Professional Documents
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72712-29656-Mutual Funds
72712-29656-Mutual Funds
Disclaimer
• Me - no expert
• Not Comprehensive
Brief Regulations
BriefHistory
History Regulations
Organization Terminologies
TerminologiesDemystified
OrganizationofofMutual
MutualFund
Fund Demystified
Types Risk
RiskBehavior
TypesofofSchemes
Schemes Behavior
Investment Equity
EquityFunds
InvestmentStrategies
Strategies Funds
Buying
BuyingaaMutual
MutualFund
Fund Selecting
SelectingaaMutual
MutualFunds
Funds
Mutual Keeping
KeepingTrack
MutualFunds
FundsComparision
Comparision Track
Warning Reference
ReferenceWebsites
WarningSignals
Signals Websites
Mutual Fund ??
• Form of trust that pools the funds of a whole
lot of investors to make more money by
investing in an array of financial instruments.
• Advantages of a MF
– Professional Management
– Diversification
– Flexibility in choice - selection, redemption
– Low costs
– Transparency
Brief History
• 1964-UTI
• Fund Manager
– The individual responsible for making portfolio decision for a mutual fund, in
line with fund’s objective.
• Growth
– Profits ploughed back into scheme. This causes the NAV to rise.
Terminologies Contd…
• NAV
– Market value of assets of scheme minus its liabilities.
• Redemption Price
– Price at which open-ended scheme
Types of Mutual Fund Schemes
• 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 Adobe Acrobat 7.0
Document
• ULIP
Risks
• Historical analysis
– Return is remembered, Risk forgotten
• Market Risk
• Non-Market Risk
• Appropriate way
– Right Mix of equity MFs (Top 3-4 funds, may all be mid-cap funds)
– Have variety of funds like diversified funds, mid-cap funds and sector
funds – in right proportion.
– Beginner- it makes sense to begin with a diversified fund
– Gradual exposure to sector and specialty funds.
• TRAPS TO AVOID
– IPO Blur
• Begin with existing schemes (proven track record) and then new schemes
• Benchmark returns
– SEBI directs
– Fund's returns compared to its benchmark
• Time period
– Equal to time for which you plan to invest
– Equity- compare for 5 years, Debt- for 6 months
• Market conditions
– Proved its mettle in bear market
Buying Mutual Funds
• Contacting the Asset Management Company directly
– Web Site
– Request for agent
• Agents/Brokers
– Locate one on AMFI site
• Financial planners ACDSee JPEG
Image
– Bajaj Capital etc.
• Insurance agents
• Banks
– Net-Banking
– Phone-Banking
– ATMs
• Online Trading Account
– ICICI Direct
– Motilal Oswal, Indiabulls- Send agents
Keeping Track…
– Professional advisor
Adobe Acrobat 7.0
Document
Warning Signals
• http://news.moneycontrol.com/mf/glossary.php
• http://www.investopedia.com/university/mutualfunds/default.asp
• http://www.valueresearchonline.com
• http://www.amfiindia.com/
• http://www.sbimf.com/portal/static/calculator/RiskAssess/RiskAssessCal1.asp
• http://www.mutualfundsindia.com/resourcecentre.asp