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A Comparative Study on Icici Prudential Mutual Funds and Hdfc Mutual Funds on the Basis of Various Scheme - Copy

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  A comparatve sudy on SBI and HDFCmuual funds    INTRODUCTION What is a Mutual fund? Mutual fund is an investment company that pools money from shareholders and invests in a variety of securities, such as stocks, bonds and money market instruments. Most open-end Mutual funds stand ready to buy back (redeem) its shares at their current net asset value, which depends on the total market value of the fund's investment portfolio at the time of redemption. Most open-end Mutual funds continuously offer new shares to investors. Also known as an open-end investment company, to differentiate it from a closed-end investment company. Mutual fundsinvest pooled cash of many investors to meet the fund's stated investment objective. Mutual funds stand ready to sell and redeem their shares at any time at the fund's current netasset value total fund assets divided by shares outstandin!. n #imple $ords, Mutual fund is a mechanism for poolin! the resources by issuin! units to theinvestors and investin! funds in securities in accordance with objectives as disclosed in offer document. nvestments in securities are spread across a wide cross-section of industries andsectors and thus the risk is reduced. %iversification reduces the risk because all stocks may notmove in the same direction in the same proportion at the same time. Mutual fund issues units tothe investors in accordance with &uantum of money invested by them. nvestors of Mutual fundsare known as unit holders. he profits or losses are shared by the investors in proportion to their investments. he Mutual funds normally come out with a number of schemes with differentinvestment objectives which are launched from time to time. n ndia, A Mutual fund is re&uiredto be re!istered with #ecurities and chan!e *oard of ndia (#* ) which re!ulates securitiesmarkets before it can collect funds from the public. n #hort, a Mutual fund is a common pool of money in to which investors with common investment objective place their contributions that are  to be invested in accordance with the stated investment objective of the scheme. he investmentmana!er would invest the money collected from the investor in to assets that are defined+ permitted by the stated objective of the scheme. or eample, an e&uity fund would invest e&uityand e&uity related instruments and a debt fund would invest in bonds, debentures, !ilts etc.Mutual fund is a suitable investment for the common man as it offers an opportunity to invest ina diversified, professionally mana!ed basket of securities at a relatively low cost. TYPES OF MUTUAL FUND SCHEMES 1!Y STRUCTURE  pen  nded #chemes.  /lose  nded #chemes.  nterval #chemes. !Y IN#ESTMENT O!$ECTI#E  0rowth #chemes.  ncome #chemes.  *alanced #chemes. %OTHER SCHEMES  a #avin! #chemes.  #pecial #chemes.  nde #chemes.  #ector #pecific #chemes. 1OPEN & ENDED SCHEMES he units offered by these schemes are available for sale and repurchase on any business day at 1A2 based prices. 3ence, the unit capital of the schemes keeps chan!in! each day. #uchschemes thus offer very hi!h li&uidity to investors and are becomin! increasin!ly popular in  ndia. 4lease note that an open-ended fund is 1 obli!ed to keep sellin!+issuin! new units at alltimes, and may stop issuin! further subscription to new investors. n the other hand, an open-ended fund rarely denies to its investor the facility to redeem eistin! units.  CLOSED & ENDED SCHEMES he unit capital of a close-ended product is fied as it makes a one-time sale of fied number of units. hese schemes are launched with an initial public offer ( 4) with a stated maturity periodafter which the units are fully redeemed at 1A2 linked prices. n the interim, investors can buyor sell units on the stock echan!es where they are listed. 5nlike open-ended schemes, the unitcapital in closed-ended schemes usually remains unchan!ed. After an initial closed period, thescheme may offer direct repurchase facility to the investors. /losed-ended schemes are usuallymore illi&uid as compared to open-ended schemes and hence trade at a discount to the 1A2. hisdiscount tends towards the 1A2 closer to the maturity date of the scheme. % INTER#AL SCHEMES hese schemes combine the features of open-ended and closed-ended schemes. hey may betraded on the stock echan!e or may be open for sale or redemption durin! pre-determinedintervals at 1A2 based prices. ' (ROWTH SCHEMES hese schemes, also commonly called &uity #chemes, seek to invest a majority of their funds ine&uities and a small portion in money market instruments. #uch schemes have the potential todeliver superior returns over the lon! term. 3owever, because they invest in e&uities, theseschemes are eposed to fluctuations in value especially in the short term. ) INCOME SCHEMES hese schemes, also commonly called %ebt #chemes, invest in debt securities such as corporate bonds, debentures and !overnment securities. he prices of these schemes tend to be more stable
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