PRESENTED

BY
KOYEL HAZRA
B.VOC BFSI
2ND SEM
ROLL NO
273809180002
NSHM
KNOWLEDGE
CAMPUS
DURGAPUR
 A mutual fund is a type of financial vehicle made up of a pool
of money collected from many investors to invest in securities
such as stocks, bonds, money market instruments, and other
assets.
 Mutual funds are operated by professional money managers,
who allocate the fund's assets and attempt to produce capital
gains or income for the fund's investors.
 A mutual fund's portfolio is structured and maintained to
match the investment objectives stated in its prospectus.
 1. Simplicity: Mutual Funds Are Easy to UnderstandAnything
can be made into something more complex than it needs to be
and mutual funds are no exception to this truth. However,
mutual funds require no experience or knowledge of economics,
financial statements, or financial markets to be a successful
investor.
 2. Accessibility: Mutual Funds Are Easy to Buy Mutual funds
are offered at brokerage firms, discount brokers online, mutual
fund companies, banks, and insurance companies.
 3. Diversification: Mutual Funds Have Broad Market
Exposure One mutual fund can invest in dozens, hundreds, or
even thousands of different investment securities, making it
possible to achieve diversification by investing in just one fund.
However, it is smart to diversify into several different mutual
funds.
 4. Variety: Mutual Funds Come In Many Different Categories
and Types As you grow your portfolio of mutual funds, you will
want to diversify into various mutual fund categories and types.
 5. Affordability: Mutual Funds Have Low Minimums Most
mutual funds have minimum initial investment requirements .In
many cases, if the investor initiates a systematic investment
program, where they have a fixed amount or fixed number of
shares purchased once per month, the initial investment can be
low.
 6. Low Expense: Mutual Funds Can Cost Less to Manage Than
Other Portfolio Types Costs as a percentage of assets in the
portfolio may be lower for an actively-managed mutual fund when
compared to an actively-managed portfolio of individual securities.
 7. Professional Management: Mutual Funds Have a Team of
Professionals Researching and Analyzing Investments .Perhaps
the greatest benefit of mutual funds is that investors can save
countless hours of time, energy and frustration involved with
the research and analysis required to find quality investments to
hold in a portfolio.
 8. Flexibility: Mutual Funds Have Several Uses and
Applications All of the above benefits of mutual funds overlap
into simplicity and flexibility. You can invest in just one fund or
invest in a wide variety
 AMC-An Asset Management Company is the fund house or the
company that manages the money.The mutual fund is a trust
registered under the Indian Trust Act. It is initiated by a sponsor. A
sponsor is a person who acts alone or with a corporate to establish
a mutual fund. The sponsor then appoints an AMC to manage the
investment, marketing, accounting and other functions pertaining
to the fund.

 NAV :The Net Asset Value is the price of a unit of a fund. When a
fund comes out with an NFO, it is priced Rs 10. Later, depending
on the value of the investments, this price could rise or fall.
 Load :This is a fee that is charged when you buy or sell the units
of a fund. When you buy the units of a fund, you pay a
percentage of it as a fee. This is known as the entry load.

 Portfolio: This is the term given to all the investments made by

the fund as well as the amount held in cash

 AUM :Assets Under Management is the total value of all the

investments currently being managed by the fund.
 Balanced fund :A fund that invests in both equity (shares) and debt
(fixed return investments) is known as a balanced fund.
 Debt fund: These are funds that invest in fixed return investments
like bonds. A liquid fund is one that invests in money market
instruments, these are fixed return investments of a very short tenure.
 NFO :A New Fund Offering is the term given to a new mutual fund
scheme.
 SIP:A Systematic Investment Plan refers to periodic investing in a
mutual fund. Every month or every three months, the investor will
have to commit to putting in a fixed amount. This will go towards the
purchase of units.
 Sponsor :The sponsor can be any person who, acting alone or
in combination with another body corporate, establishes the
mutual fund and gets it registered with SEBI.

 Mutual fund The mutual fund shall be constituted in the

form of a registered trust under the Indian Trusts Act, 1882. It is
the Board of Trustees who manages the mutual fund.
 Asset Management Company (AMC) :
The Board or the Trustee Company protects the investors'
interests. Instead of managing by them, Trustees appoint an
Asset Management Company (AMC) to manage the portfolio of
securities as per the objectives.
 Custodian
The custodian is responsible for safe keeping of assets of the
fund, which may mainly be in large volumes of securities.
 Depository Participant :Instead of having physical certificates of
securities they can be dematerialised with a depository. It is
through a Depository Participant mutual funds hold its
dematerialised securities.
 Bankers :Financial dealings of mutual hds like buying and selling
units, paying for investments made, receiving the proceeds on sale
of investments and paying the operational expenses are done
through bank.
 Brokers: It is through brokers, agents and distributors the units of
mutual funds are sold. A broker usually acts on behalf of several
mutual funds and may have several sub-brokers and agents under
him
 Registrar/ transfer agent :The registrar/ transfer agent's
duty is to handle the registry related work of the unit holders.
They are responsible for issuing and redeeming units of mutual
funds and other related services.
 There are a variety of mutual fund products coming to the
market so as to cater to the requirements of different classes of
investors. These schemes can be classified on the basis of
 1. Structure/ constitution: a) Open - ended schemes b) Close -
ended schemes
 2. Charges on investors: a) Load fund schemes b) No-load fund
schemes
 3. Investment Objectives: a) Income schemes b) Growth
schemes c) Balanced schemes d) Tax saving schemes e) Index
fund schemes f) Sector fund schemes g) Assured Return schemes
h) Miscellaneous schemes
 4. Nature of investment
 a) Financial asset fund schemes b) Physical asset fund schemes
 5. Geography:
 a) Domestic schemes b) Offshore schemes or Global schemes
 5 Simple Steps to Invest in Mutual Funds
 Understand your risk capacity and risk tolerance. This process of
identifying the amount of risk you are capable of taking is referred to as
risk profiling.
 The next step is asset allocation. Once you identify your risk profile, you
should look to divide your money between various asset classes. Ideally
your asset allocation should have a mix of both equity and debt
instruments so as to balance out the risks.
 Then you should identify the funds that invest in each asset class. You can
compare mutual funds based on investment objective and past
performance.
 Decide on the mutual fund schemes you will be investing in and make the
application online or offline.
 Diversification of your investments and follow-ups are important to ensure
that you get the best out of your investment
 In Indian mutual fund industry, most of the mutual fund schemes
have been performing inefficiently.
 However, when analysed within their category as Growth,
Income, Balanced situation is much better and approximately half
of the schemes in each category have been performing efficiently.
 Load fee and expense ratio have been found as the major cause of
inefficiency in mutual fund. For all the inefficient schemes, there
are respective peer efficient schemes in particular weights by
following which these schemes might attain efficiency level.
 Thus, for the entire set of inefficient schemes, target values or
virtual inputs are there for achieving the efficiency level. These
target values shows that expense ratio and load fee should be
reduced to achieve efficiency.