(00)mutual fund - copy

8/7/2019 (00)MUTUAL FUND - Copy

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Presented by:Mohd. Saleem AnsariMohd. Sabir KamalPankaj palNehaNikhil NigamPulak GuptaRanjuRajendraRandheer.


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A Mutual Fund is a trust that pools the savings of a number ofinvestors who share a common financial goal.

The money thus collected is then invested in capital marketinstruments such as shares, debentures and other securities.

The income earned through these investments and the capitalappreciation realized are shared by its unit holders inproportion to the number of units owned by them.

Thus a Mutual Fund is the most suitable investment for thecommon man as it offers an opportunity to invest in adiversified, professionally managed basket of securities at arelatively low cost


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SAVE THROUGH MUTUAL FUNDS

Park surpluses

Short term investment

Easy liquidity

Tax benefits

INVEST THROUGH MUTUAL FUNDS

Have a long term objective

Profile your risk

Select appropriate MF scheme,based on risk return

requirement

Mix of equity and debt

Invest regularly/with flexibility


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Net Asset Value (NAV)et Asset Value is the market value of the assets of the

scheme minus its liabilities. The per unit NAV is the net assetvalue of the scheme divided by the number of unitsoutstanding on the Valuation Date.

Sale PriceIs the price you pay when you invest in a scheme. Also calledOfferPrice. It may include a sales load.

Repurchase PriceIs the price at which a close-ended scheme repurchases itsunits and it may include a back-end load. This is also calledBid Price.


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Redemption PriceIs the price at which open-ended schemes repurchase theirunits and close-ended schemes redeem their units on maturity.Such prices are NAV related.

Sales LoadIs a charge collected by a scheme when it sells the units. Alsocalled, Front-end load. Schemes that do not charge a load arecalled No Load schemes.

Repurchase or Back-end LoadIs a charge collected by a scheme when it buys back the unitsfrom the unit holders.


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Type of

Mutual Fund

Schemes

Structure InvestmentObjective

Special

Schemes

Open Ended

Funds

Close EndedFunds

Interval Funds

Growth Funds

Income Funds

Balanced Funds

Money Market

Funds

Industry Specific

Schemes

IndexSchemes

Sectoral

Schemes


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OPEN FOR FIXED PERIOD

MIN SUBS AMT 20CR

DURATION (5TO7 YEARS)

REFUNDED IF MIN AMT NOTACHIEVED

MAY BE REPURCHASED (AFTER 2 TO 3 YRS)

REDEMPTION SPECIFIED & DONE AT NAV - SERVICE CHARGE

LISTED AT STOCK EX

DIVID MAY/MAY NOT BE

SWITCHOVER ALLOWED

AMT 20CR


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A fund that combines the features of open-ended and closed-

ended schemes, making the fund open for sale or redemption

during pre-determined intervals.


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A mutual fund whose aim is to achieve capital appreciation by

investing in growth stock. They focus on companies that are

experiencing significant earnings or revenue growth, rather

than companies that pay out dividends. The hope is that theserapidly growing companies will continue to increase in value,

thereby allowing the fund to reap the benefits of large capital

gains. In general, growth funds are more volatile than other

types of funds, rising more than other funds in bull markets

and falling more in bear markets.


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An income fund is a mutual fund structured to providemaximum income. To achieve this goal, an income fundselects investments that typically provide dividends or

interest. These investments include bonds, especially high-yield bonds; and preferred stocks, which guarantee dividends.Blue-chip stocks often provide income as well, since they arethe stocks of large companies that can afford to pay dividends.An income fund is popular among risk-averse investors,

including the retired, who want to preserve as much of theirassets as possible. An income fund does not grow in value asmuch as a growth fund; this is the trade-off for the currentearnings of the income fund. An income fund typically investsin low-growth sectors of the economy.


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A mutual fund that buys a combination of common stock,

preferred stock, bonds, and short-term bonds, to provide both

income and capital appreciation while avoiding excessive risk.

The purpose of balanced funds (also sometimes called hybridfunds) is to provide investors with a single mutual fund that

combines both growth and income objectives, by investing in

both stocks (for growth) and bonds (for income). Such

diversified holdings ensure that these funds will manage

downturns in the stock market without too much of a loss; the

flip side, of course, is that balanced funds will usually

increase less than an all-stock fund during a bull market.


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An open-end mutual fund which invests only in money

markets. These funds invest in short term (one day to one

year) debt obligations such as Treasury bills, certificates

ofdeposit, and commercial paper. The main goal is the

preservation ofprincipal, accompanied by modest

dividends. The fund's Net Asset Value remains a constant

$1 per share to simplify accounting, but the interest rate

does fluctuate. Money market funds are very liquidinvestments, and therefore are often used by financial

institutions to store money that is not currently invested.


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Industry Specific Schemes

Industry Specific Schemes invest only in the industries

specified in the offer document. The investment of these funds

is limited to specific industries like Infotech, FMCG,

Pharmaceuticals etc.

Index Schemes

Index Funds attempt to replicate the performance of a

particular index such as the BSE Sensex or the NSE 50

Sectoral Schemes

Sectoral Funds are those which invest exclusively in a

specified sector. This could be an industry or a group of

industries or various segments such as 'A' Group shares or

initial public offerings.


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Professional Management

Mutual Funds provide the services of experienced and skilled

professionals, backed by a dedicated investment research teamthat analyses the performance and prospects of companies and

selects suitable investments to achieve the objectives of the

scheme.


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Diversification

Mutual Funds invest in a number of companies across a broad

cross-section of industries and sectors. This diversificationreduces the risk because seldom do all stocks decline at the

same time and in the same proportion. You achieve this

diversification through a Mutual Fund with far less money

than you can do on your own.


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Convenient Administration

Investing in a Mutual Fund reduces paperwork and helps you

avoid many problems such as bad deliveries, delayedpayments and follow up with brokers and companies. Mutual

Funds save your time and make investing easy and

convenient.


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Return Potential

Over a medium to long-term, Mutual Funds have the potential

to provide a higher return as they invest in a diversified basket

of selected securities.


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Low Costs

Mutual Funds are a relatively less expensive way to invest

compared to directly investing in the capital markets becausethe benefits of scale in brokerage, custodial and other fees

translate into lower costs for investors.


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Liquidity

In open-end schemes, the investor gets the money back

promptly at net asset value related prices from the MutualFund. In closed-end schemes, the units can be sold on a stock

exchange at the prevailing market price or the investor can

avail of the facility of direct repurchase at NAV related prices

by the Mutual Fund.


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Transparency

You get regular information on the value of your investment

in addition to disclosure on the specific investments made byyour scheme, the proportion invested in each class of assets

and the fund manager's investment strategy and outlook.


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Flexibility

Through features such as regular investment plans, regular

withdrawal plans and dividend reinvestment plans, you cansystematically invest or withdraw funds according to your

needs and convenience.


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Affordability

Investors individually may lack sufficient funds to invest in

high-grade stocks. A mutual fund because of its large corpusallows even a small investor to take the benefit of its

investment strategy.


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Choice of Schemes

Mutual Funds offer a family of schemes to suit your varying

needs over a lifetime.


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Well Regulated

All Mutual Funds are registered with SEBI and they function

within the provisions of strict regulations designed to protectthe interests of investors. The operations of Mutual Funds are

regularly monitored by SEBI.


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Akin to the Promoter of the company,

Contribution of minimum 40% of net worth

of AMC, Posses sound financial record over five years

period,

Establishes the Fund,

Gets it registered with the SEBI,

Forms a trust, & appoints Board of trustee.


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Holds assets on behalf of unit holders in trust, Trustees are caretaker of unit holders money,

Two third of the trustees shall be independentpersons (not associated with the sponsor), Trustees ensure that the system, processes &

personnel are in place,

Resolves unit holders GRIEVANCES, Appoint AMC & Custodian, & ensure that all

activities are accordance with the SEBIregulation.


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Holds the funds securities in safekeeping,

Settles securities transaction for the fund,

Collects interest & dividends paid onsecurities,

Records information on corporate actions.


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Floats schemes & manages according to SEBI,

Can not undertake any other business activity,

other than portfolio mgmt services, 75% of unit holders can jointly terminate

appointment of AMC,

At least 50% of independent directors,

Chairman of AMC can not be a trustee of any

MF.


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Sell units on the behalf of the fund,

It can be bank, NBFCs, individuals.


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Facilitates financial transactions,

Provides remittance facilities


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Maintains records of unit holders accounts &

transactions

Disburses & receives funds from unit holdertransactions,

Prepares & distributes a/c settlements,

Tax information, handles unit holder

communication, Provides unit holder transaction services.


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Governed by SEBI (Mutual Fund) Regulation 1996

All MFs registered with it, constituted as trusts ( under Indian TrustsAct, 1882)

Bank operated MFs supervised by RBI too

AMC registered as Companies registered under Companies Act, 1956 SEBI- Very detailed guidelines for disclosures in offer document, offer

period, investment guidelines etc.

NAV to be declared everyday for open-ended, every week for closedended

Disclose on website, AMFI, newspapers

Half-yearly results, annual reports

Select Benchmark depending on scheme and compare

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