Project : Mutual Funds

Name : ROHIT R MATE EMDI : PGDAC 2011/12

Structure of the Presentation

Basics of Mutual Funds Mutual Fund Flow Chart Advantages of Mutual Funds Frequently Used Terms Indian Market Potential Growth

Basics of Mutual Funds

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most-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.

Mutual Fund Flow Chart

Advantages of Mutual Funds

Professional Management Diversification Convenient Administration Return Potential Low Costs Liquidity Transparency Flexibility Tax benefits

Frequently Used Terms

Net Asset Value (NAV) Sale Price Repurchase Price Redemption Price Sales Load

Indian Market
The first introduction of a mutual fund in India occurred in 1963, when the Government of India launched Unit Trust of India (UTI). Until 1987, UTI enjoyed a monopoly in the Indian mutual fund market. This market was made open to private players in 1993, as a result of the historic constitutional amendments brought forward by the then Congress-led government under the existing regime of Liberalization, Privatization and Globalization (LPG). The first private sector fund to operate in India was Kothari Pioneer, which later merged with Franklin Templeton.

Reasons for not investing in Mutual Funds in India

Indian Market

Reasons for investing in Mutual Funds in India

Indian Market

Potential Growth
In the event of a quick economic revival and positive reinforcement of growth drivers identified, KPMG in India is of the view that the Indian mutual fund industry may grow at the rate of 22-25 percent in the period from 2010 to 2015, resulting in AUM of INR 16,000 to18,000 billion in 2015.

Potential Growth
In summary, the Indian mutual fund industry is expected to witness rapid growth in AUM over the next few years. The industry, however, faces the challenge of achieving sustained profitable growth while increasing retail penetration and expanding the reach of mutual funds into rural areas.