1. Distribution
Slide 1©IFBI Session 1
 In this session, you will be able to:
 Describe the benefits, types, and various schemes
offered by Mutual Funds (MFs)
Objectives

2. Distribution
Slide 2©IFBI Session 1
 Represent combined and diversified funds of large
individual investors, having:
 Similar investment goals
 Risk appetites
 Invest in the capital market and money market
securities
 Optimize the returns for the investors
 Pool the resources of investors for a better outlay
 Serve as vehicles for mobilizing savings from individual
investors
Mutual Funds

3. Distribution
Slide 3©IFBI Session 1
 Mutual Fund Sponsors
 Mutual Fund Trust
 Asset Management Company
 Distributors / Agents
 Registrar and Transfer Agents
 Bankers
Structure of Mutual Funds in India

4. Distribution
Slide 4©IFBI Session 1
 Access to professional money managers
 Diversification
 Liquidity
 Tax efficiency
 Equity funds
 Debt funds
 Low transaction costs
 Transparency
 Well-regulated industry
 Convenience of small investments
Benefits of Investing in Mutual Funds

5. Distribution
Slide 5©IFBI Session 1
 Benefit of Handling Mutual Fund Transactions
 Allow banks to earn two types of commission:
 Upfront commission
 Trail fee
 Allow banks to get float funds on accounts maintained by
the MF
Benefits of Investing in Mutual Funds (Contd.)

6. Distribution
Slide 6©IFBI Session 1
 Systematic Investment Plan (SIP)
 Systematic Withdrawal Plan (SWP)
 Systematic Withdrawal of Appreciation Plan (SWAP)
 Offer Document
 Key Information Memorandum (KIM)
 Net Asset Value (NAV)
 Entry/Exit Load
Terms Used in Mutual Fund Transactions

7. Distribution
Slide 7©IFBI Session 1
Types of Mutual Funds

8. Distribution
Slide 8©IFBI Session 1
 Structure Based MFs
 Open-ended funds
 Close-ended funds
 Investment Objective of MFs
 Growth funds
 Income funds
 Balanced funds
 Money Market funds
Types of Mutual Funds (Contd.)

9. Distribution
Slide 9©IFBI Session 1
 Equity related schemes
 Tax saving schemes
 Index schemes
 Sectoral schemes
Types of Mutual Funds (Contd.)

10. Distribution
Slide 10©IFBI Session 1
 Growth option
 Dividend Payout option
 Dividend Reinvestment option
 Systematic Investment option
Plans Offered by Mutual Funds

11. Distribution
Slide 11©IFBI Session 1
Top Asset Management Companies

12. Distribution
Slide 12©IFBI Session 1
 Role of bank in the distribution of MFs:
 Help investors identify an appropriate mix of MF schemes
for their portfolio by using the asset allocation strategies
 Help investors to invest in various schemes of multiple
MFs with a respectable performance record
 Offer investment in MFs through multiple channels:
 Bank branches
 ATMs
 Internet banking
Top Asset Management Companies (Contd.)

13. Distribution
Slide 13©IFBI Session 1
 Apart from the distributing banks, the investors can buy
MFs from:
 Other private and foreign banks who have the mandate to
sell MFs
 Association of Mutual Funds in India (AMFI) certified
brokers
Top Asset Management Companies (Contd.)

14. Distribution
Slide 14©IFBI Session 1
 Benefits offered by banks when distributing MFs to the
investors:
 Statement of account for MF investments
 Balanced fund management schemes
 Offer document, comprising:
 Objectives of the scheme
 Details of the scheme
 Risk diversification
 Yield maximization
 Better returns on investments
Top Asset Management Companies (Contd.)

15. Distribution
Slide 15©IFBI Session 1
 In this session, you learned that:
 MFs represent combined and diversified funds of a large
number of individual investors with similar investment
goals
 The structure of MFs in India comprises the following
components:
 Mutual Fund Sponsors
 Mutual Fund Trust
 Asset Management Company
• Distributors/Agents
• Registrar and Transfer Agents
• Bankers
Summary

16. Distribution
Slide 16©IFBI Session 1
 The benefits of investing in MFs are:
 Access to professional money managers
 Diversification
 Liquidity
 Tax efficiency
 Low transaction costs
 Transparency
 Well-regulated industry
 Convenience of small investments
 NAV is the cumulative market value of the assets of the
fund net of its liabilities
Summary (Contd.)

17. Distribution
Slide 17©IFBI Session 1
 A load is a charge, which AMC may collect on entry
and/or exit from a fund. A load is levied to cover the
upfront cost incurred by AMC for selling the fund
 MF schemes may be classified on the basis of their
structure and their investment objective
 The types of MFs based on structure are:
 Open-ended funds
 Close-ended funds
 The types of MFs based on investment objective are:
 Growth funds
 Income funds
Summary (Contd.)

18. Distribution
Slide 18©IFBI Session 1
 Balanced funds
 Money Market funds
 The various equity related schemes are:
 Tax saving schemes
 Index schemes
 Sectoral schemes
 Some of the important investment options of MFs include:
 Growth option
 Dividend payout option
 Dividend reinvestment option
 Systematic investment plan
Summary (Contd.)