A PROJECT REPORT DISSERTATION OF STATE BANK OF INDIA ON INVESTMENT BEHAVIOUR ON SBI MUTUAL FUNDS (A study report on SBI) Submitted

in Partial fulfillment of the Requirement of Master of

Business Administration (MBA)

DOON BUSINESS SCHOOL

(Affiliated from Uttrakhand Technical University, Dehradun And Approved by AICTE)

Submitted By: Pradeep Kumar MBA IV Sem (2010-12)

Submitted To: Dr. A.K.Tomar Director Doon Business School

DECLARATION
I, Pradeep Kumar, the student of masters of business administration - semester IV (2010-12) hereby declare that I have completed this project on SBI

MUTUAL FUNDS & INVESTMENT BEHAVIOUR IN STATE BANK OF INDIA The information submitted is true & original to the best of my knowledge.

Pradeep Kumar

CERTIFICATE

This is to certify that Mr. Pradeep Kumar of Masters of Business Administration semester IV (2010-12) has successfully completed the project on SBI MUTUAL FUNDS & INVESTMENT BEHAVIOUR IN STATE BANK . OF INDIA under the guidance of

Course Coordinator

Director DOON BUSINESS SCHOOL SELAQUI, DEHRADUN

ACKNOWLEDGEMENT
Before we get into thick of things, I would like to add some words of appreciation for the people who have been a part of this project right from its inception. The writing of this project has been one of the significant academic challenges I have faced and without the support, patience, and guidance of the people involved, this task would not have been completed. It is to them I owe my deepest gratitude. It gives me immense pleasure in presenting this project report on SBI MUTUAL FUNDS & INVESTMENT BEHAVIOUR IN STATE BANK OF INDIA. It has been my privilege to have a team of project guide who have assisted me from the commencement of this project. The success of this project is a result of sheer smart work, and determination put in by me with the help of my project guide. I hereby take this opportunity to add a special note of thanks for Dr. Anirudh Kumar Tomar & also Ms. Divya Sabarwal & Ms. Sonika Saxena, who undertook to act as my mentor despite their many other academic and professional commitments, their wisdom, knowledge and commitment to the higher standards inspired and motivated me. I also feel heartiest sense of obligation to my best friend, who helped me through the project and also in processing. The project is dedicated to all those people, who helped me while doing this project.

Pradeep Kumar Date: 10-04-2012

PREFACE
This dissertation report is submitted for the partial fulfillment of MBA (Masters of Business Administration) degree from Doon Business School, Dehradun. In the emerging scenario with the constant growth and development of the economy, the saving and investment habits of an individual is changing. With the change in education profile of individuals the attitude and preference towards investment and saving has undergone a great change. Indian financial scene presents a plethora of avenues to the investors whereas mutual fund is amongst them. For those who are not apt at understanding the stock market, the task of generating superior returns at similar levels of risk is arduous to say the least. This is where mutual fund comes into picture. Thus the basic idea behind the emergence of mutual fund is to help those individuals and small investors, who lack the time, the skills to manage their own investments. Mutual funds are investment vehicles where people with similar investment objectives come together to pool their money and then fund manager invest this money into different assets to generate profits. Rising inflation, falling interest rates and a volatile equity make a deadly cocktail for the investors for whom mutual fund offer a route of the impasse. The investment in mutual Fund are not without risk because the same force such as regulatory framework, government policies, interest rates structure, performance of companies etc that rattle the equity and debt markets, act on mutual fund too. But it is the skill of managing risk that investment managers seek to implement in order to strive and generate superior return then otherwise possible that makes them a better option then others. In this project to study the buying behaviors of the mutual funds special reference of SBI mutual fund is taken. I have focused on the buying behavior of the customers amongst the different investment avenues as well as their awareness about mutual funds. I further gathered information regarding their performance. Also to analyze the satisfaction level of customers of it so that if some loop holes exits should be overcome to maintain its brand equity. I have done my study on Mutual Fund of State Bank of India.

CONTENT
DECLARATION CERTIFICATE ACKNOWLEDGEMENT PREFACE CONTENTS CHAPTER 1 EXECUTIVE SUMMARY OBJECTIVES LIMITATIONS CHAPTER 2 MUTUAL FUNDS HISTORY OF MF IN INDIA REGULATORY BODIES BENEFITS OF INVESTMENT KEY FINANCIAL TERMS ORGANIZATIONAL STRUCTURE CLASSIFICATIONS OF MF OPTIONS AVAILABLE TO INVESTORS RISK HIERARCHY RISK ASSOCIATED WITH MF INTRODUCTION 9 2 3 4 5 6 8

CHAPTER 3

COMPANY DETAILS

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PROFILE OF SBI MF SWOT ANALYSIS OF SBI MF VARIOUS EQUITY SCHEMES DEBT FUND BALANCED FUND SBI SCHEMES AT A GLANCE HOW TO INVEST IN A SCHEME SOME COMPETITORS OF SBI MF EISC PACKAGE FOR SBI MF

CHAPTER4

RESEARCH METHODOLOGY LIMITATIONS OF STUDY

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CHAPTER 5 CHAPTER 6 CHAPTER 7

DATA ANALYSIS &INTERPRETATION SYSTEMATIC INVESTMENT PLAN CONCLUSION FINDINGS SUGGESTIONS REFERENCES QUESTIONNAIRE

57 67 72 73 75 76 77

EXECUTIVE SUMMARY
OBJECTIVE:
An in-depth study of mutual funds and SBI mutual funds.

A study of different schemes offered by SBI Mutual funds.

To gain knowledge about the eISC package for MF operations.

A SWOT Analysis of the company SBI mutual funds. Finally to come to a conclusion along with recommendations.

LIMITATIONS:
There were certain limitations which were faced by me as a trainee. Lack of expertise being a trainee in analyzing data. Shortage of time. Study was done within the branch of SBI; therefore it does not cover a broad study of the other competitors.

INTRODUCTION
MUTUAL FUNDS

A Mutual Fund is a company that brings together money from many people and invests it in stocks, bonds or other assets.

Securities and Exchange Commission (SEC)

.Mutual funds are popular among all income levels. With a mutual fund, we get a diversified basket of stocks managed by a professional
-Barbara Stanny, author of How women get smart about money

A mutual fund is a professionally managed firm of collective investments that collects money from many investors and puts it in stocks, bonds, short-term money market instrumentsThe fund manager, also known as portfolio manager, trades the fund's underlying securities, realizing capital gains or losses and passing any proceeds to the individual investors. -Wikipedia

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MUTUAL FUNDS CAN GIVE INVESTORS ACCESS TO EMERGING MARKETS

A Mutual Fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are known as unit holders. The profits/losses are shared by the investors in proportion to their investments. The mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time. A mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public in India.

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HISTORY OF MUTUAL FUNDS IN INDIA

The history of Mutual Funds in India can be divided into 4 phases. First phase 1964-1987 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 The Reserve Bank. It was 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 management.
1987-88 Amount Mobilized UTI Total (Rs. Crores) 2,175 2,175

AMC (Rs. Crores) 6,700 6,700

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Second Phase 1987-1993 1987 was marked by the entry of non- UTI or 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 June 1987 followed by Canbank 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.

1992-93 Amount Mobilized UTI Public Sector Total (Rs. Crores) 11,057 1,964 13,021 Assets Under Management (Rs. Crores) 38,247 8,757 47,004

Third Phase 1993-2003 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 Regulations 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. In the year 1992, Securities and Exchange Board of India (SEBI) Act was passed. The objectives of SEBI are to protect the interest of investors in securities and to promote the development of and to regulate the securities market.

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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. 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.
Gross Amount Mobilized (Rs. Crores) 1998-99 11,679 1,732 7,966 21.377 1999-2000 13,536 4,039 42,173 59.748 Assets Under Management Rs. Crores 1998-99 53,320 (77.87%) 8,292 (12.11%) 6,860 (10.02%) 68.472 1999-2000 76,547 (67.75%) 11,412 (10.09%) 25.046 (22.16%) 113,005

UTI Public Sector Private Sector Total

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 Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations. 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. With recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth.

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GROWTH OF ASSETS UNDER MANAGEMENT

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REGULATORY BODIES
AMFI
The Association of Mutual Funds in India is the apex body of all the registered Asset Management Companies. It was incorporated on August 22, 1995 as a non-profit organization. As of now, all the 32 Asset Management Companies that have launched Mutual Fund schemes are its members. The objective of AMFI is to develop the Indian mutual fund industry on professional, healthy and ethical lines. It also aims to enhance and maintain standards in all areas with a view to protect and promote the interest of the mutual funds and its unit holders. AMFI interacts with SBI, RBI and the government on all matters concerning the mutual fund industry. It also provides training and certification to agent distributors and for all intermediaries and other engaged in the industry. AMFI is also widely active in promoting nationwide investor awareness programmes, research and studies to promote understanding of mutual funds.

SEBI
The Security Exchange Board of India, was shed in 1988 to regulate and develop the growth of the capital market. In the year 1992, SEBI Act was passed to protect the interest of investors and to promote the development of, and to regulate the securities market. As far as Mutual Funds are concerned, SEBI formulates policies and regulates the Mutual Funds to protect the interest of the investors. In 1993, SEBI notified regulations for Mutual Funds, the regulations were fully revised in 1996 and have been amended thereafter from time to time. SEBI also issues guidelines regularly to the mutual funds in order to protect the interests of investors.

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BENEFITS OF INVESTING IN MUTUAL FUNDS

1. 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. 2. DIVERSIFICATION Mutual Funds invest in a number of companies across a broad crosssection 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. 3. CONVENIENT ADMINISTRATION Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad deliveries, delayed payments and follow up with brokers and companies. Mutual Funds save your time and make investing easy and convenient. 4. 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. 5. LOW COSTS Mutual Funds are a relatively less expensive way to invest compared to directly investing in the capital markets because the benefits of scale in brokerage, custodial and other fees translate into lower costs for investors.

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6. LIQUIDITY In open-end schemes, the investor gets the money back promptly at net asset value related prices from the Mutual Fund. In closed-end 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. 7. 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. 8. AFFORDABILITY Investors individually may lack sufficient funds to invest in high-grade stocks. A mutual fund because of its large corpus allows even a small investor to take the benefit of its investment strategy. 9. CHOICE OF SCHEMES Mutual Funds offer a family of schemes to suit your varying needs over a lifetime. 10.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. The operations of Mutual Funds are regularly monitored by SEBI.

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KEY FINANCIAL TERMS

As a participant in a mutual fund scheme, following things are necessary to understand: 1. ASSET MIX The asset mix of a scheme refers to the allocation of the corpus of a scheme across three broad categories, viz., stocks, bonds, and cash. An asset mix of 60:30:10 mean that 60 % of the corpus is invested in stocks, 30 % in bonds, and 10 % in cash.

2. NET ASSET VALUE The net asset value (NAV) is the actual value of a share/unit on any business day. OR Net Asset Value is the market value of the assets of the scheme minus its liabilities. The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date. I.e. NAV = Market value of the funds investments + Receivables + Accrued income Liabilities Accrued expenses ______________________________________________ Number of shares or units outstanding

3. SWITCH & CONSOLIDATION Switch is when the units of a scheme are transferred to some other scheme. Whereas, consolidation means that two or more schemes are assigned the same folio number.

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4. SALES PRICE Is the price you pay when you invest in a scheme, it is also called Offer Price. It may include a sales load or an entry load. A closed-ended scheme has to be necessarily listed on a recognized stock exchange to ensure that its participants enjoy liquidity. Generally, the market price or sales price of a closed-ended scheme tends to be lower than its NAV. 5. REPURCHASE PRICE Is the price at which a close-ended scheme repurchases its units and it may include a back-end load. This is also called Bid Price. The mutual fund has to stand ready to repurchase and issue its units or shares on a continuing basis. 6. REDEMPTION PRICE Is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity. Such prices are NAV related. 7. SALES LOAD Is a charge collected by a scheme when it sells the units. Also called, Front-end load. Schemes that do not charge a load are called No Load schemes. 8. REPURCHASE OR BACK-ENDLOAD Is a charge collected by a scheme when it buys back the units from the unit holders.

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9. RATE OF RETURN The periodic (the period may be one month, one quarter, one year or any other) rate of return on a mutual fund scheme is calculated as follows: RATE OF RETURN = NAV at the end of the period NAV at the beginning of the period + Dividend paid during the period. _____________________________________ NAV at the beginning of the period 10. GROSS DIVIDEND YIELD The Gross Dividend Yield is an important indicator of the investment characteristics of a mutual fund. Among the equity funds, value-oriented funds tend to have a higher gross dividend yield and growth-oriented funds tend to have a lower gross dividend yield. The gross dividend yield is a reliable differentiator of a funds investment philosophy. 11. PORTFOLIO TURNOVER RATIO Portfolio Turnover represents the churn in the portfolio. It is measured as follows: Portfolio Turnover Ratio = Lower of purchase or sales during a given period _________________________________ Average daily net assets

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ORGANIZATIONAL STRUCTURE OF MUTUAL FUND

Sponsor Company (For eg. SBI MF)

Established MF as the trust Register the MF under SEBI

Managed by the board of trustee Hold unit holders fund in MF Enter into an agreement with SEBI and ensure compliance Float MF funds, Manages the fund as SEBI Guidelines and AMC agreement

Mutual Fund (for eg SBI mutual fund)

AMC (eg. SBI MF AMC)

CUSTODIAN

Provides custodial services

REGISTER

Provides registrar and transfer service Provides the network for distribution of the schemes to the investor

DISTRIBUTORS

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CLASSIFICATION OF MUTUAL FUNDS

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

1. 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.

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.

2. 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 proven 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.

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Income/Debt Oriented 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. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations.

Balanced Funds
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. They generally invest 40-60% in equity and debt instruments. These are ideal for investors looking for a combination of income and moderate growth.

Money Market Funds

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.

Load Funds
A Load Fund is one that charges a commission for entry or exit. That is, each time you buy or sell units in the fund, a commission will be payable. Typically entry and exit loads range from 1% to 2%. It could be worth paying the load, if the fund has a good performance history.

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No-Load Funds
A No-Load Fund is one that does not charge a commission for entry or exit. That is, no commission is payable on purchase or sale of units in the fund. The advantage of a no load fund is that the entire corpus is put to work.

3. 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 a deduction under the Income Tax Act, 1961.

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 industry or a group of industries or various segments such as 'A' Group shares or initial public offerings, . e.g. Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. While these funds may give higher returns, they are more risky compared to diversified funds.

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OPTIONS AVAILABLE TO INVESTORS

Each plan of every mutual fund has three options Growth, Dividend Payout and Dividend Reinvestment. 1. DIVIDEND PAYOUT Under the dividend plan dividend are usually declared on quarterly or annual basis. Mutual fundreserves the right to change the frequency of dividend declared. 2. DIVIDEND REINVESTMENT OPTION Instead of remittances of units through payouts, Units holder may choose to invest the entire dividend in additional units of the scheme at NAV related prices of the next working day after the record date. No sales or entry load is levied on dividend reinvest. 3. GROWTH OPTION Under this plan returns accrue to the investor in the form of capital appreciation as reflected in the NAV. The scheme will not declare the dividend under the Growth plan and investors who opt for this plan will not receive any income from the scheme. Instead of income earned on their units will remain invested within the scheme and will be reflected in the NAV.

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The following chart portrays the relative shares of the different fund categories of the mutual fund industry in India across the development phases discussed above.

1.4

RISK HIERARCHY OF MUTUAL FUNDS

Money Market Funds

Gifts Funds

Debts Funds

Hybri d Funds

Equity Funds Aggressive Funds

Flexible Asset Allocation Funds Growth funds Risk Level High Yield Debt Funds Diversified Equity Funds Index Funds Focused Debts Funds Growth and Income Funds Equity Income Funds Value Funds

Gilt Funds Money market Funds

Diversified Debt Funds

Balanced Funds

Type of fund
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RISK ASSOCIATED WITH MUTUAL FUNDS

Mutual funds and securities investment are subject to various risks and there is no assurance that a scheme objective will be achieved. These risks should be properly understood by investors so that they can understand how much risky their investment avenue is. Equity and fixed income bearing securities have different risks associated with them. Various risks associated with mutual funds can be described as below.

Risk associated with fixed income bearing securities are

Interest Rate Risk As with all the securities, changes in interest rates may affect the schemes Net Asset Value (NAV) as the prices of the securities generally increase as interest rates decline and generally decrease as interest rates rise. Prices of long-term securities generally fluctuate more in response to interest rates changes than short term securities do. Indian Debt markets can be volatile leading to the possibility of price movements up or down in the fixed income securities and thereby to the possible movements in the NAV. Liquidity or Marketable Risk This refers to the ease with which a security can be sold at near to its valuation yield to maturity. The primary measure of liquidity risk is the spread between the bid price and the offer price quoted by the dealer. Liquidity risk is inherent to the Indian Debt market. Credit Risk Credit risk or default risk refers to the risk that an issuer of fixed income security may default (i.e., will be unable to make timely principal and interest payments on the security). Because of this risk corporate debentures are sold at a yield above those offered on Government securities, which are sovereign obligations and free of credit risk. Normally the value of fixed income security will fluctuate depending upon the perceived level of credit risks well as the actual event of default. The greater the credit risk the greater the yield require for someone to be compensated for increased risk.

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Risk associated with equities

Market Risk The NAV of the scheme investing in equity will fluctuate as the daily prices of the individual securities in which they invest fluctuate and the units when redeemed may be worth more or less than the original cost. Timing the Market It is difficult to identify which is the right time to invest and which is the right time to take out the money. There may be situations where stocks may not be rightly timed according to the market leading to loss in the value of scheme. Liquidity Investment made in unlisted equities or equity related securities might only be realizable upon the listing of the securities. Settlement problems could cause the scheme to miss certain investment opportunities.

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How to know the performance of a mutual fund scheme?

The performance of a scheme is reflected in its net asset value (NAV) which is disclosed on daily basis in case of open-ended schemes and on weekly basis in case of close-ended schemes. The NAVs of mutual funds are required to be published in newspapers. The NAVs are also available on the web sites of mutual funds. All mutual funds are also required to put their NAVs on the web site of Association of Mutual Funds in India (AMFI) www.amfiindia.com and thus the investors can access NAVs of all mutual funds at one place. The mutual funds are also required to send annual report or abridged annual report to the unit holders at the end of the year. NAVs for a day must are posted on the AMFIs website by 8.00p.m. On that day, this applies to both the open end and close end schemes. One exception is that those close end schemes which are not mandatory required to be listed in any stock exchange may publish their NAV at monthly or quarterly intervals as permitted by SEBI.

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COMPANY DETAILS

PROFILE OF SBI MF
SBI Mutual Fund, the first bank sponsored mutual fund in India, was incorporated on 29 June, 1987 by State Bank of India. SBI Mutual Fund is Indias largest bank sponsored mutual fund and has an enviable track record in judicious investments and consistent wealth creation. Magnum Regular Income Scheme -1987was the first scheme launched by SBI. The Fund has launched 40 schemes till date, of which 32 schemes are available currently. The fund traces its lineage to SBI - Indias 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(63%) and Socit Gnrale Asset Management(37%) France, one of the worlds leading fund management companies, managing over US$ 500 Billion worldwide.

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Exploiting expertise, compounding growth

In twenty years of operation, the fund has launched thirty-two schemes and successfully redeemed fifteen of them. In the process it has rewarded its investors handsomely with consistently high returns. A total of over 25, 00,000 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. Today, the fund manages over Rs. 35,000 crores of assets and has a diverse profile of investors actively parking their investments across 28 active schemes. The fund serves this vast family of investors by reaching out to them through network of 82 collection branches, 26 investor service centers, 21 investor service desks and 21 district organizers.

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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. SBI Mutual Fund, one of the leading mutual funds has been awarded the Most Preferred Mutual Fund by CNBC Awaaz Consumer Awards 2006, an exhaustive consumer preference survey conducted by AC Nielson-Org Marg on behalf of CNBC Awaaz, a popular business channel. Economic Times has also given SBI MF, the title of being Indias Second Brand equity, mutual funds AMC. SBIFM was awarded the Mutual Fund of the Year 2007

MAGNUM TAXGAIN MAGNUM CONTRA MAGNUM GLOBAL

MAGNUM BALANCED

The consumer survey spread over 21 cities had 10,000 respondents who chose most preferred brands from 41 product and services categories. The survey was conducted in 14 states through a structured questionnaire. Among the financial services, banks, mutual funds, life insurance companies, credit cards, housing loans, auto loans and financial advisory services were selected for the brand study. Fast Moving Consumer Goods, Consumer durables, telecom, auto, retail and hospitality and travel were some of the other sectors, which were considered for this exercise. Accepting the award, Mr. Deepak Chawla, Managing Director (before), SBI MF said, SBI MF is proud to receive this prestigious recognition as it reaffirms its commitment to investors. SBI Mutual Fund has been consistently spreading the awareness about mutual funds by investor education campaigns through the media and this has successfully raised awareness about Mutual funds.

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SWOT ANALYSIS OF SBI MUTUAL FUND

STRENGTHS
1. Established name in the market : SBI MF is a wholly owned subsidiary of State Bank of India, which is a widely acclaimed name in the banking sector. It has got good name and reputation in the market. It is one among the fortune 500 companies in the world. People have faith in the name of SBI, so they do not hesitate while investing in SBI MF. 2. Good Performance History : SBI MF has an enviable track record in judicious investment and consistent wealth creation . Most of the schemes offered by SBI MF have done well in the past which in turn helps in creating new customers.

3. Good product line : SBI MF offers a wide range of products to the investors, enabling them to choose the product according to their own need and preferences.

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4. Professional expertise : SBI MF is a joint venture between The State Bank of India and Societe Generale Asset Management (France), one of the worlds leading asset management companies that manages over US$ 330 billion worldwide.

WEAKNESSES
1. Poor services : The services of SBI MF are not up to the mark. Most of the investors are not satisfied with the services provided by them. Delay in payment of amount in case of repurchase and delay in dispatch of statement are the main problem faced by the investors. 2. Lack of awareness about mutual funds : Most of the people in India do not know about mutual funds and those who know dont think about investing in it which demands more efforts on their part. 3. Non availability of MF related services in all SBI branches : Non availability of MF services in all SBI branches is one of the weaknesses of SBI MF. Only one service desk is functioning in one city which creates problems for the investors.

OPPORTUNITIES
1. Opportunity to use various branches of SBI to provide better services : SBI MF can use various branches of SBI for the betterment of its MF related services. It will be more convenient for the investors. 2. It can use already set up network of SBI to make the people aware of MF and to convert them into investors : As the customers of SBI come to the bank on a regular basis, so, SBI MF can use the various branches for educating the customers about MF and to convert them into investors of mutual fund.

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3. Potential rural market : There is so much potential in the rural market and SBI MF can easily penetrate in this market with its (SBI) strong reputation and set up branches. It can mobilize huge amount of funds from this market through educating people about mutual fund.

THREATS
1. Tough competition from other mutual fund organizations : SBI MF is facing so much competition from other growing MF in the market as they are also performing well. The entry of new MF organizations has made the competition more severe. 2. Highly volatile share market : The Indian share market is highly volatile and as we know that mutual fund invests a large part of its corpus into share market which makes the investment into mutual fund very risky. As a result it makes the task very difficult to induce people to invest in mutual fund. 3. Competition from other investment opportunities available for investors : AS now a days so many investment opportunities are available in the market like insurance, investment in share market and real estate which are also attracting the investors, thereby increasing competition and posing threat to mutual fund.

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VARIOUS EQUITY SCHEMES OFFERED BY SBI MF

The investments of these schemes are predominantly in the stock markets and endeavor will be to provide investors the opportunity to benefit from the higher returns which stock markets can provide. However they are also exposed to the volatility and attendant risks of stock markets and hence should be chosen only by such investors who have high risk taking capacities and are willing to think long term. Equity Funds include diversified Equity Funds, Sectoral Funds and Index Funds. Diversified Equity Funds invest in various stocks across different sectors while sectoral funds which are specialized Equity Funds restrict their investments only to shares of a particular sector and hence, are riskier than Diversified Equity Funds. Index Funds invest passively only in the stocks of a particular index and the performance of such funds move with the movements of the index.

The different type of equity schemes are as follows:

Magnum COMMA Fund :
The objective of the scheme would be to generate opportunities for growth along with possibility of consistent returns by investing predominantly in a portfolio of stocks of companies engaged in the commodity business within the following sectors - Oil& Gas, Metals, Materials & Agriculture and in debt & money market instruments.

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Scheme Highlights:
1. An open-ended equity scheme investing in stocks of commodity based companies. 2. Minimum Investment Rs. 5000 and in multiples of Rs. 1000 Dividend and Growth options available. Reinvestment and payout facility available. 3. Dividends will be completely tax-free. Long term capital gains to be completely tax-free. STT would be at the rate of 0.20% at the time of repurchase.

Magnum Equity Fund

To provide the investor Long-term capital appreciation by investing in high growth companies along with the liquidity of an open-ended scheme through investments primarily in equities and the balance in debt and money market instruments.

Scheme Highlights:
1. A diversified equity fund, focusing on aggressive growth. 2. Ideal for investors who wish to benefit from the growth of the equity markets and are comfortable with the attendant volatility.

Magnum Global Fund

To provide the investors maximum growth opportunity through well researched investments in Indian equities, PCDs and FCDs from selected industries with high growth potential and Bonds.

Scheme Highlights:
1. An open-ended equity scheme investing in stocks from selected industries with high growth potential. 2. Minimum Investment Rs. 2000 and in multiples of Rs. 1000 with Dividend and Growth options available. ^ Money Market Instruments will include Commercial Paper, Commercial Bills, Certificate of Deposit, Treasury Bills, Bills Rediscounting, Repos, Government securities having an unexpired maturity of less than 1 year, call or notice money, usance bills and any other such short-term instruments as may be allowed under regulations prevailing from time to time.

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Magnum Index Fund

The scheme will adopt a passive investment strategy. The scheme will invest in stocks comprising the S&P CNX Nifty index in the same proportion as in the index with the objective of achieving returns equivalent to the Total Returns Index of S&P CNX Nifty index by minimizing the performance difference between the benchmark index and the scheme. The Total Returns Index is an index that reflects the returns on the index from index gain/loss plus dividend payments by the constituent stocks.

Scheme Highlights:
1. An open-ended passively managed index fund tracking the S&P CNX Nifty Index where the investments will be made in all the stocks comprising the S&P CNX Nifty in the same proportion as their weightage in the index. 2. Following options available : Growth and Dividend. 3. Investors have the facility to switchover at NAV related prices to other open-end schemes of SBI Mutual Fund. This facility of switchover to other schemes is not available to NRIs and FIIs.

Magnum MidCap Fund

To provide investors with opportunities for long-term growth in capital alongwith the liquidity of an open-ended scheme by investing predominantly in a well diversified basket of equity stocks of companies whose market capitalization is between Rs. 200 crores to Rs.2000 crores and in debt and money market instruments.

Scheme Highlights :
1. Open-ended Growth scheme 2. CDSC not exceeding 1.5% for exit within 12 months from the date of reopening of the scheme. 3. Minimum investment: Rs. 5000 and in multiples of Rs. 1000. 4. Dividend & Growth options available.

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 Magnum Multicap Fund

To provide investors with opportunities for long-term growth in capital along with the liquidity of an open-ended scheme through an active management of investments in a diversified basket of equity stocks spanning the entire market capitalization spectrum, debt and money market instruments.
Scheme Highlights :

1. Scheme opened for continuous sale and repurchase. 2. Dividend and Growth options available. Reinvestment and payout facility available. 3. Dividends will be completely tax-free. Long term capital gains to be completely tax-free. Short -term capital gains to be taxed at 10% (plus applicable surcharge and cess)

Magnum Multiplier Plus 1993

Magnum Multiplier Plus is an open-ended diversified equity fund and the investment objective of the scheme is to provide investors long term capital appreciation along with the liquidity of an open-ended scheme. The scheme will invest in a diversified portfolio of equities of high growth companies.

Scheme Highlights:
1. An open-ended equity scheme aiming for aggressive growth from investments in equities. 2. Scheme opens for Resident Indians, Trusts, and Indian Corporate and on a fully repatriable basis for NRIs, FIIs & Overseas Corporate Bodies. 3. Facility to reinvest dividend proceeds into the scheme at NAV. 4. Easy entry and exit on the basis of sales and repurchase prices determined daily. NAV will be declared on every business day. 5. Nomination facility available for individuals applying on their behalf either singly or jointly up to three.

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MAGNUM SECTOR FUND UMBRELLA:

MSFU - Emerging Businesses Fund
To provide the investors maximum growth opportunity through equity investments in stocks of growth oriented sectors of the economy. There are five sub-funds dedicated to specific investment themes viz. Information Technology, Pharmaceuticals, FMCG, Contrarian (investment in stocks currently out of favor) and Emerging Businesses. The investment objective of the Emerging Business Fund would be to participate in the growth potential presented by various companies that are considered emergent and have export orientation/outsourcing opportunities or are globally competitive by investing in the stocks representing such companies. The fund may also evaluate emerging businesses with growth potential and domestic focus.

Scheme Highlights :
1. An open-ended scheme in which there are five sub-funds, viz. Information Technology (IT), Pharmaceuticals, Fast Moving Consumer Goods (FMCG) and a Contra sub fund - investing in stocks currently out of favor and Emerging Businesses Fund to participate in the growth potential presented by various companies that are considered emergent and have export orientation / outsourcing opportunities or are globally competitive by investing in the stocks representing such companies. The fund may also evaluate emerging businesses with growth potential and domestic focus. Accordingly, investors can chose to invest in one or more of the five sub funds. The fund allows free switchover from one sector to another. The merits of each of the five sectors are detailed in the following pages. 2. Growth and Dividend Option available under Contra, Pharmaceuticals and Emerging Businesses Fund. 3. Switch-over facility at NAV related price to other open-ended schemes of SBI Mutual Fund, is available. This facility is not available to NRIs.

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MSFU - IT Fund
To provide the investors maximum growth opportunity through equity investments in stocks of growth oriented sectors of the economy. There are five sub-funds dedicated to specific investment themes viz. Information Technology, Pharmaceuticals, FMCG, Contrarian (investment in stocks currently out of favor) and Emerging Businesses.

Scheme Highlights:
1. Open ended Equity Scheme. 2. Targeted at investors seeking high growth and comfortable with attendant volatility.

MSFU - Pharma Fund

To provide the investors maximum growth opportunity through equity investments in stocks of growth oriented sectors of the economy. There are five sub-funds dedicated to specific investment themes viz. Information Technology, Pharmaceuticals, FMCG, Contrarian (investment in stocks currently out of favor) and Emerging Businesses.

Scheme Highlights:
1. Open ended Equity Scheme. 2. Targeted at investors seeking high growth and comfortable with attendant volatility.

MSFU - Contra Fund

To provide the investors maximum growth opportunity through equity investments in stocks of growth oriented sectors of the economy. There are five sub-funds dedicated to specific investment themes viz. Information Technology, Pharmaceuticals, FMCG, Contra-sub funds (investment in stocks currently out of favor) and Emerging Businesses.

Scheme Highlights:
1. An open-ended scheme in which there are five sub-funds, viz. Information Technology

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2. (IT), Pharmaceuticals, Fast Moving Consumer Goods (FMCG) and a Contra sub fund - investing in stocks currently out of favor and Emerging Businesses Fund to participate in the growth potential presented by various companies that are considered emergent and have export orientation / outsourcing opportunities or are globally competitive by investing in the stocks representing such companies. The fund may also evaluate emerging businesses with growth potential and domestic focus. Accordingly, investors can chose to invest in one or more of the five sub funds. The fund allows free switchover from one sector to another. The merits of each of the five sectors are detailed in the following pages. 3. Growth and Dividend Option available under Contra, Pharmaceuticals and Emerging Businesses Fund. 4. Switch-over facility at NAV related price to other open-ended schemes of SBI Mutual Fund, is available. This facility is not available to NRIs.

MSFU - FMCG Fund

To provide the investors maximum growth opportunity through equity investments in stocks of growth oriented sectors of the economy. There are five sub-funds dedicated to specific investment themes viz. Information Technology, Pharmaceuticals, FMCG, Contrarians (investment in stocks currently out of favor) and Emerging Businesses.

SBI Arbitrage Opportunities Fund

To provide capital appreciation and regular income for unit holders by identifying profitable arbitrage opportunities between the spot and derivative market segments as also through investment of surplus cash in debt and money market instruments.

Scheme Highlights:
1. Investment in a diversified basket of equity & equity related instruments, derivative 2. Instruments and debt and money market instruments in accordance with the asset allocation pattern. 3. Liquidity:- Fresh Purchases and Redemptions at prices related to Applicable NAV. The interval day for redemption/switch would be the settlement Thursday (the settlement day for derivatives segment in the NSE which is currently last Thursday of the month) or any other day
43

4. 5.

6. 7.

8.

which is declared as the settlement day for derivatives segment by the NSE. Benchmark Index:- CRISIL Liquid Fund Index Options: Growth Option and Dividend Option available. Under the Dividend option, facility for reinvestment/ payout of dividend available. The dividend frequency is at the discretion of the Trustee. Dividends will be declared subject to availability and adequacy of surplus in the Scheme. Cheques/Drafts to be in favor of "SBI Arbitrage Opportunities Fund" Cut off times For Redemption Application:- All repurchase requests received under the scheme till upto 3:00 p.m. on the Friday (in case such Friday is a holiday, then the last business day) of the week preceding the interval day would be processed at the NAV (with applicable exit load) of the interval day. The interval day would be the settlement Thursday (the settlement day for derivatives segment in the NSE which is currently last Thursday of the month) or any other day which is declared as the settlement day for derivatives segment by the NSE. For Purchase Application:- The purchase request received up to 3.00 p.m. on each Business Day would be processed at the NAV applicable for the same day and the purchase request received after 3.00 p.m. would be processed at the NAV applicable for the next business day.

SBI Blue chip Fund

The objective of the scheme would be to provide investors with opportunities for long-term growth in capital through an active management of investments in a diversified basket of equitystocks of companies whose market capitalization is atleast equal to or more than the least market capitalised stock of BSE 100 Index.

Scheme Highlights :
1. Dividend and Growth options available. Reinvestment and payout facility available. 2. Dividends will be completely tax-free. Long term capital gains to be completely tax-free. Short -term capital gains to be taxed at 10% (plus applicable surcharge and cess).

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SBI Infrastructure Fund - Series I

To provide investors with opportunities for long-term growth in capital through an active management of investments in a diversified basket of equity stocks of companies directly or indirectly involved in the infrastructure growth in the Indian economy and in debt & money market instruments.

Scheme Highlights:
1. 2. 3. 4. 5. Close-ended growth fund with 3 year tenure. Scheme reopens for continuous repurchase from 9th July 2007. Minimum investment of Rs. 5000 and in multiples of Re. 1. NAV and repurchase NAV to be disclosed on all business days. Dividend and Growth options available. Payout facility is available only during the close-ended tenure of the scheme. 6. Dividends will be completely tax-free. Long term capital gains to be completely tax-free. Short term capital gains to be taxed at 10% (plus applicable surcharge and cess). 7. Automatic conversion into open-ended scheme on maturity. 8. SIP facility will be made available only after the scheme goes openended.

SBI Magnum Taxgain Scheme 1993

The prime objective of scheme is to deliver the benefit of investment in a portfolio of equity shares, while offering tax rebate on such investments made in the scheme under section 80 C of the Income-tax Act, 1961. It also seeks to distribute income periodically depending on distributable surplus.

Scheme Highlights :
1. There is a statutory lock-in period of three years for investments in a Tax

Saving Scheme (irrespective of the fact whether the investors claim the rebate u/s 80C or any other section or not). 2. Dividends may be declared depending on distributable profits of the scheme. 3. Facility to reinvest dividend proceeds into the scheme at NAV. 4. Switchover facility to any other open-ended schemes of SBI Mutual Fund at NAV related prices available after the statutory lock-in period.

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SBI ONE India Fund

To provide investors with opportunities for long term growth in capital through an active management of investments in a diversified basket of equity stocks focussing on all four regions of India and in debt and money market instruments.

Scheme Highlights :
1. Close-ended Fund with 3 year tenure. Date of maturity of the scheme is 15th January 2010. 2. Scheme reopens for continuous repurchase from 19th January 2007. 3. Minimum investment Rs. 5000 and in multiples of Rs. 1. 4. NAV and repurchase NAV to be disclosed on a daily basis. 5. Dividend and Growth options available. Dividends will be completely tax-free. Long term capital gains to be completely tax-free. Short term capital gains to be taxed at 10% (plus applicable surcharge and cess) 6. Automatic conversion into open-ended scheme on maturity. 7. The Fund would invest at least 15% and not more than 55% of its equity exposure to each of the four regions. At least, 15 stock in each region. Diversification across sectors in each region and at the scheme level. 8. Investment approach to be bottom-up without any sector/market capitalization bias. 9. Benchmark Index - BSE 200 Index.

SBI TAX ADVANTAGE FUND - SERIES I

The investment objective of the scheme is to generate capital appreciation over a period of ten years by investing predominantly in equities of companies across large, mid and small market capitalization, along with income tax benefit.

Scheme Highlights:
1. A 10 year close ended Equity Linked Savings Scheme. 2. Dividend Option and Growth Option. Under the Dividend option, only dividend payout facility isavailable. 3. NAV to be disclosed on weekly basis. 4. Liquidity only after the lock-in period of three years from the date of allotment. 5. Switch in allowed only during NFO period.

46

6. Switch Out from the scheme will be allowed only after the lock in period.

DEBT SCHEMES
Debt Funds invest only in debt instruments such as Corporate Bonds, Government Securities and Money Market instruments either completely avoiding any investments in the stock markets as in Income Funds or Gilt Funds or having a small exposure to equities as in Monthly Income Plans or Children's Plan. Hence they are safer than equity funds. At the same time the expected returns from debt funds would be lower. Such investments are advisable for the risk-averse investor and as a part of the investment portfolio for other investors.

Some debt schemes are:

1. Magnum children benefit plan 2. Magnum gilt fund 3. Magnum Income Fund 4. Magnum Insta cash

BALANCED SCHEMES
Magnum Balanced Fund invest in a mix of equity and debt investments. Hence they are less risky than equity funds, but at the same time provide commensurately lower returns. They provide a good investment opportunity to investors who do not wish to be completely exposed to equity markets, but is looking for higher returns than those provided by debt funds.

Some balanced schemes are:

1. Magnum Balanced Fund 2. Magnum NRI Investment fund

47

SBI SCHEMES AT A GLANCE

Scheme Type of Scheme and risk profile Magnum sector Funds Umbrella 1. FMCG Fund 2. Pharma Fund 3. Contra Fund 4. IT Fund Magnum Equity Equity Scheme Fund
High Risk 70-100%: Equity 0-40%: High Debt and Money Market and Low Instruments 50-100%: Equity 0-40%: Dept 0-10%: Money Market Instruments High Medium Medium Sector Fund High Risk 90-100%: Equities of a High particular sector 0-10%: Money Market Low Instruments

Portfolio mix

Risk profile of the portfolio

Magnum Balanced Balanced Fund

(Equity oriented scheme) Moderate risk

Magnum Multiplier Equity Scheme Up to 100% in equity Plus Scheme Magnum Tax gain
High risk instruments

High

Equity Linked 80-100%: Equity Saving scheme 0-20%: (section rebate) High Risk Money Market 88 Instruments

High

Low

Magnum Fund

income Debt
Low

Scheme 100% in Dept and Money Medium to Low to Market Instruments

Medium risk

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Magnum Gift Fund

Dept Scheme

100%

in

Government Low and money

Securities Low Risk Magnum Instacash Dept Scheme

Market Instruments 100% in Dept and Money Low Market Instruments

Fund Magnum
Low Risk Monthly Dept Scheme Low

85% and above in Dept Medium to Low and Money Market to Instruments 0-15%: Equity High Up to 100% in the stock High comprising the Nifty

Income Plan
Medium risk Index Passively managed tracking the S & P CNX Nifty Index Risk high

Magnum Fund

growth scheme Index

0-10%:

Money Market Low

Instruments

Magnum Childrens Plan Benefit

Dept Scheme Medium risk

At least 75% in dept and Medium to Low Money Instruments Not Market more High

than 25% in equity

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HOW TO INVEST IN A SCHEME

Mutual funds normally come out with an advertisement in newspapers publishing the date of launch of the new schemes. Investors can also contact the agents and distributors of mutual funds who are spread all over the country for necessary information and application forms. Forms can be deposited with mutual funds through the agents and distributors who provide such services for a commission. Now a day, the post offices and banks also distribute the units of mutual funds. But the only role of banks and post offices is to help in the distribution of mutual funds schemes to the investors. The investors can also invest directly without paying any extra charges.

SOME COMPETITORS OF SBI MF

NAME OF THE AMC
BIRLA SUN LIFE AMC Ltd. KOTAK MAHINDRA AMC Ltd. RELIANCE CAPITAL AMC Ltd. ICICI PRUDENTIAL AMC Ltd. FRANKLIN TEMPLETON AMC Pvt Ltd. PRINCIPAL PNB AMC Pvt Ltd.

NATURE OF OWNERSHIP
PRIVATE INDIA

AUM

NUMBER OF CUSTOMERS WORLD WIDE

15 LAKHS 9. 78 LAKHS 65. 68 LAKHS

DATE OF INCORPORATION
SEPTEMBER 5 1994 DECEMBER 1998

Rs. 31 CRORES 18932. 96 CRORES Rs. 98431 CRORES Rs. 59,573. 08 CRORES Rs.27,990. 87 CRORES 14,199. 2079 CRORES

PRIVATE INDIA

FEBRUARY 24 1995

PRIVATE INDIA

<16 MILLION

PRIVATE FOREIGN PRIVATE FOREIGN

JUNE 22 1993 OCTOBER 6 1995

21 LAKHS

BANK

NOVEMBER 20 1991 9,78,661

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eISC PACKAGE

USED BY SBI MF

FOR

MUTUAL FUNDS

51

State Bank of India uses the eISC Package, provided by CAMS (Registrar of SBI MF) in order to maintain a database of the investors, investing in different schemes of SBI mutual funds . The package is used to:

1. For Investors:
a) It is used to enquire the personal details about the investor with the help of Folio number, application number, cheque number or draft number. b) Retrieve the daily NAV (Net asset value) list. c) Generate the statement of account for the investors.

2. For Brokers:
a) It is used to enquire the personal details about the investor with the help of ARN number or the name of the broker. b) Generate the commission statement for the Brokers with the help of ARN no. or name. c) Generate report regarding the total business done by the brokers in a particular month.

3. For SBI MF:

a) The company can keep an eye and generate reports of the total business done by the service desk in a particular month or year. b) The company can also see the business done by individual agents, brokers and the nationalized distributors in a particular month or a year.

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Some of the Snap-shots of the package are :

In order to generate the NAV list, click the NAV Enquiry given under the Customer Service category :

In order to view the personal details of the investor and generate Account statements for them, the folio number or the application number or the cheque number of the investor is necessary. Enter the folio number and click Locate and then the Ac. Stmt.:

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In case the investor has Application number:

In case the investor has cheque number:

The statement of account of the investor is shown on the next page. In the statement the personal details, pan card number. Bank particulars and the current and initial investment of the investor, no. of units hold and the current NAV is given. An investor should view his/her SOA (statement of account) once with in 15-20 days so that the returns generated by a particular scheme are correctly known to the investor.

54

55

In order to view the personal and brokerage details of the Broker, enter the ARN Code or the name of the broker:

56

INVESTMENT BEHAVIOR
Behavior Finance approach takes into account rational and irrational motives of the investors in defining the long run price formation in the financial markets. The root of investor psychology has MONEY as its centerpiece. And the main aim of every investor is to accumulate wealth but still investment goal is the driving force which influences an investor towards the investment path. Now, on this investment goal there is an impact of some demographic factors such as age, gender, educational qualifications, income group etc. So to understand the investment behavior of the investors it is important to analyze the impact of all these factors on the investment goals. Apart from this it is also important to know the impact of the tax benefits, as it is also one of the driving forces for investments. Influence of the peer group, risk taking ability, time horizon is yet other parameters, which influences the investment style and pattern. So, keeping all the above in mind a schedule was prepared and the investment behavior was analyzed accordingly. A sample size of 50 was taken, the target group was the investors coming to the branch for investments.( the no. of investors who were interrogated were more than the sample size but just for the purpose of simplification of analysis the size is taken as 50,this does not affects the results).Method of data collection was monitoring and interrogative. The analysis techniques were a combination of both exploratory data techniques, which provides a good diagnosis by emphasizing visual representations of the data, and Behavior observation approach.

57

ANALYSIS
Parameter 1:
INVESTMENT GOAL Q11: What is your Investment Goal? To watch your money grow faster. To earn income and also grow money. Only to earn a stable income.
70 60 50 40 30 20 10 0 To w atch your money grow faster To earn income and also grow m oney 20 10 Only to earn a stable incom e Percentage 70

. The First step of investment planning is the identification of the investment goals. On the basis of the survey conducted it was found out that 70% of the investors wanted their money to further generate income along with the capital appreciation. 20% among them were aggressive investors who wanted quick capital appreciation and just 10% were looking for a stable earning.

Effect of DEMOGRAPHIC parameters: AGE group of 18-27; 80%Aggressive Interest: fast capital appreciation
Investment goal of people in the age group of 18-28 was highly concentrated towards fast capital appreciation (i.e. option 1) and 80% of them followed an aggressive investment pattern. This is because being unmarried most of the investors in this category are free from family responsibilities and they look just for growth of money and are least bothered about security of the corpus. The remaining 20% who have family responsibilities go in for balanced schemes i.e. to earn income along with growth of money.
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The another factor which influences the investment decision in this age group is the profession .It was seen that 80% of the investors belonging to the service class were inclined towards Mutual Fund investments where as those who were either self-employed or had a business were attracted more towards the direct market investments (i.e. share market).Education qualification also reflected the investment style of the investors and also the concept of high-risk, high-return is most famous among the people with post graduation and additional qualification.

AGE group of 28-38;

40%Aggressive, 60%Moderate

Interest: capital appreciation along with income

Investment goal of the investors in the age group of 28-38 is inclined towards capital appreciation along with income (which is accepted to be fluctuating).40% of the people in this group follow an aggressive investment pattern i.e. more and more investment towards equity so as to appreciate capital on a faster rate. But majority of them i.e. 60%of investors get inclined towards balanced investments as they start planning for retirement and also have family responsibilities so they are looking for security of corpus along with income. The impact of profession is not as much as in the previous case as the investors get more experienced with the time. But again if an investor is aggressive and belongs to service class then he/she prefers equity schemes. Whereas, a businessman would again go for secondary market. Education qualification does play a role but just in understanding the various investment options. Here the investment decisions are highly influenced by the reference group.

AGE group of 39-50; 45%Moderate,35%Conservative,20%Aggresive; Interest: capital appreciation along with income
Investors goal in this age group of 39-50 are again inclined towards the capital appreciation along with income (which is not accepted to be fluctuating).45% of the investors follow the moderate investment approach.35% turn conservative i.e. safe corpus and stable returns and the rest 20% still have the thirst of showers of equitys return. The investors behavior in this age group is due to the approaching retirement age and the responsibilities of the childrens
59

higher education and their marriage. The impact of education and profession gradually declines in this group.

AGE group of 50+; 85%Conservative Interest: Stable income

Investors in the age group of 50 and above concentrate only on security of corpus along with a stable income so that they can independently live their life after retirement. Here as high as around 85% of the investors look for the same. Whereas the rest 15% still like to play with equity, but that to after securing enough amounts to live the life ahead comfortably. Parameter 2:

INCLINATION TO TAX BENEFITS

Q10. Are you an active investor in the share market? Yes. No. Q14. How important are tax benefits? Not important Avg. important Very important
30 25 20 15 10 5 0 N Important ot Avg. importance Very Imporatnt 10 14 26 no. of investors

With the announcement of budget 2005 the flood gates of investments have opened wide for the Mutual Fund industry. Increasing the limit of investment from 10,000 to 1, 00,000 in Equity Links Saving Schemes (ELSS) to get a tax rebate of 30%, has resulted in attracting not only the risk averse investors but also the ones who are active investors in the share market. Out of 50 people on whom the survey was conducted 26 of them i.e.52% felt that tax benefit was of great importance and a major driving force for the investments into Mutual Funds. For 14 of themi.e.28% tax benefits were important but they were not the
60

driving force of investments in MF. And for the remaining 20% tax rebate was not the influencing factor. Their is no impact of the age group, educational qualification and profession on the investors investing behavior as a person who is looking for investments to save tax ,has ELSS as one of the best options to earn a good return on the investments. Parameter 3:

TIME HORIZON
Q 13: What time horizon are you looking at? 6Months Upto 1Year. 1-3Year More than 3 years

14%

14% 10% 6 Months Upto 1 year 1-3 year More than 3 years

62%

Time horizon is yet an important factor that defines the path of investment which an investor follows. Majority of investors (62%) want to park their funds for a period of 1-3years and they mainly invest in ELSS schemes to gain tax benefits.14% of investors want to invest for a time period of more than 3 years and they look for a return in excess of 15% .14% of the investors want to invest in for less than 6 months. These are the ones who have a balance of 4 lakhs plus in their account and are willing to invest so as to gain in extra return on their investments, usually more than 5.5% is expected. And around 10% of investors who park their funds for about a year. These are again the ones who are looking for those extra returns and moreover are investing in different schemes of new AMCs. Tax benefits for such investors are their last priority.

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Effect of DEMOGRAPHIC parameters: AGE group of 18-27; Investment horizon: More than a year
Investors in the age group of 18-27 usually invest in for longer duration as for them time is not the concern they just want their money to grow at a faster pace, security of the corpus is not their main concern. They are also the ones who prefer the systematic investment plan the most. Profession here again plays a major role, 80% of the investors belonging to the service class are inclined towards the investments in the equity mutual funds through the systematic investment plan route with Growth option. It has been observed that those who are in their family business or self-employed are not inclined to a greater degree towards investments and savings, what this class of investors look at is to mint money through direct investment in the primary and the secondary market. The risk taking ability of this class is the highest and most of them seem to be over bullish about the market.

AGE group of 28-38; Investment horizon: More than a year

Here again the investors look for a longer duration .They go in for the investments where there is security of the corpus. Investors in this age group look for tax benefits and thus invest for 3 yrs period to get that benefit. The influence of the profession is the same as in the upper case.

AGE group of 39-50; Investment horizon: About a year

Nearing the retirement age and with the burden of family responsibilities this category of investors is uncomfortable to invest in for more than a year. They go in for schemes that provide stable returns along with the safety of the corpus. They only invest for longer duration if the scheme is ELSS, so as to avail the tax benefits. Some of the investors who have more than 4 lakhs in their account also park some proportion of their money for less than 6 months just to get the returns higher than the interest in the saving banks account. (SB A/C) .They invests in the floating rate funds where there is no entry and exit loads. If looking for stable income then they go for balanced funds where there is 50 % of equity and rest is debt and also prefer monthly income plans.

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AGE group of 50+; Investment horizon: About an year or less

The investment behavior of this category of investors is the same as the previous one. They are not at all interested to park their funds for more than a year but there is an exception for ELSS where they have to invest for 3 yrs to avail the tax benefits. This investor category was observed to be the most active one to go in for the IPOs of the various fund houses as being at this stage of life they have already accumulated wealth and now just look for safe investments and stable returns. The impact of Profession was negligible. Parameter 4:

RISK TAKING ABILITY:Q16:- How much money can you afford to loose before feeling uncomfortable and exiting from an investment? 20% 5% 0%
70% 60% 50% 40% 30% 20% 10% 0% 20% 5% 0% 0 33%
percentage of investors

67%

Q12:- Out of your total how much would you invest now? Less than 25% Between 25% to 35% More than 50%
70% 60% 50% 40% 30% 20% 10% 0% Less than 25% B etween 25to35% More than 50% 0 N of Investors o. 34% 66%

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Risk taking ability is the main reason why rich becomes richer and poor becomes poorer. And this is what Robert Kieroski author of Best U.S.A seller, Rich Dad-Poor Dad says that the difference between rich and poor is that; poor work for money whereas rich makes money to work for them. With the crave to procure more wealth 67% of the investors were willing to take a risk of loosing 5% of the money invested .These were mostly the investors in the age group of 18-27 and 28-38 who follow an aggressive investment style, as at this stage of the life they concentrate on fast capital appreciation specially 18-27 band. It was also interesting to observe that investment decisions are not gender biased .And the remaining 33% wanted the safety of the corpus. Amongst this the investors were of the age group of 38-50 and 50+,who follow either moderate or conservative investment style, as these investors have to plan for their retirement and family responsibilities. Another important observation which was made was that 66% of the investors are willing to invest 25%-35% of their money ,which is a healthy sign for a developing country like ours.34% were the ones who wanted to invest in less than 25% of their money. Here the impact of age group and education qualification was seen in the investors in the age group of 18-27 yrs., as the ones in this age group who were either graduates or less qualified than that are spend thrift in nature and dont think about investments and savings. Parameter 5:

INFLUENCE OF THE PEER GROUP

Q 17: Do your friends and relatives also invest in Mutual Funds? Yes No
No 22 Yes No Yes 78

10

20

30

40

50

60

70

80

90

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According to Brian Tracy, author of Getting rich your own way, the first and the fore most reason why people do not become wealthy is that it never occurs to them because they have a reference group or a social circle that is not wealthy; wealth achievement, therefore, is part of the world view. Out of 50 people who were surveyed 22% were not influenced by the investment pattern followed by their reference group and the remaining 78% were highly influenced. This category is the one where the investment behavior is highly driven by the profession to which a person belongs to and the age group. The investors in the age group of 18-27 who belong to the service class were influenced by the investment decisions made by their seniors. Whereas those belonging to the business class are self-driven for the investments decisions and are over bullish on the secondary market, they rarely get influenced by their reference group. The impact of education qualification was also seen; usually investors who are highly qualified dont blindly follow the investment pattern of others. They know that the investment goal of every individual is different and a person has to invest keeping them in mind. The group of 28-38 consists of mature and a much cautious investors. Though the crave to earn higher return on investments was seen here also but still the investment decisions were well thought of .Again the impact of education qualification was same as in the previous case . The age group of 39-50 and 50+ dont get too influenced by the investment decisions made by the reference group rather than they believe in directly getting the information from the source.

Investors preferences according to question no.15: 100% 80% 60% 40% 20% 0% SBI Reliance UTI HDFC Pru ICICI MF's IPO Others Asset Managem ent Com panies 80%

75% 59%

70% 52% No. of Investors 22% 23%

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Most of the investors who come in for the investments invest in State Bank of India it is amongst the top performing funds in the market. On an average about 80% of the investors invest in this fund either in the form of systematic investment or one time investment .The recent CRISIL and CNBC TV 18s best fund awards have increased its popularity even more. Especially the MSFU Contra and Magnum Tax gain are the popular funds among the investors. It is however important to note that no investor invests in this fund because of its good returns only, it is living on the name of its Parent company SBI. The next in the list comes the Reliance, 75% investors invest in its SIP, the reason why this fund attracts attention is due to the name Reliance attached to it the investors invest more in its systematic investment plan. Pru ICICI another emerging giant in this mutual fund industry is getting noticed for its good returns in equity schemes. It attracts 70% of the investors. The next in the list comes UTI, 59 % of investors invest in the schemes offered by it as it is the first AMC to launch the concept of mutual funds in the country. MFs IPOs attract a large no. of investors, especially in ones in the age group of 39-50 and above. It is due to the myth which most of the investors have that the IPOs of MFs are like the IPOs of share market, and are the safe investments. As a matter of fact MFs IPOs have attracted a lot of investors till this date. In this SBI and reliance have attracted a major chunk of investors. HDFC is slowly but surely firming its position in the market, reason being good returns and is hence gaining investors confidence. This is a note worthy factor for SBI MF AMC because HDFC is attracting investors not because of the name HDFC attached to it but because of its performance. Other funds attract about 23% of the investors. It consists of Birla Sun Life, Kotak MF, TATA MF, Standard Charted and JM Financials. Most of the Investments done above attracting investors attention, especially that of salaried middle class is through the Systematic Investment Plan of various fund houses.

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Systematic Investment PlanThe bread and butter of the Mutual Fund industry Buy Low and sell high, just four words sum up a winning strategy for the stock markets Indian Market is a synonym for volatility and dynamism. National Stock Exchange is the most liquid exchange in the world. Predicting Indian Market is the most difficult task, almost an impossible one. The inability to time the market on a regular basis can leave an investor high and dry. However, ironically, the time in the market has historically shown more consistent success than timing the market. Though great returns from the market may not always be possible, stable and consistent returns are. And one of the best ways to get this return in this market of ours is the Systematic Investment Plan (SIP) offered by the mutual funds. SIP is a powerful tool with a strategy of not only preserving capital but also translating into substantial creation of wealth in the long run. Under this plan Investors invest a specific amount for a continuous period, at regular intervals. By doing this, the investor get the advantage of rupee cost averaging. Which means that by investing the same amount at regular intervals, the average cost per unit remains lower than the average market price, irrespective of how the market is - rising, falling or fluctuating.i.e.with every fluctuation in the market the units are purchased systematically, thus resulting in averaging the purchase price. Whereas this is not true for a one-time investment. This is the reason why a SIP investor gets phenomenal rate of return compared to a one-time investor.

Features of a systematic investment plan

1. To get a disciplined investment 2. To create value/wealth. 3. To avoid short-term fluctuations in the market. 4. Avoid risk of timing the market.

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For Example:-Let us suppose that a person invests Rs. 1,000 every month, in an equity fund using the SIP. The following table shows how investments would look in the two scenarios of fluctuating and rising market. Month Amount Invested (Rs.) Fluctuating Market Purchase Price (Rs.) 10.00 8.20 7.40 6.10 5.40 6.00 8.20 9.25 10.00 11.25 13.40 14.40 Rising Market No. of Units Purchased 100.00 95.24 90.91 86.96 83.33 80.65 77.52 74.91 71.43 68.97 66.67 64.52 961.11

No. of Purchase Units Price Purchased (Rs.) 100.00 121.95 135.14 163.93 185.19 166.67 121.95 108.11 100.00 88.89 74.63 69.44 1,435.90 10.00 10.50 11.00 11.50 12.00 12.40 12.90 13.35 14.00 14.50 15.00 15.50

Initial 1,000 Investment 1 2 3 4 5 6 7 8 9 10 11 TOTAL 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000

(Rs. 12,000/1435.9) = (Rs. 12,000/961.1) = Rs. 12.49 Rs. 8.36 (Sum of Purchase (Sum of Purchase price / 12) = Average Unit Price price / 12) = Rs. 9.13 Rs. 12.72 Assumed NAV @ Rs. 14.90 Rs. 16.00 Q12 (1435.9 units x Rs. (961.11 units x Rs. 16.00) = Rs. Market Value 14.90) = Rs. 21,395 15,378 Average Unit Cost Therefore, the average unit cost is lower than average unit price irrespective of market rising or fluctuating. This happens because you get the advantage of buying more units when the market is low and averaging out the purchase price.

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PORTFOLIO MANAGEMENT
Every individual investor would like to be apprised about the benefits that accrue out of his investments. This forms the crux of portfolio management and what I underwent with the bank. Working with the investment and services manager, I assisted him in handling the portfolio of some of the HNIs of the SBI Bank. These portfolios have to be updated on a fortnightly basis. My work required me to update the investments undertaken by each High Value Customer, calculating and stating the total returns that a particular mutual fund portfolio had generated over a period of time with a combination of different schemes that an investor had invested in. (A sample portfolio has been included on the following pages) This statement gives the investor an idea as to the profitability of his investment, which in turn affects the decision of whether to continue with the current portfolio of schemes or to liquidate the existing ones or to invest more in a particular fund.

Methodology Adopted for the computation of Total Returns:

The Portfolios were updated on the basis of the NAVs. The purchase NAV helped in determining the number of units that a particular invested amount was able to earn for its investor. Units = Amount Invested / Purchase NAV. The Market Value depicts the present value of the investment at the prevailing NAV. Current NAV that is higher than the purchasing NAV shows an increase in the market value of investment and Current NAV that is lower than the purchasing NAV shows a decrease in the market value of investment. Market Value = Number of Units * Current NAV. Holding period in days shows the time period for which the investor has remained invested in a particular scheme. Holding Period = Current Date Purchase Date. The investments earn some dividends over a period of time. According to the option that a particular investor opts for, he receives dividends that a
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particular scheme generates. He can either choose to re-invest these dividends to buy additional units of the scheme thus opting for Dividend Re-investment, or he can opt for Dividend Payout plan and get the dividends directly credited to his account so as to encash them as required. The amount of Dividends that a particular investor earns are calculated and presented by using the following formula Amount of Dividend pr unit (in Rs.)=Dividend Payout (%) * pr unit price(Rs. 10) The profit/loss depicts the amount in Rs. of the gains or losses that the investment have generated. Profit/Loss = (Market Value + Dividends) Original Amount Invested. Absolute returns gives the percentage profit/loss that a particular scheme has been able to achieve for the period of time the investor has stayed invested. Absolute Returns = (Profit/Loss) / Original Amount Invested * 100. To give the investor a final consolidated figure, the following three figures are calculated : Total Amount Invested : This is the total amount of money that an individual investor had invested initially, which is the sum total of the amount invested in each scheme.
1.

Total Portfolio Value : The total portfolio value represent the sum total of the market value and the dividends that the schemes have earned over the investment tenure.
2.

Total Portfolio Value = ( Market Value + Dividends ) Total Return : The total returns that an investment generates is the sum total of the amount of Profit/Loss divided by the total amount of initial investment done by the investor. It shows the aggregate value of returns that the portfolio has generated over the tenure.
3.

Total Returns (%) = ( Profit/Loss) / ( Initial Investment) * 100

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The Advice:
Based on the above portfolio statement, the clients are advised as to the approach they should adopt with respect to their investments, i.e. whether they should continue to hold their investments or they should liquidate them in order to book some profits, etc. Apart from the returns that they as investors have been able to achieve, the decision as to the holding or selling of a scheme(s) depends upon the performance of the respective schemes and also the current market scenario.

Personal Observations:
While updating these portfolios it was observed that on an average of 6 months a major chunk of portfolios showed a negative returns, this was for the equity schemes and specially the mid cap schemes. As the oil price was increasing day by day and inflation also played a very major role, thus making the stock market to decline and negative returns for the investors. Thus, this is the time to have patience for a month or two and wait for the market to increase.

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CONCLUSION
1. Not so long ago a common investor when asked about investing would have pointed out to the Fixed Deposits that he holds with the bank, the deposits with the Post Office, the Government Bonds that he has invested in, and the basket of shares (if any) that he holds in his kitty. He was not aware of the alternate route to investment, that of Mutual Funds. Slowly and gradually with the opening up of international borders and privatization, people are getting informed about other avenues of investment, be it Mutual Funds or Insurance. Gradually people in Indian are getting educated about Mutual Funds through the interplay of the AMCs and the Banks. Every day we see new forays into the mutual fund industry with the introduction of new schemes and the entry of new players. The investors are getting informed by the day. The present generation is though open to the idea of investing in a mutual fund, since they are very much aware of the global scenario. And its good to see the service class coming up with the investments. Thanks to the Systematic Investment Plans. India is observing this transition and very soon our investors would be displaying better investment habits than they had previously. 2. And as far as SBI MF is concerned the AMC is facing tough competition from the market. Especially from its nearest competitor Reliance. The strong point the company is enjoying is the good reputation and a well known brand in the minds of the investors. But the company needs to plan for the future in order to be ahead of its close competitors.

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Findings
1. The First step of investment planning is the identification of the

investment goals. On the basis of the survey conducted it was found out that 70% of the investors wanted their money to further generate income along with the capital appreciation. 20% among them were aggressive investors who wanted quick capital appreciation and just 10% were looking for a stable earning
2. Investment goal of people in the age group of 18-28 was highly

concentrated towards fast capital appreciation (i.e. option 1) and 80% of them followed an aggressive investment pattern. This is because being unmarried most of the investors in this category are free from family responsibilities and they look just for growth of money and are least bothered about security of the corpus. The remaining 20% who have family responsibilities go in for balanced schemes i.e. to earn income along with growth of money
3. The investment behavior of this category of investors is the same as the

previous one. They are not at all interested to park their funds for more than a year but there is an exception for ELSS where they have to invest for 3 yrs to avail the tax benefits. This investor category was observed to be the most active one to go in for the IPOs of the various fund houses as being at this stage of life they have already accumulated wealth and now just look for safe investments and stable returns. The impact of Profession was negligible
4. Out of 50 people who were surveyed 22% were not influenced by the

investment pattern followed by their reference group and the remaining 78% were highly influenced. This category is the one where the investment behavior is highly driven by the profession to which a person belongs to and the age group. 5. Another important observation which was made was that 66% of the investors are willing to invest 25%-35% of their money ,which is a healthy sign for a developing country like ours.34% were the ones who wanted to invest in less than 25% of their money. Here the impact of age group and education qualification was seen in the investors in the age group of 18-27 yrs., as the ones in this age group who were either graduates or less qualified than that are spend thrift in nature and dont think about investments and savings

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6. The investors look for a longer duration .They go in for the investments

where there is security of the corpus. Investors in this age group look for tax benefits and thus invest for 3 yrs period to get that benefit. The influence of the profession is the same as in the upper case 7. Nearing the retirement age and with the burden of family responsibilities this category of investors is uncomfortable to invest in for more than a year. They go in for schemes that provide stable returns along with the safety of the corpus. They only invest for longer duration if the scheme is ELSS, so as to avail the tax benefits. Some of the investors who have more than 4 lakhs in their account also park some proportion of their money for less than 6 months just to get the returns higher than the interest in the saving banks account. (SB A/C) .They invests in the floating rate funds where there is no entry and exit loads. If looking for stable income then they go for balanced funds where there is 50 % of equity and rest is debt and also prefer monthly income plans.
8. Investors in the age group of 50 and above concentrate only on security

of corpus along with a stable income so that they can independently live their life after retirement. Here as high as around 85% of the investors look for the same. Whereas the rest 15% still like to play with equity, but that to after securing enough amounts to live the life ahead comfortably
9. Investors goal in this age group of 39-50 are again inclined towards the

capital appreciation along with income (which is not accepted to be fluctuating).45% of the investors follow the moderate investment approach.35% turn conservative i.e. safe corpus and stable returns and the rest 20% still have the thirst of showers of equitys return. The investors behavior in this age group is due to the approaching retirement age and the responsibilities of the childrens higher education and their marriage. The impact of education and profession gradually declines in this group.
10. The age group of 39-50 and 50+ dont get too influenced by the

investment decisions made by the reference group rather than they believe in directly getting the information from the source

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SUGGESTIONS
1) Better services SBI MF should lay emphasis on providing better services to the investors. Especially services with regard to dispatch of statements and repayment in case of repurchase should not be delayed. Any information with regard to changes in Mutual Fund investment should be properly and promptly communicated to the investors. The employees of the company also need to personally meet and follow up the private banks and nationalized brokers in order to speed up the turnover of the SBI MF and maintain long term relations with the brokers and agents. 2) Increasing awareness about Mutual Fund The organization should increase knowledge about Mutual fund among people through organizing various kinds of awareness programs and promotional activities. SBI MF can use its wide network for educating people about Mutual Fund. 3) Promotional activities SBI MF should undertake a planned promotional program on a wide scale to reach the potential investors and to induce them to invest in Mutual Fund. It should increase the advertisement about its various Mutual Fund schemes and their benefits through TV channels, Radio and hoardings etc. It would help the organization in attracting more investments. Moreover the company need to supply these promotional material to different distributors on time. 4) Ensuring attractive return through continuous search for low risk and better Investment Avenue The organization should ensure attractive return to its investors through continuous search for low risk and better investment avenue. This can be achieved through appointment of qualified and experienced Fund Managers. 5) Incentive/Commision Programs The company also needs to increase the incentive/commission given to the agents and nationalized distributors as the competition is increasing day by day and different companies like Kotak Mahindra, ICICI are offering better incentive programs.

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REFERENCES
Magazines :
Outlook Money Mutual Funds review : (SBI investment guide meant for internal circulation) Standard charted Mutual Funds Concepts booklet on INDEXATION Capital Market SBI Presentation booklet (for internal circulation)

Newspapers :
Economic Times

Websites :

www.personalfinance.com www.sbimf.com www.mutualfundsindia.com www.amfiindia.com www.indiainfoline.com www.navindia.com

www.statebankofindia.com

www.equitymaster.com

Fact Sheets, Fund Statements and Web Sites of the various Fund Houses.

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Questionnaire
1. Name 2. Age 3. Sex 4. Marital Status 5. Educational Qualification 6.

.. . Male Married Female Unmarried

.. Business Service Self-employed House

Profession

wife In case of other please mention _______________ 7. Income Group(annually) below 100,000 above 500,000
8. Existing Investor

100,000-300,000

300,000-500,000

Yes

No

9. If yes, which funds have you invested in .. 10.Are you an active investor in the share market Yes No

11.What is your investment goal To watch your money grow faster To earn income and also grow money Only to Earn a stable income

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12.Out of your total money ,how much would you like to invest now: Less then 25% between 25%&35% more than 50%

13. What time horizon are you looking at < 6 months 3yrs. 14. How important are tax benefits Not Important Average Importance Very Important between 6mnths-1yr 1-2yrs >2-

15.In which AMC funds are you interested : State Bank of India Pru ICICI HDFC Reliance UTI MF IPOs Others (Please Specify) 16. How much money can you afford to lose before feeling uncomfortable and exiting from an investment? 20% 5% 0%

17. Do your friends and relatives also invest in Mutual Funds (influence of the peer group) Yes No

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