A COMPREHENSIVE PROJECT REPORT ON “CUSTOMER PERCEPTION TOWARDS SBI MUTUAL FUND” Submitted to: SHWETA PATELLate Smt. Shardaben Ghanshyambhai Patel Institute of Management IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF MASTER OF BUSINESS ASMINISTRATION In Gujarat Technological University UNDER THE GUIDANCE OF Faculty Guide: SHWETA PATEL Submitted by VISHAL S. SHAH [Batch : 2011-13, Enrollment No.:117330592034] MBA SEMESTER III/IVLate Smt. Shardaben Ghanshyambhai Patel Institute of Management MBA PROGRAMME Affiliated to Gujarat Technological University Ahmedabad Month, Year
PREFACE “Theory without practice has no fruit, Practice without theory has no root.”MBA is a stepping-stone to the management carrier and to develop good manager it isnecessary that the theoretical knowledge must be supplemented with exposure to thereal environment.Therefore the Comprehensive Project is an essential requirement for the student ofMBA. In accordance with the requirement of MBA course project on the topic“Customer‟s perception towards SBI mutual fund”.The main objective of the project is to study the behavior of customers for mutual fund.An Interim report contains detailed information regarding the activities done duringComprehensive Projects (CP).This experience gives me a clear-cut idea about practical field that how theoreticalknowledge is different from practical aspects & how can I use my knowledge to solvethese problems.
ACKNOWLEDGEMENTShips are safer in harbor but they are not meant for that purpose. This is a universal factand derives home the importance of practical training essential in each and every facetof life. Project is also a part of practical where we can put concept into action.Words are insufficient to express my gratitude towards Miss. Shweta Patel Madam andMr. Brahamachari Sir for their immense help and invaluable guidance in conduction ofthis study from its conception to its completion.And last but not the least I am thankful to my Parents, Family members and my dearFriends for helping me in preparing the comprehensive project report for that they aresupporting me in all the ways with cheer face without showing the time. Shah VishalS
TABLE OF CONTENTCH NO. PARTICULAR PAGE NO. 1. Introduction 1.1 Invest In Mutual Fund 1.1 Introduction To Mutual Funds 1.3 SBI Fund 1.3 Company Profile 1.4 2. Review Of Literature 2.1 Objectives of the Study 3. Research Methodology 3.1 Need Of The Study 3.2 Research design 3.3 Sources of data 3.4 Data collection method 3.5 Sampling size 3.6 Sampling method 3.7 Sampling framework 4. Hypothesis test References
AbstractIn my comprehensive project, I will study on Customer Perception towards SBIMutual Fund.I have study on the SBI mutual fund is the most person use this fund. It is helps toincrease returns of person they have invested in mutual fund.I have doing survey and know they what are the customer perception to invest in SBImutual fund is higher risk or a given the return is they expected.I will study on primary & secondary data. I will fill up the questioner for customers whoinvest in mutual fund. I select the city of Baroda to fill up the questioner. Write on your outcome of the project What u willing to like study.
INVEST IN TO MUTUAL FUNDS• Experts manage your money at minimal of 2.5% to 5% of your wealthirrespective of the size of your investments. You are just not dependent upon any singleindividual for news, tips.• Everyone knows when to buy but no knows when to sell at the top they reallyknow when to get out.• You can start with small amounts Rs. 5000 for 1 time investment and Rs. 1000for a systematic investment plan.• Diversified mutual funds have created a lot of wealth over a period of 10 years.Some funds have multiplied wealth by over 14 times during that period.• Mutual funds provide great liquidity. Money can be taken out within 72 hours andthere is nothing called circuit filter.• The problems of calling brokers, filling Demat instruction slips, making andreceiving payments at the end of each settlement cycles, keeping contract notes andrecords for taxation purposes are all eliminated.• Some funds offer tax saving facility under sec – 80 C. Investment into thesefunds can be made up to a maximum limit of Rs. 100000. These funds have howeverclosed ended.
GROWTH OF MUTUAL FUNDS IN INDIA:Some facts:-• 100 % growth in the last 6 years• Number of foreign AMC‟s are in the queue to enter the Indian markets likeFidelity investments, US based, with over US$1 trillion assets under managementworldwide.• Our saving rate is over 23 % highest in the world. Only channel zing thesesavings in mutual funds sector is required.• We have approximately 29 mutual funds which is must less than US having morethan 800. There is a big scope for expansion.• „B‟ and „C‟ class cities are growing rapidly. Today most of the mutual funds areconcentrating on the „A‟ class cities. Soon they will find scope in the growing cities.• Mutual funds can penetrate rural like the Indian insurance industry with simpleand limited products.• SEBI allowing the MF‟s to launch commodity mutual funds.• Emphasis on better corporate governance.• Trying to curb the late trading practices.• Introduction of financial planners who can provide need based advice.
SBI Magnum Equity FundSBI Magnum Equity Fund seeks capital appreciation through investment in diversifiedportfolio of equities of high growth companies, along with liquidity of an open endedscheme.To provide the investor Long-term capital appreciation by investing in high growthcompanies along with the liquidity of an open-ended scheme through investmentsprimarily in equities and the balance in debt and money market instruments.Asset AllocationInstrument Normal Allocation (% Risk Profile of Net Assets)Equity and related Not less than 70% Medium to HighinstrumentsDebt instruments Not more than 30% Low to MediumSecuritized Debt Not more than 10% of the Medium to High investment in debt instrumentsMoney market instruments Balance LowDate of Inception 01/01/1991 Rs. 1000Minimum Application NAEntry Load 1) For exit within 1 year from the date ofExit Load allotment - 1 %. 2) For exit after 1 year from the date of allotment - Nil Rs.500/month - 12 months,SIP Rs.1000/month - 6 months, Rs.1500/quarter - 12 months Rs. 500/- per month or per quarterSWP
Navs Plan Nav DateSBI Magnum Equity Fund-Dividend 30.83 05-Oct-2012SBI Magnum Equity Fund-Growth 45.89 05-Oct-2012INTRODUCTIONWHAT IS A MUTUAL FUND?A Mutual Fund is a trust that pools the savings of a number of investors who share acommon financial goal. It offers an opportunity to invest in a diversified, professionallymanaged basket of securities at a relatively low cost. The flow chart below describesbroadly the working of a mutual fund.“Mutual Funds are popular among all income levels. With a mutual fund, we get adiversified basket of stocks managed by professionals”These Trusts are run by experienced Investment Managers who use their knowledgeand expertise to select individual securities, which are classified to form portfolios thatmeet predetermined objectives and criteria.
ADVANTAGES OF MUTUAL FUNDS Portfolio Diversification:Mutual Funds normally, invest in a well-diversified portfolio or securities. MF enablesinvestors to hold a diversified investment portfolio even with a small amount ofinvestment. Reduction of Risk:Investors in a mutual fund acquire a diversified portfolio, no matter how small hisinvestment. Diversification reduces the risk of loss, as compared to investing directly inone or two shares, debentures, or others instruments. When investors invest directly, allthe risk of potential loss is his own. A fund investor also reduces his risk in anotherway. Reduction transaction cost:What is true of risk is also true of the transaction cost a direct investors bears all thecost of investing such as brokerage or custody of securities when going through a fundhe has the benefit of economies of scale the funs pay lesser cost because of largervolumes, a benefit passed on to its investors. Liquidity:Often Investors hold shares or bonds they cannot directly easily and quickly sell.Investment in a mutual fund on the other hand is more liquid investors can liquidate theinvestment by selling the unit to the fund. Convince & Flexibility :Mutual Fund management companies offered many investors services that a directmarket investor cannot get. Investors can easily transfer their holdings from onescheme to the other and can get up date market information.
DISADVANTAGE OF MUTUAL FUNDS No Control Over Cost:An investor in a mutual fund has no control over the overall cost of investing. Hisinvestment management fees as long as he remains with the funds, albeit in returns forthe professional management and research. A mutual fund investor also paysdistribution cost which he would not incur in the direct investing. However thisshortcoming only means that there is a cost obtains the benefits of mutual services. No tailor made portfolio:Investors who invest their own can build their own portfolios of shares, bonds and othersecurities. Investing through funds means he delegates this decision to the fundmanager.The very high net worth individuals or large corporate investors may find this to be aconstraint in achieving their objectives however most mutual funds help investors toovercome this constraint by offering miles of schemes- a large number of differentschemes within the same fund an investor can choose from different investment plansand construct a portfolio of his choice. Managing a Portfolio of funds:Availability of large number of funds can actually mean too much choice for theinvestorsHe may again need advice on how to select a fund to achieve his objective quite similarto the situation when he has to select individual shares or bonds to invest in.
TYPES OF MUTUAL FUND: Type of Mutual Fund Schemes Investment Special Structure Objective Schemes Open Ended Industry Specific Growth Funds Funds Schemes Close Ended Index Income Funds Funds Schemes Sectoral Interval Funds Balanced Funds Schemes Money Market Funds
COMPANY PROFILESBI Mutual Fund is India‟s largest bank sponsored mutual fund. The fund tracesitslineage to SBI - India‟s largest banking enterprise. The institution has grownimmensely since its inception and today it is Indias largest bank, patronized by over80% of the top corporate houses of the country.A total of over 4.6 million investors have reposed their faith in the wealth generationexpertise of the Mutual Fund. The fund serves this vast family of investors by reachingout to them through network of over 130 points of acceptance, 28 investor servicecenters, 46 investor service desks and 56 district organizers. Today, the fund managesover Rs. 28500crores of assets and has a diverse profile of investors actively parkingtheir investments across 36 active schemes.Our Vision“To be the most preferred and the largest fund house for all asset classes, with aconsistent track record of excellent returns and best standards in customer service,product innovation, technology and HR practices.”Mutual FundsInvestors are our priority. Our mission has been to establish Mutual Funds as a viableinvestment option to the masses in the country. Working towards it, we developedinnovative, need-specific products and educated the investors about the added benefitsof investing in capital markets via Mutual Funds.Today, we have been actively managing our investors assets not only through ourinvestment expertise in domestic mutual funds, but also offshore funds and portfoliomanagement advisory services for institutional investors.This makes us one of the largest investment management firms in India, managinginvestment mandates of over 5.4 million investors.
Portfolio Management and Advisory ServicesSBI Funds Management has emerged as one of the largest player in India advisingvarious financial institutions, pension funds, and local and international assetmanagement companies.We have excelled by understanding our investors requirements and terms of risk /return expectations, based on which we suggest customized asset portfoliorecommendations. We also provide an integrated end-to-end customized assetmanagement solution for institutions in terms of advisory service, discretionary and non-discretionary portfolio management services.Offshore FundsSBI Funds Management has been successfully managing and advising Indiasdedicated offshore funds since 1988. SBI Funds Management was the 1st banksponsored asset management company fund to launch an offshore fund called SBIResurgent India Opportunities Fund with an objective to provide our investors withopportunities for long-term growth in capital, through well-researched investments in adiversified basket of stocks of Indian Companies.
REVIEW OF LITERATURE Sharpe (1966) suggested a measure for the evaluation of portfolio performance.Drawing on results obtained in the field of portfolio analysis, economist Jack L. Treynorsuggested a new predictor of mutual fund performance, one that differs from virtually allthose used previously by incorporating the volatility of a funds return in a simple yetmeaningful manner. Jensen (1967) derived a risk-adjusted measure of portfolio performance(Jensen‟s alpha) that estimates how much a managers forecasting ability contributes toa funds returns. As indicated by stateman (2000), the e-SDAR of a funds portfolio is the have thebenchmark indexs standard deviation. Rao et al. evaluated the performance of Indianmutual funds in a bear market through relative performance index, risk-return analysis,Treynor‟s ratio, Shapes ratio, Sharpes measure ,Jensens measure, and Famasmeasure. The results of performance measures suggested that most of the mutual fundschemes were able to satisfy investors expectations by giving excess returns overexpected returns based on both - premium for systematic rick and total risk. Roy et al.conducted an empirical study on conditional performance of Indian mutual funds . Theresult suggested that the use of conditioning lagged information variables improves theperformance of mutual fund schemes, causing alphas to shift towards right, andreduced the number of negative timing coefficients. Mishra et al. (2002) measured the mutual fund performance using lower partialmoment. In their paper, a measure of evaluting portfolio performance based on lowerpartial moment was developed. Risk from the lower partial moment is measured bytaking into account only those states in which return is below a pre-specified "targetrate" like risk-free rate. Fernandes (2003) evaluated index fund implementation in India. In her paper,tracking error of index funds in India was measured. The consistency and level oftracking errors obtained by some well-run index fund suggested that it is possible toattain low levels of tracking error under Indian conditions.
OBJECTIVES OF THE STUDY For every problem there is a research. As all the researches are based on some and my study is also based upon some objective and these are as follows. To know the awareness of SBI mutual funds among people. To see the interest of people in investing in SBI mutual funds. To know the investment behavior of investors in SBI mutual fund according to different age group. To ascertain the percentage of income the investors invest in SBI mutual fund. To know the different attitudes of people regarding risk, rate of return period of investment. To analyze how many respondents have invested in SBI Mutual Fund. To study the various schemes of Mutual fund provided by SBI. To know which features of SBI mutual fund most attract to the investors.
RESEARCH METHODOLOGY Sources of Data Primary Data:- The primary data is collected with the help of the questionnaire by taking the responses of the respondents. Secondary Data:- The secondary data is collected through the following sources: • Data through internet source • Magazine & other books Data collection method Personal survey has been used to collect the data through structured questionnaire. Sampling Population:- The population consist of the people of Baroda Sample size:- 100 Sampling method:- Convenience Sampling Sampling Framework :- Individual from Baroda Area. RESEARCH DESIGN:- Descriptive StudiesHYPOTHESES FRAMEWORK
REFERENECIESWebsites referred: www.mutualfundsindia.com www.amfiindia.com www.valueresearchonline.com Redmond (2000), The Performance of Global and International Mutual Funds, The Journal Of the Financial and Strategic Decision, 13, 1, 75-85 Sharpe (1966), Mutual Fund Performance, the Journal of Business, 39, 1, 119- 138