mutual funds by suman jangir
DESCRIPTION
TRANSCRIPT
MUTUAL FUNDS INDUSTRYMUTUAL FUNDS INDUSTRY
ININ
INDIAINDIA
Suman Jangir
Definition
• The pooled money that is invested in Assets.
‘‘OR ‘OR ‘
• 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.
HISTORY OF MUTUAL FUNDS
1964 - UTI
1987 – Public Sector Banks, Insurance Companies {SBI, Canbank, PNB LIC, GIC
1993 – Private Sector Kothari Pioneer (Later merged with Franklin Templeton), J P Morgan, Morgan Stanley, George Soros and Capital International
Concept of Mutual fundsConcept of Mutual funds
• A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal
• The money thus collected is then invested in capital market instruments such as shares, debentures and other securities.
» 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.
» 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.
Concept of Mutual fundsConcept of Mutual funds
ObjectivesObjectives
Money market Mutual Funds
Stock Mutual Funds
Bond Funds
Asset Allocation Funds
Types of fundsTypes of funds
Open- Ended FundsClose- Ended FundsUnit Investment Trust (UTI)Exchange Traded Fund (ETF) Real Estate Investment Trust (REIT)
Instant DiversificationLevel the playing field between professional and individual investorsShare administrative expensesLiquidityMinimal transaction costsConvenience
advantagesadvantages
Lower than Market Performance
Costs
disadvantagesdisadvantages
Services offered by mutual fundsServices offered by mutual funds
Automatic investments and withdrawal plansAutomatic re-investment of interest, dividends and capital gainsWiring and funds express optionsPhone or internet switchingCheck writingBook keeping and help with taxes
Buying A mutual fundBuying A mutual fund
STEP 1 – Determine risk preferences
STEP 2 – Determine asset allocation
STEP 3 – Identify family of funds that meet your objective
STEP 4 – Evaluate the funds