HISTORICAL EVOLUTION
•First Phase – 1964-87 -Unit Trust of India (UTI) was established on
1963 by an Act of Parliament. . ...
•Third Phase – 1993-2003 (Entry of Private Sector Funds)

Kothari Pioneer (now merged with Franklin Templeton) was
the fir...
 One is the Specified Undertaking of the Unit Trust of India with assets

under management of Rs.29, 835 crores as at the...
ADVANTAGES


Professional Management



Diversification



Return potential



Low cost



Liquidity



Transparency...
ORGANIZATION OF MUTUAL FUND
Type of
Mutual Fund
Schemes

Structure

Investment
Objective

Special
Schemes

Open Ended
Funds

Growth Funds

Industry
Sp...
SCHEMES ACCORDING TO INVESTMENT
OBJECTIVE
 Growth / Equity Oriented Scheme
 Income / Debt Oriented Scheme
 Balanced Fun...
LOAD OR NO LOAD FUND
Mutual funds incur certain expenses such as brokerage, marketing
expenses, and communication expenses...
STRENGTHS
 Liquidity
 Transparency
 Affordability
 Diversification
 Government support by
way of tax concessions
WEAKNESS

 Poor participation of retail investors
 Distribution is confined only to metro
cities
 Cost pressures
 Lack...
OPPORTUNITIES

 Huge untapped market.
 High level of savings among
people.

 Using on online mode of trading
system.
THREATS
 Increasing competition.
 High level of volatility in stock
market.

 Possibility of more stringent
regulations...
Name of the Companies
Reliance

Birla Sunlife

State bank of India(SBI)

HSBC

Tata

Edelweiss

HDFC

JP Morgan

ABN Amro
...
SEBI GUIDELINES FOR MUTUAL FUNDS
Unit Trust of India was the first mutual fund set up in India in the year 1963. In early
...
Governed by SEBI (Mutual Fund) Regulation 1996
All MFs registered with it, constituted as trusts ( under
Indian Trusts Act...
ASSOCIATION OF MUTUAL FUNDS IN INDIA
 Association of Mutual Funds in India (AMFI) was incorporated on
22nd August, 1995.
...
OBJECTIVES OF AMFI
 AMFI interacts with SEBI and works according to SEBIs guidelines
in the mutual fund industry.
 To re...
 AMFI undertakes all India awareness programme for investors in
order to promote proper understanding of the concept and ...
10 REASONS TO INVEST IN MUTUAL FUNDS












Expert on your side
Limited risk
More for less
Easy investing
C...
QUESTIONS???
THANK YOU!!!!!
Mutual funds
Mutual funds
Mutual funds
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Mutual funds

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Mutual funds

  1. 1. HISTORICAL EVOLUTION •First Phase – 1964-87 -Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. . The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6, 700 crores of assets under management. •Second Phase – 1987-1993 (Entry of Public Sector Funds) -SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92)
  2. 2. •Third Phase – 1993-2003 (Entry of Private Sector Funds) Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1, 21,805 crores. •Fourth Phase – since February 2003 -In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities.
  3. 3.  One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29, 835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations  The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations
  4. 4. ADVANTAGES  Professional Management  Diversification  Return potential  Low cost  Liquidity  Transparency  Flexibility  Choice of schemes  Well regulated  Tax benefits
  5. 5. ORGANIZATION OF MUTUAL FUND
  6. 6. Type of Mutual Fund Schemes Structure Investment Objective Special Schemes Open Ended Funds Growth Funds Industry Specific Schemes Close Ended Funds Income Funds Index Schemes Balanced Funds NOTE: SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.
  7. 7. SCHEMES ACCORDING TO INVESTMENT OBJECTIVE  Growth / Equity Oriented Scheme  Income / Debt Oriented Scheme  Balanced Fund  Money Market or Liquid Fund  Fund of funds  Index Funds  Sector specific funds/schemes  Tax Saving Schemes
  8. 8. LOAD OR NO LOAD FUND Mutual funds incur certain expenses such as brokerage, marketing expenses, and communication expenses. These expenses are known as ‘load’. A Load Fund is one that charges a percentage of NAV for entry or exit. That is, each time one buys or sells units in the fund, a charge will be payable. This charge is used by the mutual fund for marketing and distribution expenses. Suppose the NAV per unit is Rs.10. If the entry as well as exit load charged is 1%, then the investors who buy would be required to pay Rs.10.10 The investors should take the loads into consideration while making investment as these affect their yields/returns. A no-load fund is one that does not charge for entry or exit. It means the investors can enter the fund/scheme at NAV and no additional charges are payable on purchase or sale of units.
  9. 9. STRENGTHS  Liquidity  Transparency  Affordability  Diversification  Government support by way of tax concessions
  10. 10. WEAKNESS  Poor participation of retail investors  Distribution is confined only to metro cities  Cost pressures  Lack of financial literacy
  11. 11. OPPORTUNITIES  Huge untapped market.  High level of savings among people.  Using on online mode of trading system.
  12. 12. THREATS  Increasing competition.  High level of volatility in stock market.  Possibility of more stringent regulations by SEBI, RBI, AMFI in future.
  13. 13. Name of the Companies Reliance Birla Sunlife State bank of India(SBI) HSBC Tata Edelweiss HDFC JP Morgan ABN Amro Kotak Mahindra bank AIG JM financial Bank of Baroda Goldman Sachs Canara bank UTI(Unit Trust of India) ICICI Standard Chartard DBS Cholamandalam AMC Fidelity DSP Merrill lynch Franklin Templeton
  14. 14. SEBI GUIDELINES FOR MUTUAL FUNDS Unit Trust of India was the first mutual fund set up in India in the year 1963. In early 1990s, Government allowed public sector banks and institutions to set up mutual funds. In the year 1992, Securities and exchange Board of India (SEBI) Act was passed. The objectives of SEBI are – to protect the interest of investors in securities and to promote the development of and to regulate the securities market. As far as mutual funds are concerned, SEBI formulates policies and regulates the mutual funds to protect the interest of the investors. SEBI notified regulations for the mutual funds in 1993. Thereafter, mutual funds sponsored by private sector entities were allowed to enter the capital market. The regulations were fully revised in 1996 and have been amended thereafter from time to time. SEBI has also issued guidelines to the mutual funds from time to time to protect the interests of investors. All mutual funds whether promoted by public sector or private sector entities including those promoted by foreign entities are governed by the same set of Regulations. There is no distinction in regulatory requirements for these mutual funds and all are subject to monitoring and inspections by SEBI. The risks associated with the schemes launched by the mutual funds sponsored by these entities are of similar type.
  15. 15. 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
  16. 16. ASSOCIATION OF MUTUAL FUNDS IN INDIA  Association of Mutual Funds in India (AMFI) was incorporated on 22nd August, 1995.  (AMFI) modeled on the lines of a Self Regulating Organization (SRO) with a view to 'promoting and protecting the interest of mutual funds and their unit-holders, increasing public awareness of mutual funds, and serving the investor’s interest by defining and maintaining high ethical and professional standards in the mutual funds industry'  Association of Mutual Funds India has brought down the Indian mutual fund industry to a professional and healthy market with ethical lines enhancing and maintaining standards.  It follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holders.
  17. 17. OBJECTIVES OF AMFI  AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund industry.  To recommend and promote best business practices and code of conduct to be followed by members and others engaged in the activities of mutual fund and asset management including agencies connected or involved in the field of capital markets and financial services.  Association of Mutual Fund of India do represent the Government of India, the Reserve Bank of India and other related bodies on matters relating to the Mutual Fund Industry.  It develops a team of well qualified and trained Agent distributors. It implements a programme of training and certification for all intermediaries and other engaged in the mutual fund industry.
  18. 18.  AMFI undertakes all India awareness programme for investors in order to promote proper understanding of the concept and working of mutual funds.  Association of mutual fund of India also disseminate information on Mutual Fund Industry and undertakes studies and research either directly or in association with other bodies.
  19. 19. 10 REASONS TO INVEST IN MUTUAL FUNDS           Expert on your side Limited risk More for less Easy investing Convenience Investor protection. Quick access to your money Transparency Low transaction costs Tax benefits
  20. 20. QUESTIONS???
  21. 21. THANK YOU!!!!!

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