mutual fund in India introduction performance and overview structure challenges face by MF in india

1. Presented To:
Dr. Vaneeta
Presented By:
Jitender Dhalia
Class - M. Com-I
Roll no.-1019
Government Bikram College Of Commerce, Patiala

2. Mutual fund in India
• Introduction​
• Structure​
• Classification
• Benefits
• performance
• challenges face​
• case studies​
• conclusion​

3. Mutual fund
A mutual fund is a common pool of money into which investors
place their contributions that are to be invested in different
types of securities in accordance with the stated objective.
Mutual Fund is
a collectiveinvestmentvehicle.​It
is an indirectway of investingin
capital markets.​​
Mutual Fund is a pool of money collected from
a large no. of investors(min.20)​. Each such
pool of money is calleda mutual fund scheme.​​

4. CONCEPTOF
MUTUALFUND
How do mutual fund work?

5. SECURITIES AND EXCHANGE BOARD OF INDIA
• Its primary role is to protect the interests of investors in securities
and to promote the development and regulation of the securities
market.
• SEBI was set up by the SEBI Act,1992 and is supervised by
Ministry of Finance
• Ex= Securites- stocks,bonds, debentures, derivatives, Stock
exchanges , Collective Investment Schemes- mutual fund , Insider
trading, Takeovers and mergers , Investor protection etc.
Mutual fund
AMFI[association of
mutual funds in India]
SEBI

6. Structure of mutual funds

7. Sponsor:- Promotor of the company, Establishment the fund, Registered
with SEBI[securities and exchange board of India], Net worth must be
positive in immediately preceding five years and must be provided
financial services, 40% of net worth of AMC company should have
contributed by sponsor.
Trustee:- hold assets on behalf of the unit holders in the trust,
appoint AMC and ensure in accordance with the SEBI regulations,
appoint the custodian of the fund.
AMC[asset management company]:- floats schemes and
manages them in accordance with the SEBI regulations
Custodian:- holds the funds securities in safekeeping, collect interests
and dividends paid on securities, record information on stocks split and
other corporate actions.

8. Types/schemes/classification of mutual funds

9. ➢ Open ended funds:-
➢ No fixed maturity date/period,
➢ accept continuoussale and re-purchase requests,
➢ transaction are NAV[net asset value]-based,
➢ highly liquidity.
➢Closed ended funds:-
➢Run for a specific period, e.g. 3 month to 15 yrs.
➢issue units of mutual fund only in the beginning and cannot redeem them, but redeem
through stockexchange only, transaction are NAV and market trending price,
➢mostly liquidity.
➢Interval funds:-
➢Both traits of open and closed ended funds, initial period is followed open ended funds
and after remaining is followed closed ended funds.

10. Income funds
Growth funds
Balanced funds

11. Index funds
Managed funds

12. Various mutualfunds in India
• State Bank of India mutual fund
• ICICI prudential mutual fund
• TATA mutual Fund
• HDFC mutual fund
• Aditiya Birla sun life mutual fund
• Reliance mutual fund
• Kotak Mahindra mutual fund
• Nippon India mutual fund etc..

13. Advantages and disadvantages of mutual funds
Collectivesavings schemes
Professional management
Portfolio diversification
Reductionof transactioncosts
Liquidity
Transparency
Well regulated
Digitalsystem[app, websites]
Convenience
Stabilityto stock market
Tax benefits
No control over costs
No tailor made/customizedportfolios
Delay in redemption
Poor management
Market risk
No trust

14. Overview And Performance
• Indian Mutual Fund Industry’s Average Assets Under Management (AAUM)
stood at ₹ 52.89 Lakh Crore
• In terms of MF penetration ,India has just 2.5% to 3% of its total population
invested in mutual funds.
• The total number of accounts as on January 31, 2024 stood at 16.96 crore,
wherein the maximum investment is from retail segment stood at about
13.57 crore.[4 cr (2.80%)invested in MF]
• 70%(five state – Maharashtra, Karnataka, Gujarat, W Bengal, N Delhi)

15. Challenges Faced by Mutual Funds in India
Market Volatility
Funds may face challenges
due to instabilitiesin financial
markets and fluctuatingasset
prices.
Regulatory Changes
Frequent amendmentsin
regulationscan impact the
operations and strategies of
mutual funds.
Investor Sentiment
Changes in investor
confidence and behavior can
pose significant challenges for
mutual funds.

16. CASE STUDY: Investing in Mutual Funds
Sarah – The investor
• Background- corporate jobs
• Investment strategy- Mutual funds
• Example- equity mutual fund{long
term investment}
• Net Return % = 20 - 5%[inflation]=15%
John – The conservative Saver
• Background- Common man
• Investment strategy-Fixed Deposit
• Example –saving strategy
• Net Return=8 - 5%[inflation]=3%
Education,start small, professional
guidance, long term perspective
2010 to 2020 Data on various Investment
Ex ( RS 100000 )

17. Investor Protection
Educating investors can safeguard
their interests and minimize
instances of mis-selling and fraud.
Informed Decision Making
Promoting financial literacy
encourages rational and strategic
investment choices among investors.
Investor Education and Awareness
Inflation
GDP
Globel Economy
Economic and Financial factor
Government Policy​
Rupee Value​
Interest Rate​

18. Factors to consider before
choosing a mutual fund house
• Performance History
• Asset Size
• Fund Management
• Expense Ratios
• Investment Style
• Market Reputation
• Investment options

19. CONCLUSION
If you are wondering ‘Is mutual fund safe?’, then the answer is that mutual fund
investments are generally considered safe for long-term investors.
Mutual funds in India face various challenges including regulatory changes,
market volatility, competition, performance pressures, operational risks,
liquidity concerns, mis-selling etc.
Despite these challenges, mutual funds continue to be a popular investment
option for individuals seeking diversification and professional management of
their investments in the Indian market. With continued efforts towards
investor education, transparency, and regulatory oversight, the mutual fund
industry in India has the potential for sustained growth and development.
RECOMMENDATIONS- Solutions to Challenges

20. References
sebi.gov.in
amfiindia.com
money control.com
m.economictimes.com
chat.openai.com

21. Thank you