SUMMER TRAINING PROJECT

REPORT

ON

MUTUAL FUNDS- AN INVESTMENT

ALTERNATIVE

FOR PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE DEGREE OF

BACHELOR OF BUSINESS ADMINISTRATION
(AFFILIATED TO C.C.S. UNIVERSITY, MEERUT)
(2013-2016)
Submitted to: SUBMITTED BY:
Mr. R.P SINGH Gagan Arora
(HOD) BBA VIth Sem.
Roll No:9267533

S.D. COLLEGE OF MANAGEMENT STUDIES

MUZAFFARNAGAR

1
 Acknowledgement

The pleasure that follows the successful completion of an assignment would remain
incomplete without a word of gratitude for the people without whose cooperation the
achievement would have remained a distant dream. So I would like to extend my
immense indebtness to all of them who have guided and motivated me throughout my
research project. I sincerely thank to all of them for their valuable contribution
without which this project report would have not reached its goals.

I sincerely wish to acknowledge a deep sense of gratitude to Mr. ABHISHEK

MISHRA (AREA HEAD, HDFC STOCK BROKING LTD.; Dehradun) for giving me
an opportunity to undergo summer training in HDFC.

I am grateful to Mr. Tribhuwan Singh Mall (personal finance advisor, HDFC)

and Mr. Nishant Kumar(personal finance advisor, HDFC) for their valuable
guidance and encouragement during the preparation of my summer training report.
I will be failing in my duty if I don’t accord a mark of respect towards all the staff
members of HDFC who were very supportive & friendly through my training tenure.

I would also like to extend my thanks to “Mr. R.P Singh”(H.O.D.) and Mr. Akshay
Sir my project guide and to all my faculty members in management department for
giving me valuable suggestions and advice in preparing my project report.

2
 PREFACE

This project report has been prepared towards the partial fulfillment of the degree of

BBA (Bechulor of Business Administration) from C.C.S UNIVERSITY, MEERUT. I

have done my study on “Mutual Funds – An investment Alternative” under HDFC

Consultants ltd. DELHI.

Mutual Funds are fast becoming a preferred investment option for the investors.

Mutual Funds offer several features that make them a powerful and convenient wealth

creation vehicle worthy of consideration. An investor can invest his money in

different ways in mutual funds such as diversified portfolio, liquidity, tax savings etc.

The Indian Mutual Fund industry has started opening many of the exciting

opportunities to the investors. Investors are now looking towards equity linked

investment options.

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.

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 LIST OF CONTENTS

INTRODUCTION OF THE PROJECT 05-31

COMPANY PROFILE 32-44

OBJECTIVES 45

RESEARCH METHODOLOGY 46

LIMITATIONS 47

DATA ANALYSIS 48-57

FINDINGS 58

SUGGESTION 59-65

CONCLUSION 66

RECOMMANDATION 67

BIBLIOGRAPHY 68

QUESTIONNAIRE 69-70

4
INTRODUCTION

5
World today has become a small village with the borders no longer dividing the
nations in the true sense as people can now move freely between various countries
and invest their money anywhere they want in the world.
Today the investment solution providers have a complete range of financial products
and suggest the various products after analyzing the need of the investors. With the
busy schedule of the people it is not practically possible to keep the track of the
investments on a daily basis and hence the need for a professional service arises.
Mutual funds is one such avenue for investments where there is a lot of flexibility
available with the professional services of the experts who work in the capacity of the
fund managers. In today’s dynamic scenario where the interest rates on the small
savings are reducing and the market linked instruments have become the main theme
of any investment vehicle, mutual funds serve the most of the investors needs.
Globally mutual funds have been preferred route of investments in the capital
markets. The ordinary investors does not have time or the required knowledge about
the daily movements of the markets.
Mutual funds are one of the best investments ever created because they are very cost
efficient and very easy to invest in.
Mutual funds are investment vehicles, and you can use them to invest in asset classes
such as equities or fixed income. The investor should compare the risks and expected
yields after adjustments of tax on various investments while taking decisions. The
investors may seek advice from experts and consultants including agents and
distributors of mutual funds schemes while making investment decisions.

What is a Mutual Fund?

6
A mutual fund is simply a financial intermediary that allows a group of investors
to pool their money together with a predetermined investment objective. The
mutual fund will have a fund manager who is responsible for investing the
pooled money into specific securities (usually stocks or bonds). When you invest
in a mutual fund, you are buying shares (or portions) of the mutual fund and
become a shareholder of the fund.

Thus it is a mechanism for pooling the resources by issuing units to the investors
and investing funds in securities (such as share, debentures etc.) 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 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 profit or losses are shared by the investors in proportion to their
investments.

The mutual funds normally come out with a number of schemes with different
investment objectives which are launched from time to time. A mutual fund is
required to be registered with Securities and Exchange Board of India (SEBI)
which regulates before it can collect funds from the public.

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.

7
 Flow chart depicting working of a mutual fund
Source:www.amfiindia.com

HISTORY OF MUTUAL FUNDS IN INDIA

8
The origin of mutual fund industry in India is with the introduction of the concept
of mutual fund by UTI in the year 1963.The objective then was to attract the
small investors and introduce them to market investment. Though the growth was
slow, but it accelerated from the year 1987 when non-UTI players entered the
industry

In the past decade, Indian mutual fund industry had seen dramatic improvements,
both quality wise as well as quantity wise. Before, the monopoly of the market
had seen an ending phase,: the Assets under Management (AUM) were Rs. 67bn.
The private sector entry to the fund family raised the AUM to Rs. 470 bn in
March 1993 and till April 2004; it reached the height of 1,540 bn. Putting the
AUM of the Indian Mutual Funds Industry into comparison, the total of it is less
than the deposits of SBI alone, constitute less than 11% of the total deposits held
by the Indian banking industry.

The main reason of its poor growth is that the mutual fund industry in India is
new in the country. Large sections of Indian investors are yet to be intellectuated
with the concept. Hence, it is the prime responsibility of all mutual fund
companies, to market the product correctly abreast of selling.

The mutual fund industry can be broadly put into four phases according to the
development of the sector. Each phase is briefly described as under,

9
First Phase - 1964-87(Unit Trust of India)

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was
setup by the Reserve Bank of India and functioned under the Regulatory and
administrative control of the Reserve Bank of India. In 1978 UTI was de-linked
from the RBI and the Industrial Development Bank of India (IDBI) took over the
regulatory and administrative control in place of RBI. The first scheme launched
by UTI was Unit Scheme 1964. Over the years, US-64 attracted, and probably
still has, the largest number of investors in any single investment scheme. Later in
1970 and 80’s, UTI started innovating and offering different schemes to suit the
needs of different classes of investors. Until 1980’s, UTI’s operations in these
stock market often determined the direction of market movements. At the end of
1988 UTI had Rs.6,700 crores of assets under management.

Second Phase -1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non-UTI, Public Sector mutual funds, bringing in
competition. With the opening up of the economy, many public sector banks and
financial institutions were allowed to establish mutual funds. SBI Mutual Fund
was the first followed by Can bank Mutual Fund (Dec 87), Punjab National Bank
Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun
90), Bank of Baroda Mutual Fund (Oct 92). LIC in 1989 and GIC in 1990. These
mutual funds helped enlarge the investor community and the investible fund. The
end of 1993 marked Rs. 47,004 as assets under management.

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Third Phase - 1993-2003 (Entry of Private Sector Funds)

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

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more

comprehensive and revised Mutual Fund Regulations in 1996. The industry now
functions under the SEBI (Mutual Fund) Regulations 1996.

The number of mutual fund houses went on increasing; with many foreign
mutual funds setting up funds in India and also the industry has witnessed
several mergers and acquisitions. As at the end of January 2003, there were 33
mutual funds with total assets of Rs. 1, 21,805 crores. The Unit Trust of India
with Rs.44, 541 crores of assets under management was way ahead of other
mutual funds.

Fourth Phase - since February 2003

This phase had bitter experience for UTI. It was bifurcated into two separate
entities. One is the Specified Undertaking of the Unit Trust of India with AUM
of Rs.29, 835 crores (as on January 2003). The Specified Undertaking of Unit
Trust of India, Functioning under an administrator and under the rules framed by
Government of India and does not come under the purview of the Mutual Fund
Regulations.

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB; BOB and LIC.
It is registered with SEBI and functions under the Mutual Fund Regulations.
With the bifurcation of the erstwhile UTI which had in March 2000 more than
Rs.76,000 crores of AUM and with the setting up of a UTI Mutual Fund,
11
conforming to the SEBI Mutual Fund Regulations, and with recent mergers
taking place among different private sector funds, the mutual fund industry has
entered its current phase of consolidation and growth. As .at the end of
September, 2004, there were 29 funds, which manage assets of Rs.153108 crores
under 421 schemes

12
GROWTH IN ASSETS UNDER MANAGEMENT
The graph indicates the growth of assets over the years.

Note:
Erstwhile UTI was bifurcated into UTI Mutual Fund and the Specified Undertaking of
the Unit Trust of India effective from February 2003. The Assets under management
of the Specified Undertaking of the Unit Trust of India has therefore been excluded
from the total assets of the industry as a whole from February 2003 onwards.

Source: amfiindia.com

13
 FUNDS STRUCTURE AND IT’S CONSTITUENTS

LEGAL STRUCTURE OF MUTUAL FUNDS

Mutual funds have a unique structure not shared with other entities such as companies
or firms. It is important for the employees and agents to be aware of the special
nature of
this structure, because it determines the rights and responsibilities of the fund’s
constituents i.e. sponsors , trustees, custodians, transfer agents and of course, the fund
and asset management company(AMC). It also drives the inter-relationship between
these constituents.

MUTUAL FUNDS STRUCTURE IN INDIA

India has a legal framework within which mutual funds must6 be constituted. In India
open and close ended funds operate under the same regulatory structure, and are
constituted along one unique structure as “UNIT TRUSTS’.
A mutual fund in India is allowed to issue open and close ended schemes under a
common legal structure. Mutual funds in India are laid down under SEBI regulations,
1996.

There are many entities involved and the diagram below illustrates the organizational
set up of a mutual fund:

14
 Organization of Mutual Fund

Source: amfiindia.com

1. SPONSOR

Sponsor of the mutual fund is just like the entrepreneur who takes the risk of starting
the business. Sponsor can be an individual, company or another form of organization.
There are three criteria for the sponsors, which are as follows:

a) Three years profitability in the business which they are doing.

b) Five years track record of the business.

c) 40 % of the net worth of the mutual funds should come from the sponsor.

2. Asset Management Company(AMC)

The Asset Management Company is the core part of the mutual fund as the Chief
Investment Officer of the AMC will make all the investment decisions. The net
worth of the AMC at all the times should be Rs.10 crores. The success or failure

15
 of the fund in generating returns for the investors depend to a very large extent on
the skills and knowledge of the fund manager.

3. Trustee:
Trustees are those individuals who are appointed by the sponsor and have a credit
worthiness in the market. The trustees of the mutual fund hold its property for the
benefit of the unit holders, they do not directly manage the portfolio of securities.
For this they appoint the AMC with the prior approval of SEBI. They see to it that
the interest of the mutual fund investors are protected and that the working of the
mutual fund is done in lines with the rules and regulations of the mutual fund
industry.

Rights of Trustees:
1. The trustees appoint the AMC with the prior approval of SEBI.

2. They also approve each of the schemes floated by the AMC.

3. They have the right to request any necessary information from the AMC
concerning the operations of various schemes managed by AMC to ensure that the
AMC is in compliance with the trust deed and the regulation.

4. The trustees may take remedial action if they believe that the funds are not
being
conducted in accordance with SEBI regulations.

4. Custodian and Depositories:

Mutual funds are in the business of buying and selling of securities in large
volumes.
Handling these securities in terms of physical delivery and eventual safekeeping is
therefore a specialized activity. The custodian is appointed by the Board of
Trustees for safekeeping of physical securities or participating in any clearing
system through approved depository companies on behalf of mutual fund in case
of dematerialized securities. A custodian must fulfill its responsibilities in

16
accordance with its agreement with the mutual fund. The custodian should be an
entity independent of the sponsors and is required to be registered with SEBI.

Now the Indian capital market are moving away from having physical certificates
for securities, to ownership of these securities in dematerialized form with a
depository.
Thus, a Mutual fund ‘s dematerialized securities holdings will be held by a
depository through a depository participant. A fund’s physical securities will
continue to be held by the custodian. Thus’ deliveries of a fund’s securities are
given or received by a custodian or a depository participant, at the instruction of
the AMC, although under the overall direction and responsibility of the trustees.

5. Transfer Agents:

Transfer agents are responsible for issuing and redeeming units of the mutual
fund and provide other related services such as preparation of transfer documents
and updating investor records. A fund may choose to carry out this activity in-
house and charge the scheme for the service at a competitive market rate. Where
an outside transfer agent is used, the fund investor will find the agent to be an
important interface to deal with, since all of the investor services that a fund
provides are going to be dependant on the transfer agent.

6. Distributors:
For a fund to sell units across a wide retail base of individual investors, an
established network of distribution agents is essential. AMC usually appoint
Distributors or agents or brokers, who sell units on behalf of the fund.

17
Types of Mutual Funds Schemes in India

Wide variety of Mutual Fund Schemes exists to cater to the needs such as
financial position, risk tolerance and return expectations etc. The table below
gives an overview into the existing types of schemes in the Industry.

 By Structure
 Open - Ended Schemes
 Close - Ended Schemes
 Interval Schemes

 By Investment Objective
 Growth Schemes
 Income Schemes
 Balanced Schemes
 Money Market Schemes

 Other Schemes
 Tax Saving Schemes
 Special Schemes
 Index Schemes
 Sector Specific Schemes

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Types of Mutual Funds

A mutual fund scheme can be classified into open-ended or closed-ended scheme

depending on its maturity period.

1.Open-ended Fund/Scheme:

The units offered by these schemes are available for sale and repurchase on any
business day at NAV based prices. Hence, the unit capital of the schemes keeps
changing each day. Such schemes thus offer very high liquidity to investors and
are becoming increasingly popular in India.

2.Close-ended Fund/Scheme:

The unit capital of a close-ended product is fixed as it makes a one-time sale of

fixed number of units. These schemes are launched with an initial public offer
(IPO) with stated maturity period after which the units are fully redeemed at
NAV linked prices.

In the interim, investors can buy or sell units on the stock exchanges where they
are listed. Unlike open-ended schemes, the unit capital in closed-ended schemes
usually remains unchanged. After an initial closed period, the scheme may offer
direct repurchase facility to the investors. Closed-ended schemes are usually more
illiquid as compared to open-ended schemes and hence trade at a discount to the
NAV. This discount tends towards the NAV closer to the maturity date of the
scheme.

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Schemes according to Investment objective:

A scheme can also be classified as growth scheme, income scheme, or balanced

scheme considering its investment objective. Such schemes may be open-ended or
close-ended schemes as described earlier. Such schemes may be classified as
follows:

1.Growth Oriented Schemes :

The aim of growth funds is to provide capital appreciation over the medium to
long-term .such schemes normally invest a major part of their corpus in equities.
Such funds have comparatively high risks. These schemes provide different
options to the investors like dividend option, capital appreciation, etc. and the
investors may choose an option depending on their preferences.
The investors must indicate the option in the application form. The mutual funds
also allow the investors to change the option at a later date. Growth schemes are
good for investors having a long term outlook seeking appreciation over a period
of time.

2. Income/Debt oriented Scheme:

The aim of income funds is to provide regular and steady income to investors. Such
schemes generally invest in fixed income securities such as bonds, corporate
debentures, government securities and money market instruments. Such funds are less
risky compared to equity schemes. These funds are not affected because of
fluctuations in equity markets. However, opportunities of capital appreciation are
also limited in such funds. The NAVs of such funds are affected because of change in
interest rates in the country. If the interest rates fall , NAVs of such fundsare likely to
increase in the short run and vice-versa. However, long –term investors may not
bother about these fluctuations.

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3. Balanced Fund:

The aim of balanced funds is to provide both growth and regular income as such
schemes invest both in equities and fixed income securities in the proportion
indicated in their offer documents. These are appropriate for investors looking for
moderate growth. They generally invest 40-60% in equity and debt instruments.
These funds are also affected because of fluctuations in share prices in the stock
markets. However, NAVs of such funds are likely to be less volatile compared to pure
equity funds.

4.Money Market or Liquid Fund:

These funds are also income funds and their aim is to provide easy liquidity,
preservation of capital and moderate income. These schemes invest exclusively in
safer short-term instruments such as treasury bills, certificates of deposit, commercial
paper and inter-bank call money , government securities, etc. Returns on these
schemes fluctuate much less compared to other funds. These funds are appropriate for
corporate and individual investors as a means to park their surplus funds for short
periods.

Other Schemes:

1. Tax Saving Fund:

These schemes offer tax rebates to the investors under specific provisions of the
Income Tax Act, 1961 as the government offers tax incentives for investment in
specified avenues. Eg. Equity linked savings schemes(ELSS). Pension schemes
launched by the mutual funds also offer tax benefits. These schemes are growth
oriented and invest pre-dominantly in equities. Their growth opportunities and risks
associated are like any equity-oriented scheme.

21
2.Special schemes:

a. Index funds:

Index funds replicate the portfolio of a particular index such as the BSE sensitive
index, S&P NSE 50 index(Nifty), etc. These schemes invest in the securities in the
same weight age comprising of an index. NAVs of such schemes would rise or fall in
accordance with the rise or fall in the index, though not exactly by the same
percentage due to some factors known as “tracking error” in technical terms.
Necessary disclosures in this regard are made in the offer document of the mutual
fund scheme.

b. Sector Specific Schemes:

These are the funds/schemes which invest in the securities of only those sectors or
industries as specified in the offer documents. Eg :pharmaceuticals, software, FMCG,
petroleum stocks, etc. The returns in these funds are dependent on the performance of
the respective sectors/industries. While these funds may give higher returns, they are
more risky compared to diversified funds. Investors need to keep a watch on the
performance of those sectors/industries and must exit at an appropriate time. They
may also seek advice of an expert.

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 Advantages of Mutual Funds
The advantages of investing in a Mutual Fund are:

 Diversification

The best mutual funds design their portfolios so individual investments will react
differently to the same economic conditions. For example, economic conditions
like a rise in interest rates may cause certain securities in a diversified portfolio to
decrease in value. Other securities in the portfolio will respond to the same
economic conditions by increasing in value. When a portfolio is balanced in this
way, the value of the overall portfolio should gradually increase over time, even if
some securities lose value.

 Professional Management
Most mutual funds pay topflight professionals to manage their investments.
These managers decide what securities the fund will buy and sell.

 Regulatory oversight
Mutual funds are subject to many government regulations that protect investors
from fraud.

 Liquidity
It's easy to get your money out of a mutual fund. Write a check, make a call, and
you1ve got the cash.

 Convenience

You can usually buy mutual fund shares by mail, phone; or over the Internet.

 Low Cost
Mutual fund expenses are often no more than 15 percent of your investment.
Expenses for Index Funds are less than that, because index funds are not actively
managed. Instead, they automatically buy stock in companies that are listed on a
specific index.

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 Drawbacks of Mutual Funds

Mutual funds have their drawbacks and may not be for everyone:

 No Guarantees
No investment is risk free. If the entire stock market declines in value, the value
of mutual fund shares will go down as well, no matter how balanced the
portfolio. Investors encounter fewer risks when they invest in mutual funds than
when they buy and sell stocks on their own. However, anyone who invests
through a mutual fund runs the risk of losing money.

 Fees and commissions

All funds charge administrative fees to cover their day-to-day expenses. Some
funds also charge sales commissions or "loads" to compensate brokers, financial
consultants, or financial planners. Even if you don't use a broker or other
financial adviser, you will pay a sales commission if you buy shares in a Load
Fund.

 Management risk
When you invest in a mutual fund, you depend on the fund's manager to make
the right decisions regarding the fund's portfolio. If the manager does not
perform as well as you had hoped, you might not make as much money on your
investment as you expected. Of course, if you invest in Index Funds, you forego
management risk, because these funds do not employ managers. Pan cards and
mutual funds to go hand in hand

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 What is NAV?

A mutual fund is a common investment vehicle where the assets of the fund belong
directly to the investors. Investors subscriptions are accounted for/by the fund not as
liabilities or deposits but as Unit capital. On the other hand, the investments made on
the behalf of the investors are reflected on the assets side and are the main
constituents of the balance sheet. The funds Net Assets are therefore defined as the
“assets minus liabilities”. As there are many investors in a fund, it is common practice
for mutual funds to compute the share of each investor on the basis of the value of Net
Assets per share / unit, commonly known as the Net Asset Value (NAV).

Calculation of NAV according to SEBI:

NAV=Net Assets of the scheme/Number of units Outstanding i.e

NAV=Market Value of investments + Receivables + other Accrued Income +Other

Assets –Accrued Expenses- Other payables –Other Liabilities / No. of Units
Outstanding as at the NAV date.

How to know the performance of a mutual fund scheme?

The performance of a scheme is reflected in its net asset value (NAV) which is
disclosed on daily basis in newspapers and websites of mutual funds.
The mutual funds are also required to publish their performance in the form of half
yearly results which also include their returns/yields over a period of time i.e. last six
months, 1 year, 3years, 5years and since inception of the scheme.
Apart from these, many research agencies also publish research reports on
performance of mutual funds including the ranking of various schemes in terms of
their performance.

Investors should study these reports and keep themselves informed about the
performance of various schemes of different mutual funds. They can also compare the

25
performance of equity oriented schemes with the benchmarks like BSE Index, S&P
CNX Nifty, etc. on the basis of performance of the mutual funds, the investors should
decide when to enter or exit from a mutual fund scheme.

LOAD OR NO LOAD FUND

A load fund is one that charges a percentage of NAV for entry or exit. That is, each
time one buys or sells units in the fund, a charge will be payable. This charge is used
by the mutual fund for marketing and distribution expenses. Suppose the NAV per
ynit is Rs.10. if the entry as well as exit load charged is 1%, then the investors who
buy would be required to pay Rs.10.10 and those who offer their units for repurchase
to the mutual fund ill get only Rs.9.90 per unit. The investor should take the loads
into consideration while making investment as these affect their yields/returns.
However, the investor should also consider the performance track record and service
standards of the mutual fund which are more important. Efficient funds may give
higher returns in spite of loads.

A no-load fund is one that does not charge for entry or exit. It means the investors can
enter the fund/scheme at NAV and no additional charges are payable on purchase or
sale of units.

How to invest in a scheme of mutual fund?

Mutual funds normally come out with an advertisement in newspapers publishing the
date of launch of the new schemes. Investors can also contact the agents and
distributors of mutual funds who are spread all over the country for necessary
information and application forms. Forms can be deposited with mutual funds through
the agents and

distributors who provide such services.

26
Investors should not be carried away by commission or gifts given by agents or
distributors for investing in a particular scheme. On the other hand they must consider
the track record of mutual fund and shouldbtake right decisions.

How is a mutual fund set up?

A mutual fund is set up in the form of a trust, which has sponsor, trustees, Asset
management Company and custodian. The trust is established by a sponsor or more
than one sponsor who is like promoter of a company. The trustees of the mutual fund
hold its property for the benefit of the unit holders. Asset management Company
approved by SEBI manages the funds by making investments in various types of
securities. Custodian, who is registered with SEBI, holds the securities of various
schemes of the funds in its custody. The trustees are vested with the general power of
superintendence and direction over AMC. They monitor the performance and
compliance of SEBI regulations by the mutual funds.

27
 Future of Mutual Funds in India

By December 2015, Indian mutual fund industry reached Rs 1, 50,537 crore. It is

estimated that by 2015 March-end, the total assets of all scheduled commercial
banks should be Rs 40, 90,000 crore.

The annual composite rate of growth is expected 13.4% during the rest of the
decade. In the last 5 years we have seen annual growth rate of 9%. According to
the current growth rate, by year 2015, mutual fund assets will be double.

Let us discuss with the following table:

Aggregate deposits of Scheduled Com Banks in India(Rs. Crore)

Month/Year Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar- Sep- Dec-15
15 15
Deposits 605410 851593 989141 1131188 1280853 - 1567251 1622579
Change in - 15 14 13 12 - 18 3
% over last
Year
Source-RBI

Mutual Fund AUM’s Growth

Month/Year Mar- Mar- Mar- Mar- Mar- Mar-15 Sep- Dec-15
10 11 12 13 14 15
MF AUM’s 68984 93717 83131 94017 75306 137626 151141 149300
Change in - 26 13 12 25 45 9 1
% over last
Year

28
 Some facts for the growth of mutual funds in India

 100% growth in the last 6 years.

 Number of foreign AMC's is in the queue to enter the Indian markets like
Fidelity Investments, US based, with over US$1trillion assets under
management worldwide.

 Our saving rate is over 23%, highest in the world. Only channelizing these
savings in mutual funds sector is required.

 We have approximately 29 mutual funds which are much less than US

having more than 800. There is a big scope for expansion.

 “B” and “C” class cities are growing rapidly. Today most of the mutual
funds are concentrating on the”A”class cities. Soon they will find scope in
the growing cities.

 Mutual fund can penetrate rural like the Indian insurance industry with
simple and limited products.
 SEBI allowing the MF’s to launch commodity mutual funds .

 Emphasis on better corporate governance.

 Trying to curb the late trading practices.

29
Pan cards and mutual funds to go hand in hand

The pan card and the NFO application go together now with fund houses selling them
together.

This month, SEBI made a pan card, or application proof, mandatory for mutual fund
investments.

Since then, retail investments have fallen 40-50 per cent. Fund houses like Reliance,
SBI, JM Financial and others, have begun to provide customers with pan card
application forms along with mutual fund forms.

They have also tied up with HDFC, UTI Securities and Bajaj Capital to speed up the
process.

“The AMCs have taken the initiative to partner with us to facilitate many investors to
come to our branches wherever they are facing a query of pan card. We offer them the
entire service of filling up the applications, providing the form 49 A, the appropriate
ticket which is to be filed with the form and depositing with the concerned authority
for processing,” said Senior Vice President, Bajaj Capital, Surajit Mishra.

Reliance, HDFC, SBI, ICICI Prudential, assisting investors, Reliance Mutual Funds,
India's largest fund house, had retail investments fall by half since July 2 when SEBI
issued the ruling.

It's now hiring photographers and pan card agents at no cost to the customer.

Fund houses like SBI, ICICI Prudential and HDFC have also started educating
customers on the importance of the pan card.

Meanwhile, JM Financial, which launched JM contra fund on Monday, is also helping

customers to acquire pan cards.

“We are tying up with intermediaries or companies, which are allowed to either,
facilitate or allot pan. To a great extent for this NFO we will even fund it because the
cost of applying for pan is Rs 73-74,” said Head of Sales and Marketing, JM Financial
AMC, Bhanu Katoch.

Even as fund houses set up shops for pan cards, fund houses see high expenditure on
the cards hurting their expansion plans.

30
TAX BENEFITS OF MUTUAL FUNDS:

1) 100% Income Tax exemption on all Mutual Fund dividends

2) Capital Gains Tax to be lower of -

10% on the capital gains without factoring indexation benefit and
20% on the capital gains after factoring indexation benefit.

3) Open-end funds with equity exposure of more than 50% are exempt from the
payment of dividend tax for a period of 3 years from 2014-2015.

31
32
 Over View

HDFC is a premier; integrated Financial Services Organization ranked amongst the

top five in the country in all its business segments, over 18 million individual
investors in various capacities and provides services at over 400 corporate.

In 1982, a group of Hyderabad-based practicing Chartered Accountants started HDFC

Consultants Limited with a capital of Rs.l,50,000 offering auditing and taxation
services initially. Later, it forayed into the Registrar and Share Transfer activities and
subsequently into financial services. All along, HDFC's strong work ethic and
professional background leveraged with Information Technology enabled it to deliver
quality to the individual

A decade of commitment, professional integrity and vision helped HDFC achieve a

leadership position in its field when it handled the largest number of issues ever
handled in the history of the Indian stock market in a year. Thereafter, HDFC made
inroads into a host of capital-market services, - corporate and retail-, which proved to
be a sound business synergy.

Today, HDFC has access to millions of Indian shareholders besides, companies,

banks, financial institutions and regulatory agencies. Over the past one and half
decades, HDFC has evolved as a veritable link between industry, finance and people.
In January 1998, HDFC became the first Depository Participant in Andhra Pradesh.
An ISO 9001-9002 company, HDFC's commitment to quality and retail reach has
made it an integrated financial services company.

33
HDFC offers all financial products under one roof:

Depository Services

On-line facilities related to depository services (NSDL & CDSL) including Demat
Account opening, Dematerialisation of physical shares, DIS execution, holding /
transaction statement, Pledge, Demat etc are available at a very attractive tariff.

34
Stock Broking
You can avail online trading facility (on our terminals) for all segments, be it NSE-
CASH, NSE- Derivatives (F&O), BSE and Retail Debt Market (RDM), at all our
branches. We offer services that are beyond just a medium for buying and selling
stocks and shares. Instead we provide services, which are multidimensional and
multi- focused in their scope. There, are several advantages in utilizing our Stock
Broking services, which are the reasons why we are one of the best & the largest in
the country. We also offer Web-trading.

35
Distribution

You have access to every financial/investment product available in the market, at our
offices viz. Mutual Funds, Public issues / Book-building offers, Fixed Deposits, RBI /
Capital Gains & Tax Saving Bonds etc.

Commodities Broking

We are offering, through MCX & NCDEX, spectacular growth Opportunities and
advantages to large cross-section of market participants including Producers /
Processors, Traders, Corporate, Regional Trading Centers, Importers, Exporters,
Cooperatives, Investors, Industry Associations to trade in various commodities, be it
Bullion, Food-grains, Oils, other agricultural products, etc.

Home Loans

Do you have an existing home loan at a high interest rate? Do you require a new
home loan? We are here to serve you. And provide the best deal on Home loans. We
can also help you in getting the best deal in getting the home of your dreams.

36
TIN Facilitation Centre

We are authorized by NSDL to accept and process your application for PAN Card /
TAN number and for filing of e-TDS returns.

Advisory Services

At HDFC, we provide Research based Financial Advisory Services to our clients to

suit their investment needs / requirements. We have a strong financial and technical
backing of PCG group of Hong Kong. We also have a highly qualified and
professional team. At HDFC, we believe in “Customer Delight” rather than Customer
Satisfaction.

37
 HDFC- Early Days

The birth of HDFC was on a modest scale in 1981. It began with the vision and
enterprise of a small group of practicing Chartered Accountants who founded the
flagship company …HDFC Consultants Limited. We started with consulting and
financial accounting automation, and carved inroads into the field of registry and
share accounting by 1985. Since then, we have utilized our experience and superlative
expertise to go from strength to strength…to better our services, to provide new ones,
to innovate, diversify and in the process, evolved HDFC as one of India’s premier
integrated financial service enterprise.

Thus over the last 20 years HDFC has traveled the success route, towards building a
reputation as an integrated financial services provider, offering a wide spectrum of
services. And we have made this journey by taking the route of quality service, path
breaking innovations in service, versatility in service and finally…totality in service.
Our highly qualified manpower, cutting-edge technology, comprehensive
infrastructure and total customer-focus has secured for us the position of an emerging
financial services giant enjoying the confidence and support of an enviable clientele
across diverse fields in the financial world.

Our values and vision of attaining total competence in our servicing has served as the
building block for creating a great financial enterprise, which stands solid on our
fortresses of financial strength - our various companies.

With the experience of years of holistic financial servicing behind us and years of
complete expertise in the industry to look forward to, we have now emerged as a
premier integrated financial services provider.

And today, we can look with pride at the fruits of our mastery and experience –
comprehensive financial services that are competently segregated to service and
manage a diverse range of customer requirements.

38
The HDFC Credo

Our Clients. Our Focus

Clients are the reason for our being.

Personalized service, professional care; pro-activeness are the values that help us nurture enduring
relationships with our clients.

Respect for the individual

Each and every individual is an essential building block of our organization.

We are the kiln that hones individuals to perfection. Be they our employees, shareholders or investors.
We do so by upholding their dignity & pride, inculcating trust and achieving a sensitive balance of their
professional and personal lives.

Teamwork
None of us is more important than all of us.

Each team member is the face of HDFC. Together we offer diverse services with speed, accuracy and
quality to deliver only one product: excellence. Transparency, co-operation, invaluable individual
contributions for a collective goal, and respecting individual uniqueness within a corporate whole, is how
we deliver again and again.

Responsible Citizenship
A social balance sheet is as rewarding as a business one.

As a responsible corporate citizen, our duty is to foster a better environment in the society where we live
and work. Abiding by its norms, and behaving responsibly towards the environment, are some of our
growing initiatives towards realizing it.

Integrity
Everything else is secondary.

Professional and personal ethics are our bedrock. We take pride in an environment that encourages
honesty and the opportunity to learn from failures than camouflage them. We insist on consistency
between works and actions.

39
MILESTONES

40
WORKING NETWORK OF HDFC

As the flagship company of the HDFC Group, HDFC Consultants Limited has always
remained at the helm of organizational affairs, pioneering business policies, work
ethic and channels of progress.

Having emerged as a leader in the registry business, the first of the businesses that we
ventured into, we have now transferred this business into a joint venture with
Computershare Limited of Australia, the world’s largest registrar. With the advent of
depositories in the Indian capital market and the relationships that we have created in
the registry business, we believe that we were best positioned to venture into this
activity as a Depository Participant. We were one of the early entrants registered as
Depository Participant with NSDL (National Securities Depository Limited), the first
Depository in the country and then with CDSL (Central Depository Services Limited).
Today, we service over 6 lakhs customer accounts in this business spread across over
250 cities/towns in India and are ranked amongst the largest Depository Participants
in the country. With a growing secondary market presence, we have transferred this
business to HDFC Stock Broking Limited (KSBL), our associate and a member of
NSE, BSE and HSE.

41
Member - National Stock Exchange (NSE), The Bombay Stock Exchange (BSE), and
The Hyderabad Stock Exchange (HSE).

HDFC Stock Broking Limited, one of the cornerstones of the HDFC edifice, flows
freely towards attaining diverse goals of the customer through varied services.
Creating a plethora of opportunities for the customer by opening up investment vistas
backed by research-based advisory services. Here, growth knows no limits and
success recognizes no boundaries. Helping the customer create waves in his portfolio
and empowering the investor completely is the ultimate goal.

Distribution of Financial Products

The paradigm shift from pure selling to knowledge based selling drives the business
today. With our wide portfolio offerings, we occupy all segments in the retail
financial services industry.

A 1600 team of highly qualified and dedicated professionals drawn from the best of
academic and professional backgrounds are committed to maintaining high levels of
client service delivery. This has propelled us to a position among the top distributors
for equity and debt issues with an estimated market share of 15% in terms of
applications mobilized, besides being established as the leading procurer in all public
issues.

To further tap the immense growth potential in the capital markets we enhanced the
scope of our retail brand, HDFC – the Finapolis , thereby providing planning and
advisory services to the mass affluent. Here we understand the customer needs and
lifestyle in the context of present earnings and provide adequate advisory services that
will necessarily help in creating wealth. Judicious planning that is customized to meet
the future needs of the customer deliver a service that is exemplary. The market-savvy
and the ignorant investors, both find this service very satisfactory. The edge that we

42
have over competition is our portfolio of offerings and our professional expertise. The
investment planning for each customer is done with an unbiased attitude so that the
service is truly customized.

Our monthly magazine, Finapolis, provides up-dated market information on market

trends, investment options, opinions etc. Thus empowering the investor to base every
financial move on rational thought and prudent analysis and embark on the path to
wealth creation.

Advisory Services
Under our retail brand ‘HDFC – the Finapolis', we deliver advisory services to a
cross-section of customers. The service is backed by a team of dedicated and expert
professionals with varied experience and background in handling investment
portfolios. They are continually engaged in designing the right investment portfolio
for each customer according to individual needs and budget considerations with a
comprehensive support system that focuses on trading customers' portfolios and
providing valuable inputs, monitoring and managing the portfolio through varied
technological initiatives. This is made possible by the expertise we have gained in the
business over the years. Another venture towards being investor-friendly is the
circulation of a monthly magazine called ‘HDFC - the Finapolis'. Covering the latest
of market news, trends, investment schemes and research-based opinions from experts
in various financial fields.

43
HDFC INVESTOR SERVICES LIMITED

Merchant Banking

Recognized as a leading merchant banker in the country, we are registered with SEBI
as a Category I merchant banker. This reputation was built by capitalizing on
opportunities in corporate consolidations, mergers and acquisitions and corporate
restructuring, which have earned us the reputation of a merchant banker. Raising
resources for corporate or Government Undertaking successfully over the past two
decades have given us the confidence to renew our focus in this sector.

Our quality professional team and our work-oriented dedication have propelled us to
offer value-added corporate financial services and act as a professional navigator for
long term growth of our clients, who include leading corporates, State Governments,
foreign institutional investors, public and private sector companies and banks, in
Indian and global markets.

We have also emerged as a trailblazer in the arena of relationships, both at the

customer and trade levels because of our unshakable integrity, seamless service and
innovative solutions that are tuned to meet varied needs. Our team of committed
industry specialists, having extensive experience in capital markets, further nurtures
this relationship.

Our financial advice and assistance in restructuring, divestitures, acquisitions, de-

mergers, spin-offs, joint ventures, privatization and takeover defense mechanisms
have elevated our relationship with the client to based on unshakable trust and
confidence.

44
 OBJECTIVE

1) To know a basic knowledge of the various mutual fund.

2) To study the type of mutual fund present in india .

3) To analysis how can mutual fund increase the earning of the

investors .

4) To suggest based op0tions for the investors .

45
 RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem. In the

research methodology we study the various steps that are generally adopted by a
researcher in studying his research problem along with the logic behind them.

Nature Of the Study:

The study is exploratory in nature. The primary aim of this study is to know about the
concept of mutual funds, an analysis of the investors toward different avenues and to
throw some light on the performance of mutual funds under different schemes.

DATA SOURCES:

PRIMARY DATA: To be collected by conducting a survey of the sample size

mentioned below as well as that of the existing clients.

SECONDARY DATA: To be collected from the prospectus and various websites, the
list of which is given in the succeeding pages. The companies database has also been
used for collecting references about the existing clients.

Study has been conducted in the following manner:

Sampling method : Judgement Sampling

Sample Size : 200
Sample Unit : Service class& Businessman
Geographical Location : Delhi

46
LIMITATIONS OF THE PROJECT:

1. The study is limited to the city limits of Dehradun only.

2. The study is time bound for a period of two months only.
3. The limited amount of outlay for the project is also a major constraint.
4. Manpower constraint in the sense that I will be the sole person working
on the project may also be deemed as a constraint.

47
 DATA ANALYSIS
1. Occupation

11%
salaried
45%
retired
self employed
33%
professional
11%

45% people are salaried employees, 11% people are retired, 33% people are self-
employed and 11% are professional.

48
2. What is the main objective with which you make investment?

20%
40% Savings
Return
Safety
15%
Tax benefit
25%

40% people had the objective of savings, 25% of returns, 15% of safety and 20% had
the objective of availing tax benefits

49
3. Where would you like to invest?

20%
40% Mutual fund
Real estate
Insurance
Share market
30%
10%

Findings reveal that 40% people would like to invest in mutual fund,10% in real
estate, 30% in insurance and 20% in share market.

50
4. Are you aware of mutual fund?

35%

Yes
No

65%

65% people were aware of mutual fund and 35% were not aware

51
5. Have you invested in mutual fund?

25%

Yes
No

75%

75% people had invested in mutual fund while 25% had not invested in mutual fund.

52
6. In which fund would you like to invest?

20%

Equity fund
Debt fund
15% Balanced fund
65%

65% people showed interest in Equity fund, 15% in Debt fund, 20% in Balanced fund

53
7. In which scheme would you like to invest?

10%
Blue chip fund
45%
Sectoral fund
30% Tax gain fund
Debt fund
15%

45% people showed interest in blue chip fund, 15% in sectoral fund, 30% in tax gain
fund and 10% in debt fund.

54
8. How would you rate the importance of Entry and Exit load as a factor while
Investing in Mutual Funds?

15%

Very important
Important
25% 60% Not important

Answering to this question, most (60%) of the respondents said that it is a very
important factor, while 25% respondents said that it is an important factor and 15%
did not considered it as an important factor.

55
9. Have you ever availed the services of HDFC?

45%
Yes
No
55%

55% people were aware of HDFC while 45% were not aware.

56
10. Are you satisfied by the services provided by the HDFC?

25%

Yes
No

75%

75% of the respondents were found to be satisfied by the services provided by HDFC
while 25% were unsatisfied.

57
 FINDINGS
 45% people are salaried employees, 11% people are retired, 33% people are
self-employed and 11% are professional.
 40% people had the objective of savings, 25% of returns, 15% of safety and
20% had the objective of availing tax benefits
 Findings reveal that 40% people would like to invest in mutual fund,10% in
real estate, 30% in insurance and 20% in share market.
 65% people were aware of mutual fund and 35% were not aware
 75% people had invested in mutual fund while 25% had not invested in mutual
fund.
 65% people showed interest in Equity fund, 15% in Debt fund, 20% in
Balanced fund.
 45% people showed interest in blue chip fund, 15% in sectoral fund, 30% in
tax gain fund and 10% in debt fund.
 Answering to this question, most (60%) of the respondents said that it is a very
important factor, while 25% respondents said that it is an important factor and
15% did not considered it as an important factor.
 55% people were aware of HDFC while 45% were not aware.
 75% of the respondents were found to be satisfied by the services provided by
HDFC while 25% were unsatisfied.

58
 SUGGESTIONS

 Increasing Awareness about Mutual Funds

The organization should lay emphasis towards increasing knowledge about

Mutual Funds among people by adopting appropriate measures and actions.
 Better services

HDFC should make efforts to provide better and improved services to the
investors. Any information regarding changes in Mutual Fund investment
should be properly and promptly communicated to the investors.
 Promotional Activities

HDFC should undertake planned promotional program on a wide scale to

reach
the potential investor and to induce them to invest in Mutual Fund. It would
help the organization in attracting more investments.

 Investor friendly environment

HDFC should create an investor friendly environment in its various branches.

It should help the investors in selecting the right type of scheme which would
suit their need and pocket.

 Ensuring attractive return through continuous search for low risk and
better investment avenues

The organization should ensure attractive return to its investors through

continuous search for low risk and better investment avenues.

Company should be able to build the investor’s faith by identifying their investment
needs and serving them accordingly

59
Comparison of various financial investment avenues

There are various investment avenues available in the market which have different
risk and return parameters. Every investor has his own objective accordingly to which
he makes the investment. The investment options can be broadly compared on the
following aspects:

Instruments Risk Returns Liquidity Taxation Safety

Equity High High High No LTCG Low

Financial institution High Moderate Low Taxable Moderate

bonds
Bank deposits Low Low Low Taxable High

PPF Low Moderate Low Tax free High

NSC Low Moderate Low Tax free High

KVP Low Moderate Low Tax free High

Mutual funds Low High High No tax High

60
Analysis :

The table clearly shows that the mutual funds have more benefits of investments as
compared to other instruments in all the five parameters which are considered ideal
for making any investments. Risk which is the prime concern before making any
investment is low and the returns which are the prime motive for investments are
high, at the same time there is no taxation and liquidity which means when the
investors wants he can have his money back is also there and there is safety of
capital which is also a prime concern as all the mutual funds are SEBI registered and
under its direct control.

61
 Comparison of returns given by various financial
instruments:

Returns is the prime factor that motivates any investor to make the investments.
Ultimate objective of any investment is to generate high returns for the future so that
better standard of living can be attained. In today’s world where modernization has
changed the life style of people and standard of living has also gone up very sharply,
there is need for those instruments which generate higher returns with low risk.

Instruments Returns (%)approximate

And annualized
Financial institutions bonds 5.5%

Corporate debentures 6%

Bank deposits 8% to 9%

PPF 8%

NSC 8%

KVP 8%

Equity No assured returns

Mutual funds No assured returns

62
 TOP PERFORMING FUNDS CLASSIFIED ON THE BASIS OF
THE NATURE OF THE SCHEME

Top Funds ranked on the basis of performance as on Aug 24,2015

(On 365 days)

Debt funds

Performance in %
Scheme Name 365 Days 182-days Inception Date
Templeton India Children Asset 25.0953 7.7836 14.3465 Aug 24,
Gift Plan - Growth 2015
Templeton India Children Asset 25.0953 7.7836 14.3465 Aug 24,
Gift Plan - Dividend 2015
Sundaram BNP Paribas FRF - 25.0285 3.2179 12.2772 Aug 24,
LTIP - Growth 2015
LIC MF Unit Linked Insurance 22.1615 12.8412 9.6179 Aug 24,
scheme 2015
LIC Childrens Fund 13.6067 4.7071 8.3094 Aug 24,
2015

BALANCED FUNDS

Performance in %
Scheme Name 365 Days 182-days Inception Date
PRINCIPAL Child Benefit - Career
45.7331 12.7282 21.2937 Aug 24, 2015
Builder Plan
PRINCIPAL Child Benefit - Future
45.6887 12.7202 21.126 Aug 24, 2015
Guard Plan
JM Balanced - Dividend 33.1821 16.2639 10.2291 Aug 24, 2015

JM Balanced - Growth 33.1545 16.2534 12.2806 Aug 24, 2015

Birla SunLife 95 - Growth 33.056 12.3482 26.9729 Aug 24, 2015

TOP EQUITY DIVERSIFIED FUNDS

63
 Performance in %
182-
Scheme Name 365 Days Inception Date
days
Standard Chartered Premier Equity Fund - Aug 24,
52.4522 21.32 29.4873
Dividend 2015
Standard Chartered Premier Equity Fund - Aug 24,
52.4522 21.32 29.4873
Growth 2015
ICICI Prudential Service Industries Fund - Aug 24,
49.5014 5.9088 33.4909
Growth 2015
ICICI Prudential Service Industries Fund - Aug 24,
49.4704 5.8869 33.257
Dividend 2015
Aug 24,
Taurus Starshare 47.2538 19.0962 17.9507
2015

TOP SECTOR FUNDS

Performance in
%
182-
Scheme Name 365 Days Inception Date
days
Aug24,
Reliance Diversified Power Fund - Bonus 70.3922 30.825 59.1653
2015
Aug24,
Reliance Diversified Power Fund - Growth 70.3922 30.825 59.1653
2015
Reliance Diversified Power Fund - Aug24,
70.3802 30.817 54.1178
Dividend 2015
Aug24,
JM Basic Fund - Dividend 65.0501 32.9974 9.6555
2015
Aug24,
JM Basic Fund - Growth 65.0501 32.9974 18.7786
2015

Returns generated by Mutual Funds

The returns generated by the various categories of mutual funds have exceeded the
returns given by other instruments. The mutual funds do not assure any return on
investment but over the years mutual funds have given returns more than any other

64
instrument. Direct investing in equity and investing through the mutual funds have
always competed with each other. Direct investing involves lot of risk while investing
through the mutual funds reduces the risk as there is benefit of diversification.

CONCLUSION

Mutual Funds as an investment avenue have emerged as one of the fascinating

investment instrument. The investors have the benefit of low risk, high returns,

65
liquidity, no taxation and the professional expertise of the fund manager. Even the
investors have received more return than the market index especially in the bull run
which helps those investors who do not have the required expertise to decide which
stock to go for. The returns given by the various mutual funds over a period of say
three years has been very high.

Thus, as an investment avenue mutual funds are very much suited for those investors
who want higher returns with low risk and who do not want to have direct exposure to
the stock market.

RECOMMENDATION

There should be comprehensive legislation to control the operation of the mutual

funds including the UTI. At present, mutual funds are subject to guidelines laid

66
down by the RBI, govt. of India and the SEBI. Further the guidelines governing
the UTI are not same. It is therefore necessary that the govt. should come out
with single set of comprehensive legislation which will uniformly be applicable
to public sector and private sector mutual funds and the UTI.

So far mutual funds in India confide themselves to urban areas; leaving

vast saving potentials in rural hinterlands. By penetrating in rural areas
and introducing saving schemes tailored to the diverse preference of rural
community and by education them about the benefits of the schemes,
mutual fund can raise burgeoning resources which can be gainful
employed for the national development.

Investors’ confidence in mutual fund can be restored by rendering their

operation more transparent and providing better service.

While it is fine to advertise good performance of a particular schemes by a

fund in order to attract more investment the times are fast approaching
when an honest view based approach would compel a mutual fund to
advice investor on "sell" or "switch" between schemes as emphatically as
it would advise on the purchase .so {as to attract investor, it is therefore,
advisable to mutual fund to offer this sort of counseling which will
certainly make a mutual fund different from other institutions.

BIBLIOGRAPHY

BOOKS:

67
  KOTHARI C.R., Research Methodology
 Information Memorandum & Fact sheets of Mutual Funds
 Security analysis and portfolio management, by P.Pandian

WEBSITES;

 www.amfiindia.com
 www.google.com
 www.mutalfundsindia.com

MAGAZINES:

 Business World
 Dalal Street
 The Economic Times

Questionnaire

Name of the customer/investor ________________________

68
Address ________________________
City ________________________
Telephone No ________________________

1. Occupation:
a) Salaried
b) Retired
c) Self-employed
d) Professional

2. What is the main objective with which you make investment?

a) Savings
b) Return
c) Safety
d) Tax benefit

3. Where would you like to invest?

a) Mutual fund
b) Real estate
c) Insurance
d) Share market

4. Are you aware of mutual fund?

a) Yes
b) No
5. Have you invested in mutual fund?
a) Yes
b) No
6. In which fund would you like to invest?
a) Equity Fund
b) Debt Fund

69
 c) Balanced Fund(debt + equity)

7. In which scheme would you like to invest?

a) Blue chip fund
b) Sectoral fund
c) Tax gain fund
d) Debt fund

8. How would you rate the importance of Entry and Exit load as a factor while
Investing in Mutual Funds?
a) Very Important
b) Important
c) Somewhat Important
d) Not Important

9. Have you ever availed the services of HDFC?

b) Yes
c) No

10. Are you satisfied by the services provided by the HDFC?

a) Yes
b) No. If No, give suggestions for improvement, if any

70