INTRODUCTION

WHY COMAPARATIVE ANALYSIS OF MUTUAL FUNDS?

All over the world, mutual fund is one of the most popular instruments for investment. Its
popularity with consumer has dramatically increased over the last couple of years worldwide;
the mutual fund has a long and successful history. The popularity of mutual fund has
increased manifold. In developed financial market like United States, mutual has almost
overtaken bank deposits and total assets of insurance funds.

The mutual fund industry in India is regulated by Association of Mutual Funds in India
(AMFI). The mutual fund industry in India is of 493,287 crores approx. SBI Mutual Fund is
India’s largest bank sponsored mutual fund and has an enviable track record in judicious
investments and consistent wealth creation.
The fund traces its lineage to SBI - India’s largest banking enterprise. The institution has
grown immensely since its inception and today it is India's largest bank, patronized by over
80% of the top corporate houses of the country.
SBI Mutual Fund is a joint venture between the State Bank of India and Société
Générale Asset Management, one of the world’s leading fund management companies
that manages over US$ 500 Billion worldwide.
In twenty years of operation, the fund has launched 38 schemes and successfully redeemed
fifteen of them. In the process it has rewarded its investors handsomely with consistently high
returns.
A total of over 4.6 million investors have reposed their faith in the wealth generation
expertise of the Mutual Fund.
Schemes of the Mutual fund have consistently outperformed benchmark indices and have
emerged as the preferred investment for millions of investors and HNI’s.
Today, the fund manages over Rs. 28500 crores of assets and has a diverse profile of
investors actively parking their investments across 36 active schemes.
The fund serves this vast family of investors by reaching out to them through network of over
130 points of acceptance, 28 investor service centers, 46 investor service desks and 56 district
organizers.
SBI Mutual is the first bank-sponsored fund to launch an offshore fund – Resurgent India
Opportunities Fund.
Growth through innovation and stable investment policies is the SBI MF credo
State Bank of India was born on 1st July,1955 based on the recommendations of All India
Rural Credit Survey Committee(1954) headed by Shri A.D Gorwala, through an Act of
Parliament. The main objective of SBI is “Extension of Banking facilities on a large scale,
more particularly in rural and semi-urban areas, and for diverse other public purposes and to
transfer to it the undertaking of the Imperial Bank of India and provide for other matters
connected thereto or incidental thereto.”SBI is the oldest, the largest and the highest profit
making bank in India. Its evolution is not only intimately interwoven with the economic
development of modern India but also with our nation building process to an extent perhaps
unparalleled in the world. Moving like colossuses on the Indian financial turf, it has become a
symbol of national pride and economic development.

SBI with its extensive network of over 9000 branches has vast clientele and extends service
not only on commercial basis but also on the basis of social considerations. The Bank is also
on its way to introduce and absorb technology extensively at a rapid speed not only to remain
customer-friendly and efficient for existing business but also to manage new business and
services in an increasingly dynamic and global environment.
The project entitled “Comparison of Mutual Fund with special reference to SBI Mutual
Fund” gives me an opportunity to enhance my knowledge of mutual funds industry and gives
me an insight of business processes of different types of client.

INTRODUCTION TO MUTUAL FUNDS

Mutual fund is a buzz in the market these days. The mutual fund industry is burgeoning, it is
completely untapped market. Only 5% of total potential of this industry has been grabbed.
Hence this industry has a lot of opportunities in it. That’s why it is so much interactive.

As Indian economy is growing at the rate of 8% per annum, we can see its effect in all areas.
The Indian stock market and companies have become lucrative for foreign investors. More
and more fund is pouring in our country. This is increasing liquidity in the market and hence
increasing the money in the hands of people and thus investment. As the future prospects for
Indian companies are bright, they have lots of opportunities to expand their business
worldwide, the investment in Indian companies.

A Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. The money thus collected is invested by the fund manager in different types of
securities depending upon the objective of the scheme. These could range from shares to
debentures to money market instruments. The income earned through these investments and
the capital appreciations realized by the scheme are shared by its unit holders in proportion to
the number of units owned by them (pro rata). Thus a Mutual Fund is the most suitable
investment for the common man as it offers an opportunity to invest in a diversified,
professionally managed portfolio at a relatively low cost. Anybody with an investible surplus
of as little as a few thousand rupees can invest in Mutual Funds. Each Mutual Fund scheme
has a defined investment objective and strategy.

A mutual fund is the ideal investment vehicle for today’s complex and modern financial
scenario. Markets for equity shares, bonds and other fixed income instruments, real estate,
derivatives and other assets have become mature and information driven. Price changes in
these assets are driven by global events occurring in faraway places. A typical individual is
unlikely to have the knowledge, skills, inclination and time to keep track of events,
understand their implications and act speedily. An individual also finds it difficult to keep
track of ownership of his assets, investments, brokerage dues and bank transactions etc.

A mutual fund is the answer to all these situations. It appoints professionally qualified and
experienced staff that manages each of these functions on a full time basis. The large pool of
money collected in the fund allows it to hire such staff at a very low cost to each investor. In
effect, the mutual fund vehicle exploits economies of scale in all three areas - research,
investments and transaction processing. While the concept of individuals coming together to
invest money collectively is not new, the mutual fund in its present form is a 20 th century
phenomenon. In fact, mutual funds gained popularity only after the Second World War.
Globally, there are thousands of firms offering tens of thousands of mutual funds with
different investment objectives. Today, mutual funds collectively manage almost as much as
or more money as compared to banks.

A draft offer document is to be prepared at the time of launching the fund. Typically, it pre
specifies the investment objectives of the fund, the risk associated, the costs involved in the
process and the broad rules for entry into and exit from the fund and other areas of operation.
In India, as in most countries, these sponsors need approval from a regulator, SEBI
(Securities exchange Board of India) in our case. SEBI looks at track records of the sponsor
and its financial strength in granting approval to the fund for commencing operations.
A sponsor then hires an asset management company to invest the funds according to the
investment objective. It also hires another entity to be the custodian of the assets of the fund
and perhaps a third one to handle registry work for the unit holders (subscribers) of the fund.

In the Indian context, the sponsors promote the Asset Management Company also, in which it
holds a majority stake. In many cases a sponsor can hold a 100% stake in the Asset
Management Company (AMC). E.g. Birla Global Finance is the sponsor of the Birla Sun Life
Asset Management Company Ltd., which has floated different mutual funds schemes and
also acts as an asset manager for the funds collected under the schemes.

Future Scenario

The asset base will continue to grow at an annual rate of about 30 to 35 % over the next few
years as investor’s shift their assets from banks and other traditional avenues. Some of the
older public and private sector players will either close shop or be taken over.

Out of ten public sector players five will sell out, close down or merge with stronger players
in three to four years. In the private sector this trend has already started with two mergers and
one takeover. Here too some of them will down their shutters in the near future to come.

But this does not mean there is no room for other players. The market will witness a flurry of
new players entering the arena. There will be a large number of offers from various asset
management companies in the time to come. Some big names like Fidelity, Principal, and
Old Mutual etc. are looking at Indian market seriously. One important reason for it is that
most major players already have presence here and hence these big names would hardly like
to get left behind.

The mutual fund industry is awaiting the introduction of derivatives in India as this would
enable it to hedge its risk and this in turn would be reflected in it’s Net Asset Value (NAV).

SEBI is working out the norms for enabling the existing mutual fund schemes to trade in
derivatives. Importantly, many market players have called on the Regulator to initiate the
process immediately, so that the mutual funds can implement the changes that are required to
trade in Derivatives.

Market Trends

A lone UTI with just one scheme in 1964 now competes with as many as 400 odd products
and 34 players in the market. In spite of the stiff competition and losing market share, UTI
still remains a formidable force to reckon with.

Last six years have been the most turbulent as well as exiting ones for the industry. New
players have come in, while others have decided to close shop by either selling off or
merging with others. Product innovation is now passé with the game shifting to performance
delivery in fund management as well as service. Those directly associated with the fund
management industry like distributors, registrars and transfer agents, and even the regulators
have become more mature and responsible.

The industry is also having a profound impact on financial markets. While UTI has always
been a dominant player on the bourses as well as the debt markets, the new generations of
private funds which have gained substantial mass are now seen flexing their muscles. Fund
managers, by their selection criteria for stocks have forced corporate governance on the
industry. By rewarding honest and transparent management with higher valuations, a system
of risk-reward has been created where the corporate sector is more transparent then before.
Funds have shifted their focus to the recession free sectors like pharmaceuticals, FMCG and
technology sector. Funds performances are improving. Funds collection, which averaged at
less than Rs100bn per annum over five-year period spanning 1993-98 doubled to Rs210bn in
1998-99. In the current year mobilization till now have exceeded Rs300bn. Total collection
for the current financial year ending March 2000 is expected to reach Rs450bn.

What is particularly noteworthy is that bulk of the mobilization has been by the private sector
mutual funds rather than public sector mutual fundsMutual funds are now also competing
with commercial banks in the race for retail investor’s savings and corporate float money.
The power shift towards mutual funds has become obvious. The coming few years will show
that the traditional saving avenues are losing out in the current scenario. Many investors are
realizing that investments in savings accounts are as good as locking up their deposits in a
closet. The fund mobilization trend by mutual funds in the current year indicates that money
is going to mutual funds in a big way.

India is at the first stage of a revolution that has already peaked in the U.S. The U.S. boasts of
an Asset base that is much higher than its bank deposits. In India, mutual fund assets are not
even 10% of the bank deposits, but this trend is beginning to change. Recent figures indicate
that in the first quarter of the current fiscal year mutual fund assets went up by 115% whereas
bank deposits rose by only 17%. (Source: Think-tank, the Financial Express September, 99)  
This is forcing a large number of banks to adopt the concept of narrow banking wherein the
deposits are kept in Gilts and some other assets which improves liquidity and reduces risk.
The basic fact lies that banks cannot be ignored and they will not close down completely.
Their role as intermediaries cannot be ignored. It is just that Mutual Funds are going to
change the way banks do business in the future.

WHAT IS A MUTUAL FUND?

A Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. It offers an opportunity to invest in a diversified, professionally managed
basket of securities at a relatively low cost. The flow chart below describes broadly the
working of a mutual fund:

Pool their money with

Investors Fund managers

Invest in

Passed back to

Returns Securities

“Mutual Funds are popular among all income levels. With a mutual fund, we get a
diversified basket of stocks managed by professionals”

These Trusts are run by experienced Investment Managers who use their knowledge and
expertise to select individual securities, which are classified to form portfolios that meet
predetermined objectives and criteria.
These portfolios are then sold to the public. They offer the investors the following main
services:
 Portfolio Diversification
 Marketability: A new financial asset is created that may be more easily marketable
than the underlying securities in the portfolio.

Organization of a Mutual Fund

A mutual fund is set up in the form of a trust, which has sponsor, trustees,
asset management company (AMC) and custodian. The trust is established by a sponsor or
more than one sponsor who is like promoter of a company. The trustees of the mutual fund
hold its property for the benefit of the unit holders. Asset Management Company (AMC)
approved by SEBI manages the funds by making investments in various types of securities.
Custodian, who is registered with SEBI, holds the securities of various schemes of the fund in
its custody. The trustees are vested with the general power of superintendence and direction
over AMC. They monitor the performance and compliance of SEBI Regulations by the
mutual fund.

TYPES OF MUTUAL FUND SCHEMES

Mutual fund schemes may be classified on the basis of its structure and its investment
objective.

By Structure:

Open-ended Funds:

An open-end fund is one that is available for subscription all through the year. These do not
have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value
("NAV") related prices. The key feature of open-end schemes is liquidity.

Closed ended Funds:

A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15
years. The fund is open for subscription only during a specified period. Investors can invest
in the scheme at the time of the initial public issue and thereafter they can buy or sell the
units of the scheme on the stock exchanges where they are listed. In order to provide an exit
route to the investors, some close-ended funds give an option of selling back the units to the
Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate
that at least one of the two exit routes is provided to the investor. .
Interval Funds:

Interval funds combine the features of open-ended and close-ended schemes. They are open
for sale or redemption during pre-determined intervals at NAV related prices

By Investment Objective
Growth Funds:

The aim of growth funds is to provide capital appreciation over the medium to long term.
Such schemes normally invest a majority of their corpus in equities. It has been proved that
returns from stocks, have outperformed most other kind of investments held over the long
term. Growth schemes are ideal for investors having a long term outlook seeking growth over
a period of time.

Income Funds:

The aim of income funds is to provide regular and steady income to investors. Such schemes
generally invest in fixed income securities such as bonds, corporate debentures and
Government securities. Income Funds are ideal for capital stability and regular income.

Balanced Fund:
The aim of balanced funds is to provide both growth and regular income. Such schemes
periodically distribute a part of their earning and invest both in equities and fixed income
securities in the proportion indicated in their offer documents. In a rising stock market, the
NAV of these schemes may not normally keep pace, or fall equally when the market falls.
These are ideal for investors looking for a combination of income and moderate growth.

MoneyMarketFunds:

The aim of money market funds is to provide easy liquidity, preservation of capital and
moderate income. These schemes generally invest in safer short-term instruments such as
treasury bills, certificates of deposit, commercial paper and inter-bank call money. Returns on
these schemes may fluctuate depending upon the interest rates prevailing in the market. These
are ideal for Corporate and individual investors as a means to park
their surplus funds for short periods.

Other Schemes

Tax Saving Schemes:

These schemes offer tax rebates to the investors under specific provisions of the Indian
Income Tax laws as the Government offers tax incentives for investment in specified
avenues. Investments made in Equity Linked Savings Schemes (ELSS) and Pension Schemes
are allowed as deduction u/s 88 of the Income Tax Act, 1961. The Act also provides
opportunities to investors to save capital gains u/s 54EA and 54EB by investing in Mutual
Funds.

Special Schemes

 Industry Specific Schemes

Industry Specific Schemes invest only in the industries specified in the offer document. The
investment of these funds is limited to specific industries like InfoTech, FMCG, and
Pharmaceuticals etc.

 Index Schemes

Index Funds attempt to replicate the performance of a particular index such as the BSE
Sensex or the NSE 50
  Sectoral Schemes

Sectoral Funds are those which invest exclusively in a specified sector. This could be an
industry or a group of industries or various segments such as 'A' Group shares or initial public
offerings              

BENEFITS OF MUTUAL FUNDS

Professional Management

Mutual Funds provide the services of experienced and skilled professionals, backed by a
dedicated investment research team that analyses the performance and prospects of
companies and selects suitable investments to achieve the objectives of the scheme.

Diversification

Mutual Funds invest in a number of companies across a broad cross – section of industries
and sectors. This diversification reduces the risk because seldom do all stocks decline at the
same time and in the same proportion. You achieve this diversification through a Mutual
Fund with far less money than you can do on your own.

Affordability

A mutual fund invests in a portfolio of assets, i.e. bonds, shares etc. depending upon the
investment objective of the scheme. An investor can buy into a portfolio of equities, which
would otherwise be extremely expensive.
Tax Benefits

Any income distributed after March 31, 2002 will be subject to tax in the assessment of all
unit-holders. However, as a measure of concession to Unit holders of open – ended and
equity – oriented funds, income distributions for the year ending March 31, 2003, will be
taxed at a concessional rate of 10%.

Return Potential

Over a medium to long – term, mutual funds have the potential to provide a higher return as
they invest in a diversified basket of selected securities.

Low Costs

Investing in the capital markets because the benefits of scale in brokerage, mutual funds are a
relatively less expensive way to invest compared to directly custodial and other fees translate
into lower costs for investors.

Liquidity

In open – ended schemes, the investor gets the money back promptly at MAV related prices
from the mutual fund. In closed – ended schemes, the units can be sold on a stock exchange
at the prevailing market price or the investor can avail of the facility of direct repurchase at
NAV related prices by the mutual fund.

Transparency
You get regular information on the value of your investment in addition to disclosure on the
specific investments made by your scheme, the proportion invested in each class of assets and
the fund manager’s investment strategy and outlook.

Flexibility

Through features such as regular investment plans, regular withdrawal plans and dividend
reinvestment plans, you can systematically invest or withdraw funds according to your needs
and convenience.

Well Regulated

All mutual funds are registered with SEBI and they function within the provisions of strict
regulations designed to protect the interests of investors.

Tax breaks

Last but not the least, mutual funds offer significant tax advantages. Dividends distributed by
them are tax-free in the hands of the investor.

They also give you the advantages of capital gains taxation. If you hold units beyond one
year, you get the benefits of indexation. Simply put, indexation benefits increase your
purchase cost by a certain portion, depending upon the yearly cost-inflation index (which is
calculated to account for rising inflation), thereby reducing the gap between your actual
purchase cost and selling price. This reduces your tax liability.
What’s more, tax-saving schemes and pension schemes give you the added advantage of
benefits under Section 88. You can avail of a 20 per cent tax exemption on an investment of
up to Rs 10,000 in the scheme in a year

No assured returns and no protection of capital

If you are planning to go with a mutual fund, this must be your mantra: mutual funds do not
offer assured returns and carry risk. For instance, unlike bank deposits, your investment in a
mutual fund can fall in value. In addition, mutual funds are not insured or guaranteed by any
government body (unlike a bank deposit, where up to Rs 1 lakh per bank is insured by the
Deposit and Credit Insurance Corporation, a subsidiary of the Reserve Bank of India).

There are strict norms for any fund that assures returns and it is now compulsory for funds to
establish that they have resources to back such assurances. This is because most closed-end
funds that assured returns in the early-nineties failed to stick to their assurances made at the
time of launch, resulting in losses to investors.

Restrictive gains

Diversification helps, if risk minimization is your objective. However, the lack of investment
focus also means you gain less than if you had invested directly in a single security.

In our earlier example, say, Reliance appreciated 50 per cent. A direct investment in the stock
would appreciate by 50 per cent. But your investment in the mutual fund, which had invested
10 per cent of its corpus in Reliance, will see only a 5 per cent appreciation.
RISK ASSOCIATED WITH MUTUAL FUNDS

Credit Political inflation

RISKS

Liquidity Market

Risk-Return Trade Off

The most important relationship to understand is the risk-return trade off. Higher the risk
greater the returns/loss and lower the risk lesser the returns/loss. Hence it is up to you, the
investor to decide how much risk you are willing to take. In order to do this you must first be
aware of the different types of risks involved with your investment decision.
Market Risk

Sometimes prices and yields of all securities rise and fall. Broad outside influences affecting
the market lead to this. This is true, may it be big corporations or smaller mid-sized
companies. This is known as Market Risk. A Systematic Investment Plan (SIP) that works
on the concept of Rupee Cost Averaging (RCA) might help mitigate the risk.

Credit Risk

The debt servicing ability of a company through its cash flows determines the Credit Risk
faced by you. This credit risk is measured by independent rating agencies like CRISIL who
rate companies and their paper. A ‘AAA’ rating is considered the safest whereas a ‘D’ rating
is considered poor credit quality. A well – diversified portfolio might help mitigate this risk.

Inflation Risk

Inflation is the loss of purchasing power over a time. A lot of times people make conservative
investment decisions to protect their capital but end up with a sum of money that can buy less
than what the principal could, at the time of investment. A well–diversified portfolio with
some investment in equities might help mitigate this risk.

Interest Rate Risk

In a free market economy interest rates are difficult and not impossible to predict. Changes in
interest rates affect the prices of bonds as well as equities. If interest rates rise, the prices of
bonds will fall and vice versa. Equity might be negatively affected as well in a rising interest
rate environment. A well-diversified portfolio might help mitigate this risk.
Political Risk

Changes in government policy and political decision can change the investment environment.
They can create a favourable environment for investment or vice versa.

Liquidity Risk

Liquidity risk arises when it becomes difficult to sell the securities that one has purchased. It
can be partly mitigated by diversification, staggering of maturities as well as internal risk
controls that lean towards purchase of liquid securities. It simply means that you must spread
your investment across different securities (stocks, bonds, money market instruments, real
estate, fixed deposits etc.). This kind of a diversification may add to the stability of your
returns, for example, during one period of time equities might under perform but bonds and
money market instruments might do well enough to offset the effect of a slump in the equity
Markets.

DISADVANTAGES OF MUTUAL FUNDS

There are certainly some benefits to mutual fund investing, but you should also be aware of
the drawbacks associated with mutual funds.

1. No Insurance: Mutual funds, although regulated by the government, are not insured
against losses. The Federal Deposit Insurance Corporation (FDIC) only insures
 against certain losses at banks, credit unions, and savings and loans, not mutual funds.
That means that despite the risk-reducing diversification benefits provided by mutual
funds, losses can occur, and it is possible (although extremely unlikely) that you could
even lose your entire investment.

2. Dilution: Although diversification reduces the amount of risk involved in investing in

mutual funds, it can also be a disadvantage due to dilution. For example, if a single
security held by a mutual fund doubles in value, the mutual fund itself would not
double in value because that security is only one small part of the fund's holdings. By
holding a large number of different investments, mutual funds tend to do neither
exceptionally well nor exceptionally poorly.

3. Fees and Expenses: Most mutual funds charge management and operating fees that
pay for the fund's management expenses (usually around 1.0% to 1.5% per year). In
addition, some mutual funds charge high sales commissions, 12b-1 fees, and
redemption fees. And some funds buy and trade shares so often that the transaction
costs add up significantly. Some of these expenses are charged on an ongoing basis,
unlike stock investments, for which a commission is paid only when you buy and
sell .
4. Poor Performance: Returns on a mutual fund are by no means guaranteed. In fact, on
average, around 75% of all mutual funds fail to beat the major market indexes, like
the S&P 500, and a growing number of critics now question whether or not
professional money managers have better stock-picking capabilities than the average
investor.
5. Loss of Control: The managers of mutual funds make all of the decisions about
which securities to buy and sell and when to do so. This can make it difficult for you
when trying to manage your portfolio. For example, the tax consequences of a
decision by the manager to buy or sell an asset at a certain time might not be optimal
for you. You also should remember that you are trusting someone else with your
money when you invest in a mutual fund.
6. Trading Limitations: Although mutual funds are highly liquid in general, most
mutual funds (called open-ended funds) cannot be bought or sold in the middle of the
trading day. You can only buy and sell them at the end of the day, after they've
calculated the current value of their holdings.

7. Size: Some mutual funds are too big to find enough good investments. This is
especially true of funds that focus on small companies, given that there are strict rules
about how much of a single company a fund may own. If a mutual fund has $5 billion
to invest and is only able to invest an average of $50 million in each, then it needs to
find at least 100 such companies to invest in; as a result, the fund might be forced to
lower its standards when selecting companies to invest in.

8. Inefficiency of Cash Reserves: Mutual funds usually maintain large cash reserves as
protection against a large number of simultaneous withdrawals. Although this
provides investors with liquidity, it means that some of the fund's money is invested
in cash instead of assets, which tends to lower the investor's potential return.
Different Types: The advantages and disadvantages listed above apply to mutual funds in
general. However, there are over 10,000 mutual funds in operation, and these funds vary
greatly according to investment objective, size, strategy, and style. Mutual funds are available
for virtually every investment strategy (e.g. value, growth), every sector (e.g. biotech,
internet), and every country or region of the world. So even the process of selecting a fund
can be tedious.

Net Asset Value (NAV)Open-end mutual funds price their shares in terms of a Net Asset
Value (NAV) (note that you can calculate NAV for a closed-end fund too, but it will not
necessarily be the price at which you buy or sell closed-end shares). NAV is calculated by
adding up the market value of all the fund's underlying securities, subtracting all of the fund's
liabilities, and then dividing by the number of outstanding shares in the fund. The resulting
NAV per share is the price at which shares in the fund are bought and sold (plus or minus any
sales fees). Mutual funds only calculate their NAVs once per trading day, at the close of the
trading session.

HISTORY OF MUTUAL FUND IN INDIA

HISTORY – The Landmarks

1963: UTI is India’s first mutual fund.

1964: UTI launches US-64.

1971: UTI’s ULIP (Unit-Linked Insurance Plan) is second scheme to be Launched.

1986: UTI Master share, India’s first true ‘mutual fund’ scheme, launched.

1987: PSU banks and insurers allowed floating mutual funds; State Bank of India (SBI) first
off the blocks.

1992: The Harshad Mehta-fuelled bull market arouses middle-class interest in shares and
mutual funds.

1993: Private sector and foreign players allowed; Kothari Pioneer first private fund house to
start operations; SEBI set up to regulate industry.

1994: Morgan Stanley is the first foreign player.

1996: Sebi’s mutual fund rules and regulations, which forms the basis of most current laws,
come into force.

1998: UTI Master Index Fund is the country’s first index fund.

1999: The takeover of 20th Century AMC by Zurich Mutual Fund is the first acquisition in
the mutual fund industry.

2000: The industry’s assets under management crosses Rs 1, 00,000 crore.

2001: US-64 scam leads to UTI overhaul.

2002: UTI bifurcated, comes under SEBI purview; mutual fund distributors banned from
giving commissions to investors; floating rate funds and Foreign debt funds debut.
2003: AMFI certification made compulsory for new agents; fund of funds launched.

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at
the initiative of the Government of India and Reserve Bank. The history of mutual funds in
India can be broadly divided into four distinct phases.

FIRST PHASE: 1964 – 87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by
the Reserve Bank of India and functioned under the regulatory and administrative control of
the Reserve Bank of India. In 1978, UTI was de-linked from the RBI and the Industrial
Development Bank of India (IDBI) took over the regulatory and administrative control in
place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988
UTI had Rs.6, 700 crores of assets under the management.

SECOND PHASE: 1987 – 1993 (Entry of Public Sector Funds)

1987 marked the entry of non – UTI, public sector mutual funds set up by public sector banks
and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India
(GIC). SBI Mutual Fund was the first non – UTI Mutual Fund established in June1987
followed by Can Bank Mutual Fund (Dec ‘87), Punjab National Bank Mutual Fund (Aug
‘89), Indian Bank Mutual Fund (Nov ‘89), Bank of India (Jun ‘90), Bank of Baroda Mutual
Fund (Oct ‘92). LIC established its mutual fund in June 1989 while GIC had set up its mutual
fund in December 1990. At the end of 1993, the mutual fund industry had assets under
management of Rs.47, 004 crores.
THIRD PHASE: 1993 – 2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year
in which the first Mutual Fund came into being, under which all mutual funds, except UTI,
were to be registered and governed. The erstwhile Kothari Pioneer (now merged with
Franklin Templeton) was the first private sector mutual fund registered in July 1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and
revised Mutual Fund Regulations in 1996.
The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of
mutual fund houses went on increasing, with many foreign mutual funds setting up funds in
India and also the industry has witnessed several mergers and acquisitions. As at the end of
January 2003, there were 33 mutual funds with total assets of Rs.1,21,805 crores. The Unit
Trust of India with Rs.44,541 crores of assets under management was way ahead of other
mutual funds.

FOURTH PHASE: since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of
India with assets under management of Rs.29,835 crores as at the end of January 2003,
representing broadly, the assets of US 64 scheme, assured return and certain other schemes.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation
of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under
management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual
Fund Regulations, and with recent mergers taking place among different private sector funds,
the mutual fund industry has entered its current phase of consolidation and growth

INDUSTRY PROFILE:
 Growth of asset under management from March-1965 to March-2009

STRUCTURE OF MUTUAL FUNDS IN INDIA

PRODUCT PORTFOLIO

Distribution channel in SBIMF

SBI asset management company mainly emphasize on relationship building with its
customers like distributors, Banks, individual investors etc. The distribution channel of
SBIMF is as follows
 Distribution Channel
N.D.'s SBG BANKS DIRECT IFA's
29%
33%

9%
20%
9%

RESEARCH METHODOLOGY

NEED OF THE STUDY:

 The need of the study aimed to know the awareness in the public about the various
products and services provided by S.B.I-Mutual Fund.

 A study was also conducted to measure the performance of various funds on the basis
of various performance measuring ratios such as Sharpe ratio, total expense ratio,
standard deviation, Beta and R-squared.
  The study was basically undertaken to understand the financial needs of the customer
and to provide or suggest them products and services according to their financial
needs.

 The study was undertaken to find out the Banking channel at SBI Mutual Fund.

Analysis of the funds on the Basis of various ratios.

PERFORMANCE EVALUATION

Mutual Fund industry today, with about 34 players and more than five hundred schemes, is
one of the most preferred investment avenues in India. However, with a plethora of schemes
to choose from, the retail investor faces problems in selecting funds. Factors such as
investment strategy and management style are qualitative, but the funds record is an
important indicator too. Though past performance alone cannot be indicative of future
performance, it is, frankly, the only quantitative way to judge how good a fund is at present.
Therefore, there is a need to correctly assess the past performance of different mutual funds.

Worldwide, good mutual fund companies over are known by their AMCs and this fame is
directly linked to their superior stock selection skills. For mutual funds to grow, AMCs must
be held accountable for their selection of stocks. In other words, there must be some
performance indicator that will reveal the quality of stock selection of various AMCs.

Return alone should not be considered as the basis of measurement of the performance of a
mutual fund scheme, it should also include the risk taken by the fund manager because
different funds will have different levels of risk attached to them. Risk associated with a fund,
in a general, can be defined as variability or fluctuations in the returns generated by it. The
higher the fluctuations in the returns of a fund during a given period, higher will be the risk
associated with it. These fluctuations in the returns generated by a fund are resultant of two
guiding forces. First, general market fluctuations, which affect all the securities, present in
the market, called market risk or systematic risk and second, fluctuations due to specific
securities present in the portfolio of the fund, called unsystematic risk. The Total Risk of a
given fund is sum of these two and is measured in terms of standard deviation of returns of
the fund. Systematic risk, on the other hand, is measured in terms of Beta, which represents
fluctuations in the NAV of the fund vis-à-vis market. The more responsive the NAV of a
mutual fund is to the changes in the market; higher will be its beta. Beta is calculated by
relating the returns on a mutual fund with the returns in the market. While unsystematic risk
can be diversified through investments in a number of instruments, systematic risk cannot. By
using the risk return relationship, we try to assess the competitive strength of the mutual
funds vis-à-vis one another in a better way. 

In order to determine the risk-adjusted returns of investment portfolios, several eminent

authors have worked since 1960s to develop composite performance indices to evaluate a
portfolio by comparing alternative portfolios within a particular risk class. The most
important and widely used measures of performance are:

 The Treynor Measure

 The Sharpe Measure

The Treynor Measure

Developed by Jack Treynor, this performance measure evaluates funds on the basis of
Treynor's Index. This Index is a ratio of return generated by the fund over and above risk free
rate of return (generally taken to be the return on securities backed by the government, as
there is no credit risk associated), during a given period and systematic risk associated with it
(beta). Symbolically, it can be represented as:

Treynor's Index (Ti) = (Ri - Rf)/Bi.

Where, Ri represents return on fund, Rf is risk free rate of return and Bi is beta of the fund.

All risk-averse investors would like to maximize this value. While a high and positive
Treynor's Index shows a superior risk-adjusted performance of a fund, a low and negative
Treynor's Index is an indication of unfavorable performance.

The Sharpe Measure

In this model, performance of a fund is evaluated on the basis of Sharpe Ratio, which is a
ratio of returns generated by the fund over and above risk free rate of return and the total risk
associated with it. According to Sharpe, it is the total risk of the fund that the investors are
concerned about. So, the model evaluates funds on the basis of reward per unit of total risk.
Symbolically, it can be written as:
Sharpe Index (Si) = (Ri - Rf)/Si

Where, Si is standard deviation of the fund.

While a high and positive Sharpe Ratio shows a superior risk-adjusted performance of a fund,
a low and negative Sharpe Ratio is an indication of unfavorable performance.

Comparison of Sharpe and Treynor

Sharpe and Treynor measures are similar in a way, since they both divide the risk premium
by a numerical risk measure. The total risk is appropriate when we are evaluating the risk
return relationship for well-diversified portfolios. On the other hand, the systematic risk is the
relevant measure of risk when we are evaluating less than fully diversified portfolios or
individual stocks. For a well-diversified portfolio the total risk is equal to systematic risk.
Rankings based on total risk (Sharpe measure) and systematic risk (Treynor measure) should
be identical for a well-diversified portfolio, as the total risk is reduced to systematic risk.
Therefore, a poorly diversified fund that ranks higher on Treynor measure, compared with
another fund that is highly diversified, will rank lower on Sharpe Measure.

TERMINOLOGY:
ALPHA - The alpha ratio illustrates the effect of the portfolio manager’s choice on the fund's
return. The greater the alpha, the better a return has the investment yielded compared with
other investment objects with the same market risk.  Alpha is an annualized return measure
of how much better or worse a fund’s performance is relative to an index of funds in the same
category, after allowing for differences in risk.

BETA – A ratio that measures the market risk of securities or a fund. If the beta ratio exceeds
one, the fund is more sensitive than funds in general to the fluctuations of the stock market.
The beta may also be negative, which means that the value of the fund will, on average, move
to the opposite direction than the general market development.

Beta measures the sensitivity of rates of return on a fund to general market movements.

Beta measures the volatility of the fund, as compared to that of the overall market. The
Market's beta is set at 1.00; a beta higher than 1.00 is considered to be more volatile than the
market, while a beta lower than 1.00 is considered to be less volatile.

Beta measures the volatility of the fund’s value relative to the volatility of the fund’s
benchmark value. The Beta coefficient indicates the percentage change of the fund’s value
when the benchmark value changes by one percentage point.
Example: When the beta of the fund is 0.8, the value of the fund rises by 0.8 % when the
benchmark index rises by one percent. Correspondingly, when the benchmark index falls by
one percent, the value of the fund falls on average by 0.8 %.

The Beta coefficient is a key parameter in the capital asset pricing model (CAPM). It
measures the part of the asset's statistical variance that cannot be mitigated by the
diversification provided by the portfolio of many risky assets, because it is correlated with the
return of the other assets that are in the portfolio.

Beta is also referred to as financial elasticity or correlated relative volatility, and can be
referred to as a measure of the asset's sensitivity of the asset's returns to market returns, its
non-diversifiable risk, its systematic risk or market risk. On an individual asset level,
measuring beta can give clues to volatility and liquidity in the marketplace. On a portfolio
level, measuring beta is thought to separate a manager's skill from his or her willingness to
take risk.

The beta movement should be distinguished from the actual returns of the stocks.

STANDARD DEVIATION

Statistic that measures the tendency of data to be spread out. Accountants can make
important inferences from past data with this measure. The standard deviation, denoted with
S and read as sigma, is defined as follows:
CORRELATION

IT shows the linear dependency between fund returns and the returns of the benchmark index.
Correlation may vary between -1 and 1. The dependency is complete if the fund’s correlation
to the benchmark index is 1. If the correlation is zero, there is no dependency

Analysis of Funds on the basis of various ratios.

Std. Beta R-squared Sharpe Portfolio

Deviation ratio
Turnover
Magnum 38.46% 0.88 0.99 -0.27 1.36
Taxgain

Magnum 48.77% 1.08 0.94 -0.23 1.46

Global
Fund
Magnum 39.96% 0.91 0.99 -0.35 1.01
Contra
Magnum 44.03% 0.97 0.93 -0.41 0.98
Comma
SBI 1.06% 0.43 0.17 -1.76 13.14
Arbitrage
MSFU IT 43.80% 1.13 0.87 -0.05 0.48
 Magnum 37.52% 0.84 0.96 -0.33 0.74
Multiplier

CONCLUSION:

From the above table we can clearly see the comparison between various funds of SBI
Mutual Fund. In this higher the value of Sharpe and Treynor, better is the fund.

 Magnum Taxgain
 Magnum Multiplier and
 Magnum Contra
are having beta values of 0.88, 0.91 and 0.84 respectively which means that these funds are
more sensitive and will give more returns than market when market are in good phase but
give negative returns more intensely than market when market in bad phase.

High and positive Sharpe Ratio shows a superior risk-adjusted performance of a fund, a low
and negative Sharpe Ratio is an indication of unfavorable performance. If the Sharpe figure is
positive, the risk taken has paid off, and if the figure is negative, the returns are lower than
the risk-free rate.

 Magnum Taxgain,
 Magnum Contra and
 Magnum Multiplier
Are the three funds which are best among all in terms of risk adjusted returns.

A scheme with high Treynor ratio such as Equity scheme will enjoy a premium when the
markets are bullish and will be affected negatively when the markets are bearish.
So in the bullish market Magnum Global and Magnum Multiplier are the best funds to opt for
getting better returns.

FACTOR ANALYSIS:

As the numbers of independent variables are very high, we have tried to classify similar
variables under a broad heading through factor analysis. In KMO adequacy level is 50% with
100% significance which makes the model satisfactory. We can increase the adequacy level
by changing factors like fees load and expenses because it has a very low communality. Total
variance explained by the model is 64% which means that 64% of the variance has been
accounted by the factors. Through rotated component matrix we can classify all the variables
into 10 factors. Some of the factors are as follows:
(Refer Annexure)

VARIABLES FACTORS
Performance of fund manager
AUM Technical factors
NAV
Type of scheme
Personal attention Psychological factors
Prior experience
Advisor influence
Family recommendation Promotion
Promotional campaign
Economic & Market condition
Fluctuation in equity market Market condition
Attitude towards risk
There are other factors also which consists of other variables but they cannot be classified
under abroad headings.
We can see in the rotated component matrix in factor analysis table that above factors have
been recognised as sub-factors and generalized in 5 broad categories. All this selection has
been made by the modal on the basis of factor loadings which we can see in one of the tables
of factor analysis.

5 Broad factors have been described in the following manner:-

 Financial Factors -This factor has 3 sub-factors namely performance of the fund
manager, AUM, NAV. Thus this factor tells us more of the technical side of any given
fund under consideration. Investor who ranks this factor or these sub-factors as the
most important is definitely looking for very good returns & going to invest after
much research as he will definitely looking for a fund having a good performance and
decent returns opportunity.

 Customer Oriented Factors – Type of scheme, personal attention and prior

experience are the sub-factors that make this broader category together. In this
category an investor is looking for the different schemes under any particular fund.
Investor is also looking for personal attention being given to his portfolio or
investments, he wants personal attention in the sense that new investment
opportunities should be informed to him or proper entry & exit points should be
recommended to him and the likes.
  Marketing Factors – Investors who are going to rate this broad category as the most
important for them are more inclined to the factors like advisor influence, family
recommendation and promotional campaign. These kinds of investors are not much
experienced as far as these investments are concerned.

 Economic Factors – This factor includes factors like market condition, fluctuations
in the market and attitude towards risk. Investors who are more concerned about these
factors are risk averse investors. These investors wait for the right moment to enter or
to start investing in funds. For these people risk is at the top most priority and if
returns are not that much then also its fine with these investors.

 Security Factors – It includes tax benefits, prospectus and security as far as their
capital investment is concerned.

DISCRIMINANT ANALYSIS:

Through Discriminant analysis I have tried to highlight variables which effect the decision of
a people investing for less than a year and people who are investing for more than a year. The
term 1 consists of the people who are investing for less than a year whereas term 2 consists of
the people who are investing for 1 to 5 years. I have found that Eigen value is less than 1 and
Wilks’ Lambda is more than 0.5 as well as the significance level is quite high which shows
that the model is not applicable. Through group statistics in both the terms standard deviation
is quite high and mean is quite low as seen in Appendix. Therefore, there is no difference in
the factors affecting the buying behavior between term 1 and term 2 people.
DEMOGRAPHIC FACTORS:

 SEX PROFILE:

 AGE PROFILE:

From above charts it can be easily be inferred that people aged between 31-40 preferred
mutual funds most because of many factors, but mainly due to stability in their earnings and
career, responsibility towards family etc. Also, we found that only 1 respondent is female in
pilot study, so we will see to what number it will go because this number will give us a rough
idea about mutual fund awareness among women in particular and financial awareness in
general.

ACADEMIC QUALIFICATION:
 ACADEMIC QUALIFICATION
GRADUATE POST GRADUATE PROFESSIONAL
17%

21%

62%

 MARITAL STATUS:

MARITAL STATUS
MARITAL STATUS MARRIED UNMARRIED

20%

80%

OCCUPTION PROFILE:
 OCCUPATION
OCCUPATION Professional Salaried Business Retired Others

7%
20%

57%

17%

From above charts it can be easily inferred that:

 Majority of respondents are graduates, therefore it remains to be seen that to what

extent post graduates and professional have interest in mutual funds.
 Majority of respondents are married (80%), therefore it remains to be seen that how
many young and unmarried investors have preference towards mutual funds.
 Majority of respondents have their occupation as a professional be it Relationship
Mangers, Insurance agents, Independent Financial Advisors (IFAs), MBAs etc.
mainly due to their high level of awareness about financial products.

ANNUAL INCOME RANGE:

 ANNUAL INCOME
LESS THAN 200000 200001-500000 500001-1000000 ABOVE 1000000
17% 27%

57%

From above chart it can be easily inferred that majority of respondents are from 2,00,000-
5,00,000 range, therefore its remain to be seen that how many are from less than two lakh
category because here lies the opportunity for AMCs to generate huge volumes by offering
innovative funds.

Analysis of Individual Investors

DATA ANALYSIS

POPULATION:-

According to the data collection method adopted, the size of the population is 100.
Thus, N=100
After collecting the data the following facts were found out:-

Out of the 100 people the following percentage composition were interested in the following
products:-

 MUTUAL FUNDS -44%

 SHARE/BONDS- 23%

 LIFE INSURANCE-7%

 REAL ESTATE-6%

 COMMODITIES-8%

 NSC (NATIONAL SAVING SCHEME)-10%

 OTHERS-2%

ANALYSIS OF THE PREFERENCES OF THE RESPONDENTS:-

 8 10 2

44
6 mutual funds
Shares/Bonds
insurance
real estate
commodities
7 NSC
others

23

The data collected above shows that approximately 65% of people are aware of the market in
general and 44% are aware of Mutual Funds in particular. Thus further analysis is made on
the basis of data collected; which categories of people are more aware and inclined towards
Mutual Fund. Therefore, further analysis is made as below:

 Analysis according to Age

 Analysis according to Income
 Analysis according to Occupation

Analysis according to Age:

 28 14

Less than 35(<35)

35 to 50
greater tha 50(> =50)

58

Findings:

 As per the above analysis, only 14% of respondents who are below 35 years are
interested to invest in SBI-MF. The reasons being that there are more needs to be
fulfilled for this age group viz. education, entertainment etc. and therefore these
people do not have surplus funds to invest in saving schemes or Mutual Funds etc.

 The persons within the age group of 35-50 years only 58% of respondents are
interested to invest in SBI-MF. These persons have more investing potential than their
counterparts and they want to increase their income through investing in Mutual
Funds.

 The persons having the age equal to or above 50 years, only 28% of respondents are
interested to invest in SBI-MF. The reasons being that these persons are more inclined
 to age-old principals and want to invest in schemes giving fixed returns as compared
to investing in Mutual Fund.

Analysis according to Savings from income:

Income Percentage (%)

Low 34%
Medium 18%
High 48%

Findings:

 The above analysis shows that Low income category is less interested to invest in
SBI-MF as compared to high income category. The reason being that these people
have to fulfill their basic needs as first. The other reason is that low income category
people are having more consumption as compared to their savings.

 Among Medium income category people, only 18% of the respondents want to invest
in SBI-MF. The first and foremost reason behind this is that these people are risk
averse and want to invest in those products from which they must get assured returns
as compared to investing in Mutual Funds.

 Among High income category people, only 48% of the respondents want to invest in
SBI-MF because these people have enough resources for their well being and it does
not hurt them to invest a large chunk of their resources in Mutual Funds.
 Analysis according to Occupation:

9
2 6

Salaried Employee in Govt/public

sector
salaried employee in corporate
32 salaried employee in SME
self employed businessman
46
self employed professional
farmer/cultivator/agriculture
3 others

Findings:

 From the above analysis, it has been learned that only 49% of respondents who are in
service are interested to invest in SBI-MF because these people are well aware of
Mutual Funds and Stock Market. Service category people want to secure their future
and therefore showed interest in investing under risky ventures.

 Businessmen are also interested to invest in SBI-MF. Only 32% of respondents who
are in business invested in SBI-MF.These people invest more in Debt schemes than in
Equity schemes. This is because Debt schemes promise a less, but secure return over
equity schemes which are more risky. Moreover, the risk profile of business men is
quite moderate.
  Professional are much interested in investing the Mutual Funds as compared to their
counterparts. The main reason for such thing is the complete knowledge of
o Stock markets
o Past performance
o Consistent returns
o Measurement of risk
o Finance knowledge
But with the current performance of Mutual Funds on the stock market, less people are
willing to take the huge risk of losing money.

Analysis of different category persons about different schemes:-

SBI MAGNUM TAX GAIN SCHEME (MTGS)

15

Servicemen
24 Businessman
Proffesional
61
Tax Planning Mutual Funds have come into their own as a compelling cocktail of savings and
returns, surpassing larger rivals such as equity funds in asset growth rates over the past year
and-a-half. Thus, service category is more inclined towards MTGS because of the tax
exemption and phenomenal returns. This scheme was equally supported by the SBI Tax
Advantage series I (new NFO), a close ended fund offered by SBI MF.

SBI MAGNUM GLOBAL FUND (MGLF)

Sales
23

46

servicemen
businessman
professional

41

MGLF is an open-ended equity scheme investing in stocks from selected industries

with high growth potential. Due to the high growth potential and investing the
resources in money market instruments, businessmen and professionals are more
inclined towards MGLF.
 MAGNUM SECTOR UMBRELLA- CONTRA FUND

39
44

servicemen
businessman
frofessional

17

Due to the maximum growth opportunity through equity investments in stocks of

growth oriented sectors of the economy, professionals like the MSFU-Contra fund the
 most. Servicemen also like it because of huge untapped growth potential of the
scheme. And businessmen like this scheme less as compared to their counterparts
because businessmen can’t block their money for long time and this scheme provides
return in long term.

Analysis on the basis of purchase of investment

has been sowly decreasing 4

has been slowly increasing 27

is stable 13

suddenly increases 32

suddenly decreases 24

0 5 10 15 20 25 30 35
The above graph shoes us that people purchase funds, when the price of the fund
suddenly increases. This is because of their expectation for the fund to rise more in
the future.

Next are the investors who invest when the price (NAV) of the fund is slowly but
steadily increasing. They do this, thinking that the fund will further raise in the future
at the same pace.

24 % of the investors invest their money when the price of the fund suddenly decreases. They
do this in order to take benefit of the decreased cost, in anticipation that they may sell it in the
future for a higher price.

FINANCIAL BEHAVIOR OF RESPONDENTS:

INVESTMENT OBJECTIVES:

It can be seen from the following graph that the main investment objective of most of the
investors is good returns and capital appreciation.
 2
5

2
Saftey
Good Return
Tax Benefit
Capital Appreciation
Liquidity
Others

21

CHANNELS USED BY RESPONDENTS FOR INVESTING: From study it can easily be

inferred that majority of respondents (70%) now invest directly in mutual funds especially
after SEBI guidelines came recently that says there will not be any ENTRY LOAD for
investors investing in mutual fund schemes directly.

INVESTMENT HORIZON: From the study it can be concluded that majority of

respondents invest in mutual funds from “More than three year” perspective (53%), that’s
means once a investor comes to your service he will be there for at least three years, therefore
it is very essential today that AMCs and especially SBI should focused on innovating new
ways to serve the customers like giving SMS time to time, giving value added services like
free insurance, debit cards etc.

RISK PREFERENCES : The following chart explains that majority of investors (57%) were
ready to take moderate level of risk by investing in mutual funds and also rest of the
respondents(43%) go for “High Risk and High Return” category. Not a single respondent opt
for Low risk and low return category that again proved that it is a myth that Indian Investors
are more risk averse when it comes to investment in Stock Markets or Mutual Funds.

35

30

25

20

15

10

0
High risk and high return Moderate risk and Low risk and low return TOTAL
Moderate return

SCHEME PREFERENCES:

ON THE BASIS OF ASSET CLASS:

When it comes to scheme preferences majority of the investors prefer Balanced Schemes
(43%), followed by Equity Schemes (34%) then debt (12%) and finally FMP’s (11%). It
shows that there is a huge potential for debt instruments in the market which is unearthed by
investors due to its complexity, low awareness etc.
 50

45 43

40

35 34

30

25

20

15
12 11
10

0
Equity Debt Balanced FMP's

PREFERABLE ROUTE TO INVESTING IN MUTUAL FUNDS:

Friend’s Suggestion
Newspapers/Magazines
Self Decision
Television
Brokers/Agents
Others ….
As above chart clearly explains that majority of respondents (57%) take self decision ones
they start investing in mutual funds. Only 10 % of respondents take help of Brokers/Advisors
when it comes to final decision of investing. Therefore, it shows that AMCs in general and
SBI in particular have to be more informative so that they can provide best material, service
and information to facilitate subsequent investment of investors.

SCHEME PREFERENCES:

ON THE BASIS OF STRUCTURE:

When it come to scheme preference on the basis of its structure, majority of retail investors
prefer “Open Ended Scheme “ primarily due to flexibility of redemptions, investments, good
return and liquidity. None of the investors prefer “Interval Scheme”; in fact some of the retail
investors were confused about the very name of “Interval Schemes.”
 120

100

80

60

40

20

0
open ended close ended interval scheme total

SAVING HABITS:

When it comes to Saving Habits of investors it can be seen that majority of respondents saves
between 15%-20% p.a. basis followed by “above 25%” category (20%).Others categories like
10-15 and 20-25 are equally preferred by respondents but it was a positive clue that only 7%
of respondents save below 5%.
 2
6
4

Below 5%
5-10%
10-15%
15-20%
5 5 20-25%
ABOVE 25%

SAVING PREFERENCES:

Among saving preferences following results came out:

Using Method Of Rank Order as given by Cattell,1903 and Spearman,1904 the choices
were ranked and then as per their Rank Sum Score and Z-Values “Mutual Funds” emerges
as best choice among respondents. Though it is given 2 nd Rank by majority of investors.
Following MFs, “Life insurance” and “Shares and Debentures” are the second best
choices. Surprisingly “Gold and Jewellery” is the most unlikely best choice among
respondents.

Most Popular Fund from SBI: Up till this stage the winner is “MAGNUM TAX GAIN”
which is preferred by majority of respondents (60%), due to its three in one benefits which
are as follows:

 Tax Benefit
 Good Return
 Capital Appreciation

SATISFATION LEVEL WITH SBI:

50
47
45

40

35 33

30

25

20
16
15

10

5 3
1
0
highly satisfied cosiderably satisfied reasonably satisfied unsatisfied highly satisfied
Form above chart it can be inferred that up to this stage majority of respondents (47%) are
considerably satisfied when they were asked about overall experience with SBI Mutual Funds
including funds, returns, services etc., As can be seen 33% of the investors are “Reasonably
Satisfied” which means that there is more to do on SBI behalf for Customer Satisfaction.

Interaction with individual/Direct (Walk in) investors

Apart from maintaining relationship with the distributors I have also deal with the customers
who are coming directly to the AMC for investment which provided me an exposure to
selling. It also helped me in learning how to deal with different type of customers, how to
insist them for making investments etc. while dealing with them I have done following tasks:-
a) Explain them various funds/schemes according to their objective.
b) Helping them in filling the forms.
c) Solving their problems related to statement, redemption etc.
d) Insisting them to invest in Systematic Investment Plans (SIP).
While interacting with them I have tried to find out various factors effecting their investments
in mutual funds, for this I have carried out a survey by requesting them to fill a questionnaire
a sample of which I have attached in the annexure. On the basis of that that questionnaire I
have analyzed various points which are discussed below.

1)EQUITY DIVERSIFIED FUNDS:

 Meaning: These are the funds in the market which have investment across the
sectors, asset classes and financial instruments to provide optimal benefit of
diversification of portfolio to investors.
 The following are the top five funds in the market in this category as per the recently held
survey:

a) SBI MAGNUM CONTRA

b) HSBC EQUITY
c) FRANKLIN INDIA PRIMA PLUS
d) SBI MAGNUM EQUITY
e) RELIANCE GROWTH

ANALYSIS:

FUNDS RETURNS:

As per this criterion funds are compared from past six month duration to five years time.
Latest returns are shown in the analysis. Returns of less than one year are on absolute basis
and for more than one year are on compounded basis.

Fund Return(in SBI Magnum HSBC Equity Franklin India SBI Magnum Reliance
‘000 cr.) Contra Prima Plus Equity Growth

6 Months 53.64 34.56 43.36 51.79 46.42

1Year 13.55 -0.42 13.80 10.18 2.37

3Year 16.29 14.29 17.36 14.63 17.15

5Year 29.48 19.65 11.46 22.95 26.77

AS ON 29-05-09 Source: Value Research Online

60

50

40

30
6 Months
20 1Year
3Year
10 5Year

-10

FINDINGS:

 Since two funds from SBI brand are in top five funds, that’s shows how well the
portfolios are managed by the concerned Fund Managers.
 Magnum Contra has performed very well in last six months which shows the funds’
ability to withstand ups and downs in the market which is the case since December
2008.It has increased by only (53.64)% when compared to HSBC Equity which has fallen
by (34.56)%.

 Hit by global recession, from one year perspective also both funds from SBI are showing
stable returns.

 Last, but not the least from three and five years perspective, the horizon which is
considered to be very important from investors point of view, both funds from SBI,
especially Magnum Contra outperformed in the category. It is giving highest return of
16.29% and 29.48% return in both time periods.

RISK PROFILE:

SBI Magnum HSBC Equity Franklin SBI Magnum Reliance

Contra India Prima Equity Growth
Standard 32.10 28.84 Plus 29.66 33.41 33.35
Deviatio
n
Sharpe -0.03 0.03 0.03 0.00 -0.01
Ratio
Beta 0.97 0.87 0.89 1.00 0.97

Alpha -0.31 1.50 1.28 0.67 0.35

 R- 0.95 0.95 0.94 0.95 0.88
Squared
AS ON 29-05-09 Source: Value Research Online

35

30

25

20

15 Standard Deviation
Sharpe Ratio
10 Beta
Alpha
5 R- Squared
0

-5

FINDINGS:

 Since Standard Deviation is the measure which shows variability in the returns from
the mean return, therefore it is considered to be the direct measure of risk. As Both
SBI funds have higher Standard Deviation, it shows that these funds are more
aggressive in nature than other funds.
 Sharpe ratio, which means returns per unit of risk that a fund is able to generate.
Therefore, higher the ratio the better it is. Accordingly, Magnum Contra is not a
winner as per this criterion.
 Beta, which shows the co-movement of funds return with Market rate of returns, is
again measure of volatility or risk. Since Magnum Equity is having highest Beta
which is closed to one and also Magnum contra which is second highest shows that
they are tend to be aggressive or volatile in nature.

 Alpha, which measure the excess return over and above the market return is a
measure of risk. A high positive alpha is good sign for fund. e.g. if a fund has alpha of
positive 10 it
means fund is giving a return of more than 10 percent when compared to its
benchmark or Market. Accordingly, HSBC Equity is winner in this category which is
generating a highest positive alpha in the category which is 1.50%.

 R-Squared, which explains the change in return caused by market volatility is a good
measure of risk. But a high r-square means that much of change is caused by market
sentiments or fundamentals. Therefore, it is suggested that if a fund has very high r-
square value it means similar returns can be achieved by investing in the stock
markets. Therefore, a moderate r-square value ranging between 65-85% is
considered good from portfolio management point of view. Since, Magnum Contra is
having one of the highest r-squared value(.9) alongwith HSBC Equity it is suggested
that some changes has to be made in the portfolio of fund to take benefit of
diversification of portfolio. On the contrary, Reliance Growth is having a r-squared
value of .88 which means that it is taking the benefit of its portfolio in most optimum
way.
 PORTFOLIO ANALYSIS:

SBI Magnum HSBC Equity Franklin India SBI Magnum Reliance

Contra Prima Plus Equity Growth
P/E ratio 14.73 18.93 18.62 21.71 14.34

Fund Size(in 1958.5 1180. 1153.2 241.91 3597.9

Rs. cr.) 0 7 0 2
PortfolioTurno 63.00 56.00 57.85 48.00 97.00
ver(in %)
Top 5 21.52% 26.97 33.46 31.52 17.49%
Holdings % % %
AS ON 29-05-09 Source: Value Research Online
 4000
3500
3000
2500
2000
1500 P/E ratio
Fund Size(in Rs. cr.)
1000
Portfolio Turnover(in %)
500 Top 5 Holdings

FINDINGS:

 P/E RATIO is a measure of investors’ confidence in the fund/stock. High P/E ratio
means that investors are paying higher prices for stock when compared to its earnings.
Generally, P/E ratio is high for young/growth funds/stock. Since Magnum Equity is
having a highest P/E ratio in the category, it shows that investors have a lot of
confidence in funds. On the contrary, Magnum Contra is slowly losing its contrarian
approach which reflects in its lowest P/E ratio in the category.

 As usual funds from SBI brands have largest Assets under Management (in cr.) this
shows the Brand SBI has no problem when it comes to raising funds. Like Magnum
Contra has second highest AUM in the category only preceded by Reliance Growth.
 Concentration Level: As shown in above table, Magnum Equity is having 2 nd
highest holdings in top five stock, which means the fund is concentrated towards
major stocks in the portfolio. While Magnum Contra is quite diversified fund as it is
having second lowest concentration level only next to Reliance Growth.

 Portfolio Turnover which measures the extent to which the fund is active in terms of
its dealings in the markets. However, high turnover also implies that high transaction
cost are charged to fund. Since Sbi Magnum Equity of the funds from SBI have very
low turnover, it means that funds were not required to be changed in recent period
which ultimately results in greater efficiency. On the other hand Reliance Growth is
having highest Portfolio Turnover which means Fund Manager is churning the
portfolio very quickly which in turn increasing the transaction cost charged to the
fund.

NAV DETAILS OF FUNDS AS ON 29TH MAY,2009

FUND NAV

SBI Magnum Contra 45.00

HSBC Equity 80.72

 Franklin India Prima 43.36
Plus
SBI Magnum Equity 31.39

Reliance Growth 319.21

AS ON 29-05-09 Source: www.nseindia.com

NAV
350
300
250
200
150
100 NAV
50
0

CONCLUSION:

After considering all three parameters mentioned above it can be concluded that MAGNUM
CONTRA is the best fund in the category because unlike a typical contrarian fund that focus
on out of flavor stocks, this fund considers the underlying company’s valuations and
compares that with what it believes the company’s true valuations should be and then decide
whether to invest in it or not. According to its Fund Manager Pankaj Gupta “if the market
expects a stock to grow by 20%, but we it to grow by 30%, the scrip is contrarian for us.”

Also, Fund mainly focused on high-growth stocks like JP Associates, Sintex and Welspun
Gujarat Stahl Rohern throughout 2007.Infact, Fund kept a high exposure to the capital goods
sector, one of the preferred in 2007.Fund also played on some contrarian bets like it invested
in TATA STEEL after it acquired the Anglo-Dutch Steel Major CORUS despite market
shunning it. It increased its exposure to interest-rate sensitive sectors such as Auto and
Banking, a move that eventually benefited the fund in 2007.

NAV DETAILS OF FUNDS AS ON 29TH MAY,2009

FUND NAV

SBI Magnum Tax Gain 93 46.09

Principal Tax Savings 57.03

Birla Sun Life Tax Relief 96 71.15

Sundaram BNP Paribas Tax saver 34.88

Kotak Tax Saver 13.79

AS ON 29-05-09 Source: www.nseindia.com

 NAV
80
60
40
20
0 NAV

ANALYSIS:

FUNDS’ RETURN:

Fund ICICI PRU Magnum Magnum Reliance Sundaram

Returns(in’000cr. Emerging Global 94 Multiplier Plus Growth BNP Paribas
) 3 Months STAR 68.40 85.26 93 55.77 64.43 Select Midcap
NA

1 Year -29.66 -21.61 -5.55 -9.68 NA

 3 Year -3.97 -0.36 10.30 11.95 NA

5 Year 24.82 31.21 33.32 35.20 NA

AS ON 29-05-09 Source: Value Research Online

100

80

60

40 3 Months
1 Year
20 3 Year
5 Year
0

-20

-40

FINDINGS:

 Since two funds from SBI brand are in top five funds, that’s shows how well the portfolios
are managed by the concerned Fund Managers.

 In Three month category, Magnum Global is the winner since it has fallen by minimum
value, while both funds Reliance Growth and Multipier Plus 93 have fallen by maximum
value. It means these funds were not able to withstand Ups and Downs in the Indian stock
markets in past three months i.e. from March 2009 to May 2009 compared to other well
performing fund in the same period.

 Hit by the mammoth of recession in one Year category Winner is Magnum Multiplier
Plus 93 giving the highest return of -5.55%, while funds like ICICI Pru Emerging STAR are
giving lowest returns in the category giving only -29.66% return in past one year.

 In three year category which is one of the preferred choice of a retail investor Magnum
Multiplier Plus 93 is 2nd highest giving the return of 10.30% while Reliance Growth is at 1st
position giving 11.95% return.

 In five year category, again Reliance Growth is the winner giving a handsome return of
35.20%, while Multiplier plus is giving a return of 33.32% at Second Position and Magnum
Global is giving a return of 31.21% which is not a bad return.

COMPARISON OF MUTUAL FUNDS AGAINST

OTHER INVESTMENT AVENUES:
 PRODUCT SAFETY/CON LIQUIDITY RETURN VOLATILITY
VINENCE

Equity Low High/low High-Mod. High

FI Bonds High Moderate Mod.-High Moderate

Debentures Moderate Low Mod.-Low Moderate

Corp. FD Low Low Moderate Low

Bank Deposit High High Low-High Low

PPF High Moderate Moderate Low

Life Ins. High Low Low-Mod Low

Gold High Moderate Mod.-Low Moderate

Real Estate Moderate Low High-Low High

MF High High High Moderate

SOURCE:VALUE RESEARCHONLINE.COM

FINDINGS:

From above table it can be interpreted that Mutual Funds give high return, are safe in nature,
gives high liquidity when compared to other investment avenues. Also, Mutual funds are
Moderate in volatility compared to some high volatile avenues like equity and real estate.
Therefore, features mentioned here make Mutual Funds an attractive investment instrument
for all investors.
SWOT ANALYSIS OF SBI MUTUAL FUND

STRENGTH

 Being the 7th biggest AMC,SBI Mutual Fund has a cutting edge over other AMC’s

 The name SBI is also associated with one of the largest public sector bank in
India,and hence people show more faith in SBI Mutual Fund.

 SBI Mutual Fund is one of the oldest AMC’s in private sector and schemes which are
matured enough pull new investors because of high returns.

 Wide variety of funds,ranging from debt funds to equity and a mixture of both in
various proportions,give ample amount of choice to customers.

 SBI Mutual Fund offers clear and non overlapping positioning of different funds.

 Winner of ICRA Mutual Fund Awards 2009(Magnum Taxgain Scheme).

 Winner of Lipper Fund Awards 2009.

  Winner of Outlook Money NDTV Profit Awards- 2008.

WEAKNESS

 Lack of promotional material ,dispensers ,banners.

 Proper training not being provided to bank officials.

OPPORTUNITIES

 Untapped rural market offers huge potential.

 More focus on PSU’s may enhance business.

 Training provided to investors may lead to more investments.

THREATS

 Competitors like Reliance AMC,ICICI prudential are catching up fast on the market
share.
  Share market slump may see downfall in investments.

 Ongoing recession may impose adverse effects

CONCLUSION

The future of primary market is growing at a very high pace. Taking this thing into
consideration, there are lots of opportunities for the SBI Munds Management Pvt Ltd to tap
the golden opportunities from the Indian market.

SBI Funds Management Pvt Ltd has emerged a very strong player in the field of distribution
of financial product within a short period of one year time in Northern India and is giving
stiff competition to all the players in the market including the banks. It is expanding its area
of business, if the progress of SBI MF goes in the same way, than I can say that there is
bright future for SBI MF in coming years. They have much potential to expand their
distribution network in northern India.

The company is currently following huge investment and growth strategies. Apart from the
market growth rate the distribution industry doesn’t seem so attractive. Hence the firm should
be selective using growth strategies. This is not to undermine the bright future of SBI MF,
just a check to be a cautious.

There is little awareness about mutual fund in India; people have accepted it as a one of the
major investment avenue. Mutual funds will become one of the sought after investment
avenues. As far as the other investment products marketed by SBI MF are concerned, they
have a ready market. The only thing, which it needs to focus on, is that they should have a
strong network so that prompt services and availability of forms is made available to the
investor at a short notice, and if it keeps the traditional base for marketing in India, which is a
price sensitive market, we can say that SBI MF has a great future ahead.

SUGGESTIONS & RECOMMENDATIONS

A) THE GROUND RULES OF MUTUAL FUND INVESTING

The following are the 10 commandments that were to be followed till eternity. The world of
investments too has several ground rules meant for investors who are novices in their own
right and wish to enter the myriad world of investments. These come in handy for there is
every possibility of losing what one has if due care is not taken.

1. Assess yourself: Self-assessment of one’s needs; expectations and risk profile is of

prime importance failing which; one will make more mistakes in putting money in
right places than otherwise. Irrational expectations will only bring pain.
2. Try to understand where the money is going: One can lose substantially if one
picks the wrong kind of mutual fund. In order to avoid any confusion it is better to go
through the literature such as offer document and fact sheets that mutual fund
companies provide on their funds.

3. Don't rush in picking funds, think first: one first has to decide what he wants the
money for and it is this investment goal that should be the guiding light for all
investments done. It is thus important to know the risks associated with the fund and
align it with the quantum of risk one is willing to take. One should take a look at the
portfolio of the funds for the purpose. Excessive exposure to any specific sector
should be avoided, as it will only add to the risk of the entire portfolio.

4. Invest. Don’t speculate: A common investor is limited in the degree of risk that he is
willing to take. It is thus of key importance that there is thought given to the process
of investment and to the time horizon of the intended investment. One should abstain
from speculating which in other words would mean getting out of one fund and
investing in another with the intention of making quick money

5. Don’t put all the eggs in one basket: This old age adage is of utmost importance. No
matter what the risk profile of a person is, it is always advisable to diversify the risks
 associated. So putting one’s money in different asset classes is generally the best
option as it averages the risks in each category.

6. Be regular: Investing should be a habit and not an exercise undertaken at one’s

wishes, if one has to really benefit from them. As we said earlier, since it is extremely
difficult to know when to enter or exit the market, it is important to beat the market by
being systematic. The SIPs (Systematic Investment Plans) offered by all funds helps
in being systematic. All that one needs to do is to give post-dated cheques to the fund
and thereafter one will not be harried later.

7. Do your homework: It is important for all investors to research the avenues available
to them irrespective of the investor category they belong to. This is important because
an informed investor is in a better decision to make right decisions. Having identified
the risks associated with the investment is important and so one should try to know all
aspects associated with it. Asking the intermediaries is one of the ways to take care of
the problem.

8. Find the right funds: Finding funds that do not charge much fees is of importance, as
the fee charged ultimately goes from the pocket of the investor. This is even more
important for debt funds as the returns from these funds are not much. Funds that
charge more will reduce the yield to the investor. Finding the right funds is important
and one should also use these funds for tax efficiency.
 9. Keep track of your investments: Finding the right fund is important but even more
important is to keep track of the way they are performing in the market. If the market
is beginning to enter a bearish phase, then investors of equity too will benefit by
switching to debt funds as the losses can be minimized. One can always switch back
to equity if the equity market starts to show some buoyancy.

10. Know when to sell your mutual funds: Knowing when to exit a fund too is of
utmost importance. One should book profits immediately when enough has been
earned i.e. the initial expectation from the fund has been met with. Other factors like
non-performance, hike in fee charged and change in any basic attribute of the fund
etc. are some of the reasons for to exit.

B) WHEN TO SELL YOUR MUTUAL FUND

While there are many investment consultants, some by profession, some self-professed, who
suggest on when to invest in a particular avenue, there is a certain paucity of people who talk
of when to exit. Here are some situations when the investor should consider withdrawing
their investments from the funds.

 Fund is not performing

This reason for selling, although valid in certain conditions, is where most investors make
a mistake. When calculating performance one shouldn’t look at too short a period and
make a mistake by comparing apples to oranges. One should compare the returns posted
by his fund with that of the peers across various horizons such as 1-year, 3-year and
above. A short-term view can often lead to committing hara-kiri, as it doesn’t present the
full picture. If it has underperformed the average of its peers in all cases, then it sure is
one of the better reasons to exit from the fund.

 A change in life stage

Investments are done with a certain objective in mind and life stages are often a
determining factor of what a person needs. A young man can afford to take more risks
than a person nearing his retirement can. In such cases, it pays to withdraw money
from the equity investments made earlier and put them in safer, more conservative
debt funds that offer stable returns without compromising on risk. So a change in life
stages would be one such reason to consider switching into a fund that matches with
one’s needs.

 A major change in any basic attribute of the fund

When the fund changes any basic attribute as mentioned by it in its offer documents,
the investors have a choice of getting out of it. Even SEBI has provided for an exit
route being made available to the investors. Changes like a change in Asset
Management Company or in investment style of fund or change of structure say from
 closed-end to open-end etc. are good enough reasons for an investor to consider
switching or exiting from it as they are certainly likely to affect the fund in a major
way.

 Fund doesn’t comply with its objective

One of the important parameters in the selection of the fund is alignment of the risk
profiles of the investor and fund. The objective of the fund says a lot about how the
fund plans to invest. If the objective is not being complied with, it is one of the exit
points worth considering.

 The Fund’s Expense Ratio Rises

A small rise in an expense ratio is not a big deal, however a significant rise can result
in substantial reduction of yields and so it would be better to exit the fund. In the case
of bond funds or money market funds, it is highly unlikely that the fund can increase
its returns enough to justify an increase in the fund's expenses.

 The Fund Manager has changed

a simple change of fund managers, in itself, is not enough reason to sell a fund on a short-
term basis. If it is a passively managed fund (index fund), then one has little to no reason
 to worry. However, if it is an actively managed fund, then has to keep the eyes open on
the new manager.

 Enough has been earned

However, nothing is as important as to rein the horses in time. The primary principle
behind safety of investment is to take risks that can be tolerated. The principle also is
specific on the expectations that the investor must have from any investment. Just as it
is important to set realistic targets that one hopes to achieve from the investment, it is
also important to exit when target as expected has been achieved irrespective of the
fact that it might be generating better returns in a short-term. Waiting longer might
not prove beneficial, as one need not be lucky all the time.The above list is certainly
not exhaustive and individuals will have other better reasons to quit as well. It’s just
that most don’t know when to apply thought and so these would come in handy.

LIMITATIONS OF THE PROJECT

As my project involves interaction with both prospective as well as existing clients,
lack of any identity proof hinders the assignment as people often suspect the authenticity of
the concerned person.

 Being a trainee, I was not given the authority to handle any transaction myself but under
the guidance of some superior.
 The company restricts me to deal with its key clients.

 Since I have not undertaken the AMFI exam, which is a mandatory condition to work in
the operations department, I was not able to understand some of the common terms of
the mutual funds industry but later I learnt them.

REFERENCES

Websites referred:

· www.mutualfundsindia.com

· www.amfiindia.com

· www.valueresearchonline.com

· Websites of the AMC’s taken in cases where data was not available on the above two sites.

· www.bseindia.com

· www.nseindia.com

· www.google.com

· www.crisil.com
· www.moneycontrol.com

· www.crisilratings.com

ANNEXTURE

QUESTIONNAIRE- 1
(FOR INDIVIDUAL INVESTORS)
  KEEP INVESTING AND KEEP SMILING
Q.1 Why do you invest in mutual funds? (Tick the Option)

a)Safety b) Good Return c) Tax Benefit d) Capital Appreciation e) Liquidity f)Others

(Please Specify………………………………………)

Q.2Which fund from SBI have largest share in your “PORTFOLIO”.

Q.3Through which channels do you invest in Mutual fund? (Tick the option)

a) Directly b) Through Brokers

Q.4 How much is your investment horizon? (Tick the option)

a) Within a year b)Between 1 – 3years c) More than 3 years

Q.5 How much amount do you invest in Mutual funds? (Tick the option)

a) < Rs.50000 b) Between Rs.50000- Rs.100000 c)>Rs. 100000

Q.6. Are you willing to tolerate decreases in the value of your account from one month
to the next? (Tick the Option)

(a) Not at all (b) Somewhat (c) Definitely

Q.7.What is your risk preference?

a) High risk and high return b) Moderate risk and Moderate return c) Low risk and low
return

Q.8How satisfied you are with your experience of investing in SBI Mutual Funds?

Highly Satisfied Considerably Satisfied Reasonably Satisfied Unsatisfied Highly

Unsatisfied

Q.9 Which Fund House has largest share in your Investment Portfolio: (Mention it)

Q. 10 Scheme Preferences: (Tick the Option)

a) Equity b) Debt c) Balanced d) Fixed Maturity Plan (FMPs) e) Others (Please

Specify----------------------------)

Q.11 Saving Preference: (please rank them):

(a)Life Insurance

(b)Pension and PF Schemes

(c)Bank Deposit

(d)Shares and Debentures

(e)Units of MFs like SBI

(f)Gold/Jeweler
(f)Others (Please Specify-------------------------------------)

Q.12 Preferable route to Mutual Fund Investing: (Tick the option)

(a)Friend’s Suggestion (b) Newspapers/Magazines (c) Self Decision (d) Television (e)
Brokers/Agents (f) others (Please Specify------------------------------------)

Q.13You Prefer:

(a)Open Ended Scheme (b) Close Ended Scheme (c) Interval Scheme

Q.14How much of your income you able to save:

Below 5% 5-10% 10-15% 15-20% 20-25% ABOVE 25

Q. 15Rank following factors that you consider while selecting a scheme:

a) Scheme Qualities like track record, fund size, entry load etc.

b) Fund Manager Experience

c) Investor Services like disclosure of NAV, A/C statements.

d) Marketing of funds through bill boards, relatives, friends, brokers etc.

Q.16.Any Suggestion for SBI Mutual Funds: (Please mention it)

PERSONAL DETAILS:

NAME: TEL.NO:

1. SEX:M F

2. AGE: Below 30 31-40 41-50 Above 50

3. ACADEMIC QUALIFICATION: Graduate Post Graduate Professional

Others(Please Specify---------------------------)

4. Marital Status: Married Unmarried

5. Occupation: Professional Salaried Business Retired

Others--------------------

6. Annual Income: Less than 2,00,000 2,00,001-5,00,000 5,00,001-10,00,000

Above10lakh

7. Area: East LKO West LKO NorthLKO South LKO

Others……………….
SIGNATURE