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INTRODUCTION
WHAT IS MUTUAL FUND
Mutual fund is a mechanism for pooling the
resources by issuing unit to the investors and
investing fund in securities in accordance with
objectives as disclosed in offer document.
Investments in securities are spread across a
wide cross-section of industries and sectors
and thus the risk is reduced. Diversification
reduces the risk because all stocks may not
move in the same direction in the same
proportion at the same time. Mutual fund
issues units to the investors in accordance with
quanturm of money invested by them.
Investors of mutual funds are known as unit
holder.
The profit or losses are sheared by the
investors in proportion to their investments.
The mutual fund normally comes out with a
number of schemes with different investment
objectives which are launched from time to
time. A mutual funds is required to be
registered with securities and Exchange board
of India (SEBI) which regulated securities
market before it can collect funds from the
public.

Mutual Fund:
Mutual funds, as the name indicates is the fund where in

numerous investors come together to invest in various


schemes of mutual

fund.

Mutual funds are dynamic institution, which plays a crucial role

in an economy by mobilizing savings and investing them in the


capital market,

thus establishing a link between savings and the capital


market.

A mutual fund is an institution that invests the pooled funds of


public to

create a diversified portfolio of securities. Pooling is the key to


mutual fund

investing. Each mutual fund has a specific investment


objective and tries to

meet that objective through active portfolio management.

Mutual fund as a investment company combines or collects


money of its
shareholders and invests those funds in variety of stocks,
bonds, and money

market instruments. The latter include securities, commercial


papers,

certificates of deposits, etc. Mutual funds provide the investor


with

professional management of funds and diversification of


investment.

Investors who invest in mutual funds are provided with units to


participate in

stock markets. These units are investment vehicle that provide


a means of

participation in the stock market for people who have neither


the time, nor the

money, nor perhaps the expertise to undertake the direct


investment in

equities. On the other hand they also provide a route into


specialist markets

where direct investment often demands both more time and


more knowledge

than an investor may possess.

The price of units in any mutual fund is governed by the value


of underlying

securities. The value of an investor’s holding in a unit can


therefore, like an

investment in share, can go down as well as up. Hence it is


said that mutual
funds are subjected to market risk. Mutual fund can not
guarantee a fixed rate

of return. It depends on the market condition. If the particular


scheme is

performing well than more return can be expected.

It also depends on the fund manager expertise knowledge. It is


also seen

that people invest in particular funds depending on who the


fund manager is.

The following diagram shows the working of mutual


fund:

Finance Department
Role of Financial Department

Diagram
Financial Markets
A financial market is a market for creation and exchange of
financial assets. If we buy or sell financial assets, we will
participate in financial markets in some way or the other. This
includes the various instruments for investment contains four
attributes essential for an investor for taking investment
decision: Yield of the Instrument, Liquidity, Risk Perception,
and Initial Investment.

Functions of Financial Markets:-


Financial markets facilitate price discovery. The continuous
interaction among numerous buyers and sellers who through
financial markets helps in establishing the prices of financial
assets.

Financial markets provide liquidity to financial assets. Investors


can readily sell their financial assets through the mechanism of
financial markets.

Financial markets considerably reduce the cost of transaction.


Two major costs associated with transaction are search costs
and information costs.

VARIOUS CRITERIA TO EVALUATE THE MUTUAL


FUNDS AND THEIR PEER GROUP COMPARISON
The most important and widely used measures of performance
are:-

Basic criterions to evaluate the mutual fund schemes


o P/E ratio
o Turnover ratio
o Expense ratio
o Standard deviation

P/E Ratio

A valuation ratio of a company's current share price compared to its per-


share earnings.
(EPS).

Calculated as:

EPS is the profit that a company makes on a per share basis. So, if EPS is
one, the PE ratio will reflect the price that an investor will pay for this one
rupee of the company's profits. Higher PE ratio signifies that investor
expectation from these shares is higher. This is because the growth in
share price is expected to follow earnings growth.

In general, a high P/E suggests that investors are expecting higher


earnings growth in the future compared to companies with a lower P/E.
However, the P/E ratio doesn't tell us the whole story by itself. It's usually
more useful to compare the P/E ratios of one company to other companies
in the same industry, to the market in general or against the company's
own historical P/E.

Turnover Ratio
The turnover ratio is the lower of the total sales or total purchases over the
period divided by the average of the net assets. Higher the turnover ratio,
greater is the volume of trading carried out by the fund.

The turnover ratio is more important for equity and balanced funds where
the trading cost of equities is substantial. So, each time a fund manager
buys and sells, he has to keep in mind that the cost of buying and selling
will eat into the fund's returns. Dynamic equity funds, which can move
rapidly between sectors, will obviously have a higher turnover ratio. Here
risk will not be just of the fund manager making a wrong call on a sector
but also that of turnover risk. In comparison a passively managed fund,
such as an index fund, will have a lower turnover rate compared to an
active fund as it has to just mirror the index. The only trading here will be
due to investments, redemptions and changes in the index. Also, it is not
meaningful to use turnover ratio for new schemes, which are not fully
invested. As the scheme is deploying its assets there will be more
transactions, at least buy orders, as compared to a fund` which is fully
invested. Turnover ratio is less relevant for income funds as brokerage
costs are much lower, and hence they will have a lower potential to eat
into returns. So, even though gilt funds may have equally high turnover as
compared to equity funds, the impact of this turnover is much less.

In Short, Turnover ratio is a measure of how a fund's portfolio changes in


a year. This ratio indicates how much a fund is trading. Understanding
turnover ratio helps in gaining insights into a fund's performance.

Expense Ratio
Expense ratio is the percentage of total assets that are spent to run a
mutual fund. As returns from bond funds tend to be similar, expenses
become an important factor while comparing bond funds.

Sharpe Ratio
The Sharpe ratio represents the trade off between risk and returns. At the
same time it also factors in the desire to generate returns, which are
higher than those from risk free returns.

The Sharpe ratio tells us whether the returns of a portfolio are due to
smart investment decisions or a result of excess risk. This measurement is
very useful because although one portfolio or fund can reap higher returns
than its peers, it is only a good investment if those higher returns do not
come with too much additional risk. The greater a portfolio's Sharpe ratio,
the better its risk-adjusted performance has been. The Sharpe ratio
represents this trade off between risk and returns. At the same time it also
factors in the desire to generate returns, which are higher than those from
risk free returns.

The ratio measures the variability of ‘excess return’. The higher the sharp
ratio higher the return of unit of risk as measured by variability. Taking the
funds below.

Sharpe ratio = (Avg. return –Risk free return) Standard deviation

Standard Deviation
Standard Deviation is the most common statistical measure of judging a
fund's volatility and risk. It gives you a 'quality rating' of an average.

A measure of the total volatility of a fund is based on the trailing three-year


monthly returns. For debt and gilt funds it is based on average weekly
return over the past one and a half years.

The Standard Deviation of an average is the amount by which the


numbers that go into an average deviate from that average. It tells us how
closely an average represents the underlying numbers. A high Standard
Deviation may be a measure of volatility, but it does not necessarily mean
that such a fund is worse than one with a low Standard Deviation. If the
first fund is a much higher performer than the second one, the deviation
will not matter much.

Comparison with Other Investment Avenues

Table 1

Investment Avenues Liquidity Safety Returns Volatility Tax Convenience

Benefit
Fixed Deposits Low Low Moderate Low No Moderate
Equity shares Moderate to Low Uncertain High No Moderate
high
Co.Debenture Low Moderate Moderate Moderate No Low
Co. Deposit Low Moderate Low Low No Low
Life Insurance Low High Low Low Yes Moderate
Mutual Funds High Moderate Moderate High No High

(Open ended)
Mutual Funds High Moderate Moderate High Yes High

(close ended )
RBI Bonds Moderate High Moderate Low Yes Moderate
Bank Fixed Deposit High High Low Low No High
PPF Low High Moderate Low Yes Moderate
Post Office High High Good Low Yes Moderate
NSC Low High Moderate Low Yes Moderate
Gold High High Moderate Moderate No High
Infrastructure Bonds Moderate High Moderate Low No Low
Real Estate Low Moderate Variable High Yes High
Public sec. & FII Moderate High Moderate Moderate No High
Bonds
National Savings Low High Moderate Low Yes Moderate
Certificate
Monthly Income Low High Moderate Low Yes Low
Scheme

Comparison between FD, Bonds and Mutual Fund – Features

Table 2

Characteristics FD's Bonds Mutual Funds


Accessibility Low Low High
Tenor Fixed(medium) Fixed(Long) No Lock-in
Min. Investment Rs.1000 Rs.5000 Rs.2000
Tax Benefits None 80L, 88 Dividend Tax-Free
Liquidity Low Very Low Very High
Convenience Medium Tedious Very High
Transparency None None Very High

Source: www.indiainvest.com

Risk Return Graph

Low
High

HISTORY
First Phase: 1924-1960
Massachusetts Investors Trust (now MFS Investment
Management) was founded on March 21, 1924, and, after one
year, it had 200 shareholders and $392,000 in assets. The
entire industry, which included a few closed-end funds,
represented less than $10 million in 1924.

The stock market crash of 1929 hindered the growth of mutual


funds. In response to the stock market crash, Congress passed
the Securities Act of 1933 and the Securities Exchange Act of
1934. These laws require that a fund be registered with the
U.S. Securities and Exchange Commission (SEC) and provide
prospective investors with a prospectus that contains required
disclosures about the fund, the securities themselves, and fund
manager. The investment company Act of 1960 sets forth the
guidelines with which all SEC-registered funds must comply.

Second Phase: 1960-1987


With renewed confidence in the stock market, mutual funds
began to blossom. By the end of the 1960s, there were
approximately 270 funds with $48 billion in assets. The first
retail index fund, First Index Investment Trust, was formed in
1976 and headed by John Bogle, who conceptualized many of
the key tenets of the industry in his 1951 senior thesis at
Princeton University.[2] It is now called the Vanguard 500
Index Fund and is one of the world's largest mutual funds, with
more than $100 billion in assets.
A key factor in mutual-fund growth was the 1987 change in the
Internal Revenue Code allowing individuals to open individual
retirement accounts (IRAs). Even people already enrolled in
corporate pension plans could contribute a limited amount (at
the time, up to $2,000 a year). Mutual funds are now popular.

Third Phase: 1987-1993


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. Punjab National Bank mutual fund (Aug 89), Bank
Of Baroda mutual fund (Oct 92).

Fourth Phase: 1993-2003


This is the time when private sector enter in mutual fund
(1993), a new aria started in the India mutual fund industry. In
1993 was the year in which the first mutual fund regulations
come in to being, under which all mutual funds, except UTI
were to be registered and governed. The 1993 SEBI (Mutual
Fund) regulation were substituted by a more comprehensive
and revised mutual fund regulation in 1996. As at the end of
January 2003, there were 33 mutual fund with total assets of
Rs. 1,21,805 crores. The Unit Trust Of India (UTI) with Rs.
44,541 crores of assets under management was way ahead of
other mutual fund.

Fifth Phase: since February


2003-2010 July
In February 2003, following the repeal of the Unit Trust of
India Act 1963 UTI was bifurcated into two separate entities.
One is the Specified Undertaking of the Unit Trust of India with
assets under management of Rs.29, 835 crores as at the end
of January 2003, representing broadly, the assets of US 64
scheme, assured return and certain other schemes.

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB,
BOB and LIC. It is registered with SEBI and functions under the
Mutual Fund Regulations.UTI in March 2000 more than 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 fund.

Here is a list of top Indian mutual funds:


• ABN-AMRO
• Baroda Pioneer Mutual Fund
• Benchmark
• Birla Sun life
• Can bank
• Deutsche
• DSP Merrill Lynch
• Escorts
• Fidelity
• Franklin Templeton
• HDFC
• HSBC
• ING Vysya
• Kotak Mahindra
• LIC
• Morgan Stanley
• Principal
• Prudential ICICI
• Reliance
• Sahara
• SBI
• Standard Chartered
• Sundaram BNP Paribas
• Tata
• UTI

Recent Growth Of Mutual Fund Houses

Mutual Fund Operation Flow Chart


Diagram 3

SIGNIFIES THE IMPORTANCE OF


MUTUAL FUND.
A Mutual Fund is a trust that pools the savings of a number of
investors who
share a common financial goal. The money thus collected is
invested by the

fund manager in different types of securities depending upon


the objective of

the scheme. These could range from shares to debentures to


money market

instruments. The income earned through these investments


and the capital

appreciations realized by the schemes are shared by its unit


holders in

proportion to the number of units owned by them.

Thus a mutual fund is the most suitable investment for the


common person as

It offers an opportunity to invest in a diversified, professionally


managed

basket of securities at a relatively low cost.

Since small investors generally do not have adequate time,


knowledge,

experience & resources for directly accessing the capital


market, they have to

rely on an intermediary, which undertakes informed


investment decisions &

provides consequential benefits of professional expertise.

The advantage of Mutual Funds to the investors is professional

managed,

low transaction cost, liquidity, transparency, well regulated,


diversified
portfolios & tax benefits. By pooling their assets through
mutual funds,

investors achieve economies of scale.

A collected corpus can be used to procure a diversified


portfolio

indicating greater returns has also create economies of scale


through cost

reduction. This principle has been effective worldwide as more


& more investors are going the mutual fund way. This portfolio
diversification ensures

risk minimization. The criticality such a measure comes in


when you factor in

the fluctuations that characterize stock markets. The interest


of the investors is

protected by the SEBI, which acts as a watchdog. Mutual funds


are governed

by SEBI (Mutual Funds) regulations, 1996.

INVESTMENT AVENUES
Fixed Return options Variable
Return Options

1. Post Office (KVP, NSC, M.I.S.) 1. Mutual


Fund
2. Public Provident Fund 2. Share
And Stock Market
3. Bank Fixed Deposits #
Primary Market (IPO)
4. Government Securities or Gilts #
Secondary Market
5. RBI Taxable Bonds 3. Bullion
Market (Gold & Silver)
6. Insurance 4.
Property
7. Company Debentures 5.
Foreign Stock Exchange
8. Company Fixed Deposit
9. Infrastructure Bonds

DISTRIBUTION NETWORK OF MUTUAL


FUND

A.) BANKS AS INTERMEDIARIES

Increasingly banks will turn towards retailing other financial services like
mutual funds, capital market products, insurance and other debt products.
This movement towards fee based activities of banks will be propelled by
need to shore up profits due to declining spreads and the forces of disinter
mediation where borrowers and lenders are increasingly circumventing
banks.

A simple comparison between the benefits provided by banks and


mutual funds are given as below. It can be clearly observed that on the
two most priority concerns on the investors list, i.e., liquidity and returns
mutual funds are a definite high scorer over those provided by banks. The
only place where the banks gain and from where the mutual fund
organizations can largely benefit is the intensive customer network of the
banks.

ORGANISATION OF A MUTUAL FUND:

There are many entities involved and the diagram below


illustrates the

organizational set up of a mutual fund:

Mutual funds have a unique structure not shared with other


entities such as

companies of firms. It is important for employees & agents to


be aware of the

special nature of this structure, because it determines the


rights &

responsibilities of the fund’s constituents viz., sponsors,


trustees, custodians,

transfer agents & of course, the fund & the Asset Management

Company(AMC) the legal structure also drives the inter-


relationships between

these constituents.

The structure of the mutual fund India is governed by the SEBI


(Mutual
Funds) regulations, 1996. These regulations make it mandatory
for mutual

funds to have a structure of sponsor, trustee, AMC, custodian.


The sponsor is

the promoter of the mutual fund,& appoints the trustees. The


trustees are

responsibl

INTRODUCTION OF SBI MUTUAL FUND:


SBI MUTUAL FUND Pvt. Ltd. one of the leading fund houses in
the country with an investor base of over 5.8 million* and 20
year of rich experience in fund management consistently
delivering value to investor. SBI Funds management Pvt. Ltd.
is a joint venture between ‘The State Bank Of India’ one of
India’s largest banking enterprises, and societies Generale
Asset Management (France), one of the world’s leading fund
management companies that manages over US$ 500 Billion
worldwide.

It was in 1986 that the government of India amended banking

regulation act and allowed commercial banks in public sector


to set up mutual

funds. This lead to promotion of ‘SBI-MUTUAL FUND’ by State


Bank Of

India (SBI) in July 1987 followed by

• Canara Bank
• Indian bank
• Bank of India
• Bank of Baroda
• Punjab National bank
HISTORY OF SBI
MUTUAL FUND IN INDIA:
SBI mutual fund sponsored by Indian’s largest bank. One of the
response that these mutual funds are so popular is because
they have good trake record of getting money for their
investors. Another large contributor to SBI mutual funds is
societe Generale Asset Management who manager over 500
billion USD around the entire world.

Usally endeavors initiated by SBI mutual funds have paid off


for their investors. Their main motto is “Growth through
innovation and stable investment policies.”

SBI mutual funds were started over twenty year ago. Since
then they have built to an investor base of over 5.8 million*
people throughout the entire world. SBI mutual funds have
come up with 38 different schemes to increase the wealth of
their investors. Fifteen of those have paid off, increasing the
holdings of their investors by a substantial amount.

This is one of the highest success rates of any mutual fund. SBI
has also branched out into an offer shore fund called the
Resurgent India Opportunities Fund.

SEBI fund management Pvt. Ltd. serves its vast family of


investors through a network of over 130 point of acceptance,
28 investor service centres, 46 investor service Desks and 56
District Organizers. SBI mutual fund is the first Bank sponsored
fund to launch an offshore fund – Resurgent India
Opportunities Fund. Growth through innovation and stable
investment policies is the SBI MF credo.
Vision:
“ To be the most preferred and the largest fund house fall
asset classes, with a consistent track record of excellent
returns and best standards in customer service, product
innovation, technology and HR practices,”

Mission:
To constantly evolving fund house which focuses on customer
delight transparency and sustained returns.

To attracting, nurturing and retaining the best talents.

To leaders and not followers, Targeting to set the benchmark


rather than following it.

To leveraging on latest technology and group synergy to


enhance business effectiveness.

To global reach and awareness.

To active risk management and global best practices in all


business areas.

To launching a wide range of innovative products.

To be socially responsible through community development by


leveraging resources and knowledge base, To achieve
excellence in every activity we undertake.
Achievements of SBI Mutual
Fund:
The success of the company is driven by 9 sutras
namely:

TRUST , INTEGRITY, DEDICATION , COMMITMENT ,


ENTERPRISE , HARD WORK , HOME WORK , TEAM WORK PLAY,
LEARNING AND INNOVATION , EMPATHY AND HUMILITY , and
last but not least is the NETWORKING.

AWARDS:

SBI- MUTUAL FUND has been performing excellently

Since its inception. The fund has received lot of appreciation


for its

Performance from the mutual fund industry. It has been


awarded by

ICRA on line award 8 times, CNBC- TV 18 CRISIL 4 AWARDS,


the

Lipper award (year 05-06) and most recently the CNBC TV 18


Crisil

Mutual Fund Award of the year 2007 and 5 award for the
schemes.
PRODECTS OF SBI MUTUAL
FUND
Different schemes available & Their Objective In SBI
Mutual Fund

Equity Schemes:
• Large Cap & Blend Schemes:
 Magnum Multi Cap
Fund
 Magnum Equity Fund
 Magnum Index Fund
 Magnum Multiplier
Plus
 SBI Blue Chip
 Magnum Tax Gain
Scheme
 SBI One India Fund

• Sectorial Schemes:
• Magnum Sector Fund Umbrella (Contra Fund)
• Magnum Sector Fund Umbrella (Business Fund)
• Magnum Sector Fund Umbrella (FMCG Fund)
• Magnum Sector Fund Umbrella (IT Fund)
• Magnum Sector Fund Umbrella (Pharmacy Fund)
• Magnum Sector Fund Umbrella (Comma Fund)

• Small & Mid Cap Schemes:


 Magnum Global Fund
 Magnum Mid Cap Fund
• Market Natural Strategy:
 SBI Arbitrage
Opportunities Fund
• Hybrid Schemes Equity Oriented:
 Magnum Balance Fund
 Magnum NRI
Investment

DEBT SCHEMES:
 Magnum children benefit plan
 Magnum income plus fund
 Magnum income fund floating rate
plan
 Magnum monthly income plan
 Magnum income fund
 Magnum monthly income plan floater
 SBI dynamic bond fund
 Magnum gift fund
 SBI short horizon debt fund

LIQUID SCHEMES:
 Magnum Insta Cash Fund(Liquid
Floater)
 SBI Premier Liquid Fund
 Magnum Insta Cash Fund

Types of Mutual
Fund
A Mutual Fund may float several schemes, which may be classified on the
basis of its structure, its investment objectives and other objectives.

Mutual Fund schemes by structure:

1. Open Ended Scheme:

Open-Ended fund scheme is open for subscription all through


year. An investor can buy or sell the units at "NAV" (Net Asset
Value) related price at any time.
2. Close Ended Scheme:

A Close-Ended fund is open for subscription only during a


specified period, generally at the time of initial public issue. The
Close-Ended fund scheme is listed on the some stock exchanges
where an investor can buy or sell the units of this type of
scheme.

3. Interval Schemes:

These combine the features of open- ended and close-ended


schemes. They may be traded on the stock exchange or may be
open for sale or redemption during pre- determined intervals at
NAV related prices.

Mutual Fund schemes by Investment Objectives:

(I) EQUITY FUNDS

These funds invest a major part of their corpus in equities. The


composition of the fund may vary from scheme to scheme and the fund
manager’s outlook on various scrip’s.

The Equity Funds are sub-classified depending upon their investment


objective, as follows:

1. Growth Fund :

Aim to provide capital appreciations over the medium to long term.


These schemes normally invest a majority of their funds in equities
and are willing to bear short term decline in value for possible future
appreciation. These schemes are not for investors seeking regular
income or needing their money back in the short-term

2. Diversified Equity Fund :

Diversified equity funds are the most popular among investors.


They invest in many stocks across many sectors, and because they
have the freedom to chop and churn their portfolios as they like,
diversified equity funds are a good proxy to the stock market. If a
general exposure to equities is what you want, they are a good
option. They can invest in all listed stocks, and even in unlisted
stocks. They can invest in which ever sector they like, in what ever
ratio they like.
3. Equity – Linked Savings Schemes(ELSS) :

Equity – linked savings schemes (ELSS) are diversified equity


funds that additionally offer income tax benefits to individuals.
ELSS is one of the many section 80c instruments, along with the
more popular debt options like the PPF, NSC and infrastructure
bonds. In this Section 80c grouping. ELSS is unique. Being the only
instrument to offer a total equity exposure.

4. Index Fund :

An index fund is a diversified equity fund; with a difference- a fund


manager has absolutely no say in stock selection. At all times, the
portfolio of an index fund mirrors an index, both in its choice of
stocks and their percentage holding. As of March 2004, equity
index funds tracked either the Sensex or the Nifty. So, an index
fund that mirrors the Sensex will invest only in the 30 Sensex
stocks, that too in the same proportion as their weightage in the
index.

5. Sector Fund :

Sector funds invest in stocks from only one sector, or a handful of


sectors. The objective is to capitalize on the story in the sectors,
and offer investors a window to profit from such opportunities. It’s a
very narrow focus, because of which sector funds are considered
the riskiest among all equity funds.

6. Mid – Cap Fund :

These are diversified funds that target companies on the fast –


growth trajectory. In the long run, share prices are driven by growth
in a company’s turnover and profits. Market players refer to them as
‘mid-sized companies’ and ‘mid-cap stocks’ with size in this context
being benchmarked to a company’s market value. So, while a
typical large cap stock would have a market capitalization of over
Rs 1,000 crores, a mid-cap stock would have a market value of Rs
250-2,000 crores.

( II ) DEBT FUNDS:

These Funds invest a major portion of their corpus in debt papers.


Government authorities, private companies, banks and financial
institutions are some of the major issuers of debt papers. By investing in
debt instruments, these funds ensure low risk and provide stable income
to the investors.

Debt funds are further classified as:

1. Gilt Funds:

Invest their corpus in securities issued by Government, popularly


known as GOI debt papers. These Funds carry zero Default risk but
are associated with Interest Rate risk. These schemes are safer as
they invest in papers backed by Government.

2. Income Funds:

Income funds aim to maximize debt returns for the medium to


longer term. Invest a major portion into various debt instruments
such as bonds, corporate debentures and Government securities.

3. MIPs:

Invests around 80% of their total corpus in debt instruments while


the rest of the portion is invested in equities. It gets benefit of both
equity and debt market. These scheme ranks slightly high on the
risk-return matrix when compared with other debt schemes.

4. Short Term Plans (STPs):

Meant for investors with an investment horizon of 3-6 months.


These funds primarily invest in short term papers like Certificate of
Deposits (CDs) and Commercial Papers (CPs). Some portion of the
corpus is also invested in corporate debentures.

5. Liquid Funds:

Also known as Money Market Schemes, These funds are meant to


provide easy liquidity and preservation of capital. These schemes
invest in short-term instruments like Treasury Bills, inter-bank call
money market, CPs and CDs. These funds are meant for short-
term cash management of corporate houses and are meant for an
investment horizon of 1day to 3 months. These schemes rank low
on risk-return matrix and are considered to be the safest amongst
all categories of mutual funds.
Floating Rate Funds:

These income funds are more insulated from interest rate than
their conventional peers. In other words, interest rate changes,
which cause the NAV of a conventional debt fund to go up or
down, have little, or no, impact on NAVs of floating rate funds.

( III ) BALANCED FUNDS:

These funds, as the name suggests, are a mix of both equity


and debt funds. They invest in both equities and fixed income
securities, which are in line with pre-defined investment
objective of the scheme. These schemes aim to provide
investors with the best of both the worlds. Equity part provides
growth and the debt part provides stability in returns.

Each category of funds is backed by an investment philosophy,


which is pre-defined in the objectives of the fund. The investor
can align his own investment needs with the funds objective
and invest accordingly.

( IV ) HYBRID FUNDS:-

Growth and Income Fund:

Strike a balance capital appreciation and income for the


investors. In these funds portfolio is a mix between companies
with good dividend paying record and those with potential
capital appreciation. These funds are less risky than growth
funds bit more than income funds.

Facts about Mutual Fund


Equity instruments like shares from only a part of securities
held by Mutual Funds. Mutual Fund also invests in debt market,
which is relatively much safer.

The biggest advantage of Mutual Funds is their ability to


diversify the risk.

Mutual Funds exist in India since 1963. Mutual Fund market is


much evolved in India and they’re for last 60years.

Mutual Fund the best solutions for the people who want to
manage their risk and get good returns.

The size of Mutual Fund market in India is Rs. 107728 crores.

According to the SEBI-NCAER survey of Indian Investor about


15 million of 8.7% of households have invested in Mutual
Funds and about 23 millions are unit holders in India.

US-64 is very much a part of the market and is not immune to


vagaries. The crisis has arisen due to mismanagement of
funds.

Where Do Mutual Fund Invest?

Broadly mutual funds invest basically in 3 types of asset


classes:

Stocks: Stocks represent ownership or equity in a company,


popularly known as shares.

Bonds: These represent debt from companies, financial


institutions or government agencies.

Money market instruments: This includes short term debt


instrument such as treasury bills, certificate of deposits and
inter-bank call money.

What Is Net Asset Value ?

Net Asset Value (NAV) denotes the performance of a particular


scheme of a mutual fund. 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
held by the scheme. Since market value of securities changes
every day, NAV of a 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. For example, if the market value of securities
of a mutual fund scheme is Rs 200 lakhs and the mutual fund
has issued 10 lakhs units of Rs. 10 each to the investors, then
the NAV per unit of the fund is Rs.20. NAV is required to be
disclosed by the mutual funds on a regular basis - daily or
weekly - depending on the type of scheme.

Basic Concepts and Loads in


Mutual Fund
Determination of NAV: The NAV of the any scheme at any time
shall be determined by dividing the net assets of the scheme
by the number of outstanding units on the valuation date.

The NAV of the scheme will be calculated on daily basis:

Fair/market value of securities + Approved

Income + Receivable + other assets


+

Unauthorized issue Exp. Accrued exp.-


payables-

Other liabilities

NAV per unit =


------------------------------------------------------------------

No. of units outstanding of the scheme

Recurring Expenses: The total annual recurring expenses of the


scheme excluding issue or redemption expenses.
Entry Load: The load charged at the time of investment is
known as entry load. It’s meant to cover the cost that the AMC
spends in the process of acquiring subscriber’s commission
payable to brokers, advertisements, register expenses etc. The
load is recovered by way of charging a sale price higher than
the prevailing NAV.

Exist Load: Some AMC do not charge an entry load but they
charged an exist load i.e., they deduct a load before paying out
the redemption proceeds. Psychologically, investors are much
more willing to pay exist loads as compared to entry loads.

Unit: Units mean the investment of the unit holders in a


scheme. Each unit represents one undivided share in the
assets of a scheme. The value of each unit changes, depending
on the performance of the fund.

KEY PERSONEL OF SBI MUTUAL FUND


Mr. Syed shahbuddin
Mr. Didier Turpin
Mr. Achal K. Gupta
Mr. Sanjay Sinha
Mr. R. S. Srinivas Jain
Mr. C A Santosh
Ms. Aparna Nirgude
Mr. Ashutosh P Vaidya
Officer
Mr. Parijat Agarwal
Managing Director
Dy. CEO
Chief Operating Officer
Chief Investment Officer
Chief Marketing Officer
Chief Manager - Customer
Service
Chief Risk Officer
Company Secretary &
Compliance
Head – Fixed Income

Asset Allocation Fund :

These funds follow variable asset allocation policy. These move in


an out of an asset class (equity, debt, money market or even non-
financial assets). Asset allocation funds are those, which follow
more stable allocation policies like balanced funds. Those, which
flexible allocation policies, are like aggressive growth or speculative
funds.

SCHEMES Last Dividend per Dividend per


Dividend unit unit
Date (Retail) (Corporate)
• SBI - Magnum Equity Fund- 31-Dec- 5.00000000 5.00000000
Dividend 2009
• SBI - Magnum Multiplier Plus 22-Oct- 7.00000000 7.00000000
Scheme - 93-Dividend 2009
• SBI - Magnum TaxGain 05-Mar- 4.00000000 4.00000000
Scheme-Dividend 2010
• SBI - Magnum Global Fund - 12-Mar- 5.00000000 5.00000000
Dividend 2010
• SBI - Magnum Income Fund 29-Sep- .21890000 .20370000
1998 Div. Option 2009
• SBI - Magnum Insta Cash 20-Aug- .00901000 .00901000
Fund - Dividend Option 2010
• SBI - Magnum Insta Cash 20-Aug- .00200000 .00200000
Fund - Daily Dividend Option 2010
• SBI - Magnum Insta Cash 06-Apr- 8.14240000 8.14240000
Fund - Cash Option 2008
• SBI - Magnum Sector Funds 03-Mar- 6.00000000 6.00000000
Umbrella - FMCG 2006
• SBI - Magnum Sector Funds 04-Jul-2007 4.00000000 4.00000000
Umbrella - IT
• SBI - Magnum Sector Funds 31-Dec- 3.90000000 3.90000000
Umbrella - Pharma Dividend 2004
• SBI - Magnum Sector Funds 13-Aug- 3.50000000 3.50000000
Umbrella Contra - Dividend 2010
• SBI - Magnum Gilt Fund - 30-Jul-2010 .02870000 .02680000
Short Term Dividend
• SBI - Magnum Gilt Fund - 29-Jun- .08760000 .08150000
Long Term Dividend - 2009
Dividend Plan
• SBI - Magnum Gilt Fund - 29-Jun- .08760000 .08150000
Long Term Dividend - PF 2009
Regular
• SBI - Magnum Gilt Fund - 29-Jun- .08150000 .08150000
Long Term Dividend - PF 2009
Fixed 1 Year
• SBI - Magnum Gilt Fund-Long 29-Jun- .04380000 .04080000
Term Div-PF Fixed 2 Years 2009
• SBI - Magnum Gilt Fund-Long 29-Jun- .04080000 .04080000
Term Div-PF Fixed 3 Years 2009
• SBI - Magnum Index Fund - 23-Mar- 3.30000000 3.30000000
Dividend 2006
• SBI - Magnum Insta Cash 20-Aug- .00885000 .00885000
Fund Liquid Floater Plan - 2010
Dividend
• SBI - Magnum Insta Cash 06-Apr- 4.01090000 4.01090000
Fund Liquid Floater Plan - 2008
Growth
• SBI - Magnum Income Plus 25-Jun- .13200000 .12310000
Fund - Investment Plan - 2010
Dividend
• SBI - Magnum Income Plus 25-Jun- .08830000 .08830000
Fund - Savings Plan - 2010
Dividend
• SBI Premier Liquid Fund - 20-Aug- .00120000 .00120000
Institutional - Daily Dividend 2010
• SBI Premier Liquid Fund - 20-Aug- .01580000 .01580000
Institutional - Fortnightly 2010
Dividend
• SBI Premier Liquid Fund - 06-Apr- 3.00240000 3.00240000
Institutional - Growth 2008
• SBI Premier Liquid Fund - 20-Aug- .00120000 .00120000
Super Institutional - Daily 2010
Dividend
• SBI Premier Liquid Fund - 06-Apr- 2.85220000 2.85220000
Super Institutional- Growth 2008
• SBI Premier Liquid Fund - 03-Oct- .01240000 .01240000
Super Institutional - Weekly 2008
Dividend
• SBI Premier Liquid Fund - 20-Aug- .00881000 .00881000
Institutional - Weekly 2010
Dividend
• SBI - Magnum NRI 30-Mar- .05000000 .04680000
Investment - Short Term 2005
Bond Plan - Div.
• SBI - Dynamic Bond Fund - 25-Jun- .10990000 .10240000
Dividend 2010
• SBI - Magnum Income Fund 30-Jul-2010 .03580000 .03330000
FR Short Term Plan Dividend
• SBI - Magnum Income Fund 20-Aug- .00660000 .00610000
Floating Rate Short Term Plan 2010
Weekly Dividend
• SBI - Magnum Income Fund 25-Jun- .08780000 .08190000
FR Long Term Plan Regular 2010
Dividend
• SBI - Magnum Income Fund 05-Oct- .12400000 .11600000
FR Long Term Institutional 2006
Dividend
• SBI - Emerging Businesses 30-Jul-2009 2.50000000 2.50000000
Fund-Dividend
• SBI - Magnum MidCap Fund- 31-Dec- 3.50000000 3.50000000
Dividend Option 2007
• SBI- MDFS 60 Days (Apr 05 13-Jun- .07881000 .07340000
Series) Dividend Option 2005
• SBI - Magnum COMMA Fund- 15-Mar- 3.00000000 3.00000000
Dividend 2010
• SBI - Magnum Multicap Fund- 18-Jan- 2.50000000 2.50000000
Dividend 2008
• SBI - Magnum Debt Fund 27-Nov- .58298000 .58298000
Series - 13 Months (Oct 05) 2006
Div Option
• SBI - Magnum Monthly 26-Mar- .39420000 .36690000
Income Plan Floater - Annual 2010
Dividend
• SBI - Magnum Monthly 30-Jul-2010 .04620000 .04310000
Income Plan Floater - Monthly
Dividend
• SBI - Magnum Monthly 25-Jun- .08780000 .08190000
Income Plan Floater - 2010
Quarterly Dividend
• SBI - Magnum Debt Fund 24-May- .09800000 .09100000
Series - 180 Days D (Nov- 2006
05 ) Dividend Option
• SBI Blue Chip Fund-Dividend 30-Nov- 2.00000000 2.00000000
2007
• SBI Arbitrage Opportunities 19-May- .10000000 .10000000
Fund-Dividend 2010
• SBI-SHF- Ultra Short Term 20-Aug- .00413000 .00385000
Fund - Institutional PLAN - 2010
Daily Dividend
• SBI-SHF- Ultra Short Term - 30-Jul-2010 .04000000 .03730000
Institutional PLAN - Monthly
Dividend
• SBI - SHF- Ultra Short Term 20-Aug- .00862000 .00803000
Fund - Institutional PLAN 2010
-Weekly Dividend
• SBI-SHF- Ultra Short Term 20-Aug- .00395000 .00368000
Fund - Retail PLAN - Daily 2010
Dividend
• SBI-SHF- Ultra Short Term 20-Aug- .01410000 .01310000
Fund - Retail PLAN - 2010
Fortnightly Dividend
• SBI-SHF- Ultra Short Term 30-Jul-2010 .03750000 .03500000
Fund - Retail PLAN - Monthly
Dividend
• SBI-SHF- Ultra Short Term - 20-Aug- .00878000 .00819000
Retail PLAN - Weekly Dividend 2010
• SBI-SHDF-Short Term- 30-Jul-2010 .03500000 .03270000
Institutional Plan-Monthly
Dividend
• SBI-SHDF-Short Term- 20-Aug- .00830000 .00770000
Institutional Plan-Weekly 2010
Dividend
• SBI-SHDF-Short Term-Retail 20-Aug- .01410000 .01310000
Plan-Fortnightly Dividend 2010
• SBI-SHDF-Short Term-Retail 30-Jul-2010 .03360000 .03140000
Plan-Monthly Dividend
• SBI-SHDF-Short Term-Retail 20-Aug- .00750000 .00700000
Plan-Weekly Dividend 2010
• SBI Debt Fund Series - 90 24-Feb- .20314000 .18906000
Days-32- Dividend 2009
• SBI Debt Fund Series- 15 25-Jun- .04950000 .04610000
Months - 5 - Dividend 2010
• SBI Debt Fund Series- 180 25-Jun- .03970000 .03700000
Days - 9 - Dividend 2010
• SBI Debt Fund Series- 370 25-Jun- .04190000 .03910000
Days - 3 - Dividend 2010
• SBI Debt Fund Series- 370 25-Jun- .04400000 .04100000
Days - 4 - Dividend 2010
• SBI - Magnum Balanced Fund 27-Nov- 5.00000000 5.00000000
- Dividend Option 2009
• SBI - Magnum Monthly 30-Jul-2010 .04620000 .04310000
Income Plan - Monthly
Dividend
• SBI - Magnum Monthly 25-Jun- .13190000 .12290000
Income Plan Quarterly 2010
Dividend
• SBI - Magnum Monthly 26-Mar- .52560000 .48920000
Income Plan - Annual 2010
Dividend

Here is a list of Mutual Funds of SBI which includes Equity Funds,


Debt Funds and Balanced Funds.

Latest NAV
Scheme Name NAV (Net Asset Date
Value)
SBI Magnum Income Fund-Bonus 13.7249 09-Aug-
2010
SBI Magnum Income Fund-Dividend 10.6285 09-Aug-
2010
SBI Magnum Income Fund-Growth 22.6519 09-Aug-
2010
SBI Magnum Income Plus Fund - Investment Plan (D) 10.9379 09-Aug-
2010
SBI Magnum Income Plus Fund - Investment Plan (G) 15.8895 09-Aug-
2010
SBI Magnum Income Plus Fund - Savings Plan (D) 10.4928 09-Aug-
2010
SBI Magnum Income Plus Fund - Savings Plan (G) 10.9472 09-Aug-
2010
SBI Magnum Monthly Income Plan-Dividend-Annually 11.3227 09-Aug-
2010
SBI Magnum Monthly Income Plan-Dividend-Monthly 10.6780 09-Aug-
2010
SBI Magnum Monthly Income Plan-Dividend-Quaterly 10.4778 09-Aug-
2010
SBI Magnum Monthly Income Plan – Growth 19.7426 09-Aug-
2010
Magnum Equity Fund –Dividend 32.47 09-Aug-
2010
Magnum Equity Fund- Growth 43.03 09-Aug-
2010
SBI Arbitrage Opportunities Fund – Div 11.0784 09-Aug-
2010
SBI Arbitrage Opportunities Fund – Gr 12.8610 09-Aug-
2010
SBI BLUE CHIP FUND-DIVIDEND 12.77 09-Aug-
2010
SBI BLUE CHIP FUND-GROWTH 14.66 09-Aug-
2010
SBI Magnum Children Benefit Plan- Holding Held for <= 1 Year 21.9116 09-Aug-
2010
SBI Magnum COMMA Fund – Dividend 16.58 09-Aug-
2010
SBI Magnum COMMA Fund – Growth 24.55 09-Aug-
2010
SBI Magnum Index Fund – Dividend 23.9954 09-Aug-
2010
SBI Magnum Index Fund – Growth 46.8487 09-Aug-
2010
SBI Magnum MIDCAP FUND – DIVIDEND 18.50 09-Aug-
2010
SBI Magnum MIDCAP FUND – GROWTH 24.12 09-Aug-
2010
SBI Magnum Multicap Fund - Dividend Option 14.06 09-Aug-
2010
SBI Magnum Multicap Fund - Growth Option 18.51 09-Aug-
2010
SBI Magnum Multiplier Plus Scheme - 93 –Dividend 60.04 09-Aug-
2010
SBI Magnum Multiplier Plus Scheme - 93 –Growth 84.55 09-Aug-
2010
SBI MAGNUM NRI FLEXIASSET PLAN-DIVIDEND 29.1019 09-Aug-
2010
SBI MAGNUM NRI FLEXIASSET PLAN-GROWTH 28.9933 09-Aug-
2010
SBI MAGNUM GLOBAL FUND 94 – DIVIDEND 32.19 09-Aug-
2010
SBI MAGNUM GLOBAL FUND 94 – GROWTH 57.58 09-Aug-
2010
SBI MSFU CONTRA-DIVIDEND 26.67 09-Aug-
2010
SBI MSFU CONTRA-GROWTH 58.13 09-Aug-
2010
SBI MSFU EMERGING BUSINESSES FUND – DIVIDEND 18.28 09-Aug-
2010
SBI MSFU EMERGING BUSINESSES FUND – GROWTH 41.21 09-Aug-
2010
SBI MSFU FMCG 28.22 09-Aug-
2010
SBI MSFU IT 21.79 09-Aug-
2010
SBI MSFU PHARMA – DIVIDEND 33.28 09-Aug-
2010
SBI MSFU PHARMA – GROWTH 40.27 09-Aug-
2010
SBI Magnum Balanced Fund – Dividend 27.56 09-Aug-
2010
SBI Magnum Balanced Fund – Growth 51.35 09-Aug-
2010
MAGNUM INSTA CASH FUND - DAILY DIVIDEND 16.7503 09-Aug-
2010
SBI Magnum Institutional Income Fund - Savings - Dividend(Upto 10.0325 22-Mar-
22/03/07) Renamed as SBI Premier Liquid Fund 2007
SBI Magnum Institutional Income Fund - Savings - Growth(Upto 22/03/07) N.A. 25-Jul-
Renamed as SBI Premier Liquid Fund 2007
SBI MGST-DIVIDEND 10.8102 09-Aug-
2010
SBI MGST-GROWTH 18.7327 09-Aug-
2010
SBI MAGNUM TAXGAIN SCHEME 1993 – DIVIDEND 41.57 09-Aug-
2010
SBI MAGNUM TAXGAIN SCHEME 1993 – GROWTH 60.98 09-Aug-
2010

Asset Management
Company (AMC):
The role of an Asset management companies is to act as the
investment

manager of the trust. They are the ones who manage money of
investors. An
AMC takes decisions, compensates investors through dividends,
maintains

proper accounting & information for pricing of units, calculates the


NAV, &

provides information on listed schemes. It also exercises due diligence


on

investments & submits quarterly reports to the trustees. AMCs have


been set

up in various countries internationally as an answer to the global


problem of

bad loans.

Bad loans are essentially of two types: bad loans generated out of the
usual

banking operations or bad lending, and bad loans which emanate out
of a

systematic banking crisis.

It is in the latter case that banking regulators or governments try to


bail out the

banking system of a systematic accumulation of bad loans which acts


as a drag

on their liquidity, balance sheets and generally the health of banking.


So, the

idea of AMCs or ARCs is not to bail out banks, but to bail out the
banking system it self.

Types of AMCs in Indian Context:


The following are the various types of AMCs we have in India:

• AMCs owned by bankes.


• AMCs owned by financial institutions.
• AMCs owned by Indian private sector companies.
• AMCs owned by foreign institutional investors.
• AMCs owned by Indian & foreign sponsors.

Custodian:
Often an independent organization, it takes custody all securities &
other

assets of mutual fund. Its responsibilities include receipt & delivery of

securities collecting income-distributing dividends, safekeeping of the


unit &

segregating assets & settlements between schemes.

Mutual fund is managed either trust company board of trustees. Board


of

trustees & trust are governed by provisions of Indian trust act. If


trustee is a

company, it is also subject Indian Company Act. Trustees appoint AMC


in

consultation with the sponsors & according to SEBI regulation. All


mutual

fund schemes floated by AMC have to be approved by trustees.


Trustees

review & ensure that net worth of the company is according to


stipulated

norms, every quarter.

Though the trust is the mutual fund, the AMC is its operational face.
The

AMC is the first functionary to be appointed, & is involved in


appointment of

all other functionaries. The AMC structures the mutual fund products,
markets
them & mobilizes fund, manages the funds & services to the investors.

A draft offer document is to be prepared at the time of launching the


fund.

Typically, it pre-specifies investment objectives of the fund, the


risk

associated, the cost involved in the process & the broad rules
to enter & to exit

from the fund & other areas of operation. In India as in most


countries, these

sponsors need approval from a regulator, SEBI in our case.


SEBI looks at

track records of the sponsor & its financial strength granting


approval to the

fund for commencing operations.

A sponsor then hires an asset management company to invest


the funds

according to the investment objective. It also hires another


entity to be the

custodian of the assets of the fund & perhaps the third one to
handle registry

work for the unit holder of the fund.

Registrars & Transfer Agent(R & T Agent):

The Registrars & Transfer Agents(R & T Agents) are responsible


for the

investor servicing function, as they maintain the records of


investors in mutual

funds. They process investor applications; record details


provide by the
investors on application forms; send out to investors details
regarding their

investment in the mutual fund; send out periodical information


on the

performance of the mutual fund; process dividend payout to


investor;

incorporate changes in information as communicated by


investors; & keep the

investor record up-to-date, by recording new investors &


removing investors

who have withdrawn their funds.

SEBI - Securities and Exchange Board of


India:
Securities and Exchange Board of India (SEBI) is a board (autonomous

body) created by the Government of India in 1988 and given statutory


form in

1992 with the SEBI Act 1992 with its head office at Mumbai.

The Securities and Exchange Board of India is perhaps the most


important

regulatory body. Similar to the Securities Exchange Commission in the


US, it

is the authority that has to always be on its toes. More so, when the
markets

are doing well and there are a spate of IPOs (initial public offerings) or
FPO’s

(follow-on public offerings) like now.


Its main mandate is to protect the interest of investors in the securities
markets

and to promote the development of and to regulate the securities


markets so as

to establish a dynamic and efficient securities market.

When investors have complaints against listed companies or registered

intermediaries, SEBI acts as the nodal agency for addressing these


complaints,

if they are not solved directly between the parties concerned, or if the
investor

is not happy with the response.

SEBI has listed certain categories of grievances for which investors can
file

complaints with it. These include:

• Non-receipt of refund order or allotment advice in case of


investment
• in IPO's, FPO's and rights issues
• Non-receipt of dividend from listed companies
• Non-receipt of share certificates after transfer from listed
companies
• Non-receipt of debentures after transfer or non-receipt of
interest or
• principal on redemption and non-receipt of interest on
delayed repayment
• Non-receipt of rights offer letter

Collective investment schemes like plantation companies. Investors


can send

complaints to SEBI regarding non-receipt of invested principal and


returns

there from.
Mutual funds/venture capital funds/foreign venture capital
investors/foreign

institutional investors/portfolio managers/custodians - Complaints


mutual

funds like non-receipt or delay in receipt of dividends/redemptions,


non-

availability of portfolio disclosures, non-receipt of transaction


statement, etc.

Brokers - This is the most common area of complaints for the average

investor. Complaints against brokers stem from disputes over


brokerage rates,

non-receipt of purchased shares or payments for sold shares, auction


of shares

sold and delivered timely, but delay at broker's end, etc.

Complaints against securities lending intermediaries may arise due to


non-

receipt of shares lent by the investor or interest thereupon, or non-


receipt of

funds upon return of borrowed shares or excessive interest charged


upon

borrowing.

Complaints against merchant bankers, registrar and transfer agents,


bankers to

issues and underwriters generally stem from problems in primary


market

issues, like non-disclosures, service issues etc.

Complaints against securities exchanges, clearing or settlement


houses or

depositories - these concern irregularities or failure to act diligently,


like the
Calcutta Stock Exchange in the last securities scam or the NSDL in the
recent

IPO scam.

Derivative trading - Many investors sign legal papers empowering the


broker

to trade on their behalf, without proper knowledge and wake up on


seeing their

margin money eroded due to sustained losses.

in other instances, major complaints are against brokers squaring off

outstanding derivatives positions due to lack of margins or not giving


the

client adequate time or notice, leading to huge losses for


investors/traders.

These happen especially when markets turn volatile of see sustained


and large

one- way movements.

There are other areas such as corporate governance, corporate


restructuring,

acquisitions, buybacks, delisting and other compliance related issues


for which

one could approach SEBI. For all this one can

File complaints electronically on the SEBI website

Get a complaint registration number

Track the status of the complaint online

SEBI looks into the merit of the complaint and takes up the matter with

the concerned company or intermediary

It can also direct intermediaries to redress the investor complaints


satisfactorily if the case merits such an order one can also send
grievances by

post or fax.

In other words, there is a wide range of issues that come under the
jurisdiction

of SEBI. And the onus is entirely on it to keep the stocks markets


healthy.

STRUCTURE OF ASSET MANAGEMENT COMPANY (AMC)

MUTUAL FUND STRUCTURE

The structure of mutual funds in India is governed by the SEBI


Regulations,1996. These regulations make it mandatory for
mutual funds to have a 3-tier structure of Sponsors-Trustee-
AMC (Asset Management Company).

The Sponsor is the promoter of mutual fund, and appoints the


Trustee. The Trustees are responsible to the investors in the
mutual funds, and appoint the AMC for managing the
investment portfolio. The AMC is the business face of the
mutual funds, as it manages all the affairs of mutual funds.
The mutual funds and AMC have to be registered by the SEBI.

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 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

Trust

The Mutual Fund is constituted as a trust in accordance with


the provisions of the Indian 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
inter-alia ensure that the AMC functions in the interest of
investors and in accordance with the Securities 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)

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 directors 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.

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 communication with
investor and up-dates investor records.

Custodian

A custodian handles the investment back office of a mutual


fund. Its responsibilities include receipt and delivery of
securities, collection of income, distribution of dividends, and
segregation of assets between schemes. The sponsor of a
mutual fund cannot act as a custodian to the fund. For
example, Deutsche Bank is a custodian, but it cannot service
Deutsche Mutual Fund, its mutual fund arm.

Depository

Indian capital markets are moving away from having physical


certificates for securities, to ownership of these securities in
‘dematerialized’ form with a Depository. sponsor hires an asset
management company to invest the funds according to the
investment objective. It also hires another entity to be
custodian of the assets of the funds and perhaps a third one to
handle registry work for holders (subscribers) of the funds. In
the Indian context, the sponsors promote the Asset
Management Company also in which it holds majority stake. In
many cases a sponsor can hold a 100% stake in Asset
Management Company (AMC). This has floated different
mutual funds schemes and also acts as an assets manager for
the funds collected under the scheme.
Risk Associated With Mutual Fund:-

Interest Rate Risk

Bond price move inversely to changes in interest rate. If


interest rate go up bond price come down and vice-versa
changes in bond price will affect the NAV of income funds since
NAV is compiled on a daily basis, the effect of interest rate
fluctuation will get reflected in the NAV.

Liquidity Risk

This prefer to at which security can be sold at or near its true


value. The primary assessment of liquidity risk is the spread
between the bid price and the offer price quoted by dealer.

Credit Risk

Credit risk or default risk refers to the risk that on investors of


a fixed income security may default. Because of the risk,
debentures are sold at a fixed spread above these offered a
treasury security, which are considered as risk free. Normally,
fixed income security will fluctuate depending upon the actual
changes in the provided level of credit risk and actual event of
default.

Market Risk

The prices of shares are subject to wide price fluctuations


depending upon market conditions over which nobody has a
control. Moreover, every economy has to pass through a cycle-
Boom, Recession, Slump and Recovery. The phase of the
business cycle affects the market conditions to a larger extent.

OMPETITORS OF SBI MUTUAL


FUND
Some of the main Competitors of SBI
Mutual Fund in Varanasi are as Follows:
ICICI MUTUAL FUND
ICICI Prudential Asset Management Company enjoys the strong
parentage of Prudential plc, one of UK,S largest player in
the insurance & fund management sector and ICICI Bank, a
well- known and trusted name in financial services in India.
ICICI Prudential Assets Management Company, in a span of just
over eight years, has forged a position of pre-eminence in the
Indian Mutual Fund industry as one of the largest assets
management companies in the country with average assets
under management of Rs. 80,555.07 Crore (as of Feb 28,
2010). The Company manages a comprehensive range of
schemes to meet varying investment needs of its investors
spread across 230 cities in the country.

RELIANCE MUTUAL FUND


Reliance Mutual Fund (RMF) is one of India Mutual Funds, with
Average Assets Under Management (AAUM) of Rs. 1,15,753
Crores and an investor count of over 75 Lakh folios.

Reliance Mutual Fund, a part of the Reliance – Anil Dhirubhai


Ambani Group, is one of the fastest growing mutual fund in the
country. RMF offers investors a well-rounded portfolio of
products to meet varying investor requirements and has
presence in 159 cities across the country. Reliance Mutual
Fund constantly endeavors to launch innovative products and
customer service initiatives to increase value to investor.
“Reliance Mutual Fund schemes are managed by Reliance
Capitol Assets Management Limited ., a subsidiary of Reliance
Capitol Limited, which holds 93.37% of the paid-up capitol of
RCAM, the balance paid-up capitol being held by minority
shareholder.”

AXIS (UTI) MUTUAL FUND:


January 14, 2003 is when UTI Mutual Fund started to pave its
path following the vision of UTI Assets Management CO, Pvt.
Ltd. for managing the schemes of UTI Mutual Fund and the
schemes transferred/migrated from the erstwhile Unit Trust of
India.

UTIAMC provides professionally managed back office support


for all business services of UTI Mutual Fund in accordance with
the provisions of the Investment Management Agreement, the
Trust Deed, the SEBI (Mutual Funds) Regulations and the
objective of the schemes. State-of-the-art system and
communications are in place to ensure a seamless flow across
the various activities undertaken by UTIMF.

Since February 3, 2004, UTIAMC is also a registered portfolio


manager under the SEBI (Portfolio Managers) Regulation, 1993
for undertaking portfolio management services. UTIAMC also
acts as the manager and marketer to offshore funds through
its 100 % subsidiary, UTI International Limited, registered in
Guernsey, Channel Island. UTIAMC presently manages a corpus
of over Rs. 73,588 Crores* as on 30th September

2009-2010 (source: www.amfindia.com) UTI Mutual Fund has a


track record of managing a consisting 114 UTI Financial
Centres (UFCs) and UTI International offices in London, Dubai,
Bahrain. With a view to reach to common investors at district
level, One satellite office have also been opened. UTIAMC has a
well-qualified, professional fund management team, Which has
been fully empowered to manage funds with greater efficiency
and accountability in the hole interest of the unit holders. The
fund managers are ably supported by a strong in-house
securities research department. To ensure investors interested,
a risk management department is also in operation.

HDFC MUTUAL FUND:


HDFC Assets Management Company Ltd. (AMC) was
incorporated under the companies Act, 1956, on December 10,
1999, and was approved to act as an Assets Management
Company for the HDFC Mutual Fund by SEBI vide its letter
dated July 5, 2000.
The registered office of the AMC is situated at Roman House,
3rd Floor, H.T. Parekh Marge , 169, Backbay Reclamation,
Churchgate , Mumbai - 400 020.

In terms of Investment Management Agreement, the Trustee


has appointed the HDFC Asset Management Company Limited
to manage the Mutual Fund. The paid-up capital of the AMC is
Rs.25.161 crores.

BIRLA SUN LIFE MUTUAL FUND:

Advantage & Disadvantages of


Mutual Funds

The advantages of investing in a Mutual Fund are:

• Professional Management –

The primary advantage of funds (at least theoretically) is the


professional

management of your money. Investors purchase funds


because they do not

have the time or the expertise to manage their own portfolio. A


mutual fund is
a relatively inexpensive way for a small investor to get a full-
time manager to

make and monitor investments.

• Diversification –

By owning shares in a mutual fund instead of owning individual


stocks or

bonds, your risk is spread out. The idea behind diversification


is to invest in a

large number of assets so that a loss in any particular


investment is minimized

by gains in others. In other words, the more stocks and bonds


you own, the

less any one of them can hurt you (think about Enron). Large
mutual funds

typically own hundreds of different stocks in many different


industries. It

wouldn't be possible for an investor to build this kind of a


portfolio with a

small amount of money.

• Economies of Scale –

Because a mutual fund buys and sells large amounts of


securities at a time, its

transaction costs are lower than you as an individual would


pay.

Convenient Administration:

Investing in a Mutual Fund reduces paperwork and helps you


avoid many
problems such as bad deliveries, delayed payments and follow
up with brokers

and companies. Mutual Funds save your time and make


investing easy and

convenient.

Return Potential

Over a medium to long-term, Mutual Funds have the potential


to provide a

higher return as they invest in a diversified basket of selected


securities.

LowCosts

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, demat costs, depository costs etc and


other fees translate

into lower costs for investors.

Liquidity

In open-end schemes, the investor gets the money back


promptly at net asset

value related prices from the Mutual Fund. In closed-end


schemes, the units

can be sold on a stock exchange at the prevailing market price


or the investor
can avail of the facility of direct repurchase at NAV related
prices by the

Mutual Fund.

Transparency

You get regular information on the value of your investment in


addition to

disclosure on the specific investments made by your scheme,


the proportion

class of assets and the fund manager's investment strategy


and

outlook.

Flexibility

Through features such as regular investment plans, regular


withdrawal plans

and dividend reinvestment plans, you can systematically invest


or withdraw

funds according to your needs and convenience.

Affordability

Investors individually may lack sufficient funds to invest in


high-grade stocks.

A mutual fund because of its large corpus allows even a small


investor to take

the benefit of its investment strategy.

Choice of Schemes:

Mutual Funds offer a family of schemes to suit your varying


needs over a
lifetime.

Well-Regulated

All Mutual Funds are registered with SEBI and they function
within the

provisions of strict regulations designed to protect the interests


of investors.

The operations of Mutual Funds are regularly monitored by


SEBI.

AMFI is the supervisory body of Mutual Fund Industry.

Simplicity –

Buying a mutual fund is easy! Pretty well any bank has its own
line of mutual

funds, and the minimum investment is small. Most companies


also have

Disadvantages of Mutual Funds:

The disadvantages of investing in a Mutual Fund are:

• Professional Management-

Did you notice how we qualified the advantage of professional


management

with the word "theoretically"? Many investors debate over


whether or not the

so-called professionals are any better than you or I at picking


stocks.

Management is by no means infallible, and, even if the fund


loses money, the
manager still takes his/her cut. We'll talk about this in detail in
a later section.

• Costs –

Mutual funds don't exist solely to make your life easier--all


funds are in it for a

profit. The mutual fund industry is masterful at burying costs


under layers of

jargon. These costs are so complicated that in this tutorial we


have devoted an

entire section to the subject.

• Dilution –

It's possible to have too much diversification (this is explained


in our article

entitled "Are You Over-Diversified?"). Because funds have


small holdings in

so many different companies, high returns from a few


investments often don't

make much difference on the overall return. Dilution is also the


result of a

successful fund getting too big. When money pours into funds
that have had

strong success, the manager often has trouble finding a good


investment for all the new money.

• Taxes –

When making decisions about your money, fund managers


don't consider your
personal tax situation. For example, when a fund manager sells
a security, a

capital-gain tax is triggered, which affects how profitable the


individual is

from the sale. It might have been more advantageous for the
individual to

defer the capital gains liability.

FREQUENTLY USED TREMS

Net Asset Value (NAV)

Net Asset Value is the market value of the assets of the


scheme minus its

liabilities. The per unit NAV is the net asset value of the
scheme divided by

the number of units outstanding on the Valuation Date.

The net asset value (NAV) is the market value of the fund's
underlying

securities. It is calculated at the end of the trading day. Any


open-end funds

buy or sell order received on that day is traded based on the


net asset value

calculated at the end of the day. The NAV per units is such Net
Asset Value

divided by the number of outstanding units

NAV =

Market Value of Assets - Liabilities

-----------------------------
Units Outstanding

For eg., if the market value of the securities of a mutual fund


scheme is Rs.

200 lakhs & the mutual fund has issued 10 lakhs units at Rs.
10 to the

investors, then the NAV per unit of the fund is Rs.20. NAV is
required to be

disclosed by the mutual funds on a regular basis- daily or


weekly- depending

Sale Price

the price you pay when you invest in a scheme or NAV a unit
holder is

charged while investing in an open-ended scheme is sale price.


Also called

Offer Price. It may include a sales load if applicable.

Repurchase Price

Is the price at which a close-ended scheme repurchases its


units and it may

include a back-end load. This is also called Bid Price.

Redemption Price

Is the price at which open-ended schemes repurchase their


units and close-

ended schemes redeem their units on maturity. Such prices


are NAV related.

Sales Load

Is a charge collected by a scheme when it sells the units. Also


called, ‘Front-
end’ load. A load is one that charges a percentage of NAV for
entry or exit.

That is, each time one buys or sells units in the fund, a charge
will be payable.

This charge is used by the mutual fund for marketing &


distribution expenses.

Suppose the NAV per unit is Rs.10. if the entry as well as exit
load charged

were 1%, then the investors who buy would be required to pay
Rs.10.10 &

those who offer their units for repurchase to the mutual fund
will get only

Rs.9.9 per unit. The investors should take the loads into
consideration while

making investment as these affect their yields/returns.

No Load

Schemes that do not charge a load are called ‘No


Load’ schemes. A no-load

fund is one that does not charge for entry or exit. It means the
investors can

enter the fund/scheme at NAV and no additional charges are


payable on purchase or sales of unit.

The above pyramid speaks about the different types of risk and
the respective

growth associated with the risk.

It can be seen that, at the lower level risk is very less and their
more safety.
This kind of portfolio is usually preferred by the in the third
level of their life

cycle i.e. mainly people who are pension holders.

As we move on to the pyramid we see that there is average


risk and reasonable

growth and income. These are people in second level of their


life cycle who

are well settled in life who are ready to take the calculated
risk.

The last level depicts a picture of people who can assume the
highest risk.

Research Methodology
a. Research Design: Descriptive Design

b. Data Collection Method: Survey Method

c. Universe: Rajkot (North and West)


d. Sampling Method: Non probability convenience sampling method

e. Sample Size: 100 respondents

f. Sampling Unit: Businessmen, Government Servant,


Professional,Retired Individuals

g. Data Source: Primary data

h. Data Collection Instrument: Structured Questionnaire

Data analysis and


interpretations
1). Do you invest your saving in mutual fund?

Investment Willingness

Investment Number Of Respondents


Yes 68
No 32
Total 100

Table 7.1
Investment Willingness

Graph 7.1

We observe that 68% of all the respondents invest in mutualfund. We


have got 32% of our total respondents who do not invest in any mutual
fund at all.

2). Do you have complete information about mutual fund?

Information Number Of Respondents


Yes 56
No 24
Not Much 20
Total 100

Awareness Level

Table 7.2

Awareness Level

Graph 7.2
We observe that 56% of all the respondents have complete information of
mutualfund. We have got 24% of our total respondents who do not have
complete information of mutualfund at all and 20% of our total
respondents have some information of mutualfund.

3). Are you an investor, who is interested in getting good deduction from
tax?

Interested in Tax Deduction

Information Number Of Respondents


Yes 89
No 11
Total 100

Table 7.3

Interested in Tax Deduction

Graph 7.3

We observe that 89% of all the respondents are interested in getting good
deduction from tax. We have got 11% of our total respondents who are not
interested in getting good deduction from tax at all.

4). Do you know mutual fund is a good instrument of tax saving?

Awareness for Tax saving

Table 7.4
Investment Number Of Respondents
Yes 76
No 24
Total 100

Awareness for Tax saving

Graph 7.4

We observe that 76% of all the respondents knows mutual fund is a good
instrument of tax saving. We have got 24% of our total respondents who
are mutual fund is a good instrument of tax saving.

5). Among which of the following income group do you fall?

Income Group

Table 7.5

Income group Number Of Respondents


> t1,00,000 25
1,00,001-2,00,000 65
2,00,001-3,00,000 10
3,00,001 & more NIL
TOTAL 100

Income Group

Graph 7.5
We observe that 25% of all the respondents fall under income group of
less than 1,00,000. We have got 65% of our total respondents fall under
income group of 1,00,001-2,00,000 and 10% of our respondents fall under
income group of 2,00,001-3,00,000 while 0% of our respondents fall under
income group of 3,00,000 & more

6). Which are the investments you hold at present?

Investment Holding

Investment Number Of Respondents


Equity market 20
Mutual fund 54
Govt, bond Nil
Real estate 9
Bank FD 48
Post office 26
Insurane 45

Table 7.6

Investment Holding

Graph 7.6

We observe that our respondent invest in more than one instrument of


saving.

7). What is the Basic purpose of your investments?


Purpose for Investment

Table 7.7

Investment purpose Number Of Respondents


High return 20
Tax benefit 18
Saving 45
Wealth creation 10
Risk diversification 7
Total 100

Purpose for Investment

Graph 7.7

We observe that 20% of all the respondents Invest for the purpose of high
return, 18% Invest for the purpose of tax benefit, 45% Invest for the
purpose of saving, 10% Invest for the purpose of wealth creation ,7%
Invest for the purpose of risk diversification.

8). What returns do you receive at present from all your investments?

Investment Returns Number Of Respondents


Less than 5% 3
5%-10% 65
10-15% 20
15%-20% 7
Greater than 20% 5
Total 100

Returns from Investment

Table 7.8

Returns from Investment

Graph 7.8

We observe that 3% of all the respondents get less than 5%, 65% of all
the respondents get between 5%-10%, 20% of all the respondents get
between 10%-15%, 7% of all the respondents get between 15%-20% and
5% of all the respondents get more than 20%.

9). Which types of funds would you like to prefer for your investment in
mutual fund ?

Fund Preference

Table 7.9

Investment preference Number Of Respondents


Equity fund 65
Debt fund 11
Balanced fund 24
Total 100
Fund Preference

Graph 7.9

We observe that 65% of all the respondents prefer investment in equity


fund, 11% of all the respondents prefer investment in Debt fund, and
remaining 24% of all the respondents prefer investment in Balanced fund.

10). Rank your preference for the following SIP tax plan of various
companies? (where 1 is most preferred & 6 is least preferred)

Tax plan of various companies

Table 7.10

Investment in various company tax plan Number Of Respondents Percentage


SBI magnum tax gain scheme 545 25.95%
Kotak tax saver 198 9.43%
ICICI prudential tax plan 498 23.71%
Fedility tax advantage fund 275 13.10%
Reliance tax saver fund 345 16.43%
HDFC tax saver 239 11.38%

Tax plan of various companies

Graph 7.10

We have given 6 points to 1st rank, 5 points to 2nd rank and so on, 1 point
to 6th rank and calculating total of each tax plan of various companies.
11). Rank your preference for how much period systematic investment
plan (SIP) do you prefer for your tax saving?(where 1is most preferred &
4 is least preferred)

Periodical Preference

Table 7.11

Investment time period Number Of Respondents


Three year 316
Five year 286
Six year 275
Seven year 123

Periodical Preference

Graph 7.11

We have given 4 points to 1st rank, 3 points to 2nd rank and so on, 1 point
to 4th rank and calculating total of each systematic investment plan period
that investor prefer.

12). Rank your preference for benefits offered among various AMC tax
plan of mutual fund?(where 1 is most preferred & 5 is least preferred)
Tax benefit Scheme

Table 7.12

Investment Benefits Number Of Respondents


Flexibility to investors. 256
Capital appreciation 323
Tax free return 387
Wealth maximization 389
Small amount of investment (SIP) 145

Tax benefit Scheme

Graph 7.12

We have given 5 points to 1st rank, 4 points to 2nd rank and so on, 1 point
to 5th rank and calculating total of each benefits investors are getting
benefits from various AMC.

Cross Tabulation
Age wise break up of “Service” Class respondents

Table 7.14
Service Class 20-30 30-40 40-50 50-60 > 65 Total
Equity Market 5 6 1 0 0 12
Mutual Fund 12 8 2 0 0 22
Govt. Bonds 1 2 1 0 0 4
Real Estate 0 1 0 0 0 1
Bank F.D. 3 1 0 0 0 4
Post office 0 1 0 0 0 1
Life Ins. 4 1 1 0 0 6
Total 25 20 5 0 0 50

Age wise break up of “Service” Class respondents

Graph 7.14

We observe in the age group of 20-30 years are more open to mutual fund
holding and equity market. The share of mutual fund shows a decreasing trend
as the age increases. It is observed that in the latter age groups, Life Insurance
policies and Government Securities and Bonds have an increasingly larger
share.

Overall, Mutual Fund, Stock Market, Bank FD and Life Insurance policies the
most preferred holdings amongst all age groups in the service category

Age wise break up of “Business” Class respondents

Table 7.15

Business Class 20-30 30-40 40-50 50-60 > 65 Total


Equity Market 1 3 0 1 0 5
Mutual Fund 0 6 0 0 0 6
Govt.Bonds 0 0 0 0 0 0
Real Estate 1 4 0 0 0 5
Bank F.D. 1 2 1 0 0 4
Post office 0 2 0 0 0 2
Life Ins. 0 0 0 0 0 0
Total 3 17 1 1 0 22

Age wise break up of “Business” Class respondents

Graph 7.15

We observe that maximum classification of investment is made in 30-40 age


group investors. Also they are holding a diversified portfolio which includes PPF,
Postal Schemes, Fixed Deposit, as well as Equity Schemes (Mutual fund, Stock
Market). Age group 20-30 holds investments in Equity Market, Bank FD, and
some also hold their Money in Real Estate. Business class people focuses more
on high return with moderate security of return so majority of their investment is
made in Mutual Investment. Also comparing the options the maximum is in
Mutual Fund then comes Equity Market and at the third Position there are three
types of holding with similar preference Post Office, Real Estate, Bank FD at
same Level..

Age wise break up of “Professional” Class respondents

Table 7.16

Professional 20-30 30-40 40-50 50-60 > 65 Total


Equity Market 0 2 2 0 0 4
Mutual Fund 3 4 0 0 0 7
Govt.Bonds 0 1 0 0 0 1
Real Estate 0 5 0 0 5
Bank F.D. 0 0 1 1 0 2
Post office 0 0 0 0 0 0
Life Ins. 0 1 0 0 0 1
Total 3 8 8 1 0 20

Age wise break up of “Professional” Class respondents

Graph 7.16
We observe that people in the age category of 30-40 and 40-50 years
have a certain preference for Equity holdings, Mutual Fund, Real Estate.
However these people are very conscious for the assured return and
security as well as future investment planning is well done.

Age wise break up of “Retired” Class respondents

Table 7.17

Retired 20-30 30-40 40-50 50-60 > 65 Total


Equity Market 0 0 0 0 0 0
Mutual Fund 0 0 0 0 0 0
Govt.Bonds 0 0 0 0 0 0
Real Estate 0 0 0 1 0 1
Bank F.D. 0 0 0 1 0 1
Post office 0 0 0 2 1 3
Life Ins. 0 0 0 0 3 3
Total 0 0 0 4 4 8

Age wise break up of “Retired” Class respondents

Graph 7.17

We observe in this category mostly consisting of retired people and


housewives the preference for mutual fund holding is low. The pattern can
be attributed to plans like MIP’s and investment by financially sound
people, investing due to financial support from children. However Bank
Fixed Deposits, Post Schemes, Life Insurance have the greatest
preference amongst people in this category.

Age wise break up of Investment

Table 7.18

20-30 30-40 40-50 50-60 > 65 Total


Yes 18 36 15 5 2 76
No 2 1 1 5 15 24
Total 20 37 16 10 17 100

Age wise break up of Investment

Table 7.18

We observe in this category it consist of all age group but investors


between the age of 20-30 and 30-40 years mostly prefer to invest in
Mutual Fund.
Income wise break up of Investment

Table 7.19

> 100,000 100001 − 20000 200001 - 300001 & Total


0 300000 More
Yes 19 42 7 0 68
No 6 23 3 0 32
Total 25 65 10 0 100

Income wise break up of Investment

Graph 7.19

We observe here income group of various investors among them investor


who have income of 100001-200000 highly prefer to invest in tax saving
plan of Mutual Fund.
Occupation wise break up for Investment in different funds

Table 7.20

Service Business Professional Retired Total


Class Class
Equity Fund 35 11 17 2 65
Debt Fund 1 7 1 2 11
Balanced 14 4 2 4 24
Fund
Total 50 22 20 8 100

Occupation wise break up for Investment in different funds

Table 7.20

We observe here occupation wise investment. Investors of service class,


business and professional like to invest in equity fund and balanced fund.

Results and Findings


We observe that 68% of all the respondents invest in
mutualfund. We have got 32% of our total respondents who do
not invest in any mutualfund at all.

We observe that 56% of all the respondents have complete


information of mutualfund. We have got 24% of our total
respondents who do not have complete information of
mutualfund at all and 20% of our total respondents have some
information of mutualfund.

We observe that 89% of all the respondents are interested in


getting good deduction from tax. We have got 11% of our total
respondents who are not interested in getting good deduction
from tax at all.

We observe that 76% of all the respondents knows mutual fund


is a good instrument of tax saving. We have got 24% of our
total respondents who are mutual fund is a good instrument of
tax saving.
We observe that our respondent invest in more than one
instrument of saving.

We observe that 20% of all the respondents Invest for the


purpose of high return, 18% Invest for the purpose of tax
benefit, 45% Invest for the purpose of saving, 10% Invest for
the purpose of wealth creation ,7% Invest for the purpose of
risk diversification.

We observe that 3% of all the respondents get less than 5%,


65% of all the respondents get between 5%-10%, 20% of all
the respondents get between 10%-15%, 7% of all the
respondents get between 15%-20% and 5% of all the
respondents get more than 20%.

We observe that 65% of all the respondents prefer investment


in equity fund, 11% of all the respondents prefer investment in
Debt fund, and remaining 24% of all the respondents prefer
investment in Balanced fund.

We have observed that most of the investors prefer to save in


ICICI tax plan.

CONCLUSION:
The Global market is fast growing in investment business.
Countries like US,

whole of Europe spread their investment in different


investment alternatives

with the help of advisory services to recommend investor.

I n Indian scenario the investments are spread over Bank


Deposits, Savings

Certificate, Post Office, Equity Markets and the latest Mutual


Fund. Since

Mutual Funds are subject to market risk the investor take help
of advisory
services for financial planning which helps the investor to take
calculated risk.

It was in 1995, the scenario got changed when depository act


was passed

and PAN card details and D mat account was made compulsory
for all

those investor who are investing a heavy amount. So as to


protect the

interest of the investors. From july 2 of 2007 it has been made


mandatory

to have PAN card details, this will enhance the faith of


investors in stock

market and many investor would come forward to invest in


mutual fund .

No doubt, watching the value of investments go down day after


day can be

pretty tough. However, the pain becomes more bearable if one


follows a

proper investment plan and invests for the long term. Having a
well diversified

portfolio as well as a plan to rebalance it from time to time also


helps a great

deal. No wonder, Mutual fund are considered to be the best


way to invest in

the stock market.

The mutual fund industry has gained a higher growth in the


recent years.
There are around 34 Asset Management Companies which are
currently

operating and the numbers of Mutual funds are around 630


funds, so it is

difficult to analyze each and every fund in order to known their


riskiness and

return. Some tools are used to find risk and return of the fund,
which helps an

investor to find out their risk.

The schemes taken for study proved to be a good investment


avenue for

all the investors as the risk associated with these schemes are
low and

they are yielding a very good return.

The volatility in the market might have affected the ratios but

definitely not the performance of the schemes. The schemes


have been

the one of the best schemes of SBI MF & ICICI PRUDENTIAL.

LIMITATIONS:

• I have done the performance evaluation only for three


years, from this
• data we cannot get the results accurately.
• I was given a time period of four months only, which may
not suffice
• the required tenure to study the MF industry.
• I have compared three funds of SBI & ICICI, which may
not represent
• the entire Mutual Fund industry.
• I have chosen only three mutual fund schemes, whereas
there are
• numerous mutual funds available.

BIBLIOGRAPHY:
www.sbimf.com

www.amfiindia.com

www.bseindia.com

www.nseindia.com

www.investopedia.com

www.researchonline.com

Reference books:
Security analysis & portfolio management

- Punithavathy Pandian

- Donald E. Fischer

- Ronald J. Jordan

Business Statistics

G.C. Beri

S P Gupta.