1

MENTORING REPORT ON
COMPARATIVE STUDY OF HDFC & ICICI MUTUAL FUND
IN INDIA
Submitted in the Partial Fulfillment for the Requirement
of
Post Graduate Diploma in Management
(PGDM)







SUBMITTED TO: SUBMITTED BY: JUNAID RAZA
MR. RAVI ROLL NO: 54
DR. GARIMA SACHDEVA PGDM- II (A)



Jagannath International Management School
Kalkaji, New Delhi

2
CERTIFICATE
I JUNAID RAZA hereby declare that this Project Report entitled submitted by me
to the Jagannath International Management School, kalkaji, NewDelhi, is a
bonafide work undertaken by me and it is not submitted to any other university
or Institution for the award of any degree diploma/certificate or published any
time before.


__________________
Signature of the student










3
CONTENTS

SNO. TOPICS PAGE
NO
1
INTRODUCTION
7-25
2
COMPANY PROFILE
26-43
3
RESEARCH AND
METHODOLOGY
44-47
4
ANALYSIS AND FINDINGS
48-60
5
CONCLUSION AND
RECOMMENDATIONS
61-63
6
APPENDICES
64-65



4
ACKNOWLEDGEMENT

This project COMPARATIVE STUDY OF HDFC & ICICI MUTUAL FUND IN INDIA
is a result of co-operation, hard work and good wishes of many people. I would like to
thank our project guide external mentor (Mr RAVI) for her involvement in the project
work and timely assessment that provided me inspiration and valued guidance through
out my study.
I am highly indebted to our internal mentor (DR GARIMA SACHDEVA), and Director of
JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL KALKAJI, for giving us an
opportunity to do a project.

I would like to express gratitude towards my parents, teachers of . JAGANNATH
INTERNATIONAL MANAGEMENT SCHOOL KALKAJI , the library staff and college
friends whose co-operation, encouragement and efforts have helped me in giving the
final shape and structure to the project.

My thanks and appreciations also go to my college mates and to all those people who
have willingly helped me out with their abilities.








5
ABSTRACT

If size is the measure of dominance, then the Indian mutual fund industry
can now boast on that. With the total Asset Under Management (AUM)
increasing from Rs.1,01,565 Crores in Jan 2000 to Rs.8,82,410.82
Crores by DECEMBER 2013, according to the Association of Mutual
Funds in India (AMFI), the industrys growth has been nothing but
exceptional. It has indeed come a long way from being a single player,
single scheme (US-64) industry to having 34 players and more than 480
schemes. What has driven the growth? Numbers of factors have
contributed to the surge in the industrys growth. First and foremost, a
buoyant domestic economy coupled with a booming stock market has been
one of the major drivers of the growth in recent times particularly in the last
five-year. Another significant factor facilitating this growth has been a
conducive regulatory regime, thanks to increased effort by SEBI to improve
market surveillance and protect investors interests. Further, incentives,
such as making dividend tax free in the hands of investors have also
provided strong impetus to the growth.This research covers various aspect
of mutual funds industry in India.Starting with basic concept of mutual fund
and its advantages it would give detail about the growth of mutual fund
industry in India, its present scenario. It also throws some light on major
mutual fund companies in India, the different types of mutual funds on the
basis of structure, investment, load and schemes and also it covers the
different phases of growth of mutual fund industry. Then it covers the
calculation of NAV, the various investmentplans, factors that help in
calculating the mutual fund performance.In the end mutual fund analysis

6
have been done on the basis of Standard Deviation, Beta, Alpha, R
Squared, Treynor Ratio & Sharpe Ratio on various schemes like Equity
based Funds, Debt based Funds, Monthly Income Plans,Cash Funds &
ELSS Tax Saver Schemes.



















7
CHAPTER- I

INTRODUCTION

MUTUAL FUND













8
WHAT ARE MUTUAL FUNDS?
Mutual Fund is an investment company that pools money from shareholders and invests
in a variety of securities, such as stocks, bonds and money market instruments. Most
open-end mutual funds stand ready to buy back (redeem) its shares at their current net
asset value, which depends on the total market value of the fund's investment portfolio
at the time of redemption. Most open-end mutual funds continuously offer new shares to
investors.
Also known as an open-end investment company, to differentiate it from a closed-end
investment company. Mutual funds invest pooled cash of many investors to meet the
fund's stated investment objective. Mutual funds stand ready to sell and redeem their
shares at any time at the fund's current net asset value: total fund assets divided by
shares outstanding.
In Simple Words, 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. In India, 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.
In Short, a mutual fund is a common pool of money in to which investors with common
investment objective place their contributions that are to be invested in accordance with

9
the stated investment objective of the scheme. The investment manager would invest
the money collected from the investor in to assets that are defined/ permitted by the
stated objective of the scheme. For example, an equity fund would invest equity and
equity related instruments and a debt fund would invest in bonds, debentures, gilts etc.
Mutual Fund is a 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.













10
MUTUAL FUND CONCEPT
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, 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. 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. The flow
chart below describes broadly the working of a mutual fund:








11
HISTORY
In the Beginning Historians are uncertain of the origins of investment funds; some cite
the closed-end investment companies launched in the Netherlands in 1822 by King
William I as the first mutual funds, while others point to a Dutch merchant named
Adriaan van Ketwich whose investment trust created in 1774 may have given the king
the idea. Ketwich probably theorized that diversification would increase the appeal of
investments to smaller investors with minimal capital. The name of Ketwich's
fund, Eendragt Maakt Magt, translates to "unity creates strength". The next wave of
near-mutual funds included an investment trust launched in Switzerland in 1849,
followed by similar vehicles created in Scotland in the 1880s.
The idea of pooling resources and spreading risk using closed-end investments soon
took root in Great Britain and France, making its way to the United States in the 1890s.
The Boston Personal Property Trust, formed in 1893, was the first closed-end fund in
the U.S.The creation of the Alexander Fund in Philadelphia in 1907 was an important
step in the evolution toward what we know as the modern mutual fund. The Alexander
Fund featured semi-annual issues and allowed investors to make withdrawals on
demand.

The Arrival of the Modern Fund
The creation of the Massachusetts Investors' Trust in Boston, Massachusetts, heralded
the arrival of the modern mutual fund in 1924. The fund went public in 1928, eventually
spawning the mutual fund firm known today as MFS Investment Management. State
Street Investors' Trust was the custodian of the Massachusetts Investors' Trust. Later,
State Street Investors started its own fund in 1924 with Richard Paine, Richard
Saltonstall and Paul Cabot at the helm. Saltonstall was also affiliated with Scudder,
Stevens and Clark, an outfit that would launch the first no-load fund in 1928. A
momentous year in the history of the mutual fund, 1928 also saw the launch of the
Wellington Fund, which was the first mutual fund to include stocks and bonds, as
opposed to direct merchant bank style of investments in business and trade.

12

Regulation and Expansion
By 1929, there were 19 open-ended mutual funds competing with nearly 700 closed-
end funds. With the stock market crash of 1929, the dynamic began to change as
highly-leveraged closed-end funds were wiped out and small open-end funds managed
to survive.
More than 50% of retirement age individuals to not have enough savings
Government regulators also began to take notice of the fledgling mutual fund industry.
The creation of the Securities and Exchange Commission (SEC), the passage of
the Securities Act of 1933 and the enactment of the Securities Exchange Act of
1934 put in place safeguards to protect investors: mutual funds were required to register
with the SEC and to provide disclosure in the form of a prospectus. The Investment
Company Act of 1940put in place additional regulations that required more disclosures
and sought to minimize conflicts of interest. (For further reading, see Policing The
Securities Market: An Overview Of The SEC.)

The mutual fund industry continued to expand. At the beginning of the 1950s, the
number of open-end funds topped 100. In 1954, the financial markets overcame their
1929 peak, and the mutual fund industry began to grow in earnest, adding some 50 new
funds over the course of the decade. The 1960s saw the rise of aggressive growth
funds, with more than 100 new funds established and billions of dollars in new asset
inflows.
Hundreds of new funds were launched throughout the 1960s until the bear market of
1969 cooled the public appetite for mutual funds. Money flowed out of mutual funds as
quickly as investors could redeem their shares, but the industry's growth later resumed.
Recent Developments In 1971, William Fouse and John McQuown of Wells Fargo
Bank established the first index fund, a concept that John Bogle would use as a
foundation on which to build The Vanguard Group, a mutual fund powerhouse

13
renowned for low-cost index funds. The 1970s also saw the rise of the no-load fund.
This new way of doing business had an enormous impact on the way mutual funds were
sold and would make a major contribution to the industry's success.
With the 1980s and '90s came bull market mania and previously obscure fund
managers became superstars; Max Heine, Michael Price and Peter Lynch, the mutual
fund industry's top gunslingers, became household names and money poured into the
retail investment industry at a stunning pace. More recently, the burst of the tech bubble
and a spate of scandals involving big names in the industry took much of the shine off of
the industry's reputation. Shady dealings at major fund companies demonstrated that
mutual funds aren't always benign investments managed by folks who have their
shareholders' best interests in mind.

Conclusion
Despite the 2003 mutual fund scandals and the global financial crisis of 2008-2009, the
story of the mutual fund is far from over. In fact, the industry is still growing. In the U.S.
alone there are more than 10,000 mutual funds, and if one accounts for all share
classes of similar funds, fund holdings are measured in the trillions of dollars. Despite
the launch of separate accounts, exchange-traded funds and other competing products,
the mutual fund industry remains healthy and fund ownership continues to grow.







14
Indian Scenario of Mutual Fund

The origin of mutual fund industry in India is with the introduction of the concept of
by UTI in the year 1963. Through the growth was slow, but it accelerated from the
year 1987 when non-UTI players entered in industry. The mutual fund industry goes
through four phases:-
First phase 1964-87 (Establishment of UTI).
Second phase 1987-93 (Entry of public sector funds).
Third phase 1993-2003 (Entry of a private sector funds).
Fourth phase since feb.2003 (Bifurcated of UTI).
In the first phase, UTI was established in 1963 by an act of
parliament. In 1978 it was delinked from RBI & the IDBI took over the control of UTI.
In second phase, SBI entered as first non-UTI mutual fund provider then it was
followed by can bank (Dec. 87). PNB (Aug 89) & LIC in 1989. In third phase, the
private sector entered in it. The Erstwhile Kothari pioneer (now merged with Franklin
Templeton) was first registered in July 1993 in mutual fund. In revised registration of
SEBI I n 1993 the industry functions under SEBI. And the fourth phase had bitter
experience for UTI. It was bifurcated into two separate entities. One is the specified
under taking of UTI with AUM of 29,835cr. The second is UTI mutual fund ltd.
Sponsored by SBI, PNB, BOB and LIC& it is registered with SEBI.






15
DEFINITION
The securities & Exchange Board of India (mutual funds) regulations, 1993 defines a
mutual fund as a fund established in the form of a trust by a sponsor, to raise money by
trustees through the sale of units to the public, under one or more schemes, for
investing in securities in accordance with these regulations.
These mutual funds are referred to as Unit Trusts in the U.K. and as open end
investment companies in the U.S.A. therefore, Kamm, J.O. defines an open end
investment company as an organization formed for the investment of funds obtained
from individuals & institutional investors who in exchange for the funds receive shares
which can be redeemed at any time at their underlying asset values.
According to Weston J. Fred & Brigham, Eugene, F., Unit Trusts are corporations
which accepts dollars from savers and then use these dollars to buy stocks, long term
bonds, short term debt instruments issued by business or government units; these
corporations pool funds & thus reduce risk by diversifications.
Thus, mutual funds are corporations which pool funds by selling their own shares &
reduce risk by diversification.








16
WHO ARE THE PARTIES INVOVED?
INVESTORS
Every investor, given her financial position & personal disposition, has a certain
inclination to take risk (risk profile or risk appetite). The hypothesis is that by taking an
incremental risk (of losing capital, wholly or partly), it would be possible for the investor
to earn an incremental return.
But assuming risk without regularly monitoring it is foolhardy. Therefore, it would be
prudent for investors who take a risk to be able to manage this risk.
A mutual fund is the solution for investors who lack the time, the inclinations or the skills
to actively manage their investment risk in individual securities.
The following categories of investors are eligible to invest in Indian mutual funds:
Resident Indian adult individuals, either singly or jointly (not exceeding three);
Parents & lawful guardians on behalf of minors;
Companies, corporate bodies registered in India;
Registered societies & co-operative societies authorized to invest in such units;
Partners of partnership firms;
Hindu undivided families (HUFs), in the sole name of the karta;
Banks (including co-operative banks & regional rural banks) & financial
institutions & investment institutions;
Other mutual funds registered with SEBI;

TRUSTEES
Trustees are the people within a mutual fund organization who are responsible for
ensuring that investors interests in a scheme are properly taken care of.
In return for their services, they are paid trustee fees, which are normally charged to the
scheme.

17
ASSET MANAGEMENT COMPANY (AMC)
AMCs manage the investment portfolios of schemes. An AMCs incomes comes the
management fees it charges the schemes it manages. The management fee is
calculated as a percentage of net assets managed. Some countries provide for
performance based management fees as well.
In order to earn management fee, an AMC has naturally to employ people & bear all the
establishment cost that are related to its activity, such as for premises, furniture,
computers & other assets, software development, communication costs, etc.
The break-even level of AUM is a function of cost structure of AMC & distribution of
assets between its different types of schemes since debt schemes & index schemes
generally yield a lower management fee.
DISTRIBUTORS
Distributors earn a commission for bringing investors into the schemes of a mutual fund.
This commission is an expense for the scheme, although there are occasions when an
AMC may choose to bear the cost, wholly or partly.
Depending on the financial & physical resources at their disposal, the distributors could
be:
Tier 1 distributors who have their own or franchised network reaching out to investors all
across the country; or
Tier 2 distributors who are generally regional players with some reach within their
region; or
Tier 3 distributors who are small & marginal players with limited reach.
REGISTRARS
An investors holding in mutual fund schemes in typically tracked by the schemes
registrar & transfer agent (R&T). Some AMCs prefer to handle this role in-house, i.e. on

18
their own instead of appointing an R&T. The registrar or the AMC as the case may be
maintains an account of the investors investments in and disinvestments from the
scheme. Requests to invest more money into a scheme or to redeem money against
existing investment in a scheme are processed by the R&T.
CUSTODIAN / DEPOSITORY
The custodian maintains custody of the securities in which the schemes invests as
distinct from the registrars who tracks the investment by investors in the schemes. This
ensures an ongoing independent record of the investments of the scheme. The
custodian also follows up on various corporate actions, such as rights, bonus &
dividends declared by investee companies.
In a situation where a securities are increasingly being dematerialized, the role of the
depository for such independent record of investments is growing.











19
SWOT ANALYSIS
Strengths: characteristics of the business or project that give it an advantage over
others.
Weaknesses: characteristics that place the team at a disadvantage relative to others
Opportunities: elements that the project could exploit to its advantage
Threats: elements in the environment that could cause trouble for the business or
project

















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SWOT ANALYSIS OF MUTUAL FUNDS


STRENGTHS


WEAKNESS


Option available
Diversification
Professional management
Potential returns
Well regulated
Technical analysis
Convenient administration
Return potential
Low cost
Transparency
Affordability
Flexibility.



No control over cost
No tailor made portfolio
Managing a portfolio of funds
Cost of churn.




OPPORTUNITIES


THREATS


Bid scope for expansion
Saving rate in India
Growing cities
Online trading of mutual funds
Like equity & commodity
Clubbing up with other
investments.



Uncertainity
Change of market trends
Increasing number of assets
management companies.


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TYPES OF MUTUAL FUND













Growth
Income
Balanced
Money Market
Open Ended
Close
Internal
Structure
Investment
objective
Special schemes
Industry specific
Specific
Index schemes
Sector schemes
Types of
Mutual Fund

22
Advantages of Mutual Funds
Diversification.
Professional Management.
Liquidity (mainly in case of opened mutual funds).
Regulatory.
Convenience.
Low cost.
Reduction of transaction cost.
Diverse returns.
Advantages to Industrial concern.
Tax relief.
Attract foreign Capital.
Reduction / Diversification of risk.

Drawbacks of Mutual fund
No guaranties.
Fees & Commission.
Taxes.











23
Other Players in Mutual Fund
Bank of Baroda mutual fund (BOB MF) 30OCT. 1992.
Benchmark mutual funds (June 12, 2001).
Birla Sun life MF (1871).
Chola mutual fund (3 Jan. 1997).
Can bank mutual fund (Dec. 19, 1987).
LIC mutual fund (19
th
June, 1989).
Reliance mutual fund (30June, 1995).
Sahara mutual fund (18 July, 1996).
GIC (General Insurance Corporation of India). Etc.















24
FUTURE OF MUTUAL FUND IN INDIA
MF industry's assets under management hit a record high of Rs 9.58 lakh crore in
August 2013 and have remained near Rs 9 lakh crore as the year draws to a close.

Fund houses are upbeat about an even better performance in 2014 on account of
various measures initiated by market regulator Sebi as well as plans of individual
players to expand the distribution network across the country, particularly to smaller
cities.

Industry body AMFI (Association of Mutual Funds in India) Chairman and leading fund
house Reliance MF chief Sundeep Sikka said that "2014 would be one of the best year
for the mutual fund industry as markets are moving in the upward direction".

Market participants are optimistic about equity schemes in 2014 on hopes that a stable
government - to be set up after the general elections in the first half - will help boost the
stock markets. Debt funds are also expected to continue attracting investors in the first
half of the new year.
In 2013, the total assets under management (AUM) of all fund houses put together
soared by 11 per cent on strong inflows in categories such as bonds and liquid funds,
industry estimates show.
This was the second consecutive yearly rise in the industry AUM, after a drop in the
assets base for two preceding years.
The total industry AUM stood at Rs 8.08 lakh crore at the end of 2012, while the same
was Rs 6.11 lakh crore at 2011-end. It was about Rs 6.26 lakh crore in 2010 and Rs
6.65 lakh crore in 2009.
Mutual funds collect money from investors and later invest the same into various market
segments including stocks, IPOs (primary market) and bonds.

25

Market participants said that with elections on the anvil an element of 'uncertainty' could
prevail for the mutual fund industry for the next quarter or so in.
"I am very positive and confident that 2014 would be a very good year for the mutual
fund industry," Axis Mutual Fund MD and CEO Chandresh Nigam said.
However, PwC India Asset Management Leader Gautam Mehra said: "With elections on
the anvil, an element of 'uncertainty' could prevail for the next quarter or so."

During 2013, the performance of the mutual fund industry has, to an extent, mirrored the
performance of the Indian economy, the stock markets and the FII investment flows.
This year, not a single new license was issued and the sector has not witnessed any
fresh foreign investment. On the contrary, 2013 was a year of consolidation for the
industry.

HDFC MF, with assets of over Rs 1 lakh crore, agreed to buy all eight schemes of
Morgan Stanley with combined assets of Rs 3,290 crore. Besides, Daiwa sold its assets
to SBI Mutual Fund for an undisclosed amount this year.
For most part of the year, the bond funds had garnered a major share of incremental
AUM. However, it is only in the last two months that have witnessed a significant rise in
the AUM of the liquid category.
The data also suggests that the rise in the industry AUM is predominantly due to the
flows into the liquid category on the back of higher than expected FCNR (Foreign
Currency Non-resident) deposits mobilization by banks and in the absence of a strong
credit growth.
Inflows in income and liquid funds have contributed the most to the industry's rising
AUM. With inflows of a staggering Rs 1.4 lakh crore, liquid funds AUM surged to Rs
2.46 lakh crore. A similar trend was seen in income funds, where inflows rose to around
Rs 23,000 crore taking the assets managed by the fund to Rs 4.31 lakh crore.

26




CHAPTER-II

Company profile

HDFC & ICICI MUTUAL
FUNDS







27

HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (HDFC)
HDFC Ltd. was incorporated in 1977 as the first specialized mortgage company in India.
HDFC provides financial assistance to individuals, corporate and developers for the
purchase or construction of residential housing. It also provides property related
services (e.g. property identification, sales services and valuation), training and
consultancy. Of these activities, housing finance remains the dominant activity. HDFC
has a client base of around 13 lac borrowers, over 15 lac depositors, over 1.9 lac
shareholders and over 25,000 deposit agents, as at September 30, 2013.
As at September 30, 2013, HDFC had mortgage loan assets of Rs. 1,8488.86
billion. Since inception, HDFC has financed over 4.4 million housing units. 74% of
shareholders in HDFC are foreign investors. HDFCs market capitalization as at
September 30, 2013 stood at approximately Rs 1,186.66 billion.
HDFC 's borrowings consists of domestic term loans from banks and insurance
companies, bonds and retail deposits. HDFC has received the highest rating for its
bonds and deposits program for the Nineteenth year in succession.
As part of HDFCs developmental initiatives, the company has set up institutions in
various fields including credit rating, consumer finance, leasing, infrastructure, and IT-
enabled services.
Over the years, the HDFC group has emerged as a strong financial conglomerate in the
Indian capital markets with a presence in banking, life and general insurance, asset
management and venture capital. HDFCs key associate and subsidiary companies
include HDFC Bank Limited, HDFC Standard Life Insurance Company Limited, HDFC

28
Ergo General Insurance Company Limited, HDFC Asset Management Company
Limited, GRUH Finance Limited, HDFC Venture Capital Limited and Credila Financial
Services Limited.
STANDARD LIFE INVESTMENTS LIMITED
The Standard Life Assurance Company was established in 1825 and has considerable
experience in global financial markets. The company was present in the Indian life
insurance market from 1847 to 1938 when agencies were set up in Kolkata and
Mumbai. The company re-entered the Indian market in 1995, when an agreement was
signed with HDFC to launch an insurance joint venture.
In April 2006, the Board of The Standard Life Assurance Company recommended that it
should demutualise and Standard Life plc float on the London Stock Exchange. At a
Special General Meeting held in May 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 10 July 2006.
Standard Life Investments was launched as an investment management company in
1998. It is the dedicated investment management company of the Standard Life group
and is a wholly owned subsidiary of Standard Life Investments (Holdings) Limited,
which in turn is a wholly owned subsidiary of Standard Life plc.
With global assets under management of approximately US$240.7 billion (154.9
billion) as at December 31, 2011, Standard Life Investments Limited is one of the
world's major investment companies, operating in the UK, Canada, Hong Kong, China,
Korea, Ireland, Australia and the USA, and is responsible for investing money on behalf
of five million retail and institutional clients worldwide.
In order to meet the different needs and risk profiles of its clients, Standard Life
Investments Limited manages a diverse portfolio covering all of the major markets
world-wide, which includes a range of private and public equities, government and
company bonds, property investments and various derivative instruments. The

29
company's current holdings in UK equities account for approximately 1.8% of the market
capitalization of the London Stock Exchange. For more information log on to the
websitewww.standardlifeinvestments.com
HDFC Asset Management Company Limited (AMC)
HDFC Asset Management Company Ltd (AMC) was incorporated under the Companies
Act, 1956, on December 10, 1999, and was approved to act as an Asset Management
Company for the HDFC Mutual Fund by SEBI vide its letter dated July 3, 2000.

The registered office of the AMC is situated at HUL House, 2nd Floor, H. T. Parekh
Marg, 165-166, Backbay Reclamation, Churchgate, Mumbai - 400 020.
In terms of the Investment Management Agreement, the Trustee has appointed the
HDFC Asset Management Company Limited to manage the Mutual Fund. The paid up
capital of the AMC is Rs. 25.241 crore as on September 30, 2013.
The equity shareholding pattern of the AMC as on September 30, 2013 is as follows :
Particulars % of the paid up equity
capital
Housing Development Finance Corporation Limited 59.81
Standard Life Investments Limited 39.87
Other Shareholders (shares issued on exercise of Stock
Options)
0.32
Zurich Insurance Company (ZIC), the Sponsor of Zurich India Mutual Fund, following a
review of its overall strategy, had decided to divest its Asset Management business in
India. The AMC had entered into an agreement with ZIC to acquire the said business,
subject to necessary regulatory approvals.
On obtaining the regulatory approvals, the following Schemes of Zurich India Mutual
Fund have migrated to HDFC Mutual Fund on June 19, 2003. These Schemes have
been renamed as follows:

30
Former Name New Name
Zurich India Equity Fund HDFC Equity Fund
Zurich India Prudence Fund HDFC Prudence Fund
Zurich India Capital Builder Fund HDFC Capital Builder Fund
Zurich India TaxSaver Fund HDFC TaxSaver
Zurich India Top 200 Fund HDFC Top 200 Fund
Zurich India High Interest Fund HDFC High Interest Fund
Zurich India Liquidity Fund HDFC Cash Management Fund
Zurich India Sovereign Gilt Fund HDFC Sovereign Gilt Fund*
*HDFC Sovereign Gilt Fund has been wound up in March 2006
The AMC is also providing portfolio management / advisory services and such activities
are not in conflict with the activities of the Mutual Fund. The AMC has renewed its
registration from SEBI vide Registration No. - PM / INP000000506 dated February 12,
2013 to act as a Portfolio Manager under the SEBI (Portfolio Managers) Regulations,
1993. The Certificate of Registration is valid from January 1, 2013 to December 31,
2015.










31
Products and Schemes of HDFC mutual fund

Annual Interval Fund -
Series 1
HDFC Annual Interval Fund -
Series 1

Children's Gift Fund
Children's Gift Fund

Debt/ Income Fund
Invest in money market and
debt instruments and provide
optimum balance of yield.

Equity / Growth Fund
Invest primarily in equity and
equity related instruments.

Exchange Traded Funds
Invest primarily in equity and
equity related instruments.

Fixed Maturity Plan
Invest primarily in Debt /
Money Market Instruments
and Government Securities.


Fund of Fund Schemes
Invests primarily in other
scheme(s) of the same mutual
fund or other mutual funds

HDFC Capital Protection
Oriented Fund
HDFC Capital Protection
Oriented Fund- Series I

Liquid Funds
Provide high level of liquidity
by investing in money market
and debt instruments.

Quarterly Interval Fund
Generate regular income
through investments in Debt /
Money Market Instruments..

Rajiv Gandhi Equity Savings
Scheme
Rajiv Gandhi Equity Savings
Scheme






32
TOP FUND DETAIL
HDFC TOP 200 FUND GROWTH
Current nav 223.63
Previous nav 220.97
Quately average AUM in cr(as on 31 dec
2013)
7539.69
Portfolio allocation
Equity 94.21%
debt 0.00%
other 5.79%

Scheme detail
Investment Objective
The investment objective of the Scheme 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.
Scheme Type Open ended scheme
Scheme Class Equity - Large-cap
Investment Plan Growth
Minimum Investment (in ) 5000.00
Lock In Period 0
Dividend 0.00
Bonus N/A
Fund Manager Prashant Jain
SIP Yes
STP Yes
SWP Yes


33
List of key Management personnel
Trustees

HDFC Trustee Company Limited, a company incorporated under the Companies Act,
1956 is the Trustee to HDFC Mutual Fund vide the Trust deed dated June 8, 2000, as
amended from time to time. HDFC Trustee Company Ltd is wholly owned subsidiary of
HDFC

The Board of Directors of HDFC Trustee company Limited consists of the
following eminent persons.
Mr. Anil Kumar Hirjee
Mr. Vincent Joseph OBrien
Mr. Shishir K. Diwanji
Mr. Ranjan Sanghi
Mr. V. Srinivasa Rangan

Mr. Anil Kumar Hirjee

Mr. Anil Kumar Hirjee, the Chairman of the Board, is an independent Director.
Mr.Hirjee has 45 years of experience in different areas of Business Management and
his expertise extends to finance, banking, legal, commercial, industrial and general
administration. He has also been actively associated with leading Charitable
Institutions. Mr. Hirjee has been associated with The Bombay Burmah Trading
Corporation Limited since 1976 and is presently its Vice Chairman. He is also a
Director on the Boards of various other companies.
Mr. Hirjee is a B.A. (Hons.), LL.B. (Hons.), Barrister-at-Law, and SLOAN Fellow of
the London Business School.

TOP

Mr. Vincent Joseph OBrien

Mr Vincent Joseph OBrien has been appointed as an associate Director on the
Board of the Trustee Company. He joined Standard Life Investments Limited in 2003
and in 2010 he was appointed as the Global Head of Strategic Alliances with specific

34
responsibility for the Companys operations in India and Japan. Prior to 2010 he was
the Company Secretary with additional responsibilities for regulatory compliance and
risk management. He reports to the Director of Global Client Group of Standard Life
Investments Limited. Before 2003 he worked for Standard Life Bank as its Company
Secretary with responsibilities for compliance, risk management and legal.
He is Associate of the Chartered Insurance Institute (ASCII) of United Kingdom.

TOP

Mr. Shishir K. Diwanji

Mr. Shishir K. Diwanji, is an independent Director on the Board. He is a Partner with
Messrs. Desai and Diwanji, Advocates, Solicitors and Notaries. He is also a Director
on the Board of various other companies.
Mr. Diwanji holds a Bachelors degree in Law.

TOP

Mr. Ranjan Sanghi

Mr. Ranjan Sanghi, is an independent Director on the Board. He is Director / Partner
with Sah & Sanghi Group of Companies. He is also a Director on the Board of
various other companies.

Mr. Sanghi is a Graduate in Commerce from Mumbai University.

TOP

Mr. V. Srinivasa Rangan

Mr. V. Srinivasa Rangan is an Associate Director on the Board. Mr. Rangan is an
Executive Director at Housing Development Finance Corporation Limited (HDFC
Ltd). He has been associated with HDFC Ltd. since 1986. He was inducted into the
Board of HDFC Ltd. as Executive Director in January 2010 and prior to that he was
Senior General Manager Treasury. He has been appointed as the Executive
Director of HDFC Ltd. for a period of 5 years with effect from January 1, 2010,

35
subject to the approval of the Members at the ensuing Annual General Meeting of
HDFC Ltd. He is also a Director on the Board of various other companies.

Mr. Rangan is a Graduate in Commerce, Grad. CWA and an Associate of the
Institute of Chartered Accountants of India.


Registrar & Transfer Agents



Registered Office:
Computer Age Management Services Pvt. Limited
New No. 10, Old No. 178,
M.G.R. Salai, Nungambakkam,
Chennai - 600 034.
Computer Age Management Services Pvt. Ltd.,
Rayala Towers - I,
158 Anna Salai,
Chennai 600002.
Tel : (+91) 044 2852 0516
Fax : (+91) 044 4203 2952



Custodian

HDFC Bank Limited
Lodha - I Think Techno Campus Office, Floor 8,
Next to Kanjurmarg Railway Station
Kanjurmarg (East), Mumbai - 400 042.
Website: www.hdfcbank.com

Citibank N.A.
Global Securities & Fund Services (SFS), India,
3rd Floor, Trent House, Plot No. G-60, Bandra Kurla Complex

36
Bandra East, Mumbai - 400051
Website: www.citibank.com

The Bank of Nova Scotia
91-94, 3rd North Avenue,
Maker Maxity, Bandra-Kurla Complex,
Bandra (E), Mumbai 400 051
Website: www.scotiabank.com
Currently, The Bank of Nova Scotia has been appointed as the custodian of Portfolio
Deposit (i.e. Physical Gold) for HDFC Gold Exchange Traded Fund.

















37

MEANING OF AUM (ASSETS UNDER MANAGEMENT)
The market value of assets that an investment company manages on behalf of
investors. Assets under management (AUM) is looked at as a measure of success
against the competition and consists of growth/decline due to both capital
appreciation/losses and new money inflow/outflow.

AUM Market Share of HDFC Mutual Fund
Description Values (
Cr.)
Total AUM 8,82,410.81
Quarterly Average AUM of HDFC Mutual Fund
(As of 31 Dec 2013)
1,09,392.82
Market Share in % 12.40


HDFC MUTUAL FUND SCHEMES
Number of scheme 132
NO. of scheme option 808

PORTFOLIO ALLOCATION
Equity 94.21%
debt 0.00%
other 5.79%







38
ICICI PRUDENTIAL MUTUAL FUND


The mutual fund of ICICI is a joint venture with Prudential PLC Of America, one of the
largest life insurance companies in the USA. Prudential ICICI mutual fund was set up on
13
th
of Oct. 1993 with two sponsors.
ICICI Prudential Mutual Fund (the Fund) offers a wide range of retail and corporate
investment solutions across different asset classes like Equity, Fixed Income and
Gold.
The Fund House has continuously aimed to provide investors with financial solutions
to aid them in achieving their lifecycle objectives. It has constantly been on the
forefront of innovation and has introduced products aligned to meet customer needs
leading to a well-diversified portfolio of around 57 mutual fund products. The success
of the endeavors is evident in the mutual fund investor base that has witnessed
significant growth from 210 to over 2 Million currently. ICICI Prudential Mutual Fund
gained from managing funds as per its investment objectives and was able to deliver
superior risk adjusted returns. The consistent long term performance was achieved on
the strength of fundamentals, process driven investment approach with enough
flexibility for the fund managers to manage their funds in their unique style and insight.
The fund house over the last 18 years has garnered trust of its investors and has
emerged as the leading and preferred investment solution provider in India. The fund
house has always aimed to fulfill its fiduciary responsibility of managing investor's
wealth with prudence and due diligence.

39
ICICI Bank started as a wholly owned subsidiary of ICICI Limited, an Indian financial
institution, in 1994. Four years later, when the company offered ICICI Bank's shares to
the public, ICICI's shareholding was reduced to 46%. In the year 2000, ICICI Bank
offered made an equity offering in the form of ADRs on the New York Stock Exchange
(NYSE), there by becoming the first Indian company and the first bank or financial
institution from non-Japan Asia to be listed on the NYSE. In the next year, it acquired
the Bank of Madura Limited in an all-stock amalgamation. Later in the year and the
next fiscal year, the bank made secondary market sales to institutional investors.


MEANING OF AUM (ASSETS UNDER MANAGEMENT)
The market value of assets that an investment company manages on behalf of
investors. Assets under management (AUM) is looked at as a measure of success
against the competition and consists of growth/decline due to both capital
appreciation/losses and new money inflow/outflow.

UM Market Share of ICICI Prudential Mutual Fund
Description Values (
Cr.)
Total AUM 8,82,410.81
Quarterly Average AUM of ICICI Prudential Mutual Fund
(As of 31 Dec 2013)
97,318.10
Market Share in % 11.03

HDFC MUTUAL FUND SCHEME
Number of schemes 226
No. of schemes option 926





40
TOP FUND DETAIL

ICICI Prudential Income Plan - Regular - Growth

Current NAV 36.89
Previous NAV 36.80
Quarterly average AUM in cr(as on 31 dec
2013)
4321.63

Portfolio allocation
Equity 0.00%
debt 96.98%
other 3.02%

Investment Objective
To generate income through investments in a range of debt and money
market instruments of various maturities with a view to maximising
income while maintaining the optimum balance of yield, safety and
liquidity.
Scheme Type Open ended scheme
Scheme Class Income - Long Term
Investment Plan Growth
Minimum Investment (in ) 5000.00
Lock In Period 0
Dividend 0
Bonus N/A
Fund Manager Manish Banthia
SIP Yes
STP Yes
SWP Yes


41
KEY PERSONNEL MANAGEMENT
Mr.Nimesh Shah- Managing Director & CEO

Nimesh Shah joined ICICI Prudential AMC as its Managing Director in July 2007.
Nimesh has completed his Chartered Accountancy. Prior to joining ICICI
Prudential AMC, Nimesh was Senior General Manager at ICICI Bank and has
over 19 years experience in banking and financial services. At ICICI Group, he
has handled many responsibilities including project finance, corporate banking
and international banking.
He was associated with one of the first batches of senior managers selected to
lead the foray of ICICI Bank into the international arena. He led ICICI Banks
foray into the Middle-Eastern region and Africa.
Mr. B Ramakrishna - Executive Vice President
Mr. Raghav Iyengar - Executive Vice President & Head Retail &
Institutional Business
Mr. Hemant Agarwal - Head - Operations
Mr. Rahul Rai - Head Real Estate Business ICICI Prudential Asset
Management Company Limited
Fund Management
Mr. S. Naren - Chief Investment Officer
Mr. Rahul Goswami - Chief Investment Officer Fixed Income
Board of Directors: Asset Management Company
Ms. Chanda Kochhar - Chairperson

42
Mr. Barry Stowe
Mr. Suresh Kumar
Mr. Vijay Thacker
Mr. Dileep C. Choksi
Mr. N.S. Kannan
Mr. Nimesh Shah
Mr. C. R. Muralidharan
Directors of the Trustee Company
Mr. M. N. Gopinath - Chairman
Mr. M. S. Parthasarathy
Mr. Keki Bomi Dadiseth
Mr. Vinod Dhall
Mr. Sandeep Batra











43
Fund Details
Total Asset Size (Rs cr):
97,318.10

Total Schemes : 256
Asset as on 31 Dec 13
Categories and No. of Schemes
Fixed Maturity Plans : 100
Hybrid - Debt Oriented : 23
Hybrid - Capital Protection : 23
Interval Income Funds : 20
Others : 90

Change Fund
















44
CHAPTER-III

RESEARCH METHODOLOGY




















45
Need of the study
The need of study arises for learning the variables available that distinguish the
mutual fund of two companies.
To know the risk & return associated with mutual fund.
To chose best company for mutual investment between HDFC & ICICI.
To project mutual fund as the productive avenue for investing activities.
Objectives
To analysis which provides better returns from HDFC & ICICI.
To analyze the concept and parameters of mutual fund.
To know how many people are satisfied by their investment (in HDFC or ICICI).
To know people behavior regarding risk factor involved in mutual fund.


Research refers to search for knowledge. One can also define research as a scientific
and systematic search for pertinent information on a specific topic. It is an art of
scientific investigation.
Research Methodology:-
It is the way to systematically solve a problem. The methodology adopted in
this study is explained below:-
Research Design
A. Problem Defining:
In a competitive situation with multiple mutual funds
operating in Indian market, it is necessary to know about the performance
of different mutual funds as the performance of mutual fund decides about
the future of Mutual Fund Company. In this study my focus is upon
performance of investors regarding HDFC &ICICI. This is my problem to
be studied for research.


46
B. Literature Survey:
I have used newspapers, magazines related to business &
finance & apart from websites.
C. Type of research:
The research is qualitative & descriptive in nature. Qualitative
research is that talk about the quality of the subject to be researched and
Descriptive research is one that describes things as exists in present.
D. Data collection Design:
I. Sources of data =
Primary Sources I have used questionnaire as primary
source for collecting data for my study.
Secondary sources I had collected my secondary data
from websites & journals.
II. Sampling =
It represents whole population. It is the processes of
choosing a sample from whole population .I have choose a sample
of high class & middle class people who have invested in mutual
funds as a sample.
III. Tools =
I have used some charts (Pie chart, column chart, cylinder
chart, cone chart)
Sampling Size =
It represents that how many candidates youve chosen to
be filled up your questionnaire or candidates upon whom you can
study. I had chosen sample of 50 Respondents
IV. Sampling Techniques =
Deliberate &
Convenience Sampling.

47
V. Data Interpretation =
Data interpretation is that in which we analysis the whole
collected data & tries to give it in simple words to be
understandable
Limitations: - There are some limitations of my study, those are as
Following:-
Sample limitation: - which sample is taken by me is very small in size to
Compare mutual fund of two companies.
Reliability: - The data collected by me is not much reliable because many
investors chosen by me have invested in HDFC.
Parameters: - All the parameters have not been taken.
Time limitation: - I had the shortage of time because of that I was not able to
do my study in a good manner.
Awareness: - Investors chosen for study are not fully aware of all the terms
and conditions related to mutual fund .So, it is very difficult to construct right
information from them.






48

CHAPTER-IV




ANALYSIS AND FINDING







49

Analysis through Questionnaire :-
1. Do you invest in mutual fund?


FIG 1.1

Interpretation:-

Out of 50 Respondents up to 35 have invested in mutual fund..







35
0
5
10
15
20
25
30
35
40
YES
NO

50
2. With which company do you have invested in mutual funds?


Fig 1.2

Interpretation:
Out of 50 Respondents up to 25 have invested in mutual fund with HDFC,15 have
invested with ICICI and 10 invested in SBI There is no investor who have invested in
mutual fund with any another company.









0
5
10
15
20
25
25
15
10
0 0 0 0
HDFC
ICICI
Reliance
SBI
LIC
Kotak Mahindra
Others
HDFC 25
ICICI 15
Reliance 0
SBI 10
LIC 0
Kotak Mahindra 0
Others 0

51

3. What is your age?



Fig 1.3


Interpretation:

20 investors are of age between 15-25 . 15 investor are of age between 25-35 and 5
investor are of age between 5.







0
2
4
6
8
10
12
14
16
18
20
20
15
5
0
15-25
25-35
35-45
More than 45

52

4. What is your income? (Yearly based)





Fig 1.4

Interpretation:

Up to 35 investors have income between 2-4 lakh. 13 have between 4-5 lakh. & there is
no investor who have income up to 1akh.



0
5
10
15
20
25
30
35
40
0
37
13
0
1 lakh
2-4 lakh
4-5 lakh
More than 5

53
5. From where you come to know about this companys mutual fund schemes?




Interpretation:

Many investors (up to 25) have been come to know about the company to be invested
by their friends & peers. 15 have been known by their family & relatives .5 have been
come to know by company employees. This means many have come to know by their
friends & peers.




0
5
10
15
20
25
25
15
5
0
Family & relatives
Friends & peers
Company employee
Others

54
6. What is the time duration of your investment?





Interpretation:

20 investors have time of investment less than one year.15 have time duration of their
investment between of 1-2 year. 10 have between 2-4 year & 5 have more than 4 years.
So, we can say that 20 investors have more experience than others.
0
2
4
6
8
10
12
14
16
18
20
20
15
10
5
0-1 year
1-2 year
2-4year
more than 4
0-1 year 20
1-2 year 15
2-4year 10
more than 4 5

55
7. Are you satisfied by service of the companys employees / peoples behavior?




Interpretation:
Out of 50 investors 19 are highly satisfied. 15 are satisfied. 10 are neutral towards
employee behavior of a company. 6 are dissatisfied. 0 are highly dissatisfied. We say
that many people are highly satisfied by employee behavior.

0
2
4
6
8
10
12
14
16
18
20
19
15
10
6
0
Highly satisfied
Satisfied
Neutral
Dissatisfied
Highly Dissatisfied
Highly satisfied 15
Satisfied 35
Neutral 30
Dissatisfied 15
Highly Dissatisfied 5

56
8. What is your risk profile?



Interpretation:

10 investors are innovator means they like to take risk for more returns. 33 are
moderate towards risk means they are in different towards risk. 7 are risk adverse
means they mainly try to avoid risk.

0
5
10
15
20
25
30
35
10
33
7
INNOVATOR
MODERATE
NEUTRAL
Innovator 10
Moderate 33
Risk adverse 07

57
9. What you feel about the company norms, documentation & formalities?




Interpretation:
10 investors are highly satisfied by companys documentation policy (filling up the
forms etc.). 15 are satisfied, 14 never cares about it or are moderate towards it , 5 are
dissatisfied by it & 1 are highly dissatisfied.

0
2
4
6
8
10
12
14
16
10
15
14
5
1
Highly satisfied
Satisfied
Neutral
Dissatisfied
Highly Dissatisfied
Highly Satisfied 10
Satisfied 15
Neutral 14
Dissatisfied 10
Highly dissatisfied 5

58
10. What you say which provides better returns?

HDFC 34
ICICI 16


Interpretation:

According to collected data 68 investors thinks that HDFC provides better returns where
as 32 to think that ICICI provides better returns.

0
5
10
15
20
25
30
35
34
16
HDFC
ICICI

59
11. Would you like to exchange your investment with one another between
HDFC & ICICI?





Interpretation:

7 investors said that they would like to change their investment with each another
between HDFC & ICICI. But 85 investors say that they are ok with their companies and
they wouldnt like to exchange their investment.

0
5
10
15
20
25
30
35
40
45
7
, 42
NO YES
Yes 15
No 85

60
Findings: - In my research I have founded following things:-


Investors have more faith HDFCs mutual fund.
As the age increases investors are much satisfied, see more risk & become
more risk adverse.
Old people &Widows prefer lower risk.
Investors are not highly satisfied by company rules & employee behavior.
Investors think that HDFC provides better returns than ICICI.







61

CONCLUSION AND
RECOMMENDATION





















62
CONCLUSION ; To conclude we can say that mutual fund is a very much profitable tool
for investment because of its low cost of acquiring fund, tax benefit, and diversification
of profits & reduction of risk. Many investors who have invested in mutual fund have
invested with HDFC and them also thinks that it provides better returns than ICICI
.There is also an affect of age on mutual fund investors like; old people & widows want
regular returns than capital appreciation. Companies can adopt new techniques to
attract more & more investors. In my study I was suppose to do comparative analyses
the mutual fund of HDFC &ICICI and I had found that people consider HDFC better than
ICICI. But ICICI have also respondents and it can increase its investors by improving
itself in some terms To conclude we can say mutual fund is a best investment vehicle
for old & widow, as well as to those who want regular returns on their investment.
Mutual fund is also better and preferable for those who want their capital
appreciation.
Both the companies are doing considerable achievements in mutual fund
industry.
There are also so many competitors involved those affects on both companies.

Recommendations / Suggestions: - In my study I have found some limitations. For
that I can suggest both companies following suggestions or areas of improvement:-
ICICI bank should try to provide better returns to its investors as compare to
HDFC.
Both companies should try to invest in better securities for better profits.
Both companies should try to satisfy their customer by better customer
service or by improving customer relationship management.
Companies should try to make people initiative towards risk.
Investors should be made fully aware of the concept of mutual fund & all the
terms and conditions.
It should more emphasize in advertising, as it is the most
Powerful tool to position ant brand in the mindsets of customers


63
BIBLIOGRAPHY
Bibliography:-

Books:-
C.R.Kothari, Research Methodology. New Delhi, Vikas Publishing house
Pvt.Ltd.2007.
ICICI and HDFC Brochure .

WEBLIOGRAPHY
1. http://www.icicipruamc.com/
2. http://www.hdfcfund.com/
3. http://www.moneycontrol.com/
4. http://www.moneycontrol.com/
5. http://www.amfiindia.com/
6. http://www.amfiindia.com/
7. http://www.mutualfundindia.com












64
Annexure

Name ________________________ Age _________
Sex _________

1. Do you invest in mutual fund?
Yes No .

2. With which company do you have invested in mutual funds?
HDFC ICICI Reliance Lic
SBI Kotak Mahindra
Others
Please specify
3. What is your age?
15-25 25-35

35-45 above 45 .

4. What is your income? (Yearly based)
1 lakh 2 - 4lakh
4-5 lakh more than 5

5. From where you come to know about this companys mutual fund schemes?
Family members & relatives
Friends & peers

65
Companyemplooyes

Others
Please specify .
6. What is the time duration of your investment?
0-1 year 1-2 year
2-4year More than 4

7. Are you satisfied by service of the companys employees / peoples behavior?
Highly satisfied Satisfied Neutral Dissatisfied

Highly dissatisfied .

8. What is your risk profile?
Innovator Moderator Risk adverse

9. What you feel about the company norms, documentation & formalities?
Highly satisfied Satisfied Neutral Dissatisfied

Highly dissatisfied .

10. What you say which provides better returns?
HDFC ICICI
11. Would you like to exchange your investment with one another between HDFC &
ICICI?
YES NO

66