Growth And Development Of Mutual Fund Industry Essay

Financial markets are crucial to promoting greater economic efficiency by channeling funds from people who do not have a productive use for them to those who do. Well functioning financial markets are a key factor in producing high economic growth, and poorly performing financial markets, vice versa. Financial markets and intermediaries have the basic function of getting people together by moving funds from those who have a surplus of funds to those who have a shortage of funds.

The overall development of an economy is a major factor that has significant impacts on the development of the economy's financial markets. Since well-functioning financial systems offer good and easily accessible information, they lower the costs of transaction. This in turn enhances resource allocation and strengthens economic growth. The financial services industry consists of various systems such as stock markets and banking systems that enhance growth and help in poverty reduction. However, commercial banks tend to dominate the financial system during low levels of economic development while stock markets become more active and effective during periods of high levels of economic development ("Financial Sector", n.d.). The other important systems in the financial services industry include sound macroeconomic policies, shareholder protection, and good legal systems.

4. The creation of a financial credit system would help states to improve their economy and promote activities to increase their developments. But if the credit system is managed by a powerful

* Direct finance: borrowers borrow funds from lenders in the financial market by selling them securities (no intermediaries)

Financial sectors all over the world is going through the process of transformation such as, liberalization, technological innovations and deregulation. The evolving financial system in India has been interlinked with the growth of the macro economics. This change allows financial institutions to bring in assortment of new product and services into the economy. Financial institutions play a prominent role in stimulating the economic growth in a country, they help to mobilize the savings and channelize the funds as investments into the sectors which requires it. Government has played a prominent role in creation and structuring the financial system in the country. The government also controls and influences the flow of credit in an economy and its direction through its fiscal policies.

C) decreases the amount of funds that business firms can raise by selling newly-issued stock.

Mutual fund also offers good investment opportunities to the investors. Like all investment, they also carry certain risks. The investors should compare the risks and expected yields after adjustment of tax on various instruments while taking investment decisions. The Indian mutual fund industry has witnessed several structural and regulatory reforms.

Mutual funds are an easy, convenient way to invest, without having to worry about choosing individual stocks. A mutual fund can be defined as a single portfolio of stocks, bonds, and/or cash managed by an investment company on behalf of many investors. The investment company manages the fund, and sells shares in the fund to individual investors. When one invests in a mutual fund, they become a part-owner of a large investment portfolio, along with all the other shareholders of the fund. The fund manager invests the contributions when shares are purchased, along with money from the other shareholders. Every day, the fund manager counts up the value of all the fund's holdings, figures out how many shares have been purchased by

The mutual fund concept was simple, allow the un-sophisticated investor access to the strategies of the professional money manager. This was done by pooling small sums of money, as little as $20.00 deposited monthly. In return, the fund company would use professional money managers using professional investment strategies to easily out perform traditional bank savings products.

Working for an investment firm I was recently asked by my boss to help advise two of firm's best clients. The client's names were John and Jane Mooney. Both John and Jane are in their early 40's and have no children. John is a fireman for the local fire department while Jane is a professor at the local community college. The Mooney's annual income is roughly $115,000. The Mooney's own their home and are virtually debt free.

A mutual fund is a professionally managed fund that accumulates money from numerous financial specialists to buy securities. There is no legitimate meaning of the word "mutual fund”. It is a collective investment product that are controlled and sold to the general public on a daily basis. Investment in Mutual fund is lot easier than selling and buying of individual stocks. It also gives flexibility to users to sell their fund any time.

Every investment company appoints a fund manager who invests the money in different investment opportunities. These could run from shares to debentures to currency market instruments, contingent on the plan's expressed targets. The income earned through these investments and the capital appreciation acknowledged by the plan is shared by its unit holders in extent to the quantity of units claimed by them. Therefore a Mutual Fund is the most appropriate investment for the investor as it offers a chance to put resources into an enhanced, professionally managed basket of securities at a moderately low cost. Mutual fund schemes are offered on the basis of structure and investment objectives.

A” financial system consists of the institutions that help to match one person's saving with another person's investment”. (Mankiw, 2014, p. 260) It is important to have a financial system because it keeps institutions on track by allowing them to follow a specific order to allow them to coordinate those who borrow and save. Hence, it is important to save because saving and investing allow a longer growth in the economy. For

Various financial instruments were involved in the 2008 Financial Crises. This paper will focus on the financial instrument known as a Money Market Mutual Funds (MMMF). In order to reduce the risk posed by Money Market Mutual Funds, the Federal Reserve Bank, the Department of the Treasury, and the Securities and Exchange Commissions (SEC) began taking actions to reduce the systemic risk to the financial system.

Singapore Financial System is one of the world’s largest financial systems. According to Mishkin (2009), Financial System refers to a system that consists of the markets and institutional units that interact for the purpose to provide facilities such as payment and transfer systems and organizing the funds for investment from saved surplus funds to units who have shortage