Beruflich Dokumente
Kultur Dokumente
CONTENTS
Sl. No 1 2 3 4 5 6 Chapters Introduction to the project Company profile Theoretical background Product Profile Analysis & interpretation of data Finding, Suggestion & Conclusion Page No.
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List of Graph
Sl. No 1 2 3 4 5 6 7 Graph Investors on investment Scheme obtains to invest Purpose of investment Satisfaction with the service their company Mutual Fund from investment angel. rate of return from investment in Mutual Fund Investment timeframe in mutual fund Page No
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CHAPTER-1
INTRODUCTION TO PROJECT
INTRODUCTION NEEDS OF THE STUDY OBJECTIVES OF THE STUDY SCOPE OF THE STUDY LIMITATION OF THE STUDY RESEARCH METHODOLOGY
CHAPTER-1
INTRODUCTION:
Mutual Fund is not new in India; it is there from the past four decades. Only from past one decade after the entry of Private Mutual Funds and Foreign (Sponsored) Mutual Funds, the competition and innovations took place in the Indian Mutual Fund Industry in a rather short period, has grown from infancy to adolescence. Among the 34 SEBI registered mutual funds, are the Unit Trust of India II (assets under management Rs.13, 516 cores), Public sector funds (Rs.I0, 426 cores) and the Private sector funds (Rs.55, 522 cores). Debt funds have been the favorite with investors in the last three years. Shell-shocked by the devastating fall in equity values, and the concurrent appreciation in debt funds, investors have been compelled to take a serious look at this category. The popularity of debt funds has been growing phenomenally since 2000, when they started yielding exceptional returns riding high on soft interest rates. Until last year, returns above 15 per cent were not uncommon. In fact, gilt funds gave returns more than 20 per cent, stunning investors. When seen in the light of falling deposit rates, where most of the retail money finds its place, debt funds appeared too good to be true. An interesting feature of the assets composition in the Mutual Fund Industry in India is that about 70 percent is in Debt funds, 14 percent in Equity funds and the balance in balanced funds. For any mutual fund as such, are interested in discovering if the management of a mutual fund is performing well; that is, has management done better through its selective buying and selling of securities than would
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have been achieved through merely "buying the market", that is picking a large number of securities randomly and holding them throughout the period. The Main purpose of doing was to know about mutual fund and its functions. This helps to know in details about mutual fund industry right from its inception stage, Growth and future prospects. It also helps in understanding different schemes of mutual funds. Because my study depends upon prominent funds in India and their schemes like equity, income, balance as well as the returns associated with those schemes. The project study was done to ascertain the asset allocation, entry load, exit load, associated with the mutual funds. Ultimately this would help in understanding the benefits of mutual funds to investors.
To give a brief idea about the benefits available from Mutual Fund investment. To give an idea of the types of schemes available. To discuss about the market trends of Mutual Fund investment. To study some of the mutual fund schemes. To study some mutual fund companies and their funds. Observe the fund management process of mutual funds.
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Explore the recent developments in the mutual funds in India. To give an idea about the regulations of mutual funds.
Limitations:
The study was restricted only at Bangalore City.
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Number of Sample selected was 50. The analysis of investors was restricted to SBI Mutual Fund RESEARCH METHODOLOGY:
Methodology
The purpose of the methodology section is to describe the research procedure. This includes details such as type of research, sources of data, sampling plan, method of contact and data collections method.
should exit at the right time after booking profits, staying longer might affect his returns.
SCOPE OF STUDY
This study draws its parameters on the investors knowledge of investment in general with prominence to mutual funds. An attempt is also made to deduce the mindset of the investors to know their requirement and expectations from these investments. To analyze only the opinion of investors about mutual fund, where do they place them among the various other investment alternative. What is that they would like mutual funds to provide them, and what steps do they feel is necessary to rank the mutual fund as one of the best investment alternative.
The method of data collection will be through a questionnaire, for the above study primary data and secondary data are considered.
PRIMARY DATA:
Primary data was collected through survey method. A questionnaire on the basics of objectives of the study was prepared. A sample size of 100 was chosen.
SECONDARY DATA:
Secondary data was collected from different books, newspaper, web site Journals
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CHAPTER-2
COMPANY PROFILE
INTRODUCTION STATE BANK OF INDIA PROFILE HISTORY/ EVOLUTION OF SBI ORGANISATIONAL STRUCTURE CORPORATE STATE BANK OF INDIA- A BRANCH PROFILE SHANKARAGATTA
Chapter-2
Introduction
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COMPANY PROFILE
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One of the classical economic functions of the banking industry that has remained virtually unchanged over the centuries is lending. However there have been consideration changes in the institutional structure and the economic environment brought about by heightened competition and technological changes. On the one hand, competition has had considerable adverse impact on the margins, which lenders have enjoyed, but on the other hand technology has to home extent reduced the cost of delivery of various products and service. The Indian financial system comprises a large number of commercial and co-operative banks, specializes developmental banks for industry, agriculture, external trade and housing, social security institutions, collective investment institutions etc, the banking system is at the heart of the finance system. The Indian banking industry, which has RBI (reserve bank of India) as its regularly authority. It is the central bank of the country under which there are the commercial banking including public sector and private sector banks, foreign banks and area banks; it also includes regional rural banks as well as co-operative banks.
COMMERICAL BANKS:
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In the organized sector of the money market, commercial banks and co-operative banks have been in existence for the past several decades. Commercial bank is run on commercial line that is to earn profits unlike a co-operative bank which is run for the benefit of a group of members of the co-operative body e.g.: a housing co-operative society. The commercial banks are spread across the length and breadth of the country, and later to the short-term needs of industry. Trade and commerce and agriculture unlike the developmental banks which focus on long-term needs. These days the commercial banks also look after other needs of their customers including long-term credit requirements. Commercial banks operating in India may be categorized into public sector and a private sector bank is further divided into Indian and foreign banks depending upon the ownership, management and control.
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In 1959, eight state banks erstwhile princely states were also nationalized to form the subsidiaries of the SBI. The second phase of phase of public sector banking came into existence when 14 major commercial banks were nationalized on July 19 1969. On April 15 1980 six more private sector banks were nationalized. This led to the dominance of public sector banks as nearly 90% of the banking activity in the country was brought into the public sector. The public sector banks were socially controlled and publicly owned. It was done with the objective of giving a professional bent to bank management and provision of adequate credit for agriculture and rural sector, small industries, export and a new class on entrepreneurs.
finance, factoring, leasing service, primary dealership in government securities, credit cards and insurance facility. It is also involved in mutual fund and capital market activities through its subsidiaries SBI has the largest asset base among Indian banks and financial Institution, all 13630 branches of state bank if India and its seven associate banks are fully computerized. The implementation of V R S in the year 2000-01 has enabled SBI to effect significant reduction in staff expenses.
Evolution of SBI:The origin of the state bank of India goes back to the first decade of the 19th century with establishment of the bank of Calcutta in Calcutta on 2nd June 1806. Three years later the bank received its chater and was re-designed as the bank of Bengal on 2nd January 1809. A unique institution. It was the first joint stock bank of British India sponsored by the government of Bengal. The bank of Bombay on 15th April 1840 and the bank of madras on 1st July 1843 followed the bank of Bengal. These three banks remained at the apex of modern banking in India till their amalgamation as the imperial bank of India on 27th January 1921. When India attained freedom, the imperial bank has a capital base(including reserves) of Rs 11.85 Cores, deposits and advance of Rs.275.14 cores and Rs.72.94 cores respectively and a network of 172 branches and more than 200 sub office extending all over the country. In 1951, when the first five year plan was launched, the development of rural India was given the highest priority. The commercial banks of the country including the imperial bank of India had till then confined their operation to the urban sector and
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were not equipped to respond to the emergent needs of economic regeneration of the rural sector in particular, the all India rural credit survey committee under the chairmanship of A.D. growl recommendation the creation of state-partnered and state-sponsored bank by taking over the imperial bank of India and integrating with it, the former state owned or state associate banks. An act was according passing in parliament in May 1955 and the state bank of India as constituted on 1 July 1955. More than a quarter of the resources of the state, Later the state bank of India act was passed in 1959, enabled the state bank of India to take over eight state associated banks as its subsidiaries.(but now the seven association banks). The state bank of India was thus born with a new sense of social purpose aided by the 10000 offices comprising branches, sub offices and three local head offices inherited from the imperial bank. The concept of banking as mere repositories of the communitys savings and lenders to credit worthy parties was soon to give way to the concept of purposeful banking sub-serving the growing and diversified financial needs of planned economic development. The state bank of India was destined to act as the pace setter in this respect and lead the Indian banking system into the exciting field of national development. The number of branches thus, increased from 466 as on 30th June 1955 to 10000 offices as 31.3.2010
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Changes in SBI have reflected changes in the entire economy as indicated below:
Changes by
SBI
Branch expansion
1950s: focus on ruler & semi-urban Small Scale Industries & areas Focus on Industry along with the growth of public sector institution in small business Indian economy Entrepreneurial Earliest application of entrepreneurial development development methodology Agriculture Overseas Expansion 1980s: International expansion NRIimportant role SBI as the flagship bank of India creating a presence in the word Mobilizing funds including special schemes- RIBs, IMDs 1990s: Deregulation & liberalization
1980
1990
Technology Transformation Corporate Financing Significant capital raised form market focus on enlarged role of private sector infrastructure, core areas Focus on Retail Banking 2000: technology transforming banking emphasis on the services sector. Full Computerization Further: retail Banking, BRP (Business ATMs & restructuring Process Re-engineering) & Technology Core Banking & BRP to Fuel Future Growth.
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CHAIRMAN
MD & GE (CB)
MD & GE (NB)
DMD-Deputy Managing Director CCO-Chief Credit And Risk Officer CFO-Chief Financial Officer CDO-Circle Development Officer GE-Group Executive MD-Managing Directors DGM-Deputy General Manager AGM-Assistant General Manager
Chief General Manager
DGM (Vigilance)
DGM (Law)@
General Manager-1
General Manager-2
Sl.no 1 2 3 4 5 6 7 8 9 10 11
Name O.P. Bhatt R. Sridharan T.S. Bhattacharya Bhara`ti. Rao V.Kannan B.K. Vatsaraj Y.vijayanand S. Rajendra Ashwihn Ankhad Sangeet shukla
Designation Chairman Director Managing Director Director Director Independent Director Independent Director Director Independent Director Vice Chairman & CEO (chef executive officer)
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Mission of State Bank of India: 1. We will be prompt, polite and proactive with our customers. 2. We will be speaking the language of young India. 3. We will create products and services that help our customers achieve their goals. 4. We will go beyond the call of duty to make our customer feel valued. 5. We will be of services even in the remotest part of our country. 6. We will offer excellence in services to those abroad as much as we do to those in India. 7. We will imbibe state of the art technology to drive excellence.
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Values of State Bank of India: 1. We will always be honest, transparent and ethical. 2. We will respect our customers and fellow associates. 3. We will be knowledge driven. 4. We will learn and we will share our learning. 5. We will never take the easy way out. 6. We will do everything we can to contribute to the community we work in. 7. We will nature pried in India.
Semi- urban and rural people, is started its branches all over the country and also in Karnataka. In Shankargatta that is in Shankargatta branch located main road is also one of them. The branch is situated in urban area. This branch was started on 22nd November 1984, by marketing strategy it is started in Shankargatta. Since that time, it was not rendering different schemes and services. But now a day it provides schemes and services to their customers. In the beginning the branch does not have sufficient staff members; it had only a few members to 9 members. The bankers will trying its level best satisfy its customers. All it required is the best support and encouragement from its customers. Today, state bank of India has spread its aim around the world and has a network of branches spanning all time zones. SBIs international banking group delivers the full range of cross border finance solution through its four winnings the domestic division, the foreign offices division, the foreign department and the international services division. All the branches of the bank are computerized, for making easy transaction. In Karnataka the state Bank of India has two zonal offices viz.,
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Hubli Module:
It include Bidar, Bijapur, Bagalkot, Belgaum, Gulbarga, Raichur, Dharwad, Koppal, Gadaga, Haveri, Uttharkarnataka, districts. Bangalore Module: It includes Bellary, Davanagere, Chittradurga, Shimoga, Udupi, Chikamagalore, Tumkure, Kolar, Dakshina Kannada, Hassan, Bangalore, Kodagu, Mandy, Mysore, Chamarajanagara districts. These regions are headed by the regional manager. The SBI has given an opportunity to work in bank for more than 200000 plus employees all over the country.
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Staff: Officers 3 Clerks and cashiers 3 Armed Guards Peon 1 Male Staff 3 3 1&2 9 2 Total 9 Female Staff 0 0 0 0
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CHAPTER-3
THEROITCAL BACKGROUND
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INTRODUCTION:
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 then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realized is 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 man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. A mutual fund is the ideal investment vehicle for todays complex and modern scenario. Markets for equity shares, bonds and other fixed income instruments, real estate, derivatives and other assets have become mature and information driven price changes in these assets are driven by global events occurring in faraway places. A typical individual is unlikely to have the knowledge, skills, inclination and time to keep track of events, understand their implications and act speedily. Individuals also find it difficult to keep track of ownership of assets, investments, brokerage dues and bank transactions etc. A mutual is the answer to all these situations .It appoints professionally qualified and experienced staff that manages each of these functions on a full time basis .The large pool of money collected in the fund allows it to hire such staff at a very low cost to each investor. In effect the mutual fund vehicle exploits economics of scale in all three areas Research, investments and transaction processing. While the concept of individuals coming together to invest money collectively is not new, the mutual fund in its present form is a
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20th century phenomenon. In fact mutual fund gained popularity only after the Second World War. Globally there are thousands of firms offering mutual funds with different investments objectives. .Today mutual funds collectively manage almost as much as or more money as compared to banks.
Diversification
It simply means that spread investment across different securities. This kind of a diversification may add to the stability of returns, for example during one period of time equities might under perform but bonds and money market instruments might do well enough to offset the effect of a slump in the equity markets. Similarly the information technology sector might be faring poorly but the auto and textile sectors might do well and may protect your principal investment as well as help you meet your return objectives.
Variety
Mutual funds offer a tremendous variety of schemes. This variety is beneficial in two ways: first, it offers different types of schemes to investors with different needs and risk appetites; secondly, it offers an opportunity to
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an investor to invest sums across a variety of schemes, both debt and equity. For example, an investor can invest his money in a Growth Fund (equity scheme) and Income Fund (debt scheme) depending on his risk appetite and thus create a balanced portfolio easily or simply just buy a Balanced Scheme.
Professional Management
Qualified investment professionals who seek to maximize returns and minimize risk monitor investor's money. When investors would like to invest their money in to a mutual fund, they are handing their money to an investment professional who has experience in making investment decisions. It is the Fund Manager's job to (a) find the best securities for the fund, given the fund's stated investment objectives; and (b) keep track of investments and changes in market conditions and adjust the mix of the portfolio, as and when required.
Tax Benefits
Any income distributed after March 31, 2002 will be subject to tax in the assessment of all Unit holders. However, as a measure of concession to Unit holders of open-ended equity-oriented funds, income distributions for the year ending March 31, 2003, will be taxed at a confessional rate of 10.5%. In case of Individuals and Hindu Undivided Families a deduction up to Rs. 9,000 from the Total Income will be admissible in respect of income from investments specified in Section 80L, including income from Units of the Mutual Fund. Units of the schemes are not subject to Wealth-Tax and Gift-Tax.
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Regulations Securities Exchange Board of India (SEBI), the mutual funds regulator has clearly defined rules, which govern mutual funds. These rules relate to the formation, administration and management of mutual funds and also prescribe disclosure and accounting requirements. Such a high level of regulation seeks to protect the interest of investors. Liquidity In open-ended mutual funds, investor can redeem all or part of his units any time he wish. Some schemes do have a lock-in period where an investor cannot return the units until the completion of such a lock-in period. Convenience An investor can purchase or sell fund units directly from a fund, through a broker or a financial planner. The investor may opt for a Systematic Investment Plan (SIP) or a Systematic Withdrawal Advantage Plan (SWAP). In addition to this an investor receives account statements and portfolios of the schemes. Flexibility Mutual Funds offering multiple schemes allow investors to switch easily between various schemes. This flexibility gives the investor a convenient way to change the mix of his portfolio over time.
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Transparency Open-ended mutual funds disclose their Net Asset Value (NAV) daily and the entire portfolio monthly. This level of transparency, where the investor himself sees the underlying assets bought with his money, is unmatched by any other financial instrument. Thus the investor is in the knowledge of the quality of the portfolio and can invest further or redeem depending on the kind of the portfolio that has been constructed by the investment manager.
Taxes
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During a typical year, most actively managed mutual funds sell anywhere from 20 to 70 percent of the securities in their portfolios. Fund makes a profit on its sales, will pay taxes on the income they receive, even reinvest the money can be done.
Management Risk When invest in a mutual fund, investors depend on the fund's manager to make the right decisions regarding the fund's portfolio. If the fund manager does not perform as well as expected they might not make as much money on their investment as expected. Of course, if they invest in Index Funds, they forego management risk, because these funds do not employ managers. Mutual Fund industry is required to address this problem, as we believe that bigger the size of asset, bigger is the problem. Large funds end up paying more for the stock they purchase and sell them at a lower price thus reducing the returns to the investors.
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under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking Place among different private sector funds, As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 cores under 421 schemes.
AMFI
Fig 3
Sponsor: Sponsor is the person who acting alone or in combination with another
body corporate establishes a mutual fund. Sponsor must contribute at least 40% of the net worth of the Investment Managed and meet the eligibility criteria prescribed under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.
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Trust: The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered under the Indian Registration Act, 1908. Trustee: Trustee is usually a company (corporate body) or a Board of Trustees (body of individuals). The main responsibility of the Trustee is to safeguard the interest of the unit holders and inter alias ensure that the AMC functions in the interest of investors and in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, the provisions of the Trust Deed and the Offer Documents of the respective Schemes. At least 2/3rd directors of the Trustee are independent directors who are not associated with the Sponsor in any manner.
Institutional investor:
They have qualified treasury personnel to look at investment option. They also have access to professional advice from investment bankers. This class of investors understands the risk reward relationship and can take informed decisions.
Retail Savers:
This class of investors has been traditionally investing in fixed deposits mainly of banks. They have a certain mind set which need to be changed. A mutual fund need to essentially focus on this segment because this is huge base and has a potential to grow.
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Objectives
1. To define and maintain high professional and ethical standards in all areas of Operation of mutual fund industry. 2. To recommend and promote best business practices and code of conduct to be followed by members and others engaged in the activities of mutual fund and asset management including agencies connected or involved in the field of capital markets and financial services. 3. To interact with the Securities and Exchange Board of India (SEBI) and to represent to SEBI on all matters concerning the mutual fund industry. 4. To represent to the Government, RBI and other bodies on all matters relating to the Mutual Fund Industry. To undertake nationwide investor awareness programmed so as to promote proper understanding of the concept and working of mutual funds. Calculation of NAV (Net Asset Value) The most important part of the calculation is the valuation of the assets owned by the fund. Once it is calculated, the NA V 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 + Dividends/interest accrued - Amount due on unpaid assets - Expenses accrued but not paid
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(Total Unit Capital + Reserves + Income (net of expenses) + Appreciation/Depreciation in investments) (No of Units out Standing)
Repurchase Price
Is the price at which a close-ended scheme repurchases its units and it may include a back-end load. This is also called Bid Price.
Redemption Price
Is the price at which open-ended schemes repurchase their units and closeended schemes redeem their units on maturity? Such prices are NAV related.
Repurchase or Back-end Load
Is a charge collected by a scheme when it buys back the units from the unit holders?
Sales Load
Is a charge collected by a scheme when it sells the units. Also called, Frontend load. Schemes that do not charge a load are called No Load schemes.
Sales Price
Is the price investor pay when he invests in a scheme? Also called as Offer Price. It may include a sales load.
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TYPES OF FUND
(A) CLOSE ENDED FUNDS
The corpus of the fund and its duration are prefixed. In other words, the corpus of the fund and the number of units are determined in advance. Once the subscription reaches the pre-determined level, the entry of investors is closed. After the proceeds are fixed period, the entire corpus is disinvested and the proceeds are distributed to the
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various units holders in proportion to their holding. Thus, the fund ceases to be a fund, after the final distribution.
Features:
1. The period of the fund is definite and fixed beforehand. 2. Once the period is over and the target is reached, the door is closed for investors. They cannot purchase any more units 3. These units are publicly traded through stock exchange and generally, there is no re purchase facility by the fund. 4. The main objective of this fund is capital appreciation. 5. At the time of redemption, the entire investment pertaining to a close ended scheme is liquidated at the proceeds are distributed among the unit holders. 6. From the investors point of view, it may attract more tax since the entire capital appreciation is realized into at once stage itself. 7. If the market condition is not favorable, it may also affect the investors since he may not get the full benefit of capital appreciation in the value of the investment.
Features
There is complete flexibility with regard to once investment or dis investment. In other words there is free entry and exit of investors in an open ended fund.
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These units are not publicly traded but, the fund is ready to repurchase them and resell them at any time. The main objective of this one is income generation. The investors get dividend, rights or bonuses as rewards for their investments. The investor is offered instant liquidity in the sense that the units can be sold on any working day to the fund. The listed prices are very close to there net asset value. The fund fixes a different price for their purchases and sales.
Income Fund
This fund aims at generating and distributing regular income to the members on a periodical basis. It concentrates more on the distribution of regular income and it also sees that the average return is higher than that of the income from bank deposits.
Features:
The investor is assured of regular income at periodic intervals, say half - yearly or yearly and so on. The main objective of this type of fund is to declare regular dividends and not capital appreciation. The patterns of investment are oriented towards high and fix income yielding securities like debentures, Bonds etc. This is the best suited to the old and retired people who may not he any regular income. It concerns itself with short run gains only.
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BALANCED FUND:
It is nothing but a combination of both income and growth funds. It aims at distributing regular income as well as capital appreciation. This is achieved by balancing the investments between the high growth equity shares and also the fixed income earning securities.
SPECIALISED FUNDS:
A large number of specialized funds are in existence aboard. They offer special scheme needs specific needs of specific categories of people like pensioners, windows etc. There are also funds for investments in securities of specified area. Like Japan fund, south Korea fund etc. these security funds open the door for foreign investors to invest on the domestic securities of the countries. Funds may be confined to one particular sector or industries like fertilizer, automobiles, petroleum etc. these fund carry are high risk taking investors who prefer this type of fund
market rate of interests, these funds called money market funds in the U.S.A. and they have been functioning since 1972. Investors generally use it as a parking place or stop gap arrangements for their cash resources till they finally decide about the proper avenue for their investment, that is long term financial assets like bonds and stocks.
TAXATION FUNDS
A taxation fund is basically a growth oriented fund. But, it offers tax rebates to the investors either in the domestic or foreign capital market. It is suitable to salaried people who wants enjoy the rebates particularly during the month of February and March. In India, at present the law relating to tax rebates is covered under sec.88 of the income tax act, 1961. An investor is entitled to get 20% rebates in income of Rs 10,000/- per annum. The tax saving magnum of SBI capital market limited is the best example for the domestic type. UTI`s us $60 million India fund, based in the USA, is an example for the foreign type.
LEVERAGE FUND
These funds are also called borrower funds since they are used primarily to increase the size of the value of portfolio of a mutual fund. When the value increases, the earning capacity of the fund also increases. The gains are distributed to the unit holders this is resorted to only when the gains from the borrowed funds are more than the cost of borrowed funds.
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DUAL FUNDS This is a special kind of closed end fund. It provides a single investment opportunity for two different types of investors for this purpose, it sells two types of investment stocks they are income shares and capital shares. Those investors who seek current investment income can purchase income shares. They receive all the interest and dividend earned from the entire investment portfolio. However, they are guaranteed a minimum annual dividend payment. The holders of capital shares receive all the capital gains earned on those shares and they are not entitled to receive any dividend of any type. In this respect, the dual is different from a balance fund.
INDEX FUNDS
Index funds refer to those funds where the portfolios are designed in such a way that they reflect the composition of some broad based market index. This is done by holding securities in proportion as the index itself. The value of these index linked fund will automatically go up whenever the market index goes up and vice versa. Since the construction of portfolio is entirely based upon maintaining proper proportion of the index being followed, it involves less administration expenses, lower transaction costs, less number of portfolio managers etc. it is so because only fewer purchase and sale of securities would take place.
BOND FUNDS
These funds have portfolios consisting mainly of fixed income securities like bonds. The main thrust of these funds is mostly on
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income rather than capital gains. They differ from income funds in the sense income funds offer an average returns higher than that from bank deposits and also capital gains lesser than that in equity shares.
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PROPERTY FUND
It is a real estate mutual fund. It is an investment vehicle which buys, develops, manages and sells real estate assets. Its investment also includes shares/bonds of companies involved in real estate and mortgage backed companies.
FUND OF FUNDS
A fund of fund schemes is a mutual fund scheme that invests in other mutual fund schemes. The concept is widely prevalent aboard. Mutual funds in India are being allowed to launch fund of funds. In India, these funds are subject to the approval of the department of economic affairs, ministry of finance and the RBI monitors such funds by issuing directions then and there. In India, a number of shore funds exist. `India fund ` and `Indian growth fund` were floated by UTI in U.K and U.S.A. respectively.
2. Dividend Reinvestment Plan:Dividends plans of schemes carry an additional option for reinvestment of income distribution. This is referred to as the dividend reinvestment plan. Under this plan, dividends declared by a fund are reinvested on behalf of the investor, thus increasing the number of units held by the investors. 3 Automatic Investment Plan:Under an Automatic Investment Plan (AIP) also called Systematic Investment Plan (SIP), the investor is given the option for investing in a specified frequency of months in a specified scheme of the Mutual Fund for a constant sum of investment. AIP allows the investors to plan their savings through a structured regular monthly savings program. 4 Automatic Withdrawal Plan:Under the Automatic Withdrawal Plan (AWP) also called Systematic Withdrawal Plan (SWP), a facility is provided to the investor to withdraw a pre-determined amount from his fund at a predetermined interval.
fund assets. April also saw a change in pecking order, with Prudential ICICI Mutual Fund regaining its top slot among private sector funds in terms of AUM. Reliance Mutual Fund slipped to third position with total asset under management at Rs26,420 crores. UTI retained its top position with total assets under management at 30,108 crores.
ABNAMRO Bench mark Birla BOB Can bank Chola Deutsche DSP Merrill Iynch Escorts Fidelity Franklin India HDFC HSBC
57 8 161 28 36 58 51 56 21 8 133 99 70
2886.04 781.89
INGVYSYA 98
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JM Financial Kotak LIC Morgan Stanley Principal Prudential ICICI Quantum Reliang Sahara SBI Standard chartered Sundaram TATA Jaurus UTI
April 28/2006 April 30 April 28/2006 April 30 April 30 April 28/2006 April 28/2006 April 30 April 30 April 28 April 28 April 28 April 30 April 28 April 30
2834.42
2596.31
238.105 1044.08 904.905 107.666 2456.305 4001.282 18.921 1750.454 -27.351 1320.42 -89.22 358.614 935.631 28.693 589.787
8945.64 6489.34 27503.40 23502.12 30.18 26420.11 254.21 14505.97 9322.30 3631.35 10652.31 260.96 301.87 11.26 24669.65 281.56 13185.55 9411.52 3272.84 9716.68 232.27 29519.09
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An investor with limited funds might be able to invest in only one or two stocks/bonds, thus increasing his or her risk. However, a mutual fund will spread its risk by investing a number of sound stocks or bonds. A fund normally invests in companies across a wide range of industries, so the risk is diversified. Transparency: Mutual Funds regularly provide investors within formation on the value of their investments. Mutual Funds also provide complete portfolio disclosure of the investments made by various schemes and also the proportion invested in each asset type. Choice: The large amount of Mutual Funds offer the investor a wide variety to choose from. An investor can pick up a scheme depending upon his risk/ return profile. Regulations: All the mutual funds are registered with SEBI and they function within the provisions of strict regulation designed to protect the interests of the investor. RISKS OF MUTUAL FUNDS: Mutual funds are not free from risks. It is so because basically the mutual funds also invest in stick market on shares which are volatile in nature and are not risk free. Hence, the following risks are inherent in their dealings.
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MARKET RISKS: There are certain risks associated with every kind of investment on shares. They are called market risks. These market risks can be reduced, but can not be completely eliminated even by a good investment management. The prices of shares are subject to wide price fluctuations depending upon market conditions over which nobody has a control. Moreover, every economy has to pass through a cycle- boom, recession, slump and control. The phase of the business cycle affects the market condition to a larger extent. SCHEME RISKS: There are certain risks inherent in the scheme itself. It all depends upon the nature of the scheme. For instance, in a pure growth scheme, risks are greater. It is obvious because if one expects more returns as in the case of growth scheme, one has to take more risks. INVESTMENT RISKS: Whether the mutual fund makes money in share or loses depends upon the investment expertise of the Asset management company (AMC), the investment goes wrong, the fund has to suffer a lot. The investment expertise of various funds are different and it is reflected on the returns which they offer to investors. BUSINESS RISKS: The corpus of mutual fund might have been invested in a companys shares. If the business of that company suffers any set back, it cannot declare any dividend. It may even go to the extent of winding
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up its business. Though the mutual fund can withstand such a risk, its income paying capacity is affected.
POLITICAL RISKS:
Successive government bring with them fancy new economic ideologies and policies. It is often said that many economic decisions are politically motivated, changes in government brings in risks of uncertainty which every player in the financial service industry has to face. So mutual funds are no exception to it.
INVESTORS RIGHTS: The SEBI (MF) Regulations, 1993 contains specific provisions with regard s to investor servicing. Certain rights have been guaranteed to the investors as per the above Regulations. They are as follows UNIT CERTIFICATE An investor has a right to receive his unit certificates on allotment within a period of 10 weeks from the date of closure of subscription lists in the case of a close ended scheme and 6 weeks from the date of closure of the initial offer in the case of an open ended scheme. TRANSFER OF UNITS An investor is entitled to get the units certificate transferred within a period of 30 days from the date of lodgment of the certificates along with the relevant transfer forms. REFUND OF APPLICATION MONEY
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If a mutual fund is not able to collect the statutory amount (close ended funds Rs 20 core, open ended funds Rs 50 core or 60% of the targeted amounts which ever is higher) it has to return the application money as refund within a period of 6 weeks from the date of closure of subscription lists. If the refund is delayed beyond this period, each application is entitled to get the refund with interests at rate of 15% p.a. for period of delay. AUDITED ANNUAL REPORTS Every mutual fund is under an obligation to its investors to publish the audited annual reports and unaudited half yearly report through prominent newspapers in respect of each of its schemes within 6 months and 3 month respectively of the date of closure of accounts. SELECTION OF FUND Mutual funds are not magic institutions which can bring treasure to the million of their Investors within a short span of time. All funds are equal to start with. But in due course Of time, some excel the other. It all depends upon the efficiency with which the fund is being managed by the professionals of the fund. Hence, the investor has to be very careful in selecting a fund. He must take into account the following factors for evaluating the performance of any fund and then finally decide one he has to choose. OBJECTIVES OF FUND He must see the objectives of the fund whether income oriented or growth oriented.
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Income oriented are backed mainly by fixed by interests yielding securities like debentures and bonds where as growth oriented are backed by equities. It is obvious that Growth oriented schemes are more risky than income oriented schemes, and hence, the returns from such schemes are not comparable with each other. The investor should compare the particular scheme of one fund with the same scheme of another fund the objective of the scheme which he purpose to choose CONSISTANCY OF PERFORMANCE A mutual fund is always intended to give steady long term returns, and hence, the investor should measures the performance of a fund over a period of at least three years. Investors are satisfied with a fund that shows a steady and consistence performance than a fund which performs superbly in one year and other than the next year. Consistency in performance is a good indicator of its investment expertise. HISTORICAL BACKGROUND The success of any fund depends upon the competence of the management, its integrity, periodicity and experience. The funds integrity should be suspicion. A good historical record could be better horse to bet on the new funds. It is in accordance with the maxim a know devil is better than an unknown angel.
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COST OF OPERATION Mutual funds seek to do a better job of the invisible funds at a lower cost than the individuals could for their themselves. Hence, the prospective investor should scrutinize the expense ratio of the fund and compare it with others. Higher the ratio, lower will be the actual returns to investor. CAPACITY FOR INNOVATION The efficiency of fund manager can be tested by means of the innovative schemes he has introduced in the market somas to meet the divers needs of investors. An innovator will be always a successful man. It is quite natural that an Investor will look for funds which are capable of introducing innovations in the financial market. INVESTOR SERVICING The most important factor to be considered is prompted and efficient servicing. Service like quite response to investor queries, prompt dispatch of unit certificate, quick transfer of units etc. will go long way in creating a lasting impression in the minds of investors. MARKET TRENDS Traditionally it has been found that the stock market index and the inflation rate tend to move in the same direction where as the interest rates and the stock market index tend to move in the opposite direction. This sets the time for the investor to enter into the fund and come out of it. A prudent investor must keep his eyes on the stock
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market index, interest rate and the inflation rate. Of course, there is no scientific reasoning behind it. TRANSPARANCY OF THE FUND MANAGEMENT The success of a mutual fund depends to a large extent on the transparency of the fund management. In these days investor awareness, it is very vital that the fund should disclose the complete details regarding the operation of the fund. It will go long way in creating a lasting impression in the minds of the investors to patronize the for ever.
2. Procedure for Action In Case Of Default: On and from the date of the suspension of the certificate or the approval, as the case may be, the mutual fund, trustees or asset management company, shall cease to carry on any activity as a mutual fund, trustee or asset management company, during the period of suspension, and shall be subject to the directions of the Board with regard to any records, documents, or securities that may be in its custody or control 3. Restrictions on Investments: A mutual fund scheme shall not invest more than 15% of its NAV in debt Instruments issued by a single issuer, such investment limit may be extended to 20% of the NA V of the scheme with the prior approval of the Board of Trustees and the Board of Asset Management Company. A mutual fund scheme shall not invest more than 10% of its NAV in unrated debt instruments issued by a single issuer and the total investment in such instruments shall not exceed 25% of the NA V of the scheme No mutual fund under all its schemes should own more than ten per cent of any company's paid up capital carrying voting rights. A scheme may invest in another scheme under the same asset management company or any other mutual fund without charging any fees. The initial issue expenses in respect of any scheme may not exceed six percent of the funds raised under that scheme. Every mutual fund shall buy and sell securities on the basis of deliveries and shall in all cases of purchases, take delivery of relative securities and in all cases of sale, deliver the securities and shall in no case put itself in a
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position whereby it has to make short sale or carry forward transaction or engage in badly finance. Pending deployment of funds of a scheme in securities in terms of investment objectives of the scheme a mutual fund can invest the funds of the scheme in short term deposits of scheduled commercial banks. No mutual fund scheme shall make any investment in Any unlisted security of an associate or group company of the sponsor; or Any security issued by way of private placement by an associate or group company of the sponsor; The listed securities of group companies of the sponsor, which is in excess of 30% of the net assets [of all the schemes of a M.F.] No mutual fund scheme shall invest more than 10 per cent of its NAV in the equity shares or equity related instruments of any company.
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CHAPTER-4
PRODUCT PROFILE
SBIMFS PERFORMANCE INVESTMENT PHILOSOPHY OF SBIMF VARIOUS SCHEMES OF SBI MUTUAL FUND SUGGESTION PRODUCT INNOVATION SERVICE INNOVATION DISTRIBUTION FIRNT INNOVATION TECHNOLOGY INNOVATION ETHICAL CHALLENGES OF MUTUAL FUND INDUSTRY FUTURE PERSPECTIVE SERVICES DISTRIBUTION
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CHAPTER-4
PRODUCT PROFILE
SBI Mutual fund draws strength from Indias premier and largest bank: the State Bank of India .Set up July 1, 1955 the State Bank of India is the largest bank operation in the country. though years of commitment to service and national development, SBI has grown in to instrument of social change. Today it has 9019 branches in India (excluding over 700 branches of banking subsidiaries) and 51 offices in 31 countries spread over all time zones. SBI Mutual fund was the first Non UTI fund to be set up in 1987. Significant shift of investor from Bank deposit to Mutual Fund Industry happened during this period most funds were growth oriented close end funds. SBI mutual Fund has launched 31 schemes of which 14 have been redeemed, yielding handsome returns to investors. SBI MF was also the first bank sponsored Mutual Fund to launch an off shore fund the India Magnum fund with a corpus of around 225 cores Today the fund has an investor base of over 8lacs spread over 21 schemes with a large network over 35 collection branches ,26 investor service centers 3 investor service desk and 35 District organizers. SBI Mutual Fund a wholly owned subsidiary of SBI is among the leading mutual funds in the country in terms of size of net assets. SBI Mutual Fund was the first public sector Mutual Fund to start operations in the country and has currently an expertise of over 13 years in the capital markets.
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The marketing efforts are now concentrated on building a strong investor base in various places across the country (and not only the top 8 cities) by capitalizing on the strong brand image of the SBI The strong brand association of SBI along with focus on certain niche segments and innovative marketing practices has enabled SBIMF to attract even the common man to invest. Some of the unique strengths which are playing important role in making the people to invest in SBIMF Its large size with consequential economies of scale; Its nation-wide well entrenched distribution network and consequently its wide reach and capacity to mobilize large resources; Its brand image arising out of a public perception that the safety of funds is assured by its pseudo Government character, which may not be entirely unjustified. 2.5 SBIMFs Performance: For SBI Mutual, the year 2004 proved exceptional, with four of its schemes figuring in the top ten. SBI mutual fund won 3 GOLDS and 1 silver at the ICRA awards. Therefore SBIMFs performance is also one of the strength to attract common man to invest.
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Scheme Name Magnum balanced fund Magnum Global Fund Magnum Tax Gain Contra Fund
Award
Category
For the period (as on 31st Dec 2004) 1year 1year 1year 3years
Out performance v/s BSE 100 (%) 32.37 73.16 73.13 64.66
Balanced Equity Diversified Aggressive Tax plan ( ELSS) Equity Diversified Aggressive
DEBT Fund
Liquid fund Income fund Gilt Fund
Liquid Fund Liquidity Risk Liquidity risk arises when it becomes difficult to sell the securities that one has purchased. Liquidity Risk can be partly mitigated by diversification, staggering of maturities as well as internal risk controls that lean towards purchase of liquid securities
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Interest Rate Risk In a free market economy interest rates are difficult if not impossible to predict. Changes in interest rates affect the prices of bonds as well as equities. If interest rates rise the prices of bonds fall and vice versa. Equity might be negatively affected as well in a rising interest rate environment. A welldiversified portfolio might help mitigate this risk. Credit Risk The debt servicing ability (may it be interest payments or repayment of principal) of a company through its cash flows determines the Credit Risk. This credit risk is measured by independent rating agencies like CRISIL who rate companies and their paper. An AAA rating is considered the safest whereas a D rating is considered poor credit quality. A well-diversified portfolio might help mitigate this risk. Income Fund The income fund invest in all type of Debt instrument .The investment philosophy can be broadly defined as consisting of active duration and interest rate management to give optimal returns .The fund is divided mainly between Government securities and corporate bonds with some residual investments in money market instruments Gilt Fund Gilt Fund invest in the Gilt-edged government securities which is predominantly a wholesale market .It allows retail investors to participate in this market it aims to maximize returns by active interest rate management with zero credit risk
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Equity Funds Our investment philosophy revolves around the concept of growth at a reasonable price where we invest in growth oriented stocks which are available at attractive relative valuations We use a combination of Top Down approach and Bottom Down approach We identify and invest in business that has a sustainable competitive advantage We invest in medium term view, with an investment horizon of at least 18 months Risk control is an important element of our strategy We believe in proactive fund management to outperform benchmark indices Balanced Funds Balanced funds invest part of their money in stocks and part in bonds is known as balanced funds. Such fund will put more emphasis on equity share investment when the outlook is bright and will tend to switch to debentures when the future is expected to be poor of shares.
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funds. Volatility of such schemes will be in synchronization with the index. This investment is ideal for: Corporate, Institutions, Banks HNIs and Retail Investors desirous of investing in a basket of Nifty Index stocks for an investment as low as Rs. 5000/- with liquidity of Open-ended Mutual Fund Entryload Investments up to and including Rs. 50 Lakhs: 1.25% Investments above Rs. 50 Lakhs: Nil SIP a minimum of Rs. 1,000/- per month for 6 months or Rs. 1,500/for 4 quarters SWP available for a minimum of Rs. 500/- subject to maintaining the minimum investment payable on a monthly basis Dividend Option Available Magnum Sector Funds Umbrella: Launched in August 1999 Minimum investment of Rs. 2000 per sector Entry Load: Investments up to Rs. 50 Lakhs 2.25% Investments above Rs. 50 Lakhs & up to Rs. 2 Cores 0.50% Investments above Rs. 2 Cores Nil Targeted at investors seeking high growth and comfortable with attendant volatility SIP a minimum of Rs. 500/- per month for 6 months or Rs. 250/- for 12 months
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SWP available for a minimum of Rs. 500/- subject to maintaining the minimum investment payable on a monthly basis Choice of 4 high-growth sectors: I.T Fund FMCG Fund Parma Fund Contra Fund Information Technology Sector: With the threat of global economic slowdown looming large over the IT industry, software stocks have been under pressure for quite some time now. Inspire of this, the Indian IT industry continues to march ahead as seen by the latest results, making it one of the highest value-addition and net foreign exchange earning industry. The Indian IT industry has zoomed from Rs.98.92 bin, five years ago to Rs.554 bin in FY2000-01, a phenomenal CAGR of over 40%, which is almost double the growth rate of IT industries in many of the developed countries. The Indian IT industry can be classified into four sectors viz. Software, Hardware, Peripherals and Networking & Internet service providers. Fast Moving Consumer Goods: Fast Moving Consumer Goods (FMCG) is products that are typically purchased and consumed on a regular basis. Some examples of FMCG products include personal products (soaps, shampoos, hair oils, toothpastes, shaving razors etc.), fabric care, processed foods (dairy products, edible oils, chocolates, ice creams etc.), beverages, cigarettes etc. to name a few. The
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companies in this sector are sprucing up their brands and distribution networks to realize this huge potential. Pharmaceuticals: Pharmaceutical industry is a continuous growth industry, largely immune to economic recession and commodity cycles. The growth is spurred by a rising population, new disease incidence, and resurgence of certain diseases. The pharmaceutical industry grew at a compounded rate of 17% during the last 10 years. The companies renewed focus on streamlining their production facilities and increased marketing has seen these companies show a rise in their profits. In reflection of this, the stock prices have also rallied in the past year. Contra Fund: The objective of the Fund is to invest in undervalued scrips, which may be currently out of favor but are likely to show attractive growth in the long term. Thus, this fund provides an alternative to investors for investing in the growth scrips of the future. The funds collected under this scheme will be invested in the equities of: Companies that are fundamentally sound, but generally are undervalued at the time of investment due to lack of investor interest. Companies that have embarked on the path of turnaround by restructuring of operations, hiving off unrelated business, etc. And where the results of the turnaround are likely to accrue in the long term. Companies with strong
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management, but operating in commodities where there are signs of bottoming out of the business cycle
Magnum Multiplier plus Scheme: A diversified equity fund, focusing on steady growth Open-ended from April 1998 Minimum application of Rs. 1000 Entry Load: Investments up to Rs. 50 Lakhs 2.25% Investments above Rs. 50 Lakhs & up to Rs. 2 Cores 0.50% Investments above Rs. 2 Cores - Nil
Nomination facility available. Minors can also be nominated. SIP a minimum of Rs. 500/- per month for 6 months or Rs. 250/- for 12 months SWP available for a minimum of Rs. 500/- subject to maintaining the minimum investment payable on monthly basis SIP a minimum of Rs. 500/- per month for 6 months or Rs. 250/- for 12 months SWP available for a minimum of Rs. 500/- subject to maintaining the minimum investment payable on a monthly basis.
Magnum Equity Fund: This actively managed fund offers growth through investment in a portfolio of select blue chip stocks. The main features of the scheme are:
A diversified equity fund, focusing on aggressive growth Minimum application of Rs. 1000 Entry Load:
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Investments up to Rs. 50 Lakhs 2.25%.Investments above Rs. 50 Lakhs & up to Rs. 2 Cores 0.50%.Investments above Rs. 2 Cores - Nil
Ideal for investors who wish to benefit from the growth of the equity markets and are comfortable with the attendant volatility SIP a minimum of Rs. 500/- per month for 6 months SWP available for a minimum of Rs. 500/- subject to maintaining the minimum investment payable on a monthly basis
Magnum Tax Gain: This is a tax saving scheme, which has become open ended from November 11, 1999. Investment under this scheme up to Rs.10, 000 will have benefit of tax rebate under Section 88. The main features of the scheme are:
An open-ended ELSS scheme Min amount: Rs.500 .Statutory lock-in period of three years Entry Load: 2.25% .Ideal for retail investors planning to save Income Tax through investments under section 88, with the returns of Equity investments
2.7 SUGGESTIONS:
KEY IMPERATIVE ON WHICH SBI MUTUAL FUND SHOULD CONCENTRATE The SBI needs t looks at the retail segment seriously .Retail savings will be the key drivers of future growth. There needs to be an organized shift to the non metro market where the real retail savings is The distribution mechanism which is polarized today has to grow immersive
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With a view to reaching the cross section of the retail segment. The idea is to make product accessible The complex also high distribution cost need to be pegged at reasonable levels investors will need to do informed There has to be more transparency Move people to long term investments. Product Innovation: Fixed maturity plans for Risk Averse investors Sweep Plan to give returns of liquid fund and convenience of current account Floating rate funds to counter volatility in the Debt Asset allocation funds to suit varied investor profiles. P/E ratio funds Asset allocation with triggers Exchange Traded Fund to capture Intra day volatility Niche products like child care plan with ads on like insurance and scholarships Principal Protection Plan for capital Preservation. Service Innovation: Daily dividend facility to provide tax efficiency Insta cheque for over the counter redemption. T+1/T+0 redemption in debt liquid funds Direct debit credit Facilities Switch facility, Systematic investment plan, and systematic withdrawal plan.
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Systematic Transfer Plan to suit changing needs Cumulative dividend reinvestment /pay out and bonus unit options. Distribution Front Innovation: Postal network to distribute mutual funds. Retail distribution of mutual funds through the national stock Exchange. Increasing reach through collection centers and third party outlets like direct AMC serving outlets. Technology Innovation: Networking of branches to provide improved customer service and online information Call centers to disseminate information and handle investor queries. 3. Ethical challenges of mutual fund industry: The fund industry must overcome greed cultivated through decades of blind luck business success. They should hold on to a high ethical standard by embracing ethics even where it sacrifice near term growth. The industry must avoid searching forget rich-quick schemes. Future Perspective: The mutual fund industry must innovate and embrace technology Product: Hedge Funds Pension Funds Derivatives Linked Products Theme Funds
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Bundled Products Services: Smart triggers based on value and time of investments Advisory services Online payment systems with efficient and effective us of ATMS
Check writing facilities issue of checks to third parties
Distribution:
Technology channels like ATM ,WAP and KIOSKS Supermarkets Multilevel Marketing Customer Relationship management service models
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CHAPTER-5
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CHAPTER -5
The below graph showing the percentage of the Investors invested in different companies.
8% 20% 10% 6%
From the graph we can interpret that respondents have invested in various companies. SBI leading in the list with 30% showing the popularity of the company.
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Table no 2 showing the investor in which scheme they have option to invest. Scheme Equity Debt Liquid Balance Fund Total No: of Respondents 35 5 10 0 50 Percentage (%) 70 10 20 0 100
The graph shows the percentage of respondents that have invested in different scheme
0 20 10 70 %
Equity Debt
From the graph we can interpret that majority of the respondents have invested in equity schemes. Very few respondents have invested in other schemes.
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RETURNS
30
SECURITY
60
TAXBENEFIT
10
20
40
60
80
From the graph we can interpret that majority of the respondents have invested in mutual fund because of safety. Other investors have invested due to returns.
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Table no 4 showing the number of investors satisfied with the service of SBI Mutual Fund Company. No of Respondents 40 10 50 Percentage (%) 80 20 100
Graph Shows Percentage of the investors satisfied with the service of their Companys
20%
80%
From the graph we can interpret that majority of the respondents have satisfied with the service of Mutual Fund Company. SBI Mutual Fund has been successful in this area.
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Table no 5 shows how the investors will visualize Mutual Fund from investment angel. Long Term Investment Risk Coverage Reasonable rate of return Total No: of respondents 10 30 10 50 Percentage (%) 20 60 20 100
Graph shows the percentage of the investors that they visualize Mutual Fund from different angel.
From the graph we can interpret that majority of the respondents have visualized mutual fund from risk coverage point of view. Other investors have visualized mutual fund from long term Investment point of view.
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Table no 6 showing the investors their expected rate of return from investment in Mutual Fund. Rate of Return 7 10 % 10 15 % 15% and above Total No: of Respondent 5 35 10 50 Percentage (%) 20 50 30 100
7% - 10%
50 40 30 20 10 0 Rate of Return
We can interpret that half of the respondents have got 10-15% return, while 30% investors have got returns 15% and above.
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Table no 7 showing investment timeframe in mutual fund Period Less than I year 1 to 3 years 3 to 5 years More than 5 years Respondents 25 12 7 6 Percentage (%) 50 24 14 12
We can interpret that half of the respondents have invested in mutual fund for shorter time duration. Other investors have invested in mutual fund for time duration of 1 to 3 years.
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CHAPTER-6
FINDINGS, SUGGESSION AND CONCLUSION
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CHAPTER-6
Conclusion Positive investor perception is the ultimate for any mutual fund. SBI is leading in this area. as more and more private mutual funds are entering in to the industry . So company need to concentrate on its core activities to improve the customers perception. Unless and until the company provides innovative schemes to its the customers, positive perception wont develop. Mutual Fund is not new to India; it is there from the past 4 decades. Only from past one decade after the entry of private Mutual Fund and Foreign (sponsored) Mutual Funds, the competition and innovation took place in the Indian Mutual Fund Industry in a rather short period, has grown from infancy to adolescence.
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BIBLIOGRAPHY Books referred: Financial markets and services: By E GORDEN BY DR. K. NATARAJAN Mutual Fund in India: By H. Sadhak Financial services and Investment: By B V Ragunandan Journals Investor India: Business World, business India, Investor Websites: www. Way2wealth.com www.amfi.com www.Mutual fund India .com www.sbimf.org www.mutualfundsindia.com www.google.com mf.pdf www.sbi.com
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QUESTIONNAIRE
Dear Sir/Madam, I am the students of Final Year BBM Studying in U.S.M.R.F.G.College at Kuvempu University, Shankaraghatta, have undertaken A study of Investor Expectation towards SBI Mutual Funds I request you to kindly spare your valuable time to fill up the questionnaire. The information given by you will be used only for academic purpose and kept highly confidential. Thanking you. Yours Faithfully
NETHRAVATHI.E
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4) Profession : Government sector Engineers Others If others, specify 5) Spouse 6) Income level : Employed : 5000-15000PM 16000-30000PM 7) Have you invested in mutual fund schemes? Yes No
KOTAK MAHINDRA
9) In the above schemes you opted for Open ended scheme close ended
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10) Select the scheme you would invested in mutual fund Equity scheme Liquid scheme Debt scheme Balance ended scheme
11) How do you visualize mutual fund from investment angle As long term investment As risk coverage As reasonable rate of return
13) Are you interested in government or Private Mutual Fund Company? Government Private
14) Are you satisfied with the service of SBI Mutual Fund Company? Satisfied Not satisfied
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15) What is your investment time frame i.e. for how long you set aside your funds? Less than 1 year 1 year to 3 years 3 years to 5 years More than 5 years 16) What is the expected return on your investment? 7% - 10% 10% - 15% 15% and above
17) What is your opinion about SBI mutual fund? 14. What is the amount of Money you plan to invest in Mutual Funds? a. Rs. 5- 10 Thousand c. Rs. 50- 1 lakhs [ ] [ ] b. Rs.1050 Thousand [ d. Rs. 1 lakhs & above [ ] ]
18. Do you find that rate of interest you are paying for portfolio Management is? a. Competitive c. High [ [ ] ] b. Reasonable d. Low [ [ ] ]
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19. What type of investment you are paying /want to pay? a. Monthly c. Half yearly [ [ ] ] b. d. Quarterly Annually [ [ ] ]
20. Are you satisfied with the different services provided by the Mutual Funds schemes? a. Yes [ ] b. No [ ]
21. If yes what is your opinion about the competitive services of other Mutual Funds schemes? a. Excellent c. Satisfactory [ [ ] ] b. Good d. Poor [ [ ] ]
22. How do you rate the services provided by SBI Mutual Funds? a. Excellent c. Satisfactory [ [ ] ] b. Good d. Poor [ [ ] ]
Thanking you
Date: Place: Signature:
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