sbi mutual fund

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SUMMER TRAINING
TRAINING REPORT
UNDERTAKEN AT
“STATE BANK OF INDIA”
IN
“THE STUDY OF PREFERENCES OF CONSUMERS
REGARDING INVESTMENT IN MUTUAL FUND”
SUBMITTED IN PARTIAL FULFILLMENT
OF
PG DEGREE IN MASTERS OF COMMERCE
Submitt ed By:
Name:
Mcom semester II
Roll No.:
GOSWAMI GANESH DUTTA SANATAN DHARAM COLLEGE
SECTOR -32, CHANDIGARH

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CERTIFICATE OF ORIGINALITY
This is to certify that the project titled “THE STUDY OF PREFERENCES OF
CONSUMERS REGARDING INVESTMENT IN MUTUAL FUNDS” is an original project
done by a under my supervision and guidance, is submitted on the partial fulfillment of the
requirement for the award of degree of Masters in Commerce .
I further declare that this project is the result of my own efforts and this project has not been
submitted to any other university.

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PREFACE
In order to achieve the positive and concrete results, along with theoretical concepts, the
exposure of real life situation existing in corporate world is very much needed. To fulfill this
need, the practical training is required.
I took training in the “STATE BANK OF INDIA”. It was my pleasure to get training in a very
healthy atmosphere. I got ample opportunity to view the overall working of the bank.
The subject of my project is “THE STUDY OF PREFERENCES OF CONSUMERS
REGARDING INVESTMENT IN MUTUAL FUNDS”

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ACKNOWLEDGEMENT
“Expression of feelings by words make them less significant when it comes to statement of
gratitude”
With regard to my Summer Project with SBI Mutual Fund, I would like to thanks each and every
one who offered help, guidelines and support whenever required.
First and foremost I like to express my gratitude to the staff of the bank for their support and
guidance in the project. I am extremely grateful to my for their valuable guidance and timely
suggestions. I would like to extend my thanks to my friends for their support.
I extend my gratitude to my parents who have been a source of encouragement. I must not forget
the generosity accorded by them. Last but not the least, I bow in gratitude to the almighty God,
whose grace enabled me to complete this project.

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TABLE OF CONTENT
Sr.No Particulars Page no
1 INTRODUCTION TO MUTUAL
FUNDS
8-21
2 COMPANY PROFILE 22-32
3 WEEKLY REPORT 33-35
4 OBJECTIVES AND SCOPE 36-38
5 RESEARCH METHODOLOGY 39-41
6 ANALYSYIS AND
INTERPRETATION
42-54
7 FINDINGS AND CONCLUSIONS 55-58
8 SUGGESTIONS AND
RECOMMENDATIONS
59-60
9 BIBLIOGRAPHY 61-62
10 QUESTIONNAIRE 63-65

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EXECUTIVE SUMMARY
In few years Mutual Fund has emerged as a tool for ensuring one’s financial well being. Mutual
Funds have not only contributed to the India growth story but have also helped families tap into
the success of Indian Industry. As information and awareness is rising more and more people are
enjoying the benefits of investing in mutual funds. The main reason the number of retail mutual
fund investors remains small is that nine in ten people with incomes in India do not know that
mutual funds exist. But once people are aware of mutual fund investment opportunities, the
number who decide to invest in mutual funds increases to as many as one in five people. The
trick for converting a person with no knowledge of mutual funds to a new Mutual Fund customer
is to understand which of the potential investors are more likely to buy mutual funds and to use
the right arguments in the sales process that customers will accept as important and relevant to
their decision.
This Project gave me a great learning experience and at the same time it gave me enough scope
to implement my analytical ability. The analysis and advice presented in this Project Report is
based on market research on the saving and investment practices of the investors and preferences
of the investors for investment in Mutual Funds. This Report will help to know about the
investors’ Preferences in Mutual Fund means Are they prefer any particular Asset Management
Company (AMC), Which type of Product they prefer, Which Option (Growth or Dividend) they
prefer or Which Investment Strategy they follow (Systematic Investment Plan or One time Plan).
This Project as a whole can be divided into two parts.

The first part gives an insight about Mutual Fund and its various aspects, the Company Profile,
Objectives of the study, Research Methodology. One can have a brief knowledge about Mutual
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Fund and its basics through the Project.

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1. Concept of Mutual Funds
“….Mutual funds are popular among all income levels. With a mutual fund, we get a
diversified basket of stocks managed by a Professional……”
Mutual fund is a trust that pools the savings of a number of investors who share a common
financial goal. This pool of money is invested in accordance with a stated objective. The joint
ownership of the fund is thus “Mutual”, i.e. the fund belongs to all investors. The money thus
collected is then invested in capital market instruments such as shares, debentures and other
securities. The income earned through these investments and the capital appreciations realized
are shared by its unit holders in proportion the number of units owned by them. Thus a Mutual
Fund is the most suitable investment for the common man as it offers an opportunity to invest in
a diversified, professionally managed basket of securities at a relatively low cost. A Mutual Fund
is an investment tool that allows small investors access to a well diversified portfolio of equities,
bonds and other securities. Each shareholder participates in the gain or loss of the fund. Units are
issued and can be redeemed as needed. The fund’s Net Asset value (NAV) is determined each
day. Investments in securities are spread across a wide cross-section of industries and sectors and
thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the
same direction in the same proportion at the same time. Mutual fund issues units to the investors
in accordance with quantum of money invested by them. Investors of mutual funds are known as
unit holders. When an investor subscribes for the units of a mutual fund, he becomes part owner
of the assets of the fund in the same proportion as his contribution amount put up with the corpus
(the total amount of the fund). Mutual Fund investor is also known as a mutual fund shareholder
or a unit holder.

Any change in the value of the investments made into capital market instruments (such as shares,
debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is defined as the
market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a scheme is
calculated by dividing the market value of scheme's assets by the total number of units issued to
the investors.
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1.1 What Is Mutual Fund
A Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. Anybody with an investible surplus of as little as a few hundred rupees can invest
in Mutual Funds. These investors buy units of a particular Mutual Fund scheme that has a
defined investment objective and strategy.
The money thus collected is then invested by the fund manager in different types of securities.
These could range from shares to debentures to money market instruments, depending upon the
scheme’s stated objectives. The income earned through these investments and the capital
appreciations realized by the scheme are shared by its unit in proportion to the number of units
owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it
offers an opportunity to invest in a diversified, professionally managed basket of securities at a
relatively low-cost.

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1.2 ADVANTAGES OF MUTUAL FUND
 Professional Management - The basic advantage of funds is that, they are professional
managed, by well qualified professional. Investors purchase funds because they do not
have the time or the expertise to manage their own portfolio. A mutual fund is considered
to be relatively less expensive way to make and monitor their investments.
 Diversification - Purchasing units in a mutual fund instead of buying individual stocks or
bonds, the investors risk is spread out and minimized up to certain extent. The idea
behind diversification is to invest in a large number of assets so that a loss in any
particular investment is minimized by gains in others.
 Economies of Scale - Mutual fund buy and sell large amounts of securities at a time, thus
help to reducing transaction costs, and help to bring down the average cost of the unit for
their investors.
 Liquidity - Just like an individual stock, mutual fund also allows investors to liquidate
their holdings as and when they want.
 Simplicity - Investments in mutual fund is considered to be easy, compare to other
available instruments in the market, and the minimum investment is small. Most AMC
also have automatic purchase plans whereby as little as Rs. 2000, where SIP start with
just Rs.50 per month basis.
 Well-Regulated- All Mutual Funds are registered with SEBI and they function within the
provisions of strict regulations designed to protect the interests of investors. The
operations of Mutual Funds are regularly monitored by SEBI.
 Affordability- Investors individually may lack sufficient funds to invest in high-grade
stocks. A mutual fund because of its large corpus allows even a small investor to take the
benefit of its investment strategy.
 Transparency- You get regular information on the value of your investment in addition
to disclosure on the specific investments made by your scheme, the proportion invested in
each class of assets and the fund manager's investment strategy and outlook.
 Choice of Schemes- Mutual Funds offers a family of schemes to suit your varying needs
over a lifetime.

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1.3DIS-ADVANTAGES OF MUTUAL FUND
 Professional Management- Some funds don’t perform in neither the market, as their
management is not dynamic enough to explore the available opportunity in the market,
thus many investors debate over whether or not the so-called professionals are any better
than mutual fund or investor himself, for picking up stocks.
 Costs – The biggest source of AMC income is generally from the entry & exit load which
they charge from investors, at the time of purchase. The mutual fund industries are thus
charging extra cost under layers of jargon.
 Dilution - Because funds have small holdings across different companies, high returns
from a few investments often don't make much difference on the overall return. Dilution
is also the result of a successful fund getting too big. When money pours into funds that
have had strong success, the manager often has trouble finding a good investment for all
the money
1.4 HISTORY OF MUTUAL FUND:
The mutual fund industry in India started in 1963 with the formation of Unit Trust of
India, at the initiative of the Government of India and Reserve Bank of India. The history
of mutual funds in India can be broadly divided into four distinct phases
First Phase - 1964-1987
Unit Trust of India (UTI) was established in 1963 by an Act of Parliament. It was set up
by the Reserve Bank of India and functioned under the Regulatory and administrative
control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the
Industrial Development Bank of India (IDBI) took over the regulatory and administrative
control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the
end of 1988 UTI had Rs. 6,700 crores of assets under management.
Second Phase - 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non-UTI, public sector mutual funds set up by public sector
banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation
of India (GIC). SBI Mutual Fund was the first non-UTI Mutual Fund established in June
1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund
(Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda
Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set
up its mutual fund in December 1990.
At the end of 1993, the mutual fund industry had assets under management of Rs. 47,004
crores.
Third Phase - 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the
year in which the first Mutual Fund Regulations came into being, under which all mutual
funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer
(now merged with Franklin Templeton) was the first private sector mutual fund registered
in July 1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive
and revised Mutual Fund Regulations in 1996. The industry now functions under the
SEBI (Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign mutual funds
setting up funds in India and also the industry has witnessed several mergers and
acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets
of Rs. 1,21,805 crores. The Unit Trust of India with Rs. 44,541 crores of assets under
management was way ahead of other mutual funds.
Fourth Phase - since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust
of India with assets under management of Rs. 29,835 crores as at the end of January
2003, representing broadly, the assets of US 64 scheme, assured return and certain other
schemes. The Specified Undertaking of Unit Trust of India, functioning under an
administrator and under the rules framed by Government of India and does not come
under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. At the end of
September 2004, there were 29 funds which manage assets of rs153108 crores under 421
schemes
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1.5 TYPES OF MUTUAL FUND
 BY STRUCTURE:
 Open Ended Schemes: An open-end fund is one that is available for subscription
all through the year. These do not have a fixed maturity. Investors can
conveniently buy and sell units at Net Asset Value ("NAV") related prices. The
key feature of open-end schemes is liquidity.
 Close Ended Schemes: A closed-end fund has a stipulated maturity period which
generally ranging from 3 to15 years. The fund is open for subscription only
during a specified period. Investors can investing the scheme at the time of the
initial public issue and thereafter they can buy or sell the units of the scheme on
the stock exchanges where they are listed. In order to provide an exit route tothe
investors, some close-ended funds give an option of selling back the units to the
Mutual Fund through periodic repurchase at NAV related prices. SEBI
Regulations stipulate that at least one of the two exit routes is provided to the
investor.

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 Interval Schemes: Interval Schemes are that scheme, which combines the
features of open-ended and close-ended schemes. The units may be traded on the
stock exchange or may be open for sale or redemption during pre-determined
intervals at NAV related prices.
 BY INVESTMENT OBJECTIVE
Under this the mutual fund is categorized on the basis of Investment Objective. By nature
themutual fund is categorized as follow:
 . Equity fund: These funds invest a maximum part of their corpus into equities
holdings. The structure ofthe fund may vary different for different schemes and
the fund manager’s outlook on differentstocks. The Equity Funds are sub-classified
depending upon their investment objective, asfollows:
· Diversified Equity Funds
· Mid-Cap Funds
· Sector Specific Funds
· Tax Savings Funds (ELSS)
Equity investments are meant for a longer time horizon, thus Equity funds rank high on
the risk-return matrix.
 Debt funds: The objective of these Funds is to invest in debt papers. Government
authorities, private companies, banks and financial institutions are some of the
major issuers of debt papers. By investing in debt instruments, these funds ensure
low risk and provide stable income to the investors. Debt funds are further
classified as:
 Gilt Funds: Invest their corpus in securities issued by Government, popularly
known as Government of India debt papers. These Funds carry zero Default risk

but areassociated with Interest Rate risk. These schemes are safer as they invest
in papers backed by Government.
 Income Funds: Invest a major portion into various debt instruments such as
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bonds, corporate debentures and Government securities.
 MIPs: Invests maximum of their total corpus in debt instruments while they take
minimum exposure in equities. It gets benefit of both equity and debt market.
These scheme ranks slightly high on the risk-return matrix when compared with
other debt schemes.
 Short Term Plans (STPs): Meant for investment horizon for three to six
months. These funds primarily invest in short term papers like Certificate of
Deposits (CDs) and Commercial Papers (CPs). Some portion of the corpus is
also invested in corporate debentures.
 Liquid Funds: Also known as Money Market Schemes, These funds provides
easy liquidity and preservation of capital. These schemes invest in short-term
instruments like Treasury Bills, inter-bank call money market, CPs and CDs.
These funds are meant for short-term cash management of corporate houses and
are meant for an investment horizon of 1day to 3 months. These schemes rank
low on risk-return matrix and are considered to be the safest amongst all
categories of mutual funds.
 Balanced Funds: As the name suggest they, are a mix of both equity and debt
funds. They invest in both equities and fixed income securities, which are in line
with pre-defined investment objective of the scheme. These schemes aim to
provide investors with the best of both the worlds. Equity part provides growth
and the debt part provides stability in returns.
Further the mutual funds can be broadly classified on the basis of investment parameter
viz,Each category of funds is backed by an investment philosophy, which is pre-defined in the
objectives of the fund. The investor can align his own investment needs with the funds objective
and invest accordingly.
 Growth Schemes: Growth Schemes are also known as equity schemes. The aim of these
schemes is to provide capital appreciation over medium to long term. These schemes
normally invest a major part of their fund in equities and are willing to bear short-term
decline in value for possible future appreciation.
 Income Schemes: Income Schemes are also known as debt schemes. The aim of these
schemes is to provide regular and steady income to investors. These schemes generally
invest in fixed income securities such as bonds and corporate debentures. Capital
appreciation in such schemes may be limited.
 Balanced Schemes: Balanced Schemes aim to provide both growth and income by
periodically distributing a part of the income and capital gains they earn. These schemes

invest in both shares and fixed income securities, in the proportion indicated in their
offer documents (normally 50:50).
 Money Market Schemes: Money Market Schemes aim to provide easy liquidity,
preservation of capital and moderate income. These schemes generally invest in safer,
short-term instruments, such as treasury bills, certificates of deposit, commercial paper
and inter-bank call money.
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 OTHER SCHEMES
 Tax Saving Schemes: Tax-saving schemes offer tax rebates to the investors under tax
laws prescribed from time to time. Under Sec.88 of the Income Tax Act, contributions
made to any Equity Linked Savings Scheme (ELSS) are eligible for rebate.
 Index Schemes: Index schemes attempt to replicate the performance of a particular index
such as the BSE Sensex or the NSE 50. The portfolio of these schemes will consist of
only those stocks that constitute the index. The percentage of each stock tothe total
holding will be identical to the stocks index weight age. And hence, the returns from such
schemes would be more or less equivalent to those of the Index.
 Sector Specific Schemes: These are the funds/schemes which invest in the securities of
only those sectors or industries as specified in the offer documents. e.g. Pharmaceuticals,
Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks,etc. The returns in
these funds are dependent on the performance of the respective sectors/industries. While
these funds may give higher returns, they are more risky compared to diversified funds.
Investors need to keep a watch on the performance of those sectors/industries and must
exit at an appropriate time.
1.6 INVESTMENT STRATEGIES
1. Systematic Investment Plan: under this a fixed sum is invested each month on a
fixed date of a month. Payment is made through post dated cheques or direct debit
facilities. The investor gets fewer units when the NAV is high and more units when
the NAV is low. This is called as the benefit of Rupee Cost Averaging (RCA)
2. Systematic Transfer Plan: under this an investor invest in debt oriented fund and
give instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of
the same mutual fund.

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3. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund
then he can withdraw a fixed amount each month.

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Association Of Mutual Funds In India
Association of Mutual Funds in India (AMFI): Association of Mutual Funds in India (AMFI)
was incorporated on 22nd August, 1995. AMFI is an apex body of all Asset Management
Companies (AMC) which has been registered with SEBI.
 AMFI has brought down the Indian Mutual Fund Industry to a professional and healthy
market with ethical lines enhancing and maintaining standards. It follows the principle of
both protecting and promoting the interests of Mutual Funds as well as their unit holders.
 The Association of Mutual Funds in India (AMFI) is dedicated to developing the Indian
Mutual Fund Industry on professional, healthy and ethical lines and to enhance and maintain
standards in all areas with a view to protect and promot the interests of mutual funds and
their unit holders.
Objectives Of AMFI
 It recommends and promotes the top class business practices and code of conduct.
 AMFI interacts with SEBI and works according to SEBIs guidelines in the Mutual Fund
industry.
 AMFI represent the Government of India, the RBI a and other related bodies on matters
relating to the Mutual Fund Industry.
 It develops a team of well qualified and trained Agent distributors. AMFI undertakes all
India awareness programme.

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Guidelines of the SEBI for Mutual Fund Companies :
 To protect the interest of the investors, SEBI formulates policies and regulates the Mutual
Funds. It notified regulations in 1993 (fully revised in 1996) and issues guidelines from time
to time.
 SEBI approved Asset Management Company (AMC) manages the funds by making
investments in various types of securities. Custodian, registered with SEBI, holds the
securities of various schemes of the fund in its custody.
 According to SEBI Regulations, two thirds of the directors of Trustee Company or board of
trustees must be independent.
 The Association of Mutual Funds in India (AMFI) reassures the investors in units of Mutual
Funds that the Mutual Funds function within the strict regulatory framework. Its objective is
to increase public awareness of the Mutual Fund industry. AMFI also is engaged in
upgrading professional standards and in promoting best industry practices in diverse areas
such as valuation, disclosure, transparency etc.
Documents required (PAN mandatory):
Proof of Identity :
1. Photo PAN card
2. In case of non-photo PAN card in addition to copy of PAN card any one of the following:
driving license/passport copy/ voter id/ bank photo pass book.

Proof of address (any of the following): Latest telephone bill, latest electricity bill, Passport,
latest bank passbook/bank account statement, latest Demat account statement, voter id, driving
license, ration card, rent agreement.
Offer document: An offer document is issued when the AMCs make New Fund Offer (NFO). It
is advisable to every investor to ask for the offer document and read it before investing. An offer
document consists of the following:
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Standard Offer Document for Mutual Funds (SEBI Format)
Summary Information
Glossary of Defined Terms
Risk Disclosures
Legal and Regulatory Compliance
Expenses
Condensed Financial Information of Schemes
Constitution of the Mutual Fund
Investment Objectives and Policies
Management of the Fund
Offer Related Information.
Loads:

 Entry Load/Front-End Load (0-2.25%) - It is the commission charged at the time of
buying the fund to cover the cost of selling, processing etc. But w.e.f 2010 this has been
stopped.
 Exit Load/Back- End Load (0.25-2.25%) - It is the commission or charged paid when an
investor exits from a Mutual Fund, it is imposed to discourage withdrawals. It may reduce to
zero with increase in holding period.
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Chapter – 2
Company Profile

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2. COMPANY PROFILE
2.1. INTRODUCTION TO SBI MUTUAL FUND
SBI Mutual Fund is India’s largest bank sponsored mutual fund and has an enviable track record
in judicious investments and consistent wealth creation.
The fund traces its lineage to SBI - India’s largest banking enterprise. The institution has grown
immensely since its inception and today it is India's largest bank, patronised 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 SociétéGénérale Asset
Management, one of the world’s leading fund management companies that manages over US$
500 Billion worldwide.
In twenty years of operation, the fund has launched 38 schemes and successfully redeemed
fifteen of them. In the process it has rewarded it's investors handsomely with consistent returns.
A total of over 5.8 million investors have reposed their faith in the wealth generation expertise of
the Mutual Fund.
Schemes of the Mutual fund have consistently outperformed benchmark indices and have
emerged 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 of investors
actively parking their investments across 38 active schemes.
The fund serves this vast family of investors by reaching out to them through network of over
130 points of acceptance, 29 investor service centers, 59 investor service desks and 6 Investor
Service Points.
SBI Mutual is the first bank-sponsored fund to launch an offshore fund – Resurgent India
Opportunities Fund.
2.2 PRODUCTS OF SBI MUTUAL FUND
 Equity schemes
The investments of these schemes will predominantly be in the stock markets and endeavor
will be to provide investors the opportunity to benefit from the higher returns which stock
markets can provide. However they are also exposed to the volatility and attendant risks of
stock markets and hence should be chosen only by such investors who have high risk taking

capacities and are willing to think long term. Equity Funds include diversified Equity Funds,
Sectoral Funds and Index Funds. Diversified Equity Funds invest in various stocks across
different sectors while sectoral funds which are specialized Equity Funds restrict their
investments only to shares of a particular sector and hence, are riskier than Diversified
Equity Funds. Index Funds invest passively only in the stocks of a particular index and the
performance of such funds move with the movements of the index.
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 Magnum COMMA Fund
 Magnum Equity Fund
 Magnum Global Fund
 Magnum Index Fund
 Magnum Midcap Fund
 Magnum Multicap Fund
 Magnum Multiplier plus 1993
 Magnum Sectoral 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 Tax gain Scheme 1993
 SBI ONE India Fund
 SBI TAX ADVANTAGE FUND - SERIES I
 Debt schemes
Debt Funds invest only in debt instruments such as Corporate Bonds, Government Securities
and Money Market instruments either completely avoiding any investments in the stock
markets as in Income Funds or Gilt Funds or having a small exposure to equities as in
Monthly Income Plans or Children's Plan. Hence they are safer than equity funds. At the
same time the expected returns from debt funds would be lower. Such investments are
advisable for the risk-averse investor and as a part of the investment portfolio for other
investors.
 Magnum Children’s benefit Plan
 Magnum Gilt Fund
 Magnum Income Fund
 Magnum Insta Cash Fund
 Magnum Income Fund- Floating Rate Plan
 Magnum Income Plus Fund
 Magnum Insta Cash Fund -Liquid Floater Plan
 Magnum Monthly Income Plan

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 Magnum Monthly Income Plan - Floater
 Magnum NRI Investment Fund
 SBI Premier Liquid Fund
 BALANCED SCHEMES
Magnum Balanced Fund invests in a mix of equity and debt investments. Hence they are less
risky than equity funds, but at the same time provide commensurately lower returns. They
provide a good investment opportunity to investors who do not wish to be completely
exposed to equity markets, but is looking for higher returns than those provided by debt
funds.
 Magnum Balanced Fund
MAIN SCHEMES OF SBI MUTUAL FUND:
Investment Objective: To provide the investor Long-term
capital appreciation by investing in high growth
companies along with the liquidity of an open-ended scheme through investments primarily
in equities and the balance in debt and money market instruments.
Date of inception: 2/1/1991
Minimum investment:Rs. 1000
Exit load: Investments below Rs. 5 crores < = 6months- 1%
> 6 months but < 12 months- 0.50%
Entry load: Investments below Rs. 5 crores- 2.25%
Options: Growth and Dividend
Magnum Tax Gain Scheme is an Equity Linked Savings Scheme (ELSS) from SBI Mutual
Fund which offers investors tax benefits on an investment up to Rs 1 Lakh under Section 80C

of Indian Income Tax Act 1961. The fund was launched in the year 1993 and is one of the
top performers in the ELSS category.
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Scheme Highlights:
 Entry Load – Investments below Rs. 5 crores – 2.25%,Investments of Rs.5 crores and
above – NIL"
 SIP/STP Entry Load - 2.25%
 Exit Load : NIL
 SIP : Minimum amount Rs.500/month - 12 months Rs.1000/month - 6months,
Rs.1500/quarter - 12 months
 STP : Minimum amount Rs.1000/- month - 6 months, Rs.3000/ Quarter - 6 months
 Asset Allocation – 80-100% in Equity, partly convertible debentures and fully
convertible debentures and bonds & 0 – 20% in Money market instruments.
 Minimum Application Amount – Rs 500 for purchase & Multiples of Rs 500 for
additional purchase.
 Plans & Options – Dividend option with payout and reinvestment facility.
Magnum Index Fund invests only in the 50 stocks that constitute S&P CNX Nifty index in
proportion to each stock's weightage in the index. Hence, who the portfolio Manager is or
what his style is does not really matter in such funds. Volatility of such schemes will be in
synchronization with the index. This investment is ideal for:
 Entry load: Investments below Rs. 50 Lakhs – 1.25% Investments of Rs.50 Lakhs and
above – NIL SIP/STP - 1.00%
 Exit Load: Nil SIP /STP- < 12 months from the date of investment of each installment -
1.00%
 Systematic Investment Plan (SIP) : Minimum amount Rs.500/month - 12 months
Rs.1000/month - 6months, Rs.1500/quarter - 12 months
Systematic Transfer Plan (STP): Minimum
 amount Rs.1000/- month - 6 months ,Rs.3000/ Quarter - 6 months
 Dividend Option Available
Systematic Withdrawal Plan (SWP):


 SWP available for a minimum of Rs. 500/- subject to maintaining the minimum
28
investment payable on a monthly basis.
 Launched in August 1999
 Minimum investment of Rs. 2000 per sector
 Entry Load : Investments below Rs. 5 crores – 2.25% Investments of Rs.5 crores and
above – NIL" SIP/STP - 2.25%
 Exit Load: Investments below Rs.5 crores < 6 months - 1.00% 6 months and < 12 months
- 0.50% Investments of Rs.5 crores and above - NIL
 SIP /STP-< 6 months from the date of investment of each installment - 1.00%
 STP : Minimum amount Rs.1000/- month - minimum period of 6 months Rs.3000/
Quarter - minimum period of 6 months
Magnum Multiplier Plus Scheme:
 A diversified equity fund, focusing on steady growth
 Open-ended from April 1998
 Minimum application of Rs. 1000
- 0.50% Investments of Rs.5 crores and above - NIL
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 crores.
The latest investment option from SBI Mutual Fund enables you to benefit from our expertise
in the intricacies of Midcap stocks. So you can leave the hard part of choosing the right stock
to grow with and concentrate on enjoying your returns, now and in the long run:
 Open-ended growth scheme

- 0.50%
 Investments of Rs.5 crores and above - NIL
 STP : Minimum amount Rs.1000/- month - minimum period of 6 months Rs.3000/
Quarter - minimum period of 6 months
 Inter scheme switches to other equity schemes will not carry an Entry Load. However
exit load will be applicable.
Scheme objective: To provide investors with opportunities for long-term growth in 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.
 Launch date - 23rd December 2005
 NFO open from 23rd December 2005 to 20th January 2006
 Minimum investment - Rs. 5000 and in multiples of Rs. 1000
 Dividend and Growth options available. Reinvestment and payout facility available
 Dividends will be completely tax-free. Long term capital gains to be completely tax-free.
Short -term capital gains to be taxed at 10% (plus applicable surcharge and cess)
This Open-end debt fund has investments of at least in 85% in debt instruments and not more
than 15% in equity. Endeavor to provide regular income to investors, this fund is suitable, both
29

as a source of monthly income or to supplement regular income. The main features of the
scheme are:
 Open-end debt fund investing at least in 85% debt and not more than 15% in
equity
 Entry Load : Nil
 Exit Load : Investment up to Rs. 50 lacs : 0.50% for exit within 6 months from
date of investment investments above Rs. 50 lacs : Nil
 SIP/STP- As applicable to the normal transaction in the respective Debt Schemes
 STP : Minimum amount Rs.1000/- month - 6 months ,Rs.3000/ Quarter - 6
months
30
COMPETITORS OF SBI MUTUAL FUND
Some of the main competitors of SBI Mutual Fund are as Follows:
i. ICICI Mutual Fund
ii. Re liance Mutual Fund
iii. UTI Mutual Fund
iv. Birla Sun Life Mutual Fund
v. Kotak Mutual Fund
vi. HDFC Mutual Fund
vii. Sundaram Mutual Fund
viii. LIC Mutual Fund
ix. Principal
x. Franklin Templeton

31
AWARDS AND ACHIEVEMENTS
SBI Mutual Fund (SBIMF) has been the proud recipient of the ICRA Online Award -
8 times, 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
Award 2007 and 5 Awards for our schemes.

34
Chapter - 3
Weekly report

35
WEEK-1
On first day of the training there was an introductory session of trainees with the assistant vice
president Mr. Rupender Kumaria at SBI, local head office. He briefed us about the working of
the mutual fund industry .He gave us details about the various products and schemes of SBI
mutual fund. We were given booklet for basic introduction to mutual funds, fact sheets of
schemes and common application form booklet.
WEEK-2
In the second week of training all the trainees were sent to different branches of SBI.There I did
dummy investment and learned how to fill the application form, what are the requirements
of it.
WEEK-3
In the third week of training the task assigned to me was to convince the customers to make their
investment in the mutual funds.I was guided by Mrs Shikha Mittal Mam for this task. I
interacted with customer and helped them in filling their forms.
WEEK-4
In the fourth week of training I prepared a questionnaire on preferences regarding mutual
fund which is to be filled by the various customers as well as the bank employeses.

36
WEEK-5:
In the fifth week of training the task assigned to me was to doa survey on various
customers about their preferences regarding mutual funds and the questionnaire was filled
by 100 customers .
WEEK-6
In the sixth week of training , I was preparing the report under the guidance of SHIKHA
MITTAL MAM. I reported to the Head Office with the results of my research work for
further improvements and suggestions.

37
Chapter - 4
Objectives and Scope

38
4.1 OBJECTIVES OF THE STUDY
1. To find out the Awareness level of the investors of mutual fund
2. To know the Preferences for the portfolios.
3. To know why one has invested or not invested in SBI Mutual fund
4. To find out the most preferred channel.
5. To find out what should do to boost Mutual Fund Industry.

39
4.2 SCOPE OF THE STUDY
A big boom has been witnessed in Mutual Fund Industry in resent times. A large
number of new players have entered the market and trying to gain market share in this
rapidly improving market.
The research was carried on in Zirakpur. I had been sent at one of the branch of State
Bank of India,Zirakpur, where I completed my Project work. I surveyed on my Project
Topic “A study of preferences of the Investors for investment in Mutual Fund” on the
visiting customers of the SBI Branch.
The study will help to know the preferences of the customers, which company,
portfolio, mode of investment, and option for getting return and so on they prefer. This
project report may help the company to make further planning and strategy

40
Chapter – 5
Research
Methodology

41
RESEARCH METHODOLOGY
This report is based on primary as well secondary data, however primary data collection was given
more importance since it is overhearing factor in attitude studies. One of the most important users of
research methodology is that it helps in identifying the problem, collecting, analyzing the required
information data and providing an alternative solution to the problem .It also helps in collecting the
vital information that is required by the top management to assist them for the better decision
making both day to day decision and critical ones.
Data sources:
Research is totally based on primary data. Secondary data can be used only for the reference.
Research has been done by primary data collection, and primary data has been collected by
interacting with various people. The secondary data has been collected through various journals and
websites.
Sampling:
 Sampling procedure:
The sample was selected of them who are the customers/visitors of State Bank of India, irrespective
of them being investors or not or availing the services or not. It was also collected through personal
visits to persons, by formal and informal talks and through filling up the questionnaire prepared. The
data has been analyzed by using mathematical/Statistical tool.

42
 Sample size:
The sample size of my project is limited to 100 people only. Out of which only 63
people had invested in Mutual Fund.
 Sample design:
Data has been presented with the help of bar graph, pie charts, line graphs etc.
LIMITATIONS:
 Some of the persons were not so responsive.
 Possibility of error in data collection because many of investors may have
not given actual answers of my questionnaire.
 Sample size is limited to 100 visitors of State Bank of India ,
Branch,zirakpur out of these only 63 had invested in Mutual Fund.
The sample size may not adequately represent the whole market.
 Some respondents were reluctant to divulge personal information which can
affect the validity of all responses.

43
Chapter – 6
Data Analysis
&
Interpretation

44
Do you invest in mutual funds?
Yes 63%
No 28%
Earlier but stopped now 9%
70%
60%
50%
40%
30%
20%
10%
0%
63%
yes
INTERPRETATION
Column1
28%
no
9%
earlier but
stopped now
Out of 100 respondents 63% respondents have invested in mutual funds,28% have not
invested in it due to unawareness or some other factors ,where as there are 9% respondents
who had earlier invested in it but stopped now due to less returns

45
2. What is your Experience in the market?
Less than a year 26%
1-4 years 21%
More than 4 years 53%
less than a year 1-4 years more than 4 years
INTERPRETATION
Experience
26%
21%
53%
0%
It is clear from the above data that out of 100 respondents 53% have invested in mutual
funds for more than 4 years and there are 26% of people who have experience of less than
a year

46
3.What is your trading experience?
Speculation 28%
Investment 56%
Both 16%
speculation investment both
INTERPRETATION:
trading preference
28%
16%
56%
0%
From the above data it has been observed that 56% of the people are interested in
investment while 56% are interested in speculation.There are 16% of people whose trading
experience was of both investment and speculation.

47
4. What is your average investment period?
Less than 3 months 23%
3-9 months 10%
9 months 42%
More than 9 months 25%
Less than 3 months 3-9 months 9 months More than 9 months
Interpretation:
average investment period
23%
10%
42%
25%
From the above data it it is clear that 23% of people have invested less than 3 months
And there are 42% of people who are in the market for 9 months

48
5. Factors influencing investment decisions
Brokers 32%
News 10%
Magzines 6%
Friends 20%
Self 30%
Others 2%
32%
Brokers News Magzines Friends Self Others
Interpretation
10%
6%
20%
30%
2%
35%
30%
25%
20%
15%
10%
5%
0%
It is clear that brokers plays the important role in inluencing the decisions of investors

49
How much risk are you willing to take?
High 24%
Moderate 50%
Low 26%
50
40
30
20
10
0
24%
50%
High Moderate Low
Interpretation:
It is clear that people neither want to take much nor less risk.
50% of the people prefer moderate risk
26%
Column1 Column2 Series 3

50
7. How much appreciation do you expect from your investment?
Upto 15% 48%
15-25% 32%
25-35% 12%
More than 35% 8%
Interpretation
expected risk in income
Upto 15% 15-25% 25-35% More than 35%
48%
12%
32%
8%
15% of people expect 48% of appreciation while there are 8% of people who want more
than 35%

51
8. What is your preference in mutual funds?
Equity 19%
Balanced 18%
Income 20%
Money market 9%
ELSS 15%
SIP 17%
Others 2%
Interpretation:
Preference in Mutual Fund
equity Balanced Income Money Market ELSS SIP
20%
18%
21%
9%
15%
17%
From the above data it is clear dat a 21% of the people want to invest in income schemes
because of regular and steady returns and only 9% of the people want to invest in money
market

52
9. How much loss are you willing to take?
Less than 5% 53%
5-10% 35%
More than 10% 12%
60%
50%
40%
30%
20%
10%
0%
Interpretation:
Chart Title
53%
35%
12%
It is clear that much people do not want to take more risk due to certain constraints.
There are 12% of people who are willing to take more than 10% of risk

53
10. Which type of Mutual Fund do you prefer?
Closed ended 56%
Open ended 44%
Interpretation:
Type of schemes
Closed ended funds Open Ended funds
56%
44%
0% 0%
Majority of people that is 56% prefer to invest in closed ended schemes because it require
less investment.

54
11. Do you get influenced by the name of Company promoting Mutual Funds?
Yes 56%
No 23%
Sometimes 21%
60%
50%
40%
30%
20%
10%
0%
56%
23% 21%
Yes No Sometimes
Interpretation:
56% of the respondents do agree that they get influenced by the goodwill of the company
While 21% of respondents do not get inluenced by them

12. Do you get influenced by the returns given by a fund or by the current NAV of a fund?
55
By NAV 23%
Returns 56%
Both 21%
60%
50%
40%
30%
20%
10%
0%
Interpretation:
23%
By NAV
56%
RETURNS
21%
Both
It is clear from the above data that majority of people that is 56% get influenced by the
returns of the fund and only 23% of the people prefer returns by current NAV of a fund

56
Chapter – 7
Findings and Conclusion

57
FINDINGS
 People with less experience were inclined towards investment in the
mutual funds.
 48% respondents reflected confidence and optimism in the context of
their investment.
 Mutual funds are more of an investment option than the speculative
avenue.
 Income funds and ELSS are among the few top funds.
 People are not willing to take much risk and bear loss.
 Brokers advise matters to as much as 32% of the people.

58
CONCLUSION
Running a successful Mutual Fund requires complete understanding of the peculiarities of
the Indian Stock Market and also the psyche of the small investors. This study has made an
attempt to understand the financial behavior of Mutual Fund investors in connection with
the preferences of Brand (AMC), Products, Channels etc. I observed that many of people
have fear of Mutual Fund. They think their money will not be secure in Mutual Fund. They
need the knowledge of Mutual Fund and its related terms. Many of people do not have
invested in mutual fund due to lack of awareness although they have money to invest. As
the awareness and income is growing the number of mutual fund investors are also
growing.
“Brand” plays important role for the investment. People invest in those Companies where
they have faith or they are well known with them. There are many AMCs in Patna but only
some are performing well due to Brand awareness. Some AMCs are not performing well
although some of the schemes of them are giving good return because of not awareness
about Brand. Reliance, UTI, SBIMF, ICICI Prudential etc. they are well known Brand,
they are performing well and their Assets Under Management is larger than others whose
Brand name are not well known like Principle, Sunderam, etc.
Distribution channels are also important for the investment in mutual fund. Financial
Advisors are the most preferred channel for the investment in mutual fund. They can
change investors’ mind from one investment option to others. Many of investors directly
invest their money through AMC because they do not have to pay entry load. Only those

people invest directly who know well about mutual fund and its operations and those have
59
time.

60
Chapter – 8
Suggestions
And
Recommendations

61
SUGGESTIONS AND RECOMMENDATIONS
 The most vital problem spotted is of ignorance. Investors should be made aware of the benefits.
Nobody will invest until and unless he is fully convinced. Investors should be made to realize 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 option could offer. But most of the people
are not even aware of what actually a mutual fund is? They only see it as just another investment
option. So the advisors should try to change their mindsets. The advisors should target for more and
more young investors. Young investors as well as persons at the height of their career would like to go
for advisors due to lack of expertise and time.
 Mutual Fund Company needs to give the training of the Individual Financial Advisors about the
Fund/Scheme and its objective, because they are the main source to influence the investors.
 Before making any investment Financial Advisors should first enquire about the risk tolerance of the
investors/customers, their need and time (how long they want to invest). By considering these three
things they can take the customers into consideration.
 Younger people aged under 35 will be a key new customer group into the future, so making greater
efforts with younger customers who show some interest in investing should pay off.
 Customers with graduate level education are easier to sell to and there is a large untapped market
there. To succeed however, advisors must provide sound advice and high quality.
Systematic Investment Plan (SIP) is one the innovative products launched by Assets Management
companies very recently in the industry. SIP is easy for monthly salaried person as it provides the
facility of do the investment in EMI. Though most of the prospects and potential investors are not
aware about the SIP. There is a large scope for the companies to tap the salaried persons.

63
BIBLIOGRAPHY
 NEWS PAPERS
 OUTLOOK MONEY
 TELEVISION CHANNEL (CNBC AAWAJ)
 MUTUAL FUND HAND BOOK
 WWW.SBIMF.COM
 WWW.MONEYCONTROL.COM
 WWW.AMFIINDIA.COM
 WWW.ONLINERESEARCHONLINE.COM
WWW. MUTUALFUNDSINDIA.COM

64
QUESTIONNAIRE
A study of preferences of the investors for investment in mutual funds.
1. Personal Details:
(a). Name:-
(b) Phone:-
(c). Age:-
(d). Qualification:-
1. Do you invest in mutual funds
 Yes
 No
 Earlier,but stopped now
2.What is your experience in the market
 Less than a year
 1-4 years
 More than 4 years

65
3.What is your trading Preferences?
 Speculation
 Investment
 Both
4.What is you average investment period?
 Less than 3 months
 3-9months
 9months to 2 year
 More than 2 years
5.Factors influencing the investment decisions
 Advice from brokers
 Advice from friends self evaluation
 Current news
 Reviews in financial magazines
6. How much risk are you willing to take?
 High
 low
 Moderate
7. What is your prefernce in mutual funds
 Equity
 income
 Money market funds
 ELSS
 Balanced Funds
 SIP
 others
8.How much appreciation do you expect from your investment?
 Upto 15%
 15-25%
 25%-35%
 more than 35%

66
9.How much loss you are willing to take?
 High
 moderate
 Low
10.which type of mutual fund do you prefer
 Open ended schemes
 closed ended schemes
11.Do you get influenced by the name of Company promoting mutual funds?
 Yes
 No
12.Do you get influenced by the returns given by fund or by the current NAV of a fund?
 By NAV
 BY Returns
 Both

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