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4 A mutual fund is an investment that allows a

group of investors to pool their money
together with a predetermined investment
objective.
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4 phe popularity of Mutual Funds has

increased manifold in developed financial
markets, like the United States.
4 As at the end of March 2008, in the US alone
there were 8,064 mutual funds with total
assets of about US$ 11.734 trillion (Rs.470
lakh crores)*.
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4 Started with erstwhile Unit prust of India in

1963.
4 Public sector banks and financial institutions
were allowed to establish mutual funds in
1987.
4 Since 1993, private sector and foreign
institutions were permitted to set up mutual
funds.
4 As at the end of March 2008, there were 33
mutual funds, which managed assets of Rs.
5,05,152 crores (US $ 126 Billion)* under 956
schemes.
4 phis fast growing industry is regulated by the
Securities and Exchange Board of India
(SEBI).

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4 ào not have a fixed 4 Stipulated maturity period
maturity 4 invest in the scheme at
4 phe key feature is the time of the initial issue
liquidity 4 buy or sell the units of the
4 conveniently buy and sell scheme on the stock
your units at Net Asset exchanges where they
Value(NAV) related are listed.
prices, at any point of 4 Characteristics - traded at
time. a discount to NAV;
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Interval Schemes

4 phese combine the features of open-ended

and close-ended schemes.

4 phey may be traded on the stock exchange

or may be open for sale or redemption during
predetermined intervals at NAV related
prices.
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1) Growth Schemes
Aim to provide capital appreciation over
the medium to long term.
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4 Investors in their prime earning years.

4 Investors seeking growth over the long term.

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4 Aim to provide regular and steady income to

investors.
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4 Retired people and others with a need for
capital stability and regular income.
4 Investors who need some income to
supplement their earnings.
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4 Aim to provide both growth and income by

periodically distributing a part of the income
and capital gains they earn.
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4 Investors looking for a combination of income
and moderate growth.
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4 Aim to provide easy liquidity, preservation of

capital and moderate income
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4 Corporates and individual investors as a
means to park their surplus funds for short
periods or awaiting a more favourable
investment alternative.
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4 pax Saving Schemes (Equity Linked Saving

Scheme - ELSS)
4 phese schemes offer tax incentives to the
investors under tax laws as prescribed from
time to time and promote long term
investments in equities through Mutual
Funds.
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4 Investors seeking tax incentives.
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4 It is calculated by subtracting liabilities from

the value of a fund's securities and other
items of value and dividing this by the
number of outstanding shares .
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4 V
 is one that charges a percentage
of NAV for entry or exit.
4 phree types:
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4 Market Risk
4 Credit Risk
4 Liquidity Risk
4 Interest Rate Risk
4 Political/Government Policy Risk
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—: po identify your investment needs.

4 Objective of investment

4 Risk bearing capacity

4 Cash flow requireement.

":Choose the right Mutual Fund.

#Select the ideal mix of Schemes.

 $: Invest regularly
4 invest a fixed amount at specific intervals,
say every month.

%: Keep your taxes in mind

4 current tax laws, àividend/Income
àistribution made by mutual funds is
exempt from Income pax in the hands of
investor.
 &:Start early
4 It is desirable to start investing early and stick to
a regular investment plan.

': phe final step

4 touch with a Mutual Fund or your advisor and
start investing
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