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 Mutual funds are a type of investment that takes
money from many investors and uses it to make
investments based on a stated investment objective.

Each shareholder in the mutual fund participates
proportionally (based upon the number of shares
owned) in the gain or loss of the fund.

 Mutual funds offer investors an affordable
way to diversify their investment portfolios.
 Mutual funds allow investors the opportunity
to have a financial stake in many different
types of investments.
 These investments include: stocks, bonds,
money markets, real estate, commodities,
etc…
 Individually, an investor may be able to own
stock in a few companies, a few bonds, and
have money in a money market account.
Participation in a mutual fund, however,
allows the investor to have much greater
exposure to each of these asset classes.

 Professional Management
 Diversification
 Convenient Administration
 Return Potential
 Low Costs
 Liquidity
 Transparency
 Flexibility
 Choice of schemes
 Tax benefits
 Well regulated

 No control over costs: The investor pays investment
management fees as long as he remains with the fund,
even while the value of his investments are declining. He
also pays for funds distribution charges which he would
not incur in direct investments.
 No tailor-made portfolios: The very high net-worth
individuals or large corporate investors may find this to
be a constraint as they will not be able to build their own
portfolio of shares, bonds and other securities.
 Managing a portfolio of funds: Availability of a large
number of funds can actually mean too much choice for
the investor. So, he may again need advice on how to
select a fund to achieve his objectives.
 Delay in redemption: It takes 3-6 days for redemption of
the units and the money to flow back into the investor’s
account.

 1. Equity Instruments like shares form only a part of the
securities held by mutual funds. Mutual funds also invest in debt
securities which are relatively much safer.

 2. The biggest advantage of Mutual Funds is their ability to
diversify the risk.

 3. Mutual Funds are their in India since 1964. Mutual Funds
market is very evolved in U.S.A and is there for the last 60 years.

 4. Mutual Funds are the best solution for people who want to
manage risks and get good returns.

 5. The truth is as an investor you should always pay attention to
your mutual funds and continuously monitor them. There are
various funds to suit investor needs, both as a long term
investment vehicle or as a very short term cash management
vehicle.

Type of
Mutual Fund
Schemes
Special
Investment
Structure Schemes
Objective

Open Ended Industry Specific
Growth Funds
Funds Schemes
Close Ended Index
Income Funds
Funds Schemes
Sectoral
Interval Funds Balanced Funds
Schemes
Money Market
Funds

 Limited risk: Mutual funds are diversification in action and hence do not rely on the
performance of a single entity.

 Convenience: You can invest directly with a fund house, or through your bank
or financial adviser, or even over the internet.

 Investor protection: A mutual fund in India is registered with SEBI, which also monitor
the operations of the fund to protect your interests.

 Quick access to your money: It's good to know that should you need your money at
short notice, you can usually get it in four working days.

 Transparency: As an investor, you get updates on the value of your units, information
on specific investments made by the mutual fund and the fund manager's strategy and
outlook.

 Low transaction costs: A mutual fund, by sheer scale of its investments is able to carry
out cost-effective brokerage transactions.

 Tax benefits: Over the years, tax policies on mutual funds have been favorable to
investors and continue to be so.

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Mutual fund

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