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INVESTMENT in

MUTUAL FUND

Presented by:

Ankit chhabraMBA/08/48

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Where to invest ??

We always think ,where should weinvest our money infinancial market ....

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Concept of mutual fund

A mutual fund is a professionally-managedfirm of collective investments that poolsmoney from many investors and invest it in

stocks, bonds etc.

Mutual fund have a fund manager who

invests the money on behalf of theinvestors by buying/selling stocks, bondsetc.

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Why investor prefer Mutual fund ?

They can buy their shares directly from market.

But this require spending time to find out theperformance of the company whose share isbeing purchased, understanding the futurebusiness prospects of the company, finding outthe track record of the promoters & the dividend,bonus issue, history of the company etc. Itshere to do research before investing.

However investor prefer the mutual fund route. Besides this, in this LOW RISK & HIGH

RETURN.

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Who manages investors money?

This is the role of asset managementcompany (AMC), to manage investors

money.

AMCs in return charges a fee for the

services provided & this fee is borne bythe investor as it is deducted from the

money.

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ORGANISATION OF MUTUAL FUND

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Working of mutual fund

Two methods-

Lump sum or one time payment method

Systematic investment plan (SIP)

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SYSTEMATIC INVESTMENTPLAN

Under this a fixed sum isinvested each month on afixed date of a month.

Payment is made throughpost dated cheques ordirect debit facilities.

The investor gets fewerunits when the NAV ishigh and more units when

the NAV is low. This is called as the

benefit of Rupee CostAveraging (RCA).

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Load structure

Two types of loads are there in:

Entry load

Exit load

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TYPES OF MUTUAL FUNDBY STRUCTURE

Openended funds Close-ended funds

BY INVESTMENT OBJECTIVE Growth Funds Income funds Balance Funds Money Market Funds Gilt Funds Index Funds

ON THE BASIS OF LOAD Load Funds No Load Funds

OTHER SCHEMES Tax Saving schemes

Industry Specific schemes Sector schemes

Return ??

Risk factor ??

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Open-ended funds

An open-end fund is one that is availablefor subscription all through the year.

These do not have a fixed maturity.

Investors can conveniently buy and sellunits at Net Asset Value (NAV) relatedprices.

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Closed-ended schemes

A closed-end fund has a stipulatedmaturity period which generally rangingfrom 3 to 15 years.

The fund is open for subscription onlyduring a specified period.

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RISK Vs. RETURN

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ADVANTAGES OF MUTUALFUND

Portfolio diversification

Professional Management

Liquidity

Affordability

Variety

Tax BenefitsConvenient & flexibility

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DISADVANTAGES OF MUTUAL FUND

No Tailor-made-Portfolios

No control over costs

Managing a Portfolio of Funds

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Major Mutual Fund Companiesin India

There are around 33 AMCs in india.

http://www.taurusmutualfund.com/