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MUTUAL FUNDS IN INDIA EXECUTIVE SUMMARY Investment may be defined as an activity that commits funds in any financial/physical form in the pr esent wi th an expectation of receiving additional return in the future. The expectation brings with it a probability that the quantum of return may vary from a minimum to a maximum. The possibility of variation in the actual return is known as investment risk. Thus every investment involves a return and risk. The investor can choose the investment funds he wants to invest his money, providing the investor an opportunity to have a direct stake in the performance of the financial markets. He can also benefit from attractive tax advantages. A mutual fund is a professionally managed firm of collective investments that collects money from many inv est ors and puts it in stocks, bonds, short -ter m money market instruments, and/or other securities. The fund manager, also known as portfolio manager, trades the fund's underlying securities, realizing capital gains or losses and passing any proceeds to the individual investors. Today, the worldwide value of all mutual funds totals more than $26 trillion in assets. The principal paid are invested in fund/funds of the investor’s choice (depending on the allocation rate) & units are allocated depending on the price of units for the fund/funds. STATEMENT OF PROBLEM: The premiums that are collected are invested in different funds like equity fund, mid-cap fund, debt fund, balanced fund and cash fund. The funds must be allocated such that their IBMR, Bangalore. 1

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