THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

GROUP LEADER : PRATIK DARUKA WRO 0334208

CONTACT NUMBER: 9321524279

GROUP MEMBERS: PRATIT JHUNJHUNWALA PAWAN SARASWA SNEHA DAGLI NIKITA SHAH WRO 0296404 WRO 0308620 WRO 0340319 WRO 0340320

CENTER NAME: VASAI BRANCH

BATCH TIMING: MORNING BATCH(7.30-11.30) BATCH COMMENCEMENT DATE : 3rd OCTOBER, 2009.

CHANGING TREND OF INVESTMENT PATTERN IN DIFFERENT ASSET CLASSES & EMERGENCE OF MUTUAL FUND INDUSTRY IN INDIA

INTRODUCTION A modest attempt has been made to study and understand the changing trends of investment pattern in different asset classes & emergence of Mutual Fund industry in India. REASON Reason for selecting the topic is that it gives us a great pleasure to understand as well as guide people about Mutual Funds.

INTRODUCTION TO MUTUAL FUNDS The money thus collected is then

invested by fund manager (professional money manager) in capital market instruments such as shares, debentures and other securities.

The income earned through these investments and the capital appreciations realized 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 portfolio at a relatively low cost.

Characteristics of a Mutual Fund

Investors

own the mutual fund

Asset Management Company manages the funds for a fee 1.Fee is expressed as % of assets managed 2. Fee is with in limits specified by SEBI The funds are invested in a portfolio of marketable securities, reflecting the investment objective Value of the portfolio and investors holdings, alters with change in the market value of investments.

ADVANTAGES:
Liquidity Choice Low

Investment Minimums

Regulation Management Additional

Services

REASONS WHY PEOPLE INVEST IN MUTUAL FUNDS ?

People invest in mutual funds for so many different reasons. Over time, mutual funds have proved themselves to be solid investments The chart displays various reasons that compel investors to invest in mutual funds

FACTS FOR THE GROWTH OF MUTUAL FUNDS IN INDIA

100% growth in the last 6 years. Our saving rate is over 23%, highest in the world. We have approximately 29 mutual funds which is much less than US having more than 800. There is a big scope for expansion. Mutual fund can penetrate rural area like the Indian insurance industry with simple and limited products. SEBI allowing the MF's to launch commodity mutual funds.

Structure of Investment Companies(Mutual Funds)

TYPES OF MUTUAL FUNDS SCHEME IN INDIA

Types of schemes

STRUCTURE

INVESTMENT

1.By structure
A. Open-end Schemes Always open for investment No fixed Corpus B. Close-end Schemes Open for a fixed period Fixed Corpus

2. By Investment Objective
Mutual Funds can be broadly classified into
A. Growth Funds: These funds provide capital appreciation over the medium to long term. Such schemes normally invest a majority of their amount in equities B. Income Funds: These funds provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures and Government securities. Income Funds are ideal for capital stability and regular income. C. Balanced Funds: The aim of balanced funds is to provide both growth and regular income. D. Money Market Funds: This fund is to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bank call money.

DRAWBACKS OF MUTUAL FUNDS

Fees and commissions : No investment is risk free. If the

entire stock market declines in value, the value of mutual fund shares will go down as well

No Guarantees :All funds charge administrative fees to cover

their day-to-day expenses.

Taxes :If your fund makes a profit on its sales, you will pay taxes
on the income you receive, even if you reinvest the money you made.

Management risk :When you invest in a mutual fund, you

depend on the fund's manager to make the right decisions regarding the fund's portfolio.

CONCLUSION
If you are looking for an investment product that offers you low risk of capital loss and the potential to earn reasonable returns in the uncertain environment of today, HDFC Multiple Yield Fund might be the right fund for you.

BIBLIOGRAPHY
www.reliancemutual.com www.amfiindia.com www.moneycontrol.com www.valueresearch.com www.geocities.com/kstability/index.html www.writing.colostate.edu www.habsgconsulting.com