project report on HDFC mutual funds
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Transcript of project report on HDFC mutual funds
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Introduction
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INTRODUCTION TO PROJECT
An investment means employment of funds on assets (i.e. securities or mutual
funds or any of the investment avenues) with the aim of earning of income as well
as capital appreciation. There are mainly two attributes while investing to any ofthe means, i.e. time and risk. There are mainly four objectives, which the
investments activities will carry on those are:
Return Risk Liquidity Safety
There are many alternatives which investment avenues are open to the investors to
suit their needs and nature .The selection of investment alternatives are depends upon the required level of return and the risk tolerance level. These alternatives range
from financial securities to traditional non-securities investment.
Following are the various investment alternatives.
Negotiable and fixed income securities
Equity shares Preference share Debentures Bonds Government securities
Non-negotiable securities
Bank deposit Post office deposit NBFC deposit Tax saving schemes Public provident fund scheme National saving scheme Life insurance Mutual funds Real estate Securities
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Companies raise funds to finance their projects through various methods. The
promoters can bring their own money or barrow from the financial institutions or
Mobilizes capital by issuing securities. The funds `may be raised through issue of
fresh share at per or premium. Preference shares debenture or global depository
Receipts. These are mainly two markets which any company can raise their funds;those are primary market and secondary market .the companies raise funds for the
following purposes:
To promote a new company To expand an existing company To diversify the production To meet the regular working capital requirement To capitalize the reserves.
New Issue Market (Primary Market)
Stock available for the first time is offered through new issue market. The issuer
may be a new company or an existing company. These issues may be of new type
or the secure used in the past. In the new market the issuer can be consider as a
manufacturers. The issuing house, investing banker and broker act as the channel
of distributing for new issue. They take the responsibility of selling the stock to the
public.The main survives function of the primary market are:
1. Origination2. Underwriting3. Distribution
The main objectives of NSE are as follows.
To establish the nationwide trading facility for Equities, Debt instrumentsand hybrids.
To ensure equal access to investors all over the country through appropriatecommunication network.
To enable shorter settlement cycle and book entry settlement system.
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Mutual Funds
A mutual fund is a type of professionally managed collective investment vehicle
that pools money from many investors to purchase securities. While there is no
legal definition of the term "mutual fund", it is most commonly applied only to
those collective investment vehicles that are regulated and sold to the generalpublic. They are sometimes referred to as "investment companies" or "registered
investment companies." Most mutual funds are "open-ended," meaning investors
can buy or sell shares of the fund at any time. Hedge funds are not considered a
type of mutual fund.
Mutual Fund Operation Flow Chart
Types of Mutual Funds
There are 3 principal types of mutual funds in the United States: open-end funds,
unit investment trusts (UITs); and closed-end funds.
Open-end funds
Open-end mutual funds must be willing to buy back their shares from their
investors at the end of every business day at the net asset value computed that day.
Most open-end funds also sell shares to the public every business day; these shares
are also priced at net asset value. A professional investment manager oversees the
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portfolio, buying and selling securities as appropriate. The total investment in the
fund will vary based on share purchases, share redemptions and fluctuation in
market valuation. There is no legal limit on the number of shares that can be
issued.
Open-end funds are the most common type of mutual fund. At the end of 2011,there were 7,581 open-end mutual funds in the United States with combined assets
of $11.6 trillion.
Closed-end funds
Closed-end funds generally issue shares to the public only once, when they are
created through an initial public offering. Their shares are then listed for trading on
a stock exchange. Investors who no longer wish to invest in the fund cannot sell
their shares back to the fund (as they can with an open-end fund). Instead, they
must sell their shares to another investor in the market; the price they receive maybe significantly different from net asset value. It may be at a "premium" to net
asset value (meaning that it is higher than net asset value) or, more commonly, at a
"discount" to net asset value (meaning that it is lower than net asset value). A
professional investment manager oversees the portfolio, buying and selling
securities as appropriate.
At the end of 2011, there were 634 closed-end funds in the United States with
combined assets of $239 billion.
Unit investment trusts
Unit investment trusts or UITs issue shares to the public only once, when they are
created. UITs generally have a limited life span, established at creation. Investors
can redeem shares directly with the fund at any time (as with an open-end fund) or
wait to redeem upon termination of the trust. Less commonly, they can sell their
shares in the open market.
Unit investment trusts do not have a professional investment manager. Their
portfolio of securities is established at the creation of the UIT and does not change.
At the end of 2011, there were 6,022 UITs in the United States with combined
assets of $60 billion.
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Investments and classification
Mutual funds are normally classified by their principal investments, as described in
the prospectus and investment objective. The four main categories of funds are:
money market funds bond or fixed income funds, stock or equity funds Hybrid funds.
Money market funds
Money market funds invest in money market instruments, which are fixed income
securities with a very short time to maturity and high credit quality. Investors often
use money market funds as a substitute for bank savings accounts, though moneymarket funds are not government insured, unlike bank savings accounts.
Money market funds strive to maintain a $1.00 per share net asset value, meaning
that investors earn interest income from the fund but do not experience capital
gains or losses. If a fund fails to maintain that $1.00 per share because its securities
have declined in value, it is said to "break the buck". Only two money market
funds have ever broken the buck: Community Banker's U.S. Government Money
Market Fund in 1994 and the Reserve Primary Fund in 2008.
At the end of 2011, money market funds accounted for 23% of open-end fundassets.
Bond funds
Bond funds invest in fixed income or debt securities. Bond funds can be sub
classified according to the specific types of bonds owned (such as high-yield or
junk bonds, investment-grade corporate bonds, government bonds or municipal
bonds) or by the maturity of the bonds held (short-, intermediate- or long-term).
Bond funds may invest in primarily U.S. securities (domestic or U.S. funds), in
both U.S. and foreign securities (global or world funds), or primarily foreign
securities (international funds).
At the end of 2011, bond funds accounted for 25% of open-end fund assets.
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Stock or equity funds
Stock or equity funds invest in common stocks which represent an ownership share
(or equity) in corporations. Stock funds may invest in primarily U.S. securities
(domestic or U.S. funds), in both U.S. and foreign securities (global or worldFunds), or primarily foreign securities (international funds). They may focus on a
specific industry or sector. A stock fund may be sub classified along two
dimensions: (1) market capitalization and (2) investment style (i.e., growth vs.
blend/core vs. value). The two dimensions are often displayed in a grid known as a
"style box."
Hybrid funds
Hybrid funds invest in both bonds and stocks or in convertible securities. Balanced
funds, asset allocation funds, target date or target risk funds and lifecycle or
lifestyle funds are all types of hybrid funds. Hybrid funds may be structured as
funds of funds, meaning that they invest by buying shares in other mutual funds
that invest in securities. Most fund of funds invest in affiliated funds (meaning
mutual funds managed by the same fund sponsor), although some invest in
unaffiliated funds (meaning those managed by other fund sponsors) or in a
combination of the two. At the end of 2011, hybrid funds accounted for 7% of the
assets in all U.S. mutual funds
Advantages of Mutual Funds
Increased diversification Daily liquidity Professional investment management Ability to participate in investments that may be available only to larger
investors
Service and convenience Government oversight
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Disadvantages
Fees Less control over timing of recognition of gains Less predictable income No opportunity to customize
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I ntroduction to
Bank
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PROFILE
India is a developing country and we all know that banking sector plays a very
important role. In development with the increasing use of banking and finance in
every field, new trends in their technology and modern use are being evolved day
to day to meet the requirements. In fact BANKING has become the need of
today.
The purpose of PROJECT REPORT is to expose the students in the market and in
the field of banking, finance and investments and to develop the ability in the
students to deal with all types of customers.
Preparing project report in the summer vacations and undergoing the summer
training is the indispensable part of the college period. It provides the opportunityto review what we have gained in the training period and also provides the way to
convey the knowledge and ideas to others.
The present project provides the information on the HDFC BANK.
Learning is not possible in solitude and has to have the support and able guidance
of some people around us in various roles and capacities. The satisfaction and
euphoria that accompanies the successful completion of any task would be
incomplete without the mention of the people who made it possible becausesuccess is the epitome of hard work, undeterred missionary zeal, fast
determination, and consideration.
Therefore, we consider it a pleasant duty to express our heartiest appreciation,
gratitude, and indebtedness to our project guide Mr. Nitish Dipankar for his keen
interest, sincere extortion, invaluable and pain taking excellent guidance,
continuous calm endurance, inspiration and encouragement during each phase of
the present project.
HDFC BANK
The Housing Development Finance Corporation Limited (HDFC) was amongst the
first to receive an "in principle" approval from the Reserve Bank of India (RBI) to
set up a bank in the private sector, as part of RBI"s liberalization of the Indian
Banking Industry in 1994. The bank was incorporated in August 1994 in the name
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of "HDFC Bank Limited", with its registered office in Mumbai, India. HDFC Bank
commenced operations as a Scheduled Commercial Bank in January 1995.
History
HDFC is India's premier housing finance company and enjoys an impeccable trackrecord in India as well as in international markets. Since its inception in 1977, the
Corporation has maintained a consistent and healthy growth in its operations to
remain the market leader in mortgages. Its outstanding loan portfolio covers well
over a million dwelling units. HDFC has developed significant expertise in retail
mortgage loans to different market segments and also has a large corporate client
base for its housing related credit facilities. With its experience in the financial
markets, strong market reputation, large shareholder base and unique consumer
franchise, HDFC was ideally positioned to promote a bank in the Indianenvironment.
MANAGEMENT (DIRECTORS)
Vision
To evolve and position the bank as a world class progressive, cost effective and
customer friendly institution providing comprehensive financial and related
services; integrating frontiers of technology and serving various segments of
society especially the weaker sections; committed to excellence in serving the
public and also excelling in corporate values
Mr. C M Vasudev Mr. Aditya Puri Mr. Keki Mistry Mrs. Renu Karnad Dr. Pandit Palande Mr. Partho Datta Mr. Bobby Parikh Mr. A. N. Roy Mr. Vijay Merchant Mr. Paresh Sukthankar
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Mission
Our business mission emphasizes the following:
o Increase our market share in Indias expanding banking and financialservices industry by following a disciplined growth strategy focusing
on quality and not on quantity and delivering high quality customerservice.
o Leverage our technology platform and open scale able systems todeliver more products to more customers and to control operating
costs.
o Maintain our current high standards for asset quality throughdisciplined credit risk management.
o Develop innovative products and services that attract our targetedcustomers and address inefficiencies in the Indian financial sector.
o Continue to develop products and services that reduce our cost offunds.
o Focus on high earnings growth with low volatility.Values
The values that drive us underscore our commitment to:
Customer FocusedBe someone who places customers and their needs at the forefront whiledeveloping and managing their financial solutions.
Mutual RespectBuild mutual respect by being an equal partner, who knows and willingly
shares, helping people go further, rather than walking ahead and leading them, or
walking behind and following.
Worthy of TrustBuild trust by choosing the right path, rather than the easy path and tell the
truth the way it is. Be someone who keeps promises, meets commitments and
behaves with integrity at all times.
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WinningBe positive and confident; seize every moment, every day, with a winning
perspective, fearlessly facing the uncertainties of life.
Products & Services
Deposits Savings Account
Recurring Deposit
Fixed Deposits
Current Accounts
Loans Priority Sector Loans
Housing Loan
Home Enhancement Loans
Personal Loan
Education Loan
Car Loans
Business Loans
Other Services RI Services
Gold Card Schemes
RBI Citizens' Charter including cash and deposits
Locker FacilitiesRTGS
EFT
HDFC e-funds Transfer
Tax Payment
E-bill Payments
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Deposit Accounts
You may open different type of accounts with us such as, savings accounts, term
deposits, and current accounts including 'No Frills' Account etc with us. You may
open such accounts in the following styles)
i. Singleii. Joint
iii. Joint (Either or Survivor)iv. Joint (Former or Survivor)v. Joint (Latter or Survivor)
vi. Or in any other styleThe above may be opened by you with or without nomination facility. We will
explain the implications of the foregoing accounts as also the nomination facilities
at the time of opening of the account.We will also inform you about liquid deposit facility, sweep account and similar
types of products offered by us and their implications and procedures involved, at
the time of opening of account.
'No Frills' Account
We will make available a basic banking 'No Frills' Account either with 'nil' or
very low minimum balances. The charges applicable for various services/ products
in such an account will be indicated in a separate Tariff Schedule. The nature and
number of transactions in such accounts may be restricted, which will be madeknown to you at the time of opening of the account in a transparent manner.
Special Accounts
We will make our best efforts to make it easy and convenient for our special
customers like senior citizens, physically challenged persons and illiterate persons
to bank with us. This will include making convenient policies, products and
services for such applicants and customers.
We will inform the procedure for opening of the account and other terms and
conditions to blind /other physically challenged persons provided he/she calls on
the Bank personally along with a witness who is known to both such person and
the bank.
Normally no cheque book facility is provided to illiterate persons and blind
persons. However, to meet periodic repayment of retail loans, utility bills etc. we
will consider issuing of cheque book with safeguards to protect your interest.
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Dormant/ Inoperative Accounts
We will
a. tell you when you open your account, what period of inoperation of theaccount would render your account being classified as dormant/ inoperative
account. You will also be informed three months before your account is
classified as dormant, inoperative or treated as unclaimed account and the
consequences including the charges for reactivation thereof as per the Tariff
Schedule;
b. tell you the procedure to be followed if you want to activate the account .Closing Your Account
Under normal circumstances, we will not close your account without giving you atleast 30 days notice. Examples of circumstances, which are not 'normal', include
improper conduct of account etc. In all such cases, you will be required to make
alternate arrangements for cheques already issued by you and desist from issuing
any fresh cheques on such account.
Clearing Cycle / Collection Services
We will
a. tell you about the clearing cycle for local instruments and the outstationinstruments including details such as when you can withdraw money after
lodging collection instruments and when you will be entitled to earn delayed
interest as per our Cheque Collection Policy.
b.provide details, if we offer immediate credit for outstation cheques,including the applicable terms and conditions, such as the limit up to which
instruments tendered by you can be credited, operating accounts
satisfactorily, etc.
c.proceed as per our cheque collection policy and provide all assistance foryou to obtain a duplicate cheque/instrument in case a cheque instrument
tendered by you is lost in transit
d. give the above information when you open your account and whenever youask us. If there is any change in our policy, the revised policy will be
displayed on our website and at all our branches.
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Cash Transactions
We will accept cheques/ cash and dispense cash at counters wherever your account
is maintained. We will exchange soiled/mutilated notes and/ or small coins at such
of our branches as per RBI Directives.
For transactions above a specified amount we may require you to furnish yourPAN Number.
Safe Deposit Lockers
We will give you the complete details of the rules and the procedures applicable
for the safe deposit lockers and also safe deposit of valuables, in case we offer the
service.
Foreign Exchange Services
a. When you buy or sell foreign exchange, we will give you information on theservices, details of the exchange rate and other charges which apply toforeign exchange transactions. If this is not possible, we will tell you how
these will be worked out.
b. If you want to transfer money abroad, we will tell you how to do this andwill give you:
i. A description of the services and how to use them;ii. Details of when the money you have sent abroad should get there and
the reasons for delays, if any.
iii. The exchange rate applied when converting to the foreign currency (ifthis is not possible at the time of the transaction, we will let you know
later what the rate is);
iv. Details of any commission or charges, which you will have to pay anda warning that the person receiving the money may also, have to pay
the foreign bank's charges.
v. We will tell you if the information provided by you for making apayment abroad is adequate or not. In case of any discrepancies or
incomplete documentation, we will advise you immediately and assist
you to rectify/complete the same.
vi. If money is transferred to your bank account from abroad, we will tellyou the original amount received and charges if any levied. If the
sender has agreed to pay all charges, we will not take any charges
when we pay the money into your account.
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vii. We will guide you about regulatory requirements or conditionsrelating to foreign exchange services offered by us as and when
requested by you.
viii. In case of delay beyond the day when the amount is due for credit,you will be compensated (a) for any loss on account of interest for due
period beyond the due date and (b) also for adverse movement of
forex rate as per the compensation policy of the bank.
ix. All certificates required to be issued under regulatory/statutoryinstructions will be issued free of charge.
Product and Services
(1)Regular Savings Account
A savings account designed to meet your day to day banking needs while giving
you 24X7 accesses to your bank. Basic feature of the account shall be as under:-
Features
Access a wide network of branches and ATMs across the country to meet allyour banking needs.
Free Net Banking (on request) for convenient banking. Use National Electronic Funds Transfer (NEFT) to transfer funds from your
HDFC Bank account to any account in another Bank at locations specified
by the RBI.
Enjoy Free IVR based Phone Banking (Agent assisted calls will becharged*).
Get free quarterly account statements. Access your account with your free ATM Card. Enjoy free cash and cheque deposits at branches and ATMs. Get free cash withdrawals at any bank's ATM with your Debit Card*.
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Minimum Balance in AccountMinimum Balance Rs. 10,000 (Metro / Urban Branches)
Rs. 5000 (Semi Urban/ Rural Branches)
Premium Salary Account
A customized salary account for select corporate, backed by priority service.
Special offers and benefits such as a free zero balance account for you and your
family. This account comes with free Personal Accidental Death Cover of Rs 5 lac.
Features
Zero Balance Savings Account Free Personal Accidental Death Cover of Rs. 5 lakhs* Free Titanium Debit Card with ATM cash withdrawal limit of Rs. 50,000/-
per day and shopping limit of Rs. 75,000/- per day
Free access to other bank ATMs in India 5 free cash withdrawal and
balance enquiry transactions per month
Free payable at par chequebookOne per quarter Free add-on International Debit Card Free Zero Balance Salary Family Account for your family members with
same benefits as your salary account
Regular Current Account
Ideal low cost account for businesses that operate in one city. With free access to
one of the most advanced and secure Net Banking and Mobile Banking services.
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Features
Get convenient inter-city banking and free cheque payments anywhere. Free Collections of funds through RTGS and NEFT Free Payments through NEFT. Nominal charges for RTGS payments Transfer funds across cities between HDFC Bank accounts at a nominal
charge of Rs.15 per transactions
Issue free Demand Drafts (DD) / Pay Order for values above Rs.100,000.For Demand Drafts up to Rs.50,000 a charge of Rs.40, Demand Drafts
above Rs.50,000 and below Rs.100,000 a charge of Rs.25 will be levied.
Get a payable-at-par cheque book at a nominal price.Regular Fixed Deposit
You no longer need to choose between great rates and safety for your Fixed
Deposit.
How does it work?
Easy investment with High Returns Great rates, flexibility and security - in one offering Higher rate of interest on Fixed Deposit for Senior Citizen Convenience of booking deposit through Net Banking
Loans & Cards
Credit Cards Personal Loan Business Loans Home Loan Car Loans Two Wheeler Loans
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Loans Against Assets Educational Loan Debit Cards
Investments & Insurance
Life Insurance Motor Insurance Travel Insurance Home Insurance Wealth Services Investment Products
Online Services & Tools
Credit Card Eligibility Check Recharge your Mobile Track your application status - Card, Loan Online Tax payment Religious Offerings
ATM facility
All the eligible HDFC-Central card holders will be issued HDFC BANK Credit
Card free of issuance fee for the first year of issuance, subject to ICICI Banks
eligibility criteria for issuance of credit card.
EFT
EFT System has been introduced by RBI at selected centers for faster andeconomical remittance of funds (inter bank/ intra bank). It facilitates quick
movement of money from the bank account of one customer to the bank account of
another customer. In this system the sender and the receiver of funds may be
located in different cities and may even bank with different Bank.
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Benefits:
- There is no upper Limit of amount being transferred
- Funds are transferred within 24 hours
- Frauds in processing paper instruments are avoided
- RBI-EFT has inbuilt security measures- Beneficiary need not to go to the Bank. Amount is credited to his bank account
directly.
SWOT ANALYSIS
The various strengths, weakness, opportunity and threats of the HDFC BANK. unit
are as fallow: -
Strengths high profitability and revenue skilled workforce experienced business units monetary assistance provided existing distribution and sales networks domestic market
Weaknesses
tax structureOpportunities
growth rates and profitability income level is at a constant increase new products and services
Threats
growing competition and lower profitability increase in labor costs
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LITERATURE REVIEW
Arzu Tektas et al (2005) states that An efficient asset-liability management
requires maximizing banks' profit as well as controlling and lowering various risks.
This multi-objective decision problem aims to reach goals such as maximization of
liquidity, revenue, capital adequacy, and market share subject to financial, legal
requirements and institutional policies. This paper models asset and liability
management (ALM) in order to show how different managerial strategies affect the
financial wellbeing of banks during crisis.
Brent Finlay states that avoiding the top 7 business financing mistakes is a key
component in business survival. The key is to understand the causes and
significance of each so that the company is in a position to make better decisions.
No Monthly Bookkeeping No Projected Cash Flow Inadequate Working Capital Poor Payment Management Poor Credit Management No Recorded Profitability No Financing Strategy
Harris (2005) from the perspective of the chief financial officer, the concept of
working capital management is relatively straightforward: to ensure that theorganization is able to fund the difference between short-term assets and short-term
liabilities. In practice, though, working capital management has become the
Achilles' heel of scores of finance organizations, with many CFOs struggling to
identify core working capital drivers and the appropriate level of working capital.
As a result, companies can be limited in their ability to weather unforeseen or
adverse events andensure that cash is readily available where it is needed,
regardless of the circumstances. By Understanding the role and drivers of workingcapital management and taking steps to reach the 20 "right" levels of working
capital, companies can minimize risk, effectively prepare for uncertainty and
improve overall performance.
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Maynard E. Rafuse (1996) Argues that attempts to improve working capital by
delaying payment to creditors is counter-productive to individuals and to the
economy as a whole. He claims that altering debtor and creditor levels for
individual tiers within a value system will rarely produce any net benefit. Proposesthat stock reduction generates system-wide financial improvements and other
important benefits. Urges those organizations seeking concentrated working capital
reduction strategies to focus on stock management strategies based on lean
supply-chain techniques.
M.K. Kolay (1997) writes the article which analyses the pros and cons ofdifferent strategies to be adopted to manage and avoid working capital crisis
situations in any organization. The working capital position depends on many
organizational parameters which are interrelated and interdependent, and also vary
over time. In such a situation, the use of a system dynamics approach has been
advocated to reflect the relevant dynamic cause-and-effect relationships for the
development of appropriate long-term and short-term strategies.
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Objectives of
the study
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OBJECTIVES OF THE STUDY
Objectives are the ends that states specifically how goal be achieved. Every study
must have an objective for which all the efforts have been done. Without objective
no research can be conducted and no result can be obtained. On the basis of
objective all the research process is followed. Objectives are the main aspect of
every study. The objective of the study gives direction to go through the research
problem. It guides the researcher and keeps him on track.
I have two objectives regarding my research project. These are shown below :-
1. Primary objective
2. Secondary objective
1. Primary objective:-
1) To study the Investment options in HDFC.2) To analyze the Mutual Funds of HDFC by Comparative Analysis.
2. Secondary objective:-
1) To find out the shortcomings in HDFC.
2) To see whether HDFC is going well or not in different areas
3) To inform the management about the financial condition of HDFC.
4) To inform the investor, enabling them to take the investment decision.
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LIMITATION OF THE STUDY
Every study has some limitations. Inspire of the hurdles, the training period was a
good time for learning experience but there were certain limitations that every
researcher has to face during the research period. I too had to face certain suchlimitations:
Shortage of time: Period of six weeks is not sufficient to even study thebasic routine activities of the organization
Lack of expertise, being a fresher Difficulty in analyzing data, being a fresher. Lack of attention, support from the executives of the concerned
organization.
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Research Methodology
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RESEARCH METHODOLOGY
Research is defined as a scientific & systematic search for pertinent information
on a specific topic. Research is an art of scientific investigation. Research is a
systemized effort to gain new knowledge. It is a careful inquiry especially through
search for new facts in any branch of knowledge. The search for knowledge
through objective and systematic method of finding solution to a problem is a
research.
Problem Statement
The research problems, in general refers to some difficulty with a researcher
experience in the contest of either a particular a theoretical situation and want to
obtain a salutation for same. The present project has been undertaken to do the
Analysis of Mutual Funds at HDFC Bank..Research Design
A research is the arrangement of the conditions for the collections and analysis of
the data in a manner that aims to combine relevance to the research purpose with
economy in procedure. In fact, the research is design is the conceptual structure
within which research is conducted; it constitutes the blue print of the collection,
measurement and analysis of the data. As search the design includes an outline of
what the researcher will do from writing the hypothesis and its operational
implication to the final analysis of data. The design is such studies must be rigidand not flexible and most focus attention on the following;
What is the study about? Why is the study being made? Where will the study be carried out? What type of data is required? Where can be required data be found? What period of time will the study include? What will be sample design? What techniques of data collection will be used? How will the data be analyzed?
Research Design can be categorized as: Exploratory Research Descriptive Research
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Diagnostic Research Experimental Research
The present study is descriptive in nature, as it studies only the existing financial
statement and no change is carried out. Research design is flexible enough to
provide opportunity for considering different aspects of problem under study. Ithelps in bringing into focus some inherent weakness in enterprise regarding which
in depth study can be conducted by management.
Research is an art of scientific investigation. It is basically a careful investigation
for search of new facts in any branch of knowledge.
Research Design: A research design is the arrangement of conditions forcollection and analysis of data in manner that aims to combine relevance to
the research purpose with economy in procedure. It is a framework, which
determines the course of action towards the collection and analysis ofrequired data. It may be described as the conceptual structure with in which
the research is conducted. I have adopted descriptive research as well as
exploratory design for analysis of data.
Time Schedule: The collection of data was last five years.As HDFC Bank. is a very big Organization and it is very difficult to study
the whole system in just few 6- 8weeks so as according to my limitation I
divided the whole topic into small different modules and decided to studyeach of them separately, so that the in depth knowledge is covered under this
report. For this I prepared the following time schedule for myself describe
on the next page:
Data Collection : Data Collection can be broadly classified into twocategories:
Primary Data : Primary Data are those collected a fresh and for first timeand thus happen to be original in character important primary data are:
i. Observation Methodii. Interview Method
Secondary Data : Secondary Data are those which have already beencollected and which have already been passed through the statistical
process, secondary data can be collected from :
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Books Annual Reports of the Bank Journals & Magazines Websites
I have used secondary data which is including last two years accounts to conduct
the study.
STEPS OF METHODOLOGY
1. COLLECTION OF DATA
This is the first step in the process. It forms foundation of the whole data.
Source : Individuals
Communication Method : Banks published financial statements.
Objectives : Maximizing Relevant Information2. ORGANISING THE DATA
The data collected during data collection process are organized and presented in a
comprehensible sequence to make them more meaningful.
3. PRESENTATION
After the data has been properly organized, it is ready for presentation. There are
different modes of presentation like tables, charts etc. The main objectives of
presentation are to put collected data into an easy readable form.
4. ANALYSIS OF DATA
After organizing and presenting the data, the researcher then has to proceed
towards conclusion by logical inferences. The raw data is then analyzed:
* By bringing raw data to measured data.
* Summarizing the data.
Presentation of Data
Collection of Data
Organizing the Data
Interpretation
Analysis of Data
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5. INTERPRETATION
Interpretation means to bring out meaning of data or to convert mere data into
information. From the analysis of data the various conclusions are find out on the
basis of logical inferences.
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Analysis &
Interpretation
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MEANING OF Mutual Fund
Mutual fund is a mechanism for pooling the resources by issuing units to the
investors and investing funds in securities in accordance with objectives as
disclosed in offer document.
Investments in securities are spread across a wide cross-section of industries and
sectors and thus the risk is reduced. Diversification reduces the risk because all
stocks may not move in the same direction in the same proportion at the same time.
Mutual fund issues units to the investors in accordance with quantum of money
invested by them. Investors of mutual funds are known as unit holders.
The profits or losses are shared by the investors in proportion to their investments.
The mutual funds normally come out with a number of schemes with different
investment objectives which are launched from time to time. A mutual fund isrequired to be registered with Securities and Exchange Board of India (SEBI)
which regulates securities markets before it can collect funds from the public.
About HDFC Mutual Fund
HDFC Mutual Fund is one of the largest mutual funds incorporated onDecember 10, 1999.
Presently, HDFC Mutual Fund is managing: 28 Open-Ended Schemes 8 Close-Ended Schemes
Description of products or funds
HDFC Growth fund (HGF)
Investment objective To generate long term capital appreciation from a
portfolio that is invested predominantly in equityand equity related instrument
Asset allocation pattern
of scheme
Types of instrument Normal allocation
1. Equity and equity related
instrument.
(%net assets)
80-100
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2. Debt securities, money
market instrument and cash
(including CBLO/reverse
repo.)
0-20
Plans and option Plans: none option: growth *dividend-payout
-reinvest
Minimum application
amt.
Purchase Additional purchase
Rs 5000/- Rs 1000/-
Systematic investment
plan(SIP)
Please refer page no.22 for details of (SIP)
Systematic withdrawal
plan(SWP)
Please refer page no.22 for details of (SWP)
Name of the fund
manager
Mr. Srinivas Rao Ravari
HDFC Top 200 funds (HT 200)
Investment
objective
To generate long term capital appreciation from a
portfolio of equity and equity linked instrument
primarily drawn from the companies in BSE 200
Index
Asset allocation
pattern of scheme
Types of
instrument
Normal allocation
1. Equity & equity
linked instrument.
(%of net assets)
Up to 100%(including use of
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2. # Debt and
money instruments.
#Investment in
securitized debt. If
undertaken wouldnot exceed 20%of
the net assets of the
scheme.
derivatives for hedging &
permitted by prevailing by
SEBI regulation)
Plans & options Plans- Nil optionGrowth & Dividend
- Payout- reinvest
Minimum
application amt.
Purchase Additional purchase
Rs 5000/- Rs 1000/-Systematic
investment
plan(SIP)
Please refer page no.22 for details of (SIP)
Systematic
withdrawal
plan(SWP)
Please refer page no.22 for details of (SWP)
Name of the fund
manager
Mr. Prashant Jain
Role of SEBI in mutual funds
Unit Trust of India was the first mutual fund set up in India in the year 1963. In
early 1990s, Government allowed public sector banks and institutions to set upmutual funds.
In the year 1992, Securities and exchange Board of India (SEBI) Act was passed.
The objectives of SEBI areto protect the interest of investors in securities and to
promote the development of and to regulate the securities market. As far as mutual
funds are concerned, SEBI formulates policies and regulates the mutual funds to
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protect the interest of the investors. SEBI notified regulations for the mutual funds
in 1993. Thereafter, mutual funds sponsored by private sector entities were allowed
to enter the capital market. The regulations were fully revised in 1996 and have
been amended thereafter from time to time. SEBI has also issued guidelines to the
mutual funds from time to time to protect the interests of investors.All mutual funds whether promoted by public sector or private sector entities
including those promoted by foreign entities are governed by the same set of
Regulations. There is no distinction in regulatory requirements for these mutual
funds and all are subject to monitoring and inspections by SEBI. The risks
associated with the schemes launched by the mutual funds sponsored by these
entities are of similar type.
Major Mutual Fund Companies in India
Prudential Mutual Fund UTI Mutual Fund Reliance Mutual Fund HDFC Mutual Fund Franklin Mutual Fund Birla sun Mutual Fund SBI Mutual Fund DSP Merrill Lynch Mutual Fund Kotak Mutual Fund Tata Mutual Fund HSBC Mutual Fund PRINCIPAL Mutual Fund Standard chartered Mutual Fund LIC Mutual Fund Sundaram Mutual Fund Deutsche Mutual Fund Fidelity Mutual Fund ABN AMRO Mutual Fund ING Vysya Mutual Fund Canbank Mutual Fund
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JM Mutual Fund Chola Mutual Fund Benchmark Mutual Fund BOB Mutual Fund Taurus Mutual Fund Sahara Mutual Fund Escorts Mutual Fund Quantum Mutual Fund
Mutual Fund Structure
The structure consists of :
Sponsor
Sponsor is the person who acting alone or in combination with another body
corporate establishes a mutual fund. Sponsor must contribute at least 40% of the
net worth of the Investment Managed and meet the eligibility criteria prescribed
under the Securities and Exchange Board of India (Mutual Funds) Regulations,
1996.The Sponsor is not responsible or liable for any loss or shortfall resulting
from the operation of the Schemes beyond the initial contribution made by it
towards setting up of the Mutual Fund.
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Trust
The Mutual Fund is constituted as a trust in accordance with the provisions of the
Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered under the
Indian Registration Act, 1908
Trustee
Trustee is usually a company (corporate body) or a Board of Trustees (body of
individuals). The main responsibility of the Trustee is to safeguard the interest of
the unit holders and inter alia ensure that the AMC functions in the interest of
investors and in accordance with the Securities and Exchange Board of India
(Mutual Funds) Regulations, 1996, the provisions of the Trust Deed and the Offer
Documents of the respective Schemes. Atleast 2/3rd directors of the Trustee are
independent directors who are not associated with the Sponsor in any manner.
Asset Management Company (AMC)
The AMC is appointed by the Trustee as the Investment Manager of the Mutual
Fund. The AMC is required to be approved by the Securities and Exchange Board
of India(SEBI) to act as an asset management company of the Mutual Fund. At
least 50% of the directors of the AMC are independent directors who are not
associated with the Sponsor in any manner. The AMC must have a net worth of at
least 10 corers at all times.
Registrar and Transfer Agent
The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer
Agent to the Mutual Fund. The Registrar processes the application form,
redemption requests and dispatches account statements to the unit holders. The
Registrar and Transfer agent also handles communications with investors and
updates investor records
The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer
Agent to the Mutual Fund. The Registrar processes the application form,
redemption requests and dispatches account statements to the unit holders. The
Registrar and Transfer agent also handles communications with investors and
updates investor records.
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RISK
The Risk-Return Trade-off
The most important relationship to understand is the risk-return trade-off. Higher
the risk greater the returns/loss and lower the risk lesser the returns/loss. Hence it is
upto you, the investor to decide how much risk you are willing to take. In order to
do this you must first be aware of the different types of risks involved with your
investment decision
Market Risk
Sometimes prices and yields of all securities rise and fall. Broad outside influences
affecting the market in general lead to this. This is true, may it be big corporations
or smaller mid-sized companies. This is known as Market Risk. A Systematic
Investment Plan (SIP) that works on the concept of Rupee Cost Averaging
(RCA)might help mitigate this risk.
Credit Risk
The debt servicing ability (may it be interest payments or repayment of principal)
of a company through its cash flows determines the Credit Risk faced by you. This
credit risk is measured by independent rating agencies like CRISIL who rate
companies and their paper. A AAA rating is considered the safest whereas a D
rating is considered poor credit quality. A well-diversified portfolio might help
mitigate this risk.
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Inflation Risk
Things you hear people talk about:
Rs. 100 today is worth more than Rs. 100 tomorrow.
Remember the time when a bus ride coated 50 paise?
Mehangai Ka Jamana Hai.The root cause, Inflation. Inflation is the loss of purchasing power over time. A lot
of times people make conservative investment decisions to protect their capital but
end up with a sum of money that can buy less than what the principal could at the
time of the investment. This happens when inflation grows faster than the return on
your investment.
Interest Rate Risk
In a free market economy interest rates are difficult if not impossible to predict.
Changes in interest rates affect the prices of bonds as well as equities. If interest
rates rise the prices of bonds fall and vice versa. Equity might be negatively
affected as well in a rising interest rate environment. A well-diversified portfolio
might help mitigate this risk.
Political/Government Policy Risk
Changes in government policy and political decision can change the investment
environment. They can create a favorable environment for investment or vice
versa.
Liquidity Risk
Liquidity risk arises when it becomes difficult to sell the securities that one has
purchased. Liquidity Risk can be partly mitigated by diversification, staggering of
maturities as well as internal risk controls that lean towards purchase of liquid
securities.
Choice of Schemes
Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.
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Well Regulated
All Mutual Funds are registered with SEBI and they function within the provisions
of strict regulations designed to protect the interests of investors. The operations of
Mutual Funds are regularly monitored by SEBI.Drawbacks of Mutual Funds
No Guarantees: No investment is risk free. If the entire stock marketdeclines 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 theirday-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 sellanywhere 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 youreceive, even if you reinvest the money you made.
Management Risk: When you invest in a mutual fund, you depend on thefund'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.
Rights of a Mutual Fund Unit holder
A unit holder in a Mutual Fund scheme governed by the SEBI (Mutual
Funds) Regulations is entitled to:
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1. Receive unit certificates or statements of accounts confirming the title within6 weeks from the date of closure of the subscription or within 6 weeks from
the date of request for a unit certificate is received by the Mutual Fund.
2. Receive information about the investment policies, investment objectives,financial position and general affairs of the scheme.
3. Receive dividend within 42 days of their declaration and receive theredemption or repurchase proceeds within 10 days from the date of
redemption or repurchase.
4. Vote in accordance with the Regulations to:-a. Approve or disapprove any change in the fundamental investment policies of
the scheme, which are likely to modify the scheme or affect the interest of
the unit holder. The dissenting unit holder has a right to redeem the
investment.b. Change the Asset Management Company.c. Wind up the schemes.
Profile of HDFC Mutual Fund
HDFC Asset Management Company Ltd (AMC) was incorporated under the
Companies Act, 1956, on December 10, 1999, and was approved to act as an Asset
Management Company for the HDFC Mutual Fund by SEBI vide its letter dated
June 30, 2000.The registered office of the AMC is situated at Ramon House, 3rdFloor, H.T. Parekh Marg, 169, Back bay Reclamation, Church gate, Mumbai - 400
020.
In terms of the Investment Management Agreement, the Trustee has appointed the
AMC to manage the Mutual Fund.
As per the terms of the Investment Management Agreement, the AMC will
conduct the operations of the Mutual Fund and manage assets of the schemes,
including the schemes launched from time to time.
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The present shareholding pattern of the AMC is as follows
The Board of Directors of the HDFC Asset Management Company Limited
(AMC) Mr. Deepak S Parekh Mr. N. Keith Skeoch Mr Mark Connolly Mr. Hoshang S. Billimoria Mr. Humayun Dhanrajgir Mr. P. M. Thampi Dr. Deepak Phatak Mr Rajeshwar Raj Bajaaj Ms. Renu S. Karnad Mr. Milind Barve
The AMC is managing 3 close ended schemes
HDFC Fixed Investment Plan HDFC Long Term Equity Fund and HDFC Fixed Maturity Plans
Particulars Percentage of Paid up Capital
HDFC Ltd. 50.10
Standard Life InsuranceLtd.
49.90
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22 open-ended schemes of the Mutual Fund
HDFC Growth Fund (HGF) HDFC Balanced Fund (HBF) HDFC Income Fund (HIF) HDFC Liquid Fund (HLF) HDFC Long Term Advantage Fund (formerly HDFC Tax Plan 2000)(HTP) HDFC Children's Gift Fund (HDFC CGF) HDFC Gilt Fund (HGILT) HDFC Short Term Plan (HSTP) HDFC Index Fund HDFC Floating Rate Income Fund (HFRIF) HDFC Equity Fund (HEF) HDFC Top 200 Fund (HT200) HDFC Capital Builder Fund (HCBF) HDFC TaxSaver (HTS) HDFC Prudence Fund (HPF) HDFC High Interest Fund (HHIF) HDFC Cash Management Fund (HCMF) HDFC MF Monthly Income Plan (HMIP) HDFC Core & Satellite Fund (HCSF) HDFC Multiple Yield Fund (HMYF) HDFC Premier Multi-Cap Fund. (HPM)
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Techniques Used for Analysis
1) Return2)
Risk
3) Sharpe index4) Treynors IndexReturn
Return on a typical investment consists of two components. The basic is the
periodic cash receipts (or income) on the investment, either in the form of
interest or dividends. The second component is the change in the price of the
assets-commonly called the capital gain or loss. This element of return is the
difference between the purchase price and the price at which the assets can be
or is sold; therefore, it can be again or a loss.
The return has been calculated as under
NAVtNAVt-1
Portfolio return: Rit = ---------------------------------
NAV t-1
Where Rit is the difference between Net Asset Values for two consecutive daysdivided by the NAV of the preceding day.
M.indtM.indt-1
Market return: Rmt = --------------------------------
M.indt-1
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Where Rmt is the difference between market indices oftwo consecutive daysdividend by the market index for the preceding day.
Risk
Risk is neither good nor bad. Risk in holding securities is generally associatedwith the possibility that realized returns will be less than expected returns. Thedifference between the required rate of returns on mutual fund investment and therisk free return is the risk premium. Risk can be measured in terms of Beta &standard deviations.
Standard deviationIt is used to measure the variation in individual returns from the average expectedreturns over a certain period. Standard deviation is used in the concept of risk of a
portfolio of investments. Higher standard deviation means a greater fluctuation inexpected return.
Standard deviation (SD) = \/ var
Where Var = variance
Var = i-E(r))2
BetaBeta measures the systematic risk and shows how prices of securities respond tothe market forces. It is calculated by relating the return on a security with return forthe market. By convention, market will have beta 1.0.Mutual fund is said to bevolatile, more volatile or less volatile. If beta is grater than 1 the stock is said to beriskier than market. If beta is less than 1,the indication is that stock is less risky incomparison to market. If beta is zero then the risk is the same as that of the market.
Negative beta is rare.
= nxy-(x)( y)nx2-(x) 2
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Where,
n= number of days
X =rolling returns of the NSE index
Y= rolling returns of the schemes
Sharpe index
Sharpe index measures risk premium of a portfolio, relative to the total amount of
risk in the portfolio. Sharpe index summarizes the risk and return of a portfolio in a
single measure that categorizes the performance of funds on the risk- adjusted
basis. The larger the Sharpes index the portfolio over performs the market and
vise versa.
Where,
St = Sharpes index
Rp= portfolio return
Rf= Risk free rate of return (7.59%)
SD= Standard Deviation of the port folio
St= RP-Rf
Treynors Index
Treynors model is on the concept of the characteristics straight line. The
characteristics line has drawn a relationship between the market return and a
specific portfolio without taking into consideration any direct adjustment for risk.
It is also known as reward to volatility ratio and is defined as:
The formula for Treynors Index is:
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Portfolio avg return (Rp)risk-free rate of interest
(Rf)Treynor index (Tn) = -------------------------------------------------------------------
-- Beta coefficient of portfolio (Bp)
RpRf
Tn = -------------------------
Bp
It measures portfolio risk in terms of beta, which is weighted average of individual
security beta. The ratio is investors, for who the fund represents only a fraction of
their total assets. The higher the ratio better is the performance.
Sharpe
Sharpes index measures the risk premium of the portfolio relative to the total amt
of risk in the portfolio. This risk premium is the difference between the portfolios
average rate of return and the risk less rate of return. The index assigns the highest
values to assets that have best risk-adjusted average rate of returns.
Name of Scheme DOI 5 yrs Avg.
Return Rp)
Rf SD St
Relaince Growthfund(G)
199.52 60.54 8.00 23.55 2.23
Relaince VisionFund(G)
137.65 57.89 8.00 15.43 3.23
Pru ICICI DynamicPlan(G)
47.3746 55.65 8.00 30.51 1.56
HDFC Long TermAdvantage
74.137 52.81 8.00 15.64 0.59
HDFC Tax Saverfund(G)
115.193 51.05 8.00 30.59 1.41
Pru ICICI Tax Plan(G) 73.12 50.79 8.00 32.69 1.31
HDFC Equity Fund(G) 113.822 46.99 8.00 11.70 3.33
HDFC Top 200 Fund 85.834 45.22 8.00 11.70 2.68
Pru ICICI Power 61.74 42.73 8.00 14.81 2.34
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Where st=Sharpes index
Rp=portfolio return
Rf=Risk free rate of return (8.00%)
SD= standard deviation of the port folio
St= RP-Rf
SD
Treynors Index
In Treynors higher the ratio higher the performance.
Tn =Treynors index
Rp=portfolio return
Rf=Risk free rate of return (7.59%)
Formula
Tn= RP-Rf
Beta
Name of Scheme DOI Rp Rf Beta TnReliance Growth Fund (G) 199.52 60.54 8 0.91 57.73
Reliance Vision Fund (G) 137.65 57.89 8 0.98 50.91
Pru ICICI Dynamic Plan (G) 47.3746 55.65 8 0.99 48.13
HDFC Long TermAdvantage Fund (G)
74.137 52.81 8 0.75 59.75
HDFC Tax Saver (G) 115.193 51.05 8 0.93 46.29
Pru ICICI Tax Plan (G) 73.12 50.79 8 1 42.79
HDFC Equity Fund (G) 113.822 46.99 8 0.94 43.32
HDFC Top 200 fund 85.834 45.22 8 0.96 38.77
Pru ICICI power 61.74 42.73 8 0.97 35.8
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Performance Evaluation Tables
Ranking on the basis of Sharpes
Name of Scheme (DOI) Rp Beta SD Sharpe
s
Treynor'
s
Reliance Growth Fund(G)
199.52 60.54 0.91 23.55 2.23 57.73
Reliance Vision Fund (G) 137.65 57.89 0.98 15.43 3.23 50.91
Pru ICICI Dynamic Plan(G)
47.3746
55.65 0.99 30.51 1.56 48.13
HDFC Long TermAdvantage Fund (G)
74.137 52.81 0.75 15.64 0.59 59.75
HDFC Tax Saver (G) 115.193
51.05 0.93 30.59 1.41 46.29
Pru ICICI Tax Plan (G) 73.12 50.79 1 32.69 1.31 42.79HDFC Equity Fund (G) 113.82
246.99 0.94 11.7 3.33 43.32
HDFC Top 200 fund 85.834 45.22 0.96 13.88 2.68 38.77
Pru ICICI power 61.71 42.73 0.97 14.81 2.34 35.8
Name of the scheme DOI Rp Sharpes RanksHDFC equity fund 113.822 46.99 3.33 1
Reliance vision fund 137.65 57.89 3.23 2
HDFC top 200 fund 85.834 45.22 2.68 3
Pru ICICI power 61.74 42.73 2.34 4
Reliance growth fund 199.52 60.54 2.23 5
Pru ICICI Dynamicfund
47.37 55.65 1.56 6
HDFC tax saver fund 115.193 51.05 1.41 7
Pru ICICI tax plan 73.12 50.79 1.31 8HDFC long ternadvantage fund
74.134 52.81 0.59 9
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Interpretation
In this chart blue colour indicate to the Rank of Mutual Funds and Red colour
shows the Sharpes Ratios of industries. Here HDFC Equity Funds has the First
Rank and after that Reliance vision fund, HDFC top 200 fund, Pru ICICI power
and others.
Ranking on the basis of Treynors
1 23 4
5 67 8
9
1 2 3 4 5 6 7 8 9
0
10
20
30
40
50
60
70
RANK
Treynors RATIO
Name of Scheme DOI Rp Treynors Ranks
Hdfc long ternadvantage fund
74.134 51.81 60.29 1
Reliance growth fund 199.52 60.54 58.18 2
Reliance vision fund 137.65 57.89 57.33 3
Pru ICICI dyanamicfund
47.3746 55.65 51.33 4
Hdfc tax saver fund 115.193 51.05 48.55 5
Hdfc equity fund 113.822 46.99 46.73 6
Pru icici tax plan 73.12 50.79 43.2 7
Hdfc top 200 fund 85.834 45.22 41.91 8
Pru ICICI power 61.74 42.73 38.61 9
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INTERPRETATION
In this chart blue colour indicate to the Rank of Mutual Funds and Red colour
shows the Treynors Ratios of industries. Here HDFC Long Term Advantage
Funds has the First Rank and after that Reliance Growth fund, Reliance vision
fund, Pru ICICI power and others.
1 23 4
5 67 8
9
1 2 3 4 5 6 7 8 9
0
10
20
30
40
50
60
70
RANK
Treynors RATIO
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Findings
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FINDINGS
To work on this project I have find out some of the points where Bank managers
should think. And by which they can increase customer base as well as they can
give better service to the customers. They are as follows.
HDFC mutual are providing 28 open ended schemes and 8 close endedschemes.
Services of HDFC are much better then the mutual fund like systematicinvestment plan(SIP).
HDFC mutual fund are providing both type of plan like regular andinstitutional plan in most of the product or fund.
In HDFC mutual fund systematic withdrawal plan(SWP)are very easy andalso easily available.
In these funds or schemes HDFC are not providing both type of plan to thepublic they are providing wholesale or retail plan only in few schemes.
HDFC are providing systematic investment plan(SIP)or systematicwithdrawal plan(SWP) only quarterly.
Minimum application amount Rs5000 for HDFC Saving A/C for semi urbanand Rs10,000 for Urban Peoples.
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Suggestions
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SUGGESTIONS
1. In regards to its Mutual funds of the Bank should be profitable for the investors.
2. The Bank should also put emphasis on its Competitors mutual funds industries.
3. The Bank should try to generate internal funds while calculating proprietary
ratio.
4. The Bank should review its investments in current assets and long term assets.
5. The Bank should have optimum capital mix so that the cost of capital should be
decreased.
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Conclusion
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CONCLUSION
Mutual Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed portfolio at a
relatively low cost. The small savings of all the investors are put together toincrease the buying power and hire a professional manager to invest and monitor
the money. Anybody with an investible surplus of as little as a few thousand rupees
can invest in Mutual Funds. Each Mutual Fund scheme has a defined investment
objective and strategy.
HDFC Mutual Fund is one of the largest mutual funds incorporated on December
10, 1999. Presently, HDFC Mutual Fund is managing 28 Open-Ended Schemes
and 8 Close-Ended Schemes.
HDFC Asset Management Company Ltd (AMC) was incorporated under theCompanies Act, 1956, on December 10, 1999, and was approved to act as an Asset
Management Company for the HDFC Mutual Fund by SEBI vide its letter dated
June 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 the
AMC to manage the Mutual Fund.
As per the terms of the Investment Management Agreement, the AMC will
conduct the operations of the Mutual Fund and manage assets of the schemes,
including the schemes launched from time to time.
The Bank should also put emphasis on its Competitors mutual funds industries.
The Bank should review its investments in current assets and long term assets.
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Bibliography
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BIBLIOGRAPHY
Books referred
security analysis & portfolio managementBy Punithavathy pandian.
Pandey I,.M., Financial Management, New Delhi, Vikas Publishing House Pvt.
Ltd.,
9th Ed. Khan M.Y., Jain P.K., Financial Management Text Problems and Cases
New Delhi, Tata Mc
GrawHill Publishing Co. Ltd. 4th ED.
Gupta Shashi,K, Sharma .R.K Management Accounting Principles and Practises
New Delhi, Kalyani Publishers 9th ED.
Kothari C.R., Research Methodology Methods and Techniques Wishwa
Prakashan, New Delhi, 2001.Bhalla V.K., Working Capital Management: Text and Cases, Anmol Publications
Pvt. Ltd.,
Gupta S.K., Accounting for managerial decisions, 7th edition, Kalyani
Publishers, New Delhi, 2005 P.No. (10.1-10.5).
Pandey I..M., Financial Management, Vikas Publishing House, New Delhi, 2004,
p-246-250.
Mittal R.K., Management accounting and financial management, New Delhi, V.K.
Publications, 2007, p51-70.Kothari C.R., Quantitative Techniques, Vikas publishing house Pvt. Ltd. New
Delhi, 2006, p- 168- 174.
Khan M.Y, Jain P.K, Management Accounting, 5th edition, Tata McGraw Hill
Publishing Ltd., New Delhi, 2004, P.No.60-95
Chandra Prasanna , Financial Management- Theory and Practice, Tata McGraw
Hill Publishing Co. Ltd. , Delhi, 2005, p-297.
Kothari C.R., Quantitative Techniques1 ,Pg10-20, I have taken knowledge
about research design ,sample design & sampling. In this I got what type of sample
can be choosen and more about sample design
Khan M.Y, Jain P.K Management Accounting2,Pg 67 , Ratios and there
formulations.
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Bruch Lev, Financial Statement Analysis-A new approach3,p-11,2006, How
ratio can be analysed and about the interpretation of these ratios.
Gupta S.P., Business Statistics4, Pg 378-418 From here I found the
information regarding correlation , trend and statistical tools.
Goel D.K. Management Accounting and Financial Management5,Pg 78 In thisI found the different types of ratios and there formulas and about thumb rule and
all basic concept.
Pandey , I.M Financial Management6 Pg-143-145 How to prepare
comparative balance sheet and how can we evaluate.
Maheshwari ,S.N , Advanced Accounting7 pg b40-b48, It explains ratio analysis
as a tool to analyze the financial statements of organization. Different ratios depict
the position of firm in market.
Mittal R.K , Management Accounting& Financial Management8
pg 28-30 fromthis I have how to prepare comparative balance sheet and how to interpret it
Jain T.R. , Statistics for MBA9 Pg part C 135-138, Information about the
calculation of chi square test.
Berry G.C., Marketing Research10 pg15 Some theoretical knowledge about the
type of data.
S.C Gupta, Fundamentals of Statistics11 pg112, From here I found the
definitions that are the base for the statistical tools.
Hooda R.P. Statistics for Business and Economics12 pg209-212 Calculation of
trend analysis and its interpretation.
Horne James.c.Van, Fundamental of Financial Management13 pg125-130 From
this I got how to analyse the financial condition
Chandra Prasanna , Fundamental of Financial Management14, pg103-108 this
book help me to analyse the balance sheet , how can we say that the firm is going
well or not.
Cooper R.Donald , Business Research Methods17
, pg176-180 all about
sampling design, its meaning
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Web sites
WWW.DSPBLACK.COM WWW.HDFC.COM WIKIPEDIA www.hdfcmutualfund.com www.amfi.com www.myirish.com www.indiainfoline.com www.google.com www.yahoo.com www.rediff.com
http://www.dspblack.com/http://www.hdfc.com/http://www.hdfc.com/http://www.hdfcmutualfund.com/http://www.amfi.com/http://www.myirish.com/http://www.indiainfoline.com/http://www.google.com/http://www.rediff.com/http://www.rediff.com/http://www.google.com/http://www.indiainfoline.com/http://www.myirish.com/http://www.amfi.com/http://www.hdfcmutualfund.com/http://www.hdfc.com/http://www.dspblack.com/ -
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Annex: Glossary
These definitions explain the meaning of words and terms used in the Code. They
are not precise legal or technical definitions.
ATM
An automated teller machine [ATM] is a machine in which a customer can use
their card along with PIN to get cash, information and other services.
Banking Ombudsman
An independent dispute resolution authority set up by the Reserve Bank to deal
with disputes that individuals and small business have with their banks.Card
A general term for any plastic card, which a customer may use to pay for goods
and services or to withdraw cash. In this Code, it includes debit, credit, or ATM
cards.
Credit Card
A Credit Card is a plastic card with a credit facility, which allows you to pay for
goods and services or to withdraw cash
Cheque Collection Policy
Cheque Collection Policy refers to the policy followed by a bank in respect of the
various local cheques and outstation instruments deposited with the bank for credit
to an account . The policy interalia deals with
cheque purchase requeststime frame for credit of cheques
payment of interest in case of delay in collection of cheques instant credit of local and outstation cheques cheques instruments lost in transit and charges for such collection
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Customer
A person who has an account [including a joint account with another person or an
account held as an executor or trustee or as a Karta of an HUF, but not including
the accounts of sole traders/ proprietorships , partnerships, companies, clubs and
societies] or who avails of other products/ services from a bank.
Current Account
A form of demand deposit wherefrom withdrawals are allowed any number of
times depending upon the balance in the account or up to a particular agreed
amount.
Deceased Account
A Deceased account is a deposit account in which case either the single account
holder has deceased or in case of joint accounts one or more of joint account
holders has/have deceased
Demat Account
A Demat account refers to dematerialized account and is an account in which the
stocks of investors are held in electronic form.
Deposit Accounts:
"Savings deposits" means a form of demand deposit which is subject torestrictions as to the number of withdrawals as also the amounts of
withdrawals permitted by the Bank during any specified period;
"Term deposit" means a deposit received by the Bank for a fixed periodwithdraw able only after the expiry of the fixed period and includes deposits
such as Recurring / Double Benefit Deposits / Short Deposits / Fixed
Deposits /Monthly Income Certificate /Quarterly Income Certificate etc.
"Notice Deposit" means term deposit for specific period but withdraw ableon giving at least one complete banking day's notice;
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Dormant / Inoperative Account
A dormant/inoperative account is a savings bank or current account which is not
operated upon for a period specified by the bank.
Equity
Equity means a part of capital of a corporate entity which is represented by the
shares of the company whether in physical or in dematerialized form
Electronic Clearing System
The Electronic Clearing System (ECS) is an online transmission system which
permits the electronic transmission of payment information by the banks / branches
to the Automated Clearing House (ACH) via a communication network.
Guarantee
A promise given by a person
Government Bond
Government bond means a security, created and issued, by the Government for
the purpose of raising a public loan.
Mail
A letter in a physical or electronic form
Mutual fund
Mutual fund is a mechanism for pooling the resources by issuing units to the
investors and investing funds in securities in accordance with objectives as
disclosed in offer document.
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