A

COMPREHENSIVE PROJECT REPORT

ON

“CUSTOMER PERCEPTION TOWARDS SBI MUTUAL FUND”

Submitted to:SHWETA PATEL

Late Smt. Shardaben Ghanshyambhai Patel Institute of Management

IN PARTIAL FULFILLMENT OF THEREQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ASMINISTRATIONIn

Gujarat Technological University

UNDER THE GUIDANCE OFFaculty Guide:

SHWETA PATEL

Submitted byVISHAL S. SHAH

[Batch : 2011-13, Enrollment No.:117330592034]MBA SEMESTER III/IV

Late Smt. Shardaben Ghanshyambhai Patel Institute of ManagementMBA PROGRAMME

Affiliated to Gujarat Technological UniversityAhmedabadMonth, Year

PREFACE

“Theory without practice has no fruit,

Practice without theory has no root.”

MBA is a stepping-stone to the management carrier and to develop good manager it is

necessary that the theoretical knowledge must be supplemented with exposure to the

real environment.

Therefore the Comprehensive Project is an essential requirement for the student of

MBA. In accordance with the requirement of MBA course project on the topic

“Customer’s perception towards SBI mutual fund”.

The main objective of the project is to study the behavior of customers for mutual fund.

An Interim report contains detailed information regarding the activities done during

Comprehensive Projects (CP).

This experience gives me a clear-cut idea about practical field that how theoretical

knowledge is different from practical aspects & how can I use my knowledge to solve

these problems.

ACKNOWLEDGEMENT

Ships are safer in harbor but they are not meant for that purpose. This is a universal fact

and derives home the importance of practical training essential in each and every facet

of life. Project is also a part of practical where we can put concept into action.

Words are insufficient to express my gratitude towards Miss. Shweta Patel Madam and

Mr. Brahamachari Sir for their immense help and invaluable guidance in conduction of

this study from its conception to its completion.

And last but not the least I am thankful to my Parents, Family members and my dear

Friends for helping me in preparing the comprehensive project report for that they are

supporting me in all the ways with cheer face without showing the time.

Shah Vishal

S

TABLE OF CONTENT

CH NO. PARTICULAR PAGE NO.

1. Introduction

1.1 Invest In Mutual Fund

1.1 Introduction To Mutual Funds

1.3 SBI Fund

1.3 Company Profile

1.4

2. Review Of Literature

2.1 Objectives of the Study

3. Research Methodology

3.1 Need Of The Study

3.2 Research design

3.3 Sources of data

3.4 Data collection method

3.5 Sampling size

3.6 Sampling method

3.7 Sampling framework

4. Hypothesis test

References

Abstract

In my comprehensive project, I will study on Customer Perception towards SBI Mutual Fund.

I have study on the SBI mutual fund is the most person use this fund. It is helps to increase returns of person they have invested in mutual fund.

I have doing survey and know they what are the customer perception to invest in SBI mutual fund is higher risk or a given the return is they expected.

I will study on primary & secondary data. I will fill up the questioner for customers who invest in mutual fund. I select the city of Baroda to fill up the questioner.

Write on your outcome of the project

What u willing to like study.

INVEST IN TO MUTUAL FUNDS

• Experts manage your money at minimal of 2.5% to 5% of your wealth

irrespective of the size of your investments. You are just not dependent upon any single

individual for news, tips.

• Everyone knows when to buy but no knows when to sell at the top they really

know when to get out.

• You can start with small amounts Rs. 5000 for 1 time investment and Rs. 1000

for a systematic investment plan.

• Diversified mutual funds have created a lot of wealth over a period of 10 years.

Some funds have multiplied wealth by over 14 times during that period.

• Mutual funds provide great liquidity. Money can be taken out within 72 hours and

there is nothing called circuit filter.

• The problems of calling brokers, filling Demat instruction slips, making and

receiving payments at the end of each settlement cycles, keeping contract notes and

records for taxation purposes are all eliminated.

• Some funds offer tax saving facility under sec – 80 C. Investment into these

funds can be made up to a maximum limit of Rs. 100000. These funds have however

closed ended.

GROWTH OF MUTUAL FUNDS IN INDIA:

Some facts:-

• 100 % growth in the last 6 years

• Number of foreign AMC’s are in the queue to enter the Indian markets like

Fidelity investments, US based, with over US$1 trillion assets under management

worldwide.

• Our saving rate is over 23 % highest in the world. Only channel zing these

savings in mutual funds sector is required.

• We have approximately 29 mutual funds which is must less than US having more

than 800. There is a big scope for expansion.

• ‘B’ and ‘C’ class cities are growing rapidly. Today most of the mutual funds are

concentrating on the ‘A’ class cities. Soon they will find scope in the growing cities.

• Mutual funds can penetrate rural like the Indian insurance industry with simple

and limited products.

• SEBI allowing the MF’s to launch commodity mutual funds.

• Emphasis on better corporate governance.

• Trying to curb the late trading practices.

• Introduction of financial planners who can provide need based advice.

SBI Magnum Equity Fund

SBI Magnum Equity Fund seeks capital appreciation through investment in diversified

portfolio of equities of high growth companies, along with liquidity of an open ended

scheme.

To provide the investor Long-term capital appreciation by investing in high growth

companies along with the liquidity of an open-ended scheme through investments

primarily in equities and the balance in debt and money market instruments.

Asset Allocation

Instrument Normal Allocation (% of Net Assets)

Risk Profile

Equity and related instruments

Not less than 70% Medium to High

Debt instruments Not more than 30% Low to MediumSecuritized Debt Not more than 10% of the

investment in debt instruments

Medium to High

Money market instruments Balance Low

Date of Inception 01/01/1991

Minimum Application Rs. 1000

Entry LoadNA

Exit Load1) For exit within 1 year from the date of allotment - 1 %. 2) For exit after 1 year from the date of allotment - Nil

SIPRs.500/month - 12 months, Rs.1000/month - 6 months, Rs.1500/quarter - 12 months

SWP Rs. 500/- per month or per quarter

Nav's

Plan Nav Date

SBI Magnum Equity Fund-Dividend 30.83 05-Oct-2012

SBI Magnum Equity Fund-Growth 45.89 05-Oct-2012

INTRODUCTION

WHAT IS A MUTUAL FUND?

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

common financial goal. 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.

“Mutual Funds are popular among all income levels. With a mutual fund, we get a

diversified basket of stocks managed by professionals”

These Trusts are run by experienced Investment Managers who use their knowledge

and expertise to select individual securities, which are classified to form portfolios that

meet predetermined objectives and criteria.

ADVANTAGES OF MUTUAL FUNDS

Portfolio Diversification:

Mutual Funds normally, invest in a well-diversified portfolio or securities. MF enables

investors to hold a diversified investment portfolio even with a small amount of

investment.

Reduction of Risk:

Investors in a mutual fund acquire a diversified portfolio, no matter how small his

investment. Diversification reduces the risk of loss, as compared to investing directly in

one or two shares, debentures, or others instruments. When investors invest directly, all

the risk of potential loss is his own. A fund investor also reduces his risk in another

way.

Reduction transaction cost:

What is true of risk is also true of the transaction cost a direct investors bears all the

cost of investing such as brokerage or custody of securities when going through a fund

he has the benefit of economies of scale the funs pay lesser cost because of larger

volumes, a benefit passed on to its investors.

Liquidity:

Often Investors hold shares or bonds they cannot directly easily and quickly sell.

Investment in a mutual fund on the other hand is more liquid investors can liquidate the

investment by selling the unit to the fund.

Convince & Flexibility :

Mutual Fund management companies offered many investors services that a direct

market investor cannot get. Investors can easily transfer their holdings from one

scheme to the other and can get up date market information.

DISADVANTAGE OF MUTUAL FUNDS

No Control Over Cost:

An investor in a mutual fund has no control over the overall cost of investing. His

investment management fees as long as he remains with the funds, albeit in returns for

the professional management and research. A mutual fund investor also pays

distribution cost which he would not incur in the direct investing. However this

shortcoming only means that there is a cost obtains the benefits of mutual services.

No tailor made portfolio:

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

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

manager.

The very high net worth individuals or large corporate investors may find this to be a

constraint in achieving their objectives however most mutual funds help investors to

overcome this constraint by offering miles of schemes- a large number of different

schemes within the same fund an investor can choose from different investment plans

and construct a portfolio of his choice.

Managing a Portfolio of funds:

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

investors

He may again need advice on how to select a fund to achieve his objective quite similar

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

TYPES OF MUTUAL FUND:

Type of Mutual Fund

Schemes

Structure

Open Ended Funds

Close Ended Funds

Interval Funds

Investment Objective

Growth Funds

Income Funds

Balanced Funds

Money Market Funds

Special Schemes

Industry Specific Schemes

Index Schemes

Sectoral Schemes

COMPANY PROFILE

SBI Mutual Fund is India’s largest bank sponsored mutual fund. The fund traces

itslineage 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.

A total of over 4.6 million investors have reposed their faith in the wealth generation

expertise of the Mutual Fund. The fund serves this vast family of investors by reaching

out to them through network of over 130 points of acceptance, 28 investor service

centers, 46 investor service desks and 56 district organizers. Today, the fund manages

over Rs. 28500crores of assets and has a diverse profile of investors actively parking

their investments across 36 active schemes.

Our Vision

“To be the most preferred and the largest fund house for all asset classes, with a

consistent track record of excellent returns and best standards in customer service,

product innovation, technology and HR practices.”

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.

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.

REVIEW OF LITERATURE

Sharpe (1966) suggested a measure for the evaluation of portfolio performance.

Drawing on results obtained in the field of portfolio analysis, economist Jack L. Treynor

suggested a new predictor of mutual fund performance, one that differs from virtually all

those used previously by incorporating the volatility of a fund's return in a simple yet

meaningful manner.

Jensen (1967) derived a risk-adjusted measure of portfolio performance

(Jensen’s alpha) that estimates how much a manager's forecasting ability contributes to

a fund's returns.

As indicated by stateman (2000), the e-SDAR of a fund's portfolio is the have the

benchmark index's standard deviation. Rao et al. evaluated the performance of Indian

mutual funds in a bear market through relative performance index, risk-return analysis,

Treynor’s ratio, Shape's ratio, Sharpe's measure ,Jensen's measure, and Fama's

measure. The results of performance measures suggested that most of the mutual fund

schemes were able to satisfy investors' expectations by giving excess returns over

expected returns based on both - premium for systematic rick and total risk. Roy et al.

conducted an empirical study on conditional performance of Indian mutual funds . The

result suggested that the use of conditioning lagged information variables improves the

performance of mutual fund schemes, causing alphas to shift towards right, and

reduced the number of negative timing coefficients.

Mishra et al. (2002) measured the mutual fund performance using lower partial

moment. In their paper, a measure of evaluting portfolio performance based on lower

partial moment was developed. Risk from the lower partial moment is measured by

taking into account only those states in which return is below a pre-specified "target

rate" like risk-free rate.

Fernandes (2003) evaluated index fund implementation in India. In her paper,

tracking error of index funds in India was measured. The consistency and level of

tracking errors obtained by some well-run index fund suggested that it is possible to

attain low levels of tracking error under Indian conditions.

OBJECTIVES OF THE STUDY

For every problem there is a research. As all the researches are based on some

and my study is also based upon some objective and these are as follows.

To know the awareness of SBI mutual funds among people.

To see the interest of people in investing in SBI mutual funds.

To know the investment behavior of investors in SBI mutual fund according to

different age group.

To ascertain the percentage of income the investors invest in SBI mutual fund.

To know the different attitudes of people regarding risk, rate of return period of

investment.

To analyze how many respondents have invested in SBI Mutual Fund.

To study the various schemes of Mutual fund provided by SBI.

To know which features of SBI mutual fund most attract to the investors.

RESEARCH METHODOLOGY

Sources of Data

Primary Data:-

The primary data is collected with the help of the questionnaire by taking

the responses of the respondents.

Secondary Data:-

The secondary data is collected through the following sources:

• Data through internet source

• Magazine & other books

Data collection method

Personal survey has been used to collect the data through structured

questionnaire.

Sampling Population:- The population consist of the people of Baroda

Sample size:- 100

Sampling method:- Convenience Sampling

Sampling Framework :- Individual from Baroda Area.

RESEARCH DESIGN:- Descriptive Studies

HYPOTHESES FRAMEWORK

REFERENECIES

Websites referred:

www.mutualfundsindia.com

www.amfiindia.com

www.valueresearchonline.com

Redmond (2000), The Performance of Global and International Mutual Funds,

The Journal Of the Financial and Strategic Decision, 13, 1, 75-85

Sharpe (1966), Mutual Fund Performance, the Journal of Business, 39, 1, 119-

138