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 invested by the fund manager in different types of securities depending upon the objective of the scheme. These could range from shares to debentures to money market instruments. The income earned through these investments and the capital appreciations realized by the scheme are shared by its unit holders in proportion to the number of units owned by them (pro rata). 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 portfolio at a relatively low cost. Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual Funds. Each Mutual Fund scheme has a defined investment objective and strategy.
Mutual Funds now represent perhaps most appropriate investment opportunity for most investors. As financial markets become more sophisticated and complex, investors need a financial intermediary who provides the required knowledge and professional expertise on successful investing. As the investor always try to maximize the returns and minimize the risk. Mutual fund satisfies these requirements by providing attractive returns with affordable risks.
The basic purpose of the study is to give broad idea on Mutual Funds and analyze various schemes to highlight the diversified investment that Mutual Fund offers to its investors. Through this study one can understand how to invest in Mutual Funds and turn the raw investment into ripen fruits by taking wise decisions, taking the risk factors into account.
The Study covers the basic meaning, concept, structure and the organization of the Mutual Funds. The Study is restricted to explain only the returns provided by the Mutual Funds from various schemes.