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TRANSCRIPT
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Mutual Funds
A i l t l t hi fi i l lA i l t l t hi fi i l l
Fortune Equity Brokers (India) Ltd.
A simple tool to achieve financial goals..A simple tool to achieve financial goals..
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Wh t i M t l F d ? Wh t i M t l F d ? What is Mutual Funds ? What is Mutual Funds ?
Pools money with
Passed back to
Fund House
Investor
Fund Managers
Returns =g
invest inGenerates
Fortune Equity Brokers (India) Ltd.
Capital Market
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Types of Mutual Funds
By Investment Objectives By Constitution
Equity Hybrid Debt Others Open End IntervalClosed
End
Diversified Fund
ELSS (Tax Equity Oriented
Liquid Funds
Floating Rate Funds Gold ETFs(Saving)
Sectoral Funds
Index Funds
ETFs
Debt Oriented
Monthly Income Plans (MIPs)
Funds
Income Funds
Gilt Funds
Fixed Maturity Plans (FMPs)
Arbitrage Funds
Fund of Funds
Fortune Equity Brokers (India) Ltd.
ETFs
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Mutual Funds Mutual Funds Risk / ReturnRisk / Return
Hybrid & MIPDebt
< Sectoral FundsEquity
Re
turn
>
Arbitrage Funds
Balanced Funds>>
Low Med High
>> Risk > Risk
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Indian Mutual Fund Industry y
Fortune Equity Brokers (India) Ltd.
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Industry Industry Growth Growth -- AUMAUM
Asset Under Management (AUM)
In the last 10 years, AUM has
grown by 22.70% CAGR
Fortune Equity Brokers (India) Ltd.
Source: AMFI
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Worldwide Mutual Fund Assets Worldwide Mutual Fund Assets 30 00
25.77 26.13 24.78 24.6321.64
18.9218.16
20.3422.38 22.95 23.02 21.44
23.07
20.00
25.00
30.00
10.00
15.00
5.00
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
(trillions of U.S. dollars, end of quarter)
2007 2008 2009 2010
Fortune Equity Brokers (India) Ltd.
Source: Investment Company Institute
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MF I d t MF I d t AUM C itiAUM C itiMF Industry MF Industry AUM CompositionAUM Composition
Indian MF Industry World-wide
71.0%
63.0%
60.0%
70.0%
80.0%
Indian MF Industry
41% 40%40%
45%
World-wide
46.5%
29.8%25.7%
33.0%
23 7%30.0%
40.0%
50.0%
60.0%
19%20%
25%
30%
35%
23.7%
3.3% 4.0%
0.0%
10.0%
20.0%
0%
5%
10%
15%
Mar-00 Mar-05 Mar-11
Debt Equity Hybrid/ Others
Sep-10Rs.113,005AUM Rs.149,600 Rs.700,538 USD 23.07 trillion
Fortune Equity Brokers (India) Ltd.
Source: AMFI & Investment Company Institute
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Worldwide Mutual Fund Assets by Worldwide Mutual Fund Assets by yyRegionRegion
Americas;
54%Europe; 33%
Country 2000 2010;Q3 CAGR %
World 11,871 23,696 7.55%
United States 6,965 11,267 5.19%
Africa
France 722 1,669 9.22%
Luxembourg 747 2,438 13.26%
Japan 432 749 5.96%Africa and
Asia / Pacific; 13%
p
India 13.5 123 26.22%
Brazil 149 923 21.20%
R i 0 177 3 508 36 94%
Indias share to World MF AUM = 0.52%
Russia 0.177 3.508 36.94%
( Figures in USD billion)
Fortune Equity Brokers (India) Ltd.
Source: Investment Company Institute
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Indian MF Industry StatisticsIndian MF Industry StatisticsNumber of AMCs: 43Number of AMCs: 43
Number of Schemes in India: 1,413Asset Class No. of Schemes Total Net Assets (Cr.)( )
Debt 848 410,453
Equity 416 199,773
Hybrid 149 59,641Hybrid 149 59,641
Grand Total 1,413 669,868
many schemes are in pipeline ..many schemes are in pipeline.. Number of Schemes in the World:68,863(There are more than 17,600 schemes in US and more than 35,000 schemes inEurope)
Fortune Equity Brokers (India) Ltd.
Source: Accordfintech; Investment Company Institute
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India India -- Category wise breakCategory wise break--upup
Equity Equity No. of
SchemesTotal Net
Assets (Cr.) DebtDebtNo. of
SchemesTotal Net
Assets (Cr.)q yq y ( )Diversified Equity Funds 241 145,625
Index Funds 32 1,483
ETFs Equity 16 1,459
( )Liquid Funds 112 234,841
Floating Rate Funds 17 7,283
FOF - Debt Oriented 14 737
Tax Saving Plans / ELSS 45 23,369
FOF - Equity Oriented 28 4,036
Sectoral Funds54 23,801
Gilt Funds 64 4,283
Income Funds 115 50,347Fixed Maturity Plans (FMPs) & Interval Plans 526 112,963
Grand Total416 199,773 Grand Total 848 410,454
HybridHybrid No. of Schemes Total Net Assets (Cr.)Arbitrage Funds 17 4,163Balanced Funds 48 19,898Capital Protection 20 3,079FOF Hybrid 3 160Monthly Income Plans (MIPs) 53 29,557ETFs Gold 8 2,783
Fortune Equity Brokers (India) Ltd.
Grand Total 149 59,641
Source: Accordfintech
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Top 10 AMCs by AUMTop 10 AMCs by AUMRank Mutual Fund Name Average AUM (Rs Crs)Rank Mutual Fund Name Average AUM (Rs. Crs)
1 RelianceMutualFund 101,5772 HDFCMutualFund 86,2823 ICICI Prudential Mutual Fund 73 4663 ICICIPrudentialMutualFund 73,4664 UTIMutualFund 67,1895 BirlaSunLifeMutualFund 63,6966 SBIMutualFund 41,6727 FranklinTempletonMutualFund 37,8838 KotakMahindraMutualFund 32,2029 DSPBlackRockMutualFund 30,601
l d10 TataMutualFund 22,681Average AUM as on 31 March, 2011
Top 5 AMCs constitute 56% of the AUM, whereas top 10 AMCsconstitute nearly 80% of the Industry AUM
Fortune Equity Brokers (India) Ltd.
Source: AMFI
constitute nearly 80% of the Industry AUM.
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Mutual Fund Performance
Fortune Equity Brokers (India) Ltd.
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Fund Performance Fund Performance -- Equity Equity Absolute Return C d A li d %
Categories No. of FundsNet Assets (Rs. Crs)
Absolute Return % Compound Annualized %
YTD 1 Year 2 Year 3 year 5 Year 7 Year
Diversified-Large cap 52 45,999 -6.73 9.19 32.87 6.67 9.55 19.74
Diversified-Small-Mid cap 50 33,875 -7.48 5.83 45.04 6.01 8.05 21.12
Diversified Multi Cap 110 54,539 -6.57 8.28 35.04 5.78 8.66 19.59
ETFs Equity 16 1,900 -5.23 15.33 39.00 13.59 13.20 18.67
Tax Saving Plans / ELSS 45 23,531 -6.83 7.75 35.28 6.20 7.95 18.47Tax Saving Plans / ELSS 45 23,531 6.83 7.75 35.28 6.20 7.95 18.47
FOF - Equity Oriented 11 1,451 -3.41 8.79 28.34 9.58 10.90 17.66
FOF Overseas 17 2,589 0.07 16.01 27.51 1.37 6.86 9.12
Index Nifty 22 1,080 -6.55 10.24 28.90 4.98 9.20 16.54
I d S 10 400 6 59 10 85 31 75 5 40 9 06 17 36Index - Sensex 10 400 -6.59 10.85 31.75 5.40 9.06 17.36
BSE MIDCAP -8.47 2.74 43.27 1.47 5.09 17.79
BSE SENSEX -6.76 9.89 31.61 5.07 9.95 18.57
S&P CNX Nifty -6.42 10.32 30.15 5.00 10.17 17.61
Fortune Equity Brokers (India) Ltd.
Returns are as on 19 April 2011
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Fund Performance Fund Performance -- Equity Equity Absolute Return Compound Annualized %
Categories No. of FundsCategory
Net Assets% Compound Annualized %
YTD 1 Year 2 Year 3 year 5 Year 7 Year
Sector-Banks 6 2,496 -1.35 28.06 53.56 23.38 25.87 28.08
Sector-Energy 4 5,284 -10.24 -6.52 22.94 0.39 19.10 --
Sector-FMCG 2 119 -1.03 25.10 41.62 15.33 11.35 25.80
Sector-Infrastructure 23 14,866 -8.29 -2.62 28.60 0.99 9.21 18.41
Sector-Media 2 134 -7.94 -4.65 27.17 -1.55 6.87 --
Sector-Pharma 4 830 -5.38 14.72 54.60 23.53 12.71 20.43
Sector-Service 4 713 -7.12 4.51 36.29 3.58 6.87 --
Sector-TECk 4 398 -10.85 8.27 50.80 7.91 8.48 19.12
BSE MIDCAP -8.47 2.74 43.27 1.47 5.09 17.79
BSE SENSEX -6.76 9.89 31.61 5.07 9.95 18.57
S&P CNX Nifty -6.42 10.32 30.15 5.00 10.17 17.61
Fortune Equity Brokers (India) Ltd.
Returns are as on 19 April 2011
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Fund Performance Fund Performance -- Hybrid Hybrid Absolute Returns % Compound Annualized %
Categories No. of FundsNet Assets
Rs. Crs.
Absolute Returns % Compound Annualized %
YTD 6 Month 1 Year 2 Year 3 year 5 Year
Arbitrage- Equity Oriented 16 830 6.67 7.74 7.14 6.76 6.15 6.97
Arbitrage- Debt Oriented 1 3 270 8 27 7 85 6 83 5 60 6 02 7 00Arbitrage- Debt Oriented 1 3,270 8.27 7.85 6.83 5.60 6.02 7.00
Balanced- Debt Oriented 14 7,661 -2.03 -7.65 2.06 11.81 5.22 2.86
Balanced- Equity Oriented 34 11,987 -13.92 -8.84 8.07 27.43 7.45 9.33
Capital Protection 20 3,082 1.25 1.46 4.38 8.16 6.25 --20 3,082 1.25 1.46 4.38 8.16 6.25
FOF Hybrid 3 160 -3.29 -0.45 6.79 20.95 11.95 11.94
Monthly Income Plans (MIPs) 53 29,564 2.45 2.97 5.77 9.59 7.48 7.40
Crisil Balanced Fund Index -12.40 -4.33 8.76 21.17 6.68 9.79
Returns are as on 19 April 2011
Crisil MIP Blended Index 1.45 3.23 6.11 8.09 6.60 7.16
Fortune Equity Brokers (India) Ltd.
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Fund Performance Fund Performance -- DebtDebtNo of Net Assets
Annualised Returns % Compound Annualized (%)Categories No. of Funds
Net Assets Rs. Crs.
(%)
1 Month 3 Month6 Month 1 Year 2 Year 3 Year
Liquid Funds 52 124,291 8.14 7.79 7.34 6.24 5.01 5.90
Ultra Short Term Funds 60 101,777 8.93 8.24 7.44 6.32 5.47 6.34Ultra Short Term Funds 60 101,777 8.93 8.24 7.44 6.32 5.47 6.34
Floating rate Funds - Long Term 7 3,439 9.12 8.54 7.43 6.18 5.73 6.64
Floating rate Funds - Short Term 10 3,466 9.58 8.58 7.81 6.61 5.59 6.57
FOF - Debt Oriented 14 737 22.39 6.65 2.67 5.93 11.02 7.16
Gilt Funds - Long Term 43 3,550 3.05 6.58 6.08 4.96 2.68 6.74g ,
Gilt Funds - Medium Term 3 3 3.95 8.64 6.60 6.19 6.17 7.75
Gilt Funds - Short Term 18 564 4.46 6.13 5.53 4.95 3.49 5.12
Income Funds - Long Term 53 19,318 8.94 7.67 6.72 5.63 4.55 6.94
Income Funds - Medium Term 13 5,661 10.88 8.52 6.80 5.42 4.22 4.44,
Income Funds - Short Term 49 24,469 10.25 8.94 7.22 6.06 5.60 7.44
Fixed Maturity Plans (FMPs) 518 109,718 11.93 8.90 6.63 6.58 11.60 5.79
Crisil Composite Bond Fund Index 6.36 7.48 5.37 5.17 4.16 6.08
Crisil Liquid Fund Index 7.81 7.97 7.59 6.41 4.82 6.15
Fortune Equity Brokers (India) Ltd.
Returns are as on 19 April 2011Crisil Short-Term Bond Fund Index 9.94 8.00 6.21 5.40 4.94 6.90
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Fund Performance Fund Performance -- AnalysisAnalysis
Sensex: Performance since lowest level till nowSensex: Performance since lowest level till now
09 March 2009 19 April 2011 Abs. Returns %
8 160 19 122 134%8,160 19,122 134%
There are 397 equity funds in existence since 09 March 2009
190 funds out-performed Sensex i.e. ~ 48% funds
336 funds offered more than 100% returns i.e. ~ 84% funds
273% is the highest return earned by DSP BR MicroCap Fund
43% is the lowest return earned by Birla SL CEF-Global Prec Metal
Fortune Equity Brokers (India) Ltd.
y
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Fund Performance Fund Performance -- AnalysisAnalysis
Sensex: Performance since previous all time high level till nowSensex: Performance since previous all time high level till now
08 Jan 2008 19 April 2011 Abs. Returns %
20 873 19 122 8 39%20,873 19,122 -8.39%
There are 318 equity funds in existence since 08 Jan 2008
150 funds out-performed Sensex i.e. ~ 47% funds
100 funds offered positive returns i.e. ~ 31% funds
107% is the highest return earned by Franklin Pharma Fund
-65% is the lowest return earned by JM Basic Fund
Fortune Equity Brokers (India) Ltd.
y
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How do I do How do I do Investment Investment Planning?Planning?Planning?Planning?
SStart earlytart earlySS a ea ya ea yIInvest regularlynvest regularlyg yg yPPlan for the futurelan for the future
Fortune Equity Brokers (India) Ltd.
PPlan for the futurelan for the future
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SStart Earlytart EarlySStart Earlytart EarlyStart Investing at age 50yrs 45 yrs 40 yrs 35 yrs 30 yrs 25 yrs
M thl I t t R 5 000Monthly Investment Rs 5,000
Stop Investing at age 60 yrs
Investment Period 10 yrs 15 yrs 20 yrs 25 yrs 30 yrs 35 yrs
Total Investment (Rs)
6.0 lacs 9.0 lacs 12.0 lacs 15.0 lacs 18.0 lacs 21.0 lacs
C t V l (R )1.77 3.25 94.9 50.0 25.2 11.6
Current Value (Rs) crores crores
* Assumes compounded annual returns of 12% over the entire period
R 2 30 !
lacs lacs lacs lacs
the sooner you start, makes a difference!
Difference in returns is almost Rs 2.30 crores! (Investmentamount difference is just Rs. 6 lakhs)
Fortune Equity Brokers (India) Ltd.
The Power of Compounding is the Eighth Wonder of The World Albert Einstein
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II l ll lIInvest Regularlynvest RegularlyInculcate a HABIT to SAVE a certain sum of money each monthy
It is very easy to spend WEALTH, but very difficult to SAVE
We EARN regularly We SPENDregularly
So should we not INVEST
WWeekend tripsEEntertainmentAApparels
regularly?AApparelsLLeisure TTickets - movieHHolidaying
Fortune Equity Brokers (India) Ltd.
Time in the market is more important than timing the market.- Warren Buffett
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PPl f th F tl f th F tA proper planning is required for accomplishing future financial goals
PPlan for the Futurelan for the FutureA proper planning is required for accomplishing future financial goals..
RetirementHousing Children's Education
Childrens Marriage
Dream Car Holiday Abroad
Fortune Equity Brokers (India) Ltd.
Plan for the future because thats where youre going to be spending the rest of your life - Mark Twain
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Systematic Investment Plan (SIP)Systematic Investment Plan (SIP)
It is a method of investing a fixed sum, at a regular interval,in a mutual fund. It is very similar to monthly savingschemes like a recurring monthly deposit / post officed itdepositConvenience Direct-debit option available. Flexibility Start for amount as low as Rs 500 Continue for as long as you want Monthly or Quarterly Option Choice of dates (i.e. 1st/7th/10th/15th/25th etc.) Choice of Tenure (ideal period 10 years)
Fortune Equity Brokers (India) Ltd.
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SIP Performance of Rs 10,000 per monthSIP Performance of Rs 10,000 per monthSIP Performance of Rs 10,000 per monthSIP Performance of Rs 10,000 per month
10 years 15 years
T t l I t t R 12 l kh R 18 l khTotal Investment Rs 12 lakhs Rs 18 lakhs
Scheme Name Present Value
(Rs lakhs)
XIRR (%) Present Value
(Rs lakhs)
XIRR (%)
(Rs. lakhs) (Rs. lakhs)
Reliance Growth Fund75.62 35.03 % 257.72 31.43 %
HDFC Equity Fund 62.97 31.59 % 242.84 30.75 %
Franklin India Prima Plus Fund49.26 26.98 % 175.71 27.08 %
Franklin India Bluechip Fund48.99 26.88 % 121.09 22.91 %
# SIP Returns as on 19 April 2011
Additional Investment of Rs 6 lakhs over 5 yrs; is worth Rs 1.82 crores
Fortune Equity Brokers (India) Ltd.
the sooner you start, makes a difference!
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Demystifying NAV Demystifying NAV Net Asset ValueNet Asset ValueDemystifying NAV Demystifying NAV Net Asset ValueNet Asset ValueWhile selecting a fund, the size of the NAV should not be the criteria, A low NAV need not mean that its a good buy ...
Scheme Name NAV's on Return %
09 Mar, 2009 19 Apr, 20110
Religare AGILE 3.97 6.77 70.53%
LIC Nomura MF Top 100 4.56 8.25 80.69%
HSBC Dynamic 5.77 10.38 79.80%
HSBC Midcap Equity 9.00 21.09 134.16%
Reliance Banking 30.07 108.87 262.07%
HDFC TaxSaver 83.66 234.86 180.74%
HDFC Equity 91.23 282.99 210.21%
Reliance Growth 183.38 464.96 153.55%
Clearly the data suggests that there is no correlation between the NAV size and
Fortune Equity Brokers (India) Ltd.
Clearly the data suggests that there is no correlation between the NAV size andthe returns.
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T i f M l F dT i f M l F dTaxation of Mutual FundsTaxation of Mutual FundsIn mutual funds there are two sources of Income:1. Capital Appreciation: Capital Gain Tax is applicable
You can make a profit by selling the units at a price higher than at which you bought
2. Income Distribution: Dividend Distribution Tax
Dividend Distribution Tax Capital Gains
Individual Corporate Short Term$ Long Term
The fund distributes part of the appreciation to the investors as dividend
Money Market
27.68% (25% + Surcharge & Edu Cess)
27.68% (25% + Surcharge & Edu Cess)
As per Applicable Tax Slab
20%# (with indexation) or 10%#,
hi h i Debt 13 84% 22 15% whichever is lower
Debt Oriented
13.84% (12.5% + Surcharge & Edu Cess)
22.15%(12.5% + Surcharge & Edu Cess)
Equity oriented*
Nil Nil 15%# Nil
Fortune Equity Brokers (India) Ltd.
oriented
* Implies >65% exposure to equity$ Period of holding less than one year
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Contact DetailsContact DetailsContact DetailsContact DetailsKiran Nate - Analyst Mutual FundsT l 91 22 4027 3422 (Di ) M b 98208 39890Tel: +91 22-4027 3422 (Dir), Mob: 98208 39890(E) [email protected] (W) http://www.ffsil.com
In case you have any operational query, please feel free to contact our MF back ffi t office team:
Manohar RautTel: +91 22-4027 3733 (Dir), (E): [email protected] d P tilSandeep PatilTel: +91 22-4027 3642 (Dir), (E): [email protected] WadkarTel: +91 22-4027 3734 (Dir) (E): manisha@ffsil com
Fortune Group2nd Floor K K Chambers Sir P T Marg Fort Mumbai 400 001
Tel: +91 22 4027 3734 (Dir), (E): [email protected]
Fortune Equity Brokers (India) Ltd.
2nd Floor, K K Chambers, Sir P T Marg, Fort, Mumbai, 400 001.
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DisclaimerDisclaimerDisclaimerDisclaimerRisk Factors: Mutual funds, like securities investments, are subject to market risksand there is no guarantee against loss in the schemes or that the schemes objectiveswill be achieved. As with any investment in securities, the NAV of the units issuedunder the schemes can go up or down depending on various factors and forcesaffecting capital markets. Past performance of the Sponsor /the AMC/the MutualFund does not indicate the future performance of the schemes. Please read thescheme information documents of the scheme and the statement of additionalinformation before investing.
Fortune Equity Brokers (India) Ltd.