MEANING OF MUTUAL FUNDS

A Mutual fund is a common pool

of money in to which investors
with common investment
objective place their
contributions that are to be
invested in accordance with the
stated investment objective of
the scheme. The investment
manager would invest the
money collected from the
investor in to assets that are
defined/ permitted by the stated
objective of the scheme.
HISTORY OF MUTUAL
His to ry o f mutual
7000 funds in IndiaFUNDS Firs t to launc h
Ope n-e nde d funds
1994-95
Private Sector
6000 Birla / Alliance
April 92
Peak driven bull
Sep 94
market
FII driven peak
5000
1993-94 Bear Hug
Morgan Stanley

4000

1992-93
First d
3000 Private Sector
1999
May 92 Tax Breaks
1987-88 Market crashes after the
Public Sector
Mutual Funds
Scam and 15 days
2000
July 91 broker’s Strike. During the Be ar Phas e
Dr. Manmohan Singh Firs t o pe n-e nde d De bt
liberalizes capital market fund launc he d
1000 by abolishing Controller
of Capital Issues

Phas e s in the marke t IPO Marke t Equity Fixe d De po s its Mutual Funds ?
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
MUTUAL FUND PILLAR’S

Sponsor
Trustee
Asset management company
Custodian
CLASSIFICATION OF MUTUAL FUNDS
MUTUAL FUNDS

OTHER FUNDS/
MATURITY INVESTMENT
SCHEMES

CLOSE
D INVEST
ENDED
MENT

OPEN
ENDE
D GROWTH INCOME/
MATUR /EQUITY DEBT
ITY

MONEY
MARKET OR
Other funds/scheme:

Tax Saving funds

Sector Specific funds
Performance funds
INFORMATION OF MUTUAL FUNDS SCHEMES

Load or no-load Fund

Assured return scheme
Offer document
 Net Asset Value (NAV)
Sale price
Repurchase Price
TYPE OF RISK

MARKET RISK

LIQUIDITY RISK

CREDIT RISK

INTEREST RATE RISK

INVESTMENT RISK
WHO ARE THE ISSUERS OF MUTUAL FUND IN INDIA

Alliance Capital Mutual Fund

Birla Mutual Fund
Cholamandalam Mutual Fund
Fidelity Equity Fund
HDFC Mutual Funds
ING Saving trust
RELIANCE Capital
SBI Mutual
TOP 10 MUTUAL FUNDS COMPANIES
COMPARISON OF TWO GROWTH SCHEMES:
SCHEME 1. RELIANCE
GROWTH FUND
 APPLICATION AMOUNT-
Rs. 5500
 ASSET ALLOCATION
EQUITY 80-100 RISK – high
DEBT 0 - 20 RISK – low
 EXPENSES - 2.32%
SCHEME 2. HDFC GROWTH
SCHEME.
APP LICATION AMOUNT –
Rs. 5000
ASSET ALLOCATION
EQUITY 65-100 RISK – high
DEBT UPTO 35 RISK -
medium
EXPENSES - 1.80%
REGULATION & GUIDELINES FOR MUTUAL FUNDS

 Mutual fund shall be established under the Indian

Trust Act and be authorized for business by the SEBI.
 The AMC should have minimum net worth of Rs.5
crores at all times.
SEBI is given the power to withdraw the authorization
given to any AMC.
At least 50% of the Board of AMC must be
independent directors who have no connections with
the sponsoring organization.
INVESTORS RIGHTS

Unit Certificates
Transfer of Units
Refund of Application Money
Audited annual report
Net Asset value
CHECK THE MUTUAL FUND STATEMENT BEFORE INVESTING

Investors' personal details

Adviser's name:
Bank details
Current cost and value
PAN details
WHERE TO BUY A MUTUAL FUND
Asset Management Company
Brokers and financial product distributors
Online
FUTURE SCENARIO

The asset base will continue to grow at an annual rate

of about 30 to 35 % .
Mergers.
Foreign owned mutual fund companies .