“An ingenious device for

obtaining individual profits sans

individual responsibility.”
• INTRODUCTION
• TYPES OF MUTUAL FUNDS
• BENEFITS OF INVESTMENTS IN MUTUAL
FUNDS
• INDIAN MUTUAL FUNDS WITH
RESPECTIVE SCHEMES
• LINK TO MUTUAL FUNDS WEBSITES
• SEBI MUTUAL FUNDS REGULATIONS
• UNIT TRUST OF INDIA
WHAT IS A MUTUAL FUND?

SEBI Mutual Fund Regulation act, 1996, defines

a Mutual Fund as “ a fund established in the form
of a trust by a sponsor to raise money by the
Trustees through the sale of units to the public
under one or more schemes for investing in
securities in accordance with these regulations”.
PRE-REQUISITES OF FLOATING A
MUTUAL FUNDS

•The sponsor should have a sound track record

and good reputation.
• The sponsor should be persisting in the
financial services business for at least 5 years.
•The net worth of the sponsor must be equal
to/ more than 5000 crores.
•The sponsors must contribute at least 40% of
the net worth of the Assets Management
Company.
 PROCEDURE OF FLOATING A
MUTUAL FUND

A draft offer document is to be prepared at the time of launching the

fund it pre specifies the investment objectives of the fund, the risk
associated, the costs involved in the process and the broad rules for
entry into and exit from the fund and other areas of operation.
 SEBI looks at track records of the sponsor and its financial strength
in granting approval to the fund for commencing operations.
A sponsor then hires an asset management company to invest the
funds according to the investment objective.
Investments from public are received and they are issued a specific
number of units of the mutual fund on the basis of their proportional
investment.
The pool of investment thus collected is given to the asset
management company
The fund manager invests the sum in a number of companies across
a broad cross-section of industries and sectors.
The income earned through these investments and the capital
appreciation realized by the scheme are shared by its unit holders in
proportion to the number of units owned by them (pro rata
 Fund Managers
Fund managers are responsible for implementing a
consistent investment strategy that reflects the
goals and objectives of the fund. Normally, fund
managers monitor market and economic trends
and analyze securities in order to make informed
investment decisions to ensure that the
investments being made are fruitful and
would lend solidarity to the common
objectives.
Asset Management company

An asset management company is the cardinal

element of a mutual fund as it undertakes the
inception of various schemes and their subsequent
management while maintaining harmony with the
fund”s pre stated objectives that are aimed at
bringing opulence for the unit holders along with
security.
 Net Asset Value
• Net Asset Value is the total asset value (net
of expenses) per unit of the fund and is
calculated by the AMC at the end of every
business day. NAV on a particular date
reflects the realizable value that the
investor will get foe each unit that he has
as holding if the scheme is liquidated on
that date.
NAV per Unit= Mkt./fair value of securities
+ receivables + other assets
+ unamortised issue expenses
- accrued expenses – payables
- other liabilities

____________________________________
No. of units outstanding of a scheme
 TYPES OF MUTUAL FUNDS

TYPES O F M U TU AL FU N DS

STR UC TUR E BASED O B J E C T IV E B A S E D O TH ER FU N DS

 M UTUAL FU NDS SCHEM E BY
STRUCTURE
O p e n -E n d e d F u n d s
it is o p e n f o r s u b s c r ip t io n a ll t h r o u g h t h e y e a r

C lo s e - E n d e d F u n d s
I t is o p e n d u r in g a lim it e d p e r io d

In te r v a l F u n d s
I t c o m b in e s b o t h f e a t u r e s o f o p e n - e n d e d a n d c lo s e - e n d e d
M u t u a l F u n d S c h e m e b y O b je c t iv e s

G ro w th F u n d s In c o m e F u n d s

B a la n c e d F u n d s M o n e y M a rk e t F u n d s
 Other Funds
• Tax Saving Scheme
• Sectorial schemes
• Index Schemes
• Loan Funds
• No-Loan Funds
Money Market Mutual Funds

In 1992, RBI introduced a scheme of MMMF as

to provide additional short term securities to
investors and to bring money instruments within
their reach.
 Benefits of Investments in
Mutual funds
• Professional Management :
Mutual Funds employ the service of experienced and
skilled professionals and dedicated investment research
team.The whole team analyses the performance and
balance sheet of companies and select them to achieve the
objective of the scheme.
Potential Return:-
Mutual Funds have the potential to provide a higher
return to an investor than any other option over
reasonable period of time.
• Diversification:- Mutual Funds invest in a number of
companies across a wide cross section of industries and
sectors.
• Liquidity ;- The investor can get the money promptly at the
net asset value related prices from the Mutual funds open-
ended schemes.
• Low Cost :- Investments in Mutual Funds is a less
expensive way in comparison to a direct investment in market.
• Transparency:- Mutual Funds have to disclose their
holdings, investment pattern and the necessary information
before all investors under a regular framework
• Flexibility :- Investment in Mutual Funds offer a lot of
flexibility with features of schemes such as regular investment
plan, regular withdrawal plans and dividend reinvestment plans
enabling systematic investment withdrawal of funds.
• Affordability:- Small investors with low investments fund are
unable to high-grade or blue chip stocks. An investor through
mutual funds can be benefited from a portfolio including of high
priced stock.

• Well Regulated:- All Mutual Funds are registered with SEBI,

and SEBI acts a watchdog, so the Mutual Funds are well
regulated.