Chapter I

CHAPTER-I
INTRODUCTION
INTRODUCTION
Mutual fund indicates the fund where in numerous investors come

together to invest in various schemes of mutual fund. Mutual funds are
dynamic institution, which plays a crucial role in an economy by
mobilizing savings and investing them in the capital market, thus
establishing a link between savings and the capital market. A mutual fund
is an institution that invests the pooled funds of public to create a
diversified portfolio of securities. Pooling is the key to mutual fund
investing. Each mutual fund has a specific investment objective and tries
to meet that objective through active portfolio management. Mutual fund
as an investment company combines or collects money of its shareholders
and invests those funds in variety of stocks, bonds, and money market
instruments. The latter include securities, commercial papers, certificates
of deposits, etc.
Mutual funds provide the investor with professional management of funds

and diversification of investment. Investors who invest in mutual funds are
provided with units to participate in stock markets. These units are
investment vehicle that provide a means of participation in the stock
market for people who neither have time nor the money nor perhaps the
expertise to undertake the direct investment in equities. On the other hand
they also provide a route into specialist markets where direct investment
often demands both more time and more knowledge than an investor may
possess. The price of units in any mutual fund is governed by the value of
underlying securities. The value of an investor’s holding in a unit can
therefore, like an investment in share, can go down as well as up. Hence it
is said that mutual funds are subjected to market risk. Mutual fund cannot
guarantee a fixed rate of return. If the particular scheme is performing well
then, more return can be expected.
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It also depends on the fund manager expertise knowledge. It is also seen
that people invest in particular funds depending on who is the fund
manager. A Mutual Fund is a trust that pools the savings of a number of
investors who share a common financial goal. The money thus collected is
invested by the fund manager in different types of securities depending
upon the objective of the scheme.
Mutual Fund Operation Flow Chart
Thus a mutual fund is the most suitable investment for the common person
as it offers an opportunity to invest in a diversified, professionally
managed basket of securities at a relatively low cost. A collected corpus
can be used to procure a diversified portfolio indicating greater returns has
also create Economies of scale through cost reduction.
NEED FOR STUDY
Mutual Fund being an institutional investment agency is treated as a

suitable vehicle specifically for small investors, who normally feel shy of
the capital market and are unable to predict its conditions. Through
different schemes, mutual funds can provide expert advice and portfolio
management by reducing unsystematic risk while offering good returns it
is essential to understand the performance of the mutual funds for the
investor to invest.
2
OBJECTIVES OF THE STUDY
 To study the various mutual fund schemes offered by HDFC bank

so that performance of each fund can be analysed.
 To evaluate the financial performance of selected major schemes of
different companies, so as to suggest the best to investors.
 To study the performance of mutual funds using Sharpe Ratio to
depict risk-return analysis.
SCOPE OF STUDY
The scope of the study is limited to collecting financial data published in the
annual reports of the company every year. The analysis is done to suggest the
possible solutions. The study is carried out for 5 years (2017-2021).
Statistical Tools & Techniques for Data analysis
To analyse the information (or) data collected form Branch Manager and
various financial Statements the following tools are used:
1. Percentages
2. Averages
3. Bar Chart
4. Sharpe Ratio
3
LIMITATIONS OF THE STUDY
The following are the limitations of the study
1. The study is restricted only to the various mutual funds of few companies
alone.
2. Due to shortage of time an extensive study could not be carried out.
3. The study is mainly carried out based on the secondary data.
4. The study is based on the historical data and information provided in the news
papers and magazines, journals and websites and from the host organizations only.
5. The accuracy of the study depends on the accuracy of the data provided.
Hence had to depend fully on secondary data alone.
6. The study is limited to three funds and schemes i.e., tax saving funds, large cap
funds & small cap funds only.
7. The study is limited to only four AMCs. which are UTI, ICICI
PRUDENTIAL, SBI, and HDFC BANK.
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CHAPTER-II
REVIEW OF LITERATURE
REVIEW OF LITERATURE
Dr.Deepak Agarwal in his article titled “Measuring performance of

Indian Mutual Funds” gave the development of the Indian Capital Market
and deregulations of the economy in 2014s where there been structural
changes in both primary and secondary markets. Mutual funds are key
contributors to the globalization of financial markets and one of the main
sources of capital flows to emerging economies. Despite their importance
in emerging markets, little is known about their investment allocation and
strategies. This article provides an overview of mutual fund activity in
emerging markets. It describes about their size and asset allocation.
This paper is a process to analyse the Indian Mutual Fund Industry pricing
mechanism with empirical studies on its valuation. It also analyses data at
both the fund-manager and fund-investor levels. The study revealed that
the performance is affected by the saving and investment habits of the
people and the second side the confidence and loyalty of the fund Manager
and rewards affects the performance of the MF industry in India.
Mr.NarayanRaoSapar in this article titled “Performance Evaluation of

Indian Mutual Funds” explained the performance evaluation of Indian
mutual funds in a bear market is carried out through relative performance
index, risk-return analysis, Treynor's ratio, Sharpe's ratio, Sharpe's
measure, Jensen's measure, and Fama's measure. The data used is monthly
closing NAVs. Then after excluding the funds whose returns are less than
risk-free returns, 58 schemes were used for further analysis. Mean
monthly (logarithmic) return and risk of the sample mutual fund schemes
during the period were 0.59% and 7.10%, respectively, compared to
similar statistics of 0.16% and 8.57% for market portfolio. The results of
performance measures suggest that most of the mutual fund schemes in
the sample of 58 were able to satisfy investor's expectations by giving
excess returns over expected returns based on both premium for
systematic risk and total risk.
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D.N. Rao in his article titled “A Study of Information Needs of Mutual

Funds Investors & Implications for Web Based Marketing of Mutual Fund
Products” gave that Mutual funds are one of the most important financial
service vehicles for investments.
In India, the Asset Management Companies market their investment

products largely through AMFI Certified Agents, Service Centres and
company’s web portals. There is little promotion in print media and in the
recent times AMCs have begun outdoor advertising through large size Bill
Boards/Hoardings.
Mr. Sunil Madhav and Dr Prathap M Chauhan in their article titled

“Comparative study of mutual funds of select Indian Companies” India’s
mutual fund market has witnessed phenomenal growth over the last
decade. The total of 390 schemes comprising of 198 Equity mutual funds,
138 debt schemes and 74 hybrid schemes are selected for the study. The
performance of selected Indian companies mutual fund is analysed with
the help of return, risk. Selected Mutual Fund are compared with their
respective bench mark.
MS Shalini Goyal and MS Dauli Bansal in this article titled “A Study of

Mutual Funds in India also says where and how we have to invest mutual
fund, why it dangerous to directly invest in stock market as you might
have to face loss. Investing in mutual funds helps you to diversify your
risk. This study was conducted to analyse and compare different types of
mutual funds in India.
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Y prabhavathi and N T Krishna Kishore in their article titled

“Investor’s preferences towards Mutual Fund and Future Investments”
about the start of Mutual Funds which gave an opportunity to the common
man to hope of high returns from their investments when compared to
other traditional sources of investments. The main focus of the study is to
understand the attitude, awareness and preferences of mutual fund
investors. Most of the respondents prefer systematic investment plans and
got their sources of information primarily from banks and financial
advisors .Investors preferred mutual funds mainly for professional fund
management and better returns and assessed funds mainly through Net
Asset Values and past performance.
Dr.D.S. Chaubey in the article titled “A Study on Indian Mutual Funds

Equity Diversified growth schemes and their Performance evaluation”,
about Indian Mutual Fund industry has experienced tremendous growth
due to infrastructure and also supported by high saving of funds. After
Liberalization and globalization of Indian economy, market witness huge
crowd towards the option of investing in mutual funds but investment in a
particular funds needs a lot of specifications like investor’s objectives ,
cost, availability of funds, risk & return factors etc. and thus invite
fundamental study for better future and growth. This paper aims to know
how the performance of mutual funds is assessed and ranked after
analysing the NAV and their respective returns so as to measure
investment avenues.
Meenakshi Garg in her article titled “A Study on Performance

Evaluations of Selected Mutual funds in India” Here an attempt has been
made to examine the trends in terms of growth, size and volume of mutual
funds in India and evaluate the financial performance of selected mutual
funds in India.
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For evaluating the financial performance of selected mutual funds, the

period of the study was taken by the researcher from April 2002 to March
2013.
The sample was selected Tax Saving Schemes, ETF, Growth (Equity
Diversified) and Index/sectorial and Contra Fund.
She finds that Tax saving schemes out-performed the market in terms of
absolute return in different years of the study. However, these schemes
and market returns did not provide an adequate return to cover risk-free
return and total risk of the scheme. The market performance funds have a
significant positive influence on the entire sample schemes performance.
The present NAV is positively and significantly correlated with the past
NAV all the time lags of the selected schemes. The study also suggested
that the mutual fund must ensure not only good performance over the
market but also consistency in their return.
Samar Mondal has given this in his article titled “Growth of

Mutual Fund in India with Comparative Performance with SBI Equity &
ICICI Prudential Mutual Fund” about A Mutual fund is a investment plan
into which investor place their contribution that are to be invested in
accordance with a stated objective. Mutual Funds serve as a key financial
intermediary to playing a crucial role in converting the investors savings
to capital market, thus establishing a link between savings and the capital
market. Small investors are unable to diversity their investment because of
their limited funds. Mutual Fund offer a way for these investors to
diversify their risk. The mutual fund industry in India came into being in
1963 with the setting up of the Unit Trust of India (UTI).
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Dr. Sandeep Bansal, Deepak Garg and Sanjeev K Saini (2012), have studied
Impact of Sharpe Ratio & Treynor’s Ratio on Selected Mutual Fund Schemes. This
paper examines the performance of selected mutual fund schemes, that the risk profile
of the aggregate mutual fund universe can be accurately compared by a simple market
index that offers comparative monthly liquidity, returns, systematic & unsystematic
risk and complete fund analysis by using the special reference of Sharpe ratio and
Treynor’s ratio.
Dr. K. Veeraiah and Dr. A. Kishore Kumar (Jan 2017), conducted a research on
Comparative Performance Analysis of Select Indian Mutual Fund Schemes. This
study analysis the performance of Indian owned mutual funds and compares their
performance. The performance of these funds was analysed using a five year NAVs
and portfolio allocation. Findings of the study reveals that, mutual funds out perform
naïve investment. Mutual funds as a medium-to-long term investment option are
preferred as a suitable investment option by investors.
Dr. Yogesh Kumar Mehta (Feb 2012), has studied Emerging Scenario of Mutual
Funds in India: An Analytical Study of Tax Funds. The present study is based on
selected equity funds of public sector and private sector mutual fund. Corporate
and Institutions who form only 1.18% of the total number of investors accounts in
the MFs industry, contribute a sizeable amount of Rs. 2,87,108.01 crore which is
56.55% of the total net assets in the MF industry. It is also found that MFs did not
prefer debt segment.
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CHAPTER-III
RESEARCH
METHODOLOGY
RESEARCH METHODOLOGY
PRIMARY DATA:
Data that has been generated by the researcher himself/herself, surveys, interviews,
experiments, specially designed for understanding and solving the research problem at
hand
 Primary data is collected from the Execute of the organization
SECONDARY DATA:
Secondary data refers to data that is collected by someone other than the
primary user. Common sources of secondary data for social science
include censuses, information collected by government departments,
organizational records and data that was originally collected for other
research purposes.
⮚ Website
⮚ HDFC BANK Journals
⮚ Security Analysis
⮚ Brochures
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CHAPTER-IV
THEORETICAL
FRAME WORK
THEORETICAL FRAME WORK
Mutual funds are financial intermediaries which collect the savings of

investors and invest them in a large and well diversified portfolio of
securities such as money market instruments, corporate and Government
bonds and equity shares of joint stock companies. A mutual fund is a pool
of commingle funds invested by different investors, who have no contact
with each other. Mutual funds are conceived as institutions for providing
small investors with avenues of investment in the capital market. Since
small investors generally do not have adequate time, knowledge,
experience and resources for directly accessing the capital market, they
have to rely on an intermediary which undertakes. By pooling their assets
through mutual funds, investors achieve economies of scale.
A mutual fund is nothing but a form of collective investment. It is formed

by the coming together of a number of investors who transfer their surplus
funds to a professionally qualifies organization to manage it. To get the
surplus funds from investors, the fund adopts a simple technique. Each
fund is divided into a small fraction called ‘Units’ of equal value. Each
investor is allocated units in proportion to the size of his investment. Thus,
every investor, whether big or small, will have a stake in the fund and can
enjoy the wide portfolio of the investment held by the fund. Hence, mutual
funds enable millions of small and large investors to participate in and
derive the benefit of the capital market growth. It has emerged as a
popular vehicle of creation of wealth due to high return, lower cost and
diversified risk.
The securities and Exchange Board of India (Mutual funds) Regulations,
1993 defines a mutual fund as “A fund established in the form of a trust by
a sponsor, to raise money by the trustees through the sale of units to the
public, under one or more schemes, for investing in securities in
accordance with these regulations”.
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Concept of Mutual Fund
A Mutual Fund is a trust registered with the Securities and Exchange

Board of India (SEBI) which pools up the money from
individual/corporate investors and invests the same on behalf of the
investors/units’ holders, in equity shares, government securities, bonds,
call money market etc. The income earned through these investments and
the capital appreciations realized are shared by its unit holders in
proportion to the number of units owned by them. This pooled income is
professionally managed on behalf the unit-holders, and each investor
holds a proportion of the portfolio.
Operational flow of Mutual Fund
The following diagram depicts the operational flow of Mutual Fund

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Operational flow of Mutual Fund
Parties to Mutual fund
The following diagram illustrates various entities involve in organizational

structure of mutual fund:
Parties of Mutual Fund
Investors
Every investor, given his/her financial position and personal disposition,

has a certain inclination to take risk. The hypothesis is that by taking an
incremental risk, it would be possible for the investor to earn an
incremental return.
Mutual fund is a solution for investors who lack the time, the inclination
or the skills to actively manage their investment risk in individual
securities. They delegate this role to the mutual fund, while retaining the
right and the obligation to monitor their investments in the scheme.
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In the absence of a mutual fund option, the money of such “passive”

investors would lie either in bank deposits or other ‘safe’ investment
options, thus depriving them of the possibility of earning a better return.
Investing through a mutual fund would make economic sense for an
investor if his/her investment, over medium to long term.
Sponsors
Sponsor is the company, which sets up the Mutual Fund as per the
provisions laid down by the Securities and Exchange Board of India
(SEBI). SEBI mainly fixes the criteria of sponsors based on sufficient
experience, net worth, and past track record.
Asset Management Company (AMC)
The AMC manages the funds of the various schemes and employs a
large number of professionals for investment, research and agent
servicing. The AMC also comes out with new schemes periodically. It
plays a key role in the running of mutual fund and operates under the
supervision and guidance of the trustees. An AMC’s income comes from
the management fees, it charges for the schemes it manages.
An AMC has to employ people and bear all the establishment costs that
are related to its activity, such as for the premises, furniture, computers
and other assets, etc. So long as the income through management fees
covers its expenses, an AMC is economically viable. SEBI has issued the
following guidelines for the formation of AMCs:
 An AMC should be headed by an independent non-interested and

non-executive chairman.
 The managing director and other executive staff should be full-
time employees of AMC.
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 The board of directors shall not be entitled to any remuneration

other than the sitting fees.
 The AMCs will not be permitted to conduct other activities such as
merchant banking or issue management.
Trustees
Trustees are an important link in the working of any mutual fund. They are
responsible for ensuring that investors’ interests in a scheme are taken care
of properly. They do this by a constant monitoring of the operations of the
various schemes. In return for their services, they are paid trustee fees,
which are normally charged to the scheme.
Distributors
Distributors earn a commission for bringing investors into the schemes of

a mutual fund. This commission is an expense for the scheme. Depending
on the financial and physical resources at their disposal, the distributors
could be:
a) Tier 1 distributors who have their own or franchised network

reaching out to investors all across the country; or
b) Tier 2 distributors who are generally regional players with
some reach within their region; or
c) Tier 3 distributors who are small and marginal players with
limited reach.
The distributors earn a commission from the AMC.
Registrars
An investor’s holding in mutual fund schemes is typically tracked by the

schemes Registrar and Transfer Agent. Some AMCs prefer to handle this
role on their own instead of appointing R & T.
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The Registrar or the AMC as the case may be maintains an account of the
investor’s investments and disinvestments from the schemes.
Requests to invest more money into a scheme or to redeem money against

existing investments in a scheme are processed by the R & T.
Custodian
The custodian maintains custody of the securities in which the scheme
invests. This ensures an ongoing independent record of the investments
of the scheme. The custodian also follows up on various corporate
actions, such as rights, bonus and dividends declared by investee
companies. At present, when the securities are being dematerialized, the
role of the depository for such independent record of investments is
growing. No custodian in which the sponsor or its associates hold 50
percent or more of the voting rights of the share capital of the custodian
or where 50 per cent or more of the directors of the custodian represent
the interest of the sponsor or its associates shall act as custodian for a
mutual fund constituted by the same sponsor or any of its associates or
subsidiary company.
TYPES
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TYPES OF MUTUAL FUND
1. Open-End Funds
Funds that can sell and purchase units at any point in time are classified as
Open-end Funds. The fund size (corpus) of an open-end fund is variable
(keeps changing) because of continuous selling (to investors) and
repurchases (from the investors) by the fund. An open-end fund is not
required to keep selling new units to the investors at all times but is
required to always repurchase, when an investor wants to sell his units.
The NAV of an open-end fund is calculated every day.
2.Closed-End Funds
Funds that can sell a fixed number of units only during the New Fund
Offer (NFO) period are known as Closed-end Funds. The corpus of a
Closed-end Fund remains unchanged at all times. After the closure of the
offer, buying and redemption of units by the investors directly from the
Funds is not allowed. However, to protect the interests of the investors,
SEBI provides investors with two avenues to liquidate their positions.
3.Load Funds/no-load funds

a. Load Funds
Mutual Funds incur various expenses on marketing, distribution,

advertising, portfolio churning & fund manager’s salary. Many funds
recover these expenses from the investors in the form of load. These funds
are known as Load Funds. A load fund may impose following types of
loads on the investors:
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b. Entry Load
It refers to the load charged to an investor at the time of his entry into a
scheme. Entry load is deducted from the investor’s contribution amount to
the fund.
c. Exit Load
It is imposed on an investor when he redeems his units (exits from the

scheme). Exit load is deducted from the redemption proceeds to an
outgoing investor.
d. Deferred Load
Deferred load is charged to the scheme over a period of time.
e. Contingent Deferred Sales Charge (CDSS)
In some schemes, the percentage of exit load reduces as the investor stays
longer with the fund.
2. No-load Funds
All those funds that do not charge any of the above mentioned loads are
known as No-load Funds.
3. Tax-exempt Funds/ Non-Tax-exempt Funds

a. Tax-exempt Funds
Funds that invest in securities free from tax are known as Tax-exempt Funds.
All open-end equity oriented funds are exempt from distribution tax (tax for
distributing income to investors).
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b. Non-Tax-exempt Funds
Funds that invest in taxable securities are known as Non-Tax-exempt Funds.
In India, all funds, except open-end equity oriented funds are liable to pay tax
on distribution income.
Profits arising out of sale of units by an investor within 12 months of

purchase are categorized as short-term capital gains, which are taxable. Sale
of units of an equity oriented fund is subject to Securities Transaction Tax
(STT). STT is deducted from the redemption proceeds to an investor.
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3. Equity Funds
Equity funds are considered to be the more risky funds as compared to
other fund types, but they also provide higher returns than other funds. It
is advisable that an investor looking to invest in an equity fund should
invest for long term i.e. for 3 years or more. There are different types of
equity funds each falling into different risk bracket. In the order of
decreasing risk level, there are following types of equity funds:
1. Aggressive Growth Funds
In Aggressive Growth Funds, fund managers aspire for maximum capital

appreciation and invest in less researched shares of speculative nature. It is
because of speculative investments Aggressive Growth Funds become
more volatile and this prone to higher risk than other equity funds.
a. Growth Funds
Growth Funds also invest for capital appreciation (with time horizon of 3
to 5 years) but they are different from Aggressive Growth Funds in the
sense that they invest in companies that are expected to outperform the
market in the future. Without entirely adopting speculative strategies,
Growth Funds invest in those companies that are expected to post above
average earnings in the future.
b. Specialty Funds
Specialty Funds have stated criteria for investments and their portfolio
comprises of only those companies that meet their criteria. Criteria for
some specialty funds could be to invest/not to invest in particular
regions/companies. Speciality funds are concentrated and thus are
comparatively riskier than diversified funds. There are following types of
specialty funds:
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c. Sector Funds
Equity funds that invest in a particular sector/industry of the market are
known as Sector Funds. The exposure of these funds is limited to a
particular sector (say Information Technology, Auto, Banking,
Pharmaceuticals or Fast Moving Consumer Goods) which is why they are
more risky than equity funds that invest in multiple sectors.
d. Foreign Securities Funds
Foreign Securities Equity Funds have the option to invest in one or more
foreign companies. Foreign securities funds achieve international
diversification and hence they are less risky than sector funds. However,
foreign securities funds are exposed to foreign exchange rate risk and
country risk.
e. Mid-Cap or Small-Cap Funds
Funds that invest in companies having lower market capitalization than

large capitalization companies are called Mid-Cap or Small-Cap Funds.
Market capitalization of Mid-Cap companies is less than that of big, blue
chip companies (less than Rs. 2500 crores but more than Rs. 500 crores)
and Small-Cap companies have market capitalization of less than Rs. 500
crores.
Market Capitalization of a company can be calculated by multiplying the

market price of the company's share by the total number of its outstanding
shares in the market. The shares of Mid-Cap or Small-Cap Companies are
not as liquid as of Large-Cap Companies which gives rise to volatility in
share prices of these companies and consequently, investment gets risky.
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4. Diversified Equity Funds

Except for a small portion of investment in liquid money market,
diversified equity funds invest mainly in equities without any
concentration on a particular sectors. These funds are well diversified and
reduce sector-specific or company-specific risk. However, like all other
funds diversified equity funds too are exposed to equity market risk. One
prominent type of diversified equity fund in India is Equity Linked
Savings Schemes (ELSS). As per the mandate, a minimum of 90% of
investments by ELSS should be in equities at all times.
1. Equity Index Funds
Equity Index Funds have the objective to match the performance of a

specific stock market index. The portfolio of these funds comprises of the
same companies that form the index and is constituted in the same
proportion as the index. Equity index funds that follow broad indices (like
S&P CNX Nifty, Sensex) are less risky than equity index funds that
follow narrow sectoral indices (like BSEBANKEX or CNX Bank Index
etc).
2. Debt/Income Funds
Funds that invest in medium to long-term debt instruments issued by

private companies, banks, financial institutions, governments and other
entities belonging to various sectors (like infrastructure companies etc.)
are known as Debt / Income Funds. Debt funds are low risk profile funds
that seek to generate fixed current income (and not capital appreciation) to
investors. In order to ensure regular income to investors, debt (or income)
funds distribute large fraction of their surplus to investors. To minimize
the risk of default, debt funds usually invest in securities from issuers who
are rated by credit rating agencies and are considered to be of "Investment
Grade".
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3. Diversified Debt Funds
Debt funds that invest in all securities issued by entities belonging to all
sectors of the market are known as diversified debt funds
. The best feature of diversified debt funds is that investments are properly
diversified into all sectors which results in risk reduction. Any loss
incurred, on account of default by a debt issuer is shared by all investors
which further reduces risk for an individual investor.
4. Focused Debt Funds
Unlike diversified debt funds, focused debt funds are narrow focus funds
that are confined to investments in selective debt securities, issued by
companies of a specific sector or industry or origin. Some examples of
focused debt funds are sector, specialized and offshore debt funds, funds
that invest only in Tax Free Infrastructure or Municipal Bond. Although
not yet available in India, these funds are conceivable and may be offered
to investors very soon.
A. Assured Return Funds
Although it is not necessary that a fund will meet its objectives or provide
assured returns to investors, but there can be funds that come with a lock-
in period and offer assurance of annual returns to investors during the
lock-in period. Any shortfall in returns is suffered by the sponsors or the
Asset Management Companies (AMCs). These funds are generally debt
funds and provide investors with a low-risk investment opportunity.
However, the security of investments depends upon the net worth of the
guarantor (whose name is specified in advance on the offer document).
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a. Fixed Term Plan Series
Fixed Term Plan Series usually are closed-end schemes having short term
maturity period (of less than one year) that offer a series of plans and issue
units to investors at regular intervals. Unlike closed-end funds, fixed term
plans are not listed on the exchanges. Fixed term plan series usually invest
in debt / income schemes and target short-term investors. The objective of
fixed term plan schemes is to gratify investors by generating some
expected returns in a short period. Also known as Government Securities
in India, Gilt Funds invest in government papers (named dated securities)
having medium to long term maturity period. Issued by the Government of
India, these investments have little credit risk (risk of default) and provide
safety of principal to the investors. However, like all debt funds, gilt funds
too are exposed to interest rate risk. Interest rates and prices of debt
securities are inversely related and any change in the interest rates results
in a change in the NAV of debt/gilt funds in an opposite direction.
4. Money Market/Liquid Funds
Money market / liquid funds invest in short-term (maturing within one

year) interest bearing debt instruments. These securities are highly liquid
and provide safety of investment, thus making money market / liquid
funds the safest investment option when compared with other mutual fund
types. However, even money market / liquid funds are exposed to the
interest rate risk. The typical investment options for liquid funds include
Treasury Bills (issued by governments), Commercial papers (issued by
companies) and Certificates of Deposit (issued by banks).
5. Hybrid Funds
As the name suggests, hybrid funds are those funds whose portfolio
includes a blend of equities, debts and money market securities. Hybrid
funds have an equal proportion of debt and equity in their portfolio.
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CHAPTER-V
INDUSTRY PROFILE
&
COMPANY PROFILE
A bank is a financial institution that accepts deposits and channels those deposits into
lending activities. Banks primarily provide financial services to customers while
enriching investors. Government restrictions on financial activities by banks vary over
time and location. Banks are important players in financial markets and offer services
such as investment funds and loans. In some countries such as Germany, banks have
historically owned major stakes in industrial corporations while in other countries
such as the United States banks are prohibited from owning non-financial companies.
In Japan, banks are usually the nexus of a cross shareholding entity known as the
keiretsu. In France, bancassurance is prevalent, as most banks offer insurance services
(and now real estate services) to their clients.
Introduction
India’s banking sector is constantly growing. Since the turn of the century, there has
been a noticeable upsurge in transactions through ATMs, and also internet and mobile
banking.
Following the passing of the Banking Laws (Amendment) Bill by the Indian
Parliament in 2019, the landscape of the banking industry began to change. The bill
allows the Reserve Bank of India (RBI) to make final guidelines on issuing new
licenses, which could lead to a bigger number of banks in the country. Some banks
have already received licences from the government, and the RBI's new norms will
provide incentives to banks to spot bad loans and take requisite action to keep rogue
borrowers in check.
Over the next decade, the banking sector is projected to create up to two million new
jobs, driven by the efforts of the RBI and the Government of India to integrate
financial services into rural areas. Also, the traditional way of operations will slowly
give way to modern technology.
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Market size
Total banking assets in India touched US$ 1.8 trillion in FY19and are anticipated to
cross US$ 28.5 trillion in FY25.
Bank deposits have grown at a compound annual growth rate (CAGR) of 21.2 per cent
over FY06–18. Total deposits in FY19were US$ 1,274.3 billion.
Total banking sector credit is anticipated to grow at a CAGR of 20.1 per cent (in terms
of INR) to reach US$ 2.4 trillion by 2021.
In FY17, private sector lenders witnessed decreasable growth in credit cards and
personal loan businesses. HDFC Bank witnessed 171.6 per cent growth in personal
loan disbursement in FY17, as per a report by Emkay Global Financial Services. Axis
Bank's personal loan business also rose 49.8 per cent and its credit card business
expanded by 31.1 per cent.
Investments
Bengaluru-based software services exporter Mphasis Ltd has bagged a five-year

contract from Punjab National Bank (PNB) to set up the bank’s contact centres in
Mangalore and Noida (UP). Mphasis will provide support for all banking products and
services, including deposits operations, lending services, banking processes, internet
banking, and account and card-related services. The company will also offer services
in multiple languages.
Microfinance companies have committed to setting up at least 30 million bank

accounts within a year through tie-ups with banks, as part of the Indian government’s
financial inclusion plan. The commitment was made at a meeting of representatives of
25 large microfinance companies and banks and government representatives, which
included financial services secretary Mr GS Sandhu.
26
Export-Import Bank of India (Exim Bank) will increase its focus on supporting project
exports from India to South Asia, Africa and Latin America, as per Mr Yaduvendra
Mathur, Chairman and MD, Exim Bank. The bank has moved up the value chain by
supporting project exports so that India earns foreign exchange. In 2019–18, Exim
Bank lent support to 85 project export contracts worth Rs 24,255 crore (US$ 3.96
billion) secured by 47 companies in 23 countries.
Government Initiatives
The RBI has given banks greater flexibility to refinance current long-gestation project
loans worth Rs 1,000 crore (US$ 173.42 million) and more, and has allowed partial
buyout of such loans by other financial institutions as standard practice. The earlier
stipulation was that buyers should purchase at least 50 per cent of the loan from the
existing banks. Now, they get as low as 25 per cent of the loan value and the loan will
still be treated as ‘standard’.
The RBI has also relaxed norms for mortgage guarantee companies (MGC) enabling
these firms to use contingency reserves to cover for the losses suffered by the
mortgage guarantee holders, without the approval of the apex bank. However, such a
measure can only be initiated if there is no single option left to recoup the losses.
SBI is planning to launch a contact-less or tap-and-go card facility to make payments

in India. Contact-less payment is a technology that has been adopted in several
countries, including Australia, Canada and the UK, where customers can simply tap or
wave their card over a reader at a point-of-sale terminal, which reads the card and
allows transactions.
SBI and its five associate banks also plan to empower account holders at the bottom of
the social pyramid with a customer call facility. The proposed facility will help
customers get an update on available balance, last five transactions and cheque book
request on their mobile phones.
27
History
Origin of the word
The name bank derives from the Italian word banco "desk/bench", used during the
Renaissance by Jewish Florentine bankers, who used to make their transactions above
a desk covered by a green tablecloth. However, there are traces of banking activity
even in ancient times, which indicates that the word 'bank' might not necessarily come
from the word 'banco'.
In fact, the word traces its origins back to the Ancient Roman Empire, where
moneylenders would set up their stalls in the middle of enclosed courtyards called
macella on a long bench called a bancu, from which the words banco and bank are
derived. As a moneychanger, the merchant at the bancu did not so much invest money
as merely convert the foreign currency into the only legal tender in Rome—that of the
Imperial Mint.
The earliest evidence of money-changing activity is depicted on a silver drachm coin

from ancient Hellenic colony Trapeze on the Black Sea, modern Trabzon, c. 350–325
BC, presented in the British Museum in London. The coin shows a banker's table
(trapeze) laden with coins, a pun on the name of the city.
In fact, even today in Modern Greek the word Trapeze (Τράπεζe) means both a table
and a bank.
Traditional banking activities
Banks act as payment agents by conducting checking or current accounts for

customers, paying cheques drawn by customers on the bank, and collecting cheques
deposited to customers' current accounts. Banks also enable customer payments via
other payment methods such as telegraphic transfer, EFTPOS, and ATM.
28
Banks borrow money by accepting funds deposited on current accounts, by accepting
term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend
money by making advances to customers on current accounts, by making instalment
loans, and by investing in marketable debt securities and other forms of money
lending.
Banks provide almost all payment services, and a bank account is considered
indispensable by most businesses, individuals and governments. Non-banks that
provide payment services such as remittance companies are not normally considered
an adequate substitute for having a bank account.
Banks borrow most funds from households and non-financial businesses, and lend
most funds to households and non-financial businesses, but non-bank lenders provide
a significant and in many cases adequate substitute for bank loans, and money market
funds, cash management trusts and other non-bank financial institutions in many cases
provide an adequate substitute to banks for lending savings to.
Entry regulation
Currently in most jurisdictions commercial banks are regulated by government entities

and require a special bank licence to operate.
Usually the definition of the business of banking for the purposes of regulation is
extended to include acceptance of deposits, even if they are not repayable to the
customer's order—although money lending, by itself, is generally not included in the
definition.
Unlike most other regulated industries, the regulator is typically also a participant in
the market, i.e. a government-owned (central) bank. Central banks also typically have
a monopoly on the business of issuing banknotes. However, in some countries this is
not the case. In the UK, for example, the Financial Services Authority licences banks,
and some commercial banks (such as the Bank of Scotland) issue their own banknotes
in addition to those issued by the Bank of England, the UK government's central bank.
29
Law of banking
Banking law is based on a contractual analysis of the relationship between the bank
(defined above) and the customer—defined as any entity for which the bank agrees to
conduct an account.
The law implies rights and obligations into this relationship as follows:
1. The bank account balance is the financial position between the bank and the
customer: when the account is in credit, the bank owes the balance to the
customer; when the account is overdrawn, the customer owes the balance to
the bank.
2. The bank agrees to pay the customer's cheques up to the amount standing to
the credit of the customer's account, plus any agreed overdraft limit.
3. The bank may not pay from the customer's account without a mandate from
the customer, e.g. a cheque drawn by the customer.
4. The bank agrees to promptly collect the cheques deposited to the customer's
account as the customer's agent, and to credit the proceeds to the customer's
account.
5. The bank has a right to combine the customer's accounts, since each account is
just an aspect of the same credit relationship.
6. The bank has a lien on cheques deposited to the customer's account, to the
extent that the customer is indebted to the bank.
7. The bank must not disclose details of transactions through the customer's
account—unless the customer consents, there is a public duty to disclose, the
bank's interests require it, or the law demands it.
8. The bank must not close a customer's account without reasonable notice, since
cheques are outstanding in the ordinary course of business for several days.
These implied contractual terms may be modified by express agreement between the
customer and the bank. The statutes and regulations in force within a particular
jurisdiction may also modify the above terms.
30
Some types of financial institution, such as building societies and credit unions, may
be partly or wholly exempt from bank licence requirements, and therefore regulated
under separate rules.
The requirements for the issue of a bank licence vary between jurisdictions but
typically include:
1. Minimum capital
2. Minimum capital ratio
3. 'Fit and Proper' requirements for the bank's controllers, owners, directors,
and/or senior officers
4. Approval of the bank's business plan as being sufficiently prudent and
plausible.
Types of banks
Banks' activities can be divided into retail banking, dealing directly with individuals
and small businesses; business banking, providing services to mid-market business;
corporate banking, directed at large business entities; private banking, providing
wealth management services to high net worth individuals and families; and
investment banking, relating to activities on the financial markets. Most banks are
profit-making, private enterprises. However, some are owned by government, or are
non-profit organizations.
Central banks are normally government-owned and charged with quasi-regulatory

responsibilities, such as supervising commercial banks, or controlling the cash interest
rate. They generally provide liquidity to the banking system and act as the lender of
last resort in event of a crisis.
Types of retail banks
 Commercial bank: After the Great Depression, the U.S. Congress required that
banks only engage in banking activities, whereas investment banks were
limited to capital market activities. Since the two no longer have to be under
separate ownership, some use the term "commercial bank" to refer to a bank
that mostly deals with deposits and loans.
31
 Community Banks: locally operated financial institutions that empower
employees to make local decisions to serve their customers and the partners.
 Community development banks: regulated banks that provide financial
services and credit to under-served markets or populations.
 Postal savings banks: savings banks associated with national postal systems.
 Private banks: banks that manage the assets of high networth individuals.
 Offshore banks: banks located in jurisdictions with low taxation and
regulation. Many offshore banks are essentially private banks.
 Savings bank: in Europe, savings banks take their roots in the 20th or
sometimes even 20th century. Their original objective was to provide easily
accessible savings products to all strata of the population. In some countries,
savings banks were created on public initiative; in others, socially committed
individuals created foundations to put in place the necessary infrastructure.
Nowadays, European savings banks have kept their focus on retail banking:
payments, savings products, credits and insurances for individuals or small and
medium-sized enterprises. Apart from this retail focus, they also differ from
commercial banks by their broadly decentralised distribution network,
providing local and regional outreach—and by their socially responsible
approach to business and society.
 Building societies and Landbanks: institutions that conduct retail banking.
 Ethical banks: banks that prioritize the transparency of all operations and make
only what they consider to be socially-responsible investments.
 Islamic banks: Banks that transact according to Islamic principles.
32
Types of investment banks
 Investment banks "underwrite" (guarantee the sale of) stock and bond issues,
trade for their own accounts, make markets, and advise corporations on capital
market activities such as mergers and acquisitions.
 Merchant banks were traditionally banks which engaged in trade finance. The
modern definition, however, refers to banks which provide capital to firms in
the form of shares rather than loans. Unlike venture capital firms, they tend not
to invest in new companies.
Both combined
 Universal banks, more commonly known as financial services companies,

engage in several of these activities. These big banks are very diversified
groups that, among other services, also distribute insurance— hence the term
bancassurance, a portmanteau word combining "banque or bank" and
"assurance", signifying that both banking and insurance are provided by the
same corporate entity.
Other types of banks
 Islamic banks adhere to the concepts of Islamic law. This form of banking
revolves around several well-established principles based on Islamic canons.
All banking activities must avoid interest, a concept that is forbidden in Islam.
Instead, the bank earns profit (markup) and fees on the financing facilities that
it extends to customers.
33
COMPANY PROFILE
The HDFC Bank was incorporated on August 1994 by the name of 'HDFC Bank
Limited', with its registered office in Mumbai, India. HDFC Bank commenced
operations as a Scheduled Commercial Bank in January 1995. The Housing
Development Finance Corporation (HDFC) was amongst the first to receive an 'in
principle' approval from the Reserve Bank of India (RBI) to set up a bank in the
private sector, as part of the RBI's liberalization of the Indian Banking Industry in
1994.
HISTORY
HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable

network of over 1416 branches spread over 550 cities across India. All branches are
linked on an online real–time basis. Customers in over 500 locations are also serviced
through Telephone Banking. The Bank also has a network of about over 3382
networked ATMs across these cities.
The promoter of the company HDFC was incepted in 1977 is India's premier housing
finance company and enjoys an impeccable track record in India as well as in
international markets. HDFC has developed significant expertise in retail mortgage
loans to different market segments and also has a large corporate client base for its
housing related credit facilities. With its experience in the financial markets, a strong
market reputation, large shareholder base and unique consumer franchise, HDFC was
ideally positioned to promote a bank in the Indian environment.
The shares are listed on the Bombay Stock Exchange Limited and The National Stock
Exchange of India Limited. The Bank's American Depository Shares ( ADS ) are
listed on the New York Stock Exchange (NYSE) under the symbol 'HDB' and the
Bank's Global Depository Receipts (GDRs) are listed on Luxembourg Stock
Exchange.
On May 23, 2008, the amalgamation of Centurion Bank of Punjab with HDFC Bank
was formally approved by Reserve Bank of India to complete the statutory and
regulatory approval process. As per the scheme of amalgamation, shareholders of
CBOP received 1 share of HDFC Bank for every 29 shares of CBOP.
34
Mergers and acquisitions
 HDFC Bank merged with Times Bank in February 2000. This was the first merger
of two private banks in the New Generation private sector banks category. Times
Banwas established by Bennett, Coleman and Co. Ltd., commonly known as The
Times Group, India's largest media conglomerate.
 In 2008, Centurion Bank of Punjab (CBOP) was acquired by HDFC Bank. HDFC
Bank's board approved the acquisition of CBOP for ₹95.1 billion in one of the
largest mergers in the financial sector in India.
 In 2021, the bank acquired a 9.99% stake in FERBINE, an entity promoted
by Tata Group, to operate a Pan-India umbrella entity for retail payment systems,
similar to National Payments Corporation of India.
 September 2021, the bank partnered to launch a range of credit cards powered
by the global card network Visa. with Paytm
 On April 4 2022, HDFC Bank announced merger with HDFC Limited.
The merged entity now holds a strong deposit base of around Rs. 1,22,000 crore and
net advances of around Rs. 89,000 crore. The balance sheet size of the combined
entity would be over Rs. 1,63,000 crore. The amalgamation added significant value to
HDFC Bank in terms of increased branch network, geographic reach, and customer
base, and a bigger pool of skilled manpower.
In a milestone transaction in the Indian banking industry, Times Bank Limited

(another new private sector bank promoted by Bennett, Coleman & Co. / Times
Group) was merged with HDFC Bank Ltd., effective February 26, 2000. This was the
first merger of two private banks in the New Generation Private Sector Banks. As per
the scheme of amalgamation approved by the shareholders of both banks and the
Reserve Bank of India, shareholders of Times Bank received 1 share of HDFC Bank
for every 5.75 shares of Times Bank
HDFC also has a robust deposits mobilization program. HDFC has been able to
mobilize deposits from over 10 lakh depositors. Outstanding deposits grew from Rs. 1,458 crores in
March 1994 to Rs. 24,625 crores in March 2011. In addition, HDFC has received
'AAA'r a t i n g f o r i t s D e p o s i t p r o d u c t s f o r h i g h e s t s a f e t y f r o m b o t h C
R I S I L a n d I C R A f o r seventeen consecutive years. Over the years, HDFC has
emerged as a financial conglomerate with its presence in theentire gamut of financial
services including banking, insurance (life and non-life), asset management, real estate
venture capital and more recently education loans. today, HDFC is recognized as one of
the Best Managed Companies in India and is a model housing finance company
for developing countries with nascent housing
35
financemarkets. HDFC has undertaken several consultancy assignments in v
arious countries across Asia, Africa and East Europe.
to support and establish their housing finance institutions. at HDFC, 'Corporate

Social Responsibility' has always been an evolving concept, akin toits 'learning by
doing' philosophy. As part of its social objectives, HDFC has always
endeavored to contribute to economic development and social upliftment of the
weaker sections of society and has professionally nurtured each of its social
initiative as an investment. HDFC has undertaken development oriented work and supported
several social initiatives in the areas of education, child welfare, medical research, welfare for the
elderly and the handicapped among several others HDFC is how millions of Indian families spell the
word 'Home' as the brand not only offers Housing Finance, but also
The HDFC Advantage
 owners of Housing Finance in India with over 34 years of lending experience.

 Widest range of home loan & deposit products.
 Vast network of over 304 interconnected offices which includes
3 internationaloffices.
 Most experienced and empowered personnel to ensure smooth & easy processing.
 Online loan application facility at www.hdfc.com and across-the-counter
servicesfor new deposits, renewals & repayments.
 Counselling and advisory services for acquiring a property.
 Flexible loan repayment options
Background
HDFC was incorporated in 1977 by Mr. Hasmukhbhai Parekh
with the primary objectiveof meeting a social need - that of promoting home
ownership by providing long-term finance to households. The launching of HDFC
was meant to be one small step in dealingwith the availability of housing
accommodation in India which was then virtually non-existent. HDFC as a pioneer
launched India's first specialized home loan company with aninitial capital of Rs. 100
million.
36
Business Objective of HDFC Ltd.
The primary objective is to enhance residential housing stock in the country through
the provision of housing finance in a systematic and professional manner, and to prom
otehome ownership. The aim is to increase the flow of resources to the
housing sector byintegrating the housing finance sector with the overall domestic financial
markets.
 Organizational Goals:
 Develop close relationships with individual households.
 Maintain our position as the premier housing finance institution in the country.
 Transform ideas into viable and creative solutions.
 To grow through diversification by gaining leverage from our existing client base.
 To nurture the values and ethos of Brand HDFC through all its Subsidiaries
and Associate Companies.
 Growth strategies
 Increase the return on equity each year by 1 percentage point in order to
maximise shareholder value.
 Maintain gross Non-Performing Assets (NPA’s) below 1%
Awards And Rewards
 HDFC Bank adjudged 'Best Private Bank in India' at the Global Private

Banking Awards 2021
 HDFC Bank adjudged Best for wealth transfer - succession planning in India
2021 by Asia money Asia Private Banking Awards 2021
 HDFC Bank named ‘Best Bank in India’ at Euromoney Awards 2021
 HDFC Bank ranks No. 1 in Mass Affluent category at Euromoney Private
Banking and Wealth Management Survey 2021
 HDFC Bank has been adjudged ‘India’s Best Bank’ by Euromoney Awards
for Excellence 2020.
 HDFC Bank named India’s Best Domestic Bank by Asia money.
 HDFC Bank has been adjudged ‘Best Private Bank in India’ at The Banker
Global Private Banking Awards 2018.
 HDFC Bank has been ranked no. 1 bank in India in the Forbes’ World’s Best
Banks report
 HDFC Bank ranks No. 1 in Asset Management category at Euromoney
Private Banking and Wealth Management Survey 2019
37
 Euromoney Survey 2018 - Best Private Banking services for Super Affluent
Clients
 Best Bank For Financial Inclusion - UTI Mutual fund CNBC TV 18 Financial
Advisory Awards 2017
 UTI MF & CNBC- TV18 Financial Advisory Awards - Best Performing Bank
– Private 2018-19.
 Euromoney Trade Finance Survey 2019 - Best Service ( Asian Banks only) –
India & Market Leader ( Asian Banks only) - India
 The Banker - Bank of the year TB 2018 - The Banker - Bank of the year
award - Best Private Bank in India 2018.
VISSION
 "To be the premier financial partner in ensuring sustainable housing

and living standards." Committed to provide financial solutions for
sustainable living and assist entrepreneurs in value addition.
MISSION
 HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to

build sound customer franchises across distinct businesses so as to be the
preferred provider of banking services for target retail and wholesale customer
segments, and to achieve healthy growth in profitability, consistent with the
bank's risk appetite. The bank is committed to maintain the highest level of
ethical standards, professional integrity, corporate governance and regulatory
compliance.
38
CHAPTER-VI
DATA ANALYSIS
AND
INTERPRETATION
DATA ANALYSIS AND INTERPRETATION
Secondary data of the following select 4 AMC’s is collected from the

websites and analysed:
1. UNIT TRUST OF INDIA (UTI)

2. ICICI PRUDENTIAL
3. STATE BANK OF INDIA (SBI)
4. HDFC BANK
Three funds namely - tax saving funds, large cap funds, and mid cap funds
and under them only funds were chosen to study. The schemes were
selected based on CRISIL ranking. The analysis is mainly based on
secondary data.
Calculations
Average Return (formula: ƩR/N)
Standard deviation (formula: √Ʃd²/N)
Sharpe measure (formula: Rp-Rf/σp)

39
COMPAN I.TAX SAVING II. LARGE CAP III. MID CAP

Y FUNDS FUNDS FUNDS
1.UTI Tax saving-

UTI Equity long term 5.UTI Equity fund(G) 9.UTI Mid Cap(G)
fund(G)
ICICI 2.ICICI PRU Tax

6.ICICI PRU Focused 10.ICICI PRU Mid
PRUDENT saving- long term
Blue chip equity(G) Cap Fund(G)
IAL equity fund(G)
3.SBI Magnum Tax 7.SBI Blue Chip 11.SBI Magnum

SBI
gain(G) Fund(G) Mid Cap fund(G)
HDFC 4. HDFC Tax Saver 8. HDFC Equity fund 12. HDFC Mid cap
BANK (G) (G) fund(G)
40
TAX SAVING FUNDS COMPARISION
1. UTI Equity Tax Saving-Equity long term fund (G)
UTI Equity Tax Saving-Equity long term fund (G)
Year Return(R)% D d²
2017 -23.6 -34.22 1191.0084
2018 26.9 18.28 265.0384
2019 6.6 -4.02 18.1804
2020 40.8 30.20 910.8324
2021 2.4 -8.22 67.5684
ƩR= 53.1 Ʃd²= 2430.608
AVG RETURN ƩR/N=53.1/5 10.62%
22.0481
STANDARD DEVIATION(σ) √Ʃd²/N=2430.608/5
9%
SHARPE RATIO Rp-Rf/σp= 0.16
Note: ƩR is the total of return of 5 years
Rp = the expected return on the investor's portfolio

Rf = the risk-free rate of return
σp = the portfolio's standard deviation, a measure of risk
41
2. ICICI PRU Tax saving- Long term equity fund (G)
ICICI PRU Tax saving- Long term equity fund (G)
2017 -24.3 -39.68 1774.5024
2018 37.1 21.72 471.7584
2019 9.5 -5.88 34.5744
2020 50.5 35.12 1233.4164
2021 4.1 -11.28 127.2384
ƩR= 76.9 Ʃd²= 3441.488
17.38%
AVG RETURN ƩR/N=76.9/5
√Ʃd²/ 26.23543%
STANDARD DEVIATION
N=3441.488/5

42
SBI Magnum tax gain (G)
SBI Magnum tax gain (G)
2017 -23.8 -37.54 1609.2518
2018 34.1 20.36 416.5296
2019 6.2 -7.54 56.8518
2020 49.2 35.46 1257.4118
2021 3 -10.74 117.3476
ƩR= 68.7 Ʃd²= 3253.392
13.74%
AVG RETURN ƩR/N=68.7/5
STANDARD 25.5084%
√Ʃd²/N=3253.392/5
DEVIATION(σ)

43
2. HDFC Tax saver (G)
HDFC Tax saver (G)
Years Return(R)% D d²
2017 -19.3 -35.34 1248.9176
2018 30 13.96 194.8818
2019 9.6 -6.44 41.4736
2020 54.2 38.18 1656.2056
2021 5.7 -10.34 106.9176
ƩR= 68.7 Ʃd²= 3253.392
STANDARD
√Ʃd²/N=3253.392/5 24.69179%
DEVIATION(σ)

44
RETURN AND RISK ANALYSIS OF TAX SAVING FUNDS
Risk and Return analysis of Tax saving funds.
STANDARD
SCHEMES AVG RETURN
DEVIATION(RISK)
1.UTI Tax saving-Equity

10.62% 22.04%
long term fund(G)
2.ICICI PRU Tax saving-

17.38% 26.23%
long term equity fund(G)
3.SBI Magnum Tax gain(G) 13.74% 25.50%
4. HDFC Tax saver(G) 18.04% 24.691%

45
Return and Risk analysis of tax saving funds
Return & Risk analysis of tax saving

funds
AVG RETURN STANDARD DEVIATION(RISK)
26.23% 25.50% 24.69%

22.04%
Percentages
15.38% 16.04%
13.74%
10.62%
Companies
INTERPRETATION
From the above table and graph we found that HDFC tax saver scheme
has more return i.e., 18.04% as compared to UTI tax saving has less return
of 10.62%. ICICI PRU tax saving scheme has more risk i.e., 26.23%
whereas UTI is having less risk with 22.04.
46
SHARPE RATIO ANALYSIS OF TAX SAVING FUNDS
Sharpe ratio analysis of tax saving funds
SCHEMES Ratio RANK
1.UTI Tax saving-Equity long

0.16 4
term fund(G)
2.ICICI PRU Tax saving-

0.30 2
long term equity fund(G)
3.SBI Magnum Tax gain(G) 0.25 3
4.HDFCTax saver (G) 0.35 1

47
Sharpe ratio analysis of tax saving funds
Ratio
0.4
0.35
0.35
0.3
0.3
0.25
0.25
Percentages
0.2
0.15 0.14
0.1
0.05
Companies
Ratio
INTERPRETATION
From the above table and graph we can found that HDFC tax saver
scheme stands 1st as it has highest Sharpe ratio i.e., 0.35, ICICI PRU Tax
saving- long term equity fund(G) scheme stands 2nd with 0.3, 3rd SBI
magnum with 0.25 and 4th UTI with 0.16.
48
LARGE CAP FUNDS COMPARISON
3. UTI Equity fund (G)
2017 -19.5 -33 1089
2018 32.4 20.9 357.21
2019 7 -6.5 42.25
2020 46.8 33.3 1108.89
2021 0.8 -12.7 181.29
ƩR= 67.5 Ʃd²= 2758.64
UTI Equity fund (G)
AVERAGE RETURN ƩR/N=67.5/5 13.5
STANDARD DEVIATION √Ʃd²/N=2758.64/5 23.48889

49
ICICI PRU Focused blue chip equity (G)
4.ICICI PRU Focused blue chip equity (G)
Year Return(R)% d d²
821.395
2017 -18.5 -28.66
6
229.219
2018 27.3 17.16
6
2019 9.4 -2.76 7.6196
825.987
2020 40.9 28.74
6
175.251
2021 -0.3 -12.46
8
2039.47
ƩR= 60.8 Ʃd²=
2
50
AVG RETURN ƩR/N=60.8/5 12.18
STANDARD DEVIATION √Ʃd²/N=2039.472/5

20.1964

51
4. SBI Blue chip fund (G)
SBI Blue chip fund (G)
2017 -24.7 -39.78 1782.4484
2018 38.2 23.12 534.5344
2019 6.6 -8.48 71.9104
2020 47.4 32.32 1044.5824
2021 7.9 -7.20 51.5524
ƩR= 75.4 Ʃd²= 3285.028

52
5. HDFC Equity fund (G)
HDFC Equity fund (G)
2017 -22.2 -33.1 1095.61
2018 23.9 13 189
2019 8.4 -2.5 6.25
2020 39.7 28.8 829.44
2021 4.7 -6.2 38.44
ƩR= 54.5 Ʃd²= 2138.74
STANDARD
√Ʃd²/N=2138.74/5 20.68207
DEVIATION

53
RISK AND RETURN ANALYSIS OF LARGE CAP FUNDS
Risk and Return analysis of large cap funds
STANDARD
SCHEMES AVG RETURN
DEVIATION
5.UTI Equity fund(G) 13.5% 23.48%
6.ICICI PRU Focused Blue

12.18% 20.19%
chip equity(G)
7.SBI Blue Chip Fund(G) 17.08% 29.65%
8. HDFC Equity fund (G) 10.9% 20.68%

54
Return and Risk analysis of large cap funds
Return & Risk analysis of large cap funds

SCHEMES AVG RETURN STANDARD DEVIATION
29.65%
23.48%
20.19% 20.68%
Percentages
15.08%
13.50%
12.16%
10.90%
0 0 0 0
1 2 3 4
Companies
INTERPRETATION
From the above table and graph we can found that SBI Blue chip fund
scheme has more return i.e., 17.08% and also more risk i.e., 29.65%.
ICICI PRU Focused Blue chip equity (G) scheme has lowest risk i.e.,
20.19% with 12.18% risk.
55
SHARPE RATIO ANALYSIS OF LARGE CAP FUNDS
Sharpe ratio analysis of large cap funds
SCHEMES RATIO RANK
5.UTI Equity fund(G) 0.26 1
6.ICICI PRU Focused Blue chip

0.23 3
equity(G)
7.SBI Blue Chip Fund(G) 0.26 1
8. HDFCEquity fund (G) 0.19 4

56
Sharpe ratio analysis of large cap funds
RATIO
RATIO
0.26 0.26
0.23
0.17
Percentages
Companies
INTERPRETATION
From the above graph and table we found that UTI equity fund and SBI
Blue chip fund stands 1st as they has highest Sharpe ratio i.e., 0.26, then
ICICI PRU focused blue chip with 0.23 and HDFC with 0.19.
57
MID CAP FUNDS COMPARISION
6.UTI Mid cap fund (G)
UTI Mid cap fund (G)
2017 -24.7 -49.04 2404.9218
2018 41.8 19.46 304.8518
2019 9 -17.34 235.3176
2020 89.6 65.26 4258.8676
2021 6 -20.34 336.3556
ƩR= 121.7 Ʃd²= 7540.312

58
6. ICICI PRU Mid cap fund (G)
ICICI PRU mid cap fund (G)
2017 -32.8 -53.5 2862.25
2018 40.8 20.1 404.01
2019 6.3 -16.4 207.36
2020 84.3 63.6 4044.96
2021 4.9 -17.8 249.64
ƩR= 103.5 Ʃd²= 7768.22

59
7. SBI Magnum mid cap fund (G)
SBI Magnum mid cap fund (G)
2017 -26.3 -50.24 2524.0576
2018
48.3 24.36 593.4096
2019 12.3 -11.64 135.4896
2020 71.1 47.18 2224.0656
2021 16.3 -9.64 92.9296
ƩR= 119.7 Ʃd²= 5569.952
STANDARD DEVIATION √Ʃd²/N=5569.952/5 33.37649%

60
8. HDFC Mid cap fund(G)
HDFC Mid cap fund (G)
2017 -19.8 -42.38 1996.0644
2018 44.1 21.52 463.1104
2019 10.2 -12.38 173.2644
2020 71.7 49.12 2412.7744
2021 6.7 -17.88 252.1944
ƩR= 112.9 Ʃd²= 5077.388
STANDARD DEVIATION √Ʃd²/N=5077.388/5 31.86656%

61
RETURN AND RISK ANALYSIS OF MID CAP FUNDS
Return and Risk analysis of mid cap funds
STANDARD
SCHEMES AVG RETURN
DEVIATION
9.UTI Mid Cap(G) 24.34% 38.83%
10.ICICI PRU Mid Cap

20.7% 39.41%
Fund(G)
11.SBI Magnum Mid Cap

23.94% 33.37%
fund(G)
12. HDFC Mid cap fund(G) 22.58% 31.86%

62
Return and Risk analysis of mid cap funds
Return & Risk analysis of mid cap funds

AVG RETURN STANDARD DEVIATION
38.83% 39.41%
33.37%
31.86%
Percentages
24.34% 23.94%
22.58%
20.70%
Companies
INTERPRETATION
From the above graph we found that ICICI PRU mid cap fund scheme has
more risk i.e., 39.41% with less return that is 20.7%, next UTI mid cap
fund scheme has risk i.e., 38.83 % with 24.34% return, then SBI with
33.27% risk with 23.94% return and HDFC with lowest 31.86% risk and
22.58% return.
63
SHARPE RATIO ANALYSIS OF MID CAP FUNDS
Sharpe ratio analysis of mid cap funds
SCHEMES SHARPE RATIO RANK
9.UTI Mid Cap(G) 0.43 3
10.ICICI PRU Mid Cap Fund(G) 0.33 4
11.SBI Magnum Mid Cap fund(G) 0.49 1
12. HDFC Mid cap fund(G) 0.47 2

64
Sharpe ratio analysis of mid cap funds
SHARPE RATIO
SHARPE RATIO
0.49
0.47
0.43
0.330000000000001
Percentages
Companies
INTERPRETATION
From the above graph we can interpret that SBI Magnum mid cap fund
scheme stands 1st as it has highest Sharpe ratio i.e., 0.49 and HDFC Mid
cap fund(G) scheme stands 2nd,next UTI with 0.43 and ICICI PRU with
0.33, which is the least.
65
OVERALL ANALYSIS OF FUNDS OF AMCS BASED ON SHARPE

RATIO
overall analyses of Funds of AMCS based on Sharpe ratio
SHARPE RATIO
COMPANIES
TAX SAVING LARGE CAP MID CAP
FUND FUND FUND
UTI 0.16 0.26 0.43
ICICI PRUDENTIAL 0.30 0.23 0.33
SBI 0.25 0.26 0.49
HDFC BANK 0.35 0.19 0.47
66
Sharpe ratio of all funds
Sharp ratio of all funds

SHARPE RATIO TAX SAVING FUND SHARPE RATIO LARGE CAP FUND
SHARPE RATIO MID CAP FUND
0.49
0.47
0.43
0.35
0.330000000000001
Percentages
0.3
0.26 0.25 0.26
0.23
0.17
0.14
Companies
INTERPRETATION
From the above graph we can interpret that Sharpe ratio of UTI Tax
saving funds, large cap fund and mid cap fund are 0.16, 0.26 and 0.43,
ICICI Prudential are 0.30, 0.23, 0.33, SBI are 0.25, 0.26, 0.49 and Hdfc
bank are 0.35, 0.19 and 0.47 respectively.
67
CHAPTER-VII
FINDINGS
&
CONCLUSSION
FINDINGS & CONCLUSION
The following gives the AMCs with the highest return under each fund
i.e., tax saving funds, large cap funds and mid cap funds
o Tax saving fund: HDFC Tax Saver (G)and its return is 18.04%
o Large cap fund: SBI Blue Chip Fund(G)and its return is 17.8%
o Mid cap fund: UTI Mid Cap(G)and its return is 24.34%
The following gives the AMCs with the less return under each fund i.e.,
tax saving funds, large cap funds and mid cap funds
o Tax saving fund: UTI Tax saving-Equity long term fund(G)and its
return is 10.62%
o Large cap fund: HDFC Tax Saver (G) and its return is 10.9%
o Mid cap fund: ICICI PRU Mid Cap Fund(G))and its return is
20.7%
The following AMCs schemes has the highest risk under each fund i.e.,
tax saving funds, large cap funds and mid cap funds.
o Tax saving fund: ICICI PRU Tax saving- long term equity
fund(G)and its risk is 26.23%
o Large cap fund: SBI Blue Chip Fund(G)and its risk is 29.65%
o Mid cap fund: ICICI PRU Mid Cap Fund(G)and its risk is 39.41%
68
The following AMCs schemes has the lowest risk under each fund i.e., tax
saving funds, large cap funds and mid cap funds.
● Tax saving fund: UTI Tax saving-Equity long term fund(G)and its
risk is 22.04%
● Large cap fund: ICICI PRU Focused Blue chip equity(G)and its risk is
20.19%
● Mid cap fund: HDFC Mid cap fund(G) and its risk is 31.86%
CONCLSION
The performance of the AMC’s scheme has been evaluated with the help
of Sharpe ratio under each fund and the scheme with highest Sharpe ratio
is given the top rank. Top ranked AMC’s scheme under each fund is as
follows,Tax saving fund: HDFC tax saver fund with 0.35,Large cap fund:
UTI equity fund and SBI Blue chip fund with 0.26,Mid cap fund: SBI
Magnum mid cap fund scheme with 0.49
It is found that among the different types of funds Mid Cap funds are
performing well with more returns and more risk. It is also found that SBI
magnum mid cap fund scheme has highest Sharpe ratio i.e., 0.49 and
investing in the same will lead to profit.
69
CHAPTER VIII
SUGGESITIONS
&
RECOMMENDATIONS
SUGGESTIONS
1.The investor should take moderate risk to invest in HDFC Tax saver (G)
which gives more return.
2.If an investor likes to take less risk he can invest in ICICI PRU Focused
blue chip equity (G).
3. The prospective investors are needed to be made aware of the

investment in mutual funds.
4.It is better for the investors to have thorough knowledge about the
various financial services and instruments so that better decisions can be
taken.
5.Risk-return analysis should be made effectively so that investors are not

misled.
70
BIBLIOGRAPHY
Books
 Gordan &Natrajan, Financial Markets and Services, Himalaya

publishing house, revised edition 2018.
 I.M. Panday, Financial Accounting, ninth edition, Vikas publishers, 2007.
Websites
 https://www.thebalance.com/mutual-funds-4073989
 https://www.amfiindia.com/investor-corner/knowledge-center/what-
are-mutual-funds-new.html
 https://www.moneycrashers.com/mutual-fund-types-pros-cons/
 https://www.getsmarteraboutmoney.ca/invest/investment-
products/mutual-funds-segregated-funds/7-common-types-of-mutual-
funds/
 https://www.bankbazaar.com/mutual-fund/types-of-mutual-
funds.html
 https://cleartax.in/s/mutual-fund-types
 https://www.hdfcfund.com/learn/beginner/mutual-funds/different-
types-mutual-funds
71
Journal Articles
1. Dr.Deepak Agarwal , “Measuring performance of Indian

MutualFunds”, http://papers.ssrn.com/sol3/papers.cfm?
abstract_id=1311961
2. Mr.NarayanRaoSapar, “Performance Evaluation of Indian
MutualFunds”, http://papers.ssrn.com/sol3/papers.cfm?
abstract_id=433100
3. D.N. Rao , “A Study of Information Needs of Mutual Funds
Investors & Implications for Web Based Marketing of Mutual
FundProducts”
4. MS Shalini Goyal and MS Dauli Bansal, “A Study of Mutual
Funds in India”,
5. Y prabhavathi and N T Krishna Kishore ,“Investor’s preferences
towards Mutual Fund and Future Investments”, Source-ISSN NO-2250-
3173Meenakshi Garg, “A Study on Performance Evaluations of Selected
Mutual funds in India”
72

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CHAPTER-I

Mutual fund indicates the fund where in numerous investors come

Mutual funds provide the investor with professional management of funds

Mutual Fund Operation Flow Chart

NEED FOR STUDY

Mutual Fund being an institutional investment agency is treated as a

OBJECTIVES OF THE STUDY

 To study the various mutual fund schemes offered by HDFC bank

Statistical Tools & Techniques for Data analysis

LIMITATIONS OF THE STUDY

The following are the limitations of the study

2. Due to shortage of time an extensive study could not be carried out.

3. The study is mainly carried out based on the secondary data.

Dr.Deepak Agarwal in his article titled “Measuring performance of

Mr.NarayanRaoSapar in this article titled “Performance Evaluation of

D.N. Rao in his article titled “A Study of Information Needs of Mutual

In India, the Asset Management Companies market their investment

Mr. Sunil Madhav and Dr Prathap M Chauhan in their article titled

MS Shalini Goyal and MS Dauli Bansal in this article titled “A Study of

Y prabhavathi and N T Krishna Kishore in their article titled

Dr.D.S. Chaubey in the article titled “A Study on Indian Mutual Funds

Meenakshi Garg in her article titled “A Study on Performance

For evaluating the financial performance of selected mutual funds, the

Samar Mondal has given this in his article titled “Growth of

 Primary data is collected from the Execute of the organization

Mutual funds are financial intermediaries which collect the savings of

A mutual fund is nothing but a form of collective investment. It is formed

Concept of Mutual Fund

A Mutual Fund is a trust registered with the Securities and Exchange

Operational flow of Mutual Fund

The following diagram depicts the operational flow of Mutual Fund

Operational flow of Mutual Fund

Parties to Mutual fund

The following diagram illustrates various entities involve in organizational

Every investor, given his/her financial position and personal disposition,

In the absence of a mutual fund option, the money of such “passive”

Asset Management Company (AMC)

 An AMC should be headed by an independent non-interested and

 The board of directors shall not be entitled to any remuneration

Distributors earn a commission for bringing investors into the schemes of

a) Tier 1 distributors who have their own or franchised network

An investor’s holding in mutual fund schemes is typically tracked by the

Requests to invest more money into a scheme or to redeem money against

TYPES OF MUTUAL FUND

3.Load Funds/no-load funds

Mutual Funds incur various expenses on marketing, distribution,

It is imposed on an investor when he redeems his units (exits from the

Deferred load is charged to the scheme over a period of time.

e. Contingent Deferred Sales Charge (CDSS)

3. Tax-exempt Funds/ Non-Tax-exempt Funds

Profits arising out of sale of units by an investor within 12 months of

1. Aggressive Growth Funds

In Aggressive Growth Funds, fund managers aspire for maximum capital

d. Foreign Securities Funds

e. Mid-Cap or Small-Cap Funds

Funds that invest in companies having lower market capitalization than

Market Capitalization of a company can be calculated by multiplying the

4. Diversified Equity Funds

1. Equity Index Funds

Equity Index Funds have the objective to match the performance of a

Funds that invest in medium to long-term debt instruments issued by

4. Focused Debt Funds