Project complete

Introduction

A Mutual Fund is a body corporate registered with the Securities

and Exchange Board of India (SEBI) that pools up the money from

individual/corporate investors and invests the same on behalf of

the investors/unit holders, in Equity shares, Government

securities, Bonds, Call Money Markets etc… and distributes the

profits. Mutual Fund 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.

Mutual Fund is the most suitable investment for the common man as

it offers an opportunity to invest in a diversified,

professionally managed basket of securities at a relatively low

cost. Mutual funds enables even the small investors access

to professionally managed, diversified portfolios of equities,

bonds and other securities, which would be quite difficult (if

not impossible) to create with a small amount of capital. Each

shareholder participates proportionally in the gain or loss of

the fund. Mutual fund units, or shares, are issued and can

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typically be purchased or redeemed as needed at the fund's

current net asset value (NAV) per share, which is sometimes known

as NAVPS.

The idea of mutual funds can be traced to Belgium where ‘Society

Generale de Belgique’ was established in 1822 as an investment

company to finance investments in national industries. This

concept of mutual fund spreads to USA in the early 20th century

and three investment companies were started in 1924. In the

periods after the Second World War the mutual fund culture was

increasing in USA. Since then it has been spreading all over the

world. The first introduction of a mutual fund in India occurred

in 1963, when the Government of India launched Unit Trust of

India (UTI). Until 1987, UTI enjoyed a monopoly in the Indian

mutual fund market.

Then a host of other government-controlled Indian financial

companies came up with their own funds. These included State Bank

of India, Canara Bank, and Punjab National Bank. This market was

made open to private players in 1993, as a result of the historic

constitutional amendments brought forward by the then Congress-

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led government under the existing regime of Liberalization,

Privatization and Globalization (LPG). The first private sector

fund to operate in India was Kothari Pioneer, which later merged

with Franklin Templeton.

ICICI

ICICI Bank is India's second-largest bank. It is a privately

owned bank. The Bank has a network of 2,755 branches and 9,363

ATMs in India, and has a presence in 19 countries, including

India. ICICI Bank was originally promoted in 1994 by ICICI

Limited, an Indian financial institution. In 1999, ICICI become

the first Indian company and the first bank or financial

institution from non-Japan Asia to be listed on the NYSE.

SBI

State Bank of India is the largest banking and financial service

company in India by revenue and total assets. It is a public

sector bank. The bank traces its ancestry to British India,

through the imperial bank of India, which was formed by merging

of bank of madras with two presidency banks, making it the oldest

3

bank in India. State Bank of India started mutual fund only on

November 1987. It was only second mutual fund in India.

Statement of the problem:

A mutual fund is a trust that collects the income of a number of

investors who share a common financial goal and pools it together

to create a larger resource of money. Thus the money collected is

invested by the fund manager in different type of securities

according to the objective of the scheme. These could range from

shares to debentures to money market instruments. These could be

subdivided into pharmaceutical securities, technological

securities, FMCG securities etc... The income earned through

these investment and capital appreciation realized by the schemes

are shared by its unit holders proportionately ie on the basis if

number of units owned by them (pro-rata).

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In recent year’s mutual fund has emerged as a tool for ensuring

one’s well-being .They has not only contributed to India’s growth

but have also helped into success of India. So after paying

grocery bills, home loan installments, tuition fees and the

likes, people have started to save some pennies and have made up

the mind to invest in mutual fund.

Today due to more competition between the mutual fund companies,

they are providing a great variety of schemes to attract thenand

satisfy their customers. We can see that there are more schemes

of different companies with same features They also come with a

number of different investment objectives that are launched from

time to time like schemes according to maturity period, schemes

according to investment objectives, special schemes etc. Your

pile of investment will only grow when you will invest in the

right fund taking into account your investment objectives. This

project will compare the different schemes of ICICI Mutual fund

and SBI Mutual fund in this respect.

5

Scope of the study:

The main scope is to get correct knowledge regarding various

mutual fund schemes that are available through ICICI Mutual fund

and SBI Mutual fund. There are plenty of schemes available in the

market that caters to meet the personal financial obligations

such as children's education, marriage, retirement etc.. of an

investor. Unless the mutual fund schemes are tailor-made to the

investor’s changing needs and unless the AMC’s understand

the selecting or switching or switching behavior of the

investors, survival of funds will be difficult in future.

With this background an attempt is made in this to study the

performance of various funds of ICICI and SBI at various point of

time and its volatility.

The project is limited to comparison of mutual fund schemes of

ICICI Mutual fund and SBI Mutual fund. As a result of the big

boom witnessed in the mutual fund industry in recent times, they

are trying to gain more market share in the rapidly improving

market.

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Objectives of the study :

Primary Objectives:

Comparison of mutual fund schemes of ICICI Prudential Fund and

SBI MF

Secondary Objectives:

a. To analyze various schemes of ICICI Prudential Fund and SBI

Mutual Fund

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b. To find whether customers prefer to invest in mutual funds in

ICICI Prudential Fund or SBI Mutual Fund.

c. To analyze merits and demerits of investing in mutual funds of

ICICI Prudential Fund and SBI Mutual Fund

Methodology:

Convenience sampling method is used

Primary Data:

Primary data include data which are collected for the first time

they are original in character. They are collected by the

researcher for the first time for his own use.

a. Questionnaire

b. SAMPLE SIZE 20 GENERAL INVESTORS

Secondary Data:

Secondary data are those which have already been collected

by others. When it is not possible to collect data in

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primary form the researcher may take the help of

Secondary data.

a. Newspaper

b. Websites

c. Brochures Published by banks

Tools of analysis:

Percentage analysis and pie charts have been used to depict which

of the two ie SBI Mutual fund and ICIC Mutual fund have better

investment plans.

Various other charts and graphs have been used for supporting the

data.

Limitations:

a. Errors While collection of data.

b. Time limit.

c. Response of customer

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Review of literature

INTRODUCTON

A mutual fund is just the connecting bridge or a financial

intermediary that allows a group of investors to pool their money

together with a predetermined investment objective. The mutual

fund will have a fund manager who is responsible for investing

the gathered money into specific securities (stocks or bonds).

When you invest in a mutual fund, you are buying units or

portions of the mutual fund and thus on investing becomes a

shareholder or unit holder of the fund.

Mutual funds are considered as one of the best available

investments as compare to others they are very cost efficient and

also easy to invest in, thus by pooling money together in a

mutual fund, investors can purchase stocks or bonds with much

lower trading costs than if they tried to do it on their own. But

the biggest advantage to mutual funds is diversification, by

minimizing risk & maximizing returns.

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A mutual fund serves as a link between the investor and the

securities market by mobilizing savings from the investors an

divesting them in the securities market to generate returns.

Thus, a mutual fund is akin to portfolio management services

(PMS). Although, both are conceptually same, they are different

from each other. Portfolio management services are offered to

high net worth individuals; taking into account their risk

profile, their investments are managed separately. In the case of

mutual funds, savings of small investors are pooled under a

scheme and the returns are distributed in the same proportion in

which the investments are made by the investors/unit-holders.

Definitions of Mutual Fund

Securities and Exchange Board of India (Mutual Fund) Regulations

(SEBI), 1996 define mutual fund as “a fund established in the

form of a trust to raise monies through the sale of units to the

public or a section of the public under one or more schemes for

investing in securities, including money market instruments”.

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According to the above definition, a mutual fund in India can

raise resources through sale of units to the public. It can be

setup in the form of a Trust under the Indian Trust Act. The

definition has been further extended by allowing mutual funds to

diversify their activities in the following areas:

· Portfolio management services

· Management of offshore funds

· Providing advice to offshore funds

· Management of pension or provident funds

· Management of venture capital funds

· Management of money market funds

· Management of real estate funds

Merriam –Webster’s Dictionary defines mutual fund as “ an open-

end investment company that invests money of its shareholders in

a usually diversified group of securities of other corporations”.

The Wikipedia has defined mutual fund as “a type of

professionally-managed collective investment scheme that pools

money from many investors to purchase securities.[1]

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While there is no legal definition of mutual fund, the term is

most commonly applied only to those collective investment schemes

that are regulated, available to the general public and open-

ended in nature”.

The investopedia defines mutual fund as an investment

vehicle that is made up of a pool of funds collected from many

investors for the purpose of investing in securities such as

stocks, bonds, money market instruments and similar assets.

Mutual funds are operated by money managers, who invest the

fund's capital and attempt to produce capital gains and income

for the fund's investors. A mutual fund's portfolio is structured

and maintained to match the investment objectives stated in its

prospectus.

Types of Mutual Funds

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The concept of mutual funds has proven to be immensely popular

among investors. The relative simplicity of mutual funds make

them attractive to small investors and those who are

inexperienced in the stock market or do not have the time to

study stock market trends and invest accordingly.

Various criteria can be used to differentiate Mutual Funds. Each

type of mutual fund has a specific investment objective

Some characteristics based on which mutual funds can be

classified are:

The asset class in which the mutual fund has made invested -

for example stock or equity-based funds, bond mutual funds,

money market mutual fund etc.

The sector in which the mutual fund predominantly invests -

for example Power sector, energy sector etc.

Investment objective of the mutual fund - for example growth

fund or monthly income funds

Flexibility of number of shares in the mutual fund - for

example open-ended or closed end funds

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Type of equity investments of a mutual fund such as blue

chip mutual fund or large cap, mid cap or small cap mutual

funds

Other special investment funds such as index funds or hedge

fund

Types of Mutual Funds based on Asset Class

Here are a few types of mutual funds based on asset class

investment

1. Equity Fund

This type of mutual fund makes investments in the stocks of

companies listed on major share markets. Equity Mutual Funds

help in shielding unseasoned investors from the risk they

would have incurred if they had directly invested in the

stock market. The fund manager makes the investment

decisions for the investor.

In Equity mutual funds, the fund portfolio may be mixed,

having stocks from various sectors or they may concentrate

on a particular sectors. They may also tilt towards largecap

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or mid cap stocks. Fund information may list the stocks

invested by the fund and may also give their weightage.

2. Bond or Debt funds

Bond or Debt mutual funds include bonds issued by the

Government and other institutions in their fund portfolio.

The portfolio of the mutual fund may include investments in

a mix of Government securities, corporate bonds, Public

Sector Unit (PSU) bonds as also securitized debt.

Bonds are more secure than shares as they are usually fixed-

interest, though not always. Investments in government bond

are also said to be a refuge of stability. This is ideal for

those investors looking for low risk, high stability and

regular income.

The mutual fund portfolio can be studied to see the

percentage of investments in various types of bonds.

Types of Mutual Funds according to Returns

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1. Growth fund

This type of mutual fund targets aggressive capital

appreciation. The financial objective of a growth fund is to

see the investment exhibit optimal growth over a period of

time. This approach is riskier and more volatile than a

regular income mutual fund.

2. Dividend or regular income funds

As the name implies, the investment objective here is

regular income in the form of dividends. Capital

appreciation is not the important goal. Regular income funds

are safer than a Growth fund.

Types of mutual fund according to schemes

1. Open - Ended Schemes:

An open-end fund is one that is available for subscription all

through the year. These do not have a fixed maturity. Investors

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can conveniently buy and sell units at Net Asset Value ("NAV")

related prices. The key feature of open-end schemes is liquidity.

2. Close - Ended Schemes:

These schemes have a pre-specified maturity period. One can

invest directly in the scheme at the time of the initial issue.

Depending on the structure of the scheme there are two exit

options available to an investor after the initial offer period

closes. Investors can transact (buy or sell) the units of the

scheme on the stock exchanges where they are listed. The market

price at the stock exchanges could vary from the net asset value

(NAV) of the scheme on account of demand and supply situation,

expectations of unit holder and other market factors.

Alternatively some close-ended schemes provide an additional

option of selling the units directly to the Mutual Fund through

periodic repurchase at the schemes NAV; however one cannot buy

units and can only sell units during the liquidity window. SEBI

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Regulations ensure that at least one of the two exit routes is

provided to the investor.

3.Interval Schemes: Interval Schemes are that scheme, which

combines the features of open-ended and close-ended schemes.

The units may be traded on the stock exchange or may be open

for sale or redemption during pre-determined intervals at

NAV related prices

Some Special Mutual Funds

1. Hybrid or Balanced Funds

This type of mutual fund makes investments across a range of

assets. A hybrid or balanced fund portfolio may include

equity or stocks, bonds and debt, cash and other assets

2. Fund of Funds

This special type of mutual fund invests in other mutual funds

all over the world or in specific countries.

The mutual fund portfolio in this case would include sub-funds.

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Advantages of Mutual Fund

Diversification

Using mutual funds can help an investor diversify their portfolio

with a minimum investment. When investing in a single fund, an

investor is actually investing in numerous securities.

Spreading your investment across a range of securities can help

to reduce risk. A stock mutual fund, for example, invests in

many stocks - hundreds or even thousands. This minimizes the

risk attributed to a concentrated position. If a few securities

in the mutual fund lose value or become worthless, the loss may

be offset by other securities that appreciate in value. Further

diversification can be achieved by investing in multiple funds

which invest in different sectors or categories. This helps to

reduce the risk associated with a specific industry or category.

Diversification may help to reduce risk but will never completely

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eliminate it. It is possible to lose all or part of your

investment

Professional Management

Mutual funds are managed and supervised by investment

professionals. As per the stated objectives set forth in the

prospectus, along with prevailing market conditions and other

factors, the mutual fund manager will decide when to buy or sell

securities. This eliminates the investor of the difficult task

of trying to time the market. Furthermore, mutual funds can

eliminate the cost an investor would incur when proper due

diligence is given to researching securities. This cost of

managing numerous securities is dispersed among all the investors

according to the amount of shares they own with a fraction of

each dollar invested used to cover the expenses of the fund.

What does this mean? Fund managers have more money to research

more securities more in depth than the average investor.

Convenience

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With most mutual funds, buying and selling shares, changing

distribution options, and obtaining information can be

accomplished conveniently by telephone, by mail, or online.

Although a fund's shareholder is relieved of the day-to-day tasks

involved in researching, buying, and selling securities, an

investor will still need to evaluate a mutual fund based on

investment goals and risk tolerance before making a purchase

decision. Investors should always read the prospectus carefully

before investing in any mutual fund.

Transparency

All fund houses give a detailed break up of their portfolio and

come out with new letters every month. There NAVs are easily

available on line and in newspapers too. AMFI regulates all

mutual funds ensuring that they follow rules and are managed

well.

Potential of Returns

Returns in the mutual funds are generally better than any other

option in any other avenue over a reasonable period. People can

pick their investment horizon and stay put in the chosen fund for

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the duration. Equity funds can outperform most other investments

over long periods by placing long-term calls on fundamentally

good stocks. The debt funds too will outperform other options

such as banks.

Disadvantages

No Guarantees

No investment is risk free. If the entire stock market declines

in value, the value of mutual fund shares will go down as well,

no matter how balanced the portfolio. Investors encounter fewer

risks when they invest in mutual funds than when they buy and

sell stocks on their own. However, anyone who invests through a

mutual fund runs the risk of losing money.

Fees and commissions

All funds charge administrative fees to cover their day-to-day

expenses. Some funds also charge sales commissions or "loads" to

compensate brokers, financial consultants, or financial planners.

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Even if you don't use a broker or other financial adviser, you

will pay a sales commission if you buy shares in a Load Fund.

Taxes

During a typical year, most actively managed mutual funds sell

anywhere from 20 to 70 percent of the securities in their

portfolios. If your fund makes a profit on its sales, you will

pay taxes on the income you receive, even if you reinvest the

money you made.

Management risk

When you invest in a mutual fund, you depend on the fund's

manager to make the right decisions regarding the fund's

portfolio. If the manager does not perform as well as you had

hoped, you might not make as much money on your investment as you

expected. Of course, if you invest in Index Funds, you forego

management risk, because these funds do not employ managers

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INDUSTRY PROFILE AND COMPANY PROFILE

Industry Profile

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A Mutual Fund is a trust that pools the savings of a number of

investors who share a common financial goal. The money thus

collected is then invested in capital market instruments such as

shares, debentures and other securities.

The history of mutual funds, dates back to 19th century Europe,

in particular, Great Britain. Robert Fleming set up in1868 the

first investment trust called Foreign and Colonial Investment

Trust which promised to manage the finances of the moneyed

classes of Scotland by spreading the investment over a number of

different stocks. This investment trust and other investment

trusts which were subsequently set up in Britain and the US,

resembled today’s close-ended mutual funds. The first mutual fund

in the US, Massachusetts Investors Trust, was setup in March

1924. This was the first open-ended 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 .The history of mutual funds

in India can be broadly divided into four distinct phases.

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Phases

FIRST PHASE – 1964-87 (MONOPOLY OF UTI)

An Act of Parliament established Unit Trust of India (UTI) on

1963. 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, 700crores of assets under management

SECOND PHASE – 1987-93 (ENTRY OF PUBLICSECTOR FUNDS)

1987 marked the entry of non- UTI, public sector mutual funds

setup 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 1987followed by Can bank 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).

27

LIC established its mutual fund in June 1989 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.

THIRD PHASE – 1993-2003 (ENTRY OF PRIVATESECTOR 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 erst while 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

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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

Act1963 UTI was bifurcated into two separate entities. One is the

Specified Undertaking of the Unit Trust of India with assets

under the 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, functioning under an

administrator and under the rules framed by Government of India

and does not come under the purview of the Mutual Fund

Regulations. The second is the UTI Mutual Fund Ltd, sponsored by

SBI, PNB, BO Band LIC. It is registered with SEBI and functions

29

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. As at

the end of October 31, 2003, there were 31 funds, which manage

assets of Rs.126726 crores under 386 schemes.

Working of Mutual fund

Mutual fund is set up in the form of a trust, which has sponsor,

trustees, asset Management Company (AMC) and a custodian. The

trust is established by a sponsor or more than one sponsor who is

like a promoter of a company. The trustees of the mutual fund

hold its property for the benefit of the unit-holders. The AMC,

approved by SEBI, manages the funds by making investments in

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various types of securities. The custodian, who is registered

with SEBI, holds the securities of various schemes of the fund 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

fund.

Corporate Profile

SBI Funds Management Pvt. Ltd

SBI Funds Management Pvt. Ltd has a 25 years of rich experience

in fund management. It is a Joint Venture between SBI and AMUNDI

(France), one of the world's leading fund management companies.

SBI Funds Management Pvt. Ltd has a network of over 222 points of

acceptance across India.

SBI Funds Management has been successfully managing and advising

India's dedicated offshore funds since 1988. SBI Funds Management

was the 1st bank sponsored asset management company fund to

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launch an offshore fund called 'SBI Resurgent India Opportunities

Fund' with

an objective to provide our investors with opportunities for

long-term growth in capital, through well-researched investments

in a diversified basket of stocks of Indian Companies.

SBI Funds Management is one of the largest investment management

firms in India, managing investment mandates of over 5.4 million

investors. It has emerged as one of the largest player in India

advising various financial institutions, pension funds, and local

and international asset management companies.

Board of Directors of the AMC

Mr. Pratip Chaudhuri -Chairman & Associate Director

Mr. Jayesh Gandhi

Independent Director

Mr. Deepak Kumar Chatterjee

Managing Director

Dr. H. Sadhak


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Mrs. Madhu Dubhashi


Dr. H. K. Pradhan


Mr. Shyamal Acharya

Associate Director

Mr. Shishir Joshipura


Mr. Thierry Raymond Mequillet

Associate Director

Mr. Fathi Jerfel

Associate Director

Mr. Philippe Batchevitch

Alternate Director to Mr. Jerfel

Performance Overview

33

SBI Mutual Fund saw a total inflow of Rs.4,65,364 crore (Previous

year Rs.2,86,966 crore) in the domestic open and close-ended

funds during the year. The inflows took place predominantly in

the liquid and debt funds. The total redemption amounted to

Rs.4,61,658 crore (Previous year Rs.2,83,692 crore), leaving a

net inflow of Rs.3,706 crore (industry net outflow Rs 49,406

crore) as against a net inflow of Rs.3,274 crore (industry net

inflow Rs.83,081 crore) in the previous year. The closing assets

under management of the domestic schemes of SBI Mutual Fund as on

31st March, 2011 were Rs.42,019 crore as against Rs 36,692 crore

as on 31st March, 2010

Signifying a growth of 14.50%. The average assets under

management, which were Rs.36,704 crore for the quarter ended 31st

March, 2010, increased to Rs.41,672 crore for the quarter ended

31st March, 2011 signifying a growth of 13.54%.

Awards

Some of the awards won by SBI Mutual Fund Management Pvt

Ltd

34

2012

ICRA Mutual Fund Awards 2012 For Various Schemes

2011

Readers Digest Awards 2011 For Trusted Brand in Fund

Management Category

ICRA Mutual Fund Awards 2011 For Magnum Income Fund -

Floating Rate Plan - Long Term Plan

2010

ICRA Mutual Fund Awards 2010 For Magnum Global Fund

2009

ICRA Mutual Funds Awards 2009 For Magnum Tax Gain Scheme

1993

The Lipper India Fund Awards 2009 For Various Schemes

2008

Outlook Money NDTV Profit Awards 2008

The Lipper India Fund Awards 2008 For Magnum

Balanced Fund – Dividend

ICRA Mutual Fund Awards 2008 For Various Schemes

2007

35

Outlook Money NDTV Profit Awards 2007

CNBC Awaaz Consumer Awards 2007

The Lipper India Fund Awards 2007 For Various Schemes

ICRA Mutual Funds Awards 2007 For Various Schemes

CNBC TV18 - CRISIL Mutual Fund of the Year Award 2007 For

Various Schemes

ICICI Prudential Asset Management Company

Ltd

ICICI Prudential Asset Management Company Ltd. (IPAMC/ the

Company) is the joint venture between ICICI Bank, a well-known

and trusted name in financial services in India and Prudential

Plc, one of UK’s largest players in the financial services

sectors. IPAMC was incorporated in the year 1993.The Company in a

span of over 18 years since inception and just over 13 years of

the Joint Venture, has forged a position of preeminence in the

Indian Mutual Fund industry as the third largest asset management

company in the country, contributing significantly to the growth

36

of the Indian mutual fund industry. The Company manages

significant Mutual Fund Asset Under Management (AUM), in addition

to Portfolio Management Services and International Advisory

Mandates for clients across international markets in asset

classes like Debt, Equity and Real Estate with primary focus on

risk adjusted returns.

IPAMC has witnessed substantial growth in scale. From merely 2

locations and 6 employees during inception to the current

strength of over 700 employees with reach across around 150

locations, the growth momentum of the Company has been

exponential. The organization today is an ideal mix of investment

expertise, resource bandwidth & process orientation. IPAMC’s

Endeavour is to bridge the gap between savings & investments to

help create long term wealth and value for investors through

innovation, consistency and sustained risk adjusted performance.

Board of Directors: Asset Management Company

Ms. Chanda Kochhar - Chairperson

Mr. Barry Stowe

37

Mr. Suresh Kumar

Mr. Vijay Thacker

Mr. Dileep C. Choksi

Mr. N.S. Kannan

Mr. Nimesh Shah

Mr. C. R. Muralidharan

Directors of the Trustee Company

Mr. M. S. Parthasarthy

Mr. M. N. Gopinath

Mr. Keki Bomi Dadiseth

Mr. Vinod Dhall

Mr. Sandeep Batra

Performance Overview

Performance of scheme:

. Average Assets under Management (AAUM)

The AAUM of the Mutual Fund for the quarter ended March 31, 2012

stood at Rs.

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68,816.49 crore, while for the quarter ended March 31, 2011, the

AAUM of the Mutual

Fund was Rs. 73,551.95 crore.

Awards and Recognition

Some of the prominent awards and recognition earned by ICICI

Prudential are :

Bloomberg UTV Financial Leadership Awards 2011

ICICI Prudential AMC received the coveted UTV Bloomberg

Financial Leadership Award 2011 for “Best Contribution in

Investor Education & Category Enhancement of the year in the

mutual fund category. Mr. Nimesh Shah , Managing Director,

ICICI Prudential AMC received this prestigious accolade from

Honorable Finance Minister, Shri Pranab Mukherjee.

Morning Star Mutual Fund Awards – 2011

India Debt Fund House Award– 2011

Business World Mutual Fund Awards 2010

ICICI Prudential Discovery Fund adjudged Emerging Leader

(Based on past 3-year SIP performance)

39

ICICI Prudential Discovery Fund - Insti.1 adjudged Best

Equity Fund – Mid and Small Cap for the year 2010

Mr Sankaran Naren adjudged Smartest Fund Manager (ICICI

Prudential Discovery Fund) for the year 2010

Mr Sankaran Naren adjudged Best Equity Fund Manager (ICICI

Prudential Discovery Fund ) for the year 2010

NDTV Profit Mutual Fund Awards 2010

ICICI Prudential Discovery Fund - Category – Emerging Leader

(Based on past 3-year SIP performance)

Lipper Fund Awards 2010 India

ICICI Prudential Dynamic Plan-Growth - Best Fund over 3

Years (Mixed Asset INR flexible)

ICICI Prudential Gilt Fund Investment Pl-PF Opt-Gth - Best

Fund over 3 & 5 Years (Bond Indian Rupee – Government

40

Awareness of SBI MF and ICICI Prudential Fund

Table 4.2

41

Options

No of Respondents

Percentage

Yes 18 90No 2 10Total 20 100

Yes No0

2

4

6

8

10

12

14

16

18

20

Graph 4.2

Out of the 20 people 90% of them knew about SBI MF and ICICI

Prudential Fund

Company only a mere 10% was unaware of these mutual fund

companies.

42

43

Reason to select SBI MF

Table 4.4

44

Opinion No of respondents

Percentage

Reputation 8 40Less risk 4 20Low Transaction cost

1 5

Public Company 7 35Total 20 100

Reputation Less risk Low Transaction cost

Public Company0

1

2

3

4

5

6

7

8

9

Graph 4.4

This chart shows us that out of the 20 respondents 40% of would

select SBI MF for its reputation and 20% for its low risk and 5%

for its low transaction cost and the rest i.e. 35% for its view

as a public company

45

Reason to select ICICI Prudential fund

46

Table 4.5

Reputation Less risk Less Transaction

cost

Private Company0

1

2

3

4

5

6

7

8

Graph 4.5

47

Opinion No of

Respondents

Percent

ageReputation 6 30 Less risk 4 20Less

Transaction

cost

7 35

Private

Company

3 15

Total 20 100

In the above mentioned chart 30% of respondents selected ICICI

because of its reputation , 20% of them because of the factor

that the risk involved is less, 35% i.e. the majority selected

it as it takes only a small amount as transaction and thereby

saves investors’ money and 15% as it is a private company.

48

SBI MF Scheme

Table 4.6

49

Scheme No of Respondents

Percentage

Tax Gain Scheme 5 25Blue chip fund 6 30Gilt Fund 2 10Gold exchange tradedscheme

3 15

Other 4 20Total 20 100

Tax Gain Scheme

Blue chip fund

Gilt Fund Gold exchange traded scheme

Other0

1

2

3

4

5

6

7

Graph 4.6

Here 25% of respondents opted for tax gain scheme, 30% for Blue

chip fund, 10% for gilt funds 15% for gold exchange traded

schemes and 20% opted for other schemes

Preferable Blue Chip fund

Table 4.7

50

Company No of Respondents

Percentage

SBI MF 9 45ICICI Prudential Fund

11 55

Total 20 100

SBI MF ICICI Prudential Fund0

2

4

6

8

10

12

Graph 4.7

From the charts we can understand that only 45% of the

respondents would invest in a Blue Chip Fund scheme by the SBI MF

compared to the 55% given to the ICICI Prudential Fund.

Better Gold ETF

Table 4.8

51


2

4

6

8

10

12

14

Graph 4.8

In the above Chart a massive 60% of the respondents were willing

to invest in a gold ETF by the SBI MF compared to the 40% for

ICICI Prudential Fund.

52


Percentage


8 40

Total 20 100

Better Tax saving scheme

Table 4.9

SBI MF ICICI Prudential fund

0

2

4

6

8

10

12

Graph 4.9

53


Percentage

SBI MF 11 55ICICI Prudential fund

9 45

Total 20 100

The above chart has shown us that 55% of the respondents would

choose a Tax gain scheme offered by the SBI Mutual Fund compared

to 45% of the respondents who would choose one by ICICI

Prudential fund.

54

Better asset allocation

Table 4.10

55

Company No of respondents

Percentage

SBI MF 8 40ICICI PrudentialFund

12 60

Total 20 100


2

4

6

8

10

12

14

Graph 4.10

The chart shows us that only 40% of the respondents like to

invest in SBI MF when taking asset allocation into consideration

and a massive 60% would invest in ICICI Prudential Fund.

Better Hybrid Schemes

Table 4.11

56

SBI MF ICICI Prudential Fund

0

2

4

6

8

10

12

Graph 4.11

From the given chart we can understand that Hybrid – Equity

schemes given by both the companies have an equal 50% demand.

57


Percentage


10 50

Total 20 100

More Volatile schemes

Table 4.12


2

4

6

8

10

12

14

Graph 4.12

58


Percentage


12 60

Total 20 100

From the chart we can come to a conclusion that 40% of the agreed

that SBI MF is having more volatile schemes, while 60% said ICICI

has more volatile schemes.

Better Liquid Fund Scheme

Table 4.13

59


Percentage


5 25

Total 20 100


2

4

6

8

10

12

14

16

Graph - 4.13

The chart shows us that most of the respondents i.e.75% say that

SBI MF gives more Liquid Funds schemes compared ICICI Prudential

Fund where only 25% agree that it has better Liquid schemes.

60

Better Income Fund returns

Table 4.14

61


Percentage


9 45

Total 20 100


2

4

6

8

10

12

Graph 4.14

Here we can understand that 55% of the people believe that SBI MF

gives a better income fund return scheme than ICICI Prudential

Fund which has only 45% of the in support of it.

Better Short Term Monthly Plan

62

Table 4.15


2

4

6

8

10

12

Graph 4.15

The above Chart Shows us that an equal percentage of the

respondents i.e.50% think that both the companies have schemes

of equal status in short term monthly income plans.

63


Percentage


10 50

Total 20 100

Better Floating Plan Table 4.16


2

4

6

8

10

12

14

Graph 4.16

In the above mentioned chart 35% of the respondents say that SBI

MF has a better floating plan while 65% say that ICICI Prudential

Fund.

64


Percentage


13 65

Total 20 100

Findings

1. Respondents are very much aware (i.e. 90%) of the existence of

SBI MF and ICICI Prudential Fund Company only a few of them was

unaware of the existence of these mutual fund companies.

2. We were able to find that half of the people in the sample had

invested in SBI MF and the remaining had equally invested in

ICICI Prudential Fund and in other companies

3. Respondents say reputation as the major factor which

encourages them to select SBI MF, next in line comes the fact

that it is a public company and then comes low risk and finally

low transaction cost.

4. In the case of ICICI Prudential Fund low transaction cost is

the major factor which encourages them to select it, next in line

comes reputation and then comes low risk and finally as it is a

private company.

65

5. Most of the respondents say they like to invest in Blue chip

schemes of SBI MF then comes Tax gain schemes other schemes which

are not mentioned in the questionnaire Gold ETF’s and finally

gilt funds.

6. The respondents were in Blue chip schemes offered by the ICCI

Prudential Fund than the one offered by SBI MF.

7. The respondents were willing to invest in a Gold

ExchangeTrardedFund by the SBI MF compared ICICI Prudential Fund.

8. Respondents choose a Tax gain scheme by the SBI MF more likely

to be selected than one by ICICI Prudential fund.

9. ICICI Prudential fund was selected as best over SBI MF when

asset allocation was taken into consideration.

10. Respondents said that both the companies have equally good

Hybrid-Equity schemes.

11. When taking volatility ICICI Prudential fund Led and SBI MF

came only second.

12. Majority of the respondents told SBI MF has better liquid

schemes and only a few disagreed with them.

66

13. SBI MF was selected as the company which has better income

fund return scheme compared to ICICI Prudential fund.

14. Respondents agreed on the fact that both the companies give

equally good short term monthly plans.

15. When Floating plans were taken ICICI Prudential fund was

considered with better ones

compared to SBI MF.

16. Respondents consider SBI MF as a company with more reputation

when compared with ICIC Prudential Fund.

17. To sum up we were able to find that the number of people

willing to invest in SBI MUTUAL FUND was more when compared to

that of ICICI PRUDENTIAL FUND.

67

Suggestions

1. We were able to understand that majority of the respondents

chose SBI MF over ICIC Prudential Fund; it means there

various factors that make SBI’s schemes more likeable to

ICICI Prudential Fund. These problems have to found and

erected

2. SBI MF should try to decrease transaction cost charged as it

is seen that low transaction cost by the ICIC Prudential

Fund is helping it attract more customers.

3. The ICICI Prudential Fund is very poor on liquid fund

schemes when compared to the SBI MF it is an area which

needs improvement.

4. Asset allocation is another factor that gives ICICI

Prudential Fund a lead over SBI MF; they should try to come

over this as people really look at it before deciding an

investment.

5. It was also seen that SBI MF’s Tax saving scheme was not

preferred much, this should be changed as a lot of people

68

invest to get out of paying income tax and so having a good

tax scheme will definitely attract more customers.

ConclusionAfter all the analysis we can come to the conclusion that:

1. SBI Mutual Fund is a more preferred option to invest than

ICICI Prudential fund.

2. Both the companies have their own advantages and

disadvantages in the different schemes they offer. For e.g.

SBI Mutual Fund was told to have better liquid fund schemes

than ICICI Prudential fund but not so good when taking their

Blue Chip fund schemes.

69

3. SBI Mutual Fund was selected as one with more reputation

when compared to ICICI Prudential fund.

4. Schemes offered by the SBI Mutual Fund are more preferred by

the respondents.

5. Most of the respondents i.e. 100% were very much aware of

the existence of SBI Mutual Fund and ICICI Prudential Fund.

70

Documents

Project complete