EXECUTIVE SUMMERY

A Mutual fund is a scheme in which several people invest their money for a financial
clause. The collected money is invested in capital market & the money in which they
Earned, is divided based on the number of units which they hold.

The mutual fund industry was started in INDIA in small way with the UTI
creating what was effectively a small savings division within the RBI .this way was
fairly successful for the next 25 years as it gave investors good returns . Due to this
RBI gave a go ahead to public sector banks & financial institution to start mutual
funds in India and their success gave way to private sector mutual funds.

The advantage of mutual fund are portfolio diversification , liquidity ,

professional management , ease of companies , less risk , low transaction cost ,
transparency , safety .

The disadvantage of mutual fund are cost , index does better, fees , no control over
investments , profitability of high returns reduced significantly and professional tax
situation is not considered .

Mutual funds have to follow specific rules and regulation which are prescribed by
the SEBI. AMFI is the apex body of all the asset management companies and is
registered with the SEBI. Association of mutual fund India has brought down the
Indian mutual fund industry to professional and healthy market with ethical lines
enhancing.

There are many types of mutual funds in India. you can classify on the basis of By
structure (open ended schemes , close ended schemes & interval schemes ), By Nature
(equity fund , Debt fund , Balanced fund) , By investment objective ( growth schemes
, income schemes , balanced schemes , & money market schemes ),Other schemes (
Tax saving schemes , index schemes , sector specific ).

Mutual funds are very easy to buy and sell. You can buy mutual fund directly
from company or a broker. Before investing the mutual fund one has to look at all the
factors like company performance of the mutual fund from last few years, then returns
given by mutual funds from the last 5 years & the company’s net worth has to be
considered.

There are two types of mutual funds in India public sector mutual fund & private
sector mutual fund. In public sector mutual fund there are UTI mutual fund, state bank
of India mutual funds, bank of Baroda mutual fund & private sector mutual fund there
are Birla sun life mutual, HDFC mutual,ICICI prudential mutual fund etc.

The most trend of mutual fund is the aggressive expansion of mutual fund.Now
days there is lot of competition within the mutual fund as there are lot of private
sector & public sector mutual funds have entered the industry.

6
Returns comparison has been done between two mutual fund companies like HDFC
mutual fund & SBI mutual fund in this comparison we had taken both small &
midcap companies. In which markets they have invested in investors’ money and how
the returns for the 5 years have been done. It gives you an idea how you can and
where can invest.

7
 CHAPTER 1
INTRODUCTION

8
1.1 INTRODUCTION OF MUTUAL FUND
Mutual fund is the pool of the money, based on the trust who invests the savings of a
number of investors who shares a common financial goal, like the capital appreciation
and dividend earning. The money thus collect is then invested in capital market
instruments such as shares, debentures and foreign market. Investors invest money
and get the units as per the unit value which we called as NAV (net asset value).

Mutual fund is most suitable investments for a common man as its offers opportunity
to invest in diversified portfolio management, good research team, professionally
managed Indian stock market as well as the foreign market the main aim of the
manager is to taking the scrip that have under value and future will rising, then the
fund manager is sell out the stock. Fund manager concentration on the risk return
trade off where minimizes the risk and maximizes the return through the
diversification of the portfolio. The most common features of the mutual fund unit are
low cost.

Investments in securities are spread across a wide cross section of industries thus the
risk is reduced. Diversification reduces the risk because not all stocks many move in
the same direction in same proportion at same time. Mutual fund issues units to the
investors in accordance with quantum of money invested by them. Investor of mutual
fund is known as “unit holders”. The profits and losses are shared by the investors in
proportion to their investments.

DEFINITION OF MUTUAL FUND

“A mutual fund is nothing more than a collection of stocks and bonds. You can think
of mutual fund as a company that brings together a group of people and invest their
money in stocks, bonds and other securities. Each investors own shares, which
represent a portion of the holdings of mutual fund.”

“A mutual fund is a pool of money from numerous investors to save or make money
just like you. Investing in a mutual fund can be a lot easier than buying & selling
individual stocks & bonds on your own. Investors can sell their shares when they
want.

9
1.2 OBJECTIVE OF THE STUDY OF MUTUAL FUNDS
The objective of the study is analysis of the growth pattern of mutual funds in India
and to evaluate performance to different schemes floated by the most preferred mutual
fund in public and private sector.

The main objective of the project.

● To study about the mutual funds.

● To study about returns of the mutual funds.
● To compare the SBI & HDFC mutual funds schemes.

Many individuals own mutual funds today. Indeed mutual funds are very big. It
comprises of many investors financial assets , whether for retirement or taxable
savings purposes .to a large extent , mutual funds are investments vehicle for the
majority of household in India.

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ADVANTAGES OF MUTUAL FUND
⮚ Portfolio Diversification: -Investing in a diversified portfolio can be very
expensive the nice thing about mutual fund that they allow to anyone to hold a
diversified portfolio.

⮚ Liquidity: - Another nice advantage to mutual funds that the assets are
liquid. In financial language, liquidity basically refers to converting your
assets to cash with relative ease.

⮚ Professional management: -Mutual funds do not require a great deal of

time or knowledge from the investor because they are managed by the
professional managers.

⮚ Less risk: - Investors acquire a diversified portfolio of securities even with a

small investment mutual fund. The risk in diversified portfolio is lesser than
investing in 2 or 3 securities.

⮚ Low transaction cost: -Due to economies of scale mutual funds pay lesser
transaction cost. The benefits are passed on to investors.

⮚ Transparency:-Funds provide investors with updated information

pertaining to market &schemes. All material facts are disclosed to the
investors as required by regulator.

⮚ Safety: -Mutual fund industry is a part of well-regulated investments

environment where interest of the investors is protected by the regulators .all
funds are registered with SEBI & complete transparency is followed.

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DISADVANTAGES OF MUTUAL FUND
⮚ Cost: -The downside of mutual fund is that they have a high cost associated
with them in relation to the returns they produce. This is because investors not
only charged for the price of the fund but they will often face additional fees.

⮚ Fees: -The fees that are charged will depend on the type of mutual fund
purchased. If a fund is risk and more aggressive, the management fee will tend
to be higher. In addition, the investors will also be required to pay taxes,
transaction fees as well as other cost related to maintaining the fund.

⮚ No control over investments: -You have absolutely no control over what

the fund manager des with you money .you can’t advise him on how your
money is to be invested. You only sit back and hope for the best.

⮚ Portfolio of high returns reduced significantly: - A mutual funds

contains a diversified basket of securities. If a single security outperforms by
significant margin the impact will be limited.

⮚ Personal tax situation is not considered: - When you invest in a

mutual fund, your money is pooled together with others and your personal tax
situation is not considered while making investment decisions. The most you
can do is to choose between growth fund.

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1.3 HISTORY OF MUTUAL FUND
The Mutual Fund was born from a financial crisis that staggered Europe in the early
1770s.

The British East India Company had borrowed heavily during the preceding boom
years to support its ambitious colonial interests, particularly in North America where
unrest would culminate in revolution in a few short years.

As expenses increased and revenue from colonial adventures fell, the East India
Company sought a bailout in 1772 from the already-stressed British treasury. It was
the “original too big to fail corporation” and the repercussions were felt across the
continent and indeed around the world.

At the same time, the Dutch were facing their own challenges, expanding and
exploring like the British and taking “copy-cat risks” in a pattern that has drawn
parallels to the banking crisis of 2008.

The first mutual fund

Against this backdrop, a Dutch merchant, Adriaan van Ketwich, had the foresight to
pool money from a number of subscribers to form an investment trust – the world’s
first mutual fund – in 1774. The financial risk to the mainly small investors was
spread by diversifying across a number of European countries and the American
colonies, where investments were backed by income from plantations, an early
version of today’s mortgage-backed securities.

Subscription to the closed-end fund, which Van Ketwich called “Eendragt Maakt
Magt” (“unity creates strength”), was available to the public until all 2,000 units were
purchased. After that, participation in the fund was available only by buying shares
from existing shareholders in the open market. The fund’s prospectus required an
annual accounting, which investors could view if they requested. Two subsequent
funds set up in the Netherlands increased the emphasis on diversification to reduce
risk, escalating their appeal to even smaller investors with minimal capital.

Van Ketwich’s fund survived until 1824 but the vehicle he created is still a hallmark
of personal investing more than two centuries later with an estimated $27.86 trillion
US in global assets in July 2013. In Canada alone, mutual funds represent $1.43
trillion.

The early mutual funds spread were of the closed-end variety, issuing a fixed number
of shares. They spread from the Netherlands to England and France before heading to
the U.S. in the 1890s.

The first modern-day mutual fund, Massachusetts Investors Trust, was created on
March 21, 1924. It was the first mutual fund with an open-end capitalization.,

13
Unit trust of India was the first mutual fund setup in India in the year 1963. In early
1990s govt allowed public sector banks and institutions to set up mutual funds. In the
year 1992, securities and exchange board of India (SEBI) act was passed. The
objectives of SEBI are to protect the interest of investors in securities and to promote
the development and to regulate the securities market.

As far mutual funds are concerned .SEBI formulates policies and regulates the
mutual funds to protect the interest of the investors. SEBI notified regulations for
the mutual funds in 1993. Thereafter, mutual funds sponsored by private sector
entities were allowed to enter the capital market. The regulation was fully revised
in 1996 and has been amended thereafter from time to time.

There are 4 phases in which mutual funds have evolved.

FIRST PHASE -1964-87

Unit trust of India (UTI) was established on 1963 by an act of parlmennt. It was
set up by the reserve bank of India and functioned under the regulatory and
administrative control of reserve bank of India. In UTI was delinked from RBI
and industrial development bank of India (IDBI) took over the regulatory and
administrative control in place of RBI.

SECONDPHASE -1987-1993(Entry of public sector funds)

1987 market the entry of non UTI public sector mutual fund setup by public sector
banks and life insurance corporation of India and general insurance corporation of
India .SBI mutual fund was the first non UTI mutual fund established in June
1987 followed by can bank mutual fund .LIC established in mutual fund in June
1989 while GIC had setup its mutual fund in December 1990.

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THIRD PHASE -1993-2003(entry of private sector funds)
With the entry of private sector funds in 1993, a new era started in the Indian mutual
fund industry, giving the Indian investors a wider choice if fund families. Also 1993
was the year in which the first mutual fund regulations came into being, under which
all mutual funds expect UTI were to be registered and governed.

FOURTH PHASE – Since FEB 2003

In February 2003, following the repeal of the unit trust of India act 1963 UTI was
bifurcated into two separate entities. once is specified undertaking of the unit trust of
the India with assets under management of Rs.29835 cores as at the end of 2003
representing broadly , the assets of US 64 scheme. Assured returns and certain other
schemes. The specified undertaking of unit trust of India, functioning under and
administrator and under the rules frame by government of India and does not came
under the purview of the mutual fund regulations. The second is the UTI mutual fund
Ltd, sponsored by the SBI,PNB, BOB & LIC .It is register with the SEBI and the
functions under the mutual fund regulations. With the bifurcation of the erstwhile UTI
which had in March 2000 more than Rs, 76000cr of assets under management and
with the setting up of a UTI mutual fund. Conforming to the SEBI mutual fund
regulations, and with the recent mergers taking place among different private sector
funds, the mutual fund industry has entered its current phase of consolidation and
grows.

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1.4 ASSOCIATION OF MUTUAL FUNDS IN INDIA
(AMFI)
With the increase in mutual funds players in India, a need for mutual fund association
in India was generated to function as non-profit organization. Association of mutual
fund in India (AMFI) was incorporated on 22nd august 1995.

AMFI is an apex body of all the asset management companies (AMC) which has been
registered with SEBI. Till date all the AMCs are that have a launched mutual fund
schemes are members. it functions under the supervision and guidelines of its board of
director .

Association of mutual fund India has the brought down the Indian mutual fund
industry to a professional and healthy market with ethical lines enhancing.

THE OBJECTIVE OF ASSOCIATION OF MUTUAL

FUND IN INDIA

● The mutual fund association of India maintains high professional and ethical
standards in all areas of operation of the industry.

● To interact with the securities and exchange board of India (SEBI) and to
represent to SEBI on all matters concerning the mutual fund industry.

● To represent to the government, reserve bank of India and other bodies on all
matters relating to the mutual fund industry.

● To undertake nationwide investor awareness programs so as to promote proper

understanding of the concept and working of mutual funds.

● To regulate conduct of distributors including disciplinary actions for violation

of code of conduct.

● To dessisimate information on mutual funds industry and to undertake studies

and research directly and in association with other bodies.

● To promote interest of investor / unit holder.

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1.5 TYPES OF MUTUAL FUNDS SCHEMES IN INDIA

1) BY STRUCTURE

⮚ Open Ended Schemes

⮚ Close Ended Schemes
⮚ Interval Schemes

2) BY NATURE

⮚ Equity Fund
⮚ Debt Fund
⮚ Balanced Fund

3) BY INVESTMENT OBJECTIVE

⮚ Growth Fund
⮚ Income Fund
⮚ Balanced Fund
⮚ Money Market Scheme

4) OTHER

⮚ Tax
⮚ Index Schemes
⮚ Sector Specific

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A) BY STRUCTURE

⮚ Open -Ended –This scheme allow investors to buy or sell units

at any point in time. This thus not have fix maturity date investors
can conveniently buy and sell unit at net asset value related price

⮚ Close Ended–A closed ended fund has fix number of share

outstanding and operates for fixed duration.The fund would open
for subscription only during or specific period and there even
balance of buyer and seller , so someone would have to be selling
in order for you to be able to buy it.

⮚ Interval– Interval schemes combine the future of open ended and

close ended funds. The unit may be traded on the stock exchange
or may be open for sale redemption during predetermine interval at
NAV related price. Fixed maturity plan, FMPS are example of
these types of schemes.

B) BY NATURE

⮚ Equity fund– Equities are popular mutual fund category among

retail investors they invest a fund into equity holding. The structure
of the fund may vary different for different schemes and the fund
manager outlook on different stocks. this fund are sub classified
depending on investment objectives such as
a) Diversified equity fund
b) Midcap fund
c) Sector specific fund
d) Tax savings fund (ELLS)

⮚ Debt fund –Debt fund are mutual fund that invest in fixed
income securities like bonds and treasury bills. Gilt fund, monthly
income fund, short term plans, liquidity fund, fixed maturity plan
are some of the investments option in debt funds. Apart from these
categories, debt fund include various investing short term, medium
term or long term bonds.

⮚ Balanced fund–This schemes allow investors to enjoy growth

and income at regular interval. Funds are invested in both equities
and fixed income securities. The proportion is predetermined and
disclosed in the schemes related offer document. These are ideal
for the cautiously aggressive investors.

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C) BY INVESTMENT OBJECTIVES –

⮚ Growth schemes –Growth schemes are also known as equity

schemes. The aim of these schemes is to provide appreciation over
medium to long term. These schemes normally invest major part of
funds in equities and look for capital appreciation.

⮚ Income schemes–Income schemes are also known as debt

schemes. The aim of the schemes it provides regular steady income
to the investors. These schemes invest fixed income securities such
as bond and cooperate debenture. In such schemes capital
appreciation may be limited.

⮚ Balanced schemes- This schemes allow investors to enjoy

growth and income at regular interval. Funds reinvested in both
equities and fixed income securities; the proportion is
pre-determined and disclosed in the scheme related offer document.
These are ideal for the cautiously aggressive investors

⮚ Money market schemes –This is ideal for investor looking to

utilize their surplus fund in the short term instruments while
awaiting better option. This scheme invest in short term
instruments such as treasury bills certificates of deposits,
commercial paper and inter- company call money and seek to
provide reasonable return for the investor.

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 D) Other schemes

⮚ Tax savings schemes –As the name suggest, these schemes

offer tax benefits to its tax investors these fund are invested in
equities there by long term growth opportunities. Tax savings
mutual funds have a 3 year lock in period.

⮚ Index schemes –Index schemes is widely popular concept in the

west. This follows a passive investments strategy where your
investments replicate the movements of benchmarks indices like
nifty, Sensex etc.

⮚ Sector specific schemes – Sector fund are invested in specific

like infrastructure IT , pharmaceuticals etc. or segments capital
market like large caps , midcaps etc. this schemes provides a
relative high risk high return opportunity with in the equity space .

Comparison between FD, Bonds & Mutual funds – features

Characteristics FD ‘S Bonds Mutual funds

Accessibility Low Low High

Tenor Fixed (medium) Fixed (long) No lock –in

Min.investments Rs.1000 5000 5000

Tax benefits None 80L, 88 Dividend tax free

Liquidity Low Very low Very high

Convenience Medium Tedious Very high

Transparency None None Very high

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MUTUAL FUND IN INDIA
The mutual fund industry in India begins in 1963 with foundation of the unit trust of
India (UTI). As an initiative of govt. of India & Reserve Bank of India. Much later in
1987, SBI mutual fund becomes the 1st non - UTI mutual fund in India.

The year 1963 heralded a new era of mutual fund in India. His was smart by the
private company in the sector. After the Security and Exchange Board of India
(SEBI). Act was passed in 1992; the SEBI mutual fund regulation came into being in
1996. Since then mutual fund company to have continue to grow exponentially with
foreign institution setting shop in INDIA. Through joint venture and acquisition

As the industry expanded a nonprofit organization the association of mutual fund

in India (AMFI). Was established in 1995. Its objective is to promote healthy and
ethical marketing practices in the Indian mutual fund industries. SEBI has made
AMFI certification mandatory for all those engage in selling and marketing mutual
fund product.

MAJOR MUTUAL FUND COMPANIES IN INDIA –

Public Sector Mutual Funds–
● Bank of Baroda mutual fund
● State bank of India of mutual fund
● LIC mutual fund
● UTI mutual fund
● Canara bank mutual fund

Private sector Mutual Funds –

● ABM AMRO mutual fund
● Birla sun life mutual fund
● HDFC mutual fund
● TATA mutual fund
● ICICI prudential mutual fund
● Reliance mutual fund
● Standard charted mutual fund
● DSP Blackrock mutual fund
● HSBC mutual fund
● Morgan Stanley mutual fund

This above other various mutual funds in INDIA which has given good returns

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1.6) REGULATORY BODY OF MUTUAL FUNDS IN
INDIA
As far as mutual fund as concerned, SEBI (Securities & Exchange Board of India)
formulates policy and regulation the mutual fund protects the interests of the
investors.

In January 1993 SEBI prescribed registration of mutual fund integrity in business

transaction and financial soundness and while granting permission. This would curb
excessive growth of mutual fund and protect investor interest by registering only the
sound promoters with proven track record and financial strength.

The offer document of schemes launch by mutual fund and schemes particulars are
required to be vetted by SEBI. A standard format of mutual fund prospector is being
formulated.

Mutual fund has been required to adhere to code of advertisement.

SEBI has introduced a chance in the security control and regulation act governing the
mutual fund. Mutual funds have been in the market for at least years allowed to assure
maximum returns of 12% only, for one year.

The current SEBI guidelines on mutual fund prescribed a minimum startup of 50 Cr

for an open ended scheme, and 20Cr for closed ended scheme, failing which
application money has to be refunded. AMFI have appeal to regulatory authority of
INDIA for scrapping the minimum requirement.

Also 50% of the directors of a AMC must be independent .all mutual fund are
required to be registered with SEBI before they launch any scheme.

The transparent and well understood declaration or net asset value (NAV) of mutual
fund scheme is an important issue in providing investor with information as to
performance of the fund .SEBI has warned some mutual fund are earlier of unhealthy
market .

Trusty shall immediately report to the board of any special development in mutual
Fund.

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NET ASSET VALUE (NAV)
The net asset value (NAV) of mutual fund is the price at which the unit of mutual fund
are bought and sold. It is market value of the fund after deducted its liability. the value
of all units of mutual fund portfolio are calculated on daily basis , the all expenses are
subtracted the reason is then the total number of unit the resultant value is the NAV
.NAV is also sometime referred to as net book value or book value.

NAV indicate the market value of the unit of the fund. So it help in investor keep track
of the performance of the mutual fund. An investor can calculate actual increase in the
value of their investment by determining the percentage increase in the mutual fund.
NAV, therefore give accurate information about the performance of the mutual fund.

CALCULATION OF NAV –
Mutual fund asset usually fall under two categories – securities &cash. Securities,
here, include both bonds &stock. Therefore the total asset value of a fund will include
in stock, cash and bonds at market value dividend and interest accrued and liquid
asset also including in total asset.

The formula for calculating NAV;

NAV of a mutual fund = (Asset of the fund – Liabilities of the fund)

Number of outstanding units of the fund

The mutual fund itself and/or certain accounting firms calculate the NAV of a mutual
fund. Since, mutual funds depend on stock market, they are usually declared after the
closing hours of the exchange.

23
 CHAPTER 2

RESEARCH METHODOLOGY

24
RESEARCH-:
Research is an ‘organized & systematic’ approach of finding solutions to problem or
finding answers to questions. Research is said to be systematic as it involves a definite
set of steps in order to arrive at some conclusion. Also, it is said to be structured, as it
is a planned procedure which is focused having a well-defined scope & method.
Research is designed & meant to find answers be it simple or hypothesis. It is
believed to be successful only when solutions are sought. Questions are the most
important part of a research & research would be incomplete without it, therefore it
stands out as the chief component of research. This is so, because the dynamics of
research invariably involves the process of focusing on relevant useful & important
questions. The questionnaire for a research may originate from management dilemma.

The sum up, research may be termed as systematic, controlled, empirical &
critical investigation of hypothetical propagation

“Research is the systematic & objective analysis and recording of controlled

observations that may lead to development of generalization principles or theories
resulting in prediction and perhaps ultimate control of events.”-John w Best

“Research is a systematic controlled, commercial & critical investigation of

hypothetical propositions about the presumed relations among natural phenomenon.” -
Ker linger

Research Methods-:

● Survey method
● Questionnaire method
● Interview method
● Observation method
● Experimentation method

25
Research Methodology
* Research design

a)Problem Defining-: In a comparative market there are multiple mutual funds

working in the market it is necessary to know mutual fund as the performance of the
mutual fund decides the future of Mutual Fund Company. In my study I have to
compare the returns of the two mutual funds.

b)Types of research-:The research in qualitative and analytical in nature

c)Data collection -:

1)Sources of data

a) Primary data – Questionnaire as primary source for collecting data

for my study.

b) Secondary data– data from various mutual fund books, & from
various mutual fund websites.

2) Sample-: It represent the Nasik population. It is process of choosing samples

of Nasik (Nashik).

3) Sample size-: 50 candidates from SBI & HDFC mutual fund.

4) Sample technique- : Questionnaire sampling is something is sent to the

candidates who want to invest in mutual fund. By questionnaire you can
understand people taste & preferences so it is easy to convince.

5) Data interpretation -: Data interpretation is that in which we analyses the

whole collected data and try to give it in simple words that is understandable

26
 CHAPTER 3

DATA INTERPREATION & ANALYSIS

27
3.1 SBI Mutual Fund

*GENERAL INFORMTION-:

● Name of Organization: SBI MUTUAL FUND

● Address : Navekar Heights, New Pandit colony Nasik-422002
● E-mail Id: http://www.sbimf.com/

The SBI mutual fund private ltd is joint venture between “The state bank of India”
and social general asset management. The fund manages over Rs.42100cr of asset and
has diverse profile of investor actively parking their investment across 38 activities
schemes.

At SBI mutual fund we know that every investors as unique financial goals and
requires a different set of product. Which is why we have wide range of scheme that
fulfills every kind of investor’s requirement? Each scheme is managed by devising
different strategy which is reflective of the investors profit and carries with different
risk and rewards.

Vision– “To be most preferred and the largest fund house for all asset classes , with a
consistent track record excellent return and best standard in customers service ,
product , innovation ,technology and HR practices”

SBI fund management has merge as one of the largest player in INDIA
.advising various financial institution, pension fund, & local and international asset
management companies.

SBI funds make one of the largest investment management firms in India
managing investment mandates of over 5.4milllion investors.

28
Equity funds & schemes
The primary objective of the equity asset is to provide capital growth appreciation by
investing in the equity & equity related instruments companies over medium and long
term.

There are ranges of schemes available which fulfill every kind of investors
requirements each scheme provides different strategy which is reflective of the
investors profile and carries with it risks & rewards.

1. Equity schemes
2. Debt / income schemes
3. Liquid scheme
4. Hybrid scheme
5. Fixed maturity plans
6. Exchange traded schemes

Equity / growth funds

1. SBI magnum equity fund
2. SBI magnum global fund
3. SBI blue chip fund
4. SBI magnum multicap fund
5. SBI magnum multiplier fund
6. SBI small and midcap fund
7. SBI magnum midcap fund
8. SBI emerging businesses fund

Sectorial fund
1. SBI contra fund
2. SBI FMCG fund
3. SBI IT fund
4. SBI pharma fund
5. SBI banking & financial services fund.

Thematic fund
1. SBI magnum COMMA fund.
2. SBI infrastructure fund
3. SBI plus fund

29
ELESS Fund
1. SBI magnum tax gain schemes 1993
2. SBI tax advantage fund - series 1
3. SBI tax advantage fund – series2
4. SBI tax advantage fund –series3

Index fund
1. SBI index nifty fund

MARKET NEUTRAL STRATEGY

1) SBI arbitrage opportunities fund

But we will be only comparing the funds in SBI small and midcap funds.

SBI small and midcap funds is an open ended equity scheme and primarily invests
in small and midcap equity related securities of the companies in the small and
midcap segments . The portfolio will comprise of maximum of 30 stocks.

This product is suitable to the investors who are seeking

● Long term capital

● Investments in diversified portfolio of predominantly in equity and equity related
securities of small and midcap companies.
● Investors should consult their financial advisers if in doubt about whether the
product is suitable for them.

OBJECTIVES OF THE SCHEMES

The scheme seeks to the generate income and long term capital appreciation by
investing in a diversified portfolio of predominantly in equity and equity related
securities of small & midcap companies . There can be no assurance in the
investments objectives will be realized.

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ASSET ALLOCATION

Normal asset allocation

instruments Assets Risks profile
minimum maximum
Equity and equity 90% 100% High
related instruments

Debt and money 0% 10% Low to medium

market securities

● Investment in asset backed securities will not exceed 10% of the net assets of
the scheme. The scheme will not invest in foreign securities debt

Date of inception 09/09/2009

Minimum application Rs.5000/-and in multiples of Rs.1/- there after
Entry load N.A.

For exit within 1 year from the date of allotment -1%

For exit after 1 year from the date of allotment –nil
Exit load
Monthly –minimum Rs.1000 & in multiples of Rs.1
Thereafter for minimum 6 months or minimum Rs 500& in
multiples of Rs1 thereafter for minimum on year.

SIP Quarterly – minimum Rs. 1500 & in multiples of Rs1 thereafter

for minimum one year.

COMPARING RETURNES OF SBI MUTUAL FUND 5 YEARS

31
Investment info

Investment objective-:the schemes seeks to generate income and long term

capital appreciation by investing in a diversified portfolio of predominantly equity
and equity related securities of companies identified is a industry leaders . However,
there can be no assurance that the investment objectives of the schemes will be
realized and the scheme does not assure or graduate any returns.

Fund type Entry load Average asset size

Open ended Nil 753.50

Investment plan Exit load Minimum

investment (Rs.)

Growth If redeemed bet , 0year ;exit load is 1 % Rs.5000/-

Launch date Fund manager Last dividend

09/09/2009 Rama iyer srinivasan 0.00

Benchmark Email / website Bonus

S&P BSE SMALL [email protected]/www.sbimf.com

CAP

AMC name

SBI funds
management pvt. ltd.

As per the above chart you can see SBI mutual fund is open ended. Its average asset
size is 753.50 cr. SBI introduced small and midcap growth fund in 2009. Since then it
is given good returns.

PERFORMANCE OF SBI MUTUAL FUND

32
Fund name AUM 1 3 6 1 year 3 year 5 year Since
(Rs.cr.) month month month incepti
on
SBI small & midcap 812.46 2.95 10.34 17.67 17.11 42.54 27.63 20.14
fund
DSP Blackrock
natural resources & 71.96 -0.49 18.05 33.13 43.62 28.05 9.83 10.87
new energy fund

Sunderam rural India 385.95 2.56 13.27 33.39 33.86 31.37 17.96 12.59
fund
Birla sun life 60.17 2.70 15.55 32.35 29.79 _ _ 14.14
emerging leaders
fund – series 5
SBI magnum 223.23 1.51 13.89 30.28 29.60 20.26 5.14 10.27
COMMA fund
Birla sun life 292.93 2.87 16.53 30.22 28.93 _ _ 16.31
emerging leaders
fund - series 3

PORTFOLIO HOLINGS OF SBI MUTUAL FUND

Company name Asset type Percentage allocation

33
Solar industries India ltd Equity 8.37 %
CBLO (CCIL) Others 7.51 %
TV Today network ltd Equity 7.20 %
Atul ltd Equity 6.85 %
Orient refractories ltd Equity 6.57 %
Gabriel India ltd Equity 6.40 %
Nesco ltd Equity 5.74 %
West life development ltd Equity 4.90 %
Radico khaiten ltd Equity 4.50 %
Graphite India ltd Equity 4.05 %
Detailed portfolio Equity
KCP ltd Equity 4.00 %
Manpasand beverages ltd Equity 3.99 %
Relaxo footwear Equity 3.86 %
Balkkrishna industries Equity 3.67 %
Hawkins cooker ltd Equity 3.32 %
Elgi equipment’s ltd Equity 3.22 %
Green plyinds ltd Equity 2.90 %
RBL bank Equity 2.84 %
Thangamayil jewelry ltd Equity 2.49 %
UFO movies India ltd Equity 2.29 %
Power mech projects Equity 2.10 %
Term deposit Debt 0.56 %
Avanti feeds .ltd Equity 0.52 %
D-link ltd Equity 0.50 %
Cash Others 0.01 %

ASSET UNDER MARKET MOVEMENT

ASSETS ALLOCATION DONE IN VARIOUS COMPANIES

34
TOP SECTORS HOLDINGS & PORTFILIO
Sector name Percentage

Consumer goods 21.57 %

Chemicals 17.45 %

Industrial manufacturing 13.85 %

Services 10.64 %

Automobile 10.07 %

MARKET CAPITALIZATION

From the above table you can see that market capitalization of small cap fund is
45.66% more as compared to midcap cap 44.03%

SBI MUTUAL FUND NAV

35
The mutual fund NAV denotes a price at which units of mutual funds can be bought or
sold. The market value of a fund’s holdings, less expenses is the net asset value. Per
unit NAV is calculated by dividing the net asset value of the mutual fund schemes by
the number of units outstanding on the valuation date.

PERFORMANCE ANALYISIS OF SBI MUTUAL FUND

Performance analysis

Fund 3month 6month 1 year 3year 5 year Since

performance (%) (%) (%) (%) (%)
inception
(%)
SBI small & mid 12.04 20.02 20.03 43..25 28.29 20.41
cap fund –growth
S&P BSE Small 13.09 23.59 19.81 33.06 12.69 22.54
cap
Category average 12.06 21.20 17.11 25.96 17.03 14.03

PERFORMANCE OF THE FUND OF LAST 5 YEARS

Fund performance YTD% 2016 2015 2014 2013 2012
(%) (%) (%) (%) (%)

SBI small & midcap 6.72 19.92 110.45 6.75 31.91 -24.31
fund-growth
S&P BSE Small cap 9.43 5.45 66.74 -12.1 32.97 -42.61

Category average 3.3 52.78 3.56 32.72 -23.83

All returns are compounded annualized for a period greater than 1 year, an absolute
for a period of 1 year or less. Performance and SIP returns as of 21/09/2017 .statistical
ratio are for a period of 3 years as of 21/09/2017 .SIP purchases are assume to be on
the 1st of every month. Expenses ratio is as disclosed monthly frequency.

36
 3.2 HDFC MUTUAL FUND
*GENERAL INFORMATION

● Name of Organization: HDFC MUTUAL FUND

● Address: G-2 Suyojit Heights Pandit colony Nasik.
● E-mail Id : http://www.hdfcfund.com/

HDFC mutual fund has been constituted as a trust in accordance with the provision of
the Indian trusts act, 1882 as per the terms of the trust deed dated June 8,2000 with
housing development finance corporation limited (HDFC) and standard life
investments limited as the sponsors / settlers and HDFC trustee . The trust deed has
been registered under the Indian registration act 1908.

HDFC ASSET MANAGEMENT COMPANY LIMITED (AMC)

HDFC asset management company ltd was incorporated under the company’s act
1956 on December 10, 199, and was approved to act as a management company for
the HDFC mutual fund by SEBI vides its letter dated July 3, 2000.

In terms of the investments management agreement the trustee has appointed HDFC
asset Management Company limited to manage the mutual fund as per the terms of
the investments management agreement the AMC will conduct the operations of the
mutual fund and manage asset of the schemes, including the schemes launched from
time to time.

FUNDS MANAGED BY HDFC MUTUAL FUND

⮚ Equity fund
⮚ Balanced fund
⮚ Income fund

37
ACHIEVEMENT OF HDFC
⮚ HDFC asset Management Company is the first AMC in India to have
been assigned the CRISIL fund house -1 rating.

⮚ This is the highest fund governance and process quality rating which
reflect the highest governance levels and fund managed practices at
HDFC AMC.

⮚ It is only fund house to have been assigned these ratings for 2 years in
succession.

38
INVESTMENT OBJECTIVES
To provide long term capital appreciation by investing predominantly in small cap and
midcap companies.

Current expense ratio 2.50%

on the first 100 cr daily net assets

(Effective date 28th June 2014)

On the next 300 cr daily net assets 2.25%

On the next 300 cr daily net assets 2.00%

Plan plate NAV NAV

Date date

Direct dividend plan 12-sep-17 22.578

Direct growth plan 12-sep-17 31.231

Dividend plan 12-sep-17 21.617

Growth plan 12-sep-17 30.179

PRODUCT LABELING
This product is suitable for investors who are seeking;

⮚ The product is suitable for investors who are seeking

⮚ Investment predominantly in equity related instruments of small –cap and

midcap companies.

⮚ Investors should consult their financial advisers if in doubt about whether

product is suitable for them.

39
 COMPARING RETURNES OF HDFC MUTUL FUND

Investment objectives :The investment objectives of the scheme is to be generate

long term capital growth from a actively managed portfolio of equity and equity
related securities including equity derivatives.

Fund type Entry load Average asset size

Open ended Nil 859.76%

Investment fund Exit load Minimum investment

Growth If redeemed bet 0 to 1 Rs.5000/-

year; exit load is 1 %.

Launch date Fund manager Last dividend

03-04-2008 Chirag Setalvad 0.00

Benchmark E-mail / website Bonus

S&P BSE 200 [email protected]

/www.hdfcfund.com

AMC NAME

SBI funds management

private limited.

As per the above chart you can see SBI mutual fund is open ended .its average asset
size is 753.50 cr .SBI introduced small and midcap growth fund in 2009 .since then it
has given good returns.

PERFORMANCE OF THE MUTUAL FUND

Full name AUM 1mnth 3mnth 6mnth 1year 3year 5 Since
Rs.(Cr) year inception

HDFC small & 939.04 2.32 12.39 23.69 20.79 25.80 17.76 14.13
midcap fund

DSP Blackrock 71.96 -0.49 18.05 33.13 43.62 28.05 9.83 10.87
natural resources

Sundaram rural India 385.95 2.56 13.27 33.39 33.85 31.37 17.96 12.59
fund

40
 Birla sun life 60.17 2.70 15.55 32.35 29.39 - - 14.14
emerging leaders
fund series 5

SBI magnum comma 223.22 223.22 1.51 13.89 30.28 20.26 5.14 10.27
fund series 3

Birla sun life 292.93 2.87 16.53 30.22 28.92 - - 16.31

emerging leaders
fund series 3

PORTFOLIO HOLDINGS OF HDFC MUTUAL FUND

41
 Company name Asset type Percentage allocation

Aurobindo pharm ltd Equity 4.03%

Yes bank ltd Equity 3.64%

Bajaj finance ltd Equity 3.64%

Arti industry ltd Equity 3.13%

Carborundum universal ltd Equity 2.82%

Divis laboratories ltd Equity 2.73%

Oriental carbon & Equity 2.63%

chemicals ltd

Torrent pharmaceuticals ltd Equity 2.51%

Current asset Others 2.42%

City union bank ltd Equity 2.38%

Detailed portfolio

LIC housing finance ltd Equity 2.38%

CD products India ltd Equity 2.32%

Sarla performance fibers Equity 2.22%

ltd

Shriram transport ltd Equity 2.21%

Green ply ind. Ltd Equity 2.18%

Cadila health care Equity 2.13%

Century ply board ltd Equity 2.08%

ASSET UNDER MANAGEMENT MOVEMENT

42
The below graph shows the variation in the asset under the management (In cr’s)

THE ASSET ALLOCATION OF MUTUAL FUND

The below diagram shoes how much equity has contributed to mutual fund

43
TOP SECTOR HOLDINGS AND PERCENTAGE ALLOCATION

Sector name Percentage allocation

Financial services 20.08%

Pharma 13.28%
Consumer goods 11.02%
Industrial manufacturing 9.85%
construction 8.74%

MARKET CAPITALIZATION

Market cap (%)

Form the above table you can see that market capitalization of midcap is 46.24%
more as compare to large cap 26.81% and small cap 22.8%.

44
HDFC MUTUAL FUND NAV

The mutual fund NAV denotes a price at which units of the mutual fund can be bought
or sold. The market value of fund holdings less expenses is the net asset value. Per
unit NAV is calculated by dividing the net asset value of the mutual fund schemes by
the number of units outstanding on the valuation date.

The below NAV calculation shows the return of HDFC mutual fund with the help of
graph.

HDFC small & midcap fund growth

45
PERFORMANCE ANALYSIS OF HDFC MUTUALFUND

Fund performance 3 month 6months 1 year 3year 5 year Since

(%) (%) (%) (%) (%) inception
(%)
HDFC small & midcap 12.39 23.69 20.79 25.80 17.76 14.13
fund-growth
S&P BSE 200 8.49 16.36 12.05 16.61 12.20 13.94

Category average 10.59 20.29 14.07 25.53 16.08 13.64

Funds’ performance as per different year

Fund performance YTD 2016 2015 2014 2013 2012

(%) (%) (%) (%) (%) (%)

HDFC small & midcap 12.32 5.78 51.64 6.46 31.57 -26.21
fund-growth

S&P BSE 200 11.54 -1.62 35.39 3.45 30.98 -26.95

Category average 3.3 52.78 3.56 32.73 -23.83

All returns are compounded annualized for a period greater than 1 year and absolute
for a period of 1 year or less .performance and SIP returns as on 21 / 09/2017.
Statistical ratio is for a period of 3 years as of 21 / 09/2017.SIP purchases are assumed
to be on the 1st of every month. Expenses ratio is as disclosed at monthly frequency.

DATA ANALYISIS-:

PERFORMANCE ANALYISIS OF SBI MUTUAL FUND

46
Performance analysis

Fund 3month 6month 1 year 3year 5 year Since

performance (%) (%) (%) (%) (%) inception
(%)
SBI small & mid 12.04 20.02 20.03 43..25 28.29 20.41
cap fund –growth
S&P BSE Small 13.09 23.59 19.81 33.06 12.69 22.54
cap
Category average 12.06 21.20 17.11 25.96 17.03 14.03

PERFORMANCE ANALYSIS OF HDFC MUTUALFUND

Performance analysis

Fund performance 3 month 6months 1 year 3year 5 year Since

(%) (%) (%) (%) (%) inception
(%)
HDFC small & midcap 12.39 23.69 20.79 25.80 17.76 14.13
fund-growth
S&P BSE 200 8.49 16.36 12.05 16.61 12.20 13.94

Category average 10.59 20.29 14.07 25.53 16.08 13.64

⮚ Since inception SBI mutual fund has given good returns of 20.41% whereas
HDFC mutual fund has given a return of only 14.13%.

⮚ SBI Mutual Fund gives 6.28% extra returns as compare to the HDFC Mutual
Fund.

⮚ SBI Mutual Fund has the best mutual fund for the investment purpose.

⮚ As per the analysis of data SBI Mutual Fund is one of the best investment
purpose as compare to the HDFC mutual fund.

47
 CHAPTER 4

FINDING & SUGGESTIONS

Finding & suggestions

On the basis of education

1) Education qualification

48
This graph shows 90% of education qualification of the investors has
completed graduation

On the basis of occupation.

2) Occupation

This graph shows 85% of the occupation of the investors are working in
private sector where as 10% of investors are working in private sector.

3) What is your monthly family income approximately?

49
This graph shows 42.1% of monthly income of investors is above 30000& above
where as 26.30% of the investors has monthly income of 20001 to 30000 & 15001 to
20000.

4) What kind of investment you preferred the most

This graph shows 42.15% investors preferred to deposit their money in

provided fund where has 21.10% deposit their money in fixed deposit
&15.80% of the invest their money in saving account.

5) While invest your money, which factor you prefer most?

50
This graph shows 42.10% of investors look for low risks where as 31.60% investors
look for high return& 21.10%look for liquidity.

6) Have you ever invested money in mutual fund?

This graph shows 57.90% of investors who are investing have said yes.
Whereas 42.10% of them as said no.

51
 7) Where do find yourself as mutual investors?

This graph shows 47.10% investors who have partial knowledge about mutual funds
.where as 23.50% of the investors totally ignorant or aware of only specific schemes.

8) Which mutual funds schemes can be used?

This graph shows 33.30% of investors want to invest in growth fund & sector fund,
while only 20% want to invest in small and midcap fund.

9) In which mutual have you invested

52
This graph shows 35.70% of investors want to invest in ICICI prudential funds
whereas only 28.60% of the investors want to invest in HDFC mutual fund.

10) When you invest in mutual fund which mode of investment will you
prefer?

This shows the % of investors who are willing to invest SIP that is 85.70% than 1
type of investment.

SUGGESTION
53
Suggestion of the mutual fund investors

● Understand the purpose of investment -: The first point to analyze

before investing in a plan funds is to find out whether objectives matches with
the scheme . If there is mismatch in the scheme that invest in large cap stocks
is not suitable for conservative investors .he should first try to invest in small
& midcap funds. Similarly he should pick up schemes that will specify his
investment. Examples pension plans children plan sector specific schemes.
There are the schemes from where he can invest for the future.

● Low risk tolerance: - the investors with low risks tolerance should invest
in small & midcap schemes as they are relatively safer when compared to
schemes like equity. Aggressive investors can go for equity investments can
opt for schemes that invest in specific industry or sector.

● Track record -: investors should go through schemes track record

performance against relevant market benchmark and its competitors.

● Period of investment -: to get good returns on their investments the

investors should hold their returns for longer periods that is for 3to 5 years in
order the schemes to generate good returns.

● Cost factor-: thought the AMC is regulated, one should look at the expense
ratio of the fund before investing. This is because money is deducted from the
returns. A higher entry load or exit load will ear into returns. So you have to
look at the cost factors before investing.

● Points to be considered while departing from the scheme

-:investor should sell or redeem or repurchase the proceeds within 10 days of
redemptions or repurchase .most funds charge exit load when the period of
exit is less than 6 months.
● Diversification -: The most amounts the investors invest; the greater is the
ability to afford diversification amount different asset classes and investment
styles. Asset allocation is the way in which one gives weight age to each
asset classes. Each asset class has its own characteristic in terms of
fluctuation.

54
● Continuous monitoring-: investors should continuously monitor their
portfolio and revise by updating according to market position that their returns
can be maximized.

● Other factors to be considered while investing -: investors should

took for top performing assets and focus on funds latest performance. A
common mistake now days investors do is they buy latest schemes which have
no pervious history as they give good returns.

● Starting small for smalltime investors -: first time mutual fund

investors are advised to go small on their investments. Investors should invest
in small & midcap companies and wait for the returns and once they are
satisfied they should go for diversification of the funds.

● Tax savings funds -: when markets are up it is advisable to invest in tax

saver, which are giving good returns compared too many other schemes.

55
CHAPTER 5

CONCLUSION

56
 CONCLUSION

Mutual fund industry now represents perhaps most appropriate opportunity for
most investors. The financial market is most sophisticated and complex.
Investors need required knowledge to invest in the mutual fund industry.
mutual fund industry also give good returns if the markets are high and you
can also suffer losses if the market does not well or while investing fund
manager makes some mistakes during investments of mutual funds .

Mutual fund returns are compared are the basis of performance of the stock
market. If the stock market do well than the fund in which you have invested
will also do well. As the markets are diversified the loss is minimal.

In my above research I had compared SBI mutual fund & HDFC mutual fund.
I had compared 5 years returns which both the mutual funds have given good
returns after a specified period.

Since inception SBI mutual fund has given good returns of 20% whereas
HDFC mutual fund has given a return of only 14%.

But still investors prefer to invest their money in private mutual funds in the
long run as they feel that they would get good returns.

But looking at the both the mutual funds three year ratio SBI mutual fund has
given a good return of 42% where of HDFC has given a returns of 25 %.

“So as per my suggestion it is best for investors to invest the SBI mutual
fund as it has given good returns.”

● “Mutual funds are subject to the market risk, please read the offer
document before Investing.

57
ANNEXURE

QUESTIONNIRE-:

A study of preferences of the investors of investment in mutual fund

1) Personal details
a) Name –
b) Address-
c) Phone –

2) Educational qualification
a) Graduation /PG
b) Under graduate
c) Others

3) Occupation
a) Govt. servant
b) Pvt. Sector
c) Business
d) Others

4) What kind of investment you prefer the most

a) Saving account
b) Fixed deposit
c) Insurance
d) Mutual fund
e) Post office –NSE
f) Shares / debentures
g) Gold /Silver
h) Real Estate
i) PPF
j) PF

5) While investing your money which factor you prefer the most ?
a) Liquidity
b) Low risk
c) High returns
d) Company reputation

58
6) Have you ever invested money in mutual fund
a) Yes
b) No

7) Where do you find yourself as mutual fund investors

a) Totally ignorant
b) Partial knowledge of mutual fund
c) Aware only specific schemes in which you invested
d) Fully aware

8) Which mutual fund scheme have you used?

a) Liquid fund
b) Midcap fund
c) Growth fund
d) Long cap fund
e) Sector fund

9) In which mutual fund have you invested?

a) SBI MF
b) UTI
c) HDFC MF
d) Reliance
e) ICICI Prudential funds
f) JM Mutual fund
g) Other / specify

10) When you invest mutual funds which mode of investment will you prefer?
a) One time investment
b) Systematic investment plan (SIP)

59
BIBLIOGRAPHY
⮚ Books on mutual fund in India (D.V.Ingle)
⮚ Investing in mutual funds.
⮚ Pooling Money :The Future Of Mutual Funds
⮚ Bogle of Mutual Funds: New perspectives for the intelligent investors.

WEBLIOGRAPHY
⮚ www.sbimf.com

⮚ www.hdfcmf.com

⮚ www.amfindia.com

⮚ www.researchgate.com

60