A Project Study Report ON Detail Study of HDFC Mutual Fund

Submitted in partial fulfilfilment for the Award of degree of Master of Business Administration

Submitted By:Amit Da a MBA !ed year

Submitted To:

Asstt" Prof"

GOVER ME ! E G" EER" G CO##EGE $HA#A%AR

DEC#ARA!"O

# do $ereby dec%are t$at t$e project entit%ed &DE!A"# S!'D( OF HDFC) M'!'A# F' D* submitted as a part of t$e re&uirement for t$e partia% fu%fi%%ment of Master of Business Administration at 'O(T" )N''" *O++)'), -.A+A/AR is an ori ina% piece of 0or1 done by me under t$e uidance of Mr .imans$u (yas Mr D$eeraj

At .D2* Mutua% 2und ,3OTA $as not been submitted for a0ard of any de ree e%se 0$ere in part or fu%%"

CER!"F"CA!E OF !HE

G'"DE

A+,nowledgement

# e4press my sincere t$an1s to my project uide, Mr- Himan.hu Vya. Desi nation/ Deptt" Finan+e/ for uidin me ri $t form t$e inception ti%% t$e successfu% comp%etion of t$e project" # sincere%y ac1no0%ed e $er for e4tendin t$eir 5a%uab%e uidance, support for %iterature, critica% re5ie0s of project and t$e report and abo5e a%% t$e mora% support $e $ad pro5ided to me 0it$ a%% sta es of t$is project" # 0ou%d a%so %i1e to t$an1 t$e supportin staff Finan+e 0 H-R- Deportment, for t$eir $e%p and cooperation t$rou $out out project"

CHA1!ER !O1"C 2
" !ROD'C!"O
6" M7T7A+ 27ND S)T7P !" NA( 8" S*OP) 9" B)N)2#TS O2 M7T7A+ 27ND :" *AP#TA+ 'A#N

1AGE O

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4 6

O5$EC!"VE OF !HE S!'D(

A5O'! HDFC M'!'A# F' D
6" /.< .D2* M7T7A+ 27ND !" SPONSORS 8" TR7ST)) 9" AM* D#R)*TORS :" A/ARDS

23 27

1ROD'C! 0SERV"CE
6" T<P)S O2 M7T7A+ 27ND !" #N()STM)NT P+AN 8" PROD7*T O2 M7T7A+ 27ND

46

9 3

1AR! OF M( S'MMER !RA" " G ME!HODO#OG( OF !HE S!'D(

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<'ES!"O ARE F" D" G/ RECOMME DA!"O /

36

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5"5#"OGRA1H(

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CHA1!ER 2 >

" !ROD'C!"O

6" M7T7A+ 27ND S)T7P !" NA( 8" S*OP) 9" B)N)2#TS O2 M7T7A+ 27ND :" *AP#TA+ 'A#N ;" #N()STM)NT *R#T)R#A

" !ROD'C!"O

T$e financia% mar1et p%ays a crucia% ro%e in t$e in t$e economic de5e%opment of a country by faci%itatin t$e a%%ocation of scarce resources" 2inancia% mar1ets essentia%%y in5o%5e t$e a%%ocation of resources" T$is can be t$ou $t of as t$e brain of t$e entire economic system, t$e %ocus of centra% decision-ma1in > if t$ey fai%, not on%y 0i%% t$e sectors profit be %o0er t$an 0ou%d ot$er0ise $a5e been, but t$e performance of t$e entire economic system may be impaired"

T$e efficiency of financia% mar1et $o0 e5er, depends on t$e e4istence of acti5e and efficient financia% intermediaries in t$e system" Deposit ta1in institutiona% in5estor assets" is t$e important financia% intermediaries in5o%5ed in t$e tas1 of a%%ocatin

Structura% c$an es in t$e financia% mar1et $a5e induced a re5erse trend in financia% intermediation, i"e" financia% disintermediation, in 0$ic$ t$e centra% ro%e of ban1in is bein from a ta1en o5er by in5estment institutions and institutiona% in5estors" T$e s$ift credit-based system to a financia% $as initiated t$e process of

disintermediation, and capita% mar1et based factors %i1e insurance, pension funds and mutua% funds are increasin %y p%ayin t$e centra% ro%e"

T$e reforms $a5e successfu%%y dismant%ed t$e entry barriers, 0it$ t$e resu%t t$at today t$ere are domestic and forei n financia% institutions, %i1e mutua% funds, bro1in firms and insurance companies, operatin in t$e #ndian mar1et" T$e introduction of capita% ade&uacy norms, prudentia% re u%ation and 0or%d c%ass re u%atory mec$anisms to protect t$e interest of in5estor, besides t$e strict re&uirement of disc%osure, $a5e economy and financia% mar1et" i5en a boost to t$e confidence of domestic and %oba% forei n in5estors" T$e #ndian economy $as s%o0%y inte rated itse%f 0it$ t$e

%hat i. a Mutual Fund?

Mutua% fund is a mec$anism for poo%in t$e resources by issuin units to t$e in5estors and in5estin funds in securities in accordance 0it$ objecti5es as disc%osed in offer document" #n5estments in securities are spread across a 0ide cross-section of industries and sectors and t$us t$e ris1 is reduced" Di5ersification reduces t$e ris1 because a%% stoc1s may not mo5e in t$e same direction in t$e same proportion at t$e same time" Mutua% fund issues units to t$e in5estors in accordance 0it$ &uantum of money in5ested by t$em" #n5estors of mutua% funds are 1no0n as unit $o%ders" T$e profits or %osses are s$ared by t$e in5estors in proportion to t$eir in5estments" T$e mutua% funds norma%%y come out 0it$ a number of sc$emes 0it$ different in5estment objecti5es 0$ic$ are %aunc$ed from time to time" A mutua% fund is re&uired to be re istered 0it$ Securities and )4c$an e Board of #ndia ?S)B#@ 0$ic$ re u%ates securities mar1ets before it can co%%ect funds from t$e pub%ic"

2-2 ) How i. a mutual fund .et up?

A mutua% fund is set up in t$e form of a trust, 0$ic$ $as sponsor, trustees, asset Mana ement *ompany ?AM*@ and custodian" T$e trust is estab%is$ed by a sponsor or more t$an one sponsor 0$o is %i1e promoter of a company" T$e trustees of t$e mutua% fund $o%d its property for t$e benefit of t$e unit $o%ders" Asset Mana ement *ompany ?AM*@ appro5ed by S)B# mana es t$e funds by ma1in in5estments in 5arious types of securities" *ustodian, 0$o is re istered 0it$ S)B#, $o%ds t$e securities of 5arious sc$emes of t$e fund in its custody" T$e trustees are 5ested 0it$ t$e enera% po0er of superintendence and direction o5er AM*" T$ey monitor t$e performance and comp%iance of S)B# Re u%ations by t$e mutua% fund" S)B# Re u%ations re&uire t$at at %east t0o t$irds of t$e directors of trustee company or board of trustees must be independent i"e" t$ey s$ou%d not be associated 0it$ t$e sponsors" A%so, :AB of t$e directors of AM* must be independent" A%% mutua% funds are re&uired to be re istered 0it$ S)B# before t$ey %aunc$ any sc$eme" .o0e5er, 7nit Trust of #ndia ?7T#@ is not re istered 0it$ S)B# ?as on -anuary 6:, !AA!@"

2-4 ) %hat i. et A..et Value @ AVA of a .+heme?

T$e performance of a particu%ar sc$eme of a mutua% fund is denoted by Net Asset (a%ue ?NA(@" Mutua% funds in5est t$e money co%%ected from t$e in5estors in securities mar1ets" #n simp%e 0ords, Net Asset (a%ue is t$e mar1et 5a%ue of t$e securities $e%d by t$e sc$eme" Since mar1et 5a%ue of securities c$an es e5ery day, NA( of a sc$eme a%so 5aries on day to day basis" T$e NA( per unit is t$e mar1et 5a%ue of securities of a sc$eme di5ided by t$e tota% number of units

of t$e sc$eme on any particu%ar date" 2or e4amp%e, if t$e mar1et 5a%ue of securities of a mutua% fund sc$eme is Rs !AA %a1$s and t$e mutua% fund $as issued 6A %a1$s units of Rs" 6A eac$ to t$e in5estors, t$en t$e NA( per unit of t$e fund is Rs"!A" NA( is re&uired to be disc%osed by t$e mutua% funds on a re u%ar basis - dai%y or 0ee1%y - dependin on t$e type of sc$eme"

2-6 ) S+ope for DeBelopment of Mutual Fund

A Mutua% 2und is t$e most suitab%e in5estment for t$e common man as it offers an opportunity to in5est in a di5ersified, professiona%%y mana ed bas1et of securities at a re%ati5e%y %o0 cost" #ndia $as a bur eonin popu%ation of midd%e c%ass no0 estimated around 8AA mi%%ion" A typica% #ndian midd%e c%ass fami%y can $a5e %i&uid sa5in s ran in from Rs"! to Rs"6A +acs today" #n5estments in Ban1s are %i&uid and safe, but 0it$ t$e fa%%in rate of interest offered by Ban1s on Deposits, it is no %on er attracti5e" At best a part can be sa5ed in ban1 deposits, but 0$at is t$e ot$er sources of in5estment for t$e common manC Mutua% 2und is t$e ready ans0er" (ie0ed in t$is sense %oba%%y #ndia is one of t$e best mar1ets for Mutua% 2und Business, so a%so for #nsurance business" T$is is t$e reason t$at forei n companies compete 0it$ one anot$er in settin up insurance and mutua% fund business units in #ndia" T$e s$eer ma nitude of t$e popu%ation of educated 0$ite co%%ar emp%oyees pro5ides un%imited scope for de5e%opment of Mutua% 2und Business in #ndia"

2-8- ) 5enefit. of Mutual Fund.

T$ere are numerous benefits of in5estin in mutua% funds and one of t$e 1ey reasons for its p$enomena% success in t$e de5e%oped mar1ets %i1e 7S and 73 is t$e ran e of benefits t$ey offer, 0$ic$ are unmatc$ed by most ot$er in5estment a5enues" /e $a5e e4p%ained t$e 1ey benefits in t$is section" T$e benefits $a5e been broad%y sp%it into uni5ersa% benefits, app%icab%e to a%% sc$emes, and benefits app%icab%e specifica%%y to open-ended sc$emes"

2- 1rofe..ional Management
T$e in5estor a5ai%s of t$e ser5ices of e4perienced and s1i%%ed professiona%s 0$o are bac1ed by a dedicated in5estment researc$ team 0$ic$ ana%yses t$e performance and prospects of companies and se%ects suitab%e in5estments to ac$ie5e t$e objecti5es of t$e sc$eme"

4- DiBer.ifi+ation
Mutua% 2unds in5est in a number of companies across a broad cross-section of industries and sectors" T$is di5ersification reduces t$e ris1 because se%dom do a%% stoc1s dec%ine at t$e same time and in t$e same proportion" <ou ac$ie5e t$is di5ersification t$rou $ a Mutua% 2und 0it$ far %ess money t$an you can do on your o0n"

8"

ConBenientAdmini.tration
#n5estin n in a Mutua% 2und reduces paper0or1 and $e%ps you a5oid many prob%ems suc$ as bad de%i5eries, de%ayed payments and unnecessary fo%%o0 up 0it$ bro1ers and companies" Mutua% 2unds sa5e your time and ma1e in5estin easy and con5enient"

8- Return 1otential
O5er a medium to %on -term, Mutua% 2unds $a5e t$e potentia% to pro5ide a $i $er return as t$ey in5est in a di5ersified bas1et of se%ected securities "

9- #ow Co.t.
Mutua% 2unds are a re%ati5e%y %ess e4pensi5e 0ay to in5est compared to direct%y in5estin in t$e capita% mar1ets because t$e benefits of sca%e in bro1era e, custodia% and ot$er fees trans%ate into %o0er costs for in5estors"

3- #iCuidity
#n open-ended sc$emes, you can et your money bac1 prompt%y at net asset 5a%ue

re%ated prices from t$e Mutua% 2und itse%f" /it$ c%ose-ended sc$emes, you can se%% your units on a stoc1 e4c$an e at t$e pre5ai%in mar1et price or a5ai% of t$e faci%ity of direct repurc$ase at NA( re%ated prices 0$ic$ some c%ose-ended and inter5a% sc$emes offer you periodica%%y"

:- !ran.paren+y

<ou et re u%ar information on t$e 5a%ue of your in5estment in addition to disc%osure on t$e specific in5estments made by your sc$eme, t$e proportion in5ested in eac$ c%ass of assets and t$e fund mana erDs in5estment strate y and out%oo1"

7- FleDibility
T$rou $ features suc$ as re u%ar in5estment p%ans, re u%ar 0it$dra0a% p%ans and di5idend rein5estment p%ans, you can systematica%%y in5est or 0it$dra0 funds accordin to your needs and con5enience"

=- Choi+e of S+heme.
Mutua% 2unds offer a fami%y of sc$emes to suit your 5aryin needs o5er a %ifetime"

2;-

%ell Regulated

A%% Mutua% 2unds are re istered 0it$ S)B# and t$ey function 0it$in t$e pro5isions of strict re u%ations desi ned to protect t$e interests of in5estors" T$e operations of Mutua% 2unds are re u%ar%y monitored by S)B#"

22-

'nder.tanding and Managing Ri.,

A%% in5estments 0$et$er in s$ares, debentures or deposits in5o%5e ris1: s$are 5a%ue may o do0n dependin upon t$e performance of t$e company, t$e industry, state of capita% mar1et and t$e economy> enera%%y, $o0e5er %on er t$e term, %esser t$e ris1> companies may defau%t in payment of interestEprincipa% on t$eir depositsEbonds debentures> t$e rate of interest on in5estment may fa%% s$ort of t$e rate of inf%ation reducin t$e purc$asin po0er" /$i%e ris1 cannot be e%iminated, s1i%%fu% mana ement can minimiFe ris1" Mutua% fund $e%ps to reduce ris1 t$rou $ di5ersification and professiona% mana ement" T$e e4perience and e4pertise of Mutua% 2und mana ers in se%ectin ris1 and ma4imiFes returns" fundamenta%%y sound securities and timin t$eir purc$ases and sa%es $e%p t$em to bui%d a di5ersified portfo%io t$at minimiFe

6!"

!aD 5enefit.

T$e incomes under Mutua% 2unds are muc$ more Ta4 efficient t$an any fi4ed income security due to t$e fo%%o0in benefits: Section GA+ of t$e income Ta4 Act ,6H;6 enab%es ta4 free income up to rs 6:AAA and di5idends from M2 s are e%i ib%e for t$is benefit"

/$en you in5est for o5er a year, t$e ta4 payab%e on encas$ment is +on term *apita%s ains ta4 at !AB" Once a%so et an inde4ation benefit 0$ic$ $as been appro4imate%y GB per year" T$is reduces t$e ta4ab%e income and t$us decreases t$e ta4 %iabi%ity"

T$ere is a%so an opportunity to set off capita% %osses a ainst ains from income sc$emes"

2u%% e4emption from capita% ains ta4 as it comes under Section :9)AE)B of t$e income ta4 Act"

One $as to pay ta4 on%y 0$en $e encas$ units, but $a5e to pay ta4 on t$e interest earned on ot$er debt instruments e5ery year on an accrua% basis, e5en t$ou $ $e recei5es t$e interest %ater" T$is enerates $i $er post ta4 returns compared to ot$er debt instruments"

Ta4 is just %i1e a monster t$at fri $tens a number of indi5idua%s t$rou $ out t$e nation" T$ere are just to0 0ay to fi $t 0it$ t$is monater: - *oncea%EDepress #ncome

- Ma1e ta4 efficient in5estments" Per$aps t$e second option is far better t$an t$e first as it i5es t$e peace of mind to et$er 0it$ a fee%in t$at one is a responsib%e citiFen of t$e nation" /it$ increasin amount of a0areness t$at is ta1in birt$ in t$e minds of in5estors, mutua% fund $as become cynosure of t$e eye of t$e se5era% in5estors" T$e ta4es a5ai%ab%e are t0o 1inds: - To t$e mutua% fund- as e4p%ained be%o0 in No 6 - To t$e #n5estor- as e4p%ained be%o0 in No !

2- Mutual Fund !aDation

- Mutua% fund is fu%%y e4empted from t$e ta4 under Section6A ?!8D@ of t$e #ncome Ta4 Act6H;6" - #t recei5es a%% income 0it$out deduction at source" - Mutua% funds do not $a5e to pay ta4 on tradin ot$er income, etc" profit, s$ort term capita% ain,

di5idend income, under0ritin commission, p%acement fees, %on term capita% ains,

4- 5enefit. to the "nBe.tor.

T$ere are number of benefits t$at t$e in5estor of a mutua% fund a5ai%" T$ese are discussed as fo%%o0s: -Resident 7nit .o%ders- #n case of an indi5idua% or .indu 7ndi5ided 2ami%ies ?.72Is@, income by 0ay of di5idends, if any from unit of sc$emes of t$e fund to et$er 0it$ ot$er income on specified in5estmentEdeposit are e4cept from ta4 0it$in t$e o5era%% %imit of Rs"6:AAAE- specified under SectionGA+ of t$e #"T" Act,6H;6" Since di5idends from s$ares no %on er in5ite di5idend ta4 and $ence t$e 0$o%e %imit is a5ai%ab%e for mutua% fund di5idends"

- Ta4 deduction at source- as per Section6H;A of t$e #ncome Ta4 Act, 6H;6, no deduction of ta4 at source is made from any income payab%e to t$e unit $o%ders" T$is imp%ies t$at t$ere is no ta4 deduction at source for redemption up to any %imit" As per Section6H91 of t$e #"T"Act 6H;6, deduction of ta4 at source is not made if t$e di5idend income from a mutua% fund does not e4ceed Rs6AAAA per annum"

2-9 ) "nBe.tment +riteria

#ower +o.t
#t is a %o0er cost of in5estment as compare to ot$er mode of in5estment option in t$e mar1et" .ere t$e in5estor can in5est a minimum of Rs:AA in t$e sc$eme of )+SS ?)&uity +in1 Sa5in Sc$eme@"

#e.. paper wor,

.ere %ess paper 0or1 is re&uire t$an ot$er" T$e in5estor i5e $is detai% information %i1e $isE$er name,a e,address,p$one no", pan card no, nominee name and address?in case of minor@ and t$ree fu%% si nature of t$e candided"

o +a.h !ran.a+tion.
#n5estor need not re&uire payin cas$, instead of cas$ in5estor $as to pay c$e&ue or demand draft" /$ic$ $e%p to pre5ent misappropriation and a%so sa5e t$e ta4" .ere t$e in5estor just 0rites t$e product name of mutua% fund and si n on it" #t a%so sa5es t$e time"

o Age 5ar

T$ere is no a e bar of in5estor $ere any a e roup can in5est in mutua% fund" #n case of minor?be%o0 6G year@ t$ere is a nominee, so a c$i%d can in5est t$rou $ $is uardian and a person $a5in a e of JA a%so in5est in mutua% fund ,0$ic$ is not possib%e in ot$er in5estments "

SerBi+e or any ,ind of in+ome group

A ser5ice $o%der or any 1ind of income roup or a student or unemp%oyed peop%e can in5est in mutua% fund but t$e person is a rationa% $uman bein $a5in sound 1no0%ed e of in5estment company"

*.APT)R !

O5$EC!"VE OF !HE S!'D(

O5$EC!"VE OF !HE S!'D(

#ndian financia% system $as been e4pirin t$e 5ast effect of %oba%iFation i"e" drastic interest rate cut, po%itica% disturbances, security scam etc $a5e scattered t$e common in5estorIs perception in se%ectin situation, it is &uite encoura in 5arious in5estment portfo%io" Most of t$e security $o%ders to ana%yFe $o0 t$e .D2* Mutua% 2und ab%e to trap t$e $a5e %ost t$eir confidence in ne0%y come-up corporate sectors for in5estment" +oo1in to t$e deposits by introducin 5arious sc$emes and $o0 it protects t$e interest of t$e in5estors"

T$e main study is based on t$e performance and ana%ysis of 5arious sc$emes 0it$ reference to .D2* Mutua% 2und t$at is a %eadin mutua% fund industry in #ndia"

T$e tota% performance ana%ysis of financia% instruments 0it$ reference to t$e .D2* Mutua% 2und $as ot objecti5es" T$is are as fo%%o0s:-

To 1no0 t$e performance of t$e different sc$emes" T$e comparati5e study of .D2* Mutua% 2und 0it$ ot$er mutua% funds" To 1no0 t$e in5estment pattern of t$e in5estors in different sc$emes" T$e benefits made from t$e in5estment on t$e different sc$emes" To 1no0 t$e ran1in of t$e .D2* Mutua% 2und Sc$emes" To 1no0 t$e di5ersify portfo%io of .D2* Mutua% 2und" To 1no0 t$e ser5ice 0$ic$ .D2* Mutua% 2und is pro5idin to its in5estors 0it$ compare to ot$er mutua% funds"

*.APT)R 8

A5O'! HDFC EM'!'A# F' D

6" /.< .D2* M7T7A+ 27ND !" SPONSORS 8" TR7ST)) 9" A/ARDS

6-2 ) %hy HDFC Mutual Fund?

.D2* Mutua% 2und is one of t$e %ar est mutua% funds and 0e%%-estab%is$ed fund $ouse in t$e country 0it$ consistent and abo5e a5era e fund performance across cate ories since its incorporation on December 6A, 6HHH" /$i%e our past e4perience does ma1e us a 5eteran, but 0$en it comes to in5estments, 0e $a5e ne5er be%ie5ed t$at t$e e4perience is enou $"

Our "nBe.tment 1hilo.ophy

T$e sin %e most important factor t$at dri5es .D2* Mutua% 2und is its be%ief to i5e t$e in5estor t$e c$ance to profitab%y in5est in t$e financia% mar1et, 0it$out constant%y 0orryin about t$e mar1et s0in s" To rea%iFe t$is be%ief, .D2* Mutua% 2und $as set up t$e infrastructure re&uired to conduct a%% t$e fundamenta% researc$ and bac1 it up 0it$ effecti5e ana%ysis" Our stron emp$asis on mana in trends" and contro%%in portfo%io ris1 a5oids c$asin t$e %atest fadsK and

%e Offer
/e be%ie5e, t$at, by i5in t$e in5estor %on -term benefits, 0e $a5e to constant%y re5ie0 t$e mar1ets for ne0 trends, to identify ne0 ro0t$ sectors and s$are t$is 1no0%ed e 0it$ our in5estors in t$e form of product offerin s" /e $a5e come up 0it$ 5arious products across asset and ris1 cate ories to enab%e in5estors to in5est in %ine 0it$ t$eir in5estment objecti5es and ris1 ta1in capacity" Besides, 0e a%so offer Portfo%io Mana ement Ser5ices"

Our A+hieBement.
.D2* Asset Mana ement *ompany ?AM*@ is t$e first AM* in #ndia to $a5e been assi ned t$e L*R#S#+ 2und .ouse +e5e% M 6I ratin " T$is is its $i $est 2und 'o5ernance and Process Nua%ity Ratin 0$ic$ ref%ects t$e $i $est o5ernance %e5e%s and fund mana ement practices at .D2* AM* #t is t$e on%y fund $ouse to $a5e been assi ned t$is ratin for t0o years in

succession" O5er t$e past, 0e $a5e 0on a number of a0ards and acco%ades for our performance

6-4 ) S1O SORS

Hou.ing DeBelopment Finan+e Corporation #imited @HDFC A.D2* 0as

incorporated in 6HJJ as t$e first specia%iFed Mort a e *ompany in #ndia" .D2* pro5ides financia% assistance to indi5idua%s, corporate and de5e%opers for t$e purc$ase or construction of residentia% $ousin " #t a%so pro5ides property re%ated ser5ices ?e" " property identification, sa%es ser5ices and 5a%uation@, trainin and consu%tancy" Of t$ese acti5ities, $ousin finance remains t$e dominant acti5ity" .D2* $as a c%ient base of around 6! %ac borro0ers, around G %ac depositors, o5er 6"AG %ac s$are$o%ders and :A,AAA deposit a ents, as at Marc$ 86, !AAG" .D2* $as raised funds from internationa% a encies suc$ as t$e /or%d Ban1, #2* ?/as$in ton@, 7SA#D, D)', ADB and 3f/, internationa% syndicated %oans, domestic term %oans from ban1s and insurance companies, bonds and deposits" .D2* $as recei5ed t$e $i $est ratin for its bonds and deposits pro ram for t$e t$irteent$ year in succession" .D2* Standard +ife #nsurance *ompany +imited, promoted by .D2* 0as t$e first %ife insurance company in t$e pri5ate sector to be ranted a *ertificate of Re istration ?on October !8, !AAA@ by t$e #nsurance Re u%atory and De5e%opment Aut$ority to transact %ife insurance business in #ndia"

Standard #ife "nBe.tment. #imited - T$e Standard +ife Assurance *ompany 0as
estab%is$ed in 6G!: and $as considerab%e e4perience in %oba% financia% mar1ets" T$e company 0as present in t$e #ndian %ife insurance mar1et from 6G9J to 6H8G 0$en a encies 0ere set up in 3o%1ata and Mumbai" T$e company re-entered t$e #ndian mar1et in 6HH:, 0$en an a reement 0as si ned 0it$ .D2* to %aunc$ an insurance joint 5enture" On Apri% !AA;, t$e Board of T$e Standard +ife Assurance *ompany recommended t$at it s$ou%d demutua%ise and Standard +ife p%c f%oat on t$e +ondon Stoc1 )4c$an e" At a Specia% 'enera% Meetin $e%d in May 5otin members o5er0$e%min %y 5oted in fa5our of t$is" T$e *ourt of Session in Scot%and appro5ed t$is in -une and Standard +ife p%c f%oated on t$e +ondon Stoc1 )4c$an e on 6At$ -u%y !AA;" Standard +ife #n5estments is a %eadin asset mana ement company, 0it$

appro4imate%y 7SO !;J bi%%ion as at Marc$ 86, !AAG, of assets under mana ement" T$e company operates in t$e 73, *anada, .on 3on , *$ina, 3orea, #re%and, Paris, Sydney and t$e 7SA to ensure it is ab%e to form a tru%y %oba% in5estment 5ie0" #n order to meet t$e different needs and ris1 profi%es of its c%ients, Standard +ife #n5estments +imited mana es a di5erse portfo%io co5erin a%% of t$e major mar1ets 0or%d-0ide, 0$ic$ inc%udes a ran e of pri5ate and pub%ic e&uities, deri5ati5e instruments o5ernment and company bonds, property in5estments and 5arious

6-6 ) !R'S!EE
.D2* Trustee *ompany +imited, a company incorporated under t$e *ompanies Act, 6H:; is t$e Trustee to .D2* Mutua% 2und 5ide t$e Trust deed dated -une G, !AAA, as amended from time to time" .D2* Trustee *ompany +td is 0$o%%y o0ned subsidiary of .D2*

!he 5oard of Dire+tor. of HDFC !ru.tee +ompany #imited +on.i.t. of the following eminent per.on."
Mr" Ani% 3umar .irjee Mr" -ames Aird Mr" S$is$ir 3" Di0anji Mr" Ranjan San $i Mr" (" Srini5asa Ran an

6-8 ) Award. 0 A++olade.

C 5C ) !V 27 ) CR"S"# Mutual Fund of the (ear Award. 4;;7> @6 award.A
2- HDFC 1ruden+e Fund 0as t$e on%y sc$eme t$at 0on t$e *NB* - T( 6G - *R#S#+ Mutua%

2und of t$e <ear A0ard !AAG in t$e Mo.t Con.i.tent 5alan+ed Fund under CR"S"# F C1R for t$e ca%endar year !AAJ ?from amon st 8 sc$emes@" 4- HDFC Ca.h Management Fund ) SaBing. 1lan 0as t$e on%y sc$eme t$at 0on t$e *NB* - T( 6G - *R#S#+ Mutua% 2und of t$e <ear A0ard !AAG in t$e Mo.t Con.i.tent #iCuid Fund under CR"S"# F C1R for t$e ca%endar year !AAJ ?from amon st : sc$emes@" 6- HDFC Ca.h Management Fund ) SaBing. 1lan 0as t$e on%y sc$eme t$at 0on t$e *NB* - T( 6G - *R#S#+ Mutua% 2und of t$e <ear A0ard !AAG in t$e #iCuid S+heme E Retail Category for t$e ca%endar year !AAJ ?from amon st 6H sc$emes@"

"CRA Mutual Fund Award. 4;;7> @6 award.A 2- HDFC MF Monthly "n+ome 1lan -#ong !erm 1lan- Ran1ed a SeBen Star Fund and $as been a0arded t$e Gold Award for G5e.t 1erforman+eG in t$e cate ory of GOpen Ended Marginal ECuityG for t$e t$ree year period endin December 86, !AAJ ?from amon st !J sc$emes@

4- HDFC High "ntere.t Fund ) Short !erm 1lan - Ran1ed a FiBe Star Fund indicatin performance amon t$e top 6AB in t$e cate ory of GOpen Ended Debt ) Short !ermG for one year period endin December 86, !AAJ ?from amon st !A sc$emes@"

6- HDFC 1ruden+e Fund - Ran1ed a FiBe Star Fund indicatin performance amon t$e top 6AB in t$e cate ory of GOpen Ended 5alan+edG for t$e t$ree year period endin December 86, !AAJ ?from amon st 6; sc$emes@"

#ipper Fund Award. 4;;7> 2- HDFC ECuity Fund ) Growth $as been a0arded t$e DBest Fund oBer !en (ear.H in t$e HECuity "ndia CategoryH at t$e #ipper Fund Award. 4;;7 ?form amon st !8 sc$emes@" #t 0as a0arded t$e Best 2und o5er ten years in !AA; and !AAJ as 0e%%" !AAG ma1es it t$ree in a ro0

CHA1!ER 8 1ROD'C! 0 SERV"CE OF HDFC M'!'A# F' D

6" T<P)S O2 M7T7A+ 27ND !" #N()STM)NT P+AN 8" PROD7*T O2 M7T7A+ 27ND

8-2 ) !(1ES OF M'!'A# F' D SCHEME

@aA

Open)ended FundI S+heme

An open-ended fund or sc$eme is one t$at is a5ai%ab%e for subscription and repurc$ase on a continuous basis" T$ese sc$emes do not $a5e a fi4ed maturity period" #n5estors can con5enient%y buy and se%% units at Net Asset (a%ue ?NA(@ re%ated prices 0$ic$ are dec%ared on a dai%y basis" T$e 1ey feature of open-end sc$emes is %i&uidity"

@bAClo.e)ended FundI S+heme

A c%ose-ended fund or sc$eme $as a stipu%ated maturity period e" " :-J years" T$e fund is open for subscription on%y durin a specified period at t$e time of %aunc$ of t$e sc$eme" #n5estors can in5est in t$e sc$eme at t$e time of t$e initia% pub%ic issue and t$ereafter t$ey can buy or se%% t$e units of t$e sc$eme on t$e stoc1 e4c$an es 0$ere t$e units are %isted" #n order to pro5ide an e4it route to t$e in5estors, some c%ose-ended funds i5e an option of se%%in bac1 t$e units to t$e mutua% fund t$rou $ periodic repurc$ase at NA( re%ated prices" S)B# Re u%ations stipu%ate t$at at %east one of t$e t0o e4it routes is pro5ided to t$e in5estor i"e" eit$er repurc$ase faci%ity or t$rou $ %istin on stoc1 e4c$an es" T$ese mutua% funds sc$emes disc%ose NA( enera%%y on 0ee1%y basis"

@+ASe+tor .pe+ifi+ fund.I.+heme.

T$ese are t$e fundsEsc$emes 0$ic$ in5est in t$e securities of on%y t$ose sectors or industries as specified in t$e offer documents" e" " P$armaceutica%s, Soft0are, 2ast Mo5in *onsumer 'oods ?2M*'@, Petro%eum stoc1s, etc" T$e returns in t$ese funds are dependent on t$e performance of t$e respecti5e sectorsEindustries" /$i%e t$ese funds may i5e $i $er returns, t$ey are more ris1y compared to di5ersified funds" #n5estors need to 1eep a 0atc$ on t$e performance of t$ose sectorsEindustries and must e4it at an appropriate time" T$ey may a%so see1 ad5ice of an e4pert"

@dA!aD SaBing S+heme.

T$ese sc$emes offer ta4 rebates to t$e in5estors under specific pro5isions of t$e #ncome Ta4 Act, 6H;6 as t$e 'o5ernment offers ta4 incenti5es for in5estment in specified a5enues" e" " )&uity +in1ed Sa5in s Sc$emes ?)+SS@" Pension sc$emes %aunc$ed by t$e mutua% funds a%so offer ta4 benefits" T$ese sc$emes are ro0t$ oriented and in5est pre-dominant%y in e&uities" T$eir ro0t$ opportunities and ris1s associated are %i1e any e&uity-oriented sc$eme"

8-4 ) " VES!ME ! 1#A

8-4-2 ) S(S!EMA!"C " VES!ME ! 1#A

@S"1A

.D2* M2 S#P is simi%ar to a Recurrin Deposit" )5ery mont$ on a specified date an amount you c$oose is in5ested in a mutua% fund sc$eme of your c$oice" T$e dates current%y a5ai%ab%e for S#Ps are t$e 2.t/ 9th/ 2;th/ 29th/ 4;th and the 49th of a mont$" <ouI%% be amaFed to %earn about t$e many benefits of in5estin t$rou $ .D2* M2 S#P" 5enefit 2 > 5e+ome A Di.+iplined "nBe.ter Bein discip%ined - #tIs t$e 1ey to in5estin success" /it$ t$e .D2* M2 Systematic #n5estment P%an you commit an amount of your c$oice ?minimum of Rs" 6AAA and in mu%tip%es of Rs" 6AA t$ereofP@ to be in5ested e5ery mont$ in one of our sc$emes" T$in1 of eac$ S#P payment as %ayin a bric1" One by one, youI%% see t$em transform into a bui%din " <ouI%% see your in5estments accrue mont$ after mont$" #tIs as simp%e as i5in at %east ; postdated mont$%y c$e&ues to us for a fi4ed amount in a sc$eme of your c$oice" #tIs t$e perfect so%ution for irre u%ar in5estors" PMinimum amounts may differ for eac$ Sc$eme" P%ease refer to S#P )nro%ment 2orm for detai%s"

5enefit 4 > Rea+h (our Finan+ial Goal #ma ine you 0ant to buy a car a year from no0, but you donIt 1no0 0$ere t$e do0n-payment 0i%% come from" .D2* M2 S#P is a perfect too% for peop%e 0$o $a5e a specific, future financia% re&uirement" By in5estin an amount of your c$oice e5ery mont$, you can p%an for and meet financia% oa%s, %i1e funds for a c$i%dIs education, a marria e in t$e fami%y or a comfortab%e postretirement %ife" T$e tab%e be%o0 i%%ustrates $o0 a %itt%e e5ery mont$ can o a %on 0ay" Monthly SaBing. ) %hat your .aBing. may generate SaBing. per month @for 29 year.A Tota% amount in5ested ?Rs" in +acs@ Rate of return ;"AB G"AB 6A"AB

?rupees in %acs, 6: years %ater@P 9;;; 8;;; 6;;; 4;;; 2;;; H"A J"! :"9 8"; 6"G 69"; 66"J G"G :"G !"H 6J"9 68"H 6A"9 J"A 8": !A"H 6;"J 6!": G"8 9"!

PMont$%y insta%ments, compounded mont$%y, for a 6:-year period"

Di.+laimer> T$e i%%ustration abo5e is mere%y indicati5e in nature and s$ou%d not be construed as in5estment ad5ice" #t does not in any manner imp%y or su Mutua% 2und Sc$eme?s@" P%ease read Ris1 2actors" est performance of any .D2*

5enefit 6 > !a,e AdBantage of Rupee Co.t ABeraging

Most in5estors 0ant to buy stoc1s 0$en t$e prices are %o0 and se%% t$em 0$en prices are $i $" But timin t$e mar1et is timeconsumin and ris1y" A more successfu% in5estment strate y is to adopt t$e met$od ca%%ed Rupee *ost A5era in " To i%%ustrate t$is 0eI%% compare in5estin t$e identica% amounts t$rou $ a S#P and in one %ump sum"

#ma ine Sures$ in5ests Rs" 6AAA e5ery mont$ in an e&uity mutua% fund sc$eme startin in -anuary" .is friend, Rajes$, in5ests Rs" 6!AAA in one %ump sum in t$e same sc$eme" T$e fo%%o0in tab%e i%%ustrate $o0 t$eir respecti5e in5estments 0ou%d $a5e performed from -an to Dec: Sure.hJ. "nBe.tment RaKe.hJ. "nBe.tment

Month $an);8 Feb);8 Mar);8 Apr);8 May);8 $un);8 $ul);8 Aug);8 Sep);8 O+t);8 oB);8 De+);8

NA( H"89: H"8HH G"6!8 G"J:A G"A6! G"H!: H"6A! G"86A J":;G ;"9;! ;"H86 J";AA

Amount 6AAA 6AAA 6AAA 6AAA 6AAA 6AAA 6AAA 6AAA 6AAA 6AAA 6AAA 6AAA

7nits 6AJ"AAH6 6A;"8H98 6!8"6AJ! 669"!G:J 6!9"G6!G 66!"A99G 6AH"G;;A 6!A"88;H 68!"68:8 6:9"J:AH 699"!JH8 686":JGH

Amount 6!AAA

7nits 6!G9"6AH6

PNA( as on t$e 6At$ e5ery mont$" T$ese are assumed NA(s in a 5o%ati%e mar1et

Di.+laimer> T$e i%%ustration abo5e is mere%y indicati5e in nature and s$ou%d not be construed

as in5estment ad5ice" #t does not in any manner imp%y or su

est performance of any .D2*

Mutua% 2und Sc$eme?s@" Rupee *ost A5era in neit$er ensures you profits nor protects you from ma1in a %oss in dec%inin mar1ets" P%ease read Ris1 2actors" As seen in t$e tab%e, by in5estin t$rou $ S#P, you end up buyin more units 0$en t$e price is %o0 and fe0er units 0$en t$e price is $i $" .o0e5er, o5er a period of time t$ese mar1et f%uctuations are enera%%y a5era ed" And t$e a5era e cost of your in5estment is often reduced"

At t$e end of t$e 6! mont$s, Sures$ $as more units t$an Rajes$, e5en t$ou $ t$ey in5ested t$e same amount" T$atIs because t$e a5era e cost of Sures$Is units is muc$ %o0er t$an t$at of Rajes$" Rajes$ made on%y one in5estment and t$at too 0$en t$e per-unit price 0as $i $" Sures$Is a5era e unit price Q 6!AAAE69GA";A6! Q Rs" G"6A: Rajes$Is a5era e unit price Q Rs" H"89:

5eneft 8 > Grow (our "nBe.tment %ith Compounded 5enefit.

#t is far better to in5est a sma%% amount of money re u%ar%y, rat$er t$an sa5e up to ma1e one %ar e in5estment" T$is is because 0$i%e you are sa5in t$e %ump sum, your sa5in s may not earn muc$ interest" /it$ .D2* M2 S#P, eac$ amount you in5est ro0s t$rou $ compoundin benefits as 0e%%" T$at is, t$e interest earned on your in5estment a%so earns interest" T$e fo%%o0in e4amp%e i%%ustrates t$is" #ma ine Ne$a is !A years o%d 0$en s$e starts 0or1in " )5ery mont$ s$e sa5es and in5ests Rs" :,AAA ti%% s$e is !: years o%d" T$e tota% in5estment made by $er o5er : years is Rs" 8 %a1$s"Arjun a%so starts 0or1in 0$en $e is !A years o%d" But $e doesnIt in5est mont$%y" .e ets a %ar e bonus of Rs" 8 %a1$s at !: and decides to in5est t$e entire amount" Bot$ of t$em decide not to 0it$dra0 t$ese in5estments ti%% t$ey turn :A" At :A, Ne$aIs #n5estments $a5e ro0n to Rs" 9;,;G,!J8P 0$ereas ArjunIs in5estments $a5e ro0n to Rs"

8;,6J,AG9P" Ne$aIs sma%% contributions to a S#P and $er decision to start in5estin ear%ier t$an Arjun $a5e made $er 0ea%t$ier by o5er Rs" 6A %a1$s" P2i ures based on 6AB p"a" interest compounded mont$%y" Di.+laimer> T$eT$e i%%ustration abo5e is mere%y indicati5e in nature and s$ou%d not be construed as in5estment ad5ice" #t does not in any manner imp%y or su any .D2* Mutua% 2und Sc$eme?s@" P%ease read Ris1 2actors" est performance of

5enefit 9 > Do All !hi. Effortle..ly

#n5estin

0it$ .D2* M2 S#P is easy" Simp%y

i5e us post-dated c$e&ues or opt for an

Auto Debit from you ban1 account for an amount of your c$oice ?minimum of Rs" 6AAA and in mu%tip%es of Rs" 6AA t$ereofP@ and 0eI%% in5est t$e money e5ery mont$ in a fund of your c$oice" T$e p%ans are comp%ete%y f%e4ib%e" <ou can in5est for a minimum of si4 mont$s, or for as %on as you 0ant" <ou can a%so decide to in5est &uarter%y and 0i%% need to in5est for a minimum of t0o &uarters"

8-4-4 ) S(S!EMA!"C !RA SFER 1#A

@S!1A

STP refers to Systematic Transfer P%an 0$ere in an in5estor in5ests a %ump sum amount in

one sc$eme and re u%ar%y transfers ?i"e" s0itc$es@ a pre-defined amount into anot$er sc$eme" )5ery mont$ on a specified date an amount you c$oose is transfered from one mutua% fund sc$eme to anot$er of your c$oice" *urrent%y, 2i4ed Systematic Transfer P%an ?2STP@ - Mont$%y #nter5a% and *apita% Appreciation Systematic Transfer P%an ?*ASTP@ - Mont$%y #nter5a% faci%ity is a5ai%ab%e to t$e 7nit $o%ders on 2.t/ 9th/ 2;th/ 29th/ 4;th and 49th of a month and 2STP - Nuarter%y #nter5a% and *ASTP Nuarter%y #nter5a% faci%ity is a5ai%ab%e to t$e 7nit $o%ders on 2.t/ 9th/ 2;th/ 29th/ 4;th and 49th of the fir.t month of eac$ &uarter" T$e Entry #oad Stru+ture for t$e transferee sc$emes - .D2* 'ro0t$ 2und, .D2* )&uity 2und, .D2* Top !AA 2und, .D2* *apita% Bui%der 2und, .D2* *ore = Sate%%ite 2und, .D2* Premier Mu%ti-*ap 2und, .D2* Ba%anced 2und, .D2* Prudence 2und, .D2* +on Term Ad5anta e 2und and .D2* Ta4Sa5er 0i%% be as fo%%o0s: T$e EDit #oad Stru+ture is as fo%%o0s: 2or Transferee Sc$emes : .D2* +on Term Ad5anta e 2und and .D2* Ta4Sa5er M Ni% 2or Transferee Sc$emes : .D2* 'ro0t$ 2und, .D2* )&uity 2und, .D2* Top !AA 2und, .D2* *apita% Bui%der 2und, .D2* *ore = Sate%%ite 2und, .D2* Premier Mu%ti-*ap 2und, .D2* Ba%anced 2und and .D2* Prudence 2und" #n respect of eac$ in5estment t$rou $ STP %ess t$an Rs" : crore in 5a%ue, an )4it +oad of 6"!:B is payab%e if units are redeemed E s0itc$ed-out on or before ! years from t$e date of a%%otment" #n respect of eac$ in5estment t$rou $ STP e&ua% to or reater t$an Rs" : crore in 5a%ue, no )4it +oad is payab%e" T$us, t$is faci%ity offers t$e benefits simi%ar to t$ose of an S#P and is suitab%e for in5estors 0$o intend to in5est systematica%%y and current%y $a5e funds for in5estments"

8-6 ) 1ROD'C!S OF M'!'A# F' D

E<'"!(I GRO%!H F' D

CH"#DRE JS G"F! F' D

#"<'"D F' D

DE5!I " COME F' D

E<'"!(I GRO%!H F' D

DE5!I" COME F' D

HDFC Growth Fund HDFC !op 4;; Fund HDFC Core and Satellite Fund HDFC "ndeD Fund ) Sen.eD 1lan HDFC "ndeD Fund ) Sen.eD 1lu. 1lan HDFC 5alan+ed Fund HDFC #ong !erm AdBantage Fund @E#SSA HDFC #ong !erm ECuity Fund HDFC "nfra.tru+ture Fund HDFC Capital 5uilder Fund HDFC 1remier Multi)Cap HDFC "ndeD Fund ) ifty 1lan

HDFC MF Monthly "n+ome 1lan ) Short !erm 1lan

HDFC Multiple (ield Fund

HDFC "n+ome Fund

HDFC Short !erm 1lan

HDFC Gilt Fund ) Short !erm 1lan

HDFC Floating Rate "n+ome Fund )Short !erm 1lan

HDFC Arbitrage Fund HDFC ECuity Fund HDFC 1ruden+e Fund HDFC !aDSaBer @E#SSA HDFC Mid)Cap Opportunitie. Fund HDFC MF Monthly "n+ome 1lan ) #ong !erm 1lan HDFC Ca.h Management Fund ) SaBing. 1lu. 1lan

HDFC Multiple (ield Fund ) 1lan 4;;9

HDFC High "ntere.t Fund

HDFC High "ntere.t Fund ) Short term

1lan

HDFC Gilt Fund ) #ong !erm 1lan

HDFC Floating Rate "n+ome Fund ) #ong !erm 1lan

CH"#DRE JS G"F! F' D

HDFC ChildrenH. Gift Fund ) "nBe.tment 1lan HDFC ChildrenH. Gift Fund ) SaBing. 1lan

#"<'"D F' D
HDFC #iCuid Fund HDFC #iCuid Fund 1remium 1lan HDFC #iCuid Fund 1remium 1lu. 1lan HDFC Ca.h Management Fund E Call HDFC Ca.h Management Fund ) SaBing. 1lan

SOME 1O1'#AR F' DS ARE EL1#A" HERE

HDFC Growth Fund

.D2* 'ro0t$ fund, an open-ended ro0t$ sc$eme, app%ies an in5estment approac$ based on a set of 0e%% estab%is$ed but f%e4ib%e princip%es t$at emp$asiFe t$e concept of sustainab%e economic earnin s cas$ return on in5estment" T$e objecti5e is to identify business 0it$ superior ro0t$ prospects nd ood mana ement at a reasonab%e priceK" T$e fi5e basic princip%es t$at ser5e t$e foundation for t$is approac$ are as fo%%o0s:

R 2ocus on t$e %on term R #n5estment confers proportionate o0ners$ip of t$e business R Maintain a mar in safety R Maintain a ba%anced out%oo1 on t$e mar1et R Discip%ine approac$ to se%%in "

T$e in5estment p$i%osop$y rests on a t0o-pron ed approac$" ;A-GAB of t$e portfo%io 0i%% aim to stay in5ested for most of t$e time in %ar e cap stoc1s t$at satisfy t$e abo5e in5estment criteria" T$is a%%ocation to %ar e cap stoc1s a%so ensures reater %i&uidity in t$e portfo%io" !A-9AB of t$e portfo%io 0i%% be in5ested in companies of sca%e t$at are eit$er %ar e mar1et s$are $o%der

5a.i+ S+heme "nformation/

Nature of Sc$eme #nception Date OptionEP%an Open )nded 'ro0t$ Sc$eme September 66, !AAA Di5idend P%an, 'ro0t$ P%an" T$e Di5idend P%an offers Di5idend Payout and Rein5estment 2aci%ity"

!he a..et allo+ation under the S+heme will be a. follow. : Sr-no !ype of "n.trument. ormal Allo+ation @M of 2 )&uity = )&uity re%ated GA-6AA instruments Debt 4 Mar1et *as$ ?inc%udin money at ca%%@ 1lan name DiBidentd plan Growth plan AV Date 6G Au !AAG 6G Au !AAG AV Balue !H"A!JA :G"H8JA Securities, Money = AA-!A AA +o0 to medium et A..etA ormal Allo+ation @M of AA et A..etA Medium to $i $ Ri., 1rofile

instruments

Return.
HDFC Fund Date Growth @ AV a. at eBaluation date/ R.- 1er unitA 1eriod AV Return.@MA NN 5en+hmar, O Mar+h 6;/ 4;;: +ast 9:G days 9:"9;6 68"G6PP Return.@MAP !"8JPP 96-8:4

De+ember 4;;: $une 4=/ 4;;: $une 6;/ 4;;9 $une 6;/ 4;;6 $une 6;/ 2==7 September 4;;;

47/ +ast days@

Si4

mont$s

?6G: JH";;JA

-8!"GGP

-88"8GP

+ast 6 <ear ?8;J days@ +ast 8 <ears ?6AH; days@ +ast : <ears ?6G!J days@ +ast 6A <ears ?8;:8 days@ 22/ Since days@ #nception

:9";H: !:"9HH 6A"G!H N"A

-!"!!PP !J"HJPP 8J":GPP N"A" !8"H;PP

-G"AJPP !8"!6PP 8A"6PP 6:"!:PP 69"99PP

?!G9H 6A"AAA

P Abso%ute Returns

PP *ompounded Annua%ised Returns S S)NS)T

U Due to an o5er a%% s$arp rise in t$e stoc1 prices V Past performance may or may not be sustained in t$e future

S"1 Return.
S"1 "nBe.tment. !otal Amount "nBe.ted @R.-A Mar,et Value a. on $une 6;/ 4;;7 Return. @Annuali.edAQM 5en+hmar, Return.
S S)NS)T

Sin+e "n+eption H9,AAA"AA 88G,;GA";9 86"G9B !!"JJB

9 (ear ;A,AAA"AA 66:,J::"8H !;";9B !A";9B

6 (ear 8;,AAA"AA 98,J9G":G 68"6AB ;"JJB

2 (ear 6!,AAA"AA H,G:J"8; -86"99B -8;"6:B

Benc$mar1 BS) Sense4 Disc%aimer: T$e abo5e in5estment simu%ation is for i%%ustrati5e purposes on%y and s$ou%d not be construed as a promise on minimum returns and safe uard of capita%" T$e AM* E Mutua% 2und is not uaranteein or promisin or forecastin any returns" S#P does not assure a profit or

uarantee protection a ainst a %oss in a dec%inin mar1et" P%ease refer S#P )nro%ment 2orm or contact nearest #S* for S#P +oad Structure

HDFC !O1)4;; F' D

"nBe.tment ObKe+tiBe

T$e in5estment objecti5e is to enerate %on term capita% appreciation from a portfo%io of e&uity and e&uity %in1ed instruments" T$e in5estment portfo%io for e&uity and e&uity %in1ed instruments 0i%% be primari%y dra0n from t$e companies in t$e BS) !AA #nde4" 2urt$er, t$e Sc$eme may a%so in5est in %isted companies t$at 0ou%d &ua%ify to be in t$e top !AA by mar1et capita%iFation on t$e BS) e5en t$ou $ t$ey may not be %isted on t$e BS) T$is inc%udes participation in %ar e #POs 0$ere in t$e mar1et capita%iFation of t$e company based on issue price 0ou%d ma1e t$e company a part of t$e top !AA companies %isted on t$e BS) based on mar1et capita%iFation

5a.i+ S+heme "nformation ature of S+heme "n+eption Date OptionI1lan Open Ended Growth S+heme October 66, 6HH; Di5idend P%an,'ro0t$ P%an" T$e Di5idend P%an offers Di5idend Payout and Rein5estment 2aci%ity"

1lan ame DiBidend 1lan Growth 1lan

AV Date 6G Au !AAG 6G Au !AAG

AV Amount 8G"!H 6!H":;

"nBe.tment 1attern

T$e Sc$eme may a%so in5est upto !:B of net assets of t$e Sc$eme in deri5ati5es suc$ as 2utures = Options and suc$ ot$er deri5ati5e instruments as may be introduced from time to time for t$e purpose of $ed in and portfo%io ba%ancin and and ot$er uses as may be permitted under t$e re u%ations and uide%ines" T$e Sc$eme may a%so in5est a part of its corpus, not e4ceedin 9AB of its net assets, in o5erseas mar1ets in '%oba% Depository Receipts ?'DRs@, ADRs, o5erseas e&uity, bonds and mutua% funds and suc$ ot$er instruments as may be a%%o0ed under t$e Re u%ations from time to time"

Return.
HDFC Fund Date !op 4;; @ AV a. at eBaluation date/ R.- 1er unitA Period NA( Returns?B@ OO Benc$mar1 V Mar+h 6;/ 4;;: De+ember 4;;: $une 4=/ 4;;: $une 6;/ 4;;9 $une 6;/ 4;;6 $une 6;/ 2==7 O+tober 22/ 2==3 +ast 9:G days 47/ +ast days@ +ast 6 <ear ?8;J days@ +ast 8 <ears ?6AH; days@ +ast : <ears ?6G!J days@ +ast 6A <ears ?8;:8 days@ Since days@ #nception 6!A"89 :J"898 !8"8:G 6!"J9H -9"A;PP !;"!8PP 8J";PP !J"6!PP !:"8PP -G"G:PP !6"!PP !H"98PP 6J"::PP 6:"6GPP Si4 mont$s 6A9":A9 ?6G: 6;J"GGGA G"!9PP -86"!:P Returns?B@S 9"9:PP -8J":8P 229-848

?9!GA 6A"AAA

S"1 Return.
S"1 "nBe.tment. Sin+e "n+eption !otal Amount "nBe.ted @R.-A Mar,et Value a. on $une 6;/ 696,AAA"AA G8:,:8:"9: 6!A,AAA"AA ;A,AAA"AA 8;,AAA"AA 6!,AAA"AA 2; (ear 9 (ear 6 (ear 2 (ear

:GA,6!H"A9 668,8J:"A! 96,;;6"!H H,G98"A6

4;;7 Return. @Annuali.edAQM 5en+hmar, Return. !J"G:B 6G"8!B !H";:B !A"!:B !:"JJB 6G"HAB H"J8B :"G!B -86";9B -8G"9AB

5en+hmar, ) 5SE 4;;

Disc%aimer: T$e abo5e in5estment simu%ation is for i%%ustrati5e purposes on%y and s$ou%d not be construed as a promise on minimum returns and safe uard of capita%" T$e AM* E Mutua% 2und is not uaranteein or promisin or forecastin any returns" S#P does not assure a profit or uarantee protection a ainst a %oss in a dec%inin mar1et" P%ease refer S#P )nro%ment 2orm or contact nearest #S* for S#P +oad Structure

HDFC E E<'"!( F'

.D2* )&uity 2und is an open-ended

ro0t$ sc$eme, 0$ic$ aims to

enerate %on -

term capita% appreciation" T$e sc$eme maintains a focused portfo%io predominant%y of %ar e cap stoc1s, t$rou $ t$ere is contro%%ed e4posure to mid caps" T$e sc$emes $o0e5er a%0ays remain di5ersified across sectors" Moreo5er, t$e sectora% t$e a%%ocation is done 1eepin in mind to di5ersify across sectors 0ea1%y co-re%ated to t$eme 0$i%e mana in ood &ua%ity"

eac$ ot$er to furt$er reduce ris1" T$e under%yin

sc$eme is to in5est in businesses t$at are sustainab%e and for

5a.i+ S+heme "nformation

ature of S+heme "n+eption Date OptionI1lan

Open Ended Growth S+heme -anuary A6, 6HH: Di5idend P%an,'ro0t$ P%an" T$e Di5idend P%an offers Di5idend Payout and Rein5estment 2aci%ity"

1lan ame DiBidend 1lan Growth 1lan

AV Date 6G Au !AAG 6G Au !AAG

AV Amount 8;"6;8A 6:;"J;;A

"nBe.tment Strategy>
#n order to pro5ide %on term capita% appreciation, t$e Sc$eme 0i%% in5est predominant%y in ro0t$ companies" *ompanies se%ected under t$is portfo%io 0ou%d as far as practicab%e consist of medium to %ar e siFed companies 0$ic$:

are %i1e%y ac$ie5e abo5e a5era e ro0t$ t$an t$e industry> enjoy distinct competiti5e ad5anta es, and

$a5e superior financia% stren t$s" T$e aim 0i%% be to bui%d a portfo%io, 0$ic$ represents a cross-section of t$e stron ro0t$ companies in t$e pre5ai%in mar1et" #n order to reduce t$e ris1 of 5o%ati%ity, t$e Sc$eme 0i%% di5ersify across major industries and economic sectors

"nBe.tment 1attern
T$e asset a%%ocation under t$e Sc$eme 0i%% be as fo%%o0s :
Sr- o2 4 A..et !ype )&uities and )&uity Re%ated #nstruments Debt = Money Mar1et #nstruments @M of 1ortfolioA GA - 6AA A - !A Ri., 1rofile Medium to .i $ +o0 to Medium

#n5estment in Securitised debt, if underta1en, 0ou%d not e4ceed !AB of t$e net assets of t$e sc$eme" T$e Sc$eme may a%so in5est upto !:B of net assets of t$e Sc$eme in deri5ati5es suc$ as 2utures = Options and suc$ ot$er deri5ati5e instruments as may be introduced from time to time for t$e purpose of $ed in and portfo%io ba%ancin and ot$er uses as may be permitted under t$e Re u%ations"

T$e Sc$eme may a%so in5est a part of its corpus, not e4ceedin 9AB of its net assets, in o5erseas mar1ets in '%oba% Depository Receipts ?'DRs@, ADRs, o5erseas e&uity, bonds and mutua% funds and suc$ ot$er instruments as may be a%%o0ed under t$e Re u%ations from time to time" A%so refer to t$e Section on Po%icy on off-s$ore #n5estments by t$e Sc$eme?s@"

#f t$e in5estment in e&uities and re%ated instruments fa%%s be%o0 JAB of t$e portfo%io of t$e Sc$eme at any point in time, it 0ou%d be endea5ored to re5ie0 and reba%ance t$e composition"

Not 0it$ standin anyt$in stated abo5e, subject to t$e re u%ations, t$e asset a%%ocation pattern indicated abo5e may c$an e from time to time, 1eepin in 5ie0 mar1et conditions, mar1et opportunities, app%icab%e re u%ations and po%itica% and economic factors" #t may be c%ear%y

understood t$at t$e percenta es stated abo5e are on%y indicati5e and are not abso%ute and t$at t$ey can 5ary substantia%%y dependin upon t$e perception of t$e AM*, t$e intention bein at a%% times to see1 to protect t$e NA( of t$e sc$eme" Suc$ c$an es 0i%% be for s$ort term and defensi5e considerations" Pro5ided furt$er and subject to t$e abo5e, any c$an e in t$e asset a%%ocation affectin t$e in5estment profi%e of t$e Sc$eme and amountin to a c$an e in t$e 2undamenta% Attributes of t$e Sc$eme s$a%% be effected in accordance 0it$ sub-re u%ation ?6:A@ of re u%ation 6G of S)B# re u%ations"

Return.

HDFC Fund Date

ECuity @ AV a. at eBaluation date/ R.- 1er unitA 1eriod AV

286-2:2

Return. @MA NN 5en+hmar, O @MA P 6"9JPP -8H"8GP

Return.

Mar+h 6;/ 4;;: De+ember 4;;: $une 4=/ 4;;: $une 6;/ 4;;9 $une 6;/ 4;;6 $une 6;/ 2==7

+ast 9:G days

69!";A!

A"8!PP -89"GGP

47/ +ast Si4 mont$s ?6G: !6H"G:JA days@ +ast 6 <ear ?8;J days@ +ast 8 <ears ?6AH; days@ +ast : <ears ?6G!J days@ +ast days@ 6A <ears 6;:"868 J8"J;G !H"H;A

-68"88PP !9"J6PP 8;";GPP 89";JPP

-66":HPP 6G"GJPP !H"A8PP 6J"J:PP

?8;:8 J"!GA

$anuary 2/ 2==9

Since days@

#nception

?9H!H 6A"AAA

!6"JGPP

H"!!PP

Abso%ute

Returns

PP

*ompounded

Annua%ised

Returns S

S=P

*NT

:AA

V Past performance may or may not be sustained in t$e future

S"1 Return.

S"1 "nBe.tment.

Sin+e "n+eption

2; (ear

9 (ear

6 (ear

2 (ear

!otal Amount "nBe.ted @R.-A

6;!,AAA"AA

6!A,AAA"AA ;A,AAA"AA

8;,AAA"AA 6!,AAA"AA

Mar,et Value a. on $une 6;/ 6,9H9,J:8"H! 4;;7 Return. @Annuali.edAQM 5en+hmar, Return. !H":8B 6;"6GB

;9;,9HA";: 6AJ,HA9"6! 8G,HHG";J H,9AG":J

86";;B 6H"JJB

!8"J6B 6J":;B

:"!JB 8"!:B

-8J":!B -9A"!JB

Di.+laimer>
T$e abo5e in5estment simu%ation is for i%%ustrati5e purposes on%y and s$ou%d not be construed as a promise on minimum returns and safe uard of capita%" T$e AM* E Mutua% 2und is not uaranteein or promisin or forecastin any returns" S#P does not assure a profit or uarantee protection a ainst a %oss in a dec%inin mar1et" P%ease refer S#P )nro%ment 2orm or contact nearest #S* for S#P +oad Structure"

HDFC "nfra.tru+ture Fund

"nBe.tment ObKe+tiBe
To see1 %on -term capita% appreciation by in5estin predominant%y in e&uity and e&uity re%ated securities of companies en a ed in or e4pected to benefit from ro0t$ and de5e%opment of infrastructure"

5a.i+ S+heme "nformation

ature of S+heme Clo.e Ended ECuity S+heme with a maturity period of 6 year. from the date of allotment with automati+ +onBer.ion into an open)ended .+heme upon maturity of the S+heme"n+eption Date OptionI1lan Mar+h 2;/ 4;;7 DiBidend Option/ Growth Option- DiBidend Option +urrently offer. with payout fa+ility only

1lan ame Growth Option DiBidend Option

AV Date 6G Au !AAG 6G Au !AAG

AV Amount G"8G8A G"8G8A

"nBe.tment

1attern>

T$e asset a%%ocation under t$e respecti5e P%ans 0i%% be as fo%%o0s: !ype of "n.trument. Minimum et A..et.A ECuity and ECuity Related ;:B related MaDimum et A..et.A 6AAB Medium to .i $ Ri., 1rofile of the

Allo+ation @M of Allo+ation@M

of "n.trument

"n.trument. of infra.tru+ture I infra.tru+ture +ompanie. ECuity and ECuity of Related AB 8:B Medium to .i $

"n.trument.

+ompanie.

other than mentioned aboBe Debt Se+uritie. and Money AB 8:B +o0 to Medium

Mar,et "n.trument.Q and FiDed "n+ome DeriBatiBe R

P #n5estments in securitiFed debt s$a%% not norma%%y e4ceed 8AB of t$e net assets of t$e Sc$eme" T$e Sc$eme may see1 in5estment opportunity in 2orei n Securities ?ma4" 8:B of net assets@" T$e Sc$eme may ta1e deri5ati5es position for $ed in , portfo%io ba%ancin or to underta1e any ot$er strate y as permitted under S)B# Re u%ations from time to time ?ma4" !AB of t$e net assets@ based on t$e opportunities a5ai%ab%e subject to S)B# Re u%ations"

Return.

HDFC Fund Date

"nfra.tru+ture @ AV a. at eBaluation date/ R.- :-87 1er unitA Period NA( Returns ?B@ O Benc$mar1 OV ?B@ S 6"9JPP -8H"8GP Returns

Mar+h 6;/ 4;;: De+ember 47/ 4;;:

+ast 9:G days

N"A

N"A" N"A"

+ast Si4 mont$s ?6G: N"A days@

$une 4=/ 4;;: $une 6;/ 4;;9 $une 6;/ 4;;6 $une 6;/ 2==7

+ast 6 <ear ?8;J days@ +ast 8 <ears ?6AH; days@ +ast : <ears ?6G!J days@ +ast days@ 6A <ears

N"A N"A N"A

N"A" N"A" N"A" N"A"

-66":HPP 6G"GJPP !H"A8PP 6J"J:PP

?8;:8 N"A

Mar+h 2;/ 4;;7

Since days@

#nception

?66! 6A"AAA

-!:"!P

-6G"9:P

P U

Abso%ute Due

Returns to an

PP

*ompounded o5era%% s$arp

Annua%ised rise

Returns S in t$e

S=P stoc1

*NT

:AA

prices

V Past performance may or may not be sustained in t$e future

FC 1ruden+e Fund

"nBe.tment ObKe+tiBe
T$e in5estment objecti5e of t$e Sc$eme is to pro5ide periodic returns and capita% appreciation o5er a %on period of time, from a judicious mi4 of e&uity and debt in5estments, 0it$ t$e aim to pre5entE minimiFe any capita% erosion" 5a.i+ S+heme "nformation

ature of S+heme

Open Ended 5alan+ed S+heme

"n+eption Date OptionI1lan

2ebruary A6, 6HH9 Di5idend P%an, 'ro0t$ P%an" T$e Di5idend P%an offers Di5idend Payout and Rein5estment 2aci%ity"

Return.
HDFC Fund Date 1ruden+e @ AV a. at eBaluation date/ R.- 1er unitA Period NA( Returns ?B@ O Benc$mar1 OV Mar+h 6;/ 4;;: De+ember 47/ 4;;: $une 4=/ 4;;: $une 6;/ 4;;9 $une 6;/ 4;;6 $une 6;/ 2==7 +ast 9:G days +ast 6G: days +ast 6 <ear ?8;J days@ +ast 8 <ears ?6AH; days@ +ast : <ears ?6G!J days@ +ast days@ February 2/ 2==8 Since days@ P Abso%ute Returns PP *ompounded Annua%ised Returns Due to an o5era%% s$arp rise in t$e stoc1 prices #nception ?:!;8 6A"AAA !A"96PP N"A" 6A <ears 66A"68! 6;A";GJA 6!9"J6; ;9";G! 6H"!8A 6"G9PP -!H"GGP -H";PP !A"8PP 9!"8JPP !;"GPP ?B@ S ;"A6PP -!!"JP -6"88PP 6:"8GPP 6H"86PP N"A" Returns 224-3:7

?8;:8 66"9GA

S *R#S#+ Ba%anced 2und #nde4 U

V Past performance may or may not be sustained in t$e future OO Adjusted for t$e di5idends dec%ared under t$e sc$eme prior to its sp%ittin into t$e Di5idend and 'ro0t$ P%an

"nBe.tment Strategy

As out%ined abo5e, t$e in5estments in t$e Sc$eme 0i%% comprise bot$ debt and e&uities" T$e 2und 0ou%d in5est in Debt instruments suc$ as 'o5ernment securities, money mar1et instruments, securitiFed debts, corporate debentures and bonds, preference s$ares, &uasi 'o5ernment bonds, and in e&uity s$ares" #n t$e %on term, t$e mi4 bet0een debt instruments and e&uity instruments is tar eted bet0een ;A:9A and 9A:;A respecti5e%y" T$e e4act mi4 0i%% be a function of interest rates, e&uity 5a%uations, reser5es position, ris1 ta1in portfo%io 0it$out compromisin capacity of t$e t$e consistency of di5idend payout ?in t$e case of Di5idend

P%an@, need for capita% preser5ation and t$e need to enerate capita% appreciation"

2und Mana er Mr- 1ea.ant $ain Mr- an and #add - Dedicated 2und Mana er - 2orei n Securities

"nBe.tment 1attern
T$e fo%%o0in tab%e pro5ides t$e asset a%%ocation of t$e Sc$emeDs portfo%io"

T$e asset a%%ocation under t$e respecti5e P%ans 0i%% be as fo%%o0s:

Reno!ype of "n.trument. ormal Allo+ation @M of 2 4 )&uities = )&uity re%ated instruments Debt Securities, Money Mar1et et A..et.A Medium to .i $ +o0 to Medium Ri., 1rofile

9A - J:B !: - ;AB

instruments?inc%udin cas$Eca%% money@

?#n5estment in SecuritiFed debt, if underta1en, 0ou%d not e4ceed 6AB of t$e net assets of t$e Sc$eme"@

HDFC Capital 5uilder Fund

.D2* *apita% Bui%der 2und, an open-ended ro0t$ sc$eme, aims to in5est in stron companies at prices t$at be%o0 fair 5a%ue in t$e opinion of t$e fund mana ers" T$e in5estment approac$ is based on t$e p$i%osop$y t$at 5a%ue may be unco5ered on%y 0$ere t$e cro0d $as not disco5ered it yet" #n t$e opinion of t$e fund mana ers suc$ 5a%ue e4ists in ood &ua%ity 0e%% mana ed ne %ected stoc1s" T$e current ne %ect in t$ese companies by t$e broad mar1et participants can be due to 5arious factors suc$ as difficu%t recent mar1et conditions, major restructurin c$ar es, (RS e4penses or ot$er suc$ onetime effects t$at may subdue profits in t$e near term" T$is a%so usua%%y resu%ts in t$e s$ares of suc$ companies bein i%%i&uid" re%ati5e%y

/$i%e assumin suc$ re%ati5e ris1 adjusted %i&uidity ris1 t$e fund mana ers propose to capita%iFe on e4pected pic1 up reported earnin as resu%t of stron ro0t$ prospects in t$e future" T$is e5entua%%y trans%ates in to more %i&uidity dependin on t$e success of t$is strate y" Suc$ opportunities are a5ai%ab%e in %ar e companies as 0e%% as sma%% companies" /$i%e t$ere are no criteria for stoc1 se%ection based on mar1et capita%iFation t$e endea5or is to 1eep a ba%ance of companies in t$e portfo%io bet0een bi o5er0$e%min t$e ot$er and sma%% companies, on one cate ory

5a.i+ S+heme "nformation

ature of S+heme "n+eption Date OptionI1lan

Open Ended Growth S+heme 2ebruary A6, 6HH9 Di5idend P%an, 'ro0t$ P%an" T$e Di5idend P%an offers Di5idend Payout and Rein5estment 2aci%ity"

1lan ame

AV Date

AV Amount

DiBidend 1lan

6G Au !AAG

!!"AJ:

Growth 1lan

6G Au !AAG

;H"H6G

"nBe.tment 1attern

T$e asset a%%ocation under t$e Sc$eme 0i%% be as fo%%o0s:

Sr- o2 4

A..et !ype )&uities and )&uity Re%ated #nstruments Debt = Money Mar1et #nstruments

@M of 1ortfolioA 7pto 6AAB Not more t$an !AB

Ri., 1rofile Medium to .i $ +o0 to Medium

#n5estment in SecuritiFed debt, if underta1en, 0ou%d not e4ceed !AB of t$e net assets of t$e sc$eme" T$e Sc$eme may a%so in5est upto !:B of net assets of t$e Sc$eme in deri5ati5es suc$ as 2utures = Options and suc$ ot$er deri5ati5e instruments as may be introduced from time to time for t$e purpose of $ed in ot$er uses as may be permitted under and portfo%io ba%ancin and and re u%ations uide%ines"

T$e Sc$eme may a%so in5est a part of its corpus, not e4ceedin 9AB of its net assets, in o5erseas mar1ets in '%oba% Depository Receipts ?'DRs@, ADRs, o5erseas e&uity, bonds and mutua% funds and suc$ ot$er instruments as may be a%%o0ed under t$e Re u%ations from time to time" A%so refer to t$e Section on Po%icy on off-s$ore #n5estments by t$e Sc$eme?s@"

S"1 Return.
S"1 "nBe.tment. Sin+e "n+eption !otal Amount "nBe.ted @R.-A Mar,et Value a. on $une 6;/ 4;;7 Return. @Annuali.edAQM 5en+hmar, Return. !A":6B 6:"A9B !:":6B 6H"JJB !6"H!B 6J":;B !"J9B 8"!:B -8H"J8B -9A"!JB 6J8,AAA"AA GHA,686"9! 6!A,AAA"AA ;A,AAA"AA 8;,AAA"AA 6!,AAA"AA 2; (ear 9 (ear 6 (ear 2 (ear

9;8,J:!"AG 6A8,89H"9A 8J,:8H"89 H,!9!"6;

1a.t performan+e may or may not be .u.tained in the future

P +oad is not ta1en into consideration and t$e Returns are of 'ro0t$ P%an E Option" #n5estors are ad5ised to refer to t$e Re%ati5e Performance tab%e furnis$ed as abo5e for non-S#P returns

Return.

HDFC Capital 5uilder @ AV a. at eBaluation date/ R.Fund Date 1er unitA 1eriod AV

38-23=

Return.@MA NN 5en+hmar, O Return.@MAP 6"9JPP -8H"8GP

Mar+h 6;/ 4;;: De+ember 47/ 4;;:

+ast 9:G days

;A"8

:"AGPP -8G"H;P

+ast Si4 mont$s ?6G: 6A:"6!8A days@

$une 4=/ 4;;: $une 6;/ 4;;9

+ast 6 <ear ?8;J days@

J8"!J

-6!"8;PP 6H";!PP

-66":HPP 6G"GJPP

+ast 8 <ears ?6AH; 8J"9J9 days@

$une 6;/ 4;;6

+ast : <ears ?6G!J 68"66J days@

8J"8!PP

!H"A8PP

$une 6;/ 2==7

+ast 6A <ears ?8;:8 J"9GA days@

!8"H;PP

6J"J:PP

February 2/ 2==8

Since #nception ?:!;8 6A"AAA days@

68"J;PP

J"H:PP

P Abso%ute Returns S S=P *NT :AA

PP *ompounded Annua%ised Returns

V Past performance may or may not be sustained in t$e future

5en+hmar, ) S 0 1 C L 9;;

Disc%aimer: T$e

abo5e in5estment simu%ation is for i%%ustrati5e purposes on%y and s$ou%d not be construed as a promise on minimum returns and safe uard of capita%" T$e AM* E Mutua% 2und is not uaranteein or promisin or forecastin any returns" S#P does not assure a profit or uarantee protection a ainst a %oss in a dec%inin mar1et" P%ease refer S#P )nro%ment 2orm or contact nearest #S* for S#P +oad Structure"

*.APT)R :

1AR! OF M( S'MMER !RA" " G

1art of my under.tudy training

2or t$e purpose of fu%fi%%ment of masters de ree in business administration i $ad underta1en my summer trainin at HDFC)mutual fund at 3ota branc$ for a period of 9: days" #n course of t$e trainin i $ad an opportunity to et proper 0or1in 1no0%ed e about t$e interna% 0or1in s of Mutua% funds dept"

T$e sin %e most important factor t$at dri5es .D2* Mutua% 2und is its be%ief to i5e t$e in5estor t$e c$ance to profitab%y in5est in t$e financia% mar1et, 0it$out constant%y 0orryin about t$e mar1et s0in s"

# $ad c$osen t$e HDFC)mutual fund as it is one of t$e most $i $%y reputed mutua% fund a%% o5er t$e #ND#A and offers under study trainin to students durin summer" # $ad t$e job of con5incin in5estors to c$oose .D2* mutua% funds o5er ot$ers" 2or t$is purpose # a%so maintained a database of a%% t$e in5estors 0$o $ad been approac$ed"

Money is a 5a%uab%e asset and it is ob5ious t$at peop%e t$in1 many times before in5estin t$eir money into any 1ind of funds" T$ey fre&uent%y as1 &uestions about t$e time period, interest rates, current status of t$e s$are mar1et, etc 0$ic$ re&uires ood runnin 1no0%ed e in t$e fie%d" #t 0as not 5ery easy to con5ince peop%e to ma1e in5estment in t$e .D2* mutua% funds but 0it$ t$e $e%p of Mr" .imans$u (yas, of .D2-mutua% fund 3ota branc$" # accomp%is$ed my tas1"

T$e %ar est amount of in5estment 0as made by Mr" MD AB#D ,an amount of 6,:A,AAA , in t$e sc$eme .D2*- e&uity fund for a duration of years"
Ot$er in5estors 0ere

AME

"nBe.tmen t type

Amount

Sc$eme

Duration

2- MD A5"D 4- SHOA"5 ASH!ER 6- DE5E DRA 8A!H 1A'#

S"1 S"1 One time S"1 O E !"ME

4/;;; 2/;;; 2/;;/;;; 2/;;; 2/9;/;;;

.D2* 'RO/T. 27ND .D2* TOP !AA 27ND .D2* )N7#T< 27ND .D2* 'RO/T. 27ND .D2* )N7#T< 27ND

6 <)AR 6 <)AR 8 <)AR 6 <)AR ! <)AR

ATM 'T TAMA

9- MD A5"D

3-

"SH"! HEMA "

S"1 S"1 S"1 S"1 O E !"ME S"1 S"1 S"1 S"1 One time S"1 S"1 S"1 S"1

4/;;; 2/;;; 4/;;; 2/;;; 9;/;;; 2/;;; 2/;;; 2/;;; 2/;;; 2/;;/;;; 4/;;; 2/;;; 2/;;; 2/;;;

.D2* 'RO/T. 27ND .D2* 'RO/T. 27ND .D2* TOP !AA 27ND .D2* TOP !AA 27ND .D2* )N7#T< 27D .D2* BA+AN*)D 27ND .D2* BA+AN*)D 27ND .D2* 'RO/T. 27ND .D2* TOP !AA 27ND .D2* )N7#T< 27ND .D2* 'RO/T. 27ND .D2* 'RO/T. 27ND .D2* 'RO/T. 27ND .D2* 'RO/T. 27ND

6 <)RA 6 <)RA 6 <)AR 6 <)AR ! <)AR 6 <)AR 6 <)AR 6 <)AR 6 <)AR 8 <)AR 6 <)AR ! <)AR 6 <)RA 6 <)RA

:- Dr E(AT AHMED 7- SHA#"D SADA! =- CHA D' #A# G'1!A 2;"SH"! HEMA "

22- MD 1ER%ET A#AM 24- $'5A"R SHA 26- D ! MOHA !( 28- 1RASASH $HA 29- SHA#"D SADA! 23- AM"! DAGA 2:- V"SRA ! G'1!A 27- RA$ESH S'MAR 2=- MD AS"F

4;- MATAR SHA 42- 5"S%A$"! RA" 44ARE DRA A!H 1A'#

S"1 S"1 S"1 S"1 S"1

2/;;; 2/;;; 2/;;; 2/;;; 2/;;;

.D2* TOP !AA 27ND .D2* TOP !AA 27ND .D2* 'RO/T. 27ND .D2* BA+AN*)D 27ND .D2* )N7#T< 27D

6 <)AR 6 <)AR ! <)AR 6 <)AR 6 <)AR

46- HAR1REE! SA'R 48- SOMA AGAR%A#

Durin t$e trainin period i mana ed to con5ince

peop%e to ma1e in5estment in .dfc Mutua%

funds"T$e tota% amount of trasaction i pro5ided 0as about Rs J,AA,AAA

CHA1!ER 3

ME!HODO#OG( OF !HE S!'D(

6" R)S)AR*. M)T.ODO+O'< !" SO7R*)S *O++)*T#ON 8" .<POT.)S#S O2 T.) ST7D< 9" DATA *O++)*T#ON = ANA+<S#S O2 DATA

3-2 ) Re.ear+h Methodology>

Since t$e study underta1en by me is re%ated to t$e study of mutua% fund in #ndia, t$e means adopted for co%%ection of 5arious facts and data 0ere in t$e form of persona% obser5ation, officia%s documents, and direct%y interactin 0it$ t$e officers concerned and a%so

direct%y interactin

0it$ t$e e4istin

customers as 0e%% as ne0 customer formed" #t 0as an

e4p%oratory researc$" /or1 is main%y emp$asiFed on t$e primary data" Primary data are at$ered form prescribed &uestionnaire and by persona% inter5ie0 and t$e secondary data are co%%ected from different boo1s and ma aFines"

3-4 ) Sour+e. of Data +olle+tion

T$ere are t0o sources of data co%%ection" T$ey are: 241R"MAR( DA!A SO'RCE SECO DAR( DA!A SO'RCE

T$e secondary data are t$ose, 0$ic$ $a5e a%ready been co%%ected by someone e%se t$orou $ Boo1s, #nternet, Te%e5ision, journa%s, Ma aFines, etc" On t$e ot$er $and primary data does not e4ist $ere" T$e researc$er $as to at$er primary data afres$ for t$e specific study underta1en by $im" Primary data $as been co%%ected $ere by &uestionnaire met$od and persona% inter5ie0 met$od is fo%%o0ed" Primary sources suc$ as #nter5ie0s, Obser5ation, and attendin trainin and de5e%opment c%asses" Secondary sources suc$ as Boo1%ets, Mont$%y journa%, Ma aFines, Officia% fi%es etc"

3-6 ) H(1O!HES"S OF !HE S!'D(

2or doin t$e dissertation topic performance of mutua% fund ana%ysis # too1 t$e $ypot$esis of certain roups" # di5ide t$e tota% popu%ation on t$e basis of t$eir a e, income, ender, occupation and status"

Ma%e job$o%ders 0it$in t$e a e roup of !9-9A" 2ema%e job$o%ders 0it$in t$e a e roup of !9-9A" Ma%e job$o%ders abo5e t$e a e 9A" 2ema%e job$o%ders abo5e t$e a e 9A" #ndi5idua% $a5in t$e income in t$e ran e of 6%1$-8%1$ per annum" #ndi5idua% $a5in t$e income abo5e 8%1$ per annum"

#n Rajest$an i"e" rura% area it is sti%% a ne0 concept so it 0i%% ta1e some more time to rea%%y penetrate into t$is mar1et apart from peop%e 0$o are .N#Is t$ou $ t$ese peop%e are i5en more emp$asis by a%% t$e Mutua% funds and distribution c$anne%s" /it$ t$e introduction of S#PIs t$e industry $as created some options c%ear for retai% in5estors to enter t$is mar1et" My sur5ey says t$at it t$e a0areness %e5e% t$at is p%ayin actin as an obstac%e in t$e ro0t$ of Mutua% fund #ndustry in Rajest$an as a 0$o%e" Peop%e in -$a%a0ar are no0 openin up and interested in %oo1in for0ard for certified in5estment p%anners to $e%p t$em desi nin t$eir in5estment portfo%io" Rajest$an as a mar1et 0as not t$at efficient fe0 years bac1, but no0 0it$ %ot of mu%tinationa% companies and ot$er reputed companies comin do0n, t$e Rajest$an mar1et is s%o0%y pic1in up" 2or mutua% funds it is one of t$e emer in mar1ets t$at can be trapped form its de5e%opin sta e and t$ou $ peop%e of rura% areas prefer Moderate ris1 t$ey can easi%y accept mutua% funds" Mutua% fund #ndustry is de%i5erin a sp%endid performance and 0i%% of course continue in comin future" But t$at can be on%y possib%e as t$e distribution c$anne%s %i1e 3ar5y, Bajaj finance and Ban1s i"e" *iti Ban1, .D2* Ban1, #*#*# Ban1 and Standard *$artered Ban1 a%on 0it$ a%% Asset Mana ement *ompany"

3-8 ) Data Colle+tion 0 Data Analy.i.

150 100 50 135 65 male Respondent female

o of re.pondent ) 4;;

Male

) 269

Female

) 39
100 80 60 40 20 0

55

80 40 25

18 to 35 35 to 45 45 to 55 55 & above Respondent

umber of re.pondent. A++ording to age group.>

27 to 6; U 99

6; to 8; U 7;

8; to 9; U 8;

9; aboBe U49

!he .urBey i. +ondu+ted on a .ample of 4;; people whi+h in+lude. 22; male. and =; female.- !he .ample +ontain. +on.umer. from all the age group. .o that an ideal .ample +an be obtained-

2- "nBe.tment ABenue. aBailable in the mar,et/ that inBe.tor are aware of?
Posta% sc$emes 'o5ernment securities Direct e&uity in5estment Ban1 2DIs Mutua% funds #nsurance

" FERE CE>

A++ording to the inBe.tor. in Sota/ 66M of inBe.tor. prefer to depo.it there money in ban, FDJ.- %here a. 7M of the inBe.tor. want to inBe.t in po.tal .+heme/ 8M in goBernment .e+urity/ 29M inBe.t in dire+t eCuity 4;M of inBe.tor. they prefer mutual fund 0 in.uran+e/ a. there inBe.tment hou.e whi+h i. not Bery high/ but at the .ame time mutual fund +on+ept i. growing

4- More attra+tiBe about mutual fund.?

Returns Moderate ris1 Ta4 benefits .ass%e free Past performance /e%% re u%ated

No idea

" " FRE CE>

A++ording to people of Sota they attra+t with pa.t performan+e of the +ompany if +ompany pa.t re+ord. i. good then they intere.ted to inBe.t- After that people attra+t with taD benefit then return on inBe.tment

6- 1er+entage of entire inBe.tment in+lude. mutual fund.?

Be%o0 !AB !A to :AB :A to GAB

GAB abo5e

" FRE CE>

5y thi. we +ome to ,now that mo.t of the people u.e to go for mutual fund a. we +an .ee by the aboBe graph that 76 people from 4;; goe. for 4;M to9;M inBe.tment in Mutual Fund.-

8- For "nBe.tment. in Mutual Fund/ whi+h +ompany inBe.tor. prefer?

.D2* M2 ABN AMRO M2 PR7D)NT#A+ #*#*# M2 R)+#AN*) M2 B#R+A S7N+#2)

" FERE CE>

A++ording to the "nBe.tor. in Sota 69M of inBe.tor. prefer to inBe.t in HDFC mutual fund/ 4:M of inBe.tor. prefer Relian+e mutual fund where a. 5irla .hare 24M and "C"C" by 2:M-but only =M inBe.tor. inBe.t in A5 AMRO mutual fund- " haBe +ompared the.e fiBe fund hou.e be+au.e they are the main +ompetitor. in Sota-

9- How do inBe.tor. manage hi. inBe.tment portfolio ?

So%e%y of my o0n On ad5ise of a friend On ad5ise of a distributorEa ent On ad5ise of your ban1er On ad5ice of mutua% fund $ouse peop%e

" FRE CE>

A++ording to my .urBey mo.t no of people manage hi. inBe.tment port folio by own/ 78 people out of 4;; manage hi. portfolio by own and 89 0 63 people manage with the help of ban,er. and MF hou.e

3- SaBing.IinBe.tment aBenue. 9 year ba+,?

Ban1 2D, Sa5in s #nsurance Mutua% funds )&uity mar1et 'o5t" securities Rea% estate Posta% sa5in s, 2D

" FRE CE>

A++ording to my .urBey before 9 year mo.t of the people@226A of Sota 5ut only 86 people out of 4;; inBe.t in mutual fund whi+h wa. Bery low +ity

inBe.ted hi. money in in.uran+e .e+tor and =; people out of 4;; inBe.ted in ban, FD-

:- Among the huge number of people going for mutual fund/ in whi+h ,ind of fund they normally inBe.t?

)&uity Oriented Debt Oriented Ba%anced Oriented

" FERE CE>

"n the +ity li,e Sota in between the age group 27)6;/ 34M inBe.tor inBe.ted in eCuity oriented/ and only 27M people inBe.t in debt fund- 5ut group of people more than 9; year 99M inBe.tor inBe.t in debt fund and only 46M people inBe.t in eCuity fund- "t mean younger people attra+t with eCuity fund and old man attra+t with debt fund-

but in balan+ed fund eBery group. are eCually inBe.t

7- Ri., appetite of people in RaKe.than 1referred Ri., and Return

.i $ ris1 $i $ return Moderate ris1 moderate return +o0 ris1 %o0 return

@H/HA @M/MA @#/#A

" FERE CE>

A++ording to the .urBey/ we +an +on+lude that/ people in rural area. mo.tly belieBe in Moderate ri.,/ and moderate return.- EBen mutual fund. haBe moderate ri., and the return i. Cuite le.. than a. it i. in +a.e of eCuitie.- So/ for the people of Rural area. mutual fund. are the right ,ind of inBe.tment option-

=- How .eriou.ly people in Sota thing about undergoing a finan+ial planning for them?

(e. o

" FRE CE>

A++ording to my .urBey of Sota people / mo.t no of people are more .eriou. about finan+ial planning

CHA1!ER :

<'ES!"O ARE

Nuestionnaire
1lea.e fill up the Cue.tionnaire a++ording to the Cue.tion. a.,ed- @$u.t put on a ti+, mar, VWX whereBer neededA

ame

WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW

Age

X X X

X!A-8AY 8A-9A 9A-:A :A-abo5eY

SeD

O++upation

Ser5ice ?'o5t"@ Ser5ice ?P5t"@ Business Se%f-emp%oyed Retired

OrganiYation De.ignation )

WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW

Annual "n+ome -

Be%o0 6 %a1$ 6 M 8 %a1$ 8 M : %a1$ Abo5e : %a1$

2- %hat are the "nBe.tment ABenue. aBailable in the mar,et/ that you are aware of?
Posta% sc$emes ?i"e" M#SEPP2ENS*ER"DET"D etc"@ 'o5ernment securities

Ban1 2DIs Direct e&uity in5estment Mutua% funds #nsurance

4- Are you aware of the fa+t that .ome of the performing Mutual fund .+heme. in the indu.try haBe po.ted 4;M Z annualiYed return. in la.t 2; year.?
<es No

6- "n your point of Biew what i. more attra+tiBe about mutual fund.? Returns Moderate ris1 Ta4 benefits No idea .ass%e free Past performance /e%% re u%ated

8- "f you haBe inBe.ted in Mutual fund./ what per+entage of your entire inBe.tment in+lude. mutual fund.? Be%o0 !AB !A to :AB :A to GAB GAB abo5e

9- %hat were your SaBing.IinBe.tment aBenue. 9 year ba+,? Ban1 2D, Sa5in s Mutua% funds 'o5t" securities Posta% sa5in s, 2D #nsurance )&uity mar1et Rea% estate

;"

ow/ what new aBenue. are in+luded in your "nBe.tment portfolio? 'o5t" securities #nsurance )&uity mar1et Rea% estate Mutua% funds Deri5ati5es

:- How do you manage your inBe.tment portfolio? So%e%y of my o0n On ad5ise of a friend On ad5ise of a distributorEa ent On ad5ise of your ban1er On ad5ice of mutua% fund $ouse peop%e

7- How do you rate the.e while ta,ing an inBe.tment de+i.ion? @Rate a. 2/4/6/8/9 a++ording to preferen+eA Returns +oc1-in period Ta4 benefits Ris1 factors past performance

=- (ou belieBe in [ .i $ ris1, .i $ returns Moderate ris1, moderate returns +o0 ris1, %o0 returns

2;- HaBe you been eBer approa+hed by a Certified "nBe.tment Finan+ial 1lanner?

<es

No

22- %ould you li,e to undergo a finan+ial planning eDer+i.e for your.elf?

<es

No

CHA1!ER 7

F" D" G/ RECOMME DA!"O / 0 CO C#'S"O

F" D" GS
#n #ndia Mutua% fund #ndustry $as seen Dramatic impro5ements in Nua%ity as 0e%% as &ua%ity of products and ser5ices offerin o5er t$e past decade, but t$e industry $as 0itnessed ro0t$ in t$e %ast 6A years considerab%y be%o0 potentia%" T$e Asset under Mana ement $a5e ro0n from about Rs" 9JA bi%%ion in marc$ 6HH8 to Rs" 6,:9A bi%%ion in Apri% !AA9?*A'R of 66"9 percent@ = no0 it ro0n to Rs" :,;!A bi%%ion ti%% sep !AAG" T$is $as main%y ac$ie5ed due to co%%ection t$rou $ mutua% fund #POIs t$at $as been increasin c$eaper in its #PO sta e on account of its Rs" 6A NA(" due to t$e in5estors fee%in t$at it is

T$ere $as been a stron appreciation in e&uities in comparison to t$e debt mar1et, 0$ic$ $as s$o0n a do0n0ard trend %ast year" And in turn Mid-cap and di5ersified funds $a5e de%i5ered t$e $i $est in comparison to ot$er funds" As t$e #ndian economy is s$o0in a ro0in trend 0it$ 'DP more t$an ;B and e4pected to s$o0 GB and #ndian $ouse$o%d sa5in bein !9B of t$e entire 'DP" T$ere is a stron ro0t$ potentia% of Mutua% fund industry in #ndia"

#n Rajest$an i"e" rura% area it is sti%% a ne0 concept so it 0i%% ta1e some more time to rea%%y penetrate into t$is mar1et apart from peop%e 0$o are .N#Is t$ou $ t$ese peop%e are i5en more emp$asis by a%% t$e Mutua% funds and distribution c$anne%s" /it$ t$e introduction of S#PIs t$e industry $as created some options c%ear for retai% in5estors to enter t$is mar1et" My sur5ey says t$at it t$e a0areness %e5e% t$at is p%ayin actin as an obstac%e in t$e ro0t$ of Mutua% fund #ndustry in Rajest$an as a 0$o%e"

Some of the MaKor Finding.

6" #t is found t$at .D2* is a fa5orab%e Mutua% 2und" !" T$e basis objecti5e be$ind in5estments are main%y %on -term capita% appreciation, current income = to some e4tent ta4 benefits" 8" T$e performance of .D2* *ore = Sate%%ite = .D2* Top !AA 2und is 5ery ood" 9" #t is seen t$at t$e in5estment in ro0t$ fund is 5ery $i $" Because t$e scope of income and capita% appreciation in t$e %on term" :" #t is obser5ed t$at t$e dri5in aspects of in5estments in mutua% fund are safety, fund performance, Ser5ice, +i&uidity, return = ta4 benefits" ;" T$e type of in5estment p%an t$at most in5estor s prefer is to et principa% safety at a%% time 0it$ %o0 returns rat$er t$an $i $ return 0it$ no safety" J" .D2* Mutua% 2und does not pro5ide Lmont$%y income sc$emeI 0$ic$ ot$er mutua% funds $a5e and performance is 5ery appreciab%e" G" 2und Mana ers $a5e su in5estment , 2or t$e top :" H" .D2* Prudence is performin mutua% fund $ouse" 6A" At t$is period of time 0$en mar1et condition is not so ood, it is better for in5estors to in5est t$rou $ Systamatic #n5estment p%an" /$ic$ reduces t$e mar1et ris1" ood 0it$ comparition to t$e prudence fund of any ot$er ested .D2* prudence ,.D2* Ta4sa5er , .D2* )&uity for

RECOMME DA!"O

.D2* Mutua% 2und is one of t$e %ar est mutua% funds and 0e%%-estab%is$ed fund $ouse in t$e country 0it$ consistent and abo5e a5era e fund performance across cate ories since its incorporation on December 6A,6HHH"T$e sin %e most important factor t$at dri5es .D2* Mutua% 2und is its be%ief to i5e t$e in5estor t$e c$ance to profitab%y in5est in t$e financia% mar1et, 0it$out constant%y 0orryin about t$e mar1et s0in s"

Some maKor re+ommendation>

2A 2und mana ers s$ou%d continuous #n5estor a0areness Pro rams to ma1e t$e in5estors a0are of tec$nica%ities of fund mana ement and t$e return aspects" 4A A ents, Ser5ice personne% must be ab%e to i5e correct and time%y information about NA( and t$e return on different sc$emes" 6A Mont$%y income sc$eme s$ou%d be introduced" 8A Sc$eme s$ou%d be offered as per t$e needs and t$e re&uirement of t$e industries" 9A T$e re u%atory norms pro5ided by t$e re u%atory aut$orities %i1e S)B# are re&uired to be 1no0n to a%% inc%udin in5estors"

CO C#'S"O
T$e %oba% financia% mar1et $as transformed from Se%%erIs mar1et to BuyerIs mar1et 0it$

%ibera%iFation, '%oba%iFations and pri5atiFation" T$e #ndian mutua% fund mar1et $as a%so become %oba% 0$en forei n funds entered, t$ey came up 0it$ probab%y best mar1etin strate ies to beat #ndian iants %i1e B#R+A, .D2*, and #*#*# $a5e come up 0it$ a beat t$e forei n funds" No0 t$e cutt$roat competition oes on and on" ressi5e strate ies to

.D2* Mutua% funds $a5e re0arded in5estors 0it$ $and some returns" T$e ood ne0s is t$at t$is is poised to become a trend" T$e mutua% funds $a5e stren t$ened t$eir distribution net0or1s, become more transparent and in5estor friend%y and are re0ardin in5estors" T$e mutua% fund is fina%%y, pro5in itse%f as a 5e$ic%e of safety for in5estments" But it is sti%% t$e fund mana erIs in5estment p$i%osop$y t$at ma1es t$e difference bet0een t$e 0inner and t$e %osers"

*arefu% mar1et ana%ysis, consumer se mentation, identification of in5estor needs, ser5ice desi nin are to be carried out for t$e successfu% imp%ementation of different sc$emes by of t$e sc$emes and t$eir brandin 0i%% $e%p a %ot for ro0t$ of t$e mutua% fund or aniFations" Re u%atory measures by S)B# s$ou%d be c%ear%y e4p%ained to t$e in5estors" Positionin mutua% fund mar1et" industry" *reati5ity and inno5ation are t$e means of mar1etin in t$e days to come for #ndian

*.APT)R H

5"5#"OGRA1H(

5"5#"OGRA1H(>)

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