Mutual Fund MBA project by NikunjHOT

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A
PROJECT REPORT
ON
“A study on top five tax saving schemes in Mutual Fund in India
from 2008-2012”
SUBMITTED TO
RASHTRASANT TUKADOJI MAHARAJ NAGPUR UNIVERSITY,
NAGPUR IN PARTIAL FULFILLMENT OF THE REQUIREMENT
FOR THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
SUBMITTED BY
MR. NIKUNJ B. SHENDE
UNDER THE GUIDANCE OF
PROF. RAHUL KAPALE
PRIYADARSHINI LOKMANYA TILAK INSTITUTE OF
MANAGEMENT STUDIES & RESEARCH
NAGPUR, 2012-2014

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Priyadarshini Lokmanya Tilak Institute of
Management Studies & Research,
Opp. Lata Mangeshkar Hospital, Digdoh Hills, Hingna Road,
Nagpur.
CERTIFICATE
This is to certify that the project entitled “A study on top five tax saving
schemes in Mutual Fund in India from 2008-2012” has been submitted
by Nikunj B. Shende, a student of fourth semester M.B.A in Financial
Management from Lokmanya Tilak Institute of Management Studies &
Research, Nagpur. This is a bonafide of the work done by her in the
session towards the fulfillment of the requirement for the award of
degree in Masters of Business Administration under the supervision&
guidance of Prof. RAHUL KAPALE and he has undergone the requisite
hours of practical prescribed by the University for the Project.
Prof. Rahul Kapale
(Project Guide) (Principal)

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CERTIFICATE OF STUDENT
Priyadarshini Lokmanya Tilak Institute of management Studies
& Research,
Opp. Lata Mangeshkar Hospital, Digdoh Hills, Hingna Road,
Nagpur.
This is to certify that the project report titled “A study on top five tax
saving schemes in Mutual Fund in India from 2008-2012” that has been
submitted by me in the partial fulfillment of M.B.A is bonafide record
exclusively carried out by me.
Place: NAGPUR Mr. NIKUNJ B. SHEND
Date:

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ACKNOWLEDGEMENT
Since the beginning of this work, I have been helped & assisted by
many people. Though it is my capacity, to mention all of it is extremely
important for me to acknowledge some of them. I express deep sense of
gratitude for my guide Prof. Rahul Kapale for this valuable guidance
through tout this work. I am also grateful to, Principal of Priyadarshini
Lokmanya Tilak Institute of Management Studies & Research, Nagpur.
Place: NAGPUR Mr. NIKUNJ B.SHENDE
Date:

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DECLARATION
I hereby declare that this project wok entitled “A study on top five tax
saving schemes in Mutual Fund in India from 2008-2012” is result of
my own study under the guidance of Prof. Rahul Kapale Professor of
Priyadarshini Lokmanya Tilak Institute of Management Studies &
Research, Nagpur during Academic year 2012-2014.I further declare
that this project work has not been submitted to any other University or
this university for the award of the degree.
Place: NAGPUR Mr. NIKUNJ B. SHENDE
Date:

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TABLE OF CONTENTS
Sr no. Particulars Page no.
1 Introduction to topic 8
2 Introduction to companies 21
3 Objectives of study 36
4 Scope of study 38
5 Limitations of study 40
6 Research Methodology 42
7 Data analysis & Interpretation 47
8 Conclusions & Findings 55
9 Suggestions & recommendations 57
Bibliography 59

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LIST OF TABLES
Table no. Title of the Tables Page no.
1.1 Standard Deviation for HDFC Tax Saver. 48
1.2 Standard Deviation for Franklin India Tax
Shield.
49
1.3 Standard Deviation for DSP Blackrock Tax
Saver.
50
1.4 Standard Deviation for SBI Magnum Tax
Gain.
51
1.5 Standard Deviation for Reliance Tax Saving
Fund.
52
1.6 Return vs. Risk estimated of selected tax
saving schemes.
53

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Chapter [1] :- Introduction to
Topic

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Chapter [1]: - Introduction to Topic
INTRODUCTION
The Indian financial system based on four basic components like Financial Market, Financial
Institutions, Financial Service, Financial Instruments. All are play important role for smooth
activities for the transfer of the funds and allocation of the funds. The main aim of the Indian
financial system is that providing the efficiently services to the capital market. The Indian capital
market has been increasing tremendously during the second generation reforms. The first
generation reforms started in 1991 the concept of LPG. (Liberalization, privatization,
Globalization).
Then after 1997 second generation reforms was started, still the it‟s going on, its include reforms
of industrial investment, reforms of fiscal policy, reforms of ex- imp policy, reforms of public
sector, reforms of financial sector, reforms of foreign investment through the institutional
investors, reforms banking sectors. The economic development model adopted by India in the
post independence era has been characterized by mixed economy with the public sector playing a
dominating role and the activities in private industrial sector control measures emaciated form
time to time. The last two decades have been a phenomenal expansion in the geographical
coverage and the financial spread of our financial system.
The spared of the banking system has been a major factor in promoting financial intermediation
in the economy and in the growth of financial savings with progressive liberalization of
economic policies, there has been a rapid growth of capital market, money market and financial
services industry including merchant banking, leasing and venture capital, leasing, hire
purchasing. Consistent with the growth of financial sector and second generation reforms its
need to fruition of the financial sector. It's also need to providing the efficient service to the
investor mostly if the investors are supply small amount, in that point of view the mutual fund
play vital for better service to the small investors. The main vision for the analysis for this study
is to scrutinize the performance of five star rated mutual funds, given the weight of risk, return,
and assets under management, net assets value, book value and price earnings ratio.

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Concept of Mutual Fund:
Mutual fund is the pool of the money, based on the trust who invests the savings of a number of
investors who shares a common financial goal, like the capital appreciation and dividend
earning. The money thus collect is then invested in capital market instruments such as shares,
debenture, and foreign market. Investors invest money and get the units as per the unit value
which we called as NAV (net assets value). Mutual fund is the most suitable investment for the
common man as it offers an opportunity to invest in diversified portfolio management, good
research team, professionally managed Indian stock as well as the foreign market, the main aim
of the fund manager is to taking the scrip that have under value and future will rising, then fund
manager sell out the stock. Fund manager concentration on risk – return trade off, where
minimize the risk and maximize the return through diversification of the portfolio. The most
common features of the mutual fund unit are low cost.
Mutual funds concept can be well understood with the following diagram
Figure: 1.1 Concept of mutual fund
I
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M
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D
SC
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M
ES
M
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FL
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INVEST THEIR MONEY INVEST IN VARIETY OF
STOCKS/BONDS
PROFIT/LOSS FROM
PORTFOLIO
INVESTMENT
PROFIT/LOSS FROM
INDIVIDUAL INVESTMENT

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Growth of Mutual Fund Industry
The history of mutual funds dates support to 19th century when it was introduced in Europe, in
particular, Great Britain. Robert Fleming set up in 1868 the first investment trust called Foreign
and colonial investment trust which promised to manage the finances of the moneyed classes of
Scotland by scattering the investment over a number of different stocks. This investment trust
and other investment trusts which were afterward set up in Britain and the U.S., resembled
today‟s close – ended mutual funds. The first mutual fund in the U.S., Massachusetts investor‟s
trust, was set up in March 1924. This was the open – ended mutual fund.
The stock market crash in 1929, the Great Depression, and the outbreak of the Second World
War slackened the pace of growth of the mutual fund industry. Innovations in products and
services increased the popularity of mutual funds in the 1950s and 1960s. The first international
stock mutual fund was introduced in the US in 1940. In 1976, the first tax – exempt municipal
bond funds emerged and in 1979, the first money market mutual funds were created. The latest
additions are the international bond fund in 1986 arm funds in 1990. This industry witnessed
substantial growth in the eighties and nineties when there was a significant increase in the
number of mutual funds, schemes, assets, and shareholders. In the US the mutual fund industry
registered s ten – fold growth the eighties. Since 1996, mutual fund assets have exceeds bank
deposits. The mutual fund industry and the banking industry virtually rival each other in size.
ORGANISATION OF A MUTUAL FUND
There are many entities involved and the diagram below illustrates the organizational set up of a
mutual fund
Figure:1.2 Organization structure of mutual fund

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Mutual funds have a unique structure not shared with other entities such as companies of firms.
It is important for employees & agents to be aware of the special nature of this structure, because
it determines the rights & responsibilities of the fund‟s constituents viz., sponsors, trustees,
custodians, transfer agents & of course, the fund & the Asset Management Company(AMC) the
legal structure also drives the inter-relationships between these constituents.
The structure of the mutual fund India is governed by the SEBI (Mutual Funds) regulations,
1996. These regulations make it mandatory for mutual funds to have a structure of sponsor,
trustee, AMC, custodian. The sponsor is the promoter of the mutual fund,& appoints the trustees.
The trustees are responsible to the investors in the mutual fund, & appoint the AMC for
managing the investment portfolio. The AMC is the business face of the mutual fund, as it
manages all affairs of the mutual fund. The mutual fund & the AMC have to be registered with
SEBI. Custodian, who is also registered with SEBI, holds the securities of various schemes of the
fund in its custody.
 Sponsor:- The sponsor is the promoter of the mutual fund. The sponsor establishes the
Mutual fund & registers the same with SEBI. He appoints the trustees, Custodians & the
AMC with prior approval of SEBI, & in accordance with SEBI regulations. He must have
at least five year track record of business interest in the financial markets. Sponsor must
have been profit making in at least three of the above five years. He must contribute at
least 40% of the capital of the AMC.
 Trustees:- The Mutual Fund may be managed by a Board of trustees a of individuals, or a
trust company – a corporate body. Most of the funds in India are managed by board of
trustees. While the board of trustees is governed by the provisions of the Indian trust act,
where the trustee is the corporate body, it would also be required to comply with the
provisions of the companies act, 1956. the board of trustee company, as an independent
body, act as protector of the unit-holders interest. The trustees don‟t directly manage the
portfolio of securities. For this specialist function, they appoint an AMC. They ensure that
the fund is managed by AMC as per the defined objectives & in accordance with the trust
deed & SEBI regulations. The trust is created through a document called the trust deed

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i.e., executed by the fund sponsor in favor of the trustees. The trust deed is required to be
stamped as registered under the provision of the Indian registration act & registered with
SEBI. The trustees begin the primary guardians of the unit-holders funds & assets, a
trustee has to be a person of high repute & integrity.
 Asset Management Company (AMC):- The role of an Asset management companies is
to act as the investment manager of the trust. They are the ones who manage money of
investors. An AMC takes decisions, compensates investors through dividends, maintains
proper accounting & information for pricing of units, calculates the NAV, & provides
information on listed schemes. It also exercises due diligence on investments & submits
quarterly reports to the trustees. AMCs have been set up in various countries
internationally as an answer to the global problem of bad loans. Bad loans are essentially
of two types: bad loans generated out of the usual banking operations or bad lending, and
bad loans which emanate out of a systematic banking crisis. It is in the latter case that
banking regulators or governments try to bail out the banking system of a systematic
accumulation of bad loans which acts as a drag on their liquidity, balance sheets and
generally the health of banking. So, the idea of AMCs or ARCs is not to bail out banks,
but to bail out the banking system itself.
Types of AMCs in Indian Context
The following are the various types of AMCs we have in India.
 AMCs owned by banks.
 AMCs owned by financial institutions.
 AMCs owned by Indian private sector companies.
 AMCs owned by foreign institutional investors.
 AMCs owned by Indian & foreign sponsors.

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 Custodian:- Often an independent organization, it takes custody all securities & other
assets of mutual fund. Its responsibilities include receipt & delivery of securities
collecting income-distributing dividends, safekeeping of the unit & segregating assets &
settlements between schemes. Mutual fund is managed either trust company board of
trustees. Board of trustees & trust are governed by provisions of Indian trust act. If trustee
is a company, it is also subject Indian Company Act. Trustees appoint AMC in
consultation with the sponsors & according to SEBI regulation. All mutual fund schemes
floated by AMC have to be approved by trustees. Trustees review & ensure that net worth
of the company is according to stipulated norms, every quarter. Though the trust is the
mutual fund, the AMC is its operational face. The AMC is the first functionary to be
appointed, & is involved in appointment of all other functionaries. The AMC structures
the mutual fund products, markets them & mobilizes fund, manages the funds & services
to the investors. A draft offer document is to be prepared at the time of launching the fund.
Typically, it pre-specifies investment objectives of the fund, the risk associated, the cost
involved in the process & the broad rules to enter & to exit from the fund & other areas of
operation. In India as in most countries, these sponsors need approval from a regulator,
SEBI in our case. SEBI looks at track records of the sponsor & its financial strength
granting approval to the fund for commencing operations. A sponsor then hires an asset
management company to invest the funds according to the investment objective. It also
hires another entity to be the custodian of the assets of the fund & perhaps the third one to
handle registry work for the unit holder of the fund.
 Registrars & Transfer Agent (R & T Agent):- The Registrars & Transfer Agents(R & T
Agents) are responsible for the investor servicing function, as they maintain the records of
investors in mutual funds. They process investor applications; record details provide by
the investors on application forms; send out to investors details regarding their investment
in the mutual fund; send out periodical information on the performance of the mutual
fund; process dividend payout to investor; incorporate changes in information as
communicated by investors; & keep the investor record up-to-date, by recording new
investors & removing investors who have withdrawn their funds.

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TAX PLANNING AND MUTUAL FUND
Investors in India have option for the tax-saving mutual fund schemes for the simple reason that
it helps them to save money. The tax-saving mutual funds or the equity-linked savings schemes
(ELSS) receive certain tax exemptions under Section 88 of the Income Tax Act. That is one of
the reasons why the investors in India add the tax-saving mutual fund schemes to their portfolio.
The tax-saving mutual fund schemes are one of the important types of mutual funds in India that
investors can option for. There are several companies in India that offer tax saving mutual fund
schemes in the country.
While planning our investments we spend a considerable amount of time evaluating various
options and determining which suits us the best. But when it comes to planning out investments
from a tax saving perspective, more often than not, we simply go the traditional way and do the
exact same thing that we did in the earlier years. Well, in case you were not aware the guidelines
governing such investments are a lot different this year and lethargy on your part to rework your
investment plan could cost you dear.
TAX SAVING SCHEME
Equity Linked Saving Schemes (ELSS): Equity Linked Saving Scheme (ELSS) is also a type
of mutual fund and falls under the Equity Mutual Fund category. As the name indicates, ELSS
mutual fund invests major portion of its corpus into equity and equity related instruments. But
there are some distinct features which makes ELSS plans different from other equity mutual
funds.
Investments made in ELSS plans are eligible for deduction from the taxable income under
Section 80C of the Income Tax Act. There is no limit for investments in ELSS plans, but
investments of up to Rs 1,00,000 qualify for income tax benefits. Investments made in normal
mutual funds (other than ELSS plans) do not qualify for income tax deduction.

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Features of an ELSS Plan
 ELSS is an equity linked tax saving investment instrument.
 Money collected under ELSS plan is mainly invested in equity and equity related
instruments.
 This financial product is more suited to those investors who are willing to take high risk
and looking for high returns.
 There is no upper limit on investments that can be made in ELSS. However investments
upto INR 1,00,000 made in ELSS in a financial year qualify for deduction from taxable
income under Section 80C of the Income Tax Act.
 ELSS comes with a 3 year lock in period.
 Long term capital gains earned on investments from ELSS are tax free.
 Also dividends earned from ELSS plan are tax free in the hands of the investor
SWOT ANALYSIS
SWOT Analysis presents the information about external and internal environment of mutual fund
in structured from where by key external opportunity and threats can be compared systematically
with internal capabilities and weakness. The basic objectives of SWOT analysis is provide a
framework to reflect on the industry capabilities to avail opportunities or to overcome threats
presented by environment.

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Strength
 Full benefit of diversification
 Tax benefit
 Transparancy & flexibility
 Expert investment management
Weakness
 Lesser return compared to equity
 Poor technology & service level
 Lack of proper marketing
Opportunity
 Government policies & Tax concession
 Setting up a specific fund
 Technology development
Threats
 Arrival of more private & foreign
players
 Introduction of more debt instrument in
market.
ADVANTAGES OF INVESTING IN MUTUAL FUNDS
There are several that can be attributed to the growing popularities and suitability of mutual
funds as an investment vehicle especially for retail investors.
a) Professional management: Mutual funds provide the services of experienced and skilled
professionals, backed by a dedicated investment research team that analysis the
performance and prospects of companies and selects suitable investments to achieve the
objectives of the scheme.
b) Diversification: Mutual funds invest in a number of companies across a broad cross-
section of industries and sectors. This diversification reduces the risk because seldom do
all stocks decline at the sane time and in the same proportion. You achieve this
diversification through a mutual fund with far less money than you can do on your own.
c) Convenient administration: Investing in a mutual fund reduces paperwork and helps
you avoid many problems such as bad deliveries, delayed payment and follow up with

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brokers and companies. Mutual funds save your time and make investing easy and
convenient.
d) Return potential: Over a medium to long term, mutual funds have the potential to
provide a higher return as they invest in a diversified basket of selected securities.
e) Low costs: Mutual funds are a relatively less expensive way to invest compared to
directly investing in the capital markets because the benefits of scale in brokerage,
custodial and other fees translate into lower costs for investors.
f) Liquidity: In open ended schemes, the investors get the money back promptly at net
asset value related prices from the mutual fund. In closed end schemes, the units can be
sold on a stock exchange at the prevailing market price or the investor can avail of the
facility of direct repurchase at NAV related prices by mutual fund.
g) Transparency: You get regular information on the value of your investment in addition
to disclosure on the specific investments made by your scheme, the proportion invested in
each class of assets and the fund manager‟s investment strategy and outlook.
h) Flexibility: Through features such as regular investment plans, regular withdrawal plans
and dividend reinvestment plans, you can systematically invest or withdraw funds
according to your needs and convenience.
i) Affordability: Investors individually may lack sufficient funds to invest in high-grade
stocks. A mutual fund because of its large corpus allows even a small investor to take the
benefit of its investment strategy.
j) Choice of schemes: Mutual funds offer a family of schemes to suit your varying needs
over a lifetime.
k) Safety: Mutual Fund industry is part of a well-regulated investment environment where
the interests of the investors are protected by the regulator. All funds are registered with
SEBI and complete transparency is forced.

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DISADVANTAGES OF INVESTING IN MUTUAL FUNDS
 No Guarantees :- No investment is risk free. If the entire stock market declines in value,
the value of mutual fund shares will go down as well, no matter how balanced the
portfolio.
 Dilution :- Although diversification reduces the amount of risk involved in investing in
mutual funds, it can also be a disadvantage due to dilution.
 Fees and Expenses :- Most mutual funds charge management and operating fees that pay
for the fund‟s management expenses (usually around 1.0% to 1.5% per year for actively
managed funds). In addition, some mutual funds charge high sales commissions, and
redemption fees.
 Management risk :- When we invest in a mutual fund, we depend on the fund's
manager to make the right decisions regarding the fund's portfolio. If the manager does
not perform as well as we had hoped, we might not make as much money on our
investment as we expected.
 Taxes :- During a typical year, most actively managed mutual funds sell anywhere from
20 to 70 percent of the securities in their portfolios. If our fund makes a profit on its sales,
we will pay taxes on the income we receive, even if we reinvest the money made.
Recent Market Trends
India is at the first stage of a revolution that has already peaked in the U.S. The U.S.
boasts of an Asset base that is much higher than its bank deposits. In India, mutual fund
assets are not even 10% of the bank deposits, but this trend is beginning to change.
Recent figures indicate that in the first quarter of the current fiscal year mutual fund
assets went up by 115% whereas bank deposits rose by only 17%. (Source: Thinktank,
the Financial Express September, 2012).

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Banks v/s Mutual fund
Characteristics Banks Mutual Fund
Returns Low Better
Network High penetration Low but improving
Administrative exp. High Low
Liquidity At a cost Better
Risk Low Moderate
Quality of assets Not transparent Transparent
Interest calculation Minimum balance between
10th
& 30th
of every month
Everyday
Investment options Less More

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Chapter [2] :- Introduction to
Companies

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Chapter [2]: - Introduction to Companies
1] HDFC ASSET MANAGEMENT COMPANY LIMITED.
HDFC Asset Management Company Ltd (AMC) was
incorporated under the Companies Act, 1956, on December 10, 1999, and was approved to act as
an Asset Management Company for the HDFC Mutual Fund by SEBI vide its letter dated July 3,
2000.
HDFC Mutual Fund is one of the largest mutual funds and well-established fund house in the
country with consistent fund performance across categories since its incorporation on December
10, 1999. While our past experience does make us a veteran, but when it comes to investments,
we have never believed that the experience is enough.
Investment Philosophy
The single most important factor that drives HDFC Mutual Fund is its belief to give the investor
the chance to profitably invest in the financial market, without constantly worrying about the
market swings. To realize this belief, HDFC Mutual Fund has set up the infrastructure required
to conduct all the fundamental research and back it up with effective analysis. Our strong
emphasis on managing and controlling portfolio risk avoids chasing the latest "fads" and trends.
In terms of the Investment Management Agreement, the Trustee has appointed the HDFC Asset
Management Company Limited to manage the Mutual Fund. The paid up capital of the AMC is
Rs. 25.169 core.
Zurich Insurance Company (ZIC), the Sponsor of Zurich India Mutual Fund, following a review
of its overall strategy, had decided to divest its Asset Management business in India. The AMC
had entered into an agreement with ZIC to acquire the said business, subject to necessary
regulatory approvals.

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On obtaining the regulatory approvals, the following Schemes of Zurich India Mutual
Fund have migrated to HDFC Mutual Fund on June 19, 2003. These Schemes have been
renamed as follows:
Former Name New Name
Zurich India Equity Fund HDFC Equity Fund
Zurich India Prudence Fund HDFC Prudence Fund
Zurich India Capital Builder Fund HDFC Capital Builder Fund
Zurich India TaxSaver Fund HDFC TaxSaver
Zurich India Top 200 Fund HDFC Top 200 Fund
Zurich India High Interest Fund HDFC High Interest Fund
Zurich India Liquidity Fund HDFC Cash Management Fund
Zurich India Sovereign Gilt Fund HDFC Sovereign Gilt Fund*
The equity shareholding pattern of the AMC as on September 30, 2013 is as follows :
Particulars % of the paid up equity
capital
Housing Development Finance Corporation Limited 59.81
Standard Life Investments Limited 39.87
Other Shareholders (shares issued on exercise of Stock
Options)
0.32
Zurich Insurance Company (ZIC), the Sponsor of Zurich India Mutual Fund, following a review
of its overall strategy, had decided to divest its Asset Management business in India. The AMC

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had entered into an agreement with ZIC to acquire the said business, subject to necessary
regulatory approvals.
*HDFC Sovereign Gilt Fund has been wound up in March 2006
The AMC is also providing portfolio management / advisory services and such activities are not
in conflict with the activities of the Mutual Fund. The AMC has renewed its registration from
SEBI vide Registration No. - PM / INP000000506 dated February 12, 2013 to act as a Portfolio
Manager under the SEBI (Portfolio Managers) Regulations, 1993. The Certificate of Registration
is valid from January 1, 2013 to December 31, 2015.
AWARDS & RECOGNITION
 ICRA Mutual Fund Awards 2012
 Bloomberg UTV Financial Leadership Awards, 2012
 Outlook Money Awards 2011
 CNBC-TV18-CRISIL Mutual Fund Awards 2012
HDFC TaxSaver (ELSS)
The nature of the scheme is open ended equity linked savings (ELSS) scheme with a
lock-in period of 3 years. It will be comes in market at March 31, 1996. The minimum
application amount is for new & existing investors Rs.500 and in multiples of Rs. 500
thereafter.

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2] FRANKLIN TEMPLETON MUTUAL FUND.
FTMF has been constituted as a Trust on January 4,
1996 in accordance with the provisions of the Indian Trusts Act, 1882 and the Deed of Trust is
registered under the Indian Registration Act, 1908. FTMF has been sponsored by Templeton
International Inc. (liability restricted to the seed corpus of Rs.l lakh) with Franklin Templeton
Trustee Services Pvt. Ltd. (“Trustee”) as the Trustee. The Trustee has entered into an Investment
Management Agreement dated January 5, 1996 with Franklin Templeton Asset Management
(India) Pvt. Ltd. (“AMC”) appointing the AMC as the Investment Manager for all the schemes of
FTMF. FTMF is registered with SEBI on February 19, 1996.
Templeton International Inc. is a part of the Franklin Templeton Group, which is one of the
largest Investment Management Company with US$683.5 bln (approximately Rs.3,856,478
core) in assets under management as on May 31, 2012 and around 26 million Shareholder
Accounts. Franklin Templeton has offices in over 30 countries including the United States of
America, Bahamas, Canada, Argentina, France, Germany, Italy, Luxembourg, Poland, Russia,
the United Kingdom, Hong Kong, Singapore, Korea, India, China, Australia and South Africa.
Review of activities of Franklin Templeton Mutual Fund: During the year under review, the
Mutual Fund continued to focus on launching meaningful products with investment objectives
that are relevant to investors. The Mutual Fund launched Templeton India Corporate Bond
Opportunities Fund, an open end debt fund investing in corporate bonds, mobilizing over Rs.250
core, FT India Feeder - Franklin U.S. Opportunities Fund, a fund of funds scheme investing in
the units of Franklin U. S. Opportunities Fund, an overseas fund that invests primarily in U. S.
securities, mobilizing over Rs.100 core and Franklin Templeton Fixed Tenure Fund Series XVI
mobilizing over Rs.68 core. As a part of product rationalization process to make the offerings
more meaningful and easy to understand for investors and to reduce product overlap between
similar schemes, few schemes / plans were merged during the year. The Liquid Plan of

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Templeton India Treasury Management Account (TITMA) was merged into Regular Plan of
TITMA effective September 4, 2011. Franklin FMCG Fund and Franklin Pharma Fund merged
into Franklin India Prima Plus effective September 9, 2011. Franklin India Index Tax Fund
(FITF) merged into Franklin India Index Fund – NSE Nifty Plan effective September 9, 2011.
Franklin India Index Tax Fund (FITF) was launched in February 2001 as open end passively
managed ELSS scheme. The scheme invested in companies, whose securities are part of the S&P
CNX Nifty, with the aim to generate returns commensurate with S&P CNX Nifty. As part of our
product rationalization process and with a view to reduce overlap between similar schemes, it
was decided to merge FITF with the Growth Option under the Nifty Plan of Franklin India Index
Fund. The effective date of the merger was September 9, 2011. As on March 31, 2012, the
Mutual Fund served more than 20 lakh active investors through its 34 branches and 105 offices
of our collection partners across India.
Frankline India Tax Sheild
The nature of the scheme is open ended equity linked savings (ELSS) scheme with a lock-in
period of 3 years. It will be comes in market at April 10 1999. The minimum application amount
is for new & existing investors Rs.500 and in multiples of Rs. 500 thereafter.
Mutual funds
Franklin Templeton has over 200 different open-ended mutual funds and 7 closed-end funds in
the fund family. Included in these are 36 state and federal tax free income funds, an area of
investment pioneered by Franklin.
Prominent funds in the fund family include the world's largest equity fund Templeton Growth
Fund, Inc. (opened 1954, $29.5bn assets), the Mutual Shares fund (opened 1949, $7.9bn assets),
and the Mutual Discovery Fund (opened $1992, 7.6bn assets) and the Templeton Growth (Euro)
Fund A (acc) ($6.1bn assets).

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The Franklin Income Fund (FKINX, assets $33.6bn) is a mutual fund in Morningstar's
"conservative allocation" category and "large/value" style box. The fund was created in 1948 and
has paid uninterrupted dividends for 60 years. The Franklin Income Fund is constructed
primarily of dividend-paying stocks and bonds (2%).

28 | P a g e
3] DSP BLACK ROCK INVESTMENT MANAGEMENT LIMITED.
DSP BlackRock Investment Managers Pvt. Ltd. is the
investment manager to DSP BlackRock Mutual Fund. The philosophy of DSP BlackRock
Investment Managers Pvt. Ltd. has been grounded in the belief that experienced investment
professionals, using a disciplined process and sophisticated analytical tools, can consistently add
value to client portfolios.
Joint Venture between the DSP Group & BlackRock Inc
 DSP Group holds 60 % stake and BlackRock holds 40 % stake in DSP BlackRock
Investment Managers Private Limited
DSP Group
 The Kothari family of D. S. Purbhoodas and Co. is the promoter and owner of DSP
Group
 Track record of over 145 years, one of the oldest financial services firms in India
 One of the founding members and first directors of the Bombay Stock Exchange (BSE)
 Each generation of the DSP Group has seen a partner serving as President of the Bombay
Stock Exchange, bearing testimony to the long-standing position DSP Group occupies in
the Indian financial arena
 Mr. Hemendra Kothari, Chairman of DSP BlackRock Investment Managers, has an
experience of over 40 years in the financial services industry, and also served the
Bombay Stock Exchange as President in 1991-92
BlackRock Inc
 Largest Asset Management company in the world. Established in 1988, BlackRock is a
Public Company (NYSE:BLK)

29 | P a g e
 BlackRock‟s assets under management is USD 3.67 trillion as of September 30, 2012
 Global firm with offices in 26 countries across the world
 One of India‟s leading asset management companies managing / advising total assets of
INR 39,520 crores / USD 7.31 billion as of October 31, 2012
 Joint Venture between the DSP Group and BlackRock, Inc., which is the largest asset
management company in the world
 Commenced operations in 1997
 Proven Performance track record
 Dominance in equity assets under management / non binding advice*
Business activities
 Domestic Mutual Fund business
 Investment Advisory Services to offshore Funds

30 | P a g e
4] SBI FUNDS MANAGEMENT LIMITED (SBIFM).
SBI Funds Management Ltd. is the investment manager
of SBI Mutual Fund. SBI Mutual Fund has been constituted as a trust, sponsored by State Bank
India. Today the Fund has an investor base of over 2.8 million spread over 23 schemes. With a
large network of collecting branches and investor service centers, SBI Mutual Fund constantly
endeavors to get closer to its growing family of investors.
SBI Mutual Fund (SBI MF) is one of the largest mutual funds in the country with an investor
base of over 4.6 million. With over 20 years of rich experience in fund management, SBI MF
brings forward its expertise in consistently delivering value to its investors.
Proven Skills in wealth generation:
SBI Mutual Fund is India's largest bank sponsored mutual fund and has an enviable track record
in judicious investments and consistent wealth creation. The fund traces its lineage to SBI -
India's largest banking enterprise. The institution has grown immensely since its inception and
today it is India's largest bank, patronized by over 80% of the top corporate houses of the
country. SBI Mutual Fund is a joint venture between the State Bank of India and Society General
Asset Management, one of the world's leading fund management companies that manages over
US$ 500 Billion worldwide.
Exploiting expertise, compounding growth:
In twenty years of operation, the fund has launched 38 schemes and successfully redeemed
fifteen of them. In the process it has rewarded it's investors handsomely with consistently high
returns A total of over 5.4 million investors have reposed their faith in the wealth generation

31 | P a g e
expertise of the Mutual Fund. Schemes of the Mutual fund have consistently outperformed
benchmark indices and have emerged as the preferred investment for millions of investors and
HNI‟s. Today, the fund manages over Rs. 51,461 cores of assets and has a diverse profile of
investors actively parking their investments across 36 active schemes. The fund serves this vast
family of investors by reaching out to them through network of over 130 points of acceptance, 28
investor service centers, 46 investor service desks and 56 district organizers.
SBI Mutual is the first bank-sponsored fund to launch an offshore fund – Resurgent India
Opportunities Fund. Growth through innovation and stable investment policies is the SBI MF
credo.
Currently the SBI Mutual Fund offers 177 schemes in with different investment objective
and needs, as follows.
SBI mutual fund schemes offers
No. of schemes including options 177
Equity Schemes 36
Debt Schemes 115
Short term debt Schemes 11
Equity & Debt 3
Money Market 0
Gilt Fund 12
SBI Mutual fund is India‟s largest bank sponsored mutual fund and has an enviable track
record in judicious investments and consistent wealth creation. The fund traces
its lineage to SBI India‟s largest banking enterprise. The institution has grown immensely
since its inception and today it is India‟s largest bank patronized by over 80% of the top
corporate houses of the country.
Started in July 1987, the fund has launched 67 schemes and successfully redeemed 15 schemes.
In the process, it has rewarded its investors handsomely with consistently high returns. A total of
over 3.5 million investors have reposed their faith in the wealth generation expertise of the

32 | P a g e
mutual fund. Schemes of the mutual fund have consistently outperformed benchmarks indices
and have emerged as the preferred investment for the millions of investors.
Today the fund manages Rs.29492.9685 core as on Mar 31, 2012 of assets and has diversified
profile of investors actively parking their investments across 37 active schemes. The fund serves
this vast family of investors by reaching out to them through network of 100 collection branches,
26 investor service centers, 28 investor service desks, and 52 district organizers.
SBI Mutual fund is the first bank sponsored fund to launch an off-shore fund called Resurgent
India Opportunity Fund Growth through innovation and stable investment policies is the SBI
mutual fund.
SBI Magnum Tax Gain (ELSS)
The nature of the scheme is open ended equity linked savings (ELSS) scheme with a lock-in
period of 3 years. It will be comes in market at 1996. The minimum application amount is for
new & existing investors Rs.500 and in multiples of Rs. 500 thereafter.

33 | P a g e
5] RELIANCEMUTUAL FUND.
Reliance Mutual Fund ('RMF') is one of India‟s leading
Mutual Funds, with Average Assets under Management (AUM) of Rs. 90,636 Cores and an
investor count of over 58.42 and 64.53 Lakh folios.
Reliance Mutual Fund, a part of the Reliance Group, is one of the fastest growing mutual funds
in India. RMF offers investors a well-rounded portfolio of products to meet varying investor
requirements and has presence in 179 cities across the country. Reliance Mutual Fund constantly
endeavors to launch innovative products and customer service initiatives to increase value to
investors. Reliance Capital Asset Management Limited („RCAM‟) is the asset manager of
Reliance Mutual Fund. RCAM is a subsidiary of Reliance Capital Limited (RCL). Presently,
RCL holds 65.23% of its total issued and paid-up equity share capital and the balance of its
issued and paid up equity share capital is held by other shareholders which includes Nippon Life
Insurance Company (“NLI”), holding 26% of RCAM‟s total issued and paid up equity share
capital. NLI acquired the said 26% share holding in RCAM on August 17, 2012.
Reliance Capital Ltd. is one of India‟s leading and fastest growing private sector financial
services companies, and ranks among the top 3 private sector financial services and banking
companies, in terms of net worth. Reliance Capital Ltd. has interests in asset management, life
and general insurance, private equity and proprietary investments, stock broking and other
financial services.
Reliance Mutual Fund (RMF) was initially set up as a Trust in accordance with the provisions of
the Indian Trust Act, 1882 by Reliance Capital Limited acting as a Settler /Sponsor, vide a Trust
Deed dated April 25, 1995 (the “Original Trust Deed”).The Original Trust Deed was duly
registered under the Indian Registration Act, 1908. The Original Trust Deed was subsequently
amended from time to time. In order to consolidate all amendments to the Original Trust Deed in

34 | P a g e
one document, an Amended and Restated Trust Deed was executed on March 15, 2011 (the
“Amended and Restated Trust Deed”). The Amended and Restated Trust Deed was subsequently
registered under the Indian Registration Act, 1908 and the Amended and Restated Trust Deed
was duly filed with SEBI. Reliance Capital Trustee Co. Limited entered into an Investment
Management Agreement dated May 12, 1995 with Reliance Capital Asset Management Ltd.
(RCAM) to function as the Investment Manager for all the Schemes of RMF.
Reliance Mutual Fund, a part of the Reliance Anil Dhirubhai Ambani Group is the No. 1 Mutual
Fund in India. Reliance Mutual Fund offers investors a well rounded portfolio of products to
meet varying investor requirements. Reliance Mutual Fund has a presence in over 100 cities
across the country, an investor base of over 3.9 million and manages assets over Rs. 67,598
Cores as on August 31, 2007. Reliance Mutual Fund constantly endeavors to launch innovative
products and customer service initiatives to increase value to investors.
Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management Ltd.,a
wholly owned subsidiary of Reliance Capital Ltd. Reliance Capital Ltd. is one of India‟s leading
and fastest growing private sector financial services companies, and ranks among the top 3
private sector financial services and banking companies, in terms of net worth. Reliance Capital
Ltd. has interests in asset management and mutual funds, life and general insurance, private
equity and proprietary investments, stock broking and other financial services.
This groupdominates this key areain the financialsector..This megabusiness houses show that it
hasassetsunder management ofRs. 90,938 crore(US$ 22.73 billion) andan investor base of
over6.6 million. Reliance‟s mutual fundschemes are managed byReliance
CapitalAssetManagement LimitedRCAM), a subsidiary of Reliance Capital Limited,which holds
93.37% ofthe paid-up capitalof RCAM.The company notchedup a healthygrowth ofRs. 16,354
crore(US$ 4.09 billion)in assets under management in February2008 and helped propelthe
totalindustry-wideAUM to Rs. 565,459 crore (US$ 141.36 billion)(Source:
indiainvestments.com). A sharp rise infixedmaturity plans (FMPs) and collection ofRs. 7000
crore(US$ 1.75 billion) through newfund offers (NFOs) created this surge. In AUrankings,
Reliance continues to be inthenumber one spot.

35 | P a g e
The Anil Dhirubhai Ambani Group owns Reliance; they are the fastest growing investment
company in India so far. Tomeet the erratic demand of the financial market, RelianceMutual
Fund designed a distinct portfolio that is sure to please potential investors. Reliance Capital
AssetManagement Limited manages RMF.

36 | P a g e
CHAPTER [3] :- OBJECTIVES OF STUDY

37 | P a g e
CHAPTER [3]: - OBJECTIVES OF STUDY
The main objective of the study is to make investors aware of performance and provide
information on the comparison of tax saving funds of selected asset management companies. The
specific objectives are:
 To understand the organisation of mutual fund industry.
 To compare the performance of selected tax saving schemes in comparison with standard
deviation.
 To offer suggestions based on the findings arrived from the study.

38 | P a g e
CHAPTER [4] :- SCOPE OF STUDY

39 | P a g e
CHAPTER [4] :- SCOPE OF STUDY
The study is all about understanding the customer‟s perception to the tax benefit in mutual fund.
The purpose of this study of performance evaluation of tax saving mutual funds by taking five
selected companies which are HDFC, Franklin Templeton,DSP BlackRock,SBI and Reliance is
to employ the resources in such a manner as to afford for the investors combine benefits of low
risk, steady returns, high liquidity and capital appreciation through diversification and expert
management.

40 | P a g e
CHAPTER [5] :- LIMITATIONS OF STUDY

41 | P a g e
CHAPTER [5]: - LIMITATIONS OF STUDY
 The study was limited by the time constraint; hence extent to study is not possible.
 The study was limited to 5 companies only.
 The policy and application are applicable to the particular assessment year only.
 The analysis and interpretation purely based on the data collected from various website.
The accuracy of interpretation depends upon the accuracy of these data.
 The return from the mutual fund depends upon the returns of the securities involved in
the portfolio. The return from the market depends upon the efficiency of the market and
other various factor affecting the fund and economy as a whole. So the researcher
doesn‟t claim the 100% accuracy of the result conducted from the study.

42 | P a g e
CHAPTER [6] :- RESEARCH
METHODOLOGY

43 | P a g e
CHAPTER [6]: - RESEARCH METHODOLOGY
What is Research:-
Different investment avenues are available to investors. Mutual funds also offer good investment
opportunities to the investors. Like all investments, they also carry certain risks. The investors
should compare the risks and expected yields after adjustment of tax on various instruments
while taking investment decisions. The investors may seek advice from experts and consultants
including agents and distributors of mutual funds schemes while making investment decisions.
With an objective to make the investors aware of performance of mutual funds, an attempt has
been made to provide information on the comparison of tax saving funds of selected Asset
Management Companies such as HDFC, FRANKLIN INDIA, RELIANCE, SBI and DSP
BlackRock which may help the investors in taking investment decisions. The analysis is also
compared with the calculations based on the Average return and Standard deviation for the
period 2008-12. This paper is carried out to find out the returns of funds thereby studying the
performance of the selected tax saving schemes in the market. The investor invests the funds
based on the returns, net asset value and also the trend prevailing in the market.
Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. Mutual funds are one of the best investments ever created because they are very
cost efficient and very easy to invest in. Investors in India opt for the tax-saving mutual fund
schemes for the simple reason that it helps them to save money. The tax-saving mutual funds or
the equity-linked savings schemes (ELSS) receive certain tax exemptions under Section 80C of
the Income Tax Act. That is one of the reasons why the investors in India add the tax-saving
mutual fund schemes to their portfolio. The tax-saving mutual fund schemes are one of the
important types of mutual funds in India that investors can opt for. The present study is carried
out to find out the returns of funds thereby studying the performance of the tax saving funds in
the market. The investor invests the funds based on the returns, net asset value and also the trend
prevailing in the market. Since the market being high volatile there is a need to study the
performance and comparative statement of various tax saving funds performing in the market.

44 | P a g e
REVIEW OF THE LITERATURE
John and Donald (1974) examined the relationship between the stated fund objectives and their
risks-return attributes and concluded that on an average, the fund managers appeared to keep
their portfolios within the stated risk. It concludes that mutual funds on aggregate offer superior
returns but they are offset by expenses and load charges.
Barua, Raghunathan and Varma (1991) evaluated the performance of Master Share during the
period 1987 to 1991 using Sharpe, Jensen and Treynor measures and concluded that the fund
performed better that the market, but not so well as compared to the Capital Market Line.
Although emerging markets such as India have attracted the attention of investors all over the
world, they have remained devoid of much systematic research, especially in the area of mutual
funds.
A study by Gupta and Aggarwal (2007) sought to check the performance of mutual funds
operation in India. In this regard, quarterly returns performance of all the equity-diversified
mutual funds during the period from January 2002 to December 2006 was tested.
Guha (2008) focused on return-based style analysis of equity mutual funds in India using
quadratic optimization of an asset class factor model proposed by William Sharpe. The study
found the “Style Benchmarks” of each of its sample of equity funds as optimum exposure to 11
passive asset class indexes. The study also analyzed the relative performance of the funds with
respect to their style benchmarks. The results of the study showed that the funds have not been
able to beat their style benchmarks on the average.
Anand and Murugaiah (2008) examined the components and sources of investment
performance in order to attribute it to specific activities of Indian fund managers. They also
attempted to identify a part of observed return which is due to the ability to pick up the best
securities at given level of risk. For this purpose, Fama's methodology is adopted here. The study
covers the period between April 1999 and March 2003 and evaluates the performance of mutual
funds based on 113 selected schemes having exposure more than 90percent of corpus to equity
stocks of 25 fund houses. The empirical results reported reveal the fact that the mutual funds

45 | P a g e
were not able to compensate the investors for the additional risk that they have taken by
investing in the mutual funds.
Devasenathipathi (2011) investigated the performance of public-sector and private-sector
mutual funds for the period of 2005 to 2007. Selected funds of LIC (Public sector) and Reliance
(Private sector) were chosen for the purpose of analysis. Statistical techniques like Mean and
Standard Deviation were applied to study the consistency in returns subject to market risks of
each fund. The study revealed that performance of all the funds seemed to be volatile during the
study period; as such it was quite difficult to earmark one particular fund that out performed
consistently.
KEYWORDS
Asset Management Companies, Performance, Tax saving schemes.
Data collection Methods:-
The following research methodology has been adopted for assessing the performance of tax
saving funds of selected Asset Management Companies in the market.
Sources of data
The present study is purely based on secondary data. Top five ELSS schemes were as per their
AUM . The sample ELSS schemes are HDFC Tax Saver, DSP BlackRock Tax saver fund,
Reliance Tax Saver, SBI Magnum Tax Gain and Franklin India Tax shield. The data is collected
from the fact sheets, reports, websites, magazines, books and journals etc. are considered. The
deviations are properly analyzed. For each of the scheme, the risk ratios (Average return and
Standard Deviation) were also observed carefully and correlated with the returns. Accordingly,

46 | P a g e
proper findings were found out and conclusions were drawn about the best performance scheme
among all.
TOOLS FOR PERFORMANCE MEASURES
In this study, the tools used for the analysis are Average return and Standard Deviation Measure
for a period of 5 years from 2008 to 2012.
 Average Mean: The most popular & widely used measure for representing the entire
data by one value is what most layman call an „average‟ & what the statistician call the
„arithmetic mean‟. It is obtained by adding together all the items & by dividing this total
by the number of items.
=
Where:
= Average Mean
ΣX = Sum of the frequency
N = Total number of frequency.
 Standard Deviation: The degree that a single value in a group of values varies from the
mean (average) of the distribution. Standard deviation is a statistical measure that uses
past performance of an investment or portfolio to determine the potential range of future
performance and assess the probability of that performance. Standard deviations can be
calculated for an individual security or for the entire portfolio.

47 | P a g e
CHAPTER [7] :- DATA ANALYSIS &
INTERPRETATION

48 | P a g e
CHAPTER [7] :- DATA ANALYSIS & INTERPRETATION
CALCULATION OF STANDARD DEVIATION OF SELECTED FUNDS
1. HDFC Tax Saver
Table 1.1 Standard Deviation for HDFC Tax Saver
Average Return ( y) =
= 77.91/5
= 15.58
∑dy
2
= 9962.43
Variance =
= 9962.43/4
= 2490.61
Standard Deviation (S.D) = = 49.90
YEAR RETURN
(Y)
AVERAGE
RETURN
( y)
dy = (Y- ) dy
2
2008 -51.55 15.58 -35.97 1293.84
2009 99.07 15.58 83.49 6970.58
2010 26.42 15.58 10.84 117.55
2011 -22.62 15.58 38.2 1459.24
2012 26.59 15.58 11.01 121.22
Total 77.91 9962.43

49 | P a g e
2. Franklin India Tax Shield
Table 1.2 Standard Deviation for Franklin India Tax Shield
= 67.25/5
= 13.45
∑dy
2
= 9373.86
Variance =
= 9373.86/4
= 2343.47
YEAR RETURN
(Y)
AVERAGE
RETURN ( y) dy = (Y - ) dy
2
2008 -49.22 13.45 -62.67 3927.53
2009 78.81 13.45 65.36 4271.93
2010 23.47 13.45 10.02 100.40
2011 -15.19 13.45 -28.64 820.24
2012 29.38 13.45 15.93 253.76
Total 67.25 9373.86

50 | P a g e
3. DSP Blackrock Tax Saver
Table 1.3 Standard Deviation for DSP Blackrock Tax Saver
= 93.75/5
= 18.75
∑dy
2
= 16496.93
Variance =
= 16496.93/4
= 4124.23
YEAR RETURN
(Y)
AVERAGE
2
2008 -56.03 18.75 -74.78 5592.05
2009 112.00 18.75 93.25 8695.56
2010 24.11 18.75 5.36 28.73
2011 -23.96 18.75 -42.71 1824.14
2012 37.63 18.75 18.88 356.45
Total 93.75 16496.93

51 | P a g e
4. SBI Magnum Tax Gain
Table 1.4 Standard Deviation for SBI Magnum Tax Gain
= 55.32/5
= 11.06
∑dy
2
= 11759.78
Variance =
= 11759.78/4
= 2939.95
YEAR RETURN
(Y)
AVERAGE
2
2008 -54.86 11.06 -65.92 4345.45
2009 86.41 11.06 75.35 5677.62
2010 12.98 11.06 1.92 2.69
2011 -23.50 11.06 -34.56 1194.39
2012 34.29 11.06 23.23 539.63
Total 55.32 11759.78

52 | P a g e
5. Reliance Tax Saving Fund
Table 1.5 Standard Deviation for Reliance Tax Saving Fund
= 73.97/5
= 14.79
∑dy
2
= 11585.35
Variance =
= 11585.35/4
=2896.34
YEAR RETURN
(Y)
AVERAGE
2
2008 -52.35 14.79 -67.14 4507.78
2009 82.01 14.79 67.22 4518.53
2010 22.49 14.79 7.7 59.29
2011 -24.23 14.79 -39.02 1522.56
2012 46.05 14.79 31.26 977.19
Total 73.97 11585.35

53 | P a g e
Standard deviation and return of selected tax saving schemes
Table 1.6 Return vs. Risk estimated of selected tax saving schemes
Chart 1.1 Showing returns Vs risk of selected tax saving schemes
0
10
20
30
40
50
60
70
HDFC Franklin DSP
BlackRock
SBI Reliance
Return
Standard Deviation
Fund Return Standard deviation
HDFC 15.58 49.90
Franklin 13.45 48.41
DSP Blackrock 18.75 64.22
SBI 11.06 54.22
Reliance 14.79 53.82

54 | P a g e
Interpretation: From the table 1.6 shows that average return and standard deviation details.
From the table it can be seen that DSP Blackrock fund making highest average return of 18.75%
during the period. However it‟s also facing highest risk of 64.22 of all the four funds. The SBI
fund, HDFC fund, Franklin India funds and Reliance fund are making similar amount average
return but risk is not much higher.

55 | P a g e
Chapter [8] :- Conclusions &
Findings

56 | P a g e
Chapter [8]: - Conclusions & Findings
CONCLUSION
Mutual funds are one of the best investments ever created because they are very cost efficient
and very easy to invest in. All the selected schemes have allocated majority of corpus to large
cap stock and some schemes also have allocation to mid cap. Various external causes affect the
fund performance. It is suggestible for the investors to choose the right scheme according to their
risk apatite tolerance and objective of the scheme. And it is always suggested to invest in equity
schemes for longer tenure. Investors while investing in the mutual funds is very cautious.
SUMMARY OF FINDINGS
In order to know the performance of the tax saving schemes in mutual fund as per the research
design from five selected AMC company data was collected. Further the data was analyzed in
previous chapter evaluating by (Average return and standard deviation determination methods of
mutual fund) to getting some finding.
 An Individual can take an advantage of this funds and schemes to save tax by investing
maximum of Rs 1,00,000.
 After analyzing the data, it is understood that the DSP BlackRock Tax Saver, Reliance
Tax Saving, Franklin India Tax Shield and HDFC Tax saver fund have performed better
with average return of 18.75, 14.49, 13.45 and 15.58% respectively.
 Further, DSP BlackRock Tax Saver has a higher risk (standard deviation) of 64.22, which
has given the highest return among selected schemes. In the case of return, the SBI
Magnum Tax Gain has given less return with a high risk (standard deviation) of 54.22%.

57 | P a g e
Chapter [9] :- SUGGESTIONS &
Recommendations

58 | P a g e
Chapter [9] :- SUGGESTIONS & Recommendations
 Investors can go ahead in investing in DSP BlackRock Tax Saver, Reliance Tax Saving,
Franklin India Tax Shield and HDFC Tax saver fund for acquiring better returns as well
as tax savings.
 SBI AMC has to revise SBI Magnum Tax Gain portfolio to increase fund returns and
provide to the investors a more secure investment option along with tax saving.
 The Franklin India Tax Shield scheme tends to hold portfolio that were less risky than the
market portfolio.
 According return against the risk schemes will be ranked accordingly DSP BlackRock
fund is ranked 1st
, HDFC fund 2nd
, Reliance fund is 3rd
, Frankline fund is 4th
and SBI fund
is 5th
.
 AMC‟s should take more efforts on spreading awareness about taxing mutual funds as
these investment instruments provides a higher return with tax saving
 It should also induce technology that reduces turnaround time for services like
investment, redemptions and transfers and bring them on par with bank in turnaround
time.

60 | P a g e
BIBLOGRAPHY
Books:
 Gordon E. (2008) Financial Markets and Services, Mumbai; Himalaya Publising House.
 Sadhak H. (2008) Mutual Funds in India (Marketing Strategies and Investment
Practices), New Delhi; Sage Publication.
 Chandra P. (2010) Investment Analysis and Portfolio Management, Noida; Tata Mcgraw
Hill Education.
 Mehrotra C.H. (2012) Direct Taxes Law & Practice, Agra; Sahitya Bhawan Publication.
Websites:
 http://www.amfiindia.com
 http://www.valueresearchonline.com
 http://www.moneycontrol.com
 http://www.mutualfundsindia.com

Mutual Fund MBA project by NikunjHOT

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