Introduction to Mutual Fund in India

1. MUTUAL
FUND
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2. INTRODUCTION
 1,44,000 CRORE INDUSTRY TODAY THAT SELLS
DREAMS
 NO, ITS NOT BOLLYWOOD
 ITS DALAL STREET- IN PARTICULAR: THE MUTUAL FUND
INDUSTRY- THE FIRST CHOICE OF GENERATION NEXT
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3. COLLECTIVE POOLED INVESTMENT
YOU
I
MONEY TO
INVEST
WHERE?
SMART PERSON
NAME
MANMOHAN
RETURN
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4. WHAT IS MUTUAL FUND
AMAR
FUND
MANAGER
AKBAR
ANTHONY
MUTUAL
FUND
STOCKS
BONDS
DERIVATIVES
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5. FLOW CHART DESCRIBE WORKING OF M.F
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6. HISTORY OF M.F IN INDIA
 PHASE 1
 PHASE 2
 PHASE 3
 PHASE 4
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7. FIRST PHASE- 1964-1987
 UNIT TRUST OF INDIA
 1N 1963
 SCHEME UNIT 64
 NEXT 24 YEARS WAS SOLE PLAYER
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8. SECOND PHASE – 1987-1993
 IN 1987
o OPEN TO PUBLIC SECTOR
o STATE BANK OF INDIA WAS FIRST
o PNB, BOI, LIC FOLLOWS NEXT
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9. THIRD PHASE -1993-1994
 IN 1993
 ENTRY OF PRIVATE SECTOR FUNDS
 KOTHARI PIONEER (FRANKLIN TEMPLETON) WAS
FIRST
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10. FOURTH PHASE – 1994- TILL NOW
 IN 1994
 ENTRY OF FOREIGN MUTUAL FUNDS
 MORGAN STANLEY WAS FIRST
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11. WHAT ARE THE ADVANTAGES
 PROFESSIONAL MANAGEMENT
 DIVERSIFICATION
 MONEY AT CALL
 DIVIDEND
 MINIMUM INVESTMENT
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12. STATUTORY WARNING
 NO GUARANTEE OF RETURN
 DIVERSIFICATION
 LOAD OF COST
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13. BASIC TERMINOLOGIES

NET ASSET VALUE
 COST INVOLVED
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14. NAV
• 10 PEOPLE
• 1 LACS EACH
10 LACS RS
EVERYONE
GETS 10000
UNITS
FUND MANAGER
INVESTS
• IN 1 YEAR
• GROW 10L TO
15 L
• MANAGER
FEES 2% OF
ASSETS=
30000/AMT. LEFT
14.70L
NO. OF UNITS
10000
• NEW BUYER
WANTS TO
BUY FOR 1 LAC
NO. OF UNITS
100000/14.7=
6802.7211 UNITS
LESSER UNITS
NAV P.U 14.7
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15. LOADS
 ENTRY LOAD (NOW BANNED)
o e.g. 2% ENTRY LOAD
o FOR 100000 INVESTMENT, ONLY 98000 INVESTED
o EXIT LOAD (TO PREVENT REPEATED EXITS)
o MIGHT VANISH AFTER A PERIOD
o 30 DAYS, 1-2 YEARS
o COMMISSIONS TO DISTRIBUTORS
(INTERMEDIARIES)
o FROM MANAGEMENT FEES
o OR EXIT LOAD
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16.  AMC CHARGES (FOR MANAGING MONEY)
 LIMITED TO 2.5% OF “ASSET UNDER
MANAGEMENT”
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17. THINGS TO WATCH BEFORE INVESTING
 EXPENSE RATIO (< 1%)
 LOAD (No Penalty for early withdrawal)
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19. 12/20/2013

20. CLASSIFICATION
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21. SCHEMES ACCORDING TO MATURITY
PERIOD
OPEN ENDED SCHEME
 AVAILABLE FOR SUBSCRIPTION & REPURCHASE
ON A CONTINUOUS BASIS
 THESE FUNDS DO NOT HAVE FIXED MATURITY
PERIOD
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22. CLOSE ENDED SCHEME
 OPEN FOR SUBSCRIPTION ONLY FOR SPECIFIED
PERIOD
 HAVE STIPULATED MATURITY PERIOD e.g:- 3- 5
YEARS
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23. SCHEME ACCORDING TO INVESTMENT
OBJECTIVE
GROWTH/ EQUITY
ORIENTED SCHEME
 AIM= PROVIDE CAPITAL APPRECIATION
OVER LONG PERIOD
 RISK= HIGH
 OPTIONS TO INVESTOR= DIVIDEND/
CAPITAL APPRECIATION OPTION
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24. EQUITY/GROWTH FUND
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25. INCOME/ DEBT ORIENTED FUND
 AIM= PROVIDE REGULAR & STEDY INCOME
 RISK= LESS
 INVEST= IN FIXED INCOME SECURITIES
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26. BALANCED FUND
 AIM= PROVIDE BOTH GROWTH & REGULAR INCOME
 INVEST= BOTH IN EQUITES & FIXED INCOME
SECURITIES
 RISK= MODERATE
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27. MONEY MARKET
 AIM= PROVIDING EASY LIQUIDITY, PRESERVATION
OF CAPITAL & MODERATE INCOME
 INVEST= IN SAFER S.T INVESTMENTS e.g.
COMMERCIAL PAPERS, GOVT SECURITIES
 GOOD= FOR SHORT PERIODS
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28. GILT FUNDS
 INVEST = EXCLUSIVELY IN GOVT SECURITIES
 RISK= ZERO
INDEX FUNDS
 INVEST= SECURITIES IN SAME WEIGHTAGE
COMPRISING OF AN INDEX
 RISK= RISE/FALL= DEPEND UPON INDEX
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29. VARIOUS M.F e.g. IN INDIA





GROWTH
HDFC GROWTH
INCOME
TEMPLETON INDIA
BALANCED
PRUDENTIAL INDIA
OPEN ENDED
RELIANCE INCOME
CLOSE ENDE
RELIANCE FIXED
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