Deepak Training Report on SBI MF

8/14/2019 Deepak Training Report on SBI MF

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A

TRAINING REPROT ON

SBI MUTUAL FUND

MUMBAI

`MBA (INDUSTRY INTEGRATED)

SEMESER - IV

SUBMITTED BY

MR. DEEPAK KATKE

INTERNATIONAL INSTITUTE FOR LEARNING MANAGEMENT BUSINESS SCHOOL

IILM - BS MUMBAI

KNOWLEDGE TOWER, SECTOR 11/20,

CBD BELAPUR, NAVIMUMBAI 400614

EASTERN INSTITUTE FOR INTEGRATED LEARNING IN MANAGEMENT

UNIVERSITY

EIILM UNIVERSITY

2009

A training report on SBI Mutual Fund. 1


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CERTIFICATE

This is to certify that Mr / Miss / Mrs. DEEPAK KATKE (Enrollment No:EIILMU/08/S0346 ) has successfully completed a training entitled, SBI MUTUAL FUND. in partial fulfillment for the requirement of MBA(Industry Integrated) program.

Signature with Date

Project / Training Guide Dean

Examiner Stamp of IILM BS



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ACKNOWLEDGEMENT

Success is not a destination, but a journey it is often said. I realized it

even better during my training Program at SBI funds Management

Private Limited. When I completed this journey, I may not have come

this far in my learning without help, guidance and support of certain

people who acted as guides, friends and torch bearers along the way.

We wish to express our gratitude to our faculty ., IILM BUSINESS

SCHOOL MUMBAI, for having given us an opportunity to go through

this project and extend our learning beyond the ambit of academic

curriculum and to my company guide Mr Hiralal Tulsiani and bhushan

relationship Manager of SBI FUNDS MANAGEMENT who has been

a source of constant inspiration for me. I shall be indebted to

him for his guidance, co-operation and confidence .I would

also l ike to thank Mrs. Swati ghaisas Chief Manager of sbi

mutual fund, Investor Service Centre, MUMBAI who has been

singularly responsible for a ll the knowledge that I have

assimilated during the past sixteen months. Her confidence

boosting talks helped me go a long a way during the course of

the project.

This pleasure would not have been ours without the firm support

extended to us by our friends. We thank them for their valuable

suggestions towards the preparation of this report.



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INDEX

CHAPTER

NO.

TITLE PAGE

1 INTRODUCTION 5

1.1 Background 7

1.2 Significance of Work 10

2 METHODOLOGY

17

3 ANALYSIS & DISCUSSION

32

4 CONCLUSION 33

5 FUTURE PROSPECTS

35

6 REFERENCES

36



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INTRODUCTION

Why Invest in a Mutual Fund ?

Mutual funds make saving and investing simple, accessible, and affordable.

The advantages of mutual funds include professional management,

diversification, variety, liquidity, affordability, convenience, and ease of

recordkeepingas well as strict government regulation and full disclosure.

During the past decade interest in and information about investing has

increased dramatically. Technological advances have ushered in a vast

supply of new services that allow you to invest with ease. Mutual fund share

holders have benefited from these technological advances, as funds have

continually offered improved services to meet changing investors need. Still,

the most important advantages mutual funds offer over other types of

investments remain unchanged since the first fund was offered in 1924:

professional management the security of knowing your money is managed

by a team of professionals devoted to reaching your investment objectives

and diversification the ability to invest affordably in a wide range of

securities and reap market rewards while diminishing accompanying risks.

Establishing realistic financial goals is an essential first step toward

successful investing. Understanding the investments best suited to helping

you achieve your goals is equally important. Most Americans invest to meet

long-term goals, such as ensuring a secure retirement or paying for a childs

college education, but many also have more immediate goals, like making a



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down payment on a home or automobile. Mutual funds can fit well into

either your long- or short-term investment strategy, but the success of your

plan depends on the type of fund you choose. Because all funds invest in

securities markets, it is crucial to maintain realistic expectations about theperformance of those markets and choose funds best suited to your needs. [1]

Keeping Recent Investment Returns in Perspective

Successful investors base their performance expectations on historic average

returns, and keep short-term market movements in perspective. Although

many investors have enjoyed strong returns on their investments in recent

yearsas because of the bull in the Indian stock market sensex went from

14000 index to 25000 indexes in just one year thus has returned an average

of

Nearly 70 from year percent annually over the past 5 years. Experts remind

us that the unprecedented returns of the 1990s are not likely to continue.

1



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BACKGROUND

STATE BANK OF INDIA - MUTUAL FUND

SBI Mutual Fund (SBI MF) is one of the largest mutual funds in the

country with an investor base of over 4.6 million. With over 20 years of

rich experience in fund management, SBI MF brings forward its

expertise in consistently delivering value to its investors

Established in 1987, SBI Funds Management is amongst Indias

oldest Asset Management Companies. Managing assets over Rs.34,000

crores through 30 Domestic Mutual Funds Schemes and Rs 4,800 crores

through PMS. Investor base of over 58 lakhs* predominantly retail clients.

Significant experience in managing Offshore Funds. Portfolio Management

Services being provided to major global institutional clients.

A joint venture between SBI and Societal General Asset ManagementSBI Funds management has been expert in managing assets since

1987 & tied-up with Societal General in 2004. Today:

Assets under Management as on December 31, 2008 were , Rs

25003.67 Cr. (source amfi)

SBIFM has won the trust of 54 lack investors

SBIFM promotes among the best performing equity funds overthe past 1, 3 & 5 years.

SBIFM has an 22 members experienced investment team

SBIFM has more than 350 professionals (corporate office in

Mumbai & 61 investors centers)



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SBI Mutual Fund is Indias largest bank sponsored mutual fund and has

an enviable track record in judicious investments and consistent wealth

creation.

The fund traces its lineage to SBI - Indias largest banking enterprise.

The institution has grown immensely since its inception and today it is

India's largest bank, patronized by over 80% of the top corporate houses

of the country.

SBI Mutual Fund is a joint venture between the State Bank of India and

Socit General Asset Management, one of the worlds leading fundmanagement companies that manages over US$ 500 Billion worldwide.

Exploiting expertise, compounding growth:

In twenty years of operation, the fund has launched 38 schemes and

successfully redeemed fifteen of them. In the process it has rewarded

its investors handsomely with consistently high returns. A total of over

5.8 million investors have reposed their faith in the wealth generation

expertise of the Mutual Fund. Schemes of the Mutual fund have

consistently outperformed benchmark indices and have emerged as the

preferred investment for millions of investors and HNIs. Today, the

fund manages over Rs. 51,461 crores of assets and has a diverse profile

of investors actively parking their investments across 36 active

schemes.The fund serves this vast family of investors by reaching out to

them through network of over 130 points of acceptance, 28 investor

service centers, 46 investor service desks and 56 district organizers.



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SBI Mutual is the first bank-sponsored fund to launch an offshore fund

Resurgent India Opportunities Fund. Growth through innovation and

stable investment policies is the SBI MF credo.

1.2 Significance of work

This diagram signifies the importance of Mutual Fund.

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

share a common financial goal. The money thus collected is invested by the

fund manager in different types of securities depending upon the objective of

the scheme. These could range from shares to debentures to money market

instruments. The income earned through these investments and the capital



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appreciations realized by the schemes are shared by its unit holders in

proportion to the number of units owned by them.

Thus a mutual fund is the most suitable investment for the common person

as it offers an opportunity to invest in a diversified, professionally managedbasket of securities at a relatively low cost.

Since small investors generally do not have adequate time, knowledge,

experience & resources for directly accessing the capital market, they have

to rely on an intermediary, which undertakes informed investment decisions

& provides consequential benefits of professional expertise.

The advantage of Mutual Funds to the investors is professional managed,

low transaction cost, liquidity, transparency, well regulated, diversified

portfolios & tax benefits. By pooling their assets through mutual funds,

investors achieve economies of scale.

A collected corpus can be used to procure a diversified portfolio

indicating greater returns has also create economies of scale through cost

reduction. This principle has been effective worldwide as more & more

investors are going the mutual fund way. This portfolio diversification

ensures risk minimization. The criticality such a measure comes in when you

factor in the fluctuations that characterize stock markets. The interest of the

investors is protected by the SEBI, which acts as a watchdog. Mutual funds

are governed by SEBI (Mutual Funds) regulations, 1996.



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ORGANISATION OF A MUTUAL FUND

There are many entities involved and the diagram below illustrates the

organizational set up of a mutual fund:

Mutual funds have a unique structure not shared with other entities such as

companies of firms. It is important for employees & agents to be aware of

the special nature of this structure, because it determines the rights &

responsibilities of the funds constituents viz., sponsors, trustees, custodians,

transfer agents & of course, the fund & the Asset Management

Company(AMC) the legal structure also drives the inter-relationships

between these constituents.

The structure of the mutual fund India is governed by the SEBI (Mutual

Funds) regulations, 1996. These regulations make it mandatory for mutual

funds to have a structure of sponsor, trustee, AMC, custodian. The sponsor

is the promoter of the mutual fund,& appoints the trustees. The trustees are

responsible to the investors in the mutual fund, & appoint the AMC for

managing the investment portfolio. The AMC is the business face of the



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mutual fund, as it manages all affairs of the mutual fund. The mutual fund &

the AMC have to be registered with SEBI. Custodian, who is also registered

with SEBI, holds the securities of various schemes of the fund in its custody.

Sponsor:

The sponsor is the promoter of the mutual fund. The sponsor establishes

the Mutual fund & registers the same with SEBI. He appoints the trustees,

Custodians & the AMC with prior approval of SEBI, & in accordance with

SEBI regulations. He must have at least five year track record of business

interest in the financial markets. Sponsor must have been profit making in atleast three of the above five years. He must contribute at least 40% of the

capital of theAMC.

Trustees:

The Mutual Fund may be managed by a Board of trustees a of individuals,or a trust company a corporate body. Most of the funds in India are

managed by board of trustees. While the board of trustees is governed by the

provisions of the Indian trust act, where the trustee is the corporate body, it

would also be required to comply with the provisions of the companies act,

1956. the board of trustee company, as an independent body, act as protector

of the unit-holders interest. The trustees dont directly manage the portfolio

of securities. For this specialist function, they appoint an AMC. They ensure

that the fund is managed by AMC as per the defined objectives & in

accordance with the trust deed & SEBI regulations.



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The trust is created through a document called the trust deed i.e., executed

by the fund sponsor in favor of the trustees. The trust deed is required to be

stamped as registered under the provision of the Indian registration act &

registered with SEBI. The trustees begin the primary guardians of the unit-holders funds & assets, a trustee has to be a person of high repute &

integrity.

Asset Management Company(AMC):

The role of an Asset management companies is to act as the investment

manager of the trust. They are the ones who manage money of investors. An

AMC takes decisions, compensates investors through dividends, maintains

proper accounting & information for pricing of units, calculates the NAV, &

provides information on listed schemes. It also exercises due diligence on

investments & submits quarterly reports to the trustees. AMCs have been set

up in various countries internationally as an answer to the global problem of

bad loans.

Bad loans are essentially of two types: bad loans generated out of the usual

banking operations or bad lending, and bad loans which emanate out of a

systematic banking crisis.

It is in the latter case that banking regulators or governments try to bail out

the banking system of a systematic accumulation of bad loans which acts asa drag on their liquidity, balance sheets and generally the health of banking.

So, the idea of AMCs or ARCs is not to bail out banks, but to bail out the

banking system itself.



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Types of AMCs in Indian Context:

The following are the various types of AMCs we have in India:

AMCs owned by banks.

AMCs owned by financial institutions.

AMCs owned by Indian private sector companies.

AMCs owned by foreign institutional investors.

AMCs owned by Indian & foreign sponsors.

Custodian:

Often an independent organization, it takes custody all securities & other

assets of mutual fund. Its responsibilities include receipt & delivery of

securities collecting income-distributing dividends, safekeeping of the unit

& segregating assets & settlements between schemes.

Mutual fund is managed either trust company board of trustees. Board of

trustees & trust are governed by provisions of Indian trust act. If trustee is a

company, it is also subject Indian Company Act. Trustees appoint AMC inconsultation with the sponsors & according to SEBI regulation. All mutual

fund schemes floated by AMC have to be approved by trustees. Trustees

review & ensure that net worth of the company is according to stipulated

norms, every quarter.



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Though the trust is the mutual fund, the AMC is its operational face. The

AMC is the first functionary to be appointed, & is involved in appointment

of all other functionaries. The AMC structures the mutual fund products,markets them & mobilizes fund, manages the funds & services to the

investors.

A draft offer document is to be prepared at the time of launching the fund.

Typically, it pre-specifies investment objectives of the fund, the risk

associated, the cost involved in the process & the broad rules to enter & to

exit from the fund & other areas of operation. In India as in most countries,

these sponsors need approval from a regulator, SEBI in our case. SEBI looks

at track records of the sponsor & its financial strength granting approval to

the fund for commencing operations.

A sponsor then hires an asset management company to invest the funds

according to the investment objective. It also hires another entity to be the

custodian of the assets of the fund & perhaps the third one to handle registry

work for the unit holder of the fund.

Registrars & Transfer Agent(R & T Agent):

The Registrars & Transfer Agents(R & T Agents) are responsible for the

investor servicing function, as they maintain the records of investors in

mutual funds. They process investor applications; record details provide by



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the investors on application forms; send out to investors details regarding

their investment in the mutual fund; send out periodical information on the

performance of the mutual fund; process dividend payout to investor;

incorporate changes in information as communicated by investors; & keepthe investor record up-to-date, by recording new investors & removing

investors who have withdrawn their funds.

2. METHODOLOGY

Research - the backbone of our Performance

Our expert team of experienced and market savvy researchers prepare

comprehensive analytical and informative reports on diverse sectors and

identify stocks that promise high performance in the future.

This team works in tandem with a compliance and risk-monitoringdepartment, which ensures minimization of operational risks while

protecting the interests of the investors.

Quite naturally many of our equity funds have delivered consistent

returns to investors and have repeatedly out performed benchmark

indices by wide margins.

RISK RETURN ANALYSIS OF THE SCHEMES

A rational investor before investing his or her money in any stock

analyses the risk associated with the particular stock. The actual return

he receives from a stock may vary from the expected one and thus a



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investor is always cautious about the rate of risk associated with the

particular stock. Hence it becomes very essential on the part of investors

to know the risk as the hard earned money is being invested with the

view to earn good return on the investment.

Risk mainly consists of two components

Systematic risk

Unsystematic risk

Systematic risk

The systematic risk affects the entire market. The

economic conditional, political situations, sociological changes affect

the entire market in turn affecting the company and even the stock

market. These situations are uncontrollable by the corporate andinvestor.

Unsystematic risk

The unsystematic risk is unique to industries. It differs

from industry to industry. Unsystematic risk stems from managerial

inefficiency, technological change in the production process,availability of raw materials, changes in the consumer preference, and

labour problems. The nature and magnitude of above mentioned factors

differ from industry to industry and company to company.



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In a general view, the risk for any investor would be the probable

loss for investing money in any mutual fund. But when we look at the

technical side of it , we cant just say that these schemes/fund carry risk

without any proof. They are certain set of formulas to say thepercentage of risk associated with it.

There are certain tools or formulas used to calculate the risk

associated with the schemes. These tools help us to understand the risk

associated with the schemes. These schemes are compared with the

benchmark BSE 100.

THE TOOLS USED FOR CALCULATION

Standard Deviation

Beta

Alpha

Sharp ratio Treynor ratio

Arithmetic mean

Y/N

Where Y- return of Nav values



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N- Number of observation

average return that can be expected from investment. The

arithmetic average return is appropriate as a measure of the central

tendency of a number of returns calculated for a particular time i.e. for

five years. It shows the

Standard deviation

S.D= (y-Y)

N

The standard deviation is a measure of the variables around its mean or

it is the square root of the sum of the squared deviations from the mean

divided by the number of observations.

S.D is used to measure the variability of return i.e.

the variation between the actual and expected return.

BETA

Beta describes the relationship between the stocks return and index

returns. There can be direct or indirect relation between stocks return

and index return. Indirect relations are vary rare.

1) Beta =+1.0



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It indicates that one percent change in market index

return causes exactly one percent change in the stock return. It indicates

that stock moves along with the market.

2) Beta= + 0.5

One percent changes in the market index return causes

0.5 percent change in the stock return. It indicates that it is less

volatile compared to market.

3) Beta=2.0

One percent change in the market index return causes 2

percent change in the stock return. The stock return is more volatile.

The stocks with more than 1 beta value are considered to be very

risky.

4) Negative beta value indicates that the stocks return move in

opposite direction to the market return.

Beta= N*XY- (X) (Y/ N(X*X) * (x)

Where, N- No of observation

X- Total of market index value

Y- Total of return to Nav

ALPHA



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Alpha = Y- beta(X)

Where

Y- avrage return to nav return

X- average return to market index .

Alpha indicates that the stock return is independent of the market

return. A positive value of alpha is a healthy sign. Positive alpha values

would yield profitable return.

SHARPE RATIO

St= Rp --Rf

S.D

WHERE

Rp Avereage return to portfolio

RfRisk free rate of interest

S.D- Standard Deviation

Sharpes performce index gives a single value to be used for the

performance ranking of various funds or portfolios. Sharpe indexmeasures the risk premium of the portfolio relative to the total amount

of risk in the portfolio. The risk premium is the difference between the

portfolios average rate of return and the risk less rate of return. The

standard deviation of the portfolio indicates the risk.



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Higher the value of sharpe ratio better the fund has performed.

Sharpe ratio can be used to rank the desirability of funds or portfolios.

The fund that has performed well comapred to other will be ranked first

then the others.

TREYNOR RATIO

Ty= RpRf

B

WHERE

Rp- Average return to portfolio

Rf- Risk less rate of interest.

B- Beta coeffecient

Treynor ratio is based on the concept of characteristic line.

Characteristic line gives the relation between a given market return and

funds return. The funds performance is measured in relation to market

performance. The ideal funds return rises at a faster rate than the

market performance when the market is moving upwards and its rate of

return declines slowly than the market return, in the decline.



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Treynors risk premium of the portfolio is the difference between the

aveage return and the risk less rate of return. The risk premium depends

on the systematic risk assumed in a portfoilo.



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MAGNUM MULTIPLIER PLUS SCHEME-93 (SBI)

TOOLS FOR CALCULATION

A training report on SBI Mutual Fund.

Date

Magnum Multiplier Plus Scheme - 93 -

BSE-100 Dividend Growth

close X X2 NAV Y X*Y NAV Y X*Y

30- Jan-06 5224.37 36.05 39.5428- Feb-06 5422.67 3.796 14.407 37.6 4.300 16.320 41.24 4.299 16.31930-Mar-06 5904.17 8.879 78.844 42.25 12.367 109.812 46.34 12.367 109.80830-Apr-06 6251.39 5.881 34.585 44 4.142 24.359 48.27 4.165 24.493

30-May-06 5385.21-13.856 191.983 38.9

-11.591 160.601 42.64 -11.664 161.608

30-Jun-06 5387.11 0.035 0.001 36.21 -6.915 -0.244 39.72 -6.848 -0.24231-Jul-06 5422.39 0.655 0.429 36.81 1.657 1.085 40.37 1.636 1.07231-Aug-06 5933.77 9.431 88.942 40.16 9.101 85.829 44.04 9.091 85.73530-Sep-06 6328.33 6.649 44.214 42.18 5.030 33.446 46.26 5.041 33.51931-Oct-06 6603.6 4.350 18.921 44.18 4.742 20.625 48.45 4.734 20.59230-Nov-06 6931.05 4.959 24.588 47.41 7.311 36.253 52 7.327 36.33331-Dec-06 6982.5 0.742 0.551 49.27 3.923 2.912 54.03 3.904 2.89830-Jan-07 7145.91 2.340 5.477 50.34 2.172 5.082 55.19 2.147 5.02428-Feb-07 6527.12 -8.659 74.984 46.16 -8.304 71.903 50.61 -8.299 71.86130-Mar-07 6587.21 0.921 0.848 46.23 0.152 0.140 50.68 0.138 0.127

30-Apr-07 7032.93 6.766 45.785 49.38 6.814 46.105 54.14 6.827 46.19630-May-07 7468.7 6.196 38.392 51.43 4.151 25.723 56.39 4.156 25.75030-Jun-07 7605.37 1.830 3.349 54.46 5.892 10.781 59.71 5.888 10.77431-Jul-07 8004.05 5.242 27.479 57.8 6.133 32.149 63.38 6.146 32.220

31-Aug-07 7857.61 -1.830 3.347 51.3-11.246 20.575 63.28 -0.158 0.289

30-Sep-07 8967.41 14.124 199.484 57.65 12.378 174.828 71.11 12.374 174.76331-Oct-07 10391.2 15.877 252.088 65.04 12.819 203.527 80.22 12.811 203.40630-Nov-07 10384.4 -0.065 0.004 67.93 4.443 -0.290 83.78 4.438 -0.29031-Dec-07 11154.3 7.414 54.965 72.24 6.345 47.039 89.09 6.338 46.989

30-Jan-08 9440.94 -15.360 235.941 60.11 -16.791 257.920 74.13 -16.792 257.93228-Feb-08 9404.98 -0.381 0.145 58.21 -3.161 1.204 71.79 -3.157 1.202

30-Mar-08 8232.82-12.463 155.331 50.53

-13.194 164.434 62.31 -13.205 164.579

TOTAL

19798

1

53.47

3

1595.08

5

1333.8

3

42.66

9

1552.11

7 1529 53.705 1532.957

24


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ARITHMETIC MEAN:

ARITHMETIC

MEAN

DIVIDEND OPTION GROWTH OPTION

X= Y

N

42.669 = 1.580

27

53.705 = 1.99827

CALCULATION FOR STANDARD DEVIATION:

Magnum Multiplier Plus Scheme 93 -

Date

Dividend Growth

NAV Y z (z)2 NAV Y Z (Z)230-Jan-06 36.05 0 0 0 39.54 0 0 028-Feb-06 37.6 4.300 2.719 7.394 41.24 4.299 2.310 5.33830-Mar-06 42.25 12.367 10.787 116.352 46.34 12.367 10.378 107.69430-Apr-06 44 4.142 2.562 6.562 48.27 4.165 2.176 4.73430-May-06 38.9 -11.591 -13.171 173.482 42.64 -11.664 -13.653 186.39530-Jun-06 36.21 -6.915 -8.496 72.174 39.72 -6.848 -8.837 78.09531-Jul-06 36.81 1.657 0.077 0.006 40.37 1.636 -0.353 0.12431-Aug-06 40.16 9.101 7.520 56.557 44.04 9.091 7.102 50.43630-Sep-06 42.18 5.030 3.450 11.899 46.26 5.041 3.052 9.313

31-Oct-06 44.18 4.742 3.161 9.993 48.45 4.734 2.745 7.53530-Nov-06 47.41 7.311 5.731 32.840 52 7.327 5.338 28.49531-Dec-06 49.27 3.923 2.343 5.489 54.03 3.904 1.915 3.66630-Jan-07 50.34 2.172 0.591 0.350 55.19 2.147 0.158 0.02528-Feb-07 46.16 -8.304 -9.884 97.691 50.61 -8.299 -10.288 105.83630-Mar-07 46.23 0.152 -1.429 2.041 50.68 0.138 -1.851 3.42530-Apr-07 49.38 6.814 5.233 27.389 54.14 6.827 4.838 23.40730-May-07 51.43 4.151 2.571 6.611 56.39 4.156 2.167 4.69530-Jun-07 54.46 5.892 4.311 18.586 59.71 5.888 3.898 15.19831-Jul-07 57.8 6.133 4.553 20.726 63.38 6.146 4.157 17.28331-Aug-07 51.3 -11.246 -12.826 164.507 63.28 -0.158 -2.147 4.609

30-Sep-07 57.65 12.37810.798 116.593

71.11 12.37410.384 107.838

31-Oct-07 65.04 12.819 11.238 126.301 80.22 12.811 10.822 117.11730-Nov-07 67.93 4.443 2.863 8.197 83.78 4.438 2.449 5.99631-Dec-07 72.24 6.345 4.764 22.700 89.09 6.338 4.349 18.91330-Jan-08 60.11 -16.791 -18.372 337.515 74.13 -16.792 -18.781 352.72928-Feb-08 58.21 -3.161 -4.741 22.479 71.79 -3.157 -5.146 26.47830-Mar-08 50.53 -13.194 -14.774 218.270 62.31 -13.205 -15.194 230.866



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TOTAL 1333.83 42.669 1.580 1682.706 1528.7 53.705 1.989 1516.241

STANDARD DEVIATION

S.D DIVIDEND GROWTH

S.D= (Z)

(N)

= (1682.706) = 7.89

27

(1516.241) =7.493

27

BETA

BETA DIVIDEND GROWTH

= N*XY- (X) (Y)

N* (X) -(X)

= 27(1552.116)-(53.473)(42.669)

27(1595.085) - (53.473)2

= 0.985

27(1532.957)-(53.47)(53.70)

27(1595.085) - (53.473)2

= 0.9579

ALPHA

ALPHA DIVIDEND GROWTH

= Y-B(X) = 1.580-0.985(1.980)

- 0.3696

= 1.989-0.957(1.980)

0.092

SHARPE RATIO



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Sharpe ratio Dividend Growth

Rp-Rf

S.D

= 1.580 0.08 = 0.190

7.89

= 1.989 0.08 = 0.254

7.493

TREYNOR RATIO

TREYNOR

RATIO

DIVIDEND GROWTH

Rp-Rf

B

= 1.580 0.08 = 1.522

0.9855

1.989 0.08 = 1.992

0.9579

POWER PLAN (ICICI PRUDENTIAL):



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POWER PLAN:

TOOLS FOR CALCULATION

A training report on SBI Mutual Fund.

Date

POWER PLAN

S&P CNX NIFTY

Dividend Growth

Close X X2 NAV Y X*Y NAV Y X*Y30-Jan-06 3001.1 18.02 59.74 28-Feb-06 3074.7 2.452 6.014 18.78 4.218 10.343 62.26 4.218 10.34530-Mar-06 3402.55 10.663 113.696 20.86 11.076 118.097 69.16 11.083 118.17130-Apr-06 3557.6 4.557 20.765 22.34 7.095 32.331 74.05 7.071 32.220

30-May-06 3071.05-13.676 187.043 19.57 -12.399 169.577 64.87 -12.397 169.546

30-Jun-06 3128.2 1.861 3.463 18.62 -4.854 -9.034 61.74 -4.825 -8.97931-Jul-06 3143.2 0.480 0.230 18.89 1.450 0.695 62.63 1.442 0.69131-Aug-06 3413.9 8.612 74.171 18.62 -1.429 -12.310 68.71 9.708 83.60630-Sep-06 3588.4 5.111 26.127 19.71 5.854 29.922 72.76 5.894 30.12931-Oct-06 3744.1 4.339 18.827 20.65 4.769 20.693 76.22 4.755 20.63330-Nov-06 3954.5 5.620 31.579 21.55 4.358 24.492 79.55 4.369 24.55131-Dec-06 3966.4 0.301 0.091 22.12 2.645 0.796 81.67 2.665 0.80230-Jan-07 4082.7 2.932 8.597 22.57 2.034 5.965 83.32 2.020 5.92428-Feb-07 3745.3 -8.264 68.296 21.04 -6.779 56.022 77.66 -6.793 56.13930-Mar-07 3821.55 2.036 4.145 18.91 -10.124 -20.610 77.49 -0.219 -0.44630-Apr-07 4087.9 6.970 48.577 20.38 7.774 54.180 83.5 7.756 54.05630-May-07 4295.8 5.086 25.865 21.77 6.820 34.687 89.2 6.826 34.71730-Jun-07 4318.3 0.524 0.274 21.9 0.597 0.313 89.72 0.583 0.30531-Jul-07 4528.85 4.876 23.773 22.63 3.333 16.253 92.75 3.377 16.46631-Aug-07 4464 -1.432 2.050 22.27 -1.591 2.278 91.26 -1.606 2.30030-Sep-07 5021.35 12.485 155.886 21.95 -1.437 -17.940 98.65 8.098 101.10431-Oct-07 5868.75 16.876 284.797 24.7 12.528 211.430 111.01 12.529 211.44130-Nov-07 5762.75 -1.806 3.262 24.76 0.243 -0.439 111.25 0.216 -0.39031-Dec-07 6138.6 6.522 42.537 27.24 10.016 65.326 122.41 10.031 65.426

30-Jan-08 5137.45-16.309 265.987 22.85 -16.116 262.837 102.66 -16.134 263.136

28-Feb-08 5223.5 1.675 2.805 22.32 -2.319 -3.885 100.32 -2.279 -3.81830-Mar-08 4734.5 -9.362 87.638 17.48 -21.685 203.001 87.93 -12.350 115.619

TOTAL 112277 53.1281506.496 572.5 6.078 1255.020 2252.49 46.037 1403.695

28


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ARITHMETIC MEAN DIVIDEND OPTION GROWTH OPTION

X= Y

N

6.078 = 0.225

27

46.037 = 1.7050

27

CALCULATION FOR STANDARD DEVIATION:

POWER PLAN

Date

Dividend Growth

NAV Y z (z)2 NAV Y Z (z)230-Jan-06 18.02 0.000 59.74 0 28-Feb-06 18.78 4.218 3.993 15.940 62.26 4.218 2.513 6.31730-Mar-06 20.86 11.076 10.851 117.736 69.16 11.083 9.378 87.93930-Apr-06 22.34 7.095 6.870 47.196 74.05 7.071 5.366 28.789

30-May-06 19.57 -12.399 -12.624 159.373 64.87 -12.397 -14.102 198.86730-Jun-06 18.62 -4.854 -5.079 25.800 61.74 -4.825 -6.530 42.64131-Jul-06 18.89 1.450 1.225 1.501 62.63 1.442 -0.263 0.06931-Aug-06 18.62 -1.429 -1.654 2.737 68.71 9.708 8.003 64.04530-Sep-06 19.71 5.854 5.629 31.685 72.76 5.894 4.189 17.55131-Oct-06 20.65 4.769 4.544 20.649 76.22 4.755 3.050 9.30530-Nov-06 21.55 4.358 4.133 17.085 79.55 4.369 2.664 7.09731-Dec-06 22.12 2.645 2.420 5.856 81.67 2.665 0.960 0.92230-Jan-07 22.57 2.034 1.809 3.274 83.32 2.020 0.315 0.09928-Feb-07 21.04 -6.779 -7.004 49.055 77.66 -6.793 -8.498 72.21730-Mar-07 18.91 -10.124 -10.349 107.093 77.49 -0.219 -1.924 3.70130-Apr-07 20.38 7.774 7.549 56.982 83.5 7.756 6.051 36.61330-May-07 21.77 6.820 6.595 43.499 89.2 6.826 5.121 26.22830-Jun-07 21.9 0.597 0.372 0.138 89.72 0.583 -1.122 1.25931-Jul-07 22.63 3.333 3.108 9.662 92.75 3.377 1.672 2.79631-Aug-07 22.27 -1.591 -1.816 3.297 91.26 -1.606 -3.311 10.96630-Sep-07 21.95 -1.437 -1.662 2.762 98.65 8.098 6.393 40.86731-Oct-07 24.7 12.528 12.303 151.375 111.01 12.529 10.824 117.16230-Nov-07 24.76 0.243 0.018 0.000 111.25 0.216 -1.489 2.21731-Dec-07 27.24 10.016 9.791 95.867 122.41 10.031 8.326 69.33030-Jan-08 22.85 -16.116 -16.341 267.028 102.66 -16.134 -17.839 318.24128-Feb-08 22.32 -2.319 -2.544 6.474 100.32 -2.279 -3.984 15.87530-Mar-08 17.48 -21.685 -21.910 480.030 87.93 -12.350 -14.055 197.556

TOTAL 572.5 6.078 0.228 1722.095 2252.4946.03

7 1.707 1378.66

STANDARD DEVIATION

S.D DIVIDEND GROWTH



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S.D= (Z)

(N)

= (1722.095) = 7.986

27

(1378.669) =7.145

27

BETA

BETA DIVIDEND GROWTH

= N*XY- (X) (Y)

N* (X) -(X)

= 27(1255.020)-(53.128)(6.078)

27(1506.496) - (53.128)2

=0.886

27(1403.695)-(53.128)(46.03)

27(1506.496) - (53.128)2

= 0.936

ALPHAALPHA DIVIDEND GROWTH

= Y-B(X) = 0.225-0.8866(1.967)=

- 1.518

= 1.7050-0.9366(1.967)

- 0.1372

SHARPE RATIO

Sharpe ratio Dividend Growth

Rp-Rf

S.D

= 0.225 0.08 = 0.018

7.986

= 1.7050 0.08 = 0.227

7.145



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TREYNOR RATIO

TREYNOR

RATIO

DIVIDEND GROWTH

Rp-Rf

B

= 0.225 0.08 = 0.018

0.8866

1.7050 0.08 = 1.734

0.9366

MAGNUM MULTIPLIER

1993 PLUS (SBI)

POWER PLAN (ICICI

PRUDENTIAL)

Dividend Growth Dividend Growth

Average

return

1.5803 1.9890 0.225 1.7050

Beta 0.9855 0.9579 0.8866 0.9366

S D 7.89 7.493 7.986 7.145

Alpha 0.3696 0.092 -1.518 -0.1372

Sharpe ratio 0.190 0.254 0.018 0.227

Treynor

ratio

1.522 1.992 0.163 1.7349

ANALYSIS & DISCUSSION:

The SBI Magnum Multiplier plus1993 Dividend option & Growth

option has given high returns compared to ICICI prudential Power

Plan.



32/36

The larger the Sharpe ratio, better the fund is performing. So, the SBI

Magnum Multiplier plus 1993 fund has a greater Sharpe ratio

compared to ICICI PRUDENTIAL Power Plan, all options show the

positive value, this means funds are performing well. Since the market has risen up, this has resulted in funds positive

return.

Since the funds objective is to invest in Diversified portfolios the

benchmarks index has performed very good, which has resulted in

good performance of the fund.

As per the Treynor index, the SBI Magnum Multiplier 1993 has

given higher returns compared to ICICI PRUDENTIAL Power Plan

due to which the risk is also high. But incase of ICICI PRUDENTIAL

Power Plan the returns are low and the risk is high compared to SBI

Magnum Multiplier 1993.

As per Beta for dividend option and growth option of SBI Magnum

Multiplier 1993 has got the highest risk. When market is 1 it moves

at 0.9855 in dividend &

0.9579 in growth compared to ICICI PRUDENTIAL Power Plan.

Overall, all the options are performing well.

CONCLUSION:



33/36

The Global market is fast growing in investment business. Countries like

US, whole of Europe spread their investment in different investment

alternatives with the help of advisory services to recommend investor.

In Indian scenario the investments are spread over Bank Deposits, Savings

Certificate, Post Office, Equity Markets and the latest Mutual Fund. Since

Mutual Funds are subject to market risk the investor take help of advisory

services for financial planning which helps the investor to take calculated

risk.

It was in 1995, the scenario got changed when depository act was

passed and PAN card details and D mat account was made compulsory

for all those investor who are investing a heavy amount. So as to protect

the interest of the investors. From july 2 of 2007 it has been made

mandatory to have PAN card details, this will enhance the faith of

investors in stock market and many investor would come forward to

invest in mutual fund .

No doubt, watching the value of investments go down day after day can be

pretty tough. However, the pain becomes more bearable if one follows a

proper investment plan and invests for the long term. Having a well

diversified portfolio as well as a plan to rebalance it from time to time also

helps a great deal. No wonder, Mutual fund are considered to be the best

way to invest in the stock market.

The mutual fund industry has gained a higher growth in the recent years.

There are around 34 Asset Management Companies which are currently

operating and the numbers of Mutual funds are around 630 funds, so it is



34/36

difficult to analyze each and every fund in order to known their riskiness and

return. Some tools are used to find risk and return of the fund, which helps

an investor to find out their risk.

The schemes taken for study proved to be a good investment avenue for

all the investors as the risk associated with these schemes are low and

they are yielding a very good return.

The volatility in the market might have affected the ratios but

definitely not the performance of the schemes. The schemes have beenthe one of the best schemes of SBI MF & ICICI PRUDENTIAL.

FUTURE PROSPECTS



35/36

The investment environment is becoming increasingly complex.

Innumerable parameters need to be factored in to generate a clear

understanding of market movement and performance in the near and

longtermfuture.

At SBIMF, we devote considerable resources to gain, maintain and

sustain our profitable insights into market movements. We consistently

push the envelope to ensure our investors get the maximum benefits

year after year.



36/36

REFRECNCES

www.sbimf.com

www.amfiindia.com

www.bseindia.com

www.nseindia.com

www.investopedia.com

www.researchonline.com

BOOK

Business Statistics

- G.C. Beri

- S P Gupta.

Deepak Training Report on SBI MF

Documents