3.1 INTRODUCTION TO SBI MUTUAL FUND

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1 3.1 INTRODUCTION TO SBI MUTUAL FUND UTI ruled more than two decades over mutual fund industry; in 1987 SBI mutual fund became the first non UTI public sector mutual fund in India & in the 1990 s a new era for the mutual fund industry was began by the entry of private companies. SBI Mutual Fund, India's largest bank sponsored mutual fund, is a joint venture between the State Bank of India and Societe Generale Asset Management, one of the world's top-notch fund management companies. Over the years, SBI Mutual Fund has carved a niche for itself through prudent investment decisions and consistent wealth creation. Since its inception, SBI Funds Management Private Ltd. has launched thirtytwo schemes and successfully redeemed fifteen of them. Throughout this journey, SBI Mutual Fund has profusely rewarded the 20,00,000 investors who have reposed their faith in it. Today, the SBI fund boasts of an expertise of managing assets over Rs. 13,000 crores and has a diverse profile of investors actively parking their investments across 28 active schemes. A vast network of 82 collection branches, 26 investor service centres, 21 investor service desks and 21 district organizers helps the SBI Mutual Fund to reach out to their investors. 3.2 CORPORATE PROFILE OF SBI With 25 years of rich experience in fund management, SBI Funds Management Pvt. Ltd. bring forward their expertise by consistently delivering value to their investors. SBI have a strong and proud lineage that traces back to the State Bank of India (SBI) - India's largest bank. It had a Joint Venture between SBI and AMUNDI (France), one of the world's leading fund management companies. With the network of over 222 points of acceptance across India, it deliver value and nurture the trust of vast and varied family of investors. Excellence has no substitute. And to ensure excellence right from the first stage of product development to the post-investment stage, SBI MF are ably guided by philosophy of Growth Through Innovation and stable investment policies. This dedication is what helps customers to achieve their financial objectives. 3.3 INVESTMENT EXPERTISE The best investment strategies put together by the best minds, Fund Managers. With a sharp eye to monitor, gauge and understand the changes in the market, fund managers and analysts gear up to meet new challenging environments. Their ability to capture the growth potential of Indian securities and manage complex portfolios as well as the drive to deliver optimum results is their forte. With superior securities selection, incisive research, intensive coverage including internal forecasts, active monitoring and regular tracking, dedicated team ensures minimization of risks while protecting interest of investor s. 38 P age

2 3.4 INVESTMENT PHILOSOPHY Money invested by investors is not only just money it s a faith of investors on SBI and to maintain the same strategy, rules, concept, knowledge,skills, expertise is needed or a philosophy is needed following are the some philosophical concepts of SBI Mutual fund: Growth Through Innovation. SBI had 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. What is innovation? Innovation is the process of turning ideas into concrete plans for progressive growth. We always seek to provide our investors with opportunities for progressive growth through our innovative products, superior stock selection and active portfolio management. Accordingly, we also enhance and optimize asset allocation and stock selection based on internal and external research. Derivatives are used to hedge and rebalance portfolios to keep the risk factors at reasonable levels,the three main phrases, which act as a guiding force for the investment performance, are as follows: Long-Term Capital Appreciation For The Investor: fund manager's view is not guided by any momentum play but by the objective of generating sustainable performance for the investor. Superior Stock Selection: SBI s team is encouraged to be ahead of the rest of the industry in terms of identifying new ideas & opportunities. Active Fund Management: While the performance of all the funds is benchmarked against a specific index, we do not encourage our investment team to replicate the index composition with the fund portfolio. Optimal Risk Management: Risk Management is an inherent part of any business. As one of the core focus areas, each of our strategies is subject to close scrutiny on a continuous basis. Regulatory agencies around the world are placing increasing pressure on institutions to measure and manage risk better. At SBI Funds Management, we follow enterprise wide approach to risk management with a dedicated, experienced and professional risk management team covering significant functions of the organization. Risk Management focuses on: Identifying actual and potential areas of risk Assessing the adequacy of internal controls Proposing risk mitigating measures and Safeguarding investor interest through ongoing analysis and monitoring Investment Objective 39 P age

3 Setting Benchmarks Time And Again For The Investors. Our objective is to endeavour to outperform our benchmarks through well researched investments in Indian equities. This is achieved by implementing an active management style based on fundamental analysis, leading to the construction of a portfolio. It could be blended, large cap, mid cap, or specific sector oriented - which aims at capturing the growth potential of Indian equities. 3.5 PRODUCTS OFFERED BY SBI SBI Mutual fund is dealing in various kinds of products some of the major funds are as follows. 3.6 WHAT ARE EQUITY FUNDS The primary objective of the equity asset class is to provide capital growth / appreciation by investing in the equity and equity related instruments of companies over medium to long term. Equity/ Growth Funds SBI Magnum Equity Fund SBI Magnum Global Fund SBI BlueChip Fund SBI Magnum Multicap Fund SBI Magnum Multiplier Plus 1993 SBI Small and Midcap Fund SBI Magnum Midcap Fund Sectoral Funds SBI Emerging Businesses Fund SBI Contra Fund SBI FMCG Fund SBI IT Fund SBI Pharma Fund 40 P age

4 Thematic Funds SBI Magnum COMMA Fund SBI Infrastructure Fund SBI PSU Fund ELSS Funds SBI Magnum Taxgain Scheme 1993 SBI Tax Advantage Fund - Series I SBI Tax Advantage Fund - Series II SBI Tax Advantage Fund - Series III 3.7 DEBT / INCOME SCHEMES The schemes in this asset class generally invest in fixed income securities such as bonds, corporate debentures, government securities (gilts), money market instruments, etc. and provide regular and steady income to investors. SBI Magnum Income Fund Floating Rate Plan - Savings Plus Bond Plan SBI Corporate Bond Fund SBI Magnum Income Fund SBI Benchmark Gsec Fund SBI Treasury Advantage Fund SBI Inflation Indexed Bond Fund SBI Dynamic Bond Fund SBI Magnum Gilt Fund - Short Term Plan SBI Magnum Gilt Fund - Long Term Plan SBI Short Term Debt Fund SBI Ultra Short Term Debt Fund 3.8 LIQUID SCHEMES The strategy for liquid funds include investments in short investment horizon, which includes 'cash' assets such as treasury bills, certificates of deposit and commercial paper. SBI Magnum InstaCash Fund SBI Magnum InstaCash Fund - Liquid Floater SBI Premier Liquid Fund 41 P age

5 3.9 HYBRID SCHEMES These schemes invest in a mixture of debt and equity securities in different proportions as prescribed in the Scheme Information Document. SBI Magnum Children's Benefit Plan SBI EDGE Fund SBI Magnum Balanced Fund SBI Regular Savings Fund SBI Magnum Monthly Income Plan SBI Magnum Monthly Income Plan - Floater 3.10 FIXED MATURITY PLANS These are closed ended debt schemes with a fixed maturity date and they invest in debt & money market instruments maturing on or before the date of the maturity of the scheme. SBI Debt Fund Series A - 1 (15 Months) SBI Debt Fund Series A - 2 (15 Months) SBI Debt Fund Series A - 3 (420 Days) SBI Debt Fund Series A - 4 (786 Days) SBI Debt Fund Series A - 5 (411 Days) SBI Debt Fund Series A - 6 (760 Days) SBI Debt Fund Series A - 7 (3 Years) SBI Debt Fund Series A - 8 (30 Days) SBI Debt Fund Series A - 9 (366 Days) SBI Debt Fund Series A - 10 (400 Days) SBI Debt Fund Series A - 11 (385 Days) SBI Debt Fund Series A - 12 (366 Days) SBI Debt Fund Series A - 13 (366 Days) SBI Debt Fund Series A - 14 (380 Days) SBI Debt Fund Series A - 15 (745 Days) SBI Debt Fund Series A - 16 (366 Days) SBI Debt Fund Series A - 17 (366 Days) SBI Debt Fund Series A - 18 (366 Days) 42 P age

6 SBI Debt Fund Series A - 19 (366 Days) SBI Debt Fund Series A - 21 (366 Days) SBI Debt Fund Series A - 22 (366 Days) SBI Debt Fund Series A - 23 (36 Months) SBI Debt Fund Series A - 24 (366 Days) SBI Debt Fund Series A - 25 (366 Days) SBI Debt Fund Series A - 26 (682 Days) SBI Debt Fund Series A - 30 (91 Days) SBI Debt Fund Series A - 31 (367 Days) SBI Debt Fund Series A - 32 (367 Days) SBI Debt Fund Series A - 33 (36 Months) SBI Debt Fund Series A - 34 (367 Days) SBI Debt Fund Series 13 MONTHS 14 SBI Debt Fund Series 13 MONTHS 15 SBI Debt Fund Series 14 MONTHS 1 SBI Debt Fund Series 14 MONTHS 2 SBI Debt Fund Series 15 MONTHS 10 SBI Debt Fund Series 16 MONTHS 1 SBI Debt Fund Series 16 MONTHS 2 SBI Debt Fund Series 17 MONTHS 1 SBI Debt Fund Series 18 MONTHS 11 SBI Debt Fund Series 18 MONTHS 12 SBI Debt Fund Series 18 MONTHS 13 SBI Debt Fund Series 180 DAYS 26 SBI Debt Fund Series 36 MONTHS 1 SBI Debt Fund Series 36 MONTHS 2 SBI Debt Fund Series 36 MONTHS 3 SBI Debt Fund Series 36 MONTHS 5 SBI Debt Fund Series 36 MONTHS 6 SBI Debt Fund Series 36 MONTHS 7 SBI Debt Fund Series 366 DAYS 27 SBI Debt Fund Series 366 DAYS 28 SBI Debt Fund Series 366 DAYS 29 SBI Debt Fund Series 366 DAYS 30 SBI Debt Fund Series 366 DAYS P age

7 SBI Debt Fund Series 366 DAYS 32 SBI Debt Fund Series 366 DAYS 33 SBI Debt Fund Series 366 DAYS 34 SBI Debt Fund Series 366 DAYS 35 SBI Debt Fund Series 366 DAYS 36 SBI Debt Fund Series 366 DAYS 37 SBI Debt Fund Series 366 DAYS 38 SBI Debt Fund Series 366 DAYS 39 SBI Debt Fund Series 366 DAYS 40 SBI Debt Fund Series 366 DAYS 41 SBI Debt Fund Series 366 DAYS 42 SBI Debt Fund Series 366 DAYS 43 SBI Debt Fund Series 366 DAYS 44 SBI Debt Fund Series 366 DAYS 45 SBI Debt Fund Series 366 DAYS 46 SBI Debt Fund Series 366 DAYS 47 SBI Debt Fund Series 366 DAYS 48 SBI Debt Fund Series 366 DAYS 49 SBI Debt Fund Series 366 DAYS 50 SBI Debt Fund Series 366 DAYS 51 SBI Debt Fund Series 366 DAYS 52 SBI Debt Fund Series 366 DAYS 53 SBI Debt Fund Series 366 DAYS 54 SBI Debt Fund Series 60 MONTHS 1 SBI Debt Fund Series 60 MONTHS 2 SBI Debt Fund Series 60 MONTHS 3 SBI Fixed Interval Debt Series 90 DAYS 1 SBI Debt Fund Series 90 DAYS 80 SBI Debt Fund Series 90 DAYS 81 SBI Debt Fund Series 90 DAYS 82 SBI Debt Fund Series 90 DAYS 84 SBI Debt Fund Series 90 DAYS P age

8 3.11 EXCHANGE TRADED SCHEMES Exchange Traded Funds/ Schemes (ETFs) are a basket of securities that are traded on the stock exchange. SBI Gold Exchange Traded Scheme SBI SENSEX ETF 3.12 FUND OF FUNDS SCHEMES A "Fund of Funds Scheme" means a mutual fund scheme that invests primarily in other schemes of the same mutual fund or other mutual funds. SBI Gold Fund 3.13 PROFILE OF HDFC HDFC Mutual Fund has been constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882, as per the terms of the trust deed dated June 8, 2000 with Housing Development Finance Corporation Limited (HDFC) and Standard Life Investments Limited as the Sponsors / Settlors and HDFC Trustee Company Limited, as the Trustee. The Trust Deed has been registered under the Indian Registration Act, The Mutual Fund has been registered with SEBI, under registration code MF/044/00/6 on June 30, HDFC Mutual Fund has been one of the best performing mutual funds in the last few years. HDFC Asset Management Company Limited (AMC) functions as an Asset Management Company for the HDFC Mutual Fund. AMC is a joint venture between housing finance giant HDFC and British investment firm Standard Life Investments Limited. It conducts the operations of the Mutual Fund and manages assets of the schemes, including the schemes launched from time to time. HDFC Mutual Fund is one of the largest mutual funds and well-established fund house in the country with focus on delivering consistent fund performance across categories since the launch of the first scheme(s) in July While the past experience does make HDFC a veteran, but when it comes to investments, Fund 000has never believed that the experience is enough INVESTMENT PHILOSOPHY OF HDFC The single most important factor that drives HDFC Mutual Fund is its belief to give the investor the chance to profitably invest in the financial market, without constantly worrying about the market swings. To realize this belief, HDFC Mutual Fund has set up the infrastructure required to conduct all the fundamental research and back it up with effective analysis. HDFC s strong emphasis on managing and controlling portfolio risk avoids chasing the latest "fads" and trends. 45 P age

9 3.15 WHAT HDFC OFFER? HDFC believe, that, by giving the investor long-term benefits, they have to constantly review the markets for new trends, to identify new growth sectors and share this knowledge with the investors in the form of product offerings. HDFC have come up with various products across asset and risk categories to enable investors to invest in line with their investment objectives and risk taking capacity EQUITY/GROWTH FUNDS 1) HDFC Large Camp Fund: To provide long-term capital appreciation by investing predominantly in large cap companies. NAV as on 12 Mar Inception Date18 Feb ) HDFC Small & Mid Cap Funds: To provide long-term capital appreciation by investing predominantly in Small-Cap and Mid-Cap companies. NAV as on 12 Mar Inception Date 03 Apr ) HDFC Mid Cap Opportunities Fund: To generate long-term capital appreciation from a portfolio that is substantially constituted of equity and equity related securities of Small and Mid-Cap companies. NAV as on 12 Mar Inception Date25 Jun ) HDFC Tax Saver (ELSS): The investment objective of the Scheme is to achieve long term growth of capital. NAV as on 12 Mar Inception Date31 Mar ) HDFC Prudence Fund : The investment objective of the Scheme is to provide periodic returns and capital appreciation over a long period of time, from a judicious mix of equity and debt investments. NAV as on 12 Mar Inception Date01 Feb ) HDFC Arbitrage Fund: To generate income through arbitrage opportunities between cash and derivative market and arbitrage opportunities within the derivative segment and by deployment of surplus cash in debt securities. NAV as on 12 Mar Inception Date23 Oct ) HDFC Index Fund- Nifty Plan: The objective of this Plan is to generate returns that are commensurate with the performance of the Nifty, subject to tracking errors 46 P age

10 NAV as on 12 Mar Inception Date17 Jul ) HDFC Priemer Multi Cap Fund: The primary objective of the Scheme is to generate capital appreciation in the long term through equity investments by investing in a diversified portfolio of Mid Cap and Large Cap `blue chip` companies. NAV as on 12 Mar Inception Date06 Apr ) HDFC Capital Builder Fund :The Investment Objective of the Scheme is to achieve capital appreciation in the long term. NAV as on 12 Mar Inception Date01 Feb ) HDFC Equity Fund: The investment objective of the Scheme is to achieve capital appreciation. NAV as on 12 Mar NAV as on 12 Mar ) HDFC Infrastructure Fund: To seek long-term capital appreciation by investing predominantly in equity and equity related securities of companies engaged in or expected to benefit from the growth and development of infrastructure. NAV as on 12 Mar Inception Date10 Mar ) HDFC Focus Large Cap Fund: To achieve long term capital appreciation. NAV as on 20 Jun Inception Date10 Feb ) HDFC Advantage Long Term Fund (ELSS): The primary objective of the Scheme is to generate long term capital appreciation from a portfolio that is invested predominantly in equity and equity related instruments. NAV as on 12 Mar Inception Date02 Jan ) HDFC Balanced Fund: The primary objective of the Scheme is to generate capital appreciation along with current income from a combined portfolio of equity and equity related and debt and money market instruments. NAV as on 12 Mar Inception Date11 Sep ) HDFC Index Fund Sensex Plus Plan: The objective of this Plan is to invest 80 to 90% of the net assets of the Plan in companies whose securities are included in SENSEX and between 10% & 20% of the net assets in companies whose securities are not included in the SENSEX. NAV as on 12 Mar Inception Date17 Jul P age

11 16) HDFC Index Fund Sensex Plan: The objective of this Plan is to generate returns that are commensurate with the performance of the SENSEX, subject to tracking errors. NAV as on 12 Mar Inception Date17 Jul ) HDFC Core & Satelite Fund: The primary objective of the Scheme is to generate capital appreciation through equity investment in companies whose shares are quoting at prices below their true value. NAV as on 12 Mar Inception Date17 Sep ) HDFC Top 200 Fund: To generate long term capital appreciation from a portfolio of equity and equity-linked instruments primarily drawn from the companies in BSE 200 index. NAV as on 12 Mar Inception Date11 Oct ) HDFC Growth Fund: The primary investment objective of the Scheme is to generate long term capital appreciation from a portfolio that is invested predominantly in equity and equity related instruments. NAV as on 12 Mar Inception Date11 Sep HDFC DEBT/INCOME FUNDS HDFC INFLATION INDEX BASED FUND (formerly Morgan Stanely gilt fund) HDFC BANKING & PSU DEBT FUND HDFC CORPORATE DEBT OPPORTUNITIES FUND HDFC MEDIUM TERM OPPORTUNITIES FUND HDFC SHORT TERM OPPORTUNITIES FUND HDFC FLOATING RATE INCOME FUND-LONG TERM PLAN HDFC GILT FUND-LONG TERM PLAN HDFC HIGH INTEREST FUND DYNAMIC PLAN HDFC MULTIPLE YIELD FUND-PLAN 2005 HDFC MF MONTHLY INCOME PLAN-LONG TERM PLAN HDFC CASH MANAGEMENT FUND-TREASURY ADVANTAGE PLAN HDFC FLOATINGRATE INCOME FUND-SHORT TERM PLAN HDFC GILT FUND-SHORT TERM PLAN HDFC SHORT TERM PLAN HDFC INCOME FUND HDFC MULTIPLE YIELD FUND HDFC MF MONTHLY INCOME PLAN-SHORT TERM PLAN 48 P age

12 3.18 HDFC LIQUID FUND HDFC CASH MANAGEMENT FUND-SAVINGS PLAN HDFC CASH MANAGEMENT FUND-CALL PLAN HDFC LIQUID FUND PREMIUM PLAN HDFC LIQUID FUND 3.19 CHILDREN S GIFT FUND HDFC CHILDREN S GIFT FUND SAVINGS PLAN HDFC CHILDREN S GIFT FUND INVESTMENT PLAN 3.20 HDFC GOLD EXCHANGE TRADED FUND HDFC GOLD EXCHANGE TRADED FUND 3.21 QUARTERLY INTERVAL FUND HDFC QUARTERLY INTERVAL FUND 3.22 ANNUAL INTERVAL FUND-SERIES1 HDFC ANNUAL INTERVAL FUND-SERIES1-PLAN A,B 3.23 RAJIV GANDHI EQUITY SAVINGS SCHEME HDFC FOCUSED EQUITY FUND PLAN A HDFC RAJIVGANDHI EQUITY SAVING SCHEMES-SERIES2 HDFC RAJIV GANDHI EQUITY SAVINGS SCHEME 3.24 FIXED MATURITY PLAN HDFC FMP MARCH 2015(1) HDFC FMP 91D FEBRUARY 2015(1) HDFC FMP 1157O FEBURARY 2015(1) HDFC FMP1184D JANUARY 2015(1) HDFC FMP 1115D JANUARY 2015(1) HDFC FMP 1107D DECEMBER 2014(1) HDFC FMP 1111D NOVEMBER 2014(1) HDFC FMP 1113D NOVEMBER 2014 (1) HDFC FMP 1107D OCTOBER 2014 (1) HDFC FMP 1115D OCTOBER 2014(1) HDFC FMP 1125D SEPTEMBER 2014 (1) HDFC FMP 1128D SEPTEMBER 2014(1) 49 P age

13 3.25 FUNDS OF FUNDS SCHEME HDFC DYNAMIC PE RATIO FOF (FORMERLY MORGAN STANELY MULTI ASSET FUND-PLAN A &B) HDFC GOLD FUND These are the products & services offered by the HDFC Mutual Fund & SBI Mutual fund but for the purpose of study as a sample few funds are taken which would represent the effectiveness of a particular sector i.e. Private sector or Public sector because it is not possible to analyse each fund in any category in India mostly investors opt the route of mutual funds either through equity or debt that s why five funds from each category are taken for the purpose of research. 50 P age