Mutual Funds and It's types

2. The term Mutual implies a group of people
coming together or shared by two or more
people. Funds means pooling of money.
The term Mutual funds suggests a group of
people putting their money together to buy
stocks and bonds or in some cases a
combination of both.
It is nothing but a form of collective
investment.

3. A Mutual fund collects the savings from small
investors, invests them, earns returns on
them, attempts to make it grow and agrees to
pay the investors/unit holders cash on
demand for the current value of their
investments.
It is managed by professional managers of
mutual funds organisations in such a way that
the risk is minimised and steady returns is
ensured.

6. Equity instruments like shares are only a part
of securities held by Mutual Funds. Mutual
fund also invest in debt securities which are
relatively much safer.
Mutual funds are the best solution for those
who have a very little or no knowledge about
the securities market and for those who want
to manage risks and get returns.

7. • First phase (1964-1987)
 Unit Trust of India (UTI) was established in 1963.
 It was set up by the Reserve Bank of India and functioned
under its Regulatory and administrative control.
 In 1978 UTI was de-linked from the RBI and the Industrial
Development Bank of India (IDBI) took over.
 The first scheme launched by UTI was the Unit Scheme 1964.
• Second Phase (1987-1993)
 Non-UTI, public sector mutual funds entered the market in
1987. These were set up by public sector banks, LIC and GIC.
o SBI Mutual Fund was the first non-UTI Mutual Fund
established in June 1987 It was followed by Canada bank
Mutual Fund in Dec ’87.
 By 1993, the mutual fund industry increases its assets under
management to Rs 47,004 crores.

8. • Third Phase (1993-2003)
 1993 ushered in private sector mutual funds for the first time.
 This phase also gave Indian investors a wider choice of funds.
 Kothari Pioneer (currently merged with Franklin Templeton)
was the first private player registered in 1993.
 The SEBI (Mutual Fund) Regulations of 1993 were replaced by
a comprehensive set of regulations in 1996.
• Fourth Phase (since 2003)
 UTI was bifurcated into two separate entities.
 The UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC.

9. On the basis of
Investment
Structure

10. Equity Mutual
Fund
Debt Mutual Fund
Hybrid Mutual
Fund

11. Equity Mutual Fund
Large cap Fund (Market capitalisation is above
100000 crores) E.g. TCS,L & T, Reliance industries
Mid cap Fund (Market capitalisation is in
between 5000-100000 crores)
Small Cap Fund (Market capitalisation is below
5000 crores)
Sector Fund
Diversified fund
Dividend Yield Fund
ELSS (Equity linked savings scheme)
Thematic Fund

12. Debt Mutual Fund
(Invests in Debentures,Bonds,certificate of deposits)
Gilt Fund Junk Bond
Schemes
Fixed Maturity
Plans
Liquid Schemes

13. Hybrid Mutual Fund
• Monthly Income Fund:
60%-90% Remaining
Debt Instruments Equity
• Balanced Fund:
65%-85% Remaining
Equity Debt Instruments
• Arbitrage Fund:
65% Remaining
Equity Debt Instruments

14. On the basis of Structure
Open Ended Funds-units can
be bought and sold at any
point of time
Interval Funds-a combination
of both
Closed Ended Funds-Units
can be purchased only during
NFO (New Fund offer)

15. Management of funds:
Actively Managed Fund
Passively Managed Fund
Others Funds:
International funds
Real Estate funds
Gold Funds
Exchange Traded Funds

16. SIP stands for Systematic Investment Planning.
It allows you to invest systematically i.e. weekly,
monthly or quarterly based on your preference.
With the help of SIPs, you are investing in mutual funds.
Two Tools of investing in Mutual Funds
 Lump sum
 Systematic Investment Plan (SIP)

18. • This is a Large Cap Equity oriented Mutual Fund
launched on January 1, 2013. It is a fund with
moderately high risk and has given a return of 18.03%
since its launch.
• Returns per annum over the years from this fund are :
Duration Returns
1 year 15.01%
3 years 10.64%
5 years 20.68%

19. • This is a mid-cap equity oriented
mutual fund launched on January 1, 2013.
• It is a fund with moderately high risk and has given a
return of 23.40% since its launch.
• Returns per annum over the years from this fund are:
Duration Returns
1 year 16.45%
3 years 19.82%
5 years 32.34%

20. • This is a Small Cap Equity Oriented Mutual Fund launched
on January 1, 2013. It is a fund with high risk and has given
a return of 23.99% since its launch.
• Returns per annum over the years from this fund are:
Duration Returns
1 year 35.28%
3 years 24.84%
5 years 26.79%

21. • This is a Multi Cap Equity Oriented Mutual
Fund launched on April 28, 2014.
• It is a fund with moderately high risk and has
given a return of 29.80 % since its launch.
• Returns per annum over the years from this
fund are:
Duration Returns
1 year 16.51%
3 years 18.96%
5 years NA

22. • This is a Hybrid Equity Oriented Mutual Fund launched in
January 9.2013.
• It is a fund with a moderately high risk and has given a
return of 20.25% since its launch.
• Returns per annum over the years from this fund are:
Duration Returns
1 year 15.27%
3 years 15.64%
5 years 22.50%