.

WHICH IS A BETTER
INVESTMENT OPTION? ICICI
PRU MUTUAL FUND OR HDFC
MUTUAL FUND
Presented By: Anurag Garg

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What is a Mutual Fund

A mutual fund is a kind of pool
generated
by
Mutual
Fund
Companies, also known as Asset
Management Companies where the
investors invest their capital based
on their risk appetite, growth factors
etc. The inherent risk in any mutual
fund depends upon its kind of
further investment in security and
cash markets.
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How Do Mutual Funds Work

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Mutual Fund Industry in

India
First Phase - 1964-1987
Second Phase - 1987-1993 (Entry
of Public Sector Funds)
Third Phase - 1993-2003 (Entry
of Private Sector Funds)
Fourth Phase - since February
2003

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Limitations of Mutual Fund

No Guarantee
Fees and commissions
Taxes
Management Risk
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Some of the MF Companies

in India

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Mutual Fund Myths

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Brief About HDFC Mutual

Fund
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.
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Brief About ICICI Prudential

Mutual Fund
ICICI
Prudential
Asset
Management
Company Ltd. is the second largest asset
management company (AMC) in the country
(as per average assets under management
as on February 28, 2015) focused on
bridging the gap between savings &
investments and creating long term wealth
for investors through a range of simple and
relevant
investment
solutions.
(Data
source:
AMFI).
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Research Objectives
To compare the returns generated by
the large cap mutual funds of ICICI
Prudential Mutual Fund with HDFC
Mutual Fund (2 funds each).
To know the portfolio structure (top
10 holdings) of both the large cap
funds.
Also to know the returns of the said
mutual funds compared to Nifty &
Sensex over a period of 1 year.
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Definition of Large Cap

A term used by the investment
community to refer to companies
with a market capitalization
value of more than $10 billion.
Large cap is an abbreviation of
the
term
"large
market
capitalization".

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11

Methodology
The data required for the study
has
been
collected
from
secondary
sources.
The
secondary sources include the
official websites of Securities
Exchange Board of India (SEBI),
Association of Mutual Funds in
India (AMFI), and the websites of
the
various
Mutual
Funds
companies.

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12

% Returns of all four mutual funds

in last 5 years as on 30th April,
2015
S.
No.

Absolu HDFC
te
Top-200
Return
s (%)

HDFC
Index
Sensex
Plus Plan
26.5 %

ICICI
Prudential
Focused
Bluechip
Equity Fund
34.7 %

ICICI
Prudenti
al Select
Large
Cap Fund
31.3 %

1.

1 Year

31.9 %

2.

2 Years

53.5 %

44.6 %

57.3 %

54.7 %

3.

3 Years

75.4 %

68.2 %

84.3 %

76.2 %

4.

5 Years

84.5%

76.3 %

106.7 %

84.9 %

So

6/10/15

Source:
Moneycontrol.com

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13

Portfolio Structure

HDFC TopNo. 200

S.

SBI -7.39%

HDFC Index
Sensex Plus
Plan

Infosys-7.35%

ICICI Prudential
Focused
Bluechip Equity
Fund
HDFC Bank-

ICICI Prudential
Select Large Cap
Fund

HDFC-6.83%

8.32%
ICICI Bank

HDFC Bank -8.42

ICICI Bank-6.36%

Power Grid -9.58%

Infosys-

7.34%
ICICI Bank-

HDFC Bank-

-7.63%
Infosys-6.31%

6.64%
LT-5.84%
Maruti

6.62%
ITC-6.18%
ICICI Bank-

AxisBank-4.36% HCL Tech-6.07%

Tech M-3.42%
Tata Motors

Suzuki-4.90% 6.17%
HDFC BankTCS-5.13%

4.19%
HDFC-3.79%

SBI-3.31%

-5.85%
Federal Bank-

Reliance-

WIPRO-3.29%

5.78%
Tech M-5.57%

Tata Motors-

4.96%
LT-4.82%

LT-3.21%

Infosys-5.43%

3.55%
BPCL-3.40%

Axis Bank-

Reliance-3.12%

Axis Bank-5.42%

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3.72%

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14

Trailing Returns as on 30th

April, 2015
1

Month 3

Month 6

Month 1

Year

(%)
-1.01

(%)
-9.26

(%)
1.76

(%)
27.33

Fund (G)
Sensex

-1.03

-8.10

1.59

20.08

Nifty

-1.53

-7.82

2.78

21.48

HDFC
Top

200

Month 3

Month 6

(Source: motilaloswal.com)

Month 1

Year

(%)
-0.58

(%)
-7.88

(%)
2.04

(%)
25.17

Plus Plan
Sensex
-1.03

-8.10

1.59

20.08

Nifty

-7.82

2.78

21.48

HDFC
Index
Sensex

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-1.53

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15

Trailing Returns- (Cont.)

1

ICICI

3 Month 6

Month 1

Year

Month (%)

(%)

(%)

(%)
-2.48

3.59

29.36

-7.67

Prudential
Focused
Bluechip
Equity Fund
Sensex
Nifty
1

-1.03
-8.10 (Source:
1.59
20.08
motilaloswal.com)
-1.53 3 -7.82
Month
Month 2.78
6 Month 21.48
1
Year

(%)
ICICI Pru -3.07

(%)
-8.52

(%)
1.17

(%)
26.19

Cap Fund
Sensex
-1.03

-8.10

1.59

20.08

Nifty

-7.82

2.78

21.48

Select
Large

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-1.53

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Findings &
Recommendations
the four large cap funds are consistently

All
giving better return than Nifty & Sensex.
It is true that large cap mutual funds offer
more growth and better return to its
investors, but these large cap funds hold the
maximum risk also, as in case of market
crashing,
these
funds
will
be
beaten
drastically as they have maximum exposure to
large cap companies.
ICICI Prudential Focused Bluechip Equity Fund
is the best fund amongst all the four mutual
funds, as it has given better returns
consistently compared to other large cap
funds and sensex and nifty.
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Findings &
Recommendations
Infosys, Tata Motors, ICICI Bank, HDFC Bank,
HDFC, LT & Reliance Industries are the major
companies where the fund managers have further
invested the investors corpus.
Investors should stay invested for a longer period
of time in mutual funds as the market volatility
may affect the return of the funds in the short or
medium term.
If invested for a longer duration, large cap mutual
funds tend to offer good and consistent returns.
All the risks inherent in mutual funds should be
considered by the investors and their investment
should match with their financial goals.

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References

Agrawal, D. (2006). Measuring Performance of Indian Mutual

Funds. Prabandhan, 179-185.
Anand, M.Vijay (2000) Analysis of Performance of Equity funds
(Diversified) Open-end Mutual Fund during 1997 2000
http://www.moneycontrol.com/india/mutualfunds/mfinfo/portfolio
_overview/MZU009
http://www.moneycontrol.com/india/mutualfunds/mfinfo/portfolio
_overview/MHD020
http://www.moneycontrol.com/india/mutualfunds/mfinfo/portfolio
_overview/MPI392
http://www.moneycontrol.com/india/mutualfunds/mfinfo/portfolio
_overview/MPI643
http://www.motilaloswal.com/Broking/Markets/MutualFund/Schem
e-Snapshot/HDFC-Top-200-Fund-%28G%29/614/1
http://www.motilaloswal.com/Broking/Markets/MutualFund/Schem
e-Snapshot/HDFC-Index-Fund-Sensex-Plan/1081/1
http://www.motilaloswal.com/Broking/Markets/MutualFund/Scheme
-Snapshot/ICICI-Pru-Focused-Bluechip-Equity-Fund-%28G%29/7610
/1
http://www.motilaloswal.com/Broking/Markets/MutualFund/SchemeSnapshot/ICICI-Pru-Select-Large-Cap-Fund-(G)/10452/1
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Option of mutual fund schemes19
Mehta, Sushilkumar (2010),
performance

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