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Mutual fund main

  1. 1. 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
  2. 2.  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.
  3. 3. Diversification  funds of many investors are pooled and used to purchase a variety of investmentsProfessional management  who is the fund’s manager?  managers can changeConvenience  phone  mail
  4. 4.  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)
  5. 5.  Dispense profits to investors Investors expect dividend income Investors expect price appreciation
  6. 6.  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
  7. 7.  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
  8. 8.  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.
  9. 9.  Funds for all reasons and seasons Professional Investment Management Risk reduction through diversification Convenience Liquidity of investment Lower transaction costs Regulatory Protection Relatively higher returnsTax benefitsTransperency
  10. 10.  Not a Risk Free investment avenue Difficulty in selecting a good fund manager Lack of awareness from the part of investor Improper guidance
  11. 11.  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
  12. 12.  Recordkeeping/reporting Easy purchase and sale Automatic reinvestment IRS-qualified tax-sheltered retirement Withdrawal plans Collateral for loans
  13. 13.  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
  14. 14. 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.