welcome

Contents• Introduction to the Topic• Objectives of the study• Methodology• Analysis and findings• Suggestions and conclusion• References

Project On SBI Mutual Funds

Title: A Study on Performance Analysis of SBI Magnum Tax Gain Scheme.

INTERNAL GUIDE: Mrs.Asha Jyothi Assistant Professor, Dept of MBA

EXTERNAL GUIDE: Mr. k.Thimma reddy

ISD-Head

ABOUT MUTUAL FUND

“Mutual fund is a common pool of money in which investor place their contribution that are to be invested in accordance with the stated objective. The fund belongs to all the investors depending on the proportion of his contribution to the fund.”

Tax saving scheme

SBI Magnum Tax gain scheme is an open-ended Equity Linked Savings Scheme helps the investors to save tax under 80C of Income Tax Act.

It has a lock-in period of 3 years. This fund helps investors to address two critical

issues:• Tax planning• Wealth creation

INDUSTRY PROFILE

• Year of Start/UTI Formation : 1963

• Initiated by : Govt of India/RBI• Regulated by : SEBI• First Phase : (1964-87)• Second Phase : (1987-1993)• Third Phase : (1993-2003)• Fourth Phase : (Since February

2003)

• SET UP DATE JUN-29-1987

• INCORPORATION DATE FEB-07-1992

• SPONSER STATE BANK OF INDIA

• TRUSTEE SBI MUTUAL FUND TRUSTEE COMPANY PRIVATE LIMITED

• CHAIRMAN Mr. PRATIP CHUDHRI

• CEO/MD Mr. DINESH KUMAR KHARA

• COO Mr. ARUN AGARAWAL

• NO. OF BRANCHES 161 ACROSS 27 STATES & 4 UNION TERRITORIES

• TOTAL EMPLOYEES 600

COMPANY PROFILE

Review of literature Capon et al 1992 - modern finance theory .

Purchase decisions are on the basis of investors beliefs regarding the future return and risk of those assets.

Markowitz 1959 - multi attribute framework

Where return and risk are merely two aspects of a set of attributes whose importance varies across consumers

Need for the study

• Generally most of the investors investing in mutual funds in order to avail tax benefits and also to earn returns, in this connection they would park their funds in the tax saving schemes.

• A study required to analyze the performance of SBI Tax Saving Scheme to fulfill the objectives of the investors. Hence the study has been undertaken.

• The study can helpful to the investor to predict the performance of the SBI Magnum Tax Gain Scheme.

Scope of the Study• My study is confined to only Tax saving scheme in

SBI Mutual funds.

• The study will also helpful to predict the performance of the SBI Tax Saving Schemes in future.

• Considers performance evaluation of tax saving scheme based on measures-Mean, Standard Deviation, beta, Sharpe and Treynor.

Objectives of the study

• To evaluate the Historical performance of Tax gain scheme by using different statistical models.

• To find out the Performance of Tax gain scheme with relation to Bench mark (BSE-100).

• To project the future trend of Tax gain scheme in terms of risk and return.

• To know the benefits of investing in Tax gain scheme.

Research Methodology

• The study is purely based on secondary data.• Type of Research : Descriptive Research• Method of Descriptive Research : secondary data

(quantitative manner): Observational method

• Data collection : secondary data• For secondary data collection the research instruments used are:

• Www. AMFIindia.com • www.money control .com • www.SBIMF.com

Limitations• The study has been confined to limited time period

i.e., May month only.• My study purely based on secondary data.• The study is confined to data available from fact

sheets and websites.• There is less period of time to analyze the future

performance of Tax saving scheme.• Micro level data have been considered for analyzing

the facts.

Data Analysis

TOOLS 2011 2012 2013 2014 2015

MEAN -32.9571 26.67863 0.978327 38.15333 -1.66069

STND.DEV 5.08 4.22 4.12 3.46 3.54

BETA 0.8 0.82 0.91 0.85 1.90

TREYNOR -42.1913 31.95553 0.414138 44.39143 -2.17228

SHARPE -6.60993 6.182694 0.091887 10.8574 -0.66633

2011 2012 2013 2014 2015

-40

-30

-20

-10

0

10

20

30

40

50

MEANSTND.DEV

Chart showing return and risk of SBI Tax Gain Scheme for the period 2011 to 2015

Performance of fund returns with Benchmark returns

2011 2012 2013 2014 2015

-50

-40

-30

-20

-10

0

10

20

30

40

50

R(X)R(Y)

R(X) : Benchmark returnsR(Y) : Fund returns

Interpretation• From the above table, we came to know that SBI Magnum Tax

Gain fund is performing low in 2015 compared to 2012 and 2014.

• The risk % for SBI Magnum Tax Gain Scheme is gradually decreasing from 2011 to 2014 and again it starts increasing in 2015.

• Also we can analyze that the fund performance is good for the period 2011 to 2014 based on Treynor and Sharpe ratio.

FindingsBased on different tools such as:• Mean : SBI Tax Gain Scheme is yielding high returns in the

year 2014( i.e., 38%) and low returns in the year 2011( i.e., -32%).

• Standard Deviation: SBI Tax Gain Scheme is having high risk in the year 2011 (i.e., 25.7%) and low risk in the year 2014 (i.e., 11.9%).

• Beta values: SBI Tax Gain Scheme having high risk compared to market returns in the year 2015 (i.e., 1.08%) and low risk in the year 2011 (i.e., 0.79%).

Suggestions• SBI Tax Gain fund is having high risk, so investors are

cautioned about investing in this to earn high returns. • SBI tax gain has to be revised the portfolio to increase fund

returns.

• Fund Manager should take more efforts on spreading awareness about options in ELSS as these investment instruments provides a higher return with tax saving.

• I suggest preferring ELSS scheme with SIP plan. It provides more returns and less Tax burden to the investors.

Conclusion• Mutual funds are one of the best options to invest the

hard core savings of the investors.• SBI Tax Saving Scheme is one of the best plans for

Tax payers. It is performing well but it yields low returns in 2015 compared to 2014 due to many external factors and it is having moderately high risk.

• Even though, it is the best scheme suggestible to the investors who are interesting to avail Tax benefits.

References For gathering the information to my project research the

following websites and books are referred:• www.SBIMF.com• www.moneycontrol.com• www.valueresearch.com• www.amfiindia.com• NSE historical data• Factsheets of SBI Mutual

funds• Annual reports of SBI• Records

Thank You