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A STUDY ON HDFC MUTUAL FUND

IN

HDFC ASSETS MANAGEMENT COMPANY LTD

IN PARTIAL FULFILLMENT OF THE AWARD OF THE

MASTER OF BUSINESS ADMINISTRATION AT

S.V.UNIVERSITY TIRUPATI

Submitted by

Under the valuable guidance of

SALN COLLEGE OF ENGINEERING AND MANAGEMENT

SF-316,CHITTOOR-VELLORE HIGHWAY, PALLURU,CHITTOOR.

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DECLARATION

I, Badami Kalpesh D. a student of MBA semester iii, here by declare thatthe project

work presented in this report is my contribution and has been carried out under

supervision of DIRECTOR DR.R.S.SHAH of GIDC RAJJU SHROFF

INSTITUTE OF MANAGEMENT STUDIES.

The objective of the training undertaken is to get specialized knowledge in the

specialized field, which further sharpen the skill and add practicality in the

specialization. This work has not been previously submitted to any other university

for any other examination

DATE: - SIGNATURE (student)

BADAMI KALPESH D.

PLACE: - SIGNATURE (guide)

DR.R.S.SHAH

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PREFACE

Experience is the best teacher. This saying is very well applicable in everyones

life. Therefore as a student of management it must apply to me also. Then the

question arises that from where we can get this experience. Obviously we must

undergo practical Training. To serve this purpose I had undergone two months

summer training at HDFC assets Management Company limited and as an outcome I

have prepared this project report.

This project report on mutual fund awareness in retail investors of HDFC assetsManagement Company in Surat is as per syllabus prescribed by Veer Narmad south

Gujarat University for MBA students. This project also deals with various activities of

HDFC assets Management Company limited. The experience of this training will be

useful in my future and findings of this particular project will be Helpful to take

decision regarding to marketing and advertising of mutual fund schemes To HDFC

assets Management Company limited.

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ACKNOWLEDGEMENT

First of all, I would like to express my sincere gratitude to Mr. Rajan Mehta, Branch

manager of HDFC assets Management Company limited, Surat branch for allowing

me for summer training at HDFC assets Management Company limited.

I heartily feel thanks to Mr. Piyush lal, sales executive who provided me valuable

suggestions and guidance at every stage of my summer training.

I would also like to express my gratitude to Mr. R.s.shah, my project mentor and other

faculty members of GIDC RAJJU SHROFF ROFEL INSTITUTE OF

MANAGEMENT STUDIES, vapi for guide me.

I would like to thank following persons who help me a lot in my summer training.

Mr. Gaurav maheshwari, HDFC assets Management Company limited

Mr. Pinkal shah, HDFC assets Management Company limited.

Mr. Chintan patel, HDFC assets Management Company limited.

Mr. Ritesh jariwala, HDFC assets Management Company limited.

Mr. Utkrash gheewala, HDFC bank, Parle point branch

Mr. Nilesh patel, HDFC bank, Parle point branch.

Mr. Mitesh sampat, HDFC bank, Parle point branch.

I also thank to respondents, who have been helpful and faithful enough to give the

required information, which helped my project to be a great success, which was the

main and important part of my project. I feel happy indeed and it has given me a lot of

pleasure in company.

Last but not the least I would like to extent my deep sense of gratitude to my family,

friends and all whom guided and helped me during my training period.

Place: - Surat. Badami Kalpesh. B.

Date: - 9thAugust 2007

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EXECUTIVESUMMARY

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Executive Summary

The entire report is an unforgettable journey of support, knowledge, experience,

dedication, perfection, and patience. For me it is all about to understand a customer

and market of mutual fund industry.

The report is specially oriented to particular area, though it is representing the strong

base of Investment management-which covers different investment avenues, their

handling contribution, strategy, portfolios, and related risk factors. Mutual funds- how

they are formed, history, scenario, types, trends, myths, distribution, advantages, and

even disadvantages of them.

Tips to effectively sell the mutual funds, to be effective agent, some dos and donts

about mutual funds while investing. Company details and its progress and its

interpretation base for analysis, conclusion, findings, and questionnaire, which helped

a lot in consumer, survey analysis. Asset allocation, accounting, taxation, valuation

and necessary information for generating base for conclusion. And at last but not the

least the collected data from city and their interpretation.

In short all efforts which was made to make this report explains

WORK IS WORSHIP

CONTENTS

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Sr. No. Name of Table Page No.

1 Objectives of Study 5

2 Limitations of study 6

3 Executive summary 8

4 Company details 11

About the Company 12

Sponsors of HDFC Assets Management

Company13

Management of HDFC Assets Management

Company 14

Offices of HDFC assets management company

limited17

5 Product details 24

6 Future scenario 32

7 Industry details 33

Introduction 34

History of Mutual Fund Industry 36

Customers Profile of mutual fund industry 40

Positioning Strategy of mutual fund industry41

Promotional Tools Employed by various mutual

fund companies42

Facts About Mutual Fund 45

8 Mutual fund 46

Introduction to Mutual Fund 47

Mutual Fund Cycle 49

Critical view about Mutual Fund

50

Why Investor Needs Mutual Fund 54

Mutual Fund Risk 55

9 Types of Mutual Fund 58

10 Structure of Mutual Fund 60

11 Other various assets management companies details 64

12 Regulatory Aspects 67

13 Research 71

Purpose of the Research 72

Research Objective 73

14 Research Methodology 74

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Research Design 75

Sources of Data 76

Sampling Plan 78

Data Collection Method 80

15 Data analysis and findings 81

16 Findings 9217 Limitations 95

18 Conclusions 97

19 Recommendations 100

20 Annexure 103

21 Glossary 105

22 List of Table 107

23 List of Graphs 108

24 Bibliography 109

COMPANY

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DETAILS

About the Company: -

An HDFC asset Management Company limited is well-established fund house. HDFC

Assets Management Company limited is sponsored by Housing Development Finance

Corporation Limited (HDFC) and Standard life investments limited.

HDFC assets Management Company limited launched its scheme HDFC EQUITYFUND in the year January 1995. Since then it focused on different class of schemes

for many years and launched several innovative products that went to become

bourgeoning categories in the Indian mutual fund industry.

Some of these were HDFC GROWTH FUND, HDFC TOP 200 FUND, and HDFC

BALANCED FUND, HDFC PRUDENCE FUND etc.

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HDFC assets Management Company limited have offices in 29 cities and currently

manage assets in excess of Rs 36146.67 cores. (May 2007.)

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 for the

purchase or construction of residential housing. It also provides property related

services (e.g. property identification, sales services and valuation), training andconsultancy. Of these activities, housing finance remains the dominant activity.

HDFC has a client base of around 9.5 lack borrowers, around 1 million 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 Bank, IFC (Washington),

USAID, DEG, ADB and KfW, international syndicated loans, domestic term loans

from banks and insurance companies, bonds and deposits. HDFC has received the

highest rating for its bonds and deposits program for the twelfth 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 and 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 life

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 and

Standard Life plc float on the London Stock Exchange. At a Special General Meeting

held in May voting members overwhelmingly voted in favor of this. The Court of

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Session in Scotland approved this in June and Standard Life plc floated on the 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

subsidiary of Standard Life plc. Standard Life Investments is a leading asset

management company, with approximately US$ 269 billion as at March 30, 2007, of

assets 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

investment view. In order to meet the different needs and risk profiles of its clients,

Standard 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

instruments.

Management of HDFC Assets Management Company:-

HDFC Trustee Company Limited:

A company incorporated under the Companies Act, 1956 is the Trustee to the Mutual

Fund vides the Trust deed dated June 8, 2000, as amended from time to time. HDFC

Trustee Company Limited is a wholly owned subsidiary of HDFC Limited.

HDFC Asset Management Company Limited:

HDFC assets Management Company limited was incorporated under the Companies

Act, 1956, on December 10, 1999, and were approved to act as an Asset Management

Company for the Mutual Fund by SEBI on July 3, 2000. The registered office of the

HDFC assets Management Company limited is situated at Ramon House, 3rd Floor,

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H.T. Parekh Marg, 169, Backbay Reclamation, Church gate, Mumbai - 400 020. In

terms of the Investment Management Agreement, the Trustee has appointed HDFC

Asset Management Company Limited to manage the Mutual Fund. The paid up

capital of the HDFC assets Management Company limited is Rs.75.161 crore.

The present share holding pattern of the HDFC Assets management company is as

follows:

Particulars% of the paid up share

capital

HDFC 50.10

Standard Life Investments

Limited49.90

The HDFC Assets management company is managing 18 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 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 Saver (HTS), HDFC Prudence Fund (HPF), HDFC High Interest

Fund (HHIF), HDFC Sovereign Gilt Fund (HSGF) and HDFC Cash Management

Fund (HCMF). HDFC assets Management Company limited is also managing the

respective Plans of HDFC Fixed Investment Plan, a closed ended Income Scheme.

The HDFC Assets management company has obtained registration from SEBI vide

Registration No. - PM / INP000000506 dated December 22, 2000 to act as a Portfolio

Manager under the SEBI (Portfolio Managers) Regulations, 1993.

The HDFC Assets management company is also providing portfolio management /

advisory services and such activities are not in conflict with the activities of the

Mutual Fund

HDFC assets Management Companys punch line is continuing atradition of trust.

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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 according to investors requirement.

HDFC assets Management Company Provide good services to investors.

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Offices of HDFC ASSETS MANAGEMENT

COMPANY LIMITED

INVESTOR SERVICE CENTRES/

OFFICIAL POINTS OF ACCEPTANCE FOR HDFC MUTUAL

FUND

REGISTERED

OFFICE

HDFC Mutual Fund - Mumbai *

Ramon House, 3rd Floor,

H.T Parekh Marg, 169,

Backbay Reclamation, Church gate

Mumbai 400020.

Andhra Pradesh

HDFC Mutual Fund - Hyderabad

6-3-883/7, 2nd Floor,Saphire Square, Somajiguda,

Hyderabad - 500282.

Email:[email protected]

HDFC Mutual Fund - Visakhapatnam

Ground Floor, Saigopal Arcade,

Opp Waltair Club,

Waltair Main Road, Siripuram,

Visakhapatnam - 530003.


Bihar HDFC Mutual Fund - Patna

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Rani Plaza Apartment,

(Patna X-Ray Clinic),

Exhibition Road,

Patna - 800001.


New Delhi

HDFC Mutual Fund - New Delhi

4th Floor, Mohan Dev Bldg., 13,

Tolstoy Marg, Connaught Place,

New Delhi - 110001.


Goa

HDFC Mutual Fund - Goa

A3, First Floor, Krishna Building,Opp. Education Dept,

Behind Susheela Building, G.P. Road,

Panaji - 403001.


Gujarat HDFC Mutual Fund - Ahmadabad

2nd Floor, Megha House,

Besides Gruh House,

Mithakhali Six Roads,

Ahmedabad - 380009.


HDFC Mutual Fund - Rajkot

2nd Floor, Shiv Darshan,

Dr Radha Krishnan Road,

5, Jagnath Plot Corner,

Rajkot - 360001.


HDFC Mutual Fund - Surat

U1 - U3, Jolly Plaza,

Opp Athwa Gate Police Station,

Athwa Gate,

Surat - 395001.

Email:[email protected] Mutual Fund - Vadodara

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Upper Ground Floor, Gokulesh,

R C Dutt Road,

Vadodara - 390007.


Jharkhand

HDFC Mutual Fund Jamshedpur

Gayatri Enclave,

2nd Floor, "K Road",

Bistupur,

Jamshedpur - 831001.


Karnataka

HDFC Mutual Fund Bangalore

No.114, 1st Floor, Prestige Towers,99 and 100, Residency Road,

Bangalore - 560025.


HDFC Mutual Fund Mangalore

UG -II, 6 and 7, Upper Ground Floor,

Maximus Commercial Complex,

Light House Hill Road, Opp. KMC,

Mangalore - 575001.


Kerala

HDFC Mutual Fund Kochi

Ground Floor,

Cinema Cum Commercial Complex,

Behind Ravipuram Bus Stop,

M.G. Road,

Kochi - 682016.


Madhya

Pradesh

HDFC Mutual Fund Bhopal

Ranjit Towers,

Zone II, 8 MP Nagar,

Bhopal - 462011.


HDFC Mutual Fund Indore

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M1, M2 and M3, Mezzanine Floor,

Sterling Arcade,15 / 3, Race Course Road,

Indore - 452001.


Maharashtra

HDFC Mutual Fund Mumbai

Mistry Bhavan, 1st Flr, 122,

Backbay Reclamation,

Dinsha Vachha Road, Churchgate,

Mumbai - 400020.


HDFC Mutual Fund Nagpur

106-110, Shriram Shyam Towers,2nd Floor, Next to NIT Building,

Kingsway, Sadar,

Nagpur - 440001.


HDFC Mutual Fund Nashik

G- 1 and G-2, "Suyojit Heights",

Opp. Rajiv Gandhi Bhavan,

Sharanpur Road,

Nashik - 422002.


HDFC Mutual Fund Pune

HDFC House, 2nd Floor,

Shivaji Nagar, University Road,

Pune - 411005.


Orissa

HDFC Mutual Fund Bhubaneswar

2nd Floor, Vinayak 96,

Janpath,

Bhubaneshwar - 751001.


Punjab HDFC Mutual Fund Chandigarh

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SCO 375-376,

Ground Floor, Sector 35-B,

Chandigarh - 160022.


HDFC Mutual Fund Ludhiana

SCO 122,

Feroze Gandhi Market,

Ludhiana - 141001.


Rajasthan

HDFC Mutual Fund Jaipur

Moondhra Bhavan,

3 Ajmer Rd,Jaipur - 302001.


HDFC Mutual Fund Jodhpur

Gulab Singh Building,

11, Chopasani Road,

Jodhpur - 342003.


Tamil Nadu

HDFC Mutual Fund Coimbatore

1371A, Ground Floor,

Nadar Building Trichy Road,

Coimbatore - 641018.


HDFC Mutual Fund Chennai

ITC Centre, 1st Floor,

760 Anna Salai,

Chennai - 600002.


Uttar Pradesh HDFC Mutual Fund Kanpur

1st Floor, 16/80 D,

Behind SBI Main, Civil Lines,

Kanpur - 208001.


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HDFC Mutual Fund Lucknow

4 Shahnajaf Road,

Lucknow - 226001.


West Bengal

HDFC Mutual Fund Kolkata

Menaka Estate, 1st Floor,

3 Red Cross Place,

Kolkata - 700001.


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(Fig no 1- office locations of HDFC Assets Management Company)

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Product Details

EQUITY BALANCED DEBT

(Fig no 2 - Different Types of Products)

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 and 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 is to

generate long term capital appreciation from a portfolio that is invested

predominantly in equity and equity related instruments.

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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 companies

in BSE 200 index.


4. HDFC mid cape opportunity fund;- Investment Objective: - To generate long-term capital appreciation from a

portfolio that is substantially constituted of equity and equity related securities of

small and Mid-Cap companies.


Nature of Scheme:- Open Ended Growth Scheme

Inception Date:- May 07, 2007

5. HDFC capital builder fund:-

Investment Objective: - To generate long-term capital appreciation from a

portfolio that is substantially constituted of equity and equity related securities of

small and Mid-Cap companies.



Inception Date:- February 01, 1994

6. HDFC core and satellite fund:-

Investment Objective: - The primary objective of the Scheme is to generate

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:-

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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: - Investment Objective: - The primary objective of the Scheme is to generate

capital appreciation along with current income from a combined portfolio of

equity 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 provide

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/ minimize

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 Plan is

to generate regular income through investment in debt securities and money

market instruments.

Investment Options: Growth Plan, Dividend Plan. The Dividend Plan offers


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Nature of Scheme:- Open Ended income fund

Inception Date: - February 28, 2002

4. HDFC multi yield fund:-


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 optimize 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 Fund is to generate income by investing in a

range of debt and money market instruments of various

maturity dates with a view to maximizing income while

maintaining the optimum balance of yield, safety and liquidity.


Nature of Scheme: - Open Ended Income Scheme

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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 Instruments. The secondary objective

of the Scheme is to generate long-term capital appreciation by

investing a portion of the Schemes assets in equity and equity

related 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 Facility

Nature of Scheme: - An open-ended income scheme. Monthly

income is not assured 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 regular returns through investment primarily in

Debt and Money Market Instruments. The secondary objective

of the Scheme is to generate long-term capital appreciation by

investing a portion of the Schemes assets in equity and equity

related instruments. However, there can be no assurance that

the investment objective of the Scheme will be achieved

Investment Options: Growth Plan, Quarterly Dividend

Option, Monthly Dividend Option. The Dividend Plan offers


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Nature of Scheme: - An open-ended income scheme. Monthly

income is not assured and is subject to availability of

distributable surplus

Inception Date: - December 26, 2003

5. HDFC Floating Rate Income Fund Long Term Plan:-


regular income through investment in a portfolio comprising substantially of

floating rate debt / money market instruments, fixed rate debt / money market

instruments swapped for floating rate returns, and fixed rate debt securities

and money market instruments.

Investment Options: Dividend Plan, Growth Plan. The Dividend Plan

offers Reinvestment Facility only

Nature of Scheme: - An open-ended income scheme.

Inception Date: - January 16, 2003

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FUTURE

SCENARIO

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FUTURE SCENARIO

The asset base will continue to grow at an annual rate of about 35 to 40%

over the next five year as investors shift their assets from banks and other

traditional avenues. Some of the older public and private sector players

will either close shop or be taken over.

Out of ten public players five will sell out, close down or merge with

stronger player in three to four years. In the private sector this trend has

already 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

market will witness a flurry of new players entering the areas. There

will be a large no. of offers from various asset management companies

in the time to come, some 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 presence 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 reflected in its

Net Asset Value (NAV).

SEBI is working out the norms for enabling the existing mutual fund schemes

to trade in derivatives. Importantly, many market players have called on the

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Regular to initiate the process immediately, so that the mutual funds can

implement the changes that are required to trade in Derivatives.

INDUSTRY

DETAILS

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Introduction

A Mutual Fund is a trust that pools the savings of a number of investors who

share a common financial goal. The money thus collected is invested by the fund

manager in different types of securities depending upon the objective of the scheme.

These could range from shares to debentures to money market instruments. The

income earned through these investments and the capital appreciations realized by the

scheme are 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 portfolio at a

relatively low cost.

Anybody with an investible surplus of as little as a few thousand rupees can

invest in Mutual Funds. Each Mutual Fund scheme has a defined investment objective

and strategy.

A Mutual Fund is the ideal investment vehicle for todays complex and

modern financial scenario. Markets for equity shares, bonds and other fixed income

instruments, real estate, derivatives and other assets have become mature and

information driven. Price changes in these assets are driven by global events

occurring in faraway places. A typical individual is unlikely to have the knowledge,

skills, inclination and time to keep track of events, understand their implications and

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act speedily. An individual also finds it difficult to keep track of ownership of his

assets, investments, brokerage dues and bank transactions etc.

A Mutual Fund is the answer to all these situations. It appoints professionally

qualified and experienced staff that manages each of these functions on a full time

basis. The large pool of money collected in the fund allows it to hire such staff at a

very low cost to each investor.

In effect, the Mutual Fund vehicle exploits economies of scale in all three areas -

research, investments and transaction processing. While the concept of individuals

coming together to invest money collectively is not new, the mutual fund in present

form is a 20th century phenomenon. In fact, mutual funds gained popularity only after

the Second World War. Globally, there are thousands of firms offering tens of

thousands of mutual funds with different investment objectives. Today, Mutual Funds

collectively manage almost as much as or more money as compared to banks.

History of Mutual Fund Industry

The mutual fund industry in India started in 1963 with the formation of Unit Trust of

India, at the initiative of the Government of India and Reserve Bank of India. The

history of mutual funds in India can be broadly divided into four distinct phases

First phase 1964-87(Monopoly of UTI)

An Act of Parliament established Unit Trust of India (UTI) on 1963. 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

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Scheme 1964. At the end of 1988 UTI had Rs.6, 700 crores of assets under

management.

Second Phase 1987-93

(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 Canbank Mutual Fund (Dec 87), Punjab

National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank ofIndia (Jun 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.47,

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 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 in 1996. The industry now

functions under the SEBI (Mutual Fund) Regulations 1996.

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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. As at the end of January 2003, there were 33 mutual funds

with total assets of Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44, 541

crores of assets under management was way ahead of other mutual funds.

Forth Phase

Since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963UTI 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 growth. As at the end of October 31, 2003, there

were 31 funds, which manage assets of Rs.126726 crores under 386 schemes.

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The graph indicates the growth of assets over the

years.

(Fig no 3. Growth of Asset Over The year)

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Customers Profile of mutual fund industry:-

(Fig no 4.Type of Customer)

1. While you recommend a financial plan, you also need to understand the

needs and financial objectives of your customer along with his risk tolerance

and his expectations from the investments.

2. Honest and straightforward advice is appreciated. Help your customers make

the right choice

3. Advise your customers to start investing early and regularly to help them

optimize the benefits of the compounding rupee.

4. Help your investors with the procedures and paper work involved in making

an investment.

Treat every customer exclusively. A satisfied customer can give you increased

business through resale and referrals of other prospective customers

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Positioning Strategy of mutual fund industry:-

Positioning starts with a product. But positioning is not what you do to a product.

Positioning is what you do to the mind of the prospect. That is, you position the

product in the mind of prospect. A companys differentiating and positioning 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 Companys distribution channel played very important

roles.

Here assets management companies have distributors like

Consultants

Agents

Distributors

Advisers

Broker

Their role is very important for Assets Management Companys Office.

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Promotional Tools Employed by various mutual fund

companies:-

Some specific other document help to increase selling product like: -

(1) Banners: -

Banners define brief idea of scheme, it should be very attractive with specific

objective and its related picture in city, and Banners keep in specific places which

very help to do good publicity. It distributes only by AMCs 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 and easy cover to

customer or people.

(2) 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

stamp done in form, one of them is acknowledged slip. These forms are distributed by

Assets Management Companys office. It is all Assets Management Companys office

duty to dispatch forms to their customer like agents, brokers, and advisers time to

time.

(3) Broachers:

Broachers include brief history of company. It defines when and where assets

management Company invests investors money. This defines performance of each

scheme product and also defines its comparison to last 3 months to more than 5 years.

In end of every month Assets Management Companys office send Boucher to their

investors, brokers, agents, advisers regularly.

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NET ASSET VALUE:-

The Net Asset Value or NAV is a term used to describe the value of an entity's

assets less the value of its liabilities. The term is commonly used in relation to

collective investment schemes. It may also be used as a synonym for the book value

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 would

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

funds assets are higher than the historical financial statements used in the NAV

calculation.

CALCULATING NET ASSET VALUE

Unit capital is the investors 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 assets accrued

expenses other payables other liabilities)/ (no. Of units outstanding 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 portfolio

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4. Other assets and liabilities

5. Number of units sold or purchased

Facts About Mutual Fund

Equity Instruments like shares form only a part of the securities held by

Mutual Funds. Mutual Funds also invest in debt securities, which are

relatively 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 and

get good returns.

The size of Mutual Funds market in India is Rs. 107728 crores and that in

U.S.A is many times higher.

According to the SEBI - NCAER Survey of Indian Investors about 15 million

or 8.7% of the households have invested in Mutual Funds and there are nearly

23 million unit holders in India.

30% of investors fall in the income group of investors having monthly income

up to Rs. 10,000/-.

In U.S.A there are more deposits in the mutual funds than in bank deposits.

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The truth is, as investors we should always pay attention to our mutual funds

and continue to monitor them.

Objectives of Study

Without any aim or objective, no activity can exist, in the same direction of

preparation of this report on HDFC assets Management Company limited. In different

functional areas and research on the mutual fund awareness in retail investors of

HDFC assets Management Company limited in Surat is based on the following

objectives: -

1. My primary objective is to acquire primary functions of management like

Planning, Organizing, Directing and controlling from various functional areas

such as Finance, Human Resource, Marketing, and Sales etc.

2. Whatever we are taught in the classrooms, there is a limitation that book can

only give theoretical concept or knowledge and it has a limited view of

practically. So, the other important objective of this training is to know about

practical aspect and to know how a company actually works in practical

situation.

3. To know the mutual fund awareness level of the retail investors who are invest

in HDFC assets Management Company limited.

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Limitations of Study

There is no activity without any limitations.

1. Though every one used to be very co-operative but every detail was unable to

be disclosed to me as the officials has to maintain secrets of the company.

2. It is difficult to cover all the function of the company.

3. The analysis and conclusion made by me as per my limited understanding and

there may be something variation in the actual situation.

4. Because of the limited time period, the survey work was conducted in the

Surat region and the sample size was taken as 100 respondents only.

5. In this rapidly changing turbulent era the suggestions and recommendations

drawn out today might prove inadequate or improper tomorrow; this is likely

to limit its effectiveness.

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REVIEW OF

LITERATURE

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MUTUAL FUND

Introduction to Mutual Fund

A Mutual Fund is a trust that pools the savings of a number of investors who

share a common financial goal. The money thus collected is invested by the fund

manager in different types of securities depending upon the objective of the scheme.

These could range from shares to debentures to money market instruments. The

income earned in these investments and the capital appreciation realized by the

scheme 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 portfolio at a

relatively low cost. Anybody with an invest able surplus of a few thousand rupees can

invest in Mutual Funds. Each Mutual Fund scheme has a defined investment objective

and strategy.

A mutual fund is the ideal investment vehicle for todays complex and modern

financial scenario. Markets for equity shares, bonds and other fixed income

instruments, real estate, derivatives and other assets have become mature and

information driven. Price changes in these assets are driven by global events

occurring in faraway places. A typical individual is unlikely to have the knowledge,

skills, inclination and time to keep track of events, understand their implications and

act speedily.

A mutual fund is answer to all these situations. It appoints professionally

qualified and experienced staff that manages each of these functions on a fulltime

basis. 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 processing.

A draft offer document is to be prepared at the time of launching the fund.

Typically, it pre specifies the investment objective of the fund, the risk associated, the

cost involved in the process and the broad rules for entry into and exit from the fund

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and other areas of operation. In India, as 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 granting 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

Management Company also, in which it holds a majority stake. In many cases a

sponsor can hold a 100% stake in the Asset Management Company (AMC).

E.g. Birla Global Finance is the sponsor of the Birla Sun Life Asset

Management Company Ltd., which 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 and how the guarantee would be honored is required to be disclosed in theoffer document.

Mutual Fund Cycle

(Fig no 5.-Mutual Fund Cycle)

From the above cycle, it can be observed that how the money from the investors flowand they get returns out of it. With a small amount of fund, investors pool their money

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with the funds managers. Taking into consideration the market strategy 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 investors. 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 investment

decision.

Critical view about Mutual Fund

Benefits

If mutual funds are emerging as favorite investment vehicle, it is because of the many

advantages they have over other forms and avenues of investing, particularly for the

investors who has limited resources available in terms of capital and ability to carry

out details research and market monitoring. The following are the major advantages

offered by mutual funds to all investors.

PROFESSIONAL EXPERTISE

Fund managers are professionals who track the market on an on going basis. With

their mix of professional qualification and market knowledge, they are better placed

than the average investor to understand the markets.

DIVERSIFICATION

Since a mutual fund scheme invests in number of stocks and/or debentures, the

associated risks are greatly reduced.

RELATIVELY LESS EXPENSIVE

When compared to direct investments in the capital market, mutual funds cost less.

This is due to savings in brokerage costs, demat costs, depository costs etc.

LIQUIDITY

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Investments in mutual funds are completely liquid and can be redeemed at Net Assets

Value (NAV) related price on any working day.

TRANSPARENCY

You will always have access to up-to-date information on the value of your

investment in addition to the complete portfolio of investments, the proportion

allocated to different assets and the fund managers investment strategy.

FLEXIBILITY

Through features such as regular investment plans, regular withdrawal plans and

dividend investment plans, you can systematically invest or withdraw funds according

to your needs and convenience.

SEBI REGULATED

All mutual funds are registered with SEBI and function within the provisions and

regulations that protect the interests of investors.

While most investment options provide most of these features, only

Mutual Funds provide all of these options.

Limitations

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 return for

the professional management and research. Fees are payable even in declining 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

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Investors who invest on there own can build their own portfolios of shares and bonds

and other securities. Investing through funds means he delegates 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 objectives. However, most mutual fund

managers help investors overcome this constraint by offering families of funds- a

large number of different schemes within 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 objectives,

quite similar to the situation when he has to select individual shares or bonds to invest

in.

ENTRY AND EXIT COST

Mutual funds are a victim of their own success. When a large body like a fund invests

in shares, the concentrated buying and selling often results in adverse price movement

i.e. at the time of buying, the fund ends up paying a high price 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. There 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 Acquisitions. The

weight age of the shares of a particular company in the index changes if it acquires a

large company not a part of the index.

Why Investor Needs Mutual Fund

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Mutual funds offer benefits, which are too significant to miss out. Any investment has

to be judged on the yardstick of return, liquidity and safety. Convenience 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 goals and

investors cannot be nearer to both at the same time. The crux of mutual fund investing

is averaging the risk.

Many investors possibly dont know that considering returns alone, many mutual

funds have outperformed a host of other investment products. Mutual funds have

historically delivered yields averaging between 9% to 25% over a medium to long

time 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 funds.

Liquid funds of course, generate returns even in a short term.

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 versa. 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 rising as interest rates.

Similarly, a sector stock fund is at risk that its price will decline due to developments

in its industry. A stock fund that invests across many industries is more 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 problems

(rising inflation, government default), or natural disasters will weaken a countrys

economy and cause investments in that country to decline.

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Income Risk

The possibility that a fixed-income funds dividends will decline as a result of falling

overall interest rates.

Market Risk

The possibility that stock fund or bond fund prices overall will decline over short or

even extended periods. Stock and bond markets tend to move in cycles, with periods

when prices rise and other periods when prices fall.

Risk Return Reward in Mutual Fund

Liquid Fun

Short Ter

Fund

Income Fun

MIP

Balance Fun

Equity Fun

(Fig no 6: - Risk Return in Mutual Fund)

This graph shows risk and return impact on various mutual funds. There is a direct

relationship between risks and return, i.e. schemes with higher risk also have potential

to provide higher returns.

Types of Mutual Fund

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There are a wide variety of Mutual Fund schemes that cater to your needs, whatever

your age, financial position, risk tolerance and return expectation. Whether as the

foundation of your investment program or as a supplement, Mutual Fund schemes can

help you meet your financial goals. The different types of Mutual Funds are as

follows:

Diversified Equity Mutual Fund Scheme

A mutual fund scheme that achieves the benefits of diversification by investing in the

stocks of companies across a large number of sectors. As a result, it minimizes the

risk of exposure to a single company or sector.

Sectoral Equity Mutual Fund Scheme

A mutual fund scheme, which focuses on investments in the equity of companies

across a limited number of sectors usually one to three.

Index Funds

These funds invest in the stocks of companies, which comprise major indices such as

the BSE Sensex or the SandP CNX Nifty in the same weight age as the respective

indices.

Tax Saving Equity Schemes

Schemes investing predominantly in equity which offer tax rebates to investors under

specific provisions of the Income Tax Act, 1961 as the Government offers tax

incentives for investment in specified avenues. E.g. Equity Linked Savings Schemes

(ELSS). Currently rebate u/s 88 can be availed unto a maximum investment of Rs

10,000. A Lock-in of 3 years is mandatory.

Monthly Income Plan Scheme

A mutual fund scheme which aims at providing regular income (not necessarily

monthly, don't get misled by the name) to the unit holder, usually by way of dividend,

with investments predominantly in debt securities (up to 95%) of corporate and the

government, to ensure regularity of returns, and having a smaller component of equity

investments (5% to 15%) to ensure higher return.

Income schemes

Debt oriented schemes investing in fixed income securities such as bonds, corporate

debentures, Government securities and money market instruments.

Floating-Rate Debt Fund

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A fund comprising of bonds for which the interest rate is adjusted periodically

according to a predator-mined formula, usually linked to an index.

Gilt Funds

These funds invest exclusively in government securities.

Balanced Funds

The aim of balanced funds is to provide both growth and regular income as such

schemes invest both in equities and fixed income securities in the proportion indicated

in their offer documents. They generally invest 40-60% in equity and debt

instruments.

Structure of Mutual Fund

(Fig no 7 - Structure of Mutual Fund)

Fund Sponsor

Any person or corporate body that establishes the Fund with a net worth of Rs. 10

crores and has paid out consistent returns to its investors for last three years

consistently and registers it with SEBI can be a fund sponsor. The fund sponsor forms

a trust and appoints board of trustees. He appoints Custodian and Asset Management

Company (AMC) either directly or through trust in accordance with SEBI regulations.

SEBI regulations also define that a sponsor must contribute at least 40 % to the networth of the asset management company.

AMC

Unitholders

Savings

Units

Trust

Investments

Trust

AMCCustodian

Registrar

SEBI

Returns

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Trustees

Trust is created through the document called Trust deed that is executed by the fund

sponsor and registered with SEBI. Board of trustees- a body of individuals or a trust

company-a corporate body may manage the trust cum Mutual Fund. These are

protector of unit holders interests.2/3 of the trustees will be individuals and will not be

associated with the sponsors.

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RESEARCH

METHODOLODY

RESEARCH

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Purpose of the Research

With liberalization, privatization and globalization there has been a major change in

the Indian Mutual Funds Industry. The momentum is on and one is sure to see similar

hectic activity at the offices of the new entrants especially after the 90s as private

sector gained entry in the Indian markets.

With the private sector penetration, a large number of schemes have also been

introduced 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 survey

was undertaken.

De facto, to ensure what the consumer thinks and what it thinks the best we

undertook a consumer survey, to get a clear picture of the future of the Mutual Funds

companies who are busy wooing the customers, with their lucrative schemes, to

survive the rat race and emerge as no.1 in this field.

Research Objective

Research Objectives addresses the purpose of the investigation. It is here that you

layout exactly what is being planned by the proposed research. The Research

Objectives flows naturally from the problem statement, giving the sponsor specific,

concrete, and achievable goals. It is best to list the objectives either in order of

importance or in general terms first, moving to specific terms. Research Objective isthe basis for judging the Research process. It is the final step giving exact definition

of problem.

Analyzing mutual fund awareness in retail investors of HDFC

assets Management Company in Surat.

Research methodology is a systematic plan or schedule or program of the research

done. It describes all the procedures of the research.

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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 together provide a

master plan for completing a research project. Research design is proved 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 provide 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 research

design.

Objective of research

Data inputs

Analysis of data collected

The research design was exploratory type and the focus was on getting mutual

funds employees views for various products, expectations from market.

Exploratory Research:

Exploratory study goes beyond description and attempts to explain the reasons for the

phenomenon that the descriptive study only observed. The researcher uses theories or

at least hypotheses to account for the forces that caused a certain phenomenon to

occur.

Sources of Data

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The gathering of data may range from a simple observation at one location to a

grandiose survey of multinational corporations at sites in different parts of the world.

The method selected will largely determine how the data are collected. DATA is the

facts presented to the researcher from the studys environment. Characteristics 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 on the

requirement in the research appropriate data is collected. Both the kinds of data are

shown below in the figure:

Error: Reference source not found

1) Primary data source

Primary data are collected and gathered for the first time. Primary data are sought for

their proximity to the truth and controls over error. Advantages of primary data are:

Researchers can collect precisely the information they want.

They usually can specify the operational definitions used and can eliminate, or

at least monitor and record the extraneous influences on the data as they are

gathered.

2) Secondary data source

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Someone else collects secondary data. So, it becomes secondary information for the

research. Secondary data have had least one level of interpretation inserted between

the event and its recording. 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 important

for achieving Research Objective. Primary data is collected with the help of

interviews.

Sampling Plan

Collecting the required information from the right source is very important. Sourcesfrom which the data are collected differ as per the required of researcher.

Basically there are two types of data collection sources:

1) Sampling Unit:

The sampling unit primarily consisted of investors like businessman, professionals,

salaried employees and others. The sample unit is taken from the Surat city of Gujarat

region.

2) Sample Size:

Though large sample give more reliable results than small samples but increases the

cost, time and non-sampling error. Keeping in view these constraints 100 respondents

were chosen. Attempts have been made to see that samples are chosen from different

areas of Surat.

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I have taken 100 responds as a sample size for this particular project . The following

table shows area wise distribution of sample size.

AREA SAMPLE

UDHNA 17MORABHAGAL 3

ADAJAN 15

RANDER ROAD 17

RALWAY STATION

ROAD 5

PARLE POINT 5

GHODDOD ROAD 8

PIPLOD 2

MAJURAGATE 2

RING ROAD 4BHAGAL 4

KATARGAM 4

VARACHA 2

CITY LIGHT ROAD 6

NANPURA 2

PANDESARA 1

VED ROAD 1

PAL 1

BHESTAN 1

TOTAL 100

Data Collection Method

This step involves making a very specific plan about how you will conduct

your research and collect your data.

1) Surveys and Questionnaires

Survey The means by which quantitative research is conducted.

Questionnaire A prepared set of questions designed to generate data

necessary for accomplishing the objectives of the research project.

I used survey method for data collection. Information was collected by

personal interviews through questionnaire.

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Following types of measurement scales were used in the questionnaire.

Simple category scale: - (Q-2, Q-4, Q-8, Q-9)

Multiple choice single response scales: - (Q-6)

Multiple choice multiple response scale:-(Q-1, Q-3, Q-5, Q-7)

DATA ANALYSIS

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FINDINGS

Q-1 which investment avenues are you aware of?

INVESTMENT AVANUES FREQUENCY PERCENTAGE(%)

EQUITY/MUTUAL FUND 100 34.36

POST OFFICE 94 32.30

F.D. 86 29.55

OTHERS 11 3.79

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100

94

86

11

EQUITY/M.F.

POST OFFICE

F.D.

OTHERS

(Fig no 9: - Define investments avenues)

Interpretation: -

From the above charts we can interpret that awareness of equity/mutual fund, post

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

assets Management Company needs to focus more on those investors who are more

invest in KVP, NSC, PPF and fixed deposits.

Q-2 do you invests in mutual fund?

YES NO

97 3

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3

97

0

20

40

60

80

100

120

YES NO

PREFERNC

NOO

FPEOPLE

Series1

(Fig no 10: - Define investments in mutual fund)

From the above chart it is getting clear that now a days people are like to invest their

money in mutual fund of different assets management company, out of 100 people

sampled 97 are investing in the mutual fund.

Q-3 If yes, in which assets class do you want to invest in

Mutual Fund?

TYPES OF SCHEMES RESPONSE PERCENTAGE

EQUITY 86 72.27%

DEBT 27 22.69%

LIQUID 6 5.04%

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R E S P O N

8 6

2 7

6

0

2 0

4 0

6 0

8 0

1 0 0

E Q U ITY D E B T L IQ U ID

SCHEME

NOO

FPEOPLE

R E S P O N S

(Fig no 11: - Define schemes preferred by investors)

From the above chart it is getting clear that from 100 peoples sample 86(72.27%)

people are invest in equity assets class and 27(22.69%) people choose to invests in

debt class but only just 6(5.04%) peoples choose to invests in liquid class.

Q-4 Do you invest in HDFC assets management company

Limited?

YES NO TOTAL

56 44 100

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56

44

0

10

20

30

40

50

60

YES NO

PREFERNCE

NOO

F

PEOPLE

Series1

(Fig no 12: - Define investment in HDFC assets Management Company)

From the above chart it is getting clear that out of 100 people sampled, 56

peoples are invest in HDFC assets management company and 44 peoples

are not invests in HDFC assets management company.

Q-5 If yes, in which scheme would you invest in HDFC assets

Management company limited?

SCHEMES OF HDFC

NO OF

INVESTOERS

EQUITY FUND 43

CAPITAL BUILDER FUND 2

PRUDENCE FUND 17

TAX SAVER FUND 35

CORE AND SATELITE FUND 3

TOP 200 FUND 16

BALANCED FUND 1

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GROWTH FUND 16

OTHERS FUND 5

NO OF INVESTOERS

43

2

1735

3

161 16

5

EQUITY FUND CAPITAL BUILDER FUND

PRUDENCE FUND TAXSAVER FUND

CORE AND SATELITE FUND TOP 200 FUND

BALANCED FUND GROWTH FUND

OTHERS FUND

(Fig no 13: - Define scheme in which investors invest in HDFC assetsManagement Company)

From the above chart we can see that in HDFC assets Management Companys

EQUITY FUND maximum number (43) of people are invest. In TAX SAVER FUND

35 number of people invests. In both TOP 200 FUND and GROWTH FUND 16

numbers of people are invests but in BALANCED FUND, CAPITAL BUILDER

FUND, CORE AND SATELITE FUND only 1,2 and 3 people are invest so investors

are not invested in these 3 schemes. In PRUDENCE FUND 17 numbers of people are

invested.

Q-6 By which medium you invest in HDFC assets


MEDIUM OF INVESTMENT NO OF PEOPLE

DISTRIBUTOR 8

BANK 48

ONLINE 0

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8

48

0

0

5

10

15

20

25

30

35

40

45

50

DISTRIBUTOR ONLINE

MEDIUMS

NOOF PEOPLE

NOOF PEOPLE

(Fig no 14: - Define mediums choose by investors for invest in HDFC

assets management company)

From the above chart its getting cleared that most of the peoples (48) are invest by

bank and only 8 peoples are invest by distributors. Nobody invests through online. So

here HDFC assets Management Company has to provide facility by which investors

invest their money with out any middle man in mutual fund schemes through online.

Notes: - here out of 100 responds, 44 responds are not invest in HDFC assets

Management Company. These responds are not considered in these questions.

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Q-7 why do you prefer investing in HDFC assets


PREFENCE CRITERIA NUMBER

BETTER FUND HOUSE 43

EXCELLENT CUSTOMER SERVICE

PROVIDER 15

CONSISTANT RETURN 44

OTHERS 1

NUMBER

43

15

44

1

BETTER FUND

HOUSE

EXCELLENT

CUSTOMER

SERVICE

PROVIDER

CONSISTANT

RETURN

(Fig no 15: - Define Preference criteria of investors)

From the above pie - chart it can be seen that majority of the people that is 44 peoples

give first rank to consistent return and 43 peoples invest in HDFC assets management

company because HDFC assets management company is a better fund house and 15

peoples believes that HDFC assets Management Company provides EXCELLENT

CUSTOMER SERVICE.

Q-8 In which type of product /schemes would you prefer while

Invested in equity schemes of HDFC assets management

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Company limited?

TYPES OF SCHEMES RESPONSE

OPEN ENDED 53

CLOSE ENDED 3

RESPONSE

53

3

0

10

20

30

40

50

60

OPEN ENDED CLOSE ENDED

TYPES OF SCHEMES

NOO

F

PEOPLE

RESPONSE

(Fig no 16: - Define type of product /schemes investors prefer for

investments)

From the above chart it is getting clear that most of peoples (53) prefer to invest in

OPEN ENDED equity schemes and only just 3 peoples want to invest in CLOSEENDED equity schemes of HDFC assets Management Company.

Notes: - here out of 100 responds, 44 responds are not invest in HDFC assets

Management Company. These responds are not considered in these questions.

Q-9 do you know about on going new fund offer of HDFC

Assets Management company limited?

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AWARENESS OF NFO NUMBER PERCENTAGE

YES 58 58%

NO 42 42%

TOTAL 100 100%

NUMBER

58

42

YES

NO

(Fig no 17: - Define awareness level about on going NFO of HDFC assets

Management Company.)

The above pie - chart shows that around 58% people aware of on going new fund

offer of HDFC assets Management Company and only 42% people are unaware from

on going new fund offer of HDFC assets management company.

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FINDINGS

FINDINGS

Almost 56% are investing in HDFC assets management companys schemes.

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Out of the total respondent almost 30% said that they invest in fixed deposit

and Insurance. Where as 34% said that they invest in Shares and mutual funds,

where as 32% says that they invest in post office schemes.

97% of the investor was found who is invested their savings in different

schemes of mutual fund.

53 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 97% in Surat city of

Gujarat.

Out of the total respondent 72.27% are investing in equity schemes. Where as

remaining 22.69% prefer debt and 5.04% prefer to invest in liquid schemes.

HDFC assets Management Company are also highly popular for their

consistent return and 43 responds believes that HDFC assets Management

Company is better fund house. While only just 15 responds believes that

HDFC assets Management Company provides EXCELLENT CUSTOMER

SERVICE.

Out of the total respondents almost 48 responds are investing through bank,

only 8 responds investing their money by distributor and nobody invested by

online.

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The 58% of the respondent were aware about the ongoing NFO of HDFC

assets management company and 42% were not aware about the ongoing NFO

of HDFC assets management company.

In HDFC assets Management Companys EQUITY FUND maximum number

(43) of people are invested and In TAX SAVER FUND 35 number of people

are invests.

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LIMITATIONS

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LIMITATIONS OF RESEARCH

This exploratory research is done focusing on the investment scenario of Surat

city of Gujarat region only and therefore findings and suggestions given on the

basis of this research and cannot be considered for the entire Mutual Fund

Industry of India.

Some of the people, out of various sectors that I had visited for study, did not

give me cooperative response.

Due to small market and time limit I could take only 100 responses.

Another limitation is that due to lack of knowledge and education many

investors dont know the basic ideas behind mutual fund.

Due to Time constraint I could not analyze more.

My own inexperience in research area might have affected the study.

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CONCLUSIONS

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CONCLUSIONS

Half of the respondents are investing in different schemes of mutual fund

companies.

The investors prefer investing more in banks and post office, which shows that

investors want security, and assured returns.

Others than Banks and post office the next preference of investors who go for

risky preposition in shares and Mutual Funds. That is basically due to

misconception that Mutual Fund Companies usually invest in equity market,

which shakes 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 44% peoples still not invest

in HDFC 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 higher

income by investing in equity schemes.

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The banks mostly make the investments through the agents followed.

Professional and Business class, which is considered to be the most

knowledgeable 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-ended

schemes in which their money is not locked for 3 to 5 years.

RECOMMENDATIONS

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Recommendations

The company should try to make aware people about their different schemes

through the road show; seminars and presentation that it is not just equity

based schemes but also debt and liquid or balanced schemes also promoted by

company. Company has to put hoardings, banners, pamphlets in that areawhere peoples can watch easily.

The customers should be made aware that if the time frame of the investment

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 motivationProgramme for their distributors and also for investors so that they are being

motivated 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 relationship

with their distributors by these they can give good contribution in investments.

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None of responds invest their money in different schemes of company

By Online, so company has opportunity to launch online services for their distributors

and retail investors.

Companys core and satellite fund, balanced fund, capital builder fund are

preferred by very few investors because this schemes not perform well so

company has to think about their companies in which they invest investors

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.

ANNEXURE

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Questionnaire

NAME: -

ADDRESS: -

CONTACT NO: (O) (R) (M)

1) Which investment avenues are you aware of?

Equity /Mutual fund

Post Office (NSC, KVP, PPF)

Fixed Deposits

Others

If others please specify

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2) Do you invest in mutual funds?

Yes No

3) If yes, in which assets class do you want to invest in mutual funds?

Equity Debt Liquid

4) Do you invest in HDFC mutual fund?

Yes No

5) If yes, in which scheme would you invest in HDFC MUTUAL FUND?

Equity

Capital builder

Prudence fund

Tax saver

Core and satellite

Top 200 fund

Balanced fund

Growth

Others

6) By which medium do you invest in HDFC mutual fund scheme?

Distributor Bank Online

7) Why do you prefer investing in HDFC MF?

Better fund houseExcellent customer service provider

Consistent return

Other

If other please specify

8) Which type of product/scheme would you prefer while investing in Equity

Scheme of HDFC mutual fund?

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Redemption Price

The price at which open-ended schemes repurchase their units and close-

Ended schemes redeem their units on maturity. These prices are NAV

Related.

Repurchase or Back-end Load

A charge collected by a scheme when it buys backs the units from the unit

Holders.

Expense Ratio:

The Expenses of a scheme include management fees and all the fees associated with

the scheme's daily operations. Expense Ratio refers to the annual percentage of fund's

assets that is paid out in expenses and can affect the performance of the scheme.

Exit Load:

It is the load charged by the fund when one redeems the units from the fund. It

reduces the price of th

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