Submitted by:

Lakshya mudgal
(19bban093)
2 • A mutual fund is a financial intermediary which acts as an instrument of
investment.

MEACHANISM OF MUTUAL FUND OPERATIONS:

It collects funds from different investors to form a common pool of investible

funds. This corpus is then invested in a wide variety of investment
opportunities. Professional managers handle the corpus and take different
decisions from time to time. The investment may be diversified to spread risk
and to ensure a good return, i.e., in dividend and capital terms, to the investors.
The investors have to bear a small cost for availing such services.

Ms. Anvi Jain

3 WORKING OF MUTUAL FUNDS
Investors pool their money
with Mutual Fund

Fund Manager invests

Returns are distributed to pooled money in securities
unitholders according to a common
financial goal

Dividend Income and

Capital Appreciation are
Ms. Anvi Jain
generated
4
CHARACTERISTICS:

• Pool of financial resources

• Professionally managed

• Indirect investing

• Not a form of borrowing and lending relationship.

• Representative of Investors

Ms. Anvi Jain

 ADVANTAGES OF
5
INVESTING IN MUTUAL
LIMITATIONS OF INVESTING IN MUTUAL
FUNDS: FUND:

No Direct Choice of Securities

• Professional Management
• Diversification
• Convenient Administration
• Return Potential
Relying on Mutual Funds Manager’s
Performance
High Management Fee and Other Expenses

• Low Costs Lock-in-Period

• Liquidity
• Transparency
• Tax Deduction

Ms. Anvi Jain