Mutual funds are pools of money managed by professional fund managers that invest in stocks, bonds, and other securities. Investors share a common investment objective and the profits and losses from the investments. There are different types of mutual funds like direct funds, which have no commissions or third party involvement, and regular funds, which are bought through brokers and have commissions. Investors should consider the expense ratio, investment objectives, and risks of the different funds when selecting funds to invest in.

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“
“The most popular investing products
are the worst ones for investors.”
- Robert Rolih
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Introduction to
Mutual Funds
- L a t i k a J o s h i
- H a r s h i t S r i v a s t a v a
- R a s h m i R a wa t
- K h u s b o o C h a u h a n
- U t k a r s h C h a u h a n

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What is Mutual Funds?
A mutual fund is a pool of money
managed by a professional Fund
Manager. It is a trust that collects money
from a number of investors who share a
common investment objective and invests
the same in equities, bonds, money market
instruments and/or other securities.
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What are different types of
Mutual Funds?
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INVESTMENT MODE IN MUTUAL FUNDS
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DIRECT MUTUAL FUND REGULAR MUTUAL FUND
• • Directly offered by fund house.
• • No involvement of third party agents –
brokers or distributors.
• • No commissions and brokerage.
• • Have low Expense ratio (because of no
commissions).
• • Have high NAV.
• • Return is higher due to a lower expense ratio
• • Bought through an intermediary.
• • Intermediaries can be brokers, advisors or
distributors.
• • Commissions and brokerage paid.
• • High Expense ratio as there are commissions
to pay.
• • Low NAV.
• • Return is lower due to a higher expense ratio

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How does Mutual Funds work ?
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• Pool of investors money.
• Invested according to pre-specified investment objectives.
• Benefits accrue to those that contribute to this pool.
• There is thus mutuality in the contribution and the benefit.
• Hence the name ‘Mutual’ fund.

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STEPS TO INVEST IN MUTUAL FUNDS
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 Decide between active and passive funds
 Determine expense ratios and other costs
 Consider the difference between stock and bond based mutual
funds.
 Find minimum investment requirements
 Open a brokerage account
 Keep an eye on your mutual fund performance until you buy it.

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Different providers of Mutual
Funds:
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Risk Factor in Mutual Funds:
Mutual funds are subject to market risk.
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Factors to consider when selecting Mutual
Fund:
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RISK-O-METER AND ITS IMPORTANCE
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• Six levels of risk for mutual fund schemes:
• i. Low Risk
• ii. Low to Moderate Risk
• iii. Moderate Risk
• iv. Moderately High Risk
• v. High Risk and
• vi. Very High Risk

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ICICI PRUDENTIAL MUTUAL FUNDS
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