Comparative Performance Analysis of DSP Black Rock & HDFC Mutual Fund Schemes
1. COMPARATIVE
PERFORMANCE ANALYSIS
BETWEEN
DSP BLACK ROCK
&
HDFC MUTUAL FUND
&
GUIDENCE BY:-
SUBMITTED BY:-
ASST. PROF. MR. MANISH SHRIVASTAVA ARPIT
GOSWAMI
2. ASST.PROF. MR. RAHUL PANDEY
M.B.A. 1 ST SEM
BTIRT COLLEGE
SAGAR (M.P.
ACKNOWLEDGEMENT
I take this opportunity to place on record my grateful
thanks and sincere gratitude to all those who gave me
valuable advice and input for my study.
My study could not have
been completed it I had not been able to get the reference
materials from the company.
I express my sincere regards to
Asst. Prof. Mr. Manish shrivastava and Asst. Prof. Mr.
Rahul pandey for valuable support and guidance.
Last but not least, I would also
like to express. My thanks to my father and my other
family members who inspired me to put my best effort for
the project report.
ARPIT GOSWAMI
M.B.A. 1st SEM
BTIRT COLLEGE
SAGAR (M.P.)
3. DECLARATION
I Arpit Goswami s/o late Mr. P.G. Goswami , student of
M.B.A.(1ST SEM) hereby declare that the desertion entitled
comparative performance analysis between DSP Black rock
& HDFC mutual fund is the outcome of my authentic work
and same has not been submitted to any university, institute
for the declared of any degree or any professional diploma.
ARPIT GOSWAMI
M.B.A. 1st SEM
BTIRT COLLEGE
SAGAR (M.P.)
4. Introduction
Different investment avenues are available to investors. Mutual funds also
offer good investment opportunities to the investors. Like all investments,
they also carry certain risks. The investors should compare the risks and
expected yields after adjustment of tax on various instruments while taking
investment decisions. The investors may seek advice from experts and
consultants including agents and distributors of mutual funds schemes while
making investment decisions.
With an objective to make the investors aware of functioning of mutual
funds, an attempt has been made to provide information in question-answer
format which may help the investors in taking investment decisions.
What is a Mutual Fund?
Mutual fund is a mechanism for pooling the resources by issuing units to the
investors and investing funds in securities in accordance with objectives as
disclosed in offer document.
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.
The profits or losses are shared by the investors in proportion to their
investments. The mutual funds normally come out with a number of schemes
with different investment objectives which are launched from time to time.
A mutual fund is required to be registered with Securities and Exchange
5. Board of India (SEBI) which regulates securities markets before it can
collect funds from the public.
What is the history of Mutual Funds in
India and role of SEBI in mutual funds
industry?
Unit Trust of India was the first mutual fund set up in India in the year 1963.
In early 1990s, Government allowed public sector banks and institutions to
set up mutual funds.
In the year 1992, Securities and exchange Board of India (SEBI) Act was
passed. The objectives of SEBI are – to protect the interest of investors in
securities and to promote the development of and to regulate the securities
market.
As far as mutual funds are concerned, SEBI formulates policies and
regulates the mutual funds to protect the interest of the investors. SEBI
notified regulations for the mutual funds in 1993. Thereafter, mutual funds
sponsored by private sector entities were allowed to enter the capital market.
The regulations were fully revised in 1996 and have been amended thereafter
from time to time. SEBI has also issued guidelines to the mutual funds from
time to time to protect the interests of investors.
All mutual funds whether promoted by public sector or private sector entities
including those promoted by foreign entities are governed by the same set of
Regulations. There is no distinction in regulatory requirements for these
mutual funds and all are subject to monitoring and inspections by SEBI. The
risks associated with the schemes launched by the mutual funds sponsored
by these entities are of similar type. It may be mentioned here that Unit Trust
of India (UTI) is not registered with SEBI as a mutual fund (as on January
15, 2002).
6. How is a mutual fund set up?
A mutual fund is set up in the form of a trust, which has sponsor, trustees,
asset Management Company (AMC) and custodian. The trust is established
by a sponsor or more than one sponsor who is like promoter of a company.
The trustees of the mutual fund hold its property for the benefit of the unit
holders. Asset Management Company (AMC) approved by SEBI manages
the funds by making investments in various types of securities. Custodian,
who is registered with SEBI, holds the securities of various schemes of the
fund in its custody. The trustees are vested with the general power of
superintendence and direction over AMC. They monitor the performance
and compliance of SEBI Regulations by the mutual fund.
SEBI Regulations require that at least two thirds of the directors of trustee
company or board of trustees must be independent i.e. they should not be
associated with the sponsors. Also, 50% of the directors of AMC must be
independent. All mutual funds are required to be registered with SEBI before
they launch any scheme. However, Unit Trust of India (UTI) is not
registered with SEBI (as on January 15, 2002).
How to invest in a scheme of a mutual fund?
Mutual funds normally come out with an advertisement in newspapers
publishing the date of launch of the new schemes. Investors can also contact
the agents and distributors of mutual funds who are spread all over the
country for necessary information and application forms. Forms can be
deposited with mutual funds through the agents and distributors who provide
such services. Now a day, the post offices and banks also distribute the units
of mutual funds. However, the investors may please note that the mutual
funds schemes being marketed by banks and post offices should not be taken
as their own schemes and no assurance of returns is given by them. The only
7. role of banks and post offices is to help in distribution of mutual funds
schemes to the investors.
Investors should not be carried away by commission/gifts given by
agents/distributors for investing in a particular scheme. On the other hand
they must consider the track record of the mutual fund and should take
objective decisions
What is Net Asset Value (NAV) of a scheme?
The performance of a particular scheme of a mutual fund is denoted by Net
Asset Value (NAV).
Mutual funds invest the money collected from the investors in securities
markets. In simple words, Net Asset Value is the market value of the
securities held by the scheme. Since market value of securities changes
every day, NAV of a scheme also varies on day to day basis. The NAV per
unit is the market value of securities of a scheme divided by the total number
of units of the scheme on any particular date. For example, if the market
value of securities of a mutual fund scheme is Rs 200 lakhs and the mutual
fund has issued 10 lakhs units of Rs. 10 each to the investors, then the NAV
per unit of the fund is Rs.20. NAV is required to be disclosed by the mutual
funds on a regular basis - daily or weekly - depending on the type of scheme.
What are the different types of mutual fund
schemes?
Schemes according to Maturity Period
A mutual fund scheme can be classified into open-ended scheme or close-
ended scheme depending on its maturity period.
# Open-ended Fund/ Scheme
An open-ended fund or scheme is one that is available for subscription and
repurchase on a continuous basis. These schemes do not have a fixed
maturity period. Investors can conveniently buy and sell units at Net Asset
8. Value (NAV) related prices which are declared on a daily basis. The key
feature of open-end schemes is liquidity.
# Close-ended Fund/ Scheme
A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years.
The fund is open for subscription only during a specified period at the time
of launch of the scheme. Investors can invest in the scheme at the time of the
initial public issue and thereafter they can buy or sell the units of the scheme
on the stock exchanges where the units are listed. In order to provide an exit
route to the investors, some close-ended funds give an option of selling back
the units to the mutual fund through periodic repurchase at NAV related
prices. SEBI Regulations stipulate that at least one of the two exit routes is
provided to the investor i.e. either repurchase facility or through listing on
stock exchanges. These mutual funds schemes disclose NAV generally on
weekly basis.
# Schemes according to Investment Objective
A scheme can also be classified as growth scheme, income scheme, or
balanced scheme considering its investment objective. Such schemes may be
open-ended or close-ended schemes as described earlier. Such schemes may
be classified mainly as follows:
# Growth / Equity Oriented Scheme
The aim of growth funds is to provide capital appreciation over the medium
to long- term. Such schemes normally invest a major part of their corpus in
equities. Such funds have comparatively high risks. These schemes provide
different options to the investors like dividend option, capital appreciation,
etc. and the investors may choose an option depending on their preferences.
The investors must indicate the option in the application form. The mutual
funds also allow the investors to change the options at a later date. Growth
9. schemes are good for investors having a long-term outlook seeking
appreciation over a period of time.
# Income / Debt Oriented Scheme
The aim of income funds is to provide regular and steady income to
investors. Such schemes generally invest in fixed income securities such as
bonds, corporate debentures, Government securities and money market
instruments. Such funds are less risky compared to equity schemes. These
funds are not affected because of fluctuations in equity markets. However,
opportunities of capital appreciation are also limited in such funds. The
NAVs of such funds are affected because of change in interest rates in the
country. If the interest rates fall, NAVs of such funds are likely to increase in
the short run and vice versa. However, long term investors may not bother
about these fluctuations.
# Balanced Fund
The aim of balanced funds is to provide both growth and regular income as
such schemes invest both in equities and fixed income securities in the
proportion indicated in their offer documents. These are appropriate for
investors looking for moderate growth. They generally invest 40-60% in
equity and debt instruments. These funds are also affected because of
fluctuations in share prices in the stock markets. However, NAVs of such
funds are likely to be less volatile compared to pure equity funds.
# Money Market or Liquid Fund
These funds are also income funds and their aim is to provide easy liquidity,
preservation of capital and moderate income. These schemes invest
exclusively in safer short-term instruments such as treasury bills, certificates
of deposit, commercial paper and inter-bank call money, government
10. securities, etc. Returns on these schemes fluctuate much less compared to
other funds. These funds are appropriate for corporate and individual
investors as a means to park their surplus funds for short periods.
# Gilt Fund
These funds invest exclusively in government securities. Government
securities have no default risk. NAVs of these schemes also fluctuate due to
change in interest rates and other economic factors as is the case with
income or debt oriented schemes.
# What are sector specific funds/schemes?
These are the funds/schemes which invest in the securities of only those
sectors or industries as specified in the offer documents. e.g.
Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG),
Petroleum stocks, etc. The returns in these funds are dependent on the
performance of the respective sectors/industries. While these funds may give
higher returns, they are more risky compared to diversified funds. Investors
need to keep a watch on the performance of those sectors/industries and
must exit at an appropriate time. They may also seek advice of an expert.
# What are Tax Saving Schemes?
These schemes offer tax rebates to the investors under specific provisions of
the Income Tax Act, 1961 as the Government offers tax incentives for
investment in specified avenues. e.g. Equity Linked Savings Schemes
11. (ELSS). Pension schemes launched by the mutual funds also offer tax
benefits. These schemes are growth oriented and invest pre-dominantly in
equities. Their growth opportunities and risks associated are like any equity-
oriented scheme.
# What is a sale or repurchase/redemption
price?
The price or NAV a unit holder is charged while investing in an open-ended
scheme is called sales price. It may include sales load, if applicable.
Repurchase or redemption price is the price or NAV at which an open-ended
scheme purchases or redeems its units from the unit holders. It may include
exit load, if applicable.
# What is an assured return scheme?
Assured return schemes are those schemes that assure a specific return to the
unit holders irrespective of performance of the scheme.
A scheme cannot promise returns unless such returns are fully guaranteed by
the sponsor or AMC and this is required to be disclosed in the offer
document.
Investors should carefully read the offer document whether return is assured
for the entire period of the scheme or only for a certain period. Some
schemes assure returns one year at a time and they review and change it at
the beginning of the next year.
12. # Major companies of mutual funds
The major fund houses which have operated in India are as follows –
1. Birla sunlife
2. Bank of Baroda
3. HDFC mutual fund
4. ING Vysya
5. ICICI prudential
6. SBI mutual fund
7. Tata
8. Kotak mahindra
9. Unit trust of India
10.Reliance mutual fund
11.IDFC
12.Sundram mutual fund
13.Religare mutual fund
14.Principal mutual fund
15.DSP Black rock
Introduction of DSP Black rock mutual fund
DSP Black Rock Investment Managers Pvt. Ltd. is a joint venture between
the DSP Group and Black Rock Inc. The DSP Group, with a track record of
over 145 years, is one of the oldest financial services firms in India. Black
Rock is the largest listed asset management company in the world, and a
13. premier provider of investment management, risk management and advisory
services to institutional, intermediary and individual investors around the
world.
Black Rock today has a major presence in most key markets across the
United States, Europe, Asia and Australia and has a deep understanding of
local markets around the world.
DSP Black Rock Investment Managers aims at investment excellence within
the framework of transparent but rigorous risk controls. The team in India is
well supported by Black Rock’s Risk and Quantitative Analysis Group,
which is a global team that supports investment managers across asset
classes, styles and markets.
View/ belief of DSP black rock
The foundation of our business lies in our belief that our investors’ needs are
of paramount importance and that our sole business is managing assets on
their behalf. Our commitment to investment excellence is anchored in a
shared culture that always places the interests of investors first, from
individuals to institutions. We believe in always acting as a fiduciary for our
investors and our steadfast integrity has helped us earn their long-term trust.
Company profile of DSP Black rock
Company name - DSP Black rock
Type - Privately held
Company size - 201-500 employees
Web site - http://www.dspblackrock.com
14. Industry - Financial services
Headquarter - 10th floor, mafatlal center narima point
Mumbai Maharashtra 400021 India
Products or funds of DSP Black rock
DSP Black rock are providing 23 types of product or mutual funds in the
Indian mutual fund market according to there Boucher and these are as :-
1. DSP Black rock liquidity fund
2. DSP Black rock floating rate fund
3. DSP Black rock money manager fund
4. DSP Black rock short term fund
5. DSP Black rock bond fund
6. DSP Black rock strategic bond fund
7. DSP Black rock government securities fund
8. DSP Black rock treasury bill fund
9. DSP Black rock cash manager fund
10.DSP Black rock savings manager fund-conservative
11.DSP Black rock manager fund-moderate
12.DSP Black rock manager fund –aggressive
13.DSP Black rock balanced fund
14. DSP Black rock equity fund
15. DSP Black rock top 100 equity fund
16. DSP Black rock opportunities fund
17. DSP Black rock technology.com fund
18.DSP Black rock India TIGER fund (THE INFRASTRUCTURE
GROWTH AND ECONOMIC REFORMS FUND)
19.DSP Black rock small and midcap fund
20.DSP Black rock tax saver fund
15. 21. DSP Black rock world gold fund
22.DSP Black rock natural resources and new energy fund
23.DSP Black rock world energy fund
Description of some products or funds
DSP black rock government securities fund
Investment objective An open ended income scheme seeking to
generate income through investment in central
government securities of various maturities
Asset allocation Types of instrument Normal allocation
pattern of scheme 1. central government (% OF Net assets)
securities repos/reverse
repos in central govt. 80%-100%
securities as may be
permitted by RBI
2. Call money market or
alternative investment
for call money market as 0%-20%
may be provided by the
RBI.
Plans and option *Growth *dividend *monthly dividend
-payout dividend -payout dividend
-reinvest dividend –reinvest dividend
Minimum purchase Additional purchase
application amt. 5000/- 1000/-
16. Systematic Rs 1000/- weekly, monthly, and quarterly options
investment plan(SIP) are available.
Systematic Rs 1000/- weekly, monthly, and quarterly options
withdrawal are available.
plan(SWP)
Name of the fund Mr. Dhawal dalal
manager
DSP Black rock Top100 equity fund
Investment objective An open ended growth scheme, seeking to
generate capital appreciation from a port folio
that is substantially constituted of equity
securities and equity related securities of the
100 largest corporates by market capitalization
listed in India
Asset allocation pattern Types of instrument Normal allocation
of scheme 1.equity and equity (%of net assets)
related securities
90%-100%
2.debt securitized debt 0%-10%
and money market
securities
Plans and option Regular plan Institutional plan
*growth *dividend *growth *dividend
-pay out dividend -pay out dividend
-reinvest dividend -reinvest dividend
Minimum application Purchase Additional
amt. purchase
Regular plan Rs 5000 Rs 1000
Institutional Rs 5 crore Rs 1000
plan
17. Systematic investment Rs 1000/- weekly, monthly, and quarterly
plan(SIP) options are available.(only in regular plan)
Systematic withdrawal Rs 1000/- weekly, monthly, and quarterly
plan(SWP) options are available.
Name of the fund Apoorva shah
manager
DSP Black rock balanced fund
Investment objective An open ended balanced scheme, seeking to
generate long term capital appreciation and
current income from a portfolio constituted of
equity and equity related securities as well as
fixed income securities(debt and money market
securities)
Asset allocation pattern Types of instrument Normal allocation
of scheme 1.equity and equity (%of net assets)
related securities
65%-75%
2.debt securities debt 25%-35%
and money market
securities
Plans and option Plans: none option: growth *dividend
-payout
-reinvest
18. Minimum application Purchase Additional purchase
amt.
Rs 5000 Rs 1000
Systematic investment Rs 1000/- weekly, monthly, and quarterly
plan(SIP) options are available.
Systematic withdrawal Rs 1000/- weekly, monthly, and quarterly
plan(SWP) options are available.
Name of the fund Apoorva shah
manager
Introduction of HDFC mutual funds
HDFC assets management company Ltd (AMC) was incorporated under the
companies act 1956 on December 10, 1999 and was approved to act as an
(AMC)for the HDFC mutual fund by SEBI vide its letter dated July 3, 2000
In the term of the investment management agreement the trustee has
appointed the HDFC assets managememt company limited to manage the
mutual fund.
Registered office of the assets management company (AMC) is situated at
Ramón house 3rd flour, H.T. Parikh marg 169 Back Bay reclamation,
charchgate Mumbai 400020
Company profile of HDFC mutual fund
Company name - HDFC Mutual fund
19. Type - Privately held
Company size - 501-1000 employees
Web site - http://www.hdfcfund.com
Founded - 1999
Headquarter - Ramón house 3rd flour, H.T. Parikh marg
Parikh marg 169 Black bay reclamation
Charchgate Mumbai 400020
Products of funds of HDFC mutual fund
HDFC mutual funds are providing 16 products or funds according to the
brochure of that company in the Indian mutual fund market these funds are
as :-
1. HDFC Growth fund (HGF)
2. HDFC equity fund (HEF)
3. HDFC Top 200 fund (HT 200)
4. HDFC Capital builder fund (HCBF)
5. HDFC Core and satellite fund (HCSF)
6. HDFC Premier multi-cap fund (HDMCF)
7. HDFC Mid-cap opportunities fund (HMCOF)
8. HDFC Long term equity fund
9. HDFC Infrastructure fund
10.HDFC Arbitrage fund (HAF)
11.HDFC Balanced fund (HDF)
12.HDFC Prudence fund (HPF)
13.HDFC Long term advantage fund (HLTAF)
20. 14.HDFC Tax saver (HTS)
15.HDFC Index fund (HIF)
16. HDFC MF Monthly income plan (HMIP)
Description of products or funds
HDFC Growth fund (HGF)
Investment objective To generate long term capital appreciation from a
portfolio that is invested predominantly in equity
and equity related instrument
Asset allocation pattern Types of instrument Normal allocation
of scheme 1. Equity and equity related (%net assets)
instrument. 80-100
2. Debt securities, money 0-20
market instrument and cash
(including CBLO/reverse
repo.)
Plans and option Plans: none option: growth *dividend
-payout
-reinvest
21. Minimum application Purchase Additional purchase
amt. Rs 5000/- Rs 1000/-
Systematic investment Please refer page no.22 for details of (SIP)
plan(SIP)
Systematic withdrawal Please refer page no.22 for details of (SWP)
plan(SWP)
Name of the fund Mr. Srinivas Rao Ravari
manager
HDFC Top 200 funds (HT 200)
Investment To generate long term capital appreciation from a
objective portfolio of equity and equity – linked instrument
primarily drawn from the companies in BSE 200
Index
Asset allocation Types of Normal allocation
pattern of scheme instrument
1. Equity & equity (%of net assets)
linked instrument. Up to 100%(including use of
2. # Debt and derivatives for hedging &
money instruments. permitted by prevailing by
#Investment in SEBI regulation)
securitized debt. If
undertaken would
not exceed 20%of
the net assets of the
scheme.
22. Plans & options Plans- Nil option – Growth & Dividend
- Payout
- reinvest
Minimum Purchase Additional purchase
application amt. Rs 5000/- Rs 1000/-
Systematic Please refer page no.22 for details of (SIP)
investment
plan(SIP)
Systematic Please refer page no.22 for details of (SWP)
withdrawal
plan(SWP)
Name of the fund Mr. Prashant Jain
manager
Description of dividend policy of HDFC
(SWP)
There is no assurance or guarantee to unit holder as to the rate of dividend
distribution nor that dividends will be paid regularly. On payment of
dividends ,the NAV will stand reduced by the amount of dividend and
dividend tax (if applicable) paid.
Description of Systematic investment
plan(SIP)
23. The first account statement under SIP/STP shall be issued within 10 business
days of the initial investment the account statement will be dispatched once
every quarter ending march, june, September, and December within 10
business days of the end of the quarter.
Findings in project:-
• DSP black rock are providing 23 schemes or funds to the customer but
HDFC mutual are providing 16 types of funds according to the
brochure of both the companies.
• Services of DSP black rock are much better then the HDFC mutual
fund like systematic investment plan(SIP).
• DSP black rock are providing both type of plan like regular and
institutional plan in most of the product or fund but HDFC mutual
fund are providing these plans only in few funds
• In DSP black rock systematic withdrawal plan(SWP)are very easy and
also easily available but in HDFC mutual fund this is complicated.
• In these funds or schemes HDFC are not providing both type of plan
to the public they are providing wholesale or retail plan only in few
schemes.
24. • HDFC are providing systematic investment plan(SIP)or systematic
withdrawal plan(SWP) only quarterly.
• Minimum application amount Rs5000 for HDFC plans or additional
purchase Rs1000.
• Name of the fund manager Mr. Prashant Jain and Srinivas Rao
RESEARCH METHODOLOGY
Primary Source:-
Primary data have been collected
through the CAMS agency of mutual fund.
Secondary source:-
25. Secondary data have been collected
from the journals, magazines or brochures of both the
companies or world wide web.
BIBLIOGRAPHY
WWW.GOOGLE.COM
WIKIPEDIA
WWW.DSPBLACK.COM
WWW.HDFC.COM