Mutual funds by Sonam Bansal

Mutual Funds

Presented By- Sonam Bansal

10803861

Objective• To study about the benefits

available from mutual funds investments.

• To study the types of schemes available.

• To study about the regulations of mutual funds.

What is a Mutual Fund?

• A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal.

• Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual Funds.

• These investors buy units of a particular Mutual Fund scheme that has a defined investment objective and strategy.

• The money collected is invested by the fund manager in different types of securities. These could range from shares to debentures to money market instruments, depending upon the scheme’s stated objectives. • The income earned through

these investments and the capital appreciation realized by the scheme are shared by its unit holders in proportion to the number of units owned by them.

What Mutual Funds are not?

• MFs are not “get rich quick investments”.

• MFs are not “risk free investments”.

• MFs are not “assured return investment”.

• MFs are not “ a universal solution to all investment needs.”

Working of a Mutual Fund

Types of Mutual Funds

Risk-Return of different schemes

OBJECTIVES OF MUTUAL FUNDS

• Diversification.

• Growth.

• Income.

• International exposure.

Advantages of Mutual Fund

Disadvantages of Mutual Fund

• No Guarantees-  The value of your mutual fund investment, unlike a bank deposit, could fall and be worth less than the principle initially invested.

• The Diversification "Penalty“- Diversification can help to reduce your risk of loss from holding a single security, but it limits your potential for a "home run" if a single security increases dramatically in value. Remember, too, that diversification does not protect you from an overall decline in the market.

• Costs-  If the fund is purchased in a taxable account, taxes may have to be paid on capital gains.  Keep track of the cost basis of your initial purchase and new shares that are acquired by reinvesting distributions.  It's important to compare the costs of funds you are considering.  Always look at "net" returns when comparing fund performances.  Net return is the bottom line; an investment's true return after all costs are deducted.

10 REASONS TO INVEST IN MUTUAL FUNDS

• Expert on your side:   When you invest in a mutual fund, you buy into the experience and skills of a fund manager and an army of professional analysts

• Limited risk: Mutual funds are diversification in action and hence do not rely on the performance of a single entity.

• More for less: For the price of one blue chip stock for instance, you could get yourself a number of units across a number of companies and industries when you invest in a fund!

• Investor protection: A mutual fund in India is registered with SEBI, which also monitors the operations of the fund to protect your interests.

• Quick access to your money: It's good to know that should you need your money at short notice, you can usually get it in four working days.

• Transparency: As an investor, you get updates on the value of your units, information on specific investments made by the mutual fund and the fund manager's strategy and outlook.

• Convenience: You can invest directly with a fund house, or through your bank or financial adviser, or even over the internet.

• Easy investing: You can invest in a mutual fund with as little as Rs. 5,000. Salaried individuals also have the option of investing in a monthly savings plan.

• Low transaction costs: A mutual fund, by sheer scale of its investments is able to carry out cost-effective brokerage transactions.

• Tax benefits: Over the years, tax policies on mutual funds have been favorable to investors and continue to be so.

Top Mutual Fund Companies in India

• HDFC Bank.• HSBC.• ING Vysya.• Kotak

Mahindra.• LIC.• Morgan

Stanley.• SBI.• ICICI

Prudential.

• TATA.• UTI.• Reliance.• ABN-AMRO.• Baroda

pioneer mutual fund.

• Deutsche.

CONCLUSION

• The Mutual Fund industry is a growing industry.

• Mutual Funds covers a spectrum of investment options.

• We can invest directly or through a professional money manager.

• Start investing early & systematically.