A

Mutual fund is a type of professionally managed collective investment vehicle that

[1]

pools money from many investors to purchase securities. While there is no legal definition of the term "mutual fund", it is most commonly applied only to those collective investment vehicles that are regulated and sold to the general public. They are sometimes referred to as "investment companies" or "registered investment companies." Most mutual funds are "open-ended," meaning investors can buy or sell shares of the fund at any time. Hedge funds are not considered a type of mutual fund. The term mutual fund is less widely used outside of the United States and Canada. For collective investment vehicles outside of the United States, see articles on specific types of funds including open-ended investment companies,SICAVs, unitized insurance funds, unit trusts and Undertakings for Collective Investment in Transferable Securities, which are usually referred to by their acronym UCITS. In the United States, mutual funds must be registered with the Securities and Exchange Commission, overseen by a board of directors (or board of trustees if organized as a trust rather than a corporation or partnership) and managed by a registered investment adviser. Mutual funds are not taxed on their income and profits if they comply with certain requirements under the U.S. Internal Revenue Code. Mutual funds have both advantages and disadvantages compared to direct investing in individual securities. They have a long history in the United States. Today they play an important role in household finances, most notably in retirement planning. There are 3 types of U.S. mutual funds: open-end, unit investment trust, and closed-end. The most common type, the open-end fund, must be willing to buy back shares from investors every business day. Exchange-traded funds (or "ETFs" for short) are open-end funds or unit investment trusts that trade on an exchange. Open-end funds are most common, but exchange-traded funds have been gaining in popularity. Mutual funds are generally classified by their principal investments. The four main categories of funds are money market funds, bond or fixed income funds, stock or equity funds and hybrid funds. Funds may also be categorized as index or actively managed.

Mutual funds in India

The first introduction of a mutual fund in India occurred in 1963, when the Government of India launched Unit Trust of India (UTI). Until 1987, UTI enjoyed a monopoly in the Indian mutual fund market. Then a host of other government-controlled Indian financial companies came up with their own funds. These included State Bank of India, Canara Bank, and Punjab National Bank. This market was made open to private players in 1993, as a result of the historicconstitutional amendments brought forward by the then Congress-led government under the existing regime of Liberalization, Privatization and Globalization (LPG). The first private sector fund to operate in India was Kothari Pioneer, which later merged with Franklin Templeton.

Mutual funds are an under tapped market in India

Despite being available in the market for over two decades now with assets under management equaling Rs 7,81,71,152 Lakhs (as of 28 February 2010) (Source: Association of Mutual Funds, India), less than 10% of Indian households have invested in mutual funds. A recent report on Mutual Fund Investments in India published by research and analytics firm, Boston Analytics, suggests investors are holding back from putting their money into mutual funds due to their perceived high risk and a lack of information on how mutual funds work. This report is based on a survey of approximately 10,000 respondents in 15 Indian cities and towns as of March 2010. There are 43 Mutual Funds recently The primary reason for not investing appears to be correlated with city size. Among respondents with a high savings rate, close to 40% of those who live in metros and Tier I cities considered such investments to be very risky, whereas 33% of those in Tier II cities said they did not know how or where to invest in such assets.

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.

Investment Objective
To generate capital appreciation along with current income from a combined portfolio of equity & equity-related and ebt & money market instruments.
The primary objective of the Scheme is to generate capital appreciation along with current income from a combined portfolio of equity and equity related and debt and money market instruments.

Investment Strategy The balanced product is positioned as a lower risk alternative to a pure equities scheme, while retaining some of the upside potential from equities exposure. The Scheme provides the Investment Manager with the flexibility to shift allocations in the event of a change in view regarding an asset class. Asset allocation between equities and debt is a critical function in a balanced fund. It is proposed to continuously monitor the potential for both debt and equities to arrive at a dynamic allocation between the asset classes. The equity and debt portfolios of the Scheme would be managed as per the respective investment strategies detailed herein.

Equity Investments : The investment approach would be based on the concept of economic earning power and cash return on investments. Five basic principles serve as the foundation for this investment approach. They are as follows : Focus on the long term View our investments as conferring a proportionate ownership of the business. Maintain a margin of safety (i.e. the price of purchase represents a discount to the intrinsic value of that business). Maintain a balanced outlook on the market by regularly monitoring economic trends and investor sentiment. The decision to sell a holding would be based on one of three reasons : The anticipated price appreciation has been achieved or is no longer probabe. Alternative investments offer superior total return prospects, or A fundamental change has occurred in the company or the market in which it competes.

o o o o o

In summary, the assessment of investment value is a function of extensive research and based on data and reasoning, rather than current fashion and emotion. The idea is to develop a model that allow us to identify "businesses with superior growth prospects and good management, at a reasonable price". In order to implement the investment approach effectively, it would be important to periodically meet the management face to face. This would provide an understanding of thei broad vision and commitment to the long-term business objectives. These meetings would also be useful in assessing key determinants of management quality such as orientation to minority shareholders, ability to cope with adversity and approach to allocating surplus cash flows. Discussions with management would also enable benchmarking actual performance against stated commitments.

Debt Investments :

o o o o

Debt securities (in the form of non-convertible debentures, bonds, secured premium notes, zero interest bonds, deep discount bonds, floating rate bond / notes, securitised debt, pass through certificates, asset backed securities, mortgage backed securities and any other domestic fixed income securities including structured obligations etc.) include, but are not limited to: Debt obligations of / Securities issued by the Government of India, State and local Governments, Government Agencies and statutory bodies (which may or may not carry a state / central government guarantee). Securities that have been guaranteed by Government of India and State Governments. Securities issued by Corporate Entities (Public / Private sector undertakings). Securities issued by Public / Private sector banks and development financial institutions.

o o o o o o o o o

Money Market Instruments Include Commercial papers Commercial bills Treasury bills Government securities having an unexpired maturity upto one year Call or notice money Certificate of deposit Usance bills Permitted securities under a repo / reverse repo agreement Any other like instruments as may be permitted by RBI / SEBI from time to time Risk Control

Investments made from the net assets of the Scheme(s) would be in accordance with the investment objective of the Scheme(s) 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 Debt Securities and Money Market Instruments and equity / equity related instruments. Every investment opportunity in Debt Securities and Money Market Instruments would be assessed with regard to credit risk, interest rate risk and liquidity risk.

Systematic

Investment

Plan

(SIP)

Details

Serial No.

Scheme Name

Minimum Application Amount(Rs.)

Entry Load

Exit Load

HDFC Balanced Rs.500 for Fund Monthly & Dividend/Growth* Rs.1500 for Quarterly

NIL

In respect of each purchase / switch-in of units, an Exit Load of 1.00% is payable if Units are redeemed / switched-out within 1 year from the date of allotment. No Exit Load is payable if Units are redeemed / switched-out after 1 year from the date of allotment.

Basic Scheme Information

Nature of Scheme Inception Date Option/Plan

Open Ended Balanced Scheme September 11, 2000

Existing Plan : Dividend Option,Growth Option. The Dividend Option offers Dividend Payout and Reinvestment Facility. Direct Plan (w.e.f. 01 Jan 2013) : Dividend Option, Growth Option. The Dividend Option offers Dividend Payout and Reinvestment Facility.

Entry Load (For Lumpsum Purchases and investments through SIP/STP)

NIL Unfront commission shall be paid directly by the investor to the ARN Holder (AMFI registered Distributor) based on the investors' assessment of various factors including the service rendered by the ARN Holder. Please click here to go through the addendum.

Exit Load (as a % of the Applicable NAV)

In respect of each purchase / switchin of units, an Exit Load of 1.00% is payable if Units are redeemed / switched-out within 1 year from the date of allotment.. No Exit Load is payable if Units are redeemed / switched-out after 1 year from the date of allotment. For new investors :Rs.5000 and any amount thereafter. For existing investors : Rs. 1000 and any amount thereafter. Nil Every Business Day. Normally dispatched within 3-4 Business days

Minimum Application Amount (click here for SIP Details) Lock-In-Period Net Asset Value Periodicity Redemption Proceeds

Current Expense Ratio (#) (Effective Date 01st Oct 2012)

On the first 100 crores daily net assets 2.25% On the next 300 crores daily net assets 2.00% On the next 300 crores daily net assets 1.75% On the balance of the assets 1.50%

Fund
Mr. Chirag Setalvad (since Mr. Rakesh Vyas - Dedicated Fund Manager - Foreign Securities April

Manager
2, 07)

Competition
Crisil Rank Assets (Rs.cr) Dec-12

Balanced

3mth(%)6mth(%)

1yr(%) 3yr(%) 5yr(%)

HDFC Prudence Fund (G)

Rank 2

6,239.17

2.2

7.75

7.2

34.0

65.0

HDFC Balanced Fund (G)

Rank 2

991.18

1.7

5.45

6.5

38.2

67.1

UTI Balanced Fund (G)

Rank 4

951.37

2.3

8.25

9.6

22.3

29.2

DSP-BR Balanced Fund (G)

Rank 4

644.73

1.1

5.35

5.0

21.3

39.6

Birla Sun Life 95 Fund (G)

Rank 3

559.40

4.0

8.95

10.5

30.6

53.1

Returns (NAV as on Feb-21-2013)

Period Returns (%) Rank #

1 mth 3 mth 6 mth 1 year 2 year 3 year 5 year

-4.3 1.7 5.4 6.5 8.7 11.4 10.8

18 17 19 14 5 3 2

Absolute Returns (in %)

Year Qtr 1 Qtr 2 Qtr 3 Qtr 4 Annual

2012 2011 2010 2009 2008

15.5 -3.1 4.0 -1.0 -16.5

-0.8 4.6 6.7 37.6 -7.9

6.2 -5.1 9.9 14.1 3.5

2.5 -6.6 0.6 8.5 -19.1

26.3 -10.8 24.5 71.7 -36.9

Top Holdings (Jan 31, 13)

Equity Sector Value (Rs cr) Asset %

ICICI Bank SBI Infosys Reliance TCS

Banking/Finance Banking/Finance Technology Oil & Gas Technology

36.93 24.38 23.71 22.17 21.51

3.20 2.12 2.06 1.92 1.87

Asset Allocation (%)(Jan 31, 13)

Equity Others Debt Mutual Funds Money Market Cash / Call 69.34 0.00 24.02 N.A 0.00 6.64

Concentration
Holdings (%)

Top 5 Top 10
Sector

11.17 19.92
(%)

Top 3

35.00

Sector Allocation (Jan 31, 13)

Sector % 1-Year HighLow

Banking/Finance Technology Engineering Pharmaceuticals Automotive Manufacturing

15.29 10.74 8.97 6.49 4.42 3.82

15.67 10.74 8.97 7.08 5.75 3.82

13.46 8.24 4.09 3.92 3.13 1.03

Franklin Templeton Investments

Franklin Resources Inc. is an American holding company which, together with its subsidiaries, is referred to as Franklin Templeton Investments; it is an investment firm originally founded in New York in 1947 as Franklin Distributors, Inc. It is listed on the NYSE under the ticker BEN, in honor of Benjamin Franklin, who was admired by founder Rupert Johnson, Sr. In 1973 the company's headquarters moved from New York to San Mateo, California

History
In October 1992, Franklin acquired Templeton, Galbraith & Hansberger Ltd. for a reported cost of $913 million, leading to the common name Franklin Templeton. Mutual fund pioneer Sir John Templeton was the owner of Templeton, Galbraith & Hansberger Ltd together with his son Dr. John [1] Templeton and John Galbraith who together owned 70% of the firm. In November 1996, Heine Securities Corporation, known for the Mutual Series of funds, merged into the Franklin Templeton complex. In October 2000, Franklin acquired Bissett Funds to increase its Canadian presence, and Bissett remains a key brand from Franklin in the Canadian market. The Fiduciary Trust Company was acquired by Franklin Templeton in April 2001.

Franklin India Index Fund - NSE Nifty Plan (G)

Investment Objective
An open end index linked growth scheme with the objective to invest in companies whose securities are included in the Nifty and subject to tracking errors, endeavouring to attain results commensurate with S&P CNX Nifty Index under NSE Nifty Plan, and to provide returns that, before expenses closely correspond to the total return of common stocks as represented by the BSE Sensex under BSE Sensex Plan.

: : AMC : Type : Category : Launch Date : Net Assets (Rs. cr) :

Fund Name Scheme Name

Franklin Templeton Mutual Fund Franklin India Index Fund-NSE Nifty Plan(G) Franklin Templeton Mutual Fund Open Equity - Index 04-Aug-00 310.84

NAV Details : NAV [Rs.] : Buy/Resale Price [Rs.] : Sell/Repurchase Price [Rs.] : Entry Load % : Exit Load % :
NAV Date 21-Feb-13 46.0 45.52 45.98 NIL 1% (if redeemed within 30 days from date of allotment)

Fund Manager

Sukumar Rajah, Anil Prabhudas

Holdings
Sector Value (Rs cr) Assets %

Equity

ITC Reliance

Tobacco Oil & Gas

27.10 24.70

8.72 7.94

ICICI Bank Infosys

Banking/Finance Technology

22.63 22.32

7.28 7.18 6.11

HDFC Bank

Banking/Finance

18.99

Peer Comparison
Assets (Rs.cr)

Index

Crisil Rank

3mth (%)

6mth 1yr (%) 3yr (%) (%)

5yr (%)

GS Nifty BeES

Rank 1

540.56

4.0

8.2

5.6

6.8

2.8

Franklin (I) Index - NSE (G)

Rank 3

275.83

3.6

7.6

6.1

6.5

2.6

UTI Nifty Index Fund (G)

Rank 3

174.06

3.6

8.0

6.7

6.4

2.4

IDBI Nifty Index Fund (G)

Rank 2

153.69

3.9

7.8

6.5

--

--

GS Junior BeES

Not Ranked

89.12

5.0

15.6

13.4

6.1

4.1

Asset Allocation (%)(Jan 31, 13)

Equity Others Debt Mutual Funds 99.72 0.00 0.00 N.A

Money Market Cash / Call

0.00 0.30

Concentration
Holdings (%)

Top 5 Top 10
Sector

37.23 56.99
(%)

Top 3

53.86

Sector Allocation (Jan 31, 13)

Sector % 1-Year HighLow

Banking/Finance Technology Oil & Gas Tobacco Automotive Engineering

28.29 12.84 12.73 8.72 8.29 6.28

28.76 14.20 13.27 8.76 9.05 6.85

25.26 11.39 11.51 6.64 7.71 5.95

ConclusionAs here we conclude this topic as comparatively hdfc balance fund provide greater returns from last 2 years, for long term development franklin India index fund is also not a bad option.