Presented by:

Group No. 1

Aditi Jain (17)

Nikita Jain (18)
Vishal Nihalani (28)
Navin Purswani (36)
Harshit Shah (42)
Poonam Shah (46)
 Why did Mutual Funds come into existence?

An old Axiom :

“It is not wise to put all eggs into one

basket”

……… was probably in the minds of

those who formed the first mutual fund.
MEANING

Mutual funds are basically investment funds where the investment

companies collect money from the investors and invest the
same in various stocks of different companies and government
bonds.
Definition
According to SEBI (mutual funds) Regulations Act 1993 defines
mutual fund as, “ a fund established in the form of a trust by a
sponsor to raise monies by the trustees through the sale of units
to the public under one or more schemes for investing in
securities.”
FLOW CYCLE OF MUTUAL FUND
PARTIES INVOLVED IN MUTUAL FUND
DEALINGS

INVESTORS
DISTRIBU
TORS

TRUSTEES

ASSET
MANAGEMENT
COMPANY
CLASSIFICATION OF MUTUAL FUNDS

BY By
OTHER
STRUCTUR Investment
E Objective SCHEMES
●
Growth Funds ●
Tax Saving
●
Open-ended Schemes
●
Income Funds
Funds Industry Specific
Balanced
●
●
●
Closed-ended Schemes
Funds Index Schemes
Funds
●

●
Money Market ●
Sectoral
●
Interval Funds
Funds Schemes
ADVANTAGES OF MUTUAL FUNDS

 Professional Management
 Diversification
 Convenient Administration
 Choice of Schemes
 Legal Framework
 Tax Benefits
 Liquidity
 Affordability
DISADVANTAGES OF MUTUAL FUNDS
 No Guarantees

 Fees and Commissions

 Taxes

 Dilution

 Management Risks
RISKS FACED BY INVESTORS WHILE
INVESTING IN MUTUAL FUNDS
 Choice Risk

 Cost Risk

 Prediction Risk

 Competition Risk

 Forward Pricing Risk

 Market risk
BASIS OF COMPARISON OF VARIOUS SCHEMES OF
MUTUAL FUNDS

 BETA
 ALPHA

[ (sum of y) - ((b)(sum of x)) ] / n

Where:
n = number of observations (36 mos.)
b = beta of the fund
x = rate of return for the market
y = rate of return for the fund
CONTINUED….
 SHARPE RATIO
CONTINUED….
 TREYNOR RATIO

 STANDARD DEVIATION
NET ASSETS VALUE (NAV)
 NAV represents a fund's per share market value. This is the price at
which investors buy ("bid price") fund shares from a fund company and
sell them ("redemption price") to a fund company.

NAV= (Market Value Of Assets – Liabilities )/ Number of Outstanding share.

The factors affecting the NAV are as following:-

 Capital Gains or Losses on the sale or purchase of the Investment securities.
 Dividend and income earned on the assets.
SIP- SYSTEMATIC INVESTMENT PLAN
 Itis a method of investing in a mutual fund.
 SIP allows the investor to buy units on a given date
every month.
 The investor decides the amount and also the
mutual fund scheme.
 EVOLUTION OF INDIAN MUTUAL
FUND INDUSTRY
 Phase 1
The first mutual fund in the name of Unit Trust of
India was established in July 1964.
UTI launched its first scheme US-64 & became
very popular.
PHASE 2

 Government allowed the public sector banks to

establish mutual funds. SBI became the first non
UTI institution to establish the SBI mutual funds
in 1987.
PHASE 3

 There was a historical change in 1993 when the

government allowed the private sector mutual
funds also.
 The first mutual funds in the private sector
were Kothari pioneer, now merged with Franklin
Templeton.
 In 1992, SEBI was established and it issued
guidelines for the working and supervision of
mutual funds.
PHASE-4

 UTI bifurcated into two separate entities

 Atthe end of September,2004, there were 29

funds, which manage assets of Rs.153108 crores
under 421 schemes.
MAJOR PLAYERS IN INDIAN MUTUAL
FUND INDUSTRY
HDFC Mutual Fund
Birla Mutual Fund
BOB Mutual Fund HSBC Mutual Fund
Canbank Mutual Fund ING Vysya Mutual Fund
Chola Mutual Fund
Kotak Mahindra Mutual Fund
Deutsche Mutual Fund
DSP Merrill Lynch Mutual Fund Franklin Templeton
Escorts Mutual FundLIC Mutual Investments
Fund
Prudential ICICI Mutual Fund HDFC Mutual Fund
Reliance Mutual Fund HSBC Mutual Fund
SBI Mutual Fund
ING Vysya Mutual Fund
Franklin Templeton Investments
Kotak Mahindra Mutual Fund
ROLE OF ASSET MANAGEMENT
COMPANIES
 Provide high quality advice and product information to customers.
 Positioning of the service
 Convince investors regarding justification of the fee charged by
them.
 Uniformity in Service offerings
 Delivering value to the customer
 Safeguard the investor's right
 Provide comprehensive knowledge and understanding of Mutual
Funds amongst all individuals instrumental in selling the Mutual
Fund schemes to investors including employees of intermediaries,
individual agents and financial planners.
 Top 10   Funds  - Period (Last&nbsp12 Months)
Rank Scheme Name Date NAV (Rs.) Last 12 Months %

Reliance Pharma
1 Apr 12 , 2010   49.2269 153.2402 
Fund - Growth 

ICICI Prudential
2 Discovery Fund - Apr 12 , 2010   19.68 145.5112 
IP- Growth 

ICICI Prudential
3 Discovery Fund - Apr 12 , 2010   44.5 142.2742 
Growth 

Franklin Pharma
4 Apr 12 , 2010   54.7551 135.6633 
Fund - Growth 

Principal Emerging
5 Bluechip Fund - Apr 12 , 2010   30.11 134.678 
Growth 
 Sundaram BNP
Paribas Select
6 Apr 9 , 2010   12.5331 134.5792 
Small Cap Fund -
Growth 

Canara Robeco
7 Emerging Equities - Apr 12 , 2010   20.36 132.8 
Growth 

Birla Sun Life Long

Term Advantage
8 Apr 12 , 2010   12.1458 132.3195 
Fund - Series 1 -
Growth 

Principal PNB
Long Term Equity
9 Apr 12 , 2010   11.38 131.5682 
Fund - 3 Year Plan -
Series II - Growth 

Birla Sun Life Mid

10 Cap Fund - Plan A - Apr 12 , 2010   109.12 131.1985 
Growth 

*Note:- Returns calculated for less than 1 year are Absolute returns and returns calculated for more than 1 year are compounded
annualized.
ASSOCIATION OF MUTUAL FUND IN
INDIA
 Need
 Incorporatedon 22nd August, 1995.
 an apex body of all Asset Management
 Members
 Principle
 Primary Objective
OBJECTIVES OF ASSOCIATION OF MUTUAL FUNDS IN INDIA

 It recommends and promotes the top class business

practices and code of conduct
 AMFI interacts with SEBI and works according to SEBI’s
guidelines in the mutual fund industry.

 It represents the Government of India, the Reserve Bank

of India and other related bodies on matters relating to
the Mutual Fund Industry.

 It develops a team of well qualified and trained Agent

distributors.

 It undertakes all India awareness programs for investors

 It also disseminates information on Mutual Fund Industry

ROAD AHEAD…
Growth Growing at rapid pace at a CAGR of around 30%
●

●
Projected to mark US $ 300 billion by 2015

BECAUSE Higher saving pattern

●

●
Widening product range

Good instrument of wealth creation

Bright Future
●

●
No. of foreign AMC’s in queue

Challenges
●
Lack of Awareness
●
Participation of rural sector
●
Inferior distribution Channel
CONCLUSION

 The basic principle underlying mutual fund is to pool in

money with other people to convert it into funds.
 A secure investment as the chance of loss is spread out,
and the opportunity for gains are numerous.
 It is both cost- effective and an investment that gives
great future returns.