Mutual Fund penetration in Rural India
What are Mutual Funds?
A mutual fund is just the connecting bridge or a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. The mutual fund will have a fund manager who is responsible for investing the gathered money into specific securities (stocks or bonds). When you invest in a mutual fund, you are buying units or portions of the mutual fund and thus on investing becomes a shareholder or unit holder of the fund.
Mutual funds are considered as one of the best available investments as compare to others they are very cost efficient and also easy to invest in, thus by ...view middle of the document...
Systematic Investment Plan (SIP) - Here the investor is given the option of preparing a pre-determined number of post-dated cheques in favour of the fund. The investor is allotted units on a predetermined date specified in the offer document at the applicable NAV.
Systematic Withdrawal Plan (SWP) - As opposed to the Systematic Investment Plan, the Systematic Withdrawal Plan allows the investor the facility to withdraw a pre-determined amount / units from his fund at a pre-determined interval. The investor's units will be redeemed at the applicable NAV as on that day.
There are many other types of investments other than stocks and bonds (including annuities, real estate, and precious metals), but the majority of mutual funds invest in stocks and/or bonds.
MF Companies in India:
1)ABN AMRO Mutual Fund
2)Birla Sun Life Mutual Fund
3)HDFC Mutual Fund
4)HSBC Mutual Fund
5)Prudential ICICI Mutual Fund
6)Sahara Mutual Fund
7)State Bank of India Mutual Fund
8)Tata Mutual Fund
9)Kotak Mahindra Mutual Fund
10)Unit Trust of India Mutual Fund
11)Reliance Mutual Fund
12)Standard Chartered Mutual Fund
13)Franklin Templeton India Mutual Fund
14)Morgan Stanley Mutual Fund India
15)Canbank Mutual Fund
16)LIC Mutual Fund
17)GIC Mutual Fund
Top 10 MFs in 2011:
1)DSPBR Top 100 Equity Reg
3)Franklin India Bluechip
4)Birla Sun Life Frontline Equity
5)HDFC Top 200
7)HDFC Tax Saver
8)Canara Robeco Equity Tax Saver
9)Canara Robeco Income
Advantages of MF:
Safety of Mutual Fund Investment: Safety is a priority for any investor, and investing mutual funds assures that. If a mutual fund business crashes the mutual fund investors get a sum of money that is equivalent to their share of tenure in the mutual fund. On the other hand, the Board of Directors of the mutual fund may select a new investment consultant to administer the funds.
Diversification Is Offered: Diversification is a fundamental principle of investing. It is basically the custom of producing an array of products, investing in an array of collaterals, marketing an array of goods and so on. This prevents the funds from being ruinously affected in case of a collapse or an economic fall.
Mutual Funds Are Resourcefully Handled: Because it is unfeasible for many shareholders to buy individual stocks, mutual fund analysts research and evaluate present and latent asset for their mutual fund.
Transparency: Mutual fund shares are openly accessible (although there may be delays in reporting), ensuring shareholders receive what they disburse.
Assessed Track Records: Investors can trust the mutual fund's proceeds as the company must look after track records for each fund and have them assessed for thoroughness.
Liquidity: By law, every mutual fund must stand ready on any business day to redeem any or all of its...