ANALYSIS AND STUDY OF THE MUTUAL

FUND INDUSTRY

PREPARED BY

SHASHANK NUTI
80303180133

Vivek raj
80303180147

Anup reddy
80303180152

Vaybhav shetty
80303180178

Arsh prit singh

80303180183
CONTENTS

 FINANCIAL SERVICES INDUSTRY

 MUTUAL FUND INDUSTRY
 KEY PERFORMANCE INDICATORS
 VALUE CHAIN ANALYSIS
 PORTERS 5 FORCES MODEL
 HDFC AMC
 MARKETING ANALYSIS
 SWOT ANALYSIS OF HDFC AMC
 ANSOFF MATRIX OF HDFC AMC
 ADITYA BIRLA SUN LIFE AMC
 MARKETING MIX (7 P’S)
 ADVERTISING STRATEGIES
 BCG MATRIX OF ADITYA BIRLA SUN LIFE AMC
 SBI MUTUAL FUND
 MARKETING ANALYSIS
 COMPARISION WITH INDUSTRY STANDARDS
 BCG MATRIX OF SBI MUTUAL FUND
 SWOT ANALYSIS OF SBI
 CONCLUSION & FUTURE SCOPE
 FINANCIAL SERVICES INDUSTRY

Companies in the financial services industry are in the business of managing money. Globally,
the financial services industry leads the world in terms of earnings and equity market
capitalization. Large conglomerates dominate this sector, but it also includes a diverse range
of smaller companies.

Commercial banking services are the foundation of the financial services group. The operations
of a commercial bank include the safekeeping of deposits, issuance of credit and debit cards,
and the lending of money.

An investment bank typically only works with deal makers and high-net-worth clients, not the
general public. These banks underwrite deals, secure access to capital markets, offer wealth
management and tax advice, advise companies on mergers and acquisitions, and facilitate the
buying and selling of stocks and bonds. Financial advisors and discount brokerages also
occupy this niche.
Hedge funds, mutual funds and investment partnerships invest money in the financial markets
and collect management fees in the process. These organizations require custody services for
trading and servicing their portfolios, as well as legal, compliance and marketing advice. There
are also software vendors that cater to the investment fund community by developing software
applications for portfolio management, client reporting and other back office services.

Private equity funds, venture capital providers and angel investors supply investment capital to
companies in exchange for ownership stakes or profit participation. Venture capital was
especially important to tech firms in the 1990s. Much of what goes on behind the scenes in the
making of big deals is attributed to this group.

Insurance is another important subsector of the financial services industry. In the United States,
an insurance agent differs from a broker. The former is a representative of the insurance carrier,
while the latter represents the insured and shops around for insurance policies. This is also
the realm of the underwriter, who assesses the risk of insuring clients and also advises
investment bankers on loan risk. Finally, reinsurers are in the business of selling insurance to
the insurers themselves to help protect them from catastrophic losses.

The vast financial services sector also includes accountants and tax filing services, currency
exchange and wire transfer services, and credit card machine services and networks. It also
includes debt resolution services and global payment providers such as Visa and Master card,
as well as exchanges that facilitate stock, derivatives and commodity trades.
 MUTUAL FUND INDUSTRY

The term mutual funds refer to a pool of money accumulated by several investors who aim at
saving and making money through their investment. The corpus of money so created is invested
in various asset classes’ viz. debt funds, liquid assets and the like. Just like gains and rewards
earned over the period of investment, losses are also shared by all the investors in equal
proportion, i.e. in accordance with their proportion of contribution to the corpus.

Mutual funds are registered with SEBI that regulates security markets prior to the collection of
the funds from the investors. Investing in mutual funds can be as simple buying or selling
stocks or bonds online. Moreover, investors can sell out their shares whenever they want or
need.
In India, mutual fund is a sunrise industry with huge potential. Mutual fund industry AUM has
grown at a rate of 25 percent, from Rs 7 lakh crore in 2013 to Rs 21.4 lakh crore (as of March
2018), during the last five years. AUM of equity funds have grown at a rate of 37.3 percent,
which is 1.5 times the industry growth. Accelerated growth in equity is the result of retail
investors entering the market. As per CRISIL, mutual fund industry revenues and profits are
expected to grow at a rate of 25 percent in next 5 years, fuelled by higher equity inflows.

KEY PERFORMANCE INDICATORS:

ALPHA:
Alpha is the measure of a portfolio’s return versus a specific benchmark, adjusted for risk. The
most common benchmark in use – and the one you can assume is used unless otherwise noted
– is the S&P 500. An investment with an alpha greater than zero has provided more return for
the given amount of risk assumed. A negative alpha – less than zero – indicates a security
which has underperformed the benchmark; it has earned too little for the risk assumed.
Investors typically want investments with high alphas.

BETA:

Beta is the measure of an investment’s volatility to another market index, such as the S&P 500.
Volatility indicates how likely a security is to experience wide swings in value. If beta is 1.0,
the investment moves in sync with the S&P or experiences a measure of volatility similar to
the S&P. If beta is positive, the investment moves more than the index; if negative, the
investment is less volatile than the index. For example, a beta of 2.0 projects a movement two
times that of the market. Assuming a market price change of 15%, the investment could move
30% up or down. Conservative investors typically prefer investments with low betas to reduce
volatility in their portfolios.
R-SQUARED VALUE:

The R-squared value is a measurement of how reliable the beta number is. It varies between
zero and 1.0, with zero being no reliability and 1.0 being perfect reliability.

The two charts illustrate the variability of return for two funds compared to the volatility of the
S&P 500 in the same period. Each y-value represents a fund’s returns plotted against the S&P
500 returns (x-values) in the same period. The beta, or the line created by plotting these values,
is the same in each case. This suggests that the correlation between each fund and the S&P 500
is identical. However, closer examination indicates that the beta in the second chart is far more
reliable than the beta in the first chart as the dispersion of the individual returns (x) is much
tighter. Therefore, the R-squared value is higher for the fund in second chart.

STANDARD DEVIATION

While beta typically measures an investment’s movement against an index such as the S&P
500, standard deviation measures the volatility of an investment in a different way. Instead of
comparing the investment’s return to a benchmark, standard deviation compares an
investment’s individual returns (for example, the closing price each day) over a specific period
relative to its average return over the same period. The more individual returns deviate from
the investment’s average return, the higher the standard deviation.
An investment with a standard deviation of 16.5 is more volatile than an investment with a
standard deviation of 12.0. According to Morningstar Ratings, the standard deviation for the
S&P 500 has been 18.8 for the last five years.

SHARPE RATIO

Developed by Dr. William Sharpe, professor at the Stanford Graduate School of Business and
one of the recipients of the Nobel Prize for his contribution to the capital asset pricing model,
the Sharpe volatility ratio is a measure of a portfolio’s return versus a risk-free return. The risk-
free return most often used is the interest rate on a three-month U.S. Treasury bill.

The underlying premise is that an investor should receive a higher return if he assumes more
volatility in his portfolio. Theoretically, the higher the ratio, the stronger the portfolio’s return
has been relative to the risk taken. A ratio of 1.0 indicates that the return was what should be
expected for the risk taken, a ratio greater than 1.0 is an indication that the rate was better than
expected, and less than 1.0 is an indication that the return did not justify the risk taken.
Refinements of return to volatility ratios include the Sortino ratio, the Treynor ratio, and the
Modigliani risk adjustment performance measure (RAP).

CAPTURE RATIOS

Capture ratios, or the percent of broad market moves over a specified term reflected in a
portfolio, are intended to be a simpler way to reflect a portfolio manager’s performance. For
example, if the S&P 500 has moved upward 20% while the portfolio being managed has
increased 25%, the portfolio has captured more gains than the market move and would have a
ratio of 1.25 (25%/20%), an upside capture ratio. If the market falls by 20% and the portfolio
drops 25%, the downside capture ratio would also be 1.25, indicating that the portfolio has
underperformed the market for the period. Generally, investors would prefer a fund with an
upside capture ratio in rising markets greater than 1.0 and a downside capture ratio less than
1.0.
INDEPENDENT RATINGS

Companies such as Lipper and Morningstar have proprietary rating systems to rate mutual
funds on a risk-adjusted performance basis. Morningstar uses stars and gives a five-star rating
to the top 10% of funds within a fund category. Lipper provides a variety of different ratings
depending upon the investor’s goal – total return, consistent return, and others. There are a
variety of other proprietary ranking services in common use as well, such as Zacks (used by
Yahoo! Finance) and The Street. Credit rating services such as Standard & Poor’s and Moody’s
analyse and rank companies on their creditworthiness.

ANALYSIS

Astute investors understand that there is no single ratio or measure that is reliable all of the
time, nor any rating company whose advice and analysis is always correct. Checking analysis
and rankings with multiple sources is a requirement of intelligent investing and a process which
should never be omitted in determining which stocks to invest in.
 VALUE CHAIN ANALYSIS

 Retailer: He is the final customer of the fund houses. He/she invests money in various
schemes which is providing by the relationship manager or the dealers of the fund
houses which may be banks also.
 Fund Houses: In fund houses the schemes of various funds have been prepared by the
fund managers. Fund houses have been tied up with various educational and
technological institute for getting skilful manpower.
 Stock Market: The performance of various funds is dependent upon the performance
of the stock market. The stock market is being regulated by the SEBI, so as at some
extend the mutual industry is. However, the main regulatory authority for mutual funds
is AMFI (Association of mutual funds industry)
 PORTER’S 5 FORCES MODEL

a) Bargaining power of suppliers:

Suppliers of AMCs are the investors who invest their surplus money in mutual funds
who would like to invest in shares but who do not possess either market knowledge or
adequate funds for diversified investment to spread the risk and who cannot withstand
the volatility of capital market.
 Nature of the supplier: No individual supplier is large enough to have control
over AMCs. Each supplier is investing a very nominal percentage in AMCs.
Therefore, the bargaining power of suppliers is less.
 Fewer alternatives: Suppliers in mutual funds are those who take low to
moderate risk. The other investment option which offers similar services like
professional guidance, diversified investment option, liquidity, choice of
schemes, flexibility, convenience of investment is very limited, which in fact
lowers the bargaining power of the suppliers.
 Suppliers are not concentrated: Existence of numerous investors with
negligible portion of surplus money to invest lowers their bargaining power.
 Even the investment made by financial institutions or high net worth individuals
is less than 5% of the total investment.
 Forward integration: Forward integration is not possible which will further
reduce the bargaining power of suppliers.

b) Bargaining power of customers

Customers of AMCs are the companies in whose shares and debentures/bonds the
AMCs invest their money for making profits. The bargaining power of customers is
less due to the following reasons.
 Large number of companies: Existence of large number of companies in
which AMCs can invest and other multiple investment options available for
AMCs lowers the bargaining power of the customers.
 Low switching cost: Switching from one company to another by an AMC can
be easily carried out without much loss of time and money which also lowers
the bargaining power of customers.
 Full information about the market: AMCs are headed by fund managers
assisted by a research team with expertise knowledge about the market and
about the economy. This enables the fund managers to find out the most
profitable and growth-oriented companies and invest their money. Non
dependent on one or few companies by fund managers lowers the bargaining
power of the customers.

c) Rivalry among competitors

Intense rivalry is found in case of mutual fund industry all over the world including
India. Many public and private players including foreign players are operating in the
industry fighting for the same pie. These players are coming up with highly innovative
products and try their level best to attract the investors towards them. Factors
contributing to increase in rivalry are:
 Number of players: Many banks sponsored, public and private players
including foreign players operating in the market fighting for the same pie has
intensified the competition.
 High growth rate: Indian mutual fund industry is going through the growth
phase of its life cycle characterised by high growth rate.
  Low switching cost: Investors switching cost is low. The investors can easily
switch from one scheme to another and from one AMC to another without much
loss of time and money. This has intensified the competition among rivals to
retain the investors.
 Undifferentiated products: Almost all players in the industry offer products
with same or similar features. Each AMC tries to copy each other’s products
which have intensified the competition.

d) Threat of new entrants

Free entry into the market is another important feature of Indian mutual fund industry:
The market is open for everybody. Low barriers to entry, supportive government
policies for the entry of new firms, lack of economies of scale to the existing players,
low switching cost and very less or no product differentiation paves way for new
entrants into the market. Hence, the threat of new entrants into the market is high in
case of Indian mutual fund industry.

e) Threat of substitutes
Substitutes like most innovative banking products, Government securities and other
investment options pose a high threat to mutual fund industry. Substitute product
qualities as well as performance are equal to or greater than the mutual funds. Low
switching costs for investors from mutual fund to other better avenues of investment
and availability of other innovative substitute products augment the threat to mutual
fund industry.
 HDFC AMC

HDFC Asset Management Company Ltd. is privately owned investment manager. This firm
manages equity, fixed income, and balanced mutual funds for its clients. The firm manages
equity, fixed income, balanced and real estate portfolios. It also manages hedge funds for the
clients. HDFC AMC invests in equity and fixed income markets. It employs fundamental
analysis to make its investments.

Incorporated in 1999, HDFC Asset Management Company (AMC) is a joint venture between
Housing Development Finance Corporation Limited (HDFC) and UK-based Standard Life
Investments Limited (SLI). SLI is an indirect subsidiary of Standard Life Aberdeen plc., which
is one of the world's largest investment companies. HDFC AMC has been the most profitable
AMC in India since 2013. Moreover, it has the largest equity asset under management (AUM)
among all the AMCs in India since last quarter of 2011. It is the second largest AMC in India.

As of March 2018, it has an AUM of Rs 3 lakh crore (quarterly average basis including
portfolio management services portfolio of Rs 6,400 crores) and a market share of 13 percent.
As of March, 2018, it managed a total of 133 schemes which included 27 equity-oriented funds,
98 debt funds, 3 liquid funds and 5 other funds (exchange traded funds and fund of funds).

It operates through 209 branches (including a representative office in Dubai) and 65,000
distribution partners across India. During the last five years, its revenues and profits have
grown at a rate of 19 percent and 18 percent respectively.
 MARKETING ANALYSIS OF HDFC AMC

Better asset mix aided strong Q1 earnings

Thanks to better asset mix, Q1 saw 21 percent revenue growth, almost keeping in pace with
AUM growth. Growth in total operating expenses was controlled at 12 percent, aided by muted
distribution costs. As a result, core operating profit growth stood at 29 percent YoY. The
market share of 16 percent in actively managed equity-oriented funds makes it the industry’s
most profitable AMC.

Granularity of asset book provides comfort

HDFC AMC continues enjoying the highest share of individual customers. The AMC added
1.88 million individual accounts in the last one year, taking total live individual accounts to 8.4
million as at June-end. As a result, 62.4 percent of the AMCs total monthly average AUM is
contributed by individuals compared to 52 percent for this industry. This is encouraging as
flows from individual customers are relatively sticky. Also, individual investors favour equity
schemes, which generate higher investment management fees compared to the debt schemes.
The current monthly flows through systematic investment plans (SIP) stood at Rs 1,164 crore.
Around 65 percent of SIP has a tenure of more than 10 years, adding to predictability and
visibility in AUM growth.
Well diversified distribution channel

The AMC enjoys HDFC Bank’s distribution channel. However, HDFC Bank’s contribution is
limited to 9 percent of the total AUM as at June-end as the AMC has extensive multi-channel
sales and distribution network comprising of other banks, national distributors and independent
financial advisors (IFAs). The direct channel contributes 36 percent of total AUM, which is the
testimony of HDFC AMC’s strong brand.
The AMC is well placed with 134 out of its total 210 branches located in beyond top 30 cities,
referred as B30 cities. B30 locations are expected to drive the future growth as mutual fund is
a largely under-represented investment class in such places.

Rich valuations but a long-term compounder

The mutual fund industry in a sweet spot with multiple growth levers. The gradual but steady
shift of household savings away from physical to financial assets and increasing share of
mutual funds within financial savings are key catalysts of future growth. HDFC AMC is best
positioned in the investment management space with its strong and trusted brand recall;
favourable asset mix, with leading position in equity business; expanding distribution network;
and experienced management.

The AMC delivered great listing gains as the stock listed at a 58 percent premium to its issue
price earlier this month. Following the strong price performance since listing, with stock
gaining over 60 percent over the issue price, near term upside to the stock price looks limited.

Valuations are definitely rich since the AMC is trading at 13 percent of its trailing AUM and
35 times FY20e earnings. On a relative basis, HDFC AMC is valued at more than 50 percent
premium to its closest peer. This does not come as a surprise. Like to most of HDFC group
companies, AMC also commands a relative premium valuation purely stemming from its brand
and consistency in performance.

Given HDFC AMC’s best-in-class return ratios with return on equity (RoE) above 40 percent
and future growth levers, premium valuations will withstand and expect the stock to be a long-
term compounder. Investors looking for high quality business, with consistent earnings growth,
may look to utilise contrary market volatility, if any, as an opportunity to add to the stock.
 SWOT ANALYSIS

STRENGTH

• Consistent market leadership position in the Indian mutual fund industry.

• Trusted brand and strong parentage.

• Strong investment performance supported by comprehensive investment philosophy and risk

management.

• Superior and diversified product mix distributed through a multichannel distribution network.

• Focus on individual customers and customer centric approach.

• Consistent profitable growth.

• Experienced and stable management and investment teams.

WEAKNESS

• Decrease in AUM and investment management and advisory fee: The schemes that are
managed primarily invest in equities and fixed income securities. Any decline in the Indian
equity or debt markets would impair the scheme’s performance, reduce net inflows and cause
our AUM to decline.

• Accelerated customer redemptions and withdrawals: In periods of volatile or adverse market

conditions, the firm may experience accelerated customer redemptions or withdrawals if
customers move assets to investments they perceive as offering greater opportunity or lower
risk, including to competitor funds.
OPPORTUNITY

• Low financial literacy and lack of awareness, unless addressed properly, will inhibit the
industry’s growth.

• Competition from another financial instrument

• Products offered by insurance companies, such as unit-linked investment products (“ULIPs”),

also compete with mutual funds for market share. ULIPs are market linked products that
provide the dual benefits of protection and long-term savings.

• Retail expansion at a reasonable cost.

THREAT

• Market risk is the risk that the value of an investment will decrease due to changes in market
factors.

• These factors could include global and domestic economic environment, outlook of corporate
sector performance, financial market conditions in general and other factors beyond our
control.

• Credit risk or default risk, risk of inability of an issuer to meet its principal and interest
payments as per its obligations.
 ANSOFF MATRIX OF HDFC AMC

Market Product
Penetration Development
HDFC Equity Fund
HDFC Debt or Income
Fund HDFC fixed maturity
Plan
HDFC retirement
saving Fund HDFC liquid Fund

Market
Development Diversification
HDFC children gifts
Fund
HDFC dual advantage
HDFC exchange
Fund
traded Fund

Market Penetration

Maintain or increase the market share of current products – this can be achieved by a
combination of competitive pricing strategies, advertising, sales promotion and perhaps more
resources dedicated to personal selling

In case of mutual funds, the market entirely depends on the equity market, and also the past
performance of funds in terms of their return.

In mutual funds to penetrate market you need excellent sales force to capture all the uncovered
areas of the market.

A market penetration marketing strategy is very much about “business as usual”. The business
is focusing on markets and products it knows well. It is likely to have good information on
competitors and on customer needs. It is unlikely, therefore, that this strategy will require much
investment in new market research.
Market Development

New geographical markets; targeting 3 -tier and 4-tier cities. Potentially mutual funds are
targeted to metro cities but an excellent marketing strategy is that to go for the virgin territories
where there are potential customers and they are not tapped.

Promotional strategy should not be focused only on the existing customers but to those who
can be your potential customers. The best way to do this is to educate the mass about the equity
and debt market. It can be done by distributing pamphlets’ and giving articles in newspapers.

Product development

Product development is the name given to a growth strategy where a business aims to introduce
new products into existing markets. This strategy may require the development of new
competencies and requires the business to develop modified products which can appeal to
existing markets. If we compare the Indian market the market is very huge in terms of
population and talking about money and savings per person, Indian market is still in
introductory stage.

In terms of new product development mutual fund industry is very sensitive as the whole set
up entirely depends on the equity market and the asset management company should be
continuously looking for potential sectors which are doing good and will continue to do well
in the future (for ex. infrastructure, natural resources).

Diversification

Diversification is the name given to the growth strategy where a business markets new products
in new markets this is an inherently more risk strategy because the business is moving into
markets in which it has little or no experience, for a business to adopt a diversification strategy,
therefore, it must have a clear idea about what it expects to gain from the strategy and an honest
assessment of the risks.

We can take case of mutual funds the product is familiar to big cities and all the companies are
serving a niche market. but to diversify into new markets they need an aggressive promotional
strategy and also more emphasis should be given to buzz marketing (word of mouth).

 This concludes the analysis of HDFC AMC

 ADITYA BIRLA SUN LIFE AMC

Birla Sun Life Asset Management Company Ltd. (BSLAMC), the investment managers of
Birla Sun Life Mutual Fund, is a joint venture between the Aditya Birla Group and the Sun
Life Financial Services Inc. of Canada. The joint venture brings together the Aditya Birla
Group's experience in the Indian market and Sun Life's global experience.

Established in 1994, Birla Sun Life Mutual fund has emerged as one of India's leading
flagships of Mutual Funds business managing assets of a large investor base. Our solutions
offer a range of investment options, including diversified and sector specific equity schemes,
fund of fund schemes, hybrid and monthly income funds, a wide range of debt and treasury
products and offshore funds.

Birla Sun Life Asset Management Company has one of the largest team of research analysts
in the industry, dedicated to tracking down the best companies to invest in. BSLAMC strives
to provide transparent, ethical and research-based investments and wealth management
services.

ABSLAMC achieved the milestone of becoming India’s third largest mutual fund with a
quarterly AAUM of 2,67,739 Crore for the quarter ended March 2018. It grew faster than the
industry resulting in an improved 10.75% market share.
The domestic AAUM as on Q4 FY 18 of ABSLAMC expanded Year -on-year by 27% to
2,47,529 Crore.

Seeing a positive market for Mutual fund market, the company is expected to grow even at a
higher rate and AAUM (Average asset under management) is set to cross 3,00,000 crores in
the near future.
 MARKETING MIX(7P’s)

PRODUCT

 Mutual fund as a product is the investment, which the investors hold. The steps, which
are involved in the formulation of the schemes or product designing, are
conceptualisation, drafting, test marketing, approval and authorisation of the scheme.
Since mutual fund is a service, there is a little element of physicality. Physical evidence
is the Mutual fund documents and the statements that are received periodically.
 Mutual fund managers want to deliver good quality at a reasonable cost, but the
managers cannot make any promises about the future performance of the investment
since a mutual fund is not a consumer product with consistency of performance. There
are number of mutual fund schemes that are floating in the market.
 One mutual fund house deal in many schemes. The product line of the mutual fund
houses ranges from 30 to 300 schemes in India as market segmentation is done to cater
to all the specific investment demands of the customers. Market segmentation increases
product differentiation, limiting competition to the funds belonging to the same
category, while fund proliferation increases market coverage. It relies either on the
creation of many funds in order to hide the poor performers merging them into the best
ones.
 Sponsors of the mutual funds make efforts to differentiate their products and bring in
recognition of their brand names in the consumers as it leads to product identification
at the market place. It is seen that Mutual funds in India have been quite successful in
brand policy and brand identification.
PRICE

 Place or the marketing channel describes the groups of individuals and companies,
which are involved in channelizing the flow and sale of product and services from the
provider to the eventual customer. In mutual fund also there are channels broadly
defined as ‘direct’ or ‘indirect’.
 Direct channels involve the movement and sale of products directly between the
provider and the customer as in the traditional branch network, whereas in the case of
indirect channels product flows via intermediaries and middlemen. Traditionally
mutual fund has been via the branch network, but now different approaches are adopted.

PROMOTION

 With globalisation the entry of multinational corporations propelled due to which the
market changed into a buyers’ market and due to the sudden competition growth, the
domestic mutual fund industry was shaken. Promotional efforts should be stimulating
and motivating enough to generate interest in and promote a positive attitude towards a
Mutual fund house so that they will be considered favourably in comparison with the
competitors.
 As there are so many players in the Mutual fund Industry, to choose one mutual fund
over the other becomes very difficult for the investors. This has led the mutual fund to
follow aggressive promotional techniques. Besides leading National Dailies, funds
regularly advertise in business newspapers and magazines.

PRICING

 Price competition involves using low prices as a competitive tool to attract customers.
As the price of the mutual fund is dependent upon the price of the underlying shares.
Therefore, it is the distribution cost not the manufacturing cost in Mutual fund that
separates one competitor with another. One of the advantages of Mutual funds that it
discloses its entire fee charged.
PEOPLE

 Mutual fund marketers need to develop a high level of inter personal skills and
customer-oriented attitude in employees for the simple reason that employees in
services are the key to service experience. All employees in the mutual fund house have
an effect on the sale of the products. This is true of frontline a staff that has direct
control with customers; they provide the link between the Mutual fund and the
investors. To the investor they represent the Mutual fund company.
 Success of mutual fund is highly dependent upon the relationship of the investors with
the employees as there is a little difference between the products the different fund
houses are offering, it is mainly the commitment that a mutual fund house makes.

PHYSICAL EVIDENCE

 The allocation of greater amount of space in a mutual fund house is likely to have a
positive relationship between the company and the investors. Physical evidence also
means the offer documents and Mutual fund statements that the investors are provided
with.
 In order to have a better relationship with the investors, the statements should be
regular, easily understandable and all the facts should be mentioned in it.

PROCESS

Process means the process through which the investors’ money is invested in different schemes
and the returns are provided to them. The process should be less complex.

 The revision of schemes should not be a very frequent task as it leads to increase in
cost. The mutual fund houses make efforts to standardise the process. In order to
customise the process, so lot of different schemes are coming into market.
 ADITYA BIRLA ADVERTISEMENT CAMPAIGN
In an attempt to empower customers with the knowledge on mutual funds, Birla Sun Life Asset
Management Company, a part of Aditya Birla Financial Services (ABFS), and investment
manager for Birla Sun Life Mutual Fund, has launched a new campaign titled ‘Jaanoge Tabhi
Toh Maanoge’.

https://youtu.be/E4nWU4KCfI4

The first of the three television commercials open with three friends placing a meal order at a
restaurant. The waiter notes the order and, in his effort, to please the customers promptly adds
that he will get the order in two minutes. One of the friends is worried about this response and
asks the waiter whether the food has been made yesterday as he can serve it so quickly. He
then tells the waiter to take as much time as needed to get them food that is good and fresh.
The narrator or the ‘sutradhar’ seated at the next table overhears this conversation and speaks
to the viewers about how we believe that good food needs to be given time, whereas as we
never apply the same when it comes to mutual funds, where we are always in a hurry for quick
returns. The TVC closes with the protagonist highlighting the tagline, ‘Jaanoge Tabhi Toh
Maanoge’, urging viewers to visit https://www.jaanotohmaano.com to understand the
reality behind mutual funds.

JTTM is an investor empowerment programme that typifies the need of the hour. It provokes
people to reach out and know the facts about mutual funds for themselves, because we believe
that only self-realisation can create behavioural change.”JTTM is not a mere campaign. It is a
platform that we can own through time here after. The JTTM website which captures facets of
mutual funds now becomes the hub that we will continue to enrich with a lot of informative
nuggets, life facts and trivia to make it sticky with viewers.
 BCG MATRIX

Question Mark
Stars
Corporate Bond Fund
Savings Fund Dynamic Bond Fund
Medium Term Plan Floating Rate Fund
Credit Risk Fund Short Term Opportunities
Fund

Cash Cows
Dogs
Low duration Fund
Money Manager Fund
Income Fund
Banking and PSU debt
Fund Government securities
Fund

Characteristics of Each Quadrant

1. Dogs: If a company’s product has low market share and is in a low rate of growth market, it
is considered a “dog” and should be sold, liquidated, or repositioned. Dogs, found in the lower
right quadrant of the grid, don't generate much cash for the company since they have low
market share and little to no growth. Because of this, dogs can turn out to be cash traps, tying
up company funds for long periods of time. In the case of Aditya Birla, the segments of Income
funds and government securities fund can be considered as dogs as the growth in those
segments is negligible and these could become liabilities for the company in the future.

2. Cash cows: Products that are in low growth areas but for which the company has a relatively
large market share are considered “cash cows,” thus, the company should milk the cash cow
for as long as it can. Cash cows, seen in the lower left quadrant, are typically leading products
in markets that are mature. Generally, these products generate returns that are higher than the
market's growth rate and sustain themselves from a cash flow perspective. These products
should be taken advantage of for as long as possible. Low duration funds, money manager
funds, banking and PSU debt funds have large shares in the markets but the growth rate has
been on the decline in recent years due to saturation of these market segments. Aditya Birla
should generate maximum revenue possible from these segments.

3. Stars: Products that are in high growth markets and that make up a sizable portion of that
market are considered “stars” and should be invested in more. In the upper left quadrant are
stars, which generate high income but also consume large amounts of company cash. Corporate
bond funds, savings fund, medium term plan and credit risk funds are the present stars of Aditya
Birla Sun Life AMC. These segments have a healthy growth trajectory and are the primary
income generators for the company. These segments have the potential to turn into cash cows
for the company provided they can maintain their relatively large market share until they
become mature.

4. Question marks: Questionable opportunities are those in high growth rate markets but in
which the company does not maintain a large market share. Question marks are in the upper
right portion of the grid. They typically grow fast but consume large amounts of company
resources. Products in this quadrant should be analysed frequently and closely to see if they are
worth maintaining. Dynamic bond fund, floating rate fund and short-term opportunities funds
come under this category. These have the potential to become stars for the company. For this
to happen, Aditya Birla should monitor these markets closely, plan strategically and seize the
presented opportunities.

 This concludes the analysis of Aditya Birla Sun Life AMC

 SBI MUTUAL FUND

SBI Mutual Fund is a bank sponsored fund house with its corporate headquarters in Mumbai,
India. It is a joint venture between the State Bank of India, an Indian multinational Public sector
banking and financial services company and AMUNDI, a European asset management
company

It is launched in 1987. SBI Mutual Fund became the first non-UTI mutual fund in India with a
vision “To be the most preferred and the largest fund house for all asset classes, with a
consistent track record of excellent returns and best standards in customer service, product
innovation, and technology and HR practices.” SBI Funds Management Services

It provides services in Mutual funds, Portfolio Management and Advisory Services, Offshore
Funds, Alternative Investment Funds (AIF)

Mutual Funds

The organization’s mission has been to establish Mutual Funds as a viable investment option
to the masses in the country. Working towards it, they developed innovative, need-specific
products and educated the investors about the added benefits of investing in capital markets via
Mutual Funds.

Portfolio Management and Advisory Services

SBI Funds Management has emerged as one of the largest player in India advising various
financial institutions, pension funds, and local and international asset management companies
and excelling by understanding the investor's requirements and terms of risk / return
expectations. They provide an integrated end-to-end customized asset management solution
for institutions in terms of advisory service, discretionary and non-discretionary portfolio
management services.
Offshore Funds

SBI Funds Management has been successfully managing and advising India's dedicated
offshore funds since 1988. SBI Funds Management was the 1st bank sponsored asset
management company fund to launch an offshore fund called 'SBI Resurgent India
Opportunities Fund' with an objective to provide the investors with opportunities for long-term
growth in capital, through well researched investments in a diversified basket of stocks of
Indian Companies.

Alternative Investment Funds (AIF)

SBI Funds Management Private Limited offer alternate asset investment products through
Alternative Investment Funds. They launched their first alternative investment fund in 2015
and more funds are on the anvil as the space is still nascent and a lot of opportunities exist.

SBI MUTUAL FUND MARKETING ANALYSIS AND ITS

COMPARISON WITH INDUSTRY STANDARDS

The important marketing strategies that are to be followed in the industry are mentioned and
the marketing and distribution strategies followed by SBI Mutual Funds in the present are
mentioned against the industry standards that are to be followed as mentioned in the reports by
PwC.

There is immense scope for the unprecedented growth of the industry and this can be rooted
back to innovative and efficient use of technology. With increasing competition in this space,
it is imperative that funds are prepared for investment in technology to both widen customer
base as well as operate efficiently.
Customer Relationship Management technologies

Customer Relationship Management (CRM) primarily aids in getting an overall perspective

of the customer or partner. CRM helps in drawing increased revenues from customers as it
allows for the utilization of available customer information to sell product suites across
segments. CRM also allows for fund houses to improve business processes and drive efficiency
based on customer feedback.

SBI Mutual Fund CRM

SBI Mutual Funds use the latest technological devices like mobile phone, tablets and social
media platforms to maintain a good customer relationship with its customers.

Digital strategy enabling sales channels with mobiles or tablets

The rapid growth of usage of mobiles and tablets offers an opportunity to empower sales
channels to reach markets with less penetration. This can be especially effective for value added
services such as Portfolio Management Services. Enabling salespersons with mobiles or tablets
takes the POS to the customer allowing for faster business deals. Salespersons are able to
capture business critical information, store it in a central secure place (the cloud) and can access
it from their devices. They can complete the deal using a tablet, starting from educating
customers about products, capturing information and signatures as well. Increased accessibility
to mobile phones and the internet in Tier II and Tier III cities can be used as a platform to
educate consumers regarding products and its benefits.

SBI Mutual Fund Digital Strategies

SBI Mutual Fund has launched SBI Fund Guru, a unique, pan-India, multi-lingual multi-media
investor education campaign, considered to be the first in the asset management industry. SBI
Fund Guru aims to reach out to its diverse and ever-increasing investor base, especially in Tier
II, Tier III cities, in an effort to create increased awareness and also demystify the nuances of
investing in Mutual Funds.

SBI Mutual Fund has also created a microsite wherein, the SBI Fund Guru in his own inimitable
and affable manner, in a series of animated edutainment TV commercials, each in nine
languages, would explain using simple analogies, the essence behind oft used jargons like SIP,
Asset Allocation, ELSS, online investing while debunking popular myths about equity/debt
funds. The videos would also be aired in different new age sites including YouTube.

The features of Fund Guru are as follows:

 Mutual Fund Basics

 MF Knowledge Series
 Tips and auricles
 Quick Takes
 Mutual Fund Videos
 Mutual Fund InfoGraphic
 Fun with Mutual Fund
 Mutual Fund FAQs

Social media as a new marketing platform

Social media cannot replace face-to-face communication, it can enhance the overall customer
experience and create new sales and servicing opportunities. Social media is a huge opportunity
to create awareness about products and connect with the youth today. It’s a misnomer that
social media is yet another marketing platform for fund companies. From a customer-facing
perspective, social media can definitely enhance and protect your corporate brand reputation.

SBI Mutual Fund Social Media Platforms

The campaign of Fund Guru also aims to be a category enhancer attracting younger generation
towards Mutual Funds, through its focused strategy of engaging them on social media channels.

SBI Mutual Funds have its presence on social media platforms like Facebook (523155
followers), YouTube (17456 subscribers), LinkedIn (24317 followers), Instagram (1593) and
Twitter (26,400 followers) which is helping the organization in creating awareness about
products and create new sales and servicing opportunities.
Investor Awareness

Since AMCs realized that they need to invest in financial education and awareness in order to
reap long-term benefits, campaigns to educate the customer have picked up momentum as fund
houses try to bring novelty to the way they connect with their target customers. While the aim
is educating the customers and making them aware of mutual funds as an investment vehicle;
at times opportunities also arise where these customers show an interest in purchasing these
products.

SBI Mutual Fund Investor Awareness Program

SBI Mutual Fund conducts an Investor Awareness Program in collaboration with Association
of Mutual Funds in India (AMFI) on a regular basis in different cities across the country
throughout the year.

The company thrives to educate the investors and helping them make informed about the
investment options. SBI Mutual Fund also present a series of Investor Training camp at various
locations across the country. These camps would be a great opportunity for general public to
know more about the merits of investing, and various other issues pertaining to investments.

After analysing the marketing analysis of SBI Mutual Funds, it has been understood that the
organization is on par with the industry requirement s and standards in term of marketing its
products and hence the company is successful in maintaining a good position in the market.
 BCG MATRIX OF SBI MUTUAL FUNDS

Stars
SBI Focused Equity
Question Mark
Fund SBI ETF Gold
SBI small cap Fund SBI Liquid Fund
SBI Contra Fund SBI Savings Fund
SBI Magnum Taxgain SBI overnight Fund
Fund

Cash Cows
Dogs
SBI Technology
Opportunities Fund SBI ETF Sensex Nifty
50
SBI ETF Sensex
SBI Gold Fund
SBI ETF Nifty Bank
SBI PSU Fund
SBI Bluechip Fund
SBI ETF Quality

SBI mutual funds has a total of 51 products. As it is not feasible for us to mention and analyse
all the 51 products, we have taken only selected products and analysed them. This analysis can
give a brief idea about the trends and current scenario of the products and segments on a macro
level.

Characteristics of Each Quadrant

1. Dogs: In the case of SBI Mutual funds, the segments of SBI ETF Sensex Nifty 50,
gold funds, PSU funds and ETF quality can be considered as dogs as the growth in those
segments is negligible and these could become liabilities for the company in the future.

2. Cash cows: These products should be taken advantage of for as long as possible. SBI
Technology Opportunities Fund, ETF Sensex, ETF Nifty bank and blue-chip funds have
large shares in the markets but the growth rate has been on the decline in recent years
due to saturation of these market segments. SBI should generate maximum revenue
possible from these products.
3. Stars. SBI Focused Equity fund, Small cap fund, maximum tax gain fund and
Magnus Tax gain funds are the present stars of SBI Mutual Funds. These products have
a healthy growth trajectory and are the primary income generators for the company.
These have the potential to turn into cash cows for the company provided they can
maintain their relatively large market share until they become mature.

4. Question marks: ETF gold, Liquid funds, savings fund and overnight funds come
under this category. These have the potential to become stars for the company.

SWOT ANALYSIS

STRENGTHS

SBI mutual fund is a sponsored by State Bank of India which is the more than the 200 years
old, largest lender in the country and having a massive network of over 13000 branches in India

 Wide reach:

SBI mutual fund have a strong distribution network through its association banks over 13000
branches of State Bank of India, over 2000 branches of association banks and distribution of
SBI mutual fund products giving a big space and visibility for the products of SBI mutual
funds.

 Services:

As services place a dominant role in a financial product, SBI mutual funds provides standard
services throughout its branches located in over 445 cities.

 Brand image:

It operates a multi-brand strategy. The company operates under numerous well-known brand
names, which allows the company to appeal to many different segments of the market.

 Distribution channel strategy:

SBI is continuously improving the distribution of its products. Its online and Internet-based
access offers a combination of excellent growth prospects.
  SBI Mutual Fund has separate Fund Managers for each scheme

WEAKNESS:

Even in good times, expenses are a drag on investor return, and they will be more difficult to
accept if the performance declines. As a small-cap fund gets bigger, for example, it will have
a hard time finding growth opportunities for all of its assets and may have to close or expand
outside of its stated objective.

 Downward trend in the equity market adversely affect the company.

 The investment return is limited to the skill of the manager.

OPPORTUNITIES

Investors Penetration and awareness (through on-ground investor engagement campaigns

by AMFI, AMCs and distributors) in Tier II, Tier III cities and rural markets is expected to
increase, leading to expansion of the retail investor base and hence, a greater share of the AUM
from the retail segments

Structural shift from “transaction-led” pricing model to an “advisory-led” pricing model has
been initiated by the regulator; tiered pricing models based on the relationship value are likely
to evolve further. Emerging distribution channels based on online and mobile platform are
expected to gain further prominence

THREATS

Threats are from the private companies which are leading in mutual funds and people believe
more in investing the mutual funds of private companies thinking that private firms perform
better and yield higher returns.

 Volatility can impact returns.

 This concludes the analysis of SBI Mutual funds

 Conclusion and Scope for the Industry

The Indian Mutual Fund industry has been growing leap and bounds over the past few years
and there is substantial data to prove that. In opinions of most experts, there is tremendous
scope for further escalation of this industry as the upper middle class grows and looks for means
of not just saving his cash, but increasing it through means of investments.

Of late, there have been changes in the political frame work of the nation which have affected
the country as a whole. While the effects of the changes may have been dampening for other
industries, these changes have certainly helped boost the Mutual Fund industry through
mobilization of funds.

In the present day, corporate investors account for around 43.44 per cent of total AUM in India.
High Net-Worth Individuals (HNWI) makes up 30.09 per cent and retail investors stand at
24.79 per cent. In the Asia-Pacific, India is among the top five countries in terms of HNWIs.

With increasing individual investors and failing competing industries, Asset Management
companies are making the most of the opportunities coming their way.

Future Scope

The future of Asset Management is seen in Robo-advisory. It is a model that is already gaining
traction. Robo-advisory presents ability to leverage big-data, and use of analytics, machine
learning to predict consumer behaviour and at the same time it aims to service customers.

Increasing focus on the value of goods and their economic value and with there being a
requirement for speedy advancement, one can predict that it would lead to automation in
manufacturing functions. This in turn will lead to COOs pushing wider adoption of automated
advisory and distribution solutions. This will be done in order to rationalize cost of workforce
expansion and customer acquisition. This transformation has already begun.

But it is yet to be known how the Indian Fund Managers would play against the “Deep Blue”