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7/25/2019 Mutual Funds Industry
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M
UTUAL
FUN
SUBMITTED BY-
SADDAM HUSAIN
MBA 3rd SEM(FINANCE)
ROLL NO-28
Mutual Funds
INDUSTRY
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Mutual Fund OperationFlow hart
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The growth of mutual funds
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First !hase " #$%&'() *nit Trust of +ndia *T+- was established on #$%& by an Act of !arliament. At the end of #$((
*T+ had s.%,)// crores of assets under management.
0econd !hase'#$()'#$$& 1ntry of !ublic 0ectorFunds- marked the entry of non' *T+, public sector mutual funds set up bypublic sector banks and 2ife +nsurance orporation of +ndia 2+- and 3eneral +nsurance
orporation of +ndia 3+-. 04+ Mutual Fund was the first non' *T+ Mutual Fund establishedin 5une #$(). At the end of #$$&, the mutual fund industry had assets under management ofs.6),//6 crores.
Third !hase'#$$&'7//&1ntry of !rivate 0ectorFunds- #$$& was the year in which the first Mutual Fund egulationscame into being, under which all mutual funds, e8cept *T+ were to be registered andgoverned. The erstwhile 9othari !ioneer now merged with Franklin Templeton- was the first
private sector mutual fund registered in 5uly #$$&. As at the end of 5anuary 7//&, there were&& mutual funds with total assets of s. #,7#,(/: crores.
Fourth !hase " since February 7//&+n February 7//&, following the repeal of the *nit Trust of +ndia Act #$%&. *T+
Mutual Fund 2td, sponsored by 04+, !;4, 4O4 and 2+. +t is registered with 014+ andfunctions under the 014+ Mutual Fund egulations
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Regulat!ons
%overned !y SEB $0utual und' 5egulation 667 8ll 0s registered &ith it, constituted as trusts $ under ndian *rusts 8ct,
99:'Ban( operated 0s supervised !y 5B too.
80C registered as Companies registered under Companies 8ct, 6;7.
SEB-
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ADVANTAG! OF M"T"A# F"ND!$
!ortfolio =iversification?
!rofessional Management
eduction@=iversification Of isk
eduction Of Transaction osts?onvenience And Fle8ibility
Ta8 4enefits
hoice of 0chemes
ell egulated?Transparency
2i>uidity
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D%!ADVANTAG! OF M"T"A#F"ND!$
;o ontrol Over osts
;o Tailor'Made !ortfolio
Managing A !ortfolio Of FundsThe isdom Of !rofessional Management
;o ontrol
=ilution
4uried osts
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AMF+ B 014+
AMF+ is a trade body of all the mutual funds in +ndia. +t was incorporated in August #$$: as a non'profit organization to
promote and protect the interests of mutual funds and their unitholders.
=efine and maintain high ethical and professional standards andenhance public awareness of mutual funds.All mutual funds in +ndia are members of the association.AMF+ works through committees and working groups.All mutual funds are re>uired to be registered with 014+ before
they launch any scheme.Asset Management ompany AM- who manages the funds by
making investments in various types of securities have to beapproved by 014+ .
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!WOT Anal&sis of mutual fund%ndustr& in %ndia
Mutual funds are among the financial products thatbenefit from conducting a 0OT analysis. 4y
reviewing their strengths, weaknesses, opportunitiesand threats, an individual investor can be betterinformed on where to invest their money, and bepositioned to shift gears along with the market.
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1A9;100
!oor participation of retail investors
2ack of focus
*nder performance
!oor service conditions=istribution network is confines only to metro cities
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O!!OT*;+T+10
Cuge untapped market in semi'urban and ruralareas.
Cigh level of savings habit among the people
2iberalized business environment.*sing on'line mode of trading systems.
+nvestment opportunities abound in theinternational market.
Failures of non bank financial company operations.
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TC1AT0
+ncreasing competition among the players.
Cigh level of volatility in the stock market.
!ossibility of more stringent regulations by 014+ ,
4+ , AMF+ , etc ., in future.
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!orterEs Five Forces MO=12 OF Mutualfund +ndustry in +ndia
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4argaining !ower of 0uppliers
2arge number of substitute inputs
Cigh competition among suppliers
2ow concentration of suppliers
=iverse distribution channel+nputs have little impact on costs
ritical production inputs are similar
Dolume is critical to suppliers2ow cost of switching suppliers
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+ntensity of 18isting ivalry
3overnment limits competition
2arge industry size
Fast industry growth rate
2ow storage costselatively few competitors
18it barriers are low
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Threat of 0ubstitutes
0ubstitute product is inferior
0ubstantial product differentiation
Cigh cost of switching to substitutes
2imited number of substitutes
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T&, ",ST ANALYSIS
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'oliti(al Anal&sis
In Ind%'1 SEBI (Mutu' Fund) Reu't%*n!1 445 reu'te!
te !tructure */ "utu' /und!6
Mutu' /und! %n Ind%' 're c*n!t%tuted %n te /*r" */ ' 7u#%c
Tru!t cre'ted under Te Ind%'n Tru!t! Act1 8826
Te !t'#%%t */ te *ern"ent 'nd &e*&e /'%t %nt* %t 'ct!
'! 'n %"&*rt'nt return /'ct*r6
Te %"&'ct */ /*re%n %ne!t"ent6
F*rced rene*t%'t%*n */ c*ntr'ct!
A reu%re"ent t't ' "%n%"u" &ercent'e */ !u&er%!*r
&*!%t%*n! #e ed # *c'!.
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!o(io-(ultural anal&sis
The most important factor shaping in todays globaleconomy is the process of globalization.
The increasing share of +ndia and other emerging marketeconomies in world trade.
To fund future needs, To meet contingencies, To maintainsame standard of living after retirement .
0tandard of living of population tends to improve.
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)hallenges ahead**
9%den r'ne */ &r*duct! ,%t '//*rd'#e 'nd c*"&et%t%e!ce"e! t* t'& te "'r.et6
Need! t* c*'#*r'te ,%t *ter !ect*r! */ te ec*n*"!uc '! #'n.%n 'nd teec*""un%c't%*n!6
C*"&'n%e! 're '!* reu%red t* t'.e 'd'nt'e */ ter*,%n *&&*rtun%t %n te c*""*d%t%e! "'r.et6 Furter1 te"utu' /und! c*ud '!* en'#e te !"' %ne!t*r! t*&'rt%c%&'te %n te re' e!t'te #**" tr*u re' e!t'te"utu' /und!6
9%t ' !tr*n reu't*r /r'"e,*r.1 ce'r u%de%ne! 'nd te
t'ent t* #'c. %t u&1 te Ind%'n "utu' /und %ndu!tr %! %n '&*!%t%*n t* c'ter t* te ne, #reed */ %ne!t*r! ,* 're .eent* d%er!%/ te%r r%!.!
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T&pes of risks
Management isk
!urchasing !ower isk
urrency isk
Market isk0ector isk
2i>uidity isk
+nterest ate isk
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