What is a mutual fund? A mutual fund is a pool of funds collected from multiple investors which invests in assets like stocks and bonds.
The history of mutual funds in India can be broadly divided into four distinct phases: It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. At the end of UTI had Rs.
At the end ofthe mutual fund industry had assets under management of Rs. Also, was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer now merged with Franklin Templeton was the first private sector mutual fund registered in July The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions.
As at the end of Januarythere were 33 mutual funds with total assets of Rs.
The Unit Trust of India with Rs. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations.
As at the end of September,there were 29 funds, which manage assets of Rs. An applicant proposing to sponsor a Mutual fund in India must submit an application in Form A along with a fee of Rs.
The application is examined and once the sponsor satisfies certain conditions such as being in the financial services business and possessing positive net worth for the last five years, having net profit in three out of the last five years and possessing the general P a g e 28 reputation of fairness and integrity in all business transactions, it is required to complete the remaining formalities for setting up a Mutual fund.
Upon satisfying these conditions, the registration certificate is issued subject to the payment of registration fees of Rs. The following factors are important in this process: Consider long-term track record rather than short-term performance.
It is important because long-term track record moderates the effects which unusually good or bad short-term performance can have on a fund's track record. Besides, longer-term track record compensates for the effects of a fund manager's particular investment style.
Evaluate the track record against similar funds. Success in managing a small or in a fund focusing on a particular segment of the market cannot be relied upon as an evidence of anticipated performance in managing a large or a broad based fund.
Discipline in investment approach is an important factor as the pressure to perform can make a fund manager susceptible to have an urge to change tracks in terms of stock selection as well as investment strategy. The objective should be to differentiate investment skill of the fund manager from luck and to identify those funds with the greatest potential of future success.
Planning for long term objectives Many people get overwhelmed by the thought of retirement and they think how they will ever save the huge money that is required to lead a peaceful and happy retired life.
However, the fact is that if we save and invest regularly over a period of time, even a small sum of money can be adequate.
P a g e 29 It is a proven fact that the real power of compounding comes with time. Albert Einstein called compounding "the eighth wonder of the world" because of its amazing abilities.
Essentially, compounding is the idea that one can make money on the money one has already earned. That's why, the earlier one starts saving, the more time money gets to grow.
Through Mutual funds, one can set up an investment programme to build capital for retirement years. Besides, it is an ideal vehicle to practice asset allocation and rebalancing thereby maintaining the right level of risk at all times.
It is important to know that determination and maintaining the right level of risk tolerance can go a long way in ensuring the success of an investment plan.Performance Of course, investors look for strong performance in funds.
VIMSX has a 5-year annualized total return of % and is in the top third among its category peers. While past performance is no guarantee of future results, the Morningstar Return shows how the fund has done in the past in comparison to similar funds in its peer group.
It . Transparency and caninariojana.com funds have clearly-defined investment objectives and strategies, with set investment parameters.
The mutual fund administrator and the US Securities and Exchange Commission (SEC) closely monitors each registered mutual fund to ensure its compliance with its stated investment strategy.
Get a closer look at the prices & performance of Franklin Templeton’s mutual funds. Performance of mutual funds and its comparative analysis. November 26, by. Performance of mutual funds and its comparative analysis. 4 stars based on 82 reviews. caninariojana.com Essay. Equus software ap language and composition free response form b .
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of %, and is in.