Mutual Fund Basics by mnmgroup



       Topic                                page no
(1) Introduction                            4         5

(2) History                                 6         7

(3) Net asset value(NAV)                         7

(4) Elements & performance of mutual fund   8         9

(5) Classification                          10        11

(6) Features of mutual funds                     12

(7) List of mutual funds in India           13        14

(8) Advantage & dis- advantage              15        16

(9) How to read a mutual fund table              17

(10)      Conclusion                             18

(11)      Bibliography                           19


Mutual Fund is an instrument of investing money. Nowadays, bank rates have fallen down and
are generally below the inflation rate. Therefore, keeping large amounts of money in bank is not
a wise option, as in real terms the value of money decreases over a period of time.
One of the options is to invest the money in stock market. But a common investor is not
informed and competent enough to understand the intricacies of stock market. This is where
mutual funds come to the rescue. A mutual fund is a group of investors operating through a fund
manager to purchase a diverse portfolio of stocks or bonds. Mutual funds are highly cost efficient
and very easy to invest in. By pooling money together in a mutual fund, investors can purchase
stocks or bonds with much lower trading costs than if they tried to do it on their own. Also, one
doesn't have to figure out which stocks or bonds to buy. But the biggest advantage of mutual
funds is diversification.

Diversification means spreading out money across many different types of investments. When
one investment is down another might be up. Diversification of investment holdings reduces the
risk tremendously.

The mutual fund collects money directly or through brokers from investors. The money is
invested in various instruments depending on the objective of the scheme. The income generated
by selling securities or capital appreciation of these securities is passed on to the investors in
proportion to their investment in the scheme. The investments are divided into units and the
value of the units will be reflected in Net Asset Value or NAV of the unit. NAV is the market
value of the assets of the scheme minus its liabilities. The per unit NAV is the net asset value of
the scheme divided by the number of units outstanding on the valuation date. Mutual fund
companies provide daily net asset value of their schemes to their investors. NAV is important, as
it will determine the price at which you buy or redeem the units of a scheme. Depending on the
load structure of the scheme, you have to pay entry or exit loadual earnings) and may also levy
other fees and sales commission (called 'load') if units are bought from a financial advisor. The
term 'mutual fund' has no legal bearing, and may be referred to as unit investment trust in the US
and unit trust in the UK and other British Commonwealth countries.

As you probably know, mutual funds have become extremely popular over the last 20 years.
What was once just another obscure financial instrument is now a part of our daily lives. More
than 80 million people, or one half of the households in America, invest in mutual funds. That

means that, in the United States alone, trillions of dollars are invested in mutual funds. (For more

In fact, to many people, investing means buying mutual funds. After all, it's common knowledge
that investing in mutual funds is (or at least should be) better than simply letting your cash waste
away in a savings account, but, for most people, that's where the understanding of funds ends. It
doesn't help that mutual fund salespeople speak a strange language that is interspersed with
jargon that many investors don’t understand.

Mutual Funds – Concept

A Mutual Fund is a trust that pools the savings 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, 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. 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. The flow chart below describes broadly the working of a mutual fund

                             Mutual Fund Operation Flow Chart

History of mutual fund industry in India-
The concept of mutual funds was introduced in India with the formation of Unit Trust of India in
1963. The first scheme launched by UTI was the now infamous Unit Scheme 64 in 1964. Though
the growth was slow, but it accelerated from the year 1987 when non-UTI players entered the
industry.In the past decade, Indian mutual fund industry had seen a dramatic improvements, both
quality wise as well as quantity wise.UTI continued to be the sole mutual fund until 1987, when
some public sector banks and Life Insurance Corporation of India and General Insurance
Corporation of India set up mutual funds. It was only in 1993 that private players were allowed
to open shops in the country. Today, 32 mutual funds collectively manage Rs 6713575.19 crore
under hundreds of schemes.

 Hence, it is the prime responsibility of all mutual fund companies, to market the product
correctly abreast of selling.The mutual fund industry can be broadly put into four phases
according to the development of the sector. Each phase is briefly described as under.

First Phase - 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the
Reserve Bank of India and functioned under the Regulatory and administrative control of the
Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development
Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The
first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700
crores of assets under management.

Second Phase - 1987-1993 (Entry of Public Sector Funds)
Entry of non-UTI mutual funds. SBI Mutual Fund was the first followed by Canbank Mutual
Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov

89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC in 1989 and GIC in
1990. The end of 1993 marked Rs.47,004 as assets under management.

Third Phase - 1993-2003 (Entry of Private Sector Funds)
With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in
which the first Mutual Fund Regulations came into being, under which all mutual funds, except
UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with
Franklin Templeton) was the first private sector mutual fund registered in July 1993.The 1993

SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual
Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund)
Regulations 1996.The number of mutual fund houses went on increasing, with many foreign
mutual funds setting up funds in India and also the industry has witnessed several mergers and
acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs.
1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under management was
way ahead of other mutual funds.

Fourth Phase - since February 2003
This phase had bitter experience for UTI. It was bifurcated into two separate entities. One is the
Specified Undertaking of the Unit Trust of India with AUM of Rs.29,835 crores (as on January
2003). The Specified Undertaking of Unit Trust of India, functioning under an administrator and
under the rules framed by Government of India and does not come under the purview of the
Mutual Fund Regulations.The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB,
BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With
the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of
AUM and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund
Regulations, and with recent mergers taking place among different private sector funds, the
mutual fund

Net Asset Value (NAV)

When you invest your money in a mutual fund, you buy shares in that fund. To determine the
price of those shares, each day the fund adds up the total value of the securities held in its
portfolio. This total is divided by the number of shares outstanding. The resulting figure is
known as the Net Asset Value or NAV.

To find out the value of your holdings, you simply multiply the number of shares you own by the
net asset value. The NAV of most funds is listed in most daily newspapers. The NAV will
change daily depending on how well the underlying securities of the fund perform. If the
securities held by the fund go up in value so will the value of your shares.

The performance of a particular scheme of a mutual fund is denoted by Net Asset Value (NAV).
Mutual funds invest the money collected from the investors in securities markets. In simple
words, Net Asset Value is the market value of the securities held by the scheme. Since market
value of securities changes every day, NAV of a scheme also varies on day to day basis. The
NAV per unit is the market value of securities of a scheme divided by the total number of units
of the scheme on any particular date. For example, if the market value of securities of a mutual
fund scheme is Rs 200 lakhs and the mutual fund has issued 10 lakhs units of Rs. 10 each to the
investors, then the NAV per unit of the fund is Rs.20. NAV is required to be disclosed by the
mutual funds on a regular basis - daily or weekly - depending on the type of scheme

Elements of mutual funds -
A mutual fund is set up by a sponsor. However, the sponsor cannot run the fund directly. He has
to set up two arms: a trust and Asset Management Company. The trust is expected to assure fair
business practice, while the AMC manages the money. All mutual funds except UTI functions
under sebi (Mutual Fund) regulations 1996.

The mutual fund collects money directly or through brokers from investors. The money is
invested in various instruments depending on the objective of the scheme. The income generated
by selling securities or capital appreciation of these securities is passed on to the investors in
proportion to their investment in the scheme. The investments are divided into units and the
value of the units will be reflected in Net Asset Value or NAV of the unit. NAV is the market
value of the assets of the scheme minus its liabilities. The per unit NAV is the net asset value of
the scheme divided by the number of units outstanding on the valuation date. Mutual fund
companies provide daily net asset value of their schemes to their investors. NAV is important, as
it will determine the price at which you buy or redeem the units of a scheme. Depending on the
load structure of the scheme.

How to Profit with Mutual Funds

When you invest in a mutual fund you hope that the value will rise and you can eventually sell
your shares for a profit. This is one of the ways you can profit with mutual funds. Another way is
through capital gains. When a mutual fund sells a security for a higher price than it originally
paid for it, it is known as a capital gain. Most mutual funds distribute their capital gains to
shareholders at least annually, some more often. The last way to profit with mutual funds is with
dividends or interest. If the fund has invested in bonds or dividend-paying stocks, it must pass
the dividends or interest earned on to its shareholders. Like capital gains, this is done at least

Performance of Mutual Funds in India

Let us start the discussion of the performance of mutual funds in India from the day the concept
of mutual fund took birth in India. The year was 1963. Unit Trust of India invited investors or
rather to those who believed in savings, to park their money in UTI Mutual Fund.For 30 years it
goaled without a single second player. Though the 1988 year saw some new mutualfund
companies, but UTI remained in a monopoly position.
The performance of mutual funds in India in the initial phase was not even closer to satisfactory

level. People rarely understood, and of course investing was out of question. But yes, some 24
million shareholders was accustomed with guaranteed high returns by the beginning of
liberalization of the industry in 1992. This good record of UTI became marketing tool for new
entrants. The expectations of investors touched the sky in profitability factor. However, people
were miles away from the preparedness of risks factor after the liberalization. The Assets Under
Management of UTI was Rs. 67bn. by the end of 1987. Let me concentrate about the
performance of mutual funds in India through figures. From Rs. 67bn. the Assets Under
Management rose to Rs. 470 bn. in March 1993 and the figure had a three times higher
performance by April 2004. It rose as high as Rs. 1,540bn.

The net asset value (NAV) of mutual funds in India declined when stock prices started falling in
the year 1992. Those days, the market regulations did not allow portfolio shifts into alternative
investments. There were rather no choice apart from holding the cash or to further continue
investing in shares. One more thing to be noted, since only closed-end funds were floated in the
market, the investors disinvested by selling at a loss in the secondary market. The performance
of mutual funds in India suffered qualitatively. The 1992 stock market scandal, the losses by
disinvestments and of course the lack of transparent rules in the where about rocked confidence
among the investors. Partly owing to a relatively weak stock market performance, mutual funds
have not yet recovered, with funds trading at an average discount of 1020 percent of their net
asset value.

The supervisory authority adopted a set of measures to create a transparent and competitive
environment in mutual funds. Some of them were like relaxing investment restrictions into the
market, introduction of open-ended funds, and paving the gateway for mutual funds to launch
pension schemes.
The measure was taken to make mutual funds the key instrument for long-term saving. The more
the variety offered, the quantitative will be investors.
At last to mention, as long as mutual fund companies are performing with lower risks and higher
profitability within a short span of time, more and more people will be inclined to invest until
and unless they are fully educated with the dos and donts of mutual funds.


Classification of mutual funds in India-

1. Open-ended funds: Investors can buy and sell units of open-ended funds at NAV-related
price every day. Open-end funds do not have a fixed maturity and it is available for subscription
every day of the year. Open-end funds also offer liquidity to investments, as one can sell units
whenever there is a need for money.

2. Close-ended funds: These funds have a stipulated maturity period, which may vary from
three to 15 years. They are open for subscription only during a specified period. Investors have
the option of investing in the scheme during initial public offer period or buy or sell units of the
scheme on the stock exchanges. Some close-ended funds repurchase the units at NAV-related
prices periodically to provide an exit route to the investors.

3. Interval Funds: These funds combine the features of both open and close-ended funds. They
are open for sale and repurchase at a predetermined period.

4. Growth funds: They normally invest most of their corpus in equities, as their objective is to
provide capital appreciation over the medium-to-long term. Growth schemes are ideal for
investors with risk appepite.

5. Income funds: As the name suggests, the aim of these funds is to provide regular and steady
income to investors. They generally invest their corpus in fixed income securities like bonds,
corporate debentures, and government securities. Income funds are ideal for those looking for
capital stability and regular income.

 6. Balanced funds: The objective of balanced funds is to provide growth along with regular
income. They invest their corpus in both equities and fixed income securities as indicated in the
offer documents. Balanced funds are ideal for those looking for income and moderate growth.

7. Money market funds: These funds strive to provide easy liquidity, preservation of capital and
modest income. MMFs generally invest the corpus in safer short-term instruments like treasury
bills, certificates of deposit, commercial paper and inter-bank call money. Returns on these
schemes hinges on the interest rates prevailing in the market. MMFs are ideal for corporate and
individual investors looking to park funds for short period.

8. Tax saving schemes: Tax saving schemes or equity-linked savings schemes offer tax rebates
to investors under section 88 of the Income Tax Act. They generally have a lock-in period of
three years. They are ideal for investors looking to exploit tax rebates as well as growth in

9. Special schemes: These schemes invest only in the industries specified in the offer document.
Examples are InfoTech funds, FMCG funds, pharma funds, etc. These schemes are meant for
aggressive and weel-informed investors.

 10. Index funds: Index Funds invest their corpus on the specified index such as BSE Sensex,
NSE index, etc. as mentioned in the offer document. They try to mimic the composition of the
index in their portfolio. Not only are the shares, even their weight age replicated. Index funds are
a passive investment strategy and the fund manager has a limited role to play here. The NAVs of
these funds move along with the index they are trying to mimic save for a few points here and
there. This difference is called tracking error.

11. Sector specific schemes: These funds invest only specified sectors like an industry or a
group of industries or various segments like ‘A' Group shares or initial public offerings.

Features of mutual funds in India-

Affordability: Mutual funds allow you to start with small investments. For example, if you want
to buy a portfolio of blue chips of modest size, you should at least have a few lakhs of rupees. A
mutual fund gives you the same portfolio for meagre investment of Rs 1,000-5,000. A mutual
fund can do that because it collects money from many people and it has a large corpus.

Professional management: The major advantage of investing in a mutual fund is that you get a
professional money manager for a small fee. You can leave the investment decisions to him and
only have to monitor the performance of the fund at regular intervals.

Diversification: Considered the essential tool in risk management, mutual funds makes it
possible for even small investors to diversify their portfolio. A mutual fund can effectively
diversify its portfolio because of the large corpus. However, a small investor cannot have a well-
diversified portfolio because it calls for large investment. For example, a modest portfolio of 10
blue-chip stocks calls for a few thousands.

Convenience: Mutual funds offer tailor-made solutions like systematic investment plans and
systematic withdrawal plans to investors, which is very convenient to investors. Investors also do
not have to worry about the investment decisions or they do not have to deal with their brokerage
or depository, etc. for buying or selling of securities. Mutual funds also offer specialized
schemes like retirement plan, children's plan, industry specific schemes, etc. to suit personal
preference of investors. These schemes also help small investors with asset allocation of their
corpus. It also saves a lot of paper work.

Cost effectiveness: A small investor will find that a mutual fund route is a cost effective method.
AMC fee is normally 2.5% and they also save a lot of transaction costs as they get concession
from brokerages. Also, they get the service of a financial professional for a very small fee. If
they were to seek a financial advisor's help directly, they may end up pay more. Also, the size of
the corpus should be large to get the service of investment experts, who offer portfolio

Liquidity: You can liquidate your investments anytime you want. Most mutual funds dispatch
checks for redemption proceeds within two or three working days. You also do not have to pay
any penal interest in most cases. However, some schemes charge an exit load.

Tax breaks: You do not have to pay any taxes on dividends issued by mutual funds. You also
have the advantage of capital gains taxation. Tax-saving schemes and pension schemes give you
the added advantage of benefits under Section 88. Investments up to Rs 10,000 in them qualify
for tax rebate.

Transparency: Mutual funds offer daily NAVs of schemes, which help you to monitor your
investments on a regular basis. They also send quarterly newsletters, which give details of the

portfolio, performance of schemes against various benchmarks, etc. They are also well regulated
and sebi monitors their actions closely.

How is a mutual fund set up?

A mutual fund is set up in the form of a trust, which has sponsor, trustees,asset management
company (AMC) and custodian. The trust is established by a sponsor or more than one sponsor
who is like promoter of a company. The trustees of the mutual fund hold its property for the
benefit of the unitholders. Asset Management Company (AMC) approved by SEBI manages the
funds by making investments in various types of securities. Custodian, who is registered with
SEBI, holds the securities of various schemes of the fund in its custody. The trustees are vested
with the general power of superintendence and direction over AMC. They monitor the
performance and compliance of SEBI Regulations by the mutual fund. SEBI Regulations require
that at least two thirds of the directors of trustee company or board of trustees must be
independent i.e. they should not be associated with the sponsors. Also, 50% of the directors of
AMC must be independent. All mutual funds are required to be registered with SEBI before they
launch any scheme.

Association of Mutual Funds in India (AMFI)

With the increase in mutual fund players in India, a need for mutual fund association in India
was generated to function as a non-profit organization. Association of Mutual Funds in India
(AMFI) was incorporated on 22nd August, 1995.
AMFI is an apex body of all Asset Management Companies (AMC) which has been registered
with SEBI. Till date all the AMCs are that have launched mutual fund schemes are its members.
It functions under the supervision and guidelines of its Board of Directors. Association of Mutual
Funds India has brought down the Indian Mutual Fund Industry to a professional and healthy
market with ethical lines enhancing and maintaining standards. It follows the principle of both
protecting and promoting the interests of mutual funds as well as their unit holders.

List of Mutual Fund Companies in India
Some of the popular firms that deal in mutual funds in India are:

      Reliance Mutual Funds
      HDFC
      ABN Amro
      AIG
      Bank of Baroda
      Canara Bank
      Birla Sun Life
      DSP Merrill Lynch
      DBS Chola Mandalam AMC
      Escorts Mutual

      Deutsche Bank
      ING
      HSBC
      ICICI Prudential
      LIC
      JP Morgan
      Kotak Mahindra
      Lotus India
      JM Financial
      Morgan Stanley
      State Bank of India (SBI)
      Sahara Mutual Funds
      Sundaram BNP Paribas
      Taurus Mutual Funds
      Tata
      UTI
      Standard Chartered

Best Mutual Funds in India

Before knowing about the arguably best mutual funds in India, it is important to know the factors
that actually decide their fate in the market.

In order to get an actual ideal of the best performing mutual funds in the market, one needs to
track its current Net Asset Value or NAV. NAV stands for the latest market value of the holdings
of a fund that brings down the fund's liabilities, which are generally indicated in terms of per
share amount. On a daily basis, most of the funds' NAV is decided. This is determined after the
trade closes on certain financial exchanges. The net asset value of the mutual funds is ascertained
at the end of the trading day. An increase in NAV signifies rise in the holdings of the
shareholder. The Fund Firm will then do the transaction on the shares along with the sales fees.
While open-ended net asset value of the mutual funds is issued daily, the close-ended NAV of
the mutual fund is released on a weekly basis.

 You can calculate net asset value of the mutual fund easily. Track the latest market value of the
net assets of the fund and then subtract that by the number of outstanding shares.

Top mutual funds in India

Here are some of the top mutual funds in India that are listed below :

      Reliance Mutual Fund
      The DSP ML Tiger Fund
      SBI Magnum Contra Fund
      HDFC Equity Fund
      Prudential ICICI Dynamic Fund
      SBI Mutual Fund

Advantage of mutual fund

     Diversification: The best mutual funds design their portfolios so individual investments
      will react differently to the same economic conditions. For example, economic conditions
      like a rise in interest rates may cause certain securities in a diversified portfolio to
      decrease in value. Other securities in the portfolio will respond to the same economic
      conditions by increasing in value. When a portfolio is balanced in this way, the value of
      the overall portfolio should gradually increase over time, even if some securities lose

     Professional Management:Most mutual funds pay topflight professionals to manage
      their investments. These managers decide what securities the fund will buy and sell.

     Regulatory oversight: Mutual funds are subject to many government regulations that
      protect investors from fraud.

     Liquidity: It's easy to get your money out of a mutual fund. Write a check, make a call,
      and you've got the cash.

     Convenience: You can usually buy mutual fund shares by mail, phone, or over the

     Low cost: Mutual fund expenses are often no more than 1.5 percent of your investment.
      Expenses for Index Funds are less than that, because index funds are not actively
      managed. Instead, they automatically buy stock in companies that are listed on a specific

     Transparency

     Flexibility

     Choice of schemes

     Tax benefits

     Well regulated

Disadvantage of mutual fund
     No Guarantees: No investment is risk free. If the entire stock market declines in value,
      the value of mutual fund shares will go down as well, no matter how balanced the
      portfolio. Investors encounter fewer risks when they invest in mutual funds than when
      they buy and sell stocks on their own. However, anyone who invests through a mutual
      fund runs the risk of losing money.

     Fees and commissions: All funds charge administrative fees to cover their day-to-day
      expenses. Some funds also charge sales commissions or "loads" to compensate brokers,

       financial consultants, or financial planners. Even if you don't use a broker or other
       financial adviser, you will pay a sales commission if you buy shares in a Load Fund.

      Taxes: During a typical year, most actively managed mutual funds sell anywhere from 20
       to 70 percent of the securities in their portfolios. If your fund makes a profit on its sales,
       you will pay taxes on the income you receive, even if you reinvest the money you made.

      Management risk: When you invest in a mutual fund, you depend on the fund's manager
       to make the right decisions regarding the fund's portfolio. If the manager does not
       perform as well as you had hoped, you might not make as much money on your
       investment as you expected. Of course, if you invest in Index Funds, you forego
       management risk, because these funds do not employ managers

      Dilution - Because funds have small holdings across different companies, high returns from a
       few investments often don't make much difference on the overall return. Dilution is also the
       result of a successful fund getting too big. When money pours into funds that have had strong
       success, the manager often has trouble finding a good investment for all the new money

How to read a mutual fund table

Mutual fund data is easy to find and easy to read. The most common method of accessing the
information used to be via a mutual fund table in the newspaper, but now this information is
more commonly found online.

Websites provide significantly more data about a given mutual fund than a fund table does.
Yahoo Finance, MSN Money and all of the major mutual fund companies provide robust
websites filled with fund information.

The following basic details are usually provided: fund name, net asset value, trade time (provides
date for last price), price change, previous close price, year-to-date return, net assets, and yield.
With a just a few clicks of the mouse you can also view historical prices, headlines news, fund
holdings etc.

Newspaper fund table

By providing key data points, mutual fund tables give an overview of a mutual fund’s
performance for the past 12 months in relation to its current price. They also provide insight into
hoe the fund’s price per share has changed over the course of most recent week.

However, with the high prices of newsprint, declining readership, and increasing adoption of
technology, many newspapers are cutting back on the space allocated to mutual fund tables. This
is particularly true where smaller and less popular funds are concerned. Going online or calling
the fund company directly may be the only way to get information about these products.

Some facts for the growth of mutual funds in India

    100% growth in the last 6 years.

    Number of foreign AMC's are in the que to enter the Indian markets like Fidelity
     Investments, US based, with over US$1trillion assets under management worldwide.

    Our saving rate is over 23%, highest in the world. Only channelizing these savings in
     mutual funds sector is required.

    We have approximately 29 mutual funds which is much less than US having more than
     800. There is a big scope for expansion.

    'B' and 'C' class cities are growing rapidly. Today most of the mutual funds are
     concentrating on the 'A' class cities. Soon they will find scope in the growing cities.

    Mutual fund can penetrate rurals like the Indian insurance industry with simple and
     limited products.

    SEBI allowing the MF's to launch commodity mutual funds.

    Emphasis on better corporate governance.

    Trying to curb the late trading practices.

    Introduction of Financial Planners who can provide need based advice.


We can now conclude on the above said discussion that the mutual fund pool money from
investors and invest in shares and income earn from the shares distributed between the account
holders according to their share of holdings. Indian mutual fund industry is sound and effective
in case of investor’s point of view.

Mutual funds are funds that pool the money of several investors to invest in equity or debt
markets. Mutual Funds could be Equity funds, Debt funds or balanced funds.

Fund are selected on quantitative parameters like volatility, FAMA Model, risk adjusted returns,
and rolling return coupled with a qualitative analysis of fund performance and investment styles
through regular interactions / due diligence processes with fund managers.

Mutual fund industry has seen a lot of changes in past few years with multinational

companies coming into the country, bringing in their professional expertise in managing funds

worldwide. In the past few months there has been a consolidation phase going on in the mutual

fund industry in India. Now investors have a wide range of Schemes to choose from depending

on their individual profiles.

At the end, we can conclude the investing our precious money in mutual fund is less risky as
compared to invest in other securities but only if we have enough knowledge about various
mutual funds available and their schemes in the market.




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