Assignment

SUBJECT – STRATEGIC ANALYSIS & PORTFOLIO MANAGEMENT

ASSIGNMENT ON DIFFERENT TYPES OF FUNDS

EQUITYEquity share capital, as a long-term source of finance, represents ownership capita/ securities and its owners- equity-holders. Equities are generally considered the riskier asset class over both bonds and cash, but historical returns have been higher as well. On a company's balance sheet, the amount of the funds contributed by the owners (the stockholders) plus the retained earnings (or losses). Also referred to as "shareholders’ equity". In terms of investment strategies, equity (stocks) is one of the principal asset classes. The other two are fixed-income (bonds) and cash/cash-equivalents. These are used in asset allocation planning to structure a desired risk and return profile for an investor's portfolio. Khan & Jain, http://www.investopedia.com

DEBTAn amount of money borrowed by one party from another. Many corporations/individuals use debt as a method for making large purchases that they could not afford under normal circumstances. A debt arrangement gives the borrowing party permission to borrow money under the condition that it is to be paid back at a later date, usually with interest. http://www.investopedia.com

BALANCED FUND•

A fund that combines a stock component, a bond component and, sometimes, a money market component, in a single portfolio. Generally, these hybrid funds stick to a relatively fixed mix of stocks and bonds that reflects either a moderate (higher equity component) or conservative (higher fixed-income component) orientation.

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A balanced fund is geared toward investors who are looking for a mixture of safety, income and modest capital appreciation. The amounts that such a mutual fund invests into each asset class usually must remain within a set minimum and maximum.

http://www.investopedia.com

DIFFERENCES BETWEEN DEBT, EQUITY & BALANCED FUNDEquity funds are buying shares of stock, which represents actual, fractional ownership of a company. In theory, you are entitled to a proportionate share of revenue, assets, etc. You generally make your money in these funds through the appreciation of the price of a share of ownership. Debt funds, buy bonds issued by these same companies or by government / municipal agencies. A bond is basically a loan to that company by investors, and as such, you don't generally have a claim on any assets or revenue. When the bond is paid off (the loan is repaid), you and the company part ways. You generally make money in a debt fund through the interest paid by the bonds (loans), but can also make (or lose) money as the bonds go up or down in value in response to things like the interest rates or a company's stability. A bond fund focused on government, A grade municipals, and A grade corporate bonds is pretty safe, but can still lose 10-20% value in a bad year. In a average year, it may put up a 5-8% return, and in an environment where rates are dropping, it can occasionally put up double digits. I'd generally avoid anything with the label "High Income", as it is buying junkier bonds. Equity funds vary so much as far as risk... there are actually more mutual funds out there then there are individual stocks.. A good large-company, growth / value fund will return 10-12% historically, but can also have years where it is down 20-30%. All in all, if you don't know what you are doing, you should pay for some advice. A good advisor will be happy to educate you as you invest. Aside from that, make sure you keep an eye on their annual management fees, a good fund that costs too much (more than 1.50%) is may not be worth it. Bond funds should cost even less. http://www.KenClarkCFP.com DIFFERENT TYPES OF MUTUAL FUND RETURN

IN CRORES

1. HDFC Top 200 2. HDFC Equity 3. HDFC MIP Long-term 4. Tata Pure Equity 5. Tata Index Nifty 6. Tata Index Nifty 7. Magnum Contra 8. Magnum Balanced 9. Magnum Multiplier Plus 10.Reliance MIP 11.Reliance Banking Retail 12.Reliance Diversified Power Sector Fund 13.DSPBR top 100 Equity 14.DSPBR Equity 15.DSPBR GSF Longer Duration 16.Kotak Bond Reular 17.Kotak 30 18.Kotak opportunities 19.Principal Child Benefit 20.Principal Index 21.Principal Personal Tax Saver 22.Sundaram BNP Paribas taxsaver 23.Sundaram BNP Paribas Select Focus Fund 24.Sundaram BNP Paribas Bond Saver 25.Franklin India Blue Chip Fund 26.Templeton IGSF PF 27.Franklin India Prima Plus 28.Birla GSF Long Term 29.Birla Frontline Equity

2338 2759.3 887.9 269.95 292.08 6.77 1,958.50 333.11 687.15 168.52 681.25 3809.57 1167.08 919.77 425.67 445.69 688.14 658.5 19.81 21.88 332.53

703.54 880.78 59.12 1642.87 32.68 1153.2 10.48 481.14

http://www.itrust.in/forum/mutual-funds/list-of-top-10-mutual-fundcompanies-in-india/2193.page

WHY SHUOULD ONE INVEST IN EQUITY FUNDS➢

The main one is that the investor has proportional share of the dividends generated by the company in which he bought his stock.

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Another advantage is the possibility to have a voting right at the shareholder's meetings that are celebrated each year.

➢ Capital appreciation (if share price increased when compared purchase price).

WHY SHOULD ONE INVEST IN DEBT✔

Since debt securities are backed up by big corporations, they assure a determined level of income for a determined period of time.

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Very useful for planning the future cash flow of any investor.

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If you do not know how secure a determined debt security is, then you can check the information provided by the experts.

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Another benefit is the wide spectrum of choices available. You can choose between medium and long term bonds that start at US$ 1000 per unit, with payments made monthly, semi annually or annually.

WHY SHOULD ON SHOULD INVEST IN BALANCED FUNDSA balanced fund is geared toward investors who are looking for a mixture of safety, income and modest capital appreciation.