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OBJECTIVES OF THE STUDY

The objectives of this research are as follows:


 To compare the performance of midcap mutual funds of competitor companies with
SBI midcap mutual fund.
 To know the best among the funds so compared and to find out the position of SBI
midcap mutual fund among the funds so compared.
 To know the customer preference towards the compared mutual funds.
 To recommend suggestions for improvements to SBI mutual fund company for its
further growth in the mutual fund industry.

RESEARCH DESIGN
According to Clifford Woody, “research comprises defining and redefining
problems, formulating hypothesis or suggested solutions; collecting, organizing and
evaluating data; making deductions and reaching conclusions; and at last carefully
testing the conclusions to determine whether they fit the formulating hypothesis.
This research is divided in two parts:
• Performance comparison of madcap mutual funds through secondary data based
on certain parameters;
• An exploratory research based on a survey of the concerning literature. A sample
survey was conducting with the help of Scheduling Method of collecting data i.e.
personally the enumerator visited and got the questionnaires filled from the respondents.
The enumerator in this method helps the respondents in recording their answers to
various questions in the said schedules.
RESEARCH PROBLEM

The main problem this research is to compare and analyse the performance of midcap
mutual funds of competitor firms with SBI midcap fund.

SCOPE OF THE STUDY

The scope of this study is to provide an insight into concept of mutual funds and the mutual
fund industry. It aims to provide a complete knowledge on schemes of competitor funds in
the midcap mutual funds category and their comparison with SBI along with customer
perception about the same.

SOURCES OF DATA

There are two types od data viz. primary and secondary. The primary data are those which
are collected afresh and for the first time, and thus happen to be original in character.
The secondary data, on the other hand, are those which have already been collected by
someone else and which have already been passed through the statistical process.
For this research report, primary data was collected and there was no bias on the part of the
enumerator while selecting the sample.
Secondary data was also used that is internet, brochures of firms, magazines and newspapers.
SAMPLE SIZE
For this research, in part one, a sample size of 10 mutual fund companies including
SBI mutual fund was taken out of the population which was the whole mutual fund
industry in India
For the second part, a sample size of 100 respondents was taken out of the total
investors in who invest in midcap mutual funds in Indian mutual fund companies.

SAMPLE AREA
The sample area was Chandigarh and involved respondents coming in SBI Bank,
main branch, Sector 17, Chandigarh and the offices of mutual fund companies in
Chandigarh only.

STATISTICAL TOOLS USED

The various statistical tool used were standard deviation, data distribution tables,
graphs and pie charts. Apart from this statistical tools used for mutual funds
comparison are:

 PRICE TO EANRNINGS RATIO:


P/E (price-to-earnings ratio) tells us how much investors are willing to pay
for one rupee of that company’s earnings.
LIMITATIONS OF THE STUDY

Following were the limitations of the study:


•Time was limited.
•The sample size of 100 is very small and more than that could not be possible.
•The study was only based on the survey of respondents in CHANDIGARH and no other
area could be undertaken for the survey due to lack of transport and time.
•This research is based on NAV (Net Asset Value) figures as on 8th July, 22nd July and 5th
August only; which changes daily.
•Only 10 companies could be compared in order to avoid complexity of data.
SBI MAGNUM MIDCAP FUND
• Open-ended/Growth fund
• Date of Inception: April 15, 2005
• OBJECTIVE:
To provide investors with opportunities for long-term growth in capital along with the liquidity of open-
ended scheme by investing predominantly in a well diversified basket of equity stocks of Midcap companies.
Midcap companies are those companies whose market capitalization at the time of investment is lower than
the last stock in the S&P CNX Nifty Index less 20% (upper range) and above Rs.200 crore.
FUND MANAGER: Mr. Vivek Pandey
• Asset Allocation:
Instrument % of Portfolio of Plan A & B Risk Profile
Equity and equity related instruments outside Not more than 10% High
the range of Rs. 200 crores - Rs. 2000 crores
High

Equities and equity related instruments the within 65% – 100% High
range of Rs. 200 crores – Rs. 2000 crores +
(midcap companies)

Foreign Securities/ADRs/GDRs 0% - 10% High


Fixed/Floating Rate Debt instruments 0% - 30% Medium
including derivatives instruments including
derivatives
Returns Benchmark: BSE 100
RETURNS as on 31st March 2009

FUND NAME 1 Year 3 Years 5 Years Since Inception

Magnum Midcap Returns -59.56% -19.36% N.A. -0.15%


(%)
BSE 100 Returns -44.92% -10.48% N.A. 3.94%

NAV RETURN % as on 31st March 2009


10.00%
0.00%
-10.00%
-20.00%
-30.00%
-40.00%
-50.00%
-60.00%
1Year 3Years 5Years Since
Inception

MagnumMidcapReturns(%) BSE100Returns
Entry Load: N.A.
Exit Load:
Investments below Rs. 5 crore, exited before 3 years from the date of allotment - 1% * Investments below Rs. 5
crore, exited on or after 3 years from the date of allotment - NIL * Investments above Rs. 5 crore - NIL

SIP:
Rs 500/month - 12 months, Rs 1000/month - 6months, Rs 1500/quarter - 12 months
SWP
A minimum of Rs. 500 can be withdrawn every month or quarter by issuing advance instructions to the
Registrars at any time.

FUND STYLE:
GROWTH BLEND VALUE

LARGE MEDIUM SMALL


ON THE BASIS OF NAV ( NET ASSET VALUE)

N A V C O M P A R IS O N

700
600
500
N A V a s o n 2 2 t h J u ly 2 0 0 9 ( in R s . )
400
NAV (Rs.)

N A V a s o n 8 t h J u ly 2 0 0 9 (in R s . )
300
N A V a s o n 5 t h A u g 2 0 0 9 (in R s . )
200
100
0

UTI Mid
Cap-G
Prima-G
Franklin
BSL Mid

ICICI Pru
Equity-G
India
Cap-G

STAR-G
HSBC

Emerging

Growth-G
Reliance
Midcap-G

S.M.I.L.E.
Magnum

Sundaram

Sundaram
Leaders-G
Emerging

Paribas

Paribas
Select
BNP

BNP
JM

FUND NAM E
H IG H A N D L O W N A V

40 0
35 0
30 0
VALUE (Rs.)

25 0
20 0
15 0
10 0
50
0
B S L M id F ra n k lin HS BC IC IC I Pru JM M ag n u m R eli an ce S u n d aram S u n d aram U T I M id
C a p -G In d i a Prim a - E q u ity-G E m e rg in g E m erg in g M id ca p -G G ro w th -G B N P Pa rib asB N P Parib as C a p -G
G S T A R -G L ea d ers-G S .M .I.L .E . S e le ct
R eg -G M i d ca p
R e g -G
FUND NAM E

52 W eek s H ig h 5 2 W ee k s L o w

INTERPRETATION:
• Reliance Growth has the highest NAV i.e the Net Asset Value even in the 52 weeks comparison and the last month’s comparison and is at
number one.
• Franklin India Prima Fund is at second.
• Sundaram BNP Paribas Select Midcap Reg. is at third.
• HSBC equity at fourth position.
• Birla Sun Life Midcap Fund at fifth.
• Sundaram BNP Paribas S.M.I.L.E. Reg at sixth.
• ICICI Pru Emerging Star at seventh.
• UTI Midcap at eighth position.
• SBI Magnum Midcap at ninth and JM Emerging Leader at bottom.

But we can see growth in NAV of all funds over the selected period of comparison.
ON THE BASIS OF RETURN
1 Y e a r R e t u r n % C o m p a r is o n

60
40
20
0
-2 0 1 -Y e a r R e tu rn (% ) a s o n 5 th A u g 0 9
-4 0 1 -Y e a r R e t u rn (% ) a s o n 2 2 n d J u ly 0 9
HSBC
Equity
RETURN %

UTI Mid
Cap
Franklin
India
Prima

Reliance
Growth
Magnum
Midcap
Birla Sun
Life Mid

Emerging
Leaders
Cap

Emerging
ICICI
Prudential
JM

Sundaram

Sundaram
Paribas

Paribas
BNP

BNP
-6 0 1 -Y e a r R e t u rn (% ) a s o n 8 t h J u ly 0 9
-8 0
-1 0 0
-1 2 0
-1 4 0
FUND NAM E

INTERPRETATION:

•High increase in 1-year returns for Franklin India Prima Fund, HSBC Equity and Sundaram BNP Paribas
S.M.I.L.E.Reg.
•Constant increase in other funds.
3 Y e a r R e tu r n % C o m p a r is o n

30
20
10 3 -Y e a r R e t u rn (% ) a s o n 8 t h J u ly
0 3 -Y e a r R e tu rn (% ) a s o n 2 2 n d J u l
Return %

-1 0 3 -Y e a r R e tu rn (% ) a s o n 5 th A u g
HSBC
Equity

UTI Mid
Cap
India
Franklin
Prima

Growth
Reliance
Midcap
Magnum
Life Mid

-2 0
Birla Sun
Cap

ICICI
JM
Emerging
Leaders
Emerging
Prudential

Paribas
Paribas
Sundaram
Sundaram
BNP
BNP
-3 0
Fund Nam e

INTERPRETATION:

•Fall in Birla Sun Life Midcap, Franklin India Prima Fund after a sharp increase, HSBC Equity, ICICI PRU
Emerging Star, JM Emerging Leaders, Magnum Midcap, Reliance Growth and UTI Midcap.
•Increase in return of Sundaram (Both the funds).
INTERPRETATION:
•Increase in return of all the funds.
ON THE BASIS OF PORTFOLIO

P ric e to E arn in g s & P rice to B o o k V a lu e R atio

30
25
20 P /E Ratio
Value

15
10 P /B Ratio
5
0
B irla S un F rank lin HS B C ICICI JM M agnum Relianc e S undaramS undaram UTI M id
Life M id India E quity P rudential E m erging M idc ap G rowth B NP B NP Cap
Cap P rim a E m erging Leaders P aribas P aribas
S TA R S .M .I.L.E . S elec t
Reg M idc ap
Reg
F u n d Na m e

INTERPRETATION:
•Low P/E Ratio for UTI Mid Cap, JM Emerging Leaders which meant low investor expectations from these
funds.
•Average P/E Ratio for BSL Midcap, Franklin India Prima Fund, SBI Magnum Midcap, and Sundaram BNP
Paribas Select Midcap Reg.
•High P/E Ratio for the rest of the funds which means high investor expectations from them.
High P/B Ratio for HSBC Equity, Reliance Growth and Franklin India Prima fund which mean good
overall performance of these companies.
Low P/B Ratio for JM Emerging Leaders, Magnum Midcap, UTI Midcap and Both SUNDARAM
Funds which means stock undervaluation and poor overall performance of the companies.
Medium P/B Ratio for the remaining funds.
T u rn o ve r(% )

120
100
80
Value %

60 T u rn o ve r(% )
40
20
0
B irla S u nF ra n k lin H S B C IC IC I JM M a g n u mR e lia n c Se u n d a raSmu n d a ra mU T I M id
L ife M id In d ia E q u it y P ru d e n t iaE lm e rg in gM id c a p G ro w t h B N P BNP C ap
Cap P rim a E m e rg in gL e a d e rs P a rib a s P a rib a s
S TA R S . M . I. L . E S. e le c t
R e g M id c a p
R eg
Fund Na m e

INTERPRETATION:

•HIGHEST TURNOVER for Sundaram (both funds), Reliance Growth.


•AVERAGE TURNOVER for Magnum Midcap, Franklin India Prima, ICICI Pru Emerging Star HSBC
Equity and BSL Midcap.
•LOWEST for remaining funds.
•Reliance Growth has highest share of Assets flowed by Sundaram S.M.I.L.E and ICICI Prudential Emerging
Star respectively.
•Highest market capitalization of HSBC Equity followed by Reliance Growth.
Birla Sun Life Mid Cap
Assets (Rs Cr.)

Franklin India Prima

HSBC Equity

ICICI Prudential
Emerging STAR
JMEmerging Leaders

Magnum Midcap

Reliance Growth

Sundaram BNP Paribas


S.M.I.L.E. Reg
Sundaram BNP Paribas
Select Midcap Reg
UTI Mid Cap

INTERPRETATION:

•Reliance Growth has highest share of Assets flowed by Sundaram S.M.I.L.E and ICICI Prudential Emerging
Star respectively.
Market Capitalization (Rs. Cr.)
Birla Sun Life Mid Cap

Franklin India Prima

HSBC Equity

ICICI Prudential
Emerging STAR
JM Emerging Leaders

Magnum Midcap

Reliance Growth

Sundaram BNP Paribas


S.M.I.L.E. Reg
Sundaram BNP Paribas
Select Midcap Reg
UTI Mid Cap

INTERPRETATION:

Highest market capitalization of HSBC Equity followed by Reliance Growth.


VALUE

0
10
20
30
40
50
60
Birla Sun
Life Mid
Cap
Franklin
India
Prima

HSBC
Equity
ICICI
Prudential
Emerging
STAR
JM
Emerging
Leaders
Magnum
Midcap

FUND NAM E
S t a n d a rd D e via t io n

Reliance
Growth
S ta n d a r d D e v i a ti o n Sundaram
BNP
Paribas
S.M.I.L.E.
ON THE BASIS OF RISK AND VOLATILITY

Sundaram
BNP
Paribas
Select
UTI Mid
Cap
S h a rp e R a tio

0 .6
0 .5 0 .4 8
0 .4 0 . 4 2 0 . 4 1 0 .4
0 .3 0 .2 9
0 .2 0 .1 8 S h a rp e R a t io
VALUE

0 .1 0 . 1 3 0 . 1 3 0 .1
0
- 0 . 1 B i r l a S Fu nr a n k l i Hn S B C IC IC I J M- 0 . 1M1 a g n u Rm e l i a n Sc eu n d a Sr aumn d a r Ua mT I M i d
-0 .2
L i fe M Ini dd i a P r Ei mq au i t yP r u d e nEt ima l e r g iMn gi d c a pG r o w t h B N P B N P C a p
Cap E m e r g iLn eg a d e r s P a r i b a Ps a r i b a s
S TA R S . M . I. L S. Ee . l e c t
R e g M id c a p
FUND NAM E Reg

INTERPRETATION:

Birla Sun Life, HSBC Equity, Reliance Growth, Sundaram S.M.I.L.E and Sundaram Midcap have a better
risk- adjusted performance as compared to the other funds.
BETA COMPARISON

1.46 1.36
1.13 1.06 1.21 1.18 1.1 1.15
1.47 1.36 1.02
0.83 1.2 1.18 1.09
1.13 1.05 1.15 1.02
0.83 1.47 1.36
1.13 1.05 1.15 1.2 1.18 1.09
VALUE 1.02 Beta on 5th Aug 09
0.83
Beta on 22nd July 09
Beta on 8th July 09
Beta on 8th July 09 Beta on 22nd July 09
Beta on 5th Aug 09

UTI Mid Cap


JM Emerging
Emerging STAR
ICICI Prudential
Birla Sun Life Mid

HSBC Equity

Reliance Growth
Magnum Midcap
Franklin India Prima

Reg BNP
Paribas S.M.I.L.E.

Paribas Select
Sundaram BNP

Midcap Reg
Leaders

Sundaram
Cap

FUND NAME

INTERPRETATION:

•The beta chart shows that JM Emerging Leaders is the most volatile fund as compared to the market whereas
HSBC Equity is the least volatile fund as compared to the market.
A lp h a C o m p a r is o n

10
5
0
-5 B irla S u Fn ra n k lin H S B C IC IC I JM M a g n u mR e lia n c Se u n d a raSmu n d a ra Um T I M id
L ife M id In d ia E q u it y P ru d e n t Eia ml e rg in Mg id c a p G ro w t h B N P BNP Cap A lp h a
VALUE

-1 0 C a p P rim a E m e rg in Lg e a d e rs P a rib a s P a rib a s


-1 5 S TA R S . M . I. L . ES. e le c t
R e g M id c a p
-2 0
Reg
-2 5
FUND NAM E

INTERPRETATION:

• Positive Alpha value for BSL, HSBC, Reliance & Sundaram S.M.I.L.E.which shows that they have
outperformed as compared to their respective benchmarks.
• Negative Alpha value for the rest which shows that they have not been able to outperform their
respective benchmarks.
R -S q u a re d C o m p a ris o n

1
0.95
0 .9
VALUE

0.85
0 .8
0.75
Equity
HSBC

UTI Mid
Reliance
Franklin
Birla Sun

Magnum

Growth
Emerging
Prudential
Prima

Midcap
Life Mid

Emerging

Sundaram

Sundaram
India

Leaders

Cap
Paribas

Paribas
ICICI
Cap

BNP

BNP
JM FUND NAM E

R -S q u a re d

INTERPRETATION:

The performance of all the funds have been in line with their respective benchmark indexes.
NOTE: For the terms used like Sharpe Ratio, Alpha, Beta, R-Squared refer the chapter 8 on
abbreviations.
INVESTMENT DETAILS

Fund Name Expense Ratio Front-End Minimum Initial Back-End


% Load % Investment (Rs.) Load%

Birla Sun Life Mid Cap 2.32 0 5000 0

Franklin India Prima 2.16 0 5000 0

HSBC Equity 1.98 0 10000 0

ICICI Prudential Emerging STAR 2.32 0 5000 0

JM Emerging Leaders 2.39 2.25 5000 0

Magnum Midcap 2.5 0 5000 0

Reliance Growth 1.82 0 5000 0

Sundaram BNP Paribas S.M.I.L.E. 2.4 2.25 5000 0


Reg

Sundaram BNP Paribas Select 1.99 2.25 5000 0


Midcap Reg

UTI Mid Cap 2.34 0 5000 0