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Contents
Pg No.
Preface
Introduction to Topic
Introduction to Companies
Review of literature
Need/Scope of Study
Objective of the study
Research Methodology
Analysis
Findings
Limitations
Recommendations
Conclusion
Bibliography
PREFACE
Many individuals own mutual funds today. Indeed, the mutual fund industry which reached $3.64
trillion in assets by 2009,comprises the bulk of many investors financial assets, whether for
retirement or taxable savings purposes .To a large extent, mutual funds are the investment vehicle for
the majority of house holds in the India.
In the introductory chapter, I have consider the role of mutual fund in todays investing environment,
learn just how popular mutual funds have become and consider why investors have chosen to put so
much money into funds. Clearly, mutual funds are a major financial asset for numerous investors,
and in many ways they play the dominant role in todays investing world for millions of house holds.
I have also told about the basics of mutual funds, defining terms and discussing the mechanics about
how funds work. I have also considered other alternatives .I have mainly focused up on the study
that which companys mutual investments are mostly preferable by investors. Today investors are
becoming rational & they see all the parameters before investing .I had also reviewed the types of
mutual funds, structure of mutual funds and their current scenario.
The over all objective of my study on this project is to know which company provides better
investment opportunities from HDFC & ICICI and make the investors to be able to take better
decisions .Of course, as every study needs, Id adopted an objective view of over all situation that
examines both sides of the issue situated in HDFC &ICICI.
Introduction to topic
investors when they buy or sell shares. Many funds these days are no load and impose no sales
charge. Mutual funds are investment companies regulated by the Investment Company Act of 1940.
Related: open-end fund, closed-end fund.
Historical Aspect
Mutual fund firstly was established in 1822 in the form of Society General De Belguique. It mainly
gains the progress in Switzerland & little in franc and Germany in its initial days. The first
investment trust The foreign and colonial govt. trust Was founded in London in 1868.
Indian Scenario of Mutual Fund
The origin of mutual fund industry in India is with the introduction of the concept of by UTI in the
year 1963. Through the growth was slow, but it accelerated from the year 1987 when non-UTI
players entered in industry. The mutual fund industry goes through four phases:-
In the first phase, UTI was established in 1963 by an act of parliament. In 1978 it was delinked from
RBI & the IDBI took over the control of UTI. In second phase, SBI entered as first non-UTI mutual
fund provider then it was followed by can bank (Dec. 87). PNB (Aug 89) & LIC in 1989. In third
phase, the private sector entered in it. The Erstwhile Kothari pioneer (now merged with Franklin
Templeton) was first registered in July 1993 in mutual fund. In revised registration of SEBI I n 1993
the industry functions under SEBI. And the fourth phase had bitter experience for UTI. It was
bifurcated into two separate entities. One is the specified under taking of UTI with AUM of
29,835cr. The second is UTI mutual fund ltd. Sponsored by SBI, PNB, BOB and LIC& it is
registered with SEBI.
Types of
Mutual Fund
Structure
Open Ended
Close
Investment
Objective
Growth
Income
Special schemes
Industry specific
Index scheme
Internal
Sector scheme
Balance
Money Market
Diversification.
Professional Management.
Liquidity (mainly in case of opened mutual funds).
Regulatory.
Convenience.
Low cost.
Reduction of transaction cost.
Diverse returns.
Advantages to Industrial concern.
Tax relief.
Attract foreign Capital.
Reduction / Diversification of risk.
No guaranties.
Fees & Commission.
Taxes.
Management Risk.
Introduction to Companies
Equity funds.
Balanced funds.
Debt funds.
Liquid funds.
The mutual fund of ICICI is a joint venture with Prudential PLC. Of America, one
of the largest
life insurance companies in the USA. Prudential ICICI mutual fund was set up on 13th of Oct. 1993
with two sponsors.
ICICI Bank started as a wholly owned subsidiary of ICICI Limited, an Indian financial institution,
in 1994. Four years later, when the company offered ICICI Bank's shares to the public, ICICI's
shareholding was reduced to 46%. In the year 2000, ICICI Bank offered made an equity offering in
the form of ADRs on the New York Stock Exchange (NYSE), thereby becoming the first Indian
company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. In
the next year, it acquired the Bank of Madura Limited in an all-stock amalgamation. Later in the year
and the next fiscal year, the bank made secondary market sales to institutional investors
Products and Schemes of HDFC mutual fund
Equity funds.
Balanced funds.
Debt funds.
Liquid funds.
Childrens gift fund
Review of Literature
OMPANY PROFILE ICICI Bank is India's second-largest bank with total assets of about Rs. 1
trillion and a network of about 540 branches and offices and over 1,000 ATMs. ICICI Bank offers a
wide range of banking products and financial services to corporate and retail customers through a
variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of
investment banking, life and non-Banking , venture capital, asset management and information
technology. ICICI Bank's equity shares are listed in India on stock exchanges at Chennai,
Muzaffarnagar, Kolkata and Vadodara, the Stock Exchange, Mumbai and the National Stock
Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on
the New York Stock Exchange (NYSE). HDFC Banks exposure to market risk a function of its
trading and asset and liability management activities and its role as a financial intermediary
in customer-related transactions. HDFC had tried its best in mutual fund sector. It has grown up its market
share in a meanwhile time. The objective of market risk management is to minimize the impact of losses due
to market risks on earning and equity capital.
The need of study arises for learning the variables available that distinguish the mutual fund
of two companies.
To know the risk & return associated with mutual fund.
To chose best company for mutual investment between HDFC & ICICI.
To project mutual fund as the productive avenue for investing activities.
Objectives
To analysis which provides better returns from HDFC &ICICI.
Research Methodology
Research refers to search for knowledge. One can also define research as a scientific and systematic
search for pertinent information on a specific topic. It is an art of scientific investigation.
Research Methodology:It is the way to systematically solve a problem. The methodology adopted in this study is
explained below: Research Design
1.
Problem Defining:
In a competitive situation with multiple mutual funds operating in Indian market, it is necessary
to know about the performance of different mutual funds as the performance of mutual fund
decides about the future of Mutual Fund Company. In this study my focus is upon performance
of investors regarding HDFC &ICICI. This is my problem to be studied for research.
2.
Literature Survey:
I have used newspapers, magazines related to business & finance & apart from websites.
Type of research:
The research is qualitative & descriptive in nature. Qualitative research is that talk about the quality
of the subject to be researched and Descriptive research is one that describes things as exists in
present.
3.
Sources of data
Primary Sources I have used questionnaire as primary source for collecting data for my study.
Secondary sources I had collected my secondary data from websites & journals.
Sampling
It represents whole population. It is the processes of choosing a sample from whole population .I
have choose a sample of high class & middle class people who have invested in mutual funds as a
sample.
Tools
I have used some charts (Pie chart, column chart, cylinder chart, cone chart)
a)
Sampling Size
It represents that how many candidates youve chosen to be filled up your questionnaire or
candidates upon whom you can study. I had chosen sample of 100 candidates.
b)
Sampling Techniques
Data Interpretation =
Data interpretation is that in which we analysis the whole collected data & tries to give it in simple
words to be understandable.
Analysis
YES
100
NO
Interpretation
All the candidates who are asked to fill the questionnaire have invested in mutual fund.
HDFC
65
ICICI
35
Reliance
SBI
LIC
Kotak Mahindra
Others
Interpretation
Out of 100 candidates up to 65have invested in mutual fund with HDFC & 35 have invested with
ICICI. There is no investor who have invested in mutual fund with any another company.
25-35
12
35-45
60
More than 45
20
Interpretation
60 investors are of age between 35-45. 20 are of age more than 45. 12 are of between of 25-35. 8 are
of 15-25. This data shows that many investors are of middle age & there are less investors of young
age in mutual fund.
1 lakh
2-4 lakh
4-5 lakh
More than 5
0
10
20
70
Interpretation
Up to 70 investors have income more than 5 lakh. 20 have between 4-5 lakh.10 investors have
income between 2-4 lakh & there is no investor who have income up to 1akh.
5. From where you come to know about this companys mutual fund
schemes?
Family & relative
35
40
Company employee
15
Other
10
Interpretation
Many investors (up to 40) have been come to know about the company to be invested by their
friends & peers.35 have been known by their family & relatives .15have been come to know by
company employees & 10 by others. This means many have come to know by their friends & peers.
0-1 year
15
1-2 year
35
2-4 year
30
More than 4
20
Interpretation
15 investors have time of investment less than one year. 20 have time duration of their investment
between of 1-2 year. 30 have between 2-4 year & 35 have more than 4 years.
So, we can say that 35 investors have more experience than others.
Highly satisfied
15
Satisfied
35
Neutral
30
Dissatisfied
Highly Dissatisfied
15
5
Interpretation
Out of 100 investors 15 are highly satisfied. 35 are satisfied. 30 are neutral towards employee
behavior of a company. 15 are dissatisfied. 5 are highly dissatisfied. We say that many people are
satisfied by employee behavior.
20
65
15
Interpretation
20% investors are innovator means they like to take risk for more returns. 15% are moderate
towards risk means they are indifferent towards risk. 65% are risk adverse means they mainly try to
avoid risk.
Highly Satisfied
15
Satisfied
25
Neutral
40
Dissatisfied
15
Highly dissatisfied
5; 5%
15; 15%
15; 15%
Highly Satisfied
Satisfied
Neutral
25; 25%
40; 40%
Interpretation
Dissatisfied
Highly dissatisfied
15% investors are highly satisfied by companys documentation policy (filling up the forms etc.).
25% are satisfied, 40% never cares about it or are moderate towards it , 15% are dissatisfied by it &
5% are highly dissatisfied.
68
32
Interpretation
According to collected data 68 investors thinks that HDFC provides better returns where as 32 to
think that ICICI provides better returns.
11. Would you like to exchange your investment with one another
between HDFC & ICICI?
YES
15
NO
85
Interpretation
15 investors said that they would like to change their investment with each another between HDFC
& ICICI. But 85 investors say that they are ok with their companies and they wouldnt like to
exchange their investment.
Findings
e)
As the age increases investors are much satisfied, see more risk & become more risk adverse.
f)
g)
Investors are not highly satisfied by company rules & employee behavior.
h)
Limitations
There are some limitations of my study, those are as Following: Sample limitation:- which sample is taken by me is very small in size
to Compare mutual
Recommendations / Suggestions
In my study I have found some limitations. For that I can suggest both companies following
suggestions or areas of improvement: ICICI bank should try to provide better returns to its investors as compare to HDFC.
Both companies should try to invest in better securities for better profits.
Both companies should try to satisfy their customer by better customer service or by
improving customer relationship management.
Companies should try to make people initiative towards risk.
Investors should be made fully aware of the concept of mutual fund & all the terms and
conditions.
It should more emphasize in advertising, as it is the most
Powerful tool to position ant brand in the mindsets of customers
Conclusion
To conclude we can say that mutual fund is a very much profitable tool for investment because of its
low cost of acquiring fund, tax benefit, and diversification of profits & reduction of risk. Many
investors who have invested in mutual fund have invested with HDFC and them also thinks that it
provides better returns than ICICI .There is also an affect of age on mutual fund investors like; old
people & widows want regular returns than capital appreciation. Companies can adopt new
techniques to attract more & more investors. In my study I was suppose to do comparative analyses
the mutual fund of HDFC &ICICI and I had found that people consider HDFC better than ICICI. But
ICICI have also respondents and it can increase its investors by improving itself in some terms.
To conclude we can say mutual fund is a best investment vehicle for old & widow, as well as
to those who want regular returns on their investment.
Mutual fund is also better and preferable for those who want their capital appreciation.
Both the companies are doing considerable achievements in mutual fund industry.
There are also so many competitors involved those affects on both companies.
Bibliography
Books:C.R.Kothari, Research Methodology. Vikas Publishing house Pvt.Ltd.2007.
ICICI and HDFC Brochure .
Websites:www.wiki.answers.com
www.hdfc.com
www.icici.com