MUTUAL FUNDS - Orientation Personal Presentation

8/8/2019 MUTUAL FUNDS - Orientation Personal Presentation

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MUTUAL FUNDS

What is Mutual Fund & Brief History

Organization of Mutual Fund & Types

Growth

Regulators in India

Advantages & Disadvantages

Conclusion


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What is Mutual Fund?

A Mutual Fund is a trust that pools the savings of anumber of investors who share a common

financial goal.

The money thus collected is then invested in

capital market instruments such as shares,

debentures and other securities.

Returns will, then be Passed on to the Unit

holders.


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BREIF HISTORYPHASE I (1963 - 87) :

Establishment of UTI in 1963

Launch of FIRST Scheme US-64, followed by

ULIP(1971), CGGF (1986) & MasterShare(1987)

Only UTI MonopolyHuge Mobilization of Funds

PHASE II (1987-93) :

Public Sector Mutual Funds established. The First Non-UTI SBI MF, followed by CanBank MF,

LIC MF ETC..,

Introduction & Failure of Equity Funds with assured

Returns


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PHASE III (1993 96) :

Entry of The Private Sector Funds Investment management techniques, investors servicing

techniques.

Launch of open-end Funds

PHASE IV (1996 - .) :

Investor friendly regulatory measures have been taken both

by SEBI & GOVT to protect the investor.

This is to enhance investors returns through tax benefits.


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GROWTH

82% Positive Change for Past 5 Years

Total Assets under Management @ theend of July is 7.20 trillion rupees, Which

was 1.14 trillion rupees in. Aug 2003

1434 MFs now which was 446 in 2003


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ORGANISATION


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TYPES


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REGULATIONS IN INDIA Governed by SEBI (Mutual Fund) Regulation 1996

y All MFs registered with it, constituted as trusts ( under IndianTrusts Act, 1882)

Bank operated MFs supervised by RBI too

AMC registered as Companies registered under Companies Act,1956

SEBI- Very detailed guidelines for disclosures in offer

document, offer period, investment guidelines etc.y NAV to be declared everyday for open-ended, every week for

closed ended

y Disclose on website, AMFI, newspapers

y Half-yearly results, annual reports

y Select Benchmark depending on scheme and compare


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Advantages

Portfolio diversification Professional management

Reduction/Diversification of Risks

Reduction of transaction costs Wide Choice to suit risk-return profile

Liquidity

Convenience and Flexibility

Transparency


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Disadvantages No control over costs

No tailor-made portfolios

Managing a portfolio of funds

Delay in redemption


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POINTS TO REMEMBER

Do not speculate: Always evaluate risk-taking capacity. Do not chase returns: Because what goes up must come

down.

Do not put all eggs in one basket: Diversification reducesthe risk.

Do not stop working on Mutual Funds: Continuousevaluation of funds is a must.

Do not time the market: Every time is good forinvestments.

Mutual Funds are subject to market risks and there is noassurance that the fund objective will be achieved.

NAVs fluctuate depending on forces affecting the Capitalmarket.

Past performance may or may not be sustained in the

future.


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ThanK YoU

MUTUAL FUNDS - Orientation Personal Presentation

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