Submitted in partial fulfillment for the award of the degree of

Masters of Business Administration,

Punjab Technical University, Jalandhar .
(2008-10)
BY:
Swati Sabherwal, MBA 3rd Sem,
(RBIEBT).
• SBI Mutual Fund (SBI MF) is one of the largest mutual funds in the
country with an investor base of over 5.4 million.
• Over 20 years of rich experience.
• It was incorporated on 29/6/1987.
• Patronized by over 80% of the top corporate houses of the country.
• SBI Mutual Fund is a joint venture between the State Bank of India
and Société Générale Asset Management (a French company), that
manages over US$ 500 Billion worldwide.
• In twenty years of operation, the fund has launched 38 schemes and
successfully redeemed fifteen of them.
• The fund serves this vast family of investors by reaching out to them
through network of over 130 points of acceptance, 28 investor service
centers and 46 investor service desks.
 MR. ACHAL K.
GUPTA
(Chairman
& Managing
Director)

MR.
AASHISH
MR. PARIJAT MR. ANAND
WAKANKAR(V
AGRAWAL GUPTA (Head – BOARD OF
ice President
( Head – Fixed Offshore DIRECTORS
& Fund Income) funds)
Manager);He
ad Equity

•MR. PANKAJ
GUPTA (Fund MR. R.S.
Manager) MS. APARNA MR. NAVNEET SRINIVAS
MR. ASHWINI
•MR. JAYESH MR. GANTI N NIRGUDE MUNOT (Chief JAIN
K. JAIN (Chief
SHROFF(Fund MURTHY (CHIEF RISK
Manager Operating Investment (Chief
(Fund Manager) OFFICER)
•MR. VIVEK Officer) Officer) Marketing
PANDEY( Fund Officer)
Manager)
SBI Funds Management: a strong growth
Mutual funds Expertise
Parties where control exists:
Holding Company State Bank of India holds 63% of the share capital

Enterprise having significant influence Societe General Asset Management holds 37% Of
the share capital

Enterprise over which the company has control SBI Funds Management (International) Private
Limited (100% subsidiary)
EQUITY SCHEMES
• Magnum COMMA Fund
• Magnum Equity Fund
• Magnum Global Fund
• Magnum Index Fund
• Magnum Midcap Fund
• Magnum Multiplier Plus 1993
• Magnum NRI Investment Fund
• Magnum Sector Funds Umbrella
MSFU - Emerging Business Fund
MSFU – IT Fund
MSFU – Pharma Fund
MSFU – Contra Fund
MSFU – FMCG Fund

• SBI Arbitrage Opportunities Fund

• SBI Blue Chip Fund
• SBI Infrastructure Fund – Series I

• SBI Magnum Taxgain Scheme 1993

• SBI ONE India Fund
• SBI TAX ADVANTAGE FUND – SERIES I
DEBT SCHEMES

• Magnum children’s Benefit Plan

• Magnum Gilt Fund

Magnum Gilt Fund (Long Term)
Magnum Gilt Fund (Short Term)

• Magnum Income Fund

• Magnum Income Plus Fund

Magnum Income Plus Fund (Saving Plan)
Magnum Income Plus Fund (Investment Plan)

• Magnum Insta Cash Fund

• Magnum Insta Cash Fund – Liquid Floater Plan

• Magnum Institutional Income Fund

• Magnum Income Plan

• Magnum Monthly Income Plan

• Magnum NRI Investment Fund

• SBI Capital Protection Oriented Fund – Series Fund I

• SBI Debt Fund Series

SDFS 15 Months Fund

SDFS 90 Days fund
SDFS 13 Days fund
SDFS 18 Months Fund
SDFS 24 Months fund
SDFS 30 Days
SDFS 370 days
SDFS 60 Days Fund
SDFS 100 Days Fund

• SBI Short Horizon Fund

SBI Short Horizon Fund - Ultra Short Term Fund
SBI short Horizon fund - Short Term Fund
 BALANCED FUND

• Magnum Balanced Fund

EXCHANGE TRADED SCHEME

• SBI Gold Exchange Traded Scheme

 Mutual funds are not an American invention. They first was started in
the Netherlands in 1822, and the second in Scotland in the 1880's.

 The concept of mutual funds was introduced in India with the

formation of Unit Trust of India in 1963. The first scheme launched
by
UTI was the now infamous Unit Scheme 64 in 1964.

 The main reason of its poor growth is that the mutual fund industry in
India is new in the country. Large sections of Indian investors are yet to
be intellectuated with the concept.
Hence, it is the prime responsibility of all mutual fund companies, to
market the product correctly abreast of selling.
Note
Erstwhile UTI was bifurcated into UTI Mutual Fund and the Specified Undertaking of the Unit Trust of
India effective from February 2003. The Assets under management of the Specified Undertaking of the
Unit Trust of India has therefore been excluded from the total assets of the industry as a whole from
February 2003 onwards.
•To provide an opportunity for lower income groups to acquire without
much difficulty, property in the form of shares.
•To Cater mainly of the need of individual investors, whose means are
small
•To manage investors portfolio that provides regular income, growth,
Safety, liquidity, tax advantage, professional management and
diversification.
MUTUAL FUND STRUCTURE
 RISK RETURN PROFILE

More the risk more will be return. Money market mutual funds are least risky,
and sectoral funds are most risky as shown in the above diagram.
 OBJECTIVES OF THE STUDY
The objectives of this research are as follows:
 To compare the performance of midcap mutual funds of competitor companies with
SBI midcap mutual fund.
 To know the best among the funds so compared and to find out the position of SBI
midcap mutual fund among the funds so compared.
 To know the customer preference towards the compared mutual funds.
 To recommend suggestions for improvements to SBI mutual fund company for its
further growth in the mutual fund industry.

RESEARCH DESIGN
According to Clifford Woody, “research comprises defining and redefining
problems, formulating hypothesis or suggested solutions; collecting, organizing and
evaluating data; making deductions and reaching conclusions; and at last carefully
testing the conclusions to determine whether they fit the formulating hypothesis.
This research is divided in two parts:
• Performance comparison of madcap mutual funds through secondary data based
on certain parameters;
• An exploratory research based on a survey of the concerning literature. A sample
survey was conducting with the help of Scheduling Method of collecting data i.e.
personally the enumerator visited and got the questionnaires filled from the respondents.
The enumerator in this method helps the respondents in recording their answers to
various questions in the said schedules.
 RESEARCH PROBLEM

The main problem this research is to compare and analyse the performance of midcap
mutual funds of competitor firms with SBI midcap fund.

SCOPE OF THE STUDY

The scope of this study is to provide an insight into concept of mutual funds and the mutual
fund industry. It aims to provide a complete knowledge on schemes of competitor funds in
the midcap mutual funds category and their comparison with SBI along with customer
perception about the same.

SOURCES OF DATA

There are two types od data viz. primary and secondary. The primary data are those which
are collected afresh and for the first time, and thus happen to be original in character.
The secondary data, on the other hand, are those which have already been collected by
someone else and which have already been passed through the statistical process.
For this research report, primary data was collected and there was no bias on the part of the
enumerator while selecting the sample.
Secondary data was also used that is internet, brochures of firms, magazines and newspapers.
 SAMPLE SIZE
For this research, in part one, a sample size of 10 mutual fund companies including
SBI mutual fund was taken out of the population which was the whole mutual fund
industry in India
For the second part, a sample size of 100 respondents was taken out of the total
investors in who invest in midcap mutual funds in Indian mutual fund companies.

SAMPLE AREA
The sample area was Chandigarh and involved respondents coming in SBI Bank,
main branch, Sector 17, Chandigarh and the offices of mutual fund companies in
Chandigarh only.

STATISTICAL TOOLS USED

The various statistical tool used were standard deviation, data distribution tables,
graphs and pie charts. Apart from this statistical tools used for mutual funds
comparison are:

 PRICE TO EANRNINGS RATIO:

P/E (price-to-earnings ratio) tells us how much investors are willing to pay
for one rupee of that company’s earnings.
PRICE TO BOOK VALUE RATIO:

P/B (price-to-book value ratio) is used to compare a stock's market value to its book
value (book value = assets minus liabilities).
 LIMITATIONS OF THE STUDY

Following were the limitations of the study:

•Time was limited.
•The sample size of 100 is very small and more than that could not be possible.
•The study was only based on the survey of respondents in CHANDIGARH and no other
area could be undertaken for the survey due to lack of transport and time.
•This research is based on NAV (Net Asset Value) figures as on 8th July, 22nd July and 5th
August only; which changes daily.
•Only 10 companies could be compared in order to avoid complexity of data.
 SBI MAGNUM MIDCAP FUND
• Open-ended/Growth fund
• Date of Inception: April 15, 2005
• OBJECTIVE:
To provide investors with opportunities for long-term growth in capital along with the liquidity of open-
ended scheme by investing predominantly in a well diversified basket of equity stocks of Midcap companies.
Midcap companies are those companies whose market capitalization at the time of investment is lower than
the last stock in the S&P CNX Nifty Index less 20% (upper range) and above Rs.200 crore.
FUND MANAGER: Mr. Vivek Pandey
• Asset Allocation:
Instrument % of Portfolio of Plan A & B Risk Profile
Equity and equity related instruments outside Not more than 10% High
the range of Rs. 200 crores - Rs. 2000 crores
High

Equities and equity related instruments the within 65% – 100% High
range of Rs. 200 crores – Rs. 2000 crores +
(midcap companies)

Foreign Securities/ADRs/GDRs 0% - 10% High

Fixed/Floating Rate Debt instruments 0% - 30% Medium
including derivatives instruments including
derivatives
Returns Benchmark: BSE 100
RETURNS as on 31st March 2009

FUND NAME 1 Year 3 Years 5 Years Since Inception

Magnum Midcap -59.56% -19.36% N.A. -0.15%

Returns (%)
BSE 100 Returns -44.92% -10.48% N.A. 3.94%

NAV RETURN % as on 31st March 2009

10.00%
0.00%
-10.00%
-20.00%
-30.00%
-40.00%
-50.00%
-60.00%
1Year 3Years 5Years Since
Inception

MagnumMidcapReturns(%) BSE100Returns
Entry Load: N.A.
Exit Load:
Investments below Rs. 5 crore, exited before 3 years from the date of allotment - 1% * Investments below Rs. 5
crore, exited on or after 3 years from the date of allotment - NIL * Investments above Rs. 5 crore - NIL

SIP:
Rs 500/month - 12 months, Rs 1000/month - 6months, Rs 1500/quarter - 12 months
SWP
A minimum of Rs. 500 can be withdrawn every month or quarter by issuing advance instructions to the
Registrars at any time.

FUND STYLE:
GROWTH BLEND VALUE

LARGE MEDIUM SMALL

 ON THE BASIS OF NAV ( NET ASSET VALUE)

N A V C O M P A R IS O N

700
600
500
N A V a s o n 2 2 t h J u ly 2 0 0 9 ( in R s . )
400
NAV (Rs.)

N A V a s o n 8 t h J u ly 2 0 0 9 (in R s . )
300
N A V a s o n 5 t h A u g 2 0 0 9 (in R s . )
200
100
0

UTI Mid
Cap-G
Prima-G
Franklin
BSL Mid

ICICI Pru
Equity-G
India
Cap-G

STAR-G
HSBC

Emerging

Growth-G
Reliance
Midcap-G

S.M.I.L.E.
Magnum

Sundaram

Sundaram
Leaders-G
Emerging

Paribas

Paribas
Select
BNP

BNP
JM

FUND NAM E
 H IG H A N D L O W N A V

40 0
35 0
30 0
VALUE (Rs.)

25 0
20 0
15 0
10 0
50
0
B S L M id F ra n k lin HS BC IC IC I Pru JM M ag n u m R eli an ce S u n d aram S u n d aram U T I M id
C a p -G In d i a Prim a - E q u ity-G E m e rg in g E m erg in g M id ca p -G G ro w th -G B N P Pa rib asB N P Parib as C a p -G
G S T A R -G L ea d ers-G S .M .I.L .E . S e le ct
R eg -G M i d ca p
R e g -G
FUND NAM E

52 W eek s H ig h 5 2 W ee k s L o w

INTERPRETATION:
• Reliance Growth has the highest NAV i.e the Net Asset Value even in the 52 weeks comparison and the last month’s comparison and is at
number one.
• Franklin India Prima Fund is at second.
• Sundaram BNP Paribas Select Midcap Reg. is at third.
• HSBC equity at fourth position.
• Birla Sun Life Midcap Fund at fifth.
• Sundaram BNP Paribas S.M.I.L.E. Reg at sixth.
• ICICI Pru Emerging Star at seventh.
• UTI Midcap at eighth position.
• SBI Magnum Midcap at ninth and JM Emerging Leader at bottom.

But we can see growth in NAV of all funds over the selected period of comparison.
 ON THE BASIS OF RETURN
1 Y e a r R e t u r n % C o m p a r is o n

60
40
20
0
-2 0 1 -Y e a r R e tu rn (% ) a s o n 5 th A u g 0 9
-4 0 1 -Y e a r R e t u rn (% ) a s o n 2 2 n d J u ly 0 9
HSBC
Equity
RETURN %

UTI Mid
Cap
Franklin
India
Prima

Reliance
Growth
Magnum
Midcap
Birla Sun
Life Mid

Emerging
Leaders
Cap

Emerging
ICICI
Prudential
JM

Sundaram

Sundaram
Paribas

Paribas
BNP

BNP
-6 0 1 -Y e a r R e t u rn (% ) a s o n 8 t h J u ly 0 9
-8 0
-1 0 0
-1 2 0
-1 4 0
FUND NAM E

INTERPRETATION:

•High increase in 1-year returns for Franklin India Prima Fund, HSBC Equity and Sundaram BNP Paribas
S.M.I.L.E.Reg.
•Constant increase in other funds.
 3 Y e a r R e tu r n % C o m p a r is o n

30
20
10 3 -Y e a r R e t u rn (% ) a s o n 8 t h J u ly
0 3 -Y e a r R e tu rn (% ) a s o n 2 2 n d J u l
Return %

-1 0 3 -Y e a r R e tu rn (% ) a s o n 5 th A u g
HSBC
Equity

UTI Mid
Cap
India
Franklin
Prima

Growth
Reliance
Midcap
Magnum
Life Mid

-2 0
Birla Sun
Cap

ICICI
JM
Emerging
Leaders
Emerging
Prudential

Paribas
Paribas
Sundaram
Sundaram
BNP
BNP
-3 0
Fund Nam e

INTERPRETATION:

•Fall in Birla Sun Life Midcap, Franklin India Prima Fund after a sharp increase, HSBC Equity, ICICI PRU
Emerging Star, JM Emerging Leaders, Magnum Midcap, Reliance Growth and UTI Midcap.
•Increase in return of Sundaram (Both the funds).
INTERPRETATION:
•Increase in return of all the funds.
 ON THE BASIS OF PORTFOLIO

P ric e to E arn in g s & P rice to B o o k V a lu e R atio

30
25
20 P /E Ratio
Value

15
10 P /B Ratio
5
0
B irla S un F rank lin HS B C ICICI JM M agnum Relianc e S undaramS undaram UTI M id
Life M id India E quity P rudential E m erging M idc ap G rowth B NP B NP Cap
Cap P rim a E m erging Leaders P aribas P aribas
S TA R S .M .I.L.E . S elec t
Reg M idc ap
Reg
F u n d Na m e

INTERPRETATION:
•Low P/E Ratio for UTI Mid Cap, JM Emerging Leaders which meant low investor expectations from these
funds.
•Average P/E Ratio for BSL Midcap, Franklin India Prima Fund, SBI Magnum Midcap, and Sundaram BNP
Paribas Select Midcap Reg.
•High P/E Ratio for the rest of the funds which means high investor expectations from them.
High P/B Ratio for HSBC Equity, Reliance Growth and Franklin India Prima fund which mean good
overall performance of these companies.
Low P/B Ratio for JM Emerging Leaders, Magnum Midcap, UTI Midcap and Both SUNDARAM
Funds which means stock undervaluation and poor overall performance of the companies.
Medium P/B Ratio for the remaining funds.
 T u rn o ve r(% )

120
100
80
Value %

60 T u rn o ve r(% )
40
20
0
B irla S u nF ra n k lin H S B C IC IC I JM M a g n u mR e lia n c Se u n d a raSmu n d a ra mU T I M id
L ife M id In d ia E q u it y P ru d e n t iaE lm e rg in gM id c a p G ro w t h B N P BNP C ap
Cap P rim a E m e rg in gL e a d e rs P a rib a s P a rib a s
S TA R S . M . I. L . E S. e le c t
R e g M id c a p
R eg
Fund Na m e

INTERPRETATION:

•HIGHEST TURNOVER for Sundaram (both funds), Reliance Growth.

•AVERAGE TURNOVER for Magnum Midcap, Franklin India Prima, ICICI Pru Emerging Star HSBC
Equity and BSL Midcap.
•LOWEST for remaining funds.
•Reliance Growth has highest share of Assets flowed by Sundaram S.M.I.L.E and ICICI Prudential Emerging
Star respectively.
•Highest market capitalization of HSBC Equity followed by Reliance Growth.
 Birla Sun Life Mid Cap
Assets (Rs Cr.)

Franklin India Prima

HSBC Equity

ICICI Prudential
Emerging STAR
JMEmerging Leaders

Magnum Midcap

Reliance Growth

Sundaram BNP Paribas

S.M.I.L.E. Reg
Sundaram BNP Paribas
Select Midcap Reg
UTI Mid Cap

INTERPRETATION:

•Reliance Growth has highest share of Assets flowed by Sundaram S.M.I.L.E and ICICI Prudential Emerging
Star respectively.
 Market Capitalization (Rs. Cr.)
Birla Sun Life Mid Cap

Franklin India Prima

HSBC Equity

ICICI Prudential
Emerging STAR
JM Emerging Leaders

Magnum Midcap

Reliance Growth

Sundaram BNP Paribas

S.M.I.L.E. Reg
Sundaram BNP Paribas
Select Midcap Reg
UTI Mid Cap

INTERPRETATION:

Highest market capitalization of HSBC Equity followed by Reliance Growth.

 VALUE

0
10
20
30
40
50
60
Birla Sun
Life Mid
Cap
Franklin
India
Prima

HSBC
Equity
ICICI
Prudential
Emerging
STAR
JM
Emerging
Leaders
Magnum
Midcap

FUND NAM E
S t a n d a rd D e via t io n

Reliance
Growth
S ta n d a r d D e v i a ti o n Sundaram
BNP
Paribas
S.M.I.L.E.
ON THE BASIS OF RISK AND VOLATILITY

Sundaram
BNP
Paribas
Select
UTI Mid
Cap
 S h a rp e R a tio

0 .6
0 .5 0 .4 8
0 .4 0 . 4 2 0 . 4 1 0 .4
0 .3 0 .2 9
0 .2 0 .1 8 S h a rp e R a t io
VALUE

0 .1 0 . 1 3 0 . 1 3 0 .1
0
- 0 . 1 B i r l a S Fu nr a n k l i Hn S B C IC IC I J M- 0 . 1M1 a g n u Rm e l i a n Sc eu n d a Sr aumn d a r Ua mT I M i d
-0 .2
L i fe M Ini dd i a P r Ei mq au i t yP r u d e nEt ima l e r g iMn gi d c a pG r o w t h B N P B N P C a p
Cap E m e r g iLn eg a d e r s P a r i b a Ps a r i b a s
S TA R S . M . I. L S. Ee . l e c t
R e g M id c a p
FUND NAM E Reg

INTERPRETATION:

Birla Sun Life, HSBC Equity, Reliance Growth, Sundaram S.M.I.L.E and Sundaram Midcap have a better
risk- adjusted performance as compared to the other funds.
 BETA COMPARISON

1.46 1.36
1.13 1.06 1.21 1.18 1.1 1.15
1.47 1.36 1.02
0.83 1.2 1.18 1.09
1.13 1.05 1.15 1.02
0.83 1.47 1.36
1.13 1.05 1.15 1.2 1.18 1.09
VALUE 1.02 Beta on 5th Aug 09
0.83
Beta on 22nd July 09
Beta on 8th July 09
Beta on 8th July 09 Beta on 22nd July 09
Beta on 5th Aug 09

UTI Mid Cap

JM Emerging
Emerging STAR
ICICI Prudential
Birla Sun Life Mid

HSBC Equity

Reliance Growth
Magnum Midcap
Franklin India Prima

Reg BNP
Paribas S.M.I.L.E.

Paribas Select
Sundaram BNP

Midcap Reg
Leaders

Sundaram
Cap

FUND NAME

INTERPRETATION:

•The beta chart shows that JM Emerging Leaders is the most volatile fund as compared to the market whereas
HSBC Equity is the least volatile fund as compared to the market.
 A lp h a C o m p a r is o n

10
5
0
-5 B irla S u Fn ra n k lin H S B C IC IC I JM M a g n u mR e lia n c Se u n d a raSmu n d a ra Um T I M id
L ife M id In d ia E q u it y P ru d e n t Eia ml e rg in Mg id c a p G ro w t h B N P BNP Cap A lp h a
VALUE

-1 0 C a p P rim a E m e rg in Lg e a d e rs P a rib a s P a rib a s

-1 5 S TA R S . M . I. L . ES. e le c t
R e g M id c a p
-2 0
Reg
-2 5
FUND NAM E

INTERPRETATION:

• Positive Alpha value for BSL, HSBC, Reliance & Sundaram S.M.I.L.E.which shows that they have
outperformed as compared to their respective benchmarks.
• Negative Alpha value for the rest which shows that they have not been able to outperform their
respective benchmarks.
 R -S q u a re d C o m p a ris o n

1
0.95
0 .9
VALUE

0.85
0 .8
0.75
Equity
HSBC

UTI Mid
Reliance
Franklin
Birla Sun

Magnum

Growth
Emerging
Prudential
Prima

Midcap
Life Mid

Emerging

Sundaram

Sundaram
India

Leaders

Cap
Paribas

Paribas
ICICI
Cap

BNP

BNP
JM FUND NAM E

R -S q u a re d

INTERPRETATION:

The performance of all the funds have been in line with their respective benchmark indexes.
NOTE: For the terms used like Sharpe Ratio, Alpha, Beta, R-Squared refer the chapter 8 on
abbreviations.
 INVESTMENT DETAILS

Fund Name Expense Ratio Front-End Minimum Initial Back-End

% Load % Investment (Rs.) Load%

Birla Sun Life Mid Cap 2.32 0 5000 0

Franklin India Prima 2.16 0 5000 0

HSBC Equity 1.98 0 10000 0

ICICI Prudential Emerging STAR 2.32 0 5000 0

JM Emerging Leaders 2.39 2.25 5000 0

Magnum Midcap 2.5 0 5000 0

Reliance Growth 1.82 0 5000 0

Sundaram BNP Paribas S.M.I.L.E. 2.4 2.25 5000 0

Reg

Sundaram BNP Paribas Select 1.99 2.25 5000 0

Midcap Reg

UTI Mid Cap 2.34 0 5000 0

 Minimum Initial Inestment (Rs.)

Birla Sun Life M id

UTI M id Cap
Cap
Sundaram BNP 9%
9%
Paribas Se le ct Fr ank lin India Prim a
M idcap Re g 9%
9%
Sundaram BNP
.Paribas S.M.I.L.E
Re g
9% HSBC Equity
19%
Re liance Grow th
9%

ICICI Prude ntial

M agnum M idcap
Em e rging STAR
JM Em e rging
9%
Le ade rs 9%
9%
 F ro n t-E n d L o a d %

2 .5
2
1 .5
VALUE

1
0 .5
0
B i r l a S uFnr a n k l i n H S B C IC IC I JM M a g n u mR e l i a n cSe u n d a r Sa mu n d a rUa TmI M i d C a p
L i f e M iInd d i a P r i mE qa u i t y P r u d e n tEi aml e r g i nMg i d c a p G r o w t Bh N P P a Br i Nb aP s P a r i b a s
C ap E m e r g i nLge a d e r s S . M . I. L . ES . e l e c t
STA R R e g M id c a p R e g
FUND NAM E

F r o n t-E n d L o a d %

INTERPRETATION:

•Front load only for JM Emerging Leaders and sundaram (both).

•Except for HSBC equity (Rs.10,000) the minimum initial investment for the rest is Rs.5,000.
•There is no Back Load for any fund.
 E x p e n s e R a t io %

3
2 .5
2
1 .5 E x p e n s e R a tio %
VALUE

1 2 .3 2 2 .1 6 1 .9 8 2 .3 2 2 .3 9 2 .5 2 .4 1 .9 9 2 .3 4
1 .8 2
0 .5
0
B i r la S uF nr a n k l i nH S B C IC IC I J M M a g n u Rm e l i a n cS eu n d a rSa umn d a r aUmT I M i d
L i fe M Ini d d i a P r i Em qau i t yP r u d e n Et i am l e r g i nM g i d c a pG r o w t h B N P B N P C a p
Cap E m e r g inL ge a d e r s P a r i b a sP a r i b a s
S TA R S . M . I. L . SE e. l e c t
R e g M id c a p
Reg
FUND NAM E

INTERPRETATION:

Maximum expense ratio is that of Magnum Midcap, followed by Sundaram S.M.I.L.E., JM Emerging
Leaders, UTI Midcap, ICICI Prudential Emerging Star and Birla Sun Life Midcap, Franklin India Prima fund,
Sundaram Midcap, HSBC Equity and Reliance Growth in the descending order of their respective expense
ratio.
 Q1. Are you aware about mutual funds?

AWARENESS OF MUTUAL FUNDS

(according to age group)

25
20 21
NO. OF PEOPLE

20
15
15 12 YES
10
10 8 NO
7
5
5

0
18-32 32-46 46-60 60+
AGE GROUP
 NO. OF PEOPLE

0
5
10
15
20
25
Less than 30
Rs. 1,00,000

1
14

1,00,001-
1,50,000
3
15

YE S
1,50,001-
2,50,000
11
16

NO
IN C OME GR OU P

2,50,001-
(according to incom e)

5,00,000
2
28
AW ARENESS OF MUTUAL FUNDS

Above
Rs.5,00,000
0
10
 AW AR EN E SS OF MU TU AL FU N D S (according to occupation)
25

25 20
17
20
11 12
15 8
NO . O F PEOPLE 5
10 4 YES

5 NO

0
GovernmentProfessionalBusinessmenS hopkeepers
Job and Others
O CCUPATION

INTERPRETATION:

•According to Age: Awareness about the concept of mutual funds is high in the age group of 42-60 years (21
people out of 28 people) and also in the age group of 60+.
•According to Income: Awareness about the concept of mutual funds is high in the income group of
Rs.2,50,001 – Rs.5,00,000 and in the Above Rs.5,00,000 income group.
•According to Occupation: Awareness of the concept of mutual funds is high among people in Govt. Jobs,
Professionals and Businessmen and awareness is relatively less amongst Shopkeepers and Others.
NOTE: Those who were not aware about the concept of mutual funds were first explained about the
concept of mutual funds.
 Q2.) Are you a regular investor?

ACCORDING TO AGE GROUP

30
25
NO. OF PEOPLE

20
YES
15
NO
10
5
0
18-32 32-46 46-60 60+
AGE GROUP
 AC C O R D IN G T O IN C O M E G R O U P

30
25
NO. OF PEOPLE

20
YES
15
NO
10
5
0
Les s than1,00,001-1,50,001-2,50,001-
Rs . 1,50,000 2,50,000 5,00,000
1,00,000
INCO M E G RO UP
 A C C O R D IN G T O O C C U P A T IO N

28
30
25 17
15 15
20 13
10
N O . O F P E O P 15
LE
YE S
10 2
0 NO
5
0
G overn m ent
P rofe s s ional
B us ines s mSenh opkeepers
Job and O thers
O C C U P AT IO N

INTERPRETATION:

•According to Age: There is regular investment by people in the age group of 18-32 years and 32-46 years.
•According to Income: There is regular investment by people in the income class of Rs.2, 50.001-Rs.5,
00,000.
•According to Occupation: There is regular investment among Professionals and Businessmen.
Q3.) Do you invest using:

By Scientific Tools By Intuition

ON THE BASIS OF AGE GROUP

23 NO. OF
16 PEOPLE
12
4
By Intuition
12 11 14
8 By Scientific Tools
By Scientific
By Intuition
Tools
18-32 32-46 46-60 60+
AGE GROUP
 A C C O R D IN G T O IN C O M E
25
25 22

20 16

15 10
NO. OF PEOPLE 8
10 B y S c i e n ti fi c T o o ls
5 5 5
2 2 B y In tu i ti o n
5

0
L e s s th1a,0n 0 ,0 01 1,5- 0 ,0 02 1,5- 0 ,0 0 A1 -b o v e
R s . 1 ,0 01,0,5000,0 02 0,5 0 ,0 05 0,0 0 ,0R0s0.5 ,0 0 ,0 0 0
IN C O M E C L A S S
 ON THE BASIS OF OC CU PATION

30
25
NO. OF PEOPLE

20 B y Scientific
15 Tools
B y Intuition
10
5
0
Government Professional B usinessmen Shopkeepers
Job and Others
OCCUP ATION

INTERPRETATION:

•According to Age: More people invest using scientific tools in the age group of 32-46 years.
•According to Income: More people invest using scientific tools in the income class of Rs. 2,50,001-
5,00,000 and Above Rs.5,00,000
•According to Occupation: More people invest using scientific tools in the occupation group of
Businessmen.
 Q4.) What are your preferred investment
priorities?

Insurance
INVESTMENTPREFERENCE
Bank

Bonds&
Debentures
9% 11% Equities&Share
6% Market
5% PPF(Public
13%
Provident Fund)
12% NSC(N ational
SavingSchem es)
10%
Post O ffice
SavingSchem es
14% 7% Real Estate
13%
Gold

Mutual Funds

INTERPRETATION:

The most preferred avenue for investment of income by people is NSC (14%) followed by
Banks Fixed Deposits and PPF at 13%, Post Office Saving Schemes at 12%, Insurance 11%, Bonds and
Debentures 10%, Mutual funds 9%, Equities and Share Market 7%, Gold 6% and Real Estate 5%.
 Q5.) What percentage of your income do you
invest?

PERCENTAGE OF INCOME INVESTED

Above 50%
50% - 30%0%
21% Below 10%
Below 10% 10% - 30%
52% 30% - 50%
30% - 10%
Above 50%
27%

INTERPRETATION:

Most People invest “Below 10%” of their income (52%), 27 % people invest 10% to 30% of their income,
21% invest 30% to 50% of their income and none invest above 50% of their income.
 Q6.) What is your perception about Mutual
Funds?

PERCEPTION ABOUT MUTUAL FUNDS

Balanced 65
PERCEPTION

Risky 23 No. of People

Safe 12

NO.OF PEOPLE

INTERPRETAION:
65 people have the perception that mutual funds have a balanced risk, 23 people perceive that mutual funds
are risky whereas 12 people perceive that mutual funds are safe. The people who said that mutual funds are
safe were those who had earned gains in schemes of mutual funds. Those who said mutual funds are risky
were the ones who had suffered losses in their previous investments in mutual funds.
 Q7.) Have you invested in some Mutual
funds?

INVESTMENT INMUTUAL FUNDS

RESPONSE

No
18

Yes

82
0 20 40 60 80 100
NO. OF PEOPLE

No. of People

INTERPRETATION:

82 % people have invested in mutual funds earlier or have their investments in mutual funds at present.
Q8.) Are you aware about the different types of Mutual Fund schemes present in the
market?

AWARENESS OF MUTUAL FUND SCHEMES

PRESENT IN THE MARKET

Yes
37% Yes
No No
63%

INTERPRETATION:

63% people are not aware about the different mutual fund schemes present in the market which shows that
this is the main reason people are not able to judge pro’s and con’s of different schemes of mutual funds and
hence suffer losses.
Q9.) How do you select and choose Mutual Funds?

CRITERIA FOR SELECTION OF MUTUAL FUNDS

Brand Name
Relatives and
Other Sources
Brand Name High NAV(Net Asset
19%
31% Value)
Advertisement High Dividends
s
High NAV (Net
16% Advertisements
High (Asset Value
Dividends 8%
Relatives and Other
26%
Sources

INTERPRETATION:

Most of the people invest in mutual funds on the basis of Brand Name (31%) followed by High Dividend
(26%), Relatives and other Sources (19%), Advertisements (16%) and High NAV (8%).
Q10.) Which Mutual Fund have you invested in from the following?

MUTUAL FUND PREFERENCE

NO. OF PEOPLE

70
60 63 58
50 49 48 53
40 42
32 36
30 25
20 19
10
0 Prudential

Sundaram
Schemes

Birla Sun
Reliance

Franklin
Magnum

Morgan
HSBC

Others
UTI
India
ICICI

Life
SBI

JP
FUND NAME

No. of People

INTERPRETATION:

Reliance is the most preferred mutual fund for people followed by, SBI Magnum Schemes, Sundaram, HSBC,
Birla Sun Life, UTI, ICICI Prudential, Franklin India, JP Morgan and Others respectively.
Q11.) Are you satisfied with your mutual fund?

CUSTOM ER SATISFACTION FOR MUTUAL

FUNDS

60
50
40
NO. OF
30 No. of People
PEOPLE
20
10
0
Yes No
RESPONSE

INTERPRETATION:

Majority of people are satisfied with investing in mutual funds (58).

Q12.) Do you prefer investing in mutual fund through:

OPTION PREFERRED BY PEOPLE FOR

INVESTMENT

One Time
23
OPTIONS

Investment

No. of People
Systematic
Investment 77
Plan

NO. OF PEOPLE

INTERPRETATION:

77 % people prefer to invest in mutual funds through Systematic Investment Plan (SIP) and 33% through one
time investment. Those who opted for one time investment were told about the benefits of SIP at the end of
questionnaire filling.
Q13.) On an average for how long do you keep your investment in mutual fund?

INTERPRETATION:

42% people keep their investment in mutual funds for 0-3 years(included mostly middle com group and age
group of 46-60 years, 37 % people invest for a period upto 3-5 years (included mostly the high income group
and age group of 32-46 years and 18-32 years 21 % prefer 5 years to more who were mostly the businessmen.
Q14.) What is the purpose for your investment in Mutual Funds?

PURPOSE FOR INVESTMENT

NO. OF PEOPLE

120
100 97
80
60 62
40 45
31
20
0
Investment Tax Saving Building corpus Just parking
over a period of your reserved
time monet
RESPONSE

NO. OF PEOPLE

INTERPRETATION:

Most of the people invest in mutual funds for purpose of tax saving (97 and included the businessmen and
high income group people) at first preference followed by building corpus of money (62 and included the
middle income group and government employees), investment purpose (45) and parking of reserved money
(31) respectively.
Q15.) You prefer to invest in:

IN V E S T M E N T OP T ION P R E F E R R E D

69
31
No. of P eople

Dividend G rowth
INV ES TM ENT O P TION
 If dividend then:

DIVIDEND OPTION PREFERRED

Dividend
OPTION TYPE

Payout 37

No. of People

Dividend
Reinvest 32

NO. OF PEOPLE

INTERPRETATION:

69% people prefer Dividend option and rest Growth option. Also out of those who prefer dividend option 37
people prefer Dividend payout option and 32 prefer dividend reinvest.
Q16.) Are you a:

RISK APPETITE

High Risk
Taker
19%
High Risk Taker
LowRisk Medium Risk Taker
Taker MediumRisk
Taker Low Risk Taker
56%
25%

INTERPRETATION:

Majority of people (56%) are Low Risk Takers, 25 % are Medium Risk Takers and 19% are High Risk Takers
(these were the businessmen and people in income class of above
Rs.5, 00,000).
 FINDINGS
• According to NAV comparison Reliance Growth is the top performing mutual fund
and SBI
Midcap is at the ninth position.
• High P/E ratio for the rest of the mutual funds except that of SBI, UTI, JM
Emerging Leaders
Birla Sun Life and Franklin which shows high expectations of investors from these
funds (i.e.
with a high P/E ratio).
• High P/B ratio for HSBC equity, reliance Growth and Franklin India Prima fund
which
indicated overall good performance of the company.
• JM Emerging Leaders is the most volatile fund as compared to the rest in the
market.
• Reliance and Sundaram have been able to outperform their respective benchmarks.
• Many people especially in the age group of 18-32 and in the income group of
Rs.1, 00,001 – Rs. 2, 50,000 are not aware of the concept of mutual funds.
• Many people invest in mutual fund mainly for the purpose of tax saving.
• Most of the people are scared to invest in mutual funds especially those who have
suffered
losses by investing in mutual funds earlier.
• People prefer to invest in National Saving Certificate and Bank fixed deposits
mainly as they
have the perception that mutual funds carry a risk (even though balanced) than the
above
mentioned investment options and these were mainly people who were in the age
group of
60+ and people who are in the income group of Rs.1, 00,001-Rs.2, 50,000 and
below
Rs.1, 00,000 respectively.
• Those who prefer to invest in mutual funds prefer the option of Systematic
Investment Plan.
• SBI is at the third position acording to the survey and Reliance is at number 1.
• Continuity, rather the lack of it, has been a major issue with SBI Mutual Fund. Chief
investment officers (CIOs) come from SBI, on deputation for three to five years. Whenever a
new CIO comes, the whole working style and structure changes.
Over the past few years, SBI Mutual Fund has has a definite focus for investment in each

scheme, clear policies and procedures for investments, and a proper monitoring system.
Once these systems are in place, changes in personnel will not impact operations or
performance much. Of course, the effort will be to continuously evolve processes and
systems to improve the quality of investments, in terms of both returns and risk. The
results are there to see. Various SBI schemes have not only been above-average
performers, they have managed to sustain this out performance for over a year now.
• Minimum SIP amount can be also reduced as the competitors have done as shown in the
scheme details above which will help to attract more customers.
• Also as per my findings and shown above Reliance Growth is popular even among investors
and among the top players as per analysis part 1 so scheme features of Reliance Growth fund
can be incorporated into SBI Magnum Midcap fund.
• Following Asset Allocation can be adopted:
EQUITY AND EQUITY RELATED65%- 100%.
INSTRUMENTS

DEBT AND MONEY MARKET INSTRUMENTS Upto 35%.

The year 2008-09 has been one of the toughest ones for the markets and the mutual fund
industry, wherein the equity markets touched new lows after peaking. The markets witnessed a
major downfall in October 2008 and later recovered slightly towards the end of the financial
year. But the investors did not panic and kept their investment for a long term which needs to be
appreciated. Positive sentiments from global markets added to the celebrations.
During May 2009, the Average AUM of the Indian Mutual Fund Industry comfortably crossed
the Rs. 6 lakh crore mark to reach the figure of Rs. 639,130 cr.

This is the right time to catch up and invest in Magnum Midcap Fund.
SBI Mutual Fund’s first ETF product - SBI Gold Exchange Traded Scheme got listed on the
National Stock Exchange on the 28th May.

Many customers of SBI Magnum and Midcap have suffered losses as found in the survey
carried. But now it is advised that this is the best time to invest into equities. One can invest
at low market and take out the money when the market is high.
Efforts should be made by SBI Mutual fund to promote equity schemes both for the benefit
of investors as well as the growth of Indian economy.
 NET ASSET VALUE (NAV)

Net Asset Value is the market value of the assets of the scheme minus its liabilities. Per unit NAV is the net
asset value of the scheme divided by the number of units outstanding on the Valuation Date. It is calculated
simply by dividing the net asset value of the fund by the number of units. However, most people refer loosely
to the NAV per unit as NAV, ignoring the "per unit". We also abide by the same convention.
•Net Assets = Assets - Liabilities
•Assets = Market value of Investments + Receivables + Accrued income + Other
Assets
•Liabilities = Accrued expenses – Payables – Liabilities
•NAV of a Unit = Net Assets of the Scheme
Number of units outstanding
For example, if the market value of securities of a Mutual Fund scheme is Rs.200 lakhs and it has issued 10
lakh units of Rs.10 each, to the investors, then the NAV per unit of the fund is Rs.20. NAV is required to be
disclosed by the Mutual Funds on a regular basis - daily or weekly - depending on the type of scheme.

SHARPE RATIO
The Sharpe ratio tells us whether a portfolio's returns are due to smart investment decisions or a result of
excess risk. This measurement is very useful because although one portfolio or fund can reap higher returns
than its peers, it is only a good investment if those higher returns do not come with too much additional risk.
The greater a portfolio's Sharpe ratio, the better its risk-adjusted performance has been.
 BETA
A measure of the volatility, or systematic risk, of a security or a portfolio in comparison
to the market as a whole. Also known as "beta coefficient".
A
beta of 1 indicates that the security's price will move with the market. A beta of less than
1 means that the security will be less volatile than the market. A beta of greater than 1
indicates that the security's price will be more volatile than the market. For example, if a
stock's beta is 1.2, it's theoretically 20% more volatile than the market.

R-SQUARED
A statistical measure that represents the percentage of a fund or security's movements that
can be explained by movements in a benchmark index. For fixed-income securities, the
benchmark is the T-bill. For equities, the benchmark is the S&P 500.
R-
squared values range from 0 to 100. An R-squared of 100 means that all movements of a
security are completely explained by movements in the index. A high R-squared
(between 85 and 100) indicates the fund's performance patterns have been in line with the
index. A fund with a low R-squared (70 or less) doesn't act much like the index.
 ALPHA

A measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of a mutual fund and
compares its risk-adjusted performance to a benchmark index. The excess return of the fund relative to the
return of the benchmark index is a fund's alpha.
A
positive alpha of 1.0 means the fund has outperformed its benchmark index by 1%. Correspondingly, a
similar negative alpha would indicate an underperformance of 1%.

STANDARD DEVIATION

In finance, standard deviation is applied to the annual rate of return of an investment to measure the
investment's volatility. Standard deviation is also known as historical volatility and is used by investors as a
gauge for the amount of expected volatility.

Standard deviation is a statistical measurement that sheds light on historical volatility. For example, a volatile
stock will have a high standard deviation while the deviation of a stable blue chip stock will be lower. A large
dispersion tells us how much the return on the fund is deviating from the expected normal returns.
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