HRM Project

RESEARCH PROJECT REPORT

ON

CONSUMER BENEFIT SERVICES FROM MUTUAL FUND (Study of SBI mutual fund)

SUBMITTED FOR THE PARTIAL FULFILLMENT OF THE DEGREE OFMASTER OF BUSINESS ADMINISTRATION

of

PUNJAB TECHNICAL UNIVERSITYBy

ARUSHI VERMA 1407130MBA III SEMESTER

UNDER THE SUPERVISION OF

Ms. AISHWARYA

Chandigarh Business School Administration, Landran, Mohali

2014-2016TABLE OF CONTENTS TITLE 1 CERTIFICATE 4 DECLARATION 5 ACKNOWLEGEMENT 6 Chapter:1.. Introduction (Industry Profile) 7 1.1 Historical evolution .8-11 1.2 Growth rate 11-12 1.3 Players in industry 13 1.4 Key challenges 14Chapter:2..Company profile 15 2.1 History 16-17 2.2 Products 18-19 2.3 Organization structure 20-24Chapter:3 Research Methodology 25 3.1. Literature Review 26-27 3.2. Need of study 28 3.3. Objectives of study 29 3.4. Research Design 29-36 (a) Population (b) Sample (c) Sample Size (d) Sampling Technique (e) Sampling Unit (f) Data collection

(g) Scope of study (h) Technique of analysis 3.5. Limitations of the study 37 Chapter: 4. Data Analysis & Interpretation 38-49 Chapter:5. Findings & Conclusions 50- 54 Chapter: 6. Recommendation 55 Bibliography 56 Questionnaire 57- 60 Certificate of Supervisor

This is to certify that Mr. / Ms. VARUN MEHTA Roll No. 1407130 has completed the research project titled CONSUMER BENEFIT SERVICES FROM MUTUAL FUND (study of SBI mutual fund) under my supervision in partial fulfillment of the MASTER OF BUSINESS ADMINISTRATION degree of MBA universitys name Punjab Technical University.

Supervisors signature:

Supervisors name:

Supervisors Designation:

Date:

Place:

Forwarded for evaluation by Research Committee:

(Member of Research Committees Signature)

Seal of the CBS

DeclarationI, hereby declare that the research project report titled CONSUMER BENEFIT SERVICES FROM MUTUAL FUND (study of SBI mutual fund) is my own original research work and this report has not been submitted to any University/Institute for the award of any professional degree or diploma.

Varun Mehta

MBA (3rd)

Chandigarh Business School

Date:

Place:

ACKNOWLEDGEMENT

The present work is an effort to throw some light on CONSUMER BENEFIT SERVICES FROM MUTUAL FUND (study of SBI mutual fund) .The work would not have been possible to come to the present shape without the able guidance, supervision and help to me by number of people.

With deep sense of gratitude I acknowledge the encouragement and guidance received by Ms. Aishwarya (Faculty guide) who not only played the role of my Philosopher ,but also mentored me at every stage of my project work. I would like to extend my heartily thanks to entire Faculty of MBA department for their constant cooperation and support to take decision during the course of my research. Indeed I shall remain ever grateful to them. I would also like to thanks to all those my friends whose name could not be mentioned.

And last but not the least I would like to thanks my parents for their immense support and blessings without which I cannot dream of making this project. The experience I gained during this research project is of immense importance to me academically and more so professionally.

Varun Mehta CHAPTER 1:

INTRODUCTION (Industry Profile)INTRODUCTION:

Historical Evolution: SBIlife insuranceisIndia's premier insuranceenablingcompany.SBILife insuranceisthe one-stop-shop forrequirementsofservices inthe areasof insurance ,optimum investment, financial coverage and losses, mortalitybenefit, ,andhealthoptionetc.Thisisbackedbysbilifeinsuranceservicesupport infrastructure - the widest in the countryThe objective of the project was to understand howfinancial consultant play important role for insurance company like SBI LIFE. To understand the process of Recruitment of finanical consult in SBI lifeThe main objective of the project is to understand the recruitment and selectionoffinancialconsultantmoreeffectivelyandefficiently,becausefinancialconsultant playmost important role inbusiness ofinsurance. Market inPune citywas targeted. Various areas in city were selected. The data gave knowledgeabout customer satisfaction, loyalty & their feel about the sbi Life Insurance.Recruitment wasconducted usingquestionnaire. Theinformationabout variousattributes & factors was collected about the financial consultant. All the data collected, primary data was filtered & analyzed, represented in the form of graphs& charts. Secondary data was also used in report such as company profile, on the basis of analysis of data, conclusions were drawn. On the basis of findings &conclusions, suggestions were given.The State Bank of India lie in the first decade of the 19th century, when theBank of Calcutta, later renamed theBank of Bengal, was established on 2 June 1806. The Bank of Bengal was one of three Presidency banks, the other two being theBank of Bombay(incorporated on 15 April 1840) and theBank of Madras(incorporated on 1 July 1843). All three Presidency banks were incorporated asjoint stock companiesand were the result ofroyal charters. These three banks received the exclusive right to issue paper currency till 1861 when, with the Paper Currency Act, the right was taken over by the Government of India. The Presidency banks amalgamated on 27 January 1921, and the re-organised banking entity took as its nameImperial Bank of India. The Imperial Bank of India remained a joint stock company but without Government participation.

In 1959, the government passed the State Bank of India (Subsidiary Banks) Act. This made SBI subsidiaries of eight that had belonged toprincely statesprior to their nationalization and operatonal take-over between September 1959 and October 1960, which made eight state banks associates of SBI.

SBI has acquired local banks in rescues. There has been a proposal to merge all the associate banks into SBI to create a "mega bank" and streamline the group's operations. Our Vision

To be the most preferred and the largest fund house for all asset classes, with a consistent track record of excellent returns and best standards in customer service, product innovation, technology and HR practices.

Growth Rate:The Indian mutual fund industry is one of the fastest growing sectors in the Indian capital and

Financial markets. The mutual fund industry in India has seen dramatic improvements in quantityas well as quality of product and service offerings in recent years. The concept of mutual fundswas introduced in India with the formation of Unit Trust of India in 1963. The first scheme

launched by UTI was the now infamous Unit Scheme 64 in 1964. UTI continued to be the sole

mutual fund until 1987, when some public sector banks and Life Insurance Corporation of India

and General Insurance Corporation of India set up mutual funds. It was only in 1993 that private

players were allowed to open shops in the country. Today, 32 mutual funds collectively manage

Rs 6713575.19 cr under hundreds of schemes.The industry has steadily grown over the decade. For example, before the public sector mutual

funds entry, UTI was managing around Rs 6,700 crore on its own. Public sector mutual funds

also helped accelerate the growth of Assets Under Management. UTI and its public sector

counterparts were managing around Rs 47,000 crore when Kothari Pioneer, the first private

sector mutual fund, set up shop in 1993. Before the US 64 fiasco, there were 33 mutual funds

with total assets of Rs 1, 21,805 crore as on January 2003. The UTI was way ahead of other

mutual funds with Rs 44,541 crore assets under management. The industry overall has performed

well over the years. Of course, there were a few funds houses, which disappointed investors.

However, overall performance has been good. However, lack of awareness still impedes the

growth of the mutual fund industry. Unlike developed countries, most of the household savings

still go to bank deposits in India. In the year 2004, the mutual fund industry in India was worth

Rs 1,50,537 crores. The mutual fund industry is expected to grow at a rate of 13.4% over the

next 10 years. Mutual funds assets under management grew by 96% between the end of 1997

and June 2003 and as a result it rose from 8% of GDP to 15%. The industry has grown in size

and manages total assets of more than $30351 million. Of the various sectors, the private sector

accounts for nearly 91% of the resources mobilized showing their overwhelming dominance in

the market. Individuals constitute 98.04% of the total number of investors and contribute US$12062 million, which is 55.16% of the net assets under management.The graph indicates the growth of assets over the years:

.3 Players In Industry:

Setup date Jun-29-1987

Incorporation date Feb-07-1992

Sponsor State Bank of India

Trustee SBI Trustee Company

Private Limited

Chairman Mr. Pratip Chaudhri

CEO / MD Mr. Deepak Kumar Chatterjee

CIO Mr. Navneet Munot

Compliance Officer Ms. Vinaya Datar

Investor Service Officer Mr. C A Santosh

Corporate Office SBI Pvt Ltd.

Key Challenges:GROWTH VERSUS GOVERNANCE A RIGHT MIX

The Indian Mutual Fund industry has held its ground in the center of hard times in capital

market. As number of players in the market increases, competition may force fund houses to

comply not only with the laid down regulations and concentrate more on growth but efforts in

creating excellence in governance as well. In this challenging environment, the debate of growth

versus governance is surely set to assume greater significance

.

ADMINISTRATION AND DISTRIBUTION

No discussion on mutual funds can be complete without touching upon the aspect of distribution.

A lot has been spoken about the need to increase penetration of mutual funds in Tier II and Tier

III cities. INVESTOR EDUCATION- A DRIVING FORCE ON FINANCIAL PLANNING

The efforts taken by the industry and AMFI towards investor education are definitely showing

results. The media is also making a fair share of its contribution. Today, we have news channels, running dedicated shows for mutual funds, wherein fundamentals of investing in mutual funds

are explained and queries of investors are answered by experts.

THE TECHNOLOGICAL BACKBONE

Fund houses have introduced interesting technological innovations such as transacting through

the internet, net asset value updates on mobile phones, unit balance alerts via SMS messages,

transacting through ATM cards etc. However, these innovations currently cater to the already

pampered urban class of investors CHAPTER 2: (Company Profile)

2.1 HISTORY:The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank of India.

First Phase 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6, 700 Crores of assets under management.

Second Phase 1987-1993 (Entry of Public Sector Funds) 1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.At the end of 1993, the mutual fund industry had assets under management of Rs.47, 004 Crores. Third Phase 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1, 21,805 Crores. The Unit Trust of India with Rs.44, 541 Crores of assets under management was way ahead of other mutual funds

Fourth Phase since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29, 835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations.The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 Crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund.

2.2 Products:THERE ARE VARIOUS PRODUCTS OR SCHEMES WHICH ARE OFFERED BY THE THE SBI MUTUAL FUNDS TO THERE COUSTMERS FOR THERE BENEFITS. THESE PRODUCTS ARE AS FOLLOWING:-Fund Presentations - August 2015

SBI Magnum Equity FundSBI Emerging Businesses FundSBI Blue Chip FundSBI Magnum Global FundSBI Corporate Bond FundSBI Dynamic Bond FundSBI Magnum Income FundSBI Money-Market FundsSBI Magnum Balanced FundSBI Short-term Debt FundEquity Schemes - Fund Cards - August 2015SBI Arbitrage opportunities FundSBI Blue Chip FundSBI Emerging Businesses FundSBI Magnum Balanced FundSBI Magnum Equity FundSBI Magnum Global FundSBI Magnum MidCap FundSBI Magnum Tax Gain SchemeSBI Pharma FundSBI Debt Scheme Fund Card - August 2015 SBI Magnum Gilt Fund - Long Term PlanSBI Magnum Income fundSBI Magnum Monthly Income PlanSBI Magnum Monthly Income Plan-FloaterSBI Savings FundSBI Short Term Debt FundSBI Treasury Advantage FundSBI Ultra Short Term Debt Fund2.2 Organization Structure:The important terms of the figure are explained as follows:

Fund Sponsor:

A sponsor is any person who, acting alone or in combination with another body corporate, establishes a MF. The sponsor of a fund is similar to the promoter of a company. In accordance with SEBI Regulations, the sponsor forms a trust and appoints a Board of Trustees, and also generally appoints an AMC as fund manager. In addition, the sponsor also appoints a custodianto hold the fund assets. The sponsor must contribute at least 40% of the net worth of the AMC and possess a sound financial track record over five years prior to registration.

Trustees:

The MF or trust can either be managed by the Board of Trustees, which is a body of individuals, or by a Trust Company, which is a corporate body. Most of the funds in India are managed by Board of Trustees. The trustee being the primary guardian of the unit holders funds and assets has to be a person of high repute and integrity. The trustees, however, do not directly manage the portfolio

securities. The portfolio is managed by the AMC as per the defined objectives, accordance with Trust Deed and SEBI (Mutual Funds) Regulations.

Asset Management Company (AMC):

The AMC, which is appointed by the sponsor or the trustees and approved by SEBI, acts like the investment manager of the trust. The AMC functions under the supervision of its own Board of Directors, and also under the direction of the trustees and SEBI. AMC, in the name of the trust, floats and manages the different investment schemes as per the SEBI Regulations and as per the Investment Management Agreement signed with the Trustees.

Others:

Apart from these, the Mutual Fund has some other fund constituents, such as custodians and depositories, banks, transfer agents and distributors.

The custodian is appointed for safe keeping of securities and participating in the clearing system through approved depository. The bankers handle the financial dealings of the fund. Transfer agents are responsible for issue and redemption of units of Mutual Fund.

Types of Mutual Fund schemes in India :A mutual fund, say, SBI Mutual Fund, can have several 'funds' [called 'schemes' in India) under its management. These different funds can be categorized by structure, investment objective and others. It would be well illustrated by the following flow chart:

Source: Association of Mutual Funds in India (AMFI) An 'Open ended' fund is available for purchase or redemption on continuous basis at the day's closing Net Asset Value (NAV). This gives liquidity to investments. A 'Close ended' fund is open for investment only during the Initial Public Offer (IPO) after which the investment is locked in until the maturity date which could be between 3-7yrs. The investor can, however, sell or buy the shares of the funds on the stock exchange where the shares are listed. Interval funds combine the characteristics of both 'open end' funds. They can be bought or redeemed by the investor at predetermined times, say once in six or twelve months.

'Growth' oriented funds aim at providing capital appreciation. They tend to invest primarily in equities. 'Income' funds aim at providing regular income to investors. They generally invest a major portion of their assets in fixed income earning instruments such as government securities, corporate bonds and money market instruments. Their returns are determined by fluctuations in interest rates. A 'Balanced fund' tries to provide both capital appreciation and regular income. They invest in both equities and fixed income securities. They specify the maximum equity exposure in the prospectus and is normally 60 percent; of late other types of balanced funds such as "Asset Allocation funds and 'Arbitrage funds' have also emerged. Asset allocation funds, such as the Franklin Templeton (FT) PIE ratio funds, allocate funds to equity or debt depending on the dynamic situation. They tend to increase exposure to equity during a market downturn and move out during market peaks. The FT PIE ratio fund uses the market PIE ratio to determine the degree of equity exposure. Arbitrage funds are funds that try to capitalize on the arbitrage opportunities that arise out of pricing mismatch of stocks in the equity and derivative (futures and options) segments of the stock market (Value Research Inc.). They invest predominantly in equities 'Money Marker. Funds invest only in short term debt such as call money, treasury bills and commercial paper. In the case of these funds the Net Asset Value is simply the interest accrued on these investments on a daily basis. Their NAV does not fall below the initial investment value, unlike bond funds which are marked to market. Tax saving funds give an investor tax benefits under section 80 C of the Income Tax Act. Such funds also termed as Equity Linked Saving Schemes (ELSS), have a lock in period of three years. By investing in such funds a person can avail of a maximum of rupees one hundred thousand in tax deductions. ELSSs are normally diversified equity funds. Index funds invest in securities of a particular index such as the Bombay Stock Exchange (BSE) sensex in the same proposition. They provide returns which

are close to that of the benchmark index with similar risks as well. It is a passive investment approach with lower costs. Sector specific funds focus their investments on specific sectors which the fund manager feels would do well. For instance, Franklin FMCG fund invests only in shares of companies that produce fast moving consumer goods. Exchange Traded Fund's (ETF) are relatively a new concept in India. Such funds are essentially index funds that are listed and traded on the stock markets.

Chapter 3.

(Research Methodology)

3.1 Literature Review:

Literature on mutual fund performance evaluation is enormous. A few research studies that have influenced the preparation of this paper substantially are discussed in this section. Sharpe, William F. (1966) Suggested a measure for the evaluation of portfolio performance.Drawing on results obtained in the field of portfolio analysis, economist Jack L. Treynor Has suggested a new predictor of mutual fund performance, one that differs from virtually all those used previously by incorporating the volatility of a fund's return in a simple yet meaningfulmanner.Michael C.Jensen (1967) Derived a risk-adjusted measure of portfolio performance (Jensen salpha) that estimates how much a managers forecasting ability contributes to funds returns. The study used 269 open-ended schemes (out of total schemes of 433) for computing relative performance index. Then after excluding funds whose returns are less than risk-free returns, 58schemes are finally used for further analysis. The results of performance measures suggest that most of mutual fund schemes in the sample of 58were able to satisfy investors expectations by giving excess returns over expected returns based on both premium for systematic risk and total risk.

Selvarajan B.and Vadivalagan, G.(2012)Over the few years Indian banking, attempts to integrate with the global banking has been facing lots of hurdles in its way due to certain inherent weakness, despite its high sounding claims and lofty achievements. In a developing country, banking is seen as an important instrument of development, while with the demanding

Non-Performing Assets(NPAs), banks have become burden on the economy. Non-Performing Assets are not merely non remunerative, but they add cost to the credit Management. The fear of Non-Performing Assets permeates the psychology of bank managers in entertaining new projects for credit expansion. Non-Performing Assets is not a dilemma facing exclusively the bankers; it is in fact an all pervasive national scourge swaying the entire Indian economy. Non Performing Asset is a sore throat of the Indian economy as a whole. Non Performing Assets have affected the profitability, liquidity and competitive functioning of banks and developmental of financial institutions and finally the psychology of the bankers in respect of their disposition towards credit delivery and credit expansion. NPAs do not generate any income for the banks, but at the same time banks are required to make provisions for such NPAs from their current profits. Apart from internal and external complexities, increases in NPAs directly affects banks' profitability sometimes even their existence. Paul Purnendu , Bose , Swapan and Dhalla, Rizwan S.(2011)In this paper we attempt to measure the relative efficiency of Indian PSU banks on overall financial performances. Since, the financial industry in a developing country like India is undergoing through a very dynamic pace of restructuring, it is imperative for a bank to continuously monitor their efficiency on Non-Performing Assets,

Capital Risk-Weighted Asset Ratio, Business per Employee, Return on Assetsand Profit per Employee. Here, Non-Performing Assets is a negative financial indicator. To prove empirically, we propose a framework to measure efficiency of Indian public sector banks.

Veera kumar, K.(2012)

The Indian banking sector has been facing serious problems of

Raising Non-Performing Assets (NPAs). Like a canker worm, NPAs have been eating the banking industries from within, since nationalization of banks in 1969. NPAs have choked off quantum of credit, restriction the recycling of funds and leads to asset-liability mismatches. It also affected profitability, liquidity and solvency position of the Indian banking sector. One of the major reasons for NPAs in the banking sector is the 'Direct Lending System' by the RBI under social banking motto of the Government, under which scheduled commercial banks are required to lend 40% of their total credit to priority sector.

The banks who have advanced to the priority sector and reached the target suffocated on account of raising NPAs, since long. The priority sector NPAs have registered higher growth both in percentage and in absolute terms year after year. The present paper is an attempt to study the priority sector advances by the public, private and foreign bank group-wise, target achieved by them and a comparative study on priority and non-priority sector NPAs over the period of 10 years between 2001-02 and 2010-11. This paper also aims to find out the categories of priority sector advances which contribute to the growth of total priority sector NPAs during the period under study.3.2 Need Of Study:Professional ManagementMutual funds offer investors the opportunity to earn an income or build their wealth through professional management of their investible funds.Well regulated Mutual funds are subject to many government regulations that protect investors from fraud.Economies of ScaleThe pooling of large sums of money from so many investors makes it possible for the mutual fund to engage professional managers to manage the investment. Individual investors with small amounts to invest cannot, by themselves, afford to engage such professional management.

Investment ProcedureTo know the steps of how to invest in mutual fund by investor.

3.3 Objectives Of Study:a). To know the value of mutual funds in India and their major aspects.b). To know the various fund offered by the mutual funds in India.c). To identify the level of risk involved in investing in various equity diversified mutual fund schemes.d). To know various regulatory firm of mutual funds in India.e). To know the organizational structure of a mutual funds.f). To know the best mutual funds investment plan like Systematic investment plan.

3.4 Research Design:A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. It is a frame work, which determines the course of action towards the collection and analysis of required data. It may be described as the conceptual structure with in which the research is conducted.(A) PopulationA population is generally a large collection of individuals or objects that is the main focus of a scientific query. All individuals or objects within a certain population usually have a common binding characteristic or trait. The population taken for research is 100.

(B) SampleA sample is simply a subset of the population. The concept of sample arises from the inability of the researchers to test all the individuals in a given population. The sample must be representative of the population from which it was drawn and it must have good size to warrant statistical analysis. The sample taken for research is SBI Mutual Funds. (C)Sample Size

Due to the shortage of the time, the area covered under this study is limited to Chandigardh and Ambala only.

(D)Sampling techniqueThe sampling technique used is descriptive type of study.

Descriptive research includes surveys and facts finding enquiries of different kinds. The major purpose of descriptive research is description of the state of affairs as it exits present.

(E)Sampling unit

The elementary units or the group or cluster of such units may form the basis of sampling process in which case they are called as sampling units. Sampling unit is five years data from annual report of SBI bank. (F)Data collection:

Two types of data collection methods are used: 1. Primary Data

Primary data are those which are collected a fresh and for the first time and happens to be original in character. The primary data have been collected with the help of a structured, on-disguised, self-constructed questionnaire with the help of the people from Banking Industry and my project guide. The questions were both open and close-ended. Full freedom was provided to an individual to answer the questions. Personal interview and personal views point & observation of the respondents about the various schemes helped in completion of the project.

THE RESEARCHER USED SECONDARY DATA

2. Secondary Sources of Data

These are those which are collected by someone else and which have been passed through statistical process .Brochures, journals, magazines, sites of PNB Bank & various articles provided lot many inputs for successful completion of the project. (G) Scope of study The study was done on SBI mutual funds and main target behind this was to know more and more about the SBI mutual funds that how it works and provide the CONSUMER BENFIT SERVICES. (H) Technique of analysisIn this project pie charts are used for presentation and The Presentation is made both in the tabular form and graphs. The analysis is made in percentile form. Each table is explained with a detailed interpretation of that table and graphical presentation. The question is in histogram.How to invest in mutual funds? Step One - Identify your investment needs. Your financial goals will vary, based on your age, lifestyle, financial independence, family commitments, level of income and expenses among many other factors. Therefore, the first step is to assess your needs. Begin by asking yourself these questions: 1. What are my investment objectives and needs?

Probable Answers: I need regular income or need to buy a home or finance a wedding or educate my children or a combination of all these needs.

2. How much risk am I willing to take?

Probable Answers: I can only take a minimum amount of risk or I am willing to accept the fact that my investment value may fluctuate or that there may be a short term loss in order to achieve a long term potential gain.

3. What are my cash flow requirements? Probable Answers: I need a regular cash flow or I need a lump sum amount to meet a specific need after a certain period or I dont require a current cash flow but I want to build my assets for the future. By going through such an exercise, you will know what you want out of your investment and can set the foundation for a sound Mutual Fund Investment strategy.

Step Two - Choose the right Mutual Fund. Once you have a clear strategy in mind, you now have to choose which Mutual Fund and scheme you want to invest in. The offer document of the scheme tells you its objectives and provides supplementary details like the track record of other schemes managed by the same Fund Manager. Some factors to evaluate before choosing a particular Mutual Fund are:

The track record of performance over the last few years in relation to the appropriate yardstick and similar funds in the same category.

How well the Mutual Fund is organized to provide efficient, prompt and personalized service.

Degree of transparency as reflected in frequency and quality of their communications.Step Three - Select the ideal mix of Schemes. Investing in just one Mutual Fund scheme may not meet all your investment needs. You may consider investing in a combination of schemes to achieve your specific goals. The following charts could prove useful in selecting a combination of schemes that satisfy your needs. Step Four - Invest regularly For most of us, the approach that works best is to invest a fixed amount at specific intervals, say every month. By investing a fixed sum each month, you get fewer units when the price is high and more units when the price is low, thus

34

bringing down your average cost per unit. This is called rupee cost averaging and is a disciplined investment strategy followed by investors all over the world. With many open-ended schemes offering systematic investment plans, this regular investing habit is made easy for you.

Step Five - Keep your taxes in mind As per the current tax laws, Dividend/Income Distribution made by mutual funds is exempt from Income Tax in the hands of investor. However, in case of debt schemes Dividend/Income Distribution is subject to Dividend Distribution Tax. Further, there are other benefits available for investment in Mutual Funds under the provisions of the prevailing tax laws. You may therefore consult your tax advisor or Chartered Accountant for specific advice to achieve maximum tax efficiency by investing in mutual funds. Step Six - Start early It is desirable to start investing early and stick to a regular investment plan. If you start now, you will make more than if you wait and invest later. The power of compounding lets you earn income on income and your money multiplies at a compounded rate of return. Step Seven - The final step All you need to do now is to get in touch with a Mutual Fund or your advisor and start investing. Reap the rewards in the years to come. Mutual Funds are suitable for every kind of investor whether starting a career or retiring, conservative or risk taking, growth oriented or income seeking.

3.5 Limitation of the Study :a) . Time constraints: Due to shortage or less availability of time it may be possible that all the related and concerned aspects may not be covered in the project.

b) Analysis done is limited to the availability of data.

c) Some of the persons were not so responsive.d) Possibility of error in data collection because many of investors may have notgiven actual answers of my questionnaire.e) Sample size is limited to 200 visitors of State Bank of India , Boring Canal RoadBranch, Dehradoon out of these only 120 had invested in Mutual Fund. Thesample.size may not adequately represent the whole market.f) Some respondents were reluctant to divulge personal information which canaffect the validity of all responses.g) The research is confined to a certain part .CHAPTER 4( DATA ANALYSIS AND INTERPRETATION)ANALYSIS AND INTERPRETATION:The data collected from primary sources through collection of the responses of the questionnaire was assembled, stored, selected and analyzed. The analysis of the data is as under here-

1. Do you know about mutual fund?Yes64

No36

INTERPRETATION:From the above diagram it is quite clear that awareness towards mutual funds is 64% i.e., mostly majority is aware of the mutual fund.

2. AWARENESS TOWARDS MF THROUGHNATURE OF AWARENESSNO OF RESPONDENT

NEWSPAPER30

T.V.23

MAGAZINES20

FRIENDS & RELATIVES10

FINANCIAL ADVISOR7

OTHERS10

INTERPRETATION:

From the above table it can be seen that newspaper (30%) has an upper edge in awareness of the mutual fund followed by TV (23%) and magazines (20%).

3. INVESTMENT IN MUTUAL FUNDS

TYPES OF AMCNO OF RESPONDENTS

UTI40

KOTAK12

HDFC10

PRUDENTIAL ICICI25

FRANKLIN TEMPLTON8

OTHERS5

INTERPRETATION:

From the above table it is quite clear that mostly respondents prefer to invest in UTI (40%) followed by Prudential ICICI (25%), KOTAK (12%).

4.Do you have investment in mutual fund?YES24

NO76

INTERPRETATION:

From the above table it is quite clear that mostly respondents do not have investment in mutual fund.

5.Reason to Prefer MUTUAL FUND?Attributes/Rank12345

TAX SAVING27017040200

HIGH RETURN155260601510

LIQUIDITY504018514085

TRANSPRANCY1520175185105

FLEXIBILITY101040140300

INTERPRETATION:

From the above table it is quite clear that mostly respondents invested money due to tax benefit followed by high return, liquidity, transprancy, and flexibility.

6.What the most preferred period of investment?PERIODSNO OF RESPONDENTS

BELOW 1 YEAR50

1-3 YEAR260

3-5 YEAR120

ABOVE 5 YEAR70

INTERPRETATION:

From the above table it is quite clear that mostly respondents invested their money for short-term period (1-3 year) followed by 3-5 year.

7. Do you have any future plan for investment?YES64

NO36

INTERPRETATION:

From the above table it is quite clear that mostly respondents are interested to invest in mutual fund in future .As the above graph shows that 64 % respondents are interested to invest in future.8.Have you ever invested in Mutual Fund?

YES33

NO67

INTERPRETATION:

From the above table it is quite clear that only 33% respondents have investment in mutual fund.9.IF YES, IN WHICH SCHEME?NATURE OF SCHEMENo. Of RESPONDENTS

EQUITY8

BALANCED16

DEBT9

INTERPRETATION:

From the above table it is quite clear that 48.48% respondents have investment in Balanced fund followed by debt fund (27.27%) and equity fund (24.24%).10..How do you rate mutual fund against other MUTUAL FUND?

RATINGSNO OF RESPONDENTS

EXCELLENT8

GOOD63

AVERAGE22

POOR7

INTERPRETATIONS:

It can be concluded by saying that the 63% respondents rate mutual fund as good against other mutual fund whereas 22% respondents rate mutual fund as average against other mutual funds.11.Opinion regarding marketing, sales and after sales services of MUTUAL FUND?

RATINGSNO OF RESPONDENTS

EXCELLENT2

GOOD10

AVERAGE14

POOR7

INTERPRETATIONS:It can be concluded by saying that the maximum respondents rate UTI mutual fund as average towards sales and service.

CHAPTER 5-(FINDINGS AND CONCLUSION)FINDINGSIn the United States, a mutual fund is registered with theSecurities and Exchange Commission(SEC). Open-end and closed-end funds are overseen by aboard of directors(if organized as a corporation) orboard of trustees(if organized as a trust). The Board is charged with ensuring that the fund is managed in the best interests of the fund's investors and with hiring the fund manager and other service providers to the fund.

The sponsor or fund management company, often referred to as the fund manager,trade(buys and sells) the fund's investments in accordance with the fund's investment objective. A fund manager must be aregistered investment adviser. Funds that are managed by the same company under the same brand are known as a fund family or fund complex.

Mutual funds are not taxed on their income and profits as long as they comply with requirements established in the U.S. Internal Revenue Code. Specifically, they must diversify their investments, limit ownership of voting securities, distribute most of their income (dividends, interest, and capital gains net of losses) to their investors annually, and earn most of the income by investing in securities and currencies.[2]There is an exception: net losses incurred by a mutual fund are not distributed or passed through to fund investors but are retained by the fund to be able to offset future gains.

The characterization of a fund's income is unchanged when it is paid to shareholders. For example, when a mutual fund distributes dividend income to its shareholders, fund investors will report the distribution as dividend income on their tax return. As a result, mutual funds are often called"pass-through" vehicles because they simply pass on income and related tax liabilities to their investors.

Mutual funds may invest in many kinds ofsecurities. The types of securities that a particular fund may invest in are set forth in the fund's prospectus, a legal document which describes the fund's investment objective, investment approach and permitted investments. The investment objective describes the type of income that the fund seeks. For example, a capital appreciation fund generally looks to earn most of its returns from increases in the prices of the securities it holds, rather than from dividend or interest income. The investment approach describes the criteria that the fund manager uses to select investments for the fund.

A mutual fund's investmentportfoliois continually monitored by the fund'sportfolio manageror managers.Hedge fundsare not considered a type of (unregistered) mutual fund. While hedge funds are another type of collective investment vehicle, they are not governed by theInvestment Company Act of 1940and are not required to register with the SEC (though hedge fund managers must register as investment advisers).

CONCLUSIONA report is not said to be completed unless and until the conclusion is given to the report. A conclusion reveals the explanations about what the report has covered and what is the essence of the study. It was very difficult to pursue people to invest their capital, as the mindset of people is not to invest in any type risk, which is attached to their capital. For the purpose, we had to meet different type of people. Some were managers, businessman, service class, doctors, retired persons etc. All have a different mind and their own views while they think of investing in mutual fund, as the market was not so good. So one option was that the unit price of the Mutual Fund had come down and it was better time for people to invest at a low value and earn a higher return in a long run. During this period we collected information on the SBI mutual funds.

Following are the points which cover the whole conclusion of the survey regarding the project-

Most of the respondents were aware about mutual fund but they do not know very much about mutual fund.

Most of the respondents were aware through newspapers and magazines.

Among the total respondents covered maximum respondent had already investment in mutual funds.

The most popular and well known mutual funds is UTI MUTUAL. Among the total respondents covered, maximum respondents prefer mutual funds due to tax benefits followed by high returns transparency, liquidity and flexibility. High net worth individuals wants high returns on their money so they want to invest in equity-oriented funds.

Medium class individuals want moderate returns as well as security on their money so they prefer in balanced funds.

Mutual Funds Include Both Positive aspects and as well as negative ones these are classified as advantages and disadvantages explained as following:-

Advantages Of Mutual Fund Diversification - It can help an investor diversify their portfolio with a minimum investment. Spreading investments across a range of securities can help to reduce risk. A stock mutual fund, for example, invests in many stocks . This minimizes the risk attributed to a concentrated position. If a few securities in the mutual fund lose value or become worthless, the loss may be offset by other securities that appreciate in value. Further diversification can be achieved by investing in multiple funds which invest in different sectors.

Professional Management - Mutual funds are managed and supervised by investment professional. These managers decide what securities the fund will buy and sell. This eliminates the investor of the difficult task of trying to time the market.

Well regulated - Mutual funds are subject to many government regulations that protect investors from fraud.

Liquidity - It's easy to get money out of a mutual fund.

Convenience - we can buy mutual fund shares by mail, phone, or over the Internet.

Low cost - Mutual fund expenses are often no more than 1.5 percent of our investment. Expenses for Index Funds are less than that, because index funds are not actively managed. Instead, they automatically buy stock in companies that are listed on a specific index

Investment Comfort - Once an investment is made with a mutual fund, they make it convenient for the investor to make further purchases with very little documentation. This simplifies subsequent investment activity.

Transparency - The mutual fund offer document provides all the information about the fund and the scheme. This document is also called as the prospectus or the fund offer document, and is very detailed and contains most of the relevant information that an investor would need.

Choice of schemes - there are different schemes which an investor can choose from according to his investment goals and risk appetite.

Tax benefits - An investor can get a tax benefit in schemes like ELSS (equity linked saving scheme)

Disadvantages:

Lack of portfolio customization

Some securities houses offer Portfolio Management Schemes (PMS) to large investors. In a PMS, the investor has better control over what securities are bought and sold on his behalf.

On the other hand, a unit-holder in a mutual fund is just one of several thousand investors in a scheme. Once a unit-holder has bought into the scheme, investment management is left to the fund manager (within the broad parameters of the investment objective). Thus, the unit-holder cannot influence what securities or investments the scheme would buy.

Large sections of investors lack the time or the knowledge to be able to make portfolio choices. Therefore, lack of portfolio customization is not a serious limitation in most cases.Choice overload

Over 800 mutual fund schemes offered by more than 40 mutual funds and multiple options within those schemes make it difficult for investors to choose between them. Greater dissemination of industry information through various media and availability of professional advisors in the market should help investors handle this overload.

No control over costs

All the investor's moneys are pooled together in a scheme. Costs incurred for managing the scheme are shared by all the Unit-holders in proportion to their holding of Units in the scheme. Therefore, an individual investor has no control over the costs in a scheme.

SEBI has however imposed certain limits on the expenses that can be charged to any scheme. CHAPTER-6 (RECOMMENDATION) According to agents, private mutual funds advertisement and logo concept plays major role in awareness about the product. So mutual funds should also do aggressive ad campaign with the celebrity endorsement and innovative and creative logo should be there which matches the product and signifies the strength of the type. An agent in continues should be increased to boost sales.

As the mutual fund industry is growing and facing tough competition from foreign brands, mutual funds should focus on product awareness and product preference advertising.

There are some investors who have invested in mutual funds, but they are actually not aware about mutual funds because of the lack of awareness of mutual funds, so the company should conduct such a awareness programs that the people should come to know about the schemes of mutual funds.

Advertising of the schemes in newspaper should be done aggressively so that investors get to know about the schemes performing well

The fund should emphasize its unique and positive features to the brokers investors and corporate

The organization should focus on balanced scheme as they are the most preferred scheme.

BIBLIOGRAPHY

BOOKS

- The basics of investing by Gerald Krefetz.

- Tax guru by subash lakhotia

NEWSPAPER

Times of india Hindustan times Economic times Tribune Websites: www.sbimf.com

www.google.co.in

www.mutualfundsindia.com

www.utimf.com

www.moneycontrol.com

QUESTIONNAIRE

NAME

:

OCCUPATION :

COMPANY NAME :

DESIGNATION :

ADDRESS

:

TEL. NO.

:

MOB. NO.

:

E-MAIL

:

1.Do you know about Mutual Funds?

Yes

No2. If Yes, than from which source?News Paper

T.V.

Magazines

Friends and Relatives

Financial Advisor

Others (please specify)

3. The name, which comes to your mind when it comes to mutual funds4. Do you have any investment in mutual funds ?

Yes

NoIf yes, company & fund name. I.

II.

III.

5. Please tell why you prefer mutual funds (please mention in the order of preference)?

I. Tax Benefit

II. High return

III. Liquidity

IV. Transparency

V. Flexibility

I. 6.What is the most preferred period of investment in the mutual fund. ?II. Below 1 Year

III. 1-3 Year

IV. 3-5 Year

V. Above 5 year

7. Do you have any future plan for investing in mutual funds?

Yes

No8. Have you ever invested in mutual funds?

Yes No9. If yes, in which fund ?

Equity Balanced

Debt

10. How do you rate mutual fund against other mutual funds ?Excellent

Good

Average

Poor

11. What is your opinion regarding marketing, sales and after sales services of mutual funds?.

Excellent

Good

Average

Poor

12. Give your suggestions regarding Mutual funds as a Port Folio Manager?

Mutual Fund

(A Trust)

Trustees

(Holding property of fund)

Custodians

(Safe custody of fund securities etc.)

Sponsors

(Promoters)

Asset Management company

(Managing the investment of fund)

EMBED Excel.Chart.8 \s

9

_1505206241.xlsChart1

40

315

110

35

Sheet1

yes320

no180

NEWSPAPER150

T.V.115

MAGAZINES100

FRIENDS & RELATIVES50

FINANCIAL ADVISOR35

OTHERS50

UTI200

KOTAK60

HDFC50

ICICI125

FRANKLIN TEMPLTON40

OTHERS25

YES80

NO40

BELOW 1 YEAR50

1-3 YEAR260

3-5 YEAR120

ABOVE 5 YEAR70

HIGH RETURN31

TAX SAVINGS42

CHILDREN EDUCATION7

GROWTH18

OTHERS2

EXCELLENT8

GOOD63

AVERAGE22

POOR7

EQUITY21

BALANCED34

DEBT23

EXCELLENT40

GOOD315

AVERAGE110

POOR35

Sheet1

Sheet2

Sheet3

_1505200404.xlsChart1

64

36

Sheet1

yes64

no36

NATURE OF AWARENESSNO OF RESPONDENT

NEWSPAPER30

T.V.23

MAGAZINES20

FRIENDS & RELATIVES10

FINANCIAL ADVISOR7

OTHERS10

TYPES OF AMCNO OF RESPONDENTS

UTI40

KOTAK12

HDFC10

PRUDENTIAL ICICI25

FRANKLIN TEMPLTON8

OTHERS5

YES24

NO76

PERIODSNO OF RESPONDENTS

YES64

NO36

Sheet1

Sheet2

NEWSPAPER

30

Sheet3

NO OF RESPONDENTS