shuvankar das

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A

PROJECT REPORT

ON

SBI MUTUAL FUNDS

Project submitted in partial fulfillment of the

Requirement for the award of the degree of

BACHELOR OF BUSINESS ADMINISTRATION

Affiliated to MADURAI KAMRAJ UNIVERSITY

BY

SHUVANKAR DAS

ENROLLMENT NO :

Under the Esteemed guidance of

MD.MUSTAQUE ALI

IIAS (INTERNATIONAL INSTITUTE OF ADVANCE

STUDIES)

DAGAPUR,SILIGURI DIS-DARJEELING

20010-2011



ACKNOWLEDGEMENT

The successful completion of any task would be

incomplete without greeting those who made it

possible and who guidance and encouragement made

out the effort success.

I take this opportunity to thank whole-heartedly and

with a deep sense of gratitude. I would like to express

my sincere thanks to all those who have endeavored to

extend their utmost cooperation and unyielding

support to help us to prepare PROJECT WORK on SBI

MUTUAL FUNDS

I am greatly indebted to our guide and the Head of the

Department MD MUSTAQUE ALI for those seen

interest, invaluable guidance and inspiration duringtheentire course of this PROJECT WORK



CONCEPTS OF MUTUAL FUND

A mutual fund is a Professionally managed form of

collective investment that pools money from manyinvestors and invest in stocks,bonds,short term money

market instrument and/or other securities.

In mutual funds, the fund manager, who is also known

as the portfolio manager, trades the underlying

securities realizing capital gain or losses, and collects

the dividend or interest income.

The investment proceeds are then passed along to

individual investors. The value of mutual funds, known

as NAV per share, is calculated daily based on the total

value of fund dividend by number of shares currently

issued and outstanding.

The flow chart below describes the working of mutual

fund.



TYPES OF MUTUAL FUND SCHEMES:

Wide variety of mutual fund schemes exist to cater to the

needs such as financial position, risk tolerance and returnexpectations etc.

y Close ended schemes: It has a set of number of shares

issued to public through initial public offering.

y Open ended schemes: They are operated by mutual

fund house which raise money from shareholders and

invest in a group of assets.

y Equity mutual funds: They are also known stock mutual

funds. They invest pool amount of money in stock of

public companies.

y Balanced mutual fund: They are also known as hybrid

mutual funds. It is a type of mutual fund that buy acombination of common stocks, preferred stocks, bonds

and short term bonds.

y Growth mutual fund: They are those mutual funds that

aim to achieve capital appreciation by investing in

growth stocks.

y No load fund: They can be classified into two types. One

is load and another is no load mutual funds.



Advantages of mutual funds:

The advantages of investing in a mutual funds are:-

Professional management Diversification

Convenient administration

Return potential

Low costs

Liquidity

Transparency

Flexibility

Choice of schemes

Tax benefits

Well regulated



Drawbacks of Investing in mutual

funds:-

Mutual funds have their drawbacks and may not

be everyone:

No Guarantees: No investment is risk free. If

the entire stock market declines in value, the

value of mutual fund shares will go down aswell, no matter how balanced the portfolio.

Investors encounter fewer risks when they

invest in mutual funds than when they buy

sell stocks on their own.

Fees and commissions: All funds charge

administrative fees to cover their day-to-day

expenses.

Taxes: During a typical year, most actively

managed mutual funds sell anywhere from 20

to 70 percent of the securities in their

portfolio.

Management risk: When you invest in a

mutual fund, you depend on the fundsmanager to make the right decisions

regarding the funds portfolio.



SYSTEMATIC INVESTMENT PLAN (SIP)

The systematic Investment plan is a simple and time

honoured investment strategy for accumulation of wealth in

a disciplined manner over long term period. The plan aims at

a better future for its investors as an SIP investor gets good

rate of return compared to a one time investor.

What exactly an SIP is?

It is an Investment option that is presently available only with

mutual funds. The other Investment option comparable to

SIPs is the recurring deposit schemes from post office and

banks. Basically, under an SIP option an investor commits

making a regular investment in a particular mutual

fund/deposit.

A specific amount can be invested for a continuous period at

regular internals under this plan.

SIP is similar to a regular saving schemes like a recurring

deposit. It is a method of investing a fixed sum regularly in a

mutual funds.

It allows the investor to buy units on a given date everymonth. The investor decides the amount and also mutual

fund schemes.



BENEFITS OF SYSTEMATIC INVESTMENT

PLAN:

Power of compounding: An investor has two option-

y To invest as and when surplus funds are available.

y To accumulate these smaller savings and to invest at

yearly interval.

Rupee cost averaging:-

Timing the market consistency is a difficult task. Rupee

cost averaging is an automatic market timing

mechanism that eliminates the need to time ones

investments. Here one need not worry about what share

prices or interest are headed as investment of a regular

sum is done at regular intervals; with fewer units being

bought in a declining market and more units in a rising

markets.

Convenience:-

SIP can be operated by simply providing post dated

cheques with the completed enrolment form or givenECS Instruction. SIP facility is available in the monthly

income plan, child benefit plan, balanced fund, Equity

fund, Tax saving fund, Growth fund etc.



RESEARCH METHODOLOGY

Research problem:-

Expanding needs and proliferation of financial products are

making it difficult for individuals to invest without planning.

Most are aware that planning is critical, yet dont have time or

expertise to develop a plan and therefore proper marketing of

the financial products comes un picture.

Research design:-

This project is more of an exploratory research with more of

qualitative analysis than quantitative. The data collection method for

this project begins with the finding a sample of the population. The

population for this project is entire region of Siliguri.

Objective of the study:-

1. To identify scheme preference of the investor.

2. To identify the profile of the investors.

3. To assess the investor regarding investment in mutual funds.

4. To understand the saving avenue.

5. To learn how to effectively handle the customer.

6. To know about the financial product of mutual fund.

Hyphothesis:-There exist a potential growth in the wealth

management industry and thus this project authenticated the

feasibility of financial advisor in the market.



Data collection methods and

Instruments:-

The data for this study was collected from a

convenience sample of invest in capital market

frequently. For this purpose a well structured

questionnaire was drafted from a pre-tested one using a

small sample of respondents.

The final questionnaire was administrated to the sampleselected and on the basis of this selected sample the

study was conducted.

Primary data was collected though field work and

telephonic interview.

The secondary datas were collected from company

guide and the other sources like internet, journal,

magazine and newspaper.

Sample Design:-

1. Sample unit:- Sample units are the investors like

business man, people working in pvt sector, govt service and

others.

2. Sample size:- The sample size for the project is 50.

3. Sampling technique:- Sample means selection of

respondents from the database. For the sample

determination of the field study, random or probability.



LIMITATION OF THE STUDY

This study makes no claim as to its infallibility. But all thesame, the major limitations of the study need to be

mentioned in order to assess the level of accuracy of its

findings.

The limitation need to be identified in order to be

determined the potential of the information obtained,

to be converted into strategy.

The major limitation of the study as perceived during

the time of survey are:-

y The study was restricted to 50 respondents. Due to

this variation in the data collection is not there. Itmeans the variation in the population is too low.

y The study was confined to Siliguri, hence doesnt

claim to present a representative picture of the

entire investors of the world or the country due to

obvious constraints like accessibility and delicacy of

the issues involved.

y The perception of investor regarding financial

products is varying from one place to another.

y It doesnt help in overall decision making. Partial

decision on specific issues without proper timing.



Summary and Conclusion

It was a great experience working with this project. It gave

me simple scope to learn and grow. This project not only

helped me to know about the different financial products

that are prevailing in the market, but also to know about the

various customers perception regarding this products.

During the survey it was found that Indian Investors are very

much aware of the aspects such as return or benefits from

the particular financial product but are not fully aware of the

risks and problems involved in that particular investors are

proned to all sorts of risks and will not be in a position to

enjoy the returns and benefits they expect. The introduction

of varied products has increased the scope of the financial

sector to a very large extent. Even though these product have

been targeted towards urban market as well as rural market

in India, the rural markets have remained largely untapped.

Therefore, it can be suggested that the investor must gain

proper knowledge about the product before investing. It is

also the responsility of the companies to understand the

customer needs or objectives and reach them effectively

with more transparency.



Appendix

I am going to do a people perception regarding investment in mutual

fund and other risk free investment schemes. I would be grateful to

you if you spare a few minute to participate in it.

NAME:

ADDRESS:

SEX: MALE FEMALE

AGE:

OCCUPATION. PLEASE TICK ( )

Govt.

Service

Pvt. Service Business Agriculture Others

ANNUAL INCOME: PLEASE TICK ( )

Upto Rs

10000

Rs 10001 to

15000

Rs 15000 to

20000

Rs 20001 to

30000

Rs 30001

and above

1. WHAT DO YOU NORMALLY ASSOCIATE THE WORD RISK WITH ?

a) DANGER b) UNCERTAINITY c) OPPURTUNITY

2. AFTER YOU HAVE MADE AN INVESTMENT HOW DO YOU FEEL?

a) VERY WORRIED

b) SOMEWHAT WORRIED

c) SOMEWHAT SATISFIED

d) VERY SATISFIED



3. DO YOU INVEST IN SBI MUTUAL FUND? PLEASE TICK ( )

a. YES b. NO

c. NOT DECIDED d. ALREADY DONE

4. WHAT IS THE HORIZON OF YOURS INVESTMENT IN YEARS? PLEASE

TICK ( )

ONE THREE FIVE TEN

YEAR YEAR YEAR YEAR

5. PREFERED MUTUAL FUND COMPANYNTO INVEST? PLEASE TICK ( )

a. RELIANCE b. SBI c. HDFC d. OTHERS

6. WHEN YOU INVEST IN SBI MUTUAL FUND WHICH MODE OF

INVESTMENT WILL YOU PREFER? PLEASE TICK ( )

a. ONE TIME INVESTMENT b. SYSTEMATIC INVESTMENT

PLAN

7. WHAT IS YOUR PREFERENCE IN SBI MUTUAL FUND?PLEASE TICK ( )

a. EQUITY b. INCOME

c. SIP d. BALANCED FUND

8. WHICH TYPE OF MUTUAL FUND DO YOU PREFER?

a. OPEN ENDED SCHEMES b. CLOSE ENDED SCHEMES

9. DO YOU GET INFLUENCED BY THE RETURNS GIVEN BY A FUND OR

BY THE CURRENT NAV OF A FUND? PLEASE TICK ( )



a. BY RETURN b. BY NAV c. BOTH

10. HOW WOULD YOU LIKE TO RECIEVE THE RETURNS EVERY YEAR?

PLEASE TICK ( )

a. DIVIDEND

PAYOUT

b. DIVIDEND RE-

INVESTMENT

c. GROWTH IN NAV



Bibliography

Sl. No Authorsname

Title of thebook

Publisher Edition/yearof the

publication

1. Arnauld AA Investment

trust

explained

Wood head

Folker Ltd

1985

2. Barua, S.K.

Verma

Master

share,A

bonaza forlarge

investor

Vikalpa 1991

3. Gupta, O.P.

and Sehgal

Investment

performance

of mutual

funds

Tata mc

Graw hill

publication

1977

4. Haslem, J.A. Investors

guide to

mutual funds

Prentice Hall

International

1988

5. Kothari C.R Research

Methodology

New Age

International

Pvt ltd

2nd

Edition

6. Sathapathy

MD

Financial and

management

accounting

2nd

revised

Edition

7. Sharan V Internationalfinancial

management

Prentice HallInternational

3rd edition

8. Jain Sumit financial

management

Taxmann 1st

Edition



Magazine and journals

1.Chakroborty Manas, Capital ideas, Business World, Feb 2007.

2.Rustagi Hemant, Indian Mutual Fund Industry, The Analyst, Jan

2007

3.Fama E.F., Component of Investment performance, journal of

finance (June).

Web-directories

1.www.google.com

2. www.investopedia.com

3. www.the hindubusinessline.com

4. www.sbimf.com

5. www.wikipedia.org

6.www.indiabizclub.com



DATA INTERPRETATION AND ANALYSIS

TO understand the investment priorities of the investors the survey

was made on 50 investors.

1. What do you normally associate the word risk with?

OPTION RESPONDENTS PERCENTAGE

Danger 13 24

Uncertainity 23 36

Opportunity 15 40

From the survey made, it was found that most investors take risk as

uncertainity.



2.After you have made an investment how do you feel?

OPTIONS RESPONDENTS PERCENTAGE

Very worried 11 22

Somewhat worried 19 38

Somewhat satisfied 15 30

Very satisfied 5 10

It was found that most of the investors are somewhat worried

after they have made an investment because of the risk

involved in it.



2. Do you invest in sbi mutual fund?


Yes 27 54

No 23 46

It was found from the survey that most of the people like to invest in

sbi mutual funds which shows that people are ready to take risk.



4. What is the horizon of yours investment?


One 9 18

Three 28 46

Five 7 14

Ten 6 12

It was found from the survey that most investors atleast want

to invest for three years but not more than that.They want

huge return in short span of time.



5. Prefered mutual fund company to invest ?


Reliance 16 32

SBI 18 36

HDFC 11 22

Others 4 10

It was found that most investors prefer to invest in Reliance because

of high NAV.



7. When you invest in SBI mutual fund which mode of

investment will you prefer?

It was found that most of the investors prefer to invest in SIP as they

dont need to invest a lump sum amount.


One time 18 36

SIP 32 64



8. What is your preference in mutual funds?


Equity 10 20

SIP 26 52

Income 11 22

Balance 3 6

It is clear from the above figures that people like to invest in

SIP than any other kinds of funds.



8.Which type of mutual fund do you prefer?


Open ended

scheme

18 36

Close ended

scheme

32 64



From the above findings it is clear that investors prefer close

ended scheme.

9. Do you get influenced by the return given by the fund or by

the current NAV of the fund?


By return 13 26

By NAV 22 44

Both 15 30



It was found in the survey that 44percentage of the investors get

attracted by the NAV of the fund. So when the NAV of the fund is

high then it can attract more investors.

10. How would you like to receive the returns every years?


Div-payout 8 16

Div-reinvestment 33 66

Growth in NAV 9 18



More than 66 percentage of the people want to go for

dividend reinvestment option which shows the investors are

highly interested in investment.

About the SBI MUTUAL FUND

SBI Mutual Fund is one of the largest mutual funds in the

country with an investor base of over 5.4 million withover 20

years of experience in fund management, SBI Mutual fund

brings forward its expertise in consistently delivering value

to its investors.

SBI Mutual Fund under State Bank Of India and Societies

General 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.

There many types of funds in SBI Mutual funds:-

1.Equity schemes:-

Magnum Comma Fund

Magnum Equity Fund

Magnum Global Fund

Magnum Midcap Fund

Magnum Multiple Fund

Magnum Multiple Plus 1993

Magnum Sector Fund Umbrella- Contra Fund

Magnum Taxgain Schemes

2.Debt Schemes:-

Magnum Childrens Benefit Plan

Magnum Income Fund

Magnum Monthly Income Plan

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