What is Mutual Funds?

Mutual Fund is…

 A Mutual Fund is a trust that pools the savings of a number of
investors who share a common financial goal.

 Anybody with an investible surplus of as little as a few thousand

rupees can invest in Mutual Funds.

 These investors buy units of a particular Mutual Fund scheme that

has a defined investment objective and strategy.

 The money collected is invested by the fund manager in different

types of securities. These could range from shares to debentures to
money market instruments, depending upon the scheme’s stated
objectives.

 The income earned through these investments and the capital

appreciation realized by the scheme are shared by its unit holders in
proportion to the number of units owned by them.
Flow Chart of Mutual Fund..
About SBI Mutual Fund..
 With 30 years of rich experience in fund
management, SBI Funds Management Pvt. Ltd.
bring forward their expertise by consistently
delivering value to their investors. SBI-MF have a
strong and proud lineage that traces back to the
State Bank of India (SBI) - India's largest bank. The
SBIMF is a Joint Venture between SBI and
AMUNDI (France), one of the world's leading
fund management companies.
 With a network of over 222 points of acceptance
across India, SBI-MF deliver value and nurture the
trust of their vast and varied family of investors.
VISION
 To be the most preferred and the largest
fund house for all asset classes, with a
consistent track record of excellent
returns and best standards in customer
service, product innovation, technology
and HR practices.
MISSION
 Investors are their priority. Their mission has
been to establish Mutual Funds as a viable
investment option to the masses in the country.
Working towards it, SBIMF developed innovative,
need-specific products and educated the investors
about the added benefits of investing in capital
markets via Mutual Funds.
 Today, SBIMF have been actively managing their
investor's assets not only through their
investment expertise in domestic mutual funds,
but also offshore funds and portfolio management
advisory services for institutional investors.
Advantage of Mutual Funds
 Portfolio Diversification
 Professionally Management
 Diversification of Risk
 Wide Choice to Investor for MF
 Liquidity
 Convenience & flexibility
 Transparency
Disadvantage of Mutual Fund
 No Control Over Cost
 Redemption Charges if Withdrawn
 No Standard Portfolios
 No Guarantee of Returns
 Subject to Market Risk
Types Of Mutual Fund
Type of
Mutual Fund
Schemes

Special
Investment
Structure Schemes
Objective

Industry
Open Ended
Growth Funds Specific
Funds
Schemes

Close Ended Index

Income Funds
Funds Schemes

Balanced Sectoral
Interval Funds
Funds Schemes

Money Market
Funds
Types of Mutual Funds SBI MF Serve
 Open-end Fund
• Available for sale and repurchase at all times based on the net asset value
(NAV) per unit.
• Unit capital of the fund is not fixed but variable.
• Fund size and its total investment go up if more new subscriptions come
in than redemptions and vice-versa.

 Closed-end Fund
• One time sale of fixed number of units.
• Investors are not allowed to buy or redeem the units directly from the
funds. Some funds offer repurchase after a fixed period. For example, UTI
MIP offers a repurchase after 3 years.
• Listed on stock exchange and investors can buy or sell units through the
exchange.
• Units maybe traded at a discount or premium to NAV based on investor’s
perception about the funds future performance and other market factors.
Mutual Fund Types
 Money Market Funds/Cash Funds
• Invest in securities of short term nature I.e. less than one year
maturity.
• Invest in Treasury bills issued by government, Certificates of
deposit issued by banks, Commercial Paper issued companies and
inter-bank call money.
• Aim to provide easy liquidity, preservation of capital and moderate
income.

 Gilt Funds
• Invest in Gilts which are government securities with medium to
long term maturities, typically over one year.
• Gilt funds invest in government paper called dated securities.
• Virtually zero risk of default as it is backed by the Government.
• It is most sensitive to market interest rates.The price falls when
the interest rates goes up and vice-versa.
Debt Funds
 Debt Funds/Income Funds
• Invest in debt instruments issued not only by
government, but also by private companies, banks and
financial institutions and other entities such as
infrastructure companies/utilities.
• Target low risk and stable income for the investor.
• Have higher price fluctuation as compared to money
market funds due to interest rate fluctuation.
• Have a higher risk of default by borrowers as
compared to Gilt funds.
• Debt funds can be categorized further based on
their risk profiles.
• Carry both credit risk and interest rate risks.
Equity Funds
• Invest a major portion of their corpus in equity
shares issued by companies, acquired directly in initial
public offering or through secondary market and keep
a part in cash to take care of redemptions.

• Risk is higher than debt funds but offer very high

growth potential for the capital.

• Equity funds can be further categorized based on

their investment strategy.

• Equity funds must have a long-term objective.

Hybrid Funds
 Balanced Funds:
• Has a portfolio comprising of debt instruments,
convertible securities, preference and equity
shares.
• Almost equal proportion of debt/money market
securities and equities. Normally funds maintain a
Equity-Debt ratio of 55:45 or 60:40.
• Objective is to gain income, moderate capital
appreciation and preservation of capital.
• Ideal for investors with a conservative and long-
term orientation.
Probability of Returns
 SBI MF Growth from 2006-2012
Series1

5000000

4500000

4000000

3500000

3000000

2500000

2000000

1500000

1000000

500000

0
CONCLUSION

 After studying & analyzing different mutual

fund schemes the following conclusions can
be made:
 Diversified stock portfolios have offered
superior long term inflation protection
 Portfolio managers have done a fairly good
job in generating positive returns
 Those who want to eliminate the risk
element should invest in MF
 The Performance of SBIMF is good, and
there is more prospect chances.
Thanks