CHAPTER-1

INTRODUCTION

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1.1 INTRODUCTION OF MUTUAL FUND

Mutual fund is the pool of the money, based on the trust who invests the
savings of a number of investors who shares a common financial goal, like the
capital appreciation and dividend earning. The money thus collect is then
invested in capital market instruments such as shares, debenture, and foreign
market. Investors invest money and get the units as per the unit value, which
we called as NAV (net assets value).
Mutual fund is the most suitable investment for the common man as it offers
an opportunity to invest in diversified portfolio management, good research
team, professionally managed Indian stock as well as the foreign market, the
main aim of the fund manager is to taking the scrip that have under value and
future will rising, then fund manager sell out the stock. Fund manager
concentration on risk – return trade off, where minimize the risk and maximize
the return through diversification of the portfolio. The most common features
of the mutual fund unit are low cost.
Most open-end Mutual funds continuously offer new shares to investors. It is
also known as open-ended investment company. It is different from close-
ended companies.
Investment in securities are spread across a wide cross section of industries
and sectors thus the risk is reduced. Diversification reduces the risk because
not all stocks may move in the same direction in same proportion at same
time. Mutual funds issues units to the investors in accordance with quantum of
money invested by them. Investors of Mutual funds are known as “unit
holders”. The profits and losses are shared by the investor in proportion to
their investment. The mutual fund comes out with different schemes that
varies from time to time.

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1.2 DEFINITION OF MUTUAL FUND

“A mutual fund is a pool of money from numerous investors who wish to

save or make money just like you. Investing in a mutual fund can be a lot
easier than buying and selling individual stocks and bonds on your own.
Investors can sell their shares when they want.”

“A mutual fund is nothing more than a collection of stocks and/or bonds. You
can think of a mutual fund as a company that brings together a group of
people and invests their money in stocks, bonds, and other securities. Each
investor owns shares, which represent a portion of the holdings of the fund.”

1.3 ADVANTAGES OF MUTUAL FUNDS

Portfolio Diversification-Investing in a diversified portfolio can be very
expensive. The nice thing about mutual funds that they allow anyone to
hold a diversified portfolio. The reason why investors invest in a diversified
portfolio is because it increases the expected returns while minimizing the
risk.
Liquidity-Another nice advantage to mutual funds is that the assets are
liquid. In financial language, liquidity basically refers to converting your
assets to cash with relative ease. Mutual funds are considered liquid
assets since there is high demand for many of the funds in the
marketplace.
Professional Management-Mutual funds do not require a great deal of
time or knowledge from the Investor because professional managers
manage them. They can be a big help to inexperienced investor who is
looking to maximize their financial goals.
Ease of Companies-Mutual funds is also convenient because they are
easy to compare. This is because many mutual fund dealers allow the
investor to compare the funds on metrics such as level of risk, return price.
Because Information is easily available, the Investor is able to make wise
decisions.

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Less Risk: - Investors acquire a diversified portfolio of securities even with
a small investment in a mutual fund. The risk in diversified portfolio is
lesser than investing in 2 or 3 securities.
Low Transaction cost: - Due to Economies of scale, mutual funds pay
lesser transaction cost. The benefits are passed on to investors.
Transparency: - Funds provide investors with updated information
pertaining to market & schemes. All material facts are disclosed to the
investor as required by regulator.
Safety: - Mutual funds industry is a part of well-regulated investment
environment where interest of the investors is protected by the regulators.
All funds are registered with SEBI & complete transparency is followed.

1.4 DISADVANTAGES OF MUTUAL FUNDS

Cost:-
The downside of mutual funds is that they have a high cost associated
with them in relation to the returns they produce. This is because investors
are not only charged for the price of the fund but they will often face
additional fees. Depending on the fund, commission charges can be
significant. You will need to pay fee that will go towards the fund manager.

Index Does Better: -

In some cases, the stock Index may outperform the mutual fund. However
this is not always the case as it depends in large part on the mutual fund
the Investor has invested in, as well as the skill set of fund manager.
Therefore, it is a good idea to do your research before investing in fund. It
is historical data indicates that is consistently underperformed compared to
an index, then it is not wise investment.

Fees:-
The fees that are charged will depend on the type of mutual fund
purchased. If a fund is risker and more aggressive, the management fee
will tend to be higher. In addition, the investor will also be required to pay
taxes, transaction fees as well as other costs related to maintaining the
fund.

4
 No Control over Investments:-
You have absolutely no control over what the Fund manager Des with you
money. You cannot advise him on how your money is to be invested. You
only sit back and hope for the best.
Profitability of High returns reduced significantly:-
A mutual fund contains a diversified basket of securities. If a single
security outperforms by a significant margin the impact will be limited.
Don’t Expect your Investment to grow and give you profit Overnight. There
will also be downward fall in the limits of the fund.
Personal Tax situation is not considered:-
When you Invest in a Mutual Fund, your money is pooled together with
others and your personal tax situation is not considered while making
Investment decisions. The most you can do is to choose between growth
fund.

1.5 HISTORY OF MUTUAL FUNDS

Unit Trust of India was the first mutual fund set up in India in the year 1963. In
early 1990s, Government allowed public sector banks and institutions to set
up mutual funds. In the year 1992, Securities and exchange Board of India
(SEBI) Act was passed. The objectives of SEBI are – to protect the interest of
investors in securities and to promote the development of and to regulate the
securities market.

As far as mutual funds are concerned, SEBI formulates policies and regulates
the mutual funds to protect the interest of the investors. SEBI notified
regulations for the mutual funds in 1993. Thereafter, mutual funds sponsored
by private sector entities were allowed to enter the capital market. The
regulations were fully revised in 1996 and have been amended thereafter
from time to time. There are four Phases in which Mutual funds have evolved.

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FIRST PHASE - 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It
was set up by the Reserve Bank of India and functioned under the Regulatory
and administrative control of the Reserve Bank of India. In 1978 UTI was de-
linked from the RBI 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.

SECOND PHASE - 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by
public sector 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 established in June 1987 followed by Can bank Mutual Fund
(Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual
Fund (Nov 89), Bank of India (Jun 90), 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.

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
families. 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 governed. The erstwhile Kothari Pioneer (now merged with
Franklin Templeton) was the first 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 1996.The number of
mutual fund houses went on increasing, with many foreign mutual funds
setting up funds in India and also the industry has witnessed several mergers
and acquisitions.

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FOURTH PHASE - since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI
was bifurcated into two separate entities. One is the Specified Undertaking of
the Unit Trust of India with assets under management of Rs.29, 835 crores as
at the 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 India, 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 crores of assets
under management and with the setting up of a UTI Mutual Fund, conforming
to the SEBI Mutual Fund Regulations, and with recent mergers taking place
among different private sector funds, the mutual fund industry has entered its
current phase of consolidation and grow.

1.6 ASSOCIATION OF MUTUAL (FUNDS IN INDIA AMFI)

With the Increase in mutual fund players in India, a need for mutual fund
association in India was generated to function as a non-profit organization.

Association of Mutual Funds in India (AMFI) was incorporated on 22nd

August, 1995.
AMFI is an apex body of all Asset management Companies (AMC) which has
been registered with SEBI. Till date all the AMCs are that have launched
mutual fund schemes are its members. It functions under the supervision and
guidelines of its Board of Director.

Association of Mutual Funds India has brought down the Indian Mutual Fund
Industry to a professional and healthy market with ethical lines enhancing.

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1.7 THE OBJECTIVES OF ASSOCIATION OF MUTUAL FUNDS IN INDIA

The Association of Mutual Fund of India with 30 registered AMCs of the

country. It has certain defined objectives with the guidelines of its board of
directors. The objectives are as follows.
 The mutual fund association of India maintains high professional and
ethical standards in all areas of operation of the industry.
 It also recommends and promotes the top class business practices and
code of conduct which is followed by members and related people
engaged in the activities of mutual fund and asset 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
to represent to SEBI on all matters concerning the mutual fund
industry.
 To represent to the Government, Reserve Bank of India and other
bodies on all matters relating to the Mutual Fund Industry.
 To undertake nationwide investor awareness programme so as to
promote proper understanding of the concept and working of mutual
funds.
 To Dessisimate information on Mutual Fund Industry and to undertake
studies and research directly and/or in association with other bodies.
 To regulate conduct of distributors including disciplinary actions
(cancellation of ARN) for violation of code of conduct.
 To protect Interest of Investor / Unit holder.

1.8 TYPES OF MUTUAL FUNDS SCHEMES IN INDIA

TYPES OF MUTUAL FUNDS

BY STRUCTURE BY NATURE BY INVESTMENT OTHER

SCHEMES OBJECTIVE
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BY STRUCTURE

Open-Ended - This scheme allows investors to buy or sell units at
any point in time. This does not have a fixed maturity date.
Investors can conveniently buy & sell units at Net Asset Value
related Prices. The key feature of Open Ended scheme is liquidity.

Closed-Ended - A closed-end fund has a fixed number of shares
outstanding and operates for a fixed duration (generally ranging
from 3 to 15 years). The fund would be open for subscription only
during a specified period and there is an even balance of buyers
and sellers, so someone would have to be selling in order for you to
be able to buy it. Closed-end funds are also listed on the stock
exchange so it is traded just like other stocks on an exchange or
over the counter. Usually the redemption is also specified which
means that they terminate on specified dates when the investors
can redeem their units.

Interval – Interval schemes combine the features of open-ended
and close-ended funds. The units may be traded on the stock
exchange or may be open for sale or redemption during pre-
determined intervals at NAV-related prices. Fixed maturity plans, or,
FMPs are examples of these types of schemes.

BY NATURE

Equity Fund - Equities are a popular mutual fund category amongst
retail investors. They invest the funds into Equity holdings. The
structure of the fund may vary different for different schemes and the
fund manager’s outlook on different stocks.
These funds are sub- classified depending on Investment objective
such as
 Diversified Equity Funds
 Mid-Cap Funds
 Sector Specific Funds
 Tax Savings Funds (ELSS)

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 Debt Funds - Debt funds are mutual funds that invest in fixed income
securities like bonds and treasury bills. Gilt fund, monthly income plans
(MIPs), short term plans (STPs), liquid funds, and fixed maturity plans
(FMPs) are some of the investment options in debt funds. Apart from
these categories, debt funds include various funds investing in short
term, medium term and long term bonds.

Balanced Funds - This scheme allows investors to enjoy growth and
income at regular intervals. Funds are invested in both equities and
fixed income securities; the
proportion is pre-determined and disclosed in the scheme related offer
document. These are ideal for the cautiously aggressive investors.
BY INVESTMENT OBJECTIVE


Growth Schemes - Growth Schemes are also known as equity
schemes. The aim of these schemes is to provide capital appreciation
over medium to long term. These schemes normally invest a major part
of funds in Equities & look for capital appreciation.


Income Scheme - Income Scheme are also known as debt schemes.
The aim of the scheme is to provide regular and steady income to the
investor. These Schemes invest in fixed income securities such as
bonds & corporate debentures. In such schemes capital appreciation
may be limited.


Balance Scheme - This scheme allows investors to enjoy growth and
income at regular intervals. Funds are invested in both equities and
fixed income securities; the proportion is pre-determined and disclosed
in the scheme related offer document. These are ideal for the
cautiously aggressive investors.


Money Market scheme - This is ideal for investors looking to utilize
their surplus funds in short term instruments while awaiting better
options. These schemes invest in short-term instruments such as
treasury bills, certificate of Deposit, commercial paper & Intercompany
call money and seek to provide reasonable returns for the investors.
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OTHER SCHEMES


Tax Saving Schemes – As the name suggests, this scheme offers tax
benefits to its investors. The funds are invested in equities thereby
offering long-term growth opportunities. Tax saving mutual funds
(called Equity Linked Savings Schemes) has a 3-year lock-in period.


Index Schemes - - Index schemes is a widely popular concept in the
west. These follow a passive investment strategy where your
investments replicate the movements of benchmark indices like Nifty,
Sensex, etc.


Sector Specific Schemes –Sectoral funds are invested in a specific
sectors like infrastructure, IT, pharmaceuticals, etc. or segments of the
capital market like large caps, mid-caps, etc. This scheme provides a
relatively high risk-high return opportunity within the equity space.

COMPARISON BETWEEN FD, BONDS AND MUTUAL FUND- FEATURES

Characteristics FD'S Bonds Mutual Funds

Accessibility Low Low High

Tenor Fixed(Medium) Fixed(Long) No Lock-in

Min.Investment Rs 1000 Rs 5000 Rs 5000

Dividend Tax-
Tax Benefits None 80L , 88 Free

Liquidity Low Very Low Very High

Convenience Medium Tedious Very High

Transparency None None Very High

TABLE-1 comparison between FD, bonds, and mutual funds

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1.9 ORGANIZATION OF MUTUAL FUND

Graph-1 organizations of mutual funds

THE CHART INDICATES THE GROWTH OF ASSETS UNDER

MANAGEMENT OVER THE YEARS.

MUTUAL FUNDS IN INDIA

The mutual fund industry in India began in 1963 with the formation of the Unit
Trust of India (UTI) as an initiative of the Government of India and the
Reserve Bank of India. Much later, in 1987, SBI Mutual Fund became the first
non-UTI mutual fund in India.

The year 1963 heralded a new era of Mutual funds in India. His was marked
by the entry of private companies in the sector. After the Securities and
Exchange Board of India (SEBI) Act was passed in 1992, the SEBI Mutual
Fund Regulations came into being in 1996. Since then, the Mutual fund
companies have continued to grow exponentially with foreign institutions
setting shop in India, through joint ventures and acquisitions.
As the industry expanded, a non-profit organization, the Association of Mutual
Funds in India (AMFI), was established on 1995. Its objective is to promote

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healthy and ethical marketing practices in the Indian mutual fund Industry.
SEBI has made AMFI certification mandatory for all those engaged in selling
or marketing mutual fund products.

MAJOR MUTUAL FUND COMPANIES IN INDIA

PUBLIC SECTOR MUTUAL FUNDS

 Bank of Baroda Mutual Fund

 State Bank of India Mutual Fund

 LIC Mutual Fund

 UTI Mutual Fund

 Canara Bank Mutual Fund

PRIVATE SECTOR MUTUAL FUND

 ABN AMRO Mutual Fund

 Birla Sun Life Mutual Fund

 HDFC Mutual Fund

 HSBC Mutual Fund

 ICICI Prudential Mutual Fund

 Tata Mutual Fund

 Standard Chartered Mutual Fund

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  Morgan Stanley Mutual Fund

 Alliance Capital Mutual Fund

 Franklin Templeton Mutual Fund

 Reliance Mutual Fund

 DSP Blackrock Mutual Fund

These above are the Various Mutual Funds in India which has given a good
return.

REGULATORY BODY OF MUTUAL FUNDS IN INDIA

As far as Mutual funds are concerned, SEBI (Securities & Exchange Board
of India) formulates policies and regulates the mutual funds to protect the
interest of the investor.

In January 1993, SEBI prescribed registration of mutual funds integrity in

business transactions and financial soundness while granting permission.
This would curb excessive growth of mutual funds and protect investor’s
interest by registering only the sound promoters with proven track record &
financial strength.

The offer documents of schemes launched by mutual funds and the scheme
particulars are required to be vetted by SEBI. A standard format for mutual
fund prospectuses is being formulated. Mutual funds have been required to
adhere to a code of advertisement.
SEBI has introduced a change in the Securities Control and Regulations Act
governing the mutual funds. The mutual funds which have been in the market
for at least five years are allowed to assure a maximum return of 12 per cent

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only, for one year.
The current SEBI guidelines on mutual funds prescribe a minimum start-up of
Rs.50 crore for an open-ended scheme, and Rs.20 crore for closed-ended
scheme, failing which application money has to be refunded. AMFI
(Association of Mutual Funds in India) have appealed to regulatory authority
of India for scrapping the minimum requirement
Also, 50% of the directors of AMC must be independent. All mutual funds are
required to be registered with SEBI before they launch any scheme.
The transparent and well understood declaration or Net Asset Values (NAVs)
of mutual fund schemes is an important issue in providing investors with
information as to the performance of the fund. SEBI has warned some mutual
funds earlier of unhealthy market
Trustees shall immediately report to the Board of any special developments in
the mutual fund.

NET ASSET VALUE (NAV)

The Net Asset Value (NAV) of a mutual fund is the price at which the units of
a mutual fund are bought and sold. It is the market value of the fund after
deducting its liabilities. The value of all units of a mutual fund portfolio are
calculated on a daily basis, from this all expenses are then subtracted. The
result is then divided by the total number of units the resultant value is the
NAV. NAV is also sometimes referred to as Net Book Value or book Value.

NAV indicates the market value of the units in a fund. So, it helps an investor
keep track of the performance about the mutual fund. An investor can
calculate the actual increase in the value of their investment by determining
the percentage increase in the mutual fund NAV. NAV, therefore, gives
accurate information about the performance about the mutual fund.

CALCULATION OF NAV
Mutual fund assets usually fall under two categories – securities & cash.
Securities, here, include both bonds and stocks. Therefore, the total asset
value of a fund will include its stocks, cash and bonds at market value.
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Dividends and interest accrued and liquid assets are also included in total
assets

The formula for calculating NAV:

NAV of a mutual funds = (Assets of the fund – Liabilities of the fund)

Number of outstanding units of the fund

The mutual fund itself and/or certain accounting firms calculate the NAV of a
mutual fund. Since, mutual funds depend on stock markets, they are usually
declared after the closing hours of the exchange.

All Mutual Funds are required to publish their NAV at every business day as
per SEBI guidelines.
NAV is obtained after subtracting the expense ratio of a fund. This expense
ratio is the total of all expenses made by the mutual fund annually, including
the operating expenses and the management fees, distribution and marketing
fees, transfer agent fees, custodian fees and audit fees.

EXAMPLE OF CALCULATION OF NAV

As an example, assume there are two investors X and Y who have invested in
a mutual fund which decided to issue out units at Rs 1/-
X invests Rs 100/- and Y invests Rs 200/-.
The total corpus of the mutual fund will be Rs 100 + Rs 200 = Rs 300/- and X
will get 100 units and Y will get 200 units.
Now suppose the mutual fund manager invests smartly over a year and
makes the investment grow and the corpus becomes Rs 800/-.
The NAV will be calculated as
NAV of a mutual funds = (Assets of the fund – Liabilities of the fund)

Number of outstanding units of the fund

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= [Rs 800/- 0] / 300 = 2.67
= The NAV is 2.67.
= So X’s value of investments will be 100 units * 2.67 = Rs 267/- and
= Y’s value of investments will be 200 units * 2.67 = Rs 534/-.
As per the regulator SEBI’s guidelines, all mutual funds are required to
publish the NAV of their schemes at least once a week and in two leading
newspapers.

1.10 HDFC Mutual Fund

HDFC Mutual Fund has been constituted as a trust in accordance with the
provisions of the Indian Trusts Act, 1882, as per the terms of the trust deed
dated June 8, 2000 with Housing Development Finance Corporation Limited
(HDFC) and Standard Life Investments Limited as the Sponsors / Settlers and
HDFC Trustee Company Limited, as the Trustee. The Trust Deed has been
registered under the Indian Registration Act, 1908. The Mutual Fund has been
registered with SEBI, under registration code MF/044/00/6 on June 30, 2000.

HDFC ASSET MANAGEMENT COMPANY LIMITED (AMC)

HDFC Asset Management Company Ltd (AMC) was incorporated under the
Companies Act, 1956, on December 10, 1999, and was approved to act as an
Asset Management Company for the HDFC Mutual Fund by SEBI vide its
letter dated July 3, 2000.

In terms of the Investment management Agreement, the trustee has

appointed HDFC Asset Management Company Limited to manage the mutual
funds. As per the terms of the Investment Management Agreement, the AMC
will conduct the operations of the Mutual Fund and manage assets of the
schemes, including the schemes launched from time to time.

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ACHIEVEMENT OF HDFC


HDFC Asset Management company (AMC) is the first AMC in India to
have been assigned the CRISIL Fund House -1 rating.


This is the highest fund governance and process quality rating which
reflect the highest governance levels and fund management practices
at HDFC AMC.


It is only fund house to have been assigned this rating for 2 years in
succession.

INVESTMENT OBJECTIVE
To provide long-term capital appreciation by investing predominantly in Small-
Cap and Mid-
Cap companies
Current Expense Ratio 2.50%
(Effective Date 28th June 2017)

On the first 100 crores daily net assets

On the next 300 crores daily net assets 2.25% On the next 300 crores daily net
assets 2.00% On the balance of the net assets 1.75%

PRODUCT LABELLING
The product is suitable for investors who are seeking:

The product is suitable for investors who are seeking:

Investment predominantly in equity and equity related instruments of
Small-Cap and Mid-Cap companies

Investors should consult their financial advisers if in doubt about
whether the product is suitable for them.
 Investors understand that their principal will be at moderately high risk.

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Graph-2 riskometer

1.11 COMPARING RETURNS OF HDFC MUTUAL FUND FOR LAST 5

YEARS
Investment info

Investment Objective: The investment objective of the scheme is to

generate long-term capital growth from an actively managed portfolio of equity
and equity-related securities including equity derivatives.

Table-2 funds and average assets size

As per the above chart you can see HDFC Mutual Fund is open ended. Its
average asset size is 859.76 crores. HDFC Introduced small and midcap
growth fund in 2008. Since then it has given good returns.

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1.12 PERFORMANCE OF THE DIFFERENT MUTUAL FUNDS

Table-3 performance of different mutual funds

1.13 PORTFOLIO HOLDINGS OF THE HDFC MUTUAL FUNDS

Table-4 portfolio holdings of HDFC MUTUA FUNDS

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ASSET UNDER MANAGEMENT MOVEMENT

The Below graph shows the Variation in the assets under management

Graph-3 asset under management movement

ASSET ALLOCATION OF MUTUAL FUNDS

The below diagram shows how much Equity has contributed to the Mutual
Funds

Equity

others

Graph-4 equity contributed to mutual funds

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TOP SECTOR HOLDING & PERCENTAGE ALLOCATION

Sector Name Percentage allocation

Financial Services 20.08 %

Pharma 13.28 %

Consumer Goods 11.02 %

Industrial Manufacturing 9.85 %

Construction 8.74 %

Table-5 top sector holding percentage allocation

MARKET CAPITALIZATION

large cap 26.81

46.24
mid cap 22.8

small cap

0 10 20 30 40 50

Graph-5 market capitalization

From the above table you can see that market capitalization of midcap fund is
46.24% more as compared to Large cap 26.81% and small cap 22.80%.

HDFC MUTUAL FUND NAV

The mutual fund NAV denotes a price at which units of a mutual fund can be
bought or sold.
The market value of a fund’s holdings, less expenses is the net asset value.
Per unit NAV is calculated by dividing the net asset value of the mutual fund
schemes by the number of units outstanding on the valuation date.

22
The below NAV calculation shows the returns of HDFC Mutual Funds with the
help of the graph HFDC Small & Midcap Fund Growth

PERFORMANCE ANALYSIS OF HDFC MUTUAL FUND

Table-6 fund performance

FUND PERFORMANCE AS PER DIFFERENT YEARS

FUND YTD(% 2017(% 2016(% 2015(% 2014(% 2013(%

PERFORMANCE ) ) ) ) ) )
HDFC Small and
mid cap fund-
growth 12.32 5.78 51.64 6.46 31.57 -26.21

S&P BSE 200 11.54 -1.62 35.39 3.45 30.98 -26.95

Category
Average 3.3 52.78 3.56 32.72 -23.83

Table-7 fund performance as per different year

All returns are compounded annualized for a period greater than 1 year, and
absolute for a period of 1 year or less. Performance and SIP returns as of
21/09/2017. Statistical ratios are for a period of 3-year as of 21/09/2017. SIP
purchases are assumed to be on the 1st of every month. Expense ratio is as
disclosed at monthly frequency.

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1.14 SBI MUTUAL FUND
The SBI mutual fund Private Ltd is a joint venture between “The state bank of
India” and Societe Generale Asset management (France).The fund manages
over Rs 42,100 crore of assets and has a diverse profile of Investors actively
parking their investments across 38 active schemes.
At SBI Mutual Fund we know that every investor has unique financial goals
and requires a different sets of products. Which is why we have a wide range
of schemes that fulfills every kind of Investors requirements. Each scheme is
managed by devising a different strategy which is reflective of the investors
profile and carries with different risks and rewards.
Vision: - “To be the most preferred and the largest fund house for all asset
classes, with a consistent track record of excellent returns and best standards
in customer service, product innovation, technology and HR practices.”
SBI Funds Management has emerged as one of the largest player in India
advising various financial institutions, pension funds, and local and
international asset management companies.
SBI Funds makes one of the largest investment management firms in India,
managing investment mandates of over 5.4 million investors.

EQUITY FUNDS & SCHEMES

The Primary objective of the equity asset class is to provide capital growth /
appreciation by Investing in the equity & equity related instrument companies
over medium and long term. There are range of Schemes available which fulfill
Every Kind of Investors Requirements. Each Scheme Provides different
strategy which is reflective of the investors profile and carries with it different
risks and rewards.

 Equity Schemes
 Debt/Income Schemes
 Liquid Scheme.
 Hybrid Schemes.
 Fixed Maturity Plans
 Exchange Traded Schemes

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 CHAPTER-2
COMPANY PROFILE

25
2.COMPANY PROFILE

2.1 COMPANY OVERVIEW

The KARVY group was formed in 1983 at Hyderabad, India. Karvy ranks
among the top player in almost all the field it operates. Karvy Computers
shares Ltd is India’s largest Register and Transfer Agent with a client base of
nearly 500 blue chips corporate managing over 2 core accounts. Karvy stock
brokers Ltd, member of National stock Exchange of India. With over 6,00,000
active accounts, it ranks among the top 5 Depository Participated in India,
registered with NSDL and CDSL karvy COM trade, Member of NCDEX and
MCX ranks among the top0 3 commodity brokers in the country. Karvy
Insurance Brokers is registered as a Broker with IRDA and ranks among the
top 5 insurance agent in the country. Registered with AMFI as a corporate
Agent Karvy is also among the top Mutual fund mobilize with over Rs. 5,000
cores under management. Karvy Realty Services, which started in 2006, has
quick established itself as broker who adds value, in the realty sector. Karvy
global offers niche off shoring services to client in the US.

Karvy has 575 offices over 375 locations across India overseas at Dubai and
New York. Over 9,000 high qualified people staff Karvy.

Karvy – Early Days:-

Karvy the name comes from the names of the directors:

K – Mr. Krishna Prasad

A- Mr. Arun

R- Mr. Radha Krishna

V- Mr. Venkat Krishna

Y- Mr. Yogendar

The birth last of Karvy was on a modest scale in 1979. It began with the vision
and enterprise of a small group of practicing Chartered Accounts who

26
founded the flagship company. Karvy started with consulting and financial
accounting and carved inroads into the field of registry and share accounting
by 1985. Since then, Karvy have utilized its experiences and superlative
enterprise to go from.

Strength to Strength,To better its services, to provide new ones, to innovative,

diversity and the process, evolved karvy as one of India’s premise integrated
financial services enterprise.

2.2 GROWTH AND DEVELOPMENT OF KARVY

Over the last 20 years Karvy has traveled the success route, towards building
a reputation as an integrated financial services provider, offering a wide
spectrum of services. And they have made the journey by taking the route of
quality service. Path breaking innovation in service, versatility in service and
finally totality in service.

Their highly qualified manpower, cutting-edge technology, comprehensive

infrastructure and total customer- focus has secured for us the position of an
emerging financial services giant enjoying the confidence and support of an
enviable clientele across diverse fields in the financial world.

With the experience of years of holistic financial behind us and years of

complete expertise in the industry to look forward to, they have now emerged
as a premier integrated financial services provider. And today, they can look
with pride at the fruits of their mastery and experience Comprehensive
financial services that are competently segregated to service and manage a
diverse range of customer requirements.

AT PRESENT STATUS OF KARVY

Present Karvy is a member of National stock Exchange (NSE), the Bombay

stock Exchange (BSE), and The Hyderabad stock Exchange (HSE).Market
analysis and market predictions are done by professional management team.

27
KARVY as covering the spectrum of financial services such as stock Broking
Services, Advisory Services, Stock broking ,Depository Participants,
Distribution of financial products – mutual funds, fixed deposits, equities,
Insurance Broking Commodities Broking, Personal Finance Advisory
Services, Merchant Banking and corporate Finance, Placement Finance,
Placement of equity, IPO’s, among other.

VISION OF KARVY

To achieve and sustain market leadership, Karvy shall aim for complete
customer satisfaction, by combining its human and technological resources to
provide world class quality services. In the process Karvy shall strive to meet
and exceed customer’s satisfaction and set industry standards.Their values
and vision of attaining total competence in their servicing has served as the
building block for creating a great financial enterprise, which stands solid on
their fortresses of financial strength – their various companies.

MISSION OF KARVY

“Our mission is to be a leading and preferred services provider to our

customers, and we aim to achieve this leadership by building an innovative,
enterprising, and technology driven organization which will highest standards
of services and business ethics.”

MILE STONES OF KARVY

Graph-6 milestones of karvy

28
SERVICES PROFILE OF THE KARVY GROUP COMPANIES

Member – National Stock Exchange (NSE), the Bombay Stock Exchange

(BSE), and the Hyderabad Stock Exchange (HSE),

Karvy Stock Broking Limited, one of the cornerstones of the Kavry edifice,
flows freely toward attaining diverse goals of the customer through varied
services, creating a plethora of opportunities for the customer by opening up
investment vistas backed by research-based advisory services. Here, growth
knows no limits and success recognizes no boundaries. Helping the customer
create waves in his portfolio and empowering the investor completely is the
ultimate goal. Why should Investors choose for KARVY …?

Excellence is next to nothing and here at Karvy everybody tries to offer

excellence services to its client through its offerings maintaining the Karvy
culture which included:-

 Controlled and low cost services culture:- Karvy is there to serve its
client at the minimum possible costs.
 Longer volume processing capability:- Being the largest financial
service provider in the country. It has the unique distinction of operating
its activities on a large scale which benefits all the parties cordially.
 Adherence to strict time Schedule:- Karvy knows that time is money
and tries it best to finish the task within the stipulated time schedule.
 Expertise in coordinating Multi-location Responses:- Karvy has got
a wide network and hence I can find its branches at most of the places
in India. Thus it enjoys its presence everywhere and co-ordinates
among itself in solving the quarries and in responding to any situation.
 Expertise in managing independent entities such as Banks, Post-
offices, etc:- The work culture of Karvy and the ethics followed inside
Karvy Makes its workforce with everybody. So the Karvy person
establishes good coordination with independent entities too.
 Pooling of Group Resources:- Karvy group consists of 8 subsidiaries.
So it can easily pool up its resource for accomplishment of its goals,
whenever needed. The group can help each other whenever there are

29
 peaks and lows and even in the case when they have huge targets just
as we saw few years’ bank, Tata group pooling its resources to acquire
Corus.

2.3 STOCK BROKING SERVICES

It is an undisputed fact that the stock market is unpredictable and yet enjoys a
high success rate as a wealth management and wealth accumulation option.
The difference between unpredictability and safety anchor in the market is
provided by in –depth knowledge of market functioning and changing trends,
planning with foresight and choosing options with care. This is what they
provide in their Stock Broking services.

They offer services that are beyond just a medium for buying and selling
stocks and shares. Instead they provide services which are multi-dimensional
and multi-focused in their scope. There are several advantages in utilizing
their stock Broking services, which are the reasons why it is one of the best in
the country.

They offer trading on a vast platform; National Stock Exchange. Bombay

Stock Exchange and Hyderabad stock Exchange .More importantly, they
make trading safe to the maximum possible extent, by accounting for several
risk and planning accordingly. They are assisted in this takes by their in-depth
research, constant feedback and sound advisory facilities. Their highly skilled
research team, comprising of technical analysts as well as fundamental
specialists, secure result-oriented information on market trends, market
analysis and market predictions.

This crucial information is given as a constant feedback to their customers,

through daily reports delivered thrice daily; The Pre-session Report, where
market scenario for the day is predicted, The Mid- session Report, timed to
arrive during lunch break, where the market forecast for the rest of the day is
given and the post-session Report, the final report for the day, where the
market and report itself is reviewed. To add to this repository of information,
they publish a monthly magazine.

30
“The Fin polis” which analysed the latest stock market treads and takes a
close look at the various investment options, and products available in the
market, while a weekly report, called “Karvy Bazaar Baatein”, keeps clients
more informed on the immediate trends in the stock market. In addition, their
specific industry reports give comprehensive information on various
industries. Besides this, they also offer special portfolio analysis packages
that provide daily technical advice on scraps for successful portfolio
management and provide customized advisory services to help you make the
right financial moves that are specifically suited to their portfolio.

Stock Broking services are widely networked across India, with the number of
trading terminals providing retail stock broking facilities. Its services have
increasingly offered customer oriented convenience, which they provide to a
spectrum of investors. High net worth or otherwise, with equal dedication and
competence. But true to their spirit, this success is not their final destination,
but just a platform to launch further enhanced quality services to provide you
the latest in convenient, customer-friendly stock management.

Over the years Karvy have ensured that the trust of customers is their biggest
returns. Factors such as their success in the Electronic custody business has
helped build on their tradition of trust even more. Consequentially their retail
client base expanded very fast.

To empower the investor further they have made serious efforts to ensure that
their research calls are disseminated systematically to all their stock broking
clients through various delivery channels like email, chat, SMS, phone calls
etc.

Their foray into commodities broking has been path breaking and they are in
the process of converting existing traders in commodities into the more
organized mainstream of trading in commodity futures, both as a trading and
risk hedging mechanism.

In the future, their focus will be emerging businesses and to meet this
objective, they have enhanced their manpower and revitalized their

31
knowledge base with enhances focus on Futures and Options as well as
commodities business.

DEPOSITORY PARTICIPANTS

The onset of the technology revolution in financial service Industry saw the
emergence of Karvy as an electronic custodian registered with National
Securities Depository Ltd (NSDL) and central Securities Depository Ltd
(CSDL) in 1998.Karvy set standards enabling further comfort to the investor
by promoting paperless trading across the country and emerged as the to 3
Depository Participants in the country in terms of customer serviced. Offering
a wide trading platform with a dual membership at both NSDL and CDSL,
they are a powerful medium for trading and settlement of dematerialized
shares. They have established live DPMs, Internet access to accounts and an
easies transaction process in order to offer more convenience to individual
and corporate investors. A team of process in order to offer more
convenience to individual and corporate investors. A team of professional and
the latest technological enhancements like SPEED-e make their response
time quick and their delivery impeccable, A wide national network makes their
efficiencies accessible to all.

ADVISIORY SERVICES

Under their retail brand ‘Karvy –the fin polis’, they deliver advisory services to
a cross- section of customers. The service is backed by a team of dedicated
and expert professionals with varied experience and background in handling
investment portfolios. They are continually engaged in designing the right
investment portfolio for each customer according to individual needs and
budget considerations with a comprehensive support system that focuses on
trading customers’ portfolios and providing valuable inputs,monitoring and
managing the portfolio through varied technological initiative. This is made
possible by the expertise they have gained in the business over the years.
Another venture towards being investor friendly is the circulation of a monthly
magazine called ‘Karvy –the Finpolis’. Covering the latest of market news,
trends, investment schemes and research-bases opinions from experts in
various financial fields.

32
MUTUAL FUNDS SERVICES

Karvy has attained a position of immense strength as a provider of across the

board transfer agency services to AMCs, Distributors and Investors. Nearly
40% of the top AMCs including prestigious client like Deustsche AMC and UTI
swear by the quality and range of services that karvy offers. Beside providing
the entire bank office processing. Karvy provides the link between various
Mutual Funds and the investors including services to the distributor, the prime
channel in this operation. Carrying the limitless ideology forward. Karvy has
explored new dimensions in every aspect of Mutual Fund Servicing right from
volume management, cost effective pricing, and delivery in the least
turnaround time, efficient back office and front office operations to customize
services. Karvy has explored new dimensions in every aspect of Mutual fund
servicing right from volume management, cost effective pricing, and delivery
in the least turnaround time, efficient back office and front office operations to
customize services. Karvy has been with the AMCs every step of the way,
helping them serve their investors better by offering them a diverse and
customized range of services.

The first to market approach that is Karvy’s Service enhancements such as

Karvy Covers, a full-fledged call centre, top-line website
(www.Karvymfs.com), the investors and many more, creating a of galaxy of
customer advantages.

2.4 KARVY CONSULTANCY LIMITED

As the flagship company of the Karvy Consultants limited has always

remained at the helm of organizational affairs, pioneering business policies,
work ethic and channels of progress. Having emerged as a leader in the
registry business, the first of the businesses that they ventured into, they have
now transferred this business into a joint venture with Computer share Limited
of Australia, The world’s largest registrar. With the advent of depositories in
the Indian capital marked and the relationships they have created in the
registry business, they believe they were best positioned to venture into this
activity as a Depository Participant. They were one of the early entrants
registered as Depository in the country and then with CDST (Central

33
Depository Services Limited). Today, they service over 6 lakhs customer
accounts in this business spread across over 250 cities/towns in India and are
ranked amongst the largest Depository Participants in the country. With a
growing secondary market presence, they have transferred this business to
karvy stock Broking Limited (KSBL),their associate and a member of NSE,
BSE and HSE.

2.5 KARVY INVESTOR SERVICE LIMITED

Merchant Banking

Recognized as a leading merchant banker in the country, they are registered

with SEBI as a category I merchant banker. This reputation was built by
capitalizing on opportunities, which have earned us the reputation of a
merchant banker. Raising theories for corporate or Government Undertaking
successfully over the past two decades have given us the confidence to
renew their focus in this sector.

Their quality professional team and their work-oriented dedication have

propelled us to offer value-added corporate financial services and act as a
professional navigator for long term growth of their clients, who include
leading corporate, State Governments, foreign institutional investors, public
and sector companies and banks, in Indian and global markets.

They have also emerged as a trailblazer in the arena of relationships, both at

the customer and trade levels because of their unshakable integrity, seamless
service and innovative solutions that are tuned to meet varied needs. Their
team of committed industry specialists, having extensive experience in capital
markets, further nurtures this relationship.

Their financial advice and assistance in restructuring, divestitures,

acquisitions, de-mergers, spin-offs, joint ventures, privatization and takeover
defense mechanisms have elevated their relationship their relationship with
the client to one based on unshakable trust and confidence.

34
2.6 KARVY GIOBAL SERVIVES LIMITED

The specialist Business Process of the Karvy Group. The legacy of

experience in financial services of the Karvy Group Serves us well as they
enter the global arena with the confidence of being able to deliver well. Here
they offer several delivery models on the understanding that business needs
are unique and therefore only a customized service could possibly fit the bill.
Their service matrix has permutations and combinations that create several
options to choose from. Be it in re-engineering and managing processes or
delivering new efficiencies, their service meets up to the most stringent of
international standards. Their outsourcing models are designed for the global
customer and are backed by sound corporate and operations philosophies,
and domain expertise. Providing productivity improvements operational cost
control, cost savings, improved accountability and a whole gamut of other
advantages.

They operate in the core market segments that have emerging requirements
for specialized services. Their wide vertical market coverage includes
Banking, Financial and Insurance Services (BFIS), Retail and Merchandising,
Leisure and Entertainment, Energy and Utility and Healthcare.

2.7 KARVY INSURANCE BROKING PRIVATE LIMITED

At Karvy Insurance Broking Pvt. Ltd., they provide both life and non-life
insurance products to retail individuals, high net –worth clients and corporate.
With the opening up of the insurance sector and with a large number of
private players in the business, they are in a position to provide tailor made
policies for different segments of customers. Itheir journey to emerge as a
personal finance advisor, they will be better positioned to leverage their
relationships with the product providers and place the requirements of their
customers appropriately with the product providers. With Indian markets
seeing a sea change, bout in terms of investment pattern and attitude of
investors, insurance is no more seen as only a tax saving product but also as
an investment product By setting up a separate entity, they would be

35
positioned to provide the best of the products available in this business to
their customers. Their wide national network, spanning the length and breadth
of India, further supports these advantages. Further, personalized service is
provided here by a dedicated team committed in giving hassle- free service to
the clients.

2.8 KARVY COMMODITIES BROKING PRIVATE LIMITED

Commodities market, contrary to the belief of many people, has been in

existence in India through the ages. However the recent attempt by the
Government to permit Multi-commodity National levels exchanges has indeed
given it, a shot in the arm. As a result two exchanges Multi Commodity
Exchange (MCX) and National Commodity and derivatives Exchange
(NCDEX) have come into being. These exchanges, by virtue of their high
profile promoters and stakeholders, bundle in themselves, online trading
facilities, robust surveillance measures and a hassle-free settlement system.
The future contracts available on a wide spectrum of commodities like Gold,
Silver, Cotton, Steel, Soya beans, Wheat, Sugar, Channa etc., provide
excellent opportunities for hedging the risks of the farmers, importers,
exporters, trades and large scale consumers, they also make open an avenue
for quality investments in precious metals. The commodities market, as it is
not affected by the movement of the stock market or debt market provides
tremendous opportunities for better diversification of risk.Realizing this fact,
event mutual funds are contemplating of entering into this market.

Karvy COM trade Limited is another venture of the prestigious Karvy group.
With their well established presence in the multifarious facets of the modern
financial services industry from stock broking to registry services, it is indeed
a pleasure for us to make foray into the commodities derivatives market which
opens yet another door for us to deliver their service to their beloved
customers and investor public at large. With the high quality infrastructure
already in place and a committed Government providing continuous impetus,
it is the responsibility of us, the intermediaries to deliver these benefits at the
door-steps of their esteemed customers.

36
With their expertise in financial services, existence across the lengths and
breadths of the country and an enviable technological edge, they are all set to
bring to you, the pleasure of investing in this burgeoning market, which can
touch upon the lives of a vast majority of the population from the farmer to the
corporate alike. They are confident that the commodity futures can be a good
value addition to their portfolio. The company provides investment, advisory
and brokerage services in Indian commodities Markets. And most importantly,
they offer a wide reach through their branch network of over 255 branches
located across 180 cities.

2.9 KARVY COMPUTERSHARE PRIVATE LIMITED

KARVY have traversed wide spaces to tie up with the world’s largest transfer
agent, the leading Australian company, Computershare Limited. The
Company that services more than 75 million shareholders across 7000
corporate clients and makes its presence felt in over 12 countries across 5
continents has entered into a 50-50 joint venture with us. With its
management team completely transferred to this new entity, they will aim to
enrich the financial services industry than before. The future holds new
arenas of client servicing and contemporary and relevant technologies as the
are geared to deliver better value and foster bigger investments in the
business. The worldwide network of Computershare will hold us in good as
they expect to adopt international standards in addition to leveraging the of
best of technologies from around the world. Excellence has to be the order of
the day when two companies with such similar ideologies of growth, vision
and competence, get together.

ISSUE REGISTRY

Karvy towards becoming the largest transaction-processing house in the

Indian Corporate segment, they have mobilized fund for numerous corporate
sector. With an experience of handling over 700 issues, Karvy today, has the
ability to execute Voluminous transactions and hard-core expertise in
technology applications have gained us the No.1 slot in the business. Karvy is
the first Registry Company to receive ISO 9002 certification in India that
stands testimony to its stature.

37
Karvy has the backing of skilled human esthetic complemented by requisite
technological packages to ensure a faster processing capability. Karvy has
the benefit of a good synergy between depositories and registry that enables
faster resolution to related customer queries. Apart from its unique investor
servicing presence in all the phases of related customer queries. Apart from
its unique investor servicing presence in all the phases of a public Issue, it is
actively coordinating with both the main depositories to develop special model
to enable the customer to access depository (NSDL, CDSL) Services during
an IPO. Their trust-worthy reputation, competent manpower and high-end
technology and infrastructure are the solid foundations on which their success
is built.

38
 CHAPTER-3

RESEARCH METHODOLOGY

39
RESEARCH METHODOLOGY

 Problem Defining: - In a competitive market there are multiple mutual

funds working in the Indian market. It is necessary to know mutual fund
as the performance of the mutual fund decides the future of Mutual
Fund Company. In my study I have compared returns of 5 years of the
two mutual funds that is HDFC Mutual funds & SBI Mutual funds.

 Types of Research: - This research is qualitative and analytical in

nature. Qualitative research talks about the quality of the research work
& analytical research is concerned with determining validity of
hypothesis based on analysis of facts collected.

 Data Collection Sources of Data

 Primary Data: - I have used questionnaire as primary source for

collecting data for my study.
 Secondary Data:- I have collected secondary data from various mutual
funds books , from various mutual fund websites.
 Sampling: - It represents the whole population. It is a process of
choosing samples from whole populations. I have chosen some people
who have invested in Mutual funds.
 Sampling Size: - It represents how many candidates you have chosen
to fill up your questionnaire. I had chosen sample of 50 candidates.
 Sampling Technique: - Questionnaire sampling is something that is
sent to the candidates who want to invest in mutual funds. By
Questionnaire you can understand peoples taste & preferences so it is
easy to convince.
 Data Interpretation: - Data Interpretation is that in which we analyses
the whole collected data & try to give it in simple words that is
understandable.

40
LITERATURE REVIEW
Name of the Book: - Mutual Funds in India
Author: - D. V. Ingle
ISBN no – 9788177083323
Publishing year: - 2013
Abstract - This book provides an in-depth account of the functioning of mutual
fund industry in India. The Author D.V. Ingle has described everything about
Mutual Funds in India and why it is useful for small investors who cannot
directly invest in stock market. Also when the Mutual funds were created. This
Book describes the journey of Mutual Funds in India.

 Name of the Research Paper:-Comparative study of mutual funds of

select Indian Companies

Author: - Mr. Sunil M. Adhav / Dr Pratap M Chauhan

ISSN NO: - 2394-1537
Publishing year: - 2015

Abstract: - India’s mutual fund market has witnessed phenomenal growth

over the last decade. The consistency in the performance of mutual funds has
been a major factor that has attracted many investors. The present research
is an attempt to study comparative performance of mutual funds of selected
Indian companies. The study focus on mutual fund schemes of selected
Indian companies comprising Equity, Debt and Hybrid Schemes. The 390
schemes comprising of 178 equity mutual funds, 138 debt schemes and 74
hybrid schemes are selected for the study. The performance of selected
Indian companies’ mutual fund is analysed with the help of Return, risk.
Selected Mutual Fund are compared with their respective

Name of the Research Paper:-A Study of Mutual Funds in India

Author: - MS Shalini Goyal / MS Dauli Bansal
ISSN NO: - 2229 – 5518
Publishing year: - 2013

41
Abstract: - This paper helps us to understand the study of the mutual funds in
India. This paper also says where and how we should invest mutual fund 7
why it dangerous to directly invest in stock market as you might have to face
loss. Investing in mutual funds helps you to diversify your risk .This study was
conducted to analyse and compare different types of mutual funds in India.
 Name of the Research Paper:- Investor’s preferences towards
Mutual Fund and Future

Investments:

Author: - Y Prabhavathi, N T Krishna Kishore

ISSN NO: - 2250-3153
Publishing year: - 2013

Abstract: - The advent of Mutual Funds changed the way the world invested
their money. The start of Mutual Funds gave an opportunity to the common
man to hope of high returns from their investments when compared to other
traditional sources of investment. The main focus of the study is to understand
the attitude, awareness and preferences of mutual fund investors. Most of the
respondents prefer systematic investment plans and got their source of
information primarily from banks and financial advisors. Investors preferred
mutual funds mainly for professional fund management and better returns and
assessed funds mainly through Net Asset Values and past performance.

 Name of the Research Paper: - A Study on Indian Mutual Funds

Equity Diversified growth Schemes and their performance
evaluation.

Author: - Dr. D.S.Chaubey

ISSN NO: - 2249-1719
Publishing year: - 2011

42
Abstract: - Indian Mutual Fund industry has experienced tremendous growth
due to infrastructure and also supported by high saving of funds. After
liberalization and globalization of Indian economy, market witness huge crowd
towards the option of investing in mutual funds but investment in a particular
funds needs a lot of specification like-investor’s objectives, cost, availability of
funds, risk & return factors etc. and thus invite fundamental study for better
future and growth. This paper aims to know how the performance of mutual
funds is assessed and ranked after analyzing the NAV and their respective
returns so as to measure investment avenues.

 Name of the Research paper: - Investor awareness and Perception

about mutual Funds.

Author: - Simran Saini / DR Bimal Anjum

ISSN NO: - 2231 5780
Publishing Year: - 2011

Abstract: - Indian Mutual Fund has gained popularity in last few years. The
present study analyses the mutual fund investments in relation to investor’s
behaviour. Investors’ opinion and perception has been studied relating to
various issues like type of mutual fund scheme, main objective behind
investing in mutual fund scheme, role of financial advisors and brokers,
investors’ opinion relating to factors that attract them to invest in mutual funds,
sources of information, deficiencies in the services provided by the mutual
fund managers, challenges before the Indian mutual fund industry.

43
 CHAPTER-4

DATA ANALYSIS

44
DATA ANALYSIS

 Educational Qualification

Graph-7 education qualification

This Graph shows 90% the Educational Qualification of the Investor have
completed graduation.

 Occupation

Graph-8 occupation

This Graph shows 85% of the occupation of the investors are working in
private sector whereas 10% of investors are working in government sectors.

45
  What is your Monthly family income approximately?

Graph-9 family monthly income

This graph shows 42.1% of monthly income of investors is above 30000 &
above whereas 26.3% of the investors have monthly income of 20001 to
30000 & 15001 to 20000.

 What Kind of Investment you prefer the most?

Graph-10 choice of investment

This graph shows 42.1% Investors prefer to deposit their money in provident
fund whereas 21.1% deposit their money in fixed deposit and 15.8% of them
invest their money in saving account

46
  While investing your Money, which factor you prefer most?

Graph-11 risk factor

This graph shows 42.1% of Investors look for low risk whereas 31.6% of
investors look for high return and 21.1% of the Investors look for Liquidity.
 Have you ever Invested Money in Mutual Fund?

Graph-12 invested money in mutual fund

This graph shows 57.9% of investors who are investing have said yes
whereas 42.1% of them have said no.
 Where do find you as Mutual Fund Investor?

This graph shows the 47.1 % of Investors who have a partial knowledge about
mutual fund. Whereas 23.5% of the investor are totally ignorant or aware of
only specific schemes.

47
  In Which kind of Mutual Fund you would like to Invest?

Graph-14 mutual fund invest

This graph shows the 52.9% of Investors who would like to invest in public
companies whereas 47.1% of the investor would like to invest in private
companies.

 How did you come to know about Mutual fund?

Graph-15 knowing of mutual fund

This graph shows us the 55.6% of Investors who come to know about
mutual funds through peer group whereas 2202% of the investor come
to know from advertisement & financial adviser

48
  What Future of the Mutual Funds allures you most?

Graph-16 future of mutual funds

This graph shows the 44.4% of investors who invest in mutual funds so that
their risk get diversified whereas 33..3% of the investor look for better returns
and safety and 17.7% of the investor look for regular income.

 Which Mutual Fund scheme have you used?

Graph-17 mutual fund scheme

This graph shows the 33.3 % of Investors want to Invest in Growth funds &
sector funds while only 20% want to invest in small & midcap funds.

49
  In which Mutual Fund have you invested?

Graph-18 mutual fund invested

This graph shows the 35.7 % of Investors want to invest in ICICI prudential
funds whereas only 28.6% of the investor want to invest in HDFC Mutual
Fund

 When you invest in Mutual Funds which mode of investment, will you
prefer?

Graph-19 mode of investment in mutual fund

This shows the percentage of investors who are willing to Invest in

Systematic Investment Plan (SIP) that is 85.7% than one type of investment.

50
 CHAPTER-5
FINDINGS AND SUGGESTIONS

51
FINDINGS & SUGGESTION

SUGGESTION TO THE MUTUAL FUND INVESTORS

 Understand the purpose of investment: The first point to analyze

before investing in a fund is to find out whether objective matches with
the scheme. If there is a mismatch in the scheme the investors would
be affected with the probable returns. For example the schemes that
invest in large cap stocks is not suitable for conservative Investors. He
should first try to invest in small & midcap funds. Similarly he should
pick up schemes that will specify his investment. Examples pension
plans, Children’s plan sector specific schemes. These are the schemes
from where he can invest for the future.
 Low Risk Tolerance: - The Investors with low risk tolerance should
invest in small & midcap schemes as they are relatively safer when
compared to schemes like equity. Aggressive investors can go for
equity investments and can opt for schemes that invest in specific
industry or sector
 Track record:-. Investors should go through schemes track record,
performance against relevant market benchmarks and its competitors.
 Period of Investment: - To get good returns on their Investments the
investor should hold their returns for longer periods that is for 3 years
to 5 years in order the schemes to generate good returns.
 Cost Factors:-Though the AMC is regulated, one should look at the
expense ratio of the fund before investing. This is because money is
deducted from the returns. A higher entry load or exit load will eat into
the returns. So you have to look at the cost factors before investing.
 Points to be considered while departing from the scheme: Investor
should sell or redeem or repurchase the proceeds within 10 days of
redemption or repurchase. Most funds charge exit load when the
period of exit is less than 6 months. You should sell your funds when
one fund is taken over by other fund. You may also Exit when your
expenses on your scheme has increased.

52
 Diversification: - The most the amount the Investors invest, the
greater is the ability to afford diversification amount different asset
classes and investment styles. Asset allocation is the way in which one
gives weightage to each asset classes. Each Asset class has its own
characteristic in terms of fluctuation.
 Continuous Monitoring: - Investors should continuously monitor their
portfolio and revise by updating according to market position, that their
returns can be maximized.

 Other factors to be considered while investing - Investors should

look for top performing assets and focus on funds latest performance.
A common mistake nowadays investors do is they buy latest schemes
which has no pervious history as they give good returns. One should
look at the NAV while buying the funds so that good NAV can give you
good returns.
 Starting small for Small time investor: - First time mutual fund
investors are advised to go small on their investments. Investors
should invest in small & midcap companies and wait for the returns and
once they are satisfied they should go for diversification of the funds.
 Taxing Saving Funds: - When markets are up it is advisable to invest
in tax saver, which are giving good returns compared too many other
schemes.

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CHAPTER-6
CONCLUSION

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CONCLUSION
Mutual Fund Industry now represents perhaps most appropriate opportunity
for most Investors. The financial market is most sophisticated and complex.
Investors need required knowledge to invest in the mutual fund industry.
Mutual fund industry also gives good returns if the markets are high and you
can also suffer losses if the market does not do well or while investing fund
manager makes some mistakes during investment of Mutual Funds.
Mutual Fund Returns are compared based on performance of the stock
market. If the stock market do well than the fund in which you have invested
will also do well. As the markets are diversified, the loss is minimal.
In my above research I had compared SBI mutual fund & HDFC Mutual fund. I
had compared 5 years returns which Both the Mutual Funds have given good
returns after a specified period. Since Inception SBI mutual fund has given
good returns of 20 % where as HDFC mutual fund has given a return of only
14 %.
But still Investors prefer to invest their money in Private mutual funds in the
long run as they feel that they would get good returns.
But looking at both the Mutual Funds three year ratio SBI Mutual Fund has
given a good return of 42 % where as HDFC has given a return of 25%.

“So as per my suggestion it is best for Investor to invest in SBI mutual

fund as it has given good returns”.

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BIBLOGRAPHY

WEBSITES:-

 www,sbimf.com

 www.hdfcmf.com

 www.amfiindia.com

 www.mutualfundsindia.com

 www.research gate.com

 Books on Mutual Funds in India (D. V. Ingle)

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