ACKNOWLEDGEMENT

This report is an outstanding prospect to convey my gratefulness to those many people whose

timely help and guidance went a long way in finishing this project work from commencement to

achievement.

I would like to express my sincere thanks to principal of our college for giving me an

opportunity for pursuing the project.

This project should not be completed without the able guidance and support of

Prof. ATREYEE GANGULY (Project Supervisor).

Last but not the least would like to thank my family members, friends and all those people

who helped me for the completion and deeper understanding of the concept of the performance

appraisal.

Working on the project has proved to be an enlightening for me.

1
 Supervisor’s Certificate

This is to certify that Miss Varsha Mundhra a student of B. Com. Honours in Accounting &
Finance in Business of THE BHAWANIPUR EDUCATION SOCIETY COLLEGE under the
University of Calcutta has worked under my supervision and guidelines for his project work and
prepare a project Report on MUTUAL FUND.

The Project Report which he is submitting is genuine and original work to the best of my
knowledge.

Signature:

Place: Name:

Date: Designation:

Name of the College: THE BHAWANIPUR

GUJARATI EDUCATION
SOCIETY COLLEGE

Student’s Declaration

I hereby declare that the project work with the title MUTUAL FUND submitted by me for the
Practical fulfillment of the degree of B.Com Honours in Accounting & Finance under the
University of Calcutta is my original work and has not been submitted earlier to any other
University/Institution for the fulfillment of the requirement for any course of study.

I also declare that no chapter of this manuscript in whole or in part has been incorporated in the
Report form any earlier work done by others or by me. However, extracts of any literature which
has been used for this Report has been duly acknowledged providing details of such literature in
the references.

Signature:

Place: Name:

Date: Address:

Registration No:

2
 EXECUTIVE SUMMARY
Role of financial system is to enthusiast economic development .As investors are getting more
educated, aware and prudent they look for innovative investment instruments so that they are
able to reduce investment risk, minimize transaction costs, and maximize returns along with
certain level of convenience as a result there has been as advent of numerous innovative financial
instrument such as bonds, company deposits, insurance and mutual funds. All of which could be
matched with individual’s investment needs. Mutual funds score over all other investment
options in terms of safety, liquidity, returns and are as transparent, convenient as it can get. Goal
of a mutual fund is to provide an efficient way to make money. In India there are 36 mutual
funds with different Investment strategies and goals to choose from different mutual funds have
different risks, which differs because of fund’s goals, funds manager and investment styles. A
mutual fund is an investment company that collects money from many people and invests it in a
variety of securities; the company then manages the money on an ongoing basis for individuals
and businesses. Mutual funds are an efficient way to invest in stock, bonds and other securities
for three reasons:

a) The securities purchased are managed by professional managers.

b) Risk is spread out or diversified, because you have a collection of different stocks and bonds.
c) Costs usually are lower than what would you pay on your own, since the funds buy in large
quantities.

In few years Mutual Fund has emerged as a tool for ensuring one’s financial well
being. Mutual Funds have not only contributed to the India growth story but have also helped
families tap into the success of Indian Industry. As information and awareness is rising more and
more people are enjoying the benefits of investing in mutual funds. The main reason the number
of retail mutual fund investors remains small is that nine in ten people with incomes in India do
not know that mutual funds exits but once people are aware of mutual funds investment
opportunities, the number who decide to invest in mutual funds increase to as many as one in
five people.

This Project gave me a great learning experience and at the same time it gave me
enough scope to implement my analytical ability. The analysis and advice presented in this
Project Report is based on market research on the saving and investment practices of the
investors and preferences of the investor for investment in Mutual Funds. This report will help to
know about the Company Profile, Objectives of the study, Research Methodology. One can have
a brief knowledge about Mutual Fund and its basics through the Project. The second part of the
Project consists of data and its analysis collected through various journals, magazines,
newspaper, websites, publications etc. I studied about the products and strategies of other AMCs

3
in India to know why people prefer to invest in those AMCs. The data collected has been well
organized and presented. I hope the research findings and conclusion will be of use.

INDEX

Chapter No. Particulars Page No.

1. INTRODUCTION
A -Definition 5
B -Types of Mutual Funds 5-8
C -Advantages of Mutual Funds 8
D -Drawbacks of Mutual Funds 9
E -How Mutual Funds are Bought & Sold 10
F -Cost of Investing in Mutual Funds 10-11

2. Objective of the study 13-15

3. Limitations of Project 16
4. Conceptual Framework/National and 17-19
International Scenario
5. Data Analysis 20 – 21
6. Conclusion & Recommendation 22
7. Bibliography 23

4
 INTRODUCTION
BACKGROUND OF MUTUL FUND:
Definition :
A mutual fund is a type of professionally managed collative investment vehicle that pools
money from many investors to invest in stocks, bonds, money markets and securities. All mutual
funds have fund managers. Mutual funds give investors options for a diversified portfolio. While
there is no legal definition of mutual fund, the term is most commonly applied only to those
collective investment vehicles that are regulated, available to the general public. Hedge funds are
not considered a type of mutual fund.

Types of Mutual Funds in India :

These days, different types of Indian mutual fund schemes have come up which cater to
your various financial needs like financial position, return expectations, risks tolerance and
others. Here is the list of the different type of mutual fund in India.

Indian Mutual Fund Schemes :

• Open-ended fund

There is no fixed maturity for the open-ended mutual fund schemes. One has to
deal directly with the Mutual Fund for his/her redemptions and investments.
Liquidity is the key feature here. Buying and selling of the units becomes convenient
at the related prices of the NAV (net asset value). Some of the open-ended fund
schemes in India are ING OptiMix Active Dept Multi – Manager FoF scheme,
HDFC Prudential very Cautions Plan Birla Sun Life AAF – Aggressive plan.

• Close-end Fund

Close-ended schemes are those which have a specified maturity period (which
generally ranges from 2-15 years). At the time of initial public issue one can make direct
investment in the scheme and can also benefit of buying and selling of the units. Due to
demand and supply in the market plus the policy holder’s expectations and various other
market factors, the market price may vary from NAV (Net Asset Value). Some of the
close-ended fund schemes in India are ING Vysya Dynamic Asset Allocation Fund and
Kotak Dynamic Asset Allocation Schemes.

• Tax-saving Fund

5
 Tax-saving Mutual fund schemes in India – Individuals, companies, partnership
firms, and body corporate are some of the investing parties in the various Mutual Fund
available in the market primarily to enjoy the benefits of tax saving. The Indian Mutual
Funds are guided by principles of general contract framed by SEBI. It provided certain
tax benefits to the fund holders. It is mandatory that tax benefits should be declared in a
column which reads “objects of the offering”. SBI Mutual Funds , Prudential HDFC and
Balaji Capital are some of the tax saving Mutual Fund companies in India.

Types of Mutual Fund :

• Equity fund

• Growth fund

• Large-Cap and Small-Cap Funds

• Bond Funds

• Money-Market Funds

• Asset Allocation Funds

• Sector Funds

• Equity Fund

Most mutual funds invest in stocks, and are called equity funds. While mutual funds often
invest in the stock market, fund manager don’t just buy any old stock they find attractive.
Some funds specialize in large-cap stocks, others in small-cap stocks, and still others invest
in what’s left-mid-cap stocks.

• Growth Fund

As their name implies, these funds tend to look for the fastest-growing companies on the
market. Growth managers are willing to take more risk and pay a premium for their stocks in
an effort to build a portfolio of companies with above-average earning momentum or price
appreciation.

For examples, Dell and Microsoft are generally considered “expensive” stocks, because their
prices have been bid high relative to their profits. But because they enjoy vibrant markets and
have rapid earnings growth, managers like Scott Schoelzel of Janus. Twenty have no qualms
paying big prices. Schoelzel knows that investors crave these super-charged growth stocks
and will keep piling into them as a long as the growth keeps up. But if the growth shows,
watch out –the more momentum a stock has, the harder it is likely to fall when the news turns
bad.

6
 That’s why growth funds are the most volatile of the three investment styles . It’s also why
expenses and turnover (which leads to tax liability) are also higher. For these reasons, only
aggressive investors, or those with enough time to make up from short-time market losses,
should buy these spooky funds.

• Large-Cap and Small-Cap Funds

STOCK FUNDS are often grouped by the size of the companies they invest in—big, small or
tiny. By size mean a company’s value on the stock market: the number of shares it has
outstanding multiplied by the shares price. This is knows as market capitalization , or cap
size . Big companies tend to be less risky than small fries . But smaller companies can often
offer more growth potential. The best ideas is probably to have mix of funds that give you
exposure to large-cap , midsize and small companies.

• Bond Funds
They’re short, intermediate or long term, depending on the number of years until they
mature. Bond funds are the same way. A fund like scudder Short-Term Bond is typical of its
class, buying a mixture of corporate and government bonds with durations between one and
3.5 years. Intermediate funds like Stain Roe Intermediate range between 3.5 and 10 years.

• Money-Market Funds

Money mutual funds invest in money market securities. The money market instruments are
commercial papers, repurchase agreements or certificates of deposits. The maturity of the
investments is less 1 years. In India , examples of Money Market Funds are HDFC Cash
Management Fund. JM High Liquidity Fund, etc.

• Sector Funds

Sector Funds do what their name implies: They restrict investments to a particular segment or
sector of the economy. A fund like Northern technology , for instance, only buys tech
companies for its portfolio. Munder Net cuts it even finer by holding only Internet-related
stocks. Fidelity has a whole stable of sector funds from Fidelity Select Insurance to Fidelity
Select Automotive. The idea is to allow investors to place bets on specific industries or
sectors whenever they think that industry might heat up.

• Asset Allocation Funds

Historically , stocks have outperformed other investments. But stocks also carry more risk
than many other investments, and they are more volatile (perhaps you’ve noticed some
gyrations in the stock market lately?). that’s why many financial experts tout asset allocation.
They tell us that asset allocation i.e., investing assets classes (such as stocks, bonds and cash)
and across international borders (which means in the U.S and in other countries) is critical for
making over the long haul and protecting our assets from market downturns.

7
 Advantages of Mutual Funds:

• Diversification
Using mutual funds can help an investor diversify their portfolio with a minimum
investment. When investing in a single fund, an investor is actually investing in numerous
securities. Spreading your investment across a range of securities can help to reduce risk. A
stock mutual fund, for example , invest in many stocks – hundreds or even thousands. This
minimizes the risk attributed to a concentrated position. If a few securities in the mutual fund
lose value or becomes worthless, the loss may be offset by other securities that appreciate in
value. Further diversification can be achieved by investing in multiple funds which invest in
different sectors or categories. This helps to reduce the risk associated with a specific
industry or category. Diversification may help to reduce risk but will never completely
eliminate it. It is possible to lose all or part of your investment.
• Professional Management

Mutual funds are managed and supervised by investment professionals. As per the stated
objectives set forth in the prospectus, along with prevailing market conditions and other factors,
the mutual fund manager will decide when to buy or sell securities. This eliminates the investor
of the difficult task of trying to time the market. Furthermore, mutual funds can eliminate the
cost an investor would incur when proper due diligence is given to researching securities . This
cost of managing numerous securities is dispersed among all the investors according to the
amount of shares they own with a fraction of each dollar invested used to cover the expenses of
the fund. What does this mean? Fund manager have more money to research more securities
more in depth than the average investor.

• Convenience

With most mutual funds, buying and selling shares, changing distribution options, and
obtaining information can be accomplished conveniently by telephone, by mail, or online.
Although a fund’s shareholder is relieved of the day-to-day tasks involved in researching,
buying, and selling securities, an investor will still need to evaluated a mutual fund based on
investment goals and risk tolerance before making a purchase decision. Investors should always
read the prospectus carefully before investing in any mutual fund.

• Minimum Initial Investment

Most funds have a minimum initial purchase of $2,500 but some are as low $1,000.If you
purchase a mutual fund in an IRA, the minimum initial purchase requirement tends to be lower.

8
You can buy some funds for as little as $50 per month if you agree to dollar-cost average, or
invest a certain dollar amount each month or quarter.

Drawbacks of Mutual Funds :

• Fees and commissions: The Mutual funds charge administrative fees to meet the daily
expenses. Many funds charge brokerage or ‘loads’ to pay financial planners or financial
consultants, brokers. In case a shareholder does not use the services of financial adviser,
he still has to pay a sales commission.

• No Guarantee: All investments bear risk factors. The Mutual Funds are no different. It
depends on the stock market. A fall in the stock market would trigger a fall in the value
of the mutual fund shares. Although the risk factor pertaining to Mutual Funds are much
lower compared to Mutual Funds.

• Inefficiency of cash Reserves: The Mutual Funds maintain big cash reserves, for
situations such as number of large withdrawals. The investors are provided with liquidity,
and a major portion of the financial resources is maintained as cash, and it is not invested
in some assets

• Management risk: The investment pertaining to the Mutual Funds depends on the fund
manager and his selection of the mutual fund portfolio, which is based on speculation. If
things do not go as expected, the investments may not earn enough money.

• Taxes: The proceeds from the sale of mutual funds are taxable, even if the same is
reinvested in mutual funds.

• No Insurance: The Mutual Funds are regulated by the Central Government. However
mutual funds are still not insured against losses.

• Trading Limitations: The Mutual Funds usually have high liquidity, but most of the
mutual funds, such as open-ended funds, are bought or sold at the end of the day.
• Loss of Control: In case, if the mutual funds are manage by the investor himself, the
portfolio management may go bad and have an adverse effect on the earnings from the
investment.

9
How Mutual Funds are Bought and Sold ?

Shares of mutual funds can be bought and sold :

• Directly through the companies that manage the funds.

• Through discount or full-service brokers.

• Through an employer-sponsored retirement plan.

• You should never be charged a transaction fee when you deal directly with a
company that manages the a fund.

• You should never be charged a transaction fee when you purchase shares in an
employer-sponsored retirement plan.

• You may have to pay a small transaction fee if you trade through a discount broker.

• You will pay a full commission if you trade through full-service broker.

• Mutual Funds shares are purchased and redeemed at their NAV, as described
above.

Automatic investments and withdrawals are an option available with many fund
companies. However, these options require establishing an account with the fund company.

The Cost of Investing in Mutual Funds

An individual investor choosing a Mutual fund should not only considered the fund’s
stated investments policy and past performance but also its management fees and other
expenses. They should be aware of :

• Fees structure

• 12b-1 charges

• Fees and Mutual Fund Returns

10
 • Fees Structure

The various loads effectively reduced the amount of money invested. Fees structure of
Mutual Fund includes :

• Front –end Load: It is a commission or sale charges paid of mutual fund is

purchased. In practice, front-end loads are not higher than 6%.

• Low-load Funds: These funds have loads that range up to 3% of the invested
funds.

• No -load funds: These funds have no front-end sale charges.

• Back -End Load: It is redemption or “exit” fees incurred when mutual fund is sold.
Generally, funds that impose back-end loads start at 5% or 6% and reduce them by
1% every the funds are left invested. These charges are known as “Contingent
Deferred Sales Charges”

• 12b-1 Charges

SEC allows the managers of 12b-1 funds to use asset to pay for distribution costs
such as :

• Advertising

• Promotion including annual reports and prospectus, commissions paid to brokers.

• 12b-1 fees are paid and annually as compared to loads charges which are paid only
once for each purchase.

• Fees and Mutual Fund Returns

The rate of return on an investment in a mutual fund is measured as the increase or

decrease in net asset value plus income distribution such as dividends or
distribution of capital gains expressed as fraction of net asset value at the
beginning of the investment period.

NAV1 – NAV0 + Income & Capital Gain Distributions

Rate of Returns =
NAV0

11
NAV1 = NAV at the start of the period

NAV0 = NAV at the end of the period

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

2. Systematic Transfer Plan:

Under this an investor invests in debt oriented fund and gives instructions to transfer a
fixed sum, at affixed interval, to an equity scheme of the same mutual fund.

3. Systematic Withdrawal Plan:

If someone wishes to withdraw from a mutual fund then he can withdraw a fixed
amount each month.

R SECTORAL FUNDS
E
T EQUITY FUNDS
U
R INDEX FUNDS
N
S BALANCED FUNDS

DEBT FUND

LIQUID FUNDS

RISK

12
 Objectives of the study
• The objective of the research is to study and analyze the preference level of investors of
Mutual funds of various Assets Management Company.

• To know the preference for the portfolio.

• To get insight knowledge about mutual funds.

• To know why one has invested or not invested in HDFC Mutual fund.

• To find out the most performed channel.

• To know the mutual funds performance levels in the present market.

• To analyze the comparative study between other leading mutual fund in the present
market.

• This study provides a proper investigation for logical and reasonable comparison and
selection of the funds.

• To find out what should do to boost Mutual fund Industry.

The investor do not evaluate all possible product attributes while making a choice, but
the marketer’s search is for identification of “The key buying criteria” or “The key choice
Criteria” which are defined as certain features of a product offering that are closely associated
with preferences. This study aims at tracking investor’s preference and priorities towards
different types of mutual fund products. An attempt has also been made to differentiate between
the factors which have been considered by the investors who have been investing for less than a
year and the ones who have been investing for more than a year.

Scope of the study

13
 A big boom has been witnessed in Mutual Fund Industry in recent times. A large number
of new players have entered the market and trying to gain market share in this rapidly improving
market.

The study will help me to know the preference of the customers, which Company
portfolio, and mode of Investment option for getting return and so as they prefer. This Project
Report may help us to understand the various aspect to consider while investing in Mutual Fund.

Literature Review

Literature on mutual fund performance evaluation is enormous. A few research studies

that have influenced the preparation of this paper substantially are discussed in this section.

Sharpe, William F.(1966) suggested a measure for the evaluation of portfolio performance.
Drawing on results obtained in the field of portfolio analysis, economist Jack

L. Trey nor has suggested a knew predictor of mutual fund performance, one that differ from
virtually all those used previously by incorporating the volatility of a funds return in a simple yet
meaningful manner. Michel C. Jensen (1967) derived a risk-adjusted measure of portfolio
performance (Jensen’s alpha) that estimates how much a manager’s forecasting ability to fund’s
returns. As indicated by Statesman (2000), the fund portfolio is the excess return of the portfolio
over the return of the benchmark index, where the portfolio is leveraged to have the benchmark
index’s standard deviation. S. Narayan Rao, evaluated performance of India Mutual Fund in a
bear market through relative performance index, risk-return analysis, treynor’s ratio,sharpe’s
ratio,sharpe’s measure,Jensen’s measure,and Fama’s measures.The study used to 269 open-
ended schemes(out of total schemes of 433) for computing relative performance index.then after
excluding funds whose returns are less than risk-free returns,58 schemes are finally used for
further analysis. The result of performance measures suggest that most of mutual fund schemes
in the sample of 58 were able to satisfy investor’s expectations by giving excess return over
expected returns based on both premium for systematic risk and total risk. Bijan Roy conducted
empirical study on conditional performance of Indian Mutual Funds. This paper uses a technique
called conditional performance evaluation on a sample of eighty-nine Indian Mutual Fund
schemes. This paper measures the performance of various mutual funds with both unconditional
and conditional form CAPM, Treynor-Mazuy model and Henriksson-Merton model. The effect
of incorporating lagged information variables into the evaluation of mutual fund managers’
performance is examined in the Indian context. The result suggest that the use of conditioning
lagged information variables improves the performance of mutual fund schemes, causing
alphasto shift towards right and reducing the number of negative timing coefficient.
Mishra(2002) measured mutual fund performance using lower partial moment. In this paper,

14
measures of evaluating portfolio performance based on lower partial moment are developed.
Risk from the lower partial moment is measured by taking into account only those states in
which return is below a pre-specified “target rate” like risk-free rate. K. Fernandes (2003)
evaluated index fund implementation in India. In this paper, tracking error of index funds in
India is measured. The consistency and level of tracking errors obtained by some well-run index
fund suggest that it is possible to attain low levels of tracking error under Indian conditions. At
the same time, there do seem to be periods where certain index funds appear to depart from the
discipline of indexation. K. Pendaraki studied construction of mutual funds portfolios, developed
a multi-criteria methodology and applied it to the Greek market of equity mutual funds. The
methodology is based on the combination of discrete and continuous multi-criteria decision aid
methods for mutual fund selection and composition. UTADIS multi-criteria decision aid method
is employed in order to develop mutual fund’s performance models. Goal programming model is
employed to determine proportion of selected mutual funds in the final portfolios.

Zakri Y. Bello (2005) matched a sample of socially responsible stock mutual funds
matched to randomly select conventional funds of similar net assets to investigate differences in
characteristics of assets held, degree of portfolio diversification and variable effects of
diversification on investment performance. The study found that socially responsible funds

do not differ significantly from conventional funds in terms of any of these attributes. Moreover,
the effects of diversification on investment performance is not different between the two groups.
Both groups underperformed the Domini 400 Social Index S & P 500 during the study period.

Research Methodology

This report is based on secondary data, one of the most important user of Research
Methodology is that is helps in identifying the problem, collecting, analyzing, the required
information data and providing an alternative solution to the problem. It also helps in collecting
the vital information that is required by the top management to assist them for the better decision
making both day to day decision and critical ones.BY USING BAR CHART,PAI CHART N
GRAPH.

Data Sources:

Research is totally based on secondary data. Indirect collection data from sources
containing past or recent past information like AMC’s Brochures, Annual Publications Books,
Fact Sheets of Mutual Funds, Newspaper & Magazines, Websites, etc.

Duration of Study:

The study was carried out for a period of 4 months, from 1st October, 2012 to 28th January,
2013.

15
Limitations of the Project
1. Possibility of error in data collection because the data were collected from secondary sources.

2. Most of the data sources were not liable so the reliability of the data is doubtful.

3. Unsuitable aggregations and definitions caused by the huge number of unnecessary data
available.

4. The information may not perfectly suit our research objective.

5. The information can be biased as there is lack of real control over data quality.

16
 CONCEPTUAL FRAMEWORK
BACKGROUND OF THE COMPANY

HDFC Asset Management Company Limited (AMC)

HDFC Asset Management Company Ltd (AMC) was incorporated under the Companies Act, 1956, on
December 10, 1999, and was approved to act as an Asset Management Company for the HDFC Mutual
Fund by SEBI vide its letter dated July 3, 2000.

The registered office of the AMC is situated at Ramon House, 3rd Floor, H.T. Parekh Marg, 169, Backbay
Reclamation, Churchgate, Mumbai - 400 020.

In terms of the Investment Management Agreement, the Trustee has appointed the HDFC Asset
Management Company Limited to manage the Mutual Fund. The paid up capital of the AMC is Rs.
25.169 crore.

The present equity shareholding pattern of the AMC is as follows :

Particulars % of the paid up equity capital

Housing Development Finance Corporation Limited 59.98

Standard Life Investments Limited 39.99

Other Shareholders (shares issued on exercise of Stock Options) 0.03

HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (HDFC)

HDFC Ltd. was incorporated in 1977 as the first specialised mortgage company in India.
HDFC provides financial assistance to individuals, corporates and developers for the
purchase or construction of residential housing. It also provides property related services (e.g.
property identification, sales services and valuation), training and consultancy. Of these
activities, housing finance remains the dominant activity. HDFC has a client base of around
13 lac borrowers, over 11 lac depositors, over 2.09 lac shareholders and over 25,000 deposit
agents, as at March 31, 2012. The Company has a total asset size of Rs.1,67,250 crore as

17
at March 31, 2012 and cumulative approvals and disbursements of housing loans of
Rs.4,63,400 crore and Rs.3,73,646 crore respectively as at March 31, 2012.
HDFC had raised funds from international agencies such as the World Bank, IFC
(Washington), USAID, DEG, ADB and KfW, international syndicated loans, domestic term
loans from banks and insurance companies, bonds and deposits. HDFC has received the
highest rating for its bonds and deposits program for the Seventeenth year in succession.
HDFC Life Insurance Company Limited, promoted by HDFC was the first life insurance
company in the private sector to be granted a Certificate of Registration (on October 23,
2000) by the Insurance Regulatory and Development Authority to transact life insurance
business in India.
STANDARD LIFE INVESTMENTS LIMITED
The Standard Life Assurance Company was established in 1825 and has considerable
experience in global financial markets. The company was present in the Indian life insurance
market from 1847 to 1938 when agencies were set up in Kolkata and Mumbai. The company
re-entered the Indian market in 1995, when an agreement was signed with HDFC to launch
an insurance joint venture.
In April 2006, the Board of The Standard Life Assurance Company recommended that it
should demutualise and Standard Life plc float on the London Stock Exchange. At a Special
General Meeting held in May voting members overwhelmingly voted in favour of this. The
Court of Session in Scotland approved this in June and Standard Life plc floated on the
London Stock Exchange on 10 July 2006.
Standard Life Investments was launched as an investment management company in 1998. It
is the dedicated investment management company of the Standard Life group and is a wholly
owned subsidiary of Standard Life Investments (Holdings) Limited, which in turn is a wholly
owned subsidiary of Standard Life plc.
With global assets under management of approximately US$240.7 billion (£154.9 billion) as
at December 31, 2011, Standard Life Investments Limited is one of the world's major
investment companies, operating in the UK, Canada, Hong Kong, China, Korea, Ireland,
Australia and the USA, and is responsible for investing money on behalf of five million retail
and institutional clients worldwide.
In order to meet the different needs and risk profiles of its clients, Standard Life Investments
Limited manages a diverse portfolio covering all of the major markets world-wide, which
includes a range of private and public equities, government and company bonds, property
investments and various derivative instruments. The company's current holdings in UK
equities account for approximately 1.8% of the market capitalisation of the London Stock
Exchange.

Indian Scenario

HDFC Asset Management Company is one of the largest mutual fund with an average asset
under management of Rs.89,879 crores as on 31st March, 2012. The company manages a
comprehensive range of mutual fund schemes and portfolio management services to meet the

18
varying investment needs of the its investor’s through its various branches and 196 CAMS
official point of transaction acceptance spread across country.

International Scenario

• Investment in Different Assets Management Company

Name of Asset Management Company % of Investor

SBI Mutual Fund 13.55

UTI 18.47

ICICI Prudential Mutual Fund 13.80

Reliance 18.47

HDFC 7.39

Kotak 11.08

Others 17.24
• Preference of Investment for Future Investment in Mutual Fund

Name of Asset Management Company % of Investors

SBI Mutual Fund 16.78

UTI 9.93

ICICI Prudential Mutual Fund 17.65

Reliance 18.10

HDFC 7.73

19
 Kotak 13.25

Others 16.56

DATA ANALYSIS
• Investors Invested in Different Kinds of Investments:

Kinds of Investments % of Investments

Savings Account 23.35

Fixed Deposits 17.72

Insurance 18.20

Mutual Fund 14.37

Post Office 8.98

Shares or Debentures 6.00

Gold or Silver 3.59

Real Estate 7.79

• Preferred Portfolios by the Investors

Name of Asset Management Company % of Investors

Equity 46.67

Debt 16.66

Balanced 36.67

RESULTS-PREFERABLE

20
 • HDFC Equity Fund ( Growth) Returns (NAV as on Feb-12-2013):
Period Returns (%) Rank

1 month - 5.4 73

3 month 6.2 18

6 month 11.7 24

1 year 5.7 58

2 year 3.3 64

3 year 9.2 22

5 year 9.2 6

HDFC Equity Fund ( Growth) Returns

• Absolute Returns (in %) for the year 2012 of Various Schemes of HDFC Mutual Fund:

Schemes Absolute Returns (in %) for 2012

HDFC Growth Fund 27.5%

HDFC Tax Saver Fund 26.7%

HDFC Balanced Fund 26.3%

HDFC Top 200 Fund 32.1%

21
 HDFC Prudence Fund 29.7%

CONCLUSION & RECOMMENDATION

In order to study the concept mutual fund we should note that a mutual fund is a trust
that pools the money of several investors and manages investments on behalf. The fund
collects this money from investors through various schemes. Each scheme is differentiated by
its objectives of investments or in other words a broadly defined purpose of how the collected
money is going to be involved. Investors invest in mutual fund due to following advantages:
they have professional management, diversification, convenient, return potential, low cost,
liquidity. By comparing the above mentioned schemes I came to know the risk and return
relation between the specified schemes.

The standard deviation helps to understand the volatility of market. Investor can averse the
risk of their existing investment. It also helps to measuring the degree to which the fund
fluctuates in relation to its mean return but investor get more returns as compare to other
schemes. A Birla and Franklin Equity Fund has less risk but get more return to investor.

Therefore investor before investing in any Mutual Fund schemes they should study the risk
and return relation and if the risk and returns is been matched with their planning, then only
the investors should go for Mutual Fund Schemes.

According to me investors needs to focus on risk, return and value of his schemes and keep in
mind that fund’s risk and expenses are easier to analysis for good returns.

Running a successful Mutual Fund requires complete understanding of the peculiarities of

Indian Stock Market and also the psyche of the small investors. They think their money will not
be secure in Mutual fund. They need the knowledge of Mutual Fund and its related terms.
Many of people do not have invested in mutual fund due to lack of awareness although they
have money to invest. As the awareness and income is growing the number of mutual fund
investors are also growing. “Brand” plays important role for the investment.

People invest in those Companies where they have faith or they are well known with them.
There are many ACMs in India but only some are performing well due to Brand awareness and
HDFC Mutual Fund is one of them. Some ACMs are not performing well although some of the
schemes of them are giving good return because of not awareness about Brand. Reliance, UTI,
SBI Mutual Fund, ICICI Prudential Mutual Fund, HDFC, etc, they are well known brands, they
are performing well and their Assets Under Management is larger than other whose Brand
name are not well known like Principle, Sundaram, etc. Financial advisors are the most
preferred channel for the investment in mutual fund. They can change investor’ mind from
one investment option to other. Many of investors directly invest their money through ACM

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because they do not have to pay entry load. Only those people invest directly who know well
about mutual fund and its operation and those have time.

BIBILI0GRAPHY
BOOKS :

 Gruber, M. J. 1996. Another Puzzle: The Growth in Actively Managed Mutual Funds. Journal of
Finance 51 (July): 783-810.
 Henriksson, R. D. 1984. Market Timing and Mutual Fund Performance: An Empirical
Investigation. Journal of Business 57 (January): 73-96.
 Malkiel, B. G. 1995. Returns from Investing in Equity Mutual Funds 1971 to 1991. Journal of
Finance 50 (June): 549-572.
 Sharpe, W. F. 1966. Mutual Fund Performance. Journal of Business 39 (January): 119-138.
 Volkman, D. A., and Wohar, M. E. 1996. Abnormal Profits and Relative Strength in Mutual Fund
Returns. Review of Financial Economics 5 (January): 101-116.

NEWS PAPERS & MAGAZINES:

 New York Times

 Economic Times
 Business World 23

WEBSITES ACCESSED:

 http://www.wikipedia.org
 http://www.investomepedia.com
 http://www.google.com
 http://www.nytimes.com
 http://www.frontlinethoughts.com
 http://www.ecoanalysis.com

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