SESSION:2017-2020

PROJECT REPORT ON
A STUDY OF PERFORMANCE OF MUTUAL FUNDS OF SBI

END SEMESTER VI :DSE-3

SUBMITTED BY,

NAME : ankit kumar verma

CLASS : B.COM,ACCOUNTS(h)
REGISTRATION NO : MCR17810070
EXAM ROLL NO : 17MCRBC810070
CLASS ROLL NO : 335

SUBMITTED TO,

DR.KUMAR A.N. SHAHDEO

1
I would to express my special thanks of gratitude
to my teacher Dr. Kumar A. N.Sadheo , who gave
me a golden opportunity to do this wonderful
project Of DSE– 3 .
Who also helped me in completing my project . I come to
know about so many new things I am really thankful to
them .
Secondly I would also like to thank my parents and friends
who help me a lot in finalizing this project within the
limited time frame .

Ankit kumar verma

THANK YOU

2
 declARATION

We hereby declared that the project work entitled

“MUTUAL FUND OF SBI” in partial fulfillment of my
bachelor degree of commerce in accordance of my
commerce department with duly assigned project report
is completely accomplished…..

A special reference to SBI MUTUAL FUND PVT. LTD. to

“MARWARI COLLEGE RANCHI”, is record an original book
work done us under the guidance of “Dr. KUMAR
A.N.SHADEO”.

Ankit kumar verma

BACHELOR OF COMMERCE
3
 index

SI.no Contents Page

1 Introduction of the industry 5 to 13
2 Introduction of the organization 14 to 16
3 History of mutual funds 17 to 20
4 Concept of mutual funds 21 to 31
5 Types of mutual funds scheme 32 to 35
6 Merits and demerits of mutual funds 36 to 40
7 State bank of India (SBI) 41 to 46
8 SBI mutual funds 47 to 50
9 Competitor of SBI 51 to 52
10 Objectives and scope of study 53
11 Analysis of the data 54 to55
12 Research methodology 56
13 Bibliography 57
14 Observations and findings 58
15 Conclusions 59

4
 Introduction OF THE INDUSTRY

You usually purchase an item from a shopkeeper and the

shopkeeper purchases that item from the distributor.

Furthermore, this item reaches to the distributor from the

manufacturer. The manufacturer produced this item from the
raw materials available to him. This is how the industry
functions.
You usually purchase an item from a shopkeeper and
the shopkeeper purchases that item from the distributor.

Furthermore, this item reaches to the distributor from the

manufacturer. The manufacturer produced this item from the
raw materials available to him. This is how the industry
functions.

It is generally a group of organizations that are involved in

manufacturing and producing the part for the same type of
services and products. An introduction to industry is
incomplete without mentioning the above process.

5
Usually, industries are involved in the secondary activity of the
manufacturing of the goods. There are different types of
secondary activities that convert the raw materials into
products that give more value to the people.
Here, in this scenario, industry refers to the economic activities
that are related to the production of goods, extraction of
services, etc.
Thus, it can also be said that the industry is concerned with the
production of goods as in the case of steel, provision of
services in the case of tourism, and extraction of minerals in
the case of coal mining.

Classification of Industries
1. Raw material
 Agro-based industries: These industries use plants and
animal-based products as their raw materials. Examples,
food processing, vegetable oil, cotton textile, dairy
products, and leather industries.
 Mineral based industries: Mineral-based industries are
based on mining and use ‘mineral ore‘ as raw material.
These industries also provide to other industries. They
are used for heavy machinery and building materials.
 Marine-based industries: Marine-based industries use
raw materials from sea or ocean. Examples, fish oil.

6
  Forest-based industries: these industries use
raw materials from the forest like wood,the
industries connected with forest are
paper,pharmaceutical,etc

2.Size

Size of industries are measured by how much money is

invested, employee count and goods produced.
 Small-scale industries: Small-scale industries have
less capital and technology invested in them.
There is often manual labour noticed here.
Example, Basket weaving, pottery, and
handicrafts.
 Large-scale industries: Largescale industries are
the exact opposite of small-scale industries. Here
the capital invested is large and advanced
technology is in use here. Example, Automobiles
and Heavy Machinery.

3.Ownership

 Private sector: Private industries are businesses

that are owned and operated by an individual or

7
 group of individuals.
 Public sector: Public industries are owned and
managed by the government. Example,
Hindustan Aeronautics Limited (HAL)
 Joint sector industries: These industries are
jointly operated by the state and individuals.
 Example, Maruti Udyog.

 Cooperative sector industries: Cooperative

industries are operated by the suppliers,
producers or workers of raw
material.Example, Amul India.

8
Industrial Systems
Industrial systems are made up of input, processes, and
output. The input of raw materials, labour, land, power, and
other infrastructure. The process is the plan the manufacturer
has of how to turn raw materials into finished products of
value. And finally, the output is the end of the product from
which the income earned it.

Industrial Clusters
Industrial clusters occur when many industries are located
close to each other and share the benefits of their closeness.
Major industrial clusters in India are:

 Mumbai-Pune cluster
 Bangalore-Tamil Nadu region
 Hugli region
 Ahmedabad-Baroda region
 Chottanagpur industrial belt
 Vishakhapatnam-Guntur belt
 Gurgaon-Delhi-Meerut region
 Kollam-Thiruvananthapuram industrial clus

9
Distribution of Major Industries

As we learned how industries were classified according to raw

material, size, and ownership. Here we will learn the
distribution of some major industries, which are iron and steel
industry and

10
textile industry are the oldest industries that have had their role in
Indian industrialization. Information technology is an emerging
industry.
Iron and steel industries have their firm hold in countries like
Germany, USA, China, Japan, and Russia. While textile
industries are flourishing in India, Hong Kong, and South Korea.
The new emerging information technology has their
concentration in Silicon Valley of California and Banglore of
India.

Iron and Steel Industry

Iron and Steel industries are famously known as the feeders of

all the other industries. The products of these industries are used
as raw materials in other industries. As we learned the industrial
system, this industry comprises of various inputs, processes, and
outputs. The input includes raw material such as iron ore, labor,
capital, and other infrastructure. Iron ore is then converted into
steel by various processes like smelting and refining.

Finally, the output is steel. Steel and iron can be called as the
basic material needed in every other industry. No doubt, they
are the backbone of the modern industry. In a developing
country

11
like India, Iron and Steel industry has taken the advantage of the
cheap labor, raw material, and the ready market.

Textile Industry
Textile is a fabric that is woven from fibres. It takes raw
material like cotton or wool and the process called spinning
turns it into yarn that is later used to create the fabric. Fibres
can be natural or are man-made. Natural fibres are – cotton,
jute, linen, wool, and silk. Man-made fibres are – nylon, rayon,
and polyester.
The man has been wearing and using fabric since ancient
times. The textile industry is one of the oldest industry in the
world.
And until the industrial revolution, the textile industry used
wheels and looms to weave fibre. During the revolution,
power looms were introduced first in Britain.

After that, textile industry expanded in Mumbai because of its

warm, moist climate, facility of port for importing machinery
and exporting the output and above all the availability of cheap
labour. Some of the well known and highly demanded fibres are,
Muslins from Dhaka Chintzes from Masulipatnam and Calicos
of Calicut, Gold wrought cotton from Surat, Burhanpur, and
Vadodara.

12
Information Technology

Information technology deals with the storage, processing and

distribution of information. During the decade, the industry has
gained global attention due to a series of political,
technological and socioeconomic events. India is witnessing
the emergence of information technology hubs in Bangalore,
Mumbai, Hyderabad and Chennai.

The Silicon Valley and Bangalore both share many same

aspects in the development of Information technology such as
pleasant climate, skilled workforce, presence of high quality
educational, technological and scientific centers and access to
markets.

13
INTRODUCTION TO THE ORGANIZATION
SBI Mutual Fund is an asset management company
sponsored by State Bank of India. It was founded in 1987
with its corporate headquarters located in Mumbai, India.
SBI Funds Management Private Limited (SBIFMPL) has
been appointed as the Asset Management Company of
the SBI Mutual Fund. SBIFMPL is a joint venture between
the State Bank of India, an Indian public sector bank,
and Amundi, a European asset management
company.

SBI Mutual Fund

Type Private company

Industry Mutual Fund

Founded 1987

Headquarters Mumbai, India

Area served India

Key people Ashwani Bhatia

(CEO &
Managing
director) [1] Mr.
Denys de
Campigneulles
(Deputy CEO)
14
 (Executive
Director & Chief
Investment
Officer)
D. P. Singh
(Executive
Director & Chief
Marketing Officer)
Vinaya Datar
(Head
Compliance &
Products Mutual Fund

AUM Rs. 3,07,534

crore ($44.87
billion) (April -
June 2019)
Number of 1000-1200

Website sbimf.com

History
The mutual fund industry in India originally began in
1963 with the Unit Trust of India (UTI) as a Government
of India and the Reserve Bank of India initiative.
Launched in
1987, SBI Mutual Fund became the first non-UTI mutual fund
in India. In July 2004, State Bank of India decided to divest 37
per cent of its holding in its mutual fund arm, SBI Funds
Management Pvt Ltd, to Societe Generale Asset Management,
for an amount in excess of $35 million. Post-divestment,

15
State Bank of India's stake in the mutual fund arm came
down to 67%. In May 2011, Amundi picked up 37% stake in
SBI Funds Management, that was held by Societe Generale
Asset Management, as part of a global move to merge its
asset management business with Crédit Agricole. SBI Funds
Management Private Limited (SBIFMPL) has been
appointed as the Asset Management Company of the SBI
Mutual Fund.
SBIFMPL is a joint venture between the State Bank of
India, an Indian public sector bank, and Amundi, a
European asset management company.
As of September, 2019, the fund house claims to serve
5,809,315 unique investors through approximately 212
branches PAN India.

16
History of mutual fund

The mutual fund industry in India started in 1963 with the

formation of Unit Trust of India, at the initiative of the
Government of India and Reserve Bank of India. The
history of mutual funds in India can be broadly divided into
four distinct phases
First Phase - 1964-1987
Unit Trust of India (UTI) was established in 1963 by an
Act of Parliament. It was set up by the Reserve Bank of
India and functioned under the Regulatory and
administrative control of the Reserve Bank of India. In
1978 UTI was de- linked from the RBI and the Industrial
Development Bank of India (IDBI) took over the
regulatory and administrative control in place of RBI. The
first scheme launched by UTI was Unit Scheme 1964. At
the end of 1988 UTI had Rs.
6,700 crores of assets under management.
Second Phase - 1987-1993 (Entry of Public Sector
Funds)
1987 marked the entry of non-UTI, public sector mutual
funds set up by public sector banks and Life Insurance
Corporation of India (LIC) and General Insurance
Corporation of India (GIC). SBI Mutual Fund was the first
non-UTI Mutual Fund established in June 1987 followed
by Canbank Mutual Fund (Dec 87), Punjab National Bank
Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov
89), Bank of India (Jun 90), Bank of Baroda Mutual Fund
(Oct 92). LIC established its mutual fund in June 1989
17
while GIC had set up its mutual fund in December 1990.
At the end of 1993, the mutual fund industry had assets
under management of Rs. 47,004 crores.

18
Third Phase - 1993-2003 (Entry of Private Sector
Funds)
With the entry of private sector funds in 1993, a new era
started in the Indian mutual fund industry, giving the
Indian investors a wider choice of fund families. Also,
1993 was the year in which the first Mutual Fund
Regulations came into being, under which all mutual
funds, except UTI were to be registered and governed.
The erstwhile Kothari Pioneer (now merged with Franklin
Templeton) was the first private sector mutual fund
registered in July 1993.
The 1993 SEBI (Mutual Fund) Regulations were
substituted by a more comprehensive and revised Mutual
Fund Regulations in 1996. The industry now functions
under the SEBI (Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing,
with many foreign mutual funds setting up funds in India
and also the industry has witnessed several mergers and
acquisitions. As at the end of January 2003, there were
33 mutual funds with total assets of Rs. 1,21,805 crores.
The Unit Trust of India with Rs. 44,541 crores of assets
under management was way ahead of other mutual
funds.
Fourth Phase - since February 2003
In February 2003, following the repeal of the Unit Trust of
India Act 1963 UTI was bifurcated into two separate
entities. One is the Specified Undertaking of the Unit
Trust of India with assets under management of Rs.
29,835 crores as at the end of January 2003,
representing broadly, the assets of US 64 scheme,
assured return and certain other schemes. The Specified
Undertaking of Unit Trust of India.
19
under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund, sponsored by SBI,
PNB, BOB and LIC. It is registered with SEBI and
functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile UTI which had in March 2000
more than Rs. 76,000 crores of assets under
management and with the setting up of a UTI Mutual
Fund, conforming to the SEBI Mutual Fund Regulations,
and with recent mergers taking place among different
private sector funds, the mutual fund industry has entered
its current phase of consolidation and growth.
The graph indicates the growth of assets over the years.

20
Concept of mutual fund

A mutual fund is an open-end professionally

managed investment fund that pools money from many

21
investors to purchase securities. These investors may be
retail or institutional in nature. The term is typically used
in the United States, Canada, and India, while similar
structures across the globe include the SICAV in Europe
('investment company with variable capital') and open-
ended investment company (OEIC) in the UK.
Mutual funds have advantages and disadvantages
compared to direct investing in individual securities. The
advantages of mutual funds include economies of scale,
diversification, liquidity, and professional management.
However, these come with mutual fund fees and expenses.
Primary structures of mutual funds are open-
end funds, unit investment trusts, closed-end
funds and exchange-traded funds (ETFs).
Mutual funds are often classified by their principal
investments as money market funds, bond or fixed income
funds, stock or equity funds, hybrid funds, or other. Funds
may also be categorized as index funds, which are
passively managed funds that match the performance of
an index, or actively managed funds. Hedge funds are not
mutual funds as hedge funds cannot be sold to the
general public.

History
The first modern investment funds (the precursor of today's
mutual funds) were established in the Dutch Republic. In
response to the financial crisis, of 1772–1773, Amsterdam-
based businessman Abraham (or Adriaan) van Ketwich
formed a trust named Eendragt Maakt Magt ("unity creates
strength"). His aim was to provide small investors with an
opportunity to diversify.

22
Mutual funds were introduced to the United States in the
1890s. Early U.S. funds were generally closed-end funds
with a fixed number of shares that often traded at prices
above the portfolio net asset value. The first open-end
mutual fund with redeemable shares was established on
March 21, 1924, as the Massachusetts Investors Trust
(which still in existence today and managed by MFS
Investment Management).
In the United States, closed-end funds remained more
popular than open-end funds throughout the 1920s. In
1929, open-end funds accounted for only 5% of the
industry's $27 billion in total assets.
After the Wall Street Crash of 1929, the United States
Congress passed a series of acts regulating the securities
markets in general and mutual funds in particular.
 The Securities Act of 1933 requires that all investments

sold to the public, including mutual funds, be registered

with the SEC and that they provide prospective
investors with
a prospectus that discloses essential facts about
the investment.
 The Securities and Exchange Act of 1934 requires that

issuers of securities, including mutual funds, report

regularly to their investors. This act also created the
Securities and Exchange Commission, which is the
principal regulator of mutual funds.
 The Revenue Act of 1936 established guidelines for the

taxation of mutual funds. It allowed mutual funds to be

treated as a flow-through or pass-through entity,
where income is passed through to investors who are
responsible for the tax on that income.

23
 The Investment Company Act of 1940 established
rules specifically governing mutual funds.
These new regulations encouraged the development of
open- end mutual funds (as opposed to closed-end
funds).[4] Growth in the U.S. mutual fund industry remained
limited until the 1950s when confidence in the stock market
returned. In the 1960s, Boston's Fidelity Investments began
the marketing of mutual funds to the public at large, rather
than only wealthier individuals or those working in the
finance industry.[5] The introduction of money market
funds in the high-interest rate environment of the late
1970s boosted industry growth dramatically. The first retail
index fund, First Index Investment Trust, was formed in
1976
by The Vanguard Group, headed by John Bogle; it is now
called the "Vanguard 500 Index Fund" and is one of the
world's largest mutual funds.
Beginning the 1980s, the mutual fund industry began a
period of growth that has continued largely uninterrupted
through the present day. (For instance, global mutual fund
assets have increased in every year since 2003 except for
2008 and 2011. According to Robert Pozen and Theresa
Hamacher, growth was the result of three factors:
1. A bull market for both stocks and bonds,
2. New product introductions (including funds based
on municipal bonds, various industry sectors, international
funds, and target date funds) and
3. Wider distribution of fund shares. Among the new
distribution channels were retirement plans. Mutual
funds are now the a preferred investment option in
certain types of retirement plans, specifically in 401(k),
other defined contribution plans and in individual
24
accounts (IRAs), all of which surged in popularity in the
1980s.[8]
In 2003, the mutual fund industry was involved in
a scandal involving unequal treatment of fund
shareholders. Some fund management companies allowed
favoured investors to engage in late trading, which is illegal,
or market timing, which is a practice prohibited by fund
policy. The scandal was initially discovered by former New
York Attorney General Eliot Spitzer and led to a significant
increase in regulation. In a study about German mutual
funds Gomolka (2007) found statistical evidence of illegal
time zone arbitrage in trading of German mutual
funds. Though reported to regulators BaFin never
commented on these results.

Fund structures
There are three primary structures of mutual funds: open-
end funds, unit investment trusts, and closed-end
funds. Exchange-traded funds (ETFs) are open-end funds or
unit investment trusts that trade on an exchange.

Open-end funds
Open-end mutual funds must be willing to buy back
("redeem") their shares from their investors at the [[net
asset value]] (NAV) computed that day based upon the
prices of the securities owned by the fund. In the United
States, open-end funds must be willing to buy back shares at
the end of every business day. In other jurisdictions, open-
funds may only be required to buy back shares at longer
intervals. For
25
example, UCITS funds in Europe are only required to accept
redemptions twice each month (though most UCITS accept
redemptions daily).
Most open-end funds also sell shares to the public every
business day; these shares are priced at NAV.
Open-end funds are often referred to simply as "mutual
funds".
In the United States at the end of 2019, there were
7,945 open-end mutual funds with combined assets of
$21.3 trillion, accounting for 83% of the U.S. industry.

Unit investment Trust

Unit investment trusts (UITs) are issued to the public only
once when they are created. UITs generally have a limited
life span, established at creation. Investors can redeem
shares directly with the fund at any time (similar to an open-
end fund) or wait to redeem them upon the trust's
termination.
Less commonly, they can sell their shares in the open market.
Unlike other types of mutual funds, unit investment trusts
do not have a professional investment manager. Their
portfolio of securities is established at the creation of the
UIT.
In the United States, at the end of 2019, there were 4,571
UITs with combined assets of less than $0.1 trillion.

Closed-end fund

Closed-end funds generally issue shares to the public

26
offering. Their shares are then listed for trading on a stock
exchange. Investors who want to sell their shares must sell
their shares to another investor in the market; they cannot
sell their shares back to the fund. The price that investors
receive for their shares may be significantly different from
NAV; it may be at a "premium" to NAV (i.e., higher than
NAV) or, more commonly, at a "discount" to NAV (i.e., lower
than NAV).
In the United States, at the end of 2019, there were
500 closed-end mutual funds with combined assets of
$0.28 trillion.

Exchange-traded funds (ETFs)

Exchange-traded funds (ETFs) combine characteristics of

both closed-end funds and open-end funds. They are
structured as open-end investment companies or UITs. ETFs
are traded throughout the day on a stock exchange.
An arbitrage mechanism is used to keep the trading price
close to net asset value of the ETF holdings.
In the United States, at the end of 2019, there were 2,096
ETFs in the United States with combined assets of $4.4
trillion, accounting for 17% of the U.S. industry.

Average annual total return

Mutual funds in the United States are required to report

the average annual compounded rates of return for one-,
five- and-ten year-periods using the following formula
P(1+T)n = ERV
Where:

27
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the one-, five-, or ten-
year periods at the end of the one-, five-, or ten-year
periods (or fractional portion).
Market capitalization
Market capitalization equals the number of a company's
shares outstanding multiplied by the market price of the
stock. Market capitalization is an indication of the size of a
company. Typical ranges of market capitalizations are:
 Mega cap - companies worth $200 billion or more
 Big/large cap - companies worth between $10 billion and
$200 billion
 Mid cap - companies worth between $2 billion and
$10 billion
 Small cap - companies worth between $300 million
and $2 billion
 Micro cap - companies worth between $50 million and
$300 million
 Nano cap - companies worth less than $50 million
Net asset value

Main article: Net asset value

28
A fund's net asset value (NAV) equals the current market
value of a fund's holdings minus the fund's liabilities (this
figure may also be referred to as the fund's "net assets"). It
is usually expressed as a per-share amount, computed by
dividing net assets by the number of fund shares
outstanding. Funds must compute their net asset value
according to the rules set forth in their prospectuses. Most
compute their NAV at the end of each business day.
Valuing the securities held in a fund's portfolio is often the
most difficult part of calculating net asset value. The fund's
board typically oversees security valuation.
Share classes
A single mutual fund may give investors a choice of
different combinations of front-end loads, back-end loads
and distribution and services fee, by offering several
different types of shares, known as share classes. All of
them invest in the same portfolio of securities, but each
has different expenses and, therefore, different net asset
values and different performance results. Some of these
share classes may be available only to certain types of
investors.
Typical share classes for funds sold through brokers or
other intermediaries in the United States are:
 Class A shares usually charge a front-end sales load
together with a small distribution and services fee.
 Class B shares usually do not have a front-end sales

load; rather, they have a high contingent deferred

sales
charge (CDSC) that gradually declines over several years,
combined with a high 12b-1 fee. Class B shares usually
29
convert automatically to Class A shares after they have been
held for a certain period.
 Class C shares usually have a high distribution and

services fee and a modest contingent deferred sales

charge that is discontinued after one or two years.
Class C shares usually do not convert to another class.
They are often called "level load" shares.
 Class I are usually subject to very high minimum

investment requirements and are, therefore, known as

"institutional" shares. They are no-load shares.
 Class R are usually for use in retirement plans such

as 401(k) plans. They typically do not charge loads but do

charge a small distribution and services fee.
No-load funds in the United States often have two classes
of shares:
 Class I shares do not charge a distribution and services fee
 Class N shares charge a distribution and services fee
of no more than 0.25% of fund assets
Neither class of shares typically charges a front-end
or back-end load.

Portfolio Turnover

Portfolio Turnover is a measure of the volume of a fund's

securities trading. It is expressed as a percentage of the
average market value of the portfolio's long-term
securities. Turnover is the lesser of a fund's purchases or
sales during a given year divided by average long-term

30
securities market value for the same period. If the period is
less than a year, turnover is generally annualized.

31
 TYPES OF MUTUAL FUND SCHEMES
Mutual funds may be classified by their principal
investments, as described in the prospectus and
investment objective. The four main categories of funds
are money market funds, bond or fixed-income funds,
stock or equity funds, and hybrid funds. Within these
categories, funds may be sub-classified by investment
objective, investment approach, or specific focus.
The types of securities that a particular fund may invest in
are set forth in the fund's prospectus, a legal document
that describes the fund's investment objective, investment
approach and permitted investments. The investment
objective describes the type of income that the fund
seeks. For example, a capital appreciation fund generally
looks to earn most of its returns from increases in the
prices of the securities it holds, rather than from dividend
or interest income. The investment approach describes
the criteria that the fund manager uses to select
investments for the fund.
Bond, stock, and hybrid funds may be classified as
either index (or passively-managed) funds or actively
managed funds.
Alternative investments which incorporate advanced
techniques such as hedging known as "liquid alternatives".
Money market funds
Main article: Money market fund
Money market funds invest in money market instruments,
which are fixed income securities with a very short time
to maturity and high credit quality. Investors often use
money
32
market funds as a substitute for bank savings accounts,
though money market funds are not insured by the
government, unlike bank savings accounts.
In the United States, money market funds sold to retail
investors and those investing in government securities
may maintain a stable net asset value of $1 per share,
when they comply with certain conditions. Money market
funds sold to institutional investors that invest in non-
government securities must compute a net asset value
based on the value of the securities held in the funds.
In the United States, at the end of 2019, assets in money
market funds were $3.6 trillion, representing 14% of the
industry.
Bond funds
Main article: Bond fund
Bond funds invest in fixed income or debt securities. Bond
funds can be sub-classified according to:
 The specific types of bonds owned (such as high-yield or
junk bonds, investment-grade corporate bonds,
government bonds or municipal bonds)
 The maturity of the bonds held (i.e., short-,
intermediate- or long-term)
 The country of issuance of the bonds (such as the
U.S., emerging market or global)
 The tax treatment of the interest received (taxable or
tax- exempt)
In the United States, at the end of 2019, assets in bond
funds (of all types) were $5.7 trillion, representing 22% of
the industry.

33
Stock funds
Main article: Stock fund
Stock or equity funds invest in common stocks. Stock
funds may focus on a particular area of the stock market,
such as
 Stocks from only a certain industry

 Stocks from a specified country or region

 Stocks of companies experiencing strong growth
 Stocks that the portfolio managers deem to be a

good value relative to the value of the company's business

 Stocks paying high dividends that provide income

 Stocks within a certain market capitalization range

In the United States, at the end of 2019, assets in stock

funds (of all types) were $15.0 trillion, representing 58% of
the industry.
Funds which invest in a relatively small number of stocks
are known as "focus funds."
Hybrid funds
Hybrid funds invest in both bonds and stocks or
in convertible securities. Balanced funds, asset allocation
funds, target date or target-risk funds, and lifecycle or
lifestyle funds are all types of hybrid funds.
Hybrid funds may be structured as funds of funds, meaning
that they invest by buying shares in other mutual funds that
invest in securities. Many funds of funds invest in affiliated
funds (meaning mutual funds managed by the same fund
sponsor), although some invest in unaffiliated funds (i.e.,
managed by other fund sponsors) or some combination of
the two.

34
In the United States, at the end of 2019, assets in
hybrid funds were $1.6 trillion, representing 6% of the
industry. Other funds
Funds may invest in commodities or other investments.

35
Merits demerits of mutual
fund
1. Advantages of Mutual Funds

a. Liquidity
Unless you opt for close-ended mutual funds, it is relatively
easier to buy and exit a mutual fund scheme. You can sell
your units at any point (when the market is high). Do keep an
eye on surprises like exit load or pre-exit penalty. Remember,
mutual fund transactions happen only once a day after the
fund house releases that day’s NAV.
b. Diversification
Mutual funds have their share of risks as their performance
is based on the market movement. Hence, the fund
manager always invests in more than one asset class
(equities,
debts, money market instruments, etc.) to spread the risks. It
is called diversification. This way, when one asset class
doesn’t perform, the other can compensate with higher
returns to avoid the loss for investors.
c. Expert Management
A mutual fund is favoured because it doesn’t require the
investors to do the research and asset allocation. A fund
manager takes care of it all and makes decisions on what to
do with your investment. He/she decides whether to invest
in
36
equities or debt. He/she also decide on whether to hold
them or not and for how long.
Your fund manager’s reputation in fund management
should be an essential criterion for you to choose a mutual
fund for this reason. The expense ratio (which cannot be
more than 1.05% of the AUM guidelines as per SEBI)
includes the fee of the manager too.
d. Less cost for bulk transactions
You must have noticed how price drops with increased
volume when you buy any product. For instance, if a 100g
toothpaste costs Rs.10, you might get a 500g pack for, say,
Rs.40. The same logic applies to mutual fund units as well. If
you buy multiple units at a time, the processing fees and
other commission charges will be less compared to when
you buy one unit.
e. Invest in smaller denominations
By investing in smaller denominations (SIP), you get exposure
to the entire stock (or any other asset class). This reduces the
average transactional expenses – you benefit from the
market lows and highs. Regular (monthly or quarterly)
investments, as opposed to lump sum investments, give you
the benefit of rupee cost averaging.
f. Suit your financial goals
There are several types of mutual funds available in India
catering to investors from all walks of life. No matter
what your income is, you must make it a habit to set
aside some
37
amount (however small) towards investments. It is easy to
find a mutual fund that matches your income, expenditures,
investment goals and risk appetite.
g. Cost-efficiency
You have the option to pick zero-load mutual funds with
fewer expense ratios. You can check the expense ratio of
different mutual funds and choose the one that fits in your
budget and financial goals. Expense ratio is the fee for
managing your fund. It is a useful tool to assess a mutual
fund’s performance.
h. Quick & painless process
You can start with one mutual fund and slowly diversify.
These days it is easier to identify and handpicked fund(s)
most suitable for you. Tracking mutual funds will not take
any extra effort from your side. The fund manager, with the
help of his team, will decide when, where and how to
invest. In short, their job is to beat the benchmark and
deliver you maximum returns consistently.
i. Tax-efficiency
You can invest up to Rs 1.5 lakh in tax-saving mutual
funds which is covered under Section 80C of the Income
Tax Act, 1961. Though a 10% tax on Long-Term Capital
Gains (LTCG) is applicable for returns above Rs.1 lakh after
one year, they have consistently delivered higher returns
than other tax-saving instruments like FD in recent years.

38
 j. Automated payments
It is common to forget or delay SIPs or prompt lump sum
investments due to any given reason. You can opt for
paperless automation with your fund house or agent.
Timely email and SMS notifications help to counter this
kind of negligence.
k. Safety
There is a general notion that mutual funds are not as safe as
bank products. This is a myth as fund houses are strictly
under the purview of statutory government bodies
like SEBI and AMFI. One can easily verify the credentials of
the fund house and the asset manager from SEBI. They also
have an impartial grievance redressal platform that works
in the interest of investors.
l. Systematic or one-time investment
You can plan your mutual fund investment as per your
budget and convenience. For instance, starting a SIP
(Systematic Investment Plan) on a monthly or quarterly
basis suits investors with less money. On the other hand, if
you have surplus amount, go for a one-time lump sum
investment.

2. Disadvantages of Mutual Funds

a. Costs to manage the mutual fund

The salary of the market analysts and fund manager comes
from the investors. Total fund management charge is one

39
Of the first parameters to consider when choosing a mutual
fund. Higher management fees do not guarantee better
fund performance.
b. Lock-in periods
Many mutual funds have long-term lock-in periods, ranging
from five to eight years. Exiting such funds before maturity
can be an expensive affair. A specific portion of the fund is
always kept in cash to pay out an investor who wants to exit
the fund. This portion cannot earn interest for investors.
c. Dilution
While diversification averages your risks of loss, it can also
dilute your profits. Hence, you should not invest in more
than seven to nine mutual funds at a time.
As you have just read above, the benefits and potential of
mutual funds can undoubtedly override the disadvantages,
if you make informed choices. However, investors may not
have the time, knowledge or patience to research and
analyse different mutual funds. Investing with Clear Tax
could solve this as we have already done the homework for
you by handpicking the top-rated funds from the best fund
houses in the country.

40
 State bank of india(sbi)

State Bank of India (SBI) is an Indian multinational, public

sector banking and financial services statutory body
headquartered in Mumbai, Maharashtra. SBI is ranked
236th in the Fortune Global 500 list of the world's biggest
corporations of 2019 It is the largest bank in India with a
23% market share by assets and a 25% share of the total
loan and deposits market.

State Bank of India

The Banker to Every Indian

State Bank Bhavan', Nariman Point, Mumbai

Formerly Imperial Bank of India

41
Type Public Sector Undertaking

Traded as NSE: SBIN

BSE: 500112 LSE: SBID
BSE SENSEX Constituent NSE NIFTY 50
Constituent

ISIN INE062A01020

Industry Banking, financial services

Predecessor Imperial Bank of India (1921-

1955)
Bank of Calcutta (1806-1921) Bank of Bombay
(1840-1921) Bank of Madras (1843-1921)

Founded 2 June 1806, Bank of Calcutta

15 April 1840, Bank of Bombay
1 July 1843, Bank of Madras
27 January 1921, Imperial Bank of India
1 July 1955, State Bank of India

Headquarters State Bank Bhawan, M.C.

Road, Nariman Point, Mumbai, Maharashtra,
India

Number of 22,141 Branches, 58,555 ATMs

locations

Area served Worldwide

Key people Rajnish Kumar

(Chairman)

Products Retail
banking Corporate banking
Investment banking Mortgage loans
Private banking

42
Wealth management Credit cards
Finance and Insurance

Revenue ₹368,010.6492
crore (US$52 billion) [1] (2020)

Operating ₹75,105.2876
income crore (US$11 billion) [1] (2020)

Net income ₹11,439.4023

crore (US$1.6 billion) [1] (2020)

Total assets ₹4,197,492.3443

crore (US$590 billion) [1] (2020)

Total equity ₹250,167.6630

crore (US$35 billion) [1] (2020)

Number of 249,448 (March 2020)

employees

Parent Government of India (56.92%)

Subsidiaries SBI Life Insurance Ltd

SBI Cards and Payment Services Ltd
SBI General Insurance (70%) Jio Payments
Bank (30%) Yes Bank (30%)
Kaveri Grameena Bank (35%) Andhra Pradesh
Grameena Vikas Bank (35%)

Website bank.sbi

Footnotes / references
[2][3][4][5]

The bank descends from the Bank of Calcutta, founded

in 1806 via the Imperial Bank of India, making it the
oldest commercial bank in the Indian subcontinent. The
Bank of

43
Madras merged into the other two presidency banks
in British India, the Bank of Calcutta and the Bank of
Bombay, to form the Imperial Bank of India, which in turn
became the State Bank of India in 1955. The Government of
India took control of the Imperial Bank of India in 1955, with
Reserve Bank of India (India's central bank) taking a 60%
stake, renaming it the State Bank of India.
History

¿Stamp dedicated to the State Bank of India in 2005

Share of the Bank of Bengal, issued 13 May 1876

Seal of Imperial Bank of India

The roots of 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

44
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-organized
banking entity took as its name Imperial Bank of India. The
Imperial Bank of India remained a joint-stock company but
without Government participation.
Pursuant to the provisions of the State Bank of India Act of
1955, the Reserve Bank of India, which is India's central
bank, acquired a controlling interest in the Imperial Bank of
India. On 1 July 1955, the Imperial Bank of India became
the State Bank of India. In 2008, the Government of
India acquired the Reserve Bank of India's stake in SBI so as
to remove any conflict of interest because the RBI is the
country's banking regulatory authority.
In 1959, the government passed the State Bank of India
(Subsidiary Banks) Act. This made eight banks that had
belonged to princely states into subsidiaries of SBI. This was
at the time of the First Five Year Plan, which prioritized the
development of rural India. The government integrated
these banks into the State Bank of India system to expand its
rural outreach. In 1963 SBI merged State Bank of Jaipur (est.
1943) and State Bank of Bikaner (est.1944).
SBI has acquired local banks in rescues. The first was the
Bank of Bihar (est. 1911), which SBI acquired in 1969,
together with its 28 branches. The next year SBI acquired
National Bank of Lahore (est. 1942), which had 24 branches.
Five years later, in 1975, SBI acquired Krishnaram Baldeo

45
Bank, which had been established in 1916 in Gwalior State,
under the patronage of Maharaja Madho Rao Scindia. The
bank had been the Dukan Pichadi, a small moneylender,
owned by the Maharaja. The new bank's first manager was
Jall N. Broacha, a Parsi. In 1985, SBI acquired the Bank of
Cochin in Kerala, which had 120 branches. SBI was the
acquirer as its affiliate, the State Bank of Travancore,
already had an extensive network in Kerala.
There was, even before it actually happened, a proposal to
merge all the associate banks into SBI to create a single very
large bank and streamline operations.
The first step towards unification occurred on 13 August
2008 when State Bank of Saurashtra merged with SBI,
reducing the number of associate state banks from seven to
six. On 19 June 2009, the SBI board approved the absorption
of State Bank of Indore, in which SBI held 98.3%.
(Individuals who held the shares prior to its takeover by the
government held the balance of 1.7%).
The acquisition of State Bank of Indore added 470 branches
to SBI's existing network of branches. Also, following the
acquisition, SBI's total assets approached ₹10 trillion. The
total assets of SBI and the State Bank of
Indore were ₹9,981,190 million as of March 2009. The
process of merging of State Bank of Indore was completed
by April 2010, and the SBIndore branches started
functioning as SBI branches on 26 August 2010.
On 7 October 2013, Arundhati Bhattacharya became the first
woman to be appointed Chairperson of the bank. Mrs.
Bhattacharya received an extension of two years of service to
merge into SBI the five remaining associate banks.

46
 Sbi mutual fund

SBI Mutual Fund is an asset management company

sponsored by State Bank of India. It was founded in 1987
with its corporate headquarters located in Mumbai, India.
SBI Funds Management Private Limited (SBIFMPL) has
been appointed as the Asset Management Company of the
SBI Mutual Fund. SBIFMPL is a joint venture between the
State Bank of India, an Indian public sector bank, and
Amundi, a European asset management company.

SBI Mutual Fund

Type Private company

Industry Mutual Fund

Founded 1987

Headquarters Mumbai, India

Area served India

Key people Ashwani Bhatia (CEO & Managing

director) [1]

Mr. Denys de Campigneulles

(Deputy CEO) [2] [3]

Navneet Munot (Executive

Director & Chief Investment
Officer)

47
 Vinaya Datar (Head Compliance

& Company Secretary) [4]

Products Mutual Fund

AUM Rs. 3,07,534 crore ($44.87

billion) (April - June 2019) [5]

Number of 1000-1200
employees

Website sbimf.com

History
The mutual fund industry in India originally began in
1963 with the Unit Trust of India (UTI) as a Government
of India and the Reserve Bank of India initiative.
Launched in
1987, SBI Mutual Fund became the first non-UTI mutual
fund in India. In July 2004, State Bank of India decided to
divest 37 per cent of its holding in its mutual fund arm, SBI
Funds Management Pvt Ltd, to Societe Generale Asset
Management, for an amount in excess of $35 million. Post-
divestment, State Bank of India's stake in the mutual fund
arm came down to 67%. In May 2011, Amundi picked up
37% stake in SBI Funds Management, that was held by
Societe Generale Asset Management, as part of a global
move to merge its asset management business with Crédit
Agricole. SBI Funds Management Private Limited (SBIFMPL)
has been appointed as the Asset Management Company of
the SBI Mutual Fund.
SBIFMPL is a joint venture between the State Bank of
India, an Indian public sector bank, and Amundi, a
European asset management company.

48
As of September, 2019, the fund house claims to serve
5,809,315 unique investors through approximately 212
branches PAN India.

 1987 - Establishment of SBI Mutual Fund

 1991 - Launch of SBI Magnum Equity Fund
 1999 - Launch of sector funds, India's first contra fund:
SBI Contra Fund
 2004 - Joint Venture with Societe General Asset
Management
 2006 - Became the first bank-sponsored fund to launch
an off shore – SBI Resurgent India Opportunities
Fund[15]
 2011 - Stake Transfer from SGAM to Amundi
Asset Management
 2013 - Acquisition of Daiwa Mutual Fund, part of the
Tokyo- based Daiwa Securities Group
 2013 - Launch of SBI Fund Guru, an investor
education initiative
 2015 - Employees' Provident Fund Organisation
decided to invest in the equity market for the first time
by investing Rs. 5,000 crore in the Nifty and Sensex
ETFs (Exchange Traded Fund) of SBI Mutual Fund
 2018 - First AMC in India to launch an Environment,
Social and Governance (ESG) fund viz Magnum Equity
ESG Fund
 2018 - Signatory to the United Nations
Principles for Responsible Investment (UN-PRI

49
Debt

The company has a robust product range matching all

maturities for cash management. The focus of investment
philosophy is primarily on the product's liquidity as well as
on the quality of the securities held in the portfolio. [22]

Hybrid

Hybrid Schemes invest in a mixture of multiple asset classes

like debt, equity, and gold in different proportions based on
the investment objective. The company has a suite of
products across the risk-spectrum including a multi-asset
offering that has gold in the portfolio into the traditional mix
of equity and debt.

50
 competitor of sbi

1) INVESCO INDIA MUTUAL FUND

2) SUNDARAM MUTUAL FUND

3) ICICI MUTUAL FUND

4) ADITYA BIRLA SUN LIFE MUTUAL FUND

51
5) NIPPON INDIA MUTUAL FUND

6) UTI MUTUAL FUND

7) MOTILAL OSWAL MUTUAL FUND

8) TATA MUTUAL FUND

52
 ObjectivES scope of study
Scope comprises the totality of the outputs, outcomes
and benefits and the work required it produce them. It is
the scope of work that is the deciding factor as to whether
it will be managed as a project, programme or portfolio.
The way in which scope is managed depends upon
two things; the nature of the objectives (outputs,
benefits or strategic) and the definability of the
objectives.
The scope of a project will typically include outputs,
but may be extended to cover benefits.
Objectives may be expressed in terms of outputs (such
as a new HQ building), outcomes (such as staff being
relocated from multiple locations to the new HQ), benefits
(such as reduced travel and facilities management costs)
or strategic objectives (such as doubling the
organisation’s share price in three years).
Where the objective is well understood and has a
tangible output (e.g. in construction and engineering) it is
usual to define the scope as accurately as possible at
the beginning of the life cycle.
Where the objective is less tangible, or subject to
significant change e.g. business change or some IT
systems, a more flexible approach to scope is needed.
This requires a careful approach to avoid escalating
costs.

53
Analysis of the data
1. investor age distributor

2.INVESTOR QUALIFICATION

Post graduate
Under
graduate
Others 45

3.OCCUPATION OF INVESTOR

54
4.INCOME DISTRIBUTER OF INVESTOR

5.CUSTOMERS PREFERENCE TYPE OF INVESTMENT

6. FACTOR AFFECTING WHILE INVESTING

55
 RESEARCH METHODOLOGY

To address the key research objectives, this research used both

qualitative and quantitative methods and combination of primary and
secondary sources. The qualitative data supports the quantitative
data analysis and results. The result obtained is triangulated since the
researcher utilized the qualitative and quantitative data types in the
data analysis. The study area, data sources, and sampling techniques
were discussed under this section.


Research
 Analytics
o Mutual Fund Analytics
o Risk Analytics

Request a presentation
Research

ICRA Analytics Reports combine the best of designs, data and

editorial finesse to clearly present the most essential facts about
an investment in easy to comprehend formats. Our Fund
Scorecards, Fund Reviews and Market Updates provide an
insight into the trends in the investment industry. Event updates
give guidance on the impact of major policy decisions taken by
regulators on different investments. All our reports comes in an
easy to understand language and graphical illustrations to make
them comprehendible for layman investors and prospects.

Research Reports
1. Event updates
2. Scheme reviews
3. Market outlook report
4. Articles on personal finance
56
 Bibliography

Reference to book:

 Indian mutual funds handbook

 Guide to indian mutual fund by ankit gala
 Investing for beginners by ryan smith
 Investing in closed ends funds by George c.
scott
 Mutual funds in india by rakesh kumar

References to websites:

 www.indianmutualfunds.com
 www.sbimutualfunds.com
 www.investmentinindia.com

57
 observations and findings
 Mutual funds are related to market risk.
 The Magnitude of investment
determines the amount of profitability.
 Guidelines and rules of investing in
mutual funds must be cleared and
analyzed before investing into it.
 Mutual funds can be for shorter duration
but investment in mutual funds for
longer duration is considered to be more
profitable.
 Market shares must be analyzed at
regular basis to avoid uncertainities in
profitability

58
 conclusion
To conclude I would like to tell you that this project report
on mutual funds of SBI has achieved its objective .It has taken a
huge task for this project to be completed. It has given a huge lift
to the investments in mutual funds .
By the process of exploring the chapters of different books and by
exploring articles of various writers , I had learned the basic
concept of mutual funds of state bank of india.
Since investing in mutual funds are related to market risk and
each of the contents of mutual funds must be analyzed by the
investor carefully before investing into it, which reduces the
chances of the uncertainities and helps to get more profit out of
it.

59