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EXECUTIVE SUMMARY

INTRODUCTION
As you probably know, mutual funds have become popular over the last few years. What was once just another
obscure financial instrument is now a part of our lives and here to stay. According to sources, more than 80
million people, or one-half of the households in America, invest in mutual funds. That means that, in the United
State alone, trillions (yes, with a T) of dollars are invested in mutual funds.
Its common knowledge that investing in mutual funds in (or at least should be) better than simply letting your
cash waste away in a saving account, but for most people, that is where the understanding of funds ends.
Originally, mutual funds were meant to allow the common person to get a piece of the market considering that
the common person would be less knowledgeable about financial markets and would have smaller investments
to transact with. Instead of spending all your free time buried in the financial pages of the Economic Times, all
you have to do is buy a mutual fund and youd be set on your way to financial freedom. As you might have
guessed, it is not that easy. Not all mutual funds are the same and investing in mutual funds is not as easy as
throwing your money at the first salesperson who attracts your attention.
WHAT IS A MUTUAL FUND?
A Mutual Fund is a trust that pools the saving of a number of investors who share a common financial goal. It is
essentially a diversified portfolio of financial instruments -these could be equities, debentures bonds, or money
market instruments. The corpus of the fund is then deployed in investment alternatives that help to meet
predefined investment objectives. The income earned through thee investments and the capital appreciations
realized are shared by its unit holders in proportion to the number of units owned by them. Thus, a Mutual Fund
is a suitable investment for the common person as its offers and opportunity to invest in a diversified,
professionally managed basket of securities at a relatively low cost.


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You could make money from a mutual fund in three ways;
1) Income is earned from dividends declared by mutual fund schemes from time to time.
2) If the fund sells securities that have increased in price, the fund has a capital gain. This is reflected in
the price of each unit. When investors sell these units at prices higher than their purchase price, they
stand to make a gain.
3) It fund holdings increase in price but are not sold by the fund manager, the funds unit price increases.
You can then sell your mutual fund units for a profit. This is tantamount to a valuation gain.

INTRODUCTION TO BANKING

A BANKER or BANK is a financial institution whose primary activity is to act as a payment agent for
customers and to borrow and lend money. It is an institution for receiving, keeping, and lending money.
The organized banking system in India is broadly divided into three categories, i.e. the central bank
known as the Reserve bank of India, the commercial banks and the Co-operative banks. The reserve bank of
India is the supreme monetary and banking authority in the country and has the responsibility to control the
banking system in country. It is known as the RESERVE BANK as it keeps the reserve of all commercial
banks.
AMC
Savings
Units
Trust Investment
s
Returns Unit Holders
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Banking Regulation Act of India, 1949 defines banking as Accepting, for the purpose of lending or
investment of deposits of money from the public, repayable on demand or otherwise and withdrawal by cherubs,
draft, and order.
Most of the activities a bank performs are derived from the above definition. In addition, Banks are allowed to
perform certain activities, which are ancillary to this business of accepting deposits and lending. A banks
relationship with the public therefore revives around accepting deposits and lending money. Another activity,
which is assuming increasing importance, is transfer of money both domestic and foreign from one place to
another. This activity is generally known as remittance business in banking parlance. The so-called fore
(foreign exchange) business is largely a part of remittance. It involves the buying and selling of foreign
currencies.





ORIGIN OF THE WORD
The name bank derives from the Italian word banco "desk/bench, used during the Renaissance by Florentines
bankers, who used to make their transactions above a desk covered by a green tablecloth. However, there are
traces of banking activity even in ancient times.
In fact, the word traces its origins back to the Ancient Roman Empire, where moneylenders would set up their
stalls in the middle of enclosed courtyards called macella on a long bench called a bancu, from which the words
banc and bank are derived. As a moneychanger, the merchant at the bancu did not so much invest money as
merely convert the foreign currency into the only legal tender in Romethat of the Imperial Mint.

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EARLY HISTORY
Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of
India, which started in 1786, and the Bank of Hindustan, both of which are now defunct. The oldest bank in
existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which
almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two
being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the
British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their
successors. The three banks merged in 1925 to form the Imperial Bank of India, which, upon India's
independence, became the State Bank of India.
Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a consequence of the
economic crisis of 1848-49. The Allahabad Bank, established in 1865 and still functioning today, is the oldest
Joint Stock bank in India. When the American Civil War stopped the supply of cotton to Lancashire from the
Confederate States, promoters opened banks to finance trading in Indian cotton. With large exposure to
speculative ventures, most of the banks opened in India during that period failed. The depositors lost money and
lost interest in keeping deposits with banks. Subsequently, banking in India remained the

Exclusive domain of Europeans for next several decades until the beginning of the 20th century.
Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire d'Escompte de Paris
opened a branch in Calcutta in 1860, and another in Bombay in 1862; branches in Madras and Pondicherry, then
a French colony, followed. Calcutta was the most active trading port in India, mainly due to the trade of the
British Empire, and so became a banking center.
Around the turn of the 20th Century, the Indian economy was passing through a relative period of stability.
Around five decades had elapsed since the Indian Mutiny, and the social, industrial, and other infrastructure had
improved. Indians had established small banks, most of which served particular ethnic and religious
communities.
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The presidency banks dominated banking in India but there were also some exchange banks and a number of
Indian joint stock banks. All these banks operated in different segments of the economy. The exchange banks,
mostly owned by Europeans, concentrated on financing foreign trade. Indian joint stock banks were generally
undercapitalized and lacked the experience and maturity to compete with the presidency and exchange banks.
This segmentation let Lord Curzon to observe, "In respect of banking it seems we are behind the times. We are
like some old fashioned sailing ship, divided by solid wooden bulkheads into separate and cumbersome
compartments."
By the 1900s, the market expanded with the establishment of banks such as Punjab National Bank, in 1895 in
Lahore and Bank of India, in 1906, in Mumbai - both of which were founded under private ownership. Punjab
National Bank is the first Swedish Bank founded by the leaders like Lela Lappet Ray, Sadder Dial Singh
Majithia. The Swedish movement in particular inspired local businesspersons and political figures to found
banks of and for the Indian community. A number of banks established then have survived to the present such
as Bank of India, Corporation Bank, Indian Bank, and Bank of Baroda, Canada Bank, and Central Bank of
India.


The fervor of Swedish movement lead to establishing of many private banks in Dashing Kannada and Dupe
district which were unified earlier and known by the name South Canada (South Kanata) district.
Four nationalized banks started in this district and a leading private sector bank. Hence, undivided Dashing
Kannada district is known as "Cradle of Indian Banking.
Commercial banks have been in existence for many decades. After 1969, commercial banks are broadly
classified into nationalized or public sector and private sector banks. The state bank of India and associate banks
along with another 20 banks are the public sector banks. The private sector banks include a number of Indian
scheduled banks, which have not been nationalized, and branches of foreign banks operating in India.
The Regional Rural banks (RRBs) came into existence since the Middle of 1970s with the specific
objective of providing credit and deposit facilities particularly to the small and marginal farmers, agricultural
laborers and artisans and the small entrepreneurs.
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Primary Co-operative credit societies or banks were originally set up in villages to promote thrift and
saving of the farmers and to meet their credit needs for cultivation. The central or district co-operative banks
above them state co-operative banks were established. The funds of RBI meant for agricultural sector actually
pass through the State co-operative banks and central co-operative banks. These have now spread to the urban
areas.
Under the RBI Act 1934, banks were classified as scheduled banks and non-scheduled banks. The
scheduled banks are those, which are entered in the second schedule of RBI Act, 1934.they are banks, which
have paid up capital and reserves of an aggregate value of not less than five laths and which satisfy RBI that
their affairs are carried out in the interests of the depositors. All commercial banks Indian and foreign,
regional rural banks and state cooperative banks are scheduled banks. Non-scheduled banks are those, which
have not been including in the second schedule of RBI Act1934.




TRADITIONAL BANKING ACTIVITIES
Banks act as payment agents by conducting checking or current accounts for customers, paying cherubs drawn
by customers on the bank, and collecting cherubs deposited to customers' current accounts. Banks also enable
customer payments via other payment methods such as telegraphic transfer, EFTPOS, and ATM.
Banks borrow money by accepting funds deposited on current account, accepting term deposits and by issuing
debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current
account, by making installment loans, and by investing in marketable debt securities and other forms of money
lending.
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Banks provide almost all payment services, and a bank account is considered indispensable by most businesses,
individuals, and governments. Non-banks that provide payment services such as remittance companies are not
normally considered an adequate substitute for having a bank account.
Banks borrow most funds from households and non-financial businesses, and lend most funds to households and
non-financial businesses, but non-bank lenders provide a significant and in many cases adequate substitute for
bank loans, and money market funds, cash management trusts and other non-bank financial institutions in many
cases provide an adequate substitute to banks for lending savings to.





WIDER COMMERCIAL ROLE
However, the commercial role of banks is wider than banking, and includes:
issue of banknotes (promissory notes issued by a banker and payable to bearer on demand)
processing of payments by way of telegraphic transfer, EFTPOS, internet banking or other means
issuing bank drafts and bank cheques
accepting money on term deposit

lending money by way of overdraft, instalment loan or otherwise
providing documentary and standby letters of credit (trade finance), guarantees, performance bonds,
securities underwriting commitments and other forms of off balance sheet exposures
safekeeping of documents and other items in safe deposit boxes
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currency exchange
sale, distribution or brokerage, with or without advice, of insurance, unit trusts and similar financial
products as a 'financial supermarket'

ECONOMIC FUNCTIONS
The economic functions of banks include:
1. Issue of money, in the form of banknotes and current accounts subject to cheque or payment at the
customer's order. These claims on banks can act as money because they are negotiable and/or repayable
on demand, and hence valued at par and effectively transferable by mere delivery in the case of
banknotes, or by drawing a cheque, delivering it to the payee to bank or cash.
2. Netting and settlement of payments -- banks act both as collection agent and paying agents for
customers, and participate in inter-bank clearing and settlement systems to collect, present, be presented
with, and pay payment instruments. This enables banks to economise on reserves held for settlement of
payments, since inward and outward payments offset each other. It also enables payment flows between
geographical areas to offset, reducing the cost of settling payments between geographical areas.
3. Credit intermediation -- banks borrow and lend back-to-back on their own account as middle me.
4. Credit quality improvement -- banks lend money to ordinary commercial and personal borrowers
(ordinary credit quality), but are high quality borrowers. The improvement comes from diversification
of the bank's assets and the banks own capital which provides a buffer to absorb losses without
defaulting on its own obligations.


However, since banknotes and deposits are generally unsecured, if the bank gets into difficulty and
pledges assets as security to try to get the funding it needs to continue to operate, this puts the note
holders and depositors in an economically subordinated position.
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5. Maturity transformation -- banks borrow more on demand debt and short-term debt, but provide more
long-term loans. In other words; banks borrow short and lend long. Bank can do this because they can
aggregate issues (e.g. accepting deposits and issuing banknotes) and redemptions (e.g. withdrawals and
redemptions of banknotes), maintain reserves of cash, invest in marketable securities that can be readily
converted to cash if needed, and raise replacement funding as needed from various sources (e.g.
wholesale cash markets and securities markets) because they have a high and more well known credit
quality than most other borrowers.
BANKS ARE CLASSIFIED INTO SEVERAL TYPES BASED ON THE
FUNCTIONS THEY PERFORM.
1. Commercial Bank.
2. Investment or industrial Banks.
3. Exchange Banks.
4. Co-operative Banks.
5. Land Development Banks.
6. Savings Banks.
7. Central Banks.
1) COMMERCIAL BANKS
Commercial banks perform all the business transaction of a typical bank. Commercial Banks accept
three types of deposits, Like Savings Bank Deposit, Fixed Deposit, and Current Deposit. They accept these
deposit, which are payable on demand or in short notice. As such, they lend or invest only for short duration.
They funds for short-term needs of trade of commerce.
2) INVESTMENT OR INDUSTRIAL BANK
Investment Banks are those banks, which provide funds on long term for industries. These Banks have
specialized in providing long-term loans to industries with a view to buy plant of machinery. The
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investment Banks obtain funds through share capital, Debentures, and long term deposits from the public. They
float bonds for the sake of mobilizing funds to provide funds for big industries corporations.
These banks also under write or issue new shares of debentures of industrial concerns.

3) EXCHANGE BANKS
Exchange Banks are known as foreign Banks or foreign exchange Banks. The foreign exchange banks
provide exchange for imports trade. Their main function is to make international payment through purchased
sake of exchange bills.

4) CO-OPERATIVE BANKS
Co-operative Banks are promoted to meet the banking requirements of consumers. They are established
not only in the urban areas but also in the rural areas. In the rural areas
These banks supply finances to agriculture, while in the urban areas they provide finance to consumer
goods.
5) LAND MORTGAGE BANKS
Whenever agriculturist require investment loans, they have to approach land development Banks.
Where loans are given on long-term basis. They provide loans on the security of the land.
6) SAVINGS BANKS
Savings Banks are specialized financial institutions established to mobilize savings from the people.
The primary object of the commercial Banks is to promote thrift among the low and middle-income groups. The
Banks also offer interest on these deposits.
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7) CENTRAL BANKS
Central Bank in an apex Bank in the country, which keeps the entire banking system unified, controlled,
and regulated. In fact, the central bank is the Bank, which formulates the monetary policy. It regulates the notice
issue. In India, the Reserve Bank of India is the central Bank of India.
BANKS IN THE ECONOMY SIZE OF GLOBAL BANKING INDUSTRY
Worldwide assets of the largest 1,000 banks grew 16.3% in 2006/2007 to reach a record $74.2 trillion. This
follows a 5.4% increase in the previous year. EU banks held the largest share, 53%, up from 43% a decade
earlier. The growth in Europes share was mostly at the expense of Japanese banks whose share more than
halved during this period from 21% to 10%. The share of US banks remained relatively stable at around 14%.
Most of the remainder was from other Asian and European countries.
The US had by far the most banks (7,540 at end-2005) and branches (75,000) in the world. The large number of
banks in the US is an indicator of its geography and regulatory structure, resulting in a large number of small to
medium sized institutions in its banking system. Japan

Had 129 banks and 12,000 branches. In 2004, Germany, France, and Italy had more than 30,000 branches
eachmore than double the 15,000 branches in the UK.

CHALLENGES WITHIN THE BANKING INDUSTRY

The banking industry is a highly regulated industry with detailed and focused regulators. All banks with FDIC-
insured deposits have the FDIC as a regulator; however, for examinations, the Federal Reserve is the primary
federal regulator for Fed-member state banks; the Office of the Comptroller of the Currency (OCC) is the
primary federal regulator for national banks; and the Office of Thrift Supervision, or OTS, is the primary federal
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regulator for thrifts. The state agencies as well as the FDIC examine state non-member banks. National banks
have one primary regulatorthe OCC.
Each regulatory agency has their own set of rules and regulations to which banks and thrifts must adhere.
The Federal Financial Institutions Examination Council (FFIEC) was established in 1979 as a formal
interagency body empowered to prescribe uniform principles, standards, and report forms for the federal
examination of financial institutions. Although the FFIEC has resulted in a greater degree of regulatory
consistency between the agencies, the rules and regulations are constantly changing.
In addition to changing regulations, changes in the industry have led to consolidations within the Federal
Reserve, FDIC, OTS and OCC. Offices have been closed, supervisory regions have been merged, staff levels
have been reduced and budgets have been cut. The remaining regulators face an increased burden with increased
workload and more banks per regulator. While banks struggle to keep up with the changes in the regulatory
environment, regulators struggle to manage their workload and effectively regulate their banks. The impact of
these changes is that banks are receiving less hands-on assessment by the regulators, less time spent with each
institution, and the potential for more problems slipping through the cracks, potentially resulting in an overall
increase in bank failures across the United States.


The changing economic environment has a significant impact on banks and thrifts as they struggle to effectively
manage their interest rate spread in the face of low rates on loans, rate competition for deposits and the general
market changes, industry trends and economic fluctuations. It has been a challenge for banks to effectively set
their growth strategies with the recent economic market. A rising interest rate environment may seem to help
financial institutions, but the effect of the changes on consumers and businesses is not predictable and the
challenge remains for banks to grow and effectively manage the spread to generate a return to their
shareholders.
The management of the banks asset portfolios also remains a challenge in todays economic environment.
Loans are a banks primary asset category and when loan quality becomes suspect, the foundation of a bank is
shaken to the core. While always an issue for banks, declining asset quality has become a big problem for
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financial institutions. There are several reasons for this, one of which is the lax attitude some banks have
adopted because of the years of good times. The potential for this is exacerbated by the reduction in the
regulatory oversight of banks and in some cases depth of management. Problems are more likely to go
undetected, resulting in a significant impact on the bank when they are recognized. In addition, banks, like any
business, struggle to cut costs and have consequently eliminated certain expenses, such as adequate employee
training programs.
Banks also face a host of other challenges such as aging ownership groups. Across the country, many banks
management teams and board of directors are aging. Banks also face ongoing pressure by shareholders, both
public and private, to achieve earnings and growth projections. Regulators place added pressure on banks to
manage the various categories of risk. Banking is also an extremely competitive industry. Competing in the
financial services industry has become tougher with the entrance of such players as insurance agencies, credit
unions, check cashing services, credit card companies, etc.
As a reaction, banks have developed their activities in financial instruments, through financial market operations
such as brokerage and trading and become big players in such activities.



STRUCTURE OF BANKING SYSTEM IN INDIA
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Co-operative
Banks
State Bank of India
&
its associates
Other Nationalised
Banks
Regional Rural
Banks
Public Sector
Banks
Private Sector
Banks
Indian
Banks
Foreign
Banks
Commercial
Banks
Scheduled
Banks
Co-operative
Banks
Commercial
Banks
Non-Scheduled
Banks
RBI











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ORGANISATION PROEILE


SBI MUTUAL FUND

SBI Mutual Fund (SBI MF) is one of the largest mutual funds in the country with an investor base of over 3.8
million. With over 20 years of rich experience in fund management, SBI MF brings forward its expertise in
consistently delivering value to its investors.

SBI MF draws its strength from Indias Largest Bank State Bank of India and Society General Asset
Management, France. 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
Indias largest bank patronized by over. 80% of the top corporate houses of the country.

SBI Mutual Fund is a joint venture between the State Bank of India and Society General Asset Management,
one of the worlds leading fund management companies that manages over USS 330 billion worldwide.
In eighteen years of operation, the fund has launched thirty-two schemes and successfully redeemed fifteen of
them. In the process it has rewarded its investors handsomely with consistently high returns.

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A total of over 3.8 million 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 Hinds. Today, the fund manages over Rs. 20000 crores
of assets and has a diverse profile of investor actively parking their investments across 40 active schemes.

The fund serves this vast family of investors by reaching out to them through network of over 100 points of
acceptance, 26 investor service centres, 33 investor service desks and 52 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.



PHASE OF MUTUAL FUND DEVELOPMENT


THE EVOLUTION

The formation of Unit Trust of India marked the evolution of the Indian mutual fund industry in the year 1963.
The primary objective at that time was to attract the small investors and it was made possible through the
collective efforts of the Government of India and the Reserve Bank of India. The history of mutual fund
industry in India can be better understood divided into following phases:

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PHASE 1. ESTABLISHMENT AND GROWTH OF UNIT TRUST OF INDIA - 1964-
87

Unit Trust of India enjoyed complete monopoly when it was established in the year 1963 by an act of
Parliament. UTI was set up by the Reserve Bank of India and it continued to operate under the regulatory
control of the RBI until the two were de-linked in 1978 and the entire control was transferred in the hands of
Industrial Development Bank of India (IDBI). UTI launched its first scheme in 1964, named as Unit Scheme
1964 (US-64), which attracted the largest number of investors in any single investment scheme over the years.

UTI launched more innovative schemes in 1970s and 80s to suit the needs of different investors. It launched
ULIP in 1971, 6 more schemes between 1981-84, Children's Gift Growth Fund and India Fund (India's first
offshore fund) in 1986, Master share (Indias first equity diversified scheme) in 1987 and Monthly Income
Schemes (offering assured returns) during 1990s. By the end of 1987, UTI's assets under management grew ten
times to Rs 6700 cores.


PHASE II. ENTRY OF PUBLIC SECTOR FUNDS - 1987-1993

The Indian mutual fund industry witnessed a number of public sector players entering the market in the year
1987. In November 1987, SBI Mutual Fund from the State Bank of India became the first non-UTI mutual fund
in India. SBI Mutual Fund was later followed by can bank Mutual Fund, LIC Mutual Fund, Indian Bank Mutual
Fund, Bank of India Mutual Fund, GIC Mutual Fund, and PNB Mutual Fund. By 1993, the assets under
management of the industry increased seven times to Rs. 47,004 cores. However, UTI remained to be the leader
with about 80% market share.
1992-93 Amount Mobilized
Assets Under
Management
Mobilization as % of gross
Domestic Savings
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UTI 11,057 38,247 5.2%
Public Sector 1,964 8,757 0.9%
Total 13,021 47,004 6.1%



PHASE III. EMERGENCE OF PRIVATE SECTOR FUNDS - 1993-96

The permission given to private sector funds including foreign fund management companies (most of them
entering through joint ventures with Indian promoters) to enter the metal fund industry in 1993, provided a wide
range of choice to investors and more competition in the industry. Private funds introduced innovative products,
investment techniques, and investor-servicing technology. By 1994-95, about 11 private sector funds had
launched their schemes.

PHASE IV. GROWTH AND SEBI REGULATION - 1996-2004

The mutual fund industry witnessed robust growth and stricter regulation from the SEBI after the year 1996.
The mobilization of funds and the number of players operating in the industry reached new heights as investors
started showing more interest in mutual funds.

Inventors' interests were safeguarded by SEBI and the Government offered tax benefits to the investors in order
to encourage them. SEBI (Mutual Funds) Regulations, 1996 was introduced by SEBI that set uniform standards
for all mutual funds in India. The Union Budget in 1999 exempted all dividend incomes in the hands of
investors from income tax. Various Investor Awareness Programmers were launched during this phase, both by
SEBI and AMFI, with an objective to educate investors and make them informed about the mutual fund
industry.
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In February 2003, the UTI Act was repealed and UTI was stripped of its Special legal status as a trust formed by
an Act of Parliament. The primary objective behind this was to bring all metal fund players on the same level.
UTI was re-organized into two parts: 1. The Specified Undertaking, 2. The UTI Mutual Fund

Presently Unit Trust of India operates under the name of UTI Mutual Fund and its past schemes (like US-64,
Assured Return Schemes) are being gradually wound up. However, UTI Mutual Fund is still the largest player
in the industry. In 1999, there was a significant growth in mobilization of funds from investors and assets under
management, which is supported by the following data:
GROSS FUND MOBILISATION (RS. CRORES)
FROM TO UTI
PUBLIC
SECTOR
PRIVATE
SECTOR
TOTAL
01-April-98 31-March-99 11,679 1,732 7,966 21,377
01-April-99 31-March-00 13,536 4,039 42,173 59,748
01-April-00 31-March-01 12,413 6,192 74,352 92,957
01-April-01 31-March-02 4,643 13,613 1,46,267 1,64,523
01-April-02 31-Jan-03 5,505 22,923 2,20,551 2,48,979
01-Feb.-03 31-March-03 * 7,259* 58,435 65,694
01-April-03 31-March-04 - 68,558 5,21,632 5,90,190
01-April-04 31-March-05 - 1,03,246 7,36,416 8,39,662
01-April-05 31-March-06 - 1,83,446 9,14,712 10,98,158

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ASSETS UNDER MANAGEMENT (RS. CRORES)
AS ON UTI PUBLIC SECTOR PRIVATE SECTOR TOTAL
31-March-99 53,320 8,292 6,860 68,472

PHASE V. GROWTH AND CONSOLIDATION - 2004 ONWARDS


The industry has also witnessed several mergers and acquisitions recently, examples of which are acquisition of
schemes of Alliance Mutual Fund by Birla Sun Life, Sun F&C Mutual Fund and PNB Mutual Fund by Principal
Mutual Fund. Simultaneously, more international metal fund players have entered India like Fidelity, Franklin
Templeton Mutual Fund etc. There were 29 funds as at the end of March 2006. This is a continuing phase of
growth of the industry through consolidation and entry of new international and private sector players.

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ORGANISATION OF A MUTUAL FUND


There are many entities involved and the diagram below illustrates the organizational set up of a mutual fund:

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Organization of a mutual Fund



I. SPONSOR
What a promoter is to a company, a sponsor is to a mutual fund. The sponsor initiates the idea to set up
a mutual fund. It could be a financial services company, a bank, or a financial institution. It could be Indian or
foreign. It could do it alone or through a joint venture. In order to run a mutual fund in India, the sponsor has to
obtain a license from SEBI. For this, it has to satisfy certain conditions. Such as on capital and profits, track
records (at least five year in financial services), default free dealings and a general reputation for fairness.

II. ASSET MANAGEMENT COMPANY (AMC):-

An AMC is the legal entity formed by the sponsor to run a mutual fund. It is a the AMC that employs
fund managers and analysts, and other personnel, It is AMC that handles all operational matters of a mutual
fund from launching schemes to managing them to inter acting with investors. Each scheme pays the AMC an
annual fund management fee, which is linked to the scheme size and results in a corresponding drop in return
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from mutual fund. If schemes corpus is up to Rs. 100 core, it pays 1.25% of its corpus a year and over Rs. 100
core, the fee is 1% of corpus.

III. TRUSTEES

INVEST WITH KNOWLEDGE
Trustees are like internal regulators in mutual fund, and their job is to protect the interests of unit
holders. Trustee is appointed by sponsors, and can be either individuals or corporate bodies. Trustees appoint
the AMC, which subsequently seeks their approval for the work it does and reports periodically to them on how
the business being run. They check if the Macs investments are within defined limits and whether the funds
assets are protected. Trustees can be held accountable for financial irregularities in the mutual fund.

IV. CUSTODIAN

A custodian handles the investment back office of a mutual fund and responsibilities including receipt
and delivery of securities. The collection of incomes, distribution of dividends and segregation of assets
between the schemes. The sponsor of mutual fund cannot act as a custodian to the fund. For example, Deutsche
Bank is custodian, but it cannot service Deutsche Mutual Fund. It is mutual fund arm.

V. TRANSFER AGENT

Transfer agents are also known as Registrars, handle all investors related services. This includes issuing and
redeeming units, sending fact sheets and annual reports. Some fund house handles such function in house.

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HOW MUTUAL FUND IS SET UP?


A MF is set up in the form of trust, which has sponsor, trustees, Assets Management Company (AMC), and
custodian. The trust-established sponsor of more than one sponsor who is like promoter of a company.

The thrust of the MF holds its property for the benefit of the unit holder.AMC approved by SEBI managers the
funds by making investments in various types of securities. Custodian who is registered with SEBI holds the
securities of the various schemes of the funds 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 regulation
by the MF.

SEBI regulation require that at least two third of the directors of trustee company or broad of trustee company or
board of trustees must be independent i.e. they should not be associated with sponsors. Also 50 % of the
directors of AMC must be independent. All MFs are required to be registered with SEBI before they launch any
scheme.



MUTUAL FUND

Fund now represents perhaps the most appropriate investment opportunity of most investors. As financial
market becomes more sophisticated and complex, investors need a financial intermediary who provides the
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required knowledge and expertise on successful investing. It is no wonder then that in the birthplace of MF Viz
U.S.A. The fund industry has already overtaken the Banking industry, more funds being under MF management
than deposited with bank.
The Indian MF industry has already started opening up many of the exciting investment opportunities to the
Indian investors. We have started witnessing the phenomenon of more savings now being entrusted to the funds
than to the banks. Despite the expected continuing growth in the industry. MF is a new financial intermediary in
India.Henceit is important that the investors, the MF agents/ distributors, the investment advisor and even the
fund employees acquire better knowledge of what MFare,what they can do for investors and what they cannot
and how they function differently room other intermediaries such as banks.


MARKETING AND SALES STRATERGY OF SBI MF

In a developing market like India where investors awareness is to take shape, SBI MF as a leading AMC in
Bihar has an important role to educate investors ( particular those who are located in rural and semi urban areas)
about the manifold advantages of investment. There fore a well-planned strategy to mobilize savings by
educating investor and crating confidence about safety and return needs to be design.
The long-term strategy of SBI MF should be to create and win the confidence of investor and keep it intact by
producing excellent services. Therefore, customer should be the focal point of any marketing strategy.
In a changing environment of financial services, SBI MFS role should be to maximize customers satisfaction
by optimizing internal and external efficiency in resource use competitive product development, cost efficient
distribution system, etc.this calls for a well thought out marketing plan and marketing stratergy.But it must be
remembered that marketing plan and marketing strategy. However, it must be remembered that marketing plan
for mutual fund services need to be based on marketing plan for mutual fund services need to be based on
marketing plan for mutual fund services need to be based on a correlation matrix of firm-product-customer
relationship because of very nature of products which are intangible and have the elements of inseparability and
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perish ability. This implies that customers choices difficult and risky while selecting the products. Keeping the
above correlation in view, the marketing plan for mutual fund should include broadly the marketing elements.


MUTUAL FUNDS 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.through the growth was slow, but it accelerated from the year 1987 when on UTI player centered the
industry.
In the past decade, Indian mutual fund industry had seen dramatic improvement, both qualities wise as well as
quantity wise. Before the monopoly of the market had seen an ending, it reached the height of phase; the assets
under the management (AMU) to RS470 billion in March1993 and until April 2004.it reached the height of
1,540 billion.
Putting the AMU 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 Indian banking industry. It is the prime
responsibility of all mutual fund companies, to market the product correctly abreast selling.
Increasing investors has also ensured that assets under management of mutual funds grew eight fold in five
years from March 1999 to December 2003.it could grow even further.
Total assets under management have more than tripled to RS1.6 trillion ($34.5 billion) in the last two years, split
evenly between stocks and between stocks and bonds. The study has revealed that by 2014, the size of size of
Indian mutual fund industry is estimated to go up one, 61,000 crore.



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MARKETING ELEMENTS FOR MUTUAL FUND

PRODUCT PLANNING
Product line to be offered quality, design range of services etc.

BRANDING
Selection of products name, brand policy like individual family or corporate brand.

PRICING POLICY

Price of units rates of incentives, rate of commission to agents /brokers.


DISTRIBUTION POLICY

Channel to use for selling the products direct to the customers or through intermediaries like agents/ brokers
etc.

PROMOTION

Promotion sales through advertisements, road shows etc.
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SERVICING
After sales services-, direct by the company to the investor or through intermediaries like registrars
of the issues etc. There is the important element of the marketing mix to form the marketing strategy to be
directed to achieve corporate goals.


TYPES OF SCHEMES OFFERED BY SBI MUTUAL FUND

Scheme offered by SBI Mutual Fund can be divided in to three types.

A. Equity fund:-

The investments of these schemes will predominantly be in the stock markets and endeavor will be to provide
investors the opportunity to benefit from the higher returns which stock markets can provide. However, they are
also exposed to the volatility and attendant risks of stock markets and hence should be chosen only by such
investors who have high risk taking capacities and are willing to think long term.

Equity Fund includes diversified Equity Funds, Sect oral Funds and Index Funds. Diversified Equity Funds
invest in various stocks across different sectors while sect oral funds which are specialized Equity Funds restrict
their investments only to shares of a particular sector and hence, are riskier than Diversified Equity Funds.

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Index Funds invest passively only in the stocks of a particular index and the performance of such funds move
with the movements of the index.

A) MAGNUM COMMA FUND
B) MAGNUM EQUITY FUND
C) MAGNUM GLOBAL FUND
D) MAGNUM INDEX FUND
E) MAGNUM MID CAP FUND
F) MAGNUM MULTI CAP FUND
G) MAGNUM MULTIPLIER PLUS 1993.
H) MAGNUM SECTOR FUNDS UMBRELLA


MSFI-FMCG Fund
MSFU-Emerging Businesses Fund
MSFU-IT Fund
MSFU-Pharmacy Fund
MSFU-Contra Fund
i) SBI Arbitrage Opportunities Fund
j) SBI Blue chip Fund
K) SBI INFRASTRUCTURE FUND-SERIES I
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L) SBI MAGNUM TAX GAIN SCHEME 1993.
M) SBI ONE INDIA FUND

B. DEBT FUND

Debt Fund invests only indebt instruments such s Corporate Bonds. Government Securities and Money Market
instruments either completely avoiding any investments in the stock markets as in Income Funds or Gilt Fund or
having a small exposure to equities as in Monthly Income Plans or Childrens Plan. Hence, they are safer than
equity funds. At the same time the expected returns from debt funds would be lower such investments are
advisable for the risk-averse investor and as a part of the investment portfolio for other investors.

a. Magnum Childrens Benefit Plan
b. Magnum Gilt Fund

Magnum Gilt Fund (Long Term)
Magnum Gilt Fund (Short Term)
c. Magnum Income Fund
d. Magnum Income Plus Fund

Magnum Income Plus Fund (Saving Plan)
SDFS 15 Months Fund
Magnum Income Plus Fund (Investment Plan)
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e. Magnum Insta Cash Fund
f. Magnum Insta Cash Fund-Liquid Floater Plan
g. Magnum Institutional Income Fund
h. Magnum Monthly Income Plan
i. Magnum Monthly Income Plan Floater
j. Magnum NRI Investment Fund
k. SBI CAPITAL PROTECTION ORIENTED FUND SERIES 1
l. SBI Debt Fund Series

SDFS 15 Months Fund
SDFS 90 Days Fund
SDFS 13 Months Fund
SDFS 18 Months Fund
SDFS 24 Months Fund
SDFS 60 Days Fund
SDFS 180 Days Fund
m. SBI Premier Liquid Fund
n. SBI Short Horizon Fund


SBI Short Horizon Fund-Liquid Plus Fund
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SBI SHORT Horizon Fund-Short Term Fund
C. BALANCED FUND

Magnum Balanced Fund invests in a mix of equity and debt investments. Hence they

Are less risky than equity funds, but at the same time provide commensurately lower
Returns. They provide a good investment opportunity to investors who do not wish to
Be completely exposed to equity markets, but is looking for higher returns than those
Provided by debt funds.


GROWTH IN ASSETS UNDER MANAGEMENT



Types of Mutual Fund schemes:-


Schemes according to Maturity Period

A mutual fund scheme can be classified into open-ended scheme depending on its maturity period.
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Open-ended Fund/Scheme-

An open-ended fund or scheme is one that is available for subscription and repurchase 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 invest in the scheme t 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 either 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 price, SBI
Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase
facility or generally on weekly basis.



SCHEMES ACCORDING TO INVESTMENT OBJECTIVE:-
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A scheme can also be classified as growth scheme, income scheme, or balanced scheme considering its
investment objective. Such scheme may be open-ended or close-ended schemes as descried carlier. Such
schemes may be classified mainly as follows:


Growth / equity Oriented Scheme:-

The aim of growth funds is to provide capital appreciation over the medium to long-term. Such schemes
normally invest a manor part of their corpus in equities. Such funds have comparatively high risks. These
schemes provide different options of 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 charge the options at a later date. Growth
schemes are good for investors having a long-term outlook seeking appreciation over a period.


INCOME / DEBT ORIENTED SCHEME-

The aim of income fund 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 fund 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
Naves of such funds are affected because of change in interest rates in the country. If the interest rates fall
Naves of such funds are likely to increase in the short run and vice versa. However, long term investor may not
bother about these fluctuations.
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BALANCED FUND-

The aim of balanced fund 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, Naves 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 are their aim is to provide easy liquidity preservation of capital and moderate
income. These scheme 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 fund for short periods.

These funds invest exclusively in government securities. Government securities have no default risk. Naves
these scheme also fluctuate due to change in interest rates and other economic factors as is the case with income
or debt oriented schemes.

INDEX FUNDS:-
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Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S & P NSE 50 index
(Nifty), etc. These schemes invest in the securities in the same weight age comprising of an index, Naves 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.

SECTOR SPECIFIC FUNDS/SCHEMES-

There are the funds/schemes, which invest in the securities of only those sectors or industries as specified in the
offer documents e.g. Pharmaceuticals Software. Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc.
The returns in these funds are dependent on the performance of the respective sectors/industries. While these
funds may give higher returns, they are more risky compared to diversified funds. Investor need to keep a watch
on the performance of those sectors/industries and must exit at an appropriate time. They may also seek advice
of an expert.


TAX SAVING SCHEMES-

These schemes offer tax rebates to the investors under specific provisions of the Income Tax Act, 1961 as the
Government offer tax incentives for investment in specified avenues e.g. Equity Linked Savings Schemes
(ELSS). Pension schemes launched by the mutual funds also offer tax benefits. These schemes are growth
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oriented and invest pre-dominantly inequities. Their growth opportunities and risks associated are like any
equity-oriented scheme.


FUND OF FUNDS (OFF) SCHEME-

A scheme that invests primarily in other schemes of the same mutual fund or other mutual funds is known as of
FOF scheme. A FOF scheme enables the investors to achieve greater diversification through one scheme. It
spreads risks across a greater universe.



FREQUENTLY USED TERMS:-

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
assets value of the scheme divided by the number of units outstanding on the valuation date.

NAV = (Market or Fair Value of the Funds investment +Current Assets+ Accrued income- Current liabilities-
Accrued expenses)/ Number of the units Outstanding.

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Offer Price:-

T is the price you pay when you invest in a scheme. It is also called Sale Price. It may include a sales load.
Repurchase Price:-

It is the price at which open-ended schemes repurchase their units and close ended schemes redeem their units
on maturity. Such prices are NAV related.

Entry Load/Exit Load:-

Load is the charge collected by mutual fund when it sells unit. It can be either front end load (charge is collected
when an investors buys the units) or back end load (the charge collected When the investors sells back the units)
such schemes are called No. load schemes. Entry load is charged when an investors purchase unit i.e. when an
investors enter in mutual fund and when an investor sell his unit then he has to pay exit load. According to the
SEBI, the sum of entry and exit load must not exceed 7%.
Expenses:-

Every year a fund charges some amount to your scheme NAV reducing your return by the amount, SEBI allow
Equity schemes to charge a maximum of 2.5% of corpus as expenses every year. Moreover, 2.25% of corpus is
charged on Debt Fund.


VARIOUS INVESTMENT OPTIONS WITH MUTUAL FUND:-
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Mutual Funds offer various investment options. Some of the important investment options include:

GROWTH OPTION

Dividend is not paid- out under a Growth Option and the investor realizes only the capital appreciation on the
investment (by an increase in NAV).

DIVIDEND PAYOUT OPTION

Dividends are paid-out to investors under the Dividend payout Option. However, the NAV of the mutual fund
scheme falls to the extent of the dividend payout.

DIVIDEND RE-INVESTMENT OPTION
Here the dividend accrued on mutual funds is automatically re-invested in purchasing additional units in open-
ended fund. In most cases mutual funds offer the investor an options for themselves, and corporate participate
for their employees.
INSURANCE OPTION

Certain Mutual Funds offer schemes that provide insurance cover to investors as an added benefit.


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RIGHTS THAT ARE AVAILABLE TO A MUTUAL FUND HOLDER:-

As per SEBI Regulations on Mutual Funds, an investor is entitled to:

a) Receive Unit certificates or accounts confirming your title within 6 weeks from the date your
request for a unit Certificate is received by the Mutual Fund.

b) Receive information about the investment policies, investment objectives, financial position and
general affairs of the scheme.


c) Receive dividend within 42 days of their declaration and receive the redemption or repurchase
proceeds within 10 days from the date of redemption or repurchase.

d) The trustees shall be bound to make such disclosures to the unit holders as are essential in order to
keep them informed about any information, which may have an adverse bearing on their
investments.

e) 75% of the unit holders with the prior approval of SEBI can terminate the AMC of the fund.

f) 75% of the unit holders can pass a resolution to wind-up the scheme.

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g) An investor can send complaints to SEBI, who will take up the matter with the concerned Mutual
Funds and follow up with them until they are resolved.

RISK ASSOCIATED WITH MUTUAL FUND:-

Risk is an inherent aspect of every form of investment for mutual fund investments. Risks would include
variability, or period-by-period fluctuations in total return. The value of the schemes investments may be
affected by factors affecting capital markets such as price and volume volatility in the stock markets, interest
rates, currency exchange rates, foreign investment, changes in government policy, political, economic or other
developments.




MARKET RISK-

At times the prices or yields of all the securities in a particular market rise or fall due to broad outside
influences, When this happens, the stock prices of both an outstanding highly profitable company and a
fledgling corporation may be affected. This change in price is due to market risk.

INFLATION RISK-
Sometimes referred to as loss of purchasing power, whenever the rate of inflation exceeds the earnings on
your investment, you run the risk that you will actually be able to buy less, not more.
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CREDIT RISK-
In short, how stable entity or I the company to which you lend your money when you invest? How certain are
you that it will be able to pay the interest you are promised, or prepay your principal when the investment
matures?

INTEREST RATE RISK-

Changing interest rates affect both-equities and bonds in many ways. Movements in the interest rates influence
Bond prices in the financial system. Generally, when increase. Interest rate movements in the Indian debt
markets can be volatile leading to the possibility of large price movements up or down in debt and money
market securities and thereby to possibly large movements in the NAV.

Investment Risk-
In the pectoral fund schemes, investments will be predominantly in equities of select companies in the particular
sectors. Accordingly, the NAV of the scheme are linked to the equity performance of such companies and may
be more volatile than a more diversified portfolio of equities.

LIQUIDITY RISK-

Thinly traded securities carry the danger of not being easily saleable at or near their real values. The fund
manager may therefore be unable to quickly sell an illiquid bond and this might affect the price of the fund
unfavorably. Liquidity risk is characteristic of the Indian fixed income market.

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Changes in the Government Policy-
Changes in Government policy especially in regard to the tax benefits may impact the business prospects of the
companies leading to an impact on the investments made by the fund.

Some common term related with Mutual Fund:-
Asset allocation:-
Asset allocation is investment portfolio technique that aims to balance risk and create diversification by dividing
assets among major categories such as bonds, stocks, real estate, and cash. Each asset class has different levels
of return and risk, so each will behave differently over time. At the same time that one asset in increasing in
value, another may be decreasing or not increasing as much. The underlying principle of asset allocation is that
the older a person gets, the less risk he or she should face.

After you retire you may have to depend on your savings as your only source of income. It follows that you
should invest more conservatively at this time since asset preservation is crucial. Determining the proper mi of
investments in your portfolio is extremely important. Deciding what percentage of your portfolio you should put
into stocks, mutual funds, and low risk instruments like bonds and treasuries isnt simple, particularly for those
reaching retirement age. Imagine saving for 30 or more years in the stock market only the see the stock market
decline in the years just before your retirement! For many, this is what happened during the bear market of
2000 and 2001.

Therefore one must change asset allocation over time to move more towards safer asset classes (bonds,
treasuries) as one gets older. To determine your asset allocation plan, we suggest you speak to an investment
advisor who can customize a plan that is right for your.

Standard deviation:-
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The most basic of all measure- standard deviation allows you to evaluate the volatility of the fund. Put
differently is allows your to measure the consistency of the returns. The volatility is often a direct indirect of the
risk taken by the fund. The standard deviation of a fund measures this risk by measuring the degree to which the
fund fluctuates in relation to its mean return the average return of a fund over a period of time.

A security that is volatile is also considered higher risk because its performance may change quickly in either
direction at any moment.

Beta:-
Beta is a commonly used measure of risk. It basically indicates the level of Volatility associated with the fund as
compared to the benchmark.

So quite naturally the success of Beta is heavily dependent on the correlation between a fund its benchmark.
Thus if the fund portfolio does not have a relevant benchmark index then a beta would be grossly inadequate. A
beta that is greater than one means that the fund is less volatile than the index. A fund with a beta very close to I
means the funds performance closely matches the index or benchmark.
Alpha:-
Alpha= (Fund return-Risk free return)-Funds beta* (benchmark return-Risk free return).
Alpha is the difference between the return one would expect from a fund, given its beta, and the return it
actually produces. An alpha of -1.0 means the fund produced a return 1% higher than its beta would predict. An
alpha of 1.0 means the fund produced a return 1% lower. If a fund returns more than its beta then it has a
positive alpha and if it returns less then it has a negative alpha. Once the beta of a fund is known, alpha
compares the funds performance to that of the benchmarks risk adjusted return. It allows you to ascertain if the
funds returns out performed the market has given the same amount of risk.

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The accuracy of an alpha depends on two factors:
1) The assumption that market risk, as measured by the beta, is the only risk measure necessary.
2) The strength of funds correlation to a chosen benchmark such as the BSE SENSEX or the NIFTY.
Sharpe Ratio:-
Sharpe ratio= Fund return in excess of risk free return/standard deviation of the fund. Sharpe ratio uses only the
standard deviation, which measures the volatility of the returns there is no problem of benchmark correlation.
The higher of Sharpe ratio, the better a funds return relative to the amount of risk taken.

SYSTEMATIC INVESTMENT PLAN

2. Power of compounding
Investment gurus always recommend that one must start investing early in life. One of the main
reasons for doing that is the benefit of compounding. To explain with an example: Person A started
investing Rs. 10,000 per year at the age of 30. Person B. started investing the same amount every
year at the age of
35. When they attained the age of 60 respectively, person A had built a corpus of Rs. 12.23 lakh
while person Bs corpus was Rs. 7.89 lakh. A rate of return 8%k compounded has been assumed. So
the difference of Rs. 50,000 in amount invested made a difference of more than Rs. 4 lakh to their
end corpus. That difference is due to the effect of compounding. Longer compounding period is the
better for you.

Now instead of investing Rs. 10,000 each year suppose person an invested Rest. 50,000 after every
5 years, starting at the age of 35. The total amount invested thus remains the same, which is Rs 3
lakh. However, when he is 60, his corpus will be Rs. 10.43 lakh. Again, he loses the advantage of
compounding in the early years.
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3. Rupee cost averaging
This is especially true for investments in equities. When you are invest the same amount in a fund at
regular intervals over time. You buy more units when the price is lower. Thus you would reduce
your average cost per share or per unit over time. This strategy is called rupee cost averaging. With
a sensible and long-term investment approach rupee cost averaging can smooth out the markets ups
and downs and reduce the risks of investing in volatile markets.

In developing economies like India where securities markets (equities and fixed income
instruments) can be volatile and it is rarely possible to time the markets and predict the future. We
can seldom accurately predict when a particular stock will move up or where the interest rates are
headed.

Systematic Investment Plan makes the volatility of the securities markets work in your favour.
Since the amount invested per month is a constant, the investor ends up buying more units when the
price is low and fewer units when the price is high. Therefore, the average unit cost will always be
less than the price is high. There for, the average unit cost will always be less than the average sale
price per unit, irrespective of the market rising, falling, or fluctuating. This concept is called Rupee
Cost Averaging (RCA).

4. Convenience
This is a very convenient way of investing. Your have to just submit chouse with the complete
enrolment form. The mutual fund will deposit the chouse on the requested date and credit the units
to ones account and will send the confirmation for the same.


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5. Other advantages
Most fund houses waive entry or exit loads on SIP investments Capital gains, wherever applicable
are taxed on a first-in-out basis.

EMI Investment
Equity investment purchases are being made on monthly installment basic just like EMI payment
for any big purchases like, Home, Capital Goods, etc.
6. Market Timing Eliminated
No need to time the market to make equity investment, as average purchase per unit is always less
than average unit sale price irrespective of the market rising, falling or fluctuating.
7. Regular Savings
Ensures disciplined and regular savings of the installments amount, however small it may be,
invested thru the SIP.
8. Operational ease
Ensure operational ease as paperwork is needed only for the first installment and rest of subsequent
installments are automated thru Auto-Debit (ECS) facility.
9. Longer-period investment
Ensures equity investment for a moderate period as the SIP investment duration varies from 6
months to 12 months. Historical market data has shown that equity market generates stable returns
over longer period of time.

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Less Risky Strategy
Cost averaging, elimination of market timing and longer-period investment ensures that SIP is a less
risky way of investing in equity market, which is the best investment asset from a longer-term
perspective. SIP are a regular investment plan available on all kind of mutual funds schemes,
though they are the most effective in equity schemes, as equity is a more volatile class then debt.
SIP help you profit from volatility by automatically buying you more units when prices are falling
and fewer units when prices are rising, thus lowering your average purchase price.

In later half of this project we will discuss and analyze Performance of equity funds of SBI
MUTUAL FUND.









FAQO ON THE SIP
I. Whom are Sips for?
Sips are investment products with a long term flavour. They are suitable for investors who would
like to tap the long term potential of equities and are willing to invest regularly. The other profile of
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investors who would find sips useful are those who would like to invest but can not rustle up
enough savings in one shot.
II. Is there a load?
An exit load is a fee you pay the fund when you sell the units, just like the entry load is fee you pay
when you buy the units. Initially, funds never charged an entry load on Sips. Now, however, a
number of them do. You will also have the check if there is an exit load. Generally, though, there is
none. Also, if there is an entry load, an exit load will not be charged. An exit load may be charged if
you stop the SIP mid-way. Lets say you have a one-year SIP but discontinue after five months,
then an exit load will be levied. These conditions will wary between mutual funds.
III. What is the minimum investment?
If you do a one time investment, the minimum amount that you have to invest is Rest. 5,000. If you
invest via an SIP, the amount drops. Each fund has their own minimum amount. Some may keep it
at lest Rs. 500 per months, others may keep it as Rs. 1,000.
IV. How often does one have to invest?
It would depend on the fund. Some insist the SIP must be done every month others give you the
option of investing once in three months or once in six months. They also give fixed dates. So you
will get the option of various dates and you will have to choose one. Lets say you are presented
with these dates: 1.10,20 or 30 .You can pick any one date. If you pick the 10
th
of the month, then
on that day, the amount you have decided to invest in the fund has to be credited to your mutual
fund.
V. How must the payment be made?
You can opt for the Electronic Clearance Service from your bank: this means the mutual fund will,
as per your instructions. Debit a certain amount from your account every month.

Lets say you have a SIP of Rs. 1,000 every month and you have chosen to invest in it on the 10
th
of
every month under this option. You can instruct your mutual fund to directly debit your bank
account of Rs. 1,000 on the due date. If you dont have the required money in your account, then for
SBI-
MF

EWCM/DV/DR Page 50

that month on units will be allocated to you. But, if this continues periodically, the mutual fund will
discontinue the SIP. You need to check with each mutual fund what their parameters are.
Alternately, you can give cheques to your mutual fund. In this case, they may ask for five Post
Dated Cheques upfront with your first investment.
**********
Since these chouse are dated ahead of time. They cannot be processed till the date indicated.
VI. Must I state for how long I want the SIP?
Yes will have to state whether you want it for a year or two years, etc. If, during the course of this
period, you realized you cannot continue with the SIP, all you have to do is inform the fund 15 days
prior to the payout.

The SIP will be discontinued. You can continue to keep your money with the fund and withdraw it
when you want.

VII. Do all funds offer SIP?
No Liquid funds, cash funds and floating rate debt funds do not offer an SIP. These are funds that
invest in very short-term fixed-return investments. Floating rate debt funds invest in fixed return
investments where the interest rate moves in tandem with interest rates in the economy (just like a
floating rate home loan).

All types of equity funds (funds that invest in the shares of companies). Debt funds (fund that invest
in fixed-return investments) and balanced funds (funds that Invest in both) offer a SIP.
VIII. Tax implication
Lets say you have invested in the SIP option of a diversified equity fund it you sell the units after a
year of buying, you pay no capital gains tax. If you sell if before a year, you pay capital gains tax of
SBI-
MF

EWCM/DV/DR Page 51

10% lets say you invest through a SIP for 12 months: January to December 2005. Now in February
2006, you want to sell some units.

Will you be changed capital gains tax?
The system of first-in, first-out applies here. So, the amount you invest in January 2005 and the
units you bought with that money will be regarded as the units you sell in February 2006. For tax
purposes the units that you sell first will be considered as the first unit bought.

IX. How will an SIP help?
When you buy the units of a fund, you may do so when the NAV is really high. For instance, lets
say you bought the units of a fund when the Bull Run was at its peak, leading to high NAV If the
market dips after that, the value of your investments falls and you may have to wait for a long while
to make a return on your investment. But, if you invest via a SIP. You do not commit the error of
buying units when the market is at its peak. Since you are buying small amounts continuously. Your
investment will average out over a period of time. You will end up buying some units at a high cost
and some units a lower price. Over time your chances of making a profit are much higher when
compared to a one time investment.






CONSTITUTION OF THE SBI MUTUAL FUND
SBI-
MF

EWCM/DV/DR Page 52


The fund SBI Mutual Fund has been constituted as a Trust, sponsored by SBI. SBI has an initial contribution
of Rs. 5 lace towards setting up of the Mutual Fund. SBI has appointed SBIMFTCIPL to supervise the
activities of the fund. SBIMFTCPL has entrusted the work of the management of the fund to SBI Fund
Management Private Limited, an Asset Management Company. SEBI vide letter dated December 23, 1993
has registered the fund under registration no. MF/009/93/3.

Objective of the Fund

The primary objective of any Mutual fund is to provide a vehicle for investors to avail of the opportunities
offered by the capital market and money market. SBIMF was also formed with this objective in mind. Our
aim is to provide such opportunity even to the smallest investor in urban as well as rural areas and offer and
opening to employ his funds profitably.
The Sponsor

The State Bank of India or SBI having its corporate office at State Bank Haven, Madame Camas Road,
Mumbai-400021, is the largest public sector bank in India With 9517 branches in India and 83 offices in 32
countries worldwide. SBI also has 8 Domestic Banking subsidiaries and 6 foreign Banking subsidiaries. SBI
also has 10 domestic non banking subsidiaries and 2 foreign non banking subsidiaries. State bank of India holds
63% stake in SBI Fund Management Private Limited.

The Trustee
SBI Mutual fund Trustee Company Private Limited (SBIMFTCPL), a wholly owned subsidiary of SBI
incorporated under the provision of the companies at 1956 The registered office of SBIMFTCPL is situated at
191, Maker Tower E Cuffed parade Mumbai-400005.
SBI-
MF

EWCM/DV/DR Page 53




SBI MAGNUM EQUITY FUND

Investment objective:-
This actively managed fund offers growth through investment in a portfolio of a select blue chip stocks.
Type of fund:-
Open ended equity fund (date of inception 1/1/1991)
Asset under management: - 298.84 CR
Scheme Highlights:-

1. A diversified equity fund, focusing on aggressive growth.
2. Ideal for investors who wish to benefit from the growth of the equity markets and are Comfortable with the
attendant volatility
Performance report and portfolio analysis:-
Benchmark index:- BSE 100

YTD 1 m 3 m 6 m 1 y 3 y 5 y S. inc
Fund 10.99% 3.41% 15.03% 10.99% 45.33% 49.26% 39.74% 16.93
%
SBI-
MF

EWCM/DV/DR Page 54

Bench
mark
index
8.92% 1.83% 15.46% 8.92% 41.44% 43.78% 35.70% NA

Benefits of systematic investment plan:-

Sip investment 1 year 3 year
Total amount invested 12000 36000
Market value 13895 65126
Capital gain 1895 29126


Asset allocation:-

Type of instrument Normal allocation(% of net assets)
Equity and equity related instrument Not less than 70%
Debt instrument like debentures bonds hookah
etc.
Not more than 30%
Securitized Debt Not more than 10% of the investments in debt
instruments
Money market instrument Balance
SBI-
MF

EWCM/DV/DR Page 55










SBI Magnum Mullica Fund
0
10
20
30
40
50
60
70
80
90
100
Large Cap Mid Cap Small Cap Other Current assets
Series1
Sectoral Breakdown
automobile
cement
construction
consumer goods
energy
fertiliser
financial service
industrial
it
media
meta
miscellaneous
pharma
telecom
SBI-
MF

EWCM/DV/DR Page 56

Investment objective:-
To improve investors with opportunities for long term growth in capital along with the liquidity of an open
ended scheme through an active management of investments in a diversified basket of equity spanning the entire
market capitalization spectrum and in debt and money market instruments.
Type of fund: - Open ended equity (date of inception -14/10/2005)
Asset under management: - 1118.93 cr
Scheme Highlights:-
1. Scheme opened for continuous sale and repurchase.
2. Dividend and Growth options available. Reinvestment and payout facility available.
3. Dividends will be completely tax-free. Long term capital gains to be completely tax-free.
Short term capital gains to be taxed at 10% (plus applicable surcharge and cess).
Performance report and portfolio analysis:-
Benchmark index: - BSE 100
YTD 1 m 3 m 6 m 1 y 3 y 5 y S. inc
Fund 1.01% 3.62% 11.03% 1.01% 25.67% N.A N.A 34.36
%
Bench
mark
6.96% 6.20% 14.43% 7.76% 38.69% N.A N.A 39.36
%
Benefits of systematic investment plan
Sip investment 1 year 3 year
Total amount invested 12000 36000
SBI-
MF

EWCM/DV/DR Page 57

Market value 13070 N.A
Capital gain 1070 N.A

Asset allocation:-
Type of instrument Normal allocation
Equity and equity related instrument
including derivative
70%-100%
Foreign securities /ADR/GDR. 0%-10%
Fixed/ Floating rate debt
instruments including derivative
0%-30%
Money market instrument 0%-30%



0
10
20
30
40
50
60
70
Large Cap Mid Cap Small Cap Other Current assets
Series1
SBI-
MF

EWCM/DV/DR Page 58








SBI Magnum Blue Chip Fund
Investment objective:-
To provide investors with opportunities for long term growth in capital through an active management of
investment in a diversified basket of equity stocks of companies whose market capitalization is at least equal to
or more than the least market capitalized stock of BSE 100 index




Sectoral Allocation
automobile
cement
construction
consumer goods
energy
fertiliser
financial service
industrial
it
media
meta
miscellaneous
pharma
telecom
SBI-
MF

EWCM/DV/DR Page 59

Type of fund: - open ended equity (date of inception 17/2/2006)
Asset under management: - 1770.88cr
Scheme Highlights:-

1. Dividend and Growth options available. Reinvestment and payout facility available.
2. Dividends will be completely tax-free. Long term capital gains to be completely tax-
Free. Short-term capital gains to be taxed at 10% (plus applicable surcharge and cess)
Performance report and portfolio analysis:-
Benchmark index:- BSE 100



YTD 1 m 3 m 6 m 1 y 3 y 5 y S. inc
Fund 3.93% 5.00% 13.53% 4.02% 24.06% N.A N.A. 16.46
%
Bench
mark
index
6.96% 6.20% 14.43% 7.76% 38.69% N.A N.A 31.46
%

Benefits of systematic investment plan:-

SBI-
MF

EWCM/DV/DR Page 60

Sip investment 1 year 3 year
Total amount invested Rs.12000 Rs.36000
Market value Rs.12908 N.A.
Capital gain Rs.908 N.A

Asset allocation:-

Type of instrument Normal allocation(% of net assets)
Equity and equity related instrument
including derivatives
70%-100%
Foreign securities/ADR/GDR 0%-10%
Fixed/Floating rate debt instruments 0%.30%
Money market instruments 0%.30%



0
10
20
30
40
50
60
70
80
90
Large Cap Mid Cap Small Cap Other Current assets
Series1
SBI-
MF

EWCM/DV/DR Page 61





SBI Magnum Tax gain
Investment objective:-
The prime objective of this scheme is to deliver the benefit of investment in a portfolio of equity shares, while
offering tax rebate on such investment made in the scheme under section 80C of the Income Tax, 1961 it also
seeks to distribute income periodically depending on distributable surplus.



Type of Fund:- Open ended Equity linked Saving Scheme (date of inception-31/3/1993)
Asset Under Management: - 2046.12cr
Scheme Highlights:-
Sectoral Allocation
automobile
cement
construction
consumer goods
energy
fertiliser
financial service
industrial
it
media
meta
miscellaneous
pharma
telecom
SBI-
MF

EWCM/DV/DR Page 62

1. There is a statutory lock-in period of three year for investments in a Tax Saving. Scheme (misperceive of the
fact whether the investors claim the rebate u/s 80C or any other section or not).

2. Dividends may be declared depending on distributable profits of the scheme. Facility to reinvest dividend
proceeds into the scheme at NAV.

3. Switchover facility to any other open-ended schemes of SBI. Mutual Fund at NAV related prices available
after the statutory lock-in period.

Performance report and portfolio analysis:-
Benchmark Index: - BSE 100

YTD 1 m 3 m 6 m 1 y 3 y 5 y S.
inc
Fund 5.32% 3.65% 8.60% 7.15% 37.81% 76.53% 59.47% 22.
01
%
Bench
mark
index
6.96% 6.20% 14.43% 7.76% 38.69% 43.54% 36.12% 15.
07
%

Benefits of systematic investment plan:-

SBI-
MF

EWCM/DV/DR Page 63

Sip investment 1 year 3 year
Total amount invested Rs.12000 Rs.36000
Market value Rs.19,601 Rs.76,624
Capital gain Rs.7,601 Rs.40,624

Asset allocation:-

Type of instrument Normal allocation(% of net assets)
Equity /Cum. Convertible
Preference shares/Fully convertible&
Debentures and Bonds
80%-100%
Money market instrument 00%.20%



0
5
10
15
20
25
30
35
40
45
Large Cap Mid Cap Small Cap Other Current assets
Series1
SBI-
MF

EWCM/DV/DR Page 64









SBI Magnum Contra Fund
Investment Objective: - To understand the maximum growth opportunity through equity in
Vestments in stocks of growth oriented sector.
Type of Fund: - Open ended equity funds (date of inception 14/7/1999)
Assets under Management: - Rs.1837.00cr.
Scheme Highlights:-
1. An open-ended scheme in which there are five sub-funds, viz. Information Technology (IT) Pharmaceuticals,
Fast Moving Consumer Goods (FMCG) and a Contra sub fund-investing in stocks currently out of favour and
Sectoral nBreakdown
automobile
cement
construction
consumer goods
energy
fertiliser
financial service
industrial
it
media
meta
miscellaneous
pharma
telecom
SBI-
MF

EWCM/DV/DR Page 65

Emerging Businesses Fund to participate in the growth potential presented by various companies that are
considered emergent and have export orientation/ outsourcing opportunities or are globally competitive by
investing in the stocks representing such companies. The fund may also evaluate emerging businesses with
growth potential and domestic focus. Accordingly, investors can chose to invest in one or more of the five sub
funds. The fund allows free switchover from one sector to another. The merits of each of the five sectors are
detailed in the following pages.

2. Growth and Dividend Option available under Contra, Pharmaceuticals and Emerging Businesses Fund.

3. Switch-over facility at NAV related price to other open-ended schemes of SBI Mutual Fund, is available. This
facility is not available torsi.

YTD 1 m 3 m 6 m 1 y 3 y 5 y S. inc
Fund 11.92% 1.30% 18.06% 11.92% 44.92% 67.90% 57.02% 32.95
%
Bench
mark
index
8.92% 1.83% 15.46% 8.92% 41.44% 43.78% 35.70% 18.03
%



Benefits of systematic investment plan:-

SBI-
MF

EWCM/DV/DR Page 66

Sip investment 1 year 3 year
Total amount invested Rs.12000 Rs.36000
Market value Rs.16237 Rs.73710
Capital gain Rs.4237 Rs.37710

Asset allocation:-

Type of instrument Normal allocation(% of net assets) Risk
profile
Equities of a particular sector 90%-100% High
Money market instrument 00%.10% Low


0
10
20
30
40
50
60
70
Large Cap Mid Cap Small Cap Other Current assets
Series1
SBI-
MF

EWCM/DV/DR Page 67


Magnum Emerging Business Fund

Investment Objective:-
To provide the investors maximum growth opportunity through equity investments in stocks of growth oriented
sectors of the economy. There are five sub-funds dedicated to specific investment themes viz. Information
Technology, Pharmaceuticals, FMCG Contrarian (investment in stocks currently out of favour) and Emerging.

Businesses. The investment objective of the Emerging Business fund would be to participate in the growth
potential presented by various companies that are considered emergent and have export orientation/out sourcing
opportunities or are globally competitive by investing in the stocks representing such companies. The fund may
also evaluate emerging businesses with growth potential and domestic focus.

Type of fund: - Open ended fund (date of inception11/10/2004)
Asset under Management: - 27413cr
Scheme Highlights:-
Sectoral Breakdown
automobile
cement
construction
consumer goods
energy
fertiliser
financial service
industrial
it
media
meta
miscellaneous
pharma
telecom
SBI-
MF

EWCM/DV/DR Page 68

1. An open-ended scheme in which there are five sub-funds, viz. Information Technology (IT) Pharmaceuticals.
Fat Moving Consumer Goods (FMCG) and a Contra sub fund- investing in stocks currently out of favour and
Emerging Businesses Fund to participate in the growth potential presented by various companies that are
considered emergent and have export orientation/outsourcing opportunities or are globally competitive by
investing in the stock representing such companies. The fund may also evaluate emerging
Businesses with growth potential and domestic focus. Accordingly, investors can chose to invest in one or more
of the five sub fund. The fund allows free switchover from one sector to another. The merits of each of the five
sectors are detailed in the following pages.
2. Growth and Dividend Option available under Contra, Pharmaceuticals and Emerging Businesses Fund.

3. Switch-over facility at NAV related price to other open-ended schemes of SBI Mutual Fund, is available. This
facility is not available to Norris.

Performance Report and Portfolio Analysis:-
Benchmark Index: - BSE 500

YTD 1 m 3 m 6 m 1 y 3 y 5 y S.
inc
Fund 10.68% 5.78% 21.38% 10.68% 48.49% N.A. N.A 55.
14
%
Bench
mark
index
9.69% 2.38% 16.67% 9.69% 43.60% N.A N.A 39.
28
%

SBI-
MF

EWCM/DV/DR Page 69

Benefits of systematic investment plan:-

Sip investment 1 year 3 year
Total amount invested Rs.12000 Rs.36000
Market value Rs.14063 N.A
Capital gain Rs.2063 N.A

Assets Allocation:-

Instrument % of Portfolio Risk profile
Equities or equity related
instruments including
derivatives across
diversified sectors*
At least 90% Medium to High
Money market instruments 00%-30% Low

SBI-
MF

EWCM/DV/DR Page 70








Magnum comma Fund
Investment Objective:-

0
10
20
30
40
50
60
70
80
90
Large Cap Mid Cap Small Cap Other Current assets
Series1
Sectoral Breakdown
automobile
cement
construction
consumer goods
energy
fertiliser
financial service
industrial
it
media
meta
miscellaneous
pharma
telecom
SBI-
MF

EWCM/DV/DR Page 71

The objective of the scheme would be to generate opportunities for growth along with possibility of consistent
returns by investing predominantly in a portfolio of stocks of companies engaged in the commodity business
within the following sectors- oil & Gas, Metals, Materials & Agriculture and in debt & money market
instruments.

Type of Fund: - Open ended fund (date of inception 24/8/2005)
Asset under management: - 437.56cr
Scheme Highlights:-

1. An open-ended equity scheme investing in stocks of commodity based companies.
2. Minimum investment Rs.5000 and in multiples of Rs.1000 Dividend and Growth options available.
Reinvestment and payout facility available.
3. Dividends will be completely tax-free. Long term capital gains to be completely tax-free. STT would be at the
rate of 0.20% at the time of repurchase.

Performance report and Portfolio Analysis:-

Benchmark index: - BSE 200

YTD 1 m 3 m 6 m 1 y 3 y 5 y S. inc
Fund 9.76% 5.06% 22.83% 9.765 42.13% N.A. N.A 35.51%
Bench 9.00% 2.19% 15.94% 9.00% 42.13% N.A N.A 39.06%
SBI-
MF

EWCM/DV/DR Page 72

mark


Benefits of systematic investment plan:-
Sip investment 1 year 3 year
Total amount invested Rs.12000 Rs.36000
Market value Rs.13665 N.A
Capital gain Rs.1665 N.A

Assets Allocation:-

Instrument % of Portfolio Risk profile
Equities and equity related
instruments of commodity
based companies
Within 65-100%% High
Foreign Securities /ADRs
/GDRs of commodity base
companies
0%-10% High
Fixed /Floating Rate Debt
instruments including
derivatives
0.30% Medium
Money market instruments 0%-30% Low

SBI-
MF

EWCM/DV/DR Page 73





MAGNUM INDEX FUND

Investment Objective:-
The scheme will adopt a passive investment strategy. The scheme will invest in stock comprising S&P CNX
Nifty index in the same proportion as in the index with the objective of achieving returns equivalent to the Total
Returns Index of S&P CNX Nifty index by minimizing the performance difference between the benchmark
0
10
20
30
40
50
60
Large Cap Mid Cap Small Cap Other Current assets
Series1
Sectoral Breakdown
automobile
cement
construction
consumer goods
energy
fertiliser
financial service
industrial
it
media
meta
miscellaneous
pharma
telecom
SBI-
MF

EWCM/DV/DR Page 74

index and the scheme. The Total Returns Index is an index that reflects the returns on the index from index
gain/loss plus dividend payments by the constituent stocks.
Type of Fund: - Open ended fund (date of inception 4/2/2002)
Assets under Management: - 8.28cr
Scheme Highlight:-

1. An open-ended passively managed index fund tracking the S &P CNX Nifty Index where the investments
will be made in all the stocks comprising the S & P CNX Nifty in the same proportion as their weight age in the
index.
2. Following options available: Growth and Dividend 3. Investors have the facility to switchover at NAV related
prices to other open-end schemes of SBI Mutual Fund. This facility of switchover to other schemes is not
available to NRIs and FIIs.

Performance report and portfolio analysis:-
Benchmark index: - S & P NIFTY TRI

YTD 1 m 3 m 6 m 1 y 3 y 5 y S. inc
Fund 7.67% .34% 12.11% 7.67% 34.51% 41.33% 32.58% 29.43%
Bench
mark
8.87% .52% 13.00% 8.87% 38.17% 42.13% 32.45% 29.33%
Benefits of systematic investment plan:-
Sip investment 1 year 3 year
SBI-
MF

EWCM/DV/DR Page 75

Total amount invested Rs.12000 Rs.36000
Market value Rs.13459 Rs.59910
Capital gain Rs.1459 Rs.23910

Assets Allocation:-

Instrument % of Portfolio Risk profile
Stocks comprising the S& P
CNX Nifty Index
Not more than100%% High
Cash and call money Not more than 10% Low



0
20
40
60
80
100
120
Large Cap Mid Cap Small Cap Other Current assets
Series1
SBI-
MF

EWCM/DV/DR Page 76




]
Magnum Madcap Fund:-
Investment Objective:-

To provide investors with opportunities for long-term growth in capital along with the liquidity of an open-
ended scheme by investing predominantly in a well diversified basket of equity stocks of companies whose
market capitalization is between Rs.200 crores to Rs.2000 crores and in debt and money market instruments.
Type of Fund:-
Open ended fund (date of inception-15/4/2005)
Asset under management: - Rs.430.20cr
Scheme Highlights:-
1. Open-ended Growth scheme
2. CDSC not exceeding 1.5 % for exit within 12 months from the date of reopening of the scheme.
Sectoral Breakdown
automobile
cement
construction
consumer goods
energy
fertiliser
financial service
industrial
it
media
meta
miscellaneous
pharma
telecom
SBI-
MF

EWCM/DV/DR Page 77

3. Minimum investment: Rs.5000 and in multiples or Rs...1000 4. Dividend & Growth options available.
Performance Report and Portfolio Analysis:-
Benchmark index:-CNX Mid Cap 200

YTD 1 m 3 m 6 m 1 y 3 y 5 y S. inc
Fund 13.48% 6.52% 20.14% 13.48% 57.41% N.A N.A 52.18%
Bench
mark
14.92% 5.87% 23.21% 14.92% 51.66% N.A N.A 38.28%
Benefits of systematic investment plan:-

Sip investment 1 year 3 year
Total amount invested Rs.12000 Rs.36000
Market value Rs.14196 N.A
Capital gain Rs.2196 N.A

Assets Allocation:-

Instrument % of Portfolio Risk profile
Equity and equity related
instruments outside the range
of Rs.200 crores Rs.2000
crores High
Not more than 10% High
SBI-
MF

EWCM/DV/DR Page 78

Equity and equity related
instruments outside the range
of Rs.200 crores Rs.2000 +
With in 65%-100% High
Foreign
Securities/ADRs/GDRs
0%-30% Medium
Fixed/Floating Rate debt
instruments including
derivatives
0%-30% Low
Money Market instruments* 0%-30% Low





0
10
20
30
40
50
60
70
80
Large Cap Mid Cap Small Cap Other Current assets
Series1
SBI-
MF

EWCM/DV/DR Page 79



Magnum Parma Fund

Investment Objective:-
To provide the investors maximum growth opportunity through equity investments in stocks of growth oriented
sectors of the economy. There are five sub-funds dedicated to specific investment themes viz. Information
Technology, Pharmaceuticals. FMCG. Contrarian (investment in stocks currently out of favour) and Emerging
Businesses.
Type of Fund: - Open ended fund (date of inception 14/7/1999)
Assets under Management:-49.22cr

Scheme Highlights:-
1. Open ended Equity Scheme.
2. Targeted at investors seeking high growth and comfortable with attendant
Volatility.
Performance Report and Portfolio analysis:-
automobile
cement
construction
consumer goods
energy
fertiliser
financial service
industrial
it
media
meta
miscellaneous
pharma
telecom
SBI-
MF

EWCM/DV/DR Page 80

Benchmark index: - BSE Healthcare

YTD 1 m 3 m 6 m 1 y 3 y 5 y S. inc
Fund 2.84% 2.21% 9.77% 2.84% 21.65% 36.89% 38.72% 20.29%
Bench
mark
.36% .94% 4.28% .36% 21.56% 21.31% 23.49% N.A





Sip investment 1 year 3 year
Total amount invested Rs.12000 Rs.36000
Market value Rs.13882 Rs.50338
Capital gain Rs.1882 Rs.14338

Assets Allocation:-

Instrument % of Portfolio of Plan A & B Risk profile
Equities of a particular 90%- 100% High
Money Market Instruments 00%-10% Low
SBI-
MF

EWCM/DV/DR Page 81











0
10
20
30
40
50
60
70
Large Cap Mid Cap Small Cap Other Current assets
Series1
Sectoral Breakdown
Health Service
Pharma
SBI-
MF

EWCM/DV/DR Page 82

MSFU FMCG FUND

Investment Objective:-
To provide the investors maximum growth opportunity through equity investments in stocks of growth oriented
sectors of the economy. There are five sub-fund dedicated to specific investment themes viz. Information
Technology, Pharmaceuticals, FMCG, Contrarian (investment in stocks currently out of favour) and Emerging
Businesses.
Type of Fund: - Open ended fund (date of inception 14/7/1999)
Assets under management: - 9.16cr

YTD 1 m 3 m 6 m 1 y 3 y 5 y S. inc
Fund 3.42% 2.19% 5.97% 3.42% 1.22% 25.99% 24.26% 7.06%
Bench
mark
5.42% 4.09% 5.19% 5.42% 6.20% 30.45% 16.29% N.A
Benefits of systematic investment plan:-

Sip investment 1 year 3 year
Total amount invested Rs.12000 Rs.36000
Market value Rs.14359 Rs.43881
Capital gain Rs.2359 Rs.7881

Assets Allocation:-
SBI-
MF

EWCM/DV/DR Page 83


Instrument % of Portfolio of Plan A & B Risk profile
Equities of the FMCG sector 90%- 100% High
Money Market Instruments 00%-10% Low






0
10
20
30
40
50
60
70
Large Cap Mid Cap Small Cap Other Current assets
Series1
Sectoral Breakdown
Consumer goots
industrial manufaturing
miscellaneous
textile
cash
SBI-
MF

EWCM/DV/DR Page 84

MSFU IT FUND
Investment Objective:-
To provide the investors maximum growth opportunity through equity investments in stocks of growth oriented
sectors of the economy. There are five sub-funds dedicated to specific investment themes viz. Information
Technology, Pharmaceuticals, FMCG.

Contrarian (investment in stocks currently out of favour and Emerging Businesses

Type of Fund: - Open ended fund (date of inception 14/7/1999)
Assets under Management: - Rs.122.35cr
Scheme Highlights:-
1. Open ended Equity Scheme.
2. Targeted at investors seeking high growth and comfortable with attendant volatility
Performance Report and Portfolio Management:-
Benchmark index: - BSE IT
YTD 1 m 3 m 6 m 1 y 3 y 5 y S. inc
Fund 8.14% .59% 6.41% 8.14% 65.46% 54.86% 36.76% 20.29%
Bench
mark
7.62% 0.40% 0.59% 7.62% 30.21% 38.20% 26.98% 17.27%

Benefits of Systematic Plan:-
SBI-
MF

EWCM/DV/DR Page 85

Sip investment 1 year 3 year
Total amount invested Rs.12000 Rs.36000
Market value Rs.13837 Rs.71750
Capital gain Rs.1837 Rs.35370

Assets Allocation:-

Instrument % of Portfolio of Plan A & B Risk profile
Equities of a particular
sector
90%- 100% High
Money Market Instruments 00%-10% Low





0
10
20
30
40
50
60
Large Cap Mid Cap Small Cap Other Current assets
Series1
SBI-
MF

EWCM/DV/DR Page 86










Magnum Multiplier Plus 1993
Investment Objective:-
Magnum Multiplier Plus is an open-ended diversified equity fund and the investment objective of the scheme is
to provide investors long term capital appreciation along with the liquidity of an open-ended scheme. The
scheme will invest in a diversified portfolio of equities of high growth companies.
Type of Fund: - Open ended fund (28/2/1993)
Asset under management:-Rs.846.31
Sectorial Breakdown
Consumer goots
it
miscellaneous
pharma
financial service
telecom
cash
SBI-
MF

EWCM/DV/DR Page 87

Scheme Highlights:-
1. An open-ended equity scheme aiming for aggressive growth from investment in equities.
2. Scheme opens for Resident Indians, Trusts, and Indian Corporate and on a fully reparable basis for NRIs.
Falls & Overseas Corporate Bodies.
3. Facility to reinvest dividend proceeds into the scheme at NAV.
4. Easy entry and exit on the basis of sales and repurchase prices determined daily. NAV will be declared on
every business day.
5. Nomination facility available for individuals applying on their behalf either singly or jointly up to three.

Performance report and portfolio Analysis:-
Benchmark index: - BSE 100
YTD 1 m 3 m 6 m 1 y 3 y 5 y S. inc
Fund 10.51% 5.89
%
17.82% 10.51% 50.50% 64.22% 48025
%
16.49%
Bench
mark
8.92% 1.83
%
15.46% 8.92% 41.44% 43.78% 35.70% N.A
Benefits of Systematic Investment Plan:-
Sip investment 1 year 3 year
Total amount invested Rs.12000 Rs.36000
Market value Rs.1558 Rs.70469
Capital gain Rs.3588 Rs.34369

SBI-
MF

EWCM/DV/DR Page 88

Assets Allocation:-
Instrument % of Portfolio Risk profile
Equities of related
instruments
Not less than 70% Medium to high
Debt instruments (including
Securitized debt) and Govt.
Not less than 30% Low to medium
Money Market Instruments Balance Low



0
10
20
30
40
50
60
70
80
Large Cap Mid Cap Small Cap Other Current assets
Series1
SBI-
MF

EWCM/DV/DR Page 89







MAGNUM Global Fund

Investment objective:-
To provide the investors maximum growth opportunity through well researched investments in Indian equities,
PCDs and FCDs from selected industries with high growth potential and Bonds.
Type of Fund: - Open ended Fund (Date of inception 30/9/2004)
Asset under Management: - 1614cr
Scheme highlights:-
1. An open-ended equity scheme investing in stocks from selected industries with high growth potential
Sectorial Breakdown
Consumer goots
it
miscellaneous
pharma
metal
media
cash
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MF

EWCM/DV/DR Page 90

2. Minimum Investment Rs.2000 and in multiples of Rs.1000 with Dividend and Growth option available. A
Money Market Instruments will include.
Commercial Paper, Commercial Bills, Certificate of Deposit, Treasury Bills-Bills Rediscounting, Repos,
Government Securities having an unexpired maturity of less than 1 year, call or notice money, usance bills and
any other such short-term instruments as may be allowed under the regulations prevailing from time to time
Performance Report and Portfolio Analysis:-
Benchmark index: - BSE 100

YTD 1 m 3 m 6 m 1 y 3 y 5 y S. inc
Fund 5.10% 2.29% 12.93% 5.10% 50.69% 72.83% 56.17% 16.83%
Bench
mark
8.92% 1.83% 15.46% 8.92% 41.44% 43.78% 35.70% 10.88%
Systematic Investment Plan:-
Sip investment 1 year 3 year
Total amount investment Rs.12000 Rs.36000
Market value Rs.17087 Rs.74353
Capital gain Rs.5087 Rs.38353



Assets Allocation:-
Instrument % of Portfolio Risk profile
SBI-
MF

EWCM/DV/DR Page 91

Equities ,Partly Convertible
Debentures, Full Convertible
Debentures & Bonds
80%-100% Medium to high
Money Market Instruments 0%-20% Low






0
10
20
30
40
50
60
70
Large Cap Mid Cap Small Cap Other Current assets
Series1
Sectorial Breakdown
Consumer goots
it
miscellaneous
pharma
metal
media
cash
SBI-
MF

EWCM/DV/DR Page 92



SBI ARBITRAGE OPPORTUNITIES FUND

Investment objective:-
To provide capital appreciation and regular income for unit holders by identifying profitable arbitrage
opportunities between the spot and derivative market segments as also through investment of surplus cash in
debt and money market instruments.
Type of Fund: - Open ended Fund date of inception 8/11/2006)
Asset under Management: - 346.44cr
Scheme Highlights:-
1. Investment in a diversified basket of equity & equity related instruments,
derivative instruments and debt and money market instruments in accordance
with the asset allocation pattern.
2. Liquidity: - Fresh Purchases and Redemptions at prices related to Applicable
NAV. The interval day for redemption/switch would be the settlement Thursday
(the settlement day for derivatives segment in the NSE which is currently last
Thursday of the month) or any other day which is declared as the settlement day
for derivatives segment by the NSE.
3. Benchmark Index: - CRISIL Liquid Fund Index.
4. Options; Growth Option and Dividend option available. Under the Dividend
option, facility for reinvestment/payout of dividend available. The dividend
frequency is at the discretion of the Trustee. Dividends will be declared subject to
availability and adequacy of surplus in the Scheme. Cheques /Drafts to be in
favour of SBI Arbitrage Opportunities Fund.
SBI-
MF

EWCM/DV/DR Page 93

5. Cut off times For Redemption Application: - All repurchase requests received
under the scheme till up to 3:00 p.m. on the Friday (in case proceeding the
interval day would be processed at the NAV (with applicable exit load) of the
interval day. The interval day would be the settlement Thursday (the settlement
day for derivatives segment in the NSE which is declared as the settlement day
for derivatives segment by the NSE.
6. For Purchase Application:- The purchase request received up to 3:00 p.m. on cash
Business Day would be processed at the NAV applicable for the same day and
the purchase request received after 3:00 p.m. would be processed at the NAV
applicable for the next business day.
Performance Report and Portfolio Analysis:-

YTD 1 m 3 m 6 m 1 y 3 y 5 y S. inc
Fund 5.15% 0.82% 2.26% 5.15% N.A. N.A. N.A. 6.52%
Bench
mark
4.30% 0.49% 2.48% 4.30% N.A. N.A. N.A. 5.13%
Benefits of Systematic Investment Plan:-
Sip investment 1 year 3 year
Total amount invested Rs.12000 Rs.36000
Market value N.A. N.A.
Capital gain N.A. N.A.

SBI-
MF

EWCM/DV/DR Page 94


Assets Allocation:-
Instrument % of Portfolio Risk profile
Equities and equity related
instruments
65%-85% High
Derivatives, including Index
Futures, Stock Futures, Index
Options and Stock Options
65%-85% High
Debt Instruments and Money
Market Instruments
15%-35% Medium to Low
Securitized Debt Not more than
10%ofsecuritized debt
Medium to low





0
10
20
30
40
50
60
Large Cap Mid Cap Small Cap Other Current assets
Series1
SBI-
MF

EWCM/DV/DR Page 95



Magnum Balanced Fund
Investment objective:-
To provide investors long term capital appreciation along with the liquidity of an open-ended scheme by
investing in a mix of debt and equity. The scheme will invest in a diversified portfolio of equities of high growth
companies and balance the risk through investing the rest in a relatively safe portfolio of debt.

Type of Fund:-Open ended Balanced Fund (date of inception 29/06/2007)
Asset under Management:-295.54 cr
Scheme Highlights:-
1. An open-ended scheme investing in a mix of debt and equity instruments. Investors get the benefit of
high expected-returns of equity investments with the safety of debt investments in one scheme.
2. On an ongoing basis, magnums will be allotted at an entry load of 2.2% to the NAV.
3. Scheme opens for Resident Indians. Trusts, Indian Corporates, on a fully reparable basis for NRIs an,
Overseas Corporate Bodies.
Sectoral Breakdown
automobile
cement
construction
consumer goods
energy
fertiliser
financial service
industrial
it
media
meta
miscellaneous
pharma
telecom
SBI-
MF

EWCM/DV/DR Page 96

4. Facility to reinvest dividend proceeds into the scheme at NAV available. 5. Switchover facility to any other
open-ended schemes of SBI Mutual Fund at NAV related prices.

6. The scheme will declare NAV. Sale and repurchase price on a daily basis.

7. Nomination facility available for individuals applying on their behalf either singly or jointly up to three.

YTD 1 m 3 m 6 m 1 y 3 y 5 y S. inc
Fund 8.03% 1.60% 12.91% 8.03% 32.92% 44.34% 38.90% 20.68
Bench
mark
6.44% 0.60% 9.06% 6.44% 24.45% 25.44% 21.87% N.A.
Benefits of Systematic Investment Plan:-
Sip investment 1 year 3 year
Total amount invested Rs.12000 Rs.36000
Market value Rs.14743 Rs.58966
Capital gain Rs.2743 Rs.22966

Assets Allocation:-
Instrument % of Portfolio Risk profile
Equity At least 50% Medium to high
Debt Instruments like
debentures bonds, khokhas,
Up to 40% High
SBI-
MF

EWCM/DV/DR Page 97

etc.
Securitized Debt Not more than 10% of
investments in debt
Medium to high
Money Market Instruments Balance Low






0
5
10
15
20
25
30
35
40
Large Cap Mid Cap Small Cap Other Current assets
Series1
Sectoral Breakdown
automobile
cement
construction
consumer goods
energy
fertiliser
financial service
industrial
it
media
meta
miscellaneous
pharma
telecom
SBI-
MF

EWCM/DV/DR Page 98

SBI ONE India Fund
Investment objectives:-
To provide investors with opportunities for long term growth in capital through an active management of
investments in a diversified basket of equity stocks focusing on all four regions of India and in debt and money
market instruments.

Type of Fund: - Close ended fund
Asset under Management:-

Scheme Highlights:-

1) Close ended Fund with 3 year tenure. Date of maturity of the scheme is 15
th
January 2010.
2. Scheme reopens for continuous repurchase from 19
th
January 2007.
3. Minimum investment Rs.5000 and in multiples of Rs.1.
4. NAV and repurchase NAV to be disclosed on a daily basis.
5. Dividend and Growth options available. Dividends will be completely tax-free. Long term capital gains to
be completely tax-free. Short term capital gains to be taxed at 10% (plus applicable surcharge and cess)
6) Automatic conversion into open-ended scheme on maturity.
7) The Fund would invest at lest 15% and not more than 55% of its equity exposure to each of the four
regions. At lest 15 stocks in each region. Diversification across sectors in each region and at the scheme
level.
8) Investment approach to be bottom-up without any sector/market capitalization bias.
Benchmark Index: - BSE 200 Index
SBI-
MF

EWCM/DV/DR Page 99

Assets Allocation:-
Instrument % of Portfolio Risk profile
Equity and equity related
instruments including
derivatives
70%-100% High
Fixed/Floating Debt
instruments and Money
Market instruments
0%-30% Medium to low
ADR /GDR /Foreign
Securities
0%-20% High
SBI Infrastructure Fund Series-I
Investment objective:-
To provide investors with opportunities for long-term growth in capital through an active management of
investments in a diversified basket of equity stocks of companies directly or indirectly involved in the
infrastructure growth in the Indian economy and in debt & money market instruments.
Schemes Highlights:-
1. Close-ended growth fund with 3 year tenure
2. Scheme reopens for continuous repurchase from 9
th
July 2007
3. Minimum investment ofRs.5000 and in multiples of Re.1
4. NAV and repurchase NAV to be disclosed on all business days
5. Dividend and Growth options available. Payout facility is available only during the close-ended tenure of the
scheme
6 Dividends will be completely tax-free. Long term capital gains to be completely tax-free short term capital
gains to be taxed at 10% (plus applicable surcharge and cuss
SBI-
MF

EWCM/DV/DR Page 100

7. Automatic conversion into open-ended scheme on maturity.
8. SIP facility will be made available only after the scheme goes open-ended. Exposure to derivatives
instruments in the scheme can be up to a maximum of 50% equity portfolio of the scheme. Exposure to
derivative instruments will be for heading and portfolio balancing purposes in addition to exploring
opportunities for returns enhancement Investment in equities would be through primary as well as secondary
market, private placement, preferential/firm allotments etc and in derivatives.
Benchmark index: - BSE 100

Asset Allocation:-


Instrument % of Portfolio Risk profile
Equities and equity related
instruments including derivate
65%-100% High
Debt and Money Market
instruments
0%-35% Medium to low
ADVANTAGES OF MUTUAL FUND

The Benefits of investing in mutual funds are as follows:-
1. Access to professional moneys managers: - Experienced fund managers using advanced quantitative
and mathematical techniques manager your money.
2. Diversification- Mutual funds aim to reduce the volatility of returns through diversification by
investing in a number of companies across a broad section of industries and sectors. It prevents an
investor from putting. All eggs in one basket. This inherently minimizes risk. Thus with a small
SBI-
MF

EWCM/DV/DR Page 101

investible surplus an investor can achieve diversification which would have otherwise not been
Possible.
3. Liquidity: - Open-ended mutual funds are priced daily and are always willing to buy back units
from investors. This means that investors can sell their holdings in mutual fund investments anytime
without worrying about finding a buyer at the right price. In the case of other investment avenues
such as stocks and bonds, buyers are not necessarily available and therefore these investment
avenues are less liquid compared to open-ended schemes of mutual funds.
4. Tax efficiency- Mutual fund offers a variety of tax benefits. Please visit the tax corner section or
consult your tax advisor for details.
5. Low transaction costs- Since mutual fund are a pool of money of many investors; the amount of
investment made in securities is large. This therefore results in paying lower brokerage due to
economies of scale Transparency- Prices of open-ended mutual funds are declared daily. Regular
updates on the value of your investment are available. The portfolio is also disclosed regularly with
the fund managers investment strategy and outlook.
7 Well-regulated industry- All the mutual funds are registered with SEBI and they function under
strict regulations designed to protect the interest of investors.

8 Convenience of small investments- Under normal circumstances, an individual investor would not
be able to diversify his investments (and thus minimize risk) across a wide array of securities due to
the small size of his investments and inherently higher transaction costs. A mutual fund on the other
hand allows even individual investors to hold a diversified array of securities because it invests in a
portfolio of stocks. A mutual fund therefore permits risk diversification without an investor having
to invest large amounts of money.
9. Flexibility: - One can pick from conservative, blue-chip stock funds are sector funds, funds that aim
to provide income with modest growth or those that take big risks in the search for returns. One can
even buy balanced funds, or those that combine stocks and bonds in the same fund.
10. Spreading Risk- An investor with limited funds might be able to invest in only one or two stocks
bonds, thus increasing his or her risk. However, a mutual fund will spread its risk by investing a
SBI-
MF

EWCM/DV/DR Page 102

number of sound stocks or bonds. A fund normally invests in companies across a wide range of
industries. So the risk


SWOT ANNALYSIS FOR SBI- MF


STRENGTHS



STRONG NETWORK
SBI MF has a very formidable and strong network dedicated field Agent and Brokers who can prove to be
instrumental for excellent business.
HIGHEST INVESTOR FRIENDLY SERVICES
It provides one of the investors friendly services to all its unit holders with the help of its branch offices that are
spread across the country.
CONSISTENT PERFORMANCE
SBI-
MF

EWCM/DV/DR Page 103

All the previous schemes have been performing very well. It has been paying regular
dividends in all its schemes and simultaneously has witnessed fabulous growth in its
capital appreciation.
HIGHEST SAFETY FACTORS

As per the rating of the renowned ratings agencies, the schemes of SBI MF ELSS have received higher ratings.

WEAKNESS

POOR REPRESENTATION
It has very poor representation of ELSS especially in the month of February and March and not issues the
instrument on time.
POOR SUPERVISION

Poor supervision is one of the vital causes for unpopularity of mutual funds equity linked saving instrument
between the employee and businessperson.

OPPORTUNITIES:

SBI-
MF

EWCM/DV/DR Page 104

There exist a lot of invest able opportunities between employees
and business of Bihar if tapped properly.
By virtue of its network of agent as well as through its
ownrepresentatives.it will be easy access to small investors.

THREATS
There can be entry of potential entrants in this untapped rural sector,
which might give SBI MF a tough competition in forth coming days.
There can be another threat from upcoming MMNC S as international
fund managers who will further intensifies the competition with their
superior research techniques and by their formidable financial services.
Local NBCFS who are not only giving high brokerage but also giving
high returns on their investments of course risk is also very high. As we
know that investors in their short run look for return, so in this respect
local NBCFS can give tough competition


AWARDS & ACIEVEMENTS

Our expertise and excellent performance is frequently recognized by the mutual fund industry.
SBI-
MF

EWCM/DV/DR Page 105


SBI Mutual Fund (SBI MF) has been the proud recipient of the ICRA oNLINEaWARD-8 TIMES, CNBC TV-
18 Crisil Awar-2006-4 Awards, The Lipper Award (Year2005-2006) and most recently with the CNBC TV-18
Crisil Mutual Fund of the Year Award 2007 and 5 Awards for our schemes.

ICRA MUTUAL FUND AWARD 2010

ICRA MUTUAL FUNDS AWARDS 2009

THE LIPPER INDIA FUND AWARDS 2009



THE LIPPER INDIA FUNDS AWARDS 2008


AWAAZ CONSUMER AWARDS 2007


MUTUAL FUND OF THE YEAR 2006



ICRA MUTUAL FUND AWARDS 2005

SBI-
MF

EWCM/DV/DR Page 106





CONCLUSION

The savings and investment scenario in our country has undergone immense change in past decade, since the
country embarked on a course of liberalization and globalization of its economy. With the increasing
sophistication of our economy, the variety and type of investments option available to us today have multiplied.
Also with the rapid changes in the options instrument, rate of return etc. have become the order of the day.

In recent time, there is trend to buy more things from income and using credit and savings less compared to the
last decade. Although the variety of investment options available to a person in the country has multiplied, a
large majority of people still depends on a banking system to park their savings. The main reason for this
thinking of people is that they do not have enough time to spend on it and they do not have knowledge about
various investments and saving option.
The customers are having trust on their bank and banks want to give more and more satisfaction to their
customers. Followings are the findings with related to Systematic Investment Plan.
Mostly people living in super metro and other metros show interest in SIP
Age group of 31 to 45 shows greater interest towards SIP.

Age Distribution

SBI-
MF

EWCM/DV/DR Page 107

Income Distribution

People of income group between. Rs.2.5 laths to Rs.5 lakes show greater interest to SIP.

Income Distribution

Occupation style
People having regular flow of income would like to invest in SIP.


Occupation Distribution In percent


Type of Investment Style

Mostly people, who have idea about the SIP, would like to invest in mutual fund through SIP.

Type of investment style
At last

SBI-
MF

EWCM/DV/DR Page 108

SIP in long term (i.e. more than 3 year) will be a good option for investment compared with others
in respect of return.

Minimum investment with respect to SIP is Rs.1000 and in some fund, it may be Rs.500.

SIP is suitable to those who have regular flow of income like salaried people.

Normally SIP is free from any type of entry/exit load.

SIP induces investors habit of savings.




LIMITATIONS

Since my project work is meant to proceed through awareness of the product in same different sector in Patna,
and try to analyze and develop strategy for SBI MF, thereby our actual research method lies with developing
strategy through awareness rather than collection of primary and secondary data. Naturally, research work will
be limited in accordance with the procedure being followed. Therefore we may conclude that the researcher has
gone through analytical an innovative manner.
The study is confined to Patna only.
The project periods were of four weeks so this is not enough time to study the figures.
SBI-
MF

EWCM/DV/DR Page 109

While collecting the information through questionnaire, some respondents were quite
reluctant to respond.
There were money constraints to the researcher.
Few questionnaires dispatched through courier did not come back
A very narrow concept about the mutual fund
Lack of interest among peoples






SUGESSETIONS

The world of investment is a maze for most Indians, complicated by insufficient information, unscrupulous
opportunity and an array of tax related issues. In the last few years we have been witnessed to as security
defraud the IPO bubble that burst, the virtual collapse of NBFCS regime;
Plantation companies that have gone under, the venerable UTI coming under cloud and the market slow down
each taking a toll on investors wealth and confidence.

Mutual funds have to improve their performance through solid fund management. As investors are not expert,
they put their hard-earned money in mutual fund for capital appreciation through expertise. Mutual fund needs
to offer better value with a high return.
SBI-
MF

EWCM/DV/DR Page 110

Employee / executive should make aware about the every aspect of mutual funds and make them fit for the job.
Efforts should be made to convince them understanding the mutual fund market is not a rocket science this can
be achieved by will planned. Marketing approach supported by promotion network.
Organization should concentrate more on print media for promotion of their products, as it is less costly and
more effective mode of advertisement. Constant efforts should be made to improve post purchase service of
mutual fund and plans should be framed to issue the instrument on the right time to tap the saving of masses.

SUCH STEP WILL DEFINITELY CONTRIBUTE TO GROWTH OF MF AND
PAVE THE
WAY FOR FUTURE SUCCESS







BIBLIOGRAPHY

FINANCIALMANAGEMENT BY- I M PANDAY

FINANCIL MANAGEMENT BY - RAVIM KISHORE
SBI-
MF

EWCM/DV/DR Page 111


INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT BY-PRASANNA
CHANDRA

AMFI WORK BOOK

SBI MONTHLY FACT SHEET

www.amfiindia.com

www.sbimf.com

www.mutualfundsomdoa.com

BUSINESS STANDARD

ECONOMICS TIMES




SBI-
MF

EWCM/DV/DR Page 112

QUESTIONNAIRE


Name:

Contact No:

& Address:

Please tick at appropriate box

1. Occupation: a) Govt. service ( ) (b) Business ( )
c) Professional ( ) (d) Others ( )
2. Age: (a) 20-30 ( ) (b) 30-40 ( )
c) 40-50 ( ) (d) Above 50 ( )
3. Monthly Income: (a) less than 5000 ( ) (b) 5000-15000 ( )
c) 15000-25000 ( ) (d) Above 25000 ( )
4. Do you know about Credit Card and Loan Assessment?
(a) Yes ( ) (b) No ( )
SBI-
MF

EWCM/DV/DR Page 113

5. If you have invested in mutual fund what did you consider before investment.
(a) Company Creditability ( ) (b) Past performance ( )
(c) Liquidity ( ) (d) Security ( )
6. Main reason behind investment in mutual fund?
(a) Higher return ( ) (b) Less risk ( )
(c) Tax saving ( ) (d) Regular ( )
7. How do you come to know about mutual fund?
(a) Print Media ( ) (b) Electronic Media ( )
(c) Financial advisor ( ) (d) others ( )
8. How do you categorize yourself as investor?
(a) Short Term ( ) (b) Mid Term ( )
(c) Long Term ( )
9. Which type of mutual fund do you invest in?
(a) One time investment ( )
(b) SIP (Systematic investment plan) ( )
10. What constrains you to invest in mutual fund?
(a) Redemption process ( ) (b) Low return ( )
(c) Risk in market ( ) (d) Not aware of MF ( )
11. Do you think Mutual Fund is safe for public?
(a) Yes ( ) (b) No ( )
12. Do you know about SBI Bank as promoter mutual fund?
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MF

EWCM/DV/DR Page 114

(a) Yes ( ) (b) No ( )
13. How will you rate SBI Bank as a catalytic agent of Mutual Fund Industry?
(a) Excellent ( ) (b) Good ( )
(c) Average ( ) (d) Below Average ( )

14. Your opinion and suggestion regarding Mutual Fund segment of SBI Bank.

SBI-
MF

EWCM/DV/DR Page 115






















SBI-
MF

EWCM/DV/DR Page 116