Presentation On

MUTUAL FUND

Presented by: Yogesh Kumar

M.B.A.Sem.IIIrd
{2016-18}
Roll no.-160600296
 FOLLOWING ARE THE CONTENTS
OF MY PRESENTATION

• Meaning of Mutual Fund

• History of Mutual Fund
• Flow chart of Mutual Fund
• Types of Mutual Funds
• Advantages of Mutual Fund
• Disadvantages / Risk’s of Mutual Fund
• Name of the companies who
launched various Mutual Funds
 WHAT IS MUTUAL FUND?
• A Mutual Fund is a trust that pools together 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 is 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 a diversified, professionally
managed basket of securities at a relatively low cost.
 History of the Indian Mutual
Fund Industry

The mutual fund industry in India started

in 1963 with the formation of Unit Trust
of India, at the initiative of the
Government of India and Reserve Bank.

The history of mutual funds in India can

be broadly divided into four distinct
phases:
 First Phase – 1964-87
Unit Trust of India (UTI) was established
on 1963 by an Act of Parliament. It was
set up by the Reserve Bank of India and
functioned under the Regulatory and
administrative control of the Reserve
Bank of India.
The first scheme launched by UTI was
Unit Scheme 1964. At the end of 1988
UTI had Rs.6,700 crores of assets under
management.
Second Phase – 1987-1993 (Entry of
Public Sector Funds)

1987 marked the entry of non- UTI, public

sector mutual funds set up by public sector
banks and Life Insurance Corporation of India
(LIC) and General Insurance Corporation of
India (GIC).

SBI Mutual Fund was the first non- UTI

Mutual Fund established in June 1987.
Third Phase – 1993-2003 (Entry
of Private Sector Funds)

With the entry of private sector funds in 1993,

a new era started in the Indian mutual fund
industry, giving the Indian investors a wider
choice of fund families.

In 1993 was the year in which the first

Mutual Fund Regulations came into being,
under which all mutual funds, except UTI
were to be registered and governed.
 Fourth Phase – since
February 2003
In February 2003, following the repeal of the Unit
Trust of India Act 1963 UTI was divided into two
separate entities.
One is the Specified Undertaking of the Unit Trust of
India with assets under management of Rs.29,835
crores as at the end of January 2003.

The second is the UTI Mutual Fund Ltd, sponsored

by SBI, PNB, BOB and LIC. It is registered with
SEBI and functions under the Mutual Fund
Regulations.
GROWTH IN ASSETS UNDER
MANAGEMENT
The flow chart below describes the working
of a mutual fund:
 TYPES OF MUTUAL FUNDs

Mutual
Funds

By Maturity By Investment
Period Objective

Open Close Equity Balance Gilt

fund fund
ended ended

Income Money Index

market fund
 Schemes according to Maturity Period
A mutual fund scheme can be classified into open-ended
scheme or close-ended scheme depending on its
maturity period.
Open-ended Fund
An open-ended Mutual fund is one that is available for
subscription and repurchase on a continuous basis. These
Funds do not have a fixed maturity period.

close-ended Fund
A close-ended Mutual fund has a stipulated maturity
period e.g. 5-7 years. The fund is open for subscription
only during a specified period at the time of launch of
the scheme.
 Fund according to Investment
Objective
A scheme can also be classified as growth fund, income
fund, or balanced fund considering its investment
objective.
Growth / Equity
Oriented Scheme
The aim of growth funds is to provide capital
appreciation over the medium to long- term.
Such funds have comparatively high risks.

These schemes provide different options to the

investors like dividend option, capital appreciation,
etc.
 Income / Debt
Oriented Scheme

The aim of income funds is to provide regular

and steady income to investors.

Such schemes generally invest in fixed

income securities such as bonds, corporate
debentures, Government securities and
money market instruments.
Such funds are less risky compared to
equity schemes
 Balanced Fund

The aim of balanced funds is to provide both

growth and regular income as such schemes
invest both in equities and fixed income
securities in the proportion indicated in their
offer documents.

These are appropriate for investors looking for

moderate growth.
 Money Market

These funds are also income funds and their

aim is to provide easy liquidity, preservation of
capital and moderate income.
These schemes invest exclusively in safer
short-term instruments such as treasury bills,
commercial paper and government securities,
etc.
These funds are appropriate for corporate and
individual investors as a means to park their
surplus funds for short periods.
 Gilt Funds
These funds invest exclusively in government
securities.
Government securities have no default
risk.

Index Funds
This schemes invest in the securities in the
same weightage comprising of an index.

This schemes would rise or fall in

accordance with the rise or fall in the index
 ADVANTAGES OF MUTUAL
FUNDS
• Affordability
A mutual fund invests in a portfolio of assets, i.e. bonds, shares,
etc. depending upon the investment objective of the scheme. An
investor can buy in to a portfolio of equities, which would
otherwise be extremely expensive. Each unit holder thus gets an
exposure to such portfolios with an investment as modest as
Rs.5000/-.
• Diversification
We must spread our investment across different securities
(stocks, bonds, money market instruments, real estate, fixed
deposits etc.) and different sectors (auto, textile, information
technology etc.).
• Variety
Mutual funds offer a tremendous variety of schemes.
• Professional Management
Qualified investment professionals who seek to maximize
returns and minimize risk monitor investor's money.
 ADVANTAGES OF MUTUAL
FUNDS
•Transparency
Being under a regulatory framework, mutual funds have to disclose their
holdings, investment pattern and all the information that can be considered
as material, before all investors. SEBI acts as a watchdog and safeguards
investors’ interests

• Liquidity

A distinct advantage of a mutual fund over other investments is that there is

always a market for its unit/ shares. It's easy to get one’s money out of a
mutual fund. Redemptions can be made by filling a form attached with the
account statement of an investor.
 DISADVANTAGES / RISK’S OF
MUTUAL FUNDS
 Professional Management- Some funds don’t
perform in the market, as their management is not dynamic
enough to explore the available opportunity in the market.
 Costs – The biggest source of AMC income is generally from
the entry & exit load which they charge from investors, at the
time of purchase. The mutual fund industries are thus charging
extra cost under layers of jargon.
 Dilution - Because funds have small holdings across different
companies, high returns from a few investments often don't make
much difference on the overall return.
 Taxes - when making decisions about your money, fund
managers don't consider your personal tax situation. For
example, when a fund manager sells a security, a capital-gain tax
is triggered, which affects how profitable the individual is from
the sale.
Various Mutual Funds in India

 State Bank of India mutual fund

 ICICI prudential mutual fund
 TATA mutual fund
 HDFC mutual fund
 Birla sun life mutual fund
 Reliance mutual fund
 Kotak Mahindra mutual fund etc..
 Summary
The Mutual Fund Industry is a growth
industry.

Mutual Funds cover a spectrum of Investment

Options

Start Investing Early & Systematically

We invest directly or through a Professional

Money Manager
 REFRENCE

• moneycontrol.com
• wikipedia.co.in
• sbimutualfund.com
Thank you