1

INTRODUCTION

Introduction to the Study of mutual funds: Mutual investors. stocks Funds A and are Mutual bonds, professionally fund Money managed invests pool our of money in some from a group of

manager Market

funds or

securities

including and

instruments

combination

decides the best time to buy and sell. By pooling our resources

with other

investors in Mutual Funds, they can diversify even a small investment over a wide spectrum.

With the emergence of the capital market at the centre stage of the Indian financial system from its marginal role a decade earlier, the Indian capital market also witnessed during the same period a significant institutional development in the form of diversified structure of Mutual Funds. A Mutual fund is a special type of investment institution which acts as an investment conduct.

It pools the savings, particularly of the relatively small investors, and invests them in a welldiversified portfolio of sound investment. As an investment intermediary, it offers a variety of services/advantages to the relatively small investors who on their own cannot successfully construct and manage investment portfolio mainly due to the small size of their funds, lack of expertise and experience, and so on. These services include the diversification of portfolio, expertise of the professional management, liquidity of investment, tax shelter, reduced risk and reduced cost.

Mutual fund is the most suitable investment mode for the common man as it offers an opportunity to invest in a diversified, professionally managed portfolio at a relatively low cost. Anybody with an inventible surplus of as little as a few Thousand rupees can invest in mutual funds. Each Mutual fund scheme has a defined investment objective and strategy.

2 The most important trend in the Mutual Fund industry is the aggressive expansion of the foreign owned Mutual Fund companies and the decline of the companies floated by nationalized banks and smaller private sector players. Funds issue and redeem shares on demand at the fund's net asset value (NAV). Mutual fund management fees typically range between 0.5% and 2% of assets per year, exchange fees and other administrative charges also apply. According to SEBI - Mutual Fund is defined as - A fund established in the form of a trust to raise moneys through the sale of units to the public or a section of the public under one or more schemes for investing in securities, including money market instruments. 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 the offer document.

DEFINITIONS
A mutual fund is a trust that pools the savings of a number of investors with common financial goals. The collected money is invested in various instruments like debentures, shares, etc. The income generated from these instruments and the capital appreciation is shared by the investors in proportion to the number of units owned by them.

NEED FOR THE STUDY

Today, everyone is interested in maximizing profits by minimizing risk. For which they are interested in investing the well reputed stocks but they did not have a money to invest in all those stocks. For this reason the Mutual funds helps those types of investors to invest in different stocks of top companies. These funds are invested through fund manager who is expert and good experience at various companies stocks. The investor should choose according to the market trends i.e. it is in bullish (or) in bearish period according to which he has to choose the fund. Thus, Mutual funds help even a common man to expect fruit full profits even in the Bearish period. So, I felt there is a need to study.

OBJECTIVES OF THE STUDY

To study the performance of Balanced Fund, equity fund, blue chip fund, comma fund, index fund, income fund, mip fund, one India growth fund with reference to SBI Mutual Funds. To find out the Preferences of the investors for Asset Management Company. To analyze the difference between the funds To find out the most preferred channel. To find out what should do to boost Mutual Fund Industry

SCOPE OF THE STUDY

The study has been confined to analyze the performance study of the SBI Mutual Fund Open-Ended growth schemes of Balanced Fund, equity fund, Blue-chip und, comma fund, index fund, income fund, mip fund, one India growth fund with reference to SBI on monthly basis.

METHODOLOGY OF THE STUDY

The methodology involves open-ended Growth schemes with reference to Balanced fund and Liquid fund. The data collected for this project is basically from secondary source:

Sources of Data
Secondary data is the data which is already available i.e. they refer to the data, have already been collected and analyzed by someone else. But here the source of data is collected through various Mutual Fund which

websites, past records and Books.

Tools and techniques used:

Treynors Measure Sharpes Measure

LIMITATIONS OF THE STUDY

The study is made only on two SBI Mutual funds (i.e., Balanced Fund equity fund, bluechipfund, comma fund, indexfund, incomefund, mipfund,oneindia growth fund). No primary data is associated with the project. Among growth and dividend schemes, only growth schemes have been taken so as to avoid repetition (as portfolio remains identical for both the options). The schemes that are more than 1 years old have been considered for evaluation.

THEORITICAL FRAMEWORK
Mutual Fund Industry in India:

The origin of Mutual fund industry in India is with the introduction of the concept of Mutual fund by UTI in the year 1963. Though the growth was slow, but it accelerated from the year 1987 when non-UTI players entered the industry.

In the past decade, Indian Mutual fund industry had seen dramatic improvements, both quality wise as well as quantity wise. Before, the monopoly of the market had seen an ending phase; the Assets Under Management (AUM) was Rs. 67bn. The private sector entry to the fund family raised the AUM to Rs. 470bn in March 1993 and till April 2004; it reached the height of 1,540 bn. Putting the AUM of the Indian Mutual Funds Industry into comparison, the total of it is less than the deposits of SBI alone, constitute less than 11% of the total deposits held by the Indian banking industry.

History Of Mutual Funds

The mutual fund industry can be broadly put into four phases according to the development of the sector. First Phase 1964-87 Second Phase 1987-1993 (Entry of Public Sector Funds) Third Phase 1993-2003 (Entry of Private Sector Funds) Fourth Phase since February 2003

First Phase ( 1964-87):

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development

9 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.6,700crores of assets under management.

Second Phase (1987-1993) Entry of Public Sector Funds:

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

Third Phase (1993-2003) Entry of Private Sector Funds:

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The est. while Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many

foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805crores. The Unit Trust of India with Rs.44,541crores of assets under management was way ahead of other mutual funds.

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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 est. while UTI which had in March 2000 more than Rs.76,000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has eSSSntered its current phase of consolidation and growth.

Mutual Funds have become extremely popular over the last 20 years. What was once just another obscure financial instrument is now a part of our daily lives. More than 80 million people, or one half of the households in America, invest in mutual funds That means that, in the United States alone, trillions (yes, with a "T") of dollars are invested in mutual funds.

In fact, too many people, investing means buying mutual funds. After all, its common knowledge that investing in mutual funds is (or at least should be) better than simply letting our cash waste away in a savings account, but, for most people, that's where the understanding of funds ends.

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Growth In Assets Under Management:

The graph indicates the growth of assets over the years

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Definitions Of Mutual Fund

Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 define Mutual Fund as , a fund established in the form of a trust to raise money through the sale of units to the public or a section of the public under one or more schemes for investing in securities, including, money market instrument. Mutual Fund is a non- depository, on-banking financial intermediary which acts as important vehicle for bringing wealth holders and deficit units together indirectly. Mutual funds is also suitable for those investors who do not have knowledge of capital market and by investing through a Mutual fund it can make use of knowledge of specialized people which the Mutual fund employs.

Concept Of Mutual Funds

Mutual fund is a trust that pools money from a group of investors (sharing common financial goals) and invest the money thus collected into asset classes that match the stated investment objectives of the scheme. Since the stated investment objectives of a Mutual fund scheme generally form the basis for an investor's decision to contribute money to the pool, a mutual fund can not deviate from its stated objectives at any point of time. Every Mutual Fund is managed by a fund manager, who is using his investment management skills and necessary research works ensures much better return than what an investor can manage on his own. The capital appreciation and other incomes earned from these investments are passed on to the investors (also known as unit holders) in proportion of the number of units they own.

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When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund). Mutual Fund investor is also known as a mutual fund shareholder or a unit holder. Any change in the value of the investments made into capital market instruments (such as shares, debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors.

Net Asset Value (NAV)

Mutual Funds invest the money collected from the investors in securities markets. In simple words, Net Asset Value is the market value of the securities scheme also varies on day to day basis. The NAV per unit is the market value of securities of a scheme divided by the total number of units of the scheme on any particular date. The performance of a particular scheme of a Mutual Fund is denoted by Net Asset Value.

Market value of the funds investments + Receivables + Accrued Income Liabilities Accrued Expenses NAV= Number of Outstanding units

Characteristics Of Mutual Funds:

Mutual fund actually belongs to the investors who have pooled their funds. The ownership of the Mutual fund is in the hands of the investors.

14 A Mutual fund is managed by investment professionals and others services providers, who earn a fee for their services, from the fund. The pool of the funds is invested in a portfolio of marketable investments. The value of the portfolio is updated everyday. The investors share in the fund is denominated by units. The value of the units changes with the change in the portfolios value, everyday. The value of one unit of the investment is called as the Net Asset Value or NAV The investment portfolio of the Mutual fund is created accordingly to the stated investment objectives of the funds.

Objectives Of Mutual Funds

The objectives sought to be achieved by Mutual funds are as follows: To provide an opportunity for lower income groups to acquire without much difficulty property in the form of shares. To cater mainly to the need of individual investors whose means are small? To manage investors portfolios in a manner that provides regular income, growth, safety, liquidity and diversification.

Structure of Mutual Funds

There are many entities involved and the diagram below illustrates the organizational set up of a Mutual Fund:

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SPONSOR COMPANY

Establishes the Mutual Fund as a trust registers the Mutual Fund with SEBI

Managed by a Board of Trustees

MUTUAL FUND

Hold unit-holders funds in MF Enter into an agreement with SEBI and ensure compliance.

AMC (Asset Management Company)

Float MF funds Manages the fund as per SEBI Guidelines and AMC agreement

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CUSTODIAN

Provides custodial services

REGISTRAR

Provides registrar and transfer services

TRANSFER AGENTS

Provides the network for distribution of the schemes to the investors.

Sponsor
Sponsor is the person who acting alone or in combination with another body corporate establishes a Mutual Fund. Sponsor must contribute at least 40% of the net worth of the Investment Managed and should meet the eligibility criteria prescribed under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996. The Sponsor is not responsible or liable for any loss or shortfall resulting from the operation of the Schemes beyond the initial contribution made by it towards setting up of the Mutual Fund by the sponsor.

Trust
The trust deed provisions provide that The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882 of the India Trusts Act, 1882 by the sponsor. The trust deed is registered under the Indian Registration Act, 1908.

Trustee
Trustee is usually a company (corporate body) or a Board of Trustees (body of individuals). The main responsibility of the Trustee is to safeguard the interest of the unit holders and Exchange Board of India (Mutual Funds) Regulations, 1996, the provisions of the Trust Deed and the offer Documents of the respective Schemes. At least 2/3rd directors of the Trustee are independent directors who are not associated with the sponsor in any manner.

Asset Management Company (AMC)

17 The AMC is appointed by the Trustee as the Investment Manager of the Mutual Fund. The AMC is required to be approved by the Securities and Exchange Board of India (SEBI) to act as an Asset management company of the Mutual Fund. At least 50% of the AMC are independent directors who are not associated with the Sponsor in any manner. The AMC must have a net worth of at least 10 crores at all times. An asset management company is an investment management firm that invests the pooled funds of retail investors in securities in line with the stated investment objectives. For a fee, the investment company provides more diversification, liquidity, and professional management consulting service than is normally available to individual investors.

Registrar and Transfer Agent

The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent to the Mutual Fund. The Registrar processes the application form, redemption requests and dispatches account statements to the unit holders. The Registrar and Transfer agent also handles communications with investors and updates investor records.

Custodian:
A trust company, bank or similar financial institution responsible for holding and safeguarding the securities owned within a mutual fund. A mutual fund's custodian may also act as the mutual fund's transfer agent, maintaining records of shareholder transactions and balances. Also referred to as a Mutual Fund Corporation.

Broad Guidelines Issued For A Mutual Fund

SEBI is the regulatory authority of Mutual Funds. SEBI has the following broad guidelines pertaining to Mutual Funds:

Mutual Funds should be formed as a trust under Indian Trust Act and should be operated by Asset Management Companies. Mutual Funds need to set up a Board of Trustee Companies. They should also have their Board of Directories.

18 The net worth of the Asset Management Company should be at least Rs.5 crore. Asset Management Companies and Trustees of a MF should be two separate and distinct legal entities. The Asset Management Companies or any of its companies cannot act as managers for any other fund. Asset Management Company has to get the approval of SEBI for its articles and Memorandum of Association. All Mutual Fund Schemes should be registered with SEBI. Mutual Funds should distribute minimum of 90% of their profits among the investors.

Professional Management
Qualified professionals manage our money and they have research team that continuously analyses the performance and prospects of companies. They also select suitable investment to achieve the objectives of the schemes and expertise which will add value to our investment. These fund managers are in a better position to manage our investment and get higher returns.

Diversification
The clich, dont put all our eggs in one basket it really applies to the concept of intelligent investing. Diversification lowers our risk of loss by spreading our money across various industries. It is a rare occasion when all the stocks decline at the same time and in the same proportion. Sector funds will spread our investment across only one industry and it would not be wise for our portfolio to be skewed towards these types of funds for obvious reasons.

Choice of Schemes
Mutual Funds offer a variety of schemes that will suit to our needs over a life time. When we enter a new stage in our life, we need to do is sit down with our investment advisor who will help us to rearrange our portfolio to suit our altered lifestyle.

Affordability
As small investors, many find that it is so not possible to buy shares of large corporations. Mutual funds generally buy and sell securities in large volumes which allow investors to benefit

19 from lower trading costs. The smallest investor can get started on mutual funds because of the minimal investment requirements. we can invest with a minimum of Rs. 500 in a on a regular basis.

Tax Benefits
Investments held by investors for a period of 12 months or more qualify for Capital gains and will be taxed accordingly (10% of the amount by which the investment appreciated, or 20% after factoring in the benefits of cost indexation, whichever is lower). These investments also get the benefits of indexation.

Liquidity
With open-ended funds, we can redeem all or part of our investment any time we wish and receive the current value of the shares or the NAV related price. Funds are more liquid than most investment in shares, deposits and bonds and the process is standardized, making it quick and efficient so that we can get our cash in hand as soon as possible.

Transparency
The performance of a Mutual fund is reviewed by various publications and rating agencies, making it easy for investors to compare one to the other. Once we are part of a Mutual fund scheme, we are provided with regular updates, for example daily NAVs, as well as information on the specific investment made and the fund managers strategy and out look of the scheme.

Well Regulated
All Mutual Funds are registered by SEBI and they function within the provision of strict regulations designed to protect the interests of investors. The operations of Mutual Funds are regularly monitored by SEBI.

Flexibility:

20 Through features such as regular investment plans, regular withdrawal plans and dividend reinvestment plans, we can systematically invest or withdraw funds accordingly to our needs and convenience.

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.

Types Of Mutual Fund Schemes

The Mutual Funds can be classified under the following types: According to the Structure

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Open- Ended Scheme

An open-ended scheme is a scheme in which an investor can buy and sell units on a daily basis. The scheme has a perpetual existence and flexible, ever changing corpus. Open-Ended schemes do not have a fixed maturity period. The investors are free to buy and sell any number of units, at any point of time, at prices that are linked to the NAV of the units. In these schemes the investor can invest and disinvest any amount, any time after a short initial lock in period. This scheme gives investors with instant liquidity and fund announces sale and repurchase price from time to time. The units can be bought from and sold to any Mutual Fund.

Advantages of Open-Ended Funds Over Close-Ended Funds

Any time Entry Option. This provides ready liquidity to the investors and avoids reliance on transfer deeds, signature verifications and bad deliveries. Allows to enter the fund at any time and even to invest at regular intervals. Any time Exit Option.

Close-Ended Scheme
A Close-ended scheme has a stipulated maturity period. E.g. 5-7 years. A Close-ended scheme is one in which the subscription period for the Mutual Fund remains open only for a specific period, called the redemption period. At the end of this period, the entire corpus is

22 disinvested and the proceeds distributed to unit holders. After final distribution the scheme ceases to exist. Such schemes can be rolled over by approval of unit holders.

Reasons For Fluctuations in close-Ended Funds

Investors doubts about the abilities of the funds management. Lack of sales effort (Brokers earn less commission on closed end schemes than on open ended schemes). Riskiness of the fund. Lack of marketability of the funds units.

Interval Schemes
Interval schemes are those that combine both the features of both open-ended and close-ended schemes. The units may be traded on the stock exchange or may be open for sale redemption during predetermined intervals at NAV related prices.

Role Of Mutual Funds In Financial Markets

Mutual Funds play a significant role in the development of the financial market and this has been proved in the developed countries like United States, United Kingdom and Japan. India is at its first stage of a revolution that has already peaked in United States. In United States, the asset base of mutual funds is much higher than its bank deposits. In India, mutual funds assets are not even 10% of the bank deposits, but this trend is only at the beginning. The mutual funds in India have emerged as strong financial intermediaries and are playing a very important role in brining stability to the financial system and efficiency to resource allocation. Mutual funds help corporate in raising funds for their financial needs leads to the overall growth of the economy. The active involvement of Mutual funds in promoting economic development can be seen not only in terms of their participation in the savings market but also in their dominant presence in the money and the capital market. A developed financial market is critical to build overall economic development and Mutual funds play an active role in promoting an active healthy market. Mutual funds increase liquidity in the money market. The asset holding pattern of mutual fund in India indicates the dominant role of the mutual funds in the money and capital markets. The private corporate sector in India is a deficit sector and the gap between demand

23 and supply of financial resources is met by funds raised through loans, advances and issuance of securities.

However, the buoyancy in the capital market has increased the reliance of the corporate sector has more than doubled. The changing pattern of corporate financing indicates that the banking sector is loosing its prominence vis--vis the other financial sector. Direct financing by mutual funds to the corporate sector has substantially increased after SEBI guidelines allowed the corporate sector to reserve 20% of the public issues for Indian Mutual funds. Mutual funds have also widened the private placement market for corporate securities. Mutual funds have enabled the corporate sector to raise capital at reduced costs and have opened an avenue for alternative source of capital. Mutual funds in India have merged as a critical institutional linkage among various tax incentives and benefits on mutual fund investment are offered by the Government their role in the mobilization of savings and the development of the economy will assume more significance. They provide much needed impetus to the money market and the stock markets, in addition to direct and indirect support to the corporate sector. Above all mutual funds have given a new direction to the flow of personal savings and semiurban areas to reap benefits of stock market investments. Indian mutual funds are thus playing a very crucial development role in allocation resources in the emerging market economy.

Net Asset Value (NAV)

Net Asset Value is the market value of assets of the scheme minus its liabilities. The per unit NAV is the net asset value of the scheme divide by the number of units outstanding valuation date.

Sale Price
The price we pay when we invest in scheme also called offer price. It may include a sale load.

Repurchase Price
It is the price at which a close-ended schemes repurchases its unit and it may include a back-end load. This is also called Bid price.

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Redemption Price
It is the price at which a open-ended schemes repurchases their units and closed- ended schemes redeem their units on a maturity. Such prices are NAV related.

Sales Load / Entry Load

It is a charge collected by a scheme when it sells the units also called Fronted load. Schemes that do not charge a load are called No Load schemes.

Repurchase / Back-End/ Exit Load

It is a charge collected by a scheme when it buys back units from the unit holders.

INDUSTRY PROFILE
BOMBAY STOCK EXCHANGE (BSE) About the Bombay Stock Exchange
Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich heritage. Popularly known as "BSE", it was established as "The Native Share Stock Brokers Association" in 1875. It is the first stock exchange in the country to obtain permanent recognition in 1956 from the Government of India under the Securities Contracts (Regulation) Act, 1956.The Exchange's pivotal and pre-eminent role in the development of the Indian capital market is

25 widely recognized and its index, SENSEX, is tracked worldwide. Earlier an Association of Persons (AOP), the Exchange is now a demutualised and corporatised entity incorporated under the provisions of the Companies Act, 1956, BSE (Corporatisation and Demutualization) Scheme, 2005 notified by the Securities and Exchange Board of India (SEBI). With demutualization, the trading rights and ownership rights have been de-linked effectively addressing concerns regarding perceived and real conflicts of interest. The Exchange is professionally managed under the overall direction of the Board of Directors. The Board comprises eminent professionals, representatives of Trading Members and the Managing Director of the Exchange. The Board is inclusive and is designed to benefit from the participation of market intermediaries. In terms of organization structure, the Board formulates larger policy issues and exercises overall control. The committees constituted by the Board are broad-based. The day-to-day operations of the Exchange are managed by the Managing Director and a management team of professionals.

Exchange has a nation-wide reach with a presence in 417 cities and towns of India. The systems and processes of the Exchange are designed to safeguard market integrity and enhance transparency in operations. During the year 2004-2005, the trading volumes on the Exchange showed robust growth. The Exchange provides an efficient and transparent market for trading in equity, debt instruments and derivatives. The BSE's On Line Trading System (BOLT) is a proprietary system of the Exchange and is BS 7799-2-2002 certified. The surveillance and clearing & settlement functions of the Exchange are ISO 9001:2000 certified.

History of the Bombay Stock Exchange:

The Bombay Stock Exchange is known as the oldest exchange in Asia. It traces its history to the 1850s, when stockbrokers would gather under banyan trees in front of Mumbai's Town Hall. The location of these meetings changed many times, as the number of brokers constantly increased. The group eventually moved to Dalal Street in 1874 and in 1875 became an official organization

26 known as 'The Native Share & Stock Brokers Association'. In 1956, the BSE became the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act. The Bombay Stock Exchange developed the BSE Sensex in 1986, giving the BSE a means to measure overall performance of the exchange. In 2000 the BSE used this index to open its derivatives market, trading Sensex futures contracts. The development of Sensex options along with equity derivatives followed in 2001 and 2002, expanding the BSE's trading platform. Historically an open-cry floor trading exchange, the Bombay Stock Exchange switched to an electronic trading system in 1995. It took the exchange only fifty days to make this transition.

COMPANY PROFILE
Inter-connected Stock Exchange of India Limited (ISE) is a national-level stock exchange, providing trading, clearing, settlement, risk management and surveillance support to its Trading Members. It has 841 Trading Members, who are located in 131 cities spread across 25 states. These intermediaries are administratively supported through the regional offices at Delhi, Kolkata, Patna, Ahmedabad, Coimbatore and Nagpur, besides Mumbai. ISE has been promoted by 14 Regional stock exchanges to provide cost effective trading linkage to all the members of the participating Exchanges. ISE aims to address the needs of small

27 companies and retail investors by harnessing the potential of regional markets, so as to transform them into a liquid and vibrant market using state-of-the art technology and networking. ISE has floated ISE Securities & Services Limited as a wholly owned subsidiary under the policy formulated by the Securities and Exchange Board of India (SEBI) for Revival of Small Stock Exchanges. The policy enunciated by SEBI permits a stock exchange to float a subsidiary, which can take up membership of larger stock exchanges, such as the National Stock Exchange of India Limited (NSE), and Bombay Stock Exchange Limited (BSE). ISS has been registered by SEBI as a Trading-cum-Clearing Member in the Capital Market segment and Futures & Options segment of NSE and Capital Market segment of BSE. Trading Members of ISE can access NSE and BSE by registering themselves as Sub-brokers of ISS. Thus, the trading intermediaries of ISS can access other markets in addition to the ISE market. ISS, thus provides the investors in smaller cities, a one-stop solution for cost-effective and efficient trading and settlement services in securities. Complementing the stock trading function, ISEs depository participant (DP) services reach out to intermediaries and investors at industry-leading prices. The full suite of DP services are offered using online software, accessible through multiple connectivity modes - leased lines, VSATs and internet. Operation of the demat account by a client requires just a few mouse clicks. The Research Cell has been established with the objective of carrying out quality research on various facets of the Indian financial system in general and the capital market in particular. It brings out a monthly newsletter titled NISE and a fortnightly publication titled V share. The Research Cell plans to expand its activities by publishing a host of value based research publications, covering a number of areas, such as equities, derivatives, bonds, mutual funds, risk management, pension funds, money markets and commodities. The ISE Training Centre conducts class-room training programmes on different subjects related to the capital market, such as equities trading and settlement, derivatives trading, day trading, arbitrage operations, technical analysis, financial planning, compliance requirement, etc. Through these

28 courses, the training centre provides knowledge to stockbrokers, sub-brokers, professionals and investors to also appear for the certificate courses conducted by the stock exchanges. It also aims to make and build the professional careers of MBAs, post graduates and graduates, with a view to enabling them to work effectively in securities trading, risk management, financial management, corporate finance disciplines or function as intermediaries (viz. stock brokers, sub-brokers, merchant bankers, clearing bankers, etc.)

MISSION OF ISE
ISE endeavors to consolidate the small, fragmented and less liquid markets into a national-level, liquid market by using state-of-the-art infrastructure and support systems.

OBJECTIVES OF ISE
Create a single integrated national level solution with access to multiple markets for providing high cost-effective service to millions of investors across the country. Create a liquid and vibrant national level market for all listed companies in general and small capital companies in particular. Optimally utilize the existing infrastructure and other resources of participating Stock Exchanges, which are under-utilized now.

Provide a level playing field to small Traders and Dealers by offering an opportunity to participate in a national markets having investment-oriented business. Provide clearing and settlement facilities to the Traders and Dealers across the Country at their doorstep in a decentralized mode. Spread demats trading across the country.

SAILENT FEATURES OF ISE

NETWORK OF INTERMEDIARIES

29 As at the beginning of the financial year 2003-04, 548 intermediaries (207 Traders and 341 Dealers) are registered on ISE. A broad of members forms the bedrock for any Exchange, and in this respect, ISE has a large pool of registered intermediaries who can be tapped for any new line of business.

ROBUST OPERATIONAL SYSTEMS

The trading, settlement and funds transfer operations of ISE and ISS are completely automated and state-of-the-art systems have been deployed. The communication network of ISE, which has connectivity with over 400 trading members and is spread across46 cities, is also used for supporting the operations of ISS. The trading software and settlement software, as well as the electronic funds transfer arrangement established with HDFC Bank and ICICI Bank, gives ISE and ISS the required operational efficiency and flexibility to not only handle the secondary market functions effectively, but also by leveraging them for new ventures.

SKILLED AND EXPERIENCED MANPOWER

ISE and ISS have experienced and professional staff, who have wide experience in Stock Exchanges/ capital market institutions, with in some cases, the experience going up to nearly twenty years in this industry. The staff has the skill-set required to perform a wide range of functions, depending upon the requirements from time to time.

AGGRESSIVE PRICING POLICY

The philosophy of ISE is to have an aggressive pricing policy for the various products and services offered by it. The aim is to penetrate the retail market and strengthen the position, so that a wide variety of products and services having appeal for the retail market can be offered using a common distribution channel. The aggressive pricing policy also ensures that the intermediaries have sufficient financial incentives for offering these products and services to the end-clients.

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Trading, Risk Management and Settlement Software Systems

The ORBIT (Online Regional Bourses Inter-connected Trading) and AXIS (Automated Exchange Integrated Settlement) software developed on the Microsoft NT platform, with consultancy assistance from Microsoft, are the most contemporary of the trading and settlement software introduced in the country. The applications have been built on a technology platform, which offers low cost of ownership, facilitates simple maintenance and supports easy up gradation and enhancement. The softwares are so designed that the transaction processing capacity depends on the hardware used; capacity can be added by just adding inexpensive hardware, without any additional software work.

VIBRANT SUBSIDIARY OPERATIONS

ISS, the wholly owned subsidiary of ISE, is one of the biggest Exchange subsidiaries in the country. On any given day, more than 250 registered intermediaries of ISS traded from 46 cities across the length and breadth of the country.

Shri K. Rajendran Nair Shri A. K. Mago Shri H. C. Parekh Shri K. V. Thomas Shri Santosh Muchhal Shri Bharat M. Meisheri Shri Debaraj Biswal

- Chairman, Public Interest Director - Public Interest Director - Public Interest Director - Shareholder Director - Shareholder Director - Shareholder Director - Shareholder Director

31

Shri Dharmendra B. Mehta Shri P. Sivakumar Shri Surendra Holani Shri Rajeeb Ranjan Kumar Shri P. J. Mathew

- Shareholder Director - Shareholder Director - Trading Member Director - Trading Member Director - Managing Director

32

CHAPTER-4

DATA ANALYSIS AND INTERPRETATION

SBI MUTUAL FUNDS SBI MAGNUM BALANCED FUND

FUND FEATURES Type of Scheme Open Ended

33

Nature Option Inception Date Face Value (Rs/Unit) Fund Size in Rs. Cr.

Equity & Debt Growth Oct 9, 1995 10 374.66 as on Apr 30, 2012

Last Dividend Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load

20 % as on Feb 3, 2004 1000 Daily Daily Entry Load is 0%.

Exit Load

If redeemed bet. 0 Year to 1 Year; Exit load is 1%.

OBJECTIVE
To provide investors long term capital appreciation along with the liquidity of an openended scheme by investing in a mix of debt and equity. The scheme will invest in a diversified portfolio of equities of high growth companies and balance the risk through investing the rest in a relatively safe portfolio of debt

Asset Allocation (%)

Cash & Equivalent 9.84

Equity 73.01

Debt 17.16

34

10%

17%

Equity Debt Cash & Equivalent 73%

TOP 10 HOLDINGS
Perce ntage of Net Assets 9.84 Percenta ge of Change with last month -26.06

Stock Cash

Sector Current Assets

P/E NA

Qty NA

Valu e 36.86

35

ICICI BANK LTD. HDFC Bank Ltd Sundaram Finance Ltd. Muthoot Finance Ltd. Bajaj Holdings & Investment Ltd. Torrent Pharmaceutical s Ltd DrReddys Laboratories Ltd. WABCO India Ltd. State Bank of India

Banks Banks

15.71 24.65

7.06 6.37

299,69 4 439,75 7

26.44 23.86

-3.87 -8.24

NBFC NBFC Auto & Auto Ancillaries Pharmaceut icals & Biotechnolo gy Pharmaceut icals & Biotechnolo gy Auto & Auto Ancillaries

10.54 5.59

6.14 4.47

NA 1,400, 590 178,27 3

23.01 16.75

0.2 -5.38

16.7

4.01

15.03

2.89

20.42

3.73

209,37 0

13.96

-3.45

34.44

3.29

69,883

12.32

0.08

21.74

3.19

69,802

11.94

10.4

Banks

18.69

3.14

54,996

11.76

2,701.31

SECTOR ALLOCATION(%)

Auto & Auto Ancillaries Banks Construction and Infrastructure

13.86 18.93 1.66

36

Construction materials Consumer Durables Current Assets FI FMCG Garments, Fashion wear, Lifestyle HFC Media and Entertainment NBFC Non Ferrous metals Pharmaceuticals & Biotechnology Software and Consultancy Services Sovereign Telecom Services

2.35 2.49 9.84 2.78 1.83 1.23 4.11 2.72 13.13 2.66 11.86 7.3 1.34 1.9

37

Telecom Services Sovereign Software and Consultancy Services Pharmaceuticals & Biotechnology Non Ferrous metals NBFC Media and Entertainment HFC Garments, Fashionwear, Lifestyle FMCG FI Current Assets Consumer Durables Construction materials Construction and Infrastructure Banks Auto & Auto Ancillaries 0 5 10 15 20

Sector Name

Series1

sector Allocation

RISK & RETURN

38

SCHEME PERFORMANCE (%) AS ON MAY 22, 2012 1 Month -4.8 3 Months -2.88 6 Months 5.97 1 Year -6.58 3 Years 5.27 5 Years 4.28 Since Inception 13.69

SBI OPEN ENDED BALANCED FUND

DATE NAV 31-03-2009 28.73 31-03-2010 48.46 31-03-2011 50.51 31-03-2012 47.14

PERFORMANCE OF THE FUND (2009-12)

NAV
NAV 48.46 50.51

47.14

28.73

31-03-2009

31-03-2010

31-03-2011

31-03-2012

SBI MAGNUM BLUE CHIP FUND

39

FUND FEATURES Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Fund Size in Rs. Cr. Open Ended Equity Growth Feb 14, 2006 10 706.48 as on Apr 30, 2012

Last Dividend Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load

NA 5000 Daily Daily Entry Load is 0%. Exit Load is 0%.

OBJECTIVE
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 whose market capitalization is atleast equal to or more than the least market capitalized stock of BSE 100 Index

ASSET ALLOCATION(%)

40

Equity 93.52

Debt 0

Cash & Equivalent 6.48

0% 6%

Equity Debt Cash & Equivalent

94%

TOP 10 HOLDINGS
Percentage of Net Percent age of

Stock

Sector

P/E

Qty

Value

41 Assets Change with last month 822,370 1,250,000 44.61 39.57 4.25 45.73

HDFC Bank Ltd Tata Motors Ltd

Infosys Ltd. ICICI BANK LTD.

Banks Auto & Auto Ancillaries Software and Consultancy Services Banks Petroleum, Gas and petrochemical products

24.65 60.91

6.31 5.6

18.73 15.71

5.51 5.04

158,037 403,527

38.91 35.61

15.09 20.19

Reliance Industries Ltd

12.18

4.63

438,544

32.68

-0.4

Yes Bank Tata Consultancy Services Ltd. Divis Laboratories Limited Dr Reddys Laboratories Ltd. Housing Development Finance Corporation Ltd

Banks Software and Consultancy Services Pharmaceuticals & Biotechnology Pharmaceuticals & Biotechnology

12.68

3.87

781,696

27.34

-4.6

24.01

3.8

215,202

26.83

7.11

22.47

3.76

309,982

26.54

11.67

34.44

3.25

130,222

22.96

0.09

HFC

25.27

3.22

337,975

22.77

0.05

SECTOR ALLOCATION(%)

42 Auto & Auto Ancillaries Banks Chemicals Construction and Infrastructure Construction materials Current Assets Engineering and Capital Goods FI FMCG Food & Food Processing, Beverages HFC Industrial Products Media and Entertainment Mining and Minerals Miscellaneous Petroleum, Gas and petrochemical products Pharmaceuticals & Biotechnology Power Generation Power Transmission Software and Consultancy Services Steel and Ferrous Metal Telecom Services Tobacco & Pan Masala 10.73 16.24 3.37 0.25 2.22 6.48 0.4 1.37 6.93 0.27 3.22 0.47 1.96 2.02 0.07 11.25 11.16 1.05 1.56 14.81 0.88 3.14 0.13

43

Tobacco & Pan Masala Telecom Services Steel and Ferrous Metal Software and Consultancy Services Power Transmission Power Generation Pharmaceuticals & Biotechnology Petroleum, Gas and petrochemical products Miscellaneous Mining and Minerals Sector Name Media and Entertainment Industrial Products HFC Food & Food Processing, Beverages FMCG FI Engineering and Capital Goods Current Assets Construction materials Construction and Infrastructure Chemicals Banks Auto & Auto Ancillaries 0 2 4 6 8 10 12 14 16 18 Series1

Sector Allocation

RISK & RETURN

44 SCHEME PERFORMANCE (%) AS ON MAY 21 2012 1 3 6 Month Months Months 1 Year 3 Years -5.92 -7.46 5.51 -6.83 5.67

5 Years 1.64

Since Inception 4.31

SBI OPEN-ENDED BLUECHIP FUND

DATE NAV 31-03-2009 7.65 31-03-2010 14.1 31-03-2011 14.56 31-03-2012 13.78

PERFORMANCE OF THE FUND(2009-12)

NAV
NAV 14.1 14.56 13.78

7.65

31-03-2009

31-03-2010

31-03-2011

31-03-2012

SBI MAGNUM EQUITY FUND

45 FUND FEATURES Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Fund Size in Rs. Cr. Open Ended Equity Growth Jan 1, 1991 10 517.4 as on Apr 30, 2012 50 % as on Oct 4, 2006 1000 Daily Daily Entry Load is 0%. If redeemed bet. 0 Year to 1 Year; Exit load is 1%.

Last Dividend Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load

Exit Load

OBJECTIVE 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.

ASSET ALLOCATION(%)

46

Equity 91.8

Debt 0

Cash & Equivalent 8.2

0% 8%

Equity Debt Cash & Equivalent

92%

TOP 10 HOLDINGS

47 Percentage of Change with last Value month 50.24 28.69

Stock ICICI BANK LTD.

Sector Banks Software and Consultancy Services FMCG Telecom Services

P/E 15.71

Percentage of Net Assets 9.71

Qty 569,419

Infosys Ltd. ITC Ltd Bharti Airtel Ltd State Bank of India

18.73 32.92 19.66

7.14 6.64 5.4

150,030 1,400,290 899,420

36.94 34.38 27.93

-0.82 8.25 -7.84

Banks

18.69

5.37

129,991

27.79

2.04

Pharmaceuticals Dr Reddys Laboratories & Biotechnology 34.44 Ltd. HDFC Bank Ltd Reliance Industries Ltd Banks Petroleum, Gas and petrochemical products 24.65

4.76 4.61

139,766 439,757

24.64 23.86

-9.61 17.64

12.18

4.18

290,039

21.61

-0.41

Software and Tata Consultancy Consultancy Services Ltd. Services Tata Motors Ltd Auto & Auto Ancillaries

24.01

4.09

169,768

21.16

6.58

60.91

3.53

577,122

18.27

14.43

SECTOR ALLOCATION(%)

48

Auto & Auto Ancillaries Banks Chemicals Current Assets Engineering and Capital Goods FMCG HFC Mining and Minerals NBFC Petroleum, Gas and petrochemical products Pharmaceuticals & Biotechnology Power Transmission Software and Consultancy Services Steel and Ferrous Metal Telecom Services

8.68 19.69 2.11 8.2 2.13 6.64 2.97 2.11 2.99 10.38 9.97 3.88 13.31 1.53 5.4

49

Telecom Services Steel and Ferrous Metal Software and Consultancy Services Power Transmission Pharmaceuticals & Biotechnology Petroleum, Gas and petrochemical Sector Name NBFC Mining and Minerals HFC FMCG Engineering and Capital Goods Current Assets Chemicals Banks Auto & Auto Ancillaries 0 5 10 15 20 25 Series1

Sector Allocation

RISK & RETURN

50

SCHEME PERFORMANCE (%) AS ON MAY 22, 2012 Month -6.81 3 Months -7.52 6 Months 3.82 1 Year -6.26 3 Years 9.49 5 Years 6.32 Since Inception 10.46

SBI OPEN-ENDED EQUITY FUND

DATE NAV

31-3--2009 20.49

31-3-2010 39.77

31-3-2011 44.02

31-3-2012 42.72

PERFORMANCE OF THE FUND(2009-12)

NAV
NAV 44.02 39.77 42.72

20.49

31-3--2009

31-3-2010

31-3-2011

31-3-2012

51

SBI MAGNUM INCOME FUND

FUND FEATURES Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Fund Size in Rs. Cr. Last Dividend Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Open Ended Debt Growth Nov 25, 1998 10 54.5 as on Apr 30, 2012 NA 2000 Daily Daily Entry Load is 0%. If redeemed bet. 0 Months to 6 Months; Exit load is 0.5%.

Exit Load OBJECTIVE

The objective of the scheme is to provide the investors an opportunity to earn, in accordance with their requirements, through capital gains or through regular dividends, returns that would be higher than the returns offered by comparable investment avenues through investment in debt & money market securities

52

ASSET ALLOCATION(%)
Cash & Equivalent 52.13

Equity 0

Debt 47.87

0%

48% 52%

Equity Debt Cash & Equivalent

TOP 10 HOLDINGS

53

Stock

Sector Current Assets Sovereign

P/E

Percentage of Net Assets

Qty

Percentage of Change with last Value month

CBLO GOI Power Finance Corporation Ltd Vijaya Bank Industrial Development Bank of India Ltd. Andhra Bank Sundaram Finance Ltd. Housing Development Finance Corporation Ltd Axis Bank Ltd Rural Electrification Corporation

NA NA

26.79 9.24

NA NA

14.6 5.04

10 148.54

FI Banks

7.96 5.01

9.14 8.46

NA NA

4.98 4.61

0.13 1.13

Banks Banks NBFC

6.41 4.95 10.54

8.44 8.44 8.09

NA NA NA

4.6 4.6 4.41

1.09 1.14 0.29

HFC Banks

25.27 10.78

8.02 7.91

NA NA

4.37 4.31

0.91 0.43

FI

7.48

5.47

NA

2.98

-0.39

SECTOR ALLOCATION(%)

54

Banks

33.25

Current Assets

26.79

FI

14.61

HFC

8.02

NBFC

8.09

Sovereign

9.24

55

Sovereign

NBFC

Sector Name

HFC

FI

Series1

Current Assets

Banks

10

15

20

25

30

35

Sector Allocation

RISK&RETURN

56

SCHEME PERFORMANCE (%) AS ON MAY 22,2012 1 3 6 Month Months Months 1 Year 3 Years 1.03 2.09 6.75 10.51 6.53

5 Years 5.69

Since Inception 7.34

SBI OPEN ENDED INCOME FUND

DATE NAV 31-03-2009 21.17 31-03-2010 22.41 31-03-2011 23.45 31-03-2012 25.73

PERFORMANCE OF THE FUND(2009-12)

NAV
NAV 25.73

21.17

22.41

23.45

31-03-2009

31-03-2010

31-03-2011

31-03-2012

SBI MAGNUM INDEX FUND

57 FUND FEATURES Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Fund Size in Rs. Cr. Last Dividend Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Open Ended Equity Growth Jan 17, 2002 10 35.73 as on Apr 30, 2012 NA 5000 Daily Daily Entry Load is 0%.

Exit Load

If redeemed bet. 0 Days to 7 Days; Exit load is 1%.

OBJECTIVE

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.

58

ASSET ALLOCATION(%)
Cash & Equivalent 3.81

Equity 96.19

Debt 0

0% 4%

Equity Debt Cash & Equivalent

96%

TOP 10 HOLDINGS

59

Stock ITC Ltd

Sector FMCG

P/E 32.92

Percentage of Net Assets 7.73

Qty 112,476

Percentage of Change with last Value month 2.76 8.15

Reliance Industries Ltd

Petroleum, Gas and petrochemical products 12.18 Software and Consultancy Services Banks

7.39

35,437

2.64

-0.75

Infosys Ltd. ICICI BANK LTD. Housing Development Finance Corporation Ltd HDFC Bank Ltd Larsen & Toubro Limited

18.73 15.71

6.98 5.98

10,127 24,205

2.49 2.14

-14.22 -0.68

HFC Banks Engineering and Capital Goods

25.27 24.65

5.78 5.73

30,643 37,719

2.06 2.05

9.59 4.55

18.44

3.89

11,321

1.39

-6.2

Software and Tata Consultancy Consultancy Services Ltd. Services Tata Motors Ltd State Bank of India Auto & Auto Ancillaries Banks

24.01

3.75

10,750

1.34

6.65

60.91 18.69

3.28 3.27

36,995 5,458

1.17 1.17

14.9 2.26

60

SECTOR ALLOCATION(%) Auto & Auto Ancillaries Banks Chemicals Construction and Infrastructure Construction materials Current Assets Engineering and Capital Goods FI FMCG HFC Mining and Minerals Non Ferrous metals Petroleum, Gas and petrochemical products Pharmaceuticals & Biotechnology Power & Control equipment Manufacturer Power Generation Power Transmission Realty Software and Consultancy Services Steel and Ferrous Metal Telecom Services Utilities - Gas, Power 8.81 19.38 0.91 0.51 2.35 3.81 3.89 0.84 10.25 5.78 1.68 1.81 12.3 4.05

1.05 1.23 1.32 0.4 12.68 3.3 2.22 1.43

61

Utilities - Gas, Power Telecom Services Steel and Ferrous Metal Software and Consultancy Services Realty Power Transmission Power Generation Power & Control equipment Pharmaceuticals & Biotechnology Petroleum, Gas and petrochemical Non Ferrous metals Mining and Minerals HFC FMCG FI Engineering and Capital Goods Current Assets Construction materials Construction and Infrastructure Chemicals Banks Auto & Auto Ancillaries 0 5 10 15 20 25

Sector Name

Series1

Sector Allocation

62

RISK&RETURN
SCHEME PERFORMANCE (%) AS ON MAY 22,2012 1 3 6 Month Months Months 1 Year 3 Years -8.23 -12.01 0.49 -11.26 4.48

5 Years 1.25

Since Inception 14.68

SBI OPEN ENDED INDEX FUND

DATE NAV 31-03-2009 25.82 31-03-2010 44.60 31-03-2011 49.53 31-03-2012 45.08

PERFORMANCE OF THE FUND(2009-12)

NAV
NAV 49.53 44.6

45.08

25.82

31-03-2009

31-03-2010

31-03-2011

31-03-2012

63

6..SBI MAGNUM COMMA FUND FUND FEATURES

Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Fund Size in Rs. Cr.

Open Ended Equity Growth Aug 8, 2005 10 402.83 as on Apr 30, 2012

Last Divdend Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load

NA 5000 Daily Daily Entry Load is 0%. If redeemed bet. 0 Year to 1 Year; Exit load is 1%.

OBJECTIVE
The investment objective of the scheme will be to provide attractive returns to the Magnum holders / Unit holders by means of capital appreciation through an actively managed portfolio of debt, equity and money market instruments. Income generated through the receipt of coupon payments, the amortization of the discount on the debt instruments, receipt of dividends or purchase and sale of securities in the underlying portfolio, will be reinvested. The following table shows percentage portfolio allocation.

ASSET ALLOCATION

64

Equity 95.14

Debt 0

Cash & Equivalent 4.86

Chart Title
0% 5%

Equity Debt Cash & Equivqlent 95%

TOP 10 HOLDINGS

65

Stock Coal India Ltd.

Oil & Natural Gas Corporation Ltd

Tata Chemicals Ltd

Reliance Industries Ltd Gujarat State Fertilizers & Chemicals Ltd Power Grid Corporation of India Ltd

Sector Mining and Minerals Petroleum, Gas and petrochemical products Fertilizers, Pesticides & Agrochemicals Petroleum, Gas and petrochemical products Fertilizers, Pesticides & Agrochemicals Power Transmission Petroleum, Gas and petrochemical products Fertilizers, Pesticides & Agrochemicals Mining and Minerals Non Ferrous metals

P/E 27.06

Percentage of Net Assets 7

Qty 800,454

Value 28.2

Percentage of Change with last month 2.74

11.38

6.7

998,704

26.97

0.9

17.28

6.66

798,216

26.84

-13.7

12.18

6.47

350,047

26.08

-0.42

4.58

5.59

511,391

22.5

-33.3

17.32

5.52

1,999,100

22.24

3.06

Gujarat State Petronet Ltd. United Phosphorus Limited (New) Gujarat Mineral Development Corporation Limited Hindalco Industries Ltd

6.83

4.91

3,000,000

19.79

-13.6

23.59

4.32

1,496,780

17.41

-10.72

13.41 10.02

3.69 3.59

801,725 1,198,510

14.87 14.47

2.05 -6.85

66

SECTOR ALLOCATION (%)

Construction and Infrastructure Construction materials Current Assets Fertilizers, Pesticides & Agrochemicals Mining and Minerals Non Ferrous metals Petroleum, Gas and petrochemical products Pharmaceuticals & Biotechnology Power Generation Power Transmission Steel and Ferrous Metal Sugar Utilities - Gas, Power

1.85 4.86 4.86

23.97 10.69 6.54

25.35 1.08 1.01 5.52 8.67 4.23 1.37

67

Utilities - Gas, Power Sugar Steel and Ferrous Metal Power Transmission Power Generation Sector Name Pharmaceuticals & Biotechnology Petroleum, Gas and petrochemical Non Ferrous metals Mining and Minerals Fertilizers, Pesticides & Current Assets Construction materials Construction and Infrastructure 0 5 10 15 20 25 30 Series1

Sector Allocation

68

RISK $ RETURN
SCHEME PERFORMANCE (%) AS ON MAY 28,2012 1 3 6 5 Month Months Months 1 Year 3 Years Years -4.91 -12.41 -8.09 -20.32 2.03 2.57

Since Inception 9.87

SBI OPEN-ENDED COMMA FUND

31-032012 21.05

DATE NAV

31-03-2009 12.76

31-03-2010 24.24

31-03-2011 24.12

PERFORMANCE OF THE FUND (2009-2012)

NAV
NAV 24.24 24.12 21.05 12.76

31-03-2009

31-03-2010

31-03-2011

31-03-2012

69

PERFORMANCE EVALUATION
We are interested in discovering if the management of a mutual fund is performing well, that is, Has management done better through merely buying the market picking a large number of Securities randomly and holding them throughout period? One of the most popular ways of measuring managements performance is by comparing the yields for the managed portfolio with the market or with a random portfolio.

The following formula can be used to evaluate mutual fund performance:NAVt + DT/NAVt-1 -1

Where NAVt = per share net asset value at the end of the year t DT = capital appreciation during a year NAVt-1 = per share net asset value at the end of the year

PERFORMANCE EVALUATION OF THE FUND

NAVt-1 = 31-march 2009 NAVt = 31-march 2012

SBI MAGNUM BALANCED FUND

NAVt-1 28.73 NAVt 47.14 Dt(NAVt-NAVt-1) 18.41

Applying the formula we get:

70

2.28-1 1.28*100 128.15%

SBI MAGNUM BLUECHIP FUND

NAVt-1 7.65 NAVt 13.78 Dt(NAVt-NAVt-1) 6.13

Applying the formula we get:

2.60-1 1.60*100 160.26%

SBI MAGNUM EQUITY FUND

NAVt-1 20.49 NAVt 42.72 Dt(NAVt-NAVt-1) 22.23

Applying the formula we get

71 3.16-1 2.16*100 216.98%

SBI MAGNUM INCOME FUND

NAVt-1 21.17 NAVt 25.73 Dt(NAVt-NAVt-1) 4.56

Applying the formula we get

1.430-1 0.430*100 43.07%

SBI MAGNUM INDEX FUND

NAVt-1 25.82

NAVt 45.08

Dt(NAVt-NAVt-1) 19.26

Applying the formula we get

72

2.49-1 1.49*100 149.18%

SBI MAGNUM COMMA FUND

NAVt-1 12.76

NAVt 21.05

Dt(NAVt-NAVt-1) 8.29

Applying the formula we get

2.29-1 1.29*100 129.93%

FUND PERFORMANCE RANKING:

73

NAME OF THE FUND

NAV

RANK

SBI OPEN ENDED EQUITY FUND

216.98

SBI OPEN ENDED BLUECHIP FUND

160.26

SBI OPEN ENDED INDEX FUND

149.18

SBI OPEN ENDED COMMA FUND

129.93

SBI OPEN ENDED BALANCED FUND

128.15

SBI OPEN ENDED INCOME FUND

43.07

SBI MUTUAL FUNDS SCHEMES RANKING CHART:

74

NAV 216.98 160.26 149.18

RANK

129.93

128.15

43.07 1 SBI OPEN ENDED EQUITY FUND 2 3 4 5 6

SBI OPEN SBI OPEN ENDED ENDED BLUECHIP INDEX FUND FUND

SBI OPEN SBI OPEN SBI OPEN ENDED ENDED ENDED COMMA BALANCED INCOME FUND FUND FUND

INTERPRETATION:
From the table it is observed that SBI magnum equity fund is good when compared to remaining funds. The performance of the fund is good, so the first rank is given to SBI Equity fund, second rank is given to SBI magnum blue chip fund, Third rank is given to SBI magnum index fund, fourth rank is given to SBI magnum comma fund, fifth rank is given to SBI magnum balanced fund and sixth rank is given to SBI magnum income fund. It is taken on the basis of the net asset value.

FINDINGS

75

As per my knowledge a fund with a better diversification of funds and opting for changes based upon the market fluctuation. Under the eyes of efficient fund manager can produce a high return. The Biggest advantage with mutual funds is that the investor dont need huge amount to be invested in all his favorite stocks and bonds. Most mutual funds have a minimum investment of RS 5000 This analysis has given a clear difference between equity & non-equity funds Debts are better for stable returns & not only stable but also some appraisal in long run In this analysis we can say that equity are yielding well returns when thy are individually but with risk

In this analysis we can say that equity are yielding well returns when they are individually I long run

Funds performance may be vastly different owing to one or many of below factors: 1) Size of the funds 2) Investment objective 3) Risk portfolio 4) Portfolio composition 5) Expense ratios When we equity funds like SCCEF it is well diversified scheme where by it has indifferent industries whose stocks are hot now such as SBI, BAJAJ AUTO LTD. In addition, different AAA graded scripts where generally have high stability will reduce unfortunate risk. When we gone for debt its still stable but not satisfactory because on a average GRINDLAYS DYNAMIC BOND FUND giving 0.368 & another debt fund giving 0.1009.

76

SUGGESTIONS
The fund house has to reduce the total risk involved in the fund in order to increase the return with good portfolio construction. The fund house should select the innovative way of portfolio construction and should see the attracting areas of investing funds. The fund houses should concentrate on the market conditions according to that they have to set the benchmark and invest in different sectors. The fund houses should invest in good and attracting sectors to reduce standard deviation. The fund house should try to reduce little more beta in order to generate more returns to investors.

77

CONCLUSIONS
Indian mutual fund industry possesses great potential for growth. The drivers for growth are Structural changes in the financial sector The private sector has grown by 51.84% since 1999, The growth has been primarily in open-ended products. Development in the previous three years was dominated by the growth of debt products. But with the positive outlook for equity markets, there have been increasing flows into equity products.

78

BIBLIOGRAPHY

BOOKS
MUTUAL FUNDS IN INDIA : S.KRISHNA MURTHY, Second edition, Chandra Bose calcutta : DONALD E. FISHER & RONALD J. JORDAN : PRASANNA CHANDRA : V.A.AVADHANI, Fourth edition Himalaya Publications, Hyderabad

Security analysis and Portfolio management Management Financial Investment Management

NEWS PAPERS
The Economic Times Business Line Business standard Business world

WEBSITES
www.mutualfundsindia.com www.nseindia.com www.standardchartedmf.com www.amfiindia.com www.bseindia.com

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