Mutual funds and their investment options

Type :

Research papers

Pages :

42 pages

Format :

.doc

Published date :

05/30/2009

Category :

Economics & finance

Sub category :

Finance

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Summary :

Introduction
Reduction of transaction costs
Convenience and flexibility
A list of frequently used mutual fund terms
History of the Indian mutual fund industry
Regulatory structure of mutual funds
Role of stock exchanges
Asset management company
Classification of mutual fund schemes
Types of mutual funds
A list of investment plans
Services provided by mutual fund companies
Types of distribution channels
The importance of accounting knowledge
Taxation towards mutual funds
A study on mutual fund performance
1. Basis of choosing an appropriate performance benchmark
2. Tracking mutual fund performance
Classification of the investor needs
Analysis and results of the questionnaire
Marketing mutual funds
Suggestions and recommendations
Conclusion
Bibliography

Abstract

A mutual fund is a pool of money, collected from investors, and is invested according to certain investment options. A mutual fund is a trust that pools the savings of a number of investors who share a common financial goal. A mutual fund is created when investors put their money together. It is therefore a pool of the investor's funds. 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.

The most important characteristics of a fund is that the contributors and the beneficiaries of the fund are the same class of people, namely the investors. The term mutual fund means the investors contribute to the pool , and also benefit from the pool . There are no other claimants to the funds. The pool of funds held mutually by investors is the mutual fund .
A mutual funds business is to invest the funds thus collected according to the wishes of the investors who created the pool. Usually , the investors appoint professional investment managers, to manage their funds. The same objective is achieved when professional investment managers create a product and offer it for investment to the investor. This product represents a share in the pool ,and pre states investment objectives. 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.

Investors in the mutual fund industry today have a choice of 39 mutual funds, offering nearly 500 products. Though the categories of product offered can be classified under about a dozen generic heads, competition in the industry has led to innovative alterations to standard products. The most important benefit of product choice is that it enables investors to choose options that suit their return requirements and risk appetite. Investors can combine the options to arrive at their own mutual fund portfolios that fit with their financial planning objectives.