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Presented by: Ankit chhabra MBA/08/48
Where to invest ??
We always think , where should we invest our money in financial market ....
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.
Why investor prefer Mutual fund directly from market. ? They can buy their shares
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. It’s here to do research before investing. However investor prefer the mutual fund route. Besides this, in this LOW RISK & HIGH RETURN.
Who manages investor’s money?
This is the role of asset management
company (AMC), to manage investor’s money. AMC’s in return charges a fee for the services provided & this fee is borne by the investor as it is deducted from the money.
ORGANISATION OF MUTUAL FUND
Working of mutual fund
Lump sum or one time payment method Systematic investment plan (SIP)
SYSTEMATIC INVESTMENT PLAN
Under this a fixed sum is invested each month on a fixed date of a month. Payment is made through post dated cheques or direct debit facilities. The investor gets fewer units when the NAV is high and more units when the NAV is low. This is called as the benefit of Rupee Cost Averaging (RCA).
Two types of loads are there in:
Entry load Exit load
TYPES OF MUTUAL FUND
BY STRUCTURE Open–ended funds Close-ended funds BY INVESTMENT OBJECTIVE Growth Funds Income funds Balance Funds Money Market Funds Gilt Funds Index Funds ON THE BASIS OF LOAD Load Funds No Load Funds OTHER SCHEMES Tax Saving schemes Industry Specific schemes Sector schemes
Return ?? Return ?? Risk factor ?? Risk factor ??
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.
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.
RISK Vs. RETURN
ADVANTAGES OF MUTUAL FUND
Portfolio diversification Professional Management Liquidity Affordability Variety Tax Benefits Convenient & flexibility
DISADVANTAGES OF MUTUAL FUND
No Tailor-made-Portfolios No control over costs Managing a Portfolio of Funds
Major Mutual Fund Companies in India
There are around 33 AMC’s in india…….