performance of mutual funds

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INTRODUCTION

Introduction to the Study of mutual funds:

Mutual Funds are professionally managed pool of money from a group of

investors. A Mutual fund manager invests our funds in securities including

stocks and bonds, Money Market instruments or some combination and

decides the best time to buy and sell. By pooling our resources with other

investors in Mutual Funds, they can diversify even a small investment over a

wide spectrum.

With the emergence of the capital market at the centre stage of the Indian financial system from

its marginal role a decade earlier, the Indian capital market also witnessed during the same

period a significant institutional development in the form of diversified structure of Mutual

Funds. A Mutual fund is a special type of investment institution which acts as an investment

conduct.

It pools the savings, particularly of the relatively small investors, and invests them in a well-

diversified portfolio of sound investment. As an investment intermediary, it offers a variety of

services/advantages to the relatively small investors who on their own cannot successfully

construct and manage investment portfolio mainly due to the small size of their funds, lack of

expertise and experience, and so on. These services include the diversification of portfolio,

expertise of the professional management, liquidity of investment, tax shelter, reduced risk and

reduced cost.

Mutual fund is the most suitable investment mode for the common man as it offers an

opportunity to invest in a diversified, professionally managed portfolio at a relatively low cost.

Anybody with an inventible surplus of as little as a few

Thousand rupees can invest in mutual funds. Each Mutual fund scheme has a defined investment

objective and strategy.


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The most important trend in the Mutual Fund industry is the aggressive expansion of the foreign

owned Mutual Fund companies and the decline of the companies floated by nationalized banks

and smaller private sector players.

Funds issue and redeem shares on demand at the fund's net asset value (NAV). Mutual fund

management fees typically range between 0.5% and 2% of assets per year, exchange fees and

other administrative charges also apply.

According to SEBI - Mutual Fund is defined as - A fund established in the form of a trust to

raise moneys 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.

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 the offer document.

DEFINITIONS

A mutual fund is a trust that pools the savings of a number of investors with common

financial goals. The collected money is invested in various instruments like debentures,

shares, etc. The income generated from these instruments and the capital appreciation is

shared by the investors in proportion to the number of units owned by them.


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NEED FOR THE STUDY

Today, everyone is interested in maximizing profits by minimizing risk. For which theyare interested in investing the well reputed stocks but they did not have a money to invest in all

those stocks. For this reason the Mutual funds helps those types of investors to invest in different

stocks of top companies. These funds are invested through fund manager who is expert and good

experience at various companies stocks. The investor should choose according to the market

trends i.e. it is in bullish (or) in bearish period according to which he has to choose the fund.

Thus, Mutual funds help even a common man to expect fruit full profits even in the Bearish

period. So, I felt there is a need to study.


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OBJECTIVES OF THE STUDY

To study the performance of Balanced Fund, equity fund, blue chip fund, comma fund,index fund, income fund, mip fund, one India growth fund with reference to SBI MutualFunds.

To find out the Preferences of the investors for Asset Management Company. To analyze the difference between the funds To find out the most preferred channel. To find out what should do to boost Mutual Fund Industry


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SCOPE OF THE STUDY

The study has been confined to analyze the performance study of the SBI Mutual Fund

Open-Ended growth schemes of Balanced Fund, equity fund, Blue-chip und, comma fund, index

fund, income fund, mip fund, one India growth fund with reference to SBI on monthly basis.


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METHODOLOGY OF THE STUDY

The methodology involves open-ended Growth schemes with reference to Balanced fund

and Liquid fund. The data collected for this project is basically from secondary source:

Sources of Data

Secondary data is the data which is already available i.e. they refer to the data, which

have already been collected and analyzed by someone else.

But here the source of data is collected through various Mutual Fund

websites, past records and Books.

Tools and techniques used:

Treynors Measure Sharpes Measure


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LIMITATIONS OF THE STUDY

The study is made only on two SBI Mutual funds (i.e., Balanced Fund equity fund,bluechipfund, comma fund, indexfund, incomefund, mipfund,oneindia growth fund).

No primary data is associated with the project. Among growth and dividend schemes, only growth schemes have been taken so as to

avoid repetition (as portfolio remains identical for both the options).

The schemes that are more than 1 years old have been considered for evaluation.


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THEORITICAL FRAMEWORK

Mutual Fund Industry in India:

The origin of Mutual fund industry in India is with the introduction of the concept of Mutual

fund by UTI in the year 1963. Though the growth was slow, but it accelerated from the year

1987 when non-UTI players entered the industry.

In the past decade, Indian Mutual fund industry had seen dramatic improvements, both quality

wise as well as quantity wise. Before, the monopoly of the market had seen an ending phase; the

Assets Under Management (AUM) was Rs. 67bn. The private sector entry to the fund family

raised the AUM to Rs. 470bn in March 1993 and till April 2004; it reached the height of 1,540

bn. Putting the AUM of the Indian Mutual Funds Industry into comparison, the total of it is less

than the deposits of SBI alone, constitute less than 11% of the total deposits held by the Indian

banking industry.

History Of Mutual Funds

The mutual fund industry can be broadly put into four phases according to the

development of the sector.

First Phase1964-87 Second Phase1987-1993 (Entry of Public Sector Funds) Third Phase1993-2003 (Entry of Private Sector Funds) Fourth Phasesince February 2003

First Phase ( 1964-87):

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the

Reserve Bank of India and functioned under the Regulatory and administrative control of the

Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development


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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 (1987-1993) Entry of Public Sector Funds:

The year 1987 marked the entry of non- UTI, public sector mutual funds set up by public sector

banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India

(GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed

by 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). LICestablished 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 Private Sector Funds:

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund

industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in

which the first Mutual Fund Regulations came into being, under which all mutual funds, except

UTI were to be registered and

governed. The est. 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 (MutualFund) Regulations 1996. The number of mutual fund houses went on increasing, with many

foreign mutual funds setting up funds in India and also the industry has witnessed several

mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total

assets of Rs. 1,21,805crores. The Unit Trust of India with Rs.44,541crores of assets under

management was way ahead of other mutual funds.


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Fourth Phase since February 2003:

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated

into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets

under management of Rs.29, 835 crores as at the end of January 2003, representing broadly, the

assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of

Unit Trust of India, 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, BOB and LIC. It is registered

with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the est.

while 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 eSSSntered its current phase of consolidation and growth.

Mutual Funds have become extremely popular over the last 20 years. What was once just another

obscure financial instrument is now a part of our daily lives. More than 80 million people, or one

half of the households in America, invest in mutual funds That means that, in the United States

alone, trillions (yes, with a "T") of dollars are invested in mutual funds.

In fact, too many people, investing means buying mutual funds. After all, its common knowledge

that investing in mutual funds is (or at least should be) better than simply letting our cash waste

away in a savings account, but, for most people, that's where the understanding of funds ends.


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Growth In Assets Under Management:

The graph indicates the growth of assets over the years


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Definitions Of Mutual Fund

Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 define Mutual Fund

as , a fund established in the form of a trust to raise money 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 instrument.

Mutual Fund is a non- depository, on-banking financial intermediary which acts as important

vehicle for bringing wealth holders and deficit units together indirectly. Mutual funds is also

suitable for those investors who do not have knowledge of capital market and by investing

through a Mutual fund it can make use of knowledge of specialized people which the Mutual

fund employs.

Concept Of Mutual Funds

Mutual fund is a trust that pools money from a group of investors (sharing common financial

goals) and invest the money thus collected into asset classes that match the stated investmentobjectives of the scheme. Since the stated investment objectives of a Mutual fund scheme

generally form the basis for an investor's decision to contribute money to the pool, a mutual fund

can not deviate from its stated objectives at any point of time.

Every Mutual Fund is managed by a fund manager, who is using his investment managementskills and necessary research works ensures much better return than what an investor can manage

on his own. The capital appreciation and other incomes earned from these investments are passedon to the investors (also known as unit holders) in proportion of the number of units they own.


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When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets

of the fund in the same proportion as his contribution amount put up with the corpus (the total

amount of the fund). Mutual Fund investor is also known as a mutual fund shareholder or a unit

holder. Any change in the value of the investments made into capital market instruments (such asshares, debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is defined

as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a scheme is

calculated by dividing the market value of scheme's assets by the total number of units issued to

the investors.

Net Asset Value (NAV)

Mutual Funds invest the money collected from the investors in securities markets. In simple

words, Net Asset Value is the market value of the securities 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. The performance of a particular scheme of

a Mutual Fund is denoted by Net Asset Value.

Market value of the funds investments + Receivables +

Accrued IncomeLiabilitiesAccrued Expenses

NAV=

Number of Outstanding units

Characteristics Of Mutual Funds:

Mutual fund actually belongs to the investors who have pooled their funds. Theownership of the Mutual fund is in the hands of the investors.


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A Mutual fund is managed by investment professionals and others services providers,who earn a fee for their services, from the fund.

The pool of the funds is invested in a portfolio of marketable investments. The value ofthe portfolio is updated everyday.

The investors share in the fund is denominated by units. The value of the unitschanges with the change in the portfolios value, everyday. The value of one unit of the

investment is called as the Net Asset Value or NAV

The investment portfolio of the Mutual fund is created accordingly to the statedinvestment objectives of the funds.

Objectives Of Mutual Funds

The objectives sought to be achieved by Mutual funds are as follows: - To provide an opportunity for lower income groups to acquire without much difficulty

property in the form of shares.

To cater mainly to the need of individual investors whose means are small? To manage investors portfolios in a manner that provides regular income, growth,

safety, liquidity and diversification.

Structure of Mutual Funds

There are many entities involved and the diagram below illustrates the organizational set up of a

Mutual Fund:


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SPONSOR COMPANY

Establishes the Mutual Fund asa trust registers the Mutual Fund

with SEBI

MUTUAL FUND

AMC(Asset Management

Company)

Hold unit-holders funds in MFEnter into an agreement with

SEBI and ensure compliance.

Float MF fundsManages the fund as per SEBI

Guidelines and AMC

agreement

Managed by a Board of

Trustees


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Sponsor

Sponsor is the person who acting alone or in combination with another body corporate

establishes a Mutual Fund. Sponsor must contribute at least 40% of the net worth of the

Investment Managed and should meet the eligibility criteria prescribed under the Securities and

Exchange Board of India (Mutual Funds) Regulations, 1996. The Sponsor is not responsible or

liable for any loss or shortfall resulting from the operation of the Schemes beyond the initial

contribution made by it towards setting up of the Mutual Fund by the sponsor.

Trust

The trust deed provisions provide that The Mutual Fund is constituted as a trust in

accordance with the provisions of the Indian Trusts Act, 1882 of the India Trusts Act, 1882 by

the sponsor. The trust deed is registered under the Indian Registration Act, 1908.

Trustee

Trustee is usually a company (corporate body) or a Board of Trustees (body of

individuals). The main responsibility of the Trustee is to safeguard the interest of the unit holdersand Exchange Board of India (Mutual Funds) Regulations, 1996, the provisions of the Trust

Deed and the offer Documents of the respective Schemes. At least 2/3rd directors of the Trustee

are independent directors who are not associated with the sponsor in any manner.

Asset Management Company (AMC)

CUSTODIAN

REGISTRAR

TRANSFER AGENTS

Provides custodial services

Provides registrar and transfer

services

Provides the network fordistribution of the schemes to

the investors.


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The AMC is appointed by the Trustee as the Investment Manager of the Mutual Fund.

The AMC is required to be approved by the Securities and Exchange Board of India (SEBI) to

act as an Asset management company of the Mutual Fund. At least 50% of the AMC are

independent directors who are not associated with the Sponsor in any manner. The AMC must

have a net worth of at least 10 crores at all times. An asset management company is an

investment managementfirm that invests the pooled funds of retail investors insecuritiesin line

with the stated investment objectives. For a fee, the investment company provides more

diversification, liquidity, and professional management consulting service than is normally

available to individual investors.

Registrar and Transfer Agent

The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent

to the Mutual Fund. The Registrar processes the application form, redemption requests and

dispatches account statements to the unit holders. The Registrar and Transfer agent also handles

communications with investors and updates investor records.

Custodian:

A trust company, bank or similar financial institution responsible for holding

and safeguarding the securities owned within a mutual fund. A mutual fund's custodian may also

act as the mutual fund's transfer agent, maintaining records of shareholder transactions and

balances. Also referred to as a Mutual Fund Corporation.

Broad Guidelines Issued For A Mutual Fund

SEBI is the regulatory authority of Mutual Funds. SEBI has the following broad guidelines

pertaining to Mutual Funds:

Mutual Funds should be formed as a trust under Indian Trust Act and should be operatedby Asset Management Companies.

Mutual Funds need to set up a Board of Trustee Companies. They should also have theirBoard of Directories.
http://en.wikipedia.org/wiki/Investment_managementhttp://en.wikipedia.org/wiki/Investment_managementhttp://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Diversity_%28business%29http://en.wikipedia.org/wiki/Diversity_%28business%29http://en.wikipedia.org/wiki/Liquidityhttp://en.wikipedia.org/wiki/Liquidityhttp://en.wikipedia.org/wiki/Management_consultinghttp://en.wikipedia.org/wiki/Management_consultinghttp://en.wikipedia.org/wiki/Management_consultinghttp://en.wikipedia.org/wiki/Liquidityhttp://en.wikipedia.org/wiki/Diversity_%28business%29http://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Investment_management


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The net worth of the Asset Management Company should be at least Rs.5 crore. Asset Management Companies and Trustees of a MF should be two separate and distinct

legal entities.

The Asset Management Companies or any of its companies cannot act as managers forany other fund.

Asset Management Company has to get the approval of SEBI for its articles andMemorandum of Association.

All Mutual Fund Schemes should be registered with SEBI. Mutual Funds should distribute minimum of 90% of their profits among the investors.

Professional Management

Qualified professionals manage our money and they have research team that continuously

analyses the performance and prospects of companies. They also select suitable investment to

achieve the objectives of the schemes and expertise which will add value to our investment.

These fund managers are in a better position to manage our investment and get higher returns.

Diversification

The clich, dont put all our eggs in one basket it really applies to the concept of

intelligent investing. Diversification lowers our risk of loss by spreading our money across

various industries. It is a rare occasion when all the stocks decline at the same time and in the

same proportion. Sector funds will spread our investment across only one industry and it would

not be wise for our portfolio to be skewed towards these types of funds for obvious reasons.

Choice of Schemes

Mutual Funds offer a variety of schemes that will suit to our needs over a life time. When

we enter a new stage in our life, we need to do is sit down with our investment advisor who will

help us to rearrange our portfolio to suit our altered lifestyle.

Affordability

As small investors, many find that it is so not possible to buy shares of large corporations.

Mutual funds generally buy and sell securities in large volumes which allow investors to benefit


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from lower trading costs. The smallest investor can get started on mutual funds because of the

minimal investment requirements. we can invest with a minimum of Rs. 500 in a on a regular

basis.

Tax Benefits

Investments held by investors for a period of 12 months or more qualify for Capital gains

and will be taxed accordingly (10% of the amount by which the investment appreciated, or 20%

after factoring in the benefits of cost indexation, whichever is lower). These investments also get

the benefits of indexation.

Liquidity

With open-ended funds, we can redeem all or part of our investment any time we wish

and receive the current value of the shares or the NAV related price. Funds are more liquid than

most investment in shares, deposits and bonds and the process is standardized, making it quick

and efficient so that we can get our cash in hand as soon as possible.

Transparency

The performance of a Mutual fund is reviewed by various publications and rating

agencies, making it easy for investors to compare one to the other. Once we are part of a Mutual

fund scheme, we are provided with regular updates, for example daily NAVs, as well as

information on the specific investment made and the fund managers strategy and out look of the

scheme.

Well Regulated

All Mutual Funds are registered by SEBI and they function within the provision of strict

regulations designed to protect the interests of investors. The operations of Mutual Funds areregularly monitored by SEBI.

Flexibility:


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Through features such as regular investment plans, regular withdrawal plans and dividend

reinvestment plans, we can systematically invest or withdraw funds accordingly to our needs and

convenience.

Low CostsMutual Funds are a relatively less expensive way to invest compared to directly investing

in the capital markets because the benefits of scale in brokerage, custodial and other fees

translate into lower costs for investors.

Types Of Mutual Fund Schemes

The Mutual Funds can be classified under the following types:

According to the Structure


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Open- Ended Scheme

An open-ended scheme is a scheme in which an investor can buy and sell units on a daily

basis. The scheme has a perpetual existence and flexible, ever changing corpus. Open-Ended

schemes do not have a fixed maturity period. The investors are free to buy and sell any number

of units, at any point of time, at prices that are linked to the NAV of the units.

In these schemes the investor can invest and disinvest any amount, any time after a short

initial lock in period. This scheme gives investors with instant liquidity and fund announces

sale and repurchase price from time to time. The units can be bought from and sold to any

Mutual Fund.

Advantages of Open-Ended Funds Over Close-Ended Funds

Any time Entry Option. This provides ready liquidity to the investors and avoids reliance on transfer deeds,

signature verifications and bad deliveries.

Allows to enter the fund at any time and even to invest at regular intervals. Any time Exit Option.

Close-Ended Scheme

A Close-ended scheme has a stipulated maturity period. E.g. 5-7 years. A Close-ended

scheme is one in which the subscription period for the Mutual Fund remains open only for a

specific period, called the redemption period. At the end of this period, the entire corpus is


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disinvested and the proceeds distributed to unit holders. After final distribution the scheme

ceases to exist. Such schemes can be rolled over by approval of unit holders.

Reasons For Fluctuations in close-Ended Funds Investors doubts about the abilities of the funds management. Lack of sales effort (Brokers earn less commission on closed end schemes than on open

ended schemes).

Riskiness of the fund. Lack of marketability of the funds units.

Interval Schemes

Interval schemes are those that combine both the features of both open-ended and close-ended

schemes. The units may be traded on the stock exchange or may be open for sale redemption

during predetermined intervals at NAV related prices.

Role Of Mutual Funds In Financial Markets

Mutual Funds play a significant role in the development of the financial market and this has

been proved in the developed countries like United States, United Kingdom and Japan. India is

at its first stage of a revolution that has already peaked in United States. In United States, the

asset base of mutual funds is much higher than its bank deposits. In India, mutual funds assets

are not even 10% of the bank deposits, but this trend is only at the beginning. The mutual funds

in India have emerged as strong financial intermediaries and are playing a very important role in

brining stability to the financial system and efficiency to resource allocation. Mutual funds help

corporate in raising funds for their financial needs leads to the overall growth of the economy.

The active involvement of Mutual funds in promoting economic development can be seen not

only in terms of their participation in the savings market but also in their dominant presence in

the money and the capital market. A developed financial market is critical to build overall

economic development and Mutual funds play an active role in promoting an active healthy

market. Mutual funds increase liquidity in the money market. The asset holding pattern of

mutual fund in India indicates the dominant role of the mutual funds in the money and capital

markets. The private corporate sector in India is a deficit sector and the gap between demand


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and supply of financial resources is met by funds raised through loans, advances and issuance of

securities.

However, the buoyancy in the capital market has increased the reliance of the corporate sector

has more than doubled. The changing pattern of corporate financing indicates that the banking

sector is loosing its prominence vis--vis the other financial sector. Direct financing by mutual

funds to the corporate sector has substantially increased after SEBI guidelines allowed the

corporate sector to reserve 20% of the public issues for Indian Mutual funds.

Mutual funds have also widened the private placement market for corporate securities.

Mutual funds have enabled the corporate sector to raise capital at reduced costs and have opened

an avenue for alternative source of capital. Mutual funds in India have merged as a critical

institutional linkage among various tax incentives and benefits on mutual fund investment are

offered by the Government their role in the mobilization of savings and the development of the

economy will assume more significance. They provide much needed impetus to the money

market and the stock markets, in addition to direct and indirect support to the corporate sector.

Above all mutual funds have given a new direction to the flow of personal savings and semi-

urban areas to reap benefits of stock market investments. Indian mutual funds are thus playing a

very crucial development role in allocation resources in the emerging market economy.

Net Asset Value (NAV)

Net Asset Value is the market value of assets of the scheme minus its liabilities. The per unit

NAV is the net asset value of the scheme divide by the number of units outstanding valuation

date.

Sale Price

The price we pay when we invest in scheme also called offer price. It may include a sale load.

Repurchase Price

It is the price at which a close-ended schemes repurchases its unit and it may include a

back-end load. This is also called Bid price.


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Redemption Price

It is the price at which a open-ended schemes repurchases their units and closed- ended

schemes redeem their units on a maturity. Such prices are NAV related.

Sales Load / Entry Load

It is a charge collected by a scheme when it sells the units also called Fronted load.

Schemes that do not charge a load are called No Load schemes.

Repurchase / Back-End/ Exit Load

It is a charge collected by a scheme when it buys back units from the unit holders.

INDUSTRY PROFILE

BOMBAY STOCK EXCHANGE (BSE)

About the Bombay Stock Exchange

Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich heritage.

Popularly known as "BSE", it was established as "The Native Share Stock Brokers Association"

in 1875. It is the first stock exchange in the country to obtain permanent recognition in 1956

from the Government of India under the Securities Contracts (Regulation) Act, 1956.The

Exchange's pivotal and pre-eminent role in the development of the Indian capital market is


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widely recognized and its index, SENSEX, is tracked worldwide. Earlier an Association of

Persons (AOP), the Exchange is now a demutualised and corporatised entity incorporated under

the provisions of the Companies Act, 1956, BSE (Corporatisation and Demutualization) Scheme,

2005 notified by the Securities and Exchange Board of India (SEBI).

With demutualization, the trading rights and ownership rights have been de-linked effectively

addressing concerns regarding perceived and real conflicts of interest. The Exchange is

professionally managed under the overall direction of the Board of Directors. The Board

comprises eminent professionals, representatives of Trading Members and the Managing

Director of the Exchange. The Board is inclusive and is designed to benefit from the

participation of market intermediaries.

In terms of organization structure, the Board formulates larger policy issues and exercises over-all control. The committees constituted by the Board are broad-based. The day-to-day operations

of the Exchange are managed by the Managing Director and a management team of

professionals.

Exchange has a nation-wide reach with a presence in 417 cities and towns of India. The systems

and processes of the Exchange are designed to safeguard market integrity and enhance

transparency in operations. During the year 2004-2005, the trading volumes on the Exchange

showed robust growth.

The Exchange provides an efficient and transparent market for trading in equity, debt

instruments and derivatives. The BSE's On Line Trading System (BOLT) is a proprietary system

of the Exchange and is BS 7799-2-2002 certified. The surveillance and clearing & settlement

functions of the Exchange are ISO 9001:2000 certified.

History of the Bombay Stock Exchange:

The Bombay Stock Exchange is known as the oldest exchange in Asia. It traces its history to the

1850s, when stockbrokers would gather under banyan trees in front of Mumbai's Town Hall. The

location of these meetings changed many times, as the number of brokers constantly increased.

The group eventually moved to Dalal Street in 1874 and in 1875 became an official organization


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known as 'The Native Share & Stock Brokers Association'. In 1956, the BSE became the first

stock exchange to be recognized by the Indian Government under the Securities Contracts

Regulation Act.

The Bombay Stock Exchange developed the BSE Sensex in 1986, giving the BSE a means to

measure overall performance of the exchange. In 2000 the BSE used this index to open its

derivatives market, trading Sensex futures contracts. The development of Sensex options along

with equity derivatives followed in 2001 and 2002, expanding the BSE's trading platform.

Historically an open-cry floor trading exchange, the Bombay Stock Exchange switched to an

electronic trading system in 1995. It took the exchange only fifty days to make this transition.

COMPANY PROFILE

Inter-connected Stock Exchange of India Limited (ISE) is a national-level stock

exchange, providing trading, clearing, settlement, risk management and surveillance support to

its Trading Members. It has 841 Trading Members, who are located in 131 cities spread across

25 states. These intermediaries are administratively supported through the regional offices at

Delhi, Kolkata, Patna, Ahmedabad, Coimbatore and Nagpur, besides Mumbai.

ISE has been promoted by 14 Regional stock exchanges to provide cost effective trading

linkage to all the members of the participating Exchanges. ISE aims to address the needs of small


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companies and retail investors by harnessing the potential of regional markets, so as to transform

them into a liquid and vibrant market using state-of-the art technology and networking.

ISE has floated ISE Securities & Services Limited as a wholly owned subsidiary under

the policy formulated by the Securities and Exchange Board of India (SEBI) for Revival of

Small Stock Exchanges. The policy enunciated by SEBI permits a stock exchange to float a

subsidiary, which can take up membership of larger stock exchanges, such as the National Stock

Exchange of India Limited (NSE), and Bombay Stock Exchange Limited (BSE). ISS has been

registered by SEBI as a Trading-cum-Clearing Member in the Capital Market segment and

Futures & Options segment of NSE and Capital Market segment of BSE. Trading Members of

ISE can access NSE and BSE by registering themselves as Sub-brokers of ISS. Thus, the trading

intermediaries of ISS can access other markets in addition to the ISE market. ISS, thus providesthe investors in smaller cities, a one-stop solution for cost-effective and efficient trading and

settlement services in securities.

Complementing the stock trading function, ISEs depository participant (DP) services

reach out to intermediaries and investors at industry-leading prices. The full suite of DP services

are offered using online software, accessible through multiple connectivity modes - leased lines,

VSATs and internet. Operation of the demat account by a client requires just a few mouse clicks.

The Research Cell has been established with the objective of carrying out quality

research on various facets of the Indian financial system in general and the capital market in

particular.

It brings out a monthly newsletter titled NISE and a fortnightly publication titled V

share. The Research Cell plans to expand its activities by publishing a host of value based

research publications, covering a number of areas, such as equities, derivatives, bonds, mutual

funds, risk management, pension funds, money markets and commodities. The ISE Training

Centre conducts class-room training programmes on different subjects related to the capital

market, such as equities trading and settlement, derivatives trading, day trading, arbitrage

operations, technical analysis, financial planning, compliance requirement, etc. Through these


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28

courses, the training centre provides knowledge to stockbrokers, sub-brokers, professionals and

investors to also appear for the certificate courses conducted by the stock exchanges.

It also aims to make and build the professional careers of MBAs, post graduates and

graduates, with a view to enabling them to work effectively in securities trading, risk

management, financial management, corporate finance disciplines or function as intermediaries

(viz. stock brokers, sub-brokers, merchant bankers, clearing bankers, etc.)

MISSION OF ISE

ISE endeavors to consolidate the small, fragmented and less liquid markets into a

national-level, liquid market by using state-of-the-art infrastructure and support systems.

OBJECTIVES OF ISE

Create a single integrated national level solution with access to multiple markets for providinghigh cost-effective service to millions of investors across the country.

Create a liquid and vibrant national level market for all listed companies in general and smallcapital companies in particular.

Optimally utilize the existing infrastructure and other resources of participating StockExchanges, which are under-utilized now.

Provide a level playing field to small Traders and Dealers by offering an opportunity toparticipate in a national markets having investment-oriented business.

Provide clearing and settlement facilities to the Traders and Dealers across the Country attheir doorstep in a decentralized mode.

Spread demats trading across the country.

SAILENT FEATURES OF ISE

NETWORK OF INTERMEDIARIES


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As at the beginning of the financial year 2003-04, 548 intermediaries (207 Traders and 341

Dealers) are registered on ISE. A broad of members forms the bedrock for any Exchange, and in this

respect, ISE has a large pool of registered intermediaries who can be tapped for any new line of

business.

ROBUST OPERATIONAL SYSTEMS

The trading, settlement and funds transfer operations of ISE and ISS are completely automated

and state-of-the-art systems have been deployed. The communication network of ISE, which has

connectivity with over 400 trading members and is spread across46 cities, is also used for supporting

the operations of ISS. The trading software and settlement software, as well as the electronic funds

transfer arrangement

established with HDFC Bank and ICICI Bank, gives ISE and ISS the required operational

efficiency and flexibility to not only handle the secondary market functions effectively, but

also by leveraging them for new ventures.

SKILLED AND EXPERIENCED MANPOWER

ISE and ISS have experienced and professional staff, who have wide experience in

Stock Exchanges/ capital market institutions, with in some cases, the experience going up to

nearly twenty years in this industry. The staff has the skill-set required to perform a wide

range of functions, depending upon the requirements from time to time.

AGGRESSIVE PRICING POLICY

The philosophy of ISE is to have an aggressive pricing policy for the various products

and services offered by it. The aim is to penetrate the retail market and strengthen the

position, so that a wide variety of products and services having appeal for the retail market

can be offered using a common distribution channel. The aggressive pricing policy also

ensures that the intermediaries have sufficient financial incentives for offering these products

and services to the end-clients.


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30

Trading, Risk Management and Settlement Software Systems

The ORBIT (Online Regional Bourses Inter-connected Trading) and AXIS

(Automated Exchange Integrated Settlement) software developed on the Microsoft NT

platform, with consultancy assistance from Microsoft, are the most contemporary of the

trading and settlement software introduced in the country. The applications have been built on

a technology platform, which offers low cost of ownership, facilitates simple maintenance and

supports easy up gradation and enhancement. The softwares are so designed that the

transaction processing capacity depends on the hardware used; capacity can be added by just

adding inexpensive hardware, without any additional software work.

VIBRANT SUBSIDIARY OPERATIONS

ISS, the wholly owned subsidiary of ISE, is one of the biggest Exchange subsidiaries in the

country. On any given day, more than 250 registered intermediaries of ISS traded from 46

cities across the length and breadth of the country.

Shri K. Rajendran Nair - Chairman, Public Interest Director Shri A. K. Mago - Public Interest Director Shri H. C. Parekh - Public Interest Director

Shri K. V. Thomas - Shareholder Director

Shri Santosh Muchhal - Shareholder Director Shri Bharat M. Meisheri - Shareholder Director Shri Debaraj Biswal - Shareholder Director


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Shri Dharmendra B. Mehta - Shareholder Director Shri P. Sivakumar - Shareholder Director Shri Surendra Holani - Trading Member Director Shri Rajeeb Ranjan Kumar - Trading Member Director Shri P. J. Mathew - Managing Director


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CHAPTER-4

DATA ANALYSIS AND INTERPRETATION

SBI MUTUAL FUNDS

SBI MAGNUM BALANCED FUND

FUND FEATURES

Type of Scheme Open Ended


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Nature Equity & Debt

Option Growth

Inception Date Oct 9, 1995

Face Value (Rs/Unit) 10

Fund Size in Rs. Cr.

374.66 as on Apr 30,2012

Last Dividend Declared 20 % as on Feb 3, 2004

Minimum Investment

(Rs) 1000

Purchase Redemptions Daily

NAV Calculation Daily

Entry Load Entry Load is 0%.

Exit Load

If redeemed bet. 0 Year to

1 Year; Exit load is 1%.

OBJECTIVE

To provide investors long term capital appreciation along with the liquidity of an open-ended scheme by investing in a mix of debt and equity. The scheme will invest in a diversified

portfolio of equities of high growth companies and balance the risk through investing the rest in

a relatively safe portfolio of debt

Asset Allocation (%)

Equity Debt Cash &Equivalent

73.01 17.16 9.84


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TOP 10 HOLDINGS

Stock Sector P/E

Perce

ntage

of Net

Assets Qty

Valu

e

Percentage of

Change

with last

month

Cash

CurrentAssets NA 9.84 NA 36.86 -26.06

73%

17%

10%

Equity

Debt

Cash & Equivalent


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ICICI BANK

LTD. Banks 15.71 7.06

299,69

4 26.44 -3.87

HDFC Bank

Ltd Banks 24.65 6.37439,75

7 23.86 -8.24

Sundaram

Finance Ltd. NBFC 10.54 6.14 NA 23.01 0.2

Muthoot

Finance Ltd. NBFC 5.59 4.47

1,400,

590 16.75 -5.38

Bajaj Holdings

& Investment

Ltd.

Auto &

Auto

Ancillaries 16.7 4.01

178,27

3 15.03 2.89

Torrent

Pharmaceutical

s Ltd

Pharmaceuticals &Biotechnolo

gy 20.42 3.73

209,37

0 13.96 -3.45

DrReddys

Laboratories

Ltd.

Pharmaceut

icals &

Biotechnology 34.44 3.29 69,883 12.32 0.08

WABCO India

Ltd.

Auto &

Auto

Ancillaries 21.74 3.19 69,802 11.94 10.4

State Bank of

India Banks 18.69 3.14 54,996 11.76 2,701.31

SECTOR ALLOCATION(%)

Auto & Auto Ancillaries 13.86

Banks 18.93

Construction and Infrastructure 1.66


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Construction materials 2.35

Consumer Durables 2.49

Current Assets 9.84

FI 2.78

FMCG 1.83

Garments, Fashion wear, Lifestyle 1.23

HFC 4.11

Media and Entertainment 2.72

NBFC 13.13

Non Ferrous metals 2.66

Pharmaceuticals & Biotechnology 11.86

Software and Consultancy Services 7.3

Sovereign 1.34

Telecom Services 1.9


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-

RISK & RETURN

0 5 10 15 20

Auto & Auto Ancillaries

Banks

Construction and Infrastructure

Construction materials

Consumer Durables

Current Assets

FI

FMCG

Garments, Fashionwear, Lifestyle

HFC

Media and EntertainmentNBFC

Non Ferrous metals

Pharmaceuticals & Biotechnology

Software and Consultancy Services

Sovereign

Telecom Services

sector Allocation

SectorName

Series1


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SCHEME PERFORMANCE (%) AS ON MAY 22, 2012

1 Month 3 Months 6 Months 1 Year 3 Years 5 Years

Since

Inception

-4.8 -2.88 5.97 -6.58 5.27 4.28 13.69

SBI OPEN ENDED BALANCED FUND

DATE 31-03-2009 31-03-2010 31-03-2011 31-03-2012

NAV 28.73 48.46 50.51 47.14

PERFORMANCE OF THE FUND (2009-12)

-

SBI MAGNUM BLUE CHIP FUND

28.73

48.46 50.51 47.14

31-03-2009 31-03-2010 31-03-2011 31-03-2012

NAV

NAV


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FUND FEATURES

Type of Scheme Open EndedNature Equity

Option Growth

Inception Date Feb 14, 2006


Fund Size in Rs. Cr. 706.48 as on Apr 30, 2012

Last Dividend Declared NA

Minimum Investment (Rs) 5000

Purchase Redemptions DailyNAV Calculation Daily


Exit Load Exit Load is 0%.

OBJECTIVE

To provide investors with opportunities for long-term growth in capital through an active

management of investments in a diversified basket of equity stocks of companies whose market

capitalization is atleast equal to or more than the least market capitalized stock of BSE 100 Index

ASSET ALLOCATION(%)


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Equity Debt Cash & Equivalent

93.52 0 6.48

TOP 10 HOLDINGS

Stock Sector P/E

Percentage

of Net Qty Value

Percent

age of

94%

0%

6%

Equity

Debt

Cash & Equivalent


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Assets Change

with las

month

HDFC Bank

Ltd Banks 24.65 6.31 822,370 44.61 4.25

Tata MotorsLtd

Auto & AutoAncillaries 60.91 5.6 1,250,000 39.57 45.73

Infosys Ltd.

Software andConsultancy

Services 18.73 5.51 158,037 38.91 15.09

ICICI BANK

LTD. Banks 15.71 5.04 403,527 35.61 20.19

Reliance

Industries Ltd

Petroleum, Gas

andpetrochemical

products 12.18 4.63 438,544 32.68 -0.4

Yes Bank Banks 12.68 3.87 781,696 27.34 -4.6

Tata

Consultancy

Services Ltd.

Software and

Consultancy

Services 24.01 3.8 215,202 26.83 7.11

Divis

Laboratories

Limited

Pharmaceuticals&

Biotechnology 22.47 3.76 309,982 26.54 11.67

Dr Reddys

Laboratories

Ltd.

Pharmaceuticals

&Biotechnology 34.44 3.25 130,222 22.96 0.09

Housing

Development

Finance

Corporation

Ltd HFC 25.27 3.22 337,975 22.77 0.05



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Banks 16.24

Chemicals 3.37

Construction and

Infrastructure 0.25

Construction materials 2.22Current Assets 6.48

Engineering and Capital

Goods 0.4

FI 1.37

FMCG 6.93

Food & Food Processing,

Beverages 0.27

HFC 3.22

Industrial Products 0.47

Media and Entertainment 1.96

Mining and Minerals 2.02

Miscellaneous 0.07

Petroleum, Gas and

petrochemical products 11.25

Pharmaceuticals &

Biotechnology 11.16

Power Generation 1.05

Power Transmission 1.56

Software and ConsultancyServices 14.81

Steel and Ferrous Metal 0.88


Tobacco & Pan Masala 0.13


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RISK & RETURN

0 2 4 6 8 10 12 14 16 18


Banks

Chemicals



Current Assets

Engineering and Capital Goods

FI

FMCG

Food & Food Processing, Beverages

HFC

Industrial Products

Media and Entertainment

Mining and Minerals

Miscellaneous

Petroleum, Gas and petrochemical products


Power Generation

Power Transmission


Steel and Ferrous Metal

Telecom Services

Tobacco & Pan Masala

Sector Allocation

S

ectorName

Series1


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SCHEME PERFORMANCE (%) AS ON MAY 21

2012

1

Month

3

Months

6

Months 1 Year 3 Years

5

Years

Since

Inception

-5.92 -7.46 5.51 -6.83 5.67 1.64 4.31

SBI OPEN-ENDED BLUECHIP FUND

DATE 31-03-2009 31-03-2010 31-03-2011 31-03-2012

NAV 7.65 14.1 14.56 13.78

PERFORMANCE OF THE FUND(2009-12)

SBI MAGNUM EQUITY FUND

7.65

14.1 14.56 13.78

31-03-2009 31-03-2010 31-03-2011 31-03-2012

NAV

NAV


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FUND FEATURES

Last Dividend Declared

50 % as on Oct 4,

2006


Purchase Redemptions DailyNAV Calculation Daily


Exit Load

If redeemed bet. 0

Year to 1 Year;

Exit load is 1%.

OBJECTIVE

To provide the investor Long-term capital appreciation by investing in high growthcompanies along with the liquidity of an open-ended scheme through investments primarily in

equities and the balance in debt and money market instruments.

ASSET ALLOCATION(%)


Nature Equity

Option Growth

Inception Date Jan 1, 1991



517.4 as on Apr30, 2012


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Equity Debt

Cash &

Equivalent

91.8 0 8.2

TOP 10 HOLDINGS

92%

0%

8%

Equity

Debt

Cash & Equivalent


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47

Stock Sector P/E

Percentage

of Net

Assets Qty Value

Percentage

of Change

with last

month

ICICIBANK LTD. Banks 15.71 9.71 569,419 50.24 28.69

Infosys Ltd.

Software and

Consultancy

Services 18.73 7.14 150,030 36.94 -0.82

ITC Ltd FMCG 32.92 6.64 1,400,290 34.38 8.25

Bharti

Airtel Ltd

Telecom

Services 19.66 5.4 899,420 27.93 -7.84

State Bank

of India Banks 18.69 5.37 129,991 27.79 2.04

Dr Reddys

Laboratories

Ltd.

Pharmaceuticals&

Biotechnology 34.44 4.76 139,766 24.64 -9.61

HDFC Bank

Ltd Banks 24.65 4.61 439,757 23.86 17.64

Reliance

IndustriesLtd

Petroleum, Gas

and

petrochemicalproducts 12.18 4.18 290,039 21.61 -0.41

Tata

Consultancy

Services Ltd.

Software and

ConsultancyServices 24.01 4.09 169,768 21.16 6.58

Tata Motors

Ltd

Auto & AutoAncillaries 60.91 3.53 577,122 18.27 14.43



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Banks 19.69

Chemicals 2.11

Current Assets 8.2

Engineering and Capital Goods 2.13

FMCG 6.64

HFC 2.97


NBFC 2.99

Petroleum, Gas and petrochemical

products 10.38







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SCHEME PERFORMANCE (%) AS ON MAY 22, 2012

Month 3 Months 6 Months 1 Year 3 Years 5 Years

Since

Inception

-6.81 -7.52 3.82 -6.26 9.49 6.32 10.46

SBI OPEN-ENDED EQUITY FUND

DATE 31-3--2009 31-3-2010 31-3-2011 31-3-2012

NAV 20.49 39.77 44.02 42.72


20.49

39.7744.02 42.72

31-3--2009 31-3-2010 31-3-2011 31-3-2012

NAV

NAV


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SBI MAGNUM INCOME FUND

FUND FEATURES


Nature Debt

Option Growth

Inception Date Nov 25, 1998



54.5 as on Apr 30,

2012






Exit Load

If redeemed bet. 0

Months to 6 Months;

Exit load is 0.5%.

OBJECTIVE

The objective of the scheme is to provide the investors an opportunity to earn, in

accordance with their requirements, through capital gains or through regular dividends, returns

that would be higher than the returns offered by comparable investment avenues throughinvestment in debt & money market securities


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ASSET ALLOCATION(%)

Equity Debt

Cash &

Equivalent

0 47.87 52.13

TOP 10 HOLDINGS

0%

48%

52%

Equity

Debt

Cash & Equivalent


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53

Stock Sector P/E

Percentage

of Net

Assets Qty Value

Percentage

of Change

with last

month

CBLO

Current

Assets NA 26.79 NA 14.6 10

GOI Sovereign NA 9.24 NA 5.04 148.54

Power Finance

Corporation

Ltd FI 7.96 9.14 NA 4.98 0.13

Vijaya Bank Banks 5.01 8.46 NA 4.61 1.13

Industrial

Development

Bank of India

Ltd. Banks 6.41 8.44 NA 4.6 1.09

Andhra Bank Banks 4.95 8.44 NA 4.6 1.14

SundaramFinance Ltd. NBFC 10.54 8.09 NA 4.41 0.29

Housing

Development

Finance

Corporation

Ltd HFC 25.27 8.02 NA 4.37 0.91

Axis Bank Ltd Banks 10.78 7.91 NA 4.31 0.43

Rural

ElectrificationCorporation FI 7.48 5.47 NA 2.98 -0.39



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Banks 33.25

Current Assets 26.79

FI 14.61

HFC 8.02

NBFC 8.09

Sovereign 9.24


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RISK&RETURN

0 5 10 15 20 25 30 35

Banks

Current Assets

FI

HFC

NBFC

Sovereign

Sector Allocation

SectorName

Series1


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SCHEME PERFORMANCE (%) AS ON MAY

22,2012

1

Month

3

Months

6


5

Years

Since

Inception

1.03 2.09 6.75 10.51 6.53 5.69 7.34

SBI OPEN ENDED INCOME FUND

DATE 31-03-2009 31-03-2010 31-03-2011 31-03-2012

NAV 21.17 22.41 23.45 25.73


SBI MAGNUM INDEX FUND

21.1722.41

23.4525.73

31-03-2009 31-03-2010 31-03-2011 31-03-2012

NAV

NAV


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FUND FEATURES


Nature Equity

Option Growth

Inception Date Jan 17, 2002



35.73 as on Apr 30,2012






Exit Load

If redeemed bet. 0 Days to

7 Days; Exit load is 1%.

OBJECTIVE

The scheme will adopt a passive investment strategy. The scheme will invest in stocks

comprising the S&P CNX Nifty index in the same proportion as in the index with the objective

of achieving returns equivalent to the Total Returns Index of S&P CNX Nifty index byminimizing the performance difference between the benchmark index and the scheme. The Total

Returns Index is an index that reflects the returns on the index from index gain/loss plus dividend

payments by the constituent stocks.


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ASSET ALLOCATION(%)

Equity Debt

Cash &

Equivalent

96.19 0 3.81

TOP 10 HOLDINGS

96%

0%

4%

Equity

Debt

Cash & Equivalent


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59

Stock Sector P/E

Percentage

of Net

Assets Qty Value

Percentage

of Change

with last

month

ITC Ltd FMCG 32.92 7.73 112,476 2.76 8.15

Reliance

Industries

Ltd

Petroleum,

Gas and

petrochemical

products 12.18 7.39 35,437 2.64 -0.75

Infosys Ltd.

Software and

Consultancy

Services 18.73 6.98 10,127 2.49 -14.22

ICICI

BANK LTD. Banks 15.71 5.98 24,205 2.14 -0.68

Housing

Development

Finance

Corporation

Ltd HFC 25.27 5.78 30,643 2.06 9.59

HDFC Bank

Ltd Banks 24.65 5.73 37,719 2.05 4.55

Larsen &Toubro

Limited

Engineeringand Capital

Goods 18.44 3.89 11,321 1.39 -6.2

Tata

Consultancy

Services Ltd.

Software andConsultancy

Services 24.01 3.75 10,750 1.34 6.65

Tata Motors

Ltd

Auto & Auto

Ancillaries 60.91 3.28 36,995 1.17 14.9

State Bank

of India Banks 18.69 3.27 5,458 1.17 2.26


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Banks 19.38

Chemicals 0.91



Current Assets 3.81

Engineering and Capital Goods 3.89

FI 0.84FMCG 10.25

HFC 5.78




products 12.3


Power & Control equipment

Manufacturer 1.05



Realty 0.4




Utilities - Gas, Power 1.43


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0 5 10 15 20 25


Banks

Chemicals



Current Assets

Engineering and Capital Goods

FI

FMCG

HFCMining and Minerals

Non Ferrous metals



Power & Control equipment

Power Generation

Power Transmission

Realty



Telecom Services

Utilities - Gas, Power

Sector Allocation

SectorName

Series1


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RISK&RETURN

SCHEME PERFORMANCE (%) AS ON MAY

22,2012

1Month

3Months

6Months 1 Year 3 Years

5Years

SinceInception

-8.23 -12.01 0.49 -11.26 4.48 1.25 14.68

SBI OPEN ENDED INDEX FUND

DATE 31-03-2009 31-03-2010 31-03-2011 31-03-2012

NAV 25.82 44.60 49.53 45.08


25.82

44.649.53

45.08

31-03-2009 31-03-2010 31-03-2011 31-03-2012

NAV

NAV


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6..SBI MAGNUM COMMA FUND

FUND FEATURES


Nature Equity

Option Growth

Inception Date Aug 8, 2005


Fund Size in Rs. Cr. 402.83 as on Apr 30, 2012

Last Divdend Declared NA





Exit LoadIf redeemed bet. 0 Year to 1 Year;

Exit load is 1%.

OBJECTIVE

The investment objective of the scheme will be to provide attractive returns to the

Magnum holders / Unit holders by means of capital appreciation through an actively managed

portfolio of debt, equity and money market instruments. Income generated through the receipt ofcoupon payments, the amortization of the discount on the debt instruments, receipt of dividends

or purchase and sale of securities in the underlying portfolio, will be reinvested. The following

table shows percentage portfolio allocation.

ASSET ALLOCATION


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Equity Debt

Cash &

Equivalent

95.14 0 4.86

TOP 10 HOLDINGS

95%

0%

5%

Chart Title

Equity

Debt

Cash & Equivqlent


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65

Stock Sector P/E

Percentage

of Net

Assets Qty Value

Percentage

of Change

with last

month

Coal India Ltd.

Mining and

Minerals 27.06 7 800,454 28.2 2.74

Oil & Natural Gas

Corporation Ltd

Petroleum, Gasand

petrochemical

products 11.38 6.7 998,704 26.97 0.9

Tata Chemicals Ltd

Fertilizers,

Pesticides &

Agrochemicals 17.28 6.66 798,216 26.84 -13.7

Reliance Industries

Ltd

Petroleum, Gasand

petrochemical

products 12.18 6.47 350,047 26.08 -0.42

Gujarat State

Fertilizers &

Chemicals Ltd

Fertilizers,

Pesticides &

Agrochemicals 4.58 5.59 511,391 22.5 -33.3

Power GridCorporation of India

Ltd

Power

Transmission 17.32 5.52 1,999,100 22.24 3.06

Gujarat State Petronet

Ltd.

Petroleum, Gasand

petrochemical

products 6.83 4.91 3,000,000 19.79 -13.6

United Phosphorus

Limited (New)

Fertilizers,

Pesticides &

Agrochemicals 23.59 4.32 1,496,780 17.41 -10.72

Gujarat Mineral

DevelopmentCorporation Limited

Mining andMinerals 13.41 3.69 801,725 14.87 2.05

Hindalco Industries

Ltd

Non Ferrous

metals 10.02 3.59 1,198,510 14.47 -6.85


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66

SECTOR ALLOCATION (%)



Current Assets 4.86

Fertilizers, Pesticides &

Agrochemicals 23.97




products 25.35





Sugar 4.23

Utilities - Gas, Power 1.37


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67

0 5 10 15 20 25 30



Current Assets

Fertilizers, Pesticides &

Mining and Minerals

Non Ferrous metals



Power Generation

Power Transmission


Sugar

Utilities - Gas, Power

Sector Allocation

Secto

rName

Series1


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68

RISK $ RETURN

SCHEME PERFORMANCE (%) AS ON MAY 28,2012

1

Month

3

Months

6


5

Years

Since

Inception

-4.91 -12.41 -8.09 -20.32 2.03 2.57 9.87

SBI OPEN-ENDED COMMA FUND

DATE 31-03-2009 31-03-2010 31-03-2011

31-03-

2012

NAV 12.76 24.24 24.12 21.05

PERFORMANCE OF THE FUND (2009-2012)

12.76

24.24 24.12

21.05

31-03-2009 31-03-2010 31-03-2011 31-03-2012

NAV

NAV


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69

PERFORMANCE EVALUATION

We are interested in discovering if the management of a mutual fund is performing well, that is,

Has management done better through merely buying the market picking a large number of

Securities randomly and holding them throughout period?

One of the most popular ways of measuring managements performance is by comparing

the yields for the managed portfolio with the market or with a random portfolio.

The following formula can be used to evaluate mutual fund performance:-

NAVt + DT/NAVt-1 -1

Where

NAVt = per share net asset value at the end of the year t

DT = capital appreciation during a year

NAVt-1 = per share net asset value at the end of the year

PERFORMANCE EVALUATION OF THE FUND

NAVt-1 = 31-march 2009NAVt = 31-march 2012

SBI MAGNUM BALANCED FUND

NAVt-1 NAVt Dt(NAVt-NAVt-1)

28.73 47.14 18.41

Applying the formula we get:


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2.28-1

1.28*100

128.15%

SBI MAGNUM BLUECHIP FUND


7.65 13.78 6.13

Applying the formula we get:

2.60-1

1.60*100

160.26%

SBI MAGNUM EQUITY FUND


20.49 42.72 22.23

Applying the formula we get


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71

3.16-1

2.16*100

216.98%

SBI MAGNUM INCOME FUND


21.17 25.73 4.56


1.430-1

0.430*100

43.07%

SBI MAGNUM INDEX FUND


25.82 45.08 19.26



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72

2.49-1

1.49*100

149.18%

SBI MAGNUM COMMA FUND


12.76 21.05 8.29


2.29-1

1.29*100

129.93%

FUND PERFORMANCE RANKING:


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73

NAME OF THE FUND NAV RANK

SBI OPEN ENDED EQUITY FUND 216.98 1

SBI OPEN ENDED BLUECHIP FUND 160.26 2

SBI OPEN ENDED INDEX FUND 149.18 3

SBI OPEN ENDED COMMA FUND 129.93 4

SBI OPEN ENDED BALANCED FUND 128.15 5

SBI OPEN ENDED INCOME FUND 43.07 6

SBI MUTUAL FUNDS SCHEMES RANKING CHART:


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INTERPRETATION:

From the table it is observed that SBI magnum equity fund is good when compared to remainingfunds. The performance of the fund is good, so the first rank is given to SBI Equity fund, second

rank is given to SBI magnum blue chip fund, Third rank is given to SBI magnum index fund,fourth rank is given to SBI magnum comma fund, fifth rank is given to SBI magnum balancedfund and sixth rank is given to SBI magnum income fund. It is taken on the basis of the net asset

value.

FINDINGS

216.98

160.26149.18

129.93 128.15

43.07

1 2 3 4 5 6

SBI OPENENDED

EQUITY

FUND

SBI OPENENDED

BLUECHIP

FUND

SBI OPENENDED

INDEX

FUND

SBI OPENENDED

COMMA

FUND

SBI OPENENDED

BALANCED

FUND

SBI OPENENDED

INCOME

FUND

NAV RANK


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As per my knowledge a fund with a better diversification of funds and opting for changesbased upon the market fluctuation. Under the eyes of efficient fund manager can produce

a high return.

The Biggest advantage with mutual funds is that the investor dont need huge amount tobe invested in all his favorite stocks and bonds. Most mutual funds have a minimum

investment of RS 5000

This analysis has given a clear difference between equity & non-equity funds Debts are better for stable returns & not only stable but also some appraisal in long run In this analysis we can say that equity are yielding well returns when thy are individually

but with risk

In this analysis we can say that equity are yielding well returns when they areindividually I long run

Funds performance may be vastly different owing to one or many of below factors:

1) Size of the funds2) Investment objective3) Risk portfolio4) Portfolio composition5) Expense ratios When we equity funds like SCCEF it is well diversified scheme where by it has

indifferent industries whose stocks are hot now such as SBI, BAJAJ AUTO LTD. In

addition, different AAA graded scripts where generally have high stability will reduce

unfortunate risk.

When we gone for debt its still stable but not satisfactory because on a averageGRINDLAYS DYNAMIC BOND FUND giving 0.368 & another debt fund giving

0.1009.


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SUGGESTIONS

The fund house has to reduce the total risk involved in the fund in order to increase thereturn with good portfolio construction.

The fund house should select the innovative way of portfolio construction and should seethe attracting areas of investing funds.

The fund houses should concentrate on the market conditions according to that they haveto set the benchmark and invest in different sectors.

The fund houses should invest in good and attracting sectors to reduce standard deviation. The fund house should try to reduce little more beta in order to generate more returns to

investors.


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CONCLUSIONS

Indian mutual fund industry possesses great potential for growth. The drivers for growth

are

Structural changes in the financial sector The private sector has grown by 51.84% since 1999, The growth has been primarily in open-ended products. Development in the previous three years was dominated by the growth of debt products. But with the positive outlook for equity markets, there have been increasing flows into

equity products.


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BIBLIOGRAPHY

BOOKS

MUTUAL FUNDS IN INDIA : S.KRISHNA MURTHY, Second edition,Chandra Bose calcutta

Security analysis and : DONALD E. FISHER &Portfolio management RONALD J. JORDAN

Management Financial : PRASANNA CHANDRA Investment Management : V.A.AVADHANI, Fourth edition

Himalaya Publications, Hyderabad

NEWS PAPERS

The Economic Times Business Line Business standard Business world

WEBSITES

www.mutualfundsindia.com www.nseindia.com www.standardchartedmf.com www.amfiindia.com www.bseindia.com
http://www.mutualfundsindia.com/http://www.mutualfundsindia.com/http://www.amfiindia.com/http://www.amfiindia.com/http://www.bseindia.com/http://www.bseindia.com/http://www.bseindia.com/http://www.amfiindia.com/http://www.mutualfundsindia.com/


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