EXECUTIVE SUMMARY

In few years Mutual Fund has emerged as a tool for ensuring one’s 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 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.
The second part of the Project consists of data and its analysis collected through
survey done on 200 people. For the collection of Primary data I made a
questionnaire and surveyed of 200 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 Dehradoon to get some knowledge related to my topic. I studied about the
products and strategies of other AMCs in Dehradoon to know why people prefer to
invest in those AMCs. This Project covers the topic “THE MUTUAL FUND IS
BETTER INVESTMENT PLAN.” The data collected has been well organized and
presented. I hope the research findings will be of use.

INTRODUCTION TO MUTUAL FUND AND ITS VARIOUS

ASPECTS.

Mutual fund is a trust that pools the savings of a number of investors who share a
common financial goal. This pool of money is invested in accordance with a stated
objective. The joint ownership of the fund is thus “Mutual”, i.e. the fund belongs to all
investors. 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 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. A
Mutual Fund is an investment tool that allows small investors access to a well-
diversified portfolio of equities, bonds and other securities. Each shareholder
participates in the gain or loss of the fund. Units are issued and can be redeemed as
needed. The funds Net Asset value (NAV) is determined each day.
Investments in securities are spread across a wide cross-section of industries and
sectors and thus the risk is reduced. Diversification reduces the risk because all
stocks may not move in the same direction in the same proportion at the same time.
Mutual fund issues units to the investors in accordance with quantum of money
invested by them. Investors of mutual funds are known as unit holders.

When an investor subscribes for the units of a mutual fund, he becomes part owner
ofthe 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
asshares, 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.

ADVANTAGES OF MUTUAL FUND

•

Portfolio Diversification
•

Professional management
•

Reduction / Diversification of Risk

•

Liquidity
•

Flexibility & Convenience

•

Reduction in Transaction cost

•

Safety of regulated environment

•

Choice of schemes
•

Transparency

DISADVANTAGE OF MUTUAL FUND

•

No control over Cost in the Hands of an Investor

•

No tailor-made Portfolios
•

Managing a Portfolio Funds

•

Difficulty in selecting a Suitable Fund Scheme

HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY

The mutual fund industry in India started in 1963 with the formation of Unit Trust of
India, at the initiative of the Government of India and Reserve Bank. Though the
growth was slow, but it accelerated from the year 1987 when non-UTI players
entered the Industry.
In the past decade, Indian mutual fund industry had seen a dramatic improvement,
both qualities wise as well as quantity wise. Before, the monopoly of the market had
seen an ending phase; the Assets Under Management (AUM) was Rs67 billion. The
private sector entry to the fund family raised the Aum to Rs. 470 billion in March
1993 and till April 2004; it reached the height if Rs. 1540 billion.
The Mutual Fund Industry is obviously growing at a tremendous space with the
mutual fund industry can be broadly put into four phases according to the
development of the sector. Each phase is briefly described as under.
First Phase – 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament 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

SECOND

THIRD

FOURTH

February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit
Trust of India with assets under management of Rs.29,835 crores as at the end of
January 2003, representing broadly, the assets of US 64 scheme, assured return
and certain other schemes
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.
consolidation and growth. As at the end of September, 2004, there were 29 funds,
which manage assets of Rs.153108 crores under 421 schemes.

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:under this an investor invest in debt oriented fund and
give instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of the
same mutual fund.
3. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund
then he can withdraw a fixed amount each month
INTRODUCTION TO SBI MUTUAL FUND
.......experience in fund management consistently delivering value to its
investors. SBI Funds Management Pvt. Ltd. is a joint venture between 'The
State Bank of India' one of India's largest banking enterprises, and Société
Générale Asset Management (France), one of the world's leading fund
management companies that manages over US$ 500 Billion worldwide.
Today the fund house manages over Rs 28500 crores of assets and has a
diverse profile of investors actively parking their investments across 36 active
schemes. In 20 years of operation, the fund has launched 38 schemes and
successfully redeemed 15 of them, and in the process, has rewarded our
investors with consistent returns. Schemes of the Mutual Fund have time after
time outperformed benchmark indices, honored us with 15 awards of
performance and have emerged as the preferred investment for millions of
investors. The trust reposed on us by over 4.6 million investors is a genuine
tribute to our expertise in fund management.
SBI Funds Management Pvt. Ltd. serves its vast family of investors through a
network of over 130 points of acceptance, 28 Investor Service Centres, 46
Investor Service Desks and 56 District Organizers.SBI Mutual is the first bank-
sponsored fund to launch an offshore fund – Resurgent India Opportunities Fund.
Growth through innovation and stable investment policies is the SBI MF credo.

PRODUCTS OF SBI MUTUAL FUND

Equity schemes

The investments of these schemes will predominantly be in the stock markets

and endeavor will be to provide investors the opportunity to benefit from the
higher returns which stock markets can provide. However they are also
exposed to the volatility and attendant risks of stock markets and hence should
be chosen only by such investors who have high risk taking capacities and are
willing to think long term. Equity Funds include diversified Equity Funds,
Sectoral Funds and Index Funds. Diversified Equity Funds invest in various
stocks across different sectors while sectoral funds which are specialized
Equity Funds restrict their investments only to shares of a particular sector and
hence, are riskier than Diversified Equity Funds. Index Funds invest passively
only in the stocks of a particular index and the performance of such funds move
with the movements of the index.

 Magnum COMMA Fund

 Magnum Equity Fund

 Magnum Global Fund

 Magnum Index Fund

Magnum Midcap Fund

 Magnum Multicap Fund

 Magnum Multiplier plus 1993

 Magnum Sectoral Funds Umbrella

 MSFU- Emerging Business Fund
 MSFU- IT FUND
COMPETITORS OF SBI MUTUAL FUND
Some of the main competitors of SBI Mutual Fund in Dehradoon are as
Follows:
i. ICICI Mutual Fund
ii. Reliance Mutual Fund
iii. UTI Mutual Fund
iv. Birla Sun Life Mutual Fund
v. Kotak Mutual Fund
vi. HDFC Mutual Fund
vii.Sundaram Mutual Fund
viii. LIC Mutual Fund
ix. Principal
x. Franklin Templeton
AWARDS AND ACHIEVEMENTS

SBI Mutual Fund (SBIMF) has been the proud recipient of the ICRA Online Award -
8 times, CNBC TV - 18 Crisil Award 2006 - 4 Awards, The Lipper Award (Year 2005-
2006) and most recently with the CNBC TV - 18 Crisil Mutual Fund of the Year
Award 2007 and 5 Awards for our schemes
CHAPTER 3-OBJECTIVES N SCOPE
OBJECTIVES OF THE STUDY
1.To find out the Preferences of the investors for Asset Management
Company.
2.To know the Preferences for the portfolios.
3. To know why one has invested or not invested in SBI Mutual fund
4.To find out the most preferred channel.
5. To find out what should do to boost Mutual Fund Industry.
Scope......

Chapter 4-reserach methodology

Limitation:
 Some of the persons were not so responsive.
 Possibility of error in data collection because many of investors may have not
given actual answers of my questionnaire.
 Sample size is limited to 200 visitors of State Bank of India , B
Branch, Delhi out of these only 120 had invested in Mutual Fund. The
sample.
size may not adequately represent the whole market.

Some respondents were reluctant to divulge personal information which can
affect the validity of all responses.
 The research is confined to a certain part of Delhi

Chapter5-data analysis n interpretation

According to this chart out of 120 Mutual Fund investors of Dehradoon the most are
in the age group of 36-40 yrs. i.e. 25%, the second most investors are in the age
group of 41-45yrs i.e. 20% and the least investors are in the age group of below 30
yrs.
(b). Educational Qualification of investors of Dehradoon
Educational Qualification Number of Investors
Graduate/ Post Graduate
88
Under Graduate
25
Others
7
Total
120
Out of 120 Mutual Fund investors 71% of the investors in Dehradoon are
Graduate/Post Graduate, 23% are Under Graduate and 6% are others (under HSC