Mutual Fund (Rajni - (Mba (Fin) Rdias

RAJANI -MBA(FIN)-4TH SEM ,
(RDIAS-IPU)
CHAPTER – 1
INTRODUCTION
1.1 INTRODUCTION TO MUTUAL FUND
A Mutual Fund is a trust that pools the savings of a number of investors who sha
re a common financial goal. The money thus collected is invested by the fund man
ager in different types of securities depending upon the objective of the scheme
.These could range from shares to debentures to money market instruments. The in
come earned in these investments and the capital appreciation realized by the sc
heme 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 port
folio at a relatively low cost. Anybody with an invest able surplus of a few tho
usand rupees can invest in Mutual Funds. Each Mutual Fund scheme has a defined i
nvestment objective and strategy.
A mutual fund is the ideal investment vehicle for today’s complex and modern fin
ancial scenario. Markets for equity shares, bonds and other fixed income instrum
ents, real estate, derivatives and other assets have become mature and informati
on driven. Price changes in these assets are driven by global events occurring i
n faraway places. A typical individual is unlikely to have the knowledge, skills
, inclination and time to keep track of events, understand their implications an
d act speedily.
A mutual fund is answer to all these situations. It appoints professionally qual
ified and experienced staff that manages each of these functions on a fulltime b
asis. The large pool of money collected in the fund allows it to hire such staff
at a very low cost to each investor. In fact, the mutual fund vehicle exploits
economies of scale in all three areas –research, investment and transaction proc
essing.
A draft offer document is to be prepared at the time of launching the fund. Typi
cally, it pre specifies the investment objective of the fund, the risk associate
d, the cost involved in the process and the broad rules
for entry into and exit from the fund and other areas of operation. In India, a
s in most countries, these sponsors need approval from a regulator, SEBI in our
case. SEBI looks at track records of the sponsor and its financial strength in g
ranting 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 and perhaps a third one to handle registry work for the
unit holders of the fund.In the Indian context, the sponsors promote the Asset M
anagement Company also,in which it holds a majority stake. In many cases a spons
or can hold a 100% stake in the Asset Management Company (AMC). E.g. Birla Globa
l Finance is the sponsor of the Birla Sun Life Asset Management Company Ltd., wh
ich has floated different mutual funds schemes and also acts as an asset manager
for the funds collected under the schemes.
As per SEBI regulations, mutual funds can offer guaranteed returns for a maximum
period of one year. In case returns are guaranteed, the name of the guarantor a
nd how the guarantee would be honored is required to be disclosed in the offer d
ocument.
Investments in securities are spread across a wide cross-section of industries a
nd sectors and thus the risk is reduced. Diversification reduces the risk becaus
e all stocks may not move in the same direction in the same proportion at the sa
me time. Mutual fund issues units to the investors in accordance with quantum of
money invested by them. Investors of mutual funds are known as unit holders.
1.2 THE CONCEPT OF MUTUAL FUND IN DETAIL :-
A mutual fund uses the money collected from investors to buy those assets which
are specifically permitted by its stated investment objective. Thus, an equity f
und would buy equity assets – ordinary shares, preference shares, warrants etc.
A bond fund would buy debt instruments such as debentures, bonds or government s
ecurities. It is these assets which are owned by the investors in the same propo
rtion as their contribution bears to the total contributions of all investors pu
t together.
Any change in the value of the investments made into capital market instruments
(such as shares, debentures etc) is reflected in the Net Asset Value (NAV) of th
e scheme. NAV is defined as the market value of the Mutual Fund scheme s assets
net of its liabilities. NAV of a scheme is calculated by dividing the market val
ue of scheme s assets by the total number of units issued to the investors.
A Mutual Fund is an investment tool that allows small investors access to a well
-diversified portfolio of equities, bonds and other securities. Each shareholder
participates in the gain or loss of the fund. Units are issued and can be redee
med as needed. The funds Net Asset value (NAV) is determined each day.
When an investor subscribes to a mutual fund, he or she buys a part of the asset
s or the pool of funds that are outstanding at that time. It is no different fro
m buying “shares” of joint stock Company, in which case the purchase makes the i
nvestor a part owner of the company and its assets. In fact, in the USA, a mutua
l fund is constituted as an investment company and an investor “buys in to the f
und”, meaning he buys the shares of the fund. In India, a mutual fund is constit
uted as a Trust and the investor subscribes to the “units” issued by the fund, w
hich is where the term Unit Trust comes from. However, whether the investor gets
fund shares or units is only a matter of legal distinction. In any case, a mutu
al fund shareholder or unit-holder is a part owner of the fund’s assets. The ter
m unit-holder includes the mutual fund account-holder or close-end fund sharehol
der.
A Mutual Fund is a trust that pools the savings of a number of investors who sha
re a common financial goal. The money thus collected is then invested in capital
market instruments such as shares, debentures and other securities. 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 Mu
tual fund is most suitable investment for the common man as it offers an opportu
nity to invest in a diversified, professionally managed basket of securities at
a relatively low cost.
1.3 MUTUAL FUND OPERATION FLOW CHART :-
CHART 1.2
From the above chart , it can be observed that how the money from the investors
flow and they get returns out of it. With a small amount of fund, investors pool
their money with the funds managers. Taking into consideration the market strat
egy the funds managers invest this pool of money into reliable securities. With
ups and downs in market returns are generated and they are passed on to the inve
stors. The above cycle should be very clear and also effective.
The fund manager while investing on behalf of investors takes into consideration
various factors like time, risk, return, etc. so that he can make proper invest
ment decision.
1.4 ADVANTAGES OF MUTUAL FUND :-
The following are the major advantages offered by mutual funds to al
l investors:-
• PROFESSIONAL EXPERTISE : -
Fund managers are professionals who track the market on an on going basis. With
heir mix of professional qualification and market knowledge, they are better pla
ced than the average investor to understand the markets.
• DIVERSIFICATION :-
Since a mutual fund scheme invests in number of stocks and/or debentures, the ss
ociated risks are greatly reduced.
• RELATIVELY LESS EXPENSIVE :-
When compared to direct investments in the capital market, mutual funds cost les
s. This is due to savings in brokerage costs, demat costs, depository costs etc.
• LIQUIDITY :-
Investments in mutual funds are completely liquid and can be redeemed at Net Ass
ets Value (NAV) related price on any working day.
• TRANSPARENCY :-
You will always have access to up-to-date information on the value of your inves
tment in addition to the complete portfolio of investments, the proportion alloc
ated to different assets and the fund manager’s investment strategy.
• FLEXIBILITY :-
Through features such as regular investment plans, regular withdrawal plans and
dividend investment plans, you can systematically invest or withdraw funds accor
ding to your needs and convenience.
• SEBI REGULATED :-
All mutual funds are registered with SEBI and function within the provisions an
d regulations that protect the interests of investors.
1.5 DISADVANTAGES OF MUTUAL FUND :-
The main disadvantages of mutual fund are high lightened as below:-
• NO CONTROL OVER COST :-
Any investor in a mutual fund has no control over the overall cost of investing.
He pays investment management fees as long as he remains with fund, albeit in r
eturn for the professional management and research. Fees are payable even in dec
lining stage. A mutual fund investor also pays fund distribution costs, which he
would not incur in direct investing. However, this shortcoming only means that
there is a cost to obtain the benefits of mutual fund services.
• NO TAILOR-MADE PORTFOLIOS :-
Investors who invest on there own can build their own portfolios
of shares and bonds and other securities. Investing through funds means he dele
gates this decision to the fund managers. The very high-net-worth individuals or
large corporate investors may find this to be a constraint in achieving their o
bjectives. However, most mutual fund managers help investors overcome this const
raint by offering families of funds- a large number of different schemes – withi
n their own management company. An investor can choose form different investment
plans and construct a portfolio of his own.
• MANAGING A PORTFOLIO OF FUNDS :-
Availability of a large number of funds can actually mean too much choice for
the investor. He may again need advice on how to select a fund to achieve his o
bjectives, quite similar to the situation when he has to select individual share
s or bonds to invest in.
• ENTRY AND EXIT COST :-

Mutual funds are a victim of their own success. When a large body like a f
und invests in shares, the concentrated buying and selling often results in adve
rse price movement i.e. at the time of buying, the fund ends up paying a high pr
ice and by selling it realizes a lower price. For obvious reasons, this problem
is even more severe for funds investing in small capitalization stocks. However,
given the large size of debt market, excluding UTI, most debt funds do not face
this problem.
• CHANGE OF INDEX COMPOSITION :-
The indices changing over the world to reflect changing market conditions. T
here is an inherent survivorship bias in this process, with the bad stocks bided
out and replaced by emerging blue chips. This is a severe problem in India with
the sensex having being changing twice in last 5 years, with each change being
quite substantial. Another reason for change index composition is Mergers and Ac
quisitions. The weight age of the shares of a particular company in the index ch
anges if it acquires a large company not a part of the index.
1.6 WHY INVESTOR NEEDS MUTUAL FUND:-
Mutual funds offer benefits, which are too significant to miss out. Any investme
nt has to be judged on the yardstick of return, liquidity and safety. Convenienc
e and tax efficiency are the other benchmarks relevant in mutual fund investment
. In the wonderful game of financial safety and returns are the tows opposite go
als and investors cannot be nearer to both at the same time. The crux of mutual
fund investing is averaging the risk.
Many investors possibly don’t know that considering returns alone, many mutual f
unds have outperformed a host of other investment products. Mutual funds have hi
storically delivered yields averaging between 9% to 25% over a medium to long ti
me frame. The duration is important because like wise, mutual funds return taste
bitter with the passage of time. Investors should be prepared to lock in their
investments preferably for 3 years in an income fund and 5 years in an equity fu
nds. Liquid funds of course, generate returns even in a short term.
1.7 MUTUAL FUND RISK :-
Mutual funds face risks based on the investments they hold. For example, a bond
fund faces interest rate risk and income risk. Bond values are inversely related
to interest rates. If interest rates go up, bond values will go down and vice v
ersa. Bond income is also affected by the changes in interest rates. Bond yields
are directly related to interest rates falling as interest rates fall and risin
g as interest rates.
Similarly, a sector stock fund is at risk that its price will decline due to dev
elopments in its industry. A stock fund that invests across many industries is m
ore sheltered from this risk defined as industry risk.
Followings are glossary of some risks to consider when investing in mutual funds
:-
• COUNTRY RISK :-
The possibility that political events (a war, national election), financial prob
lems (rising inflation, government default), or natural disasters will weaken a
country’s economy and cause investments in that country to decline.
• INCOME RISK :-
The possibility that political events (a war, national election), financial prob
lems (rising inflation, government default), or natural disasters will weaken a
country’s economy and cause investments in that country to decline.
• MARKET RISK :-
The possibility that stock fund or bond fund prices overall will decline over sh
ort or even extended periods. Stock and bond markets tend to move in cycles, wit
h periods when prices rise and other periods when prices fall.
GRAPH 1.3:- RISK RETURN REWRAD IN MUTUAL FUND
This graph shows risk and return impact on various mutual funds. There is a dire
ct relationship between risks and return, i.e. schemes with higher risk also hav
e potential to provide higher returns.
CHAPTER-2
OBJECTIVES OF THE STUDY
The present study has been undertaken with the object of examining, analyzing an
d inferring the performance of the mutual funds, The main objectives of the stud
y are as follows :-
1) Analyzing mutual fund awareness in retail investors of HDFC assets Manag
ement Company in DELHI.
2) To know the Preferences for the portfolios.
3) To find out the most preferred channel.
4) To find out what should do to boost Mutual Fund Industry.
5) To know why one has invested or not invested in HDFC Mutual fund
6) To analyze the history of HDFC mutual fund
7) To learn about various aspect of HDFC mutual fund
8) To understand the best way to attract customer investing in mutual fund
by understanding the factors responsible for making a mutual fund successful.
2.1 PURPOSE OF THE STUDY
With liberalization, privatization and globalization there has been a major chan
ge in the Indian Mutual Funds Industry. The momentum is on and one is sure to se
e similar hectic activity at the offices of the new entrants especially after th
e 90’s as private sector gained entry in the Indian markets.
With the private sector penetration, a large number of schemes have also been in
troduced due to which the average consumer has become vary sensitive to the new
schemes coming its way. So to ensure about the various consumer attitudes, a sur
vey was undertaken.
De facto, to ensure what the “consumer thinks” & “what it thinks the best” we un
dertook a consumer survey, to get a clear picture of the future of the Mutual Fu
nds companies who are busy wooing the customers, with their lucrative schemes, t
o survive the rat race & emerge as no.1 in this field. The main purpose of the s
tudy are as follows:-
• To understand the best way to attract customer investing in mutual fund
by understanding the factors responsible for making a mutual fund successful.
• To find out what should do to boost Mutual Fund Industry.
• Analyzing mutual fund awareness in retail investors of HDFC assets Manag
ement Company in DELHI.
• To find out the most preferred channel.
2.2 SCOPE OF THE STUDY
A big boom has been witnessed in Mutual Fund Industry in resent times. A large n
umber of new players have entered the market and trying to gain market share in
this rapidly improving market.
The study will help to know the preferences of the customers, which company, por
tfolio, mode of investment, option for getting return and so on they prefer. Thi
s project report may help the company to make further planning and strategy.
CHAPTER-3
RESEARCH METHODOLOGY OF THE STUDY
RESEARCH METHODOLOGY:-
Research methodology is a way to systematically show the research problem. It ma
y be understood as a science of studying how research is done scientifically. It
is necessary for the researcher to know not only the research methods but also
the methodology. This Section includes the methodology which includes. The resea
rch design, objectives of study, scope of study along with research methodology
and limitations of study etc.
3.1- RESEARCH DESIGN:-
Research design can be described as an out line of a research project working or
a pattern. In a research design there are series of prior decision that togethe
r provide a master plan for completing a research project. Research design is pr
oved to be a bridge between what has been established and what is to be done in
conduct of the studies. Research design should be compressive and it should prov
ide which method to be used and what work to be done.
Research design describes as a master plan a series of key decisions that serves
a model for conducting a research project. There are the main components of res
earch design.
Objective of research
Data inputs
Analysis of data collected
The research design was exploratory type and the focus was on getting mutual fun
d’s employees views for various products, expectations from market.
EXPLORATORY RESEARCH:-
Exploratory study goes beyond description and attempts to explain the reasons fo
r the phenomenon that the descriptive study only observed. The researcher uses t
heories or at least hypotheses to account for the forces that caused a certain p
henomenon to occur.
3.2 – SOURCES OF DATA:-
The gathering of data may range from a simple observation at one location to a g
randiose survey of multinational corporations at sites in different parts of the
world. The method selected will largely determine how the data are collected. D
ATA is the facts presented to the researcher from the study’s environment. Chara
cteristics of the data are as follows:
Data are more metaphorical than real
Data are processed by our senses-often limited in comparison to
The senses of other living organisms.
Capturing data are said to be trustworthy because they may be
Verified.
Data classify their verity by closeness to the phenomena
There are two kinds of data that can be collected for research purpose. Based o
n the requirement in the research appropriate data is collected.
A - PRIMARY SOURCE:-
Primary data are collected and gathered for the first time. Primary d
ata are sought for their proximity to the truth and controls over error. Advanta
ges of primary data are:
Researchers can collect precisely the information they want.
They usually can specify the operational definitions used and can elimin
ate, or at least monitor and record the extraneous influences on the data as the
y are gathered.
B – SECONDARY SOURCE:-
Someone else collects secondary data. So, it becomes secondary information for t
he research. Secondary data have had least one level of interpretation inserted
between the event and its recording. The secondary data was collected on the ba
sis of organizational file, official records, news papers, magazines, management
books, preserved information in the company’s database and website of the compa
ny.
Reasons for using the secondary data are listed below:
They fill a need for specific reference or citation on some point
Secondary data are an integral part of a larger research study
Secondary data may be used as the sole basis for a research study, since
In many research situations one cannot conduct primary research
Because of physical, legal, or cost influences.
Analyzing the requirement of data, it was found that primary data is more import
ant for achieving Research Objective. Primary data is collected with the help o
f interviews.
3.3- SAMPLING :-
Sampling refers to the method of selecting a sample from a given universe with a
view to draw conclusions about that universe. A sample is a representative of t
he universe selected for study.
SAMPLE SIZE:-
Large sample gives reliable result than small sample. However, it is not feasibl
e to target entire population or even a substantial portion to achieve a reliabl
e result. So, in this aspect selecting the sample to study is known as sample si
ze. Hence, for my project my sample size was 50.
The Sample Size consists of both the Professional and Business class people. IT
peoples, Doctors, Jewelers, Timber Merchants & Real estate Agents are taken as S
ample.
SAMPLING TECHNIQUE:-
Random sampling technique was used in the survey conducted.
TOOLS OF ANALYSIS:-
Data has been presented with the help of bar graph, pie charts, line graph
s etc.
PLAN OF ANALYSIS:-
Tables were used for the analysis of the collected data. The data is also
neatly presented with the help of statistical tools such as graphs and pie chart
s. Percentages and averages have also been used to represent data clearly and ef
fectively.
3.4 - DATA COLLECTION INSTRUMENT DEVELOPMENT:-
The mode of collection of data will be based on Survey Method and Field Ac
tivity. Primary data collection will base on personal interview. I have prepared
the questionnaire according to the necessity of the data to be collected.
3.5 LIMITATIONS OF THE STUDY:-
This study also includes some limitations which have been discussed as fo
llows:
• Though every one used to be very co-operative but every detail was unabl
e to be disclosed to me as the officials has to maintain secrets of the company.
• It is difficult to cover all the function of the company.
• Because of the limited time period, the survey work was conducted in the
Delhi region and the sample size was taken as 20 respondents only.
• Some of the persons were not so responsive.
• Some respondents were reluctant to divulge personal information which ca
n affect the validity of all responses.
• Possibility of error in data collection because many of investors may ha
ve not given actual answers of my questionnaire.
CHAPTER – 4
REVIEW OF LITERATURE
All information pertaining to mutual fund has been collected through vast source
of literature which includes books, journals, websites and some topics have bee
n picked from newspaper as well.
BOOKS: - Books have proved to be the most important source of information contai
ned in the project most theoretical aspects related to mutual funds have been ta
ken from it, topics like advantages and disadvantage of mutual fund, types of mu
tual fund and structure have been directly from there.
WEBSITES:- Guidelines of SEBI and other aspects of mutual fund which are subjec
t to change over time have been collected from websites of securities and exchan
ge board of India national stock exchange and mutual fund sites.
NEWSPAPER:- Newspaper have provided with the fresh updates and other information
related to what investment strategies can be recommended to the investors.
JOURNAL:- Bostan journal have also provided with some valuable information perta
ining to model portfolios which has helped in better understanding of the subjec
t concerned.
CHAPTER-5
INTRODUCTION TO THE INDUSTRY
5.1 THE HISTORY OF INDIAN MUTUAL FUND:-
The mutual fund industry in India started in 1963 with the formation of Unit Tru
st of India, at the initiative of the Government of India and Reserve Bank. Thou
gh the growth was slow, but it accelerated from the year 1987 when non-UTI playe
rs entered the Industry.
In the past decade, Indian mutual fund industry had seen a dramatic improvement,
both qualities wise as well as quantity wise. Before, the monopoly of the marke
t had seen an ending phase; the Assets Under Management (AUM) was Rs67 billion.
The private sector entry to the fund family raised the Aum to Rs. 470 billion in
March 1993 and till April 2004; it reached the height if Rs. 1540 billion.
The Mutual Fund Industry is obviously growing at a tremendous space with the mut
ual fund industry can be broadly put into four phases according to the developme
nt of the sector. Each phase is briefly described as under.
FIRST PHASE -1964-87 (MONOPOLY OF UTI) :-
An Act of Parliament established Unit Trust of India (UTI) on 1963. It was set u
p by the Reserve Bank of India and functioned under the Regulatory and administr
ative control of the Reserve Bank of India. In 1978 UTI was de-linked from the R
BI and the Industrial Development Bank of India (IDBI) took over the regulatory
and administrative control in place of RBI. The first scheme launched by UTI was
Unit Scheme 1964. At the end of 1988 UTI had Rs.6, 700 crores of assets under m
anagement.
SECOND PHASE -1987-93( ENTRY OF PUBLIC SECTOR FUNDS) :-
1987 marked the entry of non- UTI, public sector mutual funds set up by public s
ector banks and Life Insurance Corporation of India (LIC) and General Insurance
Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund e
stablished in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab Nationa
l Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (J
un 90), and Bank of Baroda
Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had
set up its mutual fund in December 1990.
At the end of 1993, the mutual fund industry had assets under management of Rs.4
7, 004 crores.
THIRD PHASE-1993-2003(ENTRY OF PRIVATE SECTOR FUNDS):-
With the entry of private sector funds in 1993, a new era started in the Indian
mutual fund industry, giving the Indian investors a wider choice of fund familie
s. Also, 1993 was the year in which the first Mutual Fund Regulations came into
being, under which all mutual funds, except UTI were to be registered and govern
ed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the f
irst private sector mutual fund registered in July 1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive
and revised Mutual Fund Regulations in 1996. The industry now functions under t
he SEBI (Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign mutual f
unds setting up funds in India and also the industry has witnessed several merge
rs and acquisitions. As at the end of January 2003, there were 33 mutual funds w
ith total assets of Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44, 54
1 crores of assets under management was way ahead of other mutual funds.
FOURTH PHASE-(SINCE FEBRUARY 2003) :-
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI w
as bifurcated into two separate entities. One is the Specified Undertaking of th
e Unit Trust of India with assets under management of Rs.29, 835 crores as at th
e end of January 2003, representing broadly, the assets of US 64 scheme, assured
return and certain other schemes. The Specified Undertaking of Unit Trust of In
dia, functioning under an administrator and under the rules framed by Government
of India and does not come under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76, 000 cr
ores of assets under management and with the setting up of a UTI Mutual Fund, co
nforming to the SEBI Mutual Fund Regulations, and with recent mergers taking pla
ce among different private sector funds, the mutual fund industry has entered it
s current phase of consolidation and growth. As at the end of October 31, 2003,
there were 31 funds, which manage assets of Rs.126726 crores under 386 schemes.
GRAPH:-5.1:- The following figure shows the growth in AUM (Asset under Managemen
t) of the Indian Mutual Fund Industry as on March 2009
Erstwhile UTI was bifurcated into UTI Mutual fund and the Specified Undertaking
of the Unit Trust of India effective from February 2003. The Assets under manage
ment of the Specified Undertaking of the Unit Trust of India has thereof been ex
ecuted from the total assets of the industry as a whole from February 2003 onwar
ds. Today there are over 30 AMC’s offering a huge number of schemes giving the i
nvestor a huge horizon to choose from. The market has become very competitive wi
th the companies fighting tooth and nail to attract and keep the investor from i
nvesting in their competitor’s schemes.
5.2 STRUCTURE OF A MUTUAL FUND :-
CHART-5.2:-
THE STRUCTURE CONSISTS OF:-

SPONSOR:-
Sponsor is the person who acting alone or in combination with another body corpo
rate establishes a mutual fund. Sponsor must contribute at least 40% of the net
worth of the Investment managed and meet the eligibility criteria prescribed und
er the Securities and Exchange Board of India (Mutual Fund) Regulations, 1996. T
he sponsor is not responsible or liable for any loss or shortfall resulting from
the operation of the Schemes beyond the initial contribution made by it towards
setting up of the Mutual Fund.
TRUST
The Mutual Fund is constituted as a trust in accordance with the provisions of t
he Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered under th
e Indian Registration Act, 1908.
TRUSTEE
Trustee is usually a company (corporate body) or a Board of Trustees (body of in
dividuals). The main responsibility of the Trustee is to safeguard the interest
of the unit holders and ensure that the AMC functions in the interest of investo
rs and in accordance with the Securities and Exchange Board of India (Mutual Fun
ds) Regulations, 1996, the provisions of the Trust Deed and the Offer Documents
of the respective Schemes. At least 2/3rd directors of the Trustee are independe
nt directors who are not associated with the Sponsor in any manner
FOLLOWING ARE THE RIGHTS OF TRUSTEES:-
Approve each of the schemes floated by the assets Management Company.
Right to request any necessary information from assets Management Compan
y.
Right to take corrective action if they believe that of fund’s business.
Right to dismiss the assets Management Company.
Ensure that any shortfall in net worth of the assets Management Company
is made up.
FOLLOWING ARE THE OBLIGATIONS OF TRUSTEES:-
Enter in to an investment management agreement with the assets Managemen
t Company.
Ensure that the fund’s transactions are in accordance with the trust dee
d.
Furnish to SEBI on a half yearly basis, a report on the fund’s activitie
s.
Ensure that no change in the fundamental attributes of any scheme or the
trust or any other change, which would affect the interest of unit holder, happ
ens with informing to unit holder.
Review the investor complaints received and redressed of the same by ass
ets Management Company
ASSET MANAGEMENT COMPANY (AMC)
The AMC is appointed by the Trustee as the Investment Manager of the Mutual Fund
. The AMC is required to be approved by the Securities and Exchange Board of Ind
ia (SEBI) to act as an asset management company of the Mutual Fund. At least 50%
of the directors of the AMC are independent directors who are not associated wi
th the Sponsor in any manner. The AMC must have a net worth of at least 10 cores
at all times.
FOLLOWING ARE THE OBLIGATIONS OF ASSETS MANAGEMENT COMPANY:-
Float investment schemes only after getting approval from the trustees a
nd SEBI.
Send quarterly reports to trustees.
Make the required disclosures to the investors in the area such as calcu
lation of NAV and repurchase price.
Must maintain a net worth of at least Rs.10 crores at all the times
Will not purchase or sale securities through any broker with the brokera
ge of 5 % or more of the aggregate purchases and sale of securities made by the
Mutual Fund in all its schemes.
Assets Management Company cannot act as trustees of any other Mutual Fun
d.
Do not undertake any other activity conflicting with managing the fund.
FOLLOWING ARE THE BODIES APPOINTED BY THE TRUSTEES/AMC:-

Custodian is the responsible person for physical handling and safe keepi
ng of the securities. He should be independent of the sponsor and registered wit
h SEBI.
Indian capital market is moving away from physical certificates for secu
rities to dematerialized form with a depository. He holds dematerialized securit
y holdings of Mutual Fund.
REGISTRAR AND TRANSFER AGENT
The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer A
gent to the Mutual Fund. The Registrar processes the application form, redemptio
n requests and dispatches account statements to the unit holders. The Registrar
and Transfer agent also handles communications with investors and updates invest
or records.
5.3 INVESTORS PROFILE:-
An investor normally prioritizes his investment needs before undertaking an inve
stment. So different goals will be allocated to different proportions of the tot
al disposable amount. Investments for specific goals normally find their way int
o the debt market as risk reduction is of prime importance, this is the area for
the risk-averse investors and here, Mutual Funds are generally the best option.
One can avail of the benefits of better returns with added benefits of anytime
liquidity by investing in open-ended debt funds at lower risk, this risk of defa
ult by any company that one has chosen to invest in, can be minimized by investi
ng in Mutual Funds as the fund managers analyze the companies financials more mi
nutely than an individual can do as they have the expertise to do so.
Moving up the risk spectrum, there are people who would like to take some risk a
nd invest in equity funds/capital market. However, since their appetite for risk
is also limited, they would rather have some exposure to debt as well. For thes
e investors, balanced funds provide an easy route of investment, armed with expe
rtise of investment techniques, they can invest in equity as well as good qualit
y debt thereby reducing risks and providing the investor with better returns tha
n he could otherwise manage. Since they can reshuffle their portfolio as per mar
ket conditions, they are likely to generate moderate returns even in pessimistic
market conditions.
Next comes the risk takers, risk takers by their nature, would not be averse to
investing in high-risk avenues. Capital markets find their fancy more often than
not, because they have historically generated better returns than any other ave
nue, provided, the money was judiciously invested. Though the risk associated is
generally on the higher side of the spectrum, the return-potential compensates
for the risk attached.
5.4 POSITIONING STRATEGY OF MUTUAL FUND INDUSTRY: -
Positioning starts with a product. But positioning is not what you do to a produ
ct. Positioning is what you do to the mind of the prospect. That is, you positio
n the product in the mind of prospect. A company’s differentiating and positioni
ng strategy must change as the product, market, and competitors change over time
. . There should be no under positioning, over positioning, confused positioning
or doubtful positioning.
CHANNEL OF DISTRIBUTION:-
In Every asset Management Company’s distribution channel played very important r
oles.
Here assets management companies have distributors like:-
Consultants
Agents
Distributors
Advisers
Broker
Their role is very important for Assets Management Company’s Office.
5.5 PROMOTIONAL TOOLS EMPLOYED BY VARIOUS MUTUAL FUND COMPANIES:-
Some specific other document help to increase selling product like: -
• BANNERS:-
Banners define brief idea of scheme, it should be very attractive with specific
objective & its related picture in city, and Banners keep in specific places whi
ch very help to do good publicity. It distributes only by AMC’s office.
When any new scheme is launched or any new NFO coming up that times company make
banners before few days. Its helps to good advertising & easy cover to customer
or people.
• APPLICATION FORM :-
Any product like Equity, debt and balance, investor should fill up its common
Application forms.
Form define acknowledge slip which give return to customer. Actually 3-time stam
p done in form, one of them is acknowledged slip These forms are distributed by
Assets Management Company’s office. It is all Assets Management Company’s office
duty to dispatch forms to their customer like agents, brokers, and advisers tim
e to time.
• BROACHERS:-
Broachers include brief history of company. It defines when and where assets man
agement Company invests investor’s money.
This defines performance of each scheme product & also defines its comparison to
last 3 months to more than 5 years.
In end of every month Assets Management Company’s office send Boucher to their i
nvestors, brokers, agents, advisers regularly.
5.6 MUTUAL FUND INVESTING STRATEGIES:
• Systematic Investment Plans (SIPs)
These are best suited for young people who have started their careers and need t
o build their wealth. SIPs entail an investor to invest a fixed sum of money at
regular intervals in the Mutual fund scheme the investor has chosen, an investor
opting for SIP in xyz Mutual Fund scheme will need to invest a certain sum on m
oney every month/quarter/half-year in the scheme.
• Systematic Withdrawal Plans (SWPs)

These plans are best suited for people nearing retirement. In these plans, an in
vestor invests in a mutual fund scheme and is allowed to withdraw a fixed sum of
money at regular intervals to take care of his expenses
• Systematic Transfer Plans (STPs)
They allow the investor to transfer on a periodic basis a specified amount from
one scheme to another within the same fund family – meaning two schemes belongin
g to the same mutual fund. A transfer will be treated as redemption of units fro
m the scheme from which the transfer is made. Such redemption or investment will
be at the applicable NAV. This service allows the investor to manage his invest
ments actively to achieve his objectives. Many funds do not even charge any tran
saction fees for his service – an added advantage for the active investor.
5.7 NET ASSET VALUE:-
The Net Asset Value or NAV is a term used to describe the value of an entity s a
ssets less the value of its liabilities. The term is commonly used in relation t
o collective investment schemes. It may also be used as a synonym for the book v
alue of a firm.
NAV covers the company s current asset and liability position. Investors
might expect the company to have large growth prospects, in which case they wou
ld be prepared to pay more for the company than the NAV suggests.
The NAV is usually below the market price because the current values of the fund
’s assets are higher than the historical financial statements used in the NAV ca
lculation.
CALCULATING NET ASSET VALUE
Unit capital is the investor’s subscriptions. In MF it is not treated
as a liability. Investments made on behalf of the investors are assets side of
the balance sheet. There are liabilities of short-term nature.
FUNDS NET ASSET = ASSET – LIABILITIES

NAV = Net Assets
Issued Units
I.e.
NAV= (market value of investments + other accrued income + other asse
ts – accrued expenses – other payables –other liabilities)/ (no. Of units outsta
nding as at the NAV date)
THE FACTOR AFFECTING THE NAV ARE AS FOLLOWING:
1. Capital gains or losses on the sale or purchase of investment
Securities.
2. Dividend and income earned on the assets
3. Capital appreciation in the underlying value of the stocks holds in the portf
olio
4. Other assets and liabilities
5. Number of units sold or purchased
5.8 FACTS ABOUT MUTUAL FUND
Equity Instruments like shares form only a part of the securities held b
y Mutual Funds. Mutual Funds also invest in debt securities, which are relativel
y much safer.
The biggest advantage of Mutual Funds is their ability to diversify the
risk.
Mutual Funds are there in India since 1964. Mutual Funds market is much
evolved in U.S.A and is there for last 60 years.
Mutual Funds are the best solution for people who want to manage risk an
d get good returns.
The size of Mutual Funds market in India is Rs. 107728 crores and that i
n U.S.A is many times higher.
According to the SEBI - NCAER Survey of Indian Investors about 15 millio
n or 8.7% of the households have invested in Mutual Funds and there are nearly 2
3 million unit holders in India.
30% of investors fall in the income group of investors having monthly in
come up to Rs. 10,000/-.
In U.S.A there are more deposits in the mutual funds than in bank deposi
ts.
The truth is, as investors we should always pay attention to our mutual
funds and continue to monitor them.
5.9 PERFORMANCE MEASURES OF MUTUAL FUNDS:
Mutual Fund industry today, with about 30 players and more than six hundred sche
mes, is one of the most preferred investment avenues in India. However, with a p
lethora of schemes to choose from, the retail investor faces problems in selecti
ng funds. Factors such as investment strategy and management style are qualitati
ve, but the funds record is an important indicator too.
Though past performance alone cannot be indicative of future performance, it is,
frankly, the only quantitative way to judge how good a fund is at present. Ther
efore, there is a need to correctly assess the past performance of different Mut
ual Funds. Worldwide, good Mutual Fund companies over are known by their AMC’s a
nd this fame is directly linked to their superior stock selection skills. For Mu
tual Funds to grow, AMC’s must be held accountable for their selection of stocks
. In other words, there must be some performance indicator that will reveal the
quality of stock selection of various AMC’s.
Return alone should not be considered as the basis of measurement of the perform
ance of a Mutual Fund scheme, it should also include the risk taken by the fund
manager because different funds will have different levels of risk attached to t
hem. Risk associated with a fund, in a general, can be defined as Variability or
fluctuations in the returns generated by it. The higher the fluctuations in the
returns of a fund during a given period, higher will be the risk associated wit
h it. These fluctuations in the returns generated by a fund are resultant of two
guiding forces. First, general market fluctuations, which affect all the securi
ties, present in the market, called Market risk or Systematic risk and second, f
luctuations due to specific securities present in the portfolio of the fund, cal
led Unsystematic risk. The Total Risk of a given fund is sum of these two and is
measured in terms of standard deviation of returns of the fund. Systematic risk
, on the other hand, is measured in terms of Beta, which represents fluctuations
in the NAV of the fund vis-à-vis market. The more responsive the NAV of a Mutua
l Fund is to the changes in the market; higher will be its beta. Beta is calcula
ted by relating the returns on a Mutual Fund with the returns in the market. Whi
le Unsystematic risk can be diversified through investments in a number of instr
uments, systematic risk cannot. By using the risk return relationship, we try to
assess the competitive strength of the Mutual Funds one another in a better way
. In order to determine the risk-adjusted returns of investment portfolios, seve
ral eminent authors have worked since 1960s to develop composite performance ind
ices to evaluate a portfolio by comparing alternative portfolios within a partic
ular risk class.
The most important and widely used measures of performance are:
• The Treynor’Measure
• The Sharpe Measure
• Jenson Model
• Fama Model
• THE TREYNOR’ MEASURE:-
Developed by Jack Treynor, this performance measure evaluates funds on the basis
of Treynor s Index.
This Index is a ratio of return generated by the fund over and above risk free r
ate of return (generally taken to be the return on securities backed by the gove
rnment, as there is no credit risk associated), during a given period and system
atic risk associated with it (beta). Symbolically, it can be represented as:
Treynor s Index (Ti) = (Ri - Rf)/Bi.
Where,
Ri represents return on fund,
Rf is risk free rate of return, and
Bi is beta of the fund.
All risk-averse investors would like to maximize this value. While a high and po
sitive Treynor s Index shows a superior risk-adjusted performance of a fund, a l
ow and negative Treynor s Index is an indication of unfavorable performance.
• THE SHARPE MEASURE:-
In this model, performance of a fund is evaluated on the basis of Sharpe Ratio,
which is a ratio of returns generated by the fund over and above risk free rate
of return and the total risk associated with it.
According to Sharpe, it is the total risk of the fund that the investors are con
cerned about. So, the model evaluates funds on the basis of reward per unit of t
otal risk. Symbolically, it can be written as:
Sharpe Index (Si) = (Ri - Rf)/Si
Where,
Si is standard deviation of the fund,
Ri represents return on fund, and
Rf is risk free rate of return
While a high and positive Sharpe Ratio shows a superior risk-adjusted performanc
e of a fund, a low and negative Sharpe Ratio is an indication of unfavorable per
formance.
Comparison of Sharpe and Treynor

Sharpe and Treynor measures are similar in a way, since they both divide the ris
k premium by a numerical risk measure. The total risk is appropriate when we are
evaluating the risk return relationship for well-diversified portfolios. On the
other hand, the systematic risk is the relevant measure of risk when we are eva
luating less than fully diversified portfolios or individual stocks. For a well-
diversified portfolio the total risk is equal to systematic risk. Rankings based
on total risk (Sharpe measure) and systematic risk (Treynor measure) should be
identical for a well-diversified portfolio, as the total risk is reduced to syst
ematic risk. Therefore, a poorly diversified fund that ranks higher on Treynor m
easure, compared with another fund that is highly diversified, will rank lower o
n Sharpe Measure.
Calculation of Treynor and sharp ratio for selected mutual funds schemes:-
TABLE-5.3:-
Measures/ schemes HDFC equity fund (Growth) SBI Magnum comma fund (
Growth) LICMF Equity Fund- (Growth)
Return on fund (Ri) 7.2% 6% 5%
Risk free rate of return (Rf) 9% 8% 7%
Beta 0.85 0.92 1.08
Standard deviation 5.09 5.71 6.48
Treynor ratio
(Ti) = (Ri - Rf)/Bi. 7.2-9/0.85
= -2.11 6-8/0.92
= -2.17 5-7/1.08
= -1.85
Sharp ratio
(Si) = (Ri - Rf)/Si 7.2-9/5.09
= -0.353 6-8/5.71
= -0.350 5-7/6.48
= -0.308
All risk-averse investors would like to maximize this value. While a high and po
sitive Treynor s Index shows a superior risk-adjusted performance of a fund, a l
ow and negative Treynor s Index is an indication of unfavorable performance.
While a high and positive Sharpe Ratio shows a superior risk-adjusted performanc
e of a fund, a low and negative Sharpe Ratio is an indication of unfavorable per
formance.
Findings:
• All these three mutual fund shows the unfavorable performance but HDFC e
quity growth plan having the low negative value so it will be the greater perfor
mer over the past three year.
• Same as sharp ratio for SBI magnum comma fund growth and LIC equity fund
growth are having high negative value that depicts the performance of these pla
ns are lower comparison to HDFC equity growth plan.
• JENSON MODEL :-
Jenson s model proposes another risk adjusted performance measure. This measure
was developed by Michael Jenson and is sometimes referred to as the differential
Return Method. This measure involves evaluation of the returns that the fund ha
s generated vs. the returns actually expected out of the fund1 given the level o
f its systematic risk. The surplus between the two returns is called Alpha, whic
h measures the performance of a fund compared with the actual returns over the p
eriod. Required return of a fund at a given level of risk (Bi) can be calculated
as:
Ri = Rf + Bi (Rm - Rf)
Where,
Ri represents return on fund, and
Rm is average market return during the given period,
Rf is risk free rate of return, and
Bi is Beta deviation of the fund.
After calculating it, Alpha can be obtained by subtracting required return from
the actual return of the fund.
Higher alpha represents superior performance of the fund and vice versa. Limitat
ion of this model is that it considers only systematic risk not the entire risk
associated with the fund and an ordinary investor cannot mitigate unsystematic r
isk, as his knowledge of market is primitive.
• FAMA MODEL:-
The Eugene Fama model is an extension of Jenson model. This model compares the p
erformance, measured in terms of returns, of a fund with the required return com
mensurate with the total risk associated with it. The difference between these t
wo is taken as a measure of the performance of the fund and is called Net Select
ivity.
The Net Selectivity represents the stock selection skill of the fund manager, as
it is the excess returns over and above the return required to compensate for t
he total risk taken by the fund manager. Higher value of which indicates that fu
nd manager has earned returns well above the return commensurate with the level
of risk taken by him.
Required return can be calculated as: Ri = Rf + Si/Sm*(Rm - Rf)
Where,
Ri represents return on fund,
Sm is standard deviation of market returns,
Rm is average market return during the given period, and
Rf is risk free rate of return.
The Net Selectivity is then calculated by subtracting this required return from
the actual return of the fund.
Among the above performance measures, two models namely, Treynor measure and Jen
son model use Systematic risk is based on the premise that the Unsystematic risk
is diversifiable. These models are suitable for large investors like institutio
nal investors with high risk taking capacities as they do not face paucity of fu
nds and can invest in a number of options to dilute some risks. For them, a port
folio can be spread across a number of stocks and sectors. However, Sharpe measu
re and Fama model that consider the entire risk associated with fund are suitabl
e for small investors, as the ordinary investor lacks the necessary skill and re
sources to diversify. Moreover, the selection of the fund on the basis of superi
or stock selection ability of the fund manager will also help in safeguarding th
e money invested to a great extent. The investment in funds that have generated
big returns at higher levels of risks leaves the money all the more prone to ris
ks of all kinds that may exceed the individual investors risk appetite.
5.10 RECENT TRENDS IN THE MUTUAL FUND INDUSTRY:-
The most important in the mutual fund industry is the aggressive expansion of th
e foreign owned mutual fund companies and the decline of the companies floated b
y the nationalized bank and smaller private sector players. Many nationalized ba
nks got into the mutual fund business in the early nineties and go off to a good
start due to the stock market boom prevailing then. These banks did not really
understand the mutual fund business and they just viewed it as another kind of b
anking activity. Few hired specialized staff and generally choose to transfer st
aff from the parent organization. Some schemes had offered guaranteed returns an
d their patent organization had to bail out these AMCs by paying large amount of
money the difference between the guaranteed and actual returns. The service lev
el was also bad. Most of these AMCs have not been able to retain staffs, float,
and new schemes etc. and it is doubtful whether barring a few expectations, they
have serious plans of continuing the activity in a major way.
The experience of some of the AMCs floated by private sector Indian companies wa
s also very similar. They quickly realized that the AMCs business is a business,
which makes money in the long term and requires deep pocketed support in the in
termediate years. Some have sold out to foreign owned companies, some have merge
d with the others and there is general restructuring going on.
The foreign owned companies have deep pockets and have come in here with the exp
ectation of a long haul. They can be credited with introducing many new practice
s such as new product innovation, sharp improvement in the service standards and
disclosure, usage of technology, broker education etc. In fact, they have force
d the industry to upgrade itself and service levels of the organization like UTI
have improved dramatically in the last few years in response to the competition
provided by these.
5.11 FUTURE SCENARIO:-
The asset base will continue to grow at an annual rate of about 30 to 35% over t
he next few years as investor’s shift their asset from banks and other tradition
al avenues. Some of the older public and private sector players will either clos
e or be taken over. Out of ten public sectors players five will sell out, close
down or merge with strong players in three to four years. In the private sector
this trend has already started with two mergers and one takeover. Here too some
of them will down their shutter in the near future to come.
But this does not mean there is no room for other players. The market will witne
ss a flurry of new players entering the area. There will be a large number of of
fers from various asset management companies in times to come. Some big names li
ke Fidelity, Principal and Old Mutual etc. are looking at Indian market seriousl
y.
The mutual fund industry is awaiting the derivation in India as this would enabl
e it to hedge its risk and this in turn would be reflected in its Net Asset Valu
e (NAV).
SEBI is working out the norms for enabling the existing mutual fund scheme to tr
ade in derivatives. Importantly, many market players have called on the Regulato
r to initiate the process immediately, so that the mutual funds can implement th
e changes that are required to trade in derivates.
CHAPTER-6
COMPANY PROFILE
OF
HDFC MUTUAL FUND
INTRODUCTION:-
HDFC Mutual Fund is governed by HDFC Asset Management Company Limited (AMC). The
HDFC mutual fund was approved by SEBI in June 2000. Equity Funds, Balanced Fund
s, and Debt Funds are the mutual fund schemes offered by HDFC Mutual Fund.
HDFC Mutual Fund has witnessed significant growth in the past few years. It is r
egulated by HDFC Asset Management Company Limited (AMC) which works as an Asset
Management Company (AMC) for HDFC Mutual Fund. HDFC Asset Management Company Lim
ited (AMC) is a Joint Venture concern between the large-scale housing finance co
mpany HDFC and British investment firm Standard Life Investments Limited.
The HDFC Asset Management Company Limited conducts the activities carried out by
the HDFC Mutual Fund and manages the assets of various mutual fund schemes. The
August 2006 report states that the fund has assets of Rs. 25,892 crores under (
AMC)
HDFC Asset Management Company Limited (AMC) entered into an agreement with Zuric
h Insurance Company (ZIC) with the aim to develop the asset management business
in India in the year 2003. Following to this, all the mutual fund schemes of Zur
ich Mutual Fund in India got transferred to HDFC Mutual Fund and gained the name
of HDFC schemes.
HDFC Asset Management Company Ltd (AMC) was set up on December 10, 1999 under th
e Companies Act, 1956. It got the approval to function as an Asset Management Co
mpany for the HDFC Mutual Fund by SEBI on June 30, 2000. AMC was appointed in or
der manage the HDFC Mutual Fund. The registered office of HDFC Asset Management
Company Limited (AMC) is located at Ramon House, 3rd Floor, H.T. Parekh Marg, 16
9, Backbay Reclamation, Churchgate, Mumbai - 400 020.
As per the terms of the Investment Management Agreement, the AMC will conduct th
e operations of the Mutual Fund and manage assets of the schemes, including the
schemes launched from time to time.
The present share holding pattern of the AMC is as follows:
Particulars % of the paid up capital
Housing Development Finance Corporation Limited 50.10
Standard Life Investments Limited 49.90
Zurich Insurance Company (ZIC), the Sponsor of Zurich India Mutual Fund, followi
ng 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.
On obtaining the regulatory approvals, the Schemes of Zurich India Mutual Fund h
as now migrated to HDFC Mutual Fund on June 19, 2003. These schemes have been re
named 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 Tax Saver Fund HDFC Tax Saver Fund
Zurich India Top 200 Fund HDFC Top 200 Fund
Zurich India High Interest Fund HDFC High Interest Fund
Zurich India Liquidity Fund HDFC Liquidity Fund
Zurich India Sovereign Gilt Fund HDFC Sovereign Gilt Fund
The AMC is managing 2 close ended Income Scheme viz. HDFC Fixed Investment Plan
and HDFC Long Term Equity Fund and 23 open-ended schemes of the Mutual Fund viz.
HDFC Growth Fund (HGF), HDFC Balanced Fund (HBF), HDFC Income Fund (HIF), HDFC
Liquid Fund (HLF), HDFC Long Term Advantage Fund, HDFC Tax Plan 2000 (HTP), HDFC
Children s Gift Fund (HDFC CGF), HDFC Gilt Fund (HGILT), HDFC Short Term Plan (
HSTP), HDFC Index Fund, HDFC Floating Rate Income Fund (HFRIF), HDFC Equity Fund
(HEF), HDFC Top 200 Fund, (HT200), HDFC Capital Builder Fund (HCBF), HDFC Tax S
aver (HTS), HDFC Prudence Fund (HPF), HDFC High Interest Fund (HHIF), HDFC Sover
eign Gilt Fund (HSGF) and HDFC Cash Management Fund (HCMF), HDFC MF Monthly Inco
me Plan (HMIP), HDFC Core & Satellite Fund (HSCF), HDFC Multiple Yield Fund (HM
YF), HDFC Premier Multi-Cap Fund (HPM) and HDFC Multiple Yield Fund Plan 2005 (H
MY2005).
The AMC is also providing portfolio management / advisory services and such acti
vities are not in conflict with the activities of the Mutual Fund. The AMC has r
enewed its registration from SEBI vide Registration No. - PM / INP000000506 date
d December 22, 2000 to act as a Portfolio Manager under the SEBI (Portfolio Mana
gers) Regulations, 1993. The Certificate of Registration is valid from January 1
, 2004 to December 31, 2006.
HDFC assets Management Company’s punch line is “continuing a tradition o
f trust”.
In Gujarat HDFC assets Management Company is located at Ahmadabad, Surat
, vadodara, Rajkot.
HDFC assets Management Company is working from 9:30 a.m. onwards.
HDFC assets Management Company Have 200 and more distributors in Surat.
HDFC assets Management Company Provide account statements to investors a
ccording to investor’s requirement.
HDFC assets Management Company Provide good services to investors.
SNAPSHOT-I
CHART-6.1
HDFC Standard Life insurance Company- HDFC holds 72.26 %.
HDFC Asset Management Company – HDFC holds 60%
HDFC Bank- HDFC holds 23.26%.
Intelenet Global (Business Process Outsourcing) – HDFC holds 50%.
HDFC Chubb General Insurance Company – HDFC holds 74%.
MAN WITH A MISSION
If ever there was a man with a mission it was Hasmukhbhai Parekh, Founder and Ch
airman-Emeritus, of HDFC Group who left this earthly abode on November 18, 1994.
Born in a traditional banking family in Surat, Gujarat, Mr. Parekh started his
financial career at Harkisandass Lukhmidass – a leading stock broking firm. The
firm closed down in the late seventies, but, long before that, he went on to bec
ome a towering figure on the Indian financial scene.
In 1956 he began his lifelong financial affair with the economic world, as Gener
al
Manager of the newly-formed Industrial Credit and Investment Corporation of Indi
a (ICICI). He rose to become Chairman and continued so till his retirement in 19
72.At the ripe age of 60, Hasmukhbhai started his second dynamic life, even more
illustrious than his first. His vision for mortgage finance for housing gave bi
rth to the Housing Development Finance Corporation – it was a trend-setter for h
ousing finance in the whole Asian continent.
He was also a writer in his own right. There are over 200 published articles by
him... In 1992, the Government of India honoured him with the Padma Bhushan Awar
d. The London School of Economics & Political Science conferred on him an Honora
ry Fellowship.
He was one of the Founder Members of the Centre for Advancement of Philanthropy,
and it’s Chairman till 1993.
He took active interest in the Bombay Community Public Trust, designed specifica
lly to serve the needs of the city’s underprivileged citizens.
When Mr. Deepak Parekh took over as Chairman from Hasmukhbhai, he said: “Taking
over from H.T. Parekh is a formidable task; his vision… brought about not only a
n institution, but an entire concept which has proved itself to be of lasting im
portance.”
Today we are the largest residential mortgage finance institution in India, with
a net worth of Rs. 2,703 cores as of March 31, 2006 and an asset base of over R
s. 22,000 cores. We also aim to increase the flow of resources to the housing se
ctor by integrating the housing finance sector with the overall domestic financi
al markets.
Over a span of 25 years, HDFC has become the pioneer in housing finance in India
and made it possible for over two million Families to own their homes, through
housing loans worth over Rs. 42,000 cores.
VISION
To be a dominant player in the Indian mutual fund space, recognized for its high
levels of ethical and professional conduct and a commitment towards enhancing i
nvestor interests.
ORGANIZATION AND MANAGEMENT
HDFC is a professionally managed organization with a board of directors consisti
ng of eminent persons who represent various fields including finance, taxation,
construction and urban policy & development. The board primarily focuses on stra
tegy formulation, policy and control, designed to deliver increasing value to sh
areholders.
Name and Designation Location Contact Number
Mr. Deepak S. Parekh is the executive Chairman of the Corporation. He is fellow
of the Institute of Chartered Accountants (England & Wales).Mr. Parekh joined th
e Corporation in a senior management position in 1978.He was inducted as a whole
time director of the Corporation in 1985 and was appointed as the Chairman in 1
993. He is the chief executive officer of the Corporation Mumbai.
Mr. K. M. Mistry the Managing Director of the Corporation. Is a Fellow of the In
stitute of Chartered Accountants of India? He has been employed with the Corpora
tion since 1981 and was the executive director of the Corporation since 1993. He
was appointed as the deputy managing director in 1999 and the Managing Director
in 2000. He is also a member of the Investors’ Grievance Committee of Directors
.
Ms. Renu S. Karnad the Executive Director of the Corporation. Is a graduate in l
aw and holds a Master’s degree in economics from Delhi University. She has been
employed with the Corporation since 1978 and was appointed as the Executive Dire
ctor of the Corporation in 2000. She is responsible for overseeing all aspects o
f lending operations of HDFC.New Delhi.
BOARD OF DIRECTORS
Mr. D S Parekh - Chairman Mr. D N Ghosh
Mr. Keshub Mahindra - Vice Chairman Dr. S A Dave
Ms. Renu S. Karnad - Executive Director Mr. S Venkitaramanan
Mr. K M Mistry - Managing Director Dr. Ram S Tarneja
Mr. Shirish B Patel Mr. N M Munjee
Mr. B S Mehta Mr. D M Satwalekar
SPONSORS OF HDFC ASSETS MANAGEMENT COMPANY:-
HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (HDFC):-

HDFC was incorporated in 1977 as the first specialized Mortgage Company in India
. HDFC provides financial assistance to individuals, corporates and developers f
or the purchase or construction of residential housing. It also provides propert
y related services (e.g. property identification, sales services and valuation),
training and consultancy. Of these activities, housing finance remains the domi
nant activity. HDFC has a client base of around 9.5 lack borrowers, around 1 mil
lion depositors, over 91,000 shareholders and 50,000 deposit agents as at March
31, 2007. HDFC has raised funds from international agencies such as the World Ba
nk, IFC (Washington), USAID, DEG, ADB and KfW, international syndicated loans, d
omestic term loans from banks and insurance companies, bonds and deposits. HDFC
has received the highest rating for its bonds and deposits program for the twelf
th year in succession. HDFC Standard Life Insurance Company Limited, promoted by
HDFC was the first life insurance company in the private sector to be granted a
Certificate of Registration (on October 23, 2000) by the Insurance Regulatory a
nd Development Authority to transact life insurance business in India.
STANDARD LIFE INVESTMENTS LIMITED:-
The Standard Life Assurance Company was established in 1825 and has considerable
experience in global financial markets. The company was present in the Indian l
ife insurance market from 1847 to 1938 when agencies were set up in Kolkata and
Mumbai. The company re-entered the Indian market in 1995, when an agreement was
signed with HDFC to launch an insurance joint venture. On April 2006, the Board
of The Standard Life Assurance Company recommended that it should demutualise an
d Standard Life plc float on the London Stock Exchange. At a Special General Mee
ting held in May voting members overwhelmingly voted in favor of this. The Court
of Session in Scotland approved this in June and Standard Life plc floated on t
he London Stock Exchange on 10 July 2006. Standard Life Investments was launched
as an investment management company in 1998. It is a wholly owned subsidiary of
Standard Life Investments (Holdings) Limited, which in turn is a wholly owned s
ubsidiary of Standard Life plc. Standard Life Investments is a leading asset man
agement company, with approximately US$ 269 billion as at March 30, 2007, of ass
ets under management. The company operates in the UK, Canada, Hong Kong, China,
Korea, Ireland and the USA to ensure it is able to form a truly global investmen
t view. In order to meet the different needs and risk profiles of its clients, S
tandard Life Investments Limited manages a diverse portfolio covering all of the
major markets world-wide, which includes a range of private and public equities
, government and company bonds, property investments and various derivative inst
ruments.
PRODUCT DETAILS:-
Different Types of Products:-
EQUITY BALANCED DEBT
EQUITY SCHEMES OF HDFC ASSET MANAGEMENT COMPANY:-

1. HDFC Equity Fund:-
Investment Objective: The investment objective of the Scheme
Is to achieve capital appreciation.
Investment Options: Dividend & Growth Option
Nature of Scheme: - Open Ended Growth Scheme
Inception Date: - January 01, 1995
2. HDFC growth fund:-
Investment Objective: - The primary investment objective of the Scheme i
s to generate long term capital appreciation from a portfolio that is invested p
redominantly in equity and equity related instruments.
Inception Date: -September 11, 2000
3. HDFC Top 200 fund:-
Investment Objective: - To generate long-term capital appreciation from
a portfolio of equity and equity-linked instruments primarily drawn from the com
panies in BSE 200 index.
4. HDFC mid cape opportunity fund;-
a portfolio that is substantially constituted of equity and equity related secu
rities of small and Mid-Cap companies.
Nature of Scheme:- Open Ended Growth Scheme
Inception Date:- May 07, 2007
5. HDFC capital builder fund:-
a portfolio that is substantially constituted of equity and equity related secur
ities of small and Mid-Cap companies.
Inception Date:- February 01, 1994
6. HDFC core and satellite fund:-
Investment Objective: - The primary objective of the Scheme is to genera
te capital appreciation through equity investment in companies whose shares are
quoting at prices below their true value.
Inception Date:- September 17, 2004
7. HDFC premier multicape fund:-
te capital appreciation in the long term through equity investments by investing
in a diversified portfolio of Mid Cap and Large Cap `blue chip` companies.
Investment Options: Dividend Plan, Growth Plan, The Dividend Plan offers
Dividend Payout and Reinvestment Facility.
Inception Date: - April 06, 2005
BALANCED SCHEMES OF HDFC ASSET MANAGEMENT COMPANY:-
1) HDFC balanced fund: -
te capital appreciation along with current income from a combined portfolio of e
quity and equity related and debt and money market instruments.
Nature of Scheme: - Open Ended balanced fund
Inception Date: - September 11, 2000
2) HDFC prudence fund:-
Investment Objective: - The investment objective of the Scheme is to pro
vide periodic returns and capital appreciation over a long period of time, from
a judicious mix of equity and debt investments, with the aim to prevent/ minimiz
e any capital erosion
Nature of Scheme: - Open Ended balanced fund
Inception Date: - February 01, 1994
3. HDFC short term plan:-
Investment Objective: - The primary objective of the HDFC Short Term Pl
an is to generate regular income through investment in debt securities and money
market instruments.
Investment Options: Growth Plan, Dividend Plan. The Dividend Plan offers
Nature of Scheme:- Open Ended income fund
Inception Date: - February 28, 2002
4. HDFC multi yield fund:-
Investment Objective: - The primary objective of the Scheme is to gene
rate positive returns over medium time frame with low risk of capital loss over
medium time frame.
Investment Options: Growth Plan, Dividend Plan. The Dividend Plan offers
Nature of Scheme: - Open Ended income fund
DEBT SCHEMES OF HDFC ASSET MANAGEMENT COMPANY:-
1. HDFC Income Fund:-
Investment Objective: - The primary objective of the Scheme is to optimi
ze returns while maintaining a balance of safety, yield and liquidity.
Nature of Scheme: - Open Ended Income Scheme
2. HDFC Income Fund: -
Investment Objective: - The investment objective of HDFC High Interest F
und is to generate income by investing in a range of debt and money market instr
uments of various maturity dates with a view to maximizing income while maintain
ing the optimum balance of yield, safety and liquidity.
Nature of Scheme: - Open Ended Income Scheme
Inception Date: - April 28, 1997
3. HDFC MF Monthly Income Plan - Short Term Plan:-
Investment Objective: - The primary objective of Scheme is to generate
regular returns through investment primarily in Debt and Money Market Instrument
s. The secondary objective of the Scheme is to generate long-term capital apprec
iation by investing a portion of the Scheme’s assets in equity and equity relate
d instruments. However, there can be No assurance that the investment objective
of the Scheme will be achieved.
Investment Options: Quarterly Dividend Option, Monthly Dividend Option,
and Growth Plan. The Dividend Plan offers Dividend Payout and Reinvestment Facil
ity
Nature of Scheme: - An open-ended income scheme. Monthly income is not a
ssured and is subject to availability of distributable surplus
Inception Date:- December 26, 2003
4. HDFC MF Monthly Income Plan - Long Term Plan:-
Investment Objective: - The primary objective of Scheme is to generate r
egular returns through investment primarily in Debt and Money Market Instruments
. The secondary objective of the Scheme is to generate long-term capital appreci
ation by investing a portion of the Scheme’s assets in equity and equity related
instruments. However, there can be no assurance that the investment objective o
f the Scheme will be achieved
Investment Options: Growth Plan, Quarterly Dividend Option, Monthly Divi
dend Option. The Dividend Plan offers Dividend Payout and Reinvestment Facility.
Nature of Scheme: - An open-ended income scheme. Monthly income is not a
ssured and is subject to availability of distributable surplus
Inception Date: - December 26, 2003
5. HDFC Floating Rate Income Fund Long Term Plan:-
te regular income through investment in a portfolio comprising substantially of
floating rate debt / money market instruments, fixed rate debt / money market in
struments swapped for floating rate returns, and fixed rate debt securities and
money market instruments.
Investment Options: Dividend Plan, Growth Plan. The Dividend Plan of
fers Reinvestment Facility only
Nature of Scheme: - An open-ended income scheme.
Inception Date: - January 16, 2003
LOCATION DETAILS
HDFC AMC is located at Yagnik road which is in the heart of the city where servi
ce is easily available for all customer and easy access compare with other place
that available in city. Location has major impact on success or failure of oper
ation. Advantages of this type of location are that service cost and distributio
n cost is minimum comparison with other place.
The major investor service centres of HDFC MUTUAL FUND are as below.
Locations of HDFC Assets Management Company

ACHIEVEMENT AND AWARDS
“HDFC Prudence fund” has been ranked ICRA-MFR 1, and Has Been awarded th
e Gold Award for ‘Best Performance’ in the category of “Open Ended Balanced Sche
me” for one year Period Ending Dec 31, 2005.
“HDFC Tax saver fund” has been ranked ICRA-MFR 1, and Has Been Silver a
ward for “Second Best Performance” in the category of “Open Ended Equity Linked
Saving Scheme(ELSS)” for Three year Period Ending Dec 31, 2005.
“HDFC MIP~LTP” has been ranked ICRA-MFR 1, and Has been awarded the Gold
Award For “Best Performance” in the category of “Open Ended Marginal Equity Sch
eme” for one year Period Ending Dec 31, 2005.
FUTURE SCENARIO:-
The asset base will continue to grow at an annual rate of about 35 to 40
% over the next five year as investor’s shift their assets from banks and other
traditional avenues. Some of the older public and private sector players will ei
ther close shop or be taken over.
Out of ten public players five will sell out, close down or merge with s
tronger player in three to four years. In the private sector this trend has alre
ady started with two mergers and one take over. Here too some of them will down
their shutters in the near future to come.
But this does not mean that there is no room for other players. The mark
et will witness a flurry of new players entering the areas. There will be a larg
e no. of offers from various asset management companies in the time to come, som
e big names like Principle, SBI, Fidelity, old mutual etc are looking at Indian
market seriously. One important reason for it is that most major players have pr
esence here and hence these big names would hardly like to get left behind.
The mutual fund industry is awaiting the introduction of derivatives in
India as this would enable it to hedge its risk and this in turn would be reflec
ted in its Net Asset Value (NAV).
SEBI is working out the norms for enabling the existing mutual fund sche
mes to trade in derivatives. Importantly, many market players have called on the
Regular to initiate the process immediately, so that the mutual funds can imple
ment the changes that are required to trade in Derivatives.
CHAPTER- 7
TYPES OF MUTUAL FUNDS
TYPES OF MUTUAL FUND:-
There are a wide variety of Mutual Fund schemes that cater to your needs, whatev
er your age, financial position, risk tolerance and return expectation. Whether
as the foundation of your investment program or as a supplement, Mutual Fund sch
emes can help you meet your financial goals. The different types of Mutual Funds
are as follows:-
CHART-7.1
BASED ON THEIR STRUCTURE:-
OPEN-ENDED FUNDS: - Investors can buy and sell the units from the fund,
at any point of time.
CLOSE-ENDED FUNDS: - These funds raise money from investors only once. T
herefore, after the offer period, fresh investments can not be made into the fun
d. If the fund is listed on a stocks exchange the units can be traded like stock
s (E.g., Morgan Stanley Growth Fund). Recently, most of the New Fund Offers of c
lose-ended funds provided liquidity window on a periodic basis such as monthly o
r weekly. Redemption of units can be made during specified intervals. Therefore,
such funds have relatively low liquidity.
BASED ON THEIR INVESTMENT OBJECTIVE:-
EQUITY FUNDS: - These funds invest in equities and equity related instru
ments. With fluctuating share prices, such funds show volatile performance, even
losses. However, short term fluctuations in the market, generally smoothens out
in the long term, thereby offering higher returns at relatively lower volatilit
y. At the same time, such funds can yield great capital appreciation as, histori
cally, equities have outperformed all asset classes in the long term. Hence, inv
estment in equity funds should be considered for a period of at least 3-5 years.
It can be further classified as:-
• Index funds- In this case a key stock market index, like BSE Sensex or N
ifty is tracked. Their portfolio mirrors the benchmark index both in terms of
composition and individual stock weightages.
• Equity diversified funds- 100% of the capital is invested in equities sp
reading across different sectors and stocks.
• Dividend yield funds- it is similar to the equity diversified funds exce
pt that they invest in companies offering high dividend yields.
• Thematic funds- Invest 100% of the assets in sectors which are related t
hrough some theme.
e.g. -An infrastructure fund invests in power, construction, cements sectors etc
.
• Sector funds- Invest 100% of the capital in a specific sector. e.g. - A
banking sector fund will invest in banking stocks.
• ELSS- Equity Linked Saving Scheme provides tax benefit to the investors
BALANCED FUND:- Their investment portfolio includes both debt and equity
. As a result, on the risk-return ladder, they fall between equity and debt fund
s. Balanced funds are the ideal mutual funds vehicle for investors who prefer sp
reading their risk across various instruments. Following are balanced funds clas
ses:-
• Debt-oriented funds -Investment below 65% in equities.
• Equity-oriented funds -Invest at least 65% in equities, remaining in deb
t.
DEBT FUND:- They invest only in debt instruments, and are a good option
for investors averse to idea of taking risk associated with equities. Therefore,
they invest exclusively in fixed-income instruments like bonds, debentures, Gov
ernment of India securities; and money market instruments such as certificates o
f deposit (CD), commercial paper (CP) and call money. Put your money into any of
these debt funds depending on your investment horizon and needs.
• Liquid funds- These funds invest 100% in money market instruments, a lar
ge portion being invested in call money market.
• Gilt funds ST- They invest 100% of their portfolio in government securit
ies of and T-bills.
• Floating rate funds - Invest in short-term debt papers. Floaters invest
in debt instruments which have variable coupon rate.
• Arbitrage fund- They generate income through arbitrage opportunities due
to mis-pricing between cash market and derivatives market. Funds are allocated
to equities, derivatives and money markets. Higher proportion (around 75%) is pu
t in money markets, in the absence of arbitrage opportunities.
• Gilt funds LT- They invest 100% of their portfolio in long-term governme
nt securities.
• Income funds LT- Typically, such funds invest a major portion of the por
tfolio in long-term debt papers.
• MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an ex
posure of 10%-30% to equities.
• FMPs- fixed monthly plans invest in debt papers whose maturity is in lin
e with that of the fund.
CHAPTER-8
REGULATORY ASPECTS
AMFI (Association of Mutual fund in India):-
AMFI not a Self Regulatory Organization (SRO).
It’s made to promote mutual fund in the masses and give recommendation i
n order to uphold the interest of the investor.
OBJECTIVES OF AMFI:-
To define and maintain high professional and ethical standards in all ar
eas of operation of mutual fund industry.
To recommend and promote best business practices and code of conduct to
be followed by members and others engaged in the activities of mutual fund and a
sset management including agencies connected or involved in the field of capital
markets and financial services.
To interact with the Securities and Exchange Board of India (SEBI) and t
o represent to SEBI on all matters concerning the mutual fund industry.
To represent to the Government, Reserve Bank of India and other bodies o
n all matters relating to the mutual fund industry.
To develop a cadre of well-trained Agent distributors and to implement a
Programme of training and certification for all intermediaries and other engage
d in the industry.
To undertake nation wide investor awareness Programme so as to promote p
roper understanding of the concept and working mutual fund.
SEBI (Security Exchange Board of India) :-
Securities and Exchange Board of India ("SEBI"), the Capital Markets regulator h
as clearly defined rules, which govern mutual funds. These rules relate to the f
ormation, administration and management of mutual funds and also prescribe discl
osure and accounting requirements. Such a high level of regulation seeks to prot
ect the interest of investors.
All Mutual Funds are registered with SEBI and they function within the provision
of strict regulations designed to protect the interests of investors. The opera
tions of Mutual Funds are regularly monitored by SEBI.
RBI (Reserve Bank of India):-
Reserve bank of India was the regulator of Mutual Fund before SEBI. It regulated
mutual fund initially and there were only few schemes in the market. But now wi
th coming of SEBI, it has now become the main regulator of the Mutual Fund. RBI
now only governs Bank Sponsored Mutual Fund.
MINISTRY OF FINANCE:-
The Ministry of Finance, which is charged with implementing the government polic
ies, ultimately supervises both the RBI and the SEBI. Besides being the ultimate
policy making and supervising entity, the MOF has also been playing the role of
an Appellate Authority for any major disputes over SEBI guidelines on certain s
pecific capital market related guidelines – in particular any cases of insider t
rading or mergers and acquisitions.
COMPANY LAW BOARD:-
Mutual fund Asset Management Companies and corporate trustees are companies regi
stered under the Companies Act, 1956, and are therefore answerable to regulatory
authorities empowered by the Companies Act.
The primary legal interface for all companies is the Register of Companies (RoC)
. The Department of Company Affairs in turn supervises roCs. The DCA forms part
of Company Law Board, which is part of the Ministry of Law and Justice of the Go
vt. of India.
The RoC ensures that the assets management company or the Trustee Company as the
case may be is in compliance with all Companies Act provisions. All assets mana
gement company accounts and records are filed with the Roc, who may demand addit
ional information and documents from the company. The RoC plays the role of a wa
tchdog with respect to regulatory compliance by companies.
The Company Law Board (CLB) is the apex regulatory authority under the Companies
Act. While the CLB guides the DCA, another arm of the CLB called the Company La
w Bench is the Appellate Authority for corporate offences.
The Company Law Board (CLB) is a body specially constituted by the Central Gover
nment for carrying out judicial proceedings with respect to company affairs. Sin
ce mutual fund assets Management Company are companies, the CLB’s role assumes i
mportance.
As the members of assets management companies or Trustee companies will usually
be the sponsors and their joint venture partners or associates, it is unlikely t
hat mutual fund investors will have anything to do with any of these regulators.
The authorities would generally regulate the assets management companies whose
shareholders may have recourse to them in specific cases.
INVESTORS RIGHTS:-
Proportionate right to beneficial ownership of scheme’s assets
Right to obtain information from trustees
Entitled to receive dividend warrants within 30 days of declaration of d
ividend
Inspect major documents of the fund
Appointment of the assets management company can be terminated by 75% of
the unit holders of the scheme present and voting
Right to approve of changes in fundamental attributes of a close ended s
cheme (75 % of unit holders should approve) - right to be informed so in open e
nded schemes so that they can redeem
Right to receive a copy of annual financial statements of fund and perio
dic transaction statements
75% of the unit holders can resolve to wind up the scheme
LEGAL LIMITATIONS TO INVESTORS:-
Unit holders can not sue the trust
Can initiate legal proceedings against trustees
Sponsor of mutual funds have no obligation to meet any shortfall in the
assured return - unless explicitly guaranteed in the offer document
No rights to a prospective investor
INVESTOR OBLIGATIONS:-
Carefully study the offer document before investing
Monitor his investment in a scheme by referring financial statements, pe
rformance updates and research reports sent by the assets management company.
CHAPTER-9
ANALYSIS & INTERPRETATION
The analysis is based on the responses given by customers through questionnaires
.
ON THE BASIS OF AGE OF THE INVESTORS
TABLE-9.1
Age group No. of Respondents
31-35 4
36-40 3
41-45 2
46-50 1
<50 0
CHART-9.1
Interpretation:-
According to this chart out of 10 Mutual Fund investors of Delhi the most are in
the age group of 31-35 yrs. i.e. 40%, the second most investors are in the age
group of 36-40yrs i.e. 30% and the least investors are in the age group of below
46-50 yrs.
OCCUPATION OF THE INVESTORS OF DELHI
TABLE 9.2:-
Occupation No. of Investors
Govt.Service 3
Pvt.Service 4
Business 2
Agriculture 0
Others 1
CHART-9.2
OCCUPATION OF THE INVESTORS
Interpretation: - In Occupation group out of 10 investors, 40% are Pvt. Employee

s, 20% are Businessman, 30% are Govt. Employees, 0% are in Agriculture and 10% a
re in others.
WHICH INVESTMENT AVENUES ARE YOU AWARE OF?
TABLE-9.3:-
INVESTMENT AVENUES FREQUENCY
EQUITY/MUTUAL FUND 25
POST OFFICE 15
F.D. 10
OTHERS 7
CHART-9.3
Which investment avenues are you aware of?
Interpretation: -
From the above charts we can interpret that awareness of equity/mutual fund, pos
t office (NSC, KVP, and PPF), fixed deposits is more compare to others like GOVT
ISSUED Instrument, GOVT Backed Instrument, Real Estate, gold etc. so HDFC asset
s Management Company needs to focus more on those investors who are more invest
in KVP, NSC, PPF and fixed deposits.
DO YOU INVESTS IN MUTUAL FUND?
TABLE -9.4:-
YES NO
45 5
GRAPH 9.4:-
DO YOU INVESTS IN MUTUAL FUND
Interpretation: -
From the above chart it is getting clear that now a days people are like to inv
est their money in mutual fund of different assets management company, out of 50
people sampled 45 are investing in the mutual fund.
IF YES, IN WHICH ASSETS CLASS DO YOU WANT TO INVEST IN MUTUAL FUND?
TABLE-9.5:-
TYPES OF SCHEMES RESPONSE
EQUITY 25
DEBT 15
LIQUID 10
GRAPH- 9.5:-
If yes, in which assets class do you want to invest in mutual fund?
Interpretation: -
From the above chart it is getting clear that from 50 peoples sample 25 people a
re invest in equity assets class and 15 people choose to invests in debt class b
ut only just 10 peoples choose to invests in liquid class.
DO YOU INVEST IN HDFC ASSETS MANAGEMENT COMPANY LIMITED?
TABLE-9.6:-
YES NO TOTAL
40 10 50
CHART -9.6:-
DO YOU INVEST IN HDFC ASSETS MANAGEMENT COMPANY LIMITED?
Interpretation
From the above chart it is getting clear that out of 100 people sampled, 40 peop
les are invest in HDFC assets management company and 10 peoples are not invests
in HDFC assets management company.
IF YES, IN WHICH SCHEME WOULD YOU INVEST IN HDFC ASSETS MANAGEMENT COMPANY LIMIT
ED?
TABLE-9.7:-
SCHEMES OF HDFC NO OF INVESTOERS

EQUITY FUND 20
CAPITAL BUILDER FUND 2
PRUDENCE FUND 5
TAX SAVER FUND 10
CORE AND SATELITE FUND 2
TOP 200 FUND 3
BALANCED FUND 4
GROWTH FUND 3
OTHERS FUND 1
CHART-9.7:-
If yes, in which scheme would you invest in HDFC assets management company limit
ed?
Interpretation:-
From the above chart we can see that in HDFC assets Management Company’s EQUITY
FUND maximum number (20) of people are invest. In TAX SAVER FUND (10) number of
people invests. In both TOP 200 FUND and GROWTH FUND (3)numbers of people are in
vests but in BALANCED FUND, CAPITAL BUILDER FUND, CORE AND SATELITE FUND only (4
),(2) and (2) people are invest so investors are not invested in these 3 schemes
. In PRUDENCE FUND (5) numbers of people are invested.
BY WHICH MEDIUM YOU INVEST IN HDFC ASSETS MANAGEMENT COMPANY LIMITED?
TABLE-9.8:-
MEDIUM OF INVESTMENT NO OF PEOPLE
DISTRIBUTOR 10
BANK 40
ONLINE 0
GRAPH-9.8:-
By which medium you invest in HDFC assets management company limited?
Interpretation:-
From the above chart it’s getting cleared that most of the peoples (40) are inve
st by bank and only (10) peoples are invest by distributors. Nobody invests thro
ugh online. So here HDFC assets Management Company has to provide facility by wh
ich investors invest their money with out any middle man in mutual fund schemes
through online.
WHY DO YOU PREFER INVESTING IN HDFC ASSETS MANAGEMENT COMPANY LIMITED?
TABLE-9.9:-
PREFENCE CRITERIA NUMBER
BETTER FUND HOUSE 20
EXCELLENT CUSTOMER SERVICE PROVIDER 4
CONSISTANT RETURN 25
OTHERS 1
GRAPH-9.9:-
Why do you prefer investing in HDFC assets management company limited?
Interpretation:-
From the above graph - it can be seen that majority of the people that is 25 peo
ples give first rank to consistent return and 20 peoples invest in HDFC assets m
anagement company because HDFC assets management company is a better fund house
and 4 peoples believes that HDFC assets Management Company provides EXCELLENT CU
STOMER SERVICE.
IN WHICH TYPE OF PRODUCT/SCHEMES WOULD YOU PREFER WHILE INVESTED IN EQUITY SCHEM
ES OF HDFC ASSETS MANAGEMENT COMPANY LIMITED?
TABLE-9.10:-
TYPES OF SCHEMES RESPONSE
OPEN ENDED 47
CLOSE ENDED 3
GRAPH-9.10:-
In which type of product/schemes would you prefer while invested in equity schem
es of HDFC assets management company limited?
Interpretation
From the above graph it is getting clear that most of peoples (47) prefer to inv
est in OPEN ENDED equity schemes and only just (3) peoples want to invest in CLO
SE ENDED equity schemes of HDFC assets Management Company.
DO YOU KNOW ABOUT ON GOING NEW FUND OFFER OF HDFC ASSTES MANAGEMENT COMPANY LIMI
TED?
TABLE-9.11:-
AWARENESS OF NFO NUMBER
YES 40
NO 10
TOTAL 50
GRAPH-9.11:-
Do you know about on going new fund offer of HDFC assets management company limi
ted?
Interpretation:-
The above graph shows that around 40 % people aware of on going new fund offer o
f HDFC assets Management Company and only 10 % people are unaware from on going
new fund offer of HDFC assets management company.
CHAPTER-10
FINDINGS
Almost 40 % are investing in HDFC assets management company’s schemes.
Out of the total respondent almost 10% said that they invest in fixed de
posit and Insurance. Where as 25% said that they invest in Shares and mutual fun
ds, where as 15% says that they invest in post office schemes.
45% of the investor was found who is invested their savings in different
schemes of mutual fund.
47% respondents prefer to invest in a open ended schemes of HDFC assets
management company, where as remaining only 3% respondents prefer to invest in a
close ended of HDFC assets management company.
It is found that awareness level about Mutual Funds is 47% in Delhi .
Out of the total respondent 25% are investing in equity schemes. Where a
s remaining 15% prefer debt and 10% prefer to invest in liquid schemes.
HDFC assets Management Company are also highly popular for their consist
ent return and 20% responds believes that HDFC assets Management Company is bett
er fund house. While only just 4% responds believes that HDFC assets Management
Company provides EXCELLENT CUSTOMER SERVICE.
Out of the total respondents almost 40% responds are investing through b
ank, only 10% responds investing their money by distributor and nobody invested
by online.
The 40% of the respondent were aware about the ongoing NFO of HDFC ass
ets management company and 10% were not aware about the ongoing NFO of HDFC asse
ts management company.
In HDFC assets Management Company’s EQUITY FUND maximum number 20% of pe
ople are invested and In TAX SAVER FUND 10% number of people are invests.
CHAPTER-11
RECOMMENDATIONS AND SUGGESTIONS
The company should try to make aware people about their different scheme
s through the road show; seminars and presentation that it is not just equity ba
sed schemes but also debt and liquid or balanced schemes also promoted by compan
y. Company has to put hoardings, banners, pamphlets in that area where peoples c
an watch easily.
The customers should be made aware that if the time frame of the investm
ent is more than 3 years Equity option is the best tool for investing in mutual
fund by this investors getting good and high returns for their investments.
The company should be conducting special training and motivation Program
me for their distributors and also for investors so that they are being motivate
d to work, their quality of performance and contribution in sales is maintained.
Company has to provide application forms and other promotional materials

to their distributors time to time and company has to maintain better relations
hip with their distributors by these they can give good contribution in investme
nts.
None of responds invest their money in different schemes of company By O
nline, so company has opportunity to launch online services for their distributo
rs and retail investors.
Company’s core and satellite fund, balanced fund, capital builder fund a
re preferred by very few investors because this schemes not perform well so comp
any has to think about their companies in which they invest investor’s money so
they have to change portfolio of investments.
Most of the people still preferred to invest in post office schemes and
fixed deposits so company has to focus on these investors.
Before making any investment Financial Advisors should first enquire abo
ut the risk tolerance of the investors/customers, their need and time (how long
they want to invest). By considering these three things they can take the custom
ers into consideration.
Systematic Investment Plan (SIP) is one the innovative products launched
by Assets Management companies very recently in the industry. SIP is easy for m
onthly salaried person as it provides the facility of do the investment in EMI.
Though most of the prospects and potential investors are not aware about the SIP
. There is a large scope for the companies to tap the salaried persons.
They need to reorient their staff and effectively utilize technology pla
tforms to retain customers.
They have to update their portfolio timely.
The need of the hour is to make improvements in mutual funds and to crea
te awareness among investors about the risks involved before selling the product
s to them.
As some of the people think that mutual fund is risky so the company sho
uld show people the advantages of the mutual fund and how it is better than the
other investment avenues.
To uproot the investment level the company should give training programm
e to financial agents who approach the investor for the investments. And they sh
ould be aware of all the benefits of the mutual Funds.
Company should undertake the Campaign, Road shows, Advertisement and oth
er type of Publicity for the effective awareness of different schemes that are
available in the market.
The company should arrange seminars and presentations, giving detail ide
a about securities and benefits of investment in mutual fund.
CHAPTER-12
CONCLUSION
This report is prepared to get the ideas of mutual fund and various sche
mes of HDFC. The general concept of the market study will help the different ind
ividuals to invest in different investment tools as per their appetite. Through
research study, it is very much visualized the present market trend opted by the
selected number of people and their perception regarding Mutual Fund.
Hence, from this report I conclude that people are more keen to invest in Mutual
Fund due to the stability and getting more diversified options.
Looking at the performance of all the three funds of last 1 year we can
say that HDFC Balanced Fund is the top performer among the three funds
Half of the respondents are investing in different schemes of mutual fun
d companies.
The investors prefer investing more in banks and post office, which show
s that investors want security, and assured returns.
Others than Banks and post office the next preference of investors who g
o for risky preposition in shares and Mutual Funds. That is basically due to mis
conception that Mutual Fund Companies usually invest in equity market, which sha
kes trust of people in Mutual Fund.
Majority of investors invested in open-ended schemes.
The awareness level about HDFC assets Management Company is moderate but
still the awareness should be created because 10% peoples still not invest in H
DFC assets Management Company.
As the investor prefers safe investment and want consistent return, they
invest in debt schemes (22.69%).
The investors prefer HDFC assets Management Company more because of the
tax benefit and consistent return.
Mutual funds are also preferred because of the cost effectiveness and hi
gher income by investing in equity schemes.
The banks mostly make the investments through the agent’s followed.
Professional and Business class, which is considered to be the most know
ledgeable class of the region prefers Mutual Funds less compare to service class
.
The time frame of the investment by majority of the investors is open-en
ded schemes in which their money is not locked for 3 to 5 years.
BIBLIOGRAPHY
REFERENCES
BOOKS
Marketing Management - Philip Kotler
Personnel Management - C.B.Memoria
MAGAZINES
Business Standard Newspaper
Business world
Mutual Fund Insight
NEWS PAPERS
The Times of India
Financial Express
WEB SITES
www.google.com
www.hdfcfund.com
www.amphiindia.com
www.moneycontrol.com
www.sebi.gov.in
http://www.amfiindia.com/showhtml.asp?page=mfconcept
http://www.amfiindia.com/showhtml.asp?page=mfindustry
http://www.sebi.gov.in/Index.jsp?contentDisp=Department&dep_id=4
http://shell.windows.com/fileassoc/0409/xml/redir.asp?Ext=pdf
http://www.amfiindia.com/showhtml.asp?page=aum
http://www.hdfcfund.com/products/schemeShow.jsp?schemeId=342&fundID=1
http://www.hdfcfund.com/aboutus/index.jsp
http://www.hdfcfund.com/fundschool/index.jsp
http://www.hdfcfund.com/navcorner/index.jsp
http://www.hdfcfund.com/news/index.jsp
http://www.hdfcfund.com/download/sebiCirculatShow.jsp
http://www.amfiindia.com/pu-showfundwiseaum.asp?admin=yn
http://www.amfiindia.com/accounts_halfyearly.asp
http://www.amfiindia.com/showhtml.asp?page=sitemap
http://www.amfiindia.com/accounts_annual.asp
http://www.moneycontrol.com/mutualfundindia/
http://www.moneycontrol.com/india/mutualfunds/bestmfipo/15/30/bestmutualfundIPOm
f
http://www.moneycontrol.com/planning_desk/understandingmf.php?step1=1
http://www.moneycontrol.com/india/mutualfunds/comparefunds/15/30/mf_compare/All
http://www.moneycontrol.com/easymf/learn/
http://www.moneycontrol.com/planning_desk/understandingmf.php?step1=1
QUESTIONNAIRE
Dear Sir/ madam
I am Rajni doing MBA from G.G.S.I.P University. I m preparing a project on A STU
DY ON MUTUAL FUND. For this I have designed a Questionniare to know your views.
please fill the given as per your thinking and experiences with this. I will be
thankful to you for this.
Name: ………………………………………………………………………..
Address: ……………………………………………………………………..
Contact No :®………………( O)……………… (M)………………………
City: ………...............Pin: ………………….State: ……………………….
1. Name: ____________________
2. Age:
(a) Below 30 (b) 30-40 (c) 40-50 (d) Above 50
3. Occupation:
(a) Govt.service (b) Pvt.service (c) Busines
s
(d) Agriculture (e) others
4. Which investment avenues are you aware of?
Equity /Mutual fund
Post Office (NSC, KVP, PPF)
Fixed Deposits
Others
If others please specify
5. Do you invest in mutual funds?
Yes No
6. If yes, in which assets class do you want to invest in mutual funds?
Equity Debt Liquid
7. Do you invest in HDFC mutual fund?

Yes No
8. If yes, in which scheme would you invest in HDFC MUTUAL FUND?
Equity
Capital builder
Prudence fund
Tax saver
Core & satellite
Top 200 fund
Balanced fund
Growth
Others
9. By which medium do you invest in HDFC mutual fund scheme?
Distributor Bank Online
10.Why do you prefer investing in HDFC MF?

Better fund house
Excellent customer service provider
Consistent return
Other
If other please specify
11.Which type of product/scheme would you prefer while investing in Equity

Scheme of HDFC mutual fund?
Open-ended Close ended
12. Do you know about on going new fund offers of HDFC AMC?
Yes No
Remarks if any other please specifies: -
THANKS
.

Mutual Fund (Rajni - (Mba (Fin) Rdias

Hochgeladen von

Dokumentinformationen

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Mutual Fund (Rajni - (Mba (Fin) Rdias

Hochgeladen von

Copyright:

Verfügbare Formate

RAJANI -MBA(FIN)-4TH SEM ,

1.2 THE CONCEPT OF MUTUAL FUND IN DETAIL :-

• ENTRY AND EXIT COST :-

THE STRUCTURE CONSISTS OF:-

FOLLOWING ARE THE BODIES APPOINTED BY THE TRUSTEES/AMC:-

• Systematic Withdrawal Plans (SWPs)

FUNDS NET ASSET = ASSET – LIABILITIES

Comparison of Sharpe and Treynor

HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (HDFC):-

EQUITY SCHEMES OF HDFC ASSET MANAGEMENT COMPANY:-

Locations of HDFC Assets Management Company

Interpretation: - In Occupation group out of 10 investors, 40% are Pvt. Employee

DO YOU INVESTS IN MUTUAL FUND

If yes, in which assets class do you want to invest in mutual fund?

DO YOU INVEST IN HDFC ASSETS MANAGEMENT COMPANY LIMITED?

SCHEMES OF HDFC NO OF INVESTOERS

Company has to provide application forms and other promotional materials

7. Do you invest in HDFC mutual fund?

10.Why do you prefer investing in HDFC MF?

If other please specify

11.Which type of product/scheme would you prefer while investing in Equity

Das könnte Ihnen auch gefallen