“COMPARATIVE STUDY OF MUTUAL FUNDS OF ICICI

& HDFC”

A Project submitted to
University of Mumbai for partial completion of the degree
of
Bachelor of Commerce in Banking and Insurance
Under the Faculty of Commerce

By
Mr. Pravesh Amarbahadur Singh

Under the Guidance of

Ms. Hemsweta Jain

SHETH T. J. EDUCATION SOCIETY’S,

SHETH N.K.T.T. COLLEGE OF COMMERCE &

SHETH J.T.T. COLLEGE OF ARTS, KHARKAR ALI,
THANE (W)
April 2020
 Sheth T.J. Education Society’s,
SHETH N.K.T.T. COLLEGE OF COMMERCE &
SHETH J.T.T. COLLEGE OF ARTS,
THANE (W)

CERTIFICATE
OF
PROJECT WORK

This is to certify that, Mr. Parvesh Amarbahadur Singh, T.Y. B.B.I / B.Com
(Banking and Insurance), Semester-VI Seat No: has
undertaken & completed the project titled “COMPARATIVE STUDY OF
MUTUAL FUNDS OF ICICI & HDFC” during the academic year 2019-20
under the guidance of Asst. Prof. Ms. Hemsweta Jain Submitted of 2020 to this
college in fulfilment of the curriculum of BACHELOR OF MANAGEMENT
STUDIES / BACHLOR OF BANKING AND INSURANCE, UNIVERSITY
OF MUMBAI.

This is a bonafide project work & the information presented is true &
original to the best of our knowledge & belief.

PROJECT GUIDE EXTERNAL

EXAMINER

COORDINATOR PRINCIPAL
 DECLARATION

I the under signed Mrs. Parvesh Amarbahadur Singh here by, declare
that the work embodied in this project work titled “COMPARATIVE
STUDY OF MUTUAL FUNDS OF ICICI & HDFC” forms my own
contribution to the research work carried out under the guidance of
ASST.PROF. Hemsweta Jain is a result of my own research work and
has not been previously submitted to any other University for any other
Degree/Diploma to this or any university.
Wherever reference to have been made to previous work of other, it
has been clearly indicated as such and included in the bibliography.
I, here by further declare that all information of this document has been
obtained and presented in the accordance with academic rules and
ethical conduct.

Mr. Parvesh Amarbahadur Singh

Certified by

ASST. PROF. Ms. Hemsweta Jain

 Acknowledgment

I would like to extend my heartfelt thanks to all who have helped me for
completion of this project. A simple thank you would be insufficient
because they are so numerous and the depth is so enormous.
I would like to acknowledge the following as being idealistic channels and
fresh dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me
chance to do this project.
I would like to thank my Principal, Dr. Dilip Patil for providing the
necessary facilities required for completion of this project.
I take this opportunity to thank our SFC Coordinator, Asst. Prof. Dr.
Yogeshwari Patil for her moral support and guidance.
I would also like to express my sincere gratitude towards my project guide
Asst. Prof. Ms. Hemsweta Jain under whose guidance and care made the
project successful.
I would like to thank my College Library, for having provided various
reference books and magazines related to my project.
Lastly, I would like to thank each and every person who directly or
indirectly helped me in the completion of the project especially my Parents
and Peers who supported me throughout my project.

Mr. Parvesh Amarbahadur Singh

 INDEX

SR NO. TITLE PAGE NO.

CHAPTER 1: - INTRODUCATION
1.1 Concept of mutual fund. 2
1.2 Definition 2
1.3 Advantage of mutual funds 3-4
1.4 Limitation of mutual funds 5
1.5 History of mutual funds. 6-7
1.6 Types of mutual fund schemes 8-13
1.7 Why select mutual funds. 14
1.8 Net Asset Value. 15
1.9 Mutual fund fees & expenses. 16
1.10 Selection parameters of mutual funds 17
1.11 Loads 18
1.12 Types of return on mutual funds. 19
1.13 Risk factor of mutual funds. 20-21
1.14 Structure of mutual funds. 22-23
1.15 The Assets Management Company. 24-25
1.16 Regulatory structure of mutual fund in India. 26
1.17 Association of mutual funds in Indian (AMFI). 27
1.18 Mutual fund companies in India 28-29

CHAPTER 2: - RESEARCH METHODOLOGY

2.1 Objectives. 30
2.2 Hypothesis 30
2.3 Scope of the study 31
2.5 Limitation of the study 31
2.6 Need of the study 31
2.7 Sampling technique 32
2.8 Sample size 32
2.9 Data collection 32
2.10 Tools 32

CHAPTER 3: - REVIEW OF LITERATURE 33-44

 CHAPTER 4: - COMPANY PROFILE
4.1 ICICI Mutual fund. 45-54
4.2 HDFC Mutual fund. 55-71
CHAPTER 5: - DATA ANALYSIS, 72-85
INTERPRETATION & PRESENTATION
CHAPTER 6: - FINDING, SUGGESTION &
CONCLUSION

6.1 86
Finding
6.2 87
Suggestion
6.3 88
Conclusion

BIBLIOGRAPHY 89-92
APPENDIX 93-94

Questionnaires
 CONTENTS

Sr no Topic Page no
1 INTRODUCTON 1-29

2 REASERCH METHODOLOGY 30-34

3 REVIEW OF LITERATURE 35-46

4 COMPANY PROFILE 47-73

5 DATA ANALYSIS, INTERPRETATION & 74-87

PRESENTATION
6 FINDINGS, SUGGESTION & CONCLUSION 88

BIBLIOGRAPHY

APPENDIX
 LIST OF TABLES & CHART: -

TABLE NO. NAME PAGE NO.

5.1 Annual income. 73
5.2 Different investment selected by respondents. 74
5.3 Risk profile. 75
5.4 Awareness about mutual fund its operations. 76
5.5 Do you invest in mutual funds 77
5.6 Reasons for not investing in mutual funds 78
5.7 With which company’s mutual fund have you 79
invested in

5.8 To choose which company the respondent would 80

invest in

5.9 Time duration of your invested 81

5.10 Feedback about company’s norms, documentation 82
and formularies

5.11 Better return between the Companies 83

5.12 Satisfied with the return of mutual fund 84

5.13 85
Chance to shift to any other mutual fund
 CHAPTER:1
INTRODUCATION

1.1 Concept of mutual fund.

1.2 Definition
1.3 Advantage of mutual funds
1.4 Limitation of mutual funds
1.5 History of mutual funds.
1.6 Types of mutual fund schemes
1.7 Why select mutual funds.
1.8 Net Asset Value.
1.9 Mutual fund fees & expenses.
1.10 Selection parameters of mutual funds
1.11 Loads
1.12 Types of return on mutual funds.
1.13 Risk factor of mutual funds.
1.14 Structure of mutual funds.
1.15 The Assets Management Company.
1.16 Regulatory structure of mutual fund in India.
1.17 Association of mutual funds in Indian (AMFI).
1.18 Mutual fund companies in India
There is a lot of opportunity for an investor to invest in financial m a r k e t with an
investable surplus. There are various investment opportunities such as Bank its,
corporate debenture, and Bonds where there are low risks involved b u t m e a n
while ret urns are also low. Simultaneously he can opt for stock of companies
where ret urns and risks on i nvestment both are very high. The recent trends i n the
stock market shows a result that an average retail investor always lost with
periodic bearish tends. So, by such tends people starts opting for portfolio managers
with i n stock markets who invest on their behalf. Thus, we had wealth
management serv ices provided by many institutions. However, they proved too
costly for a small investor. Therefore, these investors have found a good shelter
with the mutual funds.
1.1 CONCEPT OF MUTUAL FUND:

A mutual fund is a common pool of money were i nvestors plays an

important role in contributing the investment according to stated objective. The
ownership of the fund may be joint or mutual belongs to all the investors. A single
investor ‘s ownership of the fund is the same proportion as the amount of the
contributions made by him or her bears to the total amount of the fund. Mutual
funds are trusts, which accept savings from investors and invest the same in
d iversified financial instruments in terms of objectives set out in the trusts deed with
the view to reduce the risk and maximize the income and capital appreciations for
d istributions for the members. A mutual fund is a corporation and the fund manager
‘s interest is to professionally manage the funds provided by the investors and
provide a return on them after deducting reasonable management fees.

2.1 DEFINITIONS:

“A mutual fund is an investment that pools your money with the money of an
unlimited number of other investors. In ret urn, you and other investors each own
shares of the fund. The Fund ‘s assets are invested according to an i nv es tm en t
objective i n t o the fund’s portfolio of investments. Aggressive growth fund seeks
long term capital growth by investing primarily in stock of fast-growing smaller
companies or market segments. Aggressive growth funds are also called capital
appreciation funds”.
 1.3 ADVANTAGES OF MUTUAL FUNDS:

If mutual funds are emerging as the favourite investment vehicle, it

is because of the many advantages they have over other forms and the avenues
of investing, particularly for the investor who has limited resources available in
terms of capital the ability to carry out detailed research and market monitoring.
The following are the major advantages offered by mutual funds to all investor.

1. Portfolio Diversifications:
Each investor in the fund is a part of all the fund’s assets, thus enabling
him to hold a diversified investment portfolio even with a small amount of
investment that would otherwise require big capital.

2. Professional Management:
Even if an investor has a big amount of capital available to him, he benefits
from the professional management skills brought in by the fund i n the
management of the investor’s portfolio. Few investors have the skills and
resources of their own to succeed in today’ s fast moving, global and
sophisticated markets.

3. Red uction/Diversifications of Risk:

When an investor invests directly, all the risks of potential loss in his
own, whether he places a deposit with a company or a bank, or he buys a share or
debenture on his own or i n any other form. While investi ng in the pool of funds
with investors, the potential losses are also shared with other investors. The risk
reduction is one of the most important benefits of a collect ive investment vehicle
like the mutual fund.

4. Reduction of Transaction Costs:

What is true of risk as also true of the transaction costs. The investor
bears all the costs of investing such as brokerage or custody of securities. When
going through a fund, he has the benefit of economies of scale; the funds pay
lesser costs because of larger vo’1mes, a benefit passed on to its investors.

5. Liquidity:

Often, investors hold shares or bonds they cannot directly, easily

and quickly sell. When they invest in the units of a fund, they can generally
cash their investments any time, by selling their units to the fund if open-
ended, or selling them in the market if the fund is close-end. Liquidity of
investment is clearly a big benefit.

6. Convenience and Flexibility:

 Mutual fund management companies offer many investor services
that a direct market investor cannot get. Investors can easily transfer t heir
holding from one scheme to the other, get u pdated market information and so
on.

7. Tax Benefits:
Any income d istributed after March 31, 2002 will be subject to tax in the
assessment of all unit holders. However, as a measure of concession to unit
holders of open-ended equity-oriented funds, income distributions for the year
end ing March 31, 2003, will be taxed at a concessional rate of 10.5%.

I n case of individuals and Hindu Undivided Families a deduct ion up to

Rs.9,000 from the Total Income will be admissible in respect of income from
investments specified in sect ion 80L, including income from units of the mutual
fund. Units of the schemes are not subject to wealth-tax and G ift-Tax.

8. Choice of schemes:
Mutual Funds offer a family of scheme to suit your varying needs over
lifetime.

9. Well Regulated:
All Mutual Funds are registered with SEBI and they function within
the provisions of strict regulations designed to protect the interests of investors.
The operations of Mutua! Funds are regularly monitored by SEBI.
1.4 LIMITATION OF INVESTING THROUGH MUTUAL FUNDS:

1. No Control Over Costs

An Investor in a mutual fund has no control of the overall costs of

investing. The investor pays investment management fees as long as he remains
with the fund, albeit in return for the professional management and research.
Fees are payable even if the value of his investment is declining.

2. No Tailor-Made Portfolio:
Investors who invest on their own can build their own portfolio of shares
and bonds and other securities, investing through fund means he delegates this
decision to the fund manager. The very high net worth individuals or large
corporate investors may find this to be a constraint in achieving their objectives.

3. Managing A Portfolio of Funds:

Availability of a large number of fund’s can actually mean too much choice
for the investor. He may again need adv ice on how to select a fund to achieve
on how to select a fund to achieve his objectives quite similar to the situation
when he has individual shares or bonds to select.

4. The Wisdom of Professional management:

That’s right, this is not an advantage. The average mutual manager is no better at
picking stocks than the average nonprofessional, but charges fees.

5. No Control:
Unlike picking your own individual stocks, mutual fund puts you in the
passenger seat of somebody else’s car.

6. Dilution:
Mutual funds generally have such small holdings of so many different stocks
that insanely great performance by a fund ‘s top holdings still doesn ’t make of a
d ifference in a mutual fund ‘s total performance.

7. Buried Costs:

Many mutual funds specialize in buying their costs and in hiring salesman who
do not make those costs clear to their clients.
1.5HISTORY OF MUTUAL FUNDS IN INDIA:

The mutual fund industry in India started in 1963 with the formation of unit trust
of India, at the initiative of the government of India and Reserve Bank. The history of
mutual funds in India can be broadly divided into distinct phases.

FIRST PHASE-1964-84:

Unit Trust of India (UTI) was established on 1963 by an act of parliament. It was
set up by the reserve bank of India and functioned u nder th e R e g u l a t o r y and
administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the
RBI and the industrial Development bank of India (IDBI) took over the regulatory and
administrative control in place of RBI. The first scheme launched by UTI was unit
scheme 1964. At the end of 1988 UTI had Rs.6, 700 crores of assets u nder management.

SECOND PHASE-1987-1993 (ENTRY OF PUBLIC SECTOR FUNDS):

1987 marked the entry of non-UTI, public sector mutual funds set up by public
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
established in June 1987 followed by Can bank Mutual Fund (Dec 87), Punjab National
Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun
90), Bank of Baroda Mutual Fund (Oct 92), LIC established its Mutual Fund in June
1989 While GIC had set up its Mutual Fund in December 1990.
At the end of 1993, mutual fund industry had assets under management of
Rs.47, 004 crores.
THIRD PHASE-1993-2003 (ENTRY OF PRIVATE SECTOR FUNDS):

With the entry of private sector funds in 1993, a new era started in the Indian mutual
fund Industry, giving the Indian Investors a wider choice of fund families. Also, 1993
was the year in which the first Mutual Fund Regulations came into being, under which
al l Mutual Funds, except UTI were to be registered and governed. The erstwhile Kothari
Pioneer (now merged with Frankl in Templeton) was the private sector mutual fund
registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive
and revised Mutual Fund Regulations in 1996. The industry now functions under the
SEBI (Mutual Fund) Regulations 1996.

FOURTH PHASE-SINCE F E B R U A R Y 2003:

I n February 2003, following the repeal of the Unit Trust Act 1963 UTI was
bifurcated ir.to two separate entities. One is the Specified Undertaking of the U n it Trust
of India with assets under management of Rs.29, 835 crores as at the end of January
2003.
1.6 TYPES OF MUTUAL F U N D S S C H E M E S IN INDIA

Wide variety of Mutua l Funds schemes exists in cater to the needs such as financial
positions, risks tolerance and return expectations etc. Thus, mutual funds have
variety of flavours, being a collect ion of ma ny stocks, an investor can go for picking
a mutual fund might be easy. There are over hund reds of mutual funds schemes to
choose from. I t is easier to think of mutual funds in categories , mentioned below.
A). BY STRUCTURE

 Open – Ended Schemes:

An open-end fund is one that is available for subscription all through the year.
These do not have a fixed maturity. Investors can conveniently buy and sell units at
Net Asset Value (“NAV”) related prices. The key feature of open-end schemes is
liquidity.

 Close – Ended Schemes:

A closed-end fund has a stipulated maturity period which generally ranging from 3
to 15 years. The fund is open for subscription only during a specified period. Investors
can invest in the scheme at the time of the initial public issue and thereafter they can buy
or sell the units of the scheme on the stock exchanges where they are listed. In order to
provide an exit route to the investors, some close-ended funds give an option of selling
back the units to the Mutual Fund through periodic repurchase at NAV related prices.
SEBI Regulations stipulate that at least one of the two exit routes is provided to the
investor.

 Interval Schemes:
Interval Schemes are that scheme, which combines the features of open-ended and
close- ended schemes. The units may be traded on the stock exchange or may be
open for sale or redemption during pre-determined intervals at NAV related prices.
B). BY NATURE
 Equity Fund:
These funds invest a maximum part of their corpus into equities holdings. The
structure of the fund may vary different for different schemes and the fund manager’s
outlook on different stocks. The Equity Funds are sub-classified depending upon their
investment objective, as follows:
 Diversified Equity Funds
 Mid-Cap Funds
 Sector Specific Funds
 Tax Savings Funds (ELSS)

Equity investments are meant for a longer time horizon; thus, Equity funds rank
high on the risk-return matrix.

 Debt Funds:
The objective of these Funds is to invest in debt papers. Government authorities,
private companies, banks and financial institutions are some of the major issuers of
debt papers. By investing in debt instruments, these funds ensure low risk and
provide stable income to the investors. Debt funds are further classified as:

 Gilt Funds: Invest their corpus in securities issued by Government, popularly

known as Government of India debt papers. These Funds carry zero Default risk
but are associated with Interest Rate risk. These schemes are safer as they
invest in papers backed by Government.
 Income Funds: Invest a major portion into various debt instruments such as
bonds, corporate debentures and Government securities.
 MIPs: Invests maximum of their total corpus in debt instruments while they take
minimum exposure in equities. It gets benefit of both equity and debt market.
These scheme ranks slightly high on the risk-return matrix when compared
with other debt schemes.
  Short Term Plans (STPs): Meant for investment horizon for three to six months.
These funds primarily invest in short term papers like Certificate of Deposits
(CDs) and Commercial Papers (CPs). Some portion of the corpus is also
invested in corporate debentures.
 Liquid Funds: Also known as Money Market Schemes, These funds provides
easy liquidity and preservation of capital. These schemes invest in short-term
instruments like Treasury Bills, inter-bank call money market, CPs and CDs.
These funds are meant for short-term cash management of corporate houses and
are meant for an investment horizon of 1day to 3 months. These schemes rank
low on risk-return matrix and are considered to be the safest amongst all
categories of mutual funds.

 Balanced Funds:
As the name suggest they, are a mix of both equity and debt funds. They invest in
both equities and fixed income securities, which are in line with pre-defined investment
objective of the scheme. These schemes aim to provide investors with the best of both the
worlds. Equity part provides growth and the debt part provides stability in returns.

Each category of funds is backed by an investment philosophy, which is pre-

defined in the objectives of the fund. The investor can align his own investment needs with
the funds objective and invest accordingly.
C) BY INVESTMENT OBJECTIVE:

Growth Schemes:
Growth Schemes are also known as equity schemes. The aim of these schemes
is to provide capital appreciation over medium to long term. These schemes normally
invest a major part of their fund in equities and are willing to bear short-term decline
in value for possible future appreciation.

Income Schemes:
Income Schemes are also known as debt schemes. The aim of these schemes is to
provide regular and steady income to investors. These schemes generally invest in fixed
income securities such as bonds and corporate debentures. Capital appreciation in such
schemes may be limited.

Balanced Schemes:
Balanced Schemes aim to provide both growth and income by periodically
distributing a part of the income and capital gains they earn. These schemes invest in
both shares and fixed income securities, in the proportion indicated in their offer
documents (normally 50:50).

Money Market Schemes:

Money Market Schemes aim to provide easy liquidity, preservation of capital and
moderate income. These schemes generally invest in safer, short-term instruments,
such as treasury bills, certificates of deposit, commercial paper and inter-bank call money.

Load Funds:
A Load Fund is one that charges a commission for entry or exit. That is, each
time you buy or sell units in the fund, a commission will be payable. Typically, entry and
exit loads range from 1% to 2%. It could be worth paying the load, if the fund has a good
performance history.

No-Load Funds:
 A No-Load Fund is one that does not charge a commission for entry or exit. That
is, no commission is payable on purchase or sale of units in the fund. The advantage of a
no-load fund is that the entire corpus is put to work.

OTHER SCHEMES

Tax Saving Schemes:

Tax-saving schemes offer tax rebates to the investors under tax laws prescribed
from time to time. Under Sec.88 of the Income Tax Act, contributions made to any Equity
Linked Savings Scheme (ELSS) are eligible for rebate.

Index Schemes:
Index schemes attempt to replicate the performance of a particular index such as the
BSE Sensex or the NSE 50. The portfolio of these schemes will consist of only those
stocks that constitute the index. The percentage of each stock to the total holding will
be identical to the stocks index weightage. And hence, the returns from such schemes
would be more or less equivalent to those of the Index.

Sector Specific Schemes:

These are the funds/schemes which invest in the securities of only those sectors or
industries as specified in the offer documents. E.g. Pharmaceuticals, Software, Fast
Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are
dependent on the performance of the respective sectors/industries. While these funds may
give higher returns, they are more risky compared to diversified funds. Investors need
to keep a watch on the performance of those sectors/industries and must exit at an
appropriate time.
1.7 Why Select Mutual Fund?

The risk return trade-off indicates that if investor is willing to take higher risk then
correspondingly, he can expect higher returns and vice versa if he pertains to lower risk
instruments, which would be satisfied by lower returns. For example, if an investor opt
for bank FD, which provide moderate return with minimal risk. But as he moves ahead to
invest in capital protected funds and the profit-bonds that give out more return which is
slightly higher as compared to the bank deposits but the risk involved also increases in
the same proportion.
Thus, investors choose mutual funds as their primary means of investing, as Mutual
funds provide professional management, diversification, convenience and liquidity. That
doesn’t mean mutual fund investments risk free.
This is because the money that is pooled in are not invested only in debts funds
which are less riskier but are also invested in the stock markets which involves a higher
risk but can expect higher returns. Hedge fund involves a very high risk since it is mostly
traded in the derivatives market which is considered very volatile.

RETURN RISK MATRIX

HIGHIER RISK HIGHER

MODERATE RISK
RETURNS HIGHIER
RETURNS

Ventur
e
Capital Equity
 Bank FD Mutua
l
Postal Funds
Savings

LOWER RISK LOWER

LOWER RISK
RETURNS HIGIER
RETURNS

1.8 NET ASSET VALUE (NAV):

Since each owner is a part owner of a mutual fund, it is necessary to establish the
value of his part. In other words, each share or unit that an investor holds needs to be
assigned a value. Since the units held by investor evidence the ownership of the fund’s
assets, the value of the total assets of the fund when divided by the total number of units
issued by the mutual fund gives us the value of one unit. This is generally called the Net
Asset Value (NAV) of one unit or one share. The value of an investor’s part ownership is
thus determined by the NAV of the number of units held.

Calculation of NAV:

Let us see an example. If the value of a fund’s assets stands at Rs. 100 and it
has 10 investors who have bought 10 units each, the total numbers of units issued are 100,
and the value of one unit is Rs. 10.00 (1000/100). If a single investor in fact owns 3
units, the value of his ownership of the fund will be Rs. 30.00(1000/100*3). Note that
the value of the fund’s investments will keep fluctuating with the market-price
movements, causing the Net Asset Value also to fluctuate. For example, if the value of
our fund’s asset increased from Rs. 1000 to 1200, the value of our investors holding of 3
units will now be (1200/100*3) Rs. 36. The investment value can go up or down,
depending on the markets value of the fund’s assets.
1.9 MUTUAL FUND FEES AND EXPENSES

Mutual fund fees and expenses are charges that may be incurred by investors who hold
mutual funds. Running a mutual fund involves costs, including shareholder transaction costs,
investment advisory fees, and marketing and distribution expenses. Funds pass along these
costs to investors in a number of ways.

1. TRANSACTION FEES
i) Purchase Fee:
It is a type of fee that some funds charge their shareholders when they buy shares. Unlike a
front-end sales load, a purchase fee is paid to the fund (not to a broker) and is typically
imposed to defray some of the fund’s costs associated with the purchase.

ii) Redemption Fee:

It is another type of fee that some funds charge their shareholders when they sell or redeem
shares. Unlike a deferred sales load, a redemption fee is paid to the fund (not to a broker ) and
is typically used to defray fund costs associated with a shareholder’s redemption.

iii) Exchange Fee:

Exchange fee that some funds impose on shareholders if they exchange (transfer) to
another fund within the same fund group or “family of funds.”

2. PERIODIC FEES

6) Management Fee:

Management fees are fees that are paid out of fund assets to the fund’s investment adviser for
investment portfolio management, any other management fees payable to the fund’s
investment adviser or its affiliates, and administrative fees payable to the investment adviser
that are not included in the “Other Expenses” category. They are also called maintenance
fees.

ii) Account Fee:

Account fees are fees that some funds separately impose on investors in
connection with the maintenance of their accounts. For example, some funds impose an
account maintenance fee on accounts whose value is less than a certain dollar amount.
1.10 LOADS

Definition of a load

Load funds exhibit a "Sales Load" with a percentage charge levied on purchase or sale of
shares. A load is a type of Commission (remuneration). Depending on the type of load a
mutual fund exhibits, charges may be incurred at time of purchase, time of sale, or a mix of
both. The different types of loads are outlined below.

Front-end load:

Also known as Sales Charge, this is a fee paid when shares are purchased. Also known as a
"f“ont-end load," ”his fee typically goes to the brokers that sell the fund's’shares. Front-end
loads reduce the amount of your investment. For example, let's’say you have Rs.10,000 and
want to invest it in a mutual fund with a 5% front-end load. The Rs.500 sales load you must
pay comes off the top, and the remaining Rs.9500 will be invested in the fund. According to
NASD rules, a front-end load cannot be higher than 8.5% of your investment.

Back-end load:

Also known as Deferred Sales Charge, this is a fee paid when shares are sold. Also known as
a "b“ck-end load," ”his fee typically goes to the brokers that sell the fund's’shares. The
amount of this type of load will depend on how long the investor holds his or her shares and
typically decreases to zero if the investor holds his or her shares long enough.

Level load / Low load:

It's’similar to a back-end load in that no sales charges are paid when buying the fund. Instead
a back-end load may be charged if the shares purchased are sold within a given time frame.
The distinction between level loads and low loads as opposed to back-end loads, is that this
time frame where charges are levied is shorter.

No-load Fund:

As the name implies, this means that the fund does not charge any type of sales load. But, as
outlined above, not every type of shareholder fee is a "s“les load." ” no-load fund may charge
fees that are not sales loads, such as purchase fees, redemption fees, exchange fees, and
account fees.
1.11 SELECTION PARAMETERS FOR MUTUAL FUND

Your objective:
The first point to note before investing in a fund is to find out whether your
objective matches with the scheme. It is necessary, as any conflict would directly affect
your prospective returns. Similarly, you should pick schemes that meet your specific
needs. Examples: pension plans, children’s plans, sector-specific schemes, etc.

Your risk capacity and capability:

This dictates the choice of schemes. Those with no risk tolerance should go for
debt schemes, as they are relatively safer. Aggressive investors can go for equity
investments. Investors that are even more aggressive can try schemes that invest in
specific industry or sectors.

Fund Manager’s and scheme track record:

Since you are giving your hard-earned money to someone to manage it, it is
imperative that he manages it well. It is also essential that the fund house you choose
has excellent track record. It also should be professional and maintain high transparency
in operations. Look at the performance of the scheme against relevant market benchmarks
and its competitors. Look at the performance of a longer period, as it will give you how
the scheme fared in different market conditions.

Cost factor:
Though the AMC fee is regulated, you should look at the expense ratio of the fund
before investing. This is because the money is deducted from your investments. A higher
entry load or exit load also will eat into your returns. A higher expense ratio can be
justified only by superlative returns. It is very crucial in a debt fund, as it will devour a
few percentages from your modest returns.

Also, Morningstar rates mutual funds. Each year end, many financial publications
list the year's’ best performing mutual funds. Naturally, very eager investors will rush
out to purchase shares of last year's’top performers. That's’a big mistake. Remember,
changing market conditions make it rare that last year's’top performer repeats that ranking
for the current year. Mutual fund investors would be well advised to consider the fund
prospectus, the fund manager, and the current market conditions. Never rely on last
year's’top performers
1.12 Types of Returns on Mutual Fund:
There are three ways, where the total returns provided by mutual funds can be
enjoyed by investors:

 Income is earned from dividends on stocks and interest on bonds. A fund pays out
nearly all income it receives over the year to fund owners in the form of a
distribution.
 If the fund sells securities that have increased in price, the fund has a capital gain.
Most funds also pass on these gains to investors in a distribution.
If fund holdings increase in price but are not sold by the fund manager, the fund's’shares
increase in price. You can then sell your mutual fund shares for a profit. Funds will also
usually give you a choice either to receive a check for distributions or to reinvest the
earnings and get more shares.
1.13 RISK FACTORS OF MUTUAL FUND:

The Risk-Return Trade-Off:

The most important relationshi p to understand is the risk-return trade-off. Higher the risk
greater the returns/loss and lower the risk lesser the ret urns/ loss. Hence it is up to you,
the investor to decide how much risk you are willing to take. In order to do this, you
must first be aware of the d ifferent types of risks involved with your investment
decision.

Market Risk:

Sometimes prices and yields of all securities rise and fall. Broad outside influences
affecting the market in general to do this. This is true, may it be big corporations or
smaller mid-sized companies. This is known as market risk. A systematic investment plan
("S“P")” that works on the concept of Ru pee cost averaging ("R“A")”might help
mitigate the risk.

Credit Risk:

The debt servicing ability (may it be interest payments or repayments of principal) of a

company through its cash flows determines the cred it risks faced by you. This cred it
risk is measured by independent rating agencies like CR ISIL who rate companies and
their paper. A 'A‘A ' ‘ating is considered the safest whereas a 'D‘' ‘ating is considered
poor cred its quality. A well-diversified portfolio might help mitigate the risk.

Inflation Risk:

Things you hear people talk about:

"R“. I 00 today is worth more than Rs. I 00 tomorrow."
”R“member the time when a bus when a bus r ide costed 50 paise?"
”M“hangai ka jamana Hai."
”he root cause, inflation is the loss of purchasing power over time. A lot of times
people make conservative investment decisions to protect their capital but end up with a
sum of money that can buy less than what the principal could at the time of the
investment. This happens when inflations grow factor than a return on your investment.
A well-diversified portfolio with the investment i n equities might help mitigate help
mitigate the risk.
Interest Rate Risk:

In a free market economy interest rates are difficult if not impossible to predict. Charges
in indirect rates affect the prices of bonds as well as equities. If the interest rates rise the
prices of bonds fall and vice versa. Equity might be negatively affected a s well i n a
risking i n t e r e s t rate environment. A well diversified po1tfolio might help mitigate
this risk.

Political/Government Policy Risk:

Changes in government policy and political decisions can change the investment
environment. They can create a favourable environment for investment or vice versa.

Liquidity Risk:
Liquidity risk arises when it becomes difficult to sell the securities that one has
purchased liquidity ty risk can be partly mitigated by diversification, staggering of
maturities as well as internal risk controls that lean towards purchase of liquid
securities.
1.14 STRUCTURE OF A MUTUAL FUND:

India has a legal framework within which Mutual Fund have to be constituted. In
India open and close-end funds operate under the same regulatory structure i.e. as
unit Trusts. A Mutual Fund in India is allowed to issue open-end and close-end schemes
under a common legal structure. The structure that is required to be followed by any
Mutual Fund in India is laid down under SEBI (Mutual Fund) Regulations, 1996.

The Fund Sponsor:

Sponsor is defined under SEBI regulations as any person who, acting alone or in
combination of another corporate body establishes a Mutual Fund. The sponsor of the
fund is akin to the promoter of a company as he gets the fund registered with SEBI. The
sponsor forms a trust and appoints a Board of Trustees. The sponsor also appoints the
Asset Management Company as fund managers. The sponsor either directly or acting
through the trustees will also appoint a custodian to hold funds assets. All these are
made in accordance with the regulation and guidelines of SEBI.
 As per the SEBI regulations, for the person to qualify as a sponsor, he must
contribute at least 40% of the net worth of the Asset Management Company and
possesses a sound financial track record over 5 years prior to registration.

Mutual Funds as Trusts:

A Mutual Fund in India is constituted in the form of Public trust Act, 1882. The
Fund sponsor acts as a settlor of the Trust, contributing to its initial capital and appoints
a trustee to hold the assets of the trust for the benefit of the unit-holders, who are the
beneficiaries of the trust. The fund then invites investors to contribute their money in
common pool, by scribing to “units” issued by various schemes established by the
Trusts as evidence of their beneficial interest in the fund.
It should be understood that the fund should be just a “pass through” vehicle.
Under the Indian Trusts Act, the trust of the fund has no independent legal capacity
itself, rather it is the Trustee or the Trustees who have the legal capacity and therefore all
acts in relation to the trusts are taken on its behalf by the Trustees. In legal parlance the
investors or the unit-holders are the beneficial owners of the investment held by the
Trusts, even as these investments are held in the name of the Trustees on a day-to-day
basis. Being public trusts, Mutual Fund can invite any number of investors as beneficial
owners in their investment schemes.

Trustees:
A Trust is created through a document called the Trust Deed that is executed by the
fund sponsor in favour of the trustees. The Trust- the Mutual Fund – may be managed by
a board of trustees- a body of individuals, or a trust company- a corporate body. Most of
the funds in India are managed by Boards of Trustees. While the boards of trustees are
governed by the Indian Trusts Act, where the trusts are a corporate body, it would
also require to comply with the Companies Act, 1956. The Board or the Trust
company as an independent body, acts as a protector of the of the unit-holders interests.
The Trustees do not directly manage the portfolio of securities. For this specialist function,
the appoint an Asset Management Company. They ensure that the Fund is managed by ht
AMC as per the defined objectives and in accordance with the trusts deeds and SEBI
regulations.
1.15 The Asset Management Companies:

The role of an Asset Management Company (AMC) is to act as the investment

manager of the Trust under the board supervision and the guidance of the Trustees. The
AMC is required to be approved and registered with SEBI as an AMC. The AMC of a
Mutual Fund must have a net worth of at least Rs. 10 Crores at all times. Directors of the
AMC, both independent and non- independent, should have adequate professional
expertise in financial services and should be individuals of high morale standing, a
condition also applicable to other key personnel of the AMC. The AMC cannot act as a
Trustee of any other Mutual Fund. Besides its role as a fund manager, it may undertake
specified activities such as advisory services and financial consulting, provided these
activities are run independent of one another and the AMC’s resources (such as
personnel, systems etc.) are properly segregated by the activity. The AMC must always act
in the interest of the unit-holders and reports to the trustees with respect to its activities.

Custodian and Depositories:

Mutual Fund is in the business of buying and selling of securities in large
volumes. Handling these securities in terms of physical delivery and eventual safekeeping
is a specialized activity. The custodian is appointed by the Board of Trustees for
safekeeping of securities or participating in any clearance system through approved
depository companies on behalf of the Mutual Fund and it must fulfill its
responsibilities in accordance with its agreement with the Mutual Fund. The custodian
should be an entity independent of the sponsors and is required to be registered with
SEBI. With the introduction of the concept of dematerialization of shares the
dematerialized shares are kept with the Depository participant while the custodian
holds the physical securities. Thus, deliveries of a fund’s securities are given or received
by a custodian or a depository participant, at the instructions of the AMC, although under
the overall direction and responsibilities of the Trustees.

Bankers:
A Fund’s activities involve dealing in money on a continuous basis primarily with
respect to buying and selling units, paying for investment made, receiving the proceeds
from sale of the investments and discharging its obligations towards operating expenses.
Thus the Fund’s banker plays an important role to determine quality of service that the
fund gives in timely delivery of remittances etc.

Transfer Agents:
Transfer agents are responsible for issuing and redeeming units of the Mutual
Fund and provide other related services such as preparation of transfer documents and
updating investor records. A fund may choose to carry out its activity in-house and
charge the scheme for the service at a competitive market rate. Where an outside
Transfer agent is used, the fund investor will find the agent to be an important interface to
deal with, since all of the investor services that a fund provides are going to be dependent
on the transfer agent.
1.16 REGULATORY STRUCTURE OF MUTUAL FUNDS IN INDIA:

The structure of mutual funds in India is guided by the SEBI. Regulations,

1996.These regulations make it mandatory for mutual fund to have three structures of
sponsor trustee and asset Management Company. The sponsor of the mutual fund and
appoints the trustees. The trustees are responsible to the investors in mutual fund and
appoint the AMC for managing the investment portfolio. The AMC is the business face
of the mutual fund, as it manages all the affairs of the mutual fund. The AMC and the
mutual fund have to be registered with SEBI.

SEBI REGULATION

 As far as mutual funds are concerned, SEBI formulates policies and regulates the
mutual funds to protect the interest of the investors.

 SEBI notified regulations for the mutual funds in 1993. Thereafter, mutual funds
sponsored by private sector entities were allowed to enter the capital market.

T
 he regulations were fully revised in 1996 and have been amended thereafter from time
to time.

S
 EBI has also issued guidelines to the mutual funds from time to time to protect the
interests of investors.

A
 ll mutual funds whether promoted by public sector or private sector entities including
those promoted by foreign entities are governed by the same set of Regulations. The
risks associated with the schemes launched by the mutual funds sponsored by these
entities are of similar type. There is no distinction in regulatory requirements for these
mutual funds and all are subject to monitoring and inspections by SEBI.
 S
 EBI Regulations require that at least two thirds of the directors of trustee company or
board of trustees must be independent i.e. they should not be associated with the
sponsors.

A
 lso, 50% of the directors of AMC must be independent. All mutual funds are required
to be registered with SEBI before they launch any scheme.

1.17ASSOCIATION OF MUTUAL FUNDS IN INDIA (AMFI):

With the increase in mutual fund players in India, a need for mutual fund association in India
was generated to function as a non-profit organisation. Association of Mutual Funds in India
(AMFI) was incorporated on 22nd August, 1995.

AMFI is an apex body of all Asset Management Companies (AMC) which has been
registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes are
its members. It functions under the supervision and guidelines of its Board of Directors.
Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a
professional and healthy market with ethical lines enhancing and maintaining standards. It
follows the principle of both protecting and promoting the interests of mutual funds as well as
their unit holders.

The Objectives of Association of Mutual Funds in India:

 The Association of Mutual Funds of India works with 30 registered AMCs of the
country. It has certain defined objectives which juxtaposes the guidelines of its Board
of Directors. The objectives are as follows:

 This mutual fund association of India maintains high professional and ethical
standards in all areas of operation of the industry.

I
 t also recommends and promotes the top-class business practices and code of conduct
which is followed by members and related people engaged in the activities of mutual
fund and asset management. The agencies who are by any means connected or
involved in the field of capital markets and financial services also involved in this
code of conduct of the association.
  AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual
fund industry.

 Association of Mutual Fund of India do represent the Government of India, the

Reserve Bank of India and other related bodies on matters relating to the Mutual Fund
Industry.

 It develops a team of well qualified and trained Agent distributors. It implements a

programme of training and certification for all intermediaries and other engaged in the
mutual fund industry.

1.18 MUTUAL FUND COMPANIES IN INDIA:

The concept of mutual funds in India dates back to the year 1963. The era between
1963 and 1987 marked the existence of only one mutual fund company in India with Rs.
67bm assets under management (AUM), by the end of its monopoly era, the Unit Trust of
India (UTI). By the end of the 80s decade, few other mutual fund companies in India took
their position in mutual fund market.

The new entries of mutual fund companies in India were SBI Mutual Fund, Can bank
Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank Mutual Fund, Bank of India
Mutual Fund.

The succeeding decade showed a new horizon in Indian mutual fund industry. By the
end of 1993, the total AUM of the industry was Rs. 470.04 bn. The private sector funds
started penetrating the fund families. In the same year the first Mutual Fund Regulations
came into existence with re-registering all mutual funds except UTI. The regulations were
further given a revised shape in 1996.

Kothari Pioneer was the first private sector mutual fund company in India which has
now merged with Franklin Templeton. Just after ten years with private sector players
penetration, the total assets rose up to Rs. 1218.05 bn. Today there are 33 mutual fund
companies in
India.

Major Mutual Fund Companies in India

 ABN AMRO Mutual Fund

 Birla Sun Life Mutual Fund
  Bank of Baroda Mutual Fund
 HDFC Mutual Fund
 HSBC Mutual Fund
 ING Vysya Mutual Fund
 Prudential ICICI Mutual Fund
 Tata Mutual Fund
 Unit Trust of India Mutual Fund
 Reliance Mutual Fund
 Standard Chartered Mutual Fund
 Franklin Templeton India Mutual Fund
 State Bank of India Mutual Fund
 Morgan Stanley Mutual Fund India
 Escorts Mutual Fund
 Chola Mutual Fund
 LIC Mutual Fund
 GIC Mutual Fund
 Alliance Capital Mutual Fund
 Benchmark Mutual Fund
 Can bank Mutual Fund

For the first time in the history of Indian mutual fund industry, Unit Trust of India Mutual
Fund has slipped from the first slot. Earlier, in May 2006, the Prudential ICICI Mutual Fund
was ranked at the number one slot in terms of total assets
.
In the very next month, the UTIMF had regained its top position as the largest fund house in
India.

Now, according to the current pegging order and the data released by Association of Mutual
Funds in India (AMFI), the Reliance Mutual Fund, with a January-end AUM of Rs 39,020
crore has become the largest mutual fund in India

On the other hand, UTIMF, with an AUM of Rs 37,535 crore, has gone to second position.
The Prudential ICICI MF has slipped to the third position with an AUM of Rs 34,746 crore.

It happened for the first time in last one year that a private sector mutual fund house has
reached to the top slot in terms of asset under management (AUM). In the last one year to
January, AUM of the Indian fund industry has risen by 64% to Rs 3.39 lakh crore.
According to the data released by Association of Mutual Funds in India (AMFI), the
combined average AUM of the 35 fund houses in the country increased to Rs 5,512.99 billion
in April compared to Rs 4,932.86 billion in March

CHAPTER :2

RESEARCH METHODOLOGY

2.1 Objectives

2.2 Hypothesis

2.3 Scope of the study

2.4 Limitation of the study

2.5 Need of the study

2.6 Sampling technique

2.7 Sample size

2.8 Data collection

2.9 Tools
Research Methodology: -

It is a way to systematically solve a problem. The methodology adopted in this study

explained below: -

Research Design-

2.1 Objectives: -

1. To analyses which provides better returns from H DFC and ICI CI.

2. To analyses the concept and parameters of mutual funds.

3. To know about customer satisfaction.

4. To know people 's‘behavior regarding risk factor involved in mutual funds.

2.2 Hypothesis: - 1 awareness about mutual funds

HO= Customers have no awareness about mutual

funds

.H1 =Customers are aware about mutual funds.

HYOTHESIS 2: Satisfaction of customers a b o u t HDFC mutual fund

HO=Customers are not satisfied with ICICI

H l =Customers are satisfied with HDFC.

30
2.4 Scope of the study: -

1. To make people aware about the mutual fund.

2. To provide information regarding advantages an d disadvantages of mutual

funds.
To
3. advice where to invest or not to invest.

4. To provide information regarding types of mutual funds which beneficial for

whom.

2.5 Limitation of the study: -

1. I t is difficult to cover all the functions of the company.

2. Because of the limited time period, the survey work was conducted in the Thane
reg ion and the same size was taken as 30 respondents only.
Th
3. e analysis and conclusion made by me as per my limited understanding and there
may be some variation in actual situation.
4. The information about the company is mostly based on secondary data from the
company websites, other books as primary data was not accessible.

2.6 Need of the study: -

1. The need of study arises for learning the variables available that distinguish the
mutual fund of two companies.
2. To know the risk & return associated with mutual fund.
3. To choose best companies for mutual investment between HDFC & ICICI.

31
2.7 Sampling Techniques: -

 Deliberate.

 Convenience Sampl ing.

2.8 Sample Size: -

Sampling s defined as a selection of some part of an aggregate based on w h ich a

judgement or interface about the aggregate or totality is made. It represents how many
candidates you have chosen to fill your questionnaire or candidates upon whom you have
studied. I have a chosen a sample size of 30 candidates.

2.9 Data Collection: -

Source of data

Primary Data-I have used questionnaire as primary source for collect i ng data for my
study.

Secondary Data-I have collected m y secondary data from websites and journals.

2.10 Tools: -

I have used some charts (Pie chart, column chart) and hypothesis test.

32
33
 CHAPTER:3
REVIEW OF LITERATURE
Our review of literature on mutual funds reveals that unlike developed countries, the
subject of mutual funds has not got adequate attention in India. Looking upon the type of
studies, our review shows that most of the studies have tried to evaluate the
performance of mutual funds. Accordingly, in our review of literature, we have given
more weight to performance studies.

The reviews of literature are divided into two parts. First part covers the studies
made on investment performance and other aspects of mutual funds in developed and
developing countries while, second part covers the studies made on the same aspects for
mutual funds in India. Our review of literature is not exhaustive in nature. We have
reviewed only selected studies.

2.1 Studies on Mutual Funds in Developed and Developing Countries

The subject of mutual funds has extensively been studied in US and other developed
countries. Going by the volume of literature, we observed that number of studies
pertaining to mutual funds in US are far more than that in any developed and developing
country. Our review of literature thus, focuses more on studies pertaining to US as
compared to other countries. It is pertinent to mention here that the concept of mutual
fund is quite new in developing countries. As a result, studies pertaining to mutual funds in
developing countries are limited in terms of number and coverage.

In our review of literature on mutual funds pertaining to countries other than India, we
will first look upon studies regarding the performance of mutual funds and later examine
the studies covering other aspects of mutual funds.

2.1.1 Investment Performance

The first important and comprehensive study on mutual funds was done by Wharton
1
School of Finance and Commerce (1962). It covered various aspects of US mutual funds
industry viz. the fund activity, stock prices, problems of mutual funds and their
investment performance. The period of study was from 1953 to 1958. The study reported
that mutual funds industry diversified its portfolio by investing in many industries. It
also mentioned that smallest funds had pursued the highest turnover rate in the period of
study. Major findings of the study were that mutual funds had performed inferiorly to
the market portfolio which was not managed properly and had the same distribution

33
between common stocks and other assets. Many funds revealed the mixed performance
for unmanaged market portfolio. When funds were grouped by the number of years, they
topped the average performance and rendered completely random results. The study also
measured the effect of fund purchases on the monthly and daily stock prices movements.
It found that the higher fund purchases were linked to higher stock prices, both on
monthly and daily basis. An analysis of the 30 favourite funds issues indicated that funds
would usually buy and sell them in the difference of two months from cyclical rise and
downswing. The study failed to make a distinction between the actual impact of fund
activities and their forecasting ability.

2
Brown and Douglas (1963) attempted to examine the inter-relationships between funds
activity and their performance, and between the funds activity and their impact on
stock market in US mutual funds market. For this, they used the dataset of 30 mutual
fund schemes consisting of favourite stocks. They made a comparison of fund net
purchases with the average increase in per share earnings and the ratio of 1953 prices to
1958 earnings. The results did not report statistically significant differences between
the heavily invested issues and small invested issues by funds. Their study did not find
any association between the variation of fund portfolio turnover rates and its
performance. The shifting in portfolio structure by fund manager did not offer better
performance. The study also found that fund portfolio activity had majorly influenced the
market prices but its impact remained inconsistent in st ehavior r de ehavior ghe
prices.

3
Jack L. Treynor (1965) proposed a methodology for evaluating mutual funds
performance that is commonly referred as reward to volatility ratio. He used systematic
risk (β) to find the premium per unit of risk for investment portfolio. Treynor measure
is one of the prominent measures of evaluating mutual funds performance and has been
used widely by researchers and practitioners all over the world.

4
William F. Sharpe (1966) developed the composite measure for performance evaluation
(widely known as Sharpe’s reward to variability ratio) considering average risk and return.
He evaluated the performance of 34 US open-ended mutual funds by the measure so
developed during 1944-63. He found the performance of 11 funds superior to that of
Dow Jones Industrial Average (DJIA) index. Reward to variability ratio for most of the

34
funds was found significantly lower as compared to the same measured for DJIA
benchmark index. On the basis of these results, Sharpe concluded that performance of
mutual funds portfolio was distinctly inferior to that of the portfolio performance by DJIA
index. An analysis of the relationship between fund performance and its expense ratio
indicated that good performance was found to be associated with low expense ratio. The
study found a poor relationship between the fund performance and its size.

5
Treynor and Mazuy (1966) tested the market timing ability of 57 open-ended mutual fund
managers during the period of ten years (1953-1962). Their study adopted Treynor’s
(1965) methodology for reviewing the mutual funds performance and found that fund
managers failed to outguess the market. Fund managers also failed to reduce the beta of
funds in bearish market and to increase the same in bullish market. The improvement in the
rate of returns was due to the fund managers’ ability to identify under-priced industries and
companies. Results of the study also suggested that investors were completely dependent
on fluctuations in the market.
6
Jensen (1968) devised an absolute risk-adjusted measure of portfolio performance
(widely known as Jensen’s Alpha) to evaluate the predictive ability of 115 open-ended
mutual fund managers during 1945-66. He examined the contribution of fund managers’
ability in generating fund’s returns over and above the expected returns through
regressing excess fund returns upon excess market returns. Results of the study show that
majority of the fund managers were unable to forecast the future security prices and thus,
they failed in covering their expenses and other management costs. On average, the funds
so chosen failed to outperform a ‘buy-the-market and hold-policy’. However, the strong
form of efficient market hypothesis was supported by Jensen’s study.

7
Robert S. Carlson (1970) evaluated the aggregate performance of US mutual funds during
1948-1967. He used the modified version of Tobin, Linter and Sharpe (TLS) capital asset
pricing model (CAPM) for constructing three types of mutual fund indices and analyzed the
effects of these three indices over different time periods. He reported that the
performance of funds varied relative to the type of market index chosen viz., S&P 500,
NYSE Composite, or DJIA. During the study period, almost all of the funds had
outperformed DJIA and only few funds had gross returns better than that of S&P 500 or
NYSE Composite index. The linearity of risk-return relationship was found to
commensurate with the premises of CAPM. He identified the selectivity of time period and

35
market proxy as the main constituents in deciding under or outperformance of the
portfolio. Carlson also analyzed the fund performance relative to size, expense ratio and
high cash inflows. Results indicated a negative relationship with size or expense ratio and
positive relationship with high cash inflows.

8
Fama (1972) developed a model for evaluating the investment performance of mutual
fund portfolio in several components. He mentioned that one portion of the observed return
on security could be arrived at due to security selection ability of fund managers and other
due to their market timing ability. Accordingly, a test was applied on fund managers’
security analysis and timing skills by comparing the risk and return of actively and
naively managed portfolios. His study also talked about the techniques for measuring
the effects of foregone diversification in the event of investment manager deciding to
concentrate his holdings in what he considered as a few winners. Fama explained the
one-period (with no intraperiod fund flows) and multi-period (with intraperiod fund
flows) measures of performance evaluation and suggested that evaluation can be done
on a period-by-period and on a cumulative basis. He divided the overall performance
into two components; selectivity and risk. The selectivity was further divided into
diversification and net selectivity, and risk into manager’s risk and investor’s risk. In
order to develop an ideal portfolio, he suggested to combine the concepts from modern
theories of portfolio selection and capital market equilibrium with those of traditional
concepts of what constituted good portfolio management.

9
Haim Levy and Marshall Sarnat (1972) compared the mutual funds performance in
perfect and imperfect securities market situation. They took average rate of return and
risk (variability) as variables to measure the benefits accruing to mutual funds investors.
Their study suggests that in an imperfect market, investor can decide rationally to buy the
mutual fund shares even when the funds’ performance is significantly inferior to that of
the chosen index. They found imperfect securities market to be more realistic in
interpreting the mutual funds’ performance and relevant in making investment decisions.
10
John G. MacDonald (1974) evaluated the performance of 123 American mutual funds
relative to their stated objectives during the period 1960-69. He used risk-adjusted return
measures of performance and found that higher risky funds outperformed the lower risky
funds though insignificantly. Stated objectives of the funds conformed to their risk profile
significantly and realized average excess returns. Funds with aggressive objectives
performed superiorly in terms of the ratio of mean returns to total variability. The average
return and risk of funds were positively related. However, for the whole sample of funds, no
significant ‘superior’ or ‘inferior’ performance was reported.

36
 11
Manak C. Gupta (1974) evaluated the investment performance of selected mutual fund
schemes in relation to their risk-return objectives. The period of his study composed of ten
years, from 1962 to 1971. He used the risk-adjusted performance evaluation models
suggested by Sharpe, Treynor and Jensen. The general conclusion of the study refers that
all risk-adjusted models had shown identical performance. In various subgroups of mutual
funds, growth funds performed superiorly to income and balanced funds. As a whole,
almost all the subgroups of mutual funds performed better than the market. It was also
observed that return per unit of risk varied with fund volatility and the funds which were
more volatile in nature performed superiorly to others.

12
Tye Kim (1978) applied the weighted index benchmark portfolio approach for
evaluating the quarterly investment performance of 138 mutual funds. Results indicated
that majority of the funds performed poorly and the funds that had high risk investment
objectives were the bigger losers. It was surprising to note that in case of zero cost
assumption, all mutual funds were found to outperform their benchmark portfolios and
on the contrary, in case of liberal cost assumption, 90 percent mutual funds were found
to underperform their benchmark portfolios. His study supported the facts of efficient
market hypothesis i.e. ‘mutual funds, on an average, failed to outperform the market’
and stood in line to the conclusion of previous studies.

13
Stanley J. Kon and Frank C. Jen (1979) analysed the stock selectivity performance
of American mutual funds. With this, they also analysed the implications for efficient
market hypothesis (EMH) when management engaged itself in market timing activities
too. They applied both the Sharpe-Linter-Mossin (SLM) and Black models of market
equilibrium as benchmarks using 49 mutual fund schemes for the period 1960-71. They
reported the significant differences in risk level of funds during the measurement interval
that also caused the significant manipulation in stock selectivity performance and
portfolio diversification of funds. The results on stock selectivity performance (based on
SLM model) provided evidence both for and against the EMH. Evidence against the EMH
stated that large number of funds were able to outperform in terms of stock selectivity.
The support for EMH in response of above evidence was based on the biasness in favour
of low-risk securities using the SLM benchmark. Thus, they reported the mixed form of
EMH responses from the evidence of stock selectivity performance. They also found the

37
evidence that was not inconsistent with the joint hypothesis of Black model (1972). It
was that the mutual fund managers individually and, o n a n a v e r a g e , were unable
to forecast the future security prices well enough to recover their research expenses,
management fees and commission.

14
Tom W. Miller and Nicholas Gressis (1980) addressed the issue of nonstationarity in
risk-return relationship of mutual funds. They presented the new procedures for
examining this issue by using price appreciation data for market and selected 28 mutual
fund schemes so that, the changes in beta values of mutual funds can be captured and
analyzed easily. They employed the partition regression technique to assign 20 optimal
partitions to each mutual fund so as to measure the nonstationary in traditional CAPM
framework. Study concluded for the strong presence of nonstationary in risk-return
relationship and indicated that risk level changes with a change in mutual funds portfolio
composition.
15
Roy D. Henriksson and Robert C. Merton (1981) developed the model for both
parametric and nonparametric tests of market timing ability of fund managers. They
argued about the observable and unobservable predictions of fund managers to decide for
using one of the tests. If it is observable, the parametric test could be used without further
assumptions about the distribution of security returns otherwise, the nonparametric test
could be used under the assumption of either capital asset pricing model or multi factor
return structure. Their findings permit for the identification and separation of gains of
market timing skills, from the gains of micro stock selectivity skills.

16
Stanley J. Kon (1983) proposed a methodology to measure the optimal
be ehaviorstock selectivity and market timing ability of mutual fund managers. He used
the monthly returns data of 37 mutual fund schemes for 198 months from January
1960 to June 1976. All funds were ca ehavior n different forms according to their
investment objectives. Result of the study showed that individual mutual fund displayed
positive distinct market timing ability and performance. Furthermore, Kon found that
mutual fund managers as a group have no special information regarding the unanticipated
market portfolio returns. He derived the important implications for investment managers
and suggested that managers could improve the overall investment performance
considerably by reallocating the resources to their more productive activities.

38
 17
Eric C. Chang and Wilbur G. Lewellen (1984) evaluated the performance of mutual
funds with varied investment objectives. The dataset of their study consisted of monthly
returns data of 67 mutual fund schemes for the period, from January 1971 to December
1979. They employed parametric statistical procedure developed by Henriksson and
Merton (1981) which allows a joint test for the presence of either superior market
timing or security selection skills of fund managers. Their study did not support the
systematic market timing and superior security selection ability of fund managers. They
found their schemes’ fund managers as poor market timers and stock selectors.
18
Roy D. Henriksson (1984) evaluated the market timing performance of 116 open-ended
mutual funds using both the parametric and nonparametric tests developed by
Henriksson and Merton (1981). Among 116 funds, only three were found to show
significant superior market timing ability under parametric test procedure while under
nonparametric test procedure, these same three showed the negative performance. Fund
performance (after split) under two sub-periods, one in 1968 and second in 1980
showed only one fund as superior performer. The study concluded that mutual fund
managers were not able to follow an investment strategy that successfully times the return
on market portfolio. This conclusion was based on the application of both parametric and
nonparametric tests.

19
Bruce N. Lehmann and David M. Modest (1987) examined the problem of sensitivity of
mutual funds’ performance measures to the benchmarks chosen. They used monthly
returns data of 130 mutual funds from January 1968 to December 1982. In regard to this
problem, they studied the be ehaviorf intercepts using Jensen’s style of mutual fund
regression that involved different risk adjustment procedures including standard CAPM
and Arbitrage Pricing Theory (APT) benchmarks. The main conclusions of the study
were; 1) individual mutual funds showed quite sensitiveness to the method used to
construct the APT benchmark, 2) less sensitivity in the rankings of mutual funds was
exposed for common sources of systematic risks altering security returns 3) wide array of
differences were observed between performance measures yielded by standard CAPM
and APT benchmarks. The results em ehavior he need of having an appropriate model of
risk and return to evaluate the portfolio performance. It was mainly because of the
statistically significant measured abnormal performance rendered by all benchmarks.

39
 20
Chang-Few Lee and Shafiqur Rahman (1990) examined the market timing and stock
selectivity skills of 93 mutual fund schemes for 87 months from January 1977 to March
1984. They assumed portfolio under consideration to be stationary over time and used
monthly returns and 91 days treasury bills data to analyse the performance. Simple
regression technique was applied to separate the stock selectivity skills from market
timing ability. Result of the study shows that at the individual level, mutual fund
managers were found to be the superior market timers as well as stock pickers. This result
implies that the funds with no forecasting skill (no market timers and stock pickers) may
be considered as totally passive management strategy and may fail in providing a
diversification service to their shareholders.

21
Mark Grinblatt and Sheridan Titman (1994) tested the different measures of mutual
funds performance evaluation in rendering the inferences for a variety of benchmark
portfolios. They used 279 mutual funds and 109 passive portfolios with reference to
these measures. Findings of the study suggested that the different measures of mutual
funds’ performance evaluation generally yielded similar inferences for the same
benchmark but varied in yielding inferences for the different benchmarks. In
an ehavior he determinants of mutual funds’ performance that employed fund
characteristics such as net asset value (NAV), load, expenses, portfolio turnover, and
management fee as determinants, - test reported the positive relation between fund
performance and portfolio turnover while negative relation between the fund size and its
expenses.

22
Daniel C. Indro, Christine X. Jiang, Michael Y. Hu, Wayne Y. Lee (1999) examined
the impact of mutual fund size on its performance. For this, they chose the sample of 683
US equity mutual funds from 1993 to 1995 and applied the concept of diminishing returns
to scale. They analysed the effects of fund size and investment style on the cross-
s e c t i o n a l pattern of risk and return. Their study suggested that actively managed
funds must maintain the minimum fund size to overcome their transactional costs and
to achieve the desirable fund returns. The 20 percent of funds lying below the minimum
fund size (breakeven-cost fund size) were found to involve in inefficient trading activities
whereas, 70 percent of funds having optimal size were involved in efficient trading

40
activities. The other 10 percent of the funds were found investing excessively in
information acquisition and trading. It was also noted that if mutual funds out warded
optimal fund size, their marginal rate of returns became negative because of the
diminishing marginal returns for information acquisition and trading. On style based
analysis, the study found the value funds and the blend of growth and value funds in
gaining more returns than that of the growth funds individually from these information
activities. The significant cross sectional variation in mutual funds performance was
observed. Thus, optimal fund size was found to gain optimal fund performance.

23
Russ Wermers (2000) used a new database approach to analyse the mutual funds
performance by decomposing mutual fund returns and costs into several components like
stock picking talent, style, transaction costs and expenses. With this decomposition, he
observed the performance of stocks on gross and net return basis (with or without
expenses and costs) while comparing the costs and benefits of actively and passively
managed mutual fund styles. Results indicated that funds holding the stocks in portfolio
performed superiorly to market by 1.3 percent per year and the same funds performed
poorly by 1 percent in terms of the returns. Of the total, 2.3 percent performance results
occurred because of the differences in returns on stock holding and net returns per
year, 0.7 percent due to the underperformance of non-stock holdings, and 1.6 percent
due to the transaction costs and expenses ratios splitting of funds. Thus, funds picked
stocks well enough to cover their costs. Also, high turnover funds are found to outperform
the market benchmark (Vanguard Index 500) on net returns basis. Evidence supported
for the value of active mutual fund management style in study.
24
James L. Kuhle and Ralph A. Pope (2000) analysed the performance of load and no-
load mutual fund schemes on long-term basis. They compared the returns generated by
sample of 8,100 load and no-load equity funds on the basis of descriptive statistics. The
two sample mean Z test was applied with an objective to capture the statistical
significance of the difference between two sample funds. Further, alpha and beta values
were calculated for comparing the risk and risk-adjusted performance of these sample
funds. The test of the statistical significance indicated that in the short- term (12 months
to 5 years returns) load funds outperformed the no load funds while in the long-term (10-
y e a r returns), opposite case was observed. The alpha and beta value of both the sample
funds did not show any statistical difference in short-term period comparing to long-term
period where both values differed significantly. On an average, no load funds had

41
performed better than that of load funds. Load equity funds outperformed no load funds
only in income category and on risk-adjusted basis.

2.2 Studies on Mutual Funds in India

Mutual funds industry has passed more than forty five years of its presence in India. But,
there exits very few research studies, which examined the performance and other aspects of
mutual funds in India. A brief account of the review of Indian studies on mutual funds is
presented as under:

2.2.1 Investment Performance

One of the earliest studies on performance of Indian mutual funds was carried out by
46
Barua and Varma (1991). They analysed the three years daily returns data (1987-1990)
of Master Share Scheme of Unit Trust of India using CAPM (Capital Asset Pricing
Model) model. The study found that Master Share offered higher returns to small investors
and performed quite satisfactorily in the market.

47
Shah Ajay and Thomas Susan (1994) evaluated the performance of 11 mutual fund
schemes on the basis of their market prices. They used Jensen and Sharpe measures to
analyse the weekly returns of selected schemes and concluded that, except UTI UGS
2000, none of the sample schemes had earned returns higher than the market due to very
high risk and inadequate diversification.

48
Sarkar and Majumdar (1995) analysed the financial performance of five close-ended
growth funds for the period, from 1991 to 1993. They found that funds performance was
below average in terms of alpha values (all negative and not statistically significant) and
all funds possessed high risks. They also found that beta of the portfolio schemes was
not stationary in the period of study. Also, the fund managers failed to change the
composition of schemes portfolio in accordance with the changing market conditions.

49
Madhu S. Panigrahi (1996) measured the performance of four growth oriented schemes
(UTIMG, SBIMMP, GICGP II, MSGF). The schemes under study covered two phases of

42
operation – boom (before September, 1994) and recessionary phase (till December, 1995),
in stock market. He used risk-adjusted return measures of performance like Treynor
(1965), Sharpe (1966), Jensen (1968) and Fama (1972), and concluded that schemes
exhibited a positive performance during boom phase while negative performance during
the recessionary phase.
50
M. Jayadev (1996) examined the monthly performance of two growth- oriented
mutual funds (Mastergain and Magnum Express) against ETOSHPI (The Economic
Times Ordinary Share Price Index) Market Index. He used Jensen measure, Treynor ratio
and Sharpe ratio to measure the risk adjusted performance of portfolio. Study found that
according to Jensen and Treynor measure, Mastergain had registered better performance
but according to Sharpe ratio, it performed poorly. The Magnum Express had failed to
perform superiorly on the basis of all three measures. On the diversification front,
Magnum Express was found to be well diversified fund however, Mastergain was the
less diversified fund. Both funds were unable to offer satisfactory returns to investors.
51
Ramesh Chander (2000) tried to evaluate the performance of 34 mutual fund
schemes for the period, from 1994 to 1997. The performance of selected schemes was
evaluated on the basis of risk-adjusted theoretical parameters suggested by Sharpe,
Treynor and Jensen using 91 days treasury bills as risk free rate and BSE- Sensex as the
market benchmark. Results of the study show that in terms of average returns, a large
number of mutual fund schemes outperformed the market benchmark but these schemes
were highly volatile in nature. Open-ended funds performed superiorly to close-ended
funds. Bank and UTI sponsored schemes performed fairly well. In terms of investment
objective, income funds outperformed the growth and balanced fund schemes. All
schemes outperformed the market portfolio in relation to systematic risk as well as to total
risk. However, the performance of schemes was not seen to have any influence of their
fund characteristics. In sum, all schemes earned average annual return of 7.34 percent
due to diversification, and 4.1 percent due to stock selectivity. Study found the fund
managers of schemes as poor market timers.

52
M.S. Narasimhan and S. Vijayalakshmi (2001) analysed the performance of 76 mutual
fund schemes from January 1998 to March 1999. Their study showed that 62 stocks were
held in the portfolio of several schemes, of which only 26 companies were able to
provide positive gains. Top holdings represented that more than 90 percent of the total

43
corpus were held by 11 funds but these funds also had higher level of risk in comparison
to their level of returns. The correlation between portfolio stocks and diversification
benefits was found significant at one percent level for 30 pairs and at five percent level
for 53 pairs. No mutual fund schemes revealed superior performance. Fund managers of
many schemes also performed poorly on their stock selectivity front.
53
S. Narayan Rao and M. Ravindran (2002) measured the performance of selected 269
open-ended mutual fund schemes in a bear market (from September 1998 to April
2002). Using the relative performance index, risk-return analysis, Treynor ratio, Sharpe
ratio, Sharpe measure, Jensen measure and Fama’s investment components measure, the
study found the positive performance of 58 open-ended funds only. Other results of the
study showed that most of the mutual fund schemes were able to satisfy the investors’
expectations of earning excess returns over expected returns based on both the premium
for systematic risk and total risk. On average, mutual funds carried low unsystematic
and high total risk in a portfolio. Among all the funds, debt funds were rated as the best
performers while medium term debt funds were rated as poor performers.

54
Amitabh Gupta (2003) examined the investment performance and market- timing
abilities of 73 mutual fund schemes for the period, 1994-1999. He found that among 73
schemes, 38 schemes (52 percent) received superior returns and the other 35 schemes (48
percent) received inferior returns against the market portfolio. Most of the mutual fund
managers were not able to time the market correctly. There were only three mutual fund
schemes whose fund managers showed some correct market timing ability while, the
fund managers of other schemes were found to involve in wrong market timing. His
study also found that the sample schemes were not diversified adequately by their fund
managers and risk and return of schemes were not in conformity with their objectives.

55
Joyjit Dhar (2003) attempted to examine the market timing and selectivity ability of
fund managers by selecting 12 mutual fund schemes. The period of study was from April
1997 to March 2003. Results of the study showed that majority of the fund managers
revealed superior selectivity and market timing abilities. Fund managers of open-ended
schemes were better performers than the fund managers of close-ended schemes. Study
also found that public sponsored mutual funds performed comparatively better than the
private sponsored funds. However, the fund managers of sample schemes failed to show
consistent stock picking and market timing abilities.

44
45
 CHAPTER NO:4
COMPANY PROFILE

4.1 ICICI mutual fund

4.2 HFC mutual fund

ICICI Prudential Mutual Funds – Best Schemes, ICICI MF NAV,
Performance & Returns 2019
 
1.ICI Prudential Mutual Funds – Introduction
6. ICICI Prudential Asset Management Company Limited is the second largest AMCs in
the country. They played an instrumental role in acquainting Indian investors with
mutual funds in the last 30 years. Many investors have voted their products to be
reliable and trusted, thanks to the CRISIL credit rating of “AAAmfs”. They played a
crucial role in setting up CRISIL rating system.
There is a slew of products that caters to investors from diverse socioeconomic backgrounds.
For instance, you can start investing with an SIP amount as small as Rs. 500 with no upper
limit. Similarly, you can opt for an investment horizon starting from 1 day. The large variety
of mutual funds gives people a chance to build investment portfolios that suit them the best.

2. How to invest in ICICI Prudential Mutual Funds with Clear Tax

The popularity of ICICI Prudential Mutual Fund products is unsurprising as it is one of the
premier AMCs in India. You can invest directly with the fund house or go via a qualified
mutual fund agent or distributor. If you are new to investing or are not familiar with the
market or investment trends, you may invest with ClearTax Save. They have done all the
research required and shortlisted the best-performing funds from ICICI Prudential AMC.
Go to ClearTax to select an ICICI mutual fund that matches your budget, financial goals, and
risk appetite. For instance, debt fund is considered to be a much safer investment avenue with
assured capital protection compared to equity funds. Another notable benefit is that you need
to complete your KYC formalities only once. Invest within minutes from the comfort of your
home and office.
The investment process is quick and painless on ClearTax.
Step 1: Select the mutual fund(s) and the amount you want to invest
monthly/quarterly/annually
Step 2: Fill in the respective personal information columns
Step 3: Make the payment via NetBanking or by using your debit or credit card

3.cuments/ KYC for investing in ICICI Prudential Mutual Funds

6. All financial institutions like banks and AMCs mandate customers to do their Know
Your Customer or KYC process. This is to track the inflow and outflow of money,
which curbs economic evils like money laundering and black money.
For smaller investments, KYC alone would suffice. But for bigger amount In-Person
Verification (IPV) is also a must. With ClearTax, an investor should do the KYC only once in
a lifetime. Currently, it is easier to upload the scanned copies of all the required documents in
a matter of minutes on the distributor portal.
KYC verification through ClearTax is hassle-free, using any of the below 2 methods:
a.ing OTP sent to your Aadhaar-registered mobile number OR

45
6. ICICI EQUITY FUNDS

SL Name of the Investment Risks Returns

No fund Objective (In 5
.
years)

1 ICICI Long-term Moderatel 17.70%

Prudential wealth y High
Dynamic creation by
Plan investing a
majority or
up to 100%
in equities or
equity-
oriented
instruments

2 ICICI Long-term Moderatel 16.33%

Prudential capital y High
Focused appreciation
Bluechip and income
Equity Fund generation to
investors by
investing in
major shares
in large-cap
companies
and the rest
in debt
securities and
money
market
instruments.

3 ICICI Deliver Moderatel 20.98%

Prudential higher returns y High
Value by combining
Discovery dividend
Fund income and
capital
appreciation
by investing
mostly in
value stocks.

4 ICICI Capital High 15.10%

Prudential appreciation
Infrastructur and income
e Fund to investors
by investing
mostly in
equity/equity-
oriented
securities of
the

46
 companies
focused in
infrastructure
development
and the rest
in debts and
money
market.

5 ICICI Long-term Moderatel 18.37%

Prudential capital y High
Long Term appreciation
Equity Fund by investing
(Tax Saving) in equities
with a lock-in
period of 3
years. It is
eligible for
80C tax
deduction up
to Rs. 1.5
lakhs.

b. By uploading photos/scans of the required documents

ID Proofs: You can submit Xerox copy of PAN Card, Passport, Aadhaar Card, Voter ID or
Driving License. We also accept other central government approved documents like NREGA
job card.
Address proofs: You may upload the same ID proof (except PAN) if the address on it is
your current residential address. Rental/lease agreement, most recent utility bill, and ration
card can also serve the purpose. If your permanent address and correspondence address is not
the same, you must provide the proof for both.

4. ICICI Prudential Mutual Fund Products

a. EQUITY FUNDS
ICICI Prudential Equity funds mainly invest in stock markets, deliver high returns and hence
are comparatively riskier. As a volatile investment avenue, it is for aggressive risk seeker.
These long-term investments are actively managed by fund managers and the others are
passively managed via index funds.

b. HYBRID FUNDS
As the name suggests, ICICI Pru hybrid funds put investors’ money in equities, debt
securities and money market instruments in pre-decided proportions. Equity exposure varies
as per hybrid fund type and the risk profile of the investment.

ICICI HYBRID FUNDS

47
SL Name of the Investment Risks Returns
No. fund Objective (In 5
years)

1 ICICI To generate Moderate 14.16%

Prudential current income ly High
Child Care by investing in
Plan (Study money market
Plan) (75% and
above) and
equities (25%
and less)

2 ICICI Medium to Moderate 10.88%

Prudential long-term ly High
MIP 25 investment
that delivers
income by
investing
mainly in debt
and money
market

3 ICICI To deliver Moderate 9.74%

Prudential steady income
Monthly by investing
Income Plan mainly in debt
and money
market with
limited equity
exposure

4 ICICI Long-term Moderate 17.28

Prudential capital ly High
Equity & appreciation
Debt Fund and also
deliver income

5 ICICI Steady Moder 8.04%

Prudential
Regular income ate
Income Fund with
regular
dividend
distributio
n while
promising
long-term
capital
appreciatio
n

48
 6 ICICI Capital Moderate 17.20%
Prudential appreciation ly High
Child Care by investing in
Plan (Gift equities up to
Plan) 65% and debts
up to 35%,
focusing on
large-cap
companies.

c. DEBT FUNDS
ICICI debt funds can be both short-term and long-term and its primary focus is capital
protection. They either deliver steady income or income along with capital appreciation by
mainly investing in bonds, securities or money market instruments. These funds are great for
those with low to medium risk appetite.

ICICI DEBT FUNDS

SL Name of Investment Risks Returns

No the fund Objective (In 5
. years)

1 ICICI A short-term Moderatel 8.50%

Prudential investment y Low
Flexible that aims at
Income income
Plan generation by
investing in
debts and
money
market

2 ICICI Aims at Moderate 8.10%

Prudential optimum
Savings income
Fund generation by
investing in
debt and
money
market
instruments
of diverse
maturity
periods and
credit ratings

3 ICICI Aims at safe Moderatel 8.07%

Prudential income y Low
Ultra generation by
Short investing in
Term debt and

49
 Plan money
market
instruments
of short
maturity
periods

4 ICICI Delivers Low 8.05%

Prudential returns
Liquid proportionate
Plan with low risk
and offers
high liquidity

5 ICICI Short-term Moderate 7.93%

Prudential income and
Short capital
Term appreciation
Plan by investing
in debts and
money
market
securities of
different
terms

6 ICICI Generates Low 8.02%

Prudential returns
Money proportional
Market with the
Fund ultra-low risk
by investing
in money
market, while
offering great
liquidity

7 ICICI Long-term Moderate 6.42%

Prudential wealth
Income building by
Plan investing in
money
market and
debt
instruments
of diverse
credit rating
and terms

50
 d. FUND OF FUNDS
ICICI Prudential fund of funds predominantly invests in other mutual funds. This spreads the
risks as well as cater to people with diverse investment goals. Diversification is achieved by
default when they invest across funds.

ICICI FUND OF FUNDS

SL Name Investment Risks Returns

of the Objective (In 5
No. fund years)

1 ICICI An open- High NA

Prudenti ended scheme
al that generates
Global returns by
Stable investing in
Equity domestic and
Fund overseas
funds for
long-term
capital
creation

2 ICICI Delivers long Moder 12.51%

Prudenti term wealth ately
al creation by High
Advisor investing
Series – mainly in
Long domestic or
Term offshore
Savings equities and
Plan the rest in
debts or
money market

3 ICICI A medium Moder 8.01%

Prudenti term plan that ately
al gives steady High
Advisor income by
Series – investing
Cautious mainly in
Plan fixed income
instruments
(domestic or
offshore)

4 ICICI Delivers Moder 11.73%

Prudenti capital ately
al appreciation High
Advisor (in long-term)
Series – with current
Moderat income by
e Plan investing
mainly in
domestic or

51
 offshore
equities

5 ICICI Make long- Moder 13.68%

Prudenti term wealth ately
al creation by High
Advisor investing
Series- mainly in
Very domestic or
Aggressi offshore funds
ve Plan – equities,
debts and/or
Gold ETFs

6 ICICI Invests in Moder 2.06%

Prudenti ICICI ately
al Prudential High
Regular Gold iWIN
Gold ETF units
Savings Delivers
Fund returns and
focuses on
long-term
capital
appreciation
with easy
liquidity

7 ICICI Delivers Moder 8.43%

Prudenti returns ate
al proportional
Advisor to the risks
Series – undertaken
Dynami while assuring
c high liquidity
Accrual – invests
Plan mainly in
domestic or
offshore debt
and money
market
instruments.

e. EXCHANGE-TRADED FUNDS
Almost similar to stock markets, ETFs too are traded like stocks. They mostly put money in
company stocks or gold or silver among others. You can purchase units and sell at any time.

52
 ICICI EXCHANGE TRADED FUNDS

SL Name of Investmen Risks Return

No the fund t s (In 5
. Objective years)

1 ICICI An open- Moderatel 13.19%

Prudentia ended ETF y High
l Nifty for long-
ETF term
wealth
creation
and strives
to generate
returns
close to
those by
Nifty 50
Index

2 ICICI Tracking Moderatel 13.23%

Prudentia the S&P y High
l Sensex BSE
ETF Sensex
stocks, it is
open-
ended and
tries to
deliver
returns
close to
that of
S&P BSE
Sensex

3 ICICI Tries to High NA

Prudentia reproduce
l Midcap the S&P
Select BSE
ETF MidCap
Select
Index by
purchasing
same
stocks in
similar
measure as
in the
index.

5.mplaint Redressal
6. In case of any issue or concern regarding your mutual fund investment, you can post a
complaint in their online redressal/feedback page. All you need to do is to enter your

53
 folio number, mobile number, email id and the complaint itself in respective columns.
Click on submit and an official will get in touch with you in 24 hours.

6.out the fund house

6. ICICI Prudential Asset Management Company Ltd. is one of India’s premier fund
houses, boasting of over 30 lakhs clientele. A collaboration between ICICI Bank of
India and Prudential Plc of UK, this AMC specializes in portfolio management for
investors among other things. The fund house handles considerable Assets under
Management (AUM) across diverse asset classes like equities, debts instruments and
sectorial funds to name a few. Following a totally customer-centric tactic, they flaunt
a blend of expertise and resourcefulness, giving investors innovative, consistent and
optimum returns against market risks. This way, it gives customers a way to strike a
balance between investments and savings. Their sponsors include ICICI Bank,
Prudential Plc, Prudential Corporation Asia, Eastspring Investments and Jackson
National Life Insurance Company among others.

7. fund managers of ICICI Prudential Mutual Fund

6. Sankaran Naren: The overall investment operations across the mutual fund and
international advisory is under his supervision. With over 2 decades of industrial
exposure, he specializes in equity market and directly handles 2 major products,
namely, ICICI Prudential Top 100 Fund and ICICI Prudential Dynamic Plan.
Mrinal Singh: He joined the fund house as an equity analyst in 2008. Now serving as a
senior asset manager, he is directly responsible for five equity schemes and manages assets
worth Rs. 6000 Cr.
Rahul Rai: At ICICI Prudential fund house, Rahul is the man behind their Real Estate
Business. With innovative strategies to mapping team collaborations, he takes the call on the
company’s real estate section. He was noted for managing the first and the biggest FDI
transactions that boosted the Indian real estate landscape in 2004.
Rahul Goswami: As the Chief Investment Officer of the Fixed Income vertical, Mr.
Goswami currently manages 8 debt funds that include corporate bonds and government
bonds. He monitors economic factors like market liquidity that can impact debt fund
performance.  
Kayzad Eghlim: He is mostly in charge of ETF products and boasts of 26 years of
experience in the field

HDFC

1. What are HDFC Mutual Funds?

HDFC Mutual Fund has left no stone unturned to cater to investors from all walks of life. Be
it any financial goal – long-term, short-term, retirement, tax-saving and so on – HDFC has
that plan for you. Majority of the mutual fund products they offer have CRISIL ratings of 3
and more. Investors from any income background have a gamut of choice in every asset
classes and risk profile. In fact the risk factor of the products range from very low to high.
Investors can choose as per their risk appetite.For instance, In short, ELSS funds have made it

54
easier for investors to define their financial goals – available in both close-ended and open-
ended funds.

2. How to invest in HDFC Mutual Funds?

It is easier than ever to shortlist any HDFC mutual fund product and invest. ClearTax has
always been a reliable platform to find hand-picked funds that suit your investment purpose
and risk profile. Now, you can also select any product from a particular fund house (say, an
HDFC mutual fund) from ClearTax Save portal. One of the advantages of going through us
is, you need to do your KYC formalities only once. The entire investment process will take
no more than 7 minutes.
ClearTax gives you a quick and seamless process in 3 steps.
Step 1: Click on the fund(s) and enter how much you want to invest
monthly/quarterly/annually
Step 2: Fill in your personal info in respective columns
Step 3: Pay online by card or NetBanking – the entire process takes less than 7 minutes

3.C process through ClearTax

6. Money laundering and corruption can cripple the economy and the stability of our
country. Here, Know Your Customer (KYC) and In-Person Verification (IPV) can
help a financial institution significantly. However, ClearTax doesn’t believe in
inconveniencing their investors. So they have enabled a way to do KYC in a quick
and simple way. What’s more, if investing via ClearTax Save, investor needs to do it
only once for their first investment.
Know Your Customer or KYC process is a government and RBI mandate for all financial
institutions, including AMCs. If you are investing via ClearTax, you need to do it only once.
We will simply retrieve the KYC details for all future investments.
ClearTax has made KYC verification an instant and simple process as mentioned below.  
We have an Aadhaar-based KYC in which you enter the OTP sent to your Aadhaar-
registered mobile number
You may also upload the scanned copies of your documents on our ClearTax Save portal

4 cuments required to invest via ClearTax

6 ID Proofs: You can submit Xerox copy of PAN Card, Passport, Aadhaar Card, Voter
ID or Driving License. Other central government approved documents like NREGA
job card are also accepted.
Residential proofs: You can submit the same ID proof (except PAN), if the address on it is
your current residential address. Rental/lease agreement, most utility bill and ration card can
also serve the purpose. If your permanent address and correspondence address are not the
same, then submit proof for both.

5. Mutual fund products by HDFC

55
a. HDFC EQUITY FUNDS
HDFC Mutual funds were formed as a trust and Standard Life Investments Ltd is its sponsor.
It started with one mutual fund in 2000 and has experienced staggering growth in the last 2
decades with 13 mutual fund types. Given below are the products they currently offer.

HDFC EQUITY FUNDS

S Name of Investment Objective Risks Returns (In

L the fund 5 years)

N
o

1 HDFC To deliver building High NA (As it

Housing wealth for long-term. was launched
Opportun They manage this by in 2017)
ities Fund putting money in mostly
Series 1 equity and equity-
oriented funds in
housing and related
sectors. As a thematic
equity fund, it is close-
ended. You can opt for a
direct or regular plan.

2 HDFC This is an open-ended Moder 16.30%

Equity scheme and comes with ately
Fund a dividend (pay out or High
reinvestment) as well as
growth option.
However, an exit load
of 1% applies. You  can
only buy this directly
from the AMC, and not
through any
intermediary. Minimum
initial investment
amount is Rs. 1000 for
old investors and Rs.
5000 for newbies.

56
 3 HDFC An open-ended scheme Moder 14.60%
Top 100 with a robust reputation ately
Fund for over 15 years, High
HDFC Top 100 Fund is
a low-risk fund
compared to funds with
less diversification. You
can opt for dividend or
growth option. Their
aim is to deliver long
term capital
appreciation from
portfolio with high
equity concentration
(often from companies
in BSE 200 index).

4 HDFC As the name suggests, Moder 25.73%

Mid-cap this fund focuses mainly ately
Opportun on equity and equity High
ities Fund oriented shares from
mid-cap companies. It is
an open-ended scheme
and the initial
investment requirement
is only Rs. 1000 for old
customers and Rs. 5000
for new clients.

5 HDFC Long-term wealth Moder 16.84%

Taxsaver creation is the core ately
Fund objective here, and there High
is a 3-year mandatory
lock-in period. It is
basically an ELSS fund.
However, the name
doesn’t hold true
anymore as the Union
Budget 2018 imposed
10% LTCG tax on
ELSS held above 1
year. But despite that,
ELSS has historically
beaten other tax-saving
instruments hands down
when it comes to
returns.

b. HDFC DEBT/INCOME FUNDS

HDFC DEBT/INCOME FUNDS

SL Name Investment Risks Retur

No. of the Objective ns (In

57
 fund 5
years)

1 HDFC This scheme Moderate 6.81%

Gilt mainly aims to
Fund make credit
risk-free returns
by investing in
sovereign
securities or
bonds issued by
the central or
state
government. An
open ended
scheme
launched in
2001, it offers
you both
dividend and
growth option.
There is no
entry load or
exit load for this
fund.

2 HDFC This fund serves Moderate 7.98%

Corpora to make income ly Low
te Bond from capital
Fund appreciation.
They do it by
investing
primarily in
corporate bonds
with ratings
above AA+. It is
a good means to
earn a steady
income in
medium to
larger
investment
period. You
cannot invest in
these debt funds
and money
market
instruments for
more than 60
months.

3 HDFC Here, the ‘short- Moderate 8.13%

Short- term’ part ly Low
term indicates less
Debt than 36 months.
Fund Investors with
low risk appetite
can consider this
fund to park
their money safe
over short to

58
 medium term,
while earning a
fixed interest
income.

4 HDFC This scheme’s Moderate 7.95%

Credit emphasis is on (3
Risk corporate debt. years
Debt This is an open return
Fund ended debt fund s as it
that mainly was
invests in launc
corporate bonds hed in
that are rated 2014)
AA and below.
So, they don’t
include any
AA+ rated
corporate bond
funds. It is a
way to earn
fixed income
over a small
period to long
term.

5 HDFC An open-ended Moderate 6.95%

Dynami scheme
c Debt launched in
Fund 1997, the fund
aims to earn you
regular returns.
They invest in a
slew of debt and
money market
instruments with
different
maturity periods
to achieve this
goal. This
strategy helps
them to
maximize
returns while
keeping a
balance between
yield, liquidity
and risk. Hence,
the risk factor is
only moderate.

HDFC LIQUID Funds

HDFC LIQUID FUNDS

SL Name of Investment Risk Return

No the fund Objective s s (In 5

59
. years)

1 HDFC The Low 7.92%

Money investment
Market goal of this
Fund liquid fund
scheme is to
make
maximum
returns
without
compromisin
g on capital
protection
and high
liquidity. As
an open-
ended
scheme that
offers high
liquidity, it
offers both
growth and
daily
dividend
option. It was
launched in
1999 and can
only be
bought
directly from
the AMC.

2 HDFC As an open- Low 7.04%

Overnigh ended and
t Fund high liquidity
income fund,
it is a low-
risk
investment.
The primary
goal of this
scheme is to
deliver the
highest
possible
returns with
minimal risk
exposure. It
is often
treated as an
emergency
fund due to
its higher
liquidity
factor. The
AMC opened
this fund in
2002. It suits
those who
want to
capitalize in

60
 Collateralised
Borrowing &
Lending
Obligation
(CBLO).

3 HDFC The Low 8.08%

Liquid predominant
Fund objective of
Premium this particular
Plan liquid fund is
to augment
income
consistently
while
maintaining a
good level of
liquidity.
They achieve
this by
investing in a
relevant mix
of debt
securities and
money
market
instruments.
It is best
suited for
those looking
for income
for short-term
or safe
avenues to
park their
money in for
a short
duration.

4 HDFC An open- Low 8%

Liquid ended
Fund scheme that
endows the
investor with
an additional
income. It is
an ideal
short-term
investment
with no exit
load. By
putting
money in
both debts
and money
market
instruments,
it assures
higher
liquidity and
capital

61
 protection.

d. HDFC CHILDREN’S GIFT FUND

The main aim of this fund is to deliver capital appreciation towards an investment goal like
child’s education or wedding.  It is an open-ended equity-oriented hybrid fund and was
incepted in 2001.

HDFC CHILDREN’S GIFT FUND

SL Name Investment Risks Retur

No. of the Objective ns (In
fund 5
years
)

1 HDF The overall Mode 17.93

C assets will be rately %
Childr mostly High
en’s invested in
Gift equities or
Fund equity-
oriented
instruments.
Hence, the risk
factor could be
on the higher
side. To
counter the
risks, the fund
manager
sometimes
invests the
remaining
amount in
debts or
money market
instruments
too.

e. HDFC RETIREMENT SAVINGS FUND

This scheme allows you to invest towards a retirement savings fund that will serve as fixed
monthly income or a corpus (investment + gains) post-retirement. It invests in a combination
of assets like equities, debts and money market instruments. All the below plans come with a
5-year lock-in period.
This fund is categorized as per individual financial goal after retiring.

HDFC RETIREMENT SAVINGS FUND

62
 SL Name of Investment Risks Returns
No the fund Objective (In 5
. years)

1 HDFC It invests Moderatel NA (as

Retiremen mainly in y High the
t Savings equities and scheme
Fund- equity-oriented was
Equity shares. All of launche
Plan these d in
contribute to 2016)
the lumpsum
that will serve
as
pension/incom
e for you.  

2 HDFC This scheme Moderatel NA (as

Retiremen invests in a y High the
t Savings mix of debt scheme
Fund- and equity was
Hybrid- instruments. launche
Equity After age 60, d in
Plan you can 2016)
redeem the
entire money
or in the form
of monthly
pensions.

3 HDFC This is a Moderatel NA (as

Retiremen balanced y High the
t Savings retirement scheme
Fund- savings fund was
Hybrid- that invest launche
Debt Plan predominantly d in
in debt 2016)
securities and
the remaining
in equities.

f. HDFC FIXED MATURITY PLANS

The Fixed Maturity Plans (FMPs) that the fund house offers mainly capitalize in government
securities like bonds and debt markets. They suit investors with low risk appetite and are
close-ended funds.  

HDFC FIXED MATURITY PLANS

SL Name of Investmen Risks Returns

No the fund t Objective (In 5

63
 . years)

1 Some of the Make Low to NA

FMPs by returns at moderately
HDFC little risk low
Mutual from bonds
Fund are and debt
HDFC FMP markets.
1434D May
2018 (1),
HDFC FMP
1181D
April 2018
(1), HDFC
FMP 1146D
April 2018
(1), HDFC
FMP 1177D
March 2018
(1), HDFC
FMP 1145D
March 2018
(1), HDFC
FMP 1147D
March 2018
(1) and so
on. In fact,
there are
166 fixed
maturity
plans
offered by
HDFC
mutual
fund.

g. HDFC EXCHANGE TRADED FUNDS

ETFs or Exchange Traded Funds by HDFC Mutual Fund are mutual funds that are traded on
the stock market. Investors enjoy more liquidity and it also has lower expense ratio compared
to other fund types.

HDFC ETFs

SL Name Investment Risks Returns

No. of the Objective (In 5
fund years)

1 HDFC Deliver Moderately 2.57%

Gold returns High
ETF proportional
to that of
gold

2 HDFC Deliver Moderately NA (As

64
 Nifty returns close High the
50 to that of scheme
ETF NIFTY- was
represented launched
returns in 2015)

3 HDFC Deliver Moderately NA (As

Sensex returns close High the
ETF to that of scheme
SENSEX- was
represented launched
returns in 2015)

h. RAJIV GANDHI EQUITY SAVINGS SCHEME

Started in the honor of our late Prime Minister, the Rajiv Gandhi Equity Savings Scheme
(RGESS) is a closed-ended equity investment plan. You get immense tax perks as well as
exposure to capital markets.

HDFC RAJIV GANDHI EQUITY SAVINGS SCHEME

SL Name of Investment Risk Returns

No. the fund Objective s (In 5
years)

1 HDFC To deliver long Low NA

Focused term capital
Equity appreciation
Fund – from a portfolio
Plan B of Suitable
Securities as
mentioned in
Rajiv Gandhi
Equity Savings
Scheme

2 HDFC To deliver long High NA

Focused term capital
Equity appreciation
Fund – from a portfolio
Plan A of Suitable
Securities as
mentioned in
Rajiv Gandhi
Equity Savings
Scheme

3 HDFC To deliver long High NA

Rajiv term capital
Gandhi appreciation by
Equity investing in
Savings Securities
Scheme – mentioned in

65
 Series 2 Rajiv Gandhi
Equity Savings
Scheme

i.AL ADVANTAGE FUND

6. This is for investors seeking the benefit of double advantage of regular income as well
as capital appreciation.

HDFC DUAL ADVANTAGE FUND

S Name of Investme Risks Return

L the fund nt
N Objective s (In 5
o. years)

1 HDFC To earn Modera NA

Dual you te
Advanta income
ge Fund from debt
– Series and
III – money
1224D market
instrument
s with the
same or
earlier
maturity
dates than
that of the
scheme.

2 HDFC Deliver Modera NA

Dual income by te
Advanta investing
ge Fund in debt
– Series and
III – money
1267D market
instrument
s with
same or
earlier
maturity
dates than
that of the
scheme.

3 HDFC Focus on Modera

Dual debt and te
Advanta money
ge Fund market
– Series investmen
III – ts of the
1304D same

66
 maturity
period as
that of the
scheme to
deliver
income

4 HDFC Invests in Modera NA

Dual money te
Advanta market
ge Fund and debt
– Series securities
II – of the
1099D same
maturity
period as
that of the
scheme to
earn
income
from it

5 HDFC Aims to Modera NA

Dual provide te
Advanta you
ge Fund steady
– Series income by
II – investing
1160D in money
market
and debt
securities
of the
same
maturity
period as
that of the
scheme

6 HDFC Same as Modera NA

Dual above te
Advanta
ge Fund
– Series I
– 1100D

7 HDFC Same as Modera NA

Dual above te
Advanta
ge Fund
– Series
II –
1111D

67
j. CAPITAL PROTECTION ORIENTED SCHEMES
This is a scheme mainly generate returns from debt market investments (with fixed maturity
periods).

HDFC CAPITAL PROTECTION ORIENTED SCHEMES

SL Name of Investment Risks Returns

No. the fund Objective (In 5
years)

1 HDFC Capital Low NA

CPO – III – protection by
1173D investing in debt
January and/or money
2015 market that
matures on or
before the
scheme

2 HDFC Safety of Low NA

CPO – III – invested amount
1207D guaranteed by
December investing in debt
2014 and/or money
market that
matures on or
before the
scheme

3 HDFC Capital Low NA

CPO-III- protection
1100D
October
2014

4 HDFC Capital Low NA

CPO-II- protection
36M May
2014

5 HDFC Capital Low NA

CPO – II – protection
36M
February
2014

k. FUND OF FUND SCHEMES

HDFC FUND OF FUND SCHEMES

68
SL Name Investmen Risks Return
No of the t Objective s (In 5
. fund years)

1 HDFC The Moderatel 8.62%

Dynami purpose of y High
c PE this
Ratio dynamic
FoF fund of the
fund is to
attain long-
term capital
appreciatio
n by
allocating
assets
between
definite
equity and
debt plans
from the
HDFC fund
house
itself. It is
suitable for
those who
want to
invest in
different
asset
classes
based on
PE Ratios.

2 HDFC The risk of Moderatel 1.88%

Gold HDFC y High
Fund Gold Fund
tends to fall
on the
riskier side.
This is
because
they try to
deliver
capital
appreciatio
n investing
in HDFC
Gold ETF
units,
which is
subject to
market
risks. It is
an open-
ended
scheme that
was started
in 2011.
They
usually put
money in

69
 gold
bullion of
0.995
fineness.

l. ANNUAL INTERVAL FUND – SERIES 1

HDFC ANNUAL INTERVAL FUND – SERIES I

SL Name Investment Risks Returns

No. of the Objective (In 5
fund years)

1 HDFC This is an Moderately NA

Annual interval income Low
Interval fund and carries
Fund – low risk. It is
Series 1 because they
– Plan make returns by
A, B investing in
government
bonds, debt
securities, and
money market
instruments,
assuring absolute
capital
protection. But
they only invest
in those
securities that
mature on or
before the next
Specified
Transaction
Period opens.

m. HDFC CANCER CURE FUNDS

HDFC CANCER CURE FUNDS

S Name Investment Risks Return

L of the Objective s (In 5
N fund years)
o.

1 HDFC This plan Moderatel NA

Charity makes y Low
Fund earnings by
For using the

70
 Cancer arbitrage
Cure – opportunities
Arbitrag between cash
e Plan and
derivative
market
(anything
derived from
an
asset/contract
). They do
this by
investing in
debt and
money
market
instruments.

2 HDFC To earn by Moderate NA

Charity investing in
Fund government
For bonds,
Cancer securities,
Cure – and money
Debt market
Plan instruments
after
maturity.

Minimum initial
investment for both plans is
Rs. 50,000. They are
closed-ended and viewed
as separate portfolios.

Fund Managers in HDFC Mutual Fund 

Mr. Prashant Jain

He is the Executive Director & Chief Investment Officer with 2 decades of industrial
experience in research and fund management.
Mr. Chirag Setalvad
With 11 years of experience in asset management and focused research in equity and equity-
oriented funds, Mr. Chirag is the Senior Fund Manager of HDFC.
Mr. Shobhit Mehrotra
With dual role of Credit Head and Senior Fund Manager, he has pushed the AMC to great
heights with his 18 years of experienced garnered in the field of credit rating and fixed
income markets.

71
Mr. Vinay R. Kulkarni
A Senior Fund Manager with 2 decades of industrial experience in equity funds, he has a
great track record as an asset manager.
Mr. Anil Bamboli, Mr. Srinivas Rao Ravuri, and Mr. Anupam Joshi are other renowned
names in the mutual fund industry from the HDFC fund house.

7.out the fund house

HDFC has had a long and inspiring journey and is currently one of the largest financial
institutions in India. Started out mainly as a company specializing in loans, it now boasts of
numerous subsidiaries, of which HDFC Mutual Fund is one. HDFC Mutual Fund was
launched on 30th June 2000 as a trust as per the provisions of the Indian Trusts Act, 1882.
HDFC has been a prominent player and has a proven track record of positive and reliable
fund performance across different market cycles and diverse asset classes. Their main focus
was to set up a solid research-backed infrastructure. Optimal management of portfolio risks
has always been their USP.
The registration code assigned to them by SEBI is MF/044/00/6 – and the HDFC AMC
was born.

72
 CHAPTER NO :4
DATA ANALYSIS, INTERPRETATION &
PRESENTATION
 Survey Analysis

Gender

33%

67%

Male Female

My survey consists of 100 responded of whom 67% are male and 33% are female.

72
 1) What is your annual income?

Salary Range Number of Respondent

Below 1 lakh 25
Between 1lakh-3 lakh 32
Between 3lakh-5 lakhs 25
Above 5 lakhs 18
Total 100

TABLE NO: (5.1)

35

30

25
No of respondent

20

15

10

0
below 1 lakhs between 1 lakhs - 3 between 3 lakhs- 5 above 5 lakhs
lakhs lakhs

Salary range

Column2

CHART NO (5.1)

Interpretation:

Out of 100 respondent, 25 people range was below 1 lakh, 32 people salary range
between 1-3 lakhs, 25 people salary range was between 3-5 lakhs & 18 people salary
was above 5 lakh

73
 2) In which different kind of investment have you invested?

Different investment option No of Respondent

Saving A/c 22
Fixed Deposit 15
Insurance 29
Mutual funds 22
Real Estate 12
Total 100

TABLE NO: (5.2)

120

100
12

80
22
No of resondents

60
29

40

15
20
22

0
Different investment option

Saving A/c Fixed Deposit Insurance Mutual fund Real Estate

CHART NO: (5.2)

Interpretation:

Out of 100 respondent, 22 people invest in saving A/c, 15 people invest in fixed deposit,
29 people invest in Insurance, 22 people invest in Mutual fund & 12 people invest in real
estate.

74
 3) What is your risk profile?

Risk profile No. of respondents

Innovator 33
Moderate 21
Risk adverse 46
Total 100

TABLE NO: (5.3)

Chart Title
60

50
50

40
No of respondents

33

30

21
20

10

0
Innovator Moderate Risk Adverse

CHART NO: (5.3)

Interpretation:

The 100 respondents have different risk profile, 25 respondent risk profile were
moderate, 25 of them have a risk profile of innovator, and 50 of them select their risk
profile as risk adverse.

4) Are you aware of Mutual funds and its Operations?

75
 Yes No
74% 26%

26%

74%

Yes No

CHART NO: (5.4)

Interpretation:

On of the sample size for this survey, 100 % form that 74% respondent were aware about
the mutual funds and its operation and 26% were not aware.

5) Do you invest in Mutual Funds?

76
 Yes NO
65% 33%

TABLE NO: (5.5)

35%

65%

Yes No

CHART NO: (5.5)

Interpretation:

Out of 100% respondent 65% respondent that are aware about mutual fund invest in
mutual funds and 35% did not invest in mutual funds.

6) Reason for not investing in Mutual Fund. Answer if applicable?

77
 Reason for not investing in mutual No of respondents
funds
Not aware 27
Higher Risk 37
Not any specific reason 36
Total 100

TABLE NO: (5.6)

reason for not investing in mutual funds

40
37
36
35

30
27
25

20

15

10

5
0 0
0
Not aware Higher Risk Not any specific reason

CHART NO: (5.6)

Interpretation:

The reason behind 100 respondents didn’t invest in mutual funds were-

27 didn’t invest as they were not aware about the mutual fund’s operation, 37 of them
did not invest as they find the risk were very high, 36 don’t have any specific reason.

7) With which company do you invest in Mutual Funds?

78
 Mutual funds companies No of respondent

HDFC 29

ICICI 41

Other 30

Total 100

TABLE NO: (5.7)

Chart Title

Other

ICICI

HDFC

0 5 10 15 20 25 30 35 40 45

Series 3

CHART NO: (5.7)

Interpretation:

Out of 100 respondents that have invested in mutual funds, 29% respondents have
invested in HDFC, 41% respondent have invested in ICICI and 30% respondent prefer
other company.

79
 8) Would you like or prefer to invest in ICICI Mutual funds instead of HDFC
Mutual fund?
Yes No
62% 38%

TABLE NO: (5.8)

38

62

Yes No
CHART NO: (5.8)

Interpretation:

Form 100 respondent 62 respondent would prefer to invested in ICICI Mutual funds instead
of HDFC Mutual fund & 38 respondent don’t prefer ICICI Mutual funds instead of HDFC
Mutual fund.

80
 9) What is the investment the duration of invest?

Time Duration N5o of respondent

0-1 year 20
1-2 year 35
2-4 year 28
More than 4 year 15
Total 100

TABLE NO: (5.9)

Chart Title
40

35

30

25

20

15

10

0
0-1 year 1-2 year 2-4 year More than 4 year

Series 3

CHART NO: (5.9)

Interpretation:

Out of the 100 respondent that do invest in mutual funds their time duration of
investment were, 15 respondent was above 4 year, 28 of them invested for a time have
invested for a time period of between 2-4 year, 35 respondent invest in mutual funds for
less than a year, and 15 of them invested between 1-2 year of time.

81
 10) What do you feel this companies’ norms, documentations & formalities of ICICI
&HDFC?

Feedback about the procedure of both No of respondent

the companies
Highly satisfied 29
Satisfied 38
Neutral 16
Dissatisfied 4
Total 100

TABLE NO: (5.10)

19
4 29

38

Highly satisfied Satisfied Neutral 4th Qtr

CHART NO: (5.10)

Interpretation:

Out of the 100 respondent that invested in HDFC and ICICI mutual funds, 29
respondents are highly satisfied, 38 respondents are satisfied, 16 respondent are neutral
in opinion, 4 respondent are dissatisfied.

82
 11) According to your which company provides better return?

Mutual fund companies No. of respondents

HDFC 25
ICICI 25
Other 50
Total 100

TABLE NO: (5.11)

Chart Title
60

50

40

30

20

10

0
HDFC ICICI Other

Series 3

CHART NO: (5.11)

Interpretation:

Out of 100 respondent that in invested in mutual funds, 25 of them think HDFC provide
better return,25 of them choose ICICI and 50 of them other companies.

12) Are you satisfied with the return of your Mutual fund investment?

83
 YES NO
62% 38%

TABLE NO: (5.12)

0.62

3.2

yes No

CHART NO:(5.12)

Interpretation:

68% respondents agreed to invest in HDFC instead of ICICI.

13) If get chance you would like to shift to any other Mutual fund?

84
 YES NO
39% 61%

CHART NO: (5.13)

0.39

3.2

Yes No

CHART NO: (5.13)

Interpretation:

Out of 100 respondent 39% of respondent say yes to invest in mutual fund if their get
and chance.

85
 CHAPTER NO 6

FINDINGS, SUGGESTION & CONCLUSION

6.1 Finding

6.2 suggestion

6.3 conclusion
 FINDING

In my research I have founded following things: -

1) Investors have more faith in HDFC 's mutual funds.

2) As the age increases investors are much satisfied, see more risk & become more
risk adverse.

3) Old people & Widows prefer lower risk.

Investors are not highly satisfied by company rules & employee behavior

Investors think that HDFC provides better returns than ICICI.

86
 SUGGESTIONS

I n my study I have found some limitations. For that I can suggest both
companies’ suggestions or areas of improvement: -

1) ICICI bank should try to provide better return to its investors as compare to
HDFC.

2) Both companies should try to invest in better securities for better profits.

3) Both companies should try to satisfy their customer by better customer

service or by improving customer relationship management.

4) Companies should try to make people initiative towards risk.

I
5) Investors should be made fully aware of the concept of mutual funds & all
the term and conditions.

6) It should emphasize in advertising as it is the tool to position and brand in the

mind sets of customers.

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 CONCLUSION

To conclude the researcher can say that mutual fund is very much profitable tool for
investment becau se of its low cost of acquiring fund, tax benefit, and diversification of
profits & reduction of risk. Many investors who invested in mutual fund have invested
with HDFC and they also think that it provides better returns than ICICI. There is also an
effect of age on mutual fund investors like; old people & widows want regular returns
than capital appreciation. Companies can adopt new techniques to attract more
& more investors. In my study the researcher was supposed to do comparative analyses the
mutual fund of HDFC & ICICI and researcher had found that people consider H DFC
better than ICICI. But ICICI have also respondents and it can increase its investors by
improving itself in some terms.

1) To conclude we can say mutual fund is a best investment vehicle for old &
widow, as well as to those who want regular returns on their investment.
2) Mutual fund is also better and preferable for those who want their capital
appreciation.
3) Both the companies are having considerable achievement i n mutual funds.
4) There are also so many competitors involved t h o s e effect on both the
companies.

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BOOKS: -

ICICI & HDFC Brochure

Mutual Funds in Indian (D.V. Ingle)

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WEBSITE S: -
https://www.icicipruamc.com
https://www.hdfcfund.com
https://www.scribd.com
https://link.springer.com
https://www.academia.edu

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 Questions

SURVEY FOR PROJECT ON COMPARATIVE STUDY OF

MUTUAL FUNDS OF ICICI & HDFC.

Dear Sir/ Madam I am conducting a survey on Comparative study of mutual

funds of ICICI & HDFC. This survey is being undertaken purely for
academic purpose & the data collected shall be used for no other purpose. I
shall thankful to you to give your few minutes to me for answering my
question below:

PERSONAL DETAIL:

Name: ___________________________________
Gender: Male Female
Age: _______
Occupation: _________________________

14) Do you invest in Mutual Funds?

Yes No

15) With which company do you invest in Mutual Funds?

HDFC ICICI other

16) In which different kind of investment have you invested?

Saving A/c Fixed Deposit Insurance
Mutual fund Real Estate.

17) What is your annual income?

1lakh 1-2 lakhs 3-5 lakhs More than 5 lakhs

18) Are you aware of Mutual funds and its Operations?

Yes No

19) What is the investment the duration of invest?

0-1 year 1-2 year 2-4 year More than 4 year

20) Reason for not investing in Mutual Fund. Answer if applicable?

Not aware Higher Risk Not any specific reason

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21) What do you feel this companies’ norms, documentations & formalities?
Satisfied Highly Satisfied Neutral
Dissatisfied Highly Dissatisfied

22) What is your risk profile?

Innovator Moderate Risk Adverse

23) What do you say which company provides better return?

HDFC ICICI Other

24) Would you like or prefer to invest in ICICI Mutual funds instead of HDFC Mutual
fund?
Yes No

25) Are you satisfied with the return of your Mutual fund investment?
Yes No

26) If get chance you would like to shift to any other Mutual fund?
Yes No

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