Professional Documents
Culture Documents
MUTUAL
FUNDS
(WithspecialreferencetoHDFCmutualfund)
AProjectreportsubmittedto
YMCAUniversityofscienceandtechnology,Faridabad,
InpartialfulfillmentoftherequirementsfortheawardoftheDegreeof
MASTEROFBUSINESSADMINISTRATION
SubmittedBy:
PAYALGARG
Reg.No.
UndertheGuidanceof
AssociateProfessor
DepartmentofManagementStudies
YMCAUniversityofscienceandtechnology,Faridabad
20142016
CERTIFICATE
This iscertifythattheprojectentitledASTUDYOFINVESTMENT
PREFERENCE IN MUTUAL FUNDS has been submitted by Miss. Payal Garg
(Reg.No.) inpartialfulfillmentoftherequirementsfortheawardofMasterofBusiness
AdministrationfromYMCAUniversityofscienceandtechnology,Faridabad.Theresults
embodiedintheprojecthavenotbeensubmittedtoanyotherUniversityorInstitutionfor
theawardofanyDegreeorDiploma.
Dr.NAVDEEPMALHOTRA
(InternalGuide)
Professor&HOD
DepartmentofManagementStudiesDepartment of ManagementStudies
YMCAUST
YMCAUST
Mrs.RENUAGGARWAL
(ProjectCoordinator)
AssociateProfessor
DepartmentofManagementStudies
YMCAUST
DECLARATION
I hereby declare that the project entitle A SYUDY OF INVESTMENT
PREFERENCEINMUTUALFUNDSSubmittedinpartialfulfillmentofthe
requirementsforawardofthedegreeofMBAatYMCAUNIVERSITYOF
SCIENCEANDTECHNOLOGY,FARIDABAD,isanauthenticworkand
has not been submitted to any other University/Institute for award of any
degree/diploma.
PAYALGARG
MBA,YMCAUST
FARIDABAD
ACKNOWLEDGEMENT
Firstly I would like to express our immense gratitude towards our college, YMCA
University of science and technology, Faridabad, which created a great platform to
attainprofoundtechnicalskillsinthefieldofMBA,therebyfulfillingourmostcherished
goal.
IwouldthankallteammembersofHDFCMutualFund.SpeciallyMr.ABHISHEK
RAJPUT(RelationshipManager)andothertheemployeesinthefinancedepartmentfor
guidingmeandhelpingmeinsuccessfulcompletionoftheproject.0
IamverymuchthankfultoourprofessorMr.K.K.SunilKumarSir(InternalGuide)sir
forextendinghiscooperationindoingthisproject.
IamalsothankfultoourprojectcoordinatorMrs.RENUAGGARWALforextendinghis
cooperationincompletionofProject.
Iconveymythankstomybelovedparentsandmyfacultywhohelpedmedirectlyor
indirectlyinbringingthisprojectsuccessfully.
PAYAL GARG
(10241E0002)
ABSTRACT
Theaimofthestudyistoknowtheclearpictureinvolvedinmutualfundsandits
impactontheinvestorswhoareinterestedindifferenttypesofInvestmentsAvenue.
Thisriskanalysisandinvestorsperceptiononmutualfundmarkethasgiven
aclearideaoftradinginvolvedinrelationwithequities,futuresandoptions,incomparison
withotherinvestmentsexistinginthemarket.
RECOMMENDATIONS
Thisistorecommendthatallthepeoplewhoareinterestedininvestmentsshould
havethebasicideaaboutthetrendsinthemarket,andtheimpactofdecisionsonthe
market, which are given by business tycoons, and also the influence of political
involvementonthemarket.
CONTENTS
Chapter
01
INTRODUCTION
1.1
IMPORTANCEOFMUTUALFUNDS
1.2
NEED&IMPORTANCEOFSTUDY
1.3
DESIGNOFSTUDY
a.
StatementofProblem
b.
Objectives
c.
StudyMethodology
d.
231
DataAnalysis&Interpretation
e.
Limitation
Chapter
02
REVIEWOFLITERATURE
3436
Chapter
03
COMPANYPROFILE
3751
3.1
Profile
3.2
3.3
AMCSCSRInitiative
Chapter
04
DATAANALYSIS&INTERPRETATION
5273
Chapter
05
FINDINGS&SUGGESTIONS
7476
Chapter
06
BIBLIOGRAPHY
7778
Chapter
07
ANNEXURE
7986
INTRODUCT
ION
MUTUALFUNDS
Themutualfundisstructuredaroundafairlysimpleconcept,themitigationofrisk
throughthespreadingofinvestmentsacrossmultipleentities,whichisachievedbythe
poolingofanumberofsmallinvestmentsintoalargebucket.Yet,ithasbeenthesubjectof
perhapsthemostelaborateandprolongedregulatoryeffortinthehistoryofthecountry.
ThemutualfundindustryhasgrowntogiganticproportionsincountriesliketheUSA,in
Indiaitisstillinthephaseofinfancy.
TheoriginoftheIndianmutualfundindustrycanbetracedbackto1964whenthe
Indian Government, with a view to augment small savings within the country and to
channelofthesesavingstothecapitalmarkets,setuptheUnitTrustofIndia(UTI).The
UTIwassetupunderaspecificstatute,theUnitTrustofIndiaAct,1963.TheUnitTrustof
IndialauncheditsfirstopenendedequityschemecalledUnit64intheyear1964,which
turnedouttobeoneofthemostpopularmutualfundschemesinthecountry.In1987,the
government permitted other public sector banks and insurance companies to promote
mutualfundschemes.Pursuanttothisrelaxation,sixpublicsectorbanksandtwoinsurance
companiesVIZ.LifeInsuranceCorporationofIndiaandGeneralInsuranceCorporationof
Indialaunchedmutualfundschemesinthecountry.
SecuritiesExchangeBoardofIndia,betterknownasSEBI,formulatedtheMutual
Fund(Regulation)1993,whichforthefirsttimeestablishedacomprehensiveregulatory
frameworkforthemutualfundindustry.Thisprovedtobeaboonforthemutualfund
industryandsincethenseveralmutualfundshavebeensetupbytheprivatesectoraswell
asthejointsector.KothariPioneerMutualfundbecamethefirstfromtheprivatesectorto
establishamutualfundinassociationwithaforeignfund.Sincethenseveralprivatesector
companieshaveestablishedtheirownfundsinthecountry,makingmutualfundindustry
oneofthemostfollowedsectorbycriticsandinvestorsalike.Theshareofprivatesector
mutualfundstoohasgoneuprapidly.
Intheperiodbetween1963and1988,whentheUTIwasthesoleplayerinthe
industry,theassetsundermanagementgrewtoaboutRs.67billion.Inthesecondphase
between19881994,whenpublicsectorbanksandinsurancecompanieswereallowedto
launchmutualfundschemes,thetotalassetsinthemutualfundindustrygrewtoaboutRs.
610billionwiththetotalnumberofschemesincreasingto167bytheendof1994.The
thirdphaseofthemutualfundindustry,whichcommencedin1994,witnessedexponential
growthoftheindustry,withtheadventofprivateplayerstherein.AsonMay31,2004,the
totalassetsundermanagementstoodatRs.1540billionandthetotalnumberofschemes
stoodat399.
Duringthelastthreeandahalfdecades,UTIhasbeenadominantplayerinthe
mutualfundindustry.ThetotalassetsunderthemanagementoftheUTIasonSeptember
30,2002weretothetuneofRs.442billion,whichamounttoalmost41%ofthetotal
assetsundermanagementinthedomesticmutualfundindustry.UTIhaswitnessedsome
erosionofassetspursuanttothelastyearscrisisarisingonaccountofitsUnit64scheme,
theschemewithlargestamountofassetsundermanagement.Thiswasthefirstscheme
launchedbytheUTIwithasignificantequityexposureandthereturnsofwhichwasnot
linkedtothemarket.Thisresultedinapaymentcrisiswhenthestockmarketscrashed
duringthelasttwoyears,whichresultedinsomedegreeoflossofinvestorsconfidencein
UTIleadingtoerosionofitsassetsundermanagement.Thisperiodalsogaveopportunity
totheprivateplayerstodemonstratebetterreturnstherebycapturingasignificantmarket
share.
Whatevermayhavehappenedtomutualfundsinthepastandwhateveroneis
seeingnow,mutualfundsareheretostayaslongastheycandelivertheaspirationsoftheir
investors.OnemustnotforgetthatIndiaisalargenationwithapopulationofmorethan1
billionpeopleandthepotentialcontinuestobehuge.However,tobefairmutualfund
managersshouldalsostrivetoimprovetheirperformanceandnotblamethevagariesofthe
marketallthetimes.
HistoryoftheIndianMutualFundIndustry
ThemutualfundindustryinIndiastartedin1963withtheformationofUnitTrustofIndia,
attheinitiativeoftheGovernmentofIndiaandReserveBankofIndia.Thehistoryof
mutualfundsinIndiacanbebroadlydividedintofourdistinctphases
FirstPhase196487
UnitTrustofIndia(UTI)wasestablishedon1963byanActofParliament.Itwassetupby
theReserveBankofIndiaandfunctionedundertheRegulatoryandadministrativecontrol
oftheReserveBankofIndia.In1978UTIwasdelinkedfromtheRBIandtheIndustrial
DevelopmentBankofIndia(IDBI)tookovertheregulatoryandadministrativecontrolin
placeofRBI.ThefirstschemelaunchedbyUTIwasUnitScheme1964.Attheendof
1988UTIhadRs.6700croreofassetsundermanagement.
SecondPhase19871993(EntryofPublicSectorFunds)
Intheyear1987markedtheentryofnonUTI,publicsectormutualfundssetupbypublic
sector banks and Life Insurance Corporation of India (LIC) and General Insurance
Corporation of India (GIC). SBI Mutual Fund was the first non UTI Mutual Fund
establishedinJune1987followedbyCanbankMutualFund(Dec87),PunjabNational
BankMutualFund(Aug89),IndianBankMutualFund(Nov89),BankofIndia(Jun90),
BankofBarodaMutualFund(Oct92).LICestablisheditsmutualfundinJune1989while
GIChadsetupitsmutualfundinDecember1990.
ThirdPhase19932003(EntryofPrivateSectorFunds)
Withtheentryofprivatesectorfundsin1993,anew erastartedintheIndian
mutualfundindustry,givingtheIndianinvestorsawiderchoiceoffundfamilies.Also,
1993wastheyearinwhichthefirstMutualFundRegulationscameintobeing,under
whichallmutualfunds,exceptUTIweretoberegisteredandgoverned.Theerstwhile
KothariPioneer(nowmergedwithFranklinTempleton)wasthefirstprivatesectormutual
fundregisteredinJuly1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more
comprehensiveandrevisedMutualFundRegulationsin1996.Theindustrynowfunctions
undertheSEBI(MutualFund)Regulations1996.
Thenumberofmutualfundhouseswentonincreasing,withmanyforeignmutual
fundssettingupfundsinIndiaandalsotheindustryhaswitnessedseveralmergersand
acquisitions.AsattheendofJanuary2003,therewere33mutualfundswithtotalassetsof
0.Rs.1,21,805crore. The Unit Trust of India with Rs.44541crore of assets under
managementwaswayaheadofothermutualfunds.
FourthPhasesinceFebruary2003
InFebruary2003,followingtherepealoftheUnitTrustofIndiaAct1963UTIwas
bifurcatedintotwoseparateentities.OneistheSpecifiedUndertakingoftheUnitTrustof
Indiawithassets undermanagementofRs.29,835croreasattheendofJanuary2003,
representingbroadly,theassetsofUS64scheme,assuredreturnandcertainotherschemes.
TheSpecifiedUndertakingofUnitTrustofIndia,functioningunderanadministratorand
undertherulesframedbyGovernmentofIndiaanddoesnotcomeunderthepurviewof
theMutualFundRegulations.
ThesecondistheUTIMutualFundLtd,sponsoredbySBI,PNB,BOBandLIC.It
is registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcationoftheerstwhileUTIwhichhadinMarch2000morethanRs.76,000croreof
assetsundermanagementandwiththesettingupofaUTIMutualFund,conformingtothe
SEBIMutualFundRegulations,andwithrecentmergers takingplaceamongdifferent
privatesectorfunds,themutualfundindustryhasentereditscurrentphaseofconsolidation
andgrowth.AsattheendofOctober31,2003,therewere31funds,whichmanageassets
ofRs.1,26,726croreunder386schemes.
Thegraphindicatesthegrowthofassetsovertheyears.
GlobalScenarioofMutualFunds
ThemoneymarketmutualFundsegmenthasatotalcorpusof$1.48millioninthe
U.S.againstacorpusof$100millioninIndia.Outofthetop10MutualFundsworldwide,
8arebanksponsored.OnlyFidelity&capitalarenonbankMutualFundsinthisgroup.In
U.S.thetotalnumberofschemesishigherthanthatofthelistedcompanieswhileinIndia
wehavejust277Schemes.
Internationally,MutualFundsareallowedtogoshort.InIndiafundmanagersdo
nothavesuchleeway.Inabout9.7millionhouseholdswillmanagetheirassetsonline.By
theyear2004,suchafacilityisnotavailableinIndia.Onlinetradingisagreatideato
reducemanagementexpensesfromthecurrent2%oftotalassetstoabout0.75%ofthe
totalassets.Around72%ofthecorecustomerbaseofMutualFundsinthetop50broking
firmsintheU.S.isexpectedtotradeonline.
TheIndianMutualFundIndustryisdominatedbytheUTI,whichhasatotalcorpus
ofRs.700billion,collectedfromover200millioninvestors.The2 nd largestcategoryof
MutualFundsistheonesfloatedbythenationalizedbanks.Canbankassetmanagement
floatedbyCanaraBank&S.B.I.FundManagementfloatedbyS.B.I.arethelargestof
these.TheaggregatecorpusofthefundsmanagedbythiscategoryofAssetManagement
CompaniesisaroundRs.150billionamongtheprivateplayersthelargestareBirlaCapital
Asset Management Company & Prudential ICICI Asset Management Company. The
aggregatecorpusoftheassetmanagedbythiscategoryofAssetManagementcompaniesis
aboutRs.60billion.
FUNDBASICS
AMutualFundisatrustthatpoolsthesavingsofanumberofinvestorswhoshare
acommonfinancialgoal.Themoneythuscollectedisinvestedbythefundmanagerin
differenttypesofsecuritiesdependingupontheobjectiveofthescheme.Thesecouldrange
fromsharestodebenturestomoneymarketinstruments.Theincomeearnedthroughthese
investmentsandthecapitalappreciationrealizedbytheschemeissharedbyitsunitholders
inproportiontothenumberofunitsownedbythem.ThusaMutualFundisthemost
suitable investment for the common man as it offers an opportunity to invest in a
diversified,professionallymanagedportfolioatarelativelylowcost.Thesmallsavingsof
alltheinvestors areputtogethertoincreasethebuyingpowerandhireaprofessional
managertoinvestandmonitorthemoney.Anybodywithaninvestiblesurplusofaslittle
asafewthousandrupeescaninvestinMutualFunds.EachMutualFundschemehasa
definedinvestmentobjectiveandstrategy.
StructureofaMutualFund
Amutualfundissetupintheformofatrust,whichhasSponsor,Trustees,Asset
ManagementCompany(AMC)andaCustodian.Thetrustisestablishedbyasponsoror
morethanonesponsorwhoislikeapromoterofacompany.Thetrusteesofthemutual
fundholditspropertyforthebenefitoftheunitholders.TheAMC,approvedbySEBI,
managesthefundsbymakinginvestmentsinvarioustypesofsecurities.Thecustodian,
whoisregisteredwithSEBI,holdsthesecuritiesofvariousschemesofthefundinits
custody.Thetrusteesarevestedwiththegeneralpowerofsuperintendenceanddirection
overAMC.TheymonitortheperformanceandcomplianceofSEBIRegulationsbythe
mutualfund.
AtypicalmutualfundstructureinIndiacanbegraphicallyrepresentedasfollows
Sponsor:
Thesponsorisrequired,undertheprovisionsoftheMutualFundRegulations,to
have a sound track record, a reputation of fairness and integrity in all his business
transactions.Additionally,thesponsorshouldcontributeatleast40%tothenetworthof
theAMC.However,ifanypersonholds40%ormoreofthenetworthofanAMCshallbe
deemedtobeasponsorandwillberequiredtofulfilltheeligibilitycriteriaspecifiedinthe
Mutual Fund Regulations. The sponsor or any of its directors or the principal officer
employedbythemutualfundshouldnotbeguiltyoffraud,notbeconvictedofanoffence
involvingmoralturpitudeorshouldhavenotbeenfoundguiltyofanyeconomicoffence.
Trustees:
ThemutualfundisrequiredtohaveanindependentBoardofTrustees, I.e.two
thirds of the trustees should be independent persons who are not associated with the
sponsorsinanymannerwhatsoever.AnAMCoranyofitsofficersoremployeesarenot
eligibletoactasatrusteeofanymutualfund.Incaseacompanyisappointedasatrustee,
thenitsdirectorscanactastrusteesofanyothertrustprovidedthattheobjectofsuchother
trustisnotinconflictwiththeobjectofthemutualfund.Additionally,nopersonwhois
appointedasatrusteeofamutualfundcanbeappointedasatrusteeofanyothermutual
fundunlessheisanindependenttrusteeandpriorapprovalofthemutualfundofwhichhe
isatrusteehasbeenobtainedforsuchanappointment.
INTER ALIA
launch of any scheme. It is also the responsibility of the trustees to ensure that the AMC
does not act in a manner that is favorable to its associates such that it has a detrimental
impact on the unit holders, or that the management of one scheme by the AMC does not
compromise the management of another scheme. The trustees are also required to ensure
that an AMC has been diligent in empanelling and monitoring any securities transactions
with brokers, so as to avoid any undue concentration of business with any broker. The
Mutual Fund Regulations further mandates that the trustees should prevent any
conflictsofinterestbetweentheAMCandtheunitholdersintermsofdeploymentofnet
worth.
AssetManagementCompany:
ThesponsororthetrusteesarerequiredtoappointanAMCtomanagetheassetsof
themutualfund.UndertheMutualFundRegulations,theapplicantmustsatisfycertain
eligibilitycriteriainordertoqualifytoregisterwithSEBIasanAMC
Thesponsormusthaveatleast40%stakeintheAMC
TheAMCshouldhaveandmustatalltimesmaintain,aminimumnetworthofRs.
10Crore
The board of directors of such AMC has at least 50% directors, who are not
associatesoforassociatedinanymannerwith,thesponsororanyofitssubsidiariesorthe
trustees
TheChairmanoftheAMCisnotatrusteeofanymutualfund.
In addition to the above eligibility criteria and other ongoing compliance
requirementslaiddownintheMutualFundRegulations,theAMCisrequiredtoobserve
thefollowingrestrictionsinitsnormalcourseofbusiness.AnydirectoroftheAMCcannot
holdofficeofadirectorinanotherAMCunlesssuchpersonisanindependentdirectorand
the approval of the board of the AMC of which such person is a director, has been
obtained; the AMC shall not act as a trustee of any mutual fund; the AMC cannot
undertake any other business activities except activities in the nature of portfolio
managementservices,managementandadvisoryservicestooffshorefunds,pensionfunds,
providentfunds,venturecapitalfunds,managementofinsurancefunds,financial
Consultancyandexchangeofresearchoncommercialbasisifanyofsuchactivitiesarenot
inconflictwiththeactivitiesofthemutualfund.
Custodian:
The mutual fund is required, under the Mutual Fund Regulations, to appoint a
custodiantocarryoutthecustodialservicesfortheschemesofthefund.Onlyinstitutions
withsubstantialorganizationalstrength,servicecapabilityintermsofcomputerization,and
otherinfrastructurefacilities areapprovedtoactascustodians.Thecustodianmustbe
totallydelinkedfromtheAMCandmustberegisteredwithSEBI.UndertheSecurities
and Exchange Board of India (Custodian of Securities) Guidelines, 1996, any person
proposingtocarryonthebusinessasacustodianofsecuritiesmustregisterwiththeSEBI
andisrequiredtofulfillspecifiedeligibilitycriteria.Additionally,acustodianinwhichthe
sponsororitsassociatesholds50%ormoreofthevotingrightsofthesharecapitalofthe
custodianorwhere50%ormoreofthedirectorsofthecustodianrepresenttheinterestof
thesponsororitsassociatescannotactascustodianforamutualfundconstitutedbythe
samesponsororanyofitsassociateorsubsidiarycompany.
AssociationofMutualFundsinIndia(AMFI)
AssociationofMutualFundsinIndia(AMFI)isanapexbodyofassetmanagement
companiesoftheMutualFundregisteredinIndia.ItwasincorporatedontheAugust22,
1995asanonprofitmakingorganization.ItisdedicatedtodevelopingtheIndianMutual
Fundindustryonprofessional,healthyðicallines&toenhanceandmaintainstandards
inallareaswithaviewtoprotecting&promotingtheinterestsofMutualFunds&their
unitholders.
OBJECTIVES
Torecommend&implementhealthybusinesspractices,ethicalcodeofconduct,
standardprinciples&practicestobefollowedbythemembersofthecompany&
othersengagedintheactivitiesofMutualFunds&AssetManagementincluding
agenciesconnectedorinvolvedinthefieldofcapitalMarkets&financialServices.
Topromotehighstandardsofcommercialhonor&encourage&promoteamong
members&otherstheobservanceofsecuritieslawsincludingregulations&
directivesissuedbySecurities&ExchangeBoardofIndia(SEBI)&functionin
thebestofinterestoftheinvestingpublic.
Tohelpinsettingupprofessionalstandardsforprovidingefficientservices&
establishingstandardpracticesforMutualFund&AssetManagement
activities.
TobringaboutbettercoordinationinthefieldofMutualFunds&Asset
ManagementIndustry.
Topromote&developsound,progressive&dynamicprinciples,practices&
conventionsintheactivitiesofMutualFund&AssetManagement.
Torenderassistance&providecommonservices&utilitiestothepersonsengaged
inthefieldofMutualFunds&AssetManagement.
ROLEOFMUTUALFUNDS
MutualFunds&FinancialMarket
In the process of development Indian mutual funds have emerged as strong
financialintermediaries&areplayingaveryimportantroleinbringingstabilitytothe
financialsystem&efficiencytoresourceallocation.MutualFundshaveopenednewvistas
toinvestors&impartedamuchneededliquiditytothesystem.Intheprocesstheyhave
challenged the hitherto role of commercial banks in the financial market & national
economy.
MutualFund&CapitalMarket
TheactiveinvolvementofMutualFundsinpromotingeconomicdevelopmentcan
beseennotonlyintermsoftheirparticipationinthesavingsmarketbutalsointheir
dominantpresenceinthemoney&capitalmarket.Adevelopedfinancialmarketiscritical
tooveralleconomicdevelopment,&MutualFunds playanactiveroleinpromotinga
healthycapitalmarket.TheassetholdingpatternofmutualfundsintheUSAindicatesthe
dominantroleofMutualFundsinthecapitalmarket&moneymarket.Moreoverthey
havealsorenderedcriticalsupporttosecuritiesmortgageloans&municipalbondmarket
intheUSA.IntheUSA,MutualFundsprovideveryactivesupporttothesecondarymarket
intermsofpurchaseofsecurities.
InvestorspreferencespatterninIndiahasundergoneatremendouschangeduring
recenttimes,alongwiththechangesintheshareoffinancialassetsinthetotalannual
savings.Indianinvestorshavemovedtowardsmoreliquid&growthorientedtradeable
instrumentslikesshares/debentures&unitsofMutualFunds.Theshiftisassetholding
patternofinvestorshasbeensignificantlyinfluencedbytheequity&unitculturewhile
the holders of company shares & debentures are concentrated in the urban areas,
small/mediuminvestorsinthesemiurban&ruralareasaretendingtowardsMutualFunds.
Mutual Funds in India have certainly created awareness among investors about equity
orientedinvestments&itsbenefits.
TypesofMutualFundSchemes
Thereare awidevarietyofMutual Fundschemes that catertoinvestors need,
whateveryourage,financialposition,risktoleranceandreturnexpectations.Whetheras
thefoundationofyourinvestmentprogramorasasupplement,MutualFundschemescan
helpyoumeetyourfinancialgoals.
ByStructureSchemescanbeclassifiedinto3types
OpenEndedSchemes
Thesedonothaveafixedmaturity.InvestorsdealdirectlywiththeMutualFundfor
theirinvestmentsandredemptions.Thekeyfeatureisliquidity.Theycanconvenientlybuy
andselltheirunitsatNetAssetValue("NAV")relatedprices.
CloseEndedSchemes
Schemesthathaveastipulatedmaturityperiod(rangingfrom2to15years)are
calledcloseendedschemes.Investorscaninvestdirectlyintheschemeatthetimeofthe
initial issue and thereafter they can buy or sell the units of the scheme on the stock
exchangeswheretheyarelisted.Themarketpriceatthestockexchangecouldvaryfrom
thescheme'sNAVonaccountofdemandandsupplysituation,unitholders'expectations
andothermarketfactors.Oneofthecharacteristicsofthecloseendedschemesisthatthey
aregenerallytradedatadiscounttoNAV;butclosertomaturity,thediscountnarrows.
Somecloseendedschemesgivethemanadditionaloptionofsellingtheirunitsdirectlyto
theMutualFundthroughperiodicrepurchaseatNAVrelatedprices.SEBIRegulations
ensurethatatleastoneofthetwoexitroutesisprovidedtotheinvestor.
IntervalSchemes
Thesecombinethefeaturesofopenendedandcloseendedschemes.Theymaybe
tradedonthestockexchangeormaybeopenforsaleorredemptionduringpredetermined
intervalsatNAVrelatedprices.
ByInvestmentObjective
Growth/EquitySchemes
Aimtoprovidecapitalappreciationoverthemediumtolongterm.Theseschemes
normallyinvestamajorityoftheirfundsinequitiesandarewillingtobearshortterm
decline in value for possible future appreciation. These schemes are not for investors
seekingregularincomeorneedingtheirmoneybackintheshortterm.
IncomeSchemes
Aimtoprovideregularandsteadyincometoinvestors.Theseschemesgenerally
invest in fixed income securities such as bonds and corporate debentures. Capital
appreciationinsuchschemesmaybelimited.
BalancedSchemes
Aimtoprovidebothgrowthandincomebyperiodicallydistributingapartofthe
incomeandcapitalgainstheyearn.Theyinvestinbothsharesandfixedincomesecurities
intheproportionindicatedintheirofferdocuments.Inarisingstockmarket,theNAVof
theseschemesmaynotnormallykeeppace,orfallequallywhenthemarketfalls.
MoneyMarketSchemes
Aimtoprovideeasyliquidity,preservationofcapitalandmoderateincome.These
schemesgenerallyinvestinsafer,shortterminstruments,suchastreasurybills,certificates
ofdeposit,commercialpaperandinterbankcallmoney.Returnsontheseschemesmay
fluctuate,dependingupontheinterestratesprevailinginthemarket.
TaxSavingSchemes
Theseschemesoffertaxrebatestotheinvestorsundertaxlawsasprescribedfrom
time to time. This is made possible because the Government offers tax incentives for
investmentinspecifiedavenues.Forexample:EquityLinkedSavingsSchemes(ELSS)
and Pension Schemes. Recent amendments to the Income Tax Act provide further
opportunitiestoinvestorstosavecapitalgainsbyinvestinginMutualFunds.Thedetailsof
suchtaxsavingsareprovidedintherelevantofferdocuments.
SpecialSchemes
Thiscategoryincludesindexschemesthatattempttoreplicatetheperformanceofa
particularindex,suchastheBSESENSEXortheNSE50,orindustryspecificschemes
(whichinvestinspecificindustries)orSECTORIALschemes(whichinvestexclu1sively
insegmentssuchas'A'Groupsharesorinitialpublicofferings).Indexfundschemesare
idealforinvestorswhoaresatisfiedwithareturnapproximatelyequaltothatofanindex.
Sector fund schemes are ideal for investors who have already decided to invest in a
particularsectororsegment.Keepinginmindthatanyoneschememaynotmeetallthe
investorsrequirementsforalltime
AdvantagesofMutualFund
ProfessionalManagement
Investorsavailtheservicesofexperiencedandskilledprofessionalswhoarebacked
byadedicatedinvestmentresearchteam,whichanalysestheperformanceandprospectsof
companiesandselectssuitableinvestmentstoachievetheobjectivesofthescheme.
Diversification
MutualFunds investinanumberofcompanies acrossabroadcrosssectionof
industriesandsectors.Thisdiversificationreducestheriskbecauseseldomdoallstocks
declareatthesametimeandinthesameproportion.Investorsachievethisdiversification
throughaMutualFundwithfarlessmoneythantheycandoontheirown.
ConvenientAdministration
InvestinginaMutualFundreducespaperworkandhelpstoavoidmanyproblems
suchasbaddeliveries,delayedpayments andunnecessaryfollow upwithbrokers and
companies.MutualFundssavetimeandmakeinvestingeasyandconvenient.
ReturnPotential
Overamediumtolongterm,MutualFundshavethepotentialtoprovideahigher
returnastheyinvestinadiversifiedbasketofselectedsecurities.
LowCosts
MutualFundsarearelativelylessexpensivewaytoinvestcomparedtodirectly
investinginthecapitalmarketsbecausethebenefitsofscaleinbrokerage,custodialand
otherfeestranslateintolowercostsforinvestors.
Liquidity
Inopenendedschemes,Investorscangettheirmoneybackpromptlyatnetasset
valuerelatedpricesfromtheMutualFunditself.Withcloseendedschemes,theycansell
theirunitsonastockexchangeattheprevailingmarketpriceoravailofthefacilityof
directrepurchaseatNAVrelatedprices whichsomecloseendedandintervalschemes
offerperiodically.
Transparency
Investorsgetregularinformationonthevalueoftheirinvestmentinadditionto
disclosureonthespecificinvestmentsmadebythescheme,theproportioninvestedineach
classofassetsandthefundmanager'sinvestmentstrategyandoutlook.
Flexibility
Throughfeaturessuchasregularinvestmentplans,regularwithdrawalplansand
dividend reinvestment plans, Investors can systematically invest or withdraw funds
accordingtotheirneedsandconvenience.
ChoiceofSchemes
MutualFundsofferafamilyofschemestosuitthevaryingneedsoveralifetimeof
theirInvestors.
WellRegulated
AllMutualFundsareregisteredwithSEBIandtheyfunctionwithintheprovisions
ofstrictregulationsdesignedtoprotecttheinterestsofinvestors.TheoperationsofMutual
FundsareregularlymonitoredbySEBI.
DisadvantagesofMutualFundInvestment
NoControlovercosts
Aninvestorinamutualfundhasnocontrolovertheoverallcostofinvesting.He
paysinvestmentmanagementfeesaslongasheremainswiththefund,albeitinreturnfor
theprofessionalmanagementandresearch.Feesareusuallypayableasapercentageofthe
valueofhisinvestments,whetherthefundvalueisrisingordeclining.
NoTailormadePortfolios
Investorswhoinvestontheirowncanbuildtheirownportfoliosofshares,bonds
andothersecurities.Investingthroughfundsmeanshedelegatesthisdecisiontothefund
managers.Theveryhighnetworthindividualsorlargecorporateinvestorsmayfindthisto
beaconstraintinachievingtheirobjectives.
Managingaportfoliooffunds
Availabilityofalargenumberoffundscanactuallymeantoomuchchoiceforthe
investor.Hemayagainneedadviceonhowtoselectafundtoachievehisobjective,quite
similartothesituationwhenhastoselectindividualsharesorbondstoinvestin.
RISKSOFINVESTINGINMUTUALFUNDS
Market/InterestRisk
Volatilityofpricesleadingtofloatingreturns
Largelymitigatedwithaholdingperiodofover6months
CreditRisk
Potentialdefaultofbondsontheportfolio
EquityRisk
Possibilityofthefundmanagernotabletomeetredemptions
PLAYERSINMUTUALFUNDINDUSTRY
S.
no.
AMC Name
AAUM
2662399.27
391506.34
351818.62
761660.83
2242702.05
3783799.59
75499.58
10
25359.63
11
12
13
14
15
16
734419.4
17
5171483.38
18
33122.97
19
34590.65
20
88178.34
21
717257.45
11975165.76
7044365.89
803789.5
16163414.98
824190.13
14855895.06
359026.93
22
1223079.64
23
1564079.17
24
4137784.87
25
2249669.81
26
931299.94
27
181771.67
28
211439.78
29
130200.41
30
31
230936
32
621774.78
33
34
35
2100909.47
36
37
7494223.67
38
39
40
2187461.11
41
42
415043.39
43
272647.44
44
57493.56
57542.95
13712383.95
14377.21
3375.91
2696830
9275061.17
118869032.3
NEEDANDIMPORTANCEOFSTUDY
Asmallinvestoristheonewhoisabletocorrectlyplan&decideinwhichprofitable
& safe instrument to invest. To lock up ones hard earned money in a savings banks
account is not enough to counter the monster of inflation. Using simple concepts of
diversification,powerofcompoundinterest,stablereturns&limitedexposuretoequity
investment,onecanmaximizehisreturnsoninvestments&multiplyonessavings.
Investment is a serious proposition one has to look into various factors before
decidingontheinstrumentsinwhichtoinvest.Tosaveisnotenough.Onemustinvest
wisely&getmaximumreturns.Onemustplaninvestmentinsuchawaythathisinvestment
objectives are satisfied. A sound investment is one which gives the investor reasonable
returnswithaproperprofitablemanagement
DifferentAvenuesofinvestment
OPTIONS
RETURN
RISK
LIQUIDITY
Savingsaccount
Verylow
Verylow
High
FixedDeposits
Low
Low
Low
DirectEquity
Volatile
Veryhigh
High
Insurance
Medium
Low
Low
Companyfixeddeposits
Low
High
Verylow
Debentures
Low
Medium
Medium
Bonds
Low
Low
Low
Mutualfunds
High
Medium
High
Postofficeschemes
Low
Low
Low
Governmentsecurities
Low
Low
Low
Realestate
High
High
Low
Currency
High
High
High
Bullion
Medium
High
Medium
This report gives the details about various investment objectives desired by an
investor,detailsabouttheconcept&workingofmutualfund.Thisreportalsocoversthe
differentplayersinMutualFundsanddifferentavenuesofinvestment&indetailabout
HDFCMUTUALFUNDS.
ObjectivesoftheStudy
Tostudythepreferenceofinvestorsintodaysscenario(lessriskandmorereturn).
Toassesstheriskofinvestors withreferencetodiversifiablerisk&
nondiversifiablerisk.
Tostudymarketpotentialityofmutualfundamonginvestors.
TostudywhethertheinvestorsareconsideringHDFCabetteroptionornot.
ResearchMethodology
Sourcesofdatacollection
Twosourcesofcollectingdatahasbeenemployedi.e.primarydataandsecondarydata
Primarydata
A questionnaire is used as a tool for the systematic collection of relevant
information. A well questionnaire consisting of simple questions has been prepared &
directedtotherespondents.(Questionnaireisattachedattheendoftheprojects)
Thequestionnairepreparedconsistsofclosedendedquestionswhich
includesmultiplechoice
Ratingscale
Thequestionnairealsoconsistsofopenendedquestions.
Thefirstsectionofquestionnaireispreparedmainlyforcollectingthepersonal
informationabouttherespondents.
Thesecondsectioncontainsmultiplechoicequestions.Itispreparedtocollectthe
informationaboutcustomerperception.
Thecloseendedquestionsareveryeasytoanswerfromthequestionnaire
respondedbytherespondents.
SecondaryData
Secondarydataiscollectedfromthecompanyswebsites,factsheetetc.
SamplingProcedure
Samplesize:200
Explorativeapproach:Thisapproachisoneofthemostpopularapproachesthesedays.
Inthisapproach,aproblemisdescribedbytheresearcherusingquestionnaireorschedule.
Thisapproachenablesaresearchertoexplorenewareasofinvestigation.
Researchinstrument:Questionnaire
Whichisusedtocollecttheprimarydatabypersonnelinterview
LIMITATIONSOFTHESTUDY
Muchinteractionhasnotbeenpossiblewiththecustomerdueto
1. Indifferenceoruninterestedofthecustomerstointeractwithme
2. Differentperceptionsabouttheinvestmentoptions
3. Thenonavailabilityoftimetothem
Manyinvestorsthinkmutualfundsandsharesaretheoneandsame.
REVIEW OF
LITERATURE
DEFNITIONOFMUTUALFUNDS
DEFNITION:
Amutualfund,alsoreferredtoasanopenendfund,isaninvestmentcompanythat
spreadsitsmoneyacrossadiversifiedportfolioofsecuritiesincludingstocks,bonds,or
moneymarketinstruments.
Shareholderswhoinvestinafundeachownarepresentativeportionofthose
investments,lessanyexpenseschargedbythefund.
Mutualfundinvestorsmakemoneyeitherbyreceivingdividendsandinterestfromtheir
investments,orbytheriseinvalueofthesecurities.Dividends,interestandprofitsfrom
thesaleofanysecurities(capitalgains)arepassedontotheshareholdersintheformof
distributions.Andshareholdersgenerallyareallowedtosell(redeem)theirsharesat
anytimefortheclosingmarketpriceofthefundonthatday.
DEFNITION:
Mutualfundshavebeenaroundforalongtime,datingbacktotheearly19thcentury.
ThefirstmodernAmericanmutualfundopenedin1924,yetitwasonlyinthe1990s
thatmutualfundsbecamemainstreaminvestments,asthenumberofhouseholdsowning
themnearlytripledduringthatdecade.Withrecentsurveysshowingthatover88%ofall
investorsparticipateinmutualfunds,you'reprobablyalreadyfamiliarwiththese
investments,orperhapsevenownsome.Inanycase,it'simportantthatyouknowexactly
howtheseinvestmentsworkandhowyoucanusethemtoyouradvantage.
Amutualfundisaspecialtypeofcompanythatpoolstogethermoneyfrommany
investorsandinvestsitonbehalfofthegroup,inaccordancewithastatedsetofobjectives.
Mutualfundsraisethemoneybysellingsharesofthefundtothepublicmuchlikeany
othercompanycansellstockinitselftothepublic.Fundsthentakethemoneytheyreceive
fromthesaleoftheirshares(alongwithanymoneymadefrompreviousinvestments)and
useittopurchasevariousinvestmentvehicles,suchasstocks,bondsandmoneymarket
instruments.Inreturnforthemoneytheygivetothefundwhenpurchasingshares,
shareholdersreceiveanequitypositioninthefundand,ineffect,ineachofitsunderlying
securities.Formostmutualfunds,shareholdersarefreetoselltheirsharesatanytime,
althoughthepriceofashareinamutualfundwillfluctuatedaily,dependinguponthe
performanceofthesecuritiesheldbythefund.
DEFNITION:
Amutualfundissimplyafinancialintermediarythatallowsagroupofinvestorstopool
theirmoneytogetherwithapredeterminedinvestmentobjective.Themutualfundwill
haveafundmanagerwhoisresponsibleforinvestingthepooledmoneyintospecific
securities(usuallystocksorbonds).Whenyouinvestinamutualfund,youarebuying
shares(orportions)ofthemutualfundandbecomeashareholderofthefund.
.
DEFNITION:
AnopenendedfundoperatedbyanInvestmentcompanywhichraisesmoneyfrom
shareholdersandinvestsinagroupofassets,inaccordancewithastatedsetofobjectives.
Mutualfundsraisemoneybysellingsharesofthefundtothepublic,muchlikeanyother
typeofcompanycansellstockinitselftothepublic.Mutualfundsthentakethemoney
theyreceivefromthesaleoftheirshares(alongwithanymoneymadefromprevious
investments)anduseittopurchasevariousinvestmentvehicles,suchasstocks,bondsand
moneymarketinstruments.Inreturnforthemoneytheygivetothefundwhenpurchasing
shares,shareholdersreceiveanequitypositioninthefundand,ineffect,ineachofits
underlyingsecurities.Formostmutualfunds,shareholdersarefreetoselltheirsharesat
anytime,althoughthepriceofashareinamutualfundwillfluctuatedaily,depending
upontheperformanceofthesecuritiesheldbythefund.Benefitsofmutualfundsinclude
diversificationandprofessionalmoneymanagement.Mutualfundsofferchoice,liquidity,
andconvenience,butchargefeesandoftenrequireaminimuminvestment.Aclosedend
fundisoftenincorrectlyreferredtoasamutualfund,butisactuallyaninvestmenttrust.
Therearemanytypesofmutualfunds,includingaggressivegrowthfund,asset
allocationfund,balancedfund,blendfund,bondfund,capitalappreciationfund,
clonefund,closedfund,crossoverfund,equityfund,fundoffunds,globalfund,
growthfund,growthandincomefund,hedgefund,incomefund,indexfund,
internationalfund,moneymarketfund,municipalbondfund,primeratefund,
regionalfund,sectorfund,specialtyfund,stockfund,andtaxfreebondfund.
DEFNITION:
A security that gives small investors access to a welldiversified portfolio of equities,
bondsandothersecurities.Eachshareholderparticipatesinthegainorlossofthefund.
Sharesareissuedandcanberedeemedasneeded
COMPANY
PROFILE
The equity shareholding pattern of the AMC as on March 31, 2014 is as follows:
Proposed
new
name
and type
of
scheme
Morgan
Stanley Change in Name and HDFC
Growth
Fund Fundamental
Large Cap
(Open Ended Equity Attributes
Fund
Fund)
(Openended
equity
scheme)
Morgan Stanley A.C.E Change in Name and HDFC
Fund
Fundamental
Small and
(Open Ended Across Attributes
Midcap
Capitalizations
Fund
Equity Fund)
(Openended
equity
scheme)
Morgan Stanley Gilt Change in Name and HDFC
Fund
Fundamental
Inflation
(Open
Ended
Gilt Attributes
Indexed
Fund)
Bond Fund
(Openended
income
scheme)
Morgan
Stanley Merger
HDFC
Liquid
Fund
Liquid
(Open Ended Liquid
Fund
Fund)
(Openended
liquid
income
scheme)
Morgan Stanley Ultra Merger
HDFC Cash
Short
Term
Bond
Manageme
Fund
nt Fund
(Open Ended Debt
Treasury
Fund)
Advantage
Plan
(Openended
income
scheme)
Morgan
Stanley Merger
HDFC High
Active
Bond
Fund
Interest
(Open Ended Debt
Fund
Fund)
Dynamic
Plan
(Openended
income
scheme)
Morgan Stanley Short Merger
HDFC
Term
Bond
Fund
Short Term
(Open Ended Debt
Plan*
Fund)
(Openended
income
scheme)
Morgan Stanley Multi Change in Name and HDFC
Asset
Fund Fundamental
Dynamic
(Plan A and Plan B) Attributes
PE
Ratio
(Open Ended Debt
Fund
of
Fund)
Funds**
(Openended
fund
of
funds
scheme)
HDFC Focused Large- Merger
HDFC
Cap
Fund
Equity
(Open Ended Equity
Fund
Scheme)
(Openended
equity
scheme)
New Name
HDFC TaxSaver
Former Name
New Name
HDFC
Fund
Cash
Management
TRUSTEES
HDFC 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.
SPONSORS
HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (HDFC)
HDFC Ltd. was incorporated in 1977 as the first specialized Mortgage
Company in India. HDFC provides financial assistance to individuals,
corporate 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 13.25lac borrowers, over 17.5lac depositors over
1.82lac shareholder and over 25,000 deposit agents, as at March 31,
2014.
As at March 31, 2014, HDFC had mortgage loan assets of Rs. 1971.00
billion. Since inception, HDFC has financed over 4.6 million housing units.
74% of shareholders in HDFC are foreign investors. HDFCs market
capitalization as at March 31, 2014 stood at approximately Rs 1379.35
billion.
HDFC's Borrowings consists of domestic term loans from banks and
insurance companies, bonds and retail deposits. HDFC has received the
highest rating for its bonds and deposits program for the Nineteenth year
in succession.
As part of HDFCs developmental initiatives, the company has set up
institutions in various fields including Banking, Insurance; Life and
General, Asset Management, Credit Rating, Consumer Finance, ITenabled services, Real Estate and Education Finance.
Over the years, the HDFC group has emerged as a strong financial
conglomerate in the Indian capital markets with a presence in banking,
life and general insurance, asset management and venture capital.
HDFCs key associate and subsidiary companies include HDFC Bank
Limited, HDFC Standard Life Insurance Company Limited, HDFC Ergo
General Insurance Company Limited, HDFC Asset Management Company
Limited, GRUH Finance Limited, HDFC Venture Capital Limited and Credila
Financial Services Limited.
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
CUSTODIAN
HDFC BANK LTD
CITI BANK
DEUTSCHE BANK
bonds,
property
Vision Statement
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.
(NGOs),
community
groups
and
others;
for
social/
Income Scheme, where the dividend received by the Investors from the
Schemes is donated to Indian Cancer Society (ISC) on behalf of the
Investors to Indian Cancer Cure Fund Project.
Indian Cancer Cure Fund Project falls under sub-clause (1) of Schedule VII
- Promotion of health care. HDFC AMC has agreed to contribute Rs.
5,00,00,000/- per annum for 3 years effective FY 2014-2015. In addition,
dividend received under the Scheme for the investment made by HDFC
AMC till the maturity of the Scheme i.e. 3 years effective FY 2014-2015.
CONSTRUCTION PROJECT OF SUPER SPECIALTY CHILDRENS
HOSPITAL -SRCC CHILDRENS HOSPITAL
Society for Rehabilitation of Crippled Childrens Hospital (SRCC) is a not
for profit organization with the objective of making a difference to child
healthcare in India. SRCC and Narayana Hrudayalaya have joined hands
to build a world class Multi Specialty Childrens Hospital in Mumbai which
will have 10% beds free for treatment of children from poor family and
60% beds at subsidized rates for treatment of children from under
privileged and middle class families.
HDFC AMC has partnered with SRCC under its CSR initiatives to enable
SRCC to build and set up a super-specialty childrens hospital to be called
SRCC Childrens Hospital. The Hospital will be constructed with
contributions received from various corporate including HDFCAMC.
HDFC AMC has agreed to donate an amount of Rs. 2.50crore for 2 years
for meeting a part of construction cost of Phase I of the hospital. The
payment made by the AMC is covered under sub-clause (1) of Schedule
VII - Promotion of health care.
ANALYSIS
&
INTERPRETATION
OF DATA
TABLE1:
AGEWISECLASSIFICATIONOFRESPONDENTS
AGE
NO.OFRESPONDENTS
PERCENTAGE
BELOW20
2029
3039
4049
5059
ABOVE60
TOTAL
NIL
69
13
34
35
49
200
NIL
34.5
6.5
17
17.5
24.5
100
4 9
69
20-29
30-39
40-49
50-59
35
34
13
ABOVE 60
Interpretation:
Accordingtothesurveytherespondentswereofdifferentagegroups.Thereare
norespondentsofagebelow20areinnonumber.Theinvestorsofage2029are69in
numberwith34.5%.Theinvestorsofage3039are13with6.5%,4049thereare34
investorswith17%andinbetween5059thereare35investorswith17.5%andabove60
thereare49investorswith24.5%.
TABLE2:
GENDEROFTHERESPONDENTS
GENDER
NO.OFRESPONDENTS
PERCENTAGE
MALE
FEMALE
TOTAL
158
42
200
79
21
100
/
ONDENTOFRESP
PE RCENTAGE
NO.
120
100
80
60
20
0
NO. OF
RESPONDENTS
PERCENTAGE
MALE
FEMALE
GENDER
Interpretation:
Inthesurveynumberofrespondentaremalemoreinnumberthatisabout79%&the
nextpositionhasbeenoccupiedbyfemalerespondentstheyareabout21%ofthe
sampleso,mainlymenarepreferringtogoforinvestments.
TABLE3:
OCCUPATIONOFTHERESPONDENTS
OCCUPATION
HOUSEHOLD
BUSINESS
SERVICE
PROFESSIONAL
RETIRED
STUDENT
TOTAL
NO.OFRESPONDENTS
9
46
84
30
15
16
200
PERCENTAGE
4.5
23
42
15
7.5
8
100
15
16
HOUSE HOLD
46
30
84
BUSINESS
SERVICE
PROFESSIONAL
RETIRED
STUDENT
Interpretation:
Accordingtothesurveytherespondentswereofdifferentoccupations.Mostof
respondentsarefromservicesectorisabout42%ofthesample.Respondentsfromthe
businessareoccupying23%,thencomesprofessionalwith15%,studentsoccupy8%,
retiredpeopleoccupy7.5%,withhouseholdoccupying4.5%.
TABLE4:
ANNUALINCOMEOFTHERESPONDENTS
ANNUAL
NO.OFRESPONDENTS
PERCENTAGE
<1,00,000
12LAKHS
23LAKHS
ABOVE3LAKHS
TOTAL
53
84
48
15
200
26.5
42
24
7.5
100
NO. OF RESPONDENTS /
PERCENTAGE
90
80
70
60
50
40
30
20
10
0
NO. OF
RESPONDENTS
PERCENTAGE
<
1,0
0,
00
LAK
LAK
2
1
H
L
3
2
HS
VE
AB
ANNUAL INCOME
Interpretation:
Accordingtothesurvey,therespondentsoftheincomegroupoflessthan1lackare
of26.5%.Theywereabout42%oftherespondentsareoftheincomegroupbetween12
lack.24%oftherespondentswereoftheincomegroup23lacks.7.5%respondentswere
oftheincomegroupmorethan3lacks.
TABLE5:
DOTHERESPONDENTSINVESTTHEIRMONEY
INVESTMENTS
NO.OFRESPONDENTS
PERCENTAGE
YES
NO
TOTAL
200
NIL
200
100
NIL
100
NO. OF RESPONDENTS
PERCENTAGE
250
200
150
NO. OF
RESPONDENTS
100
PERCENTAGE
50
0
YES
NO
INVESTMENTS
Interpretation:
Alltherespondentsconsideredinthesample,doinvesttheirsavings.
TABLE6:
THEAMOUNTTHERESPONDENTSSAVEYEARLY
AMOUNT
NO.OFRESPONDENTS
PERCENTAGE
<25,000
<50,000
<1,00,000
>1,00,000
TOTAL
106
54
24
16
200
53
27
12
8
100
OFRESPONDENTS
NO. OF
RESPONDENTS
60
40
20
0
PERCENTAGE
< 25,000
< 50,000
<
1,00,000
AMOUNT
>
1,00,000
Interpretation:
Accordingtothesurvey,therespondentswhosave<25,000yearlyisabout53%,
<50,000isabout27%&theindividualswhosavelessthan1,00,000are12%,followed
byindividualswhosavemorethan1,00,000is8%.
TABLE7:
INVESTORSPREFERENCEFORVARIOUSINVESTMENT
OBJECIVES
OPTIONS
RANK
1
2
4
5
3
SECURITY
YEILD
MATURITY
TAXBENEFITS
LIQUIDITY
SCORE
55
47
35
22
40
LIQUIDITY
20%
SECURITY
7%
YEILD
13%
SECURITY
YEILD
MATURITY
TAX BENEFITS
MATURITY
27%
TAX BENEFITS
33%
LIQUIDITY
Interpretation:
Differenttypesofinvestorslookforwardtodifferentinvestmentobjectives.Mostof
st
nd
rd
&5thranksformaturity&taxbenefits.
th
TABLE8:
INVESTMENTOPPURTUNITIESUSUALLY
PREFEREDBYRESPONDENTS
OPTIONS
BANKDEPOSITS
SHARES
BONDS/DEBENTURES
MUTUALFUNDS
INSURANCE
REALESTATE
TOTAL
NO.OFRESPONDENTS
68
32
31
30
26
13
200
PERCENTAGE
33
16
16
15
13
7
100
13%
7%
33%
BANK DEPOSITS
SHARE
BONDS / DEBUNTRES
MUTUAL FUNDS
15%
16%
16%
INSURANCE
REAL ESTATE
Interpretation:Itisobservedfromtheabovechartthat33%oftheindividualsprefer
tobankdeposits,16%oftheindividualsprefertoshares,respondentspreferringbondsare
16%ofwithrespondentspreferringmutualfundsare15%,followedbyinsuranceandreal
estatewith13%and7%.
TABLE9:
AWARENESSOFMUTUALFUNDS
OPTIONS
YES
NO
TOTAL
NO.OFRESPONDENTS
124
76
200
PERCENTAGE
62
38
100
NO. OF RESPONDENTS /
PERCENTAGE
NO. OF RESPONDENTS
80
PERCENTAGE
60
40
20
0
YES
NO
AWARENESS
Interpretation:
Accordingtothesurvey,mostinvestorsareawareofmutualfunds.Itcanbe
observedfromtheabovetablethat62%ofrespondentsareawareofMutualFunds
andtherestarenotawareofMutualFunds.
TABLE10:
AWARENESSOFMUTUALFUNDSISTHROUGH
OPTION
ADVERTISEMENT
FRIENDS
FAMILYMEMBERS
FINANCIALADVISORS
RELATIVES
TOTAL
NO.OFRESPONDENTS
52
37
19
66
26
200
PERCENTAGE
26
19
10
32
13
100
ADVERTISEME
NT
26%
RELATIVES
13%
FINANCIAL
ADVISORS
32%
FAMILY
MEMBERS
10%
FRIENDS
19%
ADVERTISEMENT
FRIENDS
FAMILY MEMBERS
FINANCIAL ADVISORS
RELATIVES
Interpretation:
Accordingtothesurvey,therespondentsaremoreawareofmutualfunds
throughFinancialAdvisorswhooccupy32%,followedbyAdvertisements26%,Friends
19%,Relatives13%&FamilyMembers10%
TABLE11:
MUTUALFUNDISAGOODINVESTMENTOPTION.
OPTIONS
YES
NO
TOTAL
NO.OFRESPONDENTS
159
41
200
PERCENTAGE
79.5
20.5
100
/
ONDENTOFRESP
PE RCENTAGE
NO.
120
100
80
60
20
0
NO. OF
RESPONDENTS
PERCENTAGE
YES
NO
OPTIONS
Interpretation:
Manyoftheindividualsareoftheviewthatmutualfundisagoodinvestment
option.Ofthetotalsamplesurveyaround79.5%oftherespondentsfeelthatmutualfund
isagoodinvestmentoption&20.5%oftherespondentsfeelthatitisnotagood
investmentoption.
TABLE12:
RESPONDENTSPREFFERINGHDFCASADISTRIBUTOROF
MUTUALFUNDS
OPTION
HDFC
OTHERS
TOTAL
NO.OFRESPONDENTS
138
62
200
PERCENTAGE
69
31
100
NO.
PERCENTAGE
OFRESPONDENTS
HDFC AS A DISTRIBUTOR OF
MUTUAL FUNDS
160
140
120
100
80
60
40
20
0
NO. OF
RESPONDENTS
PERCENTAGE
HDFC
OTHERS
OPTIONS
Interpretation:
Accordingtothesurvey,69%oftherespondentsareawareofHDFCasa
distributorofmutualfunds&these69%oftheinvestorswouldliketoinvestinHDFC
mutualfundoption.Therest31%oftherespondentswouldliketopreferothers.
TABLE13:
TYPEOFFUNDSRESPONDENTSPREFERTO
OPTION
DEBTFUND
EQUITYFUND
HYBRIDFUND
TOTAL
NO.OFRESPONDENTS
42
78
18
138
PERCENTAGE
30.5
56.5
13
100
NO.
PERCENTAGE
OFRESPONDENTS
90
80
70
60
50
40
30
20
10
0
NO. OF
RESPONDENTS
PERCENTAGE
HYBRID
FUND
OPTIONS
Interpretation:
FromthesurveyconductedtherespondentspreferEquityfundsmoreinnumber
theyoccupy56.5%,followedbyDebtfundswith30.5%andaveryfewrespondents
prefertohybridfundswith13%.
TABLE14:
TYPEOFSCHEMEPREFEREDBYRESPONDENTINDEBTFUNDS
OPTION
FLOATINGRATE
GILTFUND
DYNAMICFUND
CASHMANAGEMENT
TOTAL
NO.OFRESPONDENTS
14
27
41
68
150
PERCENTAGE
9.33
18
27.33
45.33
100
18
DYNAMIC FUND
CASH MANAGEMENT
27.33
Interpretation:
Basedonthesurvey,itisfoundthattherespondentspreferCASH
MANAGEMENTfundwhichoccupies45.33%,thenfollowsistheDYNAMICFUND
with27.33%,thirdlyGILTFUNDisseenwithmorepercentagewith18,followedby
FloatingRateFundwith9.33%.
TABLE15:
TYPEOFSCHEMEPREFEREDINEQUITYFUNDS
OPTION
NO. OF RESPONDENTS
PERCENTAGE
LARGE CAP
MID CAP
SMALL & MID CAP
TAX SAVER
TOTAL
12
21
15
27
75
16
28
20
36
100
TYPESOFSCHEMEPREFEREDINEQUITYFUNDS
16%
36%
LARGE CAP
MID CAP
SMALL&MID CAPE
28%
TAX SAVER
20%
Interpretation:
Basedonthesurvey,thatoutof75samplesize,mostoftheinvestorschoose
TAXSAVERwith36%,followedbyMIDCAPwith33%,thenSMALL&MIDCAP
with20%,LARGECAPwith16%
TABLE16:
TYPEOFSCHEMEPREFERREDINHYBRIDFUND
OPTION
NO.OFRESPONDENTS
MIPI
MIPII
TOTAL
8
11
18
PERCENTAGE
44.4
61.1
100
70
60
50
40
NO. OF RESPONDANT
30
PERENTAGE
20
10
0
MIP I
MIP II
Basedonthesurvey,itisfoundthattherespondentsprefertochooseMIPIIwith
61.1%ofsample,followedbyMIPIschemesintheHybridFundTypewith44.4%.
TABLE17:
RESPONDENTSPREFFERINGOTHERBRANDSOFMUTUAL
FUNDS
OPTION
BIRLASUNLIFE
RELIANCE
HSBC
KOTAKMAHINDRA
DSPMERYLLICH
UTI
TOTAL
NO.OFRESPONDENTS
12
18
6
11
5
10
62
PERCENTAGE
19
29
10
18
8
16
100
16%
RELIANCE
19%
HSBC
8%
KOTAK MAHINDRA
18%
10%
29%
DSP MERYILCH
UTI
Interpretation:
Basedonthesurvey,itisfoundthattherespondentswoulddefinitelyprefer
otherbrandsofMutualFundswithFranklinTempletonintheleadwith29%,then
HDFCwith18%,UTIinthefourthplacewith16%,KotakMahindrawith18%,HSBC
with10%&DSPmerllichwith8%
TABLE18:
REASONSFORTHEPREFERENCEOFPRESENTBRANDOF
MUTUALFUND
OPTION
NFO
PERFORMANCE
DIVERSIFICATION
INVESTMENTSTRATEGY
FUNDMANAGER
TOTAL
NO.OFRESPONDENTS
7
9
12
20
14
62
PERCENTAGE
11
15
19
32
23
100
11%
15%
PERFORMANCE
DIVERSIFICATION
32%
19%
INVESTMENT
STRATEGY
FUND MANAGER
Interpretation:
TherespondentsPreferredthepresentbrandsofMutualFundbecauseofthe
investmentstrategywhichoccupies32%,thencomesFundManagerwith23%,
Diversificationwith19%,performance&IPOwith15%,11%respectively.
TABLE19:
OPINIONABOUTHDFCMUTUALFUND
OPTION
BETTROPTION
NOTABETTEROPTION
CANTSAY
TOTAL
NO.OFRESPONDENTS
122
16
62
200
PERCENTAGE
61
8
31
100
/
SOFRESPONDENT
PERCENTAGE
NO. OF
RESPONDENTS
PERCENTAGE
BETTER
OPTION
NOT A
BETTER
OPTION
CAN'T SAY
OPTION
Interpretation:
Accordingtothesurvey,therespondentsaremostlyoftheopinionthatinvestingin
HDFCMutualfundsisaBetteroptionasitoccupies61%,afewrespondentsareofno
opinionwith31%,&therestfeelthatitisnotabetteroptionwithonly8%ofthetotal.
TABLE20:
RESPONDENTRECOMMENDINGHDFCMUTUALFUND
ASABETTERINVESTMENTOPPURTUNITY
OPTIONS
YES
NO
TOTAL
NO.OFRESPONDENTS
156
44
200
PERCENTAGE
78
22
100
PE RCENTAGE
ONDENTOFRESP
NO. OF
RESPONDENTS
PERCENTAGE
YES
NO
OPTIONS
Interpretation:
AccordingtothesurveytherespondentsrecommendingHDFCMutual
Fundasabetterinvestmentopportunityisof78%.&therespondentswhodo
notrecommendHDFCasabetterinvestmentopportunityare22%.
FINDINGS
&
SUGGESTIONS
Findings
Themajorityofrespondentswereoftheagegroupof2960.
Majorpartoftherespondentbelongstoservicesector.
Annualincomeoftherespondentis12lacprefermoreofinvestments.
Respondents irrespective of major investment or small are investing in
someorothersourcesofinvestments.
Investorspreferencewhengoingforaninvestmentinprimarilyforsecurity.
RespondentspreferBankDepositsasmostsecuredavenueforinvestment,&
thenpreferenceis giventoshares,Bonds/Debentures &thentoMutual
Funds.
TheroleofFinancialAdvisorsplayakeyroleinmakinginvestorseducated
aboutmutualfund.Around33%oftherespondentschoosefinancialadvisors
forguidance.
FromtheSurveyconducteditisclearthat80%oftherespondentsfeelthat
Mutualfundisagoodinvestmentoption.
69%oftherespondentsareawareofHDFCasadistributorforMutual
Funds.
Outoftotalrespondents,manyofthempreferthecurrentbrandofmutual
fundbecauseofinvestmentstrategy.
FromthesurveyitisclearthatmostoftherespondentsfeelHDFCasa
betteroptionformutualfund.
78%oftheRespondentsarerecommendingHDFCasabetterinvestment
opportunity.
Suggestions
In HDFC Mutual Funds there is still lot of paper work in this digital world so it is
important to them to go green.
Mutual funds can offer online to the investors through the stock exchange.
HDFC Mutual Funds should launch new and innovative scheme at regular intervals
to attract customers.
HDFC Mutual Funds should organized more motivational events for their
employees.
BIBLIOGRAPHY
REFERENCES
Books:
Booklet of NISM-SERIES-V-A (2013)
Website:
www.hdfcfund.com
www.amfiindia.com
www.moneycontrol.com
ANNEXURE
KEYSTEPSFORFINANCIALPLANNING
INSUREYOURSELFBEFOREYOUINVEST
Insuranceistheprerequisiteofallinvestmentsthemainpurposeofinsuranceisto
protectyourcurrentlifestyleafterretirement.Itactsasashieldagainstalltypeoffinancial
risks.Investorhastorealizethatinsuranceismoreforsafeguardingagainstriskfacedin
liferatherthanbeinganinvestmentforprofit.
CHOOSESIMPLEINVESTMENT
Ourdailylifeisfullofcomplications thedaytodaygrindleavesuswithlittle
energytokeeptrackofourfinancialinvestments.Thatiscopyaninvestorshouldchoose
simple & uncomplicated instruments. Therefore he has to invest the hassle free
instruments.
UTILIZETHEPOWEROFCOMPOUNDING
Compounding means payment of interest on accumulated interest. Thus money
earnedbyyouworkshard&earnsmoremoneyforyou.Thisimpliesthatnotonlythe
principal earns income for you but interest generated by you also earns income. One
importantfactoristhetimeperiod.Longerthetimehigherthebenefit
INVESTININTRUMENTSTHATKEEPYOUAHEADOFINFLATION
Thatsilentlycreepsupfrombehind&startseatingyourhardearnedsavingseven
beforeyourealizethesituation.Aninvestorshouldlookattherealreturn(therateofreturn
minus the rate of inflation) while considering an investment. He should invest in
instruments,whichprovideprofitablepostinflationreturns.
REDUCETAXONYOURINVESTMENT
Therearetworealitiesinthelife.Oneisdeath&theotheristax.Itisadvisablethat
investmentsshouldbesoplannedthatleastpossibletaxwouldberequiredtobepaid.Smart
movefortheinvestoristosaveeveryrupeefromtaxman.
GOFORSTABLE&REALISTICRETURNS
Stabilityofreturnsismoreimportantthatincreasedprofit.Usuallytheseareassociated
withhighvolatileinvestmentoptionslikeequities&evenwithgovernmentsecuritiesorgiltsas
theyalsorunhighmarketrisk.Theassetallocationissuggestedaccordingtotheriskprofileof
aninvestor.Soinvestinthebestoption&getthemaximumreturns.
Identification Data:
1.Name of the respondent
2.Age
Below 20
40-90
:
:
20-29
50-59
30-39
Above 60
3.Sex
Male
Female
4.Address with phone number
Telephone no.:
5.Occupation
Household
Professional
6.Annual Income
< One Lac
2-3 Lac
Email ID:
Business
Retired
:
Service
Student
:
1-2 Lac
Above 3 Lac
Investment Preference:
1.Do you invest any part of your savings?
Yes
No
If Yes
2. What amount do you save yearly?
< 25,000
< 50,000
< 1,00,000
> 1,00,000
If Yes
3. What criteria you keep in your mind while selecting
an investment opportunity (rank them accordingly)?
Security
Yield
Maturity
Tax benefits
Liquidity
4. Normally what investment opportunity you prefer to
invest your savings?
Bank
Shares
Deposits
Mutual
Insurance
Funds
If Mutual Funds
5.Do you know about Mutual Funds?
Bonds/Debentu
res
Real Estate
Yes
No
If yes
6. How did you come to know these brands of Mutual
Funds?
Advertisement
Friends
Financial
Advisor
Relatives
Family
Members
Banks
Yes
No
If Yes
8. In which Mutual Fund did you invest?
HDFC Mutual Funds
Others
If HDFC Mutual Funds
9. What types of funds you prefer?
Debt Fund
Equity Fund
Hybrid Fund
If Debt Funds
10.
Which type of scheme do you prefer?
Floating Rate
Fund
Cash
Management
Fund
Dynamic Fund
Gilt fund
If Equity Funds
11.
Which type of scheme do you prefer?
Large
Fund
cap
Mid-cap
opportunity
Fund
Balanced
Fund
Small-Midcap
Fund
Tax
saver
Top 200 Fund
Fund
If Hybrid Funds
12.
Which type of scheme do you prefer?
MIP I
MIP II
If Others
13.