Project work on mutual funds

Comparative Analysis of Mutual Fund Schemes available
at Kotak Mutual Fund and HDFC Mutual Fund

1. A Project Report
On
Comparative Analysis of Mutual Fund Schemes available
at Kotak Mutual Fund and HDFC Mutual Fund






Submitted By
Avinash Jami
8328048366
[email protected]
Batch – IB2108

DATA TRAINED EDUCATION
Post Graduate Certificate Program in Investment Banking in
Collaboration with LGCA

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Abstract:
Generally, when an investor decides to study the investment options readily
available in today’s confusing, complex and risky environment, he thoroughly
evaluates all the investment options. While evaluating such multiple options,
prima facie, he naturally considers several factors like Past performance of the
option under study, Risk adjusted returns from the invested plan, share in the
portfolio policy, Fund house, Back Returns i.e., percentage of Interest / Dividend
and Consistent rate of return on investment, to mention a few. In the words of
Warren Buffett, “Risk comes from not knowing what you are doing”.
If, at all, an investor decides to follow all these options for his investment, quite
strictly, preferably he would come to a rational conclusion of an option of
Mutual Funds. However, when an investor decides to opt for Mutual Funds, he
proceeds with the assumptions that the performance of mutual funds is
relatively good, the return on mutual fund is better as compared to the returns
on fixed deposits with banks or posts. The performance of mutual funds is good
because of proper portfolio and risk management and it is linked and dependent
on the stock market. As Robert Arnott has commented, “In investing, what is
comfortable is rarely profitable”.

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Introduction:
Stock market plays a very vital role in developing economy like India and also
attracting the rural people in recent years. Investors usually observe that all
capital market investment avenues are risky. Moreover, in case an investor
decides to invest in shares in order to obtain higher returns in short time with
least investment, he should necessarily possess adequate technical knowledge
related to share market. Also, he is needed to devote disproportionate time to
get proper technical knowledge to be expert investor in the share market. As a
result, it is observed that there is an increasing and inclining trend towards
investment in mutual funds. As per Dave Ramsey, “Financial peace isn’t the
acquisition of stuff. It’s learning to live on less than you make, so you can give
money back and have money to invest. You can’t win until you do this”.
After several social interactions with eminent financial personalities, experts
and analysts, the researcher realized that mutual fund is indeed one of the
upcoming investment options. The performance of the Indian Mutual Fund
Industry accounted for an impressive growth in funds mobilized after
Globalization in India. Assets Under Management has increased from ₹6.42
trillion as on September 30, 2011 to ₹37.41 trillion as on September 30, 2021. It
had shown an outstanding and amazing growth. Thereafter, the researcher tried
to search the literature related to performance of mutual funds. However, it was
found that a lot of literature is not available on the said topic because it appears
that substantial research work in this area is still to be done. Researcher also
observed that investors always get confused where to make investment.
Therefore, it was decided to conduct the research on Mutual Funds
performance as one of the investment options because as Robert Kiyosaki
directed, “It’s not how much money you make, but how much money you
keep, how hard it works for you, and how many generations you keep it for”.
This study is an attempt to understand the performance of share market and to
analyse the correlation of performance of mutual funds between two reputed
companies. As a part of this study, data is collected regarding performance of
mutual funds and for the financial years 2016–17, 2017–18, 2018–19, 2019–20
and 2020–21. Five Equity Mutual Funds, One Balanced Fund and Two Debt
Funds are taken as sampling.

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Concept of Mutual Fund:
The investment trust industry in India was led by the government of India, and
in 1964 the unit trust of India was established. In 1993, SEBI regulations were
replaced by the comprehensively revised Mutual Fund Regulations in 1996. It
has been 36 years for mutual funds to exist in this country at the end of the
millennium. The ride for the last 36 years was not smooth. The 4 opinions of
investors are still divided. Some are for mutual funds and others are against
mutual funds. UTI began its activity in July 1964. The impulse to build formal
systems comes from a desire to strengthen the tendency to save and invest in
low and intermediate groups. UTI was born in an era characterized by the large
political and economic turmoil that set the financial markets back.
Entrepreneurs were very reluctant to enter the capital market
A Mutual Fund is a trust that pools the savings of number of investors who share
a common financial goal. The money collected from investors is invested in
capital market instruments such as shares, debentures and other securities.
Mutual fund issues units to the investors in accordance with quantum of money
invested by the investors. Investors of mutual funds are known as unit holders.
The income earned through these investments and the capital appreciation
realized is shared by its unit holders in proportion to the number of units owned
by them. Thus a Mutual Fund is the most suitable investment for the common
man as it offers an opportunity to invest in a diversified, professionally managed
basket of securities at a relatively lower cost.
In India, there are many companies, both public and private that are engaged in
the trading of mutual funds. Wide varieties of Mutual Fund Schemes are
available in the market. Investors can invest their money in different types of
mutual funds depending upon their individual investment objectives.
Like different investment avenues, mutual funds also offer advantages and
disadvantages, which are important for any investor to consider and understand
before they decide to invest in mutual fund.

Advantages of Mutual Funds:
Diversification, Continuous professional management, Economies of scale,
Liquidity is the important advantages of Mutual Funds.

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Disadvantages of Mutual Funds:
Fluctuating returns, Diversification, Misleading Advertisement and Operating
Costs are the disadvantages of Mutual Funds.

Regulatory framework:
Mutual funds are regulated primarily by Securities and Exchange Board of India
(SEBI). In 1996, SEBI formulated the Mutual Fund Regulation. SEBI is also the
apex regulator of capital markets and its intermediaries. Issuance and trading of
capital market instruments also comes under the purview of SEBI.
Along with SEBI, mutual funds are regulated by RBI, Companies Act, Stock
exchange, Indian Trust Act and Ministry of Finance. RBI acts as a regulator of
Sponsors of bank sponsored mutual funds, especially in case of funds offering
guaranteed returns. In order to provide a guaranteed returns scheme, mutual
fund needs to take approval from RBI. The Ministry of Finance acts as supervisor
of RBI and SEBI and appellate authority under SEBI regulations. Mutual funds
can appeal to Ministry of finance on the SEBI rulings.
Mutual funds must set up AMC with 50% independent directors, a separate
board of trustee companies with minimum 50% of independent trustees and
independent custodians to ensure an arm’s length relationship between
trustees, fund managers, and custodians. As the funds are managed by AMCs
and the custody of assets are with trustees, a counter balancing of risks exists as
both can keep tabs on each other.
As per the current SEBI guidelines, mutual funds must have a minimum of Rs. 50
crore for an open-ended scheme, and Rs. 20 crore corpus for the closed-ended
scheme.
Within nine months, mutual funds must invest money raised from the saving
schemes. This protects the mutual funds from the disadvantage of investing
funds in the bullish market and suffering from poor NAV after that. Mutual funds
can invest a maximum of 25% in money market instruments in the first six
months after closing the funds and a maximum of 15% of the corpus after six
months to meet short-term liquidity requirements.
SEBI inspects mutual funds every year to ensure compliance with the
regulations.

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Scope of Study:
The main focus of the study was to track the performance of the different
mutual fund schemes. Since different companies come out with similar themes
in the same season, it becomes difficult for the company to constantly perform
well so as to survive the competition and provide maximum capital appreciation
or return as the case may be. Other than the market, the performance of the
fund depends on the kind of stock selected by the fund managers of the
company.
The analysis is done on the performance of funds with the same theme or sector
and reason out why a fund performs better than the others in the lot. It is limited
to investors and their investment preferences. Study objective is to investigate
the return on investment in share market and to understand the fund sponsor
qualities influencing the selection of Mutual Funds/Schemes. Also, to find out
that how far the mutual fund schemes are able to win the confidence of the
investors.

Need for the Study:
The main purpose of this study is to know about mutual fund and its functioning.
This helps to know in details about mutual fund industry right from its inception
stage, growth and future prospects. It also helps in understanding different
schemes of mutual funds, since the study depends upon different schemes like
Equity, Dept, Balanced as well as the returns associated with those schemes. The
study was done to analyse the returns associated with the different mutual
funds. Ultimately this would help in understanding the benefits of mutual funds
to investors.

Objectives of the Study:
1. To study the various schemes available at Kotak Mutual Fund and HDFC
Mutual Fund.
2. To analyse and compare the performance of different mutual fund
schemes offered by Kotak Mutual Fund and HDFC Mutual Fund.
3. To know the factors that effects on the performance of mutual fund
schemes.

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4. To find out the best scheme available for investors by comparing their
performance.
5. To compare the similar schemes of Kotak Mutual Fund with HDFC Mutual
Fund and find out the reasons behind the difference in their
performances.

Research Methodology:
Sr. No. Particulars Details
1 Type of Data Secondary Data
2 Population Mutual Funds in India
3 Sampling Area Private Sector
4 Nature of Source
of Data
Quantitative
5 Sampling
Methodology
Convenience Sampling
6 Sample Size 10 Mutual Fund Schemes of Equity, 4 of Debt and
2 of Balanced categories
7 Period of Study 5 years 2016-17 to 2020-21
8 Method of Data
Collection
Fund Factsheet published by Kotak Mutual Fund
& HDFC Mutual Fund, Other published material
of Mutual Funds and Research based online
portals
9 Statistical Tools
& Techniques
Standard Deviation, Sharpe Ratio, Beta, R-
Squared, Alpha

Limitations of the Study:
1. Research is based on the secondary data.
2. The study is restricted to only two Mutual Fund Companies.
3. The data is limited to performance of the mutual funds only for the
period of last five years.
4. The data is limited to 16 schemes only.

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Data Analysis and Interpretation:
1. KOTAK MID-CAP EMERGING EQUITY V/s HDFC MID-CAP OPPORTUNITIES
FUND - GROWTH
Table No. 1.1: Comparison of Equity schemes
Investment
Information
Kotak Mid-Cap Emerging
Equity
HDFC Mid-Cap
Opportunities Fund
Fund
Objective
The investment objective of
Kotak Emerging Equity Fund is
to generate long-term capital
appreciation from a portfolio
of equity and equity related
securities, by investing
predominantly in midcap
companies.
To generate long-term
capital appreciation from a
portfolio that is substantially
constituted of equity and
equity related securities of
Small and Mid-Cap
companies.
Composition
of Fund
Fund has 97.19% investment
in Indian stocks of which
6.23% is in large cap stocks,
60.66% is in mid cap stocks,
27.41% in small cap stocks.
Fund has 95.03% investment
in Indian stocks of which
1.96% is in large cap stocks,
57.21% is in mid cap stocks,
25.59% in small cap stocks.
Suitable For Investors who are looking to
invest money for at least 3-4
years and looking for high
returns. At the same time,
these investors should also be
ready for possibility of
moderate losses in their
investments.
Investors who are looking to
invest money for at least 3-4
years and looking for high
returns. At the same time,
these investors should also
be ready for possibility of
moderate losses in their
investments.
Fund type Open-Ended Equity Fund Open-Ended Equity Fund
Investment
Plan
Direct Plan - Growth Direct Plan - Growth
Risk Grade Moderately High Moderately High
Return Grade Above Average Below average
AUM as on
31.10.2021
₹ 16485.07 Cr ₹ 31628.86 Cr
NAV as on
31.10.21
₹ 78.90 ₹ 98.15
Expense ratio 0.55% 1%

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Table No. 1.2: Annual returns trend of Schemes from 2016-17 to 2020-21
Year Kotak Mid-Cap (%) HDFC Mid-Cap (%)
2020-21 96.76 72.74
2019-20 0.01 -8.82
2018-19 30.06 30.67
2017-18 28.85 27.34
2016-17 14.55 13.20
*Annual Returns of schemes are taken on 31st March of every year.
Graph No. 1: Graph showing Annual returns trend of Schemes


Interpretation:
Kotak Mid-Cap and HDFC Mid-Cap, both schemes focused on only medium and
small sector, so there are high returns with maximum risk. Graph No. 1 revealed
that Kotak Mid-Cap has given good returns in 4 years than HDFC Mid-Cap except
in the year 2018-19 where HDFC Mid-Cap has given positive returns. In the
current year, both the schemes have given very good return. During the year
2019-20 Kotak Mid Cap has given almost zero returns and HDFC Mid-Cap has
given negative returns which shows that Kotak Mid-Cap is very well managed
than HDFC Mid-Cap and there is scope for improvement for HDFC Mid-Cap.


96.76
0.01
30.06 28.85
14.55
72.74
-8.82
30.67
27.34
13.2
-20
0
20
40
60
80
100
120
2020-21 2019-20 2018-19 2017-18 2016-17
RETURNS
YEAR
Kotak Mid-Cap (%)HDFC Mid-Cap (%)

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2. KOTAK FOCUSED EQUITY FUND V/S HDFC FOCUSED 30 FUND
Table No. 2.1: Comparison of Equity schemes
Investment
Information
Kotak Focused Equity Fund HDFC Focused 30 Fund
Fund
Objective
The investment objective of
the scheme is to generate
long term capital
appreciation/income by
investing in equity & equity
related instruments across
market capitalization of up to
30 companies.
To generate long term capital
appreciation/income by
investing in equity & equity
related instruments of up to
30 companies.
Composition
of Fund
Fund has 97.81% investment
in Indian stocks of which
55.78% is in large cap stocks,
23.33% is in mid cap stocks,
5.67% in small cap stocks.
Fund has 89.67% investment
in indian stocks of which
61.26% is in large cap stocks,
7% is in mid cap stocks, 3.15%
in small cap stocks.
Suitable For Investors who have advanced
knowledge of macro trends
and prefer to take selective
bets for higher returns
compared to other Equity
funds. At the same time,
these investors should also
be ready for possibility of
moderate to high losses in
their investments even
though overall market is
performing better.
Investors who have advanced
knowledge of macro trends
and prefer to take selective
bets for higher returns
compared to other Equity
funds. At the same time,
these investors should also
be ready for possibility of
moderate to high losses in
their investments even
though overall market is
performing better.
Fund type Open-Ended Equity Fund Open-Ended Equity Fund
Investment
Plan
Direct Plan - Growth Direct Plan - Growth
Risk Grade Very High Very High
Return Grade Not Available Below average
AUM as on
31.10.2021
₹ 2235.92 Cr ₹ 920.37 Cr
NAV as on
31.10.21
₹ 17.30 ₹ 124.11
Expense ratio 0.45% 1.37%

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Table No. 2.2: Annual returns trend of Schemes from 2016-17 to 2020-21
Year Kotak Focused Fund (%) HDFC Focused Fund (%)
2020-21 39.68 46.05
2019-20 19.30 13.54
2018-19 - 27.34
2017-18 - 25.15
2016-17 - 12.07
*Annual Returns of schemes are taken on 31st March of every year.
Graph No. 2: Graph showing Annual returns trend of Schemes


Interpretation:
Kotak Focused Fund and HDFC Focused Fund, both schemes focused on only
large sector, so there is long term growth with minimum fluctuation. Kotak
Focused Fund was launched on 16-Jul-2019, so the comparison will be for last 2
years only. Graph No. 2 revealed that HDFC Focused Fund has given good returns
in last year than Kotak Focused Fund but in the year 2019-20 where Kotak
Focused Fund has given positive returns than HDFC Focused Fund. In the current
year, both the schemes have given very good returns. It means both the
schemes are good and very well managed as well as giving similar average return
in long period.

39.68
19.3
0 0 0
46.05
13.54
27.34
25.15
12.07
0
5
10
15
20
25
30
35
40
45
50
2020-21 2019-20 2018-19 2017-18 2016-17
RETURNS
YEAR
Kotak Focused Fund (%)HDFC Focused Fund (%)

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3. KOTAK TAX SAVER SCHEME V/S HDFC TAX SAVER FUND
Table No. 3.1: Comparison of Equity schemes
Investment
Information
Kotak Tax Saver Scheme HDFC Tax Saver Fund
Fund
Objective
To generate long-term
capital appreciation from a
diversified portfolio of equity
and equity related securities
and enable investors to avail
the income tax rebate, as
permitted from time to time.
To generate capital
appreciation / income from a
portfolio, comprising
predominantly of equity &
equity related instruments.
Composition
of Fund
Fund has 97.65% investment
in indian stocks of which
57.1% is in large cap stocks,
20.79% is in mid cap stocks,
12.53% in small cap stocks.
Fund has 98.97% investment
in indian stocks of which
57.77% is in large cap stocks,
16.98% is in mid cap stocks,
8.77% in small cap stocks.
Suitable For Investors who are looking to
invest money for at least 3
years and looking for
additional benefits of income
tax saving apart from higher
returns expectations. At the
same time, these investors
should also be ready for
possibility of moderate losses
in their investments and 3-
year lock-in period.
Investors who are looking to
invest money for at least 3
years and looking for
additional benefits of income
tax saving apart from higher
returns expectations. At the
same time, these investors
should also be ready for
possibility of moderate losses
in their investments and 3-
year lock-in period.
Fund type Open-Ended Equity Fund Open-Ended Equity Fund
Investment
Plan
Direct Plan - Growth Direct Plan - Growth
Risk Grade Very High Very High
Return Grade Above average Relatively weak
AUM as on
31.10.2021
₹ 2323.06 Cr ₹ 9449.41 Cr
NAV as on
31.10.21
₹ 79.21 ₹ 780.01
Expense ratio 0.72% 1.25%

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Table No. 3.2: Annual returns trend of Schemes from 2016-17 to 2020-21
Year Kotak Tax Saver (%) HDFC Tax Saver (%)
2020-21 92.32 46.41
2019-20 7.31 -15.11
2018-19 39.30 30.96
2017-18 25.04 23.01
2016-17 16.17 14.52
*Annual Returns of schemes are taken on 31st March of every year.
Graph No. 3: Graph showing Annual returns trend of Schemes


Interpretation:
Kotak Tax Saver and HDFC Tax Saver are the schemes invested its money for 3-
year lock in period for the purpose of tax saving. The schemes aim is not to
achieve high return but save the Tax. Graph No.3 revealed that Kotak Tax Saver
scheme is more aggressive than HDFC Tax Saver because it has given high
positive returns in all the compared years. If compare the data in the year 2019-
20, Kotak Tax Saver has given positive returns whereas HDFC Tax Saver has given
negative returns and during the current year, Kotak Tax Saver has given high
returns compared to HDFC Tax Saver. It means Kotak scheme is more aggressive
than HDFC scheme.

92.32
7.31
39.3
25.04
16.17
46.41
-15.11
30.96
23.01
14.52
-40
-20
0
20
40
60
80
100
2020-21 2019-20 2018-19 2017-18 2016-17
RETURNS
YEAR
Kotak Tax Saver (%)HDFC Tax Saver (%)

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4. KOTAK BLUECHIP FUND V/S HDFC TOP 100 FUND
Table No. 4.1: Comparison of Equity schemes
Investment
Information
Kotak Bluechip Fund HDFC Top 100 Fund
Fund
Objective
To generate capital
appreciation from a portfolio
of predominantly equity and
equity related securities
falling under the category of
large Cap companies. There
is no assurance that the
investment objective of the
Scheme will be achieved.
To provide long-term capital
appreciation/income by
investing predominantly in
Large-Cap companies. There
is no assurance that the
investment objective of the
Scheme will be realized.
Composition
of Fund
Fund has 95.68% investment
in indian stocks of which
68.02% is in large cap stocks,
10.14% is in mid cap stocks,
5.31% in small cap stocks.
Fund has 95.73% investment
in indian stocks of which
80.19% is in large cap stocks,
5.63% is in mid cap stocks.
Suitable For Investors who are looking to
invest money for at least 3-4
years and looking for high
returns. At the same time,
these investors should also
be ready for possibility of
moderate losses in their
investments.
Investors who are looking to
invest money for at least 3-4
years and looking for high
returns. At the same time,
these investors should also
be ready for possibility of
moderate losses in their
investments.
Fund type Open-Ended Equity Fund Open-Ended Equity Fund
Investment
Plan
Direct Plan - Growth Direct Plan - Growth
Risk Grade Moderately High Moderately High
Return Grade Very good Relatively weak
AUM as on
31.10.2021
₹ 3456.23 Cr ₹ 21595.61 Cr
NAV as on
31.10.21
₹ 418.88 ₹ 737.29
Expense ratio 0.86% 1.15%

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Table No. 4.2: Annual returns trend of Schemes from 2016-17 to 2020-21
Year Kotak Bluechip Fund (%) HDFC Top 100 Fund (%)
2020-21 90.25 66.84
2019-20 6.06 -4.86
2018-19 38.74 44.41
2017-18 25.67 22.33
2016-17 13.61 13.74
*Annual Returns of schemes are taken on 31st March of every year.
Graph No. 4: Graph showing Annual returns trend of Schemes


Interpretation:
Kotak Bluechip Fund and HDFC Top 100 Fund, both has been focusing on select
stocks for investment from the largest 100 stocks listed in the Indian markets
(highest market capitalization). These schemes have been focusing on top
companies, so there are high returns with minimum fluctuation. If compare the
data available in the above Graph, it can be said that both schemes are very
good and very well managed. The schemes have given positive returns in last 5
years except in the year 2019-20 because of COVID crisis. In the current year
both the schemes have given very good returns but, Kotak Bluechip Fund was
more aggressive than HDFC Top 100 Fund.

90.25
6.06
38.74
25.67
13.61
66.84
-4.86
44.41
22.33
13.74
-20
0
20
40
60
80
100
2020-21 2019-20 2018-19 2017-18 2016-17
RETURNS
YEAR
Kotak Bluechip Fund (%)HDFC Top 100 Fund (%)

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5. KOTAK BALANCED ADVANTAGE V/S HDFC BALANCED ADVANTAGE
Table No. 5.1: Comparison of Equity schemes
Investment
Information
Kotak Balanced Advantage
Fund
HDFC Balanced Advantage
Fund
Fund
Objective
To generate capital
appreciation by investing in a
dynamically balanced
portfolio of equity & equity
related securities and debt &
money market securities.
To provide long term capital
appreciation / income from a
dynamic mix of equity and
debt investments.
Composition
of Fund
Fund has 65.65% investment
in indian stocks of which
44.88% is in large cap stocks,
11.78% is in mid cap stocks,
4.12% in small cap stocks.
Fund has 20.27% investment
in Debt of which 16.02% in
Government securities,
4.25% in funds invested in
very low risk securities.
Fund has 66.61% investment
in indian stocks of which
48.2% is in large cap stocks,
9.28% is in mid cap stocks,
7.92% in small cap stocks.
Fund has 19.07% investment
in Debt of which 8.94% in
Government securities,
10.13% in funds invested in
very low risk securities.
Suitable For Investors who are looking to
invest money for at least 5
years, you can expect gains
that beat the inflation rate as
well as returns from fixed
income options. But be
prepared for ups and downs
in investment value.
Investors who are looking to
invest money for at least 5
years, you can expect gains
that beat the inflation rate as
well as returns from fixed
income options. But be
prepared for ups and downs
in investment value.
Fund type Open-Ended Hybrid Fund-
Equity & Debt oriented
Open-Ended Hybrid Fund-
Equity & Debt oriented
Investment
Plan
Direct Plan - Growth Direct Plan - Growth
Risk Grade Moderately High Very High
Return Grade Above average Above average
AUM as on
31.10.2021
₹ 11813.44 Cr ₹ 42775.92 Cr
NAV as on
31.10.21
₹ 14.97 ₹ 296.13
Expense ratio 0.46% 1.03%

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Table No. 5.2: Annual returns trend of Schemes from 2016-17 to 2020-21
Year
Kotak Balanced
Advantage Fund (%)
HDFC Balanced
Advantage Fund (%)
2020-21 35.79 71.73
2019-20 -5.72 4.92
2018-19 4.69 44.71
2017-18 - 27.17
2016-17 - 12.76
*Annual Returns of schemes are taken on 31st March of every year.
Graph No. 5: Graph showing Annual returns trend of Schemes


Interpretation:
Kotak Balanced Advantage Fund and HDFC Balanced Advantage Fund, both
schemes have been investing its money into Equity as well as Debt fund, so there
are high returns with minimum fluctuations. Kotak Balanced Advantage Fund
was launched on 03-Aug-2018, so the comparison will be for last 3 years only.
Graph No.5 has revealed that HDFC Balanced Advantage Fund has given very
good returns than Kotak Balanced Advantage Fund during last 3 Years. It shows
that HDFC Balanced Advantage Fund is well managed and very good portfolio
than Kotak Balanced Advantage Fund, so investors should select HDFC scheme
than Kotak scheme in Balanced Fund.

35.79
-5.72
4.69
0 0
71.73
4.92
44.71
27.17
12.76
-10
0
10
20
30
40
50
60
70
80
2020-21 2019-20 2018-19 2017-18 2016-17
RETURNS
YEAR
Kotak Balanced Advantage Fund (%)HDFC Balanced Advantage Fund (%)

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6. KOTAK SENSEX ETF FUND V/S HDFC INDEX FUND - SENSEX PLAN
Table No. 6.1: Comparison of Equity schemes
Investment
Information
Kotak Sensex ETF Fund
HDFC Index Fund - Sensex
Plan
Fund
Objective
To provide returns before
expenses that closely
correspond to the total
returns of the BSE SENSEX
subject to tracking errors.
The scheme will invest in the
stocks that comprise the BSE
Sensex and in the same
proportion as in the index.
To generate returns that are
commensurate with the
performance of the SENSEX,
subject to tracking errors.
Composition
of Fund
Fund has 99.82% investment
in indian stocks of which
89.34% is in large cap stocks.
Fund has 99.64% investment
in indian stocks of which
89.18% is in large cap stocks.
Suitable For Investors who are looking to
invest money for at least 5
years, you can expect gains
that beat the inflation rate as
well as returns from fixed
income options. This is a fund
that invests in big companies,
more suited for conservative
equity investors. But be
prepared for ups and downs
in investment value.
Investors who are looking to
invest money for at least 5
years, you can expect gains
that beat the inflation rate as
well as returns from fixed
income options. This is a fund
that invests in big companies,
more suited for conservative
equity investors. But be
prepared for ups and downs
in investment value.
Fund type Open-Ended Index Fund Open-Ended Index Fund
Investment
Plan
Regular Plan - Growth Regular Plan - Growth
Risk Grade Moderately High Moderately High
Return Grade Very good Average
AUM as on
31.10.2021
₹ 20.62 Cr ₹ 2753.6 Cr
NAV as on
31.10.21
₹ 621 ₹ 532.50
Expense ratio 0.28% 0.4%

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Table No. 6.2: Annual returns trend of Schemes from 2016-17 to 2020-21
Year
Kotak Sensex ETF Fund
(%)
HDFC Index Fund -
Sensex Plan (%)
2020-21 90.53 93.06
2019-20 8.68 10.32
2018-19 46.38 49.28
2017-18 23.50 26.36
2016-17 9.90 12.60
*Annual Returns of schemes are taken on 31st March of every year.
Graph No. 6: Graph showing Annual returns trend of Schemes


Interpretation:
Kotak Sensex ETF Fund and HDFC Index Fund - Sensex Plan, both the schemes
are Indexed scheme which means their portfolio is similar to Index and in this
case the portfolio of both the schemes are matched to Sensex top 30 Blue Chip
companies. Graph No.6 has revealed that both schemes has given similar
returns because their portfolio is similar but still there is little difference in every
year because of their cash money ratio means their investment in cash form. So,
it can be said that both schemes are very good and investors can select any
scheme according to their convenience.

90.53
8.68
46.38
23.5
9.9
93.06
10.32
49.28
26.36
12.6
0
10
20
30
40
50
60
70
80
90
100
2020-21 2019-20 2018-19 2017-18 2016-17
RETURNS
YEAR
Kotak Sensex ETF Fund (%)HDFC Index Fund - Sensex Plan (%)

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7. KOTAK LIQUID FUND V/S HDFC LIQUID FUND
Table No. 7.1: Comparison of Equity schemes
Investment
Information
Kotak Liquid Fund HDFC Liquid Fund
Fund
Objective
The investment objective of
the Scheme is to provide
reasonable returns and high
level of liquidity by investing
in debt and money market
instruments of different
maturities so as to spread
the risk across different
kinds of issuers in the debt
markets. There is no
assurance that the
investment objective of the
Schemes will be realised.
To generate income through
a portfolio comprising money
market and debt instruments.
There is no assurance that
the investment objective of
the Scheme will be realized.
Composition
of Fund
Fund has 73.87% investment
in Debt of which 32.8% in
Government securities,
41.07% in funds invested in
very low risk securities.
Fund has 86.8% investment in
Debt of which 26.51% in
Government securities,
60.29% in funds invested in
very low risk securities.
Suitable For Investors who want to invest
for very short term and are
looking for alternative to
bank accounts/deposits.
Investors who want to invest
for very short term and are
looking for alternative to
bank accounts/deposits.
Fund type Open-Ended Debt Fund Open-Ended Debt Fund
Investment
Plan
Direct Plan - Growth Direct Plan - Growth
Risk Grade Low to Moderate Moderate
Return Grade Average Below average
AUM as on
31.10.2021
₹ 28583.2 Cr ₹ 45579.56 Cr
NAV as on
31.10.21
₹ 4238.94 ₹ 4122.59
Expense ratio 0.2% 0.2%

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Table No. 7.2: Annual returns trend of Schemes from 2016-17 to 2020-21
Year Kotak Liquid Fund (%) HDFC Liquid Fund (%)
2020-21 29.29 29.22
2019-20 24.80 24.69
2018-19 17.64 17.49
2017-18 9.48 9.36
2016-17 2.50 2.50
*Annual Returns of schemes are taken on 31st March of every year.
Graph No. 7: Graph showing Annual returns trend of Schemes


Interpretation:
Kotak Liquid Fund and HDFC Liquid Fund are the schemes in which money has
been invested in money market instruments, so these schemes are very liquid
means ready to convert in cash form. Graph No.7 has revealed that both the
schemes has given good returns in last five years and there were no negative
returns because all the money market instruments are debt fund and it gives
interest on their investment as well as these funds are very less fluctuating in
nature so it gives less returns than equity but constantly. And if compare both
the schemes are very good and investors can select according to their
convenience.

29.29
24.8
17.64
9.48
2.5
29.22
24.69
17.49
9.36
2.5
0
5
10
15
20
25
30
35
2020-21 2019-20 2018-19 2017-18 2016-17
RETURNS
YEAR
Kotak Liquid Fund (%)HDFC Liquid Fund (%)

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8. KOTAK GILT - INVESTMENT V/S HDFC GILT FUND
Table No. 8.1: Comparison of Equity schemes
Investment
Information
Kotak Gilt - Investment HDFC Gilt Fund
Fund
Objective
The objective of the Plan is to
generate risk-free returns
through investments in
sovereign securities issued by
the Central Government
and/or State Government(s)
and/or any security
unconditionally guaranteed
by the Government of India,
and/or reverse repos in such
securities. A portion of the
fund may be invested in
Reverse repo, CBLO and/or
other similar instruments as
may be notified to meet the
day-to-day liquidity
requirements of the Plan.
To generate credit risk-free
returns through investments
in sovereign securities issued
by the Central Government
and / or a State Government.
Ideal for investors who wish
to invest for relatively longer
time period.
Composition
of Fund
Fund has 98.18% investment
in Debt of which 98.18% in
Government securities.
Fund has 95.19% investment
in Debt of which 95.19% in
Government securities.
Suitable For Investors who want to invest
money for longer duration
but their first and only
priority is safety of their
investments.
Investors who want to invest
money for longer duration
but their first and only
priority is safety of their
investments.
Fund type Open-Ended Debt Fund Open-Ended Debt Fund
Investment
Plan
Direct Plan - Growth Direct Plan - Growth
Risk Grade Moderate Moderate
Return Grade Above Average Average
AUM as on
31.10.2021
₹ 1941.52 Cr ₹ 1555.51 Cr
NAV as on
31.10.21
₹ 85.55 ₹ 46.25
Expense ratio 0.48% 0.44%

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Table No. 8.2: Annual returns trend of Schemes from 2016-17 to 2020-21
Year
Kotak Gilt - Investment
(%)
HDFC Gilt Fund (%)
2020-21 38.74 28.64
2019-20 28.51 20.73
2018-19 13.21 9.55
2017-18 3.74 2.78
2016-17 -0.60 -1.39
*Annual Returns of schemes are taken on 31st March of every year.
Graph No. 8: Graph showing Annual returns trend of Schemes


Interpretation:
Kotak Gilt - Investment Fund and HDFC Gilt Fund are the schemes invested their
money in Government Securities so there is minimum risk with good returns.
Graph No. 8 has revealed that Kotak Gilt Investment has given very good returns
during last 5 years as compared to HDFC Gilt Fund. In the current year both the
schemes have given very good returns but, Kotak Gilt - Investment Fund was
more aggressive than HDFC Gilt Fund. So, investors should select Kotak scheme
than HDFC scheme in Gilt Fund.


38.74
28.51
13.21
3.74
-0.6
28.64
20.73
9.55
2.78
-1.39
-5
0
5
10
15
20
25
30
35
40
45
2020-21 2019-20 2018-19 2017-18 2016-17
RETURNS
YEAR
Kotak Gilt - Investment (%)HDFC Gilt Fund (%)

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Risk Analysis of different Mutual Fund Schemes of Kotak
as on 31st October, 2021:
Table No. 9.1
Tools

Kotak
Mid-Cap
Emergin
g Equity
Kotak
Focused
Equity
Fund
Kotak
Tax
Saver
Scheme
Kotak
Bluechip
Fund
Kotak
Balanced
Advanta
ge Fund
Kotak
Sensex
ETF Fund
Standard
Deviation
23.94 NA 20.54 20.17 12.47 21.58
Beta 0.88 NA 0.92 0.93 0.87 1
Sharpe
Ratio
0.93 NA 0.83 0.92 0.84 0.74
Treynor's
Ratio
0.25 NA 0.18 0.2 0.12 0.16
Jension's
Alpha
4.58 NA 1.71 2.1 -1.67 0.91
* Ratios calculated on daily returns for last 3 years.
* NA means No Data Available.

Interpretation:
There are five major indicators of risk in Investment. These are applicable to the
analysis of Stocks, Bonds, and Mutual Fund portfolios. They are Standard
Deviation, Beta, Sharpe Ratio, Treynor's Ratio, Jension's Alpha.
The data from Table No.9.1 has revealed that Standard Deviation of all Funds in
Kotak Scheme are performing well. It has indicated that all schemes are having
SD value which is more than Category Average (18.21) except Kotak Balanced
Advantage Fund (12.47). So, all Funds except Kotak Balanced Advantage Fund
are more volatile because a higher SD indicates that the Net Asset Value (NAV)
of that Mutual Fund is more volatile and, it is riskier than a fund with lower SD.
Beta compares a fund’s volatility to a benchmark index over a 36-month time
period. Kotak Sensex ETF Fund is having Beta value equal to 1 which shows that
this fund is more volatile than their benchmark. A beta of lesser than 1 indicates
the investment is less volatile than the market and these schemes are
conservative in nature.

25. Comparative Analysis of Mutual Fund Schemes

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While comparing Sharpe Ratio, it can be said that Kotak Mid-Cap Emerging
Equity (0.93) and Kotak Bluechip Fund (0.92) has risk adjusted performance
because a Mutual Fund with a higher Sharpe Ratio is better because it implies
that it has generated higher returns for every unit of risk was taken.
Treynor’s ratio indicates how much excess return was generated for each unit
of risk taken. Higher the value means, fund has been able to give better returns
for the amount of risk taken. If compared all the schemes in Kotak Mutual Fund,
we can choose Kotak Mid-Cap Emerging Equity (0.25) as it has given higher risk-
adjusted return.
Alpha basically is the difference between the returns an investor expects from a
fund, given its beta, and the return it actually produces. If compared Alpha
mentioned in the Table No.9.1, it can be said that Kotak Mid-Cap Emerging
Equity (4.58) has outperformed its benchmark index and it offered higher
positive Alpha. A positive Alpha means the fund has outperformed its
benchmark index. Whereas, a negative Alpha means the Fund has
underperformed to its benchmark index. The more positive an Alpha is the
healthier for investors.

Risk Analysis of different Mutual Fund Schemes of HDFC
as on 31st October, 2021:
Table No. 9.2
Tools
HDFC
Mid-Cap
Opportu
nities
Fund
HDFC
Focused
30 Fund
HDFC
Tax
Saver
Fund
HDFC
Top 100
Fund
HDFC
Balanced
Advanta
ge Fund
HDFC
Index
Fund -
Sensex
Plan
Standard
Deviation
24.18 23.96 21.98 22.52 19.92 21.65
Beta 0.9 1.04 0.98 1 1.3 1
Sharpe
Ratio
0.75 0.57 0.52 0.57 0.63 0.72
Treynor's
Ratio
0.2 0.13 0.12 0.13 0.1 0.16
Jension's
Alpha
0.98 -2.23 -3.77 -1.81 -4.42 0.57
* Ratios calculated on daily returns for last 3 years.

26. Comparative Analysis of Mutual Fund Schemes

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Interpretation:
There are five major indicators of risk in Investment. These are applicable to the
analysis of Stocks, Bonds, and Mutual Fund portfolios. They are Standard
Deviation, Beta, Sharpe Ratio, Treynor's Ratio, Jension's Alpha.
The data from Table No.9.2 has revealed that Standard Deviation of all Funds in
HDFC Scheme are performing well. It has indicated that all schemes are having
SD value which is more than Category Average (18.21). So, all Funds are more
volatile because a higher SD indicates that the Net Asset Value (NAV) of that
Mutual Fund is more volatile and, it is riskier than a fund with lower SD.
Beta compares a fund’s volatility to a benchmark index over a 36-month time
period. All the funds except HDFC Mid-Cap Opportunities Fund and HDFC Tax
Saver Fund have more than 1 Beta which shows that these funds are more
volatile than their benchmark. A beta of lesser than 1 indicates the investment
is less volatile than the market and these schemes are conservative in nature.
While comparing Sharpe Ratio, it can be said that HDFC Mid-Cap Opportunities
Fund (0.75) and HDFC Index Fund - Sensex Plan (0.72) has risk adjusted
performance because a Mutual Fund with a higher Sharpe Ratio is better
because it implies that it has generated higher returns for every unit of risk was
taken.
Treynor’s ratio indicates how much excess return was generated for each unit
of risk taken. Higher the value means, fund has been able to give better returns
for the amount of risk taken. If compared all the schemes in HDFC Mutual Fund,
we can choose HDFC Mid-Cap Opportunities Fund (0.2) as it has given higher
risk-adjusted return.
Alpha basically is the difference between the returns an investor expects from a
fund, given its beta, and the return it actually produces. If compared Alpha
mentioned in the Table No.9.2, All Funds are having values of Alpha below
Category Average (1.1). So, all Funds in the HDFC Scheme are not performed to
its benchmark index. A positive Alpha means the fund has outperformed its
benchmark index. Whereas, a negative Alpha means the Fund has
underperformed to its benchmark index. The more positive an Alpha is the
healthier for investors.

27. Comparative Analysis of Mutual Fund Schemes

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Findings:
1. Kotak Mid-Cap Emerging Equity is very well managed than HDFC Mid-Cap
Opportunities Fund and there is scope for improvement for HDFC Mid-
Cap.
2. Kotak Focused Equity Fund and HDFC Focused 30 Fund both the schemes
are good and very well managed as well as giving similar average return
in long period.
3. Kotak Tax Saver scheme is more aggressive than HDFC Tax Saver Fund
because it has given high positive returns in all the compared years.
4. Kotak Bluechip Fund and HDFC Top 100 Fund are very good and very well
managed. But Kotak Bluechip Fund was aggressive than HDFC Top 100
Fund in current year.
5. HDFC Balanced Advantage Fund is well managed and very good portfolio
than Kotak Balanced Advantage Fund.
6. Kotak Sensex ETF Fund and HDFC Index Fund - Sensex Plan, both schemes
are very good and given similar average returns in last 5 years.
7. Kotak liquid Fund and HDFC liquid Fund, both schemes have given similar
returns in last 5 years and having similar portfolio.
8. Kotak Gilt Investment has given very good returns during last 5 years as
compared to HDFC Gilt Fund.
9. Kotak Mid-Cap Emerging Equity Scheme is having higher Standard
Deviation, Sharpe Ratio, Treynor's Ratio and Jension's Alpha, so this
Scheme has generated higher returns.
10. HDFC Mid-Cap Opportunities Fund is having higher Standard Deviation,
Sharpe Ratio, Treynor's Ratio and Jension's Alpha, so this Scheme has
generated higher returns.

Conclusions:
After the study of “Comparative Analysis of Mutual Fund Schemes Available at
Kotak Mutual Fund & HDFC Mutual Fund”, it can be concluded that.
1. Both the companies are offering similar types of schemes for different
sectors and taking similar amount of risk, so they provided close returns
with minimum fluctuation.
2. Kotak Mutual Fund schemes are more aggressive than HDFC Mutual Fund
schemes in Large Cap Equity schemes and Mid Cap Equity schemes where

28. Comparative Analysis of Mutual Fund Schemes

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as both the AMC’s schemes are very well managed in Hybrid and Debt
market.
3. Election result, COVID Crisis, Inflation, Budget and any such big
events/factors effect on the performance of Mutual Fund Schemes.
4. Kotak Bluechip Fund is the best scheme in Large cap Equity, Kotak Mid-
Cap Emerging Equity is the best scheme in Mid-Cap sector, Kotak Tax
Saver Scheme is the best scheme in ELSS and Kotak Balanced Advantage
Fund is the best scheme in Balanced Fund for investment.
5. Risk taken by different schemes, Alpha & Beta ratio and portfolio are the
major reasons behind the difference in performance of both Mutual Fund
Schemes.
6. The Indian Mutual Funds Industry has changed totally for good since last
one decade and has shown substantial growth and potential. Though the
Asset under Management and number of schemes has increased
significantly, it is yet to be a household product, and needs to cover the
retail segment effectively.

Suggestions:
1. Kotak Focused Equity Fund and HDFC Focused 30 Fund, Kotak Sensex ETF
Fund and HDFC Index Fund - Sensex Plan, Kotak liquid Fund and HDFC
liquid Fund are the schemes which have given similar returns during last
five years, so investors should select these schemes according to their
convenience and interest.
2. Mutual Fund Liquid schemes are always beat inflation rate and give
positive performance but low returns, so those investors want constant
returns they should invest their money in these schemes.
3. Those investors who are ready to take high risk they should select Kotak
Mid-Cap Emerging Equity and HDFC Mid-Cap Opportunities Fund,
because these schemes are aggressive in nature.
4. Investors should select Equity schemes for high returns in long period
where as they can select Debt schemes for constant returns with
minimum risk for short period.
5. Investors should select HDFC Balanced Advantage instead of Kotak
Balanced Advantage Fund because it is well managed and given higher
returns.

29. Comparative Analysis of Mutual Fund Schemes

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Factsheets:
1. Kotak Fund Factsheet.
2. HDFC Fund Factsheet.

Websites:
1. http://www.moneycontrol.com
2. http://www.kotakmutual.com
3. http://www.valueresearch.com
4. http://www.amfiindia.com
5. http://www.bseindia.com
6. http://www.nseindia.com
7. http://www. economictimes.indiatimes.com