HDFC Mutual Fund has been constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882, as per the terms of the trust deed dated June 8, 2000 with Housing Development Finance Corporation Limited (HDFC) and Standard Life Investments Limited as the Sponsors / Settlors and HDFC Trustee Company Limited, as the Trustee. The Trust Deed has been registered under the Indian Registration Act, 1908. The Mutual Fund has been registered with SEBI, under registration code MF/044/00/6 on June 30, 2000. HDFC Mutual Fund is one of the largest mutual funds and well-established fund house in the country with focus on delivering consistent fund performance across categories since the launch of the first scheme(s) in July 2000. While our past experience does make us a veteran, but when it comes to investments, we have never believed that the experience is enough.
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. 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. Our strong emphasis on managing and controlling portfolio risk avoids chasing the latest "fads" and trends.
Birla Sun Life Mutual Fund is a joint venture between Aditya Birla Group and Sun Life Financial. The Aditya Birla Group is India's first truly multinational corporation. It is a dominant player in viscose staple fibre, non-ferrous metals, cement, viscose filament yarn, branded apparel, carbon black, chemicals, fertilisers, sponge iron, insulators, financial services, telecom, BPO and IT services. Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products. The company has operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda.
Aditya Birla Sun Life AMC Limited (formerly known as Birla Sun Life Asset Management Company Limited) follows a long-term, fundamental research based approach to investment. The approach is to identify companies, which have excellent growth prospects and strong fundamentals. The fundamentals include the quality of the company’s management, sustainability of its business model and its competitive position, amongst other factors. The vision is to be a leader and role model in a broad based and integrated financial services business.
MORE ABOUT MUTUAL FUND
Mutual fund is the pool of the money, based on the trust who invests the savings of many investors who shares a common financial goal, like the capital appreciation and dividend earning. The money thus collect is then invested in capital market instruments such as shares, debenture, and foreign market. Investors invest money and get the units as per the unit value which we called as NAV (net assets value). Mutual fund is the most suitable investment for the common man as it offers an opportunity to invest in diversified portfolio management, good research team, professionally managed.
Indian stock as well as the foreign market, the main aim of the fund manager is to take the scrip that have under value and future will rising, then fund manager sells out the stock. Fund manager concentration on risk – return trade off, where minimize the risk and maximize the return through diversification of the portfolio. The most common features of the mutual fund unit are low cost.
Investors in India opt for the tax-saving mutual fund schemes for the simple reason that it helps them to save money. The tax-saving mutual funds or the equity-linked savings schemes (ELSS) receive certain tax exemptions under Section 88 of the Income Tax Act. There are several companies in India that offer – tax – saving mutual fund schemes in the country.
· We must examine in detail the growth pattern of public and private sector mutual funds in Indian scenario and its impact on the financial market.
· To find out the types of close-end and open-end mutual fund schemes that are most popular with Indian investors and reasons for the same.
· We have to evaluate and compare the performance of different mutual fund schemes in India with reference to different performance indicators viz. rates of return, expense ratio, rate of dividend, investment pattern and rate of appreciation in NAV vis-à-vis BSE index.
· To study the existing organizational structure of mutual funds, marketing as well as the regulatory framework operating in India for mutual funds.
· To identify the various problems and challenges which may be faced by the public and private sector mutual funds in the future and to suffer suggestion for improving in the future and to suffer suggestion for improving the working thereof.
NET ASSET VALUE
NAV is often associated with mutual funds, and helps an investor determine if the fund is overvalued or undervalued. When we talk of open-end funds, NAV is crucial. NAV gives the fund's value that an investor will be entitled to at the time of withdrawal of investment. In case of a close-end fund, which is a mutual fund with fixed number of units, price per unit is determined by market and is either below or above the NAV. Net asset value (NAV) is the value of a fund's asset less the value of its liabilities per unit.
NAV = (Value of Assets-Value of Liabilities) /number of units outstanding
In the context of mutual funds, NAV per share is computed once per day based on the closing market prices of the securities in the fund's portfolio. All of the buy and sell orders for mutual funds are processed at the NAV of the trade date. However, investors must wait until the following day to get the trade price. Mutual funds pay out virtually all of their income and capital gains. As a result, changes in NAV are not the best gauge of mutual fund performance, which is best measured by annual total return.
CALCULATION - The net asset value formula is used to calculate a mutual fund's value per share. A mutual fund is a pool of investments that are divided into shares to be purchased by investors. Each share contains a weighted portion of each investment in the collective pool. The premise of grouping in this manner is to minimize risk by diversifying.
It is important to note that net asset value does not look at future dividends and growth as do other stock and bond valuation methods. The formula for net asset value only looks at the fund's per share value based on its net assets.
The net asset value is determined by the mutual fund company and priced according to this formula. Stock and bond valuation methods are not used due to mutual funds being sold directly from the company and not through an exchange or on the secondary market. Stocks, on the other hand, are sold through bid and ask pricing on the secondary market which requires an investor to determine a share's value to them based on expected future earnings, in which they bid accordingly.
Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In ii researcher pursue various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them. It is necessary to know not only the research methods and techniques but also the methodology. Mutual Fund set assumption regarding equity schemes provided same return and risk.
LIMITATIONS OF THE STUDY
The research analysis was based on the past performance of the only selected Scheme. iv. The research had been based on the Net Assets Value, that NAV continuous fluctuation
The research analysis compares the Net Assets Value and Expense Ratio, but NAV continuous fluctuation.
Fund manager investment style based on capital market situation. It could not possible always pursue the mentioned objectives. Equity Diversified schemes having different objectives due to sector wise allocation of the fund.
Performance measurement techniques should not give equal weight to each of the scheme. Sharpen Performance evaluation is based on variance, not cover market risk and that risk also affect fund return.
NAV History of AdityaDirla Sunlife Insurance:
Net Asset Value
NAV History of HDFC Mutual Fund:
Net Asset Value
Mutual funds have emerged as the best in terms of variety, flexibility, diversification, liquidity as well as tax benefits. In Bangladesh, the mutual fund industry is at a growing stage and it is incorporating a higher number of new funds each year. It can be noted that the growth oriented mutual funds have not performed better than their respect to volatility most of the funds have not performed better. Growth oriented mutual funds are expected to offer the advantages of Diversification, market timing and selectivity. In the sample, funds are not highly diversified unless few mutual funds and because of their high diversification they have reduced total risk of portfolio
Whereas, other mutual funds have low diversified portfolio and have more risk. For broadening the depth of the capital market, it is necessary to float more mutual funds since these are good instruments of mobilizing savings and providing investment opportunities to small savers. Although still small in size, mutual funds have contributed toward broadening the base of the country’s capital market and helped the investors to gain high and relatively secure returns.
Despite bright prospects of mobilizing savings and providing investment opportunities to small savers and the ability to meet different risk profiles through providing a wide range of products, one major factor as to why the mutual funds have not emerged as a preferred saving mode is the lack of availability of quality shares and the underdeveloped state of the capital market.
Symbiosis Law School, Hyderabad