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hi...gr8 work done..but can u pls consolidate all these notes in 1 zip file..containg varios folders...coz it is bit difficult to surf with slow net connection speed which i use...may be some 1 with high speed net can do this pls....
 
Vishukumar said:
hi frnds..wanted a roject on mutual ...cn any1 help me out wid dis..
mail me if nay1 has it...

thenx
Click to expand...


Mutual Fund Industry in India
Academic Project


Table of Contents
Serial No. Particulars Page No.
1. CONCEPT Mutual Fund Operation Flow Chart 3
2. Organization of a mutual fund. Advantages of mutual funds 4
3. Disadvantages of Investing Mutual Funds
Types of mutual fund schemes 6
4. Types of return 10
5. Terminology
History of the Indian Mutual Fund Industry 11
6. Mutual Fund players in India 13
7. Future of Mutual Funds in India 15
8. Some facts for the growth of mutual funds in India Performance of Mutual Funds in India 16
9. Association of Mutual Funds in India (AMFI).Objectives of Association of Mutual Funds in India 18
10. Drawbacks of Mutual Funds 19
11. Growing Market for Mutual Funds in India 20
12. Reference 21

CONCEPT
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 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 basket of securities at a relatively low cost. The flow chart below describes broadly the working of a mutual fund.
Mutual Fund Operation Flow Chart







ORGANISATION OF A MUTUAL FUND


ADVANTAGES OF MUTUAL FUNDS

 Professional Management-The major advantage of investing in a mutual fund is that you get a professional money manager for a small fee. The basic advantage of funds is that, they are professional managed, by well qualified professional. Investors purchase funds because they do not have the time or the expertise to manage their own portfolio. A mutual fund is considered to be relatively less expensive way to make and monitor their investments

 Diversification- A mutual fund can effectively diversify its portfolio because of the large corpus. Purchasing units in a mutual fund instead of buying individual stocks or bonds, the investors risk is spread out and minimized up to certain extent. The idea behind diversification is to invest in a large number of assets so that a loss in any particular investment is minimized by gains in others.

 Convenient Administration- Mutual funds offer tailor-made solutions like systematic investment plans and systematic withdrawal plans to investors. Investments in mutual fund are considered to be easy, compare to other available instruments in the market, and the minimum investment is small. Most AMC also have automatic purchase plans whereby as little as Rs. 2000, where SIP start with just Rs.50 per month basis.

 Return Potential

 Low Costs- A small investor will find that a mutual fund route is a cost effective method. AMC fee is normally 2.5%. Mutual fund buy and sell large amounts of securities at a time, thus help to reducing transaction costs, and help to bring down the average cost of the unit for their investors.
 Liquidity- You can liquidate your investments anytime you want. Just like an individual stock, mutual fund also allows investors to liquidate their holdings as and when they want.

 Transparency- Mutual funds offer daily NAVs of schemes, which help you to monitor your investments on a regular basis.

 Flexibility- Mutual funds allow you to start with small investments

 Choice of schemes

 Tax benefits

 Well regulated





Disadvantages of Investing Mutual Funds

• Professional Management- Some funds do not perform in the market, as their management is not dynamic enough to explore the available opportunity in the market, thus many investors debate over whether or not the so-called professionals are any better than mutual fund or investor himself, for picking up stocks.

• Costs-The biggest source of AMC income, is generally from the entry & exit load which they charge from an investors, at the time of purchase. The mutual fund industries are thus charging extra cost under layers of jargon

• Dilution-Because funds have small holdings across different companies, high returns from a few investments often don't make much difference on the overall return. Dilution is also the result of a successful fund getting too big. When money pours into funds that have had strong success, the manager often has trouble finding a good investment for all the new money.
• Taxes-When making decisions about your money, fund managers don't consider your personal tax situation. For example, when a fund manager sells a security, a capital-gain tax is triggered, which affects how profitable the individual is from the sale. It might have been more advantageous for the individual to defer the capital gains liability.

TYPES OF MUTUAL FUND SCHEMES

By Structure

• Open Ended Scheme-An open-End fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices. The key feature of open-end schemes is liquidity

• Close Ended Scheme-A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where they are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor.

• Interval Scheme-These funds combine the features of both open and close-ended funds. Interval Schemes are that scheme, which combines the features of open-ended and close-ended schemes. The units may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV related prices.

BY NATURE

• Equity fund-These funds invest a maximum part of their corpus into equities holdings. The structure of the fund may vary different for different schemes and the fund manager’s outlook on different stocks. The Equity Funds are sub-classified depending upon their investment objective, as follows:
a) Diversified Equity Funds
b) Mid-Cap Funds
c) Sector Specific Funds
d) Tax Savings Funds (ELSS)
Equity investments are meant for a longer time horizon, thus Equity funds rank high on the risk-return matrix.

• Debt funds- The objective of these Funds is to invest in debt papers. Government authorities, private companies, banks and financial institutions are some of the major issuers of debt papers. By investing in debt instruments, these funds ensure low risk and provide stable income to the investors. Debt funds are further classified as:

a) Gilt Funds-Invest their corpus in securities issued by Government, popularly known as Government of India debt papers. These Funds carry zero Default risk but are associated with Interest Rate risk. These schemes are safer as they invest in papers backed by Government
b) Income Funds-Invest a major portion into various debt instruments such as bonds, corporate debentures and Government securities.
c) MIPs-Invests maximum of their total corpus in debt instruments while they take minimum exposure in equities. It gets benefit of both equity and debt market. These scheme ranks slightly high on the risk-return matrix when compared with other debt schemes.
d) Short Term Plans (STPs)-Meant for investment horizon for three to six months. These funds primarily invest in short term papers like Certificate of Deposits (CDs) and Commercial Papers (CPs). Some portion of the corpus is also invested in corporate debentures.
e) Liquid Funds-Also known as Money Market Schemes, These funds provides easy liquidity and preservation of capital. These schemes invest in short-term instruments like Treasury Bills, inter-bank call money market, CPs and CDs. These funds are meant for short-term cash management of corporate houses and are meant for an investment horizon of 1day to 3 months. These schemes rank low on risk-return matrix and are considered to be the safest amongst all categories of mutual funds.

• Balanced funds-As the name suggest they, are a mix of both equity and debt funds. They invest in both equities and fixed income securities, which are in line with pre-defined investment objective of the scheme. These schemes aim to provide investors with the best of both the worlds. Equity part provides growth and the debt part provides stability in returns.





By Investment Objective

• Growth Schemes - Growth Schemes are also known as equity schemes. The aim of these schemes is to provide capital appreciation over medium to long term. These schemes normally invest a major part of their fund in equities and are willing to bear short-term decline in value for possible future appreciation. Growth schemes are ideal for investors with risk appetite
• Income Schemes- Income Schemes are also known as debt schemes. The aim of these schemes is to provide regular and steady income to investors. These schemes generally invest in fixed income securities such as bonds and corporate debentures. Capital appreciation in such schemes may be limited. They generally invest their corpus in fixed income securities like bonds, corporate debentures, and government securities.

• Balance Schemes- Balanced Schemes aim to provide both growth and income by periodically distributing a part of the income and capital gains they earn. These schemes invest in both shares and fixed income securities, in the proportion indicated in their offer documents (normally 50:50)The objective of balanced funds is to provide growth along with regular income

• Liquid Scheme-These funds strive to provide easy liquidity, preservation of capital and modest income. Money Market Schemes aim 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

Others

• Tax Saving Fund- Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from time to time. Tax saving schemes or equity-linked savings schemes offer tax rebates to investors under section 88 of the Income Tax Act.
• Sectoral Fund-These are the funds/schemes which invest in the securities of only those sectors or industries as specified in the offer documents. E.g. Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective sectors/industries. While these funds may give higher returns, they are more risky compared to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time. These funds invest only specified sectors like an industry or a group of industries

• Index Fund-Index Funds invest their corpus on the specified index such as BSE Sensex, NSE index, etc. Index schemes attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50. The portfolio of these schemes will consist of only those stocks that constitute the index. The percentage of each stock to the total holding will be identical to the stocks index weightage. And hence, the returns from such schemes would be more or less equivalent to those of the Index.

• Overseas Fund-These funds invest in foreign countries stock markets which are emerging.

Types of returns
There are three ways, where the total returns provided by mutual funds can be enjoyed by investors
• Income is earned from dividends on stocks and interest on bonds. A fund pays out nearly all income it receives over the year to fund owners in the form of a distribution
• If the fund sells securities that have increased in price, the fund has a capital gain. Most funds also pass on these gains to investors in a distribution
• If fund holdings increase in price but are not sold by the fund manager, the fund's shares increase in price. You can then sell your mutual fund shares for a profit. Funds will also usually give you a choice either to receive a check for distributions or to reinvest the earnings and get more shares

Terminology

• Net Asset Value (NAV) - Net Asset Value is the market value of the assets of the scheme minus its liabilities. The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date
• Sale Price- Is the price you pay when you invest in a scheme also called Offer Price. It may include a sales load
• Repurchase Price- Is the price at which a close-ended scheme repurchases its units and it may include a back-end load. This is also called Bid Price
• Redemption Price-Is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity. Such prices are NAV related
• Sales Load -Is a charge collected by a scheme when it sells the units also called, ‘Front-end’ load. Schemes that do not charge a load are called ‘No Load’ schemes
• Repurchase or ‘Back-end’ Load-Is a charge collected by a scheme when it buys back the units from the unit holders

History of the Indian Mutual Fund Industry

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank the. The history of mutual funds in India can be broadly divided into four distinct phases

• First Phase 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. 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 place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6, 700 crores of assets under management

• Second Phase 1987-1993 (Entry of Public Sector Funds)-

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990. At the end of 1993, the mutual fund industry had assets under management of Rs.47, 004 crores
• Third Phase – 1993-2003 (Entry of Private Sector Funds)-

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44, 541 crores of assets under management was way ahead of other mutual funds
• Fourth Phase – since February 2003-
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29, 835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an
Administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76, 000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth

Mutual Fund players in India
A. Bank Sponsored
1. Joint Ventures - Predominantly Indian
a. Canara Robeco Asset Management Company Limited
b. SBI Funds Management Private Limited

2. Others
a. UTI Asset Management Company Ltd
B. Institutions
a. LIC Mutual Fund Asset Management Company Limited
C. Private Sector
1. Indian
a. Benchmark Asset Management Company Pvt. Ltd.
b. DBS Cholamandalam Asset Management Ltd.
c. Deutsche Asset Management (India) Pvt. Ltd.
d. Edelweiss Asset Management Limited
e. Escorts Asset Management Limited
f. IDFC Asset Management Company Private Limited
g. JM Financial Asset Management Private Limited
h. Kotak Mahindra Asset Management Company Limited(KMAMCL)
i. Quantum Asset Management Co. Private Ltd.
j. Reliance Capital Asset Management Ltd.
k. Religare Asset Management Co. Private Ltd.
l. Sahara Asset Management Company Private Limited
m. Tata Asset Management Limited
n. Taurus Asset Management Company Limited

2. Foreign
a. AIG Global Asset Management Company (India) Pvt. Ltd.
b. FIL Fund Management Private Limited
c. Fortis Investment Management (India) Pvt. Ltd.
d. Franklin Templeton Asset Management (India) Private Limited
e. Goldman Sachs Asset Management (India) Private Limited
f. Mirae Asset Global Investments (India) Pvt. Ltd.

3. Joint Ventures - Predominantly Indian
a. Birla Sun Life Asset Management Company Limited
b. DSP Blackrock Investment Managers Limited
c. HDFC Asset Management Company Limited
d. ICICI Prudential Asset Mgmt.Company Limited
e. Religare AEGON Asset Management Company Pvt. Ltd.
f. Sundaram BNP Paribas Asset Management Company Limited
4. Joint Ventures - Predominantly Foreign
a. Baroda Pioneer Asset Management Company Limited
b. Bharti AXA Investment Managers Private Limited
c. HSBC Asset Management (India) Private Ltd.
d. ING Investment Management (India) Pvt. Ltd.
e. JPMorgan Asset Management India Pvt. Ltd.
f. Morgan Stanley Investment Management Pvt.Ltd.
g. Principal Pnb Asset Management Co. Pvt. Ltd.

Future of Mutual Funds in India
Financial experts believe that the future of Mutual Funds in India will be very bright. It has been estimated that by March-end of 2010, the mutual fund industry of India will reach Rs 40,90,000 crore, taking into account the total assets of the Indian commercial banks. The estimation was based on the December 2004 asset value of Rs 1, 50,537 crore. In the coming 10 years the annual composite growth rate is expected to go up by 13.4%. Since the last 5 years, the growth rate was recorded as 9% annually. Based on the current rate of growth, it can be forecasted that the mutual fund assets will be double by 2010.

Aggregate deposits of Scheduled Com Banks in India (Rs.Crore)
Month/Year Mar-98 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Sep-04 4-Dec
Deposits 605410 851593 989141 1131188 1280853 - 1567251 1622579
Change in % over last yr 15 14 13 12 - 18 3
Source – RBI

Mutual Fund AUM’s Growth
Month/Year Mar-98 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Sep-04 4-Dec
MF AUM's 68984 93717 83131 94017 75306 137626 151141 149300
Change in % over last yr 26 13 12 25 45 9 1
Source – AMFI




Some facts for the growth of mutual funds in India
• 100% growth in the last 6 years.
• Number of foreign AMC's are in the que to enter the Indian markets like Fidelity Investments, US based, with over US$1trillion assets under management worldwide.
• Our saving rate is over 23%, highest in the world. Only channelizing these savings in mutual funds sector is required.
• We have approximately 37 mutual funds which are much less than US having more than 800. There is a big scope for expansion.
• 'B' and 'C' class cities are growing rapidly. Today most of the mutual funds are concentrating on the 'A' class cities. Soon they will find scope in the growing cities.
• Mutual fund can penetrate rurals like the Indian insurance industry with simple and limited products.
• SEBI allowing the MF's to launch commodity mutual funds.
• Emphasis on better corporate governance.
• Trying to curb the late trading practices.
• Introduction of Financial Planners who can provide need based advice.
Growing Market for Mutual Funds in India
Indian households have stepped up their exposure to the capital market. The contribution of funds in this asset class has increased. In fact, there has been more than 200 per cent growth in the assets coming to MFs in the last 3 years.
Synopsis
The global mutual fund industry has grown by 185 per cent between 2000 and 2006. In comparison, Indian assets outgrow at a staggering 446 per cent, where US and Europe grew by 158 and 242 per cent respectively. India stands only second-best to Korea with HNI assets worth Rs 12 lakh crores in the Asia-pacific region.

The mutual fund industry has passed through many phases since UTI phase of 1964, public sector phase of 1987, emergence phase of 2003 when international players came to India and finally the new generation phase of 2007 where new players expanded the market. Changing investors profile has initiated many market players to innovate new products matching the investor’s profile. As economy grows at a spectacular rate, there is a huge wealth creating opportunities surfacing everywhere.
The Indian mutual fund industry has been through exponential growth and still at a very nascent stage. We believe that the mutual fund industry has grown in terms of size or choices available, but is still a long distance from being regarded as a mature one. To understand this, one has to look at the global scenario.
• Today the industry stand at $ 24.32 trillion (September 2007; source: ICI), out of which 41 per cent of the assets is in equity. Looking at the continent-wise asset breakdown, America leads by 51 per cent, while Europe is at 35 per cent and Asia-Pacific is at 10 per cent. Investment advisors have played a vital role in instilling investor’s confidence in mutual funds.
• A recent study by Invest India reveals that there are about 32.18 crores paid workers in India. Of this only 53 lakh have an exposure to mutual funds? This is less than 2 per cent of the total workforce. Even more interesting fact is that 77 per cent of them reside in super metros and Tier I cities .Again, about 40 lakh come in the Rs 90,000 – Rs 5 lakh income bracket. The penetration among the less than Rs 90,000 and more than Rs 5 lakh income bracket is very low. The need for the hour is to expand the market boundaries and scope in Tier II and Tier III cities.
• Today’s investor is quite young and unlike the older generation, they follow a contrarian’s approach and buy when the market flips and books profit when it rallies. A booming economy with GDP of 8 per cent and a strong regulatory framework are crucial for the fund industry’s growth.
The need of the investor populace has changed, resulting in a change in asset management styles leading to the design of new and competitively-priced products, implying greater emphasis on higher quality of intermediation. This in itself is both an opportunity and a challenge.
Performance of Mutual Funds in India
Let us start the discussion of the performance of mutual funds in India from the day the concept of mutual fund took birth in India. The year was 1963. Unit Trust of India invited investors or rather to those who believed in savings, to park their money in UTI Mutual Fund.

For 30 years it reached without a single second player. Though the 1988 year saw some new mutual fund companies, but UTI remained in a monopoly position.

The performance of mutual funds in India in the initial phase was not even closer to satisfactory level. People rarely understood, and of course investing was out of question. But yes, some 24 million shareholders were accustomed with guaranteed high returns by the begining of liberalization of the industry in 1992. This good record of UTI became marketing tool for new entrants. The expectations of investors touched the sky in profitability factor. However, people were miles away from the praparedness of risks factor after the liberalization.

The Assets under Management of UTI was Rs. 67bn. by the end of 1987. Let me concentrate about the performance of mutual funds in India through figures. From Rs. 67bn. the Assets under Management rose to Rs. 470 bn. in March 1993 and the figure had a three times higher performance by April 2004. It rose as high as Rs. 1,540bn.

The net asset value (NAV) of mutual funds in India declined when stock prices started falling in the year 1992. Those days, the market regulations did not allow portfolio shifts into alternative investments. There was rather no choice apart from holding the cash or to further continue investing in shares. One more thing to be noted, since only closed-end funds were floated in the market, the investors disinvested by selling at a loss in the secondary market.
The performance of mutual funds in India suffered qualitatively. The 1992 stock market scandal, the losses by disinvestments and of course the lack of transparent rules in the whereabout rocked confidence among the investors. Partly owing to a relatively weak stock market
Performance, mutual funds have not yet recovered, with funds trading at an average discount of 10¬20 percent of their net asset value.

The supervisory authority adopted a set of measures to create a transparent and competitve environment in mutual funds. Some of them were like relaxing investment restrictions into the market, introduction of open-ended funds, and paving the gateway for mutual funds to launch pension schemes.
The measure was taken to make mutual funds the key instrument for long-term saving. The more the variety offered, the quantitative will be investors.

At last to mention, as long as mutual fund companies are performing with lower risks and higher profitability within a short span of time, more and more people will be inclined to invest until and unless they are fully educated with the dos and donts of mutual funds.
Association of Mutual Funds in India (AMFI)
With the increase in mutual fund players in India, a need for mutual fund association in India was generated to function as a non-profit organization. Association of Mutual Funds in India (AMFI) was incorporated on 22nd August, 1995.

AMFI is an apex body of all Asset Management Companies (AMC) which has been registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes are its members. It functions under the supervision and guidelines of its Board of Directors.

Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a professional and healthy market with ethical lines enhancing and maintaining standards. It follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holders.
The objectives of Association of Mutual Funds in India

The Association of Mutual Funds of India works with 37 registered AMCs of the country. It has certain defined objectives which juxtaposes the guidelines of its Board of Directors. The objectives are as follows:
• This mutual fund association of India maintains high professional and ethical standards in all areas of operation of the industry.
• It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in the activities of mutual funds and asset management. The agencies who are by any means connected or involved in the field of capital markets and financial services also involved in this code of conduct of the association.
• AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund industry.
• Association of Mutual Fund of India does represent the Government of India, the Reserve Bank of India and other related bodies on matters relating to the Mutual Fund Industry.
• It develops a team of well qualified and trained Agent distributors. It implements a programme of training and certification for all intermediaries and other engaged in the mutual fund industry.
• AMFI undertakes all India awarness programme for investors’ inorder to promote proper understanding of the concept and working of mutual funds.
• At last but not the least association of mutual fund of India also disseminate informations on Mutual Fund Industry and undertakes studies and research either directly or in association with other bodies.


Drawbacks of Mutual Funds
Mutual funds have their drawbacks and may not be for everyone:
• No Guarantees: 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 matter how balanced the portfolio. Investors encounter fewer risks when they invest in mutual funds than when they buy and sell stocks on their own. However, anyone who invests through a mutual fund runs the risk of losing money.
• Fees and commissions: All funds charge administrative fees to cover their day-to-day expenses. Some funds also charge sales commissions or "loads" to compensate brokers, financial consultants, or financial planners. Even if you don't use a broker or other financial adviser, you will pay a sales commission if you buy shares in a Load Fund.
• Taxes: During a typical year, most actively managed mutual funds sell anywhere from 20 to 70 percent of the securities in their portfolios. 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. If the manager does not perform as well as you had hoped, you might not make as much money on your investment as you expected. Of course, if you invest in Index Funds, you forego management risk, because these funds do not employ managers.
 
hai my friend doing MBA final year project under the topic communication mechanism at TCS. pleas send me any sample project under this toipc with queationnaire
 
hi . thnx a lot for all this useful stuff. great. i am doing a project on talent retention. can u plz provide some help on that? thnx
 
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