Search icone
Search and publish your papers

Mutual funds and their investment options

Or download with : a doc exchange

About the author


About the document

Published date
documents in English
research papers
42 pages
0 times
Validated by
0 Comment
Rate this document
  1. Introduction
  2. Reduction of transaction costs
  3. Convenience and flexibility
  4. A list of frequently used mutual fund terms
  5. History of the Indian mutual fund industry
  6. Regulatory structure of mutual funds
  7. Role of stock exchanges
  8. Asset management company
  9. Classification of mutual fund schemes
  10. Types of mutual funds
  11. A list of investment plans
  12. Services provided by mutual fund companies
  13. Types of distribution channels
  14. The importance of accounting knowledge
  15. Taxation towards mutual funds
  16. A study on mutual fund performance
    1. Basis of choosing an appropriate performance benchmark
    2. Tracking mutual fund performance
  17. Classification of the investor needs
  18. Analysis and results of the questionnaire
  19. Marketing mutual funds
  20. Suggestions and recommendations
  21. Conclusion
  22. Bibliography

A mutual fund is a pool of money, collected from investors, and is invested according to certain investment options. A mutual fund is a trust that pools the savings of a number of investors who share a common financial goal. A mutual fund is created when investors put their money together. It is therefore a pool of the investor's funds. 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 are shared by its unit holders in proportion to the number of units owned by them.

The most important characteristics of a fund is that the contributors and the beneficiaries of the fund are the same class of people, namely the investors. The term mutual fund means the investors contribute to the pool , and also benefit from the pool . There are no other claimants to the funds. The pool of funds held mutually by investors is the mutual fund .
A mutual funds business is to invest the funds thus collected according to the wishes of the investors who created the pool. Usually , the investors appoint professional investment managers, to manage their funds. The same objective is achieved when professional investment managers create a product and offer it for investment to the investor. This product represents a share in the pool ,and pre states investment objectives. 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.

Investors in the mutual fund industry today have a choice of 39 mutual funds, offering nearly 500 products. Though the categories of product offered can be classified under about a dozen generic heads, competition in the industry has led to innovative alterations to standard products. The most important benefit of product choice is that it enables investors to choose options that suit their return requirements and risk appetite. Investors can combine the options to arrive at their own mutual fund portfolios that fit with their financial planning objectives.

[...] High financial goals risk appetite Transition stage Near term needs for Liquid and medium term funds as per specified investment . needs draw closer Preference for income and debt products. Reaping stage Higher liquidity Liquid and medium term requirements investment for income low risk appetite Inter generation Long term investment Low liquidity needs , transfer of inheritance Ability to take risks and invest for the long term Sudden wealth surge Medium to long term Wealth preservation . Preference for low risk products. [...]

[...] Investors can easily transfer their holdings from one scheme to the other, get updated market information But roses have thorns as well While the benefits of investing through mutual funds far outweigh the disadvantages, an investor and his advisor will do well to be aware of a few shortcomings of using the mutual funds as investment vehicles. No Control over Costs: An investor in a mutual fund has no control over the overall cost of investing. He pays investment management fees as long as he remains with the fund, albeit in return for the professional management and research. [...]

[...] Tracking Mutual Fund Performance Having identified appropriate measures and benchmarks for the mutual funds available in the market, the challenge is to track fund performance on a regular basis. This is indeed the key towards maximizing wealth through mutual fund investing. Proper tracking allows the investor to make informed and timely decisions regarding his fund portfolio ?whether to acquire attractive funds, dispose off poor performers or switch between funds/plans. To be able to track fund performance, the first step is to find the relevant information on NAV, expenses cash flow, appropriate indices and so on. [...]

Similar documents you may be interested in reading.

Mutual fund as an investment option at Angel Booking Ltd

 Economics & finance   |  Finance   |  Indian project   |  03/12/2009   |   .doc   |   53 pages

Mutual fund as an investment options in Prudent Corporate Advisory Services Limited

 Business & market   |  Marketing   |  Presentation   |  03/13/2009   |   .doc   |   83 pages

Top sold for finance

Yale University Investments Office: August 2006 case analysis

 Economics & finance   |  Finance   |  Case study   |  08/17/2009   |   .doc   |   8 pages

International finance distribution of currency of AUD and USD

 Economics & finance   |  Finance   |  Worksheets   |  08/05/2017   |   .doc   |   4 pages