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Mutual funds

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  • www.finerva.com
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    • 1. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Jump Start Financial Services & Mutual Funds
    • 2. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Why Financial Services? • Financial Services is one of the fastest growing sectors today with some of the best career opportunities
    • 3. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Why this seminar? You are on the threshold of your career with many choices of jobs. We shall help you take informed decisions, so you can have a “jump start”
    • 4. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Agenda: Next 90 minutes Financial Services – An overview Job Profiles Skill Sets required How to get those skills Discussions
    • 5. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Money or……..? • In business what is more important than money or cash?
    • 6. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Financial Services • The financial services incorporates organisations that deal with the management of money. It consists of an intricate network of financial institutions and markets.
    • 7. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Financial Services…. • The industry plays a vital role in the functioning of the economy, facilitating the flow of funds between savers and investors.
    • 8. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Numbers??? Numbers No of employees Turnover per employee (lakhs) 7 38731 650.23 20 23303 778.0 21 8289 744.8 30 1010 1252.28
    • 9. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Numbers??? Numbers No of employees Turnover per employee (lakhs) State banks 7 38731 650.23 Other Nationalised Banks 20 23303 778.0 Private Banks 21 8289 744.8 Foreign Banks 30 1010 1252.28
    • 10. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Numbers • 41 •6880 •4,740,137 Crores
    • 11. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Opportunities unlimited • “The financial services industry is full of opportunities and varied areas to work in.
    • 12. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 MUTUAL FUND Concept, Organisation Structure, Advantages and Types.
    • 13. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Education Earning Years Post Retirement Years Phase I Phase II Phase III Age- 22 yrs Age- 60 yrs Marriage Child birth Child’s Education Child’s Marriage Housing 22 yrs 38 yrs 10- 20 yrs Human Life Cycle
    • 14. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 60 Retirement 40 Middle Age 27 Young Married 22 Young Independent Individual Investor: Life Stages Earnings Consumption Savings All individuals have a finite period to save for their investment goals
    • 15. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Value of Money over time Impact of inflation on monthly expenses of Rs. 30,000 today Value of Rs. 100,000 over time At inflation of 5% Investors need to beat inflation 30,000 38,288 62,368 79,599 Today 5 years 15 years 20 years 100,000 78,353 48,102 37,689 Today 5 years 15 years 20 years
    • 16. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 OPTIONS FOR INVESTING • Deposit in Bank – SB, RD, FD’s, Locker ;) • Loan a Friend/Relative on Interest • Property Investments • Invest in Bullion - Gold, Silver.. • Investment in Capital Markets - - Direct - Equity Share Markets - Debt & Bonds Market - Indirect - Mutual Funds
    • 17. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44
    • 18. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Pools the savings of a number of investors who share a common financial goal.
    • 19. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 The money thus collected is then invested in capital market instruments such as shares, debentures and other securities.
    • 20. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them.
    • 21. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Mutual Fund Operation
    • 22. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 How Mutual Fund works? A vehicle for investing in portfolio of stocks and bonds
    • 23. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Structure of Mutual Fund SEBI
    • 24. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 MF Structure Open Ended Close Ended Interval Schemes Investment Objective Growth Income Balanced Money Market Others Tax Saving Special Index/ Sector
    • 25. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Advantages of Mutual Funds 1. Professional Management 2. Diversification 3. Convenient Administration 4. Return potential 5. Low cost 6. Liquidity
    • 26. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Advantages of Mutual Funds 1. Transparency 2. Flexibility 3. Choice of schemes 4. Well regulated 5. Tax benefits
    • 27. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 How do I make money from a mutual fund? 1. Capital appreciation: As the value of securities in the fund increases, the fund's unit price will also increase. You can make a profit by selling the units at a price higher than at which you bought 2. Coupon / Dividend Income: Fund will earn interest income from the bonds it holds or will have dividend income from the shares 3. Income Distribution: The fund passes on the profits it has earned in the form of dividends
    • 28. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Terminologies Demystified…  Asset Allocation  Fund Manager  Fund Offer Document  Dividend  Growth
    • 29. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Terminologies Contd… • NAV • Per unit NAV = Net Asset Value No. of Units Outstanding on Valuation date • Entry Load/Front-End Load (0-2.25%) • Exit Load/Back- End Load (0.25-2.25%) • Sale Price/ Offer Price • Re-Purchase Price/ Bid Price • Redemption Price
    • 30. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 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)
    • 31. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 What is a Systematic Investment Plan? An investment plan to invest a fixed amount regularly at a specified frequency say, monthly or quarterly. SIP is a simple method of investing used across the world as a means to creating wealth
    • 32. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44chopra.rajiv@icai.org Benefits of SIP • Regular • Investments happen every month unfailingly • Power Of Compounding • Rupee Cost Averaging • Forced saving • Helps you overpower the temptation to spend fully • Helps you build for the future • Automated • Completely automated process • No hassles of writing cheque every month • Light on the wallet • Investment amount can be so small that you do not even feel the pinch of it being directly deducted, yet the small amount is powerfully working towards your financial security
    • 33. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 SIP: The Power Of Compounding SIP of Rs. 1000 invested per month @ 8% pa till the age of 60. Starting Age Total Amount Saved Value at the age of 60 25 4,20,000 23,09,175 30 3,60,000 15,00,295 35 3,00,000 9,57,367 40 2,40,000 5,92,947 …the sooner you start, makes a difference!
    • 34. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 SIP - How Rupee Cost Averaging helps Month Amount Rising Market Falling Market Volatile Market NAV (Rs) Units Allotted NAV (Rs) Units Allotted NAV (Rs) Units Allotted 1 10000 10 1000.00 10 1000.00 10 1000.00 2 10000 10.5 952.38 9.75 1025.64 10.5 952.38 3 10000 12 833.33 9 1111.11 9 1111.11 4 10000 14 714.29 7 1428.57 11 909.09 5 10000 17 588.24 6.5 1538.46 13 769.23 6 10000 18 555.56 6 1666.67 11.5 869.57 Total 60000 81.50 4643.79 48.25 7770.45 65.00 5611.38 Avg. Purchase NAV (Total of NAVs/No. of investments 13.58 8.04 10.83 Avg. cost per unit (Total Investment /No of units held) 12.92 7.72 10.69
    • 35. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44chopra.rajiv@icai.org Equity Funds • Diversified equity funds • Index funds • Opportunity funds • Mid-cap funds • Equity-linked savings schemes • Sector funds like Auto, Health Care, FMCG etc • Dividend Yield Funds • Others (Exchange traded, Theme, Contra etc)
    • 36. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Mutual Fund: How to buy? Financial Goals Identify ‘What to Buy’ Evaluate Funds from various Mutual Fund Cos. Online Offline Mutual Fund Co. and others Financial Distributor Fill Up Form Attach Relevant Documents Submit Banks, Financial Svc. Cos., Brokers, Individual Agents
    • 37. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Mutual Fund: How to redeem? Fill-up relevant details (You could do partial redemption as well) Sign the Form (All applicants to the units need to sign) Submit (Submit the form to the Branch of the specific Mutual Fund Co.) Money into your Bank Account (Money gets credited to you as per the scheme-specific turnaround time) Choose ‘redemption’ Download Common Transaction Slip (Download from Mutual Fund Company’s website or get it from the branch)
    • 38. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Getting the job “Get jobs that you want not jobs that want you”
    • 39. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 • +91-97-87- 55- 55- 44 • training@edventures1.com • www.edventures1.com
    • 40. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Terminologies Demystified… • Asset Allocation Diversifying investments in different assets such as stocks, bonds, real estate, cash in order to optimize risk. • Fund Manager The individual responsible for making portfolio decision for a mutual fund, in line with fund’s objective. • Fund Offer Document – Document with investment objectives, risk factors, expenses summary, how to invest etc. • Dividend – Profits given to the investor from time to time. • Growth – Profits ploughed back into scheme. This causes the NAV to rise.
    • 41. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 Terminologies Contd… • NAV – Market value of assets of scheme minus its liabilities. • Per unit NAV = Net Asset Value No. of Units Outstanding on Valuation date • Entry Load/Front-End Load (0-2.25%) – The commission charged at the time of buying the fund. – To cover costs for selling, processing • Exit Load/Back- End Load (0.25-2.25%) – The commission or charge paid when an investor exits from a mutual fund. Imposed to discourage withdrawals – May reduce to zero as holding period increases. • Sale Price/ Offer Price – Price you pay to invest in a scheme. May include a sales load. (In this case, sale price is higher than NAV) • Re-Purchase Price/ Bid Price – Price at which close-ended scheme repurchases its units • Redemption Price – Price at which open-ended scheme
    • 42. www.edventures1.com | training@edventures1.com | +91-9787-55-55-44 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)