INDEX

Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. PARTICULARS INTRODUCTION OF TOPIC COMPANY PROFILE OBJECTIVES OF THE STUDY SCOPE OF THE STUDY LIMITATIONS OF THE STUDY HYPOTHESIS RESEARCH AND METHODLOGY DATA ANALYSIS & INTERPRETATION CONCLUSION RECOMMENDATIONS AND SUGGESTIONS ANNEXURE

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BIBLIOGRAPHY QUESTIONNAIRE

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CHAPTER 1 INTRODUCTION OF TOPIC

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INTRODUCTION OF TOPIC
Mutual funds are seemingly the easiest and the least stressful way to invest in the stock market. Quiet a large amount of money has been invested in mutual funds during the past few years. Any investor would like to invest in a reputed Mutual Fund organization.

Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.

WHAT IS MEAN BY MUTUAL FUND?

Mutual funds are pools of money that are managed by an investment company. They offer investors a variety of goals, depending on the fund and its investment charter. Some funds, for example, seek to generate income on a regular basis. Others seek to preserve an investor's money. Still others seek to invest in companies that are growing at a rapid pace. Funds can impose a sales charge, or load, on investors when they buy or sell shares. Many funds these days are no load and impose no sales charge. Mutual funds are investment companies regulated by the Investment Company Act of 1940. Related: open-end fund, closed-end fund.

CONCEPT OF MUTUAL FUNDS

A mutual fund is a trust that pools the savings of a no. of investors, who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them. Thus a mutual fund is the most suitable investment for the common man as it offers an opportunity to invest in diversified, professionally managed basket of securities at a relatively low cost.

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HISTORICAL ASPECT
Mutual fund firstly was established in 1822 in the form of Society General De Belguique. It mainly gains the progress in Switzerland & little in franc and Germany in its initial days. The first investment trust The foreign and colonial govt. trust Was founded in London in 1868.

INDIAN SCENARIO OF MUTUAL FUND

The origin of mutual fund industry in India is with the introduction of the concept of by HDFC in the year 1963. Through the growth was slow, but it accelerated from the year 1987 when non-HDFC players entered in industry. The mutual fund industry goes through four phases: First phase 1964-87 (Establishment of HDFC). Second phase 1987-93 (Entry of public sector funds). Third phase 1993-2003 (Entry of a private sector funds). Fourth phase since feb.2003 (Bifurcated of HDFC). In the first phase, HDFC was established in 1963 by an act of parliament. In 1978 it was delinked from RBI & the IDBI took over the control of HDFC. In second phase, SBI entered as first non-HDFC mutual fund provider then it was followed by can bank (Dec. 87). PNB (Aug 89) & LIC in1989. In third phase, the private sector entered in it. The Erstwhile Kothari pioneer (now merged with Franklin Templeton) was first registered in July 1993 in mutual fund. In revised registration of SEBI I n 1993 the industry functions under SEBI. And the fourth phase had bitter experience for HDFC. It was bifurcated into two separate entities. One is the specified under taking of HDFC with AUM of 29,835cr. The second is HDFC mutual fund ltd. Sponsored by SBI, PNB, BOB and LIC& it is registered with SEBI.

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How to Profit with Mutual Funds

When you invest in a mutual fund you hope that the value will rise and you can eventually sell your shares for a profit. This is one of the ways you can profit with mutual funds. Another way is through capital gains. When a mutual fund sells a security for a higher price than it originally paid for it, it is known as a capital gain. Most mutual funds distribute their capital gains to shareholders at least annually, some more often. The last way to profit with mutual funds is with dividends or interest. If the fund has invested in bonds or dividend-paying stocks, it must pass the dividends or interest earned on to its shareholders. Like capital gains, this is done at least annually.

Advantages of Mutual Funds

Mutual funds offer many advantages to the individual investor. These advantages include:

Diversification Professional Management Low Cost Ease of Recordkeeping Dollar-cost-averaging Liquidity Family of Funds Convenience

Diversification:
Dont put all your eggs in one basket. We have all heard these words many times. In investing this is certainly true. If you invest your nest egg in the stock of a single company and something unforeseen happens, i.e., the company goes bankrupt, new technology makes the companys product obsolete, etc., you could wipe out your entire investment. A major attraction to mutual funds is the diversification they offer investors. A typical fund will have dozens, or perhaps, hundreds of different securities in their portfolio. A poor performance by one of the companies in the portfolio will have much less of an effect on the

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total return and safety of your principal. Every dollar you have invested in a mutual fund has this diversification.

Professional Management:
Professional management is another key attraction to mutual funds. The average investor just does not have the time or experience needed to make informed and profitable decisions. Fund managers perform extensive economic and financial research. They may visit dozens or hundreds of companies and talk with hundreds of top business execHDFCves in a years time. They study balance sheets, trade publications, research reports, marketing reports and a myriad of other financial data. When you buy shares in a mutual fund you are getting this professional management for a relatively very low fee. The typical management fee of a mutual fund is 1/2 of 1% of that funds assets on a yearly basis. On a $5,000 investment, this is a yearly fee of $25.00. Professional money management has always been available to institHDFCons and wealthy individuals. Now it is available to everyone through mutual funds.

Low Cost
Even if you had the time, the experience, and the knowledge necessary to profitably select your own stocks and the wherewithal to properly diversify, you cannot do it as cheaply as a mutual fund can. Even using discount brokers you will pay up to two percent or more in commissions even more using a full service broker. You will pay again when you sell. Because they may buy millions of dollars worth of stock at a time, mutual funds are able to negotiate brokers fees to the bare minimum. Using no-load mutual funds there are no sales charges 100% of your money is being invested for you. There are even funds which have no minimum initial investment or minimum subsequent investment you can start investing with as little as $100.00 or even less!

Ease of Recordkeeping:
Mutual funds handle all the paperwork and recordkeeping necessary to keep track of your investment transactions. They will mail your dividend checks promptly or reinvest them in Page No. 6

additional shares (the choice is yours). They will provide accurate year-end summaries of all your transactions for income tax purposes. If you have any questions many are available 24 hours a day via a toll-free phone call.

Dollar-Cost-Averaging:
If you fear you will invest in a mutual fund right before the market goes into a nose dive, you should consider dollar-cost-averaging. This is a technique of investing a set amount of money at regular intervals, monthly or quarterly, rather than a lump sum all at once. You invest the same amount of money regardless of whether the stock market is going up or down. In fact, this strategy will turn the ups and downs of the market into an advantage. Lets look at an example: Suppose you will have $100.00 available to invest for each of the next four months. You are interested in a mutual fund whose shares are currently selling for $10.00 each. You invest your initial $100.00 and get 10 shares in return. The next month, despite the fact the market dropped your shares are now trading at $5.00 you again invest your $100.00 and this time you receive 20 shares. Lets assume by the next month the market has recovered and the shares are again trading at $10.00. You invest your $100.00 and receive 10 shares. The next month finds the market continuing its rise and your shares are now selling for $12.50. You invest your $100.00 and receive 8 shares. Lets see how you have done: Monthly Investment 100 100 100 100 $400 Average share cost Shares Purchased 10 20 10 8 48 $8.33 ($400 / 48)

Price 10.00 5.00 10 12.50

Ending share price $12.50

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You have invested a total of $400.00 and own 48 shares at an average price of $8.33 per share. Your 48 shares are worth a total of $600.00 you have made a profit of $200.00 in a mixed market. Investing A Lump Sum: Single Investment 400 $400 Average share cost Shares Purchased 40 40 $10.00 ($400 / 40)

Price 10.00

Ending share price $12.50 Had you invested the whole $400.00 in the first month you would have received 40 shares at the price of $10.00 each. Those shares would now be worth $500.00 for a gain of $100.00. Certainly a good return (using our example) but only 50% as well as using dollar-costaveraging. The stock market will always fluctuate. This is a way to take advantage of that fluctuation. Dollar-cost-averaging guarantees that you will always buy more shares when the price of the shares are lower and less shares when the price is higher. It doesnt take a lot of brilliance or hard work just discipline. You must invest the same amount every month (or every quarter).

Liquidity:
Mutual fund investors can cash in their shares at any time and receive the current value of their holdings. The fund is always ready to redeem (buy back) its shares. Most funds will allow you to use a wire transfer to transfer the funds directly to your bank account. Many funds also have a check writing privilege if you need your money in a hurry, simply write a check. Many funds also provide for redemption via a toll-free phone call.

Family of Funds:

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Many mutual funds are part of a family of funds (a group of funds managed by the same company but with different investment objectives). The advantage to this is an option known as an exchange privilege or fund switching. Fund switching has become quite popular as fund companies have made it easy to move your money from one fund to another, usually with only a toll-free telephone call. Switching is an easy and convenient way to take advantage of changing market conditions. If the stock market began to decline, for instance, and your money was in a stock fund, you might consider switching your investment into a money market fund within the same family.

Convenience:
Mutual fund shares are easy to buy. Generally, no-load funds have a toll-free number an investor (or potential investor) can call for information. Some fund companies have even set up retail centers for investors. Many have payroll deduction plans and some funds, with proper authorization, will deduct and invest on a regular basis a specified amount from the shareholders bank account. You can automatically reinvest all dividends and capital gains distribHDFCons allowing you to compound your earnings. Conversely, you have the option of automatic withdrawal you may elect to have your earnings and/or part of your principal sent to you, or anyone you designate, on a regular basis (so called check-a-month plan). Many funds offer checkwriting privileges. This can be very helpful when you need to have quick access to your money. Mutual funds are excellent vehicles for retirement investing. The generally long-term nature of mutual fund investing fits well with the long-term objectives of investing for retirement.

DRAWBACKS OF MUTUAL FUND

No guaranties. Fees & Commission. Taxes. Management Risk.

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CHARACTERISTICS OF A MUTUAL FUND

A Mutual Fund actually belongs to the investors who have pooled their funds. The ownership of the mutual fund is in the hands of the Investors. A Mutual Fund is managed by investment professional and other Service providers, who earn a fee for their services, from the funds. The pool of Funds is invested in a portfolio of marketable investments. The value of the portfolio is updated every day. The investors share in the fund is denominated by units. The value of the units changes with change in the portfolio value, every day. The value of one unit of investment is called net asset value (NAV). The investment portfolio of the mutual fund is created according to the stated Investment objectives of the Fund.

Mutual Fund can be classified as follows:1. OPEN-ENDED MUTUAL FUNDS: The holders of the shares in the Fund can resell them to the issuing Mutual Fund company at the time. They receive in turn the net assets value (NAV) of the shares at the time of re-sale. Such Mutual Fund Companies place their funds in the secondary securities market. They do not participate in new issue market as do pension funds or life insurance companies. Thus they influence market price of corporate securities. Open-end investment companies can sell an unlimited number of Shares and thus keep going larger. The open- end Mutual Fund Company Buys or sells their shares. These companies sell new shares NAV plus a Loading or management fees and redeem shares at [Link] other words, the target amount and the period both are indefinite in such funds.

2 .CLOSED-ENDED MUTUAL FUNDS:-

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A closedend Fund is open for sale to investors for a specific period, after which further sales are closed. Any further transaction for buying the units or repurchasing them, Happen in the secondary markets, where closed end Funds are listed. Therefore new investors buy from the existing investors, and existing investors can liquidate their units by selling them to other willing buyers. In a closed end Funds, thus the pool of funds can technically be kept constant.

LEGAL FRAME WORK OF SEBI REGULATORY ASPECTS OF MUTUAL FUNDS:

In the year 1992, Securities and exchange Board of India (SEBI) Act was passed. The objectives of SEBI are to protect the interest of investors in securities and to promote the development of and to regulate the securities market. SEBI formulates policies and regulates the mutual funds to protect the interest of the investors.

GUIDELINES OF SEBI
1. Mutual funds are regulated by the SEBI (mutual Fund) Regulations, 1996. 2. SEBI is the regulator of all funds, except offshore funds. 3. Bank-sponsored mutual funds are jointly regulated by SEBI and RBI. 4. The bank-sponsored fund cannot provide a guarantee without RBI Permission. 5. RBI regulates money and government securities markets, in which mutual funds are invested. 6. Listed mutual funds are subject to the listing regulations of stock exchange. 7. Since the AMC and Trustee Company are companies, the Department of Company affairs regulate them. They have to send periodic reports to the ROC (Register of Companies) and the CLB (Company Law Board) is the appellate authority. 8. Investors cannot sue the trust, as they are the same as the trust and cant sue themselves. 9. HDFC does not have a separate sponsor and AMC.

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10. HDFC is governed by the HDFC Act, 1963 and is voluntarily under SEBI Regulations. 11. HDFC can borrow as well as lend also engage in other financial services activities. 12. Only AMFI certified agents can sell Mutual Fund units. 13. Mutual Funds Company is required to update the NAV of the scheme on the AMFI website on a daily basis in case of open-ended scheme.

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CHAPTER 2 COMPANY PROFILE

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COMPANY PROFILE

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalisation of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. HDFC Asset Management Company Limited (AMC) 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 HDFC Mutual Fund by SEBI vide its letter dated July 3, 2000. The registered office of the AMC is situated at Ramon House, 3rd Floor, H.T. Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai - 400 020. In terms of the Investment Management Agreement, the Trustee has appointed the HDFC Asset Management Company Limited to manage the Mutual Fund. The paid up capital of the AMC is Rs. 25.169 crore.

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Why HDFC Mutual Fund

HDFC Mutual Fund is one of the largest mutual funds and well-established fund house in the country with consistent fund performance across categories since its incorporation on December 10, 1999. While our past experience does make us a veteran, but when it comes to investments, we have never believed that the experience is enough. Our Investment Philosophy The single most important factor that drives HDFC Mutual Fund is its belief to give the investor the chance to profitably invest in the financial market, without constantly worrying about the market swings. To realize this belief, HDFC Mutual Fund has set up the infrastructure required to conduct all the fundamental research and back it up with effective analysis. Our strong emphasis on managing and controlling portfolio risk avoids chasing the latest "fads" and trends. We Offer We believe, that, by giving the investor long-term benefits, we have to constantly review the markets for new trends, to identify new growth sectors and share this knowledge with our investors in the form of product offerings. We have come up with various products across asset and risk categories to enable investors to invest in line with their investment objectives and risk taking capacity. Besides, we also offer Portfolio Management Services. To know more about our products please visit our Products section. To find out your current financial health and tips about financial planning, please visit out Calculators section.

Trustees
HDFC Trustee Company Limited, a company incorporated under the Companies Act, 1956 is the Trustee to HDFC Mutual Fund vide the Trust deed dated June 8, 2000, as amended from time to time. HDFC Trustee Company Ltd is wholly owned subsidiary of HDFC The Board of Directors of HDFC Trustee company Limited consists of the following eminent persons.

Mr. Anil Kumar Hirjee Page No. 15

Mr. Vincent Joseph OBrien Mr. Shishir K. Diwanji Mr. Ranjan Sanghi Mr. V. Srinivasa Rangan

Mr. Anil Kumar Hirjee Mr. Anil Kumar Hirjee, the Chairman of the Board, is an independent Director. [Link] has 45 years of experience in different areas of Business Management and his expertise extends to finance, banking, legal, commercial, industrial and general administration. He has also been actively associated with leading Charitable Institutions. Mr. Hirjee has been associated with The Bombay Burmah Trading Corporation Limited since 1976 and is presently its Vice Chairman. He is also a Director on the Boards of various other companies. Mr. Hirjee is a B.A. (Hons.), LL.B. (Hons.), Barrister-at-Law, and SLOAN Fellow of the London Business School.

Sponsors
HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (HDFC) HDFC Ltd. was incorporated in 1977 as the first specialised mortgage company in India. HDFC provides financial assistance to individuals, corporates and developers for the purchase or construction of residential housing. It also provides property related services (e.g. property identification, sales services and valuation), training and consultancy. Of these activities, housing finance remains the dominant activity. HDFC has a client base of around 13 lac borrowers, over 11 lac depositors, over 2.09 lac shareholders and over 25,000 deposit agents, as at March 31, 2012. The Company has a total asset size of Rs.1,67,250 crore as at March 31, 2012 and cumulative approvals and disbursements of housing loans of Rs.4,63,400 crore and Rs.3,73,646 crore respectively as at March 31, 2012. HDFC had raised funds from international agencies such as the World Bank, IFC (Washington), USAID, DEG, ADB and KfW, international syndicated loans, domestic term loans from banks and insurance companies, bonds and deposits. HDFC has received the highest rating for its bonds and deposits program for the Seventeenth year in succession.

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HDFC Life Insurance Company Limited, promoted by HDFC was the first life insurance company in the private sector to be granted a Certificate of Registration (on October 23, 2000) by the Insurance Regulatory and Development Authority to transact life insurance business in India. STANDARD LIFE INVESTMENTS LIMITED The Standard Life Assurance Company was established in 1825 and has considerable experience in global financial markets. The company was present in the Indian life insurance market from 1847 to 1938 when agencies were set up in Kolkata and Mumbai. The company re-entered the Indian market in 1995, when an agreement was signed with HDFC to launch an insurance joint venture. In April 2006, the Board of The Standard Life Assurance Company recommended that it should demutualise and Standard Life plc float on the London Stock Exchange. At a Special General Meeting held in May voting members overwhelmingly voted in favour of this. The Court of Session in Scotland approved this in June and Standard Life plc floated on the London Stock Exchange on 10 July 2006. Standard Life Investments was launched as an investment management company in 1998. It is the dedicated investment management company of the Standard Life group and is a wholly owned subsidiary of Standard Life Investments (Holdings) Limited, which in turn is a wholly owned subsidiary of Standard Life plc. With global assets under management of approximately US$240.7 billion (154.9 billion) as at December 31, 2011, Standard Life Investments Limited is one of the world's major investment companies, operating in the UK, Canada, Hong Kong, China, Korea, Ireland, Australia and the USA, and is responsible for investing money on behalf of five million retail and institutional clients worldwide In order to meet the different needs and risk profiles of its clients, Standard Life Investments Limited manages a diverse portfolio covering all of the major markets world-wide, which includes a range of private and public equities, government and company bonds, property

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investments and various derivative instruments. The company's current holdings in UK equities account for approximately 1.8% of the market capitalisation of the London Stock Exchange The present equity shareholding pattern of the AMC is as follows : Particulars Housing Development Finance Corporation Limited Standard Life Investments Limited Other Shareholders (shares issued on exercise of Stock Options) % of the paid up equity capital 59.98 39.99 0.03

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 following Schemes of Zurich India Mutual Fund have migrated to HDFC Mutual Fund on June 19, 2003. These Schemes have been renamed as follows: Former Name Zurich India Equity Fund Zurich India Prudence Fund Zurich India Capital Builder Fund Zurich India TaxSaver Fund Zurich India Top 200 Fund Zurich India High Interest Fund Zurich India Liquidity Fund Zurich India Sovereign Gilt Fund New Name HDFC Equity Fund HDFC Prudence Fund HDFC Capital Builder Fund HDFC TaxSaver HDFC Top 200 Fund HDFC High Interest Fund HDFC Cash Management Fund HDFC Sovereign Gilt Fund*

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HDFC Children's Gift Fund - Savings Plan

Investment Objective The primary objective of the Scheme is to generate long term capital appreciation. However, there can be no assurance that the investment objective of the Scheme / Plans will be achieved. Basic Scheme Information Nature of Scheme Inception Date Option/Plan Entry Load (For Lumpsum Purchases and investments through SIP/STP) Open Ended Balanced Scheme March 02, 2001 Growth Plan. (Debt Oriented) NIL Unfront commission shall be paid directly by the investor to the ARN Holder (AMFI registered Distributor) based on the investors' assessment of various factors including the service rendered by the ARN Holder. Exit Load (as a % of the Applicable NAV)

For Units subject to Lock-in Period: NIL For Units not subject to Lock-in Period : 3% if the Units are redeemed / switched-out within one year from the date of allotment, 2% if the Units are redeemed / switched-out between the first and second year of the date of allotment, 1% if Units are redeemed /switched-out between the second and third year of the date of allotment, Nil if the Units are redeemed / switched -out after third year from the date of allotment. No Exit Load shall be levied on bonus units and units allotted on dividend reinvestment.

Minimum Application

For new investors :Rs.5000 and any amount thereafter. For existing investors : Rs. 1000 and any amount thereafter. Page No. 19

Amount Lock-In-Period If opted: Until the Unit Holder (being the beneficiary child) attains the age of 18 years or until completion of 3 years from date of allotment , Net Asset Value Periodicity Redemption Proceeds Tax Benefits (As per present Laws) Current Expense Ratio (#) (Effective Date 01st October 2012) On the first 100 crores daily net assets 2.25% On the next 300 crores daily net assets 2.00% On the next 300 crores daily net assets 1.75% On the balance of the net assets 1.50% In addition to the above a charge of 20 bps on the daily net assets plus a proportionate charge in respect sales beyond T-15 cities subject to maximum of 30 bps on daily net assets. HDFC Gold Fund Investment Objective The investment objective of the Scheme is to seek capital appreciation by investing in units of HDFC Gold Exchange Traded Fund. Basic Scheme Information whichever is later Every Business Day. Normally dispatched within 3-4 Business days

Nature of Scheme Investment Objective

An Open-ended Fund of Fund Scheme investing in HDFC Gold Exchange Traded Fund The investment objective of the Scheme is to seek capital appreciation by investing in units of HDFC Gold Exchange

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Option/Plan Entry Load (as a % of the Applicable NAV)

Traded Fund. Currently the Scheme offers only Growth Option. Not Applicable.

Pursuant to SEBI circular no. SEBI/IMD/CIR No.4/ 168230/09 dated June 30, 2009, no entry load will be charged by the Scheme to the investor. Upfront commission shall be paid directly by the investor to the ARN Holder (AMFI registered Distributor) based on the investors' assessment of various factors including the service rendered by the ARN Holder. In respect of each purchase / switch-in of units-

Exit Load (as a % of the Applicable NAV)

an Exit Load of 2% is payable if Units are redeemed / switched-out within 6 months from the date of allotment.

an Exit Load of 1% is payable if Units are redeemed / switched-out after 6 months but within 1 year from the date of allotment.

No Exit Load is payable if Units are redeemed / switched-out after 1 year from the date of

Minimum Application Amount

allotment. Purchase: 5,000 and any amount thereafter. Additional Purchase: 1,000 and any amount thereafter. Minimum Amount per SIP Installment Monthly SIP: 500/- and in multiples of 100/Quarterly SIP: 1,500/- and in multiples of 100/Nil The NAV will be calculated on all Business Days and will be disclosed on the website of HDFC Mutual Fund and on the website of Association of Mutual Funds in India AMFI ([Link]) by 10.00 a.m. on every next Business Day. Within 10 working days.

Lock-In-Period Net Asset Value Periodicity

Redemption Proceeds

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HDFC Cash Management Fund - Savings Plan

Investment Objective The investment objective of the Scheme is to generate optimal returns while maintaining safety and high liquidity. Basic Scheme Information Nature of Scheme Inception Date Option/Plan Open Ended High Liquidity Income Scheme November 18, 1999 Growth Option, Daily dividend option (reinvestment facility only) and Weekly dividend option (with payout and Reinvestment facility). (Effective from Jun 1st, 2007 - Dividend Payout facility is Entry Load (For Lumpsum Purchases and investments through SIP/STP) being introduced under the Weekly Dividend Option). NIL Unfront commission shall be paid directly by the investor to the ARN Holder (AMFI registered Distributor) based on the investors' assessment of various factors including the Exit Load (as a % of the Applicable NAV) Minimum Application Amount Growth/ Daily Dividend/Weekly Dividend Option For New investors - Rs.10000 and any amount thereafter For Existing investors - Rs. 5000 and any amount Lock-In-Period Net Asset Value Periodicity Redemption Proceeds Current Expense Ratio (#) (Effective Date 24th December 2012) thereafter Nil All year round. Normally despatched within 1 Business day 0.01% service rendered by the ARN Holder. Nil

HDFC Gold Exchange Traded Fund

Investment Objective Page No. 22

The investment objective of the Scheme is to generate returns that are in line with the performance of gold, subject to tracking errors. Basic Scheme Information Nature of Scheme Option/Plan An open ended Exchange Traded Fund Currently, there are no investment Plans / Options being offered under the Scheme. However, the Trustee reserve the right to introduce investment Plans / Options under the Scheme at a future date in accordance with SEBI (MF) Entry NAV) Regulations. Load Not Applicable.

(as a % of the Applicable Pursuant to SEBI circular no. SEBI/IMD/CIR No.4/ 168230/09 dated June 30, 2009, no entry load will be charged by the Scheme to the investor. Upfront commission shall be paid directly by the investor to the ARN Holder (AMFI registered Distributor) based on the investors assessment of various factors including the Exit NAV) service rendered by the ARN Holder. Load For Creation Unit Size:

(as a % of the Applicable No Exit load will be levied on redemptions made by Authorised Participants / Large Investors directly with the Fund in Creation Unit Size. For other than Creation Unit Size:

Not Applicable

The Units of HGETF in other than Creation Unit Size cannot be directly redeemed with the Fund. These Units can be redeemed (sold) on a continuous basis on the NSE Minimum Amount and BSE during the trading hours on all trading days. Application Authorised Participants: Application for subscription of HGETF Units directly with the Fund in Creation Unit Size at NAV based prices in exchange of Portfolio Deposit and Cash Component. Page No. 23

Large Investors: Application for subscription of HGETF Units directly with the Fund in Creation Unit Size at NAV based prices by payment of requisite Cash as determined by the AMC only by means of payment instruction of Real Time Gross Settlement (RTGS)/National Electronic Funds Transfer (NEFT) or Funds Transfer Letter/ Transfer Cheque of a bank where the Scheme has a collection account. Other investors (including Authorised Participants and Large Investors): Units of HGETF can be subscribed (in lots of 1 Unit) during the trading hours on all trading days Lock-In-Period Net Asset Value Periodicity Redemption Proceeds on the NSE and BSE on which the Units are listed. Nil Every Business Day. Within 10 working days.

CHAPTER 3 OBJECTIVE OF STUDY

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OBJECTIVES OF THE STUDY

Find out the attitude of customers towards Systematic Investment Plan of

HDFC Mutual Fund.

Find out the proportion of various schemes invested in HDFC Mutual Funds.

Find out the main usage of HDFC Mutual Funds.

Measure the level of Customer satisfaction in HDFC Mutual Funds.

To determine the analysis of Mutual Fund which provides better returns from HDFC Mutual Funds. To analyze the concept and parameters of mutual fund. To know how many people are satisfied by their HDFC Mutual Funds. To know people behavior regarding risk factor involved in mutual fund. To provide an opportunity for lower income groups to acquire without much difficulty, property in the form of shares. To manage in investors portfolio that provide s regular income, growth, safety, liquidity, professional management and diversification.

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CHAPTER-4 SCOPE OF THE STUDY

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SCOPE OF THE STUDY

The scope of the study is to Inform & guide the investor about the various mutual fund schemes & helps them to select the best scheme as per their requirement.

The research was carried on in Nagpur. I had been sent at one of the branch of HDFC

Nagpur where I completed my Project work. I surveyed on my Project An Analytical Study Mutual Fund Schemes with Special Reference to HDFC Bank Nagpur on the visiting customers of HDFC Nagpur.

A big boom has been witnessed in Mutual Fund Industry in resent times. A large

number of new players have entered the market and trying to gain market share in this rapidly improving market.

Investors are the customers of the different mutual fund schemes during my project

with Analytical Study of Systematic Investment plan of HDFC Mutual Fund.

The study will help to know the preferences of the customers, which company,

portfolio, mode of investment, option for getting return and so on they prefer. This project report may help the company to make further planning and strategy.

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CHAPTER 5 HYPOTHESIS

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HYPOTHESIS
An unproven proposition or that tentatively explains certain facts or phenomenon; a proposition that is empirically testable. A personnel manager may believe that if attitudes towards job security are changed in positive direction, there will be an increase in employee retention. HDFC mutual fund provides better growth to its customer. HDFC Bank strives to create new prospects through maintaining good relationship with customer. HDFC mutual fund gives better Returns. HDFC mutual fund attracts people for investment.

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CHAPTER 6 LIMITATIONS OF THE STUDY

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LIMITATIONS OF THE STUDY

The project done is restricted to HDFC Mutual funds in Nagpur and its surroundings only. Some of the persons were not so responsive. Possibility of error in data collection because many of investors may have not given actual answers of my questionnaire. The sample size may not adequately represent the whole market. Some respondents were reluctant to divulge personal information which can affect the validity of all responses. The study was constrained by limitations of time. The raw data was collected with the help of structured questionnaire technique. Therefore study is bounded by the limitation of this technique.

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CHAPTER-7 RESEARCH METHODOLOGY

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RESEARCH METHODLOGY
Research is an original contrib. HDFC on to the existing stock of knowledge making for its advancement. It is the pursuit of truth with the help of study, observation, comparison and experiment. In short, the search for knowledge through objective and systematic method of finding sol HDFC on to a problem is research. Research as a care full investigation or enquiry specially through search for a new facts in any branch of knowledge Research is an academic activity and such as the term should be used in technical sense. The manipulation of things , concepts or symbols for the purpose of generalizing to extend ,correct or verify knowledge, whether that knowledge through objective.

Collection of Data:
Data were collected through both primary and secondary data sources. Primary data was collected through questionnaires. The research was done in the form of direct personal interviews and through telephone interviews.

Primary data:A primary data is a data, which is collected afresh and for the first time, and thus happen to be original in character. The primary data with the help of questionnaire were collected from various investors. Primary data are first hand information and are collected from various sources like: Informal interviews Through Structured questionnaire Observation

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Secondary data:The secondary source consists of readily available datas and is already compiled statistical statements and reports. Secondary datas are collected from; Business Magazines Internet Annual reports Journals

Sampling:
Sampling procedure: The sample was selected of them who are the customers/visitors of HDFC Mutual Fund Nagpur, irrespective of them being investors or not or availing the services or not. It was also collected through personal visits to persons, by formal and informal talks and through filling up the questionnaire prepared. The data has been analyzed by using mathematical/Statistical tool.

Sample design:
Data has been presented with the help of bar graph, pie charts, line graphs etc.

Questionnaire design
Proper care has been taken to ensure that the information needed match the objectives, which in turn match the data collected through the questionnaire. The basic cardinal rules of Questionnaire design like using simple and clear words, the logical and sequential arrangement of questions has been taken care of.

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CHAPTER 8 DATA ANALYSIS AND INTERPRETATION

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DATA ANALYSIS & INTERPRETATION

1. Preference of factors while investing. Factors Liquidity Low Risk High Return Trust No. of Respondents 40

60 64 36

Interpretation:
Out of 200 People, 32% People prefer to invest where there is High Return, 30% prefer to invest where there is Low Risk, 20% prefer easy Liquidity and 18% prefer Trust

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2. Awareness about Mutual Fund and its Operations. Response Yes No No. of Respondents 135 65

Interpretation:
From the above chart it is inferred that 67% People are aware of Mutual Fund and its operations and 33% are not aware of Mutual Fund and its operations.

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3. Source of information for customers about Mutual Fund. Source of information Advertisement Peer Group Bank Financial Advisors No. of Respondents 18 25 30 62

Interpretation:
From the above chart it can be inferred that the Financial Advisor is the most important source of information about Mutual Fund. Out of 135 Respondents, 46% know about Mutual fund Through Financial Advisor, 22% through Bank, 19% through Peer Group and 13% through Advertisement.

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4. Investors invested in Mutual Fund. Response YES NO Total No. of Respondents 120 80 200

Interpretation:
Out of 200 People, 60% have invested in Mutual Fund and 40% do not have invested in Mutual Fund.

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5. Reason for not invested in Mutual Fund. Reason Not Aware Higher Risk Not any Specific Reason No. of Respondents

65 5 10

Interpretation:
Out of 80 people, who have not invested in Mutual Fund, 81% are not aware of Mutual Fund, 13% said there is likely to be higher risk and 6% do not have any specific reason.

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6. Investors invested in different Assets Management Co. (AMC)

Name of AMC
HDFC MF SBIMF Reliance ICICI Prudential Kotak Others

No. of Investors 22 15 22 12 9 20

Interpretation:
In Nagpur most of the Investors preferred HDFC and Reliance Mutual Fund. Out of 120 Investors 22% have invested in each of them, only 15% have invested in SBIMF, 12% in ICICI Prudential, 9% in Kotak and Other 20%.

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7. Reason for invested in HDFC MF.

Reason
Associated with HDFC Better Return Agents Advice

No. of Respondents
35 5 15

Interpretation:
Out of 55 investors of HDFC MF 64% have invested because of its association with Brand HDFC, 27% invested on Agents Advice, 9% invested because of better return.

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8. Reason for not invested in HDFC MF.

Reason
Not Aware Less Return Agents Advice

No. of Respondents
25 18 22

Interpretation:
Out of 65 people who have not invested in HDFC MF, 38% were not aware with HDFC MF, 28% do not have invested due to less return and 34% due to Agents Advice.

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9. Preference of Investors for future investment in Mutual Fund.

Name of AMC
HDFC MF SBIMF Reliance ICICI Prudential Kotak Others

No. of Investors 76 45 82 80 60 75

Interpretation:
Out of 120 investors, 68% prefer to invest in Reliance, 67% in ICICI Prudential, 63% in SBIMF, 62.5% in Others, 50% in Kotak, 37.5% in HDFC and 29% in HDFC Mutual Fund.

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10. Channel Preferred by the Investors for Mutual Fund Investment.

Channel Financial Advisor Bank AMC

No. of Respondents 72 18 30

Interpretation:
Out of 120 Investors 60% preferred to invest through Financial Advisors, 25% through AMC and 15% through Bank.

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11. Mode of Investment Preferred by the Investors. Mode of Investment

One time Investment Systematic Investment Plan (SIP)

No. of Respondents
78 42

Interpretation:
Out of 120 Investors 65% preferred One time Investment and 35 % Preferred through Systematic Investment Plan.

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12. Preferred Portfolios by the Investors.

Portfolio
Equity Debt Balanced

No. of Investors
56 20 44

Interpretation:
From the above graph 46% preferred Equity Portfolio, 37% preferred Balance and 17% preferred Debt portfolio.

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13. Option for getting Return Preferred by the Investors.

Option Dividend Payout Dividend Reinvestment Growth No. of Respondents 25 10 85

Interpretation:
From the above graph 71% preferred Growth Option, 21% preferred Dividend Payout and 8% preferred Dividend Reinvestment Option.

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14. Preference of Investors whether to invest in Sectoral Funds.

Response Yes No

No. of Respondents 25 95

Interpretation:
Out of 120 investors, 79% investors do not prefer to invest in Sectoral Fund because there is maximum risk and 21% prefer to invest in Sectoral Fund.

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CHAPTER-9 CONCLUSION

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CONCLUSION
Running a successful Mutual Fund requires complete understanding of the peculiarities of the Indian Stock Market and also the psyche of the small investors. This study has made an attempt to understand the financial behavior of Mutual Fund investors in connection with the preferences of Brand (AMC), Products, Channels etc. I observed that many of people have fear of Mutual Fund. They think their money will not be secure in Mutual Fund. They need the knowledge of Mutual Fund and its related terms. Many of people do not have invested in mutual fund due to lack of awareness although they have money to invest. As the awareness and income is growing the number of mutual fund investors are also growing. Brand plays important role for the investment. People invest in those Companies where they have faith or they are well known with them. There are many AMCs in Nagpur but only some are performing well due to Brand awareness. Some AMCs are not performing well although some of the schemes of them are giving good return because of not awareness about HDFC MF, Brand. Reliance, SBIMF, ICICI Prudential etc. Financial Advisors are the most preferred channel for the investment in mutual fund. They can change investors mind from one investment option to others. Many of investors directly invest their money through AMC because they do not have to pay entry load. Only those people invest directly who know well about mutual fund and its operations and those have time.

CHAPTER-10 RECOMMENDATIONS AND SUGGESTIONS

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CHAPTER-10 RECOMMENDATIONS AND SUGGESTIONS

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RECOMMENDATIONS AND SUGGESTIONS

HDFC The most vital problem spotted is of ignorance. Investors should be made aware of the benefits. Nobody will invest until and unless he is fully convinced. Investors should be made to realize that ignorance is no longer bliss and what they are losing by not investing. HDFC Mutual funds offer a lot of benefit which no other single option could offer. But most of the people are not even aware of what actually a mutual fund is? They only see it as just another investment option. So the advisors should try to change their mindsets. The advisors should target for more and more young investors. Young investors as well as persons at the height of their career would like to go for advisors due to lack of expertise and time. HDFC Mutual Fund Company needs to give the training of the Individual Financial Advisors about the Fund/Scheme and its objective, because they are the main source to influence the investors. Before making any investment Financial Advisors should first enquire about the risk tolerance of the investors/customers, their need and time (how long they want to invest). By considering these three things they can take the customers into consideration. Customers with graduate level education are easier to sell to and there is a large untapped market there. To succeed however, advisors must provide sound advice and high quality. Systematic Investment Plan (SIP) is one the innovative products launched by Assets Management companies very recently in the industry. SIP is easy for monthly salaried person as it provides the facility of do the investment in EMI. Though most of the prospects and potential investors are not aware about the SIP. There is a large scope for the companies to tap the salaried persons. Page No. 53

CHAPTER-11 ANNEXURE

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BIBLIOGRAPHY

BOOKS

Ambika Prased Dash, Security Analysis and Portfolio Management, [Link] Publishing House Pvt. Ltd., 2008 Bhalla V.K., Investment Management, [Link] & Company Ltd., Eleventh Edition, 2004 Emmett [Link], Therese Vaughan, Fundamemtals of Risk and Insurance, Willey India Pvt. Ltd., Ninth Edition, 2003 Kothari C.R., Research Methodology-methods and Techniques, K.K Gupta for New Age International private ltd, 2006.

Web Site Referred [Link] [Link] [Link] [Link] [Link] [Link] [Link]

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QUESTIONNAIRE
Dear Respondent,

Thanks for sparing few minutes to fill this questionnaire, which will help us to study the An Analytical Study Mutual Fund Schemes with Special Reference to HDFC Bank Nagpur. Any information provided by you will purely and strictly be used for Academic Purpose only.

Personal Information:Age: ____________________________________________ Gender: _________________________________________ Occupation/ Profession: ___________________________ Location: ________________________________________

1. Preference of factors while investing. Liquidity Low Risk High Return Trust

2. Awareness about Mutual Fund and its Operations.

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Yes No

3. Source of information for customers about Mutual Fund.

Advertisement Peer Group Bank Financial Advisors

4. Investors invested in Mutual Fund. Yes No

5. Reason for not invested in Mutual Fund.

Not Aware Higher Risk

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 Not any Specific Reason

6. Investors invested in different Assets Management Co. (AMC).

HDFC MF SBIMF Reliance ICICI Prudential Kotak Others

7. Reason for invested in HDFC MF. Associated with HDFC Better Return Agents Advice

8. Reason for not invested in HDFC MF. Not Aware Less Return Page No. 58

 Agents Advice

9. Preference of Investors for future investment in Mutual Fund. HDFC MF SBIMF Reliance ICICI Prudential Kotak Others

10. Channel Preferred by the Investors for Mutual Fund Investment. Financial Advisor Bank AMC

11. Mode of Investment Preferred by the Investors. One time Investment Systematic Investment Plan (SIP)

12. Preferred Portfolios by the Investors.

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 Equity Debt Balanced

13. Option for getting Return Preferred by the Investors.

Dividend Payout Dividend Reinvestment Growth

14. Preference of Investors whether to invest in Sectoral Funds.

Yes No

Thank you for participating in this research.

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