This document discusses mutual funds in India. It provides an introduction to mutual funds, explaining that they pool money from investors and hire fund managers to invest in securities. It then discusses the regulation of mutual funds in India by SEBI and the different types of mutual funds. The document concludes with checklists and tips for selecting, tracking, and evaluating mutual fund performance over time.

1. THE STUDY OF MUTUAL FUNDS
IN INDIA
Presented to: Presented by:
Prof. Prachi Anand Abhinandan Jain Bm-014006
Aman Chawla Bm-014024
Amir Ali Bm-014025
Amit Yadav Bm-014027
Anupam Shiva Bm-014044
Rights reserved

2. INTRODUCTION
• Mutual fund is a investment fund that pools money from many investors to
purchase securities.
• Pool of money provided by individual investors, companies, and other
organisation.
• A fund manager is hired to invest the cash the investors have contributed.
• The goal of manager depends upon the type of fund, for e.g fixed income
fund manager would strive to provide highest yield at lower risk.

3. REGULATION
• Governed by SEBI (Mutual funds) Regulation, 1996
All mutual funds registered with it, constituted as trust(under indian trusts act,1882)
• Bank operated MF's supervised by RBI too.
• SEBI- very detailed guidelines for disclosures in offer document, offer period,
investment guideline, etc
• NAV to be declared everyday for open-ended and every week for close ended
• Disclose on website, newspapers.
•

4. TYPES OF MUTUAL FUNDS
• By structure
• Open- ended- anytime enter/exit
1. close-ended- listed on exchange, redemption after period of scheme is over.
• By investment objective
• Equity- only in stocks-long term(3 years)
1. Debt- only in fixed income securities
2. Liquid / money market- short term money market
3. Balanced/hybrid- stocks+ fixed income securities
1. Other schemes
2. Tax saving scheme such as ELSS.
3. Special scheme (ETF, foreign funds)

5. HOW TO SELECT FUND THAT IS RIGHT FOR YOU
• Invest in only blue chip companies or in start-up businesses or in specific sectors.
• Must consider fund ranking which are released by Morning star or Standard & poor,
especially if fund manager has recently changed
• Past sucess is no indication of future.
• If you don't have brokerage account then visit companies website offering mutual fund
investment, most funds have minimum initial inveatment of Rs.500/.
• Mutual funds are constantly monitored by fund manager and he can devate more time in
analysing financial statements or calculating financial ratios than an individual
investor.

6. INVESTING CHECKLIST
• Draw up your asset allocation
1. Financial goal & time frame(Are you investing for retirement?, for children's
education?,or for current income?)
2. Risk taking capacity
• Identify funds that fall in your buy list
• Obtain and read the offer documents.
• Match your objectives
1. In terms of eqity share , downside risk protection, tax benefit offered, dividend
payout policy.
• Check your past performance.
• performance of various funds with similar objectives for atlest 3-5 years(managed
well&provide consistent results)

7. CHECKLIST CONTD..
• Think hard about investing in sector funds
1. For reletively agrresive investors.
2. Close touch with developments in sector, review portfolio regularly
3.
• Look for loads costs
1. management fees, annual expenses of fund and sales loads.
• Does the fund change fund manager often?
• Look for size and credentials
1. Asset size less than Rs. 25 crore
• Invest regularly, choose the S-I-P
• Mutuall fund - an integral part of your savings and wealth building plans.

8. TRACKING MUTUAL FUNDS
• Filling up an apllication form and writing out a cheque = end of story...NO!
• Periodically evaluate performance of your funds
1. Fact sheets and newsletters
2. website such as www.valueresearchonline.com, www.mutualfundsindia.com,
3. www.morningstar.in, www.lipperweb.com
• Newspapers
•
• Professional advisor

9. WARNING SIGNALS
• Fund's management changes.
• Performance slips compared to similar funds.
• Fund's expense ratio climb.
• Beta , a technical measurfe of risk, also climbs.
• Independent rating services reduce their ratings of the fund.
• It emerges into another fund.
• Change in management style or a change in the objective of the fund.

10. MUTUAL FUND COMPARISON
• Absolute returns
• - % difference of NAV
- Diversified equity with sector funds- NO
• Benchmark returns
• - SEBI directs
- Funds returns comparedto its benchmark
• Time period
• - Equal to time for whichyou plan to invest
- Equity - compare for 5 years, debt for 6 months.
• Market conditions
• - proved its mettle in bear market

11. What mutual funds are not?
• MFs are not 'get rich quick investments'
• MF's are not ' risk free investment'
• MF's are not ' assured return investments'
• MF's are not ' a universal solution to all investment needs'