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Mutual Funds By Suman Jangir


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Mutual Funds By Suman Jangir

  2. 2. Definition <ul><li>The pooled money that is invested in Assets. </li></ul><ul><li>‘ OR ‘ </li></ul><ul><li>Form of trust that pools the funds of a whole lot of investors to make more money by investing in an array of financial instruments. </li></ul>
  3. 3. HISTORY OF MUTUAL FUNDS <ul><li>1964 - UTI </li></ul><ul><li>1987 – Public Sector Banks, Insurance Companies </li></ul><ul><li>{SBI, Canbank, PNB LIC, GIC </li></ul><ul><li>1993 – Private Sector </li></ul><ul><li>Kothari Pioneer (Later merged with Franklin </li></ul><ul><li>Templeton), J P Morgan, Morgan Stanley, </li></ul><ul><li>George Soros and Capital International </li></ul>
  4. 4. Concept of Mutual funds <ul><li>A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal </li></ul><ul><li>The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. </li></ul><ul><ul><ul><ul><ul><li>The income earned through these investments and the capital appreciation realized are shared by its unit holders in proportion to the number of units owned by them. </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in diversified professionally managed basket of securities at a relatively low cost. </li></ul></ul></ul></ul></ul>
  5. 5. Concept of Mutual funds
  6. 6. Objectives <ul><li>Money market Mutual Funds </li></ul><ul><li>Stock Mutual Funds </li></ul><ul><li>Bond Funds </li></ul><ul><li>Asset Allocation Funds </li></ul>
  7. 7. Types of funds <ul><li>Open- Ended Funds </li></ul><ul><li>Close- Ended Funds </li></ul><ul><li>Unit Investment Trust (UTI) </li></ul><ul><li>Exchange Traded Fund (ETF) </li></ul><ul><li>Real Estate Investment Trust (REIT) </li></ul>
  8. 8. <ul><li>Instant Diversification </li></ul><ul><li>Level the playing field between professional and individual investors </li></ul><ul><li>Share administrative expenses </li></ul><ul><li>Liquidity </li></ul><ul><li>Minimal transaction costs </li></ul><ul><li>Convenience </li></ul>advantages
  9. 9. <ul><li>Lower than Market Performance </li></ul><ul><li>Costs </li></ul>disadvantages
  10. 10. Services offered by mutual funds <ul><li>Automatic investments and withdrawal plans </li></ul><ul><li>Automatic re-investment of interest, dividends and capital gains </li></ul><ul><li>Wiring and funds express options </li></ul><ul><li>Phone or internet switching </li></ul><ul><li>Check writing </li></ul><ul><li>Book keeping and help with taxes </li></ul>
  11. 11. Buying A mutual fund <ul><li>STEP 1 – Determine risk preferences </li></ul><ul><li>STEP 2 – Determine asset allocation </li></ul><ul><li>STEP 3 – Identify family of funds that meet your objective </li></ul><ul><li>STEP 4 – Evaluate the funds </li></ul>