a study on investment portfolio towards ulips of hdfc life

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| BRINDAVAN COLLEGE 1 A STUDY ON INVESTMENT PORTFOLIO TOWARDS ULIPS OF HDFC LIFE 1.1 ORIGIN OF INSURANCE INDUSTRY “If risk is like a smoldering coal that may spark a fire at any moment, then insurance is our fire extinguisher.” The origin of insurance refers to the development of the modern business of insurance against risks, especially regarding cargo, property, death, automobile accidents and medical treatment. The industry helps to eliminate risks (as when fire insurance companies demand the implementation of safe practices and the installation of hydrants), spreads risks from the individual to the larger community, and provides an important source of long-term finance for both the public and private sectors. The insurance industry is generally profitable and provides attractive employment opportunities for white collar workers. Ancient world In some sense we can say that insurance dates back to early human society. We know of two types of economies in human societies: natural or non-monetary economies (using barter and trade with neither centralized nor standardized set of financial instruments) and monetary economies (with markets, currency, financial instruments and so on). Insurance in the former case entails agreements of mutual aid. If one family's house gets destroyed, the neighbors are committed to help rebuild it. Granaries embodied another early form of insurance to indemnify

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1.1 ORIGIN OF INSURANCE INDUSTRY

“If risk is like a smoldering coal that may spark a fire at any moment, then

insurance is our fire extinguisher.” The origin of insurance refers to the

development of the modern business of insurance against risks, especially

regarding cargo, property, death, automobile accidents and medical treatment.

The industry helps to eliminate risks (as when fire insurance companies demand

the implementation of safe practices and the installation of hydrants), spreads risks

from the individual to the larger community, and provides an important source of

long-term finance for both the public and private sectors. The insurance industry is

generally profitable and provides attractive employment opportunities for white

collar workers.

Ancient world

In some sense we can say that insurance dates back to early human society. We

know of two types of economies in human societies: natural or non-monetary

economies (using barter and trade with neither centralized nor standardized set of

financial instruments) and monetary economies (with markets, currency, financial

instruments and so on). Insurance in the former case entails agreements of mutual

aid. If one family's house gets destroyed, the neighbors are committed to help

rebuild it. Granaries embodied another early form of insurance to indemnify

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against famines. These types of insurance have survived to the present day in

countries or areas where a modern money economy with its financial instruments

is not widespread.

The first methods of transferring or distributing risk in a monetary economy were

practiced by Chinese and Babylonian traders as long ago as the 3rd and 2nd

millennia BC, respectively. Chinese merchants travelling treacherous river rapids

would redistribute their wares across many vessels to limit the loss due to any

single vessel's capsizing. The Babylonians developed a system which was recorded

in the famous Code of Hammurabi, c. 1750 BC, and practiced by early

Mediterranean sailing merchants. If a merchant received a loan to fund his

shipment, he would pay the lender an additional sum in exchange for the lender's

guarantee to cancel the loan should the shipment be stolen or lost at sea.

Merchants have sought methods to minimize risks since early times. Achaemenian

monarchs in Ancient Persia were presented with annual gifts from the various

ethnic groups under their control. This would function as an early form of political

insurance, and officially bound the Persian monarch to protect the group from

harm.

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Medieval era

Separate insurance contracts (i.e., insurance policies not bundled with loans or

other kinds of contracts) were invented in Genoa in the 14th century, as were

insurance pools backed by pledges of landed estates. The first known insurance

contract dates from Genoa in 1347, and in the next century maritime insurance

developed widely and premiums were intuitively varied with risks.

Modern insurance

Insurance became far more sophisticated in Enlightenment era Europe, and

specialized varieties developed. Some forms of insurance developed in London in

the early decades of the 17th century.

Property insurance

Property insurance as we know it today can be traced to the Great Fire of London,

which in 1666 devoured more than 13,000 houses. The devastating effects of the

fire converted the development of insurance "from a matter of convenience into

one of urgency, a change of opinion reflected in Sir Christopher Wren's inclusion

of a site for 'the Insurance Office' in his new plan for London in 1667".

In the wake of this first successful venture, many similar companies were founded

in the following decades. Initially, each company employed its own fire

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department to prevent and minimize the damage from conflagrations on properties

insured by them. They also began to issue 'Fire insurance marks' to their

customers. These would be displayed prominently above the main door of the

property and allowed the insurance company to positively identify properties that

had taken out insurance with them. One such notable company was the Hand in

Hand Fire & Life Insurance Society, founded in 1696 at Tom's Coffee House in St.

Martin's Lane in London. It was structured as a mutual society, and for 135 years it

operated its own fire brigade and played an important part in shaping fire fighting

and prevention. The Sun Fire Office is the earliest still existing property insurance

company, dating from 1710.

In Colonial America, the first insurance company that underwrote fire insurance

and was formed in Charles Town (modern-day Charleston), South Carolina in

1732. Benjamin Franklin helped to popularize and make standard the practice of

insurance, particularly Property insurance to spread the risk of loss from fire, in the

form of perpetual insurance. In 1752, he founded the Philadelphia Contributionship

for the Insurance of Houses from Loss by Fire. Franklin's company made

contributions toward fire prevention. Not only did his company warn against

certain fire hazards, it refused to insure certain buildings where the risk of fire was

too great, such as all wooden houses.

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Business insurance

At the same time, the first insurance schemes for the underwriting of business

ventures became available. By the end of the seventeenth century, London's

growing importance as a centre for trade was increasing demand for marine

insurance. In the late 1680s, Edward Lloyd opened a coffee house on Tower Street

in London. It soon became a popular haunt for ship owners, merchants, and ships'

captains, and thereby a reliable source of the latest shipping news.

Life insurance

The first life insurance policies were taken out in the early 18th century. The first

company to offer life insurance was the Amicable Society for a Perpetual

Assurance Office, founded in London in 1706 by William Talbot and Sir Thomas

Allen. The first plan of life insurance was that each member paid a fixed annual

payment per share on from one to three shares with consideration to age of the

members being twelve to fifty-five. At the end of the year a portion of the

"amicable contribution" was divided among the wives and children of deceased

members and it was in proportion to the amount of shares the heirs owned.

Amicable Society started with 2000 members.

The first life table was written by Edmund Halley in 1693, but it was only in the

1750s that the necessary mathematical and statistical tools were in place for the

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development of modern life insurance. James Dodson, a mathematician and

actuary, tried to establish a new company that issued premiums aimed at correctly

offsetting the risks of long term life assurance policies, after being refused

admission to the Amicable Life Assurance Society because of his advanced age.

He was unsuccessful in his attempts at procuring a charter from the government

before his death in 1757.

The sale of life insurance in the U.S. began in the late 1760s. The Presbyterian

Synods in Philadelphia and New York founded the Corporation for Relief of Poor

and Distressed Widows and Children of Presbyterian Ministers in 1759;

Episcopalian priests created a comparable relief fund in 1769. Between 1787 and

1837 more than two dozen life insurance companies were started, but fewer than

half a dozen survived.

Accident insurance

In the late 19th century, "accident insurance" began to become available. This

operated much like modern disability insurance. The first company to offer

accident insurance was the Railway Passengers Assurance Company, formed in

1848 in England to insure against the rising number of fatalities on the nascent

railway system. It was registered as the Universal Casualty Compensation

Company to grant assurances on the lives of persons travelling by railway and to

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grant, in cases, of accident not having a fatal termination, compensation to the

assured for injuries received under certain conditions.

1.2 INSURANCE INDUSTRY IN INDIA

Insurance in India is the market for insurance in India which covers both the state

and private sector organizations. It is listed in the Constitution of India on the

Union list in the Seventh Schedule meaning it can only be legislated by the central

government.

The insurance sector has gone through a number of phases by allowing private

companies to solicit insurance and also allowing foreign direct investment of up to

26% (as of 2013 there have been proposals to extend the FDI up to 49% to

strengthen the Insurance Market even further). However, the largest life-insurance

company in India, Life Insurance Corporation of India is still owned by the

government and carries a sovereign guarantee for all insurance policies issued by

it.

History

In India, insurance has a deep-rooted history. Insurance in various forms has been

mentioned in the writings of Manu (Manusmrithi), Yagnavalkya (Dharmashastra)

and Kautilya (Arthashastra). The fundamental basis of the historical reference to

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insurance in these ancient Indian texts is the same i.e. pooling of resources that

could be re-distributed in times of calamities such as fire, floods, epidemics and

famine. The early references to Insurance in these texts have reference to marine

trade loans and carriers' contracts.

Insurance in its current form has its history dating back until 1818, when Oriental

Life Insurance Company was started by Anita Bhavsar in Kolkata to cater to the

needs of European community. The pre-independence era in India saw

discrimination between the lives of foreigners (English) and Indians with higher

premiums being charged for the latter. In 1870, Bombay Mutual Life Assurance

Society became the first Indian insurer.

At the dawn of the twentieth century, many insurance companies were founded. In

the year 1912, the Life Insurance Companies Act and the Provident Fund Act were

passed to regulate the insurance business. The Life Insurance Companies Act, 1912

made it necessary that the premium-rate tables and periodical valuations of

companies should be certified by an actuary. However, the disparity still existed as

discrimination between Indian and foreign companies. The oldest existing

insurance company in India is the National Insurance Company, which was

founded in 1906, and is still in business.

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The Government of India issued an Ordinance on 19 January 1956 nationalizing

the Life Insurance sector and Life Insurance Corporation came into existence in the

same year. The Life Insurance Corporation (LIC) absorbed 154 Indian, 16 non-

Indian insurers as also 75 provident societies—245 Indian and foreign insurers in

all. In 1972 with the General Insurance Business (Nationalization) Act was passed

by the Indian Parliament, and consequently, General Insurance business was

nationalized with effect from 1 January 1973. 107 insurers were amalgamated and

grouped into four companies, namely National Insurance Company Ltd., the New

India Assurance Company Ltd., the Oriental Insurance Company Ltd and the

United India Insurance Company Ltd. The General Insurance Corporation of India

was incorporated as a company in 1971 and it commence business on 1 January

1973.

The LIC had monopoly till the late 90s when the Insurance sector was reopened to

the private sector. Before that, the industry consisted of only two state insurers:

Life Insurers (Life Insurance Corporation of India, LIC) and General Insurers

(General Insurance Corporation of India, GIC). GIC had four subsidiary

companies. With effect from December 2000, these subsidiaries have been de-

linked from the parent company and were set up as independent insurance

companies: Oriental Insurance Company Limited, New India Assurance Company

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Limited, National Insurance Company Limited and United India Insurance

Company Limited.

Industry structure

By 2012 Indian Insurance is a US$72 billion industry. However, only two million

people (0.2% of the total population of 1 billion) are covered under Mediclaim,

whereas in developed nations like USA about 75% of the total population is

covered under some insurance scheme. With more and more private companies in

the sector, this situation is expected to change. ECGC, ESIC and AIC provide

insurance services for niche markets. So, their scope is limited by legislation but

enjoy some special powers.

Legal structure

The insurance sector went through a full circle of phases from being unregulated to

completely regulated and then currently being partly deregulated. It is governed by

a number of acts.

The Insurance Act of 1938 was the first legislation governing all forms of

insurance to provide strict state control over insurance business. Life insurance in

India was completely nationalized on 19 January 1956, through the Life Insurance

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Corporation Act. All 245 insurance companies operating then in the country were

merged into one entity, the Life Insurance Corporation of India.

The General Insurance Business Act of 1972 was enacted to nationalize the about

100 general insurance companies then and subsequently merging them into four

companies. All the companies were amalgamated into National Insurance, New

India Assurance, Oriental Insurance and United India Insurance, which were

headquartered in each of the four metropolitan cities. Until 1999, there were no

private insurance companies in India. The government then introduced the

Insurance Regulatory and Development Authority Act in 1999, thereby de-

regulating the insurance sector and allowing private companies. Furthermore,

foreign investment was also allowed and capped at 26% holding in the Indian

insurance companies.

In 2006, the Actuaries Act was passed by parliament to give the profession

statutory status on par with Chartered Accountants, Notaries, Cost & Works

Accountants, Advocates, Architects and Company Secretaries. A minimum capital

of US$80 million (Rs.400 Crores) is required by legislation to set up an insurance

business.

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Authorities

The primary regulator for insurance in India is the Insurance Regulatory and

Development Authority (IRDA) which was established in 1999 under the

government legislation called the Insurance Regulatory and Development

Authority Act, 1999.

The industry recognizes examinations conducted by IAI (for actuaries), III (for

agents, brokers and third-party administrators) and IIISLA (for surveyors and loss

assessors). TAC is the sole data repository for the non-life industry. IBAI gives

voice for brokers while GI Council and LI Council are platforms for insurers.

AIGIEA, AIIEA, AIIEF, AILICEF, AILIEA, FLICOA, GIEAIA, GIEU and

NFIFWI cater to the employees of the insurers. In addition, there are a dozen

Ombudsman offices to address client grievances.

Insurance Companies in India

There are two types of insurance companies in India. They fall under two

categories of Life Insurance Companies and Non-life Insurance Companies.

India’s life insurance segment collected new business premiums worth Rs 11,742.7

crore (US$ 1.84 billion) for April–May 2013. Indian insurance companies

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collected a combined Rs 107,010.7 crore (US$ 16.85 billion) worth of new

premiums for FY 2012–13, according to data released by IRDA.

Meanwhile, the general insurance industry grew by 19.6 per cent in April–May

period of FY 2013–14. Non-life insurers collected premiums worth Rs 13,552.46

crore (US$ 2.13 billion) in the first two months of the current year, as compared to

Rs 11,333.54 crore (US$ 1.78 billion) during the corresponding period of the

previous year.

This list of life insurance companies in India is based on the list of life insurance

companies registered and approved with the Insurance Regulatory and

Development Authority.

Life Insurers in India:

Table: 1(a)

S.No. Life Insurance Companies

1

Bajaj Allianz Life Insurance Co. Ltd.

2

Birla Sun Life Insurance Co. Ltd.

3

HDFC Standard Life Insurance Co. Ltd.

4 ICICI Prudential Life Insurance Co. Ltd.

5

Life Insurance Corporation of India.

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6

PNB Metlife India Insurance Co. Ltd.

7

Kotak Mahindra Old Mutual Life Insurance Ltd.

8

SBI Life Insurance Co. Ltd.

9

Tata AIA Life Insurance Co. Ltd.

10

Reliance Life Insurance Co. Ltd.

11

Aviva Life Insurance Company India Ltd.

12

Sahara India Life Insurance Co. Ltd.

13

Shriram Life Insurance Co. Ltd.

14

Bharti AXA Life Insurance Co. Ltd.

15

Future Generali India Life Insurance Co. Ltd.

16

IDBI Federal Life Insurance Co. Ltd.

17

Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd.

18

AEGON Religare Life Insurance Co. Ltd.

19

DHFL Pramerica Life Insurance Co. Ltd.

20

Star Union Dai-ichi Life Insurance Co. Ltd.

21

IndiaFirst Life Insurance Co. Ltd.

22

Edelweiss Tokio Life Insurance Co. Ltd.

23

Max Life Insurance Co. Ltd.

24

ING Vysya Life Insurance Company Ltd.

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1.3 INTRODUCTION TO THE TOPIC

An investment portfolio is a collection of assets owned by an individual or by an

institution. It is made up mainly of securities, such as stocks, bonds, mutual funds,

money market funds and exchange traded funds. Pool of different investments by

which an investor bets to make a profit (or income) while aiming to preserve the

invested (principal) amount. These investments are chosen generally on the basis

of different risk-reward combinations: from 'low risk, low yield' (gilt edged) to

'high risk, high yield' (junk bonds) ones; or different types of income streams:

steady but fixed, or variable but with a potential for growth. A portfolio investment

is a passive investment in securities, which entails no active management or

control of the securities by the investor. A portfolio investment is an investment

made by an investor who is not particularly interested in involvement in the

management of a company. The purpose of the investment is solely financial

gain.It includes investment in an assortment or range of securities, or other types of

investment vehicles, to spread the risk of possible loss due to below-expectations

performance of one or a few of them.

A Unit Linked Insurance Plan (ULIP) is a product offered by insurance

companies that unlike a pure insurance policy gives investors the benefits of both

insurance and investment under a single integrated plan. A ULIP is basically a

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combination of insurance as well as investment. A part of the premium paid is

utilized to provide insurance cover to the policy holder while the remaining portion

is invested in various equity and debt schemes. The money collected by the

insurance provider is utilized to form a pool of fund that is used to invest in various

markets instruments (debt and equity) in varying proportions just the way it is done

for mutual funds. Policy holders have the option of selecting the type of funds

(debt or equity) or a mix of both based on their investment need and appetite. Just

the way it is for mutual funds, ULIP policy holders are also allotted units and each

unit has a net asset value (NAV) that is declared on a daily basis. The NAV is the

value based on which the net rate of returns on ULIPs are determined. The NAV

varies from one ULIP to another based on market conditions and the fund’s

performance.

Open end Fund:

A type of fund that does not have restrictions on the amount of shares/units the

fund will issue. If demand is high enough, the fund will continue to issue

shares/units no matter how many investors there are. Open-end funds also buy

back shares when investors wish to sell. The majority of ULIPs/mutual funds

are open-end. By continuously selling and buying back fund shares/units, these

funds provide investors with a very useful and convenient investing vehicle.

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It should be noted that when a fund's investment manager(s) determine that a

fund's total assets have become too large to effectively execute its stated

objective, the fund will be closed to new investors and in extreme cases, be

closed to new investment by existing fund investors.

Assets Under Management:

In finance, assets under management (AUM), sometimes called funds under

management (FUM), measures the total market value of all the financial assets

which a financial institution such as a ULIP fund, mutual fund, venture capital

firm, or brokerage house manages on behalf of its clients. This metric is very

popular within the financial industry and is a sign of size and success of any

firm against its competition. The AUM is calculated by different methods.

Equity:

An instrument that signifies an ownership position, or equity, in a corporation, and

represents a claim on its proportionate share in the corporation's assets and profits.

A person holding such an ownership in the company does not enjoy the highest

claim on the company's earnings. Instead, an equity holder's claim is subordinated

to creditor's claims, and the equity holder will only enjoy distributions from

earnings after these higher priority claims are satisfied also called equities or

equity securities or corporate stock.

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Large Cap Equity

Large Cap Equities are equities of those companies whose market capitalization

is greater than $ 8 million.

Mid Cap Equity

Mid Cap Equities are equities of those companies whose market capitalization

between $ 2billion and $7 billion.

Debentures/Bonds

A debenture is a debt security issued by a corporation that is not secured by

specific assets, but rather by the general credit of the corporation. Stated assets

secure a corporate bond, unlike a debenture, but in India these are used

interchangeably.

Bonds are lOUs between a borrower and a lender. The borrowers include public

financial institutions and corporations. The lender is the bond fund, or an

investor when an individual buys a bond. In return for the loan, the issuer of the

bond agrees to pay a specified rate of interest over a specified period of time.

Typically bonds are issued by PSUs, public financial institutions and

corporates. Another distinction is SLR (Statutory liquidity ratio) and non-SLR

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bonds. SLR bonds are those bonds which are approved securities by RBI which

fall under the SLR limits of banks.

Government Securities

The Government securities comprise dated securities issued by the Government

of India and state governments as also, treasury bills issued by the Government

of India. Reserve Bank of India manages and services these securities through

its public debt offices located in various places as an agent of the Government.

Money Market Securities

Money Market means market where money or its equivalent can be traded.

Money is synonym of liquidity. Money Market consists of financial institutions

and dealers in money or credit who wish to generate liquidity. It is better known

as a place where large institutions and governments manage their short term

cash needs. For generation of liquidity, short term borrowing and lending is

done by these financial institutions and dealers. Money Market is part of

financial market where instruments with high liquidity and very short term

maturities are traded. Due to highly liquid nature of securities and their short

term maturities, money market is treated as a safe place. Hence, money market

is a market where short term obligations such as treasury bills, commercial

papers and bankers’ acceptances are bought and sold.

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Credit Rating

Credit rating is an opinion about a debt instrument and its issuer. It tells an

investor, whether the debt instrument is safe or risky. It tells whether the issuer

will be able to pay the interest and repay the principal amount in time.

Credit rating is only an opinion. It is not a recommendation. It does not ask an

investor to buy, hold or sell an instrument. So, credit rating is an opinion about

the future ability and legal obligation of the issuer to make timely payments of

principal amount and interest on their debt instruments.

Credit rating is done by independent credit-rating agencies like:

S & P, which is based in USA,

while CRISIL, CARE and ICRA Ltd., which are based in India.

Credit rating is done by experts after examining various factors. The rating is

expressed in alphabetical or alphanumeric symbols.

Following are examples of credit rating:

If the rating of debenture is AAA (Triple A), then it is considered to have the

highest safety for the investor.

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If the credit rating is DDD (Triple D),, then the debenture is considered to have

highest risk for the investor.

Fund Performance Index

Fund Performance Index can be defined as the index which acts as the

benchmark performance which consider various factors against which the

funds’ performance is measured. In India, these indices are prepared by BSE,

NIFTY, CRISIL and so on.

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2.1 TITLE OF THE PROJECT “A STUDY ON INVESTMENT PORTFOLIO TOWARDS ULIPS OF HDFC LIFE”

2.2 STATEMENT OF PROBLEM

There are many options for investing in India such as equities, bonds, real estates,

commodities, gold, foreign currencies, etc. As I went to HDFC Life, I found

another option of investment which is called as Unit Linked Insurance Plans

(ULIPs) and I was interested in knowing how do ULIPs function and I decided to

make a project report on ULIPs specifically on their investment portfolio:

To find out different ULIPs offered by HDFC Life.

To find out different fund related to ULIPs.

To find out different investment avenues associated with the ULIPs.

To find out the combination of equities, bonds and money market

instruments in portfolio of ULIPs’ funds.

2.3 SCOPE OF THE STUDY

The current study is undertaken to know the investment portfolio towards ULIPs of

HDFC Life and the performance of the same against the industry benchmark. The

study also looks at the investment strategies adopted by HDFC Life in positioning

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the investment options in its portfolio. The study can be extended to ULIPs of

other Life Insurance Companies as well.

2.4 OBJECTIVES OF THE STUDY

To know the asset allocation of ULIPs’ funds.

To identify different equites, debentures/bonds, government securities and

money market securities where ULIPs’ funds invest.

To analyze the performance of HDFC Life’s ULIPs’ funds.

To help the investors in making investment decisions.

To provide helpful reference for related studies in future.

2.5 METHODOLOGY

The study is based on secondary data analysis. The typology of research is like a

case study. However, both primary and secondary data are considered while doing

data analysis and interpretation.

2.5.1 DATA ANALYSIS PLAN

The appropriate methods of data analysis have been determined in the project and

are based on types of data and variables.

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The project contains the following types of data analysis strategies:

Exploratory: The study has an approach to analyze data sets to summarize

their main characteristics using different visual methods.

Descriptive: The most common type of data analysis, it is used to summarize

the major findings and discussions over different data.

Inferential: Inferential statistics has allowed drawing conclusions about the

data analysis and the actual performance analysis of the ULIPs.

2.5.2 SOURCES OF DATA

Data are values of qualitative or quantitative variables, belonging to a set of items.

Data in computing are often represented by a combination of items organized in

rows and multiple variables organized in columns. Data are typically the results of

measurements and can be visualized using graphs or images. The data related to

the study is collected mainly from secondary sources.

PRIMARY DATA

Since the study is based on secondary data, primary data is not considered.

SECONDARY DATA

Secondary data consists of periodical fund reports, publications, NAVs

indicator, files; obtained from different websites.

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2.6 LIMITATIONS OF THE STUDY

Though the study can give a broad knowledge about Unit Linked Insurance Plans

(ULIPs) and their investment portfolio, it suffers from following limitations:

It is based on secondary data. So, the data provided by HDFC Life has been

considered as reflecting the true picture.

Only limited aspects of the investment portfolio have been studied which

may not be sufficient to draw a valuable conclusion.

The study has been completed within a shorter time frame; so many other

variables related to the interest of the study have been left out.

Out of 82 funds, only 11 funds are selected as samples for the study.

The study only focuses on one insurance organization, i.e., HDFC Standard

Life Insurance Company Limited (HDFC Life).

2.7 NEED FOR THE STUDY

1. The study has great significance and provides benefits to various parties who

directly or indirectly interact with the company.

2. It is beneficial to the company in providing crystal clear picture regarding

important aspects like ULIPs, its features, its functioning, its returns, its risks

and its portfolios.

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3. It is also beneficial to employees and offers motivation by showing how

actively they are contributing to company’s growth.

4. The investors who are interested in investing in the ULIPs will also get

benefited by going through the study and can easily take a decision whether to

invest or not.

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3.1 INTRODUCTION OF HDFC LIFE

HDFC Life is a joint venture between Housing Development Finance Corporation

Limited (HDFC), India's leading housing finance institution and Standard Life plc,

the leading provider of financial services in the United Kingdom.

HDFC Ltd. holds 72.37% and Standard Life (Mauritius Holding) Ltd. holds

26.00% of equity in the joint venture, while the rest is held by others.

HDFC Life's product portfolio comprises solutions, which meet various customer

needs such as Protection, Pension, Savings, Investment and Health. Customers

have the added advantage of customizing the plans, by adding optional benefits

called riders, at a nominal price. The company currently has 22 retail and 8 group

products in its portfolio, along with 9 optional rider benefits catering to the

savings, investment, protection and retirement needs of customers.

HDFC Life continues to have one of the widest reaches among new insurance

companies with about 500 branches in India touching customers in over 900 cities

and towns. The company has also established a liaison office in Dubai. HDFC Life

has a strong presence in its existing markets with a strong base of Financial

Consultants.

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HDFC Limited

HDFC Ltd. is India’s premier housing finance company and a well established

financial conglomerate. It has assisted more than 45 Lakhs customers in acquiring

their own home through cumulative housing loan disbursements of over Rs.

4,56,000 crores. With a wide network of 333 offices, it caters to 2,400 towns and

cities across India. HDFC Ltd has International offices in London, Dubai and

Singapore with service associates in Kuwait, Oman, Qatar, Sharjah, Abu Dhabi

and Saudi Arabia – Al Khobar, Jeddah and Riyadh to cater to non-resident Indians

and PIO’s.

Customer Service and satisfaction has been the mainstay of the organization since

its inception, with HDFC setting a benchmark for the Indian housing finance

industry. Recognition for the service to the sector has come from several national

and international entities including the World Bank that has lauded HDFC as a

model housing finance company for the developing countries. HDFC has

undertaken a lot of consultancies abroad for setting up of housing finance

companies - assisting different countries including Sri Lanka, Indonesia, Bhutan,

Nepal, Ghana, Thailand, Philippines, Egypt, Maldives, Mauritius, Bangladesh,

Jamaica and Russia among other countries.

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Standard Life plc.

Established in 1825, Standard Life plc. is a leading provider of long term savings

and investments to around six million customers worldwide. Headquartered in

Edinburgh, Standard Life plc. has around 8,500 employees internationally.

The Standard Life plc. group includes savings and investments businesses, which

operate across the UK, Canada, Europe, Asia and Middle East; workplace pensions

and benefits businesses in the UK and Canada; Standard Life Investments, a global

investment manager, which manages over £179bn globally; and its Chinese and

Indian Joint Venture businesses. At the end of September 2013 the Group had total

assets under administration of over £237bn.

Standard Life plc is listed on the London Stock Exchange and has approximately

1.5 million individual shareholders in over 50 countries around the world. It is also

listed in the Dow Jones Sustainability World Index, ranking it among the top 10%

of sustainable companies in the world.

Type of business

Insurance & Investments

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Board of Directors

Mr. Deepak S. Parekh

He is the Chairman of the Company. He is also the Chairman and Director of

Housing Development Finance Corporation Limited (HDFC Limited). He joined

HDFC Limited in a senior management position in 1978. He was inducted as a

whole-time director of HDFC Limited in 1985 and was appointed as its Chairman

in 1993. Mr. Parekh is a Fellow of the Institute of Chartered Accountants (England

& Wales).

Mr. Gerald E. Grimstone

He was appointed Chairman of Standard Life in May 2007, having been Deputy

Chairman since March 2006. He became director of the Standard Life Assurance

Company in July 2003. He is also Chairman of Candover Investments plc and was

appointed as one of the UK’s Business Ambassadors by the Prime Minister in

January 2009. Gerry held senior positions within the Department of Health and

Social Security and HM Treasury until 1986. He then spent 13 years with

Schroders in London, Hong Kong and New York, and was Vice Chairman of

Schroders’ worldwide investment banking activities from 1998 to 1999. He is

appointed as Director of the Company from April 1, 2013. He has completed

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Master of Arts, Master of Science in Chemistry, Merton College, Oxford

University and NATO-CCMS Fellowship Wolfson College, Oxford University.

Mr. Keki M. Mistry

He joined the Board of Directors of the Company in December, 2000. He is

currently the Vice Chairman and Chief Executive Officer of HDFC Limited. He

joined HDFC Limited in 1981 and appointed as Executive Director in 1993, he is

currently Managing Director for the group since 2000. Mr. Mistry is a Fellow of

the Institute of Chartered Accountants of India and a member of the Michigan

Association of Certified Public Accountants.

Ms. Renu S. Karnad

She is the Managing Director of HDFC Limited. She is a graduate in Law and

holds a Master's degree in Economics from Delhi University. She has been

employed with HDFC Limited since 1978 and was appointed as the Executive

Director in 2000 and Deputy Managing Director in 2007. She is responsible for

overseeing all aspects of lending operations of HDFC Limited.

Mr. David Nish

He joined Standard Life on 1st November 2006 as Group Finance Director and

held the designation until December 2009. He is the Chief Executive at Standard

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Life Plc. In 2000, he was awarded the Scottish Business Awards Finance Director

of the Year and from 2004 to 2005 he was one of the members of the Government

Employers Pension Task Force. He is a member of the Institute of Chartered

Accountants of Scotland. He joined the Board of Directors in February 2010.

Mr. Norman K. Skeoch

He is currently the Chief Executive in Standard Life Investments Limited and is

responsible for overseeing Investment Process & Chief Executive Officer

Function. Prior to this, Mr. Skeoch was working with M/s. James Capel & Co.

holding the positions of UK Economist, Chief Economist, Executive Director,

Director of Controls and Strategy HSBS Securities and Managing Director

International Equities. He was also responsible for Economic and Investment

Strategy research produced on a worldwide basis. Mr. Skeoch joined the Board of

Directors in November 2005. Mr. Skeoch is a Fellow of the Securities Institute,

Fellow of the Royal Institute for the Encouragement of the Arts, Manufacture and

Commerce, BA, MA.

Mr. Gautam R. Divan

He is a practising Chartered Accountant and is a Fellow of the Institute of

Chartered Accountants of India. Mr. Divan was the Former Chairman and

Managing Committee Member of Midsnell Group International, an International

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Association of Independent Accounting Firms and has authored several papers of

professional interest. Mr. Divan has wide experience in auditing accounts of large

public limited companies and nationalized banks, financial and taxation planning

of individuals and limited companies and also has substantial experience in

structuring overseas investments to and from India.

Mr. Ranjan Pant

He is a global Management Consultant advising Chief Executive Officer/Boards

on Strategy and Change Management. Mr. Pant, until 2002 was a Partner & Vice-

President at Bain & Company Inc., Boston, where he led the worldwide Utility

Practice. He was also Director, Corporate Business Development at General

Electric headquarters in Fairfield, USA. Mr. Pant has an MBA from The Wharton

School and BE (Honors) from Birla Institute of Technology and Sciences.

Mr. Ravi Narain

He is the Vice Chairman of National Stock Exchange of India Limited. Mr. Ravi

Narain was a member of the core team to set-up the Securities & Exchange Board

of India (SEBI) and is also associated with various committees of SEBI and the

Reserve Bank of India (RBI). Mr. Ravi Narain is a Cambridge University-trained

Economist and an MBA from Wharton School, University of Pennyslvania, USA.

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Mr. A. K.T. Chari

He has joined HDFC Standard Life as a Director on March 10, 2010. Mr. Chari has

completed his Electrical Engineering from Madras University in 1962. He is

associated with Infrastructure Development Finance Company Ltd. (IDFC) for the

past 11 years. Currently, he is handling project finance for infrastructure projects at

IDFC. Prior to this he was associated with Infrastructure Development Bank of

India (IDBI) from 1975 to 1999.

Dr. S. A. Dave

He is a Doctorate of economics and holds a Master’s degree in economics from the

University of Rochester. Dr. Dave is the former chairman of the Securities and

Exchange Board of India and the Unit Trust of India. Dr. Dave is currently the

chairman of the Centre for Monitoring Indian Economy and director on the boards

of many prominent companies in India. He was appointed as Additional Director

of the Company from April 26, 2012.

Mr. Michael G Connarty

He is responsible for Standard Life's investments in life assurance Joint Ventures

in India and China. He holds a degree in Law and MBA. He has worked with

Standard Life for 33 years in managerial positions covering a number of fields

such as Pensions law, International Marketing, Operational Management, Strategy,

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Risk, Compliance, Company Secretarial and Banking. He served as the Project

Manager for the start-up project of the Company in 2000. He is the Alternate

Director to Mr. Norman K. Skeoch.

Mr. Amitabh Chaudhry

He is the Managing Director and Chief Executive Officer of HDFC Life. Before

joining HDFC Standard Life, he was the Managing Director and Chief Executive

Officer of Infosys BPO and was also heading an Independent Validation Services

unit in Infosys Technologies. He started his career with Bank of America

delivering diverse roles ranging from Head of Technology Investment Banking for

Asia, Regional Finance Head for Wholesale Banking and Global Markets and

Chief Finance Officer of Bank of America (India). He moved to Credit Lyonnais

Securities in 2001 in Singapore where he headed their investment banking

franchise for South East Asia and structured finance practice for Asia before

joining Infosys BPO in 2005. Mr. Chaudhry completed his Engineering in 1985

from Birla Institute of Technology and Science, Pilani and MBA in 1987 from

IIM, Ahmedabad.

Ms. Vibha Padalkar

She is the Executive Director and Chief Financial Officer at HDFC Life. Ms.

Padalkar joined HDFC Life in August 2008 after a seven year stint as Executive

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Vice President-Finance at WNS Global Services; a NYSE listed leading global

business process outsourcing company. Vibha's key achievement during her tenure

at WNS was to lead a team that successfully completed the Group's IPO on the

New York Stock Exchange in a short span of six months. Prior to WNS, Vibha was

with Colgate Palmolive India, including a short posting to the group's New York

headquarters. Ms. Padalkar became a member of the Institute of Chartered

Accountants in England and Wales in 1992, after having completed the last part of

her schooling as well as college education in London. She is also a member of the

Institute of Chartered Accountants in India. Apart from leading the finance,

internal audit, compliance, risk management, legal and secretarial teams, Vibha has

taken additional responsibility during the year of hub operations, claims and

payouts, underwriting and medical operations.

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3.3 ORGANISATIONAL STRUCTURE

Graphical Representation: 3(a)

CHAIRMAN

MANAGING DIRECTOR

ZONAL MANAGER

REGIONAL MANAGER

ALTERNATIVE

CHANNEL

Territory

Manager,

B.M

HUMAN

RESOURSE

MANAGER

RETAIL

Territory,

Branch,

Asst. B.M.

OPERATION

CHANNEL

Team and

Operation

Manager

BUSINESS DEVELOPER, SALES DEVELOPMENT

EXECUTIVE, CHANNEL EXECUTIVE, H.R EXECUTIVE,

AND OTHERS

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3.4 PRODUCTS AND SERVICES

Protection Plans

Protection plans are typically low cost insurance plans that provide full protection

and financial stability to your loved ones in case of any unforeseen events. HDFC

Life presents a variety of Protection plans according to your various needs.

HDFC Life Click2Protect

HDFC Life Click2Protect, an online term insurance plan that offers a quick and

simple solution at the click of a button to safeguard the financial independence of

your entire family. The plan takes care of family’s financial needs in case of

uncertainties by providing a lump sum to the family.

HDFC Term Assurance Plan

HDFC Term Assurance Plan is a term plan that safeguards your family’s financial

protection in the event of your unfortunate demise and in addition to this it also

provides you the option of selecting some add-on benefits like Critical illness,

Accidental and Accelerated Sum Assured benefits.

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Health Insurance Plans

Health Plans offer financial security to meet health related contingencies. Due to

changing lifestyles, health issues have not just escalated, they have increasingly

become more complex in nature. It becomes imperative therefore to have a health

insurance plan in place, thus your financial planning is incomplete if you have not

accounted for health.

HDFC Life Health Assure Plan

HDFC Life Health Assure Plan, a comprehensive, pure protection health insurance

plan that reimburses medical expenses incurred in a hospital. It provides individual

as well as family floater option.

Children's Insurance Plans

Successful parenting is no mean accomplishment. A huge contributor to this

success is financial planning for your child's future needs at the right age! There is

really no better gift you can give your child, than the promise of a secure future

with YoungStar Plans from HDFC Life. This Birthday, gift your child a secure

future and watch her soar high to fulfill her dreams.

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HDFC SL YoungStar Super Premium

Children insurance plans help build savings so that over time there is enough to

finance your child’s education, marriage, house or car. HDFC SL YoungStar Super

Premium, a unit-linked insurance plan (ULIP) designed to accumulate savings for

your child's future, even in your absence.

Savings and Investment Plans

Our Savings and Investment plans are life insurance plans that offer you multiple

avenues to save and to grow your money. These plans help in systematic and

disciplined investment ensuring that you and your family achieve your financial

goals.

HDFC Life Sanchay -Guaranteed Savings Insurance Plan

Life is full of responsibilities and as a responsible individual you aspire to build a

financially secured life for your loved ones. Guaranteed Returns helps you to fulfill

your responsibility with ease. Presenting HDFC Life Sanchay, a non-participating

insurance plan, which offers guaranteed benefits along with flexibility to choose

your investment horizon.

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HDFC SL Crest ULIP Investment Plan

HDFC SL Crest, is a unit linked insurance plan which helps you to achieve your

investment goals in a short period of 10 years along with financial protection for

your family. Pay premiums for only 5 years to get market linked returns for a

period of 10 years. Get Flexibility of 4 investment fund options to help you make

the right investment choice as per your needs.

HDFC Life ClassicAssure PlusText Size

HDFC Life ClassicAssure Plus is an investment cum insurance plan that offers

guaranteed benefit while letting your money grow. The plan is ideal for meeting

long term financial goals as well as creating a financial cushion to secure your

family’s future.

HDFC Life Super Savings Plan

Regular savings over a long period ensures that a corpus is built to meet financial

goals at various life stages. Presenting HDFC Life Super Savings Plan, a 'with

profits' plan to safeguard the financial interests of your loved ones in your absence.

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HDFC Life Super Income Plan

HDFC Life Super Income Plan is a participating regular income plan with

guaranteed benefits plus bonuses. This policy offers guaranteed income for a

period of 8 to 15 years and is ideal for individuals who need regular income at their

disposal so that they don’t have to worry about future expenses and fulfill their

financial goals uninterrupted.

HDFC Life ProGrowth Plus

HDFC Life ProGrowth Plus, a simple savings-cum-insurance plan that will enable

you to enjoy life cover and benefit from comfort of creating your own investment

strategies. This ULIP plan will help you to make the most of equities by

channelizing your savings effectively.

HDFC SL ProGrowth Flexi

It's prudent to be prepared all the time so that you can meet your life’s goals in a

manner that secures your finances. HDFC SL ProGrowth Flexi, a savings-cum-

insurance unit-linked plan (ULIP) that enables you to provide financial security to

your loved ones.

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Pension Plans for Retirement Planning

Retirement Plans provide you with financial security so that when your

professional income starts to ebb, you can still live with pride without

compromising on your living standards. Given the high cost of living and rising

inflation, Retirement planning has become all the more important.

HDFC Life Personal Pension Plus

HDFC Life Personal Pension Plus is a traditional participating pension plan ideal

for individuals who seek to plan for their retirement. Get secure and stable returns

on your invested corpus for post retirement income.

HDFC Life Single Premium Pension Super Plan

Investing in a pension plan is one way to secure your finances post-retirement.

Presenting HDFC Life Single Premium Pension Super Plan, a unit-linked pension

plan that creates a corpus over the policy term to generate post-retirement income

for life.

HDFC Life Pension Super Plus

You wait for the day when you can retire and pursue your interests - full time. This

is possible only if you have assurance of post-retirement income. Presenting,

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HDFC Life Pension Super Plus Plan, a unit-linked pension plan designed to build a

corpus over the policy term so that you can enjoy post-retirement life.

HDFC Life New Immediate Annuity Plan

HDFC Life New Immediate Annuity Plan is a non linked traditional annuity plan

that offers you various annuity options and provides you an opportunity to live life

at on your terms even after retirement.

HDFC Life Guaranteed Pension Plan

Don't let market downturns take your retirement savings and your retirement

dreams down with them! Presenting, HDFC Life Guaranteed Pension Plan, a plan

designed to help you build and secure your retirement fund to enjoy the post

retirement income.

Women's Insurance Plans

HDFC Life presents special solutions catering to different financial needs of

women. Women’s plans are a set of specially created and hand-picked products

which suit the needs of women at different stages of their life; such as protection,

health, retirement, child’s education and long term savings and investments.

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HDFC Life Smart Woman Plan

HDFC Life Smart Woman Plan, a life insurance policy for women that gives wings

to your aspirations. The plan ensures your savings grow leaving you free to pursue

your career and continue making a difference to those around you.

HDFC Life Click2Protect

As a modern woman, it’s time to shoulder the responsibility for your family’s

financial security. HDFC Life Click2Protect is an online term insurance plan

which helps you secure your family’s financial independence at the click of a

button. Ensure your parents, spouse and child are taken care of in your absence.

Rural & Social Plans

Rural & Social Plans are a special offering from HDFC Life, exclusively for the

benefit of our rural customers. These plans have been designed keeping in view the

rural population with stable returns and insurance cover.

HDFC SL SarvGrameen Bachat Yojana

HDFC SL SarvGrameen Bachat Yojana is a special offering from HDFC Standard

Life, exclusively for the benefit of our rural customers to help them have this

preparedness. HDFC SL SarvGrameen Bachat Yojana provides robust returns even

on an investment as small as Rs. 200 by adding 50% to original investment in 5

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years. Apart from guaranteed returns, this plan offers the essential security of a life

insurance. A single premium of Rs. 200 is due on the date of commencement.

There is no further premium/s due.

3.5 CORPORATE OFFICE AND BRANCHES

HDFC Life is a Life Insurance Company which operates its business and provides

services from its more than 450 branches covering above 960 cities in India. It has

more than 15000 employees working in its head office, branches and one

international liaison office in Dubai.

Corporate Office

HDFC Standard Life Insurance Company Limited,

12th & 13th Floor, Lodha Excelus,

Apollo Mills Compound, N .M. Joshi Road,

Mahalaxmi, Maharashtra, Mumbai - 400 011.

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Customer Service Office

Customer Service- Mumbai

HDFC Standard Life Insurance Co. Ltd.

11th Floor, Lodha Excelus Apollo Mills Compound,

N .M. Joshi Road, Mahalaxmi,

Mumbai- 400011.

Customer Service- Chennai

HDFC Standard Life Insurance Company Limited,

6th Floor, RR Tower III,

T.V.K. Industrial Estate, Guindy,

Chennai-600032.

International Liaison Office

HDFC Standard Life Insurance Co. Ltd,

Office number- 207, 2nd floor, The Business Center,

Bank Street, Bur Dubai, Dubai, United Arab Emirates.

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3.6 Vision & Values

Values are the most critical elements that reflect the conduct of an organization.

Below is HDFC Life’s vision and our values, the pillars that support the success of

HDFC Life.

Vision

The most successful and admired life insurance company, which mean that we are

the most trusted company, the easiest to deal with, offer the best value for money

and set the standards in the industry.

'The most obvious choice for all'

Values

The vision and values that HDFC Life observe at work

Excellence

People Engagement

Integrity

Customer Centricity

Collaboration

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3.7 FUTURE GROWTH AND PROSPECTS

The major future prospects are as follows:

Further growth in distribution network across North East India.

Focus in insurance advisory service and ULIPs apart from Traditional

Insurance Plans.

Reaching out to the potential customers.

Increasing the base of insurance agents.

Applying Information Technology in its business operations

3.8 SWOT ANALYSIS

STRENGTHS

Domestic image of HDFC supported by Standard Life’s international image

is the strength of the company.

Strong and well spread network of qualified intermediaries and sales person.

Strong capital and reserve base.

The company provides customer service of the highest order.

Huge basket of product range which are suitable for all age and income

groups.

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Large pool of technically skilled manpower with in depth knowledge and

understanding of the market.

The company also provides innovative products to cater to different needs of

different customers.

WEAKNESS:

Heavy management expenses and administrative costs.

Low customer confidence on private players.

Vertical hierarchical reporting structure with many designations and cadres

leading to power politics at all levels without any exception.

Poor retention percentage of tied up agents.

OPPORTUNITIES

Insurable population: According to IRDA only 10% of people are insured.

This suggests that more than 300m people, with the potential to buy

insurance, remain uninsured.

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There will be inflow of managerial and financial expertise from the world’s

insurance markets. Further the burden of educating consumers will be shared

among many players.

International companies will help in building world class expertise in local

market by introducing the best global practices.

THREATS

Other private insurance companies also vying for the same uninsured

population.

Competition from public sector insurance companies like LIC, National

Insurance Company Limited, Oriental Insurance Limited, New India

Assurance Company Limited and United India Insurance Company Limited.

People trust Public sector insurance companies and go to them more.

Poaching of customer base by other companies.

Most people don’t understand the need or are not willing to take insurance

policies in general.

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3.8 MARKET SHARE

Graphical Representation: 3(b)

The above figure clearly shows that life insurance business is apparently

dominated by LIC. Apart from ICICI Prudential, all private players are having

single digit market share of which HDFC Life has achieved a market share of 6%.

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1. Liquid Fund

Fund Type: Open-End Fund

Asset Class: Money Market

Date of Inception: 02 Jan 2004

Assets Under Management ( In Lakhs): 10,853.80

1.1Investment Portfolio

Table: 4(a)

PORTFOLIO %

Deposits, Money Market Securities and other Assets. 100

Total 100

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Graphical Representation: 4(a)

INTERPRETATION:

The table and the figure shows that the entire amount of Liquid fund is invested in

deposits, money market securities and other short term instruments which is cash

or cash equivalents. The Fund invests 100% in high quality short-term money

market instruments and bank deposits. This means that the risk associated with

Liquid Fund is low and it delivers returns linked to Money Market levels with

minimal interest rate risk and minimal credit risk so as to provide a high level of

safety of capital.

Deposits, Money Mkt Securities

and other Assets 100%

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1.2 Fund V/s Benchmark Performance

Table: 4(b)

The benchmark returns is based on CRISIL Liquid Fund Index. From the table, it

can be understood that Liquid fund gave the return more than the benchmark

return in its inception. In the period of 5 years, the fund outperformed the

benchmark return by 1.31%. Likewise, the fund slightly yielded more return

(8.69%) than benchmark return (8.62%) in 3 years period. In 2 years period, the

actual return of the fund was less than benchmark return by 0.19%. Similarly, the

fund’s rate of return was 8.22% as compared to benchmark return of 9.16% in 1

year period. In the period of 3 months, the fund gave return at the rate of 2.03%

against the benchmark return of 2.17%.

Period Returns (%) Benchmark Returns

(%)

Inception 7.65 6.65

5 years 8.41 7.10

3 years 8.69 8.62

2 years 8.56 8.75

1 years 8.22 9.16

3 months 2.03 2.17

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2. Secured Managed Fund

Fund Type: Open-End Fund

Asset Class: Intermediate Bond

Date of Inception: 02 Jan 2004

Assets Under Management ( In Lakhs): 20,134.60

2.1 Investment Portfolio

Table:4(c)

PORTFOLIO %

Debentures/Bonds 50.94

Government Securities 35.50

Deposits, Money Market Securities and other Assets. 13.56

Total 100

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Graphical Representation: 4(b)

INTERPRETATION:

The table and the figure show that Secured Managed Fund invests in three types

of investment avenues. They are Debentures/Bonds, Government Securities and

deposits, money market securities and other short term instruments which are cash

or cash equivalents.

The Fund invests 51% of its money in debentures and bonds issued by various

public limited companies which includes Power Finance Corporation Limited,

Rural Electrification Corporation Ltd, LIC Housing Finance Limited, Housing

Development Finance Corporation Ltd, National Bank for Agriculture Rural

Development, National Thermal Power Corporation, Tata Sons Ltd., L&T

51%

35%

14%

Debentures/Bonds Government Securities Deposits, MMI & Others

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Shipbuilding Ltd., Power Grid Corporation of India Ltd., UPL Limited, Export and

Import Bank of India, Infrastructure Dev. Finance Ltd., Hindalco Industries

Limited and Others.

35% of the fund holds various securities of Government of India which consists of

8.33% GOI Mat 09-Jul-2026, 8.32% GOI Mat 02-Aug-2032, 8.83% GOI Mat 12-

Dec-2041, 1.44 Inflation Index Bond Mat 05-Jun-2023, 8.20% GOI Mat 24-Sep-

2025, 8.28% GOI Mat 21-Sep-2027, 6.35% Oil Bond Mat 23-Dec-2024, 7.28%

GOI Mat 03-Jun-2019, 9.23% GOI Mat 23-Dec-2043, 8.12% GOI Mat 10-Dec-

2020 and Others.

For the contingent purpose, the fund has 14% investment in high quality short-term

money market instruments and bank deposits. In this way, the fund provides

reasonable returns through investments in high credit quality debt instruments

while maintaining an optimal level of interest rate risk.

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2.2 Fund V/s Benchmark Performance

Table:4(d)

The benchmark returns is based on CRISIL Composite Bond Index. From the

table, it can be understood that Secured Managed fund gave the return more than

the benchmark return in its inception. In the period of 5 years, the fund

outperformed the benchmark return by 1.29%. Likewise, the fund slightly yielded

more return (7.80%) than benchmark return (6.85%) in 3 years period. In 2 years

period, the actual return of the fund was more than benchmark return by 0.62%.

Similarly, the fund’s rate of return was 3.36% as compared to benchmark return of

3.33% in 1 year period. In the period of 3 months, the fund gave return at the rate

of 1.61% against the benchmark return of 1.59%.

Period Returns (%) Benchmark Returns

(%)

Inception 06.57 05.27

5 years 07.24 05.95

3 years 07.80 06.85

2 years 06.76 06.14

1 years 03.36 03.33

3 months 01.61 01.59

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3. Defensive Managed Fund

Fund Type: Open-End Fund

Asset Class: Conservative Allocation

Date of Inception: 02 Jan 2004

Assets Under Management ( In Lakhs): 12,674.72

3.1 Investment Portfolio

Table: 4(e)

PORTFOLIO %

Debentures/Bonds 33.96

Government Securities 26.87

Equity 24.67

Deposits, Money Market Securities and other Assets. 14.50

Total 100

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Graphical Representation: 4(c)

INTERPRETATION:

The table and the figure show that Defensive Managed Fund invests in four types

of investment avenues. They are Debentures/Bonds, Government Securities,

Equities and deposits, money market securities and other assets.

The Fund invests 34% of its investment in debentures and bonds issued by various

public limited companies which includes Rural Electrification Corporation Ltd,

Power Finance Corporation Limited, Export and Import Bank of India, Housing

34%

27%

25%

14%

Debentures/Bonds

Government Securities

Equity

Deposits, Money Market Securities and other Assets.

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Development Finance Corporation Ltd, LIC Housing Finance Limited,Tata Sons

Ltd., Indian Railway Finance Corporation, Infrastructure Dev. Finance Ltd., UPL

Limited and Others.

27% of the fund holds various securities of Government of India which consists of

8.32% GOI Mat 02-Aug-2032, 8.33% GOI Mat 09-Jul-2026, 8.83% GOI Mat 12-

Dec-204, 8.20% GOI Mat 24-Sep-2025, 1.44 Inflation Index Bond Mat 05-Jun-

2023, 8.28% GOI Mat 21-Sep-2027, 7.28% GOI Mat 03-Jun-2019 and others.

The fund’s investment portfolio includes 25% of its assets on equities such as

Infosys Ltd, Reliance Industries Ltd, ICICI Bank Ltd., Tata Consultancy Services

Ltd, ITC Ltd and Others.

For the contingent purpose, the fund has 14% investment in high quality short-term

money market instruments and bank deposits. The fund aims to enhance long term

returns for a portfolio predominantly invested in fixed income securities by taking

a moderate to medium exposure to equity and equity related securities.

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3.2 Fund V/s Benchmark Performance

Table: 4(f)

From the table, it can be understood that Defensive Managed Fund gave the

return more than the benchmark return in its inception. In the period of 5 years, the

fund outperformed the benchmark return by 1.28%. Likewise, the fund slightly

yielded more return (6.84%) than benchmark return (6.46%) in 3 years period. In 2

years period, the actual return of the fund was less than benchmark return by

0.14%. Similarly, the fund’s rate of return was 3.47% as compared to benchmark

return of 4.61% in 1 year period. In the period of 3 months, the fund gave return at

the rate of 1.89% against the benchmark return of 1.44%.

Period Returns (%) Benchmark Returns

(%)

Inception 08.91 06.90

5 years 10.16 08.88

3 years 06.84 06.46

2 years 06.28 06.42

1 years 03.47 04.61

3 months 01.89 01.44

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4. Balanced Managed Fund

Fund Type: Open-End Fund

Asset Class: Moderate Allocation

Date of Inception: 02 Jan 2004

Assets Under Management ( In Lakhs): 53,950.16

4.1 Investment Portfolio

Table: 4(g)

PORTFOLIO %

Equity 51.29

Debentures/Bonds 24.19

Government Securities 16.96

Deposits, Money Market Securities and other Assets. 7.56

Total 100

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Graphical Representation: 4(d)

INTERPRETATION:

The table and the figure show that Balanced Managed Fund invests in four types

of investment avenues. They are Equities, Debentures/Bonds, Government

Securities, and deposits, money market securities and other assets.

The fund’s investment portfolio includes 51% on equities such as Infosys Ltd, ITC

Ltd, ICICI Bank Ltd, Reliance Industries Ltd, HDFC Bank Ltd, Larsen & Toubro

51%

24%

17%

8%

Equity

Debentures/Bonds

Government Securities

Deposits, Money Market Securities and other Assets.

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Limited, Tata Consultancy Services Ltd, Oil & Natural Gas Corporation Ltd,

Bharti Airtel Ltd and Others.

The Fund invests 24% of its investment in debentures and bonds issued by various

public limited companies which includes Rural Electrification Corporation Ltd,

Power Finance Corporation Limited, Indian Railway Finance Corporation,

Housing Development Finance Corporation Ltd, Export and Import Bank of India,

State Bank of Patiala, LIC Housing Finance Limited, Infrastructure Development

Finance Ltd, Tata Sons Ltd, UPL Limited and Others.

17% of the fund holds various securities of Government of India which consists of

8.32% GOI Mat 02-Aug-2032, 8.83% GOI Mat 12-Dec-204, 1.44 Inflation Index

Bond Mat 05-Jun-2023, 9.23% GOI Mat 23-Dec-2043, 6.35% Oil Bond Mat 23-

Dec-2024 and others.

For the contingent purpose, the fund has 8% investment in high quality short-term

money market instruments and bank deposits. The fund aims to generate long term

capital appreciation along with current income from a combined portfolio of equity

and debt market instruments.

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4.2 Fund V/s Benchmark Performance

Table: 4(h)

From the table, it can be understood that Balanced Managed fund gave the return

more than the benchmark return in its inception. In the period of 5 years, the fund

outperformed the benchmark return by 2.62%. Likewise, the fund negligibly

yielded less return (6.02%) than benchmark return (6.07%) in 3 years period. In 2

years period, the actual return of the fund was less than benchmark return by 1%.

Similarly, the fund’s rate of return was 3.99% as compared to benchmark return of

5.89% in 1 year period. In the period of 3 months, the fund gave return at the rate

of 1.94% against the benchmark return of 1.30%.

Period Returns (%) Benchmark Returns

(%)

Inception 11.28 08.24

5 years 14.42 11.80

3 years 06.02 06.07

2 years 05.71 06.71

1 years 03.99 05.89

3 months 1.94 01.30

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5. Growth Fund

Fund Type: Open-End Fund

Asset Class: Large Cap Equities

Date of Inception: 02 Jan 2004

Assets Under Management ( In Lakhs): 308,150.21

5.1Investment Portfolio

Table: 4(i)

PORTFOLIO %

Equity 99.04

Deposits, Money Market Securities and other Assets. 0.96

Total 100

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Graphical Representation: 4(e)

INTREPRETATION:

The table and the figure show that Growth Fund invests in two types of

investment avenues. They are Equities and deposits, money market securities &

other assets.

The fund’s investment portfolio includes 99% on equities of Infosys Ltd, ITC Ltd,

ICICI Bank Ltd, Reliance Industries Ltd, Larsen & Toubro Limited, HDFC Bank

Ltd, Shree Cement Limited, Tata Consultancy Services Ltd, IndusInd Bank Ltd,

Bharti Airtel Ltd, Nestle India Limited, Sun Pharmaceuticals Industries Ltd, Bharat

99%

1%

Equity Deposits, Money Market Securities and other Assets.

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Petroleum Corporation Ltd, Rural Electrification Corporation Ltd, Divis

Laboratories Ltd, Exide Industries Ltd, Oil India Limited, Cadila Healthcare Ltd,

Oracle Financial Services Software Ltd, National Mineral Development

Corporation Ltd, Godrej Industries Ltd, Hindustan Petroleum Corporation Ltd,

Power Finance Corporation Ltd, Sesa Sterlite Ltd, Bank of Baroda, UPL Limited,

Crompton Greaves Ltd and others.

For the contingent purpose, the fund has 1% investment in high quality short-term

money market instruments and bank deposits. Growth Fund aims to generate long

term capital appreciation from a diversified portfolio of equity and equity related

securities.

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5.2 Fund V/s Benchmark Performance

Table: 4(j)

INTERPRETATION:

From the table, it can be understood that Growth fund gave the return more than

the benchmark return in its inception. In the period of 5 years, the fund performed

almost equal to the benchmark performance. Likewise, the fund yielded less return

(3.74%) than benchmark return (5.11%) in 3 years period. In 2 years period, the

actual return of the fund was less than benchmark return by 2.35%. Similarly, the

fund’s rate of return was 5.11% as compared to benchmark return of 9.02% in 1

year period. In the period of 3 months, the fund gave return at the rate of 1.70%

against the benchmark return of 0.94%.

Period Returns (%) Benchmark Returns

(%)

Inception 14.19 12.54

5 years 18.93 18.94

3 years 03.74 05.11

2 years 05.05 07.40

1 year 05.11 09.02

3 months 01.70 00.94

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6. Equity Managed Fund

Fund Type: Open-End Fund

Asset Class: Equity

Date of Inception: 16 Jan 2006

Assets Under Management ( In Lakhs): 78,704.87

6.1Investment Portfolio

Table: 4(k)

PORTFOLIO %

Equity 82.53

Debentures/Bonds 2.07

Government Securities 8.91

Deposits, Money Market Securities and other Assets. 6.49

Total 100

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Graphical Representation: 4(f)

INTERPRETATION:

The table and the figure show that Equity Managed Fund invests in four types of

investment avenues. They are Equities, Debentures/Bonds, Government Securities,

and deposits, money market securities and other assets.

The fund’s investment portfolio includes 83% on equities of Infosys Ltd, ITC Ltd,

ICICI Bank Ltd, Reliance Industries Ltd, HDFC Bank Ltd, Larsen & Toubro

Limited,Tata Consultancy Services Ltd, Oil & Natural Gas Corporation Ltd, Bharti

83%

2% 9%

6%

Equity

Debentures/Bonds

Government Securities

Deposits, Money Market Securities and other Assets.

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Airtel Ltd, Divis Laboratories Ltd, IndusInd Bank Ltd, Dr Reddys Laboratories

Limited, AXIS Bank Limited, Nestle India Limited, Shree Cement Limited, Wipro

Ltd, Sesa Sterlite Ltd, Cadila Healthcare Ltd, Adani Port & Special Economic

Zone Ltd, Exide Industries Ltd, Lupin Limited, Bharat Petroleum Corporation Ltd,

Maruti Suzuki India Ltd, Sun Pharmaceuticals Industries Ltd and others.

2% of the portfolio of this fund holds debentures and bonds issued by public

limited companies like LIC Housing Finance Limited, L&T Shipbuilding Ltd, IL

& FS Limited, Housing Development Finance Corporation Ltd, Tata Sons Ltd and

others.

The fund has 9% of its total holding in government securities which includes

8.28% GOI Mat 21-Sep-2027, 8.79% GOI Mat 08-Nov-2021, 1.44 Inflation Index

Bond Mat 05-Jun-2023, 8.32% GOI Mat 02-Aug-2032, 8.33% GOI Mat 09-Jul-

2026 and others.

For the contingent purpose, the fund has 6% investment in high quality short-term

money market instruments and bank deposits. Equity Managed Fund aims to

achieve long term capital appreciation by investing pre-dominantly in equity and

equity related securities and balancing it by shifting assets to the fixed income

securities depending on the fund manager's views.

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6.2 Fund V/s Benchmark Performance

Table: 4(l)

INTERPRETATION:

From the table, it can be understood that Equity Managed Fund gave the return

more than the benchmark return in its inception. In the period of 5 years, the fund

outperformed the benchmark performance by 2.14%. Likewise, the fund yielded

less return (4.55%) than benchmark return (5.46%) in 3 years period. In 2 years

period, the actual return of the fund was less than benchmark return by 2.19%.

Similarly, the fund’s rate of return was 4.90% as compared to benchmark return of

7.88% in 1 year period. In the period of 3 months, the fund gave return at the rate

of 2.15% against the benchmark return of 1.07%.

Period Returns (%) Benchmark Returns

(%)

Inception 09.94 09.22

5 years 18.48 16.34

3 years 04.55 05.46

2 years 04.96 07.15

1 year 04.90 07.88

3 months 02.15 01.07

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7. Stable Managed Fund

Fund Type: Open-End Fund

Asset Class: Mixed Allocation

Date of Inception: 20 Jun 2007

Assets Under Management ( In Lakhs): 6,030.53

7.1 Investment Portfolio

Table: 4(m)

PORTFOLIO %

Debentures/Bonds 84.46

Government Securities 8.83

Deposits, Money Market Securities and other Assets. 6.70

Total 100

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Graphical Representation: 4(g)

INTERPRETATION:

The table and the figure show that Stable Managed Fund invests in three types of

investment avenues. They are Debentures/Bonds, Government Securities and

deposits, money market securities and other short term instruments which are cash

or cash equivalents.

84%

9%

7%

Debentures/Bonds

Government Securities

Deposits, Money Market Securities and other Assets.

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The fund’s portfolio includes 84% of its investment in debentures and bonds of

public limited companies which consists of Power Finance Corporation Limited,

Infrastructure Dev. Finance Ltd, LIC Housing Finance Limited, National Bank for

Agriculture Rural Development, Shree Cement, HDB Financial Services Ltd, Tata

Capital Financial Services Ltd, Power Grid Corporation of India Ltd, Mahindra

and Mahindra Financial Services Limited, Marico Ltd, Rural Electrification

Corporation Ltd, Indian Railway Finance Corporation, L&T Finance Ltd, ICICI

Home Finance Company Ltd, Housing Development Finance Corporation Ltd,

Tata Sons Ltd and others.

9% of the total fund is invested in government securities which are 7.38% GOI

Mat 03-Sep-2015 and 7.59% Oil Bond Mat 23-Mar-2015.

For the contingent purpose, the fund has 7% investment in high quality short-term

money market instruments and bank deposits. Stable Managed Fund aims to

generate optimal returns for investors through short term investments in high credit

quality securities so as to keep interest rate risks low and provide safety of capital

over the medium term horizon.

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7.2 Fund V/s Benchmark Performance

Table: 4(n)

From the table, it can be understood that Stable Managed Fund gave the return

more than the benchmark return in its inception. In the period of 5 years, the fund

outperformed the benchmark performance by 0.38%. Likewise, the fund yielded

less return (8.15%) than benchmark return (8.61%) in 3 years period. In 2 years

period, the actual return of the fund was less than benchmark return by 0.67%.

Similarly, the fund’s rate of return was 7.23% as compared to benchmark return of

8.48% in 1 year period. In the period of 3 months, the fund gave return at the rate

of 1.83% against the benchmark return of 2.12%.

Period Returns (%) Benchmark Returns

(%)

Inception 08.11 07.77

5 years 07.58 07.20

3 years 08.15 08.61

2 years 07.94 08.61

1 year 07.23 08.48

3 months 01.83 02.12

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8. Bond Opportunities Fund

Fund Type: Open-End Fund

Asset Class: Fixed Income

Date of Inception: 04 Aug 2008

Assets Under Management ( In Lakhs): 7,643.13

8.1 Investment Portfolio

Table: 4(o)

PORTFOLIO %

Government Securities 56.23

Debentures/Bonds 29.41

Deposits, Money Market Securities and other Assets. 14.36

Total 100

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Graphical Representation: 4(h)

INTERPRETATION:

The table and the figure show that Bond Opportunities Fund invests in three

types of investment avenues. They are Government Securities, Debentures and

Bonds and deposits, money market securities and other assets.

The fund has 56% of its investment in government securities which includes 8.83%

GOI Mat 12-Dec-2041, 8.28% GOI Mat 21-Sep-2027, 8.33% GOI Mat 07-Jun -

2036, 8.33% GOI Mat 09-Jul-2026, 9.20% GOI Mat 30-Sep-2030, 8.20% GOI Mat

15-Feb-2022, 8.32% GOI Mat 02-Aug-2032, 10.71% GOI Mat 19-Apr-2016,

56% 30%

14%

Government Securities

Debentures/Bonds

Deposits, Money Market Securities and other Assets.

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7.59% GOI Mat 12-Apr-2016, 8.97% GOI Mat 05-Dec-2030, 8.28% GOI Mat 15-

Feb-2032 and others.

30% of the portfolio is occupied by the debentures and bonds of public limited

companies which are LIC Housing Finance Limited, Steel Authority of India Ltd,

ICICI Securities Primary Dealership Limited, L&T Shipbuilding Ltd, Indian

Railway Finance Corporation, Rural Electrification Corporation Ltd, Tata Capital

Financial Services Ltd, State Bank Of Patiala, Tata Sons Ltd and others.

For the contingent purpose, the fund has 14% investment in high quality short-term

money market instruments and bank deposits. Bond Opportunities Fund aims to

provide reasonable returns through investments in high credit quality debt

instruments while maintaining an optimal level of interest rate risk.

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8.2 Fund V/s Benchmark Performance

Table: 4(p)

From the table, it can be understood that Bond Opportunities Fund gave the

return slightly less than the benchmark return in its inception. In the period of 5

years, the fund underperformed the benchmark performance by 1.32%. Likewise,

the fund yielded less return (5.41%) than benchmark return (6.85%) in 3 years

period. In 2 years period, the actual return of the fund was less than benchmark

return by 1.41%. Similarly, the fund’s rate of return was 1.53% as compared to

benchmark return of 3.33% in 1 year period. In the period of 3 months, the fund

gave return at the rate of 1.25% against the benchmark return of 1.59%.

Period Returns (%) Benchmark Returns

(%)

Inception 06.46 06.98

5 years 04.63 05.95

3 years 05.41 06.85

2 years 04.73 06.14

1 year 01.53 03.33

3 months 01.25 01.59

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9. Large Cap Niche Life Fund

Fund Type: Open-End Fund

Asset Class: Large Cap Equity

Date of Inception: 04 Aug 2008

Assets Under Management ( In Lakhs): 7,348.17

9.1Investment Portfolio

Table: 4(q)

PORTFOLIO %

Large Cap Equity 98.17

Deposits, Money Market Securities and other Assets. 1.83

Total 100

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Graphical Representation: 4(i)

INTERPRETATION:

The table and the figure show that Large Cap Niche Life Fund invests in two

types of investment avenues. The fund’s investment portfolio consists of Large

Cap Equities and Deposits, Money Market Securities and other Assets.

The fund mainly holds equities of large cap companies. 98% of its portfolio

consists of equities of Infosys Ltd, ITC Ltd, ICICI Bank Ltd, Reliance Industries

Ltd, HDFC Bank Ltd, Tata Consultancy Services Ltd, Larsen & Toubro Limited,

Tata Motors Limited, Sun Pharmaceuticals Industries Ltd, Dr Reddys Laboratories

Limited, Bharti Airtel Ltd, Oil & Natural Gas Corporation Ltd, IndusInd Bank Ltd,

98%

2%

Large Cap Equity Deposits, Money Market Securities and other Assets.

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Mahindra & Mahindra Ltd, Maruti Suzuki India Ltd, Sesa Sterlite Ltd, Wipro Ltd,

Bharat Petroleum Corporation Ltd, Divis Laboratories Ltd, AXIS Bank Limited,

Lupin Limited, Cipla Limited, State Bank of India, Kotak Mahindra Bank Limited,

Power Grid Corporation of India Ltd, Nestle India Limited, Grasim Industries Ltd,

Cairn India Limited, Shree Cement Limited, UltraTech Cement Ltd, Hindustan

Zinc Ltd, Bajaj Auto Ltd and others.

For the contingent purpose, the fund has 2% investment in high quality short-term

money market instruments and bank deposits. Large Cap Niche Life Fund aims to

generate long term capital appreciation from a diversified portfolio of pre-

dominantly in large cap equity and equity related securities.

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9.2 Fund V/s Benchmark Performance

Table: 4(r)

The benchmark returns rate is as per NIFTY Index. From the table, it can be

understood that Large Cap Niche Life Fund gave the return more than the

benchmark return in its inception. In the period of 5 years, the fund outperformed

the benchmark performance by 0.70%. Likewise, the fund yielded less return

(3.91%) than benchmark return (5.58%) in 3 years period. In 2 years period, the

actual return of the fund was less than benchmark return by 1.84%. Similarly, the

fund’s rate of return was 7.85% as compared to benchmark return of 10.26% in 1

year period. In the period of 3 months, the fund gave return at the rate of 1.64%

against the benchmark return of 1.63%.

Period Returns (%) Benchmark Returns

(%)

Inception 07.22 06.60

5 years 18.53 17.83

3 years 03.91 05.58

2 years 06.12 07.96

1 year 07.85 10.26

3 months 01.64 01.63

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10. Mid Cap Niche Life Fund

Fund Type: Open-End Fund

Asset Class: Mid Cap Equity

Date of Inception: 04 Aug 2008

Assets Under Management ( In Lakhs): 5,079.41

10.1Investment Portfolio

Table: 4(s)

PORTFOLIO %

Mid Cap Equity 96.89

Deposits, Money Market Securities and other Assets. 3.11

Total 100

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Graphical Representation: 4(j)

INTERPRETATION:

The table and the figure show that Mid Cap Niche Life Fund invests in two types

of investment avenues. The fund’s investment portfolio consists of Mid Cap

Equities and Deposits, Money Market Securities and other Assets.

Mid Cap Equities account for 97% of the portfolio of the fund which includes

equities of Bajaj Holdings & Investment Limited, Federal Ban, IPCA Laboratories

Ltd, Thermax Ltd, Eicher Motors Ltd, Apollo Tyres Ltd, Balkrishna Industries Ltd,

UPL Limited, Tata Global Beverages Ltd, Bajaj Finance Ltd, Hexaware

Technologies Ltd, Godrej Industries Ltd, Bata India Ltd, P & G Hygine & Health

97%

3%

Mid Cap Equity Deposits, Money Market Securities and other Assets.

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Care Ltd, Sanofi India Ltd, Britannia Industries Ltd, ING Vysya Bank Ltd,

Hindustan Petroleum Corporation Ltd, Tata Chemicals Ltd, Gujarat State Petronet

Ltd, MindTree Limited, Bajaj Corp Ltd, Coromandel International Ltd, Sobha

Developers Ltd, SKF India Ltd, Emami Ltd, Blue Dart Express Ltd, Gujarat

Mineral Developmnet Corporation Ltd, Trent Ltd, Voltas Ltd, IL&FS

Transportation Networks Ltd, Oriental Bank of Commerce, EID Parry India Ltd,

MRF Ltd, Petronet LNG Ltd, Indraprastha Gas Ltd, Gujarat Gas Company

Limited, Bajaj Electricals Limited, Great Eastern Shipping Company Ltd, Supreme

Industries Ltd, Torrent Power Ltd, Honeywell Automation India Ltd and others.

For the contingent purpose, the fund has 3% investment in high quality short-term

money market instruments and bank deposits. Mid Cap Niche Fund aims to

generate long term capital appreciation from a diversified portfolio of pre-

dominantly in mid cap equity and equity related securities.

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10.2 Fund V/s Benchmark Performance

Table: 4(t)

The benchmark returns rate is as per BSE Mid Cap Index. From the table, it can be

understood that Mid Cap Niche Life Fund gave the return more than the

benchmark return in its inception. In the period of 5 years, the fund outperformed

the benchmark performance by 3.16%. Likewise, the fund yielded more return

(2.96%) than benchmark return (0.66%) in 3 years period. In 2 years period, the

actual return of the fund was negative as against benchmark return of 0.89%.

Similarly, the fund’s rate of return was 1.56% as compared to benchmark return of

3.14% in 1 year period. In the period of 3 months, the fund gave return at the rate

of 3.59% against the benchmark return of 2.76%.

Period Returns (%) Benchmark Returns

(%)

Inception 10.62% 02.25%

5 years 21.86% 18.70%

3 years 02.96 00.66

2 years -01.23 00.89

1 year 01.56 03.14

3 months 03.59 02.76

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11. Money Plus Fund

Fund Type: Open-End Fund

Asset Class: Short Term Bond

Date of Inception: 04 Aug 2008

Assets Under Management ( In Lakhs): 4,193.12

11.1 Investment Portfolio

Table: 4(u)

PORTFOLIO %

Government Securities 93.80

Debentures/Bonds 0.48

Deposits, Money Market Securities and other Assets. 5.72

Total 100

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Graphical Representation: 4(k)

INTERPRETATION:

The table and the figure show that Money Plus Fund invests in three types of

investment avenues. They are Government Securities, Debentures and Bonds and

deposits, money market securities and other assets.

93.80%

0.48%

5.72%

Government Securities

Debentures/Bonds

Deposits, Money Market Securities and other Assets.

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The fund makes 93.8% of its investment on government securities which includes

7.59% Oil Bond Mat 23-Mar-2015, 7.59% GOI Mat 12-Apr-2016, 7.17% GOI Mat

14-Jun-2015 and10.71% GOI Mat 19-Apr-2016.

0.48% of the portfolio occupies corporate bond of L&T Finance Ltd.

For the contingent purpose, the fund has 5.72% investment in high quality short-

term money market instruments and bank deposits. The fund aims to generate

optimal returns from investments biased to the highest credit quality at the short

end of the yield curve, such that interest rate risks and credit risks are low.

11.2 Fund V/s Benchmark Performance

Table: 4(v)

Period Returns (%) Benchmark Returns

(%)

Inception 06.15 07.38

5 years 05.02 07.10

3 years 05.73 08.62

2 years 05.83 08.75

1 year 05.13 09.16

3 months 01.45 02.17

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INFERENCE:

The benchmark returns rate is as per CRISIL Liquid Fund Index. From the table, it

can be understood that Money Plus Fund gave the return less than the benchmark

return in its inception. In the period of 5 years, the fund underperformed the

benchmark performance by 2.08%. Likewise, the fund yielded less return (5.73%)

than benchmark return (8.62%) in 3 years period. In 2 years period, the actual

return of the fund was less than benchmark return by 2.92%. Similarly, the fund’s

rate of return was 5.13% as compared to benchmark return of 9.16% in 1 year

period. In the period of 3 months, the fund gave return at the rate of 1.45% against

the benchmark return of 2.17%.

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12. Managers Fund

Fund Type: Fund of Funds

Asset Class: Mixed Allocation

Date of Inception: 04 Aug 2008

Assets Under Management ( In Lakhs): 72,674.14

12.1Investment Portfolio

Table: 4(w)

PORTFOLIO %

Equity 59.98

Debentures/Bonds 21.44

Government Securities 14.01

Deposits, Money Market Securities and other Assets. 4.58

Total 100

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Graphical Representation: 4(l)

INTERPRETATION:

The table and the figure show that Managers Fund invests in four types of

investment avenues. They are Equities, Debentures/Bonds, Government Securities,

and deposits, money market securities and other assets.

The fund’s investment portfolio includes 60% on equities such as Infosys Ltd, ITC

Ltd, ICICI Bank Ltd, HDFC Bank Ltd, Reliance Industries Ltd, Larsen & Toubro

Limited, P & G Hygine & Health Care Ltd, Tata Consultancy Services Ltd, Sanofi

60% 21%

14%

5%

Equity

Debentures/Bonds

Government Securities

Deposits, Money Market Securities and other Assets.

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India Ltd, Bajaj Holdings & Investment Limited, Godrej Industries Ltd, Blue Dart

Express Ltd, Tata Motors Limited and others.

The Fund invests 21% of its investment in debentures and bonds issued by various

public limited companies which includes Rural Electrification Corporation Ltd,

LIC Housing Finance Limited, Power Finance Corporation Limited, Housing

Development Finance Corporation Ltd, ICICI Securities Primary Dealership

Limited and others.

14% of the fund holds various securities of Government of India which consists of

8.28% GOI Mat 21-Sep-2027, 8.20% GOI Mat 24-Sep-2025, 8.28% GOI Mat 15-

Feb-2032, 8.32% GOI Mat 02-Aug-2032, 1.44 Inflation Index Bond Mat 05-Jun-

2023 and others.

For the contingent purpose, the fund has 5% investment in high quality short-term

money market instruments and bank deposits. The Manager's Fund dynamically

manages the asset allocation between equity and fixed income instruments to

deliver higher returns through the equity exposure, combined with the stability of

the fixed income exposure. The fund returns are likely to be volatile due to the

market movements.

11.2 Fund V/s Benchmark Performance

The data for this purpose is not available.

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5.1 SUMMARY

This study is mainly done to know the asset allocation of ULIPs’ funds with

regards to HDFC Life. In the study, the investment portfolio of different ULIPs’

funds has been described and detailed. For a life insurance companies offering

ULIPs, its funds’ investment portfolio and funds’ performance plays very

important role. With the information pertaining to fund where ULIPs invest, the

customers both existing as well as potential can simply identify the funds where

they can put the investing portion of their premium. As we know, ULIPs are

becoming a growing and common avenue for investment, it is very important to

understand the funds’ asset allocation and their performance to avoid risks and to

achieve financial goals.

The project was carried out with the purpose to study and understand the funds’

portfolio and performance of HDFC Life. It was prepared by visiting the branch of

the company in Bangalore and interacting with different personnel like Branch

Manager, Financial Consultants and HR executives as well as with my college

guide. The study gives a bird’s eye view on the asset allocation and the

performance against the benchmark performance of the funds.

Graphical and tabular representation has been used to analyse and interpret the

investment portfolio of the funds. The performance of the fund over various

periods has been compared against the benchmark performance. The description is

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made available regarding the equities, debentures/bonds, government securities

and money market instruments depending upon the type of the funds.

5.2 FINDINGS

1. In case of Liquid Fund, the total asset under management is 10,853.80 Lakhs,

of which entire investment is injected in deposits, money market securities and

other short term instruments which is cash or cash equivalents which maturity is

less than a year and they are rated as AAA which means they are prime and highly

rated debt. Regarding the performance, this fund is stable with the benchmark

performance in all time period.

2. In case of Secured Managed Fund, the total asset under management is

20,134.60 Lakhs, which mainly invests in corporate debentures and bonds and

partly in government securities and money market instruments; 54.62% of the debt

is rated as AAA, 4.31% of the debt is rated as AA+ and 41.07% of the debt is rated

as Sovereign which means some asset holding are prime grade (AAA), some are

high grade (AA+) and government securities are rated as “sovereign”. Regarding

the performance, this fund has yielded return more than the benchmark return in

every time period.

3. In case of Defensive Managed Fund, the total asset under management is

12,674.72 Lakhs, which mainly invests in corporate debentures and bonds and

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partly in equities, government securities and money market instruments; 52.01% of

the debt is rated as AAA, 3.83% of the debt is rated as AA+ and 44.17% of the

debt is rated as Sovereign which means some asset holding are prime grade

(AAA), some are high grade (AA+) and government securities are rated as

“sovereign”. Regarding the performance, the fund yielded more rate of return than

the benchmark in its inception, 5 years and 3 years period and less rate of return in

2 years and 1 year period.

4. In case of Balanced Managed Fund, the total asset under management is

53,905.16 Lakhs, which mainly invests in equities and partly in debentures/bonds,

government securities and money market instruments; 54.59% of the debt is rated

as AAA, 4.20% of the debt is rated as AA+ and 41.21% of the debt is rated as

Sovereign which means some asset holding are prime grade (AAA), some are high

grade (AA+) and government securities are rated as “sovereign”. Regarding the

performance, the fund had higher returns than the benchmark returns in its

inception, 5 years and 3 years period and lower returns in 2 years, 1 year and

3months period.

5. In case of Growth Fund, the total asset under management is 308,150.21

Lakhs, which mainly invests in equities and equities related securities. Regarding

the performance, the fund gave higher returns than the benchmark returns in its

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inception and 5 years period; it underperformed in 3 years, 2 years and 1 year

period and gave stable return in 3 months period.

6. In case of Equity Managed Fund, the total asset under management is

78,704.87 Lakhs, which mainly invests in equities and equities related securities

and partly in debentures/bonds, government securities and money market

instruments; 18.82% of the debt is rated as AAA and 81.18% of the debt is rated as

Sovereign which means some asset holding are prime grade (AAA) and

government securities are rated as “sovereign”. Regarding the performance, the

fund gave returns higher than the benchmark returns in its inception and 5 years

period. It under performed in 3 years, 2 years and 1 year period. In 3 months

period, the fund yielded higher return than the benchmark.

7. In case of Stable Managed Fund, the total asset under management is 6,030.53

Lakhs, which mainly invests in short term and mid -term corporate debentures and

bonds and partly in government securities and money market instruments; 66.07%

of the debt is rated as AAA, 24.57% of the debt is rated as AA+ and 9.36% of the

debt is rated as Sovereign which means some asset holding are prime grade

(AAA), some are high grade (AA+) and government securities are rated as

“sovereign”. Regarding the performance, the fund’s returns are almost stable to the

benchmark returns in all periods.

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8. In case of Bond Opportunities Fund, the total asset under management is

7,643.13 Lakhs, which mainly invests in government securities and partly in

corporate debentures and bonds and money market instruments; 30.69% of the

debt is rated as AAA, 3.66% of the debt is rated as AA+ and 65.66% of the debt is

rated as Sovereign which means some asset holding are prime grade (AAA), some

are high grade (AA+) and government securities are rated as “sovereign”.

Regarding the performance, the fund yielded returns less than the benchmark

returns in all time period.

9. In case of Large Cap Niche Fund, the total asset under management is

7,348.17 Lakhs, which mainly invests in large cap equities and negligibly on

money market securities. Regarding the performance, the fund outperformed the

benchmark returns in its inception and 5 years period and then it underperformed

in 3 years, 2 years and 1 year period.

10. In case of Mid Cap Niche Fund, the total asset under management is 5,079.41

Lakhs, which mainly invests in mid cap equities and negligibly in money market

securities. Regarding the performance, the fund outperformed the benchmark

returns in its inception, 5 years and 3 years period. It gave negative return in 2

years period and lower return in 1 year period and it yielded high return in 3

months period.

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11. In case of Money Plus Fund, the total asset under management is 4,193.12

Lakhs, which mainly invests in government securities, partly in money market

securities and negligibly in debentures/bonds; 99.49% of the debt is rated as

Sovereign and 0.51% of the debt is rated as AA+ which means government

securities are rated as “sovereign” and short term debts are of high grade.

Regarding the performance, the fund underperformed than the benchmark returns

in all time period.

12. In case of Managers Fund, the total asset under management is 72,674.14

Lakhs, which mainly invests in equities and partly on corporate bonds/debentures,

government securities and money market instruments; 56.34% of the debt is rated

as AAA, 4.13%% of the debt is rated as AA+ and 39.53% of the debt is rated as

Sovereign which means some asset holding are prime grade (AAA), some are high

grade (AA+) and government securities are rated as “sovereign”.

13. The funds which portfolio consists of equities basically has similar equities

when it comes to sector wise classification which are: Banks, IT Consulting &

Software, Pharmaceuticals, Cigarettes-Tobacco Products, Integrated Oil & Gas,

Construction & Engineering, Cars & Utility Vehicles, Exploration & Production,

Commercial Vehicles, Telecom Services, Finance (including NBFCs), Utilities:

Non-Electrical, Commodity Chemical, Personal Products, Auto Tyres & Rubber

Products, Cement & Cement Products and others.

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5.3 CONCLUSIONS

The life insurance sector has been booming in recent times and the growth rate of

this sector has been substantial. It is a place where the insurance services are

offered like traditional insurance plans, conventional insurance plans and Unit

linked insurance plans (ULIPs). In the present context, the life insurance sector is

booming exceptionally from the introduction of information, communication and

technology. HDFC Life, being one of the major insurance companies providing life

insurance products and services to the general public in the country. It has always

focused on building products and services to cater the changing needs of the clients

that enhance high comfort value.

In Unit Linked Insurance Plans (ULIPs), the investments made are subject to risks

associated with the capital markets. This investment risk in investment portfolio is

borne by the policy holder. Thus, one should make the investment choice after

considering the risk appetite and needs. Another factor that one needs to consider

is the future need for funds. HDFC Life offers a variety of unit-linked insurance

products to suit financial goals - be it for retirement planning, for health, for child's

education and marriage or for investment purposes. In a Unit Linked Plan (ULIP),

the premiums you pay are invested in the funds chosen by you after deducting

allocation charges and charges including those for managing funds, policy

administration and for providing insurance cover are deducted from the funds by

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cancelling certain units. The value of each unit of a fund is determined by dividing

the total value of the fund's investments by the total number of units.

From this study of analyzing different funds where HDFC Life makes investment

out of ULIPs holders’ premium, it can be concluded that the asset allocation

among equities, corporate bonds/debentures, government securities and money

market instruments is done by the fund managers based on different market tactics,

investment situations, investment options available and investment strategies. The

investment it ULIPs funds is subject to capital market risks and the fund

performance is high or stable or low or even negative as against the benchmark

performance depending upon various factors. Credit rating is highly taken into

consideration while pooling investment in different investment avenues.

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6.1 RECOMMENDATIONS AND SUGGESTIONS

The investors prefer most economical mode of investment. Hence, ULIPs

being one of the emerging medium of investment should be economical

mainly in terms of different fees and charges associated with them such as

Administration charges, Fund management charges, Switch charges,

Surrender charges, Mortality charges, Premium Allocation charges and

Partial Withdrawal charges.

As ULIPs are not still the popular investment option as compared to others

like Gold/Silver, Mutual Funds, Equities trading etc., the company create

awareness and initiate customer education about ULIPs and its structure,

functioning and benefits to the general mass of investors. This will help the

company to create increased customer base.

The company should utilize the fund in best financial instruments as per

fund objective and policy holders’ goals to yield higher returns as compared

to its benchmark counterparts.

The company should focus on achieving regular premium payments from

the policy holders and minimizing the surrender/discontinuity of the

insurance policies.

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The company should build up its funds’ investment portfolio in such a way

that it yields maximum return at minimal risks considering tactics in buying,

selling, and holding assets in capital market.

The company should also consider its competitors’ business, its competitors’

funds’ investment portfolio, marketing strategies, investment strategies so as

to sustain and progress in the sector.