A RESEARCH PROJECT ON A study on performance of debt schemes with special

reference to gilt edge on the basis of NAV, systematic risk, unsystematic risk, return & volatility for last 8 quarterly ending dec, 2 8!"

SUBMITTED TO:Kurukshetra Universit ! Kurukshetra in "u#"i##$ent "%r The &e'ree %" Master %" Business A&$inistrati%n (Sessi%n )**+-)**,Un&er the Su.ervisi%n %": Miss Shally Gupta Faculty MBA TIMT(YNR) Su/$itte& B :Gagan Deep S/o sh. ag!ish "al #lass$% MBA (Final) #lass Roll No.$%&&'(/)( *ni+. Regi. No% ),%N-%.', *ni+. Roll No.

Ti#ak Ra0 Cha&ha Institute %" Mana'e$ent 1 Te2hn%#%' (TIMT(A//iliate! to 0u1u2shet1a *ni+e1sity3 0u1u2shet1a an! App1o+e! By AI#T4) M"N #ollege 4!ucational #o5ple63 Ya5una Naga1% &,7))& (-a1yana) 8h. )&(,.%..)&),3 .,'&&). Fa6$ 9:&%&(,.%..)&), 4%MAI"$ in/o;ti5t.ac.in3 <e= Site$ >>>.ti5t.ac.in

#$%&'N$ &'()A*A$+,N
I -A-AN &''. here by declare that the research project entitled is A stu& %n .er"%r$an2e %" &e/t s2he$es 3ith s.e2ia# re"eren2e t% 'i#t e&'e %n the /asis %" NA4! s ste$ati2 risk! uns ste$ati2 risk! return 1 v%#ati#it "%r #ast 5 6uarter# en&in' &e2! )**578 As the o1iginal >o12 con!ucte! =y 5e an! su=5itte! in the /ul/ill5ent o/ the 1e?ui1e5ent /o1 the !eg1ee Maste1 o/ Business A!5inist1ation to 0u1u2shet1a *ni+e1sity3 0u1u2shet1a The in/o15ation an! !ata gi+en in the 1epo1t is authentic an! t1ue to the =est o/ 5y 2no>le!ge I !o not su=5it the 1epo1t to any othe1 uni+e1sity o1 institute /o1 the a>a1!s o/ any !eg1ee.

(9A9AN DEEP-

ACKNO:;ED9EMENT
Disse1tation 1epo1t /o15s an integ1al pa1t o/ a Manage5ent cou1se3 it is only >hile un!e1going Disse1tation 1epo1t that one actually puts one@s thoughts3 i!eas an! s2ills to p1actical use an! gets to 2no> the 1eality as to >hat actually one has lea1nt at the institute. Not only is this =ut the +e1y /act that the /iel! e6posu1e !oes a >o1l! o/ goo! to aspi1ing ent1ant@s con/i!ence. I a5 than2/ul to 5y 5ento1 Dr7 4ikas Dar a#! (Dire2t%r-3 Tila2 RaA #ha!ha Institute o/ Mgt. B Technology3 Ya5una Naga13 /o1 allo>ing 5e to >o12 on this p1oAect >o12 an! /o1 his 2in! help al>ays. I a5 than2/ul to 5y 5ento1 Ms7 9ari$a 9u.ta (H7O7D7-3 Tila2 RaA #ha!ha Institute o/ Mgt. B Technology3 Ya5una Naga13 /o1 allo>ing 5e to >o12 on this p1oAect >o12 an! /o1 his 2in! help al>ays. I ta2e this oppo1tunity to e6p1ess 5y p1o/oun! !e=ts o/ g1atitu!e an! o=ligation3 to 5y estee5e! gui!e Ms7

Sha##

9u.ta /aculty o/ Tila2 RaA #ha!ha Institute C/ Mgt. B Technology3 Ya5una Naga13 /o1 his 5ost

+alua=le help an! c1eati+e suggestions at all stages o/ 5y >o12. -e1 lea1ne! a!+ice an! gui!ance al>ays 2in!le! inspi1ation in the /ace o/ !i//iculties encounte1e! in the cou1se o/ this 1esea1ch >o12. I a5 highly g1ate/ul to 5y all lectu1e1s an! !e!icate! sta// o/ Tila2 RaA #ha!ha Institute o/ Mgt. B Technology3 Ya5una Naga1 /o1 thei1 2in! help /1o5 ti5e to ti5e. I a5 also than2/ul to the 1espon!ents3 all 5y /1ien!s an! also to +a1ious Auto e6pe1ts /o1 thei1 2in! an! +alua=le gui!ance3 >ho5 I consulte! /o1 5y p1esent >o12.

(GAGAN D448)

CONTENTS
E<e2utive su$$ar Intr%&u2ti%n Pr%"i#e %" the stu& (Area=Or'ani>ati%n Resear2h O/0e2tives The%reti2a# ?ra$e3%rk C%nstru2t 4aria/#es ;iterature Surve 1 Revie3 Resear2h Meth%&%#%' an& Ana# ti2a# t%%#s Resear2h Desi'n Sa$.#in' an& Sa$.#in' Desi'n Ana# ti2a# T%%#s Statisti2a# T%%#s Data C%##e2ti%n Meth%&s H .%thesis Testin' ;i$itati%ns %" the Stu& Resu#ts an& Dis2ussi%ns P%#i2 I$.#i2ati%ns C%n2#usi%n Bi/#i%'ra.h Anne<ure

E@ECUTI4E SUMMARA

INTRODUCTION
DEBT FUNDS
-isto1ically3 in+esto1s ha+e use! =an2 inte1est 1ate as =ench5a12s to Au!ge the pe1/o15ance o/ !e=t Fun!s. -o>e+e13 a !e=t /un! pe1/o15ance ought to =e Au!ge! against a !e=t 5a12et in!e63 Aust as an e?uity /un!@s =ench5a12 >oul! =e Au!ge! against the e?uity 5a12et in!e6. Fu1the1 /o1 !e=t /un!s3 the 2in! o/ !e=t that co5p1ises the po1t/olio >ill also !eci!e the in!e6 to =e use!. I/ the =on! /un! o1 !e=t /un! in ?uestion is a =1oa!%=ase! one3 then3 a =1oa!%=ase! !e=t in!e6 has to =e use! /o1 this pu1pose. I/ the !e=t /un! is na11o>e1 go+e1n5ent secu1ity /un!3 /o1 e6a5ple3 then3 only the go+t. sec. Su=%seg5ent o/ the =1oa!%=ase! in!e6 has to =e use! as the app1op1iate =ench5a12. 8e1/o15ance o/ close!%en! !e=t /un!s >ith a clea1 pe1io! o/ 5atu1ity3 ho>e+e13 5ay =e co5pa1e! >ith =an2 /i6e! !eposits o/ co5pa1a=le 5atu1ity3 as is co55only !one =y in+esto1s in In!ia. In p1actice3 no app1op1iate !e=t in!e6 is a+aila=le in In!ia3 to =e use! /o1 =ench5a12ing !e=t /un!s. So5e analysts o/ten use I%S4#@s I%B4D in!e63 an! its go+e1n5ent secu1ities su=%seg5ent can =e use! as =ench5a12 to Au!ge go+e1n5ent secu1ities /un!s. In any case3 any =ench5a12 /o1 a !e=t /un! 5ust ha+e the sa5e po1t/olio co5position an! the sa5e 5atu1ity p1o/ile as the /un! itsel/3 to =e co5pa1a=le. <hile e+e1y /un! is e6pose! to 5a12et 1is2s3 goo! /un!s shoul! at least 5atch 5aAo1 5a12et in!ices3 an! to =e a=le to sustain =ea1ish 5a12et phases =ette1 than othe1 /un!s. Goo! /un! 5anage1s ope1ate >ith a long te15 pe1specti+e3 !o not sac1i/ice in+esto1 +alue =y e6cessi+e t1a!ing >hich gene1ates a high le+el o/ t1ansaction cost3 an! >ill tu1n out 5o1e consistence pe1/o15ance3 >hich is 5o1e +alua=le than one%ti5e high an! othe1>ise +olatile pe1/o15ance 1eco1!.

The in+esto1 5ust e+aluate the /un! 5anage1@s 1eco1!3 ho> his sche5es ha+e pe1/o15e! o+e1 the yea1s. The1e is a !i//e1ence =et>een institution%5anage! /un!s that ha+e a tea5 o/ 5anage1s >ith success/ul 1eco1!s as against /un!s that a1e 5anage! only =y in!i+i!uals. The 1elia=ility an! t1ac2 1eco1! o/ these sponso1s has =een an i5po1tant /acto1 in in+esto1 pe1ceptions. In the /inal analysis3 asset 5anage5ent co5panies an! thei1 /un! 5anage1s ought to =e Au!ge! on consistency in the 1etu1ns o=taine!3 an! pe1/o15ance 1eco1! against co5peting o1 pee1 g1oup 5anage1s 1unning si5ila1 /un!s. <hile t1ansaction costs incu11e! a1e also an i5po1tant /acto1.

:HAT ARE DEBT SCHEMES IN MUTUA; ?UNDSB

The1e a1e so 5any types o/ Mutual Fun!s. Cne o/ the5 is a De=t Sche5es o1 Inco5e sche5e o1 Inco5e Fun!. De=t /un!s a1e a Mutual Fun!s ai5 is to achie+e 1egula1 an! stea!y inco5e to in+esto1s. These sche5es gene1ally in+est in /i6e! inco5e secu1ities such as =on!s an! co1po1ate !e=entu1es. #apital app1eciation in such sche5es 5ay =e li5ite!. Featu1es$ % Inco5e sche5es p1o+i!e 1etu1n in the /o15 o/ !i+i!en!s. The 1etu1n 5ay =e cu5ulati+e o1 non%cu5ulati+e on a 5onthly3 ?ua1te1ly3 an! hal/ yea1ly o1 yea1ly =asis. Mutual Fun!s ca11y 5a12et 1is23 so no gua1antee! 1ate o/ 1etu1n. In a!!ition to the 1egula1 1etu1n3 the1e is so5e 5a1ginal g1o>th also as 1e/lecte! in the =onus !ecla1e! /1o5 ti5e to ti5e. In the +ie> o/ 1egula13 consistence an! stea!y /lo> o/ 1etu1ns to the in+esto1s3 the co1pus is in+este! p1e!o5inantly in /i6e! inco5e secu1ities3 li2e !e=entu1es3 =on!s3 go+e1n5ent secu1ities etc. o/ cou1se3 /un!s a1e in+este! in sha1es =ut 1elati+ely at lo>e1 pe1centage. 81io1 to &::, all the Mutual Fun!s /loate! 5onthly o1 yea1ly inco5e sche5es >ith assu1e! 1etu1n. This >as su=se?uently p1ohi=ite! in &::,%:' =ut allo>e! in &::7 again.

MUTUAL FUND
Mutual Fun! is a 5echanis5 /o1 pooling the 1esou1ces =y issuing units to the in+esto1s an! in+esting /un!s in secu1ities in acco1!ance >ith o=Aecti+es as !isclose! in o//e1 !ocu5ent. In+est5ents in secu1ities a1e sp1ea! ac1oss a >i!e c1oss%section o/ in!ust1ies an! secto1s an! thus the 1is2 is 1e!uce!. Di+e1si/ication 1e!uces the 1is2 =ecause all stoc2s 5ay not 5o+e in the sa5e !i1ection in the sa5e p1opo1tion at the sa5e ti5e. Mutual Fun! issues units to the in+esto1s in acco1!ance >ith ?uantu5 o/ 5oney in+este! =y the5. In+esto1s o/ 5utual /un!s a1e 2no>n as unit hol!e1s.The in+esto1s in p1opo1tion to thei1 in+est5ents sha1e the p1o/its o1 losses. The 5utual /un!s no15ally co5e out >ith a nu5=e1 o/ sche5es >ith !i//e1ent in+est5ent o=Aecti+es that a1e launche! /1o5 ti5e to ti5e. A 5utual /un! is 1e?ui1e! to =e 1egiste1e! >ith Secu1ities an! 46change Boa1! o/ In!ia (S4BI)3 >hich 1egulates secu1ities 5a12ets =e/o1e it can collect /un!s /1o5 pu=lic. Mutual Fun! 5eans a non%!eposito1y o1 non%=an2ing /inancial inte15e!ia1y3 >hich acts as Ei5po1tant +ehicle /o1 =1inging >ealth hol!e1s an! !e/icit units togethe1 in!i1ectlyF. Mutual /un! is a type o/ in+est5ent #o5pany >hich is conce1ne! >ith ga1ne1ing sa+ings o/ in!i+i!uals an! institutions an! channeliGation o/ these sa+ings in co1po1ate secu1ities in such a >ay as to ensu1e to its in+esto1s@ stea!y 1etu1n an! capital app1eciation >ith lo> e6posu1e to the 1is2. Thus3 5utual /un!s /acilitate the in+esto1s to pool thei1 /un!s to in+est in a !i+e1si/ie! po1t/olio o/ secu1ities. These /un!s a1e in+este! in a >i!e +a1iety o/ secu1ities in such a >ay as to 5ini5iGe 1is2 ensu1ing stea!y 1etu1n. The 5utual /un!s pool the 1esou1ces o/ the sa+e1s =y c1eating clai5s against the5sel+es in the /o15 o/ units sol! to in+esto1s. Basically3 the1e a1e t>o types o/ in+est5ent co5panies +iG open%en! an! close%en!. Cpen%en! in+est5ent co5pany continuously o//e1s its units /o1 sale an! al>ays stan!s 1ea!y to =uy secu1ities (units) at any ti5e. This 1en!e1s the capitaliGation o/ the co5pany to un!e1go a constant changes the in+esto1s pu1chase an! sale thei1 units !i1ectly >ith the /un!s.

Such pu1chase an! sale ta2e place in+a1ia=ly at the net asset +alue at the ti5e unit hol!e1s@ 1e?uest /o1 1e!e5ption. #lose% en! #o5pany has a /i6e! nu5=e1 o/ sha1es that can =e o>ne! =y the in+esting pu=lic. It is Aust li2e anothe1 inco1po1ate! association >ith a /i6e! a5ount o/ capita.

A 5utual /un! is a t1ust that pools the sa+ings o/ a nu5=e1 o/ in+esto1s >ho sha1e a co55on /inancial goal. The 5oney thus collecte! is then in+este! in capital 5a12et inst1u5ents such as sha1es3 !e=entu1es an! othe1 secu1ities. The inco5e ea1ne! th1ough these in+est5ents an! the capital app1eciation 1ealiGe! a1e sha1e! =y its unit hol!e1s in p1opo1tion to the nu5=e1 o/ units o>ne! =y the5. Thus a Mutual Fun! is the 5ost suita=le in+est5ent /o1 the co55on 5an as it o//e1s an oppo1tunity to in+est in a !i+e1si/ie!3 p1o/essionally 5anage! =as2et o/ secu1ities at a 1elati+ely lo> cost. The /lo> cha1t =elo> !esc1i=es =1oa!ly the >o12ing o/ a 5utual /un!$

An open%en!e! /un! ope1ate! =y an in+est5ent co5pany >hich 1aises 5oney /1o5 sha1ehol!e1s an! in+ests in a g1oup o/ assets3 in acco1!ance >ith a state! set o/ o=Aecti+es. Mutual /un!s 1aise 5oney =y selling sha1es o/ the /un! to the pu=lic3 5uch li2e any othe1 type o/ co5pany can sell stoc2 in itsel/ to the pu=lic. Mutual /un!s then ta2e the 5oney they 1ecei+e /1o5 the sale o/ thei1 sha1es (along >ith any 5oney 5a!e /1o5 p1e+ious in+est5ents) an! use it to pu1chase +a1ious in+est5ent +ehicles3 such as stoc2s3 =on!s an! 5oney 5a12et inst1u5ents. In 1etu1n /o1 the 5oney they gi+e to the /un! >hen pu1chasing

sha1es3 sha1ehol!e1s 1ecei+e an e?uity position in the /un! an!3 in e//ect3 in each o/ its un!e1lying secu1ities. Fo1 5ost 5utual /un!s3 sha1ehol!e1s a1e /1ee to sell thei1 sha1es at any ti5e3 although the p1ice o/ the sha1e in a 5utual /un! >ill /luctuate !aily3 !epen!ing upon the pe1/o15ance o/ secu1ities hel! =y the /un!. Bene/its o/ 5utual /un!s inclu!e !i+e1si/ication an! p1o/essional 5oney 5anage5ent. Mutual /un!s o//e1 choice3 li?ui!ity3 an! con+enience3 =ut cha1ge /ees an! o/ten 1e?ui1e a 5ini5u5 in+est5ent. A close!%en! /un! is o/ten co11ectly 1e/e11e! to as a 5utual /un!3 =ut is actually an in+est5ent t1ust. The1e a1e 5any types o/ 5utual /un!s3 inclu!ing agg1essi+e g1o>th /un!3 asset allocation /un!3 =alance! /un!3 =len! /un!3 =on! /un!3 capital app1eciation /un!3 clone /un!3 c1osso+e1 /un!3 e?uity /un!3 /un! o/ /un!s3 glo=al /un!3 g1o>th /un!3 g1o>th an! inco5e /un!3 he!ge /un!3 inco5e /un!3 in!e6 /un!3 inte1national /un!3 5oney 5a12et /un!3 5unicipal /un!3 p1i5e 1ate /un!3 1egional /un!3 secto1 /un!3 specialty /un!3 stoc2 /un!3 an! ta6%/1ee =on! /un!.

TAPES O? MUTUA; ?UND SCHEMES

<i!e +a1ieties o/ Mutual Fun! Sche5es e6ist to cate1 to the nee!s such as /inancial position3 1is2 tole1ance an! 1etu1n e6pectations etc. the ta=le =elo> gi+es an o+e1+ie> into the e6isting types o/ sche5es in the in!ust1y$ %

BA STRUCTURE
Cpen H 4n!e! Sche5es #lose H 4n!e! Sche5es Inte1+al Sche5es

BA IN4ESTMENT OBJECTI4E
G1o>th Sche5es Inco5e Sche5es Balance! Sche5es Money Ma12et Sche5es

OTHER SCHEMES
Ta6 Sa+ing Sche5es Special Sche5es In!e6 Sche5es Secto1 Speci/ic Sche5es

SCHEMES ACCORDIN9 TO STRUCTURE:

A 5utual /un! sche5e can =e classi/ie! into open%en!e! sche5e o1 close%en!e! sche5e !epen!ing on its 5atu1ity pe1io!.

OPEN-ENDED ?UNDC SCHEME

An open%en!e! /un! o1 a sche5e is one that is a+aila=le /o1 su=sc1iption an! 1epu1chase on a continuous =asis. These sche5es !o not ha+e a /i6e! 5atu1ity pe1io!. In+esto1s can con+eniently =uy an! sell units at Net Asset Ialue (NAI) 1elate! p1ices that a1e !ecla1e! on a !aily =asis. The 2ey /eatu1e o/ open%en! sche5es is li?ui!ity.

C;OSE-ENDED ?UNDCSCHEME
A close%en!e! /un! o1 sche5e has a stipulate! 5atu1ity pe1io! e.g. 7%( yea1s. The /un! is open /o1 su=sc1iption only !u1ing a speci/ie! pe1io! at the ti5e o/ launch o/ the sche5e. In+esto1s can in+est in the sche5e at the ti5e o/ the initial pu=lic issue an! the1ea/te1 they can =uy o1 sell the units o/ the sche5e on the stoc2 e6changes >he1e the units a1e liste!. In o1!e1 to p1o+i!e an e6it 1oute to the in+esto1s3 so5e close%en!e! /un!s gi+e an option o/ selling =ac2 the units to the 5utual /un! th1ough pe1io!ic 1epu1chase at NAI 1elate! p1ices. S4BI Regulations stipulate that at least one o/ the t>o e6it 1outes is p1o+i!e! to the in+esto1 i.e. eithe1 1epu1chase /acility o1 th1ough listing on stoc2 e6changes. These 5utual /un!s sche5es !isclose NAI gene1ally on >ee2ly =asis.

INTER4A; SCHEMES
These co5=ine the /eatu1e o/ open%en!e! an! close%en!e! sche5es. They 5ay =e t1a!e! on the stoc2 e6change o1 5ay =e open /o1 sale o1 1e!e5ption !u1ing p1e!ete15ine! inte1+als at NAI 1elate! p1ices.

SCHEMES ACCORDIN9 TO IN4ESTMENT OBJECTI4E:

A sche5e can also =e classi/ie! as g1o>th sche5e3 inco5e sche5e3 o1 =alance! sche5e consi!e1ing its in+est5ent o=Aecti+e. Such sche5es 5ay =e open%en!e! o1 close%en!e! sche5es as !esc1i=e! ea1lie1. Such sche5es 5ay =e classi/ie! 5ainly as /ollo>s$

9RO:TH C EDUITA ORIENTED SCHEMES

The ai5 o/ g1o>th /un!s is to p1o+i!e capital app1eciation o+e1 the 5e!iu5 to long%te15. Such sche5es no15ally in+est a 5aAo1 pa1t o/ thei1 co1pus in e?uities. Such /un!s ha+e co5pa1ati+ely

high 1is2s. These sche5es p1o+i!e !i//e1ent options to the in+esto1s li2e !i+i!en! option3 capital app1eciation3 etc. an! the in+esto1s 5ay choose an option !epen!ing on thei1 p1e/e1ences. The in+esto1s 5ust in!icate the option in the application /o15. The 5utual /un!s also allo> the in+esto1s to change the options at a late1 !ate. G1o>th sche5es a1e goo! /o1 in+esto1s ha+ing a long%te15 outloo2 see2ing app1eciation o+e1 a pe1io! o/ ti5e.

INCOME C DEBT ORIENTED SCHEME

The ai5 o/ inco5e /un!s is to p1o+i!e 1egula1 an! stea!y inco5e to in+esto1s. Such sche5es gene1ally in+est in /i6e! inco5e secu1ities such as =on!s3 co1po1ate !e=entu1es3 go+e1n5ent secu1ities an! 5oney 5a12et inst1u5ents. Such /un!s a1e less 1is2y co5pa1e! to e?uity sche5es. These /un!s a1e not a//ecte! =ecause o/ /luctuations in e?uity 5a12ets. -o>e+e13 oppo1tunities o/ capital app1eciation a1e also li5ite! in such /un!s. The NAIs o/ such /un!s a1e a//ecte! =ecause o/ change in inte1est 1ates in the count1y. I/ the Inte1net 1ates /all3 NAIs o/ such /un!s a1e li2ely to inc1ease in the sho1t 1un an! +ice +e1sa. -o>e+e13 long%te15 in+esto1s 5ay not =othe1 a=out these /luctuations.

BA;ANCED ?UND
The ai5 o/ =alance! /un!s is to p1o+i!e =oth g1o>th an! 1egula1 inco5e as such sche5es in+est =oth in e?uities an! /i6e! inco5e secu1ities in the p1opo1tion in!icate! in thei1 o//e1 !ocu5ents. These a1e app1op1iate /o1 in+esto1s loo2ing /o1 5o!e1ate g1o>th. They gene1ally in+est ')%J)K in e?uity B !e=t inst1u5ents. These /un!s a1e also a//ecte! =ecause o/ /luctuations in sha1e p1ices in the stoc2 5a12ets. -o>e+e13 NAIs o/ such /un!s a1e li2ely to =e less +olatile co5pa1e! to pu1e e?uity /un!s.

MONEA MARKET OR ;IDUID ?UND

These /un!s a1e also inco5e /un!s an! thei1 ai5 is to p1o+i!e easy li?ui!ity3 p1ese1+ation o/ capital an! 5o!e1ate inco5e. These sche5es in+est e6clusi+ely in sa/e1 sho1t%te15 inst1u5ents such as t1easu1y =ills3 ce1ti/icates o/ !eposit3 co55e1cial pape1 an! inte1%=an2 call 5oney3 go+e1n5ent secu1ities3 etc. Retu1ns on these sche5es /luctuate 5uch less co5pa1e! to othe1 /un!s. These /un!s a1e app1op1iate /o1 co1po1ate an! in!i+i!ual in+esto1s as a 5eans to pa12 thei1 su1plus /un!s /o1 sho1t pe1io!s.

OTHER SCHEMES:

TA@ SA4IN9 SCHEMES

These sche5es o//e1 ta6 1e=ates to the in+esto1s un!e1 speci/ic p1o+isions o/ the Inco5e Ta6 Act3 &:J& as the Go+e1n5ent o//e1s ta6 incenti+es /o1 in+est5ent in speci/ie! a+enues e.g. 4?uity "in2e! Sa+ings Sche5es (4"SS). 8ension sche5es launche! =y 5utual /un!s also o//e1 ta6 =ene/its. These sche5es a1e g1o>th o1iente! an! in+est p1e%!o5inantly in e?uities. Thei1 g1o>th oppo1tunities an! 1is2s associate! a1e li2e any e?uity%o1iente! sche5e.
9I;T ?UND

These /un!s in+est e6clusi+ely in go+e1n5ent secu1ities. Go+e1n5ent secu1ities ha+e no !e/ault 1is2.NAIs o/ these sche5es also /luctuate !ue to change in inte1est 1ates an! othe1 econo5ic /acto1s as the case >ith inco5e o1 !e=t o1iente! sche5es.

INDE@ ?UND

In!e6 /un!s 1eplicate the po1t/olio o/ a pa1ticula1 in!e6 such as the BS4 Sensiti+e in!e63 SB8 NS4 7) in!e6 (Ni/ty)3 etc. These sche5es in+est in the secu1ities in the sa5e >eight age co5p1ising o/ an in!e6. NAIs o/ such sche5es >oul! 1ise o1 /all in acco1!ance >ith the 1ise o1 /all in the in!e63 though not e6actly =y the sa5e pe1centage !ue to so5e /acto1s 2no>n as Et1ac2ing e11o1F in technical te15s. Necessa1y !isclosu1es in this 1ega1! a1e 5a!e in the o//e1 !ocu5ent o/ the 5utual /un! sche5e.The1e a1e also e6change t1a!e! in!e6 /un!s launche! =y the 5utual /un!s3 >hich a1e t1a!e! on the stoc2 e6changes.

SECTOR SPECI?IC ?UNDS C SCHEMES

These a1e the /un!s/sche5es3 >hich in+est in the secu1ities o/ only those secto1s o1 in!ust1ies as speci/ie! in the o//e1 !ocu5ents e.g. 8ha15aceuticals3 So/t>a1e3 Fast Mo+ing #onsu5e1 Goo!s (FM#G)3 8et1oleu5 stoc2s3 etc. The 1etu1ns in these /un!s a1e !epen!ent on the pe1/o15ance o/ the 1especti+e secto1s/in!ust1ies. <hile these /un!s 5ay gi+e highe1 1etu1ns3 they a1e 5o1e 1is2y co5pa1e! to !i+e1si/ie! /un!s.

In+esto1s nee! to 2eep a >atch on the pe1/o15ance o/ those secto1s/in!ust1ies an! 5uch e6it at an app1op1iate ti5e. They 5ay also see2 a!+ice o/ an e6pe1t.

ASSURED RETURN SCHEME

Assu1e! 1etu1n sche5es a1e those sche5es that assu1e a speci/ic 1etu1n to the unit hol!e1s i11especti+e o/ pe1/o15ance o/ the sche5e. A sche5e cannot p1o5ise 1etu1ns unless such 1etu1ns a1e /ully gua1antee! =y the sponso1 o1 AM# an! this is 1e?ui1e! to =e !isclose! in the o//e1 !ocu5ent. In+esto1s shoul! ca1e/ully 1ea! the o//e1 !ocu5ent >hethe1 1etu1n is assu1e! /o1 the enti1e pe1io! o/ the sche5e o1 only /o1 a ce1tain pe1io!. So5e sche5es assu1e 1etu1ns one yea1 at a ti5e an! they 1e+ie> an! change it at the =eginning o/ the ne6t yea1.

;OAD OR NO-;OAD ?UND

A "oa! Fun! is one that cha1ges a pe1centage o/ NAI /o1 ent1y o1 e6it. That is3 each ti5e one =uys o1 sells units in the /un!3 a cha1ge >ill =e paya=le. This cha1ge is use! =y the 5utual /un! /o1 5a12eting an! !ist1i=ution e6penses. Suppose the NAI pe1 unit is Rs.&). I/ the ent1y as >ell as e6it loa! cha1ge! is &K3 then the in+esto1s >ho =uy >oul! =e 1e?ui1e! to pay Rs. &).&) an! those >ho o//e1 thei1 units /o1 1epu1chase to the 5utual /un! >ill get only Rs.:.:) pe1 unit. The in+esto1s shoul! ta2e the loa!s into consi!e1ation >hile 5a2ing in+est5ent as these a//ect thei1 yiel!s/1etu1ns. -o>e+e13 the in+esto1s shoul! also consi!e1 the pe1/o15ance t1ac2 1eco1! an! se1+ice stan!a1!s o/ 5utual /un!3 >hich a1e 5o1e i5po1tant. 4//icient /un!s 5ay gi+e highe1 1etu1ns in spite o/ loa!s.A no%loa! /un! is one that !oes not cha1ge /o1 ent1y o1 e6it. It 5eans the in+esto1 can ente1 the /un!/sche5e at NAI an! no a!!itional cha1ges a1e paya=le on pu1chase o1 sale o/ units.

Category wise Growth of Mutual Fund AUMs Category March 2004 March 2005 March 2006 March 2007 Income Funds 'L3LJ, 773(LL '(37J' J.37.' Growth Funds &,3'L, &,3L7. :3LL( .,3J&, Balanced Funds &:3.(, &J3:7' ,3&'& '3)L) Liquid/money '3&.L L3)J: &,3(,' '&3()' market Funds Gilt Funds .3,&( '3&J, ,3:&) J3).J Elss Funds .37., &3(JL &3..L &3JJ: Total ,*!E5+ F**!E,G +,!GHG FI,!HFH

(Rs crore) March 2008 '(3J)7 ,J3(&& '3LJ( 7'3)JL '37(J &3(.( FG,!EEG

AUM &istri/uti%n a22%r&in' t% Cate'%ries as %n IFst JU;A!)**5

(Rs7 in Cr%res-

#atego1ies Inco5e G1o>th Balance! "i?ui!/Money Ma12et Gilt 4"SS Total

Cpen 4n! 7,7J. .&L7L ,(7L J()(: 7'J) '(, &7.&:)

#lose 4n! .J(' &.'( J,) % % &))J 777(

Total 7J.,J .,&)7 ',LL J()(: 7'J) &'(: &7(('(

K o/ Total ,J &7 , '. , & &))

TRENDS IN TRANSACTIONS BA MUTUA; ?UNDS Yea1 4n!ing G1oss 8u1chases G1oss Sales Net In+est5ents

.))LMDe=tN .))(MDe=tN .))JMDe=tN .))7MDe=tN

(Rs.) 7'3,J:.L. 7L3,,'... '73.:7.)& L3::&.:(

(Rs.) ',3.&,..J ,L37,J.'L ,&3.'..L: J3&.'.&&

(Rs.) &&3&7J.7J &:3(:(.(' &'3)7..&. .3LJ(.LJ

9O4T SECURITIES

Go+e1n5ent secu1ities (G%secs) a1e so+e1eign secu1ities >hich a1e issue! =y the Rese1+e Ban2 o/ In!ia on =ehal/ o/ Go+e1n5ent o/ In!ian lieu o/ the #ent1al Go+e1n5entOs 5a12et =o11o>ing p1og1a55e The te15 Go+e1n5ent Secu1ities inclu!es$ #ent1al Go+e1n5ent Secu1ities. State Go+e1n5ent Secu1ities T1easu1y =ills The #ent1al Go+e1n5ent =o11o>s /un!s to /inance its O/iscal !e/icit. The 5a12et =o11o>ing o/ the #ent1al Go+e1n5ent is 1aise! th1ough the issue o/ !ate! secu1ities an! ,J' !ays t1easu1y =ills eithe1 =y auction o1 =y /loatation o/ loans. In a!!ition to the a=o+e3 t1easu1y =ills o/ :& !ays a1e issue! /o1 5anaging the te5po1a1y cash 5is5atches o/ the Go+e1n5ent. These !o not /o15 pa1t o/ the =o11o>ing p1og1a55e o/ the #ent1al Go+e1n5ent.

?eatures %" 9%vern$ent Se2urities

Nomenclature

The

Example: 12.25% GOI 2008 indicates the following: 12.25% is the coupon ate! GOI denotes Go"e nment of India! which is the #o owe ! 2008 is the $ea of matu it$.

coupon

1ate

an!

yea1

o/

5atu1ity

i!enti/ies

the

go+e1n5ent

secu1ity.

Eligibility

All entities 1egiste1e! in In!ia li2e =an2s3 /inancial institutions3 81i5a1y Deale1s3 /i15s3 co5panies3 co1po1ate =o!ies3 pa1tne1ship /i15s3 institutions3 5utual /un!s3 Fo1eign Institutional In+esto1s3 State Go+e1n5ents3 81o+i!ent Fun!s3 t1usts3 1esea1ch o1ganisations3 Nepal Rasht1a =an2 an! e+en in!i+i!uals a1e eligi=le to pu1chase Go+e1n5ent Secu1ities.

A vai#a/i#it
Go"e nment secu ities a e highl$ li%uid inst uments a"aila#le #oth in the p ima $ and seconda $ ma &et. 'he$ can #e pu chased f om ( ima $ )eale s. (*+ Gilts ,td.! is a leading ( ima $ )eale in the go"e nment secu ities ma &et! and is acti"el$ in"ol"ed in the t ading of go"e nment secu ities.
Forms of Issuance of Government Securities

Ban2s3 81i5a1y Deale1s an! Financial Institutions ha+e =een allo>e! to hol! these secu1ities >ith the 8u=lic De=t C//ice o/ Rese1+e Ban2 o/ In!ia in !e5ate1ialiGe! /o15 in accounts 2no>n as Su=si!ia1y Gene1al "e!ge1 (SG") Accounts. 4ntities ha+ing a Gilt Account >ith Ban2s o1 81i5a1y Deale1s can hol! these secu1ities >ith the5 in !e5ate1ialiGe! /o15. In a!!ition go+e1n5ent secu1ities can also =e hel! in !e5ate1ialiGe! /o15 in !e5at accounts 5aintaine! >ith the Deposito1y 8a1ticipants o/ NSD".

Mini$u$ A$%unt In te15s o/ RBI 1egulations3 go+e1n5ent !ate! secu1ities can =e pu1chase! /o1 a 5ini5u5 a5ount o/ Rs. &)3)))/%only.T1easu1y =ills can =e pu1chase! /o1 a 5ini5u5 a5ount o/ Rs .7)))/% only an! in 5ultiples the1eo/. State Go+e1n5ent Secu1ities can =e pu1chase! /o1 a 5ini5u5 a5ount o/ Rs &3)))/% only.

Repayment
Go"e nment secu ities a e epaid at pa on the expi $ of thei teno . 'he diffe ent epa$ment methods a e as follows :

Fo1 SG" account hol!e1s3 the 5atu1ity p1ocee!s >oul! =e c1e!ite! to thei1 cu11ent accounts >ith the Rese1+e Ban2 o/ In!ia. Fo1 Gilt Account -ol!e1s3 the Ban2/81i5a1y Deale1s3 >oul! 1ecei+e the 5atu1ity p1ocee!s an! they >oul! pay the Gilt Account -ol!e1s. Fo1 entities ha+ing a !e5at acount >ith NSD"3the 5atu1ity p1ocee!s >oul! =e collecte! =y thei1 D8Os an! they in tu1n >oul! pay the !e5at Account -ol!e1s.

Day Count Fo1 go+e1n5ent !ate! secu1ities an! state go+e1n5ent secu1ities the !ay count is ta2en as ,J) !ays /o1 a yea1 an! ,) !ays /o1 e+e1y co5plete! 5onth. -o>e+e1 /o1 T1easu1y =ills it is ,J7 !ays /o1 a yea1. E<a$.#e $ A client pu1chases (.')K GCI .)&. /o1 /ace +alue o/ Rs. &) lacs.; Rs.&)&.L)3 i.e. the client pays Rs.&)&.L) /o1 e+e1y unit o/ go+e1n5ent secu1ity ha+ing a /ace +alue o/ Rs. &))/% The settle5ent is !ue on Ccto=e1 ,3 .)).. <hat is the a5ount to =e pai! =y the clientP The secu1ity is (.')K GCI .)&. /o1 >hich the inte1est pay5ent !ates a1e ,1! May3 an! , d
*o"em#e e"e $ $ea .

The last inte1est pay5ent !ate /o1 the cu11ent yea1 is , d

follows:

-a$ 2002. 'he calculation would #e made as

Face +alue o/ Rs. &) lacs.; Rs.&)&.L)K. The1e/o1e the p1incipal a5ount paya=le is Rs.&) lacs D &)&.L)K Q&)3&L3))) "ast inte1est pay5ent !ate >as May ,3 .)). an! settle5ent !ate is Ccto=e1 ,3 .)).. The1e/o1e the inte1est has to =e pai! /o1 &7) !ays (inclu!ing , d -a$! and excluding Octo#e .! 2002/ (.L !ays o/ May3 inclu!ing , d
-a$! up to .0th -a$ 0 .0 da$s of 1une! 1ul$! 2ugust and 3eptem#e 0 2 da$s of Octo#e /. 3ince the settlement is on Octo#e .! 2002! that date is excluded.

Inte1est paya=le Q 10 lacs 4 5.60% 4 150 7 8s. .08...... ,J) D &)) Total a5ount paya=le =y client Q&)3&L3)))9,)L,,.,,QRs. &)3'L3L,,.,,

TYPES

F G !ERN"ENT SEC#RITIES

Go+e1n5ent Secu1ities a1e o/ the /ollo>ing types$%

Date$ Securities % a e gene all$ fixed matu it$ and fixed coupon secu ities usuall$ ca $ing semi9annual coupon. 'hese a e called dated secu ities #ecause these a e identified #$ thei date of matu it$ and the coupon! e.g.! 11.0.% GOI 2012 is a :ent al Go"e nment secu it$ matu ing in 2012! which ca ies a coupon of 11.0.% pa$a#le half $ea l$. 'he &e$ featu es of these secu ities a e:

They a1e issue! at /ace +alue. #oupon o1 inte1est 1ate is /i6e! at the ti5e o/ issuance3 an! 1e5ains constant till 1e!e5ption o/ the secu1ity. The teno1 o/ the secu1ity is also /i6e!. Inte1est /#oupon pay5ent is 5a!e on a hal/ yea1ly =asis on its /ace +alue. S'he secu it$ is edeemed at pa ;face "alue/ on its matu it$ date.
&ero Coupon bon$s a e #onds issued at discount to face "alue and edeemed at pa . 'hese we e issued fi st on 1anua $ 1<! 1<<6 and we e followed #$ two su#se%uent issues in 1<<69<5 and 1<<59<= especti"el$. 'he &e$ featu es of these secu ities a e:

They a1e issue! at a !iscount to the /ace +alue. The teno1 o/ the secu1ity is /i6e!. The secu1ities !o not ca11y any coupon o1 inte1est 1ate. The !i//e1ence =et>een the issue p1ice (!iscounte! p1ice) an! /ace +alue is the 1etu1n on this secu1ity. The secu1ity is 1e!ee5e! at pa1 (/ace +alue) on its 5atu1ity !ate. Part# Pai& St%2k is stoc& whe e pa$ment of p incipal amount is made in installments o"e a gi"en time f ame. It meets the needs of in"esto s with egula flow of funds and the need of Go"e nment when it does not need funds immediatel$. 'he fi st issue of such stoc& of eight $ea matu it$ was made on *o"em#e 15! 1<<6 fo 8s. 2000 c o e. 3uch stoc&s ha"e #een issued a few mo e times the eafte . 'he &e$ featu es of these secu ities a e: They a1e issue! at /ace +alue3 =ut this a5ount is pai! in install5ents o+e1 a speci/ie! pe1io!. #oupon o1 inte1est 1ate is /i6e! at the ti5e o/ issuance3 an! 1e5ains constant till 1e!e5ption o/ the secu1ity. The teno1 o/ the secu1ity is also /i6e! Inte1est/#oupon pay5ent is 5a!e on a hal/ yea1ly =asis on its /ace +alue The secu1ities is 1e!ee5e! at pa1 (/ace +alue) on its 5atu1ity !ate.

?#%atin' Rate B%n&s a e #onds with "a ia#le inte est ate with a fixed pe centage o"e a #enchma & ate. 'he e ma$ #e a cap and a floo ate attached the e#$ fixing a maximum and minimum inte est ate pa$a#le on it. >loating ate #onds of fou $ea matu it$ we e fi st issued on 3eptem#e 2<! 1<<5! followed #$ anothe issue on )ecem#e 5! 1<<5. Recently R'I issue$ a floating rate bon$( t)e coupon of *)ic) is benc)mar+e$ against average yiel$ on ,-. Days Treasury 'ills for last si/ mont)s0 T)e coupon is
reset every si/ mont)s.

The 2ey /eatu1es o/ these secu1ities a1e$

They a1e issue! at /ace +alue. #oupon o1 inte1est 1ate is /i6e! as a pe1centage o+e1 a p1e!e/ine! =ench5a12 1ate at the ti5e o/ issuance. The =ench5a12 1ate 5ay =e T1easu1y =ill 1ate3 =an2 1ate etc. Though the =ench5a12 !oes not change3 the 1ate o/ inte1est 5ay +a1y acco1!ing to the change in the =ench5a12 1ate till 1e!e5ption o/ the secu1ity. The teno1 o/ the secu1ity is also /i6e!. Inte1est /#oupon pay5ent is 5a!e on a hal/ yea1ly =asis on its /ace +alue. The secu1ity is 1e!ee5e! at pa1 (/ace +alue) on its 5atu1ity !ate. B%n&s 3ith Ca##CPut O.ti%n: >i st time in the histo $ of Go"e nment 3ecu ities ma &et 8+I issued a #ond with call and put option this $ea . 'his #ond is due fo edemption in 2012 and ca ies a coupon of =.52%. ?owe"e the #ond has call and put option afte fi"e $ea s i.e. in $ea 2005. In othe wo ds it means that holde of #ond can sell #ac& ;put option/ #ond to Go"e nment in 2005 o Go"e nment can #u$ #ac& ;call option/ #ond f om holde in 2005. 'his #ond has #een p iced in line with 5 $ea #onds.
Capital in$e/e$ 'on$s a e #onds whe e inte est ate is a fixed pe centage o"e the wholesale p ice index. 'hese p o"ide in"esto s with an effecti"e hedge against inflation. 'hese #onds we e floated on )ecem#e 2<! 1<<5 on tap #asis. 'he$ we e of fi"e $ea matu it$ with a coupon ate of = pe cent o"e the wholesale p ice index. 'he p incipal edemption is lin&ed to the @holesale ( ice Index. 'he &e$ featu es of these secu ities a e:

They a1e issue! at /ace +alue. #oupon o1 inte1est 1ate is /i6e! as a pe1centage o+e1 the >holesale p1ice in!e6 at the ti5e o/ issuance. The1e/o1e the actual a5ount o/ inte1est pai! +a1ies acco1!ing to the change in the <holesale 81ice In!e6. The teno1 o/ the secu1ity is /i6e!. Inte1est /#oupon pay5ent is 5a!e on a hal/ yea1ly =asis on its /ace +alue. The p1incipal 1e!e5ption is lin2e! to the <holesale 81ice In!e6.

Ca#en&ar "%r au2ti%n %" 9%vern$ent Se2urities "%r ?irst Ha#" %" )**5-)**, Rese1+e Ban2 o/ In!ia has 1elease! the in!icati+e issuance calen!a1 /o1 issue o/ !ate! secu1ities /o1 the /i1st hal/ o/ .))L%):. As pe1 the calen!a13 the go+e1n5ent is slate! to =o11o> a su5 o/ Rs. :J3))) c1o1e !u1ing the /i1st hal/ o/ the cu11ent /iscal as pe1 the /ollo>ing sche!ule.

Sr7 N%7 Peri%& %" au2ti%n & Ap1il '%&&3 .))L

A$%unt(Rs7 Cr%reF****

Ter$ %" se2urit i) 7%: yea1 secu1ity /o1 Rs.J3))) c1o1e

ii)

ii) .)%yea1 an! a=o+e secu1ity /o1 Rs. '3))) c1o1e

. Ap1il &L%.73 .))L

F****

i) &)%&' yea1 secu1ity /o1 Rs.J3))) c1o1e ii) .)%yea1 an! a=o+e secu1ity /o1 Rs. '3))) c1o1e
i) 7%: yea1 secu1ity /o1 Rs.J3))) c1o1e

, May .%:3 .))L

F****

ii)

.)%yea1 an! a=o+e secu1ity /o1 Rs. '3))) c1o1e

' May &J%.,3 .))L

F****

i) .)%yea1 an! a=o+e secu1ity /o1 Rs. '3))) c1o1e ii) &)%&' yea1 secu1ity /o1 Rs.J3))) c1o1e
i) &)%&' yea1 secu1ity /o1 Rs.J3))) c1o1e

7 May ,)% une J3 .))L

F****

ii) .)%yea1 an! a=o+e secu1ity /o1 Rs. '3))) c1o1e &7%&: yea1 secu1ity /o1 Rs.J3))) c1o1e &)%&' yea1 Rs.J3))) c1o1e &7%&: yea1 Rs.J3))) c1o1e secu1ity secu1ity /o1 /o1

J une &,%.)3 .))L ( uly '%&&3 .))L L uly &L%.73 .))L

H*** F**** H***

i)

&)%&' yea1 secu1ity /o1

Rs.J3))) c1o1e

: August &%L3 .))L

F****

ii) .)%yea1 an! a=o+e secu1ity /o1 Rs. '3))) c1o1e. &7%&: yea1 Rs.J3))) c1o1e secu1ity /o1

&) August &'%..3 .))L

H***

i)

&)%&' yea1 secu1ity /o1 Rs.73))) c1o1e.

ii) .)%yea1 an! a=o+e secu1ity /o1 Rs. ,3))) c1o1e

&& Septe5=e1 7%&.3 .))L

5***

T%ta#

,H***

R The GCI =o11o>ing /o1 the /i1st hal/ o/ the cu11ent /iscal has =een set at Rs. :J3))) c1o1e. The =o11o>ings 5a!e !u1ing the co11espon!ing pe1io! last yea1 >e1e Rs. :(3))) c1o1e. R The siGe o/ the =o11o>ing p1og1a55e in /i1st hal/ o/ the cu11ent /iscal co+e1s JJ.&'K o/ the total =u!gete! =o11o>ings o/ the go+e1n5ent. The secu1ities to =e issue! un!e1 the Go+t.@s =o11o>ing p1og1a55e a1e >ell sp1ea! ac1oss the 5atu1ity spect1u5. In the 5atu1ity =uc2et o/ 7%: y1s3 the =o11o>ing is slate! to =e Rs.&.3))) c1o1e3 >hile the highest issuance o/ Rs. ,73))) c1o1e is in &)%&' y1s secu1ities. The =o11o>ing calen!a1 in!icates a g1oss =o11o>ing o/ Rs. &L3))) c1o1e in the &7%&: y1s 5atu1ity =uc2et. In the long !ate! 5atu1ity spect1u5 i.e .) y1s an! a=o+e3 Rs.,&3))) c1o1e is sche!ule! to =e =o11o>e!. )**5 J *, )**+ - *5 Ten%r (in earsA$%unt (in Rs7 Cr%re-

K t% 9r%ss B%rr%3in'

K t% 9r%ss

(in ears-

B%rr%3in'

EJ, F* J FG FE J )* )* an& a/%ve T%ta#

&.3))) ,73))) &L3))) ,&3))) :J3)))

&..7) ,J.'J &L.(7 ,...: &)).))

...JL 'L.'7 ,.): .7.((

Market Sta/i#isati%n S2he$e R MSS sche5e >as int1o!uce! in Ap1il .))' >ith an ai5 to p1o+i!e g1eate1 SSS/le6i=ility to RBI in 5anage5ent o/ li?ui!ity. It acts as an a!!itional tool /o1 5aintaining a!e?uate li?ui!ity /lo> in the syste5. These issuances a1e a=o+e an! o+e1 the no15al 5a12et%=o11o>ing p1og1a55e. R The MSS ceiling is cu11ently /i6e! at Rs. .37)3))) c1o1e. The th1eshol! at >hich the ceiling >ill =e 1e+ie>e! is Rs. .3,73))) c1o1e. R The net inc1e5ental issuance un!e1 MSS th1ough G%sec stoo! at !u1ing the FY .))( % )L is at Rs. &3&.3,&( c1o1e. As on .Lth Ma1ch@)L the net outstan!ing un!e1 MSS stoo! at Rs. &3JL3,:. c1o1e. State 9%vern$ent Se2urities State Go+e1n5ent Secu1ities a1e secu1ities/loans issue! =y the Rese1+e Ban2 o/ In!ia on =ehal/ o/ +a1ious state go+e1n5ents /o1 /inancing thei1 !e+elop5ental nee!s. These secu1ities a1e auctione! =y the Rese1+e Ban2 o/ In!ia /1o5 ti5e to ti5e. These auctions a1e o/ /i6e! coupon3 >ith p1e announce! noti/ie! a5ounts /o1 !i//e1ent states. A..r%ve& Se2urities App1o+e! secu1ities a1e the secu1ities3 >hich a1e eligi=le /o1 S"R pu1poses un!e1 Section .' o/ the Ban2ing Regulation Act

PRO?I;E O? THE STUDA

My stu!y is con/ine! to e+aluate the pe1/o15ance o/ !e=ts sche5es
the #asis of *2A! s$stematic is& un s$stematic is& etu n and "olatilit$. with special efe ence to gilt edge on

I ha+e chosen , gilt e!ge sche5es to chec2 the pe1/o15ance o/ these sche5es /o1 the yea1 en!e! o/ !ec3.))L on the =asis o/ !i//e1ent /acto1.

TREASURA BI;;S
A t1easu1y =ill is a pa1ticula1 2in! o/ /inance =ill o1 a p1o5isso1y note put out =y the go+t. o/ the count1y. T =ills in the 5oney 5a12et a1e the inst1u5ents o/ sho1t te15 /inance an! ha+e a 5atu1ity

pe1io! o/ less than one yea1. The go+t. issues these =ills to 5eet its sho1t te15 li?ui!ity 1e?ui1e5ents. They a1e also a han!y an! use/ul /iscal inst1u5ent ena=les the =an2 to 5eet thei1 Statuto1y "i?ui! Ratio an! #ash Rese1+e Ratio 1e?ui1e5ents as they can pa12 thei1 /un!s in these inst1u5ents to 5eet the statuto1y 1atios.

T .es %" Treasur Bi##s:

The1e a1e !i//e1ent types o/ T1easu1y =ills =ase! on the 5atu1ity pe1io! an! utility o/ the issuance li2e3 a!%hoc T1easu1y =ills3 , 5onths3 &.5onths T1easu1y =ills etc. In In!ia3 at p1esent3 the T1easu1y Bills a1e the :&%!ays3 &L.%!ays an! ,J'%!ays T1easu1y =ills. Bene"its O" Invest$ent In Treasur Bi##s No ta6 !e!ucte! at sou1ce Se1o !e/ault 1is2 =eing so+e1eign pape1 -ighly li?ui! 5oney 5a12et inst1u5ent Bette1 1etu1ns especially in the sho1t te15 T1anspa1ency Si5pli/ie! settle5ent -igh !eg1ee o/ t1a!a=ility an! acti+e secon!a1y 5a12et /acilitates 5eeting unplanne!

/un! 1e?ui1e5ents.

Treasur Bi## Rate:

T1easu1y =ill 1ate is the 1ate o/ inte1est at >hich t1easu1y =ills a1e sol! =y RBI. The e//ecti+e 1etu1n on t =ills is the !iscount at >hich they a1e sol!3 an! is =ase! on the !i//e1ence =et>een the p1ice at >hich they a1e sol! an! thei1 1e!e5ption +alue.

Aie#&s %n M%ne Market Se2urities :

4//ecti+e Annual Retu1n$

The ?uote! annual no5inal inte1est 1ate on 5oney 5a12et secu1ities >ith a 5atu1ity o/ less then one yea1 can =e con+e1te! to an e//ecti+e annual inte1est 1etu1n (4AR) using the /ollo>ing e?uation$ 4AR Q &9i ,J7/h

,J7/h

%&

<he1e h Q nu5=e1 o/ !ays to 5atu1ity

Discount Yiel!s$ T1easu1y =ills a1e =ought an! sol! on a !iscount =asis. That is3 instea! o/ !i1ectly 1ecei+e! inte1est pay5ents o+e1 the in+est5ent ho1iGon3 get the p1o/its /1o5 these !iscounte! 1ates.

!y

Q M(8/ H8o)/8oN(,J7/h)

Treasur Bi##s - An E""e2tive Cash Mana'e$ent Pr%&u2t

' easu $ +ills a e "e $ useful inst uments to deplo$ sho t te m su pluses depending upon the a"aila#ilit$ and e%ui ement. E"en funds which a e &ept in cu ent accounts can #e deplo$ed in t easu $ #ills to maximise etu ns +an&s do not pa$ an$ inte est on fixed deposits of less than 15 da$s!o #alances maintained in cu ent accounts! whe eas t easu $ #ills can #e pu chased fo an$ num#e of da$s depending on the e%ui ements. 'his helps in deplo$ment of idle funds fo "e $ sho t pe iods as well. >u the ! since e"e $ wee& the e is a <1 da$s t easu $ #ills matu ing and e"e $ fo tnight a .=6 da$s t easu $ #ills matu ing! one can pu chase t easu $ #ills of diffe ent matu ities as pe e%ui ements so as to match with the especti"e outflow of funds. 2t times when the li%uidit$ in the econom$ is tight! the etu ns on t easu $ #ills a e much highe as compa ed to #an& deposits e"en fo longe te m. +esides!

#ette $ields and a"aila#ilit$ fo "e $ sho t te33no s! anothe impo tant ad"antage of t easu $ #ills o"e #an& deposits is that the su plus cash can #e in"ested depending upon the stagge ed e%ui ements. E/ample % 3uppose pa t$ 2 has a su plus cash of 8s 200 c o e to #e deplo$ed in a p oBect. ?owe"e ! it does not e%ui e the funds at one go #ut e%ui es them at diffe ent points of time as detailed #elow: >unds 2"aila#le as on 1.1.2000 8s. 200 c o e )eplo$ment in a p oBect 8s. 200 c o e 2s pe the e%ui ements =.1.2000 1..1.2000 02.2.2000 08.2.2000 8s. 8s. 8s. 8s. 50 c o e 20 c o e .0 c o e 100 c o e

Out of the a#o"e funds and the e%ui ement schedule! the pa t$ has following two options fo effecti"e cash management of funds:

ption I Invest t)e cas) not re1uire$ *it)in 23 $ays in ban+ $eposits 'he pa t$ can in"est a total of 8s 1.0 c o e onl$! since the #alance 8s 50 c o es is e%ui ed within the fi st 15 da$s. 2ssuming a ate of etu n of =% paid on #an& deposits fo a pe iod of .1 to 65 da$s! the inte est ea ned #$ the compan$ wo &s out to 8s 5= lacs app oximatel$. ption II Invest in Treasury 'ills of various maturities $epen$ing on t)e fun$s re1uirements

'he pa t$ can in"est the enti e 8s 200 c o e in t easu $ #ills as t easu $ #ills of e"en less than 15 da$s matu it$ a e also a"aila#le. 'he etu n to the pa t$ #$ this deal wo &s out to a ound 8s 125 lacs! assuming etu ns on ' easu $ +ills in the ange of 8% to <% fo the a#o"e pe iods. Portfolio "anagement Strategies 3t ategies fo managing a po tfolio can # oadl$ #e classified as acti"e o passi"e st ategies. 'uy 4n$ 5ol$ 2 #u$ and hold st ateg$ can #e desc i#ed as a passi"e st ateg$ since the ' easu $ #ills once pu chased! would #e held till its matu it$. 'he salient featu es of this st ateg$ a e: 8etu n is fixed o loc&ed in at the time of in"estment itself. 'he exposu e to p ice "a iations due to seconda $ ma &et fluctuations is eliminated. 'he e is no is& of default on matu it$. 'uy 4n$ Tra$e 'his st ateg$ can also #e desc i#ed as an acti"e ma &et st ateg$. 'he etu ns on this st ateg$ a e highe than the #u$ and hold st ateg$ as the $ield can #e optimised #$ acti"el$ t ading the t easu $ #ills in the seconda $ ma &et #efo e matu it$.

Treasury bill rates decline

TR4AS*RY BI"" 1ates /ell ac1oss the =oa1! yeste1!ay as !eclining consu5e1 p1ices 1aise! hopes o/ 5o1e inte1est 1ate cuts =y the cent1al =an2. The =ell>ethe1 :&%!ay T%=ill /etche! '.,7.K3 J.: =asis points (=ps) lo>e1 than the '.'.&K the !e=t pape1 /etche! on Ma1ch .,. The si6%5onth T%=ill /etche! '.7'&K3 &&.. =ps lo>e1 than '.J7,K3T>hile the one%yea1 T%=ill /etche! '.(&K3 &.: =ps lo>e1 co5pa1e! to '.(.:K on Ma1ch .,. The Bu1eau o/ the T1easu1y auctione! 8(.7 =illion >o1th o/ the sho1t%te15 !e=t pape1s yeste1!ay an! sol! as planne!. The T%=ills >e1e o+e1su=sc1i=e!3 >ith total ten!e1s /o1 the :&%!ay pape1 1eaching 8..LL =illion against a 8&.7 =illion o//e1.

The si6%5onth T%=ill >as 5o1e than t>ice o+e1su=sc1i=e! as ten!e1s 1eache! 8L..L =illion against a 8..7%=illion o//e13 >hile the one%yea1 T%=ill 1ecei+e! 8J.(, =illion in ten!e1s3 al5ost !ou=le the 8,.7%=illion o//e1. UThe en+i1on5ent is =enign. The1e is positi+e senti5ent in the 5a12et. M"o>e1 in/lationN 5ay lea! to 1e!uctions o/ policy 1ates =y the cent1al =an23U National T1easu1e1 Ro=e1to B. Tan tol! 1epo1te1s a/te1 the auction. In/lation ease! to J.'K in Ma1ch /1o5 (.,K in the p1e+ious 5onth. Ma12et playe1s =elie+e anothe1 ?ua1te1%point 1e!uction =y the Moneta1y Boa1! is co5ing >hen it 5eets on Ap1il &J3 /ollo>ing a cu5ulati+e &.7%=asis point cut >hen it sta1te! its easing cycle in Dece5=e1. UIn/lation >as lo>e1 than e6pecte!3 an! the cent1al =an2 is =iase! on the easing si!e3U a =on! t1a!e1 sai!. She a!!e! the =i!s >e1e !1i+en =y a5ple li?ui!ity since /i6e!%1ate notes that 5atu1e! on Mon!ay 1elease! 8,., =illion into the syste5. The t1a!e1 also sai! 5a12et playe1s a1e 5o1e incline! to =uy sho1t%te15 !e=t pape1s gi+en continue! 5a12et +olatility3 thus the st1ong !e5an! /o1 the T%=ills. &. Anothe1 t1a!e13 on the othe1 han!3 sai! the =i!s >e1e actually highe1 co5pa1e! to the cu11ent T%=ill 1ates at the secon!a1y 5a12et. The si6%5onth T%=ill3 /o1 instance3 /etche! '.,K in the secon!a1y 5a12et last >ee2. UF1o5 a t1a!ing pe1specti+e3 the 1ates >e1e actually highe13U the secon! t1a!e1 sai!. V 9erar& S7 &e#a PeLa

Date Mar 7 2007 Mar 28 2007 pr 4 2007 !"l 18 2007 #ct 31 2007 May 9 2007 May 23 2007 !"n 27 2007 !"l 4 2007 !"l 11 2007 "$ 1 2007 "$ 22 2007 #ct 17 2007 #ct 24 2007

tenor_tbil l 91 91 91 91 91 91 91 91 91 91 91 91 91 91

noti_ a 2000 2000 2000 2000 3500 2000 2000 3500 500 2000 2000 2000 3500 3500

recd_co m 78 101 109 100 86 75 66 140 102 131 96 78 119 109

recd_co 2843.55 4705.4 8612.05 9177.47 3701.78 4794.5 5324.5 11682 6246 7253 4932.23 5 3990.5 7672.5 7803.33

recd_n c 0 2 2 1 3 0 5 3 4 2 1 4 3 1

re_nco_ a 0 6000 1200 500 380.99 0 1551 1110 7100 250 200 2050 1100 100

ac_co_n o 65 53 13 14 28 47 45 49 18 34 22 10 65 59

accp_co_a wt_pr 200 0 200 0 200 0 200 0 500 200 0 200 0 350 0 500 200 0 200 0 200 0 350 0 350 0 98.1 7 98.0 5 98.0 6 98.8 9 98.2 1 98.1 4 98.1 3 98.1 9 98.4 8 98.7 4 98.4 1 98.3 3 98.2 6 98.2 8

c off yi 98.2 5 98.0 7 98.0 7 98.9 98.2 2 98.1 7 98.1 4 98.2 98.5 98.7 6 98.4 3 98.3 4 98.2 7 98.2 9

wtd yield 7.144 7.894 7.894 4.461 7.268 9 7.477 7.602 7.352 6.108 5.036 6.398 6.770 6 7.061 2 6.978 1

7.477 7.977 7.935 4.502 7.310 5 7.602 7.643 7.394 6.191 5.118 6.481 6.812 1 7.102 7 7.019 6

%o& 14 2007 %o& 21 2007 #ct 3 2007 #ct 10 2007 %o& 28 2007 Dec 12 2007 May 30 2007 !"n 6 2007 !"l 25 2007 "$ 14 2007 'ep 12 2007 'ep 19 2007 'ep 26 2007 Dec 26 2007 !an 2 2008 !an 16 2008 !an 23 2008 "$ 29 2007 !an 30 2008

91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91

3500 2000 3500 3500 2000 500 2000 3500 2000 2000 3500 3500 3500 500 500 3500 3500 3500 3500

79 65 92 115 67 49 99 143 78 92 106 85 81 53 70 74 58 102 48

6860.57 2437.85 5383 13193 2618.5 2481.62 6333.29 8 9986.79 5 6468.08 3450.47 8870.92 7838.25 4255.14 2510 3411.05 3674.4 2974 7552.5 1616.58

1 4 2 2 3 3 4 5 0 2 4 3 1 2 1 1 3 2 2

203 970 4000 1200 994.47 1800 1350 5993.07 5 0 303 4300 7100 1000 950 1000 200 3000 550 883.32

48 11 78 30 10 7 56 29 32 59 49 30 68 14 6 63 51 24 24

350 0 500 350 0 350 0 500 500 200 0 350 0 200 0 200 0 350 0 350 0 350 0 500 500 350 0 258 9 350 0 500

98.1 6 98.1 6 98.2 5 98.2 9 98.1 6 98.1 8 98.1 9 98.2 3 98.9 98.3 5 98.2 6 98.2 9 98.2 4 98.2 98.2 8 98.2 6 98.2 4 98.2 6 98.2 2

7.518 6 7.518 6 7.144 3 6.978 1 7.518 6 7.435 3 7.394 7.227 4.461 6.729 7.102 7 6.978 1 7.185 8 7.352 1 7.019 6 7.102 7 7.185 8 7.102 7 7.268 9

98.1 7 98.1 7 98.2 8 98.2 9 98.1 6 98.1 8 98.2 2 98.2 5 98.9 3 98.3 7 98.2 7 98.3 98.2 8 98.2 1 98.2 8 98.2 8 98.2 8 98.2 8 98.2 3

7.476 9 7.476 9 7.019 6 6.978 1 7.518 6 7.435 3 7.269 7.144 4.338 6.646 7.061 2 6.936 6 7.102 7 7.310 5 7.019 6 7.019 6 7.019 6 7.019 6 7.227 4

(eb 6 2008 (eb 27 2008 Mar 21 2007 "$ 8 2007 'ep 5 2007 May 16 2007 %o& 7 2007 Dec 5 2007 Dec 19 2007 !an 9 2008 (eb 13 2008 (eb 20 2008 Mar 5 2008 Mar 12 2008 Mar 19 2008 Mar 14 2007 pr 11 2007 pr 18 2007

91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91

2000 500 2000 2000 3500 2000 3500 2000 500 3500 2500 500 500 500 500 2000 2000 2000

62 56 118 84 101 71 96 61 50 76 67 47 63 63 53 100 137 69

2540.28 1733.37 5035 4295 7985 4353.65 5 7154.2 2609 3179.5 6274.1 2488.37 500 2417.51 2120.71 5 1573.75 4035.44 7215.42 2714.35

4 2 3 2 2 3 2 2 4 1 3 4 2 1 2 2 1 2

2300 748.97 1800 2500 2100 1403 600 2400 7300 3500 703 1350 2200 200 700 5000.5 500 1000

54 26 18 27 50 36 1 31 5 39 26 7 29 22 12 34 18 29

200 0 500 822 200 0 350 0 200 0 500 150 0 500 350 0 104 3 500 500 500 500 200 0 200 0 709

98.2 2 98.1 8 98.0 5 98.3 9 98.2 7 98.1 3 98.2 1 98.1 6 98.2 98.2 8 98.2 2 98.1 9 98.1 9 98.1 9 98.2 1 98.1 7 98.2 98.1 7

7.268 9 7.435 3 7.977 6.563 7.061 2 7.643 7.310 5 7.518 6 7.352 1 7.019 6 7.268 9 7.393 7 7.393 7 7.393 7 7.310 5 7.477 7.352 7.477

98.2 4 98.1 9 98.1 98.4 1 98.2 8 98.1 4 98.2 1 98.1 7 98.2 98.3 98.2 2 98.2 98.2 98.2 98.2 2 98.1 8 98.2 2 98.1 8

7.185 8 7.393 7 7.768 6.481 7.019 6 7.602 7.310 5 7.476 9 7.352 1 6.936 6 7.268 9 7.352 1 7.352 1 7.352 1 7.268 9 7.435 7.269 7.435

pr 25 2007 !"n 11 2007 !"n 20 2007 pr 2 2008 pr 9 2008 pr 23 2008 pr 30 2008 pr 16 2008 May 7 2008 May 14 2008 May 21 2008 May 28 2008 May 28 2008 !"n 4 2008 !"n 11 2008 !"n 18 2008 !"l 3 2008 !"l 9 2008 !"l 16 2008 !"l 23 2008

91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91

2000 3000 3500 500 6000 2500 3000 5500 3000 3500 3000 500 500 3000 3000 2000 500 3500 3000 3000

95 119 164 47 132 105 111 117 127 113 86 41 41 76 71 78 66 113 127 113

4416.73 6492 13492.6 3 2633.08 8076.23 6747.1 7695.28 7192.8 8457.1 8527.07 7919.91 1882.72 1882.72 5569.37 5211.36 5 4164.3 2130.75 6508.94 8219.61 6685.73

1 0 6 2 3 1 0 0 5 2 5 2 2 6 1 2 2 5 2 2

100 0 11450 4500 2422.12 500 0 0 2635.68 250.5 4000 503.48 503.48 4426.94 1450 715.38 750 4100 2250 750

35 88 23 1 110 39 52 56 71 65 47 21 21 61 46 53 8 21 63 41

200 0 300 0 350 0 500 600 0 250 0 300 0 300 0 300 0 350 0 300 0 500 500 300 0 300 0 200 0 500 500 300 0 300 0

98.2 98.1 1 98.2 4 98.3 98.2 3 98.1 8 98.2 98.1 8 98.2 1 98.1 9 98.1 7 98.1 7 98.1 7 98.1 5 98.1 2 98.0 3 97.8 5 97.8 97.7 8 97.7 9

7.352 7.727 7.186 6.936 6 7.227 4 7.435 3 7.352 1 7.435 3 7.310 5 7.393 7 7.476 9 7.476 9 7.476 9 7.560 2 7.685 1 8.060 4 8.813 1 9.022 7 9.106 6 9.064 6

98.2 1 98.1 5 98.2 5 98.3 98.2 7 98.1 9 98.2 1 98.2 98.2 2 98.2 98.1 8 98.1 8 98.1 8 98.1 7 98.1 3 98.0 5 97.8 7 97.8 97.8 97.8

7.311 7.56 7.144 6.936 6 7.061 2 7.393 7 7.310 5 7.352 1 7.268 9 7.352 1 7.435 3 7.435 3 7.435 3 7.476 9 7.643 5 7.977 8.729 3 9.022 7 9.022 7 9.022 7

!"n 25 2008 !"l 30 2008 "$ 6 2008 "$ 13 2008 "$ 20 2008 "$ 27 2008 'ep 2 2008 'ep 10 2008 'ep 17 2008 #ct 3 2008 #ct 8 2008 #ct 29 2008 %o& 5 2008 Dec 3 2008 Dec 10 2008 Dec 17 2008 Dec 24 2008 Mar 26 2008 'ep 24

91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91

500 3000 3000 3000 3000 2000 5500 5000 5000 5000 5000 5000 5000 3000 5000 5000 500 500 500

58 130 122 112 100 79 109 148 138 108 146 156 122 178 177 162 71 59 57

2068.8 9274.83 7893.64 9177.67 8778.52 6721.82 11692.2 5 13638.7 3 10967.3 7752 9520.27 8835.26 12732.6 5 15189.8 15176.5 5 13297.7 2 5340.91 1833.15 2493.14

2 2 6 4 1 4 1 6 2 1 1 2 1 1 6 2 1 3 1

5300 800 2639.1 2150 2000 1608.09 1000 4836 573.48 500 500 1400 141.19 150 5275 932.37 119 7040 3.5

7 60 73 52 20 28 57 59 66 9 93 104 61 19 108 45 7 6 15

500 300 0 300 0 300 0 300 0 200 0 500 0 500 0 500 0 500 500 0 500 0 500 0 300 0 500 0 500 0 500 500 500

97.8 7 97.7 2 97.7 5 97.7 97.7 7 97.7 9 97.8 97.8 7 97.8 9 97.8 4 97.9 3 98.1 8 98.1 9 98.3 8 98.6 1 98.6 6 98.7 6 98.2 3 97.1 9

8.729 3 9.358 4 9.232 5 9.148 5 9.148 5 9.064 6 9.022 7 8.729 3 8.645 6 8.855 8.478 2 7.435 3 7.393 7 6.604 8 5.653 9 5.447 7 5.036 1 7.227 4 8.561 9

97.8 7 97.7 3 97.7 6 97.7 8 97.7 7 97.7 9 97.8 1 97.8 8 97.9 97.8 4 98.0 1 98.2 2 98.2 1 98.4 98.6 4 98.6 7 98.7 8 98.2 3 97.9 6

8.729 3 9.316 4 9.190 5 9.106 6 9.148 5 9.064 6 8.980 7 8.687 5 8.603 8 8.855 8.143 9 7.268 9 7.310 5 6.521 9 5.530 2 5.406 5 4.953 8 7.227 4 8.352 8

2008 #ct 15 2008 #ct 22 2008 %o& 12 2008 %o& 19 2008 %o& 26 2008 Dec 31 2008 !an 7 2009 !an 14 2009 !an 21 2009 !an 28 2009 'ep 2 2008 !an 21 2009 !an 7 2009 %o& 26 2008 #ct 29 2008 %o& 12 2008 #ct 15 2008 Dec 24 2008

91 91 91 91 91 91 91 91 91 91 182 182 182 182 182 182 182 182

5000 5000 5000 5000 5000 500 8000 8000 8000 8000 2500 1500 1500 2000 2000 2000 2000 500

135 168 132 134 155 85 194 155 142 152 96 74 90 94 146 102 128 59

9103.8 13426.5 3 8873.07 14842.5 2 11617.8 8 6796.87 23148.7 2 18212 18886.8 13498.6 5 8519.5 4321 5331 6566 6649 5322.25 4592.47 2891.2

3 1 1 2 2 0 0 1 1 1 0 0 0 0 0 0 0 0

2000 1000 753 1752 1313.79 0 0 1 0.3 0.5 0 0 0 0 0 0 0 0

88 28 88 83 68 8 21 72 65 106 17 23 6 27 32 21 64 7

500 0 500 0 500 0 500 0 500 0 500 800 0 800 0 800 0 800 0 250 0 150 0 150 0 656 6 200 0 200 0 200 0 500

97.8 8 98.2 4 98.2 98.2 1 98.2 5 98.8 4 98.8 4 98.8 7 98.8 5 98.8 2 95.6 7 97.7 8 97.7 4 96.6 96.4 5 96.5 3 95.8 5 97.5 2

8.687 5 7.185 8 7.352 1 7.310 5 7.144 3 4.707 4 4.707 4 4.584 2 4.666 3 4.789 5 9.076 8 4.553 3 4.637 2 7.058 7 7.381 6 7.209 2 8.683 2 5.100 1

97.9 6 98.2 7 98.2 2 98.2 3 98.2 6 98.8 7 98.8 7 98.8 9 98.8 7 98.8 4 95.6 8 97.8 97.7 6 96.6 1 96.4 7 96.5 5 95.9 2 97.5 2

8.352 8 7.061 2 7.268 9 7.227 4 7.102 7 4.584 2 4.584 2 4.502 2 4.584 2 4.707 4 9.054 9 4.511 3 4.595 2 7.037 2 7.338 4 7.166 2 8.530 5 5.100 1

Dec 10 2008 'ep 17 2008 #ct 1 2008 "$ 20 2008 "$ 6 2008 !"l 23 2008 !"l 9 2008 !an 23 2008 !"n 25 2008 !"n 11 2008 May 28 2008 May 14 2008 pr 30 2008 pr 16 2008 !"n 27 2007 pr 2 2008 Mar 19 2008 Mar 5 2008 Dec 26 2007

182 182 182 182 182 182 182 182 182 182 182 182 182 182 182 182 182 182 182

500 2000 2000 1500 1500 1500 1500 2500 500 500 500 2000 1000 3000 2500 500 500 500 500

59 94 76 85 90 83 83 60 40 51 50 84 83 75 120 52 41 56 57

1773.7 5328.5 3252 3915.65 4666.5 4232.5 3923.46 2855 1393 1366.2 1872 3431 4430.25 2663 11687 2095 2340 1827.5 2135.5

0 0 1 1 1 0 1 0 1 1 2 1 1 2 0 0 1 1 0

0 0 175 1000 1000 0 500 0 1000 1125 700 553 750 1500 0 0 1200 855 0

30 31 10 31 35 23 43 41 17 16 4 60 7 26 33 2 5 33 22

500 200 0 500 150 0 150 0 150 0 150 0 210 5 500 500 500 200 0 100 0 500 250 0 500 500 500 500

97.2 8 95.8 1 95.7 95.5 6 95.5 7 95.5 6 95.5 5 96.5 1 95.6 3 96.3 1 96.3 8 96.3 6 96.4 2 96.3 5 96.3 2 96.5 4 96.4 6 96.3 8 96.3 5

5.607 5 8.770 5 9.011 1 9.318 1 9.296 2 9.318 1 9.340 1 7.252 3 9.164 5 7.683 8 7.532 6 7.575 8 7.446 2 7.597 4 7.662 7.187 7 7.36 7.532 6 7.597 4

97.5 2 95.8 3 95.7 1 95.5 7 95.5 9 95.5 8 95.5 8 96.5 4 95.6 8 96.3 2 96.3 9 96.3 8 96.4 3 96.3 8 96.3 4 96.5 6 96.4 7 96.4 1 96.3 6

5.100 1 8.726 8 8.989 2 9.296 2 9.252 3 9.274 2 9.274 2 7.187 7 9.054 9 7.662 2 7.511 7.532 6 7.424 7 7.532 6 7.619 7.144 7 7.338 4 7.467 8 7.575 8

Dec 12 2007 %o& 14 2007 !"l 25 2007 May 16 2007 #ct 31 2007 pr 4 2007 (eb 20 2008 (eb 6 2008 "$ 22 2007 !an 9 2008 Mar 7 2007 Mar 21 2007 #ct 17 2007 %o& 28 2007 'ep 5 2007 'ep 19 2007 #ct 3 2007 "$ 8 2007 !"l 11 2007 !"n

182 182 182 182 182 182 182 182 182 182 182 182 182 182 182 182 182 182 182 182

500 2500 1500 1500 2500 1500 500 1500 1500 1500 1500 1500 2500 1500 2500 2500 2500 1500 1500 2000

52 81 68 66 75 88 40 60 68 62 53 107 97 71 104 102 71 51 78 113

2535.3 3071 4085 3740 3165 7005 1822 3267 2235 3105 2265 4195 4815 2310 4573 9980 4990 1985 4005.67 7145

1 0 0 0 0 0 0 0 1 0 1 2 1 0 1 0 0 1 0 0

125 0 0 0 0 0 0 0 1500 0 500 325 500 0 855 0 0 500 0 0

4 14 12 21 18 5 12 26 68 29 49 13 78 18 61 38 48 46 30 56

500 500 150 0 150 0 250 0 150 0 500 150 0 223 5 150 0 150 0 530 250 0 500 250 0 250 0 250 0 150 0 150 0 200

96.3 5 96.3 5 97.1 8 96.2 8 96.3 6 96.1 7 96.3 8 96.5 96.4 1 96.5 2 96.2 8 96.0 7 96.4 2 96.3 96.4 4 96.5 1 96.4 8 96.5 97.0 7 96.2

7.597 4 7.597 4 5.821 9 7.749 7.575 8 7.987 7.532 6 7.273 8 7.467 8 7.230 8 7.749 8.204 7.446 2 7.705 4 7.403 1 7.252 3 7.316 9 7.274 6.053 7.814

96.3 5 96.3 6 97.1 9 96.2 9 96.3 7 96.1 8 96.4 2 96.5 2 96.4 5 96.5 5 96.4 1 96.0 8 96.4 6 96.3 2 96.4 6 96.5 2 96.5 1 96.6 1 97.1 96.2

7.597 4 7.575 8 5.798 4 7.727 7.554 2 7.965 7.446 2 7.230 8 7.381 6 7.166 2 7.468 8.182 7.36 7.662 2 7.36 7.230 8 7.252 3 7.037 2 5.99 7.749

11 2007 pr 18 2007 May 30 2007 !"n 6 2007 pr 25 2007 pr 11 2007 !"n 20 2007 !"l 4 2007 Mar 28 2007 "$ 14 2007 'ep 12 2007 #ct 24 2007 !"l 18 2007 "$ 1 2007 Dec 5 2007 !an 2 2008 %o& 7 2007 Dec 19 2007 "$ 29 2007 !an

0 182 182 364 364 364 364 364 364 364 364 364 364 364 364 364 364 364 364 364 1500 1500 3000 2000 2000 3500 1000 2000 2000 2000 3000 2000 2000 2000 1000 3000 1000 2000 2000 65 66 119 81 111 128 93 118 104 133 124 93 84 97 98 92 78 113 75 3085 4295 10936.4 4625 8010 12910 6255 10510.6 4685 11145 8141 7415.49 4675 5711.7 6415 4425 4485 5415 3185 2 1 1 1 1 3 0 1 0 0 1 3 0 0 0 0 1 2 0 524.157 5 235.95 118.54 300 130 495.86 0 1550 0 0 24 583.43 0 0 0 0 250 33.27 0 21 43 27 44 9 44 20 20 33 30 35 22 42 50 8 64 17 37 42 150 0 150 0 300 0 200 0 200 0 300 0 100 0 200 0 200 0 350 0 300 0 100 0 200 0 200 0 100 0 300 0 100 0 200 0 200

5 96.2 8 96.3 4 92.2 8 92.8 3 92.8 7 92.9 1 93.3 3 92.6 3 93.0 5 93.0 7 93.1 6 93.8 4 93.2 6 92.8 6 93.1 4 92.8 2 92.9 93.0 2 93.0 7.749 7.619 7.687 7.745 7.698 7.652 7.166 7.978 7.49 7.466 5 7.362 4 6.582 7.247 7.710 1 7.385 5 7.756 7 7.663 6 7.524 4 7.489

8 96.3 2 96.3 9 92.9 1 92.8 7 92.9 92.9 6 93.4 1 92.6 7 93.1 93.1 93.1 8 93.9 2 93.3 1 92.8 8 93.1 6 92.8 6 92.9 1 93.0 6 93.0 7.662 7.511 7.652 7.698 7.664 7.594 7.074 7.932 7.432 7.431 7 7.339 3 6.491 7.189 7.686 9 7.362 4 7.710 1 7.652 7.478 7.443

30 2008 (eb 27 2008 (eb 13 2008 May 9 2007 Mar 14 2007 'ep 26 2007 #ct 10 2007 %o& 21 2007 !an 16 2008 Mar 12 2008 Mar 26 2008 May 30 2007 pr 9 2008 May 7 2008 pr 23 2008 May 21 2008 !"n 4 2008 !"n 18 2008 !"l 16 2008

0 364 364 364 364 364 364 364 364 364 364 364 364 364 364 364 364 364 364 1000 3000 2000 2000 3000 3000 2000 3000 1000 1000 2000 2000 3500 2000 1000 1000 1000 2000 71 112 64 94 96 154 90 116 83 79 61 95 165 102 108 77 68 109 3690 9149 5100 4970 5846 11231.5 4550 6897 5816.82 5573.36 4211 4697.5 9640.5 4735 4100 3695 1900.7 4703.5 0 2 0 2 1 0 0 2 2 0 0 0 1 0 1 2 0 1 0 503.7 0 271 375 0 0 118.75 272.65 0 0 0 650 0 1500 1400 0 250 14 44 24 29 65 31 17 57 3 5 44 44 67 55 41 3 54 48 100 0 300 0 200 0 200 0 300 0 300 0 100 0 300 0 100 0 100 0 200 0 200 0 650 0 200 0 100 0 100 0 100 0 200 0

5 93 93.0 6 92.8 1 92.7 6 93.0 4 93.1 5 92.8 3 93.1 4 93.0 9 93.1 7 92.7 8 93.1 5 93 92.8 8 92.9 92.9 5 92.4 91.3 9

6 7.547 6 7.478 7.768 7.827 7.501 2 7.373 9 7.745 7.385 5 7.443 3 7.350 8 7.803 7.373 9 7.547 6 7.686 9 7.663 6 7.605 6 8.247 7 9.447

9 93.0 3 93.0 9 92.8 4 92.8 93.0 8 93.1 9 92.8 4 93.1 6 93.0 9 93.1 8 92.8 1 93.1 8 93.0 5 92.9 2 93.0 1 92.9 6 92.5 3 91.4 2

3 7.512 8 7.443 3 7.733 7.78 7.454 9 7.327 7 7.733 4 7.362 4 7.443 3 7.339 3 7.768 7.339 3 7.489 6 7.640 4 7.536 7.594 8.095 2 9.411

!"l 30 2008 !"l 3 2008 "$ 13 2008 #ct 8 2008 'ep 10 2008 "$ 27 2008 Dec 3 2008 %o& 5 2008 #ct 22 2008 'ep 24 2008 Dec 31 2008 %o& 19 2008 Dec 17 2008 !an 14 2009 !an 28 2009

364 364 364 364 364 364 364 364 364 364 364 364 364 364 364

2000 1000 2500 2000 4000 2000 1000 2000 2000 1000 1000 2000 1000 1000 1000

153 106 138 131 194 139 118 85 152 87 74 136 82 69 68

96611 3385.55 8411.5 7344 15037 10229 6471 5310 8652.5 3383.97 5 7301 8735 2987 4235 2850.5

1 1 0 0 0 1 0 0 1 0 0 0 1 0 1

36.55 8.75 0 0 0 26.65 0 0 32 0 0 0 250 0 13.5

25 13 53 38 46 23 4 16 13 36 6 22 32 19 29

200 0 100 0 250 0 200 0 400 0 200 0 100 0 200 0 200 0 100 0 100 0 200 0 100 0 100 0 100 0

91.3 91.6 2 91.5 2 92.2 3 91.8 8 91.6 1 94.0 9 93.1 5 93.1 3 91.9 3 95.4 5 93.4 94.9 3 95.7 95.6 2

9.555 2 9.171 6 9.291 2 8.447 7 8.861 9 9.183 5 6.298 5 7.373 9 7.397 1 8.802 5 4.78 7.085 8 5.355 4 4.505 6 4.593 2

91.3 1 91.7 8 91.5 7 92.2 8 91.9 2 91.6 4 94.1 1 93.2 2 93.1 7 91.9 9 95.4 6 93.4 2 94.9 6 95.7 4 95.6 5

9.543 2 8.980 8 9.231 4 8.388 8 8.814 4 9.147 7 6.275 8 7.293 1 7.350 8 8.731 4 4.769 7.062 8 5.322 1 4.461 8 4.560 3

pe1io!
Ma1 ,&3.))( une ,)3.))( Sep ,)3.))( :L.&' :(.JL :L.,7

>eighte! p1ice
(.'7' J..(, (.7J,

>eighte! yiel!

Dec,&3.))( Ma1,&3.))L une ,)3.))L Sep ,)3.))L Dec ,&3 .))L

:L.'. :(.): :L.L' :L.&. :L.''

(.&,7 7.,J' J.LJ( L.7:( (.J7'

S'I "utual Fun$

3+I -utual >und ope ates unde 3tate +an& of India and 3ociCtC GCnC ale 2sset -anagement of > ance and has asset management expe ience of mo e than 25 $ea s. 3+I -utual >und offe s diffe ent &inds of p oducts li&e g owth #ased p oducts! income #ased p oducts and #alanced funds. 'he 3+I -utual >und ope ates unde 3tate +an& of India and 3ociCtC GCnC ale 2sset -anagement of > ance. @ith o"e twent$ $ea s of expe ience in asset management! the compan$ has g own immensel$ since its esta#lishment. 3+I -utual >unds offe inno"ati"e mutual fund p oducts to its wide pool of custome s and its p oducts a e a"aila#le ac oss India. It has a wide po tfolio of p oducts that meet the e%ui ements of diffe ent t$pes of in"esto s. 'he 3+I -utual >und is headed #$ - 3$ed 3haha#uddin! -anaging )i ecto of the compan$. Products and services offered by the SBI Mutual Fund are as follows: E%uit$ D G owth #ased p oducts9 'he e%uit$ #ased funds offe ed #$ 3+I -utual >und! a e as follows 9 -agnum :O--2 >und -agnum E%uit$ >und -agnum Glo#al >und -agnum Index >und -agnum -id:ap >und -agnum -ulticap >und -agnum -ultiplie (lus 1<<. -agnum 3ecto >unds Em# ella -3>E 9 >-:G >und -3>E 9 Eme ging +usinesses >und

-3>E 9 I' >und -3>E 9 (ha ma >und -3>E 9 :ont a >und 3+I 2 #it age Oppo tunities >und 3+I +lue chip >und 3+I Inf ast uctu e >und 9 3e ies I 3+I -agnum 'axgain 3cheme 1<<. 3+I O*E India >und 3+I '24 2)A2*'2GE >E*) 9 3E8IE3 I

)e#t D Income #ased p oducts9'he de#t #ased funds that a e in ope ation now! a e as follows 9 -agnum :hild enFs +enefit (lan -agnum Gilt >und -agnum Gilt >und ;,ong 'e m/ -agnum Gilt >und ;3ho t 'e m/ -agnum Income >und -agnum Income (lus >und -agnum Income (lus >und ;3a"ing (lan/ -agnum Income (lus >und ;In"estment (lan/ -agnum Insta :ash >und -agnum Insta:ash >und 9,i%uid >loate (lan -agnum Institutional Income >und -agnum -onthl$ Income (lan -agnum -onthl$ Income (lan >loate -agnum *8I In"estment >und 3+I :apital ( otection O iented >und 9 3e ies I 3+I )e#t >und 3e ies 3)>3 15 -onths >und 3)>3 <0 )a$s >und 3)>3 1. -onths >und 3)>3 18 -onths >und 3)>3 26 -onths >und 3)>3 =0 )a$s >und 3)>3 180 )a$s >und 3+I ( emie ,i%uid >und 3+I 3ho t ?o iGon >und 3+I 3ho t ?o iGon >und 9 ,i%uid (lus >und 3+I 3ho t ?o iGon >und 9 3ho t 'e m >und +alanced funds 9 'he #alanced funds that a e in ope ation now! a e as follows 9 -agnum +alanced >und -agnum *8I In"estment >und 9 >lexi2sset (lan

3+I -utual >unds In"esto Fs 3e "ice :ente a e located at 2hmeda#ad! +angalo e! +hillai! +hu#aneshwa ! +hopal! :handiga h! :hennai! :oim#ato e! :ochin! Goa! Guwahati! ?$de a#ad! Indo e! 1aipu ! Hanpu ! Hol&ata! ,uc&now! ,udhiana! -um#ai! *ew )elhih! (atna! (une! 8anchi! 3iligu i! Aadoda a! and AiBa$wada.

SBI Mutual Funds India

S'I "utual Fun$s India has offe ed a di ection to the in"estment of Indians #$ piloting it Budiciousl$. 3+I -utual has #een inst umental in offe ing "a ious in"estment schemes and options to in"esto s in India and thus multipl$ing thei in"estments. -utual >unds in India ha"e #een esponsi#le to # ing fo th good de"elopment index in In"estment +an&ing. 'he 3tate +an& of India has pionee ed -utual >unds In"esting in India #$ offe ing 2sset -anagement >unds! I(O -utual >unds! ( incipal -utual >unds and othe G owth >unds.

@hen an attempt is made to ecogniGe the top 10 -utual >unds in India! 3+I -utual >unds possess a commenda#le position. Expe ts claim that with the Indian econom$ g owing at an unp ecedented ate! it is a "e $ oppo tune time to in"est in -utual >unds in India.

3+I -utual >und is a wa$ of collecti"e o -utual In"estment in #$ collecting mone$ f om "a ious In"esto s to in"est mone$ in the secu ities li&e! +onds! 3toc& o othe 3ecto +onds. 'he eason wh$ the 3+I -utual >unds India is conside ed the +est -utual >unds in India is its *2A9*et 2sset Aalue. 3+I -utual >und *2A9 *et 2sset Aalue implies the cu ent "alue in ma &et te ms of the p esent in"ested >und! that is calculates at the end of the t ansacting pe iod. ?owe"e ! the concept of 'u no"e implies the pe centage of net asset "alue of the 3+I -utual >unds at the end of the $ea .

>inancial anal$sts claim that the 3+I -utual >unds Index has #een "e $ encou aging and in"esto s with am#itious -utual >unds (o tfolio ha"e #een highl$ #enefited in the end. Indiahousing.com offe s an exhausti"e data#ase

on the 3tate +an& of India -utual >und as it is one of the +est -utual >unds :ompanies in India. ?owe"e ! it has to #e noted that in -utual >unds and G owth >unds! speculation pla$s a "e $ "ital ole thus ma&ing it "ulne a#le to ma &et is&s. -o eo"e ! it is alwa$s ad"isa#le to ha"e a clea unde standing a#out the -utual >unds )efinition! 3+I 3$stematic In"estment (lan ;3I(/ and pe fo mance at a gi"en point of time. +elow is the lin& of 3+I -utual >unds India that can #e accessed to gain 3+I -utual >unds info mation.

"agnum NRI Investment Fun$

a. 'he scheme offe s th ee (lans fo in"estment 9 3ho t 'e m +ond (lan! ,ong 'e m +ond (lan and >lexi2sset (lan. 2ll (lans ha"e G owth and )i"idend Options. 'he etu ns unde the G owth option to #e th ough capital app eciation onl$. #. 'he 3ho t 'e m +ond (lan in"ests its enti e co pus onl$ in in"estment g ade de#t inst uments such as Go"e nment 3ecu ities! :o po ate +onds and )e#entu es and -one$ -a &et inst uments. 'he )i"idend option unde the 3ho t 'e m +ond (lan endea"ou s to decla e di"idends on a monthl$ #asis su#Bect to the a"aila#ilit$ of dist i#uta#le su plus. In"estments in :o po ate +onds and )e#entu es to #e in inst uments with matu it$ not exceeding fi"e $ea s. ?owe"e ! the a"e age matu it$ of the scheme unde no mal ma &et conditions would #e a ound .=5 da$s and will #e an ideal in"estment a"enue fo in"esto s with an in"estment ho iGon of six months to one $ea . c. 'he ,ong 'e m +ond (lan will #e in"esting its enti e co pus onl$ in in"estment g ade de#t inst uments such as Go"e nment 3ecu ities! :o po ate +onds and )e#entu es and -one$ -a &et inst uments. 'he )i"idend option unde the ,ong 'e m +ond (lan would endea"ou to decla e di"idends on a %ua te l$ #asis su#Bect to the a"aila#ilit$ of dist i#uta#le su plus. Ende this (lan! the a"e age matu it$ of the scheme unde no mal ma &et conditions will #e

a#o"e . $ea s and would #e an ideal in"estment a"enue fo in"esto s with an in"estment ho iGon of mo e than one $ea ;atleast eighteen months/. d. 'he >lexi2sset (lan to follow an 2sset 2llocation -odel whe ein depending on ma &et conditionsD#ased on ce tain t igge s! the >und -anage can ta&e a "iew on the pe centage of in"estments that can #e allocated to e%uit$. 'his (lan would ha"e a minimum of 10% in"estment in e%uit$ elated inst uments which can #e inc eased up to 80% depending on ma &et fundamentals. 'he in"estment uni"e se fo e%uit$ stoc&s will #e limited to such e%uit$ stoc&s that fo m a pa t of +3E9100. e. -inimum In"estment 9 8s. 50!000 and multiples of 8s. 1!000. *o maximum limit.

Fle/i 4sset Plan 4nt1y "oa! $ In+est5ents =elo> Rs. 7 c1o1es H ...7K In+est5ents o/ Rs.7 c1o1es an! a=o+e H NI"U SI8/ST8 % ...7K 46it "oa!$ In+est5ents =elo> Rs.7 c1o1es W J 5onths % &.))K J 5onths an! W &. 5onths % ).7)K In+est5ents o/ Rs.7 c1o1es an! a=o+e % NI" SI8 /ST8%W J 5onths /1o5 the !ate o/ in+est5ent o/ each instal5ent % &.))K SI8 $ Mini5u5 a5ount Rs.7))/5onth % &. 5onths Rs.&)))/5onth % J5onths3 Rs.&7))/?ua1te1 % &. 5onths ST8 $ Mini5u5 a5ount Rs.&)))/% 5onth % 5ini5u5 pe1io! o/ J 5onths Rs.,)))/ Xua1te1 % 5ini5u5 pe1io! o/ J 5onths Inte1 sche5e s>itches to othe1 e?uity sche5es >ill not ca11y an 4nt1y "oa!. -o>e+e1 e6it loa! >ill =e applica=le.

S)ort Term an$ 6ong Term 'on$ Plan 4nt1y "oa! $ Nil

46it "oa! $ Sho1t Te15 Bon! 8lan $ Nil3"ong Te15 Bon! 8lan $ <ithin J 5onths $ ).7)K SI8/ST8% As applica=le to the no15al t1ansaction in the 1especti+e De=t Sche5es SI8 $ Mini5u5 a5ount Rs.7))/5onth % &. 5onths Rs.&)))/5onth % J5onths3 Rs.&7))/?ua1te1 % &. 5onths ST8 $ Mini5u5 a5ount Rs.&)))/% 5onth % J 5onths 3Rs.,)))/ Xua1te1 % J 5onths In 1espect o/ ST8 t1ansactions3 an in+esto1 >oul! no> =e pe15itte! to t1ans/e1 any a5ount /1o5 the s>itch%out sche5e3 su=Aect to a 5ini5u5 t1ans/e1 o/ Rs.&))) p5 o1 Rs.,))) pe1 ?ua1te13 >ithout any 1est1iction on 5aintaining the 5ini5u5 =alance 1e?ui1e5ent as stipulate! /o1 the s>itch out sche5e. The 5ini5u5 pe1io! /o1 ST8 >ill =e atleast J 5onths. 8lease 1ea! the C//e1 Docu5ent =e/o1e in+esting.

DUDTER;A NA4 O? SBI MUTUA; ?UND ("agnum NRI Investment Fun$7

PERIOD
A8RI"% *N4 3.))(

NA4 (In Rs7'&.:()

RETURN (In K&7..:( &'.:LL

*"*%S48 3.))( ':.,() C#T%D4# 3.))( J..,J) AN%MAR 3.))L '7.J7) A8RI"% *N4 3.))L 'L.&.) *"Y%S48 3 .))L ,(.):)

.).L, %,J.J 7.&,7 %.:.)(,

C#T%D4# 3.))L .:...) AN%MAR 3.)): .:.J()

% .J.:,' &.7&J

UTI Mutua# ?un&

anua1y &'3 .)), is >hen *TI Mutual Fun! sta1te! to pa+e its path /ollo>ing the +ision o/ *TI Asset Manage5ent #o. "t!. (*TIAM#)3 >hich >as appointe! =y *TI T1ustee #o3 8+t. "t!. /o1 5anaging the sche5es o/ *TI Mutual Fun! an! the sche5es t1ans/e11e!/5ig1ate! /1o5 the e1st>hile *nit T1ust o/ In!ia. *TIAM# p1o+i!es p1o/essionally 5anage! =ac2 o//ice suppo1t /o1 all =usiness se1+ices o/ *TI Mutual Fun! in acco1!ance >ith the p1o+isions o/ the In+est5ent Manage5ent Ag1ee5ent3 the T1ust Dee!3 the S4BI (Mutual Fun!s) Regulations an! the o=Aecti+es o/ the sche5es. State%o/%the% a1t syste5s an! co55unications a1e in place to ensu1e a sea5less /lo> ac1oss the +a1ious acti+ities un!e1ta2en =y *TIMF. Since Fe=1ua1y ,3 .))'3 *TIAM# is also a 1egiste1e! po1t/olio 5anage1 un!e1 the S4BI (8o1t/olio Manage1s) Regulations3 &::, /o1 un!e1ta2ing po1t/olio 5anage5ent se1+ices. *TIAM# also acts as the 5anage1 an! 5a12ete1 to o//sho1e /un!s th1ough its &)) K su=si!ia1y3 *TI Inte1national "i5ite!3 1egiste1e! in Gue1nsey3 #hannel Islan!s. 4ssets #n$er "anagement *TIAM# p1esently 5anages a co1pus o/ o+e1 Rs. ':3..' #1o1esY as on .Lth Fe=1ua1y .)): (sou1ce$ >>>.a5/iin!ia.co5). *TI Mutual Fun! has a t1ac2 1eco1! o/ 5anaging a +a1iety o/ sche5es cate1ing to the nee!s o/ e+e1y class o/ citiGens. It has a nation>i!e net>o12 consisting &&' *TI Financial #ent1es (*F#s) an! *TI Inte1national o//ices in "on!on3 Du=ai an! Bah1ain. <ith a +ie> to 1each to co55on in+esto1s at !ist1ict le+el3 & satellite o//ice ha+e also =een opene!. *TIAM# has a >ell%?uali/ie!3 p1o/essional /un! 5anage5ent tea53 >hich has =een /ully e5po>e1e! to 5anage /un!s >ith g1eate1 e//iciency an! accounta=ility in the sole inte1est o/ the unit hol!e1s. The /un! 5anage1s a1e a=ly suppo1te! =y a st1ong in%house secu1ities 1esea1ch !epa1t5ent. To ensu1e in+esto1s@ inte1ests3 a 1is2 5anage5ent !epa1t5ent is also in ope1ation. Reliability *TIMF has consistently 1eset an! upg1a!e! t1anspa1ency stan!a1!s. All the =1anches3 *F#s an! 1egist1a1 o//ices a1e connecte! on a 1o=ust IT net>o12 to ensu1e cost%e//ecti+e ?uic2 an! e//icient

se1+ice. All these ha+e e+ol+e! *TIMF to position as a !yna5ic3 1esponsi+e3 1est1uctu1e!3 e//icient an! t1anspa1ent entity3 /ully co5pliant >ith S4BI 1egulations.

%$+ /utual 0und Investment Philosophy %$+ /utual 0und1s investment philosophy is to deliver consistent and stable returns in the medium to long term with a fairly lower volatility of fund returns compared to the broad market! +t believes in having a balanced and well2diversified portfolio for all the funds and a rigorous in2house research based approach to all its investments! +t is committed to adopt and maintain good fund management practices and a process based investment management! %$+ /utual 0und follows an investment approach of giving as equal an importance to asset allocation and sectoral allocation, as is given to security selection while managing any fund! +t combines top2down and bottom2up approaches to enable the portfolios3funds to adapt to different market conditions so as to prevent missing an investment opportunity! +n terms of its funds performance, %$+ /utual 0und aims to consistently remain in the top quartile vis242vis the funds in the peer group!

Sponsors 'h ee leading pu#lic secto #an&s I +an& of +a oda! (unBa# *ational +an& and 3tate +an& of India and ,ife Insu ance :o po ation of India ;,I:/! the la gest pu#lic financial in"estment institution and life insu e in India a e the sponso s of E'I -utual >und. 'an+ of 'aro$a%8 +an& of +a oda is a comme cial #an& pe fo ming acti"ities in te ms of +an&ing

:ompanies ;2c%uisition and ' ansfe of Ende ta&ings 2ct 1<50/ unde which the Ende ta&ing of the +an& was ta&en o"e #$ the :ent al Go"e nment. )u ing the pe iod since inception! it has alwa$s maintained its p actice of sound "alue #ased #an&ing to eme ge as one of the p emie pu#lic secto +an&s of the count $ toda$. It has a t ac& eco d of uninte upted p ofits since inception in 1<08. 'he financial st ength of the +an& and its long t adition of efficient custome se "ice a e d awn su#stantiall$ f om the extensi"e each of its 25.2 st ong # anch netwo & ;as of .1.0..2005/ co"e ing almost e"e $ 3tate and Enion 'e ito $ in the :ount $. 'he +an& is also one of the few Indian +an&s with a fo mida#le p esence o"e seas with 60 # anches. 'hus! the total # anch netwo & is 2!552 as at .1.0..2005.

6ife Insurance Corporation of In$ia ,ife Insu ance :o po ation of India ;,I:/ is amongst the la gest insu ance companies in the wo ld! with 2068 # anches and ha"ing a >und siGe of 8s.9 5!=0!80=... c o e. Pun9ab National 'an+ (unBa# *ational +an& is a comme cial #an& pe fo ming acti"ities in te ms of +an&ing :ompanies ;2c%uisition and ' ansfe of Ende ta&ings 2ct 1<50/ unde which the Ende ta&ing of the +an& was ta&en o"e #$ the :ent al Go"e nment. 'he main o#Bect of the #an& unde the said 2ct is as #elow:9 2n act to p o"ide fo the ac%uisition and t ansfe of the unde ta&ing of ce tain #an&ing companies! ha"ing ega d to thei siGe! esou ces co"e age and o ganisation! in o de to fu the to cont ol the heights of the econom$! to meet p og essi"el$ and se "e #ette ! the needs of the de"elopment of the econom$ and to p omote the welfa e of the people! in confo mit$ with the polic$ of the 3tate towa ds secu ing the p inciples laid down in clause ;#/ and ;c/ of 2 ticle .< of the :onstitution of India and fo matte connected the ewith o incidental the ein. 2s on .1.0..2005 (unBa# *ational +an& has 65.< domestic offices including 621 extension counte s! 2 su#sidia ies and a deposit siGe of 8s.1! .<!8=0 c o es. Peri%&
AN%MAR3.))( A8RI"% *N4,)3.))( *"Y%S483.))( C#T%D4#3.))( AN%MAR 3.))L '..L(. '(.7J( 7J.:), '7.7J, 'L.L(.

NA4(In Rs77.J, :.L( &J.') %.'.L: J.((

Return(inK-

A8RI"% *N4 3.))L *"Y%S48 3.))L C#T%Dec 3.))L

,(.L,J '7.L(& 7).7),

%.:.)L &(.'7 :.&(

RESEARCH OBJECTI4E
Pri$ar %/0e2tive

RESEARCH METHODO;O9AF,
Resea1ch 5etho!ology is a >ay to syste5atically sol+e the p1o=le5. It 5ay =e un!e1stoo! has a science o/ stu!ying ho> 1esea1ch is !one scienti/ically. In it >e stu!y the +a1ious steps that all gene1ally a!opte! =y a 1esea1che1 in stu!ying his 1esea1ch p1o=le5 along >ith the logic =ehin! the5. The scope o/ 1esea1ch 5etho!ology is >i!e1 than that o/ 1esea1ch 5etho! Resear2h Pr%2ess

F OBSER4ATION B1oa! a1ea o/ 1esea1ch inte1est i!enti/ie!

I PROB;EM DE?INITION Resea1ch 81o=le5 Delineate!

G THEORETICA; ?RAME:ORK Ia1ia=les clea1ly i!enti/ie! an! la=ele!

E G4N4RATICN CF -Y8CT-4S4S

H S#I4NTIFI# R4S4AR#D4SIGN

+ DATA #C""4#TICN3 ANA"YSIS AND INT4R8R4TATICN

) PRE;IMINARA DATA 9ATHERIN9 Inte1+ie>ing "ite1atu1e Su1+ey

5 D4D*#TICN -ypotheses su=stantiate!P Resea1ch ?uestion ans>e1e!P NC Yes FF Manage1 ial !ecision 5a2ing

, Repo1t >1iting

F* Repo1t 81esentat ion

Resear2h Desi'n)*
The p1esent stu!y is Desc1ipti+e in natu1e3 as it see2s to !isco+e1 i!eas an! insight to =1ing out ne> 1elationship. Resea1ch !esign is /le6i=le enough to p1o+i!e oppo1tunity /o1 consi!e1ing !i//e1ent aspects o/ p1o=le5 un!e1 stu!y. Sa$.#in' an& Sa$.#in' Desi'n)* Sa5pling 5ay =e !e/ine! as the selection o/ so5e pa1t o/ an agg1egate o1 totality on the =asis o/ >hich a Au!g5ent o1 in/e1ence a=out the agg1egate o1 totality is 5a!e. In si5ple >o1!s3 it is the p1ocess o/ o=taining in/o15ation a=out the population =y e6a5ining only a pa1t o/ it.

 Sa$.#in' Unit: It !e/ines the ta1get population that >ill =e sa5ple! i.e. it ans>e1s >ho is to =e su1+eye!.

Sa$.#in' Si>e: - It in!icates the nu5=e1s o/ people to =e su1+eye!. Though la1ge sa5ples gi+e 5o1e 1elia=le 1esults than s5all sa5ples.

Sa$.#in' Desi'n$ This 1e/e1s to the p1oce!u1e =y >hich the 1espon!ents shoul! =e chosen. In this case3 Ju&'e$ent C%nvenient sa$.#in' is !one

METHODO;O9A AND DATA ANA;ASIS

Resear2h Desi'n:-Des2ri.tive Desi'n

Tar'et P%.u#ati%n- Pu/#i2 Se2t%r Banks

Resear2h P#a2e- Aa$una Na'ar

Sa$.#in' Desi'n: - Ju&'$ent an& C%nvenien2e Sa$.#in'7

Data: - Se2%n&ar &ata

ANA;ATICA; TOO;F,
The statistical tool use! he1e is 0a1l 8ea1son@s #oe//icient o/ #o11elation. C%rre#ati%n: #o11elation 5easu1es the 1elationship =et>een t>o o1 5o1e than t>o +a1ia=les. <hen t>o pheno5enons +a1y in such a >ay those 5o+e5ents in othe1 acco5pany 5o+e5ents in one these a1e sai! to =e co11elate!. The statistical tool >ith the help% o/ >hich 1elationship =et>een t>o o1 5o1e than t>o +a1ia=les an! !eg1ee o/ 1elationship =et>een the5 can =e stu!ie! is calle! co11elation. -e1e the co11elation is use! =et>een Return %n Assets an! Return %n E6uit o/ Pu/#i2 se2t%r Banks /1o5 & Ap1il .)). to ,& Ma1ch .))L. DQ Return %n E6uit /1o5 & Ap1il .)). to ,& Ma1ch .))L. YQ return %n Assets /1o5 & Ap1il .)). to ,& Ma1ch .))L.

<he1e 6 an! y a1e t>o +a1ia=les un!e1 consi!e1ation. The +alue o/ coe//icient o/ co11elation o=taine! shall lie =et>een 9& to %&. <hen r MNF then the1e is pe1/ect positi+e co11elation =et>een the +a1ia=les. <hen 1Q%& then the1e is pe1/ect negati+e co11elation =et>een the +a1ia=les. <hen 1 Q) then the1e is no 1elationship.

DE9REE O? CORRE;ATIONF,:Sr7 N%7 De'ree %" 2%rre#ati%n P%sitive Ne'ative

&

8e1/ect co11elation

9&

%&

-igh Deg1ee o/ co11elation

Bet>een 9.(7 to9&

Bet>een %.(7 to%&

Mo!e1ate Deg1ee o/ #o11elation

Bet>een 9..7 to9.(7

Bet>een %..7 to%.(7

'

"o> Deg1ee o/ #o11elation

Bet>een ) to9..7

Bet>een ) to%..7

A=sence o/ #o11elation

CORRE;ATION ON NA4 AND RETURN O? SBI MUTUA; ?UND

(orrelations
(orrelations NAV(SBI) NAV(SBI) Pearson orrelation Si&" ($'tailed) N RET(SBI) Pearson orrelation Si&" ($'tailed) N ! " ( "#$% "!() ( RET(SBI) "#$% "!() ( ! " (

,)"))

#)"))

7 + 6 # 5 V A N
*)")) +)"))

'*)"))

'+)"))

'$)"))

'!)"))

)"))

!)"))

$)"))

+)"))

*'$5#6+7

(orrelations

(orrelations NAV -TI NAV -TI Pearson orrelation Si&" ($'tailed) N RET -TI Pearson orrelation Si&" ($'tailed) N ! " ( ",$* ").( ( RET -TI ",$* ").( ( ! " (

.."))

.("#)

.("))

+ $ % V A N
.%"#) .%")) #")) ,")) %")) (")) ."))

*'$ %$+

(orrelations

(orrelations /&t price /&t price Pearson orrelation Si&" ($'tailed) N /&t yield Pearson orrelation Si&" ($'tailed) N ! " ( ",$* ").( ( /&t yield ",$* ").( ( ! " (

.."))

.("#)

.("))

e c i r p t g w
.%"#) .%")) #")) ,")) %")) (")) ."))

wgt yield

RE9RESSION ON NA4 1 RETURN O? SBI MUTUA; ?UND

De.en&ent varia/#e: RETURN In&e.en&ent 4aria/#e: NA4

Variables 'ntered3*emoved5b7 Variables Variables Entered Removed NAV(SBI) " (a) a All re12ested variables entered" b 3ependent Variable4 RET.SBI) 0odel !

0ethod Enter

/odel #ummary5b7 Adj2sted R S12are "!#% Std" Error o5 the Estimate $!")#)#(

R R S12are "#$%(a) "$%% a Predictors4 ( onstant)6 NAV(SBI) b 3ependent Variable4 RET.SBI)

0odel !

AN,VA5b7 S2m o5 S12ares Re&ressio n Resid2al Total !)$)",)% $,#("%,!

0odel !

d5 ! , %

0ean S12are !)$)",)% **+"!$%

7 $"+)+

Si&" "!()(a)

+,%."+,( a Predictors4 ( onstant)6 NAV(SBI) b 3ependent Variable4 RET.SBI)

(oefficients5a7 -nstandardi8ed oe55icients 0odel ! B ( onstant ) NAV(SBI) '#!"++( Std" Error +!"(*) "%$! "#$% Standardi8ed oe55icients Beta t '!",!$ !"#!( Si&" "!#( "!()

!").* a 3ependent Variable4 RET.SBI)

*esiduals #tatistics5a7 0inim2m '!."+#.% '!"$*+ %"*%# '$(".,.! '+#"$$!!$ '!",%+ '!"%.( '*)",##%+ '$"*!, "))( "))* "))! 0a9im2m !,".)(+ !"%,! !#"(,* !!"%#$% $)"%)+$+ ".(+ !"!(* +)"*(#!$ !"$+# +"!)! "+*% "**+ 0ean '*"+#*+ "))) !)"!*( '#"*!** "))))) "))) ")$! !"),)!# '")#+ "(%# "!!# "!$# Std" 3eviation !$")%*(! !"))) $".(, !$",+!$$ !."*(.)# ".$, !")$, $*"!$*., !"!.# !")(+ "!!. "!## N ( ( ( ( ( ( ( ( ( ( ( (

Predicted Val2e Std" Predicted Val2e Standard Error o5 Predicted Val2e Adj2sted Predicted Val2e Resid2al Std" Resid2al St2d" Resid2al 3eleted Resid2al St2d" 3eleted Resid2al 0ahal" 3istance oo:;s 3istance entered <evera&e Val2e

a 3ependent Variable4 RET.SBI)

(harts

#catterplot

&ependent Variable9 *'$:#6+7

l a u d i s e * 7 . 5 l & 8 d u t # n o i s r g e *

'!

'$

'$")

'!"#

'!")

')"#

)")

)"#

!")

*egression #tandardi8ed *esidual

*egression

Variables 'ntered3*emoved5b7 Variables Variables Entered Removed NAV(-TI) " (a) a All re12ested variables entered" b 3ependent Variable4 RET(-TI) 0odel !

0ethod Enter

/odel #ummary5b7 Adj2sted R S12are "+## Std" Error o5 the Estimate !*"#))*)

R R S12are ",,.(a) "**% a Predictors4 ( onstant)6 NAV(-TI) b 3ependent Variable4 RET(-TI)

0odel !

AN,VA5b7 S2m o5 S12ares Re&ressio n Resid2al Total !)$)"),. !$,!"#%)

0odel !

d5 ! , %

0ean S12are !)$)"),. $!)"$,$

7 *"(#!

Si&" ")%)(a)

$$(!",+. a Predictors4 ( onstant)6 NAV(-TI) b 3ependent Variable4 RET(-TI)

(oefficients5a7 -nstandardi8ed oe55icients 0odel ! B ( onstant ) NAV(-TI) '!))"!$% Std" Error *,"+(# ".(! ",,. Standardi8ed oe55icients Beta t '$"!#. $"$)+ Si&" ")%* ")%)

$"!,! a 3ependent Variable4 RET(-TI)

*esiduals #tatistics5a7

Predicted Val2e Std" Predicted Val2e Standard Error o5 Predicted Val2e Adj2sted Predicted Val2e Resid2al Std" Resid2al St2d" Resid2al 3eleted Resid2al St2d" 3eleted Resid2al 0ahal" 3istance oo:;s 3istance entered <evera&e Val2e

0inim2m '!("+()( '!",*) #"!#% '!)"(*$. '$+"$)+() '!",)) '!"%$) '$,"()%*. '$"$)# ")!) "))) "))!

0a9im2m $$"(!** !"%%+ !)".(# +!"*#*% !("*%)%# !"$%* !"+,, $!"$#),( !"#)+ +"!*$ "#%# "**.

0ean !"*!#) "))) ,".)) +"*)*( "))))) "))) '")#+ '!".(.($ '").. "(%# "!%, "!$#

Std" 3eviation !$")%!,$ !"))) $"+() !+"),(## !+"*$*%, ".$, !")*( !%",#%#) !"!(( !"$%. "!., "!(+

N ( ( ( ( ( ( ( ( ( ( ( (

a 3ependent Variable4 RET(-TI)

2harts
#catterplot

&ependent Variable9 *'$5%$+7

$

l a u d i s e *
'! '$

7 . 5 l & 8 d u t # n o i s r g e *

'$

'!

*egression #tandardi8ed *esidual

T BI"" R4G

*egression

Variables 'ntered3*emoved5b7 Variables Variables Entered Removed =>T(?IE< " 3)(a) a All re12ested variables entered" b 3ependent Variable4 =>T.PR) 0odel !

0ethod Enter

/odel #ummary5b7 Adj2sted R R R S12are S12are ",$*(a) "+.) "$(( a Predictors4 ( onstant)6 =>T(?IE<3) b 3ependent Variable4 =>T.PR) 0odel ! Std" Error o5 the Estimate "*#$.%

AN,VA5b7 S2m o5 S12ares Re&ressio n Resid2al Total "%(, !"$+!

0odel !

d5 ! , %

0ean S12are "%(, "$)#

7 +"($.

Si&" ").((a)

$")!% a Predictors4 ( onstant)6 =>T(?IE<3) b 3ependent Variable4 =>T.PR)

(oefficients5a7

-nstandardi8ed oe55icients B ( onstant) .#",(( =>T(?IE< "+** 3) a 3ependent Variable4 =>T.PR) 0odel ! Std" Error !"$,! "!%,

Standardi8ed oe55icients Beta ",$* t %#"(.. !".#% Si&" "))) ").(

*esiduals #tatistics5a7 0inim2m .%"#++$ '!"%., "!,) .%"(.#. '"#$#+% '!"!,) '!"#%+ '!")%)+. '!"(%* "))) "))$ "))) 0a9im2m .(",*#* !"#$+ "+*% ..")(,% "%(.%# !"%*+ !"(%* ".!$!! $",## +"$$% !",+, "*,! 0ean .("!+#) "))) "$!% .("$#$# "))))) "))) '"!)$ '"!!%*% '")%# "(%# "+%( "!$# Std" 3eviation "++#)$ !"))) ")%! "+%)%( "*!.+% ".$, !"!+* ",#+%# !"*+! !"$!( ",$) "!%* N ( ( ( ( ( ( ( ( ( ( ( (

Predicted Val2e Std" Predicted Val2e Standard Error o5 Predicted Val2e Adj2sted Predicted Val2e Resid2al Std" Resid2al St2d" Resid2al 3eleted Resid2al St2d" 3eleted Resid2al 0ahal" 3istance oo:;s 3istance entered <evera&e Val2e

a 3ependent Variable4 =>T.PR)

cha1ts

#catterplot

&ependent Variable9 ;-$:.*7

+

l a u d i s e * 7 . 5 l & 8 d u t # n o i s r g e *

'!

'$ '! ) ! $

*egression #tandardi8ed *esidual