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Mutual Funds presentation

The document provides an overview of mutual funds, explaining their definition, key features, and types, including equity, debt, and hybrid funds. It emphasizes the importance of mutual funds for wealth creation, diversification, and professional management, along with practical steps for investing. Additionally, it covers concepts such as NAV, expense ratios, and the differences between direct and regular mutual funds.

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13 views14 pages

Mutual Funds presentation

The document provides an overview of mutual funds, explaining their definition, key features, and types, including equity, debt, and hybrid funds. It emphasizes the importance of mutual funds for wealth creation, diversification, and professional management, along with practical steps for investing. Additionally, it covers concepts such as NAV, expense ratios, and the differences between direct and regular mutual funds.

Uploaded by

saranshkumar000000
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Mutual Funds

Presented by:
Bhumika 230929
Pushpa Kc 230932
Bablu Yadav 231281
Mayank Sharma 231282
A mutual fund is a pooled
01 investment vehicle.

Introduction
02
It collects money from multiple
investors. to Mutual
Funds
Funds are professionally
03 managed by AMCs.

Invested in diversified assets


04 like stocks, bonds, etc.

Helps in wealth creation over


05 time.
What is a Mutual Fund?

Definition
A mutual fund is a financial vehicle that pools money from multiple
investors to invest in a diversified portfolio of stocks, bonds, or other
assets. It is managed by professional fund managers who allocate the
fund’s assets to generate returns for investors.

Key Features
Mutual funds provide diversification, professional management, and
liquidity. They cater to different risk appetites and financial goals,
making them accessible for all types of investors.

Why It Matters
Mutual funds are an essential tool for wealth creation, offering a
structured way to invest and build financial security over time.
Types of Mutual Funds

Equity Funds
Invest primarily in stocks and offer high return potential but
come with higher risk. Example: Large-cap funds, Mid-cap
funds.

Debt Funds
Invest in fixed-income securities like bonds and government
securities. Suitable for conservative investors. Example:
Corporate bond funds, Gilt funds.

Hybrid & Index Funds


Hybrid funds invest in both stocks and bonds for balanced
risk, while index funds track market indices like S&P 500 or
Nifty 50.
Why Invest in Mutual Funds?

Diversification
Mutual funds reduce investment risk by diversifying
across multiple asset classes, sectors, and securities.

Professional Management
Experienced fund managers analyze markets and
manage the portfolio efficiently to optimize returns.

Wealth Creation Potential


Long-term investments in mutual funds can lead to
significant capital appreciation and financial security.
How to Invest in Step-by-Step Guide
1. Determine your investment goals and risk
Mutual Funds?
tolerance.
2. Choose between equity, debt, or hybrid funds.
3. Select a fund based on past performance and
expense ratio.
4. Invest through online platforms, banks, or AMCs.
5. Monitor and review your investments regularly.

Investing in mutual funds can be done online via


broker websites, mobile apps, or AMC websites.
Offline methods include visiting banks, financial
institutions, or using distributors.
Who Manages Mutual Funds?

Fund Managers
Mutual funds are managed by professional fund managers who
analyze market trends, assess risks, and make investment
decisions to maximize returns for investors.

Role of Asset Management Companies (AMCs)


AMCs are financial institutions that create and manage mutual
funds. They pool money from investors and allocate it across
different asset classes.

Regulatory Oversight
In most countries, mutual funds are regulated by financial
authorities like SEBI (India), SEC (USA), or FCA (UK) to ensure
transparency and investor protection.
Net Asset Value (NAV)

What is NAV?
Net Asset Value (NAV) is the per-unit price of a mutual fund
scheme. It is calculated as the total value of assets minus
liabilities, divided by the number of outstanding units.

Formula
NAV = (Total Assets - Liabilities) / Total Units Outstanding.

Importance of NAV
NAV helps investors determine the value of their holdings
and is updated daily based on market fluctuations.
Entry Load & Exit Load

Entry Load
An entry load is a fee charged when an investor buys mutual
fund units. It is usually a percentage of the investment
amount but has been abolished in many countries.

Exit Load
An exit load is a fee imposed when an investor redeems
mutual fund units before a specified period. It discourages
premature withdrawals.

Impact on Investment
These charges affect the net investment amount and returns,
so investors should consider funds with lower or no loads.
Expense Ratio

Definition
The expense ratio is the annual fee charged by mutual funds to
cover management, administrative, and operational expenses.
It is expressed as a percentage of total assets under
management (AUM).

Formula
Expense Ratio = (Total Expenses / Total Assets) × 100.

Impact on Returns
A higher expense ratio reduces net returns, so investors should
compare funds with similar strategies to choose cost-effective
options.
SIP vs. SWP

Systematic Investment Plan (SIP)


SIP allows investors to invest a fixed amount regularly in a
mutual fund, enabling disciplined investing and benefiting
from rupee cost averaging.

Systematic Withdrawal Plan (SWP)


SWP enables investors to withdraw a fixed amount periodically
from their mutual fund investments, useful for generating
regular income.

Key Differences
SIP is for accumulating wealth over time, while SWP is used for
systematic withdrawals post-investment, ensuring financial
stability.
Direct vs Regular Mutual Funds

Direct Mutual Funds


Investors buy directly from the AMC without
intermediaries, resulting in lower expense ratios and
higher returns.

Regular Mutual Funds


Purchased through brokers or advisors, who charge
commissions, leading to slightly lower returns compared
to direct funds.

Impact on Returns
Direct funds offer better long-term returns due to lower
costs, making them preferable for informed investors.
Benefits of Investing in Mutual Funds

Diversification
Mutual funds invest in a variety of assets, reducing
overall risk for investors and ensuring a balanced
portfolio.

Liquidity
Most mutual funds allow easy redemption, providing
investors with quick access to their money when needed.

Tax Benefits
Certain mutual funds, like ELSS (Equity Linked Savings
Scheme), offer tax benefits under applicable tax laws.
What have we learned about
mutual funds?

Key Takeaways from


the Presentation

Conclusio Mutual funds are an effective


investment tool for wealth
creation and financial planning.

n
They offer diversification,
professional management, and
various investment options for
different risk appetites.
Understanding factors like NAV,
expense ratio, and fund types
helps investors make informed
decisions.

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