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Guide To Equity MF Schemes
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Guide To Equity MF Schemes

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The objective of this presentation is to educate investors about the world of mutual funds and keep them highly informed for optimizing portfolio diversification & performance. …

The objective of this presentation is to educate investors about the world of mutual funds and keep them highly informed for optimizing portfolio diversification & performance.

For other investment products & freely available research products please log on to www.rrfinance.com

Published in: Economy & Finance

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  • 06/07/09 Prepared by Chrys Gonsalves
  • Transcript

    • 1. MUTUAL FUNDS GUIDE TO EQUITY SCHEMES the objective of this presentation is to educate investors about the world of mutual funds and keep them highly informed for optimizing portfolio diversification & performance. This service adds another feather to our hat. For other investment products & freely available research products please log on to www.rrfinance.com { RR Financial Consultants Limited 133-A, 13 th Floor, A- Wing, Mittal Tower, Nariman Point, Mumbai-400021 Tel022-22886627-28; Fax: 022-22851925 URL: www.rrfinance.com
    • 2. CONTENTS
      • Mutual Funds Flow Chart
      • Types of Schemes
      • Types of Schemes 2
      • Equity Fund – What is it?
      • Types of Mutual Funds
      • Options & Sub-Options
      • Types of Equity Funds
      • Investment Strategies
      • Advantages of Equity Funds
      • Risk Factors
      • Contact Us
    • 3. MUTUAL FUND FLOW CHART pool their money with invest in equity & fixed income Passed back to generates
    • 4. TYPES OF SCHEMES Structure Entry / Exit Risk / Return Profile Investment Type Liquidity Open-Ended Schemes Entry / Exit anytime T+2 Close-Ended Schemes Entry on NFO Exit after Lock-in as date expires On-Expiry of Lock-in or Tradable on Stock Exchange Equity (Growth) High Risk High Return Only in Stocks, Long Term (3 years or more) T+2 Balanced / Hybrid Medium Risk Medium Return Stocks + Fixed Income Securities (1-3 years) T+2 Debt (Income) Low Risk Low Return only in Fixed Income Securities (3-10 months) T+2 or after Lock-in Expires in case of FMP’s Liquid / Money Market No Risk Fixed Income – Short-term Money Market (Govt.) T+1 Other Schemes Any of the above select Funds Tax Saving Schemes, Monthly Income Plans. T+2 or After 3 year lock-in in case of ELSS
    • 5. TYPES OF SCHEMES 1 Arbitrage Funds 2 Balanced Funds 3 Large Cap Funds 4 Flexi Cap Funds 5 Thematic Funds 6 Sectoral Funds 7 Mid Cap Funds 1 Liquid Funds 2 Liquid Plus Funds 3 MIP Funds 4 GILT Funds 5 Income Funds 6 Short Term Plans 7 FMP’s 1 Balanced Funds
    • 6. EQUITY FUNDS – What is it?
      • WHAT IT IS
      • Equity investing simply involves buying a part of a Company. For example, you could buy shares in Company X or Company Y. As this would make you one of the company’s owners, you would gain a stake in any success it achieves. Likewise, if the company is not as successful as was expected, then the value of your shares would decrease accordingly and you may get back less than you invested.
      • You can buy equities through a stock broker and directly invest in individual companies. Or you can choose to invest in an equity mutual fund . This means your money is pooled with other investors’ contributions, allowing you to buy shares in a wider range of companies.
      • TYPES OF EQUITY FUNDS
      • Diversified equity funds
      • Index funds
      • Opportunity funds
      • Mid-cap funds
      • Equity-linked savings schemes
      • Sector funds like Auto, Healthcare, FMCG
      • Dividend Yield Funds
      • Others (Exchange traded, Theme, Contra )
      Why keep a Long Term view?
    • 7. TYPES OF EQUITY FUNDS 1 Arbitrage Funds 2 Balanced Funds 3 Large Cap Funds 4 Flexi Cap Funds 5 Thematic Funds 6 Sectoral Funds RETURNS RISK Sample Portfolio 7 Mid Cap Funds Type of Fund Annualized Return Risk Tenure Arbitrage Funds 8-10% 0% Risk 1 year Index Funds 10-15% Index Linked 1-3 Years Large Cap Funds 15-20% Low Risk 1-3 Years Mid Cap Funds 15-20% High Risk 1-3 Years Flexi Cap Funds 15-20% Medium Risk 1-3 Years Sectoral Funds 10-20% High Risk 1-3 Years Thematic Funds 15-20% Medium Risk 1-3 Years Balanced 10-20% Low Risk 1-3 Years
    • 8. OPTIONS & SUB-OPTIONS GROWTH OPTION DIVIDEND OPTION In this option No Dividend is offered to the investor. The NAV grows and hence and the whole amount redeemed is taxable as per the Long term or Short term Capital Gains Tax applicable In this option an amount is paid-out to the investor regularly or periodically as the Fund Manager feels so fit. PAYOUT REINVESTMENT This option simply debits the Dividend to the Investors This option Re-invests the dividend so paid in the same fund that the investor has invested in. TAXABILITY
      • 15% Tax on STCG
      • No Tax on LTCG
      • Dividend Income is Tax Free
      • TDS @ 10% on STCG for NRI’s
      • No Dividend Distribution Tax
      • TDS @ 10% on STCG for NRI’s
      ADVANTAGES No Tax on Long Term Capital Gain. No Dividend Distribution Tax No TDS Applicable on LTCG
    • 9. INVESTMENT STRATEGIES
      • 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)
        • Give instructions to Withdraw a fixed sum, at a fixed interval, to any scheme of the same fund
    • 10. ADVANTAGES OF MUTUAL FUND
    • 11. RISK FACTORS
    • 12. CONTACT US
      • RR Financial
      • Consultants Limited
      • 133-A, 13 th Floor, A-Wing,
      • Mittal Tower, Nariman Point,
      • Mumbai-400 021
      • Phone: 022-22886627
      • 022-22886628
      • Fax: 022-22851925
      • Website: www.rrfinance.com
      • Chrys Gonsalves - Relationship Manager
      • Cell: 9324804085
      • [email_address]

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