Topic mutual fund

Group member
Name roll no.

Kalpana gauda Vipin yadav Sanjay yadav Rahul bafana

MUTUAL FUNDS
Meaning and Introduction:Definition:According to SEBI (mutual funds) Regulations Act 1993 defines mutual fund as, a fund established in the form of a trust by a sponsor to raise monies by the trustees through the sale of units to the public under one or more schemes for investing in securities.

Cont,
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 then invested in capital market instruments such as shares, debentures and other securities. Mutual funds have a fund manager who invests the money on behalf of the investors by buying / selling stocks, bonds etc. The income earned through these investments and the capital appreciation realised 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 man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.

MUTUAL FUND PILLARS

Sponsor Trustee Asset management company Custodian

INDIAN MUTUAL FUND INDUSTRY

The mutual fund industry in India started in 1963 with the formation of
Unit Trust of India.

The history of mutual funds in India can be broadly divided into four
distinct phases :-

First phase (1963-87)

Second phase (1987-93) Third phase (1993-2003)

Fourth phase (since FEB 2003)

First phase (1963-87)

Established in 1963. It was set up by RBI and functioned under the regulatory authority of RBI. In 1978 UTI was de-linked from the RBI and IDBI took over the regulatory and administrative control. The first scheme launched by UTI was Unit Scheme 1964 (US 64).
7

Second phase (1987-93)

Entry of Public Sector Funds.

Public sector banks like LIC and GIC entered in the industry.

SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987.

Third phase (1993-03)

Entry of Private Sector Funds.

Kothari Pioneer (now merged with Franklin Templeton) was

the first private sector fund to be registered.

Fourth phase (since Feb 03)

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities.

1.

Undertaking of the Unit Trust of India- with assets under management of

Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme. It functions under the rules framed by GOI and does not come under the purview of the Mutual Fund Regulations.

2.

The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC -

registered with SEBI and functions under the Mutual Fund Regulations

10

TYPES OF MUTUAL FUNDS

By Structure Open-Ended anytime enter/exit Close-Ended Schemes redemption after period of scheme is

over, listed.

11

Mutual funds scheme types

Equity Diversified Schemes- Invest in equity Sectors Schemes Focus on particular sectors

Index Schemes Invest in all Stocks comprising the index

Equity Tax saving Scheme Demand a lock in period of 3 years

Dynamic Funds Alter the exposure to different assets classes

based on market scenario Debt Schemes Invest in medium and short term debts

Floating Rate Funds Invest in debt securities with floating

interest rates
12

Modes of receiving income on mutual investment

Growth Plan Dividend is neither declared nor paid out Income Plan Dividend are paid out
Dividend Re-Investment plan Dividend is declared but not paid out

13

Mutual fund investing Strategies

Systematic Investment Plans. Entails an investor to invest fixed sum of money at regular intervals Systematic withdrawals plans. Allowed to withdraw a fix sum of money at regular intervals Systematic transfers plans. Allowed to transfer a specified amount from one scheme to another on periodic basis
14

MUTUAL FUNDS ADVANTAGES

Professional Management Diversification of portfolio Convenient Administration Return Potential Low Costs Liquidity for some schemes Transparency Flexibility Choice of schemes

Tax benefits
15

Well regulated

MUTUAL FUNDS DISADVANTAGES

MFs are subject to market fluctuation No fixed return Entry and exit load (abolish right now) No Guarantees Management Risk

No tailor made investment

16

Current market scenario

AUM Rs 5,87,217 crore. ( current) Decline by 8.5 % compare to 6,41,937 crore in September 2011

17.90

3.77 3.91

5.21
6.01 8.34

11.48 %

Current market scenario as on June

Category-wise Average AUM (Rs billion)

Top 10 company

Interpretation of data
According to AMFI data, money market funds were the key contributors to the AUM rise of 4% to Rs6.92 lakh crore during the June quarter Gold ETFs average AUM crossed Rs10,000 crore mark HDFC Mutual Fund retains its top position

 equity mutual funds delivered average 20 per cent negative returns over one year period when debt funds gave positive returns of nearly 8 per cent. Among other investor categories, domestic banks and financial institutions category witnessed a decline of 77 per cent in folios as of March 2012. Compared to 5,779 in September 2011,

 Gold has been a key flavour of the season with 11 per cent and 61 per cent growth in folios in the segment over the last six and twelve months respectively. Overall effect 1.5 per cent decline between September last year and March 2012.

 Over 43% of the AuM is from corporate investors. Over 90% of corporate investor funds are invested in non-equity schemes. Almost 85% of corporate investors keep their funds in schemes for less than 12 months

Conclusion
Despite , euro zone crisis the mutual fund industries has shown acceptable growth Huge untapped market. Fund houses should emphasize on off shore segment.