Investment Pattern in Mutual Funds
CHAPTER IV INVESTMENT PATTERN OF INDIAN MUTUAL FUNDS
This chapter analyses the investment patterns of the Ind~anmutual fund industry as a whole in general, the pnvate mutual funds and UTI in particular An attempt is also made in this chapter to compare across the d~fferent mutual funds on the pattern of their deployment of funds. The most Important activity In a mutual fund and operation is management of funds Fund managers acquire sk~lls expertise over a period of time. They need to have knowledge in the areas of working of markets, spectrum of instruments, macro-economic performance, Industry and industry cycles,
historical record of stock market performance, and above all, the money psychology or psychology of the market for ensuring maxlmum possible return to investors. Funds manager makes investment dec~sionsfor the future. The results of the decision are known only at a later date It is very difficult to say with certainty that whether the decision is going to be right or wrong. Therefore, the Intentions and research support, are the key factors in post-decislon performance analysis of investments. Investment decisions, which are to be taken, depend on the objectives of each required for managng each fund. There are variehes of funds available The sk~lls type of fund are different. A manager who successfully manages growth funds. may not be suitable for managing income funds and vice-versa
In assessing the
performance of hnd, what one needs to emphasize is selection of securities and its timing. These are basically dependent on research output. Research, in turn, may relate to economy, industry, company, and markets.
Normally, a growth fund may require 90 per cent or even a llttle over 90 per cent of its funds invested in equity and quasi-equity instruments. Income funds may invest 80 per cent In fixed income yielding instruments, In the c~ of growthcwnincome funds, investment pattern may range between the above two; 50-60 per cent of corpus
This chapter analyses the investment patterns of the Ind~anmutual fund industry as a whole in general, the pnvate mutual funds and UTI in particular An attempt is also made in this chapter to compare across the d~fferent mutual funds on the pattern of their deployment of funds. The most Important activity In a mutual fund and operation is management of funds Fund managers acquire sk~lls expertise over a period of time. They need to have knowledge in the areas of working of markets, spectrum of instruments, macro-economic performance, Industry and industry cycles,
historical record of stock market performance, and above all, the money psychology or psychology of the market for ensuring maxlmum possible return to investors. Funds manager makes investment dec~sionsfor the future. The results of the decision are known only at a later date It is very difficult to say with certainty that whether the decision is going to be right or wrong. Therefore, the Intentions and research support, are the key factors in post-decislon performance analysis of investments. Investment decisions, which are to be taken, depend on the objectives of each required for managng each fund. There are variehes of funds available The sk~lls type of fund are different. A manager who successfully manages growth funds. may not be suitable for managing income funds and vice-versa
In assessing the
performance of hnd, what one needs to emphasize is selection of securities and its timing. These are basically dependent on research output. Research, in turn, may relate to economy, industry, company, and markets.
Normally, a growth fund may require 90 per cent or even a llttle over 90 per cent of its funds invested in equity and quasi-equity instruments. Income funds may invest 80 per cent In fixed income yielding instruments, In the c~ of growthcwnincome funds, investment pattern may range between the above two; 50-60 per cent of corpus