RESEARCH PROJECT REPORT
A STUDY ON THE ANALYSIS OF MUTUAL FUND &
PRODUCT MARKETING INCLUDING MICROMARKETING
Submitted to Mahamaya Technical University (Noida)
In the partial fulfillment of the requirement for the award of
MASTER OF BUSINESS ADMINISTRATION
Under the supervision of Submitted By:
Dr Prachi Nagar, Sana Fatima
(Professor) IAMR MBA (2012-14)
INSTITUTE OF ADVANCED MANAGEMENT AND
MILESTONE DELHI MEERUT ROAD,
PROJECT REPORT ON
“A STUDY ON THE ANALYSIS OF MUTUAL FUND & PRODUCT
MARKETING INCLUDING MICROMARKETING”
MAHAMAYA TECHNICAL UNIVERSITY
In the partial fulfillment of
Master of Business Administration
In the supervision of Presented By:
DR. PRACHI NAGAR SANA FATIMA
IAMR SESSION 20012-14,
INSTITUTE OF ADVANCED MANAGEMENT AND
To complete this operational workout report I received help from many sources which
need to mention here specially.
I am very thankful to Mr. Nikhil Kumar Branch Head Dsp blackrock mutual fund Patna
for giving me an opportunity in getting exposure of functional expect and practical experience
of the Organization.
I express my heartiest gratitude to Mr. Shinjan Bose (Sr. Relationship Manager) dsp
blackrock mutual fund Patna who as my organizational guide extended a helping hand and
careful supervision in making this project report reality.
Last but not the least I am very obliged to the management and staff members of Dsp
blackrock mutual fund ,Patna, Who co-operated with me, devoting there valuable time for
working and preparing this project report and I cannot forget my class friends.
With Best Regard
For a student of professional course like MBA the significance of the
practical knowledge gained through the survey training is enormous. It is during
this period that one gets an opportunity to know how the market works in the
So, keeping in this mind I joined a leading financial sector like DSP
BLACKROCK MUTUAL FUND LTD, for my summer training programme. I was
assigned to study about Mutual Funds Investments.
I have tried my best to find out all the relevant information and analyze it
to the best of my ability.
The title of my project is "Analysis of Mutual fund & Product marketing including
micromarketing.” is going to be proved useful for the organization, as well as for me not
only in theoretical aspects but also in pragmatic aspects. The current mutual fund
industry in India is proving to be a limelight for every organization concerned.
Being a part of mutual fund industry Dsp blackrock mutual fund through
its channel partners is moving towards higher level of performance that is measurable
through various relevant formations.
This project aims at analyzing the mutual industry with special reference to DSP BLACK
ROCK. It acts as a guide to know the present status of mutual fund and its due
importance. Compatibility in terms of various marketing tools used to analyze mutual
fund and to know the customer perception and relative market share and growth with
the help of the project.
Executive Summary 06
1) Introduction 07-24
2) About Mutual Fund 25-45
History of Mutual Fund
Benefits of Mutual Fund
Drawbacks of Mutual Fund
Entities Involved in Organizing Mutual Fund
Types of Mutual Fund
Net Asset Value (NAV)
3) Objective 46
3) Methodology 46- 57
5) About HDFC Mutual fund 58-63
Why HDFC Mutual Fund?
Systematic Investment Plan (SIP)
6) Top Mutual Fund 64-66
Top 10 Mutual Fund In Each Category
Top 10 Mutual Fund (Open Ended)
Top 10 Mutual Fund (Close Ended)
7) Limitation 67
8) Finding 68
9) Suggestions 69
10) Bibliography 70
The DSP Group, headed by Mr. Hemendra Kothari, is one of the oldest
financial services firms in India. It has a track record of over 145 years and
was one of the founding members of the Bombay Stock Exchange.
BlackRock is the largest listed asset management company in the world. It
is a premier provider of investment solutions through a variety of product
structures, including individual and institutional separate accounts,
mutual funds and other pooled investment vehicles, and the industry-
leading iShares® ETFs to investors around the world. BlackRock is a truly
global firm that combines the benefits of worldwide reach with local
service and relationships. It has a deep presence in every major capital
market in the world, which results in greater insights into increasingly
interconnected financial markets. Managing assets for investors in North
and South America, Europe, Asia, Australia, the Middle East and Africa, the
firm today employs more than 9,300 talented professionals and maintains
offices in 26 countries around the world. BlackRock’s investor base
includes corporate, public, union and industry pension plans;
governments; insurance companies; third-party mutual funds;
endowments; foundations; charities; corporations; official institutions;
sovereign wealth funds; banks; financial professionals; and individuals
With our three-dimensional approach to managing the organization, we
• Ensure consistency on a global basis;
• Allow for the tailoring of products and services according to client or
• Promote teamwork among our employees worldwide; and
• Facilitate operational integrity and efficiency
Title: - Analysis of Mutual fund, Product marketing Micro Marketing
Consist of Analysis of Mutual funds Market, Its portfolio and Various
ABOUT DSB BLACK ROCK
• DSP Black Rock Investment Managers Pvt. Ltd. is the investment manager
to DSP Black Rock Mutual Fund.
• The philosophy of DSP Black Rock Investment Managers Pvt. Ltd. has been
grounded in the belief that experienced investment professionals, using a
disciplined process and sophisticated analytical tools, can consistently add
value to client portfolios.
• DSP Black Rock Investment Managers Pvt. Ltd. takes a three
dimensional approach to the management of the organization,
incorporating functional, product and regional elements in support of
clients' goals. The functional dimension looks at the company's operations
by specific task, such as account management or operations. The product
dimension brings together the cross-disciplinary expertise critical to
managing client assets in each class. Finally, the regional aspect of the
company's model recognizes the unique, geography-specific needs of
clients as well as the importance of local regulatory issues.
ABOUT BLACKROCK GROUP
Black Rock, Inc. is a U.S. based multinational investment management
corporation based in New York City. As the world's largest asset manager, Black
Rock is a leading provider of investment, advisory and risk management
solutions. The company acquired Barclays Global Investors in December 2009,
solidifying its position as the largest investment manager in the world. As of
September 30, 2012, Black Rock had $3.67 trillion in assets under management.
Founded in 1988, initially as a risk management and fixed income institutional
asset manager, Black Rock has evolved into the world's most respected and
prudent fiduciary. According to Ralph Schlosstein, CEO of Evercore Partners, a
New York-based investment bank: “Black Rock is the most influential financial
institutions in the world”.
BLACKROCK MUTUAL FUND
Revenue US$ 9.08 billion (2011)
Net income US$ 2.239 billion (2011)
AUM US$ 3.792 trillion (2012)
Total assets US$ 178.4 billion (2010)
Total equity US$ 24.3 billion (2009)
Employees 10,100 (2011)
DSP BLACK ROCK mission is to be a leading, global, client-focused,
innovative and low-cost provider of financial services through the distribution
channels of the client’s preference in markets to create value.
BLACK ROCK GROUP FINANCIAL HIGHLIGHTS
New York, January 19, 2012 — BlackRock, Inc. (NYSE:BLK) today reported
full year diluted EPS of $12.37, up 17% from 2010. Fourth quarter 2011
net income(1) of $555 million was down 7% from third quarter 2011 and
16% from a
year ago. Operating income for the fourth quarter and full year 2011 was
$808 million and $3.2 billion, respectively.
The full year 2011 operating margin was 35.8%. In the fourth quarter,
BlackRock repurchased approximately 618,000 shares. As adjusted(2)
results. Full year 2011 operating income of $3.4 billion improved $225
million, or 7%, and diluted EPS of
$11.85 improved 8% compared with 2010. Fourth quarter diluted EPS was
$3.06,including operating income of $3.14 per diluted share and net non-
operating expense of $0.08 per diluted share. Operating margin was 39.7%
for full year 2011, an improvement compared with 2010. Fourth quarter
2011 results include restructuring charges (not included in as adjusted
results) of $32 million related to a 3.4% reduction in the fourth quarter
work force. For the full year, BlackRock continued to make investments in
focus areas, which is reflected in the net addition of over 900 employees
during the year. “We finished 2011 with solid annual revenue and
earnings growth despite challenging market conditions, particularly in
the second half of the year,” said Laurence D. Fink, Chairman and CEO of
BlackRock. “Our results reinforce the underlying strength and momentum
of our diversified client-focused model. Our mix of businesses, together
with unparalleled risk management capabilities and a sharp focus on
execution, have allowed us to deliver strong results through highly
challenging market cycles. This momentum was reflected in the fourth
quarter as we generated net inflows of $23.8 billion in long term net new
business. In addition, with the investments made over the course of 2011,
we remain well positioned to execute against key themes driving our
industry in the coming years.” Assets under management (“AUM”) closed
the quarter at $3.513 trillion, up 5% since third quarter-end and down 1%
since year-end 2010. Results reflected strong inflows of $23.8 billion in
long-term products (equity, fixed income, multiasset class and alternative
investments) and a $143.3 billion improvement in market and investment
performance. Total net inflows of $24.6 billion included $10.9 billion of
inflows in cash management largely offset by $10.1 billion of planned
distributions in our advisory business. For the year, we recorded $67.3
billion of long-term net new business, before giving effect to the final BGI
merger-related outflows of $28.3 billion recorded in the first half of the
BOARD OF DIRECTORS
Laurence Fink Chairman
Laurence Fink CEO
Robert Kapito President
Kendrick R. Wilson, Vice President
Philipp Hildebrand Vice President
Charles Hallac Director
Gary Shedlin Director
Bennett W. Golub Director
Robert W. Fairbairn Director
COMPARATIVE BUSINESS FIGURES
AUM $3,512,61 $3,560968 1% $3,345,067 5%
$227 $2493 11% $2,225 0%
$808 $940 14% $777 4%
Net income $555 $657 16% $595 7%
Diluted EPS $3.05 $3.35 9% $3.23 6%
CORPORATE SOCIAL RESPONSIBILITY
Our Chairman, Hemendra Kothari, has always been a passionate wildlife enthusiast. His
enthusiasm towards wildlife led him to set up the Wildlife Conservation Trust (WCT), a few
years after he sold his financial services company to Merrill Lynch (now Bank of America).
WCT is a Mumbai-based registered public charitable trust dedicated and committed to the
preservation, protection and conservation of wildlife across India. WCT collaborates with
NGOs and aligns itself with the government to problem-solve for the many stakeholders
involved in saving India's forests and wild animals. Further, it helps fund NGOs that are
actively involved in health and education initiatives around national parks and makes
communities that reside in forest areas aware of the importance of India's jungles.
Another important aspect of WCT's interventions are the 'WCT Wildlife Service Awards'
which were introduced to motivate the forest staff along with associated agencies such as
the judiciary, police department and eco-development committees who work closely with
the Forest Department to curtail man-animal conflict, forest degradation and poaching.
WCT has been conducting consultations and workshops on various threads of wildlife
conservation involving forest officials, wildlife biologists, conservation NGOs, researchers,
wild lifers, corporates, writers and film-makers. It is the organisation's belief that by working
in unison, the country can help find solutions to the many problems confronting India's
wildlife and forests.
BLACK ROCK FOUNDATION
In 1988, Larry Fink and Robert S. Kapito left First Boston to found a company that would
provide clients with asset management services from a risk management perspective.
Initially, BlackRock was under the umbrella of The Blackstone Group and was called
Blackstone Financial Management.
Fink joined Blackstone in 1988 as a partner, along with Kapito, Ralph Schlosstein, Bennett
Golub, Barbara Novick, Susan Wagner, Keith Anderson and Hugh Frater. Before joining
Blackstone, Fink, Kapito, Golub and Novick worked together at First Boston. As Managing
Director at First Boston, Fink and his team pioneered the mortgage-backed securitiesmarket
in the United States.
Blackstone Financial Management changed its name to BlackRock Financial Management a
few years later to mitigate potential confusion with other Blackstone Group affiliates and to
reduce the need for certain corporate governance restrictions that had been placed on it by
The Blackstone Group.
The BlackRock team spun out of Blackstone and became an independent financial services
firm. Fink cut a deal with the PNC Financial Services Group when they purchased 70% of
BlackRock. Subsequently, PNC contributed a number of its other asset management
subsidiaries into Black Rock which then consolidated the various entities into an integrated
asset management firm. In 1999, with $165 billion in assets under management, the firm
went public although PNC remained its dominant shareholder.
On June 17, 2002, BlackRock Virginia Municipal Bond Trust declared the Trusts' first
monthly dividends, payable on July 1, 2002, for shareholders of record as of June 26, 2002. .
BlackRock grew organically, through lift-outs and their first acquisition was on January 28,
2005 when they purchased State Street Research Management, a mutual-fund business that
had previously been owned by MetLife. This acquisition added a sizable equity business to
BlackRock's funds. On September 29, 2006, BlackRock completed its merger with Merrill
Lynch Investment Managers (MLIM), halving PNC's ownership and giving Merrill Lynch a
49.5-percent stake in the company. On October 1, 2007, BlackRock acquired the fund-of-
funds business of Quellos Capital Management. On April 30, 2009, BlackRock hired 43
employees from R3 Capital Management, LLC and took control of the $1.5 billion fund.
BlackRock Financial Management Inc. has been retained by the New York Fed to manage
and eventually liquidate the assets held in a newly formed Delaware limited liability
company (LLC) to fund the purchase of residential mortgage-backed securities(RMBS) from
the securities lending portfolio of several regulated U.S. insurance subsidiaries of AIG.
In December 2009, the company acquired Barclays Global Investors (BGI), giving it control
of the iShares system. The division formerly branded BGI is headquartered in San
Francisco, and also has research and portfolio management teams
in London,Sydney, Tokyo, Toronto and other cities, as well as client service offices in
several additional major financial centers in North America, Europe and Asia.
After the close of trading, on Friday, April 1, 2011, BlackRock (NYSE:BLK)
replaced Genzyme (NASDAQ:GENZ) on the S&P 500 index.
In October 2012, BlackRock bought a stake in the Moscow Exchange (MICEX-RTS) from
Russia's state-backed private equity fund ahead of its expected IPO.
What is BLACK ROCK?
Wouldn't you want to be a part of a brand that enjoys a unique, strategic positioning in the
Indian and the International market? Black rock is a major global financial services
company that ranks 13th in the Fortune 500 list, operating in over 50 countries with over
120000 employees worldwide. It is the only MNC bank in India with a strong established
retail presence through Black rock, and is fully poised to be a part of the growth potential
of the Indian Banking Industry.
In India it has an established track record of over 75 years and enjoys the goodwill and
loyalty of over 1.5 million customers in India. We are sure you will be excited at the
prospect of being part of an organization, which has the best of both the worlds: Access to
global expertise blended with a deep knowledge and understanding of the local market.
Black rock is looking for top talent. But why should you choose us above other
companies? The answer is one word: Diversity. No other Bank offers the diversity of
growth opportunities and cultures that you'll find at DSP BLACKROCK MUTUAL FUND.
Another attraction of Black rock is the opportunity for lifelong learning. We have an
aggressive and fast paced career development for our employees through on the job and
Leadership Programs followed by an excellent Performance Management System.
Our boundary-less environment also supports "horizontal learning." Through Dsp
blackrock mutual fund's professional communities and various forums, people talk to
each other and share knowledge in the Bank.
History of Mutual Fund
• The mutual fund industry in India started in 1963 with the formation of Unit Trust of
India, at the initiative of the Government of India and Reserve Bank the. The history of
mutual funds in India can be broadly divided into four distinct phases:
• First Phase – 1964-87
• An Act of Parliament established Unit Trust of India (UTI) on 1963. It was set up by the
Reserve Bank of India and functioned under the Regulatory and administrative control
of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial
Development Bank of India (IDBI) took over the regulatory and administrative control
in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of
1988 UTI had Rs.6,700 crores of assets under management.
• Second Phase – 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non- UTI, public sector mutual funds set up by public sector
banks and Life Insurance Corporation of India (LIC) and General Insurance
Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund
established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab National
Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90),
Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989
while GIC had set up its mutual fund in December 1990. At the end of 1993, the mutual
fund industry had assets under management of Rs.47,004 crores.
Third Phase – 1993-2003 (Entry of Private Sector Funds)
With the entry of private sector funds in 1993, a new era started in the Indian
Mutual fund industry, giving the Indian investors a wider choice of fund families.
Also, 1993 was the year in which the first Mutual Fund Regulations came into being,
Under which all mutual funds, except UTI were to be registered and governed. The
Erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first
Private sector mutual fund registered in July 1993.
• The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive
and revised Mutual Fund Regulations in 1996. The industry now functions under the
SEBI (Mutual Fund) Regulations 1996.
• The number of mutual fund houses went on increasing, with many foreign mutual
funds setting up funds in India and also the industry has witnessed several mergers
and acquisitions. As at the end of January 2003, there were 33 mutual funds with total
assets of Rs. 1, 21, 805 crores. The Unit Trust of India with Rs.44,541 crores of assets
under management was way ahead of other mutual funds.
• Fourth Phase – since February 2003
• In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust
of India with assets under management of Rs.29,835 crores as at the end of January
2003, representing broadly, the assets of US 64 scheme, assured return and certain
other schemes. The Specified Undertaking of Unit Trust of India, functioning under an
administrator and under the rules framed by Government of India and does not come
under the purview of the Mutual Fund Regulations.
• The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores
of assets under management and with the setting up of a UTI Mutual Fund, conforming
to the SEBI Mutual Fund Regulations, and with recent mergers taking place among
different private sector funds, the mutual fund industry has entered its current phase
of consolidation and growth. As at the end of October 31, 2003, there were 31 funds,
which manage assets of Rs.126726 crores.
One can say that the industry is moving from infancy to adolescence, the industry is
maturing and the investors and funds are frankly and openly discussing difficulties
opportunities and compulsions.
About Mutual Fund
What is a mutual fund?
: - A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities.
Thus a Mutual Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed basket of securities at a
relatively low cost. The flow chart below describes broadly the working of a mutual fund:
As of early 2008, the worldwide value of all mutual funds totals more than $26
There are predominantly two ways in order to make investment in Mutual Fund.
1) SIP (Systematic investment plan)
2) Lump sum (One Time)
SIP :- SIP allow the investor to invest in Mutual fund as a recurring basic, means they
can systematically like monthly, quarterly and half yearly a certain amount of money
invest in Mutual Fund. This plan option of investment basically beneficial for those
employees who set their salary on monthly basis.
Lump sum:- This mode of investment allow investor to invest their money at a
onetime like fixed deposit in bank.
Entities Involved in Organizing Mutual Fund
Unit Holders: - The investors who buy the unit of a mutual fund is called unit holders.
Sponsors: - Person or a body who set up or form the trust.
Appoints board of trustees.
Qualification of AMC Custodian.
Hands over trust deed to trustees.
Trustees: - There can be Trustee Company.
Investments are hold by the trustees.
Right to dismiss AMCs.
Reserves fees for services.
AMCs: - AMCs are the fund manager.
Should have a net worth of Rs 10 Cr all the time.
Most company with SEBI regulations.
Mutual Fund: - A mechanism for pooling the resources by issuing units to the
Investors and investing funds in securities in accordance with the
Objectives disclosed in after documents.
Transfer Agent: - Issue and redeem the units and other related services such as
preparation of transfer documents and updating investor’s records.
Distributers: - Appointed by AMC and may act on behalf of different funds.
Custodians:- Appointed by board of trustees for safe keeping of securities as
independent entity of sponsors investment for the common man as it
after an opportunity to invest in a professionally managed basket of
securities at a relatively low cost. The flow chart below describes broadly
the working of a mutual fund.
Mutual fund Operation Flow Chart
There are many entities involved and the diagram below illustrates the organizational
setup of the Mutual Fund.
Unit Holder is investors who buy the unit of a mutual fund, Sponsors is who set up or
form the trust, Appoints board of trustees, Qualification of AMC Custodian, Hands over
trust deed to trustees. Trustees can be Trustee Company; Investments are hold by the
trustees, Right to dismiss AMCs, and Reserves fees for services. AMCs are the fund
manager. It should have a net worth of Rs 10 Cr all the time. Most company with SEBI
regulations. Transfer Agent issue and redeem the units and other related services such
as preparation of transfer documents and updating investor’s records and Distributers
appointed by AMC and may act on behalf of different funds, Custodians appointed by
board of trustees for safe keeping of securities as independent entity of sponsors
investment for the common man as it after an opportunity to invest in a professionally
managed basket of securities at a relatively low cost.
Benefits of Mutual Fund
Professional Management Mutual Funds provide the services of experienced and skilled
professionals, backed by a dedicated investment research team that analyses the performance
and prospects of companies and selects suitable investments to achieve the objectives of the
• Diversification: Mutual Funds invest in a number of companies across a broad cross-
section of industries and sectors. This diversification reduces the risk because seldom
do all stocks decline at the same time and in the same proportion. You achieve this
The Mutual Fund Transfer Agent
diversification through a Mutual Fund with far less money than you can do on your
• Convenient Administration: Investing in a Mutual Fund reduces paperwork and helps
you avoid many problems such as bad deliveries, delayed payments and follow up with
brokers and companies. Mutual Funds save your time and make investing easy and
• Return Potential: Over a medium to long-term, Mutual Funds have the potential to
provide a higher return as they invest in a diversified basket of selected securities. This
can be said substantially as various schemes of SBI has outperformed market in the
matter of returns as they have provided returns to the tune of 100 %(SBI Magnum
• Low Costs: Mutual Funds are a relatively less expensive way to invest compared to
directly investing in the capital markets because the benefits of scale in brokerage,
custodial and other fees translate into lower costs for investors.
• Liquidity: In open-end schemes, the investor gets the money back promptly at net
asset value related prices from the Mutual Fund. In closed-end schemes, the units
can be sold on a stock exchange at the prevailing market price or the investor can avail
of the facility of direct repurchase at NAV related prices by the Mutual Fund.
• Transparency: An investor gets regular information on the value of his/her investment
in addition to disclosure on the specific investments made by him/her in the scheme,
the proportion invested in each class of assets and the fund manager's investment
strategy and outlook.
• Flexibility: Through features such as regular investment plans, regular withdrawal
plans and dividend reinvestment plans, you can systematically invest or withdraw
funds according to your needs and convenience.
• Affordability: Investors individually may lack sufficient funds to invest in high-grade
stocks. A mutual fund because of its large corpus allows even a small investor to take
the benefit of its investment strategy as all investors weather big or small will be
• Choice of Schemes: Mutual Funds offers a family of schemes to suit your varying needs
over a lifetime. An investor can choose from among a number of schemes whichever
suit his or her need.
Drawbacks of Mutual Fund
Mutual funds have their drawbacks and may not be for everyone:
• No Guarantees: No investment is risk free. If the entire stock market declines in value,
the value of mutual fund shares will go down as well, no matter how balanced the
portfolio. Investors encounter fewer risks when they invest in mutual funds than when
they buy and sell stocks on their own. However, anyone who invests through a mutual
fund runs the risk of losing money.
• Fees and commissions: All funds charge administrative fees to cover their day-to-day
expenses. Some funds also charge sales commissions or "loads" to compensate brokers,
financial consultants, or financial planners. Even if you don't use a broker or other
financial adviser, you will pay a sales commission if you buy shares in a Load Fund.
• Taxes: During a typical year, most actively managed mutual funds sell anywhere from
20 to 70 percent of the securities in their portfolios. If your fund makes a profit on its
sales, you will pay taxes on the income you receive, even if you reinvest the money you
• Management risk: When you invest in a mutual fund, you depend on the fund's
manager to make the right decisions regarding the fund's portfolio. If the manager does
not perform as well as you had hoped, you might not make as much money on your
investment as you expected. Of course, if you invest in Index Funds, you forego
management risk, because these funds do not employ managers.
Types of Mutual Fund
Mutual fund schemes may be classified on the basis of its structure and its investment
• Open-ended Funds: An open-end fund is one that is available for subscription all
through the year. These do not have a fixed maturity. Investors can conveniently buy
and sell units at Net Asset Value ("NAV") related prices. The key feature of open-end
schemes is liquidity.
• Closed-ended Funds: A closed-end fund has a stipulated maturity period which
generally ranging from 3 to 15 years. The fund is open for subscription only during a
specified period. Investors can invest in the scheme at the time of the initial public
issue and thereafter they can buy or sell the units of the scheme on the stock exchanges
where they are listed.
• Interval Funds: Interval funds combine the features of open-ended and close-ended
schemes. They are open for sale or redemption during pre-determined intervals at NAV
By Investment Objective:
• Growth Funds: The aim of growth funds is to provide capital appreciation over the
medium to long- term. Such schemes normally invest a majority of their corpus in
equities. It has been proven that returns from stocks, have outperformed most other
kind of investments held over the long term. Growth schemes are ideal for investors
having a long-term outlook seeking growth over a period of time.
• Income Funds: The aim of income funds is to provide regular and steady income to
investors. Such schemes generally invest in fixed income securities such as bonds,
corporate debentures and Government securities. Income Funds are ideal for capital
stability and regular income.
• Balanced Funds: The aim of balanced funds is to provide both growth and regular
income. Such schemes periodically distribute a part of their earning and invest both in
equities and fixed income securities in the proportion indicated in their
Offer documents. In a rising stock market, the NAV of these schemes may not normally
keep pace, or fall equally when the market falls. These are ideal for investors looking
for a combination of income and moderate growth.
• Money Market Funds: The aim of money market funds is to provide easy liquidity,
preservation of capital and moderate income. These schemes generally invest in safer
short-term instruments such as treasury bills, certificates of deposit,
commercial paper and inter-bank call money. Returns on these schemes may fluctuate
depending upon the interest rates prevailing in the market. These are ideal for
Corporate and individual investors as a means to park their surplus funds for short
• Load Funds: A Load Fund is one that charges a commission for entry or exit. That is,
each time you buy or sell units in the fund, a commission will be payable. Typically
entry and exit loads range from 1% to 2%. It could be worth paying the load, if the fund
has a good performance history.
• No-Load Funds: A No-Load Fund is one that does not charge a commission for entry or
exit. That is, no commission is payable on purchase or sale of units in the fund. The
advantage of a no load fund is that the entire corpus is put to work.
• Tax Saving Schemes: These schemes offer tax rebates to the investors under specific
provisions of the Indian Income Tax laws as the Government offers tax incentives for
investment in specified avenues. Investments made in Equity Linked Savings Schemes
(ELSS) and Pension Schemes are allowed as deduction u/s 88 of the Income Tax Act,
1961. The Act also provides opportunities to investors to save capital gains u/s 54EA
and 54EB by investing in Mutual Funds, provided the capital asset has been sold prior
to April 1, 2000 and the amount is invested before September 30, 2000.
• Industry Specific Schemes: Industry Specific Schemes invest only in the industries
specified in the offer document. The investment of these funds is limited to specific
industries like InfoTech, FMCG, and Pharmaceuticals etc.
• Index Schemes: Index Funds attempt to replicate the performance of a particular index
such as the BSE Sensex or the NSE 50.
• Sectoral Schemes: Sectoral Funds are those, which invest exclusively in a specified
industry or a group of industries or various segments such as 'A' Group shares or initial
(I) Closed-end or Open-end
An open-end fund is one that has units available for sale and repurchase at all time. An
investor can buy or redeem units from the fund itself at a price based on the Net Asset
Value (NAV) per unit.
A close ended fund makes a one-time sale of a fixed number of unit. It does not allow
investors to buy or redeem units directly from the funds. However, to provide the much-
needed liquidity to investors many closed-end funds get themselves listed on stock
Funds do offer “buy-back of funds/units” thus offering another avenue for liquidity to
closed-end fund investor.
(II) Load vs. No Load
Marketing of a new mutual fund scheme involves initial expense. These expenses may be
recovered from the investors in different ways at different times. Three usual ways in
which a fund’s sales expenses may be recovered from the investors are:
1. At the time of investor’s entry into the fund/scheme, by deducting a specific
amount from his initial contribution: front-end or entry load.
2. By charging the fund/scheme with a fixed amount each year, during the stated
number of years: deferred load.
3. At the time o the investor’s exit from the fund/scheme, by deducting a specific
amount from the redemption proceeds payable to the investor: back end or exit
These charges made by the fund managers to the investors to cover
distribution/sales/marketing expenses are often called “loads”. Funds that charge front-
end, back-end or deferred loads are called load funds. Funds that make no such charges
or loads for sales expenses are called no-load funds.
In India, SEBI has defined a “load” as the one-time fee payable by the investor to allow
the fund to meet initial issue expenses including brokers’/agents’/distributors’
commissions, advertising and marketing expenses.
A load fund’s declared NAV does not include local charges
III. Tax-exempt vs. Non-Tax exempt Funds
Generally, when a fund invests in tax-exempt securities, it is called a tax-exempt fund.
In India, after the 1999 Union Government Budget, all of the dividend income received
from any of the mutual funds is tax-free in the hands of the investors. However, funds
other than Equity Funds have to pay a distribution tax, before distributing income to
investors. In other words, equity mutual fund schemes are tax-exempt investment
avenues, while other funds are taxable for distributable income.
Mutual Fund Types
Once we have reviewed the fund classes, we are ready to discuss more specific fund
types. Funds are generally distinguished from each other by their investment
objectives and types of securities they invest in.
a. Broad Fund Types by Nature of Investments
Mutual funds may invest in equities, bonds or other fixed income securities, or
short-term money market securities. So we have Equity, Bonds and Money Market
Funds. All of them invest in financial assets. But there are funds that invest in
physical assets. For example, we may have Gold or other Precious Metal Funds, or
Real Estate Funds.
b. Broad Fund Types by Investment Objective
Investors and hence the mutual funds pursue different objectives while investing.
Thus, Growth Funds invest for medium to long term capital appreciation. Income
Funds invest to generate regular income, and less for capital appreciation. Value
Funds invest in equities that are considered under-valued today, whose value will
be unlocked in the future.
c. Broad Fund Types by Risk Profile
The nature of a fund’s portfolio and its investment objective imply different levels
of risk undertaken. Funds are therefore often grouped in order of risk. Thus, Equity
Funds have a greater risk of capital loss than a Debt Fund that seeks to protect the
capital while looking for income. Money Market Funds are exposed to less risk than
even the Bond Funds, since they invest in short-term fixed income securities, as
compared to longer-term portfolios of Bond Funds.
Money Market Funds: Lowest rung in the order of risk level, Money Market Funds invest in
securities of a short-term nature, which generally means securities of less than one-year
Gilt Funds: Gilts are government securities with medium to long-term maturities, typically
of over one year (under one-year instruments being money market securities).
Debt Funds (or Income Funds): Next in the order of risk level, we have the general
category Debt Funds. Debt funds invest in debt instruments issued not only by
governments, but also by private companies, banks and financial institutions and other
entities such as infrastructure companies/utilities.
1. Diversifies Debt Funds
A debt fund that invests in all available types of debt securities, issued by entities
across all industries and sectors is a properly diversified debt fund. A diversified
debt fund is less risky than a narrow-focus fund that invests in debt securities of a
particular sector or industry.
2. Focused Debt Funds
Some debt funds have a narrow focus, with less diversification in its investment.
Examples include sector, specialized and offshore debt funds. Other examples of
focused funds include those that invest only in Corporate Debentures and Bonds or
only in Tax Free Infrastructure or Municipal Bonds.
3. High yield Debt Funds
There are funds which seek to obtain higher interest rates by investing in debt
instruments that are considered “below investment grade”. e.g. Junk Bond Funds.
4. Assured Return Funds – an Indian Variant
The SEBI permits only those funds whose sponsors have adequate net-worth to
offer assurance of return. e.g. MIPs. Investors have some lock-in period.
5. Fixed Term Plan Series – Another Indian Variant
These are essentially closed-end. These plans do not generally offer guaranteed
returns. This scheme is for short-term investors who otherwise place money as
fixed term bank deposits or inter corporate bonds.
Equity Fund: As investors move from Debt Fund category to Equity Funds, they face
increased risk level.
1. No guarantee returns
2. High potential for growth of capital
Types of Equity Fund
a) Aggressive Growth Fund
• Maximum capital appreciation
• Invests in less researched or speculative shares.
• Very volatile & riskier.
b) Growth Fund
• Growth fund invest in companies whose earnings are expected to
• Rise above average rate. e.g. Technology Fund
• Capital appreciation in 3 – 5 years
• Less volatile then aggressive growth fund.
c) Speciality Fund
They invest in companies that meet predefined criteria.
i) Sector Funds
• Technology Fund
• Pharmaceutical Fund
• FMCG Fund
ii) Offshore Funds
Invest in equities in one or more foreign countries.
iii) Small-Cap equity Funds
• Invest in shares of companies with relative lower market
d) Diversified Equity Funds
A fund that seeks to invest only in equities, except for a very small portion in liquid
money market securities, bur is not focused on any one or few sectors or shares,
may be termed a diversified equity fund. While exposed to all equity price risks,
diversified equity funds seek to reduce the sector or stock specific risks through
i) Equity Linked Savings Schemes: An Indian Variant
Investment in these schemes entitles the investor to claim an income tax rebate,
but usually has a lock-in period before the end of which funds cannot be
e) Equity Index Funds
An index fund tracks the performance of a specific stock market index. The
objective is to match the performance of the stock market by tracking an index that
represents the overall market.
• The funds invest in share that constitute the index and in the same
proportion on the index.
f) Value Funds
Value Funds try to seek out fundamentally sound companies whose shares are
currently under-prices in the market. Value Funds will add only those shares to
their portfolios that are selling at low price-earnings ratios, low market to book
value ratios and are undervalued by other yardsticks.
• Fund concentrate on future growth prospect having good potential
g) Equity Income Funds
There are equity funds that can be designed to give the investor a high level of
current income along with some steady capital appreciation, investing mainly in
shares of companies with high dividend yields.
Hybrid Funds – Quasi Equity/Quasi Debt: Many mutual funds mix these (money market,
debt and equity) different types of securities in their portfolios. Such funds are termed
“hybrid funds” as they have a dual equity/bond focus.
Commodity Funds: While all of the debt/equity/money market funds invest in financial
assets, the mutual fund vehicle is suited for investment in any other- for examples-
Real Estate Funds: Specialized Real Estate Funds would invest in Real Estate directly, or
may fund real estate developers, or lend to them, or buy shares of housing finance
companies or may even buy their securities assets.
RISK HIERARCHY OF MUTUAL FUND
LEGAL AND REGULATORY ENVIRONMENT
REGULATORS IN INDIA
• SEBI - The capital markets regulators also regulates the mutual funds in India. SEBI
requires all mutual funds to be registered with them. SEBI issues guidelines for all mutual
funds operations - investment, accounts, expenses etc.
• RBI as supervisor of banks owned mutual funds - As banks in India came under the
regulatory jurisdiction of RBI, bank owned funds to be under supervision of RBI and SEBI.
• RBI as supervisor of Money Market Mutual Funds - RBI has supervisory responsibility over
all entities that operate in the money markets. Hence in the past Money Market Mutual
Funds scheme of Mutual funds had to be abide by policies laid down by RBI.
Recently, it has been decided that Money Market Mutual Funds of registered mutual funds
will be regulated by SEBI through SEBI (Mutual Fund) Regulations 1996.
• Ministry of Finance - (MoF) ultimately supervises both the RBI & the SEBI and plays the
role of apex authority for any major disputes over SEBI guidelines.
• Company Law Board - Dept of Company Affairs - Registrar of companies AMCSs of Mutual
funds are companies registered under the companies Act 1956 and therefore answerable
to regulatory authorities empowered by the Companies Act.
• Stock Exchanges
Stock Exchanges are self-regulatory organizations supervised by SEBI. Many of closed
ended funds of AMCs are listed as stock exchanges and are traded like shares
• Office of the Public Trustee
Mutual fund being public trust is governed by the Indian Trust Act 1882. The Board of
trustees or the Trustee Company is accountable to the office of the public trustee, which in
turn reports to the Charity commissioner
• Unit Trust of India
Unit Trust of India formed under UTI Act 1963.The Management of the Trust is under a
Board of trustees, which has names of RBI, IDBI, LIC, SBI with the chairman appointed by
the Government of India in consultation with the IDBI.
• What are Self-Regulatory organizations?
A Self Regulatory organization (SRO) is an association representing a group of market
participants, which is empowered by the apex regulatory authority to exercise pre-defined
authority over regulation of their members. For example stock exchanges.
However everybody representing a group of market participants does not automatically
become a SRO.
• Association of Mutual funds of India (AMFI )
AMFI is not a SRO. It has been formed in 1995 with the objective of representing the
Mutual fund industry collectively with a view
- To promote the interests of Mutual Funds and Unit holders.
- To set ethical, commercial and professional standards in the industry.
- To increase public awareness of Mutual funds in the country
INVESTORS RIGHT AND OBLIGATIONS
• Right of “Proportionate Beneficial Ownership”
• Right of timely services
• Unit holders entitled to receive dividend warrants within 30 days of date of declaration
Unit holders have right to payment of interest at 15% p.a. in the event of failure on the part
of Mutual fund to dispatch redemption proceeds within ten working days.
• The Unit holders can claim unclaimed redemption proceeds or dividends due within a
period of 3 years of the due date at the prevailing NAV. After 3 years he/she will be paid at
NAV applicable at the end of the third year.
• For initial offers unit holders have right to expect allotment of units within 30 days from
the closure of mutual offer period.
• Right to information
• Right to approve changes in fundamental attributes of the scheme.
• Right to wind up a scheme if 75% of investors pass a resolution to that effect.
• Right to terminate AMC if 75% of the unit holders decides so, of course with the prior
approval of the SEBI
Legal Limitation to Investors Rights
• Unit Holders are not distinct from the Trust and therefore cannot sue the Trust.
• Sponsors of a Mutual fund do not have any legal obligation to meet the shortfall in case the
assured return is not achieved.
• But if the offer document has specifically provided such guarantee by a named sponsor,
the investors will have the right to sue the sponsors to make good any shortfall from his
• Prospective investors do not enjoy any right with respect to the fund AMC or any other
constituent Investor Complaints Redressal Mechanism.
• SEBI entertains receipt of complaints against Mutual Funds and intervenes with Fund
Management to help investor resolve his complaints. SEBI help the investors in the new
scheme by requiring the sponsor to appoint a compliance
Officer who certified that all relevant SEBI and other regulations have been complied with
by the fund manager and sponsors.
• Investors are neither shareholders in the AMC nor depositors. Hence their investments
cannot be protected by any of these companies act regulators.
OFFER DOCUMENT (OD)
• Offer document describes a Product; it is the most important source of information for
• AMC or the sponsor issues it.
• This (OD) is the primary vehicle for the investment decision.
• It is a legal document that protects and governs the right of an investor.
• Key information memorandum (KIM) is the abridged version of offer document.
Application forms are issued along with the KIM.
• SEBI has designed standard format for issue of OD and KIM.
• Offer document and the KIM is valid for two years.
• ODs are to be updated, revised and printed once in every two years.
• Changes made in between these two years are circulated among investors in form of
addendum or some other source of communication to investors.
• Changes made in the OD have to be filed with SEBI and should be made available at service
centers and in the offices of distributors/brokers.
• Offer documents should contain
- Summary information at the cover page containing name, type of the scheme, name
of AMC and the mutual fund, opening and closing date of the offer, price of units,
highlights of the scheme and most importantly disclaimer clause by SEBI.
- A glossary of defined terms used in the offer document.
- Risk factors – standard and scheme specific
- Due diligence certificate to be signed by Compliance Officer/CEO/Managing
Director/Whole Time Director
• The above points should be in the same sequence.
• Offer document contains fundamental attributes of the scheme –
- Type of the scheme
- Investment objective
a) Investment pattern
b) Investment policies
- Load and expenses
• Offer related information – all practical information needed by investor and agents to
make the entrustment in the proposed scheme.
• Condensed financial information for scheme launched during three fiscal years.
• Constitution of the mutual fund.
• About objective of the fund.
• Activities of the sponsor.
• Name and addresses of the Board of Trustees/Directors
• Management of the fund
• Associate Transactions and borrowing policies
- In case, scheme has invested more than 25% of its net assets in group companies.
a) Business given to associate brokers should be in the limit of 5% of sale and
• NAV determination, valuation and accounting policies.
• Procedure for repurchases.
• Tax treatment of investments made in the scheme.
• Investors’ rights and services under the scheme.
- Access to information on NAV computation and unit price.
- Investor’s friendly services provided by the scheme and documents available for
inspection by the investors.
• Brief description of investor complaint history for the last three years of existing schemes
and their redressal mechanism.
• Any penalties pending litigation or proceedings should be mentioned in the OD to alert the
What is Portfolio?
The set of all securities held by an investor is called his portfolio. The portfolio may
contain just one security. However, since in general no one puts all one’s eggs in
one basket, it will contain several securities. Such a portfolio is known as diversified
portfolio can consist of any combination of shares, bonds, derivatives and such. It
means the total holdings of securities belonging to any person.
What is Portfolio Management?
Portfolio management refers to the selection of securities and their continuous
shifting in the portfolio to optimize return to suit the objective of an investor.
The following three major activities are involved in an efficient portfolio
a) Identification of assets or securities, allocation of investment and identifying
b) Deciding about major weights/proportion of different assets/securities in
c) Security selection within the asset classes as identified earlier.
What are the different alternatives of investment?
There are following alternatives available for investment:-
(1) High Risk High Gain modes of investments
c) Mutual fund
(2) Fixed interest most secured mode of investments
a) Debenture/ Bonds
b) Fixed deposit
c) Government instruments (PPF, Indira & Vikas Patra, National Savings
d) Life insurance
Net Asset Value (NAV)
Net asset value of the fund is the cumulative market value of the assets fund net of its
liabilities. In other words, if the fund is dissolved or liquidated, by selling off all the assets in
the fund, this is the amount that the shareholders would collectively own. This gives rise to
the concept of net asset value per unit, which is the value, represented by the ownership of
one unit in the fund. Like a share or a stock has a market price that fluctuates everyday
according to the performance of that particular scrip similarly NAV fluctuates on a daily basis.
Apart from this when a new scheme is launched it is sold at an offer price of Rs.10/unit and it
is listed once all the money is collected and forms are cleared. It is calculated simply by
dividing the net asset value of the fund by the number of units. However, most people refer
loosely to the NAV per unit as NAV, ignoring the "per unit". We also abide by the same
Calculation of NAV
The most important part of the calculation is the valuation of the assets owned by the fund.
Once it is calculated, the NAV is simply the net value of assets divided by the number of units
outstanding. The detailed methodology for the calculation of the asset value is given below.
NAV = ((Current Assets – Current Liabilities) / No. Of Outstanding Units)
Asset value = Sum of market value of shares/debentures + Liquid assets/cash held, if any +
Dividends/interest accrued +Amount due on unpaid assets + Expenses accrued but not paid
The objective of the research is to study consumer perception about mutual funds as an
There are basically two parts of the research:
• Consumer perception about mutual fund
• Comparative analysis across the mutual fund sector
A comparative study about the different mutual fund schemes as well as different AMCs using
secondary data would reveal the strengths provide a guide to investors. Decision regarding
the investment option and portfolio to be chosen can be easily made by glancing through the
comparative analysis result.
Users of the study
• Asset management companies
• Mutual fund distributors
• Researchers of the Mutual fund market
Data collection was done using questionnaire administration methodology. A questionnaire
containing both open ended and closed ended questions was designed.
Sampling techniques followed was Stratified random sampling. The target respondents
were people having an annual income coming from different demographic backgrounds.
Respondent’s demographic background such as income, age and occupation formed an
important part of the research. The response of people having no income source was ignored
as their response would have been irrelevant for our study. Contact with respondent was
made through e-mails, telephone and direct meetings.
The list of respondents will be further skimmed for identifying leads for investing in SBI
The sample size taken was 200 respondents.
In our study we have used three methods of scaling, namely
Likert scale (Likert scales consist of a series of statements where the respondent
provides answers in the form of agreement or disagreement.)
Semantic differential Scale (semantic differential scales are used to describe a set of
beliefs that underline a person’s attitude towards an organization , product or brand
There was no restriction on the geographic location of the respondents.
The responses were fed into MS Excel sheet and analyzed using bar and pie charts. Wherever
possible suitable co-relation between responses have been made for garnering better event –
Various sources of information can be broadly divided into two categories.
(1) Primary Data: Information gathered through the questionnaire in this
survey is called primary date.
For collection of primary data survey method was used. It was structured questionnaire
which is based on the closed ended as well as open ended questions, which are obtained
through direct communication with the people & filling up of questionnaires. The
questionnaire designed was to provide dual information sharing type, it is seriously under
taken that anyone who is seriously under taken that anyone who is undergoing the process,
should find his interest or else he might show disinterest towards the programmed. The
questionnaire was equally important both to the customers as well as to the bank to drawn
out its prospects.
METHOD USED FOR PRIMARY DATA:
* Personal interview (one to one)
* Telephonic interview (Through Phone)
(2) Secondary Data: The information already gathered for some other purpose and is used
in the study is called secondary Data. The secondary data was collected through the
* Assistant Manager of Standard chartered Bank
SURVEY ON CONSUMER PERCEPTION
ABOUT MUTUAL FUND
1. To which age group do you belong?
18-35 36-50 Above 50
2. Your income group is
Below 1 lakh 1-2 lakhs 2-5 lakhs
5-8 lakhs Above 8 lakhs
3. What is your occupation?
Manager Doctor Engineer
Govt. Employee Others (plz Specify ……………….)
4. How many dependants you have in your family?
1 2 3
4 > 4 none
5. Which you think is the most feasible option to invest your savings?
Fixed deposits Mutual Fund Stock Market Real estate
Insurance policies others
5. How aware are you about the stock market and its recent trends?
Highly Aware Somewhat Aware Not much Aware
Least Aware No idea at all
6. Have you heard about the Dsp blackrock mutual fund?
7. Do you know that BLACK ROCK is a mutual fund distributer?
8 .Which brand strikes you first as you come across the word “Mutual Fund”?
SBI Dsp black rock Reliance HDFC
9 .As an investor which institution would you prefer to invest in ?
SBI Dsp black rock Reliance HDFC UTI others
10. What kind of interaction from the company would you appreciate?
Personal Contact Telephonic Contact
11. How do you rate Mutual Fund as an investment?
Highly Safe Neither Safe Unsafe Highly
Safe nor Unsafe
12. What are your reasons for mutual fund investments?
Long Term Gains
Ease of Investment
Low Risk Involve
13. Are you aware about systematic investment planning?
14. Which mode will you prefer to invest in mutual fund?
SIP Non SIP
15. Do you think is it right time to invest in mutual fund?
16. How much satisfied have you been with your mutual fund investments?
Fully Satisfied Somewhat Satisfied Neutral Unsatisfied Highly Unsatisfied
17. Given a choice, whom would you prefer to manage your portfolio.
A Reputed Share Broker A Reputed Fund Manager
Do it on your own Take advice of acquaintances dealing in funds
18. What will be your criteria for selecting a fund?
Net Asset Value
19. What would be the pulling factor for your choice?
Trust In the brand
20. What suggestions would you give to DSP BLACK ROCK to stand the fierce competition in the
2. Age of respondent
3. Occupation of respondent
4. Income range of respondent
4. Most feasible option to invest
5. Awareness about stock market
6. Awareness about Mutual Fund
7. First brand recall as related to Mutual Funds
SBI Franklin Reliance HDFC UTI Others
8. Institution, investors prefer to invest in.
SBI Reliance Franklin HDFC UTI Others
9. Kind of interaction potential investors expect from firms
10. How safe is mutual fund investment?
Neither Safe Nor Unsafe
12. Reason for mutual fund investment
long term gains
ease of investment
low risk involved
14. Preferred fund manager
15. Criteria for selecting mutual fund
15. Your criteria for selecting a fund
portfolio NAV Dividend declared Growth option
16. Pulling factor for your choice.
Trust In The
Trust In the Brand
HDFC Mutual Fund
Why HDFC Mutual Fund?
HDFC Mutual Fund is one of the largest mutual funds and well-established fund house in the
country with consistent and above average fund performance across categories since its
incorporation on December 10, 1999. While our past experience does make us a veteran, but
when it comes to investments, we have never believed that the experience is enough.
SYSTEMATIC INVESTMENT PLAN (SIP)
HDFC MF SIP is similar to a Recurring Deposit. Every month on a specified date an amount you
choose is invested in a mutual fund scheme of your choice. The dates currently available for
SIPs are the 1st, 5th, 10th, 15th, 20th and the 25th of a month. You’ll be amazed to learn
about the many benefits of investing through HDFC MF SIP.
Become A Disciplined Investor
Being disciplined - It’s the key to investing success. With the HDFC MF Systematic Investment
Plan you commit an amount of your choice (minimum of Rs. 1000 and in multiples of Rs. 100
thereof*) to be invested every month in one of our schemes.
Think of each SIP payment as laying a brick. One by one, you’ll see them transform into a
building. You’ll see your investments accrue month after month. It’s as simple as giving at least
6 postdated monthly cheques to us for a fixed amount in a scheme of your choice. It’s the
perfect solution for irregular investors.
*Minimum amounts may differ for each Scheme. Please refer to SIP Enrolment Form for
Reach Your Financial Goal
Imagine you want to buy a car a year from now, but you don’t know where the down-payment
will come from. HDFC MF SIP is a perfect tool for people who have a specific, future financial
requirement. By investing an amount of your choice every month, you can plan for and meet
financial goals, like funds for a child’s education, a marriage in the family or a comfortable
postretirement life. The table below illustrates how a little every month can go a long way.
Monthly Savings - What your savings may generate
Savings per month
(for 15 years)
Total amount invested
(Rs. in Lacs)
Rate of return
6.0% 8.0% 10.0%
(rupees in lacs, 15 years later)*
5000 9.0 14.6 17.4 20.9
4000 7.2 11.7 13.9 16.7
3000 5.4 8.8 10.4 12.5
2000 3.6 5.8 7.0 8.3
1000 1.8 2.9 3.5 4.2
*Monthly instalments, compounded monthly, for a 15-year period.
Disclaimer: The illustration above is merely indicative in nature and should not be construed
as investment advice. It does not in any manner imply or suggest performance of any HDFC
Mutual Fund Scheme(s). Please read Risk Factors.
Take Advantage of Rupee Cost Averaging
Most investors want to buy stocks when the prices are low and sell them when prices are high.
But timing the market is timeconsuming and risky. A more successful investment strategy is to
adopt the method called Rupee Cost Averaging. To illustrate this we’ll compare investing the
identical amounts through a SIP and in one lump sum.
Imagine Suresh invests Rs. 1000 every month in an equity mutual fund scheme starting in
January. His friend, Rajesh, invests Rs. 12000 in one lump sum in the same scheme. The
following table illustrate how their respective investments would have performed from Jan to
Suresh’s Investment Rajesh’s Investment
Month NAV Amount Units Amount Units
Jan-04 9.345 1000 107.0091 12000 1284.1091
Feb-04 9.399 1000 106.3943
Mar-04 8.123 1000 123.1072
Apr-04 8.750 1000 114.2857
May-04 8.012 1000 124.8128
Jun-04 8.925 1000 112.0448
Jul-04 9.102 1000 109.8660
Aug-04 8.310 1000 120.3369
Sep-04 7.568 1000 132.1353
Oct-04 6.462 1000 154.7509
Nov-04 6.931 1000 144.2793
Dec-04 7.600 1000 131.5789
*NAV as on the 10th every month. These are assumed NAVs in a volatile market
Disclaimer: The illustration above is merely indicative in nature and should not be construed
as investment advice. It does not in any manner imply or suggest performance of any HDFC
Mutual Fund Scheme(s). Rupee Cost Averaging neither ensures you profits nor protects you
from making a loss in declining markets. Please read Risk Factors.
As seen in the table, by investing through SIP, you end up buying more units when the price is
low and fewer units when the price is high. However, over a period of time these market
fluctuations are generally averaged. And the average cost of your investment is often reduced.
At the end of the 12 months, Suresh has more units than Rajesh, even though they invested the
same amount. That’s because the average cost of Suresh’s units is much lower than that of
Rajesh. Rajesh made only one investment and that too when the per-unit price was
high.Suresh’s average unit price = 12000/1480.6012 = Rs. 8.105
Rajesh’s average unit price = Rs. 9.345
Grow Your Investment With Compounded Benefits
It is far better to invest a small amount of money regularly, rather than save up to make one
large investment. This is because while you are saving the lump sum, your savings may not
earn much interest.
With HDFC MF SIP, each amount you invest grows through compounding benefits as well. That
is, the interest earned on your investment also earns interest. The following example
Imagine Neha is 20 years old when she starts working. Every month she saves and invests Rs.
5,000 till she is 25 years old. The total investment made by her over 5 years is Rs. 3 lakhs.
Arjun also starts working when he is 20 years old. But he doesn’t invest monthly. He gets a
large bonus of Rs. 3 lakhs at 25 and decides to invest the entire amount.
Both of them decide not to withdraw these investments till they turn 50. At 50, Neha’s
Investments have grown to Rs. 46,68,273* whereas Arjun’s investments have grown to Rs.
36,17,084*. Neha’s small contributions to a SIP and her decision to start investing earlier than
Arjun have made her wealthier by over Rs. 10 lakhs.
*Figures based on 10% p.a. interest compounded monthly.
Disclaimer: TheThe illustration above is merely indicative in nature and should not be
construed as investment advice. It does not in any manner imply or suggest performance of
any HDFC Mutual Fund Scheme(s). Please read Risk Factors.
Do All This Effortlessly
Investing with HDFC MF SIP is easy. Simply give us post-dated cheques or opt for an
Auto Debit from your bank account for an amount of your choice (minimum of Rs. 1000 and in
multiples of Rs. 100 thereof*) and we’ll invest the money every month in a fund of your choice.
The plans are completely flexible. You can invest for a minimum of six months, or for as long as
you want. You can also decide to invest quarterly and will need to invest for a minimum of two
As on 28 Feb 2009
Average Assets under Management : Rs. 56,864.39 crore
No. of investors : 31,73,154
No. of ARN certified distributors : 33,162
To know more about our products please visit our Products section.
To find out you current financial health and tips about financial planning, please visit
out Calculators section.
For additional information/ clarification you can email us at cliser@hdfcfundcom
If you wish to speak to any of our customer service executives, you can SMS HDFCMF to
56767 or provide us with your contact & query details and we will have someone get in touch
HDFC Asset Management Company Limited
HDFC Asset Management Company Limited (AMC) was incorporated under the Companies
Act, 1956, on December 10, 1999, and was approved to act as an Asset Management Company
for the Mutual Fund by SEBI on June 30, 2000. The sponsor HDFC was incorporated in 1977 as
first specialized housing finance institution in India. HDFC provides financial assistance to
individuals, corporate and developers for the purchase and construction of residential
housing. It also provides property-related services, training and consultancy. In the mutual
fund venture, HDFC has tied up with Standard Life, one of the leading Insurance companies in
the United Kingdom, having vast experience in management of funds. HDFC has developed a
strong and dedicated team of agents that market its fixed deposit products. These key
partners would constitute the backbone of the marketing and distribution network of Mutual
Fund and will remain a central theme of the organizational framework in times to come.
Corpus under management: Rs.22538.6675 Crs. as on Apr 30, 2006.
Top 10 Funds in Each Category
Rank Scheme Name Date NAV (Rs.) Last 6
1 Taurus Infrastructure Fund - Growth May 22 ,
2 DSP BlackRock World Gold Fund - Growth May 22 ,
3 Principal Junior Cap Fund - Growth May 22 ,
4 Junior BeES May 22 ,
5 Principal Emerging Blue-chip Fund - Growth May 22 ,
6 JM Mid Cap Fund - Growth May 22 ,
7 JM Multi Strategy Fund - Growth May 22 ,
8 SBI Magnum Midcap Fund - Growth May 22 ,
9 DBS Chola Opportunities Fund - Cumulative May 22 ,
10 SBI Magnum Sector Umbrella - Emerging
Businesses Fund - Growth
May 22 ,
TOP 10 OPEN ENDED FUNDS - PERIOD (LAST 3 MONTHS)
Rank Scheme Name Date NAV (Rs.) Last 3
1 Taurus Infrastructure Fund - Growth May 22 ,
2 JM Basic Fund - Growth May 22 ,
3 JM Emerging Leaders Fund - Growth May 22 ,
4 SBI Magnum Midcap Fund - Growth May 22 ,
5 Principal Junior Cap Fund - Growth May 22 ,
6 SBI Magnum Sector Umbrella - Emerging
Businesses Fund - Growth
May 22 ,
7 Sahara Banking and Financial Services Fund -
May 22 ,
8 JM Mid Cap Fund - Growth May 22 ,
9 Bank BeES May 22 ,
10 Reliance Banking Exchange Traded Fund May 22 ,
TOP 10 CLOSE ENDED FUNDS - PERIOD (LAST 3 MONTHS)
Rank Scheme Name Date NAV (Rs.) Last 3
1 ING C.U.B. Fund - Growth May 22 ,
2 Principal PNB Long Term Equity Fund
- 3 Year Plan - Series I - Growth
May 22 ,
3 Principal PNB Long Term Equity Fund
- 3 Year Plan - Series II - Growth
May 22 ,
4 Franklin India Smaller Companies
Fund - Growth
May 22 ,
5 SBI Infrastructure Fund - Series I -
May 22 ,
6 Sundaram BNP Paribas Select Small
Cap Fund - Growth
May 22 ,
7 HDFC Infrastructure Fund - Growth May 22 ,
8 JM Equity Tax Saver Fund - Series I -
May 22 ,
9 Sundaram BNP Paribas Select
Thematic Funds Energy Opportunities
May 22 ,
10 Birla Sun Life Long Term Advantage
Fund - Series 1 - Growth
May 22 ,
1) Limited Database: -
I can only call to those people who have sufficient
fund to invest, but most of the people have not such
amount of fund to invest in Mutual fund.
2) Awareness: -
Awareness of the people about Mutual Fund, they believe
in traditional fund like RD (Recurring Deposit), FD (Fixed
Deposit) and many government securities they are not
going to believe in Mutual Fund because they worry about
their principal money.
3) Area Limitation: -
I can only visit local area (Patna).
4) Time Limitation:-
I can work only office hour, because in mutual fund
investor are very crossly related to time.
In this period most the investor are not welling to invest in
6) Insufficient Documents:-
In mutual fund only those investor can invest who have
PAN card, Bank Account
I found the work environment in Dsp blackrock mutual fund (Patna
Branch) is very conducive; all the staffs are very cooperative to each other.
Now a day’s BLACK ROCK is going to very popular AMC in Patna by dint of
their services and the customers are very happy with their service . The
staffs of BLACK ROCK are too enthusiastic and happy about their work.
Awareness of the people about Mutual Fund, they believe in traditional
fund like RD (Recurring Deposit), FD (Fixed Deposit) and many
government securities they are not going to believe in Mutual Fund
because they worry about their principal money. In this period most the
investor are not willing to invest in mutual fund.
The main suggestions inferred from the finding are as follows:-
The DSP group should focus on advertisement through various medium.
The DSP group should increase the number of branches in the region to compete with
The DSP group should introduce credit card service in the branch which has a good
demand in the market.
The DSP group should make the process smooth.
DSP group must pay attention toward small customers also.
The DSP group should design its product as per the need of middle & small
DSP group should motivate its salesman on time.
The sales of marketing department should be improved.
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