Nism Mutual Fund Study Notes

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Study Notes for

NISM Series V – A:
MUTUAL FUND DISTRIBUTORS Exam
(Earlier - AMFI Exam)
Version – June 2020
Prepared By
https://nism.modelexam.in
Scan the following QR code for NISM Mutual Fund Exam Training Videos
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NISM Series 5A - MUTUAL FUND DISTRIBUTORS EXAM
Assessment Structure
https://youtu.be/_SmCb_UmiLA?list=PLCZvkZJiAVK56z_al_5b-
4WMMRUXMWydc
Total Questions = 100 X 1 mark each ( NO NEGATIVE MARKS )
Total Duration = 2 hours.
Passing score = 50%
Certificate Validity = 3 years.
Certificate Renewal → Attend NISM CPE Session
Call Srinivasan @ 98949 49988 for NISM CPE Training details in South India.
Chapterwise Weightages
Unit 1 Investment Landscape 8%
Unit 2 Concept & Role of a Mutual Fund 6%
Unit 3 Legal Structure of Mutual Funds in India 4%
Unit 4 Legal and Regulatory Framework 10 %
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Unit 5 Scheme Related Information 10 %
Unit 6 Fund Distribution and Channel Management Practices 6%
Unit 7 Net Asset Value, Total Expense Ratio and Pricing of units 8%
Unit 8 Taxation 4%
Unit 9 Investor Services 20 %
Unit 10 Risk, Return and Performance of Funds 7%
Unit 11 Mutual Fund Scheme Performance 7%
Unit 12 Mutual Fund Scheme Selection 10 %
YouTube videos – Topic wise
1. How to become a Mutual Fund Agent?

2. NISM Mutual Fund Distributors Exam Pattern
3. What is a Mutual Fund?
4. Terminologies used in Mutual Fund Industry
5. Open and Closed end funds
6. Types of Equity Funds
7. Types of Debt Mutual Funds
8. Types of Hybrid Schemes, Balanced Schemes
9. Tax Saving Scheme - ELSS
10. Gold Exchange Traded Fund
11. Passive Funds and Fixed Maturity Plans
12. Index Funds
13. Tracking Error - Index Funds
14. Product Labeling - Riskometer
15. Mutual Fund Structure and Constituents
16. Dividend Distribution Tax
17. Grandfather Clause introduced in Budget and Taxation changes
18. Capital Gain Tax
19. Calculation of Long term capital gain tax using Indexation
20. Tax Deducted at Source and Securities Transaction Tax
21. Cut off timing - NAV
22. Liquid Funds Cut off timing
23. Liquid Funds - Redemption
==================================================================
24. Who can Invest in Mutual Funds?
25. Micro SIP and PAN Exempt Cases
26. Risk Adjusted Performance - Sharpe Ratio
27. Risk Adjusted Performance - Treynor ratio and Alpha
28. Mutual Fund Offer Document
29. Statement of Additional Information
30. NAV, Sale Price, Repurchase Price
31. NAV Calculation - Part1
32. NAV Calculation - Part2
33. Asset Allocation, Strategic Asset Allocation
34. Fixed and Flexible Asset Allocation
35. SIP and STP
36. SWP, Dividend Payout, Dividend Reinvestment and Growth Options
37. Systematic Risk and Unsystematic Risk
38. Beta - measure of Market risk
39. Upfront Commission, Trail Commission, Transaction Charges
40. Total Expense Ratio - Part1
41. Total Expense Ratio - Part2
42. Transmission, Dividend Stripping, Capital Protection Oriented Schemes
43. Arbitrage Funds, Interval Funds, National Pension System
44. What is Sensex and Nifty? How it is calculated?
CHAPTER 1: INVESTMENT LANDSCAPE
Factors to evaluate investments - Safety, Liquidity, Returns, Convenience, Ticket

size, Taxability of income, Tax deduction
Different Asset Classes - Real Estate, Commodities, Fixed Income, Equity
Investments in equity and bonds can be done only in financial form, whereas one can buy
the other two assets, viz., real estate and commodities either in financial or in physical form.
It is this physical form that gives a feeling of safety to many. Anything that is tangible is
perceived to be safer than something intangible.
Real estate and commodities differ from equity and bonds in another way, too. These could
be bought as investment or for consumption purposes
Equity Fixed Income

Ø Bluechip Companies Ø Fixed deposit with a bank
Ø Mid-sized companies Ø Recurring deposit with a bank
Ø Small-sized companies Ø Endowment Policies
Ø Unlisted Companies Ø Money back Policies
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Ø Foreign Stocks Ø Public Provident Fund
Ø Equity Mutual Funds Ø Sukanya Samruddhi Yojana (SSY)
Ø Exchange Traded Funds Ø Senior Citizens’ Savings Scheme (SCSS)
Ø Index Funds Ø Post office Monthly Income Scheme
Ø Recurring deposit with a post office
Ø Company fixed deposit
Ø Debentures/bonds
Ø Debt Mutual Funds
Real Estate/Infrastructure Commodities
Physical Asset · Gold
Ø Residential/ Commercial · Silver
Financial Asset · Gold Funds
Ø Real Estate Mutual Funds (REMF) · Commodity ETFs
Ø Real Estate Investment Trusts (ReIT)
Ø Infrastructure Investment Trust
(InvIT)
Hybrid asset classes Others
Hybrid Mutual funds or Multi Asset Fund Ø Rare coins
Ø Art
Ø Rare stamps
Inflation Risk
Inflation, or price inflation is the general rise in the prices of various commodities, products,
and services that we consume. Inflation erodes the purchasing power of the money.
Credit Risk
When someone lends money to a borrower, the borrower commits to repay the principal as
well as pay the interest as per the agreed schedule. The same applies in case of a debenture
or a bond or a fixed deposit. In case of these instruments, the issuer of the instruments is
the borrower, whereas the investor is the lender. The issuer agrees to pay the interest and
repay the principal as per an agreed schedule. There are three possibilities in such
arrangements:
(1) the issuer honors all commitments in time
(2) the issuer pays the dues, but with some delay, and
(3) the issuer does not pay principal and the interest at all.
While the first is the desirable situation, the latter two are not. Credit risk is all about the
possibility that the second or the third situation may arise.
Market Risk and Price Risk

When there is a possibility of a country getting into a warlike situation, there is a widespread
fear that this may impact the economy, and the companies within it. Due to such a fear, it is
quite possible that the prices of all stocks (or at least a large number of stocks) in the market
may witness a fall. This is a market wide fall. On the other hand, when the sales of a
company’s products fall, due to technological changes, or arrival of a better product, the
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company’s share price falls. During such times, there could be many other companies, whose
share prices may rise. This is an example of a company specific risk
Interest Rate Risk

Interest rate risk is the risk that an investment's value will change as a result of a change in
interest rates. This risk affects the value of bonds/debt instruments more directly than stocks.
Any reduction in interest rates will increase the value of the instrument and vice versa
Behavioral Biases in Investment Decision Making
Availability Heuristic
Most people rely on examples or experiences that come to mind immediately while analyzing
any data, information, or options to choose from. In the investing world, this means that
enough research is not undertaken for evaluating investment options. This leads to missing
out on critical information, especially pertaining to various investment risks.
Confirmation Bias
Investors also suffer from confirmation bias. This is the tendency to look for additional
information that confirms to their already held beliefs or views. It also means interpreting
new information to confirm the views. In other words, investors decide first and then look
for data to support their views. The downside is very similar to the previous one – investors
tend to miss out on many risks.
Familiarity Bias
An individual tends to prefer the familiar over the novel, as the popular proverb goes, “A
known devil is better than an unknown angel.” This leads an investor to concentrate the
investments in what is familiar, which at times prevents one from exploring better
opportunities, as well as from a meaningful diversification.
Herd Mentality
“Man is a social animal” – Human beings love to be part of a group. While this behavior has
helped our ancestors survive in hostile situations and against powerful animals, this often
works against investors interests in the financial markets. There are numerous examples,
where simply being against the herd has been the most profitable strategy.
Loss Aversion
Loss aversion explains people's tendency to prefer avoiding losses to acquiring equivalent
gains: it is better not to lose Rs. 5,000 than to gain Rs. 5,000. Such a behavior often leads
people to stay away from profitable opportunities, due to perception of high risks, even when
the risk could be very low. This was first identified by Psychologists Daniel Kahneman and
Amos Tversky. Kahneman went on to win Nobel Prize in Economics, later on.
Overconfidence
This bias refers to a person’s overconfidence in one’s abilities or judgment. This leads one to
believe that one is far better than others at something, whereas the reality may be quite
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different. Under the spell of such a bias, one tends to lower the guards and take on risks
without proper assessment.
Recency bias
The impact of recent events on decision making can be very strong. This applies equally to
positive and negative experiences. Investors tend to extrapolate the event into the future
and expect a repeat. A bear market or a financial crisis lead people to prefer safe assets.
Similarly, a bull market makes people allocate more than what is advised for risky assets.
The recent experience overrides analysis in decision making.
Understanding Asset Allocation

The basic meaning of asset allocation is to allocate an investor’s money across asset
categories in order to achieve some objective. In reality, most investors’ portfolio would have
the money allocated across various asset categories
Asset Allocation is a process of allocating money across various asset categories in line with
a stated objective. https://www.youtube.com/watch?v=KjdIf1zA6wU
Strategic Asset Allocation is allocation aligned to the financial goals of the individual. It
considers the returns required from the portfolio to achieve the goals, given the time horizon
available for the corpus to be created and the risk profile of the individual
Tactical asset allocation dynamically changes the allocation between the asset categories.
The purpose of such an approach may be to take advantage of the opportunities presented
by various markets at different points of time, but the primary reason for doing so is to
improve the risk-adjusted return of the portfolio
CHAPTER 2: CONCEPT AND ROLE OF A MUTUAL FUND
WHAT IS A MUTUAL FUND?

https://youtu.be/lhTtfaFoV90?list=PLCZvkZJiAVK56z_al_5b-4WMMRUXMWydc
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 hundred 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 thus collected is then invested by the fund manager in different types of
securities. These could range from shares to debentures to money market instruments,
depending upon the scheme’s stated objectives. The income earned through these
investments and the capital appreciation realized by the scheme is shared by its unit in
proportion to the number of units owned by them.
Thus a Mutual Fund offers an opportunity to invest in a diversified, professionally managed

basket of securities at a relatively low-cost.
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Mutual Fund Terminologies –
https://youtu.be/07mktpDEYiI?list=PLCZvkZJiAVK56z_al_5b-4WMMRUXMWydc
Net Asset Value (NAV) – Current market price of the unit.

Sale Price - Is the price you pay when you invest in a scheme. ( Offer Price)
Sale Price – NAV = Entry Load
Repurchase Price - Price at which units are repurchased / Redeemed by MF
NAV – Repurchase Price = Exit Load
NAV & Sale Price Explanation - https://youtu.be/rVuo_gTWTLQ
WHY SHOULD YOU INVEST IN MUTUAL FUNDS?
1. Professional Management – Investment managed by Fund Manager & team

2. Diversification - Invest in companies belonging to different industries & sectors
3. Convenient Administration – Easy to manage investments
4. Low Costs - Mutual Funds are a relatively less expensive to directly investing in the capital
markets because the benefits of reduction in share brokerage which translate into lower costs
for investors.
5. Liquidity - In open-ended schemes, you can get your money back promptly at Net Asset
Value (NAV) related prices from the Mutual Fund itself. With close-ended schemes, you can
sell your units on a stock exchange at the prevailing market price.
7. Transparency - You get regular information on the value of your investment in addition
to disclosure on the specific investments made by your scheme, the proportion invested in
each class of assets and the fund manager’s investment strategy and outlook.
8. Flexibility - Through features such as Systematic Investment Plans (SIP), Systematic
Withdrawal Plans (SWP) and dividend reinvestment plans, you can systematically invest or
withdraw funds according to your needs and convenience.
9. Well Regulated - All Mutual Funds are registered and regulated by SEBI
An investor buying into a scheme gets to select the preferred option also. The investment
that an investor makes in a scheme is translated into a certain number of ‘Units’ in the
scheme. The number of units multiplied by its face value (Rs10) is the capital of the scheme
– its Unit Capital.
When the profitability metric is positive, the true worth of a unit, also called Net Asset Value
(NAV) goes up.
When a scheme is first made available for investment, it is called a ‘New Fund Offer’ (NFO).
The money mobilized from investors is invested by the scheme as per the investment
objective committed. Profits or losses, as the case might be, belong to the investors. The
investor does not however bear a loss higher than the amount invested by him.
The relative size of mutual fund companies is assessed by their assets under management
(AUM). The AUM captures the impact of the profitability metric and the flow of unit-holder
money to or from the scheme.
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Lack of portfolio customization and an overload of schemes & scheme variants are drawbacks.
Investment objective defines the broad investment charter. Investment policy describes in
greater detail, the kind of portfolio that will be maintained. Investment strategies are decided
on a Day-to-day basis by the senior management of the AMC.
TYPES OF MUTUAL FUND SCHEMES

https://youtu.be/xlCsRC3cqzI?list=PLCZvkZJiAVK56z_al_5b-4WMMRUXMWydc
(A) By Structure
Open-Ended Schemes do not have a fixed maturity. You deal with the Mutual Fund for
your investments & Redemptions. The key feature is liquidity. You can conveniently buy and
sell your units at Net Asset Value (NAV) related prices, at any point of time. Investors can
sell their units to the scheme through a re-purchase transaction at re-purchase price, which
is linked to NAV.
Close-Ended Schemes have a stipulated maturity period are called close ended schemes.
You can invest in the scheme at the time of the initial issue and thereafter you can buy or
sell the units of the scheme on the stock exchanges where they are listed.
Interval Schemes combine the features of open-ended and close-ended schemes. The
periods when an interval scheme becomes open-ended, are called ‘transaction periods’; the
period between the close of a transaction period, and the opening of the next transaction
period is called ‘interval period’. Minimum duration of transaction period is 2 days, and
minimum duration of interval period is 15 days. No redemption/repurchase of units is allowed
except during the specified transaction period (during which both subscription and
redemption may be made to and from the scheme). Scheme should be compulsorily listed in
Stock Exchange during the interval period.
By the management of the portfolio

Actively managed funds are funds where the fund manager has the flexibility to choose
the investment portfolio, within the broad parameters of the investment objective of the
scheme. Since this increases the role of the fund manager, the expenses for running the fund
turn out to be higher.
Passive funds invest on the basis of a specified index; whose performance it seeks to track.
the performance of these funds tends to mirror the concerned index. They are not designed
to perform better than the market. Such schemes are also called index schemes.
Since the portfolio is determined by the index itself, the fund manager has no role in deciding
on investments. Therefore, these schemes have low running costs
SEBI - Categorization and Rationalization of Mutual Fund Schemes

The Schemes would be broadly classified in the following groups as per SEBI guidelines:
A. Equity Schemes (10 sub-categories)
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B. Debt Schemes (16 sub-categories)
C. Hybrid Schemes (6 sub-categories)
D. Solution Oriented Schemes (2 sub-categories)
E. Other Schemes (2 sub-categories)
Equity Schemes
https://youtu.be/eSQnv0e9awQ?list=PLCZvkZJiAVK56z_al_5b-4WMMRUXMWydc
SEBI has defined large cap, mid cap and small cap companies as follows:
a. Large Cap: 1st -100th company in terms of full market capitalization
b. Mid Cap: 101st -250th company in terms of full market capitalization
c. Small Cap: 251st company onwards in terms of full market capitalization
Category
Type of scheme (uniform
No. of Scheme Characteristics
description of scheme)
Schemes
Multi Cap Fund-An open ended
Minimum investment in equity
Multi Cap equity scheme investing across
1 & equity related instruments-
Fund large cap, mid cap, small cap
65% of total assets
stocks
Large Cap Fund-An open ended
Large Cap & equity related instruments
2 equity scheme predominantly
Fund of large cap companies-80%
investing in large cap stocks
of total assets
& equity related instruments
of large cap companies-35% Large & Mid Cap Fund-An open
Large &
of total assetsMinimum ended equity scheme investing
3 Mid Cap
investment in equity & equity in both large cap and midcap
Fund
related instruments of mid stocks
cap stocks-35% of total
assets
Minimum investment in equity Mid Cap Fund-An open
Mid Cap & equity related instruments endedequity scheme
4
Fund of mid cap companies-65% of predominantly investing in mid
totalassets cap stocks
Small Cap Fund-An open ended
Small cap & equity related instruments
5 equity scheme predominantly
Fund of small cap companies-65%
investing in small cap stocks
of total assets
Scheme should
predominantly invest in An open ended equity scheme
Dividend
6 dividend yielding predominantly investing in
Yield Fund
stocks.Minimum investment dividend yielding stocks
in equity-65% of total assets
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Scheme should follow a value
investment strategy.Minimum An open ended equity scheme
Value
investment in equity & equity following a value investment
Fund*
related instruments -65% of strategy
total assets
7 Scheme should follow a
contrarian investment
An open ended equity scheme
Contra strategy.Minimum investment
following contrarian investment
Fund* in equity & equity related
strategy
instruments -65% of total
assets
A scheme focused on the
An open ended equity scheme
number of stocks (maximum
investing inmaximum30 stocks
Focused 30)Minimum investment in
8 (mention where the scheme
Fund equity & equity related
intends to focus, viz. multi cap,
instruments -65% of total
large cap, mid cap, small cap)
assets
Minimum investment in equity An open ended equity scheme
& equity related instruments investing in __ sector (mention
Sectoral/
9 of a particular sector/ the sector)/ An open ended
Thematic
particular theme-80% of total equity scheme following __
assets theme (mention the theme)
& equity related instruments -
An open ended equity linked
80% of total assets (in
saving scheme with a statutory
10 ELSS accordance with Equity
lock in of 3 years and tax
Linked Saving Scheme, 2005
benefit
notified by Ministry of
Finance)
* Mutual Funds will be permitted to offer either Value fund or Contra fund.
https://www.youtube.com/watch?v=Ne1k-BrcI9E&index=9&list=PLCZvkZJiAVK56z_al_5b-
4WMMRUXMWydc
DEBT Funds
https://www.youtube.com/watch?v=3w_Ta-iUJzc&index=7&list=PLCZvkZJiAVK56z_al_5b-
4WMMRUXMWydc
Sr. Category of Type of scheme (uniform
Scheme Characteristics
No. Schemes description of scheme)
Investment in overnight
Overnight An open ended debt scheme investing
1 securities having maturity of
Fund in overnight securities
1 day
Investment in Debt and
2 Liquid Fund An open ended liquid scheme
money market securities
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with maturity of upto 91
days only
Investment in Debt & Money
An open ended ultra-short term debt
Ultra Short Market instruments such
scheme investing in instruments with
3 Duration that the Macaulay duration
Macaulay duration between 3 months
Fund of the portfolio is between 3
and 6 months
months -6 months
An open ended low duration debt
Market instruments such
Low Duration scheme investing in instruments with
4 that the Macaulayduration of
Fund Macaulay duration between 6 months
the portfoliois between 6
and 12 months
months-12 months
Investment in Money Market
Money Market An open ended debt scheme investing
5 instruments having maturity
Fund in money market instruments
upto 1 year
An open ended short term debt
Short Market instruments such
6 Duration that the Macaulayduration of
Macaulay duration between 1 year
Fund the portfolio is between 1
and 3 years
year –3 years
An open ended medium term debt
Medium Market instruments such
7 Duration that the Macaulay duration
Macaulay durationbetween 3 years
and 4 years
years –4 years
An open ended medium term debt
Medium to Market instruments such
8 Long Duration that the Macaulay duration
Macaulay duration between 4 years
and 7 years
–7 years
Market Instruments such An open ended debt scheme investing
Long Duration
9 that the Macaulayduration of in instruments with Macaulay duration
Fund
the portfolio is greater than greater than 7 years
7 years
Dynamic An open ended dynamic debt scheme
10 Investment across duration
Bond investing across duration
Minimum investment in
An open ended debt scheme
Corporate corporate bonds-80% of
11 predominantly investing in highest
Bond Fund total assets (only in highest
rated corporate bonds
rated instruments)
==================================================================
corporate bonds-65%of An open ended debt scheme investing
Credit Risk
12 total assets (investment in in below highest rated corporate
Fund^
below highest rated bonds
instruments)
Minimum investment in Debt An open ended debt scheme
instruments of banks, Public predominantly investing in Debt
Banking and
13 Sector Undertakings, Public instruments of banks, Public Sector
PSU Fund
Financial Institutions-80% Undertakings, Public Financial
of total assets Institutions
Minimum investment in An open ended debt scheme investing
14 Gilt Fund Gsecs-80% of total assets in government securities across
(across maturity) maturity
Gilt Fund with
Gsecs-80% of total assets An open ended debt scheme investing
10 year
15 such that the Macaulay in government securities having a
constant
duration of the portfolio is constant maturityof 10 years
duration
equal to 10 years
Minimum investment in An open ended debt scheme
16 Floater Fund floating rate instruments- predominantly investing in floating
65% of total assets rate instruments
There can be only one scheme per category, except in the following cases:
1. Index funds and ETFs replicating or tracking different indices,
2. Fund of Funds having different underlying schemes, and
3. Sector funds or thematic funds investing in different sectors or themes
Hybrid Funds – Investing in two or more asset class

https://www.youtube.com/watch?v=AXHEbVFHrpQ&index=8&list=PLCZvkZJiAVK56z_al_5b-
4WMMRUXMWydc
Category
Sr. Type of scheme (uniform
of Scheme Characteristics
No. description of scheme)
Schemes
Investment in equity & equity
related instruments- between
An open ended hybrid scheme
Conservative 10% and 25% of total assets;
1 investing predominantly in debt
Hybrid Fund Investment in Debt instruments-
instruments
between 75% and 90% of total
assets
Equity & Equity related
Balanced instruments- between 40% and An open ended balanced scheme
2 Hybrid Fund 60% of total assets; Debt investing in equity and debt
@ instruments- between 40% and instruments
60% of total assets No Arbitrage
==================================================================
would be permitted in this
scheme
Equity & Equity related

Aggressive instruments- between 65% and An open ended hybrid scheme
Hybrid Fund 80% of total assets; Debt investing predominantly in equity
@ instruments- between 20% 35% and equity related instruments
of total assets
Dynamic
Asset
Investment in equity/ debt that is An open ended dynamic asset
3 Allocation or
managed dynamically allocation fund
Balanced
Advantage
Invests in at least three asset
Multi Asset An open ended scheme investing
classes with a minimum
4 Allocation in __, __, __ (mention the three
allocation of at least 10% each in
## different asset classes)
all three asset classes
Scheme following arbitrage
Arbitrage strategy. Minimum investment in An open ended scheme investing
5
Fund equity & equity related in arbitrage opportunities
instruments- 65% of total assets
Minimum investment in equity &
equity related instruments- 65%
of total assets and minimum
investment in debt- 10% of total
Equity assets Minimum hedged & An open ended scheme investing
6
Savings unhedged to be stated in the in equity, arbitrage and debt
SID. Asset Allocation under
defensive considerations may
also be stated in the Offer
Document
Mutual funds in India are permitted to offer either Aggressive Hybrid Fund or Balanced Fund.
Solution Oriented Schemes:
No Schemes description of scheme)
Scheme having a lock-in for An open ended retirement solution
Retirement at least 5 years or till oriented scheme having a lock-in of
1
Fund retirement age whichever is 5 years or till retirement age
earlier (whichever is earlier)
==================================================================
Scheme having a lock-in for An open ended fund for investment

Children’s at least 5 years or till the for children having a lock-in for at
2
Fund child attains age of majority least 5 years or till the child attains
whichever is earlier age of majority (whichever is earlier)
Other Schemes
No Schemes description of scheme)
securities of a particular
Index Funds/ An open ended scheme replicating/
1 index (which is being
ETFs tracking _ index
replicated/ tracked)- 95% of
total assets
FoFs Minimum investment in the An open ended fund of fund scheme

2 (Overseas/ underlying fund- 95% of investing in ___ fund (mention the
Domestic) total assets underlying fund)
Index or Passive Funds : https://www.youtube.com/watch?v=uq7ICqOk4bw
Gold Exchange Traded Funds (GETFs) –

https://youtu.be/VOzaJ55IM5o?list=PLCZvkZJiAVK56z_al_5b-4WMMRUXMWydc
Gold Exchange Traded Funds offer investors an innovative, cost-efficient and secure way to
access the gold market. Gold ETFs are intended to offer investors a means of participating in
the gold bullion market by buying and selling units on the Stock Exchanges, without taking
physical delivery of gold. GOLD ETF invests in 99.99% pure GOLD. NAV of GOLD ETF
depends on Real Prices of GOLD Bullion. Gold funds invest in gold and gold-related securities.
Capital Protected Schemes are close-ended schemes, which are structured to ensure that
investors get their principal back, irrespective of what happens to the market.
Fund of Funds (FOFs) - Fund of Funds are schemes that invest in other mutual fund
schemes. Minimum investment in the underlying fund - 95% of total assets.
Funds Investing Abroad – Off Shore Schemes - Mutual Funds have been permitted to
invest in foreign securities/ American Depository Receipts (ADRs) / Global Depository
Receipts (GDRs). Some of such schemes are dedicated funds for investment abroad while
others invest partly in foreign securities and partly in domestic securities. While most such
schemes invest in securities across the world there are also schemes which are country
==================================================================
specific in their investment approach. Example: Franklin Asian Equity Fund, HSBC
Brazil Fund.
Fixed Maturity Plans - Fixed Maturity Plans (FMPs) are investment schemes floated by
mutual funds and are close ended with a fixed tenure, the maturity period ranging from one
month to three/five years. Fixed maturity plans are a kind of debt fund where the investment
portfolio is closely aligned to the maturity of the scheme. The objective of such a scheme is
to generate steady returns over a fixed-maturity period and protect the investor against
Interest rate fluctuations.
Infrastructure Debt Funds are investment vehicles which can be sponsored by commercial
banks and NBFCs in India in which domestic/offshore institutional investors, specially
insurance and pension funds can invest through units and bonds issued by the IDFs.
Infrastructure Debt Funds (IDFs), can be set up either as a Trust or as a Company. A trust
based IDF would normally be a Mutual Fund (MF), regulated by SEBI, while a company based
IDF would normally be a NBFC regulated by the Reserve Bank.
According to SEBI Mutual Fund Regulations, IDF means a close ended mutual fund scheme
that invests primarily (minimum 90 percent of scheme assets) in the debt securities or
securitized debt instrument of infrastructure companies or infrastructure capital companies
or infrastructure projects or special purpose vehicles which are created for the purpose of
facilitating or promoting investment in infrastructure, and other permissible assets in
accordance with Securities and Exchange Board of India (Mutual Funds) Regulations, 1996
or bank loans in respect of completed and revenue generating projects of infrastructure
companies or projects or special purpose vehicles. IDF-MFs can be sponsored by banks and
NBFCs. Only banks and Infrastructure Finance companies can sponsor IDF-NBFCs.
Real Estate Mutual Fund scheme invests directly or indirectly in real estate assets or other
permissible assets in accordance with the SEBI (Mutual Funds) Regulations, 1996. SEBI’s
regulations require that at least 35 percent of the portfolio should be held in physical assets.
Not less than 75 percent of the net assets of the scheme shall be in real estate assets,
mortgage-backed securities (but not directly in mortgages), equity shares or debentures of
companies engaged in dealing in real estate assets or in undertaking real estate development
projects. Assets held by the fund will be valued every 90 days by two valuers accredited by
a credit rating agency. The lower of the two values will be taken to calculate the NAV. These
funds are closed-end funds and have to be listed on a stock exchange.
CHAPTER 3: LEGAL STRUCTURE OF MUTUAL FUNDS IN INDIA
FUND STRUCTURE & CONSTITUENTS -

https://youtu.be/bhXoJXpMiNU?list=PLCZvkZJiAVK56z_al_5b-4WMMRUXMWydc
Mutual funds in India are governed by SEBI (Mutual Fund) Regulations, 1996.The regulations
permit mutual funds to invest in securities including money market instruments, or gold or
gold related instruments or real estate assets.
==================================================================
Mutual funds are constituted as Trusts. The mutual fund trust is created by one or more
Sponsors, who are the main persons behind the mutual fund operation.
Every trust has beneficiaries. The beneficiaries, in the case of a mutual fund trust, are the
investors who invest in various schemes of the mutual fund. In order to perform the
trusteeship role, either individual may be appointed as trustees or a Trustee company may
be appointed. When individuals are appointed trustees, they are jointly referred to as Board
of Trustees. A trustee company functions through its Board of Directors.
Day to day management of the schemes is handled by an AMC. The AMC is appointed by the
sponsor or the Trustees. Although the AMC manages the schemes, custody of the assets of
the scheme (securities, gold, gold-related instruments & real estate assets) is with a
Custodian, who is appointed by the Trustees.
Investors invest in various schemes of the mutual fund. The record of investors and their
unit-holding may be maintained by the AMC itself, or it can appoint a Registrar & Transfer
Agent (RTA).
The sponsor needs to have a minimum 40% shareholding in the capital of the AMC.
The sponsor has to appoint at least 4 trustees – at least two-thirds of them need to be
independent. Prior approval of SEBI needs to be taken, before a person is appointed as
Trustee.
AMC should have networth of at least Rs 50 crore. At least 50% of the directors should be
independent directors. Prior approval of the trustees is required before a person is appointed
as director on the board of the AMC.
Fund management - the team can be broken into three sub-teams, viz., the analysts, the
fund managers, and the dealers. The analysts analyse various opportunities, be it individual
securities, or sectors, or the state of the markets, or the economy. The fund managers
evaluate the opportunities presented to them by the analysts, the brokers, and other research
firms. The third sub-team is that of the dealers, whose responsibility is to place orders with
securities brokers based on the instructions of the fund managers
Custodian has custody of the assets & is appointed by the board of trustees. Sponsor &
Custodian can’t be the same. Custodian must be Independent. Custodian tracks corporate
benefits.
RTA (Registrar and Transfer Agent) is appointed by AMC and maintains investor’s records.
Investor Service Centres (ISC), are offices of R&T. It is not compulsory to appoint a RTA.
Scheme Auditor & AMC Auditor are different. Scheme Auditor is appointed by Trustee, AMC
auditor by AMC.
Role of calculating the NAV & DISCLOSING IT is done by Fund Accountant. It is not
compulsory to Outsource Fund Accounting Activity.
Distributors have a key role in selling suitable types of mutual fund schemes to their
==================================================================
clients/investors. A distributor can be empanelled with more than one AMCs. Distributors
can be individuals or institutions such as distribution companies, broking companies and
banks.
Distributors need to pass the NISM certification Examination (NISM-Series- V-A: Mutual Fund
Distributors (MFD) Certification Examination) and register with AMFI
SEBI regulates mutual funds, depositories, custodians and registrars & transfer agents in the
country. AMFI is an industry body, but not a self-regulatory organization.
CHAPTER 4: LEGAL AND REGULATORY FRAMEWORK
Currently, there are four regulators

1. Reserve Bank of India (RBI) that regulates the banking system & money markets
2. Securities and Exchange Board of India (SEBI) that regulates the securities markets;
3. Insurance Regulatory and Development Authority of India (IRDAI) that regulates the
insurance market;
4. Pension Fund Regulatory and Development Authority of India (PFRDA) that regulates
the pension market.
These regulators come under the purview of the Ministry of Finance
Advertisement Guidelines for Mutual Funds

When the mutual fund scheme has been in existence for more than 3 years:
• Performance advertisement of mutual fund schemes shall be provided in terms of
CAGR for the past 1 year, 3 years, 5 years and since inception.
• Point-to-point returns on a standard investment of Rs. 10,000 shall also be shown in
addition to CAGR for the scheme to provide ease of understanding to retail investors.
• It should be clearly mentioned whether the disclosed performance is of regular or
direct plan of the Mutual Fund. A footnote should clearly mention that different plans
have different expense structures.
Investors’ Rights & Obligations

Right to beneficial ownership - Unit-holders have proportionate right to the beneficial
ownership of the assets of the scheme. Investor can ask for a Unit Certificate for his Unit-
holding
Right to change the distributor - Investors can choose to change their distributor or opt
for direct investing. This needs to be done through a written request by the investor.
Right to Inspect documents
Unit-holders have the right to inspect key documents such as the Trust Deed, Investment
Management Agreement, Custodial Services Agreement, RTA agreement and Memorandum
& Articles of Association of the AMC.
Right to appoint nominees
The investors can appoint upto 3 nominees, who will be entitled to the ‘Units’ in the event of
the demise of the investors. The investor can also specify the percentage distribution
==================================================================
between the nominees. If no distribution is indicated, then an equal distribution between
the nominees will be presumed.
Right to pledge mutual fund units
Investors can pledge their mutual fund units. This is normally done to offer security to a
financier.
Right to grievance redressal
There is a formal grievance redressal policy for investors. SEBI has mandated that the status
of complaints redressed should be published by each AMC in their annual report
Rights of investors in context of change in Fundamental Attributes
If there is a change in the fundamental attributes of a mutual fund scheme, then the
unitholders are provided the option to exit at the prevailing NAV without any exit load. This
exit window has to be open for at least 30 days.
Rights to terminate appointment of an AMCs
75 percent of unit holders can terminate the appointment of an AMC. Also, 75 percent of the
unitholders (unitholding) can pass a resolution to wind up a scheme
Right to unclaimed amounts

AMC is expected to make a continuous effort to remind the investors through letters to claim
their dues. The Annual Report has to mention the unclaimed amount and the number of such
investors for each scheme.
Recovery of unclaimed amounts by the investors is as follows:
• If the investor claims the money within 3 years, then payment is based on prevailing
NAV i.e. after adding the income earned on the unclaimed money.
• If the investor claims the money after 3 years, then payment is based on the NAV at
the end of 3 years.
SEBI Complaint Redress System

SEBI Complaint Redress System (SCORES) is a web based centralized grievance redress
system of SEBI. SCORES enables investors to lodge, follow up on their complaints and track
the status of redressal of such complaints online on the website (http://scores.gov.in). This
system enables the market intermediaries and listed companies to receive the complaints
from investors, redress such complaints and report redressal
AMFI Code of Ethics (ACE) - sets out the standards of good practices
to be followed by the Asset Management Companies in their operations and in their dealings
with investors, intermediaries and the public.
SEBI (Mutual Funds) Regulation, 1996 requires all Asset Management Companies and
Trustees to abide by the Code of Conduct as specified in the Fifth Schedule to the Regulation.
The AMFI Code has been drawn up to supplement that schedule, to encourage standards
higher than those prescribed by the Regulations for the benefit of investors in the mutual
fund industry.
While the SEBI Code of Conduct lays down broad principles, the AMFI Code of Ethics (ACE)
sets more explicit standards for AMCs and Trustees.
AMFI has also framed a set of guidelines and code of conduct for intermediaries (known as
AMFI Guidelines & Norms for Intermediaries (AGNI)), consisting of individual agents, brokers,
==================================================================
distribution houses and banks engaged in selling of mutual fund products.
CHAPTER 5: SCHEME RELATED INFORMATION
There are primarily two important documents for understanding about the mutual fund
scheme:
a) Scheme Information Document (SID), which has details of the particular scheme
b) Statement of Additional Information (SAI), which has statutory information about
the mutual fund or AMC, that is offering the scheme.
https://youtu.be/Yo1G_Rfg7Js
It stands to reason that a single SAI is relevant for all the schemes offered by a mutual fund.
In practice, SID and SAI are two separate documents, though the legal technicality is that
SAI is part of the SID.
While SEBI does not approve or disapprove the Scheme Related Documents, it gives its
observations. The mutual fund needs to incorporate these observations in these documents.
Thus, the Documents in the market are “vetted” by SEBI, and not approved by SEBI.
Scheme Information Document

The Scheme Information Document (SID) sets forth concisely the information about the
scheme that a prospective investor ought to know before investing
SID and SAI together are the primary source of information for any investor—existing as well
as prospective
RISKOMETER
https://youtu.be/BCdjYBqP6f4?list=PLCZvkZJiAVK56z_al_5b-4WMMRUXMWydc
Riskometer is a pictoral representation of the risk to the principal invested in a mutual fund
product. Risk will be categorized in five levels. There will also be a written statement of the
risk to the principal below the ‘Riskometer’.
Level of Risk Definition Example

Low Principal at Low Risk Liquid or Overnight Fund
==================================================================
Moderately Low Principal at Moderately Low FMP / Capital Protection
Risk Oriented Scheme
Moderate Principal at Moderate Risk Income Fund / Conservative
Monthly Income Plan
Moderately High Principal at Moderately High Index Fund / ETF / Equity
risk dividend yield fund / Solution
Oriented Schemes
High Principal at high risk Sector / Thematic Fund
Fundamental Attributes
Within the SID, there is an important section on fundamental attributes of a scheme with
following parameters:
(i) Type of a scheme
o Open ended/Close ended/Interval scheme
o Sectoral Fund/Equity Fund/Balance Fund/Income Fund/Index Fund/Any other type of Fund
(ii) Investment Objective

o Main Objective - Growth/Income/Both.
o Investment pattern - The tentative Equity/Debt/Money Market portfolio break-up with
minimum and maximum asset allocation, while retaining the option to alter the asset
allocation for a short term period on defensive considerations.
(iii) Terms of Issue

o Liquidity provisions such as listing, repurchase, redemption.
o Aggregate fees and expenses charged to the scheme.
o Any safety net or guarantee provided.
Key Information Memorandum
KIM is essentially a summary of the SID and SAI. It contains the key points of these
documents that are essential for the investor to know to make a decision on the suitability of
the investment for their needs. As per SEBI regulations, every application form is to be
accompanied by the KIM
Some of the key items contained in the KIM are as follows:

• Name of the AMC, mutual fund, Trustee, Fund Manager and scheme
• Dates of Issue Opening, Issue Closing and Re-opening for Sale and Re-purchase
• Investment Objective
• Asset allocation pattern of the scheme
• Risk profile of the scheme
• Plans and Options
• Benchmark Index
• Dividend Policy
• Performance of scheme & benchmark - last 1, 3, 5 yrs & since inception
==================================================================
• Expenses of the scheme
• Information regarding registration of investor grievances
Updation of SID - First Updation after NFO

For Scheme launched in the 1st half of FY → Within 3 months of the end of SAME FY.
For Scheme launched in the 2nd half of FY → Within 3 months of the end of NEXT FY.
Regular Updation
SID needs to be updated every year.
Need Based Updation

SID needs to be updated if there is any change in the fundamental attribute of the scheme.
Updation of SAI
Regular update has to be done by the end of 3 months of every financial year. Material
changes have to be updated on an ongoing basis and uploaded on the websites of the
mutual fund and AMFI.
Updation of KIM
KIM is to be updated at least once a year. As in the case of SID, KIM is to be revised in the
case of change in fundamental attributes.
Each scheme’s NAV is required to be disclosed at the end of each business day. The same is
published on the website of the AMC. The Mutual Fund declares the Net Asset Value of the
scheme on every business day on AMFI’s website www.amfiindia.com (as per the time limit
for uploading NAV defined in the applicable guidelines) and also on their website.
In case of open ended schemes, the NAV is calculated for all business days and released to
the Press. In case of closed ended schemes, the NAV is calculated at least once a week.
Non-Mandatory Disclosures
Fund Factsheet - contains the basic information of each scheme such as the inception
date, corpus size (AUM), current NAV, benchmark and a pictorial depiction of the fund’s style
of managing the fund. The fund’s performance relative to the benchmark is provided for the
different periods along with the benchmark returns, as required by SEBI’s regulations. The
factsheet also provides the SIP returns in the scheme, portfolio allocation to different sectors
and securities. However, some fund houses do not disclose the entire portfolio but only the
top 10 holdings
CHAPTER 6: FUND DISTRIBUTION AND CHANNEL MANAGEMENT PRACTICES
MF Utilities
MF Utilities (MFU) is a transaction aggregating platform that connects investors, RTAs,
==================================================================
distributors, banks, AMCs and others. MFU facilitates the distributors with online access to
submit investor transactions. This platform provides them with a single point for
timestamping of transactions, document submission, paperless transaction facility, and login
facility for their clients.
Investors who register on the MFU are allotted a Common Account Number (CAN) under
which all their mutual fund holdings are consolidated. Investors have to be KYC compliant to
register for a CAN. If an investor is not already KYC compliant, then the MFU will facilitate
KYC registration along with the allotment of ‘CAN’.
Pre-requisites to become Distributor of a Mutual Fund

• Obtaining NISM Certification
• Know Your Distributor Requirements
• Obtaining AMFI Registration Number
• Empanelment with AMCs
Revenue for a mutual fund distributor

The mutual fund distributor earns revenue in the form of commission income for distribution
of the mutual fund products/schemes. The commission may be linked to either the
transaction or to the assets under management
Trail commission is calculated as a percentage of the net assets attributable to the Units
sold by the distributor. The commission payable is calculated on the daily balances and paid
out periodically to the distributor as per the agreement entered into with AMC.
The trail commission is normally paid by the AMC on a quarterly basis or monthly basis. Since
it is calculated on net assets, distributors benefit from increase in net assets arising out of
valuation gains in the market.
Transaction Charges
There shall be no transaction charges on direct investments. The transaction charge, if any,
is deducted by the AMC from the subscription amount and paid to the distributor; and the
balance amount is invested
Transaction Charges in case of transactions through Opt-in Mutual Fund

Distributor
Type of Investor Charges for Purchase of Rs 10,000 and
above
First Time Investor Rs 150
Regular Investor Rs 100
https://youtu.be/If8e18D9cX0?list=PLCZvkZJiAVK56z_al_5b-4WMMRUXMWydc
Applicability of GST on distributors commission

The Goods and Services Tax (GST) became applicable with effect from July 2017. GST is
payable by any person making taxable supplies of goods/services and whose annual turnover
exceeds Rs. 20 lakhs.
==================================================================
A mutual fund distributor, who has registered and obtained a GST number would be required
to raise an invoice for the commission, and pay the GST to Government.
Accordingly, the AMC / MF is liable to pay GST under reverse charge on commission paid to
unregistered distributors
Commission Disclosure
SEBI has mandated Mutual Funds / AMCs to disclose on their respective websites the total
commission and expenses paid to distributors who satisfy one or more of the following
conditions with respect to non-institutional (retail and HNI) investors:
i. Multiple point of presence (More than 20 locations)
ii. AUM raised over Rs. 100 crore across industry in the non-institutional category but
including high networth individuals (HNIs).
iii. Commission received of over Rs. 1 crore p.a. across industry
iv. Commission received of over Rs. 50 lakhs from a single Mutual Fund/AMC
CHAPTER 7: NET ASSET VALUE, TOTAL EXPENSE RATIO & PRICING OF UNITS
The unit-holders’ funds in the scheme is commonly referred to as “net assets”.

Net asset includes the amounts originally invested, the profits booked in the scheme, as well
as appreciation in the investment portfolio. It goes up when the market goes up, even if the
investments have not been sold.
A scheme cannot show better profits by delaying payments. While calculating profits, all the
expenses that relate to a period need to be considered, irrespective of whether or not the
expense has been paid. In accounting jargon, this is called accrual principle.
Similarly, any income that relates to the period will boost profits, irrespective of whether or
not it has been actually received in the bank account. This again is in line with the accrual
principle. In the market, when people talk of NAV, they refer to the value of each unit of the
scheme. Higher the interest, dividend and capital gains earned by the scheme, higher would
be the NAV. Higher the appreciation in the investment portfolio, higher would be the NAV.
Lower the expenses, higher would be the NAV. The difference between the NAV and Re-
purchase Price is called the “exit load”. Dividends can be paid out of distributable reserves.
Investors would be incentivized to hold their units longer, by reducing the load as the unit
holding period increased. Such structures of load are called “Contingent Deferred Sales
Charge (CDSC)”
SEBI has banned entry loads. So, the Sale Price needs to be the same as NAV. The exit load
charged, if any, after the commencement of the SEBI (Mutual Funds) (Second Amendment)
Regulations, 2012, shall be credited to the scheme. Service tax on exit load shall be paid out
of the exit load proceeds and exit load net of service tax shall be credited to the scheme.
Initial issue expenses need to be met by the AMC. There are limits to the recurring expenses
that can be charged to the scheme. These are linked to the nature of the scheme and
Where equity shares of a company are not traded in the market on a day, or they are thinly
traded, a formula is used for the valuation. The valuation formula is based on the Earnings
==================================================================
per Share of the company, its Book Value, and the valuation of similar shares in the market
(peer group).
Debt securities that are not traded on the valuation date are valued on the basis of the yield
matrix prepared by an authorized valuation agency. The yield matrix estimates the yield for
different debt securities based on the credit rating of the security and its maturity profile.
NAV = (Value of stocks + Value of bonds + Value of money market instruments + Dividend
accrued but not received + Interest accrued but not received – Fees payable) / No. of
outstanding units
NAV Calculation Video –

https://youtu.be/Iz0YUFimOTs?list=PLCZvkZJiAVK56z_al_5b-4WMMRUXMWydc
Mark to Market
The process of valuing each security in the investment portfolio of the scheme at its current
market value is called ‘mark to market’ i.e. marking the securities to their market value
Total Expenses in Mutual Fund Scheme

Types of Expenses
All types of expenses incurred by the Asset Management Company have to be clearly
identified and appropriated for all mutual fund schemes.
Investment and Advisory Fees are charged to the scheme by the AMC. The details of
such fees are fully disclosed in the Scheme Information Document
Recurring Expense Limits – Open End Schemes
AUM (Crores) TER (Equity) %
0-500 (500 crores) 2.25

500-750 (250 crores) 2
750-2000 (1250 crores) 1.75
2000-5000 (3000 crores) 1.60
5000-10000 (5000 crores) 1.5
10000-50000 0.05% reduction for every 5000 crore

(slabs of 5000 crores each) AUM increase or part thereof
For AUM exceeding 50000 Crores 1.05
For debt funds the limit shall be 0.25% lesser than Equity Funds
==================================================================
Base TER (Total Expense Ratio) Limits – Other Funds
Type of scheme TER

Closed End - Equity 1.25%
Closed End - Others 1.00%
Index Funds/ETF 1.00%
FoF - Equity-oriented schemes 2.25%
FoF - other than Equity-oriented 2.00%
FoF - Liquid, Index and ETFs 1.00%
TER of FoF scheme, shall be a maximum of twice the TER of the underlying
funds
NAV, Total expense ratio and pricing of units for the Segregated Portfolio
AMC shall not charge investment and advisory fees on the segregated portfolio. However,
TER (excluding the investment and advisory fees) can be charged, on a pro-rata basis only
upon recovery of the investments in segregated portfolio.
The Net Asset Value (NAV) of the segregated portfolio shall be declared on a daily basis.
Adequate disclosure of the segregated portfolio shall appear in all scheme related documents,
in monthly and half-yearly portfolio disclosures and in the annual report of the mutual fund
and the scheme.
Key Accounting and Reporting Requirements

• The accounts of the schemes need to be maintained distinct from the accounts of the
AMC. The auditor for the AMC has to be different from that of the schemes.
• Norms are prescribed on when interest, dividend, bonus issues, rights issues etc.
should be reflected for in the accounts.
• NAV is to be calculated upto 4 decimal places in the case of index funds, liquid funds
and other debt funds.
• NAV for equity and balanced funds is to be calculated upto at least 2 decimal places.
• Investors can hold their units even in a fraction of 1 unit. However, current stock
exchange trading systems may restrict transacting on the exchange to whole units
CHAPTER :8 TAXATION
Capital Gain Tax -

https://youtu.be/7l24tLCd88Y?list=PLCZvkZJiAVK56z_al_5b-4WMMRUXMWydc
➢ Short Term Capital gains – Holding Period

➢ <=1 year for Equity oriented scheme
➢ <=3 years for Non-Equity Schemes
➢ LongTerm Capital gains
➢ >1 year for Equity Schemes
==================================================================
➢ > 3 Years for Non-Equity Schemes
Scheme Equity Non-Equity

Short Term 15% Marginal Rate
Long Term 10% for gains exceeding Rs 1 Lakh 20% after Indexation
Surcharge,Health & Education cess extra
➢ NRI – LTCG tax Non-Equity

➢ Listed Schemes - 20% after indexation
➢ Unlisted – 10% without indexation
Indexation Video - https://youtu.be/xvXvR4unxk8?list=PLCZvkZJiAVK56z_al_5b-
4WMMRUXMWydc
➢ Companies – STCG tax Non-Equity - 25% if total Turnover is less than 250 crore
Setting off Capital Losses under Income Tax Act

• Capital loss, short term or long term, cannot be set off against any other head of income
(e.g. salaries).
• Short term capital loss is to be set off against short term capital gain or long term capital
gain.
• Long term capital loss can only be set off against long term capital gain
Dividend Distribution Tax - DDT has been abolished. The dividend would be added to the
taxable income of the assessee for the year. The dividends would be taxable in the hands
of the recipient at the applicable tax rate.
Taxation - Securities Transaction Tax (STT) is applicable on investments in equity and

equity mutual fund schemes. STT is not payable at the time of Purchase of Units. At the time
of redemption 0.001% STT has to be paid.
Tax benefit under Section 80C of the Income Tax Act

Certain mutual fund schemes, known as Equity Linked Savings Schemes (ELSS) are eligible
for deduction under Section 80C of the Income Tax Act. As the name suggests, this is an
equity linked scheme, and hence the scheme invests in equity shares. The benefit is available
upto Rs. 1.50 lacs per year per taxpayer in case of individuals and HUFs. The scheme has a
lock-in period of three years from the date of investment.
Tax Deducted at Source

There is no TDS on re-purchase proceeds to resident investors.
In case of dividends from mutual fund schemes, even for resident Indians, TDS is applicable.
The tax is required to be deducted at 10 percent on the dividend amount if it exceeds Rs.
5,000.
Applicability of GST
AMC(s) can charge GST, as per applicable Taxation Laws, to the schemes within the limits
==================================================================
prescribed under SEBI (Mutual Fund) Regulations
GST on fees paid on investment management and advisory fees shall be charged to
the scheme in addition to the overall limits specified as per the Total Expense Ratio
(TER) provisions.
• GST on all the fees other than investment and advisory fees shall be charged to the
scheme within the maximum limit of TER.
• GST on exit load, if any, shall be deducted from the exit load and the net amount shall
be credited to the scheme.
• GST on brokerage and transaction cost paid for execution of trade, if any, shall be
within the limit of TER.
• The commission payable to the distributors of mutual funds may be subject to GST, as
applicable in case of the ARN holder. Such tax cannot be charged to the scheme.
CHAPTER 9: INVESTOR SERVICES
Close-ended Schemes have an NFO Open Date and NFO Close Date. But, they have no
Scheme Re-opening Date, because the scheme does not sell or re-purchase units. Investors
will need to buy or sell units from the stock exchange where the scheme is listed.
Direct and Regular Plans

Investors have the option to invest (purchase or subscribe to mutual fund units) directly
without routing the investment through a distributor (Direct Plan). In this case, the investor
must mention “Direct” in the space provided in the application form for entering the AMFI
Registration Number (ARN).
If the investment (purchase/subscription) is routed through a distributor/Advisor (Regular

Plan) then the ARN/RIA number and other details have to be provided in the space provided
for the same.
The direct plan shall have a lower expense ratio excluding distribution expenses, commission,
etc., and no commission shall be paid from such plans. Since the TER is different in both
cases, the plans will have separate NAVs
Account statements for investments
Monthly Statement of Account

Mutual funds issue the Statement of Account every month if there is a transaction during the
month. It shows for each transaction (sale/re-purchase), the value of the transaction, the
relevant NAV and the number of units transacted. Besides, it also provides the closing balance
of units held in that folio and the value of those units based on the latest NAV
Annual Account Statement – MF’s provide the Account Statement to the Unit-holders
who have not transacted during the last 6 months prior to the date of generation of account
statements. The Account Statement reflects the latest closing balance and value of the units
prior to the date of generation of the account statement.
==================================================================
Consolidated Account Statement - (CAS) for each calendar month is sent by post/email
on or before 10th of the succeeding month provided there has been a financial transaction
in the folio in the previous month
Switch is a redemption from 1 scheme & a purchase into another combined into one
transaction.
NACH - National Automated Clearing House (NACH) is a centralised clearing system launched
by the National Payments Corporation of India (NPCI). NACH aims to replace and consolidate
multiple existing Electronic Clearing Service (ECS) systems across India and create a faster
and more efficient clearing platform. It is a web based solution for Banks, Financial
Institutions, Corporate and Governments, to facilitate interbank high volume, electronic
transactions which are repetitive and periodic in nature. This has been introduced in place of
ECS for repetitive payments. NACH have same day presentation and settlement, including
returns processing.
The service is now active in all Indian banks with core banking facility. It comes in two
variants – NACH Credit and NACH Debit. The significant benefits to bank customers include
automatic debits from their account for bill payments (telephone, electricity, etc), loan
instalments, insurance premiums, SIPs and more. Not only this, NACH is useful for corporate
and financial institutions that make payments in bulk like dividend distributions, salaries,
interests, pensions, etc
Unified Payment Interface - (UPI) allows fund transfer between accounts through the
mobile app. The users have to register for mobile banking facility to be able to use the app.
There are many UPI apps available such as BHIM, banking applications, Aadhaar app etc.
which one can download on their phone. After the application (app) is downloaded, a Virtual
Payment Address (VPA) has to be created by going through an authentication process
Application Supported by Blocked Amount - (ASBA) is a facility where the investment

application in a New Fund Offer (NFO) is accompanied by an authorization to the bank to
block the amount of the application money in the investor’s bank account.
The benefit of ASBA is that the money goes out of the investor’s bank account only on
allotment. Until then, it keeps earning interest for the investor. Further, since the money
transferred from the investor’s bank account is the exact application money that is due on
account of the allotment, the investor does not have to wait for any refund
Cash Payments - Mutual funds usually do not accept cash. Small investors, who may not
be tax payers and may not have PAN/bank accounts, such as farmers, small
traders/businessmen/workers are allowed cash transactions for purchase of units in mutual
funds to the extent of Rs. 50,000/- per investor, per mutual fund, per financial year
Instant Access Facility - IAF facilitates credit of redemption proceeds in the bank account
of the investor on the same day of the redemption request. The MFs/AMCs can offer IAF only
in Liquid schemes of the mutual fund. The monetary limit under the IAF is Rs. 50,000 or 90
percent of latest value of investment in the scheme, whichever is lower. This limit is applicable
==================================================================
per day per scheme per investor. Also, there can be repurchase transactions through the
stock exchange platform or MFU platform.
CUT OFF TIMING - https://www.youtube.com/watch?v=wTiqwc8g_QI
Purchase – NON Liquid Funds Time NAV

Less than 2 Lakhs Till 3 PM Same day NAV
Equal or Greater than 2 Lakhs Anytime NAV of Fund Realisation day
Redemption – NON Liquid Funds, Any Amount, till 3 PM, Same Day NAV
Purchase – LIQUID FUNDS Time NAV
Fund available for Utilization Before 1.30 Previous Day NAV
pm
If Fund is not available for utilization on application date before 1.30PM then the NAV
previous to the date of Fund realization before 1.30 pm shall be applicable.
Redemption – LIQUID Funds
Any Amount Till 3PM
NAV of the day immediately
preceding the next business day
Cutoff timings are not applicable for NFO’s and International Funds.
Time Stamping - The precision in setting cut-off timing makes sense only if there is a fool
proof mechanism of capturing the time at which the sale and re-purchase applications are
received Mutual funds disclose Official Points of Acceptance (OPoAs) and their addresses in
the SID and their website. All transaction requests need to be submitted at the OPoAs.
The time stamping on the transaction requests is done at the official points of acceptance.
SEBI and RBI have allowed Qualified Foreign portfolio investors who meet KYC requirements
to invest in equity and debt schemes of Mutual Funds through two routes
1) Direct route – Holding MF units in Demat account through a SEBI registered DP
2) Indirect route – Holding MF units via Unit Confirmation Receipt (UCR)
Individual and non-individual investors are permitted to invest in mutual funds in India. The
‘Who can invest’ section of the Offer Document is the best source to check on eligibility to
invest.
KYC Registration Agencies - KRA
All Investors have to comply with the KYC formalities. In-Person Verification (IPV) by a SEBI-
registered intermediary is compulsory for all investors. IPV done by only one SEBI-registered
intermediary (broker, depository, mutual fund distributor etc.). This IPV will be valid for
transactions with other SEBI-registered intermediaries too. Distributors who have a valid
==================================================================
NISM-Series-V-A: Mutual Fund Distributors certificate and a valid ARN can carry out the In-
person verification if they have completed the KYD process.
Micro SIPs i.e. SIPs with annual investment below Rs 50,000 per Financial Year per Mutual
Fund House is exempted from the PAN Card requirement. Relaxation in PAN requirement is
not available for PIO, HUF, and Non Individuals. It is available for Minor, Individuals and
NRI.Small investors investing in cash, upto Rs. 50,000 per mutual fund per financial year do
not need to provide PAN Card. However Repayment in form of redemptions, dividends, etc.
with respect to aforementioned investments shall be paid only through banking channel. Rs.
50,000 is a composite limit for the small investor’s Micro-SIP and lump sum investments
together.
Government of India authorised the Central Registry of Securitisation and Asset

Reconstruction and Security Interest of India (CERSAI) to act as and to perform the
functions of the Central KYC Record Registry under the PML Rules 2005, including receiving,
storing, safeguarding and retrieving the KYC records in digital form of all the clients in the
financial sector
After the successful completion of cKYC (Central KYC) process, an investor is

allotted a 14 digit KYC Identification Number (KIN) by CERSAI.
e-KYC service of UIDAI – Investors to authorise the transaction through OTP send by
Unique Identification Authority of India (UIDAI) to the mobile number linked with
Aadhar.However only investments upto Rs 50,000 can be done through e-KYC
KYC template finalised by CERSAI has to be used by the registered intermediaries
SIP Top-up Facility - Mutual funds provide an additional facility through an SIP to enhance
the disciplined savings of investors. It is called the SIP Top-Up facility
Nomination
• Nomination can be made in favour of a maximum of three nominees.
• Where there are multiple nominees, the unitholder(s) must define the percentage
holding for each nominee making a total of 100 percent
• Only individual investors can make a nomination. Investments by minors cannot have
a nomination. A Power of Attorney holder cannot make a nomination.
• The nominee can be an individual, including minors and NRIs, central and state
governments and local authorities. If the nominee is a minor, then a guardian too can
be specified.
• nomination cannot be made in favour of a trust (except a religious or charitable trust),
society, body corporate, partnership, Karta of an HUF or a Power of Attorney holder.
Transmission of Units - process of transferring units to the person entitled to receive it in

the event of the death of the unit holder. The person entitled to receive it depends upon the
folio conditions of joint holding and nomination. If the first holder passes away, the second
==================================================================
holder is substituted as first holder. In a singly held folio with nominations, the units are
transferred to the nominee. If a folio is jointly held and has nominations, the right of the joint
holder will take precedence. If there are no nominations in the folio, the units are transmitted
to the legal successors
Service provided by Mutual

Turnaround Time
Funds
NAV Calculation and disclosure On a daily basis
Mutual Fund Schemes (other than
IPO of ELSS) to remain open for Maximum of 15 days
subscription
Mutual Fund Schemes to allot units
Within 5 business days of closure of NFOs
or refund money
Re-opening for ongoing sale/re-
purchase of open ended scheme Within 5 business days of allotment
(other than ELSS)
Dispatch of Dividend warrants to
Within 30 days of declaration of the dividend
investors
Dispatch of Redemption/re-purchase Within 10 working days from the date of receipt of
cheques to investors transaction request.
Scheme-wise Annual Report or an Four months from the date of closure of the relevant
abridged summary to all unit holders accounts year
Statement of portfolio to be sent to Before the expiry of 10 days from the close of each
all unitholders half year (i.e. 31st Mar and 30th Sep)
Half Yearly Disclosures (unaudited
Within 1 month from the close of each half year (i.e.
financial results) on mutual fund
31st Mar and 30th Sep)
website
A Consolidated Account Statement
On or before 10th of the succeeding month
(CAS) by post/email
To be issued within 5 working days of the receipt of
request for the certificate.
Unit certificate For close ended schemes, units in demat form to be
issued to unitholders within 2 working days of the
receipt of request from unitholders.
Initial transaction SIP / STP / SWP within 10 working days
once every calendar quarter (March, June,
Ongoing SIP/STP/SWP September, December) within 10 working days of the
end of the quarter.
it will be dispatched to investor within 5 working days
On specific request by investor
without any cost.
==================================================================
CHAPTER 10: RISK, RETURN AND PERFORMANCE OF FUNDS
https://www.youtube.com/watch?v=IuoBu2OqaCc
General Risk Factors

• Liquidity Risk
• Interest Rate Risk
• Re-investment Risk
• Political Risk
• Economic Risk
• Foreign Currency Risk
Specific Risk Factors

• Risk related to equity and equity related securities
o Risk associated with short selling and Stock Lending
o Risks associated with mid-cap and small-cap companies
o Risk associated with Dividend
o Risk associated with Derivatives
• Risks related to debt funds
o Reinvestment Risk
o Rating Migration Risk
o Term Structure of Interest Rates Risk
o Credit Risk
o Risk associated with floating rate securities
o Risk factors associated with repo transactions in Corporate Bonds
o Risks associated with Creation of Segregated portfolio
o Risks associated with investments in Securitized Assets
Fundamental and Technical analysis

Fundamental analysis is a study of the business and financial statements of a firm in order
to identify securities suitable for the strategy of the schemes as well as those with high
potential for investment returns and where the risks are low.
Fundamental analysis → security selection strategy → identifying long term investment
avenues.
Technical Analysts believe that price behaviour of a share over a period of time throws up
trends for the future direction of the price. Along with past prices, the volumes traded indicate
the underlying strength of the trend and are a reflection of investor sentiment, which in turn
will influence future price of the share. Technical Analysts therefore study price-volume charts
(a reason for their frequently used description as “chartists”) of the company’s shares to
decide support
Earnings per Share (EPS): Net profit after tax ÷ No. of equity shares outstanding
Price to Earnings Ratio (P/E Ratio): Market Price per share ÷ Earnings Per Share (EPS)
==================================================================
The Price Earnings to Growth (PEG) ratio relates the PE ratio to the growth estimated
in the company’s earnings. A PEG ratio of one indicates that the market has fairly valued the
company’s shares, given its expected growth in earnings. A ratio less than one indicates the
equity shares of the company are undervalued, and a ratio greater than one indicates an
overvalued share.
Book Value per Share: Net Worth ÷ No. of equity shares outstanding
Price to Book Value: Market Price per share ÷ Book Value per share
Dividend Yield: Dividend per share ÷ Market price per share
Growth investment style entails investing in high growth stocks i.e. stocks of companies that
are likely to grow much faster than the market
Value investment style is an approach of picking up stocks, which are priced lower than their
intrinsic value, based on fundamental analysis
Investors need a longer investment horizon to benefit from the price appreciation in such
stocks.
Portfolio building approach – Top down and Bottom up

A bottom-up approach on the other hand analyses the company-specific factors first and then
evaluates the industry factors and finally the macro-economic scenario and its impact on the
companies that are being considered for investment. Stock selection is the key decision in
this approach; sector allocation is a result of the stock selection decisions.
Both the approaches have their merit. Top down approach minimizes the chance of being
stuck with large exposure to a poor sector. Bottom up approach ensures that a good stock is
picked, even if it belongs to a sector that is not so hot. What is important is that the approach
selected should be implemented professionally.
Standard Deviation - is a measure of total risk in an investment. As a measure of risk it is

relevant for both debt and equity schemes.
A high standard deviation indicates greater volatility in the returns and greater risk.
Comparing the standard deviation of a scheme with that of the benchmark and peer group
funds gives the investor a perspective of the risk in the scheme
Beta - is based on the Capital Asset Pricing Model (CAPM), which states that there are two
kinds of risk in investing in equities – systematic risk and non-systematic risk.
Modified duration measures the sensitivity of value of a debt security to changes in interest
rates. Higher the modified duration, higher is the interest sensitive risk in a debt portfolio
The credit rating profile indicates the credit or default risk in a scheme. Government securities
do not have a credit risk. Similarly, cash and cash equivalents do not have a credit risk.
==================================================================
Investments in corporate issuances carry credit risk. Higher the credit rating, lower is the
default risk.
Segregated portfolio” means a portfolio, comprising of debt or money market instrument

affected by a credit event, that has been segregated in a mutual fund scheme. “Main
portfolio” means the scheme portfolio excluding the segregated portfolio.
Asset Management Company (AMC) were allowed to create segregated portfolio in a mutual
fund scheme in case of a credit event at issuer level i.e. downgrade in credit rating by a SEBI
registered Credit Rating Agency (CRA). Vide the December 28, 2018 circular, creation of
segregated portfolio was made optional and at the discretion of the AMC.
In partial modification to SEBI circular issued in December 2018, SEBI permitted to create
segregated portfolio of unrated debt or money market instruments by mutual fund schemes
of an issuer that does not have any outstanding rated debt or money market instruments
subject to the following
Segregated portfolio of such unrated debt or money market instruments may be created
only in case of actual default of either the interest or principal amount. As per SEBI circular
dated December 28, 2018, credit event is considered for creation of segregated portfolio,
however vide SEBI circular dated November 7, 2019, ‘actual default’ by the issuer of such
instruments was considered for creation of segregated portfolio
CHAPTER 11: MUTUAL FUND SCHEME PERFORMANCE
Returns can be measured in various ways – Simple Returns, Annualised Returns,

Compounded Returns, Compounded Annual Growth Rate. CAGR assumes that all dividend
payouts are reinvested in the scheme at the ex-dividend NAV.
SEBI guidelines govern disclosures of return by mutual fund schemes. Loads and taxes pull
the investor’s returns below that earned by the Scheme. Investor returns are also influenced
by various actions of the investor himself.
Price Return Index or Total Return Index

Earlier, the Mutual Fund schemes were benchmarked to the Price Return variant of an Index
(PRI). PRI only captures capital gains of the index constituents.
With effect from February 1, 2018, the mutual fund schemes are benchmarked to the Total
Return variant of an Index (TRI). The Total Return variant of an index considers all
dividends/interest payments that are generated from the basket of constituents that make
up the index in addition to the capital gains.
NSE’s MIBOR (Mumbai Inter-Bank Offered Rate) is based on short term money market.
NSE similarly has indices for the Government Securities Market.
ICICI Securities’ Sovereign Bond Index (I-Bex) is based on government securities. It

consists of an umbrella index covering the entire market, and sub-indices catering to three
contiguous maturity buckets. The three sub-indices are—Si-Bex (1 to 3 years), Mi-Bex (3
to 7 years) and Li-Bex (more than 7 years )
==================================================================
Liquid schemes invest in securities of upto 91 days’ maturity. Therefore, a short term money
market benchmark such as NSE’s MIBOR or CRISIL Liquid Fund Index is suitable.
Hybrid Funds - invest in a mix of debt and equity. Therefore, the benchmark for a hybrid
fund is a blend of an equity and debt index. CRISIL Hybrid Index
Gold ETF - Gold price would be the benchmark for such funds.
Real Estate Funds - A few real estate services companies have developed real estate
indices. These have shorter histories, and are yet to earn the wider acceptance that the
equity indices enjoy.
International Funds - The benchmark would depend on where the scheme proposes to
invest. Thus, a scheme seeking to invest in China might have the Hang Seng Index (Chinese
index) as the benchmark.
S&P 500 may be appropriate for a scheme that would invest largely in the US market
Standard benchmarks
Equity scheme → Sensex or Nifty
Long term debt scheme → 10 year dated GoI security
Short-term debt fund → 1 year T-Bill
Gold is a truly international asset, whose quality can be objectively measured. The value of
gold in India depends on the international price of gold (which is quoted in foreign currency),
the exchange rate for converting the currency into Indian rupees, and any duties on the
import of gold.
Unlike gold, which is a global asset, real estate is a local asset. It cannot be transported –
and its value is driven by local factors
Sharpe Ratio = (Rs minus Rf) ÷ Standard Deviation
Treynor Ratio = (Rs minus Rf) ÷ Beta
Alpha - Non-index schemes too would have a level of return, which is in line with its higher
or lower beta as compared to the market. Let us call this the optimal return.
The difference between a scheme’s actual return and its optimal return is its Alpha—a
measure of the fund manager’s performance. Alpha measures the performance
of the investment in comparison to a suitable market index. Positive alpha is indicative of
outperformance by the fund manager; negative alpha might indicate under-performance
Tracking Error - The Beta of the market, by definition is 1. An index fund mirrors the index.
Therefore, the index fund too would have a Beta of 1, and it ought to earn the same return
as the market. The difference between an index fund’s return and the market return is the
tracking error
==================================================================
CHAPTER 12: MUTUAL FUND SCHEME SELECTION
International Equity funds

When an Indian investor invests in equities abroad, he is essentially taking two exposures:
• An exposure on the international equity market.
• An exposure to the exchange rate of the rupee. If the investor invests in the US, and
the US Dollar becomes stronger during the period of his investment, he benefits; if the
US Dollar weakens (i.e. Rupee becomes stronger), he loses or the portfolio returns will
be lower.
Portfolio Turnover
Purchase and sale of securities entails broking costs for the scheme. Frequent churning of
the portfolio would not only add to the broking costs, but also be indicative of unsteady
investment management.
Portfolio Turnover Ratio is calculated as Value of Purchase and Sale of Securities during a
period divided by the average size of net assets of the scheme during the period
The portfolio turnover needs to be viewed in the light of the investment style.
Six month holding period may be too short for a value investment style, but perfectly
acceptable for a scheme that wants to benefit from shifts in momentum. A short holding
period may indicate that the fund manager is looking for tactical investments to take
advantage of short-term market opportunities rather than identifying and investing in
fundamentally strong companies for the long-term.
Core and satellite portfolio

the portfolio should be divided into core and satellite portfolios. The core portfolio will be
invested according to the long term needs and goals of the investor. The satellite portfolio
will be invested to take advantage of expected short-term market movements.
For example, a diversified equity fund, large cap, mid-cap funds, among others may form
part of the core portfolio since they generate long-term returns in broad alignment with the
markets.
Sector funds on the other hand do well cyclically, and investors will consider investing in them
when the economic factors are positive for a particular sector.
Similarly, long term gilt funds will do well when interest rates are expected to decline. The
exposure to gold funds can be increased when inflation is high or when there are political,
economic and fiscal uncertainties. These are all tactical investments and are held for the
period when the conditions are suitable. The division between core and satellite portfolios
will depend upon each investor’s profile. Conservative investors may like a very small
proportion of their overall portfolio to be managed tactically. A moderate investor may be
comfortable with an 80 percent allocation to core investments and a 20 percent exposure to
satellite or tactical portfolio. An investor comfortable with taking higher risk may have an
even higher exposure to tactical investments.
Significant Unit holder means any entity holding 5% or more of the total corpus of any
scheme.
==================================================================
Amongst index schemes, tracking error is a basis to select the better scheme. Lower the
tracking error, the better it is. Similarly, Gold ETFs need to be selected based on how well
they track gold prices.
https://nism.modelexam.in (Mock Tests for NISM, Bank , Insurance & Financial Planning
Exams)
IMPORTANT NOTE :
1. Attend ALL Questions. There is NO NEGATIVE mark.
2. For the questions you don’t know the right answer – Try to eliminate the wrong
answers and take a guess on the remaining answers.
3. DO NOT MEMORISE the question & answers. It’s not the right to way to prepare for
any NISM exam. Good understanding of Concepts is essential.
Scan the following QR code for NISM Mutual Fund Exam Training Videos
YouTube Training Video Link
https://www.youtube.com/playlist?list=PLCZvkZJiAVK56z_al_5b-4WMMRUXMWydc
All the Best ☺

MODELEXAM
94, 1st Floor, TPK Road, Andalpuram, Madurai – 625 003.
Email: myakshaya@gmail.com, WhatsApp only : 98949 49988
https://nism.modelexam.in

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YouTube Training Video Link

https://nism.modelexam.in – NISM Mock Tests

NISM Series 5A - MUTUAL FUND DISTRIBUTORS EXAM

Total Questions = 100 X 1 mark each ( NO NEGATIVE MARKS )

Total Duration = 2 hours.

Passing score = 50%

Certificate Validity = 3 years.

Certificate Renewal → Attend NISM CPE Session

Unit 1 Investment Landscape 8%

Unit 2 Concept & Role of a Mutual Fund 6%

Unit 3 Legal Structure of Mutual Funds in India 4%

Unit 4 Legal and Regulatory Framework 10 %

Unit 6 Fund Distribution and Channel Management Practices 6%

Unit 9 Investor Services 20 %

Unit 10 Risk, Return and Performance of Funds 7%

Unit 11 Mutual Fund Scheme Performance 7%

Unit 12 Mutual Fund Scheme Selection 10 %

YouTube videos – Topic wise

1. How to become a Mutual Fund Agent?

CHAPTER 1: INVESTMENT LANDSCAPE

Factors to evaluate investments - Safety, Liquidity, Returns, Convenience, Ticket

Different Asset Classes - Real Estate, Commodities, Fixed Income, Equity

Equity Fixed Income

Market Risk and Price Risk

Interest Rate Risk

Behavioral Biases in Investment Decision Making

Understanding Asset Allocation

CHAPTER 2: CONCEPT AND ROLE OF A MUTUAL FUND

WHAT IS A MUTUAL FUND?

Thus a Mutual Fund offers an opportunity to invest in a diversified, professionally managed

Net Asset Value (NAV) – Current market price of the unit.

NAV & Sale Price Explanation - https://youtu.be/rVuo_gTWTLQ

WHY SHOULD YOU INVEST IN MUTUAL FUNDS?

1. Professional Management – Investment managed by Fund Manager & team

TYPES OF MUTUAL FUND SCHEMES

By the management of the portfolio

SEBI - Categorization and Rationalization of Mutual Fund Schemes

Hybrid Funds – Investing in two or more asset class

Equity & Equity related

Scheme having a lock-in for An open ended fund for investment

FoFs Minimum investment in the An open ended fund of fund scheme

Index or Passive Funds : https://www.youtube.com/watch?v=uq7ICqOk4bw

Gold Exchange Traded Funds (GETFs) –

CHAPTER 3: LEGAL STRUCTURE OF MUTUAL FUNDS IN INDIA

FUND STRUCTURE & CONSTITUENTS -

CHAPTER 4: LEGAL AND REGULATORY FRAMEWORK

Currently, there are four regulators

These regulators come under the purview of the Ministry of Finance

Advertisement Guidelines for Mutual Funds

Investors’ Rights & Obligations

Right to unclaimed amounts

SEBI Complaint Redress System

CHAPTER 5: SCHEME RELATED INFORMATION

Scheme Information Document

Level of Risk Definition Example

(ii) Investment Objective

(iii) Terms of Issue

Key Information Memorandum

Some of the key items contained in the KIM are as follows:

Updation of SID - First Updation after NFO

Need Based Updation

CHAPTER 6: FUND DISTRIBUTION AND CHANNEL MANAGEMENT PRACTICES