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Company Profile

Company Profile SBI Funds Management Pvt. Ltd. is one of the leading fund houses in the country with an investor base of over 4.6 million and over ! years of rich e"#erience in fund management consistently delivering value to its investors. SBI Funds Management Pvt. Ltd. is a $oint venture between %&he State Ban' of India one of India%s largest ban'ing enter#rises( and Society )eneral *sset Management +France,( one of the world%s leading fund management com#anies that manages over -S. /!! Billion worldwide. &oday the fund house manages over 0s 1/!! cores of assets and has a diverse #rofile of investors actively #ar'ing their investments across 26 active schemes. In ! years of o#eration( the fund has launched 21 schemes and successfully redeemed 3/ of them( and in the #rocess( has rewarded our investors with consistent returns. Schemes of the Mutual Fund have time after time out#erformed benchmar' indices( honored us with 3/ awards of #erformance and have emerged as the #referred investment for millions of investors. &he trust re#osed on us by over 4.6 million investors is a genuine tribute to our e"#ertise in fund management. SBI Funds Management Pvt. Ltd. serves its vast family of investors through a networ' of over 32! #oints of acce#tance( 1 Investor Service 4enters( 46 Investor Service 5es's and /6 5istrict 6rgani7ers.SBI Mutual is the first ban'8s#onsored fund to launch an offshore fund 9 0esurgent India 6##ortunities Fund.


INTRODUCTION TO MUTUAL FUND * Mutual Fund is a trust that #ools the savings of a number of investors who share a common financial goal. &he money thus collected is invested by the fund manager in different ty#es of securities de#ending u#on the ob$ective of the scheme.&hese could range from shares to debentures to money mar'et instruments. &he income earned in these investments and the ca#ital a##reciation reali7ed by the scheme is shared by its unit holders in #ro#ortion to the number of units owned by them. &hus a Mutual Fund is the most suitable investment for the common man as it offers an o##ortunity to invest in a diversified( #rofessionally managed #ortfolio at a relatively low cost. *nybody with an invest able sur#lus of a few thousand ru#ees can invest in Mutual Funds. :ach Mutual Fund scheme has a defined investment ob$ective and strategy.

* mutual fund is the ideal investment vehicle for today;s com#le" and modern financial scenario. Mar'ets for e<uity shares( bonds and other fi"ed income instruments( real estate( derivatives and other assets have become mature and information driven. Price changes in these assets are driven by global events occurring in faraway #laces. * ty#ical individual is unli'ely to have the 'nowledge( s'ills( inclination and time to 'ee# trac' of events( understand their im#lications and act s#eedily.

* mutual fund is answer to all these situations. It a##oints #rofessionally <ualified and e"#erienced staff that manages each of these functions on a

fulltime basis. &he large #ool of money collected in the fund allows it to hire such staff at a very low cost to each investor. In fact( the mutual fund vehicle e"#loits economies of scale in all three areas 9research( investment and transaction #rocessing.

* draft offer document is to be #re#ared at the time of launching the fund. &y#ically( it #re s#ecifies the investment ob$ective of the fund( the ris' associated( the cost involved in the #rocess and the broad rules for entry into and e"it from the fund and other areas of o#eration. In India( as in most countries( these s#onsors need a##roval from a regulator( S:BI in our case. S:BI loo's at trac' records of the s#onsor and its financial strength in granting a##roval to the fund for commencing o#erations. * s#onsor then hires an asset management com#any to invest the funds according to the investment ob$ective. It also hires another entity to be the custodian of the assets of the fund and #erha#s a third one to handle registry wor' for the unit holders of the fund. In the Indian conte"t( the s#onsors #romote the *sset Management 4om#any also( in which it holds a ma$ority sta'e. In many cases a s#onsor can hold a 3!!= sta'e in the *sset Management 4om#any +*M4,. :.g. Birla )lobal Finance is the s#onsor of the Birla Sun Life *sset Management 4om#any Ltd.( which has floated different mutual funds schemes and also acts as an asset manager for the funds collected under the schemes. *s #er S:BI regulations( mutual funds can offer guaranteed returns for a ma"imum #eriod of one year. In case returns are guaranteed( the name of the

guarantor and how the guarantee would be honored is re<uired to be disclosed in the offer document. Investments in securities are s#read across a wide cross8section of industries and sectors and thus the ris' is reduced. 5iversification reduces the ris' because all stoc's may not move in the same direction in the same #ro#ortion at the same time. Mutual fund issues units to the investors in accordance with <uantum of money invested by them. Investors of mutual funds are 'nown as unit holders. THE CONCEPT OF MUTUAL FUND IN DETAIL

* mutual fund uses the money collected from investors to buy those assets which are s#ecifically #ermitted by its stated investment ob$ective. &hus( an e<uity fund would buy e<uity assets 9 ordinary shares( #reference shares( warrants etc. * bond fund would buy debt instruments such as debentures( bonds or government securities. It is these assets which are owned by the investors in the same #ro#ortion as their contribution bears to the total contributions of all investors #ut together.

*ny change in the value of the investments made into ca#ital mar'et instruments +such as shares( debentures etc, is reflected in the >et *sset ?alue +>*?, of the scheme. >*? is defined as the mar'et value of the Mutual Fund scheme%s assets net of its liabilities. >*? of a scheme is calculated by dividing the mar'et value of scheme%s assets by the total number of units issued to the investors.

* Mutual Fund is an investment tool that allows small investors access to a well8diversified #ortfolio of e<uities( bonds and other securities. :ach shareholder #artici#ates in the gain or loss of the fund. -nits are issued and can be redeemed as needed. &he funds >et *sset value +>*?, is determined each day.

@hen an investor subscribes to a mutual fund( he or she buys a #art of the assets or the #ool of funds that are outstanding at that time. It is no different from buying AsharesB of $oint stoc' 4om#any( in which case the #urchase ma'es the investor a #art owner of the com#any and its assets. Cowever( whether the investor gets fund shares or units is only a matter of legal distinction.

* Mutual Fund is a trust that #ools the savings of a number of investors who share a common financial goal. &he money thus collected is then invested in ca#ital mar'et instruments such as shares( debentures and other securities. &he income earned through these investments and the ca#ital a##reciation reali7ed is shared by its unit holders in #ro#ortion to the number of units owned by them. &hus Mutual fund is most suitable investment for the common man as it offers an o##ortunity to invest in a diversified( #rofessionally managed bas'et of securities at a relatively low cost. MUTUAL FUND OPERATION FLO CHART

From the above chart ( it can be observed that how the money from the investors flow and they get returns out of it. @ith a small amount of fund( investors #ool their money with the funds managers. &a'ing into consideration the mar'et strategy the funds managers invest this #ool of

money into reliable securities. @ith u#s and downs in mar'et returns are generated and they are #assed on to the investors. &he above cycle should be very clear and also effective. &he fund manager while investing on behalf of investors ta'es into consideration various factors li'e time( ris'( return( etc. so that he can ma'e #ro#er investment decision.

!"# Ad$anta%e& and di&ad$anta%e& of mutual fund& ' AD(ANTA)E* OF MUTUAL FUND Professional management Portfolio 5ivercification 0eduction D 5iversification of 0is' Li<uidity Fle"ibility E 4onvenience 0eduction in &ransaction cost Safety of regulated environment 4hoice of schemes &rans#arency


>o control over 4ost in the Cands of an Investor >o tailor8made Portfolios Managing a Portfolio Funds 5ifficulty in selecting a Suitable Fund Scheme

HI*TOR+ OF THE INDIAN MUTUAL FUND INDU*TR+ &he mutual fund industry in India started in 3F62 with the formation of -nit &rust of India( at the initiative of the )overnment of India and 0eserve Ban'. &hough the growth was slow( but it accelerated from the year 3F1G when non8-&I #layers entered the Industry. In the #ast decade( Indian mutual fund industry had seen a dramatic im#rovement( both <ualities wise as well as <uantity wise. Before( the mono#oly of the mar'et had seen an ending #haseH the *ssets -nder Management +*-M, was 0s6G billion. &he #rivate sector entry to the fund family raised the *um to 0s. 4G! billion in March 3FF2 and till *#ril !!4H it reached the height if 0s. 3/4! billion. &he Mutual Fund Industry is obviously growing at a tremendous s#ace with the mutual fund industry can be broadly #ut into four #hases according to the develo#ment of the sector. :ach #hase is briefly described as under. Fir&t P,a&e - !./#012 -nit &rust of India +-&I, was established on 3F62 by an *ct of Parliament by the 0eserve Ban' of India and functioned under the

0egulatory and administrative control of the 0eserve Ban' of India. In 3FG1 -&I was de8lin'ed from the 0BI and the Industrial 5evelo#ment Ban' of India +I5BI, too' over the regulatory and administrative control in #lace of 0BI. &he first scheme launched by -&I was -nit Scheme 3F64. *t the end of 3F11 -&I had 0s.6(G!! crores of assets under management. *econd P,a&e - !.120!..3 4Entry of Pu5lic *ector Fund&6 3F1G mar'ed the entry of non8 -&I( #ublic sector mutual funds set u# by #ublic sector ban's and Life Insurance 4or#oration of India +LI4, and )eneral Insurance 4or#oration of India +)I4,. SBI Mutual Fund was the first non8 -&I Mutual Fund established in Iune 3F1G followed by 4anban' Mutual Fund +5ec 1G,( Pun$ab >ational Ban' Mutual Fund +*ug 1F,( Indian Ban' Mutual Fund +>ov 1F,( Ban' of India +Iun F!,( Ban' of Baroda Mutual Fund +6ct F ,. LI4 established its mutual fund in Iune 3F1F while )I4 had set u# its mutual fund in 5ecember 3FF!.*t the end of 3FF2( the mutual fund industry had assets under management of 0s.4G(!!4 crores. T,ird P,a&e - !..307883 4Entry of Pri$ate *ector Fund&6 3FF2 was the year in which the first Mutual Fund 0egulations came into being( under which all mutual funds( e"ce#t -&I were to be registered and governed. &he erstwhile Jothari Pioneer +now merged with Fran'lin &em#leton, was the first #rivate sector mutual fund registered in Iuly 3FF2.

&he 3FF2 S:BI +Mutual Fund, 0egulations were substituted by a more com#rehensive and revised Mutual Fund 0egulations in 3FF6. &he industry now functions under the S:BI +Mutual Fund, 0egulations 3FF6. *s at the end of Ianuary !!2( there were 22 mutual funds with total assets of 0s. 3( 3(1!/ crores.

Fourt, P,a&e - &ince Fe5ruary 7883 In February !!2( following the re#eal of the -nit &rust of India *ct 3F62 -&I was bifurcated into two se#arate entities. 6ne is the S#ecified -nderta'ing of the -nit &rust of India with assets under management of 0s. F(12/ crores as at the end of Ianuary !!2( re#resenting broadly( the assets of -S 64 scheme( assured return and certain other schemes &he second is the -&I Mutual Fund Ltd( s#onsored by SBI( P>B( B6B and LI4. It is registered with S:BI and functions under the Mutual Fund 0egulations. consolidation and growth. *s at the end of Se#tember( !!4( there were F funds( which manage assets of 0s.3/23!1 crores under 4 3 schemes.


Mutual fund& can 5e cla&&ified a& follo9'

:a&ed on t,eir &tructure'

Open0ended fund&' Investors can buy and sell the units from the fund( at any #oint of time.

Clo&e0ended fund&' &hese funds raise money from investors only once. &herefore( after the offer #eriod( fresh investments can not be made into the fund. If the fund is listed on a stoc's e"change the units can be traded li'e stoc's +:.g.( Morgan Stanley )rowth Fund,. 0ecently( most of the >ew Fund 6ffers of close8ended funds #rovided li<uidity window on a #eriodic basis such as monthly or wee'ly. 0edem#tion of units can be made during s#ecified intervals. &herefore( such funds have relatively low li<uidity.

:a&ed on t,eir in$e&tment o5;ecti$e' A6 E<uity fund&K &hese funds invest in e<uities and e<uity related instruments. @ith fluctuating share #rices( such funds show volatile #erformance( even losses. Cowever( short term fluctuations in the mar'et( generally smoothens out in the long term( thereby offering higher returns at relatively lower volatility. *t the same time( such funds can yield great ca#ital a##reciation as( historically( e<uities have out#erformed all asset classes in the long term. Cence( investment in e<uity funds should be considered for a #eriod of at least 28/ years. It can be further classified asK i6 Inde= fund&8 In this case a 'ey stoc' mar'et inde"( li'e BS: Sense" or >ifty is trac'ed. &heir #ortfolio mirrors the

benchmar' inde" both in terms of com#osition and individual stoc' weightages. ii6 E<uity di$er&ified fund&0 3!!= of the ca#ital is invested in e<uities s#reading across different sectors and stoc's. iii>6 Di$idend yield fund&0 it is similar to the e<uity diversified funds e"ce#t that they invest in com#anies offering high dividend yields. i$6 T,ematic fund&0 Invest 3!!= of the assets in sectors which are related through some theme. e.g. 8*n infrastructure fund invests in #ower( construction( cements sectors etc. $6 *ector fund&0 Invest 3!!= of the ca#ital in a s#ecific sector. e.g. 8 * ban'ing sector fund will invest in ban'ing stoc's. $i6 EL**8 :<uity Lin'ed Saving Scheme #rovides ta" benefit to the investors. :6 :alanced fund' &heir investment #ortfolio includes both debt and e<uity. *s a result( on the ris'8return ladder( they fall between e<uity and debt funds. Balanced funds are the ideal mutual funds vehicle for investors who #refer s#reading their ris' across various instruments. Following are balanced funds classesK i6 De5t0oriented fund& 0Investment below 6/= in e<uities.

ii6 E<uity0oriented fund& 0Invest at least 6/= in e<uities( remaining in debt. C6 De5t fund' &hey invest only in debt instruments( and are a good o#tion for investors averse to idea of ta'ing ris' associated with e<uities. &herefore( they invest e"clusively in fi"ed8income instruments li'e bonds( debentures( )overnment of India securitiesH and money mar'et instruments such as certificates of de#osit +45,( commercial #a#er +4P, and call money. Put your money into any of these debt funds de#ending on your investment hori7on and needs. i6 Li<uid fund&0 &hese funds invest 3!!= in money mar'et instruments( a large #ortion being invested in call money mar'et. ii6 )ilt fund& *T0 &hey invest 3!!= of their #ortfolio in government securities of and &8bills. iii6 Floatin% rate fund& 0 Invest in short8term debt #a#ers. Floaters invest in debt instruments which have variable cou#on rate. i$6 Ar5itra%e fund0 &hey generate income through arbitrage o##ortunities due to mis8#ricing between cash mar'et and derivatives mar'et. Funds are allocated to e<uities( derivatives and money mar'ets. Cigher #ro#ortion +around G/=, is #ut in money mar'ets( in the absence of arbitrage o##ortunities. $6 )ilt fund& LT0 &hey invest 3!!= of their #ortfolio in long8 term government securities.

$i6 Income fund& LT0 &y#ically( such funds invest a ma$or #ortion of the #ortfolio in long8term debt #a#ers. $ii6 MIP&0 Monthly Income Plans have an e"#osure of G!=8 F!= to debt and an e"#osure of 3!=82!= to e<uities. $iii6 FMP&0 fi"ed monthly #lans invest in debt #a#ers whose maturity is in line with that of the fund.

IN(E*TMENT *TRATE)IE* !" *y&tematic In$e&tment Plan' under this a fi"ed sum is invested each month on a fi"ed date of a month. Payment is made through #ost dated che<ues or direct debit facilities. &he investor gets fewer units when the >*? is high and more units when the >*? is low. &his is called as the benefit of 0u#ee 4ost *veraging +04*, 7" *y&tematic Tran&fer Plan' under this an investor invest in debt oriented fund and give instructions to transfer a fi"ed sum( at a fi"ed interval( to an e<uity scheme of the same mutual fund. 3" *y&tematic it,dra9al Plan' if someone wishes to withdraw from

a mutual fund then he can withdraw a fi"ed amount each month.


Mutual funds offer benefits( which are too significant to miss out. *ny investment has to be $udged on the yardstic' of return( li<uidity and safety. 4onvenience and ta" efficiency are the other benchmar's relevant in mutual fund investment. In the wonderful game of financial safety and returns are the tows o##osite goals and investors cannot be nearer to both at the same time. &he cru" of mutual fund investing is averaging the ris'.

Many investors #ossibly don;t 'now that considering returns alone( many mutual funds have out#erformed a host of other investment #roducts. Mutual funds have historically delivered yields averaging between F= to /= over a medium to long time frame. &he duration is im#ortant because li'e wise( mutual funds return taste bitter with the #assage of time. Investors should be #re#ared to loc' in their investments #referably for 2 years in an income fund and / years in an e<uity funds. Li<uid funds of course( generate returns even in a short term.

MUTUAL FUND RI*?'0 Mutual funds face ris's based on the investments they hold. For e"am#le( a bond fund faces interest rate ris' and income ris'. Bond values are inversely related to interest rates. If interest rates go u#( bond values will go down and vice versa. Bond income is also affected by the changes in interest rates. Bond yields are directly related to interest rates falling as interest rates fall and rising as interest rates.

Similarly( a sector stoc' fund is at ris' that its #rice will decline due to develo#ments in its industry. * stoc' fund that invests across many industries is more sheltered from this ris' defined as industry ris'. Followings are glossary of some ris's to consider when investing in mutual fundsK8

COUNTR+ RI*? '0 &he #ossibility that #olitical events +a war( national election,( financial #roblems +rising inflation( government default,( or natural disasters will wea'en a country;s economy and cause investments in that country to decline.

INCOME RI*? '0 &he #ossibility that #olitical events +a war( national election,( financial #roblems +rising inflation( government default,( or natural disasters will wea'en a country;s economy and cause investments in that country to decline.

MAR?ET RI*? '0 &he #ossibility that stoc' fund or bond fund #rices overall will decline over short or even e"tended #eriods. Stoc' and bond mar'ets tend to

move in cycles( with #eriods when #rices rise and other #eriods when #rices fall.


:<uity Fund Balance Fund MIP Income Fund

Short &erm Fund Li<uid Fund

&his gra#h shows ris' and return im#act on various mutual funds. &here is a direct relationshi# between ris's and return( i.e. schemes with higher ris' also have #otential to #rovide higher returns.

PRODUCT* OF *:I MUTUAL FUND' E<uity &c,eme& &he investments of these schemes will #redominantly be in the stoc' mar'ets and endeavor will be to #rovide investors the o##ortunity to benefit from the higher returns which stoc' mar'ets can #rovide. Cowever they are also e"#osed to the volatility and attendant ris's of stoc' mar'ets and hence should be chosen only by such investors who have high ris' ta'ing ca#acities and are willing to thin' long term. :<uity Funds include diversified :<uity Funds( Sectoral Funds and Inde" Funds. 5iversified :<uity Funds invest in various stoc's across different sectors while sectoral funds which are s#eciali7ed :<uity Funds restrict their investments only to shares of a #articular sector and hence( are ris'ier than 5iversified :<uity Funds. Inde" Funds invest

#assively only in the stoc's of a #articular inde" and the #erformance of such funds move with the movements of the inde". Magnum 46MM* Fund Magnum :<uity Fund Magnum )lobal Fund Magnum Inde" Fund Magnum Midca# Fund Magnum Multica# Fund Magnum Multi#lier #lus 3FF2 Magnum Sectoral Funds -mbrella MSF-8 :merging Business Fund MSF-8 I& Fund MSF-8 Pharma Fund MSF-8 4ontra Fund MSF-8 FM4) Fund SBI *rbitrage 6##ortunities Fund SBI Blue chi# Fund SBI Infrastructure Fund 8 Series I

De5t &c,eme&

SBI Magnum &a"gain Scheme 3FF2 SBI 6>: India Fund SBI &*L *5?*>&*): F->5 8 S:0I:S I

5ebt Funds invest only in debt instruments such as 4or#orate Bonds( )overnment Securities and Money Mar'et instruments either com#letely avoiding any investments in the stoc' mar'ets as in Income Funds or )ilt Funds or having a small e"#osure to e<uities as in Monthly Income Plans or 4hildren%s Plan. Cence they are safer than e<uity funds. *t the same time the e"#ected returns from debt funds would be lower. Such investments are advisable for the ris'8averse investor and as a #art of the investment #ortfolio for other investors.

Magnum 4hildren;s benefit Plan Magnum )ilt Fund Magnum Income Fund Magnum Insta 4ash Fund Magnum Income Fund8 Floating 0ate Plan Magnum Income Plus Fund Magnum Insta 4ash Fund 8Li<uid Floater Plan

Magnum Monthly Income Plan Magnum Monthly Income Plan 8 Floater Magnum >0I Investment Fund SBI Premier Li<uid Fund

:ALANCED *CHEME* Magnum Balanced Fund invests in a mi" of e<uity and debt investments. Cence they are less ris'y than e<uity funds( but at the same time #rovide commensurately lower returns. &hey #rovide a good investment o##ortunity to investors who do not wish to be com#letely e"#osed to e<uity mar'ets( but is loo'ing for higher returns than those #rovided by debt funds.

Magnum Balanced Fund


Some of the main com#etitors of SBI Mutual Fund in Patna are as FollowsK i. I4I4I Mutual Fund ii. 0eliance Mutual Fund iii. -&I Mutual Fund iv. Birla Sun Life Mutual Fund v. Jota' Mutual Fund vi. C5F4 Mutual Fund vii. Sundaram Mutual Fund viii. LI4 Mutual Fund i". Princi#al ". Fran'lin &em#leton

Re$ie9 of Literature

In dec !! Meli&&a :" @aco5y had studied about the Mutual Fund Beyond a Sub#rime 4risisK &he 0ole of 5elin<uency Management. &hey studied that Public investment in and #romotion of ownershi# and the mortgage mar'et often relies on three $ustifications to su##lement shelter goalsK to build hold wealth and economic self8sufficiency( to generate #ositive social8#sychological states( and to develo# stable neighborhoods and communities. ownershi# and mortgage obligations do not inherently further these ob$ectives( however( and sometimes undermine them. &he most visible triggers of the recent surge in sub#rime delin<uency have #roduced calls for emergency foreclosure avoidance interventions +as well as front8end regulatory fi"es,. @hatever their merit( I contend that a system of mortgage delin<uency management should be an enduring com#onent of housing #olicy. Furtherance of housing and hold #olicy ob$ectives hinges in #art on the conditions under which ownershi# is obtained( maintained( leveraged( and 8 in some situations 8 e"ited. )iven that high leverage or trigger events such as $ob loss and medical #roblems #lay significant roles in mortgage delin<uency inde#endent of loan terms( better origination #ractices cannot eliminate the need for delin<uency management. 6ne function of this brief essay is to identify an e"isting rough framewor' for managing delin<uency. Legal scholarshi# should no longer discuss mortgage enforcement #rimarily in terms of foreclosure law and instead should include other debtor8creditor laws such as ban'ru#tcy( industry loss mitigation efforts( and third8#arty interventions such as delin<uency counseling. In terms of analy7ing this framewor'( it is tem#ting to focus on its im#act on mortgage credit cost and access or on the absolute number of homes tem#orarily saved( but my #ro#osed analysis is based on whether the system honors and furthers the goals of wealth building( #ositive social #sychological states( and community develo#ment. Because those ends are not ine"orably lin'ed to ownershi# generally or owning a #articular home( a system of delin<uency management that honors these ob$ectives should strive to #rovide fair( trans#arent( humane( and #redictable strategies for home e"it as well as for home retention. *lthough more em#irical research is needed( this essay starts the #rocess of analy7ing mortgage delin<uency management tools in the #ro#osed fashion.


O:@ECTI(E* OF THE *TUD+ a. &o find out the Preference of the investors for *sset Management of com#any. b. &o 'now the #reference of the #ortfolios. c. &o 'now why one has invested in SBI Mutual Funds. d. &o find out the most #reference channel. e. &o find out what should do to boost Mutual F und Industry.

*cope of T,e *tudy

*cope of t,e &tudy * big boom has been witnessed in Mutual Fund Industry in recent times. * large number of new #layers have entered the mar'et and trying to gain mar'et share in this ra#idly im#roving mar'et. &he study will hel# to 'now the #references of the customers( which com#any( #ortfolio( mode of investment( o#tion for getting return and so on they #refer. &his #ro$ect re#ort may hel# the com#any to ma'e further #lanning and strategy.

Re&earc, Met,odolo%y


0esearch methodology is a way to systematically show the research #roblem. It may be understood as a science of studying how research is done scientifically. It is necessary for the researcher to 'now not only the research methods but also the methodology. &his Section includes the methodology which includes. &he research design( ob$ectives of study( sco#e of study along with research methodology and limitations of study etc.

Data &ource&' 0esearch is totally based on #rimary data. Secondary data can be used only for the reference. 0esearch has been done by #rimary data collection( and #rimary data has been collected by interacting with various #eo#le. &he secondary data has been collected through various $ournals and websites. Duration of *tudy' &he study was carried out for a #eriod of two months

*amplin%'0 *amplin% procedure'

&he sam#le was selected of them who are the customersDvisitors of State Ban' if India( Boring 4anal 0oad Branch( irres#ective of them being investors or not or availing the services or not. It was also collected through #ersonal visits to #ersons( by formal and informal tal's and through filling u# the <uestionnaire #re#ared. &he data has been analy7ed by using mathematicalDStatistical tool.

*ample &iAe'

&he sam#le si7e of my #ro$ect is limited to !! #eo#le only. 6ut of which only 3 ! #eo#le had invested in Mutual Fund. 6ther 1! #eo#le did not have invested in Mutual Fund.

*ample de&i%n'

5ata has been #resented with the hel# of bar gra#h( #ie charts( line gra#hs etc.


Limitation' &his study also includes some limitations which have been discussed as followsK

&hough everyone used to be very co8o#erative but every detail was unable to be disclosed to me as the officials has to maintain secrets of the com#any. It is difficult to cover all the function of the com#any. Because of the limited time #eriod( the survey work was conducted in the Delhi region and the sam#le si7e was ta'en as !! res#ondents only. Some of the #ersons were not so res#onsive. Some res#ondents were reluctant to divulge #ersonal information which can affect the validity of all res#onses. Possibility of error in data collection because many of investors may have not given actual answers of my <uestionnaire.

5ata *nalysis E Inter#retation

ANAL+*I* B INTERPRETATION OF THE DATA !" 4a6 A%e di&tri5ution of t,e In$e&tor& of Del,i

Age Group No. of n!estors

30 1"

31-35 1#

36-40 30

41-45 "4

46-50 "0

50 16

l 35 a u t u 30 M n i 25 d e t d s 20 n e u v F n i 15 s r o t 10 s e v n I 5 0

30 24 18 12 20 16







Age group o t!e Investors


*ccording to this chart out of 3 ! Mutual Fund investors of 5elhi the most are in the age grou# of 2684! yrs. i.e. /=( the second most investors are in the age grou# of 4384/yrs i.e. != and the least investors are in the age grou# of below 2! yrs. 456" Educational Cualification of in$e&tor& of Del,i

Educational Qualification Graduate$ %ost Graduate &nder Graduate 'thers )otal

Number of Investors ## "5 ( 1"0


6ut of 3 ! Mutual Fund investors G3= of the investors in 5elhi are )raduateDPost )raduate( 2= are -nder )raduate and 6= are others +under CS4,. c). Occupation of the investors of Delhi

Go!t. *er!ice %!t. *er!ice +usiness Agriculture 'thers

No. of Investors
30 45 35 4 6


In 6ccu#ation grou# out of 3 ! investors( 21= are Pvt. :m#loyees( /= are Businessman( F= are )ovt. :m#loyees( 2= are in *griculture and /= are in others.

4d6" Mont,ly Family Income of t,e In$e&tor& of Del,i Income Group

10,000 10,001-15,000 15,001-"0,000 "0,001-30,000 30,000

No. of Investors

1" "# 43 3"


In the Income )rou# of the investors of 5elhi out of 3 ! investors( 26= investors that is the ma"imum investors are in the monthly income grou# 0s. !(!!3 to 0s. 2!(!!!( Second one i.e. G= investors are in the monthly income grou# of more than 0s. 2!(!!! and the minimum investors i.e. 4= are in the monthly income grou# of below 0s. 3!(!!! 476 In$e&tor& in$e&ted in different Dind of in$e&tment&" -ind of n!est.ents
*a!ing A$0

2i3ed deposits nsurance 4utual 2und %ost office 5N*06 *hares$De7entur es Gold$*il!er /eal 8state

No. of /espondents 115 14# 15" 1"0 (5 50 30 65

Interpret ation' From the above gra#h it can be inferred that out of !! #eo#le( FG./= #eo#le have invested in Saving *Dc( G6= in Insurance( G4= in Fi"ed 5e#osits( 6!= in Mutual Fund( 2G./= in Post 6ffice( /= in Shares or 5ebentures( 3/= in )oldDSilver and 2 ./= in 0eal :state. 3" Preference of factor& 9,ile in$e&tin%
2actors 5a6 9i:uidit; 576 9ow /isk 5c6 <igh /eturn 5d6 )rust

No. of /espondents






6ut of !! Peo#le( 2 = Peo#le #refer to invest where there is Cigh 0eturn( 2!= #refer to invest where there is Low 0is'( != #refer easy Li<uidity and 31= #refer &rust #" A9arene&& a5out Mutual Fund and it& Operation&

/esponse No. of /espondents

=es 135

No 65


From the above chart it is inferred that 6G= Peo#le are aware of Mutual Fund and its o#erations and 22= are not aware of Mutual Fund and its o#erations. E" *ource of information for cu&tomer& a5out Mutual Fund
Source of information Ad!ertise.ent %eer Group +ank 2inancial Ad!isors No. of Respondents 1# "5 30 6"

Interpretation' From the above chart it can be inferred that the Financial *dvisor is the most im#ortant source of information about Mutual Fund. 6ut of 32/ 0es#ondents( 46= 'now about Mutual fund &hrough

Financial *dvisor(

= through Ban'( 3F= through Peer )rou#

and 32= through *dvertisement. 6. In$e&tor& in$e&ted in Mutual Fund

Response =8* N' )otal No. of Respondents 1"0 #0 "00


6ut of !! Peo#le( 6!= have invested in Mutual Fund and 4!= do not have invested in Mutual Fund.

2" Rea&on for not in$e&ted in Mutual Fund

Reason Not Aware <igher /isk Not an; *pecific /eason No. of Respondents

6 !"


6ut of 1! #eo#le( who have not invested in Mutual Fund( 13= are not aware of Mutual Fund( 32= said there is li'ely to be higher ris' and 6= do not have any s#ecific reason. 1" In$e&tor& in$e&ted in different A&&et& Mana%ement Co" 4AMC6 Name of #$%
*+ 42 &) <D20 /eliance 0 0 %rudential -otak 'thers

No. of Investors 55 (5 30 (5 56 45 (0

Interpretation'In Patna most of the Investors #referred -&I and 0eliance Mutual Fund. 6ut of 3 ! Investors 6 ./= have invested in

each of them( only 46= have invested in SBIMF( 4G= in I4I4I Prudential( 2G./= in Jota' and /= in C5F4. ." Rea&on for in$e&ted in *:IMF /eason
Associated with *+ +etter /eturn Agents Ad!ice

No. of /espondents
35 5 15

Interpretation' 6ut of // investors of SBIMF 64= have invested because of its association with Brand SBI( G= invested on *gent;s *dvice( F= invested because of better return.

!8" Rea&on for not in$e&ted in *:IMF Reason

Not Aware 9ess /eturn Agent>s Ad!ice

No. of Respondents
"5 1# ""

Interpretation' 6ut of 6/ #eo#le who have not invested in SBIMF( 21= were not aware with SBIMF( 1= do not have invested due to less return and 24= due to *gent;s *dvice.

!!" Preference of In$e&tor& for future in$e&tment in Mutual Fund Name of #$%
*+ 42 &) <D20 /eliance 0 0 %rudential -otak 'thers

No. of Investors (6 45 35 #" #0 60 (5

Interpretation' 6ut of 3 ! investors( 61= #refer to invest in 0eliance( 6G= in I4I4I Prudential( 62= in SBIMF( 6 ./= in 6thers( /!= in Jota'( 2G./= in -&I and F= in C5F4 Mutual Fund.

!7" C,annel Preferred 5y t,e In$e&tor& for Mutual Fund In$e&tment

0hannel No. of /espondents 2inancial Ad!isor (" +ank 1# A40 30

Interpretation' 6ut of 3 ! Investors 6!= #referred to invest through Financial *dvisors( /= through *M4 and 3/= through Ban'.

!3" Mode of In$e&tment Preferred 5y t,e In$e&tor&

4ode of n!est.ent No. of /espondents

'ne ti.e n!est.ent (#

*;ste.atic n!est.ent %lan 5* %6 4"

Interpretation' 6ut of 3 ! Investors 6/= #referred 6ne time Investment and 2/ = Preferred through Systematic Investment Plan.

!#" Preferred Portfolio& 5y t,e In$e&tor&

8:uit; De7t +alanced

No. of Investors
56 "0 44

Interpretation' From the above gra#h 46= #referred :<uity Portfolio( 2G= #referred Balance and 3G= #referred 5ebt #ortfolio

!E" Option for %ettin% Return Preferred 5y t,e In$e&tor&


Di!idend %a;out

Di!idend /ein!est.ent 10


No. of /espondents



Interpretation' From the above gra#h G3= #referred )rowth 6#tion( 3= #referred 5ividend Payout and 1= #referred 5ividend 0einvestment 6#tion.

!/" Preference of In$e&tor& 9,et,er to in$e&t in *ectoral Fund&

Response 'es No

No. of Respondents ( )

Interpretation' 6ut of 3 ! investors( GF= investors do not #refer to invest in Sectoral Fund because there is ma"imum ris' and 3= #refer to invest in Sectoral Fund.



&he most vital #roblem s#otted is of ignorance. Investors should be made aware of the benefits. >obody will invest until and unless he is fully convinced. Investors should be made to reali7e 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 o#tion could offer. But most of the #eo#le are not even aware of what actually a mutual fund isM &hey only see it as $ust another investment o#tion. So the advisors should try to change their mindsets. &he advisors should target for more and more young investors. Noung investors as well as #ersons at the height of their career would li'e to go for advisors due to lac' of e"#ertise and time. Mutual Fund 4om#any needs to give the training of the Individual Financial *dvisors about the FundDScheme and its ob$ective( because they are the main source to influence the investors. Before ma'ing any investment Financial *dvisors should first en<uire about the ris' tolerance of the investorsDcustomers( their need and time +how long they want to invest,. By considering these three things they can ta'e the customers into consideration.

Nounger #eo#le aged under 2/ will be a 'ey new customer grou# into the future( so ma'ing greater efforts with younger customers who show some interest in investing should #ay off.

4ustomers with graduate level education are easier to sell to and there is a large unta##ed mar'et there. &o succeed however( advisors must #rovide sound advice and high <uality.

Systematic Investment Plan +SIP, is one the innovative #roducts launched by *ssets Management com#anies very recently in the industry. SIP is easy for monthly salaried #erson as it #rovides the facility of do the investment in :MI. &hough most of the #ros#ects and #otential investors are not aware about the SIP. &here is a large sco#e for the com#anies to ta# the salaried #ersons.


Findin%& In 5elhi in the *ge )rou# of 2684! years were more in numbers. &he second most Investors were in the age grou# of 4384/ years and the least were in the age grou# of below 2! years. In 5elhi most of the Investors were )raduate or Post )raduate and below CS4 there were very few in numbers. In 6ccu#ation grou# most of the Investors were )ovt. em#loyees( the second most Investors were Private em#loyees and the least were associated with *griculture. In family Income grou#( between 0s. !(!!38 2!(!!! were more in numbers( the second most were in the Income grou# of more than 0s.2!(!!! and the least were in the grou# of below 0s. 3!(!!!. *bout all the 0es#ondents had a Saving *Dc in Ban'( G6= Invested in Fi"ed 5e#osits( 6nly 6!= 0es#ondents invested in Mutual fund. Mostly 0es#ondents #referred Cigh 0eturn while investment( the second most #referred Low 0is' then li<uidity and the least #referred &rust.

6nly 6G= 0es#ondents were aware about Mutual fund and its o#erations and 22= were not.


Conclu&ion 0unning a successful Mutual Fund re<uires com#lete understanding of the #eculiarities of the Indian Stoc' Mar'et and also the #syche of the small investors. &his study has made an attem#t to understand the financial behavior of Mutual Fund investors in connection with the #references of Brand +*M4,( Products( 4hannels etc. I observed that many of #eo#le have fear of Mutual Fund. &hey thin' their money will not be secure in Mutual Fund. &hey need the 'nowledge of Mutual Fund and its related terms. Many of #eo#le do not have invested in mutual fund due to lac' of awareness although they have money to invest. *s the awareness and income is growing the number of mutual fund investors are also growing. ABrandB #lays im#ortant role for the investment. Peo#le invest in those 4om#anies where they have faith or they are well 'nown with them. &here are many *M4s in 5elhi but only some are #erforming well due to Brand awareness. Some *M4s are not #erforming well although some of the schemes of them are giving good return because of not awareness about

Brand. 0eliance( -&I( SBIMF( I4I4I etc. they are well 'nown Brand( and their *ssets -nder Management is larger than others whose Brand name are not well 'nown li'e Princi#le( Sunderam( etc.



:OO?* Mi&ra M"NF478816F GPrinciples and Practices of Insurance;. c,and and Co" )upta" C":"" GHuman Resource Management *ultan c,and B *on& RaoF( * PF Human Resource Management Text and Cases E: *ITE*




5ear SirD madam

I am doing BB* from ))SIP -niversity. I m #re#aring a #ro$ect on A *TUD+ ON MUTUAL FUND" For this I have designed a Ouestionnaire to 'now your views. #lease fill the given as #er your thin'ing and e"#eriences with this. I will be than'ful to you for this. !" Per&onal Detail&'

+a,. >ameK8

+b,. *ddK 8


+c,. *geK8

+d,. OualificationK8


-nder )raduate


+e,. 6ccu#ation. Pl tic' +P,

)ovt. Ser

Pvt. Ser




+g,. @hat is your monthly family income a##ro"imatelyM Pl tic' +P,.

-# to 0s.3!(!!!

0s. 3!(!!3 to 0s. 3/(!!3 to 0s. !(!!3 to 0s. 2!(!!3 3/!!! !(!!! 2!(!!! and above

7" @hat 'ind of investments you have made so farM Pl tic' +P,. *ll a##licable.

a. Saving account e. Post 6ffice8 >S4( etc

b. Fi"ed de#osits f.

c. Insurance g. )oldD

d. Mutual Fund h. 0eal :state

SharesD5ebentures Silver

3" @hile investing your money( which factor will you #referM

. +a, Li<uidity +b, Low 0is' +c, Cigh 0eturn +d, &rust

#" *re you aware about Mutual Funds and their o#erationsM Pl tic' +P,. Nes >o

E" If yes( how did you 'now about Mutual FundM

a. *dvertisement

b. Peer )rou#

c. Ban's

d. Financial *dvisors

/" Cave you ever invested in Mutual FundM Pl tic' +P,. Nes >o

2" If not invested in Mutual Fund then whyM

+a, >ot aware of MF +b, Cigher ris' +c, >ot any s#ecific reason 1. If yesF in which Mutual Fund you have investedM Pl. tic' +P,. *ll a##licable.


b. -&I

c. C5F4

d. 0eliance

e. Jota'

f. 6ther. s#ecify

." If invested in SBIMF( you do so because +Pl. tic' +P,( all a##licable,.

a. SBIMF is associated with State Ban' of India. b. &hey have a record of giving good returns year after year. c. *gent; *dvice

!8" If >6& invested in SBIMF( you do so because +Pl. tic' +P, all a##licable,.

a. Nou are not aware of SBIMF. b. SBIMF gives less return com#ared to the others. c. *gent; *dvice

!!. @hen you #lan to invest your money in asset management co. which *M4 will you #referM

*ssets Management 4o. a. SBIMF b. -&I c. 0eliance d. C5F4 e. Jota' f. I4I4I

!7. @hich 4hannel will you #refer while investing in Mutual FundH

+a, Financial *dvisor

+b, Ban'

+c, *M4

!3" @hen you invest in Mutual Funds which mode of investment will you #referM Pl. tic' +P,.

a. 6ne &ime Investment

b. Systematic Investment Plan +SIP,

!#" @hen you want to invest which ty#e of funds would you chooseM

a. Caving only debt #ortfolio

b. Caving debt E e<uity #ortfolio.

c. 6nly e<uity #ortfolio.

!E" Cow would you li'e to receive the returns every yearM Pl. tic' +P,.

a. 5ividend #ayout

b. 5ividend re8 investment

c. )rowth in >*?

!/" Instead of general Mutual Funds( would you li'e to invest in sectorial fundsM Please tic' +P,. Nes >o