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Summer Internship Project Report

On
“A Role of SBI Mutual Funds in Retirement Planning”
At
SBI Mutual Fund

Submitted to
Institute Code: 778
Institute Name: Som-Lalit Institute of Business Management

Under the Guidance of

Dr. Rajeshwari Jain

In partial fulfillment of the requirement of the award of the degree of

Master of Business Management (MBA)

Offered By:
Gujarat Technological University,
Ahmedabad

Prepared By:
Jenny Jain
217780592038
MBA (Semester - III)
September, 2022
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DECLARATION

I Jenny J. Jain (Enrollment No. 217780592038) student of Faculty of

Management (MBA) hereby declare that they have successfully completed this
project on “A Role of SBI Mutual Fund in Retirement Planning. In the academic
year 2022-23. I declare that this submitted work is done by me and to the best of
my knowledge; no such work has been submitted by any other person for the
award of degree or MBA. I also declare that all the information collected from
various primary sources has been duly acknowledged in this project report.

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CERTIFICATE OF EXAMINER
This is to certify that project work embodied in this report entitled “A ROLE OF SBI
MUTUAL FUND IN RETIREMENT PLANING” was carried out by Jenny Jain
(217780592038) of Som-Lalit Institute of Business Management.

The Report is approved / Not approved

This report is for partial fulfilment of the requirement of the award of the degree of master of
business administration (Part-Time) offered by Gujarat Technological University.

________________________

(Examiner’s sign)

Name of Examiner:

External Examiner’s Institute Name:

External Examiners Institute Code:

Date:

Place:

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PREFACE

As a part of MBA Curriculum and in order to gain practical knowledge in the

field of Management, I have prepared a report “A Role of SBI Mutual Funds in
Retirement Planning.” The MBA programme is a well-structured course of
business management at SLIBM. The main objective of preparing the
Comprehensive Project at MBA level is to develop skills in students by providing
them an opportunity to relate practical experience with the theoretical concepts
and principles of business management. The Comprehensive Project has taught
us various managerial skills of which, Time Management is the most important.
The dissertation has been regarded as an important feature of post-graduate
education.

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ACKNOWLEDGEMENT

The success and the final observation drawn out from this project required a lot
of guidance and assistance from a lot of people and I am extremely privileged to
have got it all along throughout the duration of project report. The project report
in an outcome of overall supervision and co-operation received from project
guide, and most importantly, participants, and I am grateful to all of them.

I also thank Som lalit Institute of Management and to our college Principle Dr.
Neha Patel for providing me an opportunity to work on this research project. I
also express our sincere gratitude to my project guide Dr. Rajeshwari Jain who
took keeping interest in my project report and guided all along, till the date of
completion of my project report by providing all the vital and necessary
information and guidance, which further enabled to carry out the project report in
the most effective manner. I express my gratitude to all those people who
contributed in different ways in completion of this research. At last, I am highly
thankful to all the respondents, who have provided their valuable time and sincere
effort, which allowed me to meet the objectives of the research, in fair and true
manner.

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Table of Contents

1. EXECUTIVE SUMMARY ...................................................................................................... X

2. INTRODUCTION TO MUTUAL FUNDS ................................................................................ 0
2.1 About Mutual Funds .............................................................................................................. 1
2.2 Concept of Mutual Funds ...................................................................................................... 1
2.3 Structure of Mutual Fund ..................................................................................................... 2
2.3.1 The Fund Sponsor: .......................................................................................................... 3
2.3.2 Trust and Trustees .......................................................................................................... 4
2.3.3 Asset Management Companies ....................................................................................... 4
2.3.4 Other Components in the Structure of Mutual Funds ................................................... 5
2.4 History of Mutual Funds in India ............................................................................................. 6
2.5 Types of Mutual Fund Schemes ................................................................................................ 9
2.5.1 Scheme Classification based on Asset Class ....................................................................... 9
2.5.2 Scheme Classification by Portfolio Management ............................................................. 10
2.5.3 Classification by Investment objectives ............................................................................ 10
2.5.4 Classification based on Structure ..................................................................................... 13
2.5.5. Classification based on Risk ............................................................................................ 13
2.5.6 Special Mutual Funds ....................................................................................................... 14
2.6 Risk Associated with Mutual Funds ........................................................................................ 17
2.6.1 Standard Risk Factor: ...................................................................................................... 17
2.6.2 Specific Risk Factor .......................................................................................................... 17
2.7 Some Myths and Facts of Mutual Funds ................................................................................ 19
2.8 Advantages of investing in Mutual Funds ............................................................................... 21
2.9 Limitations of Investing in Mutual Funds .............................................................................. 22
2.10 About SBI Mutual Funds ...................................................................................................... 23
2.11 History of SBI Mutual Funds ................................................................................................ 24
2.12 Key Milestones ....................................................................................................................... 24
2.13 Fund House Expertise of SBI Mutual Funds ........................................................................ 25
2.13.1 Investment Expertise....................................................................................................... 25
2.13.2 Investment Philosophy: Growth through Innovation .................................................... 25
2.13.3 Optimal Risk Management ............................................................................................. 25
2.13.4 Investment Objective: Setting Benchmarks Time And Again. For Our Investors ....... 25
2.14. SWOT Analysis of SBI Mutual Funds ................................................................................. 26
2.15 Products of SBI Mutual Funds .............................................................................................. 28

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2.15.1 Snapshot of Equity Funds ............................................................................................... 28

2.15.2 Snapshot of Hybrid Funds & Solution Oriented Schemes ............................................. 29
2.15.3 Snapshot of Debt Funds .................................................................................................. 29
2.16 Retirement Planning .............................................................................................................. 30
2.17 Top Reasons to have Retirement Plan .................................................................................. 31
2.18 Retirement Schemes of SBI Mutual Funds ........................................................................... 31
3. REVIEW OF LITERATURE ..................................................................................................... 1
4. RESEARCH METHODOLOGY .............................................................................................. 33
4.1. Research Objective ............................................................................................................. 38
4.2 Hypothesis Testing ............................................................................................................... 38
4.3 Research Design ................................................................................................................... 39
4.4. Source of Data ..................................................................................................................... 39
4.5 Population of the study ........................................................................................................ 39
4.6 Sampling Method and Sampling Technique ....................................................................... 39
4.7 Statistical tool for Data Analysis ......................................................................................... 40
4.8 Limitation of the study......................................................................................................... 40
4.9 Scope of Further Study ........................................................................................................ 40
5. DATA ANALYSIS ................................................................................................................. 38
5.1 Tables and Graphs ............................................................................................................... 41
6. DATA STATISTICS.............................................................................................................. 41
6.1 Hypothesis Testing ............................................................................................................... 63
6.2 Reliability Test ..................................................................................................................... 68
6.3 Factor Analysis Test ............................................................................................................ 70
6.3.1 Descriptive Statistics ..................................................................................................... 70
6.3.2 The Correlation Matrix ................................................................................................ 70
6.3.3 Kaiser-Meyer-Olkin (KMO) and Bartlett's Test : measures strength of the
relationship among variables................................................................................................. 73
6.3.4 Communalities .............................................................................................................. 74
6.3.5 Total Variance Explained ............................................................................................. 75
6.3.6 Rotated Component Matrix ........................................................................................ 76
FINDINGS ..................................................................................................................................... 77
CONCLUSION.............................................................................................................................. 78
SUGGESTIONS ............................................................................................................................ 79
BIBILIOGRAPHY ........................................................................................................................ 80
REFERENCES .............................................................................................................................. 82
ANNEXURE .................................................................................................................................. 83

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1. EXECUTIVE SUMMARY

Mutual funds operate under the principle that "little drops of water build a large ocean." Small
investors can also invest in mutual funds and receive a reasonable rate of return while taking
on less risk than they would with shares. Additionally, mutual funds offer advantages like tax
advantages, specialised services, and expert knowledge. Consumers do not always invest their
entire income in different goods and services. They set aside a particular amount, and a portion
of that amount will be invested in mutual funds. Mutual funds are anticipated to be a better
solution for consumers right now. It is a financial middleman who is interested in directing the
savings of persons with excess surplus. Consumers have access to a variety of investment
options, but mutual funds stand out due to their unique combination of risk, return, liquidity,
profitability, and transparency. As a result, they are growing in popularity in today's market.
The customer perception of Mutual Funds as a Retirement Planning in Gujarat's Ahmedabad
city was the primary subject of this study. It revealed that consumers' attitudes on investing in
mutual funds were favourable.

As intern, I am working with ‘SBI Mutual Fund’. SBI Mutual Fund is one of the top most Asset
Management Company (AMC). Under this firm, I got to know the about the working and
selling pattern of SBI Mutual Funds. In addition to this, I also got the product knowledge of
Company.

After getting enough number of responses on questionnaire, I started data analysis part of report
with coordination my college faculty’s guidance and my internship firm’s coordinators. In data
analysis part of summer project; I used various chart pattern like Bar chart, Pie chart etc,
Various tabular are created for better understanding of data collected through questionnaire,
moreover upon data some hypothesis test is also run for establishing relationship between two
type of variables.

Last and most important part of my summer project is described what are all findings,
suggestions and conclusion of data analysis part.

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2. INTRODUCTION TO MUTUAL FUNDS

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2.1 About Mutual Funds

A mutual fund is a type of collective investment vehicle that collects and pools money from
multiple investors and invests it in stocks, bonds, government securities, and money market
instruments.

Professional fund managers invest the money collected in mutual fund schemes in stocks and
bonds, among other things, in accordance with the scheme's investment objective. After
deducting applicable expenses and levies, the income / gains generated by this collective
investment scheme are distributed proportionately among the investors by calculating the
scheme's "Net Asset Value" or NAV. In exchange, the mutual fund charges a small fee.

In a nutshell, a mutual fund is a pool of money contributed by multiple investors that is

managed by a professional Fund Manager.

In India, Mutual funds are formed as Trusts under the Indian Trust Act of 1882, in accordance
with the SEBI (Mutual Funds) Regulations of 1996.

The fees and expenses charged by mutual funds to manage a scheme are regulated and subject
to the limits set by SEBI.

2.2 Concept of Mutual Funds

Concept of Mutual Funds

Multiple investors with common financial goals pool their money

Investors, on a proportionate basis, get mutual funds units for the amount contributed to fund.

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The funds hence collected are invested into debentures, shares and other such securities by
the fund manager.

The fund manager books gains or losses and collects the dividend or interest income, if any.

Any capital gains or losses arising from such transactions will be passed on to the investors in
proportion to their investments.

2.3 Structure of Mutual Fund

Mutual Funds in India have a three-tier structure that includes other significant components. It
is not just about different AMCs or banks creating or launching various mutual fund schemes.
However, a few other players play an important role in the mutual fund structure. The process
involves three distinct entities: the sponsor (who establishes a Mutual Fund), trustees, and the
asset management company (which oversees the fund management). The Mutual Fund
structure was created as a result of the SEBI (Securities and Exchange Board of India) Mutual
Fund Regulations, 1996, which acts as a primary watchdog in all transactions. A Mutual Fund
is established as a Public Company under these regulations.

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2.3.1 The Fund Sponsor:

In India, the Fund Sponsor is the first layer in the three-tier structure of Mutual Funds.
According to SEBI regulations, a fund sponsor is any person or entity that can set up a Mutual
Fund to earn money through fund management. This fund management is handled by an
associate company that manages the fund's investments. A sponsor can be thought of as the
associate company's promoter. A sponsor must apply to SEBI for permission to establish a
Mutual Fund. A sponsor, on the other hand, is not permitted to work alone. Once SEBI agrees
to the formation, a Public Trust is formed and registered with SEBI under the Indian Trust Act,
1882. Trustees are chosen to operate the trust, safeguard the interests of unit holders, and
adhere to SEBI's mutual fund requirements after the trust has been successfully created.
Trustees must be registered with SEBI. In order to govern the handling of money, the sponsor
subsequently establishes an asset management business that must adhere to the Companies Act
of 1956. Given that the sponsor is the main organisation that promotes the mutual fund
company and that the mutual funds will govern public money, SEBI has established qualifying
requirements for the fund sponsor.

 The sponsor must have at least five years of expertise in the financial services industry
and have a net worth that has increased over the course of the previous five years.

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 The capital contribution made by the AMC cannot be less than the sponsor's net wealth
in the most recent year.
 The sponsor is required to demonstrate profitability in at least three of the last five
years, including the most recent one.
 The sponsor must own at least 40% of the asset management company's net worth.

2.3.2 Trust and Trustees

The second tier of the structure of mutual funds in India is made up of trust and trustees.
Trustees, also referred to as the fund's guardians, are typically employees of the fund sponsor.
They perform a crucial role in preserving the confidence of the investors and monitoring the
fund's progress, as is obvious from the name.

Through a legal document called a trust Deed, the fund sponsor establishes a trust in favour of
the trustees. Trustees are accountable to investors and run the trust on their behalf. They could
be considered the main stewards of funds and assets. Trustees can be established in one of two
ways: by a board of trustees or a trustee company. The trustees supervise the Mutual Fund's
operations and ensure that they adhere to SEBI (Mutual Fund) requirements. They also keep
an eye on how the asset management firm's systems, practises, and overall operation are going.
AMC is not permitted to float any scheme in the market without the consent of the trustees.
Every six months, the trustees are required to submit a report to SEBI outlining the AMC's
operations. In order to prevent any form of conflict of interest between the AMC and the
sponsor, SEBI has also implemented more stringent transparency regulations. Therefore, in
order to protect the investors' hard-earned money, trustees must act independently and take
appropriate action. Even trustees are required to register with SEBI. Additionally, SEBI
controls their registration by revocation or suspension of the registry if any condition is
discovered to have been broken.

2.3.3 Asset Management Companies

The third layer of the mutual fund system is comprised of asset management firms. It is a sort
of company founded under the Companies Act that is registered under SEBI. The purpose of
an AMC is to list a variety of mutual fund schemes that adhere to market norms and investor
demands. The asset management firm serves as the trust's investment manager or fund
manager. The AMC receives a nominal fee for managing the fund. All operations pertaining to
the funds fall under the purview of the AMC. It develops numerous plans and implements them.
Additionally, it establishes mutual funds alongside the trustee and sponsor and controls their

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growth. The AMC is required to oversee investments and offer services to investors. It works
with them by entering into a deal and solicits their services along with other components like
brokers, auditors, bankers, registrars, lawyers, etc. There are some limitations placed on the
business activity of the companies to guarantee that there is no conflict between the AMCs.

2.3.4 Other Components in the Structure of Mutual Funds

Custodian: One such organisation in charge of keeping the Mutual Fund's holdings secure is a
custodian. They are registered with SEBI, handle the mutual fund's investment account, and
make sure the securities are delivered and transferred. Custodians also help investors keep track
of their investments and give them the option to upgrade their holdings at a certain moment.
Additionally, they keep track of and collect bonus issues, dividends, and interest payments
made on mutual fund investments.

Registrar and Transfer Agents (RTAS):

An important conduit between investors and fund managers is provided by RTAs. They provide
assistance to the fund managers by keeping them informed of investor information.
Additionally, they provide the benefits of the fund to the investors. Even they carry out a variety
of activities and duties and are registered with SEBI. These are the organisations that support
mutual funds. RTAs resemble Mutual Funds' operating division more than anything. Since all
Mutual Fund companies operate similarly, using RTAs on a large scale and at low cost is
advantageous for all 44 AMCs. Some of the well-known RTAs in India are CAMS, Karvy,
Sundaram, Principal, Templeton, etc. Their services include:

 Processing investors’ application

 Recording the information about investors
 Account statements are sent to the investors.
 Distributing recurring reports
 Processing the dividend payments
 Updating investor information, including adding new participants and removing those
who withdrew from the fund

Auditor:

Auditor examine annual reports of various schemes as well as record books of accounts. They
are referred to as the independent watchdogs, and it is their job to audit the sponsor, trustees,

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and AMC's financial records. Each AMC employs an impartial auditor to review the books in
order to maintain the books' transparency and integrity.

Brokers:

The brokers' main duties include distributing the monies and bringing in new investors. To buy
and sell shares on the stock market, AMC uses brokers' services. Brokers must also research
the market and predict its future course. Now, these individuals are crucial to the management
of the mutual funds. Each of them is accountable for and plays a specific duty. Their respective
functions continue to be connected, nevertheless. The three-tier structure of mutual funds is set
up with the idea of their fiduciary nature in mind. It guarantees the independent and effective
operation of every component of the system. Since the structure of mutual funds is compliant
with international standards, each component's functions and duties are properly segregated.

2.4 History of Mutual Funds in India

For a developed economy, a vibrant financial market with wide participation is crucial. The
Government of India and Reserve Bank of India took the initiative to establish India's first
mutual fund, Unit Trust of India (UTI), with the broad goal of "encouraging saving and

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investment as well as participation in the income, profits, and gains accruing to the Corporation
from the acquisition, holding, management, and disposal of securities."

In the last few years the MF Industry has grown significantly. The history of Mutual Funds in
India can be broadly divided into five distinct phases as follows:

First Phase – 1964 – 1987

In India, the first mutual fund company, UTI, was established in 1963 by a parliamentary act,
and it operated under the administrative and regulatory oversight of the Reserve Bank of India
(RBI). The Industrial Development Bank of India (IDBI) replaced the RBI as the regulatory
and administrative authority over UTI in 1978 after it was delinked from the RBI. Unit Scheme
1964 (US '64) was UTI's initial programme. UTI had $6,700 crores in assets under management
by the end of 1988. (AUM).

Second Phase - 1987-1993 – Entry of Public Sector Mutual Funds

Public sector banks, Life Insurance Corporation of India (LIC), and General Insurance
Corporation of India launched public sector mutual funds in 1987. (GIC). The first "non-UTI"
mutual fund was created in June 1987 by SBI Mutual Fund, which was followed by Canbank
Mutual Fund in December 1987, Punjab National Bank Mutual Fund in August 1989, Indian
Bank Mutual Fund in November 1989, Bank of India in June 1990, and Bank of Baroda Mutual
Fund in June 1990. (Oct. 1992). While GIC had formed its mutual fund in December 1990,
LIC had done so in June 1989. The MF sector had 47,004 crores in assets under management
at the end of 1993.

Third Phase – 1993-2003 – Entry of Private Sector Mutual Funds

With the foundation of SEBI in April 1992 to safeguard the interests of investors in the
securities market, to encourage its growth, and to regulate it, the Indian securities market gained
more significance. The first set of SEBI Mutual Fund Regulations, which apply to all mutual
funds with the exception of UTI, were established in 1993. The first private sector MF
registered in July 1993 was the former Kothari Pioneer, which has since amalgamated with
Franklin Templeton MF. A new era in the Indian MF business began in 1993 with the
introduction of private sector funds, offering Indian investors a greater selection of MF
products. In 1996, a comprehensive set of restrictions, namely the SEBI MF Regulations, were
revised and replaced the original SEBI MF Regulations. The original SEBI MF Restrictions
were updated in 1996 and replaced with a comprehensive set of regulations known as the SEBI

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(Mutual Fund) Regulations, 1996, which are still in effect today. Over time, as more foreign
sponsors established mutual funds in India, the number of MFs expanded. During this phase,
there were numerous mergers and acquisitions in the MF sector. 33 MFs had a combined AUM
of 1,21,805 crores as of the end of January 2003, with UTI alone accounting for 44,541 crores
of that total.

Fourth Phase – Since February 2003 – April 2014

After the Unit Trust of India Act of 1963 was repealed in February 2003, UTI was divided into
the Specified Undertaking of the Unit Trust of India (SUUTI) and the UTI Mutual Fund, which
operates in accordance with the SEBI MF Regulations. The former UTI was split into two, and
a number of private sector fund mergers occurred, ushering in the MF sector's fourth phase of
consolidation. Following the global financial crisis in 2009, stock markets all across the world
collapsed, including those in India. The majority of investors who entered the capital market at
its peak lost money, which seriously weakened their faith in MF products. The Indian MF
Industry had already been negatively impacted by the global financial crisis and the SEBI's
elimination of Entry Load. For more than two years, the industry struggled to recover and
transform itself in an effort to maintain its economic viability, as evidenced by the slow growth
in MF Industry AUM from 2010 to 2013.

Fifth (Current) Phase – Since May 2014

In order to "re-energize" the Indian mutual fund industry and increase MFs' penetration, SEBI
introduced a number of progressive measures in September 2012. This was done in recognition
of the low penetration of MFs, particularly in tier II and tier III cities, and the need for greater
alignment of the interests of various stake holders. After the worldwide meltdown, things
started to turn around thanks to the measures, and things dramatically got better once the new
government was established at the centre. Since May 2014, the sector has experienced
consistent inflows, growth in AUM, and an increase in the number of investor folios (accounts).

 On May 31, 2014, the industry's AUM reached the milestone of $10 trillion (ten lakh
crore), and in just three years, it had expanded more than twofold. In August 2017, it
reached the milestone of $20 trillion (twenty lakh crore). In November 2020, the AUM
size surpassed 30 trillion (or 30 Lakh) for the first time.
 The whole size of the Indian MF Industry increased more than five times in just ten
years, from 7.53 trillion on August 31, 2012, to 39.34 trillion on August 31, 2022.

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 The AUM of the MF Industry increased nearly twofold in just 5 years, from 20.59
trillion on August 31, 2017, to 39.34 trillion on August 31, 2022.
 From 6.08 crore investor folios as of August 31, 2017, to 13.65 crore as of August 31,
2022, there has been a more than 2-fold rise in just five years.
 In the five years since August 2017, 12.60 lakh new folios have been added on average
per month.

The regulatory actions made by SEBI to re-energize the MF Business in September 2012 and
the support from mutual fund distributors in growing the retail base have had a dual effect that
has allowed the industry to increase in size.

The last mile connection between investors and MF Distributors has been greatly needed,
especially in smaller towns. This connection not only allows investors to invest in suitable
schemes but also supports investors in staying on track during periods of market volatility so
that they can benefit from mutual fund investing.

Systematic Investment Plans (SIP) have become increasingly popular over the years thanks in
large part to MF distributors. The number of SIP accounts surpassed the one billion milestone
in April 2016, and as of August 31, 2022, there are 5.72 billion SIP accounts overall.

2.5 Types of Mutual Fund Schemes

2.5.1 Scheme Classification based on Asset Class
Equity Funds: Due to their focus on stock investments, equity funds are sometimes known as
stock funds. The money is invested in the shares/stocks of various companies using a pooled
sum from numerous individuals with a variety of backgrounds. These funds' earnings and
losses are entirely based on the performance of the invested shares (price increases or
decreases) on the stock market. Furthermore, over time, equity funds could produce
considerable profits. As a result, there is also a tendency for these funds to have a higher level
of risk.

Debt Funds: Debt funds invest largely in treasury bills, bonds, and other fixed-income assets.
They make investments in a range of fixed-income securities, including Fixed Maturity Plans
(FMPs), Gilt Funds, Liquid Funds, Short-Term Plans, Long-Term Bonds, and Monthly Income
Plans, among others. For passive investors searching for consistent income (interest and capital

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appreciation) with little risk, the investments with set interest rates and maturity dates can be a
wonderful choice.

Money Market Funds: On the stock market, investors trade stocks. Investors invest in the
money market, commonly referred to as the capital market or cash market, in a similar manner.
The government manages it via issuing money market assets, including as bonds, T-bills, dated
securities, and certificates of deposits, among others, in collaboration with banks, financial
institutions, and other businesses. Your money is invested by the fund manager, who in turn
pays out dividends on a regular basis. A short-term strategy (no longer than 13 months) can
significantly reduce the danger of investment on such funds.

Hybrid Funds: Equipping the gap between equity funds and debt funds, hybrid funds
(Balanced Funds) are an ideal combination of bonds and stocks. Either a fixed or variable ratio
may be used. In essence, it combines the best features of two mutual funds by, for example,
allocating 60% of assets to stocks and the remaining 40% to bonds, or vice versa. Hybrid funds
are appropriate for investors who want to branch out from lower but consistent income schemes
and take on greater risks in order to benefit from "debt plus returns."

2.5.2 Scheme Classification by Portfolio Management

Active Funds: In an active fund, the fund manager makes decisions about which stocks to
choose and whether to buy, hold, or sell the underlying securities. To build and manage the
portfolio, active funds use a variety of strategies and management techniques.

 The Scheme Information booklet provides an upfront description of the investment

philosophy (offer document)
 The goal of active funds is to outperform the benchmark index in terms of returns
(alpha).
 The strategy chosen will determine the risk and return in the fund.
 The stocks for the portfolio are "selected" by active funds using various methodologies

Passive Funds: Passive Funds maintain a portfolio that corresponds to a specified Index or
Benchmark. In a passive fund, the fund manager plays a passive role because the benchmark
index determines which stocks to buy, hold, and sell, and the fund manager or dealer only needs
to repeat that with little tracking error.

2.5.3 Classification by Investment objectives

Growth Funds:

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 Growth Funds are investments that aim to increase in value over time.
 Invest mostly in growth-oriented assets, including equity
 A medium- to long-term investment perspective is necessary for investments in growth-
oriented funds.
 Equity has historically outperformed the majority of other types of investments kept
over the long run. However, because the prices of the underlying equity shares may
alter, growth fund returns are frequently erratic in the short term.
 Investors must therefore be able to accept short-term return volatility.

Income Funds:

 Income Funds' main goal is to give investors a consistent and reliable income.
 In fixed income assets like corporate bonds, debentures, and government securities,
income funds invest.
 The interest income from these assets and any capital gains from changes in the value
of the securities make up the fund's return.
 If the portfolio produces the required returns, the fund will disperse the income. No
assurance of income is provided.
 The duration and credit quality of the securities owned will affect the returns.

Liquid/Overnight/Money Market Mutual Funds

 Investors looking for liquidity and principle protection with comparable yields should
choose liquid schemes, overnight funds, and money market mutual funds.
 The money market instruments* with maturities of no longer than 91 days are where
the funds invest.
 The market's standard short-term interest rate will determine the return on the invested
capital.
 These are perfect for investors who want to temporarily park their excess cash. Longer
holding periods for these funds may cost investors the potential for superior returns
from products designed for such periods.

Tax Saving Fund:

Over the years, all categories of investors have seen ELSS, or Equity Linked Savings Scheme,
rise to the top. They not only come with the shortest lock-in time of only three years, but they
also maximise wealth while enabling you to save taxes. They are known to produce non-taxable

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returns between 14 and 16% when investing primarily in stock (and associated goods). Salaried
individuals with a long investment horizon are the ideal candidates for these funds.

Aggressive Growth Funds:

The Aggressive Growth Fund, which tends to be a little riskier when deciding where to invest,
is intended to generate large financial profits. Although subject to market volatility, one can
choose a fund based on its beta (a measure of the fund's movement relative to the market). For
instance, an aggressive growth fund will display a higher beta, such as 1.10 or above, if the
market displays a beta of 1.

Capital Protection Funds:

Capital Protection Funds serve the job despite providing relatively lower returns (12% at most)
if safeguarding the principle is the top priority. The money is split between equity investments
and bond or CD investments by the fund manager. Although there is a very minimal chance of
suffering a loss, it is recommended to stay invested for at least three years (closed-ended) to
protect your money, and the returns are also taxable.

Fixed Maturity Funds:

To take advantage of triple indexation and reduce tax burden, many investors opt to invest
closer to the end of the fiscal year. Fixed Maturity Plans (FMP), which invest in bonds,
securities, money market, etc., give a wonderful chance for those who are uneasy with the debt
market trends and associated dangers. FMP operates on a predetermined maturity time because
it is a close-ended plan; this period might be anywhere between one month and five years (like
FDs). To benefit from accrued interest at the time of FMP maturity, the fund management
makes sure the funds are transferred to an investment with a similar term.

Pension Funds:

Most unforeseen events (such a medical emergency or children's wedding) can be taken care
of by setting aside a percentage of your income in a pension fund of your choice to accumulate
over a lengthy period of time to insure you and your family's financial future after retiring from
regular job. It is not advised to rely only on funds to see you through your golden years because
all resources, regardless of size, eventually run out. EPF is one example, but banks, insurance
companies, etc. also offer many more attractive programmes.

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2.5.4 Classification based on Structure

Open Ended Funds:

There are no specified restrictions on open-ended funds, such as a time limit or a cap on the
amount of units that can be traded. With these funds, investors can exchange funds whenever
it's convenient and exit when necessary at the current NAV (Net Asset Value). The only
explanation for why the unit capital fluctuates constantly with fresh entrants and exits is this.
If an open-ended fund chooses not to continue accepting new investors, it may do so (or cannot
manage significant funds)

Closed Ended Funds:

The unit capital to be invested is pre-determined in closed-ended funds. In other words, the
fund company is not allowed to sell more units than the pre-agreed quantity. There is a deadline
to purchase units during the New Fund Offer (NFO) period that is included with some funds.
Fund managers are willing to accept NFOs of any fund size, and they have a predetermined
maturity tenure. Therefore, SEBI has ordered that investors be given the opportunity to either
repurchase option or list the funds on stock markets to leave the schemes.

Interval Funds:

Both open-ended and closed-ended characteristics can be found in interval funds. These funds
are closed the rest of the time and only available for purchase or redemption during
predetermined intervals (determined by the fund house). A minimum of two years will pass
before any trades are allowed. Investors wishing to save a lump sum of money for a short-term
financial objective, say within the next three to twelve months, should consider these funds.

2.5.5. Classification based on Risk

Very Low – Risk Funds:

Because of their low risk, liquid funds and ultra-short-term funds (one month to one year) are
known to have poor returns (6% at most). Investors select this to achieve their near-term
financial objectives and to safeguard their capital through these products.

Low – Risk Funds:

Investors are hesitant to put money into riskier assets in the case of rupee depreciation or an
unanticipated national crisis. Fund managers advise investing in one or more liquid, ultra-short-

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term, or arbitrage funds in these circumstances. Returns could range from 6 to 8%, although
investors are free to change when valuations stabilise.

Medium – Risk Funds:

The risk component in this situation is medium since the fund manager splits his investments
between stock and debt. The typical returns may range from 9 to 12%, and the NAV is not
particularly volatile.

High – Risk Funds:

High-risk mutual funds require active fund management since they are ideal for investors who
have no risk aversion and who want to earn large returns in the form of interest and dividends.
Since performance reviews are subject to market volatility, they must be conducted on a regular
basis. Although the majority of high-risk funds often offer up to 20% returns, you can expect
15% returns.

2.5.6 Special Mutual Funds

Sector Funds:

Sector funds are theme-based mutual funds that invest only in one particular sector. The risk
factor is higher for these funds because they only invest in particular industries with a small
number of stocks. Investors are encouraged to follow the numerous sector-specific trends.
Sector funds offer excellent returns as well. Some industries, including banking, IT, and
pharma, have experienced rapid and steady growth in recent years and are expected to continue
to show promise in the years ahead.

Index Funds:

Index funds invest money in an index and are best suited for passive investors. It is not managed
by a fund manager. An index fund finds stocks and their related market index ratios, then
invests money in equities with similar market ratios. They play it safe by imitating the index
performance even if they are unable to outperform the market (this is why they are unpopular
in India).

Funds of Funds:

A diversified mutual fund investment portfolio offers a wide range of advantages, and "Funds
of Funds," sometimes referred to as multi-manager mutual funds, are designed to fully take
advantage of this by investing in a variety of fund categories. In other words, purchasing one

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fund that invests in a variety of funds rather than a number of funds allows for both cost-
effective diversification and diversity.

Emerging Market Funds:

Investing in developing markets is regarded as a risky venture that has occasionally produced
negative returns. India is a vibrant and developing economy in which investors might find
lucrative profits on the domestic stock market. They are subject to market swings, just like all
markets. Additionally, from a longer-term view, emerging economies are anticipated to
contribute the bulk of future global growth.

International/Foreign Funds:

Foreign mutual funds are used by investors who want to diversify their portfolio beyond
international borders since they can provide profitable returns even when the Indian Stock
Markets are performing well. An investor may use a feeder strategy (getting local funds to
invest in foreign companies), a hybrid strategy (investing, for example, 60% in domestic
equities and the remaining 40% in foreign funds), or a theme-based allocation (e.g., gold
mining).

Global Funds:

Global funds and international funds are very distinct, although sharing the same linguistic
sense. A global fund contains investments in your local nation even though it primarily invests
in global markets. The International Funds are solely focused on international markets. Global
funds are diverse and universal in approach, but due to differing regulations, market, and
currency fluctuations, they can be extremely risky. However, they do serve as a hedge against
inflation, and long-term returns have traditionally been strong.

Real Estate Funds:

Due to the numerous dangers associated with such projects, many investors are still unwilling
to participate in them despite the real estate boom in India. Real estate funds can be a great
substitute since they allow investors to participate indirectly by investing in established real
estate firms or trusts rather than individual real estate projects. When buying a home, a long-
term investment eliminates dangers and administrative difficulties and, to some extent,
provides liquidity.

Commodity – focused Stock Funds:

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These funds are perfect for investors wishing to diversify their portfolios and have a healthy
appetite for risk. Stock funds with a concentration on commodities offer the opportunity to
engage in a variety of different trades. Returns, however, are either based on the performance
of the stock firm or the commodity itself and may not be periodic. The only commodity in
which mutual funds may make direct investments in India is gold. The remainder buy shares
or fund units from companies that deal in commodities.

Market Neutral Funds:

Market-neutral funds serve the objective of protecting investors from unfavourable market
trends while maintaining good returns (like a hedge fund). These funds offer strong returns
with higher risk-adaptability, allowing even modest investors to outperform the market without
exceeding the portfolio's limits.

Leverage Funds:

An inverse index fund's returns change in the opposite direction from those of a standard index
fund, which move in lockstep with the benchmark index. It simply involves selling your shares
when the stock declines and then buying them again at a lower price (to hold until the price
goes up again).

Asset Allocation Funds:

This is a very adaptable portfolio that optimally blends debt, equities, and even gold. Asset
allocation funds can control the distribution of equity and debt based on a predetermined
formula or fund managers' assumptions based on current market patterns. It is similar to hybrid
funds in certain ways, but the fund manager must have exceptional skill in selecting and
allocating bonds and equities.

Gift Funds:

Yes, you can give your loved ones a mutual fund or a SIP to help secure their financial future.

Exchange Traded Funds:

It is purchased and sold on exchanges and is a member of the index fund family. Exchange-
traded Funds have opened up a whole new universe of investment opportunities, giving
investors significant exposure to domestic and international stock markets as well as
specialised industries. Similar to a mutual fund, an ETF can be exchanged in real-time at a
price that changes frequently during the day.

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2.6 Risk Associated with Mutual Funds

2.6.1 Standard Risk Factor:
 Mutual Fund Schemes are not products with guaranteed returns.
 Investment risks such as trading volume, settlement risk, liquidity risk, default risk, and
potential principle loss are present when purchasing mutual fund units.
 The value of an investment in a mutual fund scheme may increase or decrease as a
result of changes in the price, value, or interest rates of the securities in which the
scheme invests.
 The NAV of the Scheme may change in response to movements in the larger equity and
bond markets in addition to the factors that affect the value of individual investments
in the Scheme. Additionally, the NAV of the Scheme may be impacted by factors that
have an impact on capital and money markets in general, including but not limited to
changes in interest rates, currency exchange rates, changes in governmental policies,
taxation, political, economic, or other developments, and increased volatility in the
stock and bond markets.
 Any mutual fund scheme's past success cannot be used to predict its future performance.

2.6.2 Specific Risk Factor

Risk associated with Investments in Equities

 Risk of losing Money: Investors shouldn't participate in equity schemes unless they
can afford to assume the risk of potential principle loss because investments in equity
and equity-related products include some risk.
 Price Risk: Equities shares and products that are tied to equity are highly volatile and
subject to daily price changes.
 Liquidity Risk for listed securities: Trading volumes and settlement times may limit
the liquidity of investments made in shares. Unexpected events may cause settlement
periods to be greatly extended. Although securities that are listed on the stock exchange
have a lower liquidity risk, the amount of overall activity on the stock exchanges
restricts the capacity to sell these investments. Should the value of the securities held
in the scheme portfolio decrease later, the inability of a mutual fund to sell the securities
in its portfolio could result in possible losses to the scheme and could cause the fund to
suffer losses up until the security is eventually sold.
 Event Risk: Price risk due to company or sector specific event.

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Risk associated with Investments in Debt Securities and Money Market Instruments

 Interest Rate Risk: In general, the market value of fixed income instruments is
inversely correlated with changes in interest rates. Existing fixed income instruments
typically see a decline in price when interest rates rise and an increase in price when
interest rates fall. As a result, the value of a scheme portfolio may decrease when market
interest rates rise and increase when they do. The coupon and maturity of the security
determine how much the price will decrease or increase. Additionally, it is influenced
by the yield level at which the security is traded.
 Credit Risk: This is the risk related to fixed income instruments' issuers missing
payments on interest and/or principal. If there is a default, the scheme might not get all
of the money that is owed, and its NAV might decrease to the level of default. The cost
of a security may change even in the absence of a default due to anticipated changes in
the issuer's credit rating. The fact that a government security is a sovereign security and
is safer may be mentioned at this point. Credit risk is higher for corporate bonds than
for government securities. There are several levels of safety for corporate bonds as well,
and a bond with a higher rating from a rating agency is safer than one with a lower
rating from the same rating agency.
 Spread Risk: Corporate bond credit spreads may alter in response to shifting market
conditions. If credit spreads widen, the market value of the portfolio's debt instruments
may decline, and vice versa. Similar to fixed-rate securities, the value of floating-rate
assets may decrease if spreads over the benchmark security or index widen.
 Liquidity Risk: The ease with which a security can be sold at, or very close to, its
yield-to-maturity (YTM) or actual value is referred to as liquidity risk. The market's
liquidity situation changes from time to time. Depending on market factors that affect
changes in the liquidity premium associated with the bond's price, the liquidity of a
bond may alter. When there is limited liquidity, it may be more expensive to sell
securities than usual. Additionally, depending on market conditions, the liquidity of any
given investment in a portfolio may decline, necessitating a larger discount at the time
of sale. The difference between the bid price and the offer price given by a dealer serves
as the key indicator of liquidity risk. The liquidity of some of these investments may be
constrained by trading volume, settlement times, and transfer procedures. The
settlement durations of the various financial market segments in India vary, and these
timeframes can be greatly increased by unforeseen events. Furthermore, delays in

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settlement may cause brief periods during which a portion of the Scheme's assets are
not invested, earning no return, or during which the Scheme may pass on lucrative
investment possibilities. When a security is sold, it can become illiquid, which would
cause the portfolio's value to drop. A discount, which could be sizable, from the market
price of comparable assets for which a liquid market exists may be reflected in the
acquisition price and subsequent valuation of limited and illiquid securities.
 Counterparty Risk: This is the risk of the counterparty to a transaction failing to
provide securities in exchange for consideration that is paid or to pay consideration in
exchange for securities that are delivered, in whole or in part, or in accordance with the
specified terms. If a counterparty defaults, the fund could suffer losses.
 Prepayment Risk: When the borrower repays the loan before the due date, this occurs.
The yield and tenor for the mutual fund scheme may change as a result of this. The
average duration of asset-backed securities is shortened as interest rates decline because
borrowers frequently replace high interest loans with funds acquired at lower interest
rates (ABS). Even though interest rates increase, there is still a danger of prepayment
when an owner pays off a mortgage when they sell their home or an auto loan when
they sell their automobile. Reinvestment risk, or the possibility that the principal may
only be reinvested at a lesser rate, is also introduced since prepayment risk rises when
interest rates fall.
 Re-investment Risk: Reinvestment risk exists when investing in fixed income assets
since bond interest rates may change between coupon payment and maturity dates (the
purchase yield of the security). Due to this, the final realised yield can be lower than
first anticipated. The "interest on interest" component is the extra income from
investing. There is a chance that intermediate cash flows can be reinvested at a slower
rate than was initially anticipated.

2.7 Some Myths and Facts of Mutual Funds

 Myth: Mutual Funds are for experts
 Fact: Mutual funds are actually designed for regular people who might lack the
information or skill set necessary to invest in the securities market. After conducting
thorough market research, professional fund managers competently manage mutual
funds for the benefit of investors. A cheap way for investors to hire a full-time, qualified
professional fund manager to manage their money is through a mutual fund.
 Myth: Mutual Funds are only for long term

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 Fact: Depending on the investor's investment purpose and time horizon, mutual funds
might be for the short term or the long term. Different mutual fund schemes exist that
invest in various securities, including both debt and equity instruments, depending on
the demands of the investor. For example, Liquid Funds are low duration funds with
portfolio maturities of less than 91 days, while Ultra Short-Term Bond Funds are low
duration funds with portfolio maturities of less than a year. These short-term schemes
allow you to invest for a short period of time, such as a few days to a few weeks to a
few years. The underlying portfolio maturity of short-term bond funds, which are
medium-duration funds, spans from one to three years. Then there are long-term income
funds, which have a portfolio maturity between three and ten years and a medium to
long duration. Debt mutual funds are appropriate for investors with short-term (less
than five-year) investment horizons, whereas equity schemes are best suited for a longer
time frame.
 Myth: Investing in Mutual Funds is same as investing in Stock Market
 Fact: Mutual Funds engage in equities, government and corporate bonds, and money
market products like Treasury Bills, Commercial Papers, Certificates of Deposit,
Collateral Borrowing & Lending Obligations (CBLO), etc. Due to huge ticket sizes and
minimum purchase quantities (such as G-Secs), many of these products are not
accessible to ordinary investors; nevertheless, retail investors can still participate in
such investments through mutual fund schemes.
 Myth: One needs large amount of money to invest in Mutual Funds
 Fact: In most mutual fund schemes, one might start investing in mutual funds with
merely 5000 for a lump-sum / one-time investment with no upper limit and 1000 for
future / incremental subscriptions. Additionally, the minimum investment for Equity
Linked Savings Schemes (ELSS) is just 500. In reality, a Systematic Investment Plan
(SIP) allows investors to make investments for as long as they like with as little as 500
each month.
 Myth: One needs to have Demat account to invest in Mutual Funds
 Fact: Except for Exchange Traded Funds, holding mutual fund units in demat mode is
completely optional. The decision of whether to hold the units in a Demat mode or in
the traditional physical accountant statement mode is fully up to the investor for all
other schemes, including the close-ended listed schemes like Fixed Maturity Plans
(FMPs).

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 Myth: A scheme with higher NAV has reached its peal

 Fact: Due to the widespread assumption that mutual funds are equivalent to shares, this
error occurs frequently. The NAV of a scheme is just a reflection of the market value
of the underlying shares held by the fund on any given day, and this needs to be kept in
mind. In accordance with the investment plan of the mutual fund, shares held by mutual
funds may be purchased or sold anytime the fund manager deems it appropriate (Buy-
Hold-Sell). The fund manager has the option to sell a stock if he believes it has peaked.
The fund is not always pricey if its NAV is high. In actuality, a high NAV shows that
the strategy has performed well over time.
 Myth: Buying top rated Mutual Funds ensures better returns
 Fact: Mutual fund ratings are dynamic and dependent on the scheme's performance over
time, which is susceptible to market changes in and of itself. Therefore, a mutual fund
scheme that may be at the top of the rating chart right now may not always keep that
ranking in the future. However, a top-rated fund is a fantastic place to start when
narrowing down a potential investment plan (although past performance does not
necessarily guarantee better returns in future). When deciding whether to stay involved
or to sell out of a mutual fund scheme, performance must be tracked in relation to the
scheme's benchmark.

2.8 Advantages of investing in Mutual Funds

 Professional Management: Investors might not have the time, knowledge, or money
necessary to perform their own research and buy certain stocks or bonds. Professional
full-time money managers who have the knowledge, experience, and resources to
actively buy, sell, and monitor investments are in charge of running a mutual fund. To
achieve the goals of the plan, a fund manager regularly examines investments and
rebalances the portfolio as necessary. One of the most significant benefits of a mutual
fund is the portfolio management provided by qualified fund managers.
 Risk Diversification: Purchasing shares in a mutual fund is a simple approach to spread
your risk by investing in a variety of assets and securities, such as gold, debt, and
equities, rather than putting all of your eggs in one basket. When a mutual fund scheme's
underlying security faces market challenges, this is advantageous. By diversifying, one
asset class's risk is offset by the risk of the other asset classes. Other investments in the
portfolio might not be affected and might even improve in value if the value of one
investment falls. In other words, even if one element of your portfolio experiences

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volatility, you won't lose the entire value of your investment. One of the most notable
benefits of investing in mutual funds is risk diversification.
 Affordability and convenience: Directly purchasing all of the individual securities
held by a single mutual fund could be more expensive for many investors. In contrast,
most mutual funds have lower initial minimum investments.
 Liquidity: On any business day (when the stock markets and/or banks are open), you
can simply redeem (liquidate) units of open ended mutual fund schemes to satisfy your
financial demands, giving you quick access to your money. Depending on the kind of
scheme, the redemption amount is paid out the following business day in the case of
liquid funds and overnight funds, and is credited to your bank account within one day
to three or four days of redemption. Please take notice, nevertheless, that close-ended
mutual fund schemes only allow redemption of units at maturity. The same is true for
ELSS units, which have a 3-year lock-in term and can only be liquidated after that.
 Low Cost: The cheap cost of mutual funds is a significant benefit. The low expense
ratio of mutual fund schemes is a result of significant economies of scale. A scheme's
annual fund running costs are shown as a proportion of the fund's daily net assets in an
expense ratio. Administration, management, advertising-related costs, etc. are
examples of operating expenses for a scheme. Regulation 52 of the SEBI Mutual Fund
Regulations, 1996 specifies the upper limitations for expenditure ratio for various types
of schemes.
 Well Regulated: Under the SEBI (Mutual Funds) Regulations, 1996, Mutual Funds
are governed by the capital markets regulator, Securities and Exchange Board of India
(SEBI). In order to safeguard investors, provide transparency, and adhere to fair
valuation principles, SEBI has established strict rules and regulations.
 Tax Benefits: Section 80C of the Income Tax Act of 1961 allows for a tax credit on
investments in ELSS up to 1,50,000 rupees. When kept for a longer period of time,
mutual fund investments are tax efficient.

2.9 Limitations of Investing in Mutual Funds

 High Cost Associated: In India, there are several mutual funds that are very expensive.
If you leave before the scheduled time, you will be charged an exit fee. Before the
allocated period, you are not allowed to withdraw the funds. Investors also cover the
salaries of the fund managers and market analysts in addition to the operating costs of
the fund. Total fund administration expenses should be one of your first considerations

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when choosing a mutual fund. Higher management fees are not always a result of better
fund performance.
 Diversification of Funds: While diversifying your investments can help you avoid
losses, it can also work against you by limiting the amount of money you can earn in
profits. If you don't make a sizable investment in some areas, which offer large earnings,
you risk losing a lot of money. By averaging your loss risks and rewards, diversification
might reduce your gains. It is advised that you avoid purchasing a large number of
mutual funds at once as a result.
 Fluctuating Returns: "Mutual Fund Investments are susceptible to market risks," is
probably a phrase you have already heard many times at the end of TV commercials.
Mutual fund returns are not guaranteed because they are impacted by market changes.
Investors must therefore be informed of the risk profile of the fund before placing an
investment.

INTRODUCTION TO SBI MUTUAL FUNDS

2.10 About SBI Mutual Funds

SBI Funds Management Ltd. (SBIFML), with its 30 years of extensive fund management
experience, advances its expertise by continually providing value to its investors. They can
trace their roots back to the State Bank of India (SBI), which is the biggest bank in India. It is a
joint venture between SBI and one of the top investment management firms in the world,
AMUNDI (France). SBI and AMUNDI Asset Management agreed into a shareholder
agreement in this regard on April 13, 2011. As a result, SBI presently owns 63% of SBIFMPL,
while AMUNDI Asset Management owns 37% of it through a fully owned subsidiary called
Amundi India Holding. This 37% ownership was originally owned by Societe Generale Asset
Management S.A. ("SGAM"), a Societe Generale S.A. ("SG") subsidiary, and was transferred
to Amundi in June 2011 with the proper clearance of SEBI in accordance with the SEBI
(Mutual Funds) Regulations, 1996. AMUNDI Asset Management will offer the Company
strategic assistance. By incorporating worldwide best practises and upholding international
standards, SBI and AMUNDI Asset Management will work together to establish the Company
as an asset management firm of renown on a global scale.

Vision: "To be the most trusted and respected Asset Manager."

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2.11 History of SBI Mutual Funds

The Mutual Fund industry in India initially started in 1963 with the Unit Trust of India (UTI)
as a Government of India and the Reserve Bank of India drive. Sent off in 1987, SBI Mutual
Fund turned into the first non-UTI common asset in quite a while. In July 2004, State Bank of
India chose to strip 37% of its holding in its common asset arm, SBI Funds Management Pvt
Ltd, to Societe Generale Asset Management, for a sum in overabundance of $35 million.

Post-divestment, State Bank of India's stake in the shared asset arm boiled down to 67%. In
May 2011, Amundi got 37% stake in SBI Funds Management, that was held by Societe
Generale Asset Management, as a component of a worldwide move to consolidate its resource
the board business with Crédit Agricole. SBI Funds Management Private Limited (SBIFMPL)
has been selected as the Asset Management Company of the SBI Mutual Fund. SBIFMPL is a
joint endeavor between the State Bank of India, an Indian public sector bank, and Amundi, an
European resource the board organization. As of September, 2019, the asset house professes to
serve 5,809,315 special financial backers through roughly 212 branches PAN India. As of
September 2021, the all out AUM remains at Rs.579318.29 crores.

2.12 Key Milestones

 1987 – Establishment of SBI Mutual Fund
 1991 – Launch of SBI Magnum Equity Fund
 1999 – Launch of sector funds, India's first contra fund: SBI Contra Fund
 2004 – Joint Venture with Societe General Asset Management
 2006 – Became the first bank-sponsored fund to launch an offshore fund – SBI Resurgent
India Opportunities Fund
 2011 – Stake Transfer from SGAM to Amundi Asset Management
 2013 – Acquisition of Daiwa Mutual Fund, part of the Tokyo-based Daiwa Securities
Group
 2013 – Launch of SBI Fund Guru, an investor education initiative
 2015 – Employees' Provident Fund Organisation decided to invest in the equity market for
the first time by investing Rs. 5,000 crore in the Nifty and Sensex ETFs (Exchange Traded
Fund) of SBI Mutual Fund

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 2018 – First AMC in India to launch an Environment, Social and Governance (ESG) fund
vis Magnum Equity ESG Fund
 2018 – Signatory to the United Nations Principles for Responsible Investment (UN-PRI)

2.13 Fund House Expertise of SBI Mutual Funds

2.13.1 Investment Expertise
The brightest minds, Fund Managers have developed the best investment plans. Fund managers
and analysts prepare for new tough situations with a keen eye to watch, evaluate, and interpret
market movements. Their strength is in their capacity to identify the development potential of
Indian securities, manage intricate portfolios, and be driven to provide the best outcomes.
Their committed team assures risk reduction while safeguarding the interests of their investors
through superior security selection, incisive research, thorough coverage, including internal
predictions, active monitoring, and regular tracking.
2.13.2 Investment Philosophy: Growth through Innovation
Their knowledgeable team of seasoned and market-savvy analysts creates thorough analytical
and educational studies on various industries and identifies companies that have the potential
to perform well in the future. Innovation is the process of transforming concepts into tangible
strategies for long-term development. Through their cutting-edge products, excellent stock
selection, and active portfolio management, they constantly strive to offer our customers
chances for progressive growth. In light of this, they also improve and optimise stock selection
and asset allocation using both internal and external research.
2.13.3 Optimal Risk Management
Any organisation must have a risk management strategy in place. Each of their tactics is
continually under close review as one of the main emphasis areas. Regulatory bodies all across
the world are putting more and more pressure on institutions to improve risk measurement and
management. At SBI Funds Management, their enterprise-wide approach to risk management
is implemented with a committed, knowledgeable, and skilled risk management team that
covers key organisational activities.
2.13.4 Investment Objective: Setting Benchmarks Time And Again. For Our Investors

Their purpose is to attempt to beat our benchmarks through thoroughly studied investing in
Indian equities. This is accomplished by the application of an active management approach
based on fundamental analysis, which results in the creation of a portfolio. It may be blended,

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large cap, mid cap, or sector-specific, with the goal of maximising the growth potential of
Indian stocks.

2.14. SWOT Analysis of SBI Mutual Funds

A form of fundamental assessment of a company's health that looks at its strengths,
weaknesses, commercial opportunities, and any threats or risks

1. Strengths

SBI Mutual Fund is sponsored by the State Bank of India, the nation's largest lender
with more than 200 years of history and a vast network of more than 13000 branches.

 Wide Reach: Association banks are defeated by SBI Mutual Fund's powerful
distribution network.State Bank of India's 13000 branches, which outnumber
the 2000 branches of associate banks, and the distribution of SBI mutual fund
products provide those funds' products a significant presence.
 Services: SBI Mutual Funds is a financial product where services play a major
role offering common services through its branches, which are spread in 445
cities
 Brand Image: Unlike some of its rivals (like HSBC), has a multi-brand
approach. The company sells products under a variety of well-known brand
names, which enables it to appeal to a wide range of market sectors.
 Distribution Channel Strategy: SBI is always enhancing how its products are
distributed. Its connectivity via the Internet and online platforms provides a
combination of outstanding development possibilities. Additionally, its retail
direct business expanded by 27% in 2002 and 15% in 2003.
 Large pool of installed capacities.
 Experienced managers for large number of generics
 Large pool of skilled and knowledgeable manpower.

2. Weakness

 Less publicity: SBI Mutual Fund is primarily a public sector organisation. Fund
uses a smaller budget for advertising and doesn't use brand advocates, thus it
doesn't receive much attention.

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 Being an asset management business, it is unable to quickly alter the market or

weaken the power of the competition.
 Less aggressive
 Comparatively less reach to the investors

3. Opportunities

 The strong brand recognition of State Bank of India aids SBI mutual fund in
expanding its market share. Additionally, there is a chance that SBI mutual fund
will be ranked among the top three AMCs in the nation because it has the ability
to get to the top.
 Governmental policies are becoming more liberal within the mutual fund sector

4. Threats

 Regulatory Framework: Due to the constantly evolving regulatory framework

in India, the mutual fund sector faces significant threats to both its inflow of
new investors and sustainable growth in the absence of entry loads, making it
exceedingly challenging to manage the assets management industry.
 Increased Competition: Because of the fierce rivalry from so many local
competitors, current marketers are having trouble. Multinational brands will
also soon enter the market, despite the fact that they are not yet well-known.
Approximately 60–70% of the total revenue is spent on management and
services.
 Lack of sufficient branch-offices for speedy delivery of services
 Hedge Funds: Mutual funds are also at risk because of what is frequently
referred to as "hot money," which has a reputation for crashing the markets.
Whether there is a crash in the stock, bond, or currency markets, a hedge fund
typically plays a significant role.
 Inflation: War and natural disasters like the Tsunami had an impact on the
Indian stock market crash, which had a direct imct on mutual funds.

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2.15 Products of SBI Mutual Funds

2.15.1 Snapshot of Equity Funds

Funds Category

SBI Blue Chip Fund Equity – Large Cap

SBI Magnum Equity ESG Fund Equity - – Thematic Fund

SBI Flexi Cap Fund Equity – Flexi Cap Fund

SBI Multi Cap Fund Equity – Multi Cap Fund

SBI Contra Fund Equity – Contra Fund

SBI Large & Midcap Fund Equity – Large & Mid Cap Fund

SBI Focused Equity Fund Equity – Focused Fund

SBI Magnum Midcap Fund Equity – Mid Cap Fund

SBI Magnum Global Fund Equity – Thematic Fund

SBI Small Cap Fund Equity – Equity Small Cap

SBI Long Term Equity Fund Equity – ELSS

SBI Healthcare Opportunities Fund Equity - Sectoral Fund

SBI Banking and Financial Services Equity - Sectoral Fund

SBI PSU Fund Equity - Sectoral Fund

SBI Magnum Comma Fund Equity - Sectoral Fund

SBI Infrastructure Fund Equity - Sectoral Fund

SBI Consumption Opportunities Fund Equity – Thematic

SBI Technology Opportunities Fund Equity – Sectoral Fund

SBI Equity Minimum Variance Fund Equity – Thematic

SBI Gold Fund Fund of Funds

SBI International Access- US Equity FoF Fund of Funds

28
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SBI Nifty Index Fund Index Funds

2.15.2 Snapshot of Hybrid Funds & Solution Oriented Schemes

Funds Category

SBI Equity Hybrid Fund Hybrid – Aggressive Hybrid Fund

SBI Conservative Hybrid Fund Hybrid – Conservative Hybrid Fund

SBI Multi Asset Allocation Fund Hybrid – Multi Asset Allocation Fund

SBI Magnum Children’s Benefit Fund- Solution Oriented Scheme – Children’s Fund
Savings Plan

SBI Equity Savings Fund Hybrid – Equity Savings Fund

SBI Arbitrage Opportunities Fund Hybrid – Arbitrage Fund

SBI Balanced Advantage Fund Hybrid – Balanced Advantage Fund

SBI Magnum Children’s Benefit Fund- Solutions Oriented Schemes – Children’s

Investment Plan Fund

SBI Retirement Benefit Fund – Aggressive Solutions Oriented Schemes – Retirement

Plan Fund

SBI Retirement Benefit Fund - Aggressive Solutions Oriented Schemes – Retirement

Hybrid Plan Fund

SBI Retirement Benefit Fund – Conservative Solutions Oriented Schemes – Retirement

Hybrid Plan Fund

SBI Retirement Benefit Fund – Conservative Solutions Oriented Schemes – Retirement

Plan Fund

2.15.3 Snapshot of Debt Funds

Funds Category

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SBI Magnum Gilt Fund Debt – Gilt Fund

SBI Magnum Income Fund Debt – Medium to Long Duration Fund

SBI Dynamic Bond Fund Debt – Dynamic Bond Fund

SBI Corporate Bond Fund Debt – Corporate Bond Fund

SBI Credit Risk Fund Debt – Credit Risk Fund

SBI Magnum Medium Duration Fund Debt – Medium Duration Fund

SBI Short Term Debt Fund Debt – Short Duration Fund

SBI Magnum Constant Maturity Fund Debt –Gilt Fund with 10 Year Constant
Duration

SBI Magnum Low Duration Fund Debt – Low Duration Fund

SBI Savings Fund Debt – Money Market Fund

SBI Banking and PSU Fund Debt – Banking and PSU Fund

SBI Liquid Fund Debt – Liquid Fund

SBI Magnum Ultra Short Duration Fund Debt – Ultra Short Duration Fund

SBI Floating Rate Debt Fund Debt – Floater Fund

SBI Overnight Fund Debt – Overnight Fund

2.16 Retirement Planning

A steady income after retirement is something that may be planned for. Setting aside money
and making investments with that objective in mind are required. Depending on your end
objective, income, and age, you should adjust your retirement plan accordingly. It can be
expensive to get older. While unnecessary spending may go down, medical costs are only going
to go up. Stress and worry can result from not having enough money to cover future obligations,
especially when inflation is taken into account. To guarantee financial stability in your later
years without depending on others, you should have a retirement investing strategy.

30
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2.17 Top Reasons to have Retirement Plan

 Lack of social retirement benefit: Growing older can be pricey. Medical expenditures
will increase even while wasteful spending may decrease. Not having enough money
to pay future responsibilities can cause stress and worry, especially when inflation is
taken into account. You should have a retirement investing strategy in place to provide
financial security in your later years without relying on others.
 Financial Independence: Older Indians have relied on their offspring for retirement
support for years. Young people are becoming more independent recently. They
frequently can't financially support their parents. Even if they can, being in charge of
your own affairs will provide you more freedom to live your life how you choose
because no one else will be holding you accountable.
 Rising Cost: You will need to take rising prices into consideration as an investor. When
preparing for retirement, inflation is an essential factor to take into account. You could
have to lower your standard of living if you are unable to keep up with escalating
expenses.
 Medical Emergencies: The expense of healthcare is essential to comprehending the
significance of retirement planning. Healthcare inflation is increasing at a startlingly
rapid rate, while retail costs are steadily rising. Other financial objectives might be
negotiated, but health cannot be.

2.18 Retirement Schemes of SBI Mutual Funds

1. SBI Retirement Benefit Fund Conservative Hybrid Plan: A mutual fund that
focuses on finding solutions, SBI Retirement Benefit Fund Conservative Hybrid Plan,
was introduced by SBI Mutual Funds. Investors were given access to this plan on June
29, 1987. The SBI Retirement Benefit Fund Conservative Hybrid Plan's current fund
manager is Dinesh Ahuja. The fund's Asset Under Management (AUM) is currently
$6,43,285 Cr, and its most recent NAV as of September 9th, 2022 is Rs.12.02.High
Risk is assigned to the SBI Retirement Benefit Fund Conservative Hybrid Plan. Rs. 500
is the mandated minimum SIP. A lump sum investment of Rs. 5000 is required.
2. SBI Retirement Benefit Fund Aggressive Plan: SBI Mutual Funds introduced the
SBI Retirement Benefit Fund Aggressive Plan, a mutual fund that focuses on finding
solutions. Investors were given access to this plan on June 29, 1987. SBI Retirement
Benefit Fund Aggressive Plan's current fund manager is Dinesh Ahuja. The fund's Asset

31
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Under Management (AUM) is currently Rs. 6,43,285 Cr. and its most recent NAV as
of September 9th, 2022 is Rs. 14.38.Very High Risk is assigned to the SBI Retirement
Benefit Fund Aggressive Plan. Rs. 500 is the mandated minimum SIP. A lump sum
investment of Rs. 5000 is required.
3. SBI Retirement Benefit Fund Aggressive Hybrid Plan: One of SBI Mutual Funds'
solution-focused Mutual Funds is the SBI Retirement Benefit Fund Aggressive Hybrid
Plan. On June 29, 1987, investors could participate in this scheme. For the time being,
Dinesh Ahuja is in charge of the aggressive hybrid plan of the SBI Retirement Benefit
Fund. As of September 9th, 2022, the fund's most recent NAV was Rs. 13.75, and its
Asset Under Management (AUM) totals $6,43,285 Cr.The aggressive hybrid plan
offered by SBI Retirement Benefit Fund is classified as very high risk.There is a 500
rupee minimum SIP. The 5000 rupee threshold for lump sum investment.
4. SBI Retirement Benefit Fund Conservative Plan: SBI Mutual Funds introduced the
conservative SBI Retirement Benefit Fund, a mutual fund that focuses on finding
solutions. On June 29, 1987, investors were given access to this plan. The SBI
Retirement Benefit Fund Conservative Plan is currently managed by Dinesh Ahuja. The
fund's Asset Under Management (AUM) is currently $6,43,285 Cr, and its most recent
NAV as of September 9th, 2022 is Rs. 11.32. The SBI Retirement Benefit Fund
Conservative Plan has a relatively High Risk rating. The minimum SIP is set at Rs. 500.
The minimum lump sum investment is Rs. 5000.

32
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3. REVIEW OF LITERATURE
`

 Sivakumar et al (2010) evaluates the performance of mutual funds players in India

based on their resource mobilization during the past decade. The players are broadly
classified into private and public participants. The study revealed that there is
significant contribution by all the participants for the growth of the mutual fund industry
in India. At the same time, this study also found that the private participants play a
greater role in resource mobilization compared to those of public sector.

 Chawla D (2014) identifies the various attributes that investors consider important
while investing in mutual fund. There are two underlying factors of importance that are
extracted namely Credibility of the fund and Miscellaneous features of the fund. The
relationship of these factors with demographic variables is ascertained. The article
suggests recommendations for the mutual fund companies and suggestions for future
research.

 Rani M. et al (2012) investigates the performance of 29 open-ended, growth-oriented

equity schemes for the period from April 2005 to March 2011 (six years) of transition
economy. The study revealed that 14 out of 29 (48.28 percent) sample mutual fund
schemes had outperformed the benchmark return. The results also showed that some of
the schemes had underperformed, these schemes were facing the diversification
problem. In the study, the Sharpe ratio was positive for all schemes which showed that
funds were providing returns greater than risk free rate. Results of Jensen measure
revealed that 19 out of 29 (65.52 percent) schemes were showed positive alpha which
indicated superior performance of the schemes.

 Rathi P. et al (2014) has tried to review various studies on mutual funds. Various
studies on mutual funds in India and abroad are analyzed to find out the current
scenario, growth prospects, industry structure, challenges and performance of different
mutual fund during the period of 2000-2013 (July). It is found that there is huge growth
potential in semi urban and rural markets, mutual funds have not outperformed the
market, equity funds are more popular among investors.

33
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 Trivedi et al (2021) conducted a research based on retirement planning by the working

as well as the retired residents of Gandhinagar city in the Gujarat State of India. The
findings revealed that the working residents had some understanding about the concept
of retirement planning. Still they had no idea about how much to save. They could also
appreciate the benefits of investing in retirement plans at an early stage. However, very
few respondents had invested in the plans, which give a stable and continuous source
of income post retirement. Further, the retired residents relied mostly on pension and
interest income for their financial needs post retirement. It has been suggested that
through proper education campaigns, the working population can be covered under the
safety net of returns generated through investing in retirement plans at a younger age.

 Trivedi, et al (2020) reviews the existing literature on retirement planning and to

identify its significance. The paper reviewed the retirement theories like Role Theory,
Continuity Theory, Theory of Planned Behaviour and Life Cycle Hypothesis (LCH) to
provide the insight about the retirement intension, retirement planning behaviour and
the pre-retirement preparation. A thorough review of existing literature is carried out to
identify the key factors which lead towards retirement decision and involvement in
retirement planning. Finally, the gaps in the current literature were identified and
recommendations for future research are provided.

 Agrawal, D (2011) provides an overview of mutual fund activity in emerging markets.

It describes about their size and asset allocation. This paper is a process to analyze the
Indian Mutual Fund Industry pricing mechanism with empirical studies on its valuation.
It also analyzes data at both the fund-manager and fund-investor levels. The study
revealed that the performance is affected by the saving and investment habits of the
people and the second side the confidence and loyalty of the fund Manager and rewards
affects the performance of the MF industry in India.

34
`

 Muthappan , et al (2006) studies to know the perceptions of small investors who are
the most exploited lot in the Indian capital market by the tall claims of mutual fund
managers as dependable guardians of small investors on the one hand and the role of
regulators on the other. This paper has examined the problems faced by the investors
of mutual funds, factors discouraging investment in mutual funds, opinion of
respondents, the measures for the development of mutual funds and the level of
fulfillment of the objectives of the investors. It offers concrete suggestions for the
elimination of the problems of the mutual fund investors.

 Sandhya, (2021) focuses on the entire concepts of mutual funds industry in India. This
study was conducted to analyse and compare the performance of different types of
mutual funds in India and concluded that equity funds outperform income funds. This
study further concludes that equity fund managers possess significant market timing
ability and institutions funds manager are able to time their investments, but brokers
operated funds did not show market timing ability. Further, it has been found
empirically that fund managers are able to time their investments with the conditions in
the market, and possesses significant timing ability.

 Naik, et al (2020) investigated the role of investment pattern and preferences of

investors behind investing in mutual fund. The analysis and advice presented in this
paper is based on market research on the saving and investment practices of the
investors and preferences of the investors for investment in Mutual Funds. The findings
of the study mentioned in the paper will help to know about the investors’ Preferences
in Mutual Fund means as to whether 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 Ivestment
Plan or One time Plan).

 Dave et al (2022) measures the performance of selected public sector and private sector
mutual fund companies and their schemes. For this Net Assets Value and their %return

35
`

has been used. Data used for the study pertains from 2016-2017 to 2020-2021and has
been collected from the mutual fund website and various Journals. The study revealed
that HDFC Mutual Fund has better performance as compared to SBI Mutual Fund.

 Mondal (2011) observed that Mutual funds serve as a key financial intermediary to
playing a crucial role in converting the investors’ savings to capital market, thus
establishing a link between savings and the capital market. Small investors are unable
to diversity their investment because of their limited funds. Mutual funds offer a way
for these investors to diversify their risk. The mutual fund industry in India came into
being in 1963 with the setting up of the Unit Trust of India (UTI). The industry
registered a major milestone in 1993 when the private sector comes in the mutual fund
sector. But every investment has some risk. Here in my project I tried to assess a
comparative analysis of risk associated with SBI and ICICI Prudential fund, with the
use of Sharpe ratio, Expense ratio, Beta, Trey nor Ratio and Standard deviation.

 Nicolas P. B. Bollen (2005) estimated parameters of standard stock selection and

market timing models using daily mutual fund returns and quarterly measurement
periods. These results suggest that superior performance is a short lived phenomenon
that is observable only when funds are evaluated several times a year. A survey
conducted by ET Bureau (2015) observed that it is a big relief to mutual fund agents
and distributors that they will not have to pay tax on services provided by them and the
liability in this regard would entirely be on the fund houses.

 Pandow, B. (2017) studies the Indian mutual industry is succeeded in achieving its
goal? Though, the mutual fund industry has recorded significant progress on all fronts
yet it has not been able to utilize its potential fully. On almost on all parameters it is far
behind the developed economics and even most of the emerging economics of the
world. The industry is confronted with number of challenges like low penetration ratio,
lack of product differentiation, lack of investor awareness and ability to communicate
value to customers, lack of interest of retail investors towards mutual funds and

36
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evolving nature of the industry. Based on the analysis the study suggests that if the
industry has to utilize its potential fully, it has to address these challenges.

 Saini et al (2011) analyses the mutual fund investments in relation to investor’s

behavior. Investors’ opinion and perception has been studied relating to various issues
like type of mutual fund scheme, main objective behind investing in mutual fund
scheme, role of financial advisors and brokers, investors’ opinion relating to factors that
attract them to invest in mutual funds, sources of information, deficiencies in the
services provided by the mutual fund managers, challenges before the Indian mutual
fund industry etc.

 Anvesan (2008) aims to bring out the recent trends in mutual fund industry in India.
The study brings out that the mutual fund investors in India at present have as many as
609 schemes with variety of features such as dividend, growth, cumulative interest
income, monthly income plans, sectoral plans, equity linked schemes, money market
schemes, etc. The result says both open-end and close-end schemes have registered
excellent growth in fund mobilization, but currently the former category of schemes is
more popular among the investors. Portfolio-wise analysis has brought that income
schemes have an edge over growth schemes in terms of assets under management.
Moreover UTI’s share in total assets under management has come down to 11.8 percent
in 2006 from 82.5 percent in 1998.

37
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4. RESEARCH METHODOLOGY
`

4.1. Research Objective

 To study the customer’s investment pattern.
 To study the various options regarding retirement planning.
 To identify the reasons for not investing in retirement schemes.
 To identify the factors considered while investing in mutual funds.
 To analyse the customer’s involvement in SBI Retirement Schemes and their
satisfaction level.

4.2 Hypothesis Testing

Hypothesis 1

H0: There is no significant relation between the gender of the respondents and their Investment
Experience

H1: There is significant relation between the gender of the respondents and their Investment
Experience

Hypothesis 2
H0: There is no significant relation between age group of the respondents and their reason for
not investing in Mutual Funds.
H1: There is significant relation between age group of the respondents and their reason for not
investing in Mutual Funds.
Hypothesis 3
H0: There is no significant relation between the annual income and percentage of income
invested in SBI Mutual Funds Retirement Schemes.
H1: There is significant relation between the annual income and percentage of income invested
in SBI Mutual Funds Retirement Schemes.
Hypothesis 4

H0: There is no significant relation between occupation and type of Mutual Fund Scheme they
prefer.

H1: There is significant relation between occupation and type of Mutual Fund Scheme they
prefer.

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Hypothesis 5
H0: There is no significant relation between the age group and 1 st preferred Investment
Instrument
H1: There is significant relation between the age group and 1st preferred Investment Instrument

4.3 Research Design

Quantitative and exploratory research design is used in this study. Exploratory design is used
here to have the proper understanding about the SBI Mutual Funds for retirement opinion of
the respondents. Also the research design is cross sectional in nature as the responses are
collected once and at a single point of time.

4.4. Source of Data

This research study is based on the collection of primary data. Primary Data is the original
source from which the researcher directly collects data. The objective of this study has been
accomplished with the help of primary data collected from 100 responses. Questionnaire was
created on google form and link has been sent to the respondents.

4.5 Population of the study

Population is defined as the whole group that the research focuses on. For this research,
Population of study is each and every individual.

4.6 Sampling Method and Sampling Technique

Sampling refers to the method, criteria, rules and procedures used to select subject’s further
study. The researcher should have a good understanding of the research topic and related on
field knowledge. Sampling can be defined as the process by which relatively small numbers of
individuals, objects or events is chosen and analysed for further findings from population of
study.

When field studies are under undertaken in practical life, consideration of time, cost and some
other factors almost invariably lead to selection of respondents. The selected respondents
constitute a sample and the selection process is called sampling technique. Non probability

39
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judgmental is used in this study for getting better understanding of Role of SBI Mutual Funds
in Retirement Planning.

4.7 Statistical tool for Data Analysis

The most convincing and appealing ways in which data may be presented are tables, charts and
pictures. Pictorial representation helps in quick understanding of the data. Charts have greater
memorizing effect as the impressions created by them last much longer than those created by
the figure. A chart can take the shape of either a diagram or a graph. The data are presented
through different types of diagram are as followed with the help of Statistical Package for the
Social Science (SPSS)v28 Evaluation 14-days Trial Version.

4.8 Limitation of the study

a. The sample size is restricted to 100 respondents due to time constraints and unwillingness
of half of the respondents to provide information for the study.
b. This research does not study the perceptions of individuals towards Retirement Planning
outside Ahmedabad.
c. This research doesn’t study any specific group of people belonging to a particular occupation
or profession.

4.9 Scope of Further Study

Under the same topic of project, a further study can be carried out with more sample size or
with selected categories of respondents or with more statistical tools or more questions can be
included in questionnaire.

40
`

5. DATA ANALYSIS
`

5.1 Tables and Graphs

Gender
Frequency Percent
Male 75 75.0
Female 25 25.0
Total 100 100.0

Gender

75

25

FREQUENCY

Male Female

Interpretation: In this survey of 100 people 75 responses which accounts to 75% were from
male and 25 responses which accounts to 25% were female.

41
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Age Group
Frequency Percent
Less than 20 Years 1 1.0
20 to 30 Years 22 22.0
30 to 40 Years 59 59.0
40 to 50 Years 13 13.0
Above 50 Years 5 5.0
Total 100 100.0

AGE GROUP
Less than 20 Years 20 to 30 Years 30 to 40 Years
40 to 50 Years Above 50 Years

5%1%
13% 22%

59%

Age Group

Interpretation: Approximately 60% of the responses were from the age group 30 to 40 years.
22 responses were from the age group 20 to 30 years. Very few responses were from the age
group of less than 20 years and age group of above 50 years.

42
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Occupation
Frequency Percent
Employed 48 48.0
Business 47 47.0
Retired 4 4.0
Other 1 1.0
Total 100 100.0

Occupation

Other

Retired

Business

Employed

0 10 20 30 40 50 60

Interpretation: Nearly same frequency of the responses were from the employed and business
person. Only 4 responses were from the retired person whereas 1 response was from the others
who was a student.

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Income Annually
Frequency Percent
Less than 10 Lakhs 18 18.0
10 to 30 lakhs 54 54.0
30 to 50 lakhs 23 23.0
50 to 70 lakhs 3 3.0
Above 70 lakhs 2 2.0
Total 100 100.0

Annual Income
60

50

40

30

20

10

0
1

Less than 10 Lakhs 10 to 30 lakhs 30 to 50 lakhs

50 to 70 lakhs Above 70 lakhs

Interpretation: Nearly 50% of the responses were from the people who have their annual
income between 10 to 30 lakhs. Only 2 people from 100 have the income above 70 lakhs and
3 people have income between 50 to 70 lakhs.

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Are you planning your retirement

Frequency Percent
No 10 10.0
Yes 71 71.0
Maybe 19 19.0
Total 100 100.0

Are you planning your Retirement

No
Maybe
10%
19%

Yes
71%

No Yes Maybe

Interpretation: Out of 100 people 71 % people were sure to plan their retirement whereas
19% were still unsure about their retirement planning. 10% were determined to not plan their
retirement.

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From which age are you planning your retirement

Frequency Percent
25 to 30 Years 22 22.0
30 to 35 Years 41 41.0
35 to 40 Years 21 21.0
40 to 45 Years 6 6.0
None 10 10.0
Total 100 100.0

Age from which you are planning your

retirement
45
40 41
35
30
25
22 21
20
15
10 10
5 6
0
25 to 30 Years 30 to 35 Years 35 to 40 Years 40 to 45 Years None

Interpretation: Approximately 40% which accounts to 40 people starts planning their

retirement from the age between 30 to 35 years where as 6 people start to plan their retirement
from the age between 40 to 45 years.

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Do you have Investment Experience

Frequency Percent
No 8 8.0
Yes 92 92.0
Total 100 100.0

Do you have Investment Experience

92

FREQUENCY

0 20 40 60 80 100

Yes No

Interpretation: More than 90% of people out of 100 have investment experience which clearly
indicates the increasing trend of investment.

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What is your Investment Experience

Frequency Percent
Beginners 4 4.0
Moderate 35 35.0
Knowledgeable 43 43.0
Experienced 10 10.0
None 8 8.0
Total 100 100.0

What is your Investment Experience?

8% 4%
10%
35%

43%

Beginners Moderate Knowledgeable Experienced None

Interpretation: Only 4 people out of 100 were beginners for investing whereas 43 people were
knowledgeable and 8 people had no investment experience.

48
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Top 3 Investment Purpose 1st Preference

Frequency Percent
Wealth Creation 24 24.0
Tax Savings 40 40.0
To earn steady and 30 30.0
additional source of
income
Meet Financial Goals 5 5.0
Retirement Planning 1 1.0
Total 100 100.0

Top 3 Investment Purpose 1st

Preference
RETIREMENT PLANNING 1

MEET FINANCIAL GOALS 5

TO EARN STEADY AND ADDITIONAL SOURCE

30
OF INCOME

TAX SAVINGS 40

WEALTH CREATION 24

0 5 10 15 20 25 30 35 40 45

Interpretation: Out of 100 people, most important investment purpose was tax savings which
accounted to 40% whereas for 30% people the most important investment purpose was to earn
steady and additional source of income. Only for 1 person most important investment purpose
was retirement planning.

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Top 3 Investment Purpose 2nd Preference

Frequency Percent
Tax Savings 4 4.0
To earn steady and additional 41 41.0
source of income
Meet Financial Goals 37 37.0
Retirement Planning 15 15.0
To keep funds safe and secure 1 1.0
Total 98 98.0
System 2 2.0
Total 100 100.0

Top 3 Investment Purpose 2nd

Preference
60
41 37
40
15
20
4 1
0
1

Tax Savings
To earn steady and additional source of income
Meet Financial Goals
Retirement Planning
To keep funds safe and secure

Interpretation: For 41 people, 2nd prefernece for investment purpose is t to earn steady and
additional source of income whereas for 37 people 2nd prefernece for investment purpose is to
Meet financial goals. For 15 people, 2nd prefernece for investment purpose is retirement
planning.

50
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Top 3 Investment Purpose 3rd Preference

Frequency Percent
To earn steady and 2 2.0
additional source of income
Meet Financial Goals 23 23.0
Retirement Planning 36 36.0
To keep funds safe and 35 35.0
secure
Total 96 96.0
Missing 4 4.0
Total 100 100.0

Top 3 Investment Purpose 3rd

Preference

To keep funds safe and secure

Retirement Planning

Meet Financial Goals

To earn steady and additional source of
income
Tax Savings

0 5 10 15 20 25 30 35 40 45

Interpretation: For 36 people, 3rd prefernece for investment purpose is retirement planning
and for 35 people, 3rd prefernece for investment purpose is to keep funds safe and secure. And
for 23 people, 3rd prefernece for investment purpose is to meet financial goals.

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Top 3 Preferred Investment Instruments 1st

Preference
Frequency Percent
Banks 20 20.0
Post Office 40 40.0
Real Estate 25 25.0
Mutual Funds 11 11.0
Insurance 4 4.0
Total 100 100.0

Top 3 Investment Instruments 1st

Preference
45
40 40
35
30
25 25
20 20
15
10 11
5 4
0
Banks Post Office Real Estate Mutual Funds Insurance

Interpretation: 1st preference of investment instrument is Post Office for 40% of the people
and for 25% of the people is Real Estate. Only for 11% of the people most important investment
instruments is Mutual Funds.

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Top 3 Preferred Investment Instruments 2nd

Preference
Frequency Percent
Post Office 6 6.0
Real Estate 29 29.0
Mutual Funds 35 35.0
Insurance 17 17.0
Govt. Securities 10 10.0
Equities 3 3.0
Total 100 100.0

Top 3 Investment Instruments 2nd

Preference
40
35
30
25
20
15
10
5
0
Frequency

Post Office Real Estate Mutual Funds Insurance Govt. Securities Equities

Interpretation: 35% of the people have Mutual Funds as the 2nd preferred investment
Instrument whereas 29% of the people have Real Estate as the 2nd preferred investment
Instrument. 6% of the people have Post office as the 2nd preferred investment Instrument.

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Top 3 Preferred Investment Instruments

3rd Preference
Frequency Percent
Real Estate 4 4.0
Mutual Funds 13 13.0
Insurance 23 23.0
Govt. Insurance 25 25.0
Equities 15 15.0
Gold 18 18.0
Total 98 98.0
Missing 2 2.0
Total 100 100.0

Top 3 Investment Instruments

3rd Preference
Real Estate
Gold Mutual Funds

Equities
Insurance

Govt. Insurance

Real Estate Mutual Funds Insurance Govt. Insurance Equities Gold

Interpretation: 25% of the people of have Govt. Securities as the 3 rd preferred investment
Instruments whereas 23% of the people have Insurance as the 3 rd preferred investment
Instruments. 18% of the people have Gold as the 3rd preferred investment Instruments.

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Type of Mutual Fund Scheme you prefer

for Retirement
Frequency Percent
Equity 39 39.0
Debt 41 41.0
Hybrid 14 14.0
Solution Oriented 6 6.0
Total 100 100.0

Type of Mutual Fund Scheme you prefer

for Retirement

SOLUTION ORIENTED 6

HYBRID 14

DEBT 41

EQUITY 39

0 5 10 15 20 25 30 35 40 45

Interpretation: Approximately 40 % of the people prefer Debt type of the Mutual Fund
whereas 39% of the people prefer Equity type of Mutual Funds. Only 6% of the people prefer
Solution Oriented Mutual Funds.

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Mode of investment you prefer for

Retirement
Frequency Percent
One Time Investment 24 24.0
Systematic Investment 76 76.0
Plan
Total 100 100.0

Mode of Investment you prefer for

Retirement
80
70
60
50
40
30
20
10
0
1

One Time Investment Systematic Investment Plan

Interpretation: Out of 100 people, 76 people prefer Systematic Investment Plan whereas only
24 people prefer One time Investment.

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Reason for not investing in Mutual Funds

Frequency Percent
High expense ratio and 27 27.0
sales charge
Management Abuses 42 42.0
Tax Inefficiency 19 19.0
Poor trade execution 11 11.0
Other 1 1.0
Total 100 100.0

Chart Title
11% 1%
27%
19%

42%

High expense ratio and sales charge Management Abuses

Tax Inefficiency Poor trade execution
Other

Interpretation: 42 people say that Management abuses is the main reason for not investing in
Mutual Funds whereas 19 people say that Tax inefficiency is the main reason for not investing
in Mutual Funds .Only 1 person says other reason for not investing in Mutual Funds that is not
aware of the concept of Mutual Funds.

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Have you invested in SBIMF

Retirement Schemes
Frequency Percent
No 50 50.0
Yes 50 50.0
Total 100 100.0

Have you invested in SBIMF

Retirement Schemes ?

Yes 50

No 50

0 10 20 30 40 50

Frequency

Interpretation: From 100 people, 50 people have made their investment in SBI Mutual Funds
Retirement Schemes whereas 50 people have not made their investment in SBI Mutual Funds
Retirement Schemes.

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Where do you see yourself as SBIMF Retirement

Investor
Frequency Percent
Partial Knowledge of SBI 10 10.0
Retirement Schemes
Aware only of specific 28 28.0
schemes
Aware about all 12 12.0
retirement schemes
Total 50 50.0
Missing 50 50.0
Total 100 100.0

Where do you see yourself as SBIMF

Retirement Investor?

12
28
10

0 5 10 15 20 25 30

Aware about all retirement schemes

Aware only of specific schemes
Partial Knowledge of SBI Retirement Schemes

Interpretation: Out of 50 people who have invested in SBI Mutual Fund Retirement Scheme
only 12 people aware about all the retirement schemes of SBI Mutual Funds and 28 were aware
only of the scheme in which they have invested.

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In which SBIMF Retirement Scheme have you Invested

Frequency Percent
SBI Retirement Benefit Fund - 8 8.0
Aggressive Plan
SBI Retirement Benefit Fund - 28 28.0
Aggressive Hybrid Fund_
SBI Retirement Benefit Fund - 8 8.0
Conservative Hybrid Fund
SBI Retirement Benefit Fund - 6 6.0
Conservative Fund
Total 50 50.0
Missing 50 50.0
Total 100 100.0

WHICH SBIMF RETIREMENT SCHEME HAVE

SBI Retirement
Benefit Fund YOU
- INVESTED? SBI Retirement
Conserative Benefit Fund -
Fund Aggressive Plan
SBI Retirement 12% 16%
Benefit Fund -
Conserative
Hybrid Fund
16%

SBI Retirement
Benefit Fund -
Aggressive
Hybrid Fund_
56%

Interpretation: Out of 50 people who have invested in SBI Mutual Fund Retirement Scheme
28 people have invested in SBI Retirement Benefit Fund - Aggressive Hybrid Fund, 8 have
invested in SBI Retirement Benefit Fund - Aggressive Plan and SBI Retirement Benefit Fund
- Conservative Hybrid Fund

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Percentage of Income invested in SBIMF Retirement

Schemes
Frequency Percent
Up to 10% 11 11.0
10 to 20% 36 36.0
20 to 30% 1 1.0
More than 30% 2 2.0
Total 50 50.0
Missing 50 50.0
Total 100 100.0

% of Income invested in SBIMF

Retirement Schemes

MORE THAN 30% 2

20 TO 30% 1

10 TO 20% 36

UP TO 10% 11

0 5 10 15 20 25 30 35 40

Interpretation: Out of 50 people who have invested in SBI Mutual Fund Retirement Scheme,
36 people have invested 10 to 20% of their income in SBI Mutual Fund Retirement Scheme
and 11 people have invested up to 10% of their income in SBI Mutual Fund Retirement Scheme

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Reason for not investing in SBIMF Retirement

Schemes
Frequency Percent
Not Aware 7 7.0
High Risk 19 19.0
Low Returns 15 15.0
Lack of services 5 5.0
Currently not interested 7 7.0
Total 53 53.0
Missing 47 47.0
Total 100 100.0

Reason for not Investing in SBIMF

Retirement Schemes
20 19

15
15

10
7 7
5
5

0
1

Not Aware High Risk Low Returns Lack of services Currently not interested

Interpretation: Out of 50 people who have not invested in SBI Mutual Fund Retirement
Scheme, 19 people say that High Risk is the reason for not investing in SBI Mutual Fund
Retirement Scheme and 15 people say that low risk is the reason for not investing in SBI Mutual
Fund Retirement Scheme and 7 people say that they were not aware of SBI Mutual Fund
Retirement Schemes.

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6. DATA STATISTICS
 `

6.1 Hypothesis Testing

Hypothesis 1

H0: There is no significant relation between the gender of the respondents and their Investment
Experience.

H1: There is significant relation between the gender of the respondents and their Investment
Experience.

Test Output

Gender * Your Investment Experience Cross Tabulation

Your Investment Experience
Beginners Moderate Knowledgeable Experienced None Total
Gender Male 3 23 33 9 7 75
Female 1 12 10 1 1 25
Total 4 35 43 10 8 100

Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 3.546a 4 .471
Likelihood Ratio 3.792 4 .435
Linear-by-Linear 2.670 1 .102
Association
N of Valid Cases 100
a. 4 cells (40.0%) have expected count less than 5. The minimum
expected count is 1.00.

Test Interpretation
It can be seen from the test results that chi square calculated is more than chi square tabulated
[0.471>0.05]. Therefore we accept the null hypothesis and reject the alternative hypothesis. In
other words, we can conclude that irrespective of any gender of respondents, they have
investment experience.

Hypothesis 2
H0: There is no significant relation between age group of the respondents and their reason for
not investing in Mutual Funds.

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H1: There is significant relation between age group of the respondents and their reason for not
investing in Mutual Funds.

Test Output

Age Group * Reason for not Investing in Mutual Funds Cross tabulation
Reason for not Investing in Mutual Funds
High
expense
ratio and Manageme Tax Poor trade
sales charge nt Abuses Inefficiency execution Other Total
Age Less than 20 0 0 0 0 1 1
Group Years
20 to 30 Years 8 5 7 2 0 22
30 to 40 Years 15 30 8 6 0 59
40 to 50 Years 2 5 4 2 0 13
Above 50 2 2 0 1 0 5
Years
Total 27 42 19 11 1 100

Chi-Square Tests
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 110.235a 16 <.001
Likelihood Ratio 22.255 16 .135
Linear-by-Linear .140 1 .708
Association
N of Valid Cases 100
a. 18 cells (72.0%) have expected count less than 5. The
minimum expected count is .01.

Test Interpretation:
It can be seen from the test results that chi square calculated is less than chi square tabulated
[0.01 < 0.05]. Therefore we reject the null hypothesis and accept the alternative hypothesis. In
other words, we can see that respondents in age group of 30 to 40 years tend more to not invest
in Mutual Funds.

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Hypothesis 3
H0: There is no significant relation between the annual income and percentage of income
invested in SBI Mutual Funds Retirement Schemes.
H1: There is significant relation between the annual income and percentage of income invested
in SBI Mutual Funds Retirement Schemes.
Test output

Income Annually * Percentage of Income invested in SBIMF Retirement Schemes

Cross tabulation
Percentage of income invested in SBIMF Retirement
Schemes
Up to 10% 10 to 20% 20 to 30% More than 30% Total
Income Less than 10 2 3 1 1 7
Annually Lakhs
10 to 30 lakhs 8 20 0 1 29

30 to 50 lakhs 1 11 0 0 12

50 to 70 lakhs 0 1 0 0 1

Above 70 lakhs 0 1 0 0 1

Total 11 36 1 2 50

Chi-Square Tests
Asymp. Sign. (2-
Value df sided)
Pearson Chi-Square 12.309a 12 .421
Likelihood Ratio 10.697 12 .555
Linear-by-Linear Association .054 1 .816

N of Valid Cases 50

a. 16 cells (80.0%) have expected count less than 5. The minimum expected count
is .02.

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Test Interpretation

It can be seen from the test results that chi square calculated is more than chi square tabulated
[0.421>0.05]. Therefore we accept the null hypothesis and reject the alternative hypothesis. In
other words, we can conclude that irrespective of annual income of respondents, more people
in the income group of 10 to 30 lakhs invest 10 to 20% of their income.

Hypothesis 4
H0: There is no significant relation between occupation and type of Mutual Fund Scheme they
prefer.

H1: There is significant relation between occupation and type of Mutual Fund Scheme they
prefer.

Test output

Occupation * Type of Mutual Fund Scheme you prefer Cross

tabulation
Type of Mutual Fund Scheme you prefer
Equity Debt Hybrid Solution Oriented Total
Occupation Employed 21 21 4 2 48
Business 17 18 8 4 47
Retired 1 1 2 0 4
Other 0 1 0 0 1
Total 39 41 14 6 100

Chi-Square Tests
Asymp. Sign
Value df (2-sided)
Pearson Chi-Square 8.549a 9 .480
Likelihood Ratio 7.849 9 .549
Linear-by-Linear 2.301 1 .129
Association
N of Valid Cases 100
a. 10 cells (62.5%) have expected count less than 5. The
minimum expected count is .06.

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 `

Test Interpretation
It can be seen from the test results that chi square calculated is more than chi square tabulated
[0.480>0.05]. Therefore we accept the null hypothesis and reject the alternative hypothesis. In
other words, we can conclude that irrespective of occupation of respondents, people select the
type of Mutual Fund Schemes.

Hypothesis 5
H0: There is no significant relation between the age group and 1 st preferred Investment
Instrument
H1: There is significant relation between the age group and 1st preferred Investment Instrument

Test Output

Age Group * Top 3 Preferred Investment Instruments 1st Preference Cross tabulation
Top 3 Preferred Investment Instruments 1st Preference
Banks Post Office Real Estate Mutual Funds Insurance Total
Age Group Less than 0 1 0 0 0 1
20 Years
20 to 30 4 8 6 3 1 22
Years
30 to 40 8 27 15 7 2 59
Years
40 to 50 7 3 1 1 1 13
Years
Above 50 1 1 3 0 0 5
Years
Total 20 40 25 11 4 100

Chi-Square Tests
Asymp.
Value df Sign. (2-sided)
Pearson Chi-Square 17.830a 16 .334
Likelihood Ratio 16.752 16 .402
Linear-by-Linear .885 1 .347
Association
N of Valid Cases 100

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a. 18 cells (72.0%) have expected count less than 5. The

minimum expected count is .04.

Test Interpretation:
It can be seen from the test results that chi square calculated is more than chi square tabulated
[0.334>0.05]. Therefore we accept the null hypothesis and reject the alternative hypothesis. In
other words, we can conclude that irrespective of age group of respondents, people select their
investment instruments.

6.2 Reliability Test

Test Interpretation
Cronbach’s Alpha is measure of internal consistency, that is, how closely related a set of items
are as a group. It is considered to be measure of scale reliability. The alpha coefficient for the
seven items is .721, suggesting that the items have relatively high internal consistency. (Note
that reliability coefficient of 0.60 or higher is considered “acceptable”).

Reliability Statistics
Cronbach's Alpha N of Items
.721 7

Item Statistics
Mean Std. Deviation N
Factors you consider 3.2200 .67540 100
while investing in
Mutual Funds Returns
Factors you consider 3.6300 .93911 100
while investing in
Mutual Funds Tenure
Factors you consider 3.4500 .65713 100
while investing in
Mutual Funds Risk
Factors you consider 3.6300 .74745 100
while investing in
Mutual Funds Budget

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`

Factors you consider 3.7300 .85108 100

while investing in
Mutual Funds Tax
Factors you consider 3.7200 .81749 100
while investing in
Mutual Funds
Expense
Factors you consider 3.9200 .84900 100
while investing in
Mutual Funds AMC

Item-Total Statistics
Scale Mean Cronbach's Alpha
Factors you consider 22.0800 .688
while investing in
Mutual Funds Returns
Factors you consider 21.6700 .700
while investing in
Mutual Funds Tenure
Factors you consider 21.8500 .671
while investing in
Mutual Funds Risk
Factors you consider 21.6700 .720
while investing in
Mutual Funds Budget
Factors you consider 21.5700 .698
while investing in
Mutual Funds Tax
Factors you consider 21.5800 .665
while investing in
Mutual Funds
Expense
Factors you consider 21.3800 .675
while investing in
Mutual Funds AMC

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`

6.3 Factor Analysis Test

6.3.1 Descriptive Statistics

Test Interpretation
The first output from the analysis is a table of descriptive statistics for all the variables under
investigation. Typically, the mean, standard deviation and number of respondents (N) who
participated in the survey are given. Looking at the mean, one can conclude that AMC is the
most important factor considered while investing in Mutual Funds. It has the highest mean of
3.9200.

Descriptive Statistics
Mean Std. Deviation Analysis N
Factors you consider 3.2200 .67540 100
while investing in
Mutual Funds Returns
Factors you consider 3.6300 .93911 100
while investing in
Mutual Funds Tenure
Factors you consider 3.4500 .65713 100
while investing in
Mutual Funds Risk
Factors you consider 3.6300 .74745 100
while investing in
Mutual Funds Budget
Factors you consider 3.7300 .85108 100
while investing in
Mutual Funds Tax
Factors you consider 3.7200 .81749 100
while investing in
Mutual Funds Expense
Factors you consider 3.9200 .84900 100
while investing in
Mutual Funds AMC

6.3.2 The Correlation Matrix

Test Interpretation

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`

The next output from the analysis is the correlation coefficient. A correlation matrix is simply
a rectangular array of numbers which gives the correlation coefficients between a single
variable and every other variables in the investigation. The correlation coefficient between a
variable and itself is always 1, hence the principal diagonal of the correlation matrix contains
1s. The correlation coefficients above and below the principal diagonal are the same. The
determinant of the correlation matrix is shown at the foot of the table below.

Correlation Matrix

Factors Factors Factors Factors Factors Factors Factors

you you you you you you you
consider consider consider consider consider consider consider
while while while while while while while
investin investing investin investin investin investin investin
g in in g in g in g in g in g in
Mutual Mutual Mutual Mutual Mutual Mutual Mutual
Funds Funds Funds Funds Funds Funds Funds
Returns Tenure Risk Budget Tax Expense AMC
Corr Factors 1.000
elatio you
n consider
while
investin
g in
Mutual
Funds
Returns
Factors .416 1.000
you
consider
while
investin
g in
Mutual
Funds
Tenure

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`

Factors .389 .354 1.000

you
consider
while
investin
g in
Mutual
Funds
Risk
Factors .143 .033 .384 1.000
you
consider
while
investin
g in
Mutual
Funds
Budget
Factors .245 .190 .219 .254 1.000
you
consider
while
investin
g in
Mutual
Funds
Tax
Factors .222 .258 .312 .225 .355 1.000
you
consider
while
investin
g in
Mutual
Funds
Expense

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Factors .242 .305 .319 .144 .249 .535 1.000

you
consider
while
investin
g in
Mutual
Funds
AMC
a. Determinant = .261

6.3.3 Kaiser-Meyer-Olkin (KMO) and Bartlett's Test : measures strength of the

relationship among variables
Test Interpretation

The KMO measures the sampling adequacy which should be greater than 0.5 for a satisfactory
factor analysis to proceed. If any pair of variables has a value less than this , consider droping
one of them from the analysis. The off-diagonal elements should all be very small (close to
zero) in a good model. Looking at the table below, the KMO measure is 0.734.

There is no significant answer to question “How many cases do I need to factor analysis?”, and
methodologies differ. A common rule is to suggest that a researcher has at least 10-15
participant per variable. Fiedel (2005) says that in general over 300 cases for sampling analysis
is probably adequate. There is universal agreement that factor analysis is inappropriate when
sample size is below 50. Kaisen (1974) recommend 0.5 as minimum (barely accepted), values
between 0.7-0.8 acceptable, and values above 0.9 are superb.

Bartlett’s Test

Test Interpretation

Bartlett's test is another indication of the strength of the relationship among variables. This tests
the null hypothesis that the correlation matrix is an identity matrix. An identity matrix is matrix
in which all of the diagonal elements are 1 and all off diagonal elements are 0. You want to
reject this null hypothesis. From the same table, we can see that the Bartlett's test of sphericity
is significant That is, its associated probability is less than 0.05. In fact, it is actually less than

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0.01, i.e. the significance level is small enough to reject the null hypothesis. This means that
correlation matrix is not an identity matrix.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling .734
Adequacy.
Bartlett's Test of Approx. Chi-Square 128.840
Sphericity Df 21
Sig. <.001

6.3.4 Communalities
Test Interpretation
The next item from the output is a table of communalities which shows how much of the
variance in the variables has been accounted for by the extracted factors. For instance over 70%
of the variance in factors you consider while investing in Mutual Funds Tenure is accounted
for while 65% of the variance in factors you consider while investing in Mutual Funds Budget
is accounted for.

Communalities
Initial Extraction
Factors you consider 1.000 .546
while investing in
Mutual Funds Returns
Factors you consider 1.000 .699
while investing in
Mutual Funds Tenure
Factors you consider 1.000 .491
while investing in
Mutual Funds Risk
Factors you consider 1.000 .653
while investing in
Mutual Funds Budget
Factors you consider 1.000 .406
while investing in
Mutual Funds Tax

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 `

Factors you consider 1.000 .512

while investing in
Mutual Funds Expense
Factors you consider 1.000 .451
while investing in
Mutual Funds AMC
Extraction Method: Principal Component
Analysis.

6.3.5 Total Variance Explained

Test Interpretation
The next item shows all the factors extractable from the analysis along with their eigenvalues,
the percent of variance attributable to each factor, and the cumulative variance of the factor
and the previous factors. Notice that the first factor accounts for 38.399% of the variance, the
second 15.298%. All the remaining factors are not significant.

Total Variance Explained

Extraction Sums of Squared Rotation Sums of Squared
Initial Eigenvalues Loadings Loadings
Cumu
% of Cumulative % of Cumulative % of lative
Component Total Variance % Total Variance % Total Variance %
1 2.688 38.399 38.399 2.688 38.399 38.399 1.880 26.850 26.850

2 1.071 15.298 53.697 1.071 15.298 53.697 1.879 26.847 53.697

3 .982 14.024 67.721

4 .781 11.151 78.872
5 .557 7.963 86.835
6 .477 6.816 93.652
7 .444 6.348 100.000

Extraction Method: Principal Component Analysis.

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6.3.6 Rotated Component Matrix

Test Interpretation

The idea of rotation is to reduce the number factors on which the variables under investigation

have high loadings. Rotation does not actually change anything but makes the interpretation of

the analysis easier. Looking at the table above, we can see that Returns, Tenure and AMC are

loaded on component 2 and Risk, budget, tax and expenses are loaded on component 1. These

factors can be used as variables for further analysis.

Rotated Component Matrixa

Component
1 2
Factors you consider .724
while investing in
Mutual Funds Returns
Factors you consider .836
while investing in
Mutual Funds Tenure
Factors you consider .519
while investing in
Mutual Funds Risk
Factors you consider .795
while investing in
Mutual Funds Budget
Factors you consider .610
while investing in
Mutual Funds Tax
Factors you consider .613
while investing in
Mutual Funds
Expense
Factors you consider .493
while investing in
Mutual Funds AMC
Extraction Method: Principal Component
Analysis.
Rotation Method: Varimax with Kaiser
Normalization.
a. Rotation converged in 3 iterations.

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FINDINGS & CONCLUSION

`

FINDINGS

A study on “A Role of SBI Mutual Funds in Retirement Planning” was carried out on 100
respondents, based on their respective response, a data analysis is done. From data analysis
part, below are some important findings listed out.

 Survey shows that 71% of the people were keen to secure their future by planning for
their retirement. Only 10% of the people were sure to not plan for their retirement.
 According to the responses, most of the people start planning for their retirement
from the age group of 30 to 35 years to have the sufficient amount on hands.
 Survey shows that people have a good amount of investment experience.
 According to the responses, many people say that their top most preferred reason to
do the investment is tax savings and third preferred reason to do the investment is
Retirement Planning.
 According to the responses, 41% of the people prefer Debt type of Mutual Funds for
Retirement Planning and 39% of the people prefer Equity type of Mutual Funds.
 Survey shows that 76% of the people prefer Systematic Investment Plan (SIP) for
their Retirement planning
 According to the responses, 50% of the responses have made their investment in
SBIMF Retirement Schemes.
 SBI Retirement Benefit Fund – Aggressive Hybrid Fund is the most preferred
Scheme of the respondents.
 Survey shows that majority of the people invest 10% to 20% of their income in
SBIMF Retirement Schemes.
 According to the responses, High risk and low returns are the most prominent reason
for not investing in SBIMF Retirement Schemes.

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CONCLUSION

 Analysing the above data, we can say that nearly 70% of the population is planning
for their retirement from the age group of 30 to 35 years.
 92% of the population have investment experience which shows the increasing trend
of future security and from these approximately 40 % have moderate experience.
 Investors are concerned with the Debt Fund when it comes to the retirement planning
as they don’t prefer risk when it is related to future.
 Analysing the above data, we can find that more of Systematic Investment Plan
scheme for retirement planning should be launched.

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SUGGESTIONS

 Investors should make the investment with proper planning keeping in mind their
Retirement Requirement.
 The investors should select a particular investment option on basis of their need and risk
tolerance.
 Investors should start planning their retirement 30 to 35 years in order to have secured
future.
 Investors with the limited income can also plan their retirement with the small amount
of SIP.
 Investors should make their investment in Debt funds if the investors does not prefer
to take risk and should invest in Equity Funds if the investors prefer to take risk.
 Investors should have the knowledge of the investment and should keep themselves
updated in order to earn higher return.

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BIBILIOGRAPHY
Sivakumar, K. P., RajaMohan, S., Sezhiyan, D. M., & Narsimhulu, S. (2010). Performance Evaluation
of Mutual Fund Industry in India. Vidwat: The Indian Journal of Management, 3(1).

Chawla, D. (2014). An empirical analysis of factors influencing investment in mutual funds in

India. Global Business Review, 15(3), 493-503.

Bahl, D. S., & Rani, M. (2012). A comparative analysis of mutual fund schemes in India. International
Journal of Marketing, Financial Services &Management Research.

Rathi, P., & Yadav, R. (2014). Factors Affecting Selection, Performance, Opportunities and
Challenges of Mutual Funds in India.

Trivedi, J. C., & Soni, B. K. (2021). Retirement Planning: An Indian Study. ASBM Journal of
Management, 14(1/2), 76-99.

Trivedi, J. C. (2020). A Conceptual Study on Retirement Planning. Batavia K., Trivedi, J.(2020). A
Conceptual Study on Retirement Planning, Studies in Indian Place Names, 40(27), 459-476.

Agrawal, D. (2011). Measuring performance of Indian mutual funds. Finance India, June.

Muthappan, P. K. (2006). Problems and prospects of mutual funds–an empirical analysis. SMART
Journal of Business Management Studies, 2(1), 98-103.

Sandhya, S (May 2021). AN OVERVIEW OF MUTUAL FUNDS.

Naik, A., & Pramod, S. G. A Study on Investors’ Perception Towards Mutual Funds With Due Reference
to ‘SBI Mutual Funds’.

Dave, A., Harwani, D., & Joshi, A. (2022). COMPARATIVE PERFORMANCE ANALYSIS OF SBI
MUTUAL FUND IN COMPARISON WITH HDFC MUTUAL FUND. International Journal of Early
Childhood Special Education (INT-JECSE), 14(5), 3609-3613.

Mondal, S. (2011). Growth of Mutual Fund in India with Comparative Performance Analysis with SBI
Equity & ICICI Prudential Mutual Fund. Available at SSRN 1970256.

Bollen, N. P., & Busse, J. A. (2005). Short-term persistence in mutual fund performance. The Review
of Financial Studies, 18(2), 569-597.

Pandow, B. (2017). Performance of Mutual Funds in India. Available at SSRN 2925049.

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Saini, S., Anjum, B., & Saini, R. (2011). Investors’ awareness and perception about mutual
funds. International Journal of multidisciplinary research, 1(1), 14-29.

Arth Anvesan, July, 2007 & January, 2008, Vol. 2 (2) & Vol. 3 (1) pp. 32-43. (Jointly with Sunita Bishnoi).

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REFERENCES
https://www.amfiindia.com/

https://www.itrtoday.com/all-about-mutual-funds/

https://www.fincash.com/l/structure-mutual-funds

https://cleartax.in/s/mutual-fund-types

https://www.indmoney.com/articles/personal-finance/advantages-and-disadvantages-of-
mutual-funds-key-things-to-keep-in-mind

https://www.sbimf.com/en-us/about-us/fund-house-expertise

https://pdfcoffee.com/swot-analysis-of-sbi-mf-pdf-free.html

https://www.franklintempletonindia.com/investor-education/planning-for-
retirement/article/head-start-15/what-is-the-importance-of-retirement-planning

https://groww.in/mutual-funds/sbi-retirement-benefit-fund-aggressive-plan-direct-growth

https://groww.in/mutual-funds/sbi-retirement-benefit-fund-Conservative-plan-direct-growth

https://groww.in/mutual-funds/sbi-retirement-benefit-fund-Conservative-hybrid-plan-direct-
growth

https://groww.in/mutual-funds/sbi-retirement-benefit-fund-aggressive-hybrid-plan-direct-
growth

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ANNEXURE

1. Name
2. Gender :
a. Male
b. Female
c. Others
3. Age Group:
a. Less than 20 years
b. 20 to 30 years
c. 30 to 40 years
d. 40 to 50 years
e. Above 50 years
4. Occupation:
a. Employed
b. Business
c. Housewife
d. Retired
e. Other
5. Income (Annually):
a. Less than 10 lakhs
b. 10 to 30 lakhs
c. 30 to 50 lakhs
d. 50 to 70 lakhs
e. Above 70 lakhs
6. Are you planning for your Retirement?
a. Yes
b. No
c. Maybe
7. From which age are you planning your retirement?
a. 25 to 30 years
b. 30 to 35 years
c. 35 to 40 years
d. 40 to 45 years
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e. 45 years and above

f. None
8. Do you have any kind of investment experience?
a. Yes
b. No
9. What is your investment experience?
a. Beginners
b. Moderate
c. Knowledgeable
d. Experienced
e. None
10. Which are your top 3 Investment purpose?
a. Wealth Creation
b. Tax Savings
c. To earn steady and additional source of income
d. Meet Financial Goals
e. Retirement Planning
f. To keep the funds safe and secure
g. Other
11. Which are your top 3 preferred investment instruments for retirement planning?
a. Banks
b. Post Office
c. Real Estate
d. Mutual Funds
e. Insurance
f. Govt. Securities
g. Equities
h. Gold
i. Other
12. If Mutual funds, then which type of mutual funds scheme do you prefer?
a. Equity
b. Debt
c. Hybrid
d. Solution Oriented

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13. If Mutual Funds, then which mode of investments do you prefer?

a. One Investmets
b. Systematic Investment Plan
14. Factors you consider while making an investment in Mutual Funds
Very Important Moderate Slightly Not
Important Important Important

Returns

Tenure

Risk
Budget

Tax
Implication
Expense
Ratio

AMC
Track
Record

15. If not Mutual Funds, then what is the reason for not investing?
a. High expense ratio and sales charge
b. Management abuses
c. Tax inefficiency
d. Poor trade execution
e. Other
16. Have you made your investment in SBI Retirement Schemes?
a. Yes
b. No
17. If yes, where do you see yourself as SBI Mutual Fund Retirement Scheme investor?
a. Partial knowledge of SBI Retirement schemes
b. Aware only of specific scheme in which you have made your investments
c. Aware about all the retirement schemes

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18. If yes, in which SBI Retirement scheme have you invested?

a. SBI Retirement Benefit Fund – Aggressive Plan
b. SBI Retirement Benefit Fund – Aggressive Hybrid Plan
c. SBI Retirement Benefit Fund – Conservative Hybrid Plan
d. SBI Retirement Benefit Fund – Conservative Plan
19. If Yes, what percentage (%) of your income do you invest in SBI Retirement
Schemes?
a. Upto 10%
b. Upto 20%
c. Upto 30%
d. More than 30%
20. If No, why haven’t you invested in SBI Retirement Mutual Fund Schemes
a. Not Aware
b. High Risk
c. Low Returns
d. Lack of service
e. Currently not interested

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