A PROJECT REPORT ON

“A STUDY OF SBI MUTUAL FUNDS”
A detailed study done in

SBI
Submitted in partial fulfillment of the requirement for the award of degree of Bachelor in Business Administration (BBA) under Bharati Vidyapeeth UniversityPune

Submitted by SNEHALCHAVAN ROLL NO: 10 BATCH: 2007-2010 Under the guidance of DR. GOVIND P. SHINDE Bharati Vidyapeeth’s Institute of Management & Entrepreneurship Development, Sector 8, CBD-Belapur, Navi Mumbai –400614

1

ACKNOWLEDGEMENT

The opportunity to get practical training in a reputed organization fulfills the felt gap between the theory and practical. In the case of a student of finance & control, this aspect assumes an additional dimension. I hereby acknowledge SBI mutual funds providing the constant guidance for encouragement which helped me a lot to be successful in my efforts. This formal acknowledgement will hardly be sufficient to express my deep sense of gratitude to all of them. It was a memorable experience while doing my winter training project on a study of SBI Mutual Funds. I would also like to thanks Dr. D.Y.PATIL director of BVIMED,NAVI MUMBAI and PROF.G.SHINDE my faculty guide without whom this project report could not be successfully completed. Above all, I would like to thank almighty God, who helped me in successfully completing my winter training project.

SNEHAL CHAVAN

2

DECLARATION

This is to certify that Winter Training Report entitled “A Study of SBI Mutual Fund”. Which is submitted by me in partial fulfillment of the requirement for the award of degree Bachelor of Business Administration (BBA), at BHARTI VIDYAPEETH INSTITUTION OF ENTERPRENURSHIP DEVELOPMENT, NAVI MUMBAI comprises only my original work and due acknowledgement has been made in the text to all other material used.

Snehal chavan

EXECUTIVE SUMMARY
3

Which type of Product they prefer.In few years Mutual Fund has emerged as a tool for ensuring one’s financial well being. This Project as a whole can be divided into two parts. The trick for converting a person with no knowledge of mutual funds to a new Mutual Fund customer is to understand which of the potential investors are more likely to buy mutual funds and to use the right arguments in the sales process that customers will accept as important and relevant to their decision. The analysis and advice presented in this Project Report is based on market research on the saving and investment practices of the investors and preferences of the investors for investment in Mutual Funds. the number who decide to invest in mutual funds increases to as many as one in five people. This Project gave me a great learning experience and at the same time it gave me enough scope to implement my analytical ability. Mutual Funds have not only contributed to the India growth story but have also helped families tap into the success of Indian Industry. Which Option (Growth or Dividend) they prefer or Which Investment Strategy they follow (Systematic Investment Plan or One time Plan). This Report will help to know about the investors’ Preferences in Mutual Fund means Are they prefer any particular Asset Management Company (AMC). 4 . As information and awareness is rising more and more people are enjoying the benefits of investing in mutual funds. The main reason the number of retail mutual fund investors remains small is that nine in ten people with incomes in India do not know that mutual funds exist. But once people are aware of mutual fund investment opportunities.

The second part of the Project consists of data and its analysis collected through survey done on 200 people. This Project covers the topic “A STUDY OF PREFERENCES OF THE INVESTERS FOR THE INVESTMENT IN MUTUAL FUND. I hope the research findings and conclusion will be of use. I visited other AMCs in Mumbai to get some knowledge related to my topic. Research Methodology. One can have a brief knowledge about Mutual Fund and its basics through the Project. Objectives of the study. I also taken interview of many People those who were coming at the SBI Branch where I done my Project.” The data collected has been well organized and presented.The first part gives an insight about Mutual Fund and its various aspects. 5 . I studied about the products and strategies of other AMCs in mumbai to know why people prefer to invest in those AMCs. For the collection of Primary data I made a questionnaire and surveyed of 200 people. the Company Profile.

4 Chapter .5 Chapter .7 ANNEXURE INTRODUCTION COMPANY PROFILE OBJECTIVES AND SCOPE RESEARCH METHODOLOGY DATA ANALYSIS AND INTERPRETATION FINDINGS AND CONCLUSIONS SUGGESTIONS & RECOMMENDATIONS BIBLIOGRAPHY QUESTIONNAIRE 6 .6 Chapter .CONTENTS Acknowledgement Declaration Executive Summary Chapter .2 Chapter .1 Chapter .3 Chapter .

1 INTRODUCTION 7 .CHAPTER.

A typical individual is unlikely to have the knowledge. real estate. Markets for equity shares. the risk associated.INTRODUCTION TO MUTUAL FUND A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified. A draft offer document is to be prepared at the time of launching the fund. derivatives and other assets have become mature and information driven.These could range from shares to debentures to money market instruments. Price changes in these assets are driven by global events occurring in faraway places. inclination and time to keep track of events. the 8 . The income earned in these investments and the capital appreciation realized by the scheme is shared by its unit holders in proportion to the number of units owned by them. it pre specifies the investment objective of the fund. The money thus collected is invested by the fund manager in different types of securities depending upon the objective of the scheme. Typically. In fact. The large pool of money collected in the fund allows it to hire such staff at a very low cost to each investor. the mutual fund vehicle exploits economies of scale in all three areas –research. A mutual fund is answer to all these situations. understand their implications and act speedily. bonds and other fixed income instruments. Each Mutual Fund scheme has a defined investment objective and strategy. Anybody with an invest able surplus of a few thousand rupees can invest in Mutual Funds. investment and transaction processing. It appoints professionally qualified and experienced staff that manages each of these functions on a fulltime basis. professionally managed portfolio at a relatively low cost. skills. A mutual fund is the ideal investment vehicle for today’s complex and modern financial scenario.

In case returns are guaranteed. A sponsor then hires an asset management company to invest the funds according to the investment objective. 9 . E. the name of the guarantor and how the guarantee would be honored is required to be disclosed in the offer document. It also hires another entity to be the custodian of the assets of the fund and perhaps a third one to handle registry work for the unit holders of the fund. In many cases a sponsor can hold a 100% stake in the Asset Management Company (AMC). mutual funds can offer guaranteed returns for a maximum period of one year.g. as in most countries. Investors of mutual funds are known as unit holders. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. which has floated different mutual funds schemes and also acts as an asset manager for the funds collected under the schemes. SEBI in our case. Birla Global Finance is the sponsor of the Birla Sun Life Asset Management Company Ltd. In India. Mutual fund issues units to the investors in accordance with quantum of money invested by them. As per SEBI regulations.In the Indian context. these sponsors need approval from a regulator. SEBI looks at track records of the sponsor and its financial strength in granting approval to the fund for commencing operations. the sponsors promote the Asset Management Company also.in which it holds a majority stake. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced.cost involved in the process and the broad rules for entry into and exit from the fund and other areas of operation..

warrants etc. preference shares. debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. It is these assets which are owned by the investors in the same proportion as their contribution bears to the total contributions of all investors put together.1 THE CONCEPT OF MUTUAL FUND IN DETAIL A mutual fund uses the money collected from investors to buy those assets which are specifically permitted by its stated investment objective. Thus. NAV is defined as the market value of the Mutual Fund scheme's assets 10 . Any change in the value of the investments made into capital market instruments (such as shares.1. A bond fund would buy debt instruments such as debentures. an equity fund would buy equity assets – ordinary shares. bonds or government securities.

he or she buys a part of the assets or the pool of funds that are outstanding at that time. The funds Net Asset value (NAV) is determined each day. When an investor subscribes to a mutual fund. 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. Each shareholder participates in the gain or loss of the fund. Units are issued and can be redeemed as needed. It is no different from 11 . A Mutual Fund is an investment tool that allows small investors access to a well-diversified portfolio of equities. bonds and other securities.net of its liabilities.

The money thus collected is then invested in capital market instruments such as shares. 1. whether the investor gets fund shares or units is only a matter of legal distinction. However. The income earned through these investments and the capital appreciation realized is shared by its unit holders in proportion to the number of units owned by them. professionally managed basket of securities at a relatively low cost.1 MUTUAL FUND OPERATION FLOW CHART CHART 1. A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal.2 12 . in which case the purchase makes the investor a part owner of the company and its assets. Thus Mutual fund is most suitable investment for the common man as it offers an opportunity to invest in a diversified. debentures and other securities.buying “shares” of joint stock Company.

it can be observed that how the money from the investors flow and they get returns out of it.From the above chart . The above cycle should be very clear and also effective. Taking into consideration the market strategy the funds managers invest this pool of money into reliable securities. 1. etc. return. risk. so that he can make proper investment decision.4 Advantages and disadvantages of mutual funds : ADVANTAGES OF MUTUAL FUND • • • • • • • • • Professional management Portfolio Divercification Reduction / Diversification of Risk Liquidity Flexibility & Convenience Reduction in Transaction cost Safety of regulated environment Choice of schemes Transparency DISADVANTAGE OF MUTUAL FUND 13 . With ups and downs in market returns are generated and they are passed on to the investors. The fund manager while investing on behalf of investors takes into consideration various factors like time. investors pool their money with the funds managers. With a small amount of fund.

14 . The Mutual Fund Industry is obviously growing at a tremendous space with the mutual fund industry can be broadly put into four phases according to the development of the sector. both qualities wise as well as quantity wise. The private sector entry to the fund family raised the Aum to Rs. 1540 billion. Each phase is briefly described as under. it reached the height if Rs. Though the growth was slow. the monopoly of the market had seen an ending phase.5 HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY The mutual fund industry in India started in 1963 with the formation of Unit Trust of India. In the past decade. Before. the Assets Under Management (AUM) was Rs67 billion. Indian mutual fund industry had seen a dramatic improvement. at the initiative of the Government of India and Reserve Bank.• • • • No control over Cost in the Hands of an Investor No tailor-made Portfolios Managing a Portfolio Funds Difficulty in selecting a Suitable Fund Scheme 1. 470 billion in March 1993 and till April 2004. but it accelerated from the year 1987 when non-UTI players entered the Industry.

UTI. Bank of Baroda Mutual Fund (Oct 92).UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87). The first scheme launched by UTI was Unit Scheme 1964. 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.700 crores of assets under management. SBI Mutual Fund was the first non.At the end of 1993. 15 . under which all mutual funds. Punjab National Bank Mutual Fund (Aug 89). the mutual fund industry had assets under management of Rs. Second Phase – 1987-1993 (Entry of Public Sector Funds) 1987 marked the entry of non. Bank of India (Jun 90).First Phase – 1964-87 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC).004 crores.47. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. Indian Bank Mutual Fund (Nov 89). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990. At the end of 1988 UTI had Rs. except UTI were to be registered and governed.6. Third Phase – 1993-2003 (Entry of Private Sector Funds) 1993 was the year in which the first Mutual Fund Regulations came into being.

It is registered with SEBI and functions under the Mutual Fund Regulations.The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. there were 33 mutual funds with total assets of Rs. As at the end of September. there were 29 funds.835 crores as at the end of January 2003. assured return and certain other schemes The second is the UTI Mutual Fund Ltd.29. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs. sponsored by SBI. consolidation and growth.21.805 crores.153108 crores under 421 schemes. representing broadly. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. which manage assets of Rs. 16 . BOB and LIC. Fourth Phase – since February 2003 In February 2003. 1. the assets of US 64 scheme. 2004. PNB. As at the end of January 2003. following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities.

6 CATEGORIES OF MUTUAL FUND: Mutual funds can be classified as follow: 17 .1.

such funds show volatile performance. Redemption of units can be made during specified intervals. Their portfolio mirrors the benchmark index both in terms of composition and individual stock weightages. If the fund is listed on a stocks exchange the units can be traded like stocks (E. At the same time. historically. equities have outperformed all asset classes in the long term. thereby offering higher returns at relatively lower volatility. • Close-ended funds: These funds raise money from investors only once. generally smoothens out in the long term. It can be further classified as: i) Index funds. most of the New Fund Offers of close-ended funds provided liquidity window on a periodic basis such as monthly or weekly. Hence.  Based on their investment objective: A) Equity funds: These funds invest in equities and equity related instruments. investment in equity funds should be considered for a period of at least 3-5 years. such funds can yield great capital appreciation as. after the offer period. fresh investments can not be made into the fund.g. even losses. However. Therefore. Morgan Stanley Growth Fund). short term fluctuations in the market. Recently.. 18 . • Based on their structure: Open-ended funds: Investors can buy and sell the units from the fund. With fluctuating share prices. like BSE Sensex or Nifty is tracked. Therefore. such funds have relatively low liquidity. at any point of time.In this case a key stock market index.

Government of India 19 . they invest exclusively in fixed-income instruments like bonds. e.Invest 100% of the capital in a specific sector. cements sectors etc.A banking sector fund will invest in banking stocks. remaining in debt. Following are balanced funds classes: i) Debt-oriented funds -Investment below 65% in equities.Equity Linked Saving Scheme provides tax benefit to the investors. Balanced funds are the ideal mutual funds vehicle for investors who prefer spreading their risk across various instruments.100% of the capital is invested in equities spreading across different sectors and stocks. B) Balanced fund: Their investment portfolio includes both debt and equity. iv) Thematic funds. C) Debt fund: They invest only in debt instruments. they fall between equity and debt funds. and are a good option for investors averse to idea of taking risk associated with equities. vi) ELSS. Therefore. . v) Sector funds.Invest 100% of the assets in sectors which are related through some theme.it is similar to the equity diversified funds except that they invest in companies offering high dividend yields. e. ii) Equity-oriented funds -Invest at least 65% in equities. on the risk-return ladder. iii|) Dividend yield funds. -An infrastructure fund invests in power. construction. As a result.ii) Equity diversified funds.g. debentures.g.

Typically. vii) MIPs. and money market instruments such as certificates of deposit (CD). Higher proportion (around 75%) is put in money markets. Floaters invest in debt instruments which have variable coupon rate. v) Gilt funds LT.Invest in short-term debt papers.They invest 100% of their portfolio in government securities of and T-bills. iii) Floating rate funds .They invest 100% of their portfolio in long-term government securities.They generate income through arbitrage opportunities due to mis-pricing between cash market and derivatives market.Monthly Income Plans have an exposure of 70%-90% to debt and an exposure of 10%-30% to equities. ii) Gilt funds ST. iv) Arbitrage fund. commercial paper (CP) and call money. such funds invest a major portion of the portfolio in long-term debt papers.These funds invest 100% in money market instruments. Funds are allocated to equities. 20 . i) Liquid funds. in the absence of arbitrage opportunities. vi) Income funds LT. Put your money into any of these debt funds depending on your investment horizon and needs. derivatives and money markets. a large portion being invested in call money market.securities.

7 INVESTMENT STRATEGIES 1. Any investment has to be judged on the yardstick of return. The investor gets fewer units when the NAV is high and more units when the NAV is low. 1.fixed monthly plans invest in debt papers whose maturity is in line with that of the fund.viii) FMPs. at a fixed interval. 3. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund then he can withdraw a fixed amount each month. Systematic Transfer Plan: under this an investor invest in debt oriented fund and give instructions to transfer a fixed sum.8 WHY INVESTOR NEEDS MUTUAL FUND :- Mutual funds offer benefits. Payment is made through post dated cheques or direct debit facilities. 21 . Convenience and tax efficiency are the other benchmarks relevant in mutual fund investment. liquidity and safety. which are too significant to miss out. This is called as the benefit of Rupee Cost Averaging (RCA) 2. 1. Systematic Investment Plan: under this a fixed sum is invested each month on a fixed date of a month. The crux of mutual fund investing is averaging the risk. to an equity scheme of the same mutual fund. In the wonderful game of financial safety and returns are the tows opposite goals and investors cannot be nearer to both at the same time.

bond values will go down and vice versa. a bond fund faces interest rate risk and income risk. 22 . government default). national election). • INCOME RISK :The possibility that political events (a war. MUTUAL FUND RISK:Mutual funds face risks based on the investments they hold. mutual funds return taste bitter with the passage of time. government default). Mutual funds have historically delivered yields averaging between 9% to 25% over a medium to long time frame.Many investors possibly don’t know that considering returns alone. Bond yields are directly related to interest rates falling as interest rates fall and rising as interest rates. The duration is important because like wise. generate returns even in a short term. Investors should be prepared to lock in their investments preferably for 3 years in an income fund and 5 years in an equity funds. Similarly. financial problems (rising inflation. or natural disasters will weaken a country’s economy and cause investments in that country to decline. Bond income is also affected by the changes in interest rates. financial problems (rising inflation. Liquid funds of course. A stock fund that invests across many industries is more sheltered from this risk defined as industry risk. Bond values are inversely related to interest rates. many mutual funds have outperformed a host of other investment products. Followings are glossary of some risks to consider when investing in mutual funds:• COUNTRY RISK :The possibility that political events (a war. If interest rates go up. national election). a sector stock fund is at risk that its price will decline due to developments in its industry. or natural disasters will weaken a country’s economy and cause investments in that country to decline. For example.

There is a direct relationship between risks and return.• MARKET RISK :The possibility that stock fund or bond fund prices overall will decline over short or even extended periods. with periods when prices rise and other periods when prices fall.e. i. GRAPH 1.RISK RETURN REWRAD IN MUTUAL FUND Equity Fund Balance Fund MIP Income Fund Short Term Fund Liquid Fund This graph shows risk and return impact on various mutual funds. Stock and bond markets tend to move in cycles. schemes with higher risk also have potential to provide higher returns.3:. 23 .

INTRODUCTION TO COMPANY PROFILE 24 .

SBI Funds Management Pvt. honored us with 15 awards of performance and have emerged as the preferred investment for millions of investors. one of the world's leading fund management companies that manages over US$ 500 Billion worldwide. Schemes of the Mutual Fund have time after time outperformed benchmark indices. Ltd. the fund has launched 38 schemes and successfully redeemed 15 of them.6 million and over 20 years of rich experience in fund management consistently delivering value to its investors. Today the fund house manages over Rs 28500 crores of assets and has a diverse profile of investors actively parking their investments across 36 active schemes. is one of the leading fund houses in the country with an investor base of over 4. In 20 years of operation. and Société Générale Asset Management (France). has rewarded our investors with consistent returns.1 INTRODUCTION TO SBI MUTUAL FUND SBI Funds Management Pvt.6 million investors is a genuine tribute to our expertise in fund management.1. 25 . The trust reposed on us by over 4. and in the process. Ltd. is a joint venture between 'The State Bank of India' one of India's largest banking enterprises.

Magnum COMMA Fund Magnum Equity Fund 26   .2 PRODUCTS OF SBI MUTUAL FUND: Equity schemes The investments of these schemes will predominantly be 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. Sectoral Funds and Index Funds.SBI Funds Management Pvt. 28 Investor Service Centres. 46 Investor Service Desks and 56 District Organizers. 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. Ltd.SBI Mutual is the first banksponsored fund to launch an offshore fund – Resurgent India Opportunities Fund. are riskier than Diversified Equity Funds. serves its vast family of investors through a network of over 130 points of acceptance. 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. Growth through innovation and stable investment policies is the SBI MF credo. 1. Equity Funds include diversified Equity Funds.

IT Fund MSFU.FMCG Fund       SBI Arbitrage Opportunities Fund SBI Blue chip Fund SBI Infrastructure Fund . Government Securities and Money Market instruments either completely avoiding any investments in the stock markets as in Income Funds or Gilt Funds 27 .Emerging Business Fund MSFU.Pharma Fund MSFU.Series I SBI Magnum Taxgain Scheme 1993 SBI ONE India Fund SBI TAX ADVANTAGE FUND .Contra Fund MSFU.      Magnum Global Fund Magnum Index Fund Magnum Midcap Fund Magnum Multicap Fund Magnum Multiplier plus 1993 Magnum Sectoral Funds Umbrella      MSFU.SERIES I Debt schemes Debt Funds invest only in debt instruments such as Corporate Bonds.

Floating Rate Plan Magnum Income Plus Fund Magnum Insta Cash Fund -Liquid Floater Plan Magnum Monthly Income Plan Magnum Monthly Income Plan . Hence they are safer than equity funds. but at the same time provide commensurately lower returns. Hence they are less risky than equity funds. but is looking for higher returns than those provided by debt funds.or having a small exposure to equities as in Monthly Income Plans or Children's Plan. 28 . They provide a good investment opportunity to investors who do not wish to be completely exposed to equity markets.Floater Magnum NRI Investment Fund SBI Premier Liquid Fund BALANCED SCHEMES Magnum Balanced Fund invests in a mix of equity and debt investments. Such investments are advisable for the risk-averse investor and as a part of the investment portfolio for other investors. • • • • • • • • • • • Magnum Children’s benefit Plan Magnum Gilt Fund Magnum Income Fund Magnum Insta Cash Fund Magnum Income Fund. At the same time the expected returns from debt funds would be lower.

Reliance Mutual Fund iii.3 COMPETITORS OF SBI MUTUAL FUND Some of the main competitors of SBI Mutual Fund in Patna are as Follows: i. Franklin Templeton 29 . LIC Mutual Fund ix. HDFC Mutual Fund vii. Kotak Mutual Fund vi. Birla Sun Life Mutual Fund v. UTI Mutual Fund iv. Principal x. ICICI Mutual Fund ii. Sundaram Mutual Fund viii.• Magnum Balanced Fund 1.

4 Awards.4 AWARDS AND ACHIEVEMENTS SBI Mutual Fund (SBIMF) has been the proud recipient of the ICRA Online Award 8 times. CNBC TV .18 Crisil Award 2006 .1.18 Crisil Mutual Fund of the Year Award 2007 and 5 Awards for our schemes. The Lipper Award (Year 2005-2006) and most recently with the CNBC TV . 30 .

31 .

3 Objectives and scope 32 .Chapter .

To know the preference of the portfolios. b. 1. To know why one has invested in SBI Mutual Funds. mode of investment. d. To find out the most preference channel. To find out what should do to boost Mutual F und Industry. 33 . This project report may help the company to make further planning and strategy. The study will help to know the preferences of the customers. A large number of new players have entered the market and trying to gain market share in this rapidly improving market. option for getting return and so on they prefer. e.2 Scope of the study A big boom has been witnessed in Mutual Fund Industry in resent times. portfolio.1. To find out the Preference of the investors for Asset Management of company. which company. c.1 OBJECTIVES OF THE STUDY a.

Chapter – 4 Research Methodology 34 .

The secondary data has been collected through various journals and websites. and primary data has been collected by interacting with various people. Duration of Study: 35 . scope of study along with research methodology and limitations of study etc. It may be understood as a science of studying how research is done scientifically. Data sources: Research is totally based on primary data. The research design. objectives of study.RESEARCH METHODOLOGY RESEARCH METHODOLOGY:Research methodology is a way to systematically show the research problem. This Section includes the methodology which includes. Secondary data can be used only for the reference. Research has been done by primary data collection. It is necessary for the researcher to know not only the research methods but also the methodology.

Boring Canal Road Branch.The study was carried out for a period of two months. Out of which only 120 people had invested in Mutual Fund. from 8 Dec to 8th Jan 2009. Sampling:  Sampling procedure: The sample was selected of them who are the customers/visitors of State Bank if India.  Sample design: Data has been presented with the help of bar graph. by formal and informal talks and through filling up the questionnaire prepared. irrespective of them being investors or not or availing the services or not.  Sample size: The sample size of my project is limited to 200 people only. 36 . pie charts. It was also collected through personal visits to persons. line graphs etc. The data has been analyzed by using mathematical/Statistical tool. Other 80 people did not have invested in Mutual Fund.

•Some of the persons were not so responsive. •It is difficult to cover all the function of the company. •Possibility of error in data collection because many of investors may have not given actual answers of my questionnaire. 37 . •Because of the limited time period. the survey work was conducted in the Mumbai region and the sample size was taken as 200 respondents only.Limitation: This study also includes some limitations which have been discussed as follows: •Though every one used to be very co-operative but every detail was unable to be disclosed to me as the officials has to maintain secrets of the company. • Some respondents were reluctant to divulge personal information which can affect the validity of all responses.

Chapter – 5 Data Analysis & Interpretation 38 .

of Investors <= 30 12 31-35 18 36-40 30 41-45 24 46-50 20 >50 16 Investors invested in Mutual Fund 35 30 25 20 15 10 5 0 <=30 31-35 36-40 41-45 46-50 >50 Age group of the Investors 12 18 30 24 20 16 Interpretation: 39 . (a) Age distribution of the Investors of Mumbai Age Group No.ANALYSIS & INTERPRETATION OF THE DATA 1.

According to this chart out of 120 Mutual Fund investors of Mumbai the most are in the age group of 36-40 yrs.e. the second most investors are in the age group of 41-45yrs i. 20% and the least investors are in the age group of below 30 yrs. Educational Qualification of investors of MUMBAI Educational Qualification Graduate/ Post Graduate Under Graduate Others Total Number of Investors 88 25 7 120 40 . i. (b).e. 25%.

6% 23% 71% Graduate/Post Graduate Under Graduate Others Interpretation: 41 .

Service Business Agriculture Others . Occupation of the investors of Mumbai Occupation Govt. Service Pvt. c). of Investors 30 45 35 4 6 50 No. 23% are Under Graduate and 6% are others (under HSC). Service Pvt. Service Business 35 45 30 4 Agriculture 6 Others Occupation of the customers Interpretation: 42 . No. of Investors 40 30 20 10 0 Govt.Out of 120 Mutual Fund investors 71% of the investors in Mumbai are Graduate/Post Graduate.

001-15.000 10.001-20. Employees. 3% are in Agriculture and 5% are in others.000 20. of Investors 43 28 5 <=10 12 10-15 15-20 20-30 >30 32 Income Group of the Investorsn (Rs. 36% investors that is the maximum investors are in the monthly income group 43 .) Interpretation: In the Income Group of the investors of Mumbai out of 120 investors. 29% are Govt. in Th. 38% are Pvt.001-30.000 >30. (d).000 15. of Investors 5 12 28 43 32 No.000 50 45 40 35 30 25 20 15 10 5 0 No. Employees. 25% are Businessman.In Occupation group out of 120 investors. Monthly Family Income of the Investors of Mumbai Income Group <=10.

4% are in the monthly income group of below Rs. 30.e.e.Rs. 27% investors are in the monthly income group of more than Rs.000 and the minimum investors i.000.of R pondents es 44 . 20. Kind of Investments Saving A/C Fixed deposits Insurance Mutual Fund Post office (NSC) Shares/Debentures Gold/Silver Real Estate No.001 to Rs. 30. Second one i. of Respondents 195 148 152 120 75 50 30 65 R Es eal tate K indsof Inves ent tm Gold/S ilver S hares ebentures /D Pos Office(NS ) t C Mutual F und Ins urance F ixed Depos its S aving A/c 0 50 30 65 50 75 120 152 148 195 100 150 200 250 No.000 (2) Investors invested in different kind of investments. 10.

25% in Shares or Debentures. 97. of Respondents 40 60 64 36 45 . 37.Interpretation: From the above graph it can be inferred that out of 200 people.5% people have invested in Saving A/c. 74% in Fixed Deposits. 3.5% in Real Estate.5% in Post Office. 76% in Insurance. Preference of factors while investing Factors (a) Liquidity (b) Low Risk (c) High Return (d) Trust No. 15% in Gold/Silver and 32. 60% in Mutual Fund.

18% 20% 32% 30% L iquidity L R k ow is Hig R h eturn Trus t 46 .

Interpretation: Out of 200 People. of Respondents Yes 135 No 65 33% 67% Y es No 47 . Awareness about Mutual Fund and its Operations Response No. 20% prefer easy Liquidity and 18% prefer Trust 4. 30% prefer to invest where there is Low Risk. 32% People prefer to invest where there is High Return.

46% 48 . of Respondents 18 25 30 62 7 0 6 0 5 0 4 0 3 0 2 0 2 5 1 0 1 8 0 Advertisem entPeer Group No. Out of 135 Respondents. 5. of R espondents 6 2 3 0 B nk a F inancia l Advisors S ource of Inform ation Interpretation: From the above chart it can be inferred that the Financial Advisor is the most important source of information about Mutual Fund. Source of information for customers about Mutual Fund Source of information Advertisement Peer Group Bank Financial Advisors No.Interpretation: From the above chart it is inferred that 67% People are aware of Mutual Fund and its operations and 33% are not aware of Mutual Fund and its operations.

know about Mutual fund Through Financial Advisor, 22% through Bank, 19% through Peer Group and 13% through Advertisement.

6. Investors invested in Mutual Fund
Response YES NO Total No. of Respondents 120 80 200

No 40%

Yes 60%

Interpretation:

49

Out of 200 People, 60% have invested in Mutual Fund and 40% do not have invested in Mutual Fund.

7. Reason for not invested in Mutual Fund
Reason Not Aware Higher Risk Not any Specific Reason No. of Respondents

65 5 10

13%

6%

81%
Not Aware H her R k ig is Not Any

Interpretation:

50

Out of 80 people, who have not invested in Mutual Fund, 81% are not aware of Mutual Fund, 13% said there is likely to be higher risk and 6% do not have any specific reason.

8. Investors invested in different Assets Management Co. (AMC) Name of AMC
SBIMF UTI HDFC Reliance ICICI Prudential Kotak Others
Others HDFC Name of AMC Kotak SBIMF ICICI Reliance UTI 0 20 40 No. of Investors 60 30 45 55 56 75 75 80

No. of Investors 55 75 30 75 56 45 70
70

Interpretation:
51

9. only 46% have invested in SBIMF. 9% invested because of better return. 52 . 27% invested on Agent’s Advice. 37.In Patna most of the Investors preferred UTI and Reliance Mutual Fund. Out of 120 Investors 62. Reason for invested in SBIMF Reason Associated with SBI Better Return Agents Advice No. of Respondents 35 5 15 27% 9% 64% As ociated with S s BI B etter R eturn Ag ents Advice Interpretation: Out of 55 investors of SBIMF 64% have invested because of its association with Brand SBI. 47% in ICICI Prudential.5% have invested in each of them.5% in Kotak and 25% in HDFC.

38% were not aware with SBIMF.10. 28% do not have invested due to less return and 34% due to Agent’s Advice. 53 . Reason for not invested in SBIMF Reason Not Aware Less Return Agent’s Advice No. of Respondents 25 18 22 34% 38% 28% Not Aware L Return ess Ag ent's Advice Interpretation: Out of 65 people who have not invested in SBIMF.

63% in SBIMF. 67% in ICICI Prudential.11. 62. of Inves tors Interpretation: Out of 120 investors. 50% in Kotak. Preference of Investors for future investment in Mutual Fund Name of AMC SBIMF UTI HDFC Reliance ICICI Prudential Kotak Others No. of Investors 76 45 35 82 80 60 75 Others K otak Nam of AMC e IC I Prudential IC R eliance H F DC UTI S BIMF 0 20 35 45 60 75 80 82 76 40 60 80 100 No.5% in UTI and 29% in HDFC Mutual Fund. 54 .5% in Others. 37. 68% prefer to invest in Reliance.

of Respondents 25% Financial Advisor 72 Bank 18 AMC 30 15% F ncia Advisor ina l B ank AMC 60% Interpretation: Out of 120 Investors 60% preferred to invest through Financial Advisors. Channel Preferred by the Investors for Mutual Fund Investment Channel No. Mode of Investment Preferred by the Investors 55 . 25% through AMC and 15% through Bank. 13.12.

Mode of Investment No. of Respondents One time Investment 78 Systematic Investment Plan (SIP) 42 35% 65% One tim Inves ent e tm S IP Interpretation: Out of 120 Investors 65% preferred One time Investment and 35 % Preferred through Systematic Investment Plan. Preferred Portfolios by the Investors 56 . 14.

of Investors 56 20 44 37% 46% 17% Equity Debt B alance Interpretation: From the above graph 46% preferred Equity Portfolio.Portfolio Equity Debt Balanced No. 37% preferred Balance and 17% preferred Debt portfolio 15. Option for getting Return Preferred by the Investors 57 .

of Respondents Dividend Payout 25 Dividend Reinvestment 10 Growth 85 21% 8% 71% D ividend Payout Dividend R einves ent tm Growth Interpretation: From the above graph 71% preferred Growth Option. 16.Option No. Preference of Investors whether to invest in Sectoral Funds Response No. of Respondents 58 . 21% preferred Dividend Payout and 8% preferred Dividend Reinvestment Option.

79% investors do not prefer to invest in Sectoral Fund because there is maximum risk and 21% prefer to invest in Sectoral Fund.Yes No 25 95 21% 79% Y es No Interpretation: Out of 120 investors. 59 .

Chapter – 6 Findings and Conclusion Findings 60 .

76% Invested in Fixed Deposits. • In Occupation group most of the Investors were Govt. The second most Investors were in the age group of 41-45 years and the least were in the age group of below 30 years. Only 60% Respondents invested in Mutual fund.30. • Out of 80 Respondents 81% were not aware of Mutual Fund.000 and the least were in the group of below Rs.30. employees. • In Mumbai most of the Investors were Graduate or Post Graduate and below HSC there were very few in numbers. • were not. between Rs. • Among 200 Respondents only 60% had invested in Mutual Fund and 40% did not Only 67% Respondents were aware about Mutual fund and its operations and 33% have invested in Mutual fund. • About all the Respondents had a Saving A/c in Bank. 61 . the second most were in the Income group of more than Rs.001. • In family Income group. 13% told there is not any specific reason for not invested in Mutual Fund and 6% told there is likely to be higher risk in Mutual Fund.000 were more in numbers. the second most Investors were Private employees and the least were associated with Agriculture. 10.• In Mumbai in the Age Group of 36-40 years were more in numbers. 20. • Mostly Respondents preferred High Return while investment.000. the second most preferred Low Risk then liquidity and the least preferred Trust.

the second most due to Agent’s advice and rest due to Less Return. the second most was Balance (mixture of both equity and debt). SBIMF has been preferred after them. • Out of 55 investors of SBIMF 64% have invested due to its association with the Brand SBI. • The most preferred Portfolio was Equity. SBIMF places after ICICI Prudential according to the Respondents. • Most of the Investors did not want to invest in Sectoral Fund.• Most of the Investors had invested in Reliance or UTI Mutual Fund. ICICI Prudential has also good Brand Position among investors. • For Future investment the maximum Respondents preferred Reliance Mutual Fund. 25% through AMC (means Direct Investment) and 15% through Bank. 62 . • 60% Investors preferred to Invest through Financial Advisors. • Most of the investors who did not invested in SBIMF due to not Aware of SBIMF. • Maximum Number of Investors Preferred Growth Option for returns. • 65% preferred One Time Investment and 35% preferred SIP out of both type of Mode of Investment. and the least preferred Portfolio was Debt portfolio. the second most preferred Dividend Payout and then Dividend Reinvestment. only 21% wanted to invest in Sectoral Fund. the second most preferred ICICI Prudential. 27% Invested because of Advisor’s Advice and 9% due to better return.

I observed that many of people have fear of Mutual Fund. Products. Sunderam. Financial Advisors are the most preferred channel for the investment in mutual fund. and their Assets Under Management is larger than others whose Brand name are not well known like Principle. they are well known Brand. As the awareness and income is growing the number of mutual fund investors are also growing. “Brand” plays important role for the investment. Channels etc. Distribution channels are also important for the investment in mutual fund. Many of investors directly invest their money through AMC because they do not have to pay entry load. They need the knowledge of Mutual Fund and its related terms. ICICI etc. They can change investors’ mind from one investment option to others. They think their money will not be secure in Mutual Fund. There are many AMCs in Mumbai but only some are performing well due to Brand awareness. This study has made an attempt to understand the financial behavior of Mutual Fund investors in connection with the preferences of Brand (AMC). Many of people do not have invested in mutual fund due to lack of awareness although they have money to invest.Conclusion Running a successful Mutual Fund requires complete understanding of the peculiarities of the Indian Stock Market and also the psyche of the small investors. Some AMCs are not performing well although some of the schemes of them are giving good return because of not awareness about Brand. etc. SBIMF. 63 . People invest in those Companies where they have faith or they are well known with them. UTI. Reliance.

Only those people invest directly who know well about mutual fund and its operations and those have time. 64 .

Chapter – 7 Suggestions And Recommendations 65 .

• Mutual funds offer a lot of benefit which no other single option could offer. Investors should be made to realize that ignorance is no longer bliss and what they are losing by not investing. Nobody will invest until and unless he is fully convinced. their need and time (how long they want to invest). So the advisors should try to change their mindsets. Investors should be made aware of the benefits. • Mutual Fund Company needs to give the training of the Individual Financial Advisors about the Fund/Scheme and its objective. But most of the people are not even aware of what actually a mutual fund is? They only see it as just another investment option. By considering these three things they can take the customers into consideration.Suggestions and Recommendations • The most vital problem spotted is of ignorance. • Before making any investment Financial Advisors should first enquire about the risk tolerance of the investors/customers. 66 . The advisors should target for more and more young investors. because they are the main source to influence the investors. Young investors as well as persons at the height of their career would like to go for advisors due to lack of expertise and time.

• Customers with graduate level education are easier to sell to and there is a large untapped market there. There is a large scope for the companies to tap the salaried persons.• Younger people aged under 35 will be a key new customer group into the future. so making greater efforts with younger customers who show some interest in investing should pay off. • Systematic Investment Plan (SIP) is one the innovative products launched by Assets Management companies very recently in the industry. Though most of the prospects and potential investors are not aware about the SIP. advisors must provide sound advice and high quality. To succeed however. SIP is easy for monthly salaried person as it provides the facility of do the investment in EMI. 67 .

which factor will you prefer? . Name:(b). a. (a) Liquidity (b) Low Risk (c) High Return 4. 5.001 to 20. Financial Advisors Yes No 6. While investing your money. Real Estate 3. Up to Rs. 15. If yes. Ser Business Agriculture Others Under Graduate Others Phone:- (g). Insurance g. Mutual Fund h. Occupation. Age:(d). how did you know about Mutual Fund? a. Saving account e. Ser Pvt. All applicable.10. Fixed deposits f. Are you aware about Mutual Funds and their operations? Pl tick (√). 20. Banks (d) Trust Yes No d.000 Rs. Post Office-NSC. For this I have designed a Questionniare to know your views.000 Rs. Add: (c). please fill the given as per your thinking and experiences with this. Have you ever invested in Mutual Fund? Pl tick (√). I will be thankful to you for this. Advertisement b.001 to 15000 Rs. Pl tick (√) Govt. 10.IMED. 1.000 Rs.001 and above 2.001 to 30. Shares/Debentures c. etc b.QUESTIONNAIRE Dear Sir/ madam I am Snehal Chavan doing BBA from BHARTI VIDYAPEETH. Peer Group c. Qualification:Graduation/PG (e). What is your monthly family income approximately? Pl tick (√). 68 . I m preparing a project on A STUDY ON MUTUAL FUND. Gold/ Silver d. Personal Details: (a). What kind of investments you have made so far? Pl tick (√). 30.

When you plan to invest your money in asset management co.7. SBIMF is associated with State Bank of India. tick (√). c. They have a record of giving good returns year after year. all applicable). you do so because (Pl. Reliance e. Having debt & equity portfolio. a. If invested in SBIMF. a. Agent’ Advice 11. Other. a. UTI c. c. Agent’ Advice 10. If not invested in Mutual Fund then why? (a) Not aware of MF (b) Higher risk (c) Not any specific reason 8. a. Having only debt portfolio b. you do so because (Pl. Only equity portfolio. When you want to invest which type of funds would you choose? a. in which Mutual Fund you have invested? Pl. SBIMF b. specify 9. c. which AMC will you prefer? Assets Management Co. tick (√). tick (√) all applicable). 69 . HDFC d. UTI c. Which Channel will you prefer while investing in Mutual Fund? (a) Financial Advisor (b) Bank (c) AMC 13. b. a. tick (√). SBIMF b. Kotak f. You are not aware of SBIMF. Kotak f. b. All applicable. HDFC e. One Time Investment b. When you invest in Mutual Funds which mode of investment will you prefer? Pl. Systematic Investment Plan (SIP) 14. If yes. Reliance d. SBIMF gives less return compared to the others. If NOT invested in SBIMF. ICICI 12.

Dividend payout b. Yes No Thank you very much for your co-operation! Snehal chavan 70 . Dividend re-investment c. a. tick (√). Instead of general Mutual Funds. would you like to invest in sectorial funds? Please tick (√).15. Growth in NAV 16. How would you like to receive the returns every year? Pl.

BIBLIOGRAPHY • • • • • NEWS PAPERS OUTLOOK MONEY TELEVISION CHANNEL (CNBC AAWAJ) MUTUAL FUND HAND BOOK FACT SHEET AND STATEMENT 71 .

Master your semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master your semester with Scribd & The New York Times

Cancel anytime.