ABSTRACT

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is invested by the fund manager in different types of securities depending upon the objective of the scheme. These could range from shares to debentures to money market instruments. The income earned through these investments and the capital appreciations realized by the scheme are shared by its unit holders in proportion to the number of units owned by them (pro rata . Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified! professionally managed portfolio at a relatively low cost. Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual Funds. "ach Mutual Fund scheme has a defined investment objective and strategy. Mutual Funds now represent perhaps most appropriate investment opportunity for most investors. As financial markets become more sophisticated and comple#! investors need a financial intermediary who provides the re$uired knowledge and professional e#pertise on successful investing. As the investor always try to ma#imize the returns and minimize the risk. Mutual fund satisfies these re$uirements by providing attractive returns with affordable risks. The basic purpose of the study is to give broad idea on Mutual Funds and analyze various schemes to highlight the diversified investment that Mutual Fund offers to its investors. Through this study one can understand how to invest in Mutual Funds and turn the raw investment into ripen fruits by taking wise decisions! taking the risk factors into account. The %tudy covers the basic meaning! concept! structure and the organization of the Mutual Funds. The %tudy is restricted to e#plain only the returns provided by the Mutual Funds from various schemes.

SBI Magnum Sectorial Fund Analysis

INTRODUCTION
A mutual fund is a scheme in which several people invest their money for a common financial cause. The collected money invests in the capital market and the money! which they earned! is divided based on the number of units! which they hold. The mutual fund industry started in &ndia in a small way with the 'T& Act creating what was effectively a small savings division within the ()&. *ver a period of +, years this grew fairly successfully and gave investors a good return! and therefore in -./.! as the ne#t logical step! public sector banks and financial institutions were allowed to float mutual funds and their success emboldened the government to allow the private sector to foray into this area. The advantages of mutual fund are professional management! diversification! economies of scale! simplicity! and li$uidity. The disadvantages of mutual fund are high costs! over0diversification! possible ta# conse$uences! and the inability of management to guarantee a superior return. The biggest problems with mutual funds are their costs and fees it include 1urchase fee! (edemption fee! "#change fee! Management fee! Account fee 2 Transaction 3osts. There are some loads which add to the cost of mutual fund. 4oad is a type of commission depending on the type of funds. Mutual funds are easy to buy and sell. 5ou can either buy them directly from the fund company or through a third party. )efore investing in any funds one should consider some factor like objective! risk! Fund Manager6s and scheme track record! 3ost factor etc. There are many! many types of mutual funds. 5ou can classify funds based %tructure (open0ended 2 close0ended ! 7ature (e$uity! debt! balanced ! &nvestment objective (growth! income! money market etc. A code of conduct and registration structure for mutual fund intermediaries! which were subse$uently mandated by %")&. &n addition! this year AMF& was involved in a number of developments and enhancements to the regulatory framework. The most important trend in the mutual fund industry is the aggressive e#pansion of the foreign owned mutual fund companies and the decline of the companies floated by nationalized banks and smaller private sector players.

SBI Magnum Sectorial Fund Analysis

NEED OF THE STUDY

The primary objective of doing this project is to know about mutual funds and its functioning with special reference to %)& Mutual Funds. This project helps us to know in detail about mutual fund industry right from its inception stage! growth and future prospects. &t also helps in understanding different schemes of mutual funds. The study is focused on %)& mutual funds and their schemes like e$uity! income! balance as well as the returns associated with those schemes. The project study tries to ascertain the asset allocation! entry load! e#it load! associated with the mutual funds. 'ltimately this would help in understanding the benefits of mutual funds to investors.

SBI Magnum Sectorial Fund Analysis

OBJECTIVES OF THE STUDY

a To know about the concept of mutual funds! their functioning! advantages and disadvantages! and organization of mutual funds. b c To analyze different sectoral funds being offered by %)& MA87'M mutual fund. To compare mutual funds as an investment alternative with other investment avenues available. d e To create awareness about Mutual Funds to the investors. To draw conclusions and to find out the attractiveness of mutual funds.

SBI Magnum Sectorial Fund Analysis

SCOPE OF THE STUDY

((+ The %tudy presents basic concept and trends in the Mutual fund &ndustry. The %tudy enables a fresh investor to understand easily the various benefits offered by Mutual Funds and their working in the Market. (9 : (; The %tudy gives a brief idea on the *pen0 "nded "$uity 8rowth %chemes of %)&. (, At the end of the study! one can conclude what type of investments would be ideal with reference to the risk taking abilities of the investors and which type of investments would suit their financial needs and goals. The %tudy provides a clear idea on growth of Mutual Funds from past to the present scenario and its scope in the future.

SBI Magnum Sectorial Fund Analysis

METHODOLOGY
All information related to the topic needs to be carefully scrutinized to avoid the risk of biased analysis. <aving once identified which information is relevant and need to be collected! we will have to define how this will be done. The Method employed in the investigation depends on the purpose and scope of the study. Research Design (esearch design is some statement or specification of procedures for collecting and analyzing the information re$uired for the solution of some specific problem. <ere! the e#ploratory research is used as investigation and is mainly concerned with determining the trends and returns in Mutual Funds and )ank returns. Da!a C"##ec!i"n Me!h"$s The key for creating useful system is selectivity in collection of data and linking that selectivity to the analysis and decision issue of the action to be taken. The accuracy of collected data is of great significance for drawing correct and valid conclusions from the research S"%rces "& In&"r'a!i"n =ata available in marketing research are either primary or secondary. 1rimary =ata is not included in this study! only secondary data is taken in to account since! it is a comparative analysis.

SBI Magnum Sectorial Fund Analysis

Sec"n$ar( Da!a %econdary data can be defined as 0 >data collected by some one else for purpose other than solving the problem being investigated?. %econdary data is collected from e#ternal sources which include information from published material of %")& and some of the information is collected online. The data sources also include various books! magazines! newspapers! websites etc.

LIMITATIONS

The data that is considered for the 3omparative analysis of various Mutual Funds returns of *pen0"nded "$uity 8rowth Fund are only for a short period of one year and performance during this period may not be same in future. As the project period is limited! the long0term data of Mutual Funds are not taken into consideration in analysis section. Mutual Funds of only %)& funds are taken into account for analyzing their performance! because the time duration of the project is short and limited. The performance of these funds since inception are not considered. This study on Mutual Funds is restricted to *pen0"nded "$uity %chemes only. The core details are untouched. The data taken into account for analysis is very general. 3onfidential data is ignored as it is highly sensitive. As a result the information presented in the research report is limited.

SBI Magnum Sectorial Fund Analysis