Mutual Funds: Rajkumar PR Aju John

Mutual Funds
Rajkumar pr Aju john
OPTIONS FOR INVESTING

Deposit in Bank Loan a Friend/Relative on Interest Property Investments Invest in Bullion - Gold, Silver.. Investment in Capital Markets - Direct - Equity Share Markets - Debt & Bonds Market - Indirect - Mutual Funds
What is a Mutual Fund?

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual Funds. These investors buy units of a particular Mutual Fund scheme that has a defined investment objective and strategy. The money collected is invested by the fund manager in different types of securities. These could range from shares to debentures to money market instruments, depending upon the schemes stated objectives. The income earned through these investments and the capital appreciation realized by the scheme are shared by its unit holders in proportion to the number of units owned by them.
Brief History
First Phase 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. At the end of 1988 UTI had Rs.6,700 crores of assets under management.
Second Phase-1987-1993 (Entry of Public Sector Funds)

marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987. At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 crores.
Third Phase-1993-2003(Entry of Private Sector Funds)

1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores.
Fourth Phase since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963. UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the SEBI Mutual Fund Regulations
Organization of a Mutual Fund
Regulations
Governed by SEBI (Mutual Fund) Regulation 1996 All MFs registered with it, constituted as trusts ( under Indian Trusts Act, 1882)
Bank operated MFs supervised by RBI too

AMC registered as Companies registered under Companies Act, 1956 SEBI- Very detailed guidelines for disclosures in offer document, offer period, investment guidelines etc. NAV to be declared everyday for open-ended, every week for closed ended Disclose on website, AMFI, newspapers Half-yearly results, annual reports Select Benchmark depending on scheme and compare
TYPES OF MUTUAL FUNDS

Type of Mutual Fund Schemes Investment Objective Special Schemes
Structure Open Ended Funds
Growth Funds Income Funds
Industry Specific Schemes
Close Ended Funds Interval Funds
Index Schemes
Sectoral Schemes
Balanced Funds
Money Market Funds
Types of Mutual Fund Schemes

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 (including gilt) Short-term Money Market (Govt.) Balanced/Hybrid Stocks + Fixed Income Securities (1-3 years)
Other Schemes
Tax Saving Schemes Special Schemes
ULIP
10 REASONS TO INVEST IN MUTUAL FUNDS

Expert on your side: When you invest in a mutual fund, you buy into the experience and skills of a fund manager and an army of professional analysts Limited risk: Mutual funds are diversification in action and hence do not rely on the performance of a single entity. More for less: For the price of one blue chip stock for instance, you could get yourself a number of units across a number of companies and industries when you invest in a fund! Easy investing: You can invest in a mutual fund with as little as Rs. 5,000. Salaried individuals also have the option of investing in a monthly savings plan. Convenience: You can invest directly with a fund house, or through your bank or financial adviser, or even over the internet. Investor protection: A mutual fund in India is registered with SEBI, which also monitors the operations of the fund to protect your interests. Quick access to your money: It's good to know that should you need your money at short notice, you can usually get it in four working days. Transparency: As an investor, you get updates on the value of your units, information on specific investments made by the mutual fund and the fund manager's strategy and outlook. Low transaction costs: A mutual fund, by sheer scale of its investments is able to carry out cost-effective brokerage transactions. Tax benefits: Over the years, tax policies on mutual funds have been favourable to investors and continue to be so.
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
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Mutual Funds

Rajkumar pr Aju john

OPTIONS FOR INVESTING

What is a Mutual Fund?

Second Phase-1987-1993 (Entry of Public Sector Funds)

Third Phase-1993-2003(Entry of Private Sector Funds)

Fourth Phase since February 2003

Organization of a Mutual Fund

Bank operated MFs supervised by RBI too

TYPES OF MUTUAL FUNDS

Structure Open Ended Funds

Growth Funds Income Funds

Industry Specific Schemes

Close Ended Funds Interval Funds

Types of Mutual Fund Schemes

10 REASONS TO INVEST IN MUTUAL FUNDS

Buying Mutual Funds

Contacting the Asset Management Company directly

Insurance agents Banks

Online Trading Account

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