Mutual funds Meaning Types Equity funds Debt funds Money market funds Balanced or hybrid funds Advantages Professional management Risk diversification Liquidity

1. WELCOME
TO MY
PRESENTATION

2. MUTUAL FUNDS :
oMeaning ,Types and
Advantages of Mutual Funds

3. MEANING OF MUTUAL FUNDS:-
A mutual fund is a pool of money
managed by professional Fund Manager.
It is a trust that collects money from a
number of investors who share a
common investment objective and
invests the same in equities, bonds,
money market instruments and other
securities.

5. TYPES OF MUTUAL FUNDS:
Equity funds
Debt funds
Money market funds
Index funds
Balanced funds
Income funds
Fund of funds
Specialty funds

7. EQUITY FUNDS:-
These are funds that invest in equity
stock / shares of companies.These are
considered high-risk funds but also tend
to provide high returns. Equity funds can
included specialty funds like
infrastructure, fast moving consumer
goods and banking to name a few. They
are linked to the markets and tend to
debt funds.

8. DEBT FUNDS:-
These are funds that invest in debt
instruments Example:- company debentures,
government bonds and other fixed income
assets.They are considered safe investments
and provide fixed returns.These funds do not
deduct tax source so if the earnings from the
investment is more than Rs.10,000 then the
investor is liable to pay the tax on it himself.

9.  MONEY MARKET FUNDS:-
These are funds that invest in liquid
instrument Example:-T-Bills, CP etc.
They are considered safe investments
for those looking park surplus funds for
immediate but moderate returns. Money
markets are also referred to as cash
markets and come with risks in terms of
interest risk, reinvestment risk and
credit risks.

10.  BALANCED OR HYBRID FUNDS:-
These are funds that invest in a mix of asset
classes. In some cases, the proportion of equity
is higher than debt while in others it is the other
way round. Risk and returns are balanced out
this way. An example of a hybrid fund would be
Franklin India Balanced Fund-DP(G) because in
this fund, 65% to 80% of the investment is made
in equities and remaining 20% to 35% is invested
in the debt market.This is so because the debt
markets offer a lower risk than equity market.

12.  PROFESSIONAL MANAGEMENT:-
Investors may not have the time or the
required knowledge and resources to conduct
their research and purchase individual stocks
or bonds. A mutual fund is managed by full-
time, professional money managers who
have the expertise, experience and resources
to actively buy, sell, and monitor
investments.

13. RISK DIVERSIFICATION:-
Buying shares in a mutual fund is an easy
way to diversify your investments across
many securities and asset categories such as
equity, debt and gold, which helps in
spreading the risk – so you won’t have all
your eggs in one basket.This proves to be
beneficial when an underlying security of a
given mutual fund scheme experiences
market headwinds.

14.  LIQUIDITY:-
You can easily redeem (liquidate) units of open
ended mutual fund schemes to meet your financial
needs on any business day (when the stock
markets and / or banks are open), so you have easy
access to your money. Upon redemption, the
redemption amount is credited in your bank
account within one day to 3 – 4 days, depending
upon the type of scheme e.g., in respect of Liquid
Funds and Overnight Funds, the redemption
amount is paid out the next business day.

15.  LOW COST:-
An important advantage of mutual funds is
their low cost. Due to huge economies of
scale, mutual funds schemes have a low
expense ratio. Expense ratio represents the
annual fund operating expenses of a scheme,
expressed as a percentage of the fund’s daily
net assets.

16.  TAX BENEFITS:-
Investment in ELSS up to Rs.
1,50,000 qualifies for tax benefit
under section 80C of the IncomeTax
Act, 1961. Mutual fund investments
when held for a longer term are tax
efficient.

17. THANK YOU