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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
MONEY TO
PASS
ON TO
INVESTORS

FUND
R MANAGER
E
T
U
R
N
S

INVEST
GENRATE 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 • Reliance Vision
opportunities • SBI Magnum contra
fund
• SBI Magnum global
• Franklin India flexi 94
cap
• Sundaram BNP
• HDFC equity fund Paribas
• HDFC Top 200 Leadership
• Prudential ICICI • Sundaram BNP
Dynamic fund 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
fund
• 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.
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 high-
yield or junk bonds
Money market
funds
• 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.
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 Return Safety Liquidity

Bank Deposit Low High High

Equity High Low High or Low


Instruments
Debentures Moderate Moderate Low

Fixed Deposits Moderate Low Low


by Companies
Life Insurance Moderate High Low
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.
 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

Some Important
Schemes
• Growth schemes
• Income schemes
• Balanced schemes
• Money Market Schemes
• Tax Saving Schemes
Criteria To Evaluate
Schemes
• P/E ratio
• Turnover ratio
• Expense ratio
• Standard deviation
 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.
Thank You!

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