A

PROJECT REPORT
ON

AWARENESS OF MUTUAL FUND WITH

SPECIAL EMPHASIS ON GOLD FUND

Submitted in partial fulfillment for

MASTER OF BUSINESS ADMIMISTRATION

Program of

R.A. PODAR INSTITUTE OF MANAGEMENT

Submitted by: -

Under Guidance:-

SURBHI BAIRAGI

Mr.PRAVEEN SAINI

MBA (Two Year Program)

Channel Head- SBG

ACKNOWLEDGEMENT
Before we get into thick of things, I would like to add a few words of appreciation for the
people who have been a part of this project right from its inception. The writing of this project has
been one of the significant academic challenges I have faced and without the support, patience, and
guidance of the people involved, this task would not have been completed. It is to them I owe my
deepest gratitude.
It gives me immense pleasure in presenting this project report on Awareness of Mutual
Funds with special emphasis on gold fund. It has been my privilege to have a team of project
guide who have assisted me from the commencement of this project. The success of this project is a
result of sheer hard work, and determination put in by me with the help of my project guide. I
hereby take this opportunity to add a special note of thanks for Mr Praveen Saini, who undertook
to act as my mentor despite his many other professional commitments. His wisdom, knowledge,
and commitment to the highest standards inspired and motivated me. Without his insight, support,
and energy, this project wouldn't have kick-started and neither would have reached fruitfulness.
I convey my heart full thanks to the staff members of SBI Mutual funds, with their help and
corporation.
Last but not least, I would like to thank My family and Friends for their full cooperation &
continuous support during the course of this assignment.
The project is dedicated to all those people, who helped me while doing this project.
Surbhi Bairagi

EXECUTIVE SUMMARY

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

The second part of the Project consists of data and its analysis collected through
survey done on 100 people. For the collection of Primary data I made a questionnaire
and surveyed of 100 people. I also taken interview of many People those who were
coming at the SBI Branch where I done my Project. I visited other AMCs in Jaipur to
get some knowledge related to my topic.

This Project covers the topic Awareness

of SBI Mutual FUND with special emphasis on gold fund . The data collected has
been well organized and presented. I hope the research findings and conclusion will
be of use.

CONTENTS

Acknowledgement
Declaration
Executive Summary

Chapter - 1

INTRODUCTION

Chapter - 2

COMPANY PROFILE

Chapter - 3

SBI GOLD FUND

Chapter - 4

RESEARCH METHODOLOGY

Chapter - 5

DATA ANALYSIS AND INTERPRETATION

Chapter - 6

FINDINGS AND CONCLUSIONS

Chapter - 7

SUGGESTIONS & RECOMMENDATIONS

BIBLIOGRAPHY

Chapter - 1
Introduction

Overview of Mutual Funds

Mutual Fund investments are Collective Investment Schemes, which collect contribution from the
subscribers and invest them in a variety of transferable assets such as ordinary shares and bonds.
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
appreciation realized by the scheme is shared by its unit holders in proportion to the number of units
owned by them. These Trusts are run by experienced Investment Managers who use their
knowledge and expertise to select individual securities, which are classified to form portfolios that
meet predetermined objectives and criteria.
Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity
to invest in a diversified, professionally managed portfolio at a relatively low cost. The small
savings of all the investors are put together to increase the buying power and hire a professional
manager to invest and monitor the money. Anybody with an investible
surplus of as little as a few thousand rupees can invest in Mutual Funds. Each Mutual Fund
scheme has a defined investment objective and strategy. These portfolios are then sold to the public.
They offer the investors the following main services.

What is a Mutual Fund?

A Mutual Fund is a body corporate that pools the savings of a number of investors and invests the
same in a variety of different financial instruments, or securities. The income earned through these
investments and the capital appreciation realized by the scheme is shared by its unit holders in
proportion to the number of units owned by them. Mutual funds can thus be considered as financial
intermediaries in the investment business that collect funds from the public and invest on behalf of
the investors. The losses and gains accrue to the investors only. The Investment objectives outlined
by a Mutual Fund in its prospectus are binding on the Mutual Fund scheme.
Investments in securities are spread across a wide cross-section of industries and sectors and thus
the risk is reduced. Diversification reduces the risk because all stocks may not move in the same
direction in the same proportion at the same time. Mutual fund issues units to the investors in
accordance with quantum of money invested by them.
In a mutual fund, the fund manager trades the fund's underlying securities, realizing capital gains or
loss, and collects the dividend or interest income. The mutual funds normally come out with a
number of schemes with different investment objectives which are launched from time to time. A
mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) which
regulates securities markets before it can collect funds from the public.
The investment objectives specify the class of securities a Mutual Fund can invest in. Mutual Funds
invest in various asset classes like equity, bonds, debentures, commercial paper, government
securities and call money market. Mutual fund companies are also called as

Asset Management Companies (AMC) because it is a highly regulated organization that

pools money from investors and invests the same in a portfolio. They charge a small management
fee, which is normally 2.25 per cent of the total funds manage.

Mutual Fund Framework

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 them. The history of mutual funds in India
can be broadly divided into four distinct phases
First Phase 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the
Reserve Bank of India and functioned under the Regulatory and administrative control of the
Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development
Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first
scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6, 700 crores of
assets under management.
Second Phase 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and
Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI
Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Can bank
Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund
(Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual
fund in June 1989 while GIC had set up its mutual fund in December 1990. At the end of 1993, the
mutual fund industry had assets under management of Rs.47, 004 crore.
Third Phase 1993-2003 (Entry of Private Sector Funds)
With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry,
giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the
9

first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to
be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton)
was the first private sector mutual fund registered in July 1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised
Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund)
Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign mutual funds setting up
funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of
January 2003, there were 33 mutual funds with total assets of Rs. 1, 21,805 crore. The Unit Trust of
India with Rs.44, 541 crore of assets under management was way ahead of other mutual funds.
Fourth Phase since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into
two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under
management of Rs.29, 835 crore as at the end of January 2003, representing broadly, the assets of
US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust
of India, functioning under an administrator and under the rules framed by Government of India and
does not come under the purview of the Mutual Fund Regulations.

Types of Mutual Funds

1. Equity /growth fund: - This is a scheme that invests only in equity. When investing in stocks,
you cannot be sure of your investment tenure or returns. As a thumb-rule, the longer a stock is held,
the higher the gains. You stand a better chance of a substantial appreciation if you invest in stockbased funds.
Stocks are categorized by their market capitalization into small, medium or large, and MFs are
accordingly classified as large-cap, mid-cap or small-cap funds. The NAV of an equity scheme will
fluctuate with the stock market.
2. Sector fund:- An equity scheme that invests in shares of companies operating in specific
industries is called a sector fund. For instance, a pharmacy fund would invest only in
pharmaceutical companies. Sector funds are risky as they are susceptible to cyclical influencesit
is unlikely that the market will favor a particular sector for too long.
3. Equity-linked savings schemes: - The major portion of investment in ELSS schemes is in equity
and offers 20 per cent tax rebates under section 88, subject to a maximum investment of Rs 100000
10

annually. Dividends are tax-free. As an ELSS is linked to the market, it can earn substantially more
than other Section88 schemes, which offer fixed rates of return to a maximum of 11 per cent.
4. Debt funds: - This fund invests in fixed income instruments such as debentures (bonds) and
various money market instruments. Here, both returns and investment tenure are stated at the time
of investing. Bonds can be issued by companies or by the government (state or central). Bonds are
rated by independent credit rating agencies such as Crisil/CARE/ICRA, which verify the companys
ability to honour its interest commitments. The NAV of a debt fund does not fluctuate as mush as
that of an equity fund.
5. Gilt fund:- Gilts are securities issued by the central government and are said to carry sovereign
or minimal risk.

6. Money market fund:- This fund invests exclusively in money market instruments. Including
commercial paper, commercial bills, treasury bills, government securities with an unexpired
maturity of up to one year, call or notice money, certificate of deposit, usance bills and other
instruments specified by the RBI. These funds have a minimum lock-in period of 15 days. Till
recently, the RBI regulated money market funds but they now come under sebi .
7. Liquid fund:- A liquid fund is the same as a money market fund, but avoids a lock-in period.
Most of them lock funds in for up to three days to protect against banking procedural inefficiencies.
Used as an alternative to current account balances, a liquid fund is ideally suited to investors who
want to park their funds for a very short timeseven to eight days. Consequently, fund houses
process redemption requests within 24 hours instead of the standard three working days. The
minimum in these funds is Rs 25,000.

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8. Balanced fund:- Balanced schemes invest in both equity and debt, with 50-75 per cent in equity
and the rest in debt. It is important to know the stock to bonds ratio in a fund to understand the risks
and rewards structure.
9. Funds of funds:- Funds of funds (FoF) are mutual funds which invest in other underlying mutual
funds (i.e., they are funds comprised of other funds). The funds at the underlying level are typically
funds which an investor can invest in individually. A fund of funds will typically charge a
management fee which is smaller than that of a normal fund because it is considered a fee charged
for asset allocation services. The fees charged at the underlying fund level do not pass through the
statement of operations, but are usually disclosed in the fund's annual report, prospectus, or
statement of additional information.

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10. Load Fund and No Load Fund:- A Load Fund is one that charges a percentage of NAV for
entry or exit. That is, each time one buys or sells units in the fund, a charge will be payable. This
charge is used by the mutual fund for marketing and distribution expenses. Suppose the NAV per
unit is Rs.10. If the entry as well as exit load charged is 1%, then the investors who buy would be
required to pay Rs.10.10 and those who offer their units for repurchase to the mutual fund will get
only Rs.9.90 per unit. The investors should take the loads into consideration while making
investment as these affect their yields/returns. However, the investors should also consider the
performance track record and service standards of the mutual fund which are more important.
Efficient funds may give higher returns in spite of loads.
A no-load fund is one that does not charge for entry or exit. It means the investors can enter the
fund/scheme at NAV and no additional charges are payable on purchase or sale of units.
RISKS ASSOCIATED WITH MUTUAL FUNDS:Investing in Mutual Funds, as with any security, does not come without risk. One of the most basic
economic principles is that risk and reward are directly correlated. In other words, the greater the
potential risk the greater the potential return. The types of risk commonly associated with Mutual
Funds are:
1) MARKET RISK
Market risk relates to the market value of a security in the future. Market prices fluctuate and are
susceptible to economic and financial trends, supply and demand, and many other factors that
cannot be precisely predicted or controlled.
2) POLITICAL RISK
Changes in the tax laws, trade regulations, administered prices, etc are some of the many political
factors that create market risk. Although collectively, as citizens, we have indirect control through
the power of our vote individually, as investors, we have virtually no control.
3) INFLATION RISK
Interest rate risk relates to future changes in interest rates. For instance, if an investor invests in a
long-term debt Mutual Fund scheme and interest rates increase, the NAV of the scheme will fall
because the scheme will be end up holding debt offering lower interest rates.
4) BUSINESS RISK
Business risk is the uncertainty concerning the future existence, stability, and profitability of the
issuer of the security. Business risk is inherent in all business ventures. The future financial stability
13

of a company cannot be predicted or guaranteed, nor can the price of its securities. Adverse changes
in business circumstances will reduce the market price of the companys equity resulting in
proportionate fall in the NAV of the Mutual Fund scheme, which has invested in the equity of such
a company.
5) ECONOMIC RISK
Economic risk involves uncertainty in the economy, which, in turn, can have an adverse effect on a
companys business. For instance, if monsoons fail in a year, equity stocks of agriculture-based
companies will fall and NAVs of Mutual Funds, which have invested in such stocks, will fall
proportionately.

Advantages of Mutual Fund:-

Professional Expertise
Fund managers are professionals who track the market on an on-going basis. With their mix of
professional qualification and market knowledge, they are better placed than the average investor to
understand the markets.
Diversification
Since a Mutual Fund scheme invests in number of stocks and/or debentures, the associated risks are
greatly reduced.
Relatively less expensive

14

When compared to direct investments in the capital market, Mutual Funds cost less. This is due to
savings in brokerage costs, demat costs, depository costs etc.
Liquidity
Investments in Mutual Funds are completely liquid and can be redeemed at their Net Assets Valuerelated price on any working day.
Transparency
You will always have access to up-to-date information on the value of your investment in addition
to the complete portfolio of investments, the proportion allocated to different assets and the fund
managers investment strategy.
Flexibility
Through features such as Systematic Investment Plans, Systematic Withdrawal Plans and Dividend
Investment Plans, you can systematically invest or withdraw funds according to your needs and
convenience.
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.
Choice of Schemes
Mutual Funds offer a variety to enable investors to take advantage of opportunities not only in the
equity, debt, and money markets but also in specific industries and sectors.
SEBI regulated market
All Mutual Funds are registered with SEBI and function within the provisions and regulations that
protect the interests of investors. AMFI is the supervisory body of the Mutual Funds industry

Disadvantages of Mutual Fund

Mutual funds also have features that some investors might view as disadvantages, such as:
Costs despite Negative Returns
Investors must pay sales charges, annual fees, and other expenses (which we'll discuss below)
regardless of how the fund performs. And, depending on the timing of their investment, investors
may also have to pay taxes on any capital gains distribution they receive even if the fund went
on to perform poorly after they bought shares.
Lack of Control

15

Investors typically cannot ascertain the exact make-up of a fund's portfolio at any given time, nor
can they directly influence which securities the fund manager buys and sells or the timing of those
traders.
Price Uncertainty
With an individual stock, you can obtain real-time (or close to real-time) pricing information with
relative ease by checking financial websites or by calling your broker. You can also
monitor how a stock's price changes from hour to hour or even second to second. By contrast,
with a mutual fund, the price at which you purchase or redeem shares will typically depend on the
fund's NAV, which the fund might not calculate until many hours after you've placed your order.
In general, mutual funds must calculate their NAV at least once every business day, typically after
the major U.S. exchanges close.
MUTUAL FUND INVESTING STRATEGIES:
1. Systematic Investment Plans (SIPs)
These are best suited for young people who have started their careers and need to build their wealth.
SIPs entail an investor to invest a fixed sum of money at regular intervals in the Mutual fund
scheme the investor has chosen, an investor opting for SIP in xyz Mutual Fund scheme will need to
invest a certain sum on money every month/quarter/half-year in the scheme.
2. Systematic Withdrawal Plans (SWPs)
These plans are best suited for people nearing retirement. In these plans, an investor invests in a
mutual fund scheme and is allowed to withdraw a fixed sum of money at regular intervals to take
care of his expenses
3. Systematic Transfer Plans (STPs)
They allow the investor to transfer on a periodic basis a specified amount from one scheme to
another within the same fund family meaning two schemes belonging to the same mutual fund. A
transfer will be treated as redemption of units from the scheme from which the transfer is made.
Such redemption or investment will be at the applicable NAV. This service allows the investor to
manage his investments actively to achieve his objectives. Many funds do not even charge any
transaction fees for his service an added advantage for the active investor.

16

Financial Aspects of Mutual Funds:

Net Asset Value:
Before venturing into the market related functional aspects of Mutual funds, it is important to
understand the evaluation criteria of these funds. Just as a business is evaluated by the level of its
profits, a mutual fund is assessed on the basis of its net asset value, as explained below. The net
asset value of the fund is the cumulative market value of the assets fund net of its liabilities. In other
words, if the fund is dissolved or liquidated, by selling off all the assets in the fund, this is the
amount that the shareholders would collectively own. This gives rise to the concept of net asset
value per unit, which is the value, represented by the ownership of one unit in the fund. It is
calculated simply by dividing the net asset value of the fund by the number of units. However, most
people refer loosely to the NAV per unit as NAV, ignoring the "per unit". We also abide by the same
convention.
Calculation of NAV
The most important part of the calculation is the valuation of the assets owned by the fund. Once it
is calculated, the NAV is simply the net value of assets divided by the number of units outstanding.
The detailed methodology for the calculation of the asset value is given below.
Asset value is equal to
Sum of market value of shares/debentures
+ Liquid assets/cash held, if any
+ Dividends/interest accrued Amount due on unpaid assets Expenses accrued but not paid
Asset Management Company (AMC):
An Asset Management Company or AMC is the investment manager of the respective trust, which
is entitled to invest in different securities on behalf of unit holders, in line with the objectives of
respective schemes.
Load:
The charge collected by a Mutual Fund from an investor for selling the units or investing in it.
Entry load:

17

When a charge is collected at the time of entering into the scheme it is called an Entry load or
Front-end load or Sales load. The entry load percentage is added to the NAV at the time of
allotment. .
Exit load:
An Exit load or Back-end load or Repurchase load is a charge that is collected at the time of
redeeming or for transfer between schemes (switch). The exit load percentage is deducted from the
NAV at the time of redemption or transfer between schemes.
Systematic Investment Plan:
Systematic Investment Plan is normally offered by many open-ended mutual funds in order to
encourage regular investments. This plan allows an investor to purchase additional units of the
Scheme by investing fixed amount of rupees every month/quarter. The beauty of the plan is that as
the market falls the number of units purchased by the investor increases as the purchases are linked
to the NAV. This concept is called Rupee Cost Averaging. Rupee Cost Averaging does not guarantee
a profit or protect against a loss. Rupee Cost Averaging can smooth out the market's ups and downs
and reduce the risk of investing in volatile markets.

Systematic Withdrawal Plan:

The unit holder may set up a Systematic Withdrawal Plan on a monthly, quarterly or semi-annual or
annual basis to redeem a fixed number of units
Price/Earnings Ratio:
Abbreviated as P/E Ratio or P/E. Sometimes referred to as the "multiple." Calculated by dividing
the stock's current price by the company's current annual earnings per share, usually from the last
four quarters (known as the Trailing P/E Ratio), but sometimes from the estimates of the earnings
expected in the next four quarters (the Projected P/E ratio), or from the sum of the last two actual
quarters and the estimates of the next two quarters. In and of itself, the P/E Ratio tells very little, but
can be usefully compared to the P/E Ratios of other companies in the same industry, or to the
market in general, or to the company's own historical P/E Ratios, in order to determine how much
the market is currently willing to pay for a share of the company's earnings.
BY MARKET CAPITALISATION

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Market capitalization: Stock Funds are often grouped by the size of the companies they invest in
big, small or tiny. By size we mean a company's value on the stock market: the number of shares it
has outstanding multiplied by the share price. This is known as market capitalization.
X Big companies tend to be less risky than small companies. But smaller companies can often offer
more growth potential. The best idea is probably to have a mix of funds gives an exposure to largecap, midsize and small companies.
X A fund's market capitalization will indicate whether the fund emphasizes the stocks of blue-chip
companies with large market capitalizations, emerging companies with small capitalizations, or
something in between.
a) Large Cap Funds:
Large cap funds invest their assets primarily in companies, which have a sizable market
capitalization. Different fund houses define `Sizable'
is usually mentioned in the fact sheets for the investor's benefit. For instance, in its IPO (Franklin
Flexi Cap), Templeton defined large caps as companies with a market capitalization in excess of Rs
15 (Rs 1,500 crores). Companies below this threshold were categorized as mid/small caps. X
Investing in large caps is a lower risk-lower return proposition (vis--vis mid cap stocks), because
such companies are usually
widely researched and information is widely available. X Large-cap funds are less volatile than
funds that invest in smaller companies. Usually, that means we can expect smaller returns but stable
returns.
b) Mid Cap Funds:
These funds invest in companies that have a lower market capitalization than the large caps. For
instance, Sundaram Mutual Fund defines mid caps as stocks with a market capitalization of less
than Rs 18 bn. However, this level varies from fund house to fund house. As with large caps, BSE
(BSE Mid Cap 200) and S&P CNX (S&P CNX Mid Cap 200) have designed their own indices for
mid cap stocks. X Investments in mid caps are a riskier proposition as compared to investments in
large cap funds. In fact, a mid cap stock could well graduate to a large cap over the years giving the
investor a significant return on his investment.
c) Small Cap Funds:

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Small cap funds invest in companies with a smaller market capitalization. (Sundaram SMILE) Sundaram Mutual Fund defined small caps as stocks with a market capitalization of less than Rs 2
bn. investing in small cap funds is fraught with considerable risk. X Small cap companies in most
cases are just evolving. Again,
as with mid caps, information on small caps is not easily available so these companies are underresearched or maybe not researched at all. So we are contending with a relatively unknown entity
here. X However, the risk-return trade-off is much higher vis--vis large caps and mid caps. X
The volatility of the fund often depends on the aggressiveness of the manager. Aggressive small-cap
managers will buy hot
growth and technology companies, taking high risks in hopes of high rewards. More conservative
"value" managers will look for companies that have been beaten down temporarily by the stock
market. Currently this is a niche segment as there is no fund investing purely in small cap stocks.
Sundaram SMILE is probably the first small cap fund of its kind.
d) Multi/Flexi-Cap Funds:
Just about every second mutual fund IPO these days is a multi/flexi cap fund. X the fund manager
has the mandate to shift across market capitalizations depending on the growth opportunity. X This
is generally dictated by the market happenings i.e. which sector is driving growth at a given time or
which market segment (market capitalization) is witnessing the latest rally. X but generally, there's
a ceiling on how far the fund manager can go in a particular market segment or sector. This helps in
keeping the portfolios relatively diversify.

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Chapter 2
Company Profile

21

INTRODUCTION TO SBI MUTUAL FUND

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
Socit Gnrale Asset Management (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 investment for millions of investors. The
trust reposed on us by over 4.6 million investors is a genuine tribute to 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 Centers, 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.
PRODUCTS OF SBI MUTUAL FUND
Equity schemes
The investments of these schemes will predominantly be in the stock markets and endeavor
will be to provide investors the opportunity to benefit from the higher returns which stock
markets can provide. However they are also exposed to the volatility and attendant risks of
stock markets and hence should be chosen only by such investors who have high risk taking
capacities and are willing to think long term. Equity Funds include diversified Equity
Funds, Sectoral Funds and Index Funds. Diversified Equity Funds invest in various stocks
across different sectors while sectoral funds which are specialized Equity Funds restrict
their investments only to shares of a particular sector and hence, are riskier than Diversified
22

Equity Funds. Index Funds invest passively only in the stocks of a particular index and the
performance of such funds move with the movements of the index.

Magnum COMMA Fund

Magnum Equity Fund

Magnum Global Fund

Magnum Index Fund

Magnum Midcap Fund

Magnum Multicap Fund

Magnum Multiplier plus 1993

Magnum Sectoral Funds Umbrella

MSFU- Emerging Business Fund
MSFU- IT Fund
MSFU- Pharma Fund
MSFU- Contra Fund
MSFU- FMCG Fund

SBI Arbitrage Opportunities Fund

SBI Blue chip Fund

SBI Infrastructure Fund - Series I

SBI Magnum Taxgain Scheme 1993

SBI ONE India Fund

SBI TAX ADVANTAGE FUND - SERIES I

Debt schemes
Debt Funds invest only in debt instruments such as Corporate Bonds, Government
Securities and Money Market instruments either completely avoiding any investments in
the stock markets as in Income Funds or Gilt Funds or having a small exposure to equities
as in Monthly Income Plans or Children's Plan. Hence they are safer than equity funds. At
the same time the expected returns from debt funds would be lower.

23

Such investments are advisable for the risk-averse investor and as a part of the investment
portfolio for other investors.

Magnum Childrens benefit Plan

Magnum Gilt Fund

Magnum Income Fund

Magnum Insta Cash Fund

Magnum Income Fund- Floating Rate Plan

Magnum Income Plus Fund

Magnum Monthly Income Plan

Magnum Monthly Income Plan - Floater

Magnum NRI Investment Fund

SBI Premier Liquid Fund

Balanced schemes
Magnum Balanced Fund invests in a mix of equity and debt investments.
Hence they are less risky than equity funds, but at the same time provide
commensurately lower returns. They provide a good investment opportunity
to investors who do not wish to be completely exposed to equity markets, but
is looking for higher returns than those provided by debt funds.

Magnum Balanced Fund

24

CHAPTER-3
SBI GOLD FUND

25

Why invest in gold?

For centuries, gold has been considered a symbol of security & prosperity. Indians buy or present
gold extensively on important occasions, be it a wedding or some religious festival. It is considered
to be one of the safest forms of storing wealth. These aspects of Indian culture has made India the
world's largest consumer of gold.
Consistent asset class:
Gold as an investment asset has given positive returns (in USD) for each calendar year during the
last decade outpacing most of asset classes.
Hedge against other asset class:
Gold, as an asset class has low correlation with other asset classes like equity and bonds. It has low
correlation with economic downturn in volatile times and is a good hedge against inflation. Coupled
with strong appreciation for over a decade, Gold has emerged as an important asset class for
investments in one's portfolio.
Diversification:
Easy and convenient way to diversify one's portfolio.
Gold - A consistent performer
Gold has delivered consistent returns in various time horizons as shown in the graph below.

Source: Bloomberg. Returns are in CAGR. Return of Gold in USD as on May 31, 2012. Past
performance may or may not be sustained in future.
Gold vs other asset classes
10 year returns of gold shows that it has performed relatively better than many asset classes.

26

SBI GOLD FUND:SBI Gold Fund is an open ended fund of fund scheme, which will invest in units of SBI Gold
Exchange Traded Scheme (SBI GETS). The scheme seeks to provide returns that closely
correspond to the returns provided by SBI GETS. It gives you the benefit of getting an exposure to
gold asset class in a convenient way, without having a Demat Account.
The New Fund Offer (NFO) open for subscription from August 22, 2011 and close on September 5,
2011. The New Fund Offer (NFO) price for the scheme is Rs 10 per unit.
The corpus collected through the NFO will be invested in SBI GETS, the Gold ETF
offering from SBI Mutual. SBI GETS, the best performing gold ETF in the last 6 months has given
returns of 28.6% as on 18th August 2011 which is 36.57% higher than the BSE Sensex returns of
-12.5% as on August 18th 2011.

SCHEME DETAILS:
Investment Objective: The investment objective of the Scheme is to seek to provide returns that
closely correspond to returns provided by SBI Gold Exchange Traded Scheme (SBI GETS).
Fund Type: An open ended fund of fund scheme.
Fund Manager: The fund will be managed by Mr. Raviprakash Sharma.
Trustee Company: SBI Mutual Fund Trustee Private Limited.
Plans /Options : The scheme offers growth option and dividend payout option. Dividend option
offers reinvestment, payout and option.
Benchmark : The Scheme's performance will be benchmarked against the price of physical gold.
As there are no indices catering to the gold sector or securities linked to the Gold, currently SBI
Gold Fund shall be benchmarked against the domestic price of gold. The price here refers to the
morning fixing of Gold by London Bullion Market association (LBMA).

27

Minimum Application Amount : The minimum investment amount is Rs 5000 and in multiples of
Rs 1 thereafter. Additional Purchase Rs. 1000/- and in multiples Rs.1000/- or 100 Units or account
of Re. 1/- thereof of Re.1/- thereof.
Load Structure : Entry Load: Not Applicable Exit Load: Exit within 1 year from the date of
allotment . 1 %, Exit after 1 year from the date of allotment.
Portfolio & Investment Strategy
Portfolio of SGF will predominantly constitute of investments in SBI Gold Exchange Traded
Scheme (SBI GETS), but not ruling out upto 5% allocation towards short term fixed deposits and
other money market instruments.

Type of Instrument
Units of SBI GETS

% of Net Asset

Risk Profile

95% - 100%

Medium to High

Reverse repo and / or CBLO and / or short-term fixed

0% - 5%
Low to Medium
deposits and / or Schemes which invests predominantly
in money market securities or Liquid Schemes*
*The Fund Manager may invest in liquid schemes of SBI Mutual Fund. However, the Fund
Manager may invest in any other scheme(s) of a mutual fund registered with SEBI, which invest
predominantly in the money market securities.
SBI GETS too which is the underlying fund, invests in physical gold which shall be of fineness (or
purity) of 995 parts per 1000 (99.5%) or higher. Thus SGF being a feeder fund would be focused on
providing returns that closely correspond to the returns provided by SBI GETS.
Expenses of the SBI Gold Fund
Every mutual fund or ETF incurs some expenses in running its fund, and these expenses are
recovered from the unit holders by reducing the NAV to the extent of the expenses. These expenses
are charged as a percentage of the assets and in case of the SBI Gold Fund their document says
that the expenses will not exceed 1.5% of assets including the charges of the SBI GETS ETF.
Practically, I dont know how much they are going to charge, but due to the competitive nature of
the gold ETF market fees have remained low and about the same for every fund.
Systematic Investment Plan
- Rs.1500/quarter for minimum 4 quarters.
-Rs.1000/month minimum 6 months.
Load Structure :
Entry Load: Not Applicable.
Exit Load: Exit within 1 year from the date of allotment 1 %, Exit after 1 year from the date
allotment nil.

of

Liquidity: The scheme would provide repurches facility to investor on an ongoing on all business
day.
28

Risk Factor: Mutual fund and securities investment are subject to market risks and there is no
assurance or guarantee that the objective of scheme will be achieved. As with any other investment
in securities,the NAV of the units issued under the scheme can go up or down depending on the
factors and forces affecting the securities market.
Taxation: On the taxation front too as per the present tax laws (Income Tax Act, 1961), investment
in SGF would enable investors to avail the benefit of indexation on long-term capital gains after the
period of one year of its holding. However, any sale of the fund before the period of 1 year would
attract short-term capital gains tax.
It is noteworthy that at present for investment in physical gold, the benefit of long-term capital
gains tax is available only after the completion of period 3 years of the asset's holding.
Investment Strategy:To achieve the investment objective ,the scheme will predominantely invest
in units of SBI GETS which is registered with SEBI and/or permitted by SEBI from time to
time.The investments could be made either directly with underlying fund throughthe secondary
market.The scheme will also invest in money market instruments.The investment strategy would
largly be active in nature.The AMC shall endeavor that the returns of SBI GOLD FUND will
replicate the returns generated by the underlying ETF and is not expected to deviate more than
2% ,on an annualized basis net of recurring expenses in the scheme.This deviation would mosty be
on account of receipt of cash flows which currently takes five days as per current operational
procedures.
Applicable NAV:
For purchase: In respect of valid applications received up to the cut of time (3pm)by the mutual
fund along with a local cheque or a demand draft payable at par at the place where the application is
received, the closing NAV of the day on which application is received shall be applicable. In respect
of valid application received after the cut off time , by the Mutual Fund alongwith a local cheque or
a demand draft payable at par at place where the application is received, the closing NAV of the
next business day shall be applicable.
For Redemption: In respect of valid application received up to the cut off time(3p.m.) by the
mutual fund, same days closing NAV shall be applicable.In respect of valid aplicatipon received
after the cut off time by the mutual fund, the closing NAV of the next business day shall be
applicable.
NAV Declaration: AMC shall disclose the closing NAV of the day on the AMFI website
(www.amfiindia.com) and on the website of the fund by 10 a.m. the following business day.

SBI Gold Fund Benefits

No need to hold or open a DEMAT account: SBI Gold fund provides an opportunity for the
investor, to take exposure into Gold as an asset class, in smaller and convenient investment amount
without having a demat account.

29

Systematic Investment Plan (SIP): It is a long term disciplined investment technique which
provides a systematic way of investing in Gold. This allows you to save and invest regularly
without 'timing the markets'.
Liquidity: An investor can subscribe and redeem gold fund on all business days.
Cost Effective: Investing in gold through the SBI Gold Fund in physical application mode enables
you to invest in a low cost manner as the investor does not have to incur expenses like annual
maintenance charges for demat account , delivery /brokerages charges or transaction charges
incurred for investing through the dematerialized mode. However, investors will be bearing the
recurring expenses of the scheme, in addition to the expenses of the underlying Scheme.>
Tax Benefits: SBI Gold Fund is treated as a non equity product from tax perspective. It enables an
investor to claim long term capital gains tax after a period of one year of investments, whereas for
physical gold long term taxation is available after 3 years.
Convenience of investing: Investing in gold through SBI Gold Fund is easy - investors can directly
subscribe units through at the various designated investor service centre across the country thereby
making it easily accessible and convenient.
Assured Purity & Security: SBI Gold Fund would invest in units of SBI Gold Exchange Trade
Scheme (SBI GETS) and all gold bullion held in SBI GETS shall be of fineness of 995 parts per
1000 and it will be held safe with the custodian.
Availability of add on facility: The fund allows investors to avail add-on facilities like systematic
transfer plan, systematic investment plan and systematic withdrawal plan.
Disadvantages
Just remember that this being a fund of fund (FOF) scheme you will need to incur double charges,
i.e., this fund charges around 1-1.5% as the fund charges while since investing in SBI ETF, even the
charges incurred for that fund will need to be absorbed by yourself and hence you will be incurred
with double fund maintenance charges. Hence if you already have a demat account then investing
directly via such gold ETF funds would be ideal rather than choosing such gold funds.
This fund will be ideal who dont have demat account and wants to invest in gold every month
without any hassles of doing it manually.
SBI Gold Fund is ideal for those looking to invest in gold for very long term i.e., say around 10
years or above as it is not entirely advisable to invest via SIP in rising market i.e., in this case rising
gold price for short term, keep a target of at least 10 years to invest in gold SIP to get the full benefit
of investing in gold.

30

Comparison with other with other gold instrument

SIP in Gold
SBI Gold Fund enables you to invest in gold through Systematic Investment Plan (SIP), thus
inculcating a regular savings habit to your investments. This ensures that you can reap the benefits
of investing in gold through a small but regular amount. The following table shows the SIP returns
in Gold for the past 10 years. It is seen that Gold has displayed a consistency in performance.
Period
1 Year
3 Years
5 Years
10 Years
Amount Invested

60,000

180,000

300,000

600,000

SIP Start Date

01/06/2011

01/06/2009

01/06/2007

01/06/2002

Gold Price (Rs/Gm) (As on May 31,

2841.60
2012)

2841.60

2841.60

2841.60

Total no. of units accumulated

22.98

91.87

197.52

671.96

Investment value (As on May 31,

2012) in Rs.

65,299.86

2,61,057.35

5,61,271.88

19,09,438.30

Returns on SIP in Gold (%)

16.79%

25.69%

25.33%

21.91%

Source: Bloomberg. Past Performance may or may not be sustained in future.

31

CHAPTER-4
RESEARCH
METHODOLOGY

32

RESEARCH METHODOLOGY
Title of the studyAwareness about mutual fund with special emphasis on SBI Gold Fund.
Duration of the projectThe study was carried out for period of 45 days from 4,July 2012 to 18,August 2012.

Objective of study To know customer awareness regarding various schemes and offers of SBI Mutual Fund.
To know where should customer invest money.
To study whether customer are satisfied.
To know the preference of customer towards schemes of mutual fund.
To know the awareness of customer about SBI Gold Fund.
To know why should customer invest money in gold fund.
To know what should do to boost Mutual Fund.

Scope of the studyA big boom has been witnessed in Mutual Fund Industry in recent times. A large
number of new players have entered the market and trying to gain market share in
this rapidly improving market.
The research was carried on in Jaipur area. I had been sent at one of the main brance
of State Bank of India Jaipur where I completed my Project work. I surveyed on my
Project Topic Awareness about SBI mutual fund with emphasis on gold Fund on
the visiting customers of the SBI Main Branch at sanganeri Gate.
The study will help to know the preferences of the customers, which company,
portfolio, mode of investment, option for getting return and so on they prefer. This
project report may help the company to make further planning and strategy.

Type of research
TYPE OF RESEARCH:-This research based on the primary data as well as secondary data.
Primary data collected through questionnaires using telephone, e-mails, interview of respondents.
Secondary data will be collected through extensive literature survey and sources will include news33

papers, internet, journals, magazines, books, reports and other publications. The main objective of a
research is to find out the truth which is hidden and which has not been discovered. A research is
A careful investigation or enquiry especially through search for new facts in any branch of
knowledge
1. Types of research: The customer research was carried out in Two phases:

An exploratory research was carried out to know what customer looks for in Mutual
Fund company and whether customers are aware or not about the products & besides
this, that are customers are interested investing in Mutual Fund?

The other was a diagnostic study to identify the factors responsible for satisfactions or
dissatisfaction of customer.

2: Sources of Data: The data needed data this study has been collected from two main
sources:

Primary sources.

Secondary sources.

Primary data has been collected through Questionnaire. Which are filled by government
employees, retired government employees, businessman, private sector employees and

general customers etc, who Invest in Mutual Funds.

Secondary data has helped in collecting information regarding history of the company,
division of the company, what is Mutual Fund, investors preference of mutual fund and
market position of other Mutual Fund Companies.

3: Tools used: Whatever we design of research study it is necessary to Collect relevant

data. Thus it is useful to consider methods of collecting data and the quality of
information produced.
The tools which are used for collecting the primary data from the customers are

Questionnaires are the basis method of collecting data in marketing research.

Questionnaires are distinguished by the facts that asking question to people who have the
desired information collects data. When questioning researches collects data ask questions.
They keep track of the objects or actions in which they are interested. Sometimes
individual makes the observation on the other occasions mechanical devices note and
34

record the desired information. In this study the data was collected by means of questioning
since the method of observation is also used for checking the -awareness regarding the
financial products. The questionnaires were filled by using tested personal interviews.

Contact methods: - to get information contacts is necessary it can be either by

telephone or by personal contacts. I prefer personal interview method to get the
necessary information from the people. The data was collected through personal
interview by asking the questions

Telemarketing: - To get information I also use this method by calling them through
telephone in their homes, offices, institutions etc. and made them aware from the
mutal fund and the financial product.

SAMPLE SIZE AND METHOD OF SELECTING SAMPLE:Sample selection:-The survey is conducted on 100 visitors. This survey is conducted in Jaipur
through the government employees, retired government employees, businessman, private sector
employees and general customer of bank etc.
Sample Design:1. Random Sampling
2. Convenience Sampling
Data Collection:1. Primary Questionnaire
2. Secondary Internet, Magazines, News papers.
Sampling Plan:1. Sampling Unit 100visitor of SBI Main Branch Jaipur.
2. Sample size 100

Limitation of studySome persons are not so responsive.

Due to lack of interest some persons did not give proper data.
The time period of 8 week allotted for training is not enough to get much clear picture of the

market.
Sample size is limited to 100 visitor of SBI Main Branch Jaipur out of which 70 had
invested in mutual fund.The sample size may not adequately represent market.
The research cover only customer of certain part of Jaipur.

35

36

CHAPTER-5
Data analysis &
Interpretation

ANALYSIS & INTERPRETATION OF THE DATA

37

1. Age distribution of the Investors of Jaipur

Age Group
<30
No. of Investors 7

31-35
8

36-40
14

41-45
15

46-50
14

>50
12

Interpretation: According to this chart out of 70 Mutual Fund investors of Jaipur the
most are in the age group of 41-45 yrs. i.e. 25.71%, the second most investors are in
the age group of 41-45yrs i.e. 22.85% and the least investors are in the age group of
below 30 yrs.

2. Educational Qualification of investors of Jaipur.

Educational Qualification
Graduate/ Post Graduate

Number of Investors
49

38

Under Graduate

13

Others

Total

70

Interpretation: Out of Mutual Fund investors 70% of the investors in Dehradoon are
Graduate/Post Graduate,18.57% are Under Graduate and 11.43% are others (under
HSC).

3.Monthly Family Income of the Investors of Jaipur.

Income Group

No. of Investors

Less than 10,000

4
39

10,001-15,000
15,001-20,000
20,001-30,000
More than 30,000

7
8
30
21

Interpretation : In the Income Group of the investors of Jaipur, out

of 70 investors, 43% investors that is the maximum investors are in the
monthly income group Rs. 20,001 to Rs. 30,000, Second one i.e. 30%
investors are in the monthly income group of more than Rs. 30,000 and
the minimum investors i.e. 6% are in the monthly income group of below
Rs. 10,000

4.Investors invested in different kind of investment.

Kind of investment
Saving a/c
Fixed deposit
Mutual fund
Shares and debenture
Gold/silver

No. of investors
96
72
70
18
30
40

Real estate
Insurance

14
65

Interpretation:Out of the 100 investors 96% investors invested in saving a/c,72% in fixed
deposit,70% in mutual fund,18% in shares & debentures,30% in gold & silver,14% in real estate
and65% in insurance.

5. Preference of factors while investing

Factors

(a) Liquidity

(b) Low Risk

(c) High Return

(d) Trust

No. of

20

30

32

18

41

Respondents

Interpretation: Out of 100 People, 32% People prefer to invest where there is High Return,
30% prefer to invest where there is Low Risk, 20% prefer easy Liquidity and 18% prefer
Trust.

6.Awareness about Mutual Fund and its operation

Response
No. of Respondents

Yes
86

42

No
14

Interpretation:-Maximum no. Of customer i.e. 86% are aware about mutual fund and various
scheme and 14% are not aware about its scheme and its operation.

7. Source of information for customers about Mutual Fund

Source of information
Advertisement
Peer Group
Bank
Financial Advisors

No. of Respondents
15
10
18
42

43

Interpretation:- From the above chart it can be inferred that the Financial Advisor
is the most important source of information about Mutual Fund. Out of 85
Respondents, 49% know about Mutual fund Through Financial Advisor, 21%
through Bank, 11% through Peer Group and 17% through Advertisement.

8. Investors invested in Mutual Fund

Response
Yes
No

No. of respondent
70
30

44

Interpretation: Out of 100 customer ,70 customer invested in mutual fund and 30 customers are
not invested in mutual fund.

9. Reason for not invested in Mutual Fund

Reason

No. of Respondents

Not Aware
Higher Risk
Not any Specific Reason

14
12
4
45

Interpretation:- Out of 80 people, who have not invested in Mutual Fund, 47% are
not

aware of Mutual Fund, 40% said there is likely to be higher risk

and 13% do not have any specific reason.

10.Number of customers invested in SBI Mutual Fund

MUTUAL FUND

No. of Respondents

SBI Mutual Fund

Other mutual fund
total

31
39
70

46

Interpretation:-Out of 70 investors 31i.e.44% investors invested in SBI Mutual Fund and remaining
invested in other mutual fund companies.

11. Reasons for invested in SBIMF

Reason

No. of Respondents

Associated with SBI

Better Return
Agents Advice
Total

20
3
8
31

47

Interpretation:- Out of 55 investors of SBIMF 64% have invested because of its

association with Brand SBI, 25% invested on Agents Advice, 9% invested because
of better return.

12. Investors invested in SBI GOLD FUND

Scheme

No. of Respondents

SBI Gold Fund

12

Other schemes

19

Total

31

48

Interpretation:- Out of 31 investors of SBI Mutual fund ,12 investors preferred SBI Gold Fund
due to good performance of gold in market. The market for equity based fund is low now a days
because of bearish market and they consider it riskier to invest.

13. Mode preferred by investment for investors in SBI Gold Fund

Mode of Investment
No. of Respondents

One time Investment

4

Systematic Investment Plan (SIP)

8

49

Interpretation:- Maximum number of customers i.e.67% are invested in systematic investment

plan because most of customers are not have such a big amount to invest and SIP provide investors
to invest and save regularly.

13. Option of return preferred by investors to invest in SBI Gold Fund

Option
No. of Respondents

Dividend Payout

Dividend
Reinvestment
1

50

Growth
9

Interpretation:-Out of 12 investors ,9 investors i.e. 75%invested in growth option,17% preferred

dividend payout option and only 8% preferred dividend reinvestment option.

14. Do you redeem the units before its maturity if it gives better returns?
Response

No. of Respondents

YES

38

NO

32

Total

70

51

Interpretation:-54% withdraw their money before maturity period from mutual fund and 46%
investors do not withdraw money from mutual fund.

15.Do you satisfied with the services provided by SBI mutual fund?
Response

No. of Respondents

YES

42

NO

28

Total

70

52

Interpretation:- Out of the investors of SBI Mutual Fund 60% investors are satisfied with services
of mutual fund and 40% are not satisfied with services of SBI Mutual Fund.

53

Chapter 6
Findings and
Conclusion

FINDINGS

In Jaipur most of the customers who invest in mutual fund are in the age group of 41-45.the
investors from age group of 35-40 and 46-50 are also interested to invest in mutual fund but
very few number of customer below 30 years of age invest in mutual fund schemes.
In Jaipur most of the investors who invest in mutual fund are graduate or post graduate and
very few among them are under graduate or below it.
In the Jaipur, out of 70 investors, 43% investors that is the maximum investors are in the
monthly income group Rs. 20,001 to Rs. 30,000, Second one i.e. 30% investors are in the

54

monthly income group of more than Rs. 30,000 and the minimum investors i.e. 6% are in
the monthly income group of below Rs. 10,000.
Out of the 100 respondent 96% investors have saving a/c, and a good number of investors
invested in fixed deposit and mutual fund and 65% customers have insurance.
When customer invest in any investment instrument most of the customer prefer high return
and less riskier fund for investment and very few of them prefer liquidity and trust while
they investing.
Out of 100 respondent 85% respondent are aware about mutual fund & its operation and
15% not.
Only 70% respondent invest in mutual fund and 30% not.
Out of 30 respondent who were not invested in mutual fund, 14 respondent told that they
were not aware about mutual fund and 12 were not invest because they considered it risky
and 4 dont have any specific reason.
Out of 70 respondents ,31 respondent invest in SBI Mutual Fund. Maximum number of
investors told reason for investment is it association with SBI brand and 25% investors
invest due to agents advice and 9% think it give better return.
Out of 31 investors of SBI Mutual fund ,12 investors preferred SBI Gold Fund due to good
performance of gold in market. The market for equity based fund is low now a days because
of bearish market and they consider it riskier to invest.
Out of 12 investors who invest in SBI Gold Fund, 67% preferred SIP and 33% investors
preferred one time investment.
Maximum Number of Investors Preferred Growth Option for returns, the second most
preferred Dividend Payout and then Dividend Reinvestm

CONCLUSION

Running a successful Mutual Fund requires complete understanding of the peculiarities of the
Indian Stock Market and also the psyche of the small investors. This study has made an attempt to
understand the financial behavior of Mutual Fund investors in connection with the preferences of
Brand (AMC), Products, Channels etc. I observed that many of people have fear of Mutual Fund.
They think their money will not be secure in Mutual Fund. They need the knowledge of Mutual
Fund and its related terms. Many of people do not have invested in mutual fund due to lack of
awareness although they have money to invest. As the awareness and income is growing the number
of mutual fund investors are also growing.
Brand plays important role for the investment. People invest in those Companies where they have
faith or they are well known with them. There are many AMCs in Dehradoon but only some are
55

performing well due to Brand awareness. Some AMCs are not performing well although some of
the schemes of them are giving good return because of not awareness about Brand. Most of the
customer think that SBI Mutual is a good investment option due to its association with SBI brand
and this brand name give them faith to invest.
Distribution channels are also important for the investment in mutual fund. Financial Advisors are
the most preferred channel for the investment in mutual fund. They can change investors mind
from one investment option to others. Many of investors directly invest their money through AMC
because they do not have to pay entry load. Only those people invest directly who know well about
mutual fund and its operations and those have time.
Now a days share market is not performing well so investors are not interested to invest in equity
fund. Equity fund didnt give better return so investors neglect to invest in it. The gold is
performing very well from investors point of view and its price is increase continuously so they
preferred gold fund for investment.

Chapter 7
56

Suggestions
And
Recommendations

Suggestions and Recommendations

From the study it have found that very less number of customer are aware
about the mutual fund so the the mutual fund companies should try to creat
awareness level of people collectively in the interest of both investors and
industry.
The advertisement should be put on more into financial newspaper and on
business channels as they considered as highly reliable by the investors.
To maintain faith in brand name it must provide good services and try to
ensure the safety and profitability of their investment as they correlate a good
brand name with good service.

57

 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.
There is a large untapped market below age group of 35 so company make
efforts to attract them who show interest in investing.
Systematic Investment Plan (SIP) is one the innovative products launched by
Assets Management companies very recently in the industry. SIP is easy for
monthly salaried person as it provides the facility of do the investment in EMI.
Though most of the prospects and potential investors are not aware about the
SIP. There is a large scope for the companies to tap the salaried persons.
The investors show interest in gold fund so it is a good opportunity for SBI
mutual fund to attract investors towards gold fund by making sufficient efforts
because it will give good business to it.

QUESTIONNAIRE
Personal Details:NAME:
ADDRESS:
AGE:
QUALIFICATION;- [ Please Tick ]
Graduation/PG [ ]
[ ]
Govt. service [

Private Service [

CONTACT NO.:

Under Graduate [
] Business [

Q.1.In which investment instrument would you like to invest?

(a)Saving account
(b) Fixed deposit
(d)Shares & debenture

(e) Gold/Silver

agriculture [

Others
] others [

(c) Mutual fund

(f) Real estate

(g) insurance
Q.2. What factors do you consider while investing?
(a)Liquidity
(b)Low risk
58

(c)High return

(d)trust
Q.3. Do you know about mutual fund?
(a) Yes

(b)NO

Q.4.Which are the sources of information for investing in mutual fund?

(a)Advertisement
(b)peer group
(d)Financial advisor

(c)Bank

Q.5. Have you ever invested in mutual fund?

(a)Yes

(b) No

Q.6. What are the reasons for not invest in mutual fund?

(a)Not aware
reason

(b)Higher risk

(c)Not any specific

Q.7. Have you ever invested in SBI Mutual Fund?

(a)Yes
(b) No
Q.8.What are the reasons for investment in SBI Mutual Fund?
(a)Associated with SBI
(b)Better return

(c)Agent advice

Q.9.Have you ever invested in SBI Gold Fund?

(a)Yes
(b)No
Q.10. What mode preferred by you for investment in SBI MF?
(a)One time investment
(b)Systematic investment plan

Q.11. What option of investment do you prefer for investment?

(a)Dividend reinvestment
(b)Dividend payout
Q.12.Do you redeem the units before its maturity if it gives better return?
(a)Yes
(b)No
Q.13.Are u satisfied with the services of SBI Mutual Fund?
(a)Yes
(b)No

59

(c)Growth

BIBLIOGRAPHY
News papers
Television channel (cnbc aawaj)
Mutual fund hand book
Fact sheet and statement
www.sbimf.com
www.moneycontrol.com
www.amfiindia.com
www.onlineresearchonline.com
www.mutualfundsindia.com
60

61