Advantages of Mutual funds
1. Professional management:- an average investor or normal person who wants to invest in the capital market, lacks the knowledge of capital market operations and does not have large resources to get the benefits of investment. So they need an expert but il will be too expensive and difficult to find a real expert. So here mutual funds are managed by professionals who have skills and experience to analyse the performanceof companies.
2. Portfolio diversification:- an investor takes risk if he invests all his funds in a single company. Mutual funds invest in different sectors and companies to reduce the riskness.
3. Reduction in transaction costs:- investment is less expensive compared to direct investing in the capital …show more content…
Transparency:- there is transperancy because mutual funds declare their portfolio every month. So an investor can know where his money is being deployed. If he is going in loss he can withdraw his money on a short notice.
9. Stability to the stock market:- having large amount of funds, mutual fund can absorb the losses by investing in stock market.
10. Equity research:- lot of information available such as where to invest when to invest, made possible by research teams.
Disadvantages of Mutual Funds
1. Mutual funds have some disadvantage also which are discussed below.
2. Cost control is not in the hands of an investor means investor has to pay investment management fees and fund distribution costs as a percentage of the value of his investments.
3. Decision is taken by the fund manager so the investor can’t interfere in the decision making process of a fund manager.
4. As lots of scheme are available in the mutual fund so investor faces the problem for finding a best scheme in which he could invest.
5. Dilution of money.
6. Some of the mutual fund managers are not experienced enough to explore all the opportunities in the market.
Role of SEBI
SEBI stands for Securities and Exchange Boardof India. SEBI Act was passed in 1992. SEBI has been inspecting the stock exchanges every year since …show more content…
2- Internal limits are removed
3- Exit load will be added back to scheme AUM , but will not benefit investors.
4- Expense ratio was reduced because of direct investment without any involvement of any agent.
5- Service tax is now borne by investors.
6- Separation between advisor and distributor.
Role of AMFI:-
AMFI means Association of Mutual Funds in India was set up on 22nd Aug 1995.
It was established with the aim to work as a non profit organization.
It is chief governing body of all asset management companies and it is registered with SEBI.
The members of AMC have a responsibility to introduce the nee mutual fund schemes so that there could be many options for the investors for investing their money according to their need and returns what they want.
Important roles of AMFI
1- It provides professionalism
2- Highly efficient business practices between the mutual fund members and the investors.
3- It works sometimes as representative of government of india, Reserve Bank of india and other authorities involved in mutual fund industry.
4- To aware the people about the programmes by campaigning, awareness
1. Professional management:- an average investor or normal person who wants to invest in the capital market, lacks the knowledge of capital market operations and does not have large resources to get the benefits of investment. So they need an expert but il will be too expensive and difficult to find a real expert. So here mutual funds are managed by professionals who have skills and experience to analyse the performanceof companies.
2. Portfolio diversification:- an investor takes risk if he invests all his funds in a single company. Mutual funds invest in different sectors and companies to reduce the riskness.
3. Reduction in transaction costs:- investment is less expensive compared to direct investing in the capital …show more content…
Transparency:- there is transperancy because mutual funds declare their portfolio every month. So an investor can know where his money is being deployed. If he is going in loss he can withdraw his money on a short notice.
9. Stability to the stock market:- having large amount of funds, mutual fund can absorb the losses by investing in stock market.
10. Equity research:- lot of information available such as where to invest when to invest, made possible by research teams.
Disadvantages of Mutual Funds
1. Mutual funds have some disadvantage also which are discussed below.
2. Cost control is not in the hands of an investor means investor has to pay investment management fees and fund distribution costs as a percentage of the value of his investments.
3. Decision is taken by the fund manager so the investor can’t interfere in the decision making process of a fund manager.
4. As lots of scheme are available in the mutual fund so investor faces the problem for finding a best scheme in which he could invest.
5. Dilution of money.
6. Some of the mutual fund managers are not experienced enough to explore all the opportunities in the market.
Role of SEBI
SEBI stands for Securities and Exchange Boardof India. SEBI Act was passed in 1992. SEBI has been inspecting the stock exchanges every year since …show more content…
2- Internal limits are removed
3- Exit load will be added back to scheme AUM , but will not benefit investors.
4- Expense ratio was reduced because of direct investment without any involvement of any agent.
5- Service tax is now borne by investors.
6- Separation between advisor and distributor.
Role of AMFI:-
AMFI means Association of Mutual Funds in India was set up on 22nd Aug 1995.
It was established with the aim to work as a non profit organization.
It is chief governing body of all asset management companies and it is registered with SEBI.
The members of AMC have a responsibility to introduce the nee mutual fund schemes so that there could be many options for the investors for investing their money according to their need and returns what they want.
Important roles of AMFI
1- It provides professionalism
2- Highly efficient business practices between the mutual fund members and the investors.
3- It works sometimes as representative of government of india, Reserve Bank of india and other authorities involved in mutual fund industry.
4- To aware the people about the programmes by campaigning, awareness