Financial Management

Mutual fund

Name :- Tushar Raisinghani

ROLL.NO. :- HTBAF125

INTRODUCTION

A mutual fund is a type of investment vehicle that pools money from multiple investors to purchase a
diversified portfolio of stocks, bonds, or other assets. It is managed by professional fund managers who
make investment decisions on behalf of the investors.

KEY FEATURES OF MUTUAL FUND

1. Diversification – Spreads investments across different assets to reduce risk.

2. Professional Management – Experienced fund managers handle investment decisions.

3. Liquidity – Can be bought or sold easily, usually at the net asset value (NAV).

4. Affordability – Allows small investors to access diversified portfolios.

TYPES OF MUTUAL FUND

A. Equity Funds

These funds invest primarily in stocks and are best suited for long-term investors looking for capital
appreciation. Types include:

Large-cap funds (invest in established companies)

Mid-cap and small-cap funds (higher growth potential but riskier)

Multi-cap funds (diversify across different market capitalizations)

B. Debt Funds :

Debt funds invest in fixed-income securities like government bonds, corporate bonds, and money
market instruments. They are relatively safer and provide stable returns. Types include:

Liquid funds

Short-term and long-term bond funds

Gilt funds

C. Hybrid Funds :

Hybrid funds combine equity and debt investments to balance risk and returns. Types include:

Aggressive hybrid funds (more equity exposure)

Conservative hybrid funds (more debt exposure)

D. Index Funds :

Index funds mimic a stock market index, such as the S&P 500 or Nifty 50, providing passive investment
with lower expense ratios.

E. Sectoral Funds :

Sectoral funds focus on specific industries such as technology, healthcare, or real estate. They carry
higher risk but also potential for higher returns.

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F. Tax-Saving Funds (ELSS) :

Equity Linked Savings Schemes (ELSS) offer tax benefits under Section 80C of the Income Tax Act. These
funds have a mandatory lock-in period of three years.

ADVANTAGES OF MUTUAL FUND

1. Diversification – Reduces risk by investing in a broad range of securities.

2. Professional Management – Experienced fund managers handle investments.

3. Liquidity – Investors can redeem their investments anytime in open-ended funds.

4. Systematic Investment Plan (SIP) – Allows disciplined investing with small amounts.

5. Transparency – Regular disclosures on fund performance and holdings.

6. Tax Benefits – ELSS funds provide tax-saving opportunities.

DISADVANTAGES OF MUTUAL FUND

1. Market Risks – Subject to market fluctuations.

2. Expense Ratios – Management fees can reduce returns.

3. Lock-in Periods – Some funds, like ELSS, have restrictions on withdrawals.

4. Lack of Control – Investors cannot directly manage fund allocations.

5. Potential for Lower Returns – Actively managed funds may underperform benchmarks.

TOP 5 MUTUAL FUND : FUNDAMENTALS AND TECHNICAL ANALYSIS

1. SBI Bluechip Fund

Fund Type: Large-Cap Equity

Returns: 10-year CAGR ~14%

Analysis: Consistent performance, stable blue-chip investments.

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SBI Bluechip Direct Plan-Growth is a Large Cap mutual fund scheme from Sbi Mutual Fund. This fund has
been in existence for 12 yrs 1 m, having been launched on 01/01/2013. SBI Bluechip Direct Plan-Growth
has ₹49,683 Crores worth of assets under management (AUM) as on 31/12/2024 and is medium-sized
fund of its category. The latest Net Asset Value (NAV) of SBI Bluechip Direct Plan-Growth as of
07/02/2025 is ₹95.63. The fund has an expense ratio of 0.82%, which is close to what most other Large
Cap funds charge.

SBI Bluechip Direct Plan-Growth returns of last 1-year are 12.28%. Since launch, it has delivered 15.43%
average annual returns. The fund has doubled the money invested in it every 5 yrs.

SBI Bluechip Direct Plan-Growth scheme's ability to deliver returns consistently is in-line with most funds
of its category. Its ability to control losses in a falling market is above average.

The fund has the majority of its money invested in Financial, Automobile, Technology, Consumer
Staples, Healthcare sectors. It has taken less exposure in Financial, Automobile sectors compared to
other funds in the category.

The fund's top 5 holdings are in HDFC Bank Ltd., ICICI Bank Ltd., Larsen & Toubro Ltd., Infosys Ltd., ITC
Ltd..

2. HDFC Balanced Advantage Fund

Fund Type: Hybrid

Returns: 10-year CAGR ~12%

Analysis: Good balance between equity and debt, strong risk-adjusted returns.

HDFC Balanced Advantage Fund Direct Plan-Growth is a Dynamic Asset Allocation mutual fund scheme
from Hdfc Mutual Fund. This fund has been in existence for 12 yrs 1 m, having been launched on
01/01/2013. HDFC Balanced Advantage Fund Direct Plan-Growth has ₹95,521 Crores worth of assets
under management (AUM) as on 31/12/2024 and is medium-sized fund of its category. The latest Net
Asset Value (NAV) of HDFC Balanced Advantage Fund Direct Plan-Growth as of 07/02/2025 is ₹526.16.
The fund has an expense ratio of 0.78%, which is close to what most other Dynamic Asset
Allocation funds charge. Currently, the fund has a 53.74% allocation to equity and 30.09% to Debt.

HDFC Balanced Advantage Fund Direct Plan-Growth returns of last 1-year are 8.84%. Since launch, it has
delivered 15.80% average annual returns. The fund has doubled the money invested in it every 4 yrs.

HDFC Balanced Advantage Fund Direct Plan-Growth scheme's ability to deliver returns consistently is

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higher than most funds of its category. Its ability to control losses in a falling market is high.

The fund's equity portion is primarily invested in Financial, Energy, Automobile, Construction,
Technology sectors. It has taken less exposure in Financial, Energy sectors compared to other funds in
the category.

The debt portion of the fund has low credit quality indicating the quality of borrowers it has lent it to is
not too great.

The fund's top 5 holdings are in GOI, HDFC Bank Ltd., ICICI Bank Ltd., Reliance Industries Ltd., Infosys
Ltd..

3. ICICI Prudential Corporate Bond Fund

Fund Type: Debt

Returns: 10-year CAGR ~9%

Analysis: Suitable for low-risk investors, steady returns.

ICICI Prudential Corporate Bond Fund Direct Plan -Growth is a Corporate Bond mutual fund scheme
from Icici Prudential Mutual Fund. This fund has been in existence for 12 yrs 1 m, having been launched
on 01/01/2013. ICICI Prudential Corporate Bond Fund Direct Plan -Growth has ₹29,134 Crores worth of
assets under management (AUM) as on 31/12/2024 and is medium-sized fund of its category. The latest
Net Asset Value (NAV) of ICICI Prudential Corporate Bond Fund Direct Plan -Growth as of 07/02/2025 is
₹30.10. The fund has an expense ratio of 0.35%, which is close to what most other Corporate
Bond funds charge.

ICICI Prudential Corporate Bond Fund Direct Plan -Growth returns of last 1-year are 8.30%. Since launch,
it has delivered 8.19% average annual returns. The fund has doubled the money invested in it every 10
yrs.

ICICI Prudential Corporate Bond Fund Direct Plan -Growth scheme's ability to deliver returns consistently
is higher than most funds of its category. Its ability to control losses in a falling market is high.

The fund's credit profile is very high indicating it has lent to borrowers whose quality is excellent. Most
funds in this category lend to better borrowers and hence the risk of default in this fund is higher than
the category.

The fund's top holdings are in GOI, India Universal Trust AL1, LIC Housing Finance Ltd., Pipeline

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Infrastructure (India) Pvt. Ltd., Small Industries Devp. Bank of India Ltd..

4. Nippon India Small Cap Fund

Fund Type: Small-Cap Equity

Returns: 10-year CAGR ~20%

Analysis: High-risk, high-reward fund for aggressive investors.

Nippon India Small Cap Fund Direct- Growth is a Small Cap mutual fund scheme from Nippon India
Mutual Fund. This fund has been in existence for 12 yrs 1 m, having been launched on 01/01/2013.
Nippon India Small Cap Fund Direct- Growth has ₹57,010 Crores worth of assets under management
(AUM) as on 31/12/2024 and is medium-sized fund of its category. The latest Net Asset Value (NAV) of
Nippon India Small Cap Fund Direct- Growth as of 07/02/2025 is ₹176.57. The fund has an expense ratio
of 0.7%, which is close to what most other Small Cap funds charge.

Nippon India Small Cap Fund Direct- Growth returns of last 1-year are 9.81%. Since launch, it has
delivered 25.76% average annual returns. The fund has doubled the money invested in it every 3 yrs.

Nippon India Small Cap Fund Direct- Growth scheme's ability to deliver returns consistently is higher
than most funds of its category. Its ability to control losses in a falling market is above average.

The fund has the majority of its money invested in Capital Goods, Financial, Services, Consumer Staples,
Healthcare sectors. It has taken less exposure in Capital Goods, Financial sectors compared to other
funds in the category.

The fund's top 5 holdings are in HDFC Bank Ltd., Multi Commodity Exchange Of India Ltd., Tube
Investments Of India Ltd., Kirloskar Brothers Ltd., Karur Vysya Bank Ltd..

5. Axis Long-Term Equity Fund

Fund Type: ELSS (Tax-Saving)

Returns: 10-year CAGR ~14%

Analysis: Good for tax benefits with strong growth potential.

Technical Analysis:

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Moving Averages: Most funds are above their 200-day moving average, indicating a bullish trend.

Relative Strength Index (RSI): Funds show strong momentum with RSI above 50.

MACD: Signals confirm upward trends in equity funds.

CONCLUSION

Mutual funds offer a great investment option for all types of investors. Whether you're looking for long-
term growth, stable income, or tax benefits, there is a mutual fund to match your needs. However,
investors must assess their risk tolerance and financial goals before choosing a fund.

By understanding the fundamentals and technical aspects of mutual funds, investors can make informed
decisions and build wealth effectively over time.