A PROJECT REPORT

ON
“A DETAILED ANALYSIS OF CONSUMER BEHAVIOUR
TOWARDS MUTUAL FUNDS OF HDFC BANK”

SUBMITTED IN PARTIAL FULFILLMENT FOR

MASTER OF BUSINESS ADMIMISTRATION

PROGRAMME OF

GAUTAM BUDDH TECHNICAL UNIVERSITY

Batch 2009-2011

Under Guidance

AMIT GUPTA

PB AUTHORISER

HDFC BANK Limited

Submitted to :- Submitted by: -

Miss VENUS MADAN SUKIRTI OMAR

(Faculty PEC) MBA - (2009-2011)

PRABHAT ENGINEERING COLLEGE, BARA, KANPUR

 ACKNOWLDGEMENT

With regard to my Project with Mutual Fund I would like to thank each

and every one who offered help, guideline and support whenever required.

First and foremost I would like to express gratitude to Amit Gupta and

other staffs for their support and guidance in the Project work. I am

extremely grateful to my guide, Miss Venus Madan for her valuable

guidance and timely suggestions. I would like to thank all faculty members

of P.E.C. BARA KANPUR for the valuable guidance& support. I would

also like to extend my thanks to my family members and friends for their

support.

SUKIRTI OMAR
 DECLARATION

CONSUMER BEHAVIOUR TOWARDS MUTUAL FUND OF HDFC BANK”

Mutual Fund submitted in the partial fulfillment of the requirement of Master of

Business Administration (MBA) of GAUTAM BUDDH TECHNICAL UNIVERSITY

is based on primary & secondary data found by me in various departments, books,

magazines and websites & Collected by me in under guidance of Amit Gupta

DATE: SUKIRTI OMAR

MBA (Two Years)

 EXECUTIVE SUMMARY

In few years Mutual Fund has emerged as a tool for ensuring one’s

financial well being. Mutual Funds have not only contributed to the India

growth story but have also helped families tap into the success of Indian

Industry. As information and awareness is rising more and more people

are enjoying the benefits of investing in mutual funds. The main reason the

number of retail mutual fund investors remains small is that nine in ten

people with incomes in India do not know that mutual funds exist. But

once people are aware of mutual fund investment opportunities, the

number who decide to invest in mutual funds increases to as many as one

in five people. The trick for converting a person with no knowledge of

mutual funds to a new Mutual Fund customer is to understand which of

the potential investors are more likely to buy mutual funds and to use the

right arguments in the sales process that customers will accept as

important and relevant to their decision.

This Project gave me a great learning experience and at the same time it

gave me enough scope to implement my analytical ability. The analysis

and advice presented in this Project Report is based on market research on

the saving and investment practices of the investors and preferences of the
investors for investment in Mutual Funds. This Report will help to know

about the investors’ Preferences in Mutual Fund means Are they prefer

any particular Asset Management Company (AMC), Which type of

Product they prefer, Which Option (Growth or Dividend) they prefer or

Which Investment Strategy they follow (Systematic Investment Plan or

One time Plan). This Project as a whole can be divided into two parts.The

first part gives an insight about Mutual Fund and its various aspects, the

Company Profile, Objectives of the study, Research Methodology. One

can have a brief knowledge about Mutual Fund and its basics through the

Project.

The second part of the Project consists of data and its analysis collected

through survey done on 200 people. For the collection of Primary data I

made a questionnaire and surveyed of 200 people. I also taken interview of

many People those who were coming at the SBI Branch where I done my

Project. “A DETAIED ANALYSIS OF CONSUMER BEHAVIOUR

TOWARDS MUTUAL FUND OF HDFC BANK” . This Project covers

the topic. The collected data has been well organized and presented. I hope

the research findings and conclusion will be of use.

 CONTENTS

Acknowledgement

Declaration

Executive Summary

Chapter - 1 INTRODUCTION

Chapter - 2 COMPANY PROFILE

Chapter - 3 OBJECTIVES AND SCOPE

Chapter - 4 RESEARCH METHODOLOGY

Chapter - 5 DATA ANALYSIS AND INTERPRETATION

Chapter - 6 FINDINGS AND CONCLUSIONS

Chapter - 7 SUGGESTIONS & RECOMMENDATIONS

BIBLIOGRAPHY
 CHAPTER - 1

INTRODUCTION
INTRODUCTION TO MUTUAL FUND AND ITS VARIOUS ASPECTS.

Mutual fund is a trust that pools the savings of a number of investors who

share a common financial goal. This pool of money is invested in

accordance with a stated objective. The joint ownership of the fund is thus

“Mutual”, i.e. the fund belongs to all investors. 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

the number of units owned by them. Thus a Mutual Fund is the most

suitable investment for the common man as it offers an opportunity to

invest in a diversified, professionally managed basket of securities at a

relatively low cost. A Mutual Fund is an investment tool that allows small

investors access to a well-diversified portfolio of equities, bonds and other

securities. Each shareholder participates in the gain or loss of the fund.

Units are issued and can be redeemed as needed. The funds Net Asset

value (NAV) is determined each day.

Investments in securities are spread across a wide cross-section of

industries and sectors and thus the risk is reduced. Diversification reduces

the risk because all stocks may not move in the same direction in the same
proportion at the same time. Mutual fund issues units to the investors in

accordance with quantum of money invested by them. Investors of mutual

funds are known as unit holders.

When an investor subscribes for the units of a mutual fund, he becomes

part owner of the assets of the fund in the same proportion as his

contribution amount put up with the corpus (the total amount of the fund).
 Mutual Fund investor is also known as a mutual fund shareholder or a unit

holder.

Any change in the value of the investments made into capital market

instruments (such as shares, debentures etc) is reflected in the Net Asset

Value (NAV) of the scheme. NAV is defined as the market value of the

Mutual Fund scheme's assets net of its liabilities. NAV of a scheme is

calculated by dividing the market value of scheme's assets by the total

number of units issued to the investors.

ADVANTAGES OF MUTUAL FUND

• Portfolio Diversification

• Professional management
• Reduction / Diversification of Risk

• Liquidity

• Flexibility & Convenience

• Reduction in Transaction cost

• Safety of regulated environment

• Choice of schemes

• Transparency

DISADVANTAGE OF MUTUAL FUND

• No control over Cost in the Hands of an Investor

• No tailor-made Portfolios

• Managing a Portfolio Funds

• Difficulty in selecting a Suitable Fund Scheme

HISTORY OF THE INDIAN MUTUAL FUND

INDUSTRY
The mutual fund industry in India started in 1963 with the formation of

Unit Trust of India, at the initiative of the Government of India and

Reserve Bank. Though the growth was slow, but it accelerated from the

year 1987 when non-UTI players entered the Industry.

In the past decade, Indian mutual fund industry had seen a dramatic

improvement, both qualities wise as well as quantity wise. Before, the

monopoly of the market had seen an ending phase; the Assets Under

Management (AUM) was Rs67 billion. The private sector entry to the fund

family raised the Aum to Rs. 470 billion in March 1993 and till April

2004; it reached the height if Rs. 1540 billion.

The Mutual Fund Industry is obviously growing at a tremendous space

with the mutual fund industry can be broadly put into four phases

according to the development of the sector. Each phase is briefly described

as under.

First Phase – 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament

by the Reserve Bank of India and functioned under the Regulatory and

administrative control of the Reserve Bank of India. 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. The

first scheme launched by UTI was Unit Scheme 1964. At the end of 1988

UTI had Rs.6,700 crores of assets under management.

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

1987 marked the entry of non- UTI, 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 Fund was the

first non- UTI Mutual Fund established in June 1987 followed by Canbank

Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89),

Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of

Baroda Mutual Fund (Oct 92). 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 mutual fund industry had assets under management of

Rs.47,004 crores.

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

1993 was the year in which the first Mutual Fund Regulations came into

being, under which all mutual funds, except UTI were to be registered and

governed. The erstwhile Kothari Pioneer (now merged with Franklin

Templeton) was the first private sector mutual fund registered in July

1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more

comprehensive and revised Mutual Fund Regulations in 1996. The

industry now functions under the SEBI (Mutual Fund) Regulations 1996.

As at the end of January 2003, there were 33 mutual funds with total assets

of Rs. 1,21,805 crores.

Fourth Phase – since February 2003

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

UTI was bifurcated into two separate entities. One is the Specified

Undertaking of the Unit Trust of India with assets under management of

Rs.29,835 crores as at the end of January 2003, representing broadly, the

assets of US 64 scheme, assured return and certain other schemes

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB

and LIC. It is registered with SEBI and functions under the Mutual Fund

Regulations. consolidation and growth. As at the end of September, 2004,

there were 29 funds, which manage assets of Rs.153108 crores under 421

schemes.

CATEGORIES OF MUTUAL FUND:

Mutual funds can be classified as follow :

 Based on their structure:

 • Open-ended funds: Investors can buy and sell the units from the

fund, at any point of time.

• Close-ended funds: These funds raise money from investors only once.

Therefore, after the offer period, fresh investments can not be made into the fund.

If the fund is listed on a stocks exchange the units can be traded like stocks (E.g.,

Morgan Stanley Growth Fund). Recently, most of the New Fund Offers of close-

ended funds provided liquidity window on a periodic basis such as monthly or

weekly. Redemption of units can be made during specified intervals. Therefore,

such funds have relatively low liquidity.

 Based on their investment objective:

Equity funds: These funds invest in equities and equity related

instruments. With fluctuating share prices, such funds show volatile

performance, even losses. However, short term fluctuations in the market,

generally smoothens out in the long term, thereby offering higher returns

at relatively lower volatility. At the same time, such funds can yield great

capital appreciation as, historically, equities have outperformed all asset

classes in the long term. Hence, investment in equity funds should be

considered for a period of at least 3-5 years. It can be further classified as:
 i) Index funds- In this case a key stock market index, like BSE Sensex or

Nifty is tracked. Their portfolio mirrors the benchmark index both in

terms of composition and individual stock weightages.

ii) Equity diversified funds- 100% of the capital is invested in equities

spreading across different sectors and stocks.

iii|) Dividend yield funds- it is similar to the equity diversified funds

except that they invest in companies offering high dividend yields.

iv) Thematic funds- Invest 100% of the assets in sectors which are related

through some theme.

e.g. -An infrastructure fund invests in power, construction, cements sectors

etc.

v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A

banking sector fund will invest in banking stocks.

vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the

investors.

Balanced fund: Their investment portfolio includes both debt and equity.

As a result, on the risk-return ladder, they fall between equity and debt

funds. Balanced funds are the ideal mutual funds vehicle for investors who
prefer spreading their risk across various instruments. Following are

balanced funds classes:

i) Debt-oriented funds -Investment below 65% in equities.

ii) Equity-oriented funds -Invest at least 65% in equities, remaining in

debt.

Debt fund: They invest only in debt instruments, and are a good option

for investors averse to idea of taking risk associated with equities.

Therefore, they invest exclusively in fixed-income instruments like bonds,

debentures, Government of India securities; and money market

instruments such as certificates of deposit (CD), commercial paper (CP)

and call money. Put your money into any of these debt funds depending on

your investment horizon and needs.

i) Liquid funds- These funds invest 100% in money market instruments, a

large portion being invested in call money market.

ii) Gilt funds ST- They invest 100% of their portfolio in government

securities of and T-bills.

iii) Floating rate funds - Invest in short-term debt papers. Floaters invest

in debt instruments which have variable coupon rate.

iv) Arbitrage fund- They generate income through arbitrage opportunities

due to mis-pricing between cash market and derivatives market. Funds are

allocated to equities, derivatives and money markets. Higher proportion

(around 75%) is put in money markets, in the absence of arbitrage

opportunities.

v) Gilt funds LT- They invest 100% of their portfolio in long-term

government securities.

vi) Income funds LT- Typically, such funds invest a major portion of the

portfolio in long-term debt papers.

vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt

and an exposure of 10%-30% to equities.

viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in

line with that of the fund.

INVESTMENT STRATEGIES
1. Systematic Investment Plan: under this a fixed sum is invested each

month on a fixed date of a month. Payment is made through post dated

cheques or direct debit facilities. The investor gets fewer units when the

NAV is high and more units when the NAV is low. This is called as the

benefit of Rupee Cost Averaging (RCA)

2. Systematic Transfer Plan: under this an investor invest in debt

oriented fund and give instructions to transfer a fixed sum, at a fixed

interval, to an equity scheme of the same mutual fund.

3. Systematic Withdrawal Plan: if someone wishes to withdraw from a

mutual fund then he can withdraw a fixed amount each month

RISK V/S. RETURN:

 CHAPTER – 2

COMPANY PROFILE

INTRODUCTION TO HDFC MUTUAL FUND

HDFC BANK

Bank profile

HDFC Bank was incorporated in August 1994 in the name of 'HDFC Bank Limited',
with its registered office in Mumbai, India. The Bank commenced operations as a
Scheduled Commercial Bank in January 1995.
The Housing Development Finance Corporation Limited (HDFC) was amongst the first
to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a
bank in the private sector, as part of the RBI's liberalization of the Indian Banking
Industry in 1994.

Headquartered in Mumbai, HDFC Bank, has a network of over 1398 branches spread
over 255 cities across India. All branches are linked on an online real-time basis.
Customers in over 146 locations are serviced through Telephone Banking. The Bank
also has a network of about over 2900 networked ATMs across these cities. HDFC
Bank's ATM network can be accessed by all domestic and international Visa /
MasterCard, Visa Electron / Maestro, Plus / Cirrus and American Express Credit /
Charge cardholders.

HDFC Bank has won many awards for its excellent service. Major among them are
"Best Bank in India" by Hong Kong-based Finance Asia magazine in 2005 and
"Company of the Year" Award for Corporate Excellence 2004-05.

Promoters

HDFC is India's premier housing finance company and enjoys an impeccable track
record in India as well as in international markets. Since its inception in 1977, the
Corporation has maintained a consistent and healthy growth in its operations to remain
the market leader in mortgages. Its outstanding loan portfolio covers well over a
million dwelling units. HDFC has developed significant expertise in retail mortgage
loans to different market segments and also has a large corporate client base for its
housing related credit facilities. With its experience in the financial markets, a strong
market reputation, large shareholder base and unique consumer franchise, HDFC was
ideally positioned to promote a bank in the Indian environment.

Business focus

HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build

sound customer franchises across distinct businesses so as to be the preferred provider
of banking services for target retail and wholesale customer segments, and to achieve
healthy growth in profitability, consistent with the bank's risk appetite. The bank is
committed to maintain the highest level of ethical standards, professional integrity,
corporate governance and regulatory compliance. HDFC Bank's business philosophy is
based on four core values - Operational Excellence, Customer Focus, Product
Leadership and People.

Capital structure

The authorized capital of HDFC Bank is Rs.450 corer (Rs.4.5 billion). The paid-up
capital is Rs.311.9 crore (Rs.3.1 billion). The HDFC Group holds 22.1% of the bank's
equity and about 19.4% of the equity is held by the ADS Depository (in respect of the
bank's American Depository Shares (ADS) Issue). Roughly 31.3% of the equity is held
by Foreign Institutional Investors (FIIs) and the bank has about 190,000 shareholders.
The shares are listed on the The Stock Exchange, Mumbai and the National Stock
Exchange. The bank's American Depository Shares are listed on the New York Stock
Exchange (NYSE) under the symbol "HDB".

Distribution network

HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network
of over 761 branches spread over 327 cities across India. All branches are linked on an
online real-time basis. Customers in over 120 locations are also serviced through
Telephone Banking. The Bank's expansion plans take into account the need to have a
presence in all major industrial and commercial centre where its corporate customers
are located as well as the need to build a strong retail customer base for both deposits
and loan products. Being a clearing/settlement bank to various leading stock
exchanges, the Bank has branches in the centre where the NSE/BSE have a strong and
active member base.

The Bank also has a network of about over 1977 networked ATMs across these cities.
Moreover, HDFC Bank's ATM network can be accessed by all domestic and
international Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American
Express Credit/Charge cardholders.

MANAGEMENT

Mr. Jagdish Kapoor took over as the bank's Chairman in July 2001. Prior to this, Mr.
Kapoor was a Deputy Governor of the Reserve Bank of India.

The Managing Director, Mr. Aditya Puri, has been a professional banker for over 25
years and before joining HDFC Bank in 1994 was heading Citibank's operations in
Malaysia.

The Bank's Board of Directors is composed of eminent individuals with a wealth of

experience in public policy, administration, industry and commercial banking. Senior
executives representing HDFC are also on the Board.

Senior banking professionals with substantial experience in India and abroad head
various businesses and functions and report to the Managing Director. Given the
professional expertise of the management team and the overall focus on recruiting and
retaining the best talent in the industry, the bank believes that its people are a
significant competitive strength.

TECHNOLOGY

HDFC Bank operates in a highly automated environment in terms of information

technology and communication systems. All the bank's branches have online
connectivity, which enables the bank to offer speedy funds transfer facilities to its
customers. Multi-branch access is also provided to retail customers through the branch
network and Automated Teller Machines (ATMs).

The Bank has made substantial efforts and investments in acquiring the best technology
available internationally, to build the infrastructure for a world class bank. The Bank's
business is supported by scalable and robust systems which ensure that our clients
always get the finest services we offer.

The Bank has prioritized its engagement in technology and the internet as one of its
key goals and has already made significant progress in web-enabling its core
businesses. In each of its businesses, the Bank has succeeded in leveraging its market
position, expertise and technology to create a competitive advantage and build market
share.

BUSINESSES
HDFC Bank offers a wide range of commercial and transactional banking services and
treasury products to wholesale and retail customers. The bank has three key business
segments:

1.Wholesale Banking Services

The Bank's target market ranges from large, blue-chip manufacturing companies in the
Indian corporate to small & mid-sized corporate and agree-based businesses. For these
customers, the Bank provides a wide range of commercial and transactional banking
services, including working capital finance, trade services, transactional services, cash
management, etc. The bank is also a leading provider of structured solutions, which
combine cash management services with vendor and distributor finance for facilitating
superior supply chain management for its corporate customers. Based on its superior
product delivery / service levels and strong customer orientation, the Bank has made
significant insignificant inroads into the banking consortia of a number of leading
Indian corporate including multinationals, companies from the domestic business
houses and prime public sector companies. It is recognized as a leading provider of
cash management and transactional banking solutions to corporate customers, mutual
funds, stock exchange members and banks.

2. Retail Banking Services

The objective of the Retail Bank is to provide its target market customers a full range
of financial products and banking services, giving the customer a one-stop window for
all his/her banking requirements. The products are backed by world-class service and
delivered to the customers through the growing branch network, as well as through
alternative delivery channels like ATMs, Phone Banking, Net Banking and Mobile
Banking.

The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank
Plus and the Investment Advisory Services programs have been designed keeping in
mind needs of customers who seek distinct financial solutions, information and advice
on various investment avenues. The Bank also has a wide array of retail loan products
including Auto Loans, Loans against marketable securities, Personal Loans and Loans
for Two-wheelers. It is also a leading provider of Depository Participant (DP) services
for retail customers, providing customers the facility to hold their
investmentsinelectronicform.

HDFC Bank was the first bank in India to launch an International Debit Card in
association with VISA (VISA Electron) and issues the MasterCard Maestro debit card
as well. The Bank launched its credit card business in late 2001. By September 30,
2005, the bank had a total card base (debit and credit cards) of 5.2 million cards. The
Bank is also one of the leading players in the "merchant acquiring" business with over
50,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at merchant
establishments.

3.Treasury
Within this business, the bank has three main product areas - Foreign Exchange and
Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the
liberalization of the financial markets in India, corporate need more sophisticated risk
management information, advice and product structures. These and fine pricing on
various treasury products are provided through the bank's Treasury team. To comply
with statutory reserve requirements, the bank is required to hold 25% of its deposits in
government securities. The Treasury business is responsible for managing the returns
and market risk on this investment portfolio.

AWARDS AND RECOGONOTION

HDFC Bank began operations in 1995 with a simple mission: to be a "World-class

Indian Bank". We realized that only a single-minded focus on product quality and
service excellence would help us get there. Today, we are proud to say that we are well
on our way towards that goal.

It is extremely gratifying that our efforts towards providing customer convenience have
been appreciated both nationally and internationally.

CODE OF CORPORATE GOVERNANCE

The Bank believes in adopting and adhering to best recognized corporate governance
practices and continuously benchmarking itself against each such practice. The Bank
understands and respects its fiduciary role and responsibility to shareholders and strives
hard to meet their expectations. The Bank believes that best board practices,
transparent disclosures and shareholder empowerment are necessary for creating
shareholder value.

The Bank has infused the philosophy of corporate governance into all its activities. The
philosophy on corporate governance is an important tool for shareholder protection and
maximization of their long term values. The cardinal principles such as independence,
accountability and responsibility.

Code of ethics

This Code of Ethics / Conduct intends to ensure adherence to highest business and
ethical standards while conducting the business of the Bank and compliance with the
legal and regulatory requirements, including compliance of Section 406 of the
Sarbanes-Oxley Act of 2002 and the rules and regulations framed there under by the
Securities and Exchange Commission of USA and other statutory and regulatory
authorities in India and USA. The Bank values the ethical business standards very
highly and intends adherence thereto in every segment of its business.

MERGERS & ACCQUISITION

Times bank AMALGAMATION

In a milestone transaction in the Indian banking industry, Times Bank Limited (another
new private sector bank promoted by Bennett, Coleman & Co./Times Group) was
merged with HDFC Bank Ltd., effective February 26, 2000. As per the scheme of
amalgamation approved by the shareholders of both banks and the Reserve Bank of
India, shareholders of Times Bank received 1 share of HDFC Bank for every 5.75
shares of Times Bank. The acquisition added significant value to HDFC Bank in terms
of increased branch network, expanded geographic reach, enhanced customer base,
skilled manpower and the opportunity to cross-sell and leverage alternative delivery
channels

HDFC Bank acquires Centurion Bank of Punjab

HDFC Bank, Centurion swap ratio fixed at 1:29

HDFC Bank Board on 25th February 2008 approved the acquisition of Centurion
Bank of Punjab (CBoP) for Rs 9,510 crore in one of the largest merger in the financial
sector in India. CBoP shareholders will get one share of HDFC Bank for every 29
sharesheld by them.

This will be HDFC Bank’s second acquisition after Times Bank. HDFC Bank will
jump to the 7th position among commercial banks from 10th after the merger.
However, the merged entity would become second largest private sector bank.

The merger will strengthen HDFC Bank's distribution network in the northern and the
southern regions. CBoP has close to 170 branches in the north and around 140
branches in the south. CBoP has a concentrated presence in the in the Indian states of
Punjab and Kerala. The combined entity will have a network of 1148 branches. HDFC
will also

acquire a strong SME (small and medium enterprises) portfolio from CBoP. There is
not much of overlapping of HDFC Bank and CBoP customers.

The entire process of the merger would take about four months for completion. The
merged entity will be known as HDFC Bank. Rana Talwar's Sabre Capital would hold
less than 1 per cent stake in the merged entity from 3.48 in CBoP, while Bank
Muscat's holding will decline to less than 4 per cent from over 14 per cent in CBoP.
HDFC shareholding falls to will fall from 23.28 per cent to around 19 per cent in the
merged entity.
Mr Rana Talwar, Chairman of Centurion Bank, has been offered a seat on the Board as
non-executive director and Mr Shailendra Bhandari, Managing Director, Centurion
Bank, has been invited to join as the Executive Director on the board post merger.
CHAPTER - 3

OBJECTIVES

&

SCOPE
OBJECTIVES OF THE STUDY

1. To find out the Preferences of the investors for Asset Management

Company.

2. To know the Preferences for the portfolios.

3. To know why one has invested or not invested in HDFC Mutual fund

4. To find out the most preferred channel.

5. To find out what should do to boost Mutual Fund Industry.

6. To find the causes of on other investment centers.

Scope of the study

A large number of new players have entered the market and trying to gain

market share in this rapidly improving market.

The research was carried on in Kanpur. I had been sent at one of the

branch of Hdfc Bank Ltd. Kanpur where I completed my Project work. I

surveyed on my Project Topic “A detailed Analysis of consumer

Behaviors Towards Mutual Fund Of HDFC Bank” on the visiting

customers of the HDFC Civil Line Branch.

The study will help to know the preferences of the customers, which

company, portfolio, mode of investment, and option for getting return and

so on they prefer. This project report may help the company to make

further planning and strategy.

CHAPTER – 4
 RESEARCH

METHODOLOGY

RESEARCH METHODOLOGY

This report is based on primary as well secondary data, however primary

data collection was given more importance since it is overhearing factor in

attitude studies. One of the most important users of research methodology

is that it helps in identifying the problem, collecting, analyzing the

required information data and providing an alternative solution to the

problem .It also helps in collecting the vital information that is required by

the top management to assist them for the better decision making both day

to day decision and critical ones.

Data sources:

Research is totally based on primary data. Secondary data can be used

only for the reference. Research has been done by primary data collection,

and primary data has been collected by interacting with various people.

The secondary data has been collected through various journals and

websites.

Duration of Study:

The study was carried out for a period of two months, from 30th May to

30th July 2010.

Sampling:

 Sampling procedure:
The sample was selected of them who are the customers/visitors of HDFC

Bank Ltd. Civil Line Branch, irrespective of them being investors or not or

availing the services or not. It was also collected through personal visits to

persons, by formal and informal talks and through filling up the

questionnaire prepared. The data has been analyzed by using

mathematical/Statistical tool.

 Sample size:

The sample size of my project is limited to 200 people only. Out of which

only 120 people had invested in Mutual Fund. Other 80 people did not

have invested in Mutual Fund.

Limitation:
 Some of the persons were not so responsive.

 Possibility of error in data collection because many of investors may

have not given actual answers of my questionnaire.

 Sample size is limited to 200 visitors of Hdfc Bank Ltd. Civil Line

Branch, Kanpur out of these only 120 had invested in Mutual Fund.

The sample size may not adequately represent the whole market.

 Some respondents were reluctant to divulge personal information

which can affect the validity of all responses.

 The research is confined to a certain part of Kanpur.

 CHAPTER – 5

DATA ANALYSIS
&
INTERPRETATION

ANALYSIS & INTERPRETATION OF THE DATA

1. (a) Age distribution of the Investors of Dehradoon

Age Group <= 30 31-35 36-40 41-45 46-50 >50

No. of 12 18 30 24 20 16
Investors

35
Investors invested in Mutual Fund

30

25

20

15 30
24
10 18 20
16
5 12

0
<=30 31-35 36-40 41-45 46-50 >50
Age group of the Investors

Interpretation:

According to this chart out of 120 Mutual Fund investors of Kanpur the

most are in the age group of 36-40 yrs. i.e. 25%, the second most investors

are in the age group of 41-45yrs i.e. 20% and the least investors are in the

age group of below 30 yrs.

(b). Educational Qualification of investors of Kanpur

Educational Number of
Qualification Investors
Graduate/ Post Graduate 88
Under Graduate 25
Others 7
Total 120
 6%
23%

71%

Graduate/Post Graduate Under Graduate Others

Interpretation:
Out of 120 Mutual Fund investors 71% of the investors in Kanpur are

Graduate/Post Graduate, 23% are Under Graduate and 6% are others

(under HSC).

c). Occupation of the investors of Kanpur

Occupation No. of Investors

Govt. Service 30
Pvt. Service 45
Business 35
Agriculture 4
Others 6

50
No. of Investors

40
30
20 45
35 30
10
4 6
0
Govt. Pvt. Business Agriculture Others
Service Service
Occupation of the customers
Interpretation:

In Occupation group out of 120 investors, 38% are Pvt. Employees,

25% are Businessman, 29% are Govt. Employees, 3% are in

Agriculture and 5% are in others.

(d). Monthly Family Income of the Investors of Kanpur.

Income Group No. of Investors

<=10,000 5
10,001-15,000 12
15,001-20,000 28
20,001-30,000 43
>30,000 32

50
45
40
No. of Investors

35
30
25
20 43
15 32
28
10
5 12
5
0
<=10 10-15 15-20 20-30 >30
Income Group of the Investorsn (Rs. in Th.)

Interpretation:
In the Income Group of the investors of Kanpur, out of 120

investors, 36% investors that is the maximum investors are in the

monthly income group Rs. 20,001 to Rs. 30,000, Second one i.e.

27% investors are in the monthly income group of more than Rs.

30,000 and the minimum investors i.e. 4% are in the monthly

income group of below Rs. 10,000

(2) Investors invested in different kind of investments.

Kind of Investments No. of Respondents

Saving A/C 195
Fixed deposits 148
Insurance 152
Mutual Fund 120
Post office (NSC) 75
Shares/Debentures 50
Gold/Silver 30
Real Estate 65
 Kinds of Investment 65
30
50

r
ve
NS /Sil
75
d
ol

C)
120
G
152
ce(
148
ffi

ce
O

an

195
st

ur
Po

c
In

A/

0 50 100 150 200 250

g n
vi
Sa

No.of Respondents

Interpretation: From the above graph it can be inferred that out of 200

people, 97.5% people have invested in Saving A/c, 76% in Insurance, 74%

in Fixed Deposits, 60% in Mutual Fund, 37.5% in Post Office, 25% in

Shares or Debentures, 15% in Gold/Silver and 32.5% in Real Estate.

3. Preference of factors while investing

 Factors (a) Liquidity (b) Low Risk (c) High Return (d) Trust

No. of 40 60 64 36

Respondents

18% 20%

32% 30%

Liquidity Low Risk High Return Trust

Interpretation:

Out of 200 People, 32% People prefer to invest where there is High

Return, 30% prefer to invest where there is Low Risk, 20% prefer easy

Liquidity and 18% prefer Trust

4. Awareness about Mutual Fund and its Operations

Response Yes No
No. of Respondents 135 65
 33%

67%

Yes No

Interpretation:

From the above chart it is inferred that 67% People are aware of Mutual

Fund and its operations and 33% are not aware of Mutual Fund and its

operations.

5. Source of information for customers about Mutual Fund

Source of information No. of Respondents

 Advertisement 18
Peer Group 25
Bank 30
Financial Advisors 62

70
60
Respondents

50
No. of

40
30 62
20
25 30
10 18
0
AdvertisementPeer Group Bank Financial
Advisors
Source of Information

Interpretation:

From the above chart it can be inferred that the Financial Advisor is the

most important source of information about Mutual Fund. Out of 135

Respondents, 46% know about Mutual fund Through Financial Advisor,

22% through Bank, 19% through Peer Group and 13% through

Advertisement.

6. Investors invested in Mutual Fund

Response No. of Respondents

YES 120
NO 80
 Total 200

No
40%

Yes
60%

Interpretation:

Out of 200 People, 60% have invested in Mutual Fund and 40% do not

have invested in Mutual Fund.

7. Reason for not invested in Mutual Fund

Reason No. of Respondents

Not Aware 65
Higher Risk 5
 Not any Specific 10

Reason

6%
13%

81%
Not Aware Higher Risk Not Any

Interpretation:

Out of 80 people, who have not invested in Mutual Fund, 81% are not

aware of Mutual Fund, 13% said there is likely to be higher risk and 6%

do not have any specific reason.

8. Investors invested in different Assets Management Co. (AMC)

Name of AMC No. of Investors

SBIMF 55
UTI 75
HDFC 30
Reliance 75
ICICI Prudential 56
Kotak 45
 Others 70

Others
70
HDFC
30
Name of AMC

Kotak 45
SBIMF
55
ICICI
56
Reliance
75
UTI 75

0 20 40 60 80
No. of Investors

Interpretation:

In Kanpur most of the Investors preferred UTI and Reliance Mutual Fund.

Out of 120 Investors 62.5% have invested in each of them, only 46% have

invested in SBIMF, 47% in ICICI Prudential, 37.5% in Kotak and 25% in

HDFC.

9. Reason for invested in HDFCMF

Reason No. of Respondents

Associated with Hdfc 35
Better Return 5
Agents Advice 15
 27%

9% 64%

Associated with SBI Better Return AgentsAdvice

Interpretation:

Out of 55 investors of HDFCMF 64% have invested because of its

association with Brand HDFC, 27% invested on Agent’s Advice, 9%

invested because of better return.

10. Reason for not invested in HDFCMF

Reason No. of Respondents

Not Aware 25
Less Return 18
Agent’s Advice 22
 34%
38%

28%
Not Aware Less Return Agent's Advice

Interpretation:

Out of 65 people who have not invested in HDFCMF, 38% were not aware

with HDFCMF, 28% do not have invested due to less return and 34% due

to Agent’s Advice.

11. Preference of Investors for future investment in Mutual Fund

 Name of AMC No. of Investors
SBIMF 76
UTI 45
HDFC 35
Reliance 82
ICICI Prudential 80
Kotak 60
Others 75

Others 75

Kotak 60
Name of AMC

ICICI Prudential 80

Reliance 82

HDFC 35

UTI 45

SBIMF 76

0 20 40 60 80 100

No. of Investors

Interpretation:
Out of 120 investors, 68% prefer to invest in Reliance, 67% in ICICI

Prudential, 63% in SBIMF, 62.5% in Others, 50% in Kotak, 37.5% in UTI

and 29% in HDFC Mutual Fund.

12. Channel Preferred by the Investors for Mutual Fund Investment

Channel Financial Advisor Bank AMC

No. of 72 18 30

Respondents

25%

60%
15%

Financial Advisor Bank AMC

Interpretation:
Out of 120 Investors 60% preferred to invest through Financial Advisors,

25% through AMC and 15% through Bank.

13. Mode of Investment Preferred by the Investors

Mode of Investment One time Investment Systematic Investment Plan (SIP)

No. of Respondents 78 42

35%

65%

One time Investment SIP

Interpretation:
Out of 120 Investors 65% preferred One time Investment and 35 %

Preferred through Systematic Investment Plan.

14. Preferred Portfolios by the Investors

Portfolio No. of Investors

Equity 56
Debt 20
Balanced 44

37%
46%

17%

Equity Debt Balance

Interpretation:
From the above graph 46% preferred Equity Portfolio, 37% preferred

Balance and 17% preferred Debt portfolio

15. Option for getting Return Preferred by the Investors

Option Dividend Payout Dividend Growth

Reinvestment
No. of 25 10 85

Respondents

21%

8%

71%

Dividend Payout Dividend Reinvestment Growth

Interpretation:
From the above graph 71% preferred Growth Option, 21% preferred

Dividend Payout and 8% preferred Dividend Reinvestment Option.

16. Preference of Investors whether to invest in Sectoral Funds

Response No. of Respondents

Yes 25
No 95

21%

79%
Yes No

Interpretation:
Out of 120 investors, 79% investors do not prefer to invest in Sectoral

Fund because there is maximum risk and 21% prefer to invest in Sectoral

Fund.

CHAPTER – 6

FINDINGS

&

CONCLUSION
..
 Findings

 In Kanpur in the Age Group of 36-40 years were more in numbers. The

second most Investors were in the age group of 41-45 years and the least were in

the age group of below 30 years.

 In Kanpur most of the Investors were Graduate or Post Graduate and below

HSC there were very few in numbers.

 In Occupation group most of the Investors were Govt. employees, the

second most Investors were Private employees and the least were associated with

Agriculture.

 In family Income group, between Rs. 20,001- 30,000 were more in

numbers, the second most were in the Income group of more than Rs.30,000 and

the least were in the group of below Rs. 10,000.

 About all the Respondents had a Saving A/c in Bank, 76% Invested in

Fixed Deposits, Only 60% Respondents invested in Mutual fund.

 Mostly Respondents preferred High Return while investment, the second

most preferred Low Risk then liquidity and the least preferred Trust.
 Only 67% Respondents were aware about Mutual fund and its operations

and 33% were not.

 Among 200 Respondents only 60% had invested in Mutual Fund and 40%

did not have invested in Mutual fund.

 Out of 80 Respondents 81% were not aware of Mutual Fund, 13% told

there is not any specific reason for not invested in Mutual Fund and 6% told there

is likely to be higher risk in Mutual Fund.

 Most of the Investors had invested in Reliance or UTI Mutual Fund, ICICI

Prudential has also good Brand Position among investors, HDFCMF places after

ICICI Prudential according to the Respondents.

 Out of 55 investors of HDFCMF 64% have invested due to its association

with the Brand SBI, 27% Invested because of Advisor’s Advice and 9% due to

better return.

 Most of the investors who did not invested in SBIMF due to not Aware of

HDFCMF, the second most due to Agent’s advice and rest due to Less Return.

 For Future investment the maximum Respondents preferred Reliance

Mutual Fund, the second most preferred ICICI Prudential, HDFCMF has been

preferred after them.

 60% Investors preferred to Invest through Financial Advisors, 25% through

AMC (means Direct Investment) and 15% through Bank.

 65% preferred One Time Investment and 35% preferred SIP out of both

type of Mode of Investment.

 The most preferred Portfolio was Equity, the second most was Balance

(mixture of both equity and debt), and the least preferred Portfolio was Debt

portfolio.

 Maximum Number of Investors Preferred Growth Option for returns, the

second most preferred Dividend Payout and then Dividend Reinvestment.

 Most of the Investors did not want to invest in Sectoral Fund, only 21%

wanted to invest in Sectoral Fund.

 Conclusion

Running a successful Mutual Fund requires complete understanding of the

peculiarities of the Indian Stock Market and also the psyche of the small

investors. This study has made an attempt 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

have fear 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 Kanpur 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, HDFCMF, 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

like Principle, Yongistan, 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 AMC

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.
CHAPTER – 7

SUGGESTIONS

&
RECOMMENDATIONS
 Suggestions and 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 actually 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 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 EMI.

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.

QUESTIONNARE ON MUTUAL FUND

NAME:…………………………………………

AGE:……………………….

MONTHLYINCOME:…………………………. OCCUPATION:

………………………
1. What is your source of information while investing in mutual

funds?

a)Internet

b)Magazine

c)Newspaper

d)FinancialAdvisor

e)Spouse

f)Friends

g)Advertisements

2.Are you a regular or a new investor in mutual fund?

a)Regular b)New

3. Your investment portfolio consists in %)

a)RealEstate

b)Postofficeschemes

c)MutualFunds

d)Debt

e)Shares

f)FixedDeposits

4. Which type of fund you prefer the most?

a)Regularincome
b)Debt

c)DiversifiedEquity

d)Sectorfunds

e)ELSS(taxshield)

5 . Which Features attract you the most while choosing a specific

MutualFund?

a)Flexibility

b)Return

c)Managedbyprofessionalpeople

d)RiskDiversion

e)LessExpenses

6. What type of Mutual Fund Scheme you prefer?

a)OpenEndedScheme

b)CloseEndedScheme

7. What type of return you expect?

Monthly [ ] Quarterly [ ]

Semi annual [ ] Annual [ ]

8. What is your investment horizon?

Up to 6 months [ ]Up to 1 year [ ]

Up to 2 years [ ]

Up to 3 years [ ]

Up to 5 years [ ]

Up to 10 years [ ]

9. What are your near future liabilities?

Childmarriage

Education

Any other please specify………………………….

BIBLIOGRAPHY

• NEWS PAPERS (Business times, sahara india etc.)

• OUTLOOK MONEY

• TELEVISION CHANNEL (CNBC AAWAJ)

• MUTUAL FUND HAND BOOK

• FACT SHEET AND STATEMENT

• WWW.HDFCMF.COM

• WWW.MONEYCONTROL.COM

• WWW.AMFIINDIA.COM
• WWW.ONLINERESEARCHONLINE.COM

• WWW. MUTUALFUNDSINDIA.COM