The Management of Mutual Funds

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PREFACE Management of Mutual Fund Industry is vital and complex process. The aspirant managers, investors and other stakeholders should have a fundamental idea about four dimensions of mutual fund industry viz., corporate governance, bench marking, asset management, portfolio management. A Fund Manager who is an investment specialist, who makes an in-depth understanding of the financial markets so as to manage the funds in a professional manner, will manage mutual funds. The diversified portfolio of Mutual Fund organizations will minimize the risk of investors. Investor is free to invest in open-ended mutual funds or closed-ended mutual funds, which facilitates liquidity of investment. Every mutual fund organization must have an ‘Asset Management Company’ (AMC), which is plays a vital role in market fluctuations. The assets accumulated by mutual fund organizations are being look after by Asset Management Companies (AMCs) . The said assets have to be deployed in the market to gain returns and pass it on to the investors. In this stiffening of competition in the industry with around 35 players and more number of players set to hit the market soon, there is a huge pressure on the fund managers to out beat the competitor and its benchmark. Managing this kind of huge amount is a very difficult task for a fund manager. CHAPTER -1: INTRODUCTION In this chapter we have discussed about the fundamentals of mutual fund industry, its origin and historical growth. It also deals with organization structure, benefits derived from management of mutual funds and regulatory mechanism in India. CHAPTER –II: REVIEW OF LITERATURE This chapter focuses review of literature in four categories a) Corporate governance studies on mutual funds, b) benching marking issues relating to mutual funds 3) Asset Management of mutual funds and d) portfolio management of mutual funds. CHAPTER -3: CORPORATE GOVERNANCE This chapter focuses on ‘Corporate governance’ issues in mutual fund industry. Good corporate governance in mutual fund industry is to address the principles of government and public enterprise relationship and create the fundamental pillars based on which the governing board can become effective. One of the important objectives of mutual fund organization is to provide income tax benefit to the small and medium size investors. Over a medium to long term Mutual Funds have the potential and objective to provide a higher return as they invest in a diversified basket of selected companies. CHAPTER -4: BENCHMARKING This chapter is about ‘Benchmarking’ in the mutual fund industry. Three important considerations while investing in mutual funds are: One, you should find out how the scheme has performed. Most funds give their performance for one month, three month, six month, one year, and three years and since inception. Two, find out how the fund fared in comparison with its peers? Lastly, find out the performance of the fund vis-à-vis the market benchmark. For example, a diversified equity fund should be on par or above the broad index of Bombay Stock Exchange or National Stock Exchange. CHAPTER -5: ASSET MANAGEMENT This chapter is based on managing risk by an AMC in general and a special focus on HDFC Asset Management Company Limited. It makes a comparative analysis of fund Management in HDFC AMC Ltd and Standard Chartered AMC Pvt. Ltd. This paper also analyses performance of HDFC Equity Fund and Standard Chartered Classic Equity Fund (SCCEF) on the returns the fund has generated. CHAPTER –6: PORTFOLIO MANAGEMENT This chapter focuses on ‘Portfolio Management’ in Mutual Fund schemes. A select comparative study will brings awareness of portfolio management aspects relating to mutual fund schemes. CHAPER-7 DUTIES AND RESPONSIBILITIES OF THE FUND MANAGER The success of an investment activity done by fund manager depends on the knowledge and ability to invest, the right amount, in the right type of investment, at the right time. In the present dynamic global environment, exploring investment avenues are of great relevance. Management style of mutual funds is developed over a period of time are considerably influenced by experience and spadework carried out to arrive at conclusions. This chapter deals with duties and responsibilities of the fund manager.

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this is useful for research in mutual funds

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