end funds and open-end
funds. Like closed-end funds, ETFs are traded throughout the day on a stock exchange at a price
determined by the market. However, as with open-end funds, investors normally receive a price
that is close to net asset value. To keep the market price close to net asset value, ETFs issue and
redeem large blocks of their shares with institutional investors.
Special Schemes
Industry Specific Schemes
Industry Specific Schemes invest only in the industries specified in the offer document. The
investment is limited to specific industries like InfoTech, FMCG, and Pharmaceuticals etc.
Net Asset Value (NAV) of a scheme:
The performance of a particular scheme of a mutual fund is denoted by Net Asset Value
(NAV).Mutual funds invest the money collected from the investors in securities markets. In
simple words, Net Asset Value is the market value of the securities held by the scheme. Since
market value of securities changes every day, NAV of a scheme also varies on day to day basis.
The NAV per unit is the market value of securities of a scheme divided by the total number of
units of the scheme on any particular date. For example, if the market value of securities of a
mutual fund scheme is Rs 200 lakhs and the mutual fund has issued 10 lakhs units of Rs. 10
each to the investors, then the NAV per unit of the fund is Rs.20. NAV is required to be disclosed
by the mutual funds on a regular basis - daily or weekly - depending on the type of scheme.
How do investors choose between funds?
When the market is flooded with mutual funds, its a very tough job for the investors to choose
the best fund for them. Whenever an investor thinks of investing in mutual funds, he must look at
the investment objective of the fund. Then the investors sort out the funds whose investment
objective matches with that of the investors. Now the tough task for investors start, they may
carry on the further process themselves or can go for advisors like SBI. Of course the investors
can save their money by going the direct route i.e. through the AMCs directly but it will only
34 | P a g e
save 1-2.25% (entry load) but could cost the investors in terms of returns if the investor is not an
expert. So it is always advisable to go for MF advisors. The MF advisors thoughts go beyond
just investment objectives and rate of return. Some of the basic tools which an investor may
ignore but an MF advisor will always look for are as follow:
1. Rupee cost averaging:
The investors going for Systematic Investment Plans (SIP) and Systematic Transfer Plans (STP)
may enjoy the benefits of RCA (Rupee Cost Averaging). Rupee cost averaging allows an investor
to bring down the average cost of buying a scheme by making a fixed investment periodically,
like Rs 5,000 a month and nowadays even as low as Rs. 500 or Rs. 100. In this case, the investor
is always at a profit, even if the market falls. In case if the NAV of fund falls, the investors can
get more number of units and vice-versa. This results in the average cost per unit for the investor
being lower than the average price per unit over time.
The investor needs to decide on the investment amount and the frequency. More frequent the
investment interval, greater the chances of benefiting from lower prices. Investors can also
benefit by increasing the SIP amount during market downturns, which will result in reducing the
average cost and enhancing returns. Whereas STP allows investors who have lumpsums to park
the funds in a low-risk fund like liquid funds and make periodic transfers to another fund to take
advantage of rupee cost averaging.
2. Rebalancing:
Rebalancing involves booking profit in the fund class that has gone up and investing in the asset
class that is down. Trigger and switching are tools that can be used to rebalance a portfolio.
Trigger facilities allow automatic redemption or switch if a specified event occurs. The trigger
could be the value of the investment, the net asset value of the scheme, level of capital
appreciation, level of the market indices or even a date. The funds redeemed can be switched to
other specified schemes within the same fund house. Some fund houses allow such switches
without charging an entry load.
35 | P a g e
To use the trigger and switch facility, the investor needs to specify the event, the amount or the
number of units to be redeemed and the scheme into which the switch has to be made. This
ensures that the investor books some profits and maintains the asset allocation in the portfolio.
3. Diversification:
Diversification involves investing the amount into different options. In case of mutual funds, the
investor may enjoy it afterwards also through dividend transfer option. Under this, the dividend
is reinvested not into the same scheme but into another scheme of the investor's choice.
For example, the dividends from debt funds may be transferred to equity schemes. This gives
the investor a small exposure to a new asset class without risk to the principal amount. Such
transfers may be done with or without entry loads, depending on the MF's policy.
4. Tax efficiency:
Tax factor acts as the x-factor for mutual funds. Tax efficiency affects the final decision of any
investor before investing. The investors gain through either dividends or capital appreciation but
if they havent considered the tax factor then they may end loosing.
Debt funds have to pay a dividend distribution tax of 12.50 per cent (plus surcharge and
education cess) on dividends paid out. Investors who need a regular stream of income have to
choose between the dividend option and a systematic withdrawal plan that allows them to
redeem units periodically. SWP implies capital gains for the investor.
If it is short-term, then the SWP is suitable only for investors in the 10-per-cent-tax bracket.
Investors in higher tax brackets will end up paying a higher rate as short-term capital gains and
should choose the dividend option. If the capital gain is long-term (where the investment has
been held for more than one year), the growth option is more tax efficient for all investors. This
is because investors can redeem units using the SWP where they will have to pay 10 per cent as
long-term capital gains tax against the 12.50 percent DDT paid by the MF on dividends.
In equity oriented schemes the short term capital gains to Individuals, Domestic Companies and
NRIs is 15%, while schemes other than equity oriented schemes for Individuals, Domestic
Companies an NRIs is 30%.
36 | P a g e
In equity oriented schemes, the long term capital gain for Individuals, Domestic Companies and
NRIs is NIL, while schemes other than the equity oriented schemes for Individuals Domestic
Companies and NRIs is 10% without indexation and 20% with indexation. All the tools
discussed over here are used by all the advisors and have helped investors in reducing risk,
simplicity and affordability. Even then an investor needs to examine costs, tax implications and
minimum applicable investment amounts before committing to a service.
37 | P a g e
Chapte
r3
Mutual Fund Industries Trends
38 | P a g e
Mutual Fund Industry Trends
Though Indias savings rate has been between 30-35 per cent since last few years, investment in
mutual funds have been minimal as compared to other avenues for investment. Emphatically
speaking, mutual fund business follows a business to business model (B2B) rather than a
business to consumer (B2C) model and hence, distribution is a critical success factor for any
mutual fund. Despite the efforts, the mutual fund products continue to remain a push product
rather than a pull product. Indian mutual fund industry has evolved over the years. Though, it
has grown at a Compounded Annual Growth Rate (CAGR) of 15 per cent from FY07 to FY13,
the growth performance in the recent years have been rather subdued. However, Assets Under
Management (AUM) as a per cent of GDP for India is about 5 to 6 per cent, significantly lower
than some other emerging economies, for example, 40 per cent for Brazil and around 33 per cent
for South Africa. This indicates significant headroom for growth. However, the industry growth
will continue to be characterized by external factors such as volatility and performance of the
capital markets, and macro-economic drivers such as GDP growth, inflation and interest rates.
The Indian Mutual fund industry has evolved over the years from a single player in 1964 to a fast
growing competitive market on the back of strong regulatory framework by Association of
Mutual Funds in India (AMFI). The Assets under Management (AUM) have relatively grown at
14.17% CAGR in last 15 years since March 2000. The AUM growth has been considerable in
terms of debt assets which have risen from 47% to 73% in a span of last 15 years. However,
equity assets have been in the range of 20% to 40% in the last few years. At the same time there
has been drastic fall of other schemes from 24% to as low as 4% currently. Industry recorded an
AUM of INR 8,800 billion. The highest AUM was recorded in August 2013 as INR 9,580
billion. Though on the whole, the mutual fund industry witnessed a decline in AUM in December
2013, the AUM of equity funds increased by 4.5 per cent3 on account of rising stock prices.
One could see a shift with the changing demographic profile of the Indian population, with new
products being launched (for example, products being linked to pensions), coupled with financial
awareness and literacy initiatives for investors both by the industry and the regulator, and with
the onus of expanding the market falling on the distributorsthe first point of contact for
investors. Distributors would have to convince and guide the investors about using mutual funds
as a tool for financial goals rather than as just mere investments. Technology could definitely act
as an enabler in reaching out to investors in far and distant places.
39 | P a g e
Assets under Management (AUM) Growth
Equity (Equity, ELSS); Debt (Income, Gilt, Money market); Others (Hybrid, ETFs, Gold ETFS,
FOFs overseas)
For the current financial year the AUM was at Rs. 8,25,240 crore as on 31st March 2014 and
rose by 17.65% or Rs. 1,23,797 crore Y-o-Y vis--vis Rs. 7,01,443 crore the previous financial
year. Currently, there are 44 Asset Management Companies (AMCs) and approx. 2,300+
schemes having equity assets of around Rs. 1,91,107 crore and debt assets of around Rs.
6,00,945 crore.
The quantum of mutual fund assets in financial savings is very low - at less than 5% - as most
Indian savings are locked in bank fixed deposits, small savings (postal savings) and insurance.
With growing disposable incomes, rising inflation (cost of living), improving lifestyles and
growing aspirations, there is a noticeable shift in preference for mutual funds though it has still a
long way to go.
TABLE I: ASSET UNDER MANAGEMENT OF INDIAN MUTUAL FUND INDUSTRY
40 | P a g e
Year AUM in CRORES
Mar-65 25
Mar-87 4,554
Mar-93 47,000
Mar-01 1,21,805
Mar-02 87,190
Mar-03 79,464
Mar-04 1,39,616
Mar-05 1,49,554
Mar-06 2,31,862
Mar-07 3,26,388
Mar-08 50,512
Mar-09 4,17,900
Mar-10 6,13,979
Mar-11 5,92,250
Mar-12 5,87,217
Mar-13 7,01,443
Feb-14 9,16,393
SOURCE: SEBI
41 | P a g e
SOURCE: SEBI
Above TABLE-I indicates after privatization in 1993, asset under management increased up to
47,000 crores. In year Mar-01 assets mobilized through mutual funds was 1,21,805 crores and in
year Feb-14 assets mobilized is 9,16,393 crores. During last decade there is growth in assets
under management more than 500 percent, in India.
42 | P a g e
MF industrys assets crosses Rs. 10 lakh crore mark in May
Industrys AUM went up to Rs. 10.11 lakh crore in May from Rs. 9.45 lakh crore in April due to
inflows in liquid, income and equity funds.
Thanks to the roaring markets and inflows in equity as wells as liquid funds, the mutual fund
industrys assets under management scaled to a new high of Rs. 10.11 lakh crore in May, up 7%
from Rs. 9.45 lakh crore in April, shows the latest AMFI data. It was the third consecutive
growth in AUM since March 2014.
Both key indices S&P BSE Sensex and CNX Nifty went up by 8% or 1800 points and 544 points
respectively in May. While S&P BSE Sensex breached 24k mark in May, CNX Nifty closed at
its the then all-time high of 7200 points in May.
Debt
Debt funds continued to remain the flavour of the season. Both income and liquid funds received
close to Rs. 32,000 crore in May.
72 new fund offers, mostly FMPs, collectively mopped up Rs. 6,064 crore in May.
Equity
Equity funds saw a net inflow of Rs. 2,452 crore in May. Six new funds offers helped equity
funds garner close to Rs. 1,000 crore.
While two open ended equity schemes - ICICI Prudential Dividend Yield Fund and Principal
Index Fund - Midcap collected Rs.289 crore, a few close ended funds like Birla Sun Life
Emerging Leader Fund, ICICI Prudential Value Fund Series 4, L&T Emerging Businesses Fund
and Reliance Closed Ended Equity Fund mopped up Rs. 681 crore in May.
In fund of funds category, Franklin India Feeder - Franklin European Growth Fund and Religare
Invesco Global Equity Income Fund collected Rs. 79 crore.
43 | P a g e
Gold
Due to gloomy outlook on gold, investors are continuously moving out of gold ETF. It is evident
from the fact that the AUM of Gold ETFs fell to Rs. 7,781 crore in May from close to Rs. 11,000
crore levels some months back.
India Ratings & Research (Ind-Ra), a part of Fitch group, has predicted that gold prices are
further expected to decline in FY15 in the range of Rs. 25,500 to Rs. 27,500/10 g. It expects gold
prices to fall due to the gradual winding up of unconventional monetary policy (UMP) in US
which would cause interest rates to go up and consequently discourage investments in gold.
Net inflow/outflow and AUM data
Net
Category inflow/outflow AUM
in May
Income 10,096 473887
IDF - 1082
Equity 2452 189200
Balanced -83 14728
Liquid/Money
22010 282700
market
Gilt -318 5694
ELSS -430 28034
Gold ETFs -341 7781
Other ETFs 576 4829
Fund of Funds - 3167
44 | P a g e
Total 33962 1011102
TABLE 2:- RESOURCE MOBILISATION BY PRIVATE AND PUBLIC SECTOR BY

MUTUAL FUNDS
$ indicates as on February 28, 2014.

SOURCE: SEBI
Above TABLE II indicates mobilization of funds from private and public sectors other than UTI
investment to Indian mutual fund industry. Funds mobilized from 54,928 crores in 2009-10 to
1,33,697 crores in 2013-14 by private sector. Public sector contributed from 12,499 crores in
2009-10 to 16,216 crores in 2013-14. Private sector contributed greater than public sector to
mutual funds. As per above data, it is observed that private sector is playing a vital role in
economic development.
Growth in Markets
45 | P a g e
* Source: BSE Sensex and NSE Nifty data as on December 2013
In comparison to global markets, Indias AUM penetration as a per cent of GDP is between 5-6
per cent while it is around 77 per cent for the U.S., 40 per cent for Brazil and 31 per cent for
South Africa. Despite the relatively low penetration of mutual funds in India, the market is
highly concentrated. Though, there are 44 AMCs operating in the sector, approximately 80 per
cent of the AUM is concentrated with 8 of the leading players in the market. There have been
recent instances of consolidation in the market and market concentration is expected to remain in
the near-term.
Market Share of leading Mutual Funds (basis AUM)
46 | P a g e
* SOURCE: AMFI
Products and Investors

Indian stock markets have experienced inconsistent returns in the recent past. Higher inflation
and inconsistent economic growth has worried the retail investor who is now concerned about
assured returns in such a scenario, the investor would divert their funds from the equity market to
liquid/money market and debt AUM as also depicted in Figure 3.
Fig. 3: AUM Composition by Product Category
47 | P a g e
SOURCE: AMFI (Data as of September 2013)
The equity-debt mix is determined largely by the performance of the capital markets and interest
rate cycles. AUMs in debt and liquid money market funds have seen an increase in FY14 due to
the anticipation of RBI rate cuts and desire for investors to seek a fixed return. Debt oriented
products (investing in debt instruments with maturity > 3 months) have gained most traction in
terms of absolute net new money, with an absolute increase in AUM of ~INR 1,000 billion
indicating a clear shift in investor interest from equity in recent times. Gold ETFs have grown at
an extremely fast pace over the last few years albeit from a much smaller base (CAGR of over 90
per cent from FY10- FY13). These have gained popularity due to the popularity of gold as an
investment for Indians as well as due to the lowering of administrative charges and distribution
expenses which makes it easier for the product to be distributed as well.
As Figure 4 indicates, industry composition of AUM is driven primarily by the corporate
segment.
Fig. 4: AUM Composition by Investor Segment
48 | P a g e
Source: AMFI (Data as of September 2013)
Corporate investments constitute around 49 per cent of AUM with a focus on debt/money market
funds for the purpose of short term returns and liquidity management.
Retail share of AUM is 20 per cent and is expected to rise driven by increased investor
awareness, product penetration and greater distribution reach. High Net worth Individual
(HNIs) have emerged as the fastest growing investor segment growing at a rate of ~ 20 per cent
over the period of FY10- FY13 with a preference for debt oriented funds.
However, AUM growth largely remains restricted to the top 5 cities in India viz. Mumbai, Delhi,
Bangalore, Chennai and Kolkata (contributing ~ 74 per cent of AUM as of September
2013). The top 35 cities continue to contribute around 90-92 per cent of the industry AUM.
AUM distribution by AMCs
49 | P a g e
Industry AUM composition by Geography
SOURCE: AMFI (Data as of September 2013)

Despite constant endeavor of the regulator to increase penetration of mutual fund products
beyond top 15 cities, the AUM composition has only marginally changed since
SEBI directive on additional TER on inflows from smaller cities was implemented in October
1st, 2012. Contribution from the B-15 cities has remained at around 13 per cent for the last two
years. Drivers like lack of financial education and awareness, limited distribution network,
cultural bias towards physical assets are some of the key impediments to growth in B-15 cities.
In order to increase the geographical reach of mutual funds, the fund houses are now allowed to
charge an extra load of 30 basis points from existing schemes1 subject to meeting certain
conditions. The regulation has incentivized fund houses to push mutual fund products in cities
beyond the top 15. The term B-15; it is short for beyond top 15 cities
The B-15 cities are: Jaipur, New Delhi, Chandigarh, Kanpur, Lucknow, Hyderabad, Bangalore,
Chennai, Kolkata, Ahmedabad, Surat, Vadodara, Panjim, Pune, Mumbai.
There are total 44 mutual funds. A brief snapshot of the balance 26 fund houses are listed below
sorted on the AUM.
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0Mutual Fund No. Of QAAUM Prev. Inc./
Industries Schemes Date QAAUM Prev. Date QAAUM Dec.
51 | P a g e
HDFC Mutual Fund 1066 Mar-14 109890.71 Dec-13 104326.69 5564.02
Reliance Mutual Fund 809 Mar-14 100979.16 Dec-13 99083.55 1895.61
ICICI Prudential Mutual 1168 Mar-14 100145.64 Dec-13 89660.6 10485.0

Fund 4
Birla Sun Life Mutual 829 Mar-14 86098.59 Dec-13 79891.01 6207.58
Fund
UTI Mutual Fund 752 Mar-14 70587.17 Dec-13 69990.51 596.66
SBI Mutual Fund 515 Mar-14 62631.69 Dec-13 60691.46 1940.23
Franklin Templeton 224 Mar-14 46363.88 Dec-13 45212.75 1151.13

Mutual Fund
IDFC Mutual Fund 593 Mar-14 39777.04 Dec-13 38826.63 950.41
Kotak Mahindra Mutual 364 Mar-14 31242.11 Dec-13 33671.94 -2429.83

Fund
DSP Blackrock Mutual 456 Mar-14 27968.66 Dec-13 26997.13 971.53
Fund
Tata Mutual Fund 412 Mar-14 20028.43 Dec-13 17524.87 2503.56
L&T Mutual Fund 280 Mar-14 17495.33 Dec-13 15941.35 1553.98
Deutsche Mutual Fund 440 Mar-14 17264.66 Dec-13 16938.81 325.85
Axis Mutual Fund 236 Mar-14 16123.6 Dec-13 14470.74 1652.86
JP Morgan Mutual Fund 155 Mar-14 15196.56 Dec-13 11825.65 3370.91
Sundaram Mutual Fund 391 Mar-14 15153.01 Dec-13 14270.41 882.6
Religare Invesco Mutual 270 Mar-14 13523.65 Dec-13 12363.52 1160.13

Fund
52 | P a g e
LIC Nomura Mutual 195 Mar-14 8989.6 Dec-13 8348.48 641.12
Fund
Baroda Pioneer Mutual 104 Mar-14 7701.78 Dec-13 6586.74 1115.04
Fund
HSBC Mutual Fund 173 Mar-14 7483.98 Dec-13 7482.17 1.81
Canara Robeco Mutual 124 Mar-14 6603.96 Dec-13 7009.99 -406.03

Fund
JM Financial Mutual 125 Mar-14 5977.56 Dec-13 7068.66 -1091.1
Fund
IDBI Mutual Fund 131 Mar-14 5698.74 Dec-13 4829.82 868.92
Principal Mutual Fund 128 Mar-14 4121.49 Dec-13 4526.72 -405.23
Peerless Mutual Fund 56 Mar-14 3924.29 Dec-13 3297.74 626.55
Goldman Sachs Mutual 24 Mar-14 3764.11 Dec-13 3846.74 -82.63

Fund
53 | P a g e
Chapte
r4
Review of literature
54 | P a g e
Literature on mutual fund performance evaluation is enormous. A few research studies that have
influenced the preparation of this paper substantially are discussed in this section.
Sharpe, William F. (1966) suggested a measure for the evaluation of portfolio

performance.
Drawing on results obtained in the field of portfolio analysis, economist Jack L.

Treynor has suggested a new predictor of mutual fund performance, one that differs from
virtually all those used previously by incorporating the volatility of a fund's return in a
simple yet meaningful manner.
Michael C. Jensen (1967) derived a risk-adjusted measure of portfolio performance

(Jensens alpha) that estimates how much a managers forecasting ability contributes to funds
returns.
As indicated by Statman (2000), the e SDAR of a fund portfolio is the excess return of the
portfolio over the return of the benchmark index, where the portfolio is leveraged to have the
benchmark indexs standard deviation.
S. Narayan Rao , evaluated performance of Indian mutual funds in a bear market through
relative performance index, risk return analysis, Treynors ratio, Sharpes ratio, Sharpes measure
, Jensens measure, and Famas measure. The study used 269 open-ended schemes (out of total
schemes of 433) for computing relative performance index. Then after excluding funds whose
returns are less than risk-free returns, 58 schemes are finally used for further analysis. The results
of performance measures suggest that most of mutual fund schemes in the sample of 58were able
to satisfy investors expectations by giving excess returns over expected returns based on both
premium for systematic risk and total risk.
Bijan Roy, et. al., conducted an empirical study on conditional performance of

Indian mutual funds. This paper uses a technique called conditional performance
evaluation on a sample of eighty-nine Indian mutual fund schemes .This paper measures the
performance of various mutual funds with both unconditional and conditional
form of CAPM, Treynor-Mazuy model and Henrikson Merton
model.
T h e e f f e c t o f incorporating lagged information variables into the evaluat
55 | P a g e
i o n o f m u t u a l f u n d m a n a g e r s performance is examined in the Indian context. The
results suggest that the use of conditioning lagged information variables improves the
performance of mutual fund schemes, causing alphas to shift towards right and reducing
the number of negative timing coefficients.
Mishra, et al., (2002) measured mutual fund performance using lower partial moment. In this
paper, measures of evaluating portfolio performance based on lower partial moment are
developed. Risk from the lower partial moment is measured by taking into account only
those states in which return is below a pre-specified target rate like risk-free rate.
Kshama Fernandes (2003) evaluated index fund implementation in India. In this paper,
tracking error of index funds in India is measured . The consistency and level of tracking
errors obtained by some well-run index fund suggests that it is possible to attain low levels
of tracking error under Indian conditions. At the same time, there do seem to be
periods where certain index funds appear to depart from the discipline of indexation.
K. Pendaraki et al. studied construction of mutual fund portfolios, developed a multi-

criteria methodology and applied it to the Greek market of equity
m u t u a l f u n d s . T h e methodology is based on the combination of discrete and continuous
multi-criteria decision aid methods for mutual fund selection and composition. UTADIS multi-
criteria decision aid method is employed in order to develop mutual funds performance models.
Goal programming model is employed to determine proportion of selected mutual funds in the
final portfolios
56 | P a g e
Chapte
r5
Company Profile
57 | P a g e
Canara Robeco
Canara Bank
Canara Bank is one of the most prominent commercial banks of India. Canara Bank is an
Indian bank headquartered in Bangalore, Karnataka. It was established in 1906, making it
one of the oldest banks in the country. Widely known for customer centricity, Canara Bank
was founded in 1906 by Shri Ammembal Subba Rao Pai, a great visionary and
philanthropist, at Mangalore, then a small port in Karnataka. The bank was nationalised in
1969. Today, Canara Bank occupies a premier position in the comity of Indian banks with an
unbroken record of profits since its inception.
Robeco-
Robeco was established in Rotterdam (the Netherlands) in 1929. Today the company is one
of the largest European asset management firms, with a solid pan-European presence,
prominence in the US, and offices throughout Asia. The company offers investment products
and services to institutional and private investors worldwide. It manages $255 billion USD
in assets under management (as of March 31, 2013).
About Canara Robeco

Canara Robeco Asset Management Company Limited (CRAMC), the investment managers
of Canara Robeco Mutual Fund, is a joint venture between Canara Bank and Robeco of the
Netherlands, a global asset management company that manages about US$180 Billion
worldwide. The joint venture brings together Canara Bank's experience in the Indian market
and Robeco's global experience in asset management. Canara Robeco Mutual Fund is the
oldest Mutual Fund in India, established in December 1987 as Canbank Mutual Fund.
Subsequently, in 2007, Canara Bank partnered Robeco and the mutual fund was renamed as
58 | P a g e
Canara Robeco Mutual Fund. Canara Robeco AMC manages the assets of Canara Robeco
Mutual Fund by virtue of an Investment management agreement dated 16th June 1993 (as
amended from time to time).The equity shareholding of the AMC consists of Canara bank
having 51% and Robeco having 49%
Business Module of Canara Robeco
ASSET MANAGEMENT COMPANY(CANARA

ROBECO)
CORE BANKING
THIRD PARTY DISTRIBUTOR
CHANNEL
BANKS
NATIONAL DISTRIBUTORS/ REGIONAL DISTRIBUTORS
INDIVIDUAL FINANCIAL ADVISORS
INSTITUTIONAL
Asset Management Company
AMC is responsible for the operational aspects of the mutual funds.

It holds an investment management agreement with trustees
AMC educate the distributors about the market events and about their products.
59 | P a g e
AMC is a SEBI registered entity
AMC of one mutual fund cannot be trustee of another mutual fund.
Canara Robeco educates the Third Party Distributors and the Core banking Channels.
Professional managers run an AMC. The AMC conducts the necessary research &
based on it, manages the fund or portfolio. It is responsible for floating, managing,
redeeming the schemes; it receives the fees for the services rendered by it.
Core banking channel
Banks collect money through investors and sells the money to AMCs to give to the
fund managers.
For Canara Robeco the core banking channel is Canara Bank.
Canara bank collects the money and sells mutual fund products.
Canara Bank has 4750 branches all over India in 33 states.
It has 51 branches in the rural district of Bangalore and 220 in the urban district.
Third Party Distributors
These are channels other than their main bank through which they sell the Canara
Robeco Mutual Fund products.
The Third Party Distributors includes:
Banks
National distributors/ Regional Distributors
Individual Financial Advisor.
Banks
The AMC educates private, local or regional banks on information regarding Canara
Robecos mutual fund products. These banks are then expected to sell and promote
their mutual fund products on a certain management fee (such as revenues).
Banks are managing about 11875 crs of AUM in Bangalore as on 30th April14
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They are:
Private Banks
Public Sector Undertakings (PSUs)
Multi-National Companies (MNCs)
Domestic Banks
There are 31 private and MNCs in Bangalore.

The PSUs manages about 148 crs of AUM in Bangalore as on 30th April14
ND /RD / CD
National Distributors and Regional Distributors and Corporate Distributors sell

financial products like:
Insurance
Mutual funds
FDs
Demat a/c
Portfolio Management Services (PMS)
There are 111 National, Regional and Corporate distributors in Bangalore.

They manage about 11,963 crs of AUM as on 30th April14
Individual Financial Advisors
They are individual entities who sell and promote mutual funds to customers.
There are 665 IFAs in Bangalore.
IFAs manage 6,922 crs of AUM as on 30th April14
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Institutions
They are organisations which pool large sums of money and invest them in securities,
real property and other investment assets.
They have about 20613 crs of AUM.
Credit recognitions and awards:
CNBC TV 18 CRISIL Mutual Fund award 2011

ICRA Mutual Fund Award 2011
NDTV Profit Mutual Fund Award 2011 (Equity Diversified)
NDTV Profit Mutual Fund Award 2011 (Equity Tax Saver)
Lipper Fund Award 2010
ICRA Mutual Fund Award 2010
CNBC TV 18 CRISIL Mutual Fund of the year Award for 2009
Lipper Award 2009
Performance measures:
Equity funds: the performance of equity funds can be measured on the basis of: NAV Growth,
Total Return; Total Return with Reinvestment at NAV, Annualized Returns and Distributions,
Computing Total Return (Per Share Income and Expenses, Per Share Capital Changes, Ratios,
Shares Outstanding), the Expense Ratio, Portfolio Turnover Rate, Fund Size, Transaction Costs,
Cash Flow, Leverage.
Hybrid Funds: Funds that a combination of asset and classes such as debt ,equity and in some
cases gold in their portfolio are called hybrid funds .they may serve the needs of investors who
look for a combination of income oriented and growth oriented investments.
Monthly Income Plans
These funds invest a larger proportion of the portfolio in debt securities ,with a smaller
allocation to equity .they are pre-dominantly debt oriented hybrids , generating income from the
debt securities and adding equity to generate some benefits of long term growth to the portfolio.
These funds also feature periodic(monthly, quarterly ,or annual) distribution of dividends
,through there is no assurance of the same.
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Balanced Funds
Balanced funds are equity- oriented hybrids that invest at least 65% in equity and the rest in debt
securities to offer a cushion from the risk of an all equity portfolio. They are sought by investor
who seeks growth with some protection from volatility. They balance between equity and debt.
Asset Allocation Funds
Also called as dynamic funds, these funds invest in both equity and debt ,but can change the
proportion of equity and debt in their portfolio depending on the fund managers perception of
the market .they have the flexibility to invest up to 100% in debt or in equity ,depending on the
view of the manager.
Capital Protection- Oriented Funds
These are closed end hybrids that club debt securities with a derivative instrument or equity
shares. The portfolio is structured such that a large portion of the principle amount is invested in
debt instruments .the interest that accumulates during the period of the scheme would grow to the
amount that the investor invested at the start . for example ,rs 90 may be invested for 3 years to
grow into rs 100 at maturity .A small portion of the principle amount (RS 100 RS 90 in our
example ) is invested in equity or derivatives .even if the equity or derivative component return
a loss ,the investor will get back the principle invested in the debt securities
Debt fund: likewise the performance of debt funds can be measured on the basis of: Peer Group
Comparisons, The Income Ratio, Industry Exposures and Concentrations, NPAs, besides NAV
Growth, Total Return and Expense Ratio.
Liquid funds: the performance of the highly volatile liquid funds can be measured on the basis
of: Fund Yield, besides NAV Growth, Total Return and Expense Ratio.
Various Products of Canara Robeco
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Equity Schemes
Canara Robeco Infrastructure
Canara Robeco Equity Diversified
Canara Robeco Emerging Equities
Canara Robeco Nifty Index
Canara Robeco Equity Tax Saver
Canara Robeco F.O.R.C.E Fund
Canara Robeco Large Cap+ Fund
Hybrid schemes
Canara Robeco Balance
Canara Robeco INDIGO Fund
Canara Robeco Monthly Income Plan
Canara Robeco Yield Advantage Fund
Debt Schemes
Canara Robeco Floating Rate
Canara Robeco Liquid
Canara Robeco Treasury Advantage Fund
Canara Robeco Gilt Advantage Fund
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Canara Robeco Income
Canara Robeco Gilt PGS
Canara Robeco Dynamic Bond Fund
Canara Robeco Short Term Fund
Canara Robeco Interval Scheme
Fund OF Fund
Canara Robeco Gold Saving Fund
SCHEME DETAILS OF CANARA ROBECO
1 Canara Robeco Equity Diversified :
Category: Open Ended Equity Scheme
Scheme Objective: To generate capital appreciation by investing in equity and equity

related securities.
Avg Aum: Rs. 614.82 crs.
NAV: Direct Plan- Dividend Option- Rs. 30.56

Regular Plan- Dividend Option - Rs. 28.28
Direct Plan- Growth Option- Rs. 70.64
Regular Plan- Growth Option- Rs. 70.20
Date of allotment: September 16,2003
Asset Allocation: Equity and Equity related instruments: 85% - 100%.
Money market instruments: 0% - 15%.
Minimum Investment:
Lumpsum: RS. 5000 in multiples of Re. 1 thereafter
SIP/SWP/STP: For monthly frequency Rs. 1000 and multiples of re.1 thereafter
For quarterly frequency Rs. 2000 in multiples of re. 1 thereafter
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Plans/ Options: Regular Plan- Growth Option
Regular Plan- Dividend Reinvestment Option/ Payout Option
Direct Plan- Growth Option
Direct Plan- Dividend Reinvestment Option/ Payout Option.
Entry Load: NIL.
Exit Load: 1% - if redeemed/switched out within 1 year from the date of

allotment,
Nil - if redeemed/switched out after 1 year from the date of
allotment.
Benchmark: S&P BSE 200
2 Canara Robeco F.O.R.C.E Fund :

Scheme Objective: The objective of the fund is to provide long-term capital
appreciation by primarily investing in equity and equity related
securities of companies in finance, Retail and Entertainment
sectors.
Institutional option- Growth Option- Rs 16.79
Asset Allocation: Equity and Equity related instruments of companies in finance,
Retail and Entertainment sector: 65% - 100%. Other Equity and
equity related instruments: 0% - 35%. Domestic debt and money
market instruments: 0% - 35%.
Minimum Investment:
Subsequent Purchases:
Minimum amount of Rs. 1000 and in multiples of Re. 1 thereafter.
SIP/SWP/STP:
For monthly frequency Rs. 1000 and multiples of re.1 thereafter
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Entry Load: NIL.
allotment,
allotment.
Benchmark: CNX nifty.
3 CANARA ROBECO INFRASTRUCTURE :
Scheme Objective: To generate Income/capital appreciation by investing in equity and

equity related instruments of companies in the infrastructure sector.

Date of allotment: December 2, 2005
Asset Allocation: Equity and Equity related instruments of companies in the
infrastructure sector including derivative of such companies: 75% -
100%. Domestic debt and money market instruments: 0% - 25%.
Minimum Investment:
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Entry Load: NIL.

allotment,
allotment.
4 Canara Robeco Equity Tax Saver:
Category: Open Ended Equity linked Tax Saving Scheme.
Scheme Objective: ELSS seeking to provide long term capital appreciation by

predominantly investing in equities and to facilitate the subscribers
to seek tax benefits as provided under section 80 C of the income
Tax Act 1961.

Date of allotment: March 31, 1993
Asset Allocation: Equity and Equity related instruments: 80% - 100%. Money market
instruments: 0% - 25%.
Minimum Investment:
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Entry Load: NIL.
Exit Load: NIL.
5 Canara Robeco Emerging Equities:
Scheme Objective: To generate capital appreciation by primarily investing in

diversified mid-cap stocks.

Asset Allocation: Mid & small cap equity and equity related instruments: 65%-100%.
Equity and equity related instruments of companies other than the
above: 0%-35%. Domestic debt and Money Market instruments:
0%-35%
Minimum Investment:
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Entry Load: NIL.

allotment,
allotment.
Benchmark: CNX Mid Cap
6 Canara Robeco Nifty Index:
Category: Open Ended nifty linked equity scheme
Scheme Objective: To generate Income/capital appreciation by investing in companies

whose securities are included in the S&P CNX Nifty

Date of allotment: October 8, 2004
Asset Allocation: Equities covered by the nifty in the same percentage weightage as
in the Nifty: 90% - 100%. Money market instruments including 0%
- 10%.
Minimum Investment:
Entry Load: NIL.
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allotment,
allotment.
Benchmark: CNX Nifty.
7 Canara Robeco Large Cap+ Fund :
Category: Open Ended equity scheme

Scheme Objective: The investment Objective of the fund is to provide capital
appreciation by predominantly investing in companies having a
large market capitalization. However, there can be no assurance that
the investment objective of the scheme will be realized.
Date of allotment: August 21, 2010
Asset Allocation: Large cap equity and equity related instruments: 65% - 100%.
Domestic Debt and Money Market Instruments: 0% - 35%.
Minimum Investment:
Subsequent Purchases: Minimum amount of Rs.1000 and multiples of Re. 1 thereafter.
SIP/SWP/STP:
Entry Load: NIL.
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allotment,
allotment.
8 Canara Robeco Balance:
Category: Open Ended Balanced scheme

Scheme Objective: To seek to generate long term capital appreciation and/or income
from a portfolio constituted of equity and equity related securities
as well as fixed income securities (debt and money market
securities).
NAV: Direct Plan- Quarterly Dividend Option- Rs. 60.52
Regular Plan- Quarterly Dividend Option - Rs. 60.37
Date of allotment: February 1, 1993
Asset Allocation: Equity and Equity related Instruments: 40% - 75%. Debt securities
including securitized debt having rating above AA or equivalent,
money market instruments and Govt. securities: 25% - 60%.
Minimum Investment:
Minimum amount of Rs.1000 and multiples of Re. 1 thereafter.
SIP/SWP/STP:
Regular Plan- Quarterly Dividend Reinvestment Option/ Payout
Option
Direct Plan- Quarterly Dividend Reinvestment Option/ Payout
Option.
Entry Load: NIL.
72 | P a g e
allotment,
allotment.
Benchmark: CRISIL balanced fund Index.
9 Canara Robeco Monthly Income Plan:
Category: Open Ended debt scheme

Scheme Objective: To generate income by investing in debt instruments, MMI and
small portion in equity.
Direct Plan- Monthly Dividend Option- Rs. 14.0345
Regular Plan- Monthly Dividend Option- Rs. 13.8713
Direct Plan- Quarterly Growth Option- Rs. 14.1533
Regular Plan- Quarterly Growth Option- Rs. 14.3334
Date of allotment: April 24, 1988
Asset Allocation: Equity and Equity related instruments: 10% - 25%. Debt securities
with Money market Instruments: 70%- 90%.
Minimum Investment:
Subsequent Purchases: Minimum amount of Rs.1000 and multiples of Re. 1 thereafter.

Regular Plan- Monthly Dividend Reinvestment Option/ Payout
Option
Option
Direct Plan- Monthly Dividend Reinvestment Option/ Payout
Option.
Option.
Entry Load: NIL.
73 | P a g e
allotment,
allotment.
Benchmark: CRISIL MIP blended Index.
10 Canara Robeco INDIGO Fund:
Category: Open Ended debt scheme

Scheme Objective: To generate Income from a portfolio Constituted of debt and money
market securities along with investment in gold ETFs.
Date of allotment: July 9, 2010
Asset Allocation: Indian Debt and Money market Instruments: 65% - 90%. Gold
ETFs: 10% - 35%.
Minimum Investment:
SIP/SWP/STP: Minimum amount of Rs.1000 and multiples of Re. 1 thereafter.
Option
Option.
Entry Load: NIL.
74 | P a g e
allotment,
allotment.
Benchmark: Canara Robeco blended Gold Index.
11 Canara Robeco GILT PGS
Category: Open Ended Gilt Scheme
Scheme Objective: To provide risk free return (except interest rate risk) and long term
capital appreciation by investing only in Govt. Securities.

Date of allotment: December 29,1999
Asset Allocation: Govt. Securities Money Market Instruments
Call Money : 0% - 100%
Minimum Investment:
Entry Load: NIL.
Exit Load: Nil
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Benchmark: 1-sec-li-bex
12 Canara Robeco Income Fund
Category: Open Ended Debt Scheme
Scheme Objective: To generate income through investment in Debt and Money Market
securities of different maturity and issuers of different risk profiles.
Avg Aum: Rs. 298.84 crs
Asset Allocation: Debt (including Securitized Debt): 50% - 100%.
Money Market Instruments / Call Money : 0% - 50%
Minimum Investment:
Regular Plan-Quarterly Dividend Reinvestment Option/ Payout
Option
Direct Plan-Quarterly Dividend Reinvestment Option/ Payout
Option.
Entry Load: NIL.
Exit Load: 1% if redeemed / switched out within 12 months from the date of
allotment,
76 | P a g e
Nil If redeemed / switched out after 12 months from the date of
allotment.
Benchmark: CRISIL Composite Bond Fund Index
13 Canara Robeco Dynamic Bond Fund
Scheme Objective: The objective of the fund is to seek to generate income from a
portfolio of debt and money market securities.

Date of allotment: May 29,2009
Asset Allocation: Govt. Of India & Corporate Debt Securities (including Securitized
Debt) : 0% - 100%
Money Market Instruments : 0% - 100%
Minimum Investment:
Subsequent Purchases: Min amount of Rs. 1000 and multiples of Rs 1 thereafter.
SIP/SWP/STP:
Entry Load: NIL.
Exit Load: 0.50% - If redeemed / switched out within 6 months from the date
of allotment.
77 | P a g e
allotment.
Benchmark: CRISIL Composite Bond Fund Index
14 Canara Robeco Short Term Fund

Scheme Objective: To generate income from a portfolio constituted of short to medium
term debt and money market securities. There is no assurance that
the objective of the fund will be realized and the fund does not
assure or guarantee any returns.
NAV: Direct Plan- Growth Option- Rs. 14.6954
Institutional Plan- Growth Option- Rs. 14.8549
Institutional Plan- Monthly Dividend Option- Rs. 10.1302
Direct Plan- Monthly Dividend Option- Rs. 10/1308
Regular Plan- Monthly Dividend Option- Rs. 10.1302
Regular Plan- Weekly Dividend Option- Rs. 10.1268
Direct Plan- Weekly Dividend Option- Rs. 10.1200
Asset Allocation: Money Market Instruments: 60% - 100%. Government of India &
Debt Securities (including Securitized Debt): 0% - 40%.
Minimum Investment:
Subsequent Purchase: Min. amount of Rs. 1000 and multiples of Rs. 1 thereafter.

Regular Plan- Weekly Dividend Reinvestment
Regular Plan- Monthly Dividend Reinvestment
Regular Plan- Monthly Dividend Payout
Direct Plan- Weekly Dividend Reinvestment
Direct Plan- Monthly Dividend Reinvestment
Direct Plan- Monthly Dividend Payout
Entry Load: NIL.
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Exit Load: 0.50% - If redeemed / switched out within 6 months from the date
of allotment,
allotment
Benchmark: CRISIL Liquid Fund Index
15 Canara Robeco Liquid
Category: Open Ended cash management scheme
Scheme Objective: Enhancement of Income, while maintaining a level of liquidity though,
investment in a mix of MMI & Debt securities.
NAV: Direct Plan- Daily Dividend Reinvestment Option- Rs 1,005.5000
Direct Plan Dividend Option- Rs 1,125.6596
Direct Plan Growth Option- Rs 1,572.2879
Institutional Plan-Growth Option- Rs 2,310.8890
Institutional Plan- Daily Dividend Option- Rs 1005.5000
Direct Plan- Monthly Dividend Option Retail Plan- Rs 1000.0149
Retail Plan- Monthly Dividend Option- Rs 1,005.5000
Retail Plan- Daily Dividend Option- Rs 1,007.0000
Retail Plan- Growth Option- Rs 2,261.0199
Retail Plan- Weekly Dividend Option- Rs 1,005.5000
Regular Plan- Daily Dividend Reinvestment Option- Rs 1,005.5000
Regular Plan Growth Option- Rs1,571.1164
Regular Plan Monthly Dividend Option- Rs 1,000.0000
Regular Plan Weekly Dividend Option- Rs 1,000.0000
Direct Plan Weekly Dividend Option- Rs 1,000.0000
Date of allotment: Retail Plan- January 15, 2002
Institutional Plan- May 31, 2004
Regular Plan- July 15, 2008
Asset Allocation: Money Market Instruments / Call money: 65% - 100%.
Debt (including Securitized Debt): 0% - 35%
Minimum Investment:
Lumpsum: Minimum amount : Rs 5000and in multiplies of rs1 thereafter
Subsequent purchases: Minimum amount of Rs 1000 and multiples of Rs 1 thereafter.
SIP/SWP/STP: Minimum installment amount Rs 1000 and Rs 2000 for monthly and
quarterly frequency and in multiplies of Rs 1 thereafter
Regular Plan Dividend Option :Daily Dividend Reinvestment
Regular Plan- Weekly Dividend Reinvestment
Regular Plan-Monthly Dividend Payout
Direct Plan Growth Option
Direct Pan Dividend Option :Daily Dividend Reinvestment
Direct Plan Weekly Dividend Reinvestment
Direct Plan Weekly Dividend Payout
79 | P a g e
Direct Plan Monthly Dividend Reinvestment
Direct Plan Monthly Dividend Payout
Direct Plan - Dividend Payout
Entry Load: NIL.
Exit Load: NIL
16 Canara Robeco Treasury Advantage Fund

Scheme Objective: To Generate Income / Capital Appreciation Through A Low Risk Strategy
In Investment In Debt Securities And Money Market Instruments.
Avg Aum: Rs. 171.86 Crores
Nav: Direct Plan Daily Dividend Reinvestment Option - Rs 1,240.7100
Direct Plan Dividend Option Rs 1,125.5801
Direct Plan Growth Option Rs 1,965.3857
Institutional Plan- Daily Dividend Option - Rs 1,240.7100
Institutional Plan- Growth Option - Rs 2,102.9699
Institutional Plan Weekly Dividend Option - Rs 1,240.7100
Direct Plan Monthly Dividend Option - Rs 1,000.0000
Retail Plan Daily Dividend Option Rs 1,240.7100
Retail Plan- Dividend Option Rs 1,419.0274
Retail Plan- Growth Option - Rs 2,061.8540
Retail Plan Monthly Dividend Option Rs 1,240.7100
Retail Plan Weekly Dividend Option Rs 1,240.7100
Regular Plan Daily Dividend Reinvestment Option Rs 1,240.7100
Regular Plan- Growth Option- Rs 1,962.5526
Regular Plan Monthly Dividend Option Rs 1,000.7075
Regular Plan Weekly Dividend Option - Rs 1,240.7100
Direct Plan Weekly Dividend Option Rs 1,240.7100
Date Of Allotment: September 16,2003
Asset Allocation: MMI/ Call/ Debt Instruments With Residual Average Maturity Or Equal
Or Less Than 1 Year: 20% - 100%.
Debt Instruments With Residual Average Maturity Of More Than 1 Year
(Including Securitized Debt): 0% - 80%
Minimum Investment:
Lumpsum: RS. 5000 In Multiples Of Re. 1 Thereafter
Subsequent Purchases : For Monthly Frequency Rs. 1000 And Multiples Of Re.1 Thereafter
Minimum Installment Amount Rs 1000 And 2000 For Monthly And
Sip/SWP/STP: Quarterly Frequency And In Multiples Of Rs1 Thereafter
Regular Plan Dividend Option :Daily Dividend Reinvestment
Regular Plan Weekly Dividend Reinvestment
Regular Plan Weekly Dividend Payout
Regular Plan Monthly Dividend Reinvestment
Regular Plan Monthly Dividend Payout
Direct Plan- Dividend Option Daily Dividend Reinvestment
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Direct Plan- Weekly Dividend Reinvestment
Direct Plan- Weekly Dividend Payout
Direct Plan- Monthly Dividend Reinvestment
Direct Plan- Monthly Dividend Payout
Direct Plan - Dividend Payout
Entry Load: Nil.
Exit Load: Nil
Benchmark: Crisil Liquid Fund Index
17 Canara Robeco Floating Rate

Scheme Objective: The fund seeks to generate income by investing in a portfolio
comprising of short term debt instruments and money market
instruments with weighted average portfolio duration of equal to or
less than 1 year.
Avg Aum: Rs. 188.15crs
NAV: Regular plan-daily dividend reinvestment option- Rs 10.2600
Direct plan-daily dividend reinvestment option Rs 10.2600
Direct plan-dividend option- Rs 18.0318
Regular plan-dividend option- Rs 18.0124
Direct plan-growth option-Rs 20.1344
Regular plan growth option-Rs 20.1124
Direct plan-monthly dividend option- Rs 10.2600
Regular plan-monthly dividend option Rs 10.2600
Direct plan weekly dividend option Rs 10.2600
Asset Allocation: Indian Money Market Instruments: 70% - 100%
Indian Debt Securities (including Securitized Debt): 0 -30%
Minimum Investment:
SIP/SWP/STP:
Plans/ Options: Regular Plan- Dividend Reinvestment Option/ Payout Option

Regular Plan- Daily Dividend Reinvestment Option
Regular plan weekly dividend payout/reinvestment option
Regular plan monthly dividend payout/reinvestment option
Direct Plan weekly dividend payout/reinvestment option
Direct Plan monthly dividend payout/reinvestment option
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Entry Load: NIL.
Exit Load: 0.25% - If redeemed / switched out within 30 days from the date of
allotment. NIL If redeemed / switched out after 60 days from the
date of allotment.
18 Canara Robeco Gilt Advantage Fund
Category: Open Ended Gilt Scheme
Scheme Objective: To generate returns commensurate with low credit risk

predominantly investing in the portfolio comprising of short to
medium term Government securities guaranteed by Central and
State Government with a weighted average portfolio duration not
exceeding 3 years. However, there can be no assurance that the
investment objective of the scheme is realized.
Avg Aum: Rs. 1.26 Rs

Asset Allocation: Govt. Securities/ Call Money: 0% - 100%
Minimum Investment:
Entry Load: NIL.
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Exit Load: Nil
Benchmark: I-Sec-Si-Bex
19 Canara Robeco Yield Advantage Fund
Scheme Objective: To generate regular income by investing in a wide range of debt

securities and MMIs of various maturities and risk profile and a
small portion of investment in Equity and Equity related
instruments. However there can be no assurance that the investment
objective of the scheme will be realized.
Avg Aum: Rs. 2.96 Rs
NAV: direct plan growth option Rs 12.6209
regular plan growth option Rs 12.4750
direct plan monthly dividend option Rs 12.6216
regular plan monthly dividend option Rs 12.4750
regular plan- quarterly dividend option Rs 12.4749
direct plan quarterly dividend option Rs 12.6214
Date of allotment: April 25, 2011
Asset Allocation: Indian Debt and Money Market instruments: 90% - 100%
Equity and Equity related instruments: 0% - 10%
Minimum Investment:
SIP/SWP/STP:

Regular plan- monthly dividend payout/reinvestment option
Regular plan quarterly dividend payout/reinvestment option
Direct plan growth option
Direct plan monthly dividend payout/reinvestment option
Direct plan quarterly dividend payout /reinvestment option
Entry Load: NIL.
Exit Load: % if redeemed / switched out within 1 year from the date of
allotment.
Nil if redeemed /switched out after 1 year from date of allotment
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Benchmark: CRISIL MIP Blended Index
Facilities Provided By Canara Robeco
1. Systematic Investment Plan (SIP):
Management of one's finances to attain a defined goal calls for a lot of discipline, many a times
self-imposed. Our Systematic Investment Plan is a tool, which can help you, inject this discipline
in your financial management efforts. Our Systematic Investment Plan (SIP) provides you the
facility to periodically invest a fixed sum over any defined period of time (6 months or more) in
a disciplined manner. SIPs help in arresting uncertainties associated with trying to time the
market and thus, in the long term tends to iron out market fluctuations. It brings down your
average cost of acquisition of units. As you would allocate a fixed sum every month, you would
buy more units when the prices of our units are lower than when they are higher.
2. Systematic Withdrawal Plan (SWP):
Our Systematic Withdrawal Plan (SWP) is designed receive a regular stream of payouts in a
defined frequency and to book profits periodically Through our SWP you can redeem defined
sums at a pre-defined frequency by giving a one-time instruction to us. You may choose to
regularly withdraw either a fixed sum or just the appreciation on your investments.
This facility caters to two segments of investor needs:

1) Investors wanting defined, regular funds inflow from their investments.
2) Investors interested in booking gains at a regular interval.
3. Systematic Transfer Plan (STP):

Systematic Transfer Plan (SWP) caters a phased entry into the Equity markets rather than
putting in all your money at one trench and to book profits from your equity holdings. Through
our STP you can choose to switch your investments from one Kotak Mutual scheme to another at
84 | P a g e
a predefined frequency by giving a one-time instruction to us. You also have a choice between
switching a fixed sum or only the appreciation on your investments.
You can choose to transfer either a fixed sum every defined period or only the appreciation on
your investments over that period from one scheme to another. The latter is helpful, where you
do not want the transfer to disturb your capital contribution.
4. ECS of Dividends:
ECS (Electronic Clearing Service) is a Reserve Bank of India offering to facilitate, among
others, faster and seamless payout of dividends directly into your bank account.
ECS as a mechanism for payout of Dividends is faster, convenient, cost-effective and hassle-free.
Besides, you don't run the risk of loss of dividend instruments in transit and the associated delays
in obtaining a duplicate instrument. This facility is currently offered across all banks in over 48
locations.
5. Online Transactions Facility:
Our Online Transactions Facility allows you to have instant access to your investments at
anytime from anywhere just at the click of a button.
Here's a list of all facilities you can avail by signing in for our Online Transactions Facility:
Redemption.
Switch Over.
Account Statement.
6. Email Communication:
The world over, e-mail has been revolutionizing communication. No more need to have paper
trails; e-mail makes communication real-time, easy to store and retrieve and cost-effective.
85 | P a g e
You can now opt to receive all your communication from us over e-mail:
Account Statement for your investments.
Transaction Confirmations.
Daily NAVs and Dividend Updates.
Market Reviews.
Information on product launches, service initiatives, dividends, etc.
Annual Reports.
Other Statutory Communication.
7. SMS Services:
With cell phones fast qualifying for an assured parking in every pocket, we could not resist
allowing you that extra convenience to be in touch with your investments whenever you wish,
wherever you are.
Try our SMS facility to:
Access the latest NAVs and Dividends for our various schemes on SMS.
Receive information on product launches, service initiatives, dividends, etc. on SMS.
Post your queries to our Dedicated Services Desk.
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Chapte
r6
Systematic investment plans
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Systematic Investment Plans (SIP) Every drop makes an Ocean-
SIPs enable investors to invest a fixed sum periodically into a mutual fund scheme. Units are
bought at the NAV related price prevailing on the date of investment. The investment is thus
staggered over time, reducing the risk of investing a lump sum at a specific time. Since a fixed
amount is being invested, larger number of units is bought when price is low and smaller number
of units is bought when price is high. Systematic investment plan thus lowers the average cost of
purchases. The strategy is called Rupee Cost Averaging.
The mutual fund specifies the minimum amount that must be invested every period .This may be
as low as Rs 50 (micro slips) though most funds have the minimum amount at Rs 500 or 1000
per month. Investors commit to the periodic investment over a chosen length of time. SIPs can be
committed for six months, one year, or even more. AMCs offer specific intervals in which SIP
investment can be made. These can be monthly, quarterly, half yearly or annual. SIPs are to be
made on dates specified by the AMC, for example 5 th, 15th, or 25th of a month.an investor can
invest over a year by selecting a date specified by the AMC. Example: You invest Rs 1,000 each,
on the 15th of every month for the entire year.
SIPs can be initiated along with an NFO. The first installment is at the NFO purchase price and is
allotted like an NFO. The second instalment begins after the scheme reopens for continuous
purchase transactions. Payment instruments for SIPs can be post-dated cheques (PDCs), ECS
(electronic clearing service) mandate or standing instruction for direct transfer. The applicable
NAV for an SIP is the NAV on the installment date or if that day is on holiday, then the NAV of
the next business day.
How does it work?
A SIP is a flexible and easy investment plan. Your money is auto-debited from your bank account
and invested into a specific mutual fund scheme. You are allocated certain number of units based
on the ongoing market rate (called NAV or net asset value) for the day.
Every time you invest money, additional units of the scheme are purchased at the market rate and
added to your account. Hence, units are bought at different rates and investors benefit from
Rupee-Cost Averaging and the Power of Compounding.
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Rupee-Cost averaging
With volatile markets, most investors remain skeptical about the best time to invest and try to
'time' their entry into the market. Rupee-cost averaging allows you to opt out of the guessing
game. Since you are a regular investor, your money fetches more units when the price is low and
lesser when the price is high. During volatile period, it may allow you to achieve a lower average
cost per unit.
Power of Compounding
Albert Einstein once said, "Compound interest is the eighth wonder of the world. He who
understands it, earns it... he who doesn't... pays it." The rule for compounding is simple - the
sooner you start investing, the more time your money has to grow.
An illustration below explains the benefit of an SIP over a lump sum:-

SIP - Rupee Cost Averaging
Lump-Sum Investor SIP Investor
Mont Unit Price (Rs.) Investmen Unit Investmen Units

h t (Rs.) Purchased t (Rs.) Purchased
^ ^
1 50 9,000 180 1,000 20
2 47 1,000 21
3 45 1,000 22
4 44 1,000 23
5 46 1,000 22
6 48 1,000 21
7 49 1,000 20
8 50 1,000 20
9 52 1,000 19
Total Investment Rs.9,000 Rs.9,000
Total Units Purchased 180 188
Average Unit Price Rs.50 Rs.48
Value After 9 Months Rs.9,360 Rs.9,799
In long term, SIP investors gain as his investment and unaffected by market volatility.
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Example
If you started investing Rs. 10,000 a month on your 40th birthday, in 20 years time you would
have put aside Rs. 24 lakhs. If that investment grew by an average of 7% a year, it would be
worth Rs. 52.4 lakhs when you reach 60.
However, if you started investing 10 years earlier, your Rs. 10,000 each month would add up to
Rs. 36 lakh over 30 years. Assuming the same average annual growth of 7%, you would have Rs.
1.22 Cr on your 60th birthday - more than double the amount you would have received if you had
started ten years later.
Canara Robeco- NAV for Emerging Equities
For Example: You start investing Rs 5000 every year for 8 year starting from 5 th April 06. The
NAV on that particular day was 17.03, so you receive Rs. 11,306.52. By the end of 8 years you
will receive Rs.1054153.00 with a profit of Rs. 5,64,153.00.
CANARA ROBECO-Emerging Equities

CANARA
ROBECO CURRENT CURRENT PROFIT/
DATE GROWTH AMOUNT UNIT NAV VALUE LOSS
5-Apr-06 17.03 5,000 293.60 38.51 11306.52 6306.52
5-May-06 17.41 5,000 287.19 38.51 11059.74 6059.74
5-Jun-06 13.67 5,000 365.76 38.51 14085.59 9085.59
5-Jul-06 13 5,000 384.62 38.51 14811.54 9811.54
7-Aug-06 12.76 5,000 391.85 38.51 15090.13 10090.13
5-Sep-06 14.33 5,000 348.92 38.51 13436.85 8436.85
5-Oct-06 14.71 5,000 339.90 38.51 13089.73 8089.73
6-Nov-06 15.43 5,000 324.04 38.51 12478.94 7478.94
5-Dec-06 16.22 5,000 308.26 38.51 11871.15 6871.15
5-Jan-07 16.45 5,000 303.95 38.51 11705.17 6705.17
5-Feb-07 16.51 5,000 302.85 38.51 11662.63 6662.63
5-Mar-07 13.88 5,000 360.23 38.51 13872.48 8872.48
5-Apr-07 14.34 5,000 348.68 38.51 13427.48 8427.48
7-May-07 15.97 5,000 313.09 38.51 12056.98 7056.98
5-Jun-07 17.43 5,000 286.86 38.51 11047.05 6047.05
5-Jul-07 18.94 5,000 263.99 38.51 10166.31 5166.31
6-Aug-07 18.52 5,000 269.98 38.51 10396.87 5396.87
5-Sep-07 19.41 5,000 257.60 38.51 9920.14 4920.14
5-Oct-07 20.32 5,000 246.06 38.51 9475.89 4475.89
5-Nov-07 22.6 5,000 221.24 38.51 8519.91 3519.91
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5-Dec-07 24.21 5,000 206.53 38.51 7953.33 2953.33
7-Jan-08 26.24 5,000 190.55 38.51 7338.03 2338.03
5-Feb-08 21.37 5,000 233.97 38.51 9010.29 4010.29
5-Mar-08 18.67 5,000 267.81 38.51 10313.34 5313.34
7-Apr-08 16.65 5,000 300.30 38.51 11564.56 6564.56
5-May-08 18.62 5,000 268.53 38.51 10341.03 5341.03
5-Jun-08 16.43 5,000 304.32 38.51 11719.42 6719.42
7-Jul-08 14.28 5,000 350.14 38.51 13483.89 8483.89
5-Aug-08 15.22 5,000 328.52 38.51 12651.12 7651.12
5-Sep-08 14.89 5,000 335.80 38.51 12931.50 7931.50
6-Oct-08 11.16 5,000 448.03 38.51 17253.58 12253.58
5-Nov-08 8.72 5,000 573.39 38.51 22081.42 17081.42
5-Dec-08 7.94 5,000 629.72 38.51 24250.63 19250.63
5-Jan-09 9.26 5,000 539.96 38.51 20793.74 15793.74
5-Feb-09 7.73 5,000 646.83 38.51 24909.44 19909.44
5-Mar-09 6.93 5,000 721.50 38.51 27784.99 22784.99
6-Apr-09 8.35 5,000 598.80 38.51 23059.88 18059.88
5-May-09 9.92 5,000 504.03 38.51 19410.28 14410.28
5-Jun-09 14.34 5,000 348.68 38.51 13427.48 8427.48
6-Jul-09 13.34 5,000 374.81 38.51 14434.03 9434.03
5-Aug-09 15.1 5,000 331.13 38.51 12751.66 7751.66
7-Sep-09 16.08 5,000 310.95 38.51 11974.50 6974.50
5-Oct-09 16.55 5,000 302.11 38.51 11634.44 6634.44
5-Nov-09 15.7 5,000 318.47 38.51 12264.33 7264.33
7-Dec-09 17.28 5,000 289.35 38.51 11142.94 6142.94
5-Jan-10 18.98 5,000 263.44 38.51 10144.89 5144.89
5-Feb-10 17.89 5,000 279.49 38.51 10763.00 5763.00
5-Mar-10 18.94 5,000 263.99 38.51 10166.31 5166.31
5-Apr-10 20.22 5,000 247.28 38.51 9522.75 4522.75
5-May-10 20.29 5,000 246.43 38.51 9489.90 4489.90
7-Jun-10 20.1 5,000 248.76 38.51 9579.60 4579.60
5-Jul-10 21.48 5,000 232.77 38.51 8964.15 3964.15
5-Aug-10 22.81 5,000 219.20 38.51 8441.47 3441.47
6-Sep-10 23.88 5,000 209.38 38.51 8063.23 3063.23
5-Oct-10 24.84 5,000 201.29 38.51 7751.61 2751.61
8-Nov-10 24.77 5,000 201.86 38.51 7773.52 2773.52
6-Dec-10 23.62 5,000 211.69 38.51 8151.99 3151.99
5-Jan-11 23.82 5,000 209.91 38.51 8083.54 3083.54
7-Feb-11 21.33 5,000 234.41 38.51 9027.19 4027.19
7-Mar-11 21.06 5,000 237.42 38.51 9142.92 4142.92
5-Apr-11 22.82 5,000 219.11 38.51 8437.77 3437.77
5-May-11 22.62 5,000 221.04 38.51 8512.38 3512.38
6-Jun-11 23.09 5,000 216.54 38.51 8339.11 3339.11
5-Jul-11 23.17 5,000 215.80 38.51 8310.32 3310.32
5-Aug-11 22.63 5,000 220.95 38.51 8508.62 3508.62
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5-Sep-11 21.72 5,000 230.20 38.51 8865.10 3865.10
5-Oct-11 20.43 5,000 244.74 38.51 9424.87 4424.87
8-Nov-11 21.57 5,000 231.80 38.51 8926.75 3926.75
5-Dec-11 20.03 5,000 249.63 38.51 9613.08 4613.08
5-Jan-12 18.83 5,000 265.53 38.51 10225.70 5225.70
6-Feb-12 21.86 5,000 228.73 38.51 8808.33 3808.33
5-Mar-12 22.29 5,000 224.32 38.51 8638.40 3638.40
9-Apr-12 23.43 5,000 213.40 38.51 8218.10 3218.10
7-May-12 22.75 5,000 219.78 38.51 8463.74 3463.74
5-Jun-12 21.9 5,000 228.31 38.51 8792.24 3792.24
5-Jul-12 23.86 5,000 209.56 38.51 8069.99 3069.99
6-Aug-12 23.41 5,000 213.58 38.51 8225.12 3225.12
5-Sep-12 23.45 5,000 213.22 38.51 8211.09 3211.09
5-Oct-12 25.35 5,000 197.24 38.51 7595.66 2595.66
5-Nov-12 25.53 5,000 195.85 38.51 7542.11 2542.11
5-Dec-12 27.28 5,000 183.28 38.51 7058.28 2058.28
7-Jan-13 28.07 5,000 178.13 38.51 6859.64 1859.64
5-Feb-13 26.47 5,000 188.89 38.51 7274.27 2274.27
5-Mar-13 25.06 5,000 199.52 38.51 7683.56 2683.56
5-Apr-13 24.35 5,000 205.34 38.51 7907.60 2907.60
6-May-13 25.29 5,000 197.71 38.51 7613.68 2613.68
5-Jun-13 24.62 5,000 203.09 38.51 7820.88 2820.88
5-Jul-13 23.57 5,000 212.13 38.51 8169.28 3169.28
5-Aug-13 22.3 5,000 224.22 38.51 8634.53 3634.53
5-Sep-13 22.17 5,000 225.53 38.51 8685.16 3685.16
7-Oct-13 23.66 5,000 211.33 38.51 8138.21 3138.21
5-Nov-13 25.78 5,000 193.95 38.51 7468.97 2468.97
5-Dec-13 26.58 5,000 188.11 38.51 7244.17 2244.17
6-Jan-14 28.28 5,000 176.80 38.51 6808.70 1808.70
5-Feb-14 27.08 5,000 184.64 38.51 7110.41 2110.41
5-Mar-14 28.71 5,000 174.16 38.51 6706.72 1706.72
7-Apr-14 31.17 5,000 160.41 38.51 6177.41 1177.41
5-May-14 31.9 5,000 156.74 38.51 6036.05 1036.05
TOTAL 4,90,000 10,54,153.00 5,64,153.00
Systematic Investment Plan Building wealth
Regular investing for long periods of time delivers healthy returns
An Illustration:
Monthly Savings - What your savings may generate
Savings per month (Rs.) Total amount Assumed Rate of return (per annum)
invested
(for 15 years) (Rs. in Lacs) 6.00% 8.00% 10.00%
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(Rupees in lacs, 15 years later)*
5,000 9 14.6 17.4 20.9
7.2 11.7 13.9 16.7
4,000
3,000 5.4 8.8 10.4 12.5
2,000 3.6 5.8 7 8.3
1,000 1.8 2.9 3.5 4.2
Comparing SIP with any other method of investing
SIP Other methods of investing
Uncomplicated and largely automatic Good amount of research

and market tracking
required
Small amounts of funds required Lump sum funds required
No need to time the market Make your best attempt to

time the market
Averages out cost per unit Cost per unit depends on

your market timing
Comparison between SIP and Lumpsum investment- Equity Diversified
Canara Robeco- Equity Diversified- SIP Method.
Canara Robeco
Equity
Diversified- Current
DATE growth Amount Units NAV Current value Profit/Loss
5-Jan-10 48.15 5,000 103.8422 78.31 8131.8795 3,132
5-Feb-10 45.52 5,000 109.8418 78.31 8601.7135 3,602
5-Mar-10 47.96 5,000 104.2535 78.31 8164.0951 3,164
5-Apr-10 50.66 5,000 98.6972 78.31 7728.9775 2,729
5-May 50.56 5,000 98.89241 78.31 7744.2642 2,744
7-Jun-10 52.25 5,000 95.69378 78.31 7493.7799 2,494
6-Jul-10 50.21 5,000 99.58176 78.31 7798.2474 2,798
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5-Aug 54.12 5,000 92.38729 78.31 7234.8485 2,235
6-Sep-10 56.27 5,000 88.8573 78.31 6958.4148 1,958
5-Oct-10 59.26 5,000 84.37395 78.31 6607.3237 1,607
8-Nov-10 59.21 5,000 84.4452 78.31 6612.9032 1,613
6-Dec-10 56.48 5,000 88.52691 78.31 6932.5425 1,933
5-Jan-11 57.24 5,000 87.3515 78.31 6840.4962 1,840
7-Feb-11 52.38 5,000 95.45628 78.31 7475.1814 2,475
7-Mar-11 52.31 5,000 95.58402 78.31 7485.1845 2,485
5-Apr-11 55.93 5,000 89.39746 78.31 7000.7152 2,001
5-May-11 53.66 5,000 93.17928 78.31 7296.8692 2,297
6-Jun-11 54.7 5,000 91.40768 78.31 7158.1353 2,158
5-Jul-11 55.99 5,000 89.30166 78.31 6993.2131 1,993
5-Aug-11 53.83 5,000 92.88501 78.31 7273.825 2,274
5-Sep-11 52.3 5,000 95.60229 78.31 7486.6157 2,487
5-Oct-11 50.01 5,000 99.98 78.31 7829.4341 2,829
5-Nov-11 53.73 5,000 93.05788 78.31 7287.3627 2,287
5-Dec-11 51.58 5,000 96.9368 78.31 7591.1206 2,591
5-Jan-12 48.79 5,000 102.48 78.31 8025.2101 3,025
7-Feb-12 54.22 5,000 92.21689 78.31 7221.505 2,222
5-Mar-12 54.35 5,000 91.99632 78.31 7204.2318 2,204
9-Apr-12 55.13 5,000 90.69472 78.31 7102.3036 2,102
7-May-12 53.93 5,000 92.71278 78.31 7260.3375 2,260
5-Jun-12 52.02 5,000 96.11688 78.31 7526.9127 2,527
5-Jul-12 56.8 5,000 88.02817 78.31 6893.4859 1,893
5-Aug-12 56.19 5,000 88.9838 78.31 6968.3218 1,968
5-Sep-12 55.43 5,000 90.20386 78.31 7063.8643 2,064
5-Oct-12 60.99 5,000 81.98065 78.31 6419.9049 1,420
5-Nov-12 60.87 5,000 82.14227 78.31 6432.5612 1,433
5-Dec-12 63.11 5,000 79.22675 78.31 6204.2466 1,204
7-Jan-13 64.52 5,000 77.49535 78.31 6068.6609 1,069
5-Feb-13 63.04 5,000 79.31472 78.31 6211.1358 1,211
5-Mar-13 60.56 5,000 82.56275 78.31 6465.4888 1,465
5-Apr-13 58.26 5,000 85.82218 78.31 6720.7346 1,721
5-May-13 62.09 5,000 80.52827 78.31 6306.1685 1,306
5-Jun-13 61.53 5,000 81.26117 78.31 6363.5625 1,364
5-Jul-13 60.64 5,000 82.45383 78.31 6456.9591 1,457
5-Aug-13 59.28 5,000 84.34548 78.31 6605.0945 1,605
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5-Sep-13 58.62 5,000 85.29512 78.31 6679.4609 1,679
7-Oct-13 61.65 5,000 81.103 78.31 6351.176 1,351
5-Nov-13 64.79 5,000 77.1724 78.31 6043.3709 1,043
5-Dec-13 64.62 5,000 77.37543 78.31 6059.2696 1,059
6-Jan-14 65.4 5,000 76.4526 78.31 5987.0031 987
5-Feb-14 62.92 5,000 79.46599 78.31 6222.9816 1,223
5-Mar-14 65.96 5,000 75.80352 78.31 5936.1734 936
7-Apr-14 69.96 5,000 71.46941 78.31 5596.7696 597
5-May-14 70.29 5,000 71.13387 78.31 5570.4937 570
TOTAL 605,000 18401.32 1441007.5 836,007
Canara Robeco- Equity Diversified- Lumpsum Investment Method

Scheme Amount Current
Name Invested NAV As Growth
(Growth Scheme Launch Purchase During Units On On %
Options) Theme Date NAV NFO Allotted 2/6/2014 Inventory Growth
Canara
Robeco
Equity 16-Sept-
Diversified Large Cap 03 10.00 100000 10000 78.31 803400 803.4
SIP and Lumpsum are the two techniques to invest in mutual funds. Any investor can choose one
out of them and can invest their money into mutual funds. Systematic Investment Plan is very
helpful to salaried and middle class men. They can invest their saving into SIP and can collect
huge funds for future.
SIP is paid in monthly or quarterly as per the scheme. But Lumpsum is paid only one time and
the whole transaction is based on this investment. Opting SIP, an investor can invest their saving
into it and can save his money doing that. SIP is good because if it seems that market will go
down in a few days, the investor can safely withdraw his money.
Why SIP?
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Disciplined
Saving
Long Term
Flexibility Gains
Convenience
The Systematic Investment Plan is a unique plan that allows you to fulfil all your dreams
efficiently. With salient benefits and features, the SIP becomes a wise choice for investments. An
investor can make regular investments and follow a disciplined approach towards investing in
MF schemes. He can also peruse the Systematic Investment Plan according to pre-opted
schedules. Systematic Investment Planning (SIP) SIP is similar to a Recurring Deposit. Every
month on a specified date an amount you choose is invested in a mutual fund scheme of your
choice. The dates currently available for SIPs are the 5th, 10th, 15th, 20th and the 25th of a
month.
SIP helps to:
Build your future: To meet the more exhaustive expenses of your life like marriages,
education or a house, you need to start investing early. Save a small amount every
month/quarter with SIP and look forward to a bright future.
Relax and accumulate wealth: With SIP, you don't need to invest a huge sum of money
i.e. you can start with an amount as little as Rs. 500. Gradually, you can accumulate
wealth over the long-term.
Reduce risks: For efficient participation in this volatile market, SIP helps you average
out your cost by generating superior returns in the long run. It reduces the risk associated
with lump sum investments.
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Enjoy the convenience: Set yourself free from cumbersome paperwork. Just identify the
amount and scheme that 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.
Build your investment at regular intervals: With SIP, you can invest a pre-determined
amount 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 accounts.
Approach: It is important to remember that an early investor builds more than the one who
comes in later. The simple reasoning being; the accumulated investment increases with fresh
capital which is invested at periodic intervals.
Steps:
1) Start Early be the first to take the first step
Consider the following scenarios where different investors start investments at different age
levels and invest Rs 2000 per month till the age of 60 years. The person who started investing at
the age of 25 years stands benefitted more as he has started early and can benefit from power of
compounding. Even a higher investment amount may not compensate for the growth potential of
starting early.
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2) Invest in the Right asset class Risk return balance to optimize growth
Inflation for the past 18 years has been on an average at 7.80% on CAGR basis; an investor
should always look at an asset class which has the potential to generate positive inflation
adjusted returns. Historically on analysis for the past 25 years, equity as an asset class has the
potential to beat inflation and generate positive post tax and inflation adjusted returns. (Refer to
the chart below)
3) Investing with a plan Consistent and continuous investment
Systematic Investment Plans (SIPs) in mutual funds has long been considered one of the better
ways for the common man to invest in Mutual Funds
Fees:-A number of mutual funds do not charge an entry load for an SIP. If not exited (selling the
units) within a year of buying the units, they may not charge an exit load. However, if units are
sold within a year, there may be an exit load. Different fees charged by different MF companies.
Benefits of Systematic Investment Plans
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Disciplined Saving - Discipline is the key to successful investments. When you invest
through SIP, you commit yourself to save regularly. Every investment is a step towards
attaining your financial objectives.
Flexibility - While it is advisable to continue SIP investments with a long-term
perspective, there is no compulsion. Investors can discontinue the plan at any time. One
can also increase/ decrease the amount being invested.
Long-Term Gains - Due to rupee-cost averaging and the power of compounding SIPs
have the potential to deliver attractive returns over a long investment horizon.
Convenience - SIP is a hassle-free mode of investment. You can issue a standing
instruction to your bank to facilitate auto-debits from your bank account.
Reduces risk by spreading investment over a longer period of time at various levels of
the market.
Reduces cost of investment in fluctuating markets.
SIPs have proved to be an ideal mode of investment for retail investors who do not have the
resources to pursue active investments.
Disadvantage of Systematic Investment Plans
No downside Protection- Investors should remember that despite of all the

advantages that SIPs have, they are subject to market risks and do not protect investors
from making a loss or ensure them profits in falling markets.
Portfolio risk remains- SIPs are also subject to security risk. Mutual fund
schemes investing in portfolios that turns out to generate negative returns are bound to
make investors incur a loss even if the investment is made through SIPs.
Ideal Profile of investors- Investors opting to invest through an SIP option
should have a long- term investment horizon, be willing to invest regularly, keep
patience; and who cannot invest enough amount at one go before opting for SIPs.
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Defining the investment objective- Investors should invest with a clear objective
in their mind. It helps to figure out an indicative time period for which the investments
would have to be made.
Determining the investment surplus- investors should estimate the amount that
they can afford to invest on a periodical basis. Investors should be conservative while
making this estimate as an over estimated periodical investment amount may turn out to
be a burden for investors.
Matching periodicity to fund flows- SIPs are available in monthly and quarterly
options. Investors should opt for an option that is in tandem with the periodicity of cash
inflows.
Selecting an appropriate scheme category- before investing investors should
take the risk- return profile of a scheme into consideration. Investors should choose a
scheme that suits their investment objective.
Periodical review of investments- after selecting an appropriate scheme and
making investment in it, investors should continuously monitor the performance of
similar schemes to the one in which the investment is done. This enables investors to
compare the performance of their scheme with correspondence schemes and make
necessary adjustments, if required.
Case Study on SIP Real Life Situation
Assume that you are 30 years of age and have a wife and kid. Your Current Annual expenditure
is of Rs.5,00,000. And you are expected to retire at the age of 60 years.
The average prices (i.e. inflation) will rise by 7% pa. After 30 years when you retire, the low risk
rate of return will be 6% pa (Considering you put all your accumulated corpus post retirement in
a bank deposit). You will live for 20 years more post retirement.
So lets see what will be the corpus required at the time of your retirement to maintain the same
current lifestyle additionally with enhanced medical expenses.
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current
expenditure
Rs. 5,00,000
p.a
Inflated @
7% p.a. for
30 years
expenditure at
the time of
retierment Rs.
36,00,000 p.a.
therefore to generate
this income every
year post retirement
you need to
income to be accumulate a corpus
generated post
retirement Rs.
36,00,000 p.a.
corpus
required at
the time of
retirement your first reaction
immopsible! it cannot
be acheived. but then
there is a solution
8 crore
So whats the SolutionJust one simple thing.
Subscribe for an SIP of Rs.15,000 per month in a good diversified equity fund for 30
years and forget it. You still dont believe it that it can be that simple; let us validate our
conviction with actual returns generated in an equity fund over the years.
Equity Fund
SIP Investments 15 year SIP 10 year SIP 5 year SIP 3 year SIP
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Total Amount Invested @ Rs.15000 per 2,700,000 1,800,000 900,000 540,000
month (Rs.)
Market Value as on July 29, 2011 (Rs.) 34,379,093 8,682,024 1,427,405 798,522
Returns (Annualized)*(%) 29.87% 29.64% 18.56% 27.29%
Benchmark Returns (Annualized) (%) # 15.87% 18.42% 8.36% 14.08%
Market Value of SIP in Benchmark# 9,967,057 4,737,423 1,110,339 664,982
From the table it is crystal clear that if an investor did an SIP of Rs.15000 per month in Equity
Fund for 15 years, he would have invested 27 lacs and that would have grown to a whopping
number of 3.4 crore as on date; in spite of so many pitfalls in equity markets in last 15 years.
Still need to think; No pressure but see this what the delay can cost in the same case study
103 | P a g e
Current Age: 30 years, Retirement Age: 60 years
Retirement Corpus to be accumulated: 8 crores
Assumed Rate of Return on Investment: 15% p.a.
With every passing year the time to retirement is reducing and increasing the burden of
investment required. Now the choice is whether we want TO START NOW OR STILL WAIT...
SIP Calculator
With the help of the SIP calculator you can find out how much you can receive from your
investment after a number of years, or you can find out how much you need to invest to get his
desired amount.
For example:
1. Suppose you want to invest per month is Rs. 1,000 for 10 years, and the expected rate of
return is 12%. At the end of 10 years you will receive Rs. 2,30,039.
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2. Suppose you want to receive Rs. 5,00,000 by the end of 10 years, and the
expected rate of return is 12%. You will need to invest Rs. 2174 per month.
SIP Auto Debit Form

This form needs to be filled in case the investor wants to have the periodic investment through
SIP deducted automatically through the Auto Debit Facility, if the investor doesnt have an
account at Canara Bank, the first SIP installment can be paid through cheque only (which is
mentioned on the form). If the investor does have an account at Canara Bank, he can have the
first installment process automatically, it will take around 3 weeks before this will be effective.
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Conditions under which SIP would yield positive results
SIP route would ideally yield positive results only under the following conditions:
Bull or Rising Market: SIP would yield positive results in a bull or rising market as
every new purchase, although made at a higher cost, is ultimately valued at an even
higher price. However, as seen earlier, in such a case it would be wiser to buy the entire
investment lump sum rather than keep "averaging upwards" through the SIP route.
Volatile but rising market: SIP should finally perform well in a volatile but ultimately
rising or bull market. This would be the market kind in which the "rupee cost averaging"
would work most favorably for the investor as the volatility would lead to the best
possible average price. The final rising or subsequent bull market would ensure that the
end price is higher than the average price.
Market in Median range, corrects downwards and then moves up: This would be
another case in which SIP would perform well and in all likelihood better than initial
lump sum investment. This is because the investor will get the assistance of the
intermediate correction to "lower his average cost".
But then does this mean that SIP works under all market conditions. Certainly no, so let us now
examine the market conditions under which SIP would not work.
Conditions under which SIP would not yield positive results
SIP route would not work under the following market conditions:
Bear or falling Market: SIP would not work and in fact yield negative returns in a bear
or falling market as every new purchase, although made at a lower cost would eventually
be valued at an even lower price. In such a market scenario, SIP might outperform lump
sum investments as the investor will get the benefit of "averaging downwards" but the
investor will still lose money - I believe it should be the endeavor of every investor to
make money by investing and not simply "lose less".
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Sideways Market: SIP would not work in a sideways market as you will not get the
benefit of rupee cost averaging and the final value would be closer to the average cost. In
a sideways market, the difference between the performance of SIP and lump sum might
not be material.
Market in Median range, moves upwards and then moves down: This would yet be
one more case in which SIP would not perform because the investor will actually be hurt
by the SIP as he would be "averaging northwards" while the final value would be much
lower due to the subsequent market correction. In fact, in this scenario, lump sum would
perform much better than SIP as it would not be subjected to the "negative effects of
higher rupee cost averaging".
Therefore it has been proved beyond doubt that SIP might not always be a best investment route.
So, not let us move forward and examine when it would be ideal to invest through SIP or when
just buy it lump sum.
Market Superior Comments

Condition Investment
Option
Rising or Bull Lump sum Since the investor buys lump sum at a lower price
Market rather than "averaging upwards" through the SIP
route.
Falling or Bear Neither of the two Simply because in a bear market an investor is
Market going to lose money in equities - whether SIP or
lump sum.
Sideways Market Indifferent between Both will lead to somewhat similar results since
the two there is neither any benefit nor suffering due to
using either of the methods.
Market in median SIP SIP would in most probabilities perform well

range, corrects because the investor will get the assistance of the
downwards and then intermediate correction to "lower his average cost".
moves up.
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Market in Median Lump sum Lump sum should in most likelihood perform better
range, moves since the investor will not average higher.
upwards and then
moves down.
Common misconceptions about SIPs
Misconception: SIPs generate higher return than lump sum investment

Truth: As explained earlier, this is just a misconnection disseminated by vested interests like
mutual funds and their distributors. SIP can be as good or as bad as lump sum in all depends on
which market condition you are in.
Misconception: SIPs always generate positive return over the long term
Truth: There can be nothing further away from truth. This statement is made under the
assumption that equity markets always go up over the long term. If for whatever reasons equity
markets dont go up over the long term then there is no way in which SIP would be able to
generate positive return. And if equity markets indeed always go up over the long term, then
whether SIP or lump sum or any other method, the investor will always get positive return.
Misconception: SIP would always give positive return because of "rupee cost averaging"
Truth: This is a stupid statement. Rupee cost averaging can work in the investors favor or
against him, depending on which market condition it is. If its a bull market then rupee cost
averaging actually works against the investor and vice versa.
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FINDINGS FROM THE STUDY
By the study and analysis of SIP we can conclude that investing by SIP investment is better than
Lump sum investment as it is a more disciplined method and you dont have to time the market
for the best NAV.
You dont have to spend a lot all at once. SIP is better than Lumpsum in the long run as you tend
to gain more profits since the NAV changes every time you invest.
For example:
You invest Rs 5,000 on 5th-Jan05 with NAV of 48.15, after 10 years you will receive Rs
1441007.5 (calculation on Pg. 88)
But in Lumpsum if you invest Rs. 6,05,000 on 5th jan05 with NAV of 48.15, you will receive Rs.
9,83,957.31.
[6,05,000 / 48.15 = 12,564.90
12,564.90 * 78.31 (NAV as on 2nd Jun14) = 9,83,957.31]
Thus you will get a profit of Rs. 4,57,050.19 when you invest in SIP.
[14,41,007.5 9,83,957.31 = 4,57,050.19]
Investors can also discontinue the plan at any time they want and can also increase or decrease
the amount being invested.
With the help of Rupee Cost Averaging a person does not need to worry about the share prices as
he is investing on regular intervals.
So he buys few units in a declining market and more is a rising market.
Although SIP does not guarantee profit but it can reduce the effects of investing in a volatile
market in the long way.
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CONCLUSION
Systematic Investment Plan lets the investors to invest a fixed amount of money in a Mutual
Fund Scheme and reduces the risk of investing in Lumpsum all at once.
You dont need to time the market, since you invest in the NAV of that particular day. SIP is
more feasible to low salaried and middle class men. It helps to save regularly. Thus SIP is
considered as a wise choice when compared to Lumpsum investment since you dont have to
invest a huge sum of money all at once and can help you generate superior returns in a long run.
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BIBLIOGRAPHY
WWW.CANARAROBECO.COM
WWW.CANARABANK.COM
WWW.REBECO.COM
WWW.VALUERESEARCHONLINE.COM
WWW.MUTUALFUNDSINDIA.COM
WWW.MONEYCONTROL.COM
WWW.AMFIINDIA.COM
WWW.RBI.ORG.IN
WWW.INDIAINFOLINE.COM
WWW.CRISIL.COM
WWW.CIEL.CO.IN
WWW.KPMG.COM
WWW.UTIMF.COM
WWW.EQUITYMASTER.COM
WWW.INVESTOPEDIA.COM
WWW.ECONOMICTIMES.COM
Book on Understanding Mutual Funds.
Canara Robeco Product Handbook.
114 | P a g e
Canara Robeco Fact Sheet.
115 | P a g e

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A STUDY ON MANAGING INVESTMENT

PORTFOLIO THROUGH SYSTEMATIC

Jyothi Acharya -122601056

Name: Jyothi Acharya Name: Nikita L. DSouza

Registration No:- 122601056 Registration No:- 122602032

We Nikita L. DSouza and Jyothi Acharya, students of Department Of Commerce, Manipal

LIST OF TABLES AND CHARTS

To study and understand the workings of Systematic Investment Planning in Mutual

Funds with special reference to Canara Robeco.

the Portfolio of customers.

A MF is managed by investment professionals and other service providers, who earn a

The Structure of Mutual Funds

Asset Management Company -

Registrar & Transfer Agent

Advantages of Mutual Funds

Portfolio diversification: is a benefit derived from investment in securities spread across

Professional Management by mutual funds offers expertise in managing the investors

Mutual funds encourage systematic investments .Investors can choose systematic

Disadvantages of Mutual Funds

History of the Indian Mutual Fund Industry

First Phase 1964-87

Second Phase 1987-1993 (Entry of Public Sector Funds)

11,057 UTI 38,247 5.2%

13,021 TOTAL 47,004 6.1%

Third Phase 1993-2003 (Entry of Private Sector Funds)

STRUCTURE OTHERS BY INVESTMENT

Benefits of Open Ended Funds:

Money Market Funds

Tax Saving Schemes

Industry Specific Schemes

EQUTIY DEBT/ INCOME

Classification according to Investment Objective:

Equity/Growth Oriented Scheme

Income Oriented Scheme

Money Market or Liquid Fund

Sector specific funds/schemes

Tax Saving Schemes

Exchange Trade Funds

Industry Specific Schemes

Net Asset Value (NAV) of a scheme:

How do investors choose between funds?

1. Rupee cost averaging:

TABLE I: ASSET UNDER MANAGEMENT OF INDIAN MUTUAL FUND INDUSTRY

Net inflow/outflow and AUM data

Income 10,096 473887

Equity 2452 189200

Balanced -83 14728

Gilt -318 5694

ELSS -430 28034

Gold ETFs -341 7781

Other ETFs 576 4829

Fund of Funds - 3167

TABLE 2:- RESOURCE MOBILISATION BY PRIVATE AND PUBLIC SECTOR BY

$ indicates as on February 28, 2014.

Market Share of leading Mutual Funds (basis AUM)

Products and Investors

Fig. 3: AUM Composition by Product Category

Fig. 4: AUM Composition by Investor Segment

AUM distribution by AMCs

SOURCE: AMFI (Data as of September 2013)

Reliance Mutual Fund 809 Mar-14 100979.16 Dec-13 99083.55 1895.61

ICICI Prudential Mutual 1168 Mar-14 100145.64 Dec-13 89660.6 10485.0

SBI Mutual Fund 515 Mar-14 62631.69 Dec-13 60691.46 1940.23

Franklin Templeton 224 Mar-14 46363.88 Dec-13 45212.75 1151.13