Summer Training Project Report

On

“Study of SBI Mutual Funds in India”

Submitted to

I.K. GUJRAL PUNJAB TECHNICAL UNIVERSITY KAPURTHALA

In partial fulfilment of the requirement for the award of degree of

Master of Business Administration (MBA)

Submitted By Supervisor
Mamta Ms. Neha Tantia

2217947 (HR Officer.)

MBA DEPARTMENT

CHANDIGARH BUSINESS SCHOOL OF ADMINISTRATION

LANDRAN

2022-2024

1
CERTIFICATE

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 STUDENT DECLARATION

I, “Mamta”, hereby declare that I have undergone my summer training at “Outlook publishing India Pvt.
Ltd.” from 01-07-2023 to 11-09-2023. I have completed a research project titled “Study of SBI Mutual Funds
in India” under the guidance of Ms. Neha Tantia (HR Officer in Outlook publishing India Pvt. Ltd.)
Further I hereby confirm that the work presented herein is genuine and original and has not been published
elsewhere.

Mamta

________________

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 FACULTY DECLARATION

I hereby declare that the student Mr. Mamta of MBA (II) has undergone his summer training under my
periodic guidance on the Project titled “Study of SBI Mutual Funds in India”.

Further I hereby declare that the student was periodically in touch with me during his training period and the
work done by the student is genuine & original.

(Signature of Supervisor)

(Signature of Head of Department)

___________________________

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 ACKNOWLEDGEMENT

The satisfaction of successful completion of any task wouldn’t be complete without the expression of gratitude
to the people who made it possible. I am very thankful to Dr. Jasminal Kaur (Assistant professor in Chandigarh
Business School of Administration) and Ms. Neha Tantia (HR Officer in Outlook Publishing India Pvt. Ltd.),
for the guidance and interest evinced throughout the preparation of the project. I also extend my gratitude to
the respondents of my survey for their kind cooperation.

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 TABLE OF CONTENTS
Certificate by Guide i

Student Declaration ii

Faculty Declaration iii

Acknowledgment iv

CHAPTER NO. CHAPTER TITLE PAGE NO.

1 INTRODUCTION 7

2 LITRETURE REVIEW 16

4 SBI MUTUAL FUND 34

5 RESEARCH METHODOLOGY 38

6 INTERPRETATION AND DATA ANALYSIS 41

7 FINDINGS AND SUGGESTIONS 48

REFERENCES AND BIBLIOGRAPHY 51

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 CHAPTER-1
INTRODUCTION

7
Mutual Funds: -

Mutual funds are quickly developing in India, owing to both infrastructure development

and Indians perception of mutual funds as an ideal investment vehicle. Risk reduction,

competent professional management, a diversified portfolio, tax benefits, and

economies of scale are all key advantages for investors.

According to RNCOS's "Indian Mutual Fund Sector" research report, the mutual fund

industry in India is rapidly expanding. Stocks, on the other hand, in which the funds are

placed, are prone to risk. As a result, it is necessary to examine the risk and return of

Mutual Funds. Some Mutual funds have performed well and some did not and thus

investors incurred losses due to movements of the stocks in the market. The movements

of the stocks depend on the performance of a particular firm, or the stage in which the

industries is

etc.

Stock market assumes an exceptionally indispensable part in creating economy like

India and furthermore drawing in the provincial individuals lately. Investors as a rule

see that generally capital market venture roads are dangerous. Besides, on the off chance

8
that an investor chooses to put resources into shares to acquire better yields in brief time

frame with least speculation, he ought to essentially have sufficient specialized

information connected with share market.

Additionally, he is expected to dedicate unbalanced chance to get legitimate specialized

information to be master investor in the offer market. Subsequently, it is seen that there

is an expanding and slanting pattern towards interest in mutual funds. According to Dave

Ramsey, "Monetary harmony isn't the securing of stuff. It's figuring out how to live on

short of what you make, so you can give cash back and have cash to contribute. You

can't win until you do this".

Concept of Mutual Funds

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

a typical monetary objective. The cash gathered from investors is put resources into

capital market instruments like offers, debentures and different protections. Mutual Fund

issues units to the investors as per quantum of cash contributed by the investors.

Investors of mutual funds are known as unit holders. The pay procured through these

speculations and the capital appreciation acknowledged is shared by its unit holders in

relation to the quantity of units possessed by them. In this way mutual fund is the most

appropriate speculation for the average person as it offers an amazing chance to put

resources into a broadened, expertly oversaw bushel of protections at a moderately lower

cost. In India, there are many organizations, both public and private that are occupied

with the exchanging of mutual funds. Wide assortments of Mutual Fund Plans are

9
accessible on the lookout. Investors can put their cash in various sorts of mutual funds

relying on their singular speculation targets.

Like different speculation roads, common subsidizes additionally offer benefits and

impediments, which are significant for any investor to consider and comprehend before

they choose to put resources into shared store.

Scope of Study

The primary focal point of the review was to follow the presentation of the different

Mutual fund plans. Since various organizations emerge with comparable subjects in a

similar season, it becomes challenging for the organization to continually perform well

to endure the opposition and give most extreme capital appreciation or return by and

10
large. Other than the market, the presentation of the fund relies upon the sort of stock

chose by the fund supervisors of the organization.

The examination is done on the presentation of funds with a similar topic or area and

reason out why a fund performs better compared to the others in the parcel. It is restricted

to investors and their speculation inclinations. Concentrate on objective is to research

the profit from interest in share market and to comprehend the fund support

characteristics affecting the choice of Mutual fund schemes. Likewise to figure out that

how far the Mutual fund schemes can win the certainty of the investors.

Need for the Study

The primary motivation behind this study is to be familiar with mutual funds and its

working. This assists with knowing in insights concerning mutual fund industry right

from its origin stage, development and future possibilities. It additionally helps in

getting various plans of mutual funds, since the review relies on various plans like Value,

Dept, Adjusted as well as the profits’ related with those plans. The review was done to

dissect the Profit related with the different mutual funds. At last this would help in

getting the advantages of mutual funds to investors.

Objectives of the Study

The following are the main objectives of the study:

❖ Evaluate the Performance of SBI Mutual Funds:

❖ Assess the Diversification of SBI Mutual Funds:

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❖ Analyse the Suitability of SBI Mutual Funds for Different Investors:

❖ Gain Insights into the Professional Management of SBI Mutual Funds:

Advantages of Mutual Funds

On the off chance that mutual funds are arising as the most loved speculation vehicle, it

is a result of the many benefits they have over different structures and the roads of

contributing, especially for the investor who has restricted funds accessible as far as

capital and the capacity to convey out detailed exploration and market observing.

Coming up next are the significant benefits offered by mutual funds to all investors.

❖ PORTFOLIO DIVERSIFICATION

Every investor in the fund is a section proprietor of the multitude of fund's resources, in

this manner empowering him to hold an enhanced venture portfolio even with a limited

quantity of speculation that would otherwise require large capital.

❖ PROFESIONAL MANAGEMENT

Regardless of whether an investor has a major measure of capital accessible to him, he

profits by the proficient administration abilities acquired by the fund in the

administration of the investor's portfolio. The speculation the executives’ abilities,

alongside the required examination into available investment choices, guarantee a

greatly improved return than what an investor can oversee on his own. Few investors

have the expertise and funds of their own to prevail in today’s quick, worldwide and

refined markets.

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 ❖ REDUCTION/ DIVERSIFICATION OF RISK

Whenever an investor contributes straight forwardly, all the risk of potential misfortune

is his own, whether he puts a store with an organization or a bank, or he purchases an

offer or debenture all alone or in any other from. While putting resources into the pool

of funds with investors, the potential misfortunes are also shared with different investors.

The risk decrease is one of the main advantages of a collective speculation vehicle like

the mutual fund.

❖ LIQUIDITY

Frequently, investors hold offers or bonds they can't straight forwardly, effectively and

immediately sell. When they put resources into the units of a fund, they can by and large

money their ventures any time, by selling their units to the fund if open-finished, or

selling them on the lookout assuming the fund is close-end. Liquidity of speculation is

obviously a major advantage.

❖ TAX BENEFITS

Any pay disseminated after Walk 31, 2002 will be liable to burden in the assessment of

all Unit holders. Notwithstanding, as a proportion of admission to Unit holders of open-

finished value situated reserves, pay conveyances for the year finishing Walk 31, 2003,

will be charged at a concessional pace of 10.5%.In instance of People and Hindu Unified

Families an allowance up to Rs. 9,000 from the All-out Pay will be acceptable in regard

of pay from ventures indicated in Section80L, including pay from Units of the Mutual

fund. Units of the plans are not subject to

Wealth-Assessment and Gift-Duty.

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Disadvantages of Mutual Funds

❖ NO CONTROL OVER COSTS

An investor in a mutual fund has no control of the general expenses of contributing. The

investor pays speculation the executives’ expenses as long as he stays with the fund,

though in return for the expert administration and exploration. Expenses are payable

regardless of whether the worth of his investments is declining. A mutual fund investor

additionally pays reserve dispersion costs, which he would not cause in direct

contributing. Notwithstanding, this deficiency just intends that there is a cost to get the

mutual fund services.

❖ MANAGING A PORTFOLIO OF FUNDS

Accessibility of an enormous number of funds can really mean an excessive amount of

decision for the investor. He may again require exhortation on the most proficient

method to choose a fund to accomplish his targets, quite similar to the circumstance

when he has individual offers or bonds to choose.

❖ NO TAILOR MADE PORTFOLIO

Investors who contribute all alone can fabricate their own arrangement of offers and

bonds and different protections. Contributing through reserve implies he assigns this

choice to the fund managers. The extremely high-total funds people or huge corporate

investors might find this to be a requirement in accomplishing their targets. In any case,

most mutual fund chiefs help investors overcome this requirement by offering groups of

14
funds countless various plans inside their own administration organization. A investor

can browse different growth strategies and builds a portfolio to his decision.

❖ DILUTION

Mutual funds for the most part have such little possessions of such countless various

stocks that insanely extraordinary execution by an fund's top property actually doesn't

make a big deal about a distinction in a mutual fund complete execution.

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 CHAPTER-2

LITERATURE REVIEW

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Part of exploration has been done on Assessing execution of mutual funds in

unfamiliar also as in India: -

• (S. Poornima, 2013) In this examination paper an endeavour is made to

dissect about the presentation of the development arranged value enhanced

plans by utilizing Sortino proportion. 102 growth-oriented equity diversified

schemes which were performing during the period April 2006 to March 2011

were chosen for the review. This exploration paper plainly uncovers the way

that cautious assessment utilizing fitting execution measure will lead the

investor in choosing the best funds.

• Bansal, Garg and Saini, (2012), examined the presentation of chosen mutual fund

schemes that the risk Profile of the complete mutual fund universe can be exactly

pondered by a fundamental market record that offers similar month to month liquidity,

returns, deliberate and unsystematic danger and complete fund examination by using the

extraordinary reference of Sharpe and Treynor's extent.

• (Sahil Jain, 2012), investigation of Equity Based Mutual Funds in India

endeavoured to dissect the execution of value based common funds. The investigation

has been made utilizing the risk return relationship and Capital Fund Pricing Model

(CAPM). The general examination tracks down that SBI and ICICI have been the best

entertainers; UTI a typical entertainer and LIC the most awful entertainer which gave

below expected returns on the risk-return relationship.

• (Palanisamy, 2012) studied Investment Pattern in Debt Scheme of Mutual Funds.

Information gathered through interview plan and factual apparatuses utilized like rate

investigation, weighted positioning examination and Chi-square examination. The

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review presumes that obligation plot are reasonable for certified investors as there exists

an assortment of investors needs relying upon reason, assumptions and hazard taking

capacities.

• (Jatinder Loomba, 2011) Evaluates the exhibition and development of Indian

common finances opposite the Indian value market. The general examination observes

that Nifty returns beat Franklin Templeton Huge Cap Equity Scheme returns. Kruskal

• Dubravo Mihaljek (2008) focused on unambiguous the implications of strategy

reactions. He has perceived two critical issues: I) under assessment of the improvement

in credit risk emerging from quick credit improvement, ii) Chance of a sharp lull or

reversal in bank intermediated capital streams.

• Roshni Jayam's (2002) concentrate on drew out that values had a good chance of

appreciation in future. The expert was of the view that, investors should actually

condemn their speculation goal and hazard craving picking plans, enhanced value

reserves were regularly safer than others and list reserves were the best when market

developments were don't know. The specialist proposed Orderly Withdrawal Plan

(SWP) with improvement elective was continuously fitting for monetary experts

requiring standard money inflows.

• Gupta and Sehgal (1998) assessed execution of 80 mutual fund schemes more than

four years (1992-96). The assessment attempted the proposal relating to support

broadening, consistency of execution, boundary of execution and hazard return

relationship. The examination saw the presence of insufficient portfolio development

and consistency in execution among the example plans.

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• Fama (1972) made methods to perceive noticed return due to the ability to get the

best protections at a given level of chance from that of assumptions for esteem

improvements in the market. He introduced a multi-period model allowing appraisal on

a period-by-period also, on a combined premise. That's what he denoted; return on a

portfolio lays out of return for security assurance and return for bearing risk. His

responsibilities joined the thoughts from present day theories of portfolio assurance and

market balance with logically regular thoughts of good portfolio the board.

• Sharpe (1966) makes sense of in a cutting-edge portfolio theory setting that the

normal return for a capable portfolio and its connected risk (unsystematic risk) are

straightforwardly related. By merging various thoughts, he developed a Sharpe record.

In this paper he attempted to rate the show in light of the ideal portfolio with the unsafe

portfolio and a risk free resource is the one with the best prize to-capriciousness. The

unsystematic danger is related to explicit security on account of wasteful administration.

• Treynor (1965) contemplated that assessing a portfolio's return near with its

methodical risk is progressively sensible. In his undertaking he had assessed the

presentation of mutual funds on a characteristics line graphically. The more effective

risk or eccentrics a save has the more hazardous an fund become. By joining variety of

ideas; he made single line record, called Treynor file.

Wallis H-test was applied to know whether the profits fundamentally vary or not and the

outcomes showed that the profits of plans don't contrast altogether.

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SELECTION PARAMETERS FOR MUTUAL FUNDS

❖ YOUR OBJECTIVE

The primary highlight note prior to putting resources into a fund is to see if your

objective matches with the plan. It is fundamental, as any contention would

straightforwardly influence your prospective returns. Likewise, you ought to pick

conspires that meet your particular necessities. Models: benefits plans, youngsters'

arrangements, area-explicit plans, and so forth.

❖ YOUR RISK CAPACITY AND CAPABILITY

This directs the selection of plans. Those with no risk resilience ought to go for debt

schemes, as they are moderately more secure. Forceful investors can go for value

investments. Investors that are much more forceful can attempt plots that put resources

into explicit industry or sectors.

❖ FUND MANAGERS SCHEME AND TRACK RECORD

Since you are giving your well-deserved cash to somebody to oversee it, it is imperative

that he oversees it well. It is likewise fundamental that the fund house you pick has great

track record. It additionally ought to be proficient and keep up with high

straightforwardness in activities. Check out at the presentation of the plan against

significant market benchmarks and its rivals. Look at the execution of a more drawn out

period, as it will give you how the plan fared in various market conditions.

❖ COST FACTOR

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However, the AMC charge is directed, you ought to check out at the cost proportion of

the fund prior to contributing. This is on the grounds that the cash is deducted from your

ventures. A higher entry load or leave load additionally will eat into your profits. A

higher cost proportion can be defended just by superlative returns. It is extremely urgent

in an obligation reserve, as it will gobble up a couple of rates from your humble returns.

Also, Morningstar rates mutual funds.

Every year end, numerous monetary distributions list the year's best performing mutual

funds. Normally, extremely anxious investors will rush out to buy portions of last year's

top entertainers. That is a serious mix-up. Keep in mind, changing market conditions

make it interesting that last year's top entertainer rehashes that positioning for the

ongoing year. Mutual Fund investors would be very much encouraged to think about the

fund plan, the fund manager, and the ongoing economic situations. Never depend on last

year's top entertainers.

TYPES OF RETURNS ON MUTUAL FUNDS

There are three different ways, where the complete returns given by mutual funds can

be appreciated by investors:

• Pay is acquired from profits on stocks and interest on bonds. A fund pays out nearly

all pay it gets throughout the year to finance proprietors as dissemination.

• Assuming the fund sells protections that have expanded in value, the fund has a

capital increase. Most funds additionally give these increases to investors in a

distribution.

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If store possessions expansion in cost yet is not sold by the fund supervisor, the fund's

shares increase in cost. You can then sell your mutual fund shares for a benefit. Funds

will likewise usually give you a decision either to get a check for appropriations or to

reinvest the income and get more shares.

MARKETING STRATEGIES FOR MUTUAL FUNDS

❖ BUSINESS ACCOUNTS

The most well-known deals and promoting methodologies for mutual funds are to join

companies as a favoured choice for their retirement plans. This gives a straightforward

method for marking up numerous accounts with one expert agreement. To market to

these organizations, salesmen target human fund experts. Showcasing happens through

customary business-to business marketing methods including meetings, specialty

publicizing and professional organizations. For business s accounts, store delegates will

pressure simplicity of use and similarity with the organization's current frameworks.

❖ CONSUMER MARKETING

Customer showcasing of mutual funds is like how other monetary items are sold.

Marketers stress wellbeing, unwavering quality and execution. Likewise, they might

give data on their variety of decisions, usability and low expenses. Advertisers attempt

to access all portions of the populace. They utilize wide showcasing stages like

television, newspapers and the web. Advertisers particularly centre around monetarily

situated media such as CNBC TV and Work week magazine.

❖ PERFORMANCE

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Mutual funds should be exceptionally cautious about how they market their

presentation, as this is heavily directed. Common subsidizes should showcase their

short, medium and long-haul average returns to provide the planned investor with a

smart thought of the real exhibition. For example, most funds did very well during the

lodging blast. In any case, assuming the bear market that followed is incorporated,

execution looks substantially more normal. Funds may likewise have had different

chiefs with various execution records chipping away at similar funds, making it difficult

to pass judgment on them.

❖ MARKETING FEES

Mutual funds should be extremely clear about their expenses and report them in all of

their marketing materials. The fundamental sorts of charges incorporate the deals

expense (load) and the administration expense. The load is a forthright charge that a

mutual fund charges when the speculation is made. The management charge is a level

of resources every year, normally 1 to 2 percent.

WORKING OF MUTUAL FUNDS

The mutual fund gathers cash straightforwardly or through representatives from

investors. The money is put resources into different instruments relying upon the goal

of the plan. The income generated by selling protections or capital enthusiasm for these

protections is given to the investors with respect to their interest in the plan. The

speculations are isolated in to units and the worth of the units will be reflected in Net

Fund Worth or NAV of the unit. NAV is the market worth of the resources of the plan

short its liabilities. The per unit NAV is the net fund worth of the plan isolated by the

quantity of units extraordinary on the valuation date. Mutual funds organizations give

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everyday net resource worth of their plans to their investors. NAV is significant, as it

will decide the cost at which you purchase or reclaim the units of a scheme.

Depending on the heap design of the plan, you need to pay passage or leave load.
STRUCTURE OF A MUTUAL FUND

India includes a lawful structure inside which Mutual Fund must be comprised. In India

open and close-end reserves work under a similar administrative design for example as

unit Trusts. A Mutual Funds in India is permitted to give open-end and close-end plans

under a common legal structure. The construction that is expected to be trailed by any

Mutual fund in India is laid down under SEBI (Mutual fund) Guidelines, 1996

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 ❖ THE FUND SPONSOR
Support is characterized under SEBI guidelines as any individual who, acting alone or

in combination of another corporate body lays out a Mutual fund. The sponsor of the

fund is AK in to the advertiser of an organization as he gets the funds enrolled with

SEBI. The support forms a trust and designates a Leading group of Legal administrators.

The support additionally delegates the Resource Management Company as fund chiefs.

The support either straightforwardly or acting through the legal administrators will also

appoint a caretaker to hold subsidizes resources.

Every one of these are made as per the regulation and rules of SEBI.

❖ MUTAL FUNDS AS TRUSTS

A Mutual fund in India is established as Open trust Act, 1882. The Fund sponsor goes

about as a settlor of the Trust, adding to its underlying capital and names a legal

administrator to hold the resources of the trust to assist the unit-holders, who are the

recipients of the trust. The fund then welcomes investors to contribute their cash in like

manner pool, by scribing to "units" gave by different plans laid out by the Trusts as proof

of their advantageous interest in the fund.

It ought to be perceived that the fund ought to be only a "go through" vehicle. Under the

Indian Trusts Act, the trust of the fund has no autonomous legitimate limit itself, rather

the Trustee or the Legal administrators have the lawful limit and thusly all

demonstrations according to the trusts are taken for its benefit by the Legal

administrators. In lawful speech the investors or the unit-holders are the advantageous

25
proprietors of the venture held by the Trusts, even as these speculations are held in the

name of the Legal administrators on an everyday premise. Being public trusts, Mutual

fund can invite any number of investors as helpful proprietors in their venture plans.

❖ TRUSTEES

A Trust is made through a record called the Trust Deed that is executed by the fund

support for the legal administrators. The Trust-the Mutual fund might be overseen by a

leading group of legal administrators an assemblage of people, or a trust organization a

corporate body. The majority of the funds in India are overseen by Sheets of Legal

administrators. While the sheets of legal administrators are administered by the Indian

Trusts Act, where the trusts are a corporate body, it would likewise expect to comply

with the Organizations Act, 1956. The Board or the

Trust organization as an autonomous body, acts as a defender of the of the unit-holders

interests. The Legal administrators don't straightforwardly deal with the arrangement of

protections. For this expert capacity, the designate a Resource. The executives Company.

They guarantee that the Fund is overseen by ht AMC according to the characterized

goals and in accordance with the trusts deeds and SEBI guidelines.

❖ BANKERS

A Good times d's exercises include managing in cash on a nonstop premise principally

with regard to trading units, paying for speculation made, getting the returns from sale

of the ventures and releasing its commitments towards working costs. Along these lines

the Fund's investor assumes a significant part to decide nature of administration that the

fund yields ideal conveyance of settlements and so forth.

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 ❖ TRANSFER AGENTS

Transfer agents are liable for giving and reclaiming units of the Mutual Fund and offer other

related types of assistance, for example, planning of move reports and refreshing investor

records. A fund might decide to do its movement in-house and charge the plan for the

service at a cutthroat market rate. Where an external Transfer specialist is utilized, the fund

invests or will view the specialist as a significant connection point to manage, since the

entire investors services –that an fund gives will be subject to the exchange specialist.

❖ CUSTODIAN AND DEPOSITORIES

Mutual Fund is occupied with trading of protections in huge volumes. Handling these

protections as far as actual conveyance and possible supervision is a specialized activity.

The custodian is designated by the Board of Trustees for supervision of protections or

partaking in any freedom framework through endorsed store organizations in the interest

of the Mutual Fund and it should satisfy its liabilities as per its concurrence with the

Mutual Fund. The custodian ought to be a substance autonomous of the supporters and

is expected to be enrolled with SEBI. With the presentation of the idea of

dematerialization of shares the dematerialized shares are kept with the Depository

member while the custodian holds the actual protections. Along these lines, conveyances

of an fund’s securities are given or received by a custodian or a depositories member, at

the directions of the AMC, albeit under the overall direction and obligations of the

Trustees.

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 COMPARISION BETWEEN FD, BONDS, AND MUTUAL FUND

FEATURES

MUTUAL FUND COMPANIES IN INDIA

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The idea of mutual funds in India traces all the way back to the year 1963. The period

between 1963and 1987 denoted the existence of only one mutual fund organization in

India with Rs. 67bn funds under the executives (AUM), before the conclusion of its

restraining infrastructure age, the Unit Trust of India (UTI). By the end of the 80s

decade, scarcely any other mutual fund organizations in India took their position in

mutual store market. The new sections of mutual fund organizations in India were SBI

Mutual Fund, Canbank Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank

Mutual Fund, Bank of India Mutual Fund.

The succeeding ten years showed another skyline in Indian mutual fund industry. By the

end of 1993, the all AUM of the industry was Rs. 470.04 bn. The private area finances

began entering the fund families. Around the same time the primary Mutual Fund

Regulations came intoexistance with re-enlisting all mutual funds aside from UTI. The

guidelines were further given a reexamined shape in 1996. Kothari Pioneer was the first

private area mutual fund organization in Quite a while which has now converged with

Franklin Templeton. Soon after decade with private area players’ infiltration, the

absolute resources ascended to Rs. 1218.05 bn.

Today there are 33 shared fund companies in India.

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MAJOR MUTUAL FUND COMPANIES

• ABN AMRO Mutual Fund

• Standard Chartered Mutual Fund
• Reliance Mutual Fund
• Franklin Templeton India Mutual Fund
• Birla Sun Life Mutual Fund
• Morgan Stanley Mutual Fund India
• Bank of Baroda Mutual Fund
• Escorts Mutual Fund
• SBI Mutual Fund
• Alliance Capital Mutual Fund
• HSBC Mutual Fund
• Benchmark Mutual Fund
• ING Vysya Mutual Fund
• Canbank Mutual Fund
• Prudential ICICI Mutual Fund
• Chola Mutual Fund
• State Bank of India Mutual Fund
• Unit Trust of India Mutual Fund
• Tata Mutual Fund
• LIC Mutual Fund

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FUTURE PROSPECT OF MUTUAL FUNDS IN INDIA

Monetary specialists accept that the eventual fate of Mutual Funds in India will be

extremely brilliant. It has been assessed that by March-end of 2020, the mutual fund

industry of India will arrive at Rs40, 90,000 crore, taking into account the total funds

of the Indian business banks. In the coming 10 years the yearly composite

development rate is supposed to increase 13.4%.

❖ 100 percent development over the most recent 6 years.

❖ Numbers of unfamiliar AMC’s are in the line to enter the Indian business sectors

like Fidelity Investments, US based, with over US$1trillion resources under

administration around the world.

❖ Our saving rate is more than 23%, most elevated on the planet. Just channelizing

these investment funds in mutual funds area is required.

❖ We have around 29 mutual funds which is significantly less than US having more

than800. There is a major degree for development.

❖ 'B' and 'C' class urban areas are developing quickly. Today a large portion of the

mutual funds are concentrating on the 'A' class urban communities. Before long

they will track down scope in the developing urban areas.

❖ Mutual fund can infiltrate rural like the Indian protection industry with basic and

limited items.

❖ SEBI permitting the MFs to send off product mutual funds.

❖ Accentuation on better corporate administration.

❖ Attempting to control the late exchanging rehearses.

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 ❖ Presentation of Financial Planners who can give need based guidance.

Taking a gander at the past turns of events and joining it with the latest things it can be

concluded that the eventual fate of Mutual Funds in India brings parcel of positive things

to the table to its investors.

PERFORMANCE EVALUATION OF MUTUAL FUND

Performance evaluation estimates the ability of a resource supervisor and its head idea

is to look at the profit with an option proper portfolio to that which was obtained in a

specific case. The rise of modern-day portfolio hypothesis (MPT) by

Markowitz (1952), who evaluates how objective investors go with choices in light of

anticipated return also, risk, has brought much improvement to,

Portfolio execution estimation. It moves performance measurement from unrefined

measures toward more exact, risk-changed measures. Up to now, many scientists have

proposed different strategies for assessing portfolio execution in order to observe a

model which could give an exact also, solid measure.

Although these specialists utilize various strategies to assess portfolio performance, they

all intend to give a fitting strategy by which to recognize prevalent managers from

others. Nonetheless, it is challenging for a client to choose which model is the most ideal

for the performance evaluation is a given case. Consequently, while numerous analysts

have proposed different strategies for performance evaluation, a few analysts too enquire

which model gives the best evaluation method.

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The two primary sources are the Association of Shared Fund in Indian (AMFI) and The

Moneycontrol.com. AMFI supplies information on mutual funds, for example, net

resource values (NAVs). The SEBI (Securities Exchange Board of India) gives other

applicable information, for example, securities exchange returns, stock characteristics

and other financial information.

NET ASSET VALUE (NAV)

A mutual fund's Net Asset Value (NAV) is the price at which the fund's units are

bought and sold. It is the fund's market value once its liabilities have been deducted.

On a daily basis, the value of all units in a mutual fund portfolio is computed, and

all expenses are deducted. The NAV is calculated by dividing the result by the total

number of units. The term NAV is also known as Net Book Value or book value.

The NAV of a fund is the market value of its units. As a result, it aids an investor in

keeping track of the mutual fund's performance. The percentage growth in the

mutual fund NAV can be used to calculate the real increase in the value of an

investment. As a result, NAV provides precise information about the mutual fund's

performance.

CALCULATION OF NAV
Securities and cash are the two most common asset types in mutual

funds. Bond and stocks are both considered securities in this context. As

a result, a fund's total asset value will include the market value of its

stocks, cash, and bond.

Total assets also include dividends and interest earned, as well as liquid assets.

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The formula for calculating NAV:

NAV of a mutual funds = (Assets of the fund – Liabilities of the fund)

No. of outstanding units of the fund

SBI MUTUAL FUND:-

SBI Mutual Fund Private Ltd is a partnership between "The State Bank

of India" and Societe Generale Asset Management (France). The fund

manages about Rs 42,100 crore in assets and has a broad collection of

investors who are actively investing in 38 active schemes. SBI Mutual

Fund understands that each investor has distinct financial goals and

needs various products. As a result, we provide a Diverse selection of

programmes to meet the needs of all types of investors. Each planis

managed by developing a unique strategy that is tailored to the investor's

profile and includes a range of risks and rewards.

EQUITY AND FUND SCHEMES

The primary goal of the equity asset class is to create capital growth /

appreciation over the medium and long term by investing in equities and

equity related instrument companies. There are a variety of schemes

available to meet the needs of all types of investors. Each Scheme has a

unique strategy that reflects the investor's profile and comes with its own

set of risks and benefits.

❖ Equity schemes
❖ Debt/income schemes
❖ Liquid schemes

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 ❖ Hybrid schemes
❖ Fixed maturity plans
❖ Exchange Traded schemes

This product is suitable to the investors who are seeking

❖ Long term capital appreciation.

❖ Investment in diversified portfolio of predominantly in equity and equity

securities of small and midcap companies.

COMPARING RETURNS OF SBI MUTUAL FUND FOR 5 YEARS

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As per the above chart you can see SBI mutual fund is open ended. Its average asset size

is 753.50 crores. SBI introduced small mid cap growth fund in 2009. Since then, it has

given good returns.

PERFORMANCE OF THE SBI MUTUAL FUND

ASSET ALLOCATION

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SBI MUTUAL FUND NAV

The mutual fund NAV denotes a price at which units of a mutual fund can be bought or

sold. The market value of funds holdings, less expenses is the net asset value. Per unit

NAV is calculated by dividing the net asset value of the mutual fund schemes by the no

of units outstanding on the valuation date.

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 CHAPTER-3

RESEARCH

METHODOLOGY

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DATA COLLECTION

The data required for the study may be collected either from primary sources or from

secondary sources. A major portion of the data in this study has been collected through

secondary sources of data.

SECONDARY DATA SURCES INCLUDE

❖ Published material and annual reports of mutual fund companies.

❖ Other published material of mutual funds.

❖ Research based online portals ❖ Unpublished sources also.

SAMPLE PROFILE

The sample required for the study has been selected through random sampling method

from the available list of mutual fund schemes in the market Broadly the sample of 12

mutual fund schemes includes equity funds, debt funds and balanced funds.

TOOLS AND METHODS

The performance of the funds was analyzed using following criteria:

❖ Sharpe Ratio

❖ Treynor Ratio

❖ Jensen’s Alpha

❖ M2 measure

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COMPUTATION OF RETURNS

At the first step periodical returns (monthly) were computed for the funds and market

index for one year. Since data was made available monthly the returns represented

monthly returns.

Assuming that no dividend was distributed by the funds, the returns calculated on the

continues compounding basis using the following equation.

rt = In (NAVt)

NAV t-1

LIMITATIONS OF THE STUDY

Mutual fund schemes are considered for the period. Hence, the findings of this study

may not be generalized upon the other mutual fund schemes and for the same schemes

for different periods.

The performance of a scheme can be evaluated on various parameters, in this average

return of the schemes and Sharpe’s ratio has been calculated to compare the different

schemes.

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 CHAPTER-4

INTERPRETATION AND
DATA ANALYSIS

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NET ASSET VALUE
The portfolio return computed using NAV ignores changes in the market price and
instead analyses changes in the net asset value of mutual fund units over time.
The return on a portfolio (Rn) is determined using the following formula:

Where,
Rp stands for portfolio return
NAVt = Net asset value at time t
NAVt-1 = Net asset value for the time interval t-l
Dt is the dividend in the form of a bonus that was distributed during the time period t.
Ct denotes a cash dividend paid during the time period t.

Since their inception, year-by-year returns have been computed for all mutual fund
schemes.
The start of the research period, which will begin in April 2010. Rp was the portfolio
return on a monthly basis, computed in the way outlined above. The geometric mean of
monthly NAV-based returns was used to calculate the holding period return. The
geometric mean was calculated using the following formula.

The same procedure is adopted to calculate the benchmark portfolio return.

This is to look into the performance of a few mutual fund schemes using analysis
methods for

Return Analysis, Risk Analysis, and a specific performance model.

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SHARPE’S MODEL

The Sharpe ratio, which is the ratio of returns generated by the fund over the

risk free rate of return and the total risk associated with it, is used to evaluate

a fund's performance in this model. Investors are more concerned about the

fund's overall risk, according to Sharpe. As a result, the model assesses

funds based on return per unit of total risk. It can be written symbolically as:

Sp= Sharpe’s index

Rp= portfolio average return

Rf= risk free rate of return

Op= Standard deviation of the return

The benchmark is the ratio of market portfolio returns over the risk free rate

of return multiplied by the standard deviation of the market portfolio, which

may be

computed as follows:

Sm= Sharpe index of benchmark portfolio

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Rm= Market average return

Rf= Risk free rate of return

Om= Standard deviation of the market

A high and positive ratio indicates a fund's superior risk adjusted performance,
whilst a low and negative ratio indicates poor performance.
For this study, 11 Mutual Funds were chosen. The year-by year returns
on sample schemes and the market return on the BSE SENSEX are
shown in table 1.1 over a four-year period (April 2017 to March 2022).
The average return, standard deviation, and Sharpe's Index for the
selected sample schemes are shown in table 1.2. The standard deviation
(risk) of the market is 0.210. As a consequence, all of the chosen mutual
fund schemes have a lower standard deviation than the market index.
This indicates that these plans are less hazardous than a market portfolio.

SBI Liquid Fund, on the other hand, has the lowest return deviation. The
Sharpe Index value for all of the selected mutual fund schemes is positive,
indicating that the fund's risk adjusted performance is superior. SBI
Mutual Fund's Sharpe's Index is greater than the others, indicating that it
has outperformed other funds. Thus, it appears that the funds were able
to forecast future security prices well enough to recover their research,
management, and commission expenses, i.e. there are a plethora of funds
where the managers have been able to add value to the portfolio over the
returns of any random selection of securities, as evidenced by the
predominance of positive.

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YEARLY RETURN OF SELECTED SCHEMES: -

Scheme Name |2017-18 |2018-19 |2019-20 |2021-22

|

45
RETURN, STANDARD DEVIATION AND SHARPE’S INDEX OF
SAMPLE SCHEMES

46
47
CHAPTER-5

FINDINGS &
SUGGESTIONS

48
 FINDINGS: -

Examining the 3-year returns of SBI Mutual Funds reveals a notable achievement. The fund has delivered an
impressive return, significantly exceeding the market average. This performance demonstrates the fund's
ability to identify and capitalize on lucrative investment opportunities, fostering substantial growth for its
investors. SBI Mutual Funds offer a diversified portfolio encompassing a range of asset classes, catering to
various risk tolerances and investment goals. This diversification helps mitigate risk while ensuring exposure
to potential growth opportunities across various market segments. SBI Mutual Funds boast a long history of
consistent performance, solidifying their reputation as a reliable and trustworthy investment option. Their
commitment to prudent risk management and strategic asset allocation inspires confidence in their ability to
navigate market fluctuations and deliver long-term value to their investors. SBI Mutual Funds present an
attractive proposition for investors seeking to leverage the potential of the mutual fund industry. Their
impressive performance, diversified portfolio, and long-term positive outlook make them a suitable choice for
individuals aiming to maximize their investment returns.
❖ SBI Mutual Funds have delivered a 42% return over the past three years, exceeding the market average
and solidifying their position as a top performer in the industry.
❖ SBI Mutual Funds offer a diversified portfolio spread across different asset classes, such as equities,
bonds, and real estate, mitigating risk and providing exposure to various growth opportunities.
❖ SBI Mutual Funds have a long and established history of consistent performance, demonstrating their
ability to navigate market fluctuations and deliver long-term value to their investors.
❖ SBI Mutual Funds offer a range of schemes catering to different risk tolerances and investment goals.
Investors can choose from low-risk options focused on income generation to high-risk options aiming
for capital appreciation.

SUGGESTIONS: -
❖ Invest in SBI Mutual Funds if you are seeking:
➢ Strong returns: SBI Mutual Funds have consistently outperformed the market, offering a 42%
return over the past three years. This positions them as a top choice for investors seeking significant
growth potential.
➢ A diversified portfolio: SBI Mutual Funds offer a well-diversified portfolio across various asset
classes, mitigating risk and providing exposure to multiple growth opportunities.
➢ Long-term investment: With a strong historical track record and a commitment to sound investment
strategies, SBI Mutual Funds are a reliable partner for long-term wealth creation.

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 ➢ Flexibility: Investors can choose from a range of SBI Mutual Fund schemes catering to different
risk tolerances and investment goals. This flexibility ensures a personalized investment experience
tailored to individual needs.
➢ Cost-effectiveness: SBI Mutual Funds boast competitive expense ratios, allowing investors to
retain a larger portion of their returns and maximize their wealth creation.
➢ Professional management: SBI Mutual Funds are managed by a team of experienced professionals
who employ rigorous research and strategies to optimize returns for investors.

❖ 2. Consider your risk tolerance and investment goals.

Before investing, assess your risk tolerance and investment goals. SBI Mutual Funds offer various
schemes with different risk profiles. Identify the scheme that aligns with your risk appetite and aligns
with your financial objectives.

❖ Start with a Systematic Investment Plan (SIP).

SIPs allow you to invest a fixed amount regularly, benefiting from rupee-cost averaging and
disciplined investing. This approach is particularly suitable for long-term wealth creation.

❖ Diversify your portfolio.

While SBI Mutual Funds offer a compelling option, consider diversifying your portfolio across
different asset classes and investment products to further mitigate risk and optimize your returns.

❖ Seek professional advice.

Consult with a qualified financial advisor for personalized investment recommendations tailored to
your specific financial situation, risk tolerance, and investment goals.

❖ Monitor your investments regularly

Regularly monitor the performance of your investments and adjust your portfolio as needed to reflect
your changing financial circumstances and market conditions.

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REFERENCES

❖ www.sbimf.com

❖ www.SBImf.com

❖ www.mutualfundsindia.com

❖ www.researchgate.com

❖ www.amfiindia.com

❖ www.moneycontrol.com

❖ www.valueresearch.com

❖ www.bseindia.com

❖ www.nseindi.com

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