1.
MF Guide: concepts
BY: WEALTH BUCKET
India’s top mutual fund platform

2.
So what exactly are Mutual Funds?
PPF
GOLD
BANK DEPOSITS
A mutual fund is a type of financial vehicle
made up of a pool of money collected from
many investors to invest in securities such as
stocks, bonds, money market instruments,
and other assets.
Mutual funds are operated by
professional money managers, who allocate
the fund's assets and attempt to produce
capital gains or income for the fund's
investors.

3.
Why invest through
Mutual funds?

4.
Mutual Funds are good investment options
offering higher return & safety
PPF
GOLD
BANK DEPOSITS
POSTAL SCHEMES
PMS
REAL ESTATE
DIRECT EQUITY
MUTUAL FUND
1.Higher Returns
2.Professionally managed
3.Disciplined Investing.
4.Less/No Lock-in
5.Diversification
6.Convenience

5.
GOLD
BANK DEPOSITS
POSTAL SCHEMES
PMS
REAL ESTATE
DIRECT EQUITY
MUTUAL FUND
Asset classes
Gold Debt Equity
Routes of
investment
Physical gold / Gold bonds Corporate Bonds/Fixed Deposit Direct equity
Drawbacks Physical Gold - Risk of Safety
and Purity
Gold Bonds are limited to lock-
in-period of 5 years means no
liquidity
- Low Liquidity
- No Tax Benefits
- Penalty for withdrawing before
maturity
- Requires experience
and time
- Relatively riskier
Mutual Fund Vs Other Asset Classes
Mutual fund
route
Gold ETF and Gold Fund Debt Mutual fund Equity Mutual fund
Benefits of
investing in
Mutual funds
- Buying limits –
Min. 1 unit through stock
exchange and no upper limit
- High liquidity
- No lockin
- High liquidity
- Tax efficient returns if held for 3
years and above
- Different schemes for different
investment horizon
- Professional
management
- Diversification/ robust
risk management
- High liquidity
Here’s how mutual fund route can help overcome the above drawbacks

6.
Mutual funds have outperformed all other
asset classes in the last 15 years

7.
Types of Mutual Funds

8.
PPF
GOLD
BANK DEPOSITS
POSTAL SCHEMES
PMS
REAL ESTATE
DIRECT EQUITY
MUTUAL FUND
1. Based
on asset
class
Equity Funds Debt Funds
Money
Market Funds
Hybrid Funds Index Funds
Tax-
Saving/ELSS
Funds
Funds of
Funds
Types of Mutual Funds : Based
on asset

9.
Equity Funds
PPF
GOLD
BANK DEPOSITS
POSTAL SCHEMES
Aims to generate higher returns by investing in the
shares of companies of different capitalization.
They generate higher returns than debt funds or
fixed deposits.
Invests in fixed-interest generating securities like
corporate bonds, government securities, treasury bills,
commercial paper and other money market instruments.
The basic reason behind investing in debt funds is to earn
interest income and capita appreciation.
Debt Funds

10.
DIRECT EQUITY
They are short run liquid investments which invests in high
quality money market instruments. It provides investors
with a reasonable returns along with good liquidity over a
period of up to 1 year.
Invests in both debt instruments and equities to achieve
maximum diversification and assured returns. The choice
of hybrid funds depends on your risk preferences and
investment objective.
Market Funds
Hybrid Funds

11.
Many investors are aware of the benefits of diversifying
their portfolio across assets. Index funds often catch their
eyes in this search as they refer to funds that invests in a
wider market index-like the Sensex or Nifty.
An Equity-linked Savings Scheme is a type of equity fund
and the only mutual fund which qualifies for a tax deduction
upto Rs.1.5 lakh under section 80C of the Income Tax Act.
Index Funds
ELSS Funds

12.
Funds of Funds
PPF
GOLD
BANK DEPOSITS
POSTAL SCHEMES
MUTUAL FUND
It is a mutual fund scheme that invests in other
mutual fund schemes. In this, fund manager holds
portfolio of other mutual funds instead of directly
investing in equities or bonds.

13.
2. Based on
Structure
Open-Ended
Funds
Close-Ended
Funds
Types of Mutual Funds : Based
on Structure

14.
Open-end fund is a collective investment scheme that can
issue and redeem shares at any time. An investor will
generally purchase shares in the fund directly from the
fund itself, rather than from the existing shareholders.
A closed-end fund or closed-ended fund is a collective
investment model based on issuing a fixed number of
shares which are not redeemable from the fund.
Open-end Funds
Closed-end Funds

15.
3. Based on
Investment
Growth
Funds
Income
Funds
Liquid
Funds
Types of Mutual Funds : Based
on Investment

16.
A mutual fund that invests in growth stocks (an emerging
company) to attain maximum capital appreciation is a
growth mutual fund. This is why they seek out companies
with proven track record of great revenue growth or
younger companies with potential. On the flip side, the
risk is also on the higher side.
Income funds belong to the family of debt funds as
they mainly invest in government bonds/securities and
money market instruments like a certificate of deposits.
Growth Funds
Income Funds

17.
PPF
GOLD
BANK DEPOSITS
POSTAL SCHEMES
A Liquid fund is a type of debt fund which invests
in debt and money market instruments with a
maturity of up to 91 days. Leading examples of
such short-term investments include government
securities, treasury bills etc.
Liquid Funds

18.
Ways of Investing in MFs:
Lumpsum ,SIP, STP, SWP

19.
Lumpsum
One time bulk investment
Investors has bulk amount
in hand
Timing the market is
important
Buying low and selling high
could yield great profits.
A lump sum amount is defined as a single complete sum of
money. A lump sum investment is of the entire amount at one
go.

20.
SYSTEMATIC INVESTMENT PLAN (SIP)
Systematic Investment Plan, commonly referred to as SIP, allows you to
invest regularly a fixed sum in your favorite mutual fund scheme/s. In
SIP, a fixed amount is deducted from your savings account every month
and directed towards the mutual fund you choose to invest in.
Makes market time irrelevant
Enables Rupee-cost
averaging
Benefits from Power of
Compounding
Lighter on Wallet

21.
BENEFITS OF SIP
Why Why SIP?
Convenience
Rupee Cost
Averaging
Disciplined
Saving
Power of
Compoundi
ng
1/3

22.
Convenience
You can invest in a
disciplined and phased
manner using SIP. It
allows you the
convenience of starting
your investment with as
low as Rs 100.
Rupee Cost
Averaging
No need to time the
market. Buy more units
when markets are low.
This reduces your overall
cost of investment..
BENEFITS OF SIP 2/3

23.
Power of
Compounding
Compound interest
ensures better long-term
benefits compared to one
time investment
Disciplined
Saving
By investing through SIP,
you commit to save
regularly, and every
investment takes you a
step closer to reaching
your financial objectives.
BENEFITS OF SIP 3/3

24.
TYPES OF SIP 1/3

25.
Flexible
SIP
• It is a type of SIP plan that provides an option to decrease or
increase the SIP amount according to your cash flow.
Step-up
SIP
• The amount of investment increases at a pre-defined rate
and period
Perpetual
SIP
• In it the investors can invest periodically in a mutual fund
scheme of their own choice every month for a pre-
determined tenure
TYPES OF SIP 2/3

26.
SIP with free
insurance
• Few fund houses are giving free insurance cover if you do a
long-term SIP with them..
Trigger SIP
• It benefits those investors who are aware of the market
volatility and who have a proper understanding of the financial
market
Pause SIP
• In this type of SIP a facility is provide to investor to put on hold
his payment of sip for a particular time period without
cancellation of sip
TYPES OF SIP 3/3

27.
Systematic Transfer Plan
Power of CompoundingTactical Asset Allocation and
Rebalancing
Helps you to take the
Advantage of the Market
Scenario
Rupee-Cost Averaging
An STP or Systematic Transfer Plan moves a fixed amount of money from one
mutual fund to another at regular intervals. For example an STP can transfer Rs
10,000 each month from Axis Liquid Fund to Axis Bluechip Fund. Typically, an STP is
used to transfer money between liquid or debt fund to an equity fund.

28.
WHY STP?
CONCENTRATION
OF FORCE
COMPETITIVE
ADVANTAGES
CUSTOMER
SATISFACTION
NICHE
MARKETING
PROFITABILITY
ADVANTAGES OF STP 1/3

29.
ADVANTAGES
CONCENTRATION
OF FORCE
Focus core
competencies on
relevant market
segments
CUSTOMER
SATISFACTION
Consumers get what
they want
2/3

30.
PROFITABILITY
NICHE MARKETING
COMPETITIVE
ADVANTAGES
Different groups place
different values on
similar goods
Specific segments with
specific needs
Hertz: Focus on
airport rentals
Enterprise: Focus on
local rentals
ADVANTAGES 3/3

31.
TYPES OF STP
FIXED STP
CAPITAL
APPRECIATION
STP
FLEXI STP
In fixed STP , the investors takes outa fixed some of money from
one investment to another.
In capital appreciation STP , the investors takes the profit part out
of one investment and invest in the other.
In flexi STP , the investor has a choice to transfer a variable amount
. The fixed amount will be the minimum amount and the variable
amount depends upon the volatility in the market.

32.
HOW TO START A STP
Say if a person wants to invest Rs 10 Lakhs in
an equity fund through STP, he will have to first
select a debt fund which allows STP to invest in
that particular equity fund. Generally both the
funds are managed by the same fund
house. After selecting the debt fund invest all
the money that is Rs 10 Lakhs in the debt fund.
Now you have to decide an amount which will
be transferred from debt fund to equity fund.

33.
Systematic Withdrawal Plan
Returns on Investments Allows investors to withdraw
during emergencies
Investors remain invested in the
bulk of the corpus but redeem
only what is required.
Tax-efficient way to
enjoy investment
A systematic withdrawal plan (SWP) is a facility which allows you to withdraw a
fixed amount from your mutual fund every month. You can also do annual, half-
yearly or quarterly withdrawals through SWPs. With every withdrawal, the value of
your investment in the fund is reduced by the market value of the units you have
withdrawn.

34.
DISCIPLINED INVESTING
RUPEE-COST AVERAGING
FIXED INCOME
TAX EFFICIENCY
1/3

35.
DISIPLINED
INVESTING
RUPEE-
COST
AVERAGING
An SWP automatically redeems some mutual fund units every months to
meet your monthly expenses, regardless of market levels. It thus protects
you from withdrawing large amounts due to panic/fear when there are
market corrections and also withdraws money even when markets are
making new highs and thus protects you from the impulse to invest more.
SWPs help investors benefit when they withdraw their investments due to
rupee cost averaging. Rupee cost averaging gives an investor the average
NAV of a mutual fund over several months/years rather than making him
dependent on a NAV at a single point of time.
2/3

36.
FIXED
INCOME
TAX
EFFICCIENCY
A SWP helps an investor get a fixed periodic amount which can help
him/her by get a steady income in his/her retirement years or
managing his/her child’s educational expenses.
Each withdrawal made through an SWP is considered to be a
combination of capital and income. Tax is only payable on the
income component and not the capital component
3/3

37.
SWP AND IMPACT ON FUND VALUE
SITUATION 1(SWP INITIATION))
SWP DATE 01-JAN-17
FUND VALUE RS.5,00,000 (25,000 UNITS *RS.20)
SWP AMOUNT RS.5,000
UNITS REDEEMED 250 UNITS (RS.5,000/20)
UNITS LEFT 24,750 UNITS(25,000-250)
FUND VALUE AFTER SWP RS.4,95,000 (24,750 UNITS*RS20)
1/3

38.
SITUATION 2(MARKET RISE))
SWP DATE 01-FEB-17
SWP AMOUNT RS.5,000
UNITS REDEEMED 238 UNITS (RS.5,000/21)
UNITS LEFT 24,512 UNITS(24,750-238)
FUND VALUE AFTER SWP RS.5,14,750 (24,512 UNITS*RS21)
FUND NAV RS.21
2/3

39.
SITUATION 3(MARKET FALL))
SWP DATE 01-MAR-17
SWP AMOUNT RS.5,000
UNITS REDEEMED 263 UNITS (RS.5,000/19)
UNITS LEFT 24,249 UNITS(24,512 -263)
FUND VALUE AFTER SWP RS.4,60,731 (24,249 UNITS*RS19)
FUND NAV RS.19
3/3

40.
FIXED PERIODIC
WITHDRAWL
APPRECIATION
WITHDRAWL
A fixed periodic withdrawal allows the unit
holder to withdraw a fixed sum on regular
intervals, say monthly. The mutual fund
house will sell units equivalent to the SWP
amount and transfer the amount to the
investor’s account.
In the appreciation withdrawal method,
mutual fund units holder makes the choice
to withdraw capital appreciation on his
fund at a fixed frequency.

41.
Difference between SIP
and Lumpsum

42.
PARAMETER SIP LUMP SUM
INVESTMENT
Investment Regular One time
Falling NAV More recommended
because of cost of
averaging
Less recommended
Required risk
appetite
Low to moderate Moderate to high
Cost of investment Less due to rupee cost
averaging
High as this is one
time large investment
Flexibility of
investment
High Low
Horizon Ideal for short term and
long term
Ideal for long term
SIP VS LUMPSUM

43.
BENEFITS OF SIP OVER
LUMPSUM
No need to time and constantly
watch the market
Rupee cost averaging
Build the habit of investing
Ideal for budding investors
Better past performance
1/3

44.
a. No need to time and
constantly watch the
market
With SIP, your money is spread
over time and only some parts
of your entire investment will
face the market volatility
b. Rupee cost averaging
SIP allows you to invest at
different levels of the market
cycle. When the market is low
the fund manager shift the
investments from one fund to
another and can redeem when
the market is at its peak. It will
help to reduce the per-unit
cost of buying the units.
c. Build the habit of
investing
When you initiate SIP, you
invest a manageable but fixed
sum in mutual fund scheme,
instilling saving habit in you.
BENEFITS OF SIP OVER LUMPSUM 2/3

45.
d. Ideal for budding
investors
If you are someone who has
just started a career, then
starting SIP is one way to enter
the world of investing. This way
you gain exposure to equities
with a nominal amount. Later,
you can venture to riskier but
potent equity schemes if it
suits your investment needs.
e. Better past
performance
SIP investments have
consistently earned higher
long-term (5+ years) returns
compared to lumpsum
investments.
BENEFITS OF SIP OVER LUMPSUM 3/3

46.
Difference between SIP,
STP and SWP

47.
SIP SWP
STP
Investing a fixed
amount in a MF at
pre-defined
intervals
Periodic transfer of
fixed amount from one
scheme to another
scheme
Withdraw
designated some of
money from the
fund account at pre-
defined intervals

48.
PARAMETERS SIP STP SWP
Investment, Transfer,
& Withdrawal
In this mode, money is
invested in one scheme at
regular intervals in small
amounts
In this mode, money is
transferred from one
scheme to another at
regular intervals.
In this mode, money is
withdrawn from the
Mutual Fund scheme at
regular intervals.
Tax Applicability
Tax is not applicable as the
money is invested in a
scheme
Tax is applicable as money
transferred is considered
as a redemption
Tax is applicable as each
withdrawal is considered
as a redemption
Advantages
Power of Compounding,
Rupee cost Averaging,
Disciplined Investment
Approach
Consistent Returns,
Rebalancing Portfolio,
Averaging of cost
Regular flow income
Avoids market fluctuations

49.
How to invest in Mutual
funds

50.
Step1 Go to Wealthbucket.in .Create / login into your free account by
filling your e-mail and password.

51.
Step2 Complete online KYC for investing (if you don’t have one)

52.
Step 3 Start investing by clicking on “invest now” option.
click

53.
Step 4 Search for the mutual funds you wish to invest in.
Searc
h

54.
Step 5 After selecting the mutual fund click on “invest now” option.
click

55.
Step 6 Fill the given details of mode of investment (monthly SIP/
Lumpsum) and click on “place order”.
Select
click
Select the date of SIP*
*your money will be deducted from
your account on this date everyday

56.
Step 7 After confirming all the investment details properly. click on
“pay”
click
To automate the SIP payment
add mandate id in your net
banking under the biller section

57.
Step 8 Check all your payment details and click on “pay” option.
click

58.
Step 9 Investment is done. You can check all your transactions

59.
Top mutual funds

60.
Top performing AMCs

61.
Axis Blue Chip Fund
Launched on : 05 Jan 2010
Category : India fund large cap
AUM : ~ Rs 5,700 cr .*
Return : 3 year : 15.43% 5 year : 11.71%*
Invests in : large cap companies
Risk : Average
* as on Jul 2019

62.
ICICI Prudential Blue Chip Fund
Launched on : May 23,2008
Category : India fund large cap
AUM : ~ Rs 22,000 cr .*
Return : 3 year : 12.79% 5 year : 11.14%*
Invests in : large cap companies
Risk : low
* as on Jul 2019

63.
Mirae Asset Emerging Blue Chip Fund
Launched on : July 09,2010
Category : Equity-large and midcap
AUM : ~ Rs 7,600 cr .*
Return : 3 year : 17.16% 5 year : 19.66%*
Invests in : large and midcap companies
Risk : low
* as on Jul 2019

64.
Kotak Standard Midcap Fund
Launched on : Sep 11,2009
Category : Equity-multicap
AUM : ~ Rs 26,000 cr .*
Return : 3 year : 14.07% 5 year : 14.73%*
Invests in : Multicap companies
Risk : Below average
* as on Jul 2019

65.
Kotak Emerging Equity Scheme
Launched on : Mar 30,2007
Category : Equity-midcap
AUM : ~ Rs 4,300 cr .*
Return : 3 year : 10.35% 5 year : 15.57%*
Invests in : Midcap companies
Risk : Below average
* as on Jul 2019

66.
L&T Midcap Fund
Launched on : Sep 11,2009
Category : Equity-midcap
AUM : ~ Rs 5,000 cr .*
Return : 3 year : 12.00% 5 year : 14.61%*
Invests in : Midcap companies
Risk : Below average
* as on Jul 2019

67.
HDFC Small Cap fund
Launched on : Apr 03,2008
Category : Equity: smallcap
AUM : ~ Rs 8,400 cr .*
Return : 3 year : 13.89% 5 year : 14.27%*
Invests in : Smallcap companies
Risk : Below average
* as on Jul 2019

68.
Aditya Birla Sun Life Tax Relief 96
Launched on : March 06,2008
Category : India fund ELSS (Tax savings)
AUM : ~ 8,900 cr*.
Return : 3 year -11.16%, 5 year -13.32%*
Invests in : Small cap ,midcap & large cap
Risk : Average * as on Jul 2019

69.
Axis Long Term Equity Fund
Launched on : Dec 29,2009
Category : Equity - ELSS
AUM : ~ Rs 19,800 cr.*
Return: 3 year : 13.94% 5 year : 14.40%*
Invests in : Equity and equity related
instruments
Risk : Low * as on Jul 2019

70.
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funds with WEALTH
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