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PROJECT REPORT ON FINANCIALSERVICES

Assignment Issue Date: 10.04.2009 Date of Submission: 09.05.2009SUBMITTED TO. ;- SUBMITTED BY ;-Ms. Jasjit Bhatia

NAME ;- MANOJ KUMAR

SEM ;- 3 (PTU) feb 2008

RAI BUSINESS SCHOOL( NEW DELHI)

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Question:-

Describe the different types of mutual funds availablein the Indian market and classify them according to the following:

1. Investment objective2. Nature of the fund3. Maturity period

Ans;-

MUTUAL FUND

It is a company which combines theinvestment funds of many people whose investment goals are similar,and in turn invests those funds in a wide variety of securities.Investment managers supervise the selection, purchase and sale of individual would do for himself, Other words we can say “The task which an individual would do for himself given the time, inclination andaccess to information and resource, is performed by the managers of themutual fund

UNDERSTANDING MUTUAL FUND

Mutual fund is a trust that pools money from a group of investors(sharing common financial goals) and invest the money thus collected intoasset classes that match the stated investment objectives of the scheme.Since the stated investment objectives of a mutual fund scheme generallyforms the basis for an investor's decision to contribute money to the pool, amutual fund can not deviate from its stated objectives at any point of time.Every Mutual Fund is managed by a fund manager, who usinghis investment management skills and necessary research works ensuresmuch better return than what an investor can manage on his own. The capitalappreciation and other incomes earned from these investments are passed onto the investors (also known as unit holders) in proportion of the number of units they own.

RAI BUSINESS SCHOOL( NEW DELHI)

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When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets of the fund in the same proportion as hiscontribution amount put up with the corpus (the total amount of the fund).Mutual Fund investor is also known as a mutual fund shareholder or a unitholder.Any change in the value of the investments made into capitalmarket instruments (such as shares, debentures etc) is reflected in the NetAsset Value (NAV) of the scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a scheme iscalculated by dividing the market value of scheme's assets by the totalnumber of units issued to the investors.

TYPES OF MUTUAL FUNDS

General Classification of Mutual Funds;- there are two type of mutual funds basically those are given below;-1.Open end fund2.closed end fund1.Open-end Funds

Funds that can sell and purchase units at any point intime are classified as Open-end Funds. The fund size (corpus) of an open-end fund is variable (keeps changing) because of continuous selling (toinvestors) and repurchases (from the investors) by the fund. An open-endfund is not required to keep selling new units to the investors at all times butis required to always repurchase, when an investor wants to sell his units.The NAV of an open-end fund is calculated every day.

RAI BUSINESS SCHOOL( NEW DELHI)

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