Understand this PPT : https://youtu.be/uMVI5r32WYQ This presentation answers all the questions related to things to be checked before buying any mutual funds, what are the basic things you should learn befor investing in any mutual fund. For detailed explanation on this slide you can also watch our video on that - https://www.youtube.com/watch?v=uMVI5r32WYQ&list=PL74sgxQAJrUV4-vo8bzmtqiKWTkDusWeL&index=2

1. Beat The Street : MF Series

2. Mutual Fund Series
Beat The Street : MF Series

3. How to select best Mutual
Fund?
MUTUAL FUND SERIES : PART 2

4. Analyse your Risk Profile : Riskometer
Beat The Street : MF Series

5. Pointers to check
Beat The Street : MF Series

6. Investment Objective
 Every mutual fund scheme, irrespective of the category – whether equity or debt
has an investment objective.
 An investor’s financial objective in terms of return, risk and investment horizon
should align with that of the scheme.
 Suppose Investor A is looking for capital appreciation as well as willing to take a
risk over a long term horizon, can invest in Equity Oriented Mutual Fund.
 While Investor B is willing to invest with the least amount of risk involved then
debt oriented mutual fund will serve his objective.
Beat The Street : MF Series

7. How to check?
Beat The Street : MF Series

8. Assessing the Asset Mgt. Co.(AMC)
 AMC is responsible for ruling the mutual fund and making decision that benefits
the investors.
 Investors should pay attention to the assessment of an AMC in terms of
its credibility and transparency, i.e whether they adopt good disclosure norms,
the performance of the AMC across market cycles, its fee and commission
structure among others.
 An investor to check the respective AMC’s CRISIL, Morning Star and value
Research ranking before selecting the right mutual fund.
 AMC can also be assessed by his historical performance as well as its total
AUM(Asset Under Management) as well as Scheme AUM.
Beat The Street : MF Series

9. How to Assess?
Beat The Street : MF Series

10. How to check AUM?
Beat The Street : MF Series

11. Fund’s Performance
 Investors should look for funds which have delivered steady and consistent
performance across market cycles.
 An investor should evaluate a fund in terms of the risk-adjusted returns over a
longer-term period, its portfolio, comparing its performance with its peers in
terms of its returns.
 Though history does not always repeat itself, therefore this should be used in
conjunction with other discussed parameters while selecting a mutual fund.
Beat The Street : MF Series

12. How to check performance?
Beat The Street : MF Series

13. Analyse the sectoral Investment of Fund
Beat The Street : MF Series

14. Also Analyse Top Holding by Scheme
Beat The Street : MF Series

15. Experience of Fund Managers
 Investors are required to check the performance as well as the experience of the
mutual fund managers. Thus, making sure that the money is incompetent and
deserving hands.
 A fund manager with sound proven expertise and ethical history will be an ideal
candidate.
 Check whether manager deliver steady and stable performance?
 Also compare funds performance with the benchmark index as well as sector
index if it is specific to only one sector
 Also check the frequency of portfolio churning.
Beat The Street : MF Series

16. Fund Manager Assessment
Beat The Street : MF Series

17. Expense Ratio
• As mutual funds are professionally managed they entail an annual fee called
Expense Ratio for the same. It is the percentage of assets payable to the fund
manager for his services rendered.
• Expense ratio is a combination of three major types of expenses: Management
fees, Administrative costs and 12-1b distribution fees (fee for advertising and
promotional purposes).
• This ratio has a substantial impact on the net profitability for an investor.
• A lower expense ratio means higher profitability and vice – versa.
Beat The Street : MF Series

18. Lets understand with Example
 Thus, from the above table we can understand that 1% difference in expense ratio
translates to a whopping 10% difference in net profits.
 Though, high expense ratio impacts the fund’s performance, though it is not
always so. In case of actively managed funds the higher return generated by the
fund manager can be justified and adjusted for the fee they charge.
Beat The Street : MF Series

19. How to check ?
Beat The Street : MF Series

20. Entry load and Exit load
 Generally, mutual funds charge a fee from investors while entering (entry load) or
leaving (exit load) a scheme. This fee is generally referred to as a “Load”.
 In India, since August 2009, SEBI has done away with the concept of charging entry
load for mutual funds.
 An exit load is levied when an investor sells the units of a fund within a particular
period, usually within one year from the date of purchase . However, in the case of
open-ended funds; investors have the choice to exit the fund whenever they want.
 The exit load is a miniscule percentage of the NAV. It is deducted from the NAV and
the balance amount is what the investor actually receives if he sells before one year of
investment, no exit load is applicable if sold after one year. This along with expense
ratio drags down the overall investment value. Thus, it is advisable to invest in a fund
with low exit load and wait invested for a longer term.
Beat The Street : MF Series

21. How to check Entry or Exit Load?
Beat The Street : MF Series

22. Tax Implication
 In this regard, investors should be aware of:
i. Whether the scheme is tax free or taxable?
ii. What is the tax rate on short term and long term gains on different
schemes?
iii. What will be the impact of taxation on the overall return?
 Taxation on mutual funds depends upon the type of funds one is investing in and
also on the duration of the fund. The following explains how various mutual fund
schemes are taxed.
 Thus, from the above it is clear that holding on to mutual fund units for a longer
period is more tax efficient. As tax on long term gains is much lower as
compared to short term gains.
Beat The Street : MF Series

23. Taxation of Mutual Fund
Beat The Street : MF Series

24. Next Video :
Types of Equity Funds &
Various Equity Schemes

25. Beat The Street : MF Series

26. Thanks
Beat The Street : MF Series

27. Beat The Street : MF Series