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RISK AND RETURN ANALYSIS OF MUTUAL FUNDS

RJS Institute of Management Studies 1

INTRODUCTION

According to Shakespeare out of this nettle, danger, we pluck this flower, safety'.

The economic development model adopted by India in the post-independence era has been

characterized by mixed economy with the public sector playing a dominating role and the

activities in private industrial sector control measures emaciated from time to time. The

industrial policy resolution was introduced by the government in the 1948, immediately

after the independence. This outlined the approach to industrial growth and development.

The industrial policy statement of 1980 focused attention on the need for promoting

competition in the domestic market, technological up gradation and modernization. A

number of policy and procedural changes were introduced in 1985 and 1986, aimed at

increasing productivity, reducing costs, improving quality, opening domestic market to

increase competition and making free the public sector from constraints.

Overall, in the seventh plan period (1985-86 to 1989-90), Indian industries grew by

an impressive average annual rate of 8.5 percent. The last two decades have seen a

phenomenal expansion in the geographical coverage and financial spread of our financial

system. The spread of the banking system has been a major factor in promoting financial

intermediation in the economy and in the growth of financial savings. With progressive

liberalization of economic policies, there has been a rapid growth of capital market, money

market and financial services industry including merchant banking, leasing and venture

capital. Consistent with this evolution of the financial sector, the mutual fund industry has

also come to occupy an important place.

The prospectus investors have various options to invest his surplus funds, expecting

reasonable returns from his investment .There are various avenues available in the present

scenario, like:

Post office Deposit

Real Estate

Equity shares

Debentures

Bank Deposits

Gold / Silver

Mutual Funds

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CONCEPT OF MUTUAL FUNDS:

Mutual fund is a trust that pools money from a group of investors (sharing common

financial goals) and invest the money thus collected into asset classes that match the stated

investment objectives of the scheme. Since the stated investment objectives of a mutual

fund scheme generally form the basis for an investor's decision to contribute money to the

pool, a mutual fund can not deviate from its stated objectives at any point of time.

Every Mutual Fund is managed by a fund manager, who using his investment management

skills and necessary research works ensures much better return than what an investor can

manage on his own. The capital appreciation and other incomes earned from these

investments are passed on to the investors (also known as unit holders) in proportion of the

number of units they own.

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INTRODUCTION TO MUTUAL FUNDS:

The most developed and developing countries the mutual fund cult has been

catching on in India. The important reasons for this interesting occurrence are:

1. Mutual funds make it easy and less costly for investors to satisfy their need for

capital growth, income and/or income preservation.

2. Mutual fund brings the benefits of diversification and money management to the

individual investor, providing an opportunity for financial success that was once

available only to a select few.

Understanding Mutual funds is easy as it's such a straightforward concept. A mutual

fund is a company that pools the money of many investors, its shareholders to invest in a

variety of different securities. Investments may be in stocks, bonds, money market

securities or some combination of these. Those securities are professionally & efficiently

managed on behalf of the shareholders, and each investor holds a pro rata share of the

portfolio -- entitled to any profits when the securities are sold, but subject to any losses in

value as well.

For the individual investor, mutual funds propose the benefit of having someone

else manage your investments and diversify your money over many different securities that

may not be available or affordable to you otherwise. Today, minimum investment

requirements on many funds are low enough that even the smallest investor can get started

in mutual funds.

A mutual fund, by its very nature, is diversified -- its assets are invested in many

different securities. Beyond that, there are many different types of mutual funds with

different objectives and levels of growth potential, furthering your odds to diversify.

A Mutual Fund is a trust registered with the Securities and Exchange Board of India

(SEBI), which pools up the money from individual / corporate investors and invests the

same on behalf of the investors /unit holders, in equity shares, Government securities,

Bonds, Call money markets etc., and distributes the profits. 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. This pooled income is professionally

managed on behalf of the unit-holders, and each investor holds a proportion of the portfolio

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i.e. entitled not only to profits when the securities are sold, but also subject to any losses in

value as well.

For retail investor who does not have the time and expertise to analyze and invest in

stocks and bonds, mutual funds offer a viable investment alternative. This is because:

1. Mutual Funds provide the benefit of cheap access to expensive stocks.

2. Mutual funds diversify the risk of the investor by investing in a basket of assets.

3. A team of professional fund managers manages them with in-depth research inputs

from Investment analysts.

4. Being institutions with good bargaining power in markets, mutual funds have access to

crucial corporate information which individual investors cannot access.

HISTORY OF MUTUAL FUNDS:

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 Phase1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was

set up by the Reserve Bank of India and functioned under the Regulatory and

administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the

RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and

administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme

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

Second Phase1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by public

sector banks and Life Insurance Corporation of India (LIC) and General InsuranceCorporation 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 of India (Jun 90),

Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while

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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 Phase1993-2003 (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.

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.

Fourth Phasesince February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI wasbifurcated 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, 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

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private sector funds, the mutual fund industry has entered its current phase of consolidation

and growth.

Mutual funds go back to the times of the Egyptians and Phoneticians when they

sold shares in caravans and vessels to spread the risk of these ventures. The foreign and

colonial government Trust of London of 1868 is considered to be the fore-runner of the

modern concept of mutual funds. The USA is, however, considered to be the Mecca of

modern mutual funds. By the early - 1930s quite a large number of close - ended mutual

funds were in operation in the U.S.A. Much later in 1954, the committee on finance for the

private sector recommended mobilization of savings of the middle class investors through

unit trusts. Finally in July 1964, the concept took root in India when Unit Trust of India

was set up with the twin objective of mobilizing household savings and investing the funds

in the capital market for industrial growth. Household sector accounted for about 80

percent of nations savings and only about one third of such savings was available to the

corporate sector. It was felt that UTI could be an effective vehicle for channelzing

progressively larger shares of household savings to productive investments in the corporate

sector. The process of economic liberalization in the eighties not only brought in dramatic

changes in the environment for Indian industries, corporate sector and the capital market

but also led to the emergence of demand for newer financial services such as issue

management, corporate counseling, capital restructuring and loan syndication. After twodecades of UTI monopoly, recently some other public sector organizations like LIC (1989),

GIC (1991 ), SBI (1987), Can Bank (1987), Indian Bank (1990), Bank of India (1990),

Punjab National Bank (1990) have been permitted to set up mutual funds. Mr. M.R. Mayya

the Executive Director of Bombay Stock Exchange opined recently that the decade of

nineties will belong to mutual funds because the ordinary investor does not have the time,

experience and patience to take independent investment decisions on his own. Importance

of Mutual Fund Small investors face a lot of problems in the share market, limited

resources, lack of professional advice, lack of information etc. Mutual funds have come as

a much needed help to these investors. It is a special type of institutional device or an

investment vehicle through which the investors pool their savings which are to be invested

under the guidance of a team of experts in wide variety of portfolios of corporate securities

in such a way, so as to minimize risk, while ensuring safety and steady return on

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investment. It forms an important part of the capital market, providing the benefits of a

diversified portfolio and expert fund management to a large number, particularly small

investors. Now days, mutual fund is gaining its popularity due to the following reasons:

1. With the emphasis on increase in domestic savings and improvement in deployment of

investment through markets, the need and scope for mutual fund operation has

increased tremendously. The basic purpose of reforms in the financial sector was to

enhance the generation of domestic resources by reducing the dependence on outside

funds. This calls for a market based institution which can tap the vast potential of

domestic savings and channelize them for profitable investments. Mutual funds are not

only best suited for the purpose but also capable of meeting this challenge.

2. An ordinary investor who applies for share in a public issue of any company is not

assured of any firm allotment. But mutual funds who subscribe to the capital issue

made by companies get firm allotment of shares. Mutual fund latter sell these shares in

the same market and to the Promoters of the company at a much higher price. Hence,

mutual fund creates the investors confidence.

3. The psycho of the typical Indian investor has been summed up by Mr. S.A. Dave,

Chairman of UTI, in three words; Yield, Liquidity and Security. The mutual funds,

being set up in the public sector, have given the impression of being as safe a conduit

for investment as bank deposits. Besides, the assured returns promised by them haveinvestors had.

4. Great appeal for the typical Indian investor. As mutual funds are managed by

professionals, they are considered to have a better knowledge of market behaviors.

Besides, they bring a certain competence to their job. They also maximize gains by

proper selection and timing of investment.

5. Another important thing is that the dividends and capital gains are reinvested

automatically in mutual funds and hence are not fritted away. The automatic

reinvestment feature of a mutual fund is a form of forced saving and can make a big

difference in the long run.

6. The mutual fund operation provides a reasonable protection to investors. Besides,

presently all Schemes of mutual funds provide tax relief under Section 80 L of the

Income Tax Act and in addition, some schemes provide tax relief under Section 88 of

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the Income Tax Act lead to the growth of importance of mutual fund in the minds of the

investors.

7. As mutual funds creates awareness among urban and rural middle class people about

the benefits of investment in capital market, through profitable and safe avenues,

mutual fund could be able to make up a large amount of the surplus funds available

with these people.

8. The mutual funds attracts foreign capital flow in the country and secure profitable

investment avenues abroad for domestic savings through the opening of off shore funds

in various foreign investors. Lastly another notable thing is that mutual funds are

controlled and regulated by SEBI and hence are considered safe. Due to all these

benefits the importance of mutual fund has been increasing.

GROWTH TREND OF MUTUAL FUND

Opening of the mutual fund industry to the public sector banks and insurance

companies, led to the launching of more and more of new schemes. The mutual fund

industry in India has grown fast in the recent period. The performance is encouraging

especially because the emphasis in India has been on individual investors rather in contrast

to advanced countries where mutual funds depend largely on institutional investors, In

general, it appears that the mutual fund in India have given a good account of themselves

so far.

UTI's annual sale of units crossed Rs.1000 crores mark in 1986 to 87, 2000 crores

mark in 1987-88 and reached Rs.5500 crores mark in 1989 to 90. During 1990 to 91 on

account of decline of corporate interest, sales declined to Rs.4100 crores though individual

sales increased over its preceding year. LICMF has concentrated on funds which includes

life and accident cover. GICMF provide home insurance policy. The bank sponsoredmutual fund floated regular income, growth and tax incentives schemes. Together the eight

mutual fund service more than 15 million investors with UTI alone holds for 13 million

unit holding accounts. Magnum Regular Income Scheme 1987 assured a return of 12

percent but gave 20 percent dividend in 1993, UTI record 26 percent dividend for 1992 to

93 under the unit 1964 scheme. Magnum Tax saving scheme 1988 to 89 did not promise

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any return but declared 14 percent dividend in 1993 and recorded a capital appreciation of

15 percent in the first year. Equity oriented scheme have earned attractive returns.

Especially since early 1991 there has been a steady increase in the number of equity

oriented growth funds. With the boom of June 1990 and then again 1991 due to the

implementation of new economic policies towards structure of change the price of

securities in stock market appreciated considerably. The high rate of growth in equity price

led to a high rate of appreciation in the net asset value of the equity oriented funds for

which investors started changing their preferences from fixed income funds to growth

oriented or unfixed income funds. That is why more equity oriented mutual funds were

launched in 1991. Master share provide a respective dividend of 18 per cent in 1993, Can

share earned a dividend of 15 percent in 1993. In general the Unit Trust of India which

manages over 28,000 crores under various schemes has for its service an excellent

reputation.

The concept of mutual funds in India dates back to the year 1963. The era between

1963 and 1987 marked the existence of only one mutual fund company in India with Rs.

67bn assets under management (AUM), by the end of its monopoly era, the Unit Trust of

India (UTI). By the end of the 80s decade, few other mutual fund companies in India took

their position in mutual fund market.

The new entries of mutual fund companies in India were SBI Mutual Fund,Canbank Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank Mutual Fund,

Bank of India Mutual Fund.

The succeeding decade showed a new horizon in Indian mutual fund industry. By

the end of 1993, the total AUM of the industry was Rs. 470.04 bn. The private sector funds

started penetrating the fund families. In the same year the first Mutual Fund Regulations

came into existence with re-registering all mutual funds except UTI. The regulations were

further given a revised shape in 1996.

Kothari Pioneer was the first private sector mutual fund company in India which

has now merged with Franklin Templeton. Just after ten years with private sector players

penetration, the total assets rose up to Rs. 1218.05 bn. Today there are 44 mutual fund

companies in India.

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Some facts for the growth of mutual funds in India

Number of foreign AMCs is in the queue to enter the Indian markets like

Fidelity Investments, US based, with over US$1trillion assets under management

worldwide.

Our saving rate is over 23%, highest in the world. Only channelizing these savings

in mutual funds sector is required.

We have approximately 44 mutual funds which are much less than US having more

than 800. There is a big scope for expansion.

'B' and 'C' class cities are growing rapidly. Today most of the mutual funds are

concentrating on the 'A' class cities. Soon they will find scope in the growing cities.

Mutual fund can penetrate rural like the Indian insurance industry with simple and

limited products.SEBI allowing the MF's to launch commodity mutual funds.

Emphasis on better corporate governance.

Trying to curb the late trading practices.

Introduction of Financial Planners who can provide need based advice.
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CATEGORIES OF MUTUAL FUND:

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Mutual funds can be classified as follow:

Based on their structure:

Open-ended funds: Investors can buy and sell the units from the fund, at any

point of time.

Close-ended funds: These funds raise money from investors only once.

Therefore, after the offer period, fresh investments can not be made into the fund.

If the fund is listed on a stocks exchange the units can be traded like stocks (E.g.,

Morgan Stanley Growth Fund). Recently, most of the New Fund Offers of close-

ended funds provided liquidity window on a periodic basis such as monthly or

weekly. Redemption of units can be made during specified intervals. Therefore,

such funds have relatively low liquidity.

Based on their investment objective:

Equity funds: These funds invest in equities and equity related instruments.With fluctuating share prices, such funds show volatile performance, even losses.

However, short term fluctuations in the market, generally smoothens out in the

long term, thereby offering higher returns at relatively lower volatility. At the

same time, such funds can yield great capital appreciation as, historically, equities

have outperformed all asset classes in the long term. Hence, investment in equity

funds should be considered for a period of at least 3-5 years. It can be further

classified as:

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i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is

tracked. Their portfolio mirrors the benchmark index both in terms of composition

and individual stock weightages.

ii) Equity diversified funds- 100% of the capital is invested in equities spreading

across different sectors and stocks.

iii|) Dividend yield funds- it is similar to the equity diversified funds except that they

invest in companies offering high dividend yields.

iv) Thematic funds- Invest 100% of the assets in sectors which are related through

some theme.

e.g. -An infrastructure fund invests in power, construction, cements sectors etc.

v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking

sector fund will invest in banking stocks.

vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.

Balanced fund:Their investment portfolio includes both debt and equity. As a result, on

the risk-return ladder, they fall between equity and debt funds. Balanced funds are the ideal

mutual funds vehicle for investors who prefer spreading their risk across various instruments.

Following are balanced funds classes:

i) Debt-oriented funds -Investment below 65% in equities.

ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt.

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Debt fund: They invest only in debt instruments, and are a good option for

investors averse to idea of taking risk associated with equities. Therefore, they invest

exclusively in fixed-income instruments like bonds, debentures, Government of India

securities; and money market instruments such as certificates of deposit (CD),

commercial paper (CP) and call money. Put your money into any of these debt funds

depending on your investment horizon and needs.

i) Liquid funds- These funds invest 100% in money market instruments, a large

portion being invested in call money market.

ii) Gilt funds ST- They invest 100% of their portfolio in government securities of

and T-bills.

iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt

instruments which have variable coupon rate.

iv) Arbitrage fund- They generate income through arbitrage opportunities due to

mis-pricing between cash market and derivatives market. Funds are allocated to

equities, derivatives and money markets. Higher proportion (around 75%) is put in

money markets, in the absence of arbitrage opportunities.

v) Gilt funds LT- They invest 100% of their portfolio in long-term government

securities.

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vi) Income funds LT- Typically, such funds invest a major portion of the portfolio in

long-term debt papers.

vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an

exposure of 10%-30% to equities.

viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in line with

that of the fund.

ADVANTAGES OF MUTUAL FUND

S. No. Advantage Particulars

1.Portfolio

Diversification

Mutual Funds invest in a well-diversified portfolio of

securities which enables investor to hold a diversified

investment portfolio (whether the amount of

investment is big or small).

2.Professional

Management

Fund manager undergoes through various research

works and has better investment management skills

which ensure higher returns to the investor than what

he can manage on his own.

3. Less Risk

Investors acquire a diversified portfolio of securities

even with a small investment in a Mutual Fund. The

risk in a diversified portfolio is lesser than investing

in merely 2 or 3 securities.

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4. Low Transaction Costs

Due to the economies of scale (benefits of larger

volumes), mutual funds pay lesser transaction costs.

These benefits are passed on to the investors.

5. Liquidity

An investor may not be able to sell some of the

shares held by him very easily and quickly, whereas

units of a mutual fund are far more liquid.

6. Choice of Schemes

Mutual funds provide investors with various schemes

with different investment objectives. Investors have

the option of investing in a scheme having a

correlation between its investment objectives and

their own financial goals. These schemes further

have different plans/options

7. Transparency

Funds provide investors with updated information

pertaining to the markets and the schemes. All

material facts are disclosed to investors as required

by the regulator.

8. Flexibility

Investors also benefit from the convenience and

flexibility offered by Mutual Funds. Investors can

switch their holdings from a debt scheme to an equity

scheme and vice-versa. Option of systematic (at

regular intervals) investment and withdrawal is also

offered to the investors in most open-end schemes.

9. Safety

Mutual Fund industry is part of a well-regulated

investment environment where the interests of the

investors are protected by the regulator. All funds are

registered with SEBI and complete transparency is

forced.

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DISADVANTAGES OF MUTUAL FUND

S. No. Disadvantage Particulars

1.

Costs Control Not in

the Hands of an

Investor

Investor has to pay investment management fees and

fund distribution costs as a percentage of the value of

his investments (as long as he holds the units),

irrespective of the performance of the fund.

2.No Customized

Portfolios

The portfolio of securities in which a fund invests is a

decision taken by the fund manager. Investors have

no right to interfere in the decision making process of

a fund manager, which some investors find as a

constraint in achieving their financial objectives.

3.

Difficulty in Selecting

a Suitable Fund

Scheme

Many investors find it difficult to select one option

from the plethora of funds/schemes/plans available.

For this, they may have to take advice from financial

planners in order to invest in the right fund to achieve

their objectives.

The following chart gives us operational flow of a Mutual Fund

MUTUAL

FUND

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ORGANIZATIONAL STRUCTURE OF MUTUAL FUNDS:

There are many entities involved and the diagram below illustrates the

organizational set up of a mutual fund:

Terms:

a. Unit Holders:

A Significant Unit holder means any entity holding 5% or more of the total

corpus of any Scheme managed by the member and includes all entities directly orindirectly controlled by such a unit holder.

b. Trustees:

A trustee means a member of the Board of Trustees or a director of the Trustee

Company.

c. Sponsors:

One that finances a project or an event carried out by another person or group.

d. Transfer Agent:

An agent employed by a corporation or mutual fund to

maintain shareholder records, including purchases, sales, and account balances.
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e. Custodian:

An entity, usually a bankor trust company,

which holds and safeguards securities owned by a mutual fund. Such an entity may

also act as a transfer agent.also called mutual fund corporation

f. AMC (Asset Management Company):

A company that invests its clients' pooled fund into securities that match its

declared financial objectives. Asset management companies provide investors with

more diversification and investing options than they would have by themselves.

g. The Mutual Fund:

Mutual fund is a trust that pools money from a group of investors (sharing common

financial goals) and invest the money thus collected into asset classes that match the

stated investment objectives of the scheme.

h. SEBI:

SEBI means Securities and Exchange Board of India.

ASSOCIATIONS OF MUTUAL FUNDS (AMFI) IN INDIA

The rapid increase in mutual fund players in India, a need for mutual fund

association in India was generated to function as a non-profit organization. Association of

Mutual Funds in India (AMFI) was incorporated on 22nd August, 1995.

AMFI is an apex body of all Asset Management Companies (AMC) which has been

registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes

are its members. It functions under the supervision and guidelines of its Board of Directors.

Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a

professional and healthy market with ethical lines enhancing and maintaining standards. It

follows the principle of both protecting and promoting the interests of mutual funds as well

as their unit holders.
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OBJECTIVES OF ASSOCIATION OF MUTUAL FUNDS (AMFI) IN

INDIA

The Association of Mutual Funds of India works with 30 registered AMCs of the

country. It has certain defined objectives which juxtaposes the guidelines of its Board ofDirectors. The objectives are as follows:

This mutual fund association of India maintains high professional and ethical

standards in all areas of operation of the industry.

It also recommends and promotes the top class business practices and code of

conduct which is followed by members and related people engaged in the activities

of mutual fund and asset management. The agencies who are by any means

connected or involved in the field of capital markets and financial services also

involved in this code of conduct of the association.

AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual

fund industry.

Association of Mutual Fund of India does represent the Government of India, the

Reserve Bankof India and other related bodies on matters relating to the Mutual

Fund Industry.

It develops a team of well qualified and trained Agent distributors. It implements a

programme of training and certification for all intermediaries and other engaged in

the mutual fund industry.

AMFI undertakes all India awareness programme for investors in order to promote

proper understanding of the concept and working of mutual funds.

At last but not the least association of mutual fund of India also disseminate

informations on Mutual Fund Industry and undertakes studies and research either

directly or in association with other bodies.
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MAJOR MUTUAL FUND COMPANIES IN INDIA

ABN AMRO Mutual Fund:

ABN AMRO Mutual Fund was setup on April 15, 2004 with ABN AMRO Trustee

(India) Pvt. Ltd. as the Trustee Company. The AMC, ABN AMRO Asset Management

(India) Ltd. was incorporated on November 4, 2003. Deutsche Bank A G is the custodian

of ABN AMRO Mutual Fund.

Birla Sun Life Mutual Fund:

Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun Life

Financial. Sun Life Financial is a global organization evolved in 1871 and is being

represented in Canada, the US, the Philippines, Japan, Indonesia and Bermuda apart from

India. Birla Sun Life Mutual Fund follows a conservative long-term approach to

investment. The AUM of the company is Rs. 57689.46 crores as at 28-feb.2011.

Bank of Baroda Mutual Fund (BOB Mutual Fund):

Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30, 1992

under the sponsorship of Bank of Baroda. BOB Asset Management Company Limited isthe AMC of BOB Mutual Fund and was incorporated on November 5, 1992. Deutsche

Bank AG is the custodian.

HDFC Mutual Fund:

HDFC Mutual Fund was setup on June 30, 2000 w ith two sponsors namely

Housing Development Finance Corporation Limited and Standard Life Investments

Limited. The net AUM of the company is Rs. 86635.55 crores as at 28-feb.2011.

HSBC Mutual Fund:

HSBC Mutual Fund was setup on May 27, 2002 with HSBC Securities and Capital

Markets (India) Private Limited as the sponsor. Board of Trustees, HSBC Mutual Fund acts

as the Trustee Company of HSBC Mutual Fund.
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ING Vysya Mutual Fund:

ING Vysya Mutual Fund was setup on February 11, 1999 with the same named

Trustee Company. It is a joint venture of Vysya and ING. The AMC, ING Investment

Management (India) Pvt. Ltd. was incorporated on April 6, 1998.

ICICI Prudential Mutual Fund:

The mutual fund of ICICI is a joint venture with Prudential Plc. of America, one of

the largest life insurance companies in the US of A. Prudential ICICI Mutual Fund was

setup on 13th of October, 1993 with two sponsors, Prudential Plc. and ICICI Ltd. The

Trustee Company formed is Prudential ICICI Trust Ltd. and the AMC is Prudential ICICI

Asset Management Company Limited incorporated on 22nd of June, 1993.

Sahara Mutual Fund:

Sahara Mutual Fund was set up on July 18, 1996 with Sahara India Financial

Corporation Ltd. as the sponsor. Sahara Asset Management Company Private Limited

incorporated on August 31, 1995 works as the AMC of Sahara Mutual Fund. The paid-up

capital of the AMC stands at Rs 25.8 crores.

State Bank of India Mutual Fund:State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch

offshore fund, the India Magnum Fund with a corpus of Rs. 225 cr. approximately. Today

it is the largest Bank sponsored Mutual Fund in India. They have already launched 38

Schemes out of which 15 have already yielded handsome returns to investors. State Bank

of India Mutual Fund has more than Rs. 42,750.02 Crores as AUM As on February 2011.

Now it has an investor base of over 8 Lakhs spread over 18 schemes.

Tata Mutual Fund:

Tata Mutual Fund is a Trust under the Indian Trust Act, 1882. The sponsors for

Tata Mutual Fund are Tata Sons Ltd., and Tata Investment Corporation Ltd. The

investment manager is Tata Asset Management Limited and its Tata Trustee Company Pvt.

Limited. Tata Asset Management Limited's is one of the fastest in the country.
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Kotak Mahindra Mutual Fund:

Kotak Mahindra Asset Management Company (KMAMC) is a subsidiary of

KMBL. It is presently having more than 1, 99,818 investors in its various schemes.

KMAMC started its operations in December 1998. Kotak Mahindra Mutual Fund offers

schemes catering to investors with varying risk - return profiles. It was the first company to

launch dedicated gilt scheme investing only in government securities.

Unit Trust of India Mutual Fund:

UTI Asset Management Company Private Limited, established in Jan 14, 2003,

manages the UTI Mutual Fund with the support of UTI Trustee Company Private Limited.

UTI Asset Management Company presently manages a corpus of over Rs.20000 Crores.

The sponsors of UTI Mutual Fund are Bank of Baroda (BOB), Punjab National Bank

(PNB), State Bank of India (SBI), and Life Insurance Corporation of India (LIC). The

schemes of UTI Mutual Fund are Liquid Funds, Income Funds, Asset Management Funds,

Index Funds, Equity Funds and Balance Funds.

Reliance Mutual Fund:

Reliance Mutual Fund (RMF) was established as trust under Indian Trusts Act,

1882. The sponsor of RMF is Reliance Capital Limited and Reliance Capital Trustee Co.

Limited is the Trustee. It was registered on June 30, 1995 as Reliance Capital Mutual Fund

which was changed on March 11, 2004. Reliance Mutual Fund was formed for launching

of various schemes under which units are issued to the Public with a view to contribute to

the capital market and to provide investors the opportunities to make investments in

diversified securities.

Standard Chartered Mutual Fund:Standard Chartered Mutual Fund was set up on March 13, 2000 sponsored by

Standard Chartered Bank. The Trustee is Standard Chartered Trustee Company Pvt. Ltd.

Standard Chartered Asset Management Company Pvt. Ltd. is the AMC which was

incorporated with SEBI on December 20, 1999.
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Franklin Templeton India Mutual Fund:

The group, Franklin Templeton Investments is a California (USA) based company

with a global AUM of US$ 409.2 bn. (as of April 30, 2005). It is one of the

largest financial services groups in the world. Investors can buy or sell the Mutual Fund

through their financial advisor or through mail or through their website. They have Open

end Diversified Equity schemes, Open end Sector Equity schemes, Open end Hybrid

schemes, Open end Tax Saving schemes, Open end Income and Liquid schemes, Closed

end Income schemes and Open end Fund of Funds schemes to offer.

Morgan Stanley Mutual Fund India:

Morgan Stanley is a worldwide financial services company and its leading in the

market in securities, investment management and credit services. Morgan Stanley

Investment Management (MISM) was established in the year 1975. It provides customized

asset management services and products to governments, corporations, pension funds and

non-profit organizations. Its services are also extended to high net worth individuals and

retail investors. In India it is known as Morgan Stanley Investment Management Private

Limited (MSIM India) and its AMC is Morgan Stanley Mutual Fund (MSMF). This is the

first close end diversified equity scheme serving the needs of Indian retail investors

focusing on a long-term capital appreciation.

Escorts Mutual Fund:

Escorts Mutual Fund was setup on April 15, 1996 with Escorts Finance Limited as

its sponsor. The Trustee Company is Escorts Investment Trust Limited. Its AMC was

incorporated on December 1, 1995 with the name Escorts Asset Management Limited.

Alliance Capital Mutual Fund:Alliance Capital Mutual Fund was setup on December 30, 1994 with Alliance

Capital Management Corp. of Delaware (USA) as sponsor. The Trustee is ACAM Trust

Company Pvt. Ltd. and AMC, the Alliance Capital Asset Management India (Pvt) Ltd. with

the corporate office in Mumbai.
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Benchmark Mutual Fund:

Benchmark Mutual Fund was setup on June 12, 2001 with Niche Financial Services

Pvt. Ltd. as the sponsor and Benchmark Trustee Company Pvt. Ltd. as the Trustee

Company. Incorporated on October 16, 2000 and headquartered in Mumbai, Benchmark

Asset Management Company Pvt. Ltd. is the AMC.

Canbank Mutual Fund:

Canbank Mutual Fund was setup on December 19, 1987 with Canara Bank acting

as the sponsor. Canbank Investment Management Services Ltd. incorporated on March 2,

1993 is the AMC. The Corporate Office of the AMC is in Mumbai.

Chola Mutual Fund:

Chola Mutual Fund under the sponsorship of Cholamandalam Investment &

Finance Company Ltd. was setup on January 3, 1997. Cholamandalam Trustee Co. Ltd. is

the Trustee Company and AMC is Cholamandalam AMC Limited.

LIC Mutual Fund:

Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989. It

contributed Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was constituted

as a Trust in accordance with the provisions of the Indian Trust Act, 1882. . The Company

started its business on 29th April 1994. The Trustees of LIC Mutual Fund have appointed

Jeevan Bima Sahayog Asset Management Company Ltd as the Investment Managers for

LIC Mutual Fund.

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STATUTORY REGULATIONS:

There is an association called Associations of Mutual Funds in India (AMFI) where all the

mutual fund companies are members. Mutual funds in India are governed by the Securities

Exchange Board of India (SEBI) mutual fund regulations since 1996 as amended from time

to time. It is a non-profit organization committed to develop the Indian Mutual Fund

Industry on professional, healthy and ethical lines and to enhance and maintain standards in

all areas with a view to protecting and promoting the interests of Mutual Funds and their

unit holders. Mutual Fund both conceptually and operationally is different from other

savings instruments. Mutual Funds invest in instruments of capital markets which have

different risk-return profile. It is very necessary that the investors understand properly the

conceptual framework of Mutual Fund and its operational features. AMFI therefore thought

it appropriate to produce a booklet in the form of an investors concise guide that will

explain in simple language the concept and working of Mutual Funds. All the mutual funds

must get registered with SEBI. The only exception is the UTI, since it is a corporation

formed under a separate Act of Parliament. The main statutory regulations protecting the

interest of the investors are as follows:

On the basis of performance of the mutual funds the investors should decide when to

enter / exit from a mutual fund scheme.

Mutual funds are required to send annual report or abridged annual report to the unit

holders at the end of the year.

In case the complaints are not solved by the trustees of the mutual fund, the investors

can approach SEBI for redressal of their complaints / grievances.

The government has taken sufficient initiatives through SEBI to safeguard the interest

of the individual investors who have invested in mutual fund schemes.

Members shall not, in respect of any securities, be party to-

i.

Creating a false market,ii. Price rigging or manipulation

iii. Passing of price sensitive information to brokers, Members of stock exchanges and

other players in the capital markets or take action which is unethical or unfair to

investors.

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FREQUENTLY USED TERMS:

Net Asset Value (NAV)

Net Asset Value is the market value of the assets of the scheme minus its liabilities. The

per unit NAV is the net asset value of the scheme divided by the number of units

outstanding on the Valuation Date.

Sale Price.

is the price you pay when you invest in a scheme. Also called Offer Price. It may

include a sales load.

Repurchase Price

Is the price at which a close-ended scheme repurchases its units and it may include a

back-end load. This is also called Bid Price.

Redemption Price

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

schemes redeem their units on maturity. Such prices are NAV related.

Sales Load

Is a charge collected by a scheme when it sells the units. Also called, Front-end load.

Schemes that do not charge a load are called No Load schemes.

Repurchase or Back-end LoadIs a charge collected by a scheme when it buys back the units from the unit holders
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SBI MUTUAL FUND:

SBI Mutual Fund is Indias largest bank sponsored

mutual fund and has an enviable track record in judicious

investments and consistent wealth creation.

The fund traces its lineage to State Bank of India (SBI)

Indias largest banking enterprise. The institution has grown

immensely since its inception and today it is Indias largest

bank, patronised by over 80% of the top corporate houses of

the country.

SBI Mutual Fund is a joint venture between the State Bank of India and Socit

Gnrale Asset Management, one of the worlds leading fund management

companies that manages over US$ 500 Billion worldwide.

In twenty years of operation, the fund has launched 38 schemes and successfully

redeemed fifteen of them. In the process it has rewarded its investors handsomely with

consistent returns. A total of over 5.8 million investors have reposed their faith in the

wealth generation expertise of the Mutual Fund.

Schemes of the Mutual fund have consistently outperformed benchmark indices and

have emerged as the preferred investment for millions of investors and HNIs. Today, the

fund manages over Rs. 41497.86 crores of assets and has a diverse profile of investors

actively parking their investments across 38 active schemes. (As on December 2010).

The fund serves this vast family of investors by reaching out to them through

network of over 130 points of acceptance, 28 investor service centers, 46 investor service

desks and 56 district organisers.

SBI Mutual Fund (SBIMF) has been the proud recipient of the ICRA Online Award

8 times, CNBC TV18 Crisil Award 20064 Awards, The Lipper Award (Year 2005-

2006) and most recently with the CNBC TV 18 Crisil Mutual Fund of the Year Award

2007 and 5 Awards for its schemes.

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Sponsors of SBI mutual fund:

State Bank of India (SBI):

SBI is the largest state-owned banking and financial services company in India. The

bank traces its ancestry to British India, through the Imperial Bank of India, to the founding

in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian

Subcontinent. Bank of Madras merged into the other two presidency banks, Bank of

Calcutta and Bank of Bombay to form Imperial Bank of India, which in turn became State

Bank of India. The government of India nationalized the Imperial Bank of India in 1955,

with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India.

In 2008, the government took over the stake held by the Reserve Bank of India.

SBI provides a range of banking products through its vast network of branches in

India and overseas, including products aimed at non-resident Indians (NRIs). The State

Bank Group, with over 16,000 branches, has the largest banking branch network in India.

With an asset base of $352 billion and $285 billion in deposits, it is a regional banking

behemoth. It has a market share among Indian commercial banks of about 20% in deposits

and advances, and SBI accounts for almost one-fifth of the nation's loans.

The State Bank of India is the 29th most reputed company in the world according to

Forbes.Also SBI is the only bank to get featured in the coveted "top 10 brands of India" list

in an annual survey conducted by Brand Finance and The Economic Times in 2010.

The State Bank of India is the largest of the Big Four Banks of India, along with

ICICI Bank, Punjab National Bankand Canara Bankits main competitors.

societe generale:

SocGen is a major European financial services company which also has a

substantial global presence. Its registered office is on Boulevard Haussmann in the 9th

arrondissement of Paris, while its head office is in the Tours Socit Gnrale in the
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business district of La Dfense in the city of Nanterre, west of Paris. The three main

divisions are Retail Banking & Specialized Financial Services (particularly in France and

Eastern Europe), Corporate and Investment Banking (Derivatives, Structured Finance and

Euro Capital Markets) and Global Investment Management & Services.

Societe generale is one of the oldest banks in France. The original name was

Societe generale pour favoriser le dveloppement du commerce et de l'industrie en France

(English: General Company to Support the Development of Commerce and Industry in

France). Socit Gnrale is often nicknamed SocGen in the international financial world.

Vision:

To reach out to the smallest of the small investor and provide them with alternateinvestment options to help achieve their financial goals.

Mission:

Group with world class standards and significant global business commitment to

excellence in customer, shareholders and employees satisfaction and to play a leading role

in the expanding and diversifying financial services sector.

Values:

Excellence in customer service.

Profit orientation.

Belonging and commitment to the industry.

Fairness in all dealing and relations

Risk taking and innovation.
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Fund details:

Mutual Fund : SBI Mutual Fund

Setup Date : Jun-29-1987

Incorporation Date : Feb-07-1992

Sponsor : State Bank of India

Trustee : SBI Mutual Fund Trustee Company Private Limited

Chairman : N.A

CEO / MD : Mr. Achal Kumar Gupta

CIO : Mr. Navneet Munot

Compliance Officer : Ms. Vinaya Datar

Investor Service Officer : Mr. C A Santosh

Assets Managed : Rs. 41497.86 crore (Dec-31-2010)

Ownership Pattern : domestic- 63%, foreign- 37%

Equity Funds (Open End) : 17

Debt Funds (Open End) : 19

Short-term Debt (Open End) : none

Hybrid Funds (Open End) : 07

Closed-end Funds : 22

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Products of SBI Mutual Funds

i. Equity schemes:

Magnum comma fund

Magnum global fund

Magnum index fund

Magnum midcap fund

Magnum multicap fund

Magnum sector funds umbrella

SBI arbitrage opportunities fund

SBI blue chip fund

SBI one India fund

SBI tax advantage fund - series i

ii. Debt scheme:

Magnum Children`s Benefit Plan

Magnum Gilt Fund

Magnum Income Fund

Magnum Income Plus Fund

Magnum Institutional Income Fund

Magnum Monthly Income Plan

Magnum Monthly Income Plan Floater

Magnum NRI Investment Fund

SBI Capital Protection Oriented FundS I

SBI Capital Protection Oriented Fund - S II

iii. Balanced scheme:

Magnum Balanced Fund

iv. Exchange traded scheme:

SBI Gold Exchange Traded Scheme
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Key personnel:

Mr. Achal K. Gupta

Managing Director & ChiefExecutive Officer

Mr. Didier Turpin

Dy. Chief Executive Officer

Mr. V. Anand

Executive Vice PresidentMr. K. T. Ravindran

Chief Operating Officer

Ms. Aparna NirgudeChief Risk Officer

Ms. Vinaya Datar

Company Secretary & ComplianceOfficer

Mr. Navneet Munot

Chief Investment Officer

Mr. R. S. Srinivas Jain

Chief Marketing Officer

Fund Managers - Equity:

R. Srinivasan (Senior Fund Manager)

Jayesh Shroff(Senior Fund Manager)

Dharmendra Grover (Joint Fund Manager)

Sohini Andani (Joint Fund Manager)

Fund Managers Fixed Income:

Sankar Chebiyyam (Senior Fund Manager)

Rajeev Radhakrishnan (Senior Fund Manager)
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HDFC MUTUAL FUND:

HDFC Asset Management Company Ltd (AMC)

was incorporated under the Companies Act, 1956, on

December 10, 1999, and was approved to act as an Asset

Management Company for the HDFC Mutual Fund by

SEBI vide its letter dated July 3, 2000.

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

HDFC Asset Management Company Limited to manage the Mutual Fund. The paid upcapital of the AMC is Rs. 25.161 crores. 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.

The AMC is also providing portfolio management / advisory services and such

activities are not in conflict with the activities of the Mutual Fund. The AMC has renewed

its registration from SEBI vide Registration No. - PM / INP000000506 dated December 21,

2009 to act as a Portfolio Manager under the SEBI (Portfolio Managers) Regulations, 1993.

The Certificate of Registration is valid from January 1, 2010 to December 31, 2012.

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

house in the country with consistent and above average fund performance across categories

since its incorporation on December 10, 1999. While our past experience does make us a

veteran, but when it comes to investments, we have never believed that the experience is

enough.

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Sponsors of HDFC mutual fund:

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 and consultancy. Of

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

around 11 lac borrowers, 9 lac depositors, 1.95 lac shareholders and about 25,000 deposit

agents, as at December 31, 2010.

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 fifteenth 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:

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$213.9 billion as at June 30, 2010 Standard Life

Investments Limited is one of the world's major investment companies, operating in the

UK, Canada, Hong Kong, China, Korea, Ireland and the USA, and is responsible for

investing money on behalf of five million retail and institutional clients worldwide.

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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 10th July 2006.

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. The company's current

holdings in UK equities account for approximately 1.8% of the market capitalisation of the

London Stock Exchange.

Vision:

To be a dominant player in the Indian mutual fund space recognized for its high

levels of ethical and professional conduct and a commitment towards enhancing investor

interest.

Mission:

The mission is to be "a World Class Indian mutual fund player", benchmarking

ourselves against international standards and best practices in terms of product offerings,

technology, service levels, risk management and audit & compliance.

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Objectives:

The objective is to build sound customer franchises across distinct businesses so as

to be a preferred provider of financial services for target retail and wholesale customer

segments, and to achieve a healthy growth in profitability, consistent with the Bank's risk

appetite. We are committed to do this while ensuring the highest levels of ethical standards,

professional integrity, corporate governance and regulatory compliance.

Achievements:

HDFC Asset Management Company (AMC) is the first AMC in India to have been

assigned the CRISIL Fund House Level 1 rating. This is its highest Fund Governance

and Process Quality Rating which reflects the highest governance levels and fund

management practices at HDFC AMC. It is the only fund house to have been assigned this

rating for third year in succession. Company was also awarded NDTV Profit Business

Leadership Award 2009 in the Mutual Funds Category for the period April 1, 2008 to

March 31, 2009 from amongst six nominees in the category. NDTV Profit Business

Leadership Awards have been instituted to honour organization excellence and promise to

acknowledge the best, the brightest and the most dynamic of Indian organizations that have

emerged as leaders in their respective verticals and are taking India to economic

superpower status. The objective of the Awards is to salute men and women who fuelIndias journey to the forefront of the World Economy. Grand Thornton India are the

Business Process Advisors to the Awards instituted by NDTV Profit.

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.

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Fund details:

Mutual Fund : HDFC Mutual Fund

Setup Date : Jun-30-2000

Incorporation Date : Dec-10-1999

Sponsor : Housing Development Finance Corporation Limited

Standard Life Investments Limited

Trustee : HDFC Trustee Company Limited

Chairman : Mr. Deepak Parekh

CEO / MD : Mr. Milind Barve (Managing Director)

CIO : Mr. Prashant Jain

Compliance Officer : Mr. Yezdi Khariwala

Investor Service Officer : Mr. John Mathews

Assets Managed : Rs. 89383.09 crores (Dec-31-2010)

Ownership Pattern : domestic- 60%, foreign- 40%

Equity Funds (Open End) : 12

Debt Funds (Open End) : 24

Short-term Debt (Open End) : none

Hybrid Funds (Open End) : 10

Closed-end Funds : 32

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Products of HDFC Mutual Funds

i. Equity / Growth Fund:

HDFC Mid-Cap Opportunities Fund

HDFC TaxSaver (ELSS)

HDFC Index Fund - Sensex Plus Plan

HDFC Arbitrage Fund

HDFC Capital Builder Fund

HDFC Equity Fund

HDFC Infrastructure Fund

HDFC Balanced Fund

HDFC Top 200 Fund

HDFC Growth Fund

ii. Debt/ Income Fund:

HDFC Debt Fund for Cancer Cure

HDFC Medium Term Opportunities Fund

HDFC Short Term Opportunities Fund

HDFC Gilt Fund - Long Term Plan

HDFC High Interest Fund - Short Term Plan

HDFC Income Fund

HDFC Short Term Plan

HDFC Multiple Yield Fund

HDFC Cash Management Fund

HDFC High Interest Fund

iii. Exchange Traded Funds:

HDFC Gold Exchange Traded Fund

iv. Quarterly Interval Fund:

HDFC Quarterly Interval Fund

v. Children's Gift Fund:

HDFC Children's Gift Fund - Savings Plan

HDFC Children's Gift Fund- Investment Plan

vi. Liquid Funds:

HDFC Cash Management Fund - Savings Plan

HDFC Cash Management Fund - Call Plan

HDFC Liquid Fund

HDFC Liquid Fund Premium Plan

HDFC Liquid Fund Premium Plus Plan

vii. Fixed Maturity Plan:

HDFC FMP 100D March 2011

HDFC FMP 370D March 2011
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BOARD OF DIRECTORS:

Mr. Deepak S. Parekh Mr. N. Keith SkeochChairman of the Board, Associate director on the Board

Mr. Keki M. Mistry Mr. James Aird

Associate director on the Board associate director on the Board

Dr. Deepak B. Phatak Mr. Hoshang S. Billimoria

Independent Director on the Board Independent Director on the Board

Mr. Vijay Merchant Mr. Milind Barve

Independent Director on the Board Managing Director of the AMC

FUND MANAGERS:

Mr. Prashant Jain (Executive Director & Chief Investment Officer)

Mr. Shobhit Mehrotra (Senior Fund Manager and Head of Credit)

Mr. Anil Bamboli (Senior Fund Manager)

Mr. Anand Laddha (Senior Fund Manager)

Mr. Srinivas Rao Ravuri (Senior Fund Manager)
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BIRLA SUN LIFE MUTUAL FUND:

Birla Sun Life Asset Management Company Ltd.

(BSLAMC), the investment managers of Birla Sun Life

Mutual Fund, is a joint venture between the Aditya Birla

Group and the Sun Life Financial Services Inc. of

Canada. The joint venture brings together the Aditya

Birla Group's experience in the Indian market and Sun

Life's global experience.

Established in 1994, Birla Sun Life Mutual fund has emerged as one of India's

leading flagships of Mutual Funds business managing assets of a large investor base. Our

solutions offer a range of investment options, including diversified and sector specific

equity schemes, fund of fund schemes, hybrid and monthly income funds, a wide range of

debt and treasury products and offshore funds.

Birla Sun Life Asset Management Company has one of the largest team of research

analysts in the industry, dedicated to tracking down the best companies to invest in.

BSLAMC strives to provide transparent, ethical and research-based investments and wealth

management services.

Sponsors of BIRLA SUN LIFE mutual fund:

The Aditya Birla Group:

The Aditya Birla Group is one of India's largest business houses. Global in vision,

rooted in Indian values, the Group is driven by a performance ethic pegged on value

creation for its multiple stakeholders.

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The Group operates in 26 countries India, UK, Germany, Hungary, Brazil, Italy,

France, Luxembourg, Switzerland, Australia, USA, Canada, Egypt, China, Thailand, Laos,

Indonesia, Philippines, UAE, Singapore, Myanmar, Bangladesh, Vietnam, Malaysia,

Bahrain and Korea.

A US $29 billion corporation in the League of Fortune 500, the Aditya Birla Group

is anchored by an extraordinary work force of 130,000 employees, belonging to 40

different nationalities. Over 60 per cent of its revenues flow from its op

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