Mutual Funds

Mutual Fund companies collect money from investors and invest in share market.
Investing in mutual funds is also subject to market risks but return is good.

Mutual Funds in India

Mutual Fund is a type of collective investment method by which many people pool their
money in a fund and invest in various securities like stock, bonds or cash investments.
Every mutual fund has a fund manager or investment advisor so it is also called as
managed funds. In world’s top stock markets collective investments holds a major share
because of its flexibility. Depends on the objective of the funds like long term growth and
low risk factor or high income growth with high risk factor or low growth rate and stability
of principal, fund manager invests in respective fields on behalf of shareholders. For
individual investors it is very easy type of investment because someone else manage
their funds, take care of accounts and invest money over many different available
securities. Equity

Net Asset Value

This is per share amount of total fund’s value. To calculate the NAV first add current
market values of all assets and divide it by the number of shares. In stocks prices
change in every second but NAV is calculated in a daily basis.

Open Ended Scheme

In open ended scheme any time during the scheme period an investor can enter or exit
the scheme by buying or selling at its present Net Asset Value (NAV).

Close Ended Scheme

In this scheme a fixed number of shares are sold during its initial public offer(IPO) and
later the buying and selling or shares are possible only in secondary market.
Equity Funds

Mutual funds invest in stock market are called equity funds or stock funds. Equity funds
can again divided in to many categories

Growth Funds

In this funds will be invested in companies with high growth potential for a long term
capital appreciation. Growth funds are more volatile to market risks.

Income Funds

Invest in companies with high dividend payouts providing safety and regular income.

Blend Funds

It is a mixture of Growth and Income funds to provide long term capital appreciation and
current income. By risk-wise it is in between growth funds and income funds

Small-Cap, Mid-Cap and Large-Cap Funds

In stock market companies are divided in to many groups according to their market
capitalization like large-cap, mid-cap and small-cap companies. Market Capitalization is
one way of measuring the size of the company and is decided by the number of shares
in the market and value per share. Mutual funds are also categorized like this based on
the share they hold.

Equity Linked Saving Schemes ELSS

This is equity linked saving schemes. It is a kind of diversified mutual fund in which fund
manager invest in varies companies from varies industry so risk factor is low. Also in
India there is a tax benefit in investing ELSS. These funds have a lock in period of three
years but the return is better and plus you will get tax benefits.

There are many other types of mutual funds like money market funds, Leveraged Funds,
Index Funds, Hedge Funds, Sector Funds, Specialized Funds etc
Mutual Fund Companies in India

ABN AMRO Mutual Fund State Bank of India Mutual Fund

Birla Sun Life Mutual Fund Tata Mutual Fund
HDFC Mutual Fund Kotak Mahindra Mutual Fund
HSBC Mutual Fund Prudential ICICI Mutual Fund
Sahara Mutual Fund Unit Trust of India Mutual Fund
Reliance Mutual Fund Standard Chartered Mutual Fund
Franklin Templeton India Mutual Fund Morgan Stanley Mutual Fund India
Canbank Mutual Fund LIC Mutual Fund
GIC Mutual Fund

Looking at all the options of investment up til now it is clear that the Mutual Funds are
better options for investment. The risk associated and the return on investment is also
more than others. Also the participation on the ordinary common man through them is
possible. The benefit of stock markets that is return is enjoyed and investment is also
less. On the basis of this information gathered up til now we can plot a SWOT of Mutual
Funds as follows- ------SWOT ANALYSIS ------

Strength
• Good Returns

• Riskisevenlyshared

• Cansustainanymarket
turbulenceswithinlimits