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Top1. Introduction
Under the conditions of globalization, when the range of services and financial institutions is significantly widening, rivalries between budgetary foundations are developing and mergers are emerging, the advancement of the monetary framework and its sensitivity to changes in global finance is the current problem for India, where the creation of the financial framework and the rising living standard are concerned. One of the elements of the financial system, a non-bank financial intermediary– investment fund, is the research object of this paper. The concept of an investment fund is used here in the sense of an open- ended fund that is publicly offered to invest in transferable securities and money market funds, which refers to India’s “mutual fund”.
During the last few years, investment funds have been regarded as an attractive alternative than other financial assets by both individuals as well as corporate investors in India. The advantages they offer in terms of diversification, liquidity, costs and real returns help to explain their success as instruments for saving money. These factors, together with the expected growth in private retirement savings and the growing importance of Indian investors, should continue to give the Indian investment fund industry momentum over the coming years. The Indian financial market is changing because of financial innovation, flexibility, changes in the needs and preferences of investors. In order to meet emerging investment fund demand and adapt to the transformation of financial markets, the investment fund industry must look for new ways to allocate savings to productive investments. Investment decisions have benefits to demonstrate their excellence in market decisions. The new investment decision should be considered superior to market decisions if it is more efficient in the appropriate market than any ever developed investment tools of the respective duration and risk.
Portfolio selection problems involve situations in which a financial consultant has to choose from a variety of investment alternatives specific investments, such as stocks and bonds. Mutual fund man- agers, credit unions, insurance companies and banks often face this type of problem. The purpose of portfolio selection problems is usually to maximize expected returns or to minimize risk. The constraints usually take the form of restrictions on the type of allowable investment, state legislation, company policy, maximum allowable risk, etc.