A PROJECT REPORT ON

INVESTDIRECT (INDIA) LTD CHANDIGARH On The Topic Analyzing the financial products of HSBC Invest direct (India) Ltd

SUBMITTED TO LOVELY PROFESIONAL UNIVERSITY In Partial Fulfillment of the Requirements for the Award of Degree Of MASTER OF BUSINESS ADMINISTRATION

SUBMITTED BY:

Baljit Kaur MBA Reg.No. - 11000066

DEPARTMENT OF MANAGEMENT LOVELY PROFESSIONAL UNIVERSITY JALANDHAR NEW DELHI GT ROAD PHAGWARA, PUNJAB

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ACKNOWLEDGEMENT

It is often said that journey of a thousand miles begins with the first, uncertain if we may add, step. My journey was not too different. It involved the help, support and contribution of several people. It is difficult to ascertain the starting point for such thanks giving, and yet one usually starts with the most significant contributor. In my case let us begin with the people who strictly confined themselves to behind the scenes before I move on to the persons who directly affected the course and scope of events. I would like to extend our sincerest gratitude to PROF. DEEPIKA DHALL for her unrelenting support and an uncanny habit of pointing out the flaws in the scheme of things at the most crucial juncture, hence causing several opportunities for learning. I do not think it would be just to end such thanks giving without thanking our respondents for co operating with us. I also express my sincere gratitude towards Ms. SAKSHI VATS my guide. My increased spectrum of knowledge in the mutual funds and ULIPs and other product is the result of her constant supervision and direction that has helped me absorbs relevant and high quality information. Beside the mixed experience that I had during the course of my study and analysis; also helped me to learn a lot regarding the actual working of a company. It also taught me how to take every experience in right spirit and earn from each ones. Finally I also extend my heartiest thanks to all my friends and well wishers for being with me and extending encouragement throughout the project.

BALJIT KAUR

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CERTIFICATE

This is to certify that MS BALJIT KAUR of Lovely Institute of Management, Phagwara has successfully completed the project work titled ANALYZING THE FINANCIAL PRODUCTS OF HSBCin partial fulfillment of requirement for the award of POST GRADUATION DEGREE IN BUSINESS MANAGEMENT prescribed by the Lovely Professional University. This project is the record of authentic work carried out during the academic year (2010 2012).

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To Whom It May Concern

It is to certify that Baljit Kaur, Registration No. 11000066 has satisfactorily completed the project work, analyzing the financial products of HSBC Invest direct (India) Ltd for the partial fulfillment of the award of the degree of Master of Business Administration by Lovely Professional University.

Sign of Academic Head ( )

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TABLE OF CONTENTS S.NO 1. PARTICULARS

EXECUTIVE SUMMERY

PAGE.NO 7

CHAPTER 1 INTRODUTION 1.1 Industrial Profile 1.2 Company Profile 1.3 The HSBC Group In India 1.4 Division Of The Company 1.5 Key Executives 1.6 The Competitors

8 14

2. 3.

Chapter 2 Objective, Scope of study Chapter 3 Review of Literature & Methodology 3.1 Review of literature 3.2 Research Methodology 3.3 Data sources: - Primary data -Secondary data 3.4 Type OF RESEARCH 3.5 Sampling Technique 3.6 Sampling Unit 3.7 Sample Size 3.8 Statistical tools used 3.9 Instrumentation Technique

16 18 22

4.

Chapter 4

24 33
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Analysis of products and services of HSBC

5.

Chapter 5 Data Analysis and Interpretation

35- 49

6.

Chapter 6 Limitations Suggestions & Conclusion

51- 53

7.

Chapter 7 References, Bibliography

55 -56

8.

Questionnaires

58 -60

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Executive Summary
In today's complex financial environment, investors have unique needs which are derived from their risk appetite and financial goals. But regardless of this, every investor seeks to maximize his returns on investments without capital erosion. The art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance. These are the basic activities done by the broking firms. HSB (India) Limited, a financial services company, provides customized financial management solutions to individual and corporate customers in India. The company offers various retail broking service offerings comprising equities, derivatives, mutual funds, and insurance products, as well as NRI, online trading, and branch trading services. It also provides wealth management products and services, including investments; IPO advisory and distribution services; various risk management solutions for corporate and individual customers; and portfolio management services.. These options depend on the financial requirements of the investors and constructed according to that only, but with time these requirements changes, so all products need some up gradations. This project will also concentrate on this area. Project will also compare and analyze products of major competitors of HIDL. It will help in making financial products of HSBC Invest Direct Limited more superior and beneficial to customers.

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Chapter 1 Introduction

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Industry Profile
Finance and Investment Industry is a fairly broad ranging group of institutions that provide various financial services. Examples of such institutions include commercial banks, merchant (or investment) banks, insurance companies, brokerage firms, asset managers, and an assortment of other institutions. Services provided range from money management for private individuals, to debt and equity underwriting for corporations to issuance of insurance policies, and many other services. In todays global markets, this industry is the engine of the global economy, enabling corporations and the government to grow and expand.

In 2009-10, the Indian economy is estimated to have grown by 7.2 per cent. According to the latest Central Statistical Organization (CSO) data, financial services and real estate sector rose by 7.8 per cent in the third quarter of 2009-10. The sectors including banking and insurance and mutual funds are beginning to reap the benefits of a good closure of 20092010. Financial services organizations are striving to achieve increasingly ambitious profit and growth targets against a background of heightened risk, regulation and market pressures. Customer needs and expectations are evolving in the face of increasing personal wealth, more private funding of pensions and health care and the desire for ever more accessible and personalized financial products and services. In turn, intense competition has squeezed industry margins and forced organizations to cut costs while still seeking to enhance the quality of client choice and service. The battle for talent is also heating up as companies seek to enhance innovation, customer loyalty and investment returns The corollary of this market evolution is increasing risk as products become more complex, organizations more diffuse and the business environment ever more uncertain. Regulation is also tightening in the wake of public and government pressure for improved governance and
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transparency.

In this environment, the winners will be companies that can turn the challenges into opportunities to build stronger and more enduring customer relationships; sharpen process efficiency; unlock talent and creativity; use improved risk management processes to deliver more sustainable returns; and use new regulatory demands as a catalyst for strengthening the business and enhancing market confidence. The government has taken a number of steps to revive the economy, including slashing interest rates, lowering factory levies and more than doubling the limit on foreign investment in corporate bonds. The financial services space is a rapidly growing one in India. The country received US$ 45 billion in foreign currency remittances from non-resident Indians in 2008, the highest in the world.

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COMPANY PROFILE:HSBC

Company History: The HSBC Group is named after its founding member, The Hongkong and Shanghai Banking Corporation Limited, which was established in 1865 to finance the growing trade between Europe, India and China. The inspiration behind the founding of the bank was Thomas Sutherland, a Scot who was then working for the Peninsular and Oriental Steam Navigation Company. He realized that there was considerable demand for local banking facilities in Hong Kong and on the China coast and he helped to establish the bank, which opened in Hong Kong in March 1865 and in Shanghai a month later. Soon after its formation the bank opened agencies and branches around the world. Although that network reached as far as Europe and North America, the emphasis was on building up representation in China and the rest of the Asia-Pacific region. HSBC was a pioneer of modern banking practices in a number of countries. In Japan, where a branch was established in 1866, the bank acted as adviser to the government on banking and currency. In 1888, it was the first bank to be established in Thailand, where it printed the countrys first banknotes. From the outset trade finance was a strong feature of the local and international business of the bank, an expertise that has been recognized throughout its history. Bullion, exchange, merchant banking and note issuing also played an important part. By the 1880s, the bank was acting as banker to the Hong Kong government and also participated in the management of British government accounts in China, Japan, Penang and Singapore. In 1874 the bank handled Chinas first public loan and thereafter issued most of Chinas public loans.

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What is HSBC?

We are the worlds local bank. Headquarters in London, HSBC is one of the largest banking & financial services organization in the world. HSBCs international network comprises over 9500 offices in 76 countries & territories in Europe, the Asia-Pacific region, the Americas, the Middle East & Africa. With listings on the London, Hongkong, New York, Paris & Bermuda stock exchange shares in HSBC holdings places are held by nearly 200,000 shareholders in some 100 countries & territories. The shares are traded on the New York stock exchange in the form of American Depository Receipts. Through an international network linked by advertisement techniques, including a rapidly growing e-commerce capability, HSBC provides a comprehensive range of financial services like Personal financial services Commercial Banking Corporate Banking Investment Banking

THE HSBC GROUP IN INDIA

Year of commencement of operations in India

The Mercantile Bank of India, China & London The Hongkong & Shanghai Banking Corporation Limited (HBAP) HSBC Securities & Capital Markets (India) Private Limited (HBAP) HSBC Private Equity Management (Mauritius) Limited

: 1853 : 1867 : 1995

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(India liaison Office) (PEIN) HSBC Electronic Data Processing India Private Limited (HDPI) HSBC Primary Dealership (India) Private Limited (HCPD) HSBC Professional Services (India) Private Limited (HPSI) HSBC Software Development (India) Private Limited (HSDI) HSBC Asset Management (India) Private Limited (ISIN) HSBC Insurance Brokers (India) Private Limited (ININ) HSBC Operations & processing enterprise(India) Pvt. Ltd. (HOPE) Canara HSBC Oriental bank of commerce Life insurance co. Ltd.

: 1995 : 2000 : 2001 : 2001 : 2002 : 2002 : 2003 : 2003 : 2008

HSBC Invest Direct (India) Limited, a financial services company, provides customized financial management solutions to individual and corporate customers in India. The company offers various retail broking service offerings comprising equities, derivatives, mutual funds, and insurance products, as well as NRI, online trading, and branch trading services. It also provides wealth management products and services, including investments; IPO advisory and distribution services; various risk management solutions for corporate and individual customers; and portfolio management services. In addition, the company offers various institutional offerings, such as investment banking services for equity related products and instruments; and institutional equity broking services. Further, HSBC InvestDirect (India) Limited provides various advisory services and investment tools. It was formerly known as IL&FS Investsmart Limited and changed its name to HSBC InvestDirect (India) Limited in August 2009. The company was founded in 1997 and is based in Mumbai, India. HSBC InvestDirect (India) Limited is a subsidiary of HSBC Securities & Capital Markets (India) Private Limited. It is listed in both exchanges, NSE and BSE. DIVISIONS OF THE COMPANY The following are the divisions of HIDL Limited: The Investment Advisory and Broking Division Merchant Banking Division The Project Syndication Division
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Institutional Equity Broking Division Institutional Debt Broking division

Key Executives

Chairman

Hardeep Singh

Director

Ajay Dua

Managing Director & CEO

Manasije Mishra

Director

TarunKataria Sonal Dave

Additional Director

Naina Lal Kidwai

Company Secretary

Kashmira Mathew

THE COMPETITOR
The existing major players in the stock broking industry besides HSBC invest direct are. 1. ICICIDirect 2. HDFC Securities 3. Standard Chartered -STCI 4. IDBI Paisa Builder 5. AXIS Bank

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Chapter 2
Objective and Scope of study

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OBJECTIVE OF THE STUDY

The main objective of this study is to understand the rationale behind an individuals investment decision or financial planning, considering whether or not factors like age, no. of dependents, income level, risk appetite, etc. influence his/her investment/financial planning decision. This will help in creating the financial products which are framed according to the investors risk appetite and rationale behind investment. Other objective for the study is analyzing the product and services offered by major competitor of HSBC Invest direct.

Scope of study:The scope of Financial Product is highly vast and with private sector banks mushrooming, there is a large number of Financial Product in the market to choose from. Thus, the project would cover To compare and analyze the products of major competitors of HSBC Invest Direct (India) Limited (HIDL). It will help in making financial products of HSBC Invest Direct Limited more superior and beneficial to customers. Risk appetite of investors will be measured by doing the survey through the questionnaire. This will help in preparing and offering the suitable options to the customers. This Study will also help to understand the customers satisfaction and perception about HSBCs services and products.

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Chapter 3 Review of Literature& Methodology

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REVIEW OF LITRATURE Bruce A. Huhmann et.al (2005) Examine that the consumers require information about the risk-return trade-off credibility information to relieve principal-agent conflict concerns, and transaction cost information for investment decisions. This paper aims to investigate whether or not such information is present in advertisements for one investment vehicle mutual funds. Mutual fund advertisements are not providing the information necessary for optimal investment decisions. Mutual funds use techniques known to increase the likelihood that their advertisements are noticed, but they also use techniques known to decrease the readership of their advertisements. David E. Allen (2006) analyzed that mutual fund investors' response to mergers of

Australian mutual fund companies. The mergers are not accompanied by increased money flows. Instead investors withdraw from the target funds prior to and after the merger. Funds belonging to specialist mutual fund companies record more gains in assets under management than declines following mergers, and that money inflow gains at competing funds induce reductions of management expense ratios at target funds. Kerstin Drachter et.al (2007) Examine the performance of actively managed mutual funds is largely dependent upon the investment decisions of the fund managers. The purpose of this study is to examine the decision processes in German fund companies and their impact on fund performance. it is possible to conduct a high quality survey study even though

managers know that their answers will be linked to their performance and secondly, that the behavior of managers depends heavily on the characteristics of the funds and the characteristics of the fund company Timo Korkeamaki et.al (2007) examine the effect of advertising on mutual fund cash flows in the Finnish fund market and his findings shows that the past year's performance nor advertising alone is sufficient to produce increased cash flows. However, advertising together with past performance is found to significantly affect cash flows. The positive effect of advertising is limited to the use of non-perishable advertising media. Additionally, it is found that fund families spending proportionately more on advertising receive higher asset flows.

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Cheng-Ru Wu et.al (2008) it is found that how investors evaluate mutual fund performance, not only based on both quantitative but also qualitative criteria and his findings shows that most important criteria of mutual fund performance should be mutual fund style, following is market investment environment. This result indicates investors' focus when they evaluate the mutual fund performance. Rob Jans, et.al (2008) examine the tournament hypothesis in the UK mutual fund market. Based on a previous US study, fund managers were expected to alter risk-taking behavior in response to their performance relative to competing fund managers and his findings show that the entire 1989-2003 sample period no consistent evidence for tournament behavior is found. This is robust to the effects of survivorship bias and window dressing. Second, splitting the sample period into two sub-periods reveals an interesting pattern. During the first part of the sample period, 1989-1996, significant evidence for tournament behavior is found. During the second part of the sample period, 1997-2003, significant support for strategic behavior, as described theoretically by Taylor has been documented. Laurens Swinkels (2009) The purpose of this paper is to empirically assess the investment performance of mutual fund managers who operate in the Polish market. For each of the three categories, equity, balanced, and bond funds, the paper positive, but insignificant selectivity skill of the mutual fund managers. No evidence is found of bond or equity market timing skills in the sample. Yurij Lukashin (2009) describe development of Russian mutual fund (MF) market, to suggest and apply methodology of statistical analysis of management quality, to evaluate profitability and risks of the market and his findings shows that the Russian mutual market is growing both in number and in aggregate value of net assets. Profitability and risks of the market are high. Tajudeen Olalekan Yusuf, (2010) Examine how insurance brokers control opportunism at the postcontractual stage of insurance contract in the Nigerian insurance market. The involvement of the insurance brokers from the claim notification stage, claim auditing to actual settlement and dispute mediation are instances of control over customers' opportunistic tendencies. Also, it is found that fear of reputation damage and brokers' professional way of handling clients' over-exaggeration and suspicious claiming might considerably control insurance opportunism.
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Dag Einar Sommervoll, et.al (2011) study to what extent an insurance based on a house price index provides equity protection for homeowners and It is found that the payout efficiency is surprisingly stable (around 50 percent) for all temporal spatial aggregations. A neighborhood index outperforms the metropolitan index with respect to target efficiency (the probability of payout given a loss). The introduction of maturity times, say legitimate claim five years after purchase, does improve efficiency somewhat. However, the idiosyncratic component of housing market transactions remains high, and the insurance probably unattractive from a homeowner perspective.

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RESEARCH METHODOLOGY
The Research Methodology will be used by me for the purpose of this project is as follows:TYPE OF RESEARCH

The research design comprise of the plan and structure of investigation conceived so as to arrive at the responses to the research queries. The research design will be used here for this project is a descriptive research designs.

DATA SOURCE:Primary Data: The primary data are which are collected afresh and for the first time, and thus happen to be original in character. A primary survey was conducted at Chandigarh city. The survey was carried out at various levels & the target group was retail investors, business men, industrialists, exporters, etc. Questionnaires were used as an instrument to collect the primary data.

Secondary Data: Secondary data is collect about various researches done earlier on this topic. Data are collected from various sites about the investment patterns.

SAMPLING TECHNIQUE

The sampling technique adopted for the study is Random sampling technique according to the convenience of the researcher.

SAMPLE SIZE Sample size is 50 respondents.

SAMPLE UNIT Chandigarh

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STATISTICAL TOOLS USED Statistical tools like Tabulation, Factor analysis, Bar Graph Representations, and percentage analysis are used in the compilation and computation of data.

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Chapter 4
Analysis of product and services of HSBC

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Analysis of product and services of HSBC

PRODUCTS AND SERVICES: Personal financial services Commercial Banking Corporate Banking Investment Banking 1) Fixed Deposits 2) Mutual funds 3) SIP 4) Insurance 5) Ulip

PERSONAL FINANCIAL SERVICES (PFS) HSBC India offers a wide range of competitively priced services & products to over 1.75 million individual resident Indians as well a Non-resident Indian customers across India, USA, UK, Middle East & South East Asia. HSBCs 150 year presence in India allows it to enjoy the advantage of deep rooted knowledge of local markets & customs. This has lead to development of products & services, which are attuned to the financial needs of Indians in the cities where HSBC operatives. The HSBC brand is associated with core values such as transparency, trust & honesty. These factors enable HSBC India to remain highly competitive & at the leading edge of the retail & commercial banking market in the country. The distribution network in India consists of 47 branches in 26 cities supported by 170 ATMs at 142 locations. In addition, self service banking channels, such as Internet Banking & a 24 hour centralized all India Call Centre provide a strong backbone to the distribution capabilities. A second load balancing Call Centre became operational in January 2005 at HSBC Operations & Processing Enterprise (India) Private Limited, Chennai. Customers can apply for all products & services online at www.hsbc.co.in The bank offers a complete suite of products & services including HSBC Premier International, HSBC Premier, Power Vantage, Savings & Current Accounts, International
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Debit Cards & Term Deposits in addition to consumer loan products like International Credit Cards, Mortgage, Personal Loans, Educational loans & Overdrafts. HSBC is the 6th largest Credit Card issuer in India with over 1.3 million cards in force. Premier & mid market customers have access to comprehensive Financial Planning & HSBC is a market leader in the provision of Wealth Management services. In 2005,HSBC was the largest distributor of Retail Mutual Funds in India, & the biggest sales channel for Banc assurance partner TATA AIG. Non-Resident Indians (NRIs) constitute 56% of the Banks deposit base. The banking a needs of NRIs are fulfilled from branches in India & 11 NRI centres abroad. We have over 84,000 NRI Customers, & have started referring customers to Financial Planning Managers & the Private Bank in the host countries, to address their needs for investment products. A free remittance service is offered between accounts held by NRIs with HSBC overseas & onshore. In 2006, an International Banking Centre was established facilitate cross border business referrals.

COMMERCIAL BANKING

HSBC is a leading provider of financial services to small, medium-sized and middle-market enterprises. The Group has over 43,000 such customers in India, including sole proprietors, clubs and associations, incorporated businesses and publicly quoted companies. Commercial Banking provides a full range of banking services to these customers including multicurrency business accounts, payment and cash management, trade services, factoring and a range of borrowing solutions.

In India, Commercial Banking has a presence in 47 branches covering 26 key cities and for the convenience of our customers, a multi channel service including Internet and Phone banking. For SME customers, HSBC offers the complete range of transaction baking services as well as unsecured loans and loans for and against property. The services are supported by a large Sales and Relationship Management team in key locations across the country. India is the first country in the HSBC Group where Commercial Banking lends to Microfinance Institutions, thus providing indirect funding to hundreds of small business owned and run by
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members of underprivileged sections of society. A dedicated unit has been formed to focus on Microfinance and other Priority Sector institutions, with a view to further reach out to the marginalized and under banked.

CORPORATE AND INSTITUTIONAL BANKING

Corporate Banking (CB) is an integral part of the Global Banking structure, which focuses on offering a full range of service to multinationals, large domestic corporate and institutional clients. Provides a wide range of banking and financial services provided to domestic and international operations of large local corporate and local operations of multinationals corporations. Services include access to commercial banking products, including working capital facilities such as domestic and international trade operations and funding, channel/distributor financing, and overdrafts, as well as domestic and international collections and payments, INR and Foreign currency term loans (external commercial borrowing in foreign currency), letters of guarantee etc.

Institutional Banking drives the Groups relationship with banks, financial institutions, securities houses, insurance companies, and asset management companies and other nonbanking companies, non-government and development organizations operating in India. Market leadership position based on strong relationships with major financial institutions.

Investment Banking and Markets brings together the advisory and financing, equity Securities, equity linked transactions, asset management, treasury and capital markets, and private equity activities of the Groups to complete the Global Banking structure and provide a complete range of financial products to our clients.

Clients are serviced by sector based client service teams that combine relationship managers, product specialists and industry specialists to develop customized financial solutions. These

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form the relationship team along with the Investment Banking structure and provide a complete range of financial products to our clients.

INVESTMENT BANKING

1) HSBC FIXED DEPOSITS

When it comes to assured returns, choosing the right type of savings scheme makes all the difference. HSBC Fixed Deposits let you make the most of value-added benefits as you create wealth at low risk.

Features & Benefits The superior Fixed Deposit to invest in, for a secure future Interest Rates Fixed Deposit Period Citizens Interest You can now open a Fixed Deposit with Rs. 10,000 only Enjoy high rate of returns on your HSBC Fixed Deposits Choose from a wide range of tenors as per your convenience Avail of our special rates for select tenors

Interest Rate (% p.a.)

Senior Rate** (% p.a.) 3.25 3.25 3.75 4.50 5.50 5.50 5.75 8.25 8.25 9.00 7.50 7.75 7.75 7.75
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7 days 8 to 14 days 15 to 29 days 30 to 59 days 60 to 89 days 90 to 179 days 180 to 269 days 270 to 12 months 366 to 399 days 400 days 401 to less than 18 months 18 months to 730 days 731 days 732 to less than 36 months

3.00 3.00 3.50 4.25 5.25 5.25 5.50 8.00 8.00 8.75 7.25 7.50 7.50 7.50

 Certificate of Deposit

Earn interest for funds invested from 15 days to one year, with HSBCs Certificate of Deposit (CDs). CDs can be availed by individuals (other than minors), corporations, banks, companies, trusts, funds, associations etc. Non-Resident Indians (NRIs) may also subscribe to CDs on a non-repairable basis only.

2 ) Mutual Fund It is a type of investment where a number of investors money is pooled together & used by the fund manager(referred to as the Asset Management Company or AMC) to invest in underline securities inline with the objectives of the scheme. By this method you can achieve a much wider spread of investments than if you were investing directly in the underlying investments. It is generally accepted that by spreading your investment you are spreading your risk, therefore investing in mutual funds is considered to be lower risk than direct investment. When you invest in mutual funds you do not own the underlying investments but have a claim to a number of units in the fund representing the size of your investment. The value of each unit of the mutual fund scheme, calculated based on the market value of the underlying investments after deducting expenses and liabilities, is referred to as the Net Asset Value or NAV. The first time a mutual fund scheme is available for purchase is referred to as a New Fund Offering or NFO.

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1-

A mutual fund actually belongs to the investors who have pooled their funds is in the hands of the investors.

2-

Investment professionals and other service providers, who earn a free for their services, from the fund, manage a mutual fund.

3-

The pool of funds invested in a portfolio of marketable investments. The value of the portfolio is updated every day. The investors share in the fund is denominated by units. The value of the units changes in the portfolios value, every day. The value of one unit of investment is called as the net asset value of NAV.

4-

5-

The investment portfolio of the mutual fund is created according to the stated investment objectives of the fund.

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3. SYSTEMATIC INVESTMENT PLAN (SIP)

What is SIP?

An SIP is a regular investment plan for purchasing units of a mutual fund scheme. Offered by mutual funds to help you save regularly.When investing in mutual funds, you would normally identify a scheme & invest a predetermined amount in it at its prevailing net asset value (NAV). If you invest a sum of Rs.10,000 at an NAV of Rs.10, you will receive 1,000 units. The timings of your investment in such a case may turn out to be favourable or unfavourable.

Under SIP, however, your investment is staggered over a period. Instead of investing Rs.10,000 at one go, you might consider investing specified amounts in a scheme at prspecified intervals. For instance, you could spread out the Rs.10,000 investment over 10 months, with Rs.1,000 being invested each month. The number of units that accrue to you on each periodic investment would depend on the NAV of the scheme prevailing at the time of your purchase. By doing this, you would have done away with the need to time the market. SIPs also in calculate some much needed discipline into your investing habits. . It is just like a recurring deposit with the post office or bank where you put in every month. The difference here is that the amount is invested in a mutual fund. The minimum amount to be invested can be as small as Rs.500 & the frequent investment is usually monthly or quarterly. How an SIP works? An SIP allows you to take part in the stock market without trying to second guess movements. An SIP means you to commit yourself to investing a fixed amount every month. Let Rs.1000 When the NAV is high, you will get fewer units. When it drops, you will get more Date NAV Approx number of units you will get at Rs.1000

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Jan 1 Feb 1 Mar 1 Apr 1 May 1 Jun 1

10 10.5 11 9.5 9 11.5

100 95.23 90.90 105.26 111.11 86.95

Within six months, you would have 5,894 units by investing just Rs.1000 every month. 4. INSURANCE Insurance, in law and economies, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium. Insurer, in economics, is the company that sells the insurance. Insurance rate is a factor used to determine the amount, called the Premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. 5) ULIPS A unit linked insurance policy is one in which the customer is provided with a life insurance cover and the premium paid is invested in either debt or equity products or a combination of the two. In other words, it enables the buyer to secure some protection for his family in the event of his untimely death and at the same time provides him an opportunity to earn a return on his premium paid. In the event of the insured person's untimely death, his nominees would normally receive an amount that is the higher of the sum assured (insurance cover) or the value of the units (investments).However, there are some schemes in which the policyholder receives the sum assured plus the value of the investments.

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Every insurance company has four to five ULIPs with varying investment options, charges and conditions for withdrawals and surrender. Moreover, schemes have been tailored to suit different customer profiles and, in that sense, offer a great deal of choice. The advantage of ULIP is that since the investments are made for long periods, the chances of earning a decent return are high. Just as in the case of mutual funds, buyers who are risk averse can buy into debt schemes while those who have an appetite for risk can opt for balanced or equity schemes. However, the charges paid in these schemes in terms of the entry load, administrative fees, underwriting fees, buying and selling charges and asset management charges are fairly high and vary from insurer to insurer in the quantum as also in the manner in which they are charged.

Tax benefits
The premiums paid for ULIPs are eligible for tax rebates under section 80 which allows a a maximum of Rs. 1,00,000 premiums paid for taxable income below Rs 8,50,000 and

Proceeds from ULIPs are tax-free under section 10(10D) unlike those from a mutual fund which attract short term capital gains tax.

Key features
Premiums paid can be single, regular or variable. The payment period too can be regular or variable. The risk cover (insurance cover) can be increased or decreased.As in all insurance policies, the risk charge (mortality rate) varies with age. However, for an individual the risk charge is always based on the age of the policyholder in the year of commencement of the policy. These charges are normally deducted on a monthly basis from the unit value. For instance, if there is an increase in the value of units due to market conditions, the sum at risk (sum assured less the value of investments) reduces and so the risk charges are lower. The maturity benefit is not typically a fixed amount and the maturity period can be advanced (early withdrawal) or extended. Investments can be made in gilt funds (government securities), balanced funds (part debt, part equity), money-market funds; growth funds (equities) or bonds (corporate bonds).

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The policyholder can switch between schemes (for instance, balanced to debt or gilt to equity). The investment risk is transferred to the policyholder.The maturity benefit is the net asset value of the units. The value would be high or low depending on the market conditions during the period of the policy and the performance of the fund manager. Thus there is no capital protection on maturity unless the scheme specially provides for it. There could be policies that allow the policyholder to remain invested beyond the maturity period in the event of the maturity value not being satisfactory.

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Chapter 5 Data Analysis & Interpretation

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TABLE 4.1

Gender: Cumulative Frequency Percent Valid Male Female Total 30 20 50 60.0 40.0 100.0 Valid Percent Percent 60.0 40.0 100.0 60.0 100.0

INTERPRETATION:This bar graph shows that out of 50 respondents, 60% of the respondents are male and rest 40% of the respondents are female who are invest their money into the market.

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TABLE 4.2
Age: Cumulative Frequency Valid 20-30 30-50 above 50 Total 13 26 11 50 Percent 26.0 52.0 22.0 100.0 Valid Percent 26.0 52.0 22.0 100.0 Percent 26.0 78.0 100.0

INTERPRETATION:This bar chart shows that majority of the sample respondents were in the age group of 30-50 year i.e 52%, 26%of the respondents were in the age group of 20-30 year and 22% of them were 20-30 year.
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TABLE 4.3
Profession Cumulative Frequency Valid Entrepreneur Private Job Government Job Student Industrialist Total 2 20 16 10 2 50 Percent 4.0 40.0 32.0 20.0 4.0 100.0 Valid Percent 4.0 40.0 32.0 20.0 4.0 100.0 Percent 4.0 44.0 76.0 96.0 100.0

INTERPRETATION:This bar chart shows that majority of the respondents were doing private job i.e. 40%. 30% of the respondents were doing 32% and 20% of the respondents were students.
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TABLE 4.4
Income Level: Cumulative Frequency Valid 60,000 1, 00,000 1, 00,000 2, 00,000 2, 00,000 3, 00,000 above 3,00,000 Total 4 14 18 14 50 Percent 8.0 28.0 36.0 28.0 100.0 Valid Percent 8.0 28.0 36.0 28.0 100.0 Percent 8.0 36.0 72.0 100.0

INTERPRETATION:This bar chart shows that 36% of the respondents get salary 2-3 lakh,28% of the respondents are get a salary 1-2 lakh, again 28% of the respondents get a salary above 3 lakh and 8% of them get less than 1 lakh.
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TABLE 4.5
Have you ever invested in the market? Cumulative Frequency Valid Yes No Total 28 22 50 Percent 56.0 44.0 100.0 Valid Percent 56.0 44.0 100.0 Percent 56.0 100.0

INTERPRETATION:This graph shows that 56% of the respondents are invested in the market and rest of 44% are never invest their money into the market.

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TABLE 4.6
Are you aware of various HSBCs investment schemes? Cumulative Frequency Valid Nil average Fully Total 16 26 8 50 Percent 32.0 52.0 16.0 100.0 Valid Percent 32.0 52.0 16.0 100.0 Percent 32.0 84.0 100.0

INTERPRETATION:This bar graph chart shows that, out of the 50 respondents 52% investors are average aware about the investment schemes, 32% respondent are not aware and rest 16% are fully aware of the various investment schemes of hsbc.

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TABLE4. 7
Have you ever invested in HSBC? Cumulative Frequency Valid Yes No Total 32 18 50 Percent 64.0 36.0 100.0 Valid Percent 64.0 36.0 100.0 Percent 64.0 100.0

INTERPRETATION:This graph shows that 64% of the respondents are ever invested in the hsbc and 36% are those respondents who never invested in the hsbc.

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TABLE 4.8

How long you are investing in market? Cumulative Frequency Valid 1-5 years 5-10 years Above 10 years Total 23 19 8 50 Percent 46.0 38.0 16.0 100.0 Valid Percent 46.0 38.0 16.0 100.0 Percent 46.0 84.0 100.0

INTERPRETATION:From the sample of 50 respondents, 46% of the respondent invest in the market from the period of 1-5 year, 36% respondents are invest from 5-10 year and remaining 16% respondents are invest in the market from above 10 year.
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TABLE 4.9
You made invested through: Cumulative Frequency Valid Your own Through Distribution house Through broker Others Total 14 16 15 5 50 Percent 28.0 32.0 30.0 10.0 100.0 Valid Percent 28.0 32.0 30.0 10.0 100.0 Percent 28.0 60.0 90.0 100.0

INTERPRETATION:This bar chart shows that 32% of the respondent are invested through the distribution house, 30% are invested through the broker, 28% are invested own and remaining 10% are invested through others.
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TABLE 4.10
What would you take into account while investing? Cumulative Frequency Valid Safety principle Earning high returns Earning inflation rate Total return above 16 29 5 50 Percent 32.0 58.0 10.0 100.0 Valid Percent 32.0 58.0 10.0 100.0 Percent 32.0 90.0 100.0

INTERPRETATION:From the sample of 50 respondents, 32 % of the respondent invest their money for safety, 58% of the respondents are invest their money to get a high return and 10% respondents are Invest due to earning return above inflation rate.

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TABLE 4.11

Kaiser-Meyer-Olkin Adequacy. Bartlett's Sphericity Test

Measure

of

Sampling .608 131.103 28

of Approx. Chi-Square Df

Sig. INTERPRETATION:-

.000

The KMO measures the sampling adequacy which should be greater than 0.5 for a satisfactory factor analysis to proceed. We have applied KMO and Bartletts test to check the adequacy of data and defined KMO measure is.608 which is more than standard value of KMO 0.5 hence data is adequate for my research.

TABLE 4.12

Communalities Initial Investments are made in financial products because of capital growth Investments are made in financial products because of investment for excess money Investments are made in financial products because of global brand name Investments are made in financial products because of high returns Investments are made in financial products because of tax benefits 1.000 .768 1.000 .802 1.000 .732 1.000 .714 1.000 .558 Extraction

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Investments are made in financial products because of awareness Investments are made in financial products because of growth rate Investments are made in financial products because of safety Extraction Method: Principal Component Analysis. 1.000 .681 1.000 .602 1.000 .544

INTERPRETATION:As we have looked the communalities table which is showing 8 factors from which all factors are very strong because all factors lies between0.5 to 1.but there is no any factors which is less than 0.5 all factors are playing very important role in my research.

TABLE4.13
Total Variance Explained Extraction Com pon ent 1 2 3 4 5 6 7 8 . Total 2.024 1.336 1.029 1.013 .954 .756 .636 .253 Initial Eigenvalues % Variance 25.294 16.699 12.865 12.665 11.923 9.444 7.947 3.162 of Cumulati ve % 25.294 41.994 54.858 67.523 79.446 88.890 96.838 100.000 Total 2.024 1.336 1.029 1.013 Loadings % Variance 25.294 16.699 12.865 12.665 of Cumulative % 25.294 41.994 54.858 67.523 Total 1.683 1.599 1.066 1.053 Sums of Squared Rotation Loadings % of Cumulative Sums of Squared

Variance % 21.041 19.992 13.324 13.166 21.041 41.033 54.357 67.523

INTERPRETATION:-

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In during my research I have taken 50 respondents or sample size and analyzed the data according to sample size analyzed the data. The 67.52% data is accurate in my research from 100%, but 33% data is lost. It is good sign because it is above from standardizing value which is 55%. TABLE 14

INTERPRETATION:This is Scree plot. It plots the eigenvalues on a bicoordinate plane. It derives its name from the scree that is deposited at the base of a landside. The scree plot is sometimes used to select how many factors to rotate to a final solution. The traditional construct for interpretation is that the scree should be ignored and that only factor on the steep portion of the graph should be selected and rotated. The SPSS default is to select and rotate any factor with an Eigen value greater then 1.0.sience the on this case four factor are selected for rotation based on the scree.

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TABLE 4.15.

Rotated Component Matrix

Component 1 Investments are made in financial products because of capital growth Investments are made in financial products because of investment for excess money Investments are made in financial products because of global brand name Investments are made in financial products because of high returns Investments are made in financial products because of tax benefits Investments are made in financial products because of awareness Investments are made in financial products because of growth rate Investments are made in financial products because of safety -.082 2 .735 3 -.096 4 .038

-.052

.324

.050

.777

.201

-.135

.797

.196

.804

-.385

.073

.034

.871

.013

.084

-.052

.439

.409

-.124

-.411

-.108

.743

.120

.156

.155

-.262

-.614

.460

INTERPRETATION:In case of rotate component matrix have chose the 4 component, In First component there are three variable which value is greater than 0.50 these variable is suitable for my research. These are: 1. Investments are made in financial products because of high returns. 2. Investments are made in financial products because of tax benefits. 3. Investments are made in financial products because of safety. In Second component there are two variable which value is greater than 0.50 these variable is suitable for my research. These are: 1. Investments are made in financial products because of capital growth.
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2. Investments are made in financial products because of growth rate. In Third component there are two variable which value is greater than 0.50 these variable is suitable for my research. These are: 1. Investments are made in financial products because of high returns. 2. Investments are made in financial products because of tax benefits.

Name of variables:-

The first component (ads were high returns, tax benefits ansd safety) and I have give a name for these variables is the money pay services. Second component ( capital growth and growth rate) is denoted security for future.

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Chapter 6 Limitations, Suggestions & Conclusion

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LIMITATIONS

UNCERTAINITY OF MARKET:HSBCs securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the Scheme will be achieved. As with any investment in securities, the NAV of the units issued under the Scheme can go up or down depending on the factors and forces affecting the capital markets.

LACK OF PUBLIC AWARENESS:In chandigarh, HSBC has just completed 3 years & is in infantry stage so people are unaware of it. So people are afraid to invest & they only trust of some govt. funds like UTI, SBI, Govt. securities. Which give assured returns?

HIGH COMPETITION:Due to the existence of large number of AMCs & banks the competition is high. Investors are confused that where they have to invest and where not. Other banks also offers the same type of product/schemes which diversified the investors.

RIGID AND TRADITIONAL STRUCTURE:The people believe investing in Bank FDs and Post Office saving and are reluctant to invest in Mutual Fund. People like to secure money in terms of lending to the people on high interest they meant their amount is safe, or further to invest in their own business which will give them high return obviously.

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RECOMMENDATIONS

1. The investors above the age of 50 years must be taken into consideration as they are having great potential regarding investment.

2. HSBC must lay down some sound strategies to trap more customers by giving them more commission in comparison to other investment centers.

3. HSBC must use marketing tools like point of purchase, advertisement through Mass Media like loading Newspapers, Magazines, Television, Exhibition, Fairs, SMS on Mobiles, advertisement on the internet.

4. The organization is lacking on the parameters of motivation. It is recommended that the organization must adopt the concept of motivation.

5. HSBC should organize programs for customer awareness in developing areas and establish a confidence and belief among the customers residing there.

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CONCLUSION
From the study I got to know that the investment pattern of an individual is largely influenced by its risk taking ability.

It is also determined that income of an individual does not have a significant impact on a persons investment decision, as the outcome of the study pointed to the fact that college going student, who do not have any income source except from their parents and investment income, tend to invest in the same kind off investment instruments as a high earning individual. But the liability to be written of each year has much impact on an individuals investment decision. Investment objectives also have some impact on investment pattern of individual.

From the above analysis we are now aware of the investment pattern of investors which is highly influenced by his age. This research will help in developing financial products according to the choice and need of investors. This Questionnaire Research gives the investment behavior information of the investors of chandigarh which can help to gain competitive edge over its competitors.

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Chapter - 7 References and Bibliography

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REFERENCES
1. Bruce A. Huhmann, Nalinaksha Bhattacharyya, (2005) "Does mutual fund advertising provide necessary investment information?", International Journal of Bank Marketing, Vol. (23) Iss: 4, pp.296 316
2. David E. Allen, Jerry T. Parwada, (2006) "Investors' response to mutual fund

company mergers", International Journal of Managerial Finance, Vol. (2) Iss: 2, pp.121 - 135
3. Kerstin Drachter, Alexander Kempf, Michael Wagner, (2007) "Decision processes in

German mutual fund companies: evidence from a telephone survey", International Journal of Managerial Finance, Vol. (3) Iss: 1, pp.49 69
4. Timo Korkeamaki, Vesa Puttonen, Tom Smythe, (2007) "Advertising and mutual

fund asset flows", International Journal of Bank Marketing, Vol. (25) Iss: 7, pp.434 451

5. Cheng-Ru Wu, Hsin-Yuan Chang, Li-Syuan Wu, (2008) "A framework of assessable mutual fund performance", Journal of Modelling in Management, Vol. (3) Iss: 2, pp.125 139

6. Rob Jans, Rogr Otten, (2008) "Tournaments in the UK mutual fund industry", Managerial Finance, Vol. (34) Iss: 11, pp.786 798 7. Laurens Swinkels, Pawel Rzezniczak, (2009) "Performance evaluation of Polish mutual fund managers", International Journal of Emerging Markets, Vol. (4) Iss: 1, pp.26 42 8. Yurij Lukashin, Ivan Lukashin, (2009) "The development of mutual fund market in Russia", Management Research News, Vol. 32 Iss: 2, pp.132 144 9. Tajudeen Olalekan Yusuf, (2010) "Brokers and the control of postcontractual opportunism in the Nigerian insurance market", Journal of Financial Crime, Vol. 17 Iss: 2, pp.223 239

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10. Dag Einar Sommervoll, Gavin Wood, (2011) "Home equity insurance", Journal of Financial Economic Policy, Vol. 3 Iss: 1, pp.66 85

Bibliography
WED LINK
http://www.hsbc.com/1/2/investor-relations http://www.hsbc.com/1/2/corporate-and-institutional www.hsbc.co.in/1/2/personal/financial-planning/product-

www.sjgrand.cn/hsbc-launches-rmb-products
www.hsbc.com/1/2/personal-banking http://capitalmind.in/2006/10/ulip-nav-comparison-table/ http://en.wikipedia.org/wiki/The_Hongkong_and_Shanghai_Banking_Corporation http://www.hsbc.com/1/PA_1_1_S5/content/assets/about_hsbc/100601_brief_history.pdf

BOOKS

QFINANCE: The Ultimate Financial Resource (2nd edition) An Introduction to Trading in the Financial Markets by WILLIAMS Journal of International Financial Management & Accounting Published in association with New York University's Stern School of Business, Salomon Center

Financial Management by Kotl

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Chapter 8
QUESTIONNAIRE

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QUESTIONNAIRE

1) Gender: 2) Age: a) 20-30

a) Male

b) Female

b) 30-50

c) above 50

3) Profession a) Entrepreneur d) Student b) Private Job e) industrialist c) Government Job

4) Income Level: a) 60,000 1, 00,000 c) 2, 00,000 3, 00,000 b) 1, 00,000 2, 00,000 d) above 3, 00,000

5) Have you ever invested in the market? a) Yes If Yes, What is your Portfolio? a) Mutual Fund b) Insurance c) Shares 6) Are you aware of various HSBCs investment schemes? a) Nil b) Average c) Fully b) No

7) Have you ever invested in HSBC? a) Yes b) No

If yes, youre Diversification (Mention your preferences)

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a) Equity: b) Debt: c) Cash:

8) How long you are investing in market? a) 1-5 years b) 5-10 years c) Above 10 years

9) You made invested through: a) Your own c) Through broker b) Through Distribution house d) others

10) Rate the following factor on a scale of 1-5 (1strongly agree, 2agree, 3 neutral, 4disagree, 5 strongly disagree). Factors Investments are made in financial products because of capital growth Investments are made in financial products because of investment for excess money Investments are made in financial products because of global brand name Investments are made in financial products because of high returns Investments are made in financial products because of tax benefit Investments are made in financial products because of awareness Investments are made in financial products because of variety of products Investments are made in financial products because of safety 1 2 3 4 5

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11) What would you take into account while investing? a) Safety high returns c) Earning return above inflation rate b) Earning high returns

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