Professional Documents
Culture Documents
PROJECT 2013
ON
SUBMITTED TO
INTERNAL GUIDE:
EXTERNAL GUIDE:
N.N PANDAY
IMS Unison University
SUBMITTED BY:
AKSHAY TYAGI
13 MBA 068
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DECLARATION
AKSHAY TYAGI
13 MBA 068
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ACKNOWLEDGEMENT
Preservation, inspiration and motivation have always played a key role in the success of any
venture. In the present world of cutthroat competition project is likely a bridge between
theoretical and practical working, willingly we have prepared this particular project.
First of all, I would like to thank the supreme power, the almighty god who is obviously the
one who has always directed us to work on the right path of our life. With this grace this
grace this project could become a reality.
We feel highly delighted with the way our dissertation report on topic INVESTORS
PERCEPTION ABOUT INVESTMENT IN MUTUAL FUND: WITH SPECIAL
REFERENCE TO SBI MUTUAL FUND PVT. LTD. DEHRADUN has been completed.
We would like to thanks Prof. N.N.Panday to provide us the fruitful guidance to complete the
project.
Finally, I would like to thanks all the faculty members and others people who helped us in
completing this project.
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I have the pleasure in certifying that Mr. AKSHAY TYAGI is a bonafide student of 3rd
Semester of the Masters Degree in Business Administration (Batch 2013-15), of IMS,
Unison University, Dehradun, Roll No 13 MBA 068.
He has completed his/her project work entitled investors perception towards investment in
mutual fund: a special reference to SBI Mutual fund management. Pvt. Ltd. dehradun under
my guidance.
I certify that this is his/her original effort & has not been copied from any other source. This
project has also not been submitted in any other Institute / University for the purpose of
award of any Degree.
This project fulfils the requirement of the curriculum prescribed by this Institute for the said
course. I recommend this project work for evaluation & consideration for the award of
Degree to the student.
Signature
Name of the Guide
Designation
Date
:
:
:
:
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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.
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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 Dehradun to get some knowledge related to my
topic. I studied about the products and strategies of other AMCs in Dehradun to know why
people prefer to invest in those AMCs.
PERCEPTION ABOUT INVESTMENT IN MUTUAL FUND. The data collected has been
well organized and presented. I hope the research findings and conclusion will be of use.
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COMPANY CERTIFICATE
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CONTENTS
Sr. no.
Chapter
Page. No.
DECLERATION
ACKNOWLEDGMENT
EXECUTIVE SUMMARY
COMPANY CERTIFICATE
CHAPTER-01
1. INTRODUCTION
12
3. INTRODUCTION TO ORGANISATION
14
17
5. COMPETITORS
26
28
42
CHAPTER-02
1. RESEARCH METHODOLOGY
51
CHAPTER-03
1. OBJECTIVE & SCOPE OF STUDY
55
CHAPTER-04
1. ANALYSIS & INTERPRETATION OF THE DATA
58
FINDINGD
71
CONCLUSION
73
75
BIBLIOGRAPHY
77
ANNEXURE-QUESTIONNAIRE
78
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CHAPTER - 01
INTRODUCTION
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of the scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net of
its liabilities. NAV of a scheme is calculated by dividing the market value of scheme's assets
by the total number of units issued to the investors.
The
share
of
the
private
players
has
risen
rapidly
since
then.
Currently there are 34 Mutual Fund organizations in India managing 1,02,000 crores.
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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 net asset value is given
below. The net asset value is the actual value of a unit on any business day. NAV is the
barometer of the performance of the scheme. The net asset value is the market value of the
assets of the scheme minus its liabilities and expenses. The per unit NAV is the net asset value
of the scheme divided by the number of the units outstanding on the valuation date.
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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.
Entry of non-UTI mutual funds. SBI Mutual Fund was the first followed by Canbank
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 in 1989
and GIC in 1990. The end of 1993 marked Rs.47, 004 as assets under management.
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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 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 crores. The Unit Trust of India with Rs.44, 541 crores of
assets under management was way ahead of other mutual funds.
This phase brought bitter experience for UTI. It was bifurcated into two separate
entities. One is the Specified Undertaking of the Unit Trust of India with AUM of Rs.29, 835
crores (as on January 2003). 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. The second is the UTI Mutual Fund
Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under
the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March
2000 more than Rs.76,000 crores of AUM 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, the mutual fund industry has entered its current phase of
consolidation and growth. As at the end of September, 2004, there were 29 funds, which
manage assets of Rs.153108 crores under 421 schemes.
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SBI mutual fund was setup on June 29th, 1987 and incorporated on February 7th,
1992. It is a result of joint venture between State Bank of India and Society Generale
Asset Management of France. This is a bank sponsored mutual fund and has a base of
3.5 million investors (approx). Over the years it has carved a niche for itself through
prudent investment decisions and consistent wealth creation for its customers. They
offer Mutual Fund products in Equity Funds, Index Funds, Balanced Funds, Debt
Funds, etc.
The assets under management are Rs 33,727.90 crores as of June, 30, 2010.
Investment Yogi analyses the best performing SBI mutual fund in the Balanced Fund,
Equity Fund and Equity Linked Savings Scheme (ELSS) categories.
SBI Mutual Fund operates under State Bank of India and Society Generale Asset
Management of France and has asset management experience of more than 25 years. SBI
Mutual Fund offers different kinds of products like growth based products, income based
products and balanced funds.
The SBI Mutual Fund operates under State Bank of India and Socit Gnrale Asset
Management of France. With over twenty years of experience in asset management, the
company has grown immensely since its establishment. SBI Mutual Funds offer innovative
mutual fund products to its wide pool of customers and its products are available across India.
It has a wide portfolio of products that meet the requirements of different types of investors.
The SBI Mutual Fund is headed by Mr Syed Shahabuddin, Managing Director of the
company.
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Setup date
Jun-29-1987
Incorporation date
Feb-07-1992
Sponsor
Trustee
Chairman
Ms.Arundhati Bhattacharya
CEO / MD
CIO
Compliance Officer
Mr. C A Santosh
Assets Managed
Custodians
Corporate Office
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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. Such investments are advisable for the risk-averse investor and as a part of
the investment portfolio for other investors.
A. Magnum Childrens Benefit Plan
B. Magnum Gilt Fund
Magnum Gilt Fund (Long Term)
Magnum Gilt Fund (Short Term)
C. Magnum Income Plus Fund
Magnum Income plus Fund (Saving Plan)
Magnum Income plus Fund (Investment Plan)
D. Magnum Insta Cash Fund
E. SBI Debt Fund Series
SDFS 15 Months Fund
SDFS 90 Days Fund
SDFS 13 Months Fund
SDFS 18 Months Fund
SDFS 24 Months Fund
SDFS 30 DAYS
SDFS 30 DAYS
SDFS 60 Days Fund
SDFS 180 Days Fund
SDFS 30 DAYS
F. SBI Premier Liquid Fund
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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
Magnum NRI Investment Fund - Flexi Asset Plan
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When an investor subscribes for the units of a mutual fund, he becomes part owner of the
assets of the fund in the same proportion as his contribution amount put up with the corpus
(the total amount of the fund). Mutual Fund investor is also known as a mutual fund
shareholder or a unit holder. Any change in the value of the investments made into capital
market instruments (such as shares, debentures etc) is reflected in the Net Asset Value (NAV)
of the scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net of
its liabilities. NAV of a scheme is calculated by dividing the market value of scheme's assets
by the total number of units issued to the investors.
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 appreciations realized are shared by its unit holders in proportion to the number of
units owned by them. Thus a Mutual Fund is the most suitable investment for the common
man as it offers an opportunity to invest in a diversified, professionally managed basket of
securities at a relatively low cost.
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MUTUAL FUND
There are many entities involved and the diagram below illustrates the organizational set up
of a mutual fund:
must be at least 4 members in the board of Trustees and at least 213 of the members of the
board of trustees must be independent. One of the major tasks of the Trustees is to appoint
AMC, in consultation with the Sponsor and SEBI regulations.
Asset Management Company (AMC)
Asset Management Company, registered with SEBI, can be appointed as investment
managers of mutual funds. AMC must have a minimum net worth of 10 crore at all times. An
AMC cannot be an AMC or Trustee of another Mutual Fund. AMC appoints the Fund
Managers in consultation with trustees.
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Open-ended funds: Investors can buy and sell the units from the fund, at any
point of time.
Close-ended funds:
Therefore, after the offer period, fresh investments can not be made into the
fund. If the fund is listed on a stocks exchange the units can be traded like
stocks (E.g., Morgan Stanley Growth Fund). Recently, most of the New Fund
Offers of close-ended funds provided liquidity window on a periodic basis such
as monthly or weekly. Redemption of units can be made during specified
intervals. Therefore, such funds have relatively low liquidity.
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With fluctuating share prices, such funds show volatile performance, even
losses. However, short term fluctuations in the market, generally smoothens
out in the long term, thereby offering higher returns at relatively lower
volatility. At the same time, such funds can yield great capital appreciation as,
historically, equities have outperformed all asset classes in the long term.
Hence, investment in equity funds should be considered for a period of at least
3-5 years. It can be further classified as:
i) Index funds- In this case a key stock market index, like BSE Sensex or
Nifty is tracked. Their
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viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in line
with that of the fund.
INVESTMENT STRATEGIES
1. Systematic Investment Plan: under this a fixed sum is invested each month
on a fixed date of a month. Payment is made through post dated cheques or
direct debit facilities. The investor gets fewer units when the NAV is high and
more units when the NAV is low. This is called as the benefit of Rupee Cost
Averaging (RCA)
2. Systematic Transfer Plan:
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Interval-Schemes
These schemes combine the features of Open-ended and Close-ended schemes. They may be
traded on the stock exchange or may be open for sale or redemption during pre-determined
intervals at NAV based prices.
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Income/Debt-Schemes
These schemes invest in money markets, bonds and debentures of corporate companies with
medium and long-term maturities. These schemes primarily target current income instead of
capital appreciation. Hence, a substantial part of the distributable surplus is given back to the
investor by way of dividend distribution. These schemes usually declare quarterly dividends
and are suitable for conservative investors who have medium to long term investment horizon
and are looking for regular income through dividend or steady capital appreciation.
These schemes, also commonly known as Income Schemes, invest in debt securities such as
corporate bonds, debentures and government securities. The prices of these schemes tend to
be more stable compared with equity schemes and most of the returns to the investors are
generated through dividends or steady capital appreciation. These schemes are ideal for
conservative investors or those who are not in a position to take higher equity risks. However,
as compared to the money market schemes they do have a higher price fluctuation risk and
compared to a Gilt fund they have a higher credit risk. HDFC Income Fund is an example of
bond schemes.
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Hybrid/Balanced Schemes
These schemes are also commonly called balanced schemes. These invest in both equities as
well as debt. By investing in a mix of this nature, balanced schemes seek to attain the
objective of income and moderate capital appreciation. Such schemes are ideal for investors
with a conservative, long-term orientation. HDFC Prudence Fund and HDFC Balance Fund
are perfect examples of such hybrid schemes.
Other Schemes:
Tax-Saving-Schemes
Investors (individuals and Hindu Undivided Families ("HUFs")) are being encouraged to
invest in equity markets through Equity Linked Savings Scheme ("ELSS") by offering them a
tax rebate. Units purchased cannot be assigned / transferred/ pledged / redeemed / switched out until completion of 3 years from the date of allotment of the respective Units. The
Scheme is subject to Securities & Exchange Board of India (Mutual Funds) Regulations,
1996 and the notifications issued by the Ministry of Finance (Department of Economic
Affairs), Government of India regarding ELSS. Subject to such conditions and limitations, as
prescribed under Section 88 of the Income-tax Act, 1961, subscriptions to the Units not
exceeding Rs.10, 000 would be eligible to a deduction, from income tax, of an amount equal
to 20% of the amount subscribed.
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Special Schemes:
Sector-Specific-Equity-Schemes
These schemes restrict their investing to one or more pre-defined sectors, e.g. technology
sector. They depend upon the performance of these select sectors only and are hence
inherently more risky than general purpose equity schemes. These schemes are ideally suited
for informed investors who wish to take a risk on the concerned sector.
Index-Schemes
An Index is too used as a measure of the performance of the market as a whole, or a specific
sector of the market. It also serves as a relevant benchmark to evaluate the performance of
mutual funds. Some investors are interested in investing in the market in general rather than
investing in any specific fund. Such investors are happy to receive the returns posted by the
markets. As it is not practical to invest in each and every stock in the market in proportion to
its size, these investors are comfortable investing in a fund that they believe is a good
representative of the entire market. Index Funds are launched and managed for such
investors.
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Systematic risk
The systematic risk affects the entire market. The economic conditional, political
situations, sociological changes affect the entire market in turn affecting the company
and even the stock market. These situations are uncontrollable by the corporate and
investor.
Unsystematic risk
The unsystematic risk is unique to industries. It differs from industry to industry.
Unsystematic risk stems from managerial inefficiency, technological change in the
production process, availability of raw materials, changes in the consumer preference,
and labour problems. The nature and magnitude of above mentioned factors differ from
industry to industry and company to company.
In a general view, the risk for any investor would be the probable loss for
investing money in any mutual fund. But when we look at the technical side of it , we
cant just say that these schemes/fund carry risk without any proof. They are certain set
of formulas to say the percentage of risk associated with it.
There are certain tools or formulas used to calculate the risk associated with the
schemes. These tools help us to understand the risk associated with the schemes. These
schemes are compared with the benchmark BSE 100.
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Website
www.axismf.com
www.birlasunlife.com
www.hdfcfund.com
www.lntmf.com
www.reliancemutual.com
www.utimf.com
www.ingim.co.in
www.edelweissmf.com
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1.
Making Risk- adjusted returns comparison. By doing this the investor will know whether
the returns generated by the scheme have been adequately compensated for the extra risk
undertaken by the scheme.
2.
The investor depending upon his risk appetite and preferences should sub-classify the
schemes on the basis of the characteristics of the schemes, which may be defensive or
aggressive in nature.
3.
4.
5.
The corpus size of the scheme is also of importance. A large corpus size firstly denotes
investors confidence in the scheme and its fund manger abilities over the years and,
secondly it allows the fund manager to diversify the portfolio, which reduces the overall
market risk.
6.
Other factors like turnover rates, low expense ratio, load structure etc of the schemes etc
should also be considered before finally zeroing down on a scheme of your choice.
7.
The rankings undertaken by ICRA are an initiative to inform the investors- who does not
have the time or the expertise to undertake the analysis on their own- about the relative
performance of the schemes. It considers all important parameters to arrive at a
comprehensive rank with a view to help investors decide the scheme which may suit their
investment profile.
8.
Although much neglected, the due diligence in selection of the right mutual fund scheme
is of utmost importance as an investor cannot move in and out of a particular scheme on a
regular basis, because of the high costs involved, and investments made into a particular
scheme should be looked on a long-term basis as a wealth creation tool.
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Mutual funds are much like any other product, in that there are manufacturers who provide
the product and there are dealers who sell them.
Large banks to organized brokerage houses to Individual Financial agents get empanelled
with Mutual Funds to provide advice and assistance to customers who want to buy units.
Mutual funds units can now also be bought over the Internet.
Contacting an Investment advisor in a bank or a brokerage house or an Independent Financial
Advisor is the first step to gathering information.
1.
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Remember, just like a salesman in a gift shop, your investment advisor can help you
the most if he knows what you are looking for.
2.
Purchase
After you have decided to save, you may have to decide among the various
investment and withdrawal options that any fund offers to its investors.
Most of these schemes also offer various options to customize your operation of the
fund to your needs:
Systematic Investment Plan (SIP): Allows you to save a part of your income regularly.
It is also used to reduce risk when investing in schemes targeting aggressive growth.
Automatic debit: Saves the hassle of writing a cheque when making an investment.
Your account is debited automatically for the amount invested.
Automatic credit: The reverse of Automatic Debit. It saves the hassle of enchasing a
cheque when withdrawing an investment. Your account is credited automatically with
the amount withdrawn.
Dividend plan: Allows you to get Tax-free dividends from your investment. (As per
current Tax laws).
Growth plan: Allows the income generated from investment to be ploughed back into
the scheme. Used by investor targeting growth in their investment.
Some funds carry an entry load, which is a percentage fee deducted from the amount
invested before investment. Thus a 2.5% entry load will mean that if you invest Rs. 1
lakh in a Rs. 10 per unit IPO, instead of getting 10,000 units, you will be allotted
9,750 units. Check for presence of such loads and other conditions before investing.
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After deciding the choice of mutual fund, investment and withdrawal, you are ready
to begin your savings. You need to now fill up an application form and attach a
cheque of the value of your investment or mention your account number to have it
automatically debited from your account.
3.
4.
Exit
While you should periodically monitor the performance of your investments, we
recommend you do not get swayed by short term considerations in deciding your exit.
If you have invested in a long term fund, you can spare yourself undue worries by not
monitoring the NAV every day or week. Checking the performance once in a while
along with your advisor should be fine. Most mutual funds will provide you with a
toll free number that works from 9 am to 5 am and a website. For specific assistance
you can also use your financial advisors help.
5.
Redemption/ Withdrawal
Just submit your completed transaction within the transacted time for the scheme that
you are invested in and deposit the same at the nearest CAMS Investor Service Centre
or the office of the fund. You can either get a direct credit to your bank account or
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you can generally collect the cheque at the CAMS Investor Service Centre/ AMC
offices. If you fail to do so then the cheque is couriered to the address mentioned in
your account statement. Most funds take 1-3 days to credit your account with your
redemption proceeds.
In case an exit load is applicable to your withdrawal and you have redeemed a fixed
amount, an additional number of units equivalent to the exit load amount will be
liquidated from your investment. You can check this amount with the mentioned exit
load when you get the account statement using a simple calculator.
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2.Diversification.
Mutual funds invest in a broad range of securities. This limits investment risk by reducing the
effect of a possible decline in the value of any one security. Mutual fund shareowners can
benefit from diversification techniques usually available only to investors wealthy enough to
buy significant positions in a wide variety of securities.
3.LowCost.
If you tried to create your own diversified portfolio of 50 stocks, you'd need at least $100,000
and you'd pay thousands of dollars in commissions to assemble your portfolio. A mutual fund
lets you participate in a diversified portfolio for as little as $1,000, and sometimes less. And if
you buy a no-load fund, you pay no sales charges to own them.
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Most funds now offer extensive websites with a host of shareholder services for immediate
access to information about your fund account. Or a phone call puts you in touch with a
trained investment specialist at a mutual fund company who can provide information you can
use to make your own investment choices, assist you with buying and selling your fund
shares, and answer questions about your account status.
6. Ease of Investing
You may open or add to your account and conduct transactions or business with the fund by
mail, telephone or bank wire. You can even arrange for automatic monthly investments by
authorizing electronic fund transfers from your checking account in any amount and on a date
you choose. Also, many of the companies featured at this site allow account transactions
online.
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15. Safekeeping
When you own shares in a mutual fund, you own securities in many companies without
having to worry about keeping stock certificates in safe deposit boxes or sending them by
registered mail. You don't even have to worry about handling the mutual fund stock
certificates; the fund maintains your account on its books and sends you periodic statements
keeping track of all your transactions.
16. Retirement and College Plans
Mutual funds are well suited to Individual Retirement Accounts and most funds offer IRAapproved prototype and master plans for individual retirement accounts (IRAs) and Keogh,
403(b), SEP-IRA and 401(k) retirement plans. Funds also make it easy to invest -- for
college, children or other long-term goals. Many offer special investment products or
programs tailored specifically for investments for children and college.
20. Margin
Some mutual fund shares are marginable. You may buy them on margin or use them as
collateral to borrow money from your bank or broker. Call your fund company for details.
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1. Professional Management.
Did you notice how we qualified the advantage of professional management with the word
"theoretically"? Many investors debate whether or not the so-called professionals are any
better than you or I at picking stocks. Management is by no means infallible, and, even if the
fund loses money, the manager still takes his/her cut. We'll talk about this in detail in a later
section.
2. Costs.
Mutual funds don't exist solely to make your life easier - all funds are in it for a profit. The
mutual fund industry is masterful at burying costs under layers of jargon. These costs are so
complicated that in this tutorial we have devoted an entire section to the subject.
3. Dilution.
It's possible to have too much diversification. Because funds have small holdings in so many
different companies, high returns from a few investments often don't make much difference
on the overall return. Dilution is also the result of a successful fund getting too big. When
money pours into funds that have had strong success, the manager often has trouble finding a
good investment for all the new money.
4. Taxes.
When making decisions about your money, fund managers don't consider your personal tax
situation. For example, when a fund manager sells a security, a capital-gains tax is triggered,
which affects how profitable the individual is from the sale. It might have been more
advantageous for the individual to defer the capital gains liability.
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funds are a very safe way of investing money and SIP mutual funds are even better. These are
perfect solutions to most of us who cannot afford to make a large investment at one go. This
is a good way to save for your child's education, marriage or comfortable retirement for you
and your spouse. The lowest start up investment amount is 500 rupees per month which is
affordable by most people.
State Bank of India is one of the most trusted public sector banks in India. If you are a
beginner in investment then SBI SIP plans may be good option for you. Here are some SBI
SIP mutual funds available. Magnum Equity Fund - Minimum application of thousand rupees
is needed and SIP is Rs. 500/month for 12 months.
Magnum Tax Gain - Minimum application amount is Rs 500 and minimum SIP amount is
Rs.500/month for12 months Magnum Index Fund - Minimum SIP amount is Rs.500/month
for12 months Magnum Sector Funds Umbrella - Minimum investment amount is Rs. 2000
per sector and minimum SIP amount is Rs.500/month for12 months Magnum Global Fund Minimum SIP amount is Rs.500/month for12 months Magnum Midcap Fund - Minimum SIP
amount is Rs.500/month for12 months Magnum Mutlicap Fund - Minimum SIP amount is
Rs.500/month for12 months Blue Chip Fund - Minimum investment - Rs. 5000 and in
multiples of Rs. 1000.
SBI mutual funds, has launched equity-based Micro Systematic Investment Plan (Micro SIP)
aimed at getting in low income households in rural and semi-urban areas to benefit from the
long-term investment in Equity as an asset class. This plan will be called SBI Chota SIP.
For monthly investment as low as Rs. 100, investors from low-income group as well as
investors who intend to invest small portion of their savings would now be able to participate
in capital markets and be a part of India growth story.
Micro SIP facility will be available in respect of four equity diversified schemes of SBI
Mutual fund with effect from April 15, 2009. They are Magnum Balanced Fund, Magnum
Multiplier Plus Scheme 93, Magnum Sector Funds Umbrella-Contra fund, and SBI Blue Chip
fund.
The minimum investment amount will be Rs.100 and multiples of Rs.50/- thereof. The
minimum redemption amount will be Rs.500/-. Minimum tenure of SIP will be 5 years.
Page | 49
Systematic Investment Plan is the best option for retail investors to invest in Mutual Funds.
SBI Mutual Fund is one of the best performing mutual fund company in India. The investors
feel more comfortable in SBI SIP plan. You can make a SIP plans comparison and find the
best SBI SIP fund.
There are many reasons for the investors feeling that SBI SIP fund is the best systematic
investment plan in india. Most of the schemes under SBI Systematic investment plan has
been generating returns more consistently. If you check the returns for most of the SIP plans,
they are generating consistent returns for the past 6 months, 1 year and 3 years. This would
prove that the SBI schemes are performing well than the funds launched by the other
companies.
The minimum amount that has to be paid every month is Rs 500. Recently SBI has launched
another fund "SBI Chotta SIP Scheme" in which the minimum investment amount is Rs 100.
This scheme was introduced to encourage more retail participation. The low income people
will be more benefited from this scheme as this type of investment is similar to investing in a
recurring deposit and they can get the benefits of the stock markets.
SBI Chota SIP:
Recently SBI has launched micro systematic investment plan called "SBI Chota SIP", where
you can make a minimum payment of Rs 100 every month. This helps the low income people
in the rural areas to invest their money in the equity. There is also SIP auto debit facility for
this plan. If you have opted for this option, then your monthly installment will be withdrawn
automatically from your bank savings account each month. You can get the sip application
form from the various SBI Mutual fund offices available all over India or in the designated
state bank of india branches.
You have to fill the form and submit a PAN Card copy along with the application form. If
you apply for a sip auto debit facility, you should also fill a authorization form for the banks.
Once the application form is processed, you will get a statement indicating the number of
units allotted for you and also the price at which it is allotted. This statement you will get
every month when the monthly payments are sent from the bank and credited to the fund
account. The price at which the new units are allotted will change depending on the latest
NAV.
Page | 50
CHAPTER - 02
RESEARCH METHODOLOGY
Page | 51
RESEARCH METHODOLOGY
A Market Research was performed to find out the actuality from the investors about what
they think about the various Investment Options. It was done to find out the investment
patterns and behavior of the people i.e. how much they invest, what are the reasons behind
their investments, and where they invest.
Thus a questionnaire was devised to fetch the above mentioned information from the
investors. Most of the questions in the questionnaires were objective in nature which helped
the people to fill it with utmost ease. The sample size for the research was 100, which
included all the classes of people aged 18 and above. The questionnaire devised for the
market research is attached to the report as Annexure I.
Each question of the questionnaire is discussed on a separate page and the results are
explained with the help of graphs.
Data sources:
Research is totally based on primary data. Secondary data can be used only for the reference.
Research has been done by primary data collection, and primary data has been collected by
interacting with various people. The secondary data has been collected through various
journals and websites and some special publications of SBI .
Page | 52
Sampling:
Sampling procedure:
The sample is selected in a random way, irrespective of them being investor or not or
availing the services or not. It was collected through mails and personal visits to the
known persons, by formal and informal talks and through filling up the questionnaire
prepared. The data has been analyzed by using the measures of central tendencies like
mean, median, mode. The group has been selected and the analysis has been done on
the basis statistical tools available.
Sample size:
The sample size of my project is limited to 100 only. Out of which only 75 people
attempted all the questions. Other 25 not investing in MFs attempted only 2 questions.
Sample design:
Data has been presented with the help of bar graph, pie charts, line graphs etc.
Page | 53
Universe
Sample size
100 customer
Sample unit
Convenience sampling
Research design
Descriptive
Collection of data
Secondary data
Internet.
Duration
60 Days
Page | 54
CHAPTER 03
Objective & Scope of Study
Page | 55
Page | 56
CHAPTER 04
ANALYSIS & INTERPRETATION
OF THE DATA
Page | 57
Age Distribution
15%
Below 30
40%
30-40
45%
40 Above
FINDINGS
Out of 100 investors 15% investors are below the age of 30 years, 45% investors are between
30-40 years 40% investors are above the age of 40 years.
2. Investor Qualification
Graduation/PG
Under Graduate
Others
60
15
45
Page | 58
Qualification
25%
Graduation
Under Graduation
60%
15%
Other
FINDINGS:
Out of 100 investors 60% are graduate, 15% are under graduate & 15% are others.
3. Occupations of investor
Govt. Ser
Pvt. Ser
Business
Agriculture
Others
40
20
20
4
16
Occupation
40
35
30
25
20
40
Occupation
15
20
10
20
16
4
0
Govt.
Service
Pvt. Sec
Business
Agriculture
Other
Page | 59
FINDINGS:
Out of 100 investor 40 are in Govt. sector ,20 are in Pvt sector, 20 are in own business, 4
from agriculture ,16 investor are from various sectors
10
48
32
10
Monthly Salary
100%
80%
60%
40%
20%
0%
Monthly Salary
Below
100,000
10
100,000500,000
48
500,00010,00,000
32
Above
10,00,000
10
FINDINGS:
Out of 100 investor the income of 10 investor is below 100,000 , 48 investors income is
between 100,000-500,000 , 32 investor income is between 500,000-10,00,000 , & 10 investor
has their income greater than .
25
15
30
3
5
7
15
Page | 60
Kind Of Investment
Post Office/NSE
3%
Mutual Funds
30%
Real Estate
15%
Other
27%
Insurance
15%
Gold/Silver
7%
FD
25%
Share/Debentur
es
5%
FINDINGS:
Out of 100 investor 30% are investing in Mutual funds, 15% are investing in Insurance 25%
are investing in Fixed deposits, 7% are in investing in gold,15% are investing in real estate
,5% investing in share and debenture, & other are investing in other instruments.
15
Low Risk
20
High Return
60
Trust
Page | 61
15%
Liquidity
20%
Low Risk
High Return
Trust
60%
FINDINGS:
Out of 100 investor 60% are investing due to high return, 20% are invest due to low risk,
15% are investing due to liquidity,& 5% due to Trust in SBI.
70
Not Aware
30
Awareness
Aware
Not aware
30%
70%
Page | 62
FINDINGS:
Out of 100 investor 70% are aware towards mutual funds, 30% are not aware.
15
10
35
10
Peer Group
14%
Banks
Financial Advisor
22%
14%
50%
FINDINGS
Out of those who invest in mutual funds( i.e 70 investor), 50% are know about mutual funds
through banks, 14% are from financial advisor, 22% are know through advertisement, & 14%
from peer groups
Page | 63
30
Not Invested
45
Investment
40%
Invested
Not invested
60%
FINDINGS:
Out of 70 investor 60% are investing & 40% are not investing.
30
High Risk
15
High risk
Axis Title
Reason for
not
investment
Not
any0
in MF,
specific
reason
Page | 64
FINDINGS:
Out of those who dont invest in MF 30 investor are not aware of mutual funds,15 are not
investing due to high market risk
15
4
6
2
3
0
7%
UTI
50%
20%
HDFC
Reliance
Kotak
Other
13%
FINDINGS:
Out of 30 investor 50% investor are investing in SBI MF, 20% investor are investing in
HDFC, 13% are in UTI, 7% are in reliance,10% are in kota
Page | 65
6
7
2
Agent advice
47%
13%
13%
40%
FINDINGS:
Out of those who investing in SBI MF (i.e 15 investor) 40% are investing in sbi due to high
return,47% are investing due to the name of sbi & 13% are investing from agent advice.
8
4
3
Page | 66
Agent
advice
20%
Other
20%
Not aware
53%
FINDINGS:
Out of 15 investor 53% investor are not aware, 27% investor are investing due to less return
& 20% are other not specific reason.
14.to invest your money in asset management co. which AMC will you
prefer?
30
10
15
10
12
3
Page | 67
AMC Preference
40
30
20
10
0
AMC Preference
SBI MF
UTI
Reliance
HDFC
Kotak
ICICI
30
10
15
10
12
FINDINGS:
Out of 80 investor 30 investor are preference sbi AMC, 10 are prefer UTI, 15 are prefer
reliance, 10 are preference hdfc, 12 investor prefer Kodak & 3 are prefer ICICI.
15. Which Channel will you prefer while investing in Mutual Fund
Financial Advisor
Banks
AMC
15
40
15
Bank
21%
22%
AMC
57%
FINDINGS:
Out of 70 investor 57% investor are investing through banks, 21% are from AMC, & 22% are
from financial adviser.
Page | 68
30
40
Mode
One time investment
SIP
57%
43%
57%
FINDINGS:
Out of 70 investor 57% investor are investing in SIP, & 43% investor are investing one time.
15
20
35
Page | 69
Type of funds
Debt portfolio
Hybread fund
Equity portfolio
29%
50%
50%
21%
FINDINGS:
Out of 70 investor 50% investor are investing in debt& equity portfolio, 29% are investing in
hybrid fund, 21% investor are investing in dept portfolio
10
15
45
50
40
30
20
10
45
10
0
Divident payout
15
Divident reinvestment
Growth in NAV
Series1
FINDINGS:
Out of 70 investor 45 investor are like to receive return on growth in NAV, 15 investors like
to receive dividend re-investment, & 10 investors like to receive dividend payout.
Page | 70
CHAPTER 05
FINDINGS
Page | 71
FINDINGS
1. According to my survey in Dehradun maximum numbers of investors falls in
the age group of 30-40 years. The second most Investors were in the age group
of above 40 years and the least were in the age group of below 30 years.
2. According to my research in Dehradun most of the Investors were Graduate or
Post Graduate and below HSC there were very few in numbers.
3. In annual Income group, between 100,000-500,000 were more in numbers
invested in mutual fund, the second most were in the Income group between
Rs.5-10lakh and the least were in the group of below Rs. 1lakh.
4. Deposits, Only 60% Respondents invested in Mutual fund.
5. Mostly Respondents preferred High Return while investment, the second most
preferred Low Risk then liquidity and the least preferred Trust.
6. Among 100 Respondents only 60% had invested in Mutual Fund and 40% did
not have invested in Mutual fund.
7. Most of the investors did not invested in SBIMF due to unawareness of SBIMF,
the second most due to Agents advice and rest due to Less Return.
8. Out of 70 people, 43% preferred One Time Investment and 57% preferred SIP
out of both type of Mode of Investment.
9. The most preferred Portfolio was Equity, the second most was Balance (mixture
of both equity and debt), and the least preferred Portfolio was Debt portfolio.
10. Maximum Number of Investors Preferred Growth Option for returns, the second
most preferred Dividend Payout and then Dividend Reinvestment.
Page | 72
CHAPTER 06
CONCLUSION
Page | 73
CONCLUSION
The project that I undertook in my MUTUAL FUND provided me a good experience of
Investment Avenues like Mutual Funds, Insurance, Fixed Deposits and related activities. It
was a good experience for me as it helped me enhance my knowledge as well as gave a good
industry exposure for the period which would definitely prove to be very useful at the time of
placements. The complete project helped me gain knowledge and at the same time it was very
beneficial for the company.
The study performed using the historical data will help the company in two ways. Firstly, it
would let the company know which of the funds under the given category works well and
which does not. It can design certain strategies for the funds which are still underperforming
and are in their nascent stages. Secondly, it would help the organization, the financial
consultants and the marketing team to provide a strategy for the investors who can now easily
decide where to invest and where not to.
The Market Research performed gave an insight of the actual investors, their investment
behavior and their investment trends which would again help the company to make correct
strategies to attract more customers and provide them with what they are comfortable with.
Summing up, I am thankful to the Company and the Project that gave me an opportunity
where I could learn new things, enhance my knowledge, gain some industry exposure and at
the same time, do something that could be beneficial for the company and the investors.
Page | 74
a. To regulate entry and exit loads effectively as it creates a lot of confusion during
actual settlement of costs and bills.
b. To better operations management so as to reduce the time lag and improve customer
feedback.
c. To improve market penetration by targeting not only metros but mini-metros and
smaller towns more effectively.
d. To come up with more innovative schemes and products so as to expand over the
largest customer base as possible.
e. The most vital problem spotted is of ignorance. Investors should be made aware
of the benefits. Nobody will invest until and unless he is fully convinced.
Investors should be made to realize that ignorance is no longer bliss and what
they are losing by not investing.
f. Mutual funds offer a lot of benefit which no other single option could offer. But
most of the people are not even aware of what actually a mutual fund is? They
only see it as just another investment option. So the advisors should try to
change their mindsets. The advisors should target for more and more young
investors. Young investors as well as persons at the height of their career would
like to go for advisors due to lack of expertise and time.
g.
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.
h. Before making any investment Financial Advisors should first enquire about the
risk tolerance of the investors/customers, their need and time (how long they
want to invest). By considering these three things they can take the customers
into consideration.
i.
Younger people aged under 35 will be a key new customer group into the
future, so making greater efforts with younger customers who show some
interest in investing should pay off.
Page | 75
j.
Customers with graduate level education are easier to sell to and there is a large
untapped market there. To succeed however, advisors must provide sound
advice and high quality.
k.
Page | 76
BIBLIOGRAPHY
Consulting various reference points on the aforementioned topics became pertinent. A list of
such references is provided as follows:
References:
Page | 77
ANNEXURE
QUESTIONNAIRE
Page | 78
QUESTIONNAIRE
A study of preferences of the investors for investment in mutual funds.
1. Personal Details:
(a). Name:(b). Add: -
Phone:-
2. What kind of investments you have made so far? Pl tick (). All applicable.
Fixed Deposit
Insurance
Mutual Funds
Post Office/NSE
Share/Debenture
Gold/Silver
Real Estate
Page | 79
4. Are you aware about Mutual Funds and their operations? Pl tick ().
Yes
No
Aware
Not Aware
Yes
No
Invested
Not Invested
8. If yes, in which Mutual Fund you have invested? Pl. tick (). All applicable.
SBI Mutual Funds
UTI
HDFC
Reliance
Kotak
Other
Page | 80
10. If NOT invested in SBIMF, you do so because (Pl. tick () all applicable).
You are not aware of SBIMF.
SBIMF gives less return compared to the others.
Agent Advice
11. When you plan to invest your money in asset management co. which AMC will you
prefer?
12. Which Channel will you prefer while investing in Mutual Fund?
Financial Advisor
Banks
AMC
13. When you invest in Mutual Funds which mode of investment will you prefer? Pl. tick
().
One Time Investment
Systematic Investment Plan (SIP)
Page | 81
14. When you want to invest which type of funds would you choose?
Having only debt portfolio
Having debt & equity portfolio.
Only equity portfolio
15. How would you like to receive the returns every year? Pl. tick ().
Dividend payout
Dividend re-investment
Growth in NAV
Page | 82