HDFC Project

SUMMER TRAINING
AT
HDFC MUTUAL FUND
(HDFC ASSETS MANAGEMENT COMPANY
LTD)
IN PARTIAL FULFILLMENT OF
MASTER OF BUSINESS ADMINISTRATION
PROGRAMME
SUBMITTED BY: GUIDED BY:
BADAMI KALPESH. D. INTERNAL GUIDE AT GRIMS
DR.R.S.SHAH
EXTERNAL GUIDE AT CO.
MR.RAJAN MEHTA
GIDC RAJJU SHROFF ROFEL INSTITUTE OF MANAGEMENT
STUDIES, VAPI
SUMMER TRAINING PROJECT (2007)
1
DECLARATION
I, Badami Kalpesh D. a student of MBA semester iii, here by declare that the project
work presented in this report is my contribution and has been carried out under
supervision of DIRECTOR DR.R.S.SHAH of GIDC RAJJU SHROFF
INSTITUTE OF MANAGEMENT STUDIES.
The objective of the training undertaken is to get specialized knowledge in the

specialized field, which further sharpen the skill and add practicality in the
specialization. This work has not been previously submitted to any other university
for any other examination
DATE: - SIGNATURE (student)
BADAMI KALPESH D.
PLACE: - SIGNATURE (guide)
DR.R.S.SHAH
2
PREFACE
“Experience is the best teacher.” This saying is very well applicable in everyone’s
life. Therefore as a student of management it must apply to me also. Then the
question arises that from where we can get this experience. Obviously we must
undergo practical Training. To serve this purpose I had undergone two months
summer training at HDFC assets Management Company limited and as an outcome I
have prepared this project report.
This project report on “mutual fund awareness in retail investors of HDFC assets
Management Company in Surat” is as per syllabus prescribed by Veer Narmad south
Gujarat University for MBA students. This project also deals with various activities of
HDFC assets Management Company limited. The experience of this training will be
useful in my future and findings of this particular project will be Helpful to take
decision regarding to marketing and advertising of mutual fund schemes To HDFC
assets Management Company limited.
3
ACKNOWLEDGEMENT
First of all, I would like to express my sincere gratitude to Mr. Rajan Mehta, Branch
manager of HDFC assets Management Company limited, Surat branch for allowing
me for summer training at HDFC assets Management Company limited.
I heartily feel thanks to Mr. Piyush lal, sales executive who provided me valuable
suggestions and guidance at every stage of my summer training.
I would also like to express my gratitude to Mr. R.s.shah, my project mentor and other
faculty members of GIDC RAJJU SHROFF ROFEL INSTITUTE OF
MANAGEMENT STUDIES, vapi for guide me.
I would like to thank following persons who help me a lot in my summer training.
 Mr. Gaurav maheshwari, HDFC assets Management Company limited
 Mr. Pinkal shah, HDFC assets Management Company limited.
 Mr. Chintan patel, HDFC assets Management Company limited.
 Mr. Ritesh jariwala, HDFC assets Management Company limited.
 Mr. Utkrash gheewala, HDFC bank, Parle point branch
 Mr. Nilesh patel, HDFC bank, Parle point branch.
 Mr. Mitesh sampat, HDFC bank, Parle point branch.
I also thank to respondents, who have been helpful and faithful enough to give the
required information, which helped my project to be a great success, which was the
main and important part of my project. I feel happy indeed and it has given me a lot of
pleasure in company.
Last but not the least I would like to extent my deep sense of gratitude to my family,
friends and all whom guided and helped me during my training period.
Place: - Surat. Badami Kalpesh. B.

Date: - 9thAugust 2007
4
Objectives of Study
Without any aim or objective, no activity can exist, in the same direction of
preparation of this report on HDFC assets Management Company limited. In different
functional areas & research on the “mutual fund awareness in retail investors of
HDFC assets Management Company limited in Surat” is based on the following
objectives: -
1. My primary objective is to acquire primary functions of management like

Planning, Organizing, Directing and controlling from various functional areas
such as Finance, Human Resource, Marketing, and Sales etc.
2. Whatever we are taught in the classrooms, there is a limitation that book can
only give theoretical concept or knowledge and it has a limited view of
practically. So, the other important objective of this training is to know about
practical aspect and to know how a company actually works in practical
situation.
3. To know the mutual fund awareness level of the retail investors who are invest
in HDFC assets Management Company limited.
5
Limitations of Study
There is no activity without any limitations.
1. Though every one used to be very co-operative but every detail was unable to
be disclosed to me as the officials has to maintain secrets of the company.
2. It is difficult to cover all the function of the company.
3. The analysis and conclusion made by me as per my limited understanding and

there may be something variation in the actual situation.
4. Because of the limited time period, the survey work was conducted in the
Surat region and the sample size was taken as 100 respondents only.
5. In this rapidly changing turbulent era the suggestions and recommendations

drawn out today might prove inadequate or improper tomorrow; this is likely
to limit its effectiveness.
6
EXECUTIVE
SUMMARY
7
Executive Summary
The entire report is an unforgettable journey of support, knowledge, experience,

dedication, perfection, and patience. For me it is all about to understand a customer
and market of mutual fund industry.
The report is specially oriented to particular area, though it is representing the strong
base of Investment management-which covers different investment avenues, their
handling contribution, strategy, portfolios, and related risk factors. Mutual funds- how
they are formed, history, scenario, types, trends, myths, distribution, advantages, and
even disadvantages of them.
Tips to effectively sell the mutual funds, to be effective agent, some do’s and don’ts
about mutual funds while investing. Company details and its progress and its
interpretation base for analysis, conclusion, findings, and questionnaire, which helped
a lot in consumer, survey analysis. Asset allocation, accounting, taxation, valuation
and necessary information for generating base for conclusion. And at last but not the
least the collected data from city and their interpretation.
In short all efforts which was made to make this report explains
“WORK IS WORSHIP”
8
CONTENTS
Sr. No. Name of Table Page No.
1 Objectives of Study 5
2 Limitations of study 6
3 Executive summary 8
4 Company details 11
 About the Company 12
 Sponsors of HDFC Assets Management
13
Company
 Management of HDFC Assets Management
14
Company
 Offices of HDFC assets management company
17
limited
5 Product details 24
6 Future scenario 32
7 Industry details 33
 Introduction 34
 History of Mutual Fund Industry 36
 Customers Profile of mutual fund industry 40
 Positioning Strategy of mutual fund industry
41
 Promotional Tools Employed by various mutual
42
fund companies
 Facts About Mutual Fund 45
8 Mutual fund 46
 Introduction to Mutual Fund 47
 Mutual Fund Cycle 49
 Critical view about Mutual Fund 50
 Why Investor Needs Mutual Fund 54
 Mutual Fund Risk 55
9 Types of Mutual Fund 58
10 Structure of Mutual Fund 60
11 Other various assets management companies details 64
12 Regulatory Aspects 67
13 Research 71
 Purpose of the Research 72
 Research Objective 73
14 Research Methodology 74
9
 Research Design 75
 Sources of Data 76
 Sampling Plan 78
 Data Collection Method 80
15 Data analysis and findings 81
16 Findings 92
17 Limitations 95
18 Conclusions 97
19 Recommendations 100
20 Annexure 103
21 Glossary 105
22 List of Table 107
23 List of Graphs 108
24 Bibliography 109
10
COMPANY
DETAILS
11
About the Company: -
An HDFC asset Management Company limited is well-established fund house. HDFC

Assets Management Company limited is sponsored by Housing Development Finance
Corporation Limited (HDFC) and Standard life investments limited.
HDFC assets Management Company limited launched its scheme HDFC EQUITY
FUND in the year January 1995. Since then it focused on different class of schemes
for many years and launched several innovative products that went to become
bourgeoning categories in the Indian mutual fund industry.
Some of these were HDFC GROWTH FUND, HDFC TOP 200 FUND, and HDFC
BALANCED FUND, HDFC PRUDENCE FUND etc.
HDFC assets Management Company limited have offices in 29 cities and currently
manage assets in excess of Rs 36146.67 cores. (May 2007.)
12
Sponsors of HDFC Assets Management Company:-
Housing Development Finance Corporation Limited (HDFC)
HDFC was incorporated in 1977 as the first specialized Mortgage Company in India.
HDFC provides financial assistance to individuals, 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 9.5 lack borrowers, around 1 million depositors,
over 91,000 shareholders and 50,000 deposit agents as at March 31, 2007. HDFC has
raised funds from international agencies such as the World Bank, IFC (Washington),
USAID, DEG, ADB and KfW, international syndicated loans, domestic term loans
from banks and insurance companies, bonds and deposits. HDFC has received the
highest rating for its bonds and deposits program for the twelfth year in succession.
HDFC Standard Life Insurance Company Limited, promoted by HDFC was the first
life insurance company in the private sector to be granted a Certificate of Registration
(on October 23, 2000) by the Insurance Regulatory and Development Authority to
transact life insurance business in India.
Standard Life Investments Limited
The Standard Life Assurance Company was established in 1825 and has considerable
experience in global financial markets. The company was present in the Indian life
insurance market from 1847 to 1938 when agencies were set up in Kolkata and
Mumbai. The company re-entered the Indian market in 1995, when an agreement was
signed with HDFC to launch an insurance joint venture. On April 2006, the Board of
The Standard Life Assurance Company recommended that it should demutualise and
Standard Life plc float on the London Stock Exchange. At a Special General Meeting
held in May voting members overwhelmingly voted in favor 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 a wholly owned subsidiary of
Standard Life Investments (Holdings) Limited, which in turn is a wholly owned
subsidiary of Standard Life plc. Standard Life Investments is a leading asset
management company, with approximately US$ 269 billion as at March 30, 2007, of
assets under management. The company operates in the UK, Canada, Hong Kong,
China, Korea, Ireland and the USA to ensure it is able to form a truly global
investment view. In order to meet the different needs and risk profiles of its clients,
Standard Life Investments Limited manages a diverse portfolio covering all of the
major markets world-wide, which includes a range of private and public equities,
government and company bonds, property investments and various derivative
instruments.
13
Management of HDFC Assets Management Company:-
HDFC Trustee Company Limited:
A company incorporated under the Companies Act, 1956 is the Trustee to the Mutual
Fund vides the Trust deed dated June 8, 2000, as amended from time to time. HDFC
Trustee Company Limited is a wholly owned subsidiary of HDFC Limited.
HDFC Asset Management Company Limited:
HDFC assets Management Company limited was incorporated under the Companies
Act, 1956, on December 10, 1999, and were approved to act as an Asset Management
Company for the Mutual Fund by SEBI on July 3, 2000. The registered office of the
HDFC assets Management Company limited is situated at Ramon House, 3rd Floor,
H.T. Parekh Marg, 169, Backbay Reclamation, Church gate, Mumbai - 400 020. In
terms of the Investment Management Agreement, the Trustee has appointed HDFC
Asset Management Company Limited to manage the Mutual Fund. The paid up
capital of the HDFC assets Management Company limited is Rs.75.161 crore.
14
The present share holding pattern of the HDFC Assets management company is as
follows:
% of the paid up share
Particulars
capital
HDFC 50.10
Standard Life Investments
49.90
Limited
The HDFC Assets management company is managing 18 open-ended schemes of the

Mutual Fund viz. HDFC Growth Fund (HGF), HDFC Balanced Fund (HBF), HDFC
Income Fund (HIF), HDFC Liquid Fund (HLF), HDFC Tax Plan 2000 (HTP), HDFC
Children's Gift Fund (HDFC CGF), HDFC Gilt Fund (HGILT), HDFC Short Term
Plan (HSTP), HDFC Index Fund, HDFC Floating Rate Income Fund (HFRIF), HDFC
Equity Fund (HEF), HDFC Top 200 Fund, (HT200), HDFC Capital Builder Fund
(HCBF), HDFC Tax Saver (HTS), HDFC Prudence Fund (HPF), HDFC High Interest
Fund (HHIF), HDFC Sovereign Gilt Fund (HSGF) and HDFC Cash Management
Fund (HCMF). HDFC assets Management Company limited is also managing the
respective Plans of HDFC Fixed Investment Plan, a closed ended Income Scheme.
The HDFC Assets management company has obtained registration from SEBI vide
Registration No. - PM / INP000000506 dated December 22, 2000 to act as a Portfolio
Manager under the SEBI (Portfolio Managers) Regulations, 1993.
The HDFC Assets management company is also providing portfolio management /

advisory services and such activities are not in conflict with the activities of the
Mutual Fund
15
 HDFC assets Management Company’s punch line is “continuing a
tradition of trust”.
 In Gujarat HDFC assets Management Company is located at Ahmadabad,

Surat, vadodara, Rajkot.
 HDFC assets Management Company is working from 9:30 a.m. onwards.
 HDFC assets Management Company Have 200 and more distributors in

Surat.
 HDFC assets Management Company Provide account statements to

investors according to investor’s requirement.
 HDFC assets Management Company Provide good services to investors.
16
Offices of HDFC ASSETS MANAGEMENT
COMPANY LIMITED
INVESTOR SERVICE CENTRES/

OFFICIAL POINTS OF ACCEPTANCE FOR HDFC MUTUAL
FUND
HDFC Mutual Fund - Mumbai *
Ramon House, 3rd Floor,
REGISTERED H.T Parekh Marg, 169,
OFFICE Backbay Reclamation, Church gate
Mumbai 400020.
HDFC Mutual Fund - Hyderabad

6-3-883/7, 2nd Floor,
Saphire Square, Somajiguda,
Hyderabad - 500282.
Andhra Pradesh Email:serviceshyderabad@hdfcfund.com

HDFC Mutual Fund - Visakhapatnam
Ground Floor, Saigopal Arcade,
Opp Waltair Club,
Waltair Main Road, Siripuram,
Visakhapatnam - 530003.
Email:servicesvizag@hdfcfund.com
HDFC Mutual Fund - Patna
Rani Plaza Apartment,
Bihar (Patna X-Ray Clinic),
Exhibition Road,
Patna - 800001.
Email:servicespatna@hdfcfund.com
HDFC Mutual Fund - New Delhi
4th Floor, Mohan Dev Bldg., 13,
New Delhi Tolstoy Marg, Connaught Place,
New Delhi - 110001.
Email:servicesdelhi@hdfcfund.com
Goa HDFC Mutual Fund - Goa
17
A3, First Floor, Krishna Building,
Opp. Education Dept,
Behind Susheela Building, G.P. Road,
Panaji - 403001.
Email:servicesgoa@hdfcfund.com
HDFC Mutual Fund - Ahmadabad
2nd Floor, Megha House,
Besides Gruh House,
Mithakhali Six Roads,
Ahmedabad - 380009.
Email:servicesahmedabad@hdfcfund.com
HDFC Mutual Fund - Rajkot
2nd Floor, Shiv Darshan,
Dr Radha Krishnan Road,
5, Jagnath Plot Corner,
Rajkot - 360001.
Gujarat Email:servicesrajkot@hdfcfund.com
HDFC Mutual Fund - Surat
U1 - U3, Jolly Plaza,
Opp Athwa Gate Police Station,
Athwa Gate,
Surat - 395001.
Email:servicessurat@hdfcfund.com
HDFC Mutual Fund - Vadodara
Upper Ground Floor, Gokulesh,
R C Dutt Road,
Vadodara - 390007.
Email:servicesvadodara@hdfcfund.com
HDFC Mutual Fund – Jamshedpur
Gayatri Enclave,
Jharkhand 2nd Floor, "K Road",
Bistupur,
Jamshedpur - 831001.
Email:servicesjamshedpur@hdfcfund.com
Karnataka HDFC Mutual Fund – Bangalore
No.114, 1st Floor, Prestige Towers,
99 & 100, Residency Road,
Bangalore - 560025.
Email:servicesbangalore@hdfcfund.com
HDFC Mutual Fund – Mangalore
18
UG -II, 6 & 7, Upper Ground Floor,
Maximus Commercial Complex,
Light House Hill Road, Opp. KMC,
Mangalore - 575001.
Email:servicesmangalore@hdfcfund.com
HDFC Mutual Fund – Kochi
Ground Floor,
Cinema Cum Commercial Complex,
Kerala Behind Ravipuram Bus Stop,
M.G. Road,
Kochi - 682016.
Email:serviceskochi@hdfcfund.com
HDFC Mutual Fund – Bhopal
Ranjit Towers,
Zone II, 8 MP Nagar,
Bhopal - 462011.
Madhya Email:servicesbhopal@hdfcfund.com
Pradesh HDFC Mutual Fund – Indore
M1, M2 & M3, Mezzanine Floor,
Sterling Arcade,15 / 3, Race Course Road,
Indore - 452001.
Email:servicesindore@hdfcfund.com
Maharashtra HDFC Mutual Fund – Mumbai
Mistry Bhavan, 1st Flr, 122,
Backbay Reclamation,
Dinsha Vachha Road, Churchgate,
Mumbai - 400020.
Email:servicesmumbai@hdfcfund.com
HDFC Mutual Fund – Nagpur
106-110, Shriram Shyam Towers,
2nd Floor, Next to NIT Building,
Kingsway, Sadar,
Nagpur - 440001.
Email:servicesnagpur@hdfcfund.com
HDFC Mutual Fund – Nashik
G- 1 & G-2, "Suyojit Heights",
Opp. Rajiv Gandhi Bhavan,
Sharanpur Road,
Nashik - 422002.
Email:servicesnashik@hdfcfund.com
HDFC Mutual Fund – Pune
19
HDFC House, 2nd Floor,
Shivaji Nagar, University Road,
Pune - 411005.
Email:servicespune@hdfcfund.com
HDFC Mutual Fund – Bhubaneswar
2nd Floor, Vinayak 96,
Orissa Janpath,
Bhubaneshwar - 751001.
Email:servicesbhubaneshwar@hdfcfund.com
HDFC Mutual Fund – Chandigarh
SCO 375-376,
Ground Floor, Sector 35-B,
Chandigarh - 160022.
Email:serviceschandigarh@hdfcfund.com
Punjab
HDFC Mutual Fund – Ludhiana
SCO 122,
Feroze Gandhi Market,
Ludhiana - 141001.
Email:servicesludhiana@hdfcfund.com
HDFC Mutual Fund – Jaipur
Moondhra Bhavan,
3 Ajmer Rd,
Jaipur - 302001.
Email:servicesjaipur@hdfcfund.com
Rajasthan
HDFC Mutual Fund – Jodhpur
Gulab Singh Building,
11, Chopasani Road,
Jodhpur - 342003.
Email:servicesjodhpur@hdfcfund.com
HDFC Mutual Fund – Coimbatore
1371A, Ground Floor,
Nadar Building Trichy Road,
Coimbatore - 641018.
Email:servicescoimbatore@hdfcfund.com
Tamil Nadu
HDFC Mutual Fund – Chennai
ITC Centre, 1st Floor,
760 Anna Salai,
Chennai - 600002.
Email:serviceschennai@hdfcfund.com
Uttar Pradesh HDFC Mutual Fund – Kanpur
20
1st Floor, 16/80 D,
Behind SBI Main, Civil Lines,
Kanpur - 208001.
Email:serviceskanpur@hdfcfund.com
HDFC Mutual Fund – Lucknow
4 Shahnajaf Road,
Lucknow - 226001.
Email:serviceslucknow@hdfcfund.com
HDFC Mutual Fund – Kolkata
Menaka Estate, 1st Floor,

West Bengal 3 Red Cross Place,
Kolkata - 700001.
Email:serviceskolkata@hdfcfund.com
21
(Fig no 1- office locations of HDFC Assets Management Company)
22
PRODUCT
DETAILS
23
Product Details
EQUITY BALANCED DEBT
(Fig no 2 - Different Types of Products)
EQUITY SCHEMES OF HDFC ASSET MANAGEMENT

COMPANY:-
1. HDFC Equity Fund:-
 Investment Objective: The investment objective of the Scheme

Is to achieve capital appreciation.
 Investment Options: Dividend & Growth Option
 Nature of Scheme: - Open Ended Growth Scheme
 Inception Date: - January 01, 1995
24
2. HDFC growth fund:-
 Investment Objective: - The primary investment objective of
the Scheme is to generate long term capital appreciation from a
portfolio that is invested predominantly in equity and equity
related instruments.
 Inception Date: -September 11, 2000
3. HDFC Top 200 fund:-
 Investment Objective: - To generate long-term capital

appreciation from a portfolio of equity and equity-linked
instruments primarily drawn from the companies in BSE 200
index.
4. HDFC mid cape opportunity fund;-

appreciation from a portfolio that is substantially constituted of
equity and equity related securities of small and Mid-Cap
companies.
 Nature of Scheme:- Open Ended Growth Scheme
 Inception Date:- May 07, 2007
5. HDFC capital builder fund:-
appreciation from a portfolio that is substantially constituted of
equity and equity related securities of small and Mid-Cap
companies.
 Inception Date:- February 01, 1994
25
6. HDFC core and satellite fund:-
 Investment Objective: - The primary objective of the
Scheme is to generate capital appreciation through equity
investment in companies whose shares are quoting at prices
below their true value.
 Inception Date:- September 17, 2004
7. HDFC premier multicape fund:-
 Investment Objective: - The primary objective of the Scheme

is to generate capital appreciation in the long term through
equity investments by investing in a diversified portfolio of
Mid Cap and Large Cap `blue chip` companies.
 Investment Options: Dividend Plan, Growth Plan, The
Dividend Plan offers Dividend Payout and Reinvestment
Facility.
 Inception Date: - April 06, 2005
BALANCED SCHEMES OF HDFC ASSET MANAGEMENT

COMPANY:-
1. HDFC balanced fund: -
Scheme is to generate capital appreciation along with current
income from a combined portfolio of equity and equity
related and debt and money market instruments.
 Nature of Scheme: - Open Ended balanced fund
 Inception Date: - September 11, 2000
26
2. HDFC prudence fund:-
 Investment Objective: - The investment objective of the
Scheme is to provide periodic returns and capital
appreciation over a long period of time, from a judicious mix
of equity and debt investments, with the aim to prevent/
minimize any capital erosion
 Nature of Scheme: - Open Ended balanced fund
 Inception Date: - February 01, 1994
3. HDFC short term plan:-
HDFC Short Term Plan is to generate regular income
through investment in debt securities and money market
instruments.
 Investment Options: Growth Plan, Dividend Plan. The
Facility.
 Nature of Scheme:- Open Ended income fund
 Inception Date: - February 28, 2002
4. HDFC multi yield fund:-
Scheme is to generate positive returns over medium time
frame with low risk of capital loss over medium time frame.
 Investment Options: Growth Plan, Dividend Plan. The
Facility.
 Nature of Scheme: - Open Ended income fund
27
DEBT SCHEMES OF HDFC ASSET MANAGEMENT
COMPANY:-
1. HDFC Income Fund:-
is to optimize returns while maintaining a balance of safety,
yield and liquidity.
 Nature of Scheme: - Open Ended Income Scheme
2. HDFC Income Fund: -

 Investment Objective: - The investment objective of HDFC
High Interest Fund is to generate income by investing in a
range of debt and money market instruments of various
maturity dates with a view to maximizing income while
maintaining the optimum balance of yield, safety and liquidity.
 Nature of Scheme: - Open Ended Income Scheme
 Inception Date: - April 28, 1997
3. HDFC MF Monthly Income Plan - Short Term Plan:-

 Investment Objective: - The primary objective of Scheme is
to generate regular returns through investment primarily in
Debt and Money Market Instruments. The secondary objective
of the Scheme is to generate long-term capital appreciation by
investing a portion of the Scheme’s assets in equity and equity
related instruments. However, there can be No assurance that
the investment objective of the Scheme will be achieved.
28
 Investment Options: Quarterly Dividend Option, Monthly
Dividend Option, and Growth Plan. The Dividend Plan offers
Dividend Payout and Reinvestment Facility
 Nature of Scheme: - An open-ended income scheme. Monthly
income is not assured and is subject to availability of
distributable surplus
 Inception Date:- December 26, 2003
4. HDFC MF Monthly Income Plan - Long Term Plan:-

 Investment Objective: - The primary objective of Scheme is
to generate regular returns through investment primarily in
Debt and Money Market Instruments. The secondary objective
of the Scheme is to generate long-term capital appreciation by
investing a portion of the Scheme’s assets in equity and equity
related instruments. However, there can be no assurance that
the investment objective of the Scheme will be achieved
 Investment Options: Growth Plan, Quarterly Dividend
Option, Monthly Dividend Option. The Dividend Plan offers
Dividend Payout and Reinvestment Facility.
 Nature of Scheme: - An open-ended income scheme. Monthly
income is not assured and is subject to availability of
distributable surplus
 Inception Date: - December 26, 2003
29
5. HDFC Floating Rate Income Fund Long Term Plan:-

is to generate regular income through investment in a portfolio
comprising substantially of floating rate debt / money market
instruments, fixed rate debt / money market instruments swapped
for floating rate returns, and fixed rate debt securities and money
market instruments.
 Investment Options: Dividend Plan, Growth Plan. The

Dividend Plan offers Reinvestment Facility only
 Nature of Scheme: - An open-ended income scheme.
 Inception Date: - January 16, 2003
30
FUTURE
SCENARIO
31
 The asset base will continue to grow at an annual rate of about 35 to 40%
over the next five year as investor’s shift their assets from banks and other
traditional avenues. Some of the older public and private sector players will
either close shop or be taken over.
 Out of ten public players five will sell out, close down or merge with
stronger player in three to four years. In the private sector this trend has
already started with two mergers and one take over. Here too some of them
will down their shutters in the near future to come.
 But this does not mean that there is no room for other players. The
market will witness a flurry of new players entering the areas. There will be a
large no. of offers from various asset management companies in the time to
come, some big names like Principle, SBI, Fidelity, old mutual etc are looking
at Indian market seriously. One important reason for it is that most major
players have presence here and hence these big names would hardly like to get
left behind.
 The mutual fund industry is awaiting the introduction of derivatives in India as

this would enable it to hedge its risk and this in turn would be reflected in its
Net Asset Value (NAV).
 SEBI is working out the norms for enabling the existing mutual fund schemes
to trade in derivatives. Importantly, many market players have called on the
Regular to initiate the process immediately, so that the mutual funds can
implement the changes that are required to trade in Derivatives.
32
INDUSTRY
DETAILS
33
Introduction
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is invested by the fund manager in
different types of securities depending upon the objective of the scheme. These could
range from shares to debentures to money market instruments. The income earned
through these investments and the capital appreciations realized by the scheme 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 portfolio at a relatively
low cost.
Anybody with an investible surplus of as little as a few thousand rupees can invest in
Mutual Funds. Each Mutual Fund scheme has a defined investment objective and
strategy.
A Mutual Fund is the ideal investment vehicle for today’s complex and modern
financial scenario. Markets for equity shares, bonds and other fixed income
instruments, real estate, derivatives and other assets have become mature and
information driven. Price changes in these assets are driven by global events
occurring in faraway places. A typical individual is unlikely to have the knowledge,
skills, inclination and time to keep track of events, understand their implications and
act speedily. An individual also finds it difficult to keep track of ownership of his
assets, investments, brokerage dues and bank transactions etc.
34
A Mutual Fund is the answer to all these situations. It appoints professionally
qualified and experienced staff that manages each of these functions on a full time
basis. The large pool of money collected in the fund allows it to hire such staff at a
very low cost to each investor.
In effect, the Mutual Fund vehicle exploits economies of scale in all three areas -
research, investments and transaction processing. While the concept of individuals
coming together to invest money collectively is not new, the mutual fund in present
form is a 20th century phenomenon. In fact, mutual funds gained popularity only after
the Second World War. Globally, there are thousands of firms offering tens of
thousands of mutual funds with different investment objectives. Today, Mutual Funds
collectively manage almost as much as or more money as compared to banks.
35
History of Mutual Fund Industry
The mutual fund industry in India started in 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 four distinct phases
First phase – 1964-87

(Monopoly of UTI)
An Act of Parliament established Unit Trust of India (UTI) on 1963. 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.
Second Phase – 1987-93

(Entry of Public Sector Funds)
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 Canbank Mutual Fund (Dec 87), Punjab
National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of
India (Jun 90), and Bank of Baroda
Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had
set up its mutual fund in December 1990.
At the end of 1993, the mutual fund industry had assets under management of Rs.47,
004 crores.
Third Phase – 1993-2003
36
(Entry of Private Sector Funds)
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
functions under the SEBI (Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign mutual
funds setting up funds in India and also the industry has witnessed several mergers
and acquisitions. As at the end of January 2003, there were 33 mutual funds with total
assets of Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44, 541 crores of assets
under management was way ahead of other mutual funds.
Forth Phase –
Since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit
Trust of India with assets under management of Rs.29, 835 crores as at the end of
January 2003, representing broadly, the assets of US 64 scheme, assured return and
certain other schemes. The Specified Undertaking of Unit Trust of India, functioning
under an administrator and under the rules framed by Government of India and does
not come under the purview of the Mutual Fund Regulations.
37
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76, 000
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 has entered its
current phase of consolidation and growth. As at the end of October 31, 2003, there
were 31 funds, which manage assets of Rs.126726 crores under 386 schemes.
38
The graph indicates the growth of assets over the
years.
(Fig no 3. Growth of Asset Over The year)
39
Customers Profile of mutual fund industry:-
(Fig no 4.Type of Customer)
1. While you recommend a financial plan, you also need to understand the
needs and financial objectives of your customer along with his risk tolerance
and his expectations from the investments.
2. Honest and straightforward advice is appreciated. Help your customers make

the right choice
3. Advise your customers to start investing early and regularly to help them
optimize the benefits of the compounding rupee.
4. Help your investors with the procedures and paper work involved in making
an investment.
Treat every customer exclusively. A satisfied customer can give you increased
business through resale and referrals of other prospective customers
40
Positioning Strategy of mutual fund industry:-
Positioning starts with a product. But positioning is not what you do to a product.
Positioning is what you do to the mind of the prospect. That is, you position the
product in the mind of prospect. A company’s differentiating and positioning strategy
must change as the product, market, and competitors change over time. . There
should be no under positioning, over positioning, confused positioning or
doubtful positioning.
Channel of Distribution:-
In Every asset Management Company’s distribution channel played very

important roles.
Here assets management companies have distributors like

 Consultants
 Agents
 Distributors
 Advisers
 Broker
Their role is very important for Assets Management Company’s Office.
41
Promotional Tools Employed by various mutual fund
companies:-
Some specific other document help to increase selling product like: -
(1) Banners: -
Banners define brief idea of scheme, it should be very attractive with specific
objective & its related picture in city, and Banners keep in specific places which
very help to do good publicity. It distributes only by AMC’s office.
When any new scheme is launched or any new NFO coming up that times
company make banners before few days. Its helps to good advertising & easy
cover to customer or people.
(2) Application Form:
Any product like Equity, debt and balance, investor should fill up its common
Application forms.
Form define acknowledge slip which give return to customer.

Actually 3-time stamp done in form, one of them is acknowledged slip.
These forms are distributed by Assets Management Company’s office.
It is all Assets Management Company’s office duty to dispatch forms to their
customer like agents, brokers, and advisers time to time.
(3) Broachers:
Broachers include brief history of company. It defines when and where assets
management Company invests investor’s money.
This defines performance of each scheme product & also defines its comparison to
last 3 months to more than 5 years.
In end of every month Assets Management Company’s office send Boucher to
their investors, brokers, agents, advisers regularly.
42
NET ASSET VALUE:-
The Net Asset Value or NAV is a term used to describe the value of an entity's assets
less the value of its liabilities. The term is commonly used in relation to collective
investment schemes. It may also be used as a synonym for the book value of a firm.
NAV covers the company's current asset and liability position. Investors might
expect the company to have large growth prospects, in which case they would be
prepared to pay more for the company than the NAV suggests.
The NAV is usually below the market price because the current values of the fund’s
assets are higher than the historical financial statements used in the NAV calculation.
 CALCULATING NET ASSET VALUE
Unit capital is the investor’s subscriptions. In MF it is not treated as a liability.

Investments made on behalf of the investors are assets side of the balance sheet. There
are liabilities of short-term nature.
FUNDS NET ASSET = ASSET – LIABILITIES
NAV = Net Assets
Issued Units
I.e.
NAV= (market value of investments + other accrued income + other assets – accrued
expenses – other payables –other liabilities)/ (no. Of units outstanding as at the NAV
date)
43
THE FACTOR AFFECTING THE NAV ARE AS FOLLOWING:
1. Capital gains or losses on the sale or purchase of investment

Securities.
2. Dividend and income earned on the assets
3. Capital appreciation in the underlying value of the stocks holds in the portfolio
4. Other assets and liabilities
5. Number of units sold or purchased
44
Facts About Mutual Fund
 Equity Instruments like shares form only a part of the securities held by
Mutual Funds. Mutual Funds also invest in debt securities, which are
relatively much safer.
 The biggest advantage of Mutual Funds is their ability to diversify the risk.
 Mutual Funds are there in India since 1964. Mutual Funds market is much
evolved in U.S.A and is there for last 60 years.
 Mutual Funds are the best solution for people who want to manage risk and
get good returns.
 The size of Mutual Funds market in India is Rs. 107728 crores and that in
U.S.A is many times higher.
 According to the SEBI - NCAER Survey of Indian Investors about 15 million

or 8.7% of the households have invested in Mutual Funds and there are nearly
23 million unit holders in India.
 30% of investors fall in the income group of investors having monthly income
up to Rs. 10,000/-.
 In U.S.A there are more deposits in the mutual funds than in bank deposits.
 The truth is, as investors we should always pay attention to our mutual funds
and continue to monitor them.
45
MUTUAL FUND
46
Introduction to Mutual Fund
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is invested by the fund manager in
different types of securities depending upon the objective of the scheme. These could
range from shares to debentures to money market instruments. The income earned in
these investments and the capital appreciation realized by the scheme is 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 portfolio at a relatively low cost.
Anybody with an invest able surplus of a few thousand rupees can invest in Mutual
Funds. Each Mutual Fund scheme has a defined investment objective and strategy.
A mutual fund is the ideal investment vehicle for today’s complex and modern
financial scenario. Markets for equity shares, bonds and other fixed income
instruments, real estate, derivatives and other assets have become mature and
information driven. Price changes in these assets are driven by global events
occurring in faraway places. A typical individual is unlikely to have the knowledge,
skills, inclination and time to keep track of events, understand their implications and
act speedily.
A mutual fund is answer to all these situations. It appoints professionally qualified

and experienced staff that manages each of these functions on a fulltime basis. The
large pool of money collected in the fund allows it to hire such staff at a very low cost
to each investor. In fact, the mutual fund vehicle exploits economies of scale in all
three areas –research, investment and transaction processing.
47
A draft offer document is to be prepared at the time of launching the fund. Typically,
it pre specifies the investment objective of the fund, the risk associated, the cost
involved in the process and the broad rules for entry into and exit from the fund and
other areas of operation. In India, as in most countries, these sponsors need approval
from a regulator, SEBI in our case. SEBI looks at track records of the sponsor and its
financial strength in granting approval to the fund for commencing operations.
A sponsor then hires an asset management company to invest the funds according to
the investment objective. It also hires another entity to be the custodian of the assets
of the fund and perhaps a third one to handle registry work for the unit holders of the
fund. In the Indian context, the sponsors promote the Asset Management Company
also, in which it holds a majority stake. In many cases a sponsor can hold a 100%
stake in the Asset Management Company (AMC).
E.g. Birla Global Finance is the sponsor of the Birla Sun Life Asset Management
Company Ltd., which has floated different mutual funds schemes and also acts as an
asset manager for the funds collected under the schemes.
As per SEBI regulations, mutual funds can offer guaranteed returns for a maximum
period of one year. In case returns are guaranteed, the name of the guarantor and how
the guarantee would be honored is required to be disclosed in the offer document.
48
Mutual Fund Cycle
(Fig no 5.-Mutual Fund Cycle)
From the above cycle, it can be observed that how the money from the investors flow
and they get returns out of it. With a small amount of fund, investors pool their money
with the funds managers. Taking into consideration the market strategy the funds
managers invest this pool of money into reliable securities. With ups and downs in
market returns are generated and they are passed on to the investors. The above cycle
should be very clear and also effective.
The fund manager while investing on behalf of investors takes into consideration
various factors like time, risk, return, etc. so that he can make proper investment
decision.
49
Critical view about Mutual Fund
Benefits
If mutual funds are emerging as favorite investment vehicle, it is because of the many
advantages they have over other forms and avenues of investing, particularly for the
investors who has limited resources available in terms of capital and ability to carry
out details research and market monitoring. The following are the major advantages
offered by mutual funds to all investors.
 PROFESSIONAL EXPERTISE
Fund managers are professionals who track the market on an on going basis.
With their mix of professional qualification and market knowledge, they are
better placed than the average investor to understand the markets.
 DIVERSIFICATION
Since a mutual fund scheme invests in number of stocks and/or debentures, the
associated risks are greatly reduced.
 RELATIVELY LESS EXPENSIVE

When compared to direct investments in the capital market, mutual funds cost
less. This is due to savings in brokerage costs, demat costs, depository costs
etc.
 LIQUIDITY
Investments in mutual funds are completely liquid and can be redeemed at Net
Assets Value (NAV) related price on any working day.
 TRANSPARENCY
You will always have access to up-to-date information on the value of your
investment in addition to the complete portfolio of investments, the proportion
allocated to different assets and the fund manager’s investment strategy.
50
 FLEXIBILITY
Through features such as regular investment plans, regular withdrawal plans
and dividend investment plans, you can systematically invest or withdraw
funds according to your needs and convenience.
 SEBI REGULATED
All mutual funds are registered with SEBI and function within the provisions
and regulations that protect the interests of investors.
While most investment options provide most of these features, only

Mutual Funds provide all of these options.
51
Limitations
 NO CONTROL OVER COST

Any investor in a mutual fund has no control over the overall cost of investing.
He pays investment management fees as long as he remains with fund, albeit in
return for the professional management and research. Fees are payable even in
declining stage. A mutual fund investor also pays fund distribution costs, which
he would not incur in direct investing. However, this shortcoming only means
that there is a cost to obtain the benefits of mutual fund services.
 NO TAILOR-MADE PORTFOLIOS
Investors who invest on there own can build their own portfolios of shares and
bonds and other securities. Investing through funds means he delegates this
decision to the fund managers. The very high-net-worth individuals or large
corporate investors may find this to be a constraint in achieving their
objectives. However, most mutual fund managers help investors overcome this
constraint by offering families of funds- a large number of different schemes –
within their own management company. An investor can choose form different
investment plans and construct a portfolio of his own.
 MANAGING A PORTFOLIO OF FUNDS

Availability of a large number of funds can actually mean too much choice for
the investor. He may again need advice on how to select a fund to achieve his
objectives, quite similar to the situation when he has to select individual shares
or bonds to invest in.
52
 ENTRY AND EXIT COST
Mutual funds are a victim of their own success. When a large body like a fund
invests in shares, the concentrated buying and selling often results in adverse
price movement i.e. at the time of buying, the fund ends up paying a high price
and by selling it realizes a lower price. For obvious reasons, this problem is
even more severe for funds investing in small capitalization stocks. However,
given the large size of debt market, excluding UTI, most debt funds do not
face this problem.
 CHANGE OF INDEX COMPOSITION

The indices changing over the world to reflect changing market conditions.
There is an inherent survivorship bias in this process, with the bad stocks
bided out and replaced by emerging blue chips. This is a severe problem in
India with the sensex having being changing twice in last 5 years, with each
change being quite substantial. Another reason for change index composition
is Mergers and Acquisitions. The weight age of the shares of a particular
company in the index changes if it acquires a large company not a part of the
index.
53
Why Investor Needs Mutual Fund
Mutual funds offer benefits, which are too significant to miss out. Any investment has
to be judged on the yardstick of return, liquidity and safety. Convenience and tax
efficiency are the other benchmarks relevant in mutual fund investment. In the
wonderful game of financial safety and returns are the tows opposite goals and
investors cannot be nearer to both at the same time. The crux of mutual fund investing
is averaging the risk.
Many investors possibly don’t know that considering returns alone, many mutual
funds have outperformed a host of other investment products. Mutual funds have
historically delivered yields averaging between 9% to 25% over a medium to long
time frame. The duration is important because like wise, mutual funds return taste
bitter with the passage of time. Investors should be prepared to lock in their
investments preferably for 3 years in an income fund and 5 years in an equity funds.
Liquid funds of course, generate returns even in a short term.
54
Mutual Fund Risk
Mutual funds face risks based on the investments they hold. For example, a bond fund
faces interest rate risk and income risk. Bond values are inversely related to interest
rates. If interest rates go up, bond values will go down and vice versa. Bond income is
also affected by the changes in interest rates. Bond yields are directly related to
interest rates falling as interest rates fall and rising as interest rates.
Similarly, a sector stock fund is at risk that its price will decline due to developments
in its industry. A stock fund that invests across many industries is more sheltered from
this risk defined as industry risk.
Followings are glossary of some risks to consider when investing in mutual funds.
Country Risk
The possibility that political events (a war, national election), financial problems
(rising inflation, government default), or natural disasters will weaken a country’s
economy and cause investments in that country to decline.
 Income Risk
The possibility that a fixed-income fund’s dividends will decline as a result of falling
overall interest rates.
 Market Risk
The possibility that stock fund or bond fund prices overall will decline over short or
even extended periods. Stock and bond markets tend to move in cycles, with periods
when prices rise and other periods when prices fall.
55
Risk Return Reward in Mutual Fund
Equity Fund
Balance Fund
M IP
Income Fund
Short Term
Fund
Liquid Fund
(Fig no 6: - Risk Return in Mutual Fund)
This graph shows risk and return impact on various mutual funds. There is a direct
relationship between risks and return, i.e. schemes with higher risk also have potential
to provide higher returns.
56
TYPES OF
MUTUAL FUNDS
57
Types of Mutual Fund
There are a wide variety of Mutual Fund schemes that cater to your needs, whatever
your age, financial position, risk tolerance and return expectation. Whether as the
foundation of your investment program or as a supplement, Mutual Fund schemes can
help you meet your financial goals. The different types of Mutual Funds are as
follows:
 Diversified Equity Mutual Fund Scheme

A mutual fund scheme that achieves the benefits of diversification by investing in
the stocks of companies across a large number of sectors. As a result, it minimizes
the risk of exposure to a single company or sector.
 Sectoral Equity Mutual Fund Scheme

A mutual fund scheme, which focuses on investments in the equity of companies
across a limited number of sectors – usually one to three.
 Index Funds
These funds invest in the stocks of companies, which comprise major indices such
as the BSE Sensex or the S&P CNX Nifty in the same weight age as the
respective indices.
 Tax Saving Equity Schemes

Schemes investing predominantly in equity which offer tax rebates to investors
under specific provisions of the Income Tax Act, 1961 as the Government offers
tax incentives for investment in specified avenues. E.g. Equity Linked Savings
Schemes (ELSS). Currently rebate u/s 88 can be availed unto a maximum
investment of Rs 10,000. A Lock-in of 3 years is mandatory.
58
 Monthly Income Plan Scheme
A mutual fund scheme which aims at providing regular income (not necessarily
monthly, don't get misled by the name) to the unit holder, usually by way of
dividend, with investments predominantly in debt securities (up to 95%) of
corporate and the government, to ensure regularity of returns, and having a
smaller component of equity investments (5% to 15%) to ensure higher return.
 Income schemes
Debt oriented schemes investing in fixed income securities such as bonds,
corporate debentures, Government securities and money market instruments.
 Floating-Rate Debt Fund

A fund comprising of bonds for which the interest rate is adjusted periodically
according to a predator-mined formula, usually linked to an index.
 Gilt Funds
These funds invest exclusively in government securities.
 Balanced Funds
The aim of balanced funds is to provide both growth and regular income as such
schemes invest both in equities and fixed income securities in the proportion
indicated in their offer documents. They generally invest 40-60% in equity and
debt instruments.
59
Structure of Mutual Fund
Saving AMC
s
Trus Investmen
Unit t ts
s Return
Unitholde s
rs
Registrar
Trust
SEBI
Custodian AMC
(Fig no 7 - Structure of Mutual Fund)
Fund Sponsor
Any person or corporate body that establishes the Fund with a net worth of Rs. 10
crores and has paid out consistent returns to its investors for last three years
consistently and registers it with SEBI can be a fund sponsor. The fund sponsor forms
a trust and appoints board of trustees. He appoints Custodian and Asset Management
Company (AMC) either directly or through trust in accordance with SEBI regulations.
SEBI regulations also define that a sponsor must contribute at least 40 % to the net
worth of the asset management company.
60
Trustees
Trust is created through the document called Trust deed that is executed by the fund
sponsor and registered with SEBI. Board of trustees- a body of individuals or a trust
company-a corporate body may manage the trust cum Mutual Fund. These are
protector of unit holders interests.2/3 of the trustees will be individuals and will not be
associated with the sponsors.
Following are the rights of trustees:
 Approve each of the schemes floated by the assets Management Company.
 Right to request any necessary information from assets Management

Company.
 Right to take corrective action if they believe that of fund’s business.
 Right to dismiss the assets Management Company.
 Ensure that any shortfall in net worth of the assets Management Company
is made up.
Following are the obligations of trustees:
 Enter in to an investment management agreement with the assets

Management Company.
 Ensure that the fund’s transactions are in accordance with the trust
deed.
 Furnish to SEBI on a half yearly basis, a report on the fund’s activities.
61
 Ensure that no change in the fundamental attributes of any scheme or
the trust or any other change, which would affect the interest of unit
holder, happens with informing to unit holder.
 Review the investor complaints received and redressed of the same by

assets Management Company.
Asset Management Company
This acts as investment manager of the trust under the board supervision and direction
of trustees. In has to be approved and registered with SEBI.
This will float and manage different investment schemes in the name of trust and in
accordance with SEBI regulations. These acts in the interest of holders and reports to
the trustees. At least 50% of the directors on the board are independent of the sponsor
or the trustees.
Following are the obligations of Assets Management Company:
 Float investment schemes only after getting approval from the trustees and
SEBI.
 Send quarterly reports to trustees.
 Make the required disclosures to the investors in the area such as calculation of
NAV and repurchase price.
 Must maintain a net worth of at least Rs.10 crores at all the times
 Will not purchase or sale securities through any broker with the brokerage of 5 % or
more of the aggregate purchases and sale of securities made by the Mutual Fund in all
its schemes.
 Assets Management Company cannot act as trustees of any other Mutual Fund.
62
 Do not undertake any other activity conflicting with managing the fund.
Following are the bodies appointed by the trustees/AMC.
 Custodian is the responsible person for physical handling and safe keeping of the
securities. He should be independent of the sponsor and registered with SEBI.
 Indian capital market is moving away from physical certificates for securities to
dematerialized form with a depository. He holds dematerialized security holdings of
Mutual Fund.
Custodian
Often an independent organization, it takes custody of securities and other assets of
mutual fund. Its responsibilities include receipt and delivery of securities, collecting
income-distributing dividends, safekeeping of the units and segregating assets and
settlements between schemes. Their charges range between 0.15-0.2 percent of the net
value of the holding. Custodians can service more than one fund.
Depository
Indian capital markets are moving away from having physical certificates for
securities, to ownership of these securities in ‘dematerialized’ form with a Depository.
Thus, a mutual fund’s dematerialized securities holdings will be held by a Depository
through a Depository Participant. A fund’s physical securities will continue to be held
by a Custodian. Thus, deliveries of a fund’s securities are given or received by a
custodian or a depository participant, at the instruction of the AMC, although under
the overall direction and responsibility of the Trustees.
63
The other various assets management companies’ details are as
under: -
A) Bank sponsored
a. BOB Asset Management Co. Ltd.
b. Canbank Investment Management Services Ltd.
c. PNB Asset Management Co. Ltd.
d. SBI Funds Management Ltd.
e. UTI Asset Management Company (P) Ltd.
B) Institutions
a. GIC Asset Management Co. Ltd.
b. IDBI Principal Asset Management Co. Ltd.
c. IL & FS Asset Management Co. Ltd.
d. Jeevan Bima Sahayog Asset Management Co. Ltd.
C) Private Sector
1. Foreign
a. Principal Asset Management Co. Ltd.
b. Fidelity Asset Management Co. Ltd.
2. Indian
a. Benchmark Asset Management Co. Ltd.
b. Cholamandalam Asset Management Co. Ltd.
c. Escorts Asset Management Ltd.
d. J.M. Capital Management Ltd.
e. Kotak Mahindra Asset Management Co. Ltd.
f. Sundaram Asset Management Company
g. Reliance Capital Asset Management Ltd.
64
3. Joint Ventures - Predominantly Indian
a. Birla Sun Life Asset Management Pvt. Co. Ltd.

b. Credit Capital Asset Management Co. Ltd.
c. DSP Merrill Lynch Fund Managers Limited
d. First India Asset Management Private Ltd.
4. Joint Ventures – Predominantly Foreign
a. Alliance Capital Asset Management (India) Pvt. Ltd.
b. Deutsche Asset Management (India) Pvt. Ltd.
c. Dundee Investment Management & Research (Pvt.) Ltd.
d. HSBC Asset Management (India) Private Ltd.
e. ING Investment Management (India) Pvt. Ltd.
f. Morgan Stanley Investment Management Pvt. Ltd.
g. Prudential ICICI Management Co. Ltd.
h. Sun F & C Asset Management (I) Pvt. Ltd
I. Templeton Asset Management (India) Pvt. Ltd.
65
Regulatory
Aspects
66
AMFI (Association of Mutual
fund in India)
 AMFI not a Self Regulatory Organization (SRO).

 It’s made to promote mutual fund in the masses and give recommendation in
order to uphold the interest of the investor.
Objectives of AMFI:-
 To define and maintain high professional and ethical standards in all areas
of operation of mutual fund industry
 To recommend and promote best business practices and code of conduct to

be followed by members and others engaged in the activities of mutual
fund and asset management including agencies connected or involved in
the field of capital markets and financial services.
 To interact with the Securities and Exchange Board of India (SEBI) and to
represent to SEBI on all matters concerning the mutual fund industry.
 To represent to the Government, Reserve Bank of India and other bodies

on all matters relating to the Mutual Fund Industry.
 To develop a cadre of well-trained Agent distributors and to implement a

Programme of training and certification for all intermediaries and other
engaged in the industry.
 To undertake nation wide investor awareness Programme so as to promote

proper understanding of the concept and working of mutual funds.
67
SEBI (Security Exchange Board
of India)
Securities and Exchange Board of India ("SEBI"), the Capital Markets regulator has
clearly defined rules, which govern mutual funds. These rules relate to the formation,
administration and management of mutual funds and also prescribe disclosure and
accounting requirements. Such a high level of regulation seeks to protect the interest
of investors.
All Mutual Funds are registered with SEBI and they function within the provision of
strict regulations designed to protect the interests of investors. The operations of
Mutual Funds are regularly monitored by SEBI.
RBI (Reserve Bank of India)
Reserve bank of India was the regulator of Mutual Fund before SEBI. It regulated
mutual fund initially and there were only few schemes in the market. But now with
coming of SEBI, it has now become the main regulator of the Mutual Fund. RBI now
only governs Bank Sponsored Mutual Fund.
Ministry of Finance
The Ministry of Finance, which is charged with implementing the government

policies, ultimately supervises both the RBI and the SEBI. Besides being the ultimate
policy making and supervising entity, the MOF has also been playing the role of an
Appellate Authority for any major disputes over SEBI guidelines on certain specific
capital market related guidelines – in particular any cases of insider trading or
mergers and acquisitions.
68
Company Law Board
Mutual fund Asset Management Companies and corporate trustees are companies
registered under the Companies Act, 1956, and are therefore answerable to regulatory
authorities empowered by the Companies Act.
The primary legal interface for all companies is the Register of Companies (RoC).
The Department of Company Affairs in turn supervises roCs. The DCA forms part of
Company Law Board, which is part of the Ministry of Law and Justice of the Govt. of
India.
The RoC ensures that the assets management company or the Trustee Company as the
case may be is in compliance with all Companies Act provisions. All assets
management company accounts and records are filed with the Roc, who may demand
additional information and documents from the company. The RoC plays the role of a
watchdog with respect to regulatory compliance by companies.
The Company Law Board (CLB) is the apex regulatory authority under the
Companies Act. While the CLB guides the DCA, another arm of the CLB called the
Company Law Bench is the Appellate Authority for corporate offences.
The Company Law Board (CLB) is a body specially constituted by the Central
Government for carrying out judicial proceedings with respect to company affairs.
Since mutual fund assets Management Company are companies, the CLB’s role
assumes importance.
As the members of assets management companies or Trustee companies will usually

be the sponsors and their joint venture partners or associates, it is unlikely that mutual
fund investors will have anything to do with any of these regulators. The authorities
would generally regulate the assets management companies whose shareholders may
have recourse to them in specific cases.
69
Investors Rights
 Proportionate right to beneficial ownership of scheme’s assets

 Right to obtain information from trustees
 Entitled to receive dividend warrants within 30 days of declaration of
dividend
 Inspect major documents of the fund
 Appointment of the assets management company can be terminated by
75% of the unit holders of the scheme present and voting
 Right to approve of changes in fundamental attributes of a close ended
scheme (75 % of unit holders should approve) - right to be informed so in open
ended schemes so that they can redeem
 Right to receive a copy of annual financial statements of fund and
periodic transaction statements
 75% of the unit holders can resolve to wind up the scheme
Legal Limitations to Investors
 Unit holders can not sue the trust

 Can initiate legal proceedings against trustees
 Sponsor of mutual funds have no obligation to meet any shortfall in the
assured return - unless explicitly guaranteed in the offer document
 No rights to a prospective investor
Investor Obligations
 Carefully study the offer document before investing

 Monitor his investment in a scheme by referring financial statements,
performance updates and research reports sent by the assets management
company.
70
RESEARCH
71
Purpose of the Research
With liberalization, privatization and globalization there has been a major change in
the Indian Mutual Funds Industry. The momentum is on and one is sure to see similar
hectic activity at the offices of the new entrants especially after the 90’s as private
sector gained entry in the Indian markets.
With the private sector penetration, a large number of schemes have also been
introduced due to which the average consumer has become vary sensitive to the new
schemes coming its way. So to ensure about the various consumer attitudes, a survey
was undertaken.
De facto, to ensure what the “consumer thinks” & “what it thinks the best” we
undertook a consumer survey, to get a clear picture of the future of the Mutual Funds
companies who are busy wooing the customers, with their lucrative schemes, to
survive the rat race & emerge as no.1 in this field.
72
Research Objective
Research Objectives addresses the purpose of the investigation. It is here that you
layout exactly what is being planned by the proposed research. The Research
Objectives flows naturally from the problem statement, giving the sponsor specific,
concrete, and achievable goals. It is best to list the objectives either in order of
importance or in general terms first, moving to specific terms. Research Objective is
the basis for judging the Research process. It is the final step giving exact definition
of problem.
 Analyzing mutual fund awareness in retail investors of HDFC

assets Management Company in Surat.
73
RESEARCH
METHODOLODY
74
Research methodology is a systematic plan or schedule or program of the research
done. It describes all the procedures of the research.
Research Design
Research design can be described as an out line of a research project working or a

pattern. In a research design there are series of prior decision that together provide
a master plan for completing a research project. Research design is proved to be a
bridge between what has been established and what is to be done in conduct of the
studies. Research design should be compressive and it should provide which
method to be used and what work to be done.
Research design describes as a master plan a series of key decisions that serves a
model for conducting a research project. There are the main components of
research design.
 Objective of research
 Data inputs
 Analysis of data collected
The research design was exploratory type and the focus was on getting mutual
fund’s employees views for various products, expectations from market.
Exploratory Research:
Exploratory study goes beyond description and attempts to explain the reasons for the
phenomenon that the descriptive study only observed. The researcher uses theories or
at least hypotheses to account for the forces that caused a certain phenomenon to
occur.
75
Sources of Data
The gathering of data may range from a simple observation at one location to a
grandiose survey of multinational corporations at sites in different parts of the world.
The method selected will largely determine how the data are collected. DATA is the
facts presented to the researcher from the study’s environment. Characteristics of the
data are as follows:
 Data are more metaphorical than real

 Data are processed by our senses-often limited in comparison to
The senses of other living organisms.
 Capturing data are said to be trustworthy because they may be
Verified.
 Data classify their verity by closeness to the phenomena
There are two kinds of data that can be collected for research purpose. Based on the
requirement in the research appropriate data is collected. Both the kinds of data are
shown below in the figure:
Error: Reference source not found
1) Primary data source
Primary data are collected and gathered for the first time. Primary data are sought for
their proximity to the truth and controls over error. Advantages of primary data are:
76
 Researchers can collect precisely the information they want.
 They usually can specify the operational definitions used and can eliminate, or
at least monitor and record the extraneous influences on the data as they are
gathered.
2) Secondary data source
Someone else collects secondary data. So, it becomes secondary information for the
research. Secondary data have had least one level of interpretation inserted between
the event and its recording. Reasons for using the secondary data are listed below:
 They fill a need for specific reference or citation on some point

 Secondary data are an integral part of a larger research study
 Secondary data may be used as the sole basis for a research study, since
In many research situations one cannot conduct primary research
Because of physical, legal, or cost influences.
Analyzing the requirement of data, it was found that primary data is more important
for achieving Research Objective. Primary data is collected with the help of
interviews.
77
Sampling Plan
Collecting the required information from the right source is very important. Sources
from which the data are collected differ as per the required of researcher.
Basically there are two types of data collection sources:
1) Sampling Unit:
The sampling unit primarily consisted of investors like businessman, professionals,

salaried employees and others. The sample unit is taken from the Surat city of Gujarat
region.
2) Sample Size:
Though large sample give more reliable results than small samples but increases the
cost, time and non-sampling error. Keeping in view these constraints 100 respondents
were chosen. Attempts have been made to see that samples are chosen from different
areas of Surat.
I have taken 100 responds as a sample size for this particular project.
78
The following table shows area wise distribution of sample size.
AREA SAMPLE
UDHNA 17
MORABHAGAL 3
ADAJAN 15
RANDER ROAD 17
RALWAY STATION
ROAD 5
PARLE POINT 5
GHODDOD ROAD 8
PIPLOD 2
MAJURAGATE 2
RING ROAD 4
BHAGAL 4
KATARGAM 4
VARACHA 2
CITY LIGHT ROAD 6
NANPURA 2
PANDESARA 1
VED ROAD 1
PAL 1
BHESTAN 1
TOTAL 100
79
Data Collection Method
“This step involves making a very specific plan about how you will conduct
your research and collect your data.”
1) Surveys & Questionnaires

Survey The means by which quantitative research is conducted.
Questionnaire A prepared set of questions designed to generate data

necessary for accomplishing the objectives of the research project.
I used survey method for data collection. Information was collected by

personal interviews through questionnaire.
Following types of measurement scales were used in the questionnaire.

 Simple category scale: - (Q-2, Q-4, Q-8, Q-9)
 Multiple choice single response scales: - (Q-6)
 Multiple choice multiple response scale:-(Q-1, Q-3, Q-5, Q-7)
80
DATA ANALYSIS
AND
FINDINGS
81
Q-1 which investment avenues are you aware of?
INVESTMENT AVANUES FREQUENCY PERCENTAGE

EQUITY/MUTUAL FUND 100 34.36%
POST OFFICE 94 32.30%
F.D. 86 29.55%
OTHERS 11 3.79%
11
86 100
EQUITY/M.F.
POST OFFICE
F.D.
OTHERS
94
(Fig no 9: - Define investments avenues)
Interpretation: -
From the above charts we can interpret that awareness of equity/mutual fund, post
office (NSC, KVP, and PPF), fixed deposits is more compare to others like GOVT
ISSUED Instrument, GOVT Backed Instrument, Real Estate, gold etc. so HDFC
assets Management Company needs to focus more on those investors who are more
invest in KVP, NSC, PPF and fixed deposits.
82
Q-2 do you invests in mutual fund?
YES NO
97 3
120
97
100
NO OF PEOPLE
80
60 Series1
40
20
3
0
YES NO
PREFERNCE
(Fig no 10: - Define investments in mutual fund)
From the above chart it is getting clear that now a days people are like to invest their
money in mutual fund of different assets management company, out of 100 people
sampled 97 are investing in the mutual fund.
83
Q-3 If yes, in which assets class do you want to invest in
Mutual Fund?
TYPES OF SCHEMES RESPONSE PERCENTAGE

EQUITY 86 72.27%
DEBT 27 22.69%
LIQUID 6 5.04%
R ESPON SE
100
86
80
NO OF PEOPLE
60
R ESPON SE
40 27
20
6
0
E Q U ITY DEBT L IQ U ID
S C H EM ES
(Fig no 11: - Define schemes preferred by investors)
From the above chart it is getting clear that from 100 peoples sample 86(72.27%)
people are invest in equity assets class and 27(22.69%) people choose to invests in
debt class but only just 6(5.04%) peoples choose to invests in liquid class.
84
Q-4 Do you invest in HDFC assets management company
Limited?
YES NO TOTAL
56 44 100
60 56
50 44
NO OF PEOPLE
40
30 Series1
20
10
0
YES NO
PREFERNCE
(Fig no 12: - Define investment in HDFC assets Management Company)
From the above chart it is getting clear that out of 100 people sampled, 56
peoples are invest in HDFC assets management company and 44 peoples
are not invests in HDFC assets management company.
85
Q-5 If yes, in which scheme would you invest in HDFC assets
Management company limited?
NO OF
SCHEMES OF HDFC INVESTOERS
EQUITY FUND 43
CAPITAL BUILDER FUND 2
PRUDENCE FUND 17
TAX SAVER FUND 35
CORE AND SATELITE FUND 3
TOP 200 FUND 16
BALANCED FUND 1
GROWTH FUND 16
OTHERS FUND 5
NO OF INVESTOERS
16 5
1 43
16
3 2
35 17
EQUITY FUND CAPITAL BUILDER FUND

PRUDENCE FUND TAX SAVER FUND
CORE AND SATELITE FUNDTOP 200 FUND
BALANCED FUND GROW TH FUND
OTHERS FUND
(Fig no 13: - Define scheme in which investors invest in HDFC assets

Management Company)
From the above chart we can see that in HDFC assets Management Company’s
EQUITY FUND maximum number (43) of people are invest. In TAX SAVER FUND
35 number of people invests. In both TOP 200 FUND and GROWTH FUND 16
numbers of people are invests but in BALANCED FUND, CAPITAL BUILDER
FUND, CORE AND SATELITE FUND only 1,2 and 3 people are invest so investors
are not invested in these 3 schemes. In PRUDENCE FUND 17 numbers of people are
invested.
86
Q-6 By which medium you invest in HDFC assets
MEDIUM OF INVESTMENT NO OF PEOPLE

DISTRIBUTOR 8
BANK 48
ONLINE 0
NO OF PEOPLE
48
50
45
40
35
30
25
20 NO OF PEOPLE
15
8
10
5 0
0
DISTRIBUTOR ONLINE
MEDIUMS
(Fig no 14: - Define mediums choose by investors for invest in HDFC

assets management company)
From the above chart it’s getting cleared that most of the peoples (48) are invest by
bank and only 8 peoples are invest by distributors. Nobody invests through online. So
here HDFC assets Management Company has to provide facility by which investors
invest their money with out any middle man in mutual fund schemes through online.
Notes: - here out of 100 responds, 44 responds are not invest in HDFC assets
Management Company. These responds are not considered in these questions.
87
Q-7 why do you prefer investing in HDFC assets
PREFENCE CRITERIA NUMBER

BETTER FUND HOUSE 43
EXCELLENT CUSTOMER SERVICE
PROVIDER 15
CONSISTANT RETURN 44
OTHERS 1
NUMBER BETTER FUND

HOUSE
1 EXCELLENT
44 43 CUSTOMER
SERVICE
PROVIDER
CONSISTANT
15
RETURN
OTHERS
(Fig no 15: - Define Preference criteria of investors)
From the above pie - chart it can be seen that majority of the people that is 44 peoples
give first rank to consistent return and 43 peoples invest in HDFC assets management
company because HDFC assets management company is a better fund house and 15
peoples believes that HDFC assets Management Company provides EXCELLENT
CUSTOMER SERVICE.
88
Q-8 In which type of product /schemes would you prefer while
Invested in equity schemes of HDFC assets management
Company limited?
TYPES OF SCHEMES RESPONSE

OPEN ENDED 53
CLOSE ENDED 3
RESPONSE
60 53
50
NO OF PEOPLE
40
30 RESPONSE
20
10 3
0
OPEN ENDED CLOSE ENDED
TYPES OF SCHEMES
(Fig no 16: - Define type of product /schemes investors prefer for

investments)
From the above chart it is getting clear that most of peoples (53) prefer to invest in
OPEN ENDED equity schemes and only just 3 peoples want to invest in CLOSE
ENDED equity schemes of HDFC assets Management Company.
Notes: - here out of 100 responds, 44 responds are not invest in HDFC assets
Management Company. These responds are not considered in these questions.
89
Q-9 do you know about on going new fund offer of HDFC
Assets Management company limited?
AWARENESS OF NFO NUMBER PERCENTAGE

YES 58 58%
NO 42 42%
TOTAL 100 100%
NUMBER
42
YES
NO
58
(Fig no 17: - Define awareness level about on going NFO of HDFC assets
Management Company.)
The above pie - chart shows that around 58% people aware of on going new fund
offer of HDFC assets Management Company and only 42% people are unaware from
on going new fund offer of HDFC assets management company.
90
FINDINGS
91
Findings
 Almost 56% are investing in HDFC assets management company’s schemes.
 Out of the total respondent almost 30% said that they invest in fixed deposit
and Insurance. Where as 34% said that they invest in Shares and mutual funds,
where as 32% says that they invest in post office schemes.
 97% of the investor was found who is invested their savings in different
schemes of mutual fund.
 53 respondents prefer to invest in a open ended schemes of HDFC assets

management company, where as remaining only 3 respondents prefer to invest
in a close ended of HDFC assets management company.
 It is found that awareness level about Mutual Funds is 97% in Surat city of
Gujarat.
 Out of the total respondent 72.27% are investing in equity schemes. Where as
remaining 22.69% prefer debt and 5.04% prefer to invest in liquid schemes.
 HDFC assets Management Company are also highly popular for their
consistent return and 43 responds believes that HDFC assets Management
Company is better fund house. While only just 15 responds believes that
HDFC assets Management Company provides EXCELLENT CUSTOMER
SERVICE.
92
 Out of the total respondents almost 48 responds are investing through bank,
only 8 responds investing their money by distributor and nobody invested by
online.
 The 58% of the respondent were aware about the ongoing NFO of HDFC
assets management company and 42% were not aware about the ongoing NFO
of HDFC assets management company.
 In HDFC assets Management Company’s EQUITY FUND maximum number

(43) of people are invested and In TAX SAVER FUND 35 number of people
are invests.
93
LIMITATIONS
94
Limitations of research
 This exploratory research is done focusing on the investment scenario of Surat

city of Gujarat region only and therefore findings and suggestions given on the
basis of this research and cannot be considered for the entire Mutual Fund
Industry of India.
 Some of the people, out of various sectors that I had visited for study, did not
give me cooperative response.
 Due to small market and time limit I could take only 100 responses.
 Another limitation is that due to lack of knowledge and education many

investors don’t know the basic ideas behind mutual fund.
 Due to Time constraint I could not analyze more.
 My own inexperience in research area might have affected the study.
95
CONCLUSIONS
96
Conclusions
 Half of the respondents are investing in different schemes of mutual fund

companies.
 The investors prefer investing more in banks and post office, which shows that
investors want security, and assured returns.
 Others than Banks and post office the next preference of investors who go for
risky preposition in shares and Mutual Funds. That is basically due to
misconception that Mutual Fund Companies usually invest in equity market,
which shakes trust of people in Mutual Fund.
 Majority of investors invested in open-ended schemes.
 The awareness level about HDFC assets Management Company is moderate

but still the awareness should be created because 44% peoples still not invest
in HDFC assets Management Company.
 As the investor prefers safe investment and want consistent return, they invest
in debt schemes (22.69%).
 The investors prefer HDFC assets Management Company more because of the
tax benefit and consistent return.
 Mutual funds are also preferred because of the cost effectiveness and higher
income by investing in equity schemes.
 The banks mostly make the investments through the agent’s followed.
97
 Professional and Business class, which is considered to be the most
knowledgeable class of the region prefers Mutual Funds less compare to
service class.
 The time frame of the investment by majority of the investors is open-ended

schemes in which their money is not locked for 3 to 5 years.
98
RECOMMENDATION
99
Recommendations
 The company should try to make aware people about their different schemes
through the road show; seminars and presentation that it is not just equity
based schemes but also debt and liquid or balanced schemes also promoted by
company. Company has to put hoardings, banners, pamphlets in that area
where peoples can watch easily.
 The customers should be made aware that if the time frame of the investment
is more than 3 years Equity option is the best tool for investing in mutual fund
by this investors getting good and high returns for their investments.
 The company should be conducting special training and motivation

Programme for their distributors and also for investors so that they are being
motivated to work, their quality of performance and contribution in sales is
maintained.
 Company has to provide application forms and other promotional materials to

their distributors time to time and company has to maintain better relationship
with their distributors by these they can give good contribution in investments.
 None of responds invest their money in different schemes of company

By Online, so company has opportunity to launch online services for their
distributors and retail investors.
100
 Company’s core and satellite fund, balanced fund, capital builder fund are
preferred by very few investors because this schemes not perform well so
company has to think about their companies in which they invest investor’s
money so they have to change portfolio of investments.
 Most of the people still preferred to invest in post office schemes and fixed
deposits so company has to focus on these investors.
101
ANNEXURE
102
Questionnaire
NAME: -
ADDRESS: -
CONTACT NO: (O) (R) (M)
1) Which investment avenues are you aware of?

Equity /Mutual fund
Post Office (NSC, KVP, PPF)
Fixed Deposits
Others
If others please specify
2) Do you invest in mutual funds?

Yes No
3) If yes, in which assets class do you want to invest in mutual funds?
Equity Debt Liquid
4) Do you invest in HDFC mutual fund?

Yes No
103
5) If yes, in which scheme would you invest in HDFC MUTUAL FUND?
Equity
Capital builder
Prudence fund
Tax saver
Core & satellite
Top 200 fund
Balanced fund
Growth
Others
6) By which medium do you invest in HDFC mutual fund scheme?

Distributor Bank Online
7) Why do you prefer investing in HDFC MF?
Better fund house
Excellent customer service provider
Consistent return
Other
If other please specify
8) Which type of product/scheme would you prefer while investing in Equity

Scheme of HDFC mutual fund?
Open-ended Close ended
9) Do you know about on going new fund offers of HDFC AMC?
Yes No
104
Remarks if any other please specifies: -
Thank you for your time.
Glossary
 Net Asset Value (NAV)

Net Asset Value is the market value of the assets of the scheme minus its
liabilities. The per unit NAV is the net asset value of the scheme divided by the
number of units outstanding on the Valuation Date.
 Sale Price
The price you pay when you invest in a scheme. Also called Offer Price. It
May include a sales load.
 Repurchase Price
The price at which a close-ended scheme repurchases its units and it may
Include a back-end load. This is also called Bid Price.
 Redemption Price
The price at which open-ended schemes repurchase their units and close-
Ended schemes redeem their units on maturity. These prices are NAV
Related.
 Repurchase or ‘Back-end’ Load

A charge collected by a scheme when it buys backs the units from the unit
105
Holders.
 Expense Ratio:
The Expenses of a scheme include management fees and all the fees associated with
the scheme's daily operations. Expense Ratio refers to the annual percentage of fund's
assets that is paid out in expenses and can affect the performance of the scheme.
 Exit Load:
It is the load charged by the fund when one redeems the units from the fund. It
reduces the price of the units to less than the NAV and is expressed as a percentage of
NAV.
 Face Value:
The original issue price of one unit of a scheme, generally Rs 10.
 Lock-in period:
The cooling period after investment in fresh units during which the investor
Cannot redeem the units.
 No Load:
It refers to the fund that does not charge any load for buying or selling its units, i.e.
the investor can transact at the NAV.
106
List of table
Sr. No. Name of Table Page No.
1 Offices of HDFC assets management company limited 17

2 Other various assets management companies’ details 64
3 Area wise distribution of sample size. 79
4 Define investments avenues 82
5 Define investments in mutual fund 83
6 Define schemes preferred by investors 84
Define investment in HDFC assets management
7 85
company
Define scheme in which investors invest in HDFC
8 86
assets management company
Define medium choose by investors for invest in HDFC
9 87
10 Define PREFENCE CRITERIA of investors 88
Define type of product /schemes investors prefer for
11 89
investments.
Define awareness level about on going NFO of HDFC
12 90
assets management company.
107
List of Graph
Sr. No. Name of Graph Page No.
Office locations of HDFC Assets Management

1 22
Company
2 Different Types of Products 24
3 Growth of Asset Over The year 39
4 Types of customers 40
5 Mutual Fund Cycle 49
6 Risk Return in Mutual Fund 56
7 Structure Of Mutual Fund 60
8 Classification Of Data 76
9 Define investments avenues 82
10 Define investments in mutual fund 83
11 Define schemes preferred by investors 84
12 Define invest in HDFC assets management company 85
Define scheme in which investors invest in HDFC
13 86
Define medium choose by investors for invest in HDFC
14 87
15 Define Preference criteria of investors 88
Define type of product /schemes investors prefer for
16 89
investments.
Define awareness level about on going NFO of HDFC
17 90
assets management company.
108
Bibliography
Books
 Cooper and schinder Research Methodology New Delhi Tata

McGraw-Hill Ltd 2001
 Fact sheet of HDFC assets Management Company limited.
Websites
 www.hdfcfund.com
 www.amfiindia.com
 www.valuereserchonline.com
 www.moneycontrol.com
109
CERTIFICATE
This is to certify that Mr. Badami Kalpesh D. has satisfactorily completed the project
work entitled, “Mutual fund Awareness in Retail Investors Of HDFC Assets
management company in Surat” Based on the declaration made by the candidate
and my association as a guide for carrying out this work, I recommended this project
report for evaluation as a part of the MBA programmer of Veer Narmad South
Gujarat University.
Place: _______________
Date: (Dr. R. S. Shah)
This project is forwarded for evaluation to the Veer Narmad South Gujarat
University.
Place:
Date: ____________________
Director of GRIMS
(Dr. R. S. Shah)
110
111

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SUMMER TRAINING

HDFC MUTUAL FUND

(HDFC ASSETS MANAGEMENT COMPANY

MASTER OF BUSINESS ADMINISTRATION

SUBMITTED BY: GUIDED BY:

BADAMI KALPESH. D. INTERNAL GUIDE AT GRIMS

EXTERNAL GUIDE AT CO.

GIDC RAJJU SHROFF ROFEL INSTITUTE OF MANAGEMENT

SUMMER TRAINING PROJECT (2007)

The objective of the training undertaken is to get specialized knowledge in the

DATE: - SIGNATURE (student)

PLACE: - SIGNATURE (guide)

Place: - Surat. Badami Kalpesh. B.

1. My primary objective is to acquire primary functions of management like

There is no activity without any limitations.

2. It is difficult to cover all the function of the company.

3. The analysis and conclusion made by me as per my limited understanding and

5. In this rapidly changing turbulent era the suggestions and recommendations

The entire report is an unforgettable journey of support, knowledge, experience,

Sr. No. Name of Table Page No.

An HDFC asset Management Company limited is well-established fund house. HDFC

Standard Life Investments Limited

HDFC Trustee Company Limited:

HDFC Asset Management Company Limited:

The HDFC Assets management company is managing 18 open-ended schemes of the

The HDFC Assets management company is also providing portfolio management /

 In Gujarat HDFC assets Management Company is located at Ahmadabad,

 HDFC assets Management Company is working from 9:30 a.m. onwards.

 HDFC assets Management Company Have 200 and more distributors in

 HDFC assets Management Company Provide account statements to

 HDFC assets Management Company Provide good services to investors.

INVESTOR SERVICE CENTRES/

HDFC Mutual Fund - Hyderabad

Andhra Pradesh Email:serviceshyderabad@hdfcfund.com

Menaka Estate, 1st Floor,

EQUITY BALANCED DEBT

(Fig no 2 - Different Types of Products)

EQUITY SCHEMES OF HDFC ASSET MANAGEMENT

1. HDFC Equity Fund:-

 Investment Objective: The investment objective of the Scheme

 Nature of Scheme: - Open Ended Growth Scheme

 Inception Date: - January 01, 1995

3. HDFC Top 200 fund:-

 Investment Objective: - To generate long-term capital

4. HDFC mid cape opportunity fund;-

 Investment Objective: - The primary objective of the Scheme

BALANCED SCHEMES OF HDFC ASSET MANAGEMENT

2. HDFC Income Fund: -

3. HDFC MF Monthly Income Plan - Short Term Plan:-

4. HDFC MF Monthly Income Plan - Long Term Plan:-

 Investment Objective: - The primary objective of the Scheme

 Investment Options: Dividend Plan, Growth Plan. The

 Nature of Scheme: - An open-ended income scheme.

 Inception Date: - January 16, 2003

 The mutual fund industry is awaiting the introduction of derivatives in India as

First phase – 1964-87

Second Phase – 1987-93

Third Phase – 1993-2003

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more

(Fig no 3. Growth of Asset Over The year)

(Fig no 4.Type of Customer)

2. Honest and straightforward advice is appreciated. Help your customers make

In Every asset Management Company’s distribution channel played very