Devendra Project

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CHAPTER 1INTRODUCTION OF TOPIC


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INTRODUCTION OF TOPIC

Mutual funds are seemingly the easiest and the least stressful way to invest in the stock

market. Quiet a large amount of money has been invested in mutual funds during the past fewyears. Any investor would like to invest in a reputed Mutual Fund organization.

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 then invested in capital market

instruments such as shares, debentures and other securities. The income earned through these

investments and the capital appreciation realised 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 basket of securities at a relatively low cost.

WHATISMEANBYMUTUALFUND?

Mutual funds are pools of money that are managed by an investment company. They offer

investors a variety of goals, depending on the fund and its investment charter. Some funds,

for example, seek to generate income on a regular basis. Others seek to preserve an investor'smoney. Still others seek to invest in companies that are growing at a rapid pace. Funds can

impose a sales charge, or load, on investors when they buy or sell shares. Many funds these

days are no load and impose no sales charge. Mutual funds are investment companies

regulated by the Investment Company Act of 1940. Related: open-end fund, closed-end fund.

CONCEPTOFMUTUALFUNDS

A mutual fund is a trust that pools the savings of a no. of investors, who share a common

financial goal. The money thus collected is then invested in capital market instruments such

as shares, debentures and other securities. The income earned through these investments and

the capital appreciations realized 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 diversified, professionally managed basket of

securities at a relatively low cost.

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HISTORICAL ASPECT

Mutual fund firstly was established in 1822 in the form of Society General De Belguique.It mainly gains the progress in Switzerland & little in franc and Germany in its initial days.

The first investment trust The foreign and colonial govt. trust Was founded in London in

1868.

INDIAN SCENARIOOF MUTUAL FUND

The origin of mutual fund industry in India is with the introduction of the concept of by

HDFC in the year 1963. Through the growth was slow, but it accelerated from the year 1987when non-HDFC players entered in industry. The mutual fund industry goes through four

phases:-

First phase 1964-87 (Establishment of HDFC).

Second phase 1987-93 (Entry of public sector funds).

Third phase 1993-2003 (Entry of a private sector funds).

Fourth phase since feb.2003 (Bifurcated of HDFC).

In the first phase, HDFC was established in 1963 by an act of parliament. In 1978 it was

delinked from RBI & the IDBI took over the control of HDFC. In second phase, SBI

entered as first non-HDFC mutual fund provider then it was followed by can bank (Dec.

87). PNB (Aug 89) & LIC in1989. In third phase, the private sector entered in it. The

Erstwhile Kothari pioneer (now merged with Franklin Templeton) was first registered in

July 1993 in mutual fund. In revised registration of SEBI I n 1993 the industry functionsunder SEBI. And the fourth phase had bitter experience for HDFC. It was bifurcated

into two separate entities. One is the specified under taking of HDFC with AUM of

29,835cr. The second is HDFC mutual fund ltd. Sponsored by SBI, PNB, BOB and LIC&

it is registered with SEBI.

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How to Profit with Mutual Funds

When you invest in a mutual fund you hope that the value will rise and you can

eventually sell your shares for a profit. This is one of the ways you can profit with mutual

funds. Another way is through capital gains. When a mutual fund sells a security for a

higher price than it originally paid for it, it is known as a capital gain. Most mutual funds

distribute their capital gains to shareholders at least annually, some more often. The last

way to profit with mutual funds is with dividends or interest. If the fund has invested in

bonds or dividend-paying stocks, it must pass the dividends or interest earned on to its

shareholders. Like capital gains, this is done at least annually.

Advantages of Mutual Funds

Mutual funds offer many advantages to the individual investor. These advantages include:

Diversification

Professional Management

Low Cost

Ease of Recordkeeping

Dollar-cost-averaging

Liquidity

Family of Funds

Convenience

Diversification:

Dont put all your eggs in one basket. We have all heard these words many times. Ininvesting this is certainly true. If you invest your nest egg in the stock of a single company

and something unforeseen happens, i.e., the company goes bankrupt, new technology makes

the companys product obsolete, etc., you could wipe out your entire investment.

A major attraction to mutual funds is the diversification they offer investors. A typical fund

will have dozens, or perhaps, hundreds of different securities in their portfolio. A poor

performance by one of the companies in the portfolio will have much less of an effect on the

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total return and safety of your principal. Every dollar you have invested in a mutual fund has

this diversification.

Professional Management:

Professional management is another key attraction to mutual funds. The average investor just

does not have the time or experience needed to make informed and profitable decisions.

Fund managers perform extensive economic and financial research. They may visit dozens or

hundreds of companies and talk with hundreds of top business execHDFCves in a years time.

They study balance sheets, trade publications, research reports, marketing reports and a

myriad of other financial data. When you buy shares in a mutual fund you are getting thisprofessional management for a relatively very low fee. The typical management fee of a

mutual fund is 1/2 of 1% of that funds assets on a yearly basis. On a $5,000 investment, this

is a yearly fee of $25.00. Professional money management has always been available to

institHDFCons and wealthy individuals. Now it is available to everyone through mutual

funds.

Low Cost

Even if you had the time, the experience, and the knowledge necessary to profitably select

your own stocks and the wherewithal to properly diversify, you cannot do it as cheaply as a

mutual fund can. Even using discount brokers you will pay up to two percent or more in

commissions even more using a full service broker. You will pay again when you sell.

Because they may buy millions of dollars worth of stock at a time, mutual funds are able to

negotiate brokers fees to the bare minimum.

Using no-load mutual funds there are no sales charges 100% of your money is being

invested for you. There are even funds which have no minimum initial investment or

minimum subsequent investment you can start investing with as little as $100.00 or even

less!

Ease of Recordkeeping:

Mutual funds handle all the paperwork and recordkeeping necessary to keep track of yourinvestment transactions. They will mail your dividend checks promptly or reinvest them in

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additional shares (the choice is yours). They will provide accurate year-end summaries of all

your transactions for income tax purposes. If you have any questions many are available 24

hours a day via a toll-free phone call.

Dollar-Cost-Averaging:

If you fear you will invest in a mutual fund right before the market goes into a nose dive, you

should consider dollar-cost-averaging. This is a technique of investing a set amount of money

at regular intervals, monthly or quarterly, rather than a lump sum all at once. You invest the

same amount of money regardless of whether the stock market is going up or down. In fact,

this strategy will turn the ups and downs of the market into an advantage.

Lets look at an example:

Suppose you will have $100.00 available to invest for each of the next four months. You are

interested in a mutual fund whose shares are currently selling for $10.00 each. You invest

your initial $100.00 and get 10 shares in return. The next month, despite the fact the market

dropped your shares are now trading at $5.00 you again invest your $100.00 and this time

you receive 20 shares. Lets assume by the next month the market has recovered and the

shares are again trading at $10.00. You invest your $100.00 and receive 10 shares. The next

month finds the market continuing its rise and your shares are now selling for $12.50. You

invest your $100.00 and receive 8 shares.

Lets see how you have done:

Monthly

InvestmentPrice

Shares

Purchased

100 10.00 10100 5.00 20

100 10 10

100 12.50 8

$400 48

Average share cost $8.33 ($400 / 48)

Ending share price $12.50

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Many mutual funds are part of a family of funds (a group of funds managed by the same

company but with different investment objectives). The advantage to this is an option known

as an exchange privilege or fund switching. Fund switching has become quite popular as

fund companies have made it easy to move your money from one fund to another, usually

with only a toll-free telephone call.

Switching is an easy and convenient way to take advantage of changing market conditions. If

the stock market began to decline, for instance, and your money was in a stock fund, you

might consider switching your investment into a money market fund within the same family.

Convenience:

Mutual fund shares are easy to buy. Generally, no-load funds have a toll-free number an

investor (or potential investor) can call for information. Some fund companies have even set

up retail centers for investors. Many have payroll deduction plans and some funds, with

proper authorization, will deduct and invest on a regular basis a specified amount from the

shareholders bank account.

You can automatically reinvest all dividends and capital gains distribHDFCons allowing you

to compound your earnings. Conversely, you have the option of automatic withdrawal you

may elect to have your earnings and/or part of your principal sent to you, or anyone you

designate, on a regular basis (so called check-a-month plan).

Many funds offer checkwriting privileges. This can be very helpful when you need to have

quick access to your money.

Mutual funds are excellent vehicles for retirement investing. The generally long-term nature

of mutual fund investing fits well with the long-term objectives of investing for retirement.

DRAWBACKSOF MUTUALFUND

No guaranties.

Fees & Commission.

Taxes.

Management Risk.

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CHARACTERISTICS OF A MUTUAL FUND

A Mutual Fund actually belongs to the investors who have pooled their funds. The

ownership of the mutual fund is in the hands of the Investors.

A Mutual Fund is managed by investment professional and other Service

providers, who earn a fee for their services, from the funds.

The pool of Funds is invested in a portfolio of marketable investments.

The value of the portfolio is updated every day.

The investors share in the fund is denominated by units. The value of the units

changes with change in the portfolio value, every day. The value of one unit of

investment is called net asset value (NAV).

The investment portfolio of the mutual fund is created according to the stated

Investment objectives of the Fund.

Mutual Fund can be classified as follows:-

1. OPEN-ENDED MUTUAL FUNDS :

The holders of the shares in the Fund can resell them to the issuing Mutual Fund company at

the time. They receive in turn the net assets value (NAV) of the shares at the time of re-sale.

Such Mutual Fund Companies place their funds in the secondary securities market. They do

not participate in new issue market as do pension funds or life insurance companies. Thus

they influence market price of corporate securities. Open-end investment companies can sell

an unlimited number of Shares and thus keep going larger. The open- end Mutual Fund

Company Buys or sells their shares. These companies sell new shares NAV plus a Loading

or management fees and redeem shares at NAV.In other words, the target amount and theperiod both are indefinite in such funds.

2 .CLOSED-ENDED MUTUAL FUNDS :-

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A closedend Fund is open for sale to investors for a specific period, after which further

sales are closed. Any further transaction for buying the units or repurchasing them, Happen

in the secondary markets, where closed end Funds are listed. Therefore new investors buy

from the existing investors, and existing investors can liquidate their units by selling them

to other willing buyers. In a closed end Funds, thus the pool of funds can technically be

kept constant.

LEGAL FRAME WORK OF SEBI

REGULATORY ASPECTS OF 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. SEBI formulates policies and regulates

the mutual funds to protect the interest of the investors.

GUIDELINES OF SEBI

1. Mutual funds are regulated by the SEBI (mutual Fund) Regulations, 1996.

2. SEBI is the regulator of all funds, except offshore funds.

3. Bank-sponsored mutual funds are jointly regulated by SEBI and RBI.

4. The bank-sponsored fund cannot provide a guarantee without RBI Permission.

5. RBI regulates money and government securities markets, in which mutual funds are

invested.

6. Listed mutual funds are subject to the listing regulations of stock

exchange.7. Since the AMC and Trustee Company are companies, the Department of

Company affairs regulate them. They have to send periodic reports to the ROC

(Register of Companies) and the CLB (Company Law Board) is the appellate

authority.

8. Investors cannot sue the trust, as they are the same as the trust and cant sue

themselves.

9. HDFC does not have a separate sponsor and AMC.

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10. HDFC is governed by the HDFC Act, 1963 and is voluntarily under SEBI

Regulations.

11. HDFC can borrow as well as lend also engage in other financial services activities.

12. Only AMFI certified agents can sell Mutual Fund units.

13. Mutual Funds Company is required to update the NAV of the scheme on the AMFI

website on a daily basis in case of open-ended scheme.

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Page No. 13

CHAPTER 2COMPANY PROFILE


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COMPANY PROFILE

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to

receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the

private sector, as part of the RBI's liberalisation of the Indian Banking Industry in 1994. The

bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its

registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled

Commercial Bank in January 1995.

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.

The registered office of the AMC is situated at Ramon House, 3rd Floor, H.T. Parekh Marg,

169, Backbay Reclamation, Churchgate, Mumbai - 400 020.

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

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

AMC is Rs. 25.169 crore.

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Why HDFC Mutual Fund

HDFC Mutual Fund is one of the largest mutual funds and well-established fund house in the

country with consistent fund performance across categories since its incorporation on

December 10, 1999. While our past experience does make us a veteran, but when it comes toinvestments, we have never believed that the experience is enough.

Our Investment Philosophy

The single most important factor that drives HDFC Mutual Fund is its belief to give the

investor the chance to profitably invest in the financial market, without constantly worrying

about the market swings. To realize this belief, HDFC Mutual Fund has set up the

infrastructure required to conduct all the fundamental research and back it up with effective

analysis. Our strong emphasis on managing and controlling portfolio risk avoids chasing the

latest "fads" and trends.

We Offer

We believe, that, by giving the investor long-term benefits, we have to constantly review the

markets for new trends, to identify new growth sectors and share this knowledge with our

investors in the form of product offerings. We have come up with various products across

asset and risk categories to enable investors to invest in line with their investment objectives

and risk taking capacity. Besides, we also offer Portfolio Management Services.

To know more about our products please visit our Products section.

To find out your current financial health and tips about financial planning, please visit out

Calculators section.

TrusteesHDFC Trustee Company Limited, a company incorporated under the Companies Act, 1956 is

the Trustee to HDFC Mutual Fund vide the Trust deed dated June 8, 2000, as amended from

time to time. HDFC Trustee Company Ltd is wholly owned subsidiary of HDFC

The Board of Directors of HDFC Trustee company Limited consists of the following

eminent persons.

Mr. Anil Kumar Hirjee

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Mr. Vincent Joseph OBrien

Mr. Shishir K. Diwanji

Mr. Ranjan Sanghi

Mr. V. Srinivasa Rangan

Mr. Anil Kumar Hirjee

Mr. Anil Kumar Hirjee, the Chairman of the Board, is an independent Director. Mr.Hirjee has

45 years of experience in different areas of Business Management and his expertise extends

to finance, banking, legal, commercial, industrial and general administration. He has also

been actively associated with leading Charitable Institutions. Mr. Hirjee has been associated

with The Bombay Burmah Trading Corporation Limited since 1976 and is presently its ViceChairman. He is also a Director on the Boards of various other companies.

Mr. Hirjee is a B.A. (Hons.), LL.B. (Hons.), Barrister-at-Law, and SLOAN Fellow of the

London Business School.

Sponsors

HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (HDFC)

HDFC Ltd. was incorporated in 1977 as the first specialised 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 and consultancy. Of these

activities, housing finance remains the dominant activity. HDFC has a client base of around

13 lac borrowers, over 11 lac depositors, over 2.09 lac shareholders and over 25,000 deposit

agents, as at March 31, 2012. The Company has a total asset size of Rs.1,67,250 crore as at

March 31, 2012 and cumulative approvals and disbursements of housing loans of

Rs.4,63,400 crore and Rs.3,73,646 crore respectively as at March 31, 2012.

HDFC had 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 Seventeenth year in succession.

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HDFC 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.

In 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 favour of this. The

Court of 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 the dedicated investment management company of the Standard Life group and is a wholly

owned subsidiary of Standard Life Investments (Holdings) Limited, which in turn is a wholly

owned subsidiary of Standard Life plc.

With global assets under management of approximately US$240.7 billion (154.9 billion) as

at December 31, 2011, Standard Life Investments Limited is one of the world's major

investment companies, operating in the UK, Canada, Hong Kong, China, Korea, Ireland,

Australia and the USA, and is responsible for investing money on behalf of five million retail

and institutional clients worldwide

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

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investments and various derivative instruments. The company's current holdings in UK

equities account for approximately 1.8% of the market capitalisation of the London Stock

Exchange

The present equity shareholding pattern of the AMC is as follows :

Particulars % of the paid up equity

capital

Housing Development Finance Corporation Limited 59.98

Standard Life Investments Limited 39.99

Other Shareholders (shares issued on exercise of Stock

Options)

0.03

Zurich Insurance Company (ZIC), the Sponsor of Zurich India Mutual Fund, following a

review of its overall strategy, had decided to divest its Asset Management business in India.

The AMC had entered into an agreement with ZIC to acquire the said business, subject to

necessary regulatory approvals.

On obtaining the regulatory approvals, the following Schemes of Zurich India Mutual Fund

have migrated to HDFC Mutual Fund on June 19, 2003. These Schemes have been renamedas follows:

Former Name New Name

Zurich India Equity Fund HDFC Equity Fund

Zurich India Prudence Fund HDFC Prudence Fund

Zurich India Capital Builder Fund HDFC Capital Builder Fund

Zurich India TaxSaver Fund HDFC TaxSaver

Zurich India Top 200 Fund HDFC Top 200 Fund

Zurich India High Interest Fund HDFC High Interest Fund

Zurich India Liquidity Fund HDFC Cash Management Fund

Zurich India Sovereign Gilt Fund HDFC Sovereign Gilt Fund*

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Amount

Lock-In-Period If opted: Until the Unit Holder (being the beneficiary child) attains the

age of 18 years or until completion of 3 years from date of allotment ,

whichever is later

Net Asset Value

Periodicity

Every Business Day.

Redemption

Proceeds

Normally dispatched within 3-4 Business days

Tax Benefits

(As per present

Laws)

Current Expense Ratio (#)

(Effective Date 01st October

2012)

On the first 100 crores daily net assets 2.25%

On the next 300 crores daily net assets 2.00%

On the next 300 crores daily net assets 1.75%

On the balance of the net assets 1.50%

In addition to the above a charge of 20 bps on the daily net

assets plus a proportionate charge in respect sales beyond

T-15 cities subject to maximum of 30 bps on daily net

assets.

HDFC Gold Fund

Investment Objective

The investment objective of the Scheme is to seek capital appreciation by investing in units

of HDFC Gold Exchange Traded Fund.

Basic Scheme Information

Nature of Scheme An Open-ended Fund of Fund Scheme investing in HDFC

Gold Exchange Traded Fund

Investment Objective The investment objective of the Scheme is to seek capital

appreciation by investing in units of HDFC Gold Exchange

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Traded Fund.

Option/Plan Currently the Scheme offers only Growth Option.

Entry Load

(as a % of the Applicable

NAV)

Not Applicable.

Pursuant to SEBI circular no. SEBI/IMD/CIRNo.4/ 168230/09 dated June 30, 2009, no entry

load will be charged by the Scheme to the investor.

Upfront commission shall be paid directly by the

investor to the ARN Holder (AMFI registered

Distributor) based on the investors' assessment of

various factors including the service rendered by

the ARN Holder.

Exit Load


NAV)

In respect of each purchase / switch-in of units-

an Exit Load of 2% is payable if Units are

redeemed / switched-out within 6 months from the

date of allotment.

an Exit Load of 1% is payable if Units are

redeemed / switched-out after 6 months but within

1 year from the date of allotment.

No Exit Load is payable if Units are redeemed /

switched-out after 1 year from the date of

allotment.

Minimum Application

Amount

Purchase: 5,000 and any amount thereafter.

Additional Purchase: 1,000 and any amount thereafter.

Minimum Amount per SIP Installment

Monthly SIP: 500/- and in multiples of 100/-

Quarterly SIP: 1,500/- and in multiples of 100/-

Lock-In-Period Nil

Net Asset Value Periodicity The NAV will be calculated on all Business Days and will

be disclosed on the website of HDFC Mutual Fund and on

the website of Association of Mutual Funds in India -

AMFI (www.amfiindia.com) by 10.00 a.m. on every next

Business Day.

Redemption Proceeds Within 10 working days.

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HDFC Cash Management Fund - Savings Plan


The investment objective of the Scheme is to generate optimal returns while maintaining

safety and high liquidity.

Basic Scheme Information

Nature of Scheme Open Ended High Liquidity Income Scheme

Inception Date November 18, 1999

Option/Plan Growth Option, Daily dividend option (reinvestment

facility only) and Weekly dividend option (with payout

and Reinvestment facility).

(Effective from Jun 1st, 2007 - Dividend Payout facility is

being introduced under the Weekly Dividend Option).

Entry Load

(For Lumpsum Purchases and

investments through SIP/STP)

NIL

Unfront commission shall be paid directly by the investor

to the ARN Holder (AMFI registered Distributor) based on

the investors' assessment of various factors including the

service rendered by the ARN Holder.Exit Load


NAV)

Nil

Minimum Application

Amount

Growth/ Daily Dividend/Weekly Dividend Option -

For New investors - Rs.10000 and any amount thereafter

For Existing investors - Rs. 5000 and any amount

thereafter

Lock-In-Period NilNet Asset Value Periodicity All year round.

Redemption Proceeds Normally despatched within 1 Business day

Current Expense Ratio (#)

(Effective

Date 24th December 2012)

0.01%

HDFC Gold Exchange Traded Fund


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Large Investors: Application for subscription of HGETF

Units directly with the Fund in Creation Unit Size at NAV

based prices by payment of requisite Cash as determinedby the AMC only by means of payment instruction of Real

Time Gross Settlement (RTGS)/National Electronic Funds

Transfer (NEFT) or Funds Transfer Letter/ Transfer

Cheque of a bank where the Scheme has a collection

account.

Other investors (including Authorised Participants and

Large Investors): Units of HGETF can be subscribed (in

lots of 1 Unit) during the trading hours on all trading days

on the NSE and BSE on which the Units are listed.

Lock-In-Period Nil

Net Asset Value Periodicity Every Business Day.

Redemption Proceeds Within 10 working days.

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CHAPTER 3OBJECTIVE OF STUDY


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OBJECTIVES OF THE STUDY

Find out the attitude of customers towards Systematic Investment Plan of

HDFC Mutual Fund.

Find out the proportion of various schemes invested in HDFC Mutual Funds.

Find out the main usage of HDFC Mutual Funds.

Measure the level of Customer satisfaction in HDFC Mutual Funds.

To determine the analysis of Mutual Fund which provides better returns from

HDFC Mutual Funds.

To analyze the concept and parameters of mutual fund.

To know how many people are satisfied by their HDFC Mutual Funds.

To know people behavior regarding risk factor involved in mutual fund.

To provide an opportunity for lower income groups to acquire without much

difficulty, property in the form of shares.

To manage in investors portfolio that provide s regular income, growth, safety,

liquidity, professional management and diversification.

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CHAPTER-4

SCOPE OF THE STUDY


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SCOPE OF THE STUDY

The scope of the study is to Inform & guide the investor about the various mutual

fund schemes & helps them to select the best scheme as per their requirement.

The research was carried on in Nagpur. I had been sent at one of the branch of HDFC

Nagpur where I completed my Project work. I surveyed on my Project An Analytical Study

Mutual Fund Schemes with Special Reference to HDFC Bank Nagpur on the visiting

customers of HDFC Nagpur.

A big boom has been witnessed in Mutual Fund Industry in resent times. A large

number of new players have entered the market and trying to gain market share in this

rapidly improving market.

Investors are the customers of the different mutual fund schemes during my project

with Analytical Study of Systematic Investment plan of HDFC Mutual Fund.

The study will help to know the preferences of the customers, which company,

portfolio, mode of investment, option for getting return and so on they prefer. This project

report may help the company to make further planning and strategy.

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HYPOTHESIS

An unproven proposition or that tentatively explains certain facts or phenomenon; a

proposition that is empirically testable. A personnel manager may believe that if attitudes

towards job security are changed in positive direction, there will be an increase in employee

retention.

HDFC mutual fund provides better growth to its customer.

HDFC Bank strives to create new prospects through maintaining good relationship

with customer.

HDFC mutual fund gives better Returns.

HDFC mutual fund attracts people for investment.

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Page No. 30

CHAPTER 6

LIMITATIONS OF THE STUDY


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LIMITATIONS OF THE STUDY

The project done is restricted to HDFC Mutual funds in Nagpur and its surroundings

only.

Some of the persons were not so responsive.

Possibility of error in data collection because many of investors may have not given

actual answers of my questionnaire.

The sample size may not adequately represent the whole market.

Some respondents were reluctant to divulge personal information which can affect the

validity of all responses.

The study was constrained by limitations of time.

The raw data was collected with the help of structured questionnaire technique.

Therefore study is bounded by the limitation of this technique.

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Page No. 32

CHAPTER-7

RESEARCH METHODOLOGY


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RESEARCH METHODLOGY

Research is an original contrib. HDFC on to the existing stock of knowledge making

for its advancement. It is the pursuit of truth with the help of study, observation, comparison

and experiment. In short, the search for knowledge through objective and systematic method

of finding sol HDFC on to a problem is research.

Research as a care full investigation or enquiry specially through search for a new facts in

any branch of knowledge Research is an academic activity and such as the term should be

used in technical sense. The manipulation of things , concepts or symbols for the purpose of

generalizing to extend ,correct or verify knowledge, whether that knowledge through

objective.

Collection of Data:

Data were collected through both primary and secondary data sources. Primary data

was collected through questionnaires. The research was done in the form of direct personal

interviews and through telephone interviews.

Primary data:-

A primary data is a data, which is collected afresh and for the first time, and thus happen to

be original in character. The primary data with the help of questionnaire were collected from

various investors.

Primary data are first hand information and are collected from various sources like:Primary data are first hand information and are collected from various sources like:

Informal interviewsInformal interviews

Through Structured questionnaireThrough Structured questionnaire

ObservationObservation

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Page No. 35

CHAPTER 8DATA ANALYSIS AND

INTERPRETATION


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DATA ANALYSIS & INTERPRETATION

1. Preference of factors while investing.

Factors No. of Respondents

Liquidity 40

Low Risk 60High Return 64

Trust 36

Interpretation:

Out of 200 People, 32% People prefer to invest where there is High Return,

30% prefer to invest where there is Low Risk, 20% prefer easy Liquidity and

18% prefer Trust

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3. Source of information for customers about Mutual Fund.

Source of information No. of Respondents

Advertisement 18Peer Group 25

Bank 30

Financial Advisors 62

Interpretation:

From the above chart it can be inferred that the Financial Advisor is the

most important source of information about Mutual Fund. Out of 135

Respondents, 46% know about Mutual fund Through Financial Advisor,

22% through Bank, 19% through Peer Group and 13% through

Advertisement.

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4. Investors invested in Mutual Fund.

Response No. of Respondents

YES 120

NO 80

Total 200

Interpretation:

Out of 200 People, 60% have invested in Mutual Fund and 40% do not have

invested in Mutual Fund.

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6.Investors invested in different Assets Management Co. (AMC)

Name of AMC No. of InvestorsHDFC MF 22

SBIMF 15Reliance 22

ICICI Prudential 12Kotak 9Others 20

Interpretation:

In Nagpur most of the Investors preferred HDFC and Reliance Mutual Fund.

Out of 120 Investors 22% have invested in each of them, only 15% have

invested in SBIMF, 12% in ICICI Prudential, 9% in Kotak and Other 20%.

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7. Reason for invested in HDFC MF.

Reason No. of RespondentsAssociated with HDFC 35

Better Return 5Agents Advice 15

Interpretation:

Out of 55 investors of HDFC MF 64% have invested because of its association

with Brand HDFC, 27% invested on Agents Advice, 9% invested because of

better return.

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8. Reason for not invested in HDFC MF.

Reason No. of Respondents

Not Aware 25

Less Return 18

Agents Advice 22

Interpretation:

Out of 65 people who have not invested in HDFC MF, 38% were not aware

with HDFC MF, 28% do not have invested due to less return and 34% due to

Agents Advice.

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9. Preference of Investors for future investment in Mutual Fund.

Name of AMC No. of InvestorsHDFC MF 76

SBIMF 45Reliance 82

ICICI Prudential 80Kotak 60Others 75

Interpretation:

Out of 120 investors, 68% prefer to invest in Reliance, 67% in ICICI

Prudential, 63% in SBIMF, 62.5% in Others, 50% in Kotak, 37.5% in HDFC

and 29% in HDFC Mutual Fund.

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10. Channel Preferred by the Investors for Mutual Fund Investment.

Channel No. of Respondents

Financial Advisor 72

Bank 18

AMC 30

Interpretation:

Out of 120 Investors 60% preferred to invest through Financial Advisors, 25%

through AMC and 15% through Bank.

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11. Mode of Investment Preferred by the Investors.

Mode of Investment No. of RespondentsOne time Investment 78

Systematic Investment Plan (SIP) 42

Interpretation:

Out of 120 Investors 65% preferred One time Investment and 35 % Preferred

through Systematic Investment Plan.

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12. Preferred Portfolios by the Investors.

Portfolio No. of Investors

Equity 56Debt 20

Balanced 44

Interpretation:

From the above graph 46% preferred Equity Portfolio, 37% preferred Balance

and 17% preferred Debt portfolio.

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14. Preference of Investors whether to invest in Sectoral Funds.

Response No. of Respondents

Yes 25

No 95

Interpretation:

Out of 120 investors, 79% investors do not prefer to invest in Sectoral Fund

because there is maximum risk and 21% prefer to invest in Sectoral Fund.

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CONCLUSION

Running a successful Mutual Fund requires complete understanding of the

peculiarities of the Indian Stock Market and also the psyche of the small investors.

This study has made an attempt to understand the financial behavior of Mutual Fund

investors in connection with the preferences of Brand (AMC), Products, Channels etc.

I observed that many of people have fear of Mutual Fund. They think their money

will not be secure in Mutual Fund. They need the knowledge of Mutual Fund and its

related terms. Many of people do not have invested in mutual fund due to lack of

awareness although they have money to invest. As the awareness and income is

growing the number of mutual fund investors are also growing.

Brand plays important role for the investment. People invest in those Companies

where they have faith or they are well known with them. There are many AMCs in

Nagpur but only some are performing well due to Brand awareness. Some AMCs are

not performing well although some of the schemes of them are giving good return

because of not awareness about HDFC MF, Brand. Reliance, SBIMF, ICICI

Prudential etc.

Financial Advisors are the most preferred channel for the investment in mutual fund.

They can change investors mind from one investment option to others. Many of

investors directly invest their money through AMC because they do not have to pay

entry load. Only those people invest directly who know well about mutual fund and

its operations and those have time.

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CHAPTER-10

RECOMMENDATIONS

AND SUGGESTIONS


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Page No. 52

CHAPTER-10

RECOMMENDATIONS

AND SUGGESTIONS


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RECOMMENDATIONS AND SUGGESTIONS

HDFC The most vital problem spotted is of ignorance. Investors should be made

aware of the benefits. Nobody will invest until and unless he is fully convinced.

Investors should be made to realize that ignorance is no longer bliss and what they are

losing by not investing.

HDFC Mutual funds offer a lot of benefit which no other single option could offer.

But most of the people are not even aware of what actually a mutual fund is? They

only see it as just another investment option. So the advisors should try to changetheir mindsets. The advisors should target for more and more young investors. Young

investors as well as persons at the height of their career would like to go for advisors

due to lack of expertise and time.

HDFC Mutual Fund Company needs to give the training of the Individual Financial

Advisors about the Fund/Scheme and its objective, because they are the main source

to influence the investors.

Before making any investment Financial Advisors should first enquire about the risk

tolerance of the investors/customers, their need and time (how long they want to

invest). By considering these three things they can take the customers into

consideration.

Customers with graduate level education are easier to sell to and there is a large

untapped market there. To succeed however, advisors must provide sound advice and

high quality.

Systematic Investment Plan (SIP) is one the innovative products launched by Assets

Management companies very recently in the industry. SIP is easy for monthly

salaried person as it provides the facility of do the investment in EMI. Though most

of the prospects and potential investors are not aware about the SIP. There is a large

scope for the companies to tap the salaried persons.

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Page No. 54

CHAPTER-11

ANNEXURE


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QUESTIONNAIRE

Dear Respondent,

Thanks for sparing few minutes to fill this questionnaire, which will help us to study the An

Analytical Study Mutual Fund Schemes with Special Reference to HDFC Bank Nagpur.

Any information provided by you will purely and strictly be used for Academic Purpose

only.

Personal Information:-

Age: ____________________________________________

Gender: _________________________________________

Occupation/ Profession: ___________________________

Location: ________________________________________

1. Preference of factors while investing.

Liquidity

Low Risk

High Return

Trust

2. Awareness about Mutual Fund and its Operations.

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Yes

No

3. Source of information for customers about Mutual Fund.

Advertisement

Peer Group

Bank

Financial Advisors

4. Investors invested in Mutual Fund.

Yes

No

5. Reason for not invested in Mutual Fund.

Not Aware

Higher Risk

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Not any Specific Reason

6.Investors invested in different Assets Management Co. (AMC).

HDFC MF

SBIMF

Reliance

ICICI Prudential

Kotak

Others

7. Reason for invested in HDFC MF.

Associated with HDFC

Better Return

Agents Advice

8. Reason for not invested in HDFC MF.

Not Aware

Less Return

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Agents Advice

9. Preference of Investors for future investment in Mutual Fund.

HDFC MF

SBIMF

Reliance

ICICI Prudential

Kotak

Others

10. Channel Preferred by the Investors for Mutual Fund Investment.

Financial Advisor

Bank

AMC

11. Mode of Investment Preferred by the Investors.

One time Investment

Systematic Investment Plan (SIP)

12. Preferred Portfolios by the Investors.

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Equity

Debt

Balanced

13. Option for getting Return Preferred by the Investors.

Dividend Payout

Dividend Reinvestment

Growth

14. Preference of Investors whether to invest in Sectoral Funds.

Yes

No

Thank you for participating in this research.

Documents

Devendra Project