EXECUTIVE

SUMMARY

EXECUTIVE SUMMARY

In the early days, savings were essentially diverted to the banks, post offices, national savings schemes, etc, as these instruments were considered safe and sound instead they had low return. There were no other options available which were safe, as safety was of primary concern to the investor. With the increase in salaries and surplus fund available in the hands of the people, the risk appetite of the people also underwent a sea change. People started looking for better options to invest their surplus fund even if it meant taking little risk. The urgency with which returns are expected led to people flocking the stocks market even without understanding the basics of such investment. The results were catastrophic with two stock scams destroying the hard earned savings of the people and shaking the confidence in the institution of stock market. This led to the development of the new concept of wealth management in India.

In the early stages, mutual funds were not treated as an investment option. Some of the funds which were in existence did not have the required clientele base and couldn't showcase their capabilities. However, with the advancement of the concept of wealth management, mutual fund has become an important investment option for the people.

The mutual fund industry in India started in 1963 with the formation of Unit trust of India, at the initiative of the reserve bank and the government of India. The main objective then was to attract the small investors and introduce them to market investments. Mutual funds have become extremely popular over the last 20 years. What was once just another obscure financial instrument is now a part of our daily lives. More than 80 million people, or one half of the households in America, invest in mutual funds. That means that, in the United States alone, trillions of dollars are invested in Mutual funds.

Originally, mutual funds were heralded as a way for the little guy to get a piece of the market. Instead of spending all your free time buried in the financial pages of the Wall Street Journal, all you had to do was buy a mutual fund and you'd be set on your way to financial freedom. As you might have guessed, it's not that easy. Mutual funds are an excellent idea in theory, but, in reality, they haven't always delivered. Not all mutual funds are created equal, and investing in mutual's isn't as easy as throwing your money at the first salesperson who solicits your business.

Reliance Capital Asset Management Limited (RCAM), a company registered under the Companies Act, 1956 was appointed to act as the Investment Manager of Reliance Mutual Fund. Reliance Capital Asset Management Limited (RCAM) was approved as the Asset Management Company for the Mutual Fund by SEBI vides their letter no IIMARP/1264/95 dated June 30, 1995. The net worth of the Asset Management Company as on March 31, 2008 is Rs 709.39 crores. Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management Limited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-up capital of RCAM, the balance paid up capital being held by minority shareholders.

The major objective of the report is to understand and appreciate the role of asset Management Company in wealth management function with reference to mutual funds.

This report also gives us the insight picture of Reliance top fund and the top five AMC which is doing better in that fund. The debt funds of these AMC are selected and compared on the basis on their performance, risk and volatility, snapshot ,investment details, NAV'S, return, and the sectors into which the investment has been made. The fund's returns are compared with their indices and category averages to see if they are performing better than indices. In order to measure their volatility, measures such as Standard Deviation, Sharpe ratio,Treynors ratio,Jensons ratio,Alpha,Beta ,have been adopted.

Finally, the findings and recommendations and relative conclusions have been mentioned which tells us about the performance, and standard of the AMC company which will help them out in the near future.

CHAPTER -1

INTRODUCTION

INTRODUCTION

Internship is one of the phases of B- school life which gives a flavor of the corporate world. The program normally known as Student Internship Program (SIP) opened door for me to enter into the corporate world in Reliance Mutual Fund. I was fortunate to be a part of this company as it has a brand name and even in terms of business Reliance Mutual Fund heads the first rank. So it was a great feeling to work and contribute in number one AMC.

Our company work was divided into three teams. The corporate team, banking and retail team .I was interning at the corporate team which mainly specializes in debt funds. As in corporate the investors don't require any suggestions to invest in equity funds so our main job was to plan the portfolio for them in debt funds. Our suggestions were of prime importance to them. Studying for the debt funds made the task very interesting and challenging. Every day with new ideas, the work became enjoying.

The project of internship was "Comparative Analysis and Performance Evaluation of various Mutual Funds in different AMC. The time period to complete this task was two months from 15th May2009 to 15th July 2009.

I got lots of benefits being in this company and in this industry sector. I was totally unaware of the role of debt fund in the market and the importance of it, so by being there I came to know the significant role of debt market which goes hand to hand with equity funds also got an idea how the portfolio is being managed by the fund manager which may be helpful to the common man. The most important part was the risk and returns, regards to the funds. The best things about the debt funds are that it is made in such a way that the risk associated with it is very less.

The topic what I have chosen is all about the comparison of Reliance debt fund with the other AMC FUNDS. These funds are chosen on the basis of high return and rankings. The performance evaluation is taken into consideration in order to show that which fund in which sector is doing well .So in order to do analysis many statistical tools help was taken which were fruitful to give the answer.

Overall it was a great learning experience working at "Reliance Assets Management Limited".

CHAPTER -2

RESEARCH

DESIGN

2.1 TITLE OF THE PROJECT

The project is entitled "Comparative Analysis and Performance Evaluation of Various Mutual Funds in the AMC Company "

2.2 NEED/RELEVENCE OF THE STUDY

The purpose of study is to analyze and figure out the portfolio of the funds completely in order to know how the portfolio is constructed, what is the proportion of assets allocation, how does the fund stands in comparison with the other funds of different AMC .There is one more need to study, and that is to find out that which fund is doing best irrespective of the return it is generating.

2.3 OBJECTIVES OF THE STUDY

Mutual fund industry today, with about 34 players and more than five hundred schemes, is one of the most preferred investment avenues in India. However with a plethora of schemes to choose from, the retail investors faces problem in selecting funds. Factors such as investment strategy and management style are qualitative, but the funds records are important indicator too.

For any economy to grow it is necessary that savings of the masses are converted into investments. Mutual fund is one of the tools which allow amateur person to invest because the funds are managed by experienced fund managers. It has been predicted that if the investment becomes 77% of income in various avenues then only we would be able to maintain our GDP growth rate of 8-10%.

Here the objective of our study is to compare various reliance mutual funds schemes with the other AMC .To make the report more detailed the report also contains an extensive details on schemes from other fund houses like HDFC, Kotak, Birla,Tata, UTI,DWS ,etc.

The overall objective of the project is:-

* Gain fast trends about the characteristics of mutual fund industry.

* Get knowledge about the different AMC companies.

* Get knowledge about the debt funds.

* To evaluate and assess the popular schemes of reliance via its competitor.

* To assess investors preference towards Reliance mutual fund.

* To technically compute and analyze the performance of funds with each other.

* Observing the similarity in terms of assets allocation among the fund taken.

2.4 SOURCE OF DATA COLLECTION

There are two main source of collecting data. One is primary and the other is secondary data.

The primary sources of data were

* Open ended interaction with clients.

* Discussions with managers ,heads,

* Also interacting with other intermediaries.

The data used for analysis was mainly secondary in nature and were collected from the following sources.

* The factsheets of the Assets Managements Companies.

* The websites of the Assets Managements Companies.

* The total AUM and NAV were sourced from the website of the Association of Mutual Funds of India.

* Much information has been taken out by the magazines, books and mutual funds workbook.

2.5 SAMPLE DESIGN

First of all the top five funds were taken of Reliance in consulting with the relationship manager. Then on the basis of return the other AMC were brought into picture. The fund with the highest return was ranked first and so on.

2.6 STATICAL TOOLS

* In order to compare the funds descriptive analysis is been done.

* Systematic sampling was followed since the performance of the funds was easily traceable through company websites and monthly fact sheets.

* Tools like Sharpe ratio,Treynors ratio,Jensons ratio is been used to get the findings.

* The use of tabulations like mean has also been taken into consideration.

* The use of pie charts has been shown to show the clear picture of the funds.

2.7 Performance Evaluation Measures

Return alone should not be considered as the basis of measurement of the performance of a mutual fund scheme, it should also include the risk taken by the fund manager because different funds will have different levels of risk attached to them it. These fluctuations in the returns generated by a fund are resultant of two guiding forces. First, general market fluctuations, which affect all the securities, present in the market, called market risk or systematic risk and second, fluctuations due to specific securities present in the portfolio of the fund, called unsystematic risk. The Total Risk of a given fund is sum of these two and is measured in terms of Standard deviation of returns of the fund. Systematic risk, on the other hand, is measured in terms of Beta, which represents fluctuations in the NAV of the fund vis-à-vis market. The more responsive the NAV of a mutual fund is to the changes in the market; higher will be its beta. Beta is calculated by relating the returns on a mutual fund with the returns in the market. While unsystematic risk can be diversified through investments in a number of instruments, systematic risk cannot. By using the risk return relationship, we try to assess the competitive strength of the mutual funds vis-à-vis one another in a better way.

In order to determine the risk-adjusted returns of investment portfolios, several eminent authors have worked since 1960s to develop composite performance indices to evaluate a portfolio by comparing alternative portfolios within a particular risk class. The most important and widely used measures of performance are:

Ø The Trey nor Measure

Ø The Sharpe Measure

Ø Jenson Model

The Treynor Measure

Developed by Jack Treynor, this performance measure evaluates funds on the basis of Treynor's Index. This Index is a ratio of return generated by the fund over and above risk free rate of return (generally taken to be the return on securities backed by the government, as there is no credit risk associated), during a given period and systematic risk associated with it (beta). Symbolically, it can be represented as:

Treynor's Index (Ti) = (Ri - Rf)/Bi.

Where, Ri represents Avg return on fund, Rf is risk free rate of return and Bi is beta of the fund.

All risk-averse investors would like to maximize this value. While a high and positive Treynor's Index shows a superior risk-adjusted performance of a fund, a low and negative Treynor's Index is an indication of unfavourable performance.

The Sharpe Measure

In this model, performance of a fund is evaluated on the basis of Sharpe Ratio, which is a ratio of returns generated by the fund over and above risk free rate of return and the total risk associated with it. According to Sharpe, it is the total risk of the fund that the investors are concerned about. So, the model evaluates funds on the basis of reward per unit of total risk. Symbolically, it can be written as:

Sharpe Index (Si) = (Ri - Rf)/Si

Where, Si is standard deviation of the fund.

While a high and positive Sharpe Ratio shows a superior risk-adjusted performance of a fund, a low and negative Sharpe Ratio is an indication of unfavourable performance.

Rankings based on total risk (Sharpe measure) and systematic risk (Treynor measure) should be identical for a well-diversified portfolio, as the total risk is reduced to systematic risk. Therefore, a poorly diversified fund that ranks higher on Treynor measure, compared with another fund that is highly diversified, will rank lower on Sharpe Measure.

Jenson Model

Jenson's model proposes another risk adjusted performance measure. This measure was developed by Michael Jenson and is sometimes referred to as the Differential Return Method. This measure involves evaluation of the returns that the fund has generated vs. the returns actually expected out of the fund given the level of its systematic risk. The surplus between the two returns is called Alpha, which measures the performance of a fund compared with the actual returns over the period. Required return of a fund at a given level of risk (Bi) can be calculated as:

Ri = Rf + Bi (Rm - Rf)

Where, Rm is average market return during the given period. After calculating it, alpha can be obtained by subtracting required return from the actual return of the fund.

Higher alpha represents superior performance of the fund and vice versa. Limitation of this model is that it considers only systematic risk not the entire risk associated with the fund and an ordinary investor cannot mitigate unsystematic risk, as his knowledge of market is primitive.

The Risk-free Proxy

The study has used the on 91-day Treasury bills (T-bills) as a surrogate for the risk-free rate of return. Due care has been taken to take identical time periods and equal sample observations for each of the funds. The data have been adjusted for corporate actions to make the data comparable overtime. NAV data have been collected from Value Research online, While Treasury bill data has been collected from RBI site.

2.8 CHAPTERIZATION

The report work is completely divided into major five chapters.

* Chapter one deals with the introduction of internship, about organization working in, possible time period to complete and the benefits from the internship.

* Chapter two tells us about the research design,

* Chapter three tells us about the industry and company analysis.

* Chapter four describes all about the data analysis and interpretation part. This is one of the most important parts of the study.

* Last chapter five will describe about the major findings, recommendations and conclusions.

2.9 LIMITATIONS OF THE STUDY

The study was restricted due to non availability of certain data as Crisil index and % change for this index.

* In some fund categories, the data for the top five funds was unavailable and hence, others funds were taken.

* Most of the funds taken were on the downfall scene because of the recession and the bad market condition.

* The fund identified as best may not hold good for long period because performance of funds can change anytime according to the changes in the market with respect to the portfolio.

* The study is restricted to small time period of only one year.

* The data used are for the study are secondary data and thus subjected to the limitations of the secondary data.

* The study is restricted to few funds and few companies only.

* The total time period is very limited to study the mutual fund industry and come to a final conclusion.

CHAPTER-3

INDUSTRY

AND

COMPANY ANALYSIS

INTRODUCTION

OVERVIEW OF MUTUAL FUND INDUSTRY

3.1 INTRODUCTION TO MUTUAL FUNDS

Mutual fund is a trust that pools money from a group of investors (sharing common financial goals) and invest the money thus collected into asset classes that match the stated investment objectives of the scheme. Since the stated investment objectives of a mutual fund scheme generally form the basis for an investor's decision to contribute money to the pool, a mutual fund can not deviate from its stated objectives at any point of time.

Every Mutual Fund is managed by a fund manager, who using his investment management skills and necessary research works ensures much better return than what an investor can manage on his own. The capital appreciation and other incomes earned from these investments are passed on to the investors (also known as unit holders) in proportion of the number of units they own.

When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund). Mutual Fund investor is also known as mutual fund shareholder or a unit holder. Any change in the value of the investments made into capital market instruments (such as shares, debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is defined as the market value of the Mutual Funds scheme's assets net of its liabilities. NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors.

WORKING OF MUTUAL FUNDS

3.2 HISTORY OF INDIAN MUTUAL FUND

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank of India. The history of mutual funds in India can be broadly divided into four distinct phases

First Phase - 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management.

Second Phase - 1987-1993 (Entry of Public Sector Funds)

987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Can bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.

At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 crores.

Third Phase - 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996.

The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under management was way ahead of other mutual funds.

Fourth Phase - since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations.

The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth.

The graph indicates the growth of assets over the years.

GROWTH IN ASSETS UNDER MANAGEMENT

3.3 CLASSIFICATION OF MUTUAL FUNDS

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. There are over hundreds of mutual funds scheme to choose from. It is easier to think of mutual funds in categories, mentioned below.

BY STRUCTURE

Open-end fund

The term mutual fund is the common name for what is classified as an open-end investment company by the SEC. Being open-ended means that, at the end of every day, the fund issues new shares to investors and buys back shares from investors wishing to leave the fund.

Mutual funds must be structured as corporations or trusts, such as business trusts, and any corporation or trust will be classified by the SEC as an investment company if it issues securities and primarily invests in non-government securities. An investment company will be classified by the SEC as an open-end investment company if they do not issue undivided interests in specified securities (the defining characteristic of unit investment trusts or UITs) and if they issue redeemable securities. Registered investment companies that are not UITs or open-end investment companies are closed-end funds. Neither UITs nor closed-end funds are mutual funds (as that term is used in the US).

Close-ended Fund/ Scheme:

A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis

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 .

The risk return trade-off indicates that if investor is willing to take higher risk then correspondingly he can expect higher returns and vise versa if he pertains to lower risk instruments, which would be satisfied by lower returns. For example, if an investors opt for bank FD, which provide moderate return with minimal risk. But as he moves ahead to invest in capital protected funds and the profit-bonds that give out more return which is slightly higher as compared to the bank deposits but the risk involved also increases in the same proportion.

Thus investors choose mutual funds as their primary means of investing, as Mutual funds provide professional management, diversification, convenience and liquidity. That doesn't mean mutual fund investments risk free. This is because the money that is pooled in are not invested only in debts funds which are less riskier but are also invested in the stock markets which involves a higher risk but can expect higher returns. Hedge fund involves a very high risk since it is mostly traded in the derivatives market which is considered very volatile.

BY NATURE:

Equity (Stock or Income) Funds

Funds that invest in stocks represent the largest category of mutual funds. Generally, the investment objective of this class of funds is long-term capital growth with some income. There are, however, many different types of equity funds because there are many different types of equities. A great way to understand the universe of equity funds is to use a style box, an example of which is below.

The idea is to classify funds based on both the size of the companies invested in and the investment style of the manager. The term value refers to a style of investing that looks for high quality companies that are out of favour with the market. These companies are characterized by low P/E and price-to-book ratios and high dividend yields. The opposite of value is growth, which refers to companies that have had (and are expected to continue to have) strong growth in earnings, sales and cash flow. A compromise between value and growth is blend, which simply refers to companies that are neither value nor growth stocks and are classified as being somewhere in the middle.

Debt funds:

The objective of these Funds is to invest in debt papers. Government authorities, private companies, banks and financial institutions are some of the major issuers of debt papers. By investing in debt instruments, these funds ensure low risk and provide stable income to the investors. Debt funds are further classified as:

Gilt Funds:

Invest their corpus in securities issued by Government, popularly known as Government of India debt papers. These Funds carry zero Default risk but are associated with Interest Rate risk. These schemes are safer as they invest in papers backed by Government.

Income Funds:

Invest a major portion into various debt instruments such as bonds, corporate debentures and Government securities.

MIPs:

Invests maximum of their total corpus in debt instruments while they take minimum exposure in equities. It gets benefit of both equity and debt market. These scheme ranks slightly high on the risk-return matrix when compared with other debt schemes.

Short Term Plans (STPs):

Meant for investment horizon for three to six months. These funds primarily invest in short term papers like Certificate of Deposits (CDs) and Commercial Papers (CPs). Some portion of the corpus is also invested in corporate debentures.

Liquid Funds:

Also known as Money Market Schemes, These funds provides easy liquidity and preservation of capital. These schemes invest in short-term instruments like Treasury Bills, inter-bank call money market, CPs and CDs. These funds are meant for short-term cash management of corporate houses and are meant for an investment horizon of 1day to 3 months. These schemes rank low on risk-return matrix and are considered to be the safest amongst all categories of mutual funds.

Balanced funds:

As the name suggest they, are a mix of both equity and debt funds. They invest in both equities and fixed income securities, which are in line with pre-defined investment objective of the scheme. These schemes aim to provide investors with the best of both the worlds. Equity part provides growth and the debt part provides stability in returns.

Further the mutual funds can be broadly classified on the basis of investment parameter viz,

Each category of funds is backed by an investment philosophy, which is pre-defined in the objectives of the fund. The investor can align his own investment needs with the funds objective and invest accordingly.

BY INVESTMENT OBJECTIVE:

Growth Schemes:-Growth Schemes are also known as equity schemes. The aim of these schemes is to provide capital appreciation over medium to long term. These schemes normally invest a major part of their fund in equities and are willing to bear short-term decline in value for possible future appreciation.

Income Schemes

Income Schemes are also known as debt schemes. The aim of these schemes is to provide regular and steady income to investors. These schemes generally invest in fixed income securities such as bonds and corporate debentures. Capital appreciation in such schemes may be limited.

Balanced Schemes

Balanced Schemes aim to provide both growth and income by periodically distributing a part of the income and capital gains they earn. These schemes invest in both shares and fixed income securities, in the proportion indicated in their offer documents (normally 50:50).

Money Market Schemes

Money Market Schemes aim to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer, short-term instruments, such as treasury bills, certificates of deposit, commercial paper and inter-bank call money.

OTHER SCHEMES

Tax Saving Schemes:

Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from time to time. Under Sec.88 of the Income Tax Act, contributions made to any Equity Linked Savings Scheme (ELSS) are eligible for rebate.

Index Schemes:

Index schemes attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50. The portfolio of these schemes will consist of only those stocks that constitute the index. The percentage of each stock to the total holding will be identical to the stocks index weight age. And hence, the returns from such schemes would be more or less equivalent to those of the Index.

Sector Specific Schemes:

These are the funds/schemes which invest in the securities of only those sectors or industries as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective sectors/industries. While these funds may give higher returns, they are more risky compared to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time.
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3.4 ADVANTAGES OF INVESTING IN MUTUAL FUNDS

S. No.

Advantage

Particulars

.

Portfolio Diversification

Mutual Funds invest in a well-diversified portfolio of securities which enables investor to hold a diversified investment portfolio (whether the amount of investment is big or small).

2.

Professional Management

Fund manager undergoes through various research works and has better investment management skills which ensure higher returns to the investor than what he can manage on his own.

3.

Less Risk

Investors acquire a diversified portfolio of securities even with a ...

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