MAJOR PROJECT REPORT

On
‘MUTUAL FUNDS – A BETTER & SAFER WAY
OF INVESTMENT’
Submitted in partial fulfilment of the requirements
for the award of the degree of
Bachelor of Business Administration (BBA)
To
Guru Gobind Singh Indraprastha University, Delhi

Submitted to: Submitted by: Pushp Sehrawat

Roll No.: 35721201719
Maharaja Surajmal Institute,
New Delhi – 110058
Batch (2019-2022)
 CERTIFICATE

I, Mr. Pushp Sehrawat , Roll No. 35721201719 certify that the Major Project Report

(Paper Code BBA 312) entitled “Mutual Funds - A Better & Safer way of

Investment” is done by me and it is an authentic work carried out by me. The matter

embodied in this has not been submitted earlier for the award of any degree or

diploma to the best of my knowledge and belief.

Signature of the Student

Date:

Certified that the Major Project Report (Paper Code BBA 312) entitled “Mutual Funds

- A Better & Safer way of Investment” done by Mr. Pushp Sehrawat Roll No.

35721201719, is completed under my guidance.

Signature of the Guide

Date:
Name of the Guide:
Designation:

Countersigned

Director
 ACKNOWLEDGEMENT

A major project report is an excellent opportunity for learning and self-development. I

consider myself very lucky and honoured to have so many wonderful people lead me

through in completion of this project.

I wish to express my indebted gratitude and special thanks to Ms. Dhun who in spite

of being extraordinarily busy with her duty, took time out to hear, guide and keep me

on the correct path and helped me in my major project report.

I would like to convey my special thanks to all those who devoted their valuable time

in helping me out and responding to my queries with utmost patience.

Lastly, I would like to thank the management of Maharaja Surajmal Institute, who

provided such an opportunity and the guidance they provided at each step of the

Major Project Report.

Pushp Sehrawat

035721201719
 Table of Content

S. No. Content Page No.

1 Title Page 1

2 Certificate 2

3 Acknowledgment 3

4 Chapter 1: Introduction 5

 Objective of the Study

 Review of Literature

 Research Methodology

 Limitation of Study

5 Chapter 2: Profile of the Organization 25

6 Chapter 3: Analysis and Interpretation of Data 31

7 Chapter 4: Conclusion and Recommendations 42

8 Bibliography 46
 CHAPTER – 1
INTRODUCTION
 Introduction Of Mutual Funds

Overview to Mutual Funds

A mutual fund is a professionally managed investment fund that pools money from

many investors to purchase securities. The term is typically used in the United States

(US), Canada, and India, while similar structures across the globe include the

SICAV in Europe ('investment company with variable capital') and Open-Ended

Investment Company (OEIC) in the UK.

Mutual funds are often classified by their principal investments: money market funds,

bond or fixed income funds, stock or equity funds, or hybrid funds. 

Funds may also be categorized as index funds, which are passively managed funds

that track the performance of an index, such as a stock market index or bond market

index, or actively managed funds, which seek to outperform stock market indices but

generally charge higher fees. Primary structures of mutual funds are open-end funds,

closed-end funds, unit investment trusts.

Open-end funds are purchased from or sold to the issuer at the net asset value of each

share as of the close of the trading day in which the order was placed, as long as the

order was placed within a specified period before the close of trading. They can be

traded directly with the issuer.

Mutual funds have advantages and disadvantages compared to direct investing in

individual securities. The advantages of mutual funds include economies of scale,

diversification, liquidity, and professional management. However, these come with

mutual fund fees and expenses.

Mutual funds are regulated by governmental bodies and are required to publish

information including performance, comparison of performance to benchmarks, fees

charged, and securities held. A single mutual fund may have several share classes by

which larger investors pay lower fees.

Hedge Funds and Exchange-traded funds are not mutual funds.

Advantages

 Advanced Portfolio Management

 Professional Management

 Reduction / Diversification of Risk

 Liquidity

 Flexibility and Convenience

 Reduction in Transaction Cost

 Safety of regulation environment

 Dividend Reinvestment

 Risk Reduction (Safety)

 Choice of Schemes

 Fair Pricing
Disadvantages

Mutual funds have disadvantages as well, which include:

 No Control over Cost in Hands of an Investor

 Less control over the timing of recognition of gains

 Less predictable income

 No opportunity to customize

About Mutual Funds in India

Mutual funds in India are regulated by Securities and Exchange Board of India

(SEBI), the regulator of the securities and commodity market owned by the

Government of India. under the SEBI(Mutual Funds) regulations 1996. The functional

aspect of Mutual Funds industry comes under the purview of AMFI, a sub division of

SEBI. Formed in August 1995, the body undertook the ‘Mutual Funds Sahi hai’

campaign in March 2017 for promoting investor awareness on mutual funds in India.

History Of Mutual Funds in India

A strong financial market with broad participation is essential for a developed

economy. With this broad objective India’s first mutual fund was establishment in

1963, namely, Unit Trust of India (UTI), at the initiative of the Government of India

and Reserve Bank of India ‘with a view to encouraging saving and investment and
participation in the income, profits and gains accruing to the Corporation from

the acquisition, holding, management and disposal of securities’.

In the last few years the MF Industry has grown significantly. The history of Mutual

Funds in India can be broadly divided into five distinct phases as follows:

 First Phase (1964 – 1987)

The Mutual Fund industry in India started in 1963 with the formation of UTI in 1963

by an Act of Parliament and functioned under the Regulatory and administrative

control of the Reserve Bank of India (RBI). In 1978, UTI was de-linked from the RBI

and the Industrial Development Bank of India (IDBI) took over the regulatory and

administrative control in place of RBI. Unit Scheme 1964 (US’64) was the first

scheme launched by UTI. At the end 1988, UTI had Rs. 6,700 crores of Assets Under

Management (AUM).

 Second Phase (1987 – 1993) – Entry of Public Sector Mutual Funds

The year 1987 marked the entry of public sector mutual funds set up by Public Sector

banks and Life Insurance Corporation of India (LIC) and General Insurance

Corporation of India (GIC). SBI Mutual Funds was the first ‘non-UTI’ mutual fund

established in June 1987, followed by Canbank Mutual Fund (Dec. 1987), Punjab

National Bank Mutual Funds (Aug. 1989), Indian Bank Mutual Fund (Nov. 1989),

Bank of India (Jun. 1990), Bank of Baroda Mutual Funds (Oct. 1992). LIC

established its mutual fund in June 1989, while GIC had set up its mutual fund in

December 1990. At the end of 1993, the MF industry had assets under management of

Rs. 47,004 Crores.

  Third Phase (1993 – 2003) – Entry of Private Sector Mutual Funds

The Indian securities market gained greater importance with the establishment of

SEBI in April 1992 to protect the interests of the investors in securities market and to

promote the development of, and to regulate, the securities market.

In the year 1993, the first set of SEBI Mutual Fund Regulations came into being for

all mutual funds, except UTI. The erstwhile Kothari Pioneer (now merged with

Franklin Templeton MF) was the first private sector MF registered in July 1993. With

the entry of private sector funds in 1993, a new era began in the Indian MF industry,

giving the Indian investors a wider choice of MF products. The initial SEBI MF

Regulations were revised and replaced in 1996 with a comprehensive set of

regulations, viz., SEBI (Mutual Fund) Regulations, 1996 which is currently

applicable.

The number of MFs increased over the years, with many foreign sponsors setting up

mutual funds in India. Also the MF industry witnessed several mergers and

acquisitions during this phase. As at the end of January 2003, there were 33 MFs with

total AUM of ₹1,21,805 crores, out of which UTI alone had AUM of ₹44,541 crores.

 Fourth Phase – Since February 2003 – April 2014

In February 2003, following the repeal of the Unit Trust of India Act 1963, UTI was

bifurcated into two separate entities, viz., the Specified Undertaking of the Unit Trust

of India (SUUTI) and UTI Mutual Fund which functions under the SEBI MF
Regulations. With the bifurcation of the erstwhile UTI and several mergers taking

place among different private sector funds, the MF industry entered its fourth phase of

consolidation.

Following the global melt-down in the year 2009, securities markets all over the

world had tanked and so was the case in India. Most investors who had entered the

capital market during the peak, had lost money and their faith in MF products was

shaken greatly.  The abolition of Entry Load by SEBI, coupled with the after-effects

of the global financial crisis, deepened the adverse impact on the Indian MF Industry,

which struggled to recover and remodel itself for over two years, in an attempt to

maintain its economic viability which is evident from the sluggish growth in MF

Industry AUM between 2010 to 2013.

 Fifth (Current) Phase – Since May 2014

Taking cognisance of the lack of penetration of MFs, especially in tier II and tier III

cities, and the need for greater alignment of the interest of various stakeholders, SEBI

introduced several progressive measures in September 2012 to "re-energize" the

Indian Mutual Fund industry and increase MFs’ penetration.

In due course, the measures did succeed in reversing the negative trend that had set in

after the global melt-down and improved significantly after the new Government was

formed at the Center.

Since May 2014, the Industry has witnessed steady inflows and increase in the AUM

as well as the number of investor folios (accounts).

  The Industry’s AUM crossed the milestone of ₹10 Trillion (₹10 Lakh

Crore) for the first time as on 31st May 2014 and in a short span of about three

years the AUM size had increased more than two folds and crossed ₹ 20

trillion (₹20 Lakh Crore) for the first time in August 2017. The AUM size

crossed ₹ 30 trillion (₹30 Lakh Crore) for the first time in November 2020.

 The overall size of the Indian MF Industry has grown from ₹ 6.59 trillion as

on 31st January 2012 to ₹ 38.01 trillion as on 31st January 2022, more than

5½ fold increase in a span of 10 years.

 The MF Industry’s AUM has grown from ₹ 17.37 trillion as on January 31,

2017 to ₹38.01 trillion as on January 31, 2022, more than 2 fold increase in a

span of 5 years. 

 The no. of investor folios has gone up from 5.38 crore folios as on 31-Jan-

2017 to 12.21 crore as on 31-January-2022, more than 2 fold increase in a

span of 5 years.

 On an average 11.55 lakh new folios are added every month in the last 5 years

since January 2017.

The growth in the size of the Industry has been possible due to the twin effects of the

regulatory measures taken by SEBI in re-energising the MF Industry in September

2012 and the support from mutual fund distributors in expanding the retail base.

MF Distributors have been providing the much needed last mile connect with

investors, particularly in smaller towns and this is not limited to just enabling

investors to invest in appropriate schemes, but also in helping investors stay on course
through bouts of market volatility and thus experience the benefit of investing in

mutual funds.

MF distributors have also had a major role in popularising Systematic Investment

Plans (SIP) over the years. In April 2016, the no. of SIP accounts has crossed 1 crore

mark and as on 31st January 2022 the total no. of SIP Accounts are 5.05 crore.

1.2 Objective of the Study

1. To Find out the Preference of the investors for Asset Management Company.

2. To Know the Preference for the portfolios.

3. To Know why one has invested or not invested in HDFC Mutual Funds.

4. To Find the out the most preferred channel.

5. To Find out what should be done to boost the Mutual Fund Industry.

1.3 Review of Literature

Meaning of Literature Review 

 Provides an overview and a critical evaluation of a body of literature relating

to a research topic or a research problem.

 Analyses a body of literature in order to classify it by themes or categories,

rather than simply discussing individual works one after another. 

 Presents the research and ideas of the field rather than each individual work or

author by itself.
A literature review often forms part of a larger research project, such as within a

thesis (or major research paper), or it may be an independent written work, such as a

synthesis paper. 

Abstract 

The concept of review is to revisit the previous work done on a subject to enhance

learning and give a deeper insight to the researcher on the current study. The review

of literature not only presents the facts but also leads into various issues and future

work which can be done to enhance the subject of research. 

• Study by DDI (1997), Performance Management Practices is the most recent

performance management study. It proves that successful organizations realize that

performance management is a critical business tool in translating strategy into results.

The CEOs in the majority of the 88 Organizations surveyed say their performance

management system drives the key factors associated with both business and cultural

strategies. Performance management systems directly influence five critical

organizational outcomes: Financial performance, productivity, product or service

quality, customer satisfaction & employee job satisfaction. When performance

management systems are flexible & linked to strategic goals, organization are more

likely to see improvement in the five critical areas: team objectives, non- manager

training, appraiser accountability & links to quality management are the specific

practices most strongly associated with positive outcomes. 

• Robert & Angelo (2001), The success or failure of public sector business

organizations depends on the ability to attract, develop, retain, empower & reward a

diverse array of appropriately skilled people and is the key to improving

organizational performance. The explanation therefore is that human resource

managers in the public sector business concerns should embark on periodic

performance management reviews of their employees in order to re-position their

business organizations though owned by government for better performance &

improved competitiveness. 

• Study by Wm. Schiemann & Associates (1996), this national survey of cross-section

of executives concluded that measurement-managed companies- especially those that

measure employee performance- outperform those that downplay measurement. 

• Study by Hewitt Associates (1994), The impact of performance management on

organizational success substantiates that performance management system can have a

significant impact on financial performance and productivity. The study used the

Boston Consulting Group/HOLT financial database to track the financial performance

of 437 publically held U.S. companies from 1990 through 1992.The study results

showed that: Companies with performance programs have higher profits, better cash

flows, stronger stock market performance and a greater stock value than companies

without performance management. Productivity in firms without performance

management is significantly below the industry average, while productivity in firms

with performance management is on par with the industry average. Companies with

performance management significantly improved their financial performance and

productivity after implementing performance management. 

• Williams (2002) identifies globalization, increased competition and the increasingly

individualistic rather than collective employee relationship as some of the major

drivers contributing to the increased visibility of performance management systems

(PMS). Faced with fast moving and competitive environments, companies are

constantly searching for unique ways in which to differentiate themselves from their

competition and are increasingly looking to their “human resources” to provide this

differentiation. This has led to much interest in the performance of employees, or

more importantly, how to get the most out of employees in order to sustain

competitive success. 

• Sharmistha Bhattacharjee and Santoshi Sengupta (2011) studied that employees are

the most valuable and dynamic assets of an organization. For achieving the strategic

objective of sustained & speedy growth, managing human resource has been featured

as a vital requirement in all organizations. It is a challenge to monitor the entire cycle

of defining the competence requirement of the business, accessing existing

competence in the organization and bridging the gap between the two. HR practices

are crucial for any organization. Every phase from recruitment to exit interview is

under the HR department. It is a challenge to 

monitor the entire cycle of defining the competence requirement of the business,

accessing existing competence in the organization and bridging the gap between the

two. In a manufacturing industry, with every technical advancement business

opportunity can show up. These opportunities can be converted into business success

only with performance alignment and competence management. 

• The paper of Akua Asantewaa Aforo and Kodjo Asafo-Adjei Antwi (2012) shows

that academic libraries have a performance appraisal system comprising setting of

goals, feedback, participation and incentives for performance. This study aimed at

evaluating the performance appraisal system in the KNUST and GIMPA libraries in

Ghana and give recommendations on improving the system. Questionnaires were

randomly administered to 46 staff members of these libraries. 

• The aim of this study of Akinyele S. T. (2010) was to evaluate the effectiveness of

performance appraisal system at private universities in Nigeria. The focus of the study

was on the administrative staff of Crawford University. The study evaluated the

purpose of performance appraisal in private universities and identifies relevant factors

for achieving an effective performance appraisal. A cross- sectional survey was

selected for this study because it was easy to undertake compared to longitudinal

survey and the results from the same can be inferred to the larger population. The

study population was for all the administrative staff of Crawford University. The

whole populations of staff were selected as respondents. A structured questionnaire

was used to collect the data for analysis. The effectiveness of performance appraisal

systems in private universities are only based on training the members of staff

involved in the rating/ appraising process and are multi- rating systems. Conclusively

because the performance appraisal systems used in private universities are not

effective and that they exist just as a matter of formalities, the private universities

cannot measure members of staff performance, hence making it difficult to achieve

the intended human resource management objective. 

• The paper of Jawaria Andleeb Qureshi, Asad Shahjehan, Zia-ur-Rehman and Bilal

Afsar (2010) notifies that many organizations install Performance Management

Systems (PMS) formally and informally in their organizations, with the motivation to

achieve better organizational results. In practice, organizations have difficulty in

implementing a performance management system because its different dimensions are

not taken into considerations enough. This article describes the findings of a

comparative analyses conducted between a standard performance management model

and performance management systems as applied by Local Development

Organization (LDO). Data was collected from 50 employees of the organization with

a Cronbach Alpha (0.935). Results identified barriers to implementation of effective

PMS, also recommendations and viable solutions are presented. 

• Research of Leena Toppo, Twinkle Prusty (2012) informs that performance

appraisal and performance management were one of the emerging issues since last

decade. Many organizations have shifted from employee’s performance appraisal

system to employee’s performance management system. This paper has focused to

study the evolution of employee’s performance appraisal system, critics the system

suffered and how the performance management system came to the practice. The

main purpose of this paper is to differentiate these two systems, employee’s

performance appraisal and management system. This paper uses a review of the

literature to evaluate the development of appraisal system and argues the critic areas

of appraisal system. Performance management eliminates the shortcomings of

performance appraisal system to some extent. 

• Timmons (1992) had opined that competitiveness is a major issue in foreign

competition, and if a country’s export promotion drive is to yield the desired results,

competitiveness in particular must be optimized. He further posited that the declining

productivity in business organizations which leads to un-competitiveness is a major

cause of monetary problems and inflation, and governments obviously should be

interested in the level of competitiveness arising from productivity improvement. 

• Although the use of goal setting is primarily used to improve performance, there are

other benefits such as: to clarify expectations, to improve job satisfaction, to enhance

self- esteem through attainment of goals and to improve quality of work (Locke and

Latham 1984). Appraisal provides the mechanism to provide effective feedback on

achievement of which is an important factor in improving performance (Williams

2002). 

• Fletcher (2004) describes it as a “high risk activity” for managers, given the many

pitfalls associated with it and Newton and Findlay (1996) highlight the fallibility of

appraisals as they are open to manager manipulation. Despite the criticisms, the use of

performance appraisal is widespread and perceived to be an effective part of a

performance management system (CIPD 2005a). 

• Many organizations have looked to improve performance by linking it to pay;

performance related pay (PRP) can take many different forms (Williams 2002) and

the type of reward and how it is linked to performance management varies by

organization (IDS 2003). There are many differing views on the effectiveness of PRP

(Williams 2002) and whether or not it contributes to improved performance. It has

been argued that PRP is a process of control, rather than contributing to real

development (Hendry et al 2000). 

• A study conducted by McDonald and Shield of Hewitt Associates found that

companies that used performance management programs had greater profits, better

cash flow, stronger stock market performance and greater stock value than companies

that did not. Not only performance management improved financial performance, but

it also improved productivity; companies with such programs had higher sales per

employees (Rheem, 1995). Nonetheless, performance management has been mistaken

as performance evaluation. As a matter of fact, both performance management and

performance evaluation are related but they are not exactly the same concept.

Performance management is a systematic process for improving organizational

performance by developing the performance of individuals and teams. 

1.4 Research Methodology

Research is an original contribution to the existing stock of knowledge making for its

advancement. It is the pursuit of truth with the help of study, observations,

comparison and experiment. In short, the search for knowledge through objective and

systematic method of generalization and the formulation of a theory is also theory is

also research. A team ‘research’ refers to the systematic method of consisting for

enunciating the problem, formulating a hypothesis, collecting the facts or data.

Analysing the facts or data, reaching certain conclusions either in the form of

solutions towards the concerned problems or in certain generalization for some

theoretical formulation. 

Research Instrument: The instrument used in this study is a structured daily

progress report. A construction daily report or daily log is a document that

includes all of the details and events of a single day working on a construction

project. Site managers or contractors fill out and file these reports to keep an

up-to-date record of the relevant project information. The daily progress report

contains a record of what scenes were shot that day, the locations used, the
 number of meals served, the vehicles and equipment utilised and any other

notable events or incidents.

Data Collection: Data refers to information or facts. Often researchers

understand by data as only numerical figure. It also includes descriptive facts,

on numerical information, quantitative and quantitative information.

Collection of data is an important stage in research. In fact, the quality of the

data collected determines the quantity of the research. Collection of data is

done by 2 methods. 

 Primary data collection.

 Secondary data collection. 

➢ Primary data collection: Primary data is also known as the data collected for the

first time through the field survey. Such data are collected with specific set of

objectives to assess the current of any variable studied. Primary data are information

collected by a researcher specifically for a research assignment. In other words,

primary data are information that a company must gather because no one has

compiled and published the information in a forum accessible to the public. Primary

data are original in nature and directly related to the issue or problem and current data.

Primary data are the data which the researcher collects through various methods like

interviews, surveys, questionnaires etc. 

The primary data has been obtained from the executives and associates by providing

them with a questionnaire and getting the records from the Mutual Fund Department.
➢ Secondary data collection: Secondary data is the data collected by a party not

related to the research study but collected these data for some other purpose and at

different time in the past. If the researcher uses these data then these become

secondary data for the current users. These may be available in written, typed or in

electronic forms. A variety of secondary information sources is available to the

researcher gathering data on an industry, potential product applications and the market

place. Secondary data is classified in terms of its source – either internal or external.

Internal, or in-house data, is secondary information acquired within the organization

where research is being carried out. External secondary data is obtained from outside

sources. 

The secondary data has been obtained from published literature on the topic and from

Books, Journals, News Papers, Research Articles, Thesis, Websites, Magazines etc. 

The secondary data has been obtained from the customers with a questionnaire

feedback and the record published by the Bank on its sites.

Sampling procedure: It refers to the technique used in selecting the items for

the sample. This technique or procedure stands for the sample design itself.

Simple Random sampling method/design based on convenient sampling

method has been used for this research study. The sample was selected of

them who are the customers/visitors and records of the HDFC MF

Department, irrespective of them being investors or not or availing the

services or not. It was also collected through the data fed up by the bank and

provided to the researcher.

Sample size: Sample size determination is the act of choosing the number of

observations or replicates to include in a statistical sample. The sample size is

an important feature of any empirical study in which the goal is to make

inferences about a population from a sample. Appropriate number of sample

size (i.e., 10% of total) was put to use for the purpose of collecting primary

data from

Sample size: 5000

Sampling unit: It may be a geographical such as state, districts, village etc. or

a construction unit such as House, Flat etc. or it may be social unit such as

family, club, school etc. or it may be an individual. 

Sampling unit: SOUTH DELHI

Research Instrument: A structured  daily report format on excel sheet has

been prepared to get the relevant information from the sites. The report

consists of variety of question presented to the respondents team for their

responses and the which could be evaluate later on. 

Questionnaire Design: I framed the structured excel sheet  non- for my study

with careful and frequent consultation with both the internal as well as

company guide.

Statistical Tools: The various techniques applied in the case of analysis are

listed and are as follows: GRAPHS and PIE CHARTS. The data is analysed

through simple analysis technique. 

The data tool is percentage method. 

 Percentage method is used in making comparison between two or sense of

Data.

Percentage of Investors = No. of People Invested in the Mutual Funds / Total

People Interested in Mutual Funds X 100 

Sample design: It is a definite plan for obtaining a sample from a given

population. It refers to the technique of the procedure the researcher would

adopt in selecting items for the sample. 

1.5 Limitation of Study

1. Some of the persons were not so responsive.

2. Possibility of error in data collection because many of the investors may not

have given accurate answers of my questionnaire.

3. Sample size is limited to 5000 investors of HDFC Mutual Funds Department.

4. The sample size may not adequately represent the whole market.

5. The Research is confined to a certain part of the department.

 CHAPTER – 2
PROFILE OF THE
ORGANISATION
 HDFC Mutual Fund

It is one of India’s largest mutual fund managers with ₹4.4 trillion in assets under

management. Started in 1999, we were set up as a joint venture between Housing

Development Finance Corporation Limited (“HDFC”) and abrdn Investment

Management Limited (erstwhile known as Standard Life Investments

Limited). During FY18-19 we carried out an initial public offering, and became a

publicly listed company in August 2018. Our principal shareholders are HDFC

and abrdn Investment Management Limited which own 52.6% and 16.2% stake,

respectively. 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 9.6 million live accounts. We have a dominant

position in equity investments, with one of the highest market shares 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. 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 26 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 mutual fund distributors, national distributors and banks. We serve our

customers and distribution partners in over 200 cities through our network of 227

branches and 1,207 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 29-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 corporates, 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.

VISION AND MISSION:

The vision is to be the most respected Asset Manager in the world and mission is to

be the wealth creator for every Indian.

CSR initiatives will be aligned with our principles to serve a social purpose,

sustainable development of the society and the environment in which we operate.

WHY HDFC MF?

They believe, that, by giving the investor long-term benefits, they have to constantly

review the markets for new trends, to identify new growth sectors and share this

knowledge with our investors in the form of product offerings. They have come up

with various products across asset and risk categories to enable investors to invest in

line with their investment objectives and risk taking capacity.

INVESTMENT PHILOSOPHY

1. Invest Profitability
The single most important factor that drives HDFC Mutual Fund is its belief to give

the investor the chance to profitably invest in the financial market, without constantly

worrying about the market swings.

2. Research and Analysis

To realize this belief, HDFC Mutual Fund has set up the infrastructure required to

conduct all the fundamental research and back it up with effective analysis.

3. Controlled Risk

The strong emphasis on managing and controlling portfolio risk avoids chasing the

latest "fads" and trends.

Key Terms used in the MF Industry

Asset management companies have distinct business models where funds are raised

from investors and invested by the company. In this section, we try to simplify some

of the industry-specific terms used frequently.

1. Asset Under Management (AUM)

It is the total value of all investments managed by the mutual fund. AUM can

be at a scheme level or a plan level. For a mutual fund as a whole, AUM

represents value of total investments across all schemes.

2. Net Asset Value (NAV)

 It is the price of each unit of a mutual fund scheme. Typically, new mutual

fund schemes are priced at I10 per unit during the New Fund Offer (NFO)

period. Consequently, the NAV will change depending on the performance of

the scheme. For instance, if an investor invests I50,000 in an NFO he/ she will

get 5,000 units, each having a NAV of I10.

3. Asset Allocation

This refers to the investment strategy that aims to balance risk and rewards by

allocating capital between different asset classes such as equity, debt, etc.

4. Expense Ratio

The expense ratio of a mutual fund is calculated by dividing the total expenses

the fund has incurred by its AUM. It gives the cost, a mutual fund incurs, for

managing each unit. A mutual fund deducts these expenses from the NAV

before declaring it on a daily basis.

5. Systematic Transfer Plan (STP)

This plan can be used in volatile markets to gradually transfer or switch small

amounts of investments at chosen intervals (days/month/quarter) from one

scheme to another scheme of a mutual fund. It is essentially used to transfer

investments from one asset type to another.

6. Systematic Investment Plan (SIP)

A mutual fund gives investors an option of either investing lump sum or

through a SIP, breaking the amount into periodic investments over a long

period. For example, if an investor wants to invest I60,000 annually in a

 mutual fund scheme and does not have the lump sum amount available, he/she

can opt for an SIP of I5,000 every month.

7. Systematic Withdrawal Plan (SWP)

Through this facility, the investor receives a pre- determined amount on a

periodic basis from the invested scheme. Investors who need regular income,

like retirees, often go for this option. The payments are usually given from the

scheme’s dividend income or capital gain distribution.

CHAPTER – 3
 ANALYSIS AND
INTERPRETATION
OF DATA

Data Analysis & Interpretation

Analysis 1. Age Distribution of the Investors.

Age Group (in 18-20 21-30 31-40 41-50 51-60 61-70

years)

No. of Investors 6 32 61 47 41 13
 Age Group/No. of Inevstor
2000
1800
1781
1600
1400
Number of Investors

1408
1200 1264
1000
800
600
400
200 336

0 137
74
18-20 21-30 31-40 41-50 51-60 61-70
Age Group of the Invesotrs (In yeras)

Interpretation:

According to this chard out of 5000 Mutual Fund Investors, the most are in the age
group of 31-40 years i.e. 35.6%, the second most investors are in the age group of 41-
50 years i.e. 28.1% and the least investor are in the age group of 61-70years.

Analysis 2. Education Qualification of Investors

Educational Qualification Number of Investors

Post Graduate 1814

Graduate 1971

Undergraduate 988

Metric 227

Total 5000
 Educational Qualification of Investors

5%
Post Graduate
20%
36% Graduate
Undergraduate
Metirc

39%

Interpretation:

Out of 5000 Mutual Fund Investors 36% have completed post-graduation, whereas
39% have done Graduation, 20% of the total are just completed education up to under
graduation and the remaining 5% Investors are completed Metric.

Analysis 3. Occupation of the Investor.

Occupation No. of Investor

Govt. Sector 785

Pvt. Sector 1994

Business 537

Self Employed 608

Other 1076
 Occupation of the Investor
2500

2000
1994
No. of Invesors

1500

1000 1076

785
500 608
537

0
Govt. Sector Pvt. Sector Business Self Employed Other

Occupational Sector

Interpretation:

In occupation group out of 5000 investors, 39.8% are from Pvt. Sector employees,
10.74% are businessman, Govt. Employees are 15.7%, 12.16% are Self Employed
and 21.52% are from other category.

Analysis 4. Monthly Income of Investors.

Monthly Income Group (In INR) No. of Investors

0 – 20,000 78

20,001 – 40,000 1108

40,001 – 60,000 957

60,001 – 80,000 891

80,001 – 100,000 899

Above 100,001 1067

 Income of Inevstors
1200
1108
1067
1000 957
891 899

800
No. of Investors

600

400

200
78
0
0 - 20,000 20,001 - 40,001 - 60,001 - 80,001 - Above 100,001
40,000 60,000 80,000 100,000
Income Group (INR)

Interpretation:

In the income group of investors, out of 5,000 investors, 22.16% investors that is the
maximum investors are from the monthly income group of Rs. 20,001 – 40,000.
Second one i.e. 21.34% investors are in the monthly income group of Above 100,001
and minimum investors 1.56% are in the income group of Rs. 0 – 20,000.

Analysis 5. Factor Preference while investing.

Factors Liquidity Low Risk High Return Trust

No. of Investors 2706 1212 497 585

 No. of Investors

12%
Liquidity
10% Low Risk
High Return
Trust
54%
24%

Interpretation:

Out of 5000 People, 54% People prefer to invest where there is high Liquidity, 24%
prefer to invest there is low risk, 10% prefer High Return and 12% believe investing
on trusted stocks.

Analysis 6. Awareness about Mutual Fund Operations.

Response Yes No

No. of Investors 1373 3627

 No. of Investors

27%

Yes
No

73%

Interpretation:

From the above chart it is inferred that only 27% people are aware of the Mutual
Funds and its operations and rest 73% are not aware of working of Mutual Funds.

Analysis 7. Source of Information for customers about the Mutual Fund.

Source of Information No. of Respondents

Bank 1008

Peer Group 997

Advertisement 378
 Financial Adviser 2617

Source of Information about Mutaul Funds

3000

2500

2000
No. of Invstors

1500 2617

1000
1008 997
500
378

0
Bank Peer Group Advertisement Financial Adviser
Source of Information

Interpretation:

From the above chart it is inferred that the Financial Adviser is the most important
source of information about Mutual Funds. Out of 5000 Investors, 52.34% know
about mutual funds through Financial Adviser, 20.16 from Bank, 19.94% through
Peer Group and 7.56% from Advertisements.

Analysis 8. Reason for invested in HDFC Mutual Funds.

Reason No. of Investors

Associated with HDFC 2852

Better Return 1354

 Agent Advice 794

Reason for Investing in HDFC Mutual Funds

16%

Associated with HDFC

Better Retun
Agent Advice

27% 57%

Interpretation:

Out of 5000 investors of HDFC MF 57% have invested because of its associated with
the brand HDFC, 16% invested on Agent’s advice, 27% invested because of Better
Return.

Analysis 9. Mode of Investment Preferred by the Investors.

Mode of Investment One Time Investment Systematic Investment Plan

(SIP)
 No. of Investors 1148 3852

Mode of Investment

23%

One Time Investment

Systematic Investment Plan

77%

Interpretation:

Out of 5000 Investors 77% preferred Systematic Investment Plan (SIP) and 23%
prefer One Time Investment Plan.

Analysis 10. Option for getting Return Preferred by the Investors.

Option Dividend Pay-out Dividend Growth

Reinvestment
 No. of Investors 1623 558 2819

32%

56%

11%

Dividend Pay-out Dividend Reinvestment Growth

Interpretation:

From the above graph 56% prefer Growth option, 33% prefer Dividend Pay-out and
11% preferred Dividend Reinvestment Option.
 CHAPTER – 4
CONCLUSION AND
RECOMMENDATIONS

Conclusion

Running a successful Mutual Fund requires complete understanding of the

peculiarities of the Indian Stock Market and the psyche of the small investors. This

study has tried to understand the financial behavior of Mutual Fund investors in
connection with the preferences of Brand (AMC), Products, Channels etc. I observed

that many of people are afraid of Mutual Fund. They think their money will not be

secure in Mutual Fund. They need the knowledge of Mutual Fund and its related

terms. Many of people do not have invested in mutual fund due to lack of awareness

although they have money to invest. As the awareness and income is growing the

number of mutual fund investors are also growing.

"Brand" plays important role for the investment. People invest in those companies

where they have faith, or they are well known with them. There are many AMCs in

India but only some are performing well due to Brand awareness. Some AMCs are

not performing well although some of the schemes of them are giving good return

because of not awareness about Brand. Reliance, UTI, SBIMF, ICICI Prudential etc.

They are well known Brand, they are performing well and their Assets Under

Management is larger than others whose Brand name are not well known as Principle,

Sunderam, etc. Distribution channels are also important for the investment in mutual

fund. Financial Advisors are the most preferred channel for the investment in mutual

fund. They can change investors' mind from one investment option to others. Many of

investors directly invest their money through AMCA because they do not have to pay

entry load. Only those people invest directly who know well about mutual fund and

its operations and those have time.

Recommendations

 The most vital problem spotted is of ignorance. Investors should be made

aware of the benefits. Nobody will invest until and unless he is fully
 convinced. Investors should be made to realize that ignorance is no longer

bliss and what they are losing by not investing.

 Mutual funds offer a lot of benefit which no other single option could offer.

But most of the people are not even aware of what, a mutual fund is. They

only see it as just another investment option. So, the advisors should try to

change their mindsets. The advisors should target for more and more young

investors. Young investors as well as persons at the height of their career

would like to go for advisors due to lack of expertise and time.

 Mutual Fund Company needs to give the training of the Individual Financial

Advisors about the Fund/Scheme and its objective, because they are the main

source to influence the investors. Before making any investment, Financial

Advisors should first enquire about the risk tolerance of the

investors/customers, their need

 Before making any investment, Financial Advisors should first enquire about

the risk tolerance of the investors/customers, their need and time (how long

they want to invest). By considering these three things they can take the

customers into consideration.

 Younger people aged under 35 will be a key new customer group into the

future, so making greater efforts with younger customers who show some

interest in investing should pay off.

 Customers with graduate level education are easier to sell to and there is a

large untapped market there. To succeed however, advisors must provide

sound advice and high quality.

 Systematic Investment Plan (SIP) is one the innovative products launched by

Assets Management companies very recently in the industry. SIP is easy for
 monthly salaried person as it provides the facility of do the investment in MI.

Though most of the prospects and potential investors are not aware about the

SIP. There is a large scope for the companies to tap the salaried persons.

References/ Bibliography 

 OUTLOOK MONEY

 MUTUAL FUND HARD BOOK

 FACT SHEET AND STATEMENT

 WWW.HDFCFUND.COM

 WWW.MONEYCONTROL.COM

 WWW.AMFIINDIA.COM
 WWW.MUTUALFUNDSINDIA.COM

 WWW.ONLINERESEARCHONLINE.COM

MAJOR PROJECT REPORT

On
‘MUTUAL FUNDS – A BETTER & SAFER WAY
OF INVESTMENT’
Submitted in partial fulfilment of the requirements
for the award of the degree of
Bachelor of Business Administration (BBA)
 To
Guru Gobind Singh Indraprastha University

Pushp Sehrawat
35721201719
BBA (G) (2019-22)