A STUDY ON THE PERFORMANCE AND INVESTORS OPINION ABOUT SBI

MUTUAL FUND

OBJECTIVES OF THE STUDY

To study about the Mutual Funds industry.

To study the approach of investors towards Mutual Funds.

To study the behavior of the investors for preferring Mutual Funds.

To help an investor to make right choice of investment. 

INTRODUCTION Mutual Funds is a trust that pools the savings of a number of investors which are then invested in Capital Market instruments such as:

SHARES

DEBENTURES

and OTHER SECURITIES

These investors buy units of a particular Mutual Fund scheme that has a defined investment objective and strategy.

The money collected is invested by the fund manager in different types of securities. These could range from shares to debentures to money market instruments, depending upon the scheme’s stated objectives.

The income earned through these investments and the capital appreciation realized by the scheme are shared by its unit holders in proportion to the number of units owned by them.

People those who are engaged in the marketing of Mutual Funds are:

INDIVIDUAL AGENTSDISTRIBUTOR COMPANIESBANK EXECUTIVES

INTRODUCTION

TYPES OF MUTUAL FUNDS

By Structure Open-Ended – anytime enter/exit Close-Ended Schemes – listed on exchange, redemption after period of

scheme is over.

By Investment Objective Equity (Growth) – only in Stocks – Long Term (3 years or more) Debt (Income) – only in Fixed Income Securities (3-10 months) Liquid/Money Market (including gilt) – Short-term Money Market

(Govt.) Balanced/Hybrid – Stocks + Fixed Income Securities (1-3 years)

Other Schemes Tax Saving Schemes Special Schemes

ULIP

TYPES OF MUTUAL FUNDS

WHY INVESTORS PREFER MUTUAL FUNDS.

Expert on your side:   When you invest in a mutual fund, you buy into the experience and skills of a fund manager and an army of professional analysts

Limited risk: Mutual funds are diversification in action and hence do not rely on the performance of a single entity.

More for less: For the price of one blue chip stock for instance, you could get yourself a number of units across a number of companies and industries when you invest in a fund!

Easy investing: You can invest in a mutual fund with as little as Rs. 5,000. Salaried individuals also have the option of investing in a monthly savings plan.

Convenience: You can invest directly with a fund house, or through your bank or financial adviser, or even over the internet.

Investor protection: A mutual fund in India is registered with SEBI, which also monitors the operations of the fund to protect your interests.

Quick access to your money: It's good to know that should you need your money at short notice, you can usually get it in four working days.

Transparency: As an investor, you get updates on the value of your units, information on specific investments made by the mutual fund and the fund manager's strategy and outlook.

Low transaction costs: A mutual fund, by sheer scale of its investments is able to carry out cost-effective brokerage transactions.

Tax benefits: Over the years, tax policies on mutual funds have been favourable to investors and continue to be so.

WHY INVESTORS PREFER MUTUAL FUNDS.

 Step 1. Identify your investment needs.

What are his investment objectives and needs?How much risk is he willing to take?What are his cash flow requirements? Step 2. Choose the right Mutual Fund.

Step 3. Select the ideal mix of Schemes.

Step 4. Invest regularly

Step 5. Keep your taxes in mind.

Step 6. Start early.

 

HOW TO INVEST IN SBI MUTUAL FUNDS

CHI-SQUAREOCCUPATION Vs MUTUAL FUND AS AN INVESTMENT

 OCCUPATION YES NO TOTAL

SERVICE 114 24 138

PROFESSION 31 8 39

BUSINESS 16 7 23

TOTAL 16 7 23

NULL HYPOTHESIS : Willingness to take up Mutual Fund as an investmentoption is independent of the occupation of the respondent. ALTERNATIVE HYPOTHESIS : Willingness to take up Mutual Fund as aninvestment option is dependent of the occupation of the respondent       

FINDINGS 

80% of the respondents treat Mutual Fund as an investment option • While dealing with the investor, it is found that service people are more Interest inMutual Fund. • Business sector feels that Mutual Fund is an important criterion in their field ofwork. • 33% of investor's objective in Mutual Fund is for the benefit of their children, 26%for the purpose of tax benefits, and 12% for the purpose of creation of the assets.

FINDINGS• 36.56% investors feel that investment is for children benefit & return in MutualFunds., 20.14% Investors would like to save in insurance, 24.8% Investors wouldlike to save in deposit / bond, 12.43% Investors would like to save in Post office,4.47% Investors would like to save in share market, 1.44% Investors prefers others. • Income group which opts for insurance as an investment option is between1Iakhs-2Iakhs. • The investors would like to invest their money where they would get moreSecurity • The willingness to take up Mutual Fund as an investment option is independentof the occupation of the respondents. • Mutual Fund objectives and respondents categories are found to be independent.

LIMITATIONSThe study was carried out in Bhilai-Durg region only.

Limited knowledge about local market.

Time constraint.

As the collected data in the month of June and July the result could not be considered consistent for the whole year

RECOMMENDATIONS  

The performance of the mutual fund depends on the previous years Net Asset Value of the fund. All schemes are doing well. But the future is uncertain. So, the AMC should take the following steps: -

The people do not want to take risk. The AMC should launch more diversified funds so that the risk becomes minimum.

The expectation of the people from the mutual funds is high. So, the portfolio of the fund should be prepared taking into consideration the expectations of the people.  

Try top reduce fund charges, administration charges and other charges which helps to invest more funds in the security market and earn good returns.

 

Different campaigns should be launched to educate people regarding mutual funds.  

Companies should give regular dividends as it depicts profitability.

Mutual funds should concentrate on differentiating the portfolio of their MF than their competitors MF.

Companies should give handsome brokerage to brokers so that they get attracted towards distribution of the funds.

As majority of the respondents are in service, this is the core market area to beconcentrated on.

As majority of the respondents are in service, this is the core market area to beconcentrated on. 

Income group which opts for investment in Mutual Fund sector is below2Lakhs. It is suggested that while marketing, this segment to beconsidered with great concern .

RECOMMENDATIONS  

From the findings, it is found that, the security is the main criteria for the investors. It is suggested that this aspect would be reinforced while

accessing the investor.

It is found that period of investment of the investor is more only during theyear ending. It would be easy to tap the investor, .if the promoterconcentrates during this period. 

While dealing with the prospective investors business people could beattracted with more schemes which focus on their increasing return. 

Tax benefits occurring out of investing from insurance must be highlightedin the service sector. 

Professionals are not benefited with pension, since most of them are inprivate sector. So the one, who promotes the product in this sector shouldtap the schemes which would benefit to their family and their children. 

As 80%of the respondents think Mutual Fund as an investment, the company can bring more Mutual Fund products to suit needs of the investor. 

RECOMMENDATIONS  

Study undertaken for SBI Mutual Fund has been successful in studyingthe perception of investors on the potential of Mutual Fund as an investmentoption.  It is encouraging and positive to know that Mutual Fund was much soughtafter avenues for investment it as been found that the service sectors are moreinterested in having Mutual Fund as an avenue of investment.  Based on the findings of the study a few suggestions have been given,which if considered would give strength to the marketing strategy of SBI MutualFund.

CONCLUSION