a small details related to mutual funds

2.  The aim of an investor trading in the stock market
is to make more capital gain and make less loss in
the stock market.
 The biggest challenge to an investor for achieving
this aim is to analyze the trends of share prices of
the company in the stock market.
 The stock market is so volatile that some investors
make fortunes while some suffers huge losses.
 Thus, An investor finds trading in such market very
risky. They require a guidance for dealing in this
market or require such mechanism that can help in
reducing risk in investment.

4.  An Investment Vehicle that pools money
from many investors to purchase securities.
 Under the mutual fund schemes, a large
number of investors come together and pool
the money. This sum is then invested by
professional fund managers according to the
investment objective of the scheme.

5.  The mutual fund entity allows small and
individual investors to get the benefits of a
diversified portfolio.
 The investor who pools the money in mutual
funds are called as unit holders.
 The value of the investment is known as the
net asset value (NAV) of the scheme.

6.  The value of the investment is known as the
net asset value (NAV) of the scheme.
 The NAV is calculated on the value of the
holdings of the Scheme. Investors can redeem
and buy additional units depending upon the
specific nature of the fund and these
transactions take place at values related to
the NAV of the scheme.

7.  Young and Accumulating
 Middle aged with family commitments
 Retired
 Institutions and high net worth individuals

8. According to Maturity Period
•Open Ended Schemes
•Close Ended Schemes
According to Investment Objective
•Equity/Growth oriented Scheme
•Income/Debt oriented scheme
•Balanced Fund
•Money Market or Liquid fund
•Gilt Fund
•Index funds
Other Schemes
•Sector Specific fund
•Tax saving schemes and ELSS (Equity Linked Saving Schemes
•Fund of Funds
•ETFs

9.  Open Ended Schemes
It is available for subscription & repurchases on continuous
bases. These schemes do not have a fixed maturity period. It
is highly liquid in nature.
 Close-ended schemes
A close-ended scheme has a fixed maturity period. For an
e.g. 5-7 years. It is open for subscription at the time of it’s
launch.

10.  Equity/Growth oriented scheme:
The main aim is to provide capital appreciation over
medium-term to long term. The schemes mainly invest in
equities. They carry high risk. This scheme provides various
options like dividend or capital appreciation, etc.
 Income/Debt oriented scheme:
The main aim of this scheme is to provide regular and steady
flow of income. Such schemes invest in fixed income
securities like bonds, debentures, government securities, etc.
These are not affected by the fluctuations in the equity
market.

11.  Balanced Fund:
The main aim is to provide both growth & regular income as
it invests in both equities & fixed income securities in the
proportion stated in the offer document. This scheme is
appropriate for those investors who are looking for moderate
growth.
 Money market or liquid fund:
These schemes invest in safer short-term instruments such
as treasury bills, commercial paper, certificate of deposits,
government securities, etc. Returns fluctuates less as
compared to other schemes.

12.  Gilt fund
These funds invest in government securities only. These
securities carry no default risk. N.A.V. fluctuates due to the
interest rates & other economic factors.
 Index funds
These schemes invest in the securities in the same weight age
including of an Index. N.A.V. of such scheme would rise and
fall as per the rise and fall in the Index, though not exactly by
the same percentage.

13.  Sector- specific fund:
These are the funds which invest in securities of only those
sectors/industries as stated in the offer document. The
returns depend upon the performance of the respective
sector/industry. They are more risky but may provide higher
returns.
 Tax saving schemes & ELSS:
These schemes offers tax rebate to the investors under the
provision of the Income Tax Act, 1961. These schemes are
growth oriented and invest mainly in equities.

14.  Fund Of Funds
A "fund of funds" (FOF) is an investment strategy of holding a
portfolio of other investment funds rather than investing
directly in stocks, bonds or other securities. The target
objective of the scheme is met through the selection of several
other schemes in the portfolio with the desired weights.
 ETFs
ETFs are a type of Mutual Funds that tracks an index
(NIFTY/SENSEX), or a commodity (Gold) or a basket of assets
like an index fund. However unlike regular Mutual Funds, ETF
are listed on exchange & trades like a stock, thus experiencing
price changes throughout the day as it is bought & sold.

15.  It is a plan which allows you to invest in small
amount in mutual fund on regular basis.
 Investing some fixed amount every month or
quarter for the purchase of additional units of
the scheme at N.A.V. based prices.

16.  An investor should take into consideration the
risk & the yield factor after the adjustment of tax
on various instruments while taking decisions.
 Thus the various types can be:

17.  It suits well with both the short-term as well
as long-term investment plans.
 Beneficial for your retirement, child’s
education/marriage plan, etc.
 For immediate needs like repayment of loan,
down payment, etc.
 It reduces the risk & gives optimum returns.
 It provides tax benefits.