Mutual fund(SMBA22)Name of the students Roll no.1. Darshit Narechania 272. Hiten Shah 653. Jay Dave 264. Sunil D’souza5. Cassilda Sarrao6. Jay Vaswani
A mutual fund is the trust that pools the savings of a number of investors who share a common financial goal. A mutual fund is just the connecting bridge or a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. The mutual fund will have a fund manager who is responsible for investing the gathered money into specific securities (stocks or bonds). It gives the market returns and not assured returns.
Diversification funds of many investors are pooled and used to purchase a variety of investmentsProfessional management who is the fund’s manager? managers can changeConvenience phone mail
New/more types of funds Few or no sales charges Some performed better than common stock Widespread marketing Selection is easier Homely service through intermediater(Advisor)
Kotak Mahindra Mutual Fund Unit Trust of India Mutual Fund Reliance Mutual Fund Standard Chartered Mutual Fund Franklin Templeton India Mutual Fund Morgan Stanley Mutual Fund India Canbank Mutual Fund LIC Mutual Fund HDFC Mutual Fund ICICI Mutual Fund
By Structure Open-Ended – anytime enter/exit Close-Ended Schemes – listed on exchange, redemption after period of scheme is over. By Investment Objective Equity (Growth) – only in Stocks – Long Term (3 years or more) Debt (Income) – only in Fixed Income Securities (3-10 months) Liquid/Money Market (including gilt) – Short-term Money Market (Govt.) Balanced/Hybrid – Stocks + Fixed Income Securities (1-3 years) Other Schemes Tax Saving Schemes Special Schemes ULIP
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! Easy investing: You can invest in a mutual fund with as little as Rs. 5,000. Salaried individuals also have the option of investing in a monthly savings plan. 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. 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 favourable to investors and continue to be so.
Funds for all reasons and seasons Professional Investment Management Risk reduction through diversification Convenience Liquidity of investment Lower transaction costs Regulatory Protection Relatively higher returnsTax benefitsTransperency
Not a Risk Free investment avenue Difficulty in selecting a good fund manager Lack of awareness from the part of investor Improper guidance
Returns include distributions of dividends, distributions of capital gains, or NAV appreciation Return for specific holding period Best for one year returns since does not use present value N um ber of N um ber of Ending Initial shares at end shares at beginning price priceH olding period of period of period return N um ber of shares Initial at beginning of period price
Recordkeeping/reporting Easy purchase and sale Automatic reinvestment IRS-qualified tax-sheltered retirement Withdrawal plans Collateral for loans
Fund performs poorly compared with similar funds Perception of economic trends indicates business cycle will smooth out soon Fund grows too rapidly or becomes too large Fund taken over by new manager Investment goals become more conservative Need cash The Promoter of Mutual Fund is going through financial difficulties
Mr “X” at present 39 years of age and would like to invest a sumof RS 10,000 in mutual funds through the SIP mode ofinvesting, aiming to build a corpus for his retirement. He intendretiring at my age of 58, and have also opened a PPF accountrecently where he would invest a sum of 70,000 annually.His monthly expenses are 20,000, and have no other liability. Healso insured for 40,00,000 under a term insurance plan.How should he invest monthly in various mutual fund schemesor investment instruments? Also please note that He is willing toincrease my monthly SIP amount if required.