MENTORING REPORT ONCOMPARATIVE STUDY OF HDFC & ICICI MUTUAL FUND IN INDIASubmitted in the Partial Fulfillment for the Requirement of Post Graduate Diploma in Management(PGDM)

SUBMITTED TO: SUBMITTED BY: JUNAID RAZA MR. RAVI ROLL NO: 54 DR. GARIMA SACHDEVA PGDM- II (A)

Jagannath International Management SchoolKalkaji, New Delhi CERTIFICATEI JUNAID RAZA hereby declare that this Project Report entitled submitted by me to the Jagannath International Management School, kalkaji, NewDelhi, is a bonafide work undertaken by me and it is not submitted to any other university or Institution for the award of any degree diploma/certificate or published any time before.

__________________ Signature of the student

CONTENTS

SNO.TOPICSPAGE NO

1INTRODUCTION7-25

2COMPANY PROFILE26-43

3RESEARCH AND METHODOLOGY44-47

4ANALYSIS AND FINDINGS48-60

5CONCLUSION AND RECOMMENDATIONS61-63

6APPENDICES64-65

ACKNOWLEDGEMENT

This project COMPARATIVE STUDY OF HDFC & ICICI MUTUAL FUND IN INDIAis a result of co-operation, hard work and good wishes of many people. I would like to thank our project guide external mentor (Mr RAVI) for her involvement in the project work and timely assessment that provided me inspiration and valued guidance through out my study.I am highly indebted to our internal mentor (DR GARIMA SACHDEVA), and Director of JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL KALKAJI, for giving us an opportunity to do a project.

I would like to express gratitude towards my parents, teachers of . JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL KALKAJI , the library staff and college friends whose co-operation, encouragement and efforts have helped me in giving the final shape and structure to the project.

My thanks and appreciations also go to my college mates and to all those people who have willingly helped me out with their abilities.

ABSTRACT

If size is the measure of dominance, then the Indian mutual fund industry can now boast on that. With the total Asset Under Management (AUM)increasing from Rs.1,01,565 Crores in Jan 2000 to Rs.8,82,410.82 Crores by DECEMBER 2013, according to the Association of Mutual Funds in India (AMFI), the industrys growth has been nothing but exceptional. It has indeed come a long way from being a single player, single scheme (US-64) industry to having 34 players and more than 480 schemes. What has driven the growth? Numbers of factors have contributed to the surge in the industrys growth. First and foremost, a buoyant domestic economy coupled with a booming stock market has been one of the major drivers of the growth in recent times particularly in the last five-year. Another significant factor facilitating this growth has been a conducive regulatory regime, thanks to increased effort by SEBI to improve market surveillance and protect investors interests. Further, incentives, such as making dividend tax free in the hands of investors have also provided strong impetus to the growth.This research covers various aspect of mutual funds industry in India.Starting with basic concept of mutual fund and its advantages it would give detail about the growth of mutual fund industry in India, its present scenario. It also throws some light on major mutual fund companies in India, the different types of mutual funds on the basis of structure, investment, load and schemes and also it covers the different phases of growth of mutual fund industry. Then it covers the calculation of NAV, the various investmentplans, factors that help in calculating the mutual fund performance.In the end mutual fund analysis have been done on the basis of Standard Deviation, Beta, Alpha, R Squared, Treynor Ratio & Sharpe Ratio on various schemes like Equity based Funds, Debt based Funds, Monthly Income Plans,Cash Funds & ELSS Tax Saver Schemes.

CHAPTER- I

INTRODUCTION

MUTUAL FUND

WHAT ARE MUTUAL FUNDS?Mutual Fund is an investment company that pools money from shareholders and invests in a variety of securities, such as stocks, bonds and money market instruments. Most open-end mutual funds stand ready to buy back (redeem) its shares at their current net asset value, which depends on the total market value of the fund's investment portfolio at the time of redemption. Most open-end mutual funds continuously offer new shares to investors. Also known as an open-end investment company, to differentiate it from a closed-end investment company. Mutual funds invest pooled cash of many investors to meet the fund's stated investment objective. Mutual funds stand ready to sell and redeem their shares at any time at the fund's current net asset value: total fund assets divided by shares outstanding. In Simple Words, 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. In India, A mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public. In Short, a mutual fund is a common pool of money in to which investors with common investment objective place their contributions that are to be invested in accordance with the stated investment objective of the scheme. The investment manager would invest the money collected from the investor in to assets that are defined/ permitted by the stated objective of the scheme. For example, an equity fund would invest equity and equity related instruments and a debt fund would invest in bonds, debentures, gilts etc. 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.

MUTUAL FUND CONCEPTA Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow chart below describes broadly the working of a mutual fund:

HISTORYIn the Beginning Historians are uncertain of the origins of investment funds; some cite theclosed-end investment companieslaunched inthe Netherlands in 1822 by King William I as the first mutual funds, while others point to a Dutch merchant named Adriaan van Ketwich whose investment trust created in 1774 may have given the king the idea. Ketwich probably theorized that diversification would increase the appeal of investments to smaller investors with minimal capital. The name of Ketwich's fund,Eendragt Maakt Magt, translates to "unity creates strength". The next wave of near-mutual funds included an investment trust launched inSwitzerlandin 1849, followed by similar vehicles created inScotlandin the 1880s.The idea of pooling resources and spreading risk using closed-end investments soon took root inGreat BritainandFrance, making its way to theUnited Statesin the 1890s. The Boston Personal Property Trust, formed in 1893, was the firstclosed-end fundin theU.S.The creation of the Alexander Fund in Philadelphia in 1907 was an important step in the evolution toward what we know as the modern mutual fund. The Alexander Fund featured semi-annual issues and allowed investors to make withdrawals on demand.

The Arrival of the Modern FundThe creation of the Massachusetts Investors' Trust inBoston,Massachusetts, heralded the arrival of the modern mutual fund in 1924. The fund went public in 1928, eventually spawning the mutual fund firm known today as MFS Investment Management. State Street Investors' Trust was the custodian of the Massachusetts Investors' Trust. Later, State Street Investors started its own fund in 1924 with Richard Paine, Richard Saltonstall and Paul Cabot at the helm. Saltonstall was also affiliated with Scudder, Stevens and Clark, an outfit that would launch the firstno-load fundin 1928. A momentous year in the history of the mutual fund, 1928 also saw the launch of the Wellington Fund, which was the first mutual fund to include stocks and bonds, as opposed to direct merchant bank style of investments in business and trade.

Regulation and ExpansionBy 1929, there were 19open-ended mutual fundscompeting with nearly 700 closed-end funds. With the stock market crash of 1929, the dynamic began to change as highly-leveraged closed-end funds were wiped out and small open-end funds managed to survive.More than 50% of retirement age individuals to not have enough savingsGovernment regulators also began to take notice of the fledgling mutual fund industry. The creation of the Securities and Exchange Commission (SEC), the passage of theSecurities Act of 1933and the enactment of theSecurities Exchange Act of 1934put in place safeguards to protect investors: mutual funds were required to register with the SEC and to provide disclosure in the form of a prospectus. TheInvestment Company Act of 1940put in place additional regulations that required more disclosures and sought to minimize conflicts of interest. (For further reading, seePolicing The Securities Market: An Overview Of The SEC.)

The mutual fund industry continued to expand. At the beginning of the 1950s, the number of open-end funds topped 100. In 1954, the financial markets overcame their 1929 peak, and the mutual fund industry began to grow in earnest, adding some 50 new funds over the course of the decade. The 1960s saw the rise ofaggressive growth funds, with more than 100 new funds established and billions of dollars in new asset inflows.Hundreds of new funds were launched throughout the 1960s until the bear market of 1969 cooled the public appetite for mutual funds. Money flowed out of mutual funds as quickly as investors could redeem their shares, but the industry's growth later resumed.Recent Developments In 1971, William Fouse and John McQuown of Wells Fargo Bank established the firstindex fund, a concept that John Bogle would use as a foundation on which to build The Vanguard Group, a mutual fund powerhouse renowned for low-cost index funds. The 1970s also saw the rise of theno-loadfund. This new way of doing business had an enormous impact on the way mutual funds were sold and would make a major contribution to the industry's success.With the 1980s and '90s came bull market mania and previously obscure fund managers became superstars; Max Heine, Michael Price andPeter Lynch, the mutual fund industry's top gunslingers, became household names and money poured into the retail investment industry at a stunning pace. More recently, the burst of the tech bubble and a spate of scandals involving big names in the industry took much of the shine off of the industry's reputation. Shady dealings at major fund companies demonstrated that mutual funds aren't always benign investments managed by folks who have their shareholders' best interests in mind.

ConclusionDespite the 2003 mutual fund scandals and the global financial crisis of 2008-2009,the story of the mutual fund is far from over. In fact, the industry is still growing. In the U.S. alone there are more than 10,000 mutual funds, and if one accounts for all share classes of similar funds, fund holdings are measured in the trillions of dollars. Despite the launch of separate accounts,exchange-traded fundsand other competing products, the mutual fund industry remains healthy and fund ownership continues to grow.

Indian Scenario of Mutual Fund

The origin of mutual fund industry in India is with the introduction of the concept of by UTI in the year 1963. Through the growth was slow, but it accelerated from the year 1987 when non-UTI players entered in industry. The mutual fund industry goes through four phases:- First phase 1964-87 (Establishment of UTI). Second phase 1987-93 (Entry of public sector funds). Third phase 1993-2003 (Entry of a private sector funds). Fourth phase since feb.2003 (Bifurcated of UTI). In the first phase, UTI was established in 1963 by an act of parliament. In 1978 it was delinked from RBI & the IDBI took over the control of UTI. In second phase, SBI entered as first non-UTI mutual fund provider then it was followed by can bank (Dec. 87). PNB (Aug 89) & LIC in 1989. In third phase, the private sector entered in it. The Erstwhile Kothari pioneer (now merged with Franklin Templeton) was first registered in July 1993 in mutual fund. In revised registration of SEBI I n 1993 the industry functions under SEBI. And the fourth phase had bitter experience for UTI. It was bifurcated into two separate entities. One is the specified under taking of UTI with AUM of 29,835cr. The second is UTI mutual fund ltd. Sponsored by SBI, PNB, BOB and LIC& it is registered with SEBI.

DEFINITIONThe securities & Exchange Board of India (mutual funds) regulations, 1993 defines a mutual fund as a fund established in the form of a trust by a sponsor, to raise money by trustees through the sale of units to the public, under one or more schemes, for investing in securities in accordance with these regulations.These mutual funds are referred to as Unit Trusts in the U.K. and as open end investment companies in the U.S.A. therefore, Kamm, J.O. defines an open end investment company as an organization formed for the investment of funds obtained from individuals & institutional investors who in exchange for the funds receive shares which can be redeemed at any time at their underlying asset values.According to Weston J. Fred & Brigham, Eugene, F., Unit Trusts are corporations which accepts dollars from savers and then use these dollars to buy stocks, long term bonds, short term debt instruments issued by business or government units; these corporations pool funds & thus reduce risk by diversifications.Thus, mutual funds are corporations which pool funds by selling their own shares & reduce risk by diversification.

WHO ARE THE PARTIES INVOVED?INVESTORSEvery investor, given her financial position & personal disposition, has a certain inclination to take risk (risk profile or risk appetite). The hypothesis is that by taking an incremental risk (of losing capital, wholly or partly), it would be possible for the investor to earn an incremental return.But assuming risk without regularly monitoring it is foolhardy. Therefore, it would be prudent for investors who take a risk to be able to manage this risk.A mutual fund is the solution for investors who lack the time, the inclinations or the skills to actively manage their investment risk in individual securities.The following categories of investors are eligible to invest in Indian mutual funds: Resident Indian adult individuals, either singly or jointly (not exceeding three); Parents & lawful guardians on behalf of minors; Companies, corporate bodies registered in India; Registered societies & co-operative societies authorized to invest in such units; Partners of partnership firms; Hindu undivided families (HUFs), in the sole name of the karta; Banks (including co-operative banks & regional rural banks) & financial institutions & investment institutions; Other mutual funds registered with SEBI;

TRUSTEESTrustees are the people within a mutual fund organization who are responsible for ensuring that investors interests in a scheme are properly taken care of. In return for their services, they are paid trustee fees, which are normally charged to the scheme.ASSET MANAGEMENT COMPANY (AMC)AMCs manage the investment portfolios of schemes. An AMCs incomes comes the management fees it charges the schemes it manages. The management fee is calculated as a percentage of net assets managed. Some countries provide for performance based management fees as well.In order to earn management fee, an AMC has naturally to employ people & bear all the establishment cost that are related to its activity, such as for premises, furniture, computers & other assets, software development, communication costs, etc.The break-even level of AUM is a function of cost structure of AMC & distribution of assets between its different types of schemes since debt schemes & index schemes generally yield a lower management fee.DISTRIBUTORS Distributors earn a commission for bringing investors into the schemes of a mutual fund. This commission is an expense for the scheme, although there are occasions when an AMC may choose to bear the cost, wholly or partly.Depending on the financial & physical resources at their disposal, the distributors could be:Tier 1 distributors who have their own or franchised network reaching out to investors all across the country; orTier 2 distributors who are generally regional players with some reach within their region; orTier 3 distributors who are small & marginal players with limited reach.REGISTRARS An investors holding in mutual fund schemes in typically tracked by the schemes registrar & transfer agent (R&T). Some AMCs prefer to handle this role in-house, i.e. on their own instead of appointing an R&T. The registrar or the AMC as the case may be maintains an account of the investors investments in and disinvestments from the scheme. Requests to invest more money into a scheme or to redeem money against existing investment in a scheme are processed by the R&T. CUSTODIAN / DEPOSITORYThe custodian maintains custody of the securities in which the schemes invests as distinct from the registrars who tracks the investment by investors in the schemes. This ensures an ongoing independent record of the investments of the scheme. The custodian also follows up on various corporate actions, such as rights, bonus & dividends declared by investee companies.In a situation where a securities are increasingly being dematerialized, the role of the depository for such independent record of investments is growing.

SWOT ANALYSIS Strengths: characteristics of the business or project that give it an advantage over others. Weaknesses: characteristics that place the team at a disadvantage relative to others Opportunities: elements that the project could exploit to its advantage Threats: elements in the environment that could cause trouble for the business or project

SWOT ANALYSIS OF MUTUAL FUNDS

STRENGTHS

WEAKNESS

Option available Diversification Professional management Potential returns Well regulated Technical analysis Convenient administration Return potential Low cost Transparency Affordability Flexibility.

No control over cost No tailor made portfolio Managing a portfolio of funds Cost of churn.

OPPORTUNITIES

THREATS

Bid scope for expansion Saving rate in India Growing cities Online trading of mutual funds Like equity & commodity Clubbing up with other investments.

Uncertainity Change of market trends Increasing number of assets management companies.

TYPES OF MUTUAL FUND

Types of Mutual Fund

Sector schemesIndex schemesIndustry specific SpecificSpecial schemes Investment objective Structure Growth Income Balanced Money Market Open Ended Close Internal

Advantages of Mutual Funds Diversification. Professional Management. Liquidity (mainly in case of opened mutual funds). Regulatory. Convenience. Low cost. Reduction of transaction cost. Diverse returns. Advantages to Industrial concern. Tax relief. Attract foreign Capital. Reduction / Diversification of risk.

Drawbacks of Mutual fund No guaranties. Fees & Commission. Taxes.

Other Players in Mutual Fund Bank of Baroda mutual fund (BOB MF) 30OCT. 1992. Benchmark mutual funds (June 12, 2001). Birla Sun life MF (1871). Chola mutual fund (3 Jan. 1997). Can bank mutual fund (Dec. 19, 1987). LIC mutual fund (19th June, 1989). Reliance mutual fund (30June, 1995). Sahara mutual fund (18 July, 1996). GIC (General Insurance Corporation of India). Etc.

FUTURE OF MUTUAL FUND IN INDIAMF industry's assets under management hit a record high of Rs 9.58 lakh crore in August 2013 and have remained near Rs 9 lakh crore as the year draws to a close.

Fund houses are upbeat about an even better performance in 2014 on account of various measures initiated by market regulator Sebi as well as plans of individual players to expand thedistributionnetwork across the country, particularly to smaller cities.

Industry body AMFI (Association of Mutual Funds in India) Chairman and leading fund house Reliance MF chief Sundeep Sikka said that "2014 would be one of the best year for the mutual fund industry asmarketsare moving in the upward direction".

Market participants are optimistic about equity schemes in 2014 on hopes that a stable government - to be set up after the general elections in the first half - will help boost the stock markets.Debt fundsare also expected to continue attracting investors in the first half of the new year.In 2013, the total assets under management (AUM) of all fund houses put together soared by 11 per cent on strong inflows incategoriessuch as bonds and liquid funds, industry estimates show.This was the second consecutive yearly rise in the industry AUM, after a drop in the assets base for two preceding years.The total industry AUM stood at Rs 8.08 lakh crore at the end of 2012, while the same was Rs 6.11 lakh crore at 2011-end. It was about Rs 6.26 lakh crore in 2010 and Rs 6.65 lakh crore in 2009.Mutual funds collect money from investors and later invest the same into various market segments including stocks, IPOs (primary market) and bonds.

Market participants said that with elections on the anvil an element of 'uncertainty' could prevail for the mutual fund industry for the next quarter or so in."I am very positive and confident that 2014 would be a very good year for the mutual fund industry,"Axis Mutual FundMD and CEO Chandresh Nigam said.However,PwC India Asset ManagementLeader Gautam Mehra said: "With elections on the anvil, an element of 'uncertainty' could prevail for the next quarter or so."

During 2013, the performance of the mutual fund industry has, to an extent, mirrored the performance of the Indian economy, the stock markets and theFIIinvestment flows.This year, not a single new license was issued and the sector has not witnessed any fresh foreign investment. On the contrary, 2013 was a year of consolidation for the industry.

HDFC MF, with assets of over Rs 1 lakh crore, agreed to buy all eight schemes of Morgan Stanley with combined assets of Rs 3,290 crore. Besides, Daiwa sold its assets to SBI Mutual Fund for an undisclosed amount this year.For most part of the year, the bond funds had garnered a major share of incremental AUM. However, it is only in the last two months that have witnessed a significant rise in the AUM of the liquid category.The data also suggests that the rise in the industry AUM is predominantly due to the flows into the liquid category on the back of higher than expected FCNR (Foreign Currency Non-resident) deposits mobilization by banks and in the absence of a strong credit growth.Inflows in income andliquid fundshave contributed the most to the industry's rising AUM. With inflows of a staggering Rs 1.4 lakh crore, liquid funds AUM surged to Rs 2.46 lakh crore. A similar trend was seen in income funds, where inflows rose to around Rs 23,000 crore taking the assets managed by the fund to Rs 4.31 lakh crore.

CHAPTER-II

Company profile

HDFC & ICICI MUTUAL FUNDS

HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (HDFC)HDFC Ltd. was incorporated in 1977 as the first specialized mortgage company in India. HDFC provides financial assistance to individuals, corporate and developers for the purchase or construction of residential housing. It also provides property related services (e.g. property identification, sales services and valuation), training and consultancy. Of these activities, housing finance remains the dominant activity. HDFC has a client base of around 13 lac borrowers, over 15 lac depositors, over 1.9 lac shareholders and over 25,000 deposit agents, as at September 30, 2013.As at September 30, 2013, HDFC had mortgage loan assets of Rs. 1,8488.86 billion. Since inception, HDFC has financed over 4.4 million housing units.74% of shareholders in HDFC are foreign investors. HDFCs market capitalization as at September 30, 2013 stood at approximately Rs 1,186.66 billion.HDFC 's borrowings consists of domestic term loans from banks and insurance companies, bonds and retail deposits. HDFC has received the highest rating for its bonds and deposits program for the Nineteenthyear in succession.As part of HDFCs developmental initiatives, the company has set up institutions in various fields including credit rating, consumer finance, leasing, infrastructure, and IT-enabled services.Over the years, the HDFC group has emerged as a strong financial conglomerate in the Indian capital markets with a presence in banking, life and general insurance, asset management and venture capital. HDFCs key associate and subsidiary companies include HDFC Bank Limited, HDFC Standard Life Insurance Company Limited, HDFC Ergo General Insurance Company Limited, HDFC Asset Management Company Limited, GRUH Finance Limited, HDFC Venture Capital Limited and Credila Financial Services Limited.STANDARD LIFE INVESTMENTS LIMITEDThe Standard Life Assurance Company was established in 1825 and has considerable experience in global financial markets. The company was present in the Indian life insurance market from 1847 to 1938 when agencies were set up in Kolkata and Mumbai. The company re-entered the Indian market in 1995, when an agreement was signed with HDFC to launch an insurance joint venture.In April 2006, the Board of The Standard Life Assurance Company recommended that it should demutualise and Standard Life plc float on the London Stock Exchange. At a Special General Meeting held in May voting members overwhelmingly voted in favour of this. The Court of Session in Scotland approved this in June and Standard Life plc floated on the London Stock Exchange on 10 July 2006.Standard Life Investments was launched as an investment management company in 1998. It is the dedicated investment management company of the Standard Life group and is a wholly owned subsidiary of Standard Life Investments (Holdings) Limited, which in turn is a wholly owned subsidiary of Standard Life plc.With global assets under management of approximately US$240.7 billion (154.9 billion) as at December 31, 2011, Standard Life Investments Limited is one of the world's major investment companies, operating in the UK, Canada, Hong Kong, China, Korea, Ireland, Australia and the USA, and is responsible for investing money on behalf of five million retail and institutional clients worldwide.In order to meet the different needs and risk profiles of its clients, Standard Life Investments Limited manages a diverse portfolio covering all of the major markets world-wide, which includes a range of private and public equities, government and company bonds, property investments and various derivative instruments. The company's current holdings in UK equities account for approximately 1.8% of the market capitalization of the London Stock Exchange. For more information log on to the websitewww.standardlifeinvestments.comHDFC Asset Management Company Limited (AMC)HDFC Asset Management Company Ltd (AMC) was incorporated under the Companies Act, 1956, on December 10, 1999, and was approved to act as an Asset Management Company for the HDFC Mutual Fund by SEBI vide its letter dated July 3, 2000.

The registered office of the AMC is situated at HUL House, 2nd Floor, H. T. Parekh Marg, 165-166, Backbay Reclamation, Churchgate, Mumbai - 400 020.In terms of the Investment Management Agreement, the Trustee has appointed the HDFC Asset Management Company Limited to manage the Mutual Fund. The paid up capital of the AMC is Rs. 25.241 crore as onSeptember 30, 2013.The equity shareholding pattern of the AMC as on September 30, 2013 is as follows :Particulars% of the paid up equity capital

Housing Development Finance Corporation Limited59.81

Standard Life Investments Limited39.87

Other Shareholders (shares issued on exercise of Stock Options)0.32

Zurich Insurance Company (ZIC), the Sponsor of Zurich India Mutual Fund, following a review of its overall strategy, had decided to divest its Asset Management business in India. The AMC had entered into an agreement with ZIC to acquire the said business, subject to necessary regulatory approvals.On obtaining the regulatory approvals, the following Schemes of Zurich India Mutual Fund have migrated to HDFC Mutual Fund on June 19, 2003. These Schemes have been renamed as follows:Former NameNew Name

Zurich India Equity FundHDFC Equity Fund

Zurich India Prudence FundHDFC Prudence Fund

Zurich India Capital Builder FundHDFC Capital Builder Fund

Zurich India TaxSaver FundHDFC TaxSaver

Zurich India Top 200 FundHDFC Top 200 Fund

Zurich India High Interest FundHDFC High Interest Fund

Zurich India Liquidity FundHDFC Cash Management Fund

Zurich India Sovereign Gilt FundHDFC Sovereign Gilt Fund*

*HDFC Sovereign Gilt Fund has been wound up in March 2006The AMC is also providing portfolio management / advisory services and such activities are not in conflict with the activities of the Mutual Fund. The AMC has renewed its registration from SEBI vide Registration No. - PM / INP000000506 datedFebruary 12, 2013 to act as a Portfolio Manager under the SEBI (Portfolio Managers) Regulations, 1993. The Certificate of Registration is valid from January 1, 2013 to December 31, 2015.

Products and Schemes of HDFC mutual fund

Annual Interval Fund - Series 1HDFC Annual Interval Fund - Series 1

Children's Gift FundChildren's Gift Fund

Debt/ Income FundInvest in money market and debt instruments and provide optimum balance of yield.

Equity / Growth FundInvest primarily in equity and equity related instruments.

Exchange Traded FundsInvest primarily in equity and equity related instruments.

Fixed Maturity PlanInvest primarily in Debt / Money Market Instruments and Government Securities.

Fund of Fund SchemesInvests primarily in other scheme(s) of the same mutual fund or other mutual funds

HDFC Capital Protection Oriented FundHDFC Capital Protection Oriented Fund- Series I

Liquid FundsProvide high level of liquidity by investing in money market and debt instruments.

Quarterly Interval FundGenerate regular income through investments in Debt / Money Market Instruments..

Rajiv Gandhi Equity Savings SchemeRajiv Gandhi Equity Savings Scheme

TOP FUND DETAILHDFC TOP 200 FUND GROWTHCurrent nav223.63

Previous nav220.97

Quately average AUM in cr(as on 31 dec 2013)7539.69

Portfolio allocationEquity94.21%

debt0.00%

other5.79%

Scheme detailInvestment ObjectiveThe investment objective of the Scheme is to generate long term capital appreciation from a portfolio of equity and equity linked instruments. The investment portfolio for equity and equity linked instruments will be primarily drawn from the companies in the BSE 200 Index.

Scheme TypeOpen ended scheme

Scheme ClassEquity - Large-cap

Investment PlanGrowth

Minimum Investment (in )5000.00

Lock In Period0

Dividend0.00

BonusN/A

Fund ManagerPrashant Jain

SIPYes

STPYes

SWPYes

List of key Management personnelTrustees

HDFC Trustee Company Limited, a company incorporated under the Companies Act, 1956 is the Trustee to HDFC Mutual Fund vide the Trust deed dated June 8, 2000, as amended from time to time. HDFC Trustee Company Ltd is wholly owned subsidiary of HDFC

The Board of Directors of HDFC Trustee company Limited consists of the following eminent persons. Mr. Anil Kumar Hirjee Mr. Vincent Joseph OBrien Mr. Shishir K. Diwanji Mr. Ranjan Sanghi Mr. V. Srinivasa Rangan

Mr. Anil Kumar Hirjee

Mr. Anil Kumar Hirjee, the Chairman of the Board, is an independent Director. Mr.Hirjee has 45 years of experience in different areas of Business Management and his expertise extends to finance, banking, legal, commercial, industrial and general administration. He has also been actively associated with leading Charitable Institutions. Mr. Hirjee has been associated with The Bombay Burmah Trading Corporation Limited since 1976 and is presently its Vice Chairman. He is also a Director on the Boards of various other companies.Mr. Hirjee is a B.A. (Hons.), LL.B. (Hons.), Barrister-at-Law, and SLOAN Fellow of the London Business School.

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Mr. Vincent Joseph OBrien

Mr Vincent Joseph OBrien has been appointed as an associate Director on the Board of the Trustee Company. He joined Standard Life Investments Limited in 2003 and in 2010 he was appointed as the Global Head of Strategic Alliances with specific responsibility for the Companys operations in India and Japan. Prior to 2010 he was the Company Secretary with additional responsibilities for regulatory compliance and risk management. He reports to the Director of Global Client Group of Standard Life Investments Limited. Before 2003 he worked for Standard Life Bank as its Company Secretary with responsibilities for compliance, risk management and legal.He is Associate of the Chartered Insurance Institute (ASCII) of United Kingdom.

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Mr. Shishir K. Diwanji

Mr. Shishir K. Diwanji, is an independent Director on the Board. He is a Partner with Messrs. Desai and Diwanji, Advocates, Solicitors and Notaries. He is also a Director on the Board of various other companies.Mr. Diwanji holds a Bachelors degree in Law.

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Mr. Ranjan Sanghi

Mr. Ranjan Sanghi, is an independent Director on the Board. He is Director / Partner with Sah & Sanghi Group of Companies. He is also a Director on the Board of various other companies.

Mr. Sanghi is a Graduate in Commerce fromMumbai University.

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Mr. V. Srinivasa Rangan

Mr. V. Srinivasa Rangan is an Associate Director on the Board. Mr. Rangan is an Executive Director at Housing Development Finance Corporation Limited (HDFC Ltd). He has been associated with HDFC Ltd. since 1986. He was inducted into the Board of HDFC Ltd. as Executive Director in January 2010 and prior to that he was Senior General Manager Treasury. He has been appointed as the Executive Director of HDFC Ltd. for a period of 5 years with effect from January 1, 2010, subject to the approval of the Members at the ensuing Annual General Meeting of HDFC Ltd. He is also a Director on the Board of various other companies.

Mr. Rangan is a Graduate in Commerce, Grad. CWA and an Associate of the Institute of Chartered Accountants of India.

Registrar & Transfer Agents

Registered Office:Computer Age Management Services Pvt. LimitedNew No. 10, Old No. 178,M.G.R. Salai, Nungambakkam,Chennai - 600 034.Computer Age Management Services Pvt. Ltd.,Rayala Towers - I,158 Anna Salai,Chennai 600002.Tel : (+91) 044 2852 0516Fax : (+91) 044 4203 2952

Custodian

HDFC Bank LimitedLodha - I Think Techno Campus Office, Floor 8,Next to Kanjurmarg Railway StationKanjurmarg (East), Mumbai - 400 042.Website:www.hdfcbank.comCitibank N.A.Global Securities & Fund Services (SFS), India,3rd Floor, Trent House, Plot No. G-60, Bandra Kurla ComplexBandra East, Mumbai - 400051Website:www.citibank.comThe Bank of Nova Scotia91-94, 3rd North Avenue,Maker Maxity, Bandra-Kurla Complex,Bandra (E), Mumbai 400 051Website:www.scotiabank.comCurrently, The Bank of Nova Scotia has been appointed as the custodian of Portfolio Deposit (i.e. Physical Gold) for HDFC Gold Exchange Traded Fund.

MEANING OF AUM (ASSETS UNDER MANAGEMENT)The market value of assets that an investment company manages on behalf of investors. Assets under management (AUM) is looked at as a measure of success against the competition and consists of growth/decline due to both capital appreciation/losses and new money inflow/outflow.

AUM Market Share ofHDFC Mutual FundDescriptionValues ( Cr.)

Total AUM8,82,410.81

Quarterly Average AUM of HDFC Mutual Fund(As of 31 Dec 2013)1,09,392.82

Market Share in %12.40

HDFC MUTUAL FUND SCHEMESNumber of scheme132

NO. of scheme option808

PORTFOLIO ALLOCATIONEquity94.21%

debt0.00%

other5.79%

ICICI PRUDENTIAL MUTUAL FUND

The mutual fund of ICICI is a joint venture with Prudential PLC Of America, one of the largest life insurance companies in the USA. Prudential ICICI mutual fund was set up on 13th of Oct. 1993 with two sponsors.ICICI Prudential Mutual Fund (the Fund) offers a wide range of retail and corporate investment solutions across different asset classes like Equity, Fixed Income and Gold.The Fund House has continuously aimed to provide investors with financial solutions to aid them in achieving their lifecycle objectives. It has constantly been on the forefront of innovation and has introduced products aligned to meet customer needs leading to a well-diversified portfolio of around 57 mutual fund products. The success of the endeavors is evident in the mutual fund investor base that has witnessed significant growth from 210 to over 2 Million currently. ICICI Prudential Mutual Fund gained from managing funds as per its investment objectives and was able to deliver superior risk adjusted returns. The consistent long term performance was achieved on the strength of fundamentals, process driven investment approach with enough flexibility for the fund managers to manage their funds in their unique style and insight.The fund house over the last 18 years has garnered trust of its investors and has emerged as the leading and preferred investment solution provider in India. The fund house has always aimed to fulfill its fiduciary responsibility of managing investor's wealth with prudence and due diligence. ICICI Bank started as a wholly owned subsidiary of ICICI Limited, an Indian financial institution, in 1994. Four years later, when the company offered ICICI Bank's shares to the public, ICICI's shareholding was reduced to 46%. In the year 2000, ICICI Bank offered made an equity offering in the form of ADRs on the New York Stock Exchange (NYSE), there by becoming the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. In the next year, it acquired the Bank of Madura Limited in an all-stock amalgamation. Later in the year and the next fiscal year, the bank made secondary market sales to institutional investors.

MEANING OF AUM (ASSETS UNDER MANAGEMENT)The market value of assets that an investment company manages on behalf of investors. Assets under management (AUM) is looked at as a measure of success against the competition and consists of growth/decline due to both capital appreciation/losses and new money inflow/outflow.

UM Market Share ofICICI Prudential Mutual FundDescriptionValues ( Cr.)

Total AUM8,82,410.81

Quarterly Average AUM of ICICI Prudential Mutual Fund(As of 31 Dec 2013)97,318.10

Market Share in %11.03

HDFC MUTUAL FUND SCHEME Number of schemes226

No. of schemes option926

TOP FUND DETAIL

ICICI Prudential Income Plan - Regular - Growth

Current NAV36.89

Previous NAV36.80

Quarterly average AUM in cr(as on 31 dec 2013)4321.63

Portfolio allocationEquity0.00%

debt96.98%

other3.02%

Investment ObjectiveTo generate income through investments in a range of debt and money market instruments of various maturities with a view to maximising income while maintaining the optimum balance of yield, safety and liquidity.

Scheme TypeOpen ended scheme

Scheme ClassIncome - Long Term

Investment PlanGrowth

Minimum Investment (in )5000.00

Lock In Period0

Dividend0

BonusN/A

Fund ManagerManish Banthia

SIPYes

STPYes

SWPYes

KEY PERSONNEL MANAGEMENTMr.Nimesh Shah- Managing Director & CEO

Nimesh Shah joined ICICI Prudential AMC as its Managing Director in July 2007.Nimesh has completed his Chartered Accountancy. Prior to joining ICICI Prudential AMC, Nimesh was Senior General Manager at ICICI Bank and has over 19 years experience in banking and financial services. At ICICI Group, he has handled many responsibilities including project finance, corporate banking and international banking.He was associated with one of the first batches of senior managers selected to lead the foray of ICICI Bank into the international arena. He led ICICI Banks foray into the Middle-Eastern region and Africa.Mr. B Ramakrishna - Executive Vice PresidentMr. Raghav Iyengar - Executive Vice President & Head Retail & Institutional BusinessMr. Hemant Agarwal - Head - OperationsMr. Rahul Rai - Head Real Estate Business ICICI Prudential Asset Management Company LimitedFund ManagementMr. S. Naren - Chief Investment OfficerMr. Rahul Goswami - Chief Investment Officer Fixed IncomeBoard of Directors: Asset Management CompanyMs. Chanda Kochhar - ChairpersonMr. Barry StoweMr. Suresh KumarMr. Vijay ThackerMr. Dileep C. ChoksiMr. N.S. KannanMr. Nimesh ShahMr. C. R. MuralidharanDirectors of the Trustee CompanyMr. M. N. Gopinath - ChairmanMr. M. S. ParthasarathyMr. Keki Bomi DadisethMr. Vinod DhallMr. Sandeep Batra

Fund DetailsTotal Asset Size (Rs cr):97,318.10

Total Schemes : 256

Asset as on 31 Dec 13

Categories and No. of SchemesFixed Maturity Plans :100

Hybrid - Debt Oriented :23

Hybrid - Capital Protection :23

Interval Income Funds :20

Others :90

Change Fund

CHAPTER-III

RESEARCH METHODOLOGY

Need of the study The need of study arises for learning the variables available that distinguish the mutual fund of two companies. To know the risk & return associated with mutual fund. To chose best company for mutual investment between HDFC & ICICI. To project mutual fund as the productive avenue for investing activities.Objectives 1. To analysis which provides better returns from HDFC & ICICI.1. To analyze the concept and parameters of mutual fund.1. To know how many people are satisfied by their investment (in HDFC or ICICI). 1. To know people behavior regarding risk factor involved in mutual fund.

Research refers to search for knowledge. One can also define research as a scientific and systematic search for pertinent information on a specific topic. It is an art of scientific investigation.Research Methodology:- It is the way to systematically solve a problem. The methodology adopted in this study is explained below:-1. Research Design0. Problem Defining: In a competitive situation with multiple mutual funds operating in Indian market, it is necessary to know about the performance of different mutual funds as the performance of mutual fund decides about the future of Mutual Fund Company. In this study my focus is upon performance of investors regarding HDFC &ICICI. This is my problem to be studied for research.

0. Literature Survey: I have used newspapers, magazines related to business & finance & apart from websites.0. Type of research: The research is qualitative & descriptive in nature. Qualitative research is that talk about the quality of the subject to be researched and Descriptive research is one that describes things as exists in present.0. Data collection Design: 3. Sources of data = 0. Primary Sources I have used questionnaire as primary source for collecting data for my study.0. Secondary sources I had collected my secondary data from websites & journals. 3. Sampling = It represents whole population. It is the processes of choosing a sample from whole population .I have choose a sample of high class & middle class people who have invested in mutual funds as a sample.3. Tools = I have used some charts (Pie chart, column chart, cylinder chart, cone chart) Sampling Size = It represents that how many candidates youve chosen to be filled up your questionnaire or candidates upon whom you can study. I had chosen sample of 50 Respondents3. Sampling Techniques =3. Deliberate &3. Convenience Sampling.3. Data Interpretation = Data interpretation is that in which we analysis the whole collected data & tries to give it in simple words to be understandableLimitations: - There are some limitations of my study, those are as Following:- Sample limitation: - which sample is taken by me is very small in size to Compare mutual fund of two companies. Reliability: - The data collected by me is not much reliable because many investors chosen by me have invested in HDFC. Parameters: - All the parameters have not been taken. Time limitation: - I had the shortage of time because of that I was not able to do my study in a good manner. Awareness: - Investors chosen for study are not fully aware of all the terms and conditions related to mutual fund .So, it is very difficult to construct right information from them.

CHAPTER-IV

ANALYSIS AND FINDING

Analysis through Questionnaire :-1. Do you invest in mutual fund?

FIG 1.1

Interpretation:-

Out of 50 Respondents up to 35 have invested in mutual fund..

2. With which company do you have invested in mutual funds?

Fig 1.2

Interpretation:Out of 50 Respondents up to 25 have invested in mutual fund with HDFC,15 have invested with ICICI and 10 invested in SBI There is no investor who have invested in mutual fund with any another company.HDFC 25

ICICI15

Reliance 0

SBI10

LIC 0

Kotak Mahindra 0

Others 0

3. What is your age?

Fig 1.3

Interpretation:

20 investors are of age between 15-25 . 15 investor are of age between 25-35 and 5 investor are of age between 5.

4. What is your income? (Yearly based)

Fig 1.4

Interpretation:

Up to 35 investors have income between 2-4 lakh. 13 have between 4-5 lakh. & there is no investor who have income up to 1akh.

5. From where you come to know about this companys mutual fund schemes?

Interpretation:

Many investors (up to 25) have been come to know about the company to be invested by their friends & peers. 15 have been known by their family & relatives .5 have been come to know by company employees. This means many have come to know by their friends & peers.

6. What is the time duration of your investment?

0-1 year 20

1-2 year 15

2-4year 10

more than 4 5

Interpretation:

20 investors have time of investment less than one year.15 have time duration of their investment between of 1-2 year. 10 have between 2-4 year & 5 have more than 4 years. So, we can say that 20 investors have more experience than others.7. Are you satisfied by service of the companys employees / peoples behavior? Highly satisfied 15

Satisfied 35

Neutral 30

Dissatisfied 15

Highly Dissatisfied 5

Interpretation: Out of 50 investors 19 are highly satisfied. 15 are satisfied. 10 are neutral towards employee behavior of a company. 6 are dissatisfied. 0 are highly dissatisfied. We say that many people are highly satisfied by employee behavior.

8. What is your risk profile?Innovator 10

Moderate 33

Risk adverse 07

Interpretation:

10 investors are innovator means they like to take risk for more returns. 33 are moderate towards risk means they are in different towards risk. 7 are risk adverse means they mainly try to avoid risk.

9. What you feel about the company norms, documentation & formalities? Highly Satisfied 10

Satisfied 15

Neutral 14

Dissatisfied 10

Highly dissatisfied 5

Interpretation:10 investors are highly satisfied by companys documentation policy (filling up the forms etc.). 15 are satisfied, 14 never cares about it or are moderate towards it , 5 are dissatisfied by it & 1 are highly dissatisfied.

10. What you say which provides better returns?

HDFC34

ICICI16

Interpretation:

According to collected data 68 investors thinks that HDFC provides better returns where as 32 to think that ICICI provides better returns.

11. Would you like to exchange your investment with one another between HDFC & ICICI?

Yes 15

No 85

Interpretation:

7 investors said that they would like to change their investment with each another between HDFC & ICICI. But 85 investors say that they are ok with their companies and they wouldnt like to exchange their investment.

Findings: - In my research I have founded following things:-

Investors have more faith HDFCs mutual fund. As the age increases investors are much satisfied, see more risk & become more risk adverse. Old people &Widows prefer lower risk. Investors are not highly satisfied by company rules & employee behavior. Investors think that HDFC provides better returns than ICICI.

CONCLUSION AND RECOMMENDATION

CONCLUSION ; To conclude we can say that mutual fund is a very much profitable tool for investment because of its low cost of acquiring fund, tax benefit, and diversification of profits & reduction of risk. Many investors who have investedin mutual fundhave invested with HDFC and them also thinks that it provides better returns than ICICI .There is also an affect of age onmutual fund investorslike; old people & widows want regular returns than capital appreciation. Companies can adopt new techniques to attract more & more investors. In my study I was suppose to do comparative analyses the mutual fund of HDFC &ICICI and I had found that people consider HDFC better than ICICI. But ICICI have also respondents and it can increase its investors by improving itself in some terms To conclude we can say mutual fund is a best investment vehicle for old & widow, as well as to those who want regular returns on their investment. Mutual fund is also better and preferable for those who want their capital appreciation. Both the companies are doing considerable achievements in mutual fund industry.There are also so many competitors involved those affects on both companies.

Recommendations / Suggestions: - In my study I have found some limitations. For that I can suggest both companies following suggestions or areas of improvement:- ICICI bank should try to provide better returns to its investors as compare to HDFC. Both companies should try to invest in better securities for better profits. Both companies should try to satisfy their customer by better customer service or by improving customer relationship management. Companies should try to make people initiative towards risk. Investors should be made fully aware of the concept of mutual fund & all the terms and conditions. It should more emphasize in advertising, as it is the most Powerful tool to position ant brand in the mindsets of customers

BIBLIOGRAPHYBibliography:-

Books:- C.R.Kothari, Research Methodology. New Delhi, Vikas Publishing house Pvt.Ltd.2007. ICICI and HDFC Brochure .

WEBLIOGRAPHY1. http://www.icicipruamc.com/2. http://www.hdfcfund.com/3. http://www.moneycontrol.com/4. http://www.moneycontrol.com/5. http://www.amfiindia.com/6. http://www.amfiindia.com/7. http://www.mutualfundindia.com

Annexure

Name ________________________ Age _________ Sex _________

1. Do you invest in mutual fund? Yes No .

2. With which company do you have invested in mutual funds? HDFC ICICI Reliance Lic SBI Kotak Mahindra Others Please specify3. What is your age?15-25 25-35

35-45 above 45.

4. What is your income? (Yearly based) 1 lakh 2 - 4lakh 4-5 lakhmore than 5

5. From where you come to know about this companys mutual fund schemes? Family members & relatives Friends & peers Companyemplooyes Others Please specify.6. What is the time duration of your investment? 0-1 year 1-2 year 2-4year More than 4

7. Are you satisfied by service of the companys employees / peoples behavior? Highly satisfied Satisfied Neutral Dissatisfied Highly dissatisfied.

8. What is your risk profile? Innovator Moderator Risk adverse

9. What you feel about the company norms, documentation & formalities? Highly satisfied Satisfied NeutralDissatisfied Highly dissatisfied.

10. What you say which provides better returns? HDFC ICICI11. Would you like to exchange your investment with one another between HDFC & ICICI? YES NO

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