INVESTMENT in MUTUAL FUND Presented by: Ankit chhabra MBA/08/48
Where to invest ??We always think ,where should weinvest our money infinancial market ....
Concept of mutual fundA mutual fund is a professionally-managedfirm of collective investments that poolsmoney from many investors and invest it instocks, bonds etc.Mutual fund have a fund manager whoinvests the money on behalf of the investorsby buying/selling stocks, bonds etc.
Why investor prefer Mutual fund directly from market. They can buy their shares ? But this require spending time to find out the performance of the company whose share is being purchased, understanding the future business prospects of the company, finding out the track record of the promoters & the dividend, bonus issue, history of the company etc. It’s here to do research before investing. However investor prefer the mutual fund route. Besides this, in this LOW RISK & HIGH RETURN.
Who manages investor’s money? This is the role of asset management company (AMC), to manage investor’s money. AMC’s in return charges a fee for the services provided & this fee is borne by the investor as it is deducted from the money.
ORGANISATION OF MUTUAL FUND
Working of mutual fund Two methods- Lump sum or one time payment method Systematic investment plan (SIP)
SYSTEMATIC INVESTMENT PLAN Under this a fixed sum is invested each month on a fixed date of a month. Payment is made through post dated cheques or direct debit facilities. The investor gets fewer units when the NAV is high and more units when the NAV is low. This is called as the benefit of Rupee Cost Averaging (RCA).
Load structure Two types of loads are there in: Entry load Exit load
TYPES OF MUTUAL FUND BY STRUCTURE Open–ended funds Close-ended funds Return ?? Return ?? BY INVESTMENT OBJECTIVE Risk factor ?? Growth Funds Risk factor ?? Income funds Balance Funds Money Market Funds Gilt Funds Index Funds ON THE BASIS OF LOAD Load Funds No Load Funds OTHER SCHEMES Tax Saving schemes Industry Specific schemes Sector schemes
Open-ended funds An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices.
Closed-ended schemes A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund is open for subscription only during a specified period.
ADVANTAGES OF MUTUAL FUND Portfolio diversificationProfessional ManagementLiquidityAffordabilityVarietyTax BenefitsConvenient & flexibility
DISADVANTAGES OF MUTUAL FUNDNo Tailor-made-PortfoliosNo control over costsManaging a Portfolio of Funds
Major Mutual Fund Companies in India There are around 33 AMC’s in india…….