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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 $oint venture
between %&he State Ban' of India one of India%s largest ban'ing
enter#rises( and Society )eneral *sset Management +France,( one of the
world%s leading fund management com#anies that manages over -S.
/!! Billion worldwide.
&oday the fund house manages over 0s 1/!! cores of assets and has a
diverse #rofile of investors actively #ar'ing their investments across 26
active schemes. In ! years of o#eration( the fund has launched 21
schemes and successfully redeemed 3/ of them( and in the #rocess( has
rewarded our investors with consistent returns. Schemes of the Mutual
Fund have time after time out#erformed benchmar' indices( honored us
with 3/ awards of #erformance and have emerged as the #referred
investment for millions of investors. &he trust re#osed on us by over 4.6
million investors is a genuine tribute to our e"#ertise in fund
management.
SBI Funds Management Pvt. Ltd. serves its vast family of investors
through a networ' of over 32! #oints of acce#tance( 1 Investor Service
4enters( 46 Investor Service 5es's and /6 5istrict 6rgani7ers. SBI
Mutual is the first ban'8s#onsored fund to launch an offshore fund 9
0esurgent India 6##ortunities Fund.
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INTRODUCTION TO MUTUAL FUND
* Mutual Fund is a trust that #ools the savings of a number of investors who
share a common financial goal. &he money thus collected is invested by the
fund manager in different ty#es of securities de#ending u#on the ob$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$ective
and strategy.
* mutual fund is the ideal investment vehicle for today;s com#le" and
modern financial scenario. Mar'ets for e<uity shares( bonds and other fi"ed
income instruments( real estate( derivatives and other assets have become
mature and information driven. Price changes in these assets are driven by
global events occurring in faraway #laces. * ty#ical individual is unli'ely to
have the 'nowledge( s'ills( inclination and time to 'ee# trac' of events(
understand their im#lications and act s#eedily.
* mutual fund is answer to all these situations. It a##oints #rofessionally
<ualified and e"#erienced staff that manages each of these functions on a
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fulltime basis. &he large #ool of money collected in the fund allows it to hire
such staff at a very low cost to each investor. In fact( the mutual fund vehicle
e"#loits economies of scale in all three areas 9research( investment and
transaction #rocessing.
* draft offer document is to be #re#ared at the time of launching the fund.
&y#ically( it #re s#ecifies the investment ob$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
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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


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* 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.
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@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.
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* 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 FLOW 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
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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.
1.4 A!an"a#e$ an i$a!an"a#e$ of m%"%al f%n$ &
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
DI)AD'ANTA(E OF MUTUAL FUND
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>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$" P+a$e , 1-.4/01
-nit &rust of India +-&I, was established on 3F62 by an *ct of
Parliament by the 0eserve Ban' of India and functioned under the
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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.
)e2on P+a$e , 1-01/1--3 4En"ry of P%5li2 )e2"or F%n$6
3F1G mar'ed the entry of non8 -&I( #ublic sector mutual funds set u# by
#ublic sector ban's and Life Insurance 4or#oration of India +LI4, and
)eneral Insurance 4or#oration of India +)I4,. SBI Mutual Fund was the
first non8 -&I Mutual Fund established in Iune 3F1G followed by
4anban' Mutual Fund +5ec 1G,( Pun$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+ir P+a$e , 1--3/7883 4En"ry of Pri!a"e )e2"or F%n$6
3FF2 was the year in which the first Mutual Fund 0egulations came into
being( under which all mutual funds( e"ce#t -&I were to be registered and
governed. &he erstwhile Jothari Pioneer +now merged with Fran'lin
&em#leton, was the first #rivate sector mutual fund registered in Iuly
3FF2.
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&he 3FF2 S:BI +Mutual Fund, 0egulations were substituted by a more
com#rehensive and revised Mutual Fund 0egulations in 3FF6. &he
industry now functions under the S:BI +Mutual Fund, 0egulations 3FF6.
*s at the end of Ianuary !!2( there were 22 mutual funds with total
assets of 0s. 3(3(1!/ crores.
Fo%r"+ P+a$e , $in2e Fe5r%ary 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 43
schemes.
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1.. CATE(ORIE) OF MUTUAL FUND&

M%"%al f%n$ 2an 5e 2la$$ifie a$ follo9&
:a$e on "+eir $"r%2"%re&
Open/ene f%n$& Investors can buy and sell the units from the fund(
at any #oint of time.
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Clo$e/ene f%n$& &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$e on "+eir in!e$"men" o5;e2"i!e&
A6 E<%i"y f%n$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 Ine= f%n$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<%i"y i!er$ifie f%n$/ 3!!= of the ca#ital is invested in
e<uities s#reading across different sectors and stoc's.
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iii>6 Di!ien yiel f%n$/ 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+ema"i2 f%n$/ 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 )e2"or f%n$/ 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 :alan2e f%n& &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 De5"/orien"e f%n$ /Investment below 6/= in e<uities.
ii6 E<%i"y/orien"e f%n$ /Invest at least 6/= in e<uities(
remaining in debt.
C6 De5" f%n& &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
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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<%i f%n$/ &hese funds invest 3!!= in money mar'et
instruments( a large #ortion being invested in call money mar'et.
ii6 (il" f%n$ )T/ &hey invest 3!!= of their #ortfolio in
government securities of and &8bills.
iii6 Floa"in# ra"e f%n$ / Invest in short8term debt #a#ers.
Floaters invest in debt instruments which have variable cou#on
rate.
i!6 Ar5i"ra#e f%n/ &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 (il" f%n$ LT/ &hey invest 3!!= of their #ortfolio in long8
term government securities.
!i6 In2ome f%n$ LT/ &y#ically( such funds invest a ma$or
#ortion of the #ortfolio in long8term debt #a#ers.
!ii6 MIP$/ Monthly Income Plans have an e"#osure of G!=8
F!= to debt and an e"#osure of 3!=82!= to e<uities.
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!iii6 FMP$/ fi"ed monthly #lans invest in debt #a#ers whose
maturity is in line with that of the fund.
IN'E)TMENT )TRATE(IE)
1. )y$"ema"i2 In!e$"men" 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$"ema"i2 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$"ema"i2 Wi"+ra9al Plan& if someone wishes to withdraw from
a mutual fund then he can withdraw a fi"ed amount each month.
WH* IN'E)TOR NEED) MUTUAL FUND &/
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
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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)?&/
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'.
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Followings are glossary of some ris's to consider when investing in
mutual fundsK8
COUNTR* RI)? &/
&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)? &/
&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)? &/
&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.
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RI)? RETURN REWRAD IN MUTUAL FUND
Li<uid Fund
Short &erm
Fund
Income Fund
MIP
Balance Fund
:<uity 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.
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PRODUCT) OF ):I MUTUAL FUND&
E<%i"y $2+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
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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
SBI Magnum &a"gain Scheme 3FF2
SBI 6>: India Fund
SBI &*L *5?*>&*): F->5 8 S:0I:S I
De5" $2+eme$
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
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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
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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
COMPETITOR) OF ):I MUTUAL 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
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i". Princi#al
". Fran'lin &em#leton
In dec !! Meli$$a :. @a2o5y 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 $ob loss and medical #roblems #lay significant roles in
mortgage delin<uency inde#endent of loan terms( better origination #ractices
cannot eliminate the need for delin<uency management.
6ne function of this brief essay is to identify an e"isting rough framewor' for
managing delin<uency. Legal scholarshi# should no longer discuss mortgage
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enforcement #rimarily in terms of foreclosure law and instead should include
other debtor8creditor laws such as ban'ru#tcy( industry loss mitigation efforts(
and third8#arty interventions such as delin<uency counseling. In terms of
analy7ing this framewor'( it is tem#ting to focus on its im#act on mortgage
credit cost and access or on the absolute number of homes tem#orarily saved(
but my #ro#osed analysis is based on whether the system honors and furthers
the goals of wealth building( #ositive social #sychological states( and
community develo#ment. Because those ends are not ine"orably lin'ed to
ownershi# generally or owning a #articular home( a system of delin<uency
management that honors these ob$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.
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)2ope of "+e $"%y
* big boom has been witnessed in Mutual Fund Industry in recent times.
* large number of new #layers have entered the mar'et and trying to
gain mar'et share in this ra#idly im#roving mar'et.
&he study will hel# to 'now the #references of the customers( which
com#any( #ortfolio( mode of investment( o#tion for getting return and so
on they #refer. &his #ro$ect re#ort may hel# the com#any to ma'e further
#lanning and strategy.
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RE)EARCH METHODOLO(*&/
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.
Da"a $o%r2e$&
0esearch is totally based on #rimary data. Secondary data can be used
only for the reference. 0esearch has been done by #rimary data
27
collection( and #rimary data has been collected by interacting with
various #eo#le. &he secondary data has been collected through various
$ournals and websites.
D%ra"ion of )"%y&
&he study was carried out for a #eriod of two months
)amplin#&/
)amplin# pro2e%re&
&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 $iAe&
28
&he sam#le si7e of my #ro$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 e$i#n&
5ata has been #resented with the hel# of bar gra#h( #ie charts( line
gra#hs etc.
Limi"a"ion&
&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.
29
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.
ANAL*)I) B INTERPRETATION OF THE DATA
1. 4a6 A#e i$"ri5%"ion of "+e In!e$"or$ of Del+i
Age Group 30 3135 3640 4145 4650 50
!o" o#
$n%estors
12 18 30 24 20 16
30
12
18
30
24
20
16
0
5
10
15
20
25
30
35
<=30 31-35 36-40 41-45 46-50 >50
I
n
v
e
s
t
o
r
s
i
n
v
e
s
t
e
d
i
n
M
u
t
u
a
l
F
u
n
d
Age group o t!e Investors
In"erpre"a"ion&
*ccording to this chart out of 3! Mutual Fund investors of 5elhi the
most are in the age grou# of 2684! yrs. i.e. /=( the second most
investors are in the age grou# of 4384/yrs i.e. != and the least
investors are in the age grou# of below 2! yrs.
456. E%2a"ional C%alifi2a"ion of in!e$"or$ of Del+i
Educational Qualification Number of Investors
Graduate& 'ost Graduate 88
(nder Graduate 25
)thers 7
*otal 120
31

In"erpre"a"ion&
32
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,.
26. O22%pa"ion of "+e in!e$"or$ of Del+i
"

In"erpre"a"ion&
33
Occupation No. of Investors
Go%t" +er%ice 30
'%t" +er%ice 45
,usiness 35
Agriculture 4
)thers 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.
46. Mon"+ly Family In2ome of "+e In!e$"or$ of Del+i
Income Group No. of Investors
10-000 5
10-00115-000
12
15-00120-000
28
20-00130-000
43
30-000
32
In"erpre"a"ion&
In the Income )rou# of the investors of 5elhi out of 3!
investors( 26= investors that is the ma"imum investors are in
34
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$"or$ in!e$"e in ifferen" Din of in!e$"men"$.
.ind o# $n%est/ents !o" o#
0espondents
+a%ing A&1
195
2i3ed deposits 148
$nsurance 152
4utual 2und 120
'ost o##ice 5!+16 75
+hares&De7entur
es
50
Gold&+il%er 30
0eal 8state 65
195
148
152
12
!5
5
"
#5
1 2 "
No.of $espondents
%inds of Investment
In"erpre"a"ion& From the above gra#h it can be inferred that out of
!! #eo#le( FG./= #eo#le have invested in Saving *Dc( G6= in
35
Insurance( G4= in Fi"ed 5e#osits( 6!= in Mutual Fund( 2G./= in
Post 6ffice( /= in Shares or 5ebentures( 3/= in )oldDSilver and
2./= in 0eal :state.
3. Preferen2e of fa2"or$ 9+ile in!e$"in#
2actors 5a6 9i:uidit; 576 9ow 0isk 5c6 <igh 0eturn 5d6 *rust
!o" o#
0espondents
40 60 64 36
36

In"erpre"a"ion&
37
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
4. A9arene$$ a5o%" M%"%al F%n an i"$ Opera"ion$

In"erpre"a"ion&
38
0esponse =es !o
!o" o# 0espondents 135 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. )o%r2e of informa"ion for 2%$"omer$ a5o%" M%"%al F%n
&ource of information No. of $espondents
Ad%ertise/ent 18
'eer Group 25
,ank 30
2inancial Ad%isors 62
In"erpre"a"ion&
From the above chart it can be inferred that the Financial *dvisor is
the most im#ortant source of information about Mutual Fund. 6ut
of 32/ 0es#ondents( 46= 'now about Mutual fund &hrough
39
Financial *dvisor( = through Ban'( 3F= through Peer )rou#
and 32= through *dvertisement.
6. In!e$"or$ in!e$"e in M%"%al F%n
$esponse No. of $espondents
=8+ 120
!) 80
*otal 200
In"erpre"a"ion&
40
6ut of !! Peo#le( 6!= have invested in Mutual Fund and 4!= do
not have invested in Mutual Fund.
1. Rea$on for no" in!e$"e in M%"%al F%n
$eason No. of $espondents
!ot Aware
#5
<igher 0isk
5
!ot an; +peci#ic 0eason
1
In"erpre"a"ion&
6ut of 1! #eo#le( who have not invested in Mutual Fund( 13= are not
aware of Mutual Fund( 32= said there is li'ely to be higher ris' and
6= do not have any s#ecific reason.
41
0. In!e$"or$ in!e$"e in ifferen" A$$e"$ Mana#emen" Co. 4AMC6
Name of '() No. of Investors
+,$42
55
(*$
75
<D21
30
0eliance
75
$1$1$ 'rudential
56
.otak
45
)thers
70

In"erpre"a"ion&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$on for in!e$"e in ):IMF
42
0eason !o" o#
0espondents
Associated with +,$ 35
,etter 0eturn 5
Agents Ad%ice 15
In"erpre"a"ion&
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
18. Rea$on for no" in!e$"e in ):IMF
$eason No. of
43
$espondents
!ot Aware 25
9ess 0eturn 18
Agent>s Ad%ice 22
In"erpre"a"ion&
6ut of 6/ #eo#le who have not invested in SBIMF( 21= were not aware with
SBIMF( 1= do not have invested due to less return and 24= due to *gent;s
*dvice.
11. Preferen2e of In!e$"or$ for f%"%re in!e$"men" in M%"%al F%n
Name of '() No. of Investors
+,$42
76
(*$
45
44
<D21
35
0eliance
82
$1$1$ 'rudential
80
.otak
60
)thers
75

In"erpre"a"ion& 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.
17. C+annel Preferre 5y "+e In!e$"or$ for M%"%al F%n
In!e$"men"
1hannel 2inancial Ad%isor ,ank A41
!o" o# 0espondents 72 18 30
45
In"erpre"a"ion&
6ut of 3! Investors 6!= #referred to invest through Financial
*dvisors( /= through *M4 and 3/= through Ban'.
13. Moe of In!e$"men" Preferre 5y "+e In!e$"or$
4ode o# $n%est/ent )ne ti/e $n%est/ent +;ste/atic $n%est/ent 'lan 5+$'6
!o" o# 0espondents 78 42
46
In"erpre"a"ion&
6ut of 3! Investors 6/= #referred 6ne time Investment and 2/ =
Preferred through Systematic Investment Plan.
14. Preferre Por"folio$ 5y "+e In!e$"or$
*ortfolio No. of Investors
8:uit; 56
De7t 20
,alanced 44
47
In"erpre"a"ion&
From the above gra#h 46= #referred :<uity Portfolio( 2G= #referred
Balance and 3G= #referred 5ebt #ortfolio
1E. Op"ion for #e""in# Re"%rn Preferre 5y "+e In!e$"or$
)ption Di%idend 'a;out Di%idend
0ein%est/ent
Growth
!o" o#
0espondents
25 10 85
48
In"erpre"a"ion&
From the above gra#h G3= #referred )rowth 6#tion( 3= #referred
5ividend Payout and 1= #referred 5ividend 0einvestment 6#tion.
1.. Preferen2e of In!e$"or$ 9+e"+er "o in!e$" in )e2"oral F%n$
$esponse No. of $espondents
+es 25
No 95
49
In"erpre"a"ion&
6ut of 3! investors( GF= investors do not #refer to invest in Sectoral
Fund because there is ma"imum ris' and 3= #refer to invest in
Sectoral Fund.
Finin#$
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.
50
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.
RECOMMENDATION)
&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
51
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.
52
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.
53
Con2l%$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.
54

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