Swot Analysis
Content
SWOT ANALYSIS
SWOT Analysis of any industry means analsing that industry’s strength, weakness and opportunities and threats of that industry. STRENGTH 1. Professional management: - Mutual Fund provides the services of experienced and skilled professional backed by a dedicated investment research team that analyse, the performance and prospects of companies and select suitable investment to achieve the objectives of the scheme. 2. Diversification: - Mutual Fund invests in a number of companies across a broad cross section of industry and sectors. This way doing investment in diversify sectors also reduce risk. 3. Convenient administration:- Investing in a mutual fund reduce paper work and help you to avoid many problems such as bad delivery, delay of payments and follow up with brokers and companies. 4. Return potential:- Over medium to long terms mutual fund have the potential to provide a higher return as they invest in a diversified basket of selected securities. 5. Low costs:- Mutual fund are a relative less expensive way to invest compared to directly investing in capital market, because the benefits of scale in brokerage custodial and other fee translate into lower costs for investor. 6. Liquidity: - In open ended mutual fund you can take your money back when you want. So there is good liquidity facility. 7. Transparency:- Regular information the valued your investment in addition to disclosure on the specific investment made by your scheme. WEAKNESS 1. Lesser return compared to equity:- When compared with equity the return earned on mutual fund ‘s are less. This is because of the various changes that the mutual fund’s have to deduct. 2. Conservative approach:- Mutual fund manager are more conservative in their approach rather then being practical. Whenever they take any decision on investment they follow the conservative approach. Many a time due to this, it becomes difficult for them to capitalize on certain occasions. 3. Lack of proper marketing:- The marketing efforts carried out by various players in the mutual fund industry are often very poor. Still there is not much people aware of what exactly is a mutual fund. OPPORTUNITIES 1. Governed policy and tax concessions:- Mutual fund’s take the benefits of various government policy and come out with new schemes. Moreover certain schemes can be formulated taking in considered the new tax policies. 2. Changes in capital market:- With the changes in the capital market now the mutual fund can try to increase the popularity of the equity linked schemes with the successful
results of many of the blue chip firms ,the stock market has started rejuvenating again. So stock market can be a good option this year. 3. New technology:- Mutual fund can take benefits of new technology in transactions. Already they have started making the use of internet in filling application forms and sending the NAV results directly on mobile phones. THREATS Arrival of more and more private and foreign players in the market will intensify competition and will reduce the margin for existing players. This will result in reduced dividends for the investors. The low entry barrier existing in the industry will lead to more and more players to enter into the market. The failure of some these players may lead to loss of credibility among the creditors. The introduction of bonds and debentures and assured returns might cause investors to quit the mutual fund and invest in the capital market.
SWOT Analysis of any industry means analsing that industry’s strength, weakness and opportunities and threats of that industry. STRENGTH 1. Professional management: - Mutual Fund provides the services of experienced and skilled professional backed by a dedicated investment research team that analyse, the performance and prospects of companies and select suitable investment to achieve the objectives of the scheme. 2. Diversification: - Mutual Fund invests in a number of companies across a broad cross section of industry and sectors. This way doing investment in diversify sectors also reduce risk. 3. Convenient administration:- Investing in a mutual fund reduce paper work and help you to avoid many problems such as bad delivery, delay of payments and follow up with brokers and companies. 4. Return potential:- Over medium to long terms mutual fund have the potential to provide a higher return as they invest in a diversified basket of selected securities. 5. Low costs:- Mutual fund are a relative less expensive way to invest compared to directly investing in capital market, because the benefits of scale in brokerage custodial and other fee translate into lower costs for investor. 6. Liquidity: - In open ended mutual fund you can take your money back when you want. So there is good liquidity facility. 7. Transparency:- Regular information the valued your investment in addition to disclosure on the specific investment made by your scheme. WEAKNESS 1. Lesser return compared to equity:- When compared with equity the return earned on mutual fund ‘s are less. This is because of the various changes that the mutual fund’s have to deduct. 2. Conservative approach:- Mutual fund manager are more conservative in their approach rather then being practical. Whenever they take any decision on investment they follow the conservative approach. Many a time due to this, it becomes difficult for them to capitalize on certain occasions. 3. Lack of proper marketing:- The marketing efforts carried out by various players in the mutual fund industry are often very poor. Still there is not much people aware of what exactly is a mutual fund. OPPORTUNITIES 1. Governed policy and tax concessions:- Mutual fund’s take the benefits of various government policy and come out with new schemes. Moreover certain schemes can be formulated taking in considered the new tax policies. 2. Changes in capital market:- With the changes in the capital market now the mutual fund can try to increase the popularity of the equity linked schemes with the successful
results of many of the blue chip firms ,the stock market has started rejuvenating again. So stock market can be a good option this year. 3. New technology:- Mutual fund can take benefits of new technology in transactions. Already they have started making the use of internet in filling application forms and sending the NAV results directly on mobile phones. THREATS Arrival of more and more private and foreign players in the market will intensify competition and will reduce the margin for existing players. This will result in reduced dividends for the investors. The low entry barrier existing in the industry will lead to more and more players to enter into the market. The failure of some these players may lead to loss of credibility among the creditors. The introduction of bonds and debentures and assured returns might cause investors to quit the mutual fund and invest in the capital market.
