INVESTMENT in MUTUAL FUND

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 ?

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.

ORGANISATION OF MUTUAL FUND

Working of mutual fund

Two

methods-

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).

Load structure
Two

types of loads are there in:

Entry load Exit load

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. do not have a fixed maturity.

These

Investors

can conveniently buy and sell units at Net Asset Value (NAV) related prices.

Closed-ended schemes
A

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

The

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 AMCs in india.