Performance and Evaluation of SBI Mutual Funds in India
Performance and Evaluation of SBI Mutual Funds in India
ISSN No:-2456-2165
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under the control of SBI through SBI (Subsidiary Banks) Mutual Fund launched several schemes under the brand
Act, 1959. The State Bank of India group accounted for name of 'Magnum'. In October 1989, SBIMF launched
about 29 percent of deposits, 31 percent of advances and 'India Magnum Fund' an offshore fund in collaboration
about 27 percent of the offices of all scheduled commercial with Morgan Stanley of the US. In 1993, 'Magnum
banks in India. There are 15000s branches for SBI in India Multiplier Plus' a growth-oriented scheme, was launched
and 52 branches abroad. It is the biggest branch Bank in and it mobilized Rs. 948 crores, which is a record in the
the world. non-UTI category mutual funds. In 1994, SBIMF launched
'Magnum Bond Fund' to pass on the benefits of debt
State Bank of India Mutual Fund was the first to market. The main objective of the scheme is to invest on
sponsor a mutual fund in India is the public sector in 1987. fixed income securities, debentures and bonds. This is the
SBI Capital Markets Ltd was the principal trustee to SBI first debt-oriented mutual funds scheme in India. At
Mutual Fund (SBIMF). The SBI Mutual Fund launched its present out of 46 mutual funds operating in Indian mutual
first scheme - 'Magnum Regular Income Scheme 87' in fund industry the SBI Mutual Fund is in the sixth position
1987 and mobilized Rs. 131 crores. The main objective is on the basis of AAUM (Average Assets Under
to provide a regular income of 12 percent. Thereafter, SBI Management) This is presented in Table 1.
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For the purpose of detailed analysis of the performance of SBI mutual fund schemes, three categories of schemes floated by
SBI Mutual Fund - Income Schemes, Equity Schemes (ELSS) (other than ELSS) have been chosen as they together constitute
more than 58.53 percent of the AAUM of SBI Mutual Fund . This is evident from the presented in Table 2.
Before stating the objectives of the study , a brief Funds in general and Mutual Funds floated by Banking
review of past studies is presented here to identify the gaps sector in particular
in the research work carried out in the area of Mutual
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II. REVIEW OF LITERATURE Warren Boroson (1997)14 observed that very few
investments are as widely appealing as mutual funds.
A brief review of past research studies on Mutual Sadhak (1997)15 analyzed the marketing strategies and
Funds in general and SBI mutual funds in particular are investment practices of mutual funds in India.
presented here to identify the research gaps and bring out Madhusoodanan (1996)16 has examined the relationship
the significance of the present study . There is a vast body between the expected return and risk by using portfolio
of literature on research works carried out by eminent method instead of individual security approach. Bogle
scholars and financial experts on different aspects of the (1994)17 presents a guide to investors in developing and
capital market. But, the literature on mutual funds is implementing an intelligent investment programme
scanty. through mutual funds. Gupta (1993)18 made a Household
Investor survey with the main objective of soliciting data
Binod Kumar Singh (2012)1 has observed various on the investor preferences for mutual funds and other
factors influences us the investor’s attitude towards mutual financial assets. G Raju (1993)19 in his study observed
funds. Agapova (2011)2 has examined the cross-sectional that only 23 percent of the investor population covered are
differences among money market mutual funds (MMMFs) aware of mutual fund schemes and the awareness level is
in the context of sponsoring fund families and found that less than that of government bonds. Devakumars (1987)20
flows to family non-MMMFs Raju and Rao (2011)3 study reveals that prior to 1985, there were very few
evaluated the performance of selected mutual fund investors who are knowledgeable.
schemes in India during January 2008 to December 2010
by using various performance measurements James P.M. Review of the past research studies on Mutual Funds
(2009)4 in his thesis made an attempt to examine the revealed that, even though there are many research studies
financial performance of 29 Asset Management Companies on the performance of Mutual Funds in general, there are
(AMC) in India and evaluated the performance of 581 very few research studies on the performance of mutual
schemes floated by them. Sujatha,(2007)5 in her article funds in banking sector . In particular, research studies on
discussed the SEBI guidelines for Real Estate Mutual the performance of SBI Mutual Fund , which is the first
Funds (REMFs) with regard to investment criteria, Mutual Fund in India in the banking sector are
regulatory safeguards and structure of the REMFs. Shukla, conspicuous by their absence. Hence, the present study
(2006)6 in his study observed that Indian MFs industry is assumes significance.
dominated by institutional investors who hold about 65%
of the Indian mutual fund assets, whereas retail investors III. OBJECTIVES OF STUDY
account for only 1.3 percent. Muthappan and Danodharan
(2006)7 have made an attempt to evaluate the performance To analyse Growth and Development of Mutual Fund
of selected Mutual Fund schemes in India during the Industry In India.
period 1995 to 2000. They applied various performance To analyse the performance of selected Equity/Growth
measures such as Sharpe ratio, Treynor ratio, Jensen schemes of SBI Mutual Fund.
measure, Sharpe differential return and Fama’s To analyse the performance of selected Income/Debt
components of performance to examine the risk and return schemes of SBI Mutual Fund.
of selected mutual funds. Tripathy, (2004)8 has evaluated
performance of 31 Equity Linked Savings mutual fund IV. METHODOLOGY AND TOOLS OF ANALYSIS
Schemes in India over the period 1994-95 to 2001-2002.
She examined the investment performance of Indian The present study focuses on the performance of
mutual funds by applying six performance measures. Equity and Debt Mutual Funds schemes floated by SBI
Paitpal Singh and Singla (2000)9 have evaluated the Mutual Fund during a span of five years i.e from April 1,
performance of 12 growth oriented mutual funds which 2014 to March 31, 2018.The portfolio of SBI mutual fund
were selected on the basis stratified random sampling. is compared with variables benchmark portfolios and other
Narasimhan and Vijayalakshmi (2000)10 have made an macro economic (Sensex and Nifty) and also with to draw
empirical study of fund managers timing ability and meaningful interpretations. For the purpose of analysis of
diversification benefits on the performance of 76 mutual secondary data s relevant financial ratios and simple
funds selected. DC Anjaria & Dhaivat Anjaria (2000) 11 statistical measures like percentages and averages have
deals with the history of mutual funds in India, types of been used at the appropriate places.
mutual funds, marketing of mutual funds and SEBI
guidelines regarding mutual funds. Sethu, (1999)12 has This study is completely based on the secondary data.
examined the market timing ability. A Mutual Fund This data are collected from various sources - Annual
managers excess returns after adjusting for systematic risk Reports of SBI Mutual Fund research articles on Mutual
and portfolio adequacy of 18 open-ended growth schemes Funds, websites on mutual funds.
during March 1985 to July 1999. M.S.Turan and B.S.
Bodla (1998)13 has analyzed the growth of mutual fund The literature has been collected from text books on
industry in terms of number of schemes launched, Financial Services, Mutual Funds, published and un
resources mobilized, and number of investors, gain to published research works on Mutual Funds.
investors in terms of average return on NAVs and the risk
associated with these returns.
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V. RESULTS 1987. The sales of Mutual Fund Industry in India have
registered a positive growth during the study period. The
Growth and Development of Mutual Fund Industry in highest growth rate recorded was in the year 2010-2011
India (124.42 percent). By 2013-14 the AAUM have registerd
This research paper presents the growth and (6234 percent) Rs. 8,16,657 crores with the growing
development of Mutual Fund Industry in India. It also contribution in the industry. The number of schemes
explains the growth and development of mutual fund floated in Mutual Fund Industry in India has been
industries in India as depicted in this chapter, the mutual increasing and registerd an increase of 284 percent during
fund industry in India started in 1964 with the formation of the study period. Along with the number of schemes the
Unit Trust of India, at the initiative of the Government of mobilisation of funds also have registerd a high growth of
India and the Reserve Bank. The first scheme launched by 340.82 percent during the study period.
UTI were Unit Scheme 1964. At the end of 1988 UTI had
Rs.6,700 cores of assets under management. In 1987 public Performance of Selected Growth Schemes of SBI
sector mutual funds set up by public sector banks and Life Mutual Funds
Insurance Corporation of India (LIC) and General
Insurance Corporation of India (GIC). SBI Mutual Fund Selected Equity Schemes of SBI Mutual Funds:
was the first non- UTI Mutual Fund established in June
This research paper presents the selected equity schemes. The objective of these schemes is capital
schemes of SBI Mutual Funds. SBI Magnum is the oldest appreciation. Consequently, the portfolio of all these
scheme which has been in existing for more than 24 years. schemes comprises investment in equity of high potential
This is followed by SBI Magnum plus series, SBI Tax gain industries and a small percentage debt and money market
Scheme which have been in existence for more than 22 instrument.
years, SBI Magnum Global Fund comes next which has
been in existence for more than 20 years SBI Midcap Fund This research paper deals with performance of
, SBI Magnum Comma Fund , SBI Multi cap Fund has selected equity schemes of SBI during 2014-2018 . The
been in existence for about 10years SBI Blue Chip Fund , performance of 10 selected growth schemes presented
SBI Infrastructure Fund and SBI Tax Advantage Fund here. The performance is evaluated in terms of Net Asset
have been in existence for about 8 years out of 10 equity Value, Value Addition Value, Expense Ratio, Management
schemes selected for detailed analysis. SBI Tax Advantage Fee Ratio, Gross Income Ratio, Net Income Ratio,
scheme is only close-ended and all other are open-ended Portfolio Turnover Ratio, Portfolio investment in equity,
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Investment in Growth Industries, Investment in Ever Green period. Three out of ten schemes have registered highest
Industries, Investment in Cyclical Industries, Investment in expenses ratio and management fee ratio. The expenses
Interest- Sensitive Industries, Investment in Certificate of ratio and management fee ratios have measured by 32.85
deposits, Investment in Commercial paper and Investment and 64.76 percent respectively in SBI magnum multicap
in Other Mutual Funds and SBI equity schemes invested in fund. In SBI infrastructure fund these ratios have gone up
companies listed Nifty and Sensex Indices. by (50.54) and (77.89) SBI tax advantage series 1 (45.32)
and (102.85) in the years 2009-201, 2010-2011 and 2011-
The NAV is most important measure of the 2012.
performance of a Mutual Fund. All the Mutual Funds in
India periodically publish the NAVs of their schemes. The The study revealed that the Gross Income ratio and
unit holders can quickly judge the performance of their Net Income ratio of SBI equity schemes. Seven out of ten
schemes by looking at NAV. The NAV serves the purpose schemes have registered an increase in gross income ratio
of the unit holders veiw at NAV just like market price by and net income ratio during the study period 2014-2018.
equity share holders. SBI magnum equity fund registered the highest increase
in net income ratio with 1297.71 percent . SBI tax
The study revealed that NAV of SBI equity schemes advantage series 1528.87 percent where as the registered
has increased during the study period 2014-2018. It is highest increase in gross income ratio SBI magnum
observed that the NAV of both growth option and dividend multiplair plus registered the lowest increase in gross
option has increased during the study period. The highest income ratio 50.87 percent SBI infrastructure fund
NAV registered was in SBI Magnum global fund 1994 registered lowest increase in net income ratio 12.97
with 286.28 percent and 175.12 percent in growth option percent.
and dividend options respectively. This is followed by SBI
midcap fund growth option (251.61 percent) dividend Thee portfolio turn over ratio of SBI equity schemes
option (153.74 percent) SBI tax advantage fund series-1 revealed that seven out of ten schemes have registered
growth option (138.09 percent) dividend option (138.09 increase during the study period 2014-2018. Highest
percent). In the case of other selected schemes , it was portfolio turn over ratio registered SBI infrastructure fund
observed that the percentage of growth was normal both in (118.75) and the lowest portfolio turn over ratio registered
growth and dividend options. SBI Blue chip fund in was in SBI blue chip fund (1.86)
growth option(150.19 percent) and dividend option(96.55
percent), SBI magnum multicap fund in growth The portfolio of selected equity schemes of SBI
option(115.01 percent) and dividend option(93.32 percent), revealed that five out of ten schemes have invested 100%
SBI magnum multiplair scheme in growth option(155.83 in equity two out of ten schemes have invested 99% in
percent) and dividend option(99.08 percent), SBI magnum equity, three out of ten schemes have invested on average
comma in growth option(51.17 percent) and dividend 96% in equity. Industry wise portfolio revealed that
option(27.23 percent), SBI magnum equity in growth majority portion (60%) of funds are invested in Growth
option(162.95 percent) and dividend option(75.96 percent) industries. 20% of funds invested in Ever green industries
and SBI tax gain scheme in growth option(150.30 percent) 10 % of funds were invested in cyclical industries and 10
and dividend option(37.97 percent). The lowest percentage % funds invested in Interest – Sensitive industries. Apart
growth registered was in SBI infrastructure fund series 1 from this the selected SBI equity mutual funds schemes
in growth option(134.51 percent) and dividend have also invested in short instruments like Commercial
option(134.51 percent) paper, Certificate of Deposits and other Mutual Fund but
the proportion of investment is very less in them. The
The study revealed that the value addition of SBI company wise investment revealed that in seven schemes
equity schemes have decreased during the study period out of ten have invested in companies listed in Nifty and
2014-2018. Except three schemes the other seven schemes Sensex Indices. This shows professional approach in
have registered an increase in the value addition which is a investments as they are safe, liquidity, with assured return
positive and healthy sign. The highest value addition was providing companies. Such an approach is perfectly in tune
registered in SBI equity fund (460.66), SBI global magnum with the expected to in of unit holders.
fund 1994 ( 84 .75) . SBI magnum multiplair plus scheme
1993 with only 1 percent increase was the schemes with Performance of Selected Debt Schemes of SBI Mutual
lowest growth. Funds
The study revealed that Expenses ratio and Debt Schemes Floated By SBI Mutual Funds as an
Management fee ratio of SBI equity schemes have 2014 – 2018
registered similar percentage increase. In all the SBI equity
schemes the expenses ratio has increase during the study
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S. Type of Date of
Name of the Fund Object of the Fund Portfolio of the Fund
NO Fund Inception
1 Capital gains and Regular Debt and Money market
SBI Magnum Income Fund
Open-ended 6-11-1998 dividends instruments
2 SBI Magnum Insta cash Money market
fund Open-ended 13-5-1999 Earn returns instruments
3 SBI Guilt fund Open-ended 11-12-2000 Earn returns Government securities
4 SBI Magnum monthly Equity Debt and Money
Income Plan Open-ended 22-2-2001 Regular income and liquidity market instruments
5 SBI Magnum Children Equity Debt and Money
Benefit Plan Open -ended 28-12-2001 Capital appreciation market instruments
6 Equity Debt and Money
SBI Regular Savings Fund
Open -ended 1-10-2003 Capital appreciation market instruments
7 Equity Debt and Money
SBI Edge fund
Open-ended 1-10-2003 Capital appreciation market instruments
8 Debt and Money market
SBI Premier Liquid Fund
Open-ended 17-11-2003 Capital appreciation instruments
9 Debt and Money market
SBI Dynamic Bond Fund
Open-ended 15-12-2003 Earn returns instruments
10 SBI magnum monthly Equity Debt and Money
income plan –Floater Open-ended 9-11-2005 Regular income and liquidity market instruments
Table 4
(Source: SBI MF Annual Reports)
This research paper deals with performance of The study revealed that the Gross Income and Net
selected debt schemes of SBI during the 2014-2018. SBI income ratios for selected SBI Debt funds during the
Mutual Fund has floated 18 debt schemes . Out of thses 10 study period have increased Four out of ten schemes have
debt schemes have been selected for detailed analysis. The registered an increase in gross income ratio and net income
performance of debt schemes is represented in terms of Net ratio. Highest gross income ratio was found in SBI regular
Asset Value, Value Addition Value, Expense Ratio, savings highest net income ratio was found in SBI regular
Management Fee Ratio, Gross Income Ratio, Net Income savings on the after found the lowest gross income ratio
Ratio, Portfolio investment in Listed Securities, Unlisted was in SBI magnum floater (8.30 ) and lowest net income
Securities, Commercial paper, Treasury Bills, Other Mutual ratio was in sbi premier liquid fund (5.33)
Funds and also detailed analysis in Listed Securities and
Unlisted Securities for all Debt schemes. Analysis of portfolio of investment for selected Debt
funds revealed that they have invested both in listed and
The NAV of selected SBI Debt Funds has increased unlisted securities. Mostly all debt funds have invested in
during the study period, except SBI Magnum Income Fund debentures and bonds which is not in tune well their
in growth option, SBI Magnum monthly Income Plan – investment objectives stated in their offer documents.
Floater in dividend option. The highest NAV registered in Only a few funds have invested in both equity and debt that
SBI Magnum Income Fund in dividend option SBI but their investment in equity is highly insignificant fulfill
Magnum monthly Income Plan – Floater in growth option. the objectives stated.
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VI. DISCUSSIONS Income fund and SBI magnum monthly Income plan
Schemes are in the forefront and are giving strong
Every investor planning to commit his/her savings in competition to the similar schemes floated by other mutual
mutual funds read the offer documents , their portfolio funds. SBI infrastructure fund, SBI magnum children
of investments, consult others if they do not possess the benefit and SBI Insta cash fund Schemes are lagging
required knowledge and choose the scheme that suits behind due to their low NAV ,Value addition and deviation
their investment attitude . Risk takers will choose of their portfolios from their offer documents. The high
growth funds and risk averters will go for income funds. volatility in the stock market during the period of study
Thus, it is the responsibility of the fund manager to also has exerted great influence on the performance of
adhere to the objectives stated in the offer documents. these selected schemes.
Surprisingly, even in SBI mutual fund which is one of
the top mutual fund operating in India, it is found that REFERENCES
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midcap fund , SBI tax advantage fund ,SBI magnum
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