Mutual fund or ULIP


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Mutual fund or ULIP

  1. 1. Mutual Fund or ULIP:Which is better of Investment<br />Prepared By: Patel Navneet M (44)<br />Guided By: Assi. Prof. Mayur Parmar<br />
  2. 2. Introduction<br />Doing investment is the best option for any liquidity than keep it useless in storage.<br />Rational people like to invest such liquidity at such place from where they can get maximum return form it as well as got assurance of maximum safety.<br />There are many options to invest liquidities (especially Cash) from where return could be easily available, like FDs, Mutual Funds, ULIPs, properties etc...<br />
  3. 3. Meaning<br />Mutual Fund<br />A mutual fund is nothing more than a collection of stocks and/or bonds. You can think of a mutual fund as a company that brings together a group of people and invests their money in stocks, bonds, and other securities. Each investor owns shares, which represent a portion of the holdings of the fund.<br />ULIP<br />ULIP is an abbreviation for Unit Linked Insurance Policy. A ULIP is a life insurance policy which provides a combination of risk cover and investment. The dynamics of the capital market have a direct bearing on the performance of the ULIPs.<br />
  4. 4. Task/Body<br />Mutual Fund<br />Wecan make money from mutual fund in three ways:<br /> Income is earned from dividends on stocks and interest on bonds. A fund pays out nearly all of the income it receives over the year to fund owners in the form of a distribution.<br />If the fund sells securities that have increased in price; the fund has a capital gain. Most funds also pass on these gains to investors in a distribution.<br />If fund holdings increase in price but are not sold by the fund manager, the fund's shares increase in price. You can then sell your mutual fund shares for a profit. Funds will also usually give you a choice either to receive a check for distributions or to reinvest the earnings and get more shares.<br />
  5. 5. Task/Body<br />ULIP<br />Most insurers offer a wide range of funds to suit one’s investment objectives, risk profile and time horizons.<br />Different funds have different risk profiles. The potential for returns also varies from fund to fund.<br />Investment returns from ULIP may not be guaranteed.<br />“In unit linked products/policies, the investment risk in investment portfolio is borne by the policy holder”.<br />Depending upon the performance of the unit linked fund(s) chosen; the policy holder may achieve gains or losses on his/her investments.<br />It should also be noted that the past returns of a fund are not necessarily indicative of the future performance of the fund.<br />
  6. 6. Differences<br />Mode of investment/ investment amounts<br />Expenses<br />Portfolio disclosure<br />Flexibility in altering the asset allocation<br />Tax benefits<br />
  7. 7. Conclusion<br />If we wish to take an aggressive exposure to equity market, It’s good to buy Mutual Fund. ULIP won’t be able to give us similar returns.<br />If we think, we are not disciplined enough to make regular investments and need a whip to make us invest, we should invest in ULIP.<br />If we want to take a low exposure to equity market and still get tax free returns, we should invest in ULIP but make sure that fund we are invested is conservative fund.<br />
  8. 8. Thank You...!<br />
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