A study on risk and

return in mutual fund

companies
 INTRODUCTION
A mutual fund pools money from multiple investors to
invest in a diversified portfolio of stocks, bonds, or other
securities. It's managed by professionals, offering investors
a way to access a diversified investment with relatively low
capital. Returns and risks are shared among the fund's
investors. Also known as an open-end investment company,
to differentiate it from a closed-end investment company.
Mutual funds invest pooled cash of many investors to meet
the fund's stated investment objective. Mutual funds stand
ready to sell and redeem their shares at any time at the
fund's current net asset value: total fund assets divided by
shares outstanding.
In Short, a Mutual fund is a common pool of money in to which investors with
common investment objective place their contributions that are to be invested
in accordance with the stated investment objective of the scheme The
investment
manager would invest the money collected from the investor in to assets
thatare defined/ permitted by the stated objective of the scheme. For example,
an equity fund would invest equity and equity related instruments and a debt
fund would invest in bonds, debentures, gilts etc. Mutual fund is a 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.
All investment is risky and uncertain. An efficient investor is one with the
knowledge of the market who can reduce the risk and maximize the returns.
He can avoid pitfalls and protect his interests. The management of risk and
return requires expertise. Investment is both an art ant and science.
Investment in financial market is not a gamble or speculation that some
investors indulge in, which is risky.
 OBJECTIVE OF THE
TOPIC
1. To get an insight knowledge about the mutual fund.

2. To know the mutual fund performance level in the present

market.
 Types of mutual fund
• EQUITY FUND

Invest in stocks, • DEBT FUND

offering potential for
high returns but also Primarily invest in
higher risk. fixed-income • INDEX FUND
securities, relatively
lower risk compared Mirror the performance
to equity funds. of a specific market index,
offering low costs and
broad market exposure.
 BENEFITS OF MUTUAL
1. DIVERSIFICATION
FUND
2. PROFESSIONAL
MANAGEMENT
Mutual funds spread investments across
Experienced fund managers make
various assets, reducing risk.
investment decisions based on in-depth
research and analysis.

3. LIQUIDITY 4. TAX EFFICIENCY

Investors can easily buy and sell mutual Mutual funds offer tax advantages
fund shares at the current net asset value such as tax- free dividends and capital
(NAV). gains.
 ADVANTAGES &
DISADVANTAGES
DISADVANTAGE
ADVANTAGES
1.Portfolio diversification
S
1.No control over costs
2.Professional management 2.Dilution
3.Liquidity 3.No control
4.Tax benefits 4.Buried cost
5.Choice of schemes 5.Managing a portfolio of
6.Well regulated funds
 Conclusion
The primary motive of the security analysis is to analyze the
security from the point of view of their price, risk and
returns. The security analysis helps to predict the national
economy, because economic activities affect the corporate
profit, investor’s attitudes and expectations as well as
ultimately security prices. It establishes linkage between
activity and stock market, because the overall economic
manifests itself in the behavior of in general.