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INTRODUCTION TYPES OF MUTUAL FUNDS

BENEFITS OF INVESTMENTS IN MUTUALFUNDS

INDIAN MUTUAL FUNDS WITHRESPECTIVE SCHEMES

LINK TO MUTUAL FUNDS WEBSITES

SEBI MUTUAL FUNDS REGULATIONS

UNIT TRUST OF INDIA

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WHAT IS A MUTUAL FUND?

SEBI Mutual Fund Regulation act, 1996, defines

a Mutual Fund as a fund established in the formof a trust by a sponsor to raise money by the

Trustees through the sale of units to the public

under one or more schemes for investing in

securities in accordance with these regulations.

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PRE-REQUISITES OF FLOATING A

MUTUAL FUNDS

The sponsor should have a sound track record

and good reputation.

The sponsor should be persisting in the

financial services business for at least 5 years.

The net worth of the sponsor must be equal

to/ more than 5000 crores.

The sponsors must contribute at least 40% of

the net worth of the Assets Management

Company.

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PROCEDURE OF FLOATING A

MUTUAL FUND

A draft offer document is to be prepared at the time of launching the

fund it pre specifies the investment objectives of the fund, the riskassociated, the costs involved in the process and the broad rules for

entry into and exit from the fund and other areas of operation.

SEBI looks at track records of the sponsor and its financial strength

in granting approval to the fund for commencing operations.

A sponsor then hires an asset management company to invest thefunds according to the investment objective.

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Investments from public are received and they are issued a specific

number of units of the mutual fund on the basis of their proportional

investment.

The pool of investment thus collected is given to the asset

management company

The fund managerinvests the sum in a number of companies across a

broad cross-section of industries and sectors.

The income earned through these investments and the capitalappreciation realized by the scheme are shared by its unit holders in

proportion to the number of units owned by them (pro rata

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Fund Managers

Fund managers are responsible for implementing a

consistent investment strategy that reflects the

goals and objectives of the fund. Normally, fund

managers monitor market and economic trendsand analyze securities in order to make informed

investment decisions to ensure that the

investments being made are fruitful and

would lend solidarity to the commonobjectives.

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Asset Management company

An asset management company is the cardinalelement of a mutual fund as it undertakes theinception of various schemes and their

subsequent management while maintainingharmony with the funds pre stated objectivesthat are aimed at bringing opulence for the unitholders along with security.

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Net Asset Value

Net Asset Value is the total asset value (netof expenses) per unit of the fund and is

calculated by the AMC at the end of everybusiness day. NAV on a particular date

reflects the realizable value that the

investor will get foe each unit that he has

as holding if the scheme is liquidated onthat date.

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NAV per Unit= Mkt./fair value of securities

+ receivables + other assets+ unamortised issue expenses

- accrued expenses payables

- other liabilities

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No. of units outstanding of a scheme

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STRUCTURE BASED OBJECTIVE BASED OTHER FUNDS

TYPES OF MUTUAL FUNDS

TYPES OF MUTUAL FUNDS

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MUTU L FUNDS SCHEME BY

STRUCTURE

Open-Ended Funds

it is open for subscriptionall through the year

Close-Ended FundsIt is open during a limited period

Interval FundsIt combines both features of open-ended and close-ended

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Mutual Fund Scheme by Objectives

Growth unds

alanced unds oney arket unds

Income unds

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Other Funds

Tax Saving Scheme

Sectorial schemes

Index Schemes Loan Funds

No-Loan Funds

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Money Market Mutual Funds

In 1992, RBI introduced a scheme of MMMF as

to provide additional short term securities toinvestors and to bring money instruments within

their reach.

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Benefits of Investments in

Mutual funds Professional Management :

Mutual Funds employ the service of experiencedand skilled professionals and dedicated

investment research team.The whole teamanalyses the performance and balance sheet ofcompanies and select them to achieve theobjective of the scheme.

Potential Return:-Mutual Funds have the potential to provide ahigher return to an investor than any otheroption over reasonable period of time.

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Diversification:-Mutual Funds invest in anumber of companies across a wide cross section

of industries and sectors.

Liquidity ;- The investor can get the moneypromptly at the net asset value related pricesfrom the Mutual funds open-ended schemes.

Low Cost :-Investments in Mutual Funds is aless expensive way in comparison to a directinvestment in market.

T

ransparency:-Mutual Funds have todisclose their holdings, investment pattern andthe necessary information before all investorsunder a regular framework

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Flexibility :-Investment in Mutual Funds offer

a lot of flexibility with features of schemes suchas regular investment plan, regular withdrawalplans and dividend reinvestment plans enablingsystematic investment withdrawal of funds.

Affordability:- Small investors with lowinvestments fund are unable to high-grade orblue chip stocks. An investor through mutualfunds can be benefited from a portfolio includingof high priced stock.

Well Regulated:- All Mutual Funds areregistered with SEBI, and SEBI acts a watchdog,so the Mutual Funds are well regulated.