PROJECT REPORT

(Submitted for the degree of B.Com Honours in Accounting and Finance under the University
Of Calcutta)

HDFC MUTUAL FUND AND ICICI PRUDENTIAL MUTUAL FUND

AND SBI MUTUAL FUND: A SURVEY AMONG CUSTOMERS

Submitted by Name of the Candidate: SUSMITA MONDAL

Registration No.: 043-1212-0576-20
Roll No: 201043-11-0139
College ROLL: 205471

Name of the College: HERAMBA CHANDRA COLLEGE

Supervised by
SATADRUTI CHAKRABORTY BANERJI
HERAMBA CHANDRA COLLEGE

APRIL 2023

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 SUPERVISOR’S CERTIFICATE

This is to certify that, a student of B. Com. Honours in Accounting and Finance of in business
of HERAMBA CHANDRA COLLEGE under the University of Calcutta has worked under
my supervision and guidance for his project work and prepared a project report with the title
HDFC MUTUAL FUND AND ICICI PRUDENTIAL MUTUAL FUND AND SBI
MUTUAL FUND: A SURVEY AMONG CUSTOMERS. The project report that he is
submitting, is his genuine and original work to the best of my knowledge.

Place: Kolkata SATADRUTI CHAKRABORTY BANERJI

Date: Department of Commerce
HERAMBA CHANDRA COLLEGE

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 STUDENT’S DECLARATION

I hereby declare that the project work with the title HDFC MUTUAL FUND AND ICICI
PRUDENTIAL MUTUAL FUND AND SBI MUTUAL FUND AND SBI MUTUAL FUND:
A SURVEY AMONG CUSTOMERS submitted by me for the partial fulfillment of the
degree of B. Com. Honours in Accounting and Finance under the Calcutta University is my
original work and has not been submitted either to any other University /Institution for the
fulfilment of the requirement for any course of study.

I also declare that no chapter of this manuscript in whole or in part has been
incorporated in this report from any earlier work done by others or by me. However, extracts
of my literature which has been used for this report has been duly acknowledged providing
details of such literature in the references.

Place: Kolkata Signature: SUSMITA MONDAL

Date: Roll No.: 201043-11-0139
Registration No.: 043-1212-0576-20

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 ACKNOWLEDGEMENT

I am deeply indebted to my distinguished supervisor Satadruti Chakraborty Bannerjee,

Associate Professor, HERAMBA CHANDRA COLLEGE, for her expert advice, able
guidance, utmost involvement and whole hearted co-operation, which inspired me to
complete this task successfully. I record my sincere gratitude and thanks to her for having
steered me through my research work.

My family members, mostly my parents have been a source of tremendous

strength. I would like to whole heartedly thank them all for their constant support,
encouragement and valuable insights in fine-tuning the research work.

I take this opportunity to express my sincere thanks to all my well-wishers for

facilitation to carry out my research work.

SUSMITA MONDAL

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 Contents

CHAPTER
INTRODUCTION 6-10
1

CHAPTER
CONCEPTUAL FRAMEWORK 11-25
2

CHAPTER SURVEY AND ANALYSIS OF SAMPLE

26-42
3

CHAPTER CONCLUTION AND RECOMMENDATION 43

4

BIBLIOGRAPHY 44
QUESTIONNAIRE 45-47

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 CHAPTER 1: INTRODUCTION

Background of the study

The Indian financial system, like any such system, is based on four basic components like
financial markets, financial institutions, financial services and financial instruments. All play
important roles in smooth transfer of funds and their allocation.

Over the years, the financial services in India have undergone revolutionary changes and had
become more sophisticated, in response to the varied needs of the economy. The process of
financial sector reforms, economic liberalisation and globalisation of Indian Capital Market
had generated and augmented the interest of the investors in equity. But, due to inadequate
knowledge of the capital market and lack of professional expertise, the common investors are
still hesitant to invest their hard earned money in the corporate securities. The advent of
mutual funds has helped in garnering the investible funds of this category of investors in a
significant way. As professional experts manage mutual funds, investment in them relieves
investors from the emotional stress involved in buying and selling of securities.

A Mutual Fund is a scheme in which several people invest their money for a financial cause.
The collected money is invested in Capital Markets and the money which they earn is divided
based on the number of units which the investors hold. The Mutual Fund industry was started
in India in a small way with the UTI creating what was effectively a small savings division
within the RBI. Due to this RBI gave a go ahead to public sector banks and financial
institutions to start Mutual Funds in India and their success gave way to Private Sector
Mutual Funds Mutual Funds have to follow specific rules and regulations which are
prescribed by the SEBI. AMFI is the apex body of all the Asset Management Companies
(AMC) and is registered with the SEBI. We can see the aggressive expansion of mutual

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Funds from the last few years. Nowadays there is a lot of competition within the Mutual
Funds companies as many Mutual Funds have entered the industry.

Objective of the study

In view of the above, I have undertaken the current project work to assess the scenario of the
Indian mutual fund industry with a special focus on the appraisal of investor perception about
two selected mutual fund houses — HDFC Mutual Fund and ICICI Prudential Mutual Fund
and SBI Mutual fund. These two funds have been selected as they are at present the top two
mutual fund houses in terms of average assets under management (AAUM). In particular, this
study is a humble attempt to:

• To study the basic concepts of mutual funds;

• To study the origin and development of mutual funds industry in India;

• To compare the investor perception about two selected mutual fund houses — HDFC
Mutual Fund and ICICI Prudential Mutual Fund; and

• To draw appropriate conclusion about the performance of the schemes based on the study.

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Literature Review of Mutual Funds in India

Agarwal, R K. and Mukhtar, W. (2010) says that today mutual funds represent the most
appropriate opportunity for small investors. As financial markets become more complex,
investors need a financial intermediary who provides the required knowledge and
professional expertise on successful investing. This analysis covers a broad range of equity
growth funds. Twentyfour Equity growth funds have been studied for the application of
composite portfolio performance measures like Treynor ratio, Sharpe ratio, Jensen ratio,
Information ratio, M squared, Specific ratio, etc.

Rao, D. N. and Rao, S. B. (2009) had conducted research on commonly held belief among
Indian investors and Fund Managers that (A) Market outperforms Balanced and Income
Funds during Bull run (B) Balanced and Income Funds outperform the stock market during
Bear run, (C) Market outperforms Balanced and Income Funds over a long holding period (a
minimum period of three years). The objective of the study was to empirically investigate
whether the above stated perceptions are valid in the Indian context. The performance of the
47 Balanced and 72 Income Funds were analyzed in terms of Return, Risk, Return per unit of
Risk and Sharpe ratio over the past three years (2006, 2007 and 2008) during which period
the Indian Stock Market had witnessed much volatility. Further, the performance of these
funds was compared with that of the Market and Benchmark Indices. They concluded that
Market outperformed both the Balanced and Income Funds over Bull runs and 3-year periods

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while both the funds outperformed the Market over Bear run period which confirms the
popular belief of the investors and Fund Managers in India.

Agrawal, D and Patidar, D (2009) have conducted a study on Mutual funds are key
contributors to the globalization of financial markets and one of the main sources of capital
flows to emerging economies. This article provides an overview of mutual fund activity in
emerging markets. It describes about their size and their asset allocation. The study revealed
that the performance is affected by the saving and investment habits of the people and at the
second side the confidence and loyalty of the fund Manager and rewards- affects the
performance of the MF industry in India.

Mukherjee (2011) studied the performance of 54 equity-linked schemes of various mutual

fund houses and concluded that since the launch of the maiden mutual fund scheme US 64 in
1964, the Indian mutual fund industry has grown manifold in respect of all relevant
parameters – number of funds, range of products, investor base, and assets under
management. However, during the decade, there has been a gradual shift of investor base
towards private sector funds from the public sector. Several public sector mutual funds have
wound up their business during this period. India and its neighbours are lagging way behind,
occupying a miniscule share of the total fund assets globally.

Methodology applied

The methodology adopted in this study is explained below:

In this study my focus is upon perception of investors regarding HDFC Mutual fund and
ICICI Prudential Mutual Fund and SBI Mutual Fund. The research is exploratory in nature.

I have used newspapers, magazines related to business and finance and also websites.

I have used questionnaire as a primary source for collecting data for my study have collected
my secondary data from websites and journals.

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Limitations of the study

There are some limitations of my study. Those are as follows:

The sample taken by me is very small in size to compare two giant mutual fund houses each
with a plethora of schemes.

The data collected by me is not much reliable because many investors chosen by me have
invested in HDFC MF.

All the parameters have not been tested due to shortage of time.

Investors chosen for study are not fully aware of all the terms and conditions related to
Mutual Funds.

So, it is very difficult to construct right information from them.

Plan of work

This research work is organised into four chapters as detailed below:

➢ Chapter One makes an introductory approach to the overall study;

➢ Chapter Two deals with the conceptual frame-work regarding mutual funds and the current
Indian scenario;

➢ Chapter Three analyses the data obtained from field survey among investors regarding
their perception about two selected mutual fund houses HDFC Mutual fund and ICICI
Prudential Mutual Fund; and

➢ Chapter Four concludes the entire study with some recommendations.

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 CHAPTER 2: CONCEPTUAL FRAMEWOR

What is a Mutual Fund?

Among the different investment avenues available to retail investors, mutual funds offer an
excellent opportunity to channelize their small savings into investments. A mutual fund is a
mechanism that pools the savings of a large number of investors who share a common
financial goal. The money so collected is then invested in capital market instruments such as
shares, debentures, bonds, etc. and in money market instruments such as treasury bills,
certificates of deposit, commercial paper and interbank call money, etc. Sometimes, the
money is invested in real assets also, e.g., gold and property. The incomes earned through
these investment processes and appreciation as realised thereof are shared by the investors in
proportion to their investments. A mutual fund is, thus, regarded as the most sensible and
efficient vehicle of investment, globally, for the common man as it offers an opportunity to
invest in a diversified, professionally managed basket of securities at a relatively low cost and
risk as well. The following figure explains the working principle of a mutual fund. In this
context, it is worthwhile to note the concept of a mutual fund as outlined by the Securities
Exchange Board of India (SEBI) which states that a ‘“mutual fund” means a fund established
in the form of a trust to raise monies through the sale of units to the public or a section of the

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public under one or more schemes for investing in securities, including money market
instruments or gold or gold related instruments or real estate assets.

The terms ‘fund’ and ‘scheme’ are many a times interchangeably used. For most mutual
funds, shareholders are free to sell their shares at any time, although the price of a share in
mutual fund may fluctuate daily, depending upon the performance of the securities held by
the fund. Mutual funds offer choice, liquidity and convenience, but charge fees an often
require a minimum investment.

Types of Mutual Fund Schemes

Mutual Fund schemes in India can be classified as follows:

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By Tenure —

• Open-ended Schemes

• Close-ended Scheme

By Investment Objective —

• Growth/Equity Schemes

• Income/Debt Schemes

• Balanced Schemes

• Money Market

Schemes Other Schemes —

• Tax Savings Schemes

• Index Schemes

• Gold Exchange Traded Schemes

• Real Estate Schemes

• Country Funds

Meaning of Net Asset Value (NAV)

In the context of mutual funds, NAV per share is computed once a day based on the closing
market prices of the securities in the fund’s portfolio. All mutual funds’ buy and sell orders
are processed at the NAV of the trade date. However, investors must wait until the following
day to get the trade price. In short, The NAV per unit is the market value of securities of a
scheme divided by the total number of units of the scheme on any particular date .

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 OBJECTIVES OF MUTUAL FUND

Fund Types

There are three basic types of mutual funds. Equity funds invest exclusively in stock. Fixed-
income funds invest in bonds, and money market funds invest in Treasury bills and short-
term, liquid, highquality securities. All mutual funds are made up of one or more of these
three asset classes. Funds are sometimes named, ostensibly, for their objective and have
catchy names such as Global, International, Growth and Overseas. Evaluate the prospectus
rather than drawing a conclusion from the fund's title.

Diversification

One consistent mantra of investing is diversification. Simply put, you should not place your
entire investment in one company. Because mutual funds are based on the securities of many
companies, buying shares in a fund automatically diversifies your portfolio. This might be an
otherwise impossible task. Consider that one share of Apple Inc. trades for as much as $600,
as of 2012. You might not have enough money available to adequately diversify.

Goals

To select the funds in which to invest, a clear understanding of your investment goals is
crucial. If you don't have clear investment objectives, you might as well choose your fund by
throwing a dart or tossing a coin. If you are young with a healthy earnings future ahead,
investment in a fund that is geared more toward growth than safety may be appealing.
Alternatively, if you are approaching retirement, a more conservative fund such as a balanced
income fund may suffice. If you are already enjoying your retirement, you might be a
candidate for a money market fund, which offers little in the way of return but is extremely
low in risk. Become acquainted with the securities in the fund you are considering. This will
help ensure your comfort level.

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 Costs

Mutual funds earn income from fees charged to account holders. Transaction fees are
incurred each time you buy or sell shares. These fees are couched in the term "load." Then
there are annual fees, which are akin to a membership fee and serve to pay operating
expenses. Taken as a whole, these fees can range from 0.2 percent to as much as 2 percent.
The average fees are 1.3 percent to 1.5 percent. If you are in a specialty or global fund, you
will likely pay more because they require managers with a higher level of expertise. You don't
need to break out the calculator to see how these fees can be a drag on your return. High fees
do not guarantee superior performance. Select your mutual fund on the basis of its track
record and don't be lulled into thinking a high fee will guarantee exceptional performance, as
there usually is no correlation.

Benefits of investing in Mutual Fund

Mutual funds are well known for their benefits in the following forms to their investors:

o Professional expertise in buying and selling of units

o Professional management of securities transactions
o Opportunity to hold wide spectrum of securities
o Long-term planning by fund managers
o Safety of funds
o Spreading of risk through diversification
o Freedom from stress of emotional involvement
o Automatic re-investment of dividends and capital gains, wherever applicable
o Dissemination of information on the performance of the schemes and their fund
managers
o Investor protection

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 Mutual fund is a pool of money from many investors that is used to invest in one
portfolio of securities for the benefit of all the investors in the fund. Mutual fund
investors buy shares in the mutual fund. Each share represents a piece of every
investment made by the money managers that oversee the mutual fund. Although
mutual funds allow you to invest in many sectors of the economy at once, mutual
funds do have limitations worth considering before you invest.

LIMITATIONS OF MUTUAL FUND

Decisions
Since mutual funds are professionally managed, you do not have any control in how
the money in the mutual fund is invested. Money managers are responsible for
researching and interpreting data related to the investments that make up the mutual
fund. As a result, you have no way of influencing what investments are bought and
sold by the money manager.

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 Costs

The returns you generate by investing in a mutual fund are limited in part by the cost of
maintaining the mutual fund. According to the U.S. Securities and Exchange Commission, a
mutual fund is similar to a business. The mutual fund incurs costs to buy and sell investments
on the open financial market place. Some of these fees may include advising fees, transaction
costs, and fees for marketing and distribution. These fees reduce the returns you make from
the investments in your mutual fund.

Projections

A prospectus for a mutual fund is one of the most common sources of information for
investors. A key consideration when you examine a prospectus is that projections of future
earnings are only estimates of how the mutual fund may perform in the future. Projections
are commonly based on past performance, but there is no guarantee that a mutual fund will
generate the same level of returns as past years.

Insurance

The money you invest in a mutual fund is not insured by the Federal Deposit Insurance
Corporation. If your bank participates in FDIC insurance, your deposits are repaid to you if
your bank fails, but the money you invest in mutual funds is not protected against investment
losses or bank closure.

Risk

Mutual funds are exposed to risk like any other investment in the financial markets. Mutual
funds try to minimize risk by investing in an assortment of securities like stocks and short-
and long-term bonds. This strategy is commonly called diversification, and it protects you
from losses in one area of the portfolio with gains in another. While mutual funds invest in
several sectors, some specialize in certain investments like money market funds, bond funds
and stock funds, which carry additional risk of loss.

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 The concept of Assets under Management (AUM)
The phrase Assets under Management or AUM is a financial term denoting the market value
of all the funds being managed by a mutual fund house/asset management company, on
behalf of its clients, investors, depositors, etc. This metric is very popular within the financial
industry and is a sign of the size and success of any mutual fund. The AUM figure is usually
not a constant one. It is reduced due to redemptions and withdrawals and can increase when
new assets are brought into the scheme in question.

Legal framework of mutual funds

The mutual funds, as defined in SEBI (Mutual Funds) Regulations 1996, are modelled after
the UK's unit trusts, and are basically contractual plans. The legal framework for India's
mutual funds is built around the concept of a sponsor, a mutual fund, a board of trustees, and
an asset management company (AMC). The sponsor establishes the mutual fund, the board of
trustees, and the AMC. SEBI regulations require that a sponsor must own at least 40 per cent
share of an AMC and have a track record of at least five years in the financial industry. The
concept of a mutual fund under SEBI regulations, unlike that in Europe and USA, does not
mean an individual fund offered as a product to final investors. Such individual funds are
referred to as schemes. A mutual fund is defined as a fund established in the form of a trust,
and with a trust deed. It is, therefore, a pass-through vehicle that does not make decisions or
have the status of a juridical person. In fact, the typical use of the term mutual fund in India is
similar to what is known as a fund family in the USA.

The board of trustees has the authority to make all decisions related to the mutual fund, and
is governed by both SEBI regulations and the Indian Trusts Act. Many of these mutual funds
take the form of a trustee company, in which case the Companies Act 1956 applies. The
Board of Trustees shoulders all the liabilities of a mutual fund, retains oversight over the
AMC and has a good role in protecting the rights and interests of the final investors. Two-
thirds of the trustees must be independent of the sponsor. The AMC, upon approval from the
Board of Trustees and SEBI, establishes and manages a scheme under the mutual fund. The
operations of mutual funds are governed by 89 regulations in total, promulgated by SEBI in
exercise of the powers conferred by section 30, read with clause (c) of subsection (2) of
section 11 of the Securities and Exchange Board of India Act 1992. The current set of mutual

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fund regulations was originally promulgated in 1996, and has since been amended from time
to time.

“In order to remove any difficulties in the application or interpretation of these regulations”
Regulation 77 of the mutual funds regulations additionally authorises SEBI to issue
“clarifications and guidelines in the form of notes or circulars which shall be binding upon
the sponsor, mutual funds, trustees, asset management companies and custodians”.

The SEBI Regulations of 1996 comprise eleven chapters and twelve schedules and cover the
following aspects: (i) registration of mutual funds; (ii) constitution and management of
mutual funds and operation of trustees; (iii) constitution and management of asset
management companies and custodians; (iv) launching, administration and winding up of
schemes; (v) investment objectives and valuation policies regarding investments; (vi) aspects
regarding real estate mutual fund schemes; (vii) general obligations of mutual funds and asset
management companies including disclosure norms; (viii) inspection and audit of fund
schemes, and investigation by SEBI; (ix) procedure for action in case of any default by a
mutual fund; and (x) other relevant miscellaneous aspects.

The following figure explains the relationship:

SPONSOR

AMC
TRUSTE
E
MUTUAL
FUND

CUSTODIAN
TRANSFER
AGENT

UNIT HOLDERS

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Mutual fund industry in India:

The Indian mutual fund industry is among the top fifteen nations in terms of assets under
management. As a global significant player, the industry is attracting a bigger chunk of
household investments. The mutual fund industry in India started in the year 1963 with the
formation of Unit Trust of India, at the initiative of the Government of India and Reserve
Bank of India. The history of mutual funds in India can be broadly divided into the following
four distinct phases:

The First Phase – (1964-1987)

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by
the Reserve Bank of India and functioned under the Regulatory and administrative control of
the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial
Development Bank of India (IDBI) took over the regulatory and administrative control in
place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988
UTI had Rs. 6,700 crores of assets under management

The Second Phase – (1987-1993)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks
and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India
(GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987
followed by Can bank Mutual Fund (December ’87), Punjab National Bank Mutual Fund
(August ’89), Indian Bank Mutual Fund (November ’89), Bank of India (June ’90), Bank of
Baroda Mutual Fund (October ’92). LIC established its mutual fund in June 1989 while GIC
set up its mutual fund in December 1990.

At the end of 1993, the mutual fund industry had assets under management of Rs.47004
crores.

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The Third Phase – (1993-2003)

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

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and
revised Mutual Fund Regulations in 1996. The industry now is guided by the SEBI (Mutual
Fund) Regulations 1996. The number of mutual fund houses went on increasing during the
phase, with many foreign mutual funds setting up funds in India and also the industry
witnessed several mergers and acquisitions. At the end of January 2003, there were 33 mutual
funds with total assets of Rs.121805 crores. The Unit Trust of India with Rs. 44,541 crores of
assets under management was way ahead of other mutual funds.

The Fourth Phase – (2003 onwards)

In February 2003, following the repeal of the Unit Trust of India Act 1963, UTI was
bifurcated into two separate entities. One was the Specified Undertaking of the Unit Trust of
India with assets under management of Rs.29835 crores as at the end of January 2003,
representing broadly, the assets of US 64 scheme, assured return schemes and certain other
ones. The Specified Undertaking of Unit Trust of India or UTI has since been functioning
under an administrator and under the rules framed by the Government of India and does not
come under the purview of SEBI’s Mutual Fund Regulations. The other arm was the UTI
Mutual Fund or UTI II, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI
and is covered by the Mutual Fund Regulations of 1996. With the bifurcation of the erstwhile
UTI which had in March 2000 more than Rs.76000 crores of assets under management and
with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations,
and with recent mergers taking place among different private sector funds, the mutual fund
industry is ventured well into its current phase of consolidation and growth.

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 Association of Mutual Funds in India (AMFI)

The Association of Mutual Funds in India (AMFI) is dedicated to developing the Indian
Mutual Fund Industry on professional, healthy and ethical lines and to enhance and maintain
standards in all areas with a view to protecting and promoting the interests of mutual funds
and their unit holders. AMFI, the association of SEBI registered mutual funds in India of all
the registered Asset Management Companies, was incorporated on August 22, 1995, as anon-
profit organization. As of now, all the 43 Asset Management Companies that are registered
with SEBI are its members.

Asset management companies in India

A. Bank Sponsored

1. Joint Ventures - Predominantly Indian

• BOI AXA Investment Managers Private Limited

• Canara Robeco Asset Management Company Limited

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• SBI Funds Management Private Limited

• Union Asset Management Company Private Limited (formerly Union KBC Asset
Management Co. Pvt. Ltd)

2. Others

• Baroda Asset Management India Limited (formerly known as Baroda Pioneer Asset
Management Co. Ltd.)

• IDBI Asset Management Ltd.

• UTI Asset Management Company Ltd

B. Institutions

1. Indian

• IIFCL Asset Management Co. Ltd.

• LIC Mutual Fund Asset Management Limited

C. Private Sector

1. Indian

• DSP Investment Managers Private Limited

• Edelweiss Asset Management Limited

• Essel Finance AMC Limited

• IDFC Asset Management Company Limited

• IIFL Asset Management Ltd. (Formerly known as India Infoline Asset Management Co.
Ltd.)

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• IL&FS Infra Asset Management Limited

• Indiabulls Asset Management Company Ltd.

• ITI Asset Management Limited

• JM Financial Asset Management Limited

• Kotak Mahindra Asset Management Company Limited (KMAMCL)

• L&T Investment Management Limited

• Mahindra Asset Management Company Pvt. Ltd.

• Motilal Oswal Asset Management Company Limited

• PPFAS Asset Management Pvt. Ltd.

• Quant Money Managers Limited

• Quantum Asset Management Company Private Limite

• Sahara Asset Management Company Private Limited

• Shriram Asset Management Co. Ltd.

• SREI Mutual Fund Asset Management Pvt. Ltd.

• Sundaram Asset Management Company Limited

• Tata Asset Management Limited

• Taurus Asset Management Company Limited

• YES Asset Management (India) Ltd.

2. Foreign

• BNP Paribas Asset Management India Private Limited

• Franklin Templeton Asset Management (India) Private Limited

• Invesco Asset Management (India) Private Limited

• MiraeAsset Global Investments (India) Pvt. Ltd.

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• Principal Asset Management Pvt. Ltd.

3. Joint Ventures - Predominantly Indian

• Aditya Birla Sun Life AMC Limited

• Axis Asset Management Company Ltd.

• HDFC Asset Management Company Limited

• ICICI Prudential Asset Management Company Limited

• Reliance Nippon Life Asset Management Limited

4. Joint Ventures - Predominantly Foreign

• HSBC Asset Management (India) Private Ltd.

5. Joint Ventures – Others

• DHFL PRAMERICA Asset Managers Private Limited

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 CHAPTER 3: SURVEY AND ANALYSIS OF SAMPLE

The top five Asset Management Companies in India

The top five mutual funds in India, in terms of average assets under management (AAUM),
are HDFC Mutual Fund, ICICI Prudential Mutual Fund, SBI Mutual Fund, Aditya Birla Sun
Life Mutual Fund and Reliance Mutual Fund (AMFI Newsletter October-December Quarter,
2020).

Mutual Fund September 2020 December 2020 %

(Rs. In Crores) (Rs. In Crores) Change

HDFC Mutual Fund 306,360 334,964 9.34

ICICI Prudential Mutual 310,257 307,735 -0.81
Fund
SBI Mutual Fund 253,829 264,353 4.15
Aditya Birla Sun Life 254,223 242,344 -4.67
Mutual Fund
Reliance Mutual Fund 244,843 236,256 -3.51

A. HDFC Mutual Fund

HDFC Mutual Fund is at now at the top in terms of the size of AUM. With fund size of a little
more than Rs. 3 lakh crore, it is one of the largest mutual fund companies or AMCs in the
country. HDFC Asset Management Company (AMC) was incorporated in 1999. It was
approved to act as AMC for HDFC Mutual Fund in 2000. Mr. Deepak S. Parekh is the
Chairman of HDFC Mutual Fund.

Top HDFC Mutual Fund schemes are:

I. HDFC Balanced Fund

II. HDFC Short Term Debt Fund

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B. ICICI Prudential Mutual Fund

With the AUM size of more than Rs. 3 lakh crore, ICICI Prudential Asset Management
Company Ltd. is the second largest asset management company (AMC) in the country. It is a
joint venture between ICICI Bank in India and Prudential Plc, in UK. It was started in 1993.
Mr. Nimesh Shah is the Chairperson of this AMC. Apart from mutual funds, the AMC also
caters to Portfolio Management Services (PMS) and Real Estate for investors.

Top ICICI Prudential Mutual Fund schemes are:

I. ICICI Prudential Balanced Advantage Fund

II. ICICI Prudential Long Term Plan

III. ICICI Prudential Banking and Financial Services Fund

C. SBI Mutual Fund

SBI Funds Management Private Limited is a joint venture between the State Bank of India
(SBI) and financial services company Amundi, a European Asset Management company in
France. It was launched in 1987. Ms. Anuradha Rao is the Managing Director and CEO. In
2013, SBI Fund Guru, an investor education initiative was launched.

Top SBI Mutual Fund schemes:

I. SBI Gold Fund – Growth

II. II. SBI Blue Chip Fund
III. III. SBI Small Cap Fund

D. Aditya Birla Sun Life Mutual Fund

Formerly known as Birla Sun Life Asset Management Company, this fund house is the 4 th
largest in terms of the AUM size. Presently it is known as Aditya Birla Sun Life (ABSL)
Asset Management Company Ltd. It is a joint venture between the Aditya Birla Group in
India and Sun Life Financial Inc of Canada. It was set up as a joint venture in 1994.

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 Top ABSL Mutual Fund schemes:

I. Aditya Birla Sun Life Tax Relief 96

II. Aditya Birla Sun Life Small & Midcap Fund
III. Aditya Birla Sun Life Advantage Fund.

E. Reliance Mutual Fund

With assets under management of approximately Rs. 2.5 lakh crore, Reliance Mutual Fund is
one of India’s leading mutual fund companies. A part of Reliance Anil Dhirubhai Ambani
(ADA) Group, Reliance Mutual Fund is one of the fastest growing AMCs in India. Reliance
Capital Limited (RCL) is the sponsor and Reliance Capital Trustee Co. Limited is the trustee
of Reliance Mutual Fund (RMF). It was registered on June 30, 1995. Reliance Mutual Fund
was originally Reliance Capital Mutual Fund and changed its name in 2004.

Top Reliance Mutual Fund schemes:

I. Reliance Tax Saver (ELSS) Fund

II. Reliance Top 200 Fund
III. Reliance Regular Savings Fund – Balanced
IV. Reliance Small Cap Fund

The sample funds: HDFC Mutual Fund and ICICI Prudential Mutual
Fund HDFC Mutual Fund and SBI Mutual Fund;-

HDFC Mutual Fund

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HDFC Mutual Fund is at the 2nd number by the size of AUM. With fund size of nearly Rs. 3
lakh crore, it is one of the largest mutual fund companies or AMC in the country. HDFC
Asset Management Company (AMC) was incorporated in 1999. It was approved to act as
AMC for HDFC Mutual Fund in 2000. Mr. Deepak S. Parekh is the Chairman of HDFC
Mutual Fund.

Products of HDFC Mutual Funds

a. Equity Funds

b. Balanced funds

c. Debt Funds

d. Liquid Funds

ICICI Prudential Mutual Fund

With the AUM size of approximately Rs. 3 lakh crore, ICICI Prudential Asset Management
Company Ltd. is the largest asset management company (AMC) in the country. It is a joint
venture between ICICI Bank in India and Prudential Plc, in UK. It was started in 1993. Mr.
Nimesh Shah is the Chairperson of this AMC. Apart from mutual funds, the AMC also caters
to Portfolio Management Services (PMS) and Real Estate for investors.

Products of ICICI Prudential Mutual Fund

a. Equity Schemes
b. Debt Schemes

c. Balanced Schemes

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 d. Liquid Schemes

e. Children Gift Fund

SBI Mutual Fund

SBI Mutual Fund is an Asset Management Company introduced by State Bank of India (SBI)
and incorporated in 1987 with its corporate head office located in Mumbai, India. SBIFMPL
is a joint venture between the State Bank of India, an Indian public sector bank, and Amundi,
a European asset management company. With the AUM size of approximately Rs. 7.2 Lakh
crore.

Products of SBI Mutual Fund

a. Equity Funds

b. Exchange Traded Funds

c. Hybrid Funds

d. Liquid Funds

e. Debt Funds

f. Tax Savings Funds

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The survey on the sample funds

I have done an analysis between the three Asset Management Companies. These three are
HFDC Mutual Funds and ICICI Prudential Mutual Funds and SBI Mutual Fund as these three
are the three top Mutual Funds in terms of AUM. I prepared a questionnaire comprising 11
questions and made 50 copies of it. After that, I went to 50 people in and around our local
locality and asked their opinion. After that I numbered all these questionnaires. The actual
objective of my study on this project is to know which company provides better returns. I
compare between HDFC Mutual Funds and ICICI Prudential Mutual Funds and SBI Mutual
Fund in this Project. The comparison is necessary so that the investors can find it useful for
making a proper idea about their investments. We can say that mutual fund is a very much
profitable tool for investment because of its low cost of acquiring fund, tax benefit, and
diversification of profits & reduction of risk. Many investors who have invested in mutual
funds have invested with HDFC MF and they also think that it provides better returns than
ICICI Prudential MF and also SBI Mutual Fund. There is also an effect of age on mutual fund
investors like old people and widows want regular returns than capital appreciation.
Companies can adopt new techniques to attract more and more investors. In my study I have
attempted a comparative analysis of the schemes of HDFC Mutual Fund and ICICI Prudential
Mutual Fund and SBI Mutual Fund in terms of investor perception.

Analysis of the responses in the survey

a. Do you invest in Mutual Funds?

Yes No
35 15

Do you invest in Mutual Fund?

Yes
No

Interpretation: 50 candidates out of 35 have invested in Mutual Fund

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b. Between HDFC and ICICI Prudential and SBI Mutual Fund, with which Company
do you have invested in Mutual Funds?

HDFC Mutual Fund ICICI Mutual Fund SBI Mutual Fund

18 10 22

Between HDFC and ICICI Prudential and SBI

Mutual Fund, with which Company do you have
invested in Mutual Funds?

HDFC
ICICI
SBI

Interpretation: Out of 50 candidates, 18 have invested in Mutual Funds with HDFC and 10
have invested with ICICI, and 22 have invested with SBI.

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c. What is the age of the investors?

18-25 26-35 36-45 Above 45

30 10 8 2

What is the age of the investors?

18-25
26-35
36-45
Above 45

Interpretation: There are 30 investors who have aged between 18 to 25 and 10 investors are
aged between 26 to 35 and 8 investors are aged between 36 to 45 and 2 investors are aged
above 45.

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d. What is your annual income?

Under Rs. 1 Lakh Rs. 1 Lakh - 5 Lakh More than Rs. 5 Lakh
30 12 8

What is your annual income?

Under Rs. 1 Lakh

Rs. 1 Lakh - 5 Lakh
More than Rs. 5 Lakh

Interpretation: There are 30 investors have annual income under 1 lakh, 12 investors have
annual income of 1 to 5 Lakh and 8 investors have annual income of more than 5 Lakh.

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e. From where you come to know about the schemes of Mutual Funds?

Family and relatives Friend Circle Company Other

Employees
12 33 4 1

Family and
Relatives
Friend Circle

Company
Employees
Other

Interpretation: 12 investors came to know about the Mutual Funds Schemes from Family
and Relatives, 33 knew from Friends Circle, 4 knew from Company Employees and 1 from
others.

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f. What is the duration of Investment?

Below 1 Year 1-4 years More than 4 Years

12 32 6

What is the duration of Investment?

Below 1 Year
1-4 Year
More than 4 Years

Interpretation: 12 Investors have time of investment for less than 1 year, 32 investors have
the investment duration of 1-4 years and 6 have more than 4 years.

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g. Are investors satisfied about the service and behaviour of the Company’s Employees?

Highly Satisfied Satisfied Neutral Dissatisfied

10 20 10 10

Are investors satisfied about the service and

behaviour of the Company’s Employees?

Highly Satisfied
Satisfied
Neutral
Dissatisfied

Interpretation: 10 investors are highly satisfied about the service provided and behavior of
the company’s employees while 20 are satisfied, 10 are neutral, 10 are dissatisfied and 5
investors are very dissatisfied.

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h. What is your Risk Profile?

Innovator Moderate Risk Adverse

25 10 15

What is your Risk Profile?

Innovator
Moderate
Risk Adverse

Interpretation: 25%investors are innovator means they like to take risk for more returns.
10% are moderate towards risk means they are indifferent towards risk. 15% are risk adverse
means they mainly try to avoid risk.

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i. What Investors feel about the Company Norms, Documentation and Formalities?

Highly Satisfied Satisfied Neutral Dissatisfied Very Dissatisfied

3 10 28 6 4

What Investors feel about the Company Norms,

Documentation and Formalities?

Highly Satisfied
Satisfied
Neutral
Dissatisfied
Very Dissatisfied

Interpretation: 15% investors are highly satisfied by company’s documentation policy

(filling up the forms etc.). 25% are satisfied, 40% never cares about it or are moderate
towards it, 15% are dissatisfied by it and 5% are very dissatisfied about it.

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j. What Investors say which Company provides better returns?

HDFC Mutual Fund ICICI Prudential Mutual SBI Mutual Fund

Fund
10 10 30

What Investors say which Company

provides better returns?

HDFC Mutual Fund

ICICI Prudential
Mutual Fund
SBI Mutual Fund

Interpretation: According to collected data 10 investors thinks that HDFC Mutual Funds
provides better returns whereas 10 think that ICICI Prudential Mutual Funds provides better
returns. And 30 investors think that SBI Mutual Fund provides best return.

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k. Would you like to exchange your investment with one another between HDFC
Mutual Funds and ICICI Prudential Mutual Funds?

Yes No
8 42

Would you like to exchange your investment

with one another between HDFC Mutual
Funds and ICICI Prudential Mutual Funds?

Yes
No

Interpretation: 8 investors said that they would like to change their investment with each
another between HDFC & ICICI. But 15 investors say that they are okay with their
companies and they would not like to exchange their investment

Findings:

In findings we can say that mutual fund is a very much profitable tool for investment because
of its low cost of acquiring fund, tax benefit, and diversification of profits & reduction of
risk. Many investors who have invested in mutual fund have invested with HDFC MF and
they think that it provides better returns than ICICI MF. And most of the people think SBI
MF is the best MF which provides best return. There is also an effect of age on mutual fund
investors like; old people and widows want regular returns than capital appreciation.
Companies can adopt new techniques to attract more and more investors. In my study, I done
a comparative analysis of the of HDFC Mutual Fund and ICICI Prudential Mutual Fund and I
have found that sample respondents consider HDFC MF better than ICICI Prudential MF. But

41 | P a g e
ICICI have also respondents and it can increase its investors by improving itself in some
terms.

a. We can say mutual fund is a best investment vehicle for the old as well as for those who
want regular returns on their investment. Would you like to exchange your investment with
one another between HDFC Mutual Funds and ICICI Prudential Mutual Funds? Yes No

b. Mutual fund is also better and preferable for those who want their capital appreciation.

c. Both HDFC MF and ICICI MF are performing very well in the Indian mutual fund sector.

d. There are also so many competitors involved who affect performance of both the fund
houses.

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 CHAPTER 4: CONCLUSION AND RECOMMENDATION

Conclusion:

On the basis of my research, I may conclude as follows.

A. Investors have more faith in SBI Mutual Fund and HDFC Mutual Funds than ICICI
Prudential Mutual Funds.

B. As the age increases investors are much satisfied, see more risk and become more risk
averse.

C. Old people and widows prefer lower risk.

D. Investors are not fully satisfied with the customer service of the selected fund houses.

E. Investors, in general, think that HDFC Mutual Funds provide better returns than ICICI
Prudential Mutual Funds. And SBI Provide best returns.

Recommendations:

I have some recommendations for the mutual fund authorities as stated below:

a. ICICI Prudential Mutual Fund should try to provide better returns to its investors as
compared to HDFC Mutual Fund. SBI MF is better than HDFC MF and ICICI PMF.

b. Three mutual funds should try to invest in better securities for better profits.

c. Three mutual funds should try to satisfy their customer by better customer service or by
improving customer relationship management.

d. Investors should be made fully aware of the concept of mutual fund and all the terms and
conditions must be explained as far as possible.

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 BIBLIOGRAPHY

Books

Kothari, C. R. Research Methodology. Vikas Publishing House Private Limited, New Delhi,
(2007).

ICICI Prudential Mutual Funds Brochure

HDFC Mutual Funds Brochure

SBI Mutual Funds Brochure

Websites

www.wikipedia.com

www.scribd.com

www.hdfc.com

www.icici.com

www.google.com

www.moneycontrol.com

www.amfiindia.com

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 Questionnaire

Name: ______________________________________

Please Tick the Following Questions:

a. Do you invest in Mutual Funds?

1. Yes
2. No

b. Between HDFC and ICICI Prudential, with which Company do you have
invested in Mutual Funds?

1. HDFC Mutual Funds

2. ICICI Prudential Mutual
Funds
3. SBI Mutual Fund

c. What is the age of the investor?

1. 18-25
2. 26-35
3.36-45
4. Above 45

d. What is your annual income?

1. Under 1 Lakh
2. 1 Lakh – 5 Lakh
3. More than 5 Lakh

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 e. From where you come to know about the schemes of Mutual Funds?

1. Family and Relatives

2. Friends Circle
3. Company Employees
4. Others

f. What is the duration of Investment?

1. Below 1 Year
2. 1 Year – 4 Years
3. More than 4 Years

g. Are investors satisfied about the service and behaviour of the Company’s
Employees?
1. Highly Satisfied
2. Satisfied
3. Neutral
4. Dissatisfied
5.Very Dissatisfied

h. What is your Risk Profile?

1. Innovator
2. Moderator
3. Risk Adverse

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 i. What Investors feel about the Company Norms, Documentation and
Formalities?

1. Highly Satisfied
2. Satisfied
3. Neutral
4. Dissatisfied
5. Very Dissatisfied

j. What Investors say which Company provides better returns?

1. HDFC Mutual Funds

2. ICICI Prudential Mutual
Funds
3. SBI Mutual Fund

k. Would you like to exchange your investment with one another between
HDFC Mutual Funds and ICICI Prudential Mutual Funds?

1. Yes
2. No

Signature

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