Importance of Mutual Funds

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Submitted by: Mukesh kumar Singh

What is Mutual Fund?


Mutual fund is an investment company that pools money from individuals and organizations to invest in variety of securities, such stocks, bonds, and other assets.
I n v e s t o r s Invest their money Invest in variety of securities P/L from Individual

P/L from portfolio of investment

Mutual fund schemes

Market (Fluctu ates)

Importance of Mutual Funds


Affordability
Diversificati on

Regulations

Legal Protection

Liquidity

Tax Benefits Professional Mgmt

Variety

Mutual funds vs. Other Investment

Mutual Fund vs. Insurance


Mutual Fund Returns are higher Fund management is active Insurance Lower returns, but risk too is low Ideal for long term investors Offer switching between asset classes without any load No Tax liability Security is a big trigger for investing

Lower distribution fees


Tax liabilities in some schemes No Tax liability Offers a range of products in debt and equity

Bank Fixed Deposits & Mutual Fund


Bank Returns Admn. Expenses Risks Investment Options Network Liquidity Quality of Assets Interest Calculations Guarantor Account Low High Low Less High Penetration At a cost Not transparent Quarterly, i.e, 3rd , 6th , 9th, 12th Is Needed Needed Mutual Fund Better Low Moderate More Low but Improving Better Transparent Every Month Not Needed Not Needed

Stocks vs Mutual Funds


A matter of time

Investing Skills Diversification


SIP Investment

SEBI Regulations
Mutual fund shall be established in the form of trusts under the Indian Trust Act and managed by separately formed Asset Management Company. A minimum of ` 10 crores must have AMC as net worth An AMC can function for only one mutual fund and it is prohibited to work for another.

The maximum period for subscription is 45 days in case of close- end schemes,
but no such limitation in case of open end scheme. The entire subscription has to be returned to the investors when the minimum amount or 60% of the target amount is not raised. There should be a separate and responsible fund manager for each scheme. A minimum of 90% of the profits must distribute to the unit holders in any given year. SEBI has power to impose penalty on mutual funds for violation of SEBI guidelines.

Conclusion
Mutual funds have become a major vehicle for mobilization of saving particularly from the small and household sectors for investment in the stock market. Mutual funds have responded to this challenge by providing innovative new products and building trust with the investors. Mutual fund industry is expected to play its desired role to harness

savings for economic development, inculcate equity culture,


strengthening the capital market.

CASE STUDY
Ease of Communication and Product Launch (Reliance Mutual fund)
Reliance Mutual Fund(RMF): RMF is one the fastest growing mutual funds, presence in 179 cities across country. It constantly trying to provide innovation products and services to customers. Event Details: Launch for Invest Easy & Business Easy Reliance Mutual Fund has introduced Invest Easy; a web based secure login facility That enables both individual and non-individual advisors and investors to transact

in Reliance Mutual Fund schemes.


various entities. The Invest Easy system will personalize and configure the facility accordingly

Invest Easy simplifies transaction for entities such as private and public limited companies, partnership firms, trusts, societies. The platform is configured to accept complex authorization requirements of

Challenge: Greater Reach with Tighter Budgets The RMF wanted to share knowledge about companys new product launch with Company Executives, Brokers and Sub-Brokers across the India to reach higher numbers of audience under shorter timelines and tighter budgets, they were looking for reliable, customizable and cost-effective solution. They also were looking to reduce cost and time of event by at least 50%.

Solutions:

Webcasting- reach target audiences around the world online


Partnership with a company that could provide us with a reliable technology solution- Epitome Solutions

Epitomes Webcasting solutions:


ES Webcast offers valuable, efficient solutions over traditional face-to-face meetings and Include full studio services, global and domestic video and audio feeds, simultaneous translation, Live question and answer, Archiving for Executives, Brokers and Sub-Brokers for later view. Depending on the Companys need, ES Webcast can offer small or large scale solutions for reaching global and domestic audiences without the need for attendee travel and transportation expenses.

Results: Reduce Costs, Increase ROI: Cost savings: Between Rs. 15,000- Rs. 20,000 Enhanced reach to target audience In addition, by using archived recordings of the event, clients receive the added Value of enduring information being available to customers.

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