Mutual Funds

Know what you own, and know why you own it.
What are mutual funds?
A Common Pool A common pool of money into which investors place their money that are to be
1 invested in different set of securities.

Diversified
2 The investment of pooled money goes into well diversified set of investments.

Ownership
3 Mutual fund shareholder or a unit holder is part owner of the fund's asset.

Risk Free
4 Since the portfolio is well diversified the risk is mitigated.

Easy Exit
5 The investment can be withdrawn at any point of time.

No minimum cap One can invest in mutual funds with as low as Rs 200
6 of investment.
 Brief History
1. 1964-87

1. The mutual fund industry started in India in 1963.

From a mere AUM of 25crores, it scaled to Rs 6700 crore
2.1987-93 in 1988

2. Entry of public sector mutual funds.

PSU banks , LIC and general insurance corporation mark
3. 1993-03 the entry of public sector.

3.Entry of private sector.

SEBI regualation 1983 changed with new comprehensive
4. 2003 set of regulation 1996.
& BEYOND
4..Consolidation.
With M&As, this phase came to be known as
consolidation.
The Growth
Indians Investing habits Sales

Low affiliation towards Mutual funds

Indians are more inclined towards investment in real
estate and gold. Given the scope of investing in very 30%
31%
small amounts, the mutual funds which stands at 1.7%
of total investment if Indians.

2%
The growth opportunity of mutual funds stands at a 9% 16%
threshold to shoot exponentially with the advent of 13%
high banking percolation and internet connectivity.

Gold Real estate FD

Life insurance Mutual funds Others
5%
Myths about Mutual Funds
Category One
17% They are new in the financial market.
Category Two
20% Mutual funds invests only in shares.
Category Three
Prone to very high risks.
23%
Category Four
People rarely invest in them.
30% Category Five
You don't have to pay attention to them.
 Types of Mutual Funds

Open Ended Funds Close Ended Funds Interval Funds

Collective investment scheme Collective investment model Non-traditional type of closed-

that can issue and redeem based on issuing a fixed end mutual fund that
shares at any time number of shares which are not periodically offers to buy back a
redeemable from the fund percentage of outstanding
shares from shareholders.
Story till now!
Advantages of Mutual Funds
Why not to be afraid of investing in mutual funds?

PROFESSIONAL
LIQUIDITY DIVERSIFICATION MANAGEMEN LOW COSTS
T

Easy sell and buy options Portfolio contains all Portfolio is manage by Economies of scale exist
types of securities and qualified managers
shares
How to invest in mutual funds?
Follow these five basic guidelines.

Step One Step Two Step Three Step Four Step Five

Identify your purpose Fulfill the Know Your Know about the schemes Consider the risk WAIT!!!
for investing Customer (KYC) available factors
requirements And let the equity grow
Thank You!
Namaste!

Created by | Swastik

Phone | +91 8368448371

Email | swastik.p19175@iimtrichy.ac.in