Summary of "What is Mutual funds | Full Course | Mutual Fund for Beginners in Hindi"

What is Mutual Funds | Full Course | Mutual Fund for Beginners in Hindi

Presenter: Parth Verma

Overview & Importance of Mutual Funds

Mutual funds are a crucial but often overlooked topic in finance education, especially for students aiming for careers in capital markets, fund management, or equity research. They offer a professional, managed approach to investing, reducing speculation and emotional trading common in direct stock investing. Mutual funds provide a systematic, long-term wealth creation tool, suitable for beginners and professionals alike.

Mutual Fund Industry Structure & Participants

The mutual fund industry in India involves several key participants, each playing a specific role:

Sponsor: Initiates the mutual fund setup and requires SEBI registration.
Trustee/Trust: A SEBI-registered trust created to build investor confidence and oversee mutual fund operations under the Indian Trust Act and Companies Act.
Asset Management Company (AMC): SEBI-registered company responsible for managing investments, research, fund managers, operations, KYC, onboarding, compliance, and investor servicing.
Custodian: SEBI-registered entity holding the actual securities (stocks, bonds) on behalf of investors to ensure safety and prevent misuse.
Registrar and Transfer Agent (RTA): Handles KYC, transaction processing, and record keeping (examples include Karvy, CMS).

Mutual Fund Mechanics

Investors pool money via Systematic Investment Plans (SIPs) or lump sum investments.
Mutual funds issue units to investors, representing their share in the fund’s portfolio.
The initial unit price (face value) typically starts at ₹10.
Net Asset Value (NAV) changes over time based on the market value of the underlying assets.
For example, investing ₹1 crore results in 10 lakh units at ₹10 each.
Fund performance is reflected in NAV growth; if NAV rises to ₹13, the investment value grows to ₹1.3 crore (a 30% return).

Industry Scale & Growth

The Indian mutual fund industry’s Assets Under Management (AUM) is approximately ₹54.52 lakh crore (~₹54.5 trillion).
Only about 3-4% of Indians currently invest in mutual funds, indicating significant growth potential.
Top players include:
- SBI Mutual Fund (~₹7 lakh crore AUM)
- DSP Mutual Fund (~₹17,000 crore AUM)
The industry has grown 4x in the last 10 years and is projected to double again by 2030 (according to an Access Capital report).

Investment Advice & Strategy

Start investing early, ideally via SIPs, even with small amounts (as low as ₹100/month).
Focus on learning investing principles for 1-5 years before attempting direct stock picking.
Mutual funds are recommended for beginners and young investors to access professional management.
Avoid frequent switching of funds based on short-term performance; understand risk and evaluation metrics.
Emphasize disciplined, long-term investing rather than seeking thrills in stock market speculation.

Risk & Compliance

Mutual funds are highly regulated by SEBI to protect small investors.
Opening and managing mutual funds requires strict compliance, unlike Portfolio Management Services (PMS), which are less regulated and require higher minimum investments (₹50 lakh+).
Custodian and trustee roles add layers of safety and fiduciary responsibility.

Performance Example

Franklin India Prima Fund was launched in 2000 with a unit price of ₹10.
As of March 16, 2020, the unit price grew to ₹216.
This implies a very high compounded annual growth rate (CAGR) over 24 years.
Viewers are encouraged to calculate the CAGR and reflect on the power of long-term mutual fund investing.

Methodology / Framework Highlighted

Understand the mutual fund industry structure: Sponsor → Trustee → AMC → Custodian → RTA → Investors.
Start investing via SIP with small amounts.
Learn investing principles over 1-5 years.
Use mutual funds for professional management and risk diversification.
Monitor NAV and fund performance over time.
Avoid emotional fund switching; focus on disciplined wealth creation.

Key Numbers & Timelines

Minimum SIP amount recommended: ₹100/month.
Indian mutual fund AUM: ₹54.52 lakh crore (~₹54.5 trillion).
SBI Mutual Fund AUM: ~₹7 lakh crore.
DSP Mutual Fund AUM: ~₹17,000 crore.
Industry growth: 4x in 10 years; expected to double by 2030.
Franklin India Prima Fund: ₹10/unit in 2000 → ₹216/unit in 2020 (24 years).
PMS minimum investment: ₹50 lakh.

Disclaimers

The presenter is not a stock market influencer; this content is purely educational. It is not financial advice; viewers should conduct their own research. Emphasis is placed on learning and understanding before investing.

Presenter

Parth Verma

This video serves as an introductory, practical course on mutual funds, focusing on fundamentals, industry structure, investment strategy, and long-term wealth creation via mutual funds in India.