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MUTUAL FUNDS                            Present By,                           Ankit Sharma                          Archan...
CONTENTS        Meaning Of Mutual Fund        History Of Mutual Fund        Flow Chart Of Mutual Fund        Types Of Mutu...
WHAT IS THE MUTUAL FUND ?        A Mutual Fund is a trust that pools the savings of a number of        investors who share...
MYTHS OF MUTUAL FUND        Mutual fund investment only in share        Mutual funds are prone to very high risk / activel...
WHY MUTUAL FUNDS5   Natioal institute of fashion technology ,Bangalore
HISTORY OF INDIAN MUTUAL FUNDS    INDUSTRY        The mutual fund industry in India started in 1963 with the        format...
FIRST PHASE 1964-87        Unit Trust of India (UTI) was established on 1963 by an Act        of Parliament. At the end of...
SECOND PHASE-1987-1993 (ENTRY OF    PUBLIC SECTOR FUNDS)        Marked the entry of Non-UTI, public sector mutual funds se...
THIRD PHASE1993-2003(ENTRY OF    PRIVATE SECTOR FUNDS)        1993 was the year in which the first Mutual Fund        Regu...
FOURTH PHASE – SINCE FEBRUARY     2003         In February 2003, following the repeal of the Unit Trust of         India A...
THE MAJOR PLAYERS IN THE INDIAN     MUTUAL FUND INDUSTRY ARE11   Natioal institute of fashion technology ,Bangalore
THE FLOW CHART BELOW DESCRIBE     THE WORKING OF A MUTUAL FUND12   Natioal institute of fashion technology ,Bangalore
TYPES OF MUTUAL FUND                            MUTUAL FUND     BY MATURITY               BY INVESTMENT OBJECTIVE        P...
Types of Mutual Funds Schemes on the     Basis of Structure         i) Open - Ended Schemes         Open - ended schemes i...
Types of mutual fund schemes on the     basis of investment objective         i) Growth Schemes         In the growth sche...
Other Mutual Funds Schemes         i) Money Market Schemes         It is open ended mutual funds whose amount will be only...
Continued …         iii) Special Schemes         This is the mutual funds which have something special         and mutual ...
MUTUAL FUND VS INDIVIDUAL STOCK                                          INDIVIDUALMUTUAL FUND                            ...
HOW TO INVEST IN MUTUAL FUNDS                                              Step-1 :IdentifyThe Investment Need            ...
ORGANIZATION OF MUTUAL FUND IN INDIA20   Natioal institute of fashion technology ,Bangalore
REGULATIONS OF MUTUAL FUNDS                                     Governed by SEBI (Mutual Fund) Regulation 1996            ...
REASONS TO INVEST IN MUTUAL FUND         Expert on your side:         When you invest in a mutual fund, you buy into the  ...
Continued         Convenience: You can invest directly with a fund house, or         through your bank or financial advise...
Continued..         Transparency: As an investor, you get updates on the value         of your units, information on speci...
ADVANTAGES OF MUTUAL FUNDS         Professional management         Minimization of risk         Return of potential       ...
DIS ADVANTAGES OF MUTUAL FUNDS     Costs Control Not in the Hands of an Investor     No Customized Portfolios     Difficul...
VARIOUS MUTUAL FUNDS IN INDIA27   Natioal institute of fashion technology ,Bangalore
28   Natioal institute of fashion technology ,Bangalore
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Mutual funds by Murali Bantu

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  1. 1. MUTUAL FUNDS Present By, Ankit Sharma Archana Ladwa Bantu Murali1 Natioal institute of fashion technology ,Bangalore
  2. 2. CONTENTS Meaning Of Mutual Fund History Of Mutual Fund Flow Chart Of Mutual Fund Types Of Mutual Funds Organization of mutual fund Regulations Of Mutual Fund Reasons To Invest In Mutual Fund Advantage Of Mutual Fund Disadvantage Of Mutual Fund Various Mutual Funds In India2 Natioal institute of fashion technology ,Bangalore
  3. 3. WHAT IS THE MUTUAL FUND ? A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal The money thus collected is then invested in capital market instruments such as shares, debentures and other securities Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual Funds It gives the market returns not assured returns3 Natioal institute of fashion technology ,Bangalore
  4. 4. MYTHS OF MUTUAL FUND Mutual fund investment only in share Mutual funds are prone to very high risk / actively traded Mutual funds are very new in the financial market Mutual funds are not reliable and people rarely invest in them The good thing about mutual funds is that don’t need to pay attention to them4 Natioal institute of fashion technology ,Bangalore
  5. 5. WHY MUTUAL FUNDS5 Natioal institute of fashion technology ,Bangalore
  6. 6. HISTORY OF INDIAN MUTUAL FUNDS INDUSTRY The mutual fund industry in India started in 1963 with the formation of unit trust of India at the initiative of the government of India and reserve bank The History of Indian mutual fund history can be divided into four phases6 Natioal institute of fashion technology ,Bangalore
  7. 7. FIRST PHASE 1964-87 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. At the end of 1988 UTI had Rs.6,700 Crores of assets under management.7 Natioal institute of fashion technology ,Bangalore
  8. 8. SECOND PHASE-1987-1993 (ENTRY OF PUBLIC SECTOR FUNDS) Marked the entry of Non-UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first Non-UTI Mutual Fund established in June 1987. At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 crores8 Natioal institute of fashion technology ,Bangalore
  9. 9. THIRD PHASE1993-2003(ENTRY OF PRIVATE SECTOR FUNDS) 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 Crores9 Natioal institute of fashion technology ,Bangalore
  10. 10. FOURTH PHASE – SINCE FEBRUARY 2003 In February 2003, following the repeal of the Unit Trust of India Act 1963. UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the SEBI Mutual Fund Regulations10 Natioal institute of fashion technology ,Bangalore
  11. 11. THE MAJOR PLAYERS IN THE INDIAN MUTUAL FUND INDUSTRY ARE11 Natioal institute of fashion technology ,Bangalore
  12. 12. THE FLOW CHART BELOW DESCRIBE THE WORKING OF A MUTUAL FUND12 Natioal institute of fashion technology ,Bangalore
  13. 13. TYPES OF MUTUAL FUND MUTUAL FUND BY MATURITY BY INVESTMENT OBJECTIVE PERIOD OPEN GROWTH BALANCE GILT MONEY INDEX ENDED FUND FUND FUND MARKET FUND CLOSED ENDED13 Natioal institute of fashion technology ,Bangalore
  14. 14. Types of Mutual Funds Schemes on the Basis of Structure i) Open - Ended Schemes Open - ended schemes is that structure of mutual fund which allow investors to buy the shares of MF at its unlimited level and time and sell it when they want in market. ii) Close - Ended Schemes Close - ended schemes issue the Mutual Funds under many restrictions like to offer to limited investors or limit of time of issue etc. iii) Interval Schemes This is a mutual fund scheme whose redemption features is between those of closed-end and open-end funds.14 Natioal institute of fashion technology ,Bangalore
  15. 15. Types of mutual fund schemes on the basis of investment objective i) Growth Schemes In the growth scheme, all profits made by the fund are ploughed back into the scheme. This causes the Net Asset Value to rise over time. The NAV is the price of a unit of a mutual fund. ii ) Income or Dividend Schemes The dividend option does not re-invest the profits made by the fund through its investments. Instead, it is given to the investor from time to time. iii) Balanced Schemes The aim of Balanced schemes is to provide both growth and regular income. Such schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. They generally invest 40-60% in equity and the rest in debt instruments.15 Natioal institute of fashion technology ,Bangalore
  16. 16. Other Mutual Funds Schemes i) Money Market Schemes It is open ended mutual funds whose amount will be only invested in money market. These funds invest in short term (one day to one year) debt obligations such as Treasury bills, certificates of deposit, and commercial paper. The main goal is the preservation of principal, accompanied by modest dividends. ii) Tax Saving Schemes Tax saving schemes of mutual funds which saves the tax of investors. Tax benefits to be mentioned under the "objects of the offering" column. Any exclusive tax advantages for the mutual fund company and its shareholders by mentioning the section number of the Income Tax Act 1961 without revealing the content of the section.16 Natioal institute of fashion technology ,Bangalore
  17. 17. Continued … iii) Special Schemes This is the mutual funds which have something special and mutual funds provider will mention this in invitation form. iv) Index Schemes Index schemes attempt to replicate the performance of a particular index such as the BSE.17 Natioal institute of fashion technology ,Bangalore
  18. 18. MUTUAL FUND VS INDIVIDUAL STOCK INDIVIDUALMUTUAL FUND STOCK A MUTUAL FUND, ON THE OTHER HAND, IS A GROUP OR AN INDIVIDUAL STOCK IS A SHARE OF A “BASKET” OF STOCKS. THESE COMPANY THAT’S USUALLY BOUGHT ARE MANAGED FOR YOU BY AN THROUGH A BROKERAGE. : INDIVIDUAL OR FIRM CALLED A FUND MANAGER OTHER INVESTORS HAVE A STAKE WHEN YOU’RE INTO STOCKS, YOUR INVESTMENT IN THE BASKET OF STOCKS, SO PORTFOLIO BECOMES YOUR RESPONSIBILITY THE RISK IS THINNED DOWN— BUT SO ARE THE BENEFITS YOU DECIDE WHETHER TO BUY OR SELL, WHAT TO INVEST IN, AND HOW DIVERSE YOU SHOULD MAKE YOUR INVESTMENTS18 Natioal institute of fashion technology ,Bangalore
  19. 19. HOW TO INVEST IN MUTUAL FUNDS Step-1 :IdentifyThe Investment Need What Are My Investment Objectives Need ? How Much Risk Am Willing To Take ? Step -2: ChooseThe Right Mutual Fund The Track Record Of Performance Over The Last Few Relations to The Appropriate Benchmark And Similar Funds In The Same Category How Well The Mutual Fund Is Organized To Provide Efficient ,Prompt And Personalized Service Step-3:select The Ideal Mix Of Schemes Investing In Just 1 Scheme may Not Meet All Your Investment Needs You May Consider Investing In A Combination Of Schemes To AchieveYour Specific Goals19 Natioal institute of fashion technology ,Bangalore
  20. 20. ORGANIZATION OF MUTUAL FUND IN INDIA20 Natioal institute of fashion technology ,Bangalore
  21. 21. REGULATIONS OF MUTUAL FUNDS Governed by SEBI (Mutual Fund) Regulation 1996 All MFs registered with it, constituted as trusts ( under Indian Trusts Act, 1882) Bank operated MFs supervised by RBI too AMC registered as Companies registered under Companies Act, 1956 SEBI- Very detailed guidelines for disclosures in offer document, offer period, investment guidelines etc. NAV to be declared everyday for open-ended, every week for closed ended Disclose on website, AMFI, newspapers Half-yearly results, annual reports Select Benchmark depending on scheme and compare21 Natioal institute of fashion technology ,Bangalore
  22. 22. REASONS TO INVEST IN MUTUAL FUND Expert on your side: When you invest in a mutual fund, you buy into the experience and skills of a fund manager and an army of professional analysts Limited risk: Mutual funds are diversification in action and hence do not rely on the performance of a single entity. More for less: For the price of one blue chip stock for instance, you could get yourself a number of units across a number of companies and industries when you invest in a fund!22 Natioal institute of fashion technology ,Bangalore
  23. 23. Continued Convenience: You can invest directly with a fund house, or through your bank or financial adviser, or even over the internet. Investor protection: A mutual fund in India is registered with SEBI, which also monitors the operations of the fund to protect your interests. Quick access to your money: Its good to know that should you need your money at short notice, you can usually get it in four working days.23 Natioal institute of fashion technology ,Bangalore
  24. 24. Continued.. Transparency: As an investor, you get updates on the value of your units, information on specific investments made by the mutual fund and the fund managers strategy and outlook. Low transaction costs: A mutual fund, by sheer scale of its investments is able to carry out cost-effective brokerage transactions. Tax benefits: Over the years, tax policies on mutual funds have been favorable to investors and continue to be so.24 Natioal institute of fashion technology ,Bangalore
  25. 25. ADVANTAGES OF MUTUAL FUNDS Professional management Minimization of risk Return of potential Low cost liquidity Choices of schemes Tax benefits25 Natioal institute of fashion technology ,Bangalore
  26. 26. DIS ADVANTAGES OF MUTUAL FUNDS Costs Control Not in the Hands of an Investor No Customized Portfolios Difficulty in Selecting a Suitable Fund Scheme26 Natioal institute of fashion technology ,Bangalore
  27. 27. VARIOUS MUTUAL FUNDS IN INDIA27 Natioal institute of fashion technology ,Bangalore
  28. 28. 28 Natioal institute of fashion technology ,Bangalore

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