RAJARAM SHINDE

COLLEGE OF MBA

AT POST – PEDHAMBE, TAL -CHIPLUN, Dist –Ratnagiri, 415603

(Affiliated to University of Mumbai, Recognized by AICTE)

Presentation Subject
FINANCIAL MARKETS & INSTITUTIONS
Presentation On
Mutual funds
Submitted by

Mr.OMkar Chalke
Under the guidance of prof.Mandavkar sir

Student sign faculty sign

 Mutual funds

What Is a Mutual Fund?

A mutual fund is an investment option where money from many

people is pooled together to buy a variety of stocks, bonds, or other
securities. This mix of investments is managed by a
professional money manager, providing individuals with a portfolio
that is structured to match the investment objectives stated in the
fund's prospectus.

By investing in a mutual fund, individuals gain access to a broad

range of investments, which can help reduce risk compared to
investing in a single stock or bond. Investors earn returns based on
the fund's performance minus any fees or expenses charged. In this
way, mutual funds can give small or individual investors access
to professionally managed portfolios of equities, bonds, and other

Types of Mutual Funds

There are several types of mutual funds available for
investment, though most mutual funds fall into one of four main
categories which include stock funds, money market funds,
bond funds, and target-date funds.

Stock Funds
As the name implies, this fund invests principally in equity or
stocks. Within this group are various subcategories. Some
equity funds are named for the size of the companies they invest
in: small-, mid-, or large-cap. Others are named by their
investment approach: aggressive growth, income-oriented,
value, and others. Equity funds are also categorized by whether
they invest in domestic (U.S.) stocks or foreign equities. To
understand the universe of equity funds, use a style box, an
example of which is below.

Bond Funds

A mutual fund that generates a minimum return is part of

the fixed income category. A fixed-income mutual fund focuses
on investments that pay a set rate of return, such as government
bonds, corporate bonds, or other debt instruments. The fund
portfolio generates interest income that is passed on to the
shareholders.

Index Funds
Index funds invest in stocks that correspond with a major
market index such as the S&P 500 or the Dow Jones Industrial
Average (DJIA). This strategy requires less research from
analysts and advisors, so fewer expenses are passed on to
shareholders, and these funds are often designed with cost-
sensitive investors in mind.

Balanced Funds

Balanced funds invest in a hybrid of asset classes, whether

stocks, bonds, money market instruments, or alternative
investments. The objective of this fund, known as an asset
allocation fund, is to reduce the risk of exposure across asset
classes.

Money Market Funds

The money market consists of safe, risk-free, short-term debt

instruments, mostly government Treasury bills. An investor
will not earn substantial returns, but the principal is
guaranteed. A typical return is a little more than the amount
earned in a regular checking or savings account and a little less
than the average certificate of deposit (CD).

Income Funds

Income funds are named for their purpose: to provide current

income on a steady basis. These funds invest primarily in
government and high-quality corporate debt, holding these
bonds until maturity to provide interest streams. While fund
holdings may appreciate, the primary objective of these funds is
to provide steady cash flow to investors. As such, the audience
for these funds consists of conservative investors and retirees.

Specialty Funds

Sector funds are targeted strategy funds aimed at specific

sectors of the economy, such as financial, technology, or health
care. Sector funds can be extremely volatile since the stocks in a
given sector tend to be highly correlated with each other.

International/Global Funds

An international fund, or foreign fund, invests only in assets

located outside an investor's home country. Global funds,
however, can invest anywhere around the world. Their
volatility often depends on the unique country's economy and
political risks. However, these funds can be part of a well-
balanced portfolio by increasing diversification, since the
returns in foreign countries may be uncorrelated with returns
at home.

Mutual Fund Fees

A mutual fund has annual operating fees or shareholder fees.
Annual fund operating fees are an annual percentage of the
funds under management, usually under 1%, known as
the expense ratio. A fund's expense ratio is the summation of
the advisory or management fee and its administrative costs.