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A SUMMER TRAINING REPORT ON

1. COMPARISION OF SBI MUTUAL FUND V/S RELIANCE MUTUAL FUND (TAX SAVER SCHEMES) 2. PERCEPTION OF CURRENT INVESTORS V/S POTENTIAL INVESTORS ABOUT SYSTEMATIC INVESTMENT PLANS IN NOIDA SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF POST GRADUATE DIPLOMA IN BUSINESS MANAGEMENT (APPROVED BY AICTE, GOVT OF INDIA) ACCADEMIC SESSION (2008-2010) External Guide: Mr. Nikhil Girotra Relationship Manager, SBI MF Internal Guide: Prof. R.K. Manocha Faculty IMS, Ghaziabad INSTITUTE OF MANAGEMENT STUDIES C-238, BULANDSHAR ROAD, LAL QUAN, G.T.ROAD, GHAZIABAD-201009 Submitted By: Rohit Verma BM 08155

SUMMER INTERNSHIP PROJECT TITLE


1. COMPARISION OF SBI MUTUAL FUND V/S RELIANCE MUTUAL FUND (TAX SAVER SCHEMES) 2. PERCEPTION OF CURRENT INVESTORS V/S POTENTIAL INVESTORS ABOUT SYSTEMATIC INVESTMENT PLANS IN NOIDA

SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF POST GRADUATE DIPLOMA IN BUSINESS MANAGEMENT (APPROVED BY AICTE, GOVT OF INDIA) ACCADEMIC SESSION (2008-2010)

Company Guide Mr. Nikhil Girotra Relationship Manager SBI MF Faculty Guide Prof. R. K. Manocha IMS, Ghaziabad

Submitted by Rohit Verma BM-08155

CERTIFICATE
This is to certify that Mr. Rohit Verma a student of IMS, Ghaziabad has completed project work on 1. Comparison of SBI Mutual Fund v/s Reliance Mutual Fund (Tax Saver Schemes) 2. Perception of current investors v/s potential investors about systematic investment plans in Noida under my guidance and supervision I certify that this is an original work and has not been copied from any source.

Signature of Guide Name of Project Guide - Mr. R.K Manocha Date -

DECLARATION
I hereby declare that this Project Report entitled 1. Comparison of SBI Mutual Fund v/s Reliance Mutual Fund (Tax Saver Schemes) 2. Perception of current investors v/s potential investors about systematic investment plans in Noida in SBI Mutual Fund submitted in the partial fulfillment of the requirement of Post Graduate Diploma in Management (PGDM), of INSTITUTE OF MANAGEMENT STUDIES, GHAZIABAD is based on primary & secondary data found by me in various departments, books, magazines and websites & collected by me under the guidance of Mr. Nikhil Girotra.

DATE : ROHIT VERMA PGDM Roll no. - BM 08155

Table of content
1. Executive summary .... 7 2. Literature Review ... 8 3. Objective of Project .. 11 4. About the company .. 12 5. Chapter 1 ... 14 a)What is mutual fund? b)NAV c)Types of mutual fund schemes d)Schemes according to investment objective e)Role of SEBI 6. Chapter 2 ..... 20 a) What is SIP b) Benefits of SIP c) How to invest in SIP d) Example 7. Chapter 3 ..... 25 a) Comparison of SBI Mutual Funds with other mutual fund b) SBI magnum tax gain scheme highlights c) Reliance tax saver plan scheme highlights d) Comparison e) Interpretations 8. Chapter 4 ..... 41 a) Perception of current investors v/s potential investors about SIP b) Research methodology c) Problems faced during research
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d) Analysis e) Techniques used 9. Interpretation .. 47

10. Results 49 11. Limitations . 50 12. Conclusion . 51 13. Recommendations . 52 14. References . 53 15. Appendix ... 54

Executive summary
An investor has many options for making his investments. However, all of them do not give optimum returns at little or no risk. An investment in mutual fund is an investment that gives results comparable to trading in shares and the risks are reduced quite a lot. Almost all mutual fund houses have started Systematic Investment Plans (SIP) over a last couple of years. Which company is providing good services good investment options? What is the perception of investors in current scenario? Etc... These are the questions that I hope to answer through this project report. However, one must have some basic description about mutual funds before attempting the answers. So I have included a brief knowledge about what is mutual fund? How it works? How money is invested? What is SIP? What is SWP? Etc Secondly I have made a comparison between two products of two renowned mutual fund companies in the market that is SBI Mutual Funds magnum tax gain 93 and Reliance Mutual Funds tax saver plan I have chosen these two plans because generally people invest to save tax so these two companies tax saving plans were most talked about. Thirdly I have made an attempt to know the perception of the investors towards the SIP I have included the perception of potential as well as current investors in the sense of those person who are either investing in full or planning to invest in the market After completing my project I found that SBI Mutual Fund is running strongly on SBI brand name and most of the people (according to my sample size i.e 80 ) have a good faith on it and they would like to continue with the same as compared to other brands. The tax saving plan of SBI has made a huge success on the basis of it name and a better investment strategies. About perception of customers I have found that current customers are quite satisfied with SIP as they invest in small amounts on a periodical basis which act as a saving for them and can enjoy huge return on a compound basis whereas for potential customers a lack of knowledge is evident .SIP plans should therefore be promoted on a large basis so that new customers can invest there money in the market. Hence mutual funds have a large untapped market in S.I.P awaiting them.

Literature review
1. Date: 15/02/2009 MAGNUM TAX GAIN: INVEST Source: The Hindu Business Line Investment can be considered in Magnum Tax Gain based on its long-term track record. The fund outpaced its benchmark BSE-100 marginally over a one-year period, while it has trailed close to half its ELSS peers. However, consistent performance over a five-year period places it at the top of the ELSS universe as well as diversified funds. The fund generated a compounded annualised return of 26 per cent over a five-year time frame and outperformed its peers with wide margin (barring a few) of about 10 percentage points. Suitability: Equity-linked saving schemes tend to have volatile phases due to higher exposure to mid- and small-cap stocks. Over the last ten years Magnum Tax Gain considerably outpaced the BSE-100 whenever the market rallied but, equally, trailed during correction phases. However, in the last couple of years, due to steep increase in assets under management the fund predominantly invests in large-cap stocks (market capitalisation over Rs 7,500 crore). While this strategy can reduce the risk profile, this may cap its potential to earn high returns. Investors can consider investment into this fund as part

2. Date: 02/02/2009 Profit from Volatility Source: The Indian Express Ever wondered if it is possible to generate positive returns even from volatile market conditions without taking much risk? Well, it is possible. Mutual funds have arbitrage schemes that not only offer decent returns but also at minimal risks. Almost Rs 2,463 crore money is already invested in such funds.

In finance parlance, arbitrage is defined as the sale and purchase of some securities in different markets to profit from the unequal prices. Stocks usually trade at different prices in different markets. Aided by sophisticated software, mutual fund companies identify stocks with price differential in cash and future markets and make profits on it. Although the difference in prices is not much, it is good enough to generate returns to the tune of 7-10 percent even in these markets.

3. Date: 18/02/2009 SBI MF wins award at ICRA & Lipper Fund Award functions Source: IRIS SBI Funds Management, a joint venture between State Bank of India and Societe Generale Asset Management, investment manager for SBI Mutual Fund has won 3 awards for its equity schemes, at this year`s esteemed mutual fund award ceremonies - ICRA Mutual Fund awards and Lipper Fund Awards. The fund house equity linked saving scheme Magnum Tax Gain ELSS was rated a 5 star fund in the 3 years performance category ending December 2008 (at the ICRA Mutual Fund Awards 2009. The Lipper Fund Awards 2009 was awarded Magnum Contra as the best Fund for 5 year category in equity funds segment, while Magnum Balanced, which has mixed asset profile between equity and debt was awarded as the best fund in the 5 year category.

4. Date: 03/03/2009 Matured Player (Magnum Taxgain Scheme) Source: Value Research

While critics are quick to point out that Magnum Taxgain slowed down last year, we think it still remains a worthy pick. Launched in 1993 as a close-ended fund, it was converted into an openended offering in 1999. This fund's performance can be broken up into two phases: pre- and post-2003. In the seven years spanning 1996 to 2002, the fund underperformed the category every single year, barring 1999 when it delivered a mesmerising 330 per cent (category: 209%). From 2003 onwards, it was on steroids. After an excellent performance that year, it was the best performing fund in its category till 2006. The year 2007 proved to be a dent in its performance when the fund was not even in the top two quartiles. In 2008, it managed to contain its losses, shedding 55 per cent as compared to the category's (-)59 per cent.

5. Date: 26/05/2009 SBI MF announces 28 percent dividend for Magnum Taxgain Scheme 1993 Source: The Economic Times The Trustees of SBI Mutual Fund have declared a dividend of 28 percent under the dividend option of Magnum Taxgain Scheme 1993, an open-ended equity-linked savings scheme. "Despite the bear market, the fund has managed to declare dividend, reinforcing the strength of the fund-house and commitment toward investors once again," SBI Mutual Fund's Managing Director and CEO Achal Kumar Gupta said in a statement "Prudent asset allocation coupled with high-quality stock selection has resulted in SBI Magnum Taxgain maintaining a consistent performance," he said. The record date for the dividend is May 29, the statement said.

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Objectives of the project


The main objectives of the project were:1) To compare the attractiveness of SBI Mutual Funds and Reliance Mutual Fund TAX Saver Plansand 2) To assess the perception of current and potential investors about there preference for a suitable S.I.P schedule and 3) Asses the potential For S.I.P achievers

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Company profile

SBI Mutual Fund (A partner of life)

Proven Skills in Wealth Generation. SBI Mutual Fund is Indias largest bank sponsored mutual fund and has an enviable track record in judicious investments and consistent wealth creation. The fund traces its lineage to SBI - Indias largest banking enterprise. The institution has grown immensely since its inception and today it is India's largest bank, patronised by over 80% of the top corporate houses of the country. SBI Mutual Fund is a joint venture between the State Bank of India and Socit Gnrale Asset Management, one of the worlds leading fund management companies that manages over US$ 500 Billion worldwide.

Exploiting expertise, compounding growth. In twenty years of operation, the fund has launched 38 schemes and successfully redeemed fifteen of them. In the process it has rewarded its investors handsomely with consistent returns. A total of over 5.4 million investors have reposed their faith in the wealth generation expertise of the Mutual Fund. Schemes of the Mutual fund have consistently outperformed benchmark indices and have emerged as the preferred investment for millions of investors and HNIs.Today, the fund manages over Rs. 27,076.63 crores of assets and has a diverse profile of investors actively parking their investments across 36 active schemes.The fund serves this vast family of investors by reaching out to them through network of over 130 points of acceptance, 28 investor service

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centers, 46 investor service desks and 56 district organizers. SBI Mutual is the first banksponsored fund to launch an offshore fund Resurgent India Opportunities Fund. Growth through innovation and stable investment policies is the SBI MF credo.

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Chapter 1
What is mutual fund? Mutual funds is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document. Investments in securities are spread across a wide cross section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move on the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are known as unit holders. The profits (or losses) are shared by the investors in proportion to their investments. The mutual funds normally come out with a number of schemes with different investment objectives, which are launched from time to time. Before collecting funds from the public, a mutual fund is required to be registered with the Securities and Exchange Board of India (SEBI), which regulates securities market. A mutual fund is set up in the form of a trust, which has sponsors, trustees, Asset Management Company (AMC) and a custodian. The trust is established by a sponsor or more than one sponsor who is like promoter(s) of a company. The trustees of the mutual fund hold its property for the benefit of the unit holders. AMC approved by SEBI manages the funds by making investments in various types of securities. Custodian, who is registered with SEBI, holds the securities of various schemes of funds in its custody. The trustees are vested with the general power of superintendence and direction over AMC. They monitor the performance and compliance of SEBI Regulations by the mutual funds. SEBI regulations require that at least two thirds of the directors of trustee company or board of trustees must be independent i.e. they should not be associated with the sponsors. Also,50% of the directors of AMC must be independent. All mutual funds are required to be registered with SEBI before they launce any scheme.

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Net Asst Value (NAV) The performance of a particular scheme of a mutual fund is denoted by Net Asset Value (NAV). Mutual Funds invest the money collected from the investors in security markets. In simple words, NAV is the market value of the securities held by the scheme. Since market value of securities changes every day, NAV of a scheme also varies on day-to-day basis. The NAV per unit is the market value of securities of a scheme divided by the total number of units of the scheme on any particular date. For example, if the market value of securities of a mutual fund scheme is Rs. 155 lakhs and the mutual fund has issued one lakh units of Rs. 10 each to the investors, then the NAV per unit of the fund is Rs. 15.50. NAV is required to be disclosed by the mutual funds on a regular basis daily or weekly depending on the type of scheme.

Different Types of Mutual Fund Schemes according to Maturity Period (a) Open-ended Fund / Scheme: An open ended scheme or a fund is one that is available for subscription and repurchase on a continuous basis. These schemes do not have a fixed maturity period and investors can continuously buy and sell units at NAV related prices, which are declared on daily basis. Thus, the key feature of an open-ended scheme is liquidity. (b) Close-ended Fund / Scheme: A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of new fund issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors,some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. SEBI regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on the stock exchanges. These mutual fund schemes generally disclose NAV on weekly basis.

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Schemes according to Investment Objectives: A scheme can also be classified as growth scheme, income scheme or balanced scheme considering its investment objective. Such schemes may be open-ended or close-ended schemes. Such schemes may be classified mainly as follows: (a) Growth / Equity Oriented Schemes. The aim of growth funds is to provide capital appreciation over the medium to long-term. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option; capital appreciation etc. and the investors may choose an option depending on their preference. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time. (b) Income / Debt Oriented Scheme. The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are only affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long-term investors may not bother about these fluctuations. (c) Balanced Fund. The aim of balanced funds is to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. These are appropriate for investors looking for moderate growth. The funds generally invest from 40:60 to 60:40 percent in equity and debt instruments respectively. These funds are also affected because of fluctuations in share prices in the stock markets. However, NAVs of such funds are likely to be less volatile as compared to pure equity funds. (d) Money Market or Liquid Fund. These funds are also income funds and their aim is to provide easy liquidity, preservation of capital and moderate income. These schemes invest exclusively in safer short-term instruments such as treasury bills, certificates of deposits, commercial paper and inter-bank call money, government securities etc. Returns on these schemes fluctuate much less

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as compared to other schemes. These funds are appropriate for corporate and individual investors as a means to park their surplus funds for short duration. (e) Gilt Fund. These funds invest exclusively in government securities. Government securities have no default risk. (f) Index Funds. Index funds replicate the portfolio (of scripts as well as proportion) of a particular index such as BSE Sensex, NSE Nifty etc. (g) Sector Specific Funds / Schemes. These funds / schemes invest in the securities of a particular sector of industries as specified in the offer documents; e.g. Pharmaceuticals, Software, Cement, Banking etc. Returns are more but risk is also more. (h) Tax saving Schemes. These schemes offer tax rebates to the investors under specific provisions of the Income Tax Act, 1961. Government offers tax incentives for investments in specified avenues e.g. Equity Linked Saving Schemes (ELSS). These schemes are growth oriented and invest predominantly in equities. The returns and risks associated are like any other equity-oriented scheme. Entry Load / Exit Load. Almost all mutual funds charge about 2 2.5% more than NAV while purchasing the mutual funds by the investors. This is called Entry Load. Some mutual funds also charge some percentage while selling the units by the investors. This is called Exit Load. SEBI has recently proposed that there should be no entry load for those investors of Open Ended Funds who invest in the mutual funds directly without going through an intermediary like mutual fund distributors or stockbrokers. Most of the expenses of the mutual funds, related to allotment of mutual fund units are of commission given to the intermediaries. If the investors purchase units directly from the mutual fund houses, this expense of commission is not there; as such, there should be NO entry load for such investors investing directly.

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Role of SEBI SEBI formulates policies and regulates the mutual funds to protect the interests of the investors. SEBI notified regulations for the mutual funds in 1993. Thereafter, mutual funds sponsored by private sector entities were allowed to enter the capital market. The regulations were fully revised in 1996 and have been amended thereafter from time to time. SEBI has also issued guidelines to the mutual funds from time to time to protect the interests of investors. All mutual funds - whether promoted by public sector or private sector entities including those promoted by foreign entities - are governed by the same set of regulations. There is no distinction in regulatory requirements for those mutual funds and all are subject to monitoring and inspections by SEBI. Also, the risks associated with the schemes launched by the mutual funds sponsored by these entities are of similar types. SIP(systematic investment plans) Almost all mutual fund houses have started SIPs. Some fixed amount (generally in multiples of Rs. 1,000 /-; however some mutual funds like Reliance Mutual Fund permit multiples of Rs. 50 /- also) is invested every month from the investors bank account. Some experts state that such investments have numerous advantages. Firstly it inculcates habit of regular investments and secondly since units are allotted every month as per NAV of that particular day, the fluctuations in the market do not affect much, and thus these are most appropriate investment option for a common investor. However, I feel that these statements amount to only half-truth. The reasons are explained in the succeeding paragraphs. In a broad sense, Bull Phase i.e. when share prices rise day by day and Bear Phase i.e. when share prices fall day by day, are two phases in which the stock market behaves. When any phase is going on, it may be possible that some time the market is very volatile and it is not possible to know in which direction it is moving, it may also be possible that the market is very stable for a few days with only minor fluctuations.

SWP(systematic withdrawal plans) A systematic withdrawal plan is a financial plan that allows a shareholder to withdraw money from an existing mutual fund portfolio at predetermined intervals. The money withdrawn

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through a systematic withdrawal plan can be reinvested in another portfolio or used to pay for something else. Often, a systematic withdrawal plan is used to fund expenses during retirement. However, this type of plan may be used for other purposes as well. With a systematic withdrawal plan, a fixed or variable amount is withdrawn at regular intervals. Withdrawals can be made on a monthly, quarterly, semi-annual, or annual schedule. The holder of the plan may choose withdrawal intervals based on his or her commitments and needs. Systematic withdrawal plans offer many benefits. For example, systematic

withdrawalplans allow account holders to access their money exactly when they need it. This makes it easier for account holders to carry out their financial plans and meet their goals. A systematic withdrawal plan allows the account holder a certain level of independence from market fluctuations. By making periodic withdrawals, account holders are able to enjoy average return values that often exceed average sale prices. In this way, systematic withdrawal plan holders are able to secure higher unit prices than those attainable by withdrawing everything at once. Systematic withdrawal plans also offer tax advantages. With a systematic withdrawal plan, withdrawals are made from capital. As such, long-term gains are paid at a lower tax rate. Many individuals use systematic withdrawal plans as part of their tax-planning strategies in an effort to make the most of this lower rate of taxation. With a systematic withdrawal plan, an investors money will continue to grow as long as the investment is performing at a rate that is higher than the rate of withdrawal.

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Chapter 2
What is SIP (systematic investment plans)? SIP is an investment option that is presently available only with mutual funds. The other investment option comparable to SIPs is the recurring deposit schemes from Post office and banks. Basically, under an SIP option an investor commits making a regular (monthly) investment in a particular mutual fund/deposits. A Systematic Investment Plan (SIP) is a disciplined way of investing, where you make regular investments according to a set schedule you create. You often decide to start saving and investing regularly, but get caught up in day-today activities and forget to make the investment. Systematic investing is a time-tested discipline that makes it easy to invest automatically. Benefits of Systematic Investment Plan 1. Power of compounding: The power of compounding underlines the essence of making money work if only invested at an early age. The longer one delays in investing, the greater the financial burden to meet desired goals. Saving a small sum of money regularly at an early age makes money work with greater power of compounding with significant impact on wealth accumulation. 2. Rupee cost averaging: Timing the market consistency is a difficult task. Rupee cost averaging is an automatic market timing mechanism that eliminates the need to time one's investments. Here one need not worry about where share prices or interest are headed as investment of a regular sum is done at regular intervals; with fewer units being bought in a declining market and more units in a rising market. Although SIP does not guarantee profit, it can go a long way in minimizing the effects of investing in volatile markets. 3. Convenience: SIP can be operated by simply providing post dated cheques with the completed enrolment form or give ECS instructions. The cheques can be banked on the specified dates and the units credited into the investor's account. The SIP facility is available in the Principal Income Fund, MonthlyIncome Plan, Child Benefit Fund, Balanced Fund, Index Fund, Growth Fund, Equity fund and Tax Savings Fund.

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SIP Features : Disciplined investing is vital to earning good returns over a longer time frame. Investors are saved the bother of identifying the ideal entry and exit points from volatile markets. SIP options such as equity, debt and balanced schemes offer a range of investment plans. While there is no entryload on SIP, investors face an exit load if the units are redeemed within a stipulated time frame. The success of your SIP hinges on the performance of your selected scheme.

How to invest in SIPs? * The SIP option is available with all types of funds like equity, income or gilt. * An investor can avail the SIP option by giving post-dated cheques of Rs 500 or Rs 1,000 according to the funds policy. * If an investor wants to put more than Rs 500 or Rs 1,000 in any given month he will have to fill in a new a form for SIP intimating the fund that he is changing his SIP structure. Also he will be allowed to change the SIP structure only in the multiples of the SIP amount. * If an investor is investing in two different schemes of the same fund he can fill in a common SIP form for all the schemes. However if the first holders in those schemes are different than they will have to fill different SIP forms, as the first holder has to sign on the form. * The investor can get out of the fund i.e. redeem his units any time irrespective of whether he has completed his minimum investment in that scheme. In such a case his post-dated cheques will be returned back to him. Lets take an example : * An investor, Rahul wants to invest in fund X which can be an equity, income or gilt fund. * The policy of fund X for entering in an SIP is that the investor will have to issue 6 post-dated cheques of Rs 500/- in case of monthly option or 4 cheques in a quarterly option. The minimum investment for all its schemes is Rs 5,000. Rahul issues 6 post-dated cheques of Rs 500/- each in the name of fund X, with the first cheque being dated as on 7th May 2008.

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* Now in the month of August 2008 Rahul wants to change his SIP structure from Rs 500/- to Rs 1,000/-. In this case he will have to intimate the fund and will have to fill a new SIP form issuing news post-dated cheques of Rs 1,000/- each. * Rahul is investing in three different schemes of fund X. In two of the schemes Rahul is the first holder and in the third scheme his wife is the first holder. In this case he can fill a common SIP form where he is the first holder and where his wife is the first holder he will have to fill in a new SIP form. * In the month of September 2008 Rahul wants to exit from the fund. He will have to just give a redemption request to the fund wherein his units will be redeemed and his remaining postdated cheques will be returned back to him irrespective of whether he has completed his minimum investment in the fund. Investing in SIPs is also known as Rupee cost averaging. The advantage of rupee cost averaging is that the Net asset value (NAV) is averaged out, as the investor will be entering the fund at different NAVs, which may be higher or lower depending on the market condition. Lets take the example of Rahul wherein he has started investing in units every month since he issued the first cheque on 7th May 2008. In this example we assume that he does not change his SIP structure and also does not redeem the units. Investment in fund 'X' of Mr. Rahul PERIOD 7th May08 7th June08 7th July08 7th August08 7th September08 Total INVESTMENT(RS) NAV(RS PER UNIT) UNITS ALLOCATED 500.0 500.0 500.0 500.0 500.0 a=2500 10.0 13.0 10.5 9.5 8.0 50.0 38.5 47.6 52.6 62.5 b=251.2

Actual average NAV (Rs.) = Rs 10.2 per unit


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NAV for Rahul= Rs 9.95 per unit (a/b) The above table shows clearly how rupee cost averaging works and how it was beneficial to Rahul. The actual average NAV of a fund is Rs 10.2/- per unit, but the average NAV for Rahul is Rs 9.95/- per unit, which is lower than the current NAV. An investor who is not having a lump-sum amount to invest and also does not want to take much risk on his investment should always select a Systematic Investment Plan option. This will enable him to invest regularly i.e. improve investing discipline. Also, the investor stands to benefit from rupee cost averaging. Companies offering SIP All types of equity funds (funds that invest in the shares of companies), debt funds (funds that invest in fixed-return investments) and balanced funds (funds that invest in both) offer a SIP. Liquid funds, cash funds and floating rate debt funds do not offer an SIP. These are funds that invest in very short-term fixed-return investments. Floating rate debt funds invest in fixed return investments where the interest rate moves in tandem with interest rates in the economy (just like a floating rate home loan). Few companies are : 1:-SBI Mutual Fund * Magnum equity fund * Magnum index fund * Magnum multiplier plus * SBI bluechip fund * Magnum taxgain scheme etc

2:- Reliance Mutual Fund

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* Reliance equity fund * Reliance growth fund * Reliance regular savings fund * Reliance Tax saver (ELSS)fund * Reliance long term equity fund etc

3:- UTI mutual fund * UTI equity fund * UTI equity tax saving plans * UTI master value fund * UTI midcap fund * UTI dividend yield fund etc

4:- HDFC mutual fund * HDFC long term advantages fund * HDFC taxsaver plan * HDFC top200 growth plan * HDFC equity fund * HDFC balanced fund etc And many more

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CHAPTER 3
Comparison of SBI Mutual Funds plans with other mutual funds products For the purpose of comparison I have chosen

SBI magnum Tax gain scheme v/s Reliance Tax saver fund
1) SBI magnum tax gain scheme :-

It is an open ended equity scheme which was started on 31/march/1993 its investment objective is to deliver the benefit of investment in a portfolio of equity shares, while offering deductions on such investments made in the schemes under section 80C of income tax act 1961.It also seeks to distribute income periodically on distributable surplus. Asset Allocation INSTRUMENT % OF PORTFOLIO OF RISK PROFILE

PLAN A& B Equity, PCDs and FCDs and 80-100% bonds Money market Instruments 0-20% Low Medium to high

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Scheme highlights 1. There is a statutory lock-in period of three years for investments in a Tax Saving Scheme (irrespective of the fact whether the investors claim the rebate u/s 80C or any other section or not). 2. Dividends may be declared depending on distributable profits of the scheme. Facility to re invest dividend proceeds into the scheme at NAV. 3. Switchover facility to any other open-ended schemes of SBI Mutual Fund at NAV related prices available after the statutory lock-in period. Entry Load Investments below Rs. 5 crores 2.25% Investments of Rs. 5 crores and above NIL Exit Load 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. This facility is available only after the lock-in-period of threeyears. Recurring expenses:1) First Rs 100 cr. of average weekly net assets-2.50% 2) Next Rs 300 cr. of average weekly net assets-2.25% 3) Next Rs 300 cr. of average weekly net assets-2.00% 4) Balance of average weekly net assets-1.75% Actual expenses for the previous financial year :-1.86%

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2) Reliance Tax saver fund :-

Scheme highlight:Type : An Open-ended Equity Linked Savings Scheme. Investment Pattern : 80-100% in equity and equity related securities. Upto 20% in Debt and Money Market Instruments. Investment Objective : The primary objective of the scheme is to generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity related instruments. Net Asset Value : Calculated & declared every working day Plans / Options : Growth Option Dividend Pay-out Option & Dividend Reinvestment Option Application Amount :
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The minimum amount for all category of investors is Rs. 500/- and in multiples of Rs. 500 thereafter. There is no cap on the maximum amount. However investments only upto Rs. 1 lakh by the eligible investor in the scheme will qualify for deduction under the Act. Min. Additional Investment : Minimum additional purchases of Rs. 500. Portfolio Disclosures : Half-yearly Entry Load : No Entry Load for Direct Investments w.e.f January 4th, 2008 For Subscription below Rs.2 crores 2.25%

For Subscription of Rs.2 crores & Above but 1.25% below Rs.5 crores For Subscription of Rs.5 crore & above NIL

Exit Load : Nil Contingent Deferred Sales Charge : Nil Inter-Scheme Switch : Unitholders will have the flexibility to alter the allocation of their investments among the scheme(s) offered by the Mutual Fund, in order to suit their changing investment needs, by easily switching between all the scheme(s)/plans/options of the Mutual Fund, after the statutory lockinperiod of 3 Years. No load applicable for switches between the equity schemes. However, differential load shall be charged for switching from Reliance Index Fund and switching to Reliance NRI Equity Fund. Inter Plan/Inter Option Switch : Unitholders will have the flexibility to alter the allocation of their investments among the scheme(s) offered by the Mutual Fund, in order to suit their changing investment needs, by easily switching between all the scheme (s)/plans/options of the Mutual Fund, after the statutory lock-in period of 3 Years.

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Redemption Cheques Issued : Will be allowed only after the expiry of the lock in period of 3 years. Minimum Redemption Amount : Will be allowed only after the expiry of the lock in period of 3 years. Cut off time : 3:00 p.m. on working days as defined in the Offer Document Recurring Investment Plan (RIP) : Available Regular investment option for corporate employees : Available Regular withdrawal Plan (RWP) : Available only after the expiry of the lock in period of 3 years. Trigger Facility : Value & NAV Trigger to introduce a Stop loss or a Gain Cap. Available only after the expiry of the lock in period of 3 years.

Switch Facility : Available after the statutory lock-in period of 3 Years. Systematic Transfer Plan / Dividend Transfer Plan : Available. However, the scheme cannot become a transferor scheme before 3 year lock-in-period. Nomination Facility : Available Mode of Holding : Single, Joint or Anyone or Survivor Benchmark Index : BSE 100 Switching Option : Available only after the expiry of the lock in period of 3 years. Recurring Expenses : AMC Fees Operational Expenses Marketing Expenses 1.25% 0.25% 1.00%

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Total

2.50%

The above expenses are estimates only and are subject to change as per actual. Expenses on an ongoing basis will not exceed the maximum limits as may be specified by SEBI Regulations from time to time. Allotment of Units : For Subscriptions received at the DISC's within the cut-off timings and considered accepted for that day, the units will be allotted on the T day. Where the T day is the transaction day, provided the application is received within the cut-off timings for the transaction day. Applicable NAV : i. Purchases : In respect of valid applications received upto 3 p.m. by the Mutual Fund alongwith a local cheque or a demand draft payable at par at the place where the application is received, the closing NAV of the day on which application is received shall be applicable. In respect of valid applications received after 3 p.m. by the Mutual Fund alongwith a local cheque or a demand draft payable at par at the place where the application is received, the closing NAV of the next business day shall be applicable. ii. Redemptions : In respect of valid applications received upto 3 p.m. by the Mutual Fund, same day's closing NAV shall be applicable. In respect of valid applications received after 3 p.m. by the Mutual Fund, the closing NAV of the next business day shall be applicable. Tax Benefits : * Investment in this fund would enable you to avail the benefits under clause (xiii) of Subsection (2) of Section 80C of the Income-tax Act, 1961. Investment made upto Rs 1 lakh by the eligible investor being an Individual or a Hindu Undivided Family in the scheme will qualify for deduction under this Section of the Act. * Dividends received will be absolutely TAX FREE in the hands of investors * The dividend distribution tax (payable by the AMC) for equity schemes is also NIL

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* Attractive Capital Gains Tax on Equity Schemes, shown as under : Long term Capital Gains Equity Schemes NIL Short term Capital Gains *15% (w.e.f 1st April 08)

*plus surcharge & education cess PS: STT is levied at the time of redemption of units. It is applicable only in Equity Funds. The above should not be construed to be tax advice and the same is subject to any change that may be affected in the Act or any guidelines /amendments /rules /clarifications issued in respect thereof from time to time. Sponsor: Reliance Capital Limited Trustee: Reliance Capital Trustee Co. Limited Investment Manager: Reliance Capital Asset Management Limited Statutory Details: The Sponsor, the Trustee and the Investment Manager are incorporated under the Companies Act 1956. Investment Objective: Reliance Tax Saver (ELSS) Fund (An Open Ended Equity Linked Savings Scheme): The primary objective of the scheme is to generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity related instruments.

Comparison :SBI MAGNUM TAX GAIN SCHEME 93 - DIVIDEND Fund size as on Fund Size (Rs. In Crores) Asset Allocation as on Equity Debt Others Apr 29, 2009 3262.42 Apr 29, 2009 80.68% 18.55% 0.77%

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TOP 10 HOLDINGS AS ON APR 29, 2009 DEBT COMPANY NAME INSTRUMENT RATING NO. OF MARKET DEBENTURES VALUE (RS. IN CRORES) 24.99 NA % OF NET ASSETS

Unitech Ltd. Term Deposit

NCD FD

0.77 NA

EQUITY COMPANY NAME INSTRUMENT NO. OF SHARES MARKET VALUE (Rs. IN CRORES) 176.21 % OF NET ASSETS

Reliance Equity 975535 5.4 Industries Ltd SBI Equity 1220683 156.08 4.78 ONGC LTD. Equity 1230665 106.42 3.26 Jindal Steel & Equity 640724 104.43 3.2 Power Ltd. ICICI Bank Equity 2043129 97.91 3 Ltd. Bharti Airtel Equity 1287218 96.90 2.97 Ltd. BHEL Equity 563548 93.31 2.86 L&T LTD. Equity 1050698 92.39 2,83 HDFC Bank Equity 803202 88.38 2.71 Ltd. NTPC Ltd. Equity 4382012 83.26 2.55 No. of shares shown above may have been calculated on the basis of percentage of net assets and market values taking NSE closing prices and not necessarily declared by fund house.

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Source- www.sbimf.com

31/3/2009 CHANGE IN PORTFOLIO MANAGEMENT SECTOR NAME CURRENT MONTH 12.92 PREVIOUS MONTH 13.32

Oil & Gas, Petroleum & Refinery Banks Steel Power Generation, Transmission & Equip Housing & Construction Cement Electricals & Electrical

B C D

12.02 6.56 6.12

18.34 6.15 6.61

4.98

3.59

F G

4.94 4.74

5.08 4.81

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Equipments H Engineering & Industrial Machinery Telecom Finance 4.42 3.75

I J

4.03 3.88

4.07 11.07

RELIANCE TAX SAVER FUND DIVIDEND Fund Size as on Fund Size (Rs. In crores) Asset Allocation as on Equity Debt Others Apr 29, 2009 1511.65 Apr 29, 2009 76.56% 0% 23.44%

TOP 10 HOLDING AS ON APR 29, 2009 EQUITY COMPANY NAME INSRUMENT NO. OF SHARES MARKET VALUE (RS. IN CRORE) 132.31 % OF NET ASSETS

Other Equities

Undisclosed EQ Equity Equity 900000 500000

8.75

SBI Reliance Industries Ltd.

115.07 90.31

7.61 5.97

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Areva T and D India Ltd Pfizer Ltd. Cipla Ltd. Tata Consultancy Services Ltd. Infosys Technologies Ltd. HDFC Ltd. Wipro Ltd

Equity

3320340

72.43

4.79

Equity Equity Equity

783690 2073741 712000

56.51 49.93 44.40

3.74 3.3 2.94

Equity

39.42

2.61

Equity Equity

225900 1080400

35.75 39

2.58 2.36

*Note:- No. of shares shown above may have been calculated on the basis of percentage of net assets and market values taking NSE closing prices and not necessarily declared by fund house.

31/3/2009 CHANGE IN PORTFOLIO (SECTOR-WISE)(%) SECTOR NAME CURRENT MONTH 13.54 11.68 11.01 9.44 PREVIOUS MONTH 17.43 8.97 11.90 5.65

A B C D

Miscellaneous Banks Pharmaceuticals Computers Software & Education Oil & Gas, Petroleum & Refinery Finance Engineering & Industrial

5.97

5.69

F G

4.60 4.36

2.91 5.04

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Machinery H I J Auto & Auto ancillaries Entertainment Fertilizers, Pesticides & Agrochemicals 3.91 2.70 2.06 4.76 2.21 1.99

Source- www.reliancemutuafunds.com

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GRAPH REPRESENTING COMPARISION BETWEEN THE FUNDS AND THE BENCHMARK BSE-100 OF 6 MONTHS

GRAPH REPRESENTING COMPARISION BETWEEN THE FUNDS AND THE BENCHMARK BSE-100 OF 1 YEAR

Source www.mutualfundsindia.com PURPLE - Reliance Tax Saver Fund Growth BLUE RED - SBI Magnum Tax Gain Scheme 93 - Growth - BSE100

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COMPARISON OF VARIOUS FACTORS RELIANCE TAX SAVER GROWTH SBI MAGNUM TAX GAIN GROWTH

Mean Standard Deviation Sharpe Beta Correlation (return & risk)

-0.43 4.32 -0.12 0.72


0.71

-0.55 5.13 -.13 0.87


0.86

Standard Deviation - Standard Deviation is a measure of risk i.e. how much the actual performance of a fund over a period of time deviates from the average performance. Standard deviation is a statistical measurement that sheds light on historical volatility. For example, a volatile stock will have a high standard deviation while the deviation of a stable blue chip stock will be lower. A large dispersion tells us how much the return on the fund is deviating from the expected normal returns. A low Standard Deviation is good so Reliance has 4.32 in comparison to SBI's 5.13. Sharpe Ratio -The Sharpe Ratio of a fund measures whether the returns that a fund delivered were commensurate with the kind of volatility it exhibited. This ratio looks at both, returns and risk, and delivers a single measure that is proportional to the risk adjusted returns. Mathematically the Sharpe ratio is the returns generated over the risk free rate, per unit of risk. Risk in this case is taken to be the fund's standard deviation. As standard deviation represents the total risk experienced by a fund, the Sharpe ratio reflects the returns generated by undertaking all possible risks{systematic risk(inflation, interest, recession) and unsystematic risk(fund)}. It is thus one single number, which represents the trade off between risks and returns. A higher Sharpe ratio is therefore better as it represents a higher return generated per unit of risk. Since

38

Sharpe Ratio is a measure of risk-adjusted returns, a high Sharpe Ratio is good. Beta - A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM), a model that calculates the expected return of an asset based on its beta and expected market returns..Also known as "beta coefficient". Reliance's beta ratio is 0.72 wich is lower than SBI's 0.87 so, Reliance is better than SBI. Correlation - Correlation is explaining the relation between the risk and the return in the funs. Perfect positive correlation (a correlation co-efficient of +1) implies that as return moves, either up or down, the risk will move in lockstep, in the same direction. Alternatively, perfect negative correlation means that if one moves in either direction the other that is perfectly negatively correlated will move by an equal amount in the opposite direction. If the correlation is 0, the movements are said to have no correlation. SBI has 0.86 correlation which has higher than Reliance i.e 0.71 so SBI is better than Reliance in this way.

Interpretation:SCHEME NAME 1 MTH % 27.81 3 6 1 MTH% MTH% YR % 55.58 50.06 3 YRS % NAV CATEGORY STRUCTURE

Reliance Tax Saver Fund Growth Reliance Tax Saver Fund Dividend SBI Magnum Tax Gain Scheme 93 Dividend SBI

-3.82 3.92

14.05

Equity

Open Ended

27.82

55.58

50.07

-3.84 3.92

12.32

Equity

Open Ended

30.11

60.43

61.67

-9.95 9.65

37.46

Equity

Open Ended

30.09

60.48

61.72

-9.98 9.66

46.09

Equity

Open Ended

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Magnum Tax Gain Scheme 93 Growth Average 28.96 performance of similar category funds 58.02 55.88 -6.9 6.79 27.48 -

*Note:- Returns calculated for less than 1 year are Absolute returns and returns calculated for more than 1 year are compounded annualized. According to the table given above the returns showed by Reliance tax saver fund (growth) for 1 month gives a return of 27.81%weheras SBI magnum tax gain (growth) gives 30.06% that shows if an investor is investing just for 1 month he gets a higher return from SBI magnum tax gain fund (growth) if he continue it for three months than also he gets a slightly less return than as of Reliance tax saver(growth)as Reliance (growth) will give a 50.03%higher return as compared to its 1 months investment whereas SBI (growth)will give an increased growth of 49.75% which is less thn0.28% now if we go further i.e for 6 months the return for Reliance reduces to 50.06% whereas SBI gets a gain of 61.72% now for 1 year investment Reliance gives a return of -3.82% (compounded annualized) whereas SBI get -9.98% (compounded annualized ) it means almost 10% it means if an investor wants to invest for just 1 year he should go for Reliance but if he wants it for longer term say 3 years then he is getting a return of 9.66 from SBI and 3.92 from Reliance same is the case with both companies dividend option so my interpretation says that as for tax saving and as an investment option an investor should go for SBI magnum tax gain as it is giving a higher return (for long term)with higher net asset value.

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Chapter 4
Objective of research:- To know the perception of current investors v/s potential investors about systematic investment plans. To find out the correlation between the risk and the return of the mutual funds using the tool. Research Methodology This chapter deals with the research methodology adopted by me to conduct the survey. It also gives information about the universe and data collection methods used. The research is regarding Perception of current investors v/s potential investors in systematic investment plan (S.I.P) A crucial part of my research called for developing the most efficient plan for gathering the needed information. Under it, designing the research plan called for decisions on the data sources, research approaches, and research instruments, sampling plan and contact methods. The universe of my study, however, includes public, all the brokerage firms and institutions operating in this part of globe public. There was also a need for gathering secondary and primary data in my research. * At the initial phase I met different agents and peoples placed in areas of Noida in order to get the market feed back and the potential for the new investors to invest. * My research methodology also involved the process to analyze the perception about SBI Mutual Fund v/s Reliance Mutual Fund. Sample size - Survey of 80 people Tool used Z test and correlation

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Problems faced while conducting survey:* Designing of questionnaire it must be made in such a lucid way so that it can be easily answered. * Second problem for this research was to find people who could correctly respond to the questioners * Finding of potential customers was another problem . * Right place for conducting survey for this I choose Great India Place, and Centrestage mall in Noida. * Further in this process I was also required to work upon to categorize the data to produce a result it includes differentiating between the current investors view and potential investors view about sip Analysis of data:For analysis of data I have to go through each and every questionnaire to extract the desired data as well as to remove the unwanted questionnaire or can say the questionnaire which are filled wrongly or incorrectly or we can say screening of the questionnaire was done so that we can get the refined answers. Techniques used Whole techniques are represented by pie charts and bar graphs and other is done through the SPSS:Chart 1:The bar chart is shown below is about the different age group of different targeted customer Age group:A-below 25 B- 25to 34 yrs C- 35to 44 D- 45to 54 E- 55to 64 yrs F- 65and above

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Series1, 44-54, Series1, 55-64, 17 16 Series1, 65and Series1, 35-44, above, 15 14 Series1, 25-34, 12 below 25 25-34 Series1, below 25, 6 35-44 44-54 55-64 65and above

This bar graph shows that major investors are of age group 35-64 as this age group is said to be saturation period for some people and after this age they retire from job so they try to generate income from investment market for there old age. Chart 2:This chart shows the different income slabs of the bank customer which were surveyed
Series1, 10 lacs and above, 5, 6% Series1, less then 2 lacs, 9, 11%

less then 2 lacs Series1, 5-10 lacs, 18, 23% Series1, 2-5 lacs, 48, 60% 2-5 lacs 5-10 lacs 10 lacs and above

This chart shows that most of the investors are of income scale between 2-5 lacks per annum. Chart 3:43

Persons usual means of savings:Series1, self retained, 1, 1% Series1, bank deposit, 19, 24%

Series1, investment, 44, 55%

bank deposit

Series1, fd, 16, fd 20% investment self retained

The above chart shows that apart from bank savings now the people are investing readily in the stock market as the data collected shows that 44 people out of 80 have said that we are happy in investing in stock markets as it gives higher return as compared to bank or other financial instrument. Chart 4:Percentage of total income that is spent on investment:Series1, percentage of income spent on investment dont save , 1, 1% Series1, percentage of percentage of income spent income spent on investment on investment dont save 1-5%, 9, 11% percentage of income spent on investment 1-5% percentage of income spent on investment 6Series1, 10% percentage of percentage of income income spent spent on investment 10% on investment -more 6-10%, 16, 20%

Series1, percentage of income spent on investment 10% -more, 54, 68%

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This chart shows that the after the market crash still the percentage of income spent in investment market is more then 10% of the total income of the investors Chart 5:Ranking of product according to benefits provided:According to survey:-

Series1, tax savings, 25, 28%

Series1, sip, 26, 29%

sip pure debt pure equity

Series1, pure debt, 2, 2% Series1, pure Series1, Ulips, equity, 10, 11% 17, 19% Series1, fd, 10, 11%

fd Ulips tax savings

29% said that SIP is best for them For pure equity 11% said best For fixed deposits 11% said best Pure debt only 2% said best ULIPS only 19% said best Tax savings 28% said best From above data we can clearly say that most of the investors prefer SIP over other investment products Chart 6:-

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Company preferred most by investors for SIP:-

sbi reliance hdfc uti

From the above graph it clearly shows that SBI is the most preferred company over other as 31% of total sample size have given there first preference to SBI and its closest next is UTI with 26% and then Reliance with 25 % and at last HDFC with 18%.

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Interpretation
Z test Hypothesis for Zstat = x1 - x2 12/n1 + 22 /n2 = 5.224 5.238 10.942/100 + 10.042/100 = 6.34 we know, Ztab = 1.96 Decision : Since Zstat > Ztab that means we have to reject the null hypothesis

Since H0 is rejected so here in this case we have to apply correlation now.

Correlations VAR0000 VAR0000 1 2 Risk Pearson Correlation Sig. (2-tailed) 1 .767* .017

N 80 80 Return Pearson .267* 1 Correlation Sig. (2-tailed) .017 N 80 80 *. Correlation is significant at the 0.05 level (2-tailed). Interpretation : The value of Pearson coefficient correlation is 0.76 signifies the positive correlation between risk and return of mutual funds it means an investor having high return if he

47

is ready to take high risk and if his risk is low then his return would be low, this signifies the positive correlation between them.

48

Results
From the above analysis I have found few observations: * SBI still owns its reputation as a trusted brand over there is as it is a public sector company and people still think that there money is safe as compared to other mutual fund companies. * SIP is preferred as a good means of investment as it provides investment in installments. * As most of the population earns in the range of 2-5 lacks pa so they want to invest their money in a safer company, as they cant bear a huge loss. * As people have got lesson from the previous market crash so they dont want to invest in bulk as they are scared of huge loss. * Most of the investors invest for tax saving purpose. * Now as market is improving so few of new investors are also investing in market. * Due to market crash the investor who skipped from market have also started reinvesting but with less amount. * Now almost all age group starting from collage going students to a retired person are also taking interest in investing in market. * SEBI has made few amendments in investment policies to attract investors. * There is have no entry no entry load if they made direct investment and after lockin period no exit load. * Few companies put no entry or exit load on certain amount (if invested in huge amount).

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Limitations
The sample size may not be sufficient enough to arrive at a correct decision with respect to population to be surveyed. People were not co-operative enough to provide information regarding their investment. Since the sample size was small the overall view was not available. Many of the respondent hesitated to divulge the correct amount of their monthly income. Some of the respondent took help of the imagination instead of reality. During the survey there may be few customers who may not have complete knowledge of the market.

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Conclusion
Overall I found that on the basis of SBI average return and its brand value customers rely on it .It tries to bring best funds in the market according to the needs of the customers and That is why it is counted among top most mutual fund companies. Part 1 :- And about its systematic investment plans people consider it most reliable as few of the points which people count are that when the amount will b credited and tax deduction etc are taken care of. Its SIP dates are also considered very good to work with and easy to remember of every month. Part 2:-And about my research regarding perception of current investors v/s potential investors also proves that the investors who are willing or going to invest for the first time they will go SBI Mutual Fund as every body knows the brand SBI so no body will want to suffer loss in its first investment so maximum have responded to invest through SBI Mutual Fund.

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Recommendations
Few of my recommendations to improve the quality for SBI Mutual Fund:* More stress to be put on marketing of the products, which are under performing. * More stress to be put on SIP to attract lower middle class so that number of investors should increase. * Targets given to the employees should be taken seriously. * Lethargic approach towards customers and company should be avoided. * SBI Mutual Fund should try to stand on its own name instead of SBI banks brand name. * Operations regarding transfer and other facilities should be made more prompt and fast in nature. * The employees should maintain restriction and punctuality.

52

References
The list of websites referred: http://www.sbimf.com/downloads_factsheets.asp http://www.sbimf.com/downloads_offer.asp http://www.sbimf.com/Product_Details.asp?ProductId=15 http://www.reliancemutual.com/OurSchemes/ContentDisplay.asp http://www.reliancemutual.com/CMT/Upload/OfferDocument/Reliance%20Tax http://www.reliancemutual.com/Downloads/Default.asp http://www.mutualfundsindia.com/comparefund.asp http://www.mutualfundsindia.com/fundfactsheet.asp http://www.new.valueresearchonline.com/funds/h2_fund_compare.asp http://www.new.valueresearchonline.com/learning/CalcSIPReturn.asp

Factsheets and brochures: SBI Mutual Fund May 09 and June, 09 edition Reliance Mutual Fund May 09 and June, 09 edition

53

Appendix
QUESTIONNAIRE (Dear Respondent, We will be grateful to you if you spare some of your precious time to respond the following questions. Your response will be kept confidential and would be used for the purpose of study only) NameAgeMarital StatusNo. of Dependents1. In which range would your income fall? a) Less the 2 lakhs b) 2-5 lakhs c) 5-10 lakhs d) More than 10 lakhs 2. What is your usual means of savings? a) Bank deposits (savings a/c) b) Fixed deposits c) Investment d) Self retaining 3. Have you invested in any type of financial instrument? a) Yes b) No

54

4. Do you invest in financial instrument like shares, bonds etc ? a) Yes b) No 5. The percentage of your total income that you currently invest is approximately: a) I do not currently save any income. b) Between 0% - 5% c) Between 6% - 10% d) Greater than 10% 6. Are you aware of mutual funds as an investment option? a) Yes b) No 7. Which of these objectives best describes your investment strategy? a) Preserve principal rather than grow assets b) Maintain purchasing power while generating current income c) Increase portfolio value with small chance for loss d) Strong asset growth with moderate value fluctuation e) Maximize returns with high chance of value fluctuation 8. Do you invest in mutual Funds? a) Yes b) No 9. On the basis of secure return where do you place mutual funds product?

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a) Unreliable 1 2 3 4 5 6 7 Reliable b) Safe 1 2 3 4 5 6 7 Unsafe c) Low risk 1 2 3 4 5 6 7 High risk d) Low return 1 2 3 4 5 6 7 High return 10. Have you ever invested in any SIP (systematic investment plan) of any mutual fund comp? a) Yes b) No 11. Rank the products according to benefits provided (best1-worst5) a) SIP (systematic investment plan) b) Pure debt c) Pure equity d) Fixed deposits e) ULIPS f) Tax savings 12. How would you rate your knowledge regarding mutual funds? Poor1. 2.. 3.. 4. 5. 6.. 7 excellent 13. What do you think of SIP? a) It is a good way to minimize your risk b) It is just a simple investment to get good return c) It is a plan like FD and FMP with fixed return d) Dont know

56

14. Do you plan to take SIP in future? a) Yes b) No c) Dont know 15. Which company would you prefer to buy S.I.P from? a) SBI b) Reliance c) HDFC d) UTI

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