There are various investment avenues prevail in the world which gives the opportunity to create better portfolio that suitable for investment objectives. In the investment world, generally people are different in the abilities to take the risk. The investment in stocks bears a higher amount of risk which is main reason for formation of mutual funds and also the mutual funds are gives a professionally managed portfolio to the investor. This project has the objective to assist investor of stocks and the mutual funds. This project has been done in the HDFC Mutual Fund, Madurai.
INTRODUCTION TO MUTUAL FUND:
A mutual fund is a trust that pools the savings of a number of investors who share a common financial goal. 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 appreciation realized is shared by its unit holder in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as if offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow chart below describes broadly the working of mutual fund:
Figure 1.1: MUTUAL FUND OPERATION FLOW CHART
Structure of the mutual fund
There are many entities involved in the mutual fund. This is what makes it safer than other investment avenue. Everyone is accountable for their part in the fund structure
They are like the promoters of a company
Asset Management Company (AMC):
AMC are approved by SEBI it manages the funds by making investment in various types of investment or securities.
They hold the Mutual funds property for the benefit of unit holders. They are the independent authority set up under the aegis of SEBI.
| | |Custodian: | |Registered with SEBI, it holds the securities of various scheme of the fund in its custody | |Transfer agent: | |They also known as registers, transfer the units to the unit holders account | |Distributors / agent: | |Sell unit on behalf of fund and are generally appointed by the AMU | | | | | | | | | | | | | |...