RESEARCH PROJECT REPORT

ON
STUDY OF SBI MUTUAL FUND
SUBMITTED FOR THE PARTIAL FULFILLMENT OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
of
PUNJAB TECHNICAL UNIVERSITY
By
MANPREET KAUR
1407104
MBA III SEMESTER
UNDER THE SUPERVISION OF
Ms. JASMINAL

Chandigarh Business School Administration, Landran, Mohali

2014-2016

INTRODUCTION

MUTUAL FUNDS

Concept of Mutual Fund

Mutual fund is a vehicle to mobilize moneys from investors, to invest in different markets
and securities, in line with the investment objectives agreed upon, between the mutual fund
and the investors.

The first introduction of a mutual fund in India occurred in 1963, when the Government of
India launched Unit Trust of India (UTI). Until 1987, UTI enjoyed a monopoly in the Indian
mutual fund market. Then a host of other government-controlled Indian financial companies
came up with their own funds. These included State Bank of India, Canara Bank, and Punjab
National Bank. This market was made open to private players in 1993, as a result of the
historic constitutional amendments brought forward by the then Congress-led government
under the existing regime of Liberalization, Privatization and Globalization (LPG). The
first private sector fund to operate in India was Kothari Pioneer, which later merged
with Franklin Templeton. In 1996, SEBI formulated the Mutual Fund Regulation which is a
comprehensive regulatory framework.

Role of Mutual Funds

Mutual funds perform different roles for different constituencies.
Their primary role is to assist investors in earning an income or building their wealth, by
participating in the opportunities available in various securities and markets.
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It is possible for mutual funds to structure a scheme for any kind of investment objective.
Thus, the mutual fund structure, through its various schemes, makes it possible to tap a large
corpus of money from diverse investors.
Therefore, the mutual fund offers schemes. In the industry, the words fund and scheme are
used inter-changeably. Various categories of schemes are called funds. In order to ensure
consistency with what is experienced in the market, this Workbook goes by the industry
practice. However, wherever a difference is required to be drawn, the scheme offering entity
is referred to as mutual fund or the fund.
The money that is raised from investors, ultimately benefits governments, companies or other
entities, directly or indirectly, to raise moneys to invest in various projects or pay for various
expenses.
As a large investor, the mutual funds can keep a check on the operations of the investee
company, and their corporate governance and ethical standards.
The projects that are facilitated through such financing, offer employment to people; the
income they earn helps the employees buy goods and services offered by other companies,
thus supporting projects of these goods and services companies. Thus, overall economic
development is promoted.
The mutual fund industry itself, offers livelihood to a large number of employees of mutual
funds, distributors, registrars and various other service providers.
Higher employment, income and output in the economy boost the revenue collection of the
government through taxes and other means. When these are spent prudently, it promotes
further economic development and nation building.
Mutual funds can also act as a market stabilizer, in countering large inflows or outflows from
foreign investors. Mutual funds are therefore viewed as a key participant in the capital market
of any economy.

COMPANY PROFILE:
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Historical Evolution:
The State Bank of India lie in the first decade of the 19th century, when the Bank of Calcutta,
later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of Bengal was
one of three Presidency banks, the other two being the Bank of Bombay (incorporated on 15
April 1840) and the Bank of Madras (incorporated on 1 July 1843). All three Presidency
banks were incorporated as joint stock companies and were the result of royal charters. These
three banks received the exclusive right to issue paper currency till 1861 when, with the
Paper Currency Act, the right was taken over by the Government of India. The Presidency
banks amalgamated on 27 January 1921, and the re-organised banking entity took as its
name Imperial Bank of India. The Imperial Bank of India remained a joint stock company but
without Government participation.
In 1959, the government passed the State Bank of India (Subsidiary Banks) Act. This made
SBI subsidiaries of eight that had belonged to princely states prior to their nationalization and
operatonal take-over between September 1959 and October 1960, which made eight state
banks associates of SBI.
SBI has acquired local banks in rescues. There has been a proposal to merge all the associate
banks into SBI to create a "mega bank" and streamline the group's operations.

Our Identity
With 25 years of rich experience in fund management, we at SBI Funds Management Pvt.
Ltd. bring forward our expertise by consistently delivering value to our investors. We have a
strong and proud lineage that traces back to the State Bank of India (SBI) - India's largest
bank. We are a Joint Venture between SBI and AMUNDI (France), one of the world's leading
fund management companies.
With our network of over 222 points of acceptance across India, we deliver value and nurture
the trust of our vast and varied family of investors.
Excellence has no substitute. And to ensure excellence right from the first stage of product
development to the post-investment stage, we are ably guided by our philosophy of growth
through innovation and our stable investment policies. This dedication is what helps our
customers achieve their financial objectives.

Literature Review:

Literature on mutual fund performance evaluation is enormous. A few research studies that
have influenced the preparation of this paper substantially are discussed in this section.
Sharpe,
William F. (1966)
Suggested a measure for the evaluation of portfolio performance.Drawing on
results obtained in the field of portfolio analysis, economist Jack L.
Treynor
Has suggested a new predictor of mutual fund performance, one that differs from virtually
all those used previously by incorporating the volatility of a fund's return in a
simple yet meaningfulmanner.
Michael C.Jensen (1967)
Derived a risk-adjusted measure of portfolio performance (Jensen s alpha) that
estimates how much a managers forecasting ability contributes to funds returns. The study
used 269 open-ended schemes (out of total schemes of 433) for computing relative
performance index. Then after excluding funds whose returns are less than risk-free returns,
58 schemes are finally used for further analysis. The results of performance measures
suggest that most of mutual fund schemes in the sample of 58were able to satisfy investors
expectations by giving excess returns over expected returns based on both premium for
systematic risk and total risk.
Selvarajan B.and Vadivalagan, G.(2012)
Over the few years Indian banking, attempts to integrate with the global banking has been
facing lots of hurdles in its way due to certain inherent weakness, despite its high sounding
claims and lofty achievements. In a developing country, banking is seen as an important
instrument of development, while with the demanding
Non-Performing Assets(NPAs), banks have become burden on the economy. Non-Performing
Assets are not merely non remunerative, but they add cost to the credit Management. The fear
of Non-Performing Assets permeates the psychology of bank managers in entertaining new
projects for credit expansion. Non-Performing Assets is not a dilemma facing exclusively the
bankers; it is in fact an all pervasive national scourge swaying the entire Indian economy.
Non Performing Asset is a sore throat of the Indian economy as a whole. Non Performing
Assets have affected the profitability, liquidity and competitive functioning of banks and
developmental of financial institutions and finally the psychology of the bankers in respect of
their disposition towards credit delivery and credit expansion. NPAs do not generate any
income for the banks, but at the same time banks are required to make provisions for such
NPAs from their current profits. Apart from internal and external complexities, increases in
NPAs directly affects banks' profitability sometimes even their existence.
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Paul Purnendu , Bose , Swapan and Dhalla, Rizwan S.(2011)

In this paper we attempt to measure the relative efficiency of Indian PSU banks on overall
financial performances. Since, the financial industry in a developing country like India is
undergoing through a very dynamic pace of restructuring, it is imperative for a bank to
continuously monitor their efficiency on Non-Performing Assets,
Capital Risk-Weighted Asset Ratio, Business per Employee, Return on Assetsand Profit per
Employee. Here, Non-Performing Assets is a negative financial indicator. To prove
empirically, we propose a framework to measure efficiency of Indian public sector banks.
Veera kumar, K.(2012)
The Indian banking sector has been facing serious problems of
Raising Non-Performing Assets (NPAs). Like a canker worm, NPAs have been eating the
banking industries from within, since nationalization of banks in 1969. NPAs have choked off
quantum of credit, restriction the recycling of funds and leads to asset-liability mismatches. It
also affected profitability, liquidity and solvency position of the Indian banking sector. One of
the major reasons for NPAs in the banking sector is the 'Direct Lending System' by the RBI
under social banking motto of the Government, under which scheduled commercial banks are
required to lend 40% of their total credit to priority sector.
The banks who have advanced to the priority sector and reached the target suffocated on
account of raising NPAs, since long. The priority sector NPAs have registered higher growth
both in percentage and in absolute terms year after year. The present paper is an attempt to
study the priority sector advances by the public, private and foreign bank group-wise, target
achieved by them and a comparative study on priority and non-priority sector NPAs over the
period of 10 years between 2001-02 and 2010-11. This paper also aims to find out the
categories of priority sector advances which contribute to the growth of total priority sector
NPAs during the period under study.

Objectives Of Study:

a). To know the value of mutual funds in India and their major aspects.
b). To identify the level of risk involved in investing in various equity diversified mutual fund
schemes.
c). To know the best mutual funds investment plan .

RESEARCH METHODOLOGY:
A research methodology defines what the activity of research is, how to proceed,
how to measure progress, and what constitutes success.

Type of research: Descriptive research

Type of data: Primary/Secondary
Data collection Method: Questionnaires , Discussion
Sampling size: 100
Sample units : Customers
Sampling Technique: Random sampling method

REFRENCES:
BOOKS
- The basics of investing by Gerald Krefetz.
- Tax guru by subash lakhotia
NEWSPAPER
Times of india
Hindustan times
Economic times
Tribune
Websites:
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www.sbimf.com
www.google.co.in
www.mutualfundsindia.com
www.utimf.com
www.moneycontrol.com