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COMPARATIVE PERFORMANCE ANALYSIS BETWEEN

COMPARATIVE PERFORMANCE ANALYSIS BETWEEN
DSP BLACK ROCK
&
HDFC MUTUAL FUND

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    Arpit project Arpit project Document Transcript

    • COMPARATIVE PERFORMANCE ANALYSIS BETWEEN DSP BLACK ROCK & HDFC MUTUAL FUND &GUIDENCE BY:-SUBMITTED BY:-ASST. PROF. MR. MANISH SHRIVASTAVA ARPITGOSWAMI
    • ASST.PROF. MR. RAHUL PANDEYM.B.A. 1 ST SEMBTIRT COLLEGESAGAR (M.P. ACKNOWLEDGEMENTI take this opportunity to place on record my gratefulthanks and sincere gratitude to all those who gave mevaluable advice and input for my study. My study could not havebeen completed it I had not been able to get the referencematerials from the company. I express my sincere regards toAsst. Prof. Mr. Manish shrivastava and Asst. Prof. Mr.Rahul pandey for valuable support and guidance. Last but not least, I would alsolike to express. My thanks to my father and my otherfamily members who inspired me to put my best effort forthe project report. ARPIT GOSWAMI M.B.A. 1st SEM BTIRT COLLEGE SAGAR (M.P.)
    • DECLARATIONI Arpit Goswami s/o late Mr. P.G. Goswami , student ofM.B.A.(1ST SEM) hereby declare that the desertion entitledcomparative performance analysis between DSP Black rock& HDFC mutual fund is the outcome of my authentic workand same has not been submitted to any university, institutefor the declared of any degree or any professional diploma. ARPIT GOSWAMI M.B.A. 1st SEM BTIRT COLLEGE SAGAR (M.P.)
    • IntroductionDifferent investment avenues are available to investors. Mutual funds alsooffer good investment opportunities to the investors. Like all investments,they also carry certain risks. The investors should compare the risks andexpected yields after adjustment of tax on various instruments while takinginvestment decisions. The investors may seek advice from experts andconsultants including agents and distributors of mutual funds schemes whilemaking investment decisions.With an objective to make the investors aware of functioning of mutualfunds, an attempt has been made to provide information in question-answerformat which may help the investors in taking investment decisions.What is a Mutual Fund?Mutual fund is a mechanism for pooling the resources by issuing units to theinvestors and investing funds in securities in accordance with objectives asdisclosed in offer document.Investments in securities are spread across a wide cross-section of industriesand sectors and thus the risk is reduced. Diversification reduces the riskbecause all stocks may not move in the same direction in the sameproportion at the same time. Mutual fund issues units to the investors inaccordance with quantum of money invested by them. Investors of mutualfunds are known as unit holders.The profits or losses are shared by the investors in proportion to theirinvestments. The mutual funds normally come out with a number of schemeswith different investment objectives which are launched from time to time.A mutual fund is required to be registered with Securities and Exchange
    • Board of India (SEBI) which regulates securities markets before it cancollect funds from the public.What is the history of Mutual Funds inIndia and role of SEBI in mutual fundsindustry?Unit Trust of India was the first mutual fund set up in India in the year 1963.In early 1990s, Government allowed public sector banks and institutions toset up mutual funds.In the year 1992, Securities and exchange Board of India (SEBI) Act waspassed. The objectives of SEBI are – to protect the interest of investors insecurities and to promote the development of and to regulate the securitiesmarket.As far as mutual funds are concerned, SEBI formulates policies andregulates the mutual funds to protect the interest of the investors. SEBInotified regulations for the mutual funds in 1993. Thereafter, mutual fundssponsored by private sector entities were allowed to enter the capital market.The regulations were fully revised in 1996 and have been amended thereafterfrom time to time. SEBI has also issued guidelines to the mutual funds fromtime to time to protect the interests of investors.All mutual funds whether promoted by public sector or private sector entitiesincluding those promoted by foreign entities are governed by the same set ofRegulations. There is no distinction in regulatory requirements for thesemutual funds and all are subject to monitoring and inspections by SEBI. Therisks associated with the schemes launched by the mutual funds sponsoredby these entities are of similar type. It may be mentioned here that Unit Trustof India (UTI) is not registered with SEBI as a mutual fund (as on January15, 2002).
    • How is a mutual fund set up?A mutual fund is set up in the form of a trust, which has sponsor, trustees,asset Management Company (AMC) and custodian. The trust is establishedby a sponsor or more than one sponsor who is like promoter of a company.The trustees of the mutual fund hold its property for the benefit of the unitholders. Asset Management Company (AMC) approved by SEBI managesthe funds by making investments in various types of securities. Custodian,who is registered with SEBI, holds the securities of various schemes of thefund in its custody. The trustees are vested with the general power ofsuperintendence and direction over AMC. They monitor the performanceand compliance of SEBI Regulations by the mutual fund.SEBI Regulations require that at least two thirds of the directors of trusteecompany or board of trustees must be independent i.e. they should not beassociated with the sponsors. Also, 50% of the directors of AMC must beindependent. All mutual funds are required to be registered with SEBI beforethey launch any scheme. However, Unit Trust of India (UTI) is notregistered with SEBI (as on January 15, 2002).How to invest in a scheme of a mutual fund?Mutual funds normally come out with an advertisement in newspaperspublishing the date of launch of the new schemes. Investors can also contactthe agents and distributors of mutual funds who are spread all over thecountry for necessary information and application forms. Forms can bedeposited with mutual funds through the agents and distributors who providesuch services. Now a day, the post offices and banks also distribute the unitsof mutual funds. However, the investors may please note that the mutualfunds schemes being marketed by banks and post offices should not be takenas their own schemes and no assurance of returns is given by them. The only
    • role of banks and post offices is to help in distribution of mutual fundsschemes to the investors.Investors should not be carried away by commission/gifts given byagents/distributors for investing in a particular scheme. On the other handthey must consider the track record of the mutual fund and should takeobjective decisionsWhat is Net Asset Value (NAV) of a scheme?The performance of a particular scheme of a mutual fund is denoted by NetAsset Value (NAV).Mutual funds invest the money collected from the investors in securitiesmarkets. In simple words, Net Asset Value is the market value of thesecurities held by the scheme. Since market value of securities changesevery day, NAV of a scheme also varies on day to day basis. The NAV perunit is the market value of securities of a scheme divided by the total numberof units of the scheme on any particular date. For example, if the marketvalue of securities of a mutual fund scheme is Rs 200 lakhs and the mutualfund has issued 10 lakhs units of Rs. 10 each to the investors, then the NAVper unit of the fund is Rs.20. NAV is required to be disclosed by the mutualfunds on a regular basis - daily or weekly - depending on the type of scheme.What are the different types of mutual fundschemes?Schemes according to Maturity PeriodA mutual fund scheme can be classified into open-ended scheme or close-ended scheme depending on its maturity period.# Open-ended Fund/ SchemeAn open-ended fund or scheme is one that is available for subscription andrepurchase on a continuous basis. These schemes do not have a fixedmaturity period. Investors can conveniently buy and sell units at Net Asset
    • Value (NAV) related prices which are declared on a daily basis. The keyfeature of open-end schemes is liquidity.# Close-ended Fund/ SchemeA close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years.The fund is open for subscription only during a specified period at the timeof launch of the scheme. Investors can invest in the scheme at the time of theinitial public issue and thereafter they can buy or sell the units of the schemeon the stock exchanges where the units are listed. In order to provide an exitroute to the investors, some close-ended funds give an option of selling backthe units to the mutual fund through periodic repurchase at NAV relatedprices. SEBI Regulations stipulate that at least one of the two exit routes isprovided to the investor i.e. either repurchase facility or through listing onstock exchanges. These mutual funds schemes disclose NAV generally onweekly basis.# Schemes according to Investment ObjectiveA scheme can also be classified as growth scheme, income scheme, orbalanced scheme considering its investment objective. Such schemes may beopen-ended or close-ended schemes as described earlier. Such schemes maybe classified mainly as follows:# Growth / Equity Oriented SchemeThe aim of growth funds is to provide capital appreciation over the mediumto long- term. Such schemes normally invest a major part of their corpus inequities. Such funds have comparatively high risks. These schemes providedifferent options to the investors like dividend option, capital appreciation,etc. and the investors may choose an option depending on their preferences.The investors must indicate the option in the application form. The mutualfunds also allow the investors to change the options at a later date. Growth
    • schemes are good for investors having a long-term outlook seekingappreciation over a period of time.# Income / Debt Oriented SchemeThe aim of income funds is to provide regular and steady income toinvestors. Such schemes generally invest in fixed income securities such asbonds, corporate debentures, Government securities and money marketinstruments. Such funds are less risky compared to equity schemes. Thesefunds are not affected because of fluctuations in equity markets. However,opportunities of capital appreciation are also limited in such funds. TheNAVs of such funds are affected because of change in interest rates in thecountry. If the interest rates fall, NAVs of such funds are likely to increase inthe short run and vice versa. However, long term investors may not botherabout these fluctuations.# Balanced FundThe aim of balanced funds is to provide both growth and regular income assuch schemes invest both in equities and fixed income securities in theproportion indicated in their offer documents. These are appropriate forinvestors looking for moderate growth. They generally invest 40-60% inequity and debt instruments. These funds are also affected because offluctuations in share prices in the stock markets. However, NAVs of suchfunds are likely to be less volatile compared to pure equity funds.# Money Market or Liquid FundThese funds are also income funds and their aim is to provide easy liquidity,preservation of capital and moderate income. These schemes investexclusively in safer short-term instruments such as treasury bills, certificatesof deposit, commercial paper and inter-bank call money, government
    • securities, etc. Returns on these schemes fluctuate much less compared toother funds. These funds are appropriate for corporate and individualinvestors as a means to park their surplus funds for short periods.# Gilt FundThese funds invest exclusively in government securities. Governmentsecurities have no default risk. NAVs of these schemes also fluctuate due tochange in interest rates and other economic factors as is the case withincome or debt oriented schemes.# What are sector specific funds/schemes?These are the funds/schemes which invest in the securities of only thosesectors or industries as specified in the offer documents. e.g.Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG),Petroleum stocks, etc. The returns in these funds are dependent on theperformance of the respective sectors/industries. While these funds may givehigher returns, they are more risky compared to diversified funds. Investorsneed to keep a watch on the performance of those sectors/industries andmust exit at an appropriate time. They may also seek advice of an expert.# What are Tax Saving Schemes?These schemes offer tax rebates to the investors under specific provisions ofthe Income Tax Act, 1961 as the Government offers tax incentives forinvestment in specified avenues. e.g. Equity Linked Savings Schemes
    • (ELSS). Pension schemes launched by the mutual funds also offer taxbenefits. These schemes are growth oriented and invest pre-dominantly inequities. Their growth opportunities and risks associated are like any equity-oriented scheme.# What is a sale or repurchase/redemptionprice?The price or NAV a unit holder is charged while investing in an open-endedscheme is called sales price. It may include sales load, if applicable.Repurchase or redemption price is the price or NAV at which an open-endedscheme purchases or redeems its units from the unit holders. It may includeexit load, if applicable.# What is an assured return scheme?Assured return schemes are those schemes that assure a specific return to theunit holders irrespective of performance of the scheme.A scheme cannot promise returns unless such returns are fully guaranteed bythe sponsor or AMC and this is required to be disclosed in the offerdocument.Investors should carefully read the offer document whether return is assuredfor the entire period of the scheme or only for a certain period. Someschemes assure returns one year at a time and they review and change it atthe beginning of the next year.
    • # Major companies of mutual fundsThe major fund houses which have operated in India are as follows – 1. Birla sunlife 2. Bank of Baroda 3. HDFC mutual fund 4. ING Vysya 5. ICICI prudential 6. SBI mutual fund 7. Tata 8. Kotak mahindra 9. Unit trust of India 10.Reliance mutual fund 11.IDFC 12.Sundram mutual fund 13.Religare mutual fund 14.Principal mutual fund 15.DSP Black rockIntroduction of DSP Black rock mutual fundDSP Black Rock Investment Managers Pvt. Ltd. is a joint venture betweenthe DSP Group and Black Rock Inc. The DSP Group, with a track record ofover 145 years, is one of the oldest financial services firms in India. BlackRock is the largest listed asset management company in the world, and a
    • premier provider of investment management, risk management and advisoryservices to institutional, intermediary and individual investors around theworld.Black Rock today has a major presence in most key markets across theUnited States, Europe, Asia and Australia and has a deep understanding oflocal markets around the world.DSP Black Rock Investment Managers aims at investment excellence withinthe framework of transparent but rigorous risk controls. The team in India iswell supported by Black Rock’s Risk and Quantitative Analysis Group,which is a global team that supports investment managers across assetclasses, styles and markets.View/ belief of DSP black rockThe foundation of our business lies in our belief that our investors’ needs areof paramount importance and that our sole business is managing assets ontheir behalf. Our commitment to investment excellence is anchored in ashared culture that always places the interests of investors first, fromindividuals to institutions. We believe in always acting as a fiduciary for ourinvestors and our steadfast integrity has helped us earn their long-term trust.Company profile of DSP Black rockCompany name - DSP Black rockType - Privately heldCompany size - 201-500 employeesWeb site - http://www.dspblackrock.com
    • Industry - Financial servicesHeadquarter - 10th floor, mafatlal center narima point Mumbai Maharashtra 400021 IndiaProducts or funds of DSP Black rockDSP Black rock are providing 23 types of product or mutual funds in theIndian mutual fund market according to there Boucher and these are as :- 1. DSP Black rock liquidity fund 2. DSP Black rock floating rate fund 3. DSP Black rock money manager fund 4. DSP Black rock short term fund 5. DSP Black rock bond fund 6. DSP Black rock strategic bond fund 7. DSP Black rock government securities fund 8. DSP Black rock treasury bill fund 9. DSP Black rock cash manager fund 10.DSP Black rock savings manager fund-conservative 11.DSP Black rock manager fund-moderate 12.DSP Black rock manager fund –aggressive 13.DSP Black rock balanced fund 14. DSP Black rock equity fund 15. DSP Black rock top 100 equity fund 16. DSP Black rock opportunities fund 17. DSP Black rock technology.com fund 18.DSP Black rock India TIGER fund (THE INFRASTRUCTURE GROWTH AND ECONOMIC REFORMS FUND) 19.DSP Black rock small and midcap fund 20.DSP Black rock tax saver fund
    • 21. DSP Black rock world gold fund 22.DSP Black rock natural resources and new energy fund 23.DSP Black rock world energy fundDescription of some products or funds  DSP black rock government securities fundInvestment objective An open ended income scheme seeking to generate income through investment in central government securities of various maturitiesAsset allocation Types of instrument Normal allocationpattern of scheme 1. central government (% OF Net assets) securities repos/reverse repos in central govt. 80%-100% securities as may be permitted by RBI 2. Call money market or alternative investment for call money market as 0%-20% may be provided by the RBI.Plans and option *Growth *dividend *monthly dividend -payout dividend -payout dividend -reinvest dividend –reinvest dividendMinimum purchase Additional purchaseapplication amt. 5000/- 1000/-
    • Systematic Rs 1000/- weekly, monthly, and quarterly optionsinvestment plan(SIP) are available.Systematic Rs 1000/- weekly, monthly, and quarterly optionswithdrawal are available.plan(SWP)Name of the fund Mr. Dhawal dalalmanager  DSP Black rock Top100 equity fundInvestment objective An open ended growth scheme, seeking to generate capital appreciation from a port folio that is substantially constituted of equity securities and equity related securities of the 100 largest corporates by market capitalization listed in IndiaAsset allocation pattern Types of instrument Normal allocationof scheme 1.equity and equity (%of net assets) related securities 90%-100% 2.debt securitized debt 0%-10% and money market securitiesPlans and option Regular plan Institutional plan *growth *dividend *growth *dividend -pay out dividend -pay out dividend -reinvest dividend -reinvest dividendMinimum application Purchase Additionalamt. purchase Regular plan Rs 5000 Rs 1000 Institutional Rs 5 crore Rs 1000 plan
    • Systematic investment Rs 1000/- weekly, monthly, and quarterlyplan(SIP) options are available.(only in regular plan)Systematic withdrawal Rs 1000/- weekly, monthly, and quarterlyplan(SWP) options are available.Name of the fund Apoorva shahmanager  DSP Black rock balanced fundInvestment objective An open ended balanced scheme, seeking to generate long term capital appreciation and current income from a portfolio constituted of equity and equity related securities as well as fixed income securities(debt and money market securities)Asset allocation pattern Types of instrument Normal allocationof scheme 1.equity and equity (%of net assets) related securities 65%-75% 2.debt securities debt 25%-35% and money market securitiesPlans and option Plans: none option: growth *dividend -payout -reinvest
    • Minimum application Purchase Additional purchaseamt. Rs 5000 Rs 1000Systematic investment Rs 1000/- weekly, monthly, and quarterlyplan(SIP) options are available.Systematic withdrawal Rs 1000/- weekly, monthly, and quarterlyplan(SWP) options are available.Name of the fund Apoorva shahmanagerIntroduction of HDFC mutual fundsHDFC assets management company Ltd (AMC) was incorporated under thecompanies act 1956 on December 10, 1999 and was approved to act as an(AMC)for the HDFC mutual fund by SEBI vide its letter dated July 3, 2000In the term of the investment management agreement the trustee hasappointed the HDFC assets managememt company limited to manage themutual fund.Registered office of the assets management company (AMC) is situated atRamón house 3rd flour, H.T. Parikh marg 169 Back Bay reclamation,charchgate Mumbai 400020Company profile of HDFC mutual fundCompany name - HDFC Mutual fund
    • Type - Privately heldCompany size - 501-1000 employeesWeb site - http://www.hdfcfund.comFounded - 1999Headquarter - Ramón house 3rd flour, H.T. Parikh marg Parikh marg 169 Black bay reclamation Charchgate Mumbai 400020Products of funds of HDFC mutual fundHDFC mutual funds are providing 16 products or funds according to thebrochure of that company in the Indian mutual fund market these funds areas :- 1. HDFC Growth fund (HGF) 2. HDFC equity fund (HEF) 3. HDFC Top 200 fund (HT 200) 4. HDFC Capital builder fund (HCBF) 5. HDFC Core and satellite fund (HCSF) 6. HDFC Premier multi-cap fund (HDMCF) 7. HDFC Mid-cap opportunities fund (HMCOF) 8. HDFC Long term equity fund 9. HDFC Infrastructure fund 10.HDFC Arbitrage fund (HAF) 11.HDFC Balanced fund (HDF) 12.HDFC Prudence fund (HPF) 13.HDFC Long term advantage fund (HLTAF)
    • 14.HDFC Tax saver (HTS) 15.HDFC Index fund (HIF) 16. HDFC MF Monthly income plan (HMIP)Description of products or fundsHDFC Growth fund (HGF)Investment objective To generate long term capital appreciation from a portfolio that is invested predominantly in equity and equity related instrumentAsset allocation pattern Types of instrument Normal allocationof scheme 1. Equity and equity related (%net assets) instrument. 80-100 2. Debt securities, money 0-20 market instrument and cash (including CBLO/reverse repo.)Plans and option Plans: none option: growth *dividend -payout -reinvest
    • Minimum application Purchase Additional purchaseamt. Rs 5000/- Rs 1000/-Systematic investment Please refer page no.22 for details of (SIP)plan(SIP)Systematic withdrawal Please refer page no.22 for details of (SWP)plan(SWP)Name of the fund Mr. Srinivas Rao RavarimanagerHDFC Top 200 funds (HT 200)Investment To generate long term capital appreciation from aobjective portfolio of equity and equity – linked instrument primarily drawn from the companies in BSE 200 IndexAsset allocation Types of Normal allocationpattern of scheme instrument 1. Equity & equity (%of net assets) linked instrument. Up to 100%(including use of 2. # Debt and derivatives for hedging & money instruments. permitted by prevailing by #Investment in SEBI regulation) securitized debt. If undertaken would not exceed 20%of the net assets of the scheme.
    • Plans & options Plans- Nil option – Growth & Dividend - Payout - reinvestMinimum Purchase Additional purchaseapplication amt. Rs 5000/- Rs 1000/-Systematic Please refer page no.22 for details of (SIP)investmentplan(SIP)Systematic Please refer page no.22 for details of (SWP)withdrawalplan(SWP)Name of the fund Mr. Prashant JainmanagerDescription of dividend policy of HDFC(SWP)There is no assurance or guarantee to unit holder as to the rate of dividenddistribution nor that dividends will be paid regularly. On payment ofdividends ,the NAV will stand reduced by the amount of dividend anddividend tax (if applicable) paid.Description of Systematic investmentplan(SIP)
    • The first account statement under SIP/STP shall be issued within 10 businessdays of the initial investment the account statement will be dispatched onceevery quarter ending march, june, September, and December within 10business days of the end of the quarter.Findings in project:- • DSP black rock are providing 23 schemes or funds to the customer but HDFC mutual are providing 16 types of funds according to the brochure of both the companies. • Services of DSP black rock are much better then the HDFC mutual fund like systematic investment plan(SIP). • DSP black rock are providing both type of plan like regular and institutional plan in most of the product or fund but HDFC mutual fund are providing these plans only in few funds • In DSP black rock systematic withdrawal plan(SWP)are very easy and also easily available but in HDFC mutual fund this is complicated. • In these funds or schemes HDFC are not providing both type of plan to the public they are providing wholesale or retail plan only in few schemes.
    • • HDFC are providing systematic investment plan(SIP)or systematic withdrawal plan(SWP) only quarterly. • Minimum application amount Rs5000 for HDFC plans or additional purchase Rs1000. • Name of the fund manager Mr. Prashant Jain and Srinivas Rao RESEARCH METHODOLOGYPrimary Source:- Primary data have been collectedthrough the CAMS agency of mutual fund.Secondary source:-
    • Secondary data have been collectedfrom the journals, magazines or brochures of both thecompanies or world wide web. BIBLIOGRAPHY  WWW.GOOGLE.COM  WIKIPEDIA  WWW.DSPBLACK.COM  WWW.HDFC.COM
    • THANK YOU !!!!!!!!