importance of mutual funds

8/13/2019 Importance of Mutual Funds

1/14

Submitted by: Mukesh kumar Singh


2/14

What is Mutual Fund?

Mutual fund is an investment company thatpools money from individuals and

organizations to invest in variety of

securities, such stocks, bonds, and otherassets.

I

n

ve

s

t

o

r

s

Mutual

fund

schemes

Market

(Fluctu

ates)

Invest their moneyInvest in variety

of securities

P/L from portfolio

of investment

P/L from

Individual


3/14

Importance of Mutual Funds

Affordability

Diversification

Liquidity

Variety

ProfessionalMgmt

TaxBenefits

Legal

Protection

Regulations


4/14

Mutual funds vs. Other Investment


5/14

Mutual Fund vs. Insurance

Mutual Fund Insurance

Returns are higher Lower returns, but risk too is low

Fund management is active Ideal for long term investors

Lower distribution feesOffer switching between asset classes

without any load

Tax liabilities in some schemes No Tax liability

No Tax liability Offers a range of productsin debt and equity

Security is a big trigger for investing


6/14

Bank Fixed Deposits & Mutual Fund

Bank Mutual Fund

Returns Low Better

Admn. Expenses High Low

Risks Low Moderate

Investment Options Less More

Network High Penetration Low but Improving

Liquidity At a cost Better

Quality of Assets Not transparent Transparent

Interest Calculations Quarterly, i.e, 3rd

, 6th

, 9th

,12th

Every Month

Guarantor Is Needed Not Needed

Account Needed Not Needed


7/14

Stocks vs Mutual Funds

A matter of time

Investing Skills

Diversification

SIP Investment


8/14

SEBI RegulationsMutual fund shall be established in the form of trusts under the Indian Trust

Act and managed by separately formed Asset Management Company.

A minimum of ` 10 crores must have AMC as net worth

An AMC can function for only one mutual fund and it is prohibited to work for

another.

The maximum period for subscription is 45 days in case of close- end schemes,

but no such limitation in case of open end scheme.

The entire subscription has to be returned to the investors when the minimum

amount or 60% of the target amount is not raised.

There should be a separate and responsible fund manager for each scheme.A minimum of 90% of the profits must distribute to the unit holders in any given

year.

SEBI has power to impose penalty on mutual funds for violation of SEBI

guidelines.


9/14

Conclusion

Mutual funds have become a major vehicle for mobilization of saving

particularly from the small and household sectors for investment in the

stock market.

Mutual funds have responded to this challenge by providing

innovative new products and building trust with the investors.

Mutual fund industry is expected to play its desired role to harness

savings for economic development, inculcate equity culture,

strengthening the capital market.


10/14

CASE STUDYEase of Communication and Product Launch

(Reliance Mutual fund)Reliance Mutual Fund(RMF):

RMF is one the fastest growing mutual funds, presence in 179 cities across

country. It constantly trying to provide innovation products and services to

customers.

Event Details: Launch for Invest Easy & Business Easy

Reliance Mutual Fund has introduced Invest Easy; a web based secure login facility

That enables both individual and non-individual advisors and investors to transact

in Reliance Mutual Fund schemes.

various entities.

The Invest Easy system will personalize and configure the facility accordingly


11/14

Challenge: Greater Reach with Tighter Budgets

The RMF wanted to share knowledge about companys new product launch

with

Company Executives, Brokers and Sub-Brokers across the India

to reach higher numbers of audience under shorter timelines and tighterbudgets,

they were looking for reliable, customizable and cost-effective solution.

They also were looking to reduce cost and time of event by at least 50%.

Invest Easy simplifies transaction for entities such as private and public limited

companies, partnership firms, trusts, societies.

The platform is configured to accept complex authorization requirements of


12/14

Solutions:

Webcasting- reach target audiences around the world online

Partnership with a company that could provide us with a reliable technology

solution- Epitome Solutions

Epitomes Webcasting solutions:

ES Webcast offers valuable, efficient solutions over traditional face-to-face

meetings and

Include full studio services, global and domestic video and audio feeds,

simultaneous translation,

Live question and answer,

Archiving for Executives, Brokers and Sub-Brokers for later view.

Depending on the Companys need, ES Webcast can offer small or large scale

solutions for reaching global and domestic audiences without the need for attendee

travel and transportation expenses.


13/14

Results:

Reduce Costs, Increase ROI:

Cost savings: Between Rs. 15,000- Rs. 20,000

Enhanced reach to target audience

In addition, by using archived recordings of

the event, clients receive the addedValue of enduring information being available

to customers.


14/14

importance of mutual funds

Documents