INVESTMENT in

MUTUAL FUND
Presented by:
Ankit chhabra
MBA/08/48
 Where to invest ??

We always think ,
where should we
invest our money in
financial market ....
 Concept of mutual fund
A mutual fund is a professionally-managed
firm of collective investments that pools
money from many investors and invest it in
stocks, bonds etc.

Mutual fund have a fund manager who

invests the money on behalf of the investors
by buying/selling stocks, bonds etc.
 Why investor prefer Mutual
fund ?
They can buy their shares directly from market.

 But this require spending time to find out the

performance of the company whose share is
being purchased, understanding the future
business prospects of the company, finding out
the track record of the promoters & the dividend,
bonus issue, history of the company etc. It’s
here to do research before investing.
 However investor prefer the mutual fund route.
 Besides this, in this LOW RISK & HIGH
RETURN.
 Who manages investor’s money?
 This is the role of asset management
company (AMC), to manage investor’s
money.
 AMC’s in return charges a fee for the
services provided & this fee is borne by
the investor as it is deducted from the
money.
ORGANISATION OF MUTUAL
FUND
 Working of mutual fund
 Two methods-
 Lump sum or one time payment method
 Systematic investment plan (SIP)
SYSTEMATIC INVESTMENT
PLAN
 Under this a fixed sum is
invested each month on a
fixed date of a month.
 Payment is made through
post dated cheques or
direct debit facilities.
 The investor gets fewer
units when the NAV is
high and more units when
the NAV is low.
 This is called as the
benefit of Rupee Cost
Averaging (RCA).
 Load structure
 Two types of loads are there in:
 Entry load
 Exit load
TYPES OF MUTUAL FUND
BY STRUCTURE
 Open–ended funds
 Close-ended funds Return
Return??
??
BY INVESTMENT OBJECTIVE Risk
 Growth Funds Riskfactor
factor??
??
 Income funds
 Balance Funds
 Money Market Funds
 Gilt Funds
 Index Funds

ON THE BASIS OF LOAD

 Load Funds
 No Load Funds

OTHER SCHEMES
 Tax Saving schemes
 Industry Specific schemes
 Sector schemes
 Open-ended funds
 An open-end fund is one that is available
for subscription all through the year.

 These do not have a fixed maturity.

 Investors can conveniently buy and sell

units at Net Asset Value (NAV) related
prices.
 Closed-ended schemes
 A closed-end fund has a stipulated
maturity period which generally ranging
from 3 to 15 years.

 The fund is open for subscription only

during a specified period.
RISK Vs.
RETURN
 ADVANTAGES OF MUTUAL
FUND
 Portfolio diversification
Professional Management
Liquidity
Affordability
Variety
Tax Benefits
Convenient & flexibility
DISADVANTAGES OF MUTUAL FUND

No Tailor-made-Portfolios
No control over costs
Managing a Portfolio of Funds
Major Mutual Fund Companies
in India

There are around 33 AMC’s in india…….