Prepared by: Under the guidance of: Submitted to: Yeardocshare01.docshare.tips/files/31575/315756896.pdf · 2016-12-21 · Report is based on research on the risk and return of particular

A Project report on

“A Study of Risk and Return Analysis of open-ended equity schemes

with regular plan-growth”

Submitted in

Partial fulfillment of the requirements

for the award of the degree of

Bachelor of Business Administration

Prepared by:

Hasani Sonali (23)

[T.Y. B.B.A FINANCE]

Under the guidance of:

Mr. Mehul Mehta

Submitted to:

B.R.C.M College of Business Administration

Veer Narmad South Gujarat University,

Surat.

Year:

2014-2015

ii

A Study of risk and return analysis of open-ended equity scheme with regular plan-growth

BRCM College Of Business Administration

iii



ACKNOWLEDGEMENT

I take the opportunity to express the feeling of gratitude towards Veer Narmad South

Gujarat University for keeping Industrial training as part of Bachelor of Business

Administration Course.

It is an occasion of great pleasure and a matter of deep felt person

al satisfaction to present this complied statement of the project Work. First, we believe

that full credit of having completed the prescribed training should go to the Director of

B.R.C.M College of Business Administration for making available all facilities in

fulfilling the requirement for my project report.

I am highly indebted to Mr. Mehul Mehta, for his guidance, constant help and for

providing necessary information regarding my project. I express my thanks for his

encouragement which help me in completion of this project.

I take this opportunity to thank all those who directly or indirectly were helpful in the

completion of my project work

SONALI HASANI

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DECLARATION

I, Sonali Hasani , declare that this project entitled “A STUDY OF RISK AND RETURN

ANALYSIS OF OPEN-ENDED EQUITY SCHEMES WITH REGULAR PLAN-

GROWTH” is the result of my own work carried out during December to February 2015-

2016 and has not been previously submitted to any other university or institute for any other

purpose by me or by any other person.

I will not use this project report in future to use as submission to any other university or

institute without written permission of my guide.

I also promise not to permit any other person to copy from this report in any form.

If I am found or caught as defaulter of above declaration, I know that my present of future

submission may become invalid and or may not be permitted to appear in final exam.

SONALI HASANI Sign:

Finance

Roll no: 23

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EXECUTIVE SUMMARY

In few years Mutual Fund has emerged as a tool for ensuring one’s financial well being.

Mutual Funds have not only contributed to the India growth story but have also helped

families tap into the success of Indian Industry. As information and awareness is rising more

and more people are enjoying the benefits of investing in mutual funds. The main reason the

number of retail mutual fund investors remains small is that nine in ten people with incomes

in India do not know that mutual funds exist. But once people are aware of mutual fund

investment opportunities, the number who decide to invest in mutual funds increases to as

many as one in five people. The trick for converting a person with no knowledge of mutual

funds to a new Mutual Fund customer is to understand which of the potential investors are

more likely to buy mutual funds and to use the right arguments in the sales process that

customers will accept as important and relevant to their decision.

This Project gave me a great learning experience and at the same time it gave me enough

scope to implement my analytical ability. The analysis and advice presented in this Project

Report is based on research on the risk and return of particular schemes of sbi mutual fund.

This Report will help to know about the Performance of sbi Mutual Fund .

The first part gives an insight about Mutual Fund and its various aspects, the Company

Profile, Objectives of the study and Research Methodology. One can have a brief knowledge

about Mutual Fund and its basics through the Project.

The second part of the Project consists of data and its analysis, the collection of Secondary

data, NAV values & Nifty index values for calculating return. .

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1



TABLE OF CONTENTS:

No. Topic Name Page

no.

Acknowledgement

Declaration

Executive Summary

1. Introduction to Mutual fund 3

1.1 Concept of Mutual Fund 4

1.2 Concept of Mutual Fund in Detail 6

1.3 Mutual Fund Operational Flow Chart 8

1.4 History of Mutual Fund 9

1.5 Current Scenario of Mutual fund Industry 11

1.6 Future Scenario of Mutual fund Industry 13

1.7 Benefits of Investing in Mutual Fund 15

1.8 Disadvantages of investing through Mutual fund 17

1.9 Risk in Mutual Fund 19

1.10 Structure of Mutual Fund 20

1.11 Types of Mutual Fund Schemes in India 21

1.12 SEBI rules and Regulations for Mutual funds 25

1.13 Frequently used Terms 27

2. Introduction of Company 28

2.1 Company Profile 29

2.2 Investment Team 32

2.3 Awards Received 34

2.4 Products of SBI Mutual fund 36

3 Research Methodology 42

3.1 Objective of Study 43

3.2 Research Design 43

3.3 Population 43

3.4 Sample Frame 43

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3.5 Sampling Technique 44

3.6 Source of Data 44

3.7 Sample Size 44

3.8 Data Collection 44

3.9 Analysis of Data 44

3.10 Limitations of work 45

3.11 Scope of Study 45

4 Data Analysis 46

4.1 Proposed Analysis Methodologies 47

4.2 Concept of NAV 48

4.3 Concept of risk and return 49

4.4 Tools for analysis 50

5 Findings 85

6 Conclusion and suggestion 87

Bibliography 89

Annexure 90

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CHAPTER 1

Introduction

4



Introduction

1.1. Concept of Mutual fund:-

A mutual fund is a common pool of money into which investors place their

contributions that are to be invested in accordance with a stated objective. In simple word, a

mutual fund collects the savings from small investors, invest them in government and other

corporate securities and earn income through interest and dividends, besides capital gains. It

works on the principle of “small drops of water make big ocean”.

Simply put, the money pooled in by a large number of investors is what makes up a

Mutual Fund. This money is then managed by a professional Fund Manager, who uses his

investment management skills to invest it in various financial instruments.

It is formed by the coming together of a number of investors who transfer their

surplus funds to a professionally qualified organization to manage it. To et the surplus funds

from investors, the fund adopts a simple technique. Each fund is divided into small fraction

called “units” of equal value. Each investor is allocated units in proportion to the size of his

investment.

“The mutual fund as an important vehicle for bringing wealth holders and deficit units

together indirectly”

The concept of mutual fund has been defined in various ways.

“Mutual fund as financial intermediaries which being a wide variety of securities with in the

reach of the most modest of investors”

Frank Relicy

According to SEBI mutual fund regulations 1993,

“Mutual fund means a fund established in the form of trust by sponsor to

raise moneys by the trustees through the sale of units to the public under one or more

schemes for investing insecurities in accordance with these regulations.

5



A Mutual Fund is a trust that pools the savings of a number of investors who

share a common financial goal. The money thus collected is then invested in capital market

instruments such as shares, debentures and other securities. The income earned through these

investments and the capital appreciation realised are shared by its unit holders in proportion

to the number of units owned by them. Thus a Mutual Fund is the most suitable investment

for the common man as it offers an opportunity to invest in a diversified, professionally

managed basket of securities at a relatively low cost.

The flow chart below describes broadly the working of a mutual fund:

6



1.2 THE CONCEPT OF MUTUAL FUND IN DETAIL

A mutual fund uses the money collected from investors to buy those

assets which are specifically permitted by its stated investment objective. Thus,

an equity fund would buy equity assets – ordinary shares, preference shares,

warrants etc. A bond fund would buy debt instruments such as debentures, bonds

or government securities. It is these assets which are owned by the investors in

the same proportion as their contribution bears to the total contributions of all

investors put together.

Any change in the value of the investments made into capital market instruments

(such as shares, debentures etc) is reflected in the Net Asset Value (NAV) of the

scheme. NAV is defined as the market value of the Mutual Fund scheme's assets

net of its liabilities. NAV of a scheme is calculated by dividing the market value

of scheme's assets by the total number of units issued to the investors.

A Mutual Fund is an investment tool that allows small investors access to a

well-diversified portfolio of equities, bonds and other securities. Each

shareholder participates in the gain or loss of the fund. Units are issued and can

be redeemed as needed. The funds Net Asset value (NAV) is determined each

day.

http://www.appuonline.com/mf/knowledge/concept.html

7



When an investor subscribes to a mutual fund, he or she buys a part of

the assets or the pool of funds that are outstanding at that time. It is no different

from buying “shares” of joint stock Company, in which case the purchase

makes the investor a part owner of the company and its assets. However,

whether the investor gets fund shares or units is only a matter of legal

distinction.

A Mutual Fund is a trust that pools the savings of a number of investors

who share a common financial goal. The money thus collected is then invested

in capital market instruments such as shares, debentures and other securities. The

income earned through these investments and the capital appreciation realized is

shared by its unit holders in proportion to the number of units owned by them.

8



Thus Mutual fund is most suitable investment for the common man as it offers

an opportunity to invest in a diversified, professionally managed basket of

securities at a relatively low cost.

1.3 MUTUAL FUND OPERATION FLOW CHART

From the above chart , it can be observed that how the money from the

investors flow and they get returns out of it. With a small amount of fund,

investors pool their money with the funds managers. Taking into consideration

the market strategy the funds managers invest this pool of money into reliable

securities. With ups and downs in market returns are generated and they are

passed on to the investors. The above cycle should be very clear and also

effective.

9



The fund manager while investing on behalf of investors takes into

consideration various factors like time, risk, return, etc. so that he can make

proper investment decision.

1.4 History of mutual fund:-

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. The history of mutual

funds in India can be broadly divided into four distinct phases.

First Phase - 1964-1987:

Unit Trust of India (UTI) was established in 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,

10



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, 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 Regulations, and with recent mergers taking place among different private sector funds,

the mutual fund industry has entered its current phase of consolidation and growth.

The graph indicates the growth of assets over the years.

11



Note:

Erstwhile UTI was bifurcated into UTI Mutual Fund and the Specified Undertaking of the

Unit Trust of India effective from February 2003. The Assets under management of the

Specified Undertaking of the Unit Trust of India has therefore been excluded from the total

assets of the industry as a whole from February 2003 onwards.

1.5 Current Scenario of Mutual fund Industry:

Despite being available in the market less than 10% of Indian households have invested in

mutual funds. A recent report on Mutual Fund Investments in India published by research and

analytics firm, Boston Analytics, suggests investors are holding back from putting their

money into mutual funds due to their perceived high risk and a lack of information on how

mutual funds work. There are 46 Mutual Funds as of June 2013.

http://en.wikipedia.org/wiki/Investor

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The primary reason for not investing appears to be correlated with city size. Among

respondents with a high savings rate, close to 40% of those who live in metros and Tier I

cities considered such investments to be very risky, whereas 33% of those in Tier II cities

said they did not know how or where to invest in such assets.

The mutual fund industry, today presents a picture of opportunity and challenges. As the

industry sensitizes itself to the changing regulatory landscape, business strategies are

endeavoring to respond to these developments. Amidst this changing business and regulatory

environment, asset management companies and all service providers, including distributors,

have to re-examine their business models and embrace the changing business landscape.

Gautam Mehra, Leader - Asset Management, PwC India, said, "At present, the Indian mutual

fund industry is facing interesting times. The last few years have seen a series of events, both

within and outside the Indian economy, which have impacted the industry. Additionally,

investors appear to have adopted a more cautious approach. The present scenario demands

vigorous innovation and reinvention. Among others, the purpose may be served by adopting a

cluster of key initiatives in the areas of cost efficiency, product design and positioning,

alternative distribution models, revenue diversification and capacity creation."

PwC presents a report in which it attempts to take an all around view of the dynamics and

explores hidden opportunities.

The key highlights of the reports are:

The mutual fund industry, beset by net redemptions by investors and adverse global

and local market conditions, shrank by 1.6%in terms of assets under management

during the year FY2011-2012.

The benchmark BSE Sensex and the assets under management (AuM) for the mutual

fund industry have risen in tandem. Booming markets in 2006 saw increased investor

participation in the industry, leading to fund inflows enabling the AuM to grow at a

pace greater than the Sensex.

However, volatile market conditions in the last two years have led to net withdrawals

by investors to the tune of 49,406 crore INR in FY 2010-11 and 22,023 crore INR in

FY 2011-12, leading to a further drop in AuM, in addition to the drop caused by

adverse market movements.

http://en.wikipedia.org/wiki/Savings_rate

http://en.wikipedia.org/wiki/Investment

http://en.wikipedia.org/wiki/Assets

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The mutual fund industry is primarily debt-oriented with debt funds (including liquid

funds) forming 64% of the AuM. As in the past, increased equity participation is the

need of the hour for the mutual fund industry.

(Report by PwC India)

1.6 Future Scenario of Mutual fund Industry:

Performance of the industry has been strong and it is well-placed to achieve sustainable

growth levels. The way forward for the next couple of years for the mutual fund industry

would be influenced hugely by the journey undertaken till this point of time and the changing

demographic profile of investors.

Diverse Range of Products:

There is a need for Indian Mutual funds to come out with innovative products that cater to the

ever changing customer requirements. In US, Mutual funds provide products that cater to the

entire life cycle of the investor.

Diversified products will keep the present momentum going for the industry in a more

competitive and efficient manner. Further, Mutual funds have to compete with bank deposits

and government securities for their share of consumer savings. Thus, in order to make Mutual

14



funds more acceptable to the retail investors, the MF would have to mature to offering

comprehensive life cycle financial planning and not products alone.

Regulation for MF Distributors

Currently, distributors of MF schemes are not separately regulated by any authority in India.

Further, many of them though certified by AMFI still leave a lot to be desired so as to render

professional advice to investor and reduce mis-selling of the MF products. MFs need

distributors who are able to inform the investors about the efficacy of the product for a

particular risk profile and stage in their life cycle. SEBI is planning to put in place a

compliance certification examination (by NISM) and is expected to run it online from mid-

2010. Further, SEBI is also expected to soon come out with a new set of guidelines

for MF distributors. As the affluence of Indians increase, the range of financial products to

meet people’s need will expand and with it the need for professional financial advice from

the MF distributors will increase.

Recommendations to re-visit the eligibility norms of AMCs:

SEBI had constituted the “Committee on Review of Eligibility Norms” (CORE) to re-visit

the eligibility norms and other functional aspects prescribed for various intermediaries.

Amongst other recommendations, the key ones are relating to increase in the minimum net

worth of AMCs from the existing Rs. 10 crores to Rs. 50 crores, change in the definition of

net worth, sponsor to be a regulated entity and change in definition of control. The objective

of the proposed recommendations is to allow only the serious players to enter/ remain in the

market. The proposed changes can lead to a better governance of the MF players, thereby

boosting investor confidence in the industry.

Trading through stock exchange platforms:

Recently, SEBI has permitted trading of MF units on recognised stock exchanges.

Subsequently, Bombay Stock Exchange and National Stock Exchange have launched trading

platforms enabling investors to invest by availing services of stock brokers. While trading

through the stock exchange, the investor would get to know about the validity of his order

and the value at which the units would get credited/ redeemed to his account by the end of the

day. Whereas, while investing through MF distributor or directly with the

15



MF, the investor gets information of the subscription and redemption details only in the form

of direct communication from the MF/ AMC. Thus, by trading through the stock exchange,

the investor would be able to optimize his investment decisions due to the reduced time lag in

the movement of funds. This transparency in knowing the status of order till completion helps

in reducing disputes. Further, the investor would able to get a single view of his portfolio

across multiple assets like securities, MF units etc.

Real Estate Mutual Funds:

Real Estate Mutual Funds could be the next big thing for the industry provided the regulators

bring in more clarity on the tax and regulatory aspects

1.7 Benefits of investing in a mutual fund:-

As an investor, we would like to get maximum returns on our investments,

but we may not have the time to continuously study the stock market to keep track of them.

We need a lot of time and knowledge to decide what to buy or when to sell. A lot of people

take a chance and speculate, some get lucky, and most don’t. This is where mutual funds

come in. Mutual funds offer the following advantages:

Professional management:

Qualified professionals manage our money, but they are not alone.

They have a research team that continuously analyses the performance and prospects

of companies. They also select suitable investments to achieve the objectives of the

scheme. It is a continuous process that takes time and expertise which will add value

to our investment. Fund managers are in a better position to manage our investments

and get higher returns.

Diversification:

The cliché, "don't put all your eggs in one basket" really applies to

the concept of intelligent investing. Diversification lowers our risk of loss by

spreading our money across various industries and geographic regions. It is a rare

occasion when all stocks decline at the same time and in the same proportion. Sector

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funds spread our investment across only one industry so they are less diversified and

therefore generally more volatile.

More choice:

Mutual funds offer a variety of schemes that will suit our needs

over a lifetime. When we enter a new stage in our life, all we need to do is sit down

with our financial advisor who will help us to rearrange our portfolio to suit our

altered lifestyle.

Affordability:

As a small investor, we may find that it is not possible to buy shares of

larger corporations. Mutual funds generally buy and sell securities in large volumes

which allow investors to benefit from lower trading costs. The smallest investor can

get started on mutual funds because of the minimal investment requirements. we can

invest with a minimum of Rs.500 in a Systematic Investment Plan on a regular basis.

Tax benefits:

Investments held by investors for a period of 12 months or more qualify

for capital gains and will be taxed accordingly. These investments also get the benefit

of indexation.

Liquidity:

we can redeem all or part of our investment any time we wish and

receive the current value of the shares. Funds are more liquid than most investments

in shares, deposits and bonds. Moreover, the process is standardized, making it quick

and efficient so that we can get our cash in hand as soon as possible.

Rupee-cost averaging:

With rupee-cost averaging, we invest a specific rupee amount at

regular intervals regardless of the investment's unit price. As a result, our money buys

more units when the price is low and fewer units when the price is high, which can

17



mean a lower average cost per unit over time. Rupee-cost averaging allows us to

discipline our self by investing every month or quarter rather than making sporadic

investments.

Transparency:

The performance of a mutual fund is reviewed by various publications

and rating agencies, making it easy for investors to compare fund to another. As a unit

holder, we are provided with regular updates, for example daily NAVs, as well as

information on the fund's holdings and the fund manager's strategy.

Regulations:

All mutual funds are required to register with SEBI (Securities

Exchange Board of India). They are obliged to follow strict regulations designed to

protect investors. All operations are also regularly monitored by the SEBI.

1.8 DISADVANTAGES OF INVESTING THROUGH

MUTUAL FUNDS:

1. No Control Over Costs:

An investor in a mutual fund has no control of the overall costs of investing. The

investor pays investment management fees as long as he remains with the fund, albeit in

return for the professional management and research. Fees are payable even if the value of his

investments is declining. A mutual fund investor also pays fund distribution costs, which he

would not incur in direct investing. However, this shortcoming only means that there is a cost

to obtain the mutual fund services.

2. No Tailor-Made Portfolio:

Investors who invest on their own can build their own portfolios of shares and bonds

and other securities. Investing through fund means he delegates this decision to the fund

18



managers. The very-high-net-worth individuals or large corporate investors may find this to

be a constraint in achieving their objectives. However, most mutual fund managers help

investors overcome this constraint by offering families of funds- a large number of different

schemes- within their own management company. An investor can choose from different

investment plans and constructs a portfolio to his choice.

3. Managing A Portfolio Of Funds:

Availability of a large number of funds can actually mean too much choice for the

investor. He may again need advice on how to select a fund to achieve his objectives, quite

similar to the situation when he has individual shares or bonds to select.

4. The Wisdom Of Professional Management:

That's right, this is not an advantage. The average mutual fund manager is no better at

picking stocks than the average nonprofessional, but charges fees.

5. No Control:

Unlike picking your own individual stocks, a mutual fund puts you in the passenger

seat of somebody else's car

6. Dilution:

Mutual funds generally have such small holdings of so many different stocks that

insanely great performance by a fund's top holdings still doesn't make much of a difference in

a mutual fund's total performance.

7. Buried Costs:

Many mutual funds specialize in burying their costs and in hiring salesmen who do not make

those costs clear to their clients.

19



1.9 Risk in mutual fund:-

Mutual funds face risks based on the investments they hold. For example, a

bond fund faces interest rate risk and income risk. Bond values are inversely

related to interest rates. If interest rates go up, bond values will go down and vice

versa. Bond income is also affected by the changes in interest rates. Bond yields

are directly related to interest rates falling as interest rates fall and rising as

interest rates.

Similarly, a sector stock fund is at risk that its price will decline due to

developments in its industry. A stock fund that invests across many industries is

more sheltered from this risk defined as industry risk.

Followings are glossary of some risks to consider when investing in mutual

funds:-

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1.10 STRUCTURE OF A MUTUAL FUND:

India has a legal framework within which Mutual Fund have to be constituted. In

India open and close-end funds operate under the same regulatory structure i.e. as unit Trusts.

A Mutual Fund in India is allowed to issue open-end and close-end schemes under a common

legal structure. The structure that is required to be followed by any Mutual Fund in India is

laid down under SEBI (Mutual Fund) Regulations, 1996.

The Fund Sponsor:

Sponsor is defined under SEBI regulations as any person who, acting alone or in

combination of another corporate body establishes a Mutual Fund.

Mutual Funds as Trusts:

A Mutual Fund in India is constituted in the form of Public trust Act, 1882. The Fund

sponsor acts as a settlor of the Trust, contributing to its initial capital and appoints a trustee to

hold the assets of the trust for the benefit of the unit-holders.

Trustees:

A Trust is created through a document called the Trust Deed that is executed by the

fund sponsor in favour of the trustees. The Trust- the Mutual Fund – may be managed by a

board of trustees- a body of individuals, or a trust company- a corporate body. Most of the

funds in India are managed by Boards of Trustees.

21



The Asset Management Companies:

The role of an Asset Management Company (AMC) is to act as the investment

manager of the Trust under the board supervision and the guidance of the Trustees.

Custodian and Depositories:

.The custodian is appointed by the Board of Trustees for safekeeping of securities or

participating in any clearance system through approved depository companies on behalf of

the Mutual Fund and it must fulfill its responsibilities in accordance with its agreement with

the Mutual Fund.

Bankers:

A Fund’s activities involve dealing in money on a continuous basis primarily with

respect to buying and selling units, paying for investment made, receiving the proceeds from

sale of the investments and discharging its obligations towards operating expenses. Thus the

Fund’s banker plays an important role to determine quality of service that the fund gives in

timely delivery of remittances etc.

Transfer Agents:

Transfer agents are responsible for issuing and redeeming units of the Mutual Fund

and provide other related services such as preparation of transfer documents and updating

investor records.

1.11 TYPES OF MUTUAL FUNDS SCHEMES IN

INDIA

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial

position, risk tolerance and return expectations etc. thus mutual funds has Variety of flavors,

Being a collection of many stocks, an investors can go for picking a mutual fund might be

easy. There are over hundreds of mutual funds scheme to choose from. It is easier to think of

mutual funds in categories, mentioned below.

22



(A) BY STRUCTURE:

1. Open - Ended Schemes:

An open-end fund is one that is available for subscription all through the year. These

do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value

("NAV") related prices. The key feature of open-end schemes is liquidity.

2. Close - Ended Schemes:

A closed-end fund has a stipulated maturity period which generally ranging from 3 to

15 years. The fund is open for subscription only during a specified period. Investors can

invest in the scheme at the time of the initial public issue and thereafter they can buy or sell

the units of the scheme on the stock exchanges where they are listed. In order to provide an

exit route to the investors, some close-ended funds give an option of selling back the units to

the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations

stipulate that at least one of the two exit routes is provided to the investor

.

23



3. Interval Schemes:

Interval Schemes are that scheme, which combines the features of open-ended and

close-ended schemes. The units may be traded on the stock exchange or may be open for sale

or redemption during pre-determined intervals at NAV related prices.

B) BY NATURE

1. Equity Fund:

These funds invest a maximum part of their corpus into equities holdings. The

structure of the fund may vary different for different schemes and the fund manager’s outlook

on different stocks. The Equity Funds are sub-classified depending upon their investment

objective, as follows:

Diversified Equity Funds

Mid-Cap Funds

Sector Specific Funds

Tax Savings Funds (ELSS)

2. Debt Funds:

The objective of these Funds is to invest in debt papers. Government authorities,

private companies, banks and financial institutions are some of the major issuers of debt

papers. By investing in debt instruments, these funds ensure low risk and provide stable

income to the investors. Debt funds are further classified as:

Gilt Funds: Invest their corpus in securities issued by Government, popularly known

as Government of India debt papers.

Income Funds: Invest a major portion into various debt instruments such as bonds,

corporate debentures and Government securities.

MIPs: Invests maximum of their total corpus in debt instruments while they take

minimum exposure in equities.

Short Term Plans (STPs): Meant for investment horizon for three to six months.

These funds primarily invest in short term papers like Certificate of Deposits (CDs)

and Commercial Papers (CPs).

24



Liquid Funds: Also known as Money Market Schemes, These funds provides easy

liquidity and preservation of capital. These schemes invest in short-term instruments

like Treasury Bills, inter-bank call money market, CPs and CDs..

3. Balanced Funds:

As the name suggest they, are a mix of both equity and debt funds. They invest in

both equities and fixed income securities, which are in line with pre-defined investment

objective of the scheme.

C) BY INVESTMENT OBJECTIVE:

1. Growth Schemes:

Growth Schemes are also known as equity schemes. The aim of these schemes is to

provide capital appreciation over medium to long term.

2 Income Schemes:

Income Schemes are also known as debt schemes. The aim of these schemes is to

provide regular and steady income to investors. These schemes generally invest in fixed

income securities such as bonds and corporate debentures. Capital appreciation in such

schemes may be limited.

3. Balanced Schemes:

Balanced Schemes aim to provide both growth and income by periodically

distributing a part of the income and capital gains they earn.

4. Money Market Schemes:

Money Market Schemes aim to provide easy liquidity, preservation of capital and

moderate income. These schemes generally invest in safer, short-term instruments, such as

treasury bills, certificates of deposit, commercial paper and inter-bank call money.

Load Funds:

A Load Fund is one that charges a commission for entry or exit. That is, each time

you buy or sell units in the fund, a commission will be payable. Typically entry and exit loads

range from 1% to 2%.

25



No-Load Funds:

A No-Load Fund is one that does not charge a commission for entry or exit. That is,

no commission is payable on purchase or sale of units in the fund.

D) OTHER SCHEMES:

1. Tax Saving Schemes:

Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from

time to time. Under Sec.88 of the Income Tax Act, contributions made to any Equity Linked

Savings Scheme (ELSS) are eligible for rebate.

2. Index Schemes:

Index schemes attempt to replicate the performance of a particular index such as the BSE

Sensex or the NSE 50.

3. Sector Specific Schemes:

These are the funds/schemes which invest in the securities of only those sectors or industries

as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer

Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the

performance of the respective sectors/industries.

1.12 SEBI Rules and Regulations for Mutual Fund:-

The following restrictions apply to mutual fund companies:

A mutual fund company may not purchase securities on margin.

A mutual fund company may not own a joint account that trades securities.

A mutual fund company may not affect a short sale of any security.

A mutual fund company may not purchase more than 3% of the outstanding voting

stock of another investment company.

26



Section 12b-1

Section 12b-1 of the Investment Company Act of 1940 allows the mutual fund company to

pay the principal underwriter for the costs of sales literature, promotional items and other

selling expenses by collecting 12b-1 fees. These fees are charged to fund's shares and are

permissible if the following conditions are met:

Payments to the principal underwriter are made according to a written plan that

outlines the proposed financing and distribution agreement

The majority of shareholders and majority of non affiliated directors initially approves

and continues to annually approve the plan

The board of directors reviews the payments under the plan at least quarterly

The plan and its related agreements may be terminated without penalty at any time

with 60 days written notice

Shareholder Rights

An investment company must abide by certain shareholder rights. The following activities are

prohibited unless approved by a majority shareholder vote:

A mutual fund company may not borrow money, make loans, buy or sell real estate,

or underwrite securities issued by other companies.

A mutual fund company may not change its investment objectives.

A mutual fund company may not change the nature of its business and cease acting as

an investment company.

A mutual fund company cannot change from a diversified form to an undiversified

one.

Shareholders must also receive certain semiannual financial reports, including the following:

A balance sheet and a statement of the fund's total investment value

An income statement for the period covered

A list of the securities' amounts and values on the date the balance sheet was issued

A statement of the salaries and other monies paid to the directors, advisory board and

officers

Total dollar amounts of securities purchases and sales

http://www.investopedia.com/terms/1/12b-1plan.asp

27



1.13 Frequently used terms:-

Net Asset Value (NAV)

Net Asset Value is the market value of the assets of the scheme minus its

liabilities. The per unit NAV is the net asset value of the scheme divided by the

number of units outstanding on the Valuation Date.

Sale Price

Is the price you pay when you invest in a scheme. Also called Offer Price. It

may include a sales load.

Repurchase Price

Is the price at which a close-ended scheme repurchases its units and it may

include a back-end load. This is also called Bid Price.

Redemption Price

Is the price at which open-ended schemes repurchase their units and close-

ended schemes redeem their units on maturity. Such prices are NAV related.

Sales Load

Is a charge collected by a scheme when it sells the units. Also called, ‘Front-

end’ load. Schemes that do not charge a load are called ‘No Load’ schemes.

Repurchase or ‘Back-end’Load

Is a charge collected by a scheme when it buys back the units from the unit

holders.

28



CHAPTER – 2

Introduction

of Company

29



2.1 COMPANY PROFILE

Introduction:

SBI Mutual Fund (SBI MF) is one of the largest mutual funds in the country with an investor

base of over 5.8 million. With over 20 years of rich experience in fund management, SBI MF

brings forward its expertise in consistently delivering value to its investors.

SBI MF draws its strength from India's Largest Bank State Bank of India and Société

Générale Asset Management, France

SBI Mutual Fund is India’s largest bank sponsored mutual fund and has an enviable

track record in judicious investments and consistent wealth creation. The fund traces

its lineage to SBI - India’s largest banking enterprise. The institution has grown

immensely since its inception and today it is India's largest bank, patronized by over

80% of the top corporate houses of the country. SBI Mutual Fund is a joint venture

between the State Bank of India and Society General Asset Management, one of the

world’s leading fund management companies that manages over US$ 500 Billion

worldwide. At SBI Mutual Fund, resources are considerably devoted to gain,

maintain and sustain profitable insights into market movements. The trust reposed on

SBI-MF by over 5.4 million investors is a genuine tribute to its expertise in Fund

Management. SBI Mutual Fund is India’s largest bank sponsored mutual fund and has

an enviable track record in judicious investments and consistent wealth creation.

Their main motto is "Growth through innovation and stable investment policies."

The fund serves this vast family of investors by reaching out to them through network of over

130 points of acceptance, 29 investor service centers, 59 investor service desks and 6 Investor

Service Points.

SBI Mutual is the first bank-sponsored fund to launch an offshore fund – Resurgent India

Opportunities Fund.

Growth through innovation and stable investment policies is the SBI MF credo.

Sponsor: State Bank of India

30



Trustee: SBI Mutual Fund Trustee Company Private Limited

Investment Manager: SBI Funds Management Private Limited Statutory Details: SBI

Mutual Fund (SBIMF); constituted as a Trust with SBIMFTCPL as the Trustee under the

provisions of Indian Trusts Act, 1882, and registered with SEBI.

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.”

Identity:

With 25 years of rich experience in fund management, we at SBI Funds Management Pvt.

Ltd. bring forward our expertise by consistently delivering value to our investors. We have a

strong and proud lineage that traces back to the State Bank of India (SBI) - India's largest

bank. We are a Joint Venture between SBI and AMUNDI (France), one of the world's leading

fund management companies.

With our network of over 222 points of acceptance across India, we deliver value and nurture

the trust of our vast and varied family of investors.

Excellence has no substitute. And to ensure excellence right from the first stage of product

development to the post-investment stage, we are ably guided by our philosophy of ‘growth

through innovation’ and our stable investment policies. This dedication is what helps our

customers achieve their financial objectives.

Services provided by them:

Mutual Funds:

Investors are our priority. Our mission has been to establish Mutual Funds as a viable

investment option to the masses in the country. Working towards it, we developed innovative,

need-specific products and educated the investors about the added benefits of investing in

capital markets via Mutual Funds.

Today, we have been actively managing our investor's assets not only through our investment

expertise in domestic mutual funds, but also offshore funds and portfolio management

advisory services for institutional investors.

This makes us one of the largest investment management firms in India, managing

investment mandates of over 5.4 million investors.

31



Portfolio Management and Advisory Services:

SBI Funds Management has emerged as one of the largest player in India advising various

financial institutions, pension funds, and local and international asset management

companies.

We have excelled by understanding our investor's requirements and terms of risk / return

expectations, based on which we suggest customized asset portfolio recommendations. We

also provide an integrated end-to-end customized asset management solution for institutions

in terms of advisory service, discretionary and non-discretionary portfolio management

services.

Offshore Funds:

SBI Funds Management has been successfully managing and advising India's dedicated

offshore funds since 1988. SBI Funds Management was the 1st bank sponsored asset

management company fund to launch an offshore fund called 'SBI Resurgent India

Opportunities Fund' with an objective to provide our investors with opportunities for long-

term growth in capital, through well-researched investments in a diversified basket of stocks

of Indian Companies.

Investment Objective:

Setting benchmarks time and again. For our investors.

Our objective is to endeavor to outperform our benchmarks through well researched

investments in Indian equities. This is achieved by implementing an active management style

based on fundamental analysis, leading to the construction of a portfolio. It could be blended,

large cap, mid cap, or specific sector oriented - which aims at capturing the growth potential

of Indian equities.

32



2.2 INVESTMENT TEAM:

Navneet Munot

Executive Director & Chief Investment Officer

Vincent Fravel

Vice President – Investments

Fund Managers – Equity:

R. Srinivasan

Head – Equities

Jayesh Shroff

Fund Manager

Sohini Andani

Fund Manager

Richard D’Souza

Fund Manager

Raviprakash Sharma

Chief Dealer & Fund Manager

Ruchit Mehta

Fund Manager

Tanmay Desai

Fund Manager

Saurabh Pant

Fund Manager

Dharmendra Grover

Fund Manager

Neeraj Kumar

Dealer

http://www.sbimf.com/AboutUs/Fund_House_Expertise/Investment_Team.aspx










33



Fund Managers - Fixed Income

Rajeev Radhakrishnan

Head - Fixed Income

Dinesh Ahuja

Fund Manager

R Arun

Fund Manager

Dinesh Balachandran

Fund Manager

Portfolio Management Services

Ajit Dange

Head PMS (Domestic Buseness)

Aashish Wakankar

Vice President – PMS (Offshore)

Amruth Rao

Senior Fund Manager – PMS (Debt)

TRUSTEES:

SBI Mutual Fund Trustee Company Private Limited (the “Trustee”), through its Board of

Directors discharge its obligations as Trustee of the SBI Mutual Fund. The Board of

Directors of SBI Mutual Fund Trustee Company Private Limited are as under

Shri T.L. Palani Kumar

Independent

Shri C.M. Dixit

Independent

Mr. Shriniwas Joshi

Independent

Mr. Krishnamurthy Vijayan

Independent

Ms. Anshula Kant

Associate Director

Mr. Richard Mendonca

Associate Director








34



MANAGEMENT TEAM :

Mr. Dinesh Kumar Khara

MD & CEO

Mr. Philippe Batchevitch

Deputy CEO

Mr.Arun Agrawal

Chief Operating Officer

Mr. Navneet Munot

Executive Director & Chief Investment

Officer

Mr. R. S. Srinivas Jain

Executive Director & Chief Marketing

Officer (Strategy and International Business)

Mr. D. P. Singh

Executive Director & Chief Marketing

Officer (Domestic Business)

Ms. Aparna Nirgude

Chief Risk Officer

Mr. Rakesh Kaushik

Senior Vice President (Accounts &

Administration)

Ms. Vinaya Datar

CS & Compliance Officer

Mr. C. A. Santosh

Head - Customer Service

2.3 AWARDS RECEIVED:

At SBI Funds Management, we devote considerable resources to gain, maintain and sustain

our profitable insights into market movements. The trust reposed on us by millions of

investors is a genuine tribute to our expertise in Fund Management and dedication to our

singular focus. And this has resulted in various awards and accolades for us from the fund

industry, motivating us to do better. Some of the awards won by us are listed below

http://www.sbimf.com/AboutUs/Management_Team.aspx










35



2012

ICRA Mutual Fund Awards 2012 For Various Schemes

2011

Readers Digest Awards 2011 For Trusted Brand in Fund Management Category

ICRA Mutual Fund Awards 2011 For Magnum Income Fund - Floating Rate Plan - Long

Term Plan

2010

ICRA Mutual Fund Awards 2010 For Magnum Global Fund

2009

ICRA Mutual Funds Awards 2009 For Magnum Tax Gain Scheme 1993

The Lipper India Fund Awards 2009 For Various Schemes

2008

Outlook Money NDTV Profit Awards 2008

The Lipper India Fund Awards 2008 For Magnum Balanced Fund – Dividend

ICRA Mutual Fund Awards 2008 For Various Schemes

2007

Outlook Money NDTV Profit Awards 2007

CNBC Awaaz Consumer Awards 2007

The Lipper India Fund Awards 2007 For Various Schemes

ICRA Mutual Funds Awards 2007 For Various Schemes

http://www.sbimf.com/AboutUs/Awards_Achievements.aspx














36



2.4 Various schemes/ Products of Sbi mutual fund:

1. EQUITY SCHEMES:

The primary objective of the equity asset class is to provide capital growth / appreciation by

investing in the equity and equity related instruments of companies over medium to long

term.

Equity/ Growth Funds:

SBI Magnum Equity Fund

SBI Magnum Global Fund

SBI BlueChip Fund

SBI Magnum Multicap Fund

SBI Magnum Multiplier Plus 1993

SBI Small and Midcap Fund

SBI Magnum Midcap Fund

Sectoral Funds:

SBI Emerging Businesses Fund

SBI Contra Fund

SBI FMCG Fund

SBI IT Fund

SBI Pharma Fund

Thematic Funds

SBI Magnum COMMA Fund

SBI Infrastructure Fund

SBI PSU Fund

ELSS Funds

SBI Magnum Taxgain Scheme 1993

SBI Tax Advantage Fund - Series I

SBI Tax Advantage Fund - Series II

SBI Tax Advantage Fund - Series III

http://www.sbimf.com/Products/EquitySchemes/Magnum_Equity_Fund.aspx

http://www.sbimf.com/Products/EquitySchemes/Magnum_Global_Fund.aspx

http://www.sbimf.com/Products/EquitySchemes/SBI_Blue_Chip_Fund.aspx

http://www.sbimf.com/Products/EquitySchemes/Magnum_Multicap_Fund.aspx

http://www.sbimf.com/Products/EquitySchemes/Magnum_Multiplier_Plus_1993.aspx

http://www.sbimf.com/Products/EquitySchemes/SBI_Small_and_Midcap_Fund.aspx

http://www.sbimf.com/Products/EquitySchemes/Magnum_Midcap_Fund.aspx

http://www.sbimf.com/Products/EquitySchemes/MSFU_-_Emerging_Businesses_Fund.aspx

http://www.sbimf.com/Products/EquitySchemes/MSFU_-_Contra_Fund.aspx

http://www.sbimf.com/Products/EquitySchemes/MSFU_-_FMCG_Fund.aspx

http://www.sbimf.com/Products/EquitySchemes/MSFU_-_IT_Fund.aspx

http://www.sbimf.com/Products/EquitySchemes/MSFU_-_Pharma_Fund.aspx

http://www.sbimf.com/Products/EquitySchemes/Magnum_Comma_Fund.aspx

http://www.sbimf.com/Products/EquitySchemes/SBI_Infrastructure_Fund_-_Series_I.aspx

http://www.sbimf.com/Products/EquitySchemes/SBI_PSU_Fund.aspx

http://www.sbimf.com/Products/EquitySchemes/SBI_Magnum_Taxgain_Scheme_1993.aspx

http://www.sbimf.com/Products/EquitySchemes/SBI_TAX_ADVANTAGE_FUND_SERIES_I.aspx

http://www.sbimf.com/Products/EquitySchemes/SBI_TAX_ADVANTAGE_FUND_SERIES_II.aspx

http://www.sbimf.com/Products/EquitySchemes/sbi-tax-advantage-fund---series-iii

37



Index Funds

SBI Nifty Index Fund

Market Neutral Strategy

SBI Arbitrage Opportunities Fund

2. DEBT / INCOME SCHEMES:

The schemes in this asset class generally invest in fixed income securities such as bonds,

corporate debentures, government securities (gilts), money market instruments, etc. and

provide regular and steady income to investors.

SBI Magnum Income Fund Floating Rate Plan - Savings Plus Bond Plan

SBI Corporate Bond Fund

SBI Magnum Income Fund

SBI Benchmark Gsec Fund

SBI Treasury Advantage Fund

SBI Inflation Indexed Bond Fund

SBI Dynamic Bond Fund

SBI Magnum Gilt Fund - Short Term Plan

SBI Magnum Gilt Fund - Long Term Plan

SBI Short Term Debt Fund

SBI Ultra Short Term Debt Fund

3. LIQUID SCHEMES:

The strategy for liquid funds include investments in short investment horizon, which includes

'cash' assets such as treasury bills, certificates of deposit and commercial paper.

SBI Magnum InstaCash Fund

SBI Magnum InstaCash Fund - Liquid Floater

SBI Premier Liquid Fund

4. HYBRID SCHEMES:

http://www.sbimf.com/Products/EquitySchemes/Magnum_Index_Fund.aspx

http://www.sbimf.com/Products/EquitySchemes/SBI_Arbitrage_Opportunities_Fund.aspx

http://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Fund_Floating_Rate_Saving_Plus_Bond.aspx

http://www.sbimf.com/Products/DebtSchemes/SBI_Corporate_Bond_Fund.aspx

http://www.sbimf.com/Products/DebtSchemes/Magnum_Income_Fund.aspx

http://www.sbimf.com/Products/DebtSchemes/SBI_Benchmark_Gsec_Fund.aspx

http://www.sbimf.com/Products/DebtSchemes/SBI_Treasury_Advantage_Fund.aspx

http://www.sbimf.com/Products/DebtSchemes/sbi_inflations_indexed_bond.aspx

http://www.sbimf.com/Products/DebtSchemes/SBI_Dynamic_Bond_Fund.aspx

http://www.sbimf.com/Products/DebtSchemes/Magnum_Gilt_Fund_Short_Term.aspx

http://www.sbimf.com/Products/DebtSchemes/Magnum_Gilt_Fund_Long_Term.aspx

http://www.sbimf.com/Products/DebtSchemes/SBI_Short_Term_Debt_Fund.aspx

http://www.sbimf.com/Products/DebtSchemes/SBI_Ultra_Short_Term_Debt_Fund.aspx

http://www.sbimf.com/Products/LiquidSchemes/Magnum_InstaCash_Fund.aspx

http://www.sbimf.com/Products/LiquidSchemes/Magnum_InstaCash_Fund-Liquid_Floater_Plan.aspx

http://www.sbimf.com/Products/LiquidSchemes/SBI_Premier_Liquid_Fund.aspx

38



These schemes invest in a mixture of debt and equity securities in different proportions as

prescribed in the Scheme Information Document.

SBI Magnum Children's Benefit Plan

SBI EDGE Fund

SBI Magnum Balanced Fund

SBI Regular Savings Fund

SBI Magnum Monthly Income Plan

SBI Magnum Monthly Income Plan - Floater

5. FIXED MATURITY PLANS

These are closed ended debt schemes with a fixed maturity date and they invest in debt &

money market instruments maturing on or before the date of the maturity of the scheme.

SBI Debt Fund Series A - 1 (15 Months)


SBI Debt Fund Series A - 3 (420 Days)




SBI Debt Fund Series A - 7 (3 Years)













http://www.sbimf.com/Products/DebtSchemes/Magnum_Childrens_Benefit_Plan.aspx

http://www.sbimf.com/Products/HybridSchemes/SBI_Edge_Fund.aspx

http://www.sbimf.com/Products/HybridSchemes/Magnum_Balanced_Fund.aspx

http://www.sbimf.com/Products/HybridSchemes/Magnum_Income_Plus_Fund_Investment_Plan.aspx

http://www.sbimf.com/Products/HybridSchemes/Magnum_Monthly_Income_Plan.aspx

http://www.sbimf.com/Products/HybridSchemes/Magnum_Monthly_Income_Plan_Floater.aspx

http://www.sbimf.com/Products/FixedMaturitySchemes/SBI_Debt_Fund_Series_A_1.aspx



http://www.sbimf.com/Products/FixedMaturitySchemes/sbi-debt-fund-series-A-4.aspx

http://www.sbimf.com/Products/FixedMaturitySchemes/sbi-debt-fund-series-a-5.aspx















39














SBI Debt Fund Series 13 MONTHS 14











SBI Debt Fund Series 180 DAYS 26

















http://www.sbimf.com/Products/FixedMaturitySchemes/sbi_debt_fund_series_a_30.aspx

http://www.sbimf.com/Products/FixedMaturitySchemes/SBI_Debt_Fund_Series_a_31.aspx



http://www.sbimf.com/Products/FixedMaturitySchemes/sbi_debt_fund_series_34.aspx

http://www.sbimf.com/Products/FixedMaturitySchemes/SBI_Debt_Fund_Series_13_MONTHS_14.aspx











http://www.sbimf.com/Products/FixedMaturitySchemes/SBI_Debt_Fund_Series_180_DAYS_26.aspx











40






























SBI Fixed Interval Debt Series 90 DAYS 1

































http://www.sbimf.com/Products/FixedMaturitySchemes/SBI_Fixed_Interval_Debt_Series_90_DAYS_1.aspx

http://www.sbimf.com/Products/FixedMaturitySchemes/SBI_DEBT_FUND_SERIES_90_DAYS_80.aspx





41



6. EXCHANGE TRADED SCHEMES

Exchange Traded Funds/ Schemes (ETFs) are a basket of securities that are traded on the

stock exchange.

SBI Gold Exchange Traded Scheme

SBI SENSEX ETF

7. FUND OF FUNDS SCHEMES:

A "Fund of Funds Scheme" means a mutual fund scheme that invests primarily in other

schemes of the same mutual fund or other mutual funds.

SBI Gold Fund

http://www.sbimf.com/Products/ExchangedTradedSchemes/SBI_Gold_Exchange_Traded_Scheme.aspx

http://www.sbimf.com/Products/ExchangedTradedSchemes/SBI_SENSEX_ETF.aspx

http://www.sbimf.com/Products/FundofFundSchemes/SBI_Gold_Fund.aspx

42



CHAPTER – 3

Research

Methodology

43



3.1 Objective of study:

Primary objective:

Primary objective is to evaluate performance of selected open-ended schemes of Sbi

mutual fund.

Secondary objectives:

To understand mutual fund and it’s functioning.

Through this study, we can know how to invest in different selected open ended

equity regular plan growth schemes for better return.

It can help investors in deciding as to in which scheme they should invest.

To compare performance of various schemes by considering risk and return.

3.2 Research Design:

This study is descriptive because, it gives useful information from available data. All the

needed data are available on internet

3.3 Population:

Various Sbi mutual fund equity schemes

3.4 Sample Frame:

List of selected open ended equity regular plan growth fund schemes are sample frame of

study.

Schemes:

1. SBI Arbitrage Opportunities fund

2. SBI Magnum equity fund

3. SBI Magnum Global fund

44



4. SBI Magnum Multiplier plus scheme

5. SBI CONTRA fund

6. SBI Emerging business fund

7. SBI FMCG fund

8. SBI IT fund

9. SBI Pharma fund

3.5 Sampling Technique:

Here, Judgmental technique is to be used as here different open ended equity regular plan

growth schemes are selected as per their availability. Here different schemes are selected as

per their similarity and then comparison is done.

3.6 Source of data:

Here, Secondary sources are to be used. Sources were collected through Company’s website,

magazines, newspapers, etc…

3.7 Sample size:

1 year (2014) monthly Nav’s

3.8 Data collection:

Here data is collected from secondary source. Collection of data is based on availability and

similarity of different Sbi mutual fund schemes.

3.9 Analysis of data:

Here analysis is done by preparing charts and tables from the available data and comparison

is done to find out which Sbi equity regular plan growth scheme is giving maximum return

45



with minimum risk. Data analysis is done by calculating return of each scheme from the

available NAV. For that various tools like standard deviation and correlation were used.

3.10 Limitations of work:

1. Samples sizes is limiting factor, Data of only twelve months has been taken.

2. Past performance may not guarantee the future return.

3. The statistical tools used have many inbuilt limitations in them.

4. SBI is a very large group but in this project only same part are studied.

5. All data collected is of secondary in nature. Any limitation in the accuracy of the

secondary data carries forward to the analysis made.

6. Ten schemes are taken excluding others, so exact scenario of open ended equity

schemes in market remains unknown.

3.11 Scope of study:

It is very helpful for those who want to invest in mutual funds and other funds an who want

to expand their knowledge regarding various schemes of Sbi mutual fund. Helps to identify

the overall performance of this fund and also to identify the importance of mutual fund in

overall financial marker

For which sector the investment of SBI Mutual fund is necessary so finally from this project

the importance of SBI mutual fund can be drawn.

46



CHAPTER – 4

Data Analysis

47



Data Analysis:

Proposed Analysis Methodology:

Analysis and interpretation are central steps in the research process. The goal of analysis

is to summarize the collected data in such a way that they provide answers to the question

that triggered the research. Interpretation is the search for the broader meaning of research

findings. This research has two major aspects. First, there is a effort to establish

continuity in research through linking the results of one study with those of another.

Secondly, Interpretation leads to the establishment of explanatory concepts.

Through interpretation, the meanings and implications of the study become clear.

Analysis is not complete without interpretation and interpretation cannot proceed without

analysis. Both are thus, Interdependent.. In fact interpretation can be conceived of as a

part of analysis. It is the task of interpretation to find out a link (or) a position of the study

in the whole analytical framework, it connects the findings with the established theories

(or) the available stock of knowledge in a particular area of research.

Although, Chronologically, analysis and interpretation occupy the last stage of the

research process they occupy the first stage since the necessary theoretical and practical

knowledge of the future shape of the result is acquired much before the actual work is

undertaken.

48



Concept of NAV:

The units are available continuously for sale on all working days at NAV related prices

except during the period when there is a book closure.

The Performance of a particular scheme of a mutual fund is denoted by Net Asset Value

(NAV).

Mutual fund invests the money collected from the investors in the securities markets. In

simple words, Net Asset Value is the market value of securities held by the scheme. Since

market value of securities change everyday, NAV of a scheme also varies on day to day

basis. The NAV per unit is the market value of securities of a scheme divided by the total

number of units of the scheme on a particular date.

For example:

If the market value of securities of a mutual fund scheme is Rs 200 Lakh and the mutual fund

has issued 10 lakh units of Rs.10 each to the investors, then the NAV per unit of the fund is

Rs.20. NAV is required to be disclosed by the mutual funds on a regular basis- daily or

weekly- depending on the type of scheme.

The Following formula is utilized for calculating NAV per unit:

NAV = Total Assets – total Liabilities

Total no. of outstanding units

49



Concept of return (Rx)

Return means income received on an investment plus any change in market price usually

expressed as a present of the beginning market price of the investment. But from the

investor’s point of view, the most important outcome from an investment is the rate of return.

The return from an investment is the realizable cash flow earned by its owner during a given

period of time.

The following formula is utilized for calculating NAV per unit:

Rate of return = (Closing NAV – Opening NAV) * 100

Opening NAV

Concept of Risk:

There are five main indicators of investment risk that apply to the analysis of

stocks, bonds and mutual fund portfolios. They are alpha, beta, r-squared, standard

deviation and the Sharpe ratio. These statistical measures are historical predictors of

investment risk/volatility and are all major components of modern portfolio theory (MPT).

The MPT is a standard financial and academic methodology used for assessing the

performance of equity, fixed-income and mutual fund investments by comparing them to

market benchmarks.

All of these risk measurements are intended to help investors determine the risk-

reward parameters of their investments.

http://www.investopedia.com/terms/s/stock.asp#axzz1qES7lzU6

http://www.investopedia.com/terms/b/bond.asp

http://www.investopedia.com/terms/m/mutualfund.asp#axzz1qES7lzU6

http://www.investopedia.com/terms/p/portfolio.asp#axzz1qES7lzU6

http://www.investopedia.com/terms/a/alpha.asp

http://www.investopedia.com/terms/b/beta.asp

http://www.investopedia.com/terms/r/r-squared.asp

http://www.investopedia.com/terms/s/standarddeviation.asp#axzz1qES7lzU6

http://www.investopedia.com/terms/s/standarddeviation.asp#axzz1qES7lzU6

http://www.investopedia.com/terms/s/sharperatio.asp

http://www.investopedia.com/terms/v/volatility.asp#axzz1qES7lzU6

http://www.investopedia.com/terms/m/modernportfoliotheory.asp

http://www.investopedia.com/terms/e/equity.asp#axzz1qES7lzU6

http://www.investopedia.com/terms/b/benchmark.asp#axzz1qES7lzU6

http://www.investopedia.com/terms/r/riskrewardratio.asp

http://www.investopedia.com/terms/r/riskrewardratio.asp

50



Tools for Analysis:

For the calculation of RISK and RETURN following measurement terms are used.

BETA:

Beta is used to describe relationship between the stock’s return and market index’s return. If

beta is -1 means, 1% change in the market index shows that it is on an average accompanied

by a 1% change in the security price. Beta may be +ve or –ve. Usually Beta are found to be

+ve. We rarely find a negative beta, which reflects a movement contrary to the market. 0.5%

price change in security. It is useful pieces of information for both far individual stock as well

as portfolios, but as a measure of portfolio.

In short beta is 1, the script risk is the same as the market risk. If beta is greater than 1, the

script risk is more than the market risk & if beta is less than 1, the script risk is less than the

market risk. If beta is zero, stock price is unrelated to market index.

ALPHA:

Alpha is a measure of investments performance on a risk adjusted basis. It takes the

volatility of a security or fund portfolio and compares its risk adjusted performance to a

benchmark index. The access return of the investment relative to the return of the benchmark

index is its “alpha”.

Simply stated, alpha is often considered to represent the value that a portfolio manager adds

or subtracts from a fun portfolio’s return. A positive alpha of 1.0 means the fund has

outperformed its benchmark index by 1%. A similar negative alpha would indicate an

underperformance of 1%. For investors, the more positive alpha is the better it is.

51



STANDARD DEVIATION:

It measures dispersion of expected returns. It is statistical concept & is used to measure risk

of single security. A high S.D. represents a large dispersion of return & is a vise-a- versa.

CO-EFFICIENT CORRELATION:

It is a measure to indicate the similarity or the dissimilarity in the behaviour of 2 securities.

Range of it is from -1 to +1, it shows minimum risk of holding 2 securities. If rxy= +1,it

shows maximum risk of holding 2 securities.

AVERAGE RETURN:

It shows the average return of NAV of different schemes in calculation.

SHARP CALCULATION:

It shows the risk factor involve in the schemes. It measures the difference between average

return on NAV and S.D.

52



SBI ARBITRAGE OPPOURTUNITIES FUND:

Calculation of return

Year=2014

Return= NAV in the closing- NAV in the opening

NAV in the opening

Month opening value closing value P1-P0 (P1-P0)/P0*100

Jan 17.23 17.23

Feb 17.23 17.33 0.1 0.58

Mar 17.33 17.45 0.12 0.69

Apr 17.45 17.59 0.14 0.80

May 17.59 17.73 0.14 0.80

Jun 17.73 17.82 0.09 0.51

Jul 17.82 17.98 0.16 0.90

Aug 17.98 18.1 0.12 0.67

Sep 18.1 18.2 0.1 0.55

Oct 18.2 18.32 0.12 0.66

Nov 18.32 18.41 0.09 0.49

Dec 18.41 18.55 0.14 0.76

Total return 7.41

53



SBI MAGNUM MULTIPLIER PLUS SCHEME:

Calculation of return:

Year=2014


NAV in the opening

Month opening value closing value P1-P0 (P1-

P0)/P0*100

Jan 0 94.59 94.59 `

Feb 94.59 98.5 3.91 4.13

Mar 98.5 103.36 4.86 4.93

Apr 103.36 104.56 1.2 1.16

May 104.56 114.72 10.16 9.72

Jun 114.72 123.47 8.75 7.63

Jul 123.47 124.51 1.04 0.84

Aug 124.51 131.43 6.92 5.56

Sep 131.43 133.33 1.9 1.45

Oct 133.33 138.23 4.9 3.68

Nov 138.23 144.44 6.21 4.49

Dec 144.44 143.95 -0.49 -0.34

Total return 43.25

54



SBI CONTRA FUND

Calculation of return:

Year=2014


NAV in the opening

Month opening value closing value P1-P0 (P1-P0)/P0*100

Jan 55.96 55.96

Feb 55.96 57.88 1.92 3.43

Mar 57.88 61.95 4.07 7.03

Apr 61.95 62.41 0.46 0.74

May 62.41 67.8 5.39 8.64

Jun 67.8 72.15 4.35 6.42

Jul 72.15 73.02 0.87 1.21

Aug 73.02 77.32 4.3 5.89

Sep 77.32 78.05 0.73 0.94

Oct 78.05 80.93 2.88 3.69

Nov 80.93 85.16 4.23 5.23

Dec 85.16 85.23 0.07 0.08

Total return 43.30

55



SBI EMERGING FUND:

Calculation of return

Year=2014


NAV in the opening


P0)/P0*100

Jan 54.17 54.17

Feb 54.17 54.75 0.58 1.07

Mar 54.75 59.39 4.64 8.47

Apr 59.39 60.68 1.29 2.17

May 60.68 66.86 6.18 10.18

Jun 66.86 72.85 5.99 8.96

Jul 72.85 76.08 3.23 4.43

Aug 76.08 78.69 2.61 3.43

Sep 78.69 81.68 2.99 3.80

Oct 81.68 82.92 1.24 1.52

Nov 82.92 86.38 3.46 4.17

Dec 86.38 89.06 2.68 3.10

Total return 51.32

56



SBI FMCG FUND

Year=2014


NAV in the opening


P0)/P0*100

Jan 53.84 53.84

Feb 53.84 53.59 -0.25 -0.46

Mar 53.59 57.25 3.66 6.83

Apr 57.25 57.21 -0.04 -0.07

May 57.21 58.5 1.29 2.25

Jun 58.5 58.98 0.48 0.82

Jul 58.98 63.14 4.16 7.05

Aug 63.14 64.32 1.18 1.87

Sep 64.32 68.45 4.13 6.42

Oct 68.45 68.34 -0.11 -0.16

Nov 68.34 70.29 1.95 2.85

Dec 70.29 71.87 1.58 2.25

Total

return

29.65

57



SBI IT FUND

Year=2014


NAV in the opening


P0)/P0*100

Jan 36.74 36.74

Feb 36.74 38.51 1.77 4.82

Mar 38.51 34.56 -3.95 -10.26

Apr 34.56 34.77 0.21 0.61

May 34.77 33.84 -0.93 -2.67

Jun 33.84 37.72 3.88 11.47

Jul 37.72 39.14 1.42 3.76

Aug 39.14 41.48 2.34 5.98

Sep 41.48 44.07 2.59 6.24

Oct 44.07 44.58 0.51 1.16

Nov 44.58 46.85 2.27 5.09

Dec 46.85 45.52 -1.33 -2.84

Total return 23.36

58



SBI Pharma fund

Year=2014


NAV in the opening


P0)/P0*100

Jan 77.93 77.93

Feb 77.93 84.13 6.2 7.96

Mar 84.13 79.08 -5.05 -6.00

Apr 79.08 82.75 3.67 4.64

May 82.75 79.27 -3.48 -4.21

Jun 79.27 90.76 11.49 14.49

Jul 90.76 97.91 7.15 7.88

Aug 97.91 104.44 6.53 6.67

Sep 104.44 111.86 7.42 7.10

Oct 111.86 111.77 -0.09 -0.08

Nov 111.77 118.29 6.52 5.83

Dec 118.29 118.66 0.37 0.31

Total

return

44.60

59



SBI Magnum Equity fund

Year=2014


NAV in the opening


P0)/P0*100

Jan 49.06 49.06

Feb 49.06 50.59 1.53 3.12

Mar 50.59 53.96 3.37 6.66

Apr 53.96 54.16 0.2 0.37

May 54.16 58.44 4.28 7.90

Jun 58.44 62.09 3.65 6.25

Jul 62.09 63.03 0.94 1.51

Aug 63.03 66.34 3.31 5.25

Sep 66.34 66.58 0.24 0.36

Oct 66.58 69.76 3.18 4.78

Nov 69.76 73.36 3.6 5.16

Dec 73.36 72.1 -1.26 -1.72

Total return 39.65


60



Year=2014


NAV in the opening

Month opening value Closing value P1-P0 (P1-P0)/P0*100

Jan 72.78 72.78

Feb 72.78 75 2.22 3.05

Mar 75 81.34 6.34 8.45

Apr 81.34 82 0.66 0.81

May 82 90.26 8.26 10.07

Jun 90.26 97.83 7.57 8.39

Jul 97.83 100.1 2.27 2.32

Aug 100.1 108.53 8.43 8.42

Sep 108.53 112.39 3.86 3.56

Oct 112.39 114.69 2.3 2.05

Nov 114.69 119.13 4.44 3.87

Dec 119.13 124.36 5.23 4.39

Total return 55.38

61



Calculation of Risk:

1. SBI Arbitrage opportunities fund:

Month S&P CNX

Nifty

Return NAV Return

January 6,089.50 17.23

February 6,276.95 3.08 17.33 0.58

March 6,704.20 6.81 17.45 0.69

April 6,696.40 -0.12 17.59 0.80

May 7,229.95 7.97 17.73 0.80

June 7,611.35 5.28 17.82 0.51

July 7,721.30 1.44 17.98 0.90

August 7,954.35 3.02 18.1 0.67

September 7,964.80 0.13 18.2 0.55

October 8,322.20 4.49 18.32 0.66

November 8,588.25 3.20 18.41 0.49

December 8,282.70 -3.56 18.55 0.76

Total 31.73 7.41

Average return 0.62

S.D 0.13

Sharpe Calculation 4.77

Correlation 0.97

Alpha 0.69

Beta -0.01

62



Calculation of risk:

2. SBI Magnum Multiplier Plus Scheme:

month S&P CNX

Nifty

Return NAV Return

January 6,089.50 94.59

February 6,276.95 3.08 98.5 4.13

March 6,704.20 6.81 103.36 4.93

April 6,696.40 -0.12 104.56 1.16

May 7,229.95 7.97 114.72 9.72

June 7,611.35 5.28 123.47 7.63

July 7,721.30 1.44 124.51 0.84

August 7,954.35 3.02 131.43 5.56

September 7,964.80 0.13 133.33 1.45

October 8,322.20 4.49 138.23 3.68

November 8,588.25 3.20 144.44 4.49

December 8,282.70 -3.56 143.95 -0.34

Total 31.73 43.25

Average return 3.60

S.D 3.05


Correlation 0.99

Alpha 1.59

Beta 0.81

63




3. SBI CONTRA Fund:

Month S&P CNX

Nifty

Return NAV Return

January 6,089.50 55.96

February 6,276.95 3.08 57.88 3.43

March 6,704.20 6.81 61.95 7.03

April 6,696.40 -0.12 62.41 0.74

May 7,229.95 7.97 67.8 8.64

June 7,611.35 5.28 72.15 6.42

July 7,721.30 1.44 73.02 1.21

August 7,954.35 3.02 77.32 5.89

September 7,964.80 0.13 78.05 0.94

October 8,322.20 4.49 80.93 3.69

November 8,588.25 3.20 85.16 5.23

December 8,282.70 -3.56 85.23 0.08

Total 31.73 43.30

Average return 3.61

S.D 2.92


Correlation 0.99

Alpha 1.61

Beta 0.81

64




4. SBI Emerging Business Fund:

Month S&P CNX

Nifty

Return NAV Return

January 6,089.50 54.17

February 6,276.95 3.08 54.75 1.07

March 6,704.20 6.81 59.39 8.47

April 6,696.40 -0.12 60.68 2.17

May 7,229.95 7.97 66.86 10.18

June 7,611.35 5.28 72.85 8.96

July 7,721.30 1.44 76.08 4.43

August 7,954.35 3.02 78.69 3.43

September 7,964.80 0.13 81.68 3.80

October 8,322.20 4.49 82.92 1.52

November 8,588.25 3.20 86.38 4.17

December 8,282.70 -3.56 89.06 3.10

Total 31.73 51.32

Average return 4.28

S.D 3.12


Correlation 0.99

Alpha 2.89

Beta 0.61

65




5. SBI FMCG Fund:

Month S&P CNX

Nifty

Return NAV Return

January 6,089.50 53.84

February 6,276.95 3.08 53.59 -0.46

March 6,704.20 6.81 57.25 6.83

April 6,696.40 -0.12 57.21 -0.07

May 7,229.95 7.97 58.5 2.25

June 7,611.35 5.28 58.98 0.82

July 7,721.30 1.44 63.14 7.05

August 7,954.35 3.02 64.32 1.87

September 7,964.80 0.13 68.45 6.42

October 8,322.20 4.49 68.34 -0.16

November 8,588.25 3.20 70.29 2.85

December 8,282.70 -3.56 71.87 2.25

Total 31.73 29.65

Average return 2.47

S.D 2.83


Correlation 0.94

Alpha 2.72

Beta -0.01

66




6. SBI IT Fund:

month S&P CNX

Nifty

Return NAV Return

January 6,089.50 36.74

February 6,276.95 3.08 38.51 4.82

March 6,704.20 6.81 34.56 -10.26

April 6,696.40 -0.12 34.77 0.61

May 7,229.95 7.97 33.84 -2.67

June 7,611.35 5.28 37.72 11.47

July 7,721.30 1.44 39.14 3.76

August 7,954.35 3.02 41.48 5.98

September 7,964.80 0.13 44.07 6.24

October 8,322.20 4.49 44.58 1.16

November 8,588.25 3.20 46.85 5.09

December 8,282.70 -3.56 45.52 -2.84

Total 31.73 23.36

Average return 1.95

S.D 5.85


Correlation 0.81

Alpha 2.84

Beta -0.25

67




7. SBI Pharma Fund:

Month S&P CNX

Nifty

Return NAV Return

January 6,089.50 77.93

February 6,276.95 3.08 84.13 7.96

March 6,704.20 6.81 79.08 -6.00

April 6,696.40 -0.12 82.75 4.64

May 7,229.95 7.97 79.27 -4.21

June 7,611.35 5.28 90.76 14.49

July 7,721.30 1.44 97.91 7.88

August 7,954.35 3.02 104.44 6.67

September 7,964.80 0.13 111.86 7.10

October 8,322.20 4.49 111.77 -0.08

November 8,588.25 3.20 118.29 5.83

December 8,282.70 -3.56 118.66 0.31

Total 31.73 44.60

Average return 3.72

S.D 5.99


Correlation 0.91

Alpha 5.45

Beta -0.48

68




8. SBI Magnum Equity Fund:

Average return 3.30

S.D 3.09


Correlation 0.96

Alpha 1.01

Beta 0.90

Month S&P CNX

Nifty

Return NAV Return

January 6,089.50 49.06

February 6,276.95 3.08 50.59 3.12

March 6,704.20 6.81 53.96 6.66

April 6,696.40 -0.12 54.16 0.37

May 7,229.95 7.97 58.44 7.90

June 7,611.35 5.28 62.09 6.25

July 7,721.30 1.44 63.03 1.51

August 7,954.35 3.02 66.34 5.25

September 7,964.80 0.13 66.58 0.36

October 8,322.20 4.49 69.76 4.78

November 8,588.25 3.20 73.36 5.16

December 8,282.70 -3.56 72.1 -1.72

Total 31.73 39.65

69




9. SBI Magnum Global Fund:

month S&P CNX

Nifty

Return NAV Return

January 6,089.50 72.78

February 6,276.95 3.08 75 3.05

March 6,704.20 6.81 81.34 8.45

April 6,696.40 -0.12 82 0.81

May 7,229.95 7.97 90.26 10.07

June 7,611.35 5.28 97.83 8.39

July 7,721.30 1.44 100.1 2.32

August 7,954.35 3.02 108.53 8.42

September 7,964.80 0.13 112.39 3.56

October 8,322.20 4.49 114.69 2.05

November 8,588.25 3.20 119.13 3.87

December 8,282.70 -3.56 124.36 4.39

Total 31.73 55.38

Average return 4.62

S.D 3.19


Correlation 0.98

Alpha 3.28

Beta 0.61

70



SBI Arbitrage Opportunities Fund:

Interpretation:

The graph shows, NAV of SBI Arbitrage oppourtunities fund and nifty index values for the y

ear 2014

As from above data it can be seen that with the increase in nifty index, the NAV of the

scheme is also increasing.

As against risk of of risk of 0.13, which means that the chances 0.13% average return is

deviated from expected return and there is a return of 7.41.

The scheme indicates alpha of 0.69 which means the fund has outperformed its benchmark

index by 0.69% and also there can be deviation of 0.69% in the actual returns and expected

returns.

The scheme indicates beta = -0.01 indicates that the investment will be less volatile than the

market.

Here the Sharpe ratio is 4.77 means 4.77% of risk is involved in the difference between

average return and risk.

SBI Arbitrage Opportunities fund

5000

6000

7000

8000

9000

January

Febuary

March

AprilM

ayJu

neJu

ly

August

September

October

November

December

16.5

17

17.5

18

18.5

19

S&P CNX Nifty NAV

71



SBI Magnum Multiplier Plus Scheme:

Interpretation:

The graph shows, NAV of SBI Magnum Multiplier plus Scheme and nifty index values for

the year 2014







returns.

The scheme indicates beta = 0.81 which indicates that the investment will be less volatile

than the market.



SBI Magnum Multiplier Plus Scheme

0.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

8,000.00

9,000.00

10,000.00

January

Febuary

March

AprilM

ayJu

neJu

ly

August

September

October

November

December

0

20

40

60

80

100

120

140

160

S&P CNX Nifty NAV

72



SBI CONTRA Fund:

Interpretation:

The graph shows, NAV of SBI CONTRA Scheme and nifty index values for the year 2014







returns.


than the market.



SBI CONTRA Fund

0.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

8,000.00

9,000.00

10,000.00

Januar

y

Febuar

y

Marc

hApril

May

June

July

August

Septe

mber

October

Novem

ber

Decem

ber

0

10

20

30

40

50

60

70

80

90

S&P CNX Nifty NAV

73



SBI Emerging Business Fund

0.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

8,000.00

9,000.00

10,000.00

January

Febuary

Marc

hApril

May

June

July

August

Septe

mber

October

Novem

ber

Decem

ber

0

10

20

30

40

50

60

70

80

90

100

S&P CNX Nifty NAV

SBI Emerging Business Fund:

Interpretation:

The graph shows, NAV of SBI Emerging Business Scheme and nifty index values for the

year 2014







returns.


than the market.



74



SBI FMCG Fund

0.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

8,000.00

9,000.00

10,000.00

Januar

y

Febuar

y

Marc

hApril

May

June

July

August

Septe

mber

October

Novem

ber

Decem

ber

0

10

20

30

40

50

60

70

80

S&P CNX Nifty NAV

SBI FMCG Fund:

Interpretation:

The graph shows, NAV of SBI FMCG Scheme and nifty index values for the year 2014







returns.

The scheme indicates beta = -0.01 which indicates that the investment will be less volatile

than the market.



75



SBI IT Fund

0.001,000.002,000.003,000.004,000.005,000.006,000.007,000.008,000.009,000.00

10,000.00

Januar

y

Febuar

y

Marc

hApril

May

June

July

August

Septe

mber

October

Novem

ber

Decem

ber

05101520253035404550

S&P CNX Nifty NAV

SBI IT Fund:

Interpretation:

The graph shows, NAV of SBI IT Scheme and nifty index values for the year 2014



As against risk of of risk of 5.85, which is quite higher, means that the chances 5.85%

average return is deviated from expected return and there is a return of 23.36 which is not so

high.



returns.


than the market.



76



SBI Pharma Fund

0.001,000.002,000.003,000.004,000.005,000.006,000.007,000.008,000.009,000.00

10,000.00

Januar

y

Febuar

y

Marc

hApril

May

June

July

August

Septe

mber

Oct

ober

Nove

mber

Decem

ber

0

20

40

60

80

100

120

140

S&P CNX Nifty NAV

SBI Pharma Fund:

Interpretation:

The graph shows, NAV of SBI Pharma Scheme and nifty index values for the year 2014



As against risk of of risk of 5.99, which is highest among all schemes, means that the

chances 5.99% average return is deviated from expected return and there is a return of 44.60.

The scheme indicates alpha of 5.45 which is highest among all schemes means the fund has

outperformed its benchmark index by 5.45% and also there can be deviation of 5.45% in the

actual returns and expected returns.

The scheme indicates beta = -0.48 which indicates that the investment will be less volatile

than the market.



77



Sbi Magnum Equity fund

0.001,000.002,000.003,000.004,000.005,000.006,000.007,000.008,000.009,000.00

10,000.00

Januar

y

Febuar

y

Marc

hApril

May

June

July

August

Septe

mber

October

Novem

ber

Decem

ber

0

10

20

30

40

50

60

70

80

S&P CNX Nifty NAV

SBI Magnum Equity Fund:

Interpretation:

The graph shows, NAV of SBI Magnum Equity fund and nifty index values for the year 2014



As against risk of 3.09 indicates that there are chances 3.09% average return is deviated from

expected return and there is a return of 39.65.

The scheme indicates alpha of 1.01 means the fund has outperformed its benchmark index by

1.01% and also there can be deviation of 1.01% in the actual returns and expected returns.


than the market.



78




0.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

8,000.00

9,000.00

10,000.00

Janu

ary

Febu

ary

Mar

ch

Apr

il

May

June July

Aug

ust

Sept

embe

r

Oct

ober

Nov

embe

r

Dec

embe

r

0

20

40

60

80

100

120

140

S&P CNX Nifty NAV

SBI Magnum Global Fund:

Interpretation:

The graph shows, NAV of SBI Magnum Global Scheme and nifty index values for the year

2014



As against risk of 3.19 indicates that there are chances 3.19% average return is deviated from

expected return and there is a return of 55.38.

The scheme indicates alpha of 3.28 means the fund has outperformed its benchmark index by

3.28% and also there can be deviation of 3.28% in the actual returns and expected returns.


than the market.



79



Average return:

1. SBI Arbitrage Opportunities fund 0.62

2. SBI Magnum equity fund 3.30

3. SBI Magnum Global fund 4.62

4. SBI Magnum Multiplier plus scheme 3.60

5. SBI CONTRA fund 3.61

6. SBI Emerging business fund 4.28

7. SBI FMCG fund 2.47

8. SBI IT fund 1.95

9. SBI Pharma fund 3.72

80



Correlation Co-efficient








8. SBI IT fund 0.81


81



Standard Deviation:







7. S

BI FMCG fund

2.83

8. SBI IT fund 5.85


82



Alpha:








8. SBI IT fund 2.84


83



Beta:

1. SBI Arbitrage Opportunities fund -0.01






7. SBI FMCG fund -0.01

8. SBI IT fund 0.25

9. SBI Pharma fund -0.48

84



Sharpe Calculation:

p SBI Arbitrage Opportunities fund 4.77







8. SBI IT fund 0.33


85



CHAPTER – 5

Findings

86



FINDINGS:

1) SBI Arbitrage opportunities fund (G) has risk = 0.13, Beta = -0.01, Alpha = 0.69, Average

return = 0.62 and Sharpe calculation = 4.77, Correlation Co-efficient = 0.97

2) SBI Magnum Multiplier plus fund (G) has risk = 3.05, Beta = 0.81, Alpha = 1.59,

Average return = 3.60 and Sharpe calculation = 1.18, Correlation Co-efficient = 0.99

3) SBI Contra fund (G) has risk = 2.92, Beta = 0.81, Alpha = 1.61, Average return = 3.61

and Sharpe calculation = 1.24, Correlation Co-efficient = 0.99

4) SBI Emerging Business fund (G) has risk = 3.12, Beta = 0.61, Alpha = 1.61, Average

return = 4.28 and Sharpe calculation = 1.37, Correlation Co-efficient = 0.99

5) SBI FMCG fund (G) has risk = 2.83, Beta = -0.01, Alpha = 2.72, Average return = 2.47


6) SBI IT fund (G) has risk = 5.85, Beta = 0.25, Alpha = 2.84, Average return = 1.95 and

Sharpe calculation = 0.33, Correlation Co-efficient = 0.81

7) SBI Pharma fund (G) has risk = 5.99, Beta = -0.48, Alpha = 5.45, Average return = 3.72


8) SBI Magnum Equity fund (G) has risk = 3.09, Beta = 0.90, Alpha = 1.01, Average return

= 3.30 and Sharpe calculation = 1.07, Correlation Co-efficient = 0.96

9) SBI Magnum global fund (G) has risk = 3.19, Beta = 0.61, Alpha = 3.28, Average return =

4.62 and Sharpe calculation = 1.45, Correlation Co-efficient = 0.98

Out of all funds, Magnum Equity Fund (G) comes out to be more Aggressive having beta

0.99.

The riskiest fund during the period is Sbi Pharma fund having standard deviation of 5.99 and

the least risky fund is Sbi Arbitrage opportunities fund having standard deviation of 0.13

The riskiest fund during the period is Sbi Magnum Global fund having Sharpe calculation of

1.45 and the least risky fund is Sbi IT fund having Sharpe calculation of 0.33

87



CHAPTER – 5

Conclusion and

Suggestions

88



CONCLUSION:

Overall in finance about performance of mutual fund in India mutual fund have a lot

of potential to grow. Mutual fund companies have to create and market innovative products

and frame long term marketing strategies. Product innovation will be one of the key

determinants to success.

The mutual fund industry has to bring many innovative concept such as high yield

bond funds, principal protected fund long short term fund , arbitrage funds, dynamic funds

and precious metal funds. The penetration of mutual funds can be increased through investor

education, providing investor–oriented value added services, and innovative distribution

channels. Mutual funds have failed during the bearish market conditions. To sell successfully

during the bear market, there is a need to educate the investor about risk adjust return and

total portfolio return to enable them to take an inform decision. Mutual funds need to develop

a wide distribution network to increase its reach and tap investment from all concerns and

segments. Increased use of internet time and development of alternative channels such as

financial advisors can play a vital role in increasing the potential of mutual funds.

The retail participation in mutual fund is still low on account of incorrect positioning

of mutual fund products, industry focus on wholesale market, investors preference for

guaranteed return product and industry inability to make inroads into smaller towns. There is

need for retail participation. Selling mutual funds require competence in identifying and

matching investors needs. Moreover, they need to educate investors that mutual fund help to

build capital, not to be become rich overnight. Mutual fund have come a long way, but a lot

more can be done.

Here Magnum Equity Global Fund has highest average return of 4.62 and standard deviation

of 3.19 which is good. It is always believed “High risk, High returns” From this point of view

Sbi Pharma fund has highest standard deviation of 3.09 and Average return of 3.30 which

seems best among all schemes. So according to me investing in any of above schemes will

give good results.

89



Bibliography About Mutual fund. (n.d.). Retrieved from http://aboutmf.com/concept-nav/

AMFI. (n.d.). Retrieved from https://www.amfiindia.com/net-asset-value/nav-history

Economictimes.indiatimes. (n.d.). Retrieved from

http://economictimes.indiatimes.com/sbi-mutual-fund/mutual_funds_search/amcid-

Indiastudy Channel. (n.d.). Retrieved from

25.cmshttp://www.indiastudychannel.com/resources/51073-Mutual-Fund-Indian-

Market-Scenario.aspx

Investopedia. (n.d.). Retrieved from http://www.investopedia.com

NSE INDIA. (n.d.). Retrieved from

http://www.google.com/finance/historical?q=NSE:NIFTY

SBI Mutual Fund.(n.d.).Retrieved from

http://www.sbimf.com/Scheme_Snapshots/Equity.aspx

SBI Mutual Fund. (n.d.). Retrieved from


SBI Mutual Fund. (n.d.). Retrieved from

http://www.sbimf.com/Downloads/LatestNAV.aspx

thinkrupee. (n.d.). Retrieved from http://www.thinkrupee.com/mutual-fund/sbi-

mutual-fund.php

Wikipedia. (n.d.). Retrieved from http://en.wikipedia.org/wiki/mutual funds

90



ANNEXURE

Date Open High Low Close

Feb 28, 2014 6,228.45 6,282.70 6,228.10 6,276.95

Mar 31, 2014 6,723.15 6,730.05 6,662.40 6,704.20

Apr 30, 2014 6,724.95 6,780.15 6,656.80 6,696.40

Jun 30, 2014 7,534.05 7,623.65 7,531.60 7,611.35

Jul 31, 2014 7,784.65 7,791.85 7,711.15 7,721.30

Aug 28, 2014 7,942.25 7,967.80 7,939.20 7,954.35

Sep 30, 2014 7,948.80 8,030.90 7,923.85 7,964.80

Oct 31, 2014 8,200.80 8,330.75 8,198.05 8,322.20

Nov 28, 2014 8,516.80 8,617.00 8,516.25 8,588.25

Dec 31, 2014 8,243.90 8,291.00 8,243.75 8,282.70

Products NAV Date

EQUITY

SBI Arbitrage Opportunities Fund - Regular Plan - Growth 18.5464 31-Dec-2014














91











SBI Arbitrage Opportunities Fund - Regular Plan - Growth 18.4086 28-Nov-2014


















SBI Arbitrage Opportunities Fund - Regular Plan - Growth 18.3223 31-Oct-2014








92











SBI Arbitrage Opportunities Fund - Regular Plan - Growth 18.1989 30-Sep-2014






















SBI Arbitrage Opportunities Fund - Regular Plan - Growth 18.0972 28-Aug-2014




93


















SBI Arbitrage Opportunities Fund - Regular Plan - Growth 17.9815 31-Jul-2014



















94






SBI Arbitrage Opportunities Fund - Regular Plan - Growth 17.8197 30-Jun-2014





















SBI Arbitrage Opportunities Fund - Regular Plan - Growth 17.7338 30-May-2014










95














SBI Arbitrage Opportunities Fund - Regular Plan - Growth 17.5870 30-Apr-2014


















SBI Arbitrage Opportunities Fund - Regular Plan - Growth 17.4505 31-Mar-2014





96









SBI Arbitrage Opportunities Fund - Regular Plan - Growth 17.3727 13-Mar-










SBI Arbitrage Opportunities Fund - Regular Plan - Growth 17.3327 28-Feb-2014


















97




SBI Arbitrage Opportunities Fund - Regular Plan - Growth 17.2299 31-Jan-2014






















SITEMAP | CAREERS | CONTACT US | DISCLAIMER | PRIVACY POLICY | RISK FACTOR

SBI IT Fund - Regular Plan - Growth 45.5207 31-Dec-2014









http://www.sbimf.com/Sitemap.aspx

http://www.sbimf.com/Careers.aspx

http://www.sbimf.com/ContactUs/Investor_Service_Centers.aspx

http://www.sbimf.com/Disclaimer.aspx

http://www.sbimf.com/PrivacyPolicy.aspx

http://www.sbimf.com/RiskFactor.aspx

98
















SBI IT Fund - Regular Plan - Growth 46.8527 28-Nov-2014


















SBI IT Fund - Regular Plan - Growth 44.5802 31-Oct-2014



99
















SBI IT Fund - Regular Plan - Growth 44.0735 30-Sep-2014





















100




SBI IT Fund - Regular Plan - Growth 41.4831 28-Aug-2014



















SBI IT Fund - Regular Plan - Growth 39.1438 31-Jul-2014














101











SBI IT Fund - Regular Plan - Growth 37.7214 30-Jun-2014





















SBI IT Fund - Regular Plan - Growth 33.8414 30-May-2014





102



















SBI IT Fund - Regular Plan - Growth 34.7665 30-Apr-2014


















103



SBI IT Fund - Regular Plan - Growth 34.5609 31-Mar-2014




















SBI IT Fund - Regular Plan - Growth 38.5061 28-Feb-2014














104








SBI IT Fund - Regular Plan - Growth 36.7360 31-Jan-2014






















105



SBI Contra Fund - Regular Plan - Growth 85.2475 31-Dec-2014






















SBI Contra Fund - Regular Plan - Growth 85.1567 28-Nov-2014












106









SBI Contra Fund - Regular Plan - Growth 80.9309 31-Oct-2014
















SBI Contra Fund - Regular Plan - Growth 78.0490 30-Sep-2014












107













SBI Contra Fund - Regular Plan - Growth 77.3166 28-Aug-2014



















SBI Contra Fund - Regular Plan - Growth 73.0247 31-Jul-2014





108




















SBI Contra Fund - Regular Plan - Growth 72.1463 30-Jun-2014

















109







SBI Contra Fund - Regular Plan - Growth 67.7996 30-May-2014





















SBI Contra Fund - Regular Plan - Growth 62.4113 30-Apr-2014









110












SBI Contra Fund - Regular Plan - Growth 61.9512 31-Mar-2014









SBI Contra Fund - Regular Plan - Growth 59.4124 18-Mar-

DISCLAIMER | P









SBI Contra Fund - Regular Plan - Growth 57.8855 28-Feb-2014





http://www.sbimf.com/Disclaimer.aspx

111

















SBI Contra Fund - Regular Plan - Growth 55.9620 31-Jan-2014




















112





SBI FMCG Fund - Regular Plan - Growth 71.8686 31-Dec-2014






















SBI FMCG Fund - Regular Plan - Growth 70.2955 28-Nov-2014










113











SBI FMCG Fund - Regular Plan - Growth 68.3426 31-Oct-2014
















SBI FMCG Fund - Regular Plan - Growth 68.4541 30-Sep-2014










114















SBI FMCG Fund - Regular Plan - Growth 64.3207 28-Aug-2014



















SBI FMCG Fund - Regular Plan - Growth 63.1455 31-Jul-2014


115























SBI FMCG Fund - Regular Plan - Growth 58.9794 30-Jun-2014














116










SBI FMCG Fund - Regular Plan - Growth 58.5049 30-May-2014





















SBI FMCG Fund - Regular Plan - Growth 57.2098 30-Apr-2014






117















SBI FMCG Fund - Regular Plan - Growth 57.2479 31-Mar-2014




















SBI FMCG Fund - Regular Plan - Growth 53.5890 28-Feb-2014


118




















SBI FMCG Fund - Regular Plan - Growth 53.8377 31-Jan-2014

















119








SBI Pharma Fund - Regular Plan - Growth 118.6614 31-Dec-2014






















SBI Pharma Fund - Regular Plan - Growth 118.2888 28-Nov-2014







120














SBI Pharma Fund - Regular Plan - Growth 111.7696 31-Oct-2014
















SBI Pharma Fund - Regular Plan - Growth 111.8584 30-Sep-2014







121


















SBI Pharma Fund - Regular Plan - Growth 104.4419 28-Aug-2014



















122



SBI Pharma Fund - Regular Plan - Growth 97.9075 31-Jul-2014






















SBI Pharma Fund - Regular Plan - Growth 90.7636 30-Jun-2014












123












SBI Pharma Fund - Regular Plan - Growth 79.2715 30-May-2014


SBI Pharma Fund - Regular Plan - Growth 77.5632 28-May-




















SBI Pharma Fund - Regular Plan - Growth 82.7536 30-Apr-2014



124


















SBI Pharma Fund - Regular Plan - Growth 79.0793 31-Mar-2014



















125




SBI Pharma Fund - Regular Plan - Growth 84.1348 28-Feb-2014



















SBI Pharma Fund - Regular Plan - Growth 77.9276 31-Jan-2014














126











SBI Magnum Multiplier Plus Scheme 93 - Regular Plan - Growth 143.9515 31-Dec-2014






















SBI Magnum Multiplier Plus Scheme 93 - Regular Plan - Growth 144.4361 28-Nov-2014



127


















SBI Magnum Multiplier Plus Scheme 93 - Regular Plan - Growth 138.2277 31-Oct-2014
















SBI Magnum Multiplier Plus Scheme 93 - Regular Plan - Growth 133.3294 30-Sep-2014



128






















SBI Magnum Multiplier Plus Scheme 93 - Regular Plan - Growth 131.4352 28-Aug-2014















129







SBI Magnum Multiplier Plus Scheme 93 - Regular Plan - Growth 124.5101 31-Jul-2014






















SBI Magnum Multiplier Plus Scheme 93 - Regular Plan - Growth 123.4752 30-Jun-2014








130
















SBI Magnum Multiplier Plus Scheme 93 - Regular Plan - Growth 114.7232 30-May-2014





















131



SBI Magnum Multiplier Plus Scheme 93 - Regular Plan - Growth 104.5610 30-Apr-2014


















SBI Magnum Multiplier Plus Scheme 93 - Regular Plan - Growth 103.3559 31-Mar-2014















132








SBI Magnum Multiplier Plus Scheme 93 - Regular Plan - Growth 98.5022 28-Feb-2014



















SBI Magnum Multiplier Plus Scheme 93 - Regular Plan - Growth 94.5921 31-Jan-2014










133















SBI Emerging Businesses Fund - Regular Plan - Growth 89.0626 31-Dec-2014





















134




SBI Emerging Businesses Fund - Regular Plan - Growth 86.3780 28-Nov-2014


















SBI Emerging Businesses Fund - Regular Plan - Growth 82.9251 31-Oct-2014















135




SBI Emerging Businesses Fund - Regular Plan - Growth 81.6823 30-Sep-2014






















SBI Emerging Businesses Fund - Regular Plan - Growth 78.6980 28-Aug-2014











136











SBI Emerging Businesses Fund - Regular Plan - Growth 76.0834 31-Jul-2014






















SBI Emerging Businesses Fund - Regular Plan - Growth 72.8508 30-Jun-2014




137




















SBI Emerging Businesses Fund - Regular Plan - Growth 66.8636 30-May-2014

















138







SBI Emerging Businesses Fund - Regular Plan - Growth 60.6804 30-Apr-2014


















SBI Emerging Businesses Fund - Regular Plan - Growth 59.3896 31-Mar-2014












139











SBI Emerging Businesses Fund - Regular Plan - Growth 54.75 28-Feb-2014



















SBI Emerging Businesses Fund - Regular Plan - Growth 54.1718 31-Jan-2014







140


















SBI Magnum Equity Fund - Regular Plan - Growth 72.0967 31-Dec-2014



















141






SBI Magnum Equity Fund - Regular Plan - Growth 73.3654 28-Nov-2014


















SBI Magnum Equity Fund - Regular Plan - Growth 69.7618 31-Oct-2014













142






SBI Magnum Equity Fund - Regular Plan - Growth 66.5835 30-Sep-2014






















SBI Magnum Equity Fund - Regular Plan - Growth 66.3420 28-Aug-2014









143













SBI Magnum Equity Fund - Regular Plan - Growth 63.0293 31-Jul-2014






















SBI Magnum Equity Fund - Regular Plan - Growth 62.0904 30-Jun-2014


144






















SBI Magnum Equity Fund - Regular Plan - Growth 58.4421 30-May-2014

















145







SBI Magnum Equity Fund - Regular Plan - Growth 54.1599 30-Apr-2014


















SBI Magnum Equity Fund - Regular Plan - Growth 53.9569 31-Mar-2014














146









SBI Magnum Equity Fund - Regular Plan - Growth 50.5908 28-Feb-2014



















SBI Magnum Equity Fund - Regular Plan - Growth 49.0610 31-Jan-2014











147














SBI Magnum Global Fund - Regular Plan - Growth 124.3635 31-Dec-2014






















SBI Magnum Global Fund - Regular Plan - Growth 119.1341 28-Nov-2014


148



















SBI Magnum Global Fund - Regular Plan - Growth 114.6871 31-Oct-2014
















SBI Magnum Global Fund - Regular Plan - Growth 112.3929 30-Sep-2014




149





















SBI Magnum Global Fund - Regular Plan - Growth 105.53 28-Aug-2014


















150




SBI Magnum Global Fund - Regular Plan - Growth 100.0988 31-Jul-2014






















SBI Magnum Global Fund - Regular Plan - Growth 97.8344 30-Jun-2014













151











SBI Magnum Global Fund - Regular Plan - Growth 90.2604 30-May-2014





















SBI Magnum Global Fund - Regular Plan - Growth 82.0083 30-Apr-2014







152














SBI Magnum Global Fund - Regular Plan - Growth 81.3419 31-Mar-2014




















SBI Magnum Global Fund - Regular Plan - Growth 75.0013 28-Feb-2014





153

















SBI Magnum Global Fund - Regular Plan - Growth 72.7835 31-Jan-2014






















154



Documents

Prepared by: Under the guidance of: Submitted to: Yeardocshare01.docshare.tips/files/31575/315756896.pdf · 2016-12-21 · Report is based on research on the risk and return of particular