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CHAPTER 1
1.1 INTRODUCTION
1.1.1 MEANING OF MUTUAL FUND
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 well diversified 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.
The SEBI Regulation act 1993 defines Mutual Fund as a fund established in the form of a
trust by a sponsor to raise monies by the trustees through the sale of units to the public under one
or more schemes for investing in securities
The Mutual Fund was the Massachusetts Investors Trust introduced in 1924. At the end
of it's first year, the fund had 200 investors with $63,600 in assets. At the end of 1995, the fund
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grew to73, 500 investors with assets totaling $1.8 billion! Now there are over 7000 different
mutual funds available.
In Simple Words, Mutual fund is a mechanism for pooling the resources
by issuing units to the investors and investing funds in securities in accordance with objectives asdisclosed in offer document. Investments in securities are spread across a wide cross -section of
industries and sectors and thus the risk is reduced. Diversification reduces the risk because all
stocks may not move in the same direction in the same proportion at the same time. Mutual fund
issues units to the investors in accordance with quantum of money invested by them. Investors of
Mutual funds are known as unit holders.
The profits or losses are shared by the investors in proportion to their investments. The
Mutual funds normally come out with a number of schemes with different investment objectives
which are launched from time to time. In India, A Mutual fund is required to be registered with
Securities and Exchange Board of India (SEBI) which regulates securities markets before it
can collect funds from the public.
In Short, a Mutual fund is a common pool of money in to which investors with common
investment objective place their contributions that are to be invested in accordance with the stated
investment objective of the scheme. The investment manager would invest the money collected
from the investor in to assets that are defined/ permitted by the stated objective of
the scheme. For example, an equity fund would invest equity and equity related instruments and a
debt fund would invest in bonds, debentures, gilts etc. Mutual fund is a 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.
1.1.2 History/ Origin
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The mutual fund industry in India started in 1963 with the formation of Unit Trust of India,
at the initiative of the Government of India and Reserve Bank. 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 a dramatic improvement, both
qualities wise as well as quantity wise. Before, the monopoly of the market had seen an ending
phase; the Assets Under Management (AUM) was Rs67 billion. The private sector entry to the
fund family raised the AUM to Rs. 470 billion in March 1993 and till April 2004; it reached the
height if Rs. 1540 billion.
The Mutual Fund Industry is obviously growing at a tremendous space with the mutual fund
industry can be broadly put into four phases according to the development of the sector. 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 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 DevelopmentBank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first
scheme launched by UTI was UnitScheme 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)
1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks andLife Insurance Corporation of India (LIC) and General InsuranceCorporation of India (GIC). SBI
Mutual Fund was the first non- UTI Mutual Fund established in June 1987 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 established its
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mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.At the end of
1993, the mutual fund industry had assets under management of Rs.47,004 crores.
Third Phase 1993-2003 (Entry of Private Sector Funds)
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. As at the end of January 2003, there were 33 mutual funds with totalassets of Rs. 1,21,805 crores.
Fourth Phase since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into
two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under
management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of
US 64 scheme, assured return and certain other schemes .
The 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. Consolidation and growth.
As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores
under 421 schemes.
1.1.3 CONCEPT
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 upwith the corpus (thetotal
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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.
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 knownas 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 professionally-managed firm 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 other words we can say that A Mutual Fund is a trust registered with the
Securities and Exchange Board of India (SEBI), which pools up the money from individual /
corporate investors and invests the same on behalf of the investors /unit holders, in equity shares,
Government securities, Bonds, Call money markets etc., and distributes the profits.
The value of each unit of the mutual fund, known as the net asset value (NAV), is mostly
calculated daily based on the total value of the fund divided by the number of shares currently
issued and outstanding. The value of all the securities in the portfolio in calculated daily. From
this, all expenses are deducted and the resultant value divided by the number of units in the fund is
the funds NAV.
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Total value of the fund.
NAV=
No. of shares currently issued and outstanding
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Page 7
MANY INVESTORS WITH COMMON FINANCIALOBJECTIVE POOL THEIR MONEY
INVESTORS ON PROPORTIONATE BASIS GET MUTUAL FUND
UNITS FOR THE SUM CONTRIBUTED TO THE POOL
THE MONEY COLLECTED FROM INVESTORS IS INVESTEDINTO SHARE, DEBENTURE AND OTHER SECURITIES BY THE
FUND MANAGER
THE FUND MANAGER REALISES GAINS OR LOSSES, ANDCOLLECTS DIVIDEND OR INTEREST INCOME
ANY GAIN OR LOSS FOR SUCH INVESTMENT ARE PASSED ONTO THE INVESTORS IN THE PROPORTION OF THE NUMBER OF
UNITS HELD BY THEM
Concept of mutual fund
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1.1.4 GUIDELINES OF SEBI FOR MUTUAL FUND COMPANIES
To protect the interest of the investors, SEBI formulates policies and regulates the mutual funds. It
notified regulations in 1993 (fully revised in 1996) and issues guidelines from time to time.
SEBI approved Asset Management Company (AMC) manages the funds by making
investments in various types of securities. Custodian, registered with SEBI, holds the securities of
various schemes of the fund in its custody.
According to SEBI Regulations, two thirds of the directors of Trustee Company or board of
trustees must be independent.
The Association of Mutual Funds in India (AMFI) reassures the investors in units of mutual
funds that the mutual funds function within the strict regulatory framework. Its objective is to
increase public awareness of the mutual fund industry. AMFI also is engaged in upgradingprofessional standards and in promoting best industry practices in diverse areas such as valuation,
disclosure, transparency etc.
Documents required (PAN mandatory):
Proof of identity:
1. Photo PAN Card.
2.In case of non-photo PAN card in addition to copy of PAN card any one of the following:
Driving license/passport copy/ voter id/ bank photo pass book.
Proof of address (any of the following):latest telephone bill, latest electricity bill, Passport, latest
bank passbook/bank account statement, latest Demat account statement, voter id, driving license,
ration card, rent agreement.
1.1.5 CLASSICAFICATION OF MUTUAL FUND
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Based on their structure:
Open-ended funds: Investors can buy and sell the units from the fund, at any point of
time.
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MUTUAL FUNDS
BASED ON THEIRSTRUCTURE
BASED ON INVESTMENTOBJECTIVE
Open EndedFunds
Closed EndedFunds
EQUITY FUND
BALANCEDFUND
DEBT FUND
TAX SAVINGSCHEME
SPECIAL SCHEME
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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 weightage.
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.
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viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in line with
that of the fund.
Tax Saving Schemes
Investors 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.
1.1.6 ADVANTAGES OF MUTUAL FUNDS
Liquidity.
You can liquidate your investments within 3 to 5 working days (mutual funds dispatch redemptioncheques speedily and also offer direct credit facility into your bank account i.e. Electronic Clearing
Services).
Transparency.
Mutual funds offer daily NAVs of schemes, which help you to monitor your investments on a
regular basis. They also send quarterly newsletters, which give details of the portfolio,
performance of schemes against various benchmarks, etc. They are also well regulated and SEBI
monitors their actions closely.
Tax benefits.
You do not have to pay any taxes on dividends issued by mutual funds. You also have the
advantage of capital gains taxation. Tax-saving schemes and pension schemes give you the added
advantage of benefits under section 88.
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were to seek a financial advisor's help directly, he will end up paying significantly more for
investment advice. Also, he will need to have a sizeable corpus to offer for investment
management to be eligible for an investment advisers services.
1.1.7 DISADVANTAGES OF MUTUAL FUNDS
Professional Management- Many investors debate over whether or not the so-called
professionals are any better than you or I at picking stocks. Management is by no means
infallible, and, even if the fund loses money, the manager still takes his/her cut. We'll talk
about this in detail in a later section.
Costs - Mutual funds don't exist solely to make your life easier--all funds are in it for a
profit. The Mutual fund industry is masterful at burying costs under layers of jargon.
These costs are so complicated that in this tutorial we have devoted an entire section to the
subject.
Dilution - It's possible to have too much diversification. Because funds have small
holdings in so many different companies, high returns from a few investments often don't
make much difference on the overall return. Dilution is also the result of a successful fund
getting too big. When money pours into funds that have had strong success, the manager
often has trouble finding a good investment for all the new money.
Taxes - When making decisions about your money, fund managers don't consider your
personal tax situation. For example, when a fund manager sells a security, a capital-gain
tax is triggered, which affects how profitable the individual is from the sale. It might have
been more advantageous for the individual to defer the capital gains liability.
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1.1.8 HOW TO INVEST IN MUTUAL FUNDS:
Step One - Identify the Investment needs: Our financial goals will vary, based on the age,
lifestyle, financial independence, family commitments, and level of income and expenses
among many other factors. Therefore, the first step is to assess the needs. We can begin by
defining the investment objectives and needs, which could be regular income, buying a
home or finance a wedding or educate children etc.
Step Two - Choose the right mutual Fund: The important thing is to choose the right
mutual fund scheme, which suits our requirements. The offer document of the scheme tells
us its objectives and provides supplementary details like the track record of other schemes
managed by the same Fund Manager. Some factors to evaluate before choosing a particular
mutual Fund are the track record of the performance of the fund over the last few years.
Other factors could be the portfolio allocation, the dividend yield and the degree of
transparency etc.
Step Three - Select the ideal mix of Schemes: Investing in just one Mutual Fund scheme
may not meet all the investment needs. We may consider investing in a combination of
schemes to achieve our specific goals.
Step Four - Invest regularly: The best approach is to invest a fixed amount at specific
intervals, say every month. By investing a fixed sum each month, we buy fewer units when
the price is higher and more units when the price is low, thus bringing down the average
cost per unit. This is called rupee cost averaging and is a disciplined investment strategy
followed by investors all over the world. We can also avail the systematic investment plan
facility offered by many openend fund .
Step Five- Start early: It is desirable to start investing early and stick to a regular
investment plan. If we start now, we will make more than if we wait and 37 invest later.
The power of compounding lets us earn income on income and our money multiplies at a
compounded rate of return.
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Step Six - The final step: Finally we need to fill in the application forms of various fund
schemes and start investing. We may reap the rewards in the years to come. Mutual fund
are suitable for every kind of investor - whether starting a career or retiring, conservative
or risk taking, growth oriented or income seeking.
1.1.9 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.
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1.2 COMPANIES PROFILE
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 Funds Management Pvt. Ltd. is one of the leading fund houses in the country with an investor
base of over 5.8 million and over 20 years of rich experience in fund management consistently
delivering value to its investors. SBI Funds Management Pvt. Ltd. is a joint venture between 'The
State Bank of India' one of India's largest banking enterprises, and Socit Gnrale Asset
Management (France), one of the world's leading fund management companies
that manages over US$ 500 Billion worldwide.
A total of over 5.8 million investors have reposed their faith in the wealth generation expertise of
the Mutual Fund. Schemes of the Mutual fund have consistently outperformed benchmark indices
and have emerged as the preferred investment for millions of investors and HNIs.
Today, the fund manages over Rs. 42,100 crores of assets and has a diverse profile of investors
actively parking their investments across 38 active schemes. The fund serves this vast family of
investors by reaching out to them through network of over 130 points of acceptance, 29 investor
service centers, 59 investor service desks and 6 Investor Service Points.
SBI Mutual is the first bank-sponsored fund to launch an offshore fund Resurgent India
Opportunities Fund. Growth through innovation and stable investment policies is the SBI MF
credo.
1.2.1 PRODUCTS OF SBI MUTUAL FUND
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Equity schemes
The investments of these schemes will predominantly be in the stock markets
and endeavor will be to provide investors the opportunity to benefit from the
higher returns which stock markets can provide. However they are also exposed
to the volatility and attendant risks of stock markets and hence should be
chosen only by such investors who have high risk taking capacities and are
willing to think long term. 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 Sectoral Funds Umbrella
MSFU- Emerging Business Fund
MSFU- IT Fund
MSFU- Parma Fund
MSFU- Contra Fund
MSFU- FMCG Fund
SBI Arbitrage Opportunities Fund
SBI Blue chip Fund
SBI Infrastructure Fund - Series I
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SBI Magnum Tax gain Scheme 1993
SBI ONE India Fund
SBI TAX ADVANTAGE FUND SERIES
Debt schemes
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 Income Fund
Magnum Insta Cash Fund
Magnum Income Fund- Floating Rate Plan
Magnum Income Plus Fund
Magnum Insta Cash Fund -Liquid Floater Plan
Magnum Monthly Income Plan
Magnum Monthly Income Plan - Floater
Magnum NRI Investment Fund
SBI Premier Liquid Fund
BALANCED SCHEMES
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.
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Magnum Balanced Fund
1.2.2 COMPETITORS OF SBI MUTUAL FUND
Some of the main competitors of SBI Mutual Fund are as follows :
ICICI Mutual Fund
Reliance Mutual Fund
UTI Mutual Fund
Birla Sun Life Mutual Fund
Kotak Mutual Fund
HDFC Mutual Fund
Sundaram Mutual Fund
LIC Mutual Fund
Principal
Franklin Templeton
1.2.3 AWARDS AND ACHIEVEMENTS
YEAR 2006 CNBC-
AWAAZ CONSUMER AWARD 2006
LIPPER AWARD-
The Lipper India fund award 2006
CNBC TV18- CRISIL
Mutual Fund of the year award 2006
YEAR 2007
OUTLOOK MONEY-
NDTV Profit Award 2007
CNBC-
AWAAZ CONSUMER AWARD 2007
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LIPPER AWARD-
The Lipper India fund award 2007
ICRA
Mutual Fund Award 2007
CNBC TV18- CRISIL
Mutual Fund of the year award 2007
YEAR 2008
OUTLOOK MONEY-
NDTV Profit Award 2008
LIPPER AWARD-
The Lipper India fund award 2008
ICRA
Mutual Fund Award 2008
YEAR 2009
ICRA
Mutual Fund Award 2009
LIPPER AWARD-
The Lipper India fund award 2009
YEAR 2010
ICRA
Mutual Fund Award 2010
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CHAPTER 2
2.1 OBJECTIVE OF THE STUDY
Main objective:
To measure the level of awareness of the people of Tinsukia regarding Mutual Funds.
To get the insight knowledge about mutual funds.
To get the general view of SBI Mutual Fund.
To check the preference of SBI Mutual Fund as compared to other private players in the
mutual Fund market.
Sub Objective:
To check which mutual fund company the people of Tinsukia are mostly aware of.
The customer of the company falls under which age.
To know why one has invested or not invested in SBI Mutual fund.
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CHAPTER 3
3.1 RESEARCH AND METHODOLOGY
This report is based on primary as well secondary data, however primary data
collection was given more importance since it is overhearing factor in attitude studies.
One of the most important users of research methodology is that it helps in identifying
the problem, collecting, analyzing the required information data and providing an
alternative solution to the problem .It also helps in collecting the vital information that
is required by the top management to assist them for the better decision making both
day to day decision and critical ones.
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.
Sampling:
Sampling procedure:
The sample was selected of them who are the customers/visitors of State Bank if India,
irrespective of them being investors or not or availing the
services or not. It was also collected through personal visits to persons, by formal and
informal talks and through filling up the questionnaire prepared. The data has been
analyzed by using mathematical/Statistical tool.
Sample size:
The sample size of my project is limited to 30 people only. Out of which only 120
people had invested in Mutual Fund. Other 80 people did not have invested in Mutual
Fund.
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Sample design:
Data has been presented with the help of bar graph, pie charts, line graphs etc.
CHAPTER 4
4.1 ANALYSIS AND INTERPRETATION OF THE DATA
A total of 30 correspondent were asked different questions related only to the study , through the
questionnaire . there were 5 personal question and 13 general questions provided.
The following analysis is done according to the responses of the respondent.
ANALYSIS 1:
Q) Age: a) 20- 30 yrs
b) 31- 40 yrs
c) 41-50 yrs
d) 51-60 yrs
e) 61 and above
Respondents age was asked in this question. The total percentage is shown below out of these 5
groups of the 30 respondents.
AGE GROUP TOTAL RESPONDENT PERCENTAGE %
20-30 YEARS 7 23.3
31-40 YEARS 10 33.3
41-50 YEARS 9 30
51-60 YEARS 3 1061 AND ABOVE 1 3.33
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The highest number of respondents were from the age group 31- 40 and least number of respondent were from age 60
yrs and above .
ANALYSIS 2
Q) Sex:
M F
The proportion of the male and the female in the sample size was determined by this equation.
SEX TOTAL PERCENTAGE%
Male 25 83.3
Female 5 16.6
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Most of the respondents were male.
ANALYSIS 3:
Q) Marital status : Married Single
The marital status of the respondents was determined by this question.
MARITAL STATUS TOTAL PERCENTAGE%MARRIED 12 40
SINGLE 18 60
Majority of the respondents were single.
ANALYSIS 4:
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Q) Do you invest ?
Yes No
The respondents were asked whether they invested.
INVESTED TOTAL PERCENTAGE
Yes 28 93.3
No 2 6.66
96% of the respondent invested their money .
ANALYSIS 5:
Q) What kind of investment do you prefer ?
a. Savings account b. Fixed Deposits c. Insurance d. Gold/ silver
e. Mutual Funds f. Post Office /NSC g. Shares/ debentures h. Real state
In this question the respondent were asked what kind of investment did they prefer.
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INVESTMENT PREFERENCE TOTAL PERCENTAGE%
Savings account 7 25
Fixed Deposits 6 21.42
Insurance 4 14.28
Gold/ silver 0 0Mutual Funds 8 28.57
Post Office /NSC 1 3.57
Shares/ debentures 1 3.57
Real state 1 3.57
28.57% of the respondent invest in mutual fund , while 25% in savings account and 21.42% invest in fixed deposits
and none of the respondent invested in gold/silver.
ANALYSIS 6:
Q) While investing your money , which factor will you prefer ?
a. Liquidity b. Low Risk c. High Return d. Companies Reputation
In this questin the respondents were asked which factor they prefered whne they invested their
money .
FACTOR TOTAL PERCENTAGE%
Liquidity 8 28.57
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Low Risk 10 35.71
High Return 7 25
Companies Reputation 3 10.7
Most of the respondent invest in those securities where there is low risk.
ANALYSIS 7:
Q) Are you aware about Mutaul Funds?
Yes No
AWARNESS TOTAL PERCENTAGE%
YES 30 100%
NO
All the respondents are aware about mutual funds.
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ANALYSIS 8:
Q) How did you come to know about Mutual Funds?
a. Advertisment b. Banks c. Financial Advisors
Sources Total Percentage%
Adverstisment 20 66.6
Banks 3 10
Financial Advisor 7 23.3
66.66% of the respondent are aware about mutual funds through advertisment.
ANALYSIS 9:
Q) Have you ever invested in Mutual Funds?
a. Yes b. No
Invested Total Percentage%
Yes 8 26.66
No 22 73.33
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8 out of 30 people invests in mutual funds .
ANALYSIS 10:
Q) If you have not invested in mutal fuds , then why ?
a. High Risk b. Not Aware c. No specific reason
Reason Total Percentage
High Risk 12 54.54
Not Aware 0
No specific Reason 10 45.45
12 people donot invest in mutual fund because of high risk and 9 of them do not have any specific reason for not
investing.
ANALYSIS 11:
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Q) Where do you find yourself as a mutual fund investor ?
a. Long time investor b. short time investor
Reason Total percentageLong term investor 4 50
Short term investor 4 50
Some respondent are long term investors and some are short term investors.
ANALYSIS 12:
Q) In which type of mutual fund you like to invest ?
a. Private b. Public C. Both
Total percentagePrivate 3 37.5
Public 2 25
Both 3 37.5
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The respondents were intersted in investing in all kind of muatual funds.
ANALYSIS 13:
Q) In which mutual fund have you invested ?
a. SBI b. ICICI c. KOTAK d. UTI e. HDFC f. RELAINCE
g. OTHERS
Mutual fund co.s Total percentageSBI 3 37.5
ICICI 1 12.5
KOTAK 1 12.5
UTI 0
HDFC 0
RELIANCE 2 25
OTHERS 1 12.5
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37.5% of the respondent invested in SBI mutual funds,25% invested in reliance mutual fund.
ANALYSIS 14:
Q) If you have invested in SBI then-
i. Why did you invest in SBI mutual fund?
a. Because it is related to state bank
b. High Return
c. Brokers advice
REASON Total percentage
Related to state bank 1 33.3
High return 0
Brokers advice 2 66.66
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66.66% of the respondent invested in SBI mutual fund because of their brokers advice.
ii. If you have not invested in SBI then why ?
a. Not aware b. Already invested c. less return
d. No specific reason
Reason Total percentage
Not aware 0
Already Invested 2 40Less return 0
No specific reason 3 60
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60% of the respondent who did not invest in SBI mutal funds had no specific reason for not investing.
ANALYSIS 15
Q) How would you like to receive the return every year?a. Dividend Payout b. Dividend re-investment c. Growth in NAV
Ways total percentage
Dividend payout 2 25
Dividend reinvested 2 25
Growth in NAV 4 50
Most of the respondent prefered growth in NAV
4.2 FINDING AT A GLANCE
The largest numbers of respondents were from Age Group of 31-40 years .The second most
respondents were in the age group of 40-50 years and the least were in the age group of
above 60 years.
Most of the respondents were male.
60% of the respondents were single
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93.33% of the respondents invest in securities, while the rest dont invest in any kind of
securities.
28.57% invest in mutual fund, 25% invest in savings account , 21.42% invest in fixed
deposits, 14.28% invest in securities and the rest invest in shares/debentures, real estate, postoffice and NCS.
35.71% invest in those securities were the risk is low , 28.57 % invest in those securities
which has easy liquidity, 25% in those having high return, and 10.7% in those securities
whose company name is reliable.
All the investors were aware about mutual funds.
66.6% of the respondents were aware about mutual funds through advertisement, 10%
through banks and 23.3% through financial advisors.
26.6% invest in mutual fund , and the rest 73.3% invest in some other securities.
54.54% dont invest in securities because of high risk , 45.45 % did not have a specific
reason for not investing in mutual fund.
50% of the respondents are long term investors while 50% are short term investors.
37.5% of the respondent prefer private , 25% prefer public and 37.5% prefer both kind of
securities.
37.5% invest in SBI mutual fund, 12.5 % invest in ICICI , 12.5 % invest in KOTAK, 25%
invest in Reliance, 12.5 % invest in other mutual fund companies.
66.6% invest in SBI Mutual fund because of their brokers advice and the rest 33.3%
invested in SBI Mutual fund because it was related to State bank of india.
60% had no specific reason for not investing in SBI Mutual fund. 40 % did not invest in SBI
mutual fund because they have already invested in some other AMC.
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50% of the respondent need growth in NAV as a return every year. And the rest require
dividend payout and dividend reinvested as a return every year .
CHAPTER 5
RECOMMENDATION AND SUGGESTIONS
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.
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CHAPTER 6
CONCLUSION
Running a successful Mutual Fund requires complete understanding of the peculiarities of the
Indian Stock Market and also the psyche of the small investors. This study has made an attempt to
understand the financial behavior of Mutual Fund investors in connection with the preferences of
Brand (AMC), Products, Channels etc. I observed that many of people have fear of Mutual Fund.
They think their money will not be secure in Mutual Fund. They need the knowledge of Mutual
Fund and its related terms. Many of people do not have invested in mutual fund due to lack of
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awareness although they have money to invest. As the awareness and income is growing the
number of mutual fund investors are also growing.
Brand plays important role for the investment. People invest in those Companies where they
have faith or they are well known with them. There are many AMCs but only some are performing
well due to Brand awareness. Some AMCs are not performing well although some of the schemes
of them are giving good return because of not awareness about Brand. Reliance, UTI, SBIMF,
ICICI Prudential etc. they are well known Brand, they are performing well and their Assets Under
Management is larger than others whose Brand name are not well known
like Principle, Sunderam, etc.
Distribution channels are also important for the investment in mutual fund. Financial Advisors are
the most preferred channel for the investment in mutual fund. They can change investors mind
from one investment option to others. Many of investors directly invest their money through AMC
because they do not have to pay entry load. Only those people invest
directly who know well about mutual fund and its operations and those have time.
QUESTIONNAIRE
Respected sir/ madam,I am a student of B.com Part III. As per the requirement and partial
fulfillment of the curriculum I am going through a project study on ANALYSIS
OF MUTUAL FUND ". The questionnaire has been designed to find out the factsand figures relating to this topic. Your response will be kept strictly confidentialand be used only for academic purpose.
Your few minutes of time will help me in a great way.
Naazla Fatima
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Personal details :
(a).Name:-
(b). Age:- 20-30 [ ] 31-40 [ ] 41-50 [ ] 51-60 [ ] 60 above [ ]
Please tick ()
(c). Gender : Male [ ] Female [ ]
(d). Marital Status : Married [ ] single [ ]
1. Do you invest ?
Yes [ ] No [ ]
2. what kind of investment do you prefer ?
a. Saving account [ ] b. Fixed deposits [ ] c. Insurance [ ] d. Gold/ Silver [ ]
e. Mutual Fund [ ] f. Post Office-NSC, etc [ ] g. Shares/Debentures [ ] h. Real state [ ]
3. While investing your money, which factor will you prefer?
a. Liquidity [ ] b. Low Risk [ ] c. High Return [ ] d. Companies reputation [ ]
4. Are you aware about Mutual Funds and their operations?
a. Yes [ ] b. No [ ]
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5. If yes, how did you know about Mutual Fund?
a. Advertisement [ ] b. Banks [ ] c. Financial Advisors [ ]
6. Have you ever invested in Mutual Fund?
a. Yes [ ] b.No [ ]
7. If not invested in Mutual Fund then why?
a. High risk [ ] b. Not aware [ ] c. Not any specific reason [ ]
8. where do you find yourself as a mutual fund investor ?
a. Long time investor[ ] b. Short time investor [ ]
9. In which time of mutual fund you like to invest?
a. Private [ ] b. Public [ ] c. both [ ]
10. In which mutual fund have you invested ?
a. SBI [ ] b. ICICI [ ] c. Kotak [ ] d. UTI [ ] e. HDFC [ ] f. RELIANCE [ ]
g. OTHERS [ ]
12. IF YOU HAVE INVESTED IN SBI THEN
i. why did you invest in SBI mutual fund ?
a. Because it is related to state bank [ ]
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b. High return [ ]
F c. Brokers advice [ ]
13. If you have not invested in SBI then why ?
a. not aware [ ] b. Already invested [ ] c. Less return [ ]
d. No specific reason [ ]
14. How would you like to receive the returns every year?
a. Dividend payout [ ] b. Dividend re-investment [ ]
c. Growth in NAV [ ]
THANK YOU
BIBLIOGRAPHY
WWW.SBIMF.COM
WWW.GOOGLE.COM
WWW. WIKIPEDIA.COM
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WWW.SHAREMARKET.COM
WWW.MUTUALFUNDSINDIA.COM
http://www.sharemarket.com/http://www.mutualfundsindia.com/http://www.sharemarket.com/http://www.mutualfundsindia.com/