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In 1964 Unit Trust of India (UTI ) introduced mutual funds in India . OBJECTIVES : 1. To collect the savings of small investors 2. To give opportunity to the small investors to participate in the Indian capital market. 3. To facilitate continuous flow of capital for the economic development of the nation.
DEFENITION
The SEBI Regulation Act 1993 defines mutual funds as a fund established in the form of trust by a sponsor, to raise money through the sale of units, to the public and one or more schemes for investing in securities in accordance with their regulation . So,
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management companies They collect the savings by way of selling units to the public. The collected savings are invested in different securities. For the selection of securities and investment the trust or AMC usually maintains a well established portfolio team. This portfolio team continuously carryout the security analysis and give advice to the AMC.
2. Once the subscription reaches to the predetermined level the entry into the fund is closed. 3. After the expiry of the fixed period the entire corpus is disinvested and distributed to the unit holders.
CHARACTERISTIC FEATURES
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The period and amount of fund is prefixed. If the maturity and the target amount is reached the entry into the fund is closed. The units are traded in the stock exchange. The main of this fund is to get capital appreciation. The entire corpus is available during the entire life of the scheme. At the maturity the full amount is redistributed. The units in the closed end fund is quoted in the stock exchange.
2. And the target amount is also not prefixed. 3. One can enter into the fund at anytime and he can withdraw from the fund at anytime. 4. Here, the investors are free to buy and sell any number of units at anytime.
CHARACTERISTIC FEATURES
1. There is a complete flexibility with regard to one s investment. 2. There is a free entry and exit of investors. 3. The units are not publically traded. 4. It gives high liquidity to the investors. 5. The main objective of this fund is the generation of general income.
INCOME FUND
1. The object of this fund is to generate and distribute regular income and to the members. 2. It gives too much importance for the generation of income
FEATURES
1. The investors are assured regular income. 2. They are not aiming at capital appreciation. 3. The pattern of investment is in a stable yielding securities eg: debentures 4. This is best suitable for old age and retired persons.
GROWTH FUND
This fund concentrate mainly on long run game. 2. The aim is not to earn regular income in the short period but capital appreciation in the long period.
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FEATURES
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It mainly aim at capital appreciation There is no frequent distribution of dividend to the unit holders. This is best suitable for salaried people and for those who can capable of taking risk.
BALANCED FUND
1. This Fund is otherwise known as Income fund and growth fund. 2. This is the fund which serves the purpose of both income and growth fund. 3. From this fund the investors will get benefit of regular income for the entire period and capital appreciation at the maturity time 4. Therefore this fund will suitable for the regular income earners as well as for those who are having capability to take risk
SPECILISED FUND
1. This is a fund which is floated with an intention to serve for a special purpose. 2. A specilised fund may be area speiclised or industries specilised. Eg:- If a fund is introduced with an intention to develop a particular industry then it is called industries specilised fund.