Research Questions On Mutual Fund

Overview of subject matter essential for the individual who requires general knowledge of the mutual fund industry and related topics. The individual may want to become a professional in the mutual funds industry or simply want to expand their knowledge of mutual funds for personal interest.

If we consider with other investment options equity mutual fund is provide maximum benefits to the investors. Asset Management Company that properly invest it’s client fund into the security market as per their objectives which has defined in their prospectus. The fund manager has proper team to research so to make proper planning for investment with strategy and to succeed the highest market return.

“However, there are over 10,000 mutual funds in operation, and these funds vary greatly according to investment objective, size strategy, and style. Mutual funds are available for virtually every investment strategy (e.g. value, growth), every sector (e.g. biotech, internet), and every country and region of the world. So even the process of selecting a fund can be tedious” (Staff).

Historically, people invest their money in mutual funds as a means to generate extra income. This can be separated into either stocks or bonds, with each having their specialty in a portfolio. The following report provides an analysis of two funds, the Fidelity® Nasdaq® Composite Index Fund (FNCMX) and the Fidelity® Floating Rate High Income Fund (FFRHX). The analysis of the yearly returns of each fund from 2005-2014 will include the risk and return for investing in each with key statistics such as mean, median, standard deviation, and range for indicators of their performance. These statistics will be paired with visuals so the client can have a visual representation of what they look like. The analysis will also compare the performance

Ever since their creation in 1949 by A. W. Jones, hedge funds have been widely regarded as a unique and luring alternative to investing ones money. Some have seen them as a replacement to the well-known mutual fund- while others believe that they are an entirely new domain. Besides defining both the hedge fund and mutual fund, this paper aims to expose the answer to a deeper question: Are hedge funds REALLY different than a mutual fund, and if so, how and why? By comparing both financial intermediaries in the areas of structure, strategy, and their respective environments, it is my hope that I can unmask any uncertainties that may reside within these financial institutions.

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 combine the savings of a large number of investors and manage them as a single pool of money. Instead of investors worrying about what stock or bond or commodity to invest in, professional fund managers do the job. Mutual funds are run by mutual fund companies, also as Asset Management Companies (AMCs). Each AMC operates a number of fund schemes that suit different type of investment needs.

But for choosing such an option, the common investor needs to be fully informed about the stock market which becomes a difficult situation. The intricacies of the market are difficult to understand. Mutual Funds have both pros and cons when compared to direct investments in particular and individual securities. An important characteristic of mutual funds is that, the contributors and the beneficiaries are the same people i.e. the investors. Many a times it may so happen that, the investor lands up buying shares of those companies, which they would have otherwise could not buy due to the high prices. But in case of mutual funds, due to the huge corpus collected, an individual can get shares in highly rated companies. To measure the performance of a mutual fund, the investors must look at the Net Asset Value (NAV) of the fund. The net asset value is assessed by calculating the total assets minus all the expenses and divided by the number of units held in the fund. Studies show that the NAV of a fund is affected by various factors of the fund like the turnover, expenses ratio, load status, etc. A load is a sales charge or commission. This is an amount paid by the investor for the intermediary which could be a broker, financial planner, an investment advisor, etc. This is the fee paid to them for their time and expertise. And this load can either be paid at the time of purchase of the

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.

Mutual funds are investment plans that let you to pool your money together with additional investors to purchase a collection of securities that might be difficult to recreate on your own. This is often referred to like a portfolio. The price of the mutual fund, also recognized as its net asset value is determined by the total value of the securities in the portfolio, divided by the number of the fund’s unsettled shares. This price varies based on the value of the securities held by the portfolio at the end of every business day. Note that mutual fund investors do not really own the securities in which the fund invests; they only own shares in the fund itself.

There are various investment opportunities available today in financial market for an investor to avail and earn returns. An investor has different options available today ranging from bank deposits, debentures, fixed income, etc. where there is low risk as well as low return; to equity market having a higher return to higher relative risk. Mutual Fund is an investment scheme which pools money from investors to invest in a diversified portfolio of stocks. Every investor wants to invest in that investment where risk minimized and the return of investment maximized. Mutual funds investment is becoming significant all over the world and its popularity and demand is rising steadily (Nazir & Nawaz, 2010).Mutual funds in Pakistan are created and managed by Asset Management Companies and regulated by Securities and Exchage Comission of Pakistan. The investor purchase share with in the fund however the quantity of shares in issue varies consistent with demand,thus the term open ended.This implies that the value of share reflects the underlying net asset value

JENSEN, M. C. 1968. The performance of mutual funds in the period 1945–1964. The Journal of finance, 23, 389-416.

We selected 5 mutual funds that have 80% of more invested in stock equity securities in the mutual fund. The 5 mutual funds all have different investment styles according to Morningstar. The investment objective defines what each mutual fund’s long term goals are. It includes things such as required return, the risk tolerance, and investment time horizon. The investment style is the different strategy used to set asset allocation of the mutual fund. It sets expectations for long term portfolio performance. For example, VTICX focuses on large blend, where HASCX focuses on small blend; meaning that they will target different portfolio asset allocations. Each fund will allocate its funds differently and in different proportions. The investment strategy is a set of rules, behaviors or procedures designed to guide an investor's selection of an investment portfolio. For example, VTICX looks into stocks that pay lower dividends and are included in the Russell 1000 Index so they can provide a tax-efficient investment return consisting of long-term capital appreciation. Behind every capital investment there is a strategy. Arithmetic mean returns are the total average of the returns for the last ten years (07-16) of

Those who are interested in understanding investment opportunities would benefit by understanding what a mutual fund is and how it works. Mutual funds are collections of stocks, bonds and other investments, which are operated by money managers. The companies that manage mutual funds are able to use the financial input of numerous investors to manage diverse investments in collections called portfolios. These portfolios are subject to investment objectives that are explained in the prospectus of the fund.

This paper looks at The Capital Asset Pricing Model (CAPM) and how it can be used by fund