2. Executive Summary
Concept – Mutual Fund
What is Mutual Fund ?
History
Structure of Mutual Fund
Terminologies
Types of Mutual Fund
Benefits
Drawbacks
How and Why to invest in Mutual Fund?
Latest Data
Terminologies
Disclaimer
3. What is Mutual Fund?
A mutual fund is a professionally managed
type of collective investment scheme that
pools money from many investors and
invests in stocks, bonds, short-term money
market instruments and other securities.
4. Example:
If one has Rs.1000 to invest, it may not
fetch very much on its own. But, when it is
pooled with Rs.1000 each from a lot of
other people, then, one could Create a Big
Fund large enough to invest in various
shares and debentures. This is called
Mutual funds.
5. History
•
•
•
•
•
First Phase – 1964-87
UTI was established in 1963
Unit scheme 1964 : The first and the largest scheme
ULIP : launched in 1971
Second Phase-1987-1993 (Entry of Public Sector
Funds)
Entry of public sector mutual funds
First Public sector mutual fund: State bank of India in
1987
Third Phase-1993-2003(Entry of Private Sector
Funds)
•
Emergence of private funds
6. Continued---
•
•
Fourth Phase – since February 2003
SEBI regulation for mutual funds
Dividends exempted from income tax from 1999
8. Types Of Mutual Fund
Schemes
Structure
Investment By
Objective
Income Fund
Open Ended
Growth Fund
Close Ended
Balance Fund
Taxation Fund
Money Market
Fund
9. Continued---
By Structure
By Investment Objective
Open-Ended – anytime enter/exit
Close-Ended Schemes – listed on exchange, redemption after period of
scheme is over.
Equity (Growth) – only in Stocks – Long Term (3 years or more)
Debt (Income) – only in Fixed Income Securities (3-10 months)
Liquid/Money Market – Short-term Money Market (Govt.)
Balanced/Hybrid – Stocks + Fixed Income Securities (1-3 years)
Other Schemes
Tax Saving Schemes
Special Schemes
ULIP
11. De-merits : Mutual Funds
Exit load
No control over costs
No tailor-made portfolio
No assured Returns
Management Risk
12. How To Invest In Mutual
Funds?
Identify your Investment needs
Choose the right mutual fund
Select the ideal mix of schemes
Invest regularly
Keep your taxes in mind
Start early
Get in touch with your mutual fund or your
advisor and start investing
13. Why Invest?
Human Life Cycle
Phase I
Phase II
Phase III
Child’s Marriage
Child’s Education
Housing
Child birth
Marriage
38 yrs
22 yrs
10- 20 yrs
Earning Years
Education
Age- 22 yrs
Post Retirement Years
Age- 60 yrs
14. Start Investing Early
Mr. A
Mr. B
Age 25 years
Age 25 years
Begins investing at 25
Begins investing at 35
Invests Rs. 20,000 @5% p.a
Invests Rs. 25,000 @5% till the
till the age of 60 i.e. for 35 yrs
age of 60 i.e. for 25 yrs
Redeems on his retirement at
Redeems on his retirement at
60
60
15. Who has more?
Is it Mr. A, who invested Rs. 20,000 for 35 years?
OR
Is it Mr. B, who invested Rs. 25,000 for 25 years?
2000000
Earnings at the age of 60
1500000
1000000
500000
0
Mr.A
Mr.B
16. MUTUAL FUND DATA FOR THE MONTH
ENDED - AUG 31 , 2012 ( IN CRORES)
Category
No. of new
schemes
launched
during the
month
Sales
New
Redemption
Existing
schemes
Total
Total
as on Aug 31 ,
2012
as on Jul 31 ,
2012
Inflow/ Outflow
schemes
B
Bank Sponsored
0
0
113605
113605
110618
0
0
0
C
Institutions
0
0
3047
3047
2254
0
0
0
Private Sector & Joint Venture :
Indian
503
236747
237250
232666
0
0
0
Predominantly
Indian
15
1129
248620
249749
241233
0
0
0
Predominantly
Foreign
D
9
0
0
20533
20533
19020
0
0
0
Grand Total
(B+C+D)
24
1632
622552
624184
605791
0R
0
0
17. Buying Mutual Funds
Contacting the Asset Management Company directly
Agents/Brokers
Locate one on AMFI site
Financial planners
Web Site
Request for agent
Bajaj Capital etc.
Insurance agents
Banks
Net-Banking
Phone-Banking
ATMs
Online Trading Account
ICICI Direct
Motilal Oswal, Indiabulls- Send agents
18. Terminologies
o
o
o
o
o
AMC- Asset Management company
SEBI- Securities Exchange Board Of
India
UTI- Unit Trust Of India
ULIP- Unit Linked Insurance plan
AMFI- Association of Mutual funds In
India
19. Disclaimer
Mutual fund investments are subject to
market risks. Please read the offer
document carefully before taking an
investment decision.
