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A Project Report

On

MUTUAL FUND

AS AN INVESTMENT
OPTION

Submitted By:
Ms. SHRUTI SHETTY Ms. JAYASHRI AYYAR

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I, SHRUTI SHETTY & JAYASHRI AYYAR of RIZVI ACADEMY OF MANAGEMENT
hereby declare that I have completed this project on ³MUTUAL FUND AS AN
INVESTMENT OPTION.´ in the Academic Year 2009-2010. The information submitted is
true and original to the best of my knowledge.

Signature of the Student Signature of the Student

(SHRUTI SHETTY) (JAYASHRI AYYAR)

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I, Ms.Sheetal hereby certify that SHRUTI SHETTY & JAYASHRI AYYAR Of RIZVI
ACADEMY OF MANAGEMENT has completed this project on ³MUTUAL FUND AS AN
INVESTMENT OPTION´ in the Year 2009. The information submitted is true and original to
the best of my knowledge.

Signature of Project Guide

(Ms.Shital)

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This project was a great learning experience for me. During this project I have interacted with
many people to whom I should be always obliged, and thankful. Though this project bears our
name we would like to say that it was a joint efforts all the people who we are acknowledging.
This project bears the imprints of these hard to forget people.

First of all I would like to acknowledge Ms.Sheetal who has been a helping hand for us while
making it. Who guided us in every possible aspect and also a special thanks to HDFC MUTUAL
FUND for giving us the opportunity to 
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Secondly I would like to appreciate my college, for giving me an opportunity to make a project
on such a wonderful topic, which added a lot to my knowledge and also a special thank to our
Project Guide Prof Chetan Kadam and Prof.Gaurav Chedha.

Next I would like to mention and appreciate our parents for cooperating with us while making
this project.

My overriding debt continues to be my lovely friends who provided me with the time, support,
and inspiration needed to prepare this project

IT¶S TRULY OUR PROJECT.

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1. INVESTMENT
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Money committed or property acquired for future income. Trade off between risk and reward
while aiming for incremental gain and preservation of the invested amount (principal). In
contrast, speculation aims at 'high gain or heavy loss,' and gambling at 'out of proportion gain or
total loss.'

Two main classes of investment are (1) Fixed income investment such as bonds, fixed deposits,
preference shares, and (2) Variable income investment such as business ownership (equities),
property ownership. In economics, investment means creation of capital or goods capable of
producing other goods or services. Expenditure on education and health is recognized as an
investment in human capital, and research and development in intellectual capital. Return on
investment (ROI) is a key measure of a firm's performance.

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There is a clear difference between saving and investment.

Savings:

Savings are generally funds that you set aside to meet your future needs. These could be taking
your family for a small holiday or buying an electronic item. Another important feature of
savings is that these can be accessed relatively quickly. The most universal way of saving is in to
a bank account ('savings' account) where the money is available to you on demand.

Investments:

An investment, on the other hand, is what helps you meet your longer term needs and larger
financial goals. There is some level of risk attached to all types of investments and this is what
determines the returns on your investments. The higher the risk, the greater the chances of a
higher return. There are various investment types along the risk-return spectrum.

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An investor has numerous investment options to choose from, depending on his risk profile and
expectation of returns. Different investment options represent a different risk-reward trade off.
Low risk investments are those that offer assured, but lower returns, while high risk investments
provide the potential to earn greater returns. Hence, an investor¶s risk tolerance plays a key role
in choosing the most suitable investment.

Banks today provide a range of investment options, including international investing, investing
in commodities, stocks, bonds, precious metals and investment funds. Other options for investing
include certificates of deposit, futures and investment clubs.

All investment options have their inherent risk and benefits. For instance, international investing
is prone to social, political, economic and currency risks, while fixed income investing is prone
to interest risks.

There are various investment options available some of them are:

Mc Savings Bank Account

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Mc Mutual Funds
Mc Life Insurance Policies
Mc Equity Shares

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Mc Inflation is constantly increasing the cost of goods and services and eating into the value of
your income and wealth. You need to save money and invest it well so that the value of every
rupee is augmented.
Mc Higher life-expectancy means people live longer and hence, need more money to maintain
their living standards.
Mc Investing selectively allows you to enjoy tax benefits.
Mc By investing wisely you can improve your standard of living and create wealth for the future

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Mc Past market trends:

Sometimes history repeats itself; sometimes markets learn from their mistakes. You need to
understand how various asset classes have performed in the past before planning your
finances.

Mc Your risk appetite:

The ability to tolerate risk differs from person to person. It depends on factors such as your
financial responsibilities, your environment, your basic personality, etc. Therefore,
understanding your capacity to take on risk becomes a crucial factor in investment decision
making.

Mc Investment horizon:

How long can you keep the money invested? The longer the time-horizon, the greater are the
returns that you should expect. Further, the risk element reduces with time.

Mc Investible surplus:

How much money are you able to keep aside for investments? The investible surplus plays a
vital role in selecting from various asset classes as the minimum investment amounts differ
and so do the risks and returns.

Mc Investment need:

How much money do you need at the time of maturity? This helps you determine the amount
of money you need to invest every month or year to reach the magic figure.

Mc Expected returns:

The expected rate of returns is a crucial factor as it will guide your choice of investment.
Based on your expectations, you can decide whether you want to invest heavily into equities
or debt or balance your portfolio.

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2. MUTUAL FUND
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pDon¶t 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 company¶s
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 total return and
safety of your principal. Every dollar you have invested in a mutual fund has this diversification.

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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 executives 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 institutions and wealthy
individuals. Now it is available to everyone through mutual funds.

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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 broker¶s 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!

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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
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.

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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.

Let¶s 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. Let¶s 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.

Let¶s see how you have done:

Monthly Shares
Price
Investment Purchased

100 10.00 10

100 5.00 20

100 10 10

100 12.50 8

$400 48

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Average share cost - $8.33 ($400 / 48)
Ending share price - $12.50

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 Shares
Price
Investment Purchased

400 10.00 40

$400 40

Average share cost - $10.00 ($400 / 40)

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-cost-averaging.

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 doesn¶t take a lot of brilliance or hard
work - just discipline. You must invest the same amount every month (or every quarter).

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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.

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Many mutual funds are part of a pfamily 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.

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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.

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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 shareholder¶s
bank account.

You can automatically reinvest all dividends and capital gains distributions 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.

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ô. Mutual Funds Industry in India
The origin of mutual fund industry in India is with the introduction of the concept of mutual fund
by UTI in the year 1963. Though the growth was slow, but it accelerated from the year 1987
when non-UTI players entered the industry.

In the past decade, Indian mutual fund industry had seen a dramatic imporvements, both
qualitywise as well as quantitywise. Before, the monopoly of the market had seen an ending
phase, the Assets Under Management (AUM) was Rs. 67bn. The private sector entry to the fund
family rose the AUM to Rs. 470 bn in March 1993 and till April 2004, it reached the height of
1,540 bn.

The mutual fund (MF) industry had witnessed a bullish growth of 11.95% in total asset under
management (AUM) to Rs 6,64,450 crore as on 31 May 2009 from Rs 5,93,516 crore as on 30
April 2009. The Average Asset Under Management (AAUM) of MFs surged 15.94% to Rs
6,39,129.82 crore for the month of May 2009 compared with Rs 5,51,254.22 crore in April 2009.
AAUM of fund of funds.

The main reason of its poor growth is that the mutual fund industry in India is new in the
country. Large sections of Indian investors are yet to be intellectuated with the concept. Hence, it
is the prime responsibility of all mutual fund companies, to market the product correctly abreast
of selling.

The mutual fund industry can be broadly put into four phases according to the development of
the sector. Each phase is briefly described as under.

First Phase 1964-87

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Second Phase 1987-199ô (Entry of Public Sector Funds)

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Third Phase 199ô-200ô (Entry of Private sector Funds)

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4. Types of Mutual Funds

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Open-Ended Schemes:

›c Investor can sell and repurchase its unit at NAV or NAV-related price.

›c Need not to be listed on the stock exchange

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 ›c Investor can enter and exit any time during the life of the fund.

›c No fixed redemption period.

›c It is very liquid.

Close-end Scheme:

›c Fixed maturity period ranging from two to five year.

›c Investor can spend when scheme is launched and scheme remain open for period not
exceeding 45 days.

›c Investor can buy units only from the market, when subscription is over thereafter units
are listed on the stock exchange where they are bought and sold.

Interval Scheme:

It is the combination of open-ended & close-ended scheme. They are open for sale or redemption
during predetermined interval @ NAV-related prices.

Investment Objective Scheme

Growth Fund:

›c Objective is to give capital appreciation from medium term to long term.

›c Investment done mostly in equity shares with significant growth potential & offer high
return to the investor in long term.

›c Risk is high because no guarantee or assurance of return.

›c It is usually close ended and listed on stock exchange.

Income Fund

›c Aim to provide safety of investments & regular income to investor.

›c Instrument is used for investment purpose are gilt scheme, commercial papers,
debentures, bonds.

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 ›c Risk and return is low in income fund as compare to growth fund.

Balanced Fund

It provides capital appreciation and regular income as the investment in balanced in equity and
debt instrument.

Money Market Funds

›c Investment is done in the short term money market instruments like T-bills and
Certificate of deposits.

›c Highly liquid with low rate of return.

›c Corporate invest in these funds to park their short term surplus funds.

Other

Load Fund

Schemes which charge s load i.e. brokerage exp, communication exp.

Index Funds

It replicated the portfolio of a particular index such as BSE & NSE Sensex.

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5. Mutual Fund Operation Flow Chart

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6. Organizational Structure Of Mutual Fund
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7. CATEGORIES OF MUTUAL FUND:

Mutual funds can be classified as follow:

Based on their structure:

Open-ended funds: Investors can buy and sell the units from the fund, at any point of time.

Close-ended funds: These funds raise money from investors only once. Therefore, after the offer
period, fresh investments can not be made into the fund. If the fund is listed on a stocks exchange

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the units can be traded like stocks (E.g., Morgan Stanley Growth Fund). Recently, most of the
New Fund Offers of close-ended funds provided liquidity window on a periodic basis such as
monthly or weekly. Redemption of units can be made during specified intervals. Therefore, such
funds have relatively low liquidity.

Based on their investment objective:

Equity funds: These funds invest in equities and equity related instruments. With fluctuating
share prices, such funds show volatile performance, even losses. However, short term
fluctuations in the market, generally smoothens out in the long term, thereby offering higher
returns at relatively lower volatility. At the same time, such funds can yield great capital
appreciation as, historically, equities have outperformed all asset classes in the long term. Hence,
investment in equity funds should be considered for a period of at least 3-5 years. It can be
further classified as:

i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is tracked. Their
portfolio mirrors the benchmark index both in terms of composition and individual stock
weightages.

ii) Equity diversified funds- 100% of the capital is invested in equities spreading across different
sectors and stocks.

iii) Dividend yield funds- it is similar to the equity diversified funds except that they invest in
companies offering high dividend yields.

iv) Thematic funds- Invest 100% of the assets in sectors which are related through some theme.
e.g. -An infrastructure fund invests in power, construction, cements sectors etc.

v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking sector fund will
invest in banking stocks.

vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.

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Balanced fund: Their investment portfolio includes both debt and equity. As a result, on the risk-
return ladder, they fall between equity and debt funds. Balanced funds are the ideal mutual funds
vehicle for investors who prefer spreading their risk across various instruments. Following are
balanced funds classes:

i) Debt-oriented funds -Investment below 65% in equities.

ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt.

Debt fund: They invest only in debt instruments, and are a good option for investors averse to
idea of taking risk associated with equities. Therefore, they invest exclusively in fixed-income
instruments like bonds, debentures, Government of India securities; and money market
instruments such as certificates of deposit (CD), commercial paper (CP) and call money. Put
your money into any of these debt funds depending on your investment horizon and needs.

i) Liquid funds- These funds invest 100% in money market instruments, a large portion being
invested in call money market.

ii) Gilt funds ST- They invest 100% of their portfolio in government securities of and T-bills.

iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt instruments
which have variable coupon rate.

iv) Arbitrage fund- They generate income through arbitrage opportunities due to mis-pricing
between cash market and derivatives market. Funds are allocated to equities, derivatives and
money markets. Higher proportion (around 75%) is put in money markets, in the absence of
arbitrage opportunities.

v) Gilt funds LT- They invest 100% of their portfolio in long-term government securities.

vi) Income funds LT- Typically, such funds invest a major portion of the portfolio in long-term
debt papers.

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vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an exposure of
10%-30% to equities.

viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in line with that of the
fund.

INVESTMENT STRATEGIES

1. Systematic Investment Plan: under this a fixed sum is invested each month on a fixed date of a
month. Payment is made through post dated cheques or direct debit facilities. The investor gets
fewer units when the NAV is high and more units when the NAV is low. This is called as the
benefit of Rupee Cost Averaging (RCA)

2. Systematic Transfer Plan: under this an investor invest in debt oriented fund and give
instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of the same mutual
fund.

3. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund then he can
withdraw a fixed amount each month.

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The investments of these schemes will predominantly be in the stock markets and endeavor will
be to provide investors the opportunity to benefit from the higher returns which stock markets
can provide. However they are also exposed to the volatility and attendant risks of stock markets
and hence should be chosen only by such investors who have high risk taking capacities and are
willing to think long term. Equity Funds include diversified Equity Funds, Sectoral Funds and
Index Funds. Diversified Equity Funds invest in various stocks across different sectors while
sectoral funds which are specialized Equity Funds restrict their investments only to shares of a
particular sector and hence, are riskier than Diversified Equity Funds. Index Funds invest
passively only in the stocks of a particular index and the performance of such funds move with
the movements of the index.

Debt schemes

Debt Funds invest only in debt instruments such as Corporate Bonds, Government Securities and
Money Market instruments either completely avoiding any investments in the stock markets as in
Income Funds or Gilt Funds or having a small exposure to equities as in Monthly Income Plans

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or Children's Plan. Hence they are safer than equity funds. At the same time the expected returns
from debt funds would be lower. Such investments are advisable for the risk-averse investor and
as a part of the investment portfolio for other investors.

BALANCED SCHEMES

Magnum Balanced Fund invests in a mix of equity and debt investments. Hence they are less
risky than equity funds, but at the same time provide commensurately lower returns. They
provide a good investment opportunity to investors who do not wish to be completely exposed to
equity markets, but is looking for higher returns than those provided by debt funds.

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.

pBrand´ 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 Dehradoon 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
Brand. Reliance, UTI, SBIMF, ICICI Prudential etc. they are well known Brand, they are
performing well and their Assets Under Management is larger than others whose Brand name are
not well known like Principle, Sunderam, etc.

Distribution channels are also important for the investment in mutual fund. 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.

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8. SWOT Analysis of Mutual Fund
Strength :

SEBI/AMFI have taken an Active role in protecting investor interests through Regulations,
Certifications, Code of Conduct.

Open Product Architecture i.e. Distributors offer a range Of Mutual Fund products to choose
from it.

Has often acted as a Counterbalance to equity Market volatility, market Liquidity.

Weakness :

Limited Channels of Distribution i.e. Banks and Agents account for more than70% of
distribution of Mutual Funds- e-channels have not Evolved as a source for Acquiring customers

Lack of adequate effort on The part of Wealth Managers/distributors in Educating the market
about Mutual Products has resulted In low levels of penetration

Absence of such global Product policy on Overseas Mutual Fund products to be Offered in the
Indian Market

Shortage of skilled and Competent Financial Advisors

Opportunity :

Mutual Fund Investment as a% of Household Savings Invested in Financial Assets Less than 1%

Robust performance of Indian Capital Markets vis-à-vis Their counterparts abroad

HNWI/Mass affluent growing At a CAGR of 22%.Estimated that there are15.4 million Indian
household

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Proportion of New Money Increasing as a result of Economic growth. Investors Are taking a
more active part

In their financial affairs

Resident individuals Permitted to invest upto$25,000 in asset abroad. Attractive for overseas
Mutual Funds

Mutual Funds in India Permitted to invest upto10%Of their net assets abroad in Foreign
securities subject to a

Maximum of $50 Million

Threats :

Large number of substitutes Available to the Indian investor-Deposits, equities, Real estate

In India low risk Investment products like PPFOffer higher returns

Investments abroad will need To be closely tracked to ensure That the source of funds is
Legitimate and to protect Against Money Laundering-Onus on Banks to ensure the Same

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 9. SWOT ANALYSIS OF HDFC MUTUAL FUND &
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Strength:

c Good brand name of the company in all over india.

c Flexible products
c Expertise in the field of mutual fund
c Sound financial resources of the company as well as sponsors.
c Strong communication network all over the country.

Weakness:

c Less awareness regarding mutual fund among investors

c Yet to build strong distribution network
c Cannot tap rural market

Opportunities:

c Untapped rural market

c Lack of competitive products to suit clients¶ investment objective

Threat:

c The numbers of players are increasing which further increases the competition.
c Product innovation is done by other asset management companies and are able to collect
large amounts.
c Customer mindsets are still rigid and they mostly prefer traditional pattern of investments.

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Strength:

c Reliance mutual fund ± a part of the Anil Dhirubhai Ambani Group(ADAG) is one of the
fastest growing mutual fund company in the country
c Reliance mutual fund offers investors a well-rounded portfolio of products to meet
varying investor requirements
c Reliance mutual fund has a presence over 118 cities across the contry
c It has an investor base of 2 million and manages assets over Rs.88388 as on April 30
2009 (source www.amfiindia.com)
c Strong and consistent fund management team
c Investor friendly personal and technological support
c Brand name- Reliance mutual fund is a brand name among customers
c Good image between customers

Weaknesses:

c Less existence in rural areas

c Less expenditure on promotional schemes

Opportunities:

c First company to launch equity fund with hedging feature which aim to minimize risk
c Good perception among customers

Threat:

c Lot of competitors in market

c Mutual fund doesn¶t guarantee or assure dividend/ bonus

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FLEXINDEX PLAN

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It empowers you to automatically transfer your investments from select Debt/Liquid Schemes to
select equity Schemes of HDFC Mutual Fund at closing BSE SENSEX levels of your choice.

Ec pEquities are probably the only asset class where investors are comfortable
buying at a higher price and vice-a-versa´ ± Warren Buffet
Ec pBe fearful when others are greedy and greedy when others are fearful´ ± Warren
Buffet
Ec Investors find it very difficult to invest due to various reasons when markets fall
and thereby are unable to benefit from high returns of equities
Ec HDFC FLEXINDEX PLAN offers investors a tool to plan their investments. The
Plan prevents investors from the indecision of investing or not investing in
bear/volatile market conditions

How does HDFC FLEXINDEX PLAN work?

Investors can invest in HDFC Mutual Fund¶s select Debt/Liquid Schemes and choose four BSE
SENSEX levels of their choice to transfer amounts to HDFC Mutual Fund range of select equity
Schemes

Illustration
Source
HDFC Liquid Fund
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Investment
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Amount

Target
HDFC Top 200 Fund Options
Scheme

Four BSE SENSEX levels* Flexible Fixed

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Ec Invest at a targeted level and do not miss out on an opportunity; it enables

automatic decision making at levels with which you are comfortable.
Ec Investments are into select equity schemes with long term track record
Ec Initial investment in Liquid/Debt Schemes help you to earn income till
investments are transferred to equity funds .
Ec Take advantage of the market movements without the hassle of constant tracking
Ec

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 Source Scheme Target Schemes

HDFC Cash Management

Fund ± Call Plan, Savings Plan and Treasury HDFC Growth Fund
Advantage Plan

HDFC Liquid Fund HDFC Equity Fund

HDFC Liquid Fund ± Premium Plan HDFC Top 200 Fund

HDFC Floating Rate Income HDFC Capital Builder

Fund ± Short Term Plan Fund

HDFC Index Fund

HDFC Core & Satellite

Fund

HDFC Premier Multicap

Fund

HDFC Prudence Fund

HDFC Balanced Fund

Minimum registration amount in Source Scheme: Rs. 50,000 and in multiples of Rs. 1,000
thereafter.

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 11. Reliance Mutual Fund Has SECTOR Specific
Schemes Which HDFC Doesn¶t have?

The SECTOR SPECIFIC FUNDS OF RELIANCE ARE:

1.cReliance Banking Fund

2.cReliance Diversification Power Sector Fund

3.cReliance Pharma Fund

4.cReliance Media & Entertainment Fund.

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The primary investment objective of the Scheme is to generate consistent returns by investing in
equity / equity related or fixed income securities of Pharma and other associated companies.

Asset (Rs crore) 114.36 ( June 30, 2009)

Dividend (%) 15.00 ( March 19, 2008)

NAV returns

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1ô. Future Outlook

The Indian Mutual Fund Industry is one of the fastest growing sectors in the Indian
capital and financial markets with 38 Asset Management Companies currently
operating in the country (as on 31st March 2009). Over the last few years, the
Mutual Fund industry has grown at a remarkable pace of 30 per cent CAGR per
annum.

The Total Average Industry Asset under Management (AUM) is 6, 89,946.10

crore as on July 2009. (Source ± AMFI).The Mutual Fund Industry in India has
seen dramatic improvements in quantity as well as quality of product and service
offerings in recent years.

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In terms of percentage, Baroda Pioneer MF, Taurus MF, JPMorgan MF, Edelweiss
MF and DBS Chola MF witnessed maximum surge in AUM. Their holding saw
30-85% increment on MoM basis.

In terms of value, Reliance MF assets stood at Rs 1,02,730 crore, up 16% versus

Rs 88,388 crore in the month of April. Other AMCs that saw significant rise in
AUM included HDFC MF, ICICI Prudential MF, UTI MF and Kotak Mahindra
MF.

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 Apr-09 May-09 Change
MF
(Rs cr) (Rs cr) (Rs cr)
Reliance MF 88,388 102,730 14,342
HDFC MF 63,881 75,406 11,525
ICICI Prudential
MF 56,049 65,550 9,501
UTI MF 54,490 63,438 8,948
Kotak Mahindra
MF 21,648 28,338 6,690
Birla Sun Life
MF 51,829 56,586 4,757
IDFC MF 16,028 20,139 4,111
SBI MF 30,875 34,441 3,566
Franklin
Templeton MF 20,634 23,618 2,984
LIC MF 26,115 28,599 2,483

According to KPMG India¶s recent released in June 2009 industry AUM is likely
to continue to grow in the range of 15 to 25 per cent from the period 2010 to 2015
based on the pace of economic growth. In the event of quick revival and positive
reinforcement of growth drivers identified, KPMG in India is of the view that the
iIndian Mutual Fund Industry may grow in the range of 15 to 18 per cent in the
period from 2010 to 2015, resulting in AUM of Rs 15 lakh to 17 lakh crores in
2015.

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 BIBLIOGRAPHY

www.moneyoutlookindia.com

www.dictionaryreference.com

www.economictimes.com

www.moneycontrol.com

www.amfindia.com

www.onlineresearchonline.com

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