A SUMMER INTERNSHIP PROJECT ON

“Comparative Analysis of Public & Private Sector Mutual Funds”

UNDERTAKEN AT

Phillip Capital.

SUBMITTED TO

INDIRA INSTITUTE OF MANAGEMENT, PGDM

POST GRADUATION DIPLOMA IN MANAGEMENT

BY

Mrunal Santhosh Dandagavane

(PGDM BATCH 2020-2022)

UNDER THE GUIDANCE OF

Dr. Shirly Abraham

INDIRA INSTITUTE OF MANAGEMENT PGDM PUNE

 COLLAGE CERTIFICATE

This is to certify that the summer internship report titled “Comparative Analysis of Public
& Private Sector Mutual Funds” is a record of project done by “Mrunal Santhosh
Dandagavane” under my guidance and that it has not previously formed the basis for the
award of any degree, fellowship or associateship to her. While completing this assignment,
we found her sincere and hardworking. We wish her all success in his future endeavor.

Prof. Krushna P Mishra Dr. Shirly Abraham

Director In Charge SIP Mentor
Indira Institute of Management Indira Institute of Management
PGDM PGDM
COMPANY CERTIFICATION
 DECLARATION

I hereby declare that the Summer Internship Project (SIP) report on “Comparative Analysis of
Public & Private Sector Mutual Funds’ ’is an original piece of work done by me under the
guidance of Mr. Vaibhav Bhosle. All primary, secondary data and other relevant information
drawn from different sources for this report are duly acknowledged by me. This report is in partial
fulfilment of degree of Post Graduate Diploma in Management (Full time) 2020-22 from Indira
Institute of Management. I have put all my sincere efforts in making this report. No part of this
report has been submitted by me to any institution for the award of any diploma.

Place:

Date:
 ACKNOWLEDGEMENT

The project titled “COMPARATIVE STUDY ON NON- PERFORMING ASSETS OF

PRIVATE AND PUBLIC SECTOR BANKS’” ’which is part of the summer internship
program of the PGDM course has been successfully completed. I take this opportunity to
thank all the people involved directly or indirectly in making this project a success. Firstly I
would like to thank my external project guide Mr. RAJESH DHAKADE, Regional Head, ICICI
Bank Ltd, Pune region for giving me an opportunity to showcase my skills and talent. I would
also like to thank my internal project guide Dr. Shirly Abraham for her timely & valuable
guidance throughout the project. Their constant motivation accelerated my performance and
helped me produce great results. Thank you once again to one and all.

Miss.Mrunal Santosh Dandagavane

 TABLE OF CONTENTS

Sl.No. Topics Page No.

1. EXECUTIVE SUMMARY ⅰ
2. CHAPTER 1- INTRODUCTION AND RATIONAL STUDY 1
a) Introduction to the title 2
b) Significance of the study 3
3. CHAPTER 2 – INDUSTRY SECTOR PROFILE 5
a) Overview of the banking industry 6
b) HISTORY OF MUTUAL FUNDS: 7
Types of Mutual Funds Schemes in India 8
c) Major Player 11
d) Recent major Acquisition 12
e) Business mode
i. Porters Five Forces 13
ii. Pest Analysis 15
iii. BCG Matrix 18
f) Regulatory Framework 20
4. CHAPTER 3 – COMPANY PROFILE 22
INTRODUCTION OF SBI 23
INTRODUCTION OF HDFC 27
5. CHAPTER 4 – BUSINESS SEGMENTAL OVERVIEW & 31
PRODUCT LINE
a) MAJOR PRODUCT LINES 32
b) BUSINESS SEGMENT INCOME ASSET SIZE & 33
PROFITITABILITY
6. CHAPTER 5 – LITERATURE REVIEW 43
7. CHAPTER 6 – OBJECTIVES AND SCOPE OF PROJECT 46
8. CHAPTER 7- RESEARCH METHODOLOGY 48
9. CHAPTER 8 – ANALYSIS AND FINDING 50
i. Net Asset Value 51
ii. Sharp Index 43
iii. Beta 54
iv. Standard Deviation 54
10. CHAPTER 9 - CONCLUSION 57
11. CHAPTER 10 - KEY LEARNINGS 59
12. BIBLIOGRAPHY 61
 EXECUTIVE SUMMARY

A mutual fund is a scheme in which several people invest their money for a common
financial cause. The collected money invests in the capital market and the money,
which they earned, is divided based on the number of units, which they hold.

The mutual fund industry started in India in a small way with the UTI Act creating what
was effectively a small savings division within the RBI. Over a period of 25 years this
grew fairly successfully and gave investors a good return, and therefore in 1989, as the
next logical step, public sector banks and financial institutions were allowed to float
mutual funds and their success emboldened the government to allow the private sector
to foray into this area.

The advantages of mutual fund are professional management, diversification, and

economies of scale, simplicity, and liquidity.
The disadvantages of mutual fund are high costs, over-diversification, possible tax
consequences, and the inability of management to guarantee a superior return.

The biggest problems with mutual funds are their costs and fees it include Purchase fee,
Redemption fee, Exchange fee, Management fee, Account fee & Transaction Costs. There
are some loads which add to the cost of mutual fund. Load is a type of commission
depending on the type of funds.

Mutual funds are easy to buy and sell. You can either buy them directly from the fund
company or through a third party. Before investing in any funds one should consider
some factor like objective, risk, Fund Manager’s and scheme track record, Cost factor
etc.
There are many, many types of mutual funds. You can classify funds based Structure
(open- ended & close-ended), Nature (equity, debt, balanced), Investment objective
(growth, income, money market) etc.

A code of conduct and registration structure for mutual fund intermediaries, which were
subsequently mandated by SEBI. In addition, this year AMFI was involved in a number
of developments and enhancements to the regulatory framework.

The most important trend in the mutual fund industry is the aggressive expansion of the
foreign owned mutual fund companies and the decline of the companies floated by
nationalized banks and smaller private sector players.

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 CHAPTER 1
INTRODUCTION AND RATIONAL STUDY

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 a) Introduction to the title

Financial planning and investment is a crucial decision in today’s world, considering the
various economic, political and social conditions in the world around us. Various factors
like inflation, risk, income, purchasing power, age play a major role in investment
decisions of an individual, considering an expectation of steady income post retirement.
One of the most popular modes of investment is in the form of Mutual Fund, which is a
trust that pools the savings of a number of investors, who share a common financial goal.
Mutual fund industry in India is still in its nascent stages, there isn’t enough awareness
about it as compared to its counterparts like fixed deposits, PPF’s, NSC’s, insurance
policies, shares & bonds, etc. This research intends to understand and evaluate
investment performance of selected mutual funds in terms of risk and return, using the
various statistical tools and parameters. The research has been confined to the various
mutual fund schemes of SBI and HDFC and investment options and returns available to
Indian investors.

Mutual funds involve pooling of large sums of money of a large number of investors,
by a mutual fund company and investment of the same in diversified portfolios, so as to
gain maximum and safe returns from the investment made. A mutual fund is set up in
the form of a trust, which has sponsor, trustees, Asset Management Company (AMC)
and custodian. The trust is established by a sponsor or more than one sponsor who is
like the promoter of a company. The trustees of the mutual fund hold its property for the
benefit of the unit holders. Asset Management Company (AMC) approved by SEBI
manages the funds by making investments in various types of securities. Custodian,
who is registered with SEBI, holds the securities of various schemes of the fund in its
custody. The trustees are vested with the general power of superintendence and
direction over AMC. They monitor the performance and compliance of SEBI
Regulations by the mutual fund. SEBI Regulations require that at least two thirds of the
directors of trustee company or board of trustees must be independent i.e. they should
not be associated with the sponsors. Also, 50% of the directors of AMC must be
independent. All Mutual funds involve pooling of large sums of money of a large
number of investors, by a mutual fund company and investment of the same in
diversified portfolios, so as to gain maximum and safe returns from the investment
made. A mutual fund is set up in the form of a trust, which has sponsor, trustees, Asset
Management Company (AMC) and custodian. The trust is established by a sponsor or
more than one sponsor who is like the promoter of a company. The trustees of the
mutual fund hold its property for the benefit of the unit holders. Asset Management
Company (AMC) approved by SEBI manages the funds by making investments in
Various types of securities. Custodian, who is registered with SEBI, holds the securities
of various schemes of the fund in its custody. The trustees are vested with the general
power of superintendence and direction over AMC. They monitor the performance and
compliance of SEBI Regulations by the mutual fund. SEBI Regulations require that at
least two thirds of the directors of trustee company or board of trustees must be
independent i.e. they should not be associated with the sponsors. Also, 50% of the
directors of AMC must be independent.

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 All mutual funds are required to be registered with SEBI before they launch any
scheme. Mutual funds can be actively or passively managed. Mutual funds offer various
investment options like growth option, dividend pay-out option, dividend reinvestment
option, systematic investment plan (SIP), systematic withdrawal plan (SWP), equity
oriented fund, debt fund, index fund, etc.

Though mutual fund investment provides a wide range of benefits in terms of

professional management, diversified portfolio, tax savings, liquidity, certain risks too are
associated with the same. These include risk-return trade off, market risk, political risk,
inflation risk, credit risk, interest rate risk and liquidity risk. A careful and thorough
knowledge about this form of investment can provide maximum returns on investment to
the investors.

b) Significance of the study

To measure and compare the performance of selected mutual fund schemes of different
mutual fund companies and other Asset Management Companies. The study first tries to
understand the composition of the selected funds which determines the scope of
performance for the funds.
Adding to it the depreciating value of the currency has forced investors to look at a
diverse array of investment solutions which can help them grow their wealth. A
convenient way to increase potential returns and gain access to financial markets is
provided by mutual funds. Financial experts advise investors to have a mix of
conservative and non-conservative investment avenues while spreading their finances so
that they are able to tackle uncertainties that come with these investments.

Risk Reduction through Diversification:

The one important thing one should keep in mind regarding diversification is
that one is interested in risk as well as returns.
The one important thing one should keep in mind regarding diversification is that one is
one is interested in risk as well as returns.

Mutual funds provide diversification benefits in a manageable, compact way because each
unit represents a Pro rata share of the entire portfolio.

Unit Holders Account Administration and Services

A major service offered by the mutual funds is liquidity. Liquidity refers to the speed with
which an asset can be converted into cash without much loss of its economic value.
This- translates into holding lesser number of units in rising market and a greater number
of units in falling market.

3
 Regulatory Protection

Mutual funds are subject to strict regulation and oversight by SEBI. As part
of this regulation all mutual funds provide full and complete disclosures
about the funds in a written offer document.

4
 CHAPTER 2 – INDUSTRY / SECTOR PROFILE

5
 a) Overview of the banking industry

The investment fund industry is one of the emerging industries in India. Currently,
there are 40 players in the mutual fund company in India. The number of players in
public places has decreased from 11 to 5. The public place was gradually demoted to
legacy as it caught up with the big wave of the market in proportion to the players in the
private land. The Investment Trusts Association in India is a business entity that
promotes the growth of investment trust companies in India. It enforces an experienced
and vigorous position in identifying the steps that need to be taken to protect investors
and encourage the field of mutual funding.

It is worth noting that the AMFI is not a self-regulatory company (SOR) and that the
hints do not bind the members of the company. By its very nature, AMFI plays the role
of advisor or counselor within a mutual price point company. The recommendations
emerge as mandatory and most convenient if they are included in the regulatory
framework that the Securities and Exchange Commission (SEBI) of India has
prescribed for mutual budgeting.
Indian mutual fund companies follow a three-tier system as demonstrated below.
1. Sponsor
2. Trust
3. Asset management

Sponsor

Sponsors are those who are thinking of starting a mutual fund. Sponsors will conduct
SEBI routine procedures for market regulators and also0mutual fund. Not everyone can
start a joint fund. SEBI grants the right to open a joint fund for integrity. This is
because the financial quarters and the large spending on the sector and the simple
factors they should make are simple factors.

Trust

Once SEBI is satisfied with the proposed sponsor's credibility and eligibility, the
sponsor then agrees to the Indian Trust Act of 1882, and the trust cannot enter into a
contract because it has no criminal identity in India. Therefore, the trustee is a legal
individual to act on behalf of believing. The contract is in the name of the trustee. Once
the trust is created, it is registered with SEBI and is known as a general trust fund.

Asset Management

The trustee appoints AMC, which has been established as a corporation, to manage the cash of
the investor. In the case of mutual funds, AMC pays for the service instead of this money management. This price must
be an investor and is deducted from the money raised by them.

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 HISTORY OF MUTUAL FUNDS:

First Stage 1964-1987:

The India Trust Unit (UTI) was established in 1963 under the National Assembly. It was
founded by the Reserve Bank of India and is managed and controlled by the Reserve Bank of
India. In 1978, UTI was separated from RBI and the Indian Industrial Development Bank (IDBI)
replaced the administration's regulations, not the RBI. The first plan launched by UTI was the
1964 unit system, and as of the end of 1988, UTI manages 6,700 core assets.

Stage 2 1987-1993 (input from public sector funds):

Invested in non-UTI public investment funds established by General Banking and Life
Insurance (LIC) in India in 1987 and General Insurance Corporation (GIC) in India. The SEBI
Mutual Fund was the first non-UTI mutual fund established in June 1987. The SEBI Mutual
Fund is the first non-UTI mutual fund established in June 1987, with the Can bank cofound
(December 87), Punjab Punjab Bank (August 1989), India Cooperative Fund, 90 days). GIC
established a joint venture in December 1990 and LIC founded a joint venture in June 1989. By
the end of 1993, the mutual fund sector managed assets of Rs. 47005.

Stage 3 of 1993-2003 (Political Funding): With the launch of the private fund in 1993, a new era
has opened in the Indian investment fund industry, allowing investors in India to choose from a
broad range of funding products. In 1993, the first rule of mutual funds was established, and all
mutual funds were registered and managed. Kuthary Pioneer (now merged with Franklin
Templeton) is the first private investment fund registered in July 1993.

Stage 4-From Feb 2003 In February 2003, UTI was divided into two independent agencies with
the unit trust that cancelled Indian law in 1963. One of them, as of the end of January 2003, is
the unit assets of the Indian Rupee unit managed at 29,835 rupees, especially the US 64 plan,
guaranteed income and other specific planned assets. The management of the Indian government
unit trust and the specific business are under the framework of the Indian government. It is not
included in the scope of mutual fund rules.

Regulatory framework

Indian Securities and Exchange Commission (SEBI):

The Government of India is the main regulatory body of all groups. These groups raise capital in
the capital markets or invest in securities in capital markets such as stocks and listed bonds. The
proceedings of the Parliament were conducted by the Securities and Exchange Commission of
India in 1992. Investment funds have become important investors in stock market securities.
They are therefore under SEBI's jurisdiction. SEBI authorizes all investment funds, including
investment sites, to comply with investment restrictions and restrictions, how to record revenue
and expenses, how to disclose information to investors, and how to protect investors in general.
To protect investors' interests, SEBI develops policies and regulates investment funds. This rule
applies to investment funds promoted by public or private institutions, including investment
funds promoting foreign institutions. SEBI's Asset Management Corporation (AMC) manages
funds by investing in various programs from the funds it manages. According to SEBI
regulations, two-thirds of board members or members of a trustworthy independent company.

Investment Trust Association (AMFI) in India:

7
 With the growth of Indian investment trusts, India needs to establish mutual fund associations as
a non-profit organization. The Indian Investment Trust Association (AMFI) was established on
August 22, 1995. AMFI is the highest authority of all asset management companies (AMCs)
registered with SEBI. To date, all asset management companies have been members of the
mutual fund program. It operates under the supervision and guidance of the board of directors. 8
The Indian Mutual Funds Association is leading the mutual fund industry in India and is building
a professional and sound market with ethical standards that encourage and sustain standards. The
principles to protect and promote the interests of mutual funds and their owner

Types of Mutual Funds Schemes in India

A) BY STRUCTURE
B) Open-Ended - This scheme allows investors to buy or sell units at any point in time. This does not
have a fixed maturity date. Investors can conveniently buy & sell units at Net Asset Value related
Prices. The key feature of Open Ended scheme is liquidity.

8
.

Closed-Ended - A closed-end fund has a fixed number of shares outstanding and operates for a fixed
duration (generally ranging from 3 to 15 years). The fund would be open for subscription only
during a specified period and there is an even balance of buyers and sellers, so someone would have
to be selling in order for you to be able to buy it. Closed-end funds are also listed on the stock
exchange so it is traded just like other stocks on an exchange or over the counter. Usually the
redemption is also specified which means that they terminate on specified dates when the investors
can redeem their units.
Interval
Interval schemes combine the features of open-ended and close-ended funds. The units may be
traded on the stock exchange or may be open for sale or redemption during pre-determined intervals
at NAV-related prices. Fixed maturity plans, or, FMPs are examples of these types of schemes. 17

C) BY NATURE

Equity Fund - Equities are a popular mutual fund category amongst retail investors. They invest
the funds into Equity holdings. The structure of the fund may vary different for different schemes
and the fund manager’s outlook on different stocks. These funds are sub- classified depending on
Investment objective such as
a) Diversified Equity Funds
b) Mid-Cap Funds
c) Sector Specific Funds
d) Tax Savings Funds (ELSS)
Debt Funds - Debt funds are mutual funds that invest in fixed income securities like bonds and
treasury bills. Gilt fund, monthly income plans (MIPs), short term plans (STPs), liquid funds, and
fixed maturity plans (FMPs) are some of the investment options in debt funds. Apart from these
categories, debt funds include various funds investing in short term, medium term and long term
bonds.
Balanced Funds - This scheme allows investors to enjoy growth and income at regular intervals.
Funds are invested in both equities and fixed income securities; the proportion is pre-determined and
disclosed in the scheme related offer document. These are ideal for the cautiously aggressive
investors.

D) BY INVESTMENT OBJECTIVE
Growth Schemes - Growth Schemes are also known as equity schemes. The aim of these schemes
is to provide capital appreciation over medium to long term. These schemes normally invest a major
part of funds in Equities & look for capital appreciation.

Income Scheme - Income Scheme are also known as debt schemes. The aim of the scheme is to
provide regular and steady income to the investor. These Schemes invest in fixed income securities
such as bonds & corporate debentures. In such schemes capital appreciation may be limited.

Balance Scheme - This scheme allows investors to enjoy growth and income at regular intervals.
Funds are invested in both equities and fixed income securities; the proportion is pre-determined and
disclosed in the scheme related offer document. These are ideal for the cautiously aggressive
investors.

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 Money Market scheme - This is ideal for investors looking to utilize their surplus funds in short
term instruments while awaiting better options. These schemes invest in short-term instruments such
as treasury bills, certificate of Deposit, commercial paper & Intercompany call money and seek to
provide reasonable returns for the investors.

E) OTHER SCHEMES

Tax Saving Schemes – As the name suggests, this scheme offers tax benefits to its investors. The
funds are invested in equities thereby offering long-term growth opportunities. Tax saving mutual
funds (called Equity Linked Savings Schemes) has a 3-year lock-in period.

Index Schemes - - Index schemes is a widely popular concept in the west. These follow a passive
investment strategy where your investments replicate the movements of benchmark indices like
Nifty, Sensex, etc.

Sector Specific Schemes –Sectoral funds are invested in a specific sectors like infrastructure, IT,
pharmaceuticals, etc. or segments of the capital market like large caps, mid-caps, etc. This scheme
provides a relatively high risk-high return opportunity within the equity space.

b) Contribution of the sector towards GDP

Development of financial sector enhances the four pillars of the financial system: efficiency, stability,
transparency, and inclusion. Mutual fund investing plays an important role in this development.

They pool the resources from the small investors together, thus increasing participation in the financial
markets. Next, mutual funds provide services to small investors to make informed decisions. Such
detailed services and analysis help lighten the risk Factor for these small investors. Thus, it helps
investors to reinvest in mutual funds.

Mutual fund industry has been growing at a healthy speed of nearly 20% per annum over the last
decade.

India's equity AUM to GDP is at 5 per cent, compared to global average of 34 per cent. Assets of
equity-oriented schemes at the end of January stood at Rs 8.91 trillion. Developed economies like the
US and Canada have 75 per cent and 55 per cent as its equity AUM to GDP.

Banks help in Capital Formation, Promote Industrial Bloom and Generate Employment.
To set up any business or industry, a significant amount of capital is required, and the banks have a
considerable role to play here. After collecting deposits from the depositors, the banks use these
savings as investments and make use of it to provide loans and advances to the budding businesses
in dire need of funds. This way, the banking industry becomes a direct stakeholder of creating
employment in the country, which eventually contributes to GDP growth. For any country, being
self - sufficient in food production is a major goal. The commercial banks bridge any financial gaps
in the agricultural sector and promote farming by supporting farmers with loans and advances at
10
 lower interest rates compared to loans and advances meant for other businesses. Such propositions
take our economic system to the higher plains of growth. Contribution of the banking sector to
GDP is about 7.7% of GDP.

Banking sector intermediation as measured by total loan as a % of GDP is 30 %.

Banking sector Has Generated employment to the tune of 1.5 million Contribution of the banking
sector to GDP is about 7.7% of GDP. Banking sector intermediation as measured by total loan as a %
of GDP is 30%.

c) Major Player

Mutual Fund Name AMU QOQ Total no of

(Rs. Cr) Change (%) schemes
SBI Mutual Fund 52431.28 -3.61 135
ICICI Prudential Mutual Fund 429228.61 -3.04 134
Birla Sun Life Mutual Fund 418947.18 -0.54 84
Kotak India Mutual Fund 275904.05 -2.25 120
Nippon India Mutual Fund 242101.79 -5.25 69
Axis mutual Fund 208504.59 -4.91 135
UTI Mutual Fund 187210.24 -5.58 57
IDFC Mutual Fund 126267.83 -2.333 115

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d) Recent major Acquisition

1) Kotak Mahindra Bank acquires 46.7% stake in Kotak Mahindra Pension Fund.

2) Groww to acquire Indiabulls’ mutual funds business for Rs175 crore.

3) Tube Investments to raise Rs 350 cr from Azim Premji Trust, SBI MF via preferential allotment.

4) RBI rejects Muthoot Finance's proposal to buy IDBI Mutual Fund.

5) Blackstone is in talks to acquire the mutual fund business of L&T Asset Management Company.

6) Groww to buy Indiabulls Asset Management Company.

7) White Oak Investment Management buys Yes Bank’s mutual fund business.

8) Muthoot Finance acquires IDBI IDBI Asset Management.

9) Essel group divest an 8.7% stake in Zee Entertainment to Invesco Oppenheimer.

10) Nippon Life to buy additional stake in Reliance Nippon Life Asset Management.

11) Mahindra Asset Management Co and Manulife form a JV for asset management business.

12) Tata Mutual Fund in operational tie-up with Invesco.

13) Kotak Asset Management Company in operational tie-up with T Rowe Price.

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e) Business model

PORTERS FIVE FORCES

1) Rivalry in the Industry :-

We know that competition is good for the market. It keeps the businesses on their toes and offers competitive
prices to consumers. However, the intensity of the competition can affect the performance of every company
in a given sector.
According to Porter, the competition is the most intense when the following conditions are met:

There are numerous competitors and most of them have similar size and value.

The growth is slow causing a rush for a major share of the market.

The products or services offered by all companies in the sector are homogeneous. This makes it easier for a

consumer to switch from one provider to another increasing the chances of poaching.

In sectors where the product is perishable and/or the fixed price is very high, companies are tempted to cut

prices.

If a company wants to increase its output, it needs to do so in large increments for the expansion to be cost-

efficient.

The exit barriers are very high.

The competitors are a highly diverse lot with different goals and personalities.
While I can talk about each point in great detail, the crux of it is that in most market segments competitors
pose an internal threat to each other to maintain balance and prevent monopoly.
And, the points mentioned above can help you understand the extent of rivalry in the sector. Before buying a
stock, you must ensure that you understand the position of the company in its sector with respect to its
competitors.

2) The Threat of New Entrants in the Industry

Porter lays a lot of emphasis on the barriers to entry in any industry. In simpler terms, this means the
difficulties that a new company can face to gain entry. These barriers can include huge capital/infrastructure
requirements, need for a large distribution network, patents, etc.

13
Imagine a company launching a path-breaking product/service in a particular industry. If the barriers to entry
are low, then new firms can easily surpass them and replicate the business model turning competitors.
This will be seen in their share prices too as this ground-breaking product/service will fail to provide profits
for long.

3) The Threat of Substitutes

Substitute products/services are not from the same market segment. There are some products and/or services
where customers can easily switch to substitute products. Hence, when the demand for one increases, the
other experiences a drop.
This can impact the performance of the company and the investor perception not allowing the share price to
truly flourish. For example, if the price of coffee increases, then the coffee drinker might move to tea or
another beverage.
Hence, before buying the share of a company, look at the products and services offered and the substitutes
available in the market. Based on this observation, you will be able to assess how well the company is
positioned to manage any substitute product/service threatening its profits.
Also, companies that have fewer or no substitutes tend to price their products/services higher and have high
stock prices.

4) The Bargaining Power of Buyers

The bargaining power of buyers is the ability of buyers to drive prices down. According to Porter, buyers can
force sellers for better pricing under the following conditions:

The market is concentrated or purchases are made in large volumes.

The company offers products that are standardized or undifferentiated. For example, in the paper industry,

most manufacturers create standardized products. Hence, buyers can form a manufacturer to sell at market

prices.

Some companies purchase products from other companies and resell them at low margins. Hence, they can

push the prices lower.

You can assess the bargaining power of buyers by assessing the concentration of buyers, volume of
transactions, sensitivity of customers, etc. This can help you understand how the profits of the company that
you are looking to invest in can get impacted in the long-term.

5) The Bargaining Power of Suppliers

Many small and mid-sized companies face a threat from an industry where the suppliers hold bargaining
powers.
Imagine a restaurant that has a special dish that is making it famous but needs a specific ingredient available
only with a handful of suppliers. In such cases, the suppliers can raise the prices which will impact the final
price of the dish and impact the restaurant’s business.
However, large corporations usually are unaffected by this power since they have the resources to establish
wide supplier network and create the bargaining power of buyers instead.
14
 PEST ANALYSIS

1) Political Factors

Government Regulations and Deregulations – The government is adhering to all the rules and regulations
under World Trade Organization norms. There is consistency in both policy making and implementations of
those policies.

Threat of Terrorist Attacks – We believe in the world of post 9/11, corporations such as Mutual Fund have
to live with operating under the shadow of a terrorist attack. The prudent policy should be to take insurance
and other types of hedging instruments to mitigate the losses occurring because of the terrorist attacks.

Transition of Government and Changes in Policy – There is consistency in policy making from one
government to another. Secondly governments from all parties adhere to the treaties made by the previous
governments.

Likelihood of Entering into an Armed Conflict – From the information in the Note on the Mutual Fund
Industry in India case study, I don’t think there is a likelihood of country entering into an armed conflict
with a neighbouring country.

Unrest within the Country & Chances of Civil Unrest – We don’t think that Mutual Fund business
operations are facing any dangers from any kind of civil unrest or internal militant operations in the country.

International Trade & Other Treaties – The country has a good record of adhering to international treaties it
has done with various global partners. The government of each party has adhered to the treaties done by
previous governments, so there is a consistency in both rule of law and regulations.

Political Governance System – Based on the information provided in the Note on the Mutual Fund Industry
in India case study, it seems that the country have a stable political system. Mutual Fund can make
strategies based on the stable political environment.

Role of Non-Government Organization, Civil Society & Protest Groups – The country has a vibrant civil
society community and Mutual Fund should build bridges with them and seek out areas of co-operations.
Civil society groups are influential not only in policy making but also in building a society wide narrative.

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 2) Economic Factors

Demand Shifts from Goods Economy to Service Economy – The share of services in the
economy is constantly increasing compare to the share of manufacturing, goods, and agriculture
sector.

Level of Household Income and Savings Rate – Increasing consumption and stagnant household
income in the United States had led to credit binge consumption. It has decimated the culture of
savings as people don’t have enough to save. Mutual Fund needs to be careful about building
marketing strategy that is dependent on “Purchase on Credit” consumer behaviour.

Work Force Productivity – Work force productivity in US has grown by 25-30 % in last two decades
even though the salaries are not reflecting those gains. It can enable Mutual Fund to hire skilled
workforce at competitive salaries.

Price Fluctuations in both Local and International Markets – Compare to the level of quantitative
easing in last decade the prices of Mutual Fund products and prices of overall products have
remained sticky in the US market. Mutual Fund should consider the fact that at deficit levels of
United States in an emerging economy can lead to rampant inflation and serious risks of currency
depreciation.

Fiscal and Monetary Policies – The Republican government tax break culture has increased the
deficit and it can lead to fiscal trouble for the economy in coming years.

Financial Market Structure and Availability of Capital at Reasonable Rates – The quantitative
easing policy of Federal Reserve has led to liquidity flooding all across the global financial
markets. Mutual Fund can borrow cheaply under such circumstances. But this strategy entails risks
when interest rate will go up.

Inequality Index / Ranking on Gini Index – Gini Index and level of inequality are a great barometer
for harmony and development of a society. If there is huge income inequality in the society then the
likelihood of conflict and crime increases. It can lead to uncertainty and suppression of
consumption in both short term and long term.

3) Social Factors
Birth Rate – Birth rate is also a good indicator of future demand. USA has avoided the European
Union style stagnant economy on the back of slightly higher birth rate and higher level of
immigration.

Types of Immigration & Attitude towards Immigrants – Given the latest developments such as
Brexit and Immigrant detention on Southern border of United States. Attitude towards immigration
has come under sharp focus. Mutual Fund should have capabilities to navigate under this hyper
sensitive environment.

Attitude towards Savings – The culture of saving in US and China is totally different where savings rate
in China is around 30%, it is well below 15% in United States. This culture of consumption and savings
impact both type of consumption and the magnitude of consumption
Atitude towards Leisure – Mutual Fund should conduct an ethnographic research to understand
16
 both attitude towards leisure activities and choice of leisure activities. Experience economy is one
of the fastest- growing segments both among millennials and among baby boomers.

Attitude towards Health & Safety – The attitude towards health and safety is often reflected in the
quality of the products and cost structures of manufacturing processes. Mutual Fund has stringent
norms for health and safety norms so in emerging economies it may have to compete with players
who don’t have high-cost structures that of Mutual Fund.

Nature of Social Contract between Government & Society – Before entering into a market Mutual
Fund needs to understand the nature of the social contract between government and society. For
example, it has been extremely difficult for US companies to enter the UK health market as the UK
health system is a nationalized system and everything goes through contracts at the national level.

Immigration Policies and Level of Immigration – What are the immigration policies of the
country, what is the level of immigration, and in which sectors immigration is encouraged. This
will enable the Mutual Fund to determine – if required can it hire talent globally to work in that
particular market.

Gender Composition in Labor Market Mutual Fund can use gender composition of the labour market
to understand the level of liberal nature of the society, women rights, and women’s say in a matter of
societal issues and consumption decisions. The gender composition of the labour market is a good
indicator of the disposable income of the household, priorities of the households, and related needs.

4) Technological Factors

Transparency & Digital Drive – Mutual Fund can use digitalization of various processes to
overcome corruption in the local economy.

Empowerment of Supply Chain Partners – Mutual Fund should analyse areas where technology
can empower supply chain partners. This can help Mutual Fund to bring in more transparency
and make the supply chain more flexible.

E-Commerce & Related Infrastructure Development – As E-Commerce is critical for the

Mutual Fund business model. It should evaluate the e-commerce infrastructure, technology
infrastructure etc. before entering a new market.

Preparedness for 5G Related Infrastructure – Countries across the world are trying to prepare
themselves to install 5G infrastructure. Mutual Fund should assess to what level the local market is
prepared to roll out the 5G connectivity.

Acceptance of Mobile Payments and Fintech Services – One of the areas where the US are
lacking behind China is Mobile Payments. Mutual Fund should assess what is preferred choice of
mobile payments in the local economy and chose the business model based on it.

Intellectual Property Rights and Patents Protection – Before entering new market Mutual Fund should
focus on the environment for intellectual property rights.

17
 Technology transfer and licensing issues for Mutual Fund – laws and culture of licensing of IPR and
other digital assets should be analyzed carefully so that Mutual Fund can avoid shakedowns and IPR
thefts.

Likelihood of Technology Disruption – If the country is hub of technology companies then there is
a high chance of technology disruption among various industries. Mutual Fund has to assess
whether it can live with the fast pace of technology disruption in its industry.

BCG MATRIX

The BCG Matrix or the Growth-Share Matrix is a very popular portfolio planning model which was
developed by Bruce Henderson, founder of the Boston Consulting Group (BCG). It is a handy
business tool which evaluates the strategic position of the business brand/product portfolio and its
potential. It classifies business portfolio into four categories based on industry attractiveness
(Market Growth Rate) and competitive position (Relative Market Share.

Cash Cow are where a company has a high market share in a slow-growing industry. These units
typically generate cash in excess of the amount of cash needed to maintain the business. They are
regarded as staid and boring, in a “mature” market, yet corporations value owning them due to their

18
 cash-generating qualities.
They are to be “milked” continuously with as little investment as possible since such investment
would be wasted in an industry with low growth. Cash “milked” is used to fund stars and question
marks that are expected to become cash cows sometime in the future.

Dogs, more charitably called pets, are units with a low market share in a mature, slow-growing
industry. These units typically “break-even”, generating barely enough cash to maintain the
business’s market share. Though owning a break-even unit provides the social benefit of
providing jobs and possible synergies that assist other business units, from an accounting point of
view such a unit is worthless, not generating cash for the company. They depress a profitable
company’s return on assets ratio, used by many investors to judge how well a company is being
managed. Dogs, it is thought, should be sold off once short-time harvesting has been maximized

Question marks (also known as adopted children or Wild dogs) are businesses operating with a low
market share in a high-growth market. They are a starting point for most businesses. Question marks
have the potential to gain market share and become stars, and eventually, cash cows when market
growth slows. If question marks do not succeed in becoming a market leader, then after perhaps
years of cash consumption, they will degenerate into dogs when market growth declines. When the
shift from question mark to star is unlikely, the BCG matrix suggests divesting the question mark
and repositioning its resources more effectively in the remainder of the corporate portfolio. Question
marks must be analysed carefully to determine whether they are worth the investment required to
grow market share.

Stars are units with a high market share in a fast-growing industry. They are the “graduated” question
marks with a market- or niche-leading trajectory, for example: amongst market share front-runners
in a high- growth sector, and/or having a monopolistic or increasingly dominant unique selling
proposition with burgeoning/fortuitous proposition drive(s) from: novelty, fashion/promotion (e.g.
newly prestigious celebrity-branded fragrances), customer loyalty (e.g. greenfield or military/gang
enforcement backed, and/or innovative, grey-market/illicit retail of addictive drugs, for instance, the
British East India Company’s, late- 1700s opium-based Qianlong Emperor embargo-busting,
Canton System), goodwill (e.g. monopsonies) and/or gearing (e.g. oligopolies, for instance, Portland
cement producers near boomtowns), etc. The hope is that stars become the next cash cows.

19
 f) REGULATORY FRAMEWORK

Securities and Exchange Board of India (SEBI) is the apex regulator of Indian capital markets.
Issuance and trading of capital market instruments and regulation of capital market the
intermediaries is under the purview of SEBI. SEBI is the primary regulator of mutual funds in
India. SEBI has enacted the SEBI (Mutual Funds) Regulations, 1996, which provides the scope of
the regulation of mutual funds in India. It is mandatory that mutual funds should be registered with
SEBI. The structure and the formation of mutual funds, appointment of key functionaries and
investors, investment restrictions, compliance and penalties are all defined under SEBI
Regulations, Mutual funds have to send a seven-year compliance reports to SEBI. SEBI is also
empowered to periodically inspect mutual fund organizations to ensure compliance with SEBI
regulations. SEBI also regulates other fund constituents such as AMCs, Trustees, Custodians, etc.
Reserve Bank of India capital adequacy (RBI) is the monetary authority of the country and is also
the regulator of the banking system. Earlier bank-sponsored mutual funds were under the dual
regulatory control of RBI and SEBI. Money market mutual funds which invested in short-term
instruments were also regulated by the RBI. These provisions are no longer in vogue. SEBI is the
regulator of all mutual funds. The present position is that RBI is involved with the Indian mutual
fund industry, only to the limited extent of being the regulator of the sponsors of bank-sponsored
mutual funds. Specifically if the sponsor has made any financial commitment to the investors of the
mutual funds, in the form of guaranteeing assured returns, such guarantees can no longer be made
without the prior approval of the RBI. RBI will review the financial condition and capital adequacy
the sponsored bank, before permitting it to make such guarantee.
RBI is the issuer of government securities and also the regulator of money market. Mutual funds
invest in these securities and are affected by the RBI stipulations on the structure pricing and trading
of these instruments. For example, earlier RBI has decided that non-banks would be phased out of
the call money markets, over some time. This decision impacts mutual funds ability to invest in call
markets. The finance ministry is the supervisor of both the RBI and SEBI. The Ministry of Finance
is also the appellate authority under SEBI regulations. Aggrieved parties can also make appeals to
the MoF on the SEBI rulings relating to mutual funds.

The Asset Management Company (AMC) and the trustee company may be structured as limited
companies, which come under the regulatory purview of the Company Law Board (CLB). The
provisions of
the Companies Act 1956, apply to these company forms of organizations. The CLB is the apex
regulatory authority for companies. CLB is also the appellate authority for all issues relating to the
Companies Act. Any grievance against the AMC or the trustee company can be addressed to the
CLB for redressal. The Registrar of Companies (ROC) oversees the compliance by the AMC and
trustee company, with the provisions of the Companies Act. Periodic reports and annual accounts
have to be filed by these companies with the ROC. The Department of Company Affairs (DCA) is
responsible for the formulation and modification of the laws relating to companies, including the
Indian Companies Act. The DCA also has the power to prosecute directors for non-compliance
with provisions of the Act.

of

20
If a mutual fund has listed its scheme on stock exchanges, such listings are subject to the listing relation of
stock exchanges. Mutual funds have to sign the listing agreement and abide by its provisions, which primarily
deal with periodic notifications and disclosure of information that may impact the trading of listed units. Since
mutual funds are structured and registered as public trusts, under the Indian Trusts Act they also come under
the regulatory preview of the office of the public trustee, which in turn reports to the charity commissioner.
The board of trustees and the trustee companies have to comply with the provisions of the Indian Trusts Act.

21
 CHAPTER 3 -COMPANY PROFILE

22
 INTRODUCTION OF SBI MUTUAL FUND:

SBI Mutual Fund was incorporated in 1987 with its corporate head office located in Mumbai, India.
SBIFMPL is a joint venture between the State Bank of India, an Indian public sector bank, and
Amundi, a European asset management company. A shareholder agreement in this regard has been
entered on April 13, 2011, between SBI & AMUNDI Asset Management. Accordingly, SBI
currently holds a 63% stake in SBIFMPL and the 37% stake is held by AMUNDI Asset Management
through a wholly-owned subsidiary, Amundi India Holding. SBI & AMUNDI Asset Management
shall jointly develop the company as an asset management company of international repute by
adopting global best practices and maintaining international standards
The mutual fund industry in India originally began in 1963 with the Unit Trust of India (UTI) is
a Government of India and the Reserve Bank of India initiative. Launched in 1987, SBI Mutual
Fund became the first non-UTI mutual fund in India. In July 2004, State Bank of India decided to
divest 37 per cent of its holding in its mutual fund arm, SBI Funds Management Pvt Ltd, to Societe
General Asset Management, for an amount in excess of $35 million.
Post-divestment, the State Bank of India's stake in the mutual fund arm came down to 67%. In May
2011, Amundi picked up a 37% stake in SBI Funds Management, which was held by Societe
General Asset Management, as part of a global movement to merge its asset management business
with Credit Agricola. SBI Funds Management Private Limited (SBIFMPL) has been appointed as
the Asset Management Company of the SBI Mutual Fund. SBIFMPL is a joint venture between the
State Bank of India, an Indian public sector bank, and Amundi, a European asset management
company.
As of September 2019, the fund house claims to serve 5,809,315 unique investors through
approximately 212 branches PAN India.

Mission:

We will create products and services that help our customers achieve their goals. We will go
beyond the call of duty to make our customers feel valued We will offer excellence in services
to those abroad as
much as we do to those in India. We will imbibe state-of-the-art technology to drive excellence.

23
 Vision:

We will be prompt, polite and proactive with our

customers. We will speak the language of Young

India.

We will create products and services that help our customers achieve their

goals. We will go beyond the call of duty to make our customers feel

valued.

We will be of service even in the remotest part of our country.

We will offer excellence in services to those abroad as much as we do to those in India.

Registered Address:- Unit – SBI Mutual Fund, Rayala Towers,158, Anna Salai, Chennai – 600 002

Number of branches:-
1,505 branches that all fund houses put together have across India, 946 fall in B15 cities.

Shareholding Patterns

Holders Name % Share Holding

Promoters 56.92%

Foreign Institutions 10.22%

NBanks Mutual Funds 12.6%

Others 1.13%

24
 General Public 6.47%

Financial Institutions 11.3%

GDR 1.22%

Central Govt 0.15%

Total 100%

Major customers:-
Business-class people
(high class) High Net-
worth Individuals
Service class people
Government
Employees Young
Adults (19-30 yrs.)
Adults (35-50 yrs.)
HUF (Hindu Undivided Family) Women (literate and working)

Achievements of SBI Mutual Fund: -

Brand of the Year 2016-17. SBI Life wins the Brand of the Year 2016-17 Award in the Insurance
Category by WCRC. ...
CEO of the Year.
Mr . Fintelekt Insurance Awards 2017. ...
TISS Leapvault CLO Awards 2017. ...
CTO Leadership Award 2017.

25
 Organogram

26
 INTRODUCTION OF HDFC MUTUAL FUND:

HDFC Asset Management Company Ltd (AMC) was incorporated under the Companies Act, 1956,
on December 10, 1999, and was approved to act as an Asset Management Company for the HDFC
Mutual Fund by SEBI vide its letter dated July 3, 2000. The registered office of the AMC is situated
at Ramon House, 3rd Floor, H.T. Parekh Marg, 169, Back Bay Reclamation, Church gate, Mumbai -
400 020. In terms of the 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. Zurich Insurance Company (ZIC), the Sponsor of Zurich India Mutual Fund,
following a review of its overall strategy, had decided to divest its Asset Management business in
India. The AMC had agreed with ZIC to acquire the said business, subject to necessary regulatory
approvals. On obtaining the regulatory approvals, the following Schemes of Zurich India Mutual
Fund have migrated to HDFC Mutual Fund on June 19, 2003. The AMC is managing 28 open-ended
schemes of the Mutual Fund the AMC is also managing 7 closed-ended Schemes of the Mutual Fund
the AMC is also providing portfolio management / advisory services and such activities are not in
conflict with the activities of the Mutual Fund. The AMC has renewed its registration from SEBI
vide Registration No. - PM / INP000000506 dated December 21, 2009, to act as a Portfolio Manager
under the SEBI (Portfolio Managers) Regulations, 1993. The Certificate of Registration is valid from
January 1, 2010, to December 31, 2012.

Mission and Vision :

To be a dominant player in the Indian mutual fund space recognized for its high levels of ethical
and professional conduct and a commitment towards enhancing investor interests.

Our CSR initiatives will be aligned with the same principles to serve a social purpose, sustainable
development of the society and the environment in which it operates.

27
 Registered Address:

HDFC House”, 2nd Floor, H. T. Parekh Marg, 165-166, Backbay Reclamation, Churchgate, Mumbai – 400020.

A number of branches:

HDFC currently have over 70 thousand empanelled distributors which include mutual fund distributors,
national distributors and banks. HDFC serve our customers and distribution partners in over 200 cities
through our network of 227 branches and 1,241 employees.

Shareholding patterns:

Holders Name % Share Holding

Promoters 52.65%

Foreign Institutions 9.14%

NBanks Mutual Funds 1.31%

Others 1.08%

General Public 9.33%

Financial Institutions 5.26%

Foreign Promoter 21.23%

28
 Achievements:-

Asiamoney Asia Private Banking Awards 2021

Best for wealth transfer - succession planning in India

2021 Euromoney Awards for Excellence 2021

Best

Bank in India

Business Today 19th 'India's Coolest Workplace' Survey HDFC Bank Ranked Among 'India's
Coolest Workplaces'

Asiamoney Best Bank Awards 2021 India’s Best Bank for SMEs 2021: HDFC

Bank 25th Business Today – KPMG Best Bank Study

Finnoviti Awards 2021 for Warehouse Commodity Finance on Mobile

Finnoviti Awards 2021 Euromoney Private Banking and Wealth Management

Survey 2021 HDFC Bank ranks No. 1 in Mass Affluent category

ICAI Award for Excellence in Financial Reporting HDFC Bank wins Gold Shield Award for

2019-2020 2020.

Major customers: -

Business Class people (High Class)

Government Employees
Young Adults (19-30yrs)
Adults(35-50yrs)

29
 Achievements of SBI Mutual Fund: -
Asiamoney Asia Private Banking Awards 2021

Best for wealth transfer - succession planning in India 2021 Euromoney Awards for Excellence

2021 Best Bank in India Business Today 19th 'India's Coolest Workplace' Survey HDFC Bank

Ranked Among 'India's Coolest Workplaces'.

Asiamoney Best Bank Awards 2021 India’s Best Bank for SMEs 2021: HDFC Bank

25th Business Today – KPMG Best Bank Study

Best Large Bank - HDFC Bank Finnoviti Awards 2021 for Warehouse Commodity Finance on
Mobile Finnoviti Awards 2021
Euro money Private Banking and Wealth Management
Survey 2021 HDFC Bank ranks No. 1 in the Mass Affluent
category
ICAI Award for Excellence in Financial Reporting HDFC Bank wins Gold Shield Award for

2019-2020 2

30
 CHAPTER 4 – BUSINESS SEGMENTAL OVERVIEW & PRODUCT LINE

31
 1) MAJOR PRODUCT LINES

SBI:
State Bank of India Services
State Bank of India Services are most varied and innovative amongst all its contemporaries. State
Bank of India Services includes a host of products and services to suit all types of consumers.
Banking Subsidiaries- State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad
(SBH), State Bank of Indore (SBIR), State Bank of Mysore (SBM), State Bank of Patiala
(SBP), State Bank of Saurashtra (SBS) and State Bank of Travancore (SBT).
Foreign Subsidiaries - State bank of India International (Mauritius) Ltd., State Bank of India
(California), State Bank of India (Canada) and INMB Bank Ltd, Lagos.
Non- banking Subsidiaries - SBI Capital Markets Ltd (SBICAP), SBI Funds Management Pvt Ltd
(SBI FUNDS), SBI DFHI Ltd (SBI DFHI), SBI Factors and Commercial Services Pvt Ltd (SBI
FACTORS) and SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)
Joint ventures - SBI Life Insurance Company Ltd (SBI
LIFE). Products & Services

Products &
Services
Personal
Banking
NRI
Services
Agriculture
Internation
al
Corporate
SME
Domestic Treasury

SBI Retail Banking

The following services are provided under Retail

Banking:- Term Deposits

Recurring Deposits Housing Loan Educational

Loan Personal Loan
For Pensioners
Against Mortgage of Property Against Shares & Debentures Plus Scheme
Medi-Plus Scheme Rates of Interest

32
 HDFC: Bank Products and Services

HDFC Bank Business

Loan HDFC Car Loan

HDFC Credit

Card HDFC

Debit Card

HDFC

Education

Loan HDFC

Gold Loan

HDFC Home

Loan

HDFC Loan against

Property HDFC Personal

Loan

HDFC Bank Savings Account: Interest Rate, Types of Accounts, KYC.

2) Business segment
Income: - SBI Mutual Fund is a joint venture between two financial bigwigs - State Bank of
India (the largest bank in India) and AMUNDI (one of the leading global asset management
companies in France). Established in 1987, it has the distinction of being India's first non-UTI
Mutual Fund.
SBI Mutual Fund has completely lived up to its vision statement of being the most trusted and
respected asset Management Company in the country. In the last three decades, it has
demonstrated a robust and consistent track record. Its expert team is highly skilled at judicious
stock selection, insightful research and optimal risk management.
This Mutual Fund Company offers a host of investment solutions - equity schemes, debt schemes,
hybrid schemes, ETFs, Index Funds, etc. It also has solution-oriented offerings that help in the
realization of specific financial goals such as retirement planning, children education, etc.

33
 Its extensive reach throughout the country (through more than 222 acceptance centres), it caters
to 5.8 million investors and manages assets worth more than ₹3,73,000 crores.

Profitability:-
SBI mutual fund has a commendable 13.7% annual return in the last three years. In the
previous year, it delivered 63.53% returns.

Asset size:-
As of March 2019, the SBI Mutual Fund manages assets worth Rs 2.83 Lakh Crore. In early
2019, it moved past Aditya Birla and HDFC Mutual Funds to emerge as the 3rd largest Mutual
Fund body in India based on Assets under Management or AUM. The SBIMF is registered with
the Securities and Exchange Board of India or SEBI.

EQUITY FUNDS & SCHEME

The primary objective of the equity asset class is to provide capital growth/appreciation by Investing in
the equity & equity related instrument companies over the medium and long term. There is a range of
Schemes available which fulfil Every Kind of Investors Requirements. Each Scheme Provides a
different strategy that is reflective of the investor's profile and carries with it different risks and rewards.
1) Equity Schemes
2) Debt/Income Schemes
3) Liquid Scheme.
4) Hybrid Schemes.
5) Fixed Maturity Plans
6) Exchange Traded Scheme

We would be looking at only Equity Schemes. Below are the Equity

Schemes. Equity / Growth Funds
1) SBI Magnum Equity Fund
2) SBI Magnum Global Fund
3) SBI Bluechip Fund
4) SBI Magnum Multicap Fund
5) SBI Magnum Multiplier Fund
6) SBI Small and Midcap Fund
7) SBI Magnum Midcap Fund
8) SBO Emerging Businesses Fund
Sectoral Funds

34
 1) SBI Contra Fund
2) SBI FMCG Fund
3) SBI IT Fund
4) SBI Pharma Fund
5) SBI Banking & Financial Services Fund

Thematic Funds
1) SBI Magnum COMMA FUND
2) SBI Infrastructure Fund
3) SBI PSU FUND
4) SBI Tax Advantages Fund – series 3

1) SBI Small-cap fund

But we will be only comparing the Funds in SBI Small and Midcap Funds. SBI Small & Midcap
Fund is an open-ended equity scheme and primarily invests in Small and Midcap equity and Equity
related securities of the companies in the small and midcap segments.

The Portfolio will comprise a maximum of 30 stocks. This Product is suitable for the Investors who are
seeking.
Long term capital appreciation.
Investment in a diversified portfolio of predominantly in equity and equity-related securities
of small & midcap companies
Investors Should Consult their financial advisers if in doubt about whether the product is suitable for
them.

35
 Comparing Returns of SBI Mutual Fund for 5 years
Investment Objective: The Scheme seeks to generate income and long-term capital appreciation by
investing in a diversified portfolio of predominantly equity and equity-related securities of companies
identified as industry leaders. However, there can be no assurance that the investment objective of the
Scheme will be realized and the Scheme does not assure or guarantee any returns.

36
 As per the above chart, you can see SBI Mutual Fund is open-ended. Its average asset size is
Rs 5.04 lac crores. SBI introduced small and midcap growth funds in 2009. Since then it has given good
returns.

Portfolio Holding of the SBI Mutual Fund

37
38
 b) HDFC
Income:- HDFC Asset Management Company (HDFC AMC) is synonymous with quality
investment management, expertise and trust. Over the past two decades, they have shaped our
strengths in delivering simple and accessible investment products for the average Indian
household, which has led us to become the most preferred choice for individual investors. Their
offering of systematic transactions further enhances our appeal to customers, looking to invest
periodically in a disciplined and risk-mitigating manner. At the same time, their offerings well
meet the ever-advancing requirement of corporate clients. HDFC AMC is time- tested
relationships with our distributors and customers, and strong parentage provides us with a distinct
competitive edge. The consistent position as one of India’s leading asset management companies
is driven by our comprehensive investment philosophy, process and risk management. The mutual
fund schemes have weathered multiple market cycles and carry track records of over 20 years.

Asset size:-
HDFC AMC is one of India's largest mutual fund managers with ₹4.2 trillion in assets under
management. Started in 1999, set up as a joint venture between Housing Development Finance
Corporation Limited (“HDFC”) and Standard Life Investments Limited (“SLI”).

Profitability:-

HDFC AMC's market share stood at 12.9% as of 31 March 2021 against 13.1% as of 31
December 2020 and 13.7% as of 31 March 2020. The Operating Profit of the company for the
quarter ended March 31, 2021, was ₹3,80.2 crore,7% higher than the operating profit of ₹3,56.2
crore for the quarter ended March 31, 2020

Funds Managed by HDFC Mutual Fund.

Equity Fund
Balanced
Funds Income
Fund

Investment Objective
To provide long-term capital appreciation by investing predominantly in Small-Cap and MidCap companies

Current Expense Ratio

(Effective Date 24/08/2020)

Small Cap- 0.83%
Mid Cap- 1.85%

Plan NAV Date NAV Amount

Direct Dividend Plan 23/08/2021 67.522
Direct Growth Plan 23/08/2021 945.031
Dividend Plan 23/08/2021 27.083
Growth Plan 23/08/2021 168.67
39
 Product Labelling
The product is suitable for investors who are seeking:
Investment predominantly in equity and equity-related instruments of Small-Cap and Mid-Cap
companies Investors should consult their financial advisers if in doubt about whether the
product is suitable for them. Investors understand that their principal will be at moderately high
risk

Comparing Returns of HDFC Mutual Fund for Last 5 years Investment Info Investment Objective:
The investment objective of the scheme is to generate long-term capital growth from an actively managed
portfolio of equity and equity-related securities including equity derivatives.

As per the above chart, you can see HDFC Mutual Fund is open-ended. Its average asset size is
9556.30 crores. HDFC introduced small and midcap growth funds in 2008. Since then, it has
given good returns.

40
 Performance of the Different Mutual Funds

41
 Portfolio Holdings of the HDFC Mutual Fund

42
 CHAPTER 5 – LITERATURE REVIEW

43
 1) Assets under management with the mutual fund industry jumped a whopping 41 per
cent in fiscal 2021 to Rs 31.43 lakh crore, despite a minor 1 per cent decline in March,
says a report.
On the contrary, credit risk funds saw the highest net outflows of Rs 28,923 crore.
Last minute tax-saving investments also favoured equity funds, with equity linked savings scheme
recording net inflows of Rs 1,552 crore in the month, the second highest net inflows in the broad
segment. Equity funds also benefitted from continued inflows through systematic investment
plans, getting net flows of Rs 96,080 crore in fiscal 2021 compared to Rs 1 lakh crore of inflows
in the previous fiscal.
In fiscal 2021, arbitrage funds that cash in on market volatility saw the highest net inflows of Rs
26,908 crore, while aggressive hybrid schemes logged in highest net outflows of Rs 25,847 crore,
taking the asset base up by 31 per cent or by Rs 80,807 crore in the fiscal.

2) The pain is elsewhere As per various estimates of the broad indices

(Nifty50/BSE100/BSE200), the operating profit (EBITDA) growth in the recent quarter
(September-20) has been in the 15-20% range over previous year.
Having said that, the pain in the unorganised sector (while supported by government through
credit guarantee schemes) will at some stage have an impact on consumption and economic
growth, Covid has furthered the trend which started with demonetisation and then GST.
The views expressed are for information purposes only and do not construe to be any investment,
legal or taxation advice.
Please consult your Mutual Fund Distributor before investing.
Not to be used for solicitation of business in schemes of Tata Mutual Fund

3) Mutual funds At Prime Investor, we love mutual funds and consider them to be an ideal
investment vehicle for regular investors.
Mutual funds – a quick primer A mutual fund is an investment vehicle that pools money from a
multitude of people (investors like you and me).
A mutual fund invests in a basket of securities.
As the prices of these securities change (for stocks and some bonds) or as a fund earns the interest
on the bonds it holds, its value changes.
Capital gain is the profit on your investment when you sell your mutual fund units.

4) Mutual funds At Prime Investor, we love mutual funds and consider them to
be an ideal investment vehicle for regular investors.
Mutual funds – a quick primer A mutual fund is an investment vehicle that pools money from a
multitude of people (investors like you and me).A mutual fund invests in a basket of securities

44
 As the prices of these securities change (for stocks and some bonds) or as a fund earns the interest
on the bonds it holds, its value changes.
Capital gain is the profit on your investment when you sell your mutual fund units.

45
 CHAPTER 6 – OBJECTIVES AND SCOPE OF PROJECT

46
 OBJECTIVES

A mutual fund that has safety of capital as the investment objective tends to carry less risk and
usually a lower return. The type of mutual fund that generally has this type of investment objective
is a Money Market mutual fund.

Mutual funds that have a growth investment objective provide investors with a good hedge
against inflation and primarily invest in common stocks and sometimes preferred shares. They
are commonly known as Equity funds. A fund manager's investment style tends to differ from
equity fund to equity fund.

To study the types of the mutual fund.

To discuss the market trends of Mutual Fund investment.
Comparative Analysis of Public & Private Sector Mutual Funds

47
 CHAPTER 7- RESEARCH METHODOLOGY

48
 The whole study is based upon secondary data. Therefore, information has been collected from
interacting with different customers and from various Questionnaires, Internet and Personal call.
The Report is exclusively based on an online Survey.

METHOD USED IN COLLECTION OF DATA Online Survey: Online survey is conducted by

sending the survey Google form to friends, relatives and even emailing the survey to various
customers and potential investors and non –investor clients who have shown interest in investing
in such instrument.

ADVANTAGES AND DISADVANTAGES ADVANTAGES

a. It requires a shorter period to complete.
b. Researchers can procure many different types of information.
c. The amount of information procured on each aspect is larger.
d. The results can be projected to the relevant universe with greater accuracy.
e. The cost per completion is relatively very less compared to another survey.

DISADVANTAGES
a. Behavior bias can be one of the errors encountered in this type of survey.
b. People may not accurately fill in some data and can cause a minor error

Sample Size:- The Sample Size taken in the project work is 98. There are two types of data:
Primary data and Secondary data in this study we used secondary sources of data to analyze and
Public sector mutual funds and private sector mutual funds.

Plan of study: The data has been collected from years up to 2020, from the above mentioned
secondary sources. These have been analyzed to conduct a comparative study on the better
investment option available to the Indian investors among HDFC and SBI mutual fund schemes.
Wherever possible, facts and graphical diagrams have been used. Such data has then been
interpreted and recommendations have been developed.

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 CHAPTER 8 – ANALYSIS AND FINDING

50
 Net Asset Value (NAV)

The Net Asset Value (NAV) of a mutual fund is the price at which the units of a mutual fund are
bought and sold. It is the market value of the fund after deducting its liabilities. The value of all
units of a mutual fund portfolio are calculated on a daily basis, from this all expenses are then
subtracted. The result is then divided by the total number of units the resultant value is the NAV.
NAV is also sometimes referred to as Net Book Value or book Value.

NAV indicates the market value of the units in a fund. So, it helps an investor keep track of the performance about
the mutual fund. An investor can calculate the actual increase in the value of their investment by determining the
percentage increase in the mutual fund NAV. NAV, therefore, gives accurate information about the performance
about the mutual fund.
The Monthly NAV & Returns of above three Mutual Fund Schemes as Follows:-

1. HDFC Balanced Fund

Month Net Assets Value Monthly Return

Apr-20 123.90 - 183.76 48.3132
May-20 183.76 - 195.43 6.3507
Jun-20 195.43 - 194.66 -0.394
Jul-20 194.66 - 216.34 11.1374
Aug-20 216.34 - 216.34 0
Sep-20 216.34 - 231.95 7.2155
Oct-20 231.95 - 223.08 -3.8241
Nov-20 223.08 - 239.77 7.4816
Dec-20 239.77 - 252.08 5.1341
Jan-21 252.08 - 241.77 -4.09
Feb-21 241.77 - 237.14 -1.915
Mar-21 237.14 - 252.91 6.6501

AVERAGE RETURN 6.84%

Calculation of Sharpe Index:

51
Sharpe Index = Portfolio average return - Risk free rate of return
Standard Deviation

St Rp Rf
o p

6 .84 % 3 .55 %
tS
13 .39
St 0 .235
2. SBI SMALL CAP FUND

Month Net Assets Value Monthly Return

Apr-20 123.90 - 183.76 21.3184
May-20 183.76 - 195.43 23.2370
Jun-20 195.43 - 194.66 -0.35647
Jul-20 194.66 - 216.34 11.2840
Aug-20 216.34 - 216.34 0
Sep-20 216.34 - 231.95 6.5559
Oct-20 231.95 - 223.08 -6.3167
Nov-20 223.08 - 239.77 7.14804
Dec-20 239.77 - 252.08 5.1471
Jan-21 252.08 - 241.77 -5.5944
Feb-21 241.77 - 237.14 -0..4938
Mar-21 237.14 - 252.91 6.2862

AVERAGE RETURN 5.68%

Calculation of Sharpe Index:

52
Sharpe Index = Portfolio average return - Risk free rate of return
Standard Deviation

St Rp Rf
o p

5 .4199 % 3 .55 %
St
9 .60
St 0 .1947

Interpretation of the Funds Performance

Particular Average Return Sharpe Index Rank

Ratio
1. HDFC Balanced Fund 6.8383 % 0.235 I
2. SBI SMALL CAP FUND 5.4199 % 0.1947 II

Series 1
8

0
HDFC BALANCED FUND SBI SMALL CAP FUND

Series 1

53
Beta
It measures the risk of the stock market or the fund. If the ratio of beta 1 is exceeded, the stock market
change of the fund is more sensitive than the general fund. The trial may also be negative. In other words,
the value of the fund on the other side of the public market. The trial measures the sensitivity of the fund's
returns to normal market movements. It also measures the volatility of the fund against the overall market
volatility. Market Beta is set to 1.00 or higher is less stable than the market, and the trial version is less
than 1.00 and less volatile. 38 The trial measures the volatility of the fund's value against the volatility of
the fund's base value. The beta factor represents a change in the fund's value when the value of the index
changes by 1 percentage point.

Standard deviation
Measure the tendency of data to propagate. In this way, accountants can make important conclusions from
historical data. The standard deviation is defined as S and sigma reads as follows:

54
 HDFC Balanced Fund SBI Small- CAP FUND

Standard deviation 4.739901546 10.025633

Sharpe 4.739901546 1.399412772

Beta 0.716100474 1.8042146

Alpha 4.498886037 3.240796592

Chart Title
12

10

0
Standard Deviation sharpe Beta Alpha

HDFC SBI SMALL

Analysis and Interpretation:

Since standard deviation is an indicator of the change in average return on earnings, it is

considered a direct measure of risk. SBI SMALL FUND Fund has a high standard deviation.
It shows that the fund itself is more aggressive than HDFC Balanced funds.
Sharp proportions, means that the fund can generate a return per unit of risk. Therefore, the
higher the ratio, the better. Therefore, according to this standard, HDFC BF will be the
winner.

55
 Beta, which shows the link between fund returns and market rates, is again a measure of volatility
or risk. Because SBI SMALL CAP funds have the highest beta, it is one, ie greater than 1.8, they
tend to be inherently aggressive or unstable.

Alpha - Measuring excess returns above-market returns Alpha is a measure of risk. For example, a
high alpha value is a good signal for money. If the funds alpha value is increased by 10, it means
that the fund's return rate exceeds 10% compared to the benchmark or market. Therefore, HDFC
BF is the winner in this field, I am 1.50%.

56
 CHAPTER 9 – CONCLUSION

57
 The findings show that mutual funds as an investment option have displayed tremendous growth
potential when the markets are optimistic and when wise choices are made. They have performed
much better than traditional investment options in the long term and thus help investors beat
inflation to some extent. It is of paramount importance that investors do not make a rash decision
simply by looking at the return figures generated by an individual fund, they should compare
funds based on the risk and return analysis and find out which fund is giving better returns
commensurate to the risk taken.

Statistical analysis helps investors make a wise decision by looking at facts based on numbers
instead of just going by their gut feeling. Also compared to the traditional options, mutual funds
provide a more professional approach towards investment and some amount of diversification.
The mutual fund industry in India has been normal for the past few years, which means that there
is still a huge untapped market and potential for good returns. A thorough analysis clubbed with
timely investments might prove Mutual Funds to be an excellent form of investment.

As per the above comparative Data, we can say that HDFC has positive figures as compared to
SBI MF. So we can conclude that investment in the Private sector is more preferable than
public sector MF.

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 CHAPTER 10- KEY LEARNINGS

59
 1. Professional communications:

One of the most valuable skills that I have gained from my internships is the ability to speak with
people in a professional setting. Discussions with bosses or coworkers are different from
discussions with professors or fellow students, and an internship is the perfect place to observe
how people in a professional setting interact. It's also a great opportunity to practice that
communication style yourself. This will help you a lot when you start interviewing for jobs,
because you will be more confident and will sound more mature and experienced in a business
setting.

2. Networking:

As an intern, I learned how important networking is for my future career. Connecting with people
in my desired career path through my internships has led me to solidify my desire to work in
editing, and I now have mentors to turn to when I have questions regarding the field and my work.
I am also now more confident when it comes to talking to potential coworkers and employers in
my field, because I gained experience in that while an intern.

3. Taking criticism:

It can be difficult to be told that you need to improve upon something or that you completed a task
incorrectly. As an intern, I learned how to handle criticism with grace (both from watching
coworkers receive criticism and from receiving criticism myself), which also built my confidence
in a professional setting. Since I already had a trial run in the workplace as an intern, I know now
that I can handle criticism maturely, and I know how to respond to it professionally and
respectfully, which will definitely help me in my career.

4. Leadership, confidence, and responsibility:

While I was an intern, I was responsible for various areas of the business for which I worked. I had guidance and
mentors, but I did have to make decisions on my own. Through these experiences, I developed a sense of leadership
(especially with regards to speaking for and defending my ideas and decisions, not to mention actually making
decisions!), confidence (along with taking ownership of my decisions and their outcomes), and responsibility (my
decisions would impact the business). These traits are invaluable when it comes to a career, and an internship is the
perfect place to learn and perfect them.

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 References/Bibliography

61
 1) Home - Mutualfundindia.com

2) Best Mutual Funds 2021: Top Mutual Fund Investment, Invest Online in Mutual Funds (etmoney.com)

3) HDFC Mutual Fund - Mutual Funds India - SIP Investment - Mutual Fund Investment (hdfcfund.com)

4) HDFC Mutual Fund - Mutual Funds India - SIP Investment - Mutual Fund Investment (hdfcfund.com)

5) Mutual Fund India - SBI Mutual Fund, Mutual Fund Investment Company (sbimf.com)

6) Mutual Funds India: Mutual Fund Investment, Mutual Fund Calculator, Types of Mutual Funds,
Top/Best
Performing Mutual Funds in India - Money control

7) http://www.moneyplantservices.com/

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