Financial Markets and Institutions: Comparative Analysis Report

This report provides a comparative analysis of mutual funds and investment banks, highlighting their roles and functions within the financial market. The report then delves into a detailed performance analysis of Franklin Blue Chip Funds and Franklin Prima Funds. It examines the investment strategies, performance metrics, and risk measures associated with each fund, including returns, standard deviation, and beta. The analysis includes a comparison of the funds' performance against their respective benchmarks, offering insights into their relative strengths and weaknesses. The report concludes by evaluating the overall performance of both funds, providing a clear understanding of their investment profiles and suitability for different investors, referencing data and insights from Franklin Templeton India and Valueresearchonline.

Running head: FINANCIAL MARKETS AND INSTITUTES
Financial Markets and Institutes
Name of the Student:
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1FINANCIAL MARKETS AND INSTITUTES
Table of Contents
Question 1........................................................................................................................................2
Question 2........................................................................................................................................2
Comparative Analysis between Franklin Blue Chip Funds and Prima Funds.............................2
Franklin Blue Chip Funds............................................................................................................2
Franklin Prima Fund....................................................................................................................4
Bibliography....................................................................................................................................7

2FINANCIAL MARKETS AND INSTITUTES
Question 1
Mutual Fund as an open-ended professionally managed investment fund that well pools
money from a group of investors for the purpose of investment into securities for the purpose of
investment. As an investment institution the mutual funds collect money from various investors
and invests into a diversified portfolio of stocks, bonds, money market instruments and other
common investment asset class. The operations of the mutual fund is structured and designed
well so that the various investment goals, needs and desires can be well catered with the help of
the various investment or mutual fund categories and options designed.
On the other hand, Investment Banks are primarily the financial middlemen, which well
helps in corporation set up like Initial Public Offerings, get a considerable debt finance or
negotiate over the value in the case of merger and acquisition and for facilitation of corporate
reorganization. The investment banks are also known as brokers or advisors for the various
institutional clients. Unlike Mutual Funds where the clients are generally retail investors,
however in the case of investment banking include clients like corporations, pension funds, other
financial institutions, governments and hedge funds are some of the client base of investment
bank.

3FINANCIAL MARKETS AND INSTITUTES
Question 2
Comparative Analysis between Franklin Blue Chip Funds and Prima Funds
Franklin Blue Chip Funds
The Blue Chip Fund invests in a set of large companies for achieving a set of defined long-term
benefits (Franklin India Bluechip Fund - Invest Now with Franklin Templeton India, 2020). The
key criteria or screening that are well placed are as follows:
 Running large and established set of business
 Having a sound and long track record of business
 Have a sound leadership in the industry in which the company operates.
Performance Analysis: The returns that have been generated by the fund for the defined period
of five years has been around 3.21%. While the S&P BSE 100 Index and Equity Large Cap
Index standing as the Benchmark for the company just generated a return of about 5.55% and
5.12% respectively (Research, et al., 2020). In terms of risk measures has a mean return of
3.94%, standard deviation of 12.59% and a beta of 0.95. If we well calculate the excess positive
return that is generated from the fund it has been -4.88%. So the fund has underperformed the
benchmark index and has a risk ratio.

4FINANCIAL MARKETS AND INSTITUTES
Franklin Prima Fund
The prima fund on the other hand invests in a diversified set of equity portfolio that primarily
invests into a range of mid cap stocks. Stocks which have a potential form of generating sound

5FINANCIAL MARKETS AND INSTITUTES
return and growth than the large cap companies are generally selected for this fund (Franklin
India Prima Fund - Invest Now with Franklin Templeton India, 2020).
Performance Analysis: The returns that have been generated by the fund for the defined period
of five years has been around 6.06%. While the S&P BSE 100 Midcap Index and Equity Mid
Cap Index standing as the Benchmark for the company just generated a return of about 7.75%
and 6.24% respectively. In terms of risk measures has a mean return of 5.57%, standard
deviation of 13.03% and a beta of 0.73. If we well calculate the excess positive return that is
generated from the fund it has been -1.13% (Research, et al., 2020).
Now when considering investment in two of the options analyzed it can be clearly seen that the
Prima Fund on an overall note has comparatively shown a better performance rather than Blue
Chip Fund both in risk and return terms and measures.

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7FINANCIAL MARKETS AND INSTITUTES
Bibliography
Franklin India Bluechip Fund - Invest Now with Franklin Templeton India. (2020). Retrieved 9
March 2020, from https://www.franklintempletonindia.com/investor/fund-details/fund-
overview/franklin-india-bluechip-fund-4614
Franklin India Prima Fund - Invest Now with Franklin Templeton India. (2020). Retrieved 9
March 2020, from https://www.franklintempletonindia.com/investor/fund-details/fund-
overview/franklin-india-prima-fund-4615?
&utm_source=google&utm_medium=cpc&utm_campaign=FT-S-Brand-Product-
EM&utm_adgroup=BrPr-Prima-
EM&utm_ad=RSA&gclid=Cj0KCQjw0pfzBRCOARIsANi0g0uylrbZrr9rnP00aMkl6oR3oKBK
bVmaS0cnaCgok30hsR0yBFiOMZEaAn3oEALw_wcB&gclsrc=aw.ds
Research, F., Research, V., fund, M., Cap, E., fund, M., & Fund, F. (2020). Franklin India
Bluechip Fund. Retrieved 9 March 2020, from
https://www.valueresearchonline.com/funds/114/franklin-india-bluechip-fund
Research, F., Research, V., fund, M., Cap, E., fund, M., & Fund, F. (2020). Franklin India Prima
Fund. Retrieved 9 March 2020, from https://www.valueresearchonline.com/funds/115/franklin-
india-prima-fund