MUTUAL FUNDS

A PRESENTATION
BY
SANCHEET WAGLE
FY(A&F) 52
CONTENTS
INTRODUCTION
OBJECTIVES

DEFINITION

TYPES OF MUTUAL FUNDS

DIFFERENCE BETWEEN EQUITIES &

MUTUAL FUNDS
NET ASSET VALUE (NAV)

UNIT TRUST OF INDIA

GUIELINES FOR MUTUAL FUNDS

LEDING ASSET MANAGEMENT COMPANIES

DISCLAIMER
 INTRODUCTION

Mutual funds are one of the most important

segments of the financial system of the country

The financial system consists of

Financial institution
Bank
Investment bodies
The capital market
 INTRODUCTION

Mutual funds are financial intermediaries that

collect funds from public and invest on behalf of
investors.

Mutual funds, thus, operate as collective

investment vehicle that pools resources by
issuing units to investors and collectively invests
those resources in a diversified portfolio.
 MUTUAL FUNDS

The concept of Mutual Funds was originated in

the USA and UK way back in 1930s Known as
Unit Funds.

Mutual Funds started in India only in the year

1960.
 OBJECTIVE OF FUNDS
To provide an opportunity for lower income
groups to acquire without much difficulty
property in the form of shares
To cater mainly to the need of individual
investors whose means are small.
To manage investors portfolio in a manner that
provides regular income, growth, safety, liquidity
and diversification.
 DEFINITION OF MUTUAL FUND

A mutual fund is a professionally managed type

of collective investment scheme that pools money
from many investors and invests it
in stocks,bonds, short-term money
market instruments, and or other securities.The
mutual fund will have a fund
manager that trades the pooled money on a
regular basis. The net proceeds or losses are then
typically distributed to the investors annually.
TYPES OF MUTUAL FUNDS

Open Ended Funds

Exchange Traded funds (ETF)

Equity Funds

Bond Funds
 OPEN-END FUND

o The term mutual fund is the common name for

what is classified as an open-end investment
company by the SEBI. Being open-ended means
that, at the end of every day, the fund issues
new shares to investors and buys back shares
from investors wishing to leave the fund.
 EXCHANGE-TRADED FUNDS

The exchange-traded fund or ETF, is the

combination of characteristics of both mutual
funds and closed-end funds. ETFs are traded
throughout the day on a stock exchange. Most
ETFs are index funds and track stock market
indexes.
 EQUITY FUNDS

Equity funds, which consist mainly of stock

investments, are the most common type of
mutual fund. Equity funds hold 50 percent of all
amounts invested in mutual funds in India. Often
equity funds focus investments on particular
strategies and certain types of issuers.
 BOND FUNDS

Types of bond funds include term funds, which

have a fixed set of time before they mature. Bond
funds are invested in Municipal (Governmental )
or Corporate (Private) Bonds.
DIFFERENCE BETWEEN EQUITIES &
MUTUAL FUNDS ?
NET ASSET VALUE (NAV)
Net asset value (NAV) is a term used to describe
the value of an entity's assets less the value of
its liabilities..
There is no universal method of valuing assets
and liabilities for the purposes of calculating net
asset value, and the criteria used for the
valuation will depend upon the circumstances,
the purposes of the valuation and any regulations
that may apply.
VALUATION OF ASSETS IN FUNDS
The NAV of a collective investment scheme (such
as a mutual funds) is calculated by reference to
the total value of the fund's portfolio (its assets)
less money owed to lending banks, fees owed to
investment managers and service providers and
other liabilities.
UNIT TRUST OF INDIA
The Unit Trust of India was formed in 1963. It
was entrusted the job of creating mutual funds
for the Indian public.
The UTI Offered the New fund US 64 in 1964 the
1st mutual fund of India.
It Grossly yielded 18 % upon redemption.
 MUTUAL FUND INDUSTRY
An overview
1. 1964 1987 UTI
2. 1987-1993 banks,LIC & GIC
3. 1993 Private & Foreign sectors
GUIDELINES FOR MUTUAL FUNDS
The Government of India has on Feb. 14, 1992
issued a set of comprehensive guideline applicable
to public, private and joint sector mutual fund.
Mutual Funds are to be established in the form of
trust under the Indian Trust Act and are to be
operated by separate Asset Management
Companies (AMC).
AMCs shall have a minimum net worth of Rs. 5
crores.
AMCs and trustees of mutual fund are to be the
separate legal entities and that an AMC or its
affiliate cannot act as a manager in any other fund.
GUIDELINES FOR MUTUAL FUNDS
Mutual funds dealing primarily in the capital
market and also partly in money market instrument
one to be regulated by the securities and exchange
board of India.
Mutual fund dealing primarily in the capital
market and also partly in money market
instruments is to be regulated by the Reserve Bank
of India.
All scheme floated by mutual fund are to be
registered with SEBI
LEADING ASSET MANAGEMENT
COMPANIES
DISCLAIMER

Mutual funds investment are subject to market

risk. Please read the offer document carefully
before investing.