Mutual Funds

About Mutual Funds

What Is a Mutual Fund?A mutual fund is a company that invests in a diversified portfolio of securities.People who buy shares of a mutual fund are its owners or shareholders. Theirinvestments provide the money for a mutual fund to buy securities such as stocks and bonds. A mutual fund can make money from its securities in two ways: asecurity can pay dividends or interest to the fund, or a security can rise in value.A fund can also lose money and drop in value.

Advantages of a MF•Professional Management•Diversification•Flexibility in choice - selection, redemption•Low costs•Transparency

Mutual Fund Operation Flow Chart

Fund Manager

Pool theirmoney with

Investors

Returns

Securities

Invests inGenerates

Passed back to

Organization of a Mutual Fund

Adobe Acrobat 7.0 Document

STRUCTURE OF MUTUAL FUNDS

TYPES OF MUTUAL FUNDS

Type of Mutual Fund

Schemes

StructureInvestment Objective

Special Schemes

Open Ended Funds

Close Ended Funds

Growth Funds

Income Funds

Balanced Funds

Money Market Funds

Industry Specific Schemes

Index SchemesSectoral Schemes

Types of Mutual Fund (cont’d)

• By Structure– Open-Ended – anytime enter/exit– Close-Ended Schemes – listed on exchange, redemption after period of

scheme is over.

• By Investment Objective– Equity (Growth) – only in Stocks – Long Term (3 years or more)– Debt (Income) – only in Fixed Income Securities (3-10 months)– Liquid/Money Market (including gilt) – Short-term Money Market

(Govt.)– Balanced/Hybrid – Stocks + Fixed Income Securities (1-3 years)

• Other Schemes– Tax Saving Schemes– Special Schemes

• ULIP

RISK - RETURN ANALYSIS

Investment strategies

• Systematic Investment Plan (SIP) – Invest a fixed sum every month. (6 months to 10

years- through post-dated cheques or Direct Debit facilities)

• Systematic Transfer Plan (STP) – Invest in debt oriented fund and give instructions

to transfer a fixed sum, at a fixed interval, to an equity scheme of the same mutual fund.

• Systematic Withdrawal Plan (SWP)

Buying Mutual Funds• Contacting the Asset Management Company directly

– Web Site– Request for agent

• Agents/Brokers– Locate one on AMFI site

• Financial planners– Bajaj Capital etc.

• Insurance agents• Banks

– Net-Banking – Phone-Banking – ATMs

• Online Trading Account– ICICI Direct– Motilal Oswal, Indiabulls- Send agents

INDIAN MUTUAL FUND COMPANIESBank Sponsored• Joint Ventures – Predominantly Indian

– SBI Funds Management Private Ltd.

• Others– BOB Asset Management Company Ltd.

– Canbank Investment Management Services Ltd.

– UTI Asset Management Company (Pvt) Ltd.

• Institutions– LIC Mutual Fund Asset Management Company Ltd.

INDIAN MUTUAL FUND COMPANIES (Cont’d)

• Indian– Benchmark Asset Management Company Pvt.

Ltd. – DBS Cholamandalam Asset Management Ltd.– Escorts Asset Management Ltd.– JM Financial Asset Management Private Ltd.– Kotak Mahindra Asset Management Company

Ltd. – Quantum Asset Management Co. Private Ltd.– Reliance Capital Asset Management Ltd.– Sahara Asset Management Company Private

Ltd.– Tata Asset Management Ltd.– Taurus Asset Management Company Limited

• Foreign– AIG Global Asset Management Company

(India) Pvt. Ltd.

• Joint Ventures – Predominantly Indian

– Birla Sun Life Asset Management Company Ltd.

– DSP Merrill Lynch Fund Managers Ltd.– HDFC Asset Management Company Ltd.– Prudential ICICI Asset Mgmt. Company Ltd.– Sundaram BNP Paribas Asset Management Co.

Ltd.

• Joint Ventures – Predominantly Foreign

– ABN Amro Asset Management (India) Ltd.– Deutsche Asset Management (India) Pvt. Ltd.– Fidelity Fund Management Pvt. Ltd.– Franklin Templeton Asset Management (India)

Pvt. Ltd.– HSBC Asset Management (India) Pvt. Ltd.– ING Investment Management (India) Pvt. Ltd.– JP Morgan Asset Management India Pvt. Ltd.– Lotus India Asset Management Co. Pvt. Ltd.– Morgan Stanley Investment Management Pvt.

Ltd.– Principal PNB Asset Management Co. Pvt. Ltd.– Standard Chartered Asset Management Co. Pvt.

Ltd.

Private Sector

Online Features & Offerings

• Buy and sell mutual funds online without the hassles of filling forms.

•  Switch investments between schemes of the same fund.

•  Create your own customized investment and redemption plan.

•  Modify/cancel your Systematic Investment Plan (SIP) and Systematic Withdrawal Plan (SWP).

•  View your unit holdings/valuations online.

•  Say goodbye to post-dated cheques.

 

Online Features & Offerings• National Electronic Funds Transfer (NEFT)• Download account statements ……….Online  • Convenience of receiving documents by email at no additional cost to you.

edocs are : – Convenient – Easy to store / retrieve – Free of Cost – Quick – Eco-friendly

• Edividends

Save your time and experience the convenience of receiving your dividend(s), if any, directly into your bank account.

• Get SMS confirmations for – Purchase – Redemption – Switch – Dividend declaration & other alerts.