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ASTUDYOFINVESTMENTPREFERENCEIN

MUTUAL
FUNDS

(WithspecialreferencetoHDFCmutualfund)
AProjectreportsubmittedto
YMCAUniversityofscienceandtechnology,Faridabad,

InpartialfulfillmentoftherequirementsfortheawardoftheDegreeof
MASTEROFBUSINESSADMINISTRATION
SubmittedBy:
PAYALGARG
Reg.No.
UndertheGuidanceof

AssociateProfessor
DepartmentofManagementStudies

YMCAUniversityofscienceandtechnology,Faridabad

20142016

CERTIFICATE
This iscertifythattheprojectentitledASTUDYOFINVESTMENT
PREFERENCE IN MUTUAL FUNDS has been submitted by Miss. Payal Garg
(Reg.No.) inpartialfulfillmentoftherequirementsfortheawardofMasterofBusiness
AdministrationfromYMCAUniversityofscienceandtechnology,Faridabad.Theresults
embodiedintheprojecthavenotbeensubmittedtoanyotherUniversityorInstitutionfor
theawardofanyDegreeorDiploma.

Dr.NAVDEEPMALHOTRA
(InternalGuide)
Professor&HOD
DepartmentofManagementStudiesDepartment of ManagementStudies
YMCAUST
YMCAUST

Mrs.RENUAGGARWAL
(ProjectCoordinator)
AssociateProfessor
DepartmentofManagementStudies
YMCAUST

DECLARATION
I hereby declare that the project entitle A SYUDY OF INVESTMENT
PREFERENCEINMUTUALFUNDSSubmittedinpartialfulfillmentofthe
requirementsforawardofthedegreeofMBAatYMCAUNIVERSITYOF
SCIENCEANDTECHNOLOGY,FARIDABAD,isanauthenticworkand
has not been submitted to any other University/Institute for award of any
degree/diploma.

PAYALGARG
MBA,YMCAUST
FARIDABAD

ACKNOWLEDGEMENT

Firstly I would like to express our immense gratitude towards our college, YMCA
University of science and technology, Faridabad, which created a great platform to
attainprofoundtechnicalskillsinthefieldofMBA,therebyfulfillingourmostcherished
goal.
IwouldthankallteammembersofHDFCMutualFund.SpeciallyMr.ABHISHEK
RAJPUT(RelationshipManager)andothertheemployeesinthefinancedepartmentfor
guidingmeandhelpingmeinsuccessfulcompletionoftheproject.0
IamverymuchthankfultoourprofessorMr.K.K.SunilKumarSir(InternalGuide)sir
forextendinghiscooperationindoingthisproject.
IamalsothankfultoourprojectcoordinatorMrs.RENUAGGARWALforextendinghis
cooperationincompletionofProject.
Iconveymythankstomybelovedparentsandmyfacultywhohelpedmedirectlyor
indirectlyinbringingthisprojectsuccessfully.

PAYAL GARG
(10241E0002)

ABSTRACT
Theaimofthestudyistoknowtheclearpictureinvolvedinmutualfundsandits
impactontheinvestorswhoareinterestedindifferenttypesofInvestmentsAvenue.
Thisriskanalysisandinvestorsperceptiononmutualfundmarkethasgiven
aclearideaoftradinginvolvedinrelationwithequities,futuresandoptions,incomparison
withotherinvestmentsexistinginthemarket.

RECOMMENDATIONS
Thisistorecommendthatallthepeoplewhoareinterestedininvestmentsshould
havethebasicideaaboutthetrendsinthemarket,andtheimpactofdecisionsonthe
market, which are given by business tycoons, and also the influence of political
involvementonthemarket.

CONTENTS
Chapter

01

INTRODUCTION

1.1

IMPORTANCEOFMUTUALFUNDS

1.2

NEED&IMPORTANCEOFSTUDY

1.3

DESIGNOFSTUDY

a.

StatementofProblem

b.

Objectives

c.

StudyMethodology

d.

231

DataAnalysis&Interpretation

e.

Limitation

Chapter

02

REVIEWOFLITERATURE

3436

Chapter

03

COMPANYPROFILE

3751

3.1

Profile

3.2
3.3

AMCSCSRInitiative

Chapter

04

DATAANALYSIS&INTERPRETATION

5273

Chapter

05

FINDINGS&SUGGESTIONS

7476

Chapter

06

BIBLIOGRAPHY

7778

Chapter

07

ANNEXURE

7986

INTRODUCT
ION

MUTUALFUNDS
Themutualfundisstructuredaroundafairlysimpleconcept,themitigationofrisk
throughthespreadingofinvestmentsacrossmultipleentities,whichisachievedbythe
poolingofanumberofsmallinvestmentsintoalargebucket.Yet,ithasbeenthesubjectof
perhapsthemostelaborateandprolongedregulatoryeffortinthehistoryofthecountry.
ThemutualfundindustryhasgrowntogiganticproportionsincountriesliketheUSA,in
Indiaitisstillinthephaseofinfancy.

TheoriginoftheIndianmutualfundindustrycanbetracedbackto1964whenthe
Indian Government, with a view to augment small savings within the country and to
channelofthesesavingstothecapitalmarkets,setuptheUnitTrustofIndia(UTI).The
UTIwassetupunderaspecificstatute,theUnitTrustofIndiaAct,1963.TheUnitTrustof
IndialauncheditsfirstopenendedequityschemecalledUnit64intheyear1964,which
turnedouttobeoneofthemostpopularmutualfundschemesinthecountry.In1987,the
government permitted other public sector banks and insurance companies to promote
mutualfundschemes.Pursuanttothisrelaxation,sixpublicsectorbanksandtwoinsurance
companiesVIZ.LifeInsuranceCorporationofIndiaandGeneralInsuranceCorporationof
Indialaunchedmutualfundschemesinthecountry.
SecuritiesExchangeBoardofIndia,betterknownasSEBI,formulatedtheMutual
Fund(Regulation)1993,whichforthefirsttimeestablishedacomprehensiveregulatory
frameworkforthemutualfundindustry.Thisprovedtobeaboonforthemutualfund
industryandsincethenseveralmutualfundshavebeensetupbytheprivatesectoraswell
asthejointsector.KothariPioneerMutualfundbecamethefirstfromtheprivatesectorto
establishamutualfundinassociationwithaforeignfund.Sincethenseveralprivatesector
companieshaveestablishedtheirownfundsinthecountry,makingmutualfundindustry
oneofthemostfollowedsectorbycriticsandinvestorsalike.Theshareofprivatesector

mutualfundstoohasgoneuprapidly.

Intheperiodbetween1963and1988,whentheUTIwasthesoleplayerinthe
industry,theassetsundermanagementgrewtoaboutRs.67billion.Inthesecondphase
between19881994,whenpublicsectorbanksandinsurancecompanieswereallowedto
launchmutualfundschemes,thetotalassetsinthemutualfundindustrygrewtoaboutRs.
610billionwiththetotalnumberofschemesincreasingto167bytheendof1994.The
thirdphaseofthemutualfundindustry,whichcommencedin1994,witnessedexponential
growthoftheindustry,withtheadventofprivateplayerstherein.AsonMay31,2004,the
totalassetsundermanagementstoodatRs.1540billionandthetotalnumberofschemes
stoodat399.

Duringthelastthreeandahalfdecades,UTIhasbeenadominantplayerinthe
mutualfundindustry.ThetotalassetsunderthemanagementoftheUTIasonSeptember
30,2002weretothetuneofRs.442billion,whichamounttoalmost41%ofthetotal
assetsundermanagementinthedomesticmutualfundindustry.UTIhaswitnessedsome
erosionofassetspursuanttothelastyearscrisisarisingonaccountofitsUnit64scheme,
theschemewithlargestamountofassetsundermanagement.Thiswasthefirstscheme
launchedbytheUTIwithasignificantequityexposureandthereturnsofwhichwasnot
linkedtothemarket.Thisresultedinapaymentcrisiswhenthestockmarketscrashed
duringthelasttwoyears,whichresultedinsomedegreeoflossofinvestorsconfidencein
UTIleadingtoerosionofitsassetsundermanagement.Thisperiodalsogaveopportunity
totheprivateplayerstodemonstratebetterreturnstherebycapturingasignificantmarket
share.
Whatevermayhavehappenedtomutualfundsinthepastandwhateveroneis
seeingnow,mutualfundsareheretostayaslongastheycandelivertheaspirationsoftheir
investors.OnemustnotforgetthatIndiaisalargenationwithapopulationofmorethan1
billionpeopleandthepotentialcontinuestobehuge.However,tobefairmutualfund
managersshouldalsostrivetoimprovetheirperformanceandnotblamethevagariesofthe
marketallthetimes.

HistoryoftheIndianMutualFundIndustry
ThemutualfundindustryinIndiastartedin1963withtheformationofUnitTrustofIndia,
attheinitiativeoftheGovernmentofIndiaandReserveBankofIndia.Thehistoryof
mutualfundsinIndiacanbebroadlydividedintofourdistinctphases
FirstPhase196487
UnitTrustofIndia(UTI)wasestablishedon1963byanActofParliament.Itwassetupby
theReserveBankofIndiaandfunctionedundertheRegulatoryandadministrativecontrol
oftheReserveBankofIndia.In1978UTIwasdelinkedfromtheRBIandtheIndustrial
DevelopmentBankofIndia(IDBI)tookovertheregulatoryandadministrativecontrolin
placeofRBI.ThefirstschemelaunchedbyUTIwasUnitScheme1964.Attheendof
1988UTIhadRs.6700croreofassetsundermanagement.
SecondPhase19871993(EntryofPublicSectorFunds)
Intheyear1987markedtheentryofnonUTI,publicsectormutualfundssetupbypublic
sector banks and Life Insurance Corporation of India (LIC) and General Insurance
Corporation of India (GIC). SBI Mutual Fund was the first non UTI Mutual Fund
establishedinJune1987followedbyCanbankMutualFund(Dec87),PunjabNational
BankMutualFund(Aug89),IndianBankMutualFund(Nov89),BankofIndia(Jun90),
BankofBarodaMutualFund(Oct92).LICestablisheditsmutualfundinJune1989while
GIChadsetupitsmutualfundinDecember1990.

Atthe endof1993,the mutual fundindustryhad assets under management of


Rs.47,004crore.

ThirdPhase19932003(EntryofPrivateSectorFunds)
Withtheentryofprivatesectorfundsin1993,anew erastartedintheIndian
mutualfundindustry,givingtheIndianinvestorsawiderchoiceoffundfamilies.Also,
1993wastheyearinwhichthefirstMutualFundRegulationscameintobeing,under
whichallmutualfunds,exceptUTIweretoberegisteredandgoverned.Theerstwhile
KothariPioneer(nowmergedwithFranklinTempleton)wasthefirstprivatesectormutual
fundregisteredinJuly1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more
comprehensiveandrevisedMutualFundRegulationsin1996.Theindustrynowfunctions
undertheSEBI(MutualFund)Regulations1996.
Thenumberofmutualfundhouseswentonincreasing,withmanyforeignmutual
fundssettingupfundsinIndiaandalsotheindustryhaswitnessedseveralmergersand
acquisitions.AsattheendofJanuary2003,therewere33mutualfundswithtotalassetsof
0.Rs.1,21,805crore. The Unit Trust of India with Rs.44541crore of assets under
managementwaswayaheadofothermutualfunds.
FourthPhasesinceFebruary2003
InFebruary2003,followingtherepealoftheUnitTrustofIndiaAct1963UTIwas
bifurcatedintotwoseparateentities.OneistheSpecifiedUndertakingoftheUnitTrustof
Indiawithassets undermanagementofRs.29,835croreasattheendofJanuary2003,
representingbroadly,theassetsofUS64scheme,assuredreturnandcertainotherschemes.
TheSpecifiedUndertakingofUnitTrustofIndia,functioningunderanadministratorand
undertherulesframedbyGovernmentofIndiaanddoesnotcomeunderthepurviewof
theMutualFundRegulations.
ThesecondistheUTIMutualFundLtd,sponsoredbySBI,PNB,BOBandLIC.It
is registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcationoftheerstwhileUTIwhichhadinMarch2000morethanRs.76,000croreof
assetsundermanagementandwiththesettingupofaUTIMutualFund,conformingtothe
SEBIMutualFundRegulations,andwithrecentmergers takingplaceamongdifferent
privatesectorfunds,themutualfundindustryhasentereditscurrentphaseofconsolidation

andgrowth.AsattheendofOctober31,2003,therewere31funds,whichmanageassets
ofRs.1,26,726croreunder386schemes.
Thegraphindicatesthegrowthofassetsovertheyears.

GROWTH IN ASSETS UNDER MANAGEMENT

GlobalScenarioofMutualFunds
ThemoneymarketmutualFundsegmenthasatotalcorpusof$1.48millioninthe
U.S.againstacorpusof$100millioninIndia.Outofthetop10MutualFundsworldwide,
8arebanksponsored.OnlyFidelity&capitalarenonbankMutualFundsinthisgroup.In
U.S.thetotalnumberofschemesishigherthanthatofthelistedcompanieswhileinIndia
wehavejust277Schemes.

Internationally,MutualFundsareallowedtogoshort.InIndiafundmanagersdo
nothavesuchleeway.Inabout9.7millionhouseholdswillmanagetheirassetsonline.By
theyear2004,suchafacilityisnotavailableinIndia.Onlinetradingisagreatideato
reducemanagementexpensesfromthecurrent2%oftotalassetstoabout0.75%ofthe
totalassets.Around72%ofthecorecustomerbaseofMutualFundsinthetop50broking
firmsintheU.S.isexpectedtotradeonline.

TheIndianMutualFundIndustryisdominatedbytheUTI,whichhasatotalcorpus
ofRs.700billion,collectedfromover200millioninvestors.The2 nd largestcategoryof
MutualFundsistheonesfloatedbythenationalizedbanks.Canbankassetmanagement
floatedbyCanaraBank&S.B.I.FundManagementfloatedbyS.B.I.arethelargestof
these.TheaggregatecorpusofthefundsmanagedbythiscategoryofAssetManagement
CompaniesisaroundRs.150billionamongtheprivateplayersthelargestareBirlaCapital
Asset Management Company & Prudential ICICI Asset Management Company. The
aggregatecorpusoftheassetmanagedbythiscategoryofAssetManagementcompaniesis
aboutRs.60billion.

FUNDBASICS
AMutualFundisatrustthatpoolsthesavingsofanumberofinvestorswhoshare
acommonfinancialgoal.Themoneythuscollectedisinvestedbythefundmanagerin
differenttypesofsecuritiesdependingupontheobjectiveofthescheme.Thesecouldrange
fromsharestodebenturestomoneymarketinstruments.Theincomeearnedthroughthese
investmentsandthecapitalappreciationrealizedbytheschemeissharedbyitsunitholders
inproportiontothenumberofunitsownedbythem.ThusaMutualFundisthemost
suitable investment for the common man as it offers an opportunity to invest in a
diversified,professionallymanagedportfolioatarelativelylowcost.Thesmallsavingsof
alltheinvestors areputtogethertoincreasethebuyingpowerandhireaprofessional
managertoinvestandmonitorthemoney.Anybodywithaninvestiblesurplusofaslittle
asafewthousandrupeescaninvestinMutualFunds.EachMutualFundschemehasa
definedinvestmentobjectiveandstrategy.

StructureofaMutualFund
Amutualfundissetupintheformofatrust,whichhasSponsor,Trustees,Asset
ManagementCompany(AMC)andaCustodian.Thetrustisestablishedbyasponsoror
morethanonesponsorwhoislikeapromoterofacompany.Thetrusteesofthemutual
fundholditspropertyforthebenefitoftheunitholders.TheAMC,approvedbySEBI,
managesthefundsbymakinginvestmentsinvarioustypesofsecurities.Thecustodian,
whoisregisteredwithSEBI,holdsthesecuritiesofvariousschemesofthefundinits
custody.Thetrusteesarevestedwiththegeneralpowerofsuperintendenceanddirection
overAMC.TheymonitortheperformanceandcomplianceofSEBIRegulationsbythe
mutualfund.
AtypicalmutualfundstructureinIndiacanbegraphicallyrepresentedasfollows

Sponsor:
Thesponsorisrequired,undertheprovisionsoftheMutualFundRegulations,to
have a sound track record, a reputation of fairness and integrity in all his business
transactions.Additionally,thesponsorshouldcontributeatleast40%tothenetworthof
theAMC.However,ifanypersonholds40%ormoreofthenetworthofanAMCshallbe
deemedtobeasponsorandwillberequiredtofulfilltheeligibilitycriteriaspecifiedinthe
Mutual Fund Regulations. The sponsor or any of its directors or the principal officer
employedbythemutualfundshouldnotbeguiltyoffraud,notbeconvictedofanoffence
involvingmoralturpitudeorshouldhavenotbeenfoundguiltyofanyeconomicoffence.

Trustees:
ThemutualfundisrequiredtohaveanindependentBoardofTrustees, I.e.two
thirds of the trustees should be independent persons who are not associated with the
sponsorsinanymannerwhatsoever.AnAMCoranyofitsofficersoremployeesarenot
eligibletoactasatrusteeofanymutualfund.Incaseacompanyisappointedasatrustee,
thenitsdirectorscanactastrusteesofanyothertrustprovidedthattheobjectofsuchother
trustisnotinconflictwiththeobjectofthemutualfund.Additionally,nopersonwhois
appointedasatrusteeofamutualfundcanbeappointedasatrusteeofanyothermutual
fundunlessheisanindependenttrusteeandpriorapprovalofthemutualfundofwhichhe
isatrusteehasbeenobtainedforsuchanappointment.

The trustees are responsible for

INTER ALIA

systems in place, all key personnel, auditors, registrars

-ensuring that the AMC has all its


etc.

have been appointed prior to the

launch of any scheme. It is also the responsibility of the trustees to ensure that the AMC
does not act in a manner that is favorable to its associates such that it has a detrimental
impact on the unit holders, or that the management of one scheme by the AMC does not
compromise the management of another scheme. The trustees are also required to ensure
that an AMC has been diligent in empanelling and monitoring any securities transactions
with brokers, so as to avoid any undue concentration of business with any broker. The

Mutual Fund Regulations further mandates that the trustees should prevent any
conflictsofinterestbetweentheAMCandtheunitholdersintermsofdeploymentofnet
worth.

AssetManagementCompany:
ThesponsororthetrusteesarerequiredtoappointanAMCtomanagetheassetsof
themutualfund.UndertheMutualFundRegulations,theapplicantmustsatisfycertain
eligibilitycriteriainordertoqualifytoregisterwithSEBIasanAMC

Thesponsormusthaveatleast40%stakeintheAMC

The directors of the AMC should be persons having adequate professional


experienceinfinanceandfinancialservicesrelatedfieldandnotfoundguiltyofmoral
turpitudeorconvictedofanyeconomicoffenceorviolationofanysecuritieslaws

TheAMCshouldhaveandmustatalltimesmaintain,aminimumnetworthofRs.
10Crore

The board of directors of such AMC has at least 50% directors, who are not
associatesoforassociatedinanymannerwith,thesponsororanyofitssubsidiariesorthe
trustees

TheChairmanoftheAMCisnotatrusteeofanymutualfund.
In addition to the above eligibility criteria and other ongoing compliance
requirementslaiddownintheMutualFundRegulations,theAMCisrequiredtoobserve
thefollowingrestrictionsinitsnormalcourseofbusiness.AnydirectoroftheAMCcannot
holdofficeofadirectorinanotherAMCunlesssuchpersonisanindependentdirectorand
the approval of the board of the AMC of which such person is a director, has been
obtained; the AMC shall not act as a trustee of any mutual fund; the AMC cannot
undertake any other business activities except activities in the nature of portfolio
managementservices,managementandadvisoryservicestooffshorefunds,pensionfunds,
providentfunds,venturecapitalfunds,managementofinsurancefunds,financial

Consultancyandexchangeofresearchoncommercialbasisifanyofsuchactivitiesarenot
inconflictwiththeactivitiesofthemutualfund.

Custodian:
The mutual fund is required, under the Mutual Fund Regulations, to appoint a
custodiantocarryoutthecustodialservicesfortheschemesofthefund.Onlyinstitutions
withsubstantialorganizationalstrength,servicecapabilityintermsofcomputerization,and
otherinfrastructurefacilities areapprovedtoactascustodians.Thecustodianmustbe
totallydelinkedfromtheAMCandmustberegisteredwithSEBI.UndertheSecurities
and Exchange Board of India (Custodian of Securities) Guidelines, 1996, any person
proposingtocarryonthebusinessasacustodianofsecuritiesmustregisterwiththeSEBI
andisrequiredtofulfillspecifiedeligibilitycriteria.Additionally,acustodianinwhichthe
sponsororitsassociatesholds50%ormoreofthevotingrightsofthesharecapitalofthe
custodianorwhere50%ormoreofthedirectorsofthecustodianrepresenttheinterestof
thesponsororitsassociatescannotactascustodianforamutualfundconstitutedbythe
samesponsororanyofitsassociateorsubsidiarycompany.

AssociationofMutualFundsinIndia(AMFI)
AssociationofMutualFundsinIndia(AMFI)isanapexbodyofassetmanagement
companiesoftheMutualFundregisteredinIndia.ItwasincorporatedontheAugust22,
1995asanonprofitmakingorganization.ItisdedicatedtodevelopingtheIndianMutual
Fundindustryonprofessional,healthy&ethicallines&toenhanceandmaintainstandards
inallareaswithaviewtoprotecting&promotingtheinterestsofMutualFunds&their
unitholders.
OBJECTIVES
Torecommend&implementhealthybusinesspractices,ethicalcodeofconduct,
standardprinciples&practicestobefollowedbythemembersofthecompany&
othersengagedintheactivitiesofMutualFunds&AssetManagementincluding
agenciesconnectedorinvolvedinthefieldofcapitalMarkets&financialServices.

Topromotehighstandardsofcommercialhonor&encourage&promoteamong
members&otherstheobservanceofsecuritieslawsincludingregulations&
directivesissuedbySecurities&ExchangeBoardofIndia(SEBI)&functionin
thebestofinterestoftheinvestingpublic.
Tohelpinsettingupprofessionalstandardsforprovidingefficientservices&
establishingstandardpracticesforMutualFund&AssetManagement
activities.
TobringaboutbettercoordinationinthefieldofMutualFunds&Asset
ManagementIndustry.
Topromote&developsound,progressive&dynamicprinciples,practices&
conventionsintheactivitiesofMutualFund&AssetManagement.
Torenderassistance&providecommonservices&utilitiestothepersonsengaged
inthefieldofMutualFunds&AssetManagement.

ROLEOFMUTUALFUNDS
MutualFunds&FinancialMarket
In the process of development Indian mutual funds have emerged as strong
financialintermediaries&areplayingaveryimportantroleinbringingstabilitytothe
financialsystem&efficiencytoresourceallocation.MutualFundshaveopenednewvistas
toinvestors&impartedamuchneededliquiditytothesystem.Intheprocesstheyhave
challenged the hitherto role of commercial banks in the financial market & national
economy.
MutualFund&CapitalMarket
TheactiveinvolvementofMutualFundsinpromotingeconomicdevelopmentcan
beseennotonlyintermsoftheirparticipationinthesavingsmarketbutalsointheir
dominantpresenceinthemoney&capitalmarket.Adevelopedfinancialmarketiscritical
tooveralleconomicdevelopment,&MutualFunds playanactiveroleinpromotinga
healthycapitalmarket.TheassetholdingpatternofmutualfundsintheUSAindicatesthe
dominantroleofMutualFundsinthecapitalmarket&moneymarket.Moreoverthey
havealsorenderedcriticalsupporttosecuritiesmortgageloans&municipalbondmarket
intheUSA.IntheUSA,MutualFundsprovideveryactivesupporttothesecondarymarket
intermsofpurchaseofsecurities.

InvestorspreferencespatterninIndiahasundergoneatremendouschangeduring
recenttimes,alongwiththechangesintheshareoffinancialassetsinthetotalannual
savings.Indianinvestorshavemovedtowardsmoreliquid&growthorientedtradeable
instrumentslikesshares/debentures&unitsofMutualFunds.Theshiftisassetholding
patternofinvestorshasbeensignificantlyinfluencedbytheequity&unitculturewhile
the holders of company shares & debentures are concentrated in the urban areas,
small/mediuminvestorsinthesemiurban&ruralareasaretendingtowardsMutualFunds.
Mutual Funds in India have certainly created awareness among investors about equity
orientedinvestments&itsbenefits.

TypesofMutualFundSchemes
Thereare awidevarietyofMutual Fundschemes that catertoinvestors need,
whateveryourage,financialposition,risktoleranceandreturnexpectations.Whetheras
thefoundationofyourinvestmentprogramorasasupplement,MutualFundschemescan
helpyoumeetyourfinancialgoals.

ByStructureSchemescanbeclassifiedinto3types
OpenEndedSchemes
Thesedonothaveafixedmaturity.InvestorsdealdirectlywiththeMutualFundfor
theirinvestmentsandredemptions.Thekeyfeatureisliquidity.Theycanconvenientlybuy
andselltheirunitsatNetAssetValue("NAV")relatedprices.
CloseEndedSchemes
Schemesthathaveastipulatedmaturityperiod(rangingfrom2to15years)are
calledcloseendedschemes.Investorscaninvestdirectlyintheschemeatthetimeofthe
initial issue and thereafter they can buy or sell the units of the scheme on the stock
exchangeswheretheyarelisted.Themarketpriceatthestockexchangecouldvaryfrom
thescheme'sNAVonaccountofdemandandsupplysituation,unitholders'expectations
andothermarketfactors.Oneofthecharacteristicsofthecloseendedschemesisthatthey
aregenerallytradedatadiscounttoNAV;butclosertomaturity,thediscountnarrows.
Somecloseendedschemesgivethemanadditionaloptionofsellingtheirunitsdirectlyto
theMutualFundthroughperiodicrepurchaseatNAVrelatedprices.SEBIRegulations
ensurethatatleastoneofthetwoexitroutesisprovidedtotheinvestor.
IntervalSchemes
Thesecombinethefeaturesofopenendedandcloseendedschemes.Theymaybe
tradedonthestockexchangeormaybeopenforsaleorredemptionduringpredetermined
intervalsatNAVrelatedprices.

ByInvestmentObjective
Growth/EquitySchemes
Aimtoprovidecapitalappreciationoverthemediumtolongterm.Theseschemes
normallyinvestamajorityoftheirfundsinequitiesandarewillingtobearshortterm
decline in value for possible future appreciation. These schemes are not for investors
seekingregularincomeorneedingtheirmoneybackintheshortterm.
IncomeSchemes
Aimtoprovideregularandsteadyincometoinvestors.Theseschemesgenerally
invest in fixed income securities such as bonds and corporate debentures. Capital
appreciationinsuchschemesmaybelimited.
BalancedSchemes
Aimtoprovidebothgrowthandincomebyperiodicallydistributingapartofthe
incomeandcapitalgainstheyearn.Theyinvestinbothsharesandfixedincomesecurities
intheproportionindicatedintheirofferdocuments.Inarisingstockmarket,theNAVof
theseschemesmaynotnormallykeeppace,orfallequallywhenthemarketfalls.
MoneyMarketSchemes
Aimtoprovideeasyliquidity,preservationofcapitalandmoderateincome.These
schemesgenerallyinvestinsafer,shortterminstruments,suchastreasurybills,certificates
ofdeposit,commercialpaperandinterbankcallmoney.Returnsontheseschemesmay
fluctuate,dependingupontheinterestratesprevailinginthemarket.
TaxSavingSchemes
Theseschemesoffertaxrebatestotheinvestorsundertaxlawsasprescribedfrom
time to time. This is made possible because the Government offers tax incentives for
investmentinspecifiedavenues.Forexample:EquityLinkedSavingsSchemes(ELSS)
and Pension Schemes. Recent amendments to the Income Tax Act provide further
opportunitiestoinvestorstosavecapitalgainsbyinvestinginMutualFunds.Thedetailsof
suchtaxsavingsareprovidedintherelevantofferdocuments.

SpecialSchemes
Thiscategoryincludesindexschemesthatattempttoreplicatetheperformanceofa
particularindex,suchastheBSESENSEXortheNSE50,orindustryspecificschemes
(whichinvestinspecificindustries)orSECTORIALschemes(whichinvestexclu1sively
insegmentssuchas'A'Groupsharesorinitialpublicofferings).Indexfundschemesare
idealforinvestorswhoaresatisfiedwithareturnapproximatelyequaltothatofanindex.
Sector fund schemes are ideal for investors who have already decided to invest in a
particularsectororsegment.Keepinginmindthatanyoneschememaynotmeetallthe
investorsrequirementsforalltime

AdvantagesofMutualFund
ProfessionalManagement
Investorsavailtheservicesofexperiencedandskilledprofessionalswhoarebacked
byadedicatedinvestmentresearchteam,whichanalysestheperformanceandprospectsof
companiesandselectssuitableinvestmentstoachievetheobjectivesofthescheme.
Diversification
MutualFunds investinanumberofcompanies acrossabroadcrosssectionof
industriesandsectors.Thisdiversificationreducestheriskbecauseseldomdoallstocks
declareatthesametimeandinthesameproportion.Investorsachievethisdiversification
throughaMutualFundwithfarlessmoneythantheycandoontheirown.
ConvenientAdministration
InvestinginaMutualFundreducespaperworkandhelpstoavoidmanyproblems
suchasbaddeliveries,delayedpayments andunnecessaryfollow upwithbrokers and
companies.MutualFundssavetimeandmakeinvestingeasyandconvenient.

ReturnPotential
Overamediumtolongterm,MutualFundshavethepotentialtoprovideahigher
returnastheyinvestinadiversifiedbasketofselectedsecurities.
LowCosts
MutualFundsarearelativelylessexpensivewaytoinvestcomparedtodirectly
investinginthecapitalmarketsbecausethebenefitsofscaleinbrokerage,custodialand
otherfeestranslateintolowercostsforinvestors.
Liquidity
Inopenendedschemes,Investorscangettheirmoneybackpromptlyatnetasset
valuerelatedpricesfromtheMutualFunditself.Withcloseendedschemes,theycansell
theirunitsonastockexchangeattheprevailingmarketpriceoravailofthefacilityof
directrepurchaseatNAVrelatedprices whichsomecloseendedandintervalschemes
offerperiodically.
Transparency
Investorsgetregularinformationonthevalueoftheirinvestmentinadditionto
disclosureonthespecificinvestmentsmadebythescheme,theproportioninvestedineach
classofassetsandthefundmanager'sinvestmentstrategyandoutlook.
Flexibility
Throughfeaturessuchasregularinvestmentplans,regularwithdrawalplansand
dividend reinvestment plans, Investors can systematically invest or withdraw funds
accordingtotheirneedsandconvenience.
ChoiceofSchemes
MutualFundsofferafamilyofschemestosuitthevaryingneedsoveralifetimeof
theirInvestors.

WellRegulated
AllMutualFundsareregisteredwithSEBIandtheyfunctionwithintheprovisions
ofstrictregulationsdesignedtoprotecttheinterestsofinvestors.TheoperationsofMutual
FundsareregularlymonitoredbySEBI.

DisadvantagesofMutualFundInvestment
NoControlovercosts
Aninvestorinamutualfundhasnocontrolovertheoverallcostofinvesting.He
paysinvestmentmanagementfeesaslongasheremainswiththefund,albeitinreturnfor
theprofessionalmanagementandresearch.Feesareusuallypayableasapercentageofthe
valueofhisinvestments,whetherthefundvalueisrisingordeclining.
NoTailormadePortfolios
Investorswhoinvestontheirowncanbuildtheirownportfoliosofshares,bonds
andothersecurities.Investingthroughfundsmeanshedelegatesthisdecisiontothefund
managers.Theveryhighnetworthindividualsorlargecorporateinvestorsmayfindthisto
beaconstraintinachievingtheirobjectives.
Managingaportfoliooffunds
Availabilityofalargenumberoffundscanactuallymeantoomuchchoiceforthe
investor.Hemayagainneedadviceonhowtoselectafundtoachievehisobjective,quite
similartothesituationwhenhastoselectindividualsharesorbondstoinvestin.

RISKSOFINVESTINGINMUTUALFUNDS
Market/InterestRisk
Volatilityofpricesleadingtofloatingreturns
Largelymitigatedwithaholdingperiodofover6months
CreditRisk
Potentialdefaultofbondsontheportfolio
EquityRisk
Possibilityofthefundmanagernotabletomeetredemptions

PLAYERSINMUTUALFUNDINDUSTRY
S.
no.

AMC Name

AAUM

Axis Mutual Fund

2662399.27

Baroda Pioneer Mutual Fund

Birla Sun Life Mutual Fund

BNP Paribas Mutual Fund

391506.34

BOI AXA Mutual Fund

351818.62

Canara Robeco Mutual Fund

761660.83

Deutsche Mutual Fund

2242702.05

DSP Black Rock Mutual Fund

3783799.59

Edelweiss Mutual Fund

75499.58

10

Escorts Mutual Fund

25359.63

11

Franklin Templeton Mutual


Fund

12

Goldman Sachs Mutual Fund

13

HDFC Mutual Fund

14

HSBC Mutual Fund

15

ICICI Prudential Mutual Fund

16

IDBI Mutual Fund

734419.4

17

IDFC Mutual Fund

5171483.38

18

IIFCL Mutual Fund (IDF)

33122.97

19

IIFL Mutual Fund

34590.65

20

IL&FS Mutual Fund (IDF)

88178.34

21

India bulls Mutual Fund

717257.45
11975165.76

7044365.89
803789.5
16163414.98
824190.13
14855895.06

359026.93

22

JM Financial Mutual Fund

1223079.64

23

JPMorgan Mutual Fund

1564079.17

24

Kotak Mahindra Mutual Fund

4137784.87

25

L&T Mutual Fund

2249669.81

26

LIC NOMURA Mutual Fund

931299.94

27

Mirae Asset Mutual Fund

181771.67

28

Motilal Oswal Mutual Fund

211439.78

29

Peerless Mutual Fund

130200.41

30

PPFAS Mutual Fund

31

Pramerica Mutual Fund

230936

32

PRINCIPAL Mutual Fund

621774.78

33

Quantum Mutual Fund

34

Reliance Mutual Fund

35

2100909.47

36

Religare Invesco Mutual


Fund
Sahara Mutual Fund

37

SBI Mutual Fund

7494223.67

38

Shriram Mutual Fund

39

SREI Mutual Fund (IDF)

40

Sundaram Mutual Fund

2187461.11

41

Tata Mutual Fund

42

Taurus Mutual Fund

415043.39

43

Union KBC Mutual Fund

272647.44

44

UTI Mutual Fund


Grand Total

57493.56

57542.95
13712383.95

14377.21

3375.91

2696830

9275061.17
118869032.3

NEEDANDIMPORTANCEOFSTUDY
Asmallinvestoristheonewhoisabletocorrectlyplan&decideinwhichprofitable
& safe instrument to invest. To lock up ones hard earned money in a savings banks
account is not enough to counter the monster of inflation. Using simple concepts of
diversification,powerofcompoundinterest,stablereturns&limitedexposuretoequity
investment,onecanmaximizehisreturnsoninvestments&multiplyonessavings.

Investment is a serious proposition one has to look into various factors before
decidingontheinstrumentsinwhichtoinvest.Tosaveisnotenough.Onemustinvest
wisely&getmaximumreturns.Onemustplaninvestmentinsuchawaythathisinvestment
objectives are satisfied. A sound investment is one which gives the investor reasonable
returnswithaproperprofitablemanagement

DifferentAvenuesofinvestment
OPTIONS

RETURN

RISK

LIQUIDITY

Savingsaccount

Verylow

Verylow

High

FixedDeposits

Low

Low

Low

DirectEquity

Volatile

Veryhigh

High

Insurance

Medium

Low

Low

Companyfixeddeposits

Low

High

Verylow

Debentures

Low

Medium

Medium

Bonds

Low

Low

Low

Mutualfunds

High

Medium

High

Postofficeschemes

Low

Low

Low

Governmentsecurities

Low

Low

Low

Realestate

High

High

Low

Currency

High

High

High

Bullion

Medium

High

Medium

This report gives the details about various investment objectives desired by an
investor,detailsabouttheconcept&workingofmutualfund.Thisreportalsocoversthe
differentplayersinMutualFundsanddifferentavenuesofinvestment&indetailabout
HDFCMUTUALFUNDS.

ObjectivesoftheStudy

To study various investment alternatives and in particular investors


preferencetowardsmutualfunds.

Tostudythepreferenceofinvestorsintodaysscenario(lessriskandmorereturn).

Toassesstheriskofinvestors withreferencetodiversifiablerisk&
nondiversifiablerisk.

Tostudymarketpotentialityofmutualfundamonginvestors.

TostudywhethertheinvestorsareconsideringHDFCabetteroptionornot.

ResearchMethodology
Sourcesofdatacollection
Twosourcesofcollectingdatahasbeenemployedi.e.primarydataandsecondarydata

Primarydata
A questionnaire is used as a tool for the systematic collection of relevant
information. A well questionnaire consisting of simple questions has been prepared &
directedtotherespondents.(Questionnaireisattachedattheendoftheprojects)
Thequestionnairepreparedconsistsofclosedendedquestionswhich
includesmultiplechoice
Ratingscale
Thequestionnairealsoconsistsofopenendedquestions.
Thefirstsectionofquestionnaireispreparedmainlyforcollectingthepersonal
informationabouttherespondents.
Thesecondsectioncontainsmultiplechoicequestions.Itispreparedtocollectthe
informationaboutcustomerperception.
Thecloseendedquestionsareveryeasytoanswerfromthequestionnaire
respondedbytherespondents.

SecondaryData
Secondarydataiscollectedfromthecompanyswebsites,factsheetetc.

SamplingProcedure
Samplesize:200

Explorativeapproach:Thisapproachisoneofthemostpopularapproachesthesedays.
Inthisapproach,aproblemisdescribedbytheresearcherusingquestionnaireorschedule.
Thisapproachenablesaresearchertoexplorenewareasofinvestigation.

Researchinstrument:Questionnaire
Whichisusedtocollecttheprimarydatabypersonnelinterview

LIMITATIONSOFTHESTUDY

Muchinteractionhasnotbeenpossiblewiththecustomerdueto
1. Indifferenceoruninterestedofthecustomerstointeractwithme
2. Differentperceptionsabouttheinvestmentoptions
3. Thenonavailabilityoftimetothem

Manyinvestorsthinkmutualfundsandsharesaretheoneandsame.

REVIEW OF
LITERATURE

DEFNITIONOFMUTUALFUNDS

DEFNITION:
Amutualfund,alsoreferredtoasanopenendfund,isaninvestmentcompanythat
spreadsitsmoneyacrossadiversifiedportfolioofsecuritiesincludingstocks,bonds,or
moneymarketinstruments.
Shareholderswhoinvestinafundeachownarepresentativeportionofthose
investments,lessanyexpenseschargedbythefund.
Mutualfundinvestorsmakemoneyeitherbyreceivingdividendsandinterestfromtheir
investments,orbytheriseinvalueofthesecurities.Dividends,interestandprofitsfrom
thesaleofanysecurities(capitalgains)arepassedontotheshareholdersintheformof
distributions.Andshareholdersgenerallyareallowedtosell(redeem)theirsharesat
anytimefortheclosingmarketpriceofthefundonthatday.

DEFNITION:
Mutualfundshavebeenaroundforalongtime,datingbacktotheearly19thcentury.
ThefirstmodernAmericanmutualfundopenedin1924,yetitwasonlyinthe1990s
thatmutualfundsbecamemainstreaminvestments,asthenumberofhouseholdsowning
themnearlytripledduringthatdecade.Withrecentsurveysshowingthatover88%ofall
investorsparticipateinmutualfunds,you'reprobablyalreadyfamiliarwiththese
investments,orperhapsevenownsome.Inanycase,it'simportantthatyouknowexactly
howtheseinvestmentsworkandhowyoucanusethemtoyouradvantage.
Amutualfundisaspecialtypeofcompanythatpoolstogethermoneyfrommany
investorsandinvestsitonbehalfofthegroup,inaccordancewithastatedsetofobjectives.
Mutualfundsraisethemoneybysellingsharesofthefundtothepublicmuchlikeany
othercompanycansellstockinitselftothepublic.Fundsthentakethemoneytheyreceive
fromthesaleoftheirshares(alongwithanymoneymadefrompreviousinvestments)and
useittopurchasevariousinvestmentvehicles,suchasstocks,bondsandmoneymarket
instruments.Inreturnforthemoneytheygivetothefundwhenpurchasingshares,
shareholdersreceiveanequitypositioninthefundand,ineffect,ineachofitsunderlying
securities.Formostmutualfunds,shareholdersarefreetoselltheirsharesatanytime,
althoughthepriceofashareinamutualfundwillfluctuatedaily,dependinguponthe
performanceofthesecuritiesheldbythefund.

DEFNITION:
Amutualfundissimplyafinancialintermediarythatallowsagroupofinvestorstopool
theirmoneytogetherwithapredeterminedinvestmentobjective.Themutualfundwill
haveafundmanagerwhoisresponsibleforinvestingthepooledmoneyintospecific
securities(usuallystocksorbonds).Whenyouinvestinamutualfund,youarebuying
shares(orportions)ofthemutualfundandbecomeashareholderofthefund.
.
DEFNITION:
AnopenendedfundoperatedbyanInvestmentcompanywhichraisesmoneyfrom
shareholdersandinvestsinagroupofassets,inaccordancewithastatedsetofobjectives.
Mutualfundsraisemoneybysellingsharesofthefundtothepublic,muchlikeanyother
typeofcompanycansellstockinitselftothepublic.Mutualfundsthentakethemoney
theyreceivefromthesaleoftheirshares(alongwithanymoneymadefromprevious
investments)anduseittopurchasevariousinvestmentvehicles,suchasstocks,bondsand
moneymarketinstruments.Inreturnforthemoneytheygivetothefundwhenpurchasing
shares,shareholdersreceiveanequitypositioninthefundand,ineffect,ineachofits
underlyingsecurities.Formostmutualfunds,shareholdersarefreetoselltheirsharesat
anytime,althoughthepriceofashareinamutualfundwillfluctuatedaily,depending
upontheperformanceofthesecuritiesheldbythefund.Benefitsofmutualfundsinclude
diversificationandprofessionalmoneymanagement.Mutualfundsofferchoice,liquidity,
andconvenience,butchargefeesandoftenrequireaminimuminvestment.Aclosedend
fundisoftenincorrectlyreferredtoasamutualfund,butisactuallyaninvestmenttrust.
Therearemanytypesofmutualfunds,includingaggressivegrowthfund,asset
allocationfund,balancedfund,blendfund,bondfund,capitalappreciationfund,
clonefund,closedfund,crossoverfund,equityfund,fundoffunds,globalfund,
growthfund,growthandincomefund,hedgefund,incomefund,indexfund,
internationalfund,moneymarketfund,municipalbondfund,primeratefund,
regionalfund,sectorfund,specialtyfund,stockfund,andtaxfreebondfund.

DEFNITION:
A security that gives small investors access to a welldiversified portfolio of equities,
bondsandothersecurities.Eachshareholderparticipatesinthegainorlossofthefund.
Sharesareissuedandcanberedeemedasneeded

COMPANY
PROFILE

Overview of HDFC Mutual Funds


HDFC Mutual Fund has been constituted as a trust in accordance with the provisions of the
Indian Trusts Act, 1882, as per the terms of the trust deed dated June 8, 2000 with Housing
Development Finance Corporation Limited (HDFC) and Standard Life Investments Limited
as the Sponsors / Settlers and HDFC Trustee Company Limited, as the Trustee. The Trust
Deed has been registered under the Indian Registration Act, 1908. The Mutual Fund has
been registered with SEBI, under registration code MF/044/00/6 on June 30, 2000.
HDFC Asset Management Company Limited (AMC)
HDFC Asset Management Company Ltd (AMC) was incorporated under the Companies
Act, 1956, on December 10, 1999, and was approved to act as an Asset Management
Company for the HDFC Mutual Fund by SEBI vide its letter dated July 3, 2000.
The registered office of the AMC is situated at HUL House, 2nd Floor, H. T. Parekh
Marg, 165-166, Back bay Reclamation, Church gate, Mumbai - 400 020. The Company
Identification Number (CIN) is U65991MH1999PLC123027.
In terms of the Investment Management Agreement, the Trustee has appointed the HDFC
Asset Management Company Limited to manage the Mutual Fund. The paid up capital of
the AMC is Rs. 25.241crore as on September 30, 2014.

The equity shareholding pattern of the AMC as on March 31, 2014 is as follows:

MORGAN STANLEY MUTUAL FUND


HDFC Asset Management Company Limited (HDFC AMC) and HDFC Trustee
Company Limited (HDFC Trustee), the asset management company and trustee company
of HDFC Mutual Fund (HDFC MF) respectively had entered into an agreement with
Morgan Stanley Investment Management Private Limited (MS AMC) and the Board of
Trustees of Morgan Stanley Mutual Fund (the MS Trustees), the asset management
company and trustees of Morgan Stanley Mutual Fund (MSMF), pursuant to which the
schemes of MSMF (MSMF Schemes) were transferred to and formed part of HDFC
MF, HDFC Trustee took over the trusteeship of the MSMF Schemes from the MS Trustees
and HDFC AMC took over the rights to manage the MSMF Schemes from MS AMC and
became the investment manager of the MSMF Schemes (the Transaction).
Changes to the Schemes of MSMF
1. Pursuant to the acquisition of schemes, to avoid similar products being offered to the
investors, following changes were made to the Schemes of MSMF and HDFC
MF (Changes to the Schemes):

Current name and Type of change


type
scheme/Transfer
scheme

Proposed
new
name
and type
of
scheme

Morgan
Stanley Change in Name and HDFC
Growth
Fund Fundamental
Large Cap
(Open Ended Equity Attributes
Fund
Fund)
(Openended
equity
scheme)
Morgan Stanley A.C.E Change in Name and HDFC
Fund
Fundamental
Small and
(Open Ended Across Attributes
Midcap
Capitalizations
Fund
Equity Fund)
(Openended
equity
scheme)
Morgan Stanley Gilt Change in Name and HDFC
Fund
Fundamental
Inflation
(Open
Ended
Gilt Attributes
Indexed
Fund)
Bond Fund
(Openended
income
scheme)
Morgan
Stanley Merger
HDFC
Liquid
Fund
Liquid
(Open Ended Liquid
Fund
Fund)
(Openended
liquid
income
scheme)
Morgan Stanley Ultra Merger
HDFC Cash
Short
Term
Bond
Manageme
Fund
nt Fund
(Open Ended Debt
Treasury
Fund)
Advantage

Plan
(Openended
income
scheme)
Morgan
Stanley Merger
HDFC High
Active
Bond
Fund
Interest
(Open Ended Debt
Fund
Fund)
Dynamic
Plan
(Openended
income
scheme)
Morgan Stanley Short Merger
HDFC
Term
Bond
Fund
Short Term
(Open Ended Debt
Plan*
Fund)
(Openended
income
scheme)
Morgan Stanley Multi Change in Name and HDFC
Asset
Fund Fundamental
Dynamic
(Plan A and Plan B) Attributes
PE
Ratio
(Open Ended Debt
Fund
of
Fund)
Funds**
(Openended
fund
of
funds
scheme)
HDFC Focused Large- Merger
HDFC
Cap
Fund
Equity
(Open Ended Equity
Fund
Scheme)
(Openended
equity
scheme)

* HDFC Short Term Plan underwent a change in fundamental attributes


after the close of business hours on June20, 2014.

* As part of change in fundamental attributes of Morgan Stanley Multi


Asset Fund (Plan A and Plan B),
Plan A was renamed as HDFC Dynamic PE Ratio Fund of Funds and Plan B
was merged into it.
2. Details about the Changes to the Schemes were provided in
Notice-cum-Addendum dated May 14, 2014 issued by MSMF. The Noticecum-addendum and the Option Exercise Letter were also published on
the website of Morgan Stanley Mutual Fund.
3. Effective Dates for the Changes to the Schemes: The Changes to
the Schemes were subject to Completion which was announced by MS
AMC and HDFC AMC through public notice.

ZURICH INDIA MUTUAL FUND


Zurich Insurance Company (ZIC), the Sponsor of Zurich India Mutual
Fund, following a review of its overall strategy, had decided to divest its
Asset Management business in India. The AMC had entered into an
agreement with ZIC to acquire the said business, subject to necessary
regulatory approvals.
On obtaining the regulatory approvals, the following Schemes of
Zurich India Mutual Fund have migrated to HDFC Mutual Fund on
June 19, 2003. These Schemes have been renamed as follows:
Former Name

New Name

Zurich India Equity Fund

HDFC Equity Fund

Zurich India Prudence Fund

HDFC Prudence Fund

Zurich India Capital Builder Fund

HDFC Capital Builder


Fund

Zurich India TaxSaver Fund

HDFC TaxSaver

Former Name

New Name

Zurich India Top 200 Fund

HDFC Top 200 Fund

Zurich India High Interest Fund

HDFC High Interest Fund

Zurich India Liquidity Fund

HDFC
Fund

Zurich India Sovereign Gilt Fund

HDFC Sovereign Gilt Fund*

Cash

Management

TRUSTEES
HDFC Trustee Company Limited, a company incorporated under the
Companies Act, 1956 is the Trustee to HDFC Mutual Fund Vide the Trust
deed dated June 8, 2000, as amended from time to time. HDFC Trustee
Company

Ltd

is

wholly

owned

subsidiary

of

HDFC.

The registered office of the Trustee company is situated at HUL House,


2nd Floor, H. T. Parekh Marg, 165-166, Back bay Reclamation, Church
gate, Mumbai - 400 020. The Company Identification Number (CIN) is
U65991MH1999PLC123026.

The Board of Directors of HDFC Trustee Company Limited Consist


of the following eminent persons.

MR. ANIL KUMAR HIRJEE


Chairman

MR. VINCENT JOSEPH OBRIEN


Director

MR. SHISHIR K. DIWANJI


Director

MR. RANJAN SANGHI


Director

MR. V. SRINIVASA RANGAN


Director

SPONSORS
HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (HDFC)
HDFC Ltd. was incorporated in 1977 as the first specialized Mortgage
Company in India. HDFC provides financial assistance to individuals,
corporate and developers for the purchase or construction of residential
housing. It also provides property related services (e.g. property
identification, sales services and valuation), training and consultancy. Of
these activities, housing finance remains the dominant activity. HDFC has
a client base of around 13.25lac borrowers, over 17.5lac depositors over
1.82lac shareholder and over 25,000 deposit agents, as at March 31,
2014.
As at March 31, 2014, HDFC had mortgage loan assets of Rs. 1971.00
billion. Since inception, HDFC has financed over 4.6 million housing units.
74% of shareholders in HDFC are foreign investors. HDFCs market
capitalization as at March 31, 2014 stood at approximately Rs 1379.35
billion.
HDFC's Borrowings consists of domestic term loans from banks and
insurance companies, bonds and retail deposits. HDFC has received the
highest rating for its bonds and deposits program for the Nineteenth year
in succession.
As part of HDFCs developmental initiatives, the company has set up
institutions in various fields including Banking, Insurance; Life and

General, Asset Management, Credit Rating, Consumer Finance, ITenabled services, Real Estate and Education Finance.
Over the years, the HDFC group has emerged as a strong financial
conglomerate in the Indian capital markets with a presence in banking,
life and general insurance, asset management and venture capital.
HDFCs key associate and subsidiary companies include HDFC Bank
Limited, HDFC Standard Life Insurance Company Limited, HDFC Ergo
General Insurance Company Limited, HDFC Asset Management Company
Limited, GRUH Finance Limited, HDFC Venture Capital Limited and Credila
Financial Services Limited.

STANDARD LIFE INVESTMENTS LIMITED


The Standard Life Assurance Company was established in 1825 and has
considerable experience in global financial markets. The company was
present in the Indian life insurance market from 1847 to 1938 when
agencies were set up in Kolkata and Mumbai. The company re-entered
the Indian market in 1995, when an agreement was signed with HDFC to
launch an insurance joint venture.

In April 2006, the Board of The Standard Life Assurance Company


recommended that it should demutualise and Standard Life plc float on
the London Stock Exchange. At a Special General Meeting held in May
2006, voting members overwhelmingly voted in favour of this. The Court
of Session in Scotland approved this in June 2006 and Standard Life plc
floated on the London Stock Exchange on 10 July 2006.

Standard Life Investments was launched as an investment management

company in 1998. It is the dedicated investment management company


of the Standard Life group and is a wholly owned subsidiary of Standard
Life Investments (Holdings) Limited, which in turn is a wholly owned
subsidiary of Standard Life plc.

With global assets under management of approximately US$319.5 billion


(191.7 billion) as at March 31, 2014, Standard Life Investments Limited
is a leading asset manager with an expanding global reach operating in
the UK, Canada, Hong Kong, China, Korea, Ireland, France, Australia and
the USA, and is responsible for investing money on behalf of six million
retail and institutional clients worldwide.

In order to meet the different needs and risk profiles of its clients,
Standard Life Investments Limited manages a diverse portfolio covering
all of the major markets world-wide, which includes a range of private
and

public

equities,

government

and

company

investments and various derivative instruments.

CUSTODIAN
HDFC BANK LTD
CITI BANK
DEUTSCHE BANK

bonds,

property

WHY HDFC MUTUAL FUND


HDFC Mutual Fund is one of the largest mutual funds and well-established
fund house in the country with focus on delivering consistent fund
performance across categories since the launch of the first scheme(s) in
July 2000. While our past experience does make us a veteran, but when it
comes to investments, we have never believed that the experience is
enough.

Vision Statement

Our Investment Philosophy


The single most important factor that drives HDFC Mutual Fund is its
belief to give the investor the chance to profitably invest in the financial
market, without constantly worrying about the market swings. To realize
this belief, HDFC Mutual Fund has set up the infrastructure required to
conduct all the fundamental research and back it up with effective
analysis. Our strong emphasis on managing and controlling portfolio risk
avoids chasing the latest "fads" and trends.

We Offer
We believe, that, by giving the investor long-term benefits, we have to
constantly review the markets for new trends, to identify new growth
sectors and share this knowledge with our investors in the form of
product offerings. We have come up with various products across asset
and risk categories to enable investors to invest in line with their
investment objectives and risk taking capacity.

AMC'S CSR INITIATIVES


PREAMBLE
HDFC Asset Management Company Limited (AMC) is a subsidiary of HDFC
Ltd. Being a part of the HDFC group, corporate social responsibility (CSR)
is an important part of AMCs culture and value systems. AMC had set up
a separate Corporate Social Responsibility Fund with the object of

participating and supporting projects undertaken by Non-Governmental


organizations

(NGOs),

community

groups

and

others;

for

social/

philanthropic causes, investor centric initiatives, well before the CSR


provisions / rules were effective under the Companies Act, 2013 (Act).
As an Investment Manager to HDFC Mutual Fund, one of our unique
initiative for CSR was launching series of Cancer Cure Funds partnering
with Indian Cancer Society (ICS) to provide financial assistance to the
needy cancer patients for their treatment by tapping those investors who
would be willing to donate part of the dividend or entire dividend
declared, if any, under the scheme for this purpose.
OUR VISION
To be a dominant player in the Indian mutual fund space recognized for
its high levels of ethical and professional conduct and a commitment
towards enhancing investor interests. Our CSR initiatives will be aligned
with the same principles to serve a social purpose, sustainable
development of the society and the environment in which it operates.

ANNEXURE A (AS MENTIONED IN THE CSR POLICY)


INDIAN CANCER CURE FUND (ICCF) PROJECT

Indian Cancer Cure Fund Project is an initiative of Indian Cancer Society


(ICS) for funding the treatment costs of needy cancer patients/survivors.
HDFC AMC has agreed to partner with Indian Cancer Society for this
Project as part of its CSR initiative. HDFC AMCs partnering involves direct
contribution to ICS and also contribution of dividend received from the
investment made in HDFC Cancer Cure Fund (2014).
As an philanthropic initiative, HDFC AMC as an Investment Manager of
HDFC Mutual Fund, had launched HDFC Cancer Cure Fund (2011) and
upon maturity of the same, launched another HDFC Cancer Cure Fund
2014 (Scheme), a 3 year closed-ended Capital Protection Oriented

Income Scheme, where the dividend received by the Investors from the
Schemes is donated to Indian Cancer Society (ISC) on behalf of the
Investors to Indian Cancer Cure Fund Project.
Indian Cancer Cure Fund Project falls under sub-clause (1) of Schedule VII
- Promotion of health care. HDFC AMC has agreed to contribute Rs.
5,00,00,000/- per annum for 3 years effective FY 2014-2015. In addition,
dividend received under the Scheme for the investment made by HDFC
AMC till the maturity of the Scheme i.e. 3 years effective FY 2014-2015.
CONSTRUCTION PROJECT OF SUPER SPECIALTY CHILDRENS
HOSPITAL -SRCC CHILDRENS HOSPITAL
Society for Rehabilitation of Crippled Childrens Hospital (SRCC) is a not
for profit organization with the objective of making a difference to child
healthcare in India. SRCC and Narayana Hrudayalaya have joined hands
to build a world class Multi Specialty Childrens Hospital in Mumbai which
will have 10% beds free for treatment of children from poor family and
60% beds at subsidized rates for treatment of children from under
privileged and middle class families.
HDFC AMC has partnered with SRCC under its CSR initiatives to enable
SRCC to build and set up a super-specialty childrens hospital to be called
SRCC Childrens Hospital. The Hospital will be constructed with
contributions received from various corporate including HDFCAMC.
HDFC AMC has agreed to donate an amount of Rs. 2.50crore for 2 years
for meeting a part of construction cost of Phase I of the hospital. The
payment made by the AMC is covered under sub-clause (1) of Schedule
VII - Promotion of health care.

OLYMPIC GOLD QUEST (OGQ) JUNIOR SCHOLARSHIP PROGRAM

Olympic Gold Quest (OGQ), Foundation for Promotion of Games and


Sports has an objective to bridge the gap between the best athletes in
India and the best athletes in the world thus helping Indian athletes to
win Olympic Gold medals. OGQ aims to create a level playing field for
Indian athletes to enable them to be competitive at the highest level of
sport.
The AMC has agreed to partner with OGQ by participating in the school
scholarship program launched by Foundation for Promotion of Sports and
Games under Olympic Gold Quest (OGQ) for selecting 50 athletes to be
trained for Olympics 2016. OGQ has an aim that 10 athletes supported by
it should win medals for India at the Rio 2016 Olympics. Olympic Gold
Quest (OGQ) Junior Scholarship Program falls under the purview of subclause (vii) of Schedule VII - Training for Olympic sports.
An amount of Rs.50 lac contributed to OGQ is being utilized for providing
best trainers to the selected athletes under the scholarship program,
meeting expenses for purchasing sport related accessories, participation
in tournaments and also monthly stipend for nutrition, training and other
training requirements.

BOMBAY SCOTTISH ORPHANAGE SOCIETY SCHOOL, POWAI,


MUMBAI - SETTING /UPGRADING LABORATORIES
Bombay Scottish Orphanage Society is a Trust which constantly
endeavours to promote education, expand its educational horizons and
provide a platform of excellence to its students to enable them to make
their mark in the fields selected by them. It aims in providing world class
education to children from all strata of society.
HDFC AMC has made a contribution of Rs. 25lac to Bombay Scottish
Orphanage Society for setting up/upgrading laboratories at their School
in Powai, Mumbai. The contribution made falls under sub-clause (ii) of
Schedule VII - Pr1omotion of education.

RAY OF LIGHT FOUNDATION PROGRAM

Ray of Light Foundation, a charitable organization based out of Chennai


dedicated in providing services and financial assistance to cancer
affected poor children and children from the lower socio economical
group. In order to give these cancer affected children the best chance of
survival, the Foundation has joined hands with Kanchi KamaKoti CHILDS
Trust Hospital (KKCTH) which provides treatment to the cancer affected
children in their hospital. The Foundation has aided 83 children with their
medical treatment and has many more children who re quire urgent
medical assistances.
HDFC AMC has partnered with Ray of Light foundation for providing
medical assistance to 4 cancer affected children as they are in urgent
need of medical treatment. The

contribution of Rs.20lac made by the

AMC is covered under sub-clause (1) of Schedule VII - Promotion of health


care.

ANALYSIS

&
INTERPRETATION
OF DATA

TABLE1:
AGEWISECLASSIFICATIONOFRESPONDENTS
AGE

NO.OFRESPONDENTS

PERCENTAGE

BELOW20
2029
3039
4049
5059
ABOVE60
TOTAL

NIL
69
13
34
35
49
200

NIL
34.5
6.5
17
17.5
24.5
100

AGE WISE NO. OF RESPONDENTS

4 9

69

20-29
30-39
40-49
50-59

35
34

13

ABOVE 60

Interpretation:
Accordingtothesurveytherespondentswereofdifferentagegroups.Thereare
norespondentsofagebelow20areinnonumber.Theinvestorsofage2029are69in
numberwith34.5%.Theinvestorsofage3039are13with6.5%,4049thereare34
investorswith17%andinbetween5059thereare35investorswith17.5%andabove60
thereare49investorswith24.5%.

TABLE2:
GENDEROFTHERESPONDENTS
GENDER

NO.OFRESPONDENTS

PERCENTAGE

MALE
FEMALE
TOTAL

158
42
200

79
21
100

/
ONDENTOFRESP

PE RCENTAGE

GENDER OF THE RESPONDENTS


180
40
160
140

NO.

120
100
80
60
20
0

NO. OF
RESPONDENTS
PERCENTAGE

MALE

FEMALE
GENDER

Interpretation:
Inthesurveynumberofrespondentaremalemoreinnumberthatisabout79%&the
nextpositionhasbeenoccupiedbyfemalerespondentstheyareabout21%ofthe
sampleso,mainlymenarepreferringtogoforinvestments.

TABLE3:
OCCUPATIONOFTHERESPONDENTS
OCCUPATION
HOUSEHOLD
BUSINESS
SERVICE
PROFESSIONAL
RETIRED
STUDENT
TOTAL

NO.OFRESPONDENTS
9
46
84
30
15
16
200

PERCENTAGE
4.5
23
42
15
7.5
8
100

OCCUPATION OF THE RESPONDENTS

15

16

HOUSE HOLD
46

30

84

BUSINESS
SERVICE
PROFESSIONAL
RETIRED
STUDENT

Interpretation:
Accordingtothesurveytherespondentswereofdifferentoccupations.Mostof
respondentsarefromservicesectorisabout42%ofthesample.Respondentsfromthe
businessareoccupying23%,thencomesprofessionalwith15%,studentsoccupy8%,
retiredpeopleoccupy7.5%,withhouseholdoccupying4.5%.

TABLE4:
ANNUALINCOMEOFTHERESPONDENTS
ANNUAL

NO.OFRESPONDENTS

PERCENTAGE

<1,00,000
12LAKHS
23LAKHS
ABOVE3LAKHS
TOTAL

53
84
48
15
200

26.5
42
24
7.5
100

NO. OF RESPONDENTS /
PERCENTAGE

ANNUAL INCOME OF THE RESPONDENTS

90
80
70
60
50
40
30
20
10
0

NO. OF
RESPONDENTS
PERCENTAGE

<

1,0

0,

00

LAK

LAK

2
1

H
L

3
2

HS

VE
AB

ANNUAL INCOME

Interpretation:
Accordingtothesurvey,therespondentsoftheincomegroupoflessthan1lackare
of26.5%.Theywereabout42%oftherespondentsareoftheincomegroupbetween12
lack.24%oftherespondentswereoftheincomegroup23lacks.7.5%respondentswere
oftheincomegroupmorethan3lacks.

TABLE5:
DOTHERESPONDENTSINVESTTHEIRMONEY
INVESTMENTS

NO.OFRESPONDENTS

PERCENTAGE

YES
NO
TOTAL

200
NIL
200

100
NIL
100

NO. OF RESPONDENTS
PERCENTAGE

RESPONDENTS INVESTING THEIR MONEY

250
200
150

NO. OF
RESPONDENTS

100

PERCENTAGE

50
0

YES

NO

INVESTMENTS

Interpretation:

Alltherespondentsconsideredinthesample,doinvesttheirsavings.

Out of the total sample the respondents going for


investments are total in numbers with all the two hundred
respondents considered in sample are going for complete
investments with 100%.

TABLE6:
THEAMOUNTTHERESPONDENTSSAVEYEARLY
AMOUNT

NO.OFRESPONDENTS

PERCENTAGE

<25,000
<50,000
<1,00,000
>1,00,000
TOTAL

106
54
24
16
200

53
27
12
8
100

OFRESPONDENTS

THE AMOUNT THE RESPONDENTS SAVE YEARLY


120
100
80

NO. OF
RESPONDENTS

60
40
20
0

PERCENTAGE

< 25,000

< 50,000

<

1,00,000

AMOUNT

>

1,00,000

Interpretation:
Accordingtothesurvey,therespondentswhosave<25,000yearlyisabout53%,
<50,000isabout27%&theindividualswhosavelessthan1,00,000are12%,followed
byindividualswhosavemorethan1,00,000is8%.

TABLE7:
INVESTORSPREFERENCEFORVARIOUSINVESTMENT
OBJECIVES
OPTIONS

RANK
1
2
4
5
3

SECURITY
YEILD
MATURITY
TAXBENEFITS
LIQUIDITY

SCORE
55
47
35
22
40

INVESTMENT OBJECTIVE OF THE INVESTOR

LIQUIDITY
20%

SECURITY
7%
YEILD
13%

SECURITY
YEILD
MATURITY
TAX BENEFITS

MATURITY
27%

TAX BENEFITS
33%

LIQUIDITY

Interpretation:
Differenttypesofinvestorslookforwardtodifferentinvestmentobjectives.Mostof
st

nd

rd

theinvestorsranked1 tosecurity,2 ranktoyield,3 rankhasbeengiventoliquidity,4

&5thranksformaturity&taxbenefits.

th

TABLE8:
INVESTMENTOPPURTUNITIESUSUALLY
PREFEREDBYRESPONDENTS
OPTIONS
BANKDEPOSITS
SHARES
BONDS/DEBENTURES
MUTUALFUNDS
INSURANCE
REALESTATE
TOTAL

NO.OFRESPONDENTS
68
32
31
30
26
13
200

PERCENTAGE
33
16
16
15
13
7
100

INVESTMENT AVENUES OPTED BY RESPONDENTS

13%

7%
33%

BANK DEPOSITS
SHARE
BONDS / DEBUNTRES

MUTUAL FUNDS

15%
16%

16%

INSURANCE
REAL ESTATE

Interpretation:Itisobservedfromtheabovechartthat33%oftheindividualsprefer
tobankdeposits,16%oftheindividualsprefertoshares,respondentspreferringbondsare
16%ofwithrespondentspreferringmutualfundsare15%,followedbyinsuranceandreal
estatewith13%and7%.

TABLE9:
AWARENESSOFMUTUALFUNDS
OPTIONS
YES
NO
TOTAL

NO.OFRESPONDENTS
124
76
200

PERCENTAGE
62
38
100

NO. OF RESPONDENTS /
PERCENTAGE

AWARENESS OF MUTUAL FUNDS


140
120
100

NO. OF RESPONDENTS

80

PERCENTAGE

60
40
20
0
YES

NO

AWARENESS

Interpretation:
Accordingtothesurvey,mostinvestorsareawareofmutualfunds.Itcanbe
observedfromtheabovetablethat62%ofrespondentsareawareofMutualFunds
andtherestarenotawareofMutualFunds.

TABLE10:
AWARENESSOFMUTUALFUNDSISTHROUGH

OPTION
ADVERTISEMENT
FRIENDS
FAMILYMEMBERS
FINANCIALADVISORS
RELATIVES
TOTAL

NO.OFRESPONDENTS
52
37
19
66
26
200

PERCENTAGE
26
19
10
32
13
100

INFLUENCE OF INVESTMENT DECISION IS


THROUGH

ADVERTISEME
NT
26%

RELATIVES
13%
FINANCIAL
ADVISORS
32%

FAMILY
MEMBERS
10%

FRIENDS
19%

ADVERTISEMENT
FRIENDS
FAMILY MEMBERS
FINANCIAL ADVISORS
RELATIVES

Interpretation:
Accordingtothesurvey,therespondentsaremoreawareofmutualfunds
throughFinancialAdvisorswhooccupy32%,followedbyAdvertisements26%,Friends
19%,Relatives13%&FamilyMembers10%

TABLE11:
MUTUALFUNDISAGOODINVESTMENTOPTION.
OPTIONS
YES
NO
TOTAL

NO.OFRESPONDENTS
159
41
200

PERCENTAGE
79.5
20.5
100

/
ONDENTOFRESP

PE RCENTAGE

MUTUAL FUND IS A GOOD INVESTMENT OPTION


180
40
160
140

NO.

120
100
80
60
20
0

NO. OF
RESPONDENTS
PERCENTAGE

YES

NO
OPTIONS

Interpretation:
Manyoftheindividualsareoftheviewthatmutualfundisagoodinvestment
option.Ofthetotalsamplesurveyaround79.5%oftherespondentsfeelthatmutualfund
isagoodinvestmentoption&20.5%oftherespondentsfeelthatitisnotagood
investmentoption.

TABLE12:
RESPONDENTSPREFFERINGHDFCASADISTRIBUTOROF
MUTUALFUNDS

OPTION
HDFC
OTHERS
TOTAL

NO.OFRESPONDENTS
138
62
200

PERCENTAGE
69
31
100

NO.

PERCENTAGE

OFRESPONDENTS

HDFC AS A DISTRIBUTOR OF
MUTUAL FUNDS
160
140
120
100
80
60
40
20
0

NO. OF
RESPONDENTS
PERCENTAGE

HDFC

OTHERS

OPTIONS

Interpretation:
Accordingtothesurvey,69%oftherespondentsareawareofHDFCasa
distributorofmutualfunds&these69%oftheinvestorswouldliketoinvestinHDFC
mutualfundoption.Therest31%oftherespondentswouldliketopreferothers.

TABLE13:
TYPEOFFUNDSRESPONDENTSPREFERTO
OPTION
DEBTFUND
EQUITYFUND
HYBRIDFUND
TOTAL

NO.OFRESPONDENTS
42
78
18
138

PERCENTAGE
30.5
56.5
13
100

TYPE OF FUNDS RESPONDENTS PREFER TO

NO.

PERCENTAGE

OFRESPONDENTS

90
80
70
60
50
40
30
20
10
0

NO. OF
RESPONDENTS
PERCENTAGE

DEBT FUND EQUITY FUND

HYBRID
FUND

OPTIONS

Interpretation:
FromthesurveyconductedtherespondentspreferEquityfundsmoreinnumber
theyoccupy56.5%,followedbyDebtfundswith30.5%andaveryfewrespondents
prefertohybridfundswith13%.

TABLE14:
TYPEOFSCHEMEPREFEREDBYRESPONDENTINDEBTFUNDS

OPTION
FLOATINGRATE
GILTFUND
DYNAMICFUND
CASHMANAGEMENT
TOTAL

NO.OFRESPONDENTS
14
27
41
68
150

PERCENTAGE
9.33
18
27.33
45.33
100

TYPES OF SCHEME PREFERED BY RESPONDENT IN DEBT FUNDS


9.33
45.33
FLOATING RATE GILT FUND

18
DYNAMIC FUND

CASH MANAGEMENT

27.33

Interpretation:
Basedonthesurvey,itisfoundthattherespondentspreferCASH
MANAGEMENTfundwhichoccupies45.33%,thenfollowsistheDYNAMICFUND
with27.33%,thirdlyGILTFUNDisseenwithmorepercentagewith18,followedby
FloatingRateFundwith9.33%.

TABLE15:
TYPEOFSCHEMEPREFEREDINEQUITYFUNDS
OPTION

NO. OF RESPONDENTS

PERCENTAGE

LARGE CAP
MID CAP
SMALL & MID CAP
TAX SAVER
TOTAL

12
21
15
27
75

16
28
20
36
100

TYPESOFSCHEMEPREFEREDINEQUITYFUNDS

16%
36%
LARGE CAP

MID CAP

SMALL&MID CAPE
28%

TAX SAVER

20%

Interpretation:
Basedonthesurvey,thatoutof75samplesize,mostoftheinvestorschoose
TAXSAVERwith36%,followedbyMIDCAPwith33%,thenSMALL&MIDCAP
with20%,LARGECAPwith16%

TABLE16:
TYPEOFSCHEMEPREFERREDINHYBRIDFUND

OPTION

NO.OFRESPONDENTS

MIPI
MIPII
TOTAL

8
11
18

PERCENTAGE
44.4
61.1
100

TYPE OF SCHEME PREFERRED IN HYBRID


FUND

70
60
50
40
NO. OF RESPONDANT
30

PERENTAGE

20
10
0
MIP I

MIP II

Basedonthesurvey,itisfoundthattherespondentsprefertochooseMIPIIwith
61.1%ofsample,followedbyMIPIschemesintheHybridFundTypewith44.4%.

TABLE17:

RESPONDENTSPREFFERINGOTHERBRANDSOFMUTUAL
FUNDS
OPTION
BIRLASUNLIFE
RELIANCE
HSBC
KOTAKMAHINDRA
DSPMERYLLICH
UTI
TOTAL

NO.OFRESPONDENTS
12
18
6
11
5
10
62

PERCENTAGE
19
29
10
18
8
16
100

RESPONDENTS PREFFERING OTHER BRANDS


OF MUTUAL FUNDS
BIRLA SUN LIFE

16%

RELIANCE

19%

HSBC

8%

KOTAK MAHINDRA

18%
10%

29%

DSP MERYILCH
UTI

Interpretation:
Basedonthesurvey,itisfoundthattherespondentswoulddefinitelyprefer
otherbrandsofMutualFundswithFranklinTempletonintheleadwith29%,then
HDFCwith18%,UTIinthefourthplacewith16%,KotakMahindrawith18%,HSBC
with10%&DSPmerllichwith8%

TABLE18:
REASONSFORTHEPREFERENCEOFPRESENTBRANDOF
MUTUALFUND

OPTION
NFO
PERFORMANCE
DIVERSIFICATION
INVESTMENTSTRATEGY
FUNDMANAGER
TOTAL

NO.OFRESPONDENTS
7
9
12
20
14
62

PERCENTAGE
11
15
19
32
23
100

REASONS FOR THE PREFRENCE OF PRESENT


BRAND OF MUTUAL FUND
IPO
23%

11%
15%

PERFORMANCE
DIVERSIFICATION

32%

19%

INVESTMENT
STRATEGY
FUND MANAGER

Interpretation:
TherespondentsPreferredthepresentbrandsofMutualFundbecauseofthe
investmentstrategywhichoccupies32%,thencomesFundManagerwith23%,
Diversificationwith19%,performance&IPOwith15%,11%respectively.

TABLE19:
OPINIONABOUTHDFCMUTUALFUND

OPTION
BETTROPTION
NOTABETTEROPTION
CANTSAY
TOTAL

NO.OFRESPONDENTS
122
16
62
200

PERCENTAGE
61
8
31
100

/
SOFRESPONDENT

PERCENTAGE

OPINION ABOUT HDFC MUTUAL


FUND
140
120
100
80
60
40
20
0

NO. OF
RESPONDENTS
PERCENTAGE

BETTER
OPTION

NOT A
BETTER
OPTION

CAN'T SAY

OPTION

Interpretation:
Accordingtothesurvey,therespondentsaremostlyoftheopinionthatinvestingin
HDFCMutualfundsisaBetteroptionasitoccupies61%,afewrespondentsareofno
opinionwith31%,&therestfeelthatitisnotabetteroptionwithonly8%ofthetotal.

TABLE20:
RESPONDENTRECOMMENDINGHDFCMUTUALFUND
ASABETTERINVESTMENTOPPURTUNITY

OPTIONS
YES
NO
TOTAL

NO.OFRESPONDENTS
156
44
200

PERCENTAGE
78
22
100

PE RCENTAGE

ONDENTOFRESP

IS HDFC A BETTER INVESTMENT


180
160
140
120
100
80
60
20
0

NO. OF
RESPONDENTS
PERCENTAGE

YES

NO
OPTIONS

Interpretation:
AccordingtothesurveytherespondentsrecommendingHDFCMutual
Fundasabetterinvestmentopportunityisof78%.&therespondentswhodo
notrecommendHDFCasabetterinvestmentopportunityare22%.

FINDINGS
&
SUGGESTIONS

Findings

Themajorityofrespondentswereoftheagegroupof2960.
Majorpartoftherespondentbelongstoservicesector.
Annualincomeoftherespondentis12lacprefermoreofinvestments.
Respondents irrespective of major investment or small are investing in
someorothersourcesofinvestments.
Investorspreferencewhengoingforaninvestmentinprimarilyforsecurity.
RespondentspreferBankDepositsasmostsecuredavenueforinvestment,&
thenpreferenceis giventoshares,Bonds/Debentures &thentoMutual
Funds.
TheroleofFinancialAdvisorsplayakeyroleinmakinginvestorseducated
aboutmutualfund.Around33%oftherespondentschoosefinancialadvisors
forguidance.
FromtheSurveyconducteditisclearthat80%oftherespondentsfeelthat
Mutualfundisagoodinvestmentoption.
69%oftherespondentsareawareofHDFCasadistributorforMutual
Funds.
Outoftotalrespondents,manyofthempreferthecurrentbrandofmutual
fundbecauseofinvestmentstrategy.
FromthesurveyitisclearthatmostoftherespondentsfeelHDFCasa
betteroptionformutualfund.
78%oftheRespondentsarerecommendingHDFCasabetterinvestment
opportunity.

Suggestions
In HDFC Mutual Funds there is still lot of paper work in this digital world so it is
important to them to go green.
Mutual funds can offer online to the investors through the stock exchange.
HDFC Mutual Funds should launch new and innovative scheme at regular intervals
to attract customers.
HDFC Mutual Funds should organized more motivational events for their
employees.

BIBLIOGRAPHY

REFERENCES

Books:
Booklet of NISM-SERIES-V-A (2013)

Website:
www.hdfcfund.com
www.amfiindia.com
www.moneycontrol.com

ANNEXURE

KEYSTEPSFORFINANCIALPLANNING
INSUREYOURSELFBEFOREYOUINVEST
Insuranceistheprerequisiteofallinvestmentsthemainpurposeofinsuranceisto
protectyourcurrentlifestyleafterretirement.Itactsasashieldagainstalltypeoffinancial

risks.Investorhastorealizethatinsuranceismoreforsafeguardingagainstriskfacedin
liferatherthanbeinganinvestmentforprofit.

CHOOSESIMPLEINVESTMENT
Ourdailylifeisfullofcomplications thedaytodaygrindleavesuswithlittle
energytokeeptrackofourfinancialinvestments.Thatiscopyaninvestorshouldchoose
simple & uncomplicated instruments. Therefore he has to invest the hassle free
instruments.

UTILIZETHEPOWEROFCOMPOUNDING
Compounding means payment of interest on accumulated interest. Thus money
earnedbyyouworkshard&earnsmoremoneyforyou.Thisimpliesthatnotonlythe
principal earns income for you but interest generated by you also earns income. One
importantfactoristhetimeperiod.Longerthetimehigherthebenefit
INVESTININTRUMENTSTHATKEEPYOUAHEADOFINFLATION
Thatsilentlycreepsupfrombehind&startseatingyourhardearnedsavingseven
beforeyourealizethesituation.Aninvestorshouldlookattherealreturn(therateofreturn
minus the rate of inflation) while considering an investment. He should invest in
instruments,whichprovideprofitablepostinflationreturns.

REDUCETAXONYOURINVESTMENT
Therearetworealitiesinthelife.Oneisdeath&theotheristax.Itisadvisablethat
investmentsshouldbesoplannedthatleastpossibletaxwouldberequiredtobepaid.Smart
movefortheinvestoristosaveeveryrupeefromtaxman.

GOFORSTABLE&REALISTICRETURNS
Stabilityofreturnsismoreimportantthatincreasedprofit.Usuallytheseareassociated
withhighvolatileinvestmentoptionslikeequities&evenwithgovernmentsecuritiesorgiltsas
theyalsorunhighmarketrisk.Theassetallocationissuggestedaccordingtotheriskprofileof
aninvestor.Soinvestinthebestoption&getthemaximumreturns.

Identification Data:
1.Name of the respondent
2.Age
Below 20
40-90

:
:

20-29
50-59

30-39
Above 60

3.Sex

Male
Female
4.Address with phone number
Telephone no.:
5.Occupation
Household
Professional
6.Annual Income
< One Lac
2-3 Lac

Email ID:
Business
Retired

:
Service
Student
:

1-2 Lac
Above 3 Lac

Investment Preference:
1.Do you invest any part of your savings?

Yes
No
If Yes
2. What amount do you save yearly?
< 25,000
< 50,000
< 1,00,000
> 1,00,000
If Yes
3. What criteria you keep in your mind while selecting
an investment opportunity (rank them accordingly)?
Security
Yield
Maturity
Tax benefits
Liquidity
4. Normally what investment opportunity you prefer to
invest your savings?
Bank
Shares
Deposits
Mutual
Insurance
Funds
If Mutual Funds
5.Do you know about Mutual Funds?

Bonds/Debentu
res
Real Estate

Yes
No
If yes
6. How did you come to know these brands of Mutual
Funds?
Advertisement

Friends

Financial
Advisor

Relatives

Family
Members
Banks

7. Have you ever invested any amount in Mutual Funds?

Yes
No
If Yes
8. In which Mutual Fund did you invest?
HDFC Mutual Funds
Others
If HDFC Mutual Funds
9. What types of funds you prefer?
Debt Fund
Equity Fund
Hybrid Fund
If Debt Funds
10.
Which type of scheme do you prefer?
Floating Rate
Fund

Cash
Management
Fund

Dynamic Fund

Gilt fund

If Equity Funds
11.
Which type of scheme do you prefer?
Large
Fund

cap

Mid-cap
opportunity
Fund
Balanced
Fund

Small-Midcap
Fund

Tax
saver
Top 200 Fund
Fund
If Hybrid Funds
12.
Which type of scheme do you prefer?
MIP I

MIP II

If Others
13.

Which Mutual Funds do you prefer?