A Project report on Mutual Funds

Mutual Funds
Sneha Parab

Result:According to business men, 72% people were aware of mutual fund, according to government employees, 40% people know what is a mutual fund;80% youngsters know, what is mutual fund. now, we talk about private employees, maximum people know, what is mutual fund, it is 60%.

Introduction
• Mutual Fund is a pool of money, collected from investors, and is invested according to certain investment objective.

• Mutual Fund is the pooling of Money from the retail investors to the corporate investor’s for Sustainable growth of the investments. •

Operational flow chart of Mutual funds

POOL THEIR PASS ON TO INVESTORS MONEY TO

R E T U R N S

FUND MANAGER

GENRATE

INVEST IN

SECURITIES & STOCK MARKET

Features of mutual fund
• Belongs to the investors • Managed by investment professionals • Portfolio • investor’s share in the funds is denominated by “units”

Result: As shown in the above chart 60% business men want  to invest money into the mutual fund because they have interest in mutual fund, maximum customers want to invest their money into the mutual fund because their interest decreased in equity market they know that in this field, risk is low as compared to share market. 40% government employees want to invest their money into the mutual fund, 56% youngsters and 40% private employees want to invest their money into the mutual fund.

Result:  From the above graph, mostly customers want to invest their money into the gold, they purchase gold, according to customers, price of gold always increase and this is always profitable in future. Youngsters and business men have interest in mutual fund; they like to take risk because they know that, if risk is high then return may be high. 28% business men,16% government employees, 40% youngsters, 20% private employees like to invest money into the mutual fund

Result: As reliance is the brand name in India, the company has good reputation in the market, almost everyone heard about the reliance and their companies. Brand management is also required to increase the product perceived value to the customer. That’s the reason behind 37% of the people choosing reliance.
 

Frequently used terms
• • • • • • Net asset value(NAV) Sale price Repurchase price Redemption price Sales load Repurchase load

Top 10 Mutual funds you must own
• DSPML opportunities fund • Franklin India flexi cap • HDFC equity fund • HDFC Top 200 • Prudential ICICI Dynamic fund • Reliance Vision • SBI Magnum contra • SBI Magnum global 94 • Sundaram BNP Paribas Leadership • Sundaram BNP Paribas Select Midcap

Advantages and Disadvantages of Mutual Funds Sushant Gawali -

Advantages of Mutual Funds
• Portfolio diversification: It enables him to hold a diversified investment portfolio • Professional management: The investment management ensure a much better return as compared to what an investor can manage on his own. • Reduction/Diversification of Risks:

The potential losses are shared with other investors.
• Wide Choice to suit risk-return profile: Investors can chose the fund based on their risk tolerance and expected returns •

Cont…
• Liquidity:  Investors may be unable to sell shares directly, easily and quickly • Convenience and Flexibility:  Investors can easily transfer their holdings from one scheme to other, get updated market information • Transparency:  Fund gives regular information to its investors on the value of the investments

Disadvantages of Mutual Funds
• No control over costs: The investor pays investment management fees as long as he remains with the fund • No tailor-made portfolios: The very high net-worth individuals or large corporate investors may find this to be a constraint

Cont…
• Managing a portfolio of funds:  Availability of a large number of funds can actually mean too much choice for the investor

• Delay in redemption :  It takes 3-6 days for redemption of the units and the money to flow back into the investor’s account. •

Different Types of Funds
Bhagyashree Powale

Open-end
• Open-ended means that, at the end of every day, the fund issues new shares to investors and buys back shares from investors wishing to leave the fund. • Open-Ended fund scheme is open for subscription all through year. An investor can buy or sell the units at "NAV" (Net Asset Value) related price at any time.

fund

Close Ended Funds
• A Close-Ended fund is open for subscription only during a specified period, generally at the time of initial public issue.

• The Close-Ended fund scheme is listed on the some stock exchanges where an investor can buy or sell the units of this type of scheme.

Exchange-traded funds
• ETFs combine characteristics of both mutual funds and closed-end funds.

• ETFs are index funds and track stock market indexes. Shares are issued or redeemed by institutional investors in large blocks (typically of 50,000).

• Exchange-traded funds are also valuable for foreign investors

Equity funds
• Equity funds, which consist mainly of stock investments, are the most common type of mutual fund.

• Risk is higher than debt funds but offer very high growth potential for the capital.

• Equity funds must have a long-term objective.

Bond funds
• Bond funds account for 18% of mutual fund assets. Types of bond funds include term funds, which have a fixed set of time (short-, medium-, or long-term) before they mature.

• High-yield bond funds invest in corporate bonds, including highyield or junk bonds

• Money market funds entail the least risk, as well as lower rates of return. • Invest in securities of short term nature i.e. less than one year maturity. • Invest in Treasury bills issued by government, Certificates of deposit issued by banks, Commercial Paper issued companies and inter-bank call money. • Aim to provide easy liquidity, preservation of capital and moderate income.

Money market funds

Debt Funds
• These Funds invest a major portion of their corpus in debt papers. Government authorities, private companies, banks and financial institutions are some of the major issuers of debt papers. • Target low risk and stable income for the investor. • Have higher price fluctuation as compared to money market funds due to interest rate fluctuation. • Carry both credit risk and interest rate risks.

Balance Funds
• Mix of both equity and debt funds.

• They invest in both equities and fixed income securities, which are in line with pre-defined investment objective of the scheme.

• Objective is to gain income, moderate capital appreciation and preservation of capital

Comparison Between various fund -Aman Jinwal

Mutual Funds Vs. Other Investments
Product Bank Deposit Equity Instruments Debentures Return Low High Moderate Safety High Low Moderate Low High Liquidity High High or Low Low Low Low

Fixed Deposits Moderate by Companies Life Insurance Moderate

Myths about Mutual Funds
1. Mutual Funds invest only in shares. 2. Mutual Funds are prone to very high risks/actively traded. 3. Mutual Funds are very new in the financial market. 4. Mutual Funds are not reliable and people rarely invest in them. 5. The good thing about Mutual Funds is that you don’t have to pay attention to them.

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MUTUAL FUND SCHEMES - Nikhat Shaikh

MUTUAL FUND SCHEMES
• Wide variety of mutual funds exist to cater to the needs such as financial position, risk tolerance and return expectation.

Types of schemes
§ By Structure  - Open Ended Schemes  - Close Ended Schemes  - Interval Schemes § By Investment Objectives  - Growth Schemes  - Income Schemes  - Balance Schemes  - Money Market schemes § Other Schemes  - Tax Saving Schemes § Special Schemes  - Index Schemes  -Sector Specific Schemes

• • • • •

Growth schemes Income schemes Balanced schemes Money Market Schemes Tax Saving Schemes

Some Important Schemes

Criteria To Evaluate Schemes
• • • • P/E ratio Turnover ratio Expense ratio Standard deviation

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Conclusion Vivek Mishra -

Mutual Fund Returns
q Three sources of return: Ø Income distribution  Bond, interest, stock, dividend Ø Capital gain distribution  Realized gains/losses from selling assets Ø Changes in NAV i.e. Net Asset Value  From unrealized gains/losses from assets.

TEN REASONS FOR INVESTING IN MUTUAL FUNDS
• MUTUAL FUNDS OFFER DIVERSIFICATION. • MF ARE PROFESSIONAL MANAGED. • MUTUAL FUNDS COME IN MANY VARIETIES • MUTUAL FUNDS HAVE LOW MINIMUMS • SYSTEMATIC INVESTING AND WITHDRAWALS

Cont…
• MUTUAL FUNDS OFFER AUTOMATIC REINVESTMENT • MUTUAL FUND OFFER TRANSPARENCY • MUTUAL FUNDS HAVE AUDITED TRACK RECORDS • SAFETY OF INVESTING IN MUTUAL FUNDS. • MUTUAL FUNDS ARE LIQUID IN NATURE •

• BRIEF RECAP. • • TIPS FOR FUTURE INVESTORS.

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