Mutual Fund Industry Study_final BE Ppt | Mutual Funds | Investor

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Concept of a Mutual Fund (MF) Operation of a MF Advantages and disadvantages Evolution of MF in India Structure of a MF Legal and regulatory framework Classification of MF How to invest in MFs

Industry Study Mutual Funds

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³A mutual fund is a pool of money collected from investors and is invested according to stated investment objectives´.

Industry Study Mutual Funds

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 No control over costs No tailor-made portfolios Managing a portfolio of funds   Industry Study Mutual Funds 7 .

1963 In 1984 investible funds corpus of UTI :-Rs 600 crore By 1987-1988. assets under management of UTI :. Phase I -1964-87 : Growth of Unit Trust of India UTI -only mutual fund during 1963-1988 -monopoly status  Governed by UTI Act.Rs 6700 crore Industry Study Mutual Funds 8 .

004 crore  UTI still had 80% market share Industry Study Mutual Funds 9 . SBI Mutual Fund ± 1st Bank sponsored mutual fund  SEBI got regulatory powers in 1992 under management increased to Rs  Assets 47.

 Private sector players allowed to set up mutual funds in 1993  Kothari Pioneer registered as the first private MF house in the country  Encouraged competition Industry Study Mutual Funds 10 .

 SEBI Mutual fund regulations 1996 and liberalization of Indian economy  Deregulation impetus for growth  increased competition  SEBI and AMFI launched investor awareness programs  In 1999 dividends from mutual funds were made tax exempt in the hands of investors Industry Study Mutual Funds 11 .

 Emergence of a large uniform industry  Creation of a level playing field Industry Study Mutual Funds 12 .

152 crores under 956 schemes Industry Study Mutual Funds 13 .Fidelity. Infrastructure Development Finance Company Limited (IDFC) took over Standard Chartered AMC (2008) International players.05. As at the end of March 2008. there were 33 mutual funds. Franklin Templeton Mutual Fund. 5. which managed assets of Rs.Mergers and acquisitions-Birla Sun Life bought out Alliance Capital (2005).

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Industry Study Mutual Funds 17 .3-tier structure of Sponsor-Trustee-AMC.

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` ` ` ` Mutual funds are regulated by the SEBI (Mutual Fund) Regulations. 1996. investor awareness) Industry Study Mutual Funds 20 . (training. Listed mutual funds are subject to the listing regulations of stock exchanges. Association of Mutual funds India (AMFI )is an industry association of mutual funds. Bank-sponsored mutual funds are jointly regulated by SEBI and RBI.

00.  Net Industry Study Mutual Funds 21 .Asset Value is the market value of the assets of the scheme minus its liabilities.50 lakh and there are one lakh shares of the fund. then the price per share (or NAV) is Rs.50.  The NAV increases (or decreases) when the value of the mutual fund's holdings increase (or decrease).  The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the valuation date  So if a fund had net assets of Rs.

Types of mutual funds Maturity Period Investment objectives Load Open ended Close ended Industry Study Mutual Funds 22 .

The corpus of open-ended funds. The corpus of a closed-end fund remains unchanged. Do not have a fixed maturity. It is then listed on the stock market. Have a stipulated maturity period (2-15 years) Sell at a discount or premium to NAV CLOSED ENDED Industry Study Mutual Funds 23 ` ` ` ` ` ` OPEN ENDED . Repurchased at NAV ` Offers units for sale only in the IPO.` Available for subscription all through the year. changes everyday.

 Loads:- charges imposed on investors to cover distribution/sales/ marketing expenses  Load types Front ± end load or entry load Back ± end load or exit load  Funds that make no such charges or loads for sales expenses are called no ± load funds Industry Study Mutual Funds 24 .

INVESTMENT OBJECTIVES Industry Study Mutual Funds 25 .

CONFUSED??? Industry Study Mutual Funds 26 .

 Invest in equity shares  Objective -capital appreciation over the medium to long-term are volatile since linked to the stock  Returns markets Industry Study Mutual Funds 27 .

` ` ` ` Offer tax benefits to investors under section 80 C Invest primarily in equities (90%) 3 year lock in period Encourage investment in equities Industry Study Mutual Funds 28 .

 Invest in the same pattern as popular market indices like S&P CNX Nifty Index/ SENSEX  Value of the index fund varies in proportion to the benchmark index Industry Study Mutual Funds 29 .

 Invest in equity shares of companies in a particular sector Targeted at investors who are extremely bullish about a particular sector  Industry Study Mutual Funds 30 .

` ` Invest in highly liquid money market instruments Short term Industry Study Mutual Funds 31 .

to long-term investors willing to take moderate risks Industry Study Mutual Funds 32 . providing some upside for capital appreciation Ideal for medium. reduce volatility.` ` ` Invest both in equity shares and fixed-incomebearing instruments (debt) Steady return.

debentures. government securities Best suited for the medium to long-term investors Averse to risk and seek capital preservation Provide regular income and safety to the investor Industry Study Mutual Funds 33 .` ` ` ` Invest in fixed-income-bearing instruments like bonds.

` ` Invest in Central and State Government securities Give secured return and ensure safety of the principal amount ` Best suited for the medium to long-term investors who are averse to risk Industry Study Mutual Funds 34 .

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trustee & AMC. mandatory disclaimer clause of SEBI Closed end funds issue an offer document at the time of the IPO Open ended funds have to update OD at least once in 2 years Industry Study Mutual Funds 37 . names of sponsor. available with application form Cover page contains details of scheme offered.` ` ` ` ` OD -most important source of information for investors KIM is abridged version of the OD.

     Identify your investment needs Choose the right Mutual fund Select the ideal mix of schemes Invest regularly Start early Continued« Industry Study Mutual Funds 38 .

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` Create wealth. by investing as little as Rs. 500/per month Disciplined Investing Approach Benefits of Compounding ` ` Industry Study Mutual Funds 40 .

POWER OF COMPOUNDING Industry Study Mutual Funds 41 .

` Indian mutual funds retail market. 2008). private sector Asset Management Companies account for majority of mutual fund sales in India Industry Study Mutual Funds 42 . is forecasted to reach US$ 300 Billion by 2015 ` Income and growth schemes made up for majority of Assets Under Management (AUM) in the country ` At about 84% (as on March 31. growing at a CAGR of about 30%.

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THANK YOU Industry Study Mutual Funds 45 .

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