Mutual Fund ppt

INVESTMENT inINVESTMENT in MUTUAL FUND MUTUAL FUND

Presented byPresented by::Ankit chhabraAnkit chhabra

MBA/08/48MBA/08/48

Where to invest ??Where to invest ??

We always think , We always think , where should we where should we invest our money in invest our money in financial market ....financial market ....

Concept of mutual fundConcept of mutual fund

A mutual fund is a professionally-managed A mutual fund is a professionally-managed firm of collective investments that pools firm of collective investments that pools money from many investors and invest it in money from many investors and invest it in stocks, bonds etc.stocks, bonds etc.

Mutual fund have a fund manager who Mutual fund have a fund manager who invests the money on behalf of the invests the money on behalf of the investors by buying/selling stocks, bonds investors by buying/selling stocks, bonds etc.etc.

Why investor prefer Mutual Why investor prefer Mutual fund ?fund ?They can buy their shares directly from market.They can buy their shares directly from market.

But this require spending time to find out the But this require spending time to find out the performance of the company whose share is performance of the company whose share is being purchased, understanding the future being purchased, understanding the future business prospects of the company, finding out business prospects of the company, finding out the track record of the promoters & the dividend, the track record of the promoters & the dividend, bonus issue, history of the company etc. It’s bonus issue, history of the company etc. It’s here to do research before investing.here to do research before investing.

However investor prefer the mutual fund route.However investor prefer the mutual fund route. Besides this, in this LOW RISK & HIGH Besides this, in this LOW RISK & HIGH

RETURN.RETURN.

Who manages investor’s money?Who manages investor’s money?

This is the role of asset management This is the role of asset management company (AMC), to manage investor’s company (AMC), to manage investor’s money.money.

AMC’s in return charges a fee for the AMC’s in return charges a fee for the services provided & this fee is borne by services provided & this fee is borne by the investor as it is deducted from the the investor as it is deducted from the money.money.

ORGANISATION OF MUTUAL ORGANISATION OF MUTUAL FUNDFUND

Working of mutual fundWorking of mutual fund Two methods-Two methods-

Lump sum or one time payment methodLump sum or one time payment method Systematic investment plan (SIP)Systematic investment plan (SIP)

SYSTEMATIC INVESTMENT SYSTEMATIC INVESTMENT PLANPLAN

Under this a fixed sum is Under this a fixed sum is invested each month on a invested each month on a fixed date of a month. fixed date of a month.

Payment is made through Payment is made through post dated cheques or post dated cheques or direct debit facilities.direct debit facilities.

The investor gets fewer The investor gets fewer units when the NAV is units when the NAV is high and more units when high and more units when the NAV is low.the NAV is low.

This is called as the This is called as the benefit of Rupee Cost benefit of Rupee Cost Averaging (RCA).Averaging (RCA).

Load structureLoad structure

Two types of loads are there in:Two types of loads are there in: Entry load Entry load Exit loadExit load

TYPES OF MUTUAL FUNDTYPES OF MUTUAL FUNDBY STRUCTUREBY STRUCTURE

Open–ended fundsOpen–ended funds Close-ended fundsClose-ended funds

BY INVESTMENT OBJECTIVEBY INVESTMENT OBJECTIVE Growth FundsGrowth Funds Income fundsIncome funds Balance FundsBalance Funds Money Market FundsMoney Market Funds Gilt FundsGilt Funds Index FundsIndex Funds

ON THE BASIS OF LOADON THE BASIS OF LOAD Load FundsLoad Funds No Load FundsNo Load Funds

OTHER SCHEMESOTHER SCHEMES Tax Saving schemesTax Saving schemes Industry Specific schemesIndustry Specific schemes Sector schemesSector schemes

Return ??

Risk factor ??

Return ??

Risk factor ??

Open-ended fundsOpen-ended funds

An open-end fund is one that is available An open-end fund is one that is available for subscription all through the year. for subscription all through the year.

These do not have a fixed maturity. These do not have a fixed maturity.

Investors can conveniently buy and sell Investors can conveniently buy and sell units at Net Asset Value (NAV) related units at Net Asset Value (NAV) related prices. prices.

Closed-ended schemesClosed-ended schemes

A closed-end fund has a stipulated A closed-end fund has a stipulated maturity period which generally ranging maturity period which generally ranging from 3 to 15 years.from 3 to 15 years.

The fund is open for subscription only The fund is open for subscription only during a specified period. during a specified period.

RISK Vs. RETURN

ADVANTAGES OF MUTUAL ADVANTAGES OF MUTUAL FUNDFUND

Portfolio diversificationPortfolio diversification Professional ManagementProfessional Management LiquidityLiquidity AffordabilityAffordability VarietyVariety Tax BenefitsTax Benefits Convenient & flexibilityConvenient & flexibility

DISADVANTAGES OF MUTUAL FUNDDISADVANTAGES OF MUTUAL FUND

No Tailor-made-Portfolios No Tailor-made-Portfolios No control over costsNo control over costs Managing a Portfolio of FundsManaging a Portfolio of Funds

Major Mutual Fund Companies Major Mutual Fund Companies in Indiain India

There are around 33 AMC’s in india…….