INVESTMENT in MUTUAL FUND

Presented by: ANISH YADAV

CONCEPT OF MUTUAL FUND

A mutual fund is a professionally-managed firm of collective investments that pools money from many investors and invest it in stocks, bonds etc.

Mutual fund have a fund manager who invests the money on behalf of the investors by buying/selling stocks, bonds etc.

OBJECTIVE OF THE STUDY

To understand the concept and structure of Mutual Funds references of the investor To understand different forms of funds and their risk profile To find out the most preferred channel of investment in mutual funds To know the awareness of mutual fund being as an investment. To know the satisfaction level of mutual fund. To know the most admired and attractive feature of mutual fund

RESEARCH METHODOLOGY
The present study is based on secondary sources. Secondary Sources Information has also been obtained through desk research such as
(a) (b)

(c)
(d)

Annual reports of the financial institution Indian Bank Association Bulletin RBI Bulletin Report on trends and progress of financial institution in India

INTRODUCTION
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.

The income earned through these investments and the capital

appreciation realized is 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.

Reason of investor prefer Mutual fund .

They can buy their shares directly from market. But this require spending time to find out the performance of the company whose share is being purchased, understanding the future business prospects of the company, finding out the track record of the promoters & the dividend, bonus issue,

history of the company etc. Its here to do research before investing.

However investor prefer the mutual fund route.

Besides this, in this LOW RISK & HIGH RETURN.

Who manages investors money?

This is the role of asset management company (AMC), to manage investors money. AMCs in return charges a fee for the services provided & this fee is borne by the investor as it is deducted from the money.

Schemes according to Investment Objective:

Growth / Equity Oriented Scheme Income / Debt Oriented Scheme Balanced Fund Money Market or Liquid Fund Gilt Fund

Index Funds
Sector specific funds/schemes Tax Saving Schemes

ORGANISATION OF MUTUAL FUND

WORKING OF MUTUAL FUND

Two methods

Lump sum or one time payment method

Systematic investment plan (SIP)

TYPES OF MUTUAL FUND

BY STRUCTURE Openended funds Close-ended funds BY INVESTMENT OBJECTIVE Growth Funds Income funds Balance Funds Money Market Funds Gilt Funds Index Funds Return ?? Risk factor ??

ON THE BASIS OF LOAD Load Funds No Load Funds OTHER SCHEMES Tax Saving schemes Industry Specific schemes Sector schemes

OPEN-ENDED FUNDS

An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices. CLOSE-ENDED FUNDS

A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund is open for subscription only during a specified period.

ADVANTAGES AND DISADVANTAGE OF MUTUAL FUND

ADVANTAGE Portfolio diversification Professional Management Liquidity Affordability Variety Tax Benefits Convenient & flexibility DISADANTAGE No Tailor-made-Portfolios No control over costs Managing a Portfolio of Funds

Major Mutual Fund Companies in India

There are around 33 AMCs in india.

FINDINGS

People like to invest in mutual funds because they are managed by professional funds manager Mutual funds are one of the best financial instruments because they diversify risk and invest in larger number of asset They are simple and liquid assets and majority attracts small investors Mutual funds are although regulated by government but are not insured against losses. so investor should read the offer document carefully. Mutual funds in comparison to equity real estate debenture are much safe as they provide high return an volatility is moderate

RECOMMENDATIONS

The most vital problem spotted is of ignorance. Investors should be made aware of the benefits. Nobody will invest until and unless he is fully convinced. Investors should be made to realize that ignorance is no longer bliss and what they are losing by not investing. Mutual Fund Company needs to give the training of the Individual Financial Advisors about the Fund/Scheme and its objective, because they are the main source to influence the investors. Before making any investment Financial Advisors should first enquire about the risk tolerance of the investors/customers, their need and time (how long they want to invest). By considering these three things they can take the customers into consideration