CHAPTER 12

MUTUAL FUND SCHEME SELECTION

SCHEME SELECTION BASED ON INVESTOR
NEEDS, PREFERENCES AND RISK-PROFILE
RISK RETURN HIERARCHY
Lowest Risk and return to Highest risk and return
SCHEME SELECTION BASED ON INVESTMENT
STRATEGY OF MUTUAL FUNDS
OPEN-ENDED FUNDS V/S CLOSE-ENDED
FUNDS
FUNDS, SECTOR FUNDS AND THEMATIC
FUNDS
 LARGE-CAP V/S MID-CAP V/S SMALL CAP
FUNDS

• Large-cap stocks are of established companies that have stable

revenues and profitability and the financial strength to
withstand competition and economic downturn.
• Multi cap funds spread the investments across the market
capitalization spectrum in order to try and benefit from the
opportunities across the market.
GROWTH OR VALUE FUNDS

• A growth fund outperforms in a bull market, while the value orientations

helps a value fund
• outperform in a falling market.
• Depending on the risk-profile of the investor, both these type of funds can
find a place in the core portfolio of the investor in suitable proportions.
INTERNATIONAL EQUITY FUNDS

• When an Indian investor invests in equities abroad, he is essentially taking

two exposures:
1. An exposure on the international equity market.
2. An exposure to the exchange rate of the rupee. If the investor invests in
the US, and the US Dollar becomes stronger during the period of his
investment, he benefits; if the US Dollar weakens (i.e. Rupee becomes
stronger), he loses or the portfolio returns will be lower.
 FLOATER FUNDS

• Floater funds, invest in floating rate instruments. Since floating rate debt
securities tend to hold their investment, even if interest rates fluctuate,
the NAV of floaters tend to be steady.
FUND PERFORMANCE
THANK YOU