MUTUAL FUND

MEANING
• A Mutual Fund is a trust that pools together
the saving of a number of investors who share
a common financial goal
• The money thus collected is then invested in
capital market instruments such as shares ,
debenture and other securities .
• Income earned is shared by unit holders
• It is regulated in India by SEBI- Securities and
Exchange Board of India.
 HISTORY OF INDIAN MUTUAL FUND
• The mutual fund industry in India started in
1963 with the formation of Unit Trust of India
(UTI) at the initiative of the Reserve Bank of
India (RBI) and the Government of India.
 Phase III (1993- Phase IV (1996-
96): Emergence of 99): Growth And
Private Funds SEBI Regulation

Phase II (1987-
93): Entry of Phase V (1999-
Public Sector 2004):Emergence
Funds of a Large and
Uniform Industry

Growth of
Phase VI (From
Phase I (1964-87): Mutual 2004 Onwards):
Growth Of UTI Consolidation and
Fund Growth
Industry
Reflection Spot
Pause this video and think

Can you describe benefits

related to investment in
mutual funds?
 ADVANTAGES OF MUTUAL FUNDS
 Diversification of Benefits
Low transaction Cost – low brokage cost
 Choices of Scheme- four types of schemes (equity,
bond, hybrid and money market)
Professional management- Expert knowledge and
experience
Low costs liquidity- A fund house buys and sells
securities
Return Potential- tax benefits
Flexibility- regular investment plan, withdrawal
plan and dividend reinvestment plan
 •2/3- independent.
•Protects the unit holder’s
interest

•A body corporate
•40 % more of the
net worth of AMC

•Protects portfolio
•Fund managers securities
•Administrative function • Registered custodian-
•Charge fee Qualified banker