MUTUAL FUNDS ?
- INDIA
Authors:
Ms. Shalini Goyal Designation: Lecturer College: Delhi College of Technology & Management, Palwal Contact No.
9711844063 E-mail id: [email protected]
Ms. Dauly Bansal Designation: Lecturer College: MKM Group of colleges,Hodal Contact No. 09991748264
E-mail id: [email protected]
SUMMARY
INTRODUCTION
A mutual fund is a professionally managed collection of many businesses' shares. The mutual fund's
earnings (dividends, capital gains or losses) are dispersed to the investors after operational costs are
paid. An open-end mutual fund is a type of capital stock that does not have a fixed number of shares.
HISTORY OF MUTUAL FUNDS
In 1822, Belgium was the first country to develop the modern mutual fund. In the 1920s, mutual funds
were popular in the United States. Following WWII, the sector underwent a period of expansion,
particularly in the 1980s and 1990s. There were 33 mutual funds with a total asset value of Rs. 1,21,805
crores at the end of January 2003. Other mutual funds were well behind the Unit Trust of India, which had
Rs.44,541 crores in assets under administration.
MUTUAL FUND PROSPECTUS
Security businesses were compelled to produce a prospectus after the 1929 stock market disaster. A
prospectus is a legally binding document that contains information about a mutual fund. Short-term
growth is a goal for certain funds, while long-term stability is a goal for others. Although mutual funds
attempt to produce money for its investors, like any other business, their ultimate purpose is to profit. The
prospectus explains how to buy and sell stocks as well as other account-related details.
Every prospectus includes a table that breaks down the various fees and charges. A hypothetical forecast
of how the fees might affect a $10,000 investment over a 10-year period is also included in the
prospectus. Investors should keep in mind that previous performance is not always indicative of future
outcomes.
MUTUAL FUND SHARE CLASSES
Morning Star is a well-respected authority that categorizes most equities into several kinds. Distressed,
Hard Asset, Cyclical, Speculative Growth, Aggressive Growth, Classic Growth, Slow Growth, and High
Yield are the eight types used. Each label refers to a certain set of investing qualities. Morning Star's own
technology and objective financial criteria are used to classify stocks.
PROFESSIONAL MANAGEMENT & RANKING OF MUTUAL FUNDS
Professional management :Professional managers make choices on which firms should be acquired
and sold for mutual funds. Investment possibilities abound and are complicated; fund managers must be
aware of what is available as well as the risks and rewards that might be realized. The cost of purchasing
and selling investments, as well as industry laws and regulations, are all factors to consider during the
investing process.
Ranking :Morningstar ranks funds based on their overall performance as well as their performance
versus their peers. Morningstar uses a one-to-five star rating system, with five being the best. Ratings are
unbiased and based solely on a quantitative analysis of previous performance. The ratings are a valuable
tool for finding funds that merit further investigation, but they should not be interpreted as buy or sell
recommendations.
MUTUAL FUND ANNUAL REPORT
Every year mutual funds send each investor an Annual Report - a list of the fund's financial statements,
as well as explanations from management as to why the fund performed the way it did in the previous
year.
