CERTIFICATE TO WHOMSOEVER THIS MAY CONCERN

This is to certify that the project report title HDFC MUTUAL FUND is prepared by MAHESH PARASHRAM SHINDE, student of Post Graduate Diploma in Financial Services (PGDFS), (Academic year 2013-14) has satisfactorily & successfully carried out the project work.

The project is submitted in partial fulfillment of PGDFS course in the academic year 2013-14.

DIRECTOR DR. Ashok Joshi

PROJECT GUIDE (PROF.MrShamWagh)

Place : Pune Date :

CERTIFICATE TO WHOMSOEVER THIS MAY CONCERN

This is to certify that MAHESH PARASHRAM SHINDE a student of Post Graduate Diploma in Financial Services (PGDFS) At IndSearch Institute, Pune, has visited our Company to carry out the project work titled A STUDY OF HDFC MUTUAL FUND The student has taken sincere efforts to collect the information and prepare the report on the subject.

Seal:

Mr Nagesh Sherigar Assistant Manager

Place : Pune Date :

A PROJECT REPORT ON

A STUDY OF HDFC MUTUAL FUND

SUBMITTED TO INDSEARCH

BY MAHESH PARASHRAM SHINDE STUDENT OF

POST GRADUATE DIPLOMA IN FINANCIAL SERVICES (PGDFS)

UNDER THE GUIDANCE OF

Mr Sham Wagh

INDIAN INSTITUTE OF COST & MANAGEMENT STUDIES & RESEARCH, PUNE 411004.

(2013-14)

DECLARATION

I, Mahesh P Shinde of Indian Institute of Cost and Management Studies and Research hereby declare that I have completed this project on A STUDY OF HDFC MUTUAL FUND in the Academic Year 2013-2014. The information submitted is true and original to the best of my knowledge.

Signature of the Student

(MAHESH P SHINDE)

ACKNOWLEDGEMENT
This project was a great learning experience for me. During this project I have interacted with many people to whom I should be always obliged, and thankful. Though this project bears our name we would like to say that it was a joint efforts all the people who we are acknowledging. This project bears the imprints of these hard to forget people. First of all I would like to acknowledge Mr Assistant Manager Mr Nagesh Shrigar who has been a helping hand for us while making it. Who guided us in every possible aspect and also a special thanks to HDFC MUTUAL FUND TEAM for giving us the opportunity to undergo this summer
training in such a prestigious and professional organization and also for their immense contribution towards execution and completion of this project.

Secondly I would like to appreciate my college, for giving me an opportunity to make a project on such a wonderful topic, which added a lot to my knowledge and also a special thanks to our Project Mentor Mr Sham Wagh Sir. Next I would like to mention and appreciate our parents for co-operating with us while making this project. My overriding debt continues to be my lovely friends who provided me with the time, support, and inspiration needed to prepare this project

Date Place: Pune

MAHESH SHINDE PGDFS

INDEX OF THE PROJECT CHAPTER Chapter - 1 TOPICS INTRODUCTION PG. NO.

Chapter - 2

SYSTAMATIC INVESTMENT PLAN COMPANY PROFILE

Chapter - 3

Chapter- 4

OBJECTIVES AND SCOPE QUESTIONAIRE AND ANALYSIS ANALYSIS OF DATA

Chapter-5

Chapter- 6

Chapter - 7

RESEARCH REPORT

Chapter - 8 Chapter - 9

FINDINGS AND CONCLUSIONS SUGGESTIONS & RECOMMENDATION

Chapter-10

BIBLIOGRAPHY

INTRODUCTION OF THE PROJECT

INTRODUCTION TO MUTUAL FUND AND ITS VARIOUS ASPECTS.

Mutual fund is a trust that pools the savings of a number of investors who share a common financial goal. This pool of money is invested in accordance with a stated objective. The joint ownership of the fund is thus Mutual, i.e. the fund belongs to all investors. 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 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. A Mutual Fund is an investment tool that allows small investors access to a well-diversified portfolio of equities, bonds and other securities. Each shareholder participates in the gain or loss of the fund. Units are issued and can be redeemed as needed. The funds Net Asset value (NAV) is determined each day.

When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund).

ADVANTAGES OF MUTUAL FUND Professional Management The idea behind a mutual fund is that individual investors generally lack the time, the inclination or the skills to manage their own investment. Thus mutual funds hire professional managers to manage the investments for the benefit of their investors in return for a management fee. Diversification The best mutual funds design their portfolios so individual investments will react differently to the same economic conditions. For example, economic conditions like a rise in interest rates may cause certain securities in a diversified portfolio to decrease in value. Other securities in the portfolio will respond to the same economic conditions by increasing in value. When a portfolio is balanced in this way, the value of the overall portfolio should gradually increase over time, even if some securities lose value. Convenient Administration Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad deliveries, delayed payments and follow up with brokers and companies. Mutual Funds save your time and make investing easy and convenient. Low cost Mutual fund expenses are often no more than 1.5 percent of your investment. Expenses for Index Funds are less than that, because index funds are not actively managed. Instead, they automatically buy stock in companies that are listed on a specific index.

Choice of Schemes A mutual fund can, and typically does have several schemes to cater to different investors preferences. The individual could choose to hire a professional manager to manage his money as per his investment and risk preferences. Such personal treatment often referred to as Portfolio Management Scheme (PMS). Legal Framework Since the investors are often not so well qualified to invest, the mutual fund business is highly regulated. Broadly the existing regulations are: 1. 2. 3. 4. 5. 6. Pre-requisitions to start a mutual fund; Permissible schemes and investments; Control over marketing process; Checks and balances in the legal structure; Valuation of securities; Level of operational flexibility to the professional investors.

Tax Benefits Dividend income from mutual fund units will be exempt from income tax with effect from July 1, 1999. Further, investors can get rebate from tax under section 88 of Income Tax Act, 1961 by investing in Equity Linked Saving Schemes of mutual funds. Further benefits are also available under section 54EA and 54EB with regard to relief from long term capital gains tax in certain specified schemes. Return Potential Mutual funds allow you to allocate investments assets across different fund categories to achieve a variety of risk/reward objectives thereby reducing overall portfolio risk. In other words, the right way to benefit from Mutual funds is to balance the risk as well as the potential to earn.

Liquidity Open-end schemes offer liquidity through on-going sale and re-purchase facility. Thus, the investor does not have to worry about finding a buyer for his investment a risk normally associated with direct investment in the securities market. Transparency You get regular information on the value of your investment in addition to disclosure on the specific investments made by your scheme, the proportion invested in each class of assets and the fund manager's investment strategy and outlook.

Flexibility Through features such as regular investment plans, regular withdrawal plans and dividend reinvestment plans, you can systematically invest or withdraw funds according to your needs and convenience.

LIMITATIONS OF MUTUAL FUNDS

No Guarantees No investment is risk free. If the entire stock market declines in value, the value of mutual fund shares will go down as well, no matter how balanced the portfolio. Investors encounter fewer risks when they invest in mutual funds than when they buy and sell stocks on their own. However, anyone who invests through a mutual fund runs the risk of losing money. Fees and commissions All funds charge administrative fees to cover their day-to-day expenses. Some funds also charge sales commissions or "loads" to compensate brokers, financial consultants, or financial planners. Even if you don't use a broker or other financial adviser, you will pay a sales commission if you buy shares in a Load Fund.

Taxes During a typical year, most actively managed mutual funds sell anywhere from 20 to 70 percent of the securities in their portfolios. If your fund makes a profit on its sales, you will pay taxes on the income you receive, even if you reinvest the money you made.

Management risk When you invest in a mutual fund, you depend on the fund's manager to make the right decisions regarding the fund's portfolio. If the manager does not perform as well as you had hoped, you might not make as much money on your investment as you expected. Of course, if you invest in Index Funds, you forego management risk, because these funds do not employ managers

Dilution It's possible to have too much diversification. Because funds have small holdings in so many different companies, high returns from a few investments often don't make much difference on the overall return. Dilution is also the result of a successful fund getting too big. When money pours into funds that have had strong success, the manager often has trouble finding a good investment for all the new money.

HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY

A little history
The mutual fund industry started in India in a small way with the UTI Act creating what was effectively a small savings division within the RBI. Over period of 25 years this grew fairly successfully and gave investors a good return, and therefore in 1989, as the next logical step, public sector banks and financial institutions were allowed to float mutual funds and their success emboldened the government to allow the private sector to foray into this area. The initial years of the industry also saw the emerging years of the Indian equity market, when a number of mistakes were made and hence the mutual fund schemes, which invested in lesser-known stocks and at very high levels, became loss leaders for retail investors. From those days to today the retail investor, for whom the mutual fund is actually intended, has not yet returned to the industry in a big way. But to be fair, the industry too has focused on brining in the large investor, so that it can create a significant base corpus, which can make the retail investor feel more secure.

HISTORY OF MUTUAL FUND

The Evolution The formation of Unit Trust of India marked the evolution of the Indian mutual fund industry in the year 1963. The primary objective at that time was to attract the small investors and it was made possible through the collective efforts of the Government of India and the Reserve Bank of India. The history of mutual fund industry in India can be better understood divided into following phases:

Phase 1. Establishment and Growth of Unit Trust of India 1964-87: Unit Trust of India enjoyed complete monopoly when it was established in the year 1963 by an act of Parliament. UTI was set up by the Reserve Bank of India and it continued to operate under the regulatory control of the RBI until the two were de-linked in 1978 and the entire control was transferred in the hands of Industrial Development Bank of India (IDBI). UTI launched its first scheme in 1964, named as Unit Scheme 1964 (US-64), which attracted the largest number of investors in any single scheme over the years. .

Phase II. Entry of Public Sector Funds - 1987-1993 The Indian mutual fund industry witnessed a number of public sector players entering the market in the year 1987. In November 1987, SBI Mutual Fund

From the State Bank of India became the first non-UTI mutual fund in India. SBI Mutual Fund was later followed by Canbank Mutual Fund, LIC Mutual Fund, Indian Bank Mutual Fund, Bank of India Mutual Fund, GIC Mutual Fund and PNB Mutual Fund. By 1993, the assets under management of the industry increased seven times to Rs. 47,004 crores. However, UTI remained to be the leader with about 80% market share.

1992-93

Amount Mobilized

Assets Under Management

Mobilization as % of gross Domestic Savings

UTI

11,057 1,964 13,021

38,247 8,757 47,004

5.2% 0.9% 6.1%

Public Sector Total

Phase III. Emergence of Private Sector Funds - 1993-96 The permission given to private sector funds including foreign fund management

companies (most of them entering through joint ventures with Indian promoters) to enter the mutual fund industry in 1993, provided a wide range of choice to investors and more competition in the industry. Private funds introduced innovative products, investment techniques and investor-servicing technology. By 1994-95, about 11 private sector funds had launched their schemes.

Phase IV. Growth and SEBI Regulation - 1996-2004 The mutual fund industry witnessed robust growth and stricter regulation from the SEBI after the year 1996. The mobilization of funds and the number of players operating in the industry reached new heights as investors started showing more interest in mutual funds. Inventors' interests were safeguarded by SEBI and the Government offered tax benefits to the investors in order to encourage them. SEBI (Mutual Funds) Regulations, 1996 was introduced by SEBI that set uniform standards for all mutual funds in India. The Union Budget in 1999 exempted all dividend incomes in the hands of investors from income tax. Various Investor Awareness Programmes were launched during this phase, both by SEBI and AMFI, with an objective to educate investors and make them informed about the mutual fund industry. In February 2003, the UTI Act was repealed and UTI was stripped of its Special legal status as a trust formed by an Act of Parliament. The primary objective behind this was to bring all mutual fund players on the same level. UTI was reorganized into two parts: 1. The Specified Undertaking, 2. The UTI Mutual Fund

GROSS FUND MOBILISATION (RS. CRORES)

FROM

TO

UTI

PUBLIC SECTOR

PRIVATE SECTOR

TOTAL

01-April-98

31-March-99

11,679

1,732

7,966

21,377

01-April-99

31-March-00

13,536

4,039

42,173

59,748

01-April-00

31-March-01

12,413

6,192

74,352

92,957

01-April-01

31-March-02

4,643

13,613

1,46,267

1,64,523

01-April-02

31-Jan-03

5,505

22,923

2,20,551

2,48,979

01-Feb.-03

31-March-03

7,259*

58,435

65,694

01-April-03

31-March-04

68,558

5,21,632

5,90,190

01-April-04

31-March-05

1,03,246

7,36,416

8,39,662

01-April-05

31-March-06

1,83,446

9,14,712

10,98,158

ASSETS UNDER MANAGEMENT (RS. CRORES)

AS ON

UTI

PUBLIC SECTOR

PRIVATE SECTOR

TOTAL

31-March-99

53,320

8,292

6,860

68,472

CATEGORIES OF MUTUAL FUND:

Mutual funds can be classified as follow :

Based on their structure:

Open-ended funds: Investors can buy and sell the units from the fund, at any point of time.

Close-ended funds: These funds raise money from investors only once. Therefore, after the offer period, fresh investments can not be made into the fund. If the fund is listed on a stocks exchange the units can be traded like stocks (E.g., Morgan Stanley Growth Fund). Recently, most of the New Fund Offers of close-ended funds provided liquidity window on a periodic basis such as monthly or weekly. Redemption of units can be made during specified intervals. Therefore, such funds have relatively low liquidity.

Based on their investment objective: Equity funds: These funds invest in equities and equity 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:

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 invest in debt oriented fund and give instructions to transfer a fixed sum, at a fixed 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.

RISK V/S. RETURN:

What is a Systematic Investment Plan (SIP)?

SIP is an investment option that is presently available only with mutual funds. The other investment option comparable to SIPs is the recurring deposit schemes from Post office and banks. Basically, under an SIP option an investor commits making a regular (monthly) investment in a particular mutual fund/deposit.

SIP is a method of investing a fixed sum, regularly, in a mutual fund. It is very similar to regular saving schemes like a recurring deposit. An SIP allows you to buy units on a given date each month, so that you can implement an investment / saving plan for yourself. Once you have decided on the amount you want to invest every month and the mutual fund scheme in which you want to invest, you can either give post-dated cheques or ECS instruction, and the investment will be made regularly. SIPs generally start at minimum amounts of Rs 1,000 per month and the upper limit for using an ECS is Rs 25000 per instruction. Therefore, if you wish to invest Rs 100,000 per month, you may need to do it on 4 different dates.

A specific amount should be invested for a continuous period at regular intervals under this plan. SIP is similar to a regular saving scheme like a recurring deposit. It is a method of investing a fixed sum regularly in a mutual fund. SIP allows the investor to buy units on a given date every month. The investor decides the amount and also the mutual fund scheme.

5 reasons for Investing Systematically

Over the last 12 months investors in equity markets have seen it all. From all time highs of 6,200 levels to dismal lows of 4,200. A lot of investors who entered at 6,200 expecting the market to go even higher are very upset. Most investors cannot really stomach the kind of volatility that is inherent in equity markets. At the end of the day, investors who can take some risk are actually shunning equities only because they entered equity markets at the wrong time. Systematic investment plans (SIPs) take care of this problem. But market timing is not the only reason for you to plump for SIPs, there are other advantages. that average per capital income of an Indian is approximately only Rs 25,000 (i.e. monthly income of Rs 2,083), a Rs 5,000 one-time entry in a mutual fund is still asking for a lot (2.4 times the monthly income!). mode, not a scheme! Market is at very high level to start an SIP: I have heard this when the index was 3000 also. I have no clue where the market is headed, but I know SIP works!

Benefits of investing in HDFC MF SIP

HDFC MF SIP is similar to a Recurring Deposit. Every month on a specified date an amount you choose is invested in a mutual fund scheme of your choice. The dates currently available for SIPs are the 1st, 5th, 10th, 15th, 20th and the 25th of a month. Youll be amazed to learn about the many benefits of investing through HDFC MF SIP.

Benefit 1 Become A Disciplined Invester Being disciplined - Its the key to investing success. With the HDFC MF Systematic Investment Plan you commit an amount of your choice (minimum of Rs. 1000 and in multiples of Rs. 100 thereof*) to be invested every month in one of our schemes.

Think of each SIP payment as laying a brick. One by one, youll see them transform into a building. Youll see your investments accrue month after month. Its as simple as giving at least 6 postdated monthly cheques to us for a fixed amount in a scheme of your choice. Its the perfect solution for irregular investors. Benefit 2 Reach Your Financial Goal Imagine you want to buy a car a year from now, but you dont know where the down-payment will come from. HDFC MF SIP is a perfect tool for people who have a specific, future financial requirement. By investing an amount of your choice every month, you can plan for and meet financial goals, like funds for a childs education, a marriage in the family or a comfortable postretirement life. The table below illustrates how a little every month can go a long way.

Monthly Savings - What your savings may generate Savings per month (for 15 years) Total amount invested (Rs. in Lacs) 6.0% Rate of return 8.0% 10.0%

(rupees in lacs, 15 years later)* 5000 4000 9.0 7.2 14.6 11.7 17.4 13.9 20.9 16.7

3000 2000 1000

5.4 3.6 1.8

8.8 5.8 2.9

10.4 7.0 3.5

12.5 8.3 4.2

*Monthly instalments, compounded monthly, for a 15-year period.

At the end of the 12 months, Suresh has more units than Rajesh, even though they invested the same amount. Thats because the average cost of Sureshs units is much lower than that of Rajesh. Rajesh made only one investment and that too when the per-unit price was high.

3) Company Profile

MAN WITH A MISSION

If ever there was a man with a mission it was Hasmukhbhai Parekh, Founder and Chairman-Emeritus, of HDFC Group who left this earthly abode on November 18, 1994. Born in a traditional banking family in Surat, Gujarat, Mr. Parekh started his financial career at Harkisandass Lukhmidass a leading 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 of the newly-formed Industrial Credit and Investment 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 it was a trend-setter for housing finance in the whole Asian continent.

ABOUT COMPANY HDFC

VISION

To be a dominant player in the Indian mutual fund space, recognized for its high levels of ethical and professional conduct and a commitment towards enhancing investor interests.

ORGANIZATION AND MANAGEMENT

HDFC is a professionally managed organization with a board of directors consisting of eminent persons who represent various fields including finance, taxation, construction and urban policy & development. The board primarily focuses on strategy formulation, policy and control, designed to deliver increasing value to shareholders. Masters degree in economics from Delhi University. She has been employed with the Corporation since 1978 and was appointed as the Executive Director of the Corporation in 2000. She is responsible for overseeing all aspects of lending operations of HDFC.New Delhi.

BOARD OF DIRECTORS Mr. D S Parekh - Chairman Mr. Keshub Mahindra - Vice Chairman Ms. Renu S. Karnad - Executive Director Mr. K M Mistry - Managing Director Mr. Shirish B Patel Mr. B S Mehta Mr. D N Ghosh Dr. S A Dave Mr. S Venkitaramanan Dr. Ram S Tarneja Mr. N M Munjee Mr. D M Satwalekar

HDFC (AMC)

ASSET

MANAGEMENT

COMPANY

LIMITED

AMC was incorporated under the Companies Act, 1956, on December 10, 1999, and was approved to act as an AMC for the Mutual Fund by SEBI on July 30, 2000.

The registered office of the AMC is situated at Ramon House, 3rd Floor, H.T. Parekh Marg, 169, Back bay Reclamation, Church gate, Mumbai - 400 020. In terms of the Investment Management Agreement, the Trustee has appointed HDFC Asset Management Company Limited to manage the Mutual Fund:

Particulars

% of the paid up capital

Housing Development Finance Corporation Limited 50.10 Standard Life Investments Limited 49.90 Zuri ch Insurance Company (ZIC), the Sponsor of Zurich India Mutual Fund, following a review of its overall strategy, had decided to divest its Asset

HDFC MUTUAL FUND PRODUCTS Equity Funds

HDFC Growth Fund HDFC Long Term Advantage Fund HDFC Index Fund HDFC Equity Fund HDFC Capital Builder Fund HDFC Tax saver HDFC Top 200 Fund HDFC Core & Satellite Fund HDFC Premier Multi-Cap Fund HDFC Long Term Equity Fund HDFC Mid-Cap Opportunity Fund

Balanced Funds
HDFC Children's Gift Fund Investment Plan HDFC Children's Gift Fund Savings Plan HDFC Balanced Fund HDFC Prudence Fund Debt Funds HDFC Income Fund HDFC Liquid Fund HDFC Gilt Fund Short Term Plan HDFC Gilt Fund Long Term Plan HDFC Short Term Plan HDFC Floating Rate Income Fund Short Term Plan HDFC Floating Rate Income Fund Long Term Plan HDFC Liquid Fund - PREMIUM PLAN HDFC Liquid Fund - PREMIUM PLUS PLAN

OBJECTIVES OF THE STUDY 1. To find out the Preferences of the investors for Asset Management Company. 2. To know the Preferences for the portfolios. 3. To know why one has invested or not invested in SBI Mutual fund 4. To find out the most preferred channel. 5. To find out what should do to boost Mutual Fund Industry.

Scope of the study

A big boom has been witnessed in Mutual Fund Industry in resent times. A large number of new players have entered the market and trying to gain market share in this rapidly improving market. The research was carried on in I had been sent at one of the branch of State Bank of India where PUNE. I completed my Project work. I surveyed on my Project Topic A study of preferences of the Investors for investment in Mutual Fund on the visiting customers of the SBI DECCAN PUNE Branch. The study will help to know the preferences of the customers, which company, portfolio, mode of investment, option for getting return

and so on they prefer. This project report may help the company to make further planning and strategy.

4) QUESTIONAIRE AND ANALYSIS

QUESTIONAIRE
A study of preferences of the investors for investment in mutual funds.
1. Personal Details:

(a). Name:-

(b). Add: -

Phone:-

(c). Age:-

(d). Qualification:-

Graduation/PG

Under Graduate

Others

(e). Occupation. Pl tick ()

Govt. Ser

Pvt. Ser

Business

Agriculture

Others

(g). What is your monthly family income approximately? Pl tick ().

Up to Rs.10,000

Rs. 10,001 to 15000

Rs. 15,001 to 20,000

Rs. 20,001 to 30,000

Rs. 30,001 and above

2. What kind of investments you have made so far? Pl tick (). All applicable.

a. Saving account e. Post OfficeNSC, etc

b. Fixed deposits f. Shares/Debentures

c. Insurance

d. Mutual Fund

g. Gold/ Silver h. Real Estate

3. While investing your money, which factor will you prefer? . (a) Liquidity (b) Low Risk (c) High Return (d) Trust

4. Are you aware about Mutual Funds and their operations? Pl tick (). No

Yes

5. If yes, how did you know about Mutual Fund?

a. Advertisement

b. Peer Group

c. Banks

d. Financial Advisors

6. Have you ever invested in Mutual Fund? Pl tick ().

Yes

No

7. If not invested in Mutual Fund then why?

(a) Not aware of MF (b) Higher risk (c) Not any specific reason

5) ANALYSIS & INTERPRETATION OF THE DATA

1. (a) Age distribution of the Investors of Pune

Age Group No. of Investors

<= 30 12

31-35 18

36-40 30

41-45 24

46-50 20

>50 16

Investors invested in Mutual Fund

35 30 25 20 15 10 5 0 <=30 31-35 36-40 41-45 46-50 >50 Age group of the Investors 12 18 30 24 20 16

Interpretation: According to this chart out of 120 Mutual Fund investors of Lucknow the most are in the age group of 36-40 yrs. i.e. 25%, the second most investors are in the age group of 41-45yrs i.e. 20% and the least investors are in the age group of below 30 yrs.

(b). Educational Qualification of investors of PUNE

Educational Qualification Graduate/ Post Graduate Under Graduate Others Total

Number of Investors 88 25 7 120

6% 23% 71%

Graduate/Post Graduate

Under Graduate

Others

Interpretation:
Out of 120 Mutual Fund investors 71% of the investors in Pune are Graduate/Post Graduate, 23% are Under Graduate and 6% are others (under HSC).

c). Occupation of the investors of Pune Occupation of customer Govt. service Pvt. Service Business Agriculture Others No. of investors 35 45 30 04 06

50 45 40 35 30 25 20 15 10 5 0

No. of Investors

35

45 30 4 6 Others

Govt. Service

Pvt. Service

Business

Agriculture

Occupation of the customers

Interpretation: In Occupation group out of 120 investors, 38% are Pvt. Employees, 25% are Businessman, 29% are Govt. Employees, 3% are in Agriculture and 5% are in others. (d). Monthly Family Income of the Investors of Pune Income Group
<=10,000 10,001-15,000 15,001-20,000 20,001-30,000 >30,000

No. of Investors
5

12 28 43 32

50 45 40 35 30 25 20 15 10 5 0

No. of Investors

43 28 12 5 <=10 10-15 15-20 20-30 >30 32

Income Group of the Investorsn (Rs. in Th.)

Interpretation: In the Income Group of the investors of lucknow, out of 120 investors, 36% investors that is the maximum investors are in the monthly income group Rs. 20,001 to Rs. 30,000, Second one i.e. 27% investors are in the monthly income group of more than Rs. 30,000 and the minimum investors i.e. 4% are in the monthly income group of below Rs. 10,000

(2) Investors invested in different kind of investments.

Kind of Investments
Saving A/C

Fixed deposits Insurance Mutual Fund Post office (NSC) Shares/Debentures Gold/Silver Real Estate

No. of Respondents 195 148 152 120 75 50 30 65

65
Kinds of Investment

30 50 75 120 152 148 195 0 100 200 300

No.of Respondents

Interpretation: From the above graph it can be inferred that out of 200 people, 97.5% people have invested in Saving A/c, 76% in Insurance, 74% in Fixed Deposits, 60% in Mutual Fund, 37.5% in Post Office, 25% in Shares or Debentures, 15% in Gold/Silver and 32.5% in Real Estate. 3. Preference of factors while investing
Factors (a) Liquidity (b) Low Risk (c) High Return (d) Trust

No. of Respondents

40

60

64

36

18%

20%

32%

30%

Liquidity

Low Risk

High Return

Trust

Interpretation: Out of 200 People, 32% People prefer to invest where there is High Return, 30% prefer to invest where there is Low Risk, 20% prefer easy Liquidity and 18% prefer Trust From the above chart it is inferred that 67% People are aware of Mutual Fund and its operations and 33% are not aware of Mutual Fund and its operations.

7) Research report

Objective of research;

The main objective of this project is concerned with getting the opinion of people regarding mutual funds and what they feel about availing the services of financial advisors. I have tried to explore the general opinion about mutual funds. It also covers why/ why not investors are availing the services of financial advisors. Along with it a brief introduction to Indias largest financial intermediary, HDFC has been given and it is shown that how they operate in mutual fund depts. Scope of the study:

The research was carried on in the Northern Region of India. It is restricted to PUNE I have visited people randomly nearby my locality, different shopping malls, small retailers etc.

Data sources: Research is totally based on primary data. Secondary data can be used only for the reference. Research has been done by primary data collection, and primary data has been collected by interacting with various people. The secondary data

has been collected through various journals and websites and some special publications of HDFC.

Sampling:

Sampling procedure: The sample is selected in a random way, irrespective of them being investor or not or availing the services or not. It was collected through mails and personal visits to the known persons, by formal and informal talks and through filling up the questionnaire prepared. The data has been analyzed by using the measures of central tendencies like mean, median, mode. The group has been selected and the analysis has been done on the basis statistical tools available.

Sample size: The sample size of my project is limited to 200 only. Out of which only 135 people attempted all the questions. Other 65 not investing in MFs attempted only 2 questions.

 Limitation: Time limitation. Research has been done only at PUNE. Some of the persons were not so responsive. Possibility of error in data collection. Possibility of error in analysis of data due to small sample size. Data analysis:

Have you ever invested/ interested to invest in mutual funds?

YES NO

135 65

No. of persons= 200

NO 33% YES 67%

 .what is the most important reason for not investing in mutual funds? (only for above 65 participants)

Lack of knowledge about mutual 25 funds Enjoys investing in other options 10

8)Findings and Conclusion

Findings:
In PUNE in the Age Group of 36-40 years were more in numbers. The second most Investors were in the age group of 41-45 years and the least were in the age group of below 30 years. In PUNE most of the Investors were Graduate or Post Graduate and below HSC there were very few in numbers. In Occupation group most of the Investors were Govt. employees, the second most Investors were Private employees and the least were associated with Agriculture. In family Income group, between Rs. 20,001- 30,000 were more in numbers, the second most were in the Income group of more than Rs.30,000 and the least were in the group of below Rs. 10,000.

 Only 67% Respondents were aware about Mutual fund and its operations and 33% were not. Among 200 Respondents only 60% had invested in Mutual Fund and 40% did not have invested in Mutual fund. Out of 80 Respondents 81% were not aware of Mutual Fund, 13% told there is not any specific reason for not invested in Mutual Fund and 6% told there is likely to be higher risk in Mutual Fund.

Conclusion
Running a successful Mutual Fund requires complete understanding of the peculiarities of the Indian Stock Market and also the psyche of the small investors. This study has made an attempt to understand the financial behavior of Mutual Fund investors in connection with the preferences of Brand (AMC), Products, Channels etc. I observed that many of people have fear of Mutual Fund. 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 inv est in those Companies where they have faith or they are well known with them. There are many AMCs in LUCKNOW but only some are performing well due to Brand awareness. Some AMCs are not performing well although some of the schemes of them are giving good return because of not awareness about Brand. HDFC, Reliance, UTI, SBIMF, ICICI Prudential etc. they are well known Brand, they are performing well and their Assets Under Management is larger than others whose Brand name are not well known like Principle, Sunderam, etc.

9) Suggestions and Recommendations

The most vital problem spotted is of ignorance. Investors should be made aware of the benefits. Nobody will invest until and unless he is fully convinced. Investors should be made to realize that ignorance is no longer bliss and what they are losing by not investing. Mutual funds offer a lot of benefit which no other single option could offer. But most of the people are not even aware of what actually a mutual fund is? They only see it as just another investment option. So the advisors should try to change their mindsets. The advisors should target for more and more young investors. Young investors as well as persons at the height of their career would like to go for advisors due to lack of expertise and time. Before making any investment Financial Advisors should first enquire about the risk tolerance of the investors/customers, their need and time (how long they want to invest). By considering these three things they can take the customers into consideration.

10) BIBLIOGRAPHY
NEWS PAPERS

OUTLOOK MONEY

TELEVISION CHANNEL (CNBC AAWAJ)

MUTUAL FUND HAND BOOK

FACT SHEET AND STATEMENT

WWW.HDFCMF.COM

WWW.MONEYCONTROL.COM

WWW.AMFIINDIA.COM

WWW.ONLINERESEARCHONLINE.COM

WWW. MUTUALFUNDSINDIA.COM