MUTUAL FUNDS

Presented by-

Preeti Mathur
MBA(FT) Sec-A
Roll No. 06619103909
 DEFINITIONS

 A professionally managed type of collective

investment scheme that pools money from
many investors & invests it in stocks.

 A financial intermediatory that allows a group

of investors to pool their money together with
a predetermined investment objective.
HOW MUTUAL FUNDS
WORK
 REGULATORY
AUTHORITY
Security Exchange Board of India (SEBI) is the
regulatory body of all the mutual funds. The
responsibilities of SEBI are:
• To protect the interest of the investors.
• Handle grievances.
• Formulates policies & regulates the mutual funds.
 RIGHTS AVAILABLE TO A
MUTUAL FUND HOLDER
 Receiving Unit certificates.
 Receiving information about investment.
 Receiving dividend.
 Complete disclosure of relevant information.
 Wind up the scheme.
 Grievance handling.
 BENEFITS OF MUTUAL
FUNDS
 Small investments.
 Professional fund management.
 Spreading risks.
 Transparency.
 Choice
 Regulation
 Liquidity
FUND OFFER DOCUMENT

It is a document offering all the information

one could possibly need about a particular
scheme. This way, an investor is well aware
of the risks involved. According to SEBI, the
stipulated guidelines of a fund offer document
are as follows-
 Cont..
 Investment objectives.
 Risk factors & special considerations.
 Summary of Expenses.
 Constitution of funds.
 Guidelines on how to invest.
 Organization & capital structure.
 Tax provisions related to transactions.
 Financial information.
 TYPES OF MUTUAL FUNDS
 On the basis of structure:
i. Open-Ended Schemes
ii. Close-Ended Schemes
iii. Internal Schemes
 On the basis of Nature:
i. Equity Fund
ii. Debt Fund
iii. Balanced Fund
 TYPES OF RETURNS

 From dividends on stocks & interest.

 Selling securities that have increased price.

 Reinvest profitable shares.

 VALUATION OF UNITS

Net Asset Value (NAV) per unit is basically arrived

at, by calculating the total market value of
investments of assets of the mutual fund by the
following formula-
Total market value of assets or securities
NAV= in portfolio of the fund – Liabilities
Number of fund units outstanding
 DISADVANTAGES OF
MUTUAL FUNDS
 Professional Management- Some funds are not
dynamic enough to explore all the available
opportunities.
 Costs- Which are charged on the form of entry
and exit load
 Dilution- High returns on a few investment does
not make a difference on the overall returns
 Taxes- When making decisions about money fund
managers do not consider personal tax situations.
 CONCLUSION

Mutual funds are professionally managed

investment tools which provide security to
the investors. Moreover, the ‘trust’, which is a
custodian body that consists of expertise,
ensures systematic and professional fund
management.
 Cont…

By investing in a mutual fund, an investor is

secure as his investment is in secure hands.
Also, the investor has the option of diversifying
his risks. Thus, mutual funds are a safe option
to investors who prefer secure management of
their finances.
THANK
YOU