MENTORING REPORT ON

Investment & Wealth Management Business

A Portfolio Analysis
For HSBC

Submitted

in the Partial Fulfillment for the Requirement of

Post
Graduate Diploma in Management
(PGDM)

Submitted to:
Ms. Deeksha
Asstt. Professor

Submitted by:
Twinkle Kumar
Roll No. 60
PGDM(IB)
2014-16

Jagannath International Management School

Kalkaji, New Delhi

CERTIFICATE OF COMPLETION

I Ms. TWINKLE KUMAR of JIMS Kalkaji PGDM (IB) (TRIMESTER III) hereby
declare that I have completed this project on Investment & Wealth management
business- a portfolio analysis for HSBC in the academic year 2014-16. The
information submitted is true and original to the best of my knowledge.

DATE:
(SIGNATURE OF THE STUDENT)

TO WHOMSOEVER IT MAY CONCERN

This is to certify that student Twinkle Kumar of PGDM (IB) (Trimester III) JIMS
Kalkaji Has Completed the project on Investment and wealth management
business- a portfolio analysis for HSBC under my guidance with HSBC.
Her work is up to my satisfaction and worth appreciation.
I wish her all the best for future endeavors.

SIGNATURE OF PROJECT GUIDE

(Ms. Deeksha)

CONTENTS
Description

Page No.

Certificate

Acknowledgement

Executive Summary

Introduction to topic

Company Profile

27

Research Methodology

50

Analysis & Interpretation

52

Findings & Inferences

66

Conclusion and Recommendations

68

Limitations

72

Bibliography

73

Appendices

74

ACKNOWLEDGEMENT

It is the matter of great pleasure and privilege to be able to present this

project on investment and wealth management business- a portfolio
analysis for HSBC.
The compilation of the project is a milestone in the life of the management
student and its execution is inevitable with the co-operation of the project guide. I
wish to record a deep sense of respect and gratitude to my project guide, Ms.
Deeksha for her encouragement to course of my work. Her encouragement to
course of my work. It is due to the enduring effort and guidance of my guide that
ultimately made it success.
I also take this opportunity to express my deep regards an d gratitude to
the external mentor Mr. Sandeep Mittal who gave us guidance to take up and
pursue the project .
I acknowledge my indebtness to various authors for making use of
valuable information liberally.
It is my proud privilege to express my deep sense of appreciation and
gratitude to my parents and friends for their support and co-operation in the
course of the project either directly or indirectly involved in time with their
valuable contribution.

EXECUTIVE SUMMARY

Title - Investment and wealth management business- a portfolio analysis for

HSBC

The objective of the project

The main objective of my study is to find the main strategies, policies used &
various sales promotional activities of HSBC bank
.

Research Methodology
Data collection

Interview based on questionnaires.

Information through the questionnaires.

Secondary data from websites, books, magazines etc.

Sample Size
The sample size was 150 respondents comprising of retail investors, business
men, builders, industrialists, exporters, doctors etc .

Sampling Technique
stratified random sampling techniques was used

Conclusion
From the study and with the help of the survey it can be concluded that HSBC
has a very good market which comprises potential investors but due to lack of
basic promotion & publicity these investors are not fully aware of our company &
whosoever is aware of the company their investment decisions are done on the
basis of security, analysis of risk yield & return few parameters like Demographic,
Physiological, Income, etc.

Suggestions
HSBC market should make little more efforts to trap the potential investors, like
Media Advertisement, Paper Advertisement, Seminars & Business Meets &
building a good relationship with potential business, moreover friendly guidance.

INTRODUCTION TO THE TOPIC

Wealth Management & Branch Banking

HSBC has 47 branches Pan-India across 26 locations. Wealth Management
services are delivered to customers through qualified Wealth Management
across each of these branches.
Wealth Management helps customers develop & execute a realistic & practical
long term savings, investments & protection plans by investing in mutual funds,
bonds & purchase of insurance products manufactured by TATA AIG.
Qualified, trained & accredited Wealth Management assist customers in charting
a road map to achieve their individual financial goals & protect their family from
unforeseen eventualities keeping in mind their available resources & based on
each customers independent risk profile. Wealth Management services is
currently offered to HSBC Premier & Power Vantage customers

COMMERCIAL BANKING
HSBC is a leading provider of financial services to small, medium-sized and
middle-market enterprises. The Group has over 43,000 such customers in India,
including sole proprietors, clubs and associations, incorporated businesses and
publicly quoted companies. Commercial Banking provides a full range of banking
services to these customers including multi-currency business accounts,
payment and cash management, trade services, factoring and a range of
borrowing solutions.
In India, Commercial Banking has a presence in 47 branches covering 26 key
cities and for the convenience of our customers, a multi channel service including
Internet and Phone banking. For SME customers, HSBC offers the complete
range of transaction baking services as well as unsecured loans and loans for
and against property. The services are supported by a large Sales and
Relationship Management team in key locations across the country. India is the
first country in the HSBC Group where Commercial Banking lends to
Microfinance Institutions, thus providing indirect funding to hundreds of small
business owned and run by members of underprivileged sections of society. A
dedicated unit has been formed to focus on Microfinance and other Priority
Sector institutions, with a view to further reach out to the marginalized and under
banked.

Factoring
7

HSBC India offers a comprehensive range of Factoring and Supply Chain

Finance Solutions, which include the following products:
For Vendors/Suppliers/Purchase Channel of our corporate customers
Payables Financing
Purchase Order Financing
For the Sales Channel of our corporate customers
Factoring (With or Without Credit Protection)
Export Factoring (With or Without Credit Protection)
Portfolio Invoice Discounting (With partial credit protection)
Distributor Finance

Payables Financing: HSBC Indias Payable Financing product enables

companies to finance their payables to vendors. This helps companies to provide
immediate liquidity to vendors against their supplies at competitive rates and will
enable the company to negotiate better pricing terms with vendors.
It also enables the vendors to improve their cash flow by providing continuous
liquidity against their receivables. Our payables financing products can be
structured either against Bills of Exchange or Accepted Invoices.

Purchase Order Financing: is a facility to suppliers of our Corporate

Banking Clients to finance their pre shipment working capital requirements. Pre
shipment working capital lines are sanctioned to the suppliers against Purchase
Orders issued to the suppler.

Factoring: This is a service that covers the financing and collection of account
receivables in domestic trade. Receivables are factored, by HSBC with added
service of credit protection, collection and sales ledges administration. Thus the
management of the company may concentrate on production and sales and need
not concern itself with non-core activities like collection and sales ledger
administration.

Export Factoring: enables companies to finance their open account export

sales at competitive rates either in Rupees or Foreign Currency. Through a
network of overseas based correspondent factors, HSBC provides credit
protection against buyer default and collection services .

Portfolio Invoice Discounting: Essentially covers purchase of receivables

with partial credit protection based on a First Loss Deficiency Guarantee. The
portfolio should be well spread with acceptable levels of concentration and the
debtors must have had a satisfactory track record with the company. A field audit
will be conducted to determine portfolio quality based on which a First Loss
Deficiency Guarantee percentage will be agreed. Collection remains the
responsibility of the Corporate with repayments either on a pre-agreed schedule
or based on actual collections.

Distributor Finance: is currently offered to the distribution channel of Large

Corporate Banking Clients and can be structured to suit the specific requirements
of each corporate and its distribution channel. Through the Distribute Finance
Program, HSBC finances companys dealers, which will assist the company in
providing steady, assured credit to its distribution chain.

Payments and cash management

Integrated domestic and regional cash management solutions are provided to
corporate and institutional customers in India. The suite of offerings under the
cash management umbrella includes comprehensive Receivables Management
solutions, with an endeavor to completely integrate with the customers back-end
operating systems and processes. HSBC is the leading foreign bank in India in
providing capital market solutions, which include Bankers to Issue, Escrow
account Services and Dividend payments solutions. Six Sigma measurement
practices are followed for our operational capabilities. HSBC net, the HSBC
Groups online real time web-enabled corporate banking platform, allows
customers to execute financial transactions, obtain international financial market
information and review details of their domestic and international accounts form
anywhere in the world, 24 hours a day.

Trade (international and domestic) service

HSBC offers a wide range of international and domestic Trade products. In India,
we offer one of the largest trade processing capabilities among peer banks,
spread across 5 cities. Each of our Trade processing centers is ISO 9001-2000
certified. We work closely with Group Offices overseas and leverage our
extensive global network to offer structured, tailor made solutions to a wide range
of customers. Our clients in India include large India and multinational
companies, Mid Market companies as well as customers in the Small and
Medium Enterprises segment.

CORPORATE AND INSTITUTIONAL BANKING

Corporate Banking (CB) is an integral part of the Global Banking structure, which
focuses on offering a full range of service to multinationals, large domestic
corporate and institutional clients.
Provides a wide range of banking and financial services provided to domestic
and international operations of large local corporate and local operations of
multinationals corporations. Services include access to commercial banking
products, including working capital facilities such as domestic and international
trade operations and funding, channel/distributor financing, and overdrafts, as
well as domestic and international collections and payments, INR and Foreign
currency term loans (external commercial borrowing in foreign currency), letters
of guarantee etc.
Institutional Banking drives the Groups relationship with banks, financial
institutions, securities houses, insurance companies, and asset management
companies and other non-banking companies, non-government and
development organizations operating in India. Market leadership position based
on strong relationships with major financial institutions.
Investment Banking and Markets brings together the advisory and financing,
equity
Securities, equity linked transactions, asset management, treasury and capital
markets, and private equity activities of the Groups to complete the Global
Banking structure and provide a complete range of financial products to our
clients.
Clients are serviced by sector based client service teams that combine
relationship managers, product specialists and industry specialists to develop
customized financial solutions. These form the relationship team along with the
Investment Banking structure and provide a complete range of financial products
to our clients.
Clients are serviced by sector based client service teams that combine
relationship managers, product specialists and industry specialists to develop
customized financial solutions. These form the relationship team along with the
Investment Banking & Advisory division. Each team supports the

clients local and global needs, ensuring a full understanding of the companys
business and financial needs. Based on our clients requirement, HSBC assigns
Global Relationship Management teams to provide structured solutions for all its
needs.
10

Our Global Relationship Management teams are tasked with understanding in

depth the sectors in which our clients operate with the aim of adding value
through detailed industry knowledge and structured financial solutions.
Focus on overseas acquisition financing, corporate finance and advisory roles,
overseas cash management opportunities, cross border funding, project & export
finance through concerted marketing with all product providers.
The Corporate Bank (CB) in India was top ranked (1 st overall) in the 2005
Greenwich Survey with a Greenwich Quality Index (GQI) of 647. Currently CB
manages approx. 470 CB relationships with total advances of approx. USD
1.08Bn as at end of Dec05 and total deposits of USD .98Bn.
Sectoral account management- Improved industry knowledge andsector4
expertise. The CB portfolio is largely spread within the following sectors divided
as under:

Corporates
Consumer Brands
Industrials &Technology
Energy and Utilities
Telecommunications
Automotive
Healthcare
Transport and Logistics
Media

Institutional
Banks
Financial Institutions
Securities
MutualFunds/AssetManagement Companies
Insurance
Financial Sponsors
Business Process Outsourcing (BPOs)
Broker and Dealers

INVESTMENT BANKING
11

1 HSBC FIXED DEPOSITS

When it comes to assured returns, choosing the right type of savings scheme
makes all the difference. HSBC Fixed Deposits let you make the most of
value-added benefits as you create wealth at low risk.

Features & Benefits

The superior Fixed Deposit to invest in, for a secure future
You can now open a Fixed Deposit with Rs.
10,000 only
Enjoy high rate of returns on your HSBC Fixed
Deposits
Choose from a wide range of tenors as per your
convenience
Avail of our special rates for select tenors

Interest Rates
Fixed Deposit Period
Citizens Interest

7 days
8 to 14 days
15 to 29 days
30 to 59 days
60 to 89 days
90 to 179 days
180 to 269 days
270 to 12 months
366 to 399 days
400 days
401 to less than 18 months
18 months to 730 days
731 days
732 to less than 36 months

Interest Rate

Senior

(% p.a.)

Rate**
(% p.a.)
3.25
3.25
3.75
4.50
5.50
5.50
5.75
8.25
8.25
9.00
7.50
7.75
7.75
7.75

3.00
3.00
3.50
4.25
5.25
5.25
5.50
8.00
8.00
8.75
7.25
7.50
7.50
7.50

12

 Certificate of Deposit
Earn interest for funds invested from 15 days to one year, with HSBCs
Certificate of Deposit (CDs).
CDs can be availed by individuals (other than minors), corporations,
banks, companies, trusts, funds, associations etc. Non-Resident Indians
(NRIs) may also subscribe to CDs on a non-repatriable basis only.

Advantage

Tenure A Certificate of Deposit is issued for a period not less than

15 days & not exceeding 1 year from the date of issue.
Transfer Mechanism Certificate of Deposit held in a physical
form are freely transferable by endorsement & delivery. Those in
demat form can be transferred as per the procedure applicable to
other demat securities.

13

2 MUTUAL FUNDS
It is a type of investment where a number of investors money is pooled
together & used by the fund manager(referred to as the Asset Management
Company or AMC) to invest in underline securities inline with the objectives of
the scheme.
By this method you can achieve a much wider spread of investments than if
you were investing directly in the underlying investments. It is generally
accepted that by spreading your investment you are spreading your risk,
therefore investing in mutual funds is considered to be lower risk than direct
investment.
When you invest in mutual funds you do not own the underlying investments
but have a claim to a number of units in the fund representing the size of your
investment. The value of each unit of the mutual fund scheme, calculated
based on the market value of the underlying investments after deducting
expenses and liabilities, is referred to as the Net Asset Value or NAV.
The first time a mutual fund scheme is available for purchase is referred to as
a New Fund Offering or NFO.

Important Characteristics Of A Mutual Fund

1
2

A mutual fund actually belongs to the investors who have pooled

their funds is in the hands of the investors.
Investment professionals and other service providers, who earn a
free for their services, from the fund, manage a mutual fund.

14

3
4

The pool of funds invested in a portfolio of marketable investments.

The value of the portfolio is updated every day.
The investors share in the fund is denominated by units. The
value of the units changes in the portfolios value, every day. The
value of one unit of investment is called as the net asset value of
NAV.
The investment portfolio of the mutual fund is created according to
the stated investment objectives of the fund.

Types of Mutual Funds

There are thousands of different mutual funds offered on the market. They range
from funds that include a broad variety of investments to funds that invest
exclusively in single securities or narrow sectors of the market. With the many
different investment styles and objectives, theres bound to be a number of
mutual funds that are suited to your investing profile. Each of these funds has
expense, risk, and return characteristics. Be sure you understand these
characteristics before you invest. There are 15 principal types of funds. We have
listed them according to their primary objectives: growth, income, and
specialized.

15

Balanced Funds
Balanced funds seek to obtain the highest return consistent with a low-risk
strategy. They hold a mix of common and preferred stocks, bonds and cash
reserves. The mix can vary according to current market conditions. Balanced
funds usually offer higher yields than pure stock funds. Balanced funds are
generally the least risky of growth-oriented mutual funds.
Growth and Income Funds
Growth and income funds attempt to achieve both long-term growth and current
income. They invest primarily in high-yield common stock, preferred stock, and
convertible debt (bonds) to generate both growth and income. Because they
include a mix of investments, these funds are typically less risky than growth
funds.
Growth Funds
Growth funds seek long-term appreciation by investing in the stocks of
established companies that may be poised for growth. These companies typically
pay low dividends yet offer the potential for long-term capital

appreciation. Some growth funds limit their investments to specific sectors of the
economy. Growth funds are generally less risky than aggressive growth funds.
16

International and Global Growth Funds

International and global mutual funds offer diversification into international stock
markets. International funds invest only in foreign securities. Global funds, on the
other hand, can invest in foreign and U.S. securities. The risks associated with
investing on a worldwide basis include differences in regulation of financial data
and reporting, currency exchange differences, as well as economic and political
systems that may be different that those in the United States
Aggressive Growth Funds
Aggressive growth funds, sometimes known as "small-cap" funds, seek
maximum capital gains. They invest primarily in the stock of smaller, less
established companies. Since these companies generally pay little or no
dividends, aggressive growth funds rely on capital growth for returns. These
funds tend to be the riskiest of growth-oriented mutual funds.
Money Market Funds
Money market funds seek current income while maintaining a stable $1.00 per
share net asset value by investing in short-term debt securities, including T-bills,
certificates of deposit, commercial paper, and other highly liquid and safe
securities. They offer modest current income and no potential for capital gains.
They generally offer the lowest returns but the most safety of all fund types.
Some money market funds also offer tax-free income. Money market funds are
neither insured nor guaranteed by the Federal Deposit Insurance Corporation or
any other government agency. Although the fund seeks to preserve the value of
your investment at $1.00 a share, it is possible to lose money by investing in the
fund.
Government Securities Funds
Government securities funds invest primarily in Treasury and government agency
securities. Because they are issued or guaranteed by the U.S. government, they
are considered the credit worthiest alternatives available

Government securities offer moderate current income and high safety.

Treasury securities are backed by the full faith and credit of the U.S.
government as to the timely payment of principal and interest. Government
agency securities are not considered government obligations and therefore are
not backed by the full faith and credit of the government. The principal value of
these funds will fluctuate due to changes in interest rates.
Municipal Bond Funds
Municipal bond funds seek tax-free income by investing in the bonds of state and
local governments. In many cases, it may be wise to consider municipal bond
17

funds issued by your state because they may offer double or even triple tax-free
income. In some states you will have to pay income tax if you buy shares of a
municipal bond fund that invests in bonds issued by other states. In addition,
while some municipal bonds in the fund may not be subject to regular income
taxes, they may be subject to federal, state, or local alternative minimum tax. If
you sell a tax-free bond fund at a profit, there are capital gains taxes to consider.
As with all types of bond funds, the principal value will fluctuate with changes in
interest rates.
Corporate Bond Funds
Corporate bond funds invest in debt securities issued by corporations. The risk of
corporate bond funds may vary depending on the objectives of the fund. Because
credit risk is somewhat higher, these funds may offer higher returns than funds
specializing in government securities. Principal will fluctuate with changes in
interest rates.
High-Yield Bond Funds
High-yield bond funds seek to maximize current income by investing in lowerquality high-yielding corporate bonds. The bonds held by these funds are
generally rated BB or lower by rating agencies. They offer the high current yields
to compensate for the greater risk of default. Since they are more volatile than
and pay higher yields than investment grade bonds, they tend to be suited to
investors with a high degree of risk tolerance.

Sector Funds
Sector funds invest in specific industries or sectors of the economy, such as
communications, aerospace and defense, or health care. While they may be
diversified within a particular sector, they lack broad diversification. This
increases their investment risk. These funds typically seek long-term capital
appreciation.
Growth-Income Funds
Growth-income funds are specialists in blue chip stocks. These funds invest in
utilities, Dow industrials, and other seasoned stocks. They work to maximize
dividend income while also generating capital gains. These funds are suitable as
a substitute for conservative investment in the stock market.
Income Funds
Income funds focus on dividend income, while also enjoying the capital gains that
usually accompany investment in common and preferred stocks. These funds are
particularly favored by conservative investors.

18

Asset Allocation Funds

Asset allocation funds don't invest in just stocks. Instead, they focus on stocks,
bonds, gold, real estate, and money market funds. This portfolio approach
decreases the reliance on any one segment of the marketplace, easing any
declines. A plus factor is limited by this strategy as well.
Precious Metal Funds
Precious metal funds invest in gold, silver, and platinum. Gold and silver often
move in the opposite direction from the stock market, and thus these funds can
provide a hedge against investments in common stocks.
Bond Funds
Bond funds invest in corporate and government bonds. A common
misunderstanding among investors is that the return on a bond fund is similar to
the returns of the bonds purchased. One might expect that a fund that owns
primarily 8 percent-yielding bonds would return 8 percent to investors. In fact, the
yield from the fund is based primarily on the trading of
bonds, which are extraordinarily sensitive to interest rates. Thus, one could find a
bond fund that was earning double-digit returns as the prime rate climbed from 4
percent to 6 percent.
In addition to mutual funds, there are money market funds, which are essentially
mutual funds that invest solely in government-insured short-term instruments.
These funds nearly always reflect the current interest rates, and rarely engage in
interest-rate speculation.

Mutual funds available through HSBC

AIG Global Investment Group Mutual Fund

Birla Sun Life Mutual Fund

DSP Merrill Lynch Investment Managers

Fidelity Mutual Fund

Franklin Templeton Mutual Fund

HDFC Mutual Fund

19

HSBC Mutual Fund

ICICI Prudential Mutual Fund

JPMorgan Mutual Fund

Kotak Mahindra Mutual Fund

Reliance Mutual Fund

Standard Chartered Mutual Fund

Sundaram BNP Paribas Mutual Fund

Tata Mutual Fund

Benefits of Mutual Fund

Reduction in risk:
Mutual funds invest in a portfolio of securities. This means that all funds are not
invested in the same Investment Avenue. Holding a portfolio that is diversified
across investment avenues is a wise way to manage risk. When such a portfolio
is liquid and marked to market, it enables investors to continuously evaluate the
portfolio and manage their risks more efficiently.
Reduction in transaction costs:
Through the individual investors contribution may be small; the mutual fund itself
is large enough to be able to reduce costs in its transactions. These benefits are
passed on to the investors.
Portfolio Diversification:
By offering readymade diversified portfolios, mutual fund enables investors to
hold diversified portfolios. Through investors can create their own diversified
portfolios, the costs of creating and monitoring such portfolios can be high, apart
from the fact that investors may lack the professional expertise to manage such a
portfolio.
Liquidity:
Open-ended funds are very liquid as the Mutual Fund companies offer an open
window for redemption on all working days. The redemption proceeds are
normally dispatched within three to four working days.
Professional fund management:
20

Investing in markets requires both knowledge and expertise. Experienced fund

managers are able to trade or negotiate better deals, manage the price risk
effectively, exploit trends and opportunities and constantly monitor the
environment.
Tax efficiencies:
Investing in mutual funds is tax efficient. If investors choose the growth option
and stay invested for a year, they only pay long term Capital Gains of 20.4% of
indexed returns or 10.2% of un indexed returns (whichever is lower).
Diversification:
Diversification is the core of any investment strategy. It allows you to minimize
the risks associated with any investment. However, it is very
difficult for individuals to have the requisite diversification for your investment
given smaller portfolios and transaction costs. Mutual Funds can pool in the
investments of thousands of investors and achieve the desired level of
diversification for each.

FAQs
Do all mutual funds carry the same investment risks?
No, they do not. Some mutual funds have been designed for investors who are
cautious, while others for investors who are aggressive in their outlook to risk.
There are also funds designed for investors having a balanced outlook
on risk. You therefore need to decide what level of investment risk you are happy
to accept and then choose a mutual fund scheme, which matches your appetite
for risk.
How do I know which mutual fund scheme is right for me?
This will depend upon the level of risk you are prepared to take, your investment
horizon, what your investment objectives are and whether you have a particular
preference in the type of securities you would like to invest in. However before
you invest you need to ensure you fully understand the features and risks relating
to the mutual fund scheme you ultimately decide to invest in.

What charges are involved?

Charges do vary between different types of mutual fund schemes to reflect the
level of management and the type of underlying security involved. However there
are three main types of charges involved but you must refer to the offer
21

document of the fund to find out exactly what charges are involved and their
amounts.
Initial charges these expenses are incurred by the fund house for the
scheme(s) before/during its launch towards marketing, publicity, advertising,
registrars expenses, brokers /agents commission etc. Subject to an overall limit
(as a percentage of the corpus mobilized), these are subsequently amortized to
the scheme over a few years.
Annual Recurring Expenses (ARE) These are charges towards the annual
management of the scheme, including investment management, marketing,
investor communication, registrars expenses and other expenses and other
expenses directly attributable to the scheme.
Entry load
This is a charge that is levied on investors at the time of investment into a
scheme. Entry loads are typically restricted to equity funds and balanced funds
and have the impact of reducing the net amount that is available for investment
by the scheme.
Exit Charges/ Exit loads
Although described as a charge it is really a penalty for early encashment. Not all
mutual funds include this charge. This tends to be expressed as a percentage of
the amount to be encashed. Some fund managers use this type
of charge where the underlying securities are illiquid in nature or where they do
not charge an initial charge or to discourage premature redemptions from closeended funds. A variant of the exit loads is a Contingent Deferred Sales Charge
(CDSC) where the exit load is charged on graded basis and declines with
increasing time period.

What is the effect of these charges?

The effect of the initial charge is to immediately reduce the amount available to
purchase units. This means immediately after you invest the value of your
investment will be below the amount you invested. This is one reason why you
should be happy to leave your capital invested for the medium to long term to
allow possible future growth to overcome the effect of the initial charge.
The ARE will have the effect of reducing the overall returns you receive either in
the income you receive or the capital growth you experience. This ARE is
deducted from the overall value of the fund irrespective of whether the fund has
made a profit or not therefore deduction of the ARE can also increase the loss
the fund may have made.

22

The effect of Entry Load would be to reduce the net amount available for
investment by the fund.
The effect of an Exit Load will be to reduce the actual amount you receive on
encashment, which means you will receive less than market value of the
underlying investment. Such a charge acts as a deterrent to early encashment.
If I invest what am I committing to?
You are committing to invest at least the minimum amount, which varies from
fund to fund. In case of funds designed for a medium or long term horizon, you
should also be prepared to commit your investment for the appropriate time
horizon and not use capital that you might need in the short term, especially. With
regard to close-ended funds, you should be prepared to commit funds for the
complete tenor of the specific scheme.
Any investment in mutual funds means that you are happy to take a degree of
investment risk in return of the potential for superior returns than can be obtained
from fixed deposits, in the full knowledge that this outcome is not guaranteed and
that it is possible you could make a loss on your investment.

You should also consider carefully how much you want to commit to any; one
type of investment, as over exposure to any particular investment is not
recommended.
Can I change my mind and encash my investments at any time?
Yes you can. You will however incur any exit loads / CDSC as may be applicable
and if the price of the units has moved against you, then you will experience a
capital loss. In case of close-ended funds, premature exit costs can be especially
steep.
How do I keep track of my investment?
Very easily, the price of units is available through a variety of sources including
newspapers, the internet (at www.amfiindia.com), statements received from the
AMC or direct enquiry to your HSBC Relationship Manager.
What about tax?

23

You should refer to the specific fund documentation for a full appreciation of the
tax consequences of both the fund itself and any effect this will have on you
personally. HSBC does not give tax advice and we recommend you consult your
usual tax adviser for fuller details as to how you will be personally affected. The
tax benefits and implications mentioned in any marketing material provided by
the fund house are as per currently applicable tax laws and are subject to change
in future.

3. SYSTEMATIC INVESTMENT PLAN (SIP)

What is SIP?
An SIP is a regular investment plan for purchasing units of a mutual fund
scheme. Offered by mutual funds to help you save regularly. When investing in
mutual funds, you would normally identify a scheme & invest a predetermined
amount in it at its prevailing net asset value (NAV). If you invest a sum of
Rs.10,000 at an NAV of Rs.10, you will receive 1,000 units. The timings of your
investment in such a case may turn out to be favourable or unfavourable.
Under SIP, however, your investment is staggered over a period. Instead of
investing Rs.10,000 at one go, you might consider investing specified amounts in
a scheme at pre-specified intervals. For instance, you could spread out the
Rs.10,000 investment over 10 months, with Rs.1,000 being invested each month.
The number of units that accrue to you on each periodic investment would
depend on the NAV of the scheme prevailing at the time of your purchase. By
doing this, you would have done away with the need to time the market. SIPs
also in calculate some much needed discipline into your investing habits. .
It is just like a recurring deposit with the post office or bank where you put in
every month. The difference here is that the amount is invested in a mutual fund.
The minimum amount to be invested can be as small as Rs.500 & the frequent
investment is usually monthly or quarterly.
24

How an SIP works?

An SIP allows you to take part in the stock market without trying to second guess
movements.
An SIP means you to commit yourself to investing a fixed amount every month.
Let Rs.1000
When the NAV is high, you will get fewer units. When it drops, you will get more
Date
NAV
Approx number of units you will
get at Rs.1000
Jan 1
10
100
Feb 1
10.5
95.23
Mar 1
11
90.90
Apr 1
9.5
105.26
May 1
9
111.11
Jun 1
11.5
86.95
Within six months, you would have 5,894 units by investing just Rs.1000 every
month.
How an SIP scores?
It makes you disciplined in your savings. Every month you are forced to keep
assured amount. This could either be debited directly from your account or you
could give mutual fund post-dated cheques. As you see above, it helps you make
money over the long term. Since you get more when the NAV drops & fewer
25

when it rises, the cost average out over time. So over all the ups & downs of the
market without any drastic losses.
Also, a number of mutual funds do not charge an entry load if you opt for an SIP
a percentage of the amount you are investing. & if you do not exit (sell your units
a year of buying the units, you do not have to pay an exit load) (same as an entry
load, except this is charged when you sell your units).
If, however, you do sell your units within a year, you would be charged an exit low
pays to stay invested for the long-run.
The best way to enter a mutual fund is via an SIP. But to get the benefit of an SIP
at least a three-year time frame is needed when you wont touch your money.

4. INSURANCE
the policy, adjusting losses, and supplying the capital Insurance, in law and
economies, is a form of risk management primarily used to hedge against the risk
of a contingent loss. Insurance is defined as the equitable transfer of the risk of a
potential loss, from one entity to another, in exchange for a premium. Insurer, in
economics, is the company that sells the insurance. Insurance rate is a factor
used to determine the amount, called the Premium, to be charged for a certain
amount of insurance coverage. Risk management, the practice of appraising and
controlling risk, has evolved as a discrete field of study and practice.
1 A large number of homogeneous exposure units. The vast majority
of insurance policies are provided for individual members of very large
classes. Automobile insurance, for example, covered about 175 million
automobiles
in
the
United
States
in
2004
(http://www.economicinsurancefacts.org/economics/state/insuredcars/)
. The existence of a large number of homogeneous exposure units
allows insurers to benefit from the so-called law of large numbers,
which is effect states that as the number of exposure units increases,
the actual results are increasingly likely to become close to expected
results. There are exceptions to this criterion. Lloyds of London is
famous for insuring the life or health of actors, actresses and sports
figures. Satellite Launch insurance covers events that are infrequent,
large commercial property policies may insure exceptional properties
for which there are no homogeneous exposure units. Despite failing of
this criterion, many exposures like these are generally considered to
be insurable
26

a Definite Loss. The event that gives rise to the loss that is subject
to insurance should, at least in principle, take placed at a known
time, in a known place, and from a known cause. The classic
example is death of an insured on a life insurance policy. Fire,
automobile accidents, and worker injuries may all easily meet this
criterion. Other types of losses may only be definite in theory,
Occupational disease, for instance, may involve prolonged
exposure to injurious conditions where no specific time, place or
cause is identifiable , Ideally, the time, place and cause of a loss
should be clear enough that a reasonable person, with sufficient
information,could objectively verify all three elements.
2 Accidental Loss. The event that constitute the trigger of a claim
should be fortuitous, or at least outside the control of the beneficiary of
the insurance. The loss should be pure, in the sense that it results
from an event for which there is only the opportunity for cost. Events
that contain speculative elements, such as ordinary business risks, are
generally not considered insurable.
3 Large Loss. The size of the loss must be meaningful from the
perspective of the insured. Insurance Premiums need to cover both the
expected cost of losses, plus the cost of issuing and administering
needed to reasonable assure that the insurer will be able to pay
claims. For small losses these latter costs may be several times the
size of the expected cost of losses. There is little point in paying such
costs unless the protection offered has real value to a buyer.
4 Affordable Premium. If the likelihood of an insured event is so high,
or the cost of the event so large, that the resulting premium is large
relative to the amount of protection offered, it is not likely that anyone
will buy insurance, even if on offer. Further, as the accounting
profession formally recognizes in financial accounting standards (See
FAS 113 for example), the premium cannot be so large that there is not
a reasonable chance of a significant loss to the insurer. If there is no
such chance of loss, the transaction may have the form of insurance,
but not the substance.
5 Calculable Loss. There are two elements that must be at least
estimatable, if not formally calculable exercise, while cost has more to
do with the ability of a reasonable presented under that policy to make
a reasonably definite and objective of the amount of the loss
recoverable as a result of the claim.
6 Limited risk of catastrophically large losses. The Essential risk is
often aggregation. If the same event can cause losses to numerous
policyholders of the same insurer, the ability of that insurer to issuer
policies becomes constrained, not by factors surrounding the individual
characteristics of a given policyholder, but by the factors surrounding
the sum of all policyholders so exposed. Typically, insurers prefer to
limit their exposure to a loss
27

from a single event to some small portion of their capital base, on the order of
5%. Where the loss can be aggregated, or an individual policy could produce
exceptionally large claims, the capital constraint will restrict an insurers appetite
for additional policyholders. The classic example is earthquake insurance, where
the ability of an underwriter to issue a policy depends on the number and size of
the policies that it has already underwritten. Wind insurance in hurricane zones,
particularly along coast lines, is another example of this phenomenon. In extreme
cases, the aggregation can affect the entire industry, since the combined capital
of insurers and reinsures can be small compared to the needs of potential
policyholders in areas exposed to aggregation risk. In commercial fire insurance
it is possible to find single properties whose total exposed value is well in excess
of any insurers, or are insured by a single insurer who syndicates the risk into the
reinsurance market.

Insurers business model

Profit = earned premium + investment income - incurred loss underwriting expenses.
Insurers make money in two ways: (1) through underwriting, the process
by insurers selects the risks to insure and decide how much in
premiums to charge for accepting those risks and (2) by investing the
premiums they collect from insureds.
The most difficult aspect of the insurance business is the underwriting of
policies. Using a wide assortment of data, insurers predict the likelihood
that a claim will be made against their policies and price products
accordingly. To this end, insurers use actuarial science to quantify the risks
they are willing to assume and the premium they will charge to assume
them. Data is analyzed to fairly accurately project the rate of future claims
based on a based on a given risk. Actuarial science uses statistics
principles aura used to determine an insurers overall exposure. Upon
termination of a given policy, the amount of premium collected and the
investment gains thereon minus the amount paid out in claims is the
insurers underwriting profit on that policy. Of course, from the insurers
perspective, some policies

are winners (i.e., the insurers pays out more in claims and expenses than
it receives in premiums and investment income)
28

Types of insurance
Any risk that can be quantified can potentially be insured. Specific kinds of
risk that may give rise to claims are known as perils. An insurance policy
will set out in details which perils are covered by the policy and which are
not.
Below is a (non-exhaustive) list of the many different types of insurance
that exist. A single policy may cover risks in one or more of the categories
set forth below. For example, auto insurance would typically cover both
property risk (covering the risk of theft or damage to the car) and liability
risk (covering legal claims form causing an accident). A homeowners
insurance policy in the U.S. typically includes property insurance covering
damage to the home and owners belongings, liability insurance covering
certain legal claims against the owner, and even a small amount of health
insurance for medical expenses of guests who are injured on the owners
property.

Automobile insurance, know in the UK as motor insurance, is

probably the most common from of insurance and may cover both
legal liability claims against the driver and loss of or damage to the
insureds vehicle itself. Throughout most of the

United States an auto insurance policy is required to legally operate

a motor vehicle on public roads. In some jurisdictions, bodily injury
compensation for automobile accident victims has been changed to
a no-fault system, which reduces or eliminates the ability to sure for
compensation but provides automatic
eligibility for benefits.

Aviation insurance insures against hull, spares, deductible, hull

war and liability risks.

Business insurance can be any kind of insurance that protects

businesses against risks. Some principal subtypes of business
insurance are (a) the various kinds of professional liability
insurance, also called professional indemnity insurance, which
are discussed below under that name; and (b) the business owners
policy (BOP), which bundles into one policy many of the kinds of
coverage that a business owner needs, in a way analogous to how
homeowners insurance bundles the coverages that a homeowner
needs.
29

Casualty insurance insures against accidents, not necessarily tied

to any specific property.

Credit insurance repays some or all of a loan back when certain

things happen to the borrower such as unemployment, disability, or
death. Mortgage insurance (which sees below) is a form of credit
insurance, although the name credit insurance more often is used
to refer to policies that cover other kinds of debt.

Crime insurance insures the policyholder against losses from the

criminal acts of third parties. For example, a company can
obtain crime insurance to cover losses arising from theft or
embezzlement.

Crop insurance Farmers use crop insurance to reduce or manage

various risks associated with growing crops. Such risks include
crop loss or damage caused by weather, hail, drought, frost
damage, insects, or disease, for instance.

Health insurance policies will often cover the cost of private

medical treatments if the National Health Service in the UK (NHS)
or other publicly-funded health programs do not pay for them. It will
often result in quicker health care where better facilities are
available.

30

HSBC TIE-UP WITH TATA AIG

Tata AIG Life Insurance Company limited(Tata AIG life) is a joint venture
company, formed by the Tata Group and American International Group, Inc.
(AIG). Tata AIG life combines the Tata Groups pre-eminent leadership position in
India and AIGs global presence as the worlds leading international insurance
and financial services organization. The Tata Group holds 74 percent stake in the
insurance venture with AIG holding the balance 26 percent. Tata AIG life provides
insurance solutions to individuals and corporates. Tata AIG life insurance
company was licensed to operate in India on February 12,2001 and started
operations on
April 1,2001
A UNIT LINKED INSURANCE PLAN (ULIP)
Unit linked insurance products are different from the traditional insurance
products and are subject to the risk factors of fluctuations in investment returns
and possibility of increase in changes.
The performance of the managed portfolios and funds is not guaranteed and the
fund value may increase or decrease in accordance with the future experience of
the managed portfolios and managed funds. The fund value during the period of
continuance of policy and at maturity may be more or less than the premiums
invested depending on market performance. Past returns are not necessarily a
guide to future performance.
31

The premium paid in unit linked life insurance policies are subject to investment
risks associated with capital markets and the NAVs of the units may go up or
down based on the performance of the funds and factors influencing the capital
market and the insured is responsible for his/her decisions.
Buying a life insurance policy is a long-term commitment. An early termination of
the policy usually involves high costs and the surrender value payable may be
less than the total premiums paid.

Tata AIG Life Insurance Company Limited is only the name of the insurance
company. Invest Assure II is only the name of the Unit Linked Life Insurance
Contract and does not in any way indicate the quality of the contract, future
prospects or returns.
The various funds offered under this contract are the names of the funds and do
not any ways indicate the quality of the contract, future prospects and returns.
B Invest Assure II
An inspirational that translates into a host of innovative products for you. Tata
AIG Life introduces Invest Assure II, a unique investment linked insurance plan
for flexibility and protection. Given a choice, many people would like to increase
the earning potential of their insurance premium by deciding their own investment
and risk limitations. Invest Assure II, a unique, flexible insurance plan combines
to exploit the upside of market returns by investing in different kinds of securities
through multiple fund options.
What's more, you can direct the investments by creating your own investment
fund portfolio from a range of options to suit your needs and preferences.
Enjoy Multiple Benefits-INVESTASSURE II
Provides security to your family in case of the Life Insureds unfortunate
demise.
Gives you the flexibility to choose your funds based on your risk profile.
Enables you to enjoy marked-linked returns with a potential for higher
growth.
C

Invest Assure Gold

Invest Assure Gold, a non-participating whole Life Unit Linked Plan, which offers
you the unique advantage of combining the protection and tax advantages of life
32

insurance with the attractive prospects of investing in different kinds of securities

through multiple fund options.
And you can keep reaping the benefits for a lifetime!
Whats more, you can direct the investments by creating your own investment
fund portfolio from a range of options to suit your needs and performances.
Key Benefits
Choose your premium payment term; five years or for the entire duration
of the policy
Entry age: 30 days to 70years
Benefit period: for the entire life till 100 years of age
Facility to increase the premium through Top-Up Premium
Provides security to your family in case of your unfortunate death
Facility to increase the Sum Assured through Top-Up Premium
Gives you the flexibility to choose your fund based on your risk profile
whole Life Mid Cap Equity, whole Life income, and whole life Short Term
Fixed Income. You may choose to switch between the Funds, anytime
Enables you to enjoy market-linked returns with a potential for higher
growth
Opportunity to bring you additional income on funds that might have
otherwise given you minimum returns in your savings account, subject to
market performance
Loyalty benefit: Additional 0.25% of units under the Regular Premium
Account every five years, provided the policy is in force.

Invest Assure Gold Offers you

Flexibility of Choosing The Amount of Death Cover

Flexibility of Increasing Sum Assured
Cover For the Whole of Life
Loyalty Additions
Flexibility in Paying Premiums
Flexibility of Choosing your Investment Fund
Flexibility of Switching Between Funds
Flexibility of Topping-Up your premium
Discontinuance of Premium within Three Years From Inception
Flexibility of a Premium Holiday
Flexibility of Partial withdrawal
Flexibility of Policy Reinstatement
Flexibility of Premium Mode
Flexibility of Adding Rider
33

D. MahaLife: The Whole Life Plan

Tata AIG Lifes MahaLife plan is truly one of a kind. For a start, it
offers you way too many benefits:

Only a 12 year premium paying period for lifetime coverage.

Guaranteed annual payment for life from the 12 th policy anniversary
onwards. Tax free.
On death or at maturity at age 100, the entire sum assured will be paid.
Tax-free.

Cash dividends from the 6th policy anniversary onwards. Tax-free.

Premiums paid eligible for tax exemption benefit. As per current tax laws.

Who is eligible for this policy?

34

The minimum age of eligibility for this policy is 30 days, which means, if you
buy this policy for your child you only have to pay premiums for 12 years,
after which the child gets an income as well as coverage for his entire life.
The maximum age if eligibility is 50 years, which makes it ideal for you as
well, because it provides both a pension and lifetime coverage.

35

COMPANY PROFILE

History:
The HSBC Group is named after its founding member, The Hongkong and
Shanghai Banking Corporation Limited, which was established in 1865 to finance
the growing trade between Europe, India and China.
The inspiration behind the founding of the bank was Thomas Sutherland, a Scot
who was then working for the Peninsular and Oriental Steam Navigation
Company. He realized that there was considerable demand for local banking
facilities in Hong Kong and on the China coast and he helped to establish the
bank, which opened in Hong Kong in March 1865 and in Shanghai a month later.
Soon after its formation the bank opened agencies and branches around the
world. Although that network reached as far as Europe and North America, the
emphasis was on building up representation in China and the rest of the AsiaPacific region. HSBC was a pioneer of modern banking practices in a number of
countries. In Japan, where a branch was established in 1866, the bank acted as
adviser to the government on banking and currency. In 1888, it was the first bank
to be established in Thailand, where it printed the countrys first banknotes.
From the outset trade finance was a strong feature of the local and international
business of the bank, an expertise that has been recognized throughout its
history. Bullion, exchange, merchant banking and note issuing also played an
important part. By the 1880s, the bank was acting as banker to the Hong Kong
government and also participated in the management of British government
accounts in China, Japan, Penang and Singapore. In 1874 the bank handled
Chinas first public loan and thereafter issued most of Chinas public loans.

What is HSBC?
We are the worlds local bank.
Headquarters in London, HSBC is one of the largest banking & financial services
organization in the world.
HSBCs international network comprises over 9500 offices in 76 countries &
territories in Europe, the Asia-Pacific region, the Americas, the Middle East &
Africa.
With listings on the London, Hongkong, New York, Paris & Bermuda stock
exchange shares in HSBC holdings places are held by nearly 200,000
36

shareholders in some 100 countries & territories. The shares are traded on the
New York stock exchange in the form of American Depository Receipts.
Through an international network linked by advertisement techniques, including a
rapidly growing e-commerce capability, HSBC provides a comprehensive range
of financial services like2
3
4
5

Personal financial services

Commercial Banking
Corporate Banking
Investment Banking

THE HSBC GROUP IN INDIA

Year of commencement of operations in India
The Mercantile Bank of India, China & London
: 1853
The Hongkong & Shanghai Banking Corporation Limited (HBAP) : 1867
HSBC Securities & Capital Markets (India) Private Limited (HBAP) : 1995
HSBC Private Equity Management (Mauritius) Limited
(India liaison Office) (PEIN)
: 1995
HSBC Electronic Data Processing India Private Limited (HDPI)
: 2000
HSBC Primary Dealership (India) Private Limited (HCPD)
: 2001
HSBC Professional Services (India) Private Limited (HPSI)
: 2001
HSBC Software Development (India) Private Limited (HSDI)
: 2002
HSBC Asset Management (India) Private Limited (ISIN)
: 2002
HSBC Insurance Brokers (India) Private Limited (ININ)
: 2003
HSBC Operations & processing enterprise(India) Pvt. Ltd. (HOPE) : 2003
Canara HSBC Oriental bank of commerce Life insurance co. Ltd.
: 2008

37

Offices in india
HBAP :
HSCI :
PEIN :
HDPI :
HPSI :
HSDI :
ININ :
HOPE :
AMIN :
HFHI :
TOTAL :

Number Of employees
as at 31st july 2008

57
2
1
8
1
4
5
13
18
01

8,532
109
13
16,650
54
5,882
20
3,274
168
01

110

34,307

38

THE HONGKONG & SHANGHAI BANKING CORPORATION

LIMITED (HSBC)
Zone

Branch Location

East

Kolkata
Bihar
Chhattisgarh

West

Mumbai
Ahmedabad
Pune
Thane
Vadodara
Indore
Nagpur

North

New Delhi
Gurgaon
Chandigarh
Noida
Jaipur
Jodhpur
Ludhiana
Lucknow

South

No. of Branches
7
1
1
9
1
2
1
1
1
1
5
1
1
1
1
1
1
1

Chennai
Kochi
Coatore
Banglore
Hyderabad
Trivandrum
Visakhapatnam
Mysore

TOTAL

39

2
1
1
2
1
1
1
1
47

The HSBC Group commenced operations in India in 1867 with a branch in

Calcutta. They claim an earlier commencement, as the Mercantile Bank of India,
China & London, which the group acquired in 1959, was established in 1853,
with a branch in Bombay.
The Bank has relocated some branches in Mumbai, New Delhi, Chennai,
Banglore, Kolkata & Visakhapatnam from what were once important trade
centres to more appropriate present day locations that hold our target customer
base.

40

PERSONAL FINANCIAL SERVICES (PFS)

HSBC India offers a wide range of competitively priced services & products to
over 1.75 million individual resident Indians as well a Non-resident Indian
customers across India, USA, UK, Middle East & South East Asia. HSBCs 150
year presence in India allows it to enjoy the advantage of deep rooted knowledge
of local markets & customs. This has lead to development of products & services,
which are attuned to the financial needs of Indians in the cities where HSBC
operatives. The HSBC brand is associated with core values such as
transparency, trust & honesty. These factors enable HSBC India to remain highly
competitive & at the leading edge of the retail & commercial banking market in
the country.
The distribution network in India consists of 47 branches in 26 cities supported by
170 ATMs at 142 locations. In addition, self service banking channels, such as
Internet Banking & a 24 hour centralized all India Call Centre provide a strong
backbone to the distribution capabilities. A second load balancing Call Centre
became operational in January 2005 at HSBC Operations & Processing
Enterprise (India) Private Limited, Chennai. Customers can apply for all products
& services online at www.hsbc.co.in
The bank offers a complete suite of products & services including HSBC Premier
International, HSBC Premier, Power Vantage, Savings & Current Accounts,
International Debit Cards & Term Deposits in addition to consumer loan products
like International Credit Cards, Mortgage, Personal Loans, Educational loans &
Overdrafts. HSBC is the 6th largest Credit Card issuer in India with over 1.3
million cards in force.
Premier & mid market customers have access to comprehensive Financial
Planning & HSBC is a market leader in the provision of Wealth Management
services. In 2005,HSBC was the largest distributor of Retail Mutual Funds in
India, & the biggest sales channel for Banc assurance partner TATA AIG.
Non-Resident Indians (NRIs) constitute 56% of the Banks deposit base. The
banking a needs of NRIs are fulfilled from branches in India & 11 NRI centres
abroad. We have over 84,000 NRI Customers, & have started referring
customers to Financial Planning Managers & the Private Bank in the host
countries, to address their needs for investment products. A free remittance
service is offered between accounts held by NRIs with HSBC

overseas & onshore. In 2006, an International Banking Centre was established

facilitate cross border business referrals.
In October 2005, HSBC launched an onshore Private Banking proposition
branded HSBC Private Banking. The proposition targets clients with minimum
assets of INR 25 M & encompasses asset classes such as Real Estate, Equity
Derivatives & Commodities. This is an addition to Fixed Income & Equities, which
are already being offered. The proposition uses Active Advisory as its
cornerstone & key differentiator.
41

The Bank has sought RBI approval to establish a separate consumer finance
branch network under a non banking financial institution, which will distribute
personal loans
& ancillary products to a broader segment of the Indian consumer base than is
currently
served by the Banks existing product portfolio. The personal loan product is
being piloted through the bank branch network & initial results are promising.

42

RESEARCH METHODOLOGY
The study undertaken by me was regarding a detailed analysis of MARKETING
AND PROMOTION of HSBC products, studying its current scenario and studying
the challenges and difficulties faced by HSBC bank.

Research Objective
The main objective of my study is to find the main strategies, policies used &
various sales promotional activities of HSBC bank .

Sample size
150 RESPONDENTS, I have collected the data through structure questionnaire.
All these data is collected through retail investors, business men, builders,
industrialists, exporters, doctors , etc.

PRIMARY DATA
Sampling is the process of collecting information only from a small representative
part of the population. Stratified Random Sampling is one amongst the most
elementary random sampling techniques. A stratified random sampling is a
method that allows each possible sample to have an equal probability of being
picked and each item or individual in the entire population have an equal chance
of being included in the sample. For this project work, without replacement
sampling method is used. It means that a person or item once selected is not
returned to the frame and therefore cannot be selected again. This selection
process continues until the desired sample size n is obtained.
The survey was carried out at various levels & the target group was retail
investors, business men, builders, industrialists, exporters, doctors etc.
Questionnaires were used as an instrument to collect the primary data.
This data was obtained by various promotion schemes like-

43

CANNOPIES- we put canopies in front of various financial institutions

like banks, commercial places, and entertainment places like Agarwal
tower, Shastri circle, Corporate hub etc. There people
approach us and we give them the questionnaire to fill and provide the
details of HSBC products.
APPROACHING TO INDUSTRIAL UNITS - We approach to industrial
areas and give the questionnaire to fill and explain the details of various
HSBC products.

SECONDARY DATA
The Secondary data are those, which have already been collected and
being processed through the statistical process.
We got the secondary data through
PREVIOUS TRANSACTION RECORDSi We got the records of those people who have already
invested in HSBC.
ii Through directory- We got the records of Exporters,
Businessmen, architects etc.

Population Definition

Element: Retail Investors, Business Men, Builders,

Industrialists, Exporters, Senior Citizens, and
others.
Sample Unit- GURGAON City
Sampling Method- Simple Random Sampling
Sampling Size- Based on ages, income area etc.
Data collection- through directories, Previous
records through friends and relatives

44

ANALYSIS AND INTERPRETATION

AGRESSIVE iNVESTORS

Cash; 10%
Equity

Debt

Cash

Equity; 50%
Debt; 40%

Equity 75
Debt
60
Cash
15
In the above table 75 investors in Equity, 60 in Debt, & 15 in Cash.
Debt instruments are- Company fixed deposits, bonds, Government Securities
fund, and Govt. Saving schemes, Pension Schemes
Equity Instruments are- Equity funds diversified, Equity funds Sectoral Plan,
Balanced Fund (Equity Portion), Equity IPO.
Cash Instruments- Liquid Funds, Government Securities, Income Funds long
Term (Including MIP).
Aggressive investors comprises of 50% in Equity, 10% in Cash, 40% in Debt.

45

Moderate Investor

10%
Debt
30%

Debt
Equity
Cash

Equity

Cash

60%

90
45
15

In the above table 45 investors invest in Equity, 90 in Debt, & 15 in Cash.

Debt instruments are- Company fixed deposits, bonds, Government Securities
fund, and Govt. Saving schemes, Pension Schemes.
Equity Instruments are- Equity funds diversified, Equity Funds Sectoral Plan,
Balanced Fund (Equity Portion), Equity IPO.
Cash Instrument- Liquid Funds, Government Securities, Income Funds Long
term (including MIP)./
Moderate investor comprises of 60 % in Debt, 10% in cash, and 30% in Equity.

46

Conservative Investor

20%
Debt
10%

Cash

Equity

70%

Debt
Cash
Equity

70
10
20

In the above table 20 investors invest in Equity, 70 in Debt, &10 in Cash

Debt Instruments are- Company fixed deposits, bonds, Government Securities
fund, and Govt. Saving Schemes, Pension Schemes.
Equity Instruments are- Equity funds diversified, Equity funds Sectoral Plan,
Balanced Fund (Equity Portion), Equity IPO.
Cash Instruments- Liquid Funds, Government Securities, and Income Funds
Long Term (including MIP).
Conservative Investors comprises of 70% in Debt, 10% in Cash, and 20% in
Equity.

47

Very Conservative Investor

Equity; 10%
Cash; 10%
Debt

Cash

Equity

Debt; 80%

Debt
Cash
Equity

120
15
15

In the above table 15 investors invest in Equity, 120 in Debt, &120 in Cash.

Debt Instruments are- Company fixed deposits, bonds, Government Securities

Fund, and Govt Saving Schemes, Pensions Schemes.
Equity Instruments are- Equity Funds diversified, Equity Funds Sectoral Plan,
Balanced Fund (Equity portion), and Equity IPO.
Cash Instruments- Liquid Funds, Government Securities, and Income Funds
Long Term (including MIP)
Very conservative investors comprises of 80% in debt, 10% in Cash & 10
% in Equity

48

No. Of Invesotors Found With Their Annual Icomes

70

60

50

40

30

20

10

0
60K-1LAKH 1LAKH-2LAKH2LAKH-3LAKH3LAKH-ABOVE

60K-1LAKH
1LAKH2LAKH
2LAKH3LAKH
3LAKHABOVE

62
48
24
16

In the above table 62 investors are those who fell in the income slab from 60
thousand to 1 lakh, 48 investors fell in the income slab form 1 lakh-2lakh, 24
Investors fell in the income slab from 2 lakh-3lakh, 16 investors fell in the
income slab of above 3 lakhs.

49

Types of Investors
70
60
50
40
30
20
10
0
Aggressive Investors
Moderate Investors
Conservative
Very
Investors
Conservative Investors

Aggressive Investors
Moderate Investors
Conservative Investors
Very Conservative
Investors

18
60
47
25

18 investors are found Aggressive, 60 investors are found Moderate, and 47

Investors are found Conservative & 25 Investors are found very conservative
in the survey.

50

up to 5%
5%-10%
More Than 10%

38
69
43

In the above table 38 Investors up to 5% of their income, 69 investors invest up

to 5%-10% of their income & 43 investors invest more than 10% of their income.
In the above graph 25% of total surveyed investors invest up to 5% monthly.
46% of the total surveyed investors invest up to 5%-10% monthly.
29% of the total surveyed investors invest more than 10% monthly.

51

Investment Made For The Last Number Of Years

1-5 Years; 16%

1-5 Years
10 Years
& Above; 47% 5-10 Years

10 Years & Above

5-10 Years; 37%

1-5 Years
5-10 Years
10 Years &
Above

24
55
71

16% of the investors were investing since last 1-5 years.

37% of the investors were investing since last 5-10 years.
43% of the investors were investing since last 10 years & above.

52

Expectation Of Investors regarding their Investments to grow

13%

25%

Steadily

At average

Fast

61%

Steadily
At
average
Fast

20
92
38

In the above table 20 investors expected their investment to grow steadily.

92 investors expected their investment to grow at a average rate.
38 investors expected their investment to grow at a fast rate.
In the above graph 13% of the surveyed investors expected their investments to
grow steadily 62% of the surveyed investors expected their investments to grow
at an average rate. 25% of the surveyed investors expected their investments to
grow at a fast rate.

53

Perception of Investors with respcetive to returns

Safety of Principal

Earning return above inflation rate

15%

21%

64%
Earning High returns

Safety of Principal
Earning return above
inflation rate
Earning High returns

22
96
32

In the above table 22 surveyed investors gave more importance to safety of

principal, 96 investors gave more importance to earning returns above inflation
rate, 32 investors gave more importance to earning high returns.
15% of the surveyed investors had a primary motive of the safety of principal,
64% of the surveyed investors were more concerned about earning returns
above inflation rate. 21% of the surveyed investors were more concerned about
earning high returns.

54

Investor's Knowledge about various Investment Schemes

Nil; 8%

Good; 23%
Nil

Average

Good

Average; 69%

Nil
Average
Good

12
104
34

In the above table 12 investors were found with no knowledge about various
investment schemes, 104 investors were found with average knowledge about
various investment schemes, 34 investors were found with good knowledge
about various investment schemes.
In the above graph out of total surveyed investors 8% were found with nil
investment knowledge, 69% were found with average investment knowledge,
23% were found with good investment knowledge.

55

Age Group of Various Investors

Between 20-30; 17%

Above 50

Betw een 30-50

Between 30-50; 32%

Above 50
Between 30-50
Between 20-30

Betw50;
een 20-30
Above
51%

76
48
26

In this above table out of the total surveyed investors

76 investors are above 50 years, 48 are between 30-50 years & 26 investors are
between 20-30 years.
In the above graph 51% were above 50 years 17% were between 20-30, & 32%
were between 30-50.

56

Occupation Status of Various Investors

Doesn't affect; 16%

Secured 19%
Not Secured;

Secured
Not
Secured
Doesn't
affect

Not Secured

Doesn't affect

Secured; 65%

98
28
24

In the above table out of the total surveyed investors 98 investors were found
with job security, 28 investors were found with unsecured jobs & 24 investors
were found in a no affect status.
In the above graph 65% of the investors were in a state of secured jobs, 19% of
the investors were in the state of unsecured jobs & 16% of the investors were in
the state where this factor doesnt affect them.

57

Family Status of Various Investors

None; 13%
More than 2 21%
1-2 dependents;

More than 2
1-2
dependents
None

1-2 dependents

None

More than 2; 65%

98
32
20

In the above table out of the total surveyed investors 98 investors were those
who are having more than 2 dependents, 32 investors were those who are
having 1-2 dependents, 20 investors were those who didnt had any dependent.
In the above graph 66% investors were those who are having more than 2
dependents, 21% investors were those who are having 1-2 dependents & 13%
investors are those who having no dependents.

58

Investor's approach in making an Investment decisions

Guess Work; 37%

Educated View

Educated View; 15%

Friendly Advice

Guess Work

Friendly Advice; 49%

Educated
View
Friendly
Advice
Guess Work

22
73
55

In the above table out of the total surveyed investors 22 investors took educated
view before investment, 73 took friendly advice before investment & 55 made
guess work.
In the above graph 48% took friendly advice, 15% took educated view & 37%
made guess work.

59

Views of the Investors if the stock market crashed down

Withdraw; 19%

Invest; 29%

Wait; 53%

Withdra
w
Wait
Invest

28
79
43

Out of the total surveyed investors 28 investors were found in a state of

withdrawal of money, 79 investors were found out in the state of wait & watch &
43 investors were found out in the state of more investment in the market if the
market crashes down.
In the above graph 52% will wait & watch 29% will invest more & 19% investors
will withdraw their money.

60

M
A
R
K
E
T
G
R
O
W
T
H

QUESTION MARK

STAR

(M.F.)

(F.D.)

CASH COW

DOG

(SIP)

(INSURANCE)

MARKET

SHARE

STAR CATEGORY PRODUCT: These are the products that are not only market
leaders but are also growing fast. By this study it can be analysed that FD is a
product of STAR CATEGORY. If we analyse the current status of investments,
then all respondents have their investments & if they are provided with
Rs.10,00,000 then too they will invest a part of it in FD. Hence presently FD has
a large Market Share & in future also its market share will increase but not
decrease.
CASH COW PRODUCT: Such products are weak in both the factors i.e., low
growth & low market share. The investment avenues coming in this category are
SIPs.
Professional have invested in SIP, but this is restricted to their future & SIP is
best option for the businessmen. Rather people would like to invest money in
post office.

61

DOG CATEGORY PRODUCT: Products of this category are categorized by

Dominant share & Low growth. The investments avenues coming in this category
is INSURANCE. It is among todays growing sector. But if we point our
consideration towards professionals, as it is in this study, then Insurance comes
under Cash Cow. Its market share is large, but at the same time these people are
less interested in it as a future investment avenue.
QUESTION MARK CATEGORY PRODUCT: High growth & Subordinate Share
characterize these products. SHARES, MUTUAL FUNDS & BONDS comes
under this category. At present they have low market share but growth
prospectus of these products are very high.

62

FINDINGS
The basic thrust of the research is to find out types of investors & their portfolio &
their profile.
On the basis of questionnaire certain points are given to the investors.
1. Those investors who obtained between 160-260 are very conservative.
2. Those investors who obtained between 261-340 are conservative
investors.
3. Those investors who obtained between 341-410 are moderate investors.
4. Those investors who obtained between 411-480 are aggressive investors.
A. In the survey 18 investors were found aggressive out of the total of 150
surveyed investors. The asset allocations of aggressive Investors are as follows;
They invest 50% in equity instruments, 40% in debt instruments & 10% in cash
instruments.
B. 60 investors were found to be moderate Investors. The asset allocations of
these investors are as follows;
60% of the surveyed investors invest in debt & 30% of the them invest in equity &
remaining 10% of them invest in cash instruments.
C. 47 investors found to be conservative investors out of the total 150 surveyed
investors. The asset allocations of conservative investors are as follows;
70% of them invest in debt instrument,20% of them invest in equity instruments,
& 10% of them invest in cash instruments.
D. 25 investors were found to be very conservative out of the total 150 surveyed
investors. Their asset allocations are as follows;
80% of them invest in debt instruments, 10% of them invest in equity
instruments, & 10% of them invest in cash instruments.
E. In the survey the data was obtained regarding the investment capacity of the
investors also in order to get the purchasing power and financial efficiency of the
investors.
25% of the total surveyed investors invested up to 5% of their monthly income.
46% of the total surveyed investors invested up to 5% to 10% of their monthly
income.
29% of the total surveyed investors invested more than 10 to their monthly
income.
F. The investment made for the last number of years is also taken into
consideration to take into account their investment periods.
63

16% of the total surveyed investors were investing since last 1-5 years.
37% of the total surveyed investors were investing since last 5-10 years.
43% of the total surveyed investors were investing since last 10 years and
above.
G. Expectations of the investors regarding their investments to grow were also
found out because on its basis we can make out consumers investment
decisions and consumers mind setup it was all psychological based.
Out of the total surveyed investors only 13% expected their investment to grow
steadily.
Out of the total surveyed investors only 62% expected their investment to grow at
average rate.
Out of the total surveyed investors only 25% expected their investment to grow at
a fast rate.
H. The most important part of this survey was to know about the perception of
the investors with respect to returns. The following results were obtained.
15% of the total surveyed investors had a perception that safety of principal is
their primary area of concern.
64% of the total surveyed investors had a perception that earning returns above
inflation rate is their primary area of concern.
21% of the total surveyed investors had a perception that earning high returns is
their primary area of concern

I. As far as investors knowledge part regarding various investment schemes is

concerned it was found that
69% of the total surveyed investors had average knowledge about various
investment schemes.
8% of the total surveyed investors had no knowledge about various investment
schemes
23% of the total surveyed investors had good knowledge about various
investment schemes.
J. Age group was also a rational issue to know while carrying out the research.
It was found that 17% of the total surveyed investors were between 20 to 30
years.
It was found that 32% of the total surveyed investors were between 30 to 50
years.
It was found that 51% of the total surveyed investors were above 50 years.
K. Occupation status is also a great factor to know because it affects consumer
buying behavior and buying decisions.
65% of the total surveyed investors had secured occupation.
64

19% of the total surveyed investors were in the state of non-security of

occupation.
16% of the total surveyed investors were in that state where occupation doesnt
affect them.
L. To know about investment approach in making investment decisions gives
significance to the research as by knowing this aspect we can conclude to a
great extent about the type of investors.
37% of the total surveyed investors relied on guesswork.
15% of the total surveyed investors relied on the educated view.
48% of the total surveyed investors relied on the friendly advice .

RECOMMENDATIONS
65

1. The investors above the age of 50 years must be taken into consideration
as they are having great potential regarding investment.
2. HSBC must lay down some sound strategies to trap more customers by
giving them more commission in comparison to other investment centers.
3. HSBC must use marketing tools like point of purchase, advertisement
through Mass Media like loading Newspapers, Magazines, Television,
Exhibition, Fairs, SMS on Mobiles, advertisement on the internet.
4. The organization is lacking on the parameters of motivation. It is
recommended that the organization must adopt the concept of motivation.
5. HSBC should organize programs for customer awareness in developing
areas and establish a confidence and belief among the customers residing
there.

CONCLUSION
66

From the analysis of the responses received from the investors in GURGAON
City, a majority of investors are found to be conscious and enlightened regarding
their investments, return & growth.
We have very good market in GURGAON which comprises potential investors
but due to lack of basic promotion & publicity these investors are not fully aware
of our company & whosoever is aware of our company their investment decisions
are done on the basis of security, analysis of risk yield & return few parameters
like Demographic, Physiological, Income, etc.
So my findings are that HSBC market should make little more efforts to trap the
potential investors, like Media Advertisement, Paper Advertisement, Seminars &
Business Meets & building a good relationship with potential business, moreover
friendly guidance.

67

LIMITATIONS

Many constraints were involved in doing this study. Some of them are as follows.
The most significant limitation has been the individuals involved in this
study were very busy and did not spare much time in discussion.
The sample size selected for the survey was too small as compared to
large population.

The project was carried out only in the Delhi Ncr, so findings on data
gathered can be best true for Delhi Ncr only and not applicable to other
parts of state and country.
Indian stock market is a market where sentiments play a major role in price;
hence 100% accurate predictions cannot be made about its future path

68

BIBLIOGRAPHY

BOOKS:
.
1. Kotler Philip: Marketing in New Millennium, Millennium Edition Prentince
Hall of India, New Delhi.
2. C.R Kothari: Research Methodology; Wishva Publication, New Delhi.
3. M.J Methew : Risk & Insurance Management

MAGAZINES:1
2
3
4
5
6

Business world.
Invest one
Business Today
Invest time by TATA-AIG
Fund Fact Sheets of Reliance Mutual Fund.
Offer Documents of Different Schemes.

NEWSPAPERS:1.
2.

Financial Time.
Economic Times.

WEBSTIES:
www.reliancemutualfund.com
www.hsbc.co.in
www.google.com
www.yahoo.com
www.indiainfiline.com
www.bse.com

APPENDICES
QUESTIONNAIRE
69

1. NAME:
2. ADDRESS:
3. PHONE NO: (R)
(O)
4. AGE:

20-30
30-50
Above 50

5. PROFESSION:
Entrepreneur
Industrialist

Private Job
Exporter

Government Job

6. INCOME LEVEL:
60,000 1, 00,000
1, 00,000 2, 00,000

2, 00,000 3, 00,000
Above 3, 00,000

7. FAMILY STATUS:
Dependents

Non-Dependents

8. Have you ever invested in the market?

Yes
a.
b.
c.
d.

No

If Yes, What is your Portfolio?

Mutual Fund
Insurance
Shares
Others
70

9. Are you aware of various HSBCs investment schemes?

Nil

Average

Fully

10. Have you ever invested in HSBC?

Yes

No

If yes, youre Diversification (Mention your preferences)

1. Equity:
2. Debt:
3. Cash:
11. Please tick, I Am
First time Investor Regular

ABBREVIATION
SIP: Systematic investment plan
TMD: Term deposit
AMFI: Association of mutual funds of India
AMC: Asset management company
71

BSE : Bombay stock exchange

MF: Mutual fund

72