MUTUAL FUNDS

PRESENTED BY:

•Dering Naben•Aditi Thakur•Harshita Sehgal•Devi Kumari•Sakshi Sharma•Ekta Uniyal

Executive Summary

Concept – Mutual Fund What is Mutual Fund ? History Structure of Mutual Fund Terminologies Types of Mutual Fund Benefits DrawbacksHow and Why to invest in Mutual Fund?Latest DataTerminologiesDisclaimer

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.

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.

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• Foreign fund management companies came to India

with joint venture

Continued----

Fourth Phase – since February 2003• SEBI regulation for mutual funds• Dividends exempted from income tax from

1999

Structure Of Mutual Fund

Types Of Mutual Fund Schemes

Structure Investment By

Objective

Open Ended

Close Ended

Income Fund

Growth Fund

Balance Fund

Taxation Fund

Money Market Fund

Continued----

By Structure Open-Ended – anytime enter/exit Close-Ended Schemes – listed on exchange, redemption after period of scheme

is over.

By Investment Objective 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

Why Mutual Funds?

Diversification

No Entry Load

Tax Benefit

Professional Management

Affordability

Transparency

Regulations

De-merits : Mutual Funds

Exit load No control over costs No tailor-made portfolio No assured Returns Management Risk

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

Education Earning Years Post Retirement Years

Phase I Phase II Phase III

Age- 22 yrs Age- 60 yrs

Marriage

Child birth

Child’s Education

Child’s Marriage

Housing

22 yrs 38 yrs 10- 20 yrs

Why Invest? Human Life Cycle

Start Investing Early

Mr. A

Age 25 years

Begins investing at 25

Invests Rs. 20,000 @5% p.a

till the age of 60 i.e. for 35 yrs

Redeems on his retirement at

60

Mr. B

Age 25 years

Begins investing at 35

Invests Rs. 25,000 @5% till the

age of 60 i.e. for 25 yrs

Redeems on his retirement at

60

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?

Mr.A Mr.B0

200000400000600000800000

100000012000001400000160000018000002000000 Earnings at the age of 60

MUTUAL FUND DATA FOR THE MONTH ENDED - AUG 31 , 2012 ( IN CRORES)

Category

No. of new schemes launched during the

month Sales Redemption

   

New  Existing schemes

Total Total as on Aug 31 , 2012

as on Jul 31 , 2012

Inflow/ Outflow

schemes

BBank Sponsored 0 0 113605 113605 110618 0 0 0

C Institutions 0 0 3047 3047 2254 0 0 0

D

Private Sector & Joint Venture :

Indian 9 503 236747 237250 232666 0 0 0

Predominantly Indian 15 1129 248620 249749 241233 0 0 0

Predominantly Foreign 0 0 20533 20533 19020 0 0 0

Grand Total (B+C+D) 24 1632 622552 624184 605791 0R 0 0

Buying Mutual Funds

Contacting the Asset Management Company directly Web Site Request for agent

Agents/Brokers Locate one on AMFI site

Financial planners Bajaj Capital etc.

Insurance agents Banks

Net-Banking Phone-Banking ATMs

Online Trading Account ICICI Direct Motilal Oswal, Indiabulls- Send agents

Terminologies

o AMC- Asset Management company

o SEBI- Securities Exchange Board Of India

o UTI- Unit Trust Of Indiao ULIP- Unit Linked Insurance plano AMFI- Association of Mutual

funds In India

Disclaimer

Mutual fund investments are subject to market risks. Please read the offer document carefully before taking an investment decision.

HAPPY INVESTING