HDFC AMC, India’s largest asset management company, manages assets worth Rs.3.6 lakh crore. The company was started in 1999 as a joint venture between Housing Development Finance Corporation Limited and Standard Life Investment Limited.

HDFC AMC has over 93 lakh accounts, including those of small investors and investment firms. HDFC AMC has the largest market share among the actively managed equity funds. The company claims that one in four mutual fund investors in India invests in HDFC AMC.

The company also provides services to high net worth investors, corporates, trusts, provident funds and portfolio management for domestic and foreign institutions. The company currently has 75,000 empaneled distributors and 211 branches in more than 200 cities.

New growth areas in business are referred to as the `Sunrise Sector ‘. Asset management is one such area. Mutual funds are the biggest beneficiaries of the growing investment in the stock market. Asset management companies are achieving excellent asset growth.

At present, only 3% of the population in India invests in mutual funds. The past few years have seen an increase in the number of investors flocking to mutual funds. It is hoped that more investors will enter the sector realising the potential of mutual funds. This opens up great opportunities for asset management companies. As the number one company in the sector, HDFC AMC can take advantage of these opportunities more effectively.

During the April-June quarter of the current financial year, HDFC AMC performed well. The company had posted a net profit of Rs 302 crore for the quarter. Profit growth was 3% over the same period last year. During the same period last fiscal the profit was Rs.292 crore

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Those who invest in Mutual Funds through a Systematic Investment Plan (SIP) should be aware of some basic facts. As the stock market moves higher, retail investors are more likely to invest. But no matter whether it is the stock market, or whatever asset may be, good performance should not be the only reason to invest. Instead, invest in a long-term goal. Investors should always be prepared for the possibility of ups and downs as volatility is a fundamental characteristic of asset sectors such as the stock market.

Those who make SIP investments in the long run should not stop investing from time to time. Even experts may not be able to pinpoint the exact way in which investments are withdrawn and reinvested based on assumptions about where the market is headed.

SIP investors should take care to adjust the investment period with certain objectives in mind. SIP regulates and mitigates the risk of market fluctuations. This risk increases as the SIP investment period draws to a close. Therefore, two methods can be adopted to reduce this risk.

One way is to shorten the duration of the SIP rather than the time to reach the goal. If you want to achieve your goal after 10 years, the SIP investment period should be eight or nine years. If the investment value has reached the amount you intend within this period, it can be withdrawn in whole or in part. If the stock market shows signs of turning negative in the last few years, the investment can be completely withdrawn.

Another method is to withdraw the investment gradually, just like investing under SIP. During the last years of the investment period, a fixed amount can be transferred every month from the equity fund to the debt fund as per the systematic withdrawal plan. The investment can be completely withdrawn from the debt fund when required.

Market fluctuations should not be underestimated. Fluctuation is a fundamental characteristic of the market. Long-term investors do not have to constantly monitor it. We use SIP as a safe way to overcome the volatility and make long-term gains. Investment decision making based on market fluctuations can adversely affect investment objectives.

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