A REPORT ON

ANALYSIS OF CUSTOMERS AWARENESS, PERCEPTION & PREFERENCE OF MUTUAL FUNDS IN COMPARISION TO OTHER FINANCIAL PRODUCTS.

BY:YESASWI CHINTADA OF:-

NAME OF THE ORGANIZATION:-

SBI MUTUAL FUND PVT LTD

SUMMER INTERNSHIP PROJECT

ON:ANALYSIS OF CUSTOMERS AWARENESS, PERCEPTION & PREFERENCE OF MUTUAL FUNDS IN COMPARISION TO OTHER FINANCIAL PRODUCTS.

SUBMITTED TO:

FACULTY GUIDE: PROF. GAGAN KATIYAR

INDUSTRY GUIDE:MR.JUNAID AHMAD

BY:YESASWI CHINTADA PGDM (MARKETING) ENROLL NO. 09DM138 BIRLA INSTITUTE OF MANAGEMENT TECHNOLOGY

A REPORT SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS OF 2 YEARS PGDM PROGRAM OF BIRLA INSTITUTE OF MANAGEMENT TECHNOLOGY GREATER NOIDA (NCR)

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TABLE OF CONTENTS

S.NO 1

TITLE

PG.NO

ACKNOWLEDGEMENT INTRODUCTION Why Mutual Fund What is Mutual Fund Concept of mutual fund Types of Mutual Fund

4 5 5 6 8 9 11 12 13 17 18

MUTUAL FUND IN INDIAN CONTEXT Mutual Fund Industry in india Mutual fund structure Major mutual Fund companies in India Association of Mutual Fund of India (AMFI)

4 5

Various channels of selling mutual funds ABOUT SBI MUTUAL FUND Company Profile Funds & Schemes of SBIMF

22 23 25 26 27 30 37 38 39 40

6 7 8 9 10 11 12 13

RESEARCH METHODOLOGY SPSS REPORT PERCEPTION ANALYSIS ANALYTICAL HIERARCHY PROCESS CONCLUSIONS AND RECOMMENDATIONS LIMITATIONS BIBLIOGRAPHY ANNEXURE( survey form)

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ACKNOWLEDGEMENT

The Summer Training began on 7 April 2010, the day I was inducted as a summer trainee at SBI Mutual Fund Pvt. Ltd., Gurgaon. As an Amateur to the corporate environment with no prior work experience, this training at SBI Mutual Fund has been a very insightful and learning but exciting experience. The satisfaction and euphoria that accompany the successful completion of this project would be incomplete without the mention of the people who made it possible and whose constant guidance and encouragement heads all efforts with success. I extend my heart-felt gratitude to the industry guide Mr. Junaid Ahmad (Head, SBI MUTUAL FUNDSGurgaon & NCR) who believed in my capabilities and gave me the opportunity to complete my summers in an esteemed organization like SBI Mutual Fund. I would like to thank all the Relationship Managers (RMs) of Gurgaon office of SBI Mutual Fund, including Ms. Aarti Gadeock ,Mr. Sourabh chopra and Mr. Ashish Bhatnagar and for providing full support in completing this project. I would also like to thank Mr. Ashish Srivestava and Ms. Geeta, Operation Officers of SBI MUTUAL FUNDS, Gurgaon whose help and assistance helped a lot in completion of the report. I extend my gratitude to Prof. Gagan Katiyar, faculty guide who gave his valuable time to answer my queries and for full support during the project which has contributed for the completion of the project report on time.

th

It is a great pleasure to extend my heart felt thanks to everybody who helped me through the successful completion of this project.

YESASWI CHINTADA 09DM138 BIMTECH

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INTRODUCTION

Why Mutual Funds? Life is demanding! Theres so much to indulge in and deal with. At work or at home. With family, friends or self. Woven into these threads is the inescapable truth that money is a means to many an end. A house in the suburbs, good education for the kids, a set of four wheels to zip around, an early retirement... the ends might differ, but the means-at least one of them-to reach them remain the same: money. Earned wisely, saved regularly, and invested smartly. More often than not, its the second and third steps where control eludes us and even our best laid plans start to break down. Statements like: I dont have time, I dont understand the share market, cannot help you. Its your hard earn money that you have to invest, so you should know where you should and can invest and have a good return in your hand at the end of the day. Explore and understand what you want from your investments, and leave the rest to money managers: mutual funds. These investment vehicles dont demand that you have a deep understanding of financial matters; they even dont demand oodles of your time.

Mutual funds are investment products that operate on the principle of strength in numbers. They collect money from a large group of investors, pool it together, and invest it in various securities, in line with their objective. They are alternative to investing directly. A more convenient alternative, yet no less rewarding. Take stocks for example. Treading into the market by yourself would mean knowing, at the very least, how to analyze and track the companies, the ways of the market, and the intermediaries who will help you buy and sell the shares. A mutual fund that invests in stocks relieves you all such hassles, while giving you the same investment exposure. All in all, a handy investment option for individuals handicapped by a lack of investing acumen or time, or generally disinclined to take charge of their personal finances. Mutual funds are not magic investment vehicles that do it all. We will have to come to terms with the fact that they assure neither returns nor the value of your original investment. We will have to accept the reality that even they, who are supposedly experts in investment matters, can go wrong. These are

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inherent risks, but these can be managed. Mutual fund offer several features that make them a powerful and convenient wealth creation vehicle worthy of our consideration.

WHAT IS MUTUAL FUND A mutual fund is a company (or a trust) that sells shares of its own stock and utilizes the proceeds to make other investments. These investments may include the stocks of publicly traded companies, corporate or municipal bonds, real estate, or short-term money market instruments. By purchasing shares in a mutual fund, the investor obtains a number of benefits that would otherwise be unavailable.

ADVANTAGES 1. VARIETY- Mutual funds can be an excellent vehicle to carry out a well-conceived investment plan. Once an investor has a disciplined, well thought out strategy, there are many choices available in the mutual fund universe to execute the investment plan with reasonable costs. 2. DIVERSIFICATION- Mutual funds can provide a high degree of security of principal and income through diversification of securities. Few individuals could afford to buy as many different types of stocks as the typical mutual fund holds. This spreading of risk makes it unlikely that poor performance by any one security will result in financial disaster. 3. PROFESSIONAL INVESTMENT MANAGEMENT- The purchase of shares in a mutual fund allows an investor to hire top notch investment management expertise, thus freeing the investor from the responsibility of managing the portfolio of securities on a day-today basis. 4. LIQUIDITY- Most mutual funds maintain a market in their own shares. Such funds are referred to as open-end investment companies. This means that the mutual fund company has obligated itself to buy back its shares from investors. An investor can require the fund to redeem its shares at any time. This requirement provides the purchaser of fund shares with a high degree of liquidity. A small category of funds, known as closed-end funds, do not buy and sell their own shares. Instead, their shares are traded on the open market like the shares of publicly

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traded companies. These funds are listed on the organized stock exchanges or traded on the over-the-counter market. 5. LOW COST- Several large discount brokerage firms have created fund supermarkets where an investor can have a wide mix of funds, from hundreds of separate fund groups, all in one brokerage account. This makes it easy for an investor to put together a diversified portfolio of funds from different fund families, with top-notch management and low costs. 6. CONVENIENCE & FLEXIBILITY- Under the family of funds concept, a company will sponsor a number of funds with different investment objectives and underlying assets. The investor can decide to switch assets back and forth from one fund to another. The advantage is that the investor can quickly, conveniently (and without any additional sales charges) move assets into one or more funds that better meet his investment needs or desires. DISADVANTAGES OF MUTUAL FUND 1. HIGH LOAD- Purchasing shares from many mutual funds involves payment of a sales charge, commonly called a load. This charge covers the cost of marketing the fund through brokerage firms and certain other fees. Sales charges can be as high as 8.5% of the original investment, but this is very unusual. Market forces have reduced the typical front end load down to an average of about 4.75% for bond funds and 5.75% for stock funds. There are now many share classes, There are many no-load funds that market their products directly to the public by mail and through newspaper advertising. These funds do not charge a sales fee. 2. REDUCED RETURNS- Annual management fees and administrative charges can reduce the overall return on the investment. Management fees can range from 0.5% to 3% or more of the value of the investment. Administrative charges may be imposed in addition to management fees and frequently cost from $5 to $25 annually per account. These small administrative charges are frequently waived for accounts that reach a minimum balance. These fees can eat up a significant portion of the return to an investor. For example, a bond fund earning 5% on Treasury notes with a 2% expense ratio will only return 3% to the investor. The expenses are eating up 40% of the returns. 3. NO PERSONAL INVOLVEMENT- While professional management relieves the investor of certain obligations and responsibilities, it also eliminates his personal involvement in the management of the fund. The purchaser of a mutual fund cannot control the selection of specific assets or the timing of purchases and sales. Unlike the investor who buys stock directly and who can select the time to sell and recognize a gain or loss, the mutual fund shareholder has no choice. He cannot control the amount of any capital gain distribution, or when it must be reported. Capital gain distributions are paid annually and must be reported each year on the shareholders tax return.

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CONCEPT OF MUTUAL FUND 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. Thus a Mutual Fund is the most suitable investment for the common man as it offers opportunities to invest in a divesiffied, professionally managed basket of securities at a relatively low cost. The Mutual Funds normally come out with a number of schemes with different investment objectives, which are launched from time to time. A mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) which regulates securities market before it can collects funds from the public. Unit trust of India was the first Mutual Fund set up in India in the year 1963.in the year 1992 Securities and Exchange Board of India (SEBI) act was passed. As far as mutual funds concerned SEBI formulates policies and regulates the mutual funds to protect the interest of the investors. All Mutual Funds whether promoted by public sector or private sector entities including those promoted by foreign entities are governed by the same set of regulation. A Mutual Fund is set up in the form of a trust, which has sponsor, trustee, asset Management Company and custodian. The trustee of the mutual fund holds its property for the benefit of the unit holders. Asset Management Company approved by SEBI manages the funds by making investments in various types of securities. The performance of particular schemes of a mutual fund is denoted by net asset value (NAV). Net asset value is the market value of the securities held by the schems, since market value of securities change every day, NAV of schemes also varies on day-to-day basis.

Working of Mutual Fund

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DIFFERENT TYPES OF MUTUAL FUNDS: Schemes according to Maturity Period : A mutual fund scheme can be classified into open ended scheme or close ended scheme depending on its maturity period. Open ended Fund / Scheme An open ended fund or scheme is one that is available for subscription and purchase on a continuous basis. These schemes do not have a fixed maturity period. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared on a daily basis. The key feature of open-end schemes is liquidity. Close ended Fund / Scheme A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can incest 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 the units 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 i.e. either purchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis. Schemes according to Investment Objectives: A scheme can also be classified as growth scheme, income scheme, balanced scheme considering its investment objective. Such schemes may be open-ended or close-ended schemes as described earlier. Such schemes may be classified mainly as follows: Growth / Equity Oriented Scheme The aim of growth fund is to provide capital appreciation over the medium of long-term. Such schemes normally invest in a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time. Income / Debt Oriented Scheme The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely

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to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations. Balanced Fund The aim of balanced funds is to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. These are appropriate for investors looking for moderate growth. They generally invest 40-60% in equity and debt instruments. These funds are also affected because of fluctuations in share prices in the stock markets. However, NAVs of such funds are likely to be less volatile compared to pure equity funds. Money Market or Liquid Fund These funds are also income funds and their aim is to provide easy liquidity, preservation of capital and moderate income. These schemes invest exclusively in safer short term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bank call money, government securities, etc. Returns on these schemes fluctuate much less compared to other funds. These funds are appropriate for corporate and individual investors as a means to park their surplus funds for short periods. Gilt Fund These funds invest exclusively in government securities. Government securities have no default risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as in the case with income or debt oriented schemes. Index Funds Index funds replicate the portfolio of a particular index such as the BSE Sensitive index, S & PNSE 50 index (Nifty), etc. These schemes invest in the securities in the same weightage comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index, though not exactly by the same percentage due to some factors known as tracking error in technical terms. Necessary disclosures in this regard are made in the offer document of the mutual fund scheme. There are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges.

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MUTUAL FUND INDUSTRY IN INDIA The origin of Mutual Fund industry in India is with the introduction of the concept of mutual fund by UTI in the year 1963. Though the growth was slow, but it accelerated from the year 1987 when non-UTI players entered the industry. In the past decade, Indian Mutual Fund industry had seen dramatic improvements, both quality wise as well as quantity wise. Before, the Monopoly of the Market had seen an ending phase; the Assets Under Management (AUM) was Rs. 67bn. The private sector entry to the fund family raised the AUM to Rs. 470 bn in March 1993 and till April 2004; it reached the height of 1,540 bn. Putting the AUM of the Indian Mutual Funds Industry into comparison, the total of it is less than the deposits of SBI alone, constitute less than 11% of the total deposits held by the Indian banking industry. The main reason of its poor growth is that the Mutual Fund industry in India is new in the country. Large sections of Indian investors are yet to be intellectuated with the concept. Hence, it is the prime responsibility of all mutual fund companies, to market the product correctly abreast of selling. The Mutual Fund industry can be broadly put into four phases according to the development of the sector. Each phase is briefly described as under. First Phase - 1964-87 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. 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) Entry of non-UTI mutual funds. SBI Mutual Fund was the first 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 in 1989 and GIC in 1990. The end of 1993 marked Rs.47, 004 as assets under management. Third Phase - 1993-2003 (Entry of Private Sector Funds) With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44, 541 crores of assets under management was way ahead of other mutual funds.

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Fourth Phase - since February 2003 This phase brought bitter experience for UTI. It was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with AUM of Rs.29, 835 crores (as on January 2003). The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of AUM 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. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.

Mutual Fund Structure

A mutual fund is set up in the form of a trust, which has sponsor, trustees, Asset Management Company (AMC) and custodian. The trust is established by a sponsor or more than one sponsor who is like promoter of a company. The trustees of the mutual fund hold its property for the benefit of the unit holders. Asset Management Company (AMC) approved by SEBI manages the funds by making investments in various types of securities. Custodian, who is registered with SEBI, holds the securities of various schemes of the fund in its custody. The trustees are vested with the general power of superintendence and direction over AMC. They monitor the performance and compliance of SEBI Regulations by the mutual fund.

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BRIEF DETAILS OF MAJOR MUTUAL FUND COMPANIES IN INDIA

ABN AMRO Mutual Fund ABN AMRO Mutual Fund was setup on April 15, 2004 with ABN AMRO Trustee (India) Pvt. Ltd. as the Trustee Company. The AMC, ABN AMRO Asset Management (India) Ltd. was incorporated on November 4, 2003. Deutsche Bank A G is the custodian of ABN AMRO Mutual Fund. Birla Sun Life Mutual Fund Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun Life Financial. Sun Life Financial is a golbal organisation evolved in 1871 and is being represented in Canada, the US, the Philippines, Japan, Indonesia and Bermuda apart from India. Birla Sun Life Mutual Fund follows a conservative long-term approach to investment. Recently it crossed AUM of Rs. 10,000 crores. Bank of Baroda Mutual Fund (BOB Mutual Fund) Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30, 1992 under the sponsorship of Bank of Baroda. BOB Asset Management Company Limited is the AMC of BOB Mutual Fund and was incorporated on November 5, 1992. Deutsche Bank AG is the custodian.

HDFC Mutual Fund HDFC Mutual Fund was setup on June 30, 2000 with two sponsorers nemely Housing Development Finance Corporation Limited and Standard Life Investments Limited. HSBC Mutual Fund HSBC Mutual Fund was setup on May 27, 2002 with HSBC Securities and Capital Markets (India) Private Limited as the sponsor. Board of Trustees, HSBC Mutual Fund acts as the Trustee Company of HSBC Mutual Fund. ING Vysya Mutual Fund ING Vysya Mutual Fund was setup on February 11, 1999 with the same named Trustee Company. It is a joint venture of Vysya and ING. The AMC, ING Investment Management (India) Pvt. Ltd. was incorporated on April 6, 1998. Prudential ICICI Mutual Fund The mutual fund of ICICI is a joint venture with Prudential Plc. of America, one of the largest life insurance companies in the US of A. Prudential ICICI Mutual Fund was setup on 13th of October, 1993 with two sponsorers, Prudential Plc. and ICICI Ltd. The Trustee Company formed is Prudential ICICI Trust Ltd. and the AMC is Prudential ICICI Asset Management Company Limited incorporated on 22nd of June, 1993.

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Sahara Mutual Fund Sahara Mutual Fund was set up on July 18, 1996 with Sahara India Financial Corporation Ltd. as the sponsor. Sahara Asset Management Company Private Limited incorporated on August 31, 1995 works as the AMC of Sahara Mutual Fund. The paid-up capital of the AMC stands at Rs 25.8 crore. State Bank of India Mutual Fund State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch offshore fund, the India Magnum Fund with a corpus of Rs. 225 cr. approximately. Today it is the largest Bank sponsored Mutual Fund in India. They have already launched 35 Schemes out of which 15 have already yielded handsome returns to investors. State Bank of India Mutual Fund has more than Rs. 5,500 Crores as AUM. Now it has an investor base of over 8 Lakhs spread over 18 schemes. Tata Mutual Fund Tata Mutual Fund (TMF) is a Trust under the Indian Trust Act, 1882. The sponsorers for Tata Mutual Fund are Tata Sons Ltd., and Tata Investment Corporation Ltd. The investment manager is Tata Asset Management Limited and its Tata Trustee Company Pvt. Limited. Tata Asset Management Limited's is one of the fastest in the country with more than Rs. 7,703 crores (as on April 30, 2005) of AUM. Kotak Mahindra Mutual Fund Kotak Mahindra Asset Management Company (KMAMC) is a subsidiary of KMBL. It is presently having more than 1, 99,818 investors in its various schemes. KMAMC started its operations in December 1998. Kotak Mahindra Mutual Fund offers schemes catering to investors with varying risk - return profiles. It was the first company to launch dedicated gilt scheme investing only in government securities. Unit Trust of India Mutual Fund UTI Asset Management Company Private Limited, established in Jan 14, 2003, manages the UTI Mutual Fund with the support of UTI Trustee Company Privete Limited. UTI Asset Management Company presently manages a corpus of over Rs.20000 Crore. The sponsorers of UTI Mutual Fund are Bank of Baroda (BOB), Punjab National Bank (PNB), State Bank of India (SBI), and Life Insurance Corporation of India (LIC). The schemes of UTI Mutual Fund are Liquid Funds, Income Funds, Asset Management Funds, Index Funds, Equity Funds and Balance Funds. Reliance Mutual Fund Reliance Mutual Fund (RMF) was established as trust under Indian Trusts Act, 1882. The sponsor of RMF is Reliance Capital Limited and Reliance Capital Trustee Co. Limited is the Trustee. It was registered on June 30, 1995 as Reliance Capital Mutual Fund which was changed on March 11, 2004. Reliance Mutual Fund was formed for launching of various schemes under

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which units are issued to the Public with a view to contribute to the capital market and to provide investors the opportunities to make investments in diversified securities.

Standard Chartered Mutual Fund Standard Chartered Mutual Fund was set up on March 13, 2000 sponsored by Standard Chartered Bank. The Trustee is Standard Chartered Trustee Company Pvt. Ltd. Standard Chartered Asset Management Company Pvt. Ltd. is the AMC which was incorporated with SEBI on December 20, 1999. Franklin Templeton India Mutual Fund The group, Frnaklin Templeton Investments is a California (USA) based company with a global AUM of US$ 409.2 bn. (as of April 30, 2005). It is one of the largest financial services groups in the world. Investors can buy or sell the Mutual Fund through their financial advisor or through mail or through their website. They have Open end Diversified Equity schemes, Open end Sector Equity schemes, Open end Hybrid schemes, Open end Tax Saving schemes, Open end Income and Liquid schemes, Closed end Income schemes and Open end Fund of Funds schemes to offer. Morgan Stanley Mutual Fund India Morgan Stanley is a worldwide financial services company and its leading in the market in securities, investmenty management and credit services. Morgan Stanley Investment Management (MISM) was established in the year 1975. It provides customized asset management services and products to governments, corporations, pension funds and non-profit organisations. Its services are also extended to high net worth individuals and retail investors. In India it is known as Morgan Stanley Investment Management Private Limited (MSIM India) and its AMC is Morgan Stanley Mutual Fund (MSMF). This is the first close end diversified equity scheme serving the needs of Indian retail investors focussing on a long-term capital appreciation. Escorts Mutual Fund Escorts Mutual Fund was setup on April 15, 1996 with Excorts Finance Limited as its sponsor. The Trustee Company is Escorts Investment Trust Limited. Its AMC was incorporated on December 1, 1995 with the name Escorts Asset Management Limited. Alliance Capital Mutual Fund Alliance Capital Mutual Fund was setup on December 30, 1994 with Alliance Capital Management Corp. of Delaware (USA) as sponsorer. The Trustee is ACAM Trust Company Pvt. Ltd. and AMC, the Alliance Capital Asset Management India (Pvt) Ltd. with the corporate office in Mumbai. Benchmark Mutual Fund Benchmark Mutual Fund was setup on June 12, 2001 with Niche Financial Services Pvt. Ltd. as the sponsorer and Benchmark Trustee Company Pvt. Ltd. as the Trustee Company. Incorporated

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on October 16, 2000 and headquartered in Mumbai, Benchmark Asset Management Company Pvt. Ltd. is the AMC.

Canbank Mutual Fund Canbank Mutual Fund was setup on December 19, 1987 with Canara Bank acting as the sponsor. Canbank Investment Management Services Ltd. incorporated on March 2, 1993 is the AMC. The Corporate Office of the AMC is in Mumbai. Chola Mutual Fund Chola Mutual Fund under the sponsorship of Cholamandalam Investment & Finance Company Ltd. was setup on January 3, 1997. Cholamandalam Trustee Co. Ltd. is the Trustee Company and AMC is Cholamandalam AMC Limited. LIC Mutual Fund
Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989. It contributed Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was constituted as a Trust in accordance with the provisions of the Indian Trust Act, 1882. . The Company started its business on 29th April 1994. The Trustees of LIC Mutual Fund have appointed Jeevan Bima Sahayog Asset Management Company Ltd as the Investment Managers for LIC Mutual Fund.

GIC Mutual Fund GIC Mutual Fund, sponsored by General Insurance Corporation of India (GIC), a Government of India undertaking and the four Public Sector General Insurance Companies, viz. National Insurance Co. Ltd (NIC), The New India Assurance Co. Ltd. (NIA), The Oriental Insurance Co. Ltd (OIC) and United India Insurance Co. Ltd. (UII) and is constituted as a Trust in accordance with the provisions of the Indian Trusts Act, 1882.

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Association of Mutual Funds in India (AMFI) AMFI is an apex body of all Asset Management Companies (AMC) which has been registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes are its members. It functions under the supervision and guidelines of its Board of Directors. Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a professional and healthy market with ethical lines enhancing and maintaining standards. It follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holders. The objectives of Association of Mutual Funds in India The Association of Mutual Funds of India works with 30 registered AMCs of the country. It has certain defined objectives which juxtaposes the guidelines of its Board of Directors. The objectives are as follows: This mutual fund association of India maintains high professional and ethical standards in all areas of operation of the industry. It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in the activities of mutual fund and asset management. The agencies who are by any means connected or involved in the field of capital markets and financial services also involved in this code of conduct of the association. AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund industry. Association of Mutual Fund of India does represent the Government of India, the Reserve Bank of India and other related bodies on matters relating to the Mutual Fund Industry. It develops a team of well qualified and trained Agent distributors. It implements a programme of training and certification for all intermediaries and other engaged in the mutual fund industry. AMFI undertakes all India awareness programme for investors in order to promote proper understanding of the concept and working of mutual funds. At last but not the least association of mutual fund of India also disseminate informations on Mutual Fund Industry and undertakes studies and research either directly or in association with other bodies.

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CHANNELS OF SELLING MUTUAL FUNDS

Mutual funds are emerging as an important financial intermediary for the investing public in India. Conceptually and operationally they are different. The investors need to understand the working of a mutual fund and the increasingly diverse and complex investment options brought to them by a large number of mutual funds. The key channel in bringing the mutual funds to a large number of investors all over the country is the network of INTERMEDIARIES /DISTRIBUTORS. In this industry we have five different channels through which mutual fund are sold:

Mutual Fund Company National Distributors (NDs) & Intermediaries Banks Individual Financial Advisors (IFAs) Internet

Each one has its own customer base. Their way of dealing with them is totally different from other. Every one attracts in their own way. How they attract we will study. There are many industries here. The urgency to keep increasing in size has led mutual funds to use marketing hooks to draw investors. As we rely only on channel partners, our relation with them really is going to play a vital role. How different companies lure the partners, well study that. As to start with we will first study about the intermediaries in brief by describing who they are and how they help a direct investor.
Mutual Fund Office:

Anyone can walk into a mutual funds office, and buy/sell units of its schemes. Its a simple process, and there are employees of the fund house on hand to guide you through. If you are buying units, you will have to fill up an application form and hand over a cheque equivalent to your investment. The fund house will give you an acknowledgement of your investment in its scheme(s) and subject to your cheque being cleared, send you an account statement within three to seven days. Since a fund house market only its schemes and not those of its competitors, buying directly means knowing which fund house we want to invest in. If we are selling units, the relevant document is the redemption form, which sometimes forms part of your account statement and can be torn off it, or can be had from the fund houses office. The fund house mails the cheque within three days. The problem with transacting through fund house is that they have a very thin presence. Most fund houses have just an office or two in the big cities; moreover, since such offices are located in the central business district, for most investors, this means travelling a fair distance. Its worse in smaller centres-only a few fund houses have a scattered presence. But as the industry grows and gains greater investor acceptance. Mutual funds are bound to expand beyond cities.
Intermediaries:

Distributors such as agents, banks and stockbrokers are present in much greater numbers, which makes them the preferred option among investors. While dealing with the intermediaries, make

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sure they have the AMFI (Association of Mutual Fund in India) certification-a SEBI precondition; since September 2003, for selling mutual funds, intended t ensure that only qualified distributors dispense mutual fund advice. AMFI issues photo identity cards to registered intermediaries, which is proof of their having acquired the certification.
National Distributors

The big agents are one-stop sellers of financial products. Agents score over mutual funds on convenience, choice and quality of service. They operate from multiple locations-for example, national distributors like Bajaj Capital has more outlets than most mutual funds-and are supported by an army of registered agents, some of whom are willing to come to our doorstop and sell schemes to you. Further, while a mutual fund offer its schemes, a big agent has the biggest stock among all mutual fund sellers, selling virtually all schemes of virtually every fund house, as well as other investment products. For us, this means more choice. If we know the scheme we want to invest in, go to an agent, fill up the schemes form and give in a cheque. Even if we dont know which scheme we want to invest in, a good agent will understand our need and help you pick a scheme. The agent should understand our reasons for investing in a mutual fund and based on that offer us appropriate options, and let us make a choice. An agent is supposed to be impartial and not show a preference towards a particular fund house. The very nature of the relationship between an intermediary and fund houses opens up the possibility of bias. Fund houses pay intermediaries a commission linked to the business they bring in. If fund house X pays a higher commission than fund house Y, an intermediary might push scheme X, as it stands to earn more. How do we know that we are being misguided or not? The entry load charged by a scheme can offer us some clues. The entry load represents the upfront costs an investor pays to invest in a scheme, and the agents commission tends to flow out of it. The higher the entry load, chances are, the higher the agents commission. If the agent is pushing the higher load scheme, perhaps he is more interested in maximizing his commission than our returns. Hence always know the entry load being charged by a scheme. Till mid 2002, intermediaries passed on a part of their commission to investors, as an incentive to invest. The amount of cash paid depended largely on much they got from a fund house. Obviously the more they got form the fund house, the more they passed on to investors. This often created an unhealthy situation, where cash incentives, and not investment-worthiness, determined which scheme, an agent recommended. In June 2002, to stop such abuse, SEBI made it illegal for intermediaries to give money and gifts to investors. Although intermediaries cant lure you with money now (legally speaking that is), their commission-based earnings structure means a distributor could still be a partial to a fund house. Which is why, listen to what an intermediary to say but also do the homework, and use your judgement to make an informed decision.

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Banks

A number of banks, especially the private and foreign ones, are into marketing the mutual fund schemes. Many of them market not only their own schemes, but also those of their rivals as a point of purchase; banks are a good option because of their fantastic reachbanks can be founded in every neighborhood. This wide reach has enabled banks to emerge as a major distributor. In 1999, barely 10 percent of fresh mutual fund sales were made through banks; during 2003, various estimates put the share of banks in mutual fund sales at between 30 percent and 50 percent. In terms of scope of service, banks are a notch below agents. Whatever your profile or investment amount might be, an agent will offer you personalized service-he will listen to your investment needs, offer you information on various schemes as asked by you, and suggest investment options. However, typically a bank will not give you this option or attention, unless you are a big money client and subscribe to its wealth management services. What banks will do, unconditionally, is help you through the investment formalities like filling up a form and offering basic information. But things are changing and banks are also giving personalized service to its retail investors also.
Individual Financial Advisors

Big brokers combine the attributes of agents (one-stop shop, personalized service) and banks (a team of analyst who crack the mutual fund industry). This service, though usually comes at a cost, and is reserved for their clients. Small brokers, on the other hand, welcome retail investors, but most of them market schemes of select fund houses only. These are independent professionals trained to advice you on all personal finance matters. They all sell financial products, as agents currently do. Unlike agents, though, CFPs might charge you for their services.

The Internet

At present, around 3 percent of mutual fund transactions are done online. This figure is bound to increase, with better Net connectivity are also expected to tie up with more banks, which will bring more investors into the loop.The other move that will provide a fillip to online transactions to be supplemented by physical documentation. At present, some fund houses enable buying-and in some instances, selling on three platforms:
1. Own websites-- Most of the mutual fund houses let you buy and sell the units of their

schemes through their websites. All you need is a Net banking account with any of the banks the fund houses have tied up with. You log on to the funds site, choose your scheme and investment amount. A link on the website takes you to the website of the designated bank, where you make your payment. Money is transferred from your Net banking account to the mutual fund and units are allotted to you instantaneously. The transaction is also documented in the physical formthe fund houses send you the application form to sign, and send back. Once you have done an online transaction with a fund house, you can open an online account with it.

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This will enable you to sell your holdings, switch between the schemes and purchase additional units-at the click of a mouse. 2. Financial Portals-- You can also buy units of several mutual funds through financial portals as myiris.com, timesofmoney.com and indiainfoline.com among others. The process and requirements are similar to that of for buying through the funds site. However, most portals enable only purchase. 3. Online trading portals-- Share trading portals like ICICIDirect (icicidirect.com) and Sharekhan (sharekhan.com) too offer a fair number of mutual fund schemes on their platforms. Registered user can buy or sell their units on offer, just like a stock-at no extra cost.

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COMPANY PROFILE SBI MUTUAL FUND

SBI Mutual Fund is Indias 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 - Indias 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 Socit Gnrale Asset Management, one of the worlds leading fund management companies that manages over US$ 500 Billion worldwide. In twenty years of operation, the fund has launched 38 schemes and successfully redeemed fifteen of them. In the process it has rewarded its investors handsomely with consistently high returns. A total of over 57 lakh investors have reposed their faith in the wealth generation expertise of the Mutual Fund. Schemes of the Mutual fund have consistently outperformed benchmark indices and have emerged as the preferred investment for millions of investors and HNIs. Today, the fund manages over INR 30,300 Crore through mutual funds, PMS & Offshore business and has a diverse profile of investors actively parking their investments across 36 active schemes. 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. 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. KEY PERSONNEL Mr. Achal Gupta (MD & CEO, SBI Mutual Fund) Mr. Srinivas Jain (Chief Marketing Officer, SBIMF) Mr. Navneet Munot (Chief Investment officer, SBIMF)

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SBIMF MAJOR SCHEMES UNDER EQUITY AND DEBT SCHEMES

Equity Schemes
Magnum COMMA Fund Magnum Equity Fund Magnum Global Fund Magnum Index Fund Magnum Mid Cap Fund Magnum Multi cap Fund Magnum Multiplier Plus Magnum Sector Funds Umbrella MSFU - FMCG Fund MSFU - Emerging Businesses Fund MSFU - IT Fund MSFU - Pharma Fund MSFU - Contra Fund Magnum TaxGain Scheme 1993 SBI Arbitrage Opportunities Fund SBI Blue chip Fund SBI ONE India Fund

Debt Schemes
Magnum Childrens Benefit Plan Magnum Gilt Fund Magnum Gilt Fund (Long Term) Magnum Gilt Fund (Short Term) Magnum Income Fund Magnum Income Plus Fund

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Magnum Income Plus Fund (Saving Plan) Magnum Income Plus Fund (Investment Plan) Magnum Insta Cash Fund Magnum Fund -Liquid Floater Plan Magnum Institutional Income Fund Magnum Monthly Income Plan Magnum Monthly Income Plan Floater Magnum NRI Investment Fund SBI Debt Fund Series SBI Premier Liquid Fund

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Research Methodology
Every project work is based on certain methodology which is a way to systematically solve the problem or attain its objectives. It is a very important guideline and lead to completion of any project work through observation, data collection and data analysis. According to Clifford Woody, Research Methodology comprises of defining and redefining problems, collecting, organizing, and evaluating data, making deductions and researching to conclusions. Accordingly the methodology used in the project is as follows: Defining the objective of the study Framing the questionnaire keeping objective in mind (considering the objectives) Feedback from the respondents Analysis of feedback Conclusion, findings and suggestions

Statistical Tools used The main statistical tool used for the collection and analysis of the data in this project are Questionnaire Scatter Charts (Using Excel) SPSS AHP

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Spss report:

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From the above report we can see the perception of various financial instruments in the customers point of view. The options of stock market and fixed deposit are very far which shows that they are not competing with each other. The three financial products mutual funds , ulips and insurance are at equal distances to each oother because they are a bit similar in their nature of investments. Ulips is a combination of both insurance and mutual fund and hence they are similar but not completely equal. Stock market and mutual fund are a bit closer to each other as they invest in the shares of various companies. Hence customers perceive them to be a bit similar. PERCEPTION ANALYSIS:

regular income vs high growth and returns

high growth and returns 8 6 4 2 0 0 2 fixed deposit Insurance 4 regular income Mutual Funds Ulips Stock markets

regular income vs high growth and returns: stock markets are perceived to be giving high returns and regular income while fixed deposit is low on both the factors. Insurance is perceived to have very low growth in terms of investments. Ulips and mutual funds are perceived as same.

regular income vs low risk and safety

7 6 5 4 3 2 1 0 0 low risk and safety fixed deposit insurance ulips mutual funds stock markets 2 4 regular income 6 8

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regular income vs low risk and safety: stock markets give high regular income but the safety of the investment is very low.fixed deposits are perceived as very safe but have very low income. Hence those people who wants high returns can invest in stock markets but should be willing to take the risk. Mutual funds are perceived to give regular income and at the same time the risk involved is less.

regular income vs financial freedom

8 financial freedom 6 4 2 0 0 2 4 regular income 6 8 insurance fixed deposit stock markets ulips mutual funds

regular income vs financial freedom: stock markets are perceived to have high income and financial freedom . it is followed by mutual funds which are almost similar to ulips.

high growth and returns vs low risk and safety

7 6 5 4 3 2 1 0 0 low risk and safety fixed deposit insurance ulips mutual funds stock markets 2 4 high growth and returns 6 8

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high growth and returns vs low risk and safety : mutual funds are perceived to have more risk compared to ulips insurance, and fixed deposit while they are less riskier than stock markets. The growth and returns in mutual funds are also high.

high growth and returns vs financial freedom

7 6 5 4 3 2 1 0 0 financial freedom

stock markets ulips insurance mutual funds fixed deposit

4 high growth and returns

high growth and returns vs financial freedom: mutual funds have good growth and returns after stock markets while ulips are perceived to have higher financial freedom because they invest in both mutual funds and insurance.

low risk and safety vs financial freedom

financial freedom 8 6 4 2 0 0 1 2 3 4 5 6 7 low risk and safety stock markets mutual funds ulips insurance

fixed deposit

low risk and safety vs financial freedom : stock markets are perceived to be having lowest safety but high freedom of investment which is followed by mutual funds. Ulips and insurance are perceived to have higher safety to mutual funds.

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Analytical Hierarchy Process

Analytic Hierarchy Process (AHP) is one of Multi Criteria decision making method that was originally developed by Prof. Thomas L. Saaty, (born 1926 in Mosul, Iraq) is an American mathematician who is a Distinguished University Professor at the University of Pittsburgh, where he teaches in the Joseph M. Katz Graduate School of Business. He is the inventor, architect, and primary theoretician of the Analytic Hierarchy Process, a decision-making framework used for large-scale, multiparty, multi-criteria decision analysis, and of the Analytic Network Process, its generalization to decisions with dependence and feedback. Dr. Saaty has made contributions in the fields of operations research (parametric linear programming, epidemics and the spread of biological agents, queuing theory, and behavioral mathematics as it relates to operations), arms control and disarmament, and urban design. He has written more than 30 books and 300 papers on mathematics, operations research, and decision making. Their subjects include graph theory and its applications, nonlinear mathematics, analytical planning, and game theory and conflict resolution. In short, it is a method to derive ratio scales from paired comparisons. The input can be obtained from actual measurement such as price, weight etc., or from subjective opinion such as satisfaction feelings and preference. AHP allow some small inconsistency in judgment because human is not always consistent. The ratio scales are derived from the principal Eigen vectors and the consistency index is derived from the principal Eigen value. Analytical Hierarchy Process provides a proven, effective means to deal with complex decision making and can assist with identifying and weighting selection criteria, analyzing the data collected for the criteria and expediting the decision-making process. It is a structured technique for dealing with complex decisions. Rather than prescribing a "correct" decision, the AHP helps the decision makers find the one that best suits their needs and their understanding of the problem. AHP helps capture both subjective and objective evaluation measures, providing a useful mechanism for checking the consistency of the evaluation measures and alternatives suggested by the team thus reducing bias in decision making. Combined with meeting automation, organizations can minimize common pitfalls of team decision making process, such as lack of focus, planning, participation or ownership, which ultimately are costly distractions that can prevent teams from making the right choice. Based on mathematics and psychology, it has been extensively studied and refined since then. The AHP provides a comprehensive and rational framework for structuring a decision problem, for representing and quantifying its elements, for relating those elements to overall goals, and for evaluating alternative solutions. It is used around the world in a wide variety of decision situations, in fields such as government, business, industry, healthcare, and education. Several firms supply computer software to assist in using the process. Though using the Analytic Hierarchy Process requires no specialized academic training, it is considered an important subject in many institutions of higher learning, including schools of engineering and graduate schools of business. It is a particularly important subject in the quality field, and is taught in many specialized courses including Six Sigma, Lean Six Sigma, and QFD.

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Decision situations applicable for AHP include: Choice - The selection of one alternative from a given set of alternatives, usually where there are multiple decision criteria involved. Ranking - Putting a set of alternatives in order from most to least desirable Prioritization - Determining the relative merit of members of a set of alternatives, as opposed to selecting a single one or merely ranking them Resource allocation - Apportioning resources among a set of alternatives Benchmarking - Comparing the processes in one's own organization with those of other bestof-breed organizations Quality management - Dealing with the multidimensional aspects of quality and quality improvement

Sample response:

The various financial instruments under consideration are denoted as follows: BANK FIXED DEPOSIT INSURANCE MUTUAL FUND STOCK MARKET ULIPS FD INS MF SM UL

The various criterion used is denoted as follows: regular income high growth and returns low risk and safety of investment financial freedom LR FF RI HG

matrix A response RI 6 8 4 7 RI HG LR FF sum 1.0000 1.3333 0.6667 1.166667 4.1667 6 HG 0.7500 1.0000 0.5000 0.875 3.1250 8 LR 1.5000 2.0000 1.0000 1.75 6.2500 4 FF 0.8571 1.1429 0.5714 1.0000 3.5714 7

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NORMAL matrix RI HG LR FF RI matrix Response 8 9 6 5 7 FD INS MF SM UL SUM

RI 0.24 0.32 0.16 0.28

HG 0.24 0.32 0.16 0.28

LR 0.24 0.32 0.16 0.28

FF 0.24 0.32 0.16 0.28

WA of A 0.24 0.32 0.16 0.28

8 9 6 5 7 FD INS MF SM UL 1.0000 0.8889 1.3333 1.6000 1.1429 1.1250 1.0000 1.5000 1.8000 1.2857 0.7500 0.6667 1.0000 1.2000 0.8571 0.6250 0.5556 0.8333 1.0000 0.7143 0.8750 0.7778 1.1667 1.4000 1.0000 4.3750 3.8889 5.8333 7.0000 5.0000

NORMAL of RI matrix

FD INS MF SM UL

FD INS MF SM UL 0.2286 0.2286 0.2286 0.2286 0.2286 0.2571 0.2571 0.2571 0.2571 0.2571 0.1714 0.1714 0.1714 0.1714 0.1714 0.1429 0.1429 0.1429 0.1429 0.1429 0.2000 0.2000 0.2000 0.2000 0.2000

WA of RI 0.2286 0.2571 0.1714 0.1429 0.2000

1.1429 1.2857 0.8571 0.7143 1.0000 n max 5.0000

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HG matrix Response 5 6 8 9 7 FD INS MF SM UL SUM

FD INS MF SM UL 1.0000 0.8333 0.6250 0.5556 0.7143 1.2000 1.0000 0.7500 0.6667 0.8571 1.6000 1.3333 1.0000 0.8889 1.1429 1.8000 1.5000 1.1250 1.0000 1.2857 1.4000 1.1667 0.8750 0.7778 1.0000 7.0000 5.8333 4.3750 3.8889 5.0000

NORMAL of HG matrix

FD INS MF SM UL

WA of FD INS MF SM UL HG 0.1429 0.1429 0.1429 0.1429 0.1429 0.1429 0.1714 0.1714 0.1714 0.1714 0.1714 0.1714 0.2286 0.2286 0.2286 0.2286 0.2286 0.2286 0.2571 0.2571 0.2571 0.2571 0.2571 0.2571 0.2000 0.2000 0.2000 0.2000 0.2000 0.2000

0.7143 0.8571 1.1429 1.2857 1.0000 n max 5.0000

CI RI LR matrix Response 9 FD 8 INS

0 1.188

FD INS MF SM UL 1.0000 1.1250 1.5000 1.8000 1.2857 0.8889 1.0000 1.3333 1.6000 1.1429

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6 MF 5 SM 7 UL SUM

0.6667 0.5556 0.7778 3.8889

0.7500 0.6250 0.8750 4.3750

1.0000 0.8333 1.1667 5.8333

1.2000 1.0000 1.4000 7.0000

0.8571 0.7143 1.0000 5.0000

NORMAL of LR matrix

FD INS MF SM UL

FD INS MF SM UL 0.2571 0.2571 0.2571 0.2571 0.2571 0.2286 0.2286 0.2286 0.2286 0.2286 0.1714 0.1714 0.1714 0.1714 0.1714 0.1429 0.1429 0.1429 0.1429 0.1429 0.2000 0.2000 0.2000 0.2000 0.2000

WA of LR 0.2571 0.2286 0.1714 0.1429 0.2000

1.2857 1.1429 0.8571 0.7143 1.0000 n max 5.0000

CI RI

0 1.188

CR

0 (CR<0.1 Hence we proceed further)

FF matrix 5 6 8 9 7 FD INS MF SM UL 1.0000 0.8333 0.6250 0.5556 0.7143

5 FD

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6 8 9 7

INS MF SM UL SUM

1.2000 1.6000 1.8000 1.4000 7.0000

1.0000 1.3333 1.5000 1.1667 5.8333

0.7500 1.0000 1.1250 0.8750 4.3750

0.6667 0.8889 1.0000 0.7778 3.8889

0.8571 1.1429 1.2857 1.0000 5.0000

NORMAL of FF matrix

FD INS MF SM UL

FD INS MF SM UL 0.1429 0.1429 0.1429 0.1429 0.1429 0.1714 0.1714 0.1714 0.1714 0.1714 0.2286 0.2286 0.2286 0.2286 0.2286 0.2571 0.2571 0.2571 0.2571 0.2571 0.2000 0.2000 0.2000 0.2000 0.2000

WA of FF 0.1429 0.1714 0.2286 0.2571 0.2000

0.7143 0.8571 1.1429 1.2857 1.0000 n max 5.0000

CI RI

0 1.188

CR CI = (nmax - n) / (n-1) RI =( 1.98 * (n-2)) / n

0 (CR<0.1 Hence we proceed further)

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CR = CI / RI

If CR < 0.1 then proceed

WA of WA of WA of WA of RI HG LR FF 0.2286 0.1429 0.2571 0.1429 0.2571 0.1714 0.2286 0.1714 0.1714 0.2286 0.1714 0.2286 0.1429 0.2571 0.1429 0.2571 0.2000 0.2000 0.2000 0.2000

WA of A 0.24 0.32 0.16 0.28

0.18171 0.20114 0.20571 0.21143 0.20000

RANK 5 3 2 1 4

FD INS MF SM UL

RANK 5 FD 3 INS 2 MF 1 SM 4 UL The above is the ranking of various financial instruments according to AHP of the customers choice. Based on this we can find out the position of mutual funds in the customers preference. The same procedure is calculated for all the customers and the collective rank is taken. It is found that as most of the customers are interested in high growth and returns from their their investment the best option for them would be to invest in stock markets and mutual funds as they are the top two ranked instruments. Hence the customer awareness should be increased so that they start investing in mutual funds as they want high returns which is possible through mutual funds.

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Conclusions and Recommendations : Based on Primary data and analysis :

The ahp results show that those customers who want high returns should invest in stock markets and mutual funds. Most of the customers are not aware of mutual funds. Hence their awareness levels must be increased. Most of the Customers with income below 15000rs p.m do not have a pan card. Hence they must be educated to get a pan card issued. The company can have a tie-up with pan card brokers so that those customers who are willing to invest in mutual funds, but do not have pan cards are also considered as potential customers. The spss results show that customers perceive mutual funds as somewhat similar to stock markets and hence consider mutual funds to be as risky as stock markets. But because of factors like expert guidance, diversified investments, mutual funds are less risky. Hence customers must be educated on this issue. Also customers are perceiving ulips to be similar to mutual funds and has greater financial freedom and less risk. Hence proper discrimination must be done to avoid mutual funds from being clubbed with ulips.

General Recommendations: The net AUM of SBI mutual funds is rs 37213.06 as on april 30 ,2010 and thus stands at 8th highest position by netAUM. Thus it shows that SBI is a top player in the industry. The main reason for this is that customers feel SBI is safe as it is backed up by State Bank Of India. Hence the brand image of SBI should be properly used to improve the investors confidence. The service levels of SBI Mutual fund is perceived to be lower to other top funds like Reliance, HDFC etc. Hence care must be taken to provide standard service to all customers. Many customers have complained regarding delays and mishappenings in transactions like redemption, registration etc. Hence these problems must be reduced as far as possible. The televisions in the state owned banks can be used for displaying advertisements of SBI Mutual fund so that it increases the awareness. The relationship managers take around six months to get completely acquainted with the customers , IFAs, brokers etc. The people deal directly with the relationship manager and remember him as a person rather than an SBI employee. All the queries are sent to him personally. So when the relationship manager is transferred within a short span of six months to one year ,it becomes difficult for the intermediaries to communicate with the company through a new person. All the queries are sent to the old relationship manager and it becomes difficult for him to handle those queries which are not under his supervision. Hence relationship managers should not be transferred in short intervals.

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Most of the IFAs felt that the taxgain scheme is saturated completely as it has around 5000 cr. Hence the amount cannot be invested in any big companies as there is a limit for every company. Hence it is better to stop the taxgain scheme and launch a new scheme in its place. Most of the IFAs have complained about the low brokerages given to them compared to other mutual fund companies. Hence the brokerages should be increased to compete with other top performing funds. The returns in most of the SBI funds are very low(highest is 26% for contra fund) compared to other company funds like Reliance and HDFC which have funds giving more than 30% returns. Hence the performance of the funds must be increased. Most of the intermediaries are not aware of most of the funds in SBI, hence the relationship managers must make regular visits to them and inform them about various funds and their benefits. Most of the intermediaries felt that the application forms and promotional materials used are not that satisfactory compared to other competitors.

Limitations:
The sample size used was 70 ,which may not have represented the whole population. Most of the customers are not aware of mutual funds, hence their responses were based on what they have learnt from our explanations to them. The statistical tools used have many inbuilt limitations in them.

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BIBLIOGRAPHY www.mutualfundsindia.com www.moneycontrol.com www.sbimf.com www.amfiindia.com www.nseindia.com Magazines: Business World Business Today The Economist News papers: Economic Times Business Standard Marketing research : naresh malhotra, pearson Statistics for management : Levin and rubin, pearson, 7th edition Website ; www.wikipedia.org www.google.co.in www.answers.com

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Annexure (survey form):

Respondent sheet for

AHP Please give weightage for the following: Regular income High growth and returns Low risk and safety of investment Financial freedom (9-high 1-low)

Regular income BANK FIXED DEPOSIT INSURANCE MUTUAL FUNDS STOCK MARKET ULIPS

High growth and returns

Low risk and safety of investment

Financial freedom

Questionnaire for perception mapping :

Bank Fixed Deposits 1. Fixed Deposits give you regular income 1 Strongly Disagree 2 3 4 5 6 7 Strongly Agree

2.

Fixed Deposits give you high growth and returns 1 2 3 4 5 6 7 Strongly Agree

Strongly Disagree

3.

Fixed Deposits give you low risk and safety of investment

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1 Strongly Disagree

7 Strongly Agree

4.

Fixed Deposits give you financial freedom in investment 1 2 3 4 5 6 7 Strongly Agree

Strongly Disagree

Insurance 1. Insurance gives you regular income 1 Strongly Disagree 2 3 4 5 6 7 Strongly Agree

2.

Insurance gives you high growth and returns 1 2 3 4 5 6 7 Strongly Agree

Strongly Disagree

3.

Insurance gives you low risk and safety of investment 1 2 3 4 5 6 7 Strongly Agree

Strongly Disagree

4.

Insurance gives you financial freedom in investment 1 2 3 4 5 6 7 Strongly Agree

Strongly Disagree

Mutual funds 1. Mutual funds give you regular income

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1 Strongly Disagree

7 Strongly Agree

2.

Mutual funds give you high growth and returns 1 2 3 4 5 6 7 Strongly Agree

Strongly Disagree

3.

Mutual funds give you low risk and safety of investment 1 2 3 4 5 6 7 Strongly Agree

Strongly Disagree

4.

Mutual funds give you financial freedom in investment 1 2 3 4 5 6 7 Strongly Agree

Strongly Disagree

Stock markets 1. Stock markets give you regular income 1 Strongly Disagree 2 3 4 5 6 7 Strongly Agree

2.

Stock markets give you high growth and returns 1 2 3 4 5 6 7 Strongly Agree

Strongly Disagree

3.

Stock markets give you low risk and safety of investment

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1 Strongly Disagree

7 Strongly Agree

4.

Stock markets give you financial freedom in investment 1 2 3 4 5 6 7 Strongly Agree

Strongly Disagree

Ulips 1. Ulips give you regular income 1 Strongly Disagree 2 3 4 5 6 7 Strongly Agree

2.

Ulips give you high growth and returns 1 2 3 4 5 6 7 Strongly Agree

Strongly Disagree

3.

Ulips give you low risk and safety of investment 1 2 3 4 5 6 7 Strongly Agree

Strongly Disagree

4.

Ulips give you financial freedom in investment 1 2 3 4 5 6 7 Strongly Agree

Strongly Disagree

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Similarity judgement respondent sheet

Fixed deposit vs insurance Fixed deposit vs mutual funds Fixed deposit vs stock market Fixed deposit vs ulips Insurance vs mutual funds Insurance vs stock market Insurance vs ulips Mutual funds vs stock market Mutual funds vs ulips Stock market vs ulips

Very similar Similar Not so similar Not dissimilar or similar Not so dissimilar Dissimilar Very dissimilar

1 2 3 4 5 6 7

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