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Invest in Equity Markets through Mutual Funds
The smarter way to invest
Investment in Equity Markets through Mutual Funds is getting popular amongst investors.
Like most other investors, you may also have the following queries:
There are certain myths regarding
investment in Equity Markets through
Mutual Funds. Let’s demystify those!
Why should you invest in Equity
Markets through Mutual Funds?
How should you invest in Equity
Mutual Funds?
How should you choose the right
Equity Mutual Fund scheme for
investment?
Let us answer these, one by one
How to invest in Equity Mutual
Funds through ICICIdirect.com?
What is a Mutual Fund?
Investments in direct equity requires
Constant monitoring and knowing the right time to enter & exit
Expertise to pick the right stock
So let’s start with understanding - What is a Mutual Fund and how does it work?
A Mutual Fund is an investment vehicle that pools money from investors to invest in securities like
stocks and is professionally managed by experts called Fund Managers.
Investment in Equity Markets through Mutual Funds helps you do away with the above
Access to lot of information for making the right sector and asset allocation
Equity Mutual Fund is an easy and convenient way to invest in Equity markets.
Liquidity
Higher Return Potential
Click to view advantages in details.
Advantages
Professional
Management
Diversification
Lower cost
of investing
Investment
Choice
Convenient
Investment
Options
Liquidity
Advantages of investing in Equity Markets
through Mutual Funds:
How do Equity Mutual Funds work?
Why should you invest in Equity Markets
through Mutual Funds?
Investors
Fund House
Stocks
Returns
Pool their
money with
Fund Manager
invests in
Generates
Passed
back to
Mutual Funds are a great way to invest in equity markets. Equity Mutual Funds have consistently out-
performed their benchmarks.
91.70%
98.30%97.80%
96.00%
98.00%97.50%
88.00%
90.00%
92.00%
94.00%
96.00%
98.00%
100.00%
1 Year 3 Years 5 Years 10 Years 15 Years 20 Years
% corpus of Equity Funds* outperforming Sensex
As shown above Equity Mutual Funds have consistently performed better than market(Sensex)
Above 90% of the amount invested of Equity Funds* have out-performed their benchmarks
consistently over time-frame.
Source: Accord FinTech, ICICIdirect Research, Data as on May-end 2016
* Equity Large Cap Funds
Why should you invest in Equity Markets
through Mutual Funds?
Demystifying - Myths around Mutual Fund investments
Mutual funds require large amount of investment
Investment through a Systematic Investment Plan(SIP) can be started with an amount as low as Rs
1000 per month and in case of Lump Sum with Rs 5000.
One needs to invest in several mutual funds for proper diversification
Mutual funds, by nature offers diversification. So holding a large number of funds does not
necessarily offer you better diversification.
Mutual Funds are not transparent
Fund Houses are obliged to follow strict regulations by SEBI designed to protect investors. All
operations are also regularly monitored by the SEBI ensuring high level of transparency.
Mutual Funds are not exciting as stocks
Equity Mutual Funds are designed to deliver superior returns in the long term. Historically, over the
long term Equity Mutual Funds have consistently delivered higher returns than Sensex (market).
Investment in Equity Mutual Fund can be done in either of the following ways:
How should you invest in
Equity Mutual Funds?
You want to invest fixed amounts in a disciplined way on a regular basis.
Lump Sum Systematic Investment Plan(SIP)
You should invest when you want to
invest once.
You should invest when you want to
invest on a regular basis.
SIP is the preferred choice for long-term wealth creation by majority of our customers
How should you invest in
Equity Mutual Funds?
59.7%
40.3%
For other reasons
For long term wealth creation
Source: ICICIdirect Survey
Why do you invest in Equity Mutual Funds?
Majority of our customers prefer investing in Equity Mutual Funds for long term wealth creation.
3 out of our 5 customers prefer to
invest in Equity Mutual Funds for
long term wealth creation.
SIP is an excellent tool for long term
wealth creation.
Let us understand the
benefits of investing through
SIP.
Through SIP Through other modes
49.1%
50.9%
Out of these customers, every
second customer prefers to invest
through Systematic Investment Plan.
Why should you invest through SIPs?
Advantages of investing through a SIP
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16
Average Cost per Unit through SIP
NAV movements of a scheme
Average Cost per Unit through SIP is always at a lower level as you get
more units at lower NAV and less units at higher NAV.
Do away with the worry to time the market
Disciplined approach of investment
SIP inculcates discipline in your investments – i.e. it makes you invest regularly. Disciplined approach in your
investments helps in wealth creation over long term. For example, a monthly SIP of ₹ 5,000 per month growing at
10% p.a., 15% p.a. and 20% p.a. would grow to:
Period (in years)
Principal
Invested
(₹ lakhs)
Final Amount
(₹ lakhs)
@ 10% p.a.
Final Amount
(₹ lakhs)
@ 15% p.a.
Final Amount
(₹ lakhs)
@ 20% p.a.
15 9.00 20.90 33.84 56.71
20 12.00 38.28 75.80 158.07
25 15.00 66.89 164.20 431.34
Assumed returns for illustration purposes only, Systematic Investment Plan at beginning of the month.
Why should you invest through SIPs?
Advantages of investing through a SIP
Get benefit of more time spent in the market
For illustration purposes only. The returns are assumed returns and SIP is at beginning of the period.
With smaller amounts to invest through a SIP, you start investing early thereby giving your investments more time in
the market. This increases the final value of your investments.
Easy on Pockets: Investment through a SIP is possible with amounts as low as Rs 1000 per
month
Selecting the right Equity Mutual Fund scheme on ICICIdirect.com
Research Recommendations:
Easily select Equity Mutual Fund scheme(s) from top-rated schemes recommended by our award-
winning Research after extensive analysis. These recommendations are available on Mutual Funds
Place Order page in the login section.
Choose scheme(s) from our recommendations and start your investment journey. You should
select scheme(s) for starting a SIP from “SIP Portfolio” under Research recommendations.
How should you select the right Equity MF scheme?
0.79
1.93
5.63
10.11
0.97
2.71
11.16
37.81
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
5 Years 10 Years 15 Years 20 Years
S&P BSE SENSEX Our Recommended SIP Schemes Average
ICICIdirect Research Recommended Equity Schemes for SIP – Average Returns w.r.t. benchmark. Resultant
value from Rs 1,000 invested monthly in Sensex & our recommended equity schemes for SIP
Am
ou
nt
in₹
Lakh
s
Our Recommended schemes for SIP have consistently out-performed their benchmarks. You
should also start investing through SIP in our Research recommended schemes for long term
wealth creation.
Source: Accord FinTech, ICICIdirect Research, Data as on July 25, 2016
How should you select the right Equity MF scheme?
Across time-periods, our Research recommended Equity
schemes for SIP have given more returns than Sensex. The
longer the period of investment, more is the out-
performance by our recommended schemes.
~1.2 times the
final value of
Sensex
~1.4 times the
final value of
Sensex
~2.0 times the
final value of
Sensex
~3.7 times the
final value of
Sensex
Advantages of investing through a SIP You should start investing through SIP in our Research recommended
Equity schemes for long term wealth creation.
How to invest through ICICIdirect.com?
Enter User Id, Password, Date of Birth/PAN, select Mutual
Funds to Start in and click on “Login Now”.
Click on “Purchase” to
select scheme(s) to Invest.
On Mutual Funds Place Order page select a scheme
from our Research recommendations and click on
Buy(For Lump Sum)/SIP (Systematic Investment Plan).
Click on Continue to Invest
1
2
4
3
How to invest in SIP through ICICIdirect.com?
Enter SIP details – Frequency,
SIP Period, Start Date and
Installment Amount.
Review the investment details
provided, Accept T&C and click on
“Confirm” to set up your SIP.
A confirmation message with instructions will be
displayed.
Provide other mandatory
details and click on Submit
5 6
7
What are you waiting for?
Start investing through SIP in
our recommended schemes
now and SIP your way to
wealth creation!!
How to invest in Lump Sum through ICICIdirect.com?
Enter amount, select payment
source. .Review the investment details
provided, Accept T&C and click on
“Confirm” to place your order. A
confirmation message will be
displayed.
Provide other mandatory
details and click on Submit
5 6
Thank You