INTRODUCTION TO MUTUAL FUNDS

WHAT ARE MUTUAL FUNDS?

A mutual fund is a collective investment vehicle that collects & pools money from a number
of investors and invests the same in equities, bonds, government securities, money market
instruments.
The money collected in mutual fund scheme is invested by professional fund managers in
stocks and bonds etc. in line with a scheme’s investment objective. The income / gains
generated from this collective investment scheme are distributed proportionately amongst the
investors, after deducting applicable expenses and levies, by calculating a scheme’s “Net
Asset Value” or NAV. In return, mutual fund charges a small fee.
In short, mutual fund is a collective pool of money contributed by several investors and
managed by a professional Fund Manager.
Mutual Funds in India are established in the form of a Trust under Indian Trust Act, 1882, in
accordance with SEBI (Mutual Funds) Regulations, 1996.
The fees and expenses charged by the mutual funds to manage a scheme are regulated and are
subject to the limits specified by SEBI.

HOW A MUTUAL FUND WORKS?

One should avoid the temptation to review the fund's performance each time the market falls
or jumps up significantly. For an actively-managed equity scheme, one must have patience
and allow reasonable time - between 18 and 24 months - for the fund to generate returns in
the portfolio.
When you invest in a mutual fund, you are pooling your money with many other investors.
Mutual fund issues “Units” against the amount invested at the prevailing NAV. Returns from
a mutual fund may include income distributions to investors out of dividends, interest, capital
gains or other income earned by the mutual fund. You can also have capital gains (or losses)
if you sell the mutual fund units for more (or less) than the amount you invested.
Mutual funds are ideal for investors who –
 lack the knowledge or skill / experience of investing in stock markets directly.
 want to grow their wealth, but do not have the inclination or time to research the stock
market.
 wish to invest only small amounts.

WHY INVEST IN MUTUAL FUNDS?

As investment goals vary from person to person – post-retirement expenses, money for
children’s education or marriage, house purchase, etc. – the investment products required to
achieve these goals too vary. Mutual funds provide certain distinct advantages over investing
in individual securities. Mutual funds offer multiple choices for investment across equity
shares, corporate bonds, government securities, and money market instruments, providing an
excellent avenue for retail investors to participate and benefit from the uptrends in capital
markets. The main advantages are that you can invest in a variety of securities for a relatively
low cost and leave the investment decisions to a professional manager.

Types of Mutual Funds based on structure

 Open-Ended Funds: These are funds in which units are open for purchase or
redemption through the year. All purchases/redemption of these fund units are done
at prevailing NAVs. Basically these funds will allow investors to keep invest as long
as they want. There are no limits on how much can be invested in the fund. They also
tend to be actively managed which means that there is a fund manager who picks the
places where investments will be made. These funds also charge a fee which can be
higher than passively managed funds because of the active management. THey are an
ideal investment for those who want investment along with liquidity because they are
not bound to any specific maturity periods. Which means that investors can withdraw
their funds at any time they want thus giving them the liquidity they need.
 Close-Ended Funds: These are funds in which units can be purchased only during
the initial offer period. Units can be redeemed at a specified maturity date. To provide
for liquidity, these schemes are often listed for trade on a stock exchange. Unlike
open ended mutual funds, once the units or stocks are bought, they cannot be sold
back to the mutual fund, instead they need to be sold through the stock market at the
prevailing price of the shares.
 Interval Funds: These are funds that have the features of open-ended and close-
ended funds in that they are opened for repurchase of shares at different intervals
during the fund tenure. The fund management company offers to repurchase units
from existing unitholders during these intervals. If unitholders wish to they can
offload shares in favour of the fund.

Types of Mutual Funds based on asset class

 Equity Funds: These are funds that invest in equity stocks/shares of companies.
These are considered high-risk funds but also tend to provide high returns. Equity
funds can include specialty funds like infrastructure, fast moving consumer goods
and banking to name a few. They are linked to the markets and tend to
 Debt Funds: These are funds that invest in debt instruments e.g. company
debentures, government bonds and other fixed income assets. They are considered
safe investments and provide fixed returns. These funds do not deduct tax at source
so if the earning from the investment is more than Rs. 10,000 then the investor is
liable to pay the tax on it himself.
 Money Market Funds: These are funds that invest in liquid instruments e.g. T-Bills,
CPs etc. They are considered safe investments for those looking to park surplus
funds
 for immediate but moderate returns. Money markets are also referred to as cash
markets and come with risks in terms of interest risk, reinvestment risk and credit
risks.
 Balanced or Hybrid Funds: These are funds that invest in a mix of asset classes. In
some cases, the proportion of equity is higher than debt while in others it is the other
way round. Risk and returns are balanced out this way. An example of a hybrid fund
would be Franklin India Balanced Fund-DP (G) because in this fund, 65% to 80% of
the investment is made in equities and the remaining 20% to 35% is invested in the
debt market. This is so because the debt markets offer a lower risk than the equity
market.

Types of Mutual Funds based on investment objective

 Growth funds: Under these schemes, money is invested primarily in equity stocks
with the purpose of providing capital appreciation. They are considered to be risky
funds ideal for investors with a long-term investment timeline. Since they are risky
funds they are also ideal for those who are looking for higher returns on their
investments.
 Income funds: Under these schemes, money is invested primarily in fixed-income
instruments e.g. bonds, debentures etc. with the purpose of providing capital
protection and regular income to investors.
 Liquid funds: Under these schemes, money is invested primarily in short-term or
very short-term instruments e.g. T-Bills, CPs etc. with the purpose of providing
liquidity. They are considered to be low on risk with moderate returns and are ideal
for investors with short-term investment timelines.
 Tax-Saving Funds (ELSS): These are funds that invest primarily in equity shares.
Investments made in these funds qualify for deductions under the Income Tax Act.
They are considered high on risk but also offer high returns if the fund performs well.
 Capital Protection Funds: These are funds where funds are are split between
investment in fixed income instruments and equity markets. This is done to ensure
protection of the principal that has been invested.
 Fixed Maturity Funds: Fixed maturity funds are those in which the assets are
invested in debt and money market instruments where the maturity date is either the
same as that of the fund or earlier than it.
 Pension Funds: Pension funds are mutual funds that are invested in with a really
long term goal in mind. They are primarily meant to provide regular returns around
the time that the investor is ready to retire. The investments in such a fund may be
split between equities and debt markets where equities act as the risky part of
the investment providing higher return and debt markets balance the risk and provide
lower but steady returns. The returns from these funds can be taken in lump sums, as
a pension or a combination of the two.

Types of Mutual Funds based on risk

 Low risk: These are the mutual funds where the investments made are by those who
do not want to take a risk with their money. The investment in such cases are made in
places like the debt market and tend to be long term investments. As a result of
them
 being low risk, the returns on these investments is also low. One example of a low
risk fund would be gilt funds where investments are made in government securities.
 Medium risk: These are the investments that come with a medium amount of risk to
the investor. They are ideal for those who are willing to take some risk with the
investment and tends to offer higher returns. These funds can be used as an
investment to build wealth over a longer period of time.
 High risk: These are those mutual funds that are ideal for those who are willing to
take higher risks with their money and are looking to build their wealth. One example
of high risk funds would be inverse mutual funds. Even though the risks are high with
these funds, they also offer higher returns.

RISK FACTORS
STANDARD RISK
FACTORS
Mutual Fund Schemes are not guaranteed or assured return products.
Investment in Mutual Fund Units involves investment risks such as trading volumes,
settlement risk, liquidity risk, default risk including the possible loss of principal.
As the price / value / interest rates of the securities in which the Scheme invests fluctuates,
the value of investment in a mutual fund Scheme may go up or down.
In addition to the factors that affect the value of individual investments in the Scheme, the
NAV of the Scheme may fluctuate with movements in the broader equity and bond markets
and may be influenced by factors affecting capital and money markets in general, such as,
but not limited to, changes in interest rates, currency exchange rates, changes in Government
policies, taxation, political, economic or other developments and increased volatility in the
stock and bond markets.
Past performance does not guarantee future performance of any Mutual Fund Scheme.

SPECIFIC RISK FACTORS RISKS ASSOCIATED WITH INVESTMENTS IN

EQUITIES
(a) Risk of losing money:
Investments in equity and equity related instruments involve a degree of risk and investors
should not invest in the equity schemes unless they can afford to take the risk of possible loss
of principal.
(b) Price Risk:
Equity shares and equity related instruments are volatile and prone to price fluctuations on a
daily basis.
(c) Liquidity Risk for listed securities:
The liquidity of investments made in the equities may be restricted by trading volumes and
settlement periods. Settlement periods may be extended significantly by unforeseen
circumstances. While securities that are listed on the stock exchange carry lower liquidity
risk, the ability to sell these investments is limited by the overall trading volume on the stock
exchanges. The inability of a mutual fund to sell securities held in the portfolio could result
in potential losses to the scheme, should there be a subsequent decline in the value of
securities held in the scheme portfolio and may thus lead to the fund incurring losses till the
security is finally sold.

(d) Event Risk:

Price risk due to company or sector specific event.

RISKS ASSOCIATED WITH INVESTMENT IN DEBT SECURITIES AND MONEY

MARKET INSTRUMENTS
Debt Securities are subject to the risk of an issuer’s inability to meet principal and interest
payments on the obligation (Credit Risk) on the due date(s) and may also be subject to price
volatility due to such factors as interest rate sensitivity, market perception of the
creditworthiness of the issuer and general market liquidity (Market Risk).
The timing of transactions in debt obligations, which will often depend on the timing of the
Purchases and Redemptions in the Scheme, may result in capital appreciation or depreciation
because the value of debt obligations generally varies inversely with the prevailing interest
rates.
 Interest Rate Risk
Market value of fixed income securities is generally inversely related to interest rate
movement. Generally, when interest rates rise, prices of existing fixed income securities fall
and when interest rates drop, such prices increase. Accordingly, value of a scheme portfolio
may fall if the market interest rate rise and may appreciate when the market interest rate
comes down. The extent of fall or rise in the prices depends upon the coupon and maturity of
the security. It also depends upon the yield level at which the security is being traded.
 Credit Risk
This is risk associated with default on interest and /or principal amounts by issuers of fixed
income securities. In case of a default, scheme may not fully receive the due amounts and
NAV of the scheme may fall to the extent of default. Even when there is no default, the price
of a security may change with expected changes in the credit rating of the issuer. It may be
mentioned here that a government security is a sovereign security and is safer. Corporate
bonds carry a higher amount of credit risk than government securities. Within corporate
bonds also there are different levels of safety and a bond rated higher by a rating agency is
safer than a bond rated lower by the same rating agency.
 Spread Risk
Credit spreads on corporate bonds may change with varying market conditions. Market value
of debt securities in portfolio may depreciate if the credit spreads widen and vice
versa.
Similarly, in case of floating rate securities, if the spreads over the benchmark security /
index widen, then the value of such securities may depreciate.
 Liquidity Risk
Liquidity risk refers to the ease with which securities can be sold at or near its valuation
yield- to-maturity (YTM) or true value. Liquidity condition in market varies from time to
time. The liquidity of a bond may change, depending on market conditions leading to
changes in the liquidity premium attached to the price of the bond. In an environment of tight
liquidity, necessity to sell securities may have higher than usual impact cost. Further,
liquidity of any particular security in portfolio may lessen depending on market condition,
requiring higher discount at the time of selling.
The primary measure of liquidity risk is the spread between the bid price and the offer price
quoted by a dealer. Trading volumes, settlement periods and transfer procedures may restrict
the liquidity of some of these investments. Different segments of the Indian financial markets
have different settlement periods, and such periods may be extended significantly by
unforeseen circumstances. Further, delays in settlement could result in temporary periods
when a portion of the assets of the Scheme are not invested and no return is earned thereon or
the Scheme may miss attractive investment opportunities.
At the time of selling the security, the security may become illiquid, leading to loss in value
of the portfolio. The purchase price and subsequent valuation of restricted and illiquid
securities may reflect a discount, which may be significant, from the market price of
comparable securities for which a liquid market exists.
 Counterparty Risk
This is the risk of failure of the counterparty to a transaction to deliver securities against
consideration received or to pay consideration against securities delivered, in full or in part
or as per the agreed specification. There could be losses to the fund in case of a counterparty
default.
 Prepayment Risk
This arises when the borrower pays off the loan sooner than the due date. This may result in
a change in the yield and tenor for the mutual fund scheme. When interest rates decline,
borrowers tend to pay off high interest loans with money borrowed at a lower interest rate,
which shortens the average maturity of Asset-backed securities (ABS). However, there is
some prepayment risk even if interest rates rise, such as when an owner pays off a mortgage
when the house is sold or an auto loan is paid off when the car is sold. Since prepayment risk
increases when interest rates decline, this also introduces reinvestment risk, which is the risk
that the principal may only be reinvested at a lower rate.
 Re-investment Risk
Investments in fixed income securities carry re-investment risk as the interest rates prevailing
on the coupon payment or maturity dates may differ from the original coupon of the bond
(the purchase yield of the security). This may result in final realized yield to be lower than
that expected at the time
The additional income from reinvestment is the "interest on interest" component. There may
be a risk that the rate at which interim cash flows can be reinvested are lower than that
originally assumed.

ADVANTAGES OF INVESTING IN MUTUAL FUNDS

1. Professional Management — Investors may not have the time or the required knowledge
and resources to conduct their research and purchase individual stocks or bonds. A mutual
fund is managed by full-time, professional money managers who have the expertise,
experience and resources to actively buy, sell, and monitor investments. A fund manager
continuously monitors investments and rebalances the portfolio accordingly to meet the
scheme’s objectives. Portfolio management by professional fund managers is one of the most
important advantages of a mutual fund.
2. Risk Diversification — Buying shares in a mutual fund is an easy way to diversify your
investments across many securities and asset categories such as equity, debt and gold, which
helps in spreading the risk - so you won't have all your eggs in one basket. This proves to be
beneficial when an underlying security of a given mutual fund scheme experiences market
headwinds. With diversification, the risk associated with one asset class is countered by the
others. Even if one investment in the portfolio decreases in value, other investments may not
be impacted and may even increase in value. In other words, you don’t lose out on the entire
value of your investment if a particular component of your portfolio goes through a turbulent
period. Thus, risk diversification is one of the most prominent advantages of investing in
mutual funds.
3. Affordability & Convenience (Invest Small Amounts) — For many investors, it could
be more costly to directly purchase all of the individual securities held by a single mutual
fund. By contrast, the minimum initial investments for most mutual funds are more
affordable.
4. Liquidity — You can easily redeem (liquidate) units of open ended mutual fund schemes
to meet your financial needs on any business day (when the stock markets and/or banks are
open), so you have easy access to your money. Upon redemption, the redemption amount is
credited in your bank account within one day to 3-4 days, depending upon the type of
scheme e.g., in respect of Liquid Funds and Overnight Funds, the redemption amount is paid
out the next business day.
However, please note that units of close-ended mutual fund schemes can be redeemed only
on maturity. Likewise, units of ELSS have a 3-year lock-in period and can be liquidated only
thereafter.
5. Low Cost — An important advantage of mutual funds is their low cost. Due to huge
economies of scale, mutual funds schemes have a low expense ratio. Expense ratio represents
the annual fund operating expenses of a scheme, expressed as a percentage of the fund’s
daily net assets. Operating expenses of a scheme are administration, management,
advertising related expenses, etc. The limits of expense ratio for various types of schemes
has been specified under Regulation 52 of SEBI Mutual Fund Regulations, 1996.
6. Well-Regulated — Mutual Funds are regulated by the capital markets regulator,
Securities and Exchange Board of India (SEBI) under SEBI (Mutual Funds) Regulations,
1996. SEBI has
laid down stringent rules and regulations keeping investor protection, transparency
with appropriate risk mitigation framework and fair valuation principles.

7. Tax Benefits —Investment in ELSS upto ₹1,50,000 qualifies for tax benefit under section
80C of the Income Tax Act, 1961. Mutual Fund investments when held for a longer term are
tax efficient.

SEBI CATEGORIZATION OF MUTUAL FUND SCHEMES

As per SEBI guidelines on Categorization and Rationalization of schemes issued in October
2017, mutual fund schemes are classified as –
 Equity Schemes
 Debt Schemes
 Hybrid Schemes
 Solution Oriented Schemes – For Retirement and Children
 Other Schemes – Index Funds & ETFs and Fund of Funds
– Under Equity category, Large, Mid and Small cap stocks have now been defined.
– Naming convention of the schemes, especially debt schemes, as per the risk level of
underlying portfolio (e.g., the erstwhile ‘Credit Opportunity Fund’ is now called “Credit Risk
Fund”)
– Balanced / Hybrid funds are further categorised into conservative hybrid fund, balanced
hybrid fund and aggressive hybrid fund.

EQUITY SCHEMES
An equity Scheme is a fund that –
– Primarily invests in equities and equity related instruments.
– Seeks long term growth but could be volatile in the short term.
– Suitable for investors with higher risk appetite and longer investment horizon.
The objective of an equity fund is generally to seek long-term capital appreciation. Equity
funds may focus on certain sectors of the market or may have a specific investment style,
such as investing in value or growth stocks.
Equity Fund Categories as per SEBI guidelines on Categorization and Rationalization
of schemes
Multi Cap Fund* At least 65% investment in equity & equity related
instruments
Large Cap Fund At least 80% investment in large cap stocks
Large & Mid Cap Fund At least 35% investment in large cap stocks and 35% in mid
cap stocks
 Mid Cap Fund At least 65% investment in mid cap stocks
Small cap Fund At least 65% investment in small cap stocks

Dividend Yield FundPredominantly invest in dividend yielding stocks, with at least

65% in stocks
Value Fund Value investment strategy, with at least 65% in stocks
Contra Fund Scheme follows contrarian investment strategy with at least 65%
in stocks
Focused Fund Focused on the number of stocks (maximum 30) with at least 65%
in equity & equity related instruments
Sectoral/ Thematic At least 80% investment in stocks of a particular sector/ theme
Fund
ELSS At least 80% in stocks in accordance with Equity Linked Saving
Scheme, 2005, notified by Ministry of Finance

SECTOR SPECIFIC FUNDS

Sectoral funds invest in a particular sector of the economy such as infrastructure, banking,
technology or pharmaceuticals etc.
– Since these funds focus on just one sector of the economy, they limit diversification, and
are thus riskier.
– Timing of investment into such funds are important, because the performance of the
sectors tend to be cyclical.
Examples of Sector Specific Funds - Equity Mutual Funds with an investment objective to
invest in
o Pharma & Healthcare Sector
o Banking & Finance Sector:
o FMCG (fast moving consumer goods) and related sectors.
o Technology and related sectors

THEMATIC FUNDS
Thematic funds select stocks of companies in industries that belong to a particular theme -
For example, Infrastructure, Service industries, PSUs or MNCs. They are more diversified
than Sectoral Funds and hence have lower risk than Sectoral funds.

VALUE FUNDS (STRATEGY AND STYLE BASED FUNDS)

 Equity funds may be categorized based on the valuation parameters adopted in
stock selection, such as
Growth funds identify momentum stocks that are expected to perform better than
the market
 Value funds identify stocks that are currently undervalued but are expected to
perform well over time as the value is unlocked.
 Equity funds may hold a concentrated portfolio to benefit from stock selection.
These funds will have a higher risk since the effect of a wrong selection can
be substantial on the portfolio’s return

CONTRA FUNDS
 Contra funds are equity mutual funds that take a contrarian view on the market.
 Underperforming stocks and sectors are picked at low price points with a view that
they will perform in the long run.
 The portfolios of contra funds have defensive and beaten down stocks that have given
negative returns during bear markets.
 These funds carry the risk of getting calls wrong as catching a trend before the herd is
not possible in every market cycle and these funds typically underperform in a bull
market.
 As per the SEBI guidelines on Scheme categorisation of mutual funds, a fund house
can either offer a Contra Fund or a Value Fund, not both.

EQUITY LINKED SAVINGS SCHEME (ELSS)

ELSS invests at least 80% in stocks in accordance with Equity Linked Saving Scheme,
2005, notified by Ministry of Finance.
 Has lock-in period of 3 years (which is shortest amongst all other tax saving options)
 Currently eligible for deduction under Sec 80C of the Income Tax Act upto ₹1,50,000

DEBT SCHEMES
 A debt fund (also known as income fund) is a fund that invests primarily in bonds
or other debt securities.
 Debt funds invest in short and long-term securities issued by government,
public financial institutions, companies
o Treasury bills, Government Securities, Debentures, Commercial paper,
Certificates of Deposit and others

 Debt funds can be categorized based on the tenor of the securities held in the
portfolio and/or on the basis of the issuers of the securities or their fund management
strategies, such as
o Short-term funds, Medium-term funds, Long-term funds
o Gilt fund, Treasury fund, Corporate bond fund, Infrastructure debt fund
 Floating rate funds, Dynamic Bond funds, Fixed Maturity Plans
 Debt funds have potential for income generation and capital preservation.
Debt Fund Categories as per SEBI guidelines on Categorization and Rationalization
of schemes
Overnight Fund Overnight securities having maturity of 1
day
Liquid Fund Debt and money market securities with
maturity of upto 91 days only
Ultra Short Duration Fund Debt & Money Market instruments with
Macaulay duration of the portfolio between
3 months - 6 months
Low Duration Fund Investment in Debt & Money Market
instruments with Macaulay duration
portfolio between 6 months- 12 months
Money Market Fund Investment in Money Market instruments
having maturity upto 1 Year
Short Duration Fund Investment in Debt & Money Market
instruments with Macaulay duration of the
portfolio between 1 year - 3 years
Medium Duration Fund Investment in Debt & Money Market
instruments with Macaulay duration of
portfolio between 3 years - 4 years
Medium to Long Duration Fund Investment in Debt & Money Market
instruments with Macaulay duration of the
portfolio between 4 - 7 years
Long Duration Fund Investment in Debt & Money Market
Instruments with Macaulay duration of the
portfolio greater than 7 years
Dynamic Bond Investment across duration
Corporate Bond Fund Minimum 80% investment in corporate
bonds only in AA+ and above rated
corporate bonds
Credit Risk Fund Minimum 65% investment in corporate
bonds, only in AA and below rated
corporate bonds
Banking and PSU Fund Minimum 80% in Debt instruments of
banks, Public Sector Undertakings, Public
Financial Institutions and Municipal Bonds
Gilt Fund Minimum 80% in G-secs, across maturity
Gilt Fund with 10 year constant Duration Minimum 80% in G-secs, such that the
Macaulay duration of the portfolio is equal
to 10 years
Floater Fund Minimum 65% in floating rate instruments
(including fixed rate instruments converted
to floating rate exposures using swaps/
derivatives)

Dynamic Bond funds alter the tenor of the securities in the portfolio in line with
expectation on interest rates. The tenor is increased if interest rates are expected to go down
and vice versa.
 Floating rate funds invest in bonds whose interest are reset periodically so that the fund earns
coupon income that is in line with current rates in the market, and eliminates interest rate risk
to a large extent

SHORT TERM DEBT FUNDS

The primary focus of short-term debt funds is coupon income. Short term debt funds have to
also be evaluated for the credit risk they may take to earn higher coupon income. The tenor
of the securities will define the return and risk of the fund.

o Funds holding securities with lower tenors have lower risk and lower return.

 Liquid funds invest in securities with not more than 91 days to maturity.
 Ultra Short-Term Debt Funds hold a portfolio with a slightly higher tenor to earn
higher coupon income.
Short-Term Fund combine coupon income earned from a pre-dominantly short-term debt
portfolio with some exposure to longer term securities to benefit from appreciation in price.

Fixed Maturity Plans (FMPs)

– FMPs are closed-ended funds which eliminate interest rate risk and lock-in a yield
by investing only in securities whose maturity matches the maturity of the fund.

– FMPs create an investment portfolio whose maturity profile match that of the FMP
tenor.

– Potential to provide better returns than liquid funds and Ultra Short Term Funds
since investments are locked in

– Low mark to market risk as investments are liquidated at maturity.

– Investors commit money for a fixed period.

– Investors cannot prematurely redeem the units from the fund

– FMPs, being closed-end schemes are mandatorily listed - investors can buy or sell units
of FMPs only on the stock exchange after the NFO.

– Only Units held in dematerialized mode can be traded; therefore investors seeking
liquidity in such schemes need to have a demat account.

Capital Protection Oriented Funds

Capital Protection Oriented Funds are close-ended hybrid funds that create a portfolio of
debt instruments and equity derivatives

– The portfolio is structured to provide capital protection and is rated by a credit rating
agency on its ability to do so. The rating is reviewed every quarter.

– The debt component of the portfolio has to be invested in instruments with the highest
investment grade rating.

– A portion of the amount brought in by the investors is invested in debt instruments that is
expected to mature to the par value of the capital invested by investors into the fund. The
capital is thus protected.

– The remaining portion of the funds is used to invest in equity derivatives to generate higher
returns

HYBRID FUNDS
Hybrid funds Invest in a mix of equities and debt securities.
SEBI has classified Hybrid funds into 7 sub-categories as follows:
Conservative Hybrid Fund 10% to 25% investment in equity &
equity related instruments; and
75% to 90% in Debt instruments
Balanced Hybrid Fund 40% to 60% investment in equity & equity
related instruments; and
40% to 60% in Debt instruments
Aggressive Hybrid Fund 65% to 80% investment in equity & equity
related instruments; and
20% to 35% in Debt instruments
Dynamic Asset Allocation or Balanced Investment in equity/ debt that is managed
Advantage Fund dynamically (0% to 100% in equity &
equity related instruments; and

Solution-oriented & Other funds

Retirement Fund Lock-in for at least 5 years or till
retirement age whichever is earlier
Children’s Fund Lock-in for at least 5 years or till the child
attains age of majority whichever is earlier
Index Funds/ ETFs Minimum 95% investment in securities of a
particular index
Fund of Funds (Overseas/ Domestic) Minimum 95% investment in the underlying
fund(s)

Hybrid funds
Invest in a mix of equities and debt securities. They seek to find a ‘balance’ between growth
and income by investing in both equity and debt.

– The regular income earned from the debt instruments provide greater stability to the returns
from such funds.

– The proportion of equity and debt that will be held in the portfolio is indicated in the
Scheme Information Document

– Equity oriented hybrid funds (Aggressive Hybrid Funds) are ideal for investors looking for
growth in their investment with some stability.

– Debt-oriented hybrid funds (Conservative Hybrid Fund) are suitable for conservative
investors looking for a boost in returns with a small exposure to equity.

– The risk and return of the fund will depend upon the equity exposure taken by the portfolio
- Higher the allocation to equity, greater is the risk

Multi Asset Funds

 A multi-asset fund offers exposure to a broad number of asset classes, often offering
a level of diversification typically associated with institutional investing.
 Multi-asset funds may invest in a number of traditional equity and fixed
income strategies, index-tracking funds, financial derivatives as well as commodity
like gold.
 This diversity allows portfolio managers to potentially balance risk with reward
and deliver steady, long-term returns for investors, particularly in volatile markets.

Arbitrage Funds
“Arbitrage” is the simultaneous purchase and sale of an asset to take advantage of the price
differential in the two markets and profit from price difference of the asset on different
markets or in different forms.
– Arbitrage fund buys a stock in the cash market and simultaneously sells it in the Futures
market at a higher price to generate returns from the difference in the price of the security in
the two markets.
– The fund takes equal but opposite positions in both the markets, thereby locking in the
difference.
– The positions have to be held until expiry of the derivative cycle and both positions need to
be closed at the same price to realize the difference.
– The cash market price converges with the Futures market price at the end of the contract
period. Thus it delivers risk-free profit for the investor/trader.
– Price movements do not affect initial price differential because the profit in one market is
set-off by the loss in the other market.
– Since mutual funds invest own funds, the difference is fully the return.
Hence, Arbitrage funds are considered to be a good choice for cautious investors who want
to benefit from a volatile market without taking on too much risk.

INDEX FUNDS
Index funds create a portfolio that mirrors a market index.

– The securities included in the portfolio and their weights are the same as that in the index
– The fund manager does not rebalance the portfolio based on their view of the market or sector
– Index funds are passively managed, which means that the fund manager makes only minor,
periodic adjustments to keep the fund in line with its index. Hence, Index fund offers the
same return and risk represented by the index it tracks.
– The fees that an index fund can charge is capped at 1.5%
Investors have the comfort of knowing the stocks that will form part of the portfolio, since
the composition of the index is known.

EXCHANGE TRADED FUNDS (ETFs)

 An ETF is a marketable security that tracks an index, a commodity, bonds, or a
basket of assets like an index fund.
 ETFs are listed on stock exchanges.
 Unlike regular mutual funds, an ETF trades like a common stock on a stock
exchange. The traded price of an ETF changes throughout the day like any other
stock, as it is bought and sold on the stock exchange.
 ETF Units are compulsorily held in Demat mode
 ETFs are passively managed, which means that the fund manager makes only
minor, periodic adjustments to keep the fund in line with its index
 Because an ETF tracks an index without trying to outperform it, it incurs
lower administrative costs than actively managed portfolios.
 Rather than investing in an ‘active’ fund managed by a fund manager, when one
buy units of an ETF one is harnessing the power of the market itself.
 Suitable for investors seeking returns similar to index and liquidity similar to stocks
 Fund of Funds (FoF)
 Fund of funds are mutual fund schemes that invest in the units of other schemes of
the same mutual fund or other mutual funds.
 The schemes selected for investment will be based on the investment objective of
the FoF
The FoF have two levels of expenses: that of the scheme whose units the FoF invests in and
the expense of the FoF itself. Regulations limit the total expenses that can be charged across
both levels as follows:
– TER in respect of FoF investing liquid schemes, index funds & ETFs has been capped @ 1%
– TER of FoF investing in equity-oriented schemes has been capped @ 2.25%
– TER of FoF investing in other schemes than mentioned above has been capped @2%.

WHAT is NAV?
NAV stands for Net Asset Value. The performance of a mutual fund scheme is denoted by its
NAV per unit.
NAV per unit is the market value of securities of a scheme divided by the total number of
units of the scheme on a given date. For example, if the market value of securities of a
mutual fund scheme is ₹200 lakh and the mutual fund has issued 10 lakh units of ₹ 10 each
to the investors, then the NAV per unit of the fund is ₹ 20 (i.e., ₹200 lakh/10 lakh).
Since market value of securities changes every day, NAV of a scheme also varies on day-to-
day basis.
NAVs of mutual fund schemes are published on respective mutual funds’ websites as well as
AMFI’s website daily.

Unlike stocks, where the price is driven by the stock market and changes from minute-to-
minute, NAVs of mutual fund schemes are declared at the end of each trading day after
markets are closed, in accordance with SEBI Mutual Fund Regulations. Further, Units of
mutual fund schemes under all scheme (except Liquid & Overnight funds) are allotted only
at prospective NAV, i.e., the NAV that would be declared at the end of the day, based on the
closing market value of the securities held in the respective schemes.
A mutual fund may accept applications even after the cut-off time, but you will get the NAV
of the next business day. Further, the cut-off time rules apply for redemptions too.
Liquid Funds/Overnight Funds All Other Schemes*
Subscription  Where the application is  Where the application is
received up to 1.30 p.m. on a received up to 3:00 p.m.
day and the funds are available and funds are available
for utilization before 1.30 p.m. for utilization before 3:00
without availing any credit p.m., the closing NAV of
facility, the closing NAV of the the day on which the
day immediately preceding the application is received.
day of receipt of application.  Where the application is
 Where the application is received after 3:00 p.m.
received after 1.30 p.m. on a day and the funds are
available
 and funds are available for
utilization on the same day
without availing any credit
facility, the closing NAV of the
day immediately preceding the
next business day; and
 Irrespective of the time of
receipt of application (before or
after
1.30 p.m. on a day), where the
funds are not available for
utilization before 1.30 p.m.
without availing any credit
facility, the closing NAV of the
day immediately preceding the
day on which the funds are
available for utilization.
Redemption  Where the application is
received up to 3.00 pm
 – the closing NAV of day
immediately preceding the next
business day; and
 Where the application is
received after 3.00 pm
 – the closing NAV of the next
business day.
for utilization, closing
NAV of the next business
day.
 Irrespective of the time of
receipt of application
(before or after 3:00
p.m.), where the funds are
not available for
utilization, the closing
NAV of the day on which
the funds are available for
utilization before cut-off
time of 3.00 p.m.
 Where the application is
received up to 3.00 pm –
closing NAV of the day
on which the application
is received; and
 Where the application is
received after 3.00 pm –
closing NAV of the next
business day.

WHAT IS SALE AND REPURCHASE PRICE?

Sale Price
Sale Price is the price payable per unit by an investor for purchase of units (subscription)
and/or switch-in from other schemes of a mutual fund.
SEBI vide circular no. SEBI / IMD / CIR No. 4 / 168230 / 09 dated June 30, 2009 has
abolished Entry Load for all mutual fund schemes.
Hence, during the New Fund Offer (NFO), the Sale Price per unit is at Face Value per unit
specified in the respective Scheme Information Document (SID) and Key Information
Memorandum (KIM)
During the ‘Ongoing Offer’ period (i.e., the date from which the scheme re-opens for
subscriptions/redemptions after the closure of the NFO period.), the units may be purchased
at NAV i.e., the Sale Price per unit is equivalent to applicable NAV on the date of
subscription.

Repurchase/Redemption Price
The Repurchase/Redemption Price is the price per Unit at which a Mutual Fund would
‘repurchase’ the units (i.e., buys back units from the investor) upon redemption of units
or
switch-outs of units to other schemes/plans of the Mutual Fund by the investors, and
includes Exit Load, if / wherever applicable.
Redemption price is calculated as follows:
Redemption Price = Applicable NAV*(1- Exit Load, if any) For Example: If the
Applicable NAV is ₹10 and Exit Load is 2%, then the Redemption Price will be = ₹10* (1-
0.02) = ₹9.80 It may be noted that an AMC / Trustee has the right to modify existing Exit
Load structure and/or to introduce Exit Loads subject to a maximum limit prescribed under
the Regulations.

Any change in Load structure will be effective on prospective basis and will not affect the
existing mutual fund units in any manner.
As per SEBI (Mutual Funds) Regulations, 1996, in respect of Open-Ended Schemes,
Repurchase Price (commonly referred to as Redemption price) shall not be lower than 95%
of NAV.
It may be noted that units of Closed Ended Schemes cannot be Repurchased prematurely.

DEBT SCHEMES
1. IDFC Government Securities Fund Constant Maturity Plan
IDFC Government Securities Fund Constant Maturity Direct-Growth is a Gilt with 10 year
Constant Duration mutual fund scheme from Idfc Mutual Fund. This fund has been in
existence for 9 yrs 4 m, having been launched on 01/01/2013. IDFC Government Securities
Fund Constant Maturity Direct-Growth has ₹214 Crores worth of assets under management
(AUM) as on 31/03/2022 and is medium-sized fund of its category. The fund has an expense
ratio of 0.48%, which is higher than what most other Gilt With 10 Year Constant Duration
funds charge.
IDFC Government Securities Fund Constant Maturity Direct-Growth returns of last 1-year are
-1.49%. Since launch, it has delivered 9.15% average annual returns. The fund has doubled
the money invested in it every 9 yrs.

INVESTMENT OBJECTIVES
The scheme seeks to generate optimal returns with high liquidity by investing in Government
securities such that weighted average portfolio maturity of around 10 years.
FUND MANAGER- Mr. Harshal Joshi
RETURNS SINCE INCEPTION

The IDFC Government Securities Fund Constant Maturity Plan is a 9 yrs 4 m old fund
and has delivered average annual returns of 9.15% since inception.
IDFC Government Securities Fund Constant Maturity Plan Returns
 1-Year 3-Year 5-Year Since Inception

-1.59% 6.77% 8.14% 9.15%

The NAV of IDFC Government Securities Fund Constant Maturity Plan is

35.81. AUM (Fund Size) ₹ 214 Crs
Min. Investment: SIP ₹1000 & Lumpsum ₹5000

2. Edelweiss Liquid Direct-Growth

It is a Liquid mutual fund scheme from Edelweiss Mutual Fund. This fund has been
in existence for 9 yrs 4 m, having been launched on 01/01/2013. Edelweiss Liquid
Direct- Growth has ₹1,128 Crores worth of assets under management (AUM) as on
31/03/2022 and is medium-sized fund of its category. The fund has an expense ratio
of 0.13%, which is close to what most other Liquid funds charge.
Edelweiss Liquid Direct-Growth returns of last 1-year are 3.52%. Since launch, it has
delivered 6.79% average annual returns.
INVESTMENT OBJECTIVE
The Scheme aims to provide reasonable returns, commensurate with low risk while
providing a high level of liquidity, through a portfolio of money market and debt securities.

FUND MANAGER
1. Mr. Rahul Dedhia
2. Ms. Pranavi Kulkarni

RETURNS SINCE INCEPTION

The Edelweiss Liquid Fund is a 9 yrs 4 m old fund and has delivered average
annual returns of 6.79% since inception.
Edelweiss Liquid Fund Returns

1-Year 3-Year 5-Year Since Inception

3.51% 4.35% 5.52% 6.79%

The NAV of Edelweiss Liquid Fund is 2,761.

The AUM of Edelweiss Liquid Fund is ₹1,128
Crs. Min. Investment: SIP ₹300 & Lumpsum
₹5000
 3. Nippon India Money Market Fund Direct-Growth
It is a Money Market mutual fund scheme from Nippon India Mutual Fund. This fund
has been in existence for 9 yrs 4 m, having been launched on 01/01/2013. Nippon
India Money Market Fund Direct-Growth has ₹11,265 Crores worth of assets under
management (AUM) as on 31/03/2022 and is medium-sized fund of its category. The
fund has an expense ratio of 0.18%, which is close to what most other Money Market
funds charge.
Nippon India Money Market Fund Direct-Growth returns of last 1-year are 3.80%.
Since launch, it has delivered 7.32% average annual returns.

INVESTMENT OBJECTIVE
The Scheme seeks to generate optimal returns consistent with moderate levels of risk and
liquidity by investing in money market instruments.

FUND MANAGER
Ms. Anju Chhajer

RETURNS SINCE INCEPTION

The Nippon India Money Market Fund is a 9 yrs 4 m old fund and has delivered average
annual returns of 7.32% since inception.
Nippon India Money Market Fund Returns

1-Year 3-Year 5-Year Since Inception

3.79% 5.35% 6.31% 7.32%

The NAV of Nippon India Money Market Fund is 3,361.81.

The AUM of Nippon India Money Market Fund is ₹11,265
Crs. Min. Investment: SIP ₹500 & Lumpsum ₹500

4. SBI Savings Fund

SBI Savings Fund Direct-Growth is a Money Market mutual fund scheme from Sbi Mutual
Fund. This fund has been in existence for 9 yrs 4 m, having been launched on 01/01/2013.
SBI Savings Fund Direct-Growth has ₹23,656 Crores worth of assets under management
(AUM) as on 31/03/2022 and is medium-sized fund of its category. The fund has an expense
ratio of 0.23%, which is close to what most other Money Market funds charge.
SBI Savings Fund Direct-Growth returns of last 1-year are 3.63%. Since launch, it has
delivered 7.63% average annual returns.

INVESTMENT OBJECTIVE
The scheme seeks to provide the investors an opportunity to invest in money market
instruments.

RETURNS SINCE INCEPTION

The SBI Savings Fund is a 9 yrs 4 m old fund and has delivered average annual
returns of 7.62% since inception.
SBI Savings Fund Returns

1-Year 3-Year 5-Year Since Inception

3.62% 5.43% 6.33% 7.62%

The NAV of SBI Savings Fund is 35.65.

The AUM of SBI Savings Fund is ₹23,656
Crs. Min. Investment: SIP ₹500 & Lumpsum
₹500

5. Kotak Money Market Fund

Kotak Money Market Fund Direct-Growth is a Money Market mutual fund scheme from
Kotak Mahindra Mutual Fund. This fund has been in existence for 9 yrs 4 m, having been
launched on 01/01/2013. Kotak Money Market Fund Direct-Growth has ₹15,402 Crores
worth of assets under management (AUM) as on 31/03/2022 and is medium-sized fund of its
category. The fund has an expense ratio of 0.26%, which is close to what most other Money
Market funds charge.
Kotak Money Market Fund Direct-Growth returns of last 1-year are 3.72%. Since launch, it
has delivered 7.25% average annual returns.

INVESTMENT OBJECTIVE
The Scheme seeks to generate returns by investing in money market instruments having
maturity upto 1 year.
RETURNS SINCE INCEPTION

The Kotak Money Market Fund is a 9 yrs 4 m old fund and has delivered average
annual returns of 7.24% since inception.
Kotak Money Market Fund Returns

1-Year 3-Year 5-Year Since Inception

3.71% 5.16% 6.15% 7.24%

The NAV of Kotak Money Market Fund is 3,632.84.

The AUM of Kotak Money Market Fund is ₹15,402
Crs. Min. Investment: Lumpsum ₹5000

EQUITY SCHEMES

QUANT TAX PLAN DIRECT GROWTH

It is a ELSS mutual fund scheme from Quant Mutual Fund. This fund has been in existence
for 9 yrs 4 m, having been launched on 01/01/2013. Quant Tax Plan Direct-Growth has
₹1,316 Crores worth of assets under management (AUM) as on 31/03/2022 and is small
fund of its category. The fund has an expense ratio of 0.57%, which is less than what most
other Elss funds charge.
Quant Tax Plan Direct-Growth returns of last 1-year are 18.84%. Since launch, it has
delivered 20.87% average annual returns. The fund has doubled the money invested in it
every 2 yrs.
 Quant Tax Plan Direct-Growth scheme's ability to deliver returns consistently is
higher than most funds of its category. Its ability to control losses in a falling market
is high.
 The fund has the majority of its money invested in Services, Financial, Healthcare,
Consumer Staples, Construction sectors. It has taken less exposure in Services,
Financial sectors compared to other funds in the category.
 The fund's top 5 holdings are in Adani Enterprises Ltd., Vedanta Ltd., Ruchi Soya
Inds. Ltd., Adani Ports and Special Economic Zone Ltd., State Bank of India.

INVESTMENT OBJECTIVE
The scheme aims to generate capital appreciation by investing predominantly in equity
shares with growth potential. The secondary objective is to give dividend and other income.

FUND MANAGER
Ankit A Pande
Mr. Pande has done CFA and MBA
Prior to joining Quant Mutual Fund he has worked with Infosys Finacle. Began his career
in equity research in 2011.

RETURNS SINCE INCEPTION

The Quant Tax Plan is a 9 years 4 m old fund and has delivered average annual returns
of 20.86% since inception.

Quant Tax Plan Returns

1-Year 3-Year 5-Year Since Inception

18.17% 33.81% 23.34% 20.86%

NAV or Net Asset Value is the per-unit price of the Mutual Fund. The NAV of a Mutual
Fund changes every day. It is calculated by taking the current value of the holdings of the
fund at end of the day, subtracting the expenses, and dividing the value by the number of
units issued to date. The NAV of Quant Tax Plan is 231.58.
AUM or Asset Under Management is the total value of the assets held by a Mutual Fund
scheme. For instance, for an equity Mutual Fund, the AUM will be the total value of its
portfolio's equity shares (plus any other asset it might have invested in). The AUM of the
fund changes every day because the price of the underlying asset fluctuates daily. However,
the Mutual Fund company doesn't update it every day. It is updated only at the end of the
month and released within few days of the next month.
The AUM of the fund is a good indicator of its popularity. A fund with a high AUM means a
lot of money has been invested in it, and investors like it. However, the AUM should never
be the primary criteria while selecting a fund. There are funds with huge AUMs that continue
to perform well despite their size.
The AUM of Quant Tax Plan is ₹1,316 Crs.

QUANT MID CAP FUND

Quant Mid Cap Fund Direct-Growth is a Mid Cap mutual fund scheme from Quant Mutual
Fund. This fund has been in existence for 9 yrs 4 m, having been launched on 01/01/2013.
Quant Mid Cap Fund Direct-Growth has ₹460 Crores worth of assets under management
(AUM) as on 31/03/2022 and is small fund of its category. The fund has an expense ratio of
0.57%, which is less than what most other Mid Cap funds charge.
Quant Mid Cap Fund Direct-Growth returns of last 1-year are 21.02%. Since launch, it has
delivered 16.34% average annual returns. The fund has doubled the money invested in it
every 2 yrs.
 Quant Mid Cap Fund Direct-Growth scheme's ability to deliver returns consistently is
higher than most funds of its category. Its ability to control losses in a falling market
is high.
INVESTMENT OBJECTIVE
The scheme aims at providing long term capital appreciation and generating income with a
diversified portfolio of Mid Cap companies.

FUND MANAGER
Ankit A Pande
Mr. Pande has done CFA and MBA
Prior to joining Quant Mutual Fund he has worked with Infosys Finacle. Began his career in
equity research in 2011.

RETURNS SINCE INCEPTION

The Quant Mid Cap Fund is a 9 yrs 4 m old fund and has delivered average annual
returns of 16.34% since inception.
Quant Mid Cap Fund Returns

1-Year 3-Year 5-Year Since Inception

20.25% 31.21% 20.82% 16.34%

The NAV of Quant Mid Cap Fund is 126.55.

The AUM of Quant Mid Cap Fund is ₹460 Crs.

DSP SMALL CAP FUND

DSP Small Cap Direct Plan-Growth is a Small Cap mutual fund scheme from Dsp Mutual
Fund. This fund has been in existence for 9 yrs 4 m, having been launched on 01/01/2013.
DSP Small Cap Direct Plan-Growth has ₹8,849 Crores worth of assets under management
(AUM) as on 31/03/2022 and is medium-sized fund of its category. The fund has an expense
ratio of 0.97%, which is higher than what most other Small Cap funds charge.
DSP Small Cap Direct Plan-Growth returns of last 1-year are 20.64%. Since launch, it has
delivered 21.81% average annual returns. The fund has doubled the money invested in it
every 2 yrs.
 DSP Small Cap Direct Plan-Growth scheme's ability to deliver returns consistently is
in-line with most funds of its category. Its ability to control losses in a falling market
is average.
 The fund has the majority of its money invested in Materials, Chemicals,
Automobile, Services, Textiles sectors. It has taken less exposure in Materials,
Chemicals sectors compared to other funds in the category.
 The fund's top 5 holdings are in Chambal Fertilisers & Chemicals Ltd., GHCL Ltd.,
Suprajit Engineering Ltd., TI Financial Holdings Ltd., Atul Ltd.
FUND MANAGER
Resham Jain
Mr. Jain is a B. Com, MS, FRM, CFP & CFA (US).
Prior to joining DSP Mutual Fund, he has worked with B&K Securities (I)
Private Limited, Jaihind Projects Ltd, Arvind Ltd, Anagram Knowledge Academy
Ltd.

RETURNS SINCE INCEPTION

The DSP Small Cap Fund is a 9 yrs 4 m old fund and has delivered average annual
returns of 21.8% since inception.
DSP Small Cap Fund Returns

1-Year 3-Year 5-Year Since Inception

19.76% 24.93% 13.58% 21.8%

The NAV of DSP Small Cap Fund is 112.85.
The AUM of DSP Small Cap Fund is ₹8,849 Crs.

KOTAK SMALL CAP FUND

Kotak Small Cap Fund Direct-Growth is a Small Cap mutual fund scheme from Kotak
Mahindra Mutual Fund. This fund has been in existence for 9 yrs 4 m, having been launched
on 01/01/2013. Kotak Small Cap Fund Direct-Growth has ₹7,385 Crores worth of assets
under management (AUM) as on 31/03/2022 and is medium-sized fund of its category. The
fund has an expense ratio of 0.49%, which is less than what most other Small Cap funds
charge.
 Kotak Small Cap Fund Direct-Growth returns of last 1-year are 19.32%. Since
launch, it has delivered 20.23% average annual returns. The fund has doubled the
money invested in it every 2 yrs.

RETURNS SINCE INCEPTION

The Kotak Small Cap Fund is a 9 yrs 4 m old fund and has delivered average annual returns
of 20.22% since inception.
 Kotak Small Cap Fund Returns

1-Year 3-Year 5-Year Since Inception

18.0% 30.88% 18.51% 20.22%

The NAV of Kotak Small Cap Fund is 172.16.

The AUM of Kotak Small Cap Fund is ₹7,385 Crs.

AXIS SMALL CAP FUND

Axis Small Cap Fund Direct-Growth is a Small Cap mutual fund scheme from Axis Mutual
Fund. This fund has been in existence for 8 yrs 6 m, having been launched on 11/11/2013.
Axis Small Cap Fund Direct-Growth has ₹9,261 Crores worth of assets under management
(AUM) as on 31/03/2022 and is medium-sized fund of its category. The fund has an expense
ratio of 0.46%, which is less than what most other Small Cap funds charge.
Axis Small Cap Fund Direct-Growth returns of last 1-year are 18.87%. Since launch, it has
delivered 24.38% average annual returns. The fund has doubled the money invested in it
every 2 yrs.
 Axis Small Cap Fund Direct-Growth scheme's ability to deliver returns consistently is
in-line with most funds of its category. Its ability to control losses in a falling market
is average.
 The fund has the majority of its money invested in Chemicals, Technology,
Construction, Healthcare, Capital Goods sectors. It has taken less exposure in
Chemicals, Technology sectors compared to other funds in the category.
 The fund's top 5 holdings are in Galaxy Surfactants Ltd., Narayana Hrudayalaya Ltd.,
Brigade Enterprises Ltd., Fine Organic Industries Ltd., KPIT Technologies Ltd.

FUND MANAGER
Mr. Anupam Tiwari is a Chartered Accountant.
Prior to joining Axis Mutual Fund he was associated with Principal Mutual Fund (July
25, 2011-Sep 21, 2016), Reliance Life Insurance Ltd. (Sep 22, 2010-Jul 15, 2011) and
Reliance
MF (Mar 21, 2005-Sep 21, 2010).

RETURNS SINCE INCEPTION

The Axis Small Cap Fund is an 8 yrs 6 m old fund and has delivered average annual
returns of 24.4% since inception.
Axis Small Cap Fund Returns

1-Year 3-Year 5-Year Since Inception

17.93% 28.04% 20.76% 24.4%

The NAV of Axis Small Cap Fund is 63.68.

The AUM of Axis Small Cap Fund is ₹9,261 Crs.

HYBRID SCHEMES
 1. Quant Absolute Fund Direct-Growth
It is an Aggressive Hybrid mutual fund scheme from Quant Mutual Fund. This fund
has been in existence for 9 yrs 4 m, having been launched on 01/01/2013. Quant
Absolute Fund Direct-Growth has ₹342 Crores worth of assets under management
(AUM) as on 31/03/2022 and is small fund of its category. The fund has an expense
ratio of 0.56%, which is less than what most other Aggressive Hybrid funds charge.
Currently, the fund has a 78.81% allocation to equity and 18.50% to Debt.
Quant Absolute Fund Direct-Growth returns of last 1-year are 15.81%. Since launch,
it has delivered 17.31% average annual returns. The fund has doubled the money
invested in it every 2 yrs.

FUND MANAGER
Ankit A Pande
Mr. Pande has done CFA and MBA
Prior to joining Quant Mutual Fund he has worked with Infosys Finacle. Began his career
in equity research in 2011.

RETURNS SINCE INCEPTION

The Quant Absolute Fund is a 9 yrs 4 m old fund and has delivered average annual
returns of 17.3% since inception.
Quant Absolute Fund Returns

1-Year 3-Year 5-Year Since Inception

15.67% 26.14% 19.67% 17.3%

The NAV of Quant Absolute Fund is 283.8.

The AUM of Quant Absolute Fund is ₹342
Crs.

2. About ICICI Prudential Equity & Debt Fund

ICICI Prudential Equity & Debt Fund Direct-Growth is an Aggressive Hybrid mutual
fund scheme from ICICI Prudential Mutual Fund. This fund has been in existence for
9 yrs 4 m, having been launched on 01/01/2013. ICICI Prudential Equity & Debt
Fund Direct-Growth has ₹19,331 Crores worth of assets under management (AUM)
as on 31/03/2022 and is medium-sized fund of its category. The fund has an expense
ratio of 1.25%, which is higher than what most other Aggressive Hybrid funds
charge. Currently, the fund has a 68.66% allocation to equity and 21.33% to Debt.
ICICI Prudential Equity & Debt Fund Direct-Growth returns of last 1-year are
20.48%. Since launch, it has delivered 16.48% average annual returns. The fund has
doubled the money invested in it every 3 yrs.

INVESTMENT OBJECTIVE
The scheme seeks to generate long-term capital appreciation and current income by investing
in a portfolio that is investing in equities and related securities as well as fixed income and
money market securities. The approximate allocation to equity would be in the range of 60-80
per cent with a minimum of 51 per cent, and the approximate debt allocation is 40-49 per
cent, with a minimum of 20 per cent.

FUND MANAGER
Sankaran Naren
Mr. Naren is a B. Tech from IIT Chennai and MBA (Finance)from IIM Kolkata.
Prior to joining ICICI Prudential AMC he has worked with Refco Sify Securities India Pvt.
Ltd., HDFC Securities Ltd. and Yoha Securities.

Profile 2
Mittul Kalawadia
Mr. Kalawadia is a B.Com. from Mithibai College, M.Com. from University of Mumbai and
CA. from ICAI. He has been associated with ICICI Prudential since 2012.

RETURNS SINCE INCEPTION

The ICICI Prudential Equity & Debt Fund is a 9 yrs 4 m old fund and has delivered average
annual returns of 16.47% since inception.
ICICI Prudential Equity & Debt Fund Returns

1-Year 3-Year 5-Year Since Inception

20.23% 17.59% 14.39% 16.47%

The NAV of ICICI Prudential Equity & Debt Fund is 237.22.

The AUM of ICICI Prudential Equity & Debt Fund is ₹19,331 Crs.

3. About Tata Multi Asset Opportunities Fund

Tata Multi Asset Opportunities Fund Direct - Growth is a Multi Asset Allocation
mutual fund scheme from Tata Mutual Fund. This fund has been in existence for 2 yrs
3 m, having been launched on 14/02/2020. Tata Multi Asset Opportunities Fund
Direct
- Growth has ₹1,366 Crores worth of assets under management (AUM) as on
31/03/2022 and is medium-sized fund of its category. The fund has an expense ratio
of 0.46%, which is close to what most other Multi Asset Allocation funds charge.
Currently, the fund has a 54.99% allocation to equity and 10.41% to Debt.

RETURNS SINCE INCEPTION

The Tata Multi Asset Opportunities Fund is a 2 yrs 3 m old fund and has delivered average
annual returns of 24.63% since inception.
Tata Multi Asset Opportunities Fund Returns
 1-Year Since Inception

9.91% 24.63%

The NAV of Tata Multi Asset Opportunities Fund is 15.51.

The AUM of Tata Multi Asset Opportunities Fund is ₹1,366 Crs.

4. ICICI Prudential Multi Asset Fund Direct-Growth

It is a Multi Asset Allocation mutual fund scheme from ICICI Prudential Mutual
Fund. This fund has been in existence for 9 yrs 4 m, having been launched on
01/01/2013. ICICI Prudential Multi Asset Fund Direct-Growth has ₹13,315 Crores
worth of assets under management (AUM) as on 31/03/2022 and is medium-sized
fund of its category. The fund has an expense ratio of 1.17%, which is higher than
what most other Multi Asset Allocation funds charge. Currently, the fund has a
61.33% allocation to equity and 12.27% to Debt.
ICICI Prudential Multi Asset Fund Direct-Growth returns of last 1-year are 21.19%.
Since launch, it has delivered 15.63% average annual returns. The fund has doubled the
money invested in it every 3 yrs.

FUND MANAGER
Ihab Dalwai
Mr. Dalwai is a Chartered Accountant. He is associated with ICICI Prudential AMC
since April 2011.

RETURNS SINCE INCEPTION

The ICICI Prudential Multi Asset Fund is a 9 yrs 4 m old fund and has delivered
average annual returns of 15.62% since inception.
ICICI Prudential Multi Asset Fund Returns

1-Year 3-Year 5-Year Since Inception

20.8% 17.51% 14.16% 15.62%

The NAV of ICICI Prudential Multi Asset Fund is 459.6

The NAV of ICICI Prudential Multi Asset Fund for May 23, 2022 is 459.6

INDEX FUNDS AND ETFs SCHEMES

 1. L&T Nifty 50 Index Fund Direct - Growth
It is a Large Cap mutual fund scheme from L&t Mutual Fund. This fund has been in
existence for 2 yrs 2 m, having been launched on 24/03/2020. L&T Nifty 50 Index
Fund Direct - Growth has ₹94 Crores worth of assets under management (AUM) as
on 31/03/2022 and is medium-sized fund of its category. The fund has an expense
ratio of 0.25%, which is close to what most other Large Cap funds charge.

L&T Nifty 50 Index Fund Direct - Growth returns of last 1-year are 7.27%. Since launch,
it has delivered 33.30% average annual returns.

SCHEME NAME Returns NAV AUM Fund Manager

(%)
L&T Nifty 50 Index Fund Direct 31.04% 18.31 94 Cr Mr. Praveen
Ayathan

2. Mirae Asset Equity Allocator FoF Direct - Growth

It is a Large Cap mutual fund scheme from Mirae Asset Mutual Fund. This fund has
been in existence for 1 yrs 8 m, having been launched on 08/09/2020. Mirae Asset
Equity Allocator FoF Direct - Growth has ₹269 Crores worth of assets under
management (AUM) as on 31/03/2022 and is medium-sized fund of its category. The
fund has an expense ratio of 0.18%, which is less than what most other Large Cap
funds charge.

Mirae Asset Equity Allocator FoF Direct - Growth returns of last 1-year are 6.17%.
Since launch, it has delivered 25.50% average annual returns.

SCHEME NAME Returns (%) NAV AUM Fund Manager

Mirae Asset Equity Allocator FoF Direct 26.28% 14.62 269 Cr Ms. Bharti Sawant

3. Motilal Oswal Nifty Midcap 150 Index Fund Direct - Growth

It is a Mid Cap mutual fund scheme from Motilal Oswal Mutual Fund. This fund has
been in existence for 2 yrs 9 m, having been launched on 19/08/2019. Motilal Oswal
Nifty Midcap 150 Index Fund Direct - Growth has ₹551 Crores worth of assets under
management (AUM) as on 31/03/2022 and is medium-sized fund of its category. The
fund has an expense ratio of 0.21%, which is less than what most other Mid Cap
funds charge.

Motilal Oswal Nifty Midcap 150 Index Fund Direct - Growth returns of last 1-year are
8.15%. Since launch, it has delivered 25.24% average annual returns. The fund has doubled
the money invested in it every 2 yrs.

SCHEME NAME Returns (%) NAV AUM Fund Manager

 Motilal Oswal Nifty Midcap 150 Index 25.24% 18.43 551 Cr Mr. Swapnil P
Fund Direct Mayekar

4. ICICI Pru IT ETF

The investment objective of the scheme is to provide returns before expenses that closely
correspond to the total return of the underlying index subject to tracking errors. However,
there can be no assurance or guarantee that the investment objective of the Scheme would be
achieved.
SCHEME NAME Returns (%) NAV AUM Fund Manager
ICICI Pru IT ETF 30.4% 291.66 2343.56 Mr. Kayzad
Cr Eghlim

5. UTI Nifty Next 50 Exchange Traded Fund or UTI Nifty Next 50 ETF
It is an open-ended ETF scheme replicating/tracking the Nifty Next 50 Index. The
scheme consists of next 50 Large Cap companies after companies in the Nifty 50
Index which together form a part of Nifty 100 Index. Thus, it effectively provides a
blend of large cap and mid cap segment both in terms of portfolio and performance.

SCHEME NAME Returns (%) NAV AUM Fund Manager

UTI Nifty Next 50 Exchange Traded 21.37% 39.71 631.52 Mr. Sharwan
Fund Cr Kumar Goyal

INSURANCE

WHAT IS INSURANCE
Insurance is a way to manage your risk. When you buy insurance, you purchase protection
against unexpected financial losses. The insurance company pays you or someone you
choose if something bad happens to you. If you have no insurance and an accident happens,
you may be responsible for all related costs. Having the right insurance for the risks you may
face can make a big difference in your life. An insurance policy is a written contract between
the policyholder (the person or company that gets the policy) and the insurer (the insurance
company). The policyholder is not necessarily the insured. An individual or company may
get an insurance policy (making them the policyholder) that protects another person or entity
(who is the insured). For example, when a company buys life insurance for an employee, the
employee is the insured, and the company is the policyholder.
GENERAL INSURANCE
A General insurance policy is a non-life insurance product that includes a range of general
insurance policies. Common forms of general insurance in India are automobiles, Mediclaim,
homeowner’s insurance, marine, travel, and others. The policy offers payment to the
policyholder based on the loss incurred from a specific financial event. General insurance is
insurance that is not categorized under life insurance.
Types of General Insurance Policies:
Motor Insurance
Motor insurance is one of those types of general insurance policies that cover all damages
and liability to a vehicle against various on-road and off-road emergencies. A comprehensive
policy even secures against damage caused by natural and man-made calamities, including
acts of terrorism.
Motor insurance offers protection to the vehicle owner against:
 Damage to the vehicle
 It also pays for any third-party liability determined by law against the owner of
the vehicle
Motor insurance is mandatory in India as per the Motor Vehicles Act, 1988, and needs to be
renewed every year. Driving a motor vehicle without insurance in a public place is a
punishable offense.
Third-party insurance is a statutory requirement in our country i.e., the owner of the vehicle
is legally liable for any injury or damage caused to a third-party life or property, by or arising
out of the use of the vehicle in a public place.
A comprehensive motor insurance policy would include a personal accident and liability
only policy (third party insurance) in addition to own damage cover (damage to the owner's
vehicle) in one policy.
Common motor insurance categories include:
 Car Insurance
 Two-Wheeler Insurance
 Commercial Vehicle Insurance
Some attractive benefits of motor insurance include roadside assistance, cashless servicing at
the nation-wide network of workshops and garages, personal accident cover, towing
assistance.

Health Insurance
Health care costs are increasing every year. A sedentary lifestyle and stress at work
negatively affect health and can result in a critical illness or medical emergency. Such a
scenario is sure to adversely affect one financially, due to the massive outlay of money on
medical expenditure. A health insurance policy is the only way to mitigate financial risks,
apart from leading a
healthy lifestyle. Health insurance guarantees peace of mind in times of crisis and helps
secure their health and that of one's family.
Health insurance covers the medical and surgical expenses of the insured individual due to
hospitalization from an illness. Additional riders enhance the benefits and scope of the cover.
Health insurance often includes cashless facility at impaneled hospitals, pre and post
hospitalization expenses, ambulance charges, daily cash allowance, etc.
Common types of health insurance policies include:
 Individual Policy
 Family Floater Policy
 Surgery Cover
 Comprehensive Health Insurance

Travel Insurance
International travel, whether on vacation or business, can turn into a nightmare if one
experiences contingencies like loss of baggage, loss of passport, delay in the flight, medical
emergency, etc. Such eventualities will surely take the fun away from traveling.
Travel insurance also referred to as visitor insurance, covers one against unseen medical and
non-medical emergencies during overseas travel, ensuring a worry-free travel experience. It
protects the insured against misfortunes while traveling. Backed up by travel insurance, the
whole experience is like no other.
Different types of travel insurance policies include:
 Individual Travel Policy
 Family Travel Policy
 Student Travel Insurance
 Senior Citizens Travel Policy
In addition to the above, some insurance companies offer special plans like a corporate travel
policy or comprehensive policy for travel to special destinations like Asia and/or Europe.

Home Insurance
Home is often the most treasured possession of an individual and also the largest financial
investments one makes in life. Safeguarding the physical structure and contents of the home
seems like a logical thing to do.
Home insurance protects the house and/or the contents in it, depending on the scope of
insurance policy opted for. It secures the home against natural calamities and man-made
disasters and threats. Home insurance protects against risks and damages from fire, burglary,
theft, flood, earthquakes, etc. covering the physical asset (building structure) and valuables
(contents) in it. Home insurance ensures that one's hard-earned savings are utilized to meet
important needs instead of using them for rebuilding the house if some harm was to come to
it.
 PRODUCT NOTE

1. NCDs
Non-convertible debentures fall under the debt category. They cannot be converted
into equity or stocks. NCDs have a fixed maturity date and the interest can be paid
along with the principal amount either monthly, quarterly, or annually depending on
the fixed tenure specified. They benefit investors with their supreme returns,
liquidity, low risk and tax benefits when compared to that of convertible debentures.

Example of NCDs: You can invest when the company announces NCDs or purchase
after it trades on the secondary market. You must check the company’s credit rating,
issuer credibility and the coupon rate of the NCD. It would help if you purchase
NCDs of a higher rating such as AAA+ or AA+.

Types of NCDs
Following are the two kinds of non-convertible debentures:
 Secured NCDs:
Secured NCDs are considered safer of the two kinds as their issues are backed by the
assets of the company. In the event of the company failing to pay on time, then the
investors can recover their dues by liquidating the company’s assets. However, the
interest offered on NCDs is low.

 Unsecured NCDs:
Unsecured NCDs are much riskier than the secured NCDs as the assets of the
company do not back these. Hence, when the company defaults on its payment, the
investors have no choice but to wait until they receive payments as there are no assets
of the company to recover their dues. However, the interest rate offered on unsecured
NCDs is higher than that of secured NCDs.

2. NPS
National Pension Scheme: The National Pension Scheme, which truly focuses upon
the long-term retirement and is duly managed through the Pension Fund Regulatory
and Development Authority. Earlier the minimal yearly contribution towards an NPS
for a tier-1 account was Rs 6,000, which has been changed and currently is Rs 1,000
for the account to remain active. It is an amalgamation of liquid funds, corporate
bonds, government funds, fixed deposits, and others. On the premise of the risk
appetite, the investor can likely decide the amount of money that should be invested
in the NIP via NPS.
Benefits of NPS Account
 i) Low Cost:-
NPS is considered to be the world’s lowest cost pension scheme. Administrative
charges and fund management fee are also lowest.
ii) Simple:-
All applicant has to do is to open an account with any one of the POPs being run
through all Head Posts Offices across India and get a Permanent Retirement Account
Number(PRAN)
iii) Flexible:-
Applicant can choose his/her own investment option and Pension Fund or select Auto
choice to get better returns.
iv) Portable:-
Applicant can operate an account from anywhere in the country and can pay
contributions through any of the POP-SPs irrespective of the POP-SP branch with
whom the applicant is registered, even if he/she changes his/her city, job etc. and also
make contributionn through NPS. The account can be shifted to any other sector like
Government Sector, Corporate Model in case the subscriber gets the employment.

3. PMS
Portfolio Management Services account is an investment portfolio in Stocks, Debt,
and fixed income products managed by a professional money manager, that can
potentially be tailored to meet specific investment objectives. When you invest in
PMS, you own individual securities unlike a mutual fund investor, who owns units of
the entire fund. You have the freedom and flexibility to tailor your portfolio to
address personal preferences and financial goals. Although portfolio managers may
oversee hundreds of portfolios, your account may be unique. As per SEBI guidelines,
only those entities who are registered with SEBI for providing PMS services can
offer PMS to clients. There is no separate certification required for selling any PMS
product. So this is a case where mis-selling can happen. As per the SEBI guidelines,
the minimum investment required to open a PMS account is Rs. 5 Lacs. However,
different providers have different minimum balance requirements for different
products. For Eg Birla, AMC PMS is having min amount requirement of Rs. 50 lacs
for a product. Similarly, HSBC AMC is having a minimum requirement of 50 lacs for
their PMS and Reliance is having min requirement of Rs. 1 Crore. In India, Portfolio
Management Services are also provided by equity broking firms & wealth
management services.

Types of Portfolio Management Services

1. Discretionary PMS India
Where the investment is at the discretion of the fund manager & the client has
no intervention in the investment process.

2. Non-Discretionary PMS
 Under this service, the portfolio manager only suggests investment ideas. The choice,
as well as the timings of the investment decisions, rest solely with the investor.
However, the execution of the trade is done by the portfolio manager.
The client may give a negative list of stocks in a discretionary PMS at the time of
opening his account and the Fund Manager would ensure that those stocks are not
bought in his portfolio. The majority of PMS providers in India offer Discretionary
Services.

4. PPF
The Public Provident Fund is a post office savings scheme launched by the National
Savings Institute. However, some nationalised and private banks are authorised to
accept PPF investments. The government backs it. Hence returns are guaranteed. The
PPF Interest Rate for the current quarter is 7.1% (FY 2022-23). The interest payment
is made on 31st March every year. However, the interest is calculated monthly on the
minimum PPF balance between 5th and 30th of every month. Public Provident Fund
comes with a lock-in of 15 years. One can further extend the scheme in blocks of 5
years.
All Indian citizens can invest in Public Provident Fund. However, HUFs and NRI are
not eligible to open a PPF account.
PPF also allows investors to take a loan against their PPF investments. The loan
facility is available between the third and fifth year. One can avail a loan online on
the bank’s website.
Investors can only open one PPF account. Multiple PPF accounts are not allowed.
Investors can invest in a lump sum or 12 multiple instalments. The minimum
investment is INR 500, and the maximum is INR 1,50,000. However, some banks
allow investors to open a PPF account with a minimum investment of INR 100.
Investors need to invest at least a minimum of INR 500 in their PPF account to keep
the account active. If they fail to do so, their account will be deactivated and investors
will have to pay INR 50 as a penalty and INR 500 for that specific year to reactivate
it. Investment in Public Provident Fund up to INR 1,50,000 qualifies for tax
deduction under Section 80C of the Income Tax Act. The returns from PPF Scheme
are entirely exempt from tax.

5. SCSS
Senior Citizen Savings Scheme: A Senior Citizen Savings Scheme is surely the
preferred choice of almost every retiree and an investment plan, which is on every
retiree’s investment portfolio. It is a scheme specifically designed for the senior
citizens and can easily be availed from any of the banks or the post offices for anyone
who is 60 years of age and above. The scheme is available for 5 years, which can also
be extended for up to 3 years only when the same gets matured.

Besides, one can easily open more than one account and Rs 15 lakh is the limit for
upper investment. When it comes to the interest rate it is completely taxable and paid
on a quarterly base on the premise of the revisions and subject to review. However,
if
 once the investment has been done in the scheme the rate of interest will be the same
until the scheme matures. The senior citizen can also claim Rs 50,000 as claim
deduction in one financial year within section 80TTB with the earned interest from
the scheme.

6. SSY
Sukanya Samriddhi Yojana: This plan is specifically developed to secure the
financial future of the girl child. Since its launch, the plan has gained huge popularity
as one of the best investment plans in India for the girl child. As a government-
backed investment option, this scheme offers safe and guaranteed returns to the
investors. The SSY has a tenure of 21years or until the marriage of the girl child after
18 years of age. The current interest rate offered by the scheme is 7.6% compounded
annually. From the perspective of tax benefit, SSY is designed as an exempt, exempt,
exempt (EEE) investment. This means that the contribution made towards the
scheme, the interest earned on the contributed amount, and maturity proceeds are all
tax exempted under the applicable sections of the Income Tax Act.