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A COMPARATIVE STUDY OF ULIPS VS MUTUAL FUNDS

AT
SBI MUTUAL FUNDS

Presented

by
P.Reddy Raja Reddy.
Roll no:13691E0083,
Under guaidence of

Dr.Thulasi Krishna. K

INTRODUCTION

ULIPS

ULIPS means unit linked insurance policies,


ULIPs are basically work like a mutual fund with a
life cover thrown in. They invest the premium in
market-linked instruments like stocks, corporate
bonds and government securities . The basic
difference between ULIPs and traditional insurance
plans is that while traditional plans invest mostly in
bonds and gsecs, ULIPs mandate is to invest a major
portion of their corpus in stocks. However,
investments in ULIP should be in tune with the
individuals risk appetite.

INTRODUCTION

MUTUAL FUNDS

Mutual funds have become extremely popular over the


last 20 years. What was once just another obscure financial
instrument is now a part of our daily lives. More than 20
million people, or one half of the households in America,
invest in mutual funds. That means that, in the United States
al one, trillions of dollars are invested in mutual funds.

In fact, too many people, investing means buying


mutual funds. After all, its common knowledge that investing
in mutual funds is (or at least should be) better than simply
letting your cash waste away in a savings account, but, for
most people, thats where the understanding of funds ends. It
doesnt help that mutual fund sale people speak a strange
language that is interspersed with jargon that many investors
dont understand.

STATEMENT OF THE PROBLEM

Mutual funds and ULIPS do not provide assured returns. Their


returns are linked to the performance of the companies in
which they invest. Most of the investors are not aware of
mutual funds and ULIPs. They are easily be convinced by
the stock brokers and other financial advisors.
Thus
investors opt these funds and ULIPs at their own risk.
All these investments involve an element of risk.
So the investor has to choose the schemes very carefully.

OBJECTIVES OF THE STUDY

To study and compare the returns of SBI ULIPS with SBI


MUTUAL FUNDS; and

To observe which investment option (Ulips /Mutual Funds)


is beneficial to investors.

NEED FOR THE STUDY

ULIPs offer a lot more variety than traditional life insurance plans.
So there are multiple plans. There are options at the individuals
disposal. ULIPs generally come in three broad variants:

Aggressive ULIPs (which can typically invest 80%-100% in equities,


balance in debt)

Balanced ULIPs (can typically invest around 40%-60% in equities)

Conservative ULIPs (can typically invest up to 20% in equities)

Although this is how the ULIP options are generally designed, the
exact debt/equity allocations may vary across insurance companies.

SCOPE OF THE STUDY

The scope of the study is limited to different mutual


fund schemes and different life insurance schemes of SBI.
The present study has taken to observe the returns of
ULIPs and Mutual funds. This enables to study short term
and long term returns.

STATISTICAL TOOLS

Correlation co-efficient, standard deviation

METHODOLOGY

The research design used to undertake the project is of


exploratory research.

Data Sources

The data sources used for the study are

Secondary data:

The secondary data is obtained from sources like

Study reference books.

Internet.

Current NAVs of SBI MUTUAL FUNDS .

Fact sheets.

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