A REPORT ON

MUTUAL FUNDS

By:

Muskan Chaturvedi

Enrolment No.: 1700091A202

BBA (KPMG) (2017-2020)

Bajaj Capital Ltd., Gurugram

Company Guide:

Mr. Nitin Ambardar

Senior Manager - Training & Development Academy

Bajaj Capital Ltd.

Faculty Guide:

Mrs. Ritu Chhikara

Assistant Professor- Marketing

BML Munjal University

BML Munjal University

13th July 2019
 1

A REPORT ON

MUTUAL FUNDS AND LIFE INSURANCE

By

Muskan Chaturvedi

Enrolment No.: 1700091A202

BBA (KPMG) (2017-2020)

Bajaj Capital Ltd., Gurugram

28th May 2019- 15th July 2019

 2

DECLARATION

I hereby declare that the project report “MUTUAL FUNDS” is my own work to the best of
my knowledge and belief. It contains no material previously published or written by another
person or material which to substantial extent has been accepted for the award of any other
degree, diploma or programme of any other institute, except where due acknowledgement
has been made in text.

Muskan Chaturvedi Date: 13th July 2019

Enrolment No.: 1700091A202
BML Munjal University
 3

CERTIFICATE
(On Company’s Letterhead)

This is to certify that Muskan Chaturvedi having I.D. No. 1700091A202, a student of
programme BBA (KPMG) from institute BML Munjal University has done her summer
internship in Wealth Management Department, at Bajaj Capital Ltd. from 28th May 2019 to
15th July 2019.

This project work entitled “Mutual Funds” was done by Muskan Chaturvedi during her
summer internship.

Company Guide:

Nitin Ambardar
Senior Manager - Training & Development Academy
Bajaj Capital Ltd.
 4

CERTIFICATE

This is to certify that project work entitled “MUTUAL FUNDS”, is a piece of work done by
Muskan Chaturvedi under my guidance and supervision for the partial fulfilment of BBA
(KPMG), a programme offered by BML Munjal University.

To the best of my knowledge and belief the project report:

embodies the work of the candidate himself/herself
has duly been completed
fulfils the requirements of the rules & regulations relating to the summer internship of
the institute.
is up to the standard both in respect to contents and language for being referred to the
examiner

Faculty Guide:

Mrs. Ritu Chhikara

Assistant Professor- Marketing
BML Munjal University
 5

ACKNOWLEDGEMENT

I extend my special gratitude to Mr. Nitin Ambardar, Senior Manager Training and
Development, Bajaj Capital Ltd. (BCL) for inspiring me to take up this project and for letting
me gain corporate experience through this internship that helped me immensely in my
understanding of the macro environment. His valuable guidance and constructive suggestions
at every step of this project work made the project systematic and fruitful.

I would like to thank Mrs. Richa Kulshreshta, Operations, Bajaj Capital Ltd. (BCL) for
providing all the necessary resources and for her advice that helped me in the successful
completion of this project.

I am very grateful to Prof. Vishal Talwar, Dean: School of Management, BML Munjal
University, Gurugram, for giving me an opportunity to have hands on experience of the
corporate world and to carry out this project.

I would also like to thank Dr. Ritu Chhikara, Assistant Professor, School of Management,
BML Munjal University, my faculty mentor, for her guidance without which this project
would not have been possible.

I would also like to acknowledge the guest speakers and my fellow peers whose inputs were
of immense help in preparing the report.

Lastly, I would like to express my gratefulness to the Lord Almighty for seeing me through it
all.
 6

EXECUTIVE SUMMARY

In few years mutual fund has emerged as a tool for ensuring one’s financial well-being.
Mutual funds have not only contributed to the India growth story but have also helped
families tap into the success of Indian industry. As information and awareness is rising more
and more people are enjoying the benefits of investing in mutual funds.

The main reason the number of retail mutual fund investors remains small is that nine in ten
people with incomes in India do not know that mutual funds exist. But once people are aware
of mutual fund investment opportunities, the number who decide to invest in mutual funds
increases to as many as one in five people. The trick for converting a person with no
knowledge of mutual funds to a new mutual fund customer is to understand which of the
potential investors are more likely to buy mutual funds and to use the right arguments in the
sales process that customers will accept as important and relevant to their decision.

This project gave me a great learning experience and at the same time it gave me enough
scope to implement my analytical ability. The report gives an insight about mutual fund and
its various aspects. One can have a brief knowledge about mutual fund and its basics through
the project. It also consists of data and its analysis collected through survey done on 20
people. For the collection of primary data, I made a questionnaire and surveyed 20 people.
 7

Table of Contents
ABBREVIATIONS ........................................................................................................................... 8
INTRODUCTION............................................................................................................................. 9
MUTUAL FUNDS .......................................................................................................................... 10
HISTORY OF MUTUAL FUND INDUSTRY ................................................................................ 12
First Phase: 1964–1987................................................................................................................ 12
Second Phase: 1987–1993 (Entry of Public Sector Funds)............................................................ 12
Third Phase: 1993–2003 (Entry of Private Sector Funds) ............................................................. 12
Fourth Phase – Since February 2003 ............................................................................................ 13
AUM BASE AND GROWTH RELATIVE TO THE GLOBAL INDUSUTRY ............................... 14
AUM to GDP Ratio ..................................................................................................................... 14
TYPES OF MUTUAL FUNDS IN INDIA....................................................................................... 15
By Structure: ............................................................................................................................... 15
By Investment Objective: ............................................................................................................ 15
By Asset Class:............................................................................................................................ 16
INVESTMENT STRATEGIES ....................................................................................................... 18
RISK-RETURN MATRIX .............................................................................................................. 19
BENEFITS OF INVESTING THROUGH A MUTUAL FUND ....................................................... 20
FINDINGS AND KEY LEARNINGS FROM THE SURVEY ......................................................... 21
Findings ...................................................................................................................................... 21
Key learnings .............................................................................................................................. 21
CONCLUSION AND SUGGESTIONS ........................................................................................... 22
REFERENCES................................................................................................................................ 23
GLOSSARY ................................................................................................................................... 24
 8

ABBREVIATIONS

1. SEBI- Securities and Exchange Board of India

2. AMC- Asset Management Companies
3. AMFI- Association of Mutual Funds in India
4. SRO- Self-Regulatory Organisation
5. NAV- Net Asset Value
6. UTI- Unit Trust of India
7. RBI- Reserve Bank of India
8. LIC- Life Insurance Corporation of India
9. GIC- General Insurance Corporation of India
10. PNB- Punjab National Bank
11. BOB- Bank of Baroda
12. CAGR- Compound Annual Growth Rate
13. CD- Certificates of Deposit
14. CP- Commercial Paper
15. T-Bills- Treasury Bills
16. ELSS- Equity Linked Savings Scheme
17. HUF- Hindu Undivided Family
18. RCA- Rupee Cost Averaging
19. NFO- New Fund Offer
 9

INTRODUCTION
The Securities and Exchange Board of India (SEBI) regulations 1993, defines a mutual fund
as “a fund in the form of a trust by a sponsor, to raise money by the trustees through the sale
of units to the public, under one or more schemes, for investing in securities in accordance
with these regulations”. The mutual fund industry in India is one of the emerging industries in
India. Today, the Indian mutual fund industry has 40 players. The number of public sector
players has reduced from 11 to 5. The public sector has gradually receded into the
background, passing on a large chunk of market share to private sector players.

Mutual fund is a trust that pools the savings of a number of investors who share a common
financial goal. This pool of money is invested in accordance with a stated objective. The joint
ownership of the fund is thus “mutual”, i.e. the fund belongs to all investors. For example, an
investor wants to invest ₹1,000 per month by buying the shares of Tata Consultancy Services
(TCS) which is available at ₹2,500 per share. Similarly, there are millions of investors who
would like to invest but have limited funds. So, in order to participate in the equity markets,
mutual funds come as a viable platform for these investors. Asset Management Companies
(AMCs) pool the money of these investors and create a corpus fund. 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 the proportion 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 Association of Mutual Funds in India (AMFI) is the industry body set up to facilitate the
growth of the Indian mutual fund industry. It plays a pro-active role in identifying steps that
need to be taken to protect investors and promote the mutual fund sector. It is noteworthy that
AMFI is not a Self-Regulatory Organisation (SRO) and its recommendations are not binding
on the industry participants. By its very nature, AMFI has an advisor’s or a counsellor’s role
in the mutual fund industry. Its recommendations become mandatory if and only if SEBI
incorporates them into the regulatory framework it stipulates for mutual funds.
 10

MUTUAL FUNDS

A mutual fund is a legal vehicle that enables a collective group of individuals to:

1. Pool their surplus funds and collectively invest in instruments or assets for a common
investment objective.
2. Optimise the knowledge and experience of a fund manager.
3. Benefit from the economies of scale which size enables and is not available on an
individual basis.

An individual as a single investor is likely to have lesser amount of money at disposal than
say, a group of friends put together. Now, let’s assume that this group of individuals is a
novice in investing and so the group turns over the pooled funds to an expert to make their
money work for them. This is what a professional AMC does for mutual funds. The AMC
invests the investors’ money on their behalf into various assets towards a common investment
objective. Hence technically speaking, a mutual fund is an investment vehicle which pools
investors’ money and invests the same for and on behalf of investors, into stocks, bonds,
money market instruments and other assets. The money is received by the AMC is invested in
by a professional manager (commonly known as fund managers). The fund managers are
expected to honour this promise. The SEBI and the Board of Trustees ensure that this actually
happens.

Any change in the value of the investments made into capital market instruments (such as
shares, debentures etc.) is reflected in the Net Asset Value (NAV) of the scheme. NAV is
 11

defined as the market value of the mutual fund scheme's assets net of its liabilities. NAV of a
scheme is calculated by dividing the market value of scheme's assets by the total number of
units issued to the investors.
 12

HISTORY OF MUTUAL FUND INDUSTRY

The mutual fund industry started in 1963 with the formation of the Unit Trust of India (UTI)
which was the initiative of the Government of India and the Reserve Bank of India. The
history of mutual funds in India can be broadly classified into four distinct phases which are
as follows:

First Phase: 1964–1987

• An act of parliament established UTI in 1963. It was set up by the RBI and functioned
under the regulatory and administrative control of the RBI.
• In 1978, UTI was delinked from RBI and the 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. 6700 crores of AUM which is the total market value
of the investments that a person or entity manages on behalf of clients.

Second Phase: 1987–1993 (Entry of Public Sector Funds)

• In 1987, it was the entry of non-UTI, public sector mutual funds setup by public
sector banks and the 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.

Mobilization as %
1992-93 Amount Mobilised AUM of Gross Domestic
Savings
UTI 11,057 38,247 5.2%
Public Sector 1,964 8,757 0.9%
Total 13,021 47,004 6.1%

Third Phase: 1993–2003 (Entry of Private Sector Funds)

• With the entry of the private sector funds in 1993, a new era started in the Indian
mutual fund industry, giving the investors a wider choice of fund families.
• Also, 1993 was the year in which 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 industry now functions under SEBI Regulations, 1996.
• At the end of January 2003, there were 33 mutual funds with total assets of Rs.
1,21,805 crores.
• The UTI with Rs. 44,541crores of AUM was way ahead of other mutual funds.
 13

Fourth Phase – Since February 2003

• In February 2003, following the repeal of the UTI Act 1963, UTI was bifurcated into
two separate entities.
• One is the Specified Undertaking of the UTI with AUM 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 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.
• The AUM have grown at a rapid pace over the past few years at a CAGR of 35% for
the five-year period from 31 March 2005 to 31 March 2009.
• Over the 10-year period from 1999 to 2009 encompassing varied economic cycles, the
industry grew at 22% CAGR. This growth was despite two falls in the AUM the first
being after year 2001 due to dotcom bubble burst and the second in 2008, consequent
to the global economic crisis.
 14

AUM BASE AND GROWTH RELATIVE TO THE GLOBAL

INDUSUTRY
India has been amongst the fastest growing markets for mutual funds since 2004 in the five-
year period from 2004 to 2008 (as of December) the Indian mutual fund industry grew at 29
percent CAGR as against the global average of 4 percent. Over this period, the mutual fund
industry in mature markets like the US and France grew at 4 percent, while some of the
emerging markets viz. China and Brazil exceeded the growth witnessed in the Indian market.

AUM to GDP Ratio

The ratio of AUM to India’s GDP, gradually increased from 6 percent in 2005 to 11 percent
in 2009. Despite this however, this continues to be significantly lower than the ratio in
developed countries, where the AUM accounts for 20-70 percent of the GDP.
 15

TYPES OF MUTUAL FUNDS IN INDIA

By Investment
By Structure By Asset Class
Objective

• Open ended schemes • Growth/Equity • Equity mutual funds

• Close ended schemes oriented schemes • Debt mutual funds
• Interval schemes • Income/Debt oriented • Gold funds
schemes
• Balanced funds
• Money market
funds/Liquid funds
• Equity Linked Savings
Scheme (ELSS)
• Speciality/Sector
funds

By Structure:

1. Open Ended Schemes- Open ended funds are those funds that do not have a fixed
maturity period. An investor can buy and sell the units form the fund at NAV related
prices which are declared on a daily basis. These funds offer high liquidity.
For example, open ended funds offered by ICICI Prudential Mutual Fund are Liquid
Plan Income Plan, Balanced Fund, Growth Fund, etc.

2. Close Ended Schemes- Close ended funds are those funds that raise money from
investors only once. The fund is open for subscription only during a specified period
at the time of launch of the scheme. Therefore, after the offer period, fresh
investments cannot be made into the fund. If the fund is listed on the stock exchange
the units can be traded like stocks.
For example, the close ended fund managed by ICICI Prudential Mutual Fund is
ICICI Premier.

3. Interval schemes- Interval schemes are those schemes which combine 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.
For example, Fixed Maturity Plans (FMPs).

By Investment Objective:

1. Growth/Equity Oriented Schemes- These are highly aggressive schemes that invest
in equities and equity related instruments. With fluctuating share prices, such funds
show volatile performance, even losses. However, short term fluctuations in the
 16

market, generally smoothens out in the long term, thereby offering higher returns at
relatively lower volatility.

2. Income/Debt Oriented Schemes- They invest only in debt instruments and are a
good option for investors averse to idea of taking risk associated with equities.
Therefore, they invest exclusively in fixed-income instruments like bonds, debentures,
Government of India securities and money market instruments such as Certificates of
Deposit (CD), Commercial Paper (CP) and Call Money.

3. Balanced Funds- They are also called hybrid funds. These are a combination of
growth, debt and money market funds. As a result, on the risk-return ladder, they fall
between equity and debt funds. Balanced funds are the ideal mutual funds vehicle for
investors who are looking for a combination of income and moderate growth.

4. Money Market Funds/Liquid Funds- These funds are income funds and their aim is
to provide easy liquidity, preservation of capital and moderate income. These schemes
invest in short term debt instruments such as Treasury Bills (T-Bills), CD, Inter-bank
Call Money, etc. these funds are appropriate for corporate and individual investors as
a means to park their surplus funds for short periods.

5. Equity Linked Savings Scheme (ELSS)- These schemes offer tax benefits under
Section 80 C and have a compulsory lock in period of three years. It allows an
individual or HUF a deduction from total income of up to Rs. 1.5 lacs under Sec 80 C
of Income Tax Act 1961. Thus, if an investor was to invest Rs. 50,000 in an ELSS,
then this amount would be deducted from the total taxable income thereby reducing
his tax burden.

6. Speciality/Sector Funds- These funds invest in securities of a specific industry or

sector of the economy such as healthcare, technology, leisure, utilities or precious
metals. The funds enable investors to diversify holdings among many companies
within an industry, a more conservative approach than investing directly in one
particular company.

By Asset Class:

1. Equity mutual funds- These funds invest maximum part of their corpus into equity
holdings. The structure of the fund and the fund manager’s outlook may vary for
different schemes on different stocks. Equity investments rank high on the risk-return
grid and hence, are ideal for a longer time frame.

2. Debt mutual funds- These funds invest in debt instruments to ensure low risk and
provide a stable income to the investors. Government authorities, private companies,
banks and financial institutions are some of the major issuers of debt papers. Debt
funds rank lower on the risk-return grid and are suitable for shorter investment time
frames.

3. Gold fund- A gold fund is a mutual fund that invests in 99.9% pure gold. This gold
investment is a paper investment and does not attract any making charges that a gold
 17

jewellery would. Gold Funds are a great option for those who want to buy gold for
their kid’s wedding in few years.

Scheme Type Typical Investment Pattern

Time Risk
Objective Equity Debt
Open Close Horizon Profile Others (%)
(%) (%)
Money Short
Yes No Low 0 0-20 80-100
market term
Medium-
Low-
Income Yes Yes long 0 80-100 0-20
medium
term
Long
Growth Yes Yes High 80-100 0-20 0-20
term
Long Medium-
Balanced Yes Yes 0-60 0-40 0-20
term high
Tax Long
Yes Yes High 80-100 80-100 0-20
saving term
 18

INVESTMENT STRATEGIES

Systematic Investment Plan

• Under this a fixed sum is invested each month on afixed date of a month.
Payment is made through post dated cheques or direct debitfacilities. The
investor gets fewer units when the NAV is high and more units when the
NAV is low. This is called as the benefit of Rupee Cost Averaging (RCA).

Systematic Transfer Plan

• Under this an investor invests in debt-oriented fund and give instructions
to transfer a fixed sum, at a fixed interval, to an equity scheme of the
same mutual fund.

Systematic Withdrawal Plan

• Under this if an investor wishes to withdraw from a mutual fund then he
can withdraw a fixed amount each month.
 19

RISK-RETURN MATRIX

All investments whether in shares, debentures or deposits involve risk i.e. the share value
may go down depending upon the performance of the company, the industry, state of capital
markets and the economy. Generally, however, longer the term, lesser will be the risk. While
risk cannot be eliminated, skilful management can minimize risk. Mutual funds help to
reduce risk through diversification and professional management. The experience and
expertise of mutual fund managers in selecting fundamentally sound securities and timing
their purchases and sales help them to build a diversified portfolio that minimize risk and
maximizes returns.

The risk return trade-off indicates that if investor is willing to take higher risk then
correspondingly he can expect higher returns and vice versa if he pertains to lower risk
instruments, which would be satisfied by lower returns.
For example, if an investor opts for bank FD, which provide moderate return with minimal
risk. But as he moves ahead to invest in capital protected funds and the profit-bonds that give
out more return which is slightly higher as compared to the bank deposits, but the risk
involved also increases in the same proportion. Thus, investors choose mutual funds as their
primary means of investing, as it provides professional management, diversification,
convenience and liquidity. This doesn’t mean mutual fund investments are risk free. This is
because the money that is pooled in are not invested only in debts funds which are less risky
but are also invested in the stock markets which involves a higher risk but can expect higher
returns.
 20

BENEFITS OF INVESTING THROUGH A MUTUAL FUND

1. Professional investment management- Mutual funds hire full-time, high-level

investment professionals. Funds can afford to do so as they manage large pools of money.
The managers have real-time access to crucial market information and are able to execute
trades on the largest and most cost-effective scale.

2. Diversification- Mutual funds invest in a broad range of securities. This limits

investment risk by reducing the effect of a possible decline in the value of any one
security. Mutual fund unit-holders can benefit from diversification techniques usually
available only to investors wealthy enough to buy significant positions in a wide variety
of securities.

3. Low Cost- A mutual fund lets you participate in a diversified portfolio for as little as
Rs.5,000/-, and sometimes less. And with a no-load fund, you pay little or no sales
charges to own them.

4. Convenience and Flexibility- You own just one security rather than many yet enjoy the
benefits of a diversified portfolio and a wide range of services. Fund managers decide
what securities to trade, collect the interest payments and see that your dividends on
portfolio securities are received and your rights exercised.

5. Personal Service- One call puts you in touch with a specialist who can provide you with
information you can use to make your own investment choices. They will provide you
personal assistance in buying and selling your fund units, provide fund information and
answer questions about your account status.

6. Liquidity- In open-ended schemes, you can get your money back promptly at net asset
value related prices from the mutual fund itself.

7. Transparency- You get regular information on the value of your investment in addition
to disclosure on the specific investments made by the mutual fund scheme.
 21

FINDINGS AND KEY LEARNINGS FROM THE SURVEY

Findings

We were asked to conduct a financial literacy survey campaign as part of our internship
training programme which was indeed an enriching experience. By meeting people from
various backgrounds, it helped me to increase community awareness about the importance of
financial literacy and demonstrate positive change in participants’ financial behaviour.

I was able to achieve a decent number of 20 contributions. I went to the Ambience Mall,
Gurugram. Over there, I interviewed the managers of the shops and the local people in the
mall. There were some rejections that I had to face but mostly the surveys went well, and I
was able to collect a decent number of 50 surveys that day which was divided among my
friends and me. Later, I interviewed people in my society and my family members.

The strategy that I adopted towards the task assigned to me was to reach out to as many
people as possible and gather their responses. This required some courage and confidence as I
had to approach strangers and get to know about their financial literacy. Thus, I had to be
patient and calm with everyone and answer their queries in a polite and convincing tone. The
attire also played a major role. I was dressed smartly and conversed well with the people and
thus they were ready to hear me out and helped me with the survey. I also told them that one
should start investing early to gain higher returns in the futures.

One of the challenges that I faced was that some people did not have the time to help me out
with the survey. Some people had not invested anywhere because their salaries were very
low, and they could not save up enough money to invest anywhere. However, with this group
of people, I tried to make them understand about SIP’s and that they could start by investing a
very minimal amount of Rs. 500 and then gradually increase the amount with the increase in
their salaries. Lastly, some people were unaware about mutual funds and I had to enlighten
them about it.

Key learnings

1. People in India trust the banks and go their if they have to take any decisions related to
investing.
2. Almost all the people invest in a life insurance.
3. The fixed deposits in the banks is something which is done by everyone as it guarantees
assured return.
4. Some people do not have a habit of saving a part of their salaries and thus do not invest
anywhere.
5. One must have their financial objectives clear and work accordingly to achieve that.
 22

CONCLUSION AND SUGGESTIONS

The mutual fund returns depend highly on the investors’ risk appetite i.e. if he is willing to
take high risk (by investing in the equity funds), he might get returns of about 15%-23% as
compared to pure debt funds which will give him an investor a return of about 7%-9% as they
are of low risk.

I believe an investor should make his portfolio based on the risk he is willing to take. A risk
averse investor should have a mix of debt and equity with investments in debt funds
comprising 50%-60% of the total portfolio. Such investors invest in equity funds with low
risk which comprise of mainly large cap stocks. On the other hand, a risk hungry investor
may invest more than 75% of his portfolio in equity funds, majority of which can be invested
in small-cap and mid-cap stocks.

Usually individual investors who are new to investing prefer to invest in New Fund Offers
(NFO) rather than seeing the performance of mutual fund scheme. This can turn out to be a
huge mistake for the investor if the fund does not perform well. During a new fund offer, the
investors do not have a chart of the past returns of the scheme. Thus, it is risky to invest this
way and one should always seek advice of fund managers while investing.
 23

REFERENCES

1. https://www.slideshare.net/adityakashyap17/project-on-mutual-funds-36105663
2. https://issuu.com/sanjaykumarguptaa/docs/name2c29e4
3. https://www.scribd.com/doc/13246827/PROJECT-ON-MUTUAL-FUND-AKHILESH-
MISHRA
4. https://www.scribd.com/doc/36097230/Mutual-Funds-Complete-Project-Report
5. http://www.yourarticlelibrary.com/mutual-funds/mutual-funds-in-india-project-
report/85102
6. https://www.indiastudychannel.com/projects/666-a-study-on-mutual-funds-in-india.aspx
7. http://www.garph.co.uk/IJARMSS/Mar2016/22.pdf
8. https://economictimes.indiatimes.com/definition/interval-schemes
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ELSS?utm_source=GoogleSearch&utm_medium=CPC&utm_content=TypesofFunds&ut
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4wIVg4RwCh2YJQj4EAAYASAAEgIdFvD_BwE
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eQQ4dUDCAo&uact=5
 24

GLOSSARY

1. Investment Adviser- Generally, a person or entity who receives compensation for giving
individually tailored advice to a specific person on investing in stocks, bonds, or mutual
funds. Some investment advisers also manage portfolios of securities, including mutual
funds.
2. Mutual Fund- The common name for an open-end investment company. Like other
types of investment companies, mutual funds pool money from many investors and invest
the money in stocks, bonds, short-term money-market instruments, or other securities.
Mutual funds issue redeemable shares that investors purchase directly from the fund (or
through a broker for the fund) instead of purchasing from investors on a secondary
market.
3. NAV (Net Asset Value)- The value of the fund's assets minus its liabilities. To calculate
the NAV per share, simply subtract the fund's liabilities from its assets and then divide
the result by the number of shares outstanding.
4. Portfolio- An individual's or entity's combined holdings of stocks, bonds, or other
securities and assets.
5. Profile- Summarizes key information about a mutual fund's costs, investment objectives,
risks, and performance. Although every mutual fund has a prospectus, not every mutual
fund has a profile.
6. Sales Charge (or "Load")- The amount that investors pay when they purchase (front-
end load) or redeem (back-end load) shares in a mutual fund, similar to a commission.
7. Unit Investment Trust (UIT)- A type of investment company that typically makes a
one-time "public offering" of only a specific, fixed number of units. UITs do not actively
trade their investment portfolios.