What Are Mutual Funds?. By Sam Williams| Submitted On March

Index funds are funds in which managers buy securities in proportions similar to those included in a specified major index. Index funds involve little research or management, which results in lower management fees and higher returns than actively managed funds. Actively managed funds turn over their holdings rapidly.

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.

An Investment funds is a pool of money collected from many investors that is used by the fund manager to purchase and sell stocks, bonds or other securities in accordance with the fund’s investment objective.

     Only 25 years ago, there were fewer than 500 funds available. Today, there are over 7,000, with more added every year. There are many advantages to buying mutual funds, but there are disadvantages as well. Mutual funds can offer instant diversification, and diversification reduces risk. For example, funds can reduce risk by spreading it among a large number of investments, if one stock performs badly, its impact on the overall portfolio is lessened. Funds can also reduce risk by investing in different asset classes: stocks (which can include international as well as U.S. stocks), bonds, cash and

There are varies reasons why investors purchase mutual funds. Professional management is one of the reasons investors purchase mutual funds. The second reason investors purchase mutual funds is for diversification purposes. Mutual funds are “investment companies that pools the money of many investors” (Hughes, 2009,P.513). “A mutual fund pools money from hundreds and thousands of investors to construct a portfolio of stocks, bonds, real estate, or other securities, according to its charter”(CNNMoney). Mutual funds may be go up and down. “And while some mutual funds consistently showed positive returns, many shareholders experienced a roller coaster ride, with prices for mutual fund shares increasing and decreasing over the first seven years of the century” (Hughes, 2009, p.514)

It took another 150 year for pooled investments to arrive to the United States. On March 21, 1924, Massachusetts Investors Trust launched the first modern day mutual fund, providing individual investors with a cost effective way to achieve a diversified portfolio. Moreover, individual investors gained the benefit of having their investments managed by professionals. Since then, academics and practitioners alike have debated ad nauseam the value-add delivered by fund managers. Jensen (1968) evaluated the performance of mutual funds from 1945 to 1964 and concluded that on average, fund managers were not able to predict security prices well enough to outperform the market. Concurring with Jensen, Samuelson (1974) found that it was nearly impossible to find a fund manager who can outperform the market by holding a subset of securities of the market. Henceforth, Samuelson advocated for the creation of a naïve portfolio that tracks the S&P 500 Index (a market proxy). On August 31, 1976, the Vanguard Group launched the first index fund for individual investors, the First Index Investment Trust. The introduction of this index fund initiated the active-passive debate; the persistent dialogue around mispriced securities sustains

Since mutual fund has been a primary investment instrument in the U.S. financial market as well as other countries around the world. The valuation of mutual fund’s performance has been drawn enormous attention from both financial practitioners and academics. Financial models have been established and developed in the financial market and these models have the purpose of assessing the expected returns of stocks and evaluating their performance related to the exposure to the market. The exploration for the risk-related asset pricing model that clarifies variations in stock returns is one of the most important issues in finance. Apparently, the capital asset pricing model (CAPM), which is proposed by Sharpe (1964) and Lintner (1965), and the Fama and French three factors model, which is proposed by Fama and French (1992, 1993 and 1995), are relatively significant and conventional finance models. It has been almost fifty years since the CAPM was put forward.

When an investor considers to investment money, the first challenge that almost every investor face is numerous options to choose from stocks, bonds, mutual funds & so on. “Equity is one the key asset class which beats inflation in the long run.” (The Times of India, 5th Feb 2015). “Equity mutual funds help investors generate better inflation-adjusted returns, without spending a lot of time and energy on it. While most people consider letting their savings 'grow ' in a bank, they don 't consider that inflation may be nibbling away its value.” (The Hindu, 14th March 2016). Purpose of this study is to analyze the past performance of three global equity mutual funds of State Street Global Advisors (SSGA) & Northern Trust (NT) on the basis of equivalent investment style, asset manager, historical returns & application of statistical tools. This will help in understanding performance of mutual funds in terms of risk & return, asset manager’s investment strategies & asset manager’s performance.

• Selection: There is a fund available for virtually any type of market sector that you might be interested in. A mutual fund screener is a good way to find high-quality funds for your portfolio. There are also mutual fund newsletters that provide investors with fund profiles and information.

The improvement of Fund industry in China has a short period. Fund managers are the heart and soul in the decision making of funds who have the major places, they and their behind team own the advantages of collecting collating and analyzing information. But there still have no standard method can help general public choose the fund. Choosing a fund manager is much easier than choosing a fund in the huge fund pool for average investors. This paper utilise empirical method to discuss the relationship between the personal characteristics of fund managers and their performance, hope we can find the reasonable basis to explain selecting funds is

Mutual funds are identified by their principal investments. They are the 4th largest category of funds that are also known as money market funds, bond or fixed income funds, stock or equity funds and hybrid funds. Funds are also categorized as index based or actively managed.

We have seen many evolutions in the stock market since its inception. Mutual funds have lasted through many of the changes we have seen over time and show no real sign of faltering. Below you will find a brief description of the various types of mutual funds currently on the market.

An advantage of mutual funds is the ability to get in and out with relative ease. In general, you are able to sell your mutual funds in a short period of time without there being much difference between sale price and the most current market value.

Mutual fund is a fund that exhibitions as a wander vehicle, pools the trusts of different theorists to place assets into distinctive budgetary instruments like stocks, securities, debentures, et cetera engaging monetary experts to achieve their money related targets. SEBI (Mutual Funds) Regulation 1993, describes Mutual Fund as "Normal Fund intimates a trust secured as a trust by a sponsor to raise money by the trustee through the offer of units to the all inclusive community under one or more plans for placing assets into securities according to these regulations".

Extensive research has evaluated mutual fund performance in different financial markets which led to mixed results (Soderlind et al., 2000; Korkeamaki and Smythe, 2004); however, very limited work has been done to evaluate Bangladeshi mutual funds. This paper focused on measuring risk adjusted performance of 13 closed end mutual funds on the basis of monthly Net Asset Value. For this purpose methods suggested by Jensen, Treynor and Sharpe are employed. Performance of the selected funds found superior in compare to benchmark index. Furthermore diversification, market timing and selectivity skill of fund managers are