Trend Analysis of The Performance of Specified Mutual Funds of State Bank of India (SBI)

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TREND ANALYSIS OF THE PERFORMANCE OF SPECIFIED MUTUAL FUNDS OF STATE BANK OF INDIA (SBI)

Dissertation submitted in partial fulfillment of the requirements for the award of the Degree of

MASTER OF BUSINESS ADMINISTRATION of BANGALORE UNIVERSITY

By Kiran Kumar.H Reg. No. 10YACMA030

Under the guidance of: Mr. Soman Nambiar


Professor

PRESIDENCY BUSINESS SCHOOL

Bangalore University 2011-2012 DECLARATION I hereby declare that this project report entitled TREND ANALYSIS OF THE PERFORMANCE OF SPECIFIED MUTUAL FUNDS OF STATE BANK OF INDIA (SBI) is prepared by me under the valuable guidance of Prof. Soman Nambiar lecturer in Department of Management, Presidency B - School, Bangalore. This project is prepared by my own effort and has not been submitted to any other university to get the award of any other Degree, except to get the award of the Degree of Master of Business Administration of Bangalore University.

Place: Bangalore KUMAR H Date:

KIRAN 10YACMA030

ACKNOWLEDGEMENT

I am extremely grateful to my project guide, Prof Soman Nambiar for his kind and valuable help. He has been a constant source of guidance and encouragement throughout this study, without which this project could not have been completed. I would like to express my sincere gratitude to Mr Bharma Sharma Director of Presidency B School, Bangalore .who provided me an opportunity to undertake this project work, thus making way for expanding my knowledge about the subject. I am deeply indebted to my parents and friends whose constant support has provided valuable in the completion of this project successfully. Last but not least I would like to thank staff members of Presidency B School for enabling me in documenting this project.

Place: Bangalore KUMAR H

KIRAN

Date:

10YACMA030

TABLE OF CONTENTS CHAPTER NO. PARTICULARS


List of tables List of Graphs List of Abbreviations Abstract

PAGE NO.

Introduction 1.1 Trend Analysis 1.2 Mutual Fund 1.3 Characteristics of a


Mutual Fund

1.4 History of Mutual Fund


Industry

1.5 Mutual Fund Structure 1.6 Types of schemes 1.7 Mutual Fund
Advantages and Drawbacks

1.8 Current Scenario of


Mutual Fund Industry

1.9 Future Scenario 2 Review of Literature and Design of the Study


2.1 Introduction 2.2 Review of Literature 2.3 Statement of the Problem 2.4 Need of the Study 2.5 Scope and Objective of the Research 2.6 Research Methodology 2.7 Hypothesis 2.8 Operational definitions of concept 2.9 Data Collection 2.10 Tools and Techniques 2.11 Limitations of the Study 2.12 Chapter Scheme

Profile of the Company


3.1 Corporate Profile 3.2 MDs Desk 3.3 CIOs Desk 3.4 Awards

4 5

Results, Analyses and Discussions Summary of Findings, Conclusions and Suggestions


5.1 Summary of Findings 5.2 Conclusions 5.3 Suggestions 5.4 Policy Implications & Scope for Further Study

Appendices References

LIST OF TABLES
SL.NO 4.1 4.1.1 4.1.2 4.2 4.2.1 4.2.2 4.3 4.3.1 4.3.2 4.4 4.4.1 4.4.2 4.5 4.5.1 4.5.2 4.6 4.6.1 4.6.2 PARTICULARS Table showing the Magnum Multicap fund NAVs Table showing the calculation of Magnum Multicap Fund NAVs Table showing the Magnum Multicap Fund Table showing the Magnum Equity Fund NAVs Table showing the calculation of Magnum Equity Fund NAVs Table showing the Magnum Equity Fund Table showing the SBI blue chip Fund NAVs Table showing the calculation of SBI blue chip Fund NAVs Table showing the SBI blue Chip Fund Table showing the Magnum Childrens benefit plan NAVs Table showing the calculation of Magnum Childrens benefit plan NAVs Table showing the Magnum Childrens benefit Plan Fund Table showing the Magnum income plus fund saving plan Table showing the Calculation of Magnum income plus fund saving plan Table showing the Magnum Income Plus Fund Table showing the Magnum income fund NAVs Table showing the Calculation of Magnum income Fund NAVs Table showing the Magnum Income Fund Pg no

4.7 4.7.1 4.7.2 4.8 4.8.1 4.8.2 4. 9 4. 9.1 4.9.2 4.10 4.10.1 4.10.2

Table showing the Magnum instacash fund NAVs Table showing the Calculation of Magnum instacash fund NAVs Table showing the Magnum Instacash Fund Table showing the Magnum instacash fund Liquid floater NAVs Table showing the Calculation of Magnum instacash fund Liquid floater NAVs Table showing the Magnum Liquid Floater Fund Table showing the SBI premier liquid fund NAVs Table showing the Calculation of SBI premier liquid fund NAVs Table showing the SBI Premier Liquid Fund Table showing the SBI gold exchange traded scheme NAVs Table showing the calculation of SBI gold exchange traded scheme NAVs Table showing the SBI Gold ETS Fund

LIST OF GRAPHS
SL.NO 4.1 4.1.1 4.2 4.2.1 4.3 4.3.1 4.4 4.4.1 4.5 4.5.1 4.6 4.6.1 4.7 4.7.1 4.8 4.8.1 PARTICULARS Graph Showing the Magnum Multicap fund NAVs Graph showing the returns for each year of Magnum Multicap Fund NAVs Graph showing the Magnum Equity Fund NAVs Graph showing the returns for each year of Magnum Equity Fund NAVs Graph showing the SBI blue chip Fund NAVs Graph showing the returns for each year of SBI blue chip Fund NAVs Graph showing the Magnum Childrens benefit plan NAVs Graph showing the returns for each year of Magnum Childrens benefit plan NAVs Graph showing the Magnum income plus fund saving plan Graph showing the returns for each year of Magnum income plus fund saving plan Graph showing the Magnum income fund NAVs Graph showing the returns for each year of Magnum income Fund NAVs Graph showing the Magnum instacash fund NAVs Graph showing the returns for each year of Magnum instacash fund NAVs Graph showing the Magnum instacash fund Liquid floater NAVs Graph showing the returns for each year of Magnum instacash fund Liquid floater NAVs Pg no

4. 9 4. 9.1 4.10 4.10.1

Graph showing the SBI premier liquid fund NAVs Graph showing the returns for the each year of SBI premier liquid fund NAVs Graph showing the SBI gold exchange traded scheme NAVs Graph showing the returns for each year of SBI gold exchange traded scheme

LIST OF ABBREVIATIONS
MF SEBI AMC RBI UTI IDBI LIC GIC NAV CP COD HUF HNIs ETF PMS - Mutual Funds - Securities exchange Board of India - Asset Management Company - Reserve Bank of India - Unit Trust of India - Industrial Development Bank of India - Life Insurance Corporation of India - General Insurance Corporation of India - Net Asset Value - Commercial Paper - Certificate of Deposit - Hindu Undivided Family - High Net worth Individuals - Exchange Trade Fund - Portfolio Management Services

M & A - Mergers and Acquisitions HDFC - Housing Development Finance Corporation

T-bills - Treasury Bills ELSS - Equity Linked Saving Schemes CAGR - Compound Annual Growth Rate

ECB BOJ BSE COV RV

- European Central Bank - Bank of Japan - Bombay Stock Exchange - Coefficient of variance - Residual value

SDAR - Standard deviation adjusted return

ABSTRACT

The study used sample of state bank of India (SBI) mutual funds of varied net asset values to investigate the differences in characteristics of assets held, portfolio diversification, and variable effects of diversification on investment performance for the period Mar, 2009 to Apr 2012. The study found that SBI mutual funds do not differ significantly in terms of mean returns%. However, there is a significant difference between in terms of average standard deviation, average variance and average expected return. The study also found that there is a statistical difference between sponsorship classes in terms of e SDAR(excess standard deviation adjusted returns)as a performance measure. When residual variance (RV) is used as the measure of mutual fund portfolio diversification characteristic, there is a statistical difference between The model built on testing the impact of diversification on fund performance and found a statistical difference among sponsorship classes when residual variance is used as a measure of portfolio diversification and excess standard deviation adjusted returns as a performance measure. RV, however, has a direct impact on Treynors, Sharpe fund performance measure. Keywords: Mutual Funds, performance evaluation, risk-return analysis, Net asset value, residual variance, fund return

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