Nippon India Project

K.L.E.
SOCIETY’s
INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH
VIDYANAGAR, HUBLI.
(Recognized by AICTE, New Delhi and Affiliated to Karnatak University, Dharwad)
A Project Report On
“A Comparative Study and Analysis of Risk and Return of Debt Mutual Fund and Bank
Deposit.”
Undertaken at
Nippon India life Asset Management Ltd.
Submitted in partial fulfilment of the requirement of
Master Degree in Business Administration of Karnatak University, Dharwad,
during the academic year 2021-22
Submitted By
Sneha Manjunath Shanbhag
Reg No: P02BO21M0004
Under the guidance of
Institute Guide Organization Guide

Prof. Smita Nadiger Asha Narayan Anneknavar
Prof. G.S.Sheeri Cluster Manager
Assistant Professor Nippon India life asset
KLES IMSR, Hubli management Ltd, Hubli
K.L.E. SOCIETY’s
INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH

VIDYANAGAR, HUBLI
(Recognized by AICTE, New Delhi and Affiliated to Karnatak University, Dharwad)
Certificate
This is to certify that Ms Sneha Manjunath Shanbhag, Reg.No.P02BO21M0003

has completed the Project report titled “A Comparative Study and Analysis of Risk and Return
oof Debt Mutual Fund and Bank Deposit.” under my guidance for the partial fulfilment of the
requirement of Master of Business Administration for the academic year 2021-22.
Institute Guide Director

Prof. Smita Nadiger Dr. Rajendraprasad K.
Prof. G.S.Sheeri Hanagandi
Assistant Professor KLES IMSR
KLES IMSR, Hubli Hubli
Declaration
This is to declare that the Project Report titled “A Comparative Study and Analysis of Risk and
Return of Debt Mutual Fund and Bank Deposit.” has been prepared for the partial fulfilment of
the Course Summer In-plant Project (SIP) in 2nd Semester by me at “Nippon India mutual
fund(MS India Financial Services)”, under the guidance of “Prof. Smita Nadiger and Prof.
G.S.Sheeri”.
I confirm that this report truly represents my work undertaken as a part of Summer In-plant
Project (SIP). This work is not a replication of work done previously by any other person. I also
confirm that the contents of the Report and the views contained therein have been discussed
and deliberated with the guide.
Date:10/02/2023 Sneha Shanbhag

Place: Hubli
Acknowledgement
It is a matter of great pleasure to acknowledge those personalities who have inspired, guided
and contributed immensely in bringing out this project report.
I would like to express my special thanks of gratitude to our Director Dr. Rajendraprasad
K. Hanagandi who gave me the golden opportunity to do this wonderful project, which also
helped me in doing research.
My completion of this project could not have been accomplished without the support of
Prof. Smita Nadiger and Prof. G.S.Sheeri. Thank you for your valuable guidance.
Lastly I would like to thank my parents, my teaching and non-teaching faculties, my family,
and all those who have helped me directly or indirectly for the completion of this project
report.
Date:10/02/20233 Sneha Shanbhag

Place: Hubli MBA II SEMESTER
Table of Contents
Sl. No. Particulars Page No.
1 Executive Summary 1-4
2 Introduction to Industry 5-27
3 Introduction to Company 28-34
4 Introduction to the Study 35-50
5 Data Analysis 51-71
6 Findings 72-73
7 Recommendations/Suggestions 74
8 Conclusion 75
9 Annexure 76-79
10 Bibliography 80
List of Tables
Sl. No. Title of Table Page No.
Calculation of risk and return of Nippon

1 51-52
India money market fund and market
Calculation of risk and return of SBI dynamic
2 54-55
bond direct plan growth and market
Calculation of risk and return of HDFC
3 57-58
money market fund
Calculation of risk and return of Axis
4 59-60
banking and PSU debt fund
Calculation of risk and return of Kotak
5 62-63
dynamic bond
6 Returns of selected debt mutual funds 65
7 Risks of selected debt mutual funds 66
8 Comparison of risks and returns 67
9 Returns of bank deposits 68

Comparison of returns of debt mutual fund
10 69
and bank deposits
11 Covariance 70
12 Beta 71
List of Graphs/Charts/Figures
Sl. No. Title of Graph/Chart/Figure Page No.
1 Returns of selected debt mutual funds 65
2 Risks of selected debt mutual funds 66
3 Comparison of risks and returns 67
4 Returns of bank deposits 68

Comparison of returns of debt mutual fund
5 69
and bank deposits
6 Covariance 70
7 Beta 71
Nippon India Mutual Fund
EXECUTIVE SUMMARY
Introduction to study
The project is about comparison of risk and return of 5 debt mutual funds and 5 bank deposits.
This research was conducted at “Nippon India Mutual Funds, Hubli”. The duration of the
project was for 60 days. The following mutual funds and bank deposits were taken into
consideration for the study:
SBI dynamic bond direct plan growth State Bank of India
HDFC money market fund Bank of Baroda
Kotak dynamic bond Canara Bank
Nippon India money market fund Axis bank
Axis banking and PSU debt fund HDFC Bank
This report basically includes various contents starting with all the objectives, needs of the
study, first part is about mutual fund and banking industry, second part is about the details of
Nippon India Mutual Fund, third part is about the research techniques, relevant topics from
various research papers. Fourth part includes about the data interpretation where the 5 debt
mutual funds and 5 bank deposits of various banks were taken for comparison of risk and return.
Fifth part includes about findings, suggestions and conclusion.
Investors request a minimum return, ideally one that is higher than the interest on bank
accounts. Returns, which are a security's gains or losses over a specific time period, are
typically expressed as percentages. Investors strive to increase expected profits while
taking into account their risks. Money from investors is invested in a portfolio by a
mutual fund. In this case, the investor is an equity investor rather than a depositor. As a
result, the investor's return is based on the portfolio's value. A mutual fund investor needs
information, whereas a bank depositor may not be concerned with the price of the bank's
stock shares or may not be aware of the loan portfolio.
KLE Society’s Institute of Management Studies & Research, Hubli 1

“Fixed deposits are better than mutual funds” this statement can also turn out to be the
greatest disadvantage. As fixed deposits will continue to yield at the same rate even if the
market rises, butmutual funds will return more in response.
For investors, it is essential to compare the risk and return of bank deposits and debt
mutual funds. It is crucial for investors to comprehend these trade-offs when making
investment selections because both investment options present various trade-offs
between risk and reward.
Debt mutual funds provide better returns than bank deposits since they invest in fixed-
income instruments like bonds. However, because the rewards on these investments are
based on the credit quality of the underlying bonds, debt mutual funds also pose a higher
risk. The investment's value may decline in the event that the bond issuer makes a
default.
Bank deposits, on the other hand, are thought to be less risky than debt mutual funds.
Deposits in banks come with a guaranteed return and are up to a certain amount insured
by the government. In contrast to debt mutual funds, bank deposits often offer lower
returns.
Investors must take their level of risk tolerance, investment objectives, and time horizon
into account when deciding between debt mutual funds and bank savings. Bank deposits
may be preferred by investors looking for predictable returns and low-risk tolerance,
whilst debt mutual funds may be chosen by investors who are willing to take on more
risk in exchange for better returns.

Title
A Comparative Study and Analysis of Risk and Return Of Debt Mutual Fund and Bank Deposit.
Objectives
• To study the concepts of Debt Mutual funds and bank deposits.
• To study the selected debt mutual fund schemes and different bank deposits.
• To study and analyze the risk and return of selected schemes of debt Mutual
funds andBank Deposits.
• To compare the performance of selected schemes of debt mutual funds and bank
deposits.
Need for the study

• To study whether the Mutual fund’s investments will have more advantages
or Bankdeposits
• By comparing selected mutual funds and Bank deposits in the area of risk
and returns.Based on which investors will make decisions easily.
Scope of the study

• This study will help to know the performance of Mutual funds and bank deposits.
• Research is based on different investment and savings plans, so there
are many opportunities to choose investment plans that benefit
investors.
• Using same tools and techniques it is possible to evaluate other
mutual fund schemes and bank deposits to make better investment
decisions.
Limitations of the study

• The study is purely based on secondary Data.
• The study is just limited to a period of 2 Months.

Research Methodology
Research methodology is the systematic, theoretical analysis of the methods
applied to thefield of study.
This study is based on Secondary sources of Data.
Secondary data: Refers to data collected by someone other

than the user. The study is totally based on secondary data
which have collected from:
• Articles and research papers
• NAV, market values from mutual fund and BSE related Websites
• Annual reports of the bank
• References from previous documents
• Manuals from organization.
Findings
➢ SBI dynamic bond direct plan growth fund has the highest return of 7.899%
➢ The funds with higher rate of risk are SBI dynamic bond direct plan growth fund and Axis
banking and PSU debt fund with 4.214% and 2.431% respectively.
➢ HDFC mutual fund is having negative covariance i.e., -0.469%.
Recommendations/suggestions
➢ For long term investment ,investing in mutual fund will be a great idea and decision.
➢ If a investors doesn’t want to bear risk and satisfied with the average return he/she may think
of investing in the bank deposit.
Conclusion
By comparing the risks and returns of bank deposits and debt mutual funds, mutual funds
give better returns than bank deposits. But risk with debt mutual funds is higher than bank
deposits.

INTRODUCTION TO THE INDUSTRY

Introduction to industry
Financial services are the economic services provided by the finance industry which
includes a broad range of businesses that manage money including credit unions, banks,
insurance companies, stock brokerages, and investment funds. Mutual funds are an
important part of the financial services industry in India. They provide a wide range of
investment products to retail investors who want to invest their money with professional
management teams and low-cost index funds. The mutual fund industry in India started
in 1963 with the formation of UTI in 1963 by an act of parliament and functioned under
the regulatory and administrative control of the Reserve Bank of India.
Banks are systems of financial institutions that assist individuals in storing and utilizing
their money. Customers can open accounts at banks to save or invest their money for a
variety of purposes.
Mutual fund industry

History of the Indian mutual fund industry
➢ Phase Of Inception (1964-87)
The emergence of the UTI marked the beginning of the phase. It was a
partnership between the RBI and the Indian government. Between that year and
1986, UTI introduced a number of plans and pioneered the concept of mutual
funds in India. At the end of 1988, UTI had Rs.6700 crores of Assets Under
management.
➢ Entry Of Public Sector (1987-1993)

Since 1987, numerous public sector banks have influenced the government
for the establishment of mutual fund divisions. The State Bank of India
established the first non- UTI Asset Management Fund in November 1987.
Canara Bank, Indian Bank, Life Insurance Corporation, General Insurance

Corporation, and Punjab National Bank all established additional AMCs shortly
after this one.
➢ Entry Private Sector Phase (1993-1996)

The Indian government realized the significance of liberalizing the Indian
economy between 1991 and 1996. In light of this, the government made the
mutual fund industry available to the private sector as well. This move was well-
received by foreign businesses, which flooded the Indian market in large
numbers. 11 private players launched Asset Management Funds during this time,
collaborating with foreign entities.
➢ Phase Of Consolidation (February 2003 – April 2014)

The Unit Trust of India was divided into two distinct entities in February
2003. The SEBI-regulated UTI Mutual Fund and the Specified Undertaking of
the Unit Trust of India(SUUTI) were the two distinct entities. The financial
markets all over the world were at their lowest point since the global economic
recession of 2009
➢ Phase Of Steady Development And Growth (Since May 2014)

In September 2012, the Securities and Exchange Board of India (SEBI)
implemented a number of innovative initiatives in recognition of the absence of
mutual funds in India. It is estimated that Indians save approximately Rs. 20 to
30 lakh crore per year. If Indians began investing a larger portion of their savings
in mutual funds, the mutual fund industry in India could experience tremendous
expansion. According to observers, Indians have begun shifting a portion of their
savings from land and gold to bonds and silver, which are financial instruments.

Industry size/value
• For the month of December 2022, the average Assets Under Management
(AAUM) of theIndian mutual fund industry was 40,76,171 crore.
• As of December 31, 2022, the Indian mutual fund industry had 39,88,735 crore
in assets under management (AUM).
• Over the course of a ten-year period, the Indian MF industry's AUM has
increased by more than fivefold, from 7.60 trillion on December 31, 2012, to
39.89 trillion onDecember 31, 2022.
• In just five years, the MF industry's AUM has increased by approximately
twofold, from21.27
• In May 2014, the industry's AUM reached the milestone of 10 Trillion (10 Lakh
Crore), and in just over three years, it had increased by more than twofold to 20
Trillion (20 Lakh Crore) for the first time in August 2017. In November 2020,
the AUM reached a new record high of 30 trillion or 30 crores. As of December
31, 2022, the industry's AUM was 39.89 Trillion (39.89 Lakh Crore).
• During the month of May 2021, the mutual fund industry reached the milestone
of 10 crore folios.
• On December 31, 2022, the total number of accounts—or folios, in mutual fund
parlance—was 14.11 crore, or 141.1 million. On the other hand, the number of
folios under Equity, Hybrid, and Solution Oriented Schemes—in which the
maximum amount of money was invested by retail customers—was
approximately 11.29 crore,

Classification of the Mutual Funds Industry in India

➢ Open-ended scheme
A collective investment plan known as an open-end fund can issue and redeem
shares at any time. Instead of purchasing shares from the fund's current
shareholders, investors typically buy them directly. Divide the fund's assets
minus liabilities by the number of outstanding shares to get the price per share,
or NAV (net asset value). This is typically determined at the conclusion of each
trading day. Open-ended mutual funds don't have a fixed maturity period, so
investors can enter, redeem, or exit at any time.
➢ Close-ended scheme
A closed-end fund invests capital in financial assets like stocks and bonds after
raising capital by issuing a predetermined number of shares that cannot be
redeemed. Closed-end funds are typically available for purchase and sale on a
well-known stock exchange. The market determines the price per share, which
typically differs from the fund's underlying value, or net asset value (NAV), per
share. When the price is lower or higher than the NAV, it is said to be cheaper or
more expensive than the NAV. , These funds have a fixed maturity date, so
investors can only enter the market during the new fund offer's initial period; In
addition, they can only redeem their investment when the maturity period ends.
➢ Equity fund
Equity mutual funds primarily invest in shares of publicly traded businesses i.e.,
listed companies. Equity funds may diversify their investments across various
market capitalization segments, such as large, mid-cap, and small-cap. They may
also invest in businesses that fall under a variety of industries. Most of the time,
closed-end funds trade on major global stock exchanges. The majority of mutual
fund schemes in India encouragelong-term participation in stock markets because
of the comparable high returns found in other markets.

➢ Sector-specific fund
Sector-specific funds are mutual funds that invest in a particular industry or
sector. These mutual funds are regarded as risky due to the fact that their
portfolio primarily consists of investments in a single type of industry. As a
result, they provide less diversification and are thought to be risky. These mutual
funds have a lot of risks but a lot of potential for return, and investors put their
money into specific sectors like mining, banking, infrastructure, and other areas.
➢ Index funds
A mutual fund or exchange-traded fund (ETF) with a portfolio designed to
match or track the components of a financial market index, like the Standard &
Poor's 500 Index, is an index fund. If you don't want a fund manager to control
your returns, index mutual funds present a moderate risk.
➢ Tax saving funds

These funds can be deducted from one's taxable income. The investments in
these funds have a lock-in period of three years, which serves as a tax break for
investors. Those mutual funds that invest at least 80% of their assets in stocks are
considered to be tax-efficient. The equity-linked saving schemes (ELSS) that
provide investors with tax benefits under Section 80C of the Income Tax Act of
1961 are, in essence, tax-saving mutual funds. Investing in equity-related
instruments during the lock-in period actually encourages investors to thrive in
long-term investing
➢ Debt Funds
Debt Funds are a type of mutual fund that carries credit risk and has a low-risk
appetite in addition to a low return. Investors who want a steady income from a
fixed investment like government bonds or debentures should look into debt
funds. Fixed-interest-generating securities like corporate bonds, government
securities, treasury bills, commercial paper, and other money market instruments
are the focus of an investment in a debt fund.


The primary objective of investing in debt funds is to gain a capital appreciation

and a steady interest income. The interest rate and maturity period that you will
receive from debt instruments are predetermined by their issuers. As a result,
they are also referred to as "fixed-income securities."
➢ Money Market Funds

Money market funds can be enrolled by investors who are looking for reasonable
investment returns over a short period of time. In addition, it has a low-risk
factor and a liquid return, making it a reasonable investment return. Debt funds
called Money Market Funds lend money to businesses for up to a year. The fund
manager is able to increase returns while minimizing risk by adjusting the
lending duration of these funds because of their design. Returns tend to be higher
with longer loan terms
➢ Hybrid Funds
Despite having a higher proportion of equity assets than balanced funds, hybrid
funds are similar to balanced funds. Retired or elderly investors who anticipate
low risks should strongly consider this kind of mutual fund. An investment fund
with diversification across two or more asset classes is known as a hybrid fund.
Most of the time, these funds put money into a mix of stocks and bonds. Asset
allocation funds may also be used as a name for them.
➢ Balanced Funds
Balanced Funds Divide the investment between equity and debt mutual funds.
These funds offer moderate returns with relatively low risks that fluctuate in
response to market risks. A hybrid investment fund known as a balanced fund is
distinguished by its diversification across two or more asset classes. Most of the
time, the amount of money the fund invests in each asset class has to stay within
a certain minimum and maximum value. An asset allocation fund is another
name for a balanced fund.

➢ Gilt funds
These mutual funds only invest in government securities, which carry a high-
interest risk rate but carry no credit risk.
➢ Liquid funds
The primary goal of liquid funds is to offer investors high levels of liquidity and capital
security. The manager of the fund makes investments in high-rate debt instruments
that have a maturity date of just 91 days or less. The allocation proportions correspond to
the investment objective of the fund. The manager of the fund will make certain that the
portfolio's average maturity is three months. This makes liquid funds less vulnerable and
makes fund returns less sensitive to changes in interest rates.
Advantages Of Mutual Fund
▪ The fact that investments in mutual funds are managed by experienced Fund
Managers, who allocate funds in debt, equities, and other money market
instruments based on their comprehensive understanding of market movements,
is the primary advantage of these investments.
▪ When you put money into mutual funds like Equity Linked Savings Scheme, you
can also save money on taxes. Under Section 80C of the IT Act of 1961, ELSS
investments are eligible for annual income deductions of up to INR 150,000,
resulting in direct tax savings of up to INR 46,800 for taxpayers in the 30% tax
bracket.
Disadvantages Of Mutual Fund
▪ Fixed, guaranteed returns are not offered by mutual funds.

▪ Fund managers oversee all kinds of mutual funds. A group of analysts may
frequently assist the fund manager. As a result, you have no control over your
investment as an investor. Your fund manager is responsible for making all
major decisions regarding your fund.

Advantages of debt mutual fund
▪ Diversification: Investing in a variety of fixed-income securities through

debt mutualfunds reduces the risk for individual investors.
▪ Professional management: Fund managers who are knowledgeable about the
fixedincome markets oversee the portfolio and make wise investment choices.
▪ Liquidity: Debt funds offer simple liquidity because the securities can be sold on
the stockmarket.
▪ Higher returns than savings accounts: Debt funds have the potential to
offer better returns than ordinary savings accounts, with higher potential returns
than savings accounts.
▪ Tax effectiveness: Returns from debt funds are taxed less heavily than those
from fixeddeposits.
▪ Flexibility: Investors have a variety of debt funds to select from, each with a
differentmaturity, credit rating, and interest rate sensitivity
Disadvantages of debt mutual fund
▪ Low returns: Although debt mutual funds offer higher returns than bank
FDs, they nevertheless fall far short of equity mutual funds in terms of
returns.
▪ Not completely safe: Credit risk, reinvestment risk, and other risks exist with
debt mutual funds. Your investment is therefore not secure, and the rewards
are not assured.
▪ Not for long-term objectives: Debt mutual funds are appropriate for
immediate objectives. However, if you want to achieve your goal in ten years,
you should invest inequities mutual funds.

Major players in the mutual fund industry in India
➢ SBI Mutual Fund
➢ HDFC Mutual Fund
➢ ICICI Prudential Mutual Fund
➢ Aditya Birla Sun Life Mutual Fund
Michael porter’s 5 Force Model
Michael E. Porter of the Harvard Business School created this concept in 1979.A model
called Porter's Five Forces identifies and examines five competitive forces that influence
every industry and aid in determining its strengths and weaknesses. When determining
corporate strategy, the structure of an industry is frequently identified through the Five
Forces analysis. Any sector of the economy can be used to understand the level of
industry competition and improve a company's long-term profitability using Porter's
model.
It has served as a foundation for industry analysis and business strategy. This model
considers the market's pure competition, implying that risk-adjusted rates of return
should remain constant across industries or businesses. Michael Porter provides five
distinct variables that address industry-specific factors. The threat of new entrants, the
threat of substitutes, the bargaining power of suppliers, the bargaining power of investors,
and rivalry among the existing players are the five fundamental forces on which the
majority of industries are based. These forces work together to determine an industry's
crucial profit potential. With regard to the competition and other factors, information
about the various forces will help frame the policy and strategy; Additionally, it assists in
determining the significant company or business's strengths and weaknesses.

The five forces framework is occasionally utilized by strategy makers when developing
business-related strategies. Profit is an initial goal for any business; the majority of
businesses typically identify various forces among these five variables to achieve this
goal. A strategy maker can easily explain, using the five force model, which factor has the
greatest influence and can be considered opportunities or threat
These five forces determine the industry structure of the organization:

• Power of Suppliers
Suppliers will negotiate a higher price from the Mutual Fund if they have a lot of power.
The threat of suppliers attracting away human capital is more significant than the threat
of capital suppliers. There is a possibility that a talented underwriter for mutual funds
will be lured away by larger firms seeking to enter a specific market if they are
employed by a smaller mutual funds company or one in a niche industry.
• The threat of substitute products and services

The Mutual Fund must either continue to invest in R&D or risk losing out to
industry disruptors if the threat of substitutes is high. Substitute goods and services are
those that differ from one another but satisfy the same investor requirements. In the
financial market, a variety of financial products are easily accessible from the major
current market players thanks to the availability of numerous substitute investment
vehicles among those players. On the other hand, the financial market also has a number
of similar products. Insurance plans, derivative contracts, option contracts, future
contracts, forward contracts, gold mini contracts, and a variety of other options are the

primary alternatives to mutual fund.

• Power of buyers
When buyers have a lot of power to bargain, they usually try to lower prices, which
makes it harder for the Mutual Fund to make long-term profits. The individual is not a
significant threat to the mutual fund sector. With mutual fund companies, large corporate
clients have significantly more bargaining power. Annual premiums amount to millions
of dollars for airlines and pharmaceutical companies, two major corporate clients.
Mutual fund companies put in a lot of effort to acquire corporate clients with high
margins.
• Threat of new entrants

A large Mutual Fund company cannot be started by the typical entrepreneur. The mutual
fund industry itself poses the threat posed by new entrants. Underwriting mutual funds
has become a specialty for some businesses. These mutual fund companies are afraid
that
the big players will squeeze them out. The entry of new financial services companies
into the market poses another threat to many mutual fund companies. Current players
will be willing to make fewer profits in order to lessen the threat posed by a new
competitor.
• Rivalry among existing players

Existing players like Mutual Funds find it difficult to sustainably earn profits when
there is intense competition. The mutual fund business is experiencing intense
competition. Most of the time, there isn't much of a difference between mutual fund
companies. As a consequence of this, mutual funds have evolved into more of a
commodity—a market in which a mutual fund company with a cost structure that is
lower, greater efficiency, and superior customer service will prevail over rivals. In an
effort to entice customers, mutual fund companies also offer a variety of investment
products and higher investment returns. In the long run, the Mutual Fund industry is
likely to see more consolidation. Instead of spending money on marketing and
advertising, larger businesses would rather take over other businesses or combine with

others.

Swot Analysis
• Strengths.
This brand name and the historical record may also be a strength if the fund is a
part of a well-established company that has a track record of success and a
family of high- performing products. Depending on your investment style and the
fund, different financial metrics may be important: For some investors, dividend
yield may be more important than total return over a 10-year period. One of the
organization's greatest assets may be its geographic presence in various regions.
It determines the company's reach and ease of accessibility to the intended
audience. The organization may be able to increase its customer base and offset
losses from one product category with benefits from others to its extensive
product portfolio.
• Weaknesses
Fees charged by your fund are one weakness to consider. Expenses reduce
investor return even in good times, and if performance declines, they will be more
difficult to accept. Since bigger isn't always better, size can also be a weakness.
For instance, as a small-cap fund grows in size, it will have difficulty finding
growth opportunities for all of its assets and may be forced to close or expand
beyond its stated goal. Investors don't pay enough attention to some schemes that
mutual funds introduce. Some mutual funds' performance is not dynamic enough
to take advantage of market opportunities. As a result, investors can use their
limited knowledge of mutual funds to pick up some of the schemes on the market.

• Opportunities
When looking at potential mutual funds, it's not enough to just look at the numbers
right now. You should also take a look at the market as a whole and consider
whether the fund is in the best position to profit from trends. If a management
change and favorable economic trends are combined, a lagging fund may present
the best growth opportunity. Ashift in the regulatory environment imposed by the
government has an impact not only on various industries but also on the funds
that concentrate on those industries. Mutual funds products face the most
competition from bank deposits. By introducing appealing schemes that are likely
to yield better and study returns than bank deposits, fund operators can take
significant steps to divert investors' attention from bank deposits to mutual funds.
The rural market in India has tremendous potential for mutual funds' excellent
growth prospects. When developing new products, all of India's major market
leaders take into account the country's rural market.
• Threats
A lot of funds move along with general economic news to some extent. A
sudden change in the unemployment rate, which lowers consumer confidence, or
a stimulus plan that encourages people to spend again, poses particular risks to
some types of funds, which perform better during recessions than during boom
times. Also, if a fund relies on a superstar manager, make sure you have a backup
plan in case that manager suddenly leaves. The operators of mutual funds face
intense competition. The operation of mutual funds is also greatly threatened by
the entry of multinational corporations. Retail investors are unfamiliar with
mutual funds. The lack of regulation surrounding mutual fund distribution is one
of the main barriers to the industry's expansion. Investors in mutual funds seek
the assistance of distributors who are prepared to inform them of the
effectiveness of distribution for a specific risk profile and life cycle stage.

Risks involved in Mutual Funds
Equity fund
• Market Risk
Market risk is the most significant risk associated with equity mutual funds. Market
risk is the effect that ups and downs in the market have on an investment's value.
Stocks are the investments of mutual funds, and stock prices never remain constant.
They always shift in response to supply and demand. The fund's NAV also
fluctuates as a result of this ongoing change; consequently, the value of your mutual
fund also fluctuates on a daily basis. Diversification can reduce market risk, which
cannot be eliminated from equity investing.
• Liquidity Risk
Market risk is the most significant risk associated with equity mutual funds. Market
risk is the effect that ups and downs in the market have on an investment's value.
Stocks are the investments of mutual funds, and stock prices never remain constant.
They always shift in response to supply and demand. The fund's NAV also
fluctuates as a result of this ongoing change; consequently, the value of your mutual
fund also fluctuates on a daily basis. Diversification can reduce market risk, which
cannot be eliminated from equity investing.
• Concentration Risk
When all of your investments are in a single stock, industry, or theme, you have
concentration risk. High-concentration risk is associated with sectoral and thematic
funds. The concentration risk in diversified mutual funds is extremely low because
they invest in more than 50 to 100 shares.
• Currency Risk
Foreign mutual funds face the greatest currency risk. Currency risk occurs when the
rate of exchange fluctuates unfavorably, resulting in lower domestic currency

returns.

Debt Fund
• Credit Risk
Credit risk is the most significant danger presented by debt mutual funds. The quality
of "debt" papers is rated by rating agencies like CRISIL, CARE, ICRA, and others
from AAA (highly stable) to D (junk). Credit risk arises when the borrower, who is
the issuer of the debt paper, fails to make his or her payments for interest or
principal. This was recently demonstrated when Franklin Templeton AMC was
forced to terminate six of its debt programs due to the high credit risk of the
borrowers.
• Interest Rate Risk

Interest rates and bond prices are
inversely related When interest rate rises
= bond prices fall
When interest rate falls = bond prices rise
Long-term debt funds are significantly affected by a rising interest rate scenario.
Interest rate derivatives and diversification are two ways investors can protect
themselves from interest raterisks.
• Inflation Risk
When inflation rises, the purchasing power of money decreases. This is called inflation risk.
Example: Real rate of return is only 2.5% if the current inflation rate is 7% and the
return ondebt fund investment is 9.5%.
• Reinvestment Risk
When you try to reinvest the money but get a lower rate of return, you run the risk of
reinvestingit at maturity.
Example: In 2019, Mr.X made an investment at 8% interest in a bank FD. The
interest rate dropped to 7.5% when he went to renew his FD in 2020. The
reinvestment risk is the interest rate reduction of 0.5%.

Structure of Mutual Fund
The structure of mutual funds in India consists of three levels and a few other significant
components. The various mutual fund schemes are not just created or marketed by
distinct banks or AMCs; Instead, the structure of mutual funds is influenced by other
parties. The Securities Exchange Board of India (SEBI), under which each entity is
required to be registered, serves as the primary watchdog for all of these transactions.
Since the introduction of the SEBI (Mutual Funds) Regulations in 1996, which
revolutionized the structure of mutual funds, all entities have been subject to its
regulation. A Sponsor, Mutual Fund Trustee, Asset Management Company, Custodian
& Registrar, and Transfer Agent are the five fundamental participants in mutual funds at
the moment.
Unit Holder
An investor who owns one or more units in an investment trust or master limited
partnership (MLP)is referred to as a unitholder. A share, also known as an interest, is the
same as a unit. The trust declaration, which outlines the trust's actions, provides
unitholders with specific rights.

Sponsors
Any individual or organization that is able to set up a mutual fund scheme to manage
funds and generate income is considered a sponsor. In India, the sponsor is the first layer
of a three-tier structure for mutual funds. A mutual fund scheme must be approved by
SEBI, which must be approached by the sponsor. The sponsor cannot operate on their
own. It must establish a Public Trust in accordance with the Indian Trust Act of 1882
and register it with SEBI. In order to safeguard the unit holders' interests and comply
with SEBI Mutual Fund regulations, the Trustee is registered with SEBI and appointed
as the fund's trustee. In order to handle fund management, the Sponsor establishes an
Asset Management Company under the Companies Act of 1956.
Trust and Trustees

The second layer of mutual fund structure is the trust and trustees. The fund sponsor
employs trustees, who are also referred to as the fund's guardians. As their name
suggests, they are responsible for overseeing the fund's expansion and maintaining
investors' trust. The trustees are required by SEBI to submit a half-yearly report on the
fund and the AMC's operation. A Board of Trustees or a Trust Company can be used to
appoint trustees. The mutual fund schemes' operations are governed by the Trustees, who
oversee the entire AMC. To prevent the Sponsor and AMC from having a conflict of
interest, the SEBI has tightened the transparency rule. A new mutual fund scheme
cannot be launched by an AMC without the Trust's permission and approval. To
safeguard the investors' hard-earned money, it is critical for the Trustees to act
independently and appropriately. Under SEBI, the Trustees must also be registered, and
SEBI further regulates their registration by suspending or revoking it if any conditions
are broken.

Asset Management Company (AMC)

The third operational layer in mutual fund structures is an AMC. Depending on the
requirements of investors and the nature of the market, an AMC places various mutual
fund schemes on the market. They oversee the development of mutual funds alongside
the sponsor and trustee. They enlist the assistance of brokers, bankers, RTA auditors,
and others when developing the plan. and agree to something with them. An AMC is a
company that must be registered with SEBI because it was established under the
Companies Act. An AMC, like the Trustees, must ensure that the sponsor, the trustees,
and themselves do not have a conflict of interest.
Custodian
An organization that is in charge of keeping the securities safe is called a custodian. The
transfer and delivery of securities and units are the responsibility of custodians, who are
registered with SEBI. Investors can update their holdings at any time and receive
assistance from custodians in tracking their investments. Custodians are also in charge of
collecting corporate benefits like bonus issues, interest, dividends, and so on, in addition
to their primary responsibility of safekeeping.
Transfer Agent
Transfer Agents are a crucial link between investors and fund managers. They provide
investors with information about the fund's benefits and update fund managers with
investor information. Transfer Agent are SEBI-registered organizations that handle
investor requests, manage and deliver periodic investment statements, update investors'
records, and assist with investor KYC. Time for link-in, Karvy, etc. are some of India's
most well-known RTAs, and they provide the AMC with the necessary operational
support for mutual fund activities.

Working of Mutual Funds
SEBI Regulations
➢ The guidelines and regulatory framework that govern and regulate the country's
securities markets are maintained by SEBI. The following is a list of the rules for
investors. Since mutual funds offer the most diverse selection of investment
options, they may come with some risk. In the event that such schemes perform
poorly, investors must be very clear about their financial position and risk-taking
capacity. As a result, investors must take intoaccount an investment scheme's risk
tolerance.
➢ As an investor, it is essential that you obtain comprehensive information about
the mutual fund scheme option prior to investing in mutual funds. The secret to
making the right investments is having the right information at the right time.
This may assist in selecting the appropriate schemes, understanding the
guidelines to follow, and understanding the rights of investors.
➢ Diversification of portfolio: Investors can spread out their investments across a
variety of strategies by diversifying their portfolios. This increases the likelihood
of maximizing profits or reduces the risk of potentially significant losses. If you

want to have a financial advantage that lasts over time and is sustainable, you
need to diversify.
➢ Avoid the clutter of portfolios: Selecting the appropriate fund portfolio
necessitates careful management and monitoring of each scheme. The investor
must choose the right number of schemes to hold in order to avoid overlap and
manage each one equally well without overcrowding the portfolio.
➢ Assign a time dimension to the investment schemes: To encourage the plan's
financial growth, investors should give each scheme a time frame. If the plans
are stable over time, it might help keep the market's volatility and fluctuations
under control
Banking Industry
Since the late 1700s, when the system first began, banks have been the backbone of the
economy. Many changes have since taken place, starting with the incorporation of RBI
on April 1, 1935, as the central bank and regulatory authority for other banks. It was
nationalized in 1949.
Deposits and loans are handled by banks, which are types of financial institutions. In
India, there are many different kinds of banks, and each one is responsible for different
things.
Functions of Banks
• Accepting deposits from the public, lending.
• Providing a facility for demand withdrawal.
• Provide customers with lockers.
• Transferring funds.
• Issuing drafts, and dealing with foreign exchange.

Types of Banks in India
➢ Central banks
Each nation has its very own Central Bank. The non-profit model is the
goal of the central bank. The country's credit and monetary systems are governed by it.
The country's commercial banks and other financial institutions are governed by the
Central Bank, which also serves as controller, supervisor, and regulator.
➢ Cooperative Banks
These banks provide short-term, medium-term, and long-term credit to the
agricultural sector and other allied activities. Provides loans at a cheaper rate of
interest. These banks are mainly situated in rural areas. Interest rates on fixed
deposits range from 5.10% - 7.00%.
➢ Commercial Banks
Organized under the Banking Companies Act, of 1956, The term
"commercial bank" refers to a financial institution that charges interest on loans and
advances to its customers and accepts deposits from the general public. They
encourage the expansion of trade and commerceand mobilize modest savings

➢ Payments Banks
A brand-new method of banking. The payments bank account holder is not
eligible to apply for loans or credit cards and can only deposit a maximum of Rs.
1,00,000/-. Payments Bank in our country: Paytm Payments Bank, Airtel Payments
Bank etc.
➢ Regional Rural Bank

Regional Rural Banks (RRBs) are scheduled commercial banks owned by the Indiangovernment that
operates regionally in various Indian states. The Ministry of Finance of the Indian Government owns
these banks. They were designed to provide basic banking and financial services to rural areas. The
government of India has designated a specific area for the operation, which includes one or more
districts in the State.

INTRODUCTION TO COMPANY
Nippon India Mutual Fund (NIMF)

Nippon India Mutual Fund (NIMF) has been established as a trust under the Indian
Trusts Act, of 1882. It is one of India's leading mutual funds, with Average Assets Under
Management (AAUM) of Rs 279431.37 Crores (Apr 2022 to Jun 2022 QAAUM) and
182.57 lakhs folios (as of 30th Jun 2022). One of India's fastest-growing mutual funds,
NIMF is present in 272 locations as of January 24, 2022, and it provides investors with a
comprehensive portfolio of products to meet a variety of investor needs. In order to
increase its value to investors, NIMF constantly strives to introduce innovative products
and customer service initiatives.
Nippon India Mutual Fund has been registered with the Securities & Exchange Board
of India (SEBI) vide registration number MF/022/95/1 dated June 30, 1995. Nippon
India Mutual Fund (NIMF) was earlier known as Reliance Mutual Fund. The name of
the Mutual Fund was changed from Reliance Mutual Fund to Nippon India Mutual
Fund effective September 28, 2019. NIMF was formed to launch various schemes under
which units are issued to the public with a view to contributing to the capital market and
providing investors the opportunities to make investments in diversified securities.

Products and Services
• Retirement mutual fund

According to the 30-30 rule, a person works for 30 years to pay for 30
years of life after retirement, when their income would have stopped, but they still need
to live the same way. You need solid pension plans for this.
• Nippon India retirement fund - wealth creation scheme
• Nippon India retirement fund - wealth creation scheme
The investment objective of the scheme is to provide capital appreciation and consistent
income to the investors which will be in line with their retirement goals by investing in a
mix of securities comprising equity, equity-related instruments, and fixed-income
securities. However, there can be no assurance or guarantee that the investment objective
of the Scheme will be achieved.
• Equity funds
• Debt funds
• Gold funds
• Liquid funds
Name of the company Nippon India Mutual Funds

CEO Mr. Sundeep Sikka
Headquarters Mumbai, Maharashtra
Registered date with SEBI June 30,1995

Objectives of Nippon India Mutual Fund

➢ To carry on the activity of a mutual fund as may be permitted at law,
formulate and devise various collective schemes of savings and investments
for people in India and abroad, and also ensure the liquidity of investments
for the unit holders.
➢ To deploy funds thus raised so as to help the unit holders earn reasonable
returns on theirsavings.
➢ To take such steps as may be necessary from time to time to realize the
effects withoutany limitation.
McKinsey 7S model
The McKinsey 7S framework is a tool used to analyze an organization's effectiveness by
examining seven interdependent elements: Strategy, Structure, Systems, Skills, Staff,
Style, and Shared Values.
Here is an application of the McKinsey 7S framework to Nippon India Mutual Fund:

Strategy
Nippon India has a well-defined investment strategy that focuses on delivering quality
products and services to its customers. The company has a clear understanding of its
target market and is constantly exploring new opportunities to expand its product range.

Structure
Nippon India has a well-structured organization with clear lines of responsibility and a
flat hierarchy that enables quick decision-making. The company has a strong parent
company (Nippon Life Insurance) which provides stability and expertise to the mutual
fund business.
Systems
Nippon India has established robust systems and processes to manage its operations,
including investment management, customer service, and risk management. The
company also invests in technology to enhance its efficiency and competitiveness.
Skills
Nippon India has a team of experienced and highly qualified professionals who manage
mutual funds and provide expert investment advice. The company also provides training
and developmentopportunities to its staff to build their skills and knowledge.
Staff
Nippon India has a highly motivated and dedicated workforce who are committed to
delivering the best possible customer experience. The company has a positive and
supportive workplace culture that values teamwork and collaboration.
Style
Nippon India has a customer-focused approach to its business, and places a high
priority on delivering quality products and services to its customers. The company also
encourages innovationand creativity to continuously improve its offerings.
Shared Values
Nippon India has a strong commitment to ethical and responsible business practices and
places a high value on transparency and integrity in all its dealings with its customers,
employees, and stakeholders. The company also has a strong focus on sustainability and

social responsibilities.
SWOT Analysis of the company

Strengths
Solid brand recognition: Nippon India Mutual Funds has a strong reputation in the Indian
industrybecause to its commitment to providing high-quality investment solutions.
Wide selection of products: Nippon India provides a variety of mutual funds to meet the
various investment needs and risk tolerances of investors.
Experienced staff: The business employs a group of knowledgeable and skilled

individuals whooversee the mutual funds and offer professional investing guidance.
Reliable parent company: One of the biggest life insurance firms in the world, Nippon
Life Insurance Company, is the parent company of Nippon India. This gives the mutual
fund industry stability and knowledge.
Weaknesses
Dependence on market conditions: Nippon India's mutual funds' performance is highly
reliant on market conditions, which can be altered by adjustments to interest rates,
monetary policy, and other factors.
Limited global presence: Compared to some of its rivals, Nippon India has a smaller
global footprint, which may limit its growth prospects.
Opportunities
Expanding mutual fund market: The Indian mutual fund market is expanding quickly,
providingNippon India with a great chance to increase its market share.
Increasing investor awareness: Nippon India has the chance to draw in new investors
and boost its AUM as more people become aware of the advantages of mutual funds.

Diversification into new product categories: In order to broaden its product offering and
adapt to changing consumer demands, Nippon India may want to consider expanding
into new product categories.
Threats
Competition: Nippon India competes strongly with other mutual fund firms and
financialinstitutions in a market that is extremely competitive.
Regulatory modifications: The mutual fund sector is frequently subjected to

regulatory modifications, which may have an effect on Nippon India's operations and
financial results.
Economic volatility: Uncertainty and instability in the economy can have an influence on
investorconfidence and the performance of Nippon India's mutual funds.
FUNCTIONAL AREA OF STUDY
A prominent player in the Indian mutual fund market, Nippon India Mutual Funds provides
investors with a variety of investment possibilities. So, in Nippon India Mutual Funds, the
functional field of study would normally concentrate on finance, and more particularly, the
area of investment management and asset allocation.
the functional area of study in Nippon India Mutual Funds is a multi-disciplinary field that
requires a strong foundation in finance, economics, and mathematics, as well as a deep
understanding of investment markets and the financial performance of different types of
investments
Asset allocation is another critical component of investment management. This involves
determining the appropriate mix of different types of investments within the fund's portfolio
in order to achieve the fund's stated objectives
n addition to investment management and asset allocation, other related areas of study that
are relevant to Nippon India Mutual Funds include market analysis, risk management, and
portfolio theory. Market analysis involves understanding the various factors that influence

financial markets, such as interest rates, economic indicators, and geopolitical events. Risk
management involves identifying, analyzing, and managing the risks associated with
investments in order to protect the fund's portfolio from losses. Portfolio theory provides a
framework for understanding the trade-offs between risk and return, and how different
investment strategies can be used to achieve specific investment objectives.
the functional area of study in Nippon India Mutual Funds is a multi-disciplinary field that
requires a strong foundation in finance, economics, and mathematics, as well as a deep
understanding of investment markets and the financial performance of different types of
investments

INTRODUCTION TO THE STUDY
Investment is one of the foremost essential a part of a person’s life in today’s time.
Investing requires time knowledge and constant monitoring of the market. For those that
don’t have much knowledge of the various sorts of investment options, Fixed Deposits,
and open-end funds become an option. Fixed Deposit provides low returns compared to
other investmentsmoptions available within the market.
At an equivalent time, mutual funds provide comparatively a better rate of return and
possess a high risk Therefore, before investing in any of them one should have proper
knowledge about an equivalent.
The formulas used for the calculation of risk and return:

➢ Rate of Return
It refers to the profit or gain generated by the fund’s investments over a specified period of time.
Rate of return = [(Current value-Initial value)/Initial value*100]
➢ Variance = Σ(R-R1)2/N-1
➢ Standard deviation = √variance
➢ Covariance
The direction of the relationship between the returns on two assets is measured by
covariance. It is a statistical tool for figuring out how the movements of two random
variables relate to one another.
Covariance = Σ(R-R1)*(Rm-Rm1)/N-1
➢ Beta

The mutual fund's sensitivity to changes in the market is shown by the beta.
Beta = Covariance/variance
Debt Mutual funds

A particular class of mutual funds called a debt fund invests in fixed-income securities.
Treasury Bills, Government Securities, short- or long-term corporate bonds, money
market instruments, floating-rate debt, and other debt securities with various time
horizons are all possible investments for debt funds.
Types of debt funds

➢ Gilt Funds
These securities are highly rated and pose a very small credit risk. This is thus
because a government nearly never misses a payment on its debt. Due to this,
investors who are afraidof taking risks favor gilt funds.
➢ Income Funds
Long-maturity securities are a popular investment choice for income funds. They
are much more stable as a result of dynamic bond funds. Income funds typically
have a maturity of 5 to 6 years.
➢ Short-term debt funds

These funds invest in debt and money market instruments so that the portfolio's
Macaulayduration is between one and three years.
➢ Liquid funds
These funds invest in debt instruments that are less than ninety-one days from
maturity. Because they offer comparable liquidity and superior returns, these
funds are sensible alternatives to savings bank account.

Types of bank deposits

➢ Savings account
The most common type of bank account is a savings account. You can put
money in this account and get a return in the form of interest. In this account, you
must always keep a minimum balance set by your bank. Depending on the bank and
the type of account, the minimum balance required can range from INR 500 to INR
10,000 to INR 100,000. Interest rates vary from 2.70%-6.00% per annum.
➢ Current account
A deposit for business purposes is called a "current account." For business-
related cash deposits and withdrawals, you should open this account. Most banks
offer Current Accounts with unlimited daily transactions that can be withdrawn
or deposited in any amount. However, Current Account deposits typically have
lower minimum balancerequirements than Savings Account deposits.
➢ Fixed deposit account

For conservative investors, a Fixed Deposit is a deposit option that works
best. A Fixed Deposit account is one in which you deposit or save money for a
predetermined period of time with the bank. During the deposit's term, you are
entitled to interest on the fixed amount.
➢ Recurring deposit account

This account is one where a person can deposit a fixed sum of money on a
monthly or quarterly basis. Here is the fixed amount to be deposited on the
selected date for the entire investment tenure. They come with maturity tenures
ranging from 6 months to 10 years.

INTRODUCTION TO THE TOPIC

Mutual Fund Schemes (Debt mutual fund schemes)
1. SBI Dynamic bond direct plan growth
A Dynamic Bond mutual fund scheme from SBI Mutual Fund is the SBI
Dynamic BondDirect Plan-Growth. This fund was established on January 1, 2013,
making it ten years old. As of December 31, 2022, SBI Dynamic Bond Direct
Plan-Growth is a medium-sized fund in its category with assets under
management (AUM) of 2,351 crores. The fund charges a higher expense ratio of
0.87 percent than the majority of other Dynamic Bond funds.
Scheme Details
Expense ratio 0.87%

Exit load 0.25%
AUM(fund size) Rs. 2351 Crs
Lock-in No lockIn
Age 10 yrs
Benchmark CRISIL Dynamic Bond Fund AIII Index
Min. Investment SIP Rs.500 and Lumpsum Rs.5000

2. Nippon India money market fund

A money market mutual fund product offered by Nippon India Mutual Fund is called
Nippon India Money Market Fund-Growth. This fund was established on June 15, 2005,
making its lifespan 17 years and 7 million. Nippon India Money Market Fund-Growth is a
medium-sized fund in its category with assets under management (AUM) as of
December 31, 2022, totaling 10,238 Crores. The fund charges an expense ratio that is
greater than what the majority of other money market funds do, at 0.34%.
Growth returns over the past year for the Nippon India Money Market Fund are 5.20%.
It has produced returns of 7.31% annually on average since the start. Every 11 years, the
fund has quadrupled the amount invested in it.
Scheme Details
Expense ratio 0.21%

Exit load 0%
AUM (fund size) ₹ 10,238 Crs
Lock-in No Lockin
Age 10 yrs
Benchmark CRISIL Money Market Fund BI Index
Min. Investment SIP ₹500 &
Lumpsum ₹500

3.Kotak Dynamic Bond Fund

A dynamic bond mutual fund strategy from Kotak Mahindra Mutual Fund is the
Kotak Dynamic Bond Fund Direct-Growth. This fund was established on January 1,
2013, therefore it has been around for 10 years. As of December 31, 2022, Kotak
Dynamic Bond Fund Direct- Growth had assets under management (AUM) totaling
1,999 Crores, making it a medium-sized fund in its sector. The fund's expense ratio,
which is 0.37%, is lower than that of the majority of comparable Dynamic Bond
funds.
The 1-year returns on Kotak Dynamic Bond Fund Direct-Growth are 3.71%. It has
generated returns of 8.74% on average every year since the start. Every nine years,
the fund has doubledthe amount invested in it.
Scheme details
Expense ratio 0.37%

Exit load 0%
AUM(fund size) ₹ ,999 Crs
Lock-in No Lockin
Age 10 yrs
Benchmark NIFTY Composite Debt Index B-III
Lumpsum ₹5000

4.HDFC money market fund

HDFC Mutual Fund offers a money market mutual fund called HDFC Money
Market Fund Direct Plan-Growth. This fund was established on January 1, 2013,
making it ten years old. As of December 31, 2022, the medium-sized HDFC Money
Market Fund Direct Plan-Growth had assets under management (AUM) of 13,976
crores. The fund's expense ratio of 0.21 percent is comparable to that of the majority
of other Money Market funds.
NAV (Jan 25, 2023): ₹ 4,854.34 0.02 % 1-D Change

Returns:7.24%
Scheme details
Expense ratio 0.21%

Exit load 0%
AUM(fund size) ₹ 13,976 Crs
Lock-in No Lockin
Age 10 yrs
Benchmark NIFTY Money Market Index B-I
Lumpsum ₹100

5.Axis banking and PSU debt fund

Axis Mutual Fund offers the Banking and PSU mutual fund scheme Axis Banking &
PSU Debt Direct Plan-Growth. This fund was established on January 1, 2013, making it
ten years old. As of December 31, 2022, the medium-sized Axis Banking & PSU Debt
Direct Plan-Growth fund had assets under management (AUM) of 13,113 crores. The
fund's expense ratio of 0.33 percent is comparable to that of the majority of other
Banking And PSU funds.
NAV (Jan 25, 2023) :₹ 2,264.76 0.02 % 1-D Change

Returns: 7.9%
Scheme details
Expense ratio 0.33%

Exit load 0%
AUM(fund size) ₹ 13,113 Crs
Lock-in No Lockin
Age 10 yrs
Benchmark NIFTY Banking and PSU Debt TRI
Lumpsum ₹5000

Risk
• Debt mutual funds: Low to moderate risk due to their investment in
government and fixed-income securities like bonds. Due to variations in
interest rates, issuer creditworthiness, etc., the investment's value may change.
• Bank Deposits: Bank deposits are low risk since the government insures them
up to a specific amount. While guaranteed, the returns are typically lower than
those of debt mutual funds.
Returns
• Debt mutual funds: The returns might be moderate to large depending on the
securities they invest in. The returns are often greater than bank deposits, but
they might changedepending on the market.
• Bank deposits: Because they have fixed interest rates, they are guaranteed to
have low to moderate returns. In general, the returns are lower than those of
debt mutual funds.
Significance of the study

The comparative examination of risk and return between debt mutual funds and bank
deposits is significant because it aids investors in making wise investment choices.
Investors can select the choice that best fits their risk tolerance, investment objectives,
and time horizon by understanding the trade-offs between risk and return of these
investing options.
Investors can better understand the effects of macroeconomic variables like inflation,
interest rates, and credit quality on the risk and return of debt mutual funds and bank
deposits by using comparative analysis. For investors looking to make long-term
investment decisions who want to maintain the stability of their investments over time,
this information is essential.
Investors can utilize comparative analysis to make investment decisions that are in line
with their financial goals and objectives by having a thorough understanding of the

advantages and disadvantages of debt mutual funds and bank deposits

LITERATURE REVIEW
This chapter contains literature survey of some papers which are related to the filed.
Following aresome papers related to the topic:
In the paper, the authors Ms. Arya S Babu, Dr. Jahnavi M, Namita P Konnur, Dr. B.
Percy Bose state that the study's primary focus was on debt mutual funds with the
primary goal of examining the variables influencing their performance. Asset under
management, expense ratio, yield to maturity, adjusted duration, and asset allocation
were used to examine the performance of the funds. Secondary data was used for the
study, and several debt fund schemes from different mutual funds, such as short duration
fund and short-term fund, were chosen for investigation. As a result, it was concluded
that the MFs are regarded as one of the best investment opportunities available to
investors. If we thoroughly evaluate the performance before investing, we can be sure
that it will produce significant returns with minimal initial expenditure. Since everyone
is aware that investments in these schemes are exposed to market risk, most investors stay
clear of them becauseof the dangers involved. The paper states that one should choose to
invest in the ICICI Prudential Low Duration Fund because it has beaten all other
schemes in the study. (Ms. Arya S Babu, 2021)
In another paper, the author Subham Gupta has compared the average returns of the top
5 midcap equities mutual fund schemes, investigated the performance of the growth
mutual fund schemes, and examined the returns and risk rate on returns of the schemes.
It was anticipated that the study would be sufficiently successful in raising investor
awareness of investment operations in mutual funds. Depending on their willingness to
accept risk and their areas of interest, the investors can select the best plan. Additionally,
investing in mutual funds gives investors access to funds that offer greater returns.
Understanding the five largest mid - cap equity funds is made easier by this analysis. In
this study, a variety of measurements are taken to clearly understand the risk associated
with the designs that were chosen. The analysis also makes it clear how well the schemes
perform when their risk is taken into account, which can help investors select the best

options. (Gupta, 2022)

In the research paper by author Bhadrappa Haralayya, the risks and returns of about five
particular mutual funds in the banking sector are compared. In the analysis, the top five
performing banking funds are mostly taken into account, including ICICI, Birla Sun Life,
Sundaram Financial Services, UTI, and Reliance Banking funds. The study is based on
each mutual fund's NAV and return. The study does not take into account any additional
AMC performance measures. It considers the benchmark value and yearly opening
NAVs. (Haralayya, 2022)
This study by authors M. Guruprasad, Lokender Singh, Ajita Gupta, aims to learn about
the performance and consumer preferences of mutual fund services and products in
India and examines them from a marketing and financial point of view. Therefore, the
research analysis consists of marketing research tools and techniques to understand
client preferences and financial analysis tools and techniques to understand the
performance of various mutual funds. The data from the poll revealed that throughout
time, there has been a growth in mutual fund awareness. This is also supported by the
development of several schemes and the general industry growth. Agents, family, and
other individuals can persuade investors to invest in mutual funds. (Mutuseshan, 2019)
In the paper by authors Hassan Qamar and Sanjay Singh, effectiveness and efficiency of
mutual funds are analysed using a non-parametric approach in this study. The
methodology makes predictions about the performance of the fund for the upcoming
years using Data Envelopment Analysis (DEA). When determining their efficiency level
of funds using DEA, factors including mutual fund returns, turnovers, volatility, and
expense ratio are taken into account. The end product not only offers investments with
good returns, but these investments are also stable and perform consistently. Applying
the concept to a group of 46 Indian equities funds from 2006 to 2015 is the
methodology. Three, five, and ten years are allotted for this analyses' implementation,
correspondingly. The comparison with the Value Research and Crisil and rating systems
is the basis for the results. They state that their findings offer investors a useful tool to
select the top fund out of all the available options. Additionally, it aids fund managers in

more effective money management. (Hassan Qamar)

In another paper by authors Mr. Kanwal Gurleen Singh, Dr. Sukhmani, Ms. Neha Kalra,
the study's objectives included a thorough examination of the Indian mutual fund market
and an examination of the sector's potential for growth. A descriptive research design was
adopted for the current study.It entails gathering information through observation or self-
reporting. According to the study's findings, the mutual fund business has advanced
significantly since India's UTI era. Mutual funds have become more prevalent over time.
In India, mutual funds offer investors security, liquidity, and growth. They are secure and
accessible channels for channeling savings into assets that provide income and growth.
The funds give investors security, promoter entrepreneurs resources, and equity price
stability. Mutual funds are thought of as a way for investors to get into bonds and the
stock market. The amount of investor knowledge about mutual funds is the main driver
of the industry's growth today. There is an urgent need to significantly increase
awareness. (Mr. Kanwal Gurleen Singh)
This study by authors Dibin K. K. and Alfia Thaha, compares the stock market
index with the mutual fund market, in an empirical examination of the two investment
options available to investors. This study is pertinent in the current environment because
the recent policy rate drop shows that the RBI has adopted an accommodative stance.
The interest rates that banks give on deposits reflect this. The publication claims that the
customer's actual return on a bank deposit is only 3.22%, which has given other
investing options a boost. By doing a risk-return analysis on the chosen mutual funds
and equities over a 10-year period (FY2007-FY2017), the study aims to identify the
optimum investment alternative. Based on market capitalization, the top 10 businesses
from the SENSEX are chosen, and they are compared to the top two companies from
each of five distinct mutual fund schemes, according to CRISIL ratings. The findings will
aid investors in betterunderstanding investment decision-making. (Alfia thaha, 2017)

The study by authors Dr. Joy Das and Dr. Parag Shil, examines how well public
commercial banks perform in terms of the conversion of their deposits held to assets
under management for their mutual fund operations. The analysis includes data for 10
years, from March 2007 to March 2016, which were gathered from the Corporate
Capitaline Plus database as well as from other publications produced from time to time
by the Reserve Bank of India, AMFI, and commercial banks. To arrive at the result,
the data acquired in this way was examined using conversion efficiency, correlation
coefficient, and panel data analysis. According to the survey, private banksoutperformed
public sector commercial banks in terms of converting deposits into assets managed by
their mutual fund businesses. (Joy Das, 2018)
The Indian capital market has witnessed unprecedented developments and innovations
particularly during the decades of 1980s and 1990s. The review studies have analyzed
different types of mutual funds by using various measures. Hence, the present study
analyzed the risk and return of mutual funds performance of top performing funds for
the last three years (2008- 2010). The study concluded that beta values of top six
schemes were significantly related to their market index values. The sample of
schemes namely Reliance Banking Fund-Growth Plan- Growth Option and UTI
Transportation and Logistics Fund - Growth are significantly related to their market
value in 2010 only. All sample schemes except Reliance Banking Fund-Growth Plan-
Growth Option earned negative returns in the year 2008. Results of the study indicate
that the all sample schemes earned positive return in the year 2010. (Bhuvaneshwari
P, 2014)

Objectives
• To study the concepts of Debt Mutual funds and bank deposits.
• To study the selected debt mutual fund schemes and different bank deposits.
• To study and analyze the risk and return of selected schemes of debt Mutual
funds andBank Deposits.
• To compare the performance of selected schemes of debt mutual funds and bank
deposits.
Need for the study

• To study whether the Mutual fund’s investments will have more advantages
or Bankdeposits
• By comparing selected mutual funds and Bank deposits in the area of risk
and returns.Based on which investors will make decisions easily.
Scope of the study

• This study will help to know the performance of Mutual funds and bank deposits.
• Research is based on different investment and savings plans, so there
are many opportunities to choose investment plans that benefit
investors.
• Using same tools and techniques it is possible to evaluate other
mutual fund schemes and bank deposits to make better investment
decisions.
RESEARCH METHODOLOGY
Research Methodology
Research methodology is a systematic and logical approach to studying a research
problem. It involves various steps such as defining the research problem, reviewing the
literature, developing a research design, collecting and analyzing data, and drawing
conclusions. The research methodology used in a study determines the validity and
reliability of the results and helps ensure that the study is conducted in an ethical and
systematic manner.

Source means a place, person, or thing from which something originates or can be
obtained.There are two types of Data available for source.
• Primary data
• Secondary data
Primary data: It is original and collected directly from sources for a specific research
purpose. It is collected first-hand and not obtained from any other sources. Examples
include survey responses, interviews, and observations.
Secondary data: It is data that has been previously collected for another purpose and is
being used for a different research study. It is obtained from sources such as previous
research studies, government reports, and published articles. Secondary data is often
easier and less expensive to obtain compared to primary data but may not be as relevant
or up-to-date as the primary data collected specifically for the current research purpose.
This study is based on Secondary Data.
Secondary data: Refers to data collected by someone other than
the user. The study is totally based on secondary data which have
collected from
• Annual reports of the bank.
• Manual instruction of the finance department.
• Articles and research papers.
• Previous documents.
Methods of data analysis

Tools and techniques used for data analysis
➢ Microsoft excel
➢ Net Asset Value(NAV)
The market value per share for a specific mutual fund is represented by net asset value. It is
computed by dividing the total asset value by the number of shares after removing the
liabilities. The price of each fund unit is calculated by adding up the market value of a
portfolio and dividing it by the total number of current fund units.

➢ Rate of Return
It refers to the profit or gain generated by the fund’s investments over a specified period of time.
Rate of return = [(Current value-Initial value)/Initial value*100]
➢ Variance = Σ(R-R1)2/N-1
➢ Standard deviation
This was used to calculate the risk of selected debt mutual fund and also market risk.
Standard deviation = √variance
➢ Covariance
The direction of the relationship between the returns on two assets is measured by
covariance. It is a statistical tool for figuring out how the movements of two random
variables relate to one another. If the value of mutual fund and market value are positive then
both are moving in upward direction, and vice versa for negative. If one is negative and
another is positive then both are moving in different direction.
➢ Beta
The mutual fund's sensitivity to changes in the market is shown by the beta.
Ways of data interpretation

➢ Tables
➢ Bar charts
Limitations of the study

➢ The study is purely based on secondary Data.
➢ The study is just limited to a period of 2 Months.
Duration of the study: 60 Days

DATA ANALYSIS
Nippon India Money Market Fund
Year NAV Return(R) (R-R1) (R-R1)2

2016 2335.564
2017 2495.457 6.846012355 0.434182847 0.188514745
2018 2658.20549 6.521790999 0.109961491 0.012091529
2019 2896.907 8.979799 2.567969492 6.594467311
2020 3108.73 7.312040048 0.90021054 0.810379017
2021 3252.197 4.614971387 -1.79685812 3.228699106
2022 3388.671 4.196363258 -2.21546625 4.908290702
Total Return 38.47097705 15.74244241
Avg.
Return(R1/Rm1) 6.411829508
Variance 2.623740402
SD 1.619796408
(R-R1)(Rm-
Market Rm (Rm-Rm1) (Rm-Rm1)2 Rm1)
26626.46
34056.83 27.90596272 12.84361183 164.9583649 12.11629035
36068.33 5.906304257 -9.15604663 83.83318984 0.649466021
41253.74 14.37662903 -0.68572186 0.470214466 36.91874473
47751.33 15.75030531 0.687954422 0.473281287 14.17859085
58253.82 21.99413084 6.93177996 48.04957342 -39.52033262
60840.74 4.440773154 -10.6215777 112.8179135 -9.838383045

90.3741053 410.6025373
15.06235088
68.43375622
8.272469778
14.50437629
Table No.1: Calculation of risk and return of Nippon India money

Market fund and market

Variance = Σ(R-R1)2/N-1
15.74244/7-1
15.74244/6
2.62374
SD = √variance
√2.62374
1.619796
Market Variance = Σ(Rm-Rm1)2/N-1

410.60254/7-1
410.60254/6
68.43376
SD of market = √market variance

√68.43376
8.27247
14.50437629/7-1
14.50437629/6
2.417396048
2.417396/68.43375622
0.035324614

SBI Dynamic Bond Direct Plan Growth

2016 19.45708 - - -
2017 21.64732 11.25677645 3.357206639 11.27083642
2018 22.25443 2.804550402 -5.09501941 25.95922281
2019 24.81381 11.50054169 3.600971876 12.96699845
2020 28.10205 13.25165301 5.352083197 28.64479455
2021 29.566652 5.211726547 -2.68784327 7.224501431
2022 30.56369 3.372170782 -4.52739903 20.497342
Total Return 47.39741888 106.5636957
Avg.
Return(R1/Rm1) 7.899569814
Variance 17.76061594
SD 4.214334579
(R-R1)(Rm-
Market Rm (Rm-Rm1) (Rm-Rm1)2 Rm1)
26626.46 - - - -
34056.83 27.90596272 12.84361183 164.9583649 93.68608331
- -
36068.33 5.906304257 9.156046627 83.83318984 30.09273484
-
41253.74 14.37662903 0.685721858 0.470214466 51.76983679
47751.33 15.75030531 0.687954422 0.473281287 84.29694437
-
58253.82 21.99413084 6.93177996 48.04957342 59.11677651
60840.74 4.440773154 - 112.8179135 -

10.62157773 20.10515208
90.3741053 410.6025373
106.5637/7-1
15.06235088
1106.5637/6
68.43375622
117.76061667
8.272469778
120.438201
SD = √variance
√17.76062
4.214334665
Table No.2: Calculation of risk and return of SBI dynamic bond direct plan growth
and market


410.60254/7-1
410.60254/6
68.43376

√68.43376
8.27247
120.438201/7-1
120.438201/6
20.07303351
Beta = Covariance/market variance

20.07303351/68.43375622
0.293320645

HDFC Money Market Fund

2016 3225.012
2017 3432.807 6.443232 -0.06032 0.003638
2018 3657.025 6.531623 0.028074 0.000788
2019 3962.251 8.346292 1.842744 3.395704
2020 4261.715 7.557926 1.054377 1.111712
2021 4461.978 4.699118 -1.80443 3.255972
2022 4704.848 5.443102 -1.06045 1.124548
Total Return 39.02129 8.892362

Avg.
Return(R1/Rm1) 6.503549
Variance 1.48206
SD 1.217399
(Rm- (R-R1)(Rm-
Market Rm Rm1) (Rm-Rm1)2 Rm1)
26626.46
34056.83 27.90596 12.84361 164.9583649 -1.683200304
36068.33 5.906304 -9.15605 83.83318984 0.16581332
41253.74 14.37663 -0.68572 0.470214466 26.49244259
47751.33 15.75031 0.687954 0.473281287 16.60676484
58253.82 21.99413 6.93178 48.04957342 -39.6868937
60840.74 4.440773 -10.6216 112.8179135 -4.709204643
90.37411 410.6025373
15.06235

68.43375622
8.272469778
-2.814277905
Table No. 3:Calculation of risk and return of HDFC money

Market fund and market
8.892362/7-1
8.892362/6
1.48206
SD = √variance
√1.48206
1.2174

410.60254/7-1
410.60254/6
68.43376

√68.43376
8.27247
-2.814277905/7-1
-2.814277905/6
-0.46905

-0.46905/68.43375622
-0.00685
Axis banking and PSU debt fund

2016 1427.58
2017 1537.597 7.706538 0.178835 0.031982
2018 1638.448 6.559001 -0.9687 0.938385
2019 1809.694 10.45172 2.924016 8.549872
2020 2001.585 10.60351 3.075802 9.460555
2021 2124.446 6.138185 -1.38952 1.930761
2022 2203.205 3.707272 -3.82043 14.5957
Total Return 45.16622 35.50725

Avg.
Return(R1/Rm1) 7.527704
Variance 5.917875
SD 2.432668
(Rm- (R-R1)(Rm-
Market Rm Rm1) (Rm-Rm1)2 Rm1)
26626.46
34056.83 27.90596 12.84361 164.9583649 4.99055108

36068.33 5.906304 -9.15605 83.83318984 -5.721454231

41253.74 14.37663 -0.68572 0.470214466 42.03749913
47751.33 15.75031 0.687954 0.473281287 48.44481402
58253.82 21.99413 6.93178 48.04957342 -30.56124666
60840.74 4.440773 -10.6216 112.8179135 -16.96566906
90.37411 410.6025373
15.06235
68.43375622
8.272469778
42.22449427
Table No. 4: Calculation of risk and return of Axis banking and PSU debt
fund and market

33130679/7-1
33130679/6
5.917875
SD = √variance
√5.917875
2.432668

410.60254/7-1
410.60254/6
68.43376

√68.43376
8.27247
42.22449427/7-1
42.22449427/6
7.037416
7.037416/68.43375622
0.102835

Kotak dynamic bond

2016 20.11755
2017 22.10166 0.399154 -0.10569 0.011169
2018 23.23629 0.250772 -0.25407 0.06455
2019 25.96249 0.633468 0.128628 0.016545
2020 29.07732 0.808687 0.303848 0.092324
2021 31.13338 0.597847 0.093008 0.00865
2022 32.22259 0.339108 -0.16573 0.027467
Total Return 3.029037 0.220706

Avg.
Return(R1/Rm1) 0.504839
Variance 0.036784
SD 0.191792
Market Rm (Rm- (Rm-Rm1)2 (R-R1)(Rm-

Rm1) Rm1)
26626.46
34056.83 27.90596 12.84361 164.9583649 -2.949244727
36068.33 5.906304 -9.15605 83.83318984 -1.500599165
41253.74 14.37663 -0.68572 0.470214466 1.849241453
47751.33 15.75031 0.687954 0.473281287 4.78569871
58253.82 21.99413 6.93178 48.04957342 2.045623847
60840.74 4.440773 -10.6216 112.8179135 -0.735976185
90.37411 410.6025373
15.06235
68.43375622
8.272469778
3.494743932
Table No. 5:Calculation of risk and return of Kotak dynamic bond

and market.

0.220706/7-1
0.220706/6
0.036784
SD = √variance
√0.036784
0.191792

410.60254/7-1
410.60254/6
68.43376

√68.43376
8.27247
3.494743932/7-1
3.494743932/6
0.582457
0.582457 /68.43375622
0.008511258

Returns
SBI NIPPON HDFC AXIS KOTAK

Return 7.899 6.411 6.503 7.527 0.504
Table No.6 : Returns of selected debt mutual funds
RETURN
9
8
7
6
5
4
3
2
1
0
Chart No. 1:returns of the selected debt mutual fund
INTERPRETATION
The above table and chart represent the return of the SBI dynamic bond fund, Nippon India money
market fund, HDFC money market fund, Axis banking and PSU debt fund and, Kotak dynamic
bond fund. Here, the return of SBI dynamic bond fund is higher than that of other mutual fund
returns. The return of the SBI mutual fund is 7.899% followed by Axis 7.527, HDFC 6.503, Nippon
6.411 and at last Kotak with the lowest return of 0.504. So one can think of investing in the SBI
among these 5 debt mutual funds as it gives the greater return.

Risk

RISK 4.214 1.619 1.217 2.431 0.191
Table No.7: Risks of selected debt mutual funds
RISK
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Chart No.2: risks of selected debt mutual funds.
INTERPRETATION
The above table and chart represent the risks of the SBI dynamic bond fund, Nippon
India money market fund, HDFC money market fund, Axis banking and PSU debt
fund and, Kotak dynamic bond fund. Here, the risk of SBI dynamic bond fund is
greater than the risks of other debt mutual funds. The risk of the SBI mutual fund is
4.214% followed by Axis 2.432, Nippon 1.619, HDFC 1.217, and at last Kotak with
the lowest risk of 0.191. By comparing the risks of all the above mutual funds SBI is
the riskier fund to invest and Kotak has very low risk so one can think of investing in
Kotak among these 5 debt mutual funds as it has the lower risk.

Comparison of Risk and Return

RISK 4.214 1.619 1.217 2.431 0.191
RETURN 7.899 6.411 6.503 7.527 0.504
Table No.8: Comparison of risk and return of selected debt mutual funds.
Chart Title
9
8
7
6
5
4
3
2
1
0
RISK RETURN
Chart No. 3: comparison of risk and return of selected debt mutual funds.
INTERPRETATION
The above table and graph represent the comparison of risk and return of the SBI
dynamic bond fund, Nippon India money market fund, HDFC money market fund,
Axis banking and PSU debt fund and, Kotak dynamic bond fund. Here for SBI even
though the risk is high they yield a better return than other debt funds, same way Axis
having a high rate of risk it also has better returns. So the investor can think of these
two SBI and Axis debt funds while investing as they are the better choice among
those debt funds.

Returns of Bank Deposit
BANKS INTEREST RATES
State Bank of India 5.50
Axis Bank 5.75
HDFC Bank 5.60
Bank of Baroda 5.10
Canara Bank 5.75
Table No.9: Returns of bank deposits of selected banks
INTEREST RATES
5.8
5.6
5.4
5.2
4.8
4.6
State Bank of Axis Bank HDFC Bank Bank of Baroda Canara Bank
India
Chart No.4: returns of bank deposits of selected banks
INTERPRETATION
The above table and chart represents the interest rates of the SBI, HDFC, Axis bank, Bank of
Baroda, and Canara Bank. Here, the rate of return of Axis Bank is more than the return of
other bank deposits. The interest rate of the Axis Bank is5.75% and Canara bank 5.75%,
followed by HDFC Bank 5.6%, SBI 5.5%, and at last 5.1%.

Comparison of Returns of Debt Mutual Fund and Bank Deposits
Returns Returns Returns Returns Returns

Bank 5.50 5.75 5.60 5.75 5.10
deposits
Debt 7.899 6.411 6.503 7.527 0.504
Mutual
Funds
Table No. 10: Comparison of returns of debt mutual fund and bank deposits
Comparison of Return of Debt

mutual fund and Bank deposits
10
8
6
4
2
0
1 2 3 4 5
bank deposits debt mutual funds
Chart No.5: Comparison of returns of debt mutual fund and bank deposits
INTERPRETATION
The above table and chart represent the comparison of return of debt mutual fund and
bank deposits. From this chart, we can get a picture that debt mutual funds generate
more returns than bank deposits. From return point of view, debt mutual funds are
more beneficial than bank deposits when compared to different debt mutual funds
and bank deposits.

Covariance

COVARIANCE 20.073 2.417 -0.469 7.037 0.582
Table No.11: Covariance of debt mutual funds
COVARIANCE
25
20
15
10
0
-5
Chart No.6: covariance of debt mutual funds
INTERPRETATION
The above chart and table represent the covariance of selected debt mutual funds. These debt mutual
funds are compared with the market return. Here HDFC mutual fund is having negative covariance
i.e., -0.469 it means that the market and mutual fund are moving in different directions. The market
is moving in the positive direction and mutual fund is moving in the negative direction.

Beta

BETA 0.2933 0.0353 -0.0068 0.1028 0.0085
Table No.12: Beta
BETA
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
-0.05
Chart No.7: beta
INTERPRETATION
The above table and chart shows the volatility of the selected debt mutual funds. If
the value is more than 1 then it is high volatile it means it has higher risk. If the
value is less than 1 it indicates that it is low volatile it means it has less risk. Here the
mutuals funds are low volatile in nature.

FINDINGS
➢ Debt mutual funds carry a higher level of risk than bank deposits as the returns are linked to
the performance of the bond market. Bank deposits are considered low-risk investments as
they are insured by the government up to a certain limit.
➢ Debt mutual funds have the potential to offer higher returns than bank deposits, especially
over the long term. However, the returns from bank deposits are guaranteed and fixed,
whereas returns from debt mutual funds can fluctuate.
➢ The data which is calculated above(table no.1) shows the returns of five debt mutual funds,
SBI dynamic bond direct plan growth fund(7.899%), Axis banking & PSU debt
fund(7.527%), HDFC money market fund(6.503%), Nippon India money market
fund(6.411%), Kotak dynamic bond fund(0.504%) When compared with selected debt
mutual funds SBI dynamic bond direct plan growth fund has the highest return among these
debt mutual funds followed by Axis, HDFC and Nippon. On the other hand, Kotak has the
lowest return among them.
➢ Based on the calculations above (table no.2) it represents the risk factors of selected debt
mutual fund schemes. The risk of SBI dynamic bond direct plan growth fund is 4.214%
which indicates it is associated with high level of risk for investing, risk of Axis banking and
PSU debt fund is 2.431% which indicates it is associated with a moderate level risk, risk of
HDFC money market fund is 1.217% which suggests a level of risk, risk of Nippon India
money market fund is 1.619% indicates a moderate level of risk, Kotak dynamic bond has
the risk of 0.191% which implies a low level of risk.
➢ When compared with both risks and returns of selected debt mutual funds although SBI has a
higher rate of risk(4.214%) it also gives the greater return(7.899%). Same way Axis which
also has a higher rate of risk(2.431%) when compared with other debt funds gives better rate
of return(7.527%).
➢ From table no.10 & chart no.5 we can find that debt mutual funds gives better and higher

return than bank deposits.
➢ The above chart no.6 and table no.11 represent the covariance of selected debt mutual funds.
These debt mutual funds are compared with the market return. Here HDFC mutual fund is
having negative covariance i.e., -0.469 it means that the market and mutual fund are moving
in different directions. The market is moving in the positive direction and mutual fund is
moving in the negative direction.
➢ Table no.11 and chart no.7 shows the volatility of the selected debt mutual funds. If the value
is more than 1 then it is high volatile it means it has higher risk. If the value is less than 1 it
indicates that it is low volatile it means it has less risk. Here the mutuals funds are low
volatile in nature.

RECOMMENDATIONS/SUGGESTIONS
➢ Before investing in any fund one must have proper knowledge about the fund, schemes,
return rate, risk associated with the fund.
➢ Bank deposits give fixed rate of interest and also have less risk. On the other hand mutual
funds may give more returns with market fluctuations, the rate of return may increase
according to the market conditions but it is more riskier than bank deposits as there is no
guarantee of return.
➢ For long term investment ,investing in mutual fund will be a great idea and decision.
➢ If an individual expects a higher rate of return by bearing risk he/she can think of investing
in a mutual fund.
➢ If a investors doesn’t want to bear risk and satisfied with the average return he/she may think
of investing in the bank deposit.

CONCLUSION
After analyzing the whole report I came to the conclusion that when an investor wants to
invest in any of the investments vehicles he/she should analyze the company’s financial
position, risk associated with the fund, and rate of return.
The majority of investors’ best investing options today may be mutual funds. Investors
demand a financial intermediary who can provide the necessary information and skill for
effective investment as the financial market becomes more complex.
By comparing the risks and returns of bank deposits and debt mutual funds, we can say that
mutual funds give better returns than bank deposits. But risk associated with debt mutual
funds is higher than bank deposits.
If one is ready to accept the risk and wait for the returns, mutual fund is the best option. If an
investor is not ready for any of the risks he may opt to invest in bank deposits.
Returns in the bank deposits are guaranteed, but in the debt mutual fund returns are not
guaranteed as the NAV changes according to the market.
When the mutual fund value and market value are moving in the same direction in the same
direction then it means both are having positive value, and vice versa.
After analyzing the risks and returns of mutual funds, we can conclude that before investing
in any of the mutual funds one should go for the market analysis.

ANNEXURE
An annexure is a group of legal records or other proofs that are included with a
primary document to support the information it contains.
SBI dynamic bond direct plan growth
YEAR NAV
2016 19.45708
2017 21.64732
2018 22.25443
2019 24.81381
2020 28.10205
2021 29.566652
2022 30.56369
Nippon India money market fund

YEAR NAV
2016 2335.564
2017 2495.457
2018 2658.20549
2019 2896.907
2020 3108.73
2021 3252.197
2022 3388.671

HDFC money market fund
YEAR NAV
2016 3225.012
2017 3432.807
2018 3657.025
2019 3962.251
2020 4261.715
2021 4461.978
2022 4704.848
Axis banking PSU & debt fund
YEAR NAV
2016 1427.58
2017 1537.597
2018 1638.448
2019 1809.694
2020 2001.585
2021 2124.446
2022 2203.205

Kotak dynamic bond fund

YEAR NAV
2016 20.11755
2017 22.10166
2018 23.23629
2019 25.96249
2020 29.07732
2021 31.13338
2022 32.22259
Market (SENSEX)
YEAR MARKET
VALUE
2016 26626.46
2017 34056.83
2018 36068.33
2019 41253.74
2020 47751.33
2021 58253.82
2022 60840.74

Bank deposits
State Bank of India 5.50
Canara Bank 5.75
HDFC Bank 5.60
Axis Bank 5.10
Bank of Baroda 5.75
The data was collected from:

• www.advisorkhoj.com
• www.bseindia.com
• www.bajajfinservmarkets.in

BIBLIOGRAPHY
Literature review
Alfia thaha, D. K. (2017). Mutual Funds, Stocks and Banks: A Study on the Changing
Perspectives of Investments.
Bhuvaneshwari P, F. W. (2014). An evaluation on risk and return of mutual funds in india.
Gupta, S. (2022). Comparative analysis of mutual fund schemes- A study on top 5 midcap
equity funds.
Haralayya, D. B. (2022). Comparative Study on Performance Evaluation of Mutual Funds
with Reference.
Hassan Qamar, S. S. (n.d.). Mutual Fund Performance Prediction. Manipal.
Joy Das, P. S. (2018). PERFORMANCE OF COMMERCIAL BANKS IN CONVERTING
BANK DEPOSITS to mutual fund aum.
Mr. Kanwal Gurleen Singh, D. S. (n.d.). MUTUAL FUNDS: THE INDIAN SCENARIO.
punjab.
Ms. Arya S Babu, D. J. (2021). A study on analysis of factors affecting debt mutual fund
performance in india.
Mutuseshan, G. (2019). Mutual Fund Industry in India An analytical study of Various
Brands and Schemes - Study on Financial Performance and Customer preference.
Websites referred
www.bankbazaar.com
www.amfiindia.com
www.bajajfinservmarkets.in
www.advisorkhoj.com
mf.nipponindiaim.com
www.byjus.com
www.zacks.com
www.bseindia.com

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K.L.E.

Institute Guide Organization Guide

INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH

This is to certify that Ms Sneha Manjunath Shanbhag, Reg.No.P02BO21M0003

Institute Guide Director

Date:10/02/2023 Sneha Shanbhag

Date:10/02/20233 Sneha Shanbhag

Sl. No. Particulars Page No.

1 Executive Summary 1-4

2 Introduction to Industry 5-27

3 Introduction to Company 28-34

4 Introduction to the Study 35-50

5 Data Analysis 51-71

Sl. No. Title of Table Page No.

Calculation of risk and return of Nippon

7 Risks of selected debt mutual funds 66

8 Comparison of risks and returns 67

9 Returns of bank deposits 68

Sl. No. Title of Graph/Chart/Figure Page No.

1 Returns of selected debt mutual funds 65

2 Risks of selected debt mutual funds 66

3 Comparison of risks and returns 67

4 Returns of bank deposits 68

SBI dynamic bond direct plan growth State Bank of India

HDFC money market fund Bank of Baroda

Kotak dynamic bond Canara Bank

Nippon India money market fund Axis bank

Axis banking and PSU debt fund HDFC Bank

KLE Society’s Institute of Management Studies & Research, Hubli 1

KLE Society’s Institute of Management Studies & Research, Hubli 2

Need for the study

Scope of the study

Limitations of the study

KLE Society’s Institute of Management Studies & Research, Hubli 3

Secondary data: Refers to data collected by someone other

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INTRODUCTION TO THE INDUSTRY

Mutual fund industry

➢ Entry Of Public Sector (1987-1993)

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➢ Entry Private Sector Phase (1993-1996)

➢ Phase Of Consolidation (February 2003 – April 2014)

➢ Phase Of Steady Development And Growth (Since May 2014)

KLE Society’s Institute of Management Studies & Research, Hubli 6

KLE Society’s Institute of Management Studies & Research, Hubli 7

Classification of the Mutual Funds Industry in India

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➢ Tax saving funds

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KLE Society’s Institute of Management Studies & Research, Hubli 11

The primary objective of investing in debt funds is to gain a capital appreciation

➢ Money Market Funds

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Advantages Of Mutual Fund

Disadvantages Of Mutual Fund

▪ Fixed, guaranteed returns are not offered by mutual funds.

KLE Society’s Institute of Management Studies & Research, Hubli 13

Advantages of debt mutual fund

▪ Diversification: Investing in a variety of fixed-income securities through

Disadvantages of debt mutual fund

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