Kotak To HDFC 1

A
SUMMER INTERNSHIP PROJECT REPORT

ON
“AN ANALYSIS OF EQUITY SCHEMES OFFERED BY
HDFC MUTUAL FUND”
With reference to Nashik Office
SUBMITTED IN PARTIAL FULFULLMENT OF THE REQUIREMENT FOR THE
AWARD
OF
THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION

(FINANCIAL MANAGEMENT)
SUBMITTED BY
MR. PUJARI.ARTHANTAR ANUP
MBAII
YEAR 2014-16
SUBMITTED TO
SAVITRIBAI PHULE PUNE UNIVERSITY
UNDER THE GUIDANCE OF
PROF.PRAJAKTA DESHMUKH
INSTITUTE OF MANAGEMENT, RESEARCH & TECHNOLOGY

GANGAPUR ROAD, NASHIK 422002
1
DECLARATION BY STUDENT
I MR. PUJARI ARTHANTAR ANUPvisited in “HDFC MUTUAL FUND” for

Summer internship project from15th May to 15th July 2015.
I hereby declare that the information gathered during the specific period shall be
strictly utilized only for the project which is to be completed as per the pursuing in Institute of
Management Research Technology.
I honestly express that the information is not collected with any commercial intention
& motivation. The sole motive is to learn about the social issue & prepare project on it. Thus
the sole object of collection of information is of academic purpose & I assure that collected
information shall put to use only for the project report & nothing else.
Place:IMRTNashik. -2Sign :
Date : Name : MR PUJARI ARTHANTAR ANUP
2
CERTIFICATEFROM THE GUIDE
This is to certify that Mr/Ms____________________________________

Has completed the project report entitled _______________________
___________________________________________________________
Under my guidance and supervision and submitted the report as per the norms laid down by
SAVITRIBAI PHULE PUNE UNIVERSITY, PUNE.
The material that has been obtained from other sources is duly acknowledged in the report.It
is further certified that the work or its part has not been submitted to any other university for
examination under my supervision.I consider this work for the award of the degree of master
of business administration,in the partial fulfillment of the curriculum.
IMRT,Nashik-2 Name and sign of Guide

Date- / /20
3
ACKNOWLEDGEMENT
I gladly take this opportunity to thank the Director DR.B.B.RAYTE. Institute of
Management& Research Technology, Nasik, for providing facilities during progress of the
project.
I am greatly indebted toPROF.PRAJAKTA DESHMUKH faculty of Institute of
Management Research Technology, Nasik, our internal guide for this guidance &
enlightening comments throughout the project work. It has been an altogether different
experience to work with him & I would like to thank him for this helpful suggestion
&numerous discussion.
I am thankful to all those who helped me directly or indirectly to develop this project &
complete it successfully. Then I would like to thank Mr.Shilendra.Pataskar
(branch manager ) who gave permission to me for doing project in their company. Also
thank to Miss. SnehalPatil.who teach me about the,how the operate mutual fund and its
operation.Theyhad always been very prompt at extending in their helping hand & sharing
valuable knows. The smooth completion of this project would not have been possible without
their guidance.
Place: Nashik. Sign :

Date : NAME-PUJARI ARTHANTAR ANUP
4
EXECUTIVE SUMMARY
Investing is an activity of putting money in an instrument for the purpose of getting a good
return on the investment and for the growth of the principle amount. There are a large number
of investment instruments available to the investors like mutual funds, insurance, shares, govt.
securities and corporate bonds, gold, real estate etc. investors invest the money in these
instruments for getting good returns and the money invested in turn helps in the growth of the
economy. During the present global economic crisis it is essential for the people to invest
their money so that the global economy may recover.
Mutual fund is a professionally managed collective investment scheme where a number of
investors pool their money and this money is turn invested in different instruments including
equity, government bonds, commodities, debt market etc. Mutual Funds have a tiered
structure with a sponsor, who is the promoter of the fund, on top. Under the sponsor is the
trust which holds the unit holders money. Under the trust is the AMC or Asset Management
Company which manages the fund of the investors, the registrar which processes the
applications and the custodian who is the guardian of the funds and assets of the investors.
Mutual funds can be classified based on structure, investment objectives and the types of
schemes. They may be classified as open ended or close ended, equity funds, debt funds,
balanced funds or money market funds, or based on schemes as ELSS, Fixed Term Plan or
SIP etc.
For the marketing of Mutual Funds we can segment the market based on the Socio Economic
Classification and the age of the investors. We can target the A, B and C segment of people
based on the various schemes. The targeting on age basis will be based on the investment
objective of a particular fund. Mutual fund can be positioned as a wealth creation and tax
saving product.
5
INDEX
Chapter Page
Table of Contents
No. No.
1 INTRODUCTION 8
1.1 Object of the Project 9
1.2 Introduction (Selection of the topic) 10
1.3 Objectives of the study 11
1.4 Scope of the study 12
1.5 Rationale/contribution of the study 13
1.6 Limitations of the study 14
2 RESEARCH METHEDOLOGY 15
2.1 Method of study 16
2.2 Sampling 18
2.3 Data Collection 20
2.4 Presentation of Data, Tools of analysis & interpretation 22
3 PROFILE OF THE ORGANISATION 23
3.1 History & general information 24
3.2 Organization structure 28
3.3 Products/Activities 36
3.4 Corporate and Functional practices 56
4 REVIEW OF LITERATURE 63
4.1 Meaning & Concepts of the Topic 64
4.2 Basic theories of the topic 66
4.3 Review of Research on the selected topic 71
5 DATA PRESENTATION, ANALYSIS & INTERPRETATION 75
6 FINDINGS ,CONCLUSION AND SUGGESTIONS 86
ANNEXURE/APPENDICES
I) QUESTIONNAIRE 90
II) REFERENCES/BIBLIOGRAPHY 91
6
INDEX
Chapter No. List of graphs and Page No.

tables
Chapter 4 4.1 65
Chapter 5 5.1 76
Chapter 5 5.2 77
Chapter 5 5.3 78
Chapter 5 5.4 79
Chapter 5 5.5 80
Chapter 5 5.6 81
Chapter 5 5.7 82
Chapter 5 5.8 83
Chapter 5 5.9 84
Chapter 5 5.10 85
7
Chapter No: 1
Introduction
8
1.1 OBJECT OF THE STUDY
The summer internship project.is one of the important work which is expected to be
performed by students.Mumbai university allows a student to take industrial experience which
is needed at management level
The preparation of the project on a certain topic enables a professional student-
I. To establish a cordial communication with the people of Industry their rank and file.
II. To observe and study the culture of the cooperate world, and to know the business
practice
III. Application of principle of management in practice and to observe any deviation from
theoretical knowledge.
9
1.2 SELECTION OF THE ORGANISATION
The topic selected for the summer internship project“HDFC MUTUAL FUND “at ground
floor ,krishnaratan, shop no.06 ,opp, hotel potoba , new pandit colony ,Nashik 422011
I have selected this topic because investment is a major part of an individual’s life in the 21st
century
The mutual fund investment is one of the major chunk of the investment across the Indian
economy, which is linked with the fluctuation of the share market of the country.
Therefore the investment in mutual fund is one kind of promissory challenge because, one
side it is a progressive investment and the other side it is sometimes difficult to realize it at the
face value.
In the light of this the present study has focused on various schemes of mutual fund offered
by HDFC BANK .
10
1.3 OBJECTIVE OF THE STUDY –
1-To know market status of equity schemes of mutual funds of HDFC funds
2-To know performance of equity schemes of HDFC mutual funds
3-To understand how equity schemes work to benefit the investor of HDFC mutual funds
4-To know the best equity schemes available in HDFC mutual funds
5- To understand the cause of choosing an equity scheme of HDFC mutual funds
11
1.4 SCOPE OF THE STUDY
The scope of working under the project is very wide. This project is done under the guidance
of professional employees which work in HDFC mutual fund.. This will help to know the
history and profile information of HDFC mutual fund. Study will help to understand the
procedure of investment in mutual fund.
. The study of mutual funds is based on tools like factsheet, offer document ,market
conditions past performance of the scheme.Alsosome ratios like sharperatio,deviation, alpha
and beta of the scheme are taken into consideration.past performance of the equity related
schemes of HDFC MUTUTAL FUNDS
The main coverage given to this study is restricted to various schemes offered by the
company from mutual fund investment, the financial viability of mutual fund ,ration analysis
and benchmarking in between various schemes of HDFC mutual funds.
12
1.5 RATIONALE OF THE STUDY
Utility to Researcher:-
1. I got exposure to the Investment sector and real organizational environment.

2. I got an opportunity to work with the organization “HDFC Mutual Fund”. Being a
student of MBA- Finance,
Utility to Organization:-
1. It will help organization to know their Opportunities & Threats

2. It helps the organization to understand the investors market
3. It can help the organization to know latest information in equity segment.
.
Utility for Customer:-
1. Customer gets an opportunity to express their views towards HDFC mutual funds..
Customer is assured of getting good returns as per his schemes and investment as the
organization improves offerings considering feedback.
.
13
1.6 LIMITATIONS OF STUDY
This project focuses only on certain factors which are important to discuss but they
cannot be discussed completely :
1- The organizations did not disclose all the data which is an obstacle for the detailed
study.
2- There was limited time span
3- The study is limited only to Nashik city
4- The study is done only in one organization so it does not provide any scope of
comparison with the other organizations.
14
Chapter – 2
Research Methodology
15
2.1 METHOD OF STUDY
Research is an original contribution to the existing stock of knowledge making for its
advancement. It is the pursuit of truth with the help of study, observation, comparison and
experiments. In short, the search for knowledge through objective and systematic method of
finding solution to a problem in research. As such the term “research” refers to the systematic
method consisting of problem. Formulating a hypothesis, collecting a fact or data.
Definition of Research:
According to P V Young:-
“Research is a method of studying, analyzing and conceptualizing social life in
order to extend, modify, correct or verify knowledge whether that knowledge aids
in construction of theory in practice of an art”.
Types of research
Descriptive Research:
It includes surveys and fact-finding enquiries of different kind. The main

purpose of descriptive research is description of the state of affairs, as it exists at
present.
Analytical Research:
Analytical research has to use facts or information already available and

analyze these to make a critical evaluation of the material.
Applied research:
Applied research aims at finishing solution for an immediate problem facing a

society or an industrial business organization.
The certain aim of applied research is to discover a solution for some pressing
practical problem.
16
Fundamental Research:
It is mainly concerned with generalization and with the formulation of a

theory. Basic research is directed towards finding information that has abroad base of
application and adds to the already existing organized body of scientific knowledge.
Quantitative Research:
It is based on the measurement of quantity or amount. It is application to

phenomena that can be expressed in terms of quantity.
Qualitative Research:
It is concerned with qualitative phenomenon that is phenomenon relating to or

involving quality or kind.
Conceptual Research:
Conceptual research is that related to some abstract ideas or theory.

Philosophers and thinkers to develop new concept or to reinterpret existing once
generally use it.
Empirical Research:
Empirical research relies on experience or observation alone, often without due

regard for system and theory. It is database research, coming up with conclusions,
which are capable of being verified, by observation or experiment.
WHAT TYPE IN RESEARCH IS MY SUMMER INTERNSHIP PROJECT

BASED ON?
Analytical Research-
Analytical research has to use facts or information already available and
analyze these to make a critical evaluation of the material.
For eg- ratios of mutual funds are given which we can use to find out the best
scheme
17
SAMPLING TECHNIQUE/METHODS
The purpose of any sampling method is to obtain a sample that is representative of the target
population. Sampling methods are classified as either probability or non-probability.
Probability sampling is based on the concept of random selection, whereas non-probability
sampling is non-random sampling.
Types of Sampling:
 Probability Sampling: Simple Random Sampling Stratified Random Sampling,
Multi-Stage Sampling.
 What is each and how is it done?

 How do we decide which to use?
 How do we analyze the results differently depending on the type of sampling?
 Non-probability Sampling: Why don’t we use non-probability sampling schemes?

Two reasons:
 We can’t use the mathematics of probability to analyze the results.
 In general, we can’t count on a non-probability sampling scheme to produce
representative samples.
 In mathematical statistics books (for courses that assume you have already taken a
probability course):
 Described as assumptions about random variables
 Sampling with replacement versus sampling without replacement
 Simple Random Sampling: A simple random sample (SRS) of size n is produced by

a scheme which ensures that each subgroup of the population of size n has an equal
probability of being chosen as the sample.
18
 Stratified Random Sampling: Divide the population into “strata”. There can be any
number of these. Then choose a simple random sample from each stratum. Combine
those into the overall sample. That is a stratified random sample. (Example: Church A
has 600 women and 400 men as members. One way to get a stratified random sample
of size 30 is to take a SRS of 18 women from the 600 women and another SRS of 12
men from the 400 men.)
 Multi-Stage Sampling: Sometimes the population is too large and scattered for it to
be practical to make a list of the entire population from which to draw a SRS. For
instance, when the polling organization samples US voters, they do not do a SRS.
Since voter lists are compiled by counties, they might first do a sample of the counties
and then sample within the selected counties.
19
2.3 DATA COLLECTION
COLLECTING THE DATA
In dealing with any real life problem it is often found that data at hand are inadequate, and
hence, it becomes necessary to collect data that are appropriate. There are several ways of
collecting the appropriate data which differ considerably in context of money costs, time and
other resources at the disposal of the researcher.
Primary data can be collected either through experiment or through survey. If the researcher
conducts an experiment, he observes some quantitative measurements, or the data, with the
help of which he examines the truth contained in his hypothesis. But in the case of a survey,
data can be collected by any one or more of the following ways:
(e) By observation:
This method implies the collection of information by way of investigator’s own observation,
without interviewing the respondents. The information obtained relates to what is currently
happening and is not complicated by either the past 20ahindra or future intentions or attitudes
of respondents. This method is no doubt an expensive method and the information provided
by this method is also very limited. As such this method is not suitable in inquiries where
large samples are concerned.
(ii) Through personal interview:
The investigator follows a rigid procedure and seeks answers to a set of pre-conceived
questions through personal interviews. This method of collecting data is usuallycarried out in
a structured way where output depends upon the ability of the interviewer to a large extent.
20
(iii) Through telephone interviews:
This method of collecting information involves contacting the respondents on telephone itself.
This is not a very widely used method but it plays an important role in industrial surveys in
developed regions, particularly, when the survey has to be accomplished in a very limited
time.
(iv) By mailing of questionnaires:
The researcher and the respondents do come in contact with each other if this method of
survey is adopted. Questionnaires are mailed to the respondents with a request to return after
completing the same. It is the most extensively used method in various economic and
business surveys. Before applying this method, usually a Pilot Study for testing the
questionnaire is conduced which reveals the weaknesses, if any, of the questionnaire?
Questionnaire to be used must be prepared very carefully so that it may prove to be effective
in collecting the relevant information.
(v) Through schedules:
Under this method the enumerators are appointed and given training. They are provided with
schedules containing relevant questions. These enumerators go to respondents with these
schedules. Data are collected by filling up the schedules by enumerators on the basis of
replies given by respondents. Much depends upon the capability of enumerators so far as this
method is concerned. Some occasional field checks on the work of the enumerators may
ensure sincere work.18 Research Methodology The researcher should select one of these
methods of collecting the data taking into consideration the nature of investigation, objective
and scope of the inquiry, financial resources, available time and the desired degree of
accuracy.
21
2.4 PRESENTATION OF DATA TOOLS OF ANALYSIS &
INTERPRETATION
THE RESEARCH METHODOLOGY APPLIED FOR THIS STUDY IS AS FOLLOWS:
a) Types of Research Analytical

b) Population and Sample unit Nashik city
c) Sampling unit kotak22mahindra mutual fund
d) Collection of Data
1 Primary data Interview and Questionnaire
2 Secondary data Internet, Websites, Newspaper, Books
Journals…
e) Analysis of data By ratios, Percentage method
f) Sample size 50 investors
22
CHAPTER 3
PROFILE OF HDFC MUTUAL
23
3.1 HISTORY & GENERAL INFORMATION.
HDFCgroup, established in 1985 by UdayKotak, is one of India’s leading financial
services conglomerates. In February 2003, HDFCFinance Ltd. (KMFL), the Group’s flagship
company, received a banking licence from the Reserve Bank of India (RBI). With this, KMFL
became the first non-banking finance company in India to be converted into a bank –
HDFCBank Limited (KMBL).
In a study by Brand Finance Banking 500, published in February 2014 by the Banker
magazine (from The Financial Times Stable), KMBL was ranked 245th among the world’s
top 500 banks with brand valuation of around half a billion dollars ($481 million) and brand
rating of AA+. KMBL is also ranked among the top 5 Best Ranked Companies for Corporate
Governance in IR Global Ranking.
HDFCBank is the fourth largest Indian private sector bank by market capitalization,
headquartered in Mumbai, Maharashtra. The bank’s registered office (headquarters) is located
at 27BKC, BandraKurla Complex, Bandra East, Mumbai,Maharashtra, India.
In February 2003, HDFCFinance Ltd, the group's flagship company was given the licence to
carry on banking business by the Reserve Bank of India (RBI). HDFCFinance Ltd. is the first
company in the Indian banking history to convert to a bank.
As on September 30, 2014, HDFCBank has over 641 branches and over 1,159 ATMs spread
across 363 locations in the country. The bank, before merger with ING Vysya had around
29,000 employees.
Mutual fund history
The first introduction of a mutual fund in India occurred in 1963, when the Government of
India launched Unit Trust of India (UTI). Until 1987, UTI enjoyed a monopoly in the Indian
mutual fund market. Then a host of other government-controlled Indian financial companies
came up with their own funds. These included State Bank of India, Canara Bank, andPunjab
National Bank. This market was made open to private players in 1993, as a result of the
historic constitutional amendments brought forward by the then Congress-led government
under the existing regime of Liberalization, Privatization and Globalization (LPG). The
first private sector fund to operate in India was Kothari Pioneer, which later merged
with Franklin Templeton. In 1996, SEBI formulated the Mutual Fund Regulation which is a
comprehensive regulatory framework.[1]
Mutual funds are an under tapped market in India

Despite being available in the market less than 10% of Indian households have invested in
mutual funds. A recent report on Mutual Fund Investments in India published by research and
analytics firm, Boston Analytics, suggests investors are holding back from putting their
money into mutual funds due to their perceived high risk and a lack of information on how
mutual funds work.[] There are 46 Mutual Funds as of June 2013.
24
The primary reason for not investing appears to be correlated with city size. Among
respondents with a high savings rate, close to 40% of those who live in metros and Tier I
cities considered such investments to be very risky, whereas 33% of those in Tier II cities said
they did not know how or where to invest in such assets
Mutual fund distribution in India

Mutual fund investments are sourced both from institutions (companies) and individuals.
Since January 2013, institutional investors have moved to investing directly with the mutual
funds since doing so saves on the expense ratio incurred. Individual investors are, however,
served mostly by Investment advisor and banks. Since 2009, online platforms for investing in
Mutual funds have also evolved.
Average Assets under Management

Assets under management (AUM) is a financial term denoting the market value of all the
funds being managed by a financial institution (a mutual fund, hedge fund, private equity
firm, venture capital firm, or brokerage house) on behalf of its clients, investors, partners,
depositors, etc.
The average Assets under management of all Mutual funds in India for the quarter Jul-13 to
Sep-13 (in INR billion) is given below
VISION
To positively contribute towards economic, environmental and social well-being of

communities through Corporate Social Responsibility agenda
MISSION
Create a lasting value for communities by:

Promoting and supporting education and other interventions for the under privileged
Encouraging employee volunteering
Supporting Non-Governmental Organizations and other institutions with financial and other
resources to collectively deliver community initiatives
25
No. of schemes 46
No. of schemes including options 116
Equity Schemes 22
Debt Schemes 70
Short term debt Schemes 8
Equity & Debt 3
Money Market 0
Gilt Fund 7
COMPETITORS OF KOTAK MUTUAL FUND

Some of the main competitors of HDFC Fund in Nasik are as
Follows:
1) ICICI Mutual Fund
2) Reliance Mutual Fund
3) UTI Mutual Fun
4) Birla Sun Life Mutual Fund
5) SBI Mutual Fund
6) KOTAK MAHINDRA Mutual Fund
26
Year Milestone
1985 HDB Finance Limited commences bill discounting business
1987 HDB Finance Limited enters leasing and hire purchase business
1990 Starts the auto finance division for financing passenger cars
1991 Launches investment banking business
1992 Enters the funds syndication business
Commenced joint venture with Goldman Sachs Group Inc.

1995
Investment Banking division incorporated into a separate company – HDFC Capital Company
The auto finance business is hived off into a separate company - HDFCPrime Limited (formerly
known as HDFCPrimus Limited).
1996
HDFCtakes a significant stake in Ford Credit HDFCLimited, for financing Ford vehicles.
1998 Launches mutual fund through HDFCAsset Management Company (KMAMC).

2000 Kotak Securities launches online broking business (now www.kotaksecurities.com[6]).
Launches insurance business, partners Old Mutual from South Africa to form HDFCOld Mutual
2001
Life Insurance Ltd.
HDFCFinance Ltd. (KMFL), the group's flagship company, receives banking license from the
2003 Reserve Bank of India (RBI). With this, KMFL becomes the first non-banking finance company to
be converted into a commercial bank - HDFCBank Ltd.
2004 Enters alternate assets business with the launch of a private equity fund.
HDFCGroup realigns joint venture in Ford Credit; takes 100% ownership of HDFCPrime (formerly
2005
known as HDFCPrimus Limited) and sells its stake in Ford credit Mahindra to Ford.
2005 Launches a real estate fund
2006 Buys out Goldman Sachs' equity stake in HDFCCapital Company and Kotak Securities Ltd.
2008 Launched a Pension Fund under India's National Pension System (NPS)
HDFCBank Ltd. opens a representative office in Dubai
2009
HDFCBank Ltd. becomes anchor investor in Ahmedabad Commodities Exchange (ACE)
2015 ING Vysya Bank has merged with HDFCBank with effect from April 1, 2015.[7]
27
28
3.2 ORGANISATION STRUCTURE
STRUCTURE OF HDFCMUTUAL FUND
ORGANISATION STRUCTURE
29
Sponsor - Sponsor of the Mutual Fund is the promoter of the Mutual Fund. It
Establishes the Mutual Fund and registers the same with SEBI. The sponsor can be a
bank like SBI, PNB ICICI etc., a financial institution like Fidelity, Franklin Templeton
etc. or a corporate like Reliance, Tata, Birla etc. According to SEBI regulation the
30
sponsor must have a 5 year experience in the financial services market and should have
been profitable for at least 3 years. This is done to ensure that the fund is promoted by an
experienced entity with which the public will have faith in handling their money. The
sponsor appoints the AMC, trustees and the custodians with prior approval of SEBI. It
also contributes at least 40% of the net worth of the AMC.
B. Trust - According to SEBI regulation the Mutual Funds in India is a trust established
under the Indian Trust Act 1982. The trust is managed by a board of trustees or by a
trustee company. There are at least 4 members in the board of trustees and 2/3rd of the
board is independent. The trustees hold the unit holders money in a fiduciary capacity. The
trustees also appoint the AMC in consultation with the sponsor and according to the SEBI
regulation.
C. AMCs - The Asset Management companies are the public face of the Mutual Fund.
They are appointed by the sponsors and the trust under the guidelines of SEBI. The AMC
should have the net worth of minimum Rs. 10 Crore. Half of the members of the board of
the AMC should be independent. The main job of the AMC is to manage the funds of the
investors. It researches the best investment options to put the money in so that the
investors get the maximum return on their investment. There is a fund manager and his
team which carries out the research. The AMC floats a number of schemes for the
investors to invest their money based on their investment objectives and risk appetite.
These varied schemes help attract the public to the company. Some of the AMCs in India
are reliance Mutual Fund, HDFC Bank Mutual Fund, ICICI Prudential Mutual Fund etc.
D. Registrar - The registrar processes the applications and records the details of the
investors. They process the dividend payouts to the investors and send information to
them. Thus they maintain the backend operations of the Mutual Fund
E. Custodian - it is the guardian of the funds and the assets of the investor. It is appointed
by the board of trustees and is responsible for the securities held in the Mutual Funds portfolio.
It is also regulated by the SEBI
31
Classification of Funds
Mutual Funds can be classified in a variety of ways. In this report the classification of
Mutual fund on basis of structure, investment objectives and scheme wise classification will
be discussed. The types of mutual funds can be as depicted in
Figure.
Types of Mutual Funds

Scheme
Structure Investment Wise
Open
Ended Equity ELSS
Close Fixed
Ended Debt
Term Plan
Balanced SIP
Money
Market
32
TYPES OF MUTUAL FUNDS
Structure - The most basic classification of the Mutual Funds is on the structure of the
fund. This classification is based on the premise whether the Fund is an Open Ended or a
Close Ended Fund
A. Open Ended Fund - An open ended Mutual Fund is a Fund where in the investor can
invest at any point of time and for any duration that he or she wants. The investors can buy
or sell the units of the fund at NAV related prices at any point of time directly from the
fund. The open ended fund is not traded at the stock market and is redeemed at the NAV.
The number of outstanding units of the fund changes everyday based on the NAV of the
fund on the particular day. The minimum subscription amount for the fund is Rs. 50
Corer. The
Amount subscribed is redeemed if the minimum subscription amount is not reached by
the
fund. The corpus of the Open Ended scheme changes every day and the unit capital is not
fixed.
B. Close Ended Fund - A Close Ended Fund is a fund wherein an investor can invest
only
during a fixed period of time. This investment is for a fixed duration as specified in the
offer document of the fund. The close ended funds are listed in the stock exchange. If an
investor wishes to invest in the fund after the time period of the fund he will have to buy
the units of the fund from the stock market. The prices at which the units are sold or
redeemed depends on the market prices which are linked to the NAV. The number of
units of the fund and the unit capital remains unchanged in case of a Close Ended Fund.
The minimum subscription amount of the fund is Rs. 20 Crore. The amount subscribed is
redeemed if the minimum subscription amount is not reached by the fund.
Investment Objective A Mutual fund can also be classified based on the investment
objectives of the fund. These investment objectives are based on the risk appetite of the
investors and the returns that they expect from the funds. The classification based on the
investment objectives of the fund is whether the fund invests in Equity Market, Debt
Market or the Money Market.
33
Equity Funds - The Equity Funds are those funds which invest primarily in the
Equity
Market. The money of the investors is invested in the shares of the various companies.
These companies are chosen based on the objectives of the fund as stated in the offer
documents. Thus they can be large-cap or mid-cap companies or they can be companies
in a particular sector of the economy like infrastructure or power. Some funds which are
index funds may invest in companies which form the part of the index the fund considers as
a base for example the B.S.E. 30 or Nifty 50 etc. The equity funds usually have growth and
dividend options. In growth option the customer is not given any dividend but in the
dividend option the customer has the choice of either getting the dividend or reinvesting it
in the shares of the companies. The equity funds are characterized by high risk and high
returns. Over a period of 5-7 years equity funds give a CAGR of more than 18-20% and
they generally outperform the share market. These returns are one of the highest returns
generated by the various investment instruments. Equity based Mutual Funds outperform
the stock market mainly because the fund managers not only invest in the stocks of major
companies in the stock market but also in the stocks of smaller companies also which are
likely to give good returns.
Debt Funds - The debt funds are those funds that invest primarily in the debt market.
These
funds invest in the government securities and corporate bonds. Within debt funds there
are a lot of type of funds depending on which instruments they invest in. Some of the
funds invest in AAA and AA commercial papers. Others like Gilt funds invest only in the
government securities. The level of risk and returns in the case of Debt Funds depend on
the instruments that the funds have invested in but are overall less risky than equity based
funs. At the same time these funds cant match the level of returns that are generated by the
equity based funds. These are recommended for people with no fixed level of earnings and
a low risk appetite like retirees who want a source of investment for their savings but
don‟t want to involve in the vagaries of the stock market.
34
Balanced Funds - These funds are a combination of Equity Funds and Debt funds with
some portion of the fund invested in the share market while other is invested in the
government securities and corporate bonds. They offer the best of both Equity and Debt
funds as they have manageable amount of risks and also give good returns. Some funds
like the ICICI Prudential Target Returns Fund invest initially in the Equity market and
then after getting the profit invest the same in the Debt Market thus giving the investors
best of both worlds.
Money Market - The Money Market or Liquid Funds are those funds which are invested
in
the short term or money market. These are invested in the instruments with maturity period
of less than 1 year like treasury bills, commercial papers, certificates of debt etc. The
investment portfolio is very liquid and enables the investors to hold their investments for
very short horizons of a day or more. These funds have zero risk and they also give good
returns to their investors. They are mainly offered to people who have excess money to
invest over a short period of time only.
Scheme Wise - Mutual Funds can also be classified based on the various types of the
schemes that are offered to the public. These schemes help the public in managing their
investments based on the investment objectives of the different investors. The flexibility
of investing in different types of schemes is a highly attractive feature of Mutual Funds.
Some of the major types of schemes available to the investors are described below.
ELSS - The ELSS or Equity Linked Saving Scheme is a very popular scheme of Mutual
Funds for the purpose of tax saving. As the name suggest the Mutual Fund under ELSS
invests at least 90% of the fund in the stock market. The fund usually has a 3 year lock in
period. It can be an open ended or a close ended fund. Investments made under ELSS are
used to save tax. Under the section 80C of income tax investment of up to Rs 1 Lac in
ELSS is tax deductible. The dividends earned under this scheme are also tax free. The
investors also benefit in terms of the long term capital gain taxation. Thus financial planners
strongly advise their clients to invest in this fund during tax planning.
35
Fixed Term Plan - FTP or Fixed Term Plan schemes are special schemes of Mutual
Funds.
These are short term close ended schemes. The AMCs issue a fixed number of units for
each series only once and then the issue is closed after the initial offering period. These
units are not listed in the stock market. FTPs are generally offered in money market
funds. They can be considered as an alternative to investing in the corporate deposits or
bank deposits as they give a higher rate of return.
SIP - One of the best schemes of Mutual Funds is considered to be SIP or Systematic
Investment Plan. The basic funda of SIP is to encourage the people to invest a small
amount on a regular basis. Under SIP one can invest as little as Rs 100 per month in
mutual funds. This regular investment over a large period of time gives fantastic returns
to the individuals. The major reason for high returns of SIP investments as compared to
others is the concept of Rupee Cost Averaging. When the market is booming the value of
the units bought by the investors have increased while in the bearish market when the
NAV of the funds fall then the number of units allotted is more. The value of these higher
numbers of units increases when the Bull Run begins again. Thus the investors set to gain
both when the market is up or down. This coupled with the small amount needed to invest
has led to SIP being one of the most popular Mutual Fund schemes.
These are all the part of organization of HDFC mutual funds
36
3.3 PRODUCT & SERVICES
EQUITY FUNDS OF HDFC MUTUAL FUND
1. KOTAK 50
Open Ended Equity
SCHEME FACTS
Structure- Open ended equity scheme
Quarterly AAUM ` 732.59 cr
Fund managers- Mr Harish Krishnan
Launch Date - 29 Dec 1998
Benchmark - CNX Nifty
Load structure
Entry load- Nil
Exit load
(w.e.f. July 20, 2015, exit load structure is revised) For redemptions / switch outs
(including SIP/STP) within 1 year from the date of allotment of units, irrespective of the
amount of investment: 1%.
For redemption/switch outs (including SIP/STP) after 1 year from the date of allotment of
units, irrespective of the amount of investment: Nil.
Other details and ratios
Min. Initial Investment.- 5,000
Additional Investment -.1,000
Standard Deviation - ^14.87 %
Beta - ^1.09
Sharpe - ^0.95
37
FUND PORTFOLIO AS ON 31/07/2015
7.85%Infosys Ltd.(Software)
7.51%HDFC Bank Ltd.(Banks)
6.34%ICICI Bank Ltd.(Banks)
4.96%Larsen And Toubro Ltd.(Construction Project)
4.66%Axis Bank Ltd(Banks)
3.77%Maruti Suzuki India Limited(Auto)
3.56%Reliance Industries Ltd.(Petroleum Products)
3.30%Tata Consultancy Services Ltd.(Software)
3.25%IndusInd Bank Ltd.(Banks)
2.93%State Bank Of India(Banks)
38
2. KOTAK OPPORTUNITIES
Open Ended Equity Scheme
Kotak Opportunities is an open-ended equity growth scheme. The investment
objective of the scheme is to generate capital appreciation from a diversified portfolio
of equity & equity related instruments.
SCHEME FACTS
Structure-Open-ended equity growth scheme
Quarterly AAUM* -649.19 cr
Fund managers-Mr.HarshaUpadhyaya
Launch Date-9th Sep 2004
Benchmark- CNX 500
Load structure
Entry load-Nil
Exit load
For redemptions / switch outs (including SIP/STP) within 1year from the date of
allotment of units, irrespective of the amount of investment: 1%.
For redemption/switch outs (including SIP/STP) after 1 year from the date of
allotment of units, irrespective of the amount of investment: Nil.
Min. Initial Inv.-` 5,000
Additional Inv.-1000 & in multiples of `1
Standard Deviation ^-13.97 %
Beta ^-0.96
Sharpe ^-1.18
39
3.83%Bajaj Finance Limited(Finance)
2.68%MothersonSumi Systems Ltd.(Auto Ancillaries)
2.54%Shree Cement Ltd.(Cement)
40
3. KOTAK SELECT FOCUS FUND
Kotak Select Focus Fund is an open-ended equity scheme. The investment objective of the
scheme is to generate long-term capital appreciation from a portfolio of equity and equity
related securities, generally focused on a few selected sectors.
SCHEME FACTS
Structure-An Open Ended Equity Scheme
Quarterly AAUM* -2666.89 cr
Fund managers-MrHarshaUpadhyaya
Launch Date-11th Sep 2009
Benchmark-CNX 200
Load structure
Entry load-Nil
Exit load
For redemptions / switch outs (including SIP/STP) within 1year from the date of allotment
of units, irrespective of the amount of investment: 1%. For redemption/switch outs
(including SIP/STP) after 1 year from the date of allotment of units, irrespective of the
amount of investment: Nil.
Min. Initial Inv.- 5000 & in multiple of ` 1 for purchase and for `0.01 for switches
Additional Inv.-` 1000 & in multiples of `1
Standard Deviation ^14.67 %
Beta ^1.02
Sharpe ^1.29
41
3.41%Ultratech Cement Ltd.(Cement)
3.09%Max India Ltd.(Finance)
2.74%Bharat Electronics Ltd(Industrial Capital Goods)
42
4. KOTAK CLASSIC EQUITY
Kotak Classic Equity is an open - ended equity growth scheme. The investment objective
of the scheme is to generate capital appreciation from a diversified portfolio of equity and
equity related securities
SCHEME FACTS
Quarterly AAUM* - 118.42 cr
Fund managers-Mr. Harish Krishnan
Launch Date-27th Jul 2005
Benchmark- CNX 100 wef April 7, 2015
Load structure
Entry load-Nil.
Exit load-Nil (w.e.f. December 1, 2014)
Min. Initial Inv.- 5,000
Additional Inv.-1000 & in multiples of `1
Beta ^0.88
Sharpe ^1.06
43
5.35%HDFC Ltd.(Finance)
3.40%Tata Consultancy Services Ltd.(Software)
2.82%Hindustan Unilever Ltd.(Consumer Non Durables)
44
5. KOTAK TAXSAVER
Kotak Tax Saver is an open-ended equity linked saving scheme. The investment objective
of the scheme is to generate long-term capital appreciation from a diversified portfolio of
equity and equity related securities and enable investors to avail the income tax rebate, as
permitted from time to time.
SCHEME FACTS
Structure-An open -ended equity linked saving scheme
Quarterly AAUM* 498.23 cr
Fund managers-Mr. HarshaUpadhyaya
Launch Date-23rd Nov 2005
Benchmark- CNX 500
Load structure
Entry load-Nil
Exit load
Exit load is not applicable for Kotak Tax Saver Scheme
Min. Initial Inv.` 500
Additional Inv.500 & in multiples of`500
Beta ^1.12
Sharpe ^0.91
45
2.86%Whirlpool of India Ltd.(Consumer Durables)
2.72%Britannia Industries Ltd.(Consumer Non Durables)
2.64%Bajaj Finance Limited(Finance)
46
6. KOTAK MID CAP
Kotak Midcap is an open-ended equity growth scheme. The investment objective is to
generate capital appreciation from a diversified portfolio of equity & equity related
securities.
SCHEME FACTS
Quarterly AAUM* ` 344.05 cr
Fund managersMr. PankajTibrewal
Launch Date-24th Feb 2005
Benchmark CNX Midcap
Load structure
Entry load-Nil
Exit load
For redemptions / switch outs (including SIP/STP) within 1year from the date of allotment
of units, irrespective of the amount of investment: 1%.
Min. Initial Inv. 5,000
Additional Inv.1000 & in multiples of `1
Beta ^1.01
Sharpe ^1.14
47
4.92%Techno Electric & Engineering Co Ltd.(Construction Project)
2.66%Atul Ltd.(Chemicals)
2.54%Federal Bank Ltd.(Banks)
2.52%The Ramco Cements Ltd(Cement)
2.47%Finolex Cables Ltd.(Industrial Products)
2.45%MRF Limited(Auto Ancillaries)
2.41%Solar Industries India Limited(Chemicals)
2.40%Persistent Systems Limited(Software)
2.38%Britannia Industries Ltd.(Consumer Non Durables)
48
7. KOTAK EMERGING EQUITY
Kotak Emerging Equity is a open ended equity growth scheme. The investment objective
of the scheme is to generate long-term capital appreciation from a portfolio of equity and
equity related securities by investing predominantly in mid and small cap companies.
SCHEME FACTS
Structure-An Open - Ended Equity Growth scheme
Quarterly AAUM* ` 673.47 cr
Fund managers Mr. PankajTibrewal.
Launch Date - 30th Mar 2007
Benchmark- S&P BSE Mid Small Cap Index
Load structure
Entry load- Nil
Exit load
(w.e.f. July 20, 2015, exit load structure is revised) For redemptions / switch outs
(including SIP/STP) within 1 year from the date of allotment of units, irrespective of the
amount of investment: 1%.
Additional Inv.` 1000 & in multiples of ` 1
Beta ^1.02
Sharpe ^1.33
49
3.76% Whirlpool of India Ltd.(Consumer Durables)
3.02% IndusInd Bank Ltd.(Banks)
2.90% The Ramco Cements Ltd(Cement)
2.77% Torrent Pharmaceuticals Ltd.(Pharmaceuticals)
2.68% Persistent Systems Limited(Software)
2.62% Shriram City Union Finance Ltd.(Finance)
2.57% V-Guard Industries Ltd.(Industrial Capital Goods)
2.40% MBL Infrastructures Ltd.(Construction)
2.35% Solar Industries India Limited(Chemicals)
2.35% Hawkins Cooker Ltd(Household Appliances)
50
8.KOTAK EQUITY ARBITRAGE
Kotak Equity Arbitrage is an open-ended equity growth scheme. The investment objective
of the scheme is to generate capital appreciation and income by predominantly investing
in arbitrage opportunities in the cash and derivatives segment of the equity market, and by
investing the balance in debt and money market instruments.
SCHEME FACTS
Structure- An open ended equity growth scheme
Quarterly AAUM* 3768.95 cr
Fund managers- Mr. Deepak Gupta
Launch Date- 29th Sep 2005
Benchmark- CRISIL Liquid Fund Index
Load structure
Entry load- Nil
Exit load
For redemptions / switch outs (including SIP/STP) within 90 days from the date of
allotment of units, irrespective of the amount of investment: 0.50%.
For redemption/switch outs (including SIP/STP) after 90 days from the date of allotment
of units, irrespective of the amount of investment: Nil.
Min. Initial Inv.-` 5,000
Additional Inv.-` 1000 & in multiples of `1
Beta ^1.02
Sharpe ^2.04
51
2.34%HDFC Ltd.(Finance)
2.17%Yes Bank Ltd(Banks)
2.09%Sun Pharmaceuticals Industries Ltd.(Pharmaceuticals)
2.02%LIC Housing Finance Ltd.(Finance)
1.87%Cipla Ltd.(Pharmaceuticals)
52
9.EQUITY SAVINGS FUND
Kotak Equity Savings Fund, an Open ended equity scheme. The investment objective of
the scheme is to generate capital appreciation and income by predominantly investing in
arbitrage opportunities in the cash and derivatives segment of the equity market, and
enhance returns with a moderate exposure in equity & equity related instruments.There is
no assurance or guarantee that the investment objective of the scheme will be achieved.
SCHEME FACTS
Structure Open-ended equity scheme
Quarterly AAUM` 501.53 cr
Fund managersMr Deepak Gupta &MrAbhishekBisen
Launch Date13 Oct 2014
Benchmark 75% of Crisil Liquid Fund Index & 25% in CNX Nifty
Load structure
Entry load Nil
Exit load
For redemptions / switch outs (including SIP/STP) within 1 year from the date of
allotment of units, irrespective of the amount of investment: 1%.
Additional Inv. 1,000
Beta: 0.79
Sharpe: 0.56
Standard Deviation : 14.98%
53
4.88%CMC Ltd.(Software)
2.44%Strides Arcolab Ltd.(Pharmaceuticals)
2.09%Yes Bank Ltd(Banks)
1.82%DrReddys Laboratories Ltd(Pharmaceuticals)
1.68%Union Bank Of India(Banks)
1.63%Eicher Motors Ltd(Auto)
54
10.Kotak Infrastructure & Economic Reform Fund

The investment objective of the Scheme is to generate long-term capital appreciation from
a diversified portfolio of predominantly (at least 65%) equity and equity-related securities
of companies involved in economic development of India as a result of potential
investments in infrastructure and unfolding economic reforms. There is no assurance that
the investment objective of the Scheme will be achieved.
SCHEME FACTS
Structure-Open-ended equity scheme
Quarterly AAUM*` 146.21 Cr.
Fund managers-Mr Harish Krishnan
Launch Date- February 27, 2008
Benchmark S&P BSE - 100
Load structure
Entry load Nil
Exit load
For redemptions / switch outs (including SIP/STP) within 1 year from the date of
allotment of units, irrespective of the amount of investment – 1% ,For redemptions /
switch outs (including SIP/STP) after 1 year from the date of allotment of units,
irrespective of the amount of investment – NIL
Min. Initial Inv.` 5,000
Additional Inv.` 1,000
Beta: 1.44
Sharpe : 0.8 Standard Deviation : 20.27%
55
9.43%Kirloskar Oil Engines Ltd.(Industrial Products)
8.47%Shree Cement Ltd.(Cement)
7.29%BhartiAirtel Ltd.(Telecom - Services)
6.99%Indraprastha Gas Ltd.(Gas)
6.75%KSB Pump Ltd(Industrial Products)
6.10%Cummins India Ltd.(Industrial Products)
5.90%Thermax Ltd.(Industrial Capital Goods)
5.73%SKF India Ltd(Industrial Products)
56
3.4 CORPORATE & FUNCTIONAL PRACTICES
CSR activities of kotak mutual funds and bank

Supporting Education in Rural Schools
In FY 2013-14, the Bank initiated community engagement initiatives in few villages to

infrastructure for education. Three villages in Niphad Tehsil of Nasik District were
identified this initiative. The three villages - Dixi, Shivare, Kothure-are primarily agrarian
based villages with more than 80% of population relying on agriculture and allied
activities for their livelihoods. Nearly 40% of their population belongs to economically
and socially weaker sections of society, such as small & marginal farmers and agriculture
labourers. Primary schools in all three villages lack basic infrastructure, like benches for
students. As part of Republic Day celebrations, the Bank provided benches and built
compound walls for schools. 425 students were also provided with a school kit comprising
notebooks and stationary items.
57
Employee Volunteering
The Bank and its subsidiaries encourage employees to volunteer,on company time, CSR
work. The Bank sponsors employees across its group companies to participate in Habitat
for Humanity’s ‘Volunteer Build’ home making initiative in rural and tribal regions.
Employees work with prospective homeowners, assisting them with bricklaying and
painting work.
58
Running for a Cause
HDFCBank and its subsidiaries are aligned with the philosophy of a collaborative CSR
approach. As an organisation, Kotak encourages employee participation and involvement
in its CSR initiatives. Kotak’s participation at the marathon has led to a growing
community of runners in the organization, some with no athletic background, who train
and run the marathon not only to improve their fitness level, but also raise pledges for a
cause with as much enthusiasm.
59
The Bank encourages and supports employees to participate at three Marathons - Standard
Chartered Mumbai Marathon, Airtel Delhi Half Marathon and Pinkathon, supporting
various causes close to their heart.
Efforts of KMBL and its employees earned the following recognitions in Corporate
Challenge category of the Mumbai Marathon 2014:
KMBL - Highest fund raising company (including employee pledges)
KVS Manian, President, Corporate & Investment Banking, KMBL - Highest

individual pledge raiser
Shanti Ekambaram, President, Consumer Banking, KMBL - Second highest

individual pledge raiser.
She was recognised as the highest individual woman pledge raiser in 2011, and as the
second highest individual pledge raiser in 2013.
60
Employee Initiatives
HDFCGroup Payroll Giving Programme: Through the programme, employees of the

Bank and its subsidiaries support The Akanksha Foundation, Cancer Patients Aid
Association (CPAA), National Association for the Blind (NAB), Dignity Foundation,
Make-A-Wish Foundation of India and SOPAN (Society of Parents of Children with
Autistic Disorders).
Blood Donation: On the occasion of HDFCGroup day (November 21), a week-long

blood donation camp for employees is organised across the country, in association with
Red Cross, King Edward Memorial (KEM) Hospital and other government blood banks.
You Can Serve: The Bank has collaborated with Dhanwantari Medical Trust (DMT) for
a newspaper collection drive. Employees donate old newspaper and magazines, and its
proceeds are used to help and support cancer-affected children and their families.
Giving Collection Drive: The Bank conducts the ‘giving collection drive’ with the NGO,
Goonj. As part of the drive, employees donate clothes, books, toys and other utility items
for the underprivileged.
NGO Exhibitions: During festivals like Diwali and Christmas, the Bank invites NGOs to
set up stalls at its offices to sell products made by underprivileged and also offers a
platform to NGOs to raise funds.
61
OTHER FUNCTIONAL ACTIVITIES
Personal Banking
 Accounts & Deposits.
 Loans
 Cards
 Investments & Insurance
 Financial Inclusion
 Convenience Banking
 NRI banking
 Accounts & Deposits
 Transfer Money
 Loans
 Cards
 Investments & Insurance
Privy League
 Investment and Insurance Products
 Personal Banking
 Business Banking
 Special Services
 Financial Planning
 Privileges
62
Wealth Management
 Home
 Know Your Asset Class
 Build Your Portfolio
 About Kotak Wealth Management
SME Banking
 Accounts
 Loans & Overdrafts
 Working Capital Finance
 Dealer Finance
 Trade Services
Wholesale Banking
 Accounts
 Funded Products
 Non - Funded Products
 Treasury Products
 Investment Products
63
CHAPTER 4
REVIEW OF LITERATURE
64
4.1 MEANING & CONCEPT OF THE TOPIC
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. It is essentially a diversified portfolio of financial instruments -
these could be equities, debentures/bonds or money market instruments. The corpus of the
fund is then deployed in investment alternatives that help to meet predefined investment
objectives. The income earned through these investments and the capital appreciation
realised are shared by its unit holders in proportion to the number of units owned by them.
Thus a Mutual Fund is a 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.
You could make money from a Mutual Fund in three ways:
 Income is earned from dividends declared by Mutual Fund schemes from time to
time
 If the fund sells securities that have increased in price, the fund has a capital gain.
This is reflected in the price of each unit. When investors sell these units at prices
higher than their purchase price, they stand to make a gain
 If fund holdings increase in price but are not sold by the fund manager, the fund's
unit price increases. You can then sell your Mutual Fund units for a profit. This is
tantamount to a valuation gain
Mutual Fund schemes may be classified on the basis of their structure and their
investment objective.
65
Comparision of mutual fund schemes of HDFCmutual funds through ratios
Schemes Beta Standard Sharpe

Deviation
1. KOTAK 50
^1.09 ^14.87 % ^0.95
2. KOTAK OPPORTUNITIES ^-0.96 ^-13.97 % ^-1.18
3. KOTAK SELECT FOCUS ^1.02 ^14.67 % ^1.29

FUND
4. KOTAK CLASSIC EQUITY ^0.88 ^12.33 % ^1.06
5. KOTAK TAXSAVER ^1.12 ^16.26 % ^0.91
6. KOTAK MID CAP ^1.01 ^18.8 % ^1.14
^1.02 ^18.54 % ^1.33

7. KOTAK EMERGING
EQUITY
8. KOTAK EQUITY
ARBITRAGE ^1.02 ^0.53 % ^2.04
9. EQUITY SAVINGS FUND 0.79 14.98% 0.56
: :
10.Kotak Infrastructure & 1.44 20.27%

0.8
Economic Reform Fund
Table No-4.1
66
4.2 BASIC THEORIES OF THE TOPIC
These are some basic terms of mutual funds
 Growth Option
Dividend is not paid-out under a Growth Option and the investor realises only the capital
appreciation on the investment (by an increase in NAV).
 Dividend Payout Option
Dividends are paid-out to investors under the Dividend Payout Option. However, the
NAV of the Mutual Fund scheme falls to the extent of the dividend payout.
 Dividend Re-Investment Option
Here the dividend accrued on Mutual Funds is automatically re-invested in purchasing

additional units in Open-ended Funds. In most cases Mutual Funds offer the investor an
option of collecting dividends or re-investing the same.
 Retirement Pension Option
Some schemes are linked with retirement pension. Individuals participate in these options
for themselves, and corporates participate for their employees.
 Insurance Option
Certain Mutual Funds offer schemes that provide insurance cover to investors as an added
benefit.
INVESTMENT PLANS
The term ‘investment plans’ generally refers to the services that the fund providing to
investor offering different ways to invest or reinvest. The different reinvestment plans
are an important consideration in the investment decision, because they determine the
level of flexibility available to the investor, alternate investment plans offered fund
allow the investor freedom with respect to investing one time or at regular intervals,
making transfers to different schemes within the same fund family, or receiving income
at specified intervals or accumulating distributions. Below, we look at some of the
investment plans offered by mutual fund in India.
67
AIP: AUTOMATIC INVESTMENT PLAN
These require the investor to invest a fixed sum periodically, thereby letting the
investor save in disciplined and phased manner. The mode of investment could be
trough direct debit to the investor’s salary bank account. Such plans are also known as
‘SIP’ investors looking at “rupee cost averaging” will generally opt for fund that offer
this facility. A modified version of is the Voluntary Accumulation Plan (VAP) that
allow the investor flexibility with respect to the amount and frequency of investment.
Both AIP and VAP are only two optional ways of investing in a disciplined manner, in
open end funds. The different in that in the AIP, the investor agrees as a contractual
obligation to keep investing, whereas in case of VAP, he is not obliged to keep investing
but has to impose a certain voluntary-self discipline on himself.
SWP: SYSTEMATIC WITHDRAWL PLAN

Such plans allow the investors to make systematic withdrawals from his fund
investment account on a periodic basis, thereby providing the same benefit as regular
income. The investor must withdraw a specific minimum amount with the facility to
have withdrawal amount with the facility to have withdrawal amount sent to his
residence by a cheque a credited directly to his bank account. The amount withdrawn is
treated as redemption of units at the applicable NAV as specified in the offer document.
STP: SYSTEMATIC TRANSFER PLAN

These plans allow the investor to transfer on periodic basis a specified amount
from one scheme to another within the same fund family- meaning two schemes
managed by the same AMC and belonging to the same fund. A transfer will be treated
as the redemption of units from the scheme from which the transfer is made, and as
investment in unit of the scheme in to which the transfer is made. Such redemption or
investment will be at the applicable NAV at the respective scheme as specified in the
offer document. It is necessary for the investor to maintain the balance in the scheme
from which the transfers are made. But UTI and other private fund may generally offer
this service to investor in India. Many funds do not even charge any transaction fees for
this service- an added advantage for active investor.
68
PROCESS OF NFO
1. Establishment of Idea
2. Market Analysis
3. Setting Objective and Sector Allocation
4. Appointment of Managers
5. Registration with SEBI and AMFI
6. Offer Document
7. Advertisement
8. Subscription
9. Allotment of Units
NET ASSET VALUE (NAV):
A mutual fund is a common investment vehicle where the assets of the fund belong
directly to the investor. Investors’ subscriptions are accounted for by the fund not as
liabilities or deposits but as unit capital. On the other hand, the investments on behalf of
the investors are reflected on the assets side and are the main constituents of the balance-
sheet. There are, however, liabilities of strictly short term nature that may be part of the
balance sheet. The fund’s net assets are therefore defined as the assets minus liabilities. As
there are many investors in a fund, it is common practice for mutual funds to compute the
share of each investor on the basis of the NET ASSET PER UNIT, commonly known as
the NAV.The following are the regulatory requirement and accounting definition laid
down by SEBI.
69
RATIOS
There are five main indicators of investment risk that apply to the analysis of stocks,
bonds and mutual fundportfolios. They are alpha, beta, r-squared, standard deviation and
the Sharpe ratio. These statistical measures are historical predictors of investment
risk/volatility and are all major components of modern portfolio theory (MPT). The MPT
is a standard financial and academic methodology used for assessing the performance of
equity, fixed-income and mutual fund investments by comparing them to market
benchmarks.
All of these risk measurements are intended to help investors determine the risk-reward
parameters of their investments. In this article, we'll give a brief explanation of each of
these commonly used indicators.
Alpha
Alpha is a measure of an investment's performance on a risk-adjusted basis. It takes the
volatility (price risk) of a security or fund portfolio and compares its risk-adjusted
performance to a benchmark index. The excess return of the investment relative to the
return of the benchmark index is its "alpha."
Simply stated, alpha is often considered to represent the value that a portfolio manager
adds or subtracts from a fund portfolio's return. A positive alpha of 1.0 means the fund has
outperformed its benchmark index by 1%. Correspondingly, a similar negative alpha
would indicate an underperformance of 1%. For investors, the more positive an alpha is,
the better it is.
Beta
Beta, also known as the "beta coefficient," is a measure of the volatility, or systematic
risk, of a security or a portfolio in comparison to the market as a whole. Beta is calculated
using regression analysis, and you can think of it as the tendency of an investment's return
to respond to swings in the market. By definition, the market has a beta of 1.0. Individual
security and portfolio values are measured according to how they deviate from the market.
A beta of 1.0 indicates that the investment's price will move in lock-step with the market.
A beta of less than 1.0 indicates that the investment will be less volatile than the market,
and, correspondingly, a beta of more than 1.0 indicates that the investment's price will be
more volatile than the market. For example, if a fund portfolio's beta is 1.2, it's
theoretically 20% more volatile than the market.
Conservative investors looking to preserve capital should focus on securities and fund
portfolios with low betas, whereas those investors willing to take on more risk in search of
higher returns should look for high beta investments.
70
R-Squared
R-Squared is a statistical measure that represents the percentage of a fund portfolio's or
security's movements that can be explained by movements in a benchmark index. For
fixed-income securities and their corresponding mutual funds, the benchmark is the U.S.
Treasury Bill, and, likewise with equities and equity funds, the benchmark is the S&P 500
Index.
R-squared values range from 0 to 100. According to Morningstar, a mutual fund with an
R-squared value between 85 and 100 has a performance record that is closely correlated to
the index. A fund rated 70 or less would not perform like the index.
Mutual fund investors should avoid actively managed funds with high R-squared ratios,
which are generally criticized by analysts as being "closet" index funds. In these cases,
why pay the higher fees for so-called professional management when you can get the
same or better results from an index fund?
Standard Deviation
Standard deviation measures the dispersion of data from its mean. In plain English, the
more that data is spread apart, the higher the difference is from the norm. In finance,
standard deviation is applied to the annual rate of return of an investment to measure its
volatility (risk). A volatile stock would have a high standard deviation. With mutual
funds, the standard deviation tells us how much the return on a fund is deviating from the
expected returns based on its historical performance.
Sharpe Ratio
Developed by Nobel laureate economist William Sharpe, this ratio measures risk-adjusted
performance. It is calculated by subtracting the risk-free rate of return (U.S. Treasury
Bond) from the rate of return for an investment and dividing the result by the investment's
standard deviation of its return.
The Sharpe ratio tells investors whether an investment's returns are due to smart
investment decisions or the result of excess risk. This measurement is very useful because
although one portfolio or security can reap higher returns than its peers, it is only a good
investment if those higher returns do not come with too much additional risk. The greater
an investment's Sharpe ratio, the better its risk-adjusted performance.
The Bottom Line

Many investors tend to focus exclusively on investment return, with little concern for
investment risk. The five risk measures we have just discussed can provide some balance
to the risk-return equation. The good news for investors is that these indicators are
calculated for them and are available on several financial websites, as well as being
incorporated into many investment research reports. As useful as these measurements are,
keep in mind that when considering a stock, bond or mutual fund investment, volatility
risk is just one of the factors you should be considering that can affect the quality of an
investment.
71
4.3 REVIEW OF RESEARCH ON THE TOPIC
Previous research on HDFCmutual funds done- yes
Who did the research?
JopaleYogeshkisanTopic( Comparision between mutual funds and other investments)
Conclusions reached – Mutual funds are a better option for investments
How did the previous research influence my research?
It helped me the getting knowledge about how mutual funds are a better option for
investment and why should people invest in equity schemes of mutual funds
It also enlightened me about the advantages of mutual funds which are as follows
PROFESSIONAL INVESTMENT MANAGEMENT

Mutual funds hire full-time, high-level investment professionals. Funds can afford to do
so as they manage large pools of money. The managers have real-time access to crucial
market information and are able to execute trade on the largest and most cost-effective
scale.
DIVERSIFICATION
Mutual funds invest in a broad range of securities. This limits investment risk by reducing
the effect of a possible decline in the value of any one security. MutualFUND unit-holders
can benefit from diversification techniques usually available only to investors wealthy
enough to buy significant positions in a wide variety of securities.
LOW COST
A mutual fund let's you participate in a diversified portfolio for as little as Rs.5,000/-, and
sometimes less. And with a no-load fund, you pay little or no sales charges to own them.
CONVENIENCE AND FLEXIBILITY
You own just one security rather than many, yet enjoy the benefits of a diversified
portfolio and a wide range of services. Fund managers decide what securities to trade
collect the interest payments and see that your dividends on portfolio securities are
received and your rights exercised. It also uses the services of a high quality custodian and
registrar in order to make sure that your convenience remains at the top of our mind.
72
PERSONAL SERVICE
One call puts you in touch with a specialist who can provide you with information you can
use to make your own investment choices. They will provide you personal assistance in
buying and selling your fund units, provide fund information and answer questions about
your account status. Our Customer service centers are at your service and our
MARKETING team would be eager to hear your comments on our schemes.
LIQUIDITY
In open-ended schemes, you can get yourMONEY back promptly at net asset value
related prices from the mutualFUND itself.
TRANSPARENCY
You get regular information on the value of your investment in addition to disclosure on
the specific investments made by the mutual fund scheme.
2ndResearch
AUTHOR: Naveen Jain L. C. Gupta
TITLE-How to invest in shares & mutual funds a basic book for investors
1. Language: English
2. Length: 94 pages
3. Publisher: KaveriPrakashan
4. Year-2011
Abstract of the book
The present book is intended to give ordinary investors a basic understanding about the
Indian stock market. It covers a wide range of aspects including, for example, choosing
the right companies understanding the market's behavior over both the short-term and the
long-term the relationship of the secondary market for shares to the market for new issues
of shares, etc. The book also explains the market's terminology, such as the P/E ratio,
dividend yield, as well as important accounting terms. An investors may invest in shares
directly or through mutual funds. There is a great variety of mutual fund schemes. These
73
are briefly explained so that the investor can choose the best ones from his/her point of
view. At the end, the book provides a comprehensive Glossary of relevant terms
3rdResearch
AUTHOR: Palgrave MacMillan
TITLE-Understanding Investment Funds
Language: English
Length: 179 pages
Abstract
1. In light of recent financial crises, the role of investment funds is a recurring

subject for discussion. In the past, crises used to be limited to singular markets or
specific asset classes. In today's crises, many different asset classes are affected
simultaneously and globally. Given this new context, our traditional methods must
be adapted with the overall objective to strengthen the scientific knowledge of
investment funds. The aim of this book is to provide new insights, ideas and
empirical evidence that will improve tools and methods at our disposal for fund
performance analysis. This book proposes a number of topics that are current of
interest: two portfolio optimization models with a multi-fractal approach and a
dynamic approach using risk aversion signals; an alternative benchmark for mutual
funds, a fuzzy approach to estimate performance measures, a symbolic data
approach to compare fund rating systems and various risk management aspects of
investment funds linked to risk performance indicators.
74
4thResearch
AUTHOR-Sohelighosh
TITLE-Mutual Funds in India : A Popular Investment Avenue
Year-2015
1. Language: English
2. Length: 110 pages
3. Publisher: Notion Press
Abstract
In light of recent financial crises, the role of investment funds is a recurring

subject for discussion. In the past, crises used to be limited to singular markets or
specific asset classes. In today's crises, many different asset classes are affected
simultaneously and globally. Given this new context, our traditional methods must
be adapted with the overall objective to strengthen the scientific knowledge of
investment funds. The aim of this book is to provide new insights, ideas and
empirical evidence that will improve tools and methods at our disposal for fund
performance analysis. This book proposes a number of topics that are current of
interest: two portfolio optimization models with a multi-fractal approach and a
dynamic approach using risk aversion signals; an alternative benchmark for mutual
funds, a fuzzy approach to estimate performance measures, a symbolic data
approach to compare fund rating systems and various risk management aspects of
investment funds linked to risk performance indicators.
75
CHAPTER 5
DATA PRESENTATION, ANALYSIS &

INTERPRETATION
76
Q.1 Awareness among respondents about Mutual funds
Table No.5.1
Response Respondent Percentage

Yes 40 80%
No 10 20%
TOTAL 50 100%
Source-Primary data Source- Questionnaire
Graph No.5.1
AWARENESS OF RESPONDENTS
90%
80%
80%
70%
60%
50%
40% Series1
30%
20%
20%
10%
0%
Yes No
Analysis –
In table no. 5.1.mostly80 % people know about mutual and only 20% peopleare not aware
about mutual funds.because of lack of proper knowledge
Inference –
It is showing that maximum people are aware about mutual fund .
77
Q2 Priority of respondents for investment in mutual funds?
Table No.5.2

Yes 35 70%
No 15 30%
TOTAL 50 100%
Source-Primary data Source - Questionnaire
Graph No.5.2
PRIORITY OF RESPONDENTS
30%
Yes
No
70%
Analysis –
In table no. 5.2 70 % people did invest in mutual fund t and rest 30% people did not invest in
mutual fund.because the don’t trust mutual funds and FDs are more popular in INDIA
Inference –
It is show that maximum people invested in mutual fund but still mutual funds needs more
investors
78
Q3 Liking of respondents to invest in mutual fund
Table No.5.3

Yes 39 78%
No 11 22%
TOTAL 50 100%
Source-Primary data Source - Questionnaire
Graph No.5.3
LIKING OF RESPONDENTS
22%
Yes
No
78%
Analysis –
In table no. 5.3,78 % people like to invest in mutual fundand 22% people do not like to invest
in mutual fund.Because people give less preference to risky investments
Inference –
It is show that good number of people like to invest in mutual fund but 22% still do not trust
mutual funds
79
Q4 Priority factors considered for investment by respondents
Table No.5.4

Mutual fund 8 16%
Insurance 12 24%
Share market 5 10%
Bank FDs 15 30%
Other investment 10 20%
TOTAL 50 100%
Graph No.5.4
PRIORITY FACTORS
16%
20%
mutual fund
insurance
share market
24% bankFDs
other investment
30%
10%
Analysis –
In table no. 5.430% people like to invest in bank FDs .24% people not like to invest
ininsurance., 10% invest in share market,16% in mutual funds and 10% in other investments
Because bank FDs are most reliable and risk free investment
Inference –
It is shows that maximum people give preference to invest in bank FDs.
80
Q5 Opinion of respondents for choosing option of mutual fund funds for
investment
Table No.5.5

Yes 36 72%
No 14 28%
TOTAL 50 100%
Graph No.5.5
CHOOSING OPTION
28%
Yes
No
72%
Analysis –
In table no. 5.5 78% peoples think investing in mutual fund is the best option 22% peoples do
not think so Because there is no surety of profit
Inference –
It is shows that a good number of people consider mutual fund a best option
81
Q6 Mutual Fund A Risk Free Investment
Table No.5.6

Yes 35 70%
No 15 30%
TOTAL 50 100%
Graph No.5.6 MUTUAL FUND A RISK FREE INVESTMENT
30%
Yes
No
70%
Analysis –
In table no. 5.1.6 70% peoplesaid mutual fund is a risk free investment and 30% peoplesaid
mutual fund is not risk free investment .because it has a risk of loss and many people have faced it.
Inference –
It is shows that maximum people are not aware about the risk in investing in mutual funds
82
Q7Investments of respondents
Table No.5.7

Share market 7 14%
Postal department 12 24%
Mutual fund 10 20%
PPF 11 22%
Other investment 10 20%
TOTAL 50 100%
Graph No.5.7
INVESTMENTS OF RESPONDENT
14%
20%
share capital
postal department
mutual fund
24%
PPF
22%
other investment
20%
Analysis –
In table no. 5.7 14%people invested in share market,24% in postal department,20% in mutual
funds,22% in PPFs, and 20% in other investments because people trust postal department more
than mutual funds
Inference –
It is shows that maximum number of people have invested their money in PPFs
83
Q 8 Intention behind making investment by respondents
Table No.5. 8

Life concerned 20 40%
As a saving 10 20%
Long term Investment 15 30%
Other 5 10%
TOTAL 50 100%
Graph No.5.8
INTENTION BEHIND MAKING INVESTMENT
10%
40% life concerned

as a saving
30%
as a investment
other
20%
Analysis –
In table no. 5.8 40 % people gave response of life concerned. 30%peoplegave response as a
investments only..20% say it’s a saving and 10% othersBecause saving money for future life is
important
Inference –
It is show that maximum people think investment is a way of ensuring a better life in the future
84
Q 9 Priority of respondent in the investment of HDFCmutual funds
Table No.5.9

Equity fund 30 60%
Debt fund 6 12%
ETF fund 14 28%
TOTAL 50 100%
Graph No.5.1.9
TYPE OF INVESTMENT IN KOTAK MAHINDRA
28%
equity fund
debt fund
ETF
60%
12%
Analysis –
In table no. 5.1.60 % peoples interested In equity fund.28% peoples interested in ETF fund.
And only 6% people are interested in debt fundsBecause equity funds give more profit.
Inference –
It is shows that maximum people are interested in equity fund
85
Q 10Mutual Fund investment is better option than other investments
Table No.5.10

Yes 32 64%
No 18 36%
TOTAL 50 100%
Graph No.5.10
IS MUTUAL FUND A BETTER OPTION
36%
Yes
No
64%
Analysis –
In table no. 5.1064% people said mutual fund better than other investment .36%people said
mutual fund is not better than other investment .because some people had profit and some had
loss in investing in mutual fund
Inference –
It is shows that maximum peoples find mutual fund is better than other investment .
86
CHAPTER 6
CONCLUSION AND SUGGESTION
87
6.1 FINDINGS
1-Equity funds are having both high risk and high return
2-Pure equity funds are volatile in nature
3-Growth equity funds are giving good return
4-Mid cap equity funds are also giving good return
5-Though equity funds have risk they are still giving better return and are the
preference of the mutual fund holders
6-The select focus scheme has been performing in the top of equity funds
88
6.2 CONCLUSION
1) While constructing Financial Plan, Mutual Fund Investment in portfolio will help
combating inflation related problems.
2) In all investment alternatives only Mutual Funds and Equity Shares are giving
more than 10% growth in assets,
3) Kotak is not going aggressively for any fund, so the returns in short term are not
really good but the fund has given good returns in long term.
.
4) The biggest source of AMC income is generally from the entry & exit load which
they charge from investors, at the time of purchase
5) Some mutual funds don’t perform well in the market, as their management is
not dynamic enough to explore the available opportunity in the market,
89
6.3SUGGESTIONS & RECOMMENDATION
1-Investor should have good assets allocations in his portfolio, right investment product
should be there in right proportion. The portfolio management of the investor should be
precise one, to make an investment with minimum possible risk
2-Investors should have to check portfolio frequently or investor can rebalance the
Investments in portfolio
3-The Mutual Fund industry need create awareness among investors about the risk
involved in the investment and surety of return to make the investment a financial
viability
4- Frequently fund progress report should be provided to the investors to know the
whereabouts of the investments(status).
5-Training programs are important for giving the information to the Costumers, Such as
Seminars, inductions, investor meet etc.for the orientation of the prespective of the
investor
6-HDFCmutual fund should launch a fund with an aggressive fund objective to gain more
profit
90
ANNEXURE/APPENDICES
I) QUESTIONNAIRE
1) Are you aware about Mutual Funds ?
2) Did you ever Invest in Mutual Fund?
3) Would you like to Invest In Mutual Funds ?
4) To which Investment will you give more Preference?
5) Is Mutual Fund Investment the best option ?
6) Do you think Mutual Fund Is A Risk Free Investment?
7) Which Types Of Investment have you already Invested in ?
8) What is your point of view About Investment?
9)In which Kotak Mutual Fund would you like to Invest?
10) Is Mutual Fund a better wealth generator than other investment ?
91
BIBLIOGRAPHY
WWW.GOOGLE.COM
WWW.ASSETMANEGEMENTKOTAK.COM
WWW.KOTAKMAHINDRABANK.COM
Books
Indian mutual funds handbook by sundar sankaran
92

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SUMMER INTERNSHIP PROJECT REPORT

MASTER OF BUSINESS ADMINISTRATION

INSTITUTE OF MANAGEMENT, RESEARCH & TECHNOLOGY

I MR. PUJARI ARTHANTAR ANUPvisited in “HDFC MUTUAL FUND” for

Date : Name : MR PUJARI ARTHANTAR ANUP

This is to certify that Mr/Ms____________________________________

IMRT,Nashik-2 Name and sign of Guide

Place: Nashik. Sign :

Chapter No. List of graphs and Page No.

The preparation of the project on a certain topic enables a professional student-

2-To know performance of equity schemes of HDFC mutual funds

5- To understand the cause of choosing an equity scheme of HDFC mutual funds

1. I got exposure to the Investment sector and real organizational environment.

1. It will help organization to know their Opportunities & Threats

Utility for Customer:-

2- There was limited time span

3- The study is limited only to Nashik city

It includes surveys and fact-finding enquiries of different kind. The main

Analytical research has to use facts or information already available and

Applied research aims at finishing solution for an immediate problem facing a

It is mainly concerned with generalization and with the formulation of a

It is based on the measurement of quantity or amount. It is application to

It is concerned with qualitative phenomenon that is phenomenon relating to or

Conceptual research is that related to some abstract ideas or theory.

Empirical research relies on experience or observation alone, often without due

WHAT TYPE IN RESEARCH IS MY SUMMER INTERNSHIP PROJECT

 What is each and how is it done?

 Non-probability Sampling: Why don’t we use non-probability sampling schemes?

 Simple Random Sampling: A simple random sample (SRS) of size n is produced by

(ii) Through personal interview:

(iv) By mailing of questionnaires:

(v) Through schedules:

a) Types of Research Analytical

c) Sampling unit kotak22mahindra mutual fund

Mutual funds are an under tapped market in India

Mutual fund distribution in India

Average Assets under Management

To positively contribute towards economic, environmental and social well-being of

Create a lasting value for communities by:

No. of schemes including options 116

Short term debt Schemes 8

Equity & Debt 3

COMPETITORS OF KOTAK MUTUAL FUND

1) ICICI Mutual Fund

2) Reliance Mutual Fund

3) UTI Mutual Fun

4) Birla Sun Life Mutual Fund

5) SBI Mutual Fund

6) KOTAK MAHINDRA Mutual Fund

1985 HDB Finance Limited commences bill discounting business

1991 Launches investment banking business

1992 Enters the funds syndication business

Commenced joint venture with Goldman Sachs Group Inc.

1998 Launches mutual fund through HDFCAsset Management Company (KMAMC).

STRUCTURE OF HDFCMUTUAL FUND

Types of Mutual Funds

These are all the part of organization of HDFC mutual funds

Quarterly AAUM ` 732.59 cr

Fund managers- Mr Harish Krishnan

Launch Date - 29 Dec 1998

Benchmark - CNX Nifty

Entry load- Nil