Abstract
A Study on Investors Perception of Risk in Mutual Funds – Mutual fund industry has developed rapidly and gained a lot of popularity from the past couple of decade, especially after incorporation of unit Trust of india in 1964. There has concomitantly evolved a rich plausible academic literature consisting of rumurous topics related to mutual funds. One of the most frequently addressed topics in the current literature is Investor’s perception and preferences about various mutual funds schemes and the factors which influences different class of investors to invest in mutual funds. With the background,a survey was conducted among 100 mutual fund investors. On the basis of literature review, revels that safety, past return and liquidity are the most influencing factors in indicating most of the investor’s opinion on mutual fund schemes. Investors achieve important advantages from mutual funds such as expert professional management, reduction in risk, diversified portfolios, and liquidity of investment, tax benefits and economies of scale. The interests of the investors are protected by SEBI.
Individual investors have developed keen interest in the capital market, attaining higher returns and capital gains along with fiscal concessions. Since small investors generally do not have sufficient time, knowledge, experience and resources for directly approaching the capital market, they have to rely on an intermediary which undertakes informed investment decisions and provides the benefits of professional expertise. This is what a mutual fund does. Mutual funds are governed by SEBI. SEBI has the authority to issue guidelines and to supervise and regulate the working of mutual funds through Mutual Funds Regulations, 1993 have been amended from time to time. Mutual funds provide stability arid sustainability to the stock market also. Mutual funds in India provide linkage among various financial institutions operating in the money and capital markets with which the household and corporate sectors are closely linked. They mobilise personal savings and enable small and medium investors to reap benefits of their investments.
Basics of Mutual Funds
Before explaining what is mutual fund, it’s very important to know the area in which mutual funds works, the basic understanding of stocks and bonds. STOCKS Stocks represent shares of ownership in a public company. Examples of public companies include Reliance, ONGC and Infosys. Stocks are considered to be the most common owned investment traded on the market.
Bonds
Bonds are basically the money which you lend to the government or a company, and in return you can receive interest on your invested amount, which is back over predetermined amounts of time.
Bonds are considered to be the most common lending investment traded on the market. 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.
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 realised are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
Diversification
Diversification is nothing but spreading out your money across available or different types of investments. By choosing to diversify respective investment holdings reduces risk tremendously up to certain extent. The most basic level of diversification is to buy multiple stocks rather than just one stock. Mutual funds are set up to buy many stocks.
Types of Mutual Fund Schemes
Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position, risk tolerance and return expectations etc. thus mutual funds has Variety of flavors, Being a collection of many stocks, an investors can go for picking a mutual fund might be easy.
Open – Ended Schemes
An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value (“NAV”) related prices. The key feature of open-end schemes is liquidity.
Close – Ended Schemes
These schemes have a pre-specified maturity period. One can invest directly in the scheme at the time of the initial issue. Depending on the structure of the scheme there are two exit options available to an investor after the initial offer period closes. Investors can transact (buy or sell) the units of the scheme on the stock exchanges where they are listed. The market price at the stock exchanges could vary from the net asset value (NAV) of the scheme on account of demand and supply situation, expectations of unitholder and other market factors.
Alternatively some closeended schemes provide an additional option of selling the units directly to the Mutual Fund through periodic repurchase at the schemes NAV; however one cannot buy units and can only sell units during the liquidity window. SEBI Regulations ensure that at least one of the two exit routes is provided to the investor.
Interval Schemes
Interval Schemes are that scheme, which combines the features of open-ended and close-ended schemes. The units may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV related prices.
Components of a Project Report
A project report varies according to the MBA final year project course at top colleges, depending on the consequences and the requirements of the concerned project. But broadly, a project covers the following components:
- Title page
- Table of contents
- Introduction
- Background of the project
- Project objectives
- Methodology
- Results
- Discussion and Analysis
- Conclusion
- Bibliography or references
- Appendices
Project Report Pages : 80
Can be used in : Finance Final Year Project
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