Indian mutual fund industry: Emerging issues and challanges

Mutual Funds have become a hot favorite of millions of people all over the world. The driving force of mutual fund is the ‘safety of the principal’ guaranteed, plus the added advantage of capital appreciation together with the income earned in the form of interest or dividend. A mutual fund is a professionally managed type of collective investment scheme that pools the money from many investors to buy stocks, bonds, money market instruments and other types of securities. It works on the principle of ‘small drops of water make a big ocean’. The owner of a mutual fund unit gets a proportional share of the fund's gains, losses, income and expenses. The main objective of this paper is to examine the importance and growth of mutual funds and evaluate the challenges & issues of mutual funds and suggest some measures to make it a successful investment avenue in India.