[email_address] Surplus funds are to be invested Professionals like C.A.’s are approached by clients to give advise about investing. Pros & Cons of Investing of each type. The most attractive in terms of liquidity and returns is capital markets. To minimise Risks of volatility of stock markets, Mutual Funds investment are relevant
[email_address] Sponsor: Establishes a MF, obtains Certificate of Registration from SEBI, forms a trust, appoints board of trustees & AMC, appoints Custodian Trustees: MF managed by body of individuals or a trust company (corporate body). Guardians of assets of Unitholders. Responsible. AMC: Investment Manager of Trust. Under the supervision of Board of Directors, Trustees, SEBI. Floates & manages different schemes. Mutual Fund: Formed under Indian Trusts Act, 1982. Invites subscriptions to units. Transfer agents: Issue and Redemption of units Custodian: For safekeeping of securities, participating in clearing system
[email_address] AMFI: a forum where mutual funds have been able to present their views, debate and participate in creating their own regulatory framework. the body that is consulted on matters long before regulations are framed, and it often initiates many regulatory changes that prevent malpractices that emerge from time to time. Receive Unit certificates within 6 weeks from the date your request for a unit certificate is received by the Mutual Fund. Receive dividend within 42 days of their declaration Receive the redemption or repurchase proceeds within 10 days from the date of redemption or repurchase.
[email_address] Standard Deviation: how much the actual performance of a fund over a period of time deviates from the average performance. Low SD = good Sharpe Ratio : returns that a fund delivered were commensurate with the kind of volatility it exhibited; looks at both, returns and risk, and delivers a single measure that is proportional to the risk adjusted returns. High SR =Good Market Risk: overall stock or bond markets fall Non-Market Risk: Bad news about an individual company can pull down its stock price, which can negatively affect fund holdings. Credit Rate Risk: Bonds are debt obligations. corporate defaulting on their interest and principal payment obligations
[email_address] AMFI: Under the heading Investors Zone, you will find another one called ARN Search . This refers to the AMFI Registration Number. Click on it and you will arrive at a search page. You can locate an agent in your vicinity by just putting in your PIN code or name of your city
Presented By :- Sandeep Pramanik Abrar Khan
1. Human life cycle2. Individual investor3. Value of money over time4. Graph of sensex from globlization5. Sensex of last two year6. Option for investing7. What is mutual fund8. Advantages & disadvantages9. Types of mutual funds
1. History of mutual funds2. Regulation3. Taxation4. Risk5. Investment strategies6. Investment check list
Impact of inflation on monthly Value of Rs. 100,000 over time expenses of Rs. 30,000 today 100,000 79,599 78,353 62,368 48,102 38,288 37,68930,000Today 5 years 15 years 20 years Today 5 years 15 years 20 years At inflation of 5% Investors need to beat inflation
Deposit in Bank – FD’s, Locker ;) Loan a Friend/Relative on Interest Property Investments Invest in liquid assets - Gold, Silver.. Investment in Capital Markets - - Direct - Equity Share Markets - Debt & Bonds Market - Indirect - Mutual Funds
Direct Equity High risk, high return category. Needs a lot of time & expertise. Substantial initial capital required. Mutual Funds One-Time Investment Systematic Investment Plan (SIP)
A mutual fund is a type of professionally-managed collective investment vehicle that poolsmoney from many investors to purchase securities.While there is no legal definition of mutual fund, theterm is most commonly applied only to thosecollective investment vehicles that are regulated.Hedge funds are not considered a type of mutual fund
The term mutual fund is less widely used outside of the United States and Canada. For collective investment vehicles…. It available to the general public and open-ended in nature…. Mutual funds must be registered with the Securities and Exchange Commission…. They are not taxed on their income if they comply with certain requirements….
ADVANTAGES OF MUTUAL FUNDS Increased diversification Daily liquidity Professional investment management Service and convenience Government oversight Ease of comparison Ability to participate in investments that may be available only to larger investors
Fees Less predictable income No opportunity to customize Less control over timing of recognition of gains
Type of Mutual Fund Schemes Special Investment Structure Schemes ObjectiveOpen Ended Industry Specific Growth Funds Funds SchemesClose Ended Index Income Funds Funds Schemes SectoralInterval Funds Balanced Funds Schemes Money Market Funds
The first mutual funds were established in Europe IN 1774. Mutual funds were introduced into the United States in the 1890s The first open-end mutual fund with redeemable shares was established on March 21, 1924.
Governed by SEBI (Mutual Fund) Regulation 1996 All MFs registered with it, constituted as trusts ( under Indian Trusts Act, 1882) Bank operated MFs supervised by RBI too AMC registered as Companies registered under Companies Act, 1956 SEBI- Very detailed guidelines for disclosures in offer document, offer period, investment guidelines etc. NAV to be declared everyday for open-ended, every week for closed ended Disclose on website, AMFI, newspapers Half-yearly results, annual reports Select Benchmark depending on scheme and compare
TAXATION• All dividends declared by debt / equity oriented schemes are taxfree in the hands of the investor• Dividend distribution tax @ 14.1625% for individuals and 22.66%for corporates under debt oriented schemes• No DDT under equity schemes• Long term capital gain in equity schemes – exempt from tax• Indexation benefit available for long term non equity schemes• Equity short term capital gain @10%• STCG in Debt funds – Rates applicable for the investor• Deduction of Rs. 1 lac under section 80C
Historical analysis Return is remembered, Risk forgotten Risk = Potential for Harm Market Risk Non-Market Risk Credit Rate Risk MF Risk = Volatility (fluctuation of NAV) Standard Deviation Websites give star rating ( basis = risk-adjusted return)
Systematic Investment Plan (SIP) Invest a fixed sum every month. (6 months to 10 years- through post-dated cheques or Direct Debit facilities) Fewer units when the share prices are high, and more units when the share prices are low. Average cost price tends to fall below the average NAV. Systematic Transfer Plan (STP) Invest in debt oriented fund and give instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of the same mutual fund. Systematic Withdrawal Plan (SWP)
An investment plan to invest afixed amount regularly at aspecified frequency say,monthly or quarterly. SIP is a simple method of investing used across the world as a means to creating wealth
Draw up your asset allocation Financial goals & Time frame (Are you investing for retirement? A child’s education? Or for current income? ) Risk Taking Capacity Identify funds that fall into your Buy List Obtain and read the offer documents Match your objectives In terms of equity share and bond weightings, downside risk protection, tax benefits offered, dividend payout policy, sector focus Check out past performance Performance of various funds with similar objectives for at least 3-5 years (managed well and provides consistent returns)
Think hard about investing in sector funds For relatively aggressive investors Close touch with developments in sector, review portfolio regularly Look for `load costs Management fees, annual expenses of the fund and sales loads Does the fund change fund managers often? Look for size and credentials Asset size less than Rs. 25 Crores Diversify, but not too much Invest regularly, choose the S-I-P MF- an integral part of your savings and wealth-building plan.
Contacting the Asset Management Company directly Web Site Request for agent Agents/Brokers Locate one on AMFI site Financial planners Bajaj Capital etc. Insurance agents Banks Net-Banking Phone-Banking ATMs Online Trading Account ICICI Direct Motilal Oswal, Indiabulls- Send agents
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