ON Detail Study of HDFC Mutual Fund Submitted in partial fulfilfilment for the Award of degree of Master of Business Administration
Submitted By:- Submitted To: Amit Daa MBA !ed year Asstt" Prof" GOVERME! EG"EER"G CO##EGE $HA#A%AR
DEC#ARA!"O
# do $ereby dec%are t$at t$e project entit%ed &DE!A"# S!'D( OF HDFC) M'!'A# F'D* submitted as a part of t$e re&uirement for t$e partia% fu%fi%%ment of Master of Business Administration at 'O(T" )N''" *O++)'), -.A+A/AR is an oriina% piece of 0or1 done by me under t$e uidance of Mr .imans$u (yas Mr D$eeraj At .D2* Mutua% 2und ,3OTA $as not been submitted for a0ard of any deree e%se 0$ere in part or fu%%" CER!"F"CA!E OF !HE G'"DE
A+,nowledgement # e4press my sincere t$an1s to my project uide, Mr- Himan.hu Vya. Desination/ Deptt" Finan+e/ for uidin me ri$t form t$e inception ti%% t$e successfu% comp%etion of t$e project" # sincere%y ac1no0%ede $er for e4tendin t$eir 5a%uab%e uidance, support for %iterature, critica% re5ie0s of project and t$e report and abo5e a%% t$e mora% support $e $ad pro5ided to me 0it$ a%% staes of t$is project" # 0ou%d a%so %i1e to t$an1 t$e supportin staff Finan+e 0 H-R- Deportment, for t$eir $e%p and cooperation t$rou$out out project" CHA1!ER !O1"C 1AGE O 2 "!ROD'C!"O 6" M7T7A+ 27ND S)T7P !" NA( 8" S*OP) 9" B)N)2#TS O2 M7T7A+ 27ND :" *AP#TA+ 'A#N ;" #N()STM)NT *R#T)R#A 3 4 O5$EC!"VE OF !HE S!'D( 23 6 A5O'! HDFC M'!'A# F'D 6" /.< .D2* M7T7A+ 27ND !" SPONSORS 8" TR7ST)) 9" AM* D#R)*TORS :" A/ARDS 27 8 1ROD'C! 0SERV"CE 6" T<P)S O2 M7T7A+ 27ND !" #N()STM)NT P+AN 8" PROD7*T O2 M7T7A+ 27ND 46 9 1AR! OF M( S'MMER !RA""G 8: 3 ME!HODO#OG( OF !HE S!'D( 6" R)S)AR*. M)T.ODO+O'< !" .<POT.)S#S SO7R*)S O2 DATA *O++)*T#ON 8" O2 T.) ST7D< 9" DATA *O++)*T#ON = ANA+<S#S 9; : <'ES!"OARE 36 7 F"D"G/ RECOMMEDA!"O/ 3: COC#'S"O = 5"5#"OGRA1H( :4 CHA1!ER 2 > "!ROD'C!"O 6" M7T7A+ 27ND S)T7P !" NA( 8" S*OP) 9" B)N)2#TS O2 M7T7A+ 27ND :" *AP#TA+ 'A#N ;" #N()STM)NT *R#T)R#A "!ROD'C!"O T$e fi nancia% mar1et p%ays a cruci a% ro%e in t$e in t$e economic de5e% opment of a country by faci%i tati n t$e a% %ocation of scarce resources" 2i nancia% mar1ets essentia%% y in5o%5e t$e a%%ocation of resources" T$is can be t$ou$t of as t$e brai n of t$e enti re economi c system, t$e %ocus of centra% decisi on-ma1in> if t$ey fai%, not on% y 0i %% t$e sectors profit be %o0er t$an 0ou% d ot$er0ise $a5e been, but t$e performance of t$e entire economic system may be impaired" T$e effi ciency of fi nancia% mar1et $o0 e5er, depends on t$e e4istence of acti 5e and efficient financia% intermediaries in t$e system" Deposit ta1i n institutiona% in5estor is t$e important financia% intermediaries in5o% 5ed in t$e tas1 of a%%ocatin assets" Structura% c$anes in t$e financia% mar1et $a5e induced a re5erse trend in financia% intermediati on, i"e" fi nancia% disintermediati on, in 0$i c$ t$e centra% ro%e of ban1in is bein ta1en o5er by in5estment insti tuti ons and institutiona% in5estors" T$e s$ift from a credit-based system to a financia% $as ini ti ated t$e process of di sintermediation, and capi ta% mar1et based factors %i 1e insurance, pension funds and mutua% funds are increasin% y p% ayin t$e centra% ro%e" T$e reforms $a5e successfu% % y di smant%ed t$e entry barri ers, 0i t$ t$e resu% t t$at today t$ere are domestic and forein financia% institutions, %i 1e mutua% funds, bro1i n fi rms and insurance companies, operatin in t$e #ndian mar1et" T$e introduction of capi ta% ade&uacy norms, prudentia% reu%ation and 0or%d c%ass reu%atory mec$anisms to protect t$e interest of in5estor, besides t$e strict re&ui rement of di sc%osure, $a5e i 5en a boost to t$e confidence of domesti c and forein in5estors" T$e #ndian economy $as s% o0% y interated i tse%f 0i t$ t$e %oba% economy and financia% mar1et" %hat i. a Mutual Fund? Mutua% fund is a mec$anism for poo%in t$e resources by issuin units to t$e in5estors and in5estin funds in securities in accordance 0it$ objecti5es as disc%osed in offer document" #n5estments in securities are spread across a 0ide cross-section of industries and sectors and t$us t$e ris1 is reduced" Di5ersification reduces t$e ris1 because a%% stoc1s may not mo5e in t$e same direction in t$e same proportion at t$e same time" Mutua% fund issues units to t$e in5estors in accordance 0it$ &uantum of money in5ested by t$em" #n5estors of mutua% funds are 1no0n as unit $o%ders" T$e profits or %osses are s$ared by t$e in5estors in proportion to t$eir in5estments" T$e mutua% funds norma%%y come out 0it$ a number of sc$emes 0it$ different in5estment objecti5es 0$ic$ are %aunc$ed from time to time" A mutua% fund is re&uired to be reistered 0it$ Securities and )4c$ane Board of #ndia ?S)B#@ 0$ic$ reu%ates securities mar1ets before it can co%%ect funds from t$e pub%ic" 2-2 ) How i. a mutual fund .et up? A mutua% fund is set up in t$e form of a trust, 0$ic$ $as sponsor, trustees, asset Manaement *ompany ?AM*@ and custodian" T$e trust is estab%is$ed by a sponsor or more t$an one sponsor 0$o is %i1e promoter of a company" T$e trustees of t$e mutua% fund $o%d its property for t$e benefit of t$e unit $o%ders" Asset Manaement *ompany ?AM*@ appro5ed by S)B# manaes t$e funds by ma1in in5estments in 5arious types of securities" *ustodian, 0$o is reistered 0it$ S)B#, $o%ds t$e securities of 5arious sc$emes of t$e fund in its custody" T$e trustees are 5ested 0it$ t$e enera% po0er of superintendence and direction o5er AM*" T$ey monitor t$e performance and comp%iance of S)B# Reu%ations by t$e mutua% fund" S)B# Reu%ations re&uire t$at at %east t0o t$irds of t$e directors of trustee company or board of trustees must be independent i"e" t$ey s$ou%d not be associated 0it$ t$e sponsors" A%so, :AB of t$e directors of AM* must be independent" A%% mutua% funds are re&uired to be reistered 0it$ S)B# before t$ey %aunc$ any sc$eme" .o0e5er, 7nit Trust of #ndia ?7T#@ is not reistered 0it$ S)B# ?as on -anuary 6:, !AA!@" 2-4 ) %hat i. et A..et Value @AVA of a .+heme? T$e performance of a particu%ar sc$eme of a mutua% fund is denoted by Net Asset (a%ue ?NA(@" Mutua% funds in5est t$e money co%%ected from t$e in5estors in securities mar1ets" #n simp%e 0ords, Net Asset (a%ue is t$e mar1et 5a%ue of t$e securities $e%d by t$e sc$eme" Since mar1et 5a%ue of securities c$anes e5ery day, NA( of a sc$eme a%so 5aries on day to day basis" T$e NA( per unit is t$e mar1et 5a%ue of securities of a sc$eme di5ided by t$e tota% number of units of t$e sc$eme on any particu%ar date" 2or e4amp%e, if t$e mar1et 5a%ue of securities of a mutua% fund sc$eme is Rs !AA %a1$s and t$e mutua% fund $as issued 6A %a1$s units of Rs" 6A eac$ to t$e in5estors, t$en t$e NA( per unit of t$e fund is Rs"!A" NA( is re&uired to be disc%osed by t$e mutua% funds on a reu%ar basis - dai%y or 0ee1%y - dependin on t$e type of sc$eme" 2-6 ) S+ope for DeBelopment of Mutual Fund A Mutua% 2und is t$e most suitab%e in5estment for t$e common man as it offers an opportunity to in5est in a di5ersified, professiona%%y manaed bas1et of securities at a re%ati5e%y %o0 cost" #ndia $as a bureonin popu%ation of midd%e c%ass no0 estimated around 8AA mi%%ion" A typica% #ndian midd%e c%ass fami%y can $a5e %i&uid sa5ins ranin from Rs"! to Rs"6A +acs today" #n5estments in Ban1s are %i&uid and safe, but 0it$ t$e fa%%in rate of interest offered by Ban1s on Deposits, it is no %oner attracti5e" At best a part can be sa5ed in ban1 deposits, but 0$at is t$e ot$er sources of in5estment for t$e common manC Mutua% 2und is t$e ready ans0er" (ie0ed in t$is sense %oba%%y #ndia is one of t$e best mar1ets for Mutua% 2und Business, so a%so for #nsurance business" T$is is t$e reason t$at forein companies compete 0it$ one anot$er in settin up insurance and mutua% fund business units in #ndia" T$e s$eer manitude of t$e popu%ation of educated 0$ite co%%ar emp%oyees pro5ides un%imited scope for de5e%opment of Mutua% 2und Business in #ndia" 2-8- ) 5enefit. of Mutual Fund.
T$ere are numerous benefits of in5estin in mutua% funds and one of t$e 1ey reasons for its p$enomena% success in t$e de5e%oped mar1ets %i1e 7S and 73 is t$e rane of benefits t$ey offer, 0$ic$ are unmatc$ed by most ot$er in5estment a5enues" /e $a5e e4p%ained t$e 1ey benefits in t$is section" T$e benefits $a5e been broad%y sp%it into uni5ersa% benefits, app%icab%e to a%% sc$emes, and benefits app%icab%e specifica%%y to open-ended sc$emes" 2- 1rofe..ional Management T$e in5estor a5ai%s of t$e ser5ices of e4perienced and s1i%%ed professiona%s 0$o are bac1ed by a dedicated in5estment researc$ team 0$ic$ ana%yses t$e performance and prospects of companies and se%ects suitab%e in5estments to ac$ie5e t$e objecti5es of t$e sc$eme"
4- DiBer.ifi+ation Mutua% 2unds in5est in a number of companies across a broad cross-section of industries and sectors" T$is di5ersification reduces t$e ris1 because se%dom do a%% stoc1s dec%ine at t$e same time and in t$e same proportion" <ou ac$ie5e t$is di5ersification t$rou$ a Mutua% 2und 0it$ far %ess money t$an you can do on your o0n" 8" ConBenientAdmini.tration #n5estin n in a Mutua% 2und reduces paper0or1 and $e%ps you a5oid many prob%ems suc$ as bad de%i5eries, de%ayed payments and unnecessary fo%%o0 up 0it$ bro1ers and companies" Mutua% 2unds sa5e your time and ma1e in5estin easy and con5enient" 8- Return 1otential O5er a medium to %on-term, Mutua% 2unds $a5e t$e potentia% to pro5ide a $i$er return as t$ey in5est in a di5ersified bas1et of se%ected securities" 9- #ow Co.t. Mutua% 2unds are a re%ati5e%y %ess e4pensi5e 0ay to in5est compared to direct%y in5estin in t$e capita% mar1ets because t$e benefits of sca%e in bro1erae, custodia% and ot$er fees trans%ate into %o0er costs for in5estors" 3- #iCuidity #n open-ended sc$emes, you can et your money bac1 prompt%y at net asset 5a%ue re%ated prices from t$e Mutua% 2und itse%f" /it$ c%ose-ended sc$emes, you can se%% your units on a stoc1 e4c$ane at t$e pre5ai%in mar1et price or a5ai% of t$e faci%ity of direct repurc$ase at NA( re%ated prices 0$ic$ some c%ose-ended and inter5a% sc$emes offer you periodica%%y" :- !ran.paren+y <ou et reu%ar information on t$e 5a%ue of your in5estment in addition to disc%osure on t$e specific in5estments made by your sc$eme, t$e proportion in5ested in eac$ c%ass of assets and t$e fund manaerDs in5estment stratey and out%oo1" 7- FleDibility T$rou$ features suc$ as reu%ar in5estment p%ans, reu%ar 0it$dra0a% p%ans and di5idend rein5estment p%ans, you can systematica%%y in5est or 0it$dra0 funds accordin to your needs and con5enience" =- Choi+e of S+heme. Mutua% 2unds offer a fami%y of sc$emes to suit your 5aryin needs o5er a %ifetime" 2;- %ell Regulated A%% Mutua% 2unds are reistered 0it$ S)B# and t$ey function 0it$in t$e pro5isions of strict reu%ations desined to protect t$e interests of in5estors" T$e operations of Mutua% 2unds are reu%ar%y monitored by S)B#" 22- 'nder.tanding and Managing Ri., A%% in5estments 0$et$er in s$ares, debentures or deposits in5o%5e ris1: s$are 5a%ue may o do0n dependin upon t$e performance of t$e company, t$e industry, state of capita% mar1et and t$e economy> enera%%y, $o0e5er %oner t$e term, %esser t$e ris1> companies may defau%t in payment of interestEprincipa% on t$eir depositsEbonds debentures> t$e rate of interest on in5estment may fa%% s$ort of t$e rate of inf%ation reducin t$e purc$asin po0er" /$i%e ris1 cannot be e%iminated, s1i%%fu% manaement can minimiFe ris1" Mutua% fund $e%ps to reduce ris1 t$rou$ di5ersification and professiona% manaement" T$e e4perience and e4pertise of Mutua% 2und manaers in se%ectin fundamenta%%y sound securities and timin t$eir purc$ases and sa%es $e%p t$em to bui%d a di5ersified portfo%io t$at minimiFe ris1 and ma4imiFes returns" 6!" !aD 5enefit. T$e incomes under Mutua% 2unds are muc$ more Ta4 efficient t$an any fi4ed income security due to t$e fo%%o0in benefits:- Section GA+ of t$e income Ta4 Act ,6H;6 enab%es ta4 free income up to rs 6:AAA and di5idends from M2 s are e%iib%e for t$is benefit" /$en you in5est for o5er a year, t$e ta4 payab%e on encas$ment is +on term *apita%s ains ta4 at !AB" Once a%so et an inde4ation benefit 0$ic$ $as been appro4imate%y GB per year" T$is reduces t$e ta4ab%e income and t$us decreases t$e ta4 %iabi%ity" T$ere is a%so an opportunity to set off capita% %osses aainst ains from income sc$emes" 2u%% e4emption from capita% ains ta4 as it comes under Section :9)AE)B of t$e income ta4 Act" One $as to pay ta4 on%y 0$en $e encas$ units, but $a5e to pay ta4 on t$e interest earned on ot$er debt instruments e5ery year on an accrua% basis, e5en t$ou$ $e recei5es t$e interest %ater" T$is enerates $i$er post ta4 returns compared to ot$er debt instruments" Ta4 is just %i1e a monster t$at fri$tens a number of indi5idua%s t$rou$ out t$e nation" T$ere are just to0 0ay to fi$t 0it$ t$is monater: - *oncea%EDepress #ncome - Ma1e ta4 efficient in5estments" Per$aps t$e second option is far better t$an t$e first as it i5es t$e peace of mind toet$er 0it$ a fee%in t$at one is a responsib%e citiFen of t$e nation" /it$ increasin amount of a0areness t$at is ta1in birt$ in t$e minds of in5estors, mutua% fund $as become cynosure of t$e eye of t$e se5era% in5estors" T$e ta4es a5ai%ab%e are t0o 1inds: - To t$e mutua% fund- as e4p%ained be%o0 in No 6 - To t$e #n5estor- as e4p%ained be%o0 in No ! 2- Mutual Fund !aDation - Mutua% fund is fu%%y e4empted from t$e ta4 under Section6A ?!8D@ of t$e #ncome Ta4 Act6H;6" - #t recei5es a%% income 0it$out deduction at source" - Mutua% funds do not $a5e to pay ta4 on tradin profit, s$ort term capita% ain, di5idend income, under0ritin commission, p%acement fees, %on term capita% ains, ot$er income, etc" 4- 5enefit. to the "nBe.tor. T$ere are number of benefits t$at t$e in5estor of a mutua% fund a5ai%" T$ese are discussed as fo%%o0s: -Resident 7nit .o%ders- #n case of an indi5idua% or .indu 7ndi5ided 2ami%ies ?.72Is@, income by 0ay of di5idends, if any from unit of sc$emes of t$e fund toet$er 0it$ ot$er income on specified in5estmentEdeposit are e4cept from ta4 0it$in t$e o5era%% %imit of Rs"6:AAAE- specified under SectionGA+ of t$e #"T" Act,6H;6" Since di5idends from s$ares no %oner in5ite di5idend ta4 and $ence t$e 0$o%e %imit is a5ai%ab%e for mutua% fund di5idends" - Ta4 deduction at source- as per Section6H;A of t$e #ncome Ta4 Act, 6H;6, no deduction of ta4 at source is made from any income payab%e to t$e unit $o%ders" T$is imp%ies t$at t$ere is no ta4 deduction at source for redemption up to any %imit" As per Section6H91 of t$e #"T"Act 6H;6, deduction of ta4 at source is not made if t$e di5idend income from a mutua% fund does not e4ceed Rs6AAAA per annum" 2-9 ) "nBe.tment +riteria #ower +o.t #t is a %o0er cost of in5estment as compare to ot$er mode of in5estment option in t$e mar1et" .ere t$e in5estor can in5est a minimum of Rs:AA in t$e sc$eme of )+SS ?)&uity +in1 Sa5in Sc$eme@" #e.. paper wor, .ere %ess paper 0or1 is re&uire t$an ot$er" T$e in5estor i5e $is detai% information %i1e $isE$er name,ae,address,p$one no", pan card no, nominee name and address?in case of minor@ and t$ree fu%% sinature of t$e candided" o +a.h !ran.a+tion. #n5estor need not re&uire payin cas$, instead of cas$ in5estor $as to pay c$e&ue or demand draft" /$ic$ $e%p to pre5ent misappropriation and a%so sa5e t$e ta4" .ere t$e in5estor just 0rites t$e product name of mutua% fund and sin on it" #t a%so sa5es t$e time" o Age 5ar T$ere is no ae bar of in5estor $ere any ae roup can in5est in mutua% fund" #n case of minor?be%o0 6G year@ t$ere is a nominee, so a c$i%d can in5est t$rou$ $is uardian and a person $a5in ae of JA a%so in5est in mutua% fund ,0$ic$ is not possib%e in ot$er in5estments" SerBi+e or any ,ind of in+ome group A ser5ice $o%der or any 1ind of income roup or a student or unemp%oyed peop%e can in5est in mutua% fund but t$e person is a rationa% $uman bein $a5in sound 1no0%ede of in5estment company"
*.APT)R ! O5$EC!"VE OF !HE S!'D( O5$EC!"VE OF !HE S!'D( #ndian financia% system $as been e4pirin t$e 5ast effect of %oba%iFation i"e" drastic interest rate cut, po%itica% disturbances, security scam etc $a5e scattered t$e common in5estorIs perception in se%ectin 5arious in5estment portfo%io" Most of t$e security $o%ders $a5e %ost t$eir confidence in ne0%y come-up corporate sectors for in5estment" +oo1in to t$e situation, it is &uite encourain to ana%yFe $o0 t$e .D2* Mutua% 2und ab%e to trap t$e deposits by introducin 5arious sc$emes and $o0 it protects t$e interest of t$e in5estors" T$e main study is based on t$e performance and ana%ysis of 5arious sc$emes 0it$ reference to .D2* Mutua% 2und t$at is a %eadin mutua% fund industry in #ndia" T$e tota% performance ana%ysis of financia% instruments 0it$ reference to t$e .D2* Mutua% 2und $as ot objecti5es" T$is are as fo%%o0s:- To 1no0 t$e performance of t$e different sc$emes" T$e comparati5e study of .D2* Mutua% 2und 0it$ ot$er mutua% funds" To 1no0 t$e in5estment pattern of t$e in5estors in different sc$emes" T$e benefits made from t$e in5estment on t$e different sc$emes" To 1no0 t$e ran1in of t$e .D2* Mutua% 2und Sc$emes" To 1no0 t$e di5ersify portfo%io of .D2* Mutua% 2und" To 1no0 t$e ser5ice 0$ic$ .D2* Mutua% 2und is pro5idin to its in5estors 0it$ compare to ot$er mutua% funds"
*.APT)R 8 A5O'! HDFC EM'!'A# F'D 6" /.< .D2* M7T7A+ 27ND !" SPONSORS 8" TR7ST)) 9" A/ARDS 6-2 ) %hy HDFC Mutual Fund? .D2* Mutua% 2und is one of t$e %arest mutua% funds and 0e%%-estab%is$ed fund $ouse in t$e country 0it$ consistent and abo5e a5erae fund performance across cateories since its incorporation on December 6A, 6HHH" /$i%e our past e4perience does ma1e us a 5eteran, but 0$en it comes to in5estments, 0e $a5e ne5er be%ie5ed t$at t$e e4perience is enou$" Our "nBe.tment 1hilo.ophy T$e sin%e most important factor t$at dri5es .D2* Mutua% 2und is its be%ief to i5e t$e in5estor t$e c$ance to profitab%y in5est in t$e financia% mar1et, 0it$out constant%y 0orryin about t$e mar1et s0ins" To rea%iFe t$is be%ief, .D2* Mutua% 2und $as set up t$e infrastructure re&uired to conduct a%% t$e fundamenta% researc$ and bac1 it up 0it$ effecti5e ana%ysis" Our stron emp$asis on manain and contro%%in portfo%io ris1 a5oids c$asin t$e %atest fadsK and trends" %e Offer /e be%ie5e, t$at, by i5in t$e in5estor %on-term benefits, 0e $a5e to constant%y re5ie0 t$e mar1ets for ne0 trends, to identify ne0 ro0t$ sectors and s$are t$is 1no0%ede 0it$ our in5estors in t$e form of product offerins" /e $a5e come up 0it$ 5arious products across asset and ris1 cateories to enab%e in5estors to in5est in %ine 0it$ t$eir in5estment objecti5es and ris1 ta1in capacity" Besides, 0e a%so offer Portfo%io Manaement Ser5ices" Our A+hieBement. .D2* Asset Manaement *ompany ?AM*@ is t$e first AM* in #ndia to $a5e been assined t$e L*R#S#+ 2und .ouse +e5e% M 6I ratin" T$is is its $i$est 2und 'o5ernance and Process Nua%ity Ratin 0$ic$ ref%ects t$e $i$est o5ernance %e5e%s and fund manaement practices at .D2* AM* #t is t$e on%y fund $ouse to $a5e been assined t$is ratin for t0o years in succession" O5er t$e past, 0e $a5e 0on a number of a0ards and acco%ades for our performance 6-4 ) S1OSORS Hou.ing DeBelopment Finan+e Corporation #imited @HDFCA- .D2* 0as incorporated in 6HJJ as t$e first specia%iFed Mortae *ompany in #ndia" .D2* pro5ides financia% assistance to indi5idua%s, corporate and de5e%opers for t$e purc$ase or construction of residentia% $ousin" #t a%so pro5ides property re%ated ser5ices ?e"" property identification, sa%es ser5ices and 5a%uation@, trainin and consu%tancy" Of t$ese acti5ities, $ousin finance remains t$e dominant acti5ity" .D2* $as a c%ient base of around 6! %ac borro0ers, around G %ac depositors, o5er 6"AG %ac s$are$o%ders and :A,AAA deposit aents, as at Marc$ 86, !AAG" .D2* $as raised funds from internationa% aencies suc$ as t$e /or%d Ban1, #2* ?/as$inton@, 7SA#D, D)', ADB and 3f/, internationa% syndicated %oans, domestic term %oans from ban1s and insurance companies, bonds and deposits" .D2* $as recei5ed t$e $i$est ratin for its bonds and deposits proram for t$e t$irteent$ year in succession" .D2* Standard +ife #nsurance *ompany +imited, promoted by .D2* 0as t$e first %ife insurance company in t$e pri5ate sector to be ranted a *ertificate of Reistration ?on October !8, !AAA@ by t$e #nsurance Reu%atory and De5e%opment Aut$ority to transact %ife insurance business in #ndia" Standard #ife "nBe.tment. #imited- T$e Standard +ife Assurance *ompany 0as estab%is$ed in 6G!: and $as considerab%e e4perience in %oba% financia% mar1ets" T$e company 0as present in t$e #ndian %ife insurance mar1et from 6G9J to 6H8G 0$en aencies 0ere set up in 3o%1ata and Mumbai" T$e company re-entered t$e #ndian mar1et in 6HH:, 0$en an areement 0as sined 0it$ .D2* to %aunc$ an insurance joint 5enture" On Apri% !AA;, t$e Board of T$e Standard +ife Assurance *ompany recommended t$at it s$ou%d demutua%ise and Standard +ife p%c f%oat on t$e +ondon Stoc1 )4c$ane" At a Specia% 'enera% Meetin $e%d in May 5otin members o5er0$e%min%y 5oted in fa5our of t$is" T$e *ourt of Session in Scot%and appro5ed t$is in -une and Standard +ife p%c f%oated on t$e +ondon Stoc1 )4c$ane on 6At$ -u%y !AA;" Standard +ife #n5estments is a %eadin asset manaement company, 0it$ appro4imate%y 7SO !;J bi%%ion as at Marc$ 86, !AAG, of assets under manaement" T$e company operates in t$e 73, *anada, .on 3on, *$ina, 3orea, #re%and, Paris, Sydney and t$e 7SA to ensure it is ab%e to form a tru%y %oba% in5estment 5ie0" #n order to meet t$e different needs and ris1 profi%es of its c%ients, Standard +ife #n5estments +imited manaes a di5erse portfo%io co5erin a%% of t$e major mar1ets 0or%d-0ide, 0$ic$ inc%udes a rane of pri5ate and pub%ic e&uities, o5ernment and company bonds, property in5estments and 5arious deri5ati5e instruments 6-6 ) !R'S!EE .D2* Trustee *ompany +imited, a company incorporated under t$e *ompanies Act, 6H:; is t$e Trustee to .D2* Mutua% 2und 5ide t$e Trust deed dated -une G, !AAA, as amended from time to time" .D2* Trustee *ompany +td is 0$o%%y o0ned subsidiary of .D2* !he 5oard of Dire+tor. of HDFC !ru.tee +ompany #imited +on.i.t. of the following eminent per.on." Mr" Ani% 3umar .irjee Mr" -ames Aird Mr" S$is$ir 3" Di0anji Mr" Ranjan San$i Mr" (" Srini5asa Ranan 6-8 ) Award. 0 A++olade. C5C ) !V 27 ) CR"S"# Mutual Fund of the (ear Award. 4;;7> @6 award.A 2- HDFC 1ruden+e Fund 0as t$e on%y sc$eme t$at 0on t$e *NB* - T( 6G - *R#S#+ Mutua% 2und of t$e <ear A0ard !AAG in t$e Mo.t Con.i.tent 5alan+ed Fund under CR"S"# F C1R for t$e ca%endar year !AAJ ?from amonst 8 sc$emes@" 4- HDFC Ca.h Management Fund ) SaBing. 1lan 0as t$e on%y sc$eme t$at 0on t$e *NB* - T( 6G - *R#S#+ Mutua% 2und of t$e <ear A0ard !AAG in t$e Mo.t Con.i.tent #iCuid Fund under CR"S"# F C1R for t$e ca%endar year !AAJ ?from amonst : sc$emes@" 6- HDFC Ca.h Management Fund ) SaBing. 1lan 0as t$e on%y sc$eme t$at 0on t$e *NB* - T( 6G - *R#S#+ Mutua% 2und of t$e <ear A0ard !AAG in t$e #iCuid S+heme E Retail Category for t$e ca%endar year !AAJ ?from amonst 6H sc$emes@" "CRA Mutual Fund Award. 4;;7> @6 award.A 2- HDFC MF Monthly "n+ome 1lan-#ong !erm 1lan- Ran1ed a SeBen Star Fund and $as been a0arded t$e Gold Award for G5e.t 1erforman+eG in t$e cateory of GOpen Ended Marginal ECuityG for t$e t$ree year period endin December 86, !AAJ ?from amonst !J sc$emes@
4- HDFC High "ntere.t Fund ) Short !erm 1lan - Ran1ed a FiBe Star Fund indicatin performance amon t$e top 6AB in t$e cateory of GOpen Ended Debt ) Short !ermG for one year period endin December 86, !AAJ ?from amonst !A sc$emes@" 6- HDFC 1ruden+e Fund - Ran1ed a FiBe Star Fund indicatin performance amon t$e top 6AB in t$e cateory of GOpen Ended 5alan+edG for t$e t$ree year period endin December 86, !AAJ ?from amonst 6; sc$emes@" #ipper Fund Award. 4;;7> 2- HDFC ECuity Fund ) Growth $as been a0arded t$e DBest Fund oBer !en (ear.H in t$e HECuity "ndia CategoryH at t$e #ipper Fund Award. 4;;7 ?form amonst !8 sc$emes@" #t 0as a0arded t$e Best 2und o5er ten years in !AA; and !AAJ as 0e%%" !AAG ma1es it t$ree in a ro0 CHA1!ER 8 1ROD'C! 0 SERV"CE OF HDFC M'!'A# F'D 6" T<P)S O2 M7T7A+ 27ND !" #N()STM)NT P+AN 8" PROD7*T O2 M7T7A+ 27ND 8-2 ) !(1ES OF M'!'A# F'D SCHEME @aA Open)ended FundI S+heme An open-ended fund or sc$eme is one t$at is a5ai%ab%e for subscription and repurc$ase on a continuous basis" T$ese sc$emes do not $a5e a fi4ed maturity period" #n5estors can con5enient%y buy and se%% units at Net Asset (a%ue ?NA(@ re%ated prices 0$ic$ are dec%ared on a dai%y basis" T$e 1ey feature of open-end sc$emes is %i&uidity" @bAClo.e)ended FundI S+heme A c%ose-ended fund or sc$eme $as a stipu%ated maturity period e"" :-J years" T$e fund is open for subscription on%y durin a specified period at t$e time of %aunc$ of t$e sc$eme" #n5estors can in5est in t$e sc$eme at t$e time of t$e initia% pub%ic issue and t$ereafter t$ey can buy or se%% t$e units of t$e sc$eme on t$e stoc1 e4c$anes 0$ere t$e units are %isted" #n order to pro5ide an e4it route to t$e in5estors, some c%ose-ended funds i5e an option of se%%in bac1 t$e units to t$e mutua% fund t$rou$ periodic repurc$ase at NA( re%ated prices" S)B# Reu%ations stipu%ate t$at at %east one of t$e t0o e4it routes is pro5ided to t$e in5estor i"e" eit$er repurc$ase faci%ity or t$rou$ %istin on stoc1 e4c$anes" T$ese mutua% funds sc$emes disc%ose NA( enera%%y on 0ee1%y basis" @+ASe+tor .pe+ifi+ fund.I.+heme. T$ese are t$e fundsEsc$emes 0$ic$ in5est in t$e securities of on%y t$ose sectors or industries as specified in t$e offer documents" e"" P$armaceutica%s, Soft0are, 2ast Mo5in *onsumer 'oods ?2M*'@, Petro%eum stoc1s, etc" T$e returns in t$ese funds are dependent on t$e performance of t$e respecti5e sectorsEindustries" /$i%e t$ese funds may i5e $i$er returns, t$ey are more ris1y compared to di5ersified funds" #n5estors need to 1eep a 0atc$ on t$e performance of t$ose sectorsEindustries and must e4it at an appropriate time" T$ey may a%so see1 ad5ice of an e4pert"
@dA!aD SaBing S+heme. T$ese sc$emes offer ta4 rebates to t$e in5estors under specific pro5isions of t$e #ncome Ta4 Act, 6H;6 as t$e 'o5ernment offers ta4 incenti5es for in5estment in specified a5enues" e"" )&uity +in1ed Sa5ins Sc$emes ?)+SS@" Pension sc$emes %aunc$ed by t$e mutua% funds a%so offer ta4 benefits" T$ese sc$emes are ro0t$ oriented and in5est pre-dominant%y in e&uities" T$eir ro0t$ opportunities and ris1s associated are %i1e any e&uity-oriented sc$eme" 8-4 ) "VES!ME! 1#A 8-4-2 ) S(S!EMA!"C "VES!ME! 1#A @S"1A .D2* M2 S#P is simi%ar to a Recurrin Deposit" )5ery mont$ on a specified date an amount you c$oose is in5ested in a mutua% fund sc$eme of your c$oice" T$e dates current%y a5ai%ab%e for S#Ps are t$e 2.t/ 9th/ 2;th/ 29th/ 4;th and the 49th of a mont$" <ouI%% be amaFed to %earn about t$e many benefits of in5estin t$rou$ .D2* M2 S#P" 5enefit 2 > 5e+ome A Di.+iplined "nBe.ter Bein discip%ined - #tIs t$e 1ey to in5estin success" /it$ t$e .D2* M2 Systematic #n5estment P%an you commit an amount of your c$oice ?minimum of Rs" 6AAA and in mu%tip%es of Rs" 6AA t$ereofP@ to be in5ested e5ery mont$ in one of our sc$emes" T$in1 of eac$ S#P payment as %ayin a bric1" One by one, youI%% see t$em transform into a bui%din" <ouI%% see your in5estments accrue mont$ after mont$" #tIs as simp%e as i5in at %east ; postdated mont$%y c$e&ues to us for a fi4ed amount in a sc$eme of your c$oice" #tIs t$e perfect so%ution for irreu%ar in5estors" PMinimum amounts may differ for eac$ Sc$eme" P%ease refer to S#P )nro%ment 2orm for detai%s" 5enefit 4 > Rea+h (our Finan+ial Goal #maine you 0ant to buy a car a year from no0, but you donIt 1no0 0$ere t$e do0n-payment 0i%% come from" .D2* M2 S#P is a perfect too% for peop%e 0$o $a5e a specific, future financia% re&uirement" By in5estin an amount of your c$oice e5ery mont$, you can p%an for and meet financia% oa%s, %i1e funds for a c$i%dIs education, a marriae in t$e fami%y or a comfortab%e postretirement %ife" T$e tab%e be%o0 i%%ustrates $o0 a %itt%e e5ery mont$ can o a %on 0ay" Monthly SaBing. ) %hat your .aBing. may generate SaBing. per month @for 29 year.A Tota% amount in5ested ?Rs" in +acs@ Rate of return ;"AB G"AB 6A"AB ?rupees in %acs, 6: years %ater@P 9;;; H"A 69"; 6J"9 !A"H 8;;; J"! 66"J 68"H 6;"J 6;;; :"9 G"G 6A"9 6!": 4;;; 8"; :"G J"A G"8 2;;; 6"G !"H 8": 9"! PMont$%y insta%ments, compounded mont$%y, for a 6:-year period" Di.+laimer> T$e i%%ustration abo5e is mere%y indicati5e in nature and s$ou%d not be construed as in5estment ad5ice" #t does not in any manner imp%y or suest performance of any .D2* Mutua% 2und Sc$eme?s@" P%ease read Ris1 2actors" 5enefit 6 > !a,e AdBantage of Rupee Co.t ABeraging Most in5estors 0ant to buy stoc1s 0$en t$e prices are %o0 and se%% t$em 0$en prices are $i$" But timin t$e mar1et is timeconsumin and ris1y" A more successfu% in5estment stratey is to adopt t$e met$od ca%%ed Rupee *ost A5erain" To i%%ustrate t$is 0eI%% compare in5estin t$e identica% amounts t$rou$ a S#P and in one %ump sum" #maine Sures$ in5ests Rs" 6AAA e5ery mont$ in an e&uity mutua% fund sc$eme startin in -anuary" .is friend, Rajes$, in5ests Rs" 6!AAA in one %ump sum in t$e same sc$eme" T$e fo%%o0in tab%e i%%ustrate $o0 t$eir respecti5e in5estments 0ou%d $a5e performed from -an to Dec: Sure.hJ. "nBe.tment RaKe.hJ. "nBe.tment Month NA( Amount 7nits Amount 7nits $an);8 H"89: 6AAA 6AJ"AAH6 6!AAA 6!G9"6AH6 Feb);8 H"8HH 6AAA 6A;"8H98 Mar);8 G"6!8 6AAA 6!8"6AJ! Apr);8 G"J:A 6AAA 669"!G:J May);8 G"A6! 6AAA 6!9"G6!G $un);8 G"H!: 6AAA 66!"A99G $ul);8 H"6A! 6AAA 6AH"G;;A Aug);8 G"86A 6AAA 6!A"88;H Sep);8 J":;G 6AAA 68!"68:8 O+t);8 ;"9;! 6AAA 6:9"J:AH oB);8 ;"H86 6AAA 699"!JH8 De+);8 J";AA 6AAA 686":JGH PNA( as on t$e 6At$ e5ery mont$" T$ese are assumed NA(s in a 5o%ati%e mar1et Di.+laimer> T$e i%%ustration abo5e is mere%y indicati5e in nature and s$ou%d not be construed as in5estment ad5ice" #t does not in any manner imp%y or suest performance of any .D2* Mutua% 2und Sc$eme?s@" Rupee *ost A5erain neit$er ensures you profits nor protects you from ma1in a %oss in dec%inin mar1ets" P%ease read Ris1 2actors" As seen in t$e tab%e, by in5estin t$rou$ S#P, you end up buyin more units 0$en t$e price is %o0 and fe0er units 0$en t$e price is $i$" .o0e5er, o5er a period of time t$ese mar1et f%uctuations are enera%%y a5eraed" And t$e a5erae cost of your in5estment is often reduced" At t$e end of t$e 6! mont$s, Sures$ $as more units t$an Rajes$, e5en t$ou$ t$ey in5ested t$e same amount" T$atIs because t$e a5erae cost of Sures$Is units is muc$ %o0er t$an t$at of Rajes$" Rajes$ made on%y one in5estment and t$at too 0$en t$e per-unit price 0as $i$" Sures$Is a5erae unit price Q 6!AAAE69GA";A6! Q Rs" G"6A: Rajes$Is a5erae unit price Q Rs" H"89: 5eneft 8 > Grow (our "nBe.tment %ith Compounded 5enefit. #t is far better to in5est a sma%% amount of money reu%ar%y, rat$er t$an sa5e up to ma1e one %are in5estment" T$is is because 0$i%e you are sa5in t$e %ump sum, your sa5ins may not earn muc$ interest" /it$ .D2* M2 S#P, eac$ amount you in5est ro0s t$rou$ compoundin benefits as 0e%%" T$at is, t$e interest earned on your in5estment a%so earns interest" T$e fo%%o0in e4amp%e i%%ustrates t$is" #maine Ne$a is !A years o%d 0$en s$e starts 0or1in" )5ery mont$ s$e sa5es and in5ests Rs" :,AAA ti%% s$e is !: years o%d" T$e tota% in5estment made by $er o5er : years is Rs" 8 %a1$s"Arjun a%so starts 0or1in 0$en $e is !A years o%d" But $e doesnIt in5est mont$%y" .e ets a %are bonus of Rs" 8 %a1$s at !: and decides to in5est t$e entire amount" Bot$ of t$em decide not to 0it$dra0 t$ese in5estments ti%% t$ey turn :A" At :A, Ne$aIs #n5estments $a5e ro0n to Rs" 9;,;G,!J8P 0$ereas ArjunIs in5estments $a5e ro0n to Rs" 8;,6J,AG9P" Ne$aIs sma%% contributions to a S#P and $er decision to start in5estin ear%ier t$an Arjun $a5e made $er 0ea%t$ier by o5er Rs" 6A %a1$s" P2iures based on 6AB p"a" interest compounded mont$%y" Di.+laimer> T$eT$e i%%ustration abo5e is mere%y indicati5e in nature and s$ou%d not be construed as in5estment ad5ice" #t does not in any manner imp%y or suest performance of any .D2* Mutua% 2und Sc$eme?s@" P%ease read Ris1 2actors" 5enefit 9 > Do All !hi. Effortle..ly #n5estin 0it$ .D2* M2 S#P is easy" Simp%y i5e us post-dated c$e&ues or opt for an Auto Debit from you ban1 account for an amount of your c$oice ?minimum of Rs" 6AAA and in mu%tip%es of Rs" 6AA t$ereofP@ and 0eI%% in5est t$e money e5ery mont$ in a fund of your c$oice" T$e p%ans are comp%ete%y f%e4ib%e" <ou can in5est for a minimum of si4 mont$s, or for as %on as you 0ant" <ou can a%so decide to in5est &uarter%y and 0i%% need to in5est for a minimum of t0o &uarters" 8-4-4 ) S(S!EMA!"C !RASFER 1#A @S!1A STP refers to Systematic Transfer P%an 0$ere in an in5estor in5ests a %ump sum amount in one sc$eme and reu%ar%y transfers ?i"e" s0itc$es@ a pre-defined amount into anot$er sc$eme" )5ery mont$ on a specified date an amount you c$oose is transfered from one mutua% fund sc$eme to anot$er of your c$oice" *urrent%y, 2i4ed Systematic Transfer P%an ?2STP@ - Mont$%y #nter5a% and *apita% Appreciation Systematic Transfer P%an ?*ASTP@ - Mont$%y #nter5a% faci%ity is a5ai%ab%e to t$e 7nit $o%ders on 2.t/ 9th/ 2;th/ 29th/ 4;th and 49th of a month and 2STP - Nuarter%y #nter5a% and *ASTP - Nuarter%y #nter5a% faci%ity is a5ai%ab%e to t$e 7nit $o%ders on 2.t/ 9th/ 2;th/ 29th/ 4;th and 49th of the fir.t month of eac$ &uarter" T$e Entry #oad Stru+ture for t$e transferee sc$emes - .D2* 'ro0t$ 2und, .D2* )&uity 2und, .D2* Top !AA 2und, .D2* *apita% Bui%der 2und, .D2* *ore = Sate%%ite 2und, .D2* Premier Mu%ti-*ap 2und, .D2* Ba%anced 2und, .D2* Prudence 2und, .D2* +on Term Ad5antae 2und and .D2* Ta4Sa5er 0i%% be as fo%%o0s: T$e EDit #oad Stru+ture is as fo%%o0s: 2or Transferee Sc$emes : .D2* +on Term Ad5antae 2und and .D2* Ta4Sa5er M Ni% 2or Transferee Sc$emes : .D2* 'ro0t$ 2und, .D2* )&uity 2und, .D2* Top !AA 2und, .D2* *apita% Bui%der 2und, .D2* *ore = Sate%%ite 2und, .D2* Premier Mu%ti-*ap 2und, .D2* Ba%anced 2und and .D2* Prudence 2und" #n respect of eac$ in5estment t$rou$ STP %ess t$an Rs" : crore in 5a%ue, an )4it +oad of 6"!:B is payab%e if units are redeemed E s0itc$ed-out on or before ! years from t$e date of a%%otment" #n respect of eac$ in5estment t$rou$ STP e&ua% to or reater t$an Rs" : crore in 5a%ue, no )4it +oad is payab%e" T$us, t$is faci%ity offers t$e benefits simi%ar to t$ose of an S#P and is suitab%e for in5estors 0$o intend to in5est systematica%%y and current%y $a5e funds for in5estments" 8-6 ) 1ROD'C!S OF M'!'A# F'D E<'"!(I GRO%!H F'D CH"#DREJS G"F! F'D #"<'"D F'D DE5!I "COME F'D E<'"!(I GRO%!H F'D DE5!I"COME F'D HDFC Growth Fund HDFC !op 4;; Fund HDFC Core and Satellite Fund HDFC "ndeD Fund ) Sen.eD 1lan HDFC "ndeD Fund ) Sen.eD 1lu. 1lan HDFC 5alan+ed Fund HDFC #ong !erm AdBantage Fund @E#SSA HDFC #ong !erm ECuity Fund HDFC "nfra.tru+ture Fund HDFC Capital 5uilder Fund HDFC 1remier Multi)Cap HDFC "ndeD Fund ) ifty 1lan HDFC Arbitrage Fund HDFC ECuity Fund HDFC 1ruden+e Fund HDFC !aDSaBer @E#SSA HDFC Mid)Cap Opportunitie. Fund HDFC MF Monthly "n+ome 1lan ) Short !erm 1lan HDFC Multiple (ield Fund HDFC "n+ome Fund HDFC Short !erm 1lan HDFC Gilt Fund ) Short !erm 1lan HDFC Floating Rate "n+ome Fund )Short !erm 1lan HDFC Ca.h Management Fund ) SaBing. 1lu. 1lan HDFC MF Monthly "n+ome 1lan ) #ong !erm 1lan HDFC Multiple (ield Fund ) 1lan 4;;9 HDFC High "ntere.t Fund HDFC High "ntere.t Fund ) Short term 1lan HDFC Gilt Fund ) #ong !erm 1lan HDFC Floating Rate "n+ome Fund ) #ong !erm 1lan CH"#DREJS G"F! F'D #"<'"D F'D HDFC ChildrenH. Gift Fund ) "nBe.tment 1lan HDFC ChildrenH. Gift Fund ) SaBing. 1lan HDFC #iCuid Fund HDFC #iCuid Fund 1remium 1lan HDFC #iCuid Fund 1remium 1lu. 1lan HDFC Ca.h Management Fund E Call HDFC Ca.h Management Fund ) SaBing. 1lan SOME 1O1'#AR F'DS ARE EL1#A" HERE HDFC Growth Fund .D2* 'ro0t$ fund, an open-ended ro0t$ sc$eme, app%ies an in5estment approac$ based on a set of 0e%% estab%is$ed but f%e4ib%e princip%es t$at emp$asiFe t$e concept of sustainab%e economic earnins cas$ return on in5estment" T$e objecti5e is to identify business 0it$ superior ro0t$ prospects nd ood manaement at a reasonab%e priceK" T$e fi5e basic princip%es t$at ser5e t$e foundation for t$is approac$ are as fo%%o0s: R 2ocus on t$e %on term R #n5estment confers proportionate o0ners$ip of t$e business R Maintain a marin safety R Maintain a ba%anced out%oo1 on t$e mar1et R Discip%ine approac$ to se%%in" T$e in5estment p$i%osop$y rests on a t0o-proned approac$" ;A-GAB of t$e portfo%io 0i%% aim to stay in5ested for most of t$e time in %are cap stoc1s t$at satisfy t$e abo5e in5estment criteria" T$is a%%ocation to %are cap stoc1s a%so ensures reater %i&uidity in t$e portfo%io" !A-9AB of t$e portfo%io 0i%% be in5ested in companies of sca%e t$at are eit$er %are mar1et s$are $o%der 5a.i+ S+heme "nformation/ !he a..et allo+ation under the S+heme will be a. follow. : Return. HDFC Growth Fund @AV a. at eBaluation date/ R.- 1er unitA 96-8:4 Date 1eriod AV Return.@MA NN O 5en+hmar, Return.@MAP Mar+h 6;/ 4;;: +ast 9:G days 9:"9;6 68"G6PP !"8JPP Nature of Sc$eme Open )nded 'ro0t$ Sc$eme #nception Date September 66, !AAA OptionEP%an Di5idend P%an, 'ro0t$ P%an" T$e Di5idend P%an offers Di5idend Payout and Rein5estment 2aci%ity" 1lan name AV Date AV Balue DiBidentd plan 6G Au !AAG !H"A!JA Growth plan 6G Au !AAG :G"H8JA Sr-no !ype of "n.trument. ormal Allo+ation @M of et A..etA ormal Allo+ation @M of et A..etA Ri., 1rofile 2 )&uity = )&uity re%ated instruments GA-6AA AA Medium to $i$ 4 Debt Securities, Money Mar1et instruments = *as$ ?inc%udin money at ca%%@ AA-!A AA +o0 to medium De+ember 47/ 4;;: +ast Si4 mont$s ?6G: days@ JH";;JA -8!"GGP -88"8GP $une 4=/ 4;;: +ast 6 <ear ?8;J days@ :9";H: -!"!!PP -G"AJPP $une 6;/ 4;;9 +ast 8 <ears ?6AH; days@ !:"9HH !J"HJPP !8"!6PP $une 6;/ 4;;6 +ast : <ears ?6G!J days@ 6A"G!H 8J":GPP 8A"6PP $une 6;/ 2==7 +ast 6A <ears ?8;:8 days@ N"A N"A" 6:"!:PP September 22/ 4;;; Since #nception ?!G9H days@ 6A"AAA !8"H;PP 69"99PP P Abso%ute Returns PP *ompounded Annua%ised Returns S S)NS)T U Due to an o5er a%% s$arp rise in t$e stoc1 prices V Past performance may or may not be sustained in t$e future S"1 Return. S"1 "nBe.tment. Sin+e "n+eption 9 (ear 6 (ear 2 (ear !otal Amount "nBe.ted @R.-A H9,AAA"AA ;A,AAA"AA 8;,AAA"AA 6!,AAA"AA Mar,et Value a. on $une 6;/ 4;;7 88G,;GA";9 66:,J::"8H 98,J9G":G H,G:J"8; Return. @Annuali.edAQM 86"G9B !;";9B 68"6AB -86"99B 5en+hmar, Return. !!"JJB !A";9B ;"JJB -8;"6:B S S)NS)T Benc$mar1 BS) Sense4 Disc%aimer: T$e abo5e in5estment simu%ation is for i%%ustrati5e purposes on%y and s$ou%d not be construed as a promise on minimum returns and safeuard of capita%" T$e AM* E Mutua% 2und is not uaranteein or promisin or forecastin any returns" S#P does not assure a profit or uarantee protection aainst a %oss in a dec%inin mar1et" P%ease refer S#P )nro%ment 2orm or contact nearest #S* for S#P +oad Structure HDFC !O1)4;; F'D "nBe.tment ObKe+tiBe T$e in5estment objecti5e is to enerate %on term capita% appreciation from a portfo%io of e&uity and e&uity %in1ed instruments" T$e in5estment portfo%io for e&uity and e&uity %in1ed instruments 0i%% be primari%y dra0n from t$e companies in t$e BS) !AA #nde4" 2urt$er, t$e Sc$eme may a%so in5est in %isted companies t$at 0ou%d &ua%ify to be in t$e top !AA by mar1et capita%iFation on t$e BS) e5en t$ou$ t$ey may not be %isted on t$e BS) T$is inc%udes participation in %are #POs 0$ere in t$e mar1et capita%iFation of t$e company based on issue price 0ou%d ma1e t$e company a part of t$e top !AA companies %isted on t$e BS) based on mar1et capita%iFation 5a.i+ S+heme "nformation ature of S+heme Open Ended Growth S+heme "n+eption Date October 66, 6HH; OptionI1lan Di5idend P%an,'ro0t$ P%an" T$e Di5idend P%an offers Di5idend Payout and Rein5estment 2aci%ity" 1lan ame AV Date AV Amount DiBidend 1lan 6G Au !AAG 8G"!H Growth 1lan 6G Au !AAG 6!H":; "nBe.tment 1attern T$e Sc$eme may a%so in5est upto !:B of net assets of t$e Sc$eme in deri5ati5es suc$ as 2utures = Options and suc$ ot$er deri5ati5e instruments as may be introduced from time to time for t$e purpose of $edin and portfo%io ba%ancin and and ot$er uses as may be permitted under t$e reu%ations and uide%ines" T$e Sc$eme may a%so in5est a part of its corpus, not e4ceedin 9AB of its net assets, in o5erseas mar1ets in '%oba% Depository Receipts ?'DRs@, ADRs, o5erseas e&uity, bonds and mutua% funds and suc$ ot$er instruments as may be a%%o0ed under t$e Reu%ations from time to time" Return. HDFC !op 4;; Fund @AV a. at eBaluation date/ R.- 1er unitA 229-848 Date Period NA( Returns?B@ OO V Benc$mar1 Returns?B@S Mar+h 6;/ 4;;: +ast 9:G days 6A9":A9 G"!9PP 9"9:PP De+ember 47/ 4;;: +ast Si4 mont$s ?6G: days@ 6;J"GGGA -86"!:P -8J":8P $une 4=/ 4;;: +ast 6 <ear ?8;J days@ 6!A"89 -9"A;PP -G"G:PP $une 6;/ 4;;9 +ast 8 <ears ?6AH; days@ :J"898 !;"!8PP !6"!PP $une 6;/ 4;;6 +ast : <ears ?6G!J days@ !8"8:G 8J";PP !H"98PP $une 6;/ 2==7 +ast 6A <ears ?8;:8 days@ 6!"J9H !J"6!PP 6J"::PP O+tober 22/ 2==3 Since #nception ?9!GA days@ 6A"AAA !:"8PP 6:"6GPP S"1 Return. S"1 "nBe.tment. Sin+e "n+eption 2; (ear 9 (ear 6 (ear 2 (ear !otal Amount "nBe.ted @R.-A 696,AAA"AA 6!A,AAA"AA ;A,AAA"AA 8;,AAA"AA 6!,AAA"AA Mar,et Value a. on $une 6;/ G8:,:8:"9: :GA,6!H"A9 668,8J:"A! 96,;;6"!H H,G98"A6 4;;7 Return. @Annuali.edAQM !J"G:B !H";:B !:"JJB H"J8B -86";9B 5en+hmar, Return. 6G"8!B !A"!:B 6G"HAB :"G!B -8G"9AB 5en+hmar, ) 5SE 4;; Disc%aimer: T$e abo5e in5estment simu%ation is for i%%ustrati5e purposes on%y and s$ou%d not be construed as a promise on minimum returns and safeuard of capita%" T$e AM* E Mutua% 2und is not uaranteein or promisin or forecastin any returns" S#P does not assure a profit or uarantee protection aainst a %oss in a dec%inin mar1et" P%ease refer S#P )nro%ment 2orm or contact nearest #S* for S#P +oad Structure HDFC E E<'"!( F'D .D2* )&uity 2und is an open-ended ro0t$ sc$eme, 0$ic$ aims to enerate %on- term capita% appreciati on" T$e sc$eme maintai ns a focused portfo%io predominant% y of %are cap stoc1s, t$rou$ t$ere i s contro%% ed e4posure to mid caps" T$e sc$emes $o0e5er a%0ays remain di 5ersified across sectors" Moreo5er, t$e sectora% a%% ocati on is done 1eepi n in mind to di5ersi fy across sectors 0ea1% y co-re%ated to eac$ ot$er to furt$er reduce ri s1" T$e under% yin t$eme 0$i %e manai n t$e sc$eme i s to in5est in businesses t$at are sustainab% e and for ood &ua%i ty" 5a.i+ S+heme "nformation ature of S+heme Open Ended Growth S+heme "n+eption Date -anuary A6, 6HH: OptionI1lan Di5idend P%an,'ro0t$ P%an" T$e Di5idend P%an offers Di5idend Payout and Rein5estment 2aci%ity" 1lan ame AV Date AV Amount DiBidend 1lan 6G Au !AAG 8;"6;8A Growth 1lan 6G Au !AAG 6:;"J;;A "nBe.tment Strategy> #n order to pro5ide %on term capita% appreciation, t$e Sc$eme 0i%% in5est predominant%y in ro0t$ companies" *ompanies se%ected under t$is portfo%io 0ou%d as far as practicab%e consist of medium to %are siFed companies 0$ic$: are %i1e%y ac$ie5e abo5e a5erae ro0t$ t$an t$e industry> enjoy distinct competiti5e ad5antaes, and $a5e superior financia% strent$s" T$e aim 0i%% be to bui%d a portfo%io, 0$ic$ represents a cross-section of t$e stron ro0t$ companies in t$e pre5ai%in mar1et" #n order to reduce t$e ris1 of 5o%ati%ity, t$e Sc$eme 0i%% di5ersify across major industries and economic sectors "nBe.tment 1attern T$e asset a%%ocation under t$e Sc$eme 0i%% be as fo%%o0s : Sr-o- A..et !ype @M of 1ortfolioA Ri., 1rofile 2 )&uities and )&uity Re%ated #nstruments GA - 6AA Medium to .i$ 4 Debt = Money Mar1et #nstruments A - !A +o0 to Medium #n5estment in Securitised debt, if underta1en, 0ou%d not e4ceed !AB of t$e net assets of t$e sc$eme" T$e Sc$eme may a%so in5est upto !:B of net assets of t$e Sc$eme in deri5ati5es suc$ as 2utures = Options and suc$ ot$er deri5ati5e instruments as may be introduced from time to time for t$e purpose of $edin and portfo%io ba%ancin and ot$er uses as may be permitted under t$e Reu%ations" T$e Sc$eme may a%so in5est a part of its corpus, not e4ceedin 9AB of its net assets, in o5erseas mar1ets in '%oba% Depository Receipts ?'DRs@, ADRs, o5erseas e&uity, bonds and mutua% funds and suc$ ot$er instruments as may be a%%o0ed under t$e Reu%ations from time to time" A%so refer to t$e Section on Po%icy on off-s$ore #n5estments by t$e Sc$eme?s@" #f t$e in5estment in e&uities and re%ated instruments fa%%s be%o0 JAB of t$e portfo%io of t$e Sc$eme at any point in time, it 0ou%d be endea5ored to re5ie0 and reba%ance t$e composition" Not 0it$ standin anyt$in stated abo5e, subject to t$e reu%ations, t$e asset a%%ocation pattern indicated abo5e may c$ane from time to time, 1eepin in 5ie0 mar1et conditions, mar1et opportunities, app%icab%e reu%ations and po%itica% and economic factors" #t may be c%ear%y understood t$at t$e percentaes stated abo5e are on%y indicati5e and are not abso%ute and t$at t$ey can 5ary substantia%%y dependin upon t$e perception of t$e AM*, t$e intention bein at a%% times to see1 to protect t$e NA( of t$e sc$eme" Suc$ c$anes 0i%% be for s$ort term and defensi5e considerations" Pro5ided furt$er and subject to t$e abo5e, any c$ane in t$e asset a%%ocation affectin t$e in5estment profi%e of t$e Sc$eme and amountin to a c$ane in t$e 2undamenta% Attributes of t$e Sc$eme s$a%% be effected in accordance 0it$ sub-reu%ation ?6:A@ of reu%ation 6G of S)B# reu%ations" Return. HDFC ECuity Fund @AV a. at eBaluation date/ R.- 1er unitA 286-2:2 Date 1eriod AV Return. @MA NN O 5en+hmar, Return. @MA P Mar+h 6;/ 4;;: +ast 9:G days 69!";A! A"8!PP 6"9JPP De+ember 47/ 4;;: +ast Si4 mont$s ?6G: days@ !6H"G:JA -89"GGP -8H"8GP $une 4=/ 4;;: +ast 6 <ear ?8;J days@ 6;:"868 -68"88PP -66":HPP $une 6;/ 4;;9 +ast 8 <ears ?6AH; days@ J8"J;G !9"J6PP 6G"GJPP $une 6;/ 4;;6 +ast : <ears ?6G!J days@ !H"H;A 8;";GPP !H"A8PP $une 6;/ 2==7 +ast 6A <ears ?8;:8 days@ J"!GA 89";JPP 6J"J:PP $anuary 2/ 2==9 Since #nception ?9H!H days@ 6A"AAA !6"JGPP H"!!PP P Abso%ute Returns PP *ompounded Annua%ised Returns S S=P *NT :AA V Past performance may or may not be sustained in t$e future S"1 Return. S"1 "nBe.tment. Sin+e "n+eption 2; (ear 9 (ear 6 (ear 2 (ear !otal Amount "nBe.ted @R.-A 6;!,AAA"AA 6!A,AAA"AA ;A,AAA"AA 8;,AAA"AA 6!,AAA"AA Mar,et Value a. on $une 6;/ 4;;7 6,9H9,J:8"H! ;9;,9HA";: 6AJ,HA9"6! 8G,HHG";J H,9AG":J Return. @Annuali.edAQM !H":8B 86";;B !8"J6B :"!JB -8J":!B 5en+hmar, Return. 6;"6GB 6H"JJB 6J":;B 8"!:B -9A"!JB Di.+laimer> T$e abo5e in5estment simu%ation is for i%%ustrati5e purposes on%y and s$ou%d not be construed as a promise on minimum returns and safeuard of capita%" T$e AM* E Mutua% 2und is not uaranteein or promisin or forecastin any returns" S#P does not assure a profit or uarantee protection aainst a %oss in a dec%inin mar1et" P%ease refer S#P )nro%ment 2orm or contact nearest #S* for S#P +oad Structure" HDFC "nfra.tru+ture Fund "nBe.tment ObKe+tiBe To see1 %on-term capita% appreciation by in5estin predominant%y in e&uity and e&uity re%ated securities of companies enaed in or e4pected to benefit from ro0t$ and de5e%opment of infrastructure" 5a.i+ S+heme "nformation ature of S+heme Clo.e Ended ECuity S+heme with a maturity period of 6 year. from the date of allotment with automati+ +onBer.ion into an open)ended .+heme upon maturity of the S+heme- "n+eption Date Mar+h 2;/ 4;;7 OptionI1lan DiBidend Option/ Growth Option- DiBidend Option +urrently offer. with payout fa+ility only 1lan ame AV Date AV Amount Growth Option 6G Au !AAG G"8G8A DiBidend Option 6G Au !AAG G"8G8A "nBe.tment 1attern> T$e asset a%%ocation under t$e respecti5e P%ans 0i%% be as fo%%o0s: !ype of "n.trument. Minimum Allo+ation @M of et A..et.A MaDimum Allo+ation@M of et A..et.A Ri., 1rofile of the "n.trument ECuity and ECuity Related "n.trument. of infra.tru+ture I infra.tru+ture related +ompanie. ;:B 6AAB Medium to .i$ ECuity and ECuity Related "n.trument. of +ompanie. other than mentioned aboBe AB 8:B Medium to .i$ Debt Se+uritie. and Money Mar,et "n.trument.Q and FiDed "n+ome DeriBatiBe R AB 8:B +o0 to Medium P #n5estments in securitiFed debt s$a%% not norma%%y e4ceed 8AB of t$e net assets of t$e Sc$eme" T$e Sc$eme may see1 in5estment opportunity in 2orein Securities ?ma4" 8:B of net assets@" T$e Sc$eme may ta1e deri5ati5es position for $edin, portfo%io ba%ancin or to underta1e any ot$er stratey as permitted under S)B# Reu%ations from time to time ?ma4" !AB of t$e net assets@ based on t$e opportunities a5ai%ab%e subject to S)B# Reu%ations" Return. HDFC "nfra.tru+ture Fund @AV a. at eBaluation date/ R.- 1er unitA :-87 Date Period NA( Returns ?B@ O O V Benc$mar1 Returns ?B@ S Mar+h 6;/ 4;;: +ast 9:G days N"A N"A" 6"9JPP De+ember 47/ 4;;: +ast Si4 mont$s ?6G: days@ N"A N"A" -8H"8GP $une 4=/ 4;;: +ast 6 <ear ?8;J days@ N"A N"A" -66":HPP $une 6;/ 4;;9 +ast 8 <ears ?6AH; days@ N"A N"A" 6G"GJPP $une 6;/ 4;;6 +ast : <ears ?6G!J days@ N"A N"A" !H"A8PP $une 6;/ 2==7 +ast 6A <ears ?8;:8 days@ N"A N"A" 6J"J:PP Mar+h 2;/ 4;;7 Since #nception ?66! days@ 6A"AAA -!:"!P -6G"9:P P Abso%ute Returns PP *ompounded Annua%ised Returns S S=P *NT :AA U Due to an o5era%% s$arp rise in t$e stoc1 prices V Past performance may or may not be sustained in t$e future FC 1ruden+e Fund "nBe.tment ObKe+tiBe T$e in5estment objecti5e of t$e Sc$eme is to pro5ide periodic returns and capita% appreciation o5er a %on period of time, from a judicious mi4 of e&uity and debt in5estments, 0it$ t$e aim to pre5entE minimiFe any capita% erosion" 5a.i+ S+heme "nformation ature of S+heme Open Ended 5alan+ed S+heme "n+eption Date 2ebruary A6, 6HH9 OptionI1lan Di5idend P%an, 'ro0t$ P%an" T$e Di5idend P%an offers Di5idend Payout and Rein5estment 2aci%ity" Return. HDFC 1ruden+e Fund @AV a. at eBaluation date/ R.- 1er unitA 224-3:7 Date Period NA( Returns ?B@ O O V Benc$mar1 Returns ?B@ S Mar+h 6;/ 4;;: +ast 9:G days 66A"68! 6"G9PP ;"A6PP De+ember 47/ 4;;: +ast 6G: days 6;A";GJA -!H"GGP -!!"JP $une 4=/ 4;;: +ast 6 <ear ?8;J days@ 6!9"J6; -H";PP -6"88PP $une 6;/ 4;;9 +ast 8 <ears ?6AH; days@ ;9";G! !A"8PP 6:"8GPP $une 6;/ 4;;6 +ast : <ears ?6G!J days@ 6H"!8A 9!"8JPP 6H"86PP $une 6;/ 2==7 +ast 6A <ears ?8;:8 days@ 66"9GA !;"GPP N"A" February 2/ 2==8 Since #nception ?:!;8 days@ 6A"AAA !A"96PP N"A" P Abso%ute Returns PP *ompounded Annua%ised Returns S *R#S#+ Ba%anced 2und #nde4 U Due to an o5era%% s$arp rise in t$e stoc1 prices V Past performance may or may not be sustained in t$e future OO Adjusted for t$e di5idends dec%ared under t$e sc$eme prior to its sp%ittin into t$e Di5idend and 'ro0t$ P%an "nBe.tment Strategy As out%ined abo5e, t$e in5estments in t$e Sc$eme 0i%% comprise bot$ debt and e&uities" T$e 2und 0ou%d in5est in Debt instruments suc$ as 'o5ernment securities, money mar1et instruments, securitiFed debts, corporate debentures and bonds, preference s$ares, &uasi 'o5ernment bonds, and in e&uity s$ares" #n t$e %on term, t$e mi4 bet0een debt instruments and e&uity instruments is tareted bet0een ;A:9A and 9A:;A respecti5e%y" T$e e4act mi4 0i%% be a function of interest rates, e&uity 5a%uations, reser5es position, ris1 ta1in capacity of t$e portfo%io 0it$out compromisin t$e consistency of di5idend payout ?in t$e case of Di5idend P%an@, need for capita% preser5ation and t$e need to enerate capita% appreciation" 2und Manaer Mr- 1ea.ant $ain Mr- an and #add - Dedicated 2und Manaer - 2orein Securities "nBe.tment 1attern T$e fo%%o0in tab%e pro5ides t$e asset a%%ocation of t$e Sc$emeDs portfo%io" T$e asset a%%ocation under t$e respecti5e P%ans 0i%% be as fo%%o0s: Reno- !ype of "n.trument. ormal Allo+ation @M of et A..et.A Ri., 1rofile 2 )&uities = )&uity re%ated instruments 9A - J:B Medium to .i$ 4 Debt Securities, Money Mar1et instruments?inc%udin cas$Eca%% money@ !: - ;AB +o0 to Medium ?#n5estment in SecuritiFed debt, if underta1en, 0ou%d not e4ceed 6AB of t$e net assets of t$e Sc$eme"@ HDFC Capital 5uilder Fund .D2* *apita% Bui%der 2und, an open-ended ro0t$ sc$eme, aims to in5est in stron companies at prices t$at be%o0 fair 5a%ue in t$e opinion of t$e fund manaers" T$e in5estment approac$ is based on t$e p$i%osop$y t$at 5a%ue may be unco5ered on%y 0$ere t$e cro0d $as not disco5ered it yet" #n t$e opinion of t$e fund manaers suc$ 5a%ue e4ists in ood &ua%ity 0e%% manaed ne%ected stoc1s" T$e current ne%ect in t$ese companies by t$e broad mar1et participants can be due to 5arious factors suc$ as difficu%t recent mar1et conditions, major restructurin c$ares, (RS e4penses or ot$er suc$ onetime effects t$at may subdue profits in t$e near term" T$is a%so usua%%y resu%ts in t$e s$ares of suc$ companies bein re%ati5e%y i%%i&uid" /$i%e assumin suc$ re%ati5e ris1 adjusted %i&uidity ris1 t$e fund manaers propose to capita%iFe on e4pected pic1 up reported earnin as resu%t of stron ro0t$ prospects in t$e future" T$is e5entua%%y trans%ates in to more %i&uidity dependin on t$e success of t$is stratey" Suc$ opportunities are a5ai%ab%e in %are companies as 0e%% as sma%% companies" /$i%e t$ere are no criteria for stoc1 se%ection based on mar1et capita%iFation t$e endea5or is to 1eep a ba%ance of companies in t$e portfo%io bet0een bi and sma%% companies, on one cateory o5er0$e%min t$e ot$er 5a.i+ S+heme "nformation ature of S+heme Open Ended Growth S+heme "n+eption Date 2ebruary A6, 6HH9 OptionI1lan Di5idend P%an, 'ro0t$ P%an" T$e Di5idend P%an offers Di5idend Payout and Rein5estment 2aci%ity" 1lan ame AV Date AV Amount DiBidend 1lan 6G Au !AAG !!"AJ: Growth 1lan 6G Au !AAG ;H"H6G "nBe.tment 1attern T$e asset a%%ocation under t$e Sc$eme 0i%% be as fo%%o0s: Sr-o- A..et !ype @M of 1ortfolioA Ri., 1rofile 2 )&uities and )&uity Re%ated #nstruments 7pto 6AAB Medium to .i$ 4 Debt = Money Mar1et #nstruments Not more t$an !AB +o0 to Medium #n5estment in SecuritiFed debt, if underta1en, 0ou%d not e4ceed !AB of t$e net assets of t$e sc$eme" T$e Sc$eme may a%so in5est upto !:B of net assets of t$e Sc$eme in deri5ati5es suc$ as 2utures = Options and suc$ ot$er deri5ati5e instruments as may be introduced from time to time for t$e purpose of $edin and portfo%io ba%ancin and ot$er uses as may be permitted under reu%ations and uide%ines" T$e Sc$eme may a%so in5est a part of its corpus, not e4ceedin 9AB of its net assets, in o5erseas mar1ets in '%oba% Depository Receipts ?'DRs@, ADRs, o5erseas e&uity, bonds and mutua% funds and suc$ ot$er instruments as may be a%%o0ed under t$e Reu%ations from time to time" A%so refer to t$e Section on Po%icy on off-s$ore #n5estments by t$e Sc$eme?s@" S"1 Return. S"1 "nBe.tment. Sin+e "n+eption 2; (ear 9 (ear 6 (ear 2 (ear !otal Amount "nBe.ted @R.-A 6J8,AAA"AA 6!A,AAA"AA ;A,AAA"AA 8;,AAA"AA 6!,AAA"AA Mar,et Value a. on $une 6;/ 4;;7 GHA,686"9! 9;8,J:!"AG 6A8,89H"9A 8J,:8H"89 H,!9!"6; Return. @Annuali.edAQM !A":6B !:":6B !6"H!B !"J9B -8H"J8B 5en+hmar, Return. 6:"A9B 6H"JJB 6J":;B 8"!:B -9A"!JB 1a.t performan+e may or may not be .u.tained in the future P +oad is not ta1en into consideration and t$e Returns are of 'ro0t$ P%an E Option" #n5estors are ad5ised to refer to t$e Re%ati5e Performance tab%e furnis$ed as abo5e for non-S#P returns Return. HDFC Capital 5uilder Fund @AV a. at eBaluation date/ R.- 1er unitA 38-23= Date 1eriod AV Return.@MA NN O 5en+hmar, Return.@MAP Mar+h 6;/ 4;;: +ast 9:G days ;A"8 :"AGPP 6"9JPP De+ember 47/ 4;;: +ast Si4 mont$s ?6G: days@ 6A:"6!8A -8G"H;P -8H"8GP $une 4=/ 4;;: +ast 6 <ear ?8;J days@ J8"!J -6!"8;PP -66":HPP $une 6;/ 4;;9 +ast 8 <ears ?6AH; days@ 8J"9J9 6H";!PP 6G"GJPP $une 6;/ 4;;6 +ast : <ears ?6G!J days@ 68"66J 8J"8!PP !H"A8PP $une 6;/ 2==7 +ast 6A <ears ?8;:8 days@ J"9GA !8"H;PP 6J"J:PP February 2/ 2==8 Since #nception ?:!;8 days@ 6A"AAA 68"J;PP J"H:PP P Abso%ute Returns PP *ompounded Annua%ised Returns S S=P *NT :AA V Past performance may or may not be sustained in t$e future 5en+hmar, ) S 0 1 CL 9;; Disc%aimer: T$e abo5e in5estment simu%ation is for i%%ustrati5e purposes on%y and s$ou%d not be construed as a promise on minimum returns and safeuard of capita%" T$e AM* E Mutua% 2und is not uaranteein or promisin or forecastin any returns" S#P does not assure a profit or uarantee protection aainst a %oss in a dec%inin mar1et" P%ease refer S#P )nro%ment 2orm or contact nearest #S* for S#P +oad Structure" *.APT)R : 1AR! OF M( S'MMER !RA""G 1art of my under.tudy training 2or t$e purpose of fu%fi%%ment of masters deree in business administration i $ad underta1en my summer trainin at HDFC)mutual fund at 3ota branc$ for a period of 9: days" #n course of t$e trainin i $ad an opportunity to et proper 0or1in 1no0%ede about t$e interna% 0or1ins of Mutua% funds dept" T$e sin%e most important factor t$at dri5es .D2* Mutua% 2und is its be%ief to i5e t$e in5estor t$e c$ance to profitab%y in5est in t$e financia% mar1et, 0it$out constant%y 0orryin about t$e mar1et s0ins" # $ad c$osen t$e HDFC)mutual fund as it is one of t$e most $i$%y reputed mutua% fund a%% o5er t$e #ND#A and offers under study trainin to students durin summer" # $ad t$e job of con5incin in5estors to c$oose .D2* mutua% funds o5er ot$ers" 2or t$is purpose # a%so maintained a database of a%% t$e in5estors 0$o $ad been approac$ed" Money is a 5a%uab%e asset and it is ob5ious t$at peop%e t$in1 many times before in5estin t$eir money into any 1ind of funds" T$ey fre&uent%y as1 &uestions about t$e time period, interest rates, current status of t$e s$are mar1et, etc 0$ic$ re&uires ood runnin 1no0%ede in t$e fie%d" #t 0as not 5ery easy to con5ince peop%e to ma1e in5estment in t$e .D2* mutua% funds but 0it$ t$e $e%p of Mr" .imans$u (yas, of .D2-mutua% fund 3ota branc$" # accomp%is$ed my tas1" T$e %arest amount of in5estment 0as made by Mr" MD AB#D ,an amount of 6,:A,AAA , in t$e sc$eme .D2*- e&uity fund for a duration of years" Ot$er in5estors 0ere AME "nBe.tmen t type Amount Sc$eme Duration 2- MD A5"D S"1 4/;;; .D2* 'RO/T. 27ND 6 <)AR 4- SHOA"5 ASH!ER S"1 2/;;; .D2* TOP !AA 27ND 6 <)AR 6- DE5EDRA A!H 1A'# One time 2/;;/;;; .D2* )N7#T< 27ND 8 <)AR 8- ATM 'T TAMA S"1 2/;;; .D2* 'RO/T. 27ND 6 <)AR 9- MD A5"D OE !"ME 2/9;/;;; .D2* )N7#T< 27ND ! <)AR 3- "SH"! HEMA" S"1 4/;;; .D2* 'RO/T. 27ND 6 <)RA :- Dr E(AT AHMED S"1 2/;;; .D2* 'RO/T. 27ND 6 <)RA 7- SHA#"D SADA! S"1 4/;;; .D2* TOP !AA 27ND 6 <)AR =- CHAD' #A# G'1!A S"1 2/;;; .D2* TOP !AA 27ND 6 <)AR 2;- "SH"! HEMA" OE !"ME 9;/;;; .D2* )N7#T< 27D ! <)AR 22- MD 1ER%ET A#AM S"1 2/;;; .D2* BA+AN*)D 27ND 6 <)AR 24- $'5A"R SHA S"1 2/;;; .D2* BA+AN*)D 27ND 6 <)AR 26- D ! MOHA!( S"1 2/;;; .D2* 'RO/T. 27ND 6 <)AR 28- 1RASASH $HA S"1 2/;;; .D2* TOP !AA 27ND 6 <)AR 29- SHA#"D SADA! One time 2/;;/;;; .D2* )N7#T< 27ND 8 <)AR 23- AM"! DAGA S"1 4/;;; .D2* 'RO/T. 27ND 6 <)AR 2:- V"SRA! G'1!A S"1 2/;;; .D2* 'RO/T. 27ND ! <)AR 27- RA$ESH S'MAR S"1 2/;;; .D2* 'RO/T. 27ND 6 <)RA 2=- MD AS"F S"1 2/;;; .D2* 'RO/T. 27ND 6 <)RA 4;- MATAR SHA S"1 2/;;; .D2* TOP !AA 27ND 6 <)AR 42- 5"S%A$"! RA" S"1 2/;;; .D2* TOP !AA 27ND 6 <)AR 44- AREDRA A!H 1A'# S"1 2/;;; .D2* 'RO/T. 27ND ! <)AR 46- HAR1REE! SA'R S"1 2/;;; .D2* BA+AN*)D 27ND 6 <)AR 48- SOMA AGAR%A# S"1 2/;;; .D2* )N7#T< 27D 6 <)AR Durin t$e trainin period i manaed to con5ince peop%e to ma1e in5estment in .dfc Mutua% funds"T$e tota% amount of trasaction i pro5ided 0as about Rs J,AA,AAA CHA1!ER 3 ME!HODO#OG( OF !HE S!'D( 6" R)S)AR*. M)T.ODO+O'< !" SO7R*)S O2 DATA *O++)*T#ON 8" .<POT.)S#S O2 T.) ST7D< 9" DATA *O++)*T#ON = ANA+<S#S 3-2 ) Re.ear+h Methodology> Since t$e study underta1en by me is re%ated to t$e study of mutua% fund in #ndia, t$e means adopted for co%%ection of 5arious facts and data 0ere in t$e form of persona% obser5ation, officia%s documents, and direct%y interactin 0it$ t$e officers concerned and a%so direct%y interactin 0it$ t$e e4istin customers as 0e%% as ne0 customer formed" #t 0as an e4p%oratory researc$" /or1 is main%y emp$asiFed on t$e primary data" Primary data are at$ered form prescribed &uestionnaire and by persona% inter5ie0 and t$e secondary data are co%%ected from different boo1s and maaFines" 3-4 ) Sour+e. of Data +olle+tion T$ere are t0o sources of data co%%ection" T$ey are: 2- 1R"MAR( DA!A SO'RCE 4- SECODAR( DA!A SO'RCE T$e secondary data are t$ose, 0$ic$ $a5e a%ready been co%%ected by someone e%se t$orou$ Boo1s, #nternet, Te%e5ision, journa%s, MaaFines, etc" On t$e ot$er $and primary data does not e4ist $ere" T$e researc$er $as to at$er primary data afres$ for t$e specific study underta1en by $im" Primary data $as been co%%ected $ere by &uestionnaire met$od and persona% inter5ie0 met$od is fo%%o0ed" Primary sources suc$ as #nter5ie0s, Obser5ation, and attendin trainin and de5e%opment c%asses" Secondary sources suc$ as Boo1%ets, Mont$%y journa%, MaaFines, Officia% fi%es etc" 3-6 ) H(1O!HES"S OF !HE S!'D( 2or doin t$e dissertation topic performance of mutua% fund ana%ysis # too1 t$e $ypot$esis of certain roups" # di5ide t$e tota% popu%ation on t$e basis of t$eir ae, income, ender, occupation and status" Ma%e job$o%ders 0it$in t$e ae roup of !9-9A" 2ema%e job$o%ders 0it$in t$e ae roup of !9-9A" Ma%e job$o%ders abo5e t$e ae 9A" 2ema%e job$o%ders abo5e t$e ae 9A" #ndi5idua% $a5in t$e income in t$e rane of 6%1$-8%1$ per annum" #ndi5idua% $a5in t$e income abo5e 8%1$ per annum" #n Rajest$an i"e" rura% area it is sti%% a ne0 concept so it 0i%% ta1e some more time to rea%%y penetrate into t$is mar1et apart from peop%e 0$o are .N#Is t$ou$ t$ese peop%e are i5en more emp$asis by a%% t$e Mutua% funds and distribution c$anne%s" /it$ t$e introduction of S#PIs t$e industry $as created some options c%ear for retai% in5estors to enter t$is mar1et" My sur5ey says t$at it t$e a0areness %e5e% t$at is p%ayin actin as an obstac%e in t$e ro0t$ of Mutua% fund #ndustry in Rajest$an as a 0$o%e" Peop%e in -$a%a0ar are no0 openin up and interested in %oo1in for0ard for certified in5estment p%anners to $e%p t$em desinin t$eir in5estment portfo%io" Rajest$an as a mar1et 0as not t$at efficient fe0 years bac1, but no0 0it$ %ot of mu%tinationa% companies and ot$er reputed companies comin do0n, t$e Rajest$an mar1et is s%o0%y pic1in up" 2or mutua% funds it is one of t$e emerin mar1ets t$at can be trapped form its de5e%opin stae and t$ou$ peop%e of rura% areas prefer Moderate ris1 t$ey can easi%y accept mutua% funds" Mutua% fund #ndustry is de%i5erin a sp%endid performance and 0i%% of course continue in comin future" But t$at can be on%y possib%e as t$e distribution c$anne%s %i1e 3ar5y, Bajaj finance and Ban1s i"e" *iti Ban1, .D2* Ban1, #*#*# Ban1 and Standard *$artered Ban1 a%on 0it$ a%% Asset Manaement *ompany" 3-8 ) Data Colle+tion 0 Data Analy.i. o of re.pondent ) 4;; Male ) 269 Female ) 39 umber of re.pondent. A++ording to age group.> 27 to 6; U 99
6; to 8; U 7;
135 65 0 50 100 150 male female Respondent 55 80 40 25 0 20 40 60 80 100 18 to 35 35 to 45 45 to 55 55 & above Respondent 8; to 9; U 8;
9; aboBe U49
!he .urBey i. +ondu+ted on a .ample of 4;; people whi+h in+lude. 22; male. and =; female.- !he .ample +ontain. +on.umer. from all the age group. .o that an ideal .ample +an be obtained- 2- "nBe.tment ABenue. aBailable in the mar,et/ that inBe.tor are aware of? Posta% sc$emes 'o5ernment securities Direct e&uity in5estment Ban1 2DIs Mutua% funds #nsurance "FERECE> A++ording to the inBe.tor. in Sota/ 66M of inBe.tor. prefer to depo.it there money in ban, FDJ.- %here a. 7M of the inBe.tor. want to inBe.t in po.tal .+heme/ 8M in goBernment .e+urity/ 29M inBe.t in dire+t eCuity 4;M of inBe.tor. they prefer mutual fund 0 in.uran+e/ a. there inBe.tment hou.e whi+h i. not Bery high/ but at the .ame time mutual fund +on+ept i. growing 4- More attra+tiBe about mutual fund.? Returns Moderate ris1 Ta4 benefits .ass%e free Past performance /e%% reu%ated No idea " "FRECE> A++ording to people of Sota they attra+t with pa.t performan+e of the +ompany if +ompany pa.t re+ord. i. good then they intere.ted to inBe.t- After that people attra+t with taD benefit then return on inBe.tment 6- 1er+entage of entire inBe.tment in+lude. mutual fund.? Be%o0 !AB !A to :AB :A to GAB GAB abo5e "FRECE> 5y thi. we +ome to ,now that mo.t of the people u.e to go for mutual fund a. we +an .ee by the aboBe graph that 76 people from 4;; goe. for 4;M to9;M inBe.tment in Mutual Fund.- 8- For "nBe.tment. in Mutual Fund/ whi+h +ompany inBe.tor. prefer? .D2* M2 ABN AMRO M2 PR7D)NT#A+ #*#*# M2 R)+#AN*) M2 B#R+A S7N+#2) "FERECE> A++ording to the "nBe.tor. in Sota 69M of inBe.tor. prefer to inBe.t in HDFC mutual fund/ 4:M of inBe.tor. prefer Relian+e mutual fund where a. 5irla .hare 24M and "C"C" by 2:M-but only =M inBe.tor. inBe.t in A5 AMRO mutual fund- " haBe +ompared the.e fiBe fund hou.e be+au.e they are the main +ompetitor. in Sota- 9- How do inBe.tor. manage hi. inBe.tment portfolio? So%e%y of my o0n On ad5ise of a friend On ad5ise of a distributorEaent On ad5ise of your ban1er On ad5ice of mutua% fund $ouse peop%e "FRECE> A++ording to my .urBey mo.t no of people manage hi. inBe.tment port folio by own/ 78 people out of 4;; manage hi. portfolio by own and 89 0 63 people manage with the help of ban,er. and MF hou.e 3- SaBing.IinBe.tment aBenue. 9 year ba+,? Ban1 2D, Sa5ins #nsurance Mutua% funds )&uity mar1et 'o5t" securities Rea% estate Posta% sa5ins, 2D "FRECE> A++ording to my .urBey before 9 year mo.t of the people@226A of Sota +ity inBe.ted hi. money in in.uran+e .e+tor and =; people out of 4;; inBe.ted in ban, FD- 5ut only 86 people out of 4;; inBe.t in mutual fund whi+h wa. Bery low :- Among the huge number of people going for mutual fund/ in whi+h ,ind of fund they normally inBe.t? )&uity Oriented Debt Oriented Ba%anced Oriented "FERECE> "n the +ity li,e Sota in between the age group 27)6;/ 34M inBe.tor inBe.ted in eCuity oriented/ and only 27M people inBe.t in debt fund- 5ut group of people more than 9; year 99M inBe.tor inBe.t in debt fund and only 46M people inBe.t in eCuity fund- "t mean younger people attra+t with eCuity fund and old man attra+t with debt fund- but in balan+ed fund eBery group. are eCually inBe.t 7- Ri., appetite of people in RaKe.than 1referred Ri., and Return .i$ ris1 $i$ return @H/HA Moderate ris1 moderate return @M/MA +o0 ris1 %o0 return @#/#A "FERECE> A++ording to the .urBey/ we +an +on+lude that/ people in rural area. mo.tly belieBe in Moderate ri.,/ and moderate return.- EBen mutual fund. haBe moderate ri., and the return i. Cuite le.. than a. it i. in +a.e of eCuitie.- So/ for the people of Rural area. mutual fund. are the right ,ind of inBe.tment option- =- How .eriou.ly people in Sota thing about undergoing a finan+ial planning for them? (e. o "FRECE> A++ording to my .urBey of Sota people / mo.t no of people are more .eriou. about finan+ial planning CHA1!ER : <'ES!"OARE Nuestionnaire 1lea.e fill up the Cue.tionnaire a++ording to the Cue.tion. a.,ed- @$u.t put on a ti+, mar, VWX whereBer neededA ame - WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW Age - X!A-8AY SeD M 2 X 8A-9A X 9A-:A X :A-abo5eY O++upation - Ser5ice ?'o5t"@ Ser5ice ?P5t"@ Business Se%f-emp%oyed Retired OrganiYation - WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW De.ignation ) WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW Annual "n+ome - Be%o0 6 %a1$ 6 M 8 %a1$ 8 M : %a1$ Abo5e : %a1$ 2- %hat are the "nBe.tment ABenue. aBailable in the mar,et/ that you are aware of? Posta% sc$emes ?i"e" M#SEPP2ENS*ER"DET"D etc"@ 'o5ernment securities Ban1 2DIs Direct e&uity in5estment Mutua% funds #nsurance 4- Are you aware of the fa+t that .ome of the performing Mutual fund .+heme. in the indu.try haBe po.ted 4;M Z annualiYed return. in la.t 2; year.? <es No 6- "n your point of Biew what i. more attra+tiBe about mutual fund.? Returns .ass%e free Moderate ris1 Past performance Ta4 benefits /e%% reu%ated No idea 8- "f you haBe inBe.ted in Mutual fund./ what per+entage of your entire inBe.tment in+lude. mutual fund.? Be%o0 !AB :A to GAB !A to :AB GAB abo5e 9- %hat were your SaBing.IinBe.tment aBenue. 9 year ba+,? Ban1 2D, Sa5ins #nsurance Mutua% funds )&uity mar1et 'o5t" securities Rea% estate Posta% sa5ins, 2D ;" ow/ what new aBenue. are in+luded in your "nBe.tment portfolio? 'o5t" securities Mutua% funds #nsurance Deri5ati5es )&uity mar1et Rea% estate :- How do you manage your inBe.tment portfolio? So%e%y of my o0n On ad5ise of a friend On ad5ise of a distributorEaent On ad5ise of your ban1er On ad5ice of mutua% fund $ouse peop%e 7- How do you rate the.e while ta,ing an inBe.tment de+i.ion? @Rate a. 2/4/6/8/9 a++ording to preferen+eA Returns Ris1 factors +oc1-in period past performance Ta4 benefits =- (ou belieBe in [ .i$ ris1, .i$ returns Moderate ris1, moderate returns +o0 ris1, %o0 returns 2;- HaBe you been eBer approa+hed by a Certified "nBe.tment Finan+ial 1lanner? <es No 22- %ould you li,e to undergo a finan+ial planning eDer+i.e for your.elf? <es No CHA1!ER 7 F"D"G/ RECOMMEDA!"O/ 0 COC#'S"O F"D"GS #n #ndia Mutua% fund #ndustry $as seen Dramatic impro5ements in Nua%ity as 0e%% as &ua%ity of products and ser5ices offerin o5er t$e past decade, but t$e industry $as 0itnessed ro0t$ in t$e %ast 6A years considerab%y be%o0 potentia%" T$e Asset under Manaement $a5e ro0n from about Rs" 9JA bi%%ion in marc$ 6HH8 to Rs" 6,:9A bi%%ion in Apri% !AA9?*A'R of 66"9 percent@ = no0 it ro0n to Rs" :,;!A bi%%ion ti%% sep !AAG" T$is $as main%y ac$ie5ed due to co%%ection t$rou$ mutua% fund #POIs t$at $as been increasin due to t$e in5estors fee%in t$at it is c$eaper in its #PO stae on account of its Rs" 6A NA(" T$ere $as been a stron appreciation in e&uities in comparison to t$e debt mar1et, 0$ic$ $as s$o0n a do0n0ard trend %ast year" And in turn Mid-cap and di5ersified funds $a5e de%i5ered t$e $i$est in comparison to ot$er funds" As t$e #ndian economy is s$o0in a ro0in trend 0it$ 'DP more t$an ;B and e4pected to s$o0 GB and #ndian $ouse$o%d sa5in bein !9B of t$e entire 'DP" T$ere is a stron ro0t$ potentia% of Mutua% fund industry in #ndia" #n Rajest$an i"e" rura% area it is sti%% a ne0 concept so it 0i%% ta1e some more time to rea%%y penetrate into t$is mar1et apart from peop%e 0$o are .N#Is t$ou$ t$ese peop%e are i5en more emp$asis by a%% t$e Mutua% funds and distribution c$anne%s" /it$ t$e introduction of S#PIs t$e industry $as created some options c%ear for retai% in5estors to enter t$is mar1et" My sur5ey says t$at it t$e a0areness %e5e% t$at is p%ayin actin as an obstac%e in t$e ro0t$ of Mutua% fund #ndustry in Rajest$an as a 0$o%e" Some of the MaKor Finding. 6" #t is found t$at .D2* is a fa5orab%e Mutua% 2und" !" T$e basis objecti5e be$ind in5estments are main%y %on-term capita% appreciation, current income = to some e4tent ta4 benefits" 8" T$e performance of .D2* *ore = Sate%%ite = .D2* Top !AA 2und is 5ery ood" 9" #t is seen t$at t$e in5estment in ro0t$ fund is 5ery $i$" Because t$e scope of income and capita% appreciation in t$e %on term" :" #t is obser5ed t$at t$e dri5in aspects of in5estments in mutua% fund are safety, fund performance, Ser5ice, +i&uidity, return = ta4 benefits" ;" T$e type of in5estment p%an t$at most in5estor s prefer is to et principa% safety at a%% time 0it$ %o0 returns rat$er t$an $i$ return 0it$ no safety" J" .D2* Mutua% 2und does not pro5ide Lmont$%y income sc$emeI 0$ic$ ot$er mutua% funds $a5e and performance is 5ery appreciab%e" G" 2und Manaers $a5e suested .D2* prudence ,.D2* Ta4sa5er , .D2* )&uity for in5estment , 2or t$e top :" H" .D2* Prudence is performin ood 0it$ comparition to t$e prudence fund of any ot$er mutua% fund $ouse" 6A" At t$is period of time 0$en mar1et condition is not so ood, it is better for in5estors to in5est t$rou$ Systamatic #n5estment p%an" /$ic$ reduces t$e mar1et ris1" RECOMMEDA!"O .D2* Mutua% 2und is one of t$e %arest mutua% funds and 0e%%-estab%is$ed fund $ouse in t$e country 0it$ consistent and abo5e a5erae fund performance across cateories since its incorporation on December 6A,6HHH"T$e sin%e most important factor t$at dri5es .D2* Mutua% 2und is its be%ief to i5e t$e in5estor t$e c$ance to profitab%y in5est in t$e financia% mar1et, 0it$out constant%y 0orryin about t$e mar1et s0ins"
Some maKor re+ommendation> 2A 2und manaers s$ou%d continuous #n5estor a0areness Prorams to ma1e t$e in5estors a0are of tec$nica%ities of fund manaement and t$e return aspects" 4A Aents, Ser5ice personne% must be ab%e to i5e correct and time%y information about NA( and t$e return on different sc$emes" 6A Mont$%y income sc$eme s$ou%d be introduced" 8A Sc$eme s$ou%d be offered as per t$e needs and t$e re&uirement of t$e industries" 9A T$e reu%atory norms pro5ided by t$e reu%atory aut$orities %i1e S)B# are re&uired to be 1no0n to a%% inc%udin in5estors"
COC#'S"O T$e %oba% financia% mar1et $as transformed from Se%%erIs mar1et to BuyerIs mar1et 0it$ %ibera%iFation, '%oba%iFations and pri5atiFation" T$e #ndian mutua% fund mar1et $as a%so become %oba% 0$en forein funds entered, t$ey came up 0it$ probab%y best mar1etin strateies to beat #ndian iants %i1e B#R+A, .D2*, and #*#*# $a5e come up 0it$ aressi5e strateies to beat t$e forein funds" No0 t$e cutt$roat competition oes on and on" .D2* Mutua% funds $a5e re0arded in5estors 0it$ $and some returns" T$e ood ne0s is t$at t$is is poised to become a trend" T$e mutua% funds $a5e strent$ened t$eir distribution net0or1s, become more transparent and in5estor friend%y and are re0ardin in5estors" T$e mutua% fund is fina%%y, pro5in itse%f as a 5e$ic%e of safety for in5estments" But it is sti%% t$e fund manaerIs in5estment p$i%osop$y t$at ma1es t$e difference bet0een t$e 0inner and t$e %osers"
*arefu% mar1et ana%ysis, consumer sementation, identification of in5estor needs, ser5ice desinin are to be carried out for t$e successfu% imp%ementation of different sc$emes by mutua% fund oraniFations" Reu%atory measures by S)B# s$ou%d be c%ear%y e4p%ained to t$e in5estors" Positionin of t$e sc$emes and t$eir brandin 0i%% $e%p a %ot for ro0t$ of t$e industry" *reati5ity and inno5ation are t$e means of mar1etin in t$e days to come for #ndian mutua% fund mar1et" *.APT)R H 5"5#"OGRA1H( 5"5#"OGRA1H(>) MAGAT"ES "D"A !ODA( 5'S"ESS %OR#D %E5 S"!ES %%%-HDFCF'D-COM $ttp:EE000"$dfcfund"comEAbout7sE $ttp:EE000"$dfcfund"comEProductsE %%%-AMF""D"A-COM $ttp:EE000"amfiindia"comEs$o0$tm%"aspCpaeQmfconceptSA $O'RA# "!O'CH M'!'A##(