IMPACT OF MUTUAL

FUNDS GROWTH ON
EQUITY MARKET -
A STUDY
 CONTENTS

Introduction
Research Methodology
Data Analysis & Interpretation
Findings
Suggestions
Conclusion
INTRODUCTION
A mutual fund is a financial vehicle that combines
shareholder assets and invests them in securities such as
stocks, bonds, money market instruments, and other
assets.
Mutual funds are managed by expert money
administrators who allocate the assets of the fund in order
to generate capital gains or income for the fund's
investors.
Simply, a mutual fund is a pool of money managed by a
professional fund manager.
The portfolio of a mutual fund is structured and managed
to meet the investment goals stated in the prospectus.
SEBI (Mutual Funds) Regulations 1993, defines a
Mutual Fund as
“a fund established in the form of a Trust by a sponsor
to raise money by the trustee through the sale of units
to the public under one or more schemes for investing
in securities in accordance with these regulations”.
 FEATURES OF MUTUAL FUNDS
Liquidity - Mutual Fund units can be simply redeemed to help you
out in a pinch financially. The redemption amount is typically
credited to your bank account within 3–4 business days of the
redemption date, depending on the type of scheme.

Portfolio Diversification - A diversified portfolio with a variety of

stocks and other investments is one of the main benefits of
investing in mutual funds. A mutual fund may have proportionate
exposure to a variety of financial instruments such as equities,
loans, etc., depending on the scheme's purpose.
Investment Flexibility - The flexibility that mutual funds provide is one of
their fundamental characteristics. You have two options for your initial
investment: a sizable lump sum or monthly little investments (as little as
Rs. 500 per month with a SIP) (Systematic Investment Plan).

Low Cost - Investors must pay a small charge known as the expense
ratio to mutual funds. Operating costs like management, administration,
etc. are included in the expense ratio along with other fees.

Properly Regulated - The mutual fund market is governed by SEBI, or the

Securities and Exchange Board of India. The SEBI (Mutual Funds)
Regulations, 1996, which govern mutual funds, must be properly followed
in order to maintain transparency and the safety of investors' money.
HISTORY OF MUTUAL FUNDS
Advantages of
Mutual Funds
Convenience
Transparency
Economies of Scale
Safety
Automated Payments
Expert Management
Disadvantages
of Mutual Funds
No guaranteed returns
Risk of losing money
Capital Gains Tax
Entry or Exit Load
Diversification Might Cause
Lower Profits
Difficult Phases
MARKET SHARE OF MUTUAL FUNDS
RESEARCH METHODOLOGY
1. For the examination of framed objectives, the study
employs a descriptive research approach.
2. The study uses yearly subscription and redemption of
Mutual funds and tries to calculate Assets under
management by subtracting Subscription and redemption.
3. The study also considered the Yearly Market Capitalization
of the Equity Market for the sample from 2000-01 to 2021-
22 to examine the impact of mutual funds on the Equity
market.
 Objectives of the Study
1. To examine the mutual fund investment trends with a
comparison of equity investment.
2. To study the relationship of mutual fund subscription
and redemption with the equity market capital.
3. To study the impact of mutual fund subscription and
redemption on the equity market capital
 Scope of the Study
The present study has been emphasized to know the mutual
fund investment’s role in the equity markets growth of India.
The study is considering the secondary data from the period
of 2000- 2001 to 2021-2022.
In the study mutual funds investment were considered in the
following segments.
1. Mutual fund Subscription
2. Mutual fund redemption
3. Indian Equity Market Capitalization
 Statistical Tools
Stationary Test – ADF and Phillip Parron
The augmented Dickey–Fuller (ADF) test is used to determine whether a unit
root exists in a time series sample, and has applications in statistical and
economic analysis. The alternative hypothesis is variable depending on which
version of the test is employed but is commonly stationary or trend-stationary.

Phillip Parron
In statistics, the Phillips–Perron test (named after Peter C. B. Phillips
and Pierre Perron) is a unit root test. That is, it is employed in time
series analysis to test the null hypothesis that a time series is integrated
in order.
VECM (Vector Error Correction Model)
Using a VAR model of order p - 1 on the differences of the variables and an
error-correction term generated from the known (estimated) co-
integrating relationship, the Vector Error Correction Model (VECM) is
proposed.

Ordinary Least Square Method

The ordinary least squares (OLS) approach is a linear regression
methodology for estimating model parameters with little to no
assumptions. This strategy seeks to minimize the sum of squared
differences between observed and forecasted outcomes.
Objective 1 - To examine the mutual fund investment trends in
comparison of equity investment.
Objective 2 - To study the relationship of mutual fund subscription
and redemption with the equity market capital.
FINDINGS
SUGGESTIONS
CONCLUSION
THANK YOU..!!