Slide 1

MUTUAL FUNDA mutual fund is a trust that pools the savings of a number of investors who share a common financial goal.

The money thus collected is then invested in capital market instruments such as shares ,debentures and other securities.

The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them. Thus the mutual fund is the most suitable investment for the common man as it offers an opportunity to investment in a diversified, professionally managed basket of securities at a relatively low cost.

Flow chart of working of mutual fund

Organisation of mutual fundTheOrganization of a Mutual Fundis how the mutual funds are controlled. A number of entities are involved in the Organization of a Mutual Fund. This helps in the proper management of the mutual fund portfolio.1. SEBI:The primary aim of the Securities Exchange Board of India is to protect the interest of the mutual fund investors. All mutual funds, private sector and public sector are regulated by the guidelines of the SEBI. The Asset Management Company managing the funds has to be approved by the SEBI.

2. Mutual Fund Shareholders:The Mutual Fund Shareholders, like the other share holders have the right to vote. The voting rights include, the right to elect directors during the directorial elections, voting right to approve the alterations investment advisory contract pertaining to the fund and provide approval for changing investment objectives or policies3. Board of directors:The Board of directors supervise the functional activities, which include approval of the contract Asset Management Company and other various service providers.

4. Investment management company or Asset Management Company:This body handles the mutual fund portfolio as per the objectives and policies mentioned in the prospectus.5. Custodians:The custodians of the mutual funds protect the portfolio securities. Mostly qualified bank custodians are used for mutual funds.6. Transfer Agents:The transfer agent for the purpose of maintaining records and similar functions. The maintenance of the shareholder's accounts, calculation of dividends to the be disbursed, sending information to the shareholders about the account statements, notices, and income tax information.7. Trustee: The mutual fund is required to have an independent board of trustees, i.e.,two third of the trustees should be independent persons who are not associated with the sponsors in any matter.8. Sponsor: The sponsor should contribute at least 40% to the net worth of the asset management company. However, if any person hold 40% or more of the net worth of an AMC shall be a sponsor and will be required to fulfill the eligibility criteria in the mutual fund regulations.9. Unit holder: they are the party to whom the mutual fund is sold. They are the ultimate beneficiary of the income earned by the mutual fund. Advantage of mutual fund1.Flexibility:The investments pertaining to the Mutual Fund offers the public a lot of flexibility by means of dividend reinvestment, systematic investment plans and systematic withdrawal plans2.Affordability:The Mutual funds are available in units. Hence they are highly affordable and due to the very large principal sum, even the small investors are benefited by the investment scheme.3.Liquidity:In case of Open Ended Mutual Fund schemes, the investors have the option of redeeming or withdrawing money at any point of time at the current rate of net value asset.4.Diversification:The risk pertaining to the Mutual Funds is quite low as the total investment is distributed in several industries and different stocks.5.Professional Management:The Mutual Funds are professionally managed. The experienced Fund Managers pertaining to the Mutual Funds examine all options based on research and experience.6.Potential of return:The Fund Managers of the Mutual Funds gather data from leading economists and financial analysts. So they are in a better position to analyze the scopes of lucrative return from the investments.7.Low Costs:The fees pertaining to the custodial, brokerage, and others is very low.8.Regulated for investor protection:The Mutual Funds sector is regulated by the Securities Exchange Board of India (SEBI) to safeguard the rights of the investor.

The drawback of mutual fund1. Fees and commissions:The Mutual funds charge administrative fees to meet the daily expenses. Many funds charge brokerage or 'loads' to pay financial planners or financial consultants, brokers. In case a shareholder does not use the services of financial adviser, he still has to pay a sales commission.

2.No Guarantees:All investments bear risk factors. The Mutual Funds are no different. It depends on the stock market. A fall in the stock market would trigger a fall in the value of the mutual fund shares. Although the risk factor pertaining to Mutual funds are much lower compared to Mutual Funds.

3.Taxes:The proceeds from the sale of mutual funds are taxable, even if the same is reinvested in mutual funds.

4.No Insurance:The Mutual funds are regulated by the central government. However mutual funds are still not insured against losses.

5.Trading Limitations:The Mutual Funds usually have high liquidity, but most of the mutual funds, such as open-ended funds, are bought or sold at the end of the day

6.Loss of Control:In case, if the mutual funds are managed by the investor himself, the portfolio management may go bad and have an adverse effect on the earnings from the investment.

7.Inefficiency of Cash Reserves:The Mutual Funds maintain big cash reserves, for situations such as a number of large withdrawals. The investors are provided with liquidity, and a major portion of the financial resources is maintained as cash, and it is not invested in some assets.

8.Management risk:The investment pertaining to the Mutual Funds depends on the fund manager and his selection of the mutual fund portfolio, which is based on speculation. If things do not go as expected, the investments may not earn enough money.

Characteristic of mutual fund1. Open-end Fundsa. Investors buy and sell shares back to the fund itselfb. There is no limit on the number of shares the fund can issuec. NET ASSET VALUE (NAV)Defined as the total market value of all securities held by the fund less liabilities, divided by the number of fund shares outstanding.

Net asset value exampleExample: NAVXYZ Mutual Fund owns assets totaling $10M and liabilities equal to $500,000 with 500,000 shares outstanding Therefore, NAV is: $10,000,000 - $500,000 / 500,000 $19/share

2. Closed-end Fundsa. A fixed number of shares outstandingb. 100 Closed-end fundsc. $8 billion market value3. Investment Trustsa. Interest is an unmanaged pool of investmentsb. Usually consist of corporate, government, or municipal bonds

4. Load or No Loada. Load FundCharges a commission when shares are bought (7 - 8 1/2% or more)b. No Load FundNo sales charges are levied

5. Other fees and Costsa. Professional Management Fee.25 to 1.75 percent of the average dollar amount of assets under management

Types of fund (equity)1. GrowthGoal is capital appreciation2. Maximum GrowthHighly speculative, seeking large profits from capital gainsa. Often buy stocks of small, unseasoned companiesb. Highly speculative

3. IncomeCURRENT income is main objectivea. Interest incomeb. Dividend income4. Balanced FundsObjective is to earn both capital gains and current incomea. High-grade common stocks (60 - 75%)b. Fixed income securities (25 - 40%)

5. Small CompanyInvest in small companies that usually have sales of $100 million or less.6. International Can invest in one region or area of the worldCan invest in specific countryBond FundsObjective is to invest in bondsa. Income is primary objectiveb. Two advantagesLiquidityDiversification

6. Money Market FundsOffers the individual investor access to high-yielding money market instruments without having to pay $100,000 denominationsa. Bank CDsb. Treasury Billsc. Commercial Paper7. Dual FundsClosed-end Funds with two types of sharesa. INCOME shares (Senior) which receive two times income as Juniorb. CAPITAL shares (Junior) which receive two times the capital gains as Senior

8. Specialty Funds - Single Industrya. Option tradingb. Commodity fundsc. Oil drillingd. Cattle fundse. Electronicsf. Goldg. Chemicalsh. Health

Special services1. Saving PlansInvestor adds funds on a regular basis2. Automatic Reinvestment PlansDividends and capital gains are reinvested in additional shares3. Regular IncomeThrough withdrawal plans, the investor can receive periodic repayment or incomeShares or Dollars

4. Conversion PrivilegesAllows the investor the right to switch from one fund to anothera. Must confine switches within the same family of fundsb. Usually no transfer charges5. Check Writing Privilegesa. Shareholders have the right to write checks drawn on the Mutual Fund accountb. Normally checks must be written for at least $500c. Almost all Money Funds have this privilege

The mutual fund universe can be divided into six basic styles:Small cap growth fundsLarge cap growth fundsSmall cap value Large cap valueForeign fundsFixed income funds

Various mutual fund in India1. State bank of India mutual fund2. ICICI prudential mutual fund3. TATA mutual fund4. HDFC mutual fund5. Birla Sun Life mutual fund6. Reliance mutual fund7. Kotak Mahindra mutual fundThank youThe EvolutionThe formation of Unit Trust of India marked the evolution of the Indian mutual fund industry in the year 1963. The primary objective at that time was to attract the small investors and it was made possible through the collective efforts of the Government of India and the Reserve Bank of India. The history of mutual fund industry in India can be better understood divided into following phases:Phase 1. Establishment and Growth of Unit Trust of India - 1964-87Unit Trust of India enjoyed complete monopoly when it was established in the year 1963 by an act of Parliament. UTI was set up by the Reserve Bank of India and it continued to operate under the regulatory control of the RBI until the two were de-linked in 1978 and the entire control was tranferred in the hands of Industrial Development Bank of India (IDBI). UTI launched its first scheme in 1964, named as Unit Scheme 1964 (US-64), which attracted the largest number of investors in any single investment scheme over the years.

UTI launched more innovative schemes in 1970s and 80s to suit the needs of different investors. It launched ULIP in 1971, six more schemes between 1981-84, Children's Gift Growth Fund and India Fund (India's first offshore fund) in 1986, Mastershare (Inida's first equity diversified scheme) in 1987 and Monthly Income Schemes (offering assured returns) during 1990s. By the end of 1987, UTI's assets under management grew ten times to Rs 6700 crores.Phase II. Entry of Public Sector Funds - 1987-1993The Indian mutual fund industry witnessed a number of public sector players entering the market in the year 1987. In November 1987, SBI Mutual Fund from the State Bank of India became the first non-UTI mutual fund in India. SBI Mutual Fund was later followed by Canbank Mutual Fund, LIC Mutual Fund, Indian Bank Muatual Fund, Bank of India Mutual Fund, GIC Mutual Fund and PNB Mutual Fund. By 1993, the assets under management of the industry increased seven times to Rs. 47,004 crores. However, UTI remained to be the leader with about 80% market share.1992-93Amount MobilisedAssets Under ManagementMobilisation as % of gross Domestic Savings

UTI11,05738,2475.2%

Public Sector1,9648,7570.9%

Total13,02147,0046.1%

Phase III. Emergence of Private Secor Funds - 1993-96The permission given to private sector funds including foreign fund management companies (most of them entering through joint ventures with Indian promoters) to enter the mutal fund industry in 1993, provided a wide range of choice to investors and more competition in the industry. Private funds introduced innovative products, investment techniques and investor-servicing technology. By 1994-95, about 11 private sector funds had launched their schemes.Phase IV. Growth and SEBI Regulation - 1996-2004The mutual fund industry witnessed robust growth and stricter regulation from the SEBI after the year 1996. The mobilisation of funds and the number of players operating in the industry reached new heights as investors started showing more interest in mutual funds.

Invetors' interests were safeguarded by SEBI and the Government offered tax benefits to the investors in order to encourage them. SEBI (Mutual Funds) Regulations, 1996 was introduced by SEBI that set uniform standards for all mutual funds in India. The Union Budget in 1999 exempted all dividend incomes in the hands of investors from income tax. Various Investor Awareness Programmes were launched during this phase, both by SEBI and AMFI, with an objective to educate investors and make them informed about the mutual fund industry.

In February 2003, the UTI Act was repealed and UTI was stripped of its Special legal status as a trust formed by an Act of Parliament. The primary objective behind this was to bring all mutal fund players on the same level. UTI was re-organised into two parts: 1. The Specified Undertaking, 2. The UTI Mutual Fund

Presently Unit Trust of India operates under the name of UTI Mutual Fund and its past schemes (like US-64, Assured Return Schemes) are being gradually wound up. However, UTI Mutual Fund is still the largest player in the industry. In 1999, there was a significant growth in mobilisation of funds from investors and assets under management which is supported by the following data:GROSS FUND MOBILISATION (RS. CRORES)

FROMTOUTIPUBLIC SECTORPRIVATE SECTORTOTAL

01-April-9831-March-9911,6791,7327,96621,377

01-April-9931-March-0013,5364,03942,17359,748

01-April-0031-March-0112,4136,19274,35292,957

01-April-0131-March-024,64313,6131,46,2671,64,523

01-April-0231-Jan-035,50522,9232,20,5512,48,979

01-Feb.-0331-March-03*7,259*58,43565,694

01-April-0331-March-04-68,5585,21,6325,90,190

01-April-0431-March-05-1,03,2467,36,4168,39,662

01-April-0531-March-06-1,83,4469,14,71210,98,158

ASSETS UNDER MANAGEMENT (RS. CRORES)

AS ONUTIPUBLIC SECTORPRIVATE SECTORTOTAL

31-March-9953,3208,2926,86068,472

Phase V. Growth and Consolidation - 2004 OnwardsThe industry has also witnessed several mergers and acquisitions recently, examples of which are acquisition of schemes of Alliance Mutual Fund by Birla Sun Life, Sun F&C Mutual Fund and PNB Mutual Fund by Principal Mutual Fund. Simultaneously, more international mutal fund players have entered India like Fidelity, Franklin Templeton Mutual Fund etc. There were 29 funds as at the end of March 2006. This is a continuing phase of growth of the industry through consolidation and entry of new international and private sector players.

Types of mutual fundsMost funds have a particular strategy they focus on when investing. For instance, some invest only in Blue Chip companies that are more established and are relatively low risk. On the other hand, some focus on high-risk start up companies that have the potential for double and triple digit growth.Finding a mutual fundthat fits your investment criteria and style is important.

Types of mutual funds are:Value stocksStocks from firms with relative low Price to Earning (P/E) Ratio, usually pay good dividends. The investor is looking for income rather than capital gains.Growth stockStocks from firms with higher low Price to Earning (P/E) Ratio, usually pay small dividends. The investor is looking for capital gains rather than income.Based on company size, large, mid, and small capStocks from firms with various asset levels such as over $2 Billion for large; in between $2 and $1 Billion for mid and below $1 Billion for small.Income stockThe investor is looking for income which usually come from dividends or interest. These stocks are from firms which pay relative high dividends. This fund may include bonds which pay high dividends. This fund is much like the value stock fund, but accepts a little more risk and is not limited to stocks.Index fundsThe securities in this fund are the same as in an Index fund such as the Dow Jones Average or Standard and Poor's. The number and ratios or securities are maintained by the fund manager to mimic the Index fund it is following.Enhanced indexThis is an index fund which has been modified by either adding value or reducing volatility through selective stock-picking.Stock market sectorThe securities in this fund are chosen from a particular marked sector such as Aerospace, retail, utilities, etc.Defensive stockThe securities in this fund are chosen from a stock which usually is not impacted by economic down turns.InternationalStocks from international firms.Real estateStocks from firms involved in real estate such as builder, supplier, architects and engineers, financial lenders, etc.Socially responsibleThis fund would invests according to non-economic guidelines. Funds may make investments based on such issues as environmental responsibility, human rights, or religious views. For example, socially responsible funds may take a proactive stance by selectively investing in environmentally-friendly companies or firms with good employee relations. Therefore the fund would avoid securities from firms who profit from alcohol, tobacco, gambling, pornography etc.Balanced fundsThe investor may wish to balance his risk between various sectors such as asset size, income or growth. Therefore the fund is a balance between various attributes desired.Tax efficientAims to minimize tax bills, such as keeping turnover levels low or shying away from companies that provide dividends, which are regular payouts in cash or stock that are taxable in the year that they are received. These funds still shoot for solid returns; they just want less of them showing up on the tax returns.ConvertibleBonds or Preferred stock which may be converted into common stock.Junk bondBonds which pay higher that market interest, but carry higher risk for failure and are rated below AAA.Mutual funds of mutual fundsThis funds that specializes in buying shares in other mutual funds rather than individual securities.Closed endThis fund has a fixed number of shares. The value of the shares fluctuates with the market, but fund manager has less influence because the price of the underlining owned securities has greater influence.Exchange traded funds (ETFs)Baskets of securities (stocks or bonds) that track highly recognized indexes. Similar to mutual funds, except that they trade the same way that a stock trades, on a stock exchange.t's important to understand that each mutual fund has different risks and rewards. In general, the higher the potential return, the higher the risk of loss. Although some funds are less risky than others, all funds have some level of risk - it's never possible todiversifyaway all risk. This is a fact for all investments.

Each fund has a predetermined investment objective that tailors the fund's assets, regions of investments and investment strategies. At the fundamental level, there are three varieties of mutual funds:1)Equityfunds (stocks)2)Fixed-incomefunds (bonds)3)Money marketfunds

All mutual funds are variations of these three asset classes. For example, while equity funds that invest in fast-growing companies are known as growth funds, equity funds that invest only in companies of the same sector or region are known as specialty funds.

Let's go over the many different flavors of funds. We'll start with the safest and then work through to the more risky.

Money Market FundsThe money market consists of short-term debt instruments, mostlyTreasury bills. This is a safe place to park your money. You won't get great returns, but you won't have to worry about losing yourprincipal. A typical return is twice the amount you would earn in a regular checking/savings account and a little less than the averagecertificate of deposit(CD).

Bond/Income FundsIncome funds are named appropriately: their purpose is to provide current income on a steady basis. When referring to mutual funds, the terms "fixed-income," "bond," and "income" are synonymous. These terms denote funds that invest primarily in government and corporate debt. While fund holdings may appreciate in value, the primary objective of these funds is to provide a steady cashflow to investors. As such, the audience for these funds consists of conservative investors and retirees. (Learn more inIncome Funds 101.)

Bond funds are likely to pay higher returns than certificates of deposit and money market investments, but bond funds aren't without risk. Because there are many different types of bonds, bond funds can vary dramatically depending on where they invest. For example, a fund specializing in high-yieldjunk bondsis much more risky than a fund that invests in government securities. Furthermore, nearly all bond funds are subject to interest rate risk, which means that if rates go up the value of the fund goes down.

Balanced FundsThe objective of these funds is to provide a balanced mixture of safety, income andcapital appreciation. The strategy of balanced funds is to invest in a combination of fixed income and equities. A typical balanced fund might have a weighting of 60% equity and 40% fixed income. The weighting might also be restricted to a specified maximum or minimum for each asset class.

A similar type of fund is known as an asset allocation fund. Objectives are similar to those of a balanced fund, but these kinds of funds typically do not have to hold a specified percentage of any asset class. The portfolio manager is therefore given freedom to switch the ratio of asset classes as the economy moves through thebusiness cycle.

Equity FundsFunds that invest in stocks represent the largest category of mutual funds. Generally, the investment objective of this class of funds is long-term capital growth with some income. There are, however, many different types of equity funds because there are many different types of equities. A great way to understand the universe of equity funds is to use astyle box, an example of which is below.

The idea is to classify funds based on both the size of the companies invested in and the investment style of the manager. The term value refers to a style of investing that looks for high quality companies that are out of favor with the market. These companies are characterized by lowP/Eandprice-to-book ratiosandhigh dividend yields. The opposite of value is growth, which refers to companies that have had (and are expected to continue to have) strong growth in earnings, sales and cash flow. A compromise between value and growth is blend, which simply refers to companies that are neither value nor growth stocks and are classified as being somewhere in the middle.

For example, a mutual fund that invests inlarge-capcompanies that are in strong financial shape but have recently seen their share prices fall would be placed in the upper left quadrant of the style box (large and value). The opposite of this would be a fund that invests in startup technology companies with excellent growth prospects. Such a mutual fund would reside in the bottom right quadrant (small and growth). (For further reading, check outUnderstanding The Mutual Fund Style Box.)

Global/International FundsAninternational fund(or foreign fund) invests only outside your home country. Global funds invest anywhere around the world, including your home country.

It's tough to classify these funds as either riskier or safer than domestic investments. They do tend to be more volatile and have uniquecountryand/orpolitical risks. But, on the flip side, they can, as part of a well-balanced portfolio, actually reduce risk by increasing diversification. Although the world's economies are becoming more inter-related, it is likely that another economy somewhere is outperforming the economy of your home country.

Specialty FundsThis classification of mutual funds is more of an all-encompassing category that consists of funds that have proved to be popular but don't necessarily belong to the categories we've described so far. This type of mutual fund forgoes broad diversification to concentrate on a certain segment of the economy.

Sector fundsare targeted at specific sectors of the economy such as financial, technology, health, etc. Sector funds are extremelyvolatile. There is a greater possibility of big gains, but you have to accept that your sector may tank.

Regional fundsmake it easier to focus on a specific area of the world. This may mean focusing on a region (say Latin America) or an individual country (for example, only Brazil). An advantage of these funds is that they make it easier to buy stock in foreign countries, which is otherwise difficult and expensive. Just like for sector funds, you have to accept the high risk of loss, which occurs if the region goes into a badrecession.

Socially-responsiblefunds (or ethical funds) invest only in companies that meet the criteria of certain guidelines or beliefs. Most socially responsible funds don't invest in industries such as tobacco, alcoholic beverages, weapons or nuclear power. The idea is to get a competitive performance while still maintaining a healthy conscience.

Index FundsThe last but certainly not the least important areindex funds. This type of mutual fund replicates the performance of a broad market index such as theS&P 500orDow Jones Industrial Average(DJIA). An investor in an index fund figures that most managers can't beat the market. An index fund merely replicates the market return and benefits investors in the form of low fees. (For more on index funds, check out ourIndex Investing Tutorial.)

A mutual fund scheme can be classified intoopen-endedscheme orclose-endedscheme depending on its maturity period.Open-ended FundAnopen-ended Mutual fundis one that is available for subscription and repurchase on acontinuous basis. These Funds do not have afixed maturity period. Investors can conveniently buy and sell units atNet Asset Value (NAV)related prices which are declared on a daily basis. The key feature of open-end schemes is liquidity.Close-ended FundA close-ended Mutual fund has astipulated maturityperiod e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.Fund according to Investment Objective:A scheme can also be classified as growth fund, income fund, or balanced fund considering its investment objective. Such schemes may be open-ended or close-ended schemes as described earlier. Such schemes may be classified mainly as follows:Growth / Equity Oriented SchemeThe aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time.Income / Debt Oriented SchemeThe aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations.Balanced FundThe aim of balanced funds is to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. These are appropriate for investors looking for moderate growth. They generally invest 40-60% in equity and debt instruments. These funds are also affected because of fluctuations in share prices in the stock markets. However, NAVs of such funds are likely to be less volatile compared to pure equity funds.Money Market or Liquid FundThese funds are also income funds and their aim is to provide easy liquidity, preservation of capital and moderate income. These schemes invest exclusively in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bank call money, government securities, etc. Returns on these schemes fluctuate much less compared to other funds. These funds are appropriate for corporate and individual investors as a means to park their surplus funds for short periods.Gilt FundThese funds invest exclusively in government securities. Government securities have no default risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as is the case with income or debt oriented schemes.Index FundsIndex Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty), etc These schemes invest in the securities in the same weightage comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index, though not exactly by the same percentage due to some factors known as "tracking error" in technical terms. Necessary disclosures in this regard are made in the offer document of the mutual fund scheme. There are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges.Wide variety of Mutual Fund Schemes exist to cater to the needs such as financial position, risk tolerance and return expectations etc. The table below gives an overview into the existing types of schemes in the Industry. By Structure Open - Ended Schemes Close - Ended Schemes Interval Schemes By Investment Objective Growth Schemes IncomeSchemes Balanced Schemes Money Market Schemes Other Schemes Tax Saving Schemes Special Schemes Index Schemes Sector Specfic SchemesTypes of Mutual FundMutual fund schemes may be classified on the basis of its structure and its investment objective.By Structure:Open-ended FundsAn open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices. The key feature of open-end schemes is liquidity.Closed-ended FundsA closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on thestockexchangeswhere they are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor.Interval FundsInterval funds combine the features of open-ended and close-ended schemes. They are open for sale or redemption during pre-determined intervals at NAV related prices.By Investment Objective:Growth FundsThe aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a majority of their corpus inequities. It has been proven that returns from stocks, have outperformed most other kind of investments held over the long term. Growth schemes are ideal for investors having a long-term outlook seeking growth over a period of time.Income FundsThe aim ofincomefundsis to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures and Government securities. Income Funds are ideal for capital stability and regular income.Balanced FundsThe aim of balanced funds is to provide both growth and regular income. Such schemes periodically distribute a part of their earning and invest both in equities and fixed incomesecuritiesin the proportion indicated in their offer documents. In a rising stock market, the NAV of these schemes may not normally keep pace, or fall equally when the market falls. These are ideal for investors looking for a combination of income and moderate growth.Money Market FundsThe aim of money market funds is to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bank call money. Returns on these schemes may fluctuate depending upon the interest rates prevailing in the market. These are ideal for Corporate and individual investors as a means to park their surplus funds for short periods.Load FundsA Load Fund is one that charges a commission for entry or exit. That is, each time you buy or sell units in the fund, a commission will be payable. Typically entry and exit loads range from 1% to 2%. It could be worth paying the load, if the fund has a good performance history.No-Load FundsA No-Load Fund is one that does not charge a commission for entry or exit. That is, no commission is payable on purchase or sale of units in the fund. The advantage of a no load fund is that the entire corpus is put to work.OTHER SCHEMES:Tax Saving SchemesThese schemes offer tax rebates to the investors under specific provisions of the Indian Income Tax laws as the Government offers tax incentives for investment in specified avenues. Investments made in Equity Linked Savings Schemes (ELSS) and Pension Schemes are allowed as deduction u/s 88 of the Income Tax Act, 1961. The Act also provides opportunities to investors to save capital gains u/s 54EA and 54EB by investing inMutualFunds.Special SchemesIndustry Specific SchemesIndustry Specific Schemes invest only in the industries specified in the offer document. The investment of these funds is limited to specific industries like InfoTech, FMCG, Pharmaceuticals etc.Index SchemesIndexFundsattempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50Sectoral SchemesSectoral Funds are those, which invest exclusively in a specified industry or a group of industries or various segments such as 'A' Group shares or initial public offerings.On the basis of their structure and objective, mutual funds can be classified into following major types:

Closed-end fundsA closed-end mutual fund has a set number of shares issued to the public through an initial public offering.

Open-end fundsOpen end funds are operated by a mutual fund house which raises money from shareholders and invests in a group of assets

Large cap fundsLarge cap funds are those mutual funds, which seek capital appreciation by investing primarily in stocks of large blue chip companies

Mid-cap fundsMid cap funds are those mutual funds, which invest in small / medium sized companies. As there is no standard definition classifying companies

Equity fundsEquity mutual funds are also known as stock mutual funds. Equity mutual funds invest pooled amounts of money in the stocks of public companies.

Balanced fundsBalanced fund is also known as hybrid fund. It is a type of mutual fund that buys a combination of common stock, preferred stock, bonds, and short-term bonds

Growth fundsGrowth funds are those mutual funds that aim to achieve capital appreciation by investing in growth stocks.

No load fundsMutual funds can be classified into two types - Load mutual funds and No-Load mutual funds.

Exchange traded fundsExchange Traded Funds (ETFs) represent a basket of securities that is traded on an exchange, similar to a stock. Hence, unlike conventional mutual funds

Value fundsValue funds are those mutual funds that tend to focus on safety rather than growth, and often choose investments providing dividends as well as capital appreciation.

Money market fundsA money market fund is a mutual fund that invests solely in money market instruments. Money market instruments are forms of debt that mature in less than one year and are very liquid.

International mutual fundsInternational mutual funds are those funds that invest in non-domestic securities markets throughout the world.

Regional mutual fundsRegional mutual fund is a mutual fund that confines itself to investments in securities from a specified geographical area, usually, the fund's local region.

Sector fundsSector mutual funds are those mutual funds that restrict their investments to a particular segment or sector of the economy.

Index fundsAn index fund is a a mutual fund or exchange-traded fund) that aims to replicate the movements of an index of a specific financial market.

Fund of fundsA fund of funds (FoF) is an investment fund that holds a portfolio of other investment funds rather than investing directly in shares, bonds or other securities.

NFO: Reliance small cap fundReliance Mutual Fund has launched a New Fund Offer (NFO) - RelianceSmall Cap Fund. The NFO will close on 09-September-2010. The primary investment objective of the scheme is to generate long term capital appreciation by investing predominantly in equity and equity related instruments ofsmall capcompanies and the secondary objective is to generate consistent returns by investing in debt and money market securities. Scheme Name: RelianceSmall Cap Fund Scheme Type: Open Ended Scheme Category: Growth Start Date: 26-Aug-2010 Close Date: 09-Sep-2010 Entry Load: Nil Offer Price: Rs. 10.00 Minimum Subscription: 5,000 and in multiples of Re.1/- Download Application Form Invest Online Order FormsNFO: Reliance index fund-Nifty & SensexReliance Mutual Fund has launched a new fund offer (NFO) with two variants -Reliance Index Fund NiftyandReliance Index Fund Sensex. The primary investment objective of the scheme is to replicate the composition of the Nifty and Sensex, with a view to generate returns that are commensurate with the performance of the Nifty & Sensex, subject totrackingerrors.Reliance Index Fund NFO Details: Scheme Name: Reliance Index Fund - Nifty Plan & Sensex Plan Scheme Type: Open Ended NFO Start Date: 09-September-2010 NFO Last Date: 23-September-2010 Entry Load: Nil Offer Price: Rs. 10.00 Minimum Subscription: Rs.5,000 and inmultiplesof Re.1/- thereafter Download Reliance Index Fund - Nifty Application Form Download Reliance Index Fund - Sensex Application Form Invest Onlinein Reliance Mutual Fund (use internet explorer only)NFO: ICICI FMP Sr. 53 - 3 Years - Plan AICICI Prudential mutual fund has launched a 3 years Fixed Maturity Plan (FMP). The last date of the NFO is 23-Aug-2010. The investment objective of the Scheme is to seek to generate regular returns by investing in a portfolio offixed incomesecurities/debt instruments which mature on or before the date of maturity of the scheme. However, there can be no assurance that the investment objective of the Scheme will be realized.Download Application FormNFO summary: Fund name: ICICI Prudential Fixed Maturity Plan-Series 53-3 Years Plan A Scheme category: Income Scheme type: Close Ended NFO Start Date: 09-Aug-2010 NFO Close Date: 23-Aug-2010 Entry Load:Nil Exit Load: Nil Offer Price: Rs. 10.00 per unit Minimum Subscription: Rs. 5,000/- ICICI FMP Sr. 53 Plan-A 3-years Application FormNFO : Kotak FMP 370 Days Series 6Kotak Mutual Fund is launching 370 days FMP Series 6, which will be listed on NationalStock Exchange(NSE) from July 23, 2010 (Friday) and will close on July 26, 2010 (Monday). Investor can utilize ASBA (Amount Supported by Blocked Amount). NRI can also apply through their NRO account.INVESTMENT OBJECTIVEThe investment objective of the Scheme is to generate returns through investments in debt and money market instruments with a view to significantly reduce the interest rate risk.SCHEME TYPEClose ended debt schemeMINIMUM INVESTMENT DURING NFORs. 5,000/- and in multiples of Rs 10 for purchase and switch-ins.OPTIONSGrowth and Dividend Payout.LISTINGThe units of the scheme will be listed on NSE on allotment.BENCHMARKCRISIL Composite Bond Fund Index

LIQUIDITYUnits of this scheme will be listed on NationalStock Exchange. Investors may sell their units in thestock exchange(s) on which these units are listed on all the trading days of thestock exchange. The units cannot be redeemed with KMMF until the maturity of the scheme.MATURITY370 Days after the date of allotment of units.Download Kotak FMP 370 Days Series 6 Application FormNFO : Kotak Credit Opportunities FundKotak Mahindra Mutual Fund has launched Kotak Credit Opportunities fund. The NFO period would be from 12th April to 30th April10.Kotak credit opportunities is open ended debt scheme positioned between short term funds and duration funds like gilt and bond. The idea of the strategy is to get a play on the steepness of the yield curve at the same time not have too much volatility a duration fund would usually have. The fund would seek to capitalize on the mispricing available within the credit spectrum at the same time not taking very aggressive credit calls.As per the AMC, the fund is ideally positioned for investors with a 1yr horizon with the intent of being able to generate superior risk adjusted returns over short term strategies.NFO Details / Summary Start Date: 12-April-2010 End Date: 30-April-2010 Scheme Type: Open ended debt scheme Options: Growth,DividendReinvestment andDividendPayout Entry Load: Nil Exit Load: 2% if redeemed /switch-out within 1 year from date ofallotment.Nil if redeemed /switch-out after 1 year from the date ofallotment. Benchmark: CRISIL Short Term Bond Index Liquidity: Open ended. Purchases and Redemptions at prices related to Applicable NAV. Investment Objective: The investment objective of the scheme is to generate income by investing in debt/andmoney marketsecurities across the yield curve spectrum. The scheme would also seek to maintain reasonable liquidity within the fund.NFO : Axis Triple Advantage Fund (An open ended hybrid Fund)

Axis Triple Advantage Fund (An open ended hybrid Fund)(GOLD |EQUITY | FIXED INCOME)Axis Mutual Fund launched a new fund Axis Triple Advantage Fund consisting ofEquity&Equityrelated instruments (30% - 40%), Debt & Money Market instruments (30% - 40%) and Gold Exchange Traded Fund (20% - 30%). Since this is a new blend of investment of three different category , thus this scheme cannot be compared with any other existing scheme. However, the fund house has set the benchmark as composit benchmark consisting of S & P CNX Nifty (35%), Crisil Composit Bond fund index (35%) and INR price of Gold (30%).NFO Summary NFO Start Date: 30-June-2010 NFO Close Date: 29-July-2010 Scheme Re-opens for continuous sale/repurchase: 28-August, 2010 Scheme Category:Gold ETF, Equity & Debt/Money Market instruments

Scheme Type: Open Ended Entry Load: Nil Exit Load: 1% if redeemed/switchedout within 1 year from date of allotment Offer Price: Rs. 10.00 Minimum Subscription: Rs. 5,000.00 and additional in multiple of Rs 1/- thereafter. NRI/FII can apply Plan/Option: Growth& Dividend ( Payout & Reinvestment) Download Application FormNFO : Canara Robeco Large Cap+ FundCanara RobecoMutual Fundhas launched NFO Canara Robeco Large Cap+ Fund with the objective to provide capital Appreciation by predominantlyinvesting incompanies having a large market capitalization.Asset allocation pattern will be-LargeCap Equity & Equity related instruments : 65 - 100% , Domestic Debt & MoneyMarket instruments (including scrutinized debt upto 10% of AUM) - 0 - 35%.NFO Summary Scheme Name: Canara Robeco Large Cap+ Fund NFO Start Date:28-June-2010 NFO Close Date: 27-July-2010 Offer Price : Rs. 10.00 Minimum Subscription: Growth Option, Dividend Option(Payout & Reinvest) - Rs.5000 & multiple of Rs. 1/- thereafter. Systemetic Investment Plan (SIP): Rs. 1000/- and Rs 2000/- respectively for monthly and quarterly basis. Scheme Type: Open Ended Scheme Category: Income & Growth Benchmark : BSE 100 Load: Entry Load - Nil. Exit Load - 1% if exited upto 1 year. Nil if exited after 1yearNFO: Canara Robeco InDiGo Fundanara RobecoMutual Fundhas launched a new fund - Canara Robeco InDiGo (INcome from Debt Instruments & GOld). It is an open-ended debt fund having investment objective of generating regular income from a portfolio of debt & money market securities along with investments in Gold ETFs.NFO Summary NFO Start Date: 19-May-2010 NFO Closing Date: 10-June-2010 Scheme Category: Growth Scheme Type: open Ended Entry load: Nil Exit Load: 1.00% if redeemed on or before 365 days from the date of allotment of units NIL, if redeemed after 365 days from the date of allotment of units Offer Price: Rs. 10.00/- Minimum Subscription: Rs. 5,000/- Download Application FormTo Invest -1. Download Application FormOROrder Mutual Fund Form2. Fill the form and attach PAN card copy3. Send it toour addressOR deposit at nearest center mentioned inapplicationformNFO: ICICI Pru Gold Exchange Traded Fund (Gold ETF)ICICI Prudential Mutual Fund has launched a New Fund Offer from June 30, 2010. AMC aims to invest 95 - 100% in BullionGoldand 0 - 5% may be kept in Debt and Money Market Securities, under open ended scheme. The objective of the fund seeks to provide investment returns. Fund is tradable at NSE, BSE .The units of the Scheme are offered at a face value of Rs100 each and will be issued at a premium equivalent to the difference between the allotment price as determined from the actual purchase price of physicalgoldand the face value of Rs100. The system of domestic prices ofGoldderived from the LBMA AM will be used for fixing prices. However, the performance of the scheme may differ from that of the underlyinggolddue to tracking error.NFO Summary NFO Start Date: 30-June-2010 NFO Close Date: 29-July-2010 Scheme Category:GoldETF Scheme Type: Open Ended Entry Load: Nil Listing at NSE , BSE, Tradable Offer Price: Rs. 100.00** Minimum Subscription: Rs. 5,000.00 and additional in multiple of Rs 1/- thereafter. If the Demat account details are not given, the units will be issued incertificate formbut will not be tradable till these are converted into dematerialise form. NRI/FII/PIO investors (Persons of Indian Origin residing Abroad) can apply on Repatriation and Non-repatriation basis.*