Performance evaluation of mutual funds

A study of performance evavluation of MF

Analysis on Performance of mutual funds

Mutual fund is better investment plan

Tudy on performnace evaluation of equity shares and mutual funds

Why should you invest through Mutual Funds? Investors always look for good investment opportunity, which gives
good returns, but at the time people also want their investment to be safe and secure. Looking at present financial
distribution system and quality of advice available in the market, Pankaj Maalde strongly believes that Mutual Fund
Investment can help a lot to investors. PANKAAJ MAALDE Head - Financial Planning, Apnapaisa.com Expertise :
Mutual Funds ,Fixed Income ,Insurance ,Tax More about the Expert... 10 0Google +1 5 Indians save around 30% of
their income and are very good in saving ratio. Our saving ratio is one of the best across world, but when it comes to
investment, most of the people fail and make major mistakes which hit them at later part of life. Investors today are
confused and undecided about the investment decisions. Most of the investors invest without knowing the features of
the products and also the risk attached to that. Ours is agents driven market, agents recommends clients without
knowing their financial goals and future needs. They are more interested in closing the sale rather than advising and
educating clients. On the other hand, clients are not ready to pay the fees for the advice and have no time to put their
efforts to study and compare the products recommended. At the end, most of decisions are taken on the advice given
by agent or distributors of product. It is seen that in most cases agents pushes the product, which gives them higher
commissions. Where people invest: It is a tradition that almost around 85% people in India invest their surplus funds
in so called safe products like Bank Fixed Deposits, Postal Schemes and contractual insurance products. Looking at
inflation nos., 85% of investment done in traditional forms is unlikely to beat inflation post tax in the long run. There is
lack of investors education and awareness. The quality of advice, which is available in the market, is also poor. We
are shifting from miselling to wrong buying as 50% of agents have stopped canvassing mutual fund business
because of low commissions in mutual funds. The data shows that even there is decline in life insurance agents
force due to lower commissions in ULIP product. Mutual Fund is best option: Investors always look for good
investment opportunity, which gives good returns, but at the time people also want their investment to be safe and
secure. Looking at present financial distribution system and quality of advice available in the market, I strongly
believe that Mutual Fund Investment can help a lot to investors. Mutual Fund is a mechanism of pooling resources
from general public and investing collected funds in debt or equity instruments in accordance with the objectives as
disclosed in the offer document. Most of the people think that mutual fund means equity investment. This is not true.
Mutual Funds offer both 100% debt to 100% equity and also hybrid products with combination of equity and debt.
Mutual Funds also came out with Gold ETFs and Gold Funds, which are much better option compared to physical
gold. The past performance of the schemes is also available since inception of the fund. The past performance may
not sustain in future but it tells the quality of the funds performance in different cycles of the market, which can help
investors before taking any investment decision. Mutual Funds schemes are market related and does not offer any
guarantee of returns, which keeps away most of the investors from investing in mutual fund schemes. One has to
understand how this schemes works & performs over a period of time and what are risks attached to this. Even debt
schemes had given good returns at around 12% p.a. in last one year. Equity schemes always outperform the other
asset class in the longer run and beat inflation with a big margin. Advantages of investing in Mutual Fund schemes:
1) Mutual Fund Industry is well regulated and come under purview of SEBI. Mutual Fund Distributor has to
compulsory pass the exam for selling the products and is given best training by all the AMCs with whom he is
associated. 2) Mutual Fund schemes are easy to compare, as the object of the fund is well defined. One can easily

get the details of risk involved in the scheme by reading offer document or KIM (Key Information Memorandum).
3) You get the benefit of diversification when you invest through MF schemes. You get diversification across all
sectors and also among different stocks listed in the stock market. Diversification reduces the risk of investment and
gives better results in the longer run. 4) You can also diversify across three major asset classes as you can invest in
debt, equity and also in gold through mutual fund schemes. 5) You get the advantage of professional management.
Experts in the industry called fund managers manage fund and try their best to deliver good returns to investors.
6) The procedure to invest in mutual fund is also very simple and also schemes are highly liquid. 7) The service
available today is also one of the best in India and you can excess all your investment details online. 8) You can start
with very nominal amount of Rs. 5,000 or SIP with Rs. 500 and get the advantage of long-term equity investment.
9) SIP (systematic investment plan) option available in mutual fund schemes is always better for investing in equity in
the long run. You get rupee cost averaging, which lowers the average cost and you get the advantage of power of
compounding. 10) Debt products are also attractive if you understand the interest rate cycles. In the falling interest
rate scenario the debt fund is likely to give double-digit return. 11) A hybrid product available in the mutual fund like
MIP and Balanced Fund are also good for freshers who do not understand the equity market but can start with lower
exposure to equity. 12) Mutual Fund schemes are more transparent. Daily NAV is declared. Portfolio of the schemes
is also available every month. There are many agencies that rate the mutual fund schemes depending on risk and
reward attached to the schemes. 13) Mutual Fund Schemes are most tax efficient instruments available in India as
mutual fund investment in all asset class for a period of more than one year is considered as long term for the tax
purpose. Direct Plans: Now direct plans are also available in all categories in mutual fund schemes, which eliminate
the distributor and reduce the overall cost of around 0.45% to 0.65% p.a. This will automatically increase your return
over a period of time. It is always advisable to invest through mutual fund schemes depending on asset allocation
and time horizon. The only thing you must do is select the fund, which is at least three years old and a consistent
performer and is in the top quartile in the category. The other thing you must check is that scheme should beat its
bench-mark index and performance should not fall below its benchmark index. It is advisable to monitor and review
the performance of the scheme at least once in a quarter so that you can take corrective step if fund selected by you
starts none performing compared to its bench mark index. The advice of a financial planner can also add value to
your investment.

Why Should You Invest in Mutual Funds?

Feb 5, 2015, 11.03 AM IST

When
considering investment opportunities, the first challenge that almost every investor faces is
a plethora of options. From stocks, bonds, shares, money market securities, to the right
combination of two or more of these, however, every option presents its own set of
challenges and benefits.
So why should investors considerMUTUAL FUNDS
goals?

over others to achieve their investment

MUTUAL FUNDS allow investors to pool in their money for a diversified selection of
securities, managed by a professional fund manager. It offers an array of innovative
products like fund of funds, exchange-traded funds, Fixed Maturity Plans, Sectoral Funds and
many more.
Whether the objective is financial gains or convenienceMUTUAL FUNDS
to its investors.

offer many benefits

Beat Inflation
MUTUAL FUNDS help investors generate better inflation-adjusted returns, without spending
a lot of time and energy on it.While most people consider letting their savings 'grow' in a
bank, they don't consider that inflation may be nibbling away its value.
Suppose you have Rs. 100 as savings in your bank today. These can buy about 10 bottles of
water. Your bank offers 5% interest per annum, so by next year you will have Rs. 105 in your
bank.
However, inflation that year rose by 10%. Therefore, one bottle of water costs Rs. 11. By the
end of the year, with Rs. 105, you will not be able to afford 10 bottles of water anymore.
Mutual Funds provide an ideal investment option to place your savings for a long-term
inflation adjusted growth, so that the purchasing power of yourHARD EARNED MONEY does
not plummet over the years.
ExpertMANAGERS
Backed by a dedicated research team, investors are provided with the services of an
experienced fund manager who handles the financial decisions based on the performance
and prospects available in the market to achieve the objectives of the mutual fund scheme.
Convenience
Mutual funds are an ideal investment option when you are looking at convenience and
timesaving opportunity. With low investment amount alternatives, the ability to buy or sell
them on any business day and a multitude of choices based on an individual's goal and
investment need, investors are free to pursue their course of life while their investments
earn for them.
Low Cost
Probably the biggest advantage for any investor is the low cost of investment that mutual
funds offer, as compared to investing directly in capital markets. MostSTOCK OPTIONS
require significant capital, which may not be possible for young investors who are just
starting out.
Mutual funds, on the other hand, are relatively less expensive. The benefit of scale in
brokerage and fees translates to lower costs for investors. One can start with as low as Rs.
500 and get the advantage of long term equity investment.
Diversification

Going by the adage, 'Do not put all your eggs in one basket', mutual funds help mitigate
risks to a large extent by distributing your investment across a diverse range of assets.
Mutual funds offer a great investment opportunity to investors who have a limited
investment capital.
Liquidity
Investors have the advantage of getting their money back promptly, in case of open-ended
schemes based on the Net Asset Value (NAV) at that time. In case your investment is closeended, it can be traded in the stock exchange, as offered by some schemes.
Higher Return Potential
Based on medium or long-term investment, mutual funds have the potential to generate a
higher return, as you can invest on a diverse range of sectors and industries.
Safety &Transparency
Fund managers provide regular information about the current value of the investment, along
with their strategy and outlook, to give a clear picture of how your investments are doing.
Moreover, since every mutual fund is regulated by SEBI, you can be assured that your
investments are managed in a disciplined and regulated manner and are in safe hands.
Every form of investment involves risk. However, skilful management, selection of
fundamentally sound securities and diversification can help reduce the risk, while increasing
the chances of higher returns over time.

Different Types and Kinds of Mutual Funds

Feb 5, 2015, 03.22 PM IST

TheMUTUAL FUND industry of India is continuously evolving. Along the way, several
industry bodies are also investing towards investor education. Yet, according to a report by
Boston Analytics, less than 10% of our households considerMUTUAL FUNDS as an
investment avenue. It is still considered as a high-risk option.
In fact, a basic inquiry about the types ofMUTUAL FUNDS reveals that these are perhaps
one of the most flexible, comprehensive and hassle free modes of investments that can
accommodate various types of investor needs.
Various types ofMUTUAL FUNDS categories are designed to allow investors to choose a
scheme based on the risk they are willing to take, the investable amount, their goals, the
investment term, etc.

Let us have a look at some

important mutual fund schemes under the following three categories based on
maturity period of investment:
I. Open-Ended - This scheme allows investors to buy or sell units at any point in time. This
does not have a fixed maturity date.
1. Debt/ Income - In a debt/income scheme, a major part of the investable fund are
channelized towards debentures, government securities, and other debt instruments.
Although capital appreciation is low (compared to the equity mutual funds), this is a
relatively low risk-low return investment avenue which is ideal for investors seeing a steady
income.
2. Money Market/ Liquid - This is ideal for investors looking to utilize their surplus funds in
short term instruments while awaiting better options. These schemes invest in short-term
debt instruments and seek to provide reasonable returns for the investors.
3. Equity/ Growth - Equities are a popularMUTUAL FUND category amongst retail
investors. Although it could be a high-risk investment in the short term, investors can expect
capital appreciation in the long run. If you are at your prime earning stage and looking for
long-term benefits, growth schemes could be an ideal investment.
3.i. Index Scheme - Index schemes is a widely popular concept in the west. These follow a
passive investment strategy where your investments replicate the movements of benchmark
indices like Nifty, Sensex, etc.

3.ii. Sectoral Scheme - Sectoral funds are invested in a specific sector like infrastructure,
IT, pharmaceuticals, etc. or segments of the capital market like large caps, mid caps, etc.
This scheme provides a relatively high risk-high return opportunity within the equity space.
3.iii. Tax Saving - As the name suggests, this scheme offers tax benefits to its investors.
The funds are invested in equities thereby offering long-term growth opportunities. Tax
saving mutual funds (called Equity Linked Savings Schemes) has a 3-year lock-in period.
4. Balanced - This scheme allows investors to enjoy growth and income at regular intervals.
Funds are invested in both equities and fixed income securities; the proportion is predetermined and disclosed in the scheme related offer document. These are ideal for the
cautiously aggressive investors.
II. Closed-Ended - In India, this type of scheme has a stipulated maturity period and
investors can invest only during the initial launch period known as the NFO (New Fund Offer)
period.
1. Capital Protection - The primary objective of this scheme is to safeguard the principal
amount while trying to deliver reasonable returns. These invest in high-quality fixed income
securities with marginal exposure to equities and mature along with the maturity period of
the scheme.
2. Fixed Maturity Plans (FMPs) - FMPs, as the name suggests, are mutual fund schemes
with a defined maturity period. These schemes normally comprise of debt instruments which
mature in line with the maturity of the scheme, therebyEARNING THROUGH the interest
component (also called coupons) of the securities in the portfolio. FMPs are normally
passively managed, i.e. there is no active trading of debt instruments in the portfolio. The
expenses which are charged to the scheme, are hence, generally lower than actively
managed schemes.
III. Interval - Operating as a combination of open and closed ended schemes, it allows
investors to trade units at pre-defined intervals.
Which scheme should I invest in?
When it comes to selecting a scheme to invest in, one should look for customized advice.
Your best bet are the schemes that provide the right combination of growth, stability and
income, keeping your risk appetite in mind.

Acknowledgement

Declaration
Executive Summary

Introduction
Company Profile
Objectives and scope
Research Methodology
Data Analysis and interpretation
Findings and conclusions
Suggestions and Recommendations
Bibliography

What is mutual fund

By structure
By nature
Equity fund
Debt fund
By investment objectives
Other schemes
Pros and cons in investing in mutual fund
Advantages
Disadvantages
Mutual funds industry in idia
Major players
History
Categories of of MF
Investment strategies
Working of MF
Guidelines of sebi in MF