Presented by:Rachit Rastogi :Ankit Tiwari

A Mutual Fund is an intermediary that pools money from a number of investors and invests the same in a variety of different financial instruments. The income earned through these investments and the capital appreciation realized by the scheme is shared by the investors or Unit Holders, in proportion to the number of units owned by them. Mutual funds can thus be considered as financial intermediaries that collect funds from investors and invest it on their behalf. The losses and gains accrue to the investors only.

y The mutual fund industry in india started in1963 with the

formation of Unit Trust Of India.

y
The first and for the long the largest scheme was Unit

scheme 1964 also known as US-64.It was also the first partly open-ended scheme. y
Mastershare was the first diversified equity investment scheme in india. y
1987 marked the entry of public sector mutual funds. y
SBI established the first non UTI mutual fund in 1987 followed by Canbank mutual fund,LIC,Indian bank mutual fund,Bank of india mutual fund ,GIC and PNB.

y Open ended funds y
Close ended fund y
Interval fund y
Debt fund y
Equity fund y
Hybrid fund y
Other fund

y Fundamental Attributes y Legal Document y All important Disclosures y Prime source of information for an investor to make y y y y

decisions Risk factors: Standard and Scheme specific Investment objective and policies , Investment procedure SEBI requires for an open ended scheme to be revised in every 2 years Key information memorandum(KIM) is an abridged form of offer document

y Types of Distribution channnels: I. II. III. IV. V.

Individuals Distribution company Banks & NBFC s Post Office Direct Marketing

y y y y y y

Commissions rate vary from fund house to fund house & from scheme to scheme Upfront & Trail commissions Fund is not answerable for the activities of subbroker Investor servicing SEBI s advertising code AMFI Code of Ethics(ACE)

y Net Asset Value: It is common practice for mutual

funds to compute the share of each investor on the basis of the value of Net Assets per share/unit. The Share of each investor thus computed is called Net Asset Value y FORMULA FOR Computing NAV: y NAV= Net Asset of the scheme/Number of units Outstanding y Net Assets of the scheme=Market value of investments + Other accrued incomes + other assets Accrued expenses other payable other liabilities

y Mutual fund offer investor the opportunity to earn y y y y y

income through professional management.
Risk is diversified by portfolio diversification.
Provide liquidity to the investor through
Mutual fund are not liable to pay tax on the income they earn.
Convenient option for the investor.
Regulatory comfort in mutual fund because SEBI has mandated strict checks and balances in the structure of mutual fund and their activities.