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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
1. INDUSTRY PROFILE
HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY
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. Though the growth
was slow, but it accelerated from the year 1987 when non-UTI players entered
In the past decade, Indian mutual fund industry had seen a dramatic improvement, both
qualities wise as well as quantity wise. Before, the monopoly of the market had seen an
ending phase; the Assets under Management (AUM) was Rs67 billion. The private sector
entry to the fund family raised the amount to Rs. 470 billion in March 1993 and till April
2004; it reached the height if Rs. 1540 billion.
The history of mutual fund industry in India can be better understood divided into
following phases:
Phase1. Establishment and Growth of Unit Trust of India - 1964-87
Unit Trust of India enjoyed complete monopoly when it was established in the year 1963
by an act of Parliament. UTI was set up by the Reserve Bank of India and it continued to
operate under the regulatory control of the RBI until the two were de-linked in 1978 and
the entire control was transferred in the hands of Industrial Development Bank of India
(IDBI). UTI launched its first scheme in 1964, named as Unit Scheme 1964 (US-64),
which attracted the largest number of investors in any single investment scheme over the
years. UTI launched more innovative schemes in 1970s and 80s to suit the needs of
different investors. It launched ULIP in 1971, six more schemes between1981-84,
Children's Gift Growth Fund and India Fund (India's first offshore fund) in 1986, Master
share (India's first equity diversified scheme) in 1987 and Monthly Income Schemes
(offering assured returns) during 1990s. By the end of 1987, UTI's assets under
management grew ten times to Rs 6700 crores.
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Phase II. Entry of Public Sector Funds - 1987-1993
The Indian mutual fund industry witnessed a number of public sector players entering the
market in the year 1987. In November 1987, SBI Mutual Fund from the State Bank of
India became the first non-UTI mutual fund in India. SBI Mutual Fund was later
followed by Can bank Mutual Fund, LIC Mutual Fund, Indian Bank Mutual Fund, Bank
of India Mutual Fund, GIC Mutual Fund and PNB Mutual Fund. By 1993, the assets
under management of the industry increased seven times to Rs. 47,004 crores. However,
UTI remained to be the leader with about 80% market share.
Phase III. Emergence of Private Sector Funds - 1993-96
The permission given to private sector funds including foreign fund management
companies (most of them entering through joint ventures with Indian promoters) to enter
the mutual fund industry in 1993, provided a wide range of choice to investors and more
competition in the industry. Private funds introduced innovative products, investment
techniques and investor-servicing technology. By 1994-95, about 11 private sector funds
had launched their schemes.
Phase IV. Growth and SEBI Regulation - 1996-2004
The mutual fund industry witnessed robust growth and stricter regulation from the SEBI
after the year 1996. The mobilization of funds and the number of players operating in the
industry reached new heights as investors started showing more interest in mutual funds.
Investors' interests were safeguarded by SEBI and the Government offered tax benefits to
the investors in order to encourage them. SEBI (Mutual Funds) Regulations, 1996 was
introduced by SEBI that set uniform standards for all mutual funds in India. The Union
Budget in 1999 exempted all dividend incomes in the hands of investors from income
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tax. Various Investor Awareness Programmes were launched during this phase, both by
SEBI and AMFI, with an objective to educate investors and make them informed about
the mutual fund industry.
Phase V. Growth and Consolidation - 2004 Onwards
The industry has also witnessed several mergers and acquisitions recently, examples of
which are acquisition of schemes of Alliance Mutual Fund by Birla Sun Life, Sun F&C
Mutual Fund and PNB Mutual Fund by Principal Mutual Fund. Simultaneously, more
international mutal fund players have entered India like Fidelity, Franklin Templeton
Mutual Fund etc. There were 29 funds as at the end of March 2006. This is a continuing
phase of growth of the industry through consolidation and entry of new international and
private sector players.
Mutual Fund Companies in India
The concept of mutual funds in India dates back to the year 1963. The era between 1963
and 1987 marked the existence of only one mutual fund company in India with Rs. 67bn
assets under management (AUM), by the end of its monopoly era, the Unit Trust of India
(UTI). By the end of the 80s decade, few other mutual fund companies in India took their
position in mutual fund market. The new entries of mutual fund companies in India were
SBI Mutual Fund, Can bank Mutual Fund, Punjab National Bank Mutual Fund, Indian
Bank Mutual Fund, Bank of India mutual funds the succeeding decade showed a new
horizon in Indian mutual fund industry. By the end of 1993, the total AUM of the
industry was Rs. 470.04 bn. The private sector funds started penetrating the fund
families. In the same year the first Mutual Fund Regulations came into existence with re-
registering all mutual funds except UTI. The regulations were further given a revised
shape in 1996.
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Kothari Pioneer was the first private sector mutual fund company in India which has
now merged with Franklin Templeton. Just after ten years with private sector players
penetration, the total assets rose up to Rs. 1218.05 bn. Today there are 33 mutual fund
companies in India.
Current Scenario of the Mutual Fund Industries
The face of the domestic Mutual fund industry is undergoing a transformation, with
continuous shifts in business strategies and models, in order to adapt to changing
regulations. As the Indian mutual fund industry moves up the maturity curve, assets
under management maintain the growth momentum clocking a compounded growth
rate of 25% between 2006-11, reporting a value of Rs 700, 538 crore as on March 31,
2011. Given the latent opportunity in terms of under-penetration of financial products,
the programs of outreach in the sector, looks at various ways to distribute mutual funds
in a cost effective manner.
Asset Management companies keep their focus on innovation in products and more use
of technology so as to take the industry to the next level of growth. In the backdrop of
rising incomes, and increased rate of savings and investment, it is of crucial
importance that products are designed keeping in mind the needs of investors and their
appetite for risk. Industry stakeholders are struggling to build a sustainable distribution
model, which will enhance reach and penetration to the smaller towns and cities.
Industry players keep a keen eye on evolving regulations, identifying innovative ways
to reach the retail consumer.
Taking cognizance of the favorable macro-economic environment, India holds huge
prospects for growth, luring foreign investors. India emerges as one of the most
popular destinations for investments, opening up multiple avenues and promising
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higher yields. Asset management companies in the domestic market look upon this as
an opportunity to manage International funds, as they strategies’ to modify their
distribution model to fit into a global platform. A resilient distribution strategy and
increased scale of operations is required to keep pace with the global players.
New streams of growth arise not only from an increased flow of funds from Flls, but
also through emerging products like pensions, which are slowly gaining ground. The
integration of technology in the service delivery models the use of online platforms,
which succeed in reaching out to a larger number of investors, in Tier 3 to Tier 6
towns, riding on well entrenched mobile net-works, have provided the reins of growth
to the Indian mutual fund industry.
To sum up, some of the challenges plaguing the industry in the current scenario
include that of low retail participation, search for appropriate distribution models, and
product innovation in tune with investor profiles, high costs of transactions and low
levels of investor awareness.
Indian Economy – GDP of SBI Mutual Fund
The economy grew at its fastest pace in ten months, clocking a growth of 8.9 per cent in
the second quarter ended September. The numbers bettered industry and government
expectations that GDP growth would run out of steam in the period. Growth was buoyed
by a healthy increase in service sector and farm output.
The Central Statistical Organization (CSO), in data released today, also revised the first-
quarter growth figures from 8.8 per cent to 8.9 per cent on account of the new base year
adopted in the calculation of inflation and industrial output. The growth numbers in the
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first half have revived hopes of a 9-per-cent-or-thereabouts growth for the whole
financial year — higher than the government’s estimate of 8.5 per cent.
“We may be confident that at the end of this year, GDP growth will not be less than 8.7-
8.75 per cent. It may be more,” said Finance Minister Pranab Mukherjee. He added that
projections of over 9 per cent growth by the International Monetary Fund could be
correct this time.
A growth of 9 per cent in 2010-11 will be significantly higher than the 7.4 per cent
growth recorded in 2009-10 and 6.7 per cent in 2008-09. The government had projected 9
per cent growth in 2011-12. The last time GDP grew faster than 9 per cent was in
October-December 2007-08 (9.3 per cent).
Asked whether the economy could achieve 9 per cent growth in the current fiscal,
Finance Ministry Chief Economic Advisor Kaushik Basu said, “It is not impossible any
more. We are very close to that.”
Association of Mutual Funds in India
With the rise in mutual fund companies, a requirement for mutual fund association in
India was experienced to operate as a non-profit organization. This led to the
establishment of Association of Mutual Funds in India in 1995. Association of Mutual
Funds in India is an important organ of all Asset Management Companies that are
registered with Securities and Exchange Board of India. Till today, all the Asset
Management Companies with Mutual Fund schemes are the members of Association of
Mutual Funds in India. AMFI operates under the superintendence of its Board of
Directors.
Association of Mutual Funds India, also referred to as AMFI, has helped the Indian
Mutual Fund Industry to enter into a healthy and professional market, maintaining the
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
market ethics and standards. It attempts to promote the interests of both Mutual Funds
and unit holders.
Growth of Mutual Funds
Has been gradual and it took really long years to evolve the modern day mutual funds.
Mutual Funds emerged for the first time in Netherlands in the 18th century. Then it got
introduced to Switzerland, then Scotland and then to United States in the 19th century.
The very idea of mutual funds came from the urge to deliver a form of Diversified
Investment Solution. Over the years the idea developed and people received more and
more choices of Diversified Investment Portfolio through the mutual funds.
When in 1924, Massachusetts Investors Trust first introduced mutual funds in U.S they
found it difficult to gain the trust of the investors. It was very natural that the people took
time to adapt to a new investment idea. There emerged some confusion regarding the
Taxation of Investment Income from mutual funds as there was no Regulation or
legislation.
Laws started to came in existence from 1940s. The result was not immediate. The Mutual
Fund Concept achieved warm reception only in the middle of 1950s. By the end of fifties
and in first half of 1960s mutual fund investment triggered up tremendously.
Monetary Funds benefited a lot from the mutual funds. Earlier investors was used to
invest directly in the stock market and many times suffered from loss due to wrong
Speculation. But, with the mutual funds which were handled by efficient Fund Managers,
Investment Risks was lowered by a great extent. The diversified investment structure of
mutual funds also diversified risk and this contributed tremendously in the Growth of
Mutual Funds.
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Over the years not only the new types of mutual funds emerged, the way, in which
mutual funds were sold also changed. But, the Growth of Mutual Funds has not stopped.
It is continuing to evolve to a better future, where investors will get newer opportunities.
Aims of Association of Mutual Funds in India
The aims of Association of Mutual Funds in India are as follows:
Association of Mutual Funds endeavors to maintain high standards in all fields of
operation within the industry.
Association of Mutual Funds maintains an interaction with Securities and
Exchange Board of India, and functions in accordance with the guidelines
established by SEBI (Securities and Exchange Board of India).
Association of Mutual Funds in India takes up all India awareness program on
behalf of the investors. This is done to facilitate proper comprehension of the
concept and functioning of Mutual Funds.
At last but not the least association of mutual fund of India also circulate
information related to Mutual Fund Industry.
Association of Mutual Funds in India: Sponsors
Some of the major sponsors of Association of Mutual Funds in India include:
SBI Fund Management Ltd.
Benchmark Asset Management Company Pvt.
UTI Asset Management Co Pvt. Ltd.
JM Financial Mutual Fund
Can bank Investment Management Services Ltd.
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
2. SBI MUTUAL FUND COMPANY PROFILE
SBI MUTUAL FUND PROFILE
Mutual Fund SBI Mutual Fund
Setup Date Jun-29-1987
Incorporation Date Feb-07-1992
Sponsor State Bank of India
Trustee SBI Mutual Fund Trustee Company Private Limited
Chairman Mr. Pratip Chaudhri
CEO / MD Mr. Deepak Kumar Chatterjee
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
CIO Mr. Navneet Munot
Compliance Officer Ms. Vinaya Datar
Investor Service Officer Mr. C A Santosh
Assets Managed Rs. 41551.51 crore (Dec-31-2011)
Other Details
Auditors Haribhakti & Co / M/S. Chandabhoy & Jassoobhoy
CustodiansBank of Nova Scotia / Citi Bank / HDFC Bank / Stock Holding
Corporation of India
Registrars
Computer Age Management Services Pvt. Ltd, Computronics
Financial Services (I) Ltd, Datamatics Financial Software Services
Ltd
Address 191 Maker Tower E, Cuffe Parade, Mumbai - 400005.
Telephone Nos. 022 - 22180221-27
Fax Nos. 022 – 22189663
E-mail [email protected]
SBI Funds Management Pvt. Ltd. is one of the leading fund houses in the country
with an investor base of over 4.6 million and over 20 years of rich experience in
fund management consistently delivering value to its investors. SBI Funds
Management Pvt. Ltd. is a joint venture between 'The State Bank of India' one of
India's largest banking enterprises, and AMUNDI (France), one of the world's
leading fund management companies that manages over US$ 500 Billion worldwide
Today the fund house manages over Rs 28500 crores of assets and has a diverse
profile of investors actively parking their investments across 36 active schemes. In
20 years of operation, the fund has launched 38 schemes and successfully redeemed
15 of them, and in the process, has rewarded our investors with consistent returns.
Schemes of the Mutual Fund have time after time outperformed benchmark indices,
honored us with 15 awards of performance and have emerged as the preferred
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
investment for millions of investors. The trust reposed on us by over 4.6 million
investors is a genuine tribute our expertise in fund management
SBI Funds Management Pvt. Ltd. serves its vast family of investors through a
network of over 130 points of acceptance, 28 Investor Service Centres, 46 Investor
Service Desks and 56 District Organizers.
SBI Mutual is the first bank- sponsored fund to launch an offshore fund – Resurgent
India Opportunities Fund.
Background of the company
The mutual fund industry in India started in 1963 with the formation of Unit Trust of
India. SBI mutual fund, the first bank sponsored mutual fund in India, was
incorporated on 29 June, 1987 by state bank of India. Magnum regular income
scheme-1987, the fund has launched 40 schemes till date, of which 32 schemes are
available currently.
Took over the investment management business from 14th may, 1993, from SBI
capital markets limited. In December 2004, SBI enter into joint venture with
AMUNDI and transferred 37% equity shares to them, in December 2004, the board
of trustees appointed by SBI has been replaced by SBI mutual fund trustee
company private limited.
CORPORATE PROFILE
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
With over 24 years of rich experience in fund management, we at SBI Funds
Management Pvt. Ltd. bring forward our expertise by consistently delivering value to our
investors. We have a strong and proud lineage that traces back to the State Bank of India
(SBI) - India's largest bank. We are a Joint Venture between SBI and AMUNDI (France),
one of the world's leading fund management companies.
With our network of over 222 points of acceptance across India, we deliver value and
nurture the trust of our vast and varied family of investors.
Excellence has no substitute. And to ensure excellence right from the first stage of
product development to the post-investment stage, we are ably guided by our philosophy
of ‘growth through innovation’ and our stable investment policies. This dedication is
what helps our customers achieve their financial objectives.
Back ground and inception of the company
The mutual fund industry in India started in 1963 with the formation of Unit Trust of
India. SBI mutual fund, the first bank sponsored mutual fund in India, was
incorporated on 29 June, 1987 by state bank of India. Magnum regular income
scheme-1987, the fund has launched 40 schemes till date, of which 32 schemes are
available currently. Took over the investment management business from 14th may,
1993, from SBI capital markets limited. In December 2004, SBI enter into joint
venture with AMUNDI and transferred 37% equity shares to them, in December
2004, the board of trustees appointed by SBI has been replaced by SBI mutual fund
trustee company private limited.
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NATURE OF THE BUSINESS CARRIED
SBI mutual fund Nature of the business is Fund management, portfolio
management. SBI Funds Management Pvt. Ltd. is a joint venture between 'The
State Bank of India' one of India's largest banking enterprises, and
AMUNDI(France), one of the world's leading fund management companies that
manages over US$ 500 Billion worldwide.
Today the fund house manages over 33727.90 as on Mar-2012 of assets and has a
diverse profile of investors actively parking their investments across 36 active
schemes. In 20 years of operation, the fund has launched 38 schemes and
successfully.
VISION AND MISSION
VISION :
“To be the most preferred and the largest fund house for are asset classes with a
consistent track record of excellent return and best standards in customers services,
product innovation technology and HR practices”
MISSION :
Constantly evolving fund house which focuses On customer delight
transparency and sustained return
Attracting nurturing and retaining the best talents
Leader and not follower targeting to set the benchmark enhance
business effectiveness
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Active risk management and global best practices in all business
areas
Launching a wide range of innovative products
PRODUCTS OF SBI MUTUAL FUND:
Products
1. Equity fund
These funds concentrate mainly on long run gains therefore capital gains.
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
Magnum Equity Fund
Magnum Global Fund
Magnum Index Fund
Magnum Midcap Fund
SBI Arbitrage Opportunities Fund
SBI Blue Chip Fund
SBI Infrastructure Fund – Series I
SBI Magnum Tax gain Scheme 1993
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SBI ONE India Fund
SBI TAX ADVANTAGE FUND – SERIES I
2. Debt fund
These funds aims of generating and distributing regular income to the members on
a periodical basis. 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
o Magnum Gilt Fund (Long Term)
o Magnum Gilt Fund (Short Term)
Magnum Income Fund
Magnum Income Plus Fund
o Magnum Income Plus Fund (Saving Plan)
o Magnum Income Plus Fund (Investment Plan)
SBI Debt Fund Series
o SDFS 15 Months Fund
o SDFS 90 Days Fund
o SDFS 13 Months Fund
o SDFS 18 Months Fund
o SDFS 24 Months Fund
o SDFS 30 DAYS
SDFS 370 days
SDFS 60 Days Fund
SDFS 180 Days Fund
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SDFS - 370 Days - 7
3. Balance fund
This is also called as income-cum-growth fund. It is nothing but a combination of
both income and growth funds. 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
Area of operation- global/national / regional
Branch office
SBI funds management private limited
C/o state bank of India , commercial branch , station road, Bellary - 583101
LL no: 08392 271775
Head office:
SBI Funds Management Pvt. Ltd. (SBIMF) having its corporate office at 191, Maker
Tower “E”, 19th Floor, Cuffe Parade, and Mumbai 400005 is a joint venture between SBI
and SGAM
Branches
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The fund has a network of 100 collection branches
SBI mutual funds operation partially for globally and fully national
Ownership pattern
Incorporation Date: 29-06-1987
Ownership: Public
Ownership Pattern: Foreign - 37%, Domestic - 63%
Sponsors: State Bank of India, Amundi
Chief Executive: Mr. Deepak Kumar Chatterjee
Chief Investment Officer: Mr. Navneet Munot
Investor Relations Officer: G Kandasubramanian
Total Assets (Cr.): 33727.90 as on Mar-2012
Address: 191, Maker Tower E 19th Floor, Cuffe Parade, Mumbai - 400005
Telephone: (022) 22180221/ 27
Fax: ((022) 22189663
Email: [email protected]
Website: www.sbimf.com
BOARD OF DIRECTORS - AMC
Mr. Pratip Chaudhuri Chairman & Associate Director
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
Mr. Deepak Kumar Chatterjee Managing Director
Mrs. Madhu Dubhashi Independent Director
Mr. Jean-Paul Mazoyer Associate Director
Mr. Shyamal Acharya Associate Director
Mr. Thierry Raymond Mequillet Associate Director
Mr. Jayesh Gandhi Independent Director
Dr. H. Sadhak Independent Director
Dr. H. K. Pradhan Independent Director
Mr. Philippe Batchevitch Alternate Director to Mr. Mazoyer
Mr. Shishir Joshipura Independent Director
COMPETITORS OF SBI MUTUAL FUND
Some of the main competitors of SBI Mutual Fund in Dehradoon are as
Follows
ICICI Mutual Fund
Reliance Mutual Fund
UTI Mutual Fund
Birla Sun Life Mutual Fund
Kotak Mutual Fund
HDFC Mutual Fund
Sundaram Mutual Fund
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LIC Mutual Fund
ING Vysya Mutual Fund
HSBC Mutual Fund
Tata Mutual Fund
Sahara Mutual Fund
Principal
Franklin Templeton
For the first time in the history of Indian mutual fund industry, Unit Trust of India Mutual
Fund has slipped from the first slot. Earlier, in May 2012, the Prudential ICICI Mutual
Fund was ranked at the number one slot in terms of total assets.
In the very next month, the UTIMF had regained its top position as the largest fund house
in India. Now, according to the current pegging order and the data released by
Association of Mutua l Funds i n Ind i a (AMFI ) , t he Re l i ance Mutua l
Fund , w i th a J anua ry -end AUM of Rs 39,020 crore has become the largest
mutual fund in India On t he o the r hand , UTIMF, w i th an AUM of Rs
37 ,535 c ro re , ha s gone t o s econd position.
The Prudential ICICI MF has slipped to the third position with an AUM of Rs
34,746crore.It happened for the first time in last one year that a private sector mutual
fund house has reached to the top slot in terms of asset under management (AUM). In the
last one year to January, AUM of the Indian fund industry has risen by 64% to Rs 3.39
lakh crore. According to the data released by Association of Mutual Funds in
India (AMFI), the combined average AUM of the 35 fund houses in the country
increased to Rs 5,512.99 billion in April compared to Rs 4,932.86 billion
In March Reliance MF maintained its top position as the largest fund house in the
country with Rs74.25 billion jump in AUM to Rs 883.87 billion at April-end. The
s econd - l a rge s t f und house HDFC MF ga ined Rs 59 .24 b i l l i on i n i t s
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AUM a t Rs 638 .80 billion.ICICI Prudential and state-run UTI MF added Rs
46.16 billion and Rs 57.35 billion irrespectively to their assets last month. ICICI
Prudential`s AUM stood at Rs 560.49 billion at the end of April, while UTI MF had
assets worth Rs 544.89 billion. The o the r f und house s wh ich s aw an
i nc r ea se i n t he i r ave rage AUM in Apr i l i nc lude -Canara Robeco MF,
IDFC MF, DSP Blackrock, Deutsche MF, Kotak Mahindra MF and LICMF.
Infrastructural facilities
All Transactions going on by computerized
Good furniture facilities
Technology like management information system etc,
Good working condition
Transaction data base available in system
AWARDS AND ACHIEVEMENTS :
SBI- MUTUAL FUND has been performing excellently since its inception. The fund
has received lot of appreciation for its performance from the mutual fund industry. It
has been awarded by ICRA on line award 8 times, CNBC- TV 18 CRISIL 4
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AWARDS, the Lipper award (year 05-06) and most recently the CNBC TV 18 Crisil
Mutual Fund Award of the year 2007 and 5 award for the schemes.
Year Awards
2011 Readers Digest Awards 2011 For Trusted Brand in Fund Management Category
ICRA Mutual Fund Awards 2011 For Magnum Income Fund - Floating Rate Plan - Long Term Plan
2010 ICRA mutual fund award
2009 ICRA mutual fund award
Lipper award the Indian mutual fund awards
2008 Outlook money NDTV profit award
Outlook money NDTV profit award
ICRA mutual fund award
2007 Outlook money NDTV profit award
CNBC awaaz consumer award
Lipper award the Indian mutual fund awards
ICRA mutual fund award
CNBC TV18 CRISIL mutual fund of the year award
2006 CNBC awaaz consumer award
Lipper award the Indian mutual fund awards CNBC TV18 CRISIL mutual fund of the year
ICRA mutual fund award
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
WORK FLOW MODEL
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Investor Pools money withPassed
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This diagram signifies the importance of Mutual Fund. A Mutual Fund is a trust that
pools the savings of a number of investors who share a common financial goal. The
money thus collected is invested by the fund manager in different types of securities
depending upon the objective of the scheme. These could range from shares to debentures
to money market instruments. The income earned through these investments and the
capital appreciations realized by the schemes are shared by its unit holders in proportion
to the number of units owned by them. Thus a mutual fund is the most suitable
investment for the common person as it offers an opportunity to invest in a diversified,
professionally managed basket of securities at a relatively low cost. Since small investors
generally do not have adequate time, knowledge, experience & resources for directly
accessing the capital market, they have to rely on an intermediary, which undertakes
informed investment decisions & provides consequential benefits of professional
expertise.
The advantage of Mutual Funds to the investors is professional managed, low transaction
cost, liquidity, transparency, well regulated, diversified portfolios & tax benefits. By
pooling their assets through mutual funds, investors achieve economies of scale.
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Fund house
Securities based on financial goal
Returns
Fund managers invest in
Generates
INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
A collected corpus can be used to procure a diversified portfolio indicating greater
returns has also create economies of scale through cost reduction. This principle has been
effective worldwide as more & more investors are going the mutual fund way. This
portfolio diversification ensures risk minimization. The criticality such a measure comes
in when you factor in the fluctuations that characterize stock markets. The interest of the
investors is protected by the SEBI, which acts as a watchdog. Mutual funds are governed
by SEBI (Mutual Funds) regulations, 1996.
Future growth and prospects:
The Future of Mutual Funds in India suggests that the industry has got huge scopes of
development in the times to come. The entry-ban load adversely imported inflow in
equity funds as nearly 85% of inflow in equity schemes come from distributers,
who started to feel the pinch. Because the investors booked profits as the market had
gone up.
As such , high revenue generating assets are partly being replaced by asset , which
will start generating revenues only from the second year. In this changed scenario,
the banking channel has become more important to us and we are working on
increasing the overall share of the banking channel, as this channel is less price –
sensitive.
We plan to augment our distribution network to their 3towns and extend the
market coverage in rural markets through SBI business correspondents / facilitators
with Micro SIP options.
The other steps for improving investors services includes increasing the electronic
payout of redemption / dividend for around 90% introduction of centralized
management of SIPs of all associates banks by direct debits for further increase
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our SIP research and improve efficiency , increasing e- communication and fine –
tuning of our contact centre services and reduce call waiting time. We popularized
online investment through net banking solutions.
Important aspects related to the future of mutual funds in India are -
The growth rate was 100 % in 6 previous years.
The saving rate in India is 23 %.
There is a huge scope in the future for the expansion of the mutual funds industry.
A number of foreign based assets management companies are venturing into
Indian markets.
The Securities Exchange Board of India has allowed the introduction of
commodity mutual funds.
The emphasis is being given on the effective corporate governance of Mutual
Funds.
The Mutual funds in India has the scope of penetrating into the rural and semi
urban areas.
Financial planners are introduced into the market, which would provide the
people with better financial planning.
The McKinsey 7S Framework
The 7-S model is better known as McKinsey 7-S model. This is because the two persons
who developed this model, Tom Peters and Robert Waterman, have been consultants at
McKinsey & co. at that time. They published their 7-S model in their article “Structure is
not organization” (1980) and in their books “The art of Japanese management” (1981)
and “In search of excellence” (1982).
The model starts on the premise that an organization is not just structure, but consists of
seven elements:
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STRATEGY:The direction and scope of the company over the long term.
STRUCTURE: The basic organization of the company, its departments, reporting lines,
areas of expertise and responsibility.
SYSTEMS: Formal and Informal procedures that govern everyday activity, covering
everything from management information systems, through to the systems at the point of
contact with the customer (retail systems, call centre, systems, online systems, etc).
SKILL: The capabilities and competencies that exist within the company. What it does
best.
SHARED VALUES: The values and beliefs of the company. Ultimately they guide
employees towards ‘valued’ behavior.
STAFF: the Company’s people resources and how they are developed, trained and
motivated.
STYLE: The leadership approach of top management and the company’s overall
operating approach.
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1. STRATEGY : At SBI Mutual Fund we know that every investors has unique
financial goals and requires a different set of products.
Each scheme is managed by devising a different strategy which is reflective of
the investors profile and carries with its different risk and rewards.
2. STRUCTURE: Structure tells us in the organization who reports to whom. He /
she will do what and he / she work reported whom this all information helps to take
decision making in the organization this information consider under the structure
Below diagram shows to the organization structure
SBI MUTUAL FUND ORGANISATION STRUCTURE
MD (Mr. Deepak Kumar Chatterjee)
Chief investment officer chief marketing officer chief operating officer
(Mr.Navneet Munot) (Mr. R.S. SrinivasJain)
(Mr.K.T.Ravindran)
Risk management team National sales head Chief customer services
(Ms.Aparnanirgude) (Ms. Vinaya Datar) (Mr.C.A.Santosh)
Fund management team Regional manager Chief risk executive
(Mr.Dharmendra Grover) (Mr.Vishal Saraf) (Mr. Philippe batchenitch)
Investment research team Relationship manager & channel head
(Mr.sohini Andani) (G. Kandasubramanian)
3. SKILLS:
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The company employees must to know the new technical skills like online business, &
management information system skills etc. and how to adopted that skills in the
organization and employees must to know the human & ethical skills its necessary
because its tells us how to behave with the customer in corporate word
4. STYLE:
Style includes Leadership style of top management and overall operating style of the
organization. Style impacts the norms people follow and they work and interact with each
other and with customers.
How does the top management make decisions – Participatory Vs Top Down?
How do managers spend their time in informal meetings, informal conversations,
etc...?
Style of functioning
Emergency meetings are held where top management and employees collectively
participate- targets for the week is set, responsibilities are delegated, suggestions
are invited.
Personal attention to the project trainees helps in creating a good image in the
eyes of the public.
Staff has very good informal conversations that develop a sense of loyalist,
motivation, dedication within the employee
There is a good cordial relation between the management and the employees
which shows a participatory leadership style is observed
5. STAFF
The staffing procedure mainly includes how the organization has to look into its people,
their backgrounds, and competencies. Staff also includes the organization approaches to
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recruitment, selection and specialization. How people are developed, how recruits are
trained, socialized and integrated and how their careers are managed.
The candidates are recruited from diverse fields of commerce like B. Com’s, MBA’s,
ICWA’s, CA’s and CFA’s great opportunity for fresher’s and post graduates are
available.
They are involved in all the required meetings and activities.
The Staff are given freedom to use their innovation and creative skills.
6. System:
Systems in their frame work stands for the rules and regulations, procedures and practices
that must be allowed to carry out the tasks in the organization. A good system adds to the
efficient and effective working of the entrepreneur. Management information system
helps to organization and MIS provide the report to organization, head office easy to get
the branch office daily transaction report with the help of MIS
MIS give the various branch office report
MIS give the customer transaction data base report
Providing statement of account to the investors on request
7. Shared value:
team work, transparency, courage, integrity, trustworthiness this all are the core value of
SBI mutual fund Each individual worker hands –hand to common organization goal,
crate a culture of openness internally communicating discloser policy and standards to
external word true to self and to all our stockholder, to take the right decision without any
fear or favor in the best interest of all our stake holders The employees share
responsibility and protect the company’s name and integrity. There is no sharing of
confidential/ important information with the outsiders. There is collective responsibility
and accountability on the part of its members. This can be said as the shared values of the
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employees of the organization.
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SWOT ANALYSIS of SBI MUTUAL FUNDS
SWOT ANALYSIS
A type of fundamental analysis of the health of a company by examining its strengths(S),
weakness (W), business opportunity (O), and any threat (T) or dangers it might be
exposed to.
I. STRENGTHS
SBI mutual fund is a sponsored by state bank of India which is the more than the 200
years old, largest lender in the country and having a massive network of over 13000
branches in India
1. Wide reach: SBI mutual fund strong distribution network throw association banks
over 13000 branches of state bank of India over 2000 branches of association banks
and distribution of SBI mutual fund products giving a big space and visibility for the
products of SBI mutual funds
2. Services : as services place a dominant role in a financial products SBI mutual funds
is providing standard services throw which branches located in over 445 cities
3. Brand image: as opposed to some of its competitors (e.g. HSBC), operates a multi-
brand strategy. The company operates under numerous well-known brand names,
which allows the company to appeal to many different segments of the market.
4. Distribution channel strategy: SBI is continuously improving the distribution of its
products. Its online and Internet-based access offers a combination of excellent
growth prospects and its retail direct business also saw growth of 27% in 2002 and
15% in 2003.
5. Large pool of installed capacities.
6. Experienced managers for large number of Generics.
7. Large pool of skilled and knowledgeable manpower.
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II. WEAKNESS
1. Technologically little less advanced : SBI mutual fund technology less
advanced comparing to other mutual fund for eg: HDFC, RELIANCE, this
both companies use the advanced technologies in the business
2. Less publicity: SBI mutual fund its basically public sector company and SBI
mutual fund use the less amount for advertisement its not using any brand
ambassadors so its not giving high publicity
3. Since it is a asset management company it can’t quick ever change the market
there minimize the competitors strength of the public
4. Less aggressive
5. Comparatively less reach to the investors
III. OPPORTUNITIES
1. State Bank of India’s great brand image helps SBI mutual fund to increase
penetration in to market , there are possibility for SBI mutual fund to get listed
in top 3 AMC of the country, as it is having all potential to reach top position
2. Increasing in liberalization of government policies. In mutual fund industry
IV. THREATS
1. Regulatory frame work : due to every changing regulatory frame work in India
mutual fund industry is facing the great threat for its inflow and sustainable
growth in the scenario of no entry load it has became very difficult to manage
assets management business
2. Increased Competition : With intense competition by so many local players
causing headache to the current marketers. In addition to this though multinational
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brands are not yet established but still they will soon hit the market. Almost 60 to
70% of the revenue is spending on the management and services.
3. Lack of sufficient branch-offices for speedy delivery of services.
4. Hedge funds : sometimes referred to as ‘hot money’, are also causing a threat for
mutual funds have gained worldwide notoriety for bringing the markets down. Be
it a crash in the currency, stock or bond market, usually a hedge fund prominently
figures somewhere in the picture.
5. Inflation: war, natural disaster like Tsunami it effect the crash in Indian capital
market the crash directly impact on mutual funds
ANALYSIS OF FINANCIAL STATEMENT
Balance sheet As At March 31 2011
Particulars Schedules
Rs As at 31.3.2011 Rs
Rs As at 31.3.2010 Rs
Source of fundsShareholders’ fundsCapital 1 500,000,00
0 500,000,000
Reserves and surplus
2 2,275,791,688
1,824,554,402
Total 2,775,791,688
2,324,554,402
Application of funds Fixed assets 3
Gross block 177,056,599
151,994,567
Less: depreciation 124,447,461
103,764,634
Net block 52,609,138 48,229,933
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Capital work in progress
6,786,254 5,517,305
Investments 4 1,772,969,400
371,464,385
Deferred tax asset(net)
17,670,855 4,822,541
Current assets, loan and advance
Sundry debtors 5 111,594,460
167,913,529
Cash and bank balance
6 1,100,014,984
2,046,273,249
Other current assets 7 39,081,263 47,651,436
Loans & advance 8 318,013,328
180,964,971
1,568,704,035
2,442,803,185
Less :current liabilities and provisions Current liabilities 9 283,739,46
3215,407,017
Provisions 10 359,208,531
332,875,930
642,947,994
548,282,947
Net current assets 925,756,041
1,894,520,238
Total 2,775,791,688
2,324,554,402
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011Schedules
Rs For the year ended 31.3.2011 Rs
Rs For the year ended 31.3.2010 Rs
Income Management fees (gross)[tax
2,206,646,200 1,815,674,733
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deducted at source Rs.243,393,103 (previous year Rs.213,099,174)]Portfolio advisory fee [tax deducted at source Rs.18,059 (previous yearRs.36,298)] Portfolio Management Fee [ Tax deducted at source Rs.632,588(Previous year Rs.1,271,077]
160,936,141
30,022,891
130,489,018
21,964,880
Income from investments
11 21,678,304 17,948,403
Other income 12 133,138,577 171,328,9162,552,422,113 2,157,405,950
EXPENDITURE:
Employee Costs 13 678,305,452 464,355,867Administrative and Other Expenses
14 680,632,431 532,397,781
Depreciation on Fixed Assets
24,436,883 22,196,076
1,383,374,766 1,018,949,724Profit before tax 1,169,047,347 1,138,456,226Provision for taxes:Current Tax (393,420,000) (386,700,000)Deferred Tax ( refer note 5)
12,848,314 2,639,864
Fringe Benefit Tax - 2,193,433Excess Provision for Tax in respect ofprevious years written backExcess Provision for FBT in respect of
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previous years written back
2,147,720
(380,571,686) (379,718,983)
Profit after tax 788,475,661 758,737,243Balance brought forward fromprevious year
1,429,363,841 1,031,414,598
Profit available for appropriation
2,217,839,502 1,790,151,841
APPROPRIATIONSTransfer to General Reserve
78,847,566 80,000,000
Interim Dividend
Proposed Equity Dividend
290,000,000
-
-
240,000,000
Tax on Proposed Equity Dividend
48,165,375 -
Excess provision for Dividend Distribution Tax of PY written Back Surplus carried to Balance Sheet
-
(927,000)
1,801,753,561
40,788,000
-
1,429,363,841
2,217,839,502 1,790,151,841Basic and diluted earnings per share (Face Value per Share Rs. 100/-)
157.70 151.75
Interpretation:
Particular
31.3.2011 31.3.2010
Net present value (NPV ) 38.223 35.168
Return on net worth (RONW) 41.088 32.640
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Return on capital employee (ROCE) 51.326 47.979
Current ratio (CR) 3.382 1.289
Fixed assets (FA) 2.437 2.235
Earnings per share (EPS) 157.70 151.75
Dividend per share ( DPS) 40 48
An interim Dividend of Rs. 58 per Equity Share, subject to tax, was declared on 28th
March, 2011 on the paid-up equity Share capital of the Company, involving a total outgo
of Rs. 3,381.65 lacs on account of dividend inclusive of dividend Distribution tax. The
Directors recommend that the Interim Dividend paid during the year, be declared as the
Final Dividend for the year 201011.
During the year under review, the Company has not made any fresh issue of capital.
However, consequent upon AMUNDI and Credit Agricole S.A. entering into an
agreement to undertake a global merger of their fundamental asset management
businesses, 18, 50,000 equity shares constituting 37% of the paid-up equity share capital
held bySociété Générale Asset Management have been transferred to AMUNDI India
Holding, a wholly owned subsidiary of AMUNDI on 30th May, 2011 after obtaining
relevant regulatory approvals
LEARNING EXPERIENCE:
During this project work, I got the opportunity to study and know exactly the various
aspects of the organization in practical sense. I was able to gain the knowledge of various
strategies adopted by the organization and also to understand the duties responsibilities of
various departments and its functioning. In fact I was exposed to the system followed by
the organization the style of management.
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It was a great experience obtained during my project work in SBI MUTUAL FUND. All
the staffs of the company were very co-operative and they provided all the detailed
information about SBI MUTUAL FUNDS, they provide the necessary information for
the project. The internal atmosphere inside the company was cool and friendly. Inside the
office every one busy with they work, most of times managers sir busy with clients and
every Saturday sir not available in the office
I got some information about the mutual funds and how the customers behave with
employees and how to fill the customers needs how to solve the customers problem this
all information I try to know in the office.
This project work a greater extent has helped me to understand the aspects such as
different product services offered by SBI MUTUAL FUND, area of operation, work flow
model, overall organization functioning etc. apart from these things I was also able to
understand the organization in depth with the application of McKenzie’s 7s frame work
with special reference to organization under study namely structure, skill, style, strategy,
system, staff, shared values, and lastly the aspects of SWOT analysis of the organization.
GENERAL INTRODUCTION
RESEARCH METHODOLOGY:
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A. TITLE OF THE PROJECT:
“A study on investor choice of investment between mutual fund (equity
schemes) and equity shares”
STATEMENT OF THE PROBLEM:
Investment decisions mainly depend upon the investor’s perception towards performance
of mutual funds and the overall performance of Mutual Fund industry in India. The study
choice which compared of the mutual fund with an investors. The project is entitled
as “A study on investor choice of investment between mutual fund (equity schemes) and
equity shares.”
OBJECTIVES OF THE STUDY:
To study the investor choice of investment between equity schemes and equity
shares.
To compare equity & mutual fund schemes in respect of their risk & return.
Analyzing the performance of equity shares & mutual fund schemes with
their benchmark
To examine how customers in specific segment rate the investment in
mutual fund as an investment option .
To study a wide spectrum of investment option.
SCOPE OF THE STUDY
The project is entitled as “A study on investors choice of investment between
mutual fund(equity schemes) and equity shares ” this study is based on primary data
to know the investors choice of investment on equity schemes and equity shares towards
SBI mutual funds and survey has been conducted for 100 respondents limited to Bellary
region. Preferences and satisfactory level of investors as been analyzed.
RESEARCH METHODOLOGY
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Type of research used Descriptive research/Diagnostic Research under
that cross sectional research
Research approach Literature Survey
Research instrument Questionnaire
Source Website of: mutualfundindia.com, www. money
control.com www.SBImf.com
Sample Size 100
Sampling Technique Non-probability Sampling/ purposive or
judgement sampling under that convenience
sampling
Statistical Tools: Ratio analysis, Arithmetic Mean, Percentage,
Graphical charts
1. Descriptive Research: Descriptive research includes surveys and fact- finding
enquiries of different kinds. The major purpose of descriptive research is description of
the state of affairs as it exists at present. From the point of view the research design,
the descriptive as well as diagnostic studies share common requirement. To applying
the characteristics of investors choice of investment for comparing with the equity
schemes with equity shares.
2. Literature survey: It most of the cases exploration phase begin with Literature search-
Review of books
3. Source: This from websites like Mutualfundindia.com, www. Money control.com
Collection of data:
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Collection of data is the first step in the research report. The data may be primary or
secondary data. And primary data has-been collected by interacting with various people.
And data which is collected through structured questionnaire method. As much as
possible ambiguous questions are excluded from the data collected for this project is
primary questionnaire.
Primary data:
All primary data has been collect from the personally, the required information are also
collected from the end user of the product by survey to know the awareness mutual fund
Secondary data:
All secondary data has been collected from the Company Website, Internet, The
required information are also collected form respective which have passed through the
statistical process. To sort the data would be using collecting the studying
according to be method of data collection.
Limitations of the study:
Primary data is limited to only respondents in Bellary
Possibility of error in data collection because many of investors may have not
given actual answers to questions
This study is limited to sample size of 100.
Project duration time is limited to 10 weeks
GENERAL INTRODUCTION:
THEORETICAL BACKGROUND
THEORETICAL ASPECTS
The SEBI (Mutual Funds) Regulations 1993 define a mutual fund (MF) as a fund
established in the form of a trust by a sponsor to raise monies by the Trustees through the
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sale of units to the public under one or more schemes for investing in securities in
accordance with these regulations.
These regulations have since been replaced by the SEBI (Mutual Funds) Regulations,
1996. The structure indicated by the new regulations is indicated as under.
A mutual fund comprises four separate entities, namely sponsor, mutual fund trust, AMC
and custodian. The sponsor establishes the mutual fund and gets it registered with SEBI.
The mutual fund needs to be constituted in the form of a trust and the instrument of the
trust should be in the form of a deed registered under the provisions of the Indian
Registration Act, 1908.
The sponsor is required to contribute at least 40% of the minimum net worth (Rs. 10
crore) of the asset management company. The board of trustees manages the MF and the
sponsor executes the trust deeds in favor of the trustees. It is the job of the MF trustees to
see that schemes floated and managed by the AMC appointed by the trustees are in
accordance with the trust deed and SEBI guidelines.
What is a Mutual Fund?
A mutual fund is a trust that pools the money of many investors its shareholders to invest
in a variety of different securities. Investments may be in stocks, bonds, money market
securities or some combination of these. Those securities are professionally managed on
behalf of the shareholders, and each investor holds a pro rata share of the portfolio
entitled to any profits when the securities are sold, but subject to any losses in value as
well.
A mutual fund is a group of investors operating through a fund manager to purchase a
diverse portfolio of stocks or bonds. There are myriad kinds of mutual funds, each with
its own goals and methodologies. Whether or not a mutual fund is a good investment is a
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matter of much public debate, with many claiming they are excellent for the average
person, and others saying they are simply a poor way to invest.
For the individual investor, mutual funds provide the benefit of having someone else
manage your investments, take care of record keeping for your account, and diversify
your rupees over many different securities that may not be available or affordable to you
otherwise. Today, minimum investment requirements on many funds are low enough that
even the smallest investor can get started in mutual funds.
A mutual fund, by its very nature, is diversified its assets are invested in many different
securities. Beyond that, there are many different types of mutual funds with different
objectives and levels of growth potential, furthering your chances to diversify.
Many critics of mutual funds point out that scarcely over 20% of mutual funds
outperform the Standard and Pool’s 500 Index. This means that nearly 80% of the time,
an investor would have been more profitable by simply buying equal shares in all 500 of
the companies currently on the S&P 500.
Structure of mutual fund industry
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The above diagram gives an idea on the structure of an Indian mutual fund.
Sponsor: Sponsor is basically a promoter of the fund. For example Bank of Baroda,
Punjab National Bank, State Bank of India and Life Insurance Corporation of India (LIC)
are the sponsors of UTI Mutual Funds. Housing Development Finance Corporation
Limited (HDFC) and Standard Life Investments Limited are the sponsors of HDFC
mutual funds. The fund sponsor raises money from public, who become fund
shareholders. The pooled money is invested in the securities. Sponsor appoints trustees.
Trustees: Two third of the trustees are independent professionals who own the fund and
supervises the activities of the AMC. It has the authority to sack AMC employees for
non-adherence to the rules of the regulator. It safeguards the interests of the investors.
They are legally appointed i.e. approved by SEBI.
AMC: Asset Management Company (AMC) is a set of financial professionals who
manage the fund. It takes decisions on when and where to invest the money. It doesn’t
own the money. AMC is only a fee-for-service provider.
The above 3 tier structure of Indian mutual funds is very strong and virtually no chance
for fraud.
Custodian: A Custodian keeps safe custody of the investments (related documents of
securities invested). A custodian should be a registered entity with SEBI. If the promoter
holds 50% voting rights in the custodian company it can’t be appointed as custodian for
the fund. This is to avoid influence of the promoter on the custodian. It may also provide
fund accounting services and transfer agent services. JP Morgan Chase is one of the
leading custodians.
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Transfer Agents: Transfer Agent Company interfaces with the customers, issue a fund’s
units, help investors while redeeming units. Provides balance statements and fund
performance fact sheets to the investors. CAMS are a leading Transfer Agent in India.
ADVANTAGES OF MUTUAL FUND INVESTMENT
Professional Management
Mutual Funds provide the services of experienced and skilled professionals,
backed by a dedicated investment research team that analyses the performance
and prospects of companies and selects suitable investments to achieve the
objectives of the scheme.
Diversification
Mutual Funds invest in a number of companies across a broad cross-section of
industries and sectors. This diversification reduces the risk because seldom do all
stocks decline at the same time and in the same proportion. You achieve this
diversification through a Mutual Fund with far less money than you can do on
your own.
Convenient Administration
Investing in a Mutual Fund reduces paperwork and helps you avoid many
problems such as bad deliveries, delayed payments and follow up with
brokers and companies. Mutual Funds save your time and make investing easy
and convenient.
Return Potential
Over a medium to long-term, Mutual Funds have the potential to provide a higher
return as they invest in a diversified basket of selected securities.
Low Costs
Mutual Funds are a relatively less expensive way to invest compared to directly
investing in the capital markets because the benefits of scale in brokerage,
custodial and other fees translate into lower costs for investors.
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
Liquidity
In open-end schemes, the investor gets the money back promptly at net asset
value related prices from the Mutual Fund. In closed-end schemes, the units can
be sold on a stock exchange at the prevailing market price or the investor can
avail of the facility of direct repurchase at NAV related prices by the Mutual
Fund.
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.
Flexibility
Through features such as regular investment plans, regular withdrawal plans and
dividend reinvestment plans, you can systematically invest or withdraw funds
according to your needs and convenience.
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.
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.
DISADVANTAGES OF MUTUAL FUNDS INCLUDE
Inability to make one’s own decisions
No guarantee that the professional managers will provide anticipated results
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
Investment company managers can switch styles of investing, even while
adhering to the objectives and policy agreed upon by the mutual fund. This makes
it difficult for the investor to keep track of the investments owned by the fund and
the activity of fund managers.
Past performance, a highly reported indicator is just that, one of many indicators;
it is no guarantee for future performance. Careful scrutiny is warranted when
reading a fund’s advertisement
TYPES OF MUTUL FUNDS:
Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial
position, risk tolerance and return expectations etc. thus mutual funds has Variety of
flavors, Being a collection of many stocks, an investors can go for picking a mutual fund
might be easy. There are over hundreds of mutual funds scheme to choose from. It is
easier to think of mutual funds in categories, mentioned below:
1. BASED ON THEIR STRUCTURE
OPEN ENDED FUNDS
CLOSE-ENDED FUNDS
Interval Schemes.
2. BASED ON NATURE
Equity Fund
Diversified Equity Funds
Mid-Cap Funds
Sector Specific Funds
Tax Savings Funds (ELSS)
Debt Fund
Gilt Funds:
Income Funds:
MIPs:
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
Short Term Plans (STPs):
Liquid Funds:
Balanced Fund
3. BASED ON INVESTMENT OBJECTIVE
Growth Schemes
Income Schemes
Balanced Schemes:
Money Market Schemes
Tax Saving Schemes
Index Schemes
Sector Specific Schemes
Equity Shares
It defines a share as “ a share in the share capital”. A company , other than that
one limited by guarantee , has got the statutory right to raise the capital through the
issue of shares. As mentioned earlier, there are two kinds of shares
What is equity?
Equity is the term commonly used to describe the ordinary share capital of a business.
Ordinary Shares or equity shares
Ordinary shares are also sometimes referred to as common stock. With this type of stock,
you are entitled to a partial ownership in the company. This type of stock does not have
any predetermined number of dividends allocated to it. The only time that the owner of
ordinary shares will receive a dividend is after the preferred shareholders have already
been paid.
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
However, it is important to understand that the market value of a company's shares has
little (if any) relationship to their nominal or face value. The market value of a company's
shares is determined by the price another investor is prepared to pay for them. In the case
of publicly-quoted companies, this is reflected in the market value of the ordinary shares
traded on the stock exchange (the "share price").
In the case of privately-owned companies, where there is unlikely to be much trading in
shares, market value is often determined when the business is sold or when a minority
shareholding is valued for taxation purposes.
In your studies, you may also come across "Deferred ordinary shares". These are a form
of ordinary shares, which are entitled to a dividend only after a certain date or only if
profits rise above a certain amount. Voting rights might also differ from those attached to
other ordinary shares.
Features of the equity shares
Permanent capital base :- the equity shares represent a company’s permanent
capital base, that is , the capital that is returned to the shareholders only
after the company’s life time comes to an end or it goes in to liquidation .
No fixed dividend :- the amount of dividend on equity shares is not fixed in
so far as it is the residual amount left after the retention of earnings and
payment of dividend to the preference share holders.
Voting rights :- since the equity share holders are the owners of the
company, they have the right to vote at the company’s meetings and for
important decisions and thereby to exercise control over the management of
the enterprise.
Basis of raising borrowed capital :- with a given leverage ratio, more
borrowed capital can be raised with a rise in the equity share capital. This
means that these shares form the basis for raising debt.
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
Public issues :- equity shares are sold to public through a prospective
published in the newspaper. The new company issues shares at par. However,
a company with a good record can issue shares at a premium.
Compare between equtity shares and mutual fund
Shares:
When companies look for money for their business, they can get it in two ways -
either they borrow from a bank and pay interest ("debt") or they ask people like you
and me to invest and give us shares ("equity"). A share is a part of a business.
Then let's say a friend named Sarath wants to buy a share of this business but the
company has got all the money it needs. So Sarath asks us to sell our shares to him, at
a higher value than we bought it. So he will own our share of the company, but he's
willing to pay more because he thinks the company will do well. Now we make a
profit and then Sarath perhaps sells it to someone else at even higher values etc. The
company doesn't really get affected because it isn't seeing the money, but the share
price goes up as the company starts doing better, and as more people begin to want
the shares.
Why does the share price go up? The answer is: Perceived value. I may think the
company is worth 1 crore, but someone else might think it's worth 2 crores. When my
shares reach my valuation I sell, but someone else will think it's a good deal and buy.
To organize such buying and selling, there are commercial "stock exchanges". BSE
and NSE are some of them, though there are a number of other, smaller exchanges in
India. An exchange provides a common place for people to buy or sell shares, with
sales happening on an auction basis - buyers bid for shares at a price they are willing
to pay, and sellers "ask" for a price from buyers. Exchanges match these prices and
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
share exchanges happen along with payments. "Brokers" facilitate these exchanges,
and you pay them a fee as brokerage, part of which goes to the stock exchange as
well.
Mutual funds: When a lot of shares are available on stock exchanges, you and me
don't know which companies to invest in. But let us say a guy named Sandip
Subherwal knows, and keeps track of the market daily. So we give him our money
and he buys and sells stocks for us. This is a mutual fund - it's our money (mutual),
and Sandip is a Fund Manager. There is a structure to this in India, so a fund manager
is part of an "asset management company (AMC)". To protect Sandip from running
away with our money, SEBI has some rules in place, and there are "trustees" for
every fund. With this structure the AMC issues "units" to us for the money we have
invested, and tells us how much our units are worth daily (NAV). We can then choose
to exit by selling our units back to the AMC ("redemption").
Mutual funds are not just restricted to shares. They are mutual investments, therefore
they can be anywhere. The common ones are equity (stocks and shares) and Debt.
Debt markets are where companies borrow money, but they want to borrow huge
sums of money that you and I don't have. Therefore, we pool in our money (mutual
fund) and give the big whole lot to the company at an interest. Even the government
borrows, but again, only large sums of money. Mutual funds can invest there too.
Debt is traditionally "safer" than equity since there is a fixed valuation and good
rating mechanisms to curb risk; and in the same vein, the profits (and losses) are
usually much lesser than equity.
Mutual funds can also invest in other investment avenues, like Gold, Real Estate, and
Commodities and even in Windmills! Of course, in India only a few of these are
available.
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
DATA ANALYSIS AND INTERPRETATION
Comparative Analysis of return for selected Mutual funds with Nifty Index:
Equity Diversified Asset (Rs. cr.)
NNAV
11 wk
1 mth
33 mth
6 6mth
11yr
22yr 3yr
y
55yr
SBI Magnum Emerging Busi (G) 506.89
447.01
00.7
33.4
99.1
66.2
13.9
26.6
164.8
59.6
Mirae India-China Consumption (G) 16.00
11.42
00.9
33.8
88.7
88.8
11.9
--
--
--
Birla SL Intl. Equity - A (G) 68.70
11.24
22.0
33.8
114.5
16.7
99.7
332.2
552.1
--
HDFC Midcap Opportunities (G) 1,860.2
8
16.45
00.2
--
88.5
66.9
55.7
220.8
1135.8
664.5
Franklin Asian Equity Fund (G) 186.92
12.11
22.0
22.9
88.2
111.7
55.5
221.9
446.6
--
Analysis of index
IIndex
AAssets
NNav 1w
k
11mth
33mth
66mth
11yr
22yr
33yr
55yr
SS&p cnx nifty
--
--
--
--1.66
114.52
77.13
--8.50
117.90 75.8
0
554.80
Interpretation:
According to compare the various schemes and index. The 1month of Mirae India-China
Consumption (G) & Birla SL Intl. Equity - A (G) having both same value of highest
of 3.8 compare to index of -1.66 and SBI Magnum Emerging Busi (G) having value of
1month 3.4 compare to index -1.66, lastly the Franklin Asian Equity Fund (G) of 2.9
for compare to index of -1.66 for 3moth of 14.50 and index value is 14.52 and for
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
Franklin Asian Equity Fund (G) having value of 11.52 and index is 14.52 and for
SBI Magnum Emerging Busi (G) is having of 9.1 is compare to index s and p cnx
nifty 50 is 14.52, for 8.7 is Mirae India-China Consumption (G) compare to index to
the value is highest. HDFC Midcap Opportunities (G) for having 8.5 compare to lowest
of index is highest of 3 month. Franklin Asian Equity Fund (G) for 8.2 values is to be
compare to the index is high and 6month of Franklin Asian Equity Fund (G is 11.7
compare to index of 7.13 is lowest to compare schemes fund next will be the
Mirae India-China Consumption (G) of 8.80 will lowest of index next the HDFC
Midcap Opportunities (G) having 6.9 compare to index highest to 7.13 next Birla SL
Intl. Equity - A (G) 6.90 is compare to index is high of 7.13, SBI Magnum Emerging
Busi (G) is lowest to compare to index of s&p cnx 50 of 7.13, for years when
compare to schemes the highest of Birla SL Intl. Equity - A (G) of 9.7 to be index is
-8.50 having low and for 2year for schemes to Birla SL Intl. Equity - A (G) of 32.20
to compare to index is having 17.90 and for 3year for schemes of HDFC Midcap
Opportunities (G) having 135.80 is highest to compare to index of 75.80 and for
5year the schemes of fund is HDFC Midcap Opportunities (G) 64.50 is compare to
the index of 54.80.
QUESTIONNAIRE
1. Table showing the Age group of respondents in SBI mutual funds
Age Group No of Respondents
Total Male Female
25-35 80 5 85
36-45 14 14
46-55 1 1
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
Male Female Total No of Respondents
0102030405060708090
25-3536-4546-55
Interpretation
According to survey age group between 25-35 age respondents are 80% of Male
and Female 5%, next is 36-45 age groups of respondents are 14% male and lastly
1% of Male 46-55 in mutual fund. So the Male is more than Female in invest in
Mutual Fund .
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
a. Table showing the Education Groups of respondents in SBI mutual funds
Options No of
respondents Total Male Fem
ale a
a Graduation/pg 50 4 54b
b Under graduate 11
1
12
cc Others 34 34
Graduation/pg Under graduate Others 0
10
20
30
40
50
60
Interpretation
According to survey the respondents are male 50% and female are 4% are
graduation and 11% of male and 15% are undergraduate and lastly 34% are male
others education.
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
b. Table showing the occupation Groups of respondents in SBI mutual funds
Options No of respondents Total Male Female
Aa Government servant 9 1 10
Bb Private servant 32 3 35
Cc Business Man 24 1 25
dd Agriculture 20 20
ee Others 10 10
Govern
ment s
ervan
t
Private
serva
nt
Business
Man
Agricu
lture
Others
010203040
Interpretation
According to survey the respondents of male of govt ser are 9% and female are1%
in invested in sbi mutual fund, next private ser male 32% and 3% are female and
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
agriculture 20% are male and lastly others are 10% are in investing sbi mutual
fund .
1. Are you aware about mutual fund and their operations?
Options No of respondents
Total
male femalea
a yes 70 3 73b
b No 25 2 27
yes No 0
10
20
30
40
50
60
70
80
Interpretation:
According to the survey the conducted maximum number of responds i.e. 70%
respondents Male and 3% of respondent female aware of mutual fund. And 27% both
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
Male and Female Are not aware about the mutual .So More respondents are aware the
mutual fund operations.
2. Are you aware about share market and their operations?
Options No of respondents
Total
male femalea
a yes 70 3 73b
b No 25 2 27
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
Options yes No 0
10
20
30
40
50
60
70
80
Interpretation:
According to the survey the conducted maximum number of respondents are 70% male
are aware about the share market and 3% of female aware of share market. Lastly 25%
of male not aware the share market So more number of male and compare to
female .
3. List the investment instruments you are currently owned/in the past.
Options No of respondentsa
a pension funds 18b
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
b Gold 37c
c equity stock 13d
d Bonds 32
pension funds Gold equity stock Bonds0
5
10
15
20
25
30
35
40
Interpretation:
According to the survey the conducted maximum number of responds i.e. 18%
respondents are investment instruments of pension funds, 37% respondents are
investment instruments from gold, 13% respondents are investment instruments from
equity stock and 32% respondents are investment instruments of bonds.
4. Are you aware of below mentioned scheme of investment in mutual fund?
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
Options No of respondentstotal
Male female
aa Equity schemes 36 3
39
bb Debt/income schemes 7 1 8
cc
liquid schemes 3
3
dd Hybrid schemes 3
3
ee fixed maturity plan 25 1
26
ff exchange traded fund 21 21
Options
Equity
schem
es
Debt/i
ncome s
chem
es
liquid sc
hemes
Hybrid
schem
es
fixed m
aturit
y plan
exch
ange
trad
ed fu
nd0
10203040
Interpretation:
According to the survey the conducted maximum number of responds i.e. 36% male and 3% female are aware about the equity schemes, 7% male are aware about the debt/ income schemes and 1% female are aware about the debt/income schemes, 3% respondents are aware about the hybrid schemes , 25% male are aware about the fixed maturity plan 1% female are aware about the fixed maturity plan ,lastly 21% male are aware about the exchange traded fund.
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
5. what kind of investment in mutual fund you have made so far ?please tick
Options
No of respondentsTotal Male Female
aa All applicable 33 5 38
bb Debt/income schemes 11 11
cc liquid schemes 7
7
dd Hybrid schemes 8 8
ee fixed maturity plan 14 14
ff exchange traded fund 19 19
Options
All applica
ble
Debt/i
ncome s
chem
es
liquid sc
hemes
Hybrid
schem
es
fixed m
aturit
y plan
exch
ange
trad
ed fu
nd0
10203040
Interpretation:
According to the survey the conducted maximum number of responds i.e. 33%
respondents are male investment in mutual fund and 5% female through all applicable,
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
11% respondents are male investment in mutual fund through debt/income, 7% male
respondents are investment in mutual fund through liquid schemes, 8%male
respondents are investment in mutual fund through hybrid schemes, 14% male
respondents are investment in mutual fund through fixed maturity plan, and 19% male
respondents are investment in mutual fund through exchange traded fund.
6. If you have invested in equity schemes , why did you prefer to invest ?
Options No of respondents a
a Liquidity 12b
b Low risk 26c
c high return 41d
d hedge against inflation 21
liquidity Low risk high return hedge against inflation 05
1015202530354045
Interpretation:
According to the survey 12% of respondent invested in equity schemes prefer to invest
their in liquidity , 26% of respondent invested in equity schemes prefer to invest in
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
low risk , 41% respondents prefer from high return, & 21% respondents prefer from
hedge against inflation.
7. If you have invested in debt schemes , why did you prefer to invest?
Options No of respondents a
a liquidity 12b
b Low risk 25c
c high return 42d
d hedge against inflation 21
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
liquidity Low risk high return hedge against inflation 0
5
10
15
20
25
30
35
40
45
Interpretation:
According to the survey 12% of respondent invested in debt schemes prefer to invest
their in liquidity , 25% of respondent invested in debt schemes prefer to invest in
low risk , 42% respondents prefer from high return, & 21% respondents prefer from
hedge against inflation.
8. what is your current attitude towards the following financial instruments, in the
Indian capital market ? Please tick
Options No of respondents
aa Highly favorable 37
bb Favorable 18
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
cc Somewhat favorable 35
dd Not very favorable 9
ee Not at all favorable 1
05
10152025303540
Interpretation:
According to the survey the maximum Respondents are favorable current attitude
towards financial instruments, in the Indian capital market i.e. in 37% are highly
favorable, favorable are 18% , somewhat favorable are 35%, not very favorable are 9%
& not at all favorable are 1% so the respondents are favorable with an current
attitude towards the financial.
9. You prefer investment in mutual fund due to (rank from 1 to 8 down)
Options No of respondents
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
aa Safety 10
bb Liquidity 23
cc Flexibility 19
dd Good return 19
ee tax benefit 16
ff diversification benefit 13
Safety Liquidity Flexibility Good return tax benefit diversification benefit
0
5
10
15
20
25
Interpretation:
According to survey the maximum respondents i.e. prefer for investment in
mutual fund are 10%, liquidity are 23%,flexibility are 19%,good return are 19%, tax
benefit are 16% & diversification are 13%. So the respondents are mainly on liquidity
to have the benefited.
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
10. There are many qualities that could affect your selection of investment
Schemes please indicate importance of following in your decision.
Highly Important
Important
Some whatImportant
Not veryImportant
Not at allimportant
fund Performance record
75 17
4
1
Reputation or brand name
47 45 5 2
Portfolio of investment
62 33 5 1
Withdrawal facilities
27 46 21 5
Tax benefit 68 26 6 2Entry & Exit load
51 36 7 2 1Minimum Initial Investment 59 29 10
fund Perform
ance
record
Portfolio
of in
vestm
ent
Tax b
enefi
t
Options 0
1020304050607080
Highly ImportantImportantImportantSome what ImportantSome what ImportantNot very ImportantNot very ImportantNot at all important
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
Interpretation:
According survey the no of respondents are 75% are highly important for selection
of investment for performance,17% are important to investment, 4% are somewhat
important investment , and 1% are investment. Second reputation for brand name
for 47% for highly important ,45% are important , 5% are somewhat important ,
lastly 2% are not very important ,third will be the portfolio of investment 62% in
highly important 33% were important 5% are somewhat important 1% were not
more important, fourth withdrawn the facilities 27% were important 46% important
21% were some important ,5% were not very important ,fifth tax benefit 68%
important 26% were important 6% were some what important 2% were not very
important, sixth entry and exit load of 51% were highly important 36% important 7%
somewhat important 2% were not very important 1% were not at all important and
lastly minimum initial investment 59% were highly important 29% important 10%
somewhat important.
11. Do you interest to investment in mutual fund / equity. Schemes please tick
Options No of respondents Total Male Female
Aa Yes 95 3 98
B
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
b No 2 2
Options Yes No 0
20
40
60
80
100
120
Interpretation:
According to survey the maximum number of respondents i.e. interest to
investment in mutual / equity schemes in 95% are male interest to investment in
mutual fund and 3%female in mutual /equity schemes & 2% male respondents are
not interested to investment in mutual fund and equity schemes.
12. How often do you monitor your portfolio of customer?
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
Options No of respondents a
a Daily -b
b Weekly -c
c Twice in a month 25d
d Monthly 33e
e More than a month 42
Twice in a month Monthly More than a month 0
5
10
15
20
25
30
35
40
45
Interpretation:
According to survey the maximum respondent’s i.e. In daily & weekly bases respondent
s are not monitoring the portfolio to customers so in twice in a month are 25% ,
monthly are 33% , & more than a month are 42% for monitor the portfolio of
customers .
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
13. While investing you are more concerned about
Options No of respondents a
a Safety of principal 25b
b Earning interest above the inflation rate 39c
c Earning high return 36
Safety of principal Earning interest above the inflation rate
Earning high return 0
5
10
15
20
25
30
35
40
45
Interpretation:
According to survey the maximum respondent’s i.e. investing to concern about the
safety of principal are 25% , earning interest above the inflation are 39% & mainly
concern about the return are 36% in concern for investing in mutual fund.
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14. Approach in making investment
Options No of respondents a
a You take educated view on the investment 29b
b You take friendly advice and make decision 27c
c You rely totally on your investment advisors 44
You take educated view on the investment
You take friendly advice and make decision
You rely totally on your investment advisors
0
5
10
15
20
25
30
35
40
45
50
Interpretation:
According this survey the respondents are approach to take the guide of
educated person are 29%, friendly guide decision are 27%, & totally considered
for advisors to approach to investment are 44% so the investment in make the
finally concern for advisors.
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15. If you have invested in equity shares , what is your expected return
Options No of respondentsa
a 10-15 % 43b
b 15-25 % 25c
c 25-35 % 21d
d 35-above % 11
10-15 % 15-25 % 25-35 % 35-above % 0
5
10
15
20
25
30
35
40
45
50
Interpretation:
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According to survey the respondents are equity shares expected return the
respondents are 43% are return of 10-15%, 25% respondents are return of 15-25%,
21% respondents are return of 25-35%, & 11% respondents are return of 35% so
that the average respondents are prefer for the advisors to gain in invested in
fund.
FINDINGS SUGGESTION AND CONCLUSION
FINDINGS
In Bellary in the Age Group of 25-35years were 80% male 5% female in numbers.
The Investors were in the age group of 36-45 years 14% and the least were in the age
group of above 46- 55 years 1% were investors.
In education group , most of the graduation of male 50%, female 4% and under
graduate 11% and 1% female and others 34% were investors.
In Occupation Group, Most of the Investors Consist of Private Employees with 32%
of male and 3% of female , The next Consist Investors Were Govt. Employees
male 9% and 1% female , And the Least Were Associated with others , Business of
male 24%and female 1% and lastly agriculture were male 20% in investors.
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INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITY SHARES TOWARDS SBI MUTUAL FUND
Only 70% male Respondents were aware about Mutual fund and 3% female aware
about mutual fund its operations and 25% male and female 2% were not aware of
mutual fund.
In 70% of respondents are male and 3% aware share market their operation
and 25% of male and 2% of female share market not aware operation .
Only respondents of pension funds of 18% , gold with 37%, equity stock 13% and
lastly 32% of bonds to be currently owned in the past.
Only 36% male and 3% female equity schemes of investment in mutual
fund ,debt/income schemes 7% male and 1% female of investment in mutual
fund ,liquid 3% of male in investment of mutual fund, hybrid 3% male of
investment in mutual fund, fixed maturity 25% of male and 1% were investment in
mutual fund, lastly exchange traded in 21% of investment in mutual fund.
Only 33% respondents of male and female 5% of for applicable for invest,
debt/income male 11%, 7% male for invest in mutual fund, hybrid schemes 8%,
for fixed maturity plan 14% and lastly exchange traded fund for 19% for invest
in mutual fund.
In liquidity for equity schemes of 12%, low risk for 26%, high return for 41%, and
lastly hedged against inflation of 21%.
In invest prefer liquidity 12% and for low risk 25% prefer for high return 42%
and lastly hedged inflation to the investors of 21% were preferred.
The current attitude towards of highly favorable of 37%, 18% for favorable
some favorable 35%, not very favorable 9% and not at all favorable is least of
1%.
The prefer investment for safety is 10% and liquidity for 23% and flexibility
19%, good return 19%, tax benefit 16% and lastly diversify the benefit 13% for
in mutual fund.
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The affect the qualities of investors in performance and reputation, portfolio
investment , withdrawn facilities and tax benefits , entry load and exit load for
lastly minimum initial investment for least for 1% in not very important.
The interest of investors were 95% male and 3% female and lastly 2% female
were not interest to invest.
In monitor the portfolio the twice in a month of 25% monthly 33% and lastly
more than month of 42% were more monitor in customers.
While investing the safety of principal of 25%, earning interest for inflation
rate for 39% and lastly for earning high return for 36% to be concerned.
29% of Investors preferred to Invest through educated person , 27% of investors
preferred for friendly and lastly prefer for 44% advisors.
In equity shares for percentage of 10-15 for 45%, 15-25% of equity of return to
the 25%, 25-35 of 21% and lastly 35 above were 11% to invested in equity
shares.
Maximum Number of Investors Preferred Growth Option for returns, the next
preferred income and then finally balance fund.
SUGGESTIONS
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 to invest.
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.
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Younger people aged fewer than 35 will be a key new customer group in 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.
Investors must be communicated about the schemes on regular basis
Company must offer new and attractive schemes to the investors.
The investment potential is more in rural areas measures should be taken to create
awareness amongst the rural people.
The extensive training should be given to the executives in the company. Besides, the
company should conduct seminars to the customers about various financial services.
The most of the problem spotted is the ignorance. investors should be made aware
of the benefits , no body will invest until and unless he is fully convinced.
The mutual fund offer a lot of benefits which no other single options could
offer.
The advisors should target for more and more young investors. The 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.
Conclusion:
Running a successful mutual fund requires complete understanding of the
peculiarities of the small investors. This study has made an attempt to understand
the financial investment of mutual fund investors in connection with the
preference of brand , products etc.
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I observed that many of people have fear of mutual fund . They think their money
will not be secure in mutual fund.
Many 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. Some of the AMC 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.
Lastly I thank our institute and the university as well providing such an
opportunity of learning and understanding the various function and process of the
organization practically. Where it is possible for me to make an attempt to apply
theoretical aspects in the organization and most importantly decision making in the
organization.
ANNEXURE:
QUESTIONNAIRE
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Dear Sir/Madam,
I KARTHEEK.G.S, a student of Bellary institute of technology & management, Bellary doing my dissertation on “A STUDY ON INVESTORS CHOICE OF INVESTMENT BETWEEN MUTUAL FUND (EQUITY SCHEMES) AND EQUITYSHARES ”, as a part of my MBA (Master of Business Administration) curriculum. I request you to fill the questionnaire and help me in completing the project. I assure you that the information provided will be kept strictly confidential and used for academic purposes only.
1. Personal Details: (A). Name: ___________________ (b). Age: _____________________ (c). qualification: Graduation/PG [ ] under graduate [ ] others [ ] (d). occupation please tick ( ) Govt.ser [ ] Pvt.ser [ ] Business [ ] Agriculture [ ] others [ ] (e).What is your income per Month? Please tick ( ) Up to. 10,000 [ ] 10,001 to 15000 [ ] 15,001 to 20000 [ ] 20,001 to30000 [ ] 30,001 and above [ ]
2. Are you aware about mutual fund and their operations? a. Yes [ ] b. No [ ]
3. Are you aware about share market and their operations? a. Yes [ ] b. No [ ]4. List the investment instruments you are currently owned/in the past. a. pension funds [ ] b. Gold [ ] c. equity stock [ ] d. Bonds [ ]5. Are you aware of below mentioned scheme of investment in mutual fund? a. Equity schemes [ ] b. Debt/income schemes [ ] c. liquid schemes [ ] d.Hybrid schemes [ ] e. fixed maturity plan [ ] f. exchange traded fund [ ]
6.what kind of investment in mutual fund you have made so far ?please tick a. All applicable [ ] b. Debt/income schemes [ ] c. liquid schemes [ ] d. Hybrid schemes [ ] e. fixed maturity plan [ ] f. exchange traded fund [ ]
7. If you have invested in equity schemes , why did you prefer to invest ? a. Liquidity [ ] b. Low risk [ ] c. high return [ ] d. hedge against inflation [ ]
8.if you have invested in debt schemes , why did you prefer to invest.
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a. liquidity [ ] b. Low risk [ ] c. high return [ ] d. hedge against inflation [ ]
9.what is your current attitude towards the following financial instruments, in the Indian capital market ? Please tick
Highlyfavorable
Favorable Some whatfavorable
Not veryfavorable
Not at allfavorable
10. You prefer investment in mutual fund due to (rank from 1 to 8 down) a. Safety [ ] b. Liquidity [ ] c. Flexibility [ ] d. Good return [ ] e. tax benefit [ ] f. diversification benefit [ ]
11. There are many qualities that could affect your selection of investmentSchemes please indicate importance of following in your decision.
Highly Important
Important Some whatImportant
Not veryImportant
Not at allimportant
I. Fund related Qualitiesfund Performance recordReputation or brand namePortfolio of investmentWithdrawal facilitiesTax benefitEntry & Exit loadMinimum Initial Investment
12. Do you interest to investment in mutual fund / equity. Schemes please tick a. Yes [ ] b. No [ ]13. How often do you monitor your portfolio of customer? a. Daily [ ] b. Weekly [ ] c. Twice in a month [ ] d. Monthly [ ] e. More than a month [ ] 14. While investing you are more concerned about a. Safety of principal [ ] b. Earning interest above the inflation rate [ ] c. Earning high return [ ] 15. Approach in making investment
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a. You take educated view on the investment [ ] b. You take friendly advice and make decision [ ] c. You rely totally on your investment advisors [ ]
16. if you have invested in equity shares , what is your expected return a. 10-15 % [ ] b. 15-25 % [ ] c. 25-35 % [ ] d.35-above % [ ]
BIBLIOGRAPHY
Text Books
Research Methodology - Kothari
Websites
mutual fund hand book
www.SBImf.com
www.moneycontrol.com
www.amfiindia.com
Www. mutualfundsindia.com
Www. sebi.com
Www. bseindia.com
Nse .com
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