THEORETICAL FRAME WORK

MEANING
A mutual fund is a type of financial vehicle made up of a pool of money collected from many
investors to invest in securities like stocks, bonds, money market instruments, and other
assets. Mutual funds are operated by professional money managers who allocate the fund's
assets and attempt to produce capital gains or income for the fund's investors. A mutual
fund's portfolio is structured and maintained to match the investment objectives stated in its
prospectus.

Mutual funds give small or individual investors access to professionally managed portfolios
of equities, bonds, and other securities. Each shareholder, therefore, participates
proportionally in the gains or losses of the fund. Mutual funds invest in a vast number of
securities, and performance is usually tracked as the change in the total market cap of the
fund derived by the aggregating performance of the underlying investments.

DEFINITION
 A mutual fund is a professionally-managed investment scheme, usually run by an asset
management company that brings together a group of people and invests their money in
stocks, bonds and other securities.

Mutual fund will give return in three ways:

 Income is earned from dividends on stocks and interest on bonds. A fund pays nearly
all out of the income.
 If the fund sells securities that have increased in price, the fund has a capital gain.
Most funs also pass on these gains to investors in a distribution.
 If fund holdings increase in price but are not sold by the fund manager, the fuds’s
shares increase in price. You can sell your mutual fund shares for a profit.

Description

 As an investor, you can buy mutual fund 'units', which basically represent your share of
holdings in a particular scheme. These units can be purchased or redeemed as needed at the
fund's current net asset value (NAV). These NAVs keep fluctuating, according to the fund's
holdings. So, each investor participates proportionally in the gain or loss of the fund.

All the mutual funds are registered with SEBI. They function within the provisions of strict
regulation created to protect the interests of the investor.

The biggest advantage of investing through a mutual fund is that it gives small investor
access to professionally-managed, diversified portfolios of equities, bonds and other
securities, which would be quite difficult to create with a small amount of capital.
Importance of Mutual Funds
Mutual funds provide a host of benefits which make them important. Let’s look at the

importance of mutual funds as listed below.

Convenience: 

For investors, one of the most prominent benefits that mutual funds provide is convenience.

By investing in a single fund, they can gain access to a broad range of the financial market. A

typical diversified equity fund can spread out the money across tens of stocks with some

portion invested in fixed income securities as well.

Diversification:

Further, if an investor wants to focus on one segment of the market, for instance, large-cap

stocks, funds focused on this segment can spread out the investment across multiple large-cap

stocks in just one transaction of purchasing the fund. If the investor were to try to do that

themselves, it would take a lot of effort, transaction cost, and time to create an individual

large-cap stock portfolio. The situation with investing in bonds is even more difficult if one

tries to do it individually rather than taking the fund route.

Ease of Investment:
Apart from this, mutual funds are easy to buy and sell. One can either engage the services of

a distributor or agent to transact in funds or do it over the internet themselves. In the case of

latter, the transaction amount is debited from or comes directly to the bank account linked to

the mutual fund account depending on whether a fund has been bought or sold.

Spoilt For Choice:

This feature follows from the convenience aspect discussed above. Investors have several

choices when it comes to mutual funds. And given their investment objectives, funds provide

access to a wide range of financial instruments, sectors, and strategies.

Professional Management:

This is one of the factors, which is a key highlight of the importance of mutual funds. Due to

lack of expertise several investors don’t have the confidence in taking the financial market

route to grow their wealth. They feel they have limited or no capability to invest in stocks and

bonds on their own and do not have the time to keep tracking their investments even if they

manage to invest on their own.

Mutual funds take care of this issue by providing the expertise of the fund manager and their

team of analysts, which perform the analysis of financial markets and instruments on a daily

basis. They charge a fee for their professional services, which are bundled into the expense

ratio of a mutual fund.

Some fund managers also invest in the same fund(s) that they manage, thus making them

accountable for their performance; they have a stake in the fund doing well. This expertise

and experience in money management make mutual funds a great vehicle for investors.

This assumes a lot of importance for investors as by investing minimal time and energy, they

can add a variety of instruments to their investment portfolio.

They Provide Portfolio Diversification:

Importance of mutual funds is not limited to just ample choice; while providing a vast array

of choices, equity mutual funds also spread across their assets across various sectors and

industries. If the fund is diversified, it also spreads its assets across market capitalizations.

Apart from this, equity funds can invest some portion of their assets in bonds as well. This

spreading out of assets is the basic concept underlying diversification.

Portfolio diversification can be achieved by buying individual securities as well. But with a

limited corpus to invest, there are only so many stocks and bonds that an investor can buy

more so, there may be some bonds which may be out of reach of investors as the ticket size of

a single purchase is very high. Meanwhile, mutual funds provide instant diversification.
HDFC Mutual Fund

HDFC Asset Management Company Ltd. or HDFC Mutual Fund is currently the largest
mutual fund and actively managed equity mutual fund in India. It is the most profitable
asset management company (AMC) in the country as of 31 March, 2018. The company
manages assets worth Rs. 3.43 Lakh Crore as of 31 March 2019.

According to SEBI, its net worth stood at Rs. 61,402 Crore, total income at Rs. 35,229
Crore, profit (after tax) at Rs. 12,163 Crore in March 2018.

During FY 2018-19, the AMC reported a increase in profit of 61%. They registered a
profit of Rs. 930 Crore in March 2019, a 31% growth. For the March 2019 quarter alone,
their profits stood at Rs. 276 Crore.

HDFC AMC recorded a 16.2% market share in the actively-managed equity oriented
schemes in FY 2018-19.

In the last 5 years, the CAGR of:

 Revenue from operators was 17.41%.

 Operating profit was 20.08%.

 Profit before tax was 21.35%.

 Profit after tax was 21.07%.

 An asset under management (AuM) was 25.86%.

 Active equity AuM was 32.27%.

The company has around 210 branches located in more than 200 cities around India. It has
53 Lakh investors with 91 Lakh live accounts.

HDFC Asset Management Company Ltd. received approval to act as an AMC from SEBI
back in 30 June 2000 under the registration number MF/044/00/6. It also offers portfolio
management/non-binding investment advisory services since 18 September 2016 under the
registration code PM /INP000000506 from SEBI.
How can you invest in HDFC Mutual Funds?

Investing in HDFC Bank Mutual Fund online is a convenient process and you can do so by
following the few simple steps mentioned below:

 Log-in to your Grow account or register if you don’t have one.

 Upload your identity proof documents (Aadhar, Voter ID, PAN, Passport, Driving
License, Central or State Government ID card, etc.)

 . Upload your proof of address documents (any identity proof documents with your
permanent address, etc.)

 Select the investment period of your preference.

 Choose your risk appetite - low, mid, or high.

 Choose your preferred HDFC Bank Mutual Fund.

 Click on “Invest One Time” if you want to invest a lump sum amount or “Start
SIP” if you want to invest via SIP.

The HDFC Mutual Fund in India you have invested in will show in your Grow account
within 3 to 4 working days.

HDFC Credit Risk Debt Fund Direct Growth

Fund Performance: This fund has consistently performed above the benchmark in

Credit Risk segment. It has given a commendable 7.75% annual returns in the last
three years. In the previous year, it delivered 9.63% returns.

Why to invest: This fund has performed better than other funds in the same category.
The minimum SIP investment amount required to invest in this scheme is ₹500. It is
one of most notable Debt mutual funds in India.
HDFC Retirement Savings Fund Hybrid Debt Plan Direct Growth

Fund Performance: This fund has consistently performed above the benchmark in

Retirement segment. It has given a commendable 6.06% annual returns in the last three
years. In the previous year, it delivered 5.44% returns.

Why to invest: This fund has performed better than other funds in the same category. The
minimum SIP investment amount required to invest in this scheme is ₹500. It is one of
most notable Solution Oriented mutual funds in India.

Min Investment Amt ₹5,000

AUM ₹82Cr

1Y Returns 5.4%

HDFC Index Sensex Direct Plan Growth

Fund Performance: This fund has consistently performed above the benchmark in Index
segment. It has given a commendable 5.85% annual returns in the last three years. In the
previous year, it delivered -5.54% returns.

Why to invest: This fund has performed better than other funds in the same category. The
minimum SIP investment amount required to invest in this scheme is ₹500. It is one of
most notable Equity mutual funds in India.

Min Investment Amt ₹5,000

AUM ₹1,349Cr

1Y Returns -5.5%
HDFC Dynamic PE Ratio Fund of Funds Direct Growth

Fund Performance: This fund has consistently performed above the benchmark in of

Domestic segment. It has given a commendable 3.23% annual returns in the last three
years. In the previous year, it delivered -0.77% returns.

Why to invest: This fund has performed better than other funds in the same category. The
minimum SIP investment amount required to invest in this scheme is ₹500. It is one of
most notable others mutual funds in India.

Min Investment Amt ₹5,000

AUM ₹17Cr

1Y Returns -0.8%

HDFC Medium Term Debt Fund Direct Plan Growth

Fund Performance: This fund has consistently performed above the benchmark in Medium
Duration segment. It has given a commendable 8.11% annual returns in the last three
years. In the previous year, it delivered 9.57% returns.

Why to invest: This fund has performed better than other funds in the same category. The
minimum SIP investment amount required to invest in this scheme is ₹500. It is one of
most notable Debt mutual funds in India.

Min Investment Amt ₹5,000

AUM ₹933Cr

1Y Returns 9.6%
HDFC Balanced Advantage Fund Direct Plan Growth

Fund Performance: This fund has consistently performed above the benchmark in

Balanced Advantage segment. It has given a commendable 0.11% annual return in the last
three years. In the previous year, it delivered -12.98% returns.

Why to invest: This fund has performed better than other funds in the same category. The
minimum SIP investment amount required to invest in this scheme is ₹500. It is one of
most notable Hybrid mutual funds in India.

Min Investment Amt ₹5,000

AUM ₹35,429Cr

1Y Returns -13.0%

HDFC Small Cap Fund Direct Growth

Fund Performance: This fund has consistently performed above the benchmark in Small
Cap segment. It has given a commendable -3.31% annual returns in the last three years. In
the previous year, it delivered -19.25% returns.

Why to invest: This fund has performed better than other funds in the same category. The
minimum SIP investment amount required to invest in this scheme is ₹500. It is one of
most notable Equity mutual funds in India.

Min Investment Amt ₹5,000

AUM ₹7,511Cr

1Y Returns -19.3%
HDFC Corporate Bond Fund Direct Plan Growth

Fund Performance: This fund has consistently performed above the benchmark in

Corporate Bond segment. It has given a commendable 9.24% annual returns in the last
three years. In the previous year, it delivered 12.34% returns.

Why to invest: This fund has performed better than other funds in the same category. The
minimum SIP investment amount required to invest in this scheme is ₹500. It is one of
most notable Debt mutual funds in India.

Min Investment Amt ₹5,000

AUM ₹18,360Cr

1Y Returns 12.3%

HDFC Multi Asset Fund Direct Growth

Fund Performance: This fund has consistently performed above the benchmark in Multi
Asset Allocation segment. It has given a commendable 4.37% annual returns in the last
three years. In the previous year, it delivered 4.02% returns.

Why to invest: This fund has performed better than other funds in the same category. The
minimum SIP investment amount required to invest in this scheme is ₹500. It is one of
most notable Hybrid mutual funds in India.

Min Investment Amt ₹5,000

AUM ₹238Cr

1Y Returns 4.0%
HDFC Money Market Fund Direct Plan Growth

Fund Performance: This fund has consistently performed above the benchmark in Money
Market segment. It has given a commendable 7.9% annual returns in the last three years.
In the previous year, it delivered 8.43% returns.

Why to invest: This fund has performed better than other funds in the same category. The
minimum SIP investment amount required to invest in this scheme is ₹500. It is one of
most notable Debt mutual funds in India.

Min Investment Amt ₹5,000

AUM ₹8,422Cr

1Y Returns 8.4%

HDFC Short Term Debt Fund Direct Plan Growth

Fund Performance: This fund has consistently performed above the benchmark in Short
Duration segment. It has given a commendable 9.02% annual returns in the last three
years. In the previous year, it delivered 12.08% returns.

Why to invest: This fund has performed better than other funds in the same category. The
minimum SIP investment amount required to invest in this scheme is ₹500. It is one of
most notable Debt mutual funds in India.

Min Investment Amt ₹5,000

AUM ₹11,138Cr

1Y Returns 12.1%
HDFC Retirement Savings Fund Hybrid Equity Plan Direct Growth

Fund Performance: This fund has consistently performed above the benchmark in

Retirement segment. It has given a commendable 4.62% annual returns in the last three
years. In the previous year, it delivered -2.26% returns.

Why to invest: This fund has performed better than other funds in the same category. The
minimum SIP investment amount required to invest in this scheme is ₹500. It is one of
most notable Solution Oriented mutual funds in India.

Min Investment Amt ₹5,000

AUM ₹395Cr

1Y Returns -2.3%

HDFC Gold Direct Plan Growth

Fund Performance: This fund has consistently performed above the benchmark in

Domestic segment. It has given a commendable 19.38% annual returns in the last three
years. In the previous year, it delivered 41.07% returns.

Why to invest: This fund has performed better than other funds in the same category. The
minimum SIP investment amount required to invest in this scheme is ₹500. It is one of
most notable Fund of Funds mutual funds in India.

Min Investment Amt ₹5,000

AUM ₹663Cr

1Y Returns 41.1%
HDFC Equity Savings Direct Plan Growth

Fund Performance: This fund has consistently performed above the benchmark in Equity
Savings segment. It has given a commendable 3.58% annual returns in the last three years.
In the previous year, it delivered -1.92% returns.

Why to invest: This fund has performed better than other funds in the same category. The
minimum SIP investment amount required to invest in this scheme is ₹500. It is one of
most notable Hybrid mutual funds in India.

Min Investment Amt ₹5,000

AUM ₹3,141Cr

1Y Returns -1.9%

HDFC Hybrid Equity Fund Direct Plan Growth

Fund Performance: This fund has consistently performed above the benchmark in

Aggressive segment. It has given a commendable 2.01% annual returns in the last three
years. In the previous year, it delivered -6.45% returns.

Why to invest: This fund has performed better than other funds in the same category. The
minimum SIP investment amount required to invest in this scheme is ₹500. It is one of
most notable Hybrid mutual funds in India.

OVERVIEW
We are one of India’s largest and most profitable mutual fund manager with ₹3.2trillion in
assets under management. Started in 1999, we were set up as a joint venture between
Housing Development Finance Corporation Limited (“HDFC”) and Standard Life
Investments Limited (“SLI”). During FY18-19 we carried out an initial public offering, and
became a publicly listed company in August 2018. Currently, 20% of the company is owned
by the public. HDFC Asset Management Company (“HDFC AMC”) is the investment
manager to the schemes of HDFC Mutual Fund (“HDFC MF”).
We offer a comprehensive suite of savings and investment products across asset classes,
which provide income and wealth creation opportunities to our large retail and institutional
customer base of 9.4 million live accounts. We have a dominant position in equity
investments, with the highest market share in actively managed equity-oriented funds. Our
strengths lie in delivering simple and accessible investment products for the average Indian
household. We are the most preferred choice for retail investors, with the highest market
share in assets from individual investors. Over one in four Indian mutual fund investors have
invested in at least one of our schemes. Our offering of systematic transactions further
enhances our appeal to individual customers looking to invest periodically in a disciplined
and risk-mitigating manner. Our schemes have weathered multiple market cycles and carry
track records of up to 25 years. We work with diverse sets of distribution partners which
helps us expand our reach. We currently have over 70 thousand empanelled distributors
which include independent financial advisors, national distributors and banks. We serve our
customers and distribution partners in over 200 cities through our network of 221 branches
and 1,194 employees. Our highly stable Management has steered the company since its
inception through the ever-evolving industry. Our consistent position as one of India’s
leading asset management companies is driven by our comprehensive investment philosophy,
process and risk management. Our 26 member investment team is highly experienced and
competent with a track record of performance, stability and a deep understanding of
businesses. We also provide portfolio management and segregated account services,
including discretionary, non-discretionary and advisory services, to high net worth
individuals (“HNIs”), family offices, domestic corporate, trusts, provident funds and
domestic and global institutions.

About HDFC Group: Our company is part of HDFC Group, a recognized financial
conglomerate, with presence in housing finance, banking, life and non-life insurance, asset
management, real estate funds and education finance. HDFC Ltd is one of India’s leading
housing finance companies and our majority shareholder.
All data is as on 31-Mar-2020 unless otherwise stated.

HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (HDFC Ltd.) Our

principal shareholders include Housing Development Finance Corporation Limited (HDFC)
and Standard Life Investments Limited (“SLI”) who own 52.7% and 26.9% stake
respectively. HDFC was incorporated in 1977 as a specialised mortgage finance company
and is today a financial conglomerate having a dominant presence in housing finance,
banking, life and non-life insurance, asset management, real estate funds and education
finance.
 4. CHAPTER
DATA ANALYSIS AND INTERPRETATION
MUTUAL FUND ANALYSISOF RETURND:

PERFORMANCE OF MUTUAL FUNDS IN HDFC LTD IN CR

YEAR INDEX CHANGE IN PERCENTAGE

MUTUAL FUND
CHANGE (%)

2014 9397 2795 42.34

2015 1786 4389 46.70

2016 13908 4122 40.88

2017 20323 6415 41.57

2018 19426.71 1896.29 42.90

 percantage change in mutual fund
48

46

44

percantage
42

40

38

36
2014 2015 2016 2017 2018
 CHAPTER -5
FINDINGS, SUGGESTIONS
&
CONCLUSION
FINDINGS

1. Investors want long term investment .i.e. approximately 80% investors would like to
invest for 1 year or more.
2. I also found that HDFC BANK LTD has good market reputation.
3. Apart from mutual funds, HDFC BANK LTD. provides other financial products
under one roof. Products include insurance, personal loan, portfolio management
services, bonds, fixed deposits, etc.
4. Pan card has been made mandatory by the govt. In mutual funds
5. Professional (45%) are kindly interested to invest in mutual funds
6. As per age group, youngsters between 20-30 are more interested to invest in mutual
funds
7. 96% respondents are aware about mutual funds and would like to invest in it.
8. Diversified risk (44%) and tax benefits (30%) are the most preferable drives that
influence people to invest in mutual funds
9. Approximately 20% of investors would like invest for a period of less than 1 year as
the reason for this id volatile market and sudden correction factor in the stock
market.

10.
 SUGGESSTIONS

1. HDFC BANK LTD has to expand its infrastructure because sometimes consumers
(investors) having trouble with the sitting arrangement.

2. The incentives of employees at HDFC BANK LTD should be linked directly to their
performance of expanding the business.

3. More emphasis should be adopted by the AMCs to provide awareness to the investors
regarding the mutual fund scheme.

4. Regular alerts and other information should be provided to the existing investor about
the performance of the various schemes.

5. The employees of the bank should always b willing to give the details of various
schemes to those interested in investing.
 CONCLUSION
I had concluded after analyzing and interpreting my whole report that HDFC BANK LTD is
performing well in the market. HDFC BANK LTD has a market of major products, so every
investor is interested to join him/she get various financial facilities under one roof.

Majority of respondents (96%) are aware about mutual funds and want invest for long term,
i.e. approximately (80%) investors would like to invest for 1 year or more.

Diversified (44%) and tax benefits (30%) are the most preferable drives that influence the
investors to invest in mutual fund, so special emphasis should be laid on such factors
.professionals (45%) are kindly interested to invest in mutual fund.

As still there are many loopholes in mutual fund sector, we have to slowly plug those
loopholes to save the interest of investors.