International Journal of Commerce and Management Research

Authors
Dr. Sulthan Mohideen A, Mohamed Ishaq M, Mohamed Ilyas M

Abstract

The Indian capital market has witnessed unprecedented developments and innovations during the recent past. Once such development is the increasing role that the mutual funds industry is playing in financial intermediation, development of capital markets and growth of the corporate sector. The industry has grown several fold sin terms of size and operations during the past. “Put your money in truest, not trust in money” attracts the small investors who risk neutral or risk avers. Small investors prefer some kind of collective investments vehicle, which can pool their marginal resource, invest it in securities, and distributed return among them on co-operative principles. This led to the growth of mutual fund industry both in the developed and developing capital market.

Mutual fund is a mechanism for pooling the resource by; issuing units to investors and investing funds in securities in accordance with objective as disclosed in the offer document. Mutual fund is a corporation, trust or partnership, which manages the collected money with the help of the professional expertise. Different persons have defined mutual funds differently. Mutual funds is almost like a cooperative society of investor that is why the word “Mutual” is used. It collects money from investors by issuing mutual funds unities, invest sit in securities an divides whatever dividend or interest received among its member.