Professional Documents
Culture Documents
MR.
AASHISH
MR. PARIJAT MR. ANAND
WAKANKAR(V
AGRAWAL GUPTA (Head – BOARD OF
ice President
( Head – Fixed Offshore DIRECTORS
& Fund Income) funds)
Manager);He
ad Equity
•MR. PANKAJ
GUPTA (Fund MR. R.S.
Manager) MS. APARNA MR. NAVNEET SRINIVAS
MR. ASHWINI
•MR. JAYESH MR. GANTI N NIRGUDE MUNOT (Chief JAIN
K. JAIN (Chief
SHROFF(Fund MURTHY (CHIEF RISK
Manager Operating Investment (Chief
(Fund Manager) OFFICER)
•MR. VIVEK Officer) Officer) Marketing
PANDEY( Fund Officer)
Manager)
SBI Funds Management: a strong growth
Mutual funds Expertise
Parties where control exists:
Holding Company State Bank of India holds 63% of the share capital
Enterprise having significant influence Societe General Asset Management holds 37% Of
the share capital
Enterprise over which the company has control SBI Funds Management (International) Private
Limited (100% subsidiary)
EQUITY SCHEMES
• Magnum COMMA Fund
• Magnum Equity Fund
• Magnum Global Fund
• Magnum Index Fund
• Magnum Midcap Fund
• Magnum Multiplier Plus 1993
• Magnum NRI Investment Fund
• Magnum Sector Funds Umbrella
MSFU - Emerging Business Fund
MSFU – IT Fund
MSFU – Pharma Fund
MSFU – Contra Fund
MSFU – FMCG Fund
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.
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.
•To provide an opportunity for lower income groups to acquire without
much difficulty, property in the form of shares.
•To Cater mainly of the need of individual investors, whose means are
small
•To manage investors portfolio that provides regular income, growth,
Safety, liquidity, tax advantage, professional management and
diversification.
MUTUAL FUND STRUCTURE
RISK RETURN PROFILE
More the risk more will be return. Money market mutual funds are least risky,
and sectoral funds are most risky as shown in the above diagram.
OBJECTIVES OF THE STUDY
The objectives of this research are as follows:
To compare the performance of midcap mutual funds of competitor companies with
SBI midcap mutual fund.
To know the best among the funds so compared and to find out the position of SBI
midcap mutual fund among the funds so compared.
To know the customer preference towards the compared mutual funds.
To recommend suggestions for improvements to SBI mutual fund company for its
further growth in the mutual fund industry.
RESEARCH DESIGN
According to Clifford Woody, “research comprises defining and redefining
problems, formulating hypothesis or suggested solutions; collecting, organizing and
evaluating data; making deductions and reaching conclusions; and at last carefully
testing the conclusions to determine whether they fit the formulating hypothesis.
This research is divided in two parts:
• Performance comparison of madcap mutual funds through secondary data based
on certain parameters;
• An exploratory research based on a survey of the concerning literature. A sample
survey was conducting with the help of Scheduling Method of collecting data i.e.
personally the enumerator visited and got the questionnaires filled from the respondents.
The enumerator in this method helps the respondents in recording their answers to
various questions in the said schedules.
RESEARCH PROBLEM
The main problem this research is to compare and analyse the performance of midcap
mutual funds of competitor firms with SBI midcap fund.
The scope of this study is to provide an insight into concept of mutual funds and the mutual
fund industry. It aims to provide a complete knowledge on schemes of competitor funds in
the midcap mutual funds category and their comparison with SBI along with customer
perception about the same.
SOURCES OF DATA
There are two types od data viz. primary and secondary. The primary data are those which
are collected afresh and for the first time, and thus happen to be original in character.
The secondary data, on the other hand, are those which have already been collected by
someone else and which have already been passed through the statistical process.
For this research report, primary data was collected and there was no bias on the part of the
enumerator while selecting the sample.
Secondary data was also used that is internet, brochures of firms, magazines and newspapers.
SAMPLE SIZE
For this research, in part one, a sample size of 10 mutual fund companies including
SBI mutual fund was taken out of the population which was the whole mutual fund
industry in India
For the second part, a sample size of 100 respondents was taken out of the total
investors in who invest in midcap mutual funds in Indian mutual fund companies.
SAMPLE AREA
The sample area was Chandigarh and involved respondents coming in SBI Bank,
main branch, Sector 17, Chandigarh and the offices of mutual fund companies in
Chandigarh only.
The various statistical tool used were standard deviation, data distribution tables,
graphs and pie charts. Apart from this statistical tools used for mutual funds
comparison are:
P/B (price-to-book value ratio) is used to compare a stock's market value to its book
value (book value = assets minus liabilities).
LIMITATIONS OF THE STUDY
Equities and equity related instruments the within 65% – 100% High
range of Rs. 200 crores – Rs. 2000 crores +
(midcap companies)
MagnumMidcapReturns(%) BSE100Returns
Entry Load: N.A.
Exit Load:
Investments below Rs. 5 crore, exited before 3 years from the date of allotment - 1% * Investments below Rs. 5
crore, exited on or after 3 years from the date of allotment - NIL * Investments above Rs. 5 crore - NIL
SIP:
Rs 500/month - 12 months, Rs 1000/month - 6months, Rs 1500/quarter - 12 months
SWP
A minimum of Rs. 500 can be withdrawn every month or quarter by issuing advance instructions to the
Registrars at any time.
FUND STYLE:
GROWTH BLEND VALUE
N A V C O M P A R IS O N
700
600
500
N A V a s o n 2 2 t h J u ly 2 0 0 9 ( in R s . )
400
NAV (Rs.)
N A V a s o n 8 t h J u ly 2 0 0 9 (in R s . )
300
N A V a s o n 5 t h A u g 2 0 0 9 (in R s . )
200
100
0
UTI Mid
Cap-G
Prima-G
Franklin
BSL Mid
ICICI Pru
Equity-G
India
Cap-G
STAR-G
HSBC
Emerging
Growth-G
Reliance
Midcap-G
S.M.I.L.E.
Magnum
Sundaram
Sundaram
Leaders-G
Emerging
Paribas
Paribas
Select
BNP
BNP
JM
FUND NAM E
H IG H A N D L O W N A V
40 0
35 0
30 0
VALUE (Rs.)
25 0
20 0
15 0
10 0
50
0
B S L M id F ra n k lin HS BC IC IC I Pru JM M ag n u m R eli an ce S u n d aram S u n d aram U T I M id
C a p -G In d i a Prim a - E q u ity-G E m e rg in g E m erg in g M id ca p -G G ro w th -G B N P Pa rib asB N P Parib as C a p -G
G S T A R -G L ea d ers-G S .M .I.L .E . S e le ct
R eg -G M i d ca p
R e g -G
FUND NAM E
52 W eek s H ig h 5 2 W ee k s L o w
INTERPRETATION:
• Reliance Growth has the highest NAV i.e the Net Asset Value even in the 52 weeks comparison and the last month’s comparison and is at
number one.
• Franklin India Prima Fund is at second.
• Sundaram BNP Paribas Select Midcap Reg. is at third.
• HSBC equity at fourth position.
• Birla Sun Life Midcap Fund at fifth.
• Sundaram BNP Paribas S.M.I.L.E. Reg at sixth.
• ICICI Pru Emerging Star at seventh.
• UTI Midcap at eighth position.
• SBI Magnum Midcap at ninth and JM Emerging Leader at bottom.
But we can see growth in NAV of all funds over the selected period of comparison.
ON THE BASIS OF RETURN
1 Y e a r R e t u r n % C o m p a r is o n
60
40
20
0
-2 0 1 -Y e a r R e tu rn (% ) a s o n 5 th A u g 0 9
-4 0 1 -Y e a r R e t u rn (% ) a s o n 2 2 n d J u ly 0 9
HSBC
Equity
RETURN %
UTI Mid
Cap
Franklin
India
Prima
Reliance
Growth
Magnum
Midcap
Birla Sun
Life Mid
Emerging
Leaders
Cap
Emerging
ICICI
Prudential
JM
Sundaram
Sundaram
Paribas
Paribas
BNP
BNP
-6 0 1 -Y e a r R e t u rn (% ) a s o n 8 t h J u ly 0 9
-8 0
-1 0 0
-1 2 0
-1 4 0
FUND NAM E
INTERPRETATION:
•High increase in 1-year returns for Franklin India Prima Fund, HSBC Equity and Sundaram BNP Paribas
S.M.I.L.E.Reg.
•Constant increase in other funds.
3 Y e a r R e tu r n % C o m p a r is o n
30
20
10 3 -Y e a r R e t u rn (% ) a s o n 8 t h J u ly
0 3 -Y e a r R e tu rn (% ) a s o n 2 2 n d J u l
Return %
-1 0 3 -Y e a r R e tu rn (% ) a s o n 5 th A u g
HSBC
Equity
UTI Mid
Cap
India
Franklin
Prima
Growth
Reliance
Midcap
Magnum
Life Mid
-2 0
Birla Sun
Cap
ICICI
JM
Emerging
Leaders
Emerging
Prudential
Paribas
Paribas
Sundaram
Sundaram
BNP
BNP
-3 0
Fund Nam e
INTERPRETATION:
•Fall in Birla Sun Life Midcap, Franklin India Prima Fund after a sharp increase, HSBC Equity, ICICI PRU
Emerging Star, JM Emerging Leaders, Magnum Midcap, Reliance Growth and UTI Midcap.
•Increase in return of Sundaram (Both the funds).
INTERPRETATION:
•Increase in return of all the funds.
ON THE BASIS OF PORTFOLIO
30
25
20 P /E Ratio
Value
15
10 P /B Ratio
5
0
B irla S un F rank lin HS B C ICICI JM M agnum Relianc e S undaramS undaram UTI M id
Life M id India E quity P rudential E m erging M idc ap G rowth B NP B NP Cap
Cap P rim a E m erging Leaders P aribas P aribas
S TA R S .M .I.L.E . S elec t
Reg M idc ap
Reg
F u n d Na m e
INTERPRETATION:
•Low P/E Ratio for UTI Mid Cap, JM Emerging Leaders which meant low investor expectations from these
funds.
•Average P/E Ratio for BSL Midcap, Franklin India Prima Fund, SBI Magnum Midcap, and Sundaram BNP
Paribas Select Midcap Reg.
•High P/E Ratio for the rest of the funds which means high investor expectations from them.
High P/B Ratio for HSBC Equity, Reliance Growth and Franklin India Prima fund which mean good
overall performance of these companies.
Low P/B Ratio for JM Emerging Leaders, Magnum Midcap, UTI Midcap and Both SUNDARAM
Funds which means stock undervaluation and poor overall performance of the companies.
Medium P/B Ratio for the remaining funds.
T u rn o ve r(% )
120
100
80
Value %
60 T u rn o ve r(% )
40
20
0
B irla S u nF ra n k lin H S B C IC IC I JM M a g n u mR e lia n c Se u n d a raSmu n d a ra mU T I M id
L ife M id In d ia E q u it y P ru d e n t iaE lm e rg in gM id c a p G ro w t h B N P BNP C ap
Cap P rim a E m e rg in gL e a d e rs P a rib a s P a rib a s
S TA R S . M . I. L . E S. e le c t
R e g M id c a p
R eg
Fund Na m e
INTERPRETATION:
HSBC Equity
ICICI Prudential
Emerging STAR
JMEmerging Leaders
Magnum Midcap
Reliance Growth
INTERPRETATION:
•Reliance Growth has highest share of Assets flowed by Sundaram S.M.I.L.E and ICICI Prudential Emerging
Star respectively.
Market Capitalization (Rs. Cr.)
Birla Sun Life Mid Cap
HSBC Equity
ICICI Prudential
Emerging STAR
JM Emerging Leaders
Magnum Midcap
Reliance Growth
INTERPRETATION:
0
10
20
30
40
50
60
Birla Sun
Life Mid
Cap
Franklin
India
Prima
HSBC
Equity
ICICI
Prudential
Emerging
STAR
JM
Emerging
Leaders
Magnum
Midcap
FUND NAM E
S t a n d a rd D e via t io n
Reliance
Growth
S ta n d a r d D e v i a ti o n Sundaram
BNP
Paribas
S.M.I.L.E.
ON THE BASIS OF RISK AND VOLATILITY
Sundaram
BNP
Paribas
Select
UTI Mid
Cap
S h a rp e R a tio
0 .6
0 .5 0 .4 8
0 .4 0 . 4 2 0 . 4 1 0 .4
0 .3 0 .2 9
0 .2 0 .1 8 S h a rp e R a t io
VALUE
0 .1 0 . 1 3 0 . 1 3 0 .1
0
- 0 . 1 B i r l a S Fu nr a n k l i Hn S B C IC IC I J M- 0 . 1M1 a g n u Rm e l i a n Sc eu n d a Sr aumn d a r Ua mT I M i d
-0 .2
L i fe M Ini dd i a P r Ei mq au i t yP r u d e nEt ima l e r g iMn gi d c a pG r o w t h B N P B N P C a p
Cap E m e r g iLn eg a d e r s P a r i b a Ps a r i b a s
S TA R S . M . I. L S. Ee . l e c t
R e g M id c a p
FUND NAM E Reg
INTERPRETATION:
Birla Sun Life, HSBC Equity, Reliance Growth, Sundaram S.M.I.L.E and Sundaram Midcap have a better
risk- adjusted performance as compared to the other funds.
BETA COMPARISON
1.46 1.36
1.13 1.06 1.21 1.18 1.1 1.15
1.47 1.36 1.02
0.83 1.2 1.18 1.09
1.13 1.05 1.15 1.02
0.83 1.47 1.36
1.13 1.05 1.15 1.2 1.18 1.09
VALUE 1.02 Beta on 5th Aug 09
0.83
Beta on 22nd July 09
Beta on 8th July 09
Beta on 8th July 09 Beta on 22nd July 09
Beta on 5th Aug 09
HSBC Equity
Reliance Growth
Magnum Midcap
Franklin India Prima
Reg BNP
Paribas S.M.I.L.E.
Paribas Select
Sundaram BNP
Midcap Reg
Leaders
Sundaram
Cap
FUND NAME
INTERPRETATION:
•The beta chart shows that JM Emerging Leaders is the most volatile fund as compared to the market whereas
HSBC Equity is the least volatile fund as compared to the market.
A lp h a C o m p a r is o n
10
5
0
-5 B irla S u Fn ra n k lin H S B C IC IC I JM M a g n u mR e lia n c Se u n d a raSmu n d a ra Um T I M id
L ife M id In d ia E q u it y P ru d e n t Eia ml e rg in Mg id c a p G ro w t h B N P BNP Cap A lp h a
VALUE
INTERPRETATION:
• Positive Alpha value for BSL, HSBC, Reliance & Sundaram S.M.I.L.E.which shows that they have
outperformed as compared to their respective benchmarks.
• Negative Alpha value for the rest which shows that they have not been able to outperform their
respective benchmarks.
R -S q u a re d C o m p a ris o n
1
0.95
0 .9
VALUE
0.85
0 .8
0.75
Equity
HSBC
UTI Mid
Reliance
Franklin
Birla Sun
Magnum
Growth
Emerging
Prudential
Prima
Midcap
Life Mid
Emerging
Sundaram
Sundaram
India
Leaders
Cap
Paribas
Paribas
ICICI
Cap
BNP
BNP
JM FUND NAM E
R -S q u a re d
INTERPRETATION:
The performance of all the funds have been in line with their respective benchmark indexes.
NOTE: For the terms used like Sharpe Ratio, Alpha, Beta, R-Squared refer the chapter 8 on
abbreviations.
INVESTMENT DETAILS
2 .5
2
1 .5
VALUE
1
0 .5
0
B i r l a S uFnr a n k l i n H S B C IC IC I JM M a g n u mR e l i a n cSe u n d a r Sa mu n d a rUa TmI M i d C a p
L i f e M iInd d i a P r i mE qa u i t y P r u d e n tEi aml e r g i nMg i d c a p G r o w t Bh N P P a Br i Nb aP s P a r i b a s
C ap E m e r g i nLge a d e r s S . M . I. L . ES . e l e c t
STA R R e g M id c a p R e g
FUND NAM E
F r o n t-E n d L o a d %
INTERPRETATION:
3
2 .5
2
1 .5 E x p e n s e R a tio %
VALUE
1 2 .3 2 2 .1 6 1 .9 8 2 .3 2 2 .3 9 2 .5 2 .4 1 .9 9 2 .3 4
1 .8 2
0 .5
0
B i r la S uF nr a n k l i nH S B C IC IC I J M M a g n u Rm e l i a n cS eu n d a rSa umn d a r aUmT I M i d
L i fe M Ini d d i a P r i Em qau i t yP r u d e n Et i am l e r g i nM g i d c a pG r o w t h B N P B N P C a p
Cap E m e r g inL ge a d e r s P a r i b a sP a r i b a s
S TA R S . M . I. L . SE e. l e c t
R e g M id c a p
Reg
FUND NAM E
INTERPRETATION:
Maximum expense ratio is that of Magnum Midcap, followed by Sundaram S.M.I.L.E., JM Emerging
Leaders, UTI Midcap, ICICI Prudential Emerging Star and Birla Sun Life Midcap, Franklin India Prima fund,
Sundaram Midcap, HSBC Equity and Reliance Growth in the descending order of their respective expense
ratio.
Q1. Are you aware about mutual funds?
25
20 21
NO. OF PEOPLE
20
15
15 12 YES
10
10 8 NO
7
5
5
0
18-32 32-46 46-60 60+
AGE GROUP
NO. OF PEOPLE
0
5
10
15
20
25
Less than 30
Rs. 1,00,000
1
14
1,00,001-
1,50,000
3
15
YE S
1,50,001-
2,50,000
11
16
NO
IN C OME GR OU P
2,50,001-
(according to incom e)
5,00,000
2
28
AW ARENESS OF MUTUAL FUNDS
Above
Rs.5,00,000
0
10
AW AR EN E SS OF MU TU AL FU N D S (according to occupation)
25
25 20
17
20
11 12
15 8
NO . O F PEOPLE 5
10 4 YES
5 NO
0
GovernmentProfessionalBusinessmenS hopkeepers
Job and Others
O CCUPATION
INTERPRETATION:
•According to Age: Awareness about the concept of mutual funds is high in the age group of 42-60 years (21
people out of 28 people) and also in the age group of 60+.
•According to Income: Awareness about the concept of mutual funds is high in the income group of
Rs.2,50,001 – Rs.5,00,000 and in the Above Rs.5,00,000 income group.
•According to Occupation: Awareness of the concept of mutual funds is high among people in Govt. Jobs,
Professionals and Businessmen and awareness is relatively less amongst Shopkeepers and Others.
NOTE: Those who were not aware about the concept of mutual funds were first explained about the
concept of mutual funds.
Q2.) Are you a regular investor?
30
25
NO. OF PEOPLE
20
YES
15
NO
10
5
0
18-32 32-46 46-60 60+
AGE GROUP
AC C O R D IN G T O IN C O M E G R O U P
30
25
NO. OF PEOPLE
20
YES
15
NO
10
5
0
Les s than1,00,001-1,50,001-2,50,001-
Rs . 1,50,000 2,50,000 5,00,000
1,00,000
INCO M E G RO UP
A C C O R D IN G T O O C C U P A T IO N
28
30
25 17
15 15
20 13
10
N O . O F P E O P 15
LE
YE S
10 2
0 NO
5
0
G overn m ent
P rofe s s ional
B us ines s mSenh opkeepers
Job and O thers
O C C U P AT IO N
INTERPRETATION:
•According to Age: There is regular investment by people in the age group of 18-32 years and 32-46 years.
•According to Income: There is regular investment by people in the income class of Rs.2, 50.001-Rs.5,
00,000.
•According to Occupation: There is regular investment among Professionals and Businessmen.
Q3.) Do you invest using:
23 NO. OF
16 PEOPLE
12
4
By Intuition
12 11 14
8 By Scientific Tools
By Scientific
By Intuition
Tools
18-32 32-46 46-60 60+
AGE GROUP
A C C O R D IN G T O IN C O M E
25
25 22
20 16
15 10
NO. OF PEOPLE 8
10 B y S c i e n ti fi c T o o ls
5 5 5
2 2 B y In tu i ti o n
5
0
L e s s th1a,0n 0 ,0 01 1,5- 0 ,0 02 1,5- 0 ,0 0 A1 -b o v e
R s . 1 ,0 01,0,5000,0 02 0,5 0 ,0 05 0,0 0 ,0R0s0.5 ,0 0 ,0 0 0
IN C O M E C L A S S
ON THE BASIS OF OC CU PATION
30
25
NO. OF PEOPLE
20 B y Scientific
15 Tools
B y Intuition
10
5
0
Government Professional B usinessmen Shopkeepers
Job and Others
OCCUP ATION
INTERPRETATION:
•According to Age: More people invest using scientific tools in the age group of 32-46 years.
•According to Income: More people invest using scientific tools in the income class of Rs. 2,50,001-
5,00,000 and Above Rs.5,00,000
•According to Occupation: More people invest using scientific tools in the occupation group of
Businessmen.
Q4.) What are your preferred investment
priorities?
Insurance
INVESTMENTPREFERENCE
Bank
Bonds&
Debentures
9% 11% Equities&Share
6% Market
5% PPF(Public
13%
Provident Fund)
12% NSC(N ational
SavingSchem es)
10%
Post O ffice
SavingSchem es
14% 7% Real Estate
13%
Gold
Mutual Funds
INTERPRETATION:
The most preferred avenue for investment of income by people is NSC (14%) followed by
Banks Fixed Deposits and PPF at 13%, Post Office Saving Schemes at 12%, Insurance 11%, Bonds and
Debentures 10%, Mutual funds 9%, Equities and Share Market 7%, Gold 6% and Real Estate 5%.
Q5.) What percentage of your income do you
invest?
Above 50%
50% - 30%0%
21% Below 10%
Below 10% 10% - 30%
52% 30% - 50%
30% - 10%
Above 50%
27%
INTERPRETATION:
Most People invest “Below 10%” of their income (52%), 27 % people invest 10% to 30% of their income,
21% invest 30% to 50% of their income and none invest above 50% of their income.
Q6.) What is your perception about Mutual
Funds?
Balanced 65
PERCEPTION
Safe 12
NO.OF PEOPLE
INTERPRETAION:
65 people have the perception that mutual funds have a balanced risk, 23 people perceive that mutual funds
are risky whereas 12 people perceive that mutual funds are safe. The people who said that mutual funds are
safe were those who had earned gains in schemes of mutual funds. Those who said mutual funds are risky
were the ones who had suffered losses in their previous investments in mutual funds.
Q7.) Have you invested in some Mutual
funds?
No
18
Yes
82
0 20 40 60 80 100
NO. OF PEOPLE
No. of People
INTERPRETATION:
82 % people have invested in mutual funds earlier or have their investments in mutual funds at present.
Q8.) Are you aware about the different types of Mutual Fund schemes present in the
market?
Yes
37% Yes
No No
63%
INTERPRETATION:
63% people are not aware about the different mutual fund schemes present in the market which shows that
this is the main reason people are not able to judge pro’s and con’s of different schemes of mutual funds and
hence suffer losses.
Q9.) How do you select and choose Mutual Funds?
Brand Name
Relatives and
Other Sources
Brand Name High NAV(Net Asset
19%
31% Value)
Advertisement High Dividends
s
High NAV (Net
16% Advertisements
High (Asset Value
Dividends 8%
Relatives and Other
26%
Sources
INTERPRETATION:
Most of the people invest in mutual funds on the basis of Brand Name (31%) followed by High Dividend
(26%), Relatives and other Sources (19%), Advertisements (16%) and High NAV (8%).
Q10.) Which Mutual Fund have you invested in from the following?
70
60 63 58
50 49 48 53
40 42
32 36
30 25
20 19
10
0 Prudential
Sundaram
Schemes
Birla Sun
Reliance
Franklin
Magnum
Morgan
HSBC
Others
UTI
India
ICICI
Life
SBI
JP
FUND NAME
No. of People
INTERPRETATION:
Reliance is the most preferred mutual fund for people followed by, SBI Magnum Schemes, Sundaram, HSBC,
Birla Sun Life, UTI, ICICI Prudential, Franklin India, JP Morgan and Others respectively.
Q11.) Are you satisfied with your mutual fund?
60
50
40
NO. OF
30 No. of People
PEOPLE
20
10
0
Yes No
RESPONSE
INTERPRETATION:
One Time
23
OPTIONS
Investment
No. of People
Systematic
Investment 77
Plan
NO. OF PEOPLE
INTERPRETATION:
77 % people prefer to invest in mutual funds through Systematic Investment Plan (SIP) and 33% through one
time investment. Those who opted for one time investment were told about the benefits of SIP at the end of
questionnaire filling.
Q13.) On an average for how long do you keep your investment in mutual fund?
INTERPRETATION:
42% people keep their investment in mutual funds for 0-3 years(included mostly middle com group and age
group of 46-60 years, 37 % people invest for a period upto 3-5 years (included mostly the high income group
and age group of 32-46 years and 18-32 years 21 % prefer 5 years to more who were mostly the businessmen.
Q14.) What is the purpose for your investment in Mutual Funds?
120
100 97
80
60 62
40 45
31
20
0
Investment Tax Saving Building corpus Just parking
over a period of your reserved
time monet
RESPONSE
NO. OF PEOPLE
INTERPRETATION:
Most of the people invest in mutual funds for purpose of tax saving (97 and included the businessmen and
high income group people) at first preference followed by building corpus of money (62 and included the
middle income group and government employees), investment purpose (45) and parking of reserved money
(31) respectively.
Q15.) You prefer to invest in:
IN V E S T M E N T OP T ION P R E F E R R E D
69
31
No. of P eople
Dividend G rowth
INV ES TM ENT O P TION
If dividend then:
Dividend
OPTION TYPE
Payout 37
No. of People
Dividend
Reinvest 32
NO. OF PEOPLE
INTERPRETATION:
69% people prefer Dividend option and rest Growth option. Also out of those who prefer dividend option 37
people prefer Dividend payout option and 32 prefer dividend reinvest.
Q16.) Are you a:
RISK APPETITE
High Risk
Taker
19%
High Risk Taker
LowRisk Medium Risk Taker
Taker MediumRisk
Taker Low Risk Taker
56%
25%
INTERPRETATION:
Majority of people (56%) are Low Risk Takers, 25 % are Medium Risk Takers and 19% are High Risk Takers
(these were the businessmen and people in income class of above
Rs.5, 00,000).
FINDINGS
• According to NAV comparison Reliance Growth is the top performing mutual fund
and SBI
Midcap is at the ninth position.
• High P/E ratio for the rest of the mutual funds except that of SBI, UTI, JM
Emerging Leaders
Birla Sun Life and Franklin which shows high expectations of investors from these
funds (i.e.
with a high P/E ratio).
• High P/B ratio for HSBC equity, reliance Growth and Franklin India Prima fund
which
indicated overall good performance of the company.
• JM Emerging Leaders is the most volatile fund as compared to the rest in the
market.
• Reliance and Sundaram have been able to outperform their respective benchmarks.
• Many people especially in the age group of 18-32 and in the income group of
Rs.1, 00,001 – Rs. 2, 50,000 are not aware of the concept of mutual funds.
• Many people invest in mutual fund mainly for the purpose of tax saving.
• Most of the people are scared to invest in mutual funds especially those who have
suffered
losses by investing in mutual funds earlier.
• People prefer to invest in National Saving Certificate and Bank fixed deposits
mainly as they
have the perception that mutual funds carry a risk (even though balanced) than the
above
mentioned investment options and these were mainly people who were in the age
group of
60+ and people who are in the income group of Rs.1, 00,001-Rs.2, 50,000 and
below
Rs.1, 00,000 respectively.
• Those who prefer to invest in mutual funds prefer the option of Systematic
Investment Plan.
• SBI is at the third position acording to the survey and Reliance is at number 1.
• Continuity, rather the lack of it, has been a major issue with SBI Mutual Fund. Chief
investment officers (CIOs) come from SBI, on deputation for three to five years. Whenever a
new CIO comes, the whole working style and structure changes.
Over the past few years, SBI Mutual Fund has has a definite focus for investment in each
scheme, clear policies and procedures for investments, and a proper monitoring system.
Once these systems are in place, changes in personnel will not impact operations or
performance much. Of course, the effort will be to continuously evolve processes and
systems to improve the quality of investments, in terms of both returns and risk. The
results are there to see. Various SBI schemes have not only been above-average
performers, they have managed to sustain this out performance for over a year now.
• Minimum SIP amount can be also reduced as the competitors have done as shown in the
scheme details above which will help to attract more customers.
• Also as per my findings and shown above Reliance Growth is popular even among investors
and among the top players as per analysis part 1 so scheme features of Reliance Growth fund
can be incorporated into SBI Magnum Midcap fund.
• Following Asset Allocation can be adopted:
EQUITY AND EQUITY RELATED65%- 100%.
INSTRUMENTS
This is the right time to catch up and invest in Magnum Midcap Fund.
SBI Mutual Fund’s first ETF product - SBI Gold Exchange Traded Scheme got listed on the
National Stock Exchange on the 28th May.
Many customers of SBI Magnum and Midcap have suffered losses as found in the survey
carried. But now it is advised that this is the best time to invest into equities. One can invest
at low market and take out the money when the market is high.
Efforts should be made by SBI Mutual fund to promote equity schemes both for the benefit
of investors as well as the growth of Indian economy.
NET ASSET VALUE (NAV)
Net Asset Value is the market value of the assets of the scheme minus its liabilities. Per unit NAV is the net
asset value of the scheme divided by the number of units outstanding on the Valuation Date. It is calculated
simply by dividing the net asset value of the fund by the number of units. However, most people refer loosely
to the NAV per unit as NAV, ignoring the "per unit". We also abide by the same convention.
•Net Assets = Assets - Liabilities
•Assets = Market value of Investments + Receivables + Accrued income + Other
Assets
•Liabilities = Accrued expenses – Payables – Liabilities
•NAV of a Unit = Net Assets of the Scheme
Number of units outstanding
For example, if the market value of securities of a Mutual Fund scheme is Rs.200 lakhs and it 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.
SHARPE RATIO
The Sharpe ratio tells us whether a portfolio's returns are due to smart investment decisions or a result of
excess risk. This measurement is very useful because although one portfolio or fund can reap higher returns
than its peers, it is only a good investment if those higher returns do not come with too much additional risk.
The greater a portfolio's Sharpe ratio, the better its risk-adjusted performance has been.
BETA
A measure of the volatility, or systematic risk, of a security or a portfolio in comparison
to the market as a whole. Also known as "beta coefficient".
A
beta of 1 indicates that the security's price will move with the market. A beta of less than
1 means that the security will be less volatile than the market. A beta of greater than 1
indicates that the security's price will be more volatile than the market. For example, if a
stock's beta is 1.2, it's theoretically 20% more volatile than the market.
R-SQUARED
A statistical measure that represents the percentage of a fund or security's movements that
can be explained by movements in a benchmark index. For fixed-income securities, the
benchmark is the T-bill. For equities, the benchmark is the S&P 500.
R-
squared values range from 0 to 100. An R-squared of 100 means that all movements of a
security are completely explained by movements in the index. A high R-squared
(between 85 and 100) indicates the fund's performance patterns have been in line with the
index. A fund with a low R-squared (70 or less) doesn't act much like the index.
ALPHA
A measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of a mutual fund and
compares its risk-adjusted performance to a benchmark index. The excess return of the fund relative to the
return of the benchmark index is a fund's alpha.
A
positive alpha of 1.0 means the fund has outperformed its benchmark index by 1%. Correspondingly, a
similar negative alpha would indicate an underperformance of 1%.
STANDARD DEVIATION
In finance, standard deviation is applied to the annual rate of return of an investment to measure the
investment's volatility. Standard deviation is also known as historical volatility and is used by investors as a
gauge for the amount of expected volatility.
Standard deviation is a statistical measurement that sheds light on historical volatility. For example, a volatile
stock will have a high standard deviation while the deviation of a stable blue chip stock will be lower. A large
dispersion tells us how much the return on the fund is deviating from the expected normal returns.
THANKYOU