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Market Survey Report On GROWTH OF MUTUAL FUND Submitted To



SESSION: - 2012 2013 Project Guide: Miss. Ankita Agrawal Submitted by: Ankit Shrotriya B.B.A. VI Sem.

It gives me immense pleasure to place before my examiners my project report Market Survey Report on Growth of SBI Mutual Fund. My sincere acknowledgement and overriding debt is to my project guide Miss. Ankita Agrawal, who provided me with the time and inspiration needed to detail out this project. She as ever be thank for her continuous and untiring support. Finally, I request to the faculty members of the indulgence to communicate the deficiencies in the effort. I shall be grateful obliged to my examiners for comments and their valuable suggestions for further improvements.

ANKIT SHROTRIYA B.B.A. VI Sem. Roll No.: 11627503



A mutual fund is a professionally-managed form of collective investments that pools money from many investors and invests it in stocks, bonds, short-term

money market instruments, and/or other securities. In a mutual fund, the fund manager, who is also known as the portfolio manager, trades the fund's underlying securities, realizing capital gains or losses, and collects the dividend or interest income. The investment proceeds are then passed along to the individual investors. The value of a share of the mutual fund, known as the net asset value per share (NAV) is calculated daily based on the total value of the fund divided by the number of shares currently issued and outstanding. Mutual fund is a trust that pools the savings of a number of investors who share a common financial goal. This pool of money is invested in accordance with a stated objective. The joint ownership of the fund is thus Mutual, i.e. the fund belongs to all investors. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. A Mutual Fund is an investment tool that allows small investors access to a welldiversified portfolio of equities, bonds and other securities. Each shareholder participates in the gain or loss of the fund. Units are issued and can be redeemed as needed. The funds Net Asset value (NAV) is determined each day. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are known as unit holders. When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund). Mutual Fund investor is also known as a mutual fund shareholder or a unit holder.Any change in the value of the investments made into capital market instruments (such as shares, debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is defined as the

market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors.


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

past decade, Indian Mutual Fund industry had seen dramatic improvements, both quality wise as well as quantity wise. Before, the Monopoly of the Market had seen an ending phase; the Assets Under Management (AUM) was Rs. 67bn. The private sector entry to the fund family raised the AUM to Rs. 470 bn in March 1993 and till April 2004; it reached the height of 1,540 bn. Putting the AUM of the Indian Mutual Funds Industry into comparison, the total of it is less than the deposits of SBI alone, constitute less than 11% of the total deposits held by the Indian banking industry. The main reason of its poor growth is that the Mutual Fund industry in India is new in the country. Large sections of Indian investors are yet to be intellectuated with the concept. Hence, it is the prime responsibility of all mutual fund companies, to market the product correctly abreast of selling. The Mutual Fund industry can be broadly put into four phases according to the development of the sector. Each phase is briefly described as under.

First Phase - 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6, 700 crores of assets under management.

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

Entry of non-UTI mutual funds. SBI Mutual Fund was the first followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC in 1989 and GIC in 1990. The end of 1993 marked Rs.47, 004 as assets under management.

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

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44, 541 crores of assets under management was way ahead of other mutual funds.

Fourth Phase - since February 2003

This phase brought bitter experience for UTI. It was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with AUM of Rs.29, 835 crores (as on January 2003). The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of AUM and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 scheme


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

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 then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciations realized 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 man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.


Mutual funds can be classified as follow :

Based on their structure:

Open-ended funds: Investors can buy and sell the units from the fund, at any point of time. Close-ended funds: These funds raise money from investors only once. Therefore, after the offer period, fresh investments can not be made into the fund. If the fund is listed on a stocks exchange the units can be traded like stocks (E.g., Morgan Stanley Growth Fund). Recently, most of the New Fund Offers of close-ended funds provided liquidity window on a periodic basis such as monthly or weekly. Redemption of units can be made during specified intervals. Therefore, such funds have relatively low liquidity.

Based on their investment objective: Equity funds: These funds invest in equities and equity related instruments. With fluctuating share prices, such funds show volatile performance, even losses. However, short term fluctuations in the market, generally smoothens out in the long term, thereby offering higher returns at relatively lower volatility. At the same time, such funds can yield great capital appreciation as, historically, equities have outperformed all asset classes in the long term. Hence, investment in equity funds should be considered for a period of at least 3-5 years. It can be further classified as: i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is tracked. Their portfolio mirrors the benchmark index both in terms of composition and individual stock weightages. ii) Equity diversified funds- 100% of the capital is invested in equities spreading across different sectors and stocks. iii|) Dividend yield funds- it is similar to the equity diversified funds except that they invest in companies offering high dividend yields. iv) Thematic funds- Invest 100% of the assets in sectors which are related through some theme. e.g. -An infrastructure fund invests in power, construction, cements sectors etc. v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking sector fund will invest in banking stocks. vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors. Balanced fund: Their investment portfolio includes both debt and equity. As a result, on the risk-return ladder, they fall between equity and debt funds. Balanced funds are the ideal mutual funds vehicle for investors who prefer spreading their risk across various instruments. Following are balanced funds classes: i) Debt-oriented funds -Investment below 65% in equities.

ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt. Debt fund: They invest only in debt instruments, and are a good option for investors averse to idea of taking risk associated with equities. Therefore, they invest exclusively in fixed-income instruments like bonds, debentures, Government of India securities; and money market instruments such as certificates of deposit (CD), commercial paper (CP) and call money. Put your money into any of these debt funds depending on your investment horizon and needs. i) Liquid funds- These funds invest 100% in money market instruments, a large portion being invested in call money market. ii) Gilt funds ST- They invest 100% of their portfolio in government securities of and T-bills. iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt instruments which have variable coupon rate. iv) Arbitrage fund- They generate income through arbitrage opportunities due to mis-pricing between cash market and derivatives market. Funds are allocated to equities, derivatives and money markets. Higher proportion (around 75%) is put in money markets, in the absence of arbitrage opportunities. v) Gilt funds LT- They invest 100% of their portfolio in long-term government securities vi) Income funds LT- Typically, such funds invest a major portion of the portfolio in long-term debt papers. vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an exposure of 10%-30% to equities. viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in line with that of the fund.

INVESTMENT STRATEGIES 1. Systematic Investment Plan: under this a fixed sum is invested each month on a fixed date of a month. Payment is made through post dated cheques or direct debit facilities. The investor gets fewer units when the NAV is high and more units when the NAV is low. This is called as the benefit of Rupee Cost Averaging (RCA) 2. Systematic Transfer Plan: under this an investor invest in debt oriented fund and give instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of the same mutual fund. 3. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund then he can withdraw a fixed amount each month.


The Indian Mutual Fund has passed through three phases. The first phase was between 1964 and 1987 and the only player was the Unit Trust of India, which had a total asset of Rs. 6,700 crores at the end of 1988. The second phase is between 1987 and 1993 during which period 8 Funds were established (6 by banks and one each by LIC and GIC). The total assets under management had grown to 61,028 crores at the end of 1994 and the number of schemes was 167. The third phase began with the entry of private and foreign sectors in the Mutual Fund industry in 1993. Kothari Pioneer Mutual Fund was the first Fund to be established by the private sector in association with a foreign Fund. As at the end of financial year 2000(31st march) 32 Funds were functioning with Rs. 1, 13,005 crores as total assets under management. As on august end 2000, there were 33 Funds with 391 schemes and assets under management with Rs 1, 02,849 crores. The securities and Exchange Board of India (SEBI) came out with comprehensive regulation in 1993 which defined the structure of Mutual Fund and Asset Management Companies for the first time. Several private sectors Mutual Funds were launched in 1993 and 1994. The share of the private players has risen rapidly since then. Currently there are 34 Mutual Fund organizations in India managing 1,02,000 crores.


SBI Mutual Fund

SBI Mutual Fund (SBI MF) is one of the largest mutual funds in the country with an investor base of over 4.6 million. With over 20 years of rich experience in fund management, SBI MF brings forward its expertise in consistently delivering value to its investors. Proven Skills in wealth generation: SBI Mutual Fund is Indias largest bank sponsored mutual fund and has an enviable track record in judicious investments and consistent wealth creation. The fund traces its lineage to SBI - Indias largest banking enterprise. The institution has grown immensely since its inception and today it is India's largest bank, patronized by over 80% of the top corporate houses of the country. SBI Mutual Fund is a joint venture between the State Bank of India and Society General Asset Management, one of the worlds leading fund management companies that manages over US$ 500 Billion worldwide.

History of SBIMF

SBI mutual fund was setup on June 29th, 1987 and incorporated on February 7th, 1992. It is a result of joint venture between State Bank of India and Societe Generale Asset Management of France. This is a bank sponsored mutual fund and has a base of 3.5 million investors (approx). Over the years it has carved a niche for itself through prudent investment decisions and consistent wealth creation for its customers. They offer Mutual Fund products in Equity Funds, Index Funds, Balanced Funds, Debt Funds, etc. The assets under management are Rs 33,727.90 crores as of June, 30, 2010. InvestmentYogi analyses the best performing SBI mutual fund in the Balanced Fund, Equity Fund and Equity Linked Savings Scheme (ELSS) categories.

SBI Mutual Fund operates under State Bank of India and Socit Gnrale Asset Management of France and has asset management experience of more than 25 years. SBI Mutual Fund offers different kinds of products like growth based products, income based products and balanced funds. The SBI Mutual Fund operates under State Bank of India and Socit Gnrale Asset Management of France. With over twenty years of experience in asset management, the company has grown immensely since its establishment. SBI Mutual Funds offer innovative mutual fund products to its wide pool of customers and its products are available across India. It has a wide portfolio of products that meet the requirements of different types of investors. The SBI Mutual Fund is headed by Mr Syed Shahabuddin, Managing Director of the company. Contact details of SBI Mutual Fund are as follows: Corporate Office : 191, Maker Tower 'E', Cuffe Parade, Mumbai - 400 005. Email : SBI Mutual Funds Investor's Service Center are located at Ahmedabad, Bangalore, Bhillai, Bhubaneshwar, Bhopal, Chandigarh, Chennai, Coimbatore, Cochin, Goa, Guwahati, Hyderabad, Indore, Jaipur, Kanpur, Kolkata, Lucknow, Ludhiana, Mumbai, New Delhih, Patna, Pune, Ranchi, Siliguri, Vadodara, and Vijaywada.


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


The investments of these schemes will predominantly be in the stock markets and endeavor will be to provide investors the opportunity to benefit from the higher returns which stock markets can provide. However they are also exposed to the volatility and attendant risks of stock markets and hence should be chosen only by such investors who have high risk taking capacities and are willing to think long term. Equity Funds include diversified Equity Funds, Sectoral Funds and Index Funds. Diversified Equity Funds invest in various stocks across different sectors while Sectoral funds which are specialized Equity Funds restrict their investments only to shares of a particular sector and hence, are riskier than Diversified Equity Funds. Index Funds invest passively only in the stocks of a particular index and the performance of such funds move with the movements of the index. Magnum COMMA Fund Magnum Equity Fund Magnum Global Fund Magnum Index Fund Magnum MidCap Fund Magnum Multicap Fund Magnum Multiplier Plus 1993 Magnum Sector Funds Umbrella MSFU - FMCG Fund MSFU - Emerging Businesses Fund MSFU - IT Fund MSFU - Pharma Fund MSFU - Contra Fund

SBI Arbitrage Opportunities Fund SBI Blue chip Fund SBI Infrastructure Fund - Series I SBI Magnum Taxgain Scheme 1993 SBI ONE India Fund SBI TAX ADVANTAGE FUND - SERIES I

Debt Funds invest only in debt instruments such as Corporate Bonds, Government Securities and Money Market instruments either completely avoiding any investments in the stock markets as in Income Funds or Gilt Funds or having a small exposure to equities as in Monthly Income Plans or Children's Plan. Hence they are safer than equity funds. At the same time the expected returns from debt funds would be lower. Such investments are advisable for the risk-averse investor and as a part of the investment portfolio for other investors. Magnum Childrens Benefit Plan Magnum Gilt Fund Magnum Gilt Fund (Long Term) Magnum Gilt Fund (Short Term) Magnum Income Fund Magnum Income Plus Fund Magnum Income plus Fund (Saving Plan) Magnum Income plus Fund (Investment Plan) Magnum Insta Cash Fund Magnum InstaCash Fund -Liquid Floater Plan Magnum Institutional Income Fund Magnum Monthly Income Plan Magnum Monthly Income Plan Floater

Magnum NRI Investment Fund SBI Capital Protection Oriented Fund - Series I SBI Debt Fund Series SDFS 15 Months Fund SDFS 90 Days Fund SDFS 13 Months Fund SDFS 18 Months Fund SDFS 24 Months Fund SDFS 30 DAYS SDFS 30 DAYS SDFS 60 Days Fund SDFS 180 Days Fund SDFS 30 DAYS SBI Premier Liquid Fund SBI Short Horizon Fund SBI Short Horizon Fund - Liquid Plus Fund SBI Short Horizon Fund - Short Term Fund

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


Wide varieties of Mutual Fund Schemes exist to cater to the needs such as financial position, risk tolerance and return expectations etc. Since the needs and aspirations of different individuals vary from person to person, there are absolutely different kinds of mutual funds for investment. There could be various categories of mutual funds in India. The governing body for these funds being the Securities Exchange Board of India (SEBI). All varieties of mutual funds are governed by it in an all-pervasive manner. Schemes can be differentiated by two broad parameters: (a) Their constitution or structure. (b) Their stated investment objective.

Differentiation on the basis of structure of schemes

Schemes are classified as Close-ended or Open-ended depending upon whether they give the investor the option to redeem at any time (open-ended) or whether the investor has to wait till maturity of the scheme.

The units offered by these schemes are available for sale and repurchase on any business day at NAV based prices. Hence, the unit capital of the schemes keeps changing each day. Such schemes thus offer very high liquidity to investors and are becoming increasingly popular in India. Please note that an open-ended fund is not obliged to keep selling/issuing new units at all times, and may stop issuing further subscription to new investors. On the other hand, an open-ended fund rarely denies to its investor the facility to redeem existing units.

The unit capital of a close-ended product is fixed as it makes a one-time sale of fixed number of units. These schemes are launched with an initial public offer (IPO) with a stated maturity period after which the units are fully redeemed at NAV linked prices. In the interim, investors can buy or sell units on the stock exchanges where they are generally listed. Unlike open-ended schemes, the unit capital in Close-ended schemes usually remains unchanged. After an initial closed period, the scheme may offer direct compared to open-ended schemes and hence trade at a discount to the NAV. This discount tends towards the NAV closer to the maturity date of the scheme.

These schemes 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 based prices.

Differentiation on the basis of investment objectives

Schemes can be classified by way of their stated investment objective such as Growth Fund, Balanced Fund, Income Fund etc.

Equity/Growth Schemes
These schemes, also commonly called Growth Schemes, seek to invest a majority of their funds in equities and a small portion in money market instruments. Such schemes have the potential to deliver superior returns over the long term. However, because they invest in equities, these schemes are exposed to fluctuations in value especially in the short term. Equity schemes are hence not suitable for investors seeking regular income or needing to use their investments in the short-term. They are ideal for investors who have a long-term investment horizon. The NAV prices of equity fund fluctuates with market value of the underlying stock which are influenced by external factors such as social, political as well as economic. HDFC Equity Fund and HDFC Top200 Fund are examples of equity schemes.

These schemes invest in money markets, bonds and debentures of corporate companies with medium and long-term maturities. These schemes primarily target current income instead of capital appreciation. Hence, a substantial part of the

distributable surplus is given back to the investor by way of dividend distribution. These schemes usually declare quarterly dividends and are suitable for conservative investors who have medium to long term investment horizon and are looking for regular income through dividend or steady capital appreciation.

These schemes, also commonly known as Income Schemes, invest in debt securities such as corporate bonds, debentures and government securities. The prices of these schemes tend to be more stable compared with equity schemes and most of the returns to the investors are generated through dividends or steady capital appreciation. These schemes are ideal for conservative investors or those who are not in a position to take higher equity risks. However, as compared to the money market schemes they do have a higher price fluctuation risk and compared to a Gilt fund they have a higher credit risk. HDFC Income Fund is an example of bond schemes.

These schemes invest in short term instruments such as commercial paper ("CP"), certificates of deposit ("CD"), treasury bills ("T-Bill") and overnight money ("Call"). The schemes are the least volatile of all the types of schemes because of their investments in money market instrument with short-term maturities. These schemes have become popular with institutional investors and high net-worth individuals having short-term surplus funds.

Hybrid/Balanced Schemes
These schemes are also commonly called balanced schemes. These invest in both equities as well as debt. By investing in a mix of this nature, balanced schemes seek to attain the objective of income and moderate capital appreciation. Such schemes are ideal for investors with a conservative, long-term orientation. HDFC Prudence Fund and HDFC Balance Fund are perfect examples of such hybrid schemes.

Other Schemes: Tax-Saving-Schemes

Investors (individuals and Hindu Undivided Families ("HUFs")) are being encouraged to invest in equity markets through Equity Linked Savings Scheme ("ELSS") by offering them a tax rebate. Units purchased cannot be assigned / transferred/ pledged / redeemed / switched - out until completion of 3 years from the date of allotment of the respective Units. The Scheme is subject to Securities & Exchange Board of India (Mutual Funds) Regulations, 1996 and the notifications issued by the Ministry of Finance (Department of Economic Affairs), Government of India regarding ELSS. Subject to such conditions and limitations, as prescribed under Section 88 of the Income-tax Act, 1961, subscriptions to the Units not

exceeding Rs.10, 000 would be eligible to a deduction, from income tax, of an amount equal to 20% of the amount subscribed.

Special Schemes: Sector-Specific-Equity-Schemes

These schemes restrict their investing to one or more pre-defined sectors, e.g. technology sector. They depend upon the performance of these select sectors only and are hence inherently more risky than general purpose equity schemes. These schemes are ideally suited for informed investors who wish to take a risk on the concerned sector.

An Index is too used as a measure of the performance of the market as a whole, or a specific sector of the market. It also serves as a relevant benchmark to evaluate the performance of mutual funds. Some investors are interested in investing in the market in general rather than investing in any specific fund. Such investors are happy to receive the returns posted by the markets. As it is not practical to invest in each and every stock in the market in proportion to its size, these investors are comfortable investing in a fund that they believe is a good representative of the entire market. Index Funds are launched and managed for such investors.



A rational investor before investing his or her money in any stock analyses the risk associated with the particular stock. The actual return he receives from a stock may vary from the expected one and thus a investor is always cautious about the rate of risk associated with the particular stock. Hence it becomes very essential on the part of investors to know the risk as the hard earned money is being invested with the view to earn good return on the investment. Risk mainly consists of two components Systematic risk Unsystematic risk Systematic risk The systematic risk affects the entire market. The economic conditional, political situations, sociological changes affect the entire market in turn affecting the company and even the stock market. These situations are uncontrollable by the corporate and investor. Unsystematic risk The unsystematic risk is unique to industries. It differs from industry to industry. Unsystematic risk stems from managerial inefficiency, technological change in the production process, availability of raw materials, changes in the consumer preference, and labour problems. The nature and magnitude of above mentioned factors differ from industry to industry and company to company. In a general view, the risk for any investor would be the probable loss for investing money in any mutual fund. But when we look at the technical side of it , we cant just say that these schemes/fund carry risk without any proof.

They are certain set of formulas to say the percentage of risk associated with it. There are certain tools or formulas used to calculate the risk associated with the schemes. These tools help us to understand the risk associated with the schemes. These schemes are compared with the benchmark BSE 100.


Some of the main competitors of SBI Mutual Fund in Moradabad are as Follows: i. ICICI Mutual Fund


Reliance Mutual Fund


UTI Mutual Fund


Kotak Mutual Fund


HDFC Mutual Fund


LIC Mutual Fund

Savings form an important part of the economy of any nation. With the savings invested in various options available to the people, the money acts as the driver for growth of the country. Indian financial scene too presents a plethora of avenues to the investors. Though certainly not the best or deepest of markets in the world, it has reasonable options for an ordinary man to invest his savings. The possible avenues for investment can be divided into following categories:

EQUITIES: Options available are secondary market (buying or selling shares in

the stock exchanges) or the primary market (IPOs). These are generally classified as high risk high return asset.

FIXED INCOME INSTRUMENTS: This product class includes options

such as Fixed Deposits, Debentures, Bonds, Preference shares etc. These investments are relatively safer but limited upside on returns.


govt. regulations, investors particularly in developing countries will prefer to keep their assets in foreign currency. Hard currencies like US Dollars or pound or Euro are relatively stable. The risk of currency depreciation in case of economic /political turmoil is high.

COMMODITIES: Investing in commodities on a large scale is typically done

traders or speculators who generally are skilled. Normally in commodities high risk investors would invest for high returns in a short period. A proxy for this is the way retail households stock up commodities in anticipation of price increase, such as stocking sugar or wheat requirements for the full year.

ART/ANTIQUES: Art has proved to be an important investment avenue,

particularly for the rich and wealthy. However, one has to be an expert in evaluating the value of art. Investment in paintings is illiquid and has a long gestation period, entails high risk but high rewards too. PROPERTY: This offers a limited option to investors as in India most people buy a house to live in. only the very rich buy property as an investment. Real estate is very illiquid investment option.

BULLION MARKET (GOLD): This is one avenue which has been a major
area for investing in the Indian society. The importance of gold and silver has been prevalent through historic time. The importance of this market is due to the liquidity it provides.

BANKS: Considered as the safest of all options, banks have been the roots of the
financial systems in India. Promoted as the means to social development, banks in India have indeed played an important role in the rural upliftment. For an ordinary person though, they have acted as the safest investment avenue wherein a person deposits money and earns interest on it. The two main modes of investment in banks, Savings accounts and fixed deposits have been effectively used by one and all. However, today the interest rate structure in the country is headed southwards, keeping in line with global trends. With the banks offering 9 percent in their fixed deposits for one year, the yields have come down substantially in recent times. Add to this, the inflationary pressures in economy and people have a position where the savings are not earning. The inflation is creeping up, to almost 8 percent at times, and this means that the value of money saved goes down instead of going up. This effectively mars any chance of gaining from the investments in banks.

POST OFFICE SCHEMES: Just like banks, post offices in India have a wide
network. Spread across the nation, they offer financial assistance as well as serving the basic requirements of communication. Among all saving options, Post office schemes have been offering the highest rates. Added to it is the fact that the investments are safe with the department being a Government of India entity. So the two basic features, those of return safety and quantum of returns were being handsomely taken care of. Though certainly not the most efficient systems in terms of service standards and liquidity, these have still managed to attract the attention of small, retail investors. However, with the government announcing its intention

of reducing the interest rates in small savings options, this avenue is expected to lose some of the investors. PUBLIC PROVIDENT FUNDS: Public Provident Funds act as options to save for the post retirement period for most people and have been considered good option largely due to the fact that returns were higher than most other options and also helped people gain from tax benefits under various sections. This option too is likely to lose some of its sheen on account of reduction in the rates offered. The options discussed above are essentially for the risk-averse, people who think of safety and then quantum of return, in that order. For the brave, it is dabbling in the stock market. Stock markets provide an option to invest in a high risk, high return game. While the potential return is much more than 10-11 percent any of the options discussed above can generally generate, the risk is undoubtedly of the highest order. But then, the general principle of encountering greater risks and uncertainty when one seeks higher returns holds true. However, as enticing as it might appear, people generally are clueless as to how the stock market functions and in the process can endanger the hard-earned money. For those who are not adept at understanding the stock market, the task of generating superior returns at similar levels of risk is arduous to say the least. This is where Mutual Funds come into picture. Mutual Funds are essentially investment vehicles where people with similar investment objective come together to pool their money.


Making Risk- adjusted returns comparison. By doing this the investor will know whether the returns generated by the scheme have been adequately compensated for the extra risk undertaken by the scheme. The investor depending upon his risk appetite and preferences should subclassify the schemes on the basis of the characteristics of the schemes, which may be defensive or aggressive in nature. Portfolio concentration is also an important factor to be considered. It is always advisable to choose a scheme, which has a well-diversified portfolio rather than a concentrated portfolio, as it carries lesser risk. Liquidity of the portfolio is also one of the critical parameters. The corpus size of the scheme is also of importance. A large corpus size firstly denotes investors confidence in the scheme and its fund manger abilities over the years and, secondly it allows the fund manager to diversify the portfolio, which reduces the overall market risk. Other factors like turnover rates, low expense ratio, load structure etc of the schemes etc should also be considered before finally zeroing down on a scheme of your choice. The rankings undertaken by ICRA are an initiative to inform the investorswho does not have the time or the expertise to undertake the analysis on their own- about the relative performance of the schemes. It considers all important parameters to arrive at a comprehensive rank with a view to help investors decide the scheme which may suit their investment profile. Although much neglected, the due diligence in selection of the right mutual fund scheme is of utmost importance as an investor cannot move in and out of a particular scheme on a regular basis, because of the high costs involved,



4. 5.




and investments made into a particular scheme should be looked on a longterm basis as a wealth creation tool.

Merits and Demerits of mutual funds

Merits of Mutual Funds 1. Professional Investment Management.
By pooling the funds of thousands of investors, mutual funds provide full-time, high-level professional management that few individual investors can afford to obtain independently. Such management is vital to achieving results in today's complex markets. Your fund managers' interests are tied to yours, because their compensation is based not on sales commissions, but on how well the fund performs. These managers have instantaneous access to crucial market information and are able to execute trades on the largest and most cost-effective scale. In short, managing investments is a full-time job for professionals.

2. Diversification.
Mutual funds invest in a broad range of securities. This limits investment risk by reducing the effect of a possible decline in the value of any one security. Mutual fund shareowners can benefit from diversification techniques usually available only to investors wealthy enough to buy significant positions in a wide variety of securities.

3. Low Cost.
If you tried to create your own diversified portfolio of 50 stocks, you'd need at least $100,000 and you'd pay thousands of dollars in commissions to assemble your portfolio. A mutual fund lets you participate in a diversified portfolio for as little as $1,000, and sometimes less. And if you buy a no-load fund, you pay no sales charges to own them.

4. Convenience and Flexibility.

You own just one security rather than many, yet enjoy the benefits of a diversified portfolio and a wide range of services. Fund managers decide what securities to trade, clip the bond coupons, collect the interest payments and see that your dividends on portfolio securities are received and your rights exercised. It's easy to

purchase and redeem mutual fund shares, either directly online or with a phone call.

5. Quick, Personalized Service.

Most funds now offer extensive websites with a host of shareholder services for immediate access to information about your fund account. Or a phone call puts you in touch with a trained investment specialist at a mutual fund company who can provide information you can use to make your own investment choices, assist you with buying and selling your fund shares, and answer questions about your account status.

6. Ease of Investing
You may open or add to your account and conduct transactions or business with the fund by mail, telephone or bank wire. You can even arrange for automatic monthly investments by authorizing electronic fund transfers from your checking account in any amount and on a date you choose. Also, many of the companies featured at this site allow account transactions online.

7. Total Liquidity, Easy Withdrawal

You can easily redeem your shares anytime you need cash by letter, telephone, bank wire or check, depending on the fund. Your proceeds are usually available within a day or two.

8. Life Cycle Planning

With no-load mutual funds, you can link your investment plans to future individual and family needs -- and make changes as your life cycles change. You can invest in growth funds for future college tuition needs, then move to income funds for retirement, and adjust your investments as your needs change throughout your life. With no-load funds, there are no commissions to pay when you change your investments.

9. Market Cycle Planning

For investors who understand how to actively manage their portfolio, mutual fund investments can be moved as market conditions change. You can place your funds in equities when the market is on the upswing and move into money market funds on the downswing or take any number of steps to ensure that your investments are meeting your needs in changing market climates. A word of caution: since it is impossible to predict what the market will do at any point in time, staying on

course with a long-term, diversified investment view is recommended for most investors.

10. Investor Information

Shareholders receive regular reports from the funds, including details of transactions on a year-to-date basis. The current net asset value of your shares (the price at which you may purchase or redeem them) appears in the mutual fund price listings of daily newspapers. You can also obtain pricing and performance results for the all mutual funds at this site, or it can be obtained by phone from the fund.

11. Periodic Withdrawals

If you want steady monthly income, many funds allow you to arrange for monthly fixed checks to be sent to you, first by distributing some or all of the income and then, if necessary, by dipping into your principal.

12. Dividend Options

You can receive all dividend payments in cash. Or you can have them reinvested in the fund free of charge, in which case the dividends are automatically compounded. This can make a significant contribution to your long-term investment results. With some funds you can elect to have your dividends from income paid in cash and your capital gains distributions reinvested.

13. Automatic Direct Deposit

You can usually arrange to have regular, third-party payments -- such as Social Security or pension checks -- deposited directly into your fund account. This puts your money to work immediately, without waiting to clear your checking account, and it saves you from worrying about checks being lost in the mail.

14. Recordkeeping Service

With your own portfolio of stocks and bonds, you would have to do your own recordkeeping of purchases, sales, dividends, interest, short-term and long-term gains and losses. Mutual funds provide confirmation of your transactions and necessary tax forms to help you keep track of your investments and tax reporting.

15. Safekeeping
When you own shares in a mutual fund, you own securities in many companies without having to worry about keeping stock certificates in safe deposit boxes or sending them by registered mail. You don't even have to worry about handling the mutual fund stock certificates; the fund maintains your account on its books and sends you periodic statements keeping track of all your transactions.

16Retirement and College Plans

Mutual funds are well suited to Individual Retirement Accounts and most funds offer IRA-approved prototype and master plans for individual retirement accounts (IRAs) and Keogh, 403(b), SEP-IRA and 401(k) retirement plans. Funds also make it easy to invest -- for college, children or other long-term goals. Many offer special investment products or programs tailored specifically for investments for children and college.

17. Online Services

The internet provides a fast, convenient way for investors to access financial information. A host of services are available to the online investor including direct access to no-load companies.

18. Sweep Accounts

With many funds, if you choose not to reinvest your stock or bond fund dividends, you can arrange to have them swept into your money market fund automatically. You get all the advantages of both accounts with no extra effort.

19. Asset Management Accounts

These master accounts, available from many of the larger fund groups, enable you to manage all your financial service needs under a single umbrella from unlimited check writing and automatic bill paying to discount brokerage and credit card accounts.

20. Margin
Some mutual fund shares are marginable. You may buy them on margin or use them as collateral to borrow money from your bank or broker. Call your fund company for details.

Demerits of Mutual Funds:

1. Professional Management.
Did you notice how we qualified the advantage of professional management with the word "theoretically"? Many investors debate whether or not the socalled 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.

2. 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.

3. Dilution.
It's possible to have too much diversification. 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.

4. 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-gains 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.

A Market Research was performed to find out the actuality from the investors about what they think about the various Investment Options. It was done to find out the investment patterns and behavior of the people i.e. how much they invest, what are the reasons behind their investments, and where they invest. Thus a questionnaire was devised to fetch the above mentioned information from the investors. Most of the questions in the questionnaires were objective in nature which helped the people to fill it with utmost ease. The sample size for the research was 100, which included all the classes of people aged 18 and above. The questionnaire devised for the market research is attached to the report as Annexure I. Each question of the questionnaire is discussed on a separate page and the results are explained with the help of graphs.

Costs associated:
Expenses: AMCs charge an annual fee, or expense ratio that covers administrative expenses, salaries, advertising expenses, brokerage fee, etc. A 1.5% expense ratio means the AMC charges Rs1.50 for every Rs100 in assets under management. A fund's expense ratio is typically to the size of the funds under management and not to the returns earned. Normally, the costs of running a fund grow slower than the growth in the fund size - so, the more assets in the fund, the lower should be its expense ratio

Loads: Entry Load/Front-End Load (0-2.25%)- its the commission charged at the time of buying the fund to cover the cost of selling, processing etc. Exit Load/Back- End Load (0.25-2.25%)- it is the commission or charged paid

when an investor exits from a mutual fund, it is imposed to discourage withdrawals. It may reduce to zero with increase in holding period. Measuring and evaluating mutual funds performance: Every investor investing in the mutual funds is driven by the motto of either wealth creation or wealth increment or both. Therefore its very necessary to continuously evaluate the funds performance with the help of factsheets and newsletters, websites, newspapers and professional advisors like SBI mutual fund services. If the investors ignore the evaluation of funds performance then he can loose hold of it any time. In this ever-changing industry, he can face any of the following problems: 1. Variation in the funds performance due to change in its management/ objective. 2. The funds performance can slip in comparison to similar funds. 3. There may be an increase in the various costs associated with the fund. 4 .Beta, a technical measure of the risk associated may also surge. 5. The funds ratings may go down in the various lists published by independent rating agencies. 6 .It can merge into another fund or could be acquired by another fund house.

Performance measures: Equity funds: the performance of equity funds can be measured on the basis of: NAV Growth, Total Return; Total Return with Reinvestment at NAV, Annualized Returns and Distributions, Computing Total Return (Per Share Income and Expenses, Per Share Capital Changes, Ratios, Shares Outstanding), the Expense Ratio, Portfolio Turnover Rate, Fund Size, Transaction Costs, Cash Flow, Leverage.

Debt fund: likewise the performance of debt funds can be measured on the basis of: Peer Group Comparisons, The Income Ratio, Industry Exposures and Concentrations, NPAs, besides NAV Growth, Total Return and Expense Ratio.

Liquid funds: the performance of the highly volatile liquid funds can be measured on the basis of: Fund Yield, besides NAV Growth, Total Return and Expense Ratio.

Concept of benchmarking for performance evaluation:

Every fund sets its benchmark according to its investment objective. The funds performance is measured in comparison with the benchmark. If the fund generates a greater return than the benchmark then it is said that the fund has outperformed benchmark , if it is equal to benchmark then the correlation between them is exactly 1. And if in case the return is lower than the benchmark then the fund is said to be underperformed.

Some of the benchmarks are : 1. Equity funds: market indices such as S&P CNX nifty, BSE100, BSE200, BSEPSU, BSE 500 index, BSE bankex, and other sectoral indices. 2. Debt funds: Interest Rates on Alternative Investments as Benchmarks, I-Bex Total Return Index, JPM T-Bill Index Post-Tax Returns on Bank Deposits versus Debt Funds. 3. Liquid funds: Short Term Government Instruments Interest Rates as

Benchmarks, JPM TBill Index

To measure the funds performance, the comparisons are usually done with: I)with a market index. ii) Funds from the same peer group. iii) Other similar products in which investors invest their funds.

Financial planning for investors( ref. to mutual funds): Investors are required to go for financial planning before making investments in any mutual fund. The objective of financial planning is to ensure that the right amount of money is available at the right time to the investor to be able to meet his financial goals. It is more than mere tax planning. Steps in financial planning are: Asset allocation. Selection of fund. Studying the features of a scheme. In case of mutual funds, financial planning is concerned only with broad asset allocation, leaving the actual allocation of securities and their management to fund managers. A fund manager has to closely follow the objectives stated in the offer document, because financial plans of users are chosen using these objectives.

Why has it become one of the largest financial instruments? If we take a look at the recent scenario in the Indian financial market then we can find the market flooded with a variety of investment options which includes

mutual funds, equities, fixed income bonds, corporate debentures, company fixed deposits, bank deposits, PPF, life insurance, gold, real estate etc. all these investment options could be judged on the basis of various parameters such asreturn, safety convenience, volatility and liquidity. measuring these investment options on the basis of the mentioned parameters,

we get this in a tabular form:

Return Safety Volatility Liquidity Convenience



















Co. FDs






























Real Estate






Mutual Funds









Sample size Sample unit Sampling technique technique Research design Collection of data:

Descriptive Primary data through Questionnaires and interaction with customers

Secondary data Duration

Internet. 45 Days

Research report
Objective of research;

The main objective of this project is concerned with getting the opinion of people regarding mutual funds and what they feel about availing the services of financial advisors. I have tried to explore the general opinion about mutual funds. It also covers why/ why not investors are availing the services of financial advisors. Along with it a brief introduction to Indias largest financial intermediary, SBI has been given and it is shown that how they operate in mutual fund dept.

Scope of the study:

The research was carried on in Jaipur. It is restricted to southern Jaipur. I have visited various branches of SBI bank in the southern region. Data sources: Research is totally based on primary data. Secondary data can be used only for the reference. Research has been done by primary data collection, and primary data has been collected by interacting with various people. The secondary data has been collected through various journals and websites and some special publications of SBI .


Sampling procedure: The sample is selected in a random way, irrespective of them being investor or not or availing the services or not. It was collected through mails and personal visits to the known persons, by formal and informal talks and through filling up the questionnaire prepared. The data has been analyzed by using the measures of central tendencies like mean, median, mode. The group has been selected and the analysis has been done on the basis statistical tools available. Sample size: The sample size of my project is limited to 100 only. Out of which only 75 people attempted all the questions. Other 25 not investing in MFs attempted only 2 questions. Sample design: Data has been presented with the help of bar graph, pie charts, line graphs etc.

Limitation of the study:

Time limitation. Research has been done only at southern Jaipur. Some of the persons were not so responsive. Possibility of error in data collection. Possibility of error in analysis of data due to small sample size. ANALYSIS & INTERPRETATION OF THE DATA 1. (a) Age distribution of the Investors of Jaipur south

Investors invested in Mutual Fund





13 12


31-35 36-40 41-45 46-50


Age group of the Investors

b). Occupation of the investors of Jaipur south

35 No. of Investors 30 30 24 25 20 15 10 5 2 2 20

Govt. Service Pvt. Service Business Agriculture Others

Occupation of the customers

(c). Monthly Family Income of the

Investors of Jaipur south

45 41 40 No. of Investors 35 34 30 28 25 20 15 10 7 5 0 <=15 15-20 20-30 30-40 >40 3

Income Group of the Investorsn (Rs. in Th.)

(2) Investors invested in different kind of investments.

Chart Title

Real Estate

32 15 25 37 70 76 74 97


Shares/Deb entures Post Office(NSC) mutual funds Insurance

Fixed Deposits
Saving A/c

Linear (Real Estate)

50 100 No. of respondent


3. Preference of factors while




high return


low risk








4. Awareness about Mutual Fund and its Operations

25% 75%



5. Source of information for customers about Mutual Fund

40 35 No. of Respondents 30 25 20 14 15 10 10 5 34


Advertisement Peer Group Bank Financial Advisors

Source of Information

1. Investors invested in Mutual Fund

No 30%

Yes 70%

7. Reason for not invested in Mutual Fund








4 2

Not Aware Higher Risk Not Any


8. Preference of Investors for future investment in Mutual Fund





ICICI Prudential Name of AMC








SBIMF 0 10 20 30

38 40 50

No. of Investors


Reason for invested in SBIMF


36 35




20 16 15 13


0 Associated with SBI Better Return Agents Advice

10. Channel Preferred by the Investors for Mutual Fund Investment





20 17 15 11 10

0 Financial Advisor Bank CHANNELS AMC

11. Mode of Investment Preferred by

the Investors

26 44

One time Investment SIP

12. Preferred Portfolios by the Investors











In jaipur south, investors in the Age Group of 36-40 years were more in numbers. The second most Investors were in the age group of 41-45 years and the least were in the age group of below 30 years.

In Occupation group most of the Investors were Govt. employees, the second most Investors were Private employees and the least were associated with industry.

In family Income group, between Rs. 20,000- 30,000 were more in numbers, the second most were in the Income group of more than Rs.30,000 and the least were in the group of below Rs. 10,000.

About all the Respondents had a Saving A/c in Bank, 76% Invested in Fixed Deposits, Only 70% Respondents invested in Mutual fund.

Mostly Respondents preferred High Return while investment, the second most preferred Low Risk then liquidity and the least preferred Trust.

Only 75% Respondents were aware about Mutual fund and its operations

For Future investment the maximum Respondents preferred Reliance Mutual Fund, the second most preferred ICICI Prudential, SBIMF has been preferred after them. Among 100 Respondents only 70% had invested in Mutual Fund.

Out of 70 investors of SBIMF 36% have invested due to its association with the Brand SBI,13% Invested because of Advisors Advice and 16% due to better return. 42% Investors preferred to Invest through Financial Advisors, 17% through AMC (means Direct Investment) and 11% through Bank.

44% preferred One Time Investment and 26% preferred SIP out of both type of Mode of Investment. The most preferred Portfolio was Equity, the second most was Balance (mixture of both equity and debt), and the least preferred Portfolio was Debt portfolio.Recommendations. The most vital problem spotted is of ignorance. Investors should be made aware of the benefits. Nobody will invest until and unless he is fully convinced. Mutual Fund Company needs to give the training of the Individual Financial Advisors about the Fund/Scheme and its objective, because they are the main source to influence the investors. Younger people aged under 35 will be a key new customer group into the future, so making greater efforts with younger customers who show some interest in investing should pay off. Systematic Investment Plan (SIP) is one the innovative products launched by Assets Management companies very recently in the industry. SIP is easy for monthly salaried person as it provides the facility of do the investment interest in investing should pay off.


STRENGTHS:1.) Brand Name: The biggest strength is the tag of SBI is going to be the largest banking group of finance industries.

1. Compatible Price: Prices of different schemes of SBI Mutual Funds are much more compatible than others.

2. Diversified Schemes: We have diversified schemes which are an exception case of SBI Mutual Fund.

3. Less Risk: Our debt schemes are 100% free form market risk. Even as our portfolio is that diversified so equities are also less risky than others.

1. Easy procedures of redemption & registration too: We have open ended schemes so Mutual funds are easily redeemable.

WEAKNESS:1. Prone to Market Risk: Mutual Funds depend on overall macro economic condition and market scenario.

2. Tough Competitions: There is a very tough competition because of large number of Asset Management Companies.

OPPORTUNITIES:1. Hoarding: Most of the Indians have black money that too in huge amount i.e. the do not have money in banks, so approaching them is beneficial.

2. Indian Capital Market is Growing: So more & more new investors are interested in investments.

3. Tailor Made Products: We have tailor made products like sector specified schemes & even diversified schemes.

4. Branch Expansion: Large no. of branches are opening day by day and even we are traping the countries having almost same type of socio-economic condition & even same culture etc.

THREATS:1. Tough Competition:-As there are so many mutual fund companies having almost same kind of schemes, so its tough to compete with.

3. Unawareness: Major % of population is not aware of mutual funds, so its hard 4. to convince people. 5. Changing Scenario: Our market scenario is changing day by day i.e. our market is

fluctuating, so this makes investor hard to invest


The project that I undertook in my MUTUAL FUND provided me a good experience of Investment Avenues like Mutual Funds, Insurance, Fixed Deposits and related activities. It was a good experience for me as it helped me enhance my knowledge as well as gave a good industry exposure for the period which would definitely prove to be very useful at the time of placements. The complete project helped me gain knowledge and at the same time it was very beneficial for the company.

The study performed using the historical data will help the company in two ways. Firstly, it would let the company know which of the funds under the given category works well and which does not. It can design certain strategies for the funds which are still underperforming and are in their nascent stages. Secondly, it would help the organization, the financial consultants and the marketing team to provide a strategy for the investors who can now easily decide where to invest and where not to.

The Market Research performed gave an insight of the actual investors, their investment behavior and their investment trends which would again help the company to make correct strategies to attract more customers and provide them with what they are comfortable with.

Summing up, I am thankful to the Company and the Project that gave me an opportunity where I could learn new things, enhance my knowledge, gain some industry exposure and at the same time, do something that could be beneficial for the company and the investors.


Suggestions included:

To regulate entry and exit loads effectively as it creates a lot of confusion during actual settlement of costs and bills. To better operations management so as to reduce the time lag and improve customer feedback. To improve market penetration by targeting not only metros but minimetros and smaller towns more effectively. To come up with more innovative schemes and products so as to expand over the largest customer base as possible. The most vital problem spotted is of ignorance. Investors should be made aware of the benefits. Nobody will invest until and unless he is fully convinced. Investors should be made to realize that ignorance is no longer bliss and what they are losing by not investing.

Mutual funds offer a lot of benefit which no other single option could offer. But most of the people are not even aware of what actually a mutual fund is? They only see it as just another investment option. So the advisors should try to change their mindsets. The advisors should target for more and more young investors. Young investors as well as persons at the height of their career would like to go for advisors due to lack of expertise and time.

Mutual Fund Company needs to give the training of the Individual Financial Advisors about the Fund/Scheme and its objective, because they are the main source to influence the investors.

Before making any investment Financial Advisors should first enquire about the risk tolerance of the investors/customers, their need and time (how long they want to invest). By considering these three things they can take the customers into consideration.

Younger people aged under 35 will be a key new customer group into the future, so making greater efforts with younger customers who show some interest in investing should pay off.

Customers with graduate level education are easier to sell to and there is a large untapped market there. To succeed however, advisors must provide sound advice and high quality.

Systematic Investment Plan (SIP) is one the innovative products launched by Assets Management companies very recently in the industry. SIP is easy for monthly salaried person as it provides the facility of do the investment in EMI. Though most of the prospects and potential investors are not aware about the SIP. There is a large scope for the companies to tap the salaried persons.

Consulting various reference points on the aforementioned topics became pertinent. A list of such references is provided as follows:


direct interaction with bank customers brochures of product offerings of SBI MUTUL FUND. factsheets of SBIMF and other AMCs company database for the list of investors various investment journals C.R.Kothari; Research Methodology

A study of preferences of the investors for investment in mutual funds. 1. Personal Details: (a). Name:(b). Add: (c). Age:(d). Qualification:Graduation/PG Under Graduate Others Phone:-

(e). Occupation. Pl tick () Govt. Ser Pvt. Ser Business Agriculture Others

(g). What is your monthly family income approximately? Pl tick (). Up to Rs.15,000 Rs. 15,001 to Rs. 20,001 to Rs.30,001 to 10000 30,000 40,000 Rs. 40,001 and above

2. What kind of investments you have made so far? Pl tick (). All applicable. a. Saving account b. Fixed c. Insurance d. Mutual Fund

deposits e. Post OfficeNSC, etc f. g. Gold/ Shares/Debentur Silver es h. Real Estate

3. While investing your money, which factor will you prefer? . (a) Liquidity (b) Low Risk (c) High Return (d) Trust

5. Are you aware about Mutual Funds and their operations? Pl tick (). (Ye)s No

5. If yes, how did you know about Mutual Fund? a. Advertisement b. Peer Group c. Banks d. Financial Advisors

6. Have you ever invested in Mutual Fund? Pl tick (). Yes No

7. If not invested in Mutual Fund then why?

(a) Not aware of MF (b) Higher risk (c) Not any specific reason

8. If yes, in which Mutual Fund you have invested? Pl. tick (). All applicable.


b. UTI


d. Reliance

e. Kotak

f. Other. specify

9. If invested in SBIMF, you do so because (Pl. tick (), all applicable).

a. SBIMF is associated with State Bank of India. b. They have a record of giving good returns year after year. c. Agent Advice

10. If NOT invested in SBIMF, you do so because (Pl. tick () all applicable). a. You are not aware of SBIMF. b. SBIMF gives less return compared to the others. c. Agent Advice

11. When you plan to invest your money in asset management co. which AMC will you prefer?

Assets Management Co. a. SBIMF

b. UTI c. Reliance d. HDFC e. Kotak f. ICICI

12. Which Channel will you prefer while investing in Mutual Fund? (a) Financial Advisor (b) Bank (c) AMC

13. When you invest in Mutual Funds which mode of investment will you prefer? Pl. tick (). a. One Time Investment b. Systematic Investment Plan (SIP)

14. When you want to invest which type of funds would you choose? a. Having only debt portfolio b. Having debt & equity portfolio. c. Only equity portfolio.

15. How would you like to receive the returns every year? Pl. tick (). a. Dividend payout b. Dividend reinvestment c. Growth in NAV

16. Instead of general Mutual Funds, would you like to invest in sectorial funds? Please tick (). Yes No