Capsule 3 :- Mutual Funds

Mutual fund

Mutual fund is a combined investment. the group of investors invest in Securities for a short period. UTI AMC is the oldest mutual fund company in India. There is a fund manager to decides the investments of funds. Profit or loss is equally distributed in investors.

Types of Mutual funds

Index fund :- It is a fund for the investors who do not need a direct call for a share.

Diversified scheme:-  This fund is for those who do not want to invest in a special sector.

Open ended and close ended fund :- Close ended funds can not issue a new unit except bonus. One can enter or exit in open ended fund anytime.

Balanced Fund :-  Balanced fund is called hybrid fund. There is a very less rick in these funds.

Growth fund:- Maximum benefit can be obtained by these funds. There is more rick in these funds due to high profit margin.

Value fund:- These funds prefers security. It's aim is to secure invested money.

Mutual fund in India

The first introduction of a mutual fund in India occurred in 1963, when the Government of India launched Unit Trust of India (UTI). Until 1987, UTI enjoyed a monopoly in the Indian mutual fund market. Then a host of other government-controlled Indian financial companies came up with their own funds. These included State Bank of India, Canara Bank, and Punjab National Bank. This market was made open to private players in 1993, as a result of the historic constitutional amendments brought forward by the then Congress-led government under the existing regime of Liberalization, Privatization and Globalization (LPG). The first private sector fund to operate in India was Kothari Pioneer, which later merged with Franklin Templeton. In 1996, SEBI, the regulator of mutual funds in India, formulated the Mutual Fund Regulation which is a comprehensive regulatory framework.Income from MFs could take two forms—dividends and capital gains.