Professional Documents
Culture Documents
Mutual Fund
Mutual Fund
Mutual Fund
funds
Over View of Mutual Fund
Ø What is Mutual Fund?
Ø History of Mutual Fund.
Ø Advantages of Mutual Fund.
Ø Drawbacks of Mutual fund.
Ø Types of Mutual Fund.
Ø Fund Structure.
Ø Net Assets Value
Ø Why Measure Fund Performance
Ø Evaluating The AMC
What is Mutual Fund
A mutual fund is a professionally managed type of collective
investment scheme that pools money from many investors and
invests it in stocks, bonds, short-term money market instruments,
and/or other securities.
Operation flow of Mutual Fund
History of Mutual Fund
qFirst phase (1964 to1987)
Unit Trust Of India was established in 1963 by the act of Parliament. It was set up by the RBI and
functioned under the regulatory and administrative control of the RBI.
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 the place of RBI.
qSecond Phase (1987 to 1993)
Entry of the Public Sector Bank and Financial Institution (LIC, GIC, SBI mutual fund, PNB mutual fund)
ü
Fund Structure
Fund Sponsor
Trustees
Depository Agent
Custodian
Ø Fund Sponsor:-
Any person or corporate body that establishes the Fund and registers it with SEBI.
Appoints Custodian and Asset Management Company either directly
or through Trust, in accordance with SEBI regulations.
SEBI regulations also define that a sponsor must contribute at least 40% to the net worth
of the asset management company.
Ø Trustees :-
Created through a document called the Trust Deed that is executed by the Fund Sponsor
and registered with SEBI.
Ø Asset Management Company:-
Acts as an invest manager of the Trust under the Board Supervision and direction of the
Trustees.
Will float and manage the different investment schemes in the name of Trust and in
accordance with SEBI regulations.
Ø Custodian:-
Has the responsibility of physical handling and safe keeping of the securities.
Ø Depository:-
Will hold the dematerialized security holdings of the Mutual Fund.
Ø
Net Assets Value (NAV)
Ø NAV represents a fund's per share market value. This is the price at
which investors buy ("bid price") fund shares from a fund company
and sell them ("redemption price") to a fund company.
Evaluating the AMC
While every fund is exposed to market risks, good funds should at least match
major market indices. An AMC or the fund managers must be evaluated on
the following criteria:-
Why Measure Fund
Performance
vThe Investor Perspective:-
- To make intelligent decisions on whether he should continue with the
investment or not.
- He needs the basic knowledge of fund evaluation to judge the performance of
the fund.
Thanking you….