Mutual Fund Hdfc

8/3/2019 Mutual Fund Hdfc

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INTRODUCTION MUTUAL FUND:

The SEBI regulations, 1993 defines a mutual fund as a

fund in the Form of trust by a sponsor, to raise money by the trusteestrough the sale units to the public, under one or more schemes, forinvesting in securities in accordance with these Regulations

A mutual fund is a professionally-managed firm of collectiveinvestments that pools money from many investors and invests it in stocks,bonds, short-term money market instruments, and/or other securities. In amutual fund, the fund manager, who is also known as the portfoliomanager, trades the fund's underlying securities, realizing capital gains orlosses, and collects the dividend or interest income. The investment

proceeds are then passed along to the individual investors. The value of ashare of the mutual fund, known as the net asset value per share (NAV), iscalculated daily based on the total value of the fund divided by the numberof shares currently issued and outstanding.

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OBJECTIVES

To evaluate investment performance of mutual funds in terms ofrisk and return.

To examine the funds sensitivity to the market fluctuations in terms

of beta.

To find out the financial performance of mutual fund schemes.

To appraise investment performance of mutual funds with riskadjustment, the the oretical parameters as suggested by Sharpe,Treynor and Jensen.

To analyze the performance of various schemes of mutual funds.

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HISTORY OF THE MUTUAL FUND:

Historians are uncertain of the origins of investment funds;

some cite the closed-end investment companies launched in theNetherlands in 1822 by King William I as the first mutual funds, whileothers point to a Dutch merchant named Adrian van Ketwich whoseinvestment trust created in 1774 may have given the king the idea. VanKetwich probably theorized that diversification would increase the appealof investments to smaller investors with minimal capital. The name of vanKetwich's fund, EENDRAGT MAAKT MAGT, translates to "unity createsstrength". The next wave of near-mutual funds included an investmenttrust launched in Switzerland in 1849, followed by similar 2 vehicles whichis followed by many kind of companies created in Scotland in the 1880s.The idea of pooling resources and spreading risk using closed-endinvestments soon took root in Great Britain and France, making its way tothe United States in the 1890s.

The Boston Personal Property Trust, formed in 1893, was thefirst closed-end fund in the U.S. The creation of the Alexander Fund inPhiladelphia, Pennsylvania, in 1907 was an important step in the evolutiontoward what we know as the modern mutual fund. The Alexander Fundfeatured semi-annual issues and allowed investors to make withdrawalson demand.

The Arrival of the Modern Fund:

The creation of the Massachusetts Investors' Trust in Boston,Massachuset heralded the arrival of the modern mutual fund in 1924. Thefund went public in 1928, eventually spawning the mutual fund firm knowntoday as MFS Investment Management. State Street Investors' Trust wasthe custodian of the Massachusetts Investors' Trust. Later, State StreetInvestors started its own fund in 1924 with Richard Paine, RichardSaltonstall and Paul Cabot at the helm. Saltonstall was also affiliated withScudder, Stevens and Clark, an outfit that would launch the first no-loadfund in 1928. A momentous year in the history of the mutual fund, 1928

also saw the launch of the Wellington Fund, which was the first mutualfund to include stocks and bonds, as opposed to direct merchant bankstyle of investments in business and trade.

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CONCEPT OF MUTUAL FUND

A Mutual Fund is a trust that pools the savings of a number ofinvestors who share a common financial goal. The money thus collected isthen invested in capital market instruments such as shares, debenturesand other securities. The income earned through these investments andthe capital appreciation realized is shared by its unit holders in proportionto the number of units owned by them. Thus a Mutual Fund is the mostsuitable investment for the common man as it offers an opportunity toinvest in a diversified, professionally managed basket of securities at arelatively low cost. The flowChart below describes broadly the working of a mutual fund.

ABOUT THE TOPIC

MEANING:

A mutual fund is a professionally-managed firm of collectiveinvestments that pools money from many investors and invests it in stocks,bonds, short-term money market instruments, and/or other securities. Inmutual fund, the fund manager, who is also known as the portfolio

manager, trades the fund's underlying securities, realizing capital gains orlosses, and collects the dividend or interest income.

The investment proceeds are then passed along to the individualinvestors. The value of a share of the mutual fund, known as the net assetvalue per share (NAV), is calculated daily based on the total value of thefund divided by the number of shares currently issued and outstanding

DEFINITION:

The SEBI regulations, 1993 defines a mutual fund as a fund inthe form of a trust by a sponsor, to raise money by the trustees trough thesale of units to the public, under one or more schemes, for investing insecurities in accordance with this regulation

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Schemes according to Maturity Period OR by structure

A mutual fund scheme can be classified into open-ended

scheme or close-ended scheme depending on its maturity period.

Open-ended Scheme: An open-ended fund or scheme is onethat is available for subscription and repurchase on a continuous basis.These schemes do not have a fixed maturity period. Investors canconveniently buy and sell units at Net Asset Value (NAV) related priceswhich are declared on a daily basis. The key feature of open-end schemesis liquidity.

Close-ended Scheme: A close-ended fund or scheme has astipulated maturity period e.g. 5-7 years. The fund is open for subscriptiononly during a specified period at the time of launch of the scheme.Investors can invest in the scheme at the time of the initial public issue andthereafter they can buy or sell the units of the scheme on the stockexchanges where the units are listed. In order to provide an exit route tothe investors, some close ended funds give an option of selling back theunits to the mutual fund through periodic repurchase at NAV relatedprices. SEBI Regulations stipulate that at least one of the two exit routes isprovided to the investor i.e. either repurchase facility or through listing onstock exchanges. These mutual funds schemes disclose NAV generally onweekly basis.

Schemes according to Investment Objective:A scheme can also be classified as growth scheme, income

scheme, or balanced scheme considering its investment objective. Suchschemes may be open-ended or close-ended schemes as describedearlier. Such schemes may be classified mainly as follows:

Growth / Equity Oriented Scheme:The aim of growth funds is to provide capital appreciation over the

medium to long-term. Such schemes normally invest a major part of their

corpus in equities. Such funds have comparatively high risks. Theseschemes provide different options to the investors like dividend option,capital appreciation, etc. and the investors may choose an optiondepending on their preferences.

Income / Debt Oriented Scheme:The aim of income funds is to provide regular and steady income to

investors. Such schemes generally invest in fixed income securities suchas bonds, corporate debentures, Government securities and moneymarket instruments. Such funds are less risky compared to equity

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schemes. These funds are not affected because of fluctuations in equitymarkets.

Balanced Scheme:

The aim of balanced funds is to provide both growth and regularincome as such schemes invest both in equities and fixed incomesecurities in the proportion indicated in their offer documents. These areappropriate for investors looking for moderate growth. They generallyinvest 40-60% in equity and debt instruments. These funds are alsoaffected because of fluctuations in share prices in the stock markets.However, NAVs of such funds are likely to be less volatile compared topure equity funds.

Money Market or Liquid Fund:These funds are also income funds and their aim is to provide easy

liquidity, preservation of capital and moderate income. These schemesinvest exclusively in safer short-term instruments such as treasury bills,certificates of deposit, commercial paper and interbank call money,government securities, etc. Returns on these schemes fluctuate much lesscompared to other funds. These funds are appropriate for corporate andindividual investors as a means to park their surplus funds for shortperiods.

Tax Saving Schemes:

These schemes offer tax rebates to the investors under section 80CCC of the Income Tax Act, 1961 as the Government offers tax incentivesfor investment in specified avenues. e.g. Equity Linked Savings Schemes(ELSS). Pension schemes launched by the mutual funds also offer taxbenefits. These schemes are growth oriented and invest pre-dominantly inequities. Their growth opportunities and risks associated are like anyequity-oriented scheme.

Gilt Fund:

These funds invest exclusively in government securities.Government securities have no default risk. NAVs of these schemes alsofluctuate due to change in interest rates and other economic factors as isthe case with income or debt oriented schemesIndex Funds:

Index Funds replicate the portfolio of a particular index such as theBSE Sensitive index, S&P NSE 50 index (Nifty), etc, these schemes investin the securities in the same weight age comprising of an index. NAVs ofsuch schemes would rise or fall in accordance with the rise or fall in theindex, though not exactly by the same percentage due to some factors

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known as "tracking error" in technical terms. Necessary disclosures in thisregard are made in the offer document of the mutual fund scheme.

Load Funds

A Load Fund is one that charges a commission for entry or exit. Thatis, each time you buy or sell units in the fund, a commission will bepayable. Typically entry and exit loads range from 1% to 2%. It could beworth paying the load, if the fund has a good performance history.

No-Load FundsA No-Load Fund is one that does not charge a commission for entry

or exit. That is, no commission is payable on purchase or sale of units inthe fund. The advantage of a no load fund is that the entire corpus is put towork.

IMPORTANCE OR BENEFITS OF MUTUAL FUND

The mutual fund industry has grown at a phenomenal rate inthe recent past. The following are some of the important advantages ofmutual funds.

Canalizing savings for investment:A number of schemes are being offered by MFs so as to meet the

varied requirements of the peoples and savings are directed towardscapital investments directly. In the absence of MFs these savings wouldhave remained idle.

Offering wide portfolio investment:Now the investors can enjoy the wide portfolio investment held by the

mutual fund. The fund diversifies its risks by investing in large varieties ofshares and bonds which cannot be done by small and medium investor.This is investors. This is in accordance with the maximum not to lay alleggs in one basket

Providing better yields:Due to the large funds. Mutual funds are able buy cheaper and sell

dearer than the small and medium investors. Thus they are able to thecommand better market rates and lower rates of brokerage. So theyprovide better yield to their customers .they also enjoy the economics oflarge scale and can reduce the cost of capital market participation

Rendering expertise investment service at low cost:The management of the fund is generally assigned to professionals

who are well trained and have adequate experience in the field of

investment. Thus, investor are assured of quality services in there best

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interest. The intermediation fee is the lowest being 1% in the case of amutual fund.

Providing research services:Each fund maintains large research team, which constantly analyses

the companies and the industries and recommends the fund to buy or sella particular share. Thus investment is made purely on the basis of athorough research.

Offering tax benefits:Certain funds offer tax benefits to its customers. Thus, apart from

dividend, interestAnd capital appreciation, investors also stand to get the benefit of taxconcession.Under the wealth tax act, investments in MFs are exempted up to Rs. 5

lakhs.

Introducing flexible investment schedule:Some mutual funds are permitted the investor exchange their units

from one schemes to another and this flexibility is a great boon toinvestors.

Providing greater affordability and liquidity:Even a very small investor can afford to invest in mutual funds. They

provide an attractive and cost effective alternative to direct purchase ofshares. Again there is greater liquidity. Units can be sold to the fund at any

time at the net asset value and thus quick access to liquid cash is assured.Besides, branches of the sponsoring bank are always ready to provideloan facility against the unit certificates.

Simplified record keeping:The investor has to keep a record of only one deal with the mutual

fund. Even if he does not keep a record, the MF sends statements veryoften to the investors.

Supporting capital market:The savings of the people are directed towards investments in capital

market through these mutual funds. Mutual funds also provide a valuableliquidity to the capital market, and thus the market is made very active andstable.

Promoting industrial development:All industrial units have to raise their funds by resorting to the capital

market by the issue of shares and debentures. The mutual funds not onlycreate a demand for these capital market instruments but also supply alarge source of funds to the market.

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Diversification:The best mutual funds design their portfolios so individual

investments will react differently to the same economic conditions. Forexample, economic conditions like a rise in interest rates may causecertain securities in a diversified portfolio to decrease in value. Othersecurities in the portfolio will respond to the same economic conditions byincreasing in value. When a portfolio is balanced in this way, the value ofthe overall portfolio should gradually increase over time, even if somesecurities lose value.

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SEBI REGULATION ON THE INVESTMENT OF A MUTUAL FUND

The investments of a mutual fund are subjected to a set ofregulations prescribed by SEBI. Presently following restrictions apply.

No term loan shall be granted by a mutual fund scheme.

A mutual fund, under all its schemes taken together, will not ownmore than 10% of any companys paid up capital carrying votingrights.A scheme may invent in another scheme under the same

Asset Management Company or any other mutual fund without

charging any fees,

A scheme may invest in another scheme under the same assetmanagement

Company or any other mutual fund without charging any fees,provided that the

Aggregate inter scheme investment made by all the schemesunder the same Management.

Transfers of investment from one scheme to another scheme ofmutual fund

Permitted provided that: a. such transfers are doneAt the prevailing market price for quoted instruments on spot basis.

. The securities so transferred shall be in conformity with theinvestment objectives of the schemes to which such transfer hasbeen made.

. The registration and accounting of the transactions is completedand

Ratified in the next meeting of the board of trustees.

A mutual fund may borrow to meet liquidity needs, for the purposeof repurchase, redemption of units, or repayment of interest ordividend to the unit holders. Such borrowings shall not exceed 20%of the net asset of the scheme and the duration of the borrowingshall not exceed 6 months. The fund may borrow from permissibleentities at prevailing market rates and may offer the assets of theschemes as collateral for such borrowings.

A scheme shall not invest more than 15% of its NAV in debtinstruments issued by a single issuer which are rated not below

investment grade by an authorized Credit rating agency. Such

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investment limit may be extended to 20% of the NAV Of thescheme with the prior approval of Board of Trustees and the Boardof Asset Management Company. This limit, however, is notapplicable for investment in governments securities and money

market instruments.

A scheme shall not invest more than 10% of its NAV in unrated debtinstruments issued by a single issuer and the total investment insuch instruments shall not exceed 25% of the NAV of the scheme.

A mutual fund will buy and sell securities on the basis of deliveries.It cannotMake short sales or engage in carry forward transactions.

A scheme shall not make any investment ina. Any unlisted security of an associates or group company of thesponsor.b. Any security issued by way of private placement by an associateor group Company of the sponsor

c. The listed securities of group companies of the sponsor inexcess of 25% of the Net assets.

The investment manager may invest in a scheme from time to time.The percentage of such investments to the total net assets mayvary from time to time and can be up to 100% of the net assets of

the schemes.

A scheme shall not invest more than 10% of its NAV in the equityshares or equity related instruments of any one company.

A scheme may invest in ADRs/GDRs of Indian companies listed onoverseas stock exchanges to the extent and in a manner approvedby RBI.A scheme shall not invest more than 5% of its NAV in unlistedequity sharesOr equity related instruments in case of anOpen ended schemes and 10% of its NAV in case a of closed

ended scheme.

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Regulation and Expansion

By 1929, there were 19 open-end mutual fundscompeting with nearly 700 closed end funds. With the stock market crashof 1929, the dynamic began to change as highlyleveraged closed-endfunds were wiped out and small open-end funds managed tosurvive.Government regulators also began to take notice of the fledglingmutual fund industry. The creation of the Securities and ExchangeCommission (SEC), the passage of the Securities Act of 1933 and theenactment of the Securities Exchange Act of 1934 put in place safeguardsto protect investors: mutual funds were required to register with the SECand to provide disclosure in the form of a prospectus. The InvestmentCompany Act of 1940 put in place additional regulations that requiredmore disclosures and sought to minimize and minimize grievience ofinvestor of different catogeries conflicts of interest. The mutual fundindustry continued to expand.

At thebeginning of the 1950s, the number of open-endfunds topped 100. In 1954, the financial markets overcame their 1929peak, and the mutual fund industry began to grow in earnest, adding some50 new funds overthe course of the decade. The 1960s saw the rise of aggressive growthfunds, with more than 100 new funds established and billions of dollars innew asset inflows. Hundreds of new funds were launched throughout the

1960s until the bear market of 1969 cooled the public appetite for mutualfunds. Money flowed out of mutual funds as quickly as investors couldredeem their shares, but the industry's growth later resumed.Massachusetts Investors Trust (now MFS Investment Management) wasfounded on March 21, 1924, and, after one year, had 200 shareholdersand $392,000 in assets.

The entire industry, which included a few closed-end funds,represented less than $10 million in 1924. The stock market crash of 1929slowed the growth of mutual funds. In response to the stock market crash,Congress passed the Securities Act of 1933 and the Securities Exchange

Act of 1934. These laws require that a fund be registered with the (SEC) .

SETUP OF MUTUAL FUNDS

A mutual fund is set up in the form of a trust, which hassponsor, trustees, Asset Management Company (AMC) and custodian.The trust is established by a sponsor or more than one sponsor who is likepromoter of a company. The trustees of the mutual fund hold its propertyfor the benefit of the unit holders. Asset management company (AMC)approved by SEBI managers the fund by making investments in various

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schemes of the in its custody. The trustees are vested with the generalpower of superintendence and direction over AMC. They monitor theperformance and compliance of SEBI regulations by the mutual fund.

SEBI regulations require that at least two thirds of the directorsof trustee company or board of trustees must be independent i.e., theyshould not be associated with the sponsors. Also, 50% of the directors ofAMC must be independent. All mutual funds are required to be registeredwith SEBI before they launch any scheme. The performance of a particularscheme of a mutual fund is denoted by net value (NAV).

MUTUAL FUND VS OTHER INVESTMENT

Mutual funds offer several advantages over investing in individualstocks. For example, the transaction costs are divided among all themutual fund shareholders, who also benefit by having a third party(professional fund managers), apply expertise and dedicate time tomanage and research investment options. However, despite theprofessional management, mutual funds are not immune to risks. Theyshare the same risks associated with the investments made. If the fundinvests primarily in stocks, it is usually subject to the same ups and downsand risks as the stock market.

SHARE CLASSES

Many mutual funds offer more than one class of shares. Forexample, you may have seen a fund that offers "Class A" and "Class B"shares. Each class will invest in the same pool (or investment portfolio) ofsecurities and will have the same investment objectives and policies. Buteach class will have different shareholder services and/or distribution

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COMPANY PROFILE

HDFC Mutual Funds is one among the several types of

Mutual funds in India and also one of the most popular and largest MutualFunds in India. The HDFC Mutual Fund was introduced in India onDecember 10th, 1999.

The business policy of HDFC Mutual Fund is something thathas attracted several clients for the reason that it has been consistentlyperforming and has offered funds above average for the investors. Thisfund scheme offers reliable and effective analysis policies, based on whichthe investors can invest profitably and need not worry about the marketswings. The HDFC Mutual Funds have solid infrastructure with which a

sound financial analysis is successfully conducted and the research that isdone of the market can be well relied on. This mutual fund also paysemphasis on controlling and managing the risk of the latest market trends.

The success mantra of the HDFC Mutual Fund lies on the factthat it works for the benefit of the investor and at the same time keeping inmind the new market trends. The fund scheme provided to the investorsare offered after doing a sound market research based on which theinvestors are also told about the new growth sectors and the sectors inwhich investing will pay huge benefits after a certain period of time.

The success story of HDFC Mutual Fund is evident from the factthat it has been assigned the "CRISIL Fund House Level-1" rating. Thisrating proves the fact that HDFC Mutual Fund expertise in fundmanagement practice and has the highest level of governance in the fieldof investing and investor's benefit.

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Abstract

HDFC Mutual Fund is governed by HDFC Asset ManagementCompany Limited (AMC). The HDFC mutual fund was approved by SEBI

in June 2000. Equity Funds, Balanced Funds, and Debt Funds are themutual fund schemes offered by HDFC Mutual Fund.

An Overview of HDFC Mutual Fund-

HDFC Mutual Fund has witnessed significant growth in the pastfew years. It is regulated by HDFC Asset Management Company Limited(AMC) which works as an Asset Management Company (AMC) for HDFCMutual Fund. HDFC Asset Management Company Limited (AMC) is aJoint Venture concern between the large-scale housing finance company

HDFC and British investment firm Standard Life Investments Limited.

The HDFC Asset Management Company Limited conducts the activitiescarried out by the HDFC Mutual Fund and manages the assets of variousmutual fund schemes. The August 2006 report states that the fund hasassets of Rs. 25,892 crores under Asset Management Company (AMC).

HDFC Asset Management Company Limited (AMC) entered into anagreement with Zurich Insurance Company (ZIC) with the aim to developthe asset management business in India in the year 2003. Following to

this, all the mutual fund schemes of Zurich Mutual Fund in India gottransferred to HDFC Mutual Fund and gained the name of HDFCschemes.

Details of HDFC Mutual Fund-

HDFC Asset Management Company Ltd (AMC) was set up onDecember 10, 1999 under the Companies Act, 1956. It got the approval tofunction as an Asset Management Company for the HDFC Mutual Fund by

SEBI on June 30, 2000. AMC was appointed in order manage the HDFCMutual Fund. The registered office of HDFC Asset Management CompanyLimited (AMC) is located at Ramon House, 3rd Floor, H.T. Parekh Marg,169, Backbay Reclamation, Churchgate, Mumbai - 400 020.

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HDFC GROUP

The housing development finance corporation (HDFC) wasamongst the first to receive an 'in principle' approval from the ReserveBank of India (RBI) to set up a bank in the private sector, as part of theRBI's liberalisation of the Indian Banking Industry in 1994. The bank wasincorporated in August 1994 in the name of 'HDFC Bank Limited', with itsregistered office in Mumbai, India. HDFC Bank commenced operations asa Scheduled Commercial Bank in january 1995.

HDFC Mutual Fund

HDFC Mutual Fund was setup on June 30, 2000 with two sponsornamely Housing Development Finance Corporation Limited and StandardLife Investments Limited. The Standard Life Assurance Company wasestablished in 1825 and has considerable experience in global financialmarkets. In 1998, Standard Life Investments Limited became thededicated investment management company of the Standard Life Groupand is owned 100% by The Standard Life Assurance Company. Withglobal assets under management of approximately US$126 billion as atMay 15, 2003, Standard Life Investments Limited is one of the world'smajor investment companies and is responsible for investing money on

behalf of five million retail and institutional clients worldwide.The Trustee Company of HDFC Mutual Fund is HDFC Trustee CompanyLimited and AMC is HDFC Asset Management Company Limited,incorporated with the SEBI on December 10,1999. The products of HDFCMutual Fund are as follows:

Equity Funds

Balance Funds

Debt Funds

Apart from this it also provides the following value added services:

SIP (Systematic Investment Plan)

STP (Systematic Transfer Plan)

SWAP (Systematic Withdrawal Advantage Plan)

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HDFC Bank

(NYSE: HDB), one amongst the firsts of the new generation,tech-savvy commercial banks of India, was incorporated in August 1994,after the Reserve Bank of India allowed setting up of Banks in the privatesector. The Bank was promoted by the Housing Development FinanceCorporation Limited, a premier housing finance company (set up in 1977)of India. Net Profit for the year ended March 31, 2006 was Rs. 1,141cores. Results of the latest quarter ended June 2007, indicate that thebank continues to grow in a steady manner. HDFC bank also have thedifferent banking fuction:

Personal banking

Wholesale banking

NRI banking

Branch network:

Currently HDFC Bank has 753 branches, 1,716 ATMs, in 320 cities inIndia, and all branches of the bank are linked on an online real-time basis.The bank offers many innovative products & services to individuals,corporate, trusts, governments, partnerships, financial institutions, mutual

funds, insurance companies. It is the path breaker in the Indian bankingsector.

HDFC PRODUCT RANGE:HDFC Bank India provides theFollowing range of products:

Savings Account

HDFC Bank Preferred

Sweep-In Account

Super Saver Account

HDFC Bank Plus Demat Account

HDFC Mutual Fund

HDFC Standard Life Insurance

HDFC India innovative services

HDFC Phone Banking

HDFC ATM

HDFC Inter-city/Inter-branch Banking

HDFC Net Banking

HDFC International Debit Card

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HDFC Mobile Banking HDFC Bill Pay

HDFC MUTUAL SCHEMES

HDFC Growth fund:Objective: To generate long term capital appreciation from a portfolio thatis predominantly invested equity and equity related instruments.

HDFC Equity fund:Objective: To achieve capital appreciation.

HDFC Top 200 schemes:Objective: To generate long term capital appreciation from a portfolio of

equity and equity related instruments primarily drawn from the companiesin BSE 200index.

HDFC Capital Builder fund:Objective: To achieve capital appreciation in long term.

HDFC Core & Satellite Fund:Objective: To generate capital appreciation through equity investment inCompanies whose shares are quoting at prices below their true value.

HDFC Premier Multi-Cap fund:

Objective: To generate capital appreciation in long term through equityInvestment by investing in a diversify portfolio of Mid Cap and Large Capblue-chip companies.

HDFC Index fund:Objective:Nifty plan: to generate returns those are commensurate with theperformance of nifty, subject to tracking errors.Sensex plan: to generate returns those are commensurate with theperformanceof nifty, subject to tracking errors.Sensex Plus Plan: to invest 80 to 90% of the assets of the plan incompanieswhose securities are included in sensex and between 10 to

20% of the net assetsin companies whose securities are not included in the sensex.

HDFC Arbitrage fund:Objective: To generate income through arbitrage opportunities betweencashand derivative segment and by deployment of surplus cash in debtsecuritiesand money market instruments.

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HDFC Childrens gilt fund:

Objective: To generate long term capital appreciation.

HDFC Balanced fund:Objective: To generate capital appreciation along with current incomefrom combined portfolio of equity, debt and money market instruments.

HDFC Prudence Fund:Objective: To provide periodic returns and capital appreciation over a longPeriod of time from a judicious mix of equity and debt to minimize capitalerosionHDFC Long Term Advantage fund:Objective: To generate long term capital appreciation from a portfolio thatis predominantly invested equity and equity related instruments.

HDFC Tax Saver:Objective: To achieve long term growth of capital.

HDFC MF Monthly Income Plan:Objective: To generate the regular return through investment primarily indebt and money market instruments.

HDFC Multiple Yield Fund:Objective: To generate positive returns over medium time frame with lowrisk of capital loss over medium time frame.HDFC Income Fund:Objective: To optimize returns while maintaining a balance of safety, yieldand Liquidity.

HDFC High Interest Fund (HHIF)Objective: To generate income by investing in a range of debt and moneymarket instruments of various maturity dates with a view to maximize

income with safety, yield and security.HDFC Short Term Plan (STP):Objective: To generate regular income through investment in debtsecurities and money market instruments

HDFC Liquid Fund (HLF):Objective: To enhance income consistent with a high level of liquidity,through a judicious portfolio mix comprising of money market and debtinstruments

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HDFC Cash Management Fund:Objective: Savings and call plan.HDFC Floating Rate Income Fund:

Objective: To generate regular income through investment in a portfoliocomprising substantially of floating rate debt/money market instruments,fixedrate debt/ money market instruments swapped for floating rate returnand fixedrate debt securities and money market instruments.

HDFC Gilt Fund:Objective: To generate credit risk-free return through instruments insovereignsecurities issued by the central government and or a stategovern.

Performance of Mutual Funds in India

Let us start the discussion of the performance of mutualfunds in India from the day the concept of mutual fund took birth in India.The year was 1963. Unit Trust of India invited investors or rather to thosewho believed in savings, to park their money in UTI Mutual Fund. For 30years it goaled without a single second player. Though the 1988 year sawsome new mutual fund companies, but UTI remained in a monopolyposition. The performance of mutual funds in India in the initial phase was

not even closer to satisfactory level. People rarely understood, and ofcourse investing was out of question. But yes, some 24 millionshareholders was accustomed with guaranteed high returns by thebeginning of liberalization of the industry in 1992. This good record of UTIbecame marketing tool for new entrants. The expectations of investorstouched the sky in profitability factor. However, people were miles awayfrom the praparedness of risks factor after the liberalization.

The Assets under Management of UTI was Rs. 67bn. bythe end of 1987. Let me concentrate about the performance of mutualfunds in India through figures. From Rs. 67bn. the Assets underManagement rose to Rs. 470 bn. in March 1993 and the figure had a three

times higher performance by April 2004. It rose as high as Rs. 1,540bn.The performance of mutual funds in India suffered qualitatively. The 1992stock market scandal, the losses by disinvestments and of course the lackof transparent rules in the whereabouts rocked confidence among theinvestors. Partly owing to a relatively weak stock market performance,mutual funds have not yet recovered, with funds trading at an averagediscount of 1020 percent of their net asset value. At last to mention, aslong as mutual fund companies are performing with lower risks and higherprofitability within a short span of time, more and more people will beinclined to invest until and unless they are fully educated with the dos anddonts of mutual fund.

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Asset Management Company

It also reffered to as the investment manager, is a separate companyappointed by the trustees to run the mutual fund. The AMC should have acertificate from sebi to act as portfolio manager under SEBI rules andregulations, 1993.

Custodian:The custodian handles the investment back office operations of a mutualfund. It looks after the receipt and delivery of securities, collection ofincome, distribution of dividends, and segregation of assets betweenschemes. The sponsor of a mutual fund cannot act as its custodian.

Registrars and transfer agents:The registrars and transfer agents handle investor related services suchas issuing units, redeeming units, sending fact sheets and annual reports,and so on. Some funds handle such fuctions in house, while others

outsource it tobSEBI approved registrars and transfer agents like karvyand CAMS.The legal structure and organization of mutual funds as laiddown by SEBI guidelines is as follows.

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CURRENT SCENARIO

MARKET TREND:

A lone UTI with just one scheme in 1964 now competeswith as many as 400 odd products and 34 players in the market. In spite ofthe stiff competition and losing market share, UTI still remains a formidableforce to reckon with. Last six years have been the most turbulent as wellas exiting ones for the industry. New players have come in, while othershave decided to close shop by either selling off or merging with others.Product innovation is now pass with the game shifting to performancedelivery in fund management as well as service. Those directly associatedwith the fund management industry like distributors, registrars and transferagents, and even the regulators have become more mature andresponsible.

The industry is also having a profound impact on financialmarkets. While UTI has always been a dominant player on the bourses aswell as the debt markets, the new generations of private funds which havegained substantial mass are now seen flexing their muscles. Fundmanagers, by their selection criteria for stocks have forced corporategovernance on the industry. By rewarding honest and transparentmanagement with higher valuations, a system of risk-reward has beencreated where the corporate sector is more transparent then before.

Funds have shifted their focus to the recession free sectorslike pharmaceuticals, FMCG and technology sector. Funds performancesare improving. Funds collection, which averaged at less than Rs.100bn per

annum over five-year period spanning 1993-98 doubled to Rs.210bn in1998-99. In the current year mobilization till now have exceededRs.300bn. Total collection for the current financial year ending March 2000IexpectedtoreachRs.450bn.towards mutual funds has become obvious.The coming few years will show that theTraditional saving avenues are losing out in the current scenario. Manyinvestors are realizing that investments in savings accounts are as goodas locking up their deposits in a closet.

The fund mobilization trend by mutual funds in the currentyear indicates that money is going to mutual funds in a big way. The

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collection in the first half of the financial year 1999-2000 matches thewhole of 1998-99.India is at the first stage of a revolution that has already peaked in the U.S.The U.S.boasts of an Asset base that is much higher than its bank

deposits. In India, mutual fund assets are not even 10% of the bankdeposits, but this trend is beginning to change. Recent figures indicate thatin the first quarter of the current fiscal year mutual fund assets went up by115% whereas bank deposits rose by only 17%.

The Financial Express September, 99) this is forcing a largenumber of banks to adopt the concept of narrow banking wherein thedeposits are kept in Gilts and some other assets which improves liquidityand reduces risk. The basic fact lies that banks cannot be ignored andthey will not close down completely. Their role as intermediaries cannot beignored. It is just that Mutual Funds are going to change the way banks dobusiness in the future.

FUTURE OF MUTUAL FUND

Indian mutual fund industry reached Rs 1, 50,537 crore by March 2004. Itis estimated that by 2010 March-end, the total assets of all scheduledcommercial banks should be Rs 40, 90,000 crore. The annual compositerate of growth is expected 13.4% during the rest of the decade. In the last5 years there is an annual growth rate of 9%. According to the current

growth rate, by year 2010,

Mutual fund India assets will be double.

100% growth in the last 6 years. Number of foreign AMC's is in the queue to enter the Indianmarkets like

Fidelity Investments, US based, with over US$1trillion assetsunder manage

Worldwide

Our saving rate is over 23%, highest in the world. Only canalizing

theseSavings in mutual funds sector is required.

We have approximately 29 mutual funds, which is much less thanUS having

More than 800. There is a big scope for expansion.

'B' and 'C' class cities are growing rapidly. Today most of themutual funds are

Concentrating on the 'A' class cities. Soon they will find scope inthe growing

Cities.

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Mutual fund can penetrate rural like the Indian insurance industrywith simple

And limited products.

SEBI allowing the MF's to launch commodity mutual funds.

Emphasis on better corporate governance.

Trying to curb the late trading practices

The asset base will continue to grow at an annual rate of about 30to 35 % over the next few years as investors shift their assets from banksand other traditional avenues. Some of the older public and private sectorplayers will either close shop or be taken over.

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ROLE OF MUTUAL FUND IN STOCK EXCHANGE

Mutual funds are an ideal vehicle for investment by retailinvestors in the stock market for several reasons.

It pools investments of small investors together increasinglythereby the Participation in the stock market.

Mutual funds being institutional investors, can invest in marketanalysis generally not available or accessible to individualinvestors, providing therefore informed decisions to smallinvestors.

Mutual fund can diversify the portfolio in better way as comparedwith individual investors due to the expertise and availability offunds. Mutual funds in India, because of their mall size and slowergrowth in the recent past, have tended to play only a limited role inthe stock market. the share of mutual funds in total turnover of thestock market (BSE+NSE), which was 4.9% in January 2000,

declined to 3.6% by January 2003.

Mutual Funds FAQs:(NAV)

Net Asset Value is the market value of the assets of the schememinus its liabilities. The per unit NAV is the net asset value of the schemedivided by the number of units outstanding on the Valuation Date.

Sale PriceIs the price you pay when you invest in a scheme. Also called Offer Price.

It may include sales load.

Repurchase Price

Is the price at which a close-ended scheme repurchases its units and itmay include aback-end load. This is also called Bid Price.

Redemption Price

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Is the price at which open-ended schemes repurchase their units andclose-ended schemes redeem their units on maturity. Such prices are NAVrelated.

Sales Load

Is a charge collected by a scheme when it sells the units. Also called,Front-end load. Schemes that do not charge a load are called No Loadschemes.

Repurchase or Back-end LoadIs a charge collected by a scheme when it buys back the units from theunit holders?

The objectives of Association of Mutual Funds in India

The Association of Mutual Funds of India works with 30registered AMCs of the country. It has certain defined objectives whichjuxtaposes the guidelines of its Board of Directors. The objectives are asfollows:

This mutual fund association of India maintains a high professional and ethicalStandards in all areas of operation of the industry.

It also recommends and promotes the top class business practices and code ofConduct which is followed by members and related people engaged in theactivities of mutual fund and asset management. The agencies who are byany means connected or involved in the field of capital markets andfinancial services also involved in this code of conduct of the association.

AMFI interacts with SEBI and works according to SEBIs guidelines in the mutualFund industry.

Association of Mutual Fund of India do represent the Government of India, the Reserve Bank of India and other related bodies on mattersrelating to the Mutual Fund Industry.

It develops a team of well qualified and trained Agent distributors. It implementsa programme of training and certification for all intermediaries and otherengagedIn the mutual fund industry.

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AMFI undertakes all India awareness programme for investors in order to promoteProper understanding of the concept and working of mutualfunds.

At last but not the least association of mutual fund of India also disseminate informations on Mutual Fund Industry and undertakes studiesand research either Directly or in association with other bodies.

The sponsor of Association of Mutual Funds in India

Bank Sponsored:

SBI Fund Management Ltd.

BOB Asset Management Co. Ltd.

Canbank Investment Management Services Ltd.

UTI Asset Management Company Pvt. Ltd. Institutions

GIC Asset Management Co. Ltd.

Jeevan Bima Sahayog Asset Management Co. Ltd. Private Sector

Indian

Benchmark Asset Management Co. Pvt. Ltd.

Cholamandalam Asset Management Co. Ltd.

Credit Capital Asset Management Co. Ltd.

Escorts Asset Management Ltd.

JM Financial Mutual Fund

Kotak Mahindra Asset Management Co. Ltd.

Reliance Capital Asset Management Ltd.

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ABOUT SPECIFIC AREA OF THE TOPIC CHOOSEN

Investment management:

Is the professional management of various securities (shares,bonds etc) assets (e.g. real estate), to meet specified investment goals forthe benefit of the investors. Investors maybe institutions (insurancecompanies, pension funds, corporations etc.) or private investors (bothdirectly via investment contracts and more commonly via collectiveinvestment schemes e.g. mutual funds) .The term asset management isoften used to refer to the investment management ofCollective investments, whilst the more generic fund management mayrefer to all forms of institutional investment as well as investmentmanagement for private investors. Investment managers who specialize inadvisory or discretionary management on behalf of (normally wealthy)private investors may often refer to their services as wealth managementor portfolio management often within the context of so-called "privatebanking".

The provision of 'investment management services' includeselements of financial analysis, asset selection, stock selection, planimplementation and ongoing monitoring of investments. Investmentmanagement is a large and important global industry in its own rightresponsible for caretaking of trillions of dollars, euro, pounds and yen.Coming under the remit of financial services many of the world's largestcompanies are at least in part investment managers and employ millionsof staff and create billions in revenue.

Investment managers and portfolio structuresAt the heart of the investment management industry are the

managers who invest and divest client investments. A certified companyinvestment advisor should conduct an assessment of each client'sindividual needs and risk profile. The advisor then recommendsappropriate investments.

ASSET ALLOCATION:

The different asset classes and the exercise of allocating fundsamong these assets (and among individual securities within each assetclass) is what investment management firms are paid for. Asset classes

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exhibit different market dynamics, and different interaction effects; thus,the allocation of monies among asset classes will have a significant effecton the performance of the fund. Some research suggests that allocationamong asset classes has more predictive power than the choice of

individual holdings in determining portfolio return. Arguably, the skill of asuccessful investment manager resides in constructing the assetallocation, and separately the individual holdings, so as to outperformcertain benchmarks (e.g., the peer group of competing funds, bond andstock indices).

LONG TERM RETURN

It is important to look at the evidence on the long-term returns todifferent assets, and to holding period returns (the returns that accrue onaverage over different lengths of investment). For example, over very longholding periods (eg. 10+ years) in most countries, equities have generatedhigher returns than bonds, and bonds have generated higher returns thancash. According to financial theory, this is because equities are riskier(more volatile) than bonds which are they more risky than cash.

DIVERSIFICATION

Against the background of the asset allocation, fund managers

consider the degree of diversification that makes sense for a given client(given its risk preferences) and construct a list of planned holdingsaccordingly. The list will indicate what percentage of the fund should beinvested in each particular stock or bond. The theory of portfoliodiversification was originated by Markowitz and effective diversificationrequires management of the correlation between the asset returns and theliability returns, issues internal to the portfolio (individual holdingsvolatility), and cross-correlations between the returns.

Performance measurement:

Fund performance is the acid test of fund management, and in theinstitutionalContext accurate measurement is a necessity. For that purpose,institutions measure thePerformance of each fund (and usually for internal purposes componentsof each fund)Under their management, and performance is also measured by externalfirms that Specialize in performance measurement. The leadingperformance measurement firms

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(e.g. Frank Russell in the USA) compile aggregate industry data, e.g.,showing how funds in general performed against given indices and peergroups over various time periods.In a typical case (let us say an equity fund), then the calculation would be

made (as far asThe client is concerned) every quarter and would show a percentagechange comparedWith the prior quarter (e.g., +4.3% total return in US dollars).. Generallyspeaking, it is probably appropriate for an investment firm to persuade itsclients to assess performance over longer periods (e.g., 3 to 5 years) tosmooth out very short term fluctuations in performance and the influenceof the business cycle. An enduring problem is whether to measure before-tax or after-tax performance. After-tax measurement represents the benefitto the investor, but investors' tax positions may vary.

RISK ADJUSTED PERFORMANCE:

Performance measurement should not be reduced to theevaluation of fund returns alone, but must also integrate other fundelements that would be of interest to investors, such as the measure ofrisk taken. Several other aspects are also part of performancemeasurement: The need to answer all these questions has led to thedevelopment of more sophisticated performance measures, many of which

originate in modern portfolio theory. Modern portfolio theory establishedthe quantitative link that exists between portfolio risk and return. TheCapital Asset Pricing Model (CAPM) developed by Sharpe (1964)highlighted the notion of rewarding risk and produced the first performanceindicators, be they risk-adjusted ratios (Sharpe ratio, information ratio) ordifferential returns compared to benchmarks (alphas). The Sharpe ratio isthe simplest and best known performance measure. It measures the returnof a portfolio in excess of the risk-free rate, compared to the total risk ofthe portfolio. This measure is said to be absolute, as it does not refer toany benchmark, avoiding drawbacks related to a poor choice ofbenchmark. .Portfolio normal return may be evaluated using factor models.

The first model, proposed by Jensen (1968), relies on the CAPM andexplains portfolio normal returns with the market index as the only factor. Itquickly becomes clear, however, that one factor is not enough to explainthe returns and that other factors have to be considered.

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STUCTURE OF MUTUAL FUND INDUSTRY IN INDIA

MUTUAL FUND INDUSTRY

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Advantages of Investing Mutual Funds

1. Professional Management - The basic advantage of funds is that, they

are professional managed, by well qualified professional. Investors

purchase funds because they do not have the time or the expertise to

manage their own portfolio. A mutual fund is considered to be relatively

less expensive way to make and monitor their investments.

2. Diversification - Purchasing units in a mutual fund instead of buying

individual stocks or bonds, the investors risk is spread out and minimized

up to certain extent. The idea behind diversification is to invest in a large

number of assets so that a loss in any particular investment is minimized

by gains in others.

3. Economies of Scale - Mutual fund buy and sell large amounts ofsecurities at a time, thus help to reducing transaction costs, and help to

bring down the average cost of the unit for their investors.

4. Liquidity - Just like an individual stock, mutual fund also allows

investors to liquidate their holdings as and when they want.

5. Simplicity - Investments in mutual fund is considered to be easy,

compare to other available instruments in the market, and the minimum

investment is small. Most AMC also have automatic purchase plans

whereby as little as Rs. 2000, where SIP start with just Rs.50 per month

basis.

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DATA ANALYSIS AND INTERPRETATION

Analyses the performance of mutual fund with reference to mutual fundindustry.

HDFC Growth Fund:

Nature of the scheme: An open ended growth scheme.Scheme objective: The objectives of the fund is to generate longterm capital

Appreciation from a portfolio that is investedpredominantly in

Equity and equity related instruments.Investment pattern: for new investor Rs.5000 and in multiple

of Rs.100Thereafter. For existing investor Rs.1000 and in

multiples of

Date of launch: 11-09-2000Fund size: Rs.894.707 Crores

NAV per unit as on 31th January 2008

Growth Option: Rs. 68.432

Dividend Option: Rs. 33.714

Benchmark: Sensex

Load structureEntry load: 2.25% for investment of less than Rs,5 cr. Noentry load on

Investment of more than 5 cr.

Exit load/CDSC: 1% on the investment below 5 cr. And redeemedwithin 365 days, and no exit load on the investment of more than 5 cr.

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Portfolio construction as on 31 the January 2008:Asset under management Rs. 894.707 crore

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Performance of fund as on 31 th 2008

Quantitative data

Interpretation:

This fund gave the sharper ratio, 4.006 shows that the fundperforming better during five year history with the total risk of 7.75. byevaluating Treynor ratio the fund gave the return of 30.89 by consideringthe beta value of 1.003 it shows that even though in volatile condition thefund perform well, the Jensen gave the positive return of 8.30 it shows thatactual return is more than benchmark return during 5 year history becauseit is difference between actual and benchmark return.

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HDFC Equity Fund:

Nature of the scheme: An open ended growth scheme.Scheme objective: The objectives of the fund is to generate long termcapital appreciation

Investment pattern: For new investor Rs.5000 and in multiples of Rs.100thereafter.For existing investor Rs.1000 and in multiples of Rs.100thereafter.

Date of launch: 01-01-1995Fund size: Rs.4, 716 Crores




Benchmark: S & P CNX 500

Load structure:Entry load: 2.25% for investment of less than Rs,5 cr. No entry loadon Investment of more than 5 cr.Exit load/CDSC: Nil

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Portfolio construction as on 31 th January 2008:Asset under management Rs. 4,716 crores

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Performance of fund as on 31th January 2008:

Quantitative data

Interpretation:

This fund gave the sharp ratio of 3.74 that is reward of 3.47 withrisk of 7-77% and giving good return to the investor. Tenor ratio gave thevalue of 32.98 means it gave the good return with overcoming market riskof 0.883 and succeed in the performance. The Jensen ratio measure thatfund beat the benchmark return and gave the return of 8.44.

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HDFC Top 200 Fund

Nature of the scheme: An open ended growth scheme.

Scheme objective: The objectives of the fund is to generate long termcapital Appreciation from a portfolio of equity and equity-linked Instrumentsprimarily drawn from the companies in BSE 200 indexInvestment pattern For new investor Rs.5000 and in multiples of Rs.100thereafter for existing investor Rs.1000 and in multiples of Rs.100thereafter.

Date of launch: 11-10-1996

Fund size: Rs.2, 363.26 Crores




Benchmark: BSE Sensex

Load structure

Entry load: 2.25% for investment of less than Rs,5 cr. No entry load onInvestment of more than 5 cr.

Exit load/CDSC: 1% on the investment below 5 cr. And redeemedwithin 365 days,

And no exit load on the investment of more than 5 cr.

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Portfolio construction as on 31 th January 2008:Asset under management Rs. 2,363.26 crores:

Performance of fund as on 31 th January 2008

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Quantitative data

Interpretation:

This fund perform well and gave the sharp value of 4.11 byconsidering total risk and tenor ratio shows that the fund succeed inovercoming market risk and gave return of 43.43% and Jensen gavepositive return 8.22 means that fund beat the benchmark return in its fiveyear history.

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HDFC Capital Builder Fund

Nature of the scheme: An open ended growth scheme.

Scheme objective: The objectives of the fund is to generate long termcapital appreciation in long term

Investment pattern: for new investor Rs.5000 and in multiples of Rs.100there for existing investor Rs.1000 and in multiples of Rs.100 thereafter.Date of launch: 01-02-1994

Fund size: Rs.750.63 Crores




Benchmark: S & P CNX 500

Load structure

Entry load: 2.25% for investment of less than Rs,5 cr. No entry load

on Investment of more than 5 cr.

Exit load/CDSC: Nil

Portfolio construction as on 31 th January 2008:Asset under management Rs.2, 363.26 crores:

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Performance of fund as on 31 th January2008

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Quantitative data

Interpretation:

This fund able to compensate the risk and possible of giving return of4.29, tenor gave the return of 33.17% with considering market risk of0.8708 and able to beat the market risk. Jensen gave the value of 9.20shows that the fund beat the benchmark return and gave the good returnto the investors.

HDFC Index Fund :( Sensex plan):

Nature of the scheme: An open ended index linked scheme.

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Scheme objective: The objectives of the fund are to generate returnsthat are commensurate with the performance of the sensex, subject totracking record.Investment pattern: for new investor Rs.5000 and in multiples of Rs.100

thereafter.for existing investor Rs.1000 and in multiples of Rs.100thereafter.

Date of launch: 17-07-2002

Fund size: Rs.78.02 Crores



Benchmark: Sensex

Load structure

Entry load: Nil

Exit load/CDSC: 1% on the investment below 5 cr. And redeemed within365 days, and no exit load on the investment of more than 5 cr.

Portfolio construction as on 31 th January 2008:Asset under management Rs. 78.02 crores:

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Quantitative data

Interpretation:

This fund able to compensate the risk and possible to give thereturn of 2.6. Treynor gave the normal return of 22.45 with beta of 0.949by considering Jensen ratio we come to know that the fund has notperformed well during five year of history which gave the ve value of-10.69.

HDFC Index Plan (Nifty Plan)

Nature of the scheme: An open ended index linked scheme.

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Scheme objective: The objectives of the fund are to generate returnsthat are commensurate with the performance of the nifty subject totracking record.

Investment pattern: for new investor Rs.5000 and in multiples of Rs.100thereafter. For existing investor Rs.1000 and in multiples of Rs.100thereafter.Date of launch: 17-07-2002

Fund size: Rs.49.42 crores



Benchmark: S & P CNX Nifty

Load structure

Entry load: Nil

Exit load/CDSC: 1% on the investment below 5 cr. And redeemedwithin 365 days, And no exit load on the investment of more than 5 cr.

Portfolio construction as on 31 th January 2008Asset under management Rs. 49.42 crores

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Quantitative data

Interpretation:

This fund gave the return of 2.45% with risk of 7.98, the fund notable to provide better return to the investor, by comparing the tenor ratiothis fund gave the normal return of 23.06 with beta of 0.894. Jensen ratioprovide that the fund performing well and not so good and it gave thenegative value of -2.49

CONCLUSION

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Mutual fund is booming sector now a days and it has lot ofscope to generate income and providing return to the investor, the mutualfund is one of the way to development of country 113and helps tomobilizing dead money in the economy which helps to develop the

economic conditions of the country and people. Mutual fund helps thepeople for studying the market conditions, it providing lot of opportunitiesto the people for research work and helps the people to know the newthings going on around the world. It gave the more knowledge to theperson, because it diversifies the risk by investing in different securities.

Last few year have been peppered with sc scam in the financialsector (UTI-US64 fiasco, price rigging by ketan parekh in the stock marketalong with the people from responsible position acting as hand in glovewith him. The home trade scam where Mr. Sanjay arawal exposed theloopholes in the risk management system of a co-operative bank andduped Nagpur central co-op bank ltd. By an amount in excess ofRs100crore) the wtc attack by bin laden also sent the world economy onthe brink of a disaster

All these factor have led to a situation where a retail investor isgetting about the safely of the prevailing investment sector available in themarket. The government has come into the picture and has launched anumber of moves to cleanse the financial sector in the economy.

It is precisely for this reason that it is felt that mutual funds wouldplay an increasingly important role in the portfolio of a retail investor. In thecurrent scenario of mutual fund HDFC mutual funds also playing animportant role in the Indian mutual industry with their professionalmanagement and their scheme with less market risk and high return whichis suitable for salaried individual that could match individual risk profile.

SUGGESSTIONS

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Following are the suggestions for the both funds.

The fund house has to reduce the total risk involved in the fund inorder to increase the return with good portfolio construction.

The fund house should select the innovative way of portfolioconstruction and should see the attracting areas of investing funds.

The fund houses should concentrate on the market conditionsaccording to that they have to set the benchmark and invest indifferent sectors.

The fund houses should invest in good and attracting sectors toreduce standard Deviation.

The fund house should try to reduce little more betas in order togenerate more returns to investors.

HDFC fund house gave the good return it showed by sharp ratioeven though have to reduce the total risk by diversifying theirportfolio and achieving aim.

The HDFC investing in diversifies areas but not in upcoming areaslike real estate and infrastructure better to invest in those areas toincrease return.

HDFC still it has to reduce the standard deviation to generate morereturn by reducing total risk factors associating with mutual funds,and analyses all the factors.

HDFC has to concentrate on those funds which are performing lessthan theirBenchmark return and take actions and analyze the marketconditions.

Mutual Fund Hdfc

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