Mutual Funds and Stock Analysis

The investment pattern in a mutual fund depends on investment objective. The Asset Management Company (AMC) team includes the research analysts, fund managers and dealers appointed by AMC itself. The fund manager is held responsible for all the investment decisions taken and also takes decision on the investment pattern, of the scheme based on the objectives of the scheme. Information with regard to various investment opportunities are provided by the research team and the dealers implement the decision of the fund manager. The fund manager uses both primary and secondary markets for actually investing the funds. The deals are placed through the fund’s brokers and the custodians take care of the back office operations involved in the investment decisions.

The research team evaluates the features of the stocks and recommends the same to the find managers. The various types of equity research include the following:

  1. A study of the earnings potential of a company by taking into consideration various factors which have an impact on the performance of the company is called Fundamental Analysis.
  2. A study of historical price and volume traded data of a company in order to recognize the behavioral patterns of prices that are used to predict the future of the share prices is called Technical Analysis.
  3. The use of mathematical models for arriving at the valuation of companies and the influence of various factors impacting the performance of the company is Quantitative Analysis.