Sbi mutul fund

1,516 views

Published on

Published in: Economy & Finance, Business
  • Be the first to comment

Sbi mutul fund

  1. 1. INTRODUCTIONThe evolution of State Bank of India can be traced back to the first decade of the 19thcentury. It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June1806. The bank was redesigned as the Bank of Bengal, three years later, on 2 January1809. It was the first ever joint-stock bank of the British India, established under thesponsorship of the Government of Bengal. Subsequently, the Bank of Bombay(established on 15 April 1840) and the Bank of Madras (established on 1 July 1843)followed the Bank of Bengal. These three banks dominated the modern banking scenarioin India, until when they were amalgamated to form the Imperial Bank of India on 27January1921.An important turning point in the history of State Bank of India is the launch of the firstFive Year Plan of independent India, in 1951. The Plan aimed at serving the Indianeconomy in general and the rural sector of the country, in particular. Until the Plan, thecommercial banks of the country, including the Imperial Bank of India, confined theirservices to the urban sector. Moreover, they were not equipped to respond to the growingneeds of the economic revival taking shape in the rural areas of the country. Therefore, inorder to serve the economy as a whole and rural sector in particular, the All India RuralCredit Survey Committee recommended the formation of a state-partnered and state banksponsoredThe All India Rural Credit Survey Committee proposed the takeover of the ImperialBank of India, and integrating with it, the former state-owned or state-associate banks.Subsequently, an Act was passed in the Parliament of India in May 1955. As a result, theState Bank of India (SBI) was established on 1 July 1955. This resulted in making theState Bank of India more powerful, because as much as a quarter of the resources of theIndian banking system were controlled directly by the State. Later on, the State Bank ofIndia (Subsidiary Banks) Act was passed in 1959. The Act enabled the State Bank of 1
  2. 2. India to make the eight former State-associated banks as its subsidiaries.The State Bank of India emerged as a pacesetter, with its operations carried out by the480 offices comprising branches, sub offices and three Local Head Offices, inheritedfrom the Imperial Bank. Instead of serving as mere repositories of the community‟ssavings and lending to creditworthy parties, the State Bank of India catered to the needsof the customers, by banking purposefully the bank served the heterogeneous financialneeds of the planned economic development.Branchesthe corporate center of SBI is located in Mumbai. In order to cater to different functions,there are several other establishments in and outside Mumbai, apart from the corporatecenter. The bank boasts of having as many as 14 local head offices and 57 Zonal Offices,located at major cities throughout India. It is recorded that SBI has about 10000 branches,well networked to cater to its customers throughout India.ATM ServicesSBI provides easy access to money to its customers through more than 8500 ATMs inIndia. The Bank also facilitates the free transaction of money at the ATMs of State BankGroup, which includes the ATMs of State Bank of India as well as the Associate Banks –State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, etc. Youmay also transact money through SBI Commercial and International Bank Ltd by usingthe State Bank ATM-cum-Debit (Cash Plus) card.SubsidiariesThe State Bank Group includes a network of eight banking subsidiaries and several non-banking subsidiaries. Through the establishments, it offers various services includingmerchant banking services, fund management, factoring services, primary dealership ingovernment securities, credit cards and insurance. 2
  3. 3. The eight banking subsidiaries are: State Bank of Bikaner and Jaipur (SBBJ) State Bank of Hyderabad (SBH) State Bank of India (SBI) State Bank of Indore (SBIR) State Bank of Mysore (SBM) State Bank of Patiala (SBP) State Bank of Saurashtra (SBS) State Bank of Travancore (SBT)Products And Services Personal Banking SBI Term Deposits SBI Loan For Pensioners SBI Recurring Deposits Loan Against Mortgage Of Property SBI Housing Loan Loan Against Shares & Debentures SBI Car Loan Rent Plus Scheme SBI Educational Loan Medi-Plus SchemeOther Services Agriculture/Rural Banking NRI Services ATM Services Demat Services Corporate Banking Internet Banking Mobile Banking International Banking Safe Deposit Locker RBIEFT E-Pay E-Rail SBI Vishwa Yatra Foreign Travel Card Broking Services Gift Cheques 3
  4. 4. OBJECTIVESThe main objective is to study about the different plans of SBI mutual fund To give a brief idea about the benefits available from Mutual Fund investment. To analyze the importance of mutual funds in today scenario. To study about the operations in SBI mutual fund. To understand and analyze the performance of SBI Mutual Funds in Mutual Fund Industry. To analyze what type of scheme provide by SBI. 4
  5. 5. RESEARCH METHODOLOGYResearch in common parlance refers to a search for knowledge. One can also defineresearch as a scientific and systematic search for pertinent information on a specific topic.Research methodology is a way to systematically solve the research problem. Researchmethodology just does not deal research method but also consider the logic behind themethod. It facilitates the researcher with reason for evaluating the research problem.Definition:According to Redman and Moray “Research is systematized effort to gain new knowledge”.According to Clifford Woody “Research comprises defining and redefining problems, formulating hypothesis orsuggested solutions, collecting organizing and evaluating data , making deductions andreaching conclusions and at last carefully testing the conclusions to determine whetherthey fit the formulating hypothesis”. It has also defined as „a careful investigation or inquiry especially through searchfor new fact in any branch of knowledge‟. Research comprises defining research problems, formulates the hypothesis,research design including sample designing, data collection, analysis of data,interpretation, conclusion on the basis of interpretation. Apart from it suggestions andrecommendations are also the part of research.The research methodology is through secondary data: Journals internet books 5
  6. 6. RESEARCH DESIGNThe formidable problem that follows the task of defining the research problem is the designof the research project, popularly known as the „research design‟. To define the termresearch design it can be said “a research design is the arrangement of conditions forcollection and analysis of data in a manner that aims to combine relevance to the researchpurpose with economy in procedure”. In fact the research design is the conceptual structurewithin which research is conducted; it constitutes the blueprint for the collection,measurement and analysis of data. As such the design includes an outline of what theresearcher will do from writing the hypothesis and its operational implications to the finalanalysis of data.. Features of a good design: It must be flexible enough. Appropriate and efficiency must lie in the report. It should minimize bias and maximize the reliability of the data collected. The design must be suitable as per the requirement of the case. Important concept relating to research design: Dependent and independent variables. Extraneous variables. Control. Confounded relationship. Research hypothesis. Experimental and non- experimental hypothesis- testing research. Experimental and control groups. Treatment. Experiments. Experimental units. Research design used in this report 6
  7. 7. COMPANY PROFILESBI Mutual Fund (SBI MF) is one of the largest mutual funds in the country with aninvestor base of over 5.8 million. With over 20 years of rich experience in fundmanagement, SBI MF brings forward its expertise in consistently delivering value to itsinvestors.SBI MF draws its strength from Indias Largest Bank State Bank of India and SociétéGénérale Asset Management, FranceSBI Mutual Fund is India‟s largest bank sponsored mutual fund and has anenviable track record in judicious investments and consistent wealth creation. Thefund traces its lineage to SBI - India‟s largest banking enterprise. The institutionhas grown immensely since its inception and today it is Indias largest bank,patronized by over 80% of the top corporate houses of the country. SBI MutualFund is a joint venture between the State Bank of India and Society General AssetManagement, one of the world‟s leading fund management companies thatmanages over US$ 500 Billion worldwide. At SBI Mutual Fund, resources areconsiderably devoted to gain, maintain and sustain profitable insights into marketmovements. The trust reposed on SBI-MF by over 5.4 million investors is agenuine tribute to its expertise in Fund Management. SBI Mutual Fund is India‟ slargest bank sponsored mutual fund and has an enviable track record in judiciousinvestments and consistent wealth creation.Thus SBI-MF believes in Proven Skills in Wealth Generation Exploiting expertise, compounding growth 7
  8. 8. Proven Skills in Wealth Generation.SBI Mutual Fund is India‟s largest bank sponsored mutual fund and has an enviable trackrecord in judicious investments and consistent wealth creation.The fund traces its lineage to SBI - India‟s largest banking enterprise. The institution hasgrown immensely since its inception and today it is Indias largest bank, patronized byover 80% of the top corporate houses of the country.SBI Mutual Fund is a joint venture between the State Bank of India and Société GénéraleAsset Management, one of the world‟s leading fund management companies thatmanages over US$ 500 Billion worldwide. Exploiting expertise, compounding growthIn twenty years of operation, the fund has launched 38 schemes and successfullyredeemed fifteen of them. In the process it has rewarded its investors handsomely withconsistent returns.A total of over 5.8 million investors have reposed their faith in the wealth generationexpertise of the Mutual Fund.Schemes of the Mutual fund have consistently outperformed benchmark indices and haveemerged as the preferred investment for millions of investors and HNI‟s.Today, the fund manages over Rs. 42,100 crores of assets and has a diverse profile ofinvestors actively parking their investments across 38 active schemes.The fund serves this vast family of investors by reaching out to them through network ofover 130 points of acceptance, 29 investor service centers, 59 investor service desks and6 Investor Service Points.SBI Mutual is the first bank-sponsored fund to launch an offshore fund – Resurgent IndiaOpportunities Fund. 8
  9. 9. Growth through innovation and stable investment policies is the SBI MF credo.Mr. Deepak Kumar Chatterjee Mr. Didier TurpinManaging Director & Chief Executive Dy. Chief Executive OfficerOfficerMr. V. V. Anand Mr. K. T. RavindranExecutive Vice President Chief Operating OfficerMs. Aparna Nirgude Ms. Vinaya DatarChief Risk Officer Company Secretary & Compliance OfficerMr. Navneet Munot Mr. R. S. Srinivas JainChief Investment Officer Chief Marketing OfficerMr. C A SantoshChief Manager - Customer Service. 9
  10. 10. OPERATIONSIn twenty years of operation, the fund has launched thirty-eight schemes and successfullyredeemed fifteen of them. In the process it has rewarded its investors handsomely withconsistently high returns. A total of over 5.4 million investors have reposed their faith inthe wealth generation expertise of the Mutual Fund. Schemes of the Mutual fund haveconsistently outperformed benchmark indices and have emerged as the preferredinvestment for millions of investors and HNI‟s. Today, the fund manages take care ofalmost over Rs. 31,794 cores of assets and has a diverse profile of investors activelyparking their investments across 36 active schemes. The fund serves this vast family ofinvestors by reaching out to them through network of over 130 points of acceptance, 28investor service centers, 46 investor service desks and 56 district organizers.HISTORICAL VIEWSBI MUTUAL FUNDS1987- SBI mutual fund was the first bank sponsored mutual fund in India, incorporatedby SBI bank in June 1987.1987- SBI mutual fund launches the fist scheme “Magnum regular income scheme1987”1993- May 1993, SBI took over the principal trustee of the fund. The investmentmanagement function was entrusted to SBI Funds Management Pvt Ltd.1993- SBI mutual funds launches SBI magnum Taxgain on March 31 1993. The fund isnow the largest managed schemes and is a flagship ELSS scheme in industry.1999- SBI mutual funds launches magnum sector fund umbrella in July 1999. The fundincludes sub funds like MSFU FMCG, MSFU Pharmacy, MSFU IT, MSFU emergingbusiness and MSFU contra fund (India‟s 1st contrarian based equity fund)2002- SBI mutual fund launches its investor‟s education initiative to reach out to the 10
  11. 11. Investors and to educate about them mutual funds as interactive investment option.2004- SBI mutual funds launches dedicated fund targeted to the NRI investors. NRIinvestment fund to provide attractive returns through periodic dividends or throughcapital appreciation.2004- SBI mutual funds formalize its joint venture with Society General Assetmanagement of France in December 2004.2005- SBI mutual fund launches magnum COMMA on August 17 2005, invests in stocksof commodity based companies.2006- Most preferred mutual fund 2006-awared by CNBC awaaz.2006- SBI mutual fund launches SBI ONE INDIA fund, 1st equity based fund onregional focus.2007- Mutual fund of the year -2007 CNBC TV 18 – CRISIL2007- Record mobilization in NFO- SBI INFRASTRUCTURE FUND- SERIES 1. 11
  12. 12. AWARDSOur expertise and excellent performance is frequently recognized by the mutual fundindustry.SBI Mutual Fund (SBIMF) has been the proud recipient of the ICRA Online Award - 8times, CNBC TV - 18 Crisil Award 2006 - 4 Awards, The Lipper Award (Year 2005-2006) and most recently with the CNBC TV - 18 Crisil Mutual Fund of the Year Award2007 and 5 Awards for our schemes. 2010 2009 2008 12
  13. 13. 2007 13
  14. 14. 2006Much of the credit for sustained performance of SBIMF goes to our team. They are thereal performers whose expertise and capability rewards our investors 14
  15. 15. COMPETITORS OF SBI MUTUAL FUNDSome of the main competitors of SBI Mutual Fund as followICICI Mutual FundReliance Mutual FundUTI Mutual FundBirla Sun Life Mutual F undKotak Mutual FundHDFC Mutual FundSundaram Mutual FundLIC Mutual Fund 15
  16. 16. STRUCTURE OF MF IN INDIALike other countries, India has a legal framework within which mutual funds must beconstituted. In India, open and closed-end funds operate under the same regulatorystructure, i.e. in India; all mutual funds are constituted along one unique structure-as unittrust. A mutual fund in India is allowed to issue open-end and close end schemes undera common legal structure. Therefore, a mutual fund may have different schemes (openand closed-end) under it i.e. under one unit trust, at any point of time. The structure,which is required to be followed by mutual funds in India, lay down under SEBI (MutualFund) Regulations, 1996. 16
  17. 17. The Fund SponsorSponsor" is defined under SEBI regulations as any person who, acting alone or incombination with another body corporate, establishes a, mutual fund. The sponsor of afund is akin to the promoter of companies he gets the fund registered with SEBI. Thesponsor will form a Trust and appoint a board of Trustees. The sponsor will alsogenerally appoint 11 Asset management Company (AMC) as fund managers. Thesponsor ill also appoint a Custodian to hold the fund assets. All these appointment aremade in accordance with the SEBI regulations. Per the existing SEBI regulations, for aperson to qualify as a sponsor, must contribute at least 40% of the net worth of the AMCand issues a sound financial track over five years prior to registration.Mutual Funds as TrustsMutual fund in India is constituted in the form of a Public Trust under the Indian TrustsAct 1882.The fund invites investors. Contribute their money in the common pool bysubscribing to units Issued by various schemes established by the trust asevidence of their beneficial interest in the fund.The trust or fund has no legal capacity itself rather it is the Trustee(s) whohave legal capacity and therefore the trustees take all acts in relation to thetrust on its behalf.TrusteesA board of trustees - a body of individuals, or a Trust company - a corporatebody, may manage the Trust. Board of Trustees manages most of the fundsin India. The Board or the Trustee Company (body of individuals, corporatebody, for managing the portfolio, appoints an Asset Management Company.The Trust is created through a document called the Trust Deed that isexecuted by the Fund Sponsor in favors of the trustees. They are theprimary guardian of the unit holders funds and assets. They ensure thatAMCs operations are along professional lines. 17
  18. 18. Asset Management CompanyThe role of an Asset Management Company (AMC) is to act as the investmentmanager of the trust under the Board supervision.Transfer AgentsTransfer agents are responsible for issuing and redeeming units of themutual fund and provide other related services such as preparation oftransfer documents updating investors records. A fund may choose toout this activity in-house or by an outside transfer agent.DistributorsAMCs usually appoint Distributors or Brokers, who sell units on behalf of thefund. Some funds require that all transactions to be routed th rough such brokers.In India, besides brokers, independent individuals are appointed as agents for thepurpose of selling the fund scheme to the investors. While individual constitute thelargest segment in the category of mutual fund distributors, other distributors includebanks, NBFCs and corporate.BankersA funds activities involve dealing with the money on a continuous basis primarilywith respect to buying and selling units, paying for investment made, receiving theproceeds on sale of investment and discharging its obligations towards operatingexpenses. A funds banker therefore plays a crucial role with respect to its financialdealings by holding its bank account and providing it with remittance servicesCustodian and DepositoryThe custodian is appointed by the Board of Trustees for safekeeping of securities interms of physical delivery and eventual safe keeping or participating in theclearing system through approved depository companies on behalf of the 18
  19. 19. mutual fund and must fulfill its responsibilities in accordance with itsagreement with the mutual fund.The Indian markets are moving away from having physical certificates for securities,to ownership of these securities in dematerialized form with a depository. Thus, aDepository Participant will hold a mutual fund‟s dematerialized securities holdings.A funds physical securities will continue to be held by a custodian. 19
  20. 20. TYPES OF SBI MUTUAL FUND SCHEMESType Scheme Investment Minimum Additional Exit Expenses Name Objective Investment Investment Load Ratio amountEquity SBI "To provide capital Rs. 25000 Rs.1000 "For exit 1.22 Arbitrage appreciation and within 7 Opportuniti regular income for business es Fund unit holders by days from identifying profitable the date arbitrage of opportunities between allotment the spot and -0.25%, derivative market For exit segments as also after 7 through investment of business surplus cash in debt days from and money market the date instruments " of allotment - Nil "Equity SBI "To provide investors Rs.5000 Rs.1000 Nil 2.50 Magnum with opportunities for Blue-chip long-term growth in Fund capital through an active management of investments in a diversified basket of equity stocks of companies whose market capitalization is at least equal to or more than the least market capitalized stock of BSE 100 Index."Equity SBI "To generate Rs.5000 Rs.1000 "For exit 2.50 Magnum opportunities for within 1 COMMA growth along with year from 20
  21. 21. Fund possibility of the date consistent returns by of investing allotment predominantly in a - 1%; For portfolio of stocks of exit after companies engaged 1 year in the commodity from the business within the date of following sectors - allotment Oil & Gas, Metals, - Nil." Materials & Agriculture and in debt & money market instruments."Equity SBI "The objective of the Rs.5000 Rs.1000 "For exit 2.50 Magnum scheme is to provide within 1 Equity the investor – Long year from Fund term capital the date appreciation by of investing in high allotment growth companies - 1%; For along with the exit after liquidity of an open- 1 year ended scheme from the through investments date of primarily in equities allotment and the balance in - Nil." debt and money market instruments."Equity SBI "To provide investors Rs. 2000 Rs. 500 "For exit 2.50 Magnum maximum growth within 1 Global opportunity through year from Fund 94 well researched the date investments in Indian of equities, PCDs and allotment FCDs from selected - 1%; For industries with high exit after growth potential and 1 year in Bonds" from the date of allotment - Nil."Equity SBI “The scheme will Rs.5000 Rs.1000 Exit Load 1.50 Magnum invest in stocks – 1.00% Index Fund comprising the S&P for exit 21
  22. 22. CNX Nifty index in within 7 the same proportion business as their weight age in days from the index with the the date objective of of achieving returns investme equivalent to the nt Total Returns Index of S&P CNX Nifty index by minimizing the performance difference between the benchmark index and the scheme. The Total Returns Index is an index that reflects the returns on the index from index gain/loss plus dividend payments by the constituent stocks. The scheme will adopt a passive investment approach"Equity SBI "To provide investors Rs. 5000 Rs.1000 "For exit 2.50 Magnum with opportunities for within 1 Midcap long-term growth in year from Fund capital along with the the date liquidity of an open- of ended scheme by allotment investing - 1%; For predominantly in a exit after well diversified 1 year basket of equity from the stocks of Midcap date of companies. Midcap allotment companies are those - Nil." 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 22
  23. 23. above Rs. 200 cores. "Equity SBI "To provide investors Rs. 5000 Rs.1000 "For exit 2.50 Magnum with opportunities for within 1 Multi Cap long-term growth in year from Fund capital along with the the date liquidity of an open- of ended scheme allotment through an active - 1%; For management of exit after investments in a 1 year diversified basket of from the equity stocks date of spanning the entire allotment market capitalization - Nil." spectrum and in debt and money market instruments "Equity SBI "The objective of the Rs. 1000 Rs.500 "For exit 2.50 Magnum scheme is to provide within 1 Multiplier the investor with long year from Plus 1993 term capital the date appreciation/ of dividends along with allotment the liquidity of an - 1%; For open-ended scheme. exit after The scheme will 1 year invest in a diversified from the portfolio of equities date of of high growth allotment companies " - Nil."Equity SBI "To provide attractive Rs.50000 Rs.1000 "For exit 2.50 Magnum returns to the within 1 NRI Magnum/unit holders year from Investment holders either through the date Fund Flexi periodic dividends or of Asset Plan through capital allotment appreciation through - 1%; For an actively managed exit after portfolio of debt, 1 year equity and money from the market instruments. " date of allotment - Nil." 23
  24. 24. Equity SBI "To provide the Rs. 2000 Rs.500 "For exit 2.50 Magnum investors maximum within 1 Sector growth opportunity year from Umbrella through equity the date Contra investments in stocks of of growth oriented allotment sectors. There are - 1%; For four sub-funds exit after dedicated to specific 1 year sectors viz. IT, from the Pharmaceuticals, date of FMCG, Contra sub allotment fund for investment - Nil." in stocks currently out of favor and Emerging Business Fund (EBF) to participate in the growth potential presented by various companies that are considered emergent and have export orientation/outsourcin g opportunities or are globally competitive by investing in the stocks representing such companies. The fund may also evaluate emerging businesses with growth potential and domestic Focus "Equity SBI "To provide the Rs. 2000 Rs.500 "For exit 2.50 Magnum investors maximum within 1 Sector growth opportunity year from Umbrella through equity the date Emerging investments in stocks of Businesses of growth oriented allotment sectors. There are - 1%; For four sub-funds exit after dedicated to specific 1 year sectors viz. IT, from the Pharmaceuticals, date of 24
  25. 25. FMCG, Contra sub allotment fund for investment - Nil." in stocks currently out of favor and Emerging Business Fund (EBF) to participate in the growth potential presented by various companies that are considered emergent and have export orientation/outsourcin g opportunities or are globally competitive by investing in the stocks representing such companies. The fund may also evaluate emerging businesses with growth potential and domestic Focus "Debt SBI "To provide the "Growth - "Growth CDSC - 0.84 Magnum investors/unit holders Rs.25000 Option - 0.15% for Gilt STP with returns generated Dividend - Rs. 5000 exit within 15 through investments in Rs.100000" Dividend days from the government securities Option - date of issued by the Central Rs. 5000" investment Government and / or a State Government " 25
  26. 26. PROCEDUREFresh Purchase: After deciding on the type of scheme, the investor will have to fill inthe Application form, attach a payment instrument and submit it at any of the fundscollection centers before the cut off time. The investor has to invest in rupees and unitswill be allotted to him in fractions depending upon the NAV.Additional Purchase: Buying more units either of the same scheme or of a differentScheme under the SAME FOLIO is an additional purchase, which can be done throughAdditional Purchase slips provided along with the account statement. After filling theSame, the investor will have to attach a cheque with it and submit it at any of thecollection centers before the cut-off time.Switch Units: A switch request will have to be filled in and submitted at any of theCollection centers before the cut off time. SWITCH can be done with either partial or allUnits under a particular scheme to another scheme as specified by him under the sameFolio.Redeem / Repurchase Units: If the fund is open ended, the investor has to send theRepurchase requisition slip, duly completed and signed, to any of our branches. It isPossible to lodge repurchase requests on the Internet also. The redemption can be donefor all units, partial units, or for an amount.ASSOCIATION OF MUTUAL FUNDS IN INDIA (AMFI)AMFI is a trade body of all the mutual funds in India. It was incorporated in August 1995As a non-profit organization to promote and protect the interests of mutual funds andTheir Unit holders define and maintain high ethical and professional standards andEnhance Public awareness of mutual funds. All mutual funds in India are members of theAssociation. AMFI works through committees and working groups. 26
  27. 27. LITRATURE SURVEYA mutual fund, also called an investment company, is an investment vehicle which poolsthe money of many investors. The funds manager uses the money collected to purchasesecurities such as stocks and bonds. The securities purchased are referred to as the fundsportfolio.When you give your money to a mutual fund, you receive shares of the fund in return.Each share represents an interest in the funds portfolio. The value of your mutual fundshares will rise and fall depending upon the performance of the securities in the portfolio.Like a shareholder in a corporation, you will receive a proportional share of income andinterest generated by the portfolio. You can receive these distributions either in cash or asadditional shares of the fund. As a shareholder, you also have certain shareholder votingrights.A mutual funds portfolio is managed by a professional money manager. The managersbusiness is to choose securities which are best suited for the portfolio. Be aware,however, that even a professional money manager cannot insure against a loss ofprincipal.The mutual fund manager will invest in many different securities. This diversification ofportfolio assets means that you as an investor have not pinned all your hopes on onecompanys success. Also, because the portfolio holds many securities, the negative 27
  28. 28. impact that any one company may have on the fund is diminished. While diversificationis a benefit of mutual fund investing, a mutual fund is still impacted, either favorably orunfavorably, by the ups and downs of the market in general.Mutual funds provide a relatively easy way to invest. Most funds have a minimuminvestment of $1000. In addition, a mutual fund stands ready to buy back, or redeem,your shares at any time. This liquidity allows you to get your money when needed. Thereis no guarantee, however, that your shares at the time of redemption will not havedecreased in value. 28
  29. 29. FINDINGS Diversification: The best mutual funds design their portfolios so individualInvestments will react differently to the same economic conditions. For example,Economic conditions like a rise in interest rates may cause certain securities in aDiversified portfolio to decrease in value. Other securities in the portfolio willRespond to the same economic conditions by increasing in value. When a portfolioIs balanced in this way, the value of the overall portfolio should gradually increaseOver time, even if some securities lose value. Professional Management: Most mutual funds pay topflight professionals toManage their investments. These managers decide what securities the fund will buyand sell. Regulatory oversight: Mutual funds are subject to many government regulationsThat protects investors from fraud. Liquidity: Its easy to get your money out of a mutual fund. Write a check, makeA call and youve got the cash. Convenience: You can usually buy mutual fund shares by mail, phone, or over theInternet Low cost: Mutual fund expenses are often no more than 1.5 percent of yourInvestment. Expenses for Index Funds are less than that, because index funds arenot actively managed. Instead, they automatically buy stock in companies that areListed on a specific index Transparency Flexibility Choice of scheme Tax benefit well regulated 29
  30. 30. CONCLUSIONBeing the 7th biggest AMC,SBI Mutual Fund has a cutting edge over otherAMC‟sSBI is most popular private sector bank in India so public response is very high.SBI Mutual Fund is one of the oldest AMC‟s in private sector and schemes whichare matured enough pull new investors because of high returns.SBI Mutual Fund offers clear and non overlapping positioning of different funds.Increase importance of mutual fund day to day because low risk and high rate ofreturnTraining provided to investors may lead to more investments.Competitors like Reliance AMC, ICICI prudential are catching up fast on themarket share.Share market of SBI regular increase. 30
  31. 31. LEARNINGS AT SBI MUTUAL FUNDLearning from SBI Mutual Fund include Dealing with corporate culture Dealing with bank officials Building and maintaining relationshipsApart from the on field work, we took part in activities conducted in SBI MutualFund office, which included discussions on  Money Market Instruments  Market news updatesThese discussions gave us an exposure in the field of finance, thereby enhancingour knowledge and allowing us to link it with the mutual fund industry.A brief overview of the discussion outlines have been given below. 31
  32. 32. LIMITATION SBI Mutual funds have their Limitation and may not be for everyone: No Guarantees: No investment is risk free. If the entire stock market declines inValue, the value of mutual fund shares will go down as well, no matter howBalanced the portfolio. Investors encounter fewer risks when they invest in mutualFunds than when they buy and sell stocks on their own. However, anyone whoInvests through a mutual fund runs the risk of losing money. Fees and commissions: All funds charge administrative fees to cover theirDay-to-Day expenses. Some funds also charge sales commissions or "loads" toCompensate brokers, financial consultants, or financial planners. Even if you dontUse a broker or other financial adviser, you will pay a sales commission if you buyShare in a Load Fund. Taxes: During a typical year, most actively managed mutual funds sell anywhereFrom 20 to 70 percent of the securities in their portfolios. If your fund makes aProfit on its sales, you will pay taxes on the income you receive, even if youReinvest the money you made. Management risk: When you invest in a mutual fund, you depend on the fundsManager to make the right decisions regarding the funds portfolio. If the managerDoes not perform as well as you had hoped, you might not make as much moneyOn your investment as you expected. Of course, if you invest in Index Funds, youForego management risk, because these funds do not employ managers. No control over Cost in the Hands of an Investor Difficulty in selecting a Suitable Fund Scheme 32
  33. 33. SWOT ANALYSIS OF SBI MUTUAL FUNDSTRENGTH Being the 7th biggest AMC,SBI Mutual Fund has a cutting edge over other AMC‟s The name SBI is also associated with one of the largest public sector bank in India, and hence people show more faith in SBI Mutual Fund. SBI Mutual Fund is one of the oldest AMC‟s in private sector and schemes which are matured enough pull new investors because of high returns. Wide variety of funds, ranging from debt funds to equity and a mixture of both in various proportions, give ample amount of choice to customers. SBI Mutual Fund offers clear and non overlapping positioning of different funds Winner of CNBC TV-18-CRISIL mutual fund of the year award.WEAKNESS Lack of promotional material, dispensers, banners. Proper training not being provided to bank officials.OPPORTUNITIES Untapped rural market offers huge potential. More focus on PSU‟s may enhance business. Training provided to investors may lead to more investments.THREATS Competitors like Reliance AMC, ICICI prudential are catching up fast on the market share. Share market slump may see downfall in investments 33
  34. 34. RECOMMENDATIONThe organization on the wide scale should conduct investor awareness programs.While the firm should conduct such programs in their locality to inform itsexisting customer about various mutual fund scheme.The investors should analyze and indentify their objective of investment inMutual Funds and the periods.Company should give handsome brokerage to brokers so that they get attractedtowards distribution of the funds. 34
  35. 35. BIBLIOGRAPHYWEBSITESwww.sbimf.com: For Comparative Analysis:http://valueresearchonline.com/funds/newsnapshot.comhttp://www.valueresearchonline.com/funds/default.asphttp://amfiindia.com/navreport.aspwww.franklintempletonindia.comwww.principalindia.comhttp://www.google.com Advanced web search for scholarly articles and e-books on thesubjectBOOKS V.A.Avdhani ( Financial Services) ICFAI ( Financial Services)NEWSPAPERS Economic times Financial Express Business standard 35
  36. 36. 36

×