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Introduction:
SBI Mutual Fund is currently amongst the Top 10 in terms of assets. Search

1
 However, its success in terms of garnering assets is simply because of
tronthe sensational run of a few schemes which helped tremendously in
bringing in the moolah. The AMC was initially known for its closed-end
funds. In 1994, it came up with its first open-ended scheme, Magnum
Global. Later its open-ended offerings made their mark and aggressive
fund management during bull runs under Sandip Sabharwal served it
well. It was the performance of three equity funds — Magnum Taxgain,
Magnum Contra and Magnum Global, that resulted in investors’
changing their perception of this fund house. Amongst the hybrid
category, Magnum Balanced was a great performer. As these funds had
a sensational run their assets grew multi-fold leading to a rise in the
AUM.
Unfortunately, the good times did not last for long. After Sabharwal quit
in November 2005, the funds continued to rally for a short while. In 2007
and 2008, they began to falter. They were not topping the charts in the
2007 rally and fell hard in the 2008 downturn. When Navneet Munot took
over as CIO end-2008, not only did he have a faltering portfolio but even
a global crisis that took its toll on the Indian market. To add to it, the size
of the funds had increased considerably which made it difficult to
reproduce the returns when the assets were less. This was all the more
vital since the fund house was always known to tilt towards mid caps
where a smaller asset base helps. Though Munot worked hard in putting
process in place, the 2009 returns were not impressive enough.
Performance takes its toll
Why have the funds been faltering? On October 9, 2010, a meeting was
apparently held at the head office of SBI Mutual Fund where fund
managers were asked if they had been leaking information to the press
on the going-ons inside the organization. The trigger was a report in an
economic daily which implied that SBI Mutual Fund is going through a
rough patch with its foreign partner. Though the fund house denied that
there was any truth to the report and a consequent meeting, the rumours
are not quenched. Even though the public sector bank promoted AMC
has been in partnership with a French entity for years, there still appears
to be a clash of working styles. The European player has apparently laid
down a list of tough rules on how fund managers should deploy their
funds, stock selecting parameters, limits on exposure and other filters,
which restrict the fund managers to a large extent. Société Générale
Asset Management has also expressed displeasure at the dismal
performance of the schemes. To make matters worse is the so-called
“lack of unity” in the investment team.
All these, if true, could be contributing factors on why the equity
performance has been hindered. However, the senior management at
the fund house rubbishes every single one of these claims, puts it down
to baseless rumors and bad mouthing and claims that both partners are
working in close co-ordination with each other. In other words, implying
that there is a whole lot of smoke with no fire! But what the management
cannot wish away is the poor performance. Numbers do not lie and in
this case, they have disappointed.
Which begs an answer to the question: Is poor performance resulting in
the lack of AUM growth? Difficult to say. Take for instance, inflows in the
equity linked savings scheme (ELSS) category. “Net sales in ELSS last
year were Rs 1,554 crore, out of which Rs 633 crore was garnered by
SBI Mutual Fund, which is around 41 per cent of the new money coming
into tax-saving schemes,” says Srinivas Jain, Chief Marketing Officer.
“This seems like more than fair share in a segment which is fairly
competitive and has a wide choice.”
Point noted. But even if bad performance did not have a disastrous effect on
inflows, there’s no denying that inflows could have been even better had the
funds continued on their winning streak. Currently, what is working in SBI
Mutual Fund’s favour is the perception of performance and great branding.
Thanks to earlier performance which has led to top-of-the-mind recall for a lot

2
 of their funds, it is perceived performance that continues to play a sg role.
Mutual funds are funds that pool the money of
several investors to invest in equity or debt
markets. Mutual Funds could be Equity funds,
Debt funds or balanced funds.
Advantages of Investing into a Mutual Fund

The reason that mutual funds are so popular is

that they offer the ability to easily invest in
increasingly more complicated financial
markets. A large part of the success of mutual
funds is also the advantages they offer in terms
of diversification, professional management and
liquidity.
 Flexibilty - Mutual Fund investments also offers you a lot of flexibility with features such as
systematic investment plans, systematic withdrawal plans & dividend reinvestment.
 Affordability - They are available in units so this makes it very affordable. Because of the
large corpus, even a small investor can benefit from its investment strategy.
 Liquidity - In open ended schemes, you have the option of withdrawing or redeeming your
money at any point of time at the current NAV
 Diversification - Risk is lowered with Mutual Funds as they invest across different
industries & stocks.
 Professional Management - Expert Fund Managers of the Mutual Fund analyse all
options based on experience & research
 Potential of return - The fund managers who take care of your Mutual Fund have access
to information and statistics from leading economists and analysts around the world.
Because of this, they are in a better position than individual investors to identify
opportunities for your investments to flourish.
 Low Costs - The benefits of scale in brokerage, custodial and other fees translate into
lower costs for investors.
 Regulated for investor protection - The Mutual Funds sector is regulated to safeguard
the investor's interests.
Funds Performance at a Glance

The analysed funds are presented in the form

of fact sheets from the bank which are updated
on a monthly basis. Please click on a link below
to view a sample.
 Equity Funds
 Debt Funds
Invest Now
You can now buy and sell Mutual Funds online
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Number of Pages of Project Report: 74

Package Includes: Project Report
Project Format: Document (.doc)
Table of Contents of Project Report:
EXECUTIVE SUMMARY

2
 CHAPTER 1: INTRODUCTION
CHAPTER 2: LITERATURE REVIEW
CHAPTER 3: MUTUAL FUNDS IN INDIA
CHAPTER 4: SBI MUTUAL FUND
CHAPTER 5: COMPANY PROFILE
CHAPTER 6: RESEARCH METHODOLOGY
DATA SOURCE
METHOD OF DATA COLLECTION
LIMITATIONS
SECONDARY DATA ANALYSIS
HYPOTHESIS
CHAPTER 7: PRIMARY DATA ANALYSIS
FINDINGS
RECOMMENDATIONS
CONCLUSIONS
REFERENCES
APPENDIX: QUESTIONNAIRE
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