Investment NAV

Retail Investors Portfolio Dividend

Income
Exit Load
Risk Management Fund Manager
Factsheets

Mutual Fund Industry Repurchase Price

Return
AUMs
Open Ended Close Ended
Portfolio
Growth Professional
Management Sale Price
Tax Saving
Redemption

Exit Load Asset Allocation

Investment Objective
MUTUAL FUND

What is Mutual Fund

• Mutual Fund is a trust

• Pools the savings of a number of investors who share a common
financial goal
• Collected money is then invested in capital market instruments such as
shares, debentures and other securities
• Income earned from the investments shared by its unit holders in
proportion to the number of units owned by them

Mutual Fund investment are subject to market risks, read all Scheme related document carefully
 MUTUAL FUND

How Mutual Fund Works?

Passed back to Pool their money with

Investor

Fund
Returns
Manager

Securities Invest in
Generate

Mutual Fund investment are subject to market risks, read all Scheme related document carefully
STRUCTURE OF MUTUAL FUND IN INDIA

Mutual Fund investment are subject to market risks, read all Scheme related document carefully
STRUCTURE OF MUTUAL FUND IN INDIA
Formation of
UTI

Entry of Public
Sector Funds

Entry of Private
Sector Funds

A phase
dedicated to
Retail Investors

Mutual Fund investment are subject to market risks, read all Scheme related document carefully
ADVANTAGES OF MUTUAL FUNDS

Professional Convenient
Diversification Return Potential
Management Administration

Low Costs Liquidity Transparency Flexibility

DISADVANTAGES
• Lack of portfolio
Choice of schemes Tax benefits Well regulated customization
• Choice overload
• No control over costs

Mutual Fund investment are subject to market risks, read all Scheme related document carefully
TYPES OF MUTUAL FUNDS

• By Structure
– Open-Ended – anytime enter/exit
– Close-Ended Schemes – listed on exchange, redemption after period of
scheme is over.

• By Investment Objective
– Equity (Growth) – only in Stocks
– Debt (Income) – only in Fixed Income Securities, Liquid/Money
Market (including gilt) – Short-term Money Market (Govt.)
– Balanced/Hybrid – Stocks + Fixed Income Securities

• Other Schemes
– Tax Saving Schemes
– Special Schemes

Mutual Fund investment are subject to market risks, read all Scheme related document carefully
TYPES OF MUTUAL FUNDS

• Equity Funds
– Large-cap/Multi-cap/mid-cap/small-cap/thematic/
sectorial/ELSS/Index funds/Arbitrage/Global
• Debt Funds
– Income(FMP, MIP)/Gilt/Liquid Funds
– Shot-term, Ultra short-term liquid funds
• Balanced funds
• Diversified/Hybrid Funds
• Funds of Funds
ETFs (https://www.youtube.com/watch?v=ve1eVlHs_84)
Mutual Fund investment are subject to market risks, read all Scheme related document carefully
MUTUAL FUND HISTORY IN INDIA

• Started in 1963 with the formation of Unit Trust of India

• Divided into four distinct phases

First Phase: 1964-87

• Formation of Unit Trust Of India 1963, after Parliament Act
• Set up by the Reserve Bank of India
• Functioned under the Regulatory and administrative control of the
Reserve Bank of India
• In 1978 UTI was de-linked from the RBI and charge took over by
Industrial Development Bank of India (IDBI)
• First scheme launched by UTI was Unit Scheme 1964
• In 1988, AUM was Rs. 6700 Crores.

Mutual Fund investment are subject to market risks, read all Scheme related document carefully
MUTUAL FUND HISTORY IN INDIA
Second Phase: 1987-1993
• Entry of Public Sector Funds
• public sector mutual funds set up by public sector banks and Life
Insurance Corporation of India (LIC) and General Insurance
Corporation of India (GIC)
• SBI Mutual Fund was the first non- UTI Mutual Fund established in
June 1987
• Canbank Mutual Fund (Dec 87),
• Punjab National Bank Mutual Fund (Aug 89),
• Indian Bank Mutual Fund (Nov 89),
• Bank of India (Jun 90),
• Bank of Baroda Mutual Fund (Oct 92).
• LIC established its mutual fund in June 1989 while GIC had set up its
mutual fund in December 1990.
• At the end of 1993, the mutual fund industry had assets under
management of Rs.47,004 crores

Mutual Fund investment are subject to market risks, read all Scheme related document carefully
MUTUAL FUND HISTORY IN INDIA
Third Phase: 1993-2003
• Entry of Private Sector Funds
• First Mutual Fund Regulations
• Under which all mutual funds, except UTI were to be registered and
governed
• In 1993, first private sector mutual fund registered Kothari Pioneer (now
merged with Franklin Templeton)
• In 1996, Industry now functions under the SEBI (Mutual Fund)
Regulations after the revised Mutual Fund Regulations
• Industry is growing with the entry of foreign players and the M&A
• By 2003, 33 mutual funds with total assets of Rs. 1,21,805 crores
• Unit Trust of India(UTI) leading the market with Rs.44,541 crores

Mutual Fund investment are subject to market risks, read all Scheme related document carefully
MUTUAL FUND HISTORY IN INDIA
Fourth Phase: Since-2003
• In February 2003, Unit Trust of India Act 1963 UTI was bifurcated into
two separate entities
• One is the Specified Undertaking of the Unit Trust of India with assets
under management of Rs.29,835
• Representing broadly, the assets of US 64 scheme, assured return and
certain other schemes
• Specified Undertaking of Unit Trust of India, functioning under an
administrator and rules framed by Government of India
• Second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC
• Registered with SEBI and functions under the Mutual Fund Regulations

Mutual Fund investment are subject to market risks, read all Scheme related document carefully
MUTUAL FUND HISTORY IN INDIA (Presently)

• As on Sep 2020, there are 44 Asset management companies in India

• With AUM of Rs.  26, 85,982 Crores.

• Around 2500+ mutual fund schemes in India,

• This number has grown exponentially in the last few years.

• In India, mutual fund AUM is nearly 20% of bank deposits. This is

indicative of the immense potential for growth of the industry.
• https://www.amfiindia.com/indian-mutual ( Latest AUM information)

Mutual Fund investment are subject to market risks, read all Scheme related document carefully
ASSET UNDER MANAGEMENT GROWTH

Mutual Fund investment are subject to market risks, read all Scheme related document carefully
ASSET UNDER MANAGEMENT GROWTH

Mutual Fund investment are subject to market risks, read all Scheme related document carefully
 MF INVESTING Vs. DIRECT INVESTING

• Professional investment management

• Risk reduction through diversification
• Convenience
• Availability of alternative portfolio objective
• Unit holder’s account administration and services

Mutual Fund investment are subject to market risks, read all Scheme related document carefully
Scheme
Performance
https://www.amfiindia.com/research-information/other-data/mf-scheme-perfor
mance-details

https://www.moneycontrol.com/mutual-funds/nav/hdfc-focused-30-fund
/MHD044
PERFORMANCE MEASURE

Mutual Fund investment are subject to market risks, read all Scheme related document carefully
 PERFORMANCE MEASURE
• Absolute Return/Annualized Return
• Beta
– Beta measures the fluctuation in periodic returns in a scheme, as compared to fluctuation in
periodic returns of a diversified stock index over the same period.
– Relevant for equity schemes.
• Standard Deviation
– Standard Deviation too measures the fluctuation in periodic returns of a scheme in relation to
its own average return. Mathematically, standard deviation is equal to the square root of
variance.
– Relevant for both debt and equity schemes.
• Risk adjusted return
– Sharpe Ratio
• Uses Standard Deviation as a measure of risk. It is calculated as (Rs minus Rf) ÷
Standard Deviation
– Treynor Ratio
• Computation of risk premium is the same as was done for the Sharpe Ratio. However, for
risk, Treynor Ratio uses Beta. Treynor Ratio is thus calculated as: (Rf minus Rs) ÷ Beta

Mutual Fund investment are subject to market risks, read all Scheme related document carefully