HDFC Mutual Fund

A
Project Study Report
ON
“Detail Study of HDFC Mutual Fund “
Submitted in partial fulfilfilment for the Award of degree of
Master of Business Administration
Submitted By:- Submitted To:
Amit Daga
MBA 2ed year Asstt. Prof.
GOVERNMENT ENGINEERING COLLEGE JHALAWAR

DECLARATION
I do hereby declare that the project entitled “DETAIL STUDY OF HDFC- MUTUAL
FUND” submitted as a part of the requirement for the partial fulfillment of Master of Business
Administration at GOVT. ENGG. COLLEGE, JHALAWAR is an original piece of work done by
me under the guidance of
• Mr Himanshu Vyas
• Mr Dheeraj
At HDFC Mutual Fund ,KOTA has not been submitted for award of any degree else where in
part or full.
CERTIFICATE OF THE GUIDE
Acknowledgement
I express my sincere thanks to my project guide, Mr. Himanshu Vyas Designation,

Deptt. Finance, for guiding me right form the inception till the successful completion of
the project. I sincerely acknowledge her for extending their valuable guidance, support
for literature, critical reviews of project and the report and above all the moral support
he had provided to me with all stages of this project.
I would also like to thank the supporting staff Finance & H.R. Deportment, for their
help and cooperation throughout out project.
CHAPTER TOPIC PAGE
NO
1 INTRODUCTION 6
1. MUTUAL FUND SETUP
2. NAV
3. SCOPE
4. BENEFITS OF MUTUAL FUND
5. CAPITAL GAIN
6. INVESTMENT CRITERIA
2 OBJECTIVE OF THE STUDY 16
3 ABOUT HDFC MUTUAL FUND 18
1. WHY HDFC MUTUAL FUND
2. SPONSORS
3. TRUSTEE
4. AMC DIRECTORS
5. AWARDS
4 PRODUCT &SERVICE 23
1. TYPES OF MUTUAL FUND
2. INVESTMENT PLAN
3. PRODUCT OF MUTUAL FUND
5 PART OF MY SUMMER TRAINING 47
6 METHODOLOGY OF THE STUDY 50
1. RESEARCH METHODOLOGY
2. HYPOTHESIS SOURCES OF DATA COLLECTION
3. OF THE STUDY
4. DATA COLLECTION & ANALYSIS
7 QUESTIONARE 63
8 FINDING, RECOMMENDATION, 67
CONCLUSION
9 BIBLIOGRAPHY 72
CHAPTER 1 : INTRODUCTION
1. MUTUAL FUND SETUP
2. NAV
3. SCOPE
4. BENEFITS OF MUTUAL FUND
5. CAPITAL GAIN
6. INVESTMENT CRITERIA
INTRODUCTION
The financial market plays a crucial role in the in the economic development of a
country by facilitating the allocation of scarce resources. Financial markets
essentially involve the allocation of resources. This can be thought of as the brain
of the entire economic system, the locus of central decision-making; if they fail, not
only will the sectors profit be lower than would otherwise have been, but the
performance of the entire economic system may be impaired.
The efficiency of financial market how ever, depends on the existence of active and
efficient financial intermediaries in the system. Deposit taking institutional investor
is the important financial intermediaries involved in the task of allocating assets.
Structural changes in the financial market have induced a reverse trend in financial
intermediation, i.e. financial disintermediation, in which the central role of banking
is being taken over by investment institutions and institutional investors. The shift
from a credit-based system to a financial has initiated the process of
disintermediation, and capital market based factors like insurance, pension funds
and mutual funds are increasingly playing the central role.
The reforms have successfully dismantled the entry barriers, with the result that
today there are domestic and foreign financial institutions, like mutual funds,
broking firms and insurance companies, operating in the Indian market. The
introduction of capital adequacy norms, prudential regulation and world class
regulatory mechanisms to protect the interest of investor, besides the strict
requirement of disclosure, have given a boost to the confidence of domestic and
foreign investors. The Indian economy has slowly integrated itself with the global
economy and financial market.
What is a Mutual Fund?
Mutual fund is a mechanism for pooling the resources by issuing units to the investors and
investing funds in securities in accordance with objectives as disclosed in offer document.
Investments in securities are spread across a wide cross-section of industries and sectors and
thus the risk is reduced. Diversification reduces the risk because all stocks may not move in
the same direction in the same proportion at the same time. Mutual fund issues units to the
investors in accordance with quantum of money invested by them. Investors of mutual funds
are known as unit holders. The profits or losses are shared by the investors in proportion to
their investments. The mutual funds normally come out with a number of schemes with
different investment objectives which are launched from time to time.
A mutual fund is required to be registered with Securities and Exchange Board of India (SEBI)
which regulates securities markets before it can collect funds from the public.
1.1 - 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 (AMC) 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 (AMC) 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 fund in
its custody. The trustees are vested with the general power of superintendence and direction
over AMC. They monitor the performance and compliance of SEBI Regulations by the mutual
fund.
SEBI Regulations require that at least two thirds of the directors of trustee company or board
of trustees must be independent i.e. they should not be associated with the sponsors. Also,
50% of the directors of AMC must be independent. All mutual funds are required to be
registered with SEBI before they launch any scheme. However, Unit Trust of India (UTI) is not
registered with SEBI (as on January 15, 2002).
1.2 - What is Net Asset Value (NAV) of a scheme?
The performance of a particular scheme of a mutual fund is denoted by Net Asset Value
(NAV).
Mutual funds invest the money collected from the investors in securities markets. In simple
words, Net Asset Value is the market value of the securities held by the scheme. Since market
value of securities changes every day, NAV of a scheme also varies on day to day basis. The
NAV per unit is the market value of securities of a scheme divided by the total number of units
of the scheme on any particular date. For example, if the market value of securities of a mutual
fund scheme is Rs 200 lakhs and the mutual fund has issued 10 lakhs units of Rs. 10 each to
the investors, then the NAV per unit of the fund is Rs.20. NAV is required to be disclosed by
the mutual funds on a regular basis - daily or weekly - depending on the type of scheme.
1.3 - Scope for Development of Mutual Fund
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.
India has a burgeoning population of middle class now estimated around 300 million. A typical
Indian middle class family can have liquid savings ranging from Rs.2 to Rs.10 Lacs today.
Investments in Banks are liquid and safe, but with the falling rate of interest offered by Banks
on Deposits, it is no longer attractive. At best a part can be saved in bank deposits, but what is
the other sources of investment for the common man? Mutual Fund is the ready answer.
Viewed in this sense globally India is one of the best markets for Mutual Fund Business, so
also for Insurance business. This is the reason that foreign companies compete with one
another in setting up insurance and mutual fund business units in India. The sheer magnitude
of the population of educated white collar employees provides unlimited scope for
development of Mutual Fund Business in India.
1.4. - Benefits of Mutual Funds
There are numerous benefits of investing in mutual funds and one of the key reasons for its
phenomenal success in the developed markets like US and UK is the range of benefits they
offer, which are unmatched by most other investment avenues. We have explained the key
benefits in this section. The benefits have been broadly split into universal benefits, applicable
to all schemes, and benefits applicable specifically to open-ended schemes.
1. Professional Management
The investor avails of the services of experienced and skilled professionals who are
backed by a dedicated investment research team which analyses the performance and
prospects of companies and selects suitable investments to achieve the objectives of the
scheme.
2. Diversification
Mutual Funds invest in a number of companies across a broad cross-section of industries

and sectors. This diversification reduces the risk because seldom do all stocks decline at
the same time and in the same proportion. You achieve this diversification through a
Mutual Fund with far less money than you can do on your own.
3.
ConvenientAdministration
Investing n in a Mutual Fund reduces paperwork and helps you avoid many problems
such as bad deliveries, delayed payments and unnecessary follow up with brokers and
companies. Mutual Funds save your time and make investing easy and convenient.
4. Return Potential
Over a medium to long-term, Mutual Funds have the potential to provide a higher return
as they invest in a diversified basket of selected securities.
5. Low Costs
Mutual Funds are a relatively less expensive way to invest compared to directly investing
in the capital markets because the benefits of scale in brokerage, custodial and other fees
translate into lower costs for investors.
6. Liquidity
In open-ended schemes, you can get your money back promptly at net asset value
related prices from the Mutual Fund itself. With close-ended schemes, you can sell your
units on a stock exchange at the prevailing market price or avail of the facility of direct
repurchase at NAV related prices which some close-ended and interval schemes offer
you periodically.
7. Transparency
You get regular information on the value of your investment in addition to disclosure on
the specific investments made by your scheme, the proportion invested in each class of
assets and the fund manager's investment strategy and outlook.
8. Flexibility
Through features such as regular investment plans, regular withdrawal plans and
dividend reinvestment plans, you can systematically invest or withdraw funds according to
your needs and convenience.
9. Choice of Schemes
Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.
10. Well Regulated
All Mutual Funds are registered with SEBI and they function within the provisions of strict
regulations designed to protect the interests of investors. The operations of Mutual Funds
are regularly monitored by SEBI.
11. Understanding and Managing Risk
All investments whether in shares, debentures or deposits involve risk: share value may
go down depending upon the performance of the company, the industry, state of capital
market and the economy; generally, however longer the term, lesser the risk; companies
may default in payment of interest/principal on their deposits/bonds debentures; the rate
of interest on investment may fall short of the rate of inflation reducing the purchasing
power.
While risk cannot be eliminated, skillful management can minimize risk. Mutual fund helps
to reduce risk through diversification and professional management. The experience and
expertise of Mutual Fund managers in selecting fundamentally sound securities and
timing their purchases and sales help them to build a diversified portfolio that minimize
risk and maximizes returns.
12. Tax Benefits
The incomes under Mutual Funds are much more Tax efficient than any fixed income
security due to the following benefits:-
• Section 80L of the income Tax Act ,1961 enables tax free income up to rs 15000
and dividends from MF s are eligible for this benefit.
• When you invest for over a year, the tax payable on encashment is Long term
Capitals gains tax at 20%. Once also get an indexation benefit which has been
approximately 8% per year. This reduces the taxable income and thus decreases
the tax liability.
• There is also an opportunity to set off capital losses against gains from income
schemes.
• Full exemption from capital gains tax as it comes under Section 54EA/EB of the
income tax Act.
• One has to pay tax only when he encash units, but have to pay tax on the interest
earned on other debt instruments every year on an accrual basis, even though he
receives the interest later. This generates higher post tax returns compared to
other debt instruments.
Tax is just like a monster that frightens a number of individuals through out the
nation. There are just tow way to fight with this monater:
. Conceal/Depress Income
. Make tax efficient investments.
Perhaps the second option is far better than the first as it gives the peace of mind
together with a feeling that one is a responsible citizen of the nation. With increasing
amount of awareness that is taking birth in the minds of investors, mutual fund has
become cynosure of the eye of the several investors.
The taxes available are two kinds:
. To the mutual fund- as explained below in No 1
. To the Investor- as explained below in No 2
1. Mutual Fund Taxation
. Mutual fund is fully exempted from the tax under Section10 (23D) of the Income Tax
Act1961.
. It receives all income without deduction at source.
. Mutual funds do not have to pay tax on trading profit, short term capital gain,
dividend income, underwriting commission, placement fees, long term capital gains,
other income, etc.
2. Benefits to the Investors
There are number of benefits that the investor of a mutual fund avail.
These are discussed as follows:
.Resident Unit Holders- In case of an individual or Hindu Undivided Families

(HUF’s), income by way of dividends, if any from unit of schemes of the fund
together with other income on specified investment/deposit are except from tax
within the overall limit of Rs.15000/- specified under Section80L of the I.T. Act,1961.
Since dividends from shares no longer invite dividend tax and hence the whole limit
is available for mutual fund dividends.
. Tax deduction at source- as per Section196A of the Income Tax Act, 1961, no
deduction of tax at source is made from any income payable to the unit holders. This
implies that there is no tax deduction at source for redemption up to any limit.
As per Section194k of the I.T.Act 1961, deduction of tax at source is not made if the
dividend income from a mutual fund does not exceed Rs10000 per annum.
1.5 - Investment criteria
Lower cost
It is a lower cost of investment as compare to other mode of investment option in the market.
Here the investor can invest a minimum of Rs500 in the scheme of ELSS (Equity Link Saving
Scheme).
Less paper work
Here less paper work is require than other. The investor give his detail information like his/her
name,age,address,phone no., pan card no, nominee name and address(in case of minor) and
three full signature of the candided.
No cash Transactions
Investor need not require paying cash, instead of cash investor has to pay cheque or demand
draft. Which help to prevent misappropriation and also save the tax. Here the investor just
writes the product name of mutual fund and sign on it. It also saves the time.
No Age Bar
There is no age bar of investor here any age group can invest in mutual fund. In case of
minor(below 18 year) there is a nominee, so a child can invest through his guardian and a
person having age of 70 also invest in mutual fund ,which is not possible in other investments.
Service or any kind of income group
A service holder or any kind of income group or a student or unemployed people can invest in
mutual fund but the person is a rational human being having sound knowledge of investment
company.
CHAPTER 2
OBJECTIVE OF THE STUDY

OBJECTIVE OF THE STUDY
Indian financial system has been expiring the vast effect of globalization i.e. drastic
interest rate cut, political disturbances, security scam etc have scattered the common
investor’s perception in selecting various investment portfolio. Most of the security holders
have lost their confidence in newly come-up corporate sectors for investment. Looking to the
situation, it is quite encouraging to analyze how the HDFC Mutual Fund able to trap the
deposits by introducing various schemes and how it protects the interest of the investors.
The main study is based on the performance and analysis of various schemes with
reference to HDFC Mutual Fund that is a leading mutual fund industry in India.
The total performance analysis of financial instruments with reference to the HDFC
Mutual Fund has got objectives. This are as follows:-
• To know the performance of the different schemes.

• The comparative study of HDFC Mutual Fund with other mutual funds.
• To know the investment pattern of the investors in different schemes.
• The benefits made from the investment on the different schemes.
• To know the ranking of the HDFC Mutual Fund Schemes.
• To know the diversify portfolio of HDFC Mutual Fund.
• To know the service which HDFC Mutual Fund is providing to its investors
with compare to other mutual funds.
CHAPTER 3
ABOUT HDFC –MUTUAL FUND
1. WHY HDFC MUTUAL FUND

2. SPONSORS
3. TRUSTEE
4. AWARDS
3.1 - Why HDFC Mutual Fund?
HDFC Mutual Fund is one of the largest mutual funds and well-established fund house in the
country with consistent and above average fund performance across categories since its
incorporation on December 10, 1999. While our past experience does make us a veteran, but
when it comes to investments, we have never believed that the experience is enough.
Our Investment Philosophy
The single most important factor that drives HDFC Mutual Fund is its belief to give the investor
the chance to profitably invest in the financial market, without constantly worrying about the
market swings. To realize this belief, HDFC Mutual Fund has set up the infrastructure required
to conduct all the fundamental research and back it up with effective analysis. Our strong
emphasis on managing and controlling portfolio risk avoids chasing the latest “fads” and
trends.
We Offer
We believe, that, by giving the investor long-term benefits, we have to constantly review the
markets for new trends, to identify new growth sectors and share this knowledge with our
investors in the form of product offerings. We have come up with various products across
asset and risk categories to enable investors to invest in line with their investment objectives
and risk taking capacity. Besides, we also offer Portfolio Management Services.
Our Achievements
HDFC Asset Management Company (AMC) is the first AMC in India to have been assigned
the ‘CRISIL Fund House Level – 1’ rating. This is its highest Fund Governance and Process
Quality Rating which reflects the highest governance levels and fund management practices at
HDFC AMC It is the only fund house to have been assigned this rating for two years in
succession. Over the past, we have won a number of awards and accolades for our
performance
3.2 - SPONSORS
Housing Development Finance Corporation Limited (HDFC). HDFC was

incorporated in 1977 as the first specialized Mortgage Company in India. HDFC provides
financial assistance to individuals, corporate and developers for the purchase or construction
of residential housing. It also provides property related services (e.g. property identification,
sales services and valuation), training and consultancy. Of these activities, housing finance
remains the dominant activity. HDFC has a client base of around 12 lac borrowers, around 8
lac depositors, over 1.08 lac shareholders and 50,000 deposit agents, as at March 31, 2008.
HDFC has raised funds from international agencies such as the World Bank, IFC
(Washington), USAID, DEG, ADB and KfW, international syndicated loans, domestic term
loans from banks and insurance companies, bonds and deposits. HDFC has received the
highest rating for its bonds and deposits program for the thirteenth year in succession. HDFC
Standard Life Insurance Company Limited, promoted by HDFC was the first life insurance
company in the private sector to be granted a Certificate of Registration (on October 23, 2000)
by the Insurance Regulatory and Development Authority to transact life insurance business in
India.
Standard Life Investments Limited. The Standard Life Assurance Company was
established in 1825 and has considerable experience in global financial markets. The company
was present in the Indian life insurance market from 1847 to 1938 when agencies were set up
in Kolkata and Mumbai. The company re-entered the Indian market in 1995, when an
agreement was signed with HDFC to launch an insurance joint venture. On April 2006, the
Board of The Standard Life Assurance Company recommended that it should demutualise and
Standard Life plc float on the London Stock Exchange. At a Special General Meeting held in
May voting members overwhelmingly voted in favour of this. The Court of Session in Scotland
approved this in June and Standard Life plc floated on the London Stock Exchange on 10th
July 2006. Standard Life Investments is a leading asset management company, with
approximately US$ 267 billion as at March 31, 2008, of assets under management. The
company operates in the UK, Canada, Hong Kong, China, Korea, Ireland, Paris, Sydney and
the USA to ensure it is able to form a truly global investment view. In order to meet the
different needs and risk profiles of its clients, Standard Life Investments Limited manages a
diverse portfolio covering all of the major markets world-wide, which includes a range of private
and public equities, government and company bonds, property investments and various
derivative instruments
3.3 - TRUSTEE
HDFC Trustee Company Limited, a company incorporated under the Companies Act, 1956 is
the Trustee to HDFC Mutual Fund vide the Trust deed dated June 8, 2000, as amended from
time to time. HDFC Trustee Company Ltd is wholly owned subsidiary of HDFC
The Board of Directors of HDFC Trustee company Limited consists of the

following eminent persons.
Mr. Anil Kumar Hirjee
Mr. James Aird
Mr. Shishir K. Diwanji
Mr. Ranjan Sanghi
Mr. V. Srinivasa Rangan

3.4 - Awards & Accolades
CNBC - TV 18 - CRISIL Mutual Fund of the Year Awards 2008: (3 awards)
1. HDFC Prudence Fund was the only scheme that won the CNBC - TV 18 - CRISIL Mutual
Fund of the Year Award 2008 in the Most Consistent Balanced Fund under CRISIL ~
CPR for the calendar year 2007 (from amongst 3 schemes).
2. HDFC Cash Management Fund - Savings Plan was the only scheme that won the
CNBC - TV 18 - CRISIL Mutual Fund of the Year Award 2008 in the Most Consistent
Liquid Fund under CRISIL ~ CPR for the calendar year 2007 (from amongst 5
schemes).
3. HDFC Cash Management Fund - Savings Plan was the only scheme that won the
CNBC - TV 18 - CRISIL Mutual Fund of the Year Award 2008 in the Liquid Scheme –
Retail Category for the calendar year 2007 (from amongst 19 schemes).
ICRA Mutual Fund Awards 2008: (3 awards)
1. HDFC MF Monthly Income Plan-Long Term Plan- Ranked a Seven Star Fund and
has been awarded the Gold Award for "Best Performance" in the category of "Open
Ended Marginal Equity" for the three year period ending December 31, 2007 (from
amongst 27 schemes)
2. HDFC High Interest Fund - Short Term Plan - Ranked a Five Star Fund indicating
performance among the top 10% in the category of "Open Ended Debt - Short Term"
for one year period ending December 31, 2007 (from amongst 20 schemes).
3. HDFC Prudence Fund - Ranked a Five Star Fund indicating performance among the
top 10% in the category of "Open Ended Balanced" for the three year period ending
December 31, 2007 (from amongst 16 schemes).
Lipper Fund Awards 2008:
1. HDFC Equity Fund - Growth has been awarded the 'Best Fund over Ten Years' in
the 'Equity India Category' at the Lipper Fund Awards 2008 (form amongst 23
schemes). It was awarded the Best Fund over ten years in 2006 and 2007 as well. 2008
makes it three in a row
CHAPTER 4
PRODUCT & SERVICE OF HDFC MUTUAL FUND
1. TYPES OF MUTUAL FUND

2. INVESTMENT PLAN
3. PRODUCT OF MUTUAL FUND
4.1 - TYPES OF MUTUAL FUND SCHEME
(a) Open-ended Fund/ Scheme
An open-ended fund or scheme is one that is available for subscription and repurchase on a
continuous basis. These schemes do not have a fixed maturity period. Investors can
conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared on
a daily basis. The key feature of open-end schemes is liquidity.
(b)Close-ended Fund/ Scheme
A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is
open for subscription only during a specified period at the time of launch of the scheme.
Investors can invest in the scheme at the time of the initial public issue and thereafter they can
buy or sell the units of the scheme on the stock exchanges where the units are listed. In order
to provide an exit route to the investors, some close-ended funds give an option of selling back
the units to the mutual fund through periodic repurchase at NAV related prices. SEBI
Regulations stipulate that at least one of the two exit routes is provided to the investor i.e.
either repurchase facility or through listing on stock exchanges. These mutual funds schemes
disclose NAV generally on weekly basis.
(c)Sector specific funds/schemes
These are the funds/schemes which invest in the securities of only those sectors or industries
as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer
Goods (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.
(d)Tax Saving Schemes
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. e.g.
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.
4.2 - INVESTMENT PLAN
4.2.1 - SYSTEMATIC INVESTMENT PLAN (SIP)

HDFC MF SIP is similar to a Recurring Deposit. Every month on a specified date an amount
you choose is invested in a mutual fund scheme of your choice. The dates currently available
for SIPs are the 1st, 5th, 10th, 15th, 20th and the 25th of a month. You’ll be amazed to learn
about the many benefits of investing through HDFC MF SIP.
Benefit 1 : Become A Disciplined Invester

Being disciplined - It’s the key to investing success. With the HDFC MF Systematic Investment
Plan you commit an amount of your choice (minimum of Rs. 1000 and in multiples of Rs. 100
thereof*) to be invested every month in one of our schemes.
Think of each SIP payment as laying a brick. One by one, you’ll see them transform into a
building. You’ll see your investments accrue month after month. It’s as simple as giving at least
6 postdated monthly cheques to us for a fixed amount in a scheme of your choice. It’s the
perfect solution for irregular investors.
*Minimum amounts may differ for each Scheme. Please refer to SIP Enrolment Form for
details.
Benefit 2 : Reach Your Financial Goal
Imagine you want to buy a car a year from now, but you don’t know where the down-payment
will come from. HDFC MF SIP is a perfect tool for people who have a specific, future financial
requirement. By investing an amount of your choice every month, you can plan for and meet
financial goals, like funds for a child’s education, a marriage in the family or a comfortable
postretirement life. The table below illustrates how a little every month can go a long way.
Monthly Savings - What your savings may generate
Savings per month Total amount invested Rate of return

(for 15 years) (Rs. in Lacs) 6.0% 8.0% 10.0%
(rupees in lacs, 15 years later)*
5000 9.0 14.6 17.4 20.9
4000 7.2 11.7 13.9 16.7
3000 5.4 8.8 10.4 12.5
2000 3.6 5.8 7.0 8.3
1000 1.8 2.9 3.5 4.2
*Monthly instalments, compounded monthly, for a 15-year period.
Disclaimer: The illustration above is merely indicative in nature and should not be construed
as investment advice. It does not in any manner imply or suggest performance of any HDFC
Mutual Fund Scheme(s). Please read Risk Factors.
Benefit 3 : Take Advantage of Rupee Cost Averaging

Most investors want to buy stocks when the prices are low and sell them when prices are high.
But timing the market is timeconsuming and risky. A more successful investment strategy is to
adopt the method called Rupee Cost Averaging. To illustrate this we’ll compare investing the
identical amounts through a SIP and in one lump sum.
Imagine Suresh invests Rs. 1000 every month in an equity mutual fund scheme starting in
January. His friend, Rajesh, invests Rs. 12000 in one lump sum in the same scheme. The
following table illustrate how their respective investments would have performed from Jan to
Dec:
Suresh’s Investment Rajesh’s Investment
Month NAV Amount Units Amount Units
Jan-04 9.345 1000 107.0091 12000 1284.1091
Feb-04 9.399 1000 106.3943
Mar-04 8.123 1000 123.1072
Apr-04 8.750 1000 114.2857
May-04 8.012 1000 124.8128
Jun-04 8.925 1000 112.0448
Jul-04 9.102 1000 109.8660
Aug-04 8.310 1000 120.3369
Sep-04 7.568 1000 132.1353
Oct-04 6.462 1000 154.7509
Nov-04 6.931 1000 144.2793
Dec-04 7.600 1000 131.5789
*NAV as on the 10th every month. These are assumed NAVs in a volatile market
Disclaimer: The illustration above is merely indicative in nature and should not be construed
as investment advice. It does not in any manner imply or suggest performance of any HDFC
Mutual Fund Scheme(s). Rupee Cost Averaging neither ensures you profits nor protects you
from making a loss in declining markets. Please read Risk Factors.
As seen in the table, by investing through SIP, you end up buying more units when the price is
low and fewer units when the price is high. However, over a period of time these market
fluctuations are generally averaged. And the average cost of your investment is often reduced.
At the end of the 12 months, Suresh has more units than Rajesh, even though they invested
the same amount. That’s because the average cost of Suresh’s units is much lower than that
of Rajesh. Rajesh made only one investment and that too when the per-unit price was high.
Suresh’s average unit price = 12000/1480.6012 = Rs. 8.105

Rajesh’s average unit price = Rs. 9.345
Beneft 4 : Grow Your Investment With Compounded Benefits
It is far better to invest a small amount of money regularly, rather than save up to make one
large investment. This is because while you are saving the lump sum, your savings may not
earn much interest.
With HDFC MF SIP, each amount you invest grows through compounding benefits as well.
That is, the interest earned on your investment also earns interest. The following example
illustrates this.
Imagine Neha is 20 years old when she starts working. Every month she saves and invests Rs.
5,000 till she is 25 years old. The total investment made by her over 5 years is Rs. 3
lakhs.Arjun also starts working when he is 20 years old. But he doesn’t invest monthly. He gets
a large bonus of Rs. 3 lakhs at 25 and decides to invest the entire amount.
Both of them decide not to withdraw these investments till they turn 50. At 50, Neha’s
Investments have grown to Rs. 46,68,273* whereas Arjun’s investments have grown to Rs.
36,17,084*. Neha’s small contributions to a SIP and her decision to start investing earlier than
Arjun have made her wealthier by over Rs. 10 lakhs.
*Figures based on 10% p.a. interest compounded monthly.
Disclaimer: TheThe illustration above is merely indicative in nature and should not be
construed as investment advice. It does not in any manner imply or suggest performance of
any HDFC Mutual Fund Scheme(s). Please read Risk Factors.
Benefit 5 : Do All This Effortlessly
Investing with HDFC MF SIP is easy. Simply give us post-dated cheques or opt for an
Auto Debit from you bank account for an amount of your choice (minimum of Rs. 1000 and in
multiples of Rs. 100 thereof*) and we’ll invest the money every month in a fund of your choice.
The plans are completely flexible. You can invest for a minimum of six months, or for as long
as you want. You can also decide to invest quarterly and will need to invest for a minimum of
two quarters.
4.2.2 - SYSTEMATIC TRANSFER PLAN (STP)
STP refers to Systematic Transfer Plan where in an investor invests a lump sum amount in
one scheme and regularly transfers (i.e. switches) a pre-defined amount into another scheme.
Every month on a specified date an amount you choose is transfered from one mutual fund
scheme to another of your choice.
Currently, Fixed Systematic Transfer Plan (FSTP) - Monthly Interval and Capital Appreciation
Systematic Transfer Plan (CASTP) - Monthly Interval facility is available to the Unit holders on
1st, 5th, 10th, 15th, 20th and 25th of a month and FSTP - Quarterly Interval and CASTP -
Quarterly Interval facility is available to the Unit holders on 1st, 5th, 10th, 15th, 20th and 25th
of the first month of each quarter.
The Entry Load Structure for the transferee schemes - HDFC Growth Fund, HDFC Equity
Fund, HDFC Top 200 Fund, HDFC Capital Builder Fund, HDFC Core & Satellite Fund, HDFC
Premier Multi-Cap Fund, HDFC Balanced Fund, HDFC Prudence Fund, HDFC Long Term
Advantage Fund and HDFC TaxSaver will be as follows:
The Exit Load Structure is as follows:

For Transferee Schemes : HDFC Long Term Advantage Fund and HDFC TaxSaver – Nil For
Transferee Schemes : HDFC Growth Fund, HDFC Equity Fund, HDFC Top 200 Fund, HDFC
Capital Builder Fund, HDFC Core & Satellite Fund, HDFC Premier Multi-Cap Fund, HDFC
Balanced Fund and HDFC Prudence Fund.
In respect of each investment through STP less than Rs. 5 crore in value, an Exit Load of
1.25% is payable if units are redeemed / switched-out on or before 2 years from the date of
allotment. In respect of each investment through STP equal to or greater than Rs. 5 crore in
value, no Exit Load is payable.
Thus, this facility offers the benefits similar to those of an SIP and is suitable for investors who
intend to invest systematically and currently have funds for investments.
4.3 - PRODUCTS OF MUTUAL FUND

EQUITY/ GROWTH FUND
CHILDREN’S GIFT FUND
LIQUID FUND
DEBT/ INCOME FUND
EQUITY/ GROWTH FUND DEBT/INCOME FUND

HDFC Growth Fund HDFC MF Monthly Income Plan - Short
Term Plan
HDFC Top 200 Fund
HDFC Core and Satellite Fund

HDFC Multiple Yield Fund
HDFC Index Fund - Sensex Plan
HDFC Index Fund - Sensex Plus Plan

HDFC Income Fund
HDFC Balanced Fund
HDFC Long Term Advantage Fund (ELSS)

HDFC Short Term Plan
HDFC Long Term Equity Fund
HDFC Infrastructure Fund

HDFC Gilt Fund - Short Term Plan
HDFC Capital Builder Fund
HDFC Premier Multi-Cap

HDFC Floating Rate Income Fund -Short
HDFC Index Fund - Nifty Plan
Term Plan
HDFC Arbitrage Fund
HDFC Equity Fund

HDFC Cash Management Fund - Savings
HDFC Prudence Fund Plus Plan
HDFC TaxSaver (ELSS)
HDFC Mid-Cap Opportunities Fund HDFC MF Monthly Income Plan - Long

Term Plan
HDFC Multiple Yield Fund - Plan 2005
HDFC High Interest Fund
HDFC High Interest Fund - Short term

Plan
HDFC Gilt Fund - Long Term Plan
HDFC Floating Rate Income Fund - Long

Term Plan
CHILDREN’S GIFT FUND LIQUID FUND

HDFC Children's Gift Fund - Investment HDFC Liquid Fund
Plan
HDFC Liquid Fund Premium Plan
HDFC Children's Gift Fund - Savings Plan
HDFC Liquid Fund Premium Plus Plan
HDFC Cash Management Fund – Call
HDFC Cash Management Fund - Savings

Plan
SOME POPULAR FUNDS ARE EXPLAIN HERE
HDFC Growth Fund
HDFC Growth fund, an open-ended growth scheme, applies an investment approach

based on a set of well established but flexible principles that emphasize the concept of
sustainable economic earnings cash return on investment. The objective is to identify
“business with superior growth prospects nd good management at a reasonable price”.
The five basic principles that serve the foundation for this approach are as follows:
 Focus on the long term
 Investment confers proportionate ownership of the business
 Maintain a margin safety
 Maintain a balanced outlook on the market
 Discipline approach to selling.
The investment philosophy rests on a two-pronged approach. 60-80% of the portfolio

will aim to stay invested for most of the time in large cap stocks that satisfy the above
investment criteria. This allocation to large cap stocks also ensures greater liquidity in
the portfolio. 20-40% of the portfolio will be invested in companies of scale that are
either large market share holder
Basic Scheme Information,
Nature of Scheme Open Ended Growth Scheme
Inception Date September 11, 2000
Option/Plan Dividend Plan, Growth Plan. The Dividend Plan

offers Dividend Payout and Reinvestment Facility.
The asset allocation under the Scheme will be as follows :
Sr.no Type of Instruments Normal Normal Risk Profile

Allocation Allocation
(% of Net Asset) (% of Net Asset)
1 Equity & Equity related 80-100 00 Medium to high

instruments
Debt Securities, Money 00 Low to medium

Market instruments &
2 00-20
Cash
(including money at call)
Plan name NAV Date NAV value
Dividentd plan 18 Aug 2008 29.0270
Growth plan 18 Aug 2008 58.9370
Returns
HDFC Growth (NAV as at evaluation date, Rs. Per 53.472

Fund unit)
Date Period NAV Returns(%) $$ Benchmark

^ Returns(%)#
March 30, 2007 Last 458 days 45.461 13.81** 2.37**

December 28, Last Six months (185 79.6670 -32.88* -33.38*
2007 days)
June 29, 2007 Last 1 Year (367 days) 54.695 -2.22** -8.07**
June 30, 2005 Last 3 Years (1096 days) 25.499 27.97** 23.21**
June 30, 1998 Last 10 Years (3653 days) N.A N.A. 15.25**
September 11, Since Inception (2849 10.000 23.96** 14.44**

2000 days)
* Absolute Returns ** Compounded Annualised Returns # SENSEX

~ Due to an over all sharp rise in the stock prices
^ Past performance may or may not be sustained in the future
SIP Returns
SIP Investments Since Inception 5 Year 3 Year 1 Year
Total Amount Invested (Rs.) 94,000.00 60,000.00 36,000.00 12,000.00
Market Value as on June 30, 2008 338,680.64 115,755.39 43,748.58 9,857.36
Returns (Annualised)*% 31.84% 26.64% 13.10% -31.44%
Benchmark Returns 22.77% 20.64% 6.77% -36.15%
# SENSEX
Benchmark BSE Sensex Disclaimer:
The above investment simulation is for illustrative purposes only and should not be construed
as a promise on minimum returns and safeguard of capital. The AMC / Mutual Fund is not
guaranteeing or promising or forecasting any returns. SIP does not assure a profit or
guarantee protection against a loss in a declining market. Please refer SIP Enrolment Form or
contact nearest ISC for SIP Load Structure
HDFC TOP-200 FUND
Investment Objective
The investment objective is to generate long term capital appreciation from a portfolio of equity
and equity linked instruments. The investment portfolio for equity and equity linked instruments
will be primarily drawn from the companies in the BSE 200 Index. Further, the Scheme may
also invest in listed companies that would qualify to be in the top 200 by market capitalization
on the BSE even though they may not be listed on the BSE This includes participation in large
IPOs where in the market capitalization of the company based on issue price would make the
company a part of the top 200 companies listed on the BSE based on market capitalization
Basic Scheme Information
Inception Date October 11, 1996
Option/Plan Dividend Plan,Growth Plan. The Dividend Plan offers Dividend

Payout and Reinvestment Facility.
Plan Name NAV Date NAV Amount
Dividend Plan 18 Aug 2008 38.29
Growth Plan 18 Aug 2008 129.56
Investment Pattern
The Scheme may also invest upto 25% of net assets of the Scheme in derivatives such as
Futures & Options and such other derivative instruments as may be introduced from time to
time for the purpose of hedging and portfolio balancing and and other uses as may be
permitted under the regulations and guidelines.
The Scheme may also invest a part of its corpus, not exceeding 40% of its net assets, in
overseas markets in Global Depository Receipts (GDRs), ADRs, overseas equity, bonds and
mutual funds and such other instruments as may be allowed under the Regulations from time
to time.
Returns
HDFC Top 200 (NAV as at evaluation date, Rs. Per 115.424

Fund unit)

^ Returns(%)#
March 30, 2007 Last 458 days 104.504 8.24** 4.45**

2007 days)
October 11, 1996 Since Inception (4280 10.000 25.3** 15.18**

days)
SIP Returns
SIP Investments Since 10 Year 5 Year 3 Year 1 Year

Inception
Total Amount Invested (Rs.) 141,000.00 120,000.00 60,000.00 36,000.00 12,000.00
Market Value as on June 30, 835,535.45 580,129.04 113,375.02 41,661.29 9,843.01

2008
Returns (Annualised)*% 27.85% 29.65% 25.77% 9.73% -31.64%
Benchmark Returns 18.32% 20.25% 18.90% 5.82% -38.40%
Benchmark - BSE 200
Disclaimer: The above investment simulation is for illustrative purposes only and should not be
construed as a promise on minimum returns and safeguard of capital. The AMC / Mutual Fund
is not guaranteeing or promising or forecasting any returns. SIP does not assure a profit or
contact nearest ISC for SIP Load Structure
HDFC – EQUITY FU ND
HDFC Equity Fund is an open-ended growth scheme, which aims to generate long-
term capital appreciation. The scheme maintains a focused portfolio predominantly
of large cap stocks, through there is controlled exposure to mid caps. The schemes
however always remain diversified across sectors. Moreover, the sectoral
allocation is done keeping in mind to diversify across sectors weakly co-related to
each other to further reduce risk. The underlying theme while managing the
scheme is to invest in businesses that are sustainable and for good quality.
Inception Date January 01, 1995
Option/Plan Dividend Plan,Growth Plan. The Dividend Plan offers Dividend

Dividend Plan 18 Aug 2008 36.1630
Growth Plan 18 Aug 2008 156.7660
Investment Strategy:
In order to provide long term capital appreciation, the Scheme will invest predominantly in
growth companies. Companies selected under this portfolio would as far as practicable consist
of medium to large sized companies which:
• are likely achieve above average growth than the industry;

• enjoy distinct competitive advantages, and
• have superior financial strengths.
The aim will be to build a portfolio, which represents a cross-section of the strong
growth companies in the prevailing market. In order to reduce the risk of volatility, the
Scheme will diversify across major industries and economic sectors
Investment Pattern
The asset allocation under the Scheme will be as follows :
Sr.No. Asset Type (% of Portfolio) Risk Profile
1 Equities and Equity Related Instruments 80 - 100 Medium to High
2 Debt & Money Market Instruments 0 - 20 Low to Medium
Investment in Securitised debt, if undertaken, would not exceed 20% of the net assets of the
scheme.
The Scheme may also invest upto 25% of net assets of the Scheme in derivatives such as
Futures & Options and such other derivative instruments as may be introduced from time to
time for the purpose of hedging and portfolio balancing and other uses as may be permitted
under the Regulations.
overseas markets in Global Depository Receipts (GDRs), ADRs, overseas equity, bonds and
mutual funds and such other instruments as may be allowed under the Regulations from time
to time. Also refer to the Section on Policy on off-shore Investments by the Scheme(s).
If the investment in equities and related instruments falls below 70% of the portfolio of the
Scheme at any point in time, it would be endeavored to review and rebalance the composition.
Not with standing anything stated above, subject to the regulations, the asset allocation pattern
indicated above may change from time to time, keeping in view market conditions, market
opportunities, applicable regulations and political and economic factors. It may be clearly
understood that the percentages stated above are only indicative and are not absolute and that
they can vary substantially depending upon the perception of the AMC, the intention being at
all times to seek to protect the NAV of the scheme. Such changes will be for short term and
defensive considerations. Provided further and subject to the above, any change in the asset
allocation affecting the investment profile of the Scheme and amounting to a change in the
Fundamental Attributes of the Scheme shall be effected in accordance with sub-regulation
(15A) of regulation 18 of SEBI regulations.
Returns
HDFC Equity (NAV as at evaluation date, Rs. Per 143.171

Fund unit)
Date Period NAV Returns (%) $$ Benchmark Returns

^ (%) #
March 30, 2007 Last 458 days 142.602 0.32** 1.47**

2007 days)
June 30, 1998 Last 10 Years (3653 7.280 34.67** 17.75**

days)
January 1, 1995 Since Inception (4929 10.000 21.78** 9.22**

days)
* Absolute Returns ** Compounded Annualised Returns # S&P CNX 500

SIP Returns

Inception
Market Value as on June 30, 1,494,753.92 646,490.65 107,904.12 38,998.67 9,408.57

2008
Disclaimer:
The above investment simulation is for illustrative purposes only and should not be construed
as a promise on minimum returns and safeguard of capital. The AMC / Mutual Fund is not
contact nearest ISC for SIP Load Structure.
HDFC Infrastructure Fund
To seek long-term capital appreciation by investing predominantly in equity and equity related securities
of companies engaged in or expected to benefit from growth and development of infrastructure.
Nature of Scheme Close Ended Equity Scheme with a maturity period of 3

years from the date of allotment with automatic conversion
into an open-ended scheme upon maturity of the Scheme.
Inception Date March 10, 2008
Option/Plan Dividend Option, Growth Option. Dividend Option currently

offers with payout facility only
Growth Option 18 Aug 2008 8.3830

Dividend Option 18 Aug 2008 8.3830
Investment Pattern:
The asset allocation under the respective Plans will be as follows:
Type of Instruments Minimum Maximum Risk Profile of the

Allocation (% of Allocation(% of Instrument
Net Assets) Net Assets)
Equity and Equity Related 65% 100% Medium to High

Instruments of infrastructure /
infrastructure related
companies
Equity and Equity Related 0% 35% Medium to High

Instruments of companies
other than mentioned above
Debt Securities and Money 0% 35% Low to Medium

Market Instruments* and Fixed
Income Derivative ;
* Investments in securitized debt shall not normally exceed 30% of the net assets of the
Scheme. The Scheme may seek investment opportunity in Foreign Securities (max. 35% of
net assets). The Scheme may take derivatives position for hedging, portfolio balancing or to
undertake any other strategy as permitted under SEBI Regulations from time to time (max.
20% of the net assets) based on the opportunities available subject to SEBI Regulations.
Returns
HDFC Infrastructure (NAV as at evaluation date, Rs. 7.48
Fund Per unit)
Date Period NAV Returns (%) $ Benchmark Returns

$^ (%) #
March 30, 2007 Last 458 days N.A N.A. 1.47**
December 28, 2007 Last Six months (185 N.A N.A. -39.38*
days)
June 29, 2007 Last 1 Year (367 days) N.A N.A. -11.59**
June 30, 1998 Last 10 Years (3653 N.A N.A. 17.75**

days)
March 10, 2008 Since Inception (112 10.000 -25.2* -18.45*

days)
* Absolute Returns ** Compounded Annualised Returns # S&P CNX 500

~ Due to an overall sharp rise in the stock prices
FC Prudence Fund
The investment objective of the Scheme is to provide periodic returns and capital appreciation
over a long period of time, from a judicious mix of equity and debt investments, with the aim to
prevent/ minimize any capital erosion.
Nature of Scheme Open Ended Balanced Scheme

Inception Date February 01, 1994
Option/Plan Dividend Plan, Growth Plan. The Dividend Plan offers Dividend
Returns
HDFC Prudence (NAV as at evaluation date, Rs. Per 112.678

Fund unit)
Date Period NAV Returns (%) $ Benchmark Returns

$^ (%) #
March 30, 2007 Last 458 days 110.132 1.84** 6.01**
December 28, 2007 Last 185 days 160.6870 -29.88* -22.7*
June 30, 1998 Last 10 Years (3653 11.480 26.8** N.A.

days)
February 1, 1994 Since Inception (5263 10.000 20.41** N.A.

days)
* Absolute Returns ** Compounded Annualised Returns
# CRISIL Balanced Fund Index ~ Due to an overall sharp rise in the stock prices
$$ Adjusted for the dividends declared under the scheme prior to its splitting into the Dividend
and Growth Plan
Investment Strategy
As outlined above, the investments in the Scheme will comprise both debt and equities. The
Fund would invest in Debt instruments such as Government securities, money market
instruments, securitized debts, corporate debentures and bonds, preference shares, quasi
Government bonds, and in equity shares. In the long term, the mix between debt instruments
and equity instruments is targeted between 60:40 and 40:60 respectively. The exact mix will be
a function of interest rates, equity valuations, reserves position, risk taking capacity of the
portfolio without compromising the consistency of dividend payout (in the case of Dividend
Plan), need for capital preservation and the need to generate capital appreciation.
Fund Manager
Mr. Peasant Jain
Mr. an and Ladd - Dedicated Fund Manager - Foreign Securities
Investment Pattern
The following table provides the asset allocation of the Scheme's portfolio.
The asset allocation under the respective Plans will be as follows:
Reno. Type of Instruments Normal Allocation Risk Profile

(% of Net Assets)
1 Equities & Equity related instruments 40 - 75% Medium to High
2 Debt Securities, Money Market 25 - 60% Low to Medium

instruments(including cash/call money)
(Investment in Securitized debt, if undertaken, would not exceed 10% of the net assets of the
Scheme.)
HDFC Capital Builder Fund
HDFC Capital Builder Fund, an open-ended growth scheme, aims to invest in strong
companies at prices that below fair value in the opinion of the fund managers. The investment
approach is based on the philosophy that value may be uncovered only where the crowd has
not discovered it yet. In the opinion of the fund managers such value exists in good quality well
managed “neglected “stocks. The current neglect in these companies by the broad market
participants can be due to various factors such as difficult recent market conditions, major
restructuring charges, VRS expenses or other such onetime effects that may subdue profits in
the near term. This also usually results in the shares of such companies being relatively
illiquid.
While assuming such relative risk adjusted liquidity risk the fund managers propose to
capitalize on expected pick up reported earning as result of strong growth prospects in the
future. This eventually translates in to more liquidity depending on the success of this strategy.
Such opportunities are available in large companies as well as small companies. While there
are no criteria for stock selection based on market capitalization the endeavor is to keep a
balance of companies in the portfolio between big and small companies, on one category
overwhelming the other
Inception Date February 01, 1994
Option/Plan Dividend Plan, Growth Plan. The Dividend Plan offers Dividend
Plan Name NAV NAV Amount

Date
Dividend Plan 18 22.075
Aug
2008
Growth Plan 18 69.918

Aug
2008
Investment Pattern
The asset allocation under the Scheme will be as follows:
Sr.No. Asset Type (% of Portfolio) Risk Profile
1 Equities and Equity Related Instruments Upto 100% Medium to High
2 Debt & Money Market Instruments Not more than 20% Low to Medium
Investment in Securitized debt, if undertaken, would not exceed 20% of the net assets
of the scheme. The Scheme may also invest upto 25% of net assets of the Scheme in
derivatives such as Futures & Options and such other derivative instruments as may be
introduced from time to time for the purpose of hedging and portfolio balancing and
other uses as may be permitted under regulations and guidelines.
overseas markets in Global Depository Receipts (GDRs), ADRs, overseas equity,
bonds and mutual funds and such other instruments as may be allowed under the
Regulations from time to time. Also refer to the Section on Policy on off-shore
Investments by the Scheme(s).
SIP Returns

Inception
Market Value as on June 30, 890,131.42 463,752.08 103,349.40 37,539.34 9,242.16

2008
Past performance may or may not be sustained in the future
* Load is not taken into consideration and the Returns are of Growth Plan / Option. Investors
are advised to refer to the Relative Performance table furnished as above for non-SIP returns
Returns
HDFC Capital Builder (NAV as at evaluation date, Rs. 64.169

Fund Per unit)

^ Returns(%)#
March 30, 2007 Last 458 days 60.3 5.08** 1.47**
December 28, 2007 Last Six months (185 105.1230 -38.96* -39.38*
days)
June 30, 2005 Last 3 Years (1096 37.474 19.62** 18.87**

days)
June 30, 2003 Last 5 Years (1827 13.117 37.32** 29.03**

days)
June 30, 1998 Last 10 Years (3653 7.480 23.96** 17.75**

days)
February 1, 1994 Since Inception (5263 10.000 13.76** 7.95**
days)
* Absolute Returns ** Compounded Annualised Returns

# S&P CNX 500
Benchmark - S & P CNX 500 Disclaimer: The

above investment simulation is for illustrative purposes only and should not be construed as a
promise on minimum returns and safeguard of capital. The AMC / Mutual Fund is not
contact nearest ISC for SIP Load Structure.
CHAPTER 5
PART
OF MY
SUMMER TRAINING
Part of my understudy training
For the purpose of fulfillment of masters degree in business administration i had

undertaken my summer training at HDFC-mutual fund at Kota branch for a period of 45 days.
In course of the training i had an opportunity to get proper working knowledge about the
internal workings of Mutual funds dept.
The single most important factor that drives HDFC Mutual Fund is its belief to give the
investor the chance to profitably invest in the financial market, without constantly worrying
about the market swings.
I had chosen the HDFC-mutual fund as it is one of the most highly reputed mutual fund
all over the INDIA and offers under study training to students during summer. I had the job of
convincing investors to choose HDFC mutual funds over others. For this purpose I also
maintained a database of all the investors who had been approached.
Money is a valuable asset and it is obvious that people think many times before
investing their money into any kind of funds. They frequently ask questions about the time
period, interest rates, current status of the share market, etc which requires good running
knowledge in the field. It was not very easy to convince people to make investment in the
HDFC mutual funds but with the help of Mr. Himanshu Vyas, of HDF-mutual fund Kota branch.
I accomplished my task.
The largest amount of investment was made by Mr. MD ABID ,an amount of 1,50,000 , in the
scheme HDFC- equity fund for a duration of years.
Other investors were
NAME Investmen Amount Scheme Duration

t type
1. MD ABID SIP 2,000 HDFC GROWTH FUND 1 YEAR
2. SHOAIB AKHTER SIP 1,000 HDFC TOP 200 FUND 1 YEAR
3. DEBENDRA NATH PAUL One time 1,00,000 HDFC EQUITY FUND 3 YEAR
4. NAZM UZ ZAMA SIP 1,000 HDFC GROWTH FUND 1 YEAR
5. MD ABID ONE TIME 1,50,000 HDFC EQUITY FUND 2 YEAR
6. NISHIT HEMANI SIP 2,000 HDFC GROWTH FUND 1 YERA
7. Dr NEYAZ AHMED SIP 1,000 HDFC GROWTH FUND 1 YERA
8. KHALID SADAT SIP 2,000 HDFC TOP 200 FUND 1 YEAR
9. CHANDU LAL GUPTA SIP 1,000 HDFC TOP 200 FUND 1 YEAR
10. NISHIT HEMANI ONE TIME 50,000 HDFC EQUITY FUD 2 YEAR
11. MD PERWEZ ALAM SIP 1,000 HDFC BALANCED FUND 1 YEAR
12. JUBAIR KHAN SIP 1,000 HDFC BALANCED FUND 1 YEAR
13. D T MOHANTY SIP 1,000 HDFC GROWTH FUND 1 YEAR
14. PRAKASH JHA SIP 1,000 HDFC TOP 200 FUND 1 YEAR
15. KHALID SADAT One time 1,00,000 HDFC EQUITY FUND 3 YEAR
16. AMIT DAGA SIP 2,000 HDFC GROWTH FUND 1 YEAR
17. VIKRANT GUPTA SIP 1,000 HDFC GROWTH FUND 2 YEAR
18. RAJESH KUMAR SIP 1,000 HDFC GROWTH FUND 1 YERA
19. MD ASIF SIP 1,000 HDFC GROWTH FUND 1 YERA

20. MAZAR KHAN SIP 1,000 HDFC TOP 200 FUND 1 YEAR
21. BISWAJIT RAI SIP 1,000 HDFC TOP 200 FUND 1 YEAR
22. NARENDRA NATH PAUL SIP 1,000 HDFC GROWTH FUND 2 YEAR
23. HARPREET KAUR SIP 1,000 HDFC BALANCED FUND 1 YEAR
24. SOMA AGARWAL SIP 1,000 HDFC EQUITY FUD 1 YEAR
During the training period i managed to convince people to make investment in Hdfc Mutual
funds.The total amount of trasaction i provided was about Rs 7,00,000
CHAPTER 6
METHODOLOGY
OF
THE STUDY
1. RESEARCH METHODOLOGY
2. SOURCES OF DATA
COLLECTION
3. HYPOTHESIS OF THE STUDY
4. DATA COLLECTION & ANALYSIS
6.1 - Research Methodology:
Since the study undertaken by me is related to the study of mutual fund in India, the
means adopted for collection of various facts and data were in the form of personal
observation, officials documents, and directly interacting with the officers concerned and also
directly interacting with the existing customers as well as new customer formed. It was an
exploratory research. Work is mainly emphasized on the primary data. Primary data are
gathered form prescribed questionnaire and by personal interview and the secondary data are
collected from different books and magazines.
6.2 - Sources of Data collection

There are two sources of data collection. They are:
1. PRIMARY DATA SOURCE

2. SECONDARY DATA SOURCE
The secondary data are those, which have already been collected by someone else thorough
Books, Internet, Television, journals, Magazines, etc. On the other hand primary data does not
exist here. The researcher has to gather primary data afresh for the specific study undertaken
by him. Primary data has been collected here by questionnaire method and personal interview
method is followed. Primary sources such as Interviews, Observation, and attending training
and development classes. Secondary sources such as Booklets, Monthly journal, Magazines,
Official files etc.
6.3 - HYPOTHESIS OF THE STUDY
For doing the dissertation topic “performance of mutual fund analysis” I took the hypothesis of
certain groups. I divide the total population on the basis of their age, income, gender,
occupation and status.
• Male jobholders within the age group of 24-40.
• Female jobholders within the age group of 24-40.
• Male jobholders above the age 40.
• Female jobholders above the age 40.
• Individual having the income in the range of 1lkh-3lkh per annum.
• Individual having the income above 3lkh per annum.
In Rajesthan i.e. rural area it is still a new concept so it will take some more time to really
penetrate into this market apart from people who are HNI’s though these people are given
more emphasis by all the Mutual funds and distribution channels. With the introduction of SIP’s
the industry has created some options clear for retail investors to enter this market. My survey
says that it the awareness level that is playing acting as an obstacle in the growth of Mutual
fund Industry in Rajesthan as a whole. People in Jhalawar are now opening up and interested
in looking forward for certified investment planners to help them designing their investment
portfolio. Rajesthan as a market was not that efficient few years back, but now with lot of
multinational companies and other reputed companies coming down, the Rajesthan market is
slowly picking up. For mutual funds it is one of the emerging markets that can be trapped form
its developing stage and though people of rural areas prefer Moderate risk they can easily
accept mutual funds. Mutual fund Industry is delivering a splendid performance and will of
course continue in coming future. But that can be only possible as the distribution channels like
Karvy, Bajaj finance and Banks i.e. Citi Bank, HDFC Bank, ICICI Bank and Standard
Chartered Bank along with all Asset Management Company.
6.4 - Data Collection & Data Analysis
150
100
135
50
65
0
No of respondent - 200 male female
Respondent
Male - 135
Female - 65
100
80
60
40 80
55
20 40
25
0
18 to 3535 to 4545 to 55 55 &
above
Respondent
Number of respondents According to age groups:
18 to 30 = 55
30 to 40 = 80
40 to 50 = 40
50 above =25
The survey is conducted on a sample of 200 people which includes 110

males and 90 females. The sample contains consumers from all the age
groups so that an ideal sample can be obtained.
1. Investment Avenues available in the market, that investor are aware

of?
Postal schemes
Government securities
Direct equity investment
Bank FD’s
Mutual funds
Insurance
INFERENCE:
According to the investors in Kota, 33% of investors prefer to deposit there

money in bank FD’s. Where as 8% of the investors want to invest in postal scheme, 4%
in government security, 15% invest in direct equity 20% of investors they prefer mutual
fund & insurance, as there investment house which is not very high, but at the same
time mutual fund concept is growing
2. More attractive about mutual funds?

Returns
Moderate risk
Tax benefits
Hassle free
Past performance
Well regulated
No idea
INFRENCE:
According to people of Kota they attract with past performance of the company if
company past records is good then they interested to invest. After that people attract
with tax benefit then return on investment
3. Percentage of entire investment includes mutual funds?

Below 20%
20 to 50%
50 to 80%
80% above
INFRENCE:
By this we come to know that most of the people use to go for mutual fund as we
can see by the above graph that 83 people from 200 goes for 20% to50% investment in
Mutual Funds.
4. For Investments in Mutual Fund, which company investors prefer?
HDFC MF
ABN AMRO MF
PRUDENTIAL ICICI MF
RELIANCE MF
BIRLA SUNLIFE
INFERENCE:
According to the Investors in Kota 35% of investors prefer to invest in HDFC
mutual fund, 27% of investors prefer Reliance mutual fund where as Birla share 12%
and ICICI by 17%.but only 9% investors invest in ABN AMRO mutual fund. I have
compared these five fund house because they are the main competitors in Kota.
5. How do investors manage his investment portfolio?
Solely of my own
On advise of a friend
On advise of a distributor/agent
On advise of your banker
On advice of mutual fund house people

INFRENCE:
According to my survey most no of people manage his investment port folio by

own, 84 people out of 200 manage his portfolio by own and 45 & 36 people manage with
the help of bankers and MF house
6. Savings/investment avenues 5 year back?
Bank FD, Savings
Insurance
Mutual funds
Equity market
Govt. securities
Real estate
Postal savings, FD
INFRENCE:
According to my survey before 5 year most of the people(113) of Kota city

invested his money in insurance sector and 90 people out of 200 invested in bank FD.
But only 43 people out of 200 invest in mutual fund which was very low
7. Among the huge number of people going for mutual fund, in which
kind of fund they normally invest?
Equity Oriented
Debt Oriented
Balanced Oriented
INFERENCE:
In the city like Kota in between the age group 18-30, 62% investor invested in equity
oriented, and only 18% people invest in debt fund. But group of people more than 50
year 55% investor invest in debt fund and only 23% people invest in equity fund. It mean
younger people attract with equity fund and old man attract with debt fund.
but in balanced fund every groups are equally invest

Risk appetite of people in Rajesthan Preferred Risk and Return
High risk high return (H,H)
Moderate risk moderate return (M,M)
Low risk low return (L,L)
INFERENCE:
According to the survey, we can conclude that, people in rural areas mostly
believe in Moderate risk, and moderate returns. Even mutual funds have moderate risk
and the return is quite less than as it is in case of equities. So, for the people of Rural
areas mutual funds are the right kind of investment option.
8. How seriously people in Kota thing about undergoing a financial
planning for them?
Yes
No
INFRENCE:
According to my survey of Kota people , most no of people are more serious

about financial planning
CHAPTER 7
QUESTIONARE
Questionnaire
Please fill up the questionnaire according to the questions asked. (Just put on a tick mark [√]
wherever needed)
Name - _______________________________________________________
Age - <20-30> Sex M F
< 30-40
< 40-50
< 50-above>
Occupation - Service (Govt.)
Service (Pvt.)
Business
Self-employed
Retired
Organization - _______________________________________________________
Designation - _______________________________________________________
Annual Income - Below 1 lakh
1 – 3 lakh
3 – 5 lakh
Above 5 lakh
1. What are the Investment Avenues available in the market, that you are aware of?
Postal schemes (i.e. MIS/PPF/NSC/R.D/T.D etc.)
Government securities
Bank FD’s
Direct equity investment
Mutual funds
Insurance
2. Are you aware of the fact that some of the performing Mutual fund schemes in the
industry have posted 20% + annualized returns in last 10 years?
Yes No
3. In your point of view what is more attractive about mutual funds?
Returns Hassle free
Moderate risk Past performance
Tax benefits Well regulated
No idea
4. If you have invested in Mutual funds, what percentage of your entire investment includes
mutual funds?
Below 20% 50 to 80%
20 to 50% 80% above
5. What were your Savings/investment avenues 5 year back?
Bank FD, Savings Insurance
Mutual funds Equity market
Govt. securities Real estate
Postal savings, FD
6. Now, what new avenues are included in your Investment portfolio?
Govt. securities Mutual funds
Insurance Derivatives
Equity market
Real estate
7. How do you manage your investment portfolio?
Solely of my own
On advise of a friend
On advise of a distributor/agent
On advise of your banker
On advice of mutual fund house people
8. How do you rate these while taking an investment decision? (Rate as 1,2,3,4,5 according
to preference)
Returns Risk factors
Lock-in period past performance
Tax benefits
9. You believe in …
High risk, High returns
Moderate risk, moderate returns
Low risk, low returns
10. Have you been ever approached by a Certified Investment Financial Planner?
Yes No
11. Would you like to undergo a financial planning exercise for yourself?
Yes No
CHAPTER 8
FINDING, RECOMMENDATION,
&
CONCLUSION
FINDINGS
In India Mutual fund Industry has seen Dramatic improvements in Quality as well as quality of
products and services offering over the past decade, but the industry has witnessed growth in
the last 10 years considerably below potential. The Asset under Management have grown from
about Rs. 470 billion in march 1993 to Rs. 1,540 billion in April 2004(CAGR of 11.4 percent) &
now it grown to Rs. 5,620 billion till sep 2008. This has mainly achieved due to collection
through mutual fund IPO’s that has been increasing due to the investors feeling that it is
cheaper in its IPO stage on account of its Rs. 10 NAV.
There has been a strong appreciation in equities in comparison to the debt market, which has
shown a downward trend last year. And in turn Mid-cap and diversified funds have delivered
the highest in comparison to other funds. As the Indian economy is showing a growing trend
with GDP more than 6% and expected to show 8% and Indian household saving being 24% of
the entire GDP. There is a strong growth potential of Mutual fund industry in India.
In Rajesthan i.e. rural area it is still a new concept so it will take some more time to really
penetrate into this market apart from people who are HNI’s though these people are given
more emphasis by all the Mutual funds and distribution channels. With the introduction of SIP’s
the industry has created some options clear for retail investors to enter this market. My survey
says that it the awareness level that is playing acting as an obstacle in the growth of Mutual
fund Industry in Rajesthan as a whole.
Some of the Major Findings
1. It is found that HDFC is a favorable Mutual Fund.

2. The basis objective behind investments are mainly long-term capital appreciation,
current income & to some extent tax benefits.
3. The performance of HDFC Core & Satellite & HDFC Top 200 Fund is very good.
4. It is seen that the investment in growth fund is very high. Because the scope of income
and capital appreciation in the long term.
5. It is observed that the driving aspects of investments in mutual fund are safety, fund
performance, Service, Liquidity, return & tax benefits.
6. The type of investment plan that most investor s prefer is to get principal safety at all
time with low returns rather than high return with no safety.
7. HDFC Mutual Fund does not provide ‘monthly income scheme’ which other mutual
funds have and performance is very appreciable.
8. Fund Managers have suggested HDFC prudence ,HDFC Taxsaver , HDFC Equity for
investment , For the top 5.
9. HDFC Prudence is performing good with comparition to the prudence fund of any other
mutual fund house.
10. At this period of time when market condition is not so good, it is better for investors to
invest through Systamatic Investment plan. Which reduces the market risk.
RECOMMENDATION
HDFC Mutual Fund is one of the largest mutual funds and well-established fund house in the
country with consistent and above average fund performance across categories since its
incorporation on December 10,1999.The single most important factor that drives HDFC Mutual
Fund is its belief to give the investor the chance to profitably invest in the financial market,
without constantly worrying about the market swings.
Some major recommendation:
1) Fund managers should continuous Investor awareness Programs to make the

investors aware of technicalities of fund management and the return aspects.
2) Agents, Service personnel must be able to give correct and timely information
about NAV and the return on different schemes.
3) Monthly income scheme should be introduced.
4) Scheme should be offered as per the needs and the requirement of the
industries.
5) The regulatory norms provided by the regulatory authorities like SEBI are
required to be known to all including investors.
CONCLUSION
The global financial market has transformed from Seller’s market to Buyer’s market with
liberalization, Globalizations and privatization. The Indian mutual fund market has also become
global when foreign funds entered, they came up with probably best marketing strategies to
beat Indian giants like BIRLA, HDFC, and ICICI have come up with aggressive strategies to
beat the foreign funds. Now the cutthroat competition goes on and on.
HDFC Mutual funds have rewarded investors with hand some returns. The good news is that
this is poised to become a trend. The mutual funds have strengthened their distribution
networks, become more transparent and investor friendly and are rewarding investors. The
mutual fund is finally, proving itself as a vehicle of safety for investments. But it is still the fund
manager’s investment philosophy that makes the difference between the winner and the
losers.
Careful market analysis, consumer segmentation, identification of investor needs, service

designing are to be carried out for the successful implementation of different schemes by
mutual fund organizations. Regulatory measures by SEBI should be clearly explained to the
investors. Positioning of the schemes and their branding will help a lot for growth of the
industry. Creativity and innovation are the means of marketing in the days to come for Indian
mutual fund market.
CHAPTER 9
BIBLIOGRAPHY
BIBLIOGRAPHY:-
MAGAZINES
INDIA TODAY
BUSINESS WORLD
WEB SITES
WWW.HDFCFUND.COM
http://www.hdfcfund.com/AboutUs/
http://www.hdfcfund.com/Products/
WWW.AMFIINDIA.COM
http://www.amfiindia.com/showhtml.asp?page=mfconcept#A
JOURNAL INTOUCH MUTUALLY

HDFC Mutual Fund

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Project Study Report

“Detail Study of HDFC Mutual Fund “

Submitted in partial fulfilfilment for the Award of degree of

Master of Business Administration

Submitted By:- Submitted To:

MBA 2ed year Asstt. Prof.

GOVERNMENT ENGINEERING COLLEGE JHALAWAR

I express my sincere thanks to my project guide, Mr. Himanshu Vyas Designation,

4. BENEFITS OF MUTUAL FUND

1.2 - What is Net Asset Value (NAV) of a scheme?

1.3 - Scope for Development of Mutual Fund

Mutual Funds invest in a number of companies across a broad cross-section of industries

10. Well Regulated

11. Understanding and Managing Risk

The taxes available are two kinds:

. To the mutual fund- as explained below in No 1

. To the Investor- as explained below in No 2

1. Mutual Fund Taxation

. It receives all income without deduction at source.

2. Benefits to the Investors

.Resident Unit Holders- In case of an individual or Hindu Undivided Families

1.5 - Investment criteria

Less paper work

Service or any kind of income group

OBJECTIVE OF THE STUDY

• To know the performance of the different schemes.

ABOUT HDFC –MUTUAL FUND

1. WHY HDFC MUTUAL FUND

Our Investment Philosophy

Housing Development Finance Corporation Limited (HDFC). HDFC was

The Board of Directors of HDFC Trustee company Limited consists of the

Mr. Anil Kumar Hirjee

Mr. James Aird

Mr. Shishir K. Diwanji

Mr. Ranjan Sanghi

Mr. V. Srinivasa Rangan

CNBC - TV 18 - CRISIL Mutual Fund of the Year Awards 2008: (3 awards)

ICRA Mutual Fund Awards 2008: (3 awards)

Lipper Fund Awards 2008:

PRODUCT & SERVICE OF HDFC MUTUAL FUND

1. TYPES OF MUTUAL FUND

(a) Open-ended Fund/ Scheme

(b)Close-ended Fund/ Scheme

(c)Sector specific funds/schemes

4.2 - INVESTMENT PLAN

4.2.1 - SYSTEMATIC INVESTMENT PLAN (SIP)

Benefit 1 : Become A Disciplined Invester

Monthly Savings - What your savings may generate

Savings per month Total amount invested Rate of return

(rupees in lacs, 15 years later)*

5000 9.0 14.6 17.4 20.9

4000 7.2 11.7 13.9 16.7

3000 5.4 8.8 10.4 12.5

2000 3.6 5.8 7.0 8.3

1000 1.8 2.9 3.5 4.2

*Monthly instalments, compounded monthly, for a 15-year period.

Benefit 3 : Take Advantage of Rupee Cost Averaging

Suresh’s Investment Rajesh’s Investment

Month NAV Amount Units Amount Units

Jan-04 9.345 1000 107.0091 12000 1284.1091

Feb-04 9.399 1000 106.3943

March 30, 2007 Last 458 days 45.461 13.81 2.37

September 11, Since Inception (2849 10.000 23.96 14.44