The document provides a history of mutual funds in India in 4 phases from 1964 to 1996. It begins with the establishment of UTI in 1963, which was given a monopoly until 1986 when the first equity fund was launched. In phase 2 from 1987-1993, other public sector mutual funds were established. Phase 3 from 1993-1996 introduced private sector funds. Phase 4 saw investor friendly regulatory measures by SEBI. The document then provides definitions of mutual funds, reasons for investing through them, different types of funds categorized by asset class, structure and investment, and ways of investing through lump sums or SIP. It outlines the structure of a mutual fund including sponsors, trustees, AMC, custodian and depositories. Distribution channels and advantages

2. HISTORY OF MF’s
History of MF’s can be discussed in two parts :
1) Emergence through public players; and
2) Emergence through private players

3. History of Mutual Funds
Phase I – 1964 – 87: In 1963, UTI was set up by Parliament under UTI act and
given a monopoly. The first equity fund was launched in 1986.
Phase II – 1987 – 93: Non-UTI, Public Sector mutual funds.
Like-
SBI Mutual Fund, Canbank Mutual Fund,
LIC Mutual Fund,
Indian Bank Mutual Fund,
GIC Mutual Fund and PNB Mutual Fund.

4. History of Mutual Funds
Phase III – 1993 – 96: Introducing private sector funds. As well as open-end
funds.
Phase IV – 1996: Investor friendly regulatory measures Action taken by SEBI to
protect the investor, and To enhance investor’s returns through tax
benefits.

5. So what exactly are Mutual Funds?
A mutual fund is a type of financial vehicle
made up of a pool of money collected from
many investors to invest in securities such as
stocks, bonds, money market instruments,
and other assets.
Mutual funds are operated by
professional money managers, who allocate
the fund's assets and attempt to produce
capital gains or income for the fund's
investors.

6. Why invest through
Mutual funds?

7. Mutual Funds are good investment options
offering higher return & safety
1.Higher Returns
2.Professionally managed
3.Disciplined Investing.
4.Less/No Lock-in
5.Diversification
6.Convenience

8. Asset classes
Gold Debt Equity
Routes of
investment
Physical gold / Gold bonds Corporate Bonds/Fixed Deposit Direct equity
Drawbacks Physical Gold - Risk of Safety
and Purity
Gold Bonds are limited to lock-
in-period of 5 years means no
liquidity
- Low Liquidity
- No Tax Benefits
- Penalty for withdrawing before
maturity
- Requires experience
and time
- Relatively riskier
Mutual Fund Vs Other Asset Classes
Mutual fund
route
Gold ETF and Gold Fund Debt Mutual fund Equity Mutual fund
Benefits of
investing in
Mutual funds
- Buying limits –
Min. 1 unit through stock
exchange and no upper limit
- High liquidity
- No lockin
- High liquidity
- Tax efficient returns if held for 3
years and above
- Different schemes for different
investment horizon
- Professional
management
- Diversification/ robust
risk management
- High liquidity
Here’s how mutual fund route can help overcome the above drawbacks

9. Mutual funds have outperformed all other
asset classes in the last 15 years

10. Types of Mutual Funds

11. 1. Based
on asset
class
Equity Funds Debt Funds
Money
Market Funds
Hybrid Funds Index Funds
Tax-
Saving/ELSS
Funds
Fundsof
Funds
Types of Mutual Funds : Based
on asset

12. Equity Funds
Aims to generate higher returns by investing in the
shares of companies of different capitalization.
They generate higher returns than debt funds or
fixed deposits.
Invests in fixed-interest generating securities like
corporate bonds, government securities, treasury bills,
commercial paper and other money market instruments.
The basic reason behind investing in debt funds is to earn
interest income and capita appreciation.
Debt Funds

13. They are short run liquid investments which invests in high
quality money market instruments. It provides investors
with a reasonable returns along with good liquidity over a
period of up to 1 year.
Invests in both debt instruments and equities to achieve
maximum diversification and assured returns. The choice
of hybrid funds depends on your risk preferences and
investment objective.
Market Funds
Hybrid Funds

14. Many investors are aware of the benefits of diversifying
their portfolio across assets. Index funds often catch their
eyes in this search as they refer to funds that invests in a
wider market index-like the Sensex or Nifty.
An Equity-linked Savings Scheme is a type of equity fund
and the only mutual fund which qualifies for a tax deduction
upto Rs.1.5 lakh under section 80C of the Income Tax Act.
Index Funds
ELSS Funds

15. Funds of Funds
It is a mutual fund scheme that invests in other
mutual fund schemes. In this, fund manager holds
portfolio of other mutual funds instead of directly
investing in equities or bonds.

16. 2. Based on
Structure
Open-Ended
Funds
Close-Ended
Funds
Types of Mutual Funds : Based
on Structure

17. Open-end fund is a collective investment scheme that can
issue and redeem shares at any time. An investor will
generally purchase shares in the fund directly from the
fund itself, rather than from the existing shareholders.
A closed-end fund or closed-ended fund is a collective
investment model based on issuing a fixed number of
shares which are not redeemable from the fund.
Open-end Funds
Closed-end Funds

18. 3. Based on
Investment
Growth
Funds
Income
Funds
Liquid
Funds
Types of Mutual Funds : Based
on Investment

19. A mutual fund that invests in growth stocks (an emerging
company) to attain maximum capital appreciation is a
growth mutual fund. This is why they seek out companies
with proven track record of great revenue growth or
younger companies with potential. On the flip side, the
risk is also on the higher side.
Income funds belong to the family of debt funds as
they mainly invest in government bonds/securities and
money market instruments like a certificate of deposits.
Growth Funds
Income Funds

20. A Liquid fund is a type of debt fund which invests
in debt and money market instruments with a
maturity of up to 91 days. Leading examples of
such short-term investments include government
securities, treasury bills etc.
Liquid Funds

21. Ways of Investing in MFs:
Lumpsum ,SIP

22. Lumpsum
One time bulk investment
Investors has bulk amount
in hand
Timing the market is
important
Buying low and selling high
could yield great profits.
A lump sum amount is defined as a single complete sum of
money. A lump sum investment is of the entire amount at one
go.

23. SYSTEMATIC INVESTMENT PLAN (SIP)
Systematic Investment Plan, commonly referred to as SIP, allows you to
invest regularly a fixed sum in your favorite mutual fund scheme/s. In
SIP, a fixed amount is deducted from your savings account every month
and directed towards the mutual fund you choose to invest in.
Makes market time irrelevant
Enables Rupee-cost
averaging
Benefits from Power of
Compounding
Lighter on Wallet

24. PARAMETER SIP LUMP SUM
INVESTMENT
Investment Regular One time
Falling NAV More recommended
because of cost of
averaging
Less recommended
Required risk
appetite
Low to moderate Moderate to high
Cost of investment Less due to rupee cost
averaging
High as this is one
time large investment
Flexibility of
investment
High Low
Horizon Ideal for short term and
long term
Ideal for long term
SIP VS LUMPSUM

25. Fund Structure
Fund Sponsor
Trustees
Asset Management
Company
Depository
Custodian
Agent

26. Fund Sponsor
The Fund Sponsor
• Any person or corporate body that establishes the Fund and registers it
with SEBI.
• Form a Trust and appoint a Board of Trustees.
• Appoints Custodian and Asset Management Company either directly or
through Trust, in accordance with SEBI regulations.
SEBI regulations also define that a sponsor must contribute at least 40% to the
net worth of the asset management company.

27. Trustees
Trustees
•Created through a document called the Trust Deed that is executed by the
Fund Sponsor and registered with SEBI.
•The Trust-the mutual fund may be managed by a Board of Trustees- a body of
individuals or a Trust Company- a corporate body.
• Protector of unit holders interests.
•2/3 of the trustees shall be independent persons and shall not be
associated with the sponsors.

28. Asset Management Company
Obligation of Asset Management Company:







Float investment schemes only after receiving prior approval from the Trustees and
SEBI.
Send quarterly reports to Trustees.
Make the required disclosures to the investors in areas such as calculation of NAV
and repurchase price.
Must maintain a net worth of at least Rs. 10 crores at all times.
Will not purchase or sell securities through any broker, which is average of 5% or
more of the aggregate purchases and sale of securities made by the mutual fund in all
its schemes.
AMC cannot act as a trustee of any other mutual fund.
Do not undertake any other activity conflicting with managing the fund.

29. Structure of Mutual Funds
Custodian
•Has the responsibility of physical handling and safe keeping of the securities.
•Should be independent of the sponsors and registered with SEBI.
Depositories
•Indian capital markets are moving away from physical certificates for
securities to ‘dematerialized’ form with a Depository.
•Will hold the dematerialized security holdings of the Mutual Fund.

30. Distribution Channels
Mutual Funds are primary vehicles for large collective investments, working on the principle
of pooling funds.
A substantial portion of the investments happen at the retail level.
Agents and distributors are a vital link between the mutual funds and investors.
Agents
-Is a broker between the fund and the investor and acts on behalf of the principal.
-He is not exclusive to the fund and also sells other financial services. This in a way helps him
to act as a financial advisor.
Distribution Companies
- Is a company which sells mutual funds on behalf of the fund.
- It has several employees or sub-broker under it.
-It manages distribution for several funds and receives commission for its services.

31. Advantages of Mutual Funds
•Portfolio diversification: It enables him to hold a diversified investment portfolio even with a
small amount of investment like Rs. 2000/-.
•Professional management: The investment management skills, along with the needed
research into available investment options, ensure a much better return as compared to what an
investor can manage on his own.
•Reduction/Diversification of Risks: The potential losses are also shared with other
investors.
•Reduction of transaction costs: The investor has the benefit of economies of scale; the funds
pay lesser costs because of larger volumes and it is passed on to the investors.
•Wide Choice to suit risk-return profile: Investors can chose the fund based on their risk
tolerance and expected returns.

32. Advantages of Mutual Funds
•Liquidity: Investors may be unable to sell shares directly, easily and quickly. When they invest in
mutual funds, they can cash their investment any time by selling the units to the fund if it is open-
ended and get the intrinsic value. Investors can sell the units in the market if it is closed- ended
fund.
•Convenience and Flexibility: Investors can easily transfer their holdings from one scheme to
other, get updated market information and so on. Funds also offer additional benefits like regular
investment and regular withdrawal options.
•Transparency: Fund gives regular information to its investors on the value of the investments in
addition to disclosure of portfolio held by their scheme, the proportion invested in each class of
assets and the fund manager's investment strategy and outlook

33. Disadvantages of Mutual Funds
•No control over costs: The investor pays investment management fees as long as he
remains with the fund, even while the value of his investments are declining. He also
pays for funds distribution charges which he would not incur in direct investments.
•No tailor-made portfolios: The very high net-worth individuals or large corporate
investors may find this to be a constraint as they will not be able to build their own portfolio
of shares, bonds and other securities.
•Managing a portfolio of funds: Availability of a large number of funds can actually
mean too much choice for the investor. So, he may again need advice on how to select
a fund to achieve his objectives.
•Delay in redemption: It takes 3-6 days for redemption of the units and the money to flow
back into the investor’s account.

34. Mutual Funds Prove Best!
While instruments like shares give high returns at the cost of high risk,
instruments like NSC and bank deposits give lower returns and higher safety to
the investor.
Mutual Funds aim to strike a balance between risk and return and give
the best of both to the investor.

35. Top mutual funds

36. Top performing AMCs

37. Axis Blue Chip Fund
Launched on : 05 Jan 2010
Category : India fund large cap
AUM : ~ Rs 5,700 cr .*
Return : 3 year : 15.43% 5 year : 11.71%*
Invests in : large cap companies
Risk : Average
* as on Jul 2019

38. ICICI Prudential Blue Chip Fund
Launched on : May 23,2008
Category : India fund large cap
AUM : ~ Rs 22,000 cr .*
Return : 3 year : 12.79% 5 year : 11.14%*
Invests in : large cap companies
Risk : low
* as on Jul 2019

39. Mirae Asset Emerging Blue Chip Fund
Launched on : July 09,2010
Category : Equity-large and midcap
AUM : ~ Rs 7,600 cr .*
Return : 3 year : 17.16% 5 year : 19.66%*
Invests in : large and midcap companies
Risk : low
* as on Jul 2019

40. Kotak Standard Midcap Fund
Launched on : Sep 11,2009
Category : Equity-multicap
AUM : ~ Rs 26,000 cr .*
Return : 3 year : 14.07% 5 year : 14.73%*
Invests in : Multicap companies
Risk : Below average
* as on Jul 2019

41. Kotak Emerging Equity Scheme
Launched on : Mar 30,2007
Category : Equity-midcap
AUM : ~ Rs 4,300 cr .*
Return : 3 year : 10.35% 5 year : 15.57%*
Invests in : Midcap companies
Risk : Below average
* as on Jul 2019

42. L&T Midcap Fund
Launched on : Sep 11,2009
Category : Equity-midcap
AUM : ~ Rs 5,000 cr .*
Return : 3 year : 12.00% 5 year : 14.61%*
Invests in : Midcap companies
Risk : Below average
* as on Jul 2019

43. HDFC Small Cap fund
Launched on : Apr 03,2008
Category : Equity: smallcap
AUM : ~ Rs 8,400 cr .*
Return : 3 year : 13.89% 5 year : 14.27%*
Invests in : Smallcap companies
Risk : Below average
* as on Jul 2019

44. Aditya Birla Sun Life Tax Relief 96
Launched on : March 06,2008
Category : India fund ELSS (Tax savings)
AUM : ~ 8,900 cr*.
Return : 3 year -11.16%, 5 year -13.32%*
Invests in : Small cap ,midcap & large cap
Risk : Average
* as on Jul 2019

45. Axis Long Term Equity Fund
Launched on : Dec 29,2009
Category : Equity - ELSS
AUM : ~ Rs 19,800 cr.*
Return: 3 year : 13.94% 5 year : 14.40%*
Invests in : Equity and equity related
instruments
Risk : Low * as on Jul 2019