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Mutual Funds

About Mutual Funds


What Is a Mutual Fund?
A mutual fund is a company that invests in a diversified portfolio of securities.
People who buy shares of a mutual fund are its owners or shareholders. Their
investments provide the money for a mutual fund to buy securities such as stocks
and bonds. A mutual fund can make money from its securities in two ways: a
security can pay dividends or interest to the fund, or a security can rise in value.
A fund can also lose money and drop in value.

Advantages of a MF
•Professional Management
•Diversification
•Flexibility in choice - selection, redemption
•Low costs
•Transparency
Mutual Fund Operation
Flow Chart
Investors
Passed back to Pool their
money with

Returns
Fund Manager

Generates
Invests in

Securities
Organization of a Mutual Fund

Adobe Acrobat 7.0


Document
STRUCTURE OF MUTUAL
FUNDS
TYPES OF MUTUAL
FUNDS
Type of
Mutual Fund
Schemes
Special
Investment
Structure Schemes
Objective
Open Ended Industry Specific
Growth Funds
Funds Schemes
Close Ended Index
Income Funds
Funds Schemes
Sectoral
Balanced Funds
Schemes
Money Market
Funds
Types of Mutual Fund
• By Structure
(cont’d)
– 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
RISK - RETURN ANALYSIS
Investment strategies
• Systematic Investment Plan (SIP)
– Invest a fixed sum every month. (6 months to 10
years- through post-dated cheques or Direct Debit
facilities)

• Systematic Transfer Plan (STP)


– Invest in debt oriented fund and give instructions
to transfer a fixed sum, at a fixed interval, to an
equity scheme of the same mutual fund.

• Systematic Withdrawal Plan (SWP)


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
INDIAN MUTUAL FUND COMPANIES
Bank Sponsored
• Joint Ventures – Predominantly Indian
– SBI Funds Management Private Ltd.

• Others
– BOB Asset Management Company Ltd.
– Canbank Investment Management Services Ltd.
– UTI Asset Management Company (Pvt) Ltd.

• Institutions
– LIC Mutual Fund Asset Management Company Ltd.
INDIAN MUTUAL FUND COMPANIES (Cont’d)
Private Sector
• Indian • Joint Ventures – Predominantly
– Benchmark Asset Management Company Pvt. Indian
Ltd. – Birla Sun Life Asset Management Company
– DBS Cholamandalam Asset Management Ltd. Ltd.
– Escorts Asset Management Ltd. – DSP Merrill Lynch Fund Managers Ltd.
– JM Financial Asset Management Private Ltd. – HDFC Asset Management Company Ltd.
– Kotak Mahindra Asset Management Company – Prudential ICICI Asset Mgmt. Company Ltd.
Ltd. – Sundaram BNP Paribas Asset Management
– Quantum Asset Management Co. Private Ltd. Co. Ltd.
– Reliance Capital Asset Management Ltd.
– Sahara Asset Management Company Private
Ltd. • Joint Ventures – Predominantly
– Tata Asset Management Ltd. Foreign
– Taurus Asset Management Company Limited – ABN Amro Asset Management (India) Ltd.
– Deutsche Asset Management (India) Pvt. Ltd.
• Foreign – Fidelity Fund Management Pvt. Ltd.
– AIG Global Asset Management Company – Franklin Templeton Asset Management (India)
(India) Pvt. Ltd. Pvt. Ltd.
– HSBC Asset Management (India) Pvt. Ltd.
– ING Investment Management (India) Pvt. Ltd.
– JP Morgan Asset Management India Pvt. Ltd.
– Lotus India Asset Management Co. Pvt. Ltd.
– Morgan Stanley Investment Management Pvt.
Ltd.
– Principal PNB Asset Management Co. Pvt.
Ltd.
– Standard Chartered Asset Management Co.
Pvt. Ltd.
Online Features & Offerings
• Buy and sell mutual funds online without the hassles of filling forms.

• Switch investments between schemes of the same fund.

• Create your own customized investment and redemption plan.

• Modify/cancel your Systematic Investment Plan (SIP) and Systematic


Withdrawal Plan (SWP).

• View your unit holdings/valuations online.

• Say goodbye to post-dated cheques.


Online Features & Offerings
• National Electronic Funds Transfer (NEFT)
• Download account statements ……….Online
• Convenience of receiving documents by email at no additional cost to you.
edocs are :
– Convenient
– Easy to store / retrieve
– Free of Cost
– Quick
– Eco-friendly

• Edividends
Save your time and experience the convenience of receiving your dividend(s), if any, directly into your bank account.

• Get SMS confirmations for


– Purchase
– Redemption
– Switch
– Dividend declaration & other alerts.