A Project Report

On

"A Study on Mutual Funds and Mutual Funds in HDFC"

Submitted by

Ms. Ishika Jain

Roll No.2021346

TYBBI-Semester VI

Lala Lajpatrai College of commerce & Economics Mahalaxmi,

Mumbai-34

Under the Guidance of

Prof. Vaidehi Kamath

Submitted to

University of Mumbai

Academic Year

(2022-2023)
 Declaration

I, Ishika Jain Roll no: 2021346 the student of TYBBI (B.com-

Banking and insurance) Semester VI (2020-2021) from Lala Lajpatrai
College of Commerce & Economics, Mahalaxmi, Mumbai, hereby
declare that I have completed the project on

"A Study on Mutual Funds and Mutual Funds in HDFC".

The information submitted by me in this project is true and original to

the best of my knowledge.

(Signature of Student)

MS. ISHIKA JAIN

 CERTIFICATEE

This is certifying that MS. Ishika Jain, Roll No.: 2021346 the student
of TYBBI

(B. Com - Banking and Insurance) Semester VI (2022-2023) has

successfully completed the project on "A Study on Mutual Funds and
Mutual Funds in HDFC" under the guidance of Prof. Vaidehi Kamath.

Project Guide BBI Coordinator Principal

Internal Examiner External

Examiner

College Seal
 Acknowledgment

To list who all have helped me is difficult because they are so numerous
and the depth is so enormous. I would like to acknowledge the
following as being idealistic channels and fresh dimensions in the
completion of this project.

I take this opportunity to thank the University of Mumbai for giving

me chance to do this project. I would like to thank my Principal, Dr.
Neelam Arora for providing the necessary facilities required for
completion of this project.

I take this opportunity to thank our Coordinator Dr. Vaidehi Kamath,

for her moral support and guidance. I would also like to express my
sincere gratitude towards my Project Guide

Lastly, I would like to thank each and every person who directly or
indirectly helped me in the completion of the project especially my
Parents and Peers who supported me throughout my project.
 Executive Summary

The main objective of the study is to know in detail about Mutual Funds and types of mutual
funds in the market. Another main objective of this study is to analyze and evaluate the
performance of HDFC Mutual Fund Schemes, the evaluation of performance of the schemes
is carried out for three major categories of the mutual fund schemes.

Limitation of study- Most of the data is collected from secondary source due to lack of
time. The data is not 100% accurate. There is possibility of bias. Non availability of required
data to analyze the performance. The short span of the time provided also one of
limitations

Sources of data collection-Data may be classified into primary and secondary data
depending upon the nature and mode of collection. mainly the data is collected from
secondary data and there is survey which is primary data. The secondary data is collected
from the following sources (published books, website, business magazine).

CONCLUSION- From the data collected we can conclude that mutual funds are safe to invest
in but customers should always keep a check on risks involved.

Some recommendations-

1. Generally, to capitalize on the benefit of the power of compounding the investor is

expected to stay in fund for at least three years.
2. The Investor shall invest their money under systematic investment plan, to get
the benefit of the averaging effect.
3. It is always better to watch the market and follow the practice of Active
investment strategy than the passive investment strategy.
 INDEX

CHAPTER TOPIC PAGE NO.

NO.

1. Introduction to Mutual Funds 11

1.1. Definition of Mutual funds 12

1.2. History of Mutual Funds 12

1.3. How it works 16

2. Research Methodology

2.1. Research Approach 19

2.2. Objective of the study 19

2.3. Data Collection 19

2.4. Scope and Limitations of the 20

study

2.5. Hypothesis of the study

21

3. Types of Mutual Funds

3.1. Equity funds 23

3.1.a Types of equity funds 23

 3.2 Debt funds 25

3.2.a Types of Debt funds 25

3.3 Hybrid/balanced funds 27

3.3.a Types of Hybrid funds 27

3.4 Other schemes 29

4. Brief study of Mutual Funds

4.1 Organization of Mutual Funds 32

4.2 Advantages of Mutual Funds 33

4.3 Short Comings of Mutual Funds 35

4.4 Players in Mutual Funds 36

4.5 List of Mutual Funds 38

4.6 Risks involved in Mutual Funds 40

5. Introduction to HDFC Mutual Funds

5.1 Introduction to HDFC Mutual 43

Funds

5.2 HDFC Mutual Funds

45
a) HDFC Dividend Yield Fund
45
Growth
47
b) HDFC Gilt Fund
 c) HDFC Hybrid Debt Fund Growth
Fund
49

6. Data Analysis and Interpretation 51

7. Findings and Conclusion 52

8. Suggestions and recommendations 54

BIBLIOGRAPHY AND
WEBLIOGRAPHY

ANNEXURES
 Chapter 1

INTRODUCTION TO MUTUAL FUNDS

A mutual fund is a trust that pools the savings of a number of investors who share a common
financial goal and investments may be in shares, debt securities, money-market securities or a
combination of these. Those securities are professionally managed on behalf of the unit
holders and each investor holds a pro-rata share of the portfolio, that is, entitled to profits as
well losses.

Income earned through these investments and the capital appreciation realized is shared by its
unit holders in proportion to the number of units owned by them. A mutual fund is the most
suitable investment scope for common people as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at a relatively lower cost.

The flow chart below describes broadly the working of a Mutual fund:

Mutual funds have advantages and disadvantages compared to direct investing in individual
securities. The advantages of mutual funds include economies of scale, diversification,
liquidity, and professional management. However, these come with mutual fund fees and
expenses. Primary structures of mutual funds are open-end funds, unit investment
trusts, closed-end funds and exchange-traded funds (ETFs).

Mutual funds are often classified by their principal investments as money market funds, bond
or fixed income funds, stock or equity funds, hybrid funds, or other. Funds may also be

categorized as index funds, which are passively managed funds that match the performance
of an index, or actively managed funds. Hedge funds are not mutual funds as hedge funds
cannot be sold to the general public.

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1.1 DEFINITION OF A MUTUAL FUND

A mutual fund is like a trust that pools money from different investors
who share a mutual investment objective. This trust is managed by a
professional fund manager. The manager uses these funds to invest in
equities, stocks, and different money market instruments which help
increase wealth. The income gained from this collective investment is
then distributed amongst all the investors proportionately after
deducting certain expenses.

1.2 HISTORY OF MUTUAL FUNDS

The mutual fund industry in India has undergone at least 4 phases. Let us now look at each
phase in brief:

Mutual Funds History: Phase of Inception (1964-87)

The first phase was marked by the setting up of the UTI. Though it was a collaboration
between the RBI and the Indian Government, the latter was soon delinked from the day-to-
day operations of the Unit Trust of India. In this phase, the company was the sole operator in
the Indian mutual fund industry. In 1971, the UTI launched the Unit Linked Insurance Plan or
the ULIP. From that year until 1986, UTI introduced several plans and played a very big role
in introducing the concept of mutual funds in India.

When UTI was set up several years ago, the idea was to not just introduce the concept of
mutual funds in India; an associated idea was to set up a corpus for nation-building as well.

2
Therefore, to encourage the small Indian investor, the government built in several income-tax
rebates in the UTI schemes.

Not surprisingly, the investible corpus of UTI swelled from 600 crores in 1984 to 6,700
crores in 1988.Clearly, the time had come for the Indian mutual industry to move into the
next phase.

Mutual Funds History: Entry of Public Sector (1987-1993)

By the end of 1988, the mutual fund industry had acquired its own identity. From 1987, many
public sector banks had begun lobbying the government for starting their own mutual fund
arms. In November 1987, the first non-UTI Asset Management Fund was set up by the State
Bank of India. This AMC was quickly followed by the creation of other AMCs by banks like
Canada Bank, Indian Bank, Life Insurance Corporation, General Insurance Corporation, and
Punjab National Bank.

This opening up of the mutual fund industry delivered the desired results. In 1993, the
cumulative corpus of all the AMCs went up to a whopping Rs. 44,000 crores. Observers of
this industry say that in the second phase, not only the base of the industry increased but also
it encouraged investors to spend a higher percentage of their savings in mutual funds. It was
evident that the mutual fund industry in India was poised for higher growth.

Mutual Fund History: Entry Private Sector Phase (1993-1996)

In the period 1991-1996, the Government of India had realized the importance of the
liberalization of the Indian economy. Financial sector reforms were the need of the hour.
India needed private sector participation for the rebuilding of the economy.

Keeping this in mind, the government opened up the mutual fund industry for the private
players as well. The foreign players welcomed this move and entered the Indian market in
significant numbers. In this period, 11 private players –in collaboration with foreign entities-
launched their Asset Management Funds. Some of the top AMCs in the private sector were:

3
• ICICI Prudential AMC- This Company is a joint venture between ICICI Bank of India and
Prudential Plc of UK. It manages a corpus of INR 2, 93,000 crores and has an inventory of
more than 1400 schemes.

• HDFC Mutual Fund- Launched in the 1990s, the HDFC Mutual Fund manages more than
900 different kinds of funds.

• Kotak Mahindra Mutual Fund- This AMC has an asset base of more than Rs. 1,19,000
crores. It is a joint venture of Kotak Financial Services and the Mahindra Group.

SEBI Interventions and Growth, And AMFI

As the mutual fund industry grew further in the 1990s, the AMCs and the government felt
that it was time for regulation and some control. Investors had to be protected as well as a
level playing ground had also to be laid down. A few years ago, the Indian industry had
suffered a lot because of bank scams and there was a real threat that investors might lose their
monies yet again.

Consequently, the government introduced the SEBI Regulation Act in 1996 which laid down
a set of fair and transparent rules for all the stakeholders. In 1999, the Indian government
declared that all mutual fund dividends would be exempt from income tax. The idea behind
this decision was to spur further growth in the mutual fund industry.

Meanwhile, the mutual fund industry also realized the importance of self-regulation. As a
result, it set up an industry body- the Association of Mutual Funds of India (AMFI). One of
the goals of this body is investor education.

Mutual Funds History: Phase of Consolidation (February 2003 – April 2014)

In February 2003, the Unit Trust of India was split into two separate entities, following the
repeal of the original UTI Act of 1963. The two separated entities were the UTI Mutual Fund
(which is under the SEBI regulations for MFs) and the Specified Undertaking of the Unit
Trust of India (SUUTI). Following this bifurcation of the former UTI and occurrence

4
numerous mergers among different private sector entities, the mutual fund industry took a
step towards the phase of consolidation.

After the global economic recession of 2009, the financial markets across the globe were at
an all-time low and Indian market was no exception to it. Majority of investors who had put
in their money during the peak time of the market had suffered great losses. This severely
shook the faith of investors in the MF products. The Indian Mutual Fund industry struggled to
recover from these hardships and remodel itself over the next two years. The situation
toughened up more with SEBI abolishing the entry load and the lasting repercussions of the
global economic crisis. This scenario is evident from the sluggish rise in the overall AUM of
the Indian MF industry.

Mutual Funds History: Phase of Steady Development and Growth (Since May 2014):
Recognizing the lack of penetration of mutual funds in India, especially in the tier II and tier
III cities, SEBI launched numerous progressive measures in September 2012. The idea
behind these measures was to bring more transparency and security for the interest of the
stakeholders. This was SEBI’s idea to ‘re-energize’ the Indian MF Industry and boost the
overall penetration of mutual funds in India.

The measures bore fruit in the due course by countering the negative trend that was set
because of the global financial crisis. The situation improved considerably after the new
government took charge at the centre.

Since May ’14, the Indian MF industry has experienced a consistent inflow and rise in the
overall AUM as well as the total number of investor accounts (portfolio).

Currently, all the Asset Management Companies in India manage a combined worth of
around Rs. 23 lac crores of assets. Though this number looks attractive, we still have to go a
long way in order to match the west.

It is estimated that Indians save approximately Rs. 20-30 lakh crore annually. The Indian
mutual fund industry can grow immensely if Indians started parking a higher percentage of

5
their savings in MFs. Observers say that Indians have begun shifting a part of their savings
from physical assets like gold and land to financial instruments like bonds and silver.
However, the AMFI and the government need to encourage Indians even more for
investments in mutual funds.

1.3 How Mutual Funds Work?

A mutual fund is both an investment and an actual company. This dual nature may seem
strange, but it is no different from how a share of AAPL is a representation of Apple Inc.
When an investor buys Apple stock, he is buying partial ownership of the company and its
assets. Similarly, a mutual fund investor is buying partial ownership of the mutual fund
company and its assets. The difference is that Apple is in the business of making innovative
devices and tablets, while a mutual fund company is in the business of making investments.

Investors typically earn a return from a mutual fund in three ways:

1. Income is earned from dividends on stocks and interest on bonds held in the fund's
portfolio. A fund pays out nearly all of the income it receives over the year to fund
owners in the form of a distribution. Funds often give investors a choice either to
receive a check for distributions or to reinvest the earnings and get more shares.
2. If the fund sells securities that have increased in price, the fund has a capital gain.
Most funds also pass on these gains to investors in a distribution.
3. If fund holdings increase in price but are not sold by the fund manager, the fund's
shares increase in price. You can then sell your mutual fund shares for a profit in the
market.

If a mutual fund is construed as a virtual company, its CEO is the fund manager, sometimes
called its investment adviser. The fund manager is hired by a board of directors and is legally
obligated to work in the best interest of mutual fund shareholders. Most fund managers are
also owners of the fund. There are very few other employees in a mutual fund company. The
investment adviser or fund manager may employ some analysts to help pick investments or
perform market research. A fund accountant is kept on staff to calculate the fund's NAV, the
daily value of the portfolio that determines if share prices go up or down. Mutual funds need
6
to have a compliance officer or two, and probably an attorney, to keep up with government
regulations. Most mutual funds are part of a much larger investment company; the biggest
have hundreds of separate mutual funds. Some of these fund companies are names familiar to
the general public, such as Fidelity Investments, The Vanguard Group, T. Rowe Price, and
Oppenheimer.

7
 Chapter 2

RESEARCH METHODOLOGY

2.1 RESEARCH APPROACH

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

as science of studying how research is done scientifically.

It guides and analyzes the various steps of the research along with the logic behind them. It is
the framework, which specifies the type of information to be collected, sources of
information and the techniques for data analysis.

The data collected for the study of the project involves both the primary and secondary
source of data. The primary data collected is mainly based on the observations and interaction
made with the agents and the distributors. And the secondary data is collected through
various sources such as Wikipedia and different websites from internet.

2.2 OBJECTIVE OF STUDY

 To understand the concept of mutual funds
 To understand the types and procedures involved in mutual funds
 To evaluate the role of HDFC in Mutual fund
 To find out the contribution of HDFC bank in mutual funds and learn about various
schemes of HDFC bank
 To suggest the remedies for effective function of mutual fund in HDFC bank.

2.3 DATA COLLECTION

PRIMARY DATA

The observation is mainly depending upon to know about the investor’s perspective towards
their investment in the mutual fund an outperforming investment avenue and also knowing
their views and needs in selecting the best among the schemes currently available in the

8
market. Since the AMC has the customer support service block where investors walk-in daily
neither for their investments nor for redemption purpose which helped me to gather the raw
data.

The interaction made with the distributors and agents through telephonic conversation
benefited with good experience to know about the investor’s views indirectly and also about
their own perspective towards the investment made in the mutual funds.

SECONDARY DATA

The fact sheets are issued by the AMC updated periodically on the various information of the
schemes. It involves portfolio of the scheme, sectoral allocation, performance compared to
their benchmarks over a period of time and portfolio turnover ratio etc. acted as a complete
profile about the facts and features of the various schemes of the AMC.

And finally, through surfing the internet data had been collected through accessing various
websites such as www.mutualfundindia.com, www.amfiindia.com,
www.valueresearchonline.com etc.

2.4 SCOPE AND LIMITATIONS OF THE STUDY

The scope of the study is limited to the role of the EXIM bank of India in promoting
financial and non-financial services.

Considering the limitations such as time, money etc. the following aspects are considered
for study.

1. the study mostly based on secondary data.

2. the study covers only foreign trade does not cover domestic trade.
3. this study is just like a case study of the EXIM bank’s functions and not concern with
other financial agencies.
4. Past performance may or may not sustain in the future
5. Unpredictable change in the market condition will prove difficulty in analysis of
6. preferred sector for investing.
7. Investor preference is analyzed based only on observation.

9
 8. Only few schemes are taken for the study.
9. Market risk is not taken in to consideration due to non-possibility of information

2.5 HYPOTHESIS OF THE STUDY

By considering the objectives of the study the following hypothesis are formulated for the
investigation and solution to the hypothesis are discussed below:

a. Mutual funds are not risky to an extent.

b. the mutual funds provided by HDFC banks are adequate.

c. role of HDFC bank in mutual funds

This hypothesis is proved in respective chapters in these reports.

10
 CHAPTER 3

TYPES OF MUTUAL FUNDS

3.1 EQUITY FUNDS
A mutual fund is an intermediary that collects funds from investors in small units and then
invests them in assets that appreciate over time. An equity fund is a class of mutual fund
that invests the corpus in listed equities in the stock markets. An equity fund is defined
under the Income Tax Act as any fund that has a minimum exposure of 65% to equities.
Therefore, equity funds, index funds, sector funds, balanced funds (with 65% equity) and
even arbitrage funds will be classified as equity funds for this purpose.
An equity fund offers investors the facility to participate in a diversified portfolio of
equities with minimal risk and with the power of professional management.

3.1.a TYPES OF EQUITY FUNDS

Equity funds come in various categories and even the basis for classification of these funds
differs. Firstly, equity funds can be classified into open ended funds and closed ended
funds.
Open ended funds: These are available for purchase and redemption on all trading days at
the previous day’s net asset value (NAV). The corpus of the open-ended equity fund keeps
constantly changing.
Closed ended funds: Unlike open ended funds, these funds are not available on tap. They
come out with NFOs and then the fresh purchase and sales are halted. Such closed ended
funds are listed on the stock exchange so there is liquidity in the form of secondary listing.
But closed ended funds normally trade at a discount and that is your cost as an investor.
Equity funds can also be looked in terms of their portfolio mix. The definition of an equity
fund is a fund that has minimum 65% exposure to equities. Here are some of the popular
classifications of equity funds based on their portfolio.

11
  Diversified Equity funds create a diversified portfolio of normally large
cap companies with established business models. Being diversified funds their
intent is to reduce the risk and hence the portfolio is designed to minimize
correlation between stocks.
 Mid Cap funds have a portfolio of mid cap stocks. These stocks have
generated higher returns as they have the potential to become large caps over
time.
 Small cap funds are those funds that consist of stocks with lower market
capitalization. These are normally risky stocks and tend to be quite vulnerable
to shifts in the business conditions and market risk.
 Multi cap funds are funds that are a mix of large cap, mid cap and small cap
stocks. These funds give the stability of diversified equity funds and also the
added advantage of alpha that small and mid-cap stocks provide.
 Index Funds are funds that are benchmarket to an index like the Sensex or Nifty.
The endeavour of these funds is to create a portfolio that mirrors the index and
earns similar returns. Index funds focus more on replicating the index by reducing
the tracking error.
 Sector Funds are equity funds that are focused on just one particular industry
group. In India, banking funds, pharma funds, IT funds and FMCG funds are quite
popular. Such funds tend to be very cyclical and go against the basic grain of
diversification, which is what equity fund investing is all about. Investors need to
be conscious of the higher risk that they run in sector funds.
 Thematic Funds are equity funds that are focused on one particular theme, which
is a larger grouping compared to industry groups. In India, thematic funds include
funds with a focus on commodities, on business cycles, on rate sensitive stocks etc.
Such funds also tend to be cyclical and go against the basic grain of diversification,
which is what equity fund investing is all about. Investors need to be conscious th at
any down cycle in the theme can lead to wealth depletion.

12
3.2 Debt funds
Debt funds, as the name suggests, invest in fixed income debt instruments. Debt
instruments pay regular interest and also redeem the principal on the completion of the
tenure of the instrument.

Bond funds or debt funds can be classified based on their maturity and their risk profile.
We can also have open ended funds that are available for entry and redemption at any
point of time. Then we have closed end funds that are only open for a fixed period and
then it is closed and listed on the stock exchange. Fixed Maturity Plans (FMPs) are a very
popular form of closed ended bond funds. Let us now focus on some key types of open -
ended funds.

3.2.a TYPES OF DEBT FUNDS

 At the shortest end of the duration spectrum, you have liquid funds or money
market funds. Liquid funds invest in highly liquid money market instruments
and offer easy liquidity. The period of investment ranges from 1 day to 91
days. It is a smart way to hold your short-term surpluses and earns more than a
savings bank account.
 Ultra-Short-Term Funds or UST funds are slightly higher on the duration
scale compared to liquid funds. There are also popularly known as Liquid-Plus
funds and invest in very short-term debt securities with a small portion in
longer term debt securities. UST funds have an outer limit of 365 days
maturity for debt they invested in. UST funds offer slightly higher returns
compared to liquid funds, if you have a 6-month perspective.
 Floating Rate Funds are a category of funds that invest in bonds that offer
variable rate of interest linked to a market benchmark. The reset of interest
will happen at regular intervals. These funds are very useful in to protect your
capital in a rising interest rate scenario as fixed rate funds will lose value in
such a scenario.
 Short- and Medium-Term Income Funds invest in debt instruments of
maturity up to 3 years. These funds can benefit in rising interest scenario and
13
 also in a falling interest scenario due to their exposure to medium term debt.
These funds are ideal for investors who have a time frame of up to 12 months.
 Income Funds invest in corporate bonds, government bonds and money
market instruments. Due to exposure to corporate debt, they carry credit risk
and hence need to be monitored regularly. Income funds work best when
interest rates have peaked in the market and are expected to go down.
 Gilt Funds typically invest in government securities (sovereign debt) of
medium- and long-term maturities issued by central and state governments.
Remember, that some state government bonds do carry a higher level of risk.
These funds are free of default risk generally but they are very vulnerable to
changes in the interest rates.
 Dynamic Bond Funds are a classic example of a fund where the maturities are
actively managed by the fund manager. For example, the dynamic bond fund
manager will reduce exposure to gilt funds if rates are going to rise and
increase exposure to floating rate of liquid funds. There is a dependency on the
fund manager view.
 Corporate Bond Funds essentially invest in bonds and debentures of varying
maturities issued by corporates and private institutions. These funds offer
higher yields but also carry default risk, as we have seen in the case of bonds
issued by IL&FS and Amtek Auto in the past. You need moderately high-risk
appetite for these funds.
 Monthly Income Plans (MIPs) are a class of debt funds which also have a
small exposure into equity. This adds to the risk but also enhances returns due
to equity exposure. MIP exposure must be for a longer period of time.

3.3 HYBRID FUNDS

Hybrid funds entail the combination of equity and debt in a single mutual fund portfolio.
These hybrid funds can be further sub-categorized into compartments based on whether
equity is predominant in this mix or debt is predominant.

14
Hybrid funds are also popularly known as balanced funds. Like any hybrid product, they
offer a mix of equity and debt. There also hybrid funds that offer a mix of equity and
equity futures as in the case of arbitrage funds. Hybrid funds can either be passive or
active in terms of allocation. For example, the Hybrid fund can decide on a broad
allocation of 80:20 in favors of equities and just maintain that ratio by rebalancing. That is
passive allocation. Another option is to keep changing the mix based on the view of the
fund manager. The Fund manager can increase the proportion of equities when markets are
undervalued or increase the proportion of debt when the interest rates are likely to go
down. While these are good on paper, they tend to give a lot of discretion to the fund
manager and makes them less objective as hybrid products.

There are two ways of classifying the hybrid funds. Hybrid funds can either be classified
on the basis of the asset mix or on the basis of the discretion available to the fund
manager. Let us first look at hybrid fund categories from the point of view of the asset
mix.
3.3.a TYPES OF HYBRID FUNDS
 Hybrid funds that are predominantly equity Hybrids. These funds invest
more than 65% of their asset allocation in equities and the balance in debt.
This ratio can vary but typically, the fund manager will not allow the equity
proportion to go below the 65% mark. That is because, 65% exposure to equity
is the bare minimum requirement for be classified as an equity fund for tax
purposes. Once a hybrid fund is classified as an equity fund due to exposure to
equity above 65%, then dividends and capital gains are taxed at a concessional
rate.
That substantially improves the post-tax yields.
 Debt Hybrids like a Monthly Income Plan (MIP) is a classic example. Here
the predominant exposure is in debt. So an MIP will have around 75-80% in
quality debt paper and the balance will be invested in equities. For tax
purposes, the MIP will be classified as a non-equity fund but the small equity
exposure enables the company to earn Alpha. Being predominantly debt

15
 oriented, the MIPs are also very useful for retirees who can afford to take
slightly higher risk on their investments for higher returns.
 Hybrid funds can also be in the form of arbitrage funds. In arbitrage funds,
the fund manager buys a portfolio of equities and sells equivalent futures
against that. The spread is the profit and it is like earning interest. The returns
on these arbitrage funds vary from 6-8% per annum depending on the spreads
in the market. Since futures are leveraged products, these funds are classified
as equity funds due to predominant exposure in equities and get preferential
tax treatment. This makes them more attractive compared to other fixed
income instruments.
Hybrid funds can also be classified based on the discretion to the fund manager on asset
allocation.
 Hybrid funds or balanced funds can be static allocation funds where the mix
between equity and debt is broadly fixed in a range. The fund manager
normally does not go outside these limits. These are the most common type of
hybrid funds in India.
 There are also dynamic allocation hybrid funds where the equity / debt mix can
widely be changed. It can even move from a predominantly equity to
predominantly debt fund and vice versa. Such shifts are either based on the
discretion and outlook of the fund manager or based on lifestyle goals. That is
why dynamic allocation plans are quite popular when it comes to long term
planning like retirement, children’s education etc.

3.4 Other schemes:

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 like
Equity Linked Savings Schemes (ELSS). ELSS is a type of diversified equity mutual fund,
which is qualified for tax exemption under Section 80C of the Income Tax Act, and offers the

16
twin-advantage of capital appreciation and tax benefits. It comes with a lock-in period of three
years.

The Rajiv Gandhi Equity Savings scheme (RGESS), which was revised in the Union Budget
2013-14, would provide a 50% tax deduction on investments up to Rs. 50,000 to first time
investors in equity whose annual taxable income is below Rs. 12 lakhs.

Index Schemes

Index funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P
NSE 50 indexes (Nifty), etc. NAVs of such schemes would rise or fall in accordance with the
rise or fall in the index, though not exactly by the same percentage due to some factors known
as "tracking error". Necessary disclosures in this regard are made in the offer document of the
scheme.

There are also exchange traded index funds launched by the mutual funds which are traded on
the stock exchanges.

Sector Specific schemes

These are the funds which invest in the securities of only those sectors or industries as specified
in the offer documents like Pharmaceuticals, Software, FMCG, Petroleum stocks etc. The
returns of these funds are dependent on the performance of the respective sectors/industries.
While these funds may give higher returns, they are riskier compared to diversified funds.
Investors need to keep a watch on the performance of those sectors/industries and must exit at
an appropriate time.

Load or No-Load Funds

A load fund is one that charges a percentage of NAV for exit. That is, each time one sells units
in the fund, a charge will be payable. This charge is used by the Mutual fund for marketing and
distribution expenses.

A no-load fund is one that does not charge for exit. It means the investors can exit the fund at
no additional charges during sale of units. In accordance with the SEBI circular no.
SEBI/IMD/CIR No.4/168230/09 dated June 30, 2009, no entry load will be charged for
17
purchase / additional purchase / switch-in accepted by the fund with effect from August 1,
2009. Similarly, no entry load will be charged with respect to applications for registrations
under Systematic Investment Plan/ Systematic Transfer Plan / Systematic Investment Plan Plus
accepted by the fund with effect from August 1, 2009.

Dividend Pay-out Schemes

Mutual Fund companies as when they keep on making profit, distribute a part of the money to
the investors by way of dividends. If one wants to keep on taking part of profit regularly, he
may select this option.

Dividend Reinvestment Schemes

This option is similar to the first option except that the dividend declared is re-invested in the
same fund on the same day’s NAV.

18
 CHAPTER 4

BRIEF STUDY OF MUTUAL FUND

4.1 Organization of a Mutual Fund

The following is the structure of typical Mutual fund:

Sponsor
Sponsor is the person who either alone or in association with another corporate body,
establishes a mutual fund. The sponsor must contribute at least 40% of the net worth of the
investment managed and meet the eligibility criteria prescribed under the Securities and
Exchange Board of India (Mutual Funds) Regulations, 1996.The sponsor is not responsible or
liable for any loss or shortfall resulting from the operation of the schemes beyond the initial
contribution made by it towards setting up of the mutual fund
Trust
The mutual fund is constituted as a trust in accordance with the provisions of the Indian
Trusts Act, 1882 by the sponsor. The trust deed is registered under the Indian Registration
Act, 1908.

Trustee
Trustee is usually a company (corporate body) or a Board of Trustees (body of individuals).
The main responsibility of the trustee is to safeguard the interest of the unit holders and inter
alias ensure that the AMC functions in the interest of investors and in accordance with the
Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, the provisions of
the trust deed and the offer documents of the respective schemes. At least 2/3rd of the
directors of the Trustee are independent directors who are not associated with the sponsor in
any manner.
Asset Management Company (AMC)

19
The trustee, as the investment manager of the mutual fund, appoints the AMC. The AMC is
required to be approved by the Securities and Exchange Board of India (SEBI) to act as an
asset management company of the Mutual fund. At least 50% of the directors of the AMC are
independent directors who are not associated with the sponsor in any manner. The AMC must
have a net worth of at least Rs. 10 crores at all times.

Custodian
A trust company, bank or similar financial institution, registered with SEBI is responsible for
holding and safeguarding the securities owned within a mutual fund. A mutual fund’s
custodian may also act as its transfer agent.
Registrar and Transfer Agent
The AMC, if so, authorized by the trust deed, appoints the registrar and transfer agent to the
mutual fund. The registrar processes the application form, redemption requests and
dispatches account statements to the unit holders. The registrar and transfer agent also
handles communication with investors and updates investor records.

4.2 ADVANTAGES OF MUTUAL FUNDS

Professional Management

Mutual funds employ experienced and skilled professionals who make

investment research and analyze the performance and prospects of various
instruments before selecting a particular investment. Thus, by investing in
mutual funds, one can avail the services of professional fund managers, which
would otherwise be costly for an individual investor.

Diversification

Diversification involves holding a wide variety of investments in a portfolio so

as to mitigate risks. Mutual funds usually spread investments across various
industries and asset classes, constrained only by the stated investment objective.
Thus, by investing in mutual funds, one can avail the benefits of diversification

20
and asset allocation without investing a large amount of money that would be
required to create an individual portfolio.

Liquidity

In an open-ended scheme, unit holders can redeem their units from the fund
house anytime. Even with close-ended schemes, one can sell the units on a
stock exchange at the prevailing market price. Besides, some close-ended and
interval schemes allow direct repurchase of units at NAV related prices from
time to time. Thus, investors do not have to worry about finding buyers for their
investments.

Flexibility

Mutual funds offer a variety of plans, such as regular investment, regular

withdrawal and dividend reinvestment plans. Depending upon one’s preferences
and convenience, one can invest or withdraw funds, accordingly.

Cost Effective

Since Mutual funds have a number of investors, the fund’s transaction costs,
commissions and other fees get reduced to a considerable extent. Thus, owing to
the benefits of larger scale, mutual funds are comparatively less expensive than
direct investment in the capital markets.

Well Regulated

Mutual funds in India are regulated and monitored by the Securities and
Exchange Board of India (SEBI), which strives to protect the interests of
investors. Mutual funds are required to provide investors with regular
information about their investments, in addition to other disclosures like
specific investments made by the scheme and the proportion of investment in
each asset classes.

Convenient Administration

21
The facility of making investments through service centers as well as through
internet ensures convenience.

Return Potential

By allocating right asset mix, mutual funds offer a chance of higher potential of
returns. The high concentration of risky assets would lead to higher return and
vice-versa.

Transparency

Information available through fact sheets, offer documents, annual reports and
promotional materials help investors gather knowledge about their investments.

Choice of Schemes

The investors can choose from various kinds of scheme available to them. The
risk-seeker investors can go for more aggressive schemes while risk-averse
investors can go for income schemes funds and so on.

4.3 SHORT COMINGS OF MUTUAL FUNDS

Costs
Mutual funds provide investors with professional management; however, it comes at a cost.
Funds will typically have a range of different fees that reduce the overall payout. In mutual
funds, the fees are classified into two categories: shareholder fees and annual fund-operating
fees. The shareholder fees, in the form of loads and redemption charges, are paid directly by
shareholders while purchasing or selling the funds. The annual fund operating fees are
charged as an annual percentage - usually ranging from 1-3%. These fees are paid by mutual
fund investors, regardless of the performance of the fund. As one can imagine, in years when
the fund doesn't make money, these fees only magnify losses.
Inefficiency of Cash Reserves
Mutual funds usually maintain large cash reserves as protection against a large number of
simultaneous withdrawals. Although this provides investors with liquidity, it means that some
of the fund’s money is invested in cash instead of assets, which tends to lower the investors’
potential return.

22
Diversification
Although diversification is one of the keys to successful investing, many mutual fund
investors tend to over diversify. The idea of diversification is to reduce the risks associated
with holding a single security. Over diversification occurs when investors buy many funds
that are highly related and so don't get the benefits of diversification.
Dilution
Diversification reduces the amount of risk involved in investing in mutual funds but it can
also be disadvantageous due to dilution. For example, if a single security held by a mutual
fund doubles in value, the mutual fund itself would not double in value because that security
is only one small part of the fund’s holdings. By holding a large number of different
investments, mutual funds tend to do neither exceptionally well nor very poorly either.
Trading Limitations
Although mutual funds are highly liquid in general, most mutual funds (called open-ended
funds) cannot be bought or sold in the middle of the trading day. One can only buy and sell
them at the end of the day.

4.4 PLAYERS IN THE MUTUAL FUND INDUSTRY

BANK SPONSORED

1. Joint Ventures - Predominantly Indian

a. SBI Funds Management Ltd.

2. Others

a. BOB Asset Management Co. Ltd.

b. Canbank Investment Management Services Ltd.

c. UTI Asset Management Company Pvt. Ltd.

INSTITUTIONS

23
1. GIC Asset Management Co. Ltd.

2. Jeevan Bima Sahayog Asset Management Co. Ltd.

PRIVATE SECTOR

1. Indian

a. Benchmark Asset Management Co. Pvt. Ltd.

b. Cholmondeley Asset Management Co. Ltd.

c. Credit Capital Asset Management Co. Ltd.

d. Escorts Asset Management Ltd.

e. JM Financial Mutual Fund

f. Kotak Mahindra Asset Management Co. Ltd.

g. Reliance Capital Asset Management Ltd.

h. Sahara Asset Management Co. Pvt. Ltd

i. Sundaram Asset Management Company Ltd.

j. Tata Asset Management Private Ltd.

2. Joint Ventures - Predominantly Indian

a. Birla Sun Life Asset Management Co. Ltd.

b. DSP Merrill Lynch Fund Managers Limited

c. HDFC Asset Management Company Ltd.

3. Joint Ventures - Predominantly Foreign

a. ABN AMRO Asset Management (I) Ltd.

24
b. Alliance Capital Asset Management (India) Pvt. Ltd.

c. Deutsche Asset Management (India) Pvt. Ltd.

d. Fidelity Fund Management Private Limited

e. Franklin Templeton Asset Mgmt. (India) Pvt. Ltd.

f. HSBC Asset Management (India) Private Ltd.

g. ING Investment Management (India) Pvt. Ltd.

h. Morgan Stanley Investment Management Pvt. Ltd.

i. Principal Asset Management Co. Pvt. Ltd.

j. Prudential ICICI Asset Management Co. Ltd.

4.5 List of Mutual Funds

A. Mutual Funds registered with SEBI:

1. Kothari Pioneer Mutual Fund

2. Taurus Mutual Fund

ADVERTISEMENTS:

3. ICTCI Mutual Fund

4. Can-bank Mutual Fund

5. Morgan Stanley Mutual Fund

6. 20th Century Mutual Fund

7. GIC Mutual Fund

25
8. SBI Mutual Fund

ADVERTISEMENTS:

9. CRB Mutual Fund

B. Mutual Funds yet to be registered with SEBI:

1. BOI Mutual Fund

2. LIC Mutual Fund

3. BOB Mutual Fund

4. PNB Mutual Fund

5. Indian Bank Mutual Fund

C. Mutual Funds given approval by SEBI:

1. Tata Sons

2. ICICI

3. Apple Industries

4. Ceat Financial Services

5. Gujarat Lease Financing

6. Overseas Sanmar financial services

7. Nagarjuna Finance

8. SRF Finance

9. Vysya Bank

26
10. Classic Financial Services

11. First Leasing Co. of India

12. J.M. Financial Serv. and Investment Consultancy

13. World link Finance

14. Kotak Mahindra Finance

15. Shriram Group Companies

4.6 RISK INVOVLED WHILE INVESTING IN MUTUAL

FUNDS

THE RISK-RETURN TRADE-OFF

The most important relationship to understand is the risk-return trade-off. Higher the

risk greater the returns/loss and lower the risk lesser the returns/loss. Hence it is upto

the investor to decide how much risk does he is willing to take- up. In order to take an

investment decision one should be aware about the various risk involved in it.

MARKET RISK

Sometimes prices and yields of all securities rise and fall. Broad outside influences

affecting the market in general lead to this. This is true, may it be big corporations or

smaller mid-sized companies. This is known as Market Risk. A Systematic Investment

Plan-SIP that works on the concept of Rupee Cost Averaging might help mitigates this risk.

27
CREDIT RISK

The debt servicing ability (may it be interest payments or repayment of principal)

of a company through its cash flows determines the Credit Risk faced by you. This credit

risk is measured by independent rating agencies like CRISIL who rate companies and

their paper. An ‘AAA’ rating is considered the safest whereas a ‘D’ rating is considered

poor credit quality. A well-diversified portfolio may help to mitigate this risk.

INFLATION RISK

Things you hear people talk about:

“Rs. 100 today is worth more than Rs. 100 tomorrow.”

The root cause, Inflation. Inflation is the loss of purchasing power over time. A lot of

times people make conservative investment decisions to protect their capital but end up

with a sum of money that can buy less than what the principal could at the time of the

investment. This happens when inflation grows faster than the return on your

investment. A well-diversified portfolio with some investment in equities might help

mitigate this risk.

INTEREST RATE RISK

In a free-market economy interest rates are difficult if not impossible to predict.

Changes in interest rates affect the prices of bonds as well as equities. If interest rates rise

the prices of bonds fall and vice versa. Equity might be negatively affected as well in arising
interest rate environment. A well-diversified portfolio might help mitigate this risk.

28
 CHAPTER 5

INTRODUCTION TO MUTUAL FUNDS

5.1 HDFC Mutual Fund

HDFC ASSET MANAGEMENT COMPANY LIMITED (AMC)

VISION
To be a dominant player in the Indian mutual fund space recognized for its high
Levels of ethical and professional conduct and a commitment towards enhancing
Investor interests.

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

HDFC ASSET MANAGEMENT COMPANY LIMITED

HDFC Asset Management Company LTD (AMC) was incorporated under the
Companies Act, 1956, on December 10, 1999, and was approved to act as an Asset
Management Company for the Mutual Fund by SEBI on June 30, 2000.
In terms of the Investment Management Agreement, the Trustee has appointed the
AMC to manage the Mutual Fund. As per the terms of the Investment Management
Agreement, the AMC will conduct the operations of the Mutual Fund and manage assets
of the schemes, including the schemes launched from time to time.

29
 SHAREHOLDING PATTERN OF THE AMC

Zurich Insurance Company (ZIC), the Sponsor of Zurich India Mutual Fund,
following a review of its overall strategy, had decided to divest its Asset Management
business in India. The AMC had entered into an agreement with ZIC to acquire the said
business, subject to necessary regulatory approvals. On obtaining the regulatory
approvals, the Schemes of Zurich India Mutual Fund have migrated to HDFC Mutual
Fund on June 19, 2003.
The AMC is managing 21 open-ended schemes of the Mutual Fund and also
managing the respective Plans of HDFC Fixed Investment Plan, a closed ended Income
Scheme.
The AMC has renewed its registration from SEBI vide Registration No. - PM /
INP000000506 dated December 4, 2003 to act as a Portfolio Manager under the SEBI
(Portfolio Managers) Regulations, 1993. The Certificate of Registration is valid from
January 1, 2004 to December 31, 2006. The AMC is also providing portfolio
management / advisory services and such activities are not in conflict with the activities
of the Mutual Fund.

The AMC is managing 28 open-ended schemes of the Mutual Fund

The AMC is also managing 7 closed ended Schemes of the Mutual Fund
The AMC is also providing portfolio management / advisory services and such activities
are not in conflict with the activities of the Mutual Fund. The AMC has renewed its
registration from SEBI vide Registration No. - PM / INP000000506 dated December 21,
30
2009 to act as a Portfolio Manager under the SEBI (Portfolio Managers) Regulations,
1993. The Certificate of Registration is valid from January 1, 2010 to December 31, 2012.
No of schemes: 378
Corpus under management: Rs. 390488.5666 crs. (as on 31-Dec-2020)
5.2 HDFC Mutual Funds

5.2.a HDFC Dividend Yield Fund Growth

Summary Info:

Fund Name : HDFC Mutual Fund

Scheme Name : HDFC Dividend Yield Fund Growth

AMC : HDFC Mutual Fund

Type : Open

Category : Equity – Diversified

Launch Date : 27-Nov-20

Fund Manager : Gopal Agrawal

Net Assets (Rs. cr) : 1825.51

Table no. 4.1

HDFC Dividend Yield Fund Growth - NAV Details

NAV Date : 01-Apr-21

NAV [Rs.] : 11.02

Buy/Resale Price [Rs.] : 0

Sell/Repurchase Price [Rs.] : 0

31
Entry Load % : NIL

1.00% - If Units are redeemed / switched-out within 1

years from the date of allotment. Nil - If Units are
redeemed / switched-out after 1 years from the date of
Exit Load % : allotment.

Table no. 4.2

Comparison with TATA Quant fund

Scheme Name HDFC Dividend Yield Fund (G) Tata Quant Fund - Regular (G)

Fund Class Equity – Diversified Equity - Diversified

Inception Date 18-Dec-2020 22-Jan-2020

Since INC (%) 10.10 [0.39]

NAV Date 01-Apr-2021 01-Apr-2021

NAV(Rs.) 11.02 9.95

1 WEEK (%) 4.05 5.12

1 MONTH(%) 0.71 [0.43]

3 MONTHS (%) 9.19 9.02

6 MONTHS (%) 0 25.47

1 YEAR (%) 0 47.73

Table no. 4.3

5.2.b HDFC Gilt Fund Direct

Summary Info:

32
Fund Name : HDFC Mutual Fund

Scheme Name : HDFC Gilt Fund Direct

AMC : HDFC Mutual Fund

Type : Open

Category : Gilt Funds - Medium & Long Term

Launch Date : 16-Jul-01

Fund Manager : Anil Bamboli

Net Assets (Rs. cr) : 1851.51

Table no. 4.4

HDFC Gilt Fund Direct - NAV Details

NAV Date : 31-Mar-21

NAV [Rs.] : 11.71

Buy/Resale Price [Rs.] : 0

Sell/Repurchase Price [Rs.] : 0

Entry Load % : NIL

Exit Load % : Nil

Table no. 4.5

Comparison with ICICI Pru Gilt Fund

Scheme Name HDFC Gilt Fund (D) ICICI Pru Gilt Fund (D)
33
 Gilt Funds - Medium & Long Gilt Funds - Medium & Long
Fund Class Term Term
Inception Date 25-Jul-2001 18-Feb-2000
Since INC (%) 7.62 9.32
NAV Date 31-Mar-2021 31-Mar-2021
NAV(Rs.) 11.71 16.07
1 WEEK (%) 0.06 [0.07]
1 MONTH (%) 0.78 0.68
3 MONTHS
(%) [1.32] [0.44]
6 MONTHS
(%) 1.38 2.28
1 YEAR (%) 6.08 8.28

5.2.c HDFC Hybrid Debt Fund Growth

Summary Info:

Fund Name : HDFC Mutual Fund

Scheme Name : HDFC Hybrid Debt Fund Growth

AMC : HDFC Mutual Fund

Type : Open

Category : Hybrid - Debt Oriented

Launch Date : 17-Nov-03

Fund Manager : Shobhit Mehrotra

34
Net Assets (Rs. cr) : 2438.64

Table no. 4.7

Comparison with Franklin Indian Debt Hybrid Fund

Scheme Name HDFC Hybrid Debt Fund (G) Franklin India Debt Hybrid Fund - (G)

Fund Class Hybrid - Debt Oriented Hybrid - Debt Oriented

Inception Date 26-Dec-2003 28-Sep-2000

Since INC(%) 10.25 9.50

NAV Date 31-Mar-2021 01-Apr-2021

NAV(Rs.) 53.93 64.34

1 WEEK(%) 0.39 0.88

1 MONTH(%) 0.74 0.77

3 MONTH(%) 3.01 2.20

6 MONTH(%) 12.70 8.70

1 YEAR(%) 21.63 17.70

Table no. 4.8

35
 Chapter 6

Data Analysis and Interpretation

DATA ANALYSIS
The data collected were analyzed on various parameters since the main objective of the study
involves in evaluating the performance among the schemes needs to be focused in different
angles. All the data are analyzed with the help of statistical tool and also based on the current
scenario information of the mutual fund Industry.

1.1 WHAT IS YOUR ANNUAL INCOME?

55 responses

INTERPRETATION :

The most of the response about 58.9% is below 1 lakh and about
28.6% is between 1 lakh and 5 lakh and 7.1% is between 5 lakh and
10 lakh and 4% is above 10 lakh.
36
1.2 ARE YOU AWARE OF MUTUALS FUNDS ?

55 REPONSES

INTERPRETATION:

The 93% of the reponse is aware of mutual funds and 7% of response is not
aware of mutual funds .

1.3 WHICH OF THE MUTUAL FUNDS HAVE YOU HEARD ABOUT?

55 REPONSES

INTERPRETATION:
37
The 60% response is for HDFC Mutual Fund and 34.5 %is for ICICI Mutual
fund and 3.6% is for SAMCO Mutual fund and 1.8% is for other .

1.4 WHAT PERCENTAGE % OF MONTHLY SALARY DO YOU SAVE ?

55 RESPONSES

INTERPRETATION:

The response upto 10% save by 62.5% of people and 11to 20% save by 25%
and 21 to 30% save by 5.4% and above 30% save by 7.1%.

38
1.5 WHAT KIND OF INVESTMENT DO YOU PREFER?

INTERPRETATION:

The pie diagram shows short term investment is 29.8% and long term
investment is 24.6% and both term investment is 45.6%.

1.6 ARE YOU STATISFIED WITH THE SERVICES OF HDFC MUTUAL

FUND?

55 REPONSES

INTERPRETATION :

39
The 78.9% of the people are statisfied with the services of HDFC mutual fund
and 21.1% of people are not statisfied with the service of HDFC mutual fund.

1.7 HOW MANY TYPES OF MUTUAL FUND SERVICE DOES HDFC

MUTUAL FUND PROVIDE?

55 RESPONSES

INTERPRETATION:

37.5% People says 1 type of mutual fund and 51.8% people says 3 type and
10.7% people says 4 type .

1.8 WHICH MUTUAL FUND IS BEST IN HDFC ?

55 RESPONSES

40
INTERPRETATION:

The pie diagram shows 44.6% large mid cap fund and 35.7% flexi cap growth
and 19.6% multi asset fund growth.

1.9 WHAT DOES NAV IN MUTUAL FUND STAND FOR ?

55 RESPONSES

INTERPRETATION:

The responses for net asset value is 66.1% and for net accuired value is 16.1%
and net amount valuation is 17.9%.

1.10 MUTUAL FUND IN COUNTRY ARE REGULATED

BY?
55 RESPONSES

41
INTERPRETATION :

The pie diagram shows 19.6% people regulate IRDA and 8.9% people regulate
NABARD and 53.6% people regulate SEBI and 17.9% people regulate RBI.

42
 Chapter 7

FINDINGS AND CONCLUSION

Findings

The project was aimed at analyzing the performance of the funds under consideration in
respect of their, returns, risk and sectoral allocation. The following findings were derived
from those analyses

 The overall performance of the schemes shows that there was a high return in a year
when compared to other financial years.
 The equity funds were found to perform better than Income and Balanced fund. Since
the returns were comparatively high and particularly focused during the beginning of
the year the returns were almost massive for the investors.
 HDFC Income Fund performance with respect to return and risk shows that it was
yielding high returns with lower risk rate when compared to its competitors.
 The HDFC Hybrid Debt Fund was giving more returns from Franklin India Debt
Hybrid Funds starting from 3rd month of commencement.
 HDFC Gilt Funds were giving higher returns at start but it eventually started to
decline and ICICI Pru Gilt Funds increased the returns from the declining point of
HDFC Gilt Funds.

CONCLUSION

To conclude,

Based on the analysis carried over on the various category of schemes shows that the
performance was varying over the period of time. The performance of the fund schemes were
good during the first years showing that if market condition is performing well obviously the
funds’ performance will also positively respond towards it.

43
It clearly states that Mutual fund past performance is no way indicator for the future benefits.
Since the investment style is to earn high return associating with high risk. If the

market condition seems to be active and prospering then it can be a motivated situation for
the investors to reap high benefits through investing in such a boom period.

There is tremendous scope for Mutual funds, as the industry grows more and more, the return
on mutual funds investment is not going to be all that important but the quality of services
they offer to investors. The investor awareness is the need of the day and hence every mutual
fund has to make concerted effort to enlighten the investors. It is a well-recognized fact that
the distorted return expectations of the investor (that is, the expectation of high return with an
inhibition to bear the corresponding high risk) only retard the growth of the industry. This
calls for the active support and involvement of the Association of Mutual Funds in India
(AMFI) to educate the investors so as to make them to assess mutual fund investments in its
right perspective.

44
 Chapter 8

SUGGESTIONS AND RECOMMANDATIONS

The Findings and the interpretations given in this project were based on the past performance,
it may or may not be reflected in the future performance, so the investors were suggested to
take due diligence in investing in the funds. It is the also to be noted that the interpretations
and the suggestions given in this project were subject to change when more funds are put
under analysis. The Following are the few suggestions:

 Generally, to capitalize on the benefit of the power of compounding the investor is

expected to stay in fund for at least three years
 The Investor shall invest their money under systematic investment plan, to get the
benefit of the averaging effect.
 It is always better to watch the market and follow the practice of Active investment
strategy than the passive investment strategy.
 HDFC Prudence’s Price earning ration seems to be lower, if measures are taken it can
be topper in the Balanced Fund category.
 HDFC Hybrid Fund had performed well during the past 3 years and if it has to
continue its performance an active investment strategy had to be adopted.
 Investors should consider in buying more and more of Equity funds
 Investors should always be alert and careful while investing cause mutual funds
tagline itself says that mutual funds are subject to market risk.
 Investors should always invest in listing company’s and funds
 Mutual funds gather scattered small savings into a common fund of sizeable
amount.

 Small investors’ savings collected by mutual funds are invested in companies’

securities.

 Mutual funds have expertise investment and portfolio management system.

 Due to diversified portfolio the risk is spread out and stable return for investor can
be possible.
45
 The return earned by mutual funds is distributed among the investors after
deducting the management cost.
 Mutual funds’ operation needs lot of professionalism and expertise. Collecting the
funds are easy task but the prudent and professional management should be paid more
attention.

46
 Bibliography

Prasanna Chandra, investment analysis and Portfolio management, (2004) Tata McGraw- hill
publishing Company Limited.

S.P. Gupta, Statistical Method, (2000) sultan chand and sons. .

Dr. S. Guruswamy, Financial Services and System, (2004) Vijay Nicole imprints private
limited.

Webliography

https://www.investopedia.com/terms/m/mutualfund.asp

https://www.indiainfoline.com/mutualfunds/fundhouses/hdfc-mutual-fund/funds-
portfolio/arbitrage%20funds/21273

https://www.mutualfundindia.com/Home/MfBasics

https://en.wikipedia.org/wiki/Mutual_fund

https://www.google.com/search?q=hdfc+mutual+fund+shareholding+pattern+of+amc&tbm=
isch&ved=2ahUKEwjTipqv0-HvAhVXcX0KHWcLD-AQ2-
cCegQIABAA&oq=hdfc+mutual+fund+shareholding+pattern+of+amc&gs_lcp=CgNpbWcQ
A1CT7wFYpJcCYLWZAmgAcAB4AIABgwGIAasMkgEEMy4xMpgBAKABAaoBC2d3cy
13aXotaW1nwAEB&sclient=img&ei=hyZoYJOrFNfi9QPnlryADg&bih=722&biw=1519&h
l=en#imgrc=ehZV3jPx14vKsM

47
 ANNEXURES

1.NAME:

2.EMAIL ID:

3.GENDER:

FEMALE

MALE

OTHER

4..AGE

Under 18

18-25

26-35

36-above

5.OCCUPATION

Student

Service

Business

Professional

48
6. ANNUAL INCOME

Below 1 lakh

1 lakh -5 lakh

5 lakh - 10 lakh

Above 10 lakhs

7. ARE YOU AWARE ABOUT MUTUALS FUNDS ?

Yes

No

8. WHICH OF THE MUTUALS FUNDS HAVE YOU HEARD ABOUT?

HDFC mutual fund

ICICI mutual fund

SAMCO mutual fund

Other

9. WHAT PERCENTAGE % OF MONTHLY SALARY DO YOU INVEST ?

Upto 10%

11-20%

21-30%

Above-30%

49
10. WGAT KIND OF INVESTMENT DO YOU PREFER?

Short Term

Long Term

Both

11. ARE YOU STATISFIED WITH THE SERVICES PF HDFC OF INDIA?

YES

NO

12. HOW MANY TYPES OF MUTUAL FUNDS SERVICES DOES MUTUAL FUND
PROVIDE ?

13. WHICH MUTUAL FUND IS BEST IN HDFC ?

HDFC LARGE MID CAPE FUND DIRECT GROWTH

HDFC FLEXI CAP GROWTH

HDFC MULTI ASSET FUND GROWTH

14. WHAT DOES NAV IN MUTUAL FUND STANDS FOR ?

Net Asset Value

Net Accuired Value

New Amount Valution

50
15. .MUTUAL FUND IN COUNTRY ARE REGULATED BY ?

IRDA

NABARD

SEBI

RBI

51