INDEX

S.NO. Contents Page No.

1 Preface 2
2 Introduction To Topic 3
3 Introduction to Companies 5
4 Review of literature 10
5 Need/Scope of Study 11
6 0bjective of the study 12
7 Research Methodology 13
8 Analysis 15
9 Findings 26
10 Limitations 27
11 Recommendations 28
12 29
Conclusion
13 30
Bibliography

PREFACE
Many individuals own mutual funds today. Indeed, the mutual fund industry

which reached $3.64 trillion in assets by 2009,comprises the bulk of many

investors financial assets, whether for retirement or taxable savings purposes .To a

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 large extent, mutual funds are the investment vehicle for the majority of house

holds in the India.

In the introductory chapter, I have consider the role of mutual fund in todays

investing environment, learn just how popular mutual funds have become and

consider why investors have chosen to put so much money into funds. Clearly,

mutual funds are a major financial asset for numerous investors, and in many

ways they play the dominant role in todays investing world for millions of house

holds.

I have also told about the basics of mutual funds, defining terms and discussing

the mechanics about how funds work. I have also considered other alternatives .I

have mainly focused up on the study that which companys mutual investments

are mostly preferable by investors. Today investors are becoming rational & they

see all the parameters before investing .I had also reviewed the types of mutual

funds, structure of mutual funds and their current scenario.

The over all objective of my study on this project is to know which company

provides better investment opportunities from HDFC & ICICI and make the

investors to be able to take better decisions .Of course, as every study needs, Id

adopted an objective view of over all situation that examines both sides of the

issue situated in HDFC &ICICI.

Introduction to topic

What is mean by mutual fund?

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Mutual funds are pools of money that are managed by an investment company. They

offer investors a variety of goals, depending on the fund and its investment charter. Some

funds, for example, seek to generate income on a regular basis. Others seek to preserve an

investor's money. Still others seek to invest in companies that are growing at a rapid pace.

Funds can impose a sales charge, or load, on investors when they buy or sell shares.

Many funds these days are no load and impose no sales charge. Mutual funds are

investment companies regulated by the Investment Company Act of 1940. Related: open-

end fund, closed-end fund.

Concept of mutual funds

A mutual fund is a trust that pools the savings of a no. 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 appreciations realized 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 diversified,

professionally managed basket of securities at a relatively low cost.

Historical Aspect

Mutual fund firstly was established in 1822 in the form of Society General De

Belguique. It mainly gains the progress in Switzerland & little in franc and Germany in

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its initial days. The first investment trust The foreign and colonial govt. trust Was

founded in London in 1868.

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.

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 Types of
Mutual Fund

Structure Investment Special schemes

Index schemes
Close Income

Internal Balanced Sector schemes

Money Market

Advantages of Mutual Funds

Diversification.

Professional Management.

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 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.

Management Risk.

Introduction to Companies

6
 HDFC Mutual Fund

HDFC mutual fund was set up on June 30, 2000 with two sponsors namely Housing

Development Finance Corporation ltd. and Standard Life Insurance ltd. HDFC mutual

fund came into existence on 10 Dec. 1999 and got approval from the SEBI on 3rd July

2000.

Housing Development Finance Corporation Limited, more popularly known as

HDFC Bank Ltd, was established in the year 1994, as a part of the liberalization of

the Indian Banking Industry by Reserve Bank of India (RBI). It was one of the first

banks to receive an 'in principle' approval from RBI, for setting up a bank in the

private sector. The bank was incorporated with the name 'HDFC Bank Limited', with

its registered office in Mumbai. The following year, it started its operations as a

Scheduled Commercial Bank. Today, the bank boasts of as many as 1412 branches

and over 3275 ATMs across India.

Products and Schemes of HDFC mutual fund

Equity funds.

Balanced funds.

Debt funds.

Liquid funds.

Prudential ICICI Mutual Fund

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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 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), thereby 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

Products and Schemes of HDFC mutual fund

Equity funds.

Balanced funds.

Debt funds.

Liquid funds.

Childrens gift fund

Other Players in Mutual Fund

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 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.

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 Review of Literature
OMPANY PROFILE
ICICI Bank is India's second-largest bank with total assets of about Rs. 1

trillion and a network of about 540 branches and offices and over 1,000

ATMs. ICICI Bank offers a wide range of banking products and financial

services to corporate and retail customers through a variety of delivery

channels and through its specialized subsidiaries and affiliates in the areas

of investment banking, life and non-Banking , venture capital, asset

management and information technology. ICICI Bank's equity shares are

listed in India on stock exchanges at Chennai, Muzaffarnagar, Kolkata and

Vadodara, the Stock Exchange, Mumbai and the National Stock Exchange

of India Limited and its American Depositary Receipts (ADRs) are listed on

the New York Stock Exchange (NYSE).

HDFC Banks exposure to market risk a function of its trading and asset

and liability management activities and its role as a financial intermediary

in customer-related transactions. HDFC had tried its best in mutual fund sector. It has

grown up its market share in a meanwhile time. The objective of market risk management

is to minimize the impact of losses due to market risks on earning and equity capital.

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 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.

Scope of the study

To make people aware about concept of mutual fund.

To provide information regarding advantages and demerits of mutual fund.

To advice where to invest or not to invest.

To provide information regarding types of mutual fund which is beneficial for

whom.

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 Objectives
To analysis which provides better returns from HDFC &ICICI.

To analyze the concept and parameters of mutual fund.

To know how many people are satisfied by their investment (in HDFC or ICICI).

To know people behavior regarding risk factor involved in mutual fund.

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 Research Methodology

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:-

Research Design

1. 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.

2. Literature Survey:

I have used newspapers, magazines related to business & finance & apart from websites.

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.

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 3. Data collection Design:
Sources of data

Primary Sources I have used questionnaire as primary source for collecting data for my

study.

Secondary sources I had collected my secondary data from websites & journals.

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.

Tools

I have used some charts (Pie chart, column chart, cylinder chart, cone chart)

a) 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 100 candidates.

b) Sampling Techniques

Deliberate & Convenience Sampling.

c) Data Interpretation =

Data interpretation is that in which we analysis the whole collected data & tries to give it

in simple words to be understandable.

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 Analysis

1. Do you invest in mutual fund?

YES 100

NO 0

120
100
100

80

60 YES NO

40

20

0
Interpretation
All the candidates who are asked to fill the questionnaire have invested in mutual fund.

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

HDFC 65
ICICI 35
Reliance 0
SBI 0
LIC 0
Kotak Mahindra 0
Others 0

70 65

60

50

40 35
HDFC ICICI Reliance SBI LIC Kotak Mahindra Others
30

20

10

0
0 0 0 0 0

Interpretation
Out of 100 candidates up to 65have invested in mutual fund with HDFC & 35 have

invested with ICICI. There is no investor who have invested in mutual fund with any

another company.

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 3. What is your age?
.
8
15-25
25-35 12

35-45 60

More than 45 20

60
60

50

40
15-25 25-35 35-45 More than 45
30
20
20 12
8
10

Interpretation
60 investors are of age between 35-45. 20 are of age more than 45. 12 are of between of

25-35. 8 are of 15-25. This data shows that many investors are of middle age & there are

less investors of young age in mutual fund.

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 4. What is your income? (Yearly based)

1 lakh 0

2-4 lakh 10

4-5 lakh 20

More than 5 70

70
70

60

50

40 1 lakh 2-4 lakh 4-5 lakh More than 5

30
20
20
10
10

0
0

Interpretation
Up to 70 investors have income more than 5 lakh. 20 have between 4-5 lakh.10 investors

have income between 2-4 lakh & there is no investor who have income up to 1akh.

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 5. From where you come to know about this companys mutual
fund schemes?
Family & relatives 35

Friends & peers 40

Company employee 15

Others 10

40

40 35

35
Family & relatives
30 Friends & peers Company employee Others

25

20 15

15 10

10

Interpretation
Many investors (up to 40) have been come to know about the company to be invested by

their friends & peers.35 have been known by their family & relatives .15have been come

to know by company employees & 10 by others. This means many have come to know

by their friends & peers.

6. What is the time duration of your investment?

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0-1 year 15

1-2 year 35

2-4year 30

more than 4 20

35
35 30
30

25 20
20 0-1 year 15 1-2 year 2-4year more than 4

15

10

0
Interpretation
15 investors have time of investment less than one year. 20 have time duration of their

investment between of 1-2 year. 30 have between 2-4 year & 35 have more than 4 years.

So, we can say that 35 investors have more experience than others.

7. Are you satisfied by service of the companys employees /

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Highly satisfied 15

Satisfied 35

Neutral 30

Dissatisfied 15

Highly Dissatisfied 5

35
35 30
30
Highly satisfied Satisfied Neutral Dissatisfied
25

20 15 15
15

10 Highly Dissatisfied 5
5

0
Response

Interpretation
Out of 100 investors 15 are highly satisfied. 35 are satisfied. 30 are neutral towards

employee behavior of a company. 15 are dissatisfied. 5 are highly dissatisfied. We say

that many people are satisfied by employee behavior.

8. What is your risk profile?

Moderate 65
21

Risk adverse 15
 65
70

60

50

40

30
20
15
20

10

0
Innovator Moderate Risk adverse

Interpretation
20% investors are innovator means they like to take risk for more returns. 15% are

moderate towards risk means they are indifferent towards risk. 65% are risk adverse

means they mainly try to avoid risk.

9. What you feel about the company norms, documentation &

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Highly Satisfied 15

Satisfied 25

Neutral 40

Dissatisfied 15

Highly dissatisfied 5

5% Highly Satisfied
15%
15%
Satisfied

Neutral
25%
Dissatisfied

40% Highly
Dissatisfied

Interpretation
15% investors are highly satisfied by companys documentation policy (filling up the

forms etc.). 25% are satisfied, 40% never cares about it or are moderate towards it , 15%

are dissatisfied by it & 5% are highly dissatisfied.

10. What you say which provides better returns?

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 HDFC 68

ICICI 32

68

70

60

50

32
40 HDFC ICICI

30

20

10

Interpretation

According to collected data 68 investors thinks that HDFC provides better returns where

as 32 to think that ICICI provides better returns.

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

Yes 15

No 85

85
90

80

70

60
Yes No
50

40

30
15
20

10

Interpretation

15 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

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In my research I have founded following things:-

d) Investors have more faith HDFCs mutual fund.

e) As the age increases investors are much satisfied, see more risk & become more

risk adverse.

f) Old people &Widows prefer lower risk.

g) Investors are not highly satisfied by company rules & employee behavior.

h) Investors think that HDFC provides better returns than ICICI.

Limitations

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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.

Recommendations / Suggestions
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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

Conclusion
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 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 invested in mutual fund have invested with

HDFC and them also thinks that it provides better returns than ICICI .There is also an

affect of age on mutual fund investors like; 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.

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 Bibliography
Books:-

C.R.Kothari, Research Methodology. Vikas Publishing house Pvt.Ltd.2007.

ICICI and HDFC Brochure .

Websites:-

www.wiki.answers.com

www.hdfc.com

www.icici.com

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