Assignment of Personal Financial Planning MGT-636 SUBMITTED TO:-BAVDEEP SINGH SUBMITTED BY:-RAMANDEEP KAUR RQ3707B43 7450070076

1. A mutual fund is a professionally managed type of collective investment scheme that

pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities. HDFC Mutual Fund To invest funds in debt markets or in equity from a pool of money of several people is called Mutual Fund. The HDFC bank offers HDFC Mutual Fund which is one of the known Indian Mutual Funds. The Debt funds, balanced funds or Equity funds come under Mutual Funds. There are parameters which are quantitative based on which the funds are selected. The volatility, risk adjustment returns, FAMA model, rolling return, qualitative analysis, fund performance are some of the important parameters based on which the funds are selected. HDFC Mutual Fund Advantages:There are many advantages in investing HDFC mutual funds. The following are some of the advantages, Affordability The HDFC mutual funds are available in smaller units which make it more affordable. Flexibility The HDFC mutual fund offers systematic withdrawal plans, dividend reinvestment, systematic investment plans which give more flexibility. Liquidity The HDFC mutual fund offers open ended schemes in which you can withdraw the money at any point of time. Professional Management Based on extensive research and experience the expert fund managers analyze the options in HDFC mutual funds. Diversification The risk factor is low in HDFC mutual funds as the investment is done across different stocks and industries. Low Costs The custodial fee, brokerage charges are low for HDFC mutual funds. Potential Return The HDFC mutual fund managers have access to statistics and information from leading analysts and economists around the world. Because of this, the investors of HDFC mutual funds gain potential returns.

Regulated for Investor Protection The HDFC mutual fund sector is regulated to protect the interests of investors. You can view the performance of the HDFC mutual funds at a glance at the HDFC bank website. The details of analyzed funds are presented in the form of fact sheets. These fact sheets are updated on a monthly basis. The HDFC mutual funds can be buy and sell online from the HDFC bank website. You can also visit your nearest HDFC bank branch to invest in HDFC mutual funds. Once you register for HDFC mutual funds, your HDFC bank savings account will be linked to investment services. You can perform three type of transactions purchase, redeem and switch. You can view all your holdings online. Once any transaction is performed no cancellation is encouraged. The various kinds of mutual funds provided by the bank are: HDFC Mid Cap Opportunities Fund: Closed end fund which invests in small as well as mid cap stocks. HDFC Infrastructure Fund: Closed end equity mutual fund which invests in stocks of the infrastructure companies. HDFC Long Term Equity Fund: Closed end equity mutual fund and has a maturity period of 5 years. This fund has diversified stocks for risk minimization. HDCF Index Fund Nifty Plan: This is an index fund and tracks nifty. The scheme is open ended and the expense ratio is 1%. HDFC Index Fund Sensex Plus Plan: 80-90% of the asset in this fund is invested in Sensex stocks and the rest is invested outside Sensex. HDFC Index Fund Sensex Plan: This plan passively tracks the Sensex. HDFC Tax Saver (ELSS): Open-ended scheme with a lock-in period of 3 years and provides benefits of tax saving. HDFC Prudence Fund: Open-ended fund where the allocation in equity and debt depends on the market condition. HDFC Arbitrage Fund: An arbitrage fund where arbitrage opportunities are exploited between the derivatives and spot market.

 HDFC Premier Multi Cap Fund: This is a fund which is growth oriented and investments are made in the mid cap and large cap blue chip companies. HDFC Capital Builder Fund: This is a fund which is actively managed and the assets are invested in companies which are strong and are below the fair value. HDCF Equity Fund: Open ended fund where the investments are made companies which are expected to outperform their peers. HDFC Long Term Advantage Fund (ELSS): Investments are done in equity and instruments related to equity. This fund is closed ended with a lock-in period of 3 years. HDFC Balanced Fund: It is a balanced open-ended fund where investments are made in equity and debt. HDFC Core and Satellite Fund: Open-ended fund investing in stocks which are performing below the true value. HDFC Top 200 Fund: This fund invests in the equities and instruments linked with equity but are drawn from the companies listed in the BSE 200 Index. HDFC Growth Fund: Open-ended fund and invests primarily in equities and instruments linked with equity. Total Numbers:Mean (Average)-: Standard deviation:Variance(Standard deviation):

2. HDFC Equity Fund:Types and objectives:It is an open-ended equity fund investing in a mix of large-cap and mid cap stocks. The investment objective of the Scheme is to achieve capital appreciation. Fund Commentary:1.The fund is a large cap fund which invests in the companies having a good business model and growth potential over mid to long term. 2. The fund manager feels India is one of the few emerging economies that are a net importer of commodities, oil being the largest. Thus every $20 fall saves the country $18 billion p.a., equivalent to 1.1% of GDP. 3. Lower oil prices mean lower fiscal deficit, lower inflation, lower interest rates, etc. over time. 4.Indian exports to US/ Europe are only 6 % of GDP. In his opinion, even these are not materially linked to how these economies perform 5.Given the miniscule share of 1.6 % of Indian exports in total world trade and improving competitiveness of Indian exports, there should not be a material impact of slow down in West on Indian exports. 6.He believes that barring unforeseen developments of a large magnitude India should grow faster in the next ten years than the last ten years growth and could emerge as the fastest growing economy in the world. 7.He continues to maintain higher exposure to banks & finance, Energy and IT sector. 8. The Fund follows the philosophy of buy and hold and hence has a low portfolio churn ratio of 37% as on July. 9.The fund has been a consistent out performer against the benchmark CNX 500 index and is recommended for moderate and conservative investors with a horizon of 2-3 yrs.

Risk & Ratios Portfolio P/E Ratio 20.93 Beta 0.77 Portfolio P/B Ratio 4.39 Sharpe 0.02 Dividend Yield 1.06 Standard Deviation 4.87 Avg. Market Cap (Cr.) 77712 Expense Ratio 1.79

3.HDFC Gold fund:HDFC Gold ETF Fund: Some intersting facts about Gold: 1. Demend and supplky balance 2. As a hedge against inflation and store of value 3. Gold provides effective diversifacation for investment portfolios by exhibiting low long term correlation with other asset classes. 4. As a safe haven in times of fiancial, economics and political crises 5. Gold is so rare that the world pours more steel in an hour that it has poured gold since the beginning of time. 6. All the gold in the world could be compressed into an 18 yard cube Sources of Gold Demand Jewellery(68%): Consistently accounts for 2/3rd of demand. Amounted to US$ 61bn in 12 months ending Dec. 2008,making it one of the largest consumer goods in the world. Investment(19%):Identifiable investment demand in gold has increased considerably in recent years. Since 2003, investment has represented the strongest source of growth in demand. Wide range of reasons and motivations for people and institutions to invest in gold.

Industrial(14%): Over half of industrial demand arises from its use in electrical

components. Used in various medical and bio-medical applications. Why invest in GOLD ETF? What are the benefits? Low Cost:When you buy RGETF you only have to pay brokerage cahrges, which is usually much lower than paying for making charges when you buy physical gold. Transparency: GETF, the rates are transparent as they are traded like a share on the NSE and therefore it provide the ability to buy and sell them quickly at the rulling market price and therefore highly liquid. Safety & Security: Zero concerns about security, theft. Safegaurd in the form of electronic mode in the case of unforeseen circumstances where you have lost all the physical wealth.

Investment Strategy:The investment objective of the Scheme is to generate returns that are in line with the performance of gold, subject to tracking errors. The Scheme would invest in gold in the domestic market and intends to track the spot price of gold in the domestic market. The Scheme also may engage in gold lending, and /or deposit gold with banks in return for fees as and when permitted by SEBI. The Scheme will also invest in debt and money market securities in order to meet the liquidity requirements. Though every endeavor will be made to achieve the objectives of the Scheme, the AMC/Sponsors/Trustees do not guarantee that the investment objectives of the Scheme will be achieved. No guaranteed returns are being offered under the Scheme. RISK CONTROL Investments made from the net assets of the Scheme would be in accordance with the investment objective of the Scheme and the provisions of the SEBI (MF) Regulations. The AMC will strive to achieve the investment objective by way of a judicious portfolio mix comprising of Gold bullion and instruments related to gold (including derivatives as and when permitted by SEBI), Debt Securities and Money Market Instruments. Investments in gold bullion would be primarily assessed with regard to

its fineness. Every investment opportunity in Debt Securities and Money Market Instruments would be assessed with regard to credit risk, interest rate risk and liquidity risk. Credit Risk A detailed credit evaluation of each investment opportunity will be undertaken. The AMC will utilise Ratings of recognized rating agencies as an input in the decision making process. Investments in Debt Securities and Money Market Instruments will usually be in instruments that have been assigned high investment grade ratings by a recognised rating agency. In line with SEBI Circular No. MFD/CIR/9/120/ 2000 dated November 24, 2000, the AMC may constitute committee(s) to approve proposals for investments in unrated instruments. The AMC Board and the Trustee shall approve the detailed parameters for such investments. The details of such investments would be communicated by the AMC to the Trustee in their periodical reports. It would also be clearly mentioned in the reports, how the parameters have been complied with. However, in case any security does not fall under the parameters, the prior approval of Board of AMC and Trustee shall be sought. Interest Rate Risk An interest rate scenario analysis would be performed on an on-going basis, considering the impact of the developments on the macro-economic front and the demand and supply of funds. Based on the above analysis, the AMC would manage the investments of the Scheme on a dynamic basis to exploit emerging opportunities in the investment universe and manage risks at all points in time. Liquidity Risk The AMC will attempt to reduce liquidity risk by investing in securities that would result in a staggered maturity profile of the portfolio, investment in structured securities that provide easy liquidity and securities that have reasonable secondary market activity. In the event of a requirement to liquidate all or a substantial part of these investments in a very short duration of time, the AMC may not be able to realize

the full value of these securities to an adverse impact on the Net Asset Value of the Scheme. TRACKING ERROR Tracking error means the variance between daily returns of the underlying benchmark (gold in this case) and the NAV of the Scheme for any given period. NAV of the Scheme is dependant on valuation of gold. Gold has to be valued based on the formula prescribed by SEBI. NAV so computed may vary from the price of Gold in the domestic market. Tracking error could be the result of a variety of factors including but not limited to: Delay in the purchase or sale of gold due to - Illiquidity of gold, - Delay in realisation of sale proceeds, - Creating a lot size to buy the required amount of gold The Scheme may buy or sell the gold at different points of time during the trading session at the then prevailing prices which may not correspond to its closing prices. The potential for trades to fail, which may result in the Scheme not having acquired gold at a price necessary to track the benchmark price. The holding of a cash position and accrued income prior to distribution of income and payment of accrued expenses.

Disinvestments to meet redemptions, recurring expenses, dividend payouts etc. Execution of large buy / sell orders Transaction cost (including taxes and insurance premium) and recurring expenses Realisation of Unit holders funds

Tracking error due to movement in prices of physical gold will impact the

performance of HGETF. However, the Scheme will endeavor to keep tracking error as low as possible by:

Use of gold related derivative instruments, as and when allowed by SEBI (MF) Regulations Rebalancing of the portfolio. Setting off of incremental subscriptions against redemptions