PRESENTED BY : SACHIN JAIN

GUIDED BY: PROF. VIVEK BHATIA

An old Axiom :
It is not wise to put all eggs into one basket .......was probably in the minds of those who formed the first mutual fund.

An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.

The formation of Unit Trust of India marked the evolution of the Indian mutual fund industry in the year 1963. The history of mutual fund industry in India can be better understood divided into following phases:
Phase 1. Establishment and Growth of Unit Trust of India - 1964-87 Phase II. Entry of Public Sector Funds - 19871993 Phase III. Emergence of Private Secor Funds 1993-96 Phase IV. Growth and SEBI Regulation - 19962004 Phase V. Growth and Consolidation - 2004 Onwards

UTI was set up by the Reserve Bank of India . UTI launched its first scheme in 1964, named as Unit Scheme 1964. UTI launched more innovative schemes in 1970s and 80s to suit the needs of different investors.

Number of public sector players enters the market in the year 1987. In November 1987, SBI Mutual Fund from the State Bank of India became the first non-UTI mutual fund in India.

Foreign fund management companies enter the Mutual fund industry in 1993 through joint ventures. By 1994-95, about 11 private sector funds had launched their schemes.

The mutual fund industry witnessed robust growth and stricter regulation from the SEBI after the year 1996 . SEBI (Mutual Funds) Regulations, 1996 was introduced by SEBI that set uniform standards for all mutual funds in India. Various Investor Awareness Programmes were, both by SEBI and AMFI, with an objective to educate investors and make them informed about the mutual fund industry.

Industry witnessed several mergers and acquisitions. Examples:Alliance Mutual Fund by Birla Sun Life, Sun F&C Mutual Fund and PNB Mutual Fund by Principal Mutual Fund. Continuing phase of growth of the industry through consolidation and entry of new international and private sector players.

Mutual Funds defined.a flow cycle

BY STRUCTURE

CLOSE ENDED FUNDS OPEN ENDED FUNDS INTERVAL SCHEMES EQUITY MUTUAL FUNDS DEBT MUTUAL FUNDS BALANCED FUNDS GROWTH SCHEMES INDEX SCHEMES INCOME SCHEMES

BY NATURE BY INVESTMENT OBJECTIVE

Small investments: With mutual fund investments, your money can be spread in small bits across varied companies. This way you reap the benefits of a diversified portfolio with small investments. Professionally managed: The pool of money collected by a mutual fund is managed by professionals who possess considerable expertise, resources and experience. Spreading risk: A mutual fund usually spreads the money in companies across a wide spectrum of industries. This not only diversifies the risk, but also helps take advantage of the position it holds. Transparency and interactivity: Mutual funds clearly present their investment strategy to their investors and regularly provide them with information on the value of their investments.

Liquidity: Closed ended funds can be bought and sold at their market value as they have their units listed at the stock exchange.

Choice: A wide variety of schemes allow investors to pick up those which suit their risk / return profile.

Regulations: All the mutual funds are registered with SEBI.

They function within the provisions of strict regulation

created to protect the interests of the investor

No control over costs: The investor pays investment management fees as long as he remains with the fund, even while the value of his investments are declining. He also pays for funds distribution charges which he would not incur in direct investments.

No tailor-made portfolios: The very high net-worth individuals or large corporate investors may find this to be a constraint as they will not be able to build their own portfolio of shares, bonds and other securities.

Managing a portfolio of funds: Availability of a large number of funds can actually mean too much choice for the investor. So, he may again need advice on how to select a fund to achieve his objectives.

Delay in redemption: It takes 3-6 days for redemption of the units and the money to flow back into the investors account.

LUMP SUM:

SIP(SYSTEMETIC INVETMENT PLAN):