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PROJECT REPORT ON
Detail Study
Of
HDFC Mutual Fund
Submitted For the partial fulfillment
of the requirement for The Degree
of MBA
Submitted by:
MD NABEEL
Registration No. –070651940
MBA –IV Trimester
SESSION (2007-2009)
INTERNAL GUIDE
JYOTSHNA RAI
IIPM - School Of Management
DECLARATION
Name:-Md Nabeel
Regd :-0706519040
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
This is to certify that the work entitled “DETAIL STUDY OF HDFC- MUTUAL FUND” is a
piece of Summer Project Report done by MD NABEEL, student of MBA IV Trimester IIPM
SCHOOL OF MANAGEMENT, Kansbahal , Rourkela bearing Reg. No 0706519042 under my
guidance and supervision for partial fulfillment of MBA curriculum of BIJU PATNAIK
UNIVERSITY OF TECHNOLOGY, Rourkela, Orissa.
Forwarded
Internal Guide
JYOTSNA RAI
IIPM School of management
(Signature)
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
This is to certify that the work entitled “DETAIL STUDY OF HDFC- MUTUAL FUND” is a
piece of Summer Project Report done by MD NABEEL, student of MBA IV Trimester IIPM
SCHOOL OF MANAGEMENT, Kansbahal , Rourkela bearing Reg. No 0706519042 under my
guidance and supervision for partial fulfillment of MBA curriculum of BIJU PATNAIK
UNIVERSITY OF TECHNOLOGY, Rourkela, Orissa.
Forwarded
External Guide
MR SANKET SWAROOP
HDFC MUTUAL FUND
Rourkela
(Signature)
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
AKNOWLEDGEMANT
Name: - Md Nabeel
Regd: - 0706519040
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
CONTENTS
CHAPTER TOPIC PAGE NO
4 PRODUCT &SERVICE 23
1. TYPES OF MUTUAL FUND
2. INVESTMENT PLAN
3. PRODUCT OF MUTUAL FUND
5 PART OF MY SUMMER TRAINING 47
6 METHODOLOGY OF THE STUDY 50
1. RESEARCH METHODOLOGY
2. HYPOTHESIS SOURCES OF DATA
COLLECTION
3. OF THE STUDY
4. DATA COLLECTION & ANALYSIS
7 QUESTIONARE 63
8 FINDING, RECOMMENDATION, 67
CONCLUSION
9 BIBLIOGRAPHY 72
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Detail Study Of HDFC Mutual Fund
OBJECTIVE
OF
THE STUDY
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Detail Study Of HDFC Mutual Fund
Indian financial system has been expiring the vast effect of globalization i.e. drastic
interest rate cut, political disturbances, security scam etc have scattered the common investor’s
perception in selecting various investment portfolio. Most of the security holders have lost their
confidence in newly come-up corporate sectors for investment. Looking to the situation, it is
quite encouraging to analyze how the HDFC Mutual Fund able to trap the deposits by
introducing various schemes and how it protects the interest of the investors.
The main study is based on the performance and analysis of various schemes with
reference to HDFC Mutual Fund that is a leading mutual fund industry in India.
The total performance analysis of financial instruments with reference to the HDFC
Mutual Fund has got objectives. This are as follows:-
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Detail Study Of HDFC Mutual Fund
INTRODUCTION
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Detail Study Of HDFC Mutual Fund
I NTRODUCTION
The financial market plays a crucial role in the in the economic development
of a country by facilitating the allocation of scarce resources. Financial
markets essentially involve the allocation of resources. This can be thought of
as the brain of the entire economic system, the locus of central decision-
making; if they fail, not only will the sectors profit be lower than would
otherwise have been, but the performance of the entire economic system may
be impaired.
The reforms have successfully dismantled the entry barriers, with the result
that today there are domestic and foreign financial institutions, like mutual
funds, broking firms and insurance companies, operating in the Indian market.
The introduction of capital adequacy norms, prudential regulation and world
class regulatory mechanisms to protect the interest of investor, besides the
strict requirement of disclosure, have given a boost to the confidence of
domestic and foreign investors. The Indian economy has slowly integrated
itself with the global economy and financial market.
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What is a 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.
Investments in securities are spread across a wide cross-section of industries and sectors
and thus the risk is reduced. Diversification reduces the risk because all stocks may not
move in the same direction in the same proportion at the same time. Mutual fund issues
units to the investors in accordance with quantum of money invested by them. Investors
of mutual funds are known as unit holders. The profits or losses are shared by the
investors in proportion to their investments. The mutual funds normally come out with a
number of schemes with different investment objectives which are launched from time to
time.
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.
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Custodian, who is registered with SEBI, holds the securities of various schemes of the
fund in its custody. The trustees are vested with the general power of superintendence
and direction over AMC. They monitor the performance and compliance of SEBI
Regulations by the mutual fund.
SEBI Regulations require that at least two thirds of the directors of trustee company or
board of trustees must be independent i.e. they should not be associated with the
sponsors. Also, 50% of the directors of AMC must be independent. All mutual funds are
required to be registered with SEBI before they launch any scheme. However, Unit Trust
of India (UTI) is not registered with SEBI (as on January 15, 2002).
Mutual funds invest the money collected from the investors in securities markets. In
simple words, Net Asset Value is the market value of the securities held by the scheme.
Since market value of securities changes every day, NAV of a scheme also varies on day
to day basis. The NAV per unit is the market value of securities of a scheme divided by
the total number of units of the scheme on any particular date. For example, if the market
value of securities of a mutual fund scheme is Rs 200 lakhs and the mutual fund has
issued 10 lakhs units of Rs. 10 each to the investors, then the NAV per unit of the fund is
Rs.20. NAV is required to be disclosed by the mutual funds on a regular basis - daily or
weekly - depending on the type of scheme.
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There are numerous benefits of investing in mutual funds and one of the key reasons for
its phenomenal success in the developed markets like US and UK is the range of benefits
they offer, which are unmatched by most other investment avenues. We have explained
the key benefits in this section. The benefits have been broadly split into universal
benefits, applicable to all schemes, and benefits applicable specifically to open-ended
schemes.
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1. Professional Management
The investor avails of the services of experienced and skilled professionals who are
backed by a dedicated investment research team which analyses the performance
and prospects of companies and selects suitable investments to achieve the
objectives of the scheme.
2. Diversification
3. Convenient Administration
Investing n in a Mutual Fund reduces paperwork and helps you avoid many
problems such as bad deliveries, delayed payments and unnecessary follow up with
brokers and companies. Mutual Funds save your time and make investing easy and
convenient.
4. Return Potential
Over a medium to long-term, Mutual Funds have the potential to provide a higher
return as they invest in a diversified basket of selected securities.
5. Low Costs
Mutual Funds are a relatively less expensive way to invest compared to directly
investing in the capital markets because the benefits of scale in brokerage, custodial
and other fees translate into lower costs for investors.
6. Liquidity
In open-ended schemes, you can get your money back promptly at net asset value
related prices from the Mutual Fund itself. With close-ended schemes, you can sell
your units on a stock exchange at the prevailing market price or avail of the facility
of direct repurchase at NAV related prices which some close-ended and interval
schemes offer you periodically.
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7. Transparency
8. Flexibility
Through features such as regular investment plans, regular withdrawal plans and
dividend reinvestment plans, you can systematically invest or withdraw funds
according to your needs and convenience.
9. Choice of Schemes
Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.
All Mutual Funds are registered with SEBI and they function within the provisions
of strict regulations designed to protect the interests of investors. The operations of
Mutual Funds are regularly monitored by SEBI.
All investments whether in shares, debentures or deposits involve risk: share value
may go down depending upon the performance of the company, the industry, state
of capital market and the economy; generally, however longer the term, lesser the
risk; companies may default in payment of interest/principal on their deposits/bonds
debentures; the rate of interest on investment may fall short of the rate of inflation
reducing the purchasing power.
While risk cannot be eliminated, skillful management can minimize risk. Mutual
fund helps to reduce risk through diversification and professional management. The
experience and expertise of Mutual Fund managers in selecting fundamentally
sound securities and timing their purchases and sales help them to build a diversified
portfolio that minimize risk and maximizes returns.
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12. Tax Benefits
The incomes under Mutual Funds are much more Tax efficient than any fixed
income security due to the following benefits:-
• Section 80L of the income Tax Act ,1961 enables tax free income up to rs
15000 and dividends from MF s are eligible for this benefit.
• When you invest for over a year, the tax payable on encashment is Long
term Capitals gains tax at 20%. Once also get an indexation benefit which
has been approximately 8% per year. This reduces the taxable income and
thus decreases the tax liability.
• There is also an opportunity to set off capital losses against gains from
income schemes.
• Full exemption from capital gains tax as it comes under Section 54EA/EB of
the income tax Act.
• One has to pay tax only when he encash units, but have to pay tax on the
interest earned on other debt instruments every year on an accrual basis,
even though he receives the interest later. This generates higher post tax
returns compared to other debt instruments.
Tax is just like a monster that frightens a number of individuals through out the
nation. There are just tow way to fight with this monater:
. Conceal/Depress Income
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Perhaps the second option is far better than the first as it gives the peace of
mind together with a feeling that one is a responsible citizen of the nation. With
increasing amount of awareness that is taking birth in the minds of investors,
mutual fund has become cynosure of the eye of the several investors.
. Mutual fund is fully exempted from the tax under Section10 (23D) of the
Income Tax Act1961.
. Mutual funds do not have to pay tax on trading profit, short term capital gain,
dividend income, underwriting commission, placement fees, long term capital
gains, other income, etc.
There are number of benefits that the investor of a mutual fund avail.
These are discussed as follows:
. Tax deduction at source- as per Section196A of the Income Tax Act, 1961, no
deduction of tax at source is made from any income payable to the unit holders.
This implies that there is no tax deduction at source for redemption up to any
limit.
As per Section194k of the I.T.Act 1961, deduction of tax at source is not made
if the dividend income from a mutual fund does not exceed Rs10000 per
annum.
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Detail Study Of HDFC Mutual Fund
Here less paper work is require than other. The investor give his detail
information like his/her name,age,address,phone no., pan card no, nominee
name and address(in case of minor) and three full signature of the candided.
No cash Transactions
Investor need not require paying cash, instead of cash investor has to pay
cheque or demand draft. Which help to prevent misappropriation and also
save the tax. Here the investor just writes the product name of mutual fund
and sign on it. It also saves the time.
No Age Bar
There is no age bar of investor here any age group can invest in mutual fund.
In case of minor(below 18 year) there is a nominee, so a child can invest
through his guardian and a person having age of 70 also invest in mutual
fund ,which is not possible in other investments.
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Detail Study Of HDFC Mutual Fund
ABOUT
HDFC –MUTUAL FUND
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Detail Study Of HDFC Mutual Fund
HDFC Mutual Fund is one of the largest mutual funds and well-established fund house in the
country with consistent and above average fund performance across categories since its
incorporation on December 10, 1999. While our past experience does make us a veteran, but
when it comes to investments, we have never believed that the experience is enough.
We Offer
We believe, that, by giving the investor long-term benefits, we have to constantly review the
markets for new trends, to identify new growth sectors and share this knowledge with our
investors in the form of product offerings. We have come up with various products across asset
and risk categories to enable investors to invest in line with their investment objectives and risk
taking capacity. Besides, we also offer Portfolio Management Services.
Our Achievements
HDFC Asset Management Company (AMC) is the first AMC in India to have been assigned the
‘CRISIL Fund House Level – 1’ rating. This is its highest Fund Governance and Process Quality
Rating which reflects the highest governance levels and fund management practices at HDFC
AMC It is the only fund house to have been assigned this rating for two years in succession.
Over the past, we have won a number of awards and accolades for our performance
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Detail Study Of HDFC Mutual Fund
3.2 - SPONSORS
Housing Development Finance Corporation Limited (HDFC). HDFC was
incorporated in 1977 as the first specialized Mortgage Company in India. HDFC provides
financial assistance to individuals, corporate and developers for the purchase or construction of
residential housing. It also provides property related services (e.g. property identification, sales
services and valuation), training and consultancy. Of these activities, housing finance remains
the dominant activity. HDFC has a client base of around 12 lac borrowers, around 8 lac
depositors, over 1.08 lac shareholders and 50,000 deposit agents, as at March 31, 2008. HDFC
has raised funds from international agencies such as the World Bank, IFC (Washington),
USAID, DEG, ADB and KfW, international syndicated loans, domestic term loans from banks
and insurance companies, bonds and deposits. HDFC has received the highest rating for its bonds
and deposits program for the thirteenth year in succession. HDFC Standard Life Insurance
Company Limited, promoted by HDFC was the first life insurance company in the private sector
to be granted a Certificate of Registration (on October 23, 2000) by the Insurance Regulatory and
Development Authority to transact life insurance business in India.
Standard Life Investments Limited. The Standard Life Assurance Company was
established in 1825 and has considerable experience in global financial markets. The company
was present in the Indian life insurance market from 1847 to 1938 when agencies were set up in
Kolkata and Mumbai. The company re-entered the Indian market in 1995, when an agreement
was signed with HDFC to launch an insurance joint venture. On April 2006, the Board of The
Standard Life Assurance Company recommended that it should demutualise and Standard Life
plc float on the London Stock Exchange. At a Special General Meeting held in May voting
members overwhelmingly voted in favour of this. The Court of Session in Scotland approved
this in June and Standard Life plc floated on the London Stock Exchange on 10th July 2006.
Standard Life Investments is a leading asset management company, with approximately US$ 267
billion as at March 31, 2008, of assets under management. The company operates in the UK,
Canada, Hong Kong, China, Korea, Ireland, Paris, Sydney and the USA to ensure it is able to
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Detail Study Of HDFC Mutual Fund
form a truly global investment view. In order to meet the different needs and risk profiles of its
clients, Standard Life Investments Limited manages a diverse portfolio covering all of the major
markets world-wide, which includes a range of private and public equities, government and
company bonds, property investments and various derivative instruments
3.3 - TRUSTEE
HDFC Trustee Company Limited, a company incorporated under the Companies Act, 1956 is the
Trustee to HDFC Mutual Fund vide the Trust deed dated June 8, 2000, as amended from time to
time. HDFC Trustee Company Ltd is wholly owned subsidiary of HDFC
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Detail Study Of HDFC Mutual Fund
1. HDFC Prudence Fund was the only scheme that won the CNBC - TV 18 - CRISIL Mutual Fund
of the Year Award 2008 in the Most Consistent Balanced Fund under CRISIL ~ CPR for the
calendar year 2007 (from amongst 3 schemes).
2. HDFC Cash Management Fund - Savings Plan was the only scheme that won the CNBC - TV
18 - CRISIL Mutual Fund of the Year Award 2008 in the Most Consistent Liquid Fund under
CRISIL ~ CPR for the calendar year 2007 (from amongst 5 schemes).
3. HDFC Cash Management Fund - Savings Plan was the only scheme that won the CNBC - TV
18 - CRISIL Mutual Fund of the Year Award 2008 in the Liquid Scheme – Retail Category for
the calendar year 2007 (from amongst 19 schemes).
1. HDFC MF Monthly Income Plan-Long Term Plan- Ranked a Seven Star Fund and has been
awarded the Gold Award for "Best Performance" in the category of "Open Ended Marginal
Equity" for the three year period ending December 31, 2007 (from amongst 27 schemes)
2. HDFC High Interest Fund - Short Term Plan - Ranked a Five Star Fund indicating
performance among the top 10% in the category of "Open Ended Debt - Short Term" for one
year period ending December 31, 2007 (from amongst 20 schemes).
3. HDFC Prudence Fund - Ranked a Five Star Fund indicating performance among the top 10%
in the category of "Open Ended Balanced" for the three year period ending December 31, 2007
(from amongst 16 schemes).
1. HDFC Equity Fund - Growth has been awarded the 'Best Fund over Ten Years' in the 'Equity
India Category' at the Lipper Fund Awards 2008 (form amongst 23 schemes). It was awarded
the Best Fund over ten years in 2006 and 2007 as well. 2008 makes it three in a row
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Benefit 1
Become A Disciplined Invester
Being disciplined - It’s the key to investing success. With the HDFC MF Systematic Investment
Plan you commit an amount of your choice (minimum of Rs. 1000 and in multiples of Rs. 100
thereof*) to be invested every month in one of our schemes.
Think of each SIP payment as laying a brick. One by one, you’ll see them transform into a
building. You’ll see your investments accrue month after month. It’s as simple as giving at least
6 postdated monthly cheques to us for a fixed amount in a scheme of your choice. It’s the perfect
solution for irregular investors.
*Minimum amounts may differ for each Scheme. Please refer to SIP Enrolment Form for details.
Benefit 2
Reach Your Financial Goal
Imagine you want to buy a car a year from now, but you don’t know where the down-payment
will come from. HDFC MF SIP is a perfect tool for people who have a specific, future financial
requirement. By investing an amount of your choice every month, you can plan for and meet
financial goals, like funds for a child’s education, a marriage in the family or a comfortable
postretirement life. The table below illustrates how a little every month can go a long way.
Monthly Savings - What your savings may generate
Savings per month Total amount invested Rate of return
(for 15 years) (Rs. in Lacs) 6.0% 8.0% 10.0%
(rupees in lacs, 15 years later)*
5000 9.0 14.6 17.4 20.9
4000 7.2 11.7 13.9 16.7
3000 5.4 8.8 10.4 12.5
2000 3.6 5.8 7.0 8.3
1000 1.8 2.9 3.5 4.2
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*Monthly instalments, compounded monthly, for a 15-year period.
Disclaimer: The illustration above is merely indicative in nature and should not be construed as
investment advice. It does not in any manner imply or suggest performance of any HDFC Mutual
Fund Scheme(s). Please read Risk Factors.
Benefit 3
Take Advantage of Rupee Cost Averaging
Most investors want to buy stocks when the prices are low and sell them when prices are high.
But timing the market is timeconsuming and risky. A more successful investment strategy is to
adopt the method called Rupee Cost Averaging. To illustrate this we’ll compare investing the
identical amounts through a SIP and in one lump sum.
Imagine Suresh invests Rs. 1000 every month in an equity mutual fund scheme starting in
January. His friend, Rajesh, invests Rs. 12000 in one lump sum in the same scheme. The
following table illustrate how their respective investments would have performed from Jan to
Dec:
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Detail Study Of HDFC Mutual Fund
*NAV as on the 10th every month. These are assumed NAVs in a volatile market
Disclaimer: The illustration above is merely indicative in nature and should not be construed
as investment advice. It does not in any manner imply or suggest performance of any HDFC
Mutual Fund Scheme(s). Rupee Cost Averaging neither ensures you profits nor protects you
from making a loss in declining markets. Please read Risk Factors.
As seen in the table, by investing through SIP, you end up buying more units when the price is
low and fewer units when the price is high. However, over a period of time these market
fluctuations are generally averaged. And the average cost of your investment is often reduced.
At the end of the 12 months, Suresh has more units than Rajesh, even though they invested the
same amount. That’s because the average cost of Suresh’s units is much lower than that of
Rajesh. Rajesh made only one investment and that too when the per-unit price was high.
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Benefit 4
Grow Your Investment With Compounded Benefits
It is far better to invest a small amount of money regularly, rather than save up to make one large
investment. This is because while you are saving the lump sum, your savings may not earn much
interest.
With HDFC MF SIP, each amount you invest grows through compounding benefits as well. That
is, the interest earned on your investment also earns interest. The following example illustrates
this.
Imagine Neha is 20 years old when she starts working. Every month she saves and invests Rs.
5,000 till she is 25 years old. The total investment made by her over 5 years is Rs. 3 lakhs.Arjun
also starts working when he is 20 years old. But he doesn’t invest monthly. He gets a large bonus
of Rs. 3 lakhs at 25 and decides to invest the entire amount.
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Both of them decide not to withdraw these investments till they turn 50. At 50, Neha’s
Investments have grown to Rs. 46,68,273* whereas Arjun’s investments have grown to Rs.
36,17,084*. Neha’s small contributions to a SIP and her decision to start investing earlier than
Arjun have made her wealthier by over Rs. 10 lakhs.
Disclaimer: TheThe illustration above is merely indicative in nature and should not be construed
as investment advice. It does not in any manner imply or suggest performance of any HDFC
Mutual Fund Scheme(s). Please read Risk Factors.
Benefit 5
Do All This Effortlessly
Investing with HDFC MF SIP is easy. Simply give us post-dated cheques or opt for an
Auto Debit from you bank account for an amount of your choice (minimum of Rs. 1000 and in
multiples of Rs. 100 thereof*) and we’ll invest the money every month in a fund of your choice.
The plans are completely flexible. You can invest for a minimum of six months, or for as long as
you want. You can also decide to invest quarterly and will need to invest for a minimum of two
quarters.
Currently, Fixed Systematic Transfer Plan (FSTP) - Monthly Interval and Capital Appreciation
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Detail Study Of HDFC Mutual Fund
Systematic Transfer Plan (CASTP) - Monthly Interval facility is available to the Unit holders on
1st, 5th, 10th, 15th, 20th and 25th of a month and FSTP - Quarterly Interval and CASTP -
Quarterly Interval facility is available to the Unit holders on 1st, 5th, 10th, 15th, 20th and 25th
of the first month of each quarter.
The Entry Load Structure for the transferee schemes - HDFC Growth Fund, HDFC Equity
Fund, HDFC Top 200 Fund, HDFC Capital Builder Fund, HDFC Core & Satellite Fund, HDFC
Premier Multi-Cap Fund, HDFC Balanced Fund, HDFC Prudence Fund, HDFC Long Term
Advantage Fund and HDFC TaxSaver will be as follows:
Thus, this facility offers the benefits similar to those of an SIP and is suitable for investors who
intend to invest systematically and currently have funds for investments.
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LIQUID FUND
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HDFC Long Term Equity Fund HDFC Cash Management Fund - Savings Plus
Plan
HDFC Infrastructure Fund
HDFC MF Monthly Income Plan - Long Term
HDFC Capital Builder Fund Plan
HDFC Arbitrage Fund HDFC High Interest Fund - Short term Plan
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Detail Study Of HDFC Mutual Fund
The investment philosophy rests on a two-pronged approach. 60-80% of the portfolio will
aim to stay invested for most of the time in large cap stocks that satisfy the above
investment criteria. This allocation to large cap stocks also ensures greater liquidity in the
portfolio. 20-40% of the portfolio will be invested in companies of scale that are either
large market share holder
HDFC
Sr.noGrowth Type (NAV as at evaluation date,
of Instruments Rs. 53.472
Normal Normal Risk Profile
Fund Per unit) Allocation Allocation
Date Period (%NAV Returns(%)
of Net Asset) $$ Asset)
(% of Net Benchmark
1 Equity & Equity related 80-100 ^ 00 Returns(%)#
Medium to high
March 30, 2007 instruments
Last 458 days 45.461 13.81** 2.37**
December 28, DebtLastSecurities, Money
Six months (185 79.6670 -32.88* 00 -33.38* Low to medium
2007 2 Marketdays)
instruments & Cash 00-20
(including money at call)
June 29, 2007 Last 1 Year (367 days) 54.695 -2.22** -8.07**
June 30, 2005 Last 3 Years (1096 25.499 27.97** 23.21**
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days)
June 30, 2003 Last 5 Years (1827 10.829 37.58** 30.1**
days)
June 30, 1998 Last 10 Years (3653 N.A N.A. 15.25**
days)
September 11, Since Inception (2849 10.000 23.96** 14.44**
2000 days)
SIP Returns
SIP Investments Since Inception 5 Year 3 Year 1 Year
Total Amount Invested (Rs.) 94,000.00 60,000.00 36,000.00 12,000.00
Market Value as on June 30, 2008 338,680.64 115,755.39 43,748.58 9,857.36
Returns (Annualised)*% 31.84% 26.64% 13.10% -31.44%
Benchmark Returns 22.77% 20.64% 6.77% -36.15%
# SENSEX
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Detail Study Of HDFC Mutual Fund
Investment Objective
The investment objective is to generate long term capital appreciation from a portfolio of equity
and equity linked instruments. The investment portfolio for equity and equity linked instruments
will be primarily drawn from the companies in the BSE 200 Index. Further, the Scheme may also
invest in listed companies that would qualify to be in the top 200 by market capitalization on the
BSE even though they may not be listed on the BSE This includes participation in large IPOs
where in the market capitalization of the company based on issue price would make the company
a part of the top 200 companies listed on the BSE based on market capitalization
Investment Pattern
The Scheme may also invest upto 25% of net assets of the Scheme in derivatives such as Futures
& Options and such other derivative instruments as may be introduced from time to time for the
purpose of hedging and portfolio balancing and and other uses as may be permitted under the
regulations and guidelines.
The Scheme may also invest a part of its corpus, not exceeding 40% of its net assets, in overseas
markets in Global Depository Receipts (GDRs), ADRs, overseas equity, bonds and mutual funds
and such other instruments as may be allowed under the Regulations from time to time.
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Returns
HDFC Top 200 (NAV as at evaluation date, Rs. 115.424
Fund Per unit)
Date Period NAV Returns(%) $$ Benchmark
^ Returns(%)#
March 30, 2007 Last 458 days 104.504 8.24** 4.45**
December 28, Last Six months (185 167.8880 -31.25* -37.53*
2007 days)
June 29, 2007 Last 1 Year (367 days) 120.34 -4.06** -8.85**
June 30, 2005 Last 3 Years (1096 57.343 26.23** 21.2**
days)
June 30, 2003 Last 5 Years (1827 23.358 37.6** 29.43**
days)
June 30, 1998 Last 10 Years (3653 12.749 27.12** 17.55**
days)
October 11, 1996 Since Inception (4280 10.000 25.3** 15.18**
days)
SIP Returns
SIP Investments Since 10 Year 5 Year 3 Year 1 Year
Inception
Total Amount Invested 141,000.00 120,000.0 60,000.00 36,000.0 12,000.00
(Rs.) 0 0
Market Value as on June 835,535.45 580,129.0 113,375.0 41,661.2 9,843.01
30, 2008 4 2 9
Returns (Annualised)*% 27.85% 29.65% 25.77% 9.73% -31.64%
Benchmark Returns 18.32% 20.25% 18.90% 5.82% -38.40%
Disclaimer: The above investment simulation is for illustrative purposes only and should not be
construed as a promise on minimum returns and safeguard of capital. The AMC / Mutual Fund is
not guaranteeing or promising or forecasting any returns. SIP does not assure a profit or
guarantee protection against a loss in a declining market. Please refer SIP Enrolment Form or
contact nearest ISC for SIP Load Structure
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Detail Study Of HDFC Mutual Fund
HDFC Equity Fund is an open-ended growth scheme, which aims to generate long-
term capital appreciation. The scheme maintains a focused portfolio predominantly
of large cap stocks, through there is controlled exposure to mid caps. The schemes
however always remain diversified across sectors. Moreover, the sectoral allocation
is done keeping in mind to diversify across sectors weakly co-related to each other
to further reduce risk. The underlying theme while managing the scheme is to invest
in businesses that are sustainable and for good quality.
Investment Strategy:
In order to provide long term capital appreciation, the Scheme will invest predominantly in
growth companies. Companies selected under this portfolio would as far as practicable consist of
medium to large sized companies which:
The aim will be to build a portfolio, which represents a cross-section of the strong growth
companies in the prevailing market. In order to reduce the risk of volatility, the Scheme
will diversify across major industries and economic sectors
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
Investment Pattern
The asset allocation under the Scheme will be as follows :
Investment in Securitised debt, if undertaken, would not exceed 20% of the net assets of the
scheme.
The Scheme may also invest upto 25% of net assets of the Scheme in derivatives such as Futures
& Options and such other derivative instruments as may be introduced from time to time for the
purpose of hedging and portfolio balancing and other uses as may be permitted under the
Regulations.
The Scheme may also invest a part of its corpus, not exceeding 40% of its net assets, in overseas
markets in Global Depository Receipts (GDRs), ADRs, overseas equity, bonds and mutual funds
and such other instruments as may be allowed under the Regulations from time to time. Also
refer to the Section on Policy on off-shore Investments by the Scheme(s).
If the investment in equities and related instruments falls below 70% of the portfolio of the
Scheme at any point in time, it would be endeavoured to review and rebalance the composition.
Not with standing anything stated above, subject to the regulations, the asset allocation pattern
indicated above may change from time to time, keeping in view market conditions, market
opportunities, applicable regulations and political and economic factors. It may be clearly
understood that the percentages stated above are only indicative and are not absolute and that
they can vary substantially depending upon the perception of the AMC, the intention being at all
times to seek to protect the NAV of the scheme. Such changes will be for short term and
defensive considerations. Provided further and subject to the above, any change in the asset
allocation affecting the investment profile of the Scheme and amounting to a change in the
Fundamental Attributes of the Scheme shall be effected in accordance with sub-regulation (15A)
of regulation 18 of SEBI regulations.
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Detail Study Of HDFC Mutual Fund
Returns
SIP Returns
Disclaimer:
The above investment simulation is for illustrative purposes only and should not be construed as
a promise on minimum returns and safeguard of capital. The AMC / Mutual Fund is not
guaranteeing or promising or forecasting any returns. SIP does not assure a profit or guarantee
protection against a loss in a declining market. Please refer SIP Enrolment Form or contact
nearest ISC for SIP Load Structure.
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Detail Study Of HDFC Mutual Fund
Investment Objective
To seek long-term capital appreciation by investing predominantly in equity and equity related
securities of companies engaged in or expected to benefit from growth and development of
infrastructure.
Investment Pattern:
The asset allocation under the respective Plans will be as follows:
Type of Instruments Minimum Maximum Risk Profile of the
Allocation (% of Allocation(% of Instrument
Net Assets) Net Assets)
Equity and Equity Related 65% 100% Medium to High
Instruments of infrastructure
/ infrastructure related
companies
Equity and Equity Related 0% 35% Medium to High
Instruments of companies
other than mentioned above
Debt Securities and Money 0% 35% Low to Medium
Market Instruments* and
Fixed Income Derivative ;
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
* Investments in securitised debt shall not normally exceed 30% of the net assets of the Scheme.
The Scheme may seek investment opportunity in Foreign Securities (max. 35% of net assets).
The Scheme may take derivatives position for hedging, portfolio balancing or to undertake any
other strategy as permitted under SEBI Regulations from time to time (max. 20% of the net
assets) based on the opportunities available subject to SEBI Regulations.
Returns
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
Investment Objective
The investment objective of the Scheme is to provide periodic returns and capital appreciation
over a long period of time, from a judicious mix of equity and debt investments, with the aim to
prevent/ minimise any capital erosion.
Returns
HDFC Prudence (NAV as at evaluation date, Rs. 112.678
Fund Per unit)
Date Period NAV Returns(%) $$ Benchmark
^ Returns(%)#
March 30, 2007 Last 458 days 110.132 1.84** 6.01**
December 28, Last 185 days 160.6870 -29.88* -22.7*
2007
June 29, 2007 Last 1 Year (367 days) 124.716 -9.6** -1.33**
June 30, 2005 Last 3 Years (1096 64.682 20.3** 15.38**
days)
June 30, 2003 Last 5 Years (1827 19.230 42.37** 19.31**
days)
June 30, 1998 Last 10 Years (3653 11.480 26.8** N.A.
days)
February 1, 1994 Since Inception (5263 10.000 20.41** N.A.
days)
# CRISIL Balanced Fund Index ~ Due to an over all sharp rise in the stock prices
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
$$ Adjusted for the dividends declared under the scheme prior to its splitting into the Dividend
and Growth Plan
Investment Strategy
As outlined above, the investments in the Scheme will comprise both debt and equities. The
Fund would invest in Debt instruments such as Government securities, money market
instruments, securitised debts, corporate debentures and bonds, preference shares, quasi
Government bonds, and in equity shares. In the long term, the mix between debt instruments and
equity instruments is targeted between 60:40 and 40:60 respectively. The exact mix will be a
function of interest rates, equity valuations, reserves position, risk taking capacity of the portfolio
without compromising the consistency of dividend pay out (in the case of Dividend Plan), need
for capital preservation and the need to generate capital appreciation.
Fund Manager
Mr. Prashant Jain
Mr. Anand Laddha - Dedicated Fund Manager - Foreign Securities
Investment Pattern
The following table provides the asset allocation of the Scheme's portfolio.
The asset allocation under the respective Plans will be as follows :
(Investment in Securitised debt, if undertaken,would not exceed 10% of the net assets of the
Scheme.)
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
While assuming such relative risk adjusted liquidity risk the fund managers
propose to capitalize on expected pick up reported earning as result of strong growth
prospects in the future. This eventually translates in to more liquidity depending on the
success of this strategy. Such opportunities are available in large companies as well as
small companies. While there is no criteria for stock selection based on market
capitalization the endeavor is to keep a balance of companies in the portfolio between big
and small companies, on one category overwhelming the other
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Detail Study Of HDFC Mutual Fund
2008
Growth Plan 18 69.918
Aug
2008
Investment Pattern
Investment in Securitised debt, if undertaken, would not exceed 20% of the net assets of
the scheme.
The Scheme may also invest upto 25% of net assets of the Scheme in derivatives such as
Futures & Options and such other derivative instruments as may be introduced from time
to time for the purpose of hedging and portfolio balancing and other uses as may be
permitted under the regulations and guidelines.
The Scheme may also invest a part of its corpus, not exceeding 40% of its net assets, in
overseas markets in Global Depository Receipts (GDRs), ADRs, overseas equity, bonds
and mutual funds and such other instruments as may be allowed under the Regulations
from time to time. Also refer to the Section on Policy on off-shore Investments by the
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
Benchmark Returns 15.04% 19.77% 17.56% 3.25% -40.27%
* Load is not taken into consideration and the Returns are of Growth Plan / Option. Investors
are advised to refer to the Relative Performance table furnished as above for non-SIP returns
Returns
HDFC Capital (NAV as at evaluation date, 64.169
Builder Fund Rs. Per unit)
Date Period NAV Returns(%) $ Benchmark
$^ Returns(%)#
March 30, 2007 Last 458 days 60.3 5.08** 1.47**
December 28, 2007 Last Six months 105.1230 -38.96* -39.38*
(185 days)
June 29, 2007 Last 1 Year (367 73.27 -12.36** -11.59**
days)
June 30, 2005 Last 3 Years (1096 37.474 19.62** 18.87**
days)
June 30, 2003 Last 5 Years (1827 13.117 37.32** 29.03**
days)
June 30, 1998 Last 10 Years (3653 7.480 23.96** 17.75**
days)
February 1, 1994 Since Inception 10.000 13.76** 7.95**
(5263 days)
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
PART
OF MY
SUMMER TRAINING
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
The single most important factor that drives HDFC Mutual Fund is its belief to give the
investor the chance to profitably invest in the financial market, without constantly worrying
about the market swings.
I had chosen the HDFC-mutual fund as it is one of the most highly reputed mutual fund
all over the INDIA and offers under study training to students during summer. I had the job of
convincing investors to choose HDFC mutual funds over others. For this purpose I also
maintained a database of all the investors who had been approached.
Money is a valuable asset and it is obvious that people think many times before investing
their money into any kind of funds. They frequently ask questions about the time period, interest
rates, current status of the share market, etc which requires good running knowledge in the field.
It was not very easy to convince people to make investment in the HDFC mutual funds but with
the help of Mr. Manmohan Mohapatra, Branch Manager, of HDF-mutual fund Rourkela branch.
I accomplished my task.
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
The largest amount of investment was made by Mr. MD ABID ,an amount of 1,50,000 , in the
scheme HDFC- equity fund for a duration of years.
Other investors were
During the training period i managed to convince people to make investment in Hdfc Mutual
funds.The total amount of trasaction i provided was about Rs 7,00,000
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
METHODOLOGY
OF
THE STUDY
1. RESEARCH
METHODOLOGY
2. SOURCES OF DATA
COLLECTION
3. HYPOTHESIS OF THE
STUDY
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
The secondary data are those, which have already been collected by
someone else thorough Books, Internet, Television, journals, Magazines, etc.
On the other hand primary data does not exist here. The researcher has to
gather primary data afresh for the specific study undertaken by him. Primary
data has been collected here by questionnaire method and personal
interview method is followed. Primary sources such as Interviews,
Observation, and attending training and development classes. Secondary
sources such as Booklets, Monthly journal, Magazines, Official files etc.
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Detail Study Of HDFC Mutual Fund
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Detail Study Of HDFC Mutual Fund
150
No of respondent - 200 100
135
Male - 135 50
65
Female - 65 0
male female
Respondent
The survey is conducted on a sample of 200 people which includes 110 males
and 90 females. The sample contains consumers from all the age groups so
that an ideal sample can be obtained.
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Detail Study Of HDFC Mutual Fund
of?
Postal schemes
Government securities
Direct equity investment
Bank FD’s
Mutual funds
Insurance
INFERENCE:
According to the investors in Rourkela, 33% of investors prefer to
deposit there money in bank FD’s. Where as 8% of the investors want to
invest in postal scheme, 4% in government security, 15% invest in direct
equity 20% of investors they prefer mutual fund & insurance, as there
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
investment house which is not very high, but at the same time mutual fund
concept is growing
2. More attractive about mutual funds?
Returns
Moderate risk
Tax benefits
Hassle free
Past performance
Well regulated
No idea
.
INFRENCE:
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
Below 20%
20 to 50%
50 to 80%
80% above
INFRENCE:
By this we come to know that most of the people use to go for mutual
fund as we can see by the above graph that 83 people from 200 goes for 20%
to50% investment in Mutual Funds.
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
HDFC MF
ABN AMRO MF
PRUDENTIAL ICICI MF
RELIANCE MF
BIRLA SUNLIFE
INFERENCE:
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
Solely of my own
On advise of a friend
On advise of a distributor/agent
On advise of your banker
On advice of mutual fund house people
INFRENCE:
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Detail Study Of HDFC Mutual Fund
INFRENCE:
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Detail Study Of HDFC Mutual Fund
7. Among the huge number of people going for mutual fund, in which
kind of fund they normally invest?
Equity Oriented
Debt Oriented
Balanced Oriented
INFERENCE:
In the city like Rourkela in between the age group 18-30, 62% investor
invested in equity oriented, and only 18% people invest in debt fund. But
group of people more than 50 year 55% investor invest in debt fund and only
23% people invest in equity fund. It mean younger people attract with equity
fund and old man attract with debt fund. but in balanced fund every groups
are equally invest
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
INFERENCE:
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Detail Study Of HDFC Mutual Fund
Yes
No
INFRENCE:
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Detail Study Of HDFC Mutual Fund
QUESTIONARE
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Detail Study Of HDFC Mutual Fund
Questionnaire
Please fill up the questionnaire according to the questions asked. (Just put on a tick mark
[√] wherever needed)
Name - _______________________________________________________
< 30-40
< 40-50
< 50-above>
Service (Pvt.)
Business
Self-employed
Retired
Organization - _______________________________________________________
Designation - _______________________________________________________
1 – 3 lakh
3 – 5 lakh
Above 5 lakh
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Detail Study Of HDFC Mutual Fund
1. What are the Investment Avenues available in the market, that you are aware of?
2. Are you aware of the fact that some of the performing Mutual fund schemes in the
industry have posted 20% + annualized returns in last 10 years?
Yes No
4. If you have invested in Mutual funds, what percentage of your entire investment
includes mutual funds?
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Detail Study Of HDFC Mutual Fund
6. Now, what new avenues are included in your Investment portfolio?
Solely of my own
On advise of a friend
On advise of a distributor/agent
On advise of your banker
On advice of mutual fund house people
8. How do you rate these while taking an investment decision? (Rate as 1,2,3,4,5
according to preference)
9. You believe in …
10. Have you been ever approached by a Certified Investment Financial Planner?
Yes No
11. Would you like to undergo a financial planning exercise for yourself?
Yes No
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
FINDING,
RECOMMENDATION,
&
CONCLUSION
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
FINDINGS
In India Mutual fund Industry has seen Dramatic improvements in Quality as well as quality of
products and services offering over the past decade, but the industry has witnessed growth in the
last 10 years considerably below potential. The Asset under Management have grown from about
Rs. 470 billion in march 1993 to Rs. 1,540 billion in April 2004(CAGR of 11.4 percent) & now
it grown to Rs. 5,620 billion till sep 2008. This has mainly achieved due to collection through
mutual fund IPO’s that has been increasing due to the investors feeling that it is cheaper in its
IPO stage on account of its Rs. 10 NAV.
There has been a strong appreciation in equities in comparison to the debt market, which has
shown a downward trend last year. And in turn Mid-cap and diversified funds have delivered the
highest in comparison to other funds. As the Indian economy is showing a growing trend with
GDP more than 6% and expected to show 8% and Indian household saving being 24% of the
entire GDP. There is a strong growth potential of Mutual fund industry in India.
In Orissa i.e. rural area it is still a new concept so it will take some more time to really penetrate
into this market apart from people who are HNI’s though these people are given more emphasis
by all the Mutual funds and distribution channels. With the introduction of SIP’s the industry has
created some options clear for retail investors to enter this market. My survey says that it the
awareness level that is playing acting as an obstacle in the growth of Mutual fund Industry in
Orissa as a whole.
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
RECOMMENDATION
HDFC Mutual Fund is one of the largest mutual funds and well-established fund house in the
country with consistent and above average fund performance across categories since its
incorporation on December 10,1999.The single most important factor that drives HDFC Mutual
Fund is its belief to give the investor the chance to profitably invest in the financial market,
without constantly worrying about the market swings.
2) Agents, Service personnel must be able to give correct and timely information
about NAV and the return on different schemes.
4) Scheme should be offered as per the needs and the requirement of the industries.
5) The regulatory norms provided by the regulatory authorities like SEBI are
required to be known to all including investors.
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
CONCLUSION
The global financial market has transformed from Seller’s market to Buyer’s market with
liberalization, Globalizations and privatization. The Indian mutual fund market has also become
global when foreign funds entered, they came up with probably best marketing strategies to beat
Indian giants like BIRLA, HDFC, and ICICI have come up with aggressive strategies to beat the
foreign funds. Now the cutthroat competition goes on and on.
HDFC Mutual funds have rewarded investors with hand some returns. The good news is that this
is poised to become a trend. The mutual funds have strengthened their distribution networks,
become more transparent and investor friendly and are rewarding investors. The mutual fund is
finally, proving itself as a vehicle of safety for investments. But it is still the fund manager’s
investment philosophy that makes the difference between the winner and the losers.
MD NABEEL 9
Detail Study Of HDFC Mutual Fund
BIBLIOGRAPHY
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Detail Study Of HDFC Mutual Fund
BIBLIOGRAPHY:-
MAGAZINES
INDIA TODAY
BUSINESS WORLD
WEB SITES
WWW.HDFCFUND.COM
http://www.hdfcfund.com/AboutUs/
http://www.hdfcfund.com/Products/
WWW.AMFIINDIA.COM
http://www.amfiindia.com/showhtml.asp?page=mfconcept#A
JOURNAL
INTOUCH MUTUALLY
Vol. no. 5 Issue no. 11 may 2008
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Detail Study Of HDFC Mutual Fund
MD NABEEL 9