My whole presentation is on a moderate investor.which is created under assumption and whole process which needs before financial planning and investing first time in mutual fund. it include information about:- what is mutual fund? Types of mutual fund. Different types of investor as their risk appetite. What do you mean by financial planning? Steps in financial planning. Life cycle stage of investor Goal setting An example. Scheme conclusion thank you

1. Mr. Rajan, aged 52 years would like to invest in
Mutual Fund‘s. What product advise you will give him
and why. Explain with illustration .
PRESENTATION

2. Sr. No. Description
1 About Mutual Fund.
2 Working Of Mutual Fund .
3 Various Types Of Mutual Fund.
4 Various Types Of Investor .
5 What Is Financial Planning ?
6 Elements Of Financial Planning .
7 Importance Of Financial Planning.
8 Description Of Life Cycle In Financial Planning.
9 What Is Portfolio?
10 Elements Of Good Portfolio.
11 Mr. Rajan’s Lifecycle Stage .
12 Type Of Investor .
13 Goal Of Mr. Rajan .
14 Portfolio Of Mr Rajan Comprises Of Which Type Of Scheme ?
15 Conclusion .
AGENDA

3. WHAT IS MUTUAL FUND ?
Mutual fund is a vehicle to mobilize moneys from investor, to invest in different
markets and securities, in line with the investment objectives agreed upon,
between the mutual fund and the investor.
The mutual fund offers scheme . Various categories of scheme is called ‘fund’.
The money that raised from investor, ultimately benefits governments,
companies and other entities, directly or indirectly, to raise moneys to invest in
various projects or pay for various expenses.
The investment that an investor makes in a scheme is translated into certain
number of ‘units’ in the scheme .

4. WORKING OF MUTUAL FUND .
INVESTOR
MUTUAL
FUND
SECURITIES
RETURNS

5. VARIOUS TYPES OF MUTUAL FUND
1. Open - Ended Funds, Close - Ended Funds And Interval Funds
2. Actively Managed Funds , Passive Funds and ETF funds
3. Debt, Equity , Balanced Funds And Hybrid Funds

6. VARIOU S TYPES OF MUTUAL FUND contd.
1. Open –Ended funds :-
These funds are open for investors to enter or exit at any
time, even after the NFO.
2. Close Ended Funds :-
Close – Ended Funds have a fixed maturity . Investor can buy
units of these funds only during its NFO.
3. Interval – Funds :-
Has combine features of both Open – Ended and Close –
Ended schemes. They are largely Close - Ended, but Open
Ended at pre – specified intervals.

7. VARIOUS TYPES OF MUTUAL FUND contd.
1. Actively Managed Funds :-
In these type of funds the fund manager has the flexibility to
choose the investment portfolio, within the broad parameters
of the investment objective of e scheme.
2. Passive Funds :-
Passive Funds invest on the basis of a specified index, whose
performance it seeks to track.
3. ETF Funds :-
It is also a passive fund whose portfolio replicates an index or
benchmark such as an equity market index or a commodity
index.

8. VARIOUS TYPES OF
MUTUAL FUND contd.
1. Debt funds:-
In these type of funds the fund manager has the flexibility to
choose the investment portfolio, within the broad parameters
of the investment objective of e scheme.
2. Equity Funds :-
Passive Funds invest on the basis of a specified index, whose
performance it seeks to track.
3. Hybrid Funds :-
It is also a passive fund whose portfolio replicates an index or
benchmark such as an equity market index or a commodity
index.
VARIOUS TYPES OF MUTUAL FUND contd.
1. Debt Funds :-
Scheme with an investment objective that limits them to
investments in debt securities like Treasury Bills, Government
securities, Bonds and Debentures are called Debt Funds.
2. Equity Funds :-
The investment portfolio invested largely in equity shares and
equity – related investments is called Equity Funds .
3. Hybrid Funds :-
Investment that provides for investment in both Debt Funds
and Equity Funds.
3. Balanced Funds :-
Investment that provides for investment in both Bonds Fund
and Equity Funds.

9. VARIOUS TYPES OF INVESTOR
Types of investor depends upon two factor
Risk appetite of
the investor.
Financial situation
of the investor.

10. VARIOUS TYPES OF INVESTOR contd.
Aggressive Investor
Moderate Investor
Conservative Investor
Depending upon these two factor the three types of investors are :-

11. VARIOUS TYPES OF INVESTOR contd.
1. Aggressive Investor
Characteristics
High risk
high return
Time
horizon of
10 years.
Extremely
market
volatility
Portfolio Of Asset
Allocation
Stocks – 85% Bonds – 15%

12. VARIOUS TYPES OF INVESTOR contd.
2. Moderate Investor
Characteristics
Moderate
risk
moderate
return
Time
horizon of
5 years.
Moderate
market
volatility
Portfolio Of Asset
Allocation
Stocks – 65% Bonds – 30% Cash /MMKT – 5%

13. VARIOUS TYPES OF INVESTOR contd.
3. Conservative Investor
Characteristics
Low risk
low return
Time
horizon is
immediate
to longer
Extreme
market
volatility
Portfolio Of Asset
Allocation
Stocks – 25% Bonds – 45% Cash /MMKT – 30%

14. WHAT IS FINANCIAL PLANNING ?
Financial planning is a comprehensive process starting from
interaction with client ,to understanding his future goals to
process of formulating a plan to meet those goals .
Asset
Financial Planning
Achieve Financial Goals

15. SIX STEPS IN FINANCIAL PLANNING
ESTABLISHING
RELATIONSHIP
GOAL
SETTING
ASSESSING
FINANCIAL
STATUS
ASSET
ALLOCATION
PLAN
IMPLEMENTATION REVIEW

16. SIX STEPS IN FINANCIAL PLANNING contd.
1. ESTABLISHING RELATIONSHIP :-
The first step is to establish a client-planner relation and defining the scope of
the task .
There must be trust, commitment, respect and open communication between
Both the parties . (Investor And Planner)
The financial planning standards Board Of India laid down to ensure sense of
Ethics and professional conduct .

17. SIX STEPS IN FINANCIAL PLANNING contd.
2. GOAL SETTING :-
It is very important to set goals in life .
Goal in life assess the financial needs for different points in time in future.
The client knows very well about its social goals like :-
Education of children , Marriage of children, Buying house , Medical needs
retirements and many more.
So, the financial planner should bring immediate goals like :-
Insurance and Emergency fund.

18. SIX STEPS IN FINANCIAL PLANNING contd.
3. ASSESSING FINANCIAL STATUS :-
A detailed assessment is done about asset already in hand , their future
values and balance requirements.
NET WORTH :-
The difference between assetin hand and the current liabilities is known as
the person’s Net worth .
Net worth gives the value of the future asset which helps in building balanced
portfolio for the client .

19. SIX STEPS IN FINANCIAL PLANNING contd.
4. ASSET ALLOCATION PLAN :-
A n asset allocation is done considering income, expenditure, and investible
surplus of the client.
 Investible surplus (Income Statement) :-
This is calculated based on the monthly income and expenditure as well as
investment already committed .
And rest is used for investment than and again .

20. SIX STEPS IN FINANCIAL PLANNING contd.
5. IMPLEMENTATION :-
This is done in line with the contract the planner has with the client.
Depending upon whether it is only an advisory or a structured product or a
portfolio management scheme the planner involves himself with the client to
various degrees .

21. SIX STEPS IN FINANCIAL PLANNING contd.
6. REVIEW AND REBALANCING :-
Financial planning is never a one- time activity.
It requires constant review . A review is suggested at least once a year based
on the following factor :-
Change in
family
situation
Change in risk
profile
Change in
economic
growth
Change in
taxation
policy
Inflation

22. IMPORTANCE OF FINANCIAL PLANNING
It is done to ensure that the right amount of money is available at right time to
meet various financial goals of the investor .
It gives direction to the investor’s spending and creates habit of savings .
It is also helpful to let the investors know in advance ,if some financial goal is
not likely to be fulfilled .
Financial planning thus helps investors realize their aspirations and feel happy.
It also helps the financial planner, in understanding the investor better and
cementing relationship with the investor and the financial planner .

23. STAGES OF LIFE-CYCLE IN FINANCIAL PLANNING
Childhood
Young Unmarried
Young Married
Married With Young
Children
Married With Older
Children
Pre- Retirement
Retirement

24. STAGES OF LIFE-CYCLE IN FINANCIAL PLANNING contd.
Childhood
Dependents on
earning
members.
Focus on
education
Pocket money
cash gifts and
scholarship.
Young
unmarried
Earning stage
Marriage,
house,
transportation
etc.
Short and long
term goals
Young
married
Responsibilities
of spouse
Plans for
upcoming ones
Retirement
Married with
young children
Insurance
needs life and
health.
Pre-school,
foriegn
holidays
Retirement
Married with
older children
Marriage of
children
Pre-retirement
plans
Retirement
Retirement
Corpus to meet
regular
expenses.
Pension
Beat inflation
for the sake of
family

25. WHAT IS A PORTFOILIO ?
The term ‘portfolio’ refers to any combination of financial
Assets such as stocks, bonds and cash.
Portfolio may be held by individual investors and /or managed
by financial professional.
When determining a proper asset allocation one aims at
maximizing the expected return and minimizing the risk.
The monetary value of each asset may influence the
risk/reward ratio of the portfolio.

26. FACTORS OF GOOD PORTFOILIO MANAGEMENT .
1. BALANCED INVESTMENT BASED ON RISK-REWARD RELATIONSHIP
2. CHURN PORTFOLIO
3. DO NOT FORGET INCOME TAX
4. LOAN MANAGEMENT
5. UNDERSTAND THE POWER OF BLACK MONEY
6. BEWARE OF SCAMS

27. FACTORS OF GOOD PORTFOILIO MANAGEMENT contd.
1. BALANCED INVESTMENT BASED ON RISK-REWARD RELATIONSHIP :-
 It is known fact that deposits and certificates that are low risk in
nature also have lower but assured returns.
 Land, gold, financial market not enjoyed high returns.
 High risk comes with high return possibilities .
 One has to balance between the risk and the returns based on life
stage and risk profile.

28. FACTORS OF GOOD PORTFOILIO MANAGEMENT contd .
2. CHURN PORTFOLIO :-
 Portfolio needs constant revision, depending on the economic
situation in the country and the interest rate regime.
 Mutual funds and shares need to be reviewed their performance
 There is a need to weed out the poor performers and include
better performers.

29. FACTORS OF GOOD PORTFOILIO MANAGEMENT contd.
3. DO NOT FORGET INCOME TAX :-
 There is income tax implication on both deposits and loans.
 All tax payers must consider the impact of income tax on every
financial activity.
 Tax benefits of deposits, interest on deposits , loans and interest
on loans.

30. FACTORS OF GOOD PORTFOILIO MANAGEMENT contd.
4. LOAN MANAGEMENT :-
 Take an overall look at the interest rate on the loans as well as
the interest rate on the deposits.
 The income tax angle on both loans and deposits must be
considered before planning investment .

31. FACTORS OF GOOD PORTFOILIO MANAGEMENT contd.
5. UNDERSTAND THE POWER OF BLACK MONEY :-
 Black money is not restricted to income arising out of illegal
activities and corruption but also accounted the unaccounted
cash income of businessmen.
 Such black money cannot be invested in ‘any of the paper’
investment like bank deposits and securities.

32. FACTORS OF GOOD PORTFOILIO MANAGEMENT contd.
6. BEWARE OF SCAMS :-
 It is very tempting to invest in schemes that promise high returns.
 While it is good to look for schemes which will better one’s
returns one needs to be very careful not to fall into the poly of
scammers.

33. MR. RAJAN’S LIFE-CYCLE STAGE.
1. MARRIED WITH YOUNG CHILDREN
2. MARRIED WITH OLDER CHILDREN
3. PRE-RETIREMENT
4. RETIREMENT

34. WHAT TYPE OF INVESTOR MR. RAJAN IS?
As per the lifecycle stage Mr. Rajan is married with young children.
Hence there is need of adequate investment to cover all his
upcoming financial needs or to achieve his planned goals.
So there will be need of investment for :-
 Long Term Goals – Higher Education, Marriage And Retirement.
 Medium Term Goals – Down Payment Of A House
and Foreign Holiday.
MODERATE INVESTOR

35. Now, his current income and expenses are as follows :-
Salary per month = Rs. 1,00,000
Expenses per month = Rs. 45,000
Insurance premium = Rs. 7,000 on a :-
Term insurance policy = Rs. 50 lakhs
Health insurance = Rs. 4 lakhs
PPF contribution per month = Rs. 5,000
Monthly surplus = Rs 43,000
WHAT TYPE OF INVESTOR
MR. RAJAN IS? CONTD.

36. VARIOUS MUTUAL FUND SCHEMES
SCHEME
NAME
Type of
scheme
AUM LOCK-IN
PERIOD
Lumpsum
Amount
(minimum)
SIP
AMOUNT
SWP
AMOUNT
RETURN
(3
YEARS)
SBI MAGNUM
MONTHLY
INCOME PLAN
Balanced
fund
Rs.
1588.76
Crore
Minimum
12 months
Rs.10,000 Rs. 1,000 Rs. 500 8.35%
SBI MAGNUM
MONTHLY
INCOME
FLOATER
Balanced
fund
Rs. 289
Crore
Minimum
1-2 years
Rs.10,000 Rs. 500 Rs. 1000 9.76%
HDFC
BALANCED
FUND
Hybrid
fund
Rs. 18,027
Crore
7-10
YEARS
Rs.10,000 Rs 500 Rs. 500 19.24%
TATA
BALANCED
FUND
Hybrid
fund
Rs. 6,464
Crore
7-10
YEARS
Rs.10,000 Rs 500 Rs 1,000 17.44%
RELIANCE TAX
SAVER
ELSS Rs. 9,983
Crore
3 YEARS Rs.10,000 Rs 500
-
12.31/2
2.08%

37. CONCLUSION
 Every investor should plan their portfolio according to his/her risk appetite.
 Investor should plan his/her investment planning according to life-cycle stage.
 One should choose scheme by comparing performance of past rewards.
 One should include tax saving scheme, regular income scheme and insurance.

38. THANK YOU