A SUMMER INTERNSHIP REPORT

ON
FINANCIAL PERFORMANCE OF WARANGAL
DISTRICT CO-OPERATIVE CENTRAL BANK
THROUGH RATIO ANALYSIS

In partial fulfillment of the requirements for the award of the degree

MASTER OF BUSINESS ADMINISTRATION

(MBA)
By
I S S VARA PRASAD VARMA
HALL TICKET NO: 22WJ1E0043

UNDER THE GUIDANCE OF

Mr . A SANDEEP REDDY
(Assistant Professor)

(APPROVED BY AICTE, NEW DELHI, ACCREDIATED BY

NBA, AFFILIATED TO JNTUH)

IBRAHIMPATNAM-501506
(2022-2024)
 Ibrahimpatnam, RangaReddy District, Hyderabad - 501 506

BONAFIDE CERTIFICATE

This is to certify that the internship in “ FINANCIAL

PERFORMANCE OF WARANGAL DISTRICT CO-OPERATIVE
CENTRAL BANK THROUGH RATIO ANALYSIS ” is a bonafide
record of work done by Mr. I S S VARA PRASAD VARMA Roll. No.
22WJ1E0043 from 17th November 2023 to 04th January 2024 in
partial fulfillment of the requirement for the award of the Degree of
Masters of Business Administration.

Guide Name
Mr. A Sandeep Reddy
_________________ Associate director
(Mr.------------------------
 STUDENT DECLARATION

I hereby declare that this Internship Report with reference to

FINANCIAL PERFORMANCE OF WARANGAL DISTRICT CO-
OPERATIVE CENTRAL BANK, submitted by me to the Department of
Business Management, Guru Nanak Institutions Technical Campus,
Ranga Reddy is a Bonafide work undertaken by me and it is not
submitted to any other University or Institution for the award of any
degree Diploma / certificate or published any time before.

Name of the student Signature of student

I S S VARA PRASAD VARMA
22WJ1E0043
 ACKNOWLEDGMENT

The result is always the sum of all parts. Likewise, this report put forth
was possible with the help of many people involved in the completion of
this INTERNSHIP project

It is a great for me to record here my deep sense to Mr. ASHOK

(Assistant Manager) who accorded permission to do project work at
(WARANGAL DISTRICT CO-OPERATIVE BANK) and guiding in
doing my project work

I extent my gratitude to Dr. ANAND BETHAPUDI(HOD), Department

of Master of Business Administration, GURU NANAK INSTITUTIONS
TECHNICAL CAMPUS for accommodating me in the family of
Gurunanak.
My must sincere thanks to my guide, Dr. A SANDEEP REDDY
(Assistant professor), GURU NANAK INSTITUTIONS TECHINCAL
CAMPUS, for motivating me to give my best for my project without
which this project report would not be called a success.
 INDEX

CHAPTER-I
INTRODUCTION
NEED OF THE STUDY
SCOPE OF THE STUDY 1-11
OBJECTIVES OF THE STUDY
RESEARCH METHODOLOGY
LIMITATIONS OF THE STUDY

CHAPTER-II
REVIEW OF LITERATURE 12-18

CHAPTER-III
INDUSTRY & COMPANY PROFILE 19-28

CHAPTER-IV
DATA ANALYSIS & INTERPRETATION 29-45

CHAPTER-V
FINDINGS
SUGGESTIONS 46-51
CONCLUSION
BIBLIOGRAPHY
ABSTRACT

A mutual fund is a system in which several individuals invest their money in a financial clause.
The money raised is invested in the capital markets and the money they have earned is divided
by the number of shares they hold.The mutual fund industry came into existence in India to a
small extent with the establishment by the UTI of a small savings division within the RBI. That
was quite successfulfor the next 25 years because it gave investors good returns. As a result,
RBI granted the green light to the public sector. Banks and financial institutions started mutual
funds in India and their success has replaced private sector mutual funds.

The benefits of mutual funds include portfolio diversification, fluidity, professional

management, corporate usability, risk reduction, low operating cost, transparency, and security.

The drawbacks of mutual funds cost are the index is doing better, charges, lack of control over
investments, the return on high return is reduced significantly, and the tax situation of
individuals is not taken into account.

Mutual funds must comply with specific rules and regulations that are prescribed by the SEBI.
AMFI is the point of reference for all asset management companies and is registered with the
SEBI. The Association of Mutual Funds India has transformed the Indian mutual fund industry
into a professional and healthy marketplace where ethical guidelines are strengthened.There
are numerous kinds of mutual funds in India. You can rank depending on BY STRUCTURE
(Open Ended scheme Close-Ended Schemes & Interval schemes). BY NATURE (Share fund,
borrowing fund, balanced fund). BY INVESTMENT GOAL (Growth schemes, Income
schemes Balanced schemes, and money market schemes). OTHERS (Tax Saving Schemes,
Index Schemes, Sector-Specific).Mutual funds are extremely easy to purchase and sell. Mutual
funds can be purchased directly from a company or dealer.
 CHAPTER-1
INTRODUCTION

1
Introduction of Mutual Funds:
A mutual fund is a trust-based fund that invests the savings of more than one investor. Who
share a common fiscal objective, such as capital appreciation and dividends. The funds raised
are then invested in capital market instruments such as shares, debentures, and foreign markets.
Investors invest money and obtain the units by the unit value we refer to as the NAV (Net
Asset Value).

The mutual fund is the most suitable investment for the average person because it offers the
opportunity to invest in diversified portfolio management, a good research team, professionally
managed Indian equities, and the external market, the fund’s primary objective. The manager
should take certificates that have undervalue and future willingness increasing and then the
manager sells the equities. Fund managers focus on the compromise of risk-return, in which
they minimize risk and maximize return through portfolio diversification. Common
characteristics of a mutual fund unit are low cost.

Most open-source mutual funds continually provide new stocks to investors. The company is
also known by the name the public investment company. This is different from privately
owned businesses.

Equity investments are spread across a wide range of industries and sectors, reducing risk.
Diversifying reduces risk because not all equities can move in the same direction in the same
proportion at the same time. Mutual funds issue units to investors according to the amount of
cash they invest. Mutual fund investors are called “Unit Holders.”

The investor shares profits and losses as a percentage of the investment. The mutual fund
offers a variety of programs, which vary from time to time.

2
Definition of Mutual Funds:
“A Mutual Fund is a fund made up of many investors who want to save or make money the
way you do. It may be far easier to invest in a mutual fund than to buy and sell stocks and
bonds yourself. Investors are free to sell their shares whenever they want.”
“A Mutual Fund is simply a set of shares or bonds. A mutual fund can be thought of as a
company that gathers a group of people and invests its money in stocks, bonds, and other
securities. Each investor owns shares that represent part of the fund’s holdings.”

3
Benefits of Mutual Funds:

➢ Low Operating Cost: As a result of economies of scale, mutual funds pay reduction
costs. Earnings are passed down to investors.
➢ Transparency: Funds provide investors with up-to-date information regarding the market
and schemes. All relevant information is communicated to the investor as required by
the regulator.
➢ Portfolio Diversification:Investing in a diversified portfolio can prove very onerous. The
benefit of mutual funds is that they enable anybody to have a diversified portfolio.
Investors invest in a diversified portfolio by increasing expected returns while
minimizing risk.
➢ Risk Reduction: Investors buy a diverse portfolio of securities, even if they invest little
in a mutual fund. A diversified portfolio has less risk than investing in 2 or 3 securities.
➢ Security:The mutual fund industry is part of a well-regulated investment environment
where the interests of investors are safeguarded by regulatory authorities. All funds are
registered with SEBI and full disclosure is maintained.
➢ Corporate Usability:Mutual funds are also handy because they can easily compare. This
is through regulators by mutual fund brokers that allow the investor to compare funds on
measures such as the level of risk and the return price.

4
➢ Fluidity: Mutual funds are liquid. In financial terms, liquidity is essentially the
conversion of your assets into cash with relative facility. Mutual funds are considered
liquid assets and are given a strong demand for funds for many on the market.
➢ Professional Management:Mutual funds do not take much of an investor’s working time
because they are managed by professionalmanagers. They can greatly assist
inexperienced investors looking to maximize their financial objectives.

Drawbacks of Mutual Fund:

➢ Cost: The drawback of mutual funds is that they have a high cost associated with them in
terms of the stimulus funds they generate. That’s because investors are not only billed
for the price of the fund, but they will often face extra costs. According to the fund,
commissions can be large. You will be responsible for paying a fee to the fund manager.
➢ Index Healthier: In some instances, the stock index can outperform the mutual fund.
However, this is not always the case because it depends largely on the mutual fund in
which the investor has invested and the fund manager’s overall skills. So, it’s an
excellent idea to do your research before you invest in the fund. Historical data is
systematically underperforming compared to an index, so this is not a wise investment.
➢ Charges: The fees billed will depend on the type of investment funds purchased. If
there’s a risk and it’s more aggressive, the management fees are generally going to be
higher. Furthermore, the investor will also have to pay taxes, transaction fees, and other
costs related to the maintenance of the fund.
➢ No control over investments: You have no control over what the fund manager does
with your money. You can’t recommend how your money is to be invested. You’re just
looking forward to it.
➢ Tax Situation: Personal tax status is not taken into account. When investing in a mutual
fund, your money is pooled with others and your tax situation is not considered while
5
 making investment decisions. The best choice you can make is to choose between the
two funds.

Historical Information on Mutual Funds

Investment Fund History:

Unit Trust of India was the first investment fund established in India in 1963. At the beginning
of the 1990s, the government authorized banks and public sector institutions to create mutual
funds. In 1992, the Securities and Exchange Board in India (SEBI) legislation was adopted.
SEBI aims to protect securities investors’ interests and promote the development and
regulation of the securities market.
When it comes to mutual funds, SEBI develops policies and regulates mutual funds to
safeguard the interests of investors. In 1993, SEBI notified settlements concerning mutual
funds. Subsequently, private sector-sponsored mutual funds were granted access to the capital
market. The regulations were reviewed in their entirety in 1996 and subsequently amended
from time to time.

Mutual Funds have progressed through four phases.

FIRST PHASE 1964-87:

An Act of Parliament created the Unit Trust of India (UTI) in 1963. It was established by the
Reserve Bank of India and operated under its regulatory and administrative jurisdiction. UTI
was de-linked from the RBI in 1978, and the Industrial Development Bank of India (IDBI)
assumed regulatory and administrative authority. Unit Scheme 1964 was UTI's first scheme.

SECOND PHASE 1987-1993:

Non-UTI, public sector mutual funds established formed by public sector banks, as well as Life
6
Insurance Corporation of India (LIC) and General Insurance Corporation of India (GICI),
entered the public sector in 1987.

In June 1987, SBI Mutual Fund became the first non-UTI Mutual Fund, followed by Can bank
Mutual Fund (December 1987), Punjab National Bank Mutual Fund (August 1989), Indian
Bank Mutual Fund (November 1989), Bank of India (June 1990), and Bank of Baroda Mutual
Fund (Oct 92). In June 1989, LIC launched a mutual fund, whereas GIC launched one in
December 1990.

THIRD PHASE – 1993-2003

Private Sector Investment With the advent of private sector funds into the Indian mutual fund
business in 1993, a new era began, providing Indian investors with a wider range of fund
families. In addition, the first Mutual Fund Regulations, which required all mutual funds,
except I, to be registered and supervised, were enacted in 1993. The former Kothari Pioneer
(now Franklin Templeton) was the first private sector mutual fund to be registered on July 1st.
A comprehensive and improved Mutual Fund Regulations 1996 replaced the SEBI (Mutual
Fund) Regulations of 1993. With many global mutual funds establishing funds in India, the
number of mutual fund firms has continued to grow, and the industry has seen a lot of changes.

FOURTH PHASE - since February 2003

UTI was split into two independent corporations in February 2003, after the Unit Trust of India
Act 1963 was repealed. One is the Unit Trust of India's Specified Undertaking, which had Rs.
29, 835 crores in assets under management at the end of January 2003, reflecting assets from
the US 64 plan, assured return, and other schemes.

The Unit Trust of India's Specified Undertaking, which operates under an administrator and is
governed by Indian government guidelines, is exempt from the Mutual Fund Regulations. SBI,
PNB, BOB, and LIC jointly sponsor the UTI Mutual Fund Ltd.
• It is SEBI-registered and operates by the Mutual Fund Regulations. It also promotes and
advises best-in-class business practices and a code of conduct for members and others
7
 interested in mutual funds and asset management activities, such as agencies connected
to or active in the capital markets and financial services.

• To communicate with and represent the Securities and Exchange Board of India (SEBI)
on all topics relating to the mutual fund industry.

• Represent the Mutual Fund Industry to the Government, the Reserve Bank of India, and
other entities.

• Organize a national investor education campaign to foster a thorough grasp of mutual

funds' ideasand operations.

• Disseminate information on the mutual fund industry, as well asconduct studies and
research on its own or in collaboration with the organization.

• To control distributor conduct, including disciplinary sanctions (ARN cancellation) for

code of conduct violations. To safeguard the interests of the investor/unit holder.

8
CONCEPTUAL FRAMEWORK OF MUTUAL
FUNDS

TYPES OF MUTUAL FUND SCHEMES IN INDIA

A) Structurally
Investors can acquire or sell units at any time in an open-ended scheme. This has no set
maturity date. Investors can buy and sell units at Net Asset Value prices. Liquidity is an
important element of an open-ended system.

9
 • Closed-Ended:A closed-end fund has a certain number of outstanding shares and
operates for a set period (generally ranging from 3 to 15 years). The fund would be
available for subscription for a limited time only, and there would have to be an even
balance of buyers and sellers for you to be able to purchase it.

• Closed-end funds are traded on the stock exchange just like other stocks.In most cases,
redemption is also mentioned, which indicates that the units can be redeemed on
specific dates.

The characteristics of open-ended and closed-ended funds are combined in interval schemes.
The units could be traded on a stock exchange or made available for sale or redemption at
NAV-related prices at pre-determined periods. Fixed maturity plans, or FMPs, are one sort of
scheme.

B) DUE TO NATURE

Investment Fund Retail investors favor equities as a mutual fund category. They put the money
into stock market investments. For different schemes and the fund manager's opinion on
different equities, the fund structure may differ. These funds are divided into categories based
on their investment goals, such as
a) Diversified Equity Investment Trusts
b) Mid-Cap Mutual Funds
c) Industry-Specific Funds
d) Tax-Avoidance Accounts (ELSS)
Debt Management Funds Debt funds invest in fixed income products such as bonds and
Treasury bills. Monthly income plans (MIPs), short term plans (STPS), liquid funds, and fixed
maturity plans (FMPs) are just a few of the optionsdebt fund investment alternatives Aside
from these, debt funds include a variety of funds that invest in short-term, medium-term, and
long-term bonds.
Balanced Funds - This investment strategy allows investors to receive regular growth and
income. The funds are invested in both stocks and fixed income assets, with the proportion pre-
10
determined and declared in the scheme-related offer document. These are perfect for investors
who are wary of taking risks.

C) OBJECTIVE OF INVESTMENT
• Growth Plans Equity schemes are another name for growth funds. The goal of these
plans is to provide medium to long-term capital appreciation. These strategies often
invest a large portion of their assets in stocks and seek financial appreciation.
• Income schemes commonly referred to as debt schemes, are a type of income program
The scheme's goal is to give the investor a predictable and consistent income. Fixed-
income securities such as bonds and corporate debentures are invested in these schemes.
Capital growth may be restricted in such programs.
• Balance Plan Investors can benefit from consistent growth and income with this plan.
The proportion of funds invested in equities and fixed income assets is predetermined
and declared in the scheme-related offer document. These are perfect for investors who
are wary of taking risks.

India's Mutual Funds

The Unit Trust of India (UTI), a joint venture of the Indian government and the Reserve Bank
of India, launched the mutual fund business in India in 1963. SBI Mutual Fund, which was
established in 1987, was India's first non-UTI mutual fund.
In India, the year 1963 marked the beginning of a new era for mutual funds. The advent of
private enterprises into the industry distinguished his time. The SEBI Mutual Fund Regulations
were established in 1996 following the passage of the Securities and Exchange Board of India
(SEBI) Act in 1992. Foreign institutions have opened up shop in India through joint ventures
and acquisitions, and mutual fund companies in 1995, the Association of Mutual Funds in
India (AMFI), a non-profit organization, was founded as the sector grew. Its goal is to
encourage ethical and healthy marketing practices in the Indian mutual fund industry. All
people involved in selling or promoting mutual fund products must have AMFI certification,
11
Major Mutual Funds Companies In India

Public sector mutual funds:

Bank of Baroda Mutual Fund

• State Bank of India Mutual Fund
• LIC Mutual Fund
• UTI Mutual Fund
• Canara Bank Mutual Fund

Private sector mutual funds:

• HSBC Mutual Fund

• ICICI Prudential Mutual Fund

• Tata Mutual Fund

• Standard Chartered Mutual Fund
• Morgan Stanley Mutual Fund
• Alliance Capital Mutual Fund
• Franklin Templeton Mutual Fund.
• Reliance Mutual Fund
• DSP Blackrock Mutual Fund
• HDFC Mutual Fund
• Birla Sun Life Mutual Fund
• ABN AMRO Mutual Fund
• Regulatory Body of Mutual Funds in India

The above is the Various Mutual Funds in India which has given a good return.
23
12
Chapter 2

REVIEW OF

LITERATURE

13
REVIEW OF LITERATURE
1) Mutual Funds in India is the title of the book.
• Author - Ingle, D. V.
• ISBN – 9788177083323
• Year of publications: 2013

This book examines the mutual fund sector in India in great detail. The author, D.V. Ingle has
detailed everything there is to know about Mutual Funds in India and why they are beneficial
to small investors who cannot engage directly in the stock market. Also, when the mutual
funds were established. The story of Mutual Funds in India is described in this book.

2) A Study of Mutual Funds in India is the title of the research paper.

• Author-MS Dauli Bansal and MS Shalini Goyal
• ISSN: -22295518
• Year of publication: 2013

This paper clarifies the mutual fund research in India. This paper also discusses where and how
we should invest in mutual funds, as well as why it is risky to invest directly in the stock
market because you may lose money. Mutual funds allow you to diversify your risk. This
research was carried out in India to examine and compare various types of mutual funds.

3) Investors' Preference for Mutual Funds is the title of the research paper & Prospective
Investment

• Author-N T Krishna Kishore, Y.Prabhavathi

• NO. OF ISSN: 22503153
• Year of publication: 2013
14
Mutual Funds revolutionized the way people invested their money. When compared to other
traditional investment sources, their investments. The study's major goal is to learn about
mutual fund investors' attitudes, awareness, and preferences. Most respondents prefer
systematic investment programs and rely on banks and financial advisors for information.
Mutual funds were chosen by investors for their professional fund management and higher
returns, and funds were evaluated primarily based on their Net Asset Value and prior
performance.

4) A Study on Indian Mutual Funds Equity Diversified Growth Schemes and their
Performance Evaluation is the title of the research paper.
• ISSN: 22491619
• Author: Dr.D.S. Chaubey
• Year of publication: 2011

Due to infrastructure and significant savings, the Indian mutual fund business has enjoyed
tremendous expansion. Following the liberalization and globalization of the Indian economy, a
large number of people have turned to mutual funds for investment. However, investing in a
particular fund requires a lot of information, such as the investor's objectives, cost, availability
of funds, risk and return factors, and so on, which necessitates basic research for a better future
and progress. The purpose of this article is to learn how mutual fund performance is evaluated
and rated after examining the NAV and their respective returns to assess investment options.

, In 2012, Roy & Ghosh115 examine the mutual fund performance of the open-ended equity
linked saving schemes (ELSS) in India during the recession in 2008- 2009. In this study,
Sharpe, Treynor, Jensen and T&M models are used. The study reports that the Sharpe and
Treynor ratios of the schemes are negative during the recession period. The stock selection
performance and the market timing performance of the schemes are statistically insignificant.

15
Finally, the overall performance of the openended equity linked saving schemes is found to be
very poor during the recession period. It seems that the literature on mutual fund performance
is somewhat confusing

In 2011, Roy & Ghosh114 examine the selectivity performance of the open-ended mutual fund
schemes in India over a period of nine years. For their study purpose, they use Jensen model.
The study reports that the statistically significant stock selection performance of growth type of
schemes is better than the income schemes. The study also indicates that the stock selection
performance of both types of schemes is unsatisfactory

In 2010, evaluates the consistency of NAV performance of mutual fund managers over a
period from January 2006 to August 2009 in the period of 2008. Therefore, she considers 20
mutual fund schemes and their existence in mutual fund industry is at least 3 years. She uses
monthly NAV and applied CAPM based Sharpe’s model, Trey nor’s model, Jensen’s model
and information ratio for analysis purpose. The study reports that the quantum of unsystematic
risks of all the funds is very high and the fund managers have failed to diversify the portfolio
risk. The study also shows that the Sharpe ratio & Trey nor ratio of all the funds are negative
except one fund and observes that only 13 schemes have offered positive Jensen alpha out of
20 schemes.

Chander
(2007) studied the risk-return relationship as an important component of investment decision
making. Though studies had examined the nature of risk-return relationships, they had not
provided adequate evidence on the stationary of such relationships. The study found that
investment managers considered both variability and volatility as risk surrogates. Sample
portfolios had experienced identical risk performance for measurement criteria but
performance variability was noticed for(fund characteristics. The results demonstrate a
strong positive relationship for 35% high risk-return portfolios and 15% low risk-return
portfolios.

16
Relevant null hypotheses were negated for the remaining portfolios to support Gupta’s (2002)
observations that risk-return characteristics were in conflict with the stated objectives. Such a
bland situation emerged when managers failed to read the directional changes in the market
movements.

Aggarwal and Gupta

(2007) found that while the global mutual fund industry continued to grow in leaps
and bounds, the research on mutual funds were confined to only a few developed markets with
USA always getting a special attention. Although emerging markets such as India had attracted
the attention of investors all over the world, they had remained devoid of much systematic
research, especially in the area of mutual funds. In an effort to plug that gap, their study sought
to check the performance of mutual funds operation in India. In this regard, quarterly return
performance of all the equity diversified mutual funds during the period from January2002 to
December2006 was tested. Analysis was carried out with the CAPM and Fama French models.
Amidst contrasting findings from the application of these two models, the study called for
further research and insight into the interplay between the performance determinant factors of
portfolios and their effects on mutual fund returns.

Sahoo and Hatti

(2007) in their study found neural network technique very useful in the study of mutual
performance.
Financial and economic forecasters had spurted the recent development of a number of newfor
ecasting models. In the hard sciences, neural networks can be used in the context of statistical
analyses such as regression, time series, moving average and smoothing methods and
numerous judgmental methods as alternatives. In addition, neural networks can also overcome
many of the shortcomings of traditional techniques analysing noisy and incomplete data.

17
In India, there is a regulatory organization for mutual funds.
Mutual funds are a type of investment. To protect the interests of investors, SEBI (Securities
and Exchange Board of India) formulates policies and governs mutual funds. While granting
authorization in January 1993, SEBI required mutual funds to register their honesty in business
activities and financial soundness. This will limit mutual fund growth and protect investors'
interests by allowing only sound promoters with a track record and financial strength to
register.

The offer paperwork for mutual fund schemes, as well as the plan particulars, must be
reviewed by SEBI. A common prospectus format for mutual funds is being developed.Mutual
funds are expected to follow a set of advertising guidelines.

The Securities Control and Regulations Act, which governs mutual funds, has been amended
by SEBI. Mutual funds that have been in the market for at least five years are only authorized
to guarantee a one-year maximum return of 12%.

According to current SEBI mutual fund criteria, an open-ended scheme must have a minimum
start-up of Rs. 50 crore and a closed-ended scheme must have a minimum start-up of Rs. 20
crores, failing which the application fee must be reimbursed. The Association of Mutual Funds
in India (AMFI) has petitioned the Indian regulatory authority to remove the minimal
threshold.

In addition, 50% of AMC's directors must be independent. Before launching any program, all
mutual funds must be registered with SEBI.
The Securities Control and Regulations Act, which governs mutual funds, has been amended
by SEBI. Mutual funds that have been in the market for at least five years are only authorized
to guarantee a one-year maximum return of 12%.
18
The open and well-understood reporting of mutual fund schemes' Net Asset Values (NAVS) is
critical in providing investors with information about the fund's performance. SEBI had
already issued a market warning to some mutual funds.

Value of Net Assets (NAV)

A mutual fund's Net Asset Value (NAV) is the price at which the fund's units are bought and
sold. It is the fund's market value after subtracting its obligations. Daily, the value of all units
in a mutual fund portfolio is computed, and all expenses are deducted. The NAV is calculated
by dividing the result by the total number of units. The term NAV is also known as Net Book
Value or book value.
The NAV of a fund is the market value of its units. As a result, it assists an investor in keeping
track of the mutual fund's performance. The percentage growth in the mutual fund NAV can be
used to calculate the real increase in the value of an investment. As a result, NAV provides
precise information about the mutual fund's performance.

NAV calculations

Securities and cash are the two most common asset types in mutual funds. Bonds and stocks
are both considered securities in this context. As a result, a fund's total asset value will include
the market value of its stocks, cash, and bonds. Total assets also include dividends and interest
earned, as well as liquid assets.

NAV is calculated using the following formula:

(Assets of the fund - Liabilities of the fund)
A mutual fund's NAV=
(Number of the fund's outstanding units)

19
 CHAPTER-3
COMPANY PROFILE

20
SBI Mutual Fund

The SBI mutual fund Private Ltd is a Joint venture between " fie state bank of India" and
Society General Asset Management (France). The fund manages over Rs 42,100 crore of
assets and has a diverse profile of Investors actively parking their investments across 38
active schemes.

At SBI Mutual Fund we know that every investor has unique financial goals and requires a
different set of products This is why we have a wide range of schemes that fulfills every
kind of Investors requirements. Each scheme is managed by devising a different strategy
that is reflective of the investor’s profile and carries different risks and rewards

Vision: -"To be the most preferred and the largest fund house for all asset classes, with a
consistent track record of excellent returns and best standards in customer service, product
innovation, technology, and HR practices. "

SBI Funds Management has emerged as one of the largest players in India advising various
financial institutions, pension funds, and local and international asset management
21
companies.

SBI Funds makes one of the largest investment management firms in India, managing
investment mandates of over 5.4 million investors.

Equity Funds and Schemes

Under the Equity Fund scheme, the SBI grants financial assistance to entrepreneurs who are
not able to meet their share of equity fully, by way of interest-free loans repayable over a long
period.

This type of assistance fills in the gap between the margin requirements in the project and the
capital contributed by the promoter. The Equity Fund assistance can be normally repaid over 5
to 7 years after the moratorium period.

The range of the schemes available helps kind of Investor’s investments.

1) Hybrid Schemes
2) Exchange Traded Scheme
3) Equity Scheme

Various Equity Schemes of State Bank of India

• - SBI Magnum Global Fund.

• - SBI Focused Equity Fund.
• - SBI Flexi-cap Fund.
• - SBI Small Cap Fund.
• - SBI Multicap Fund.
• - SBI Equity Hybrid Fund.

21
 • - SBI Magnum Children's Benefit Fund- Investment Plan.

Basic Market Cap

• Large-cap
• Mid-Cap
• Large and Mid-cap
• Small Cap
• Multi cap

Tax Saving Fund or ELSS Fund

• SBI Tax Advantage Fund- Series 1

• SBI Tax Advantage Fund Series 2
• SBI Tax Advantage Fund Series 3
• SBI Magnum Tax Gain Scheme 1993
• Equity Linked Savings Scheme allows benefits up to 1,50,000.

Sector funds

• SBI FMCG Fund

• SBI contra Fund

Thematic Funds

• SBI PSU Fund

• SBI Magnum COMMA Fund
• SBI Infrastructure

22
Market Neutral Strategy
The impact of geopolitical frictions on asset markets has remained mostly contained even as
commodity prices stay elevated. Volatility in key commodities such as crude oil has intensified
the field with large daily price swings becoming a fairly recurring feature in the last month.
The immediate impact has been higher inflation readings and expectations of the same
remaining fairly elevated shortly This has been more pronounced in developed markets where
loose monetary policy for a long period has been accompanied by significant fiscal measures in
response to Covid. As a result, central bank commentary has turned decidedly turned more
hawkish with markets continuing to reprice expectations of future actions. The US Fed
delivered its first policy rate hike in this cycle with a 25bps movie nonmovie to announce
larger rate hikes accompanied by balance sheet unwinding in the coming months.
• SBI Small & Midcap Fund is an open-ended equity scheme and primarily invests In
Small and Midcap equity and Equity related securities of the companies in the small and
midcap segments. The Portfolio will comprise a maximum of 30 stocks.
• Investment in a diversified portfolio predominately in equity and equity-related
securities of small & mid-cap companies.

Investment objectives of the schemes

The objective of SBI Mutual Funds is to bring excellence from the beginning of the product
development till the time investors deposit money. It is designed to outshine the industry
23
benchmarks using researched investment in varied Indian equities. The scheme seeks
to generate income and long-term capital appreciation by investing in a diversified
portfolio predominantly in equity and equity-related securities of small & midcap
companies.
There can be no assurance the investment objective of the scheme will be
realized. Steps to invest in mutual funds offline and make way for your dreams
Step 1: Contact a representative of SBI Mutual Fund or an impaneled distributor of SBI
Mutual Fund.
Step 2: Procure application and KYC form (if KYC procedure not completed) from the
website or any branch of SBI Mutual Fund or impaneled distributor office.
Step 3: Fill out the application/KYC (if applicable) form, and provide necessary
information
i.e., name, address, PAN, email address, mobile number, etc. This email address and
mobile number will be used for further communication, and can also be used to register
for online transaction services.
Step 4: Attach copies of relevant documents and submit them along with a cheque or
demand draft of the desired investment amount.
Step 5: Submit duly signed application/KYC (if applicable) form(s), with the cheque
and all relevant documents, to any branch of SBI Mutual Fund or point of acceptance.
Step 6: SBI Mutual Fund will then allocate and provide you with a folio number for that
particular investment. You will also receive an Account Statement after the
transaction is processed.

Comparing Returns of SBI Mutual Fund for 5

years Investment information
Investment Objective: The Scheme seeks to generate income and long-term capital
appreciation by investing in a diversified portfolio of predominantly equity and equity-
related securities of companies identified as industry leaders. However, there can be no
assurance that the investment objective of the Scheme will be realized and the Scheme
does not assure or guarantee any returns.
24
Performance of SBI Mutual Fund

Portfolio Holdings of SBI Mutual Fund

25
How to track your Portfolio
1. Login on YONO SBI app.
2. Go to the Investment section.

3. Select the current portfolio value

4. Check scheme level detailed
portfolio value.

26
.

27
Market Capitalization

SBI Blue-chip Fund invests in stocks of blue-chip companies, i.e., in stocks of companies with
market capitalization equal to or more than the least market capitalized stock of the S&P BSE
100 Index. These companies have a large business presence and, reputation and are possibly
market leaders in their industries. The fund comprises a well-diversified portfolio of
predominantly large-cap companies, with steady growth potential opportunities. The
investments are limited to stocks with market capitalization equal to or more than the least
market capitalized stock of the S&P BSE 100 Index.

Fund Philosophy & Positioning:

A large-cap Fund (large caps are defined as the top 100 companies in terms of market
capitalization rank) with the flexibility to invest up to 20% in mid-cap stocks. Relatively higher
risk than pure large-cap; focus to generate alpha by investing in high conviction mid-cap
stocks, the hen valuation gap between large-caps and mid-caps is significant. Medium-term (1
year) investment perspective for large-cap exposure and 2-3 years' perspective for mid-cap
exposure.

Who Can Invest:

SBI Blue-chip Fund constructs its portfolio with blue-chip stocks and benefits investors who
want relative stability and lower volatility in their equity portfolio

28
 Chapter 4

Data Analysis &

Interpretation

29
Research Data Analysis & Interpretation

The graph below provided consists of the data for 66 responses

AGE GROUP

Interpretation:According to the graph, 3% of investors are under the age of 27, 13.6
percent are between the ages of 22 and 27, and the majority of investors are between the
ages of 18 and 21. This indicates that the majority of mutual fund investors are between
the ages of 18 and 21 and are working.

30
GENDER

Interpretation:According to the above pie chart, female investors account for 51.5
percent of all mutual fund investors, while male investors account for 48.5 percent.

31
PROFESSION

Interpretation:According to the graph above, students account for 89.4 percent of

investors, followed by job holders at 9.1 percent and business owners at 1.5 percent.
Entrepreneurs do not invest. This indicates that students are increasingly interested in
making financial investments.

32
53
EDUCATIONAL QUALIFICATION

Interpretation:The graph illustrates that the majority of present investors have

completed their graduation, accounting for 56.1 percent of the total, while those who have
completed their postgraduate studies account for 13.6 percent. Non-graduate investors
account for the remaining 30.3 percent of investors. This demonstrates that the investors
are well-informed.
33
ANNUAL INCOME

Interpretation:The following pie chart illustrates that 80.3 percent of investors make
between $100,000 and $300,000 per year, while 9.1 percent earn between $300,000 and
$50,000 per year, and 10.6 percent earn over $500,000. This demonstrates that the
majority of investors have sufficient funds to invest.

34
WHAT KIND OF INVESTMENT DO YOU PREFER THE MOST?
66 Responses

Provi dent
Fund

Res l Estate

Ins urance

Mutual
Funds

Sha res/
Debentures

Fi xed
Deposists

Sa vi ngs
Account

0 5 10 15 20 25 30 35

Interpretation:According to the above bar graph, 31.8 percent of investors invest in savings
accounts, 22.7 percent in mutual funds, 16.7 percent in fixed deposits, 15.2% in
shares/debentures, and 4.5 percent in real estate, and 9.1% in insurance. Only a small number
of investors put their money into a 0.2 percent provident fund.

35
ARE YOU AWARE OF MUTUAL FUNDS?

Interpretation:According to the following pie chart, 72.7 percent of investors are aware
of Mutual Funds, while 27.3 percent are completely oblivious of Mutual Funds. We
might conclude from this those mutual funds have a market among new emerging
investors.

36
57
HOW DO YOU COME TO KNOW ABOUT MUTUAL FUNDS?
66 Responses
40

35

30

25

20

15

10

0
Ba nks Fri ends Soci al Media Fi nancial Advisors

Interpretation:According to the following bar graph, 34.8 percent of investors learned

about mutual funds from both social media and friends. Mutual Funds were introduced
to 24.2 percent of them through banks, and 6.1 percent of investors were introduced to
Mutual Funds through their financial advisors.

37
HAVE YOU OR YOUR FAMILY MEMBERS EVER INVESTED IN MUTUAL
FUNDS?

Interpretation:According to the above pie chart, 25.8% of investors have already placed
their money in Mutual Funds, while 56.1 percent haven't invested at all, and 18.2 percent
of investors are unsure if their family has invested in Mutual Funds or not.

38
IF NOT INVESTED IN MUTUAL FUNDS FOR ANY REASON?

Interpretation:According to the above pie chart, 50 percent of investors who haven't

invested in mutual funds have no specific reason for not doing so, 30.3 percent haven't
invested owing to a lack of information, and 6.1 percent haven't invested due to higher
risk. Mutual funds were invested in by 13.6 percent of investors.

39
IN WHICH MUTUAL FUNDS YOU HAVE INVESTED?
66 Responses

No,Not yet

UTI

Never Invested

JM Mutua l fund

Not Invested SBI

Mutua l Fund

None

Axi s Mutual Fund

Rel iance Mutual Fund

0 5 10 15 20 25 30 35 40 45

Interpretation:The above bar graph shows that 12.1 percent of investors want to invest in
SBI Mutual Fund, 4.5 percent want to invest in Axis Mutual Fund, 6.1 percent want to
invest in Reliance Mutual Fund, 0.5 percent want to invest in JM Mutual Fund, and 40.9
percent are not yet invested in Mutual Fund. While 28.8% of investors would rather not
invest in any of the Funds listed above.

40
WHILE INVESTING YOUR MONEY WHICH FACTOR DO YOU PREFER THE
MOST?

Interpretation:According to the above pie chart, the majority of investors, 42.4 percent,
want the security of their money, 19.7% prefer reduced risk, 25.8% prefer larger
returns, 9.1% prefer firm reputation, and only favor liquidity when investing their
money.

41
WHICH MUTUAL FUNDSCHEMEDO YOU PREFER THE MOST?

Interpretation:According to the above pie chart, the mutual fund schemes that investors
choose the most include growth fund long-gap with 47 percent of investors, an open-
endedliquid fund with 31.8 percent of investors, and close-ended mid-cap regular
income with 21.2 percent of investors.

42
WHEN YOU INVEST IN MUTUAL FUNDS WHICH MODE OF INVESTMENT
WILL YOU PREFER?

Interpretation:According to the above pie chart, 68.2 percent of investors who are
investing in Mutual Funds or would like to invest in Mutual Funds prefer SIP
(Systematic Investment Plan), whereas 31.8 percent prefer One Time Investment Plan.

43
WHERE DO YOU FIND YOURSELF AS A MUTUAL FUND INVESTOR?

Interpretation:According to the following pie chart, 53 percent of Mutual Fund

investors have only a basic understanding of Mutual Funds, while 21.2 percent are
completely knowledgeable about Mutual Funds, and 25.8% are completely unaware of
Mutual Funds. We may conclude that the majority of Mutual Funds investors are
aware of Mutual Funds before investing in them.
44
WHAT FUTURE OF MUTUAL FUNDS ALLURES YOU THE MOST?

Interpretation:According to the above pie chart, 54.5 percent of investors prefer Mutual
Funds for better returns and safety, 30.3 percent prefer Mutual Funds as a regular
source of income, and 15.2 percent prefer Mutual Funds for tax benefits.
45
 CHAPTER 5

FINDINGS, SUGGESTIONS
CONCLUSION AND
BIBILOGRAPHY

46
Suggestions to the Mutual Fund Investors:

• Recognize the goal of the investment: The first thing to consider before investing in a
fund is whether the goal aligns with his strategy. Investors will be abated with returns if
there is a mismatch in the scheme. For example, large-cap stock investment plans are not
suitable for cautious investors. He should start by looking into small and mid-cap funds.
Pension schemes as examples He should choose plans that are appropriate for his
financial situation. For his future investments, he should start with pension plans and
children's plans.

• Plan Ahead: Any successful investment requires weeks

of planning. It is a good idea to seek the advice of a financial expert as a new
investment.

• Low-Risk Tolerance: Investors with a low-risk tolerance should go for small and mid-
cap funds, which are safer than equity funds. Large investors should consider equity
schemes because they are appropriate for them. Every investment comes with some level
of risk. Higher risks=higher returns are a common investmentphilosophy.

• Track Record:Before investing, investors should research the track records of the
schemes they intend to invest in, as well as the performance of the relevant markets and
competitors.

• Investment Period: To achieve a decent return on their assets, investors should hold them
for a long time, such as three or five years. For the schemes to be profitable.

47
• Cost Factors:Even if the AMC is regulated, investors should examine a fund's expense
ratio before investing. Because money is deducted from the returns, this is the case.
Returns are reduced by a higher entry or exit load. Before investing, you must consider
the cost considerations. Consider the following when breaking from the plan. Within 10
days of redemption or repurchase, the investor should sell, redeem, or repurchase the
funds. When the leave period is less than 6 months, most funds incur exit loads. When
one fund is acquired by another, you should sell your holdings.

• Constant Monitoring: Investors should keep an eye on their portfolios and adjust them
when market conditions change, as this will help them maximize their returns.

• Diversification: The bigger the amount of money invested, the greater the ability to
diversify across asset classes and investment types. Asset allocation refers to how each
asset class is weighted.

• Other Things to Think About When Investing: A major mistake made by investors
nowadays is that they invest in new schemes with no history because they promise big
returns. Instead, investors should look at the NAV.

• Starting Tiny for New or First-Time Investors: New or first-time investors should start
with small and midcap companies and wait for their returns before diversifying their
funds.

• Tax-saving funds: When the market is up, investors are urged to move to tax-saving
funds since they offer better returns than other schemes.

48
CONCLUSION
Mutual funds are a popular investment option among investors since they are simple to invest
in and provide higher returns than traditional asset classes like FDs or saving bank accounts.
Portfolio diversification approaches, as well as the availability of SIP, STP, and SWP options,
make them feasible investment instruments. You are also not obliged to regularly monitor your
stocks because your fund manager will do so for you.

For most investors, the mutual fund business presently represents the most appropriate
opportunity. The financial market is the most advanced and complicated. To invest in the
mutual fund sector, individuals must have the necessary information. The mutual fund sector
can provide good returns when markets are high, but it can also result in losses if the market
does not perform well or if the fund management commits mistakes during mutual fund
investment.

The stock market performance is used to compare mutual fund returns. If the stock market
performs well, your investment fund will do well as well. The loss is low because the markets
are diversified.

I compared Axis and SBI mutual funds in my previous research. I evaluated 5-year returns and
found that both mutual funds had positive results after a set amount of time.
SBI mutual fund has given good returns of 20% since its inception. Even if the Axis mutual
fund has only returned 14%, investors prefer to invest in private mutual funds in the long run
because they believe they will receive good returns.

However, while comparing the three-year returns of both mutual funds, SBI mutual fund has
given an excellent return of 42 percent, while Axis mutual fund has offered a nice return of 25
percent.
“As a result, I recommend that investors invest in SBI mutual funds since they offer
49
outstanding returns.”
71
 BIBLIOGRAPHY

Websites:

• [1].http://businesstoday.intoday.in/story/indis-best-mutual-funds-2012-money-
today-rankings/1/184733.html
• [2].http://www.slideshare.net/navnit1188/performance-evaluation-of-mutual-
funds-4912211
• [3]http://www.editgrid.com/user/philip/Calculate_Portfolio_Sharpe_Ratio
• [4].http://www.freepatentsonline.com/article/Asia-Pacific-Business-
Review/198667812.html
• [5].http://www.jagoinvestor.com/2012/05/mutual-funds-performance-vs-
benchmark.html
• [6].http://mutualfunds.about.com/od/analyzingamutualfund/a/How-To-
Analyze-Mutual-Fund-Performance.htm

• [7]. www.bseindia.com
• [8]. www.nseindia.com
• [9]. www.valueresearchonline.co
• [10]www.njindiainvest.com
• [11]www.moneycontrol.com
• [12]www.amfiindia.com
• [13]www.karvy.com
• [14]www.valueresearchonline.com

50
Books:
• Books on Mutual Funds in India (D.V. Ingle)
• Common Sense of Mutual Funds (John C bogle)
• Mutual Fund for Dummies (Eric Tyson)
• Bogle on Mutual Funds (John C Bogle)
• The Mutual Funds Book (Alan Northcott)
• Mutual Funds Foe Wealth Building (John Mquilikin)
Apps:

• SBI Mutual Fund –InvesTap

• Axis Mutual Fund: SIP, ELSS MF
• Axis Mobile - Pay, Invest & UPI
• YONO SBI: Banking & Lifestyle

51