S UMMER INTERNS HIPPROGRAM SUMMER INTERNSHIP PROGRAM

2009

INDUSTRY: FINANCE FINANCE D ORGANISATION: HDFC MUTUAL FUN FUND

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PROJECT REPORT ON PROJECT REPORT ON A A COMPARATI VE ANALYSI S COMPARATIVE ANALYSIS OF HDFC MUTUAL FUND WI TH COMPARI SION OF HDFC MUTUAL FUND WITH COMPARISIONTHER MUTUAL FUND WI TH O WITH OTHER MUTUAL FUND TY OF JAMSHEDPUR IIN CI N CITY OF JAMSHEDPUR

AR EPOR UBMITTE TS DINPAR IN PARTIAL FULFILLMENT OF UL IL MENTOFTH E A REPORT SUBMITTEDTIALF F L THE R EQUIR EMENTOFPOF PGDMAM OF OGR PROGRAM REQUIREMENT GDMPR OF KOUS TUVBUS INES CHOOL SS KOUSTUV BUSINESS SCHOOL

SUBM T E T : SUBMITTED TO: F C L Y UD P O . O A P UE H K UT V UI E S C O L H B N S A BHUBANESWA R S B I T D Y O A K M R G GOPAL KUMAR R A M AGARWAL0 2 DMO S U 0829 S S H B SN KOUSTUV BUSINESS O H SCHOOL B N S A BHUBANESWA R R J C G PROJECT I E S A LGUIDEM R A S L S K H F M T A F N A S E P R JAMSHEDPU R

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KOUSTUV BUSINESS SCHOOL BHUBANESWA R June`200 9

DECLARATION DECLARATIO N
I hereby declare that the projects entitled ^A Comparative hereby declare that the projects entitled ^ A Comparative study on the performance between two sectorialsectorial funds in _ study on the performance between two funds in Jamshedpur Jamshedpur DF conducted at H_ HDFC MUTUAL FUND prepared by prepared by me during UNDhas been has been me duringthe conducted at CMUTUALF the academic year 2009-10 underunder the able guidance of my faculty academic year 2009-10 the able guidance of my faculty guide guide GOPAL Prof. GOP PR ETH and my project mentor Mr. Mr. SHAILESH H ES UMAR Prof. AL US and my project mentor S AIL H K PRUSETH KUMAR BANS . AL BANSAL . I also declare that this project is theresult of myeffort my also declare that this project is the result of and has not effort submitted to any other University or Institution for been submitted to any other Universityor Institution for the and has not been the award of any degr e o p oro a f v r w a s ewhatsoever.al a d details award of any degree, r personal favors e . l t e e All the and a ay i p o i e i t e e o t o d r e o h b s o m k o l d e

l c : Place: h b n s a Bhubaneswar ae J n 2 Date: June 0 2009

O A K M R G GOPAL KUMAR R A AGARWAL

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CERTIFICATE BY GUIDE
This is to certify that the following student is submitting the project report ]oA A ^A A C}u]A A A }vA ZA (}uvA vA }A }]oA funds in Jamshedpur. It is the original and bonafide work submitted in partial fulfillment of the requirement for the award of PGDM program.

Prof. GOPAL PRUSETH (Project Guide) KBS, Bhubaneswar

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ACKNOWLEDGEMENT
In the course of this project I got an insight into the mutual fund industry, came to know a lot about the basic working of an asset management company, understood how the mutual funds of different fund houses are compared, learnt various computations and overall gotof what a job in the mutual fund industry would a preview entail. First and foremost I am very proud to be a student of Koustuv Business School, Bhubaneswar and am most grateful for having been the chance to work with a reputed company like HDFC given MUTUAL the beginning of my FUND at career. /A }oA (]oA }A }A uA A ](A /A ]v[A lA Z]A }}v]A }A thank my faculty guide, Prof. Gopal Sir for his timely help and guidance. Ito thank him whole heartedly for making me work would like harder so a more in depth knowledge of the subject which I am sure as to gain will me a lot in the long run as well. I would say that this help project }ov[A ZA vA ZA uA ]Z}A Z]A }UA P]vUA encouragement and constant demand for improvement. My company guide, Mr. Shailesh Kumar Bansal, Manager is another person who has played a key role in the development of me as a person, in the completion of this project and in being educated about the mutual fund industry in general. Without the knowledge, attention that he has bestowed on me, this project would simply and time have impossible. He is truly an inspiration for me and drove me been towards harder than my expectations which simply made me working more for the corporate life. He truly gave me the corporate ready exposure I had thought of. DAlv}oPuvA}oAA]v}uoA](A/A my team]v[AZvlA mates. During the course of this SIP we have developed a which was very healthy and enjoyable. I am grateful camaraderie for }v[A}AvAZelp when needed. Without them this training have been the would not GOPAL KUMAR AGARWAL same.

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EXECUTIVE SUMMARY
The significan outcom o the governmen polic o t e f t y f liberalization in industrial and financial sector has been the development of new financial instruments. These new instruments are expected to impart greater competitiveness flexibility and efficiency to the financial sector. Growth and development of various mutual fund products in Indian capital market has proved to be one of the most catalytic instruments in generating momentous investment growth in the capital market. There is a substantial growth in the mutual fund market due to a high level of precision in the design and marketing of variety of mutual fund products by banks and other financial institution providing growth, liquidity and return. In this context, prioritization, preference building and close monitoring of mutual funds are essentials for fund managers to make this the strongest and most preferred instrument in Indian capital market for the coming years. With the decline in the bank interest rates, frequent fluctuations in the secondary market and the inherent attitude of Indian small investors to avoid risk, it is important on the part of fund managers and mutual fund product designers to combine various elements of liquidity, return and security in making mutual fund products the best possible alternative for the small investors in Indian market . Ther are various parameters an investo shoul e which r d consider before investing in mutual funds. The comparative analysis between two mutual fund will help the investor to take appropriate decision before investing in mutual funds.

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TABLE OF CONTENTS
DECLARATION CERTIFICATE BY GUIDE ACKNOWLEDGEMENT EXECUTIVE SUMMARY TOPICS # 1. INTRODUCTION 2. ORGANISATION OF MUTUAL FUND 3. CHARACTERISTICS OF MUTUAL FUND 4. OBJECTIVES OF MUTUAL FUND 5. STRUCTURE OF MUTUAL FUND 6. INVESTOR PROFILE 7. FACTORS IMPACTING THE INDUSTRY 8. OPPURTUNITIES & THREATS 9. BENEFITS OF MUTUAL FUND 10.CATEGORIES OF MUTUAL FUND 11.THE WAY TO INVEST IN MUTUAL FUND 12.LEGAL FRAMEWORK OF SEBI 13.REGULATORY OF MUTUAL FUND 14.MUTUAL FUND IN INDIA AT A GLANCE 15.COMPANY DETAIL 16.COMPETITOR ANALYSIS 62 PG NO. 10 12 13 14 14 17 18 20 22 26 31 32 34 37 42 57

17.COMPARATIVE ANALYSIS BETWEEN HDFC & TATA

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18.FUTURE GROWTH DRIVERS 19.FINANCIAL ANALYSES 20.CONCLUSION 21.SUGGESTIONS 22.GLOSSARY 23.BIBLIOGRAPHY 79 24.QUESTIONAIRE

68 71 74 75 77 78

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PART A INDUSTRY OVERVIEW

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INTRODUCTION

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. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them. 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.

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A Mutual Fund is a body corporate registered with the Securities and Exchange Board of India (SEBI) that pools up the money from individual/corporate investors and invests the same on behalf of the investors/unit holders, in Equity shares, Government securities, Bonds, Call Money Markets etc, and distributes the profits. In the other words, a Mutual Fund allows investors to indirectly take a position in a basket of assets. Mutual Fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with as disclosed in document Investment in objectives offer . s securities are spread among a wide cross-section of industries and sectors thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at same time. Investors of mutual funds are known as unit holders. The investors in proportion to their investments share the profits or losses. The mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time. A Mutual Fund is required to be registered with Securities Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public.

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11

ORGANISATION OF A MUTUAL FUND:There are many entities involved and the diagram below illustrates the organizational set up of a Mutual Fund:

Mutual Funds diversify their risk by holding a portfolio of instead of only one asset. This is because by holding all your money in just one asset, the entire fortunes of your portfolio depend on this one asset. By creating a portfolio of a variety of assets, this risk is substantially reduced . Mutual Fund investments are not totally risk free. In fact, investing in Mutual Funds contains the same risk as investing in the markets the only being du to , difference that e professional management of funds the controllable risks are substantially reduced. A very important risk involved in Mutual Fund investments is the market risk. However, the company specific risks are largely eliminated due to professional fund management.

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CHARACTERISTICS OF A MUTUAL FUND: A Mutual Fund actually belongs to the investors who have pooled their funds. The ownership of the mutual fund is in the hands of the Investors. A Mutual Fund is managed by investment professional and other providers, who earns a fee for their services, from Service the funds . The pool of Funds is invested in a portfolio of marketable investments . The value of the portfolio is updated every day. dZA]v}[AZA]vAZA(vA]Av}u]vAA^v]_XAd ZA value of the units changes with change in the portfolio value, day. The value of one unit of investment is called net every asset value (NAV). The investment portfolio of the mutual fund is created according to the stated Investment objectives of the Fund.

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OBJECTIVES OF A MUTUAL FUND: To Provide an opportunity for lower income groups to acquire without much difficulty, property in the form of shares. To Cater mainly of the need of individual investors, whose means are small? To Manage investors portfolio that provides regular income, growth, Safety, liquidity, tax advantage, professional management and diversification.

STRUCTURE OF A MUTUAL FUND:-

THE STRUCTURE CONSISTS OF: 14| Page

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SPONSOR : Sponsor is the person who acting alone or in combination with another body corporate establishes a mutual fund. Sponsor must contribute at least 40% of the net worth of the Investment managed and meet the eligibility criteria prescribed under the Securities and Exchange Board of India (Mutual Fund) Regulations, 1996. The sponsor is not responsible or liable for any loss or shortfall resulting from the operation of the Schemes beyond the initial contribution made by it towards setting up of the Mutual Fund. TRUST: The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered under the Indian Registration Act, 1908. TRUSTEE : Trustee is usually a company (corporate body) or a Board of Trustees (body of individuals). The main responsibility of the Trustee is to safeguard the interest of the unit holders and ensure that the AMC functions in the interest of investors and in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 19 , the provisions of the Trust Deed and the Offer Documents of 96 the respective Schemes. At least director o the Trustee 2/3rd s f are independent directors who are not associated with the Sponsor in any manner.

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ASSET MANAGEMENT COMPANY (AMC): The AMC is appointed by the Trustee as the Investment Manager of the Mutual Fund. The AMC is required to be approved by the Securities and Exchange Board of India (SEBI) to act as an asset management company of the Mutual Fund. At least 50% of the directors of the AMC are independent directors who are not associated with the Sponsor in any manner. The AMC must have a net worth of at least 10 cores at all times.

REGISTRAR AND TRANSFER AGENT: The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent to the Mutual Fund. The Registrar processes the applicatio form redemptio request an dispatche accoun n , n s d s t statements to the unit holders. The Registrar and Transfer agent also handles communications with investors and updates investor records.

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INVESTORS PROFILE:
An investo normall prioritize hi investmen need befor r y s s t s e undertaking an investment. So different goals will be allocated to different proportions of the total disposable amount. Investments for specific goals normally find their way into the debt market as risk reduction is of prime importance, this is the area for the riskaverse investors and here, Mutual Funds are generally the best option. One can avail of the benefits of better returns with added benefits of anytime liquidity by investing in open-ended debt funds at lower risk, this risk of default by any company that one has chosen to invest in, can be minimized by investing in Mutual Funds as the fund managers analyze the companies financials more minutely than an individual can do as they have the expertise to do so. Moving up the risk spectrum, there are people who would like to take some risk and invest in equity funds/capital market. However, since their appetite for risk is also limited, they would rather have some exposure to debt as well. For these investors, balanced funds provide an easy route of investment, armed with expertise of investment techniques, they can invest in equity as well as good quality debt thereby reducing risks and providing the investor with better returns than he could otherwise manage. Since they can reshuffle their portfoli a pe marke conditions, ar likel to generat o s r t they e y e moderate returns even in pessimistic market conditions.

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Next comes the risk takers, risk takers by their nature, would not be averse to investing in high-risk avenues. Capital markets find their fancy more often than not, because they have historically generated better returns than any other avenue, provided, the money was judiciously invested. Though the risk associated is generally on the higher side of the spectrum, the return-potential compensates for the risk attached.

FACTORS IMPACTING THE INDUSTRY:

PEST Analysis: Political Factors: a Government Regulation: SEBI regulates the industry and ) every decision taken by them impact the industry very quickly. b Stable constituency: The mutual fund industry can take long ) term decision if the government is stable. c Fiscal policy: tax structure plays a very important role in ) the growth of the industry .If the tax structure will be high than there will be less savings and investment. We have seen the interest rate reducing continuously which boost the industry to sell products which are better than the FDs, PF, NSC and KVPs.

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Economic factors: d Market performance: The last five years witnessed a sharp ) rise in the markets. The mutual fund industry basically works parallel with the markets. Suppose, if the markets always be on downside, then the investors will not be so comfortable to invest. This will reduce the market size drastically. e Global Standards: As the industry will grow better, India ) being a global economy, the MF industry has to match to the global mature MF markets. They have to give due emphasis on product innovation, cost reduction and penetration. f Inflation: price rise affects interest rate and reduces the ) chances of investment. Social factors: g Consumer behaviour: this is very unpredictable and ) based on sentiments gets changed very frequently, which sometimes makes selling of products difficult. h) Income: The rich people are in bigger cities, so the mutual fund industry is much more concentrated there. Technological factors: This is the era of information technology and due to net banking, online transaction, online RTGS, clearing system helps the industry a lot.

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OPPORTUNITIES AND THREATS:a Real Estate sector boom: The Real estate has always been ) one of the preferred investment avenues for the Indian investor. And what better way for the smaller investors to participate in this boom than to have a real estate mutual fund. AMC has to come up with the structured products in this segment and should take competitive advantage. b Penetration to Rural markets: The industry has to take ) themselves to the local and rural markets to increase the market size. Also, the cost of setting up business in bigger cities is huge compare to smaller cities. This will reduce the AMC business cost. c Concentration of Corporate Investors: Mutual funds have ) become overly attractive to corporate investors because of higher returns than bank deposits and ability to distribute capital gains tax. Corporate investors account for more than 55% of the AUM (by value).It is clear that lac o growth in funds the k f under management in India is because of the absence of long term investors.Corporate investors take profits frequently resulting in destruction in the compound growth in funds under management. Distributors are to pass on more to forced commissions companies, while fund companies are compelled to offer funds with wafer thin margins.

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d Retail investors lose out in the sense that they continue to ) pay higher expenses. e Higher Returns of Alternative Debt Instruments: ) Government guaranteed schemes provide risk free returns at competitive rates of returns. This is why mutual funds have difficulty competing retail business. f Huge scope for expansion: There are only 33 AMC which is ) very small figure compared to the mature markets. g Distribution: One of the major factors impacting the ) growth of mutual industry is the o any in fund absence f regulation distributio o mutualfunds.Mutu fun investor nee n f al d s d distributors who are able to inform them about the efficacy of distribution product for a particular risk profile and stage in life cycle. Lack of distributor awareness and the absence of any disclosures from distributors make misselling of MF products commonplace.

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BENEFITS OF MUTUAL FUND

There are numerous benefits of investing in mutual funds and one of the key reasons for its phenomenal success in the developed markets like US and UK is the range of benefits they offer, which are unmatched by most other investment avenues. We have explained the key benefits in this section. The benefits have been broadly split into universal benefits, applicable to all schemes and benefits applicable specifically to openended schemes.

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1. AFFORDABILIT Y A mutual fund invests in a portfolio of assets, i.e. bonds, shares, etc. depending upon the investment objective of the scheme. An investor can buy in to a portfolio of equities, which would otherwise be extremely expensive. Each unit holder thus gets an exposure to such portfolios with an investment as modest as Rs.500/-. This amount today would get you less than quarter of an Infosys share! Thus it would be affordable for an investor to build a portfolio of investments through a mutual fund rather than investing directly in the stock market. 2. DIVERSIFICATIO N The nuclear weapon in your arsenal for your fight against Risk. It simply means that you must spread your investment across different securities (stocks, bonds, money market instruments, real estate, fixed deposits etc.) and different sectors (auto, textile, information technology etc.). This kind of a diversification may add to the stability of your returns, for example during one period of time equities might under perform but bonds and money market instruments might do well enough to offset the effect of a slump in the equity markets. Similarly the information technology sector might be faring poorly but the auto and textile sectors might do well and may protect your principal investment as well as help you meet your return objectives. 3. VARIETY Mutual funds offer a tremendous variety of schemes. This variety is beneficial in two ways: first, it offers different types of schemes to

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investors with different needs and risk appetites; Secondly, it offers an opportunity to an investor to invest sums across a variety of schemes, both debt and equity. For example, an investor can invest his money in a Growth Fun (equity an Incom Fun (deb scheme d scheme) d e d t ) depending on his risk appetite and thus create a balanced portfolio easily or simply just buy a Balanced Scheme. 4. PROFESSIONAL MANAGEMENT Qualified investment professionals who seek to maximize returns and minimize risk monitor investor's money. When you buy in to a mutual fund, you are handing your money to an investment professional that has experience in making investment decisions. It is the Fund Manager's job to (a) find the best securities for the fund, given the fund's stated investment objectives; and (b) keep track of investments and changes in market conditions and adjust the mix of the portfolio, as and when required . 5. TAX BENEFITS Any income distributed after March 31, 2002 will be subject to tax in the assessment of all Unit holders. However, as a measure of concession to Unit holders of open-ended equity-oriented funds, income distributions for the year ending March 31, 2003, will be taxed at a confessional rate of 10.5%. In case of Individuals and Hindu Undivided Families a deduction unto Rs. 9,000 from the Total Income will be admissible in respect of income from investments specified in Section 80L, including

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income from Units of the Mutual Fund. Units of the schemes are not subject to Wealth-Tax and GiftTax. 6. REGULATION S ^]]AZvPAB}A}(A/v]A~^^B/_UAZAuoA(v APo}A has clearly defined rules, which govern mutual funds. These rules relate to the formation, administration and management of mutual funds and also prescribe disclosure and accounting requirements. Such a high level of regulation seeks to protect the interest of investors. 7. CONVENTIONAL 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 Mutual Funds save your time and companies. make investing easy and convenient. Return Potential Over a medium to longterm; Mutual Funds have the potential to provide a higher return as they invest in a diversified basket of selected securities. 8. LIQUIDIT Y In open-ended mutual funds, you can redeem all or part of your units any time you wish. Some schemes do have a lock-in period where an investor cannot return the units until the completion of such a lock-in period.

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9. CONVENIENC E An investor can purchase or sell fund units directly from a fund, through a broker or a financial planner. The investor may opt for a Systematic IvuvA WovA ~^^/W_A }A A ^u]A t]ZoA vPA WovA ~^^tW_XA /vA ]]}vA }A Z]A vA ]v}A ]A }vA uv A and portfolios of the schemes.

CATEGORIES OF MUTUAL FUNDS:

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Mutual Fund can be classified as follows:Based on the Structure:1. OPEN-ENDED MUTUAL FUNDS: The holders of the shares in the Fund can resell them to the issuing Mutual Fund company at the time. They receive in turn the net assets value (NAV) of the shares at the time of re-sale. Such Mutual Fund Companies place their funds in the secondary securities market. They do not participate in new issue market as do pension funds or life insurance companies. Thus they influence market price of corporate securities. Open-end investment companies can sell an unlimited number of Shares and thus keep going larger. The openend Mutual Fund Company Buys or sells their shares. These companies sell new shares NAV plus a Loading or management fees and redeem shares at NAV.In other words, the target amount and the period both are indefinite in such funds. 2. CLOSED-ENDED MUTUAL FUNDS:A closedtend Fund is open for sale to investors for a specific period, after which further sales are closed. Any further transaction for buying the units or repurchasing them, Happen in the secondary markets where close en Fund ar listed Therefor new , d d s e . e investors buy from the existing investors, and existing investors can liquidate their units by selling them to other willing buyers. In a closed end Funds, thus the pool funds can technically be of kept constant.

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The asset management company (AMC) however, can buy out the units from the investors, in the secondary markets, thus reducing the amount of funds held by outside investors. The price at which units can be sold or redeemed Depends on the market prices, which are fundamentally linked to the NAV. Investors in closed end Funds receive either certificates or Depository receipts, for their holdings in a closed end mutual Fund. Based on their investment objective: These funds invest in equities and equity FUNDS: related instruments. With fluctuating share prices, such funds show volatile performance, even losses. However, short term fluctuations in the market, generally smoothens out in the long term, thereby offering higher returns at relatively lower volatility. At the same time, such funds can yield great capital appreciation as, historically, equities have outperformed all asset classes in the long term. Hence, investment in equity funds should be considered for a period of at least 3-5 years. It can be further classified as: i) Index funds- this case a key stock market index, like In BSE Sensex or Nifty is tracked. Their portfolio mirrors the benchmark index both in terms of composition and individual stock weightages. ii) Equity diversified 10 of the capital is invested in 0% fundsequities spreading across different sectors and stocks.

1.EQUITY

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iii) Dividend Yield funds-similar to the equity diversified It is funds except that they invest in companies offering high yield dividends. iv)Thematic fundsInvest 100% of the assets in sectors which are related through some theme. e.g. -An infrastructure fund invests in power, construction, cements sectors etc.Sector v) Invest 100% of the capital in a specific fundssector. e.g. - A banking sector fund will invest in banking stocks. vi) ELSSEquity Linked Saving Scheme provides tax benefit to the investors . 2.BALANCED Their investment portfolio includes both FUNDS: debt and equity. As a result, on the risk-return ladder, they fall between equity and debt funds. Balanced funds are the ideal mutual funds vehicle for investors who prefer spreading their risk across various instruments. Following are balanced funds classes: i) Debt-oriented funds Investment below 65% in equities. ii) Equity-oriented funds - at least 65% in equities, Invest remaining in debt. They invest only in debt instruments, and are a FUND: good option for investors averse to idea of taking risk associated with equities. Therefore, they invest exclusively in fixed-income instruments like bonds, debentures, Government of India securities; and money market instruments such as certificates of deposit (CD), commercial paper (CP)

3.DEBT

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and call money. Put your money into any of these debt funds depending on your investment horizon and needs. fundsi) Liquid These funds invest 100% in money market instruments, a large portion being invested in call money market.funds STii) Gilt They invest 100% of their portfolio in government securities of and Tbills. iii) Floating rate funds - in short-term debt papers. Invest Floaters invest in debt instruments which have variable coupon rate. iv)Arbitrage fund- generate income through They arbitrage opportunities due to mis-pricing between cash market and derivatives market. Funds are allocated to equities, derivatives and money markets. Higher proportion (around 75%) is put in money markets, in the absence of arbitrage opportunities. LTv) Gilt funds They invest 100% of their portfolio in longterm government securities. funds LTvi)Income Typically, such funds invest a major portion of the portfolio in long-term debt papers. vii) MIPsMonthly Income Plans have an exposure of 70%-90% to debt and an exposure of 10%-30% to equities. viii) FMPsfixed monthly plans invest in debt papers whose maturity is in line with that of the fund.

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THE WAY TO INVEST IN MUTUAL FUND

Mutual funds normally come out with an advertisement in newspapers publishing the date of launch of the new schemes. Investors can also contact the agents and distributors of mutual funds who are spread all over the country for necessary information and application forms. Forms can be deposited with mutual funds through the agents and distributors who provide such services. Now days, the post offices and banks also distribute the units of mutual funds. However, the investors may please note that the mutual funds schemes being marketed by banks and post offices should not be taken as their own schemes and no assurance of returns is given by them. The only role of banks and post offices is to help in. distribution of mutual funds schemes to the investors. Investors shoul not b carrie away b commission/gif give b d e d y ts n y agents/distributors for investing in a particular scheme. On the other hand they must consider the track record of the mutual fund and should take objective decision. ONE TIME INVESTMENT The amount that has to be invested in onetime is known as Onetime Investment. The investor has to pay the whole amount at once. The u]v]uuAu}vA]AZXAAvAu]uuA]AAAZA]v }[A Choice. This investment is generally preferred for the business man who Are able to pay at one time.

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SYSTEMATIC INVESTMENT PLAN (SIP) The amount that has to be invested through same monthly installment is known as Systematic Investment Plan. The investor has to pay the minimum amount Rs.1000 monthly for all equity and balanced schemes like that for 6months. And Rs.500 monthly for Tax Saver scheme like that for 12 months. The minimum amount that the investor has to invest is Rs6000 and maximum as per their choice. This type of investment is generally preferred for the salaried people.

LEGAL FRAME WORK OF SEBI & AMFI

REGULATORY ASPECTS OF MUTUAL FUNDS: In the year 1992, Securities and exchange Board of India (SEBI) Act was passed. The objectives of SEBI are t to protect the interest of investors in securities and to promote the development of and to regulate the securities market. SEBI formulates policies and regulates the mutual funds to protect the interest of the investors.

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GUIDELINES OF SEBI & AMFI Mutual funds are regulated by the SEBI (mutual Fund) Regulations, 1996 . SEBI is the regulator of all funds, except offshore funds. Bank-sponsored mutual funds are jointly regulated by SEBI and RBI. The bank-sponsored fund cannot provide a guarantee without RBI Permission . RBI regulates money and government securities markets, in which mutual Funds are invested. Listed mutual funds are subject to the listing regulations of stock exchange . Since the AMC and Trustee Company are companies, the Department of Company affairs regulate them. They have to send periodic reports to the ROC (Register of Companies) and the CLB (Company Law Board) is the appellate authority. Investors cannot sue the trust, as they are the same as the trust and v[AAZuo X UTI does not have a separate sponsor and AMC. UTI is governed by the UTI Act, 1963 and is voluntarily under SEBI Regulations . UTI can borrow as well as lend also engage in other financial services activities . Only AMFI certified agents can sell Mutual Fund units. Mutual Funds Company is required to update the NAV of the scheme on the AMFI website on a daily basis in case of open-ended scheme.

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REGULATORY OF MUTUAL FUND IN INDIA

SEBI The capital market 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. Recently, it has been decided that Money Market Mutual Funds of registered mutual funds will be by SEBI (Mutual regulated through Fund) Regulations 1996. RBI RBI, a supervisor of the Banks owned Mutual Funds-As banks in India come under the regulatory Jurisdiction of RBI, banks owned funds to be under supervision of RBI and SEBI. RBI has supervisory responsibility over all entities that operate in the money markets. MINISTRY OF FINANCE (MOF) Ministry of Finance ultimately supervises both the RBI and the SEBI and plays the role of apex authority for any major disputes over SEBI guidelines.

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COMPANY LOW BOARD Registrar of companies is called Company Low Board. AMCs of Mutual Funds are companies registered under the companies Act 1956 and therefore answerable to regulatory authorities empowered by the Companies Act. STOCK EXCHANGE Stock Exchanges are Self-regulatory organizations supervised by SEBI. Many 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 trustee or the Trustees Company is accountable to the office of public trustee, in turn reports to the which Charity commissioner.

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RISK V/S. RETURN:

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MUTUAL FUNDS IN INDIA AT A GLANCE

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 :-

PhasePhase-II I

Phases of Mutual Fund Industry in India

PhaseIV

PhaseIII

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First Phase 196487 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. 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 India took over the regulatory of (IDBI) 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) 19 87marked 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 19 89while 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.

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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.

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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 September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.

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The graph indicates the growth of assets over the years.

Not e Erstwhile UTI was bifurcated into UTI Mutual fund and the Specified Undertaking of the Unit Trust of India effective from February 2003. The Assets under management of the Specified Undertaking of the Unit Trust of India has thereof been executed from the total assets of the industry as a whole from February 2003 onwards.

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PART B COMPANY DETAIL

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MAN WITH A MISSION

If ever there was a man with a mission it was Hasmukhbhai Parekh, Founder and ChairmanEmeritus, of HDFC Group who left this earthly abode on November 18, 1994. in Born a traditional banking family in Surat, Gujarat, Mr. Parek starte hi financia caree at h d s l r Harkisandass t a leading Lukhmidass stock broking firm. The firm closed down in the late seventies, but, long before that, he went on to become a towering figure on the Indian financial scene. In 1956 he began his lifelong financial affair with the economic world, as General . Manager the newlyIndustrial Credit Investmen of formed and t Corporation of India (ICICI). He rose to become Chairman and continued so till his retirement in 1972. At the ripe age of 60, Hasmukhbhai started his second dynamic life, even more illustrious than his first. His vision for mortgage finance for housing gave birth to the Housing Development Finance Corporation t it was a trend-setter for housing finance in the whole Asian continent. He was also a writer in his own right. There are over 200 published articles by him...

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In 1992, the Government of India honoured him with the Padma Bhushan Award. The London School of Economics & Political Science conferre on hi an Honorar d m y Fellowship . He was one of the Founder Members o the Centre for o f Advancement f WZ]ovZ}UA vA ][A CZ]uvA ]ooA 19 . 93 He took active interest in the Bombay Communit Publi Trust, designe y c d specifically to serve the needs of Mr. H.T. PAREKH is conferred the the ][Av]]oPA]]v PadmaBhushan by the Government X When Mr. Deepak Parekh took over of India in the year 1992. as Chairman from Hasmukhbhai, he said: ^dl]vPA}A(}uA,XdXAWlZA]A (}u]oAlVAZ]A] ]}vYA}PZA about not only an institution, but an entire concept which has proved ]o(A}AA}(Ao]vPA]u }vX_ Today we are the largest residential mortgage finance institution in India, with a net worth of Rs. 2,703 crores as of March 31, 2006 and an asset base of over Rs. 22,000 crores. We also aim to increase the flow of resources to the housing sector by integrating the housing finance sector with the overall domestic financial markets. Over a span of 25 years, HDFC has become the pioneer in housing finance in India and made it possible for over two million Families to own their homes, through housing loans worth over Rs. 42,000 crores.

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ABOUT COMPANY HDFC :-

VISION STATEMENT :-

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ORGANISATION STRUCTURE:The HDFC AMC has the below given organisational structure and the different functional department are headed by different people.

Managing Director Mr. Milind Barve

CIO-ED Mr. Prashant Jain

CFO Mr. Rahul Bhandari

Head Operations Mr. Suresh Babu

Head Client Servicing Mr. John Mathews

Head Compliance Mr. Yezdi Khariwala

Head Sales Mr. Kiran Kaushik

Head PMS Mr. Pankaj Chopra Mr. Alok Sheopurkar

Head HR

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LINE OF BUSINESS :

PMS HDFC AMC Mutua l Fund

Retail

Corporat e Business

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HDFC ASSET MANAGEMENT COMPANY LIMITED (AMC)

Internal Structure & processes: Management Team: HDFC Trustee company Limited: a company incorporated under the Companies Act, 1956 is the Trustee to the Mutual Fund vide the Trust deed dated June 8, 2000, as amended from time to time. HDFC Trustee Company Limited is a wholly owned subsidiary of HDFC Limited. 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-400020. 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. 45.161crore.
The present equity shareholding pattern of the AMC is as follows :
Particulars % of the paid up equity capital

HDFC Limited 40 Standard Life Investments Limited

60

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HDFC Ltd. 60. 0%

HDFC Asset Management Company Ltd .

Standard Life Investments 40. 0%

HDFC Mutual Fund

HDFC Asset Management Company (AMC) is the first DCA]vA/v]A}AZAvA]PvAZAZCZ/^/>A&vA,}A>oA t [A rating. This is its highest Fund Governance and Process Quality Rating which reflects the highest governance levels and fund management practices at HDFC AMC It is the only fund house to have been assigned this rating for two years in succession. Over the past, we have won a number of awards and accolades for our Performance. 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.

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While our past experience does make us a veteran, but when it comes to investments, we have never believed that the experience is enough. The single most important factor that drives HDFC Mutual Fund is its belief to give the investor the chance to profitably invest in the financial market, without constantly worrying about the market swings. To realize this belief, HDFC Mutual Fund has set up the infrastructure required to conduct all the fundamental research and back it up with effective analysis. Our strong emphasis on managing and controlling portfolio risk avoids cha]vPAZAoA^(_AvAv X INTERNAL ANALYSIS OF HDFC AMC HDFC has grown in leaps and bounds after taking Zurich in 2003 , now it is the third largest private company in Asset management company. In Jamshedpur, HDFC has nearly 20% of the total AUM and according to the CAMS report, in AUM under CAMS we have 35% market share and we do gross sales of 70% every month.
AUM
March . 00 2 3 March . 00 2 4 March 2 . 00 5 March 2 . 00 6 March 2 . 00 7 March . 00 2 8 March . 00 2 9 648 2 1498 5 1501 0 2155 0 2835 8 4629 1 5795 6

Growth Rate
------131.18 0.17 43. 7 5 31.59 63.24

25.19

The below given graph depicts the same.

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DFC AMC has 4% market of the total asset management business. The pie-chart shows the market share of the other AMCs and of HDFC.

28 %

50 %

5%

4%

5%

8%

Grand Total

OTHERS (29) UTI HDFC Mutual Fund Prudential ICICI Mutual Fund Reliance Mutual Fund

| Page HDFC MUTUAL

51

FUND

STRENGTHS AND WEAKNESSES : STRENGTHS:

a Wide range of products: The AMC has got good ) number of differentiated products in the entire asset class. b Consistent performance: The funds have given ) consistent performance over 10 years. c Experienced team: HDFC has fund managers with ) rich experience whose consistent performance has made this AMC CRISIL level one fund house. d Strong Compliance: The AMC has very strong ) compliance of industry set rules to protect the interest of the investors. e Risk management AMC has a ris ) team: separate k management team constantl monitor the which y risk exposure related to different fund management. WEAKNESSES : a Restrictive reach: HDFC business is more ) concentrated on urban areas. HDFC has very limited offices. b Less Aggressive in Marketing and execution: HDFC ) does match the aggressiveness required in the industry and are slow in execution.

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HDFC MUTUAL FUND AT A GLANCE

Name of Unit Addres s :

HDFC MUTUAL FUND Gayatri Enclave, "K" 2nd Floor, Road, Bistupur ,amshedpur J 831001. : Private Sector : Tel. : 18002336767 (Tollfree) Telefax : 0657 t 2249730/ 2249691 200 7 Housing Development Finance Corporation Limited (HDFC), Standard Life Investments Limited. : Trustee. HDFC Asset Management Company Limited (AMC) . 9.30 am to 5.30 p.m

Form of Organization Contact Number

Establishment : year Sponsor : s

Managemen t

Working : Hours www.hdfcfund.com : Web site

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ACHIEVEMENT AND AWARDS

^,&CAWvA(v_AZAvAvlA/CZ-MFR 1, and Has Been A ZA '}oA A (}A ZBA W(}uv[A ]vA ZA P}A } (A ^KvAvABovA^Zu_A(}A}vAAW]}Av ]vPAAUA 2005 . ^,&CAdAA(v_AZAvAvlA/CZ-MFR 1, and Has Been ^]oAA(}A^^}vABAW(}uv_A]vAZAP}A}(A^K vA vA ]A >]vlA ^]vPA ^Zu~>^^_A (}A dZA A W]}A Ending Dec 31, 2005. ^,&CA D/W>dW_A ZA vA vlA /CZ-MFR 1, and Has been AZA'}oAA&}A^BAW(}uv_A]vAZAP}A} (A ^KvA vA DP]voA ]A ^Zu_A (}A }vA A W]}A v ]vPA Dec 31, 2005.

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HDFC PROVIDES:Personalized Service We believe in providing a personalized service enabling individual attention to achieve your investment goal. Professional Advice We provide professional advice on equity and debt portfolio with an objective to provide consistent long-term return while taking calculated market risk. Our approach helps you to build a proper mix of portfolio, not just to promote one individual product. Hence your long term objectives are best served. Long-term Relationship We believe steady wealth creation requires long-uA] ]}vUA]Av[AA achieved in a short span of time. To achieve this one needs to take advantage of short-term market opportunity while not loosing sight of long term objective. Hence we partner all our clients in their objective of achieving their long-term Vision. Access to Research Reports Through us, you will have access to certain research work of CRISIL, so that you will benefit from the expert knowledge of economists and analysts of one of the leading financial research and rating company of India. This third party research gives you a comfort of getting unbiased advice to make a proper decision for your investment.

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Transparency & Confidentiality Through email you will get a regular portfolio statement from us. You will also be given a web access to view at your convenience the details of your investments and its performance. Access to your portfolio is restricted to you and our monitoring system enables us to detect any unauthorized access to your investments. Flexibility To facilitate smooth dealing and consistent attention, all our clients will be serviced by their respective relationship executive. This allows us to provide tailor made advice to achieve your investment objective. Hassle Free Investment Our relationship person will provide you with a customized service at your convenience. We take care of all the administrative aspects of your investments including submission of application forms to fund houses along with monthly reporting on overall state of your investments and performance of your portfolio. Mutual funds all the rage today simply because people are have realized the symbiotic relationship that an investor shares with the asset management companies as compared to the ever volatile and ruthless world of SENSEX.

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COMPETITOR ANALYSIS:Tata Mutual Fund :Tata Asset Management Private Limited is very old house and is well placed in the market. Tata Mutual Fund has AUM of Rs.21304 Crores. Size and Growth: Tata MF opened its office in Jamshedpur four years ago. Since than it has done good business. Tata have brand advantage in Jamshedpur, as investors trust TATA group. Jamshedpur which is a market of Rs 1300cr, Tata MF has nearly 10-12% of the market share of Jamshedpur. In Jharkhand they have four offices. Internal Structure & processes: th Tata Mutual Fund has been constituted as a trust 9 May 1995 on in accordance with the provisions of the Indian Trusts Act, 1882 with Tata Sons Limited (TSL) and Tata Investment Corporation Limited (TICL) as the th sponsers and the settlers. The Mutual Fund was registered with SEBI on 30 Tata Mutual Fund (TMF) has been constituted as a Trust in accordance with the provisions of the Indians Trusts Act, 1882 and is registered as a Trust under The Indian Registration Act, 1908. TMF was registered with Securities & Exchange Board of India (SEBI) and commenced operation by launching

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its first scheme on August 1995. Tata Sons Limited(TSL) and 30 Tata Investment Corporation Ltd (TICL) are the Sponsers and the Settlors.

th

Share Holding Pattern Of Tata Asset Management Ltd (TAML)

Tata sons Ltd. 67. 91%

Tata Asset Management Ltd .

Tata Investment Corporation Ltd 32. 09%

Tata Mutual Fund

Board Of Directors:-

Board Of Tata Trustee Company Private Limited Mr. S.M. Datta (Chairman) Mr. I. Hussain (Director) Mr. J.N. Godrej (Director) Mr. Nowroze J.N. Vazifdar (Director)

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Board Of Directors Of Tata Asset Managment Limited: Mr. F.K. Kavarana (Chairman) Mr. Ved Prakash Chaturvedi (Managing Director) Mr. A.R. Gandhi (Director) Mr. M.L. Apte (Director) Mr. A. Hasib (Director)

Line of Business:

Tata Mutual Fund

management

Mutual fund business

Portfolio

Strengths & Weaknesses:Strengths: a Trusted Parent company: Tata Asset Management Ltd is a ) part of the Tata group, one of India's largest and most respected industrial groups. Jamshedpur is the home ground for Tata MF and they enjoy great support and trust.

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b High payout structure: They pay more incentive and ) brokerage to there distributors in comparison of other AMCs, which gives them some edge to attract the distributors to sell the product. Weaknesses : a) Focussed on one product: At Jamshedpur, Tata MF is focussed on only one product that is Tata Infrastructure Fund which some how narrows their product diversification. b) Lack of Aggression: The team in Jamshedpur lack aggression and activeness, they do not push there products too much in the markets. Products get sold of there brand presence. c) Services: The AMC is not giving good service and the response time is slow.

Projected Future Strategy: To meet the competition, Tata mutual fund will have to expand there business and penetration by increasing the number of branches and manpower . Distributor/Business model: The distributor model is divided into two parts that is IFAs and Banks and national distributors. Then the IFAs are categorised in two categories i.e. preferred and basic. Preferred gets 2.25% brokerage and basic gets 2.10 %.For making preferred partner there is no such set of rule. Also, Tata has scheme specific brokerage structure like in Tata infrastructure they pay 3.00%,in some schemes 2.25% and in some 1.75%.

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Products (NFOs/schemes): Tata has not got so good wide range of products in all categories and maximum AUM of there is concentrated in debt the maximum part is in debt. No. of schemes No. of schemes including options Equity Schemes Debt Schemes Short term debt Schemes Equity & Debt Money Market Gilt Fund 98 375 37 291 14 7 0 26

From the there pattern they are more cashing business on the infrastructure theme. Till now they have two infrastructure based funds and one NFO is running which is also Infrastructure based fund. Recently, they had also filed offer document with SEBI for there Tata small and Mid cap Infrastructure fund.

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Comparative Analysis of HDFC AMC with TATA:i) Infrastructure :SCHEM E FUND CLASS Average mkt. cap. (in Crores) Inception date HDFC INFRASTRUCTUR E Equity diversified 75 6.10 40 MAY. 2009 TATA INFRASTRUCTURE Equity diversified 21 4.00 30 MAY. 2009

From the following data we can analyise that HDFC MUTUAL FUND has fared better than TATA MUTUAL FUND ..

SWOT analysis of HDFC AMC with Tata AMC. ii)

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SWOT Analysis of HDFC Asset Management Company Ltd.

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SWOT Analysis of Tata Asset Management Ltd

Visit www.smartdraw.com or call 1-800-768-3729.

Buy SmartDraw!- purchased copies print this document without a watermark .

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iii) Additional Services Offered By HDFC Mutual Funds:HDFCM Onlinewhich enables you to transact online F on https://investor.hdfcfund.com/mfonli hours a day, , 24 HDFCM Online ne/ a week, 365 days a year. 7 you days F On Purchase can ,

Valuation. Account Statements........Online Download !! The Services offered in HDFCMF eDoc : HDFC Mutua Fun Offer yo the Online:s convenience of recieving documents by email l d s u at no additional cost to ePayouts Save your time you. experience : convenienc o receivin you the and dividen an e g redemption f payout(s), ifr any,d directlyd into your account. This facility can be opted by bank selecting RBI's National Electronic Fund Transfer (NEFT) or Electronic Clearing Service (ECS*). NEFT and ECS facilitates faster, reliable and trouble free credit of redemption/dividend into your bank account. It is one of the safest mode of payment also as it eliminates possibilities of fraudulent encashment/ of redemption dividend instruments or any possible in postal transit to loss while you. HDFCMF Now transacting with mobile can also Mobile,HDFC offer the facility transacting using the be done. mobile anywhere and anytime. On HDFCMF Mobile, you phone can Purchase Switch.

. Redeem . Switch . View Account Details. Folio View Port

. Redeem .

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View Account Details. Folio View Port Valuation. Account Request for Statements. Check NAV.

This is Transfer) : a facility introduced by the Reserve Bank of India (RBI). NEFT is wide electronic funds transfer system to move a nation fundsany bank branch in any part of country to any other from bank in another part of the branch country. Who will benefit from this service? This payout channel will be particularly beneficial to all such investors whose mandated bank account is not in the list of banks whom we presently have a direct with credit arrangement for crediting their / redemptio dividend This service will also benefit n proceeds. all such investors where a HDFC Mutual Fund Investor Service locations at Centrea HDFC Bank branch, is not present and such (ISC) / locations are covered by the RBI for payments through the NEFT mode. What are the advantages of NEFT over the current payout mode? Investors whose current payments are settled through a demand draft (DD) / Pay Order (PO) for their dividend / u]}vA}AAZA]uAv(]]] XA^ZA[AlA ZA}AZA]v WK[AAZvA] }UAZ]ZA}oAlAA In comparison, through NEFT couple of days to reach. the beneficiary gets the credit usually on the same day or the next day on the time settlement. This depending of payment settlement faster, safer and risk free. makes

NEFT Facility (National Electronic Fund

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iv)NAV Performance: NAV OF HDFC GROWTH FUND is Rs. NAV 58.91 , nd Date is July, 2 2009. NAV OF TATA GROWTH FUND is Rs. 31.4833, nd Date is July, 2 2009. & NAV OF HDFC EQUITY FUND is Rs. NAV 177.86 , nd Date is July, 2 2009. NAV OF TATA PURE GROWTH FUND is Rs. 72.34 nd Date is July, 2 2009.

v) Dividend History: HDFC GROWTH FUND current dividend is 25.02 TATA GROWTH FUND current dividend is 14.04 & HDFC EQUITY FUND current dividend is 35.702 TATA EQUITY FUND current dividend is 28.6397

So by above data we can analyise that HDFC GROWTH FUND is better for investor who look for high dividends.

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THE FUTURE GROWTH DRIVERS: Higher GDP Growth. India's huge financial spread Investment System. Systematic investment planning ratio which is projected to double by 2009t 2010. Fast paced urbanization rise from 28 to 40% by 2020. Growing working class population and Middle class expanding by every 30 t 40 million year. Upward migration of household income levels. Fast economic Development. Increasing disposable Income with the service sector. Cheaper (declining interest rates) & easier finance Schemes. Increasing dispensable income of rural agriculture sector. Govt. policy promotes tax investment & planning Sec 80 C. Increasing level of FDI in country. Emergence of India as BPO and IT hub.

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Equity markets have been buoyant over the past few months primarily on the back of expected good corporate performance, strong global liquidity and strong flows to emerging markets. The rush of players into the mutual fund industry during the last decade could be attributed to low entry barriers, both regulatory and competitive, and the desire of the existing financial players to broad-base their activities in the financial sector. The last few years also highlights the emergence of the mutual fund industry as a major force in Indian financial markets. With the total Assets Under Management (AUM) increasing from Rs.1,13,005 cr in March 2000 to Rs. 565469 Feb. 2008, in Cr the industry's growth has been nothing but exceptional. And if size is the measure of dominance, the Indian mutual fund industry can now boast of that. So lets now take a look at the overall growth of the mutual fund industry in the last decade.

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To sum it up, we can enumerate that the host of things which suggest that the mutual fund industry is all set to enter a period of high growth are: A robust economy, fledgling stock market, increasing awareness and acceptance of mutual funds among investors , strong domestic currency, and healthy corporate performances.

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FINANCIAL ANALYSIS
Objective of the studyThe primary objective this study is to the of analyze financial performance of the two leading Sectorial Mutual Fund schemes of HDFC and TATA on the basis of various financial parameters, which will be discussed later in the following sections of the report. This will help in the following ways: A complete and comprehensive financial analysis can be made before making a decision to invest in a particular Mutual Fund scheme . An in-depth and complete approach towards managing a portfolio of investments can be made by analyzing the funds on the basis of these financial parameters. This study will also give us a brief overview of the quality and consistency of the fund management in keeping up with the various expectations and hopes that the mutual fund investors have in the Asset Management Company (AMC). It also helps us to compare the individual fund performance with the performance of the overall market, including the Bombay Stock Exchange (BSE), and National Stock Exchange (NSE). It also helps us to study the risk-return trade-off i.e. whether the hand-in-hand relationship between Risk and Return holds true in case of Mutual funds or not.

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Rationale of choosing these fundsThe above chosen funds have had a market presence of at least three years. Also the government of India has a large interest in Indian growth story is in without a much impetus which complete have in infrastructure sector. Hence, with this fact we can have a fair idea of their acceptability in the market. The basic rationale of choosing these funds is to have and present a brief idea of the current mutual funds market and to understand the latest trends in the market. Data Collection All the data used for the study was secondary data. This data was collected from the following sources: Funds Fact Sheets Magazine s Journa l Interne t Key information memorandum of various schemes Methodolog y The project report is made precisely keeping in mind the Asset management business in Jamshedpur. Therefore, I had done primary as well as secondary data collection to facilitate my findings. In primary data collection, I have made a questionnaire relating to sales, services and distribution services of the Asset management company. The sample size is 40 persons which include individual ARNs,

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Distribution house RMs, Banking staffs and some customers. The data was collected and the collated to give a brief idea about which AMC is good in products, sales and services. The questionnaire also shows some traits like dependability, trust and suitability of the AMCs in context to various requirements the distributorsThe the of . secondary data was collected from the abyss of different websites and online articles of experts. The raw data was then compiled and analysed using different tools. Primary Data collection: The primary data is basically consisting of Products (offerings, innovation fun performance), Services time and d (response , reliability, services an Distribution (brokerages premium ) d and incentives) . Secondary data collection: It is collected from different websites; this project is made of more of secondary data collection.

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CONCLUSION:HDFC Equity Fund has a ability to spot the sector trends & it has delivered handsomely. In Current status it emerged as the third bestperforming diversified equity fund.

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SUGGESTIONS TO HDFC MUTUAL FUND:

1. An aggressive campaignin shoul be there advertising g d to encourage more people to invest. 2. As some of the people think that mutual fund is risky so the company should show people the advantages of the mutual fund and how it is better than the other investment avenues. 3. There is a great potential for the mutual fund because the people are ready to invest in the mutual fund as there is a positive response s. 4. Now a days people are investing in more of an equity fund because it gives high return as compare to other mutual fund schemes. 5. People are preferred to invest in the long term savings when only they have enough of surplus. They are least concerned about the } Z[A]X 6. The people of Rajkot have enough purchasing power supported by N.R.I. Mutual Fund Companies should take this fact positively at the time of designing promotional scheme. 7. HDFC MF is doing comparatively very less marketing in MF industry in compare to other players. Due to this other player are getting the advantage. Thus it should try to increase the marketing and advertising related activities time to time or at least at the time }(AvAE&K[UAAZA]uAZvAZAAo]vPA]]v A}AA the peak time (i.e. January - March) last quarter of financial year when people are searching for investing instruments.

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8. A very small part market has been cover by HDFC MF. It can increase the circle of its business in small and rural areas of every state and cities of India where they an find a huge business. 9. To uproot the investment level the company should give training programme to financial agents who approach the investor for the investments. And they should be aware of all the benefits of the mutual Funds. 10.Compan shoul undertak the Campaig Roa shows y d e n, d , Advertisement and type of Publicity for the other effective awareness of different schemes that are available in the market. 11.The company should arrange seminars and presentations, giving detail idea about securities and benefits of investment in mutual

fund.

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GLOSSARY
SHORT FORMS AMC t Asset Management Company. AMFI t Association of Mutual Fund of India. AUM t Asset under Management. BSE t Bombay Stock Exchange. FII t Foreign Institute of Investor. FII can invest in Mutual Funds.They invest through the Non-resident rupeeaccount. GILT t Government of India Linked Treasury. These Funds are those that invest only in government securities. IPO t Initial Public Offer. IRP t Investor Risk Profile. MIP t Monthly Investment Plan. MTM t Market to Market. NAR t Net Amount at Risk. NAV t Net Asset Value. NSE t National Stock Exchange. OD t Offer Document is the most important source of information for the investors. Abridged version of the OD is called as Key Information Memorandum (KIM). PAR VALUE tIt is said as face value. SAR t Sum at Risk SIP t Systematic Investment Plan SWP t Systematic Withdrawal Plan WDM t Wholesale Debt Market

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BIBLIOGRAPHY
1. www.investsmartindia.co m 2. www.amfiindia.co m 3. www.mutualfundsindia.co m 4. www.valueresearchonline.co m 5. www.investopedia.co m 6. www.bcg.co m 7. www.tatamutual.co m 8. www.google.co m 9. www.hdfcfund.co m 10 www.wikepedia.org .

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QUESTIONAIRE
Q 1) : Among the following which mutual fund house is the better fund house in the terms of products? a)Tata Mutual Fundb)HDFC Mutual Fund Others ( c) ) Q 2) : Out of the following which fund house gives you and your customer better satisfaction in the terms of sales support? a)Tata Mutual Fundb)HDFC Mutual Fund) Others ( c )

Q 3): Among the following which mutual fund house gives you premium services and after sales services ? a)Tata Mutual Fundb)HDFC Mutual Fund) Others ( c ) Q 4): Which mutual fund is having more effective strategy regarding the distribution services in terms of brokerage and incentives? a)Tata Mutual Fundb)HDFC Mutual Fund) Others ( c ) Q 5): Which mutual fund is more aggressive & innovative in terms of marketing and sales i.e. coming with the NFO and new products ? a)Tata Mutual Fundb)HDFC Mutual Fund) Others ( c )

Q 6) Which fund house is better in the terms of fund performance in long and short run? a)Tata Mutual Fundb)HDFC Mutual Fund) Others ( c )

YAAtZ]ZA(vAZ}[Auo}A}A(oAu}A}u(}oA]]vPA}AoA activities? ) a)Tata Mutual Fundb)HDFC Mutual Fund) Others ( c

HDFC MUTUAL FUND

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