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A PROJECT REPORT ON MUTUAL FUNDS AT HDFC Submitted by B.K.SWARNALATHADEVI (1424-09-672-034) Under guidance of Ms.P.

ANITHA

ST. PIOUS X P.G. (MBA) COLLEGE FOR WOMEN
(Affiliated to Osmania University) Snehapuri colony, Nacharam, Hyderabad-500076

SUBMITTED TO OSMANIA UNIVERSITY
A Project Report Submitted in Partial Fulfillment for the Award of the Degree of MASTER OF BUSINESS ADMINISTRATION
(2009-2011) 1

CONTENTS
Unit – I
1.1 Introduction 1.2Need of the study 1.3Scope of the study 1.4 objective of the study

Page Numbers
9 14 15 16 17

Unit -II
2.1 Company profile

Unit -III
3.1 Theoretical frame work 31

Unit –IV
4.1 Analysis and interpretation 55

Unit –V
5.1 Conclusions 5.2 Suggestions 77 78 79

Unit- VI
6.1 Bibliography

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ANNEXURE – I DECLARATION
I hereby that this Project Report titled “MUTUAL FUNDS” in “HDFC ” has been carried out by me towards the partial fulfillment of the award of MASTER OF BUSINESS ADMINISTRATION in department of Business Management, ST. PIOUS X P.G. (MBA) COLLEGE FOR WOMEN, O.U., Hyderabad, in the academic year2009-2011. This is my original work and result embodied in this project work has not been submitted to any other university or institution for the award of any degree as per my knowledge and believe.

B.K.SWARNALATHADEVI H.No. 348 CHINTAL BAZAR, BOLARUM, SECUNDERABAD. Pin code 500076. B.K.SWARNALATHADEVI

Name and Address of the Student: Student:

Signature of the

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ANNEXURE – II CERTIFICATION
This is to certify that the Project Report title “The study on MUTUAL FUNDS” at HDFCsubmitted in partial fulfilment for the award of MBA Programme of Department of Business Management, O.U. Hyderabad, was carried out by

B.K.SWARNALATHADEVI under my guidance. This has not been submitted to any other University or Institution for the award of any degree/diploma/certificate.

Name and address of the Guide

Signature of the Guide

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ANNEXURE – III ACKNOWLEDGEMENT
I owe to great many people for the successful completion of this project work. Firstly, I would like to thank “HDFC BANK”, HYDERABAD for giving me an opportunity to undergo a project study. My indebtedness is due to my guide Shri.A.RAVINDRANATH, SM (P), (ISG). I would like to thank Shri.N.CHANDRA MOULI, SR.SUPERINDENT & Kumari SUCHARITHA.MBA (FINANCE), (NSCI TRANIEE) HDFC for having spared their valuable time, guidance and suggestion for project. And I express my heartful thanks to those respondents, who have whole heartedly supported me directly or indirectly in finishing this interesting project.

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LIST OF TABLES
S. NO 1 TABLE NAME SBI EQUITY FUND – GROWTH & DIVIDEND ING VYSA EQUITY FUND – GROWTH & DIVIDEND UTI EQUITY FUND – GROWTH & DIVIDEND HSBC EQUITY FUND – GROWTH & DIVIDEND HDFCPRUDENTIAL MUTUAL FUND EQUITY FUND – GROWTH & DIVIDEND ABN AMRO EQUITY FUND – GROWTH & DIVIDEND NET ASSET VALUE HISTORY PAGE NO. 51

1.1

53

1.2 1.3 1.4

56 58 60

1.5 1.6

63 65

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5 1.8 PERFORMANCE CHART OF GROWTH 66 7 .2 54 1. 1 SBI EQUITY FUND – GROWTH & DIVIDEND ING VYSA EQUITY FUND – GROWTH & DIVIDEND UTI EQUITY FUND – GROWTH & DIVIDEND HSBC EQUITY FUND – GROWTH & DIVIDEND HDFCPRUDENTIAL MUTUAL FUND EQUITY FUND – GROWTH & DIVIDEND ABN AMRO EQUITY FUND – GROWTH & DIVIDEND PERFORMANCE CHART OF DIVIDEND 52 1.6 1.7 56 59 61 64 66 1.LIST OF GRAPHS S. NO GRAPH NAME PAGE NO.3 1.4 1.

CHAPTER 1 INTRODUCTION 8 .

They monitor the performance and compliance of SEBI Regulations by the mutual fund. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. The trustees of the mutual fund hold its property for the benefit of the unit holders. Government allowed public sector banks and institutions to set up mutual funds. The objectives of SEBI are to protect the interest of investors in securities and to promote the development of and to regulate the securities market. A mutual fund is set up in the form of a trust. Unit Trust of India was the first mutual fund set up in India in the year 1963. In early 1990s. Securities and exchange Board of India (SEBI) Act was passed. trustees. The trust is established by a sponsor or more than one sponsor who is like promoter of a company. In the year 1992. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time.Introduction to Mutual Fund Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document. Custodian. 9 . A mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public. which has sponsor. Asset Management Company (AMC) approved by SEBI manages the funds by making investments in various types of securities. Investors of mutual funds are known as unit holders.The trustees are vested with the general power of superintendence and direction over AMC. The mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. asset Management Company (AMC) and custodian. The profits or losses are shared by the investors in proportion to their investments. holds the securities of various schemes of the fund in its custody. who is registered with SEBI.

If fund holdings increase in price but are not sold by the fund manager. SEBI has also issued guidelines to the mutual funds from time to time to protect the interests of investors. 3. 2. There is no distinction in regulatory requirements for these mutual funds and all are subject to monitoring and inspections by SEBI.As far as mutual funds are concerned. SEBI notified regulations for the mutual funds in 1993. The regulations were fully revised in 1996 and have been amended thereafter from time to time.The primary advantage of funds is the professional management of your money. You can then sell your mutual fund shares for a profit. Advantages of Mutual Funds:  Professional Management . If the fund sells securities that have increased in price. All 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 You can make money from a mutual fund in three ways: 1. mutual funds sponsored by private sector entities were allowed to enter the capital market. Thereafter. the fund's shares increase in price. Income is earned from dividends on stocks and interest on bonds. SEBI formulates policies and regulates the mutual funds to protect the interest of the investors. Investors purchase funds because 10 . the fund has a capital gain.

The idea behind diversification is to invest in a large number of assets so that a loss in any particular investment is minimized by gains in others.By owning shares in a mutual fund instead of owning individual stocks or bonds. A mutual fund is a relatively inexpensive way for a small investor to get a fulltime manager to make and monitor investments.  Simplicity – Minimum investment is small.  Diversification .Because a mutual fund buys and sells large amounts of securities at a time. Because funds have small holdings in so many different companies.It's possible to have too much diversification.they do not have the time or the expertise to manage their own portfolios. high returns from a few 11 .   Disadvantages: Dilution .Just like an individual stock.  Economies of Scale . your risk is spread out. its transaction costs are lower than what an individual would pay for securities transactions. a mutual fund allows you to request that your shares be converted into cash at any time.  Liquidity .

regions of investments and investment strategies. At the fundamental level. In general. there are three varieties of mutual funds: 1) Equity funds (stocks) 2) Fixed-income funds (bonds) 3) Money market funds Money Market Funds The money market consists of short-term debt instruments. the higher the risk of loss. all funds have some level of risk .When making decisions about your money. Although some funds are less risky than others. Each fund has a predetermined investment objective that tailors the fund's assets.  Taxes . mostly Treasury bills. DIFFERENT TYPES OF FUNDS: It's important to understand that each mutual fund has different risks and rewards.it's never possible to diversify away all risk. the higher the potential return.investments often don't make much difference on the overall return. fund managers don't consider your personal tax situation. 12 .

" and "income" are synonymous. The weighting might also be restricted to a specified maximum or minimum for each asset class. A similar type of fund is known as an asset allocation fund. The strategy of balanced funds is to invest in a combination of fixed income and equities. the terms "fixedincome. Bond funds are likely to pay higher returns than certificates of deposit and money market investments. Objectives are similar to those of a balanced fund. When referring to mutual funds. but these kinds of funds typically do not have to hold a specified percentage of any asset class. A typical balanced fund might have a weighting of 60% equity and 40% fixed income. 13 . but bond funds aren't without risk." "bond.Bond/Income Funds Income funds are named appropriately: their purpose is to provide current income on a steady basis. Balanced Funds The objective of these funds is to provide a balanced mixture of safety. income and capital appreciation.

A way to understand the universe of equity funds is to use a style box. Generally. The idea is to classify funds based on both the size of the companies invested in and the Investment style of the manager 14 .Equity Funds Funds that invest in stocks represent the largest category of mutual funds. the investment objective of this class of funds is long-term capital growth with some income. however. an example of which is below. There are. many different types of equity funds because there are many different types of equities.

The Value of Your Fund Net asset value (NAV). 15 . Global funds invest anywhere around the world. NAV per share is the value of one share in the mutual fund. Index Funds The last but certainly not the least important are index funds. is the value of a mutual fund. An investor in an index fund figures that most managers can't beat the market.Global/International Funds An international fund (or foreign fund) invests only outside your home country. and it is the number that is quoted in newspapers. including your home country. An index fund merely replicates the market return and benefits investors in the form of low fees. which is a fund's assets minus liabilities.

you pay the current NAV per share plus any sales frontend load. the fund will pay you NAV less any back-end load. There are many entities involved and the diagram below illustrates the organizational set up of a mutual fund: Organization of a Mutual Fund 16 . When you sell your shares.When you buy shares.

Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified. professionally managed basket of securities at a relatively low cost. debentures and other securities. The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them. The money thus collected is then invested in capital market instruments such as shares. The flow chart below describes broadly the working of a mutual fund: 17 .CONCEPT A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal.

18 .

19 . Column charts are used to reflect the portfolio risk and return. Each scheme is calculated in term of their risk and return using different performance measurement theories.SCOPE OF THE STUDY: The study is limited to the analysis made on two major types of schemes offered by six banks. The reasons for such performance in immediately analyzed in the commentary.

OBJECTIVES OF THE STUDY: • To understand what Mutual fund companies are. • To understand the investment strategies followed by each company. HYPOTHESIS The Market data that has been used to see whether the risk and return calculated can be used has an indicator to the investor to minimize the risk and maximize the returns on its investment. SBI. HDFC. HSBC & ING VYSYA BANK. • To understand Mutual fund companies viz. 20 . • To understand each company performance basing on weekly wise data starting from Monday. UTI. ABN AMRO.

RESEARCH METHODOLOGY: For. The collection of data is done through two principles sources viz i. the data collected from primary and Secondary has sanitized edited and presented in the from of tables and statements. ii. the purpose of the study. the data collected through conducting personal interview 21 . In the study. The analysis of the data has been made with the help of certain mathematical techniques lie percentages etc. Some of the information had been verified or supplemented with personal observation. Primary Data Secondary Data PRIMARY DATA It is the information collected directly without any reference. it mainly interviews with concerned officers and staff either individually or collectively. Where ever feasible and opportiate graphs and diagrams are used.

The data for study purpose is taken on weekly basis . newspapers. HSBC. SECONDARY DATA: The data that is used in this project is of secondary nature. books.. etc.The data taken into consideration is every Monday.e. The data has been collected from secondary sources such has various websites. journals.with the officer of the India bulls. NATIONALISED BANKS: SBI. METHOD OF STUDY: The data collected for the two sectors are of three months data i. Nov 2008 – Jan 2009. HDFC 22 . ING VYSYA CORPORATE BANKS: ABN AMRO. UTI.

as primary data was not accessible. • The study is limited only to the analysis of different schemes and its suitability to different investors according to their risk-taking ability. • The study is based on secondary data available from monthly fact sheets. • The study is limited by the detailed study of various schemes. offer documents. 23 . web sites. magazines and newspapers etc. due to which the study may not be detailed in all aspects.LIMITATIONS OF THE STUDY: • The study is conducted in short period.

CHAPTER 2 INDUSTRY PROFILE 24 .

Bank of India and Punjab National bank have entered into the field. the Mutual fund Industry has been monopolized by the Unit Trust of India ever since 1963. Master share etc. It is the country ‘s largest mutual fund company with over 25 millions investors 25 . Indian Bank. Master gain. The Unit Trust of India has introduced huge portfolio of schemes like unit64. Now.MUTUAL FUNDS: Phases of mutual funds in India In India. These institutions have successfully launched a “variety of schemes to meet the diverse needs of millions of small investors. Canara Bank. the commercial banks like the state bank of India. To add to list are the LIC of India and the private sector banks and other financial institutions.

000crores.55. 26 . 2925 crores deployed in its 16 schemes servicing over 2. The mutual fund industry in India started in 1963 with the formation of Unit Trust of India. 15. At the Initiative of the government of India and Reserve bank. The total corpus of the 13 other mutual funds in the country is less than Rs.5 million Shareholders.and a corpus exceeding Rs.000 crores . The history of mutual funds In India can be broadly divided into four distinct Phases.accounting for nearly 10% of the country’s stock market capitalization. The SBI fund has a corpus of Rs.

6. The first scheme Launched by UTI scheme 1964. SBI Mutual funds was the first non-UTI Mutual fund established in June 1987 followed By Can Bank Mutual Fund (Des87). Second phase-1987-1993 (Entry of public sector Funds) 1987 marked the entry of non-UTI. At the end of 1988 UTI had Rs. 700 crores of assets under management. In 1987 UTI was delinked from the RBI and the Industrial Development of India (IDBI). Punjab National Bank 27 . public sector mutual funds set up by public sector Banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC).First phase-1964-87 Unit trust of India (UTI) was established on 1963 by an act of parliament.Took over the regulatory and administrative control in place Of RBI. It was up the Reserve Bank of India and functioned under the Regulatory and administrative control of The Reserve Bank of India.

47. Bank of India (Jun 90).LIC Established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990. Third phase-1992-2003(Entry of private sector Funds) With the entry of private sector funds in 1993. Bank of Baroda Mutual Fund (oct92). 28 .Mutual Fund (Aug 89). The erstwhile kothari pioneer (Now merged with Franklin temple ton) was the First private sector mutual fund registered In July 1993. the mutual fund Industry had assets under management of Rs. expect UTI were to be Registered and governed. Giving the Indian investor a wide choice of fund families. under which all mutual funds. At the end of 1993. 1993 was the Year in which the first Mutual fund Regulation came into being. 004 crores. Also. a new era started in the Indian mutual fund Industry. Indian Bank Fund (Nov89).

Assured return and certain other schemes. 29. 29 . PNB.835 crores as at the end of January 2003. BOB and LIC. sponsored by SBI. The industry now functions under the SEBI (Mutual Funds) Regulation 1996 Fourth Phase –since February 2003 In February 2003. One is the specific under taking of the Unit trust of India with assets under management Of Rs. The second is UTI mutual fund Ltd. functioning under an administrator and the rules framed by government of India and does not come under the purview of the mutual fund regulations.The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulation in 1996. the assets of US 64 schemes. The specified under taking of Unit Trust India. following the repeal of the Unit Trust of India Act 1963 was bif-acurated into separate Entities. representing broadly.

conforming to the SEBI Mutual Fund Regulations. the mutual fund industry has entered its current phase of consolidation and growth. 2003. there were 31 funds which manage assets Of Rs 126726 crores under 386 schemes.It is registered with SEBI and functions under the mutual funds Regulations. As the end of October 31. 30 . With the bif-acuration of the Rest while UTI Mutual Fund. and with recent mergers Taking place among different private sector funds.

CHAPTER 3 COMPANY PROFILE 31 .

36.OVERVIEW OF THE HDFC HDFC is India's premier housing finance company and enjoys an impeccable track record in India as well as in international markets.23. The HDFC Group holds 23. a strong market reputation. 455.87 % of the Bank's equity and about 16.46 % of the equity is held by Foreign Institutional Investors 32 . large shareholder base and unique consumer franchise. The paid-up capital as on said date is Rs. With its experience in the financial markets.52.65. As on 31st December. HDFC was ideally positioned to promote a bank in the Indian environment.564 equity shares of Rs. 550 crore.(45. 10/. Its outstanding loan portfolio covers well over a million dwelling units.94 % of the equity is held by the ADS Depository (in respect of the bank's American Depository Shares (ADS) Issue). 27. the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities. 2009 the authorized share capital of the Bank is Rs.640/.each). Since its inception in 1977.

Mr. with service associates in Kuwait. Capoor was Deputy Governor of the RBI HDFC has since emerged as the largest residential mortgage finance institution in the country. 2.096 crores. The net worth of the corporation as on March 31.58. 119 crores.A. The Bank's American Depository Shares (ADS) are listed on the New York Stock Exchange (NYSE) under the symbol 'HDB' and the Bank's Global Depository Receipts (GDRs) are listed on Luxembourg Stock Exchange under ISIN No US40415F2002. Prior to this. Jagdish Capoor took over as the bank's Chairman in July 2001.. 33 . HDFC operates through 75 locations throughout the country with its Corporate Headquarters in Mumbai.(FIIs) and the Bank has about 4. India. Mr.683 shareholders. HDFC also has an international office in Dubai. The corporation has had a series of share issues raising its capital to Rs. 2000 stood at Rs. The shares are listed on the Bombay Stock Exchange Limited and The National Stock Exchange of India Limited.E. Oman and Qatar. U.

Standard Life.000 Cr and Rs. 600. Standard Life is rated 'AAA' both by Moody's and Standard and Poors. 34 .000 Cr respectively. HDFC is rated 'AAA' by both CRISIL and ICRA. is a modern company surviving quite a few changes since selling its first policy in 1825. Standard Life currently has assets exeeding over £70 billion under its manage ment and has the distinction of being accorded "AAA" rating consequently for the past six years by Standard & Poor. 15.STANDARD LIFE Standard Life is Europe's largest mutual life assurance company. Each of the JV player is highly rated and been conferred with many awards. which has been in the life insurance business for the past 175 years. opening offices in other towns and acquiring other similar businesses. The Joint Venture HDFC Standard Life Insurance Company Limited was one of the first companies to be granted licence by the IRDA to operate in life insurance sector. The company expanded in the 19th century from its original Edinburgh premises. These reflect the efficiency with which HDFC and Standard Life manage their asset base of Rs. Similarly.

It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd. Deepak Satwalekar is the MD and CEO of the venture. a leading provider of financial services from the United Kingdom. 35 . is one of India’s leading private life insurance companies.4 % stake and Standard Life has a stake of 18. HDFC is the majority stakeholder in the insurance JV with 81.HDFC Standard Life Insurance Company Ltd was incorporated on 14th August 2000. Mr.6%. which offers a range of individual and group insurance solutions.). India’s leading housing finance institution and The Standard Life Assurance Company. HDFC Standard Life Insurance Company Ltd.

The group solutions have been designed to offer complete flexibility combined with a low charging structure. 2. Innovation: Building a store house of treasures through experiences. In short. Integrity: Honesty and truthful in every action. Values: 1. Vision: • The Most successful and admired life insurance company which means that we are the most trusted company. The company has a range of individual and group solutions. offer the best value for money and set the standards in the industry’. HDFC Standard Life has the financial expertise required to manage your long-term investments safely and efficiently. “The Most Obvious choice for all”. Stick to Principles irrespective of outcome. 36 .Key strengths As a joint venture of leading financial services groups. Transparency. the easiest to deal with. Be just and fair to everyone. which can be easily customized to specific needs. looking at every product and process through fresh eyes everyday.

Being approach able. Understand customer needs and deliver solutions. 5. To encourage work as fun that contributed to personal and organizational development. Identify strengths and weaknesses accordingly allocate responsibility to achieve common objectives 6. 4. Create an environment of trust and openness. Joy is also derived through simple processes and forms.Customer Centric: Understand customer’s expectations by keeping him as the centre point. Guiding their development through training and support. Know them on a personal front. Customer interest always supreme. radiates simplicity and spreads a sense of joy. Listen actively. understand and arrive at a common objective. Co-operate and support across departmental boundaries. Team Work: Whole team takes the ownership of the deliverables. 37 . more over lead to results.3. People Care: Genuinely understanding the people we work with. Helping them develop requisite skills to reach their true potential. Consult all involved. Joy and Simplicity: Environment that fosters fun in the form of celebration of individual and team success. Respect for the time of others.

HDFC Mutual Fund. Mumbai . CHUBB. HDFC Deposits. Parekh Marg.T. CIBIL. HDFC Distribution.Com HDFC Asset Management Company Limited (AMC) HDFC Asset Management Company Ltd (AMC) was incorporated under the Companies Act. HDFC Securitisation. Backbay Reclamation. HDFC Bank. on December 10.HDFC Group Companies are: • • • • • • • • • • • • • • HDFC Home Loans. HDFC Centre for Housing Finance. following a review of its overall strategy.400 020. HDFCSL Insurance (Respect Yourself). The registered office of the AMC is situated at Ramon House. 1999. 169. and was approved to act as an Asset Management Company for the HDFC Mutual Fund by SEBI vide its letter dated July 3. the Trustee has appointed the HDFC Asset Management Company Limited to manage the Mutual Fund. HDFC Reality. the Sponsor of Zurich India Mutual Fund. HDFC Intelnet. 25. The present equity shareholding pattern of the AMC is as follows : Particulars Housing Development Finance Corporation Limited Standard Life Investments Limited % of the paid up equity capital 60 40 Zurich Insurance Company (ZIC). had decided to divest its Asset Management business in 38 . HDFC Future Activities.161 crore. Churchgate. H. The paid up capital of the AMC is Rs. In terms of the Investment Management Agreement. 3rd Floor. 1956. 2000. HDFC Securities.

39 . HDFC Growth Fund (HGF). HDFC Gilt Fund (HGILT). HDFC Balanced Fund (HBF). the following Schemes of Zurich India Mutual Fund have migrated to HDFC Mutual Fund on June 19. HDFC Long Term Advantage Fund (HLTAF). HDFC Short Term Plan (HSTP). These Schemes have been renamed as follows: Former Name Zurich India Equity Fund Zurich India Prudence Fund Zurich India Capital Builder Fund Zurich India TaxSaver Fund Zurich India Top 200 Fund Zurich India High Interest Fund Zurich India Liquidity Fund Zurich India Sovereign Gilt Fund New Name HDFC Equity Fund HDFC Prudence Fund HDFC Capital Builder Fund HDFC TaxSaver HDFC Top 200 Fund HDFC High Interest Fund HDFC Cash Management Fund HDFC Sovereign Gilt Fund* *HDFC Sovereign Gilt Fund has been wound up in March 2006 The AMC is managing 24 open-ended schemes of the Mutual Fund viz. On obtaining the regulatory approvals. subject to necessary regulatory approvals. HDFC Children's Gift Fund (HDFC CGF). The AMC had entered into an agreement with ZIC to acquire the said business. HDFC Income Fund (HIF) HDFC Liquid Fund (HLF).India. 2003.

HDFC Quarterly Interval Fund (HQIF) and HDFC Arbitrage Fund (HAF). HDFC Long Term Equity Fund. HDFC Fixed Maturity Plans . HDFC Premier Multi-Cap Fund (HPMCF). HDFC Top 200 Fund (HT200).Series VIII. HDFC Prudence Fund (HPF). HDFC Core & Satellite Fund (HCSF). HDFC Multiple Yield Fund (HMYF). HDFC Floating Rate Income Fund (HFRIF). The AMC is also managing 10 closed ended Schemes of the HDFC Mutual Fund viz. HDFC High Interest Fund (HHIF). Plan 2005 (HMYF-Plan 2005).HDFC Index Fund. HDFC Equity Fund (HEF).Series VII. HDFC Fixed Maturity Plans . 40 . HDFC Cash Management Fund (HCMF). HDFC TaxSaver (HTS).Series V. HDFC Infrastructure Fund. HDFC Capital Builder Fund (HCBF). HDFC Mid-Cap Opportunities Fund. HDFC Multiple Yield Fund . HDFC Fixed Maturity Plans . HDFC MF Monthly Income Plan (HMIP).

A. 2012.Series XI HDFC Fixed Maturity Plans . J. The Certificate of Registration is valid from January 1. Parekh Mr. M. Patel Mr.Series XII. . B. D. The AMC has renewed its registration from SEBI vide Registration No. D. Munjee Dr. Name of Director 1 2 3 4 5 6 7 8 9 10 11 12 Mr. J.HDFC Fixed Maturity Plans . Keshub Mahindra Mr. S. Irani Chairman Vice Chairman Independent Independent Independent Independent Independent Independent Independent Independent Independent Non-executive Category* 41 . Shirish B. Dave Dr. Tarneja Mr. HDFC Fixed Maturity Plans . N. N. 2010 to December 31. 1993. Ram S.Series IX. HDFC Fixed Maturity Plans . S. 2009 to act as a Portfolio Manager under the SEBI (Portfolio Managers) Regulations. Ghosh Dr. Bimal Jalan Mr. D. Sukthankar Mr. Satwalekar Dr. Mehta Mr. M. M.PM / INP000000506 dated December 21. Deepak S.Series X. The AMC is also providing portfolio management / advisory services and such activities are not in conflict with the activities of the Mutual Fund.

2008/2007/2006/2005 at Lipper Fund Awards 2009 (India) for fourth year in a row.Savings Plan won the CNBC . CNBC.TV 18 .Plan 2005 was ranked as ICRA ~ MFR “Five Star Fund” indicating performance among the top 10% in the category of ‘Open Ended Marginal Equity' for the one . HDFC Prudence Fund .year period ending December 31.CRISIL Mutual Fund Awards 2009 HDFC Cash Management Fund . 2008 (from amongst 55 schemes) at ICRA Mutual Fund Awards 2009 HDFC Multiple Yield Fund .CRISIL Mutual Fund of the Year Award 2009 in the ‘Consistent Liquid Fund’ under CRISIL ~ CPR for 42 .Awards: ICRA Mutual Funds Ranking 2009 HDFC Growth Fund was ranked as ICRA ~ MFR “Five Star Fund” indicating performance among the top 10% in the category of Open Ended Diversified Equity Defensive' for the three .Growth Option was awarded the ‘Best Fund over Ten Years’ in the ‘Mixed Asset INR Aggressive’ category (from amongst 6 schemes) for the period ending December 31.Growth Option was once again awarded the ‘Best Fund over Ten Years’ in the ‘Equity India’ Category (from amongst 34/23/18/14 schemes) for the period ending December 31. HDFC Prudence Fund – Growth Option was awarded the ‘Best Fund for over Five years’ in the ‘Mixed Asset INR Aggressive’ category (from amongst 7 schemes) for the period ending December 31.year period ending December 31. 2008 at Lipper Fund Awards 2009 (India). 2008 at Lipper Fund Awards 2009 (Gulf Universe).TV18. 2008 (from amongst 26 schemes) at ICRA Mutual Fund Awards 2009 Lipper Fund Awards 2009 HDFC Equity Fund .

.Savings Plan is the only Scheme to have been awarded under this category Products: Equity / Growth Fund Invest primarily in equity and equity related instruments..com HDFC Bank offers a wide range of commercial and transactional banking services and treasury products to wholesale and retail customers.. Liquid Funds Provide high level of liquidity by investing in money market and debt instruments.CRISIL Mutual Fund of the Year Awards 2009. . Website: www... Senapati Bapat Marg. Debt/ Income Fund Invest in money market and debt instruments and provide optimum balance of yield..outstanding performance for the calendar year 2008 (from amongst 13 schemes) at CNBC TV 18 . REGISTERED OFFICE HDFC Bank House. HDFC Cash Management Fund . Quarterly Interval Fund The primary objective of the Scheme is to generate regular income through investme. The bank has three key business segments 43 .hdfcbank. Lower Parel. Children's Gift Fund Children's Gift Fund Fixed Maturity Plan Invest primarily in Debt / Money Market Instruments and Government Securities.

c) transform ideas into viable and creative solutions. and to promote home ownership. Organizational Goals HDFC's main goals are to a) develop close relationships with individual households.Business Objectives The primary objective of HDFC is to enhance residential housing stock in the country through the provision of housing finance in a systematic and professional manner. and e) to grow through diversification by leveraging off the existing client base. d) provide consistently high returns to shareholders. 44 . Another objective is to increase the flow of resources to the housing sector by integrating the housing finance sector with the overall domestic financial markets. b) maintain its position as the premier housing finance institution in the country..

a mutual fund can not deviate from its stated objectives at any point of time. Every Mutual Fund is managed by a fund manager. Since the stated investment objective of a mutual fund scheme generally forms the basis for an investor's decision to contribute money to the pool. The capital appreciation and other incomes earned from these investments are passed on to the investors (also known as unit holders) in proportion of the number of units they own.MUTUAL FUND Mutual fund is a trust that pools money from a group of investors (sharing common financial goals) and invest the money thus collected into asset classes that match the stated investment objectives of the scheme. who using his investment management skills and necessary research works ensures much better return than what an Investor can manage on his own. 45 .

i. debentures etc) is reflected in the Net Asset Value (NAV) of the scheme.000 B. he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund). NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors.e. C.e. 100.When an investor subscribes for the units of a mutual fund. The total number of units issued to the investors is equal to 10. 50 (i. Then his total contribution to the fund is Rs. Mutual Fund investor is also known as a mutual fund shareholder or a unit holder.000/10. Any change in the value of the investments made into capital market instruments (such as shares.000 or 10. Then the NAV of this scheme = (A)/(B). Now if an investor 'X' owns 5 units of this scheme E. If the market value of the assets of a fund is Rs. 100. For example: A.000. Number of units held multiplied by the NAV of the scheme) 46 . NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities.00 D.

47 .

Portfolio Diversification Mutual Funds invest in a well-diversified portfolio of securities which enables investor to hold a diversified investment portfolio (whether the amount of investment is big or small). Professional Management Fund manager undergoes through various research works and has better investment management skills which ensure higher returns to the investor than what he can manage on his own. Choice of Schemes Mutual funds provide investors with various schemes with different investment objectives. Less Risk Investors acquire a diversified portfolio of securities even with a small investment in a Mutual Fund. The risk in a diversified portfolio is lesser than investing in merely 2 or 3 securities. Liquidity An investor may not be able to sell some of the shares held by him very easily and quickly. These benefits are passed on to the investors. 4. All material facts are disclosed to investors as required by the regulator. Low Transaction Costs Due to the economies of scale (benefits of larger volumes). 2. Transparency Funds provide investors with updated information pertaining to the markets and the schemes.ADVANTAGES OF MUTUAL FUND 1. 6. These schemes further have different plans/options 7. Investors have the option of investing in a scheme having a correlation between its investment objectives and their own financial goals. whereas units of a mutual fund are far more liquid. 48 . mutual funds pay lesser transaction costs. 5. 3.

Flexibility Investors also benefit from the convenience and flexibility offered by Mutual Funds. Safety Mutual Fund industry is part of a well-regulated investment environment where the interests of the investors are protected by the regulator.8. they may have to take advice from financial planners in order to invest in the right fund to achieve their objectives. 9. For this. Option of systematic (at regular intervals) investment and withdrawal is also offered to the investors in most open-end schemes.Costs Control Not in the Hands of an Investor Investor has to pay investment management fees and fund distribution costs as a percentage of the value of his investments (as long as he holds the units). 3. irrespective of the performance of the fund. Investors can switch their holdings from a debt scheme to an equity scheme and vice-versa. 49 . Investors have no right to interfere in the decision making process of a fund manager. Difficulty in Selecting a Suitable Fund Scheme Many investors find it difficult to select one option from the plethora of funds/schemes/plans available. which some investors find as a constraint in achieving their financial objectives. No Customized Portfolios The portfolio of securities in which a fund invests is a decision taken by the fund manager. All funds are registered with SEBI and complete transparency is forced. 2.  DISADVANTAGES OF MUTUAL FUND 1.

The fund size (corpus) of an open-end fund is variable (keeps changing) because of continuous selling (to investors) and repurchases (from the investors) by the fund. to protect the interests of the investors. when an investor wants to sell his units. However. After the closure of the offer.TYPES OF MUTUAL FUNDS General Classification of Mutual Funds Open-end Funds / Closed-end Funds Open-end Funds Funds that can sell and purchase units at any point in time are classified as Open-end Funds. SEBI provides investors with two avenues to liquidate their positions: 50 . An open-end fund is not required to keep selling new units to the investors at all times but is required to always repurchase. The corpus of a Closed-end Fund remains unchanged at all times. buying and redemption of units by the investors directly from the Funds is not allowed. Closed-end Funds Funds that can sell a fixed number of units only during the New Fund Offer (NFO) period are known as Closed-end Funds. The NAV of an open-end fund is calculated every day.

A load fund may impose following types of loads on the investors: • Entry Load – Also known as Front-end load. 51 . the percentage of exit load reduces as the investor stays longer with the fund. Load Funds/no-load funds Load Funds Mutual Funds incur various expenses on marketing. Exit load is deducted from the redemption proceeds to an outgoing investor. these charges are imposed on an investor when he redeems his units (exits from the scheme). This type of load is known as Contingent Deferred Sales Charge. the corpus of the Fund and its outstanding units do get changed. advertising. Entry load is deducted from the investor’s contribution amount to the fund. Many funds recover these expenses from the investors in the form of load. • Exit Load – Also known as Back-end load. portfolio churning. These funds are known as Load Funds. distribution. • • Deferred Load – Deferred load is charged to the scheme over a period of time. The trading is generally done at a discount to the NAV of the scheme. In this case. fund manager’s salary etc. it refers to the load charged to an investor at the time of his entry into a scheme. Contingent Deferred Sales Charge (CDSS) – In some schemes. • • The NAV of a closed-end fund is computed on a weekly basis (updated every Thursday).• Closed-end Funds are listed on the stock exchanges where investors can buy/sell units from/to each other. Closed-end Funds may also offer "buy-back of units" to the unit holders.

No-load Funds All those funds that do not charge any of the above mentioned loads are known as Noload Funds. Sale of units of an equity oriented fund is subject to Securities Transaction Tax (STT). In India. All openend equity oriented funds are exempt from distribution tax (tax for distributing income to investors). Long term capital gains and dividend income in the hands of investors are taxfree. except open-end equity oriented funds are liable to pay tax on distribution income. Profits arising out of sale of units by an investor within 12 months of purchase are categorized as short-term capital gains. all funds. Non-Tax-exempt Funds Funds that invest in taxable securities are known as Non-Tax-exempt Funds. which are taxable. STT is deducted from the redemption proceeds to an investor 52 . Tax-exempt Funds/ Non-Tax-exempt Funds Tax-exempt Funds Funds that invest in securities free from tax are known as Tax-exempt Funds.

 BROAD MUTUAL FUND TYPES 53 .

Growth Funds invest in those companies that are expected to post above average earnings in the future. fund managers aspire for maximum capital appreciation and invest in less researched shares of speculative nature. There are following types of speciality funds: 54 . are comparatively riskier than diversified funds.Speciality Funds have stated criteria for investments and their portfolio comprises of only those companies that meet their criteria. Because of these speculative investments Aggressive Growth Funds become more volatile and thus. but they also provide higher returns than other funds. In the order of decreasing risk level. Criteria for some speciality funds could be to invest/not to invest in particular regions/companies.Growth Funds also invest for capital appreciation (with time horizon of 3 to 5 years) but they are different from Aggressive Growth Funds in the sense that they invest in companies that are expected to outperform the market in the future.1. o Speciality Funds . there are following types of equity funds: o Aggressive Growth Funds . o Growth Funds . Equity Funds Equity funds are considered to be the more risky funds as compared to other fund types. Without entirely adopting speculative strategies. are prone to higher risk than other equity funds.e. for 3 years or more. Speciality funds are concentrated and thus. It is advisable that an investor looking to invest in an equity fund should invest for long term i.In Aggressive Growth Funds. There are different types of equity funds each falling into different risk bracket.

Market Capitalization of a company can be calculated by multiplying the market price of the company's share by the total number of its outstanding shares in the market. The shares of Mid-Cap or Small-Cap Companies are not as liquid as of Large-Cap Companies which gives rise to volatility in share prices of these companies and consequently. Sector Funds: Equity funds that invest in a particular sector/industry of the market are known as Sector Funds.Foreign Securities Funds: Foreign Securities Equity Funds have the option to invest in one or more foreign companies. Market capitalization of Mid-Cap companies is less than that of big. The exposure of these funds is limited to a particular sector (say Information Technology.1. blue chip companies (less than Rs. a minimum 55 . These funds are well diversified and reduce sector-specific or companyspecific risk. like all other funds diversified equity funds too are exposed to equity market risk. 500 crores. However. 500 crores) and Small-Cap companies have market capitalization of less than Rs. foreign securities funds are exposed to foreign exchange rate risk and country risk. 2500 crores but more than Rs. Auto. 3. One prominent type of diversified equity fund in India is Equity Linked Savings Schemes (ELSS). investment gets risky. Diversified Equity Funds – Except for a small portion of investment in liquid money market. However. diversified equity funds invest mainly in equities without any concentration on a particular sector(s). As per the mandate. Foreign securities funds achieve international diversification and hence they are less risky than sector funds. Banking.Mid-Cap or Small-Cap Funds: Funds that invest in companies having lower marketcapitalization than large capitalization companies are called Mid-Cap or Small-Cap Funds. 4. Pharmaceuticals or Fast Moving Consumer Goods) which is why they are more risky than equity funds that invest in multiple sectors 2.

debt funds usually invest in securities from issuers who are rated by credit rating agencies and are considered to be of "Investment Grade". Based on different investment objectives. there can be following types of debt funds: 56 . 2. ELSS usually has a lock-in period and in case of any redemption by the investor before the expiry of the lock-in period makes him liable to pay income tax on such income(s) for which he may have received any tax exemption(s) in the past. banks.Equity Index Funds have the objective to match the performance of a specific stock market index. they are subject to credit risk (risk of default) by the issuer at the time of interest or principal payment. ELSS investors are eligible to claim deduction from taxable income (up to Rs 1 lakh) at the time of filing the income tax return. Sensex) are less risky than equity index funds that follow narrow sectoral indices (like BSEBANKEX or CNX Bank Index etc). Equity Index Funds . In order to ensure regular income to investors.Debt/IncomeFunds Funds that invest in medium to long-term debt instruments issued by private companies. are more risky. Narrow indices are less diversified and therefore. debt (or income) funds distribute large fraction of their surplus to investors. governments and other entities belonging to various sectors (like infrastructure companies etc. Debt funds that target high returns are more risky. Equity index funds that follow broad indices (like S&P CNX Nifty. The portfolio of these funds comprises of the same companies that form the index and is constituted in the same proportion as the index. Although debt securities are generally less risky than equities. a. financial institutions.) are known as Debt / Income Funds. Debt funds are low risk profile funds that seek to generate fixed current income (and not capital appreciation) to investors.of 90% of investments by ELSS should be in equities at all times. To minimize the risk of default.

Although it is not necessary that a fund will meet its objectives or provide assured returns to investors.e. but there can be funds that come with a lock-in period and offer assurance of annual returns to investors during the lock-in period. though possible. these funds are conceivable and may be offered to investors very soon. Currently. Monthly Income Plans of UTI) that assured specified returns to investors in the future. the security of investments depends upon the net worth of the guarantor (whose name is specified in advance on the offer document). 57 . To safeguard the interests of investors. However. These funds are generally debt funds and provide investors with a low-risk investment opportunity. Although not yet available in India. Any shortfall in returns is suffered by the sponsors or the Asset Management Companies (AMCs). on account of default by a debt issuer. o Assured Return Funds .Unlike diversified debt funds. SEBI permits only those funds to offer assured return schemes whose sponsors have adequate net-worth to guarantee returns in the future. Any loss incurred. specialized and offshore debt funds. In the past. is shared by all investors which further reduces risk for an individual investor. Eventually. Because of their narrow orientation. UTI had offered assured return schemes (i. focused debt funds are more risky as compared to diversified debt funds. UTI was not able to fulfill its promises and faced large shortfalls in returns. The best feature of diversified debt funds is that investments are properly diversified into all sectors which results in risk reduction.Debt funds that invest in all securities issued by entities belonging to all sectors of the market are known as diversified debt funds. government had to intervene and took over UTI's payment obligations on itself. focused debt funds are narrow focus funds that are confined to investments in selective debt securities. issued by companies of a specific sector or industry or origin.o Diversified Debt Funds . o Focused Debt Funds* . funds that invest only in Tax Free Infrastructure or Municipal Bonds. Some examples of focused debt funds are sector. no AMC in India offers assured return schemes to investors.

GiltFunds Also known as Government Securities in India. nds | Closed-end 3. Gilt Funds invest in government papers (named dated securities) having medium to long term maturity period. Money Market/Liquid Funds Money market / liquid funds invest in short-term (maturing within one year) interest bearing debt instruments.o Fixed Term Plan Series . Issued by the Government of India. even money market / liquid funds are exposed to the interest rate risk. The objective of fixed term plan schemes is to gratify investors by generating some expected returns in a short period. However. fixed term plans are not listed on the exchanges. However. gilt funds too are exposed to interest rate risk. these investments have little credit risk (risk of default) and provide safety of principal to the investors.Fixed Term Plan Series usually are closed-end schemes having short term maturity period (of less than one year) that offer a series of plans and issue units to investors at regular intervals. Unlike closed-end funds. These securities are highly liquid and provide safety of investment. 58 . 4. like all debt funds. Fixed term plan series usually invest in debt / income schemes and target short-term investors. Interest rates and prices of debt securities are inversely related and any change in the interest rates results in a change in the NAV of debt/gilt funds in an opposite direction. thus making money market / liquid funds the safest investment option when compared with other mutual fund types. The typical investment options for liquid funds include Treasury Bills (issued by governments). Commercial papers (issued by companies) and Certificates of Deposit (issued by banks).

) or commodity companies or commodity futures contracts are termed as Commodity Funds. Real Estate Funds 59 . A commodity fund that invests in a single commodity or a group of commodities is a specialized commodity fund and a commodity fund that invests in all available commodities is a diversified commodity fund and bears less risk than a specialized commodity fund. “Precious Metals Fund” and Gold Funds (that invest in gold. debts and money market securities. gold futures or shares of gold mines) are common examples of commodity funds. 6. Balanced funds are appropriate for conservative investors having a long term investment horizon. hybrid funds are those funds whose portfolio includes a blend of equities. Commodity Funds Those funds that focus on investing in different commodities (like metals. HybridFunds As the name suggests. Balanced Funds – The portfolio of balanced funds include assets like debt securities. moderate capital appreciation and at the same time minimizing the risk of capital erosion. These funds invest in companies having potential for capital appreciation and those known for issuing high dividends. and equity and preference shares held in a relatively equal proportion.5. Hybrid funds have an equal proportion of debt and equity in their portfolio. The level of risks involved in these funds is lower than growth funds and higher than income funds. There are following types of hybrid funds in India: a. Growth-and-Income Funds – Funds that combine features of growth funds and income funds are known as Growth-and-Income Funds. food grains. 7. The objectives of balanced funds are to reward investors with a regular income. crude oil etc. b. convertible securities.

Fund of Funds Mutual funds that do not invest in financial or physical assets. but do invest in other mutual fund schemes offered by different AMCs. these funds are quite popular abroad. Fund of Funds provide investors with an added advantage of diversifying into different mutual fund schemes with even a small amount of investment. are known as Specialized Real Estate Funds. However. the expenses of Fund of Funds are quite high on account of compounding expenses of investments into different mutual fund schemes. The objective of these funds may be to generate regular income for investors or capital appreciation. Risk Hierarchy of Different Mutual Funds Thus. different mutual fund schemes are exposed to different levels of risk and investors should know the level of risks associated with these schemes before investing. which further helps in diversification of risks. 8. flexibility of holding a single share (tradable at index linked prices) at the same time. Exchange Traded Funds follow stock market indices and are traded on stock exchanges like a single stock at index linked prices. ExchangeTradedFunds (ETF) Exchange Traded Funds provide investors with combined benefits of a closed-end and an open-end mutual fund. Fund of Funds maintain a portfolio comprising of units of other mutual fund schemes. 9. are known as Fund of Funds. Recently introduced in India. The 60 . The biggest advantage offered by these funds is that they offer diversification.Funds that invest directly in real estate or lend to real estate developers or invest in shares/securitized assets of housing finance companies. just like conventional mutual funds maintain a portfolio comprising of equity/debt/money market instruments or non financial assets.

graphical representation hereunder provides a clearer picture of the relationship between mutual funds and levels of risk associated with these funds: MUTUAL FUND STRUCTURE The SEBI (Mutual Funds) Regulations 1993 define a mutual fund (MF) as a fund established in the form of a trust by a sponsor to raise monies by the Trustees through the sale of units to the public under one or more schemes for in vesting in securities in accordance with these regulations. The structure indicated by the new regulations is indicated as under. 61 . These regulations have since been replaced by the SEBI (Mutual Funds) Regulations. 1996.

Mutual Fund) AMC (e. AMC and custodian.A mutual fund comprises four separate entitles. The board of trustees manages the MF and the sponsor executes the trust deeds in favour of the trustees. Prudential.g. mutual fund trust. HDFC) Managed by a Board of Trustees Mutual Fund (E. Prudential. HDFC. The sponsor is required to contribute at lease 40% of the minimum net worth (Rs.10 crore) of the asset management company. Sponsor Company (E.g. namely sponsor. The mutual fund needs to be constituted in the form of a trust and the instrument of the trust should be in the form of a deed registered under the provisions of the Indian Registration Act.g. 1908. The sponsor establishes the mutual fund and gets its registered with SEBI. prudential HDFC Asset Management Company) Custodian Registrar Establishes the MF as a trust Registers the MF with SEBI Hold unit-holders funds in MF enter into an agreement with SEBI and ensure compliance Float MF funds Manages the fund as per SEBI guidelines and AMC agreement Provide custodial services Provides registrar and transfer services Provides the network for distribution of the scheme to the investors Distributors 62 . It is the job of the MF trustees to see that schemes floated and managed by the AMC appointed by the trustees are in accordance with the trust deed and SEBI guidelines.

e.) which can be availed of.e. Given the plethora of fund options available to you. retirement etc. you can then choose the particular fund that you are comfortable with.Choosing a fund The first step to investing in Mutual Fund is to define the objective of investing. You can choose the fund on various criteria but primarily these can be the following: • • • • • • • The track record of performance of schemes over the last few years managed by Quality of management and administration Parentage of the Mutual Fund Quality and adequacy of disclosures Service levels The price at which you can enter/exit (i. income schemes. entry load / exit load) the scheme and The market price of the units of the scheme (where available) to see the the fund its impact on overall return discount/premium that the market . You should clearly lay down the purpose for which you desire to invest. Thereafter. tax saving schemes. you can select a fund type that best meets your need i. equity schemes etc. liquid schemes. There are several schemes tailor made to meet certain personal financial goals (children's education. marriage. You should define the tenure of investment and the risk appetite you have.assigns to the stated NA V of the scheme 63 .

The Ground rules of Mutual Fund Investing Moses gave to his followers 10 commandments that were to be followed till eternity.• Independent rating of the schemes. The actual price is the NA V less the exit load. It is the mutual fund that buys back the units and at a price based on the NA V. then the investor would be able to purchase them at the stock exchange where the MF has listed them. The exit load is similar in concept to the entry load. units are of a close-ended scheme. 2. as was mentioned earlier. the sale also is affected through the stock exchange mechanism and resembles the sale of equity share. This purchase would resemble the purchase of an equity share wherein the investor would pay the quoted price of the unit as well as a brokerage for the purchase transaction. In the case of a close ended scheme. is driven by the price the units quote. Their price ret1ects the NA V of the scheme. This is driven by the NA V (Net Asset Value) of the scheme. The pricing for the transaction. Purchasing a unit in a open-ended scheme is different as there is no exchange where these units are traded. If the desired. These come in handy 64 . The manner is usually similar to that of investing any public issue of any security (equity/debt). The price. Selling units in an open-ended scheme is similar to the way they are purchased. may be either at a discount or premium to the NA V. The mutual fund in an open-ended scheme sells these units to the investor at the NA V (plus a sale / entry load). Then the following choices exist: 1. If you choose to invest at the initial stage. the offer document would detail the schemes being offered and the manner of investing. The world of investments too has several ground rules meant for investors who are novices in their own right and wish to enter the myriad world of investments. if available You could be investing in a mutual fund either at the initial stage when the mutual fund approaches the market through an offer document route or at a subsequent stage. however. A close ended scheme. If you are planning to purchase the units subsequently.

1. think first: one first has to decide what he wants the money for and it is this investment goal that should be the guiding light for all investments done. Excessive exposure to any specific sector should be avoided.for there is every possibility of losing what one has if due care is not taken. Identifying the proposed investment philosophy of the fund will give an insight into the kind of risks that it shall be taking in future. One should take a look at the portfolio of the funds for the purpose. expectations and risk profile is of prime importance failing which. Don't rush in picking funds. Try to understand where the money is going: It is important to identify the nature of investment and to know if one is compatible with the investment. Mutual funds invest with a certain ideology such as the "Value Principle" or "Growth Philosophy". One should abstain from speculating which in' other words would mean getting out of one fund and investing in another with the intention of making quick money. Assess yourself: Self-assessment of one's needs. as it will only add to the risk of the entire portfolio. One would do well to remember that nobody can perfectly time the market so staying invested is the best option unless 65 . Both have their share of critics but both philosophies work for investors of different kinds. 4. Don't speculate: A common investor is limited in the degree of risk that he is willing to take. 3. 2. Invest. One can lose substantially if one picks the wrong kind of mutual fund. In order to avoid any confusion it is better to go through the literature such as offer document and fact sheets that mutual fund companies provide on their funds. one will make more mistakes in putting money in right places than otherwise. One should identify the degree of risk bearing capacity one has and also clearly state the expectations from the investments. It is thus important to know the risks associated with the fund and align it with the quantum of risk one is willing to take. Irrational expectations will only bring pain. It is thus of key importance that there is thought given to the process of investment and to the time horizon of the intended investment.

The SIPs (Systematic Investment Plans) offered by all funds helps in being systematic. even investors of equity should be judicious and invest some portion of the investment in debt. However with a plethora of schemes to choose from the retail investor faces problems in selecting funds. Though past performance alone cannot be indicative of future performance. there must be some performance indicator that will reveal the quality of stock selection of various AMCs. 66 . but the funds record is an important indicator too. Don't put all the eggs in one basket: This old age adage is of utmost importance. is one of the most preferred investment avenues in India. This might reduce the maximum return possible. Performance Measures of Mutual Funds Mutual Fund industry today. Be regular: Investing should be a habit and not an exercise undertaken at one's wishes. No matter what the risk profile of a person is. Thus. 6. Therefore. The basic philosophy of Rupee cost averaging would suggest that if one invests regularly through the ups and downs of the market. It is important to beat the market by being systematic. Diversification even in money in the hands of several fund managers. he would stand a better chance of generating more returns than the market for the entire duration. the only quantitative way to judge how good a fund is at present. As we said earlier. Worldwide.there are compelling reasons to exit. since it is extremely difficult to know when to enter or exit the market. For mutual funds to grow. with about 34 players and more than five hundred schemes. there is a need to correctly assess the past performance of different mutual funds. but will also reduce the risks. if one has to really benefit from them. 5. it is. AMCs must be held accountable for their selection of stocks. it is always advisable to diversify the risks associated. So putting one's money in different asset classes is generally the best option as it averages the risks in each category. frankly. good Mutual fund companies over are known by their AMCs and this fame is directly linked to their superior stock selection skills. In other words. Factors such as investment strategy and management style are qualitative.

The Total Risk of a given fund is sum of these t\VO and is measured in terms of standard deviation of returns of the fund. we try to assess the competitive strength of the mutual funds vis-à-vis one another in a better way: In order to determine the risk-adjusted returns of investment portfolios. called unsystematic risk. 67 . On the other hand is measured in terms of Beta. The more responsive the NA V of a mutual fund is to the changes in the market. higher will be its beta. It should also include the risk taken by the fund manager because different funds will have different levels of risk attached to them. which affect all the securities present in the market. First. Systematic risk. which represents t1uctuations in the NA V of the fund visà-vis market. t1uctuations due to specific securities present in the portfolio of the fund. general market fluctuations. systematic risk can not. higher will be the risk associated with it. While unsystematic risk can be diversified through investments in a number of instruments. These fluctuations in the returns generated by a fund are resultant of two guiding forces. can be defined as variability or fluctuations in the returns generated by it.Return alone should not be considered as the basis of measurement of the performance of a mutual fund scheme. several eminent authors have worked since 1960s to develop composite performance indices to evaluate a portfolio by comparing alternative portfolios within a particular risk class. The higher the t1uctuations in the returns of a fund during a given period. By using the risk return relationship. Risk associated with a fund. Beta is calculated by relating the returns on a mutual fund with the returns in the market. in a general. called market risk or systematic risk and second.

Rf)/Bi Where. This Index is a ratio of return generated by the fund over and above risk free rate of return (generally taken to be the return on securities backed by the government. So. The Sharpe Measure In this model. as there is no credit risk associated). While a high and positive Treynor's Index shows a superior risk-adjusted performance of a fund. Ri represents return on fund. All risk-averse investors would like to maximize this value. According to Sharpe. it can be represented as: Treynor's index (Ti) = (Ri . which is a ratio of returns generated by the fund over and above risk free rate of return and the total risk associated with it. the model evaluates funds on the basis of reward per 68 . it is the total risk of the fund that the investors are concerned about. Symbolically. performance of a fund is evaluated on the basis of Sharpe Ratio. this performance measure evaluates funds on the basis of Treynor's Index. a low and negative Treynor's Index is an indication of unfavorable performance. Rf is risk free rate of return and Hi is beta of the fund. during a given period and systematic risk associated with it (beta).The most important and widely used measures of performance are:  The Treynor Measure  The Sharpe Measure  Jenson Model  Fama Model The Trevnor Measure Developed by Jack Treynor.

The total risk is appropriate when we are evaluating the risk return relationship for well diversified portfolios. will rank lower on Sharpe Measure.a s thtotal risk e is reduced to systematic risk. Comparison of Sharpe and Treynor Sharpe and Treynor measures are similar in a way. Si is standard deviation of the fund. which measures the performance of a fund compared with the actual returns over the period. Required return of a fund at a given level of risk (Bi) can be calculated as: Ri = Rf+ Bi (Rm – Rf) Where. Therefore. After calculating it alpha can be obtained by subtracting required return from the actual return of the fund. a low and negative Sharpe Ratio is an indication of unfavorable performance. Jenson Model Jenson’s model proposes another risk adjusted performance measure. This measure was developed by Michael Jenson and is sometimes referred to as the Differential Return Method.unit of total risk. the systematic risk is the relevant measure of risk when we are evaluating less than fully diversified portfolios or individual stocks. Symbolically. This measure involves evaluation of the returns that the fund has generated vs. On the other hand. Rankings based on total risk (Sharpe measure) and systematic risk (Treynor measure) should be identical for a well-diversified portfolio. it can be written as: Sharpe Index (Si) = (Ri – Rf)/Si Where. the returns actually expected out of the fund given the level of its systematic risk. For a well-diversified portfolio the total risk is equal to systematic risk. a poorly diversified fund that ranks higher on Treynor measure. Rm is average market return during the given period. 69 . While a high and positive Sharpe Ratio shows a superior risk-adjusted performance of a fund. since they both divide the risk premium by a numerical risk measure. compared with another fund that is highly diversified. The surplus between the two returns is called Alpha.

of a fund with the required return commensurate with the total risk associated with it. Required return can be calculated as: Ri = Rf + Si/Sm*(Rm – Rf) Where. Higher value of which indicates that fund manager has earned returns well above the return commensurate with the level of risk taken by him. a portfolio can be spread across a number of stocks and sectors. as the ordinary investor lacks the necessary skill and resources to diversified. These models are suitable for large investors like institutional investors with high risk taking capacities as they do not face paucity of funds and can invest in a number of options to dilute some risks. For them. Moreover. two models namely. the selection of the fund on the basis of superior stock selection ability of the fund manager will also help in safeguarding the money invested to a great extent. The difference between these two is taken as a measure of the performance of the fund and is called net selectivity. However. Fam a M odel The Eugene Fama model is an extension of Jenson model. The investment in funds that have generated big returns at higher levels of risks leaves the money all the more prone to risks of all kinds that may exceed the individual investors’ risk appetite. as it is the excess return over and above the return required to compensate for the total risk taken by the fund manager. This model compares the performance. 70 . Sharpe measure and Fama model that consider the entire risk associated with fund are suitable for small investors. measured in terms of returns. Among the above performance measures.Higher alpha represents superior performance of the fund and vice versa. Sm is standard deviation of market returns. as his knowledge of market is primitive. Treynor measure and Jenson model use systematic risk based on the premise that the unsystematic risk is diversifiable. The net selectivity is then calculated by subtracting this required return from the actual return of the fund. Limitation of this model is that it considers only systematic risk not the entire risk associated with the fund and an ordinary investor can not mitigate unsystematic risk. The net selectivity represents the stock selection skill of the fund manager.

LIST OF AMC’S ABN AMRO Mutual fund Birla Mutual fund Deutsche Mutual fund DSP Merrill Lynch Mutual fund Franklin Templeton Mutual fund HDFC Mutual fund HSBC Mutual fund ING Vysya Mutual fund JM Financial Mutual fund Kotak Mahindra Mutual fund LIC Mutual fund Morgan Stanley Mutual fund Principal Mutual fund Prudential HDFC Mutual fund Reliance Mutual fund SBI Mutual fund Sundaram Mutual fund TATA Mutual fund Unit Trust of India Mutual fund UTI Mutual fund 71 .

TYPES OF MUTUAL FUND SEHEMES BY STRUCTURE    Open-Ended Schemes Close-Ended Schemes Interval Schemes BY INVESTMENT OBJECTIVE     Growth Schemes Income Schemes Balanced Schemes Money Market Schemes OTHER SCHEMES     Tax saving Schemes Special Schemes Index Schemes Sector Specific Schemes Mutual fund schemes may be classified on the basis of its structure and its investment objective. By Structure: Open-ended funds 72 .

Investors can conveniently buy and sell units at Net Asset Value (“NAV”) related prices.An open ended fund is one that is available for subscription all through the year. 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. Income funds 73 . Growth schemes are ideal for investors having a long-term outlook seeking growth over a period of time. The fund is open for subscription only during a specific period. have outperformed most other kind of investments held over the long term. They are open for sale or redemption during pre-determined intervals at NAV related prices. The key feature of open-end schemes is liquidity. Closed-ended funds A closed end fund has a stipulated maturity period which generally ranging from 3 to 15 years. Interval funds These combine the features of open-ended and closed-ended schemes. These do not have a fixed maturity. Such schemes normally invest the majority of their corpus in equities. It has been proven that returns from stocks. By Investment Objective: Growth funds The aim of growth funds is to provide capital appreciation over the medium to long-term.

The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds. In a rising stock market. Such schemes periodically distribute a part of their earning and investment both in equities and fixed income securities in the proportion indicated in their offer documents.S. Balanced funds The aim of balanced funds is to provide both growth and regular income. or fall equally when the market falls. Money market funds have been around for 30 years and are a very popular place for investors to park their money. Treasury Bills. Load Funds A load fund is one that charges a commission for entry of exit. 74 . It could be corpus is put to work. Income funds are ideal for capital stability and regular income. Typically entry exit loads range from 1% to 2%. a commission will be payable.S. No-Load Funds A No-Load fund is one that does not charge a commission for entry or exit. That is. corporate debentures and government securities. the NAV of these schemes may not normally keep pace. each time you buy or sell units in the fund. banks and corporations and U. They are fixed at $1 per share and only the yield fluctuates. The advantage of a No-Load fund is that the entire corpus is put to work. These are ideal for investors looking for a combination of income and moderate growth. That is. money market funds have treated investors well. Money market funds For over 30 years. Government. Money market funds are a type of mutual fund that invests in short-term (less than a year) debt securities of agencies of the U. no commission is payable on purchase or sale of units in the fund.

The investment of these funds is limited to specific like Info Tech. Special Schemes: Industry Specific Schemes Industry Specific Schemes invest in the industries specified in the offer document. FMCG. and Pharmaceuticals etc. Index Schemes: 75 . provided the capital asset has been sold to April 1. The Act also provide opportunities to investors to save capital gains u/s 54EA and 54EB by investing in Mutual funds.2000.Other Schemes: Tax saving Schemes: These schemes offer tax rebates to the investor under specific provisions of the Indian income tax laws as the Government offers tax incentives for investment in Equity Linked Saving Scheme (ELSS) and Pension Schemes are allowed as deduction u/s 88 of the Income Tax Act.2000 and the amount is invested before September 30.

Is the price at which a close-ended scheme repurchases its units and it may include a backend load. The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date. FREQUENTLY USED TERMS Net Asset Value (NAV) Net Asset Value is the market value of the assets of the scheme minus its liabilities. Redemption Price Is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity. Repurchase or ‘Back-end’ Load Is a charge collected by a scheme when it buys back the units from the unit holders. which invest exclusively in a specified industry or a group of industries or various segments such as ‘A’ Group shares or initial public offerings. ‘Front-end’ load. This is also called Bid Price. Schemes that do not charge a load are called ‘No Load’ schemes. Sectoral Schemes: Sectoral funds are those. Such prices are NAV related. Sales Load Is a charge collected by a scheme when it sells the units.Index Funds attempt to replicate the performance of a particular index such as the BSE sensex or the NSE. Also called. 76 .

CHAPTER 4&5 77 .

DATA ANALYSIS AND INTERPRETATION 78 .

225 cr. Spread over 18schemes NAV History – Historical value for a period of 5-Nov-2009 to 28-Jan-2010 79 . the India Magnum Fund with a corpus of Rs. approximately. Now it has an investor base of over 8 lakhs.DATA ANALYSIS AND INTERPRETATION • • • • • • SBI ING VYSYA UTI HSBC HDFC ABN AMRO STATE BANK OF INDIA State Bank of India is the first Bank sponsored Mutual Fund to launch offshore fund. State Bank of India Mutual Fund has more than Rs.500 Crores as AUM. Today it is the largest Bank sponsored Mutual Fund in India. They have already launched 35 Schemes out of which 15 have already yielded handsome returns to investors. 5.

74 34.80 39.52 42.14 35.SBI MUTUAL FUND Magnum Equity Fund – Growth & Dividend DATE 05-Nov-2009 12-Nov-2009 19-Nov-2009 26-Nov-2009 03-Dec-2009 10-Dec-2009 17-Dec-2009 24-Dec-2009 31-Dec-2009 07-Jan-2010 14-Jan-2010 21-Jan-2010 28-Jan-2010 DIVIDEND 42.46 33.06 43.06 38.24 39.15 47.58 44.33 39.84 38.89 GROWTH 42.47 43.70 SBI MAGNUM EQUITY FUND – Dividend & Growth 80 .31 40.61 44.17 40.36 47.73 45.51 41.68 41.57 37.17 43.15 45.24 48.

Because of declaring Dividends frequently.50 45 40 35 30 25 20 15 10 5 0 Divdend Growth 5/11/200 9 3/12/200 9 7/1/2010 14/1/201 0 21/1/201 0 19/11/2009 24/12/2009 12/11/2009 26/11/2009 10/12/2009 17/12/2009 The above graph indicates that the Equity Fund . 81 31/12/2009 28/1/201 0 .Growth and Dividend from the 1st week of Dec is almost performing same but in 2nd week of Jan the performance of Growth has drastically changed when compared to Dividends. and again the performance showed is similar in rest of the weeks. the performance of Dividend always shows less when compared with others.

ING VYSYA BANK
ING Vysya Bank Ltd., is an entity formed with the Vysya Bank Ltd, a premier bank in the Indian Private Sector and a global financial powerhouse, ING (International Nederlanden Group) of Dutch origin, in the year 2002. The origin of the Vysya Bank dates back to 1930. Since then the Bank has grown in size and stature and has reached the coveted position of number one private sector bank in India. In 1948, the Bank acquired the status of Scheduled Bank. In 1992, its deposits crossed Rs. 1000 crores. The very next year, ING Vysya crossed 300 branches.

ING Vysya Bank's Deposit Scheme
The following two types of deposits are offered by ING Vysya Bank: Access Plus Features: A single Current Account, with access from 8 cities in India Separate cheque books for each centre for easy reconciliation Pooling of funds in the city of residence A cost effective product A perfect product for the trading community Current Account Eligibility: Individuals for single account More than one individual for joint account Sole proprietary concerns Partnership concerns Private and Public Limited companies Clubs, associations, benevolent and friendly societies Co-operative organizations Statutory bodies, municipalities and such other Quasi-Government Institutions

82

ING VYSA ING Balanced Fund – Growth & Dividend DATE 05-Nov-2009 12-Nov-2009 19-Nov-2009 26-Nov-2009 03-Dec-2009 10-Dec-2009 17-Dec-2009 24-Dec-2009 31-Dec-2009 07-Jan-2010 14-Jan-2010 21-Jan-2010 28-Jan-2010 DIVIDEND 17.17 16.78 17.77 17.60 17.91 18.14 17.89 18.14 18.67 18.88 18.74 16.51 16.80 GROWTH 24.54 23.99 25.40 25.15 25.60 25.93 25.56 25.93 26.69 26.98 26.78 23.59 24.02

ING VYSA EQUITY FUND – Dividend & Growth 83

30

25

20

15

Divdend Growth
10

5

0

31/12/2 009

21/01/2 010

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14/01/2 010

The above graph indicates that Growth is performing well when compared to Dividends. From the starting month Growth is high. There are slight fluctuations in both Growth and Dividend. Because of declaring Dividends frequently, the performance of Dividend always shows less when compared with others. As compared to SBI the performance showed is better.

UNIT TRUST OF INDIA (UTI)
84

28/01/2 010

5/11/20 09

3/12/20 09

7 million debit cards. UTI Bank in India today is capitalized with Rs. UTI Bank has strengths in retail as well as corporate banking. This is the first bank in India to offer the AT PAR Cheque facility. UTI MUTUL FUND 85 . the first bank to begin operations as new private banks in 1994 after the Government of India allowed new private banks to be established. UTI Bank in India had over 2.UTI. without any charges. By the end of December 2004. 232. the New India Assurance Company. The Travel Currency Card is a signature based pre-paid travel card which enables travellers global access to their money in local currency of the visiting country in a safe and convenient way.. Life Insurance Corporation of India (LIC) and General Insurance Corporation Ltd. The latest offerings of the bank along with Dollar variant is the Euro and Pound Sterling variants of the International Travel Currency Card.86 Crores with 47. UTI Bank was jointly promoted by the Administrator of the specified undertaking of the Unit Trust of India (UTI-I). The Oriental Insurance Corporation and United Insurance Company Ltd. UTI Bank India commits to adopt the best industry practices internationally to achieve excellence.50% public holding other than promoters. Also with associates viz. It has more than 200 branch offices and Extension Counters in the country with over 1250 UTI Bank ATM proving to be one of the largest ATM networks in the country. to all its Savings Bank customers in all the places across the country where it has presence. National Insurance Company Ltd.

39 UTI EQUITY FUND – Dividend & Growth 50 45 40 35 30 25 20 15 10 5 0 3/12/2009 10/12/2009 17/12/2009 12/11/2009 19/11/2009 26/11/2009 24/12/2009 31/12/2009 28/1/2010 5/11/2009 7/1/2010 14/1/2010 21/1/2010 Divdend Grow th 86 .21 45.42 39.85 42.22 45.80 41.63 41.10 GROWTH 44.68 41.30 45.50 42.11 45.09 40.31 48.68 44.60 44.30 39.20 45.51 48.73 44.89 43.02 49.88 42.UTI Equity Fund – Growth & Dividend DATE 05-Nov-2009 12-Nov-2009 19-Nov-2009 26-Nov-2009 03-Dec-2009 10-Dec-2009 17-Dec-2009 24-Dec-2009 31-Dec-2009 07-Jan-20010 14-Jan-2010 21-Jan-2010 28-Jan-2010 DIVIDEND 41.30 41.36 46.91 38.

In the month of Feb we can see that Growth has fallen down in the last week and raised in first week and the Dividend has also risen in the 1st week of Feb. Because of declaring Dividends frequently. the performance of Dividend always shows less when compared with others 87 .From the Bellow graph we can observe that Growth is showing more performance than Dividends.

HSBC in India gives 24 hour banking services. Jaipur. Mumbai. Pune. Gurgaon. Kochi. Trivandrum and Visakhapatnam. Kolkata. Coimbatore. Noida. HSBC Internet banking adds to the services of HSBC India abroad. Bangalore. extensive network of ATMs. HSBC NRI centres provide full range of personal and private banking products in India and overseas. HSBC India. 88 . along with HSBC Investment product and HSBC Insurance. Thane. the Middle East. HSBC NRI centres are located in Asia-Pacific. Chandigarh. Before moving its headquarter to London in 1990.HSBC HSBC is the largest bank in Hong Kong and second largest group in the world after Citicorp. Chennai. it was headquartered in Hong Kong. integrated Call Centre and also HSBC e-banking. Ludhiana. New Delhi. HSBC India is having branches in Ahmedabad. Europe and North America. it offers international Gold Card and Classic Credit Cards from VISA and MasterCard and debit cards from Visa. Hyderabad.

62 106.95 48.49 42.67 GROWTH 106.22 111.25 42.06 109.96 45.10 102.HSBC MUTUAL FUND HSBC Equity Fund – Growth & Dividend DATE 05-Nov-2009 12-Nov-2009 19-Nov-2009 26-Nov-2009 03-Dec-2009 10-Dec-2009 17-Dec-2009 24-Dec-2009 31-Dec-2009 07-Jan-2010 14-Jan-2010 21-Jan-2010 28-Jan-2010 DIVIDEND 44.75 103.02 43.31 108.68 48.40 41.27 114.27 46.12 47.06 111.11 116.78 100.23 109.20 46.96 89 .92 118.10 45.82 45.

But here we can see that Growth is again performing well. Because of declaring 90 28/01/20 10 12/11/2009 17/12/20 09 31/12/20 09 21/01/20 10 .120 100 80 60 Divdend 40 Growth 20 0 5/11/2009 3/12/200 9 19/11/20 09 26/11/20 09 10/12/20 09 24/12/20 09 7/1/2010 14/01/20 10 HSBC EQUITY FUND – Dividend & Growth The above graph there is little fluctuations in the values of Dividends and Growth. It showed a less performance in the last week and Dividend showed similar performance in all the weeks.

86 25.87 36.Dividends frequently. 1.13 23. the performance of Dividend always shows less when compared with others. HDFC BANK HDFC Limited was established in 1977 by the World Bank. for the promotion of industrial development in India by giving project and corporate finance to the industries in India.05 27.63 25.10 39.070 crores.848 companies and 16. HDFC Bank has grown from a development bank to a financial conglomerate and has become one of the largest public financial institutions in India.80 42. HDFC had disbursed a total of Rs. 13.56 . HDFC PRUDENTIAL MUTUAL FUND HDFC EMERGING STAR FUND Growth & Dividend DATE 05-Nov-2009 12-Nov-2009 19-Nov-2009 26-Nov-2009 03-Dec-2009 10-Dec-2009 DIVIDEND 24. since inception.42 39. covering 6. 2000.14 26. the Government of India and the Indian Industry.85 91 GROWTH 36. HDFC Bank has financed all the major sectors of the economy. As of March 31.851 projects.51 38.

Because of declaring Dividends 92 31/12/2009 28/1/201 0 .55 41.19 31. From the 1st week of Dec to 1st week of Feb both have increased and the performance showed is well.30 38.62 23.14 29.07 28.12 47.95 42.17-Dec-2009 24-Dec-2009 31-Dec-2009 07-Jan-2010 14-Jan-2010 21-Jan-2010 28-Jan-2010 28.80 HDFC EQUITY FUND – Dividend & Growth 50 45 40 35 30 25 20 15 10 5 0 Divdend Growth 5/11/200 9 3/12/200 9 7/1/2010 14/1/201 0 21/1/201 0 12/11/2009 19/11/2009 26/11/2009 10/12/2009 17/12/2009 24/12/2009 From the above graph it indicates that the Growth and Dividend are performing similar but in the month of Feb both of them have declined .It had drastically fallen in the month of the Feb.58 45.26 38.88 46.06 30.25 23.

Although we serve a broad range of clients. The ABN AMRO Corporate Values and Business Principles provide the framework within which we carry out our operations.. We have a clear focus on consumer and commercial clients in our local markets and focus globally on select multinational corporations and financial institutions. 93 . We are active in four principal customer segments: Personal Banking. In brief. the performance of Dividend always shows less when compared with others. our history going back to 1824. with more than 4. Private Banking. ABN AMRO Profile ABN AMRO is an international bank with European roots. Our business mix gives us a competitive edge in our chosen markets and client segments.000 branches in 53 countries. as well as private clients. ABN AMRO is a prominent international bank.. Business and Commercial and Corporate and Institutional. This is the client area where we have a strong and distinctive competitive advantage and where we feel we can be most profitable in the future.1 bln (as at 1 November 2008). ABN AMRO ranks eighth in Europe and 12th in the world based on total assets. a staff of more than 99.000 full-time equivalents and total assets of EUR 1.120. Our strategy is built on leveraging our advantages as a Group to create the best value for ? and with ? our clients.frequently. our strategic focus is on the mid-market segment.

41 94 .67 23.28 37.10 39.54 19.55 GROWTH 41.04 23.76 47.61 18.52 43.00 22.20 15.12 43.71 46.52 38.46 45.62 42.64 42.04 40.24 23.78 23.75 15.ABN AMRO MUTUAL FUND ABN AMRO Equity Fund Growth & Dividend DATE 05-Nov-2009 12-Nov-2009 19-Nov-2009 26-Nov-2009 03-Dec-2009 10-Dec-2009 17-Dec-2009 24-Dec-2009 31-Dec-2009 07-Jan-2010 14-Jan-2010 21-Jan-2010 28-Jan-2010 DIVIDEND 22.46 42.26 17.33 18.48 21.

There are some fluctuations in growth. 95 31/12/2009 28/1/201 0 .50 45 40 35 30 25 20 15 10 5 0 Divdend Growth 5/11/200 9 3/12/200 9 7/1/2010 14/1/201 0 21/1/201 0 19/11/2009 24/12/2009 12/11/2009 26/11/2009 10/12/2009 17/12/2009 ABN AMRO EQUITY FUND – Dividend & Growth In this you can see that right from the starting month Growth is showing good performance compare to Dividends. but in dividends the values shown are almost constant. the performance of Dividend always shows less when compared with others. Because of declaring Dividends frequently.

51 48.36 47.12 47.76 47.10 39.27 46.15 47.40 41.69 26.42 39.73 44.13 23.02 43.21 45.22 111.63 41.31 108.60 25.56 25.77 17.78 17.89 Grow th 42.06 109.62 106.51 41.52 43.51 38.74 16.06 38.59 24.68 41.30 45.10 102.49 42.10 39.78 100.08 40.36 46.28 37.93 25.95 42.67 18.05 27.48 21.24 23.85 28.33 39.62 42.86 25.14 29.60 44.15 45.27 114.93 26.NET ASSET VALUE History – Historical NAV for a Period from 5TH NOV2009-28TH NOV2010.88 18.80 41.17 40.30 38.54 23.17 43.58 44.14 18.20 45.54 19.64 42.61 18.55 Gro wth 41.52 38.15 25.14 17.19 31.98 26.78 23.67 23.46 45.89 43.89 18.63 25.68 48.92 118.12 43.85 42.95 48.75 103.56 41.68 41.80 ABN AMRO Divide nd 22.96 HDFC Divide nd 24.41 PERFORMANCE CHART OF DIVEDEND 96 .88 42.24 48.39 COPERATE BANKS HSBC Divide nd 44.17 16.58 45.26 38.46 33.75 15.40 25.70 ING Divide nd 17.14 35.23 109.00 22.30 39.46 42.11 45.60 17.68 44.88 46.47 43.14 26.71 46.22 45.73 45.84 38.04 40.42 39.06 43.87 36.33 18.20 46.52 42.20 15.61 44.11 116.06 111.74 34.10 Grow th 44.06 30.12 47.07 28.80 39.91 38.25 42.10 45.98 25.02 49.24 39.02 UTI Dividen d 41.55 Grow th 36.67 Growth 106.50 42.62 23.96 45.78 23.57 37.25 23.04 23.82 45.26 17.91 18.31 48.30 41.80 Grow th 24.51 16.80 42.31 40. NATIONAL BANKS SBI DATE 05/11/09 12/11/09 19/11/09 26/11/09 03/12/09 10/12/09 17/12/09 24/12/09 31/12/09 07/01/10 14/01/10 21/01/10 28/01/10 Divid end 42.

In SBI. from the 1st week of Dec both are 97 28/1/2010 28/1/2010 3/12/2009 7/1/2010 21/1/2010 .50 45 40 35 30 25 20 15 10 5 0 SBI ING UTI HSBC HDFC ABN AMRO 5/11/2009 14/1/2010 12/11/2009 19/11/2009 26/11/2009 10/12/2009 17/12/2009 24/12/2009 31/12/2009 PERFORMANCE CHART OF GROWTH 120 100 80 SBI 60 40 20 0 ING UTI HSBC HDFC ABN AMRO 5/11/2009 12/11/2009 19/11/2009 26/11/2009 3/12/2009 10/12/2009 17/12/2009 24/12/2009 31/12/2009 7/1/2010 14/1/2010 21/1/2010 The above graph clearly indicates the overall performance of Equity Fund-Dividend and Growth of all the banks taken into consideration.

From the above graph it clearly indicates that the HDFC bank is showing excellent performance when compared to other Banks. There are slight fluctuations in both Growth and Dividend. In ING VYSYA. In UTI. From the starting month Growth is high. In HSBC. In the month of Feb we can see that Growth has fallen down in the last week and raised in first week and the Dividend has also raised in the 1st week of Feb.almost performing same but in 2nd week of Jan the performance of Growth has drastically changed when compared to Dividends. 98 . From the 1st week of Dec to 1st week of Feb both have increased and the performance showed is well. it indicates that the Growth and Dividend are performing similar but in the month of Feb both of them have declined . In HDFC. and again the performance showed is similar in rest of the weeks. right from the starting month Growth is showing good performance compare to Dividends. In HDFC. we can observe that Growth is showing more performance than Dividends. The Corporate Banking sectors are showing good performance than nationalized Banking sectors. Growth is performing well when compared to Dividends. but in dividends the values shown are almost constant. the performance of Dividend always shows less when compared with others. there are little fluctuations in the values of Dividends and Growth. It showed a less performance in the last week and Dividend showed similar performance in all the weeks. Because of declaring Dividends frequently. But here we can see that Growth is again performing well.It had drastically fallen in the month of the Feb. There are some fluctuations in Growth.

When we see HSBC bank here again growth has been performed well when we compare to dividends. This decline may cause due to declaration of any dividends in those banks and so it was showing low values.64%. During the first week of Feb the NAV values of both Dividends and Growth were high. In ING VYSYA bank table we can see that performance of growth was good. When we see corporate banks (i e) HDFC the performance of Growth is very good when compared to Dividends. This bank has been shown a positive performance when compared to other banks were it is good for investing in this bank. In Nationalized banks we can see internally in Dividends SBI bank has performed well and if wee see Growth UTI bank has performed well. 9.) SBI bank we can see that both Dividend and Growth are similar to each other . 99 . In UTI bank table we can see that growth has performed well when compared to dividends. From the table 1 (i. 8. Nationalized banks performed well up to certain extent and it values were declining further. The dividends was constant in there values. 4. There was a slight fluctuation in the values of dividends and growth. 6. 5. In the month of Feb it raised in the first week but it had a drastic fall in all the following weeks.FINDINGS & SUGGESTIONS: 1. If we compare Nationalized and Corporate banks we can see that corporate banks have performed well during these 3 months. When we see HDFC bank both the Dividends and Growth are equal or similar to each other there is no change in them. 3.e. 7.where as growth has been increased in the 2nd week of Jan with a value of 29. 2. This increase in the value has been reached to certain extent and it has been declined in last week of Feb.

It had reached to a maximum height. In corporate banks we can see internally in Dividends and Growth HDFC bank has performed relatively well when compare to other banks. CONCLUSION: 100 .10. 11. Both the values are high in this bank. So its better for investors to invest in corporate sectors rather than investing in Nationalized sector which gives them maximum number of return for their investment.

2. introduction of various schemes and services. banks. They are very caring to their customers. technology. sector. online trading its clear that any one wants to invest will surely invest in corporate nationalized banks this is due to extra benefit & services which they are getting from that 101 . 3. Corporate sectors provide good services if we see through customer point of view. Now u can see most of them are opening their account in corporate banks instead of With the increase in infrastructure.1.

Security Analysis and Portfolio Management (Fischer & Jordan) 2. Bhalla) 3.mutualfundsindia.BIBLIOGRAPHY Books References: 1.uti.com www.nse-india.com www.com www. Security Analysis & Portfolio Management (Robbins) WEBSITES www.K.reliancemutual.moneycontrol.sbimf. Investment Decisions (V.com 102 .com www.com www.amfiindia.com www.