Beruflich Dokumente
Kultur Dokumente
Mutual Funds
Risk Management Factsheets Return Portfolio Tax Saving Redemption Entry Load Asset Allocation Investment Objective Open Ended Growth Fund Manager Repurchase Price AUMs Professional Management Close Ended
Sale Price
Snapshot .
Mutual Fund
An old Axiom :
was probably in the minds of those who formed the first mutual fund.
Indian Institute of Capital Markets
Contents
Flow Cycle of a Mutual Fund Diff. b/w MF and Direct Investment Balance sheet of a Bank and Mutual Fund Risk-return structure of schemes Organizational Structure of a Mutual Fund Classification of Mutual Fund Schemes
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
Returns
Investors
Securities
Fund Manager
Flow Cycle explained A Mutual Fund is a trust that pools the savings of a number 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. The income earned through these investments and the capital appreciation realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
Diff. b/w MF and Direct Investment Mutual fund investing vs. Direct investing
Professional investment management Risk reduction through diversification Convenience Availability of alternative portfolio objectives Unit holders account administration and services
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
Trustees
Distributor / Agents
Sell units on the behalf of the fund, It can be bank, NBFCs, individuals.
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
Portfolio objectives
High Risk & High Return Moderate Risk & Return Fixed Return Zero Risk Tax Saving Additional diversification Market Driven
By Investment Objective
Equity (Growth) only in Stocks Long Term (3 years or more) Debt (Income) only in Fixed Income Securities Liquid/Money Market Short-term Money Market (CPs, CDs, Treasury Bills) Balanced/Hybrid Stocks + Fixed Income Securities (1-3 years) Gilt Funds primarily in G-Sec
Other Schemes
Tax Saving Schemes such as ELSS Special Schemes (ETFs, foreign funds)
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
Regulatory Aspects
Flow Cycle of a Mutual Fund Diff. b/w MF and Direct Investment Balance sheet of a Bank and Mutual Fund Risk-return structure of schemes Organizational Structure of a Mutual Fund Classification of Mutual Fund Schemes
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
Risk Management
Flow Cycle of a Mutual Fund Diff. b/w MF and Direct Investment Balance sheet of a Bank and Mutual Fund Risk-return structure of schemes Organizational Structure of a Mutual Fund Classification of Mutual Fund Schemes
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
Risk factors
Volatility in performance, portfolio concentration, Interest rate movement, liquidity risk & credit risk. Deal error, settlement problem, NAV & fund pricing Operations error, inaccurate financial reporting, fraud. Error in deal processing, fraud . Customer Marketing & distribution New product development, selling & distribution Critical knowledge loss, skills shortage, third party Other business risk risk Disaster recovery & business contingency plans. Insurance against third party loss (R&TA), arising from error & omission.
Investment Checklists
Flow Cycle of a Mutual Fund Diff. b/w MF and Direct Investment Balance sheet of a Bank and Mutual Fund Risk-return structure of schemes Organizational Structure of a Mutual Fund Classification of Mutual Fund Schemes
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
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
Expenses
Flow Cycle of a Mutual Fund Diff. b/w MF and Direct Investment Balance sheet of a Bank and Mutual Fund Risk-return structure of schemes Organizational Structure of a Mutual Fund Classification of Mutual Fund Schemes
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
An asterisk * indicates fee which is included in a fund s expense ratio. As per SEBI Rule, expense ratio should be 2.5% for equity & 2.25% for debt fund of fund value.
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
Warning Signals
Flow Cycle of a Mutual Fund Diff. b/w MF and Direct Investment Balance sheet of a Bank and Mutual Fund Risk-return structure of schemes Organizational Structure of a Mutual Fund Classification of Mutual Fund Schemes
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
12105
10801 14164 32424 59447 19937 14371 4663 9170 22938 5472 6833 192129 67144 119538 99081 11348 112349 64711 97757 82776
80%
17996
70% 60%
11659
50%
40%
30% 20%
10%
0%
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec 08
Income
Equity
Balanced
Liquid/Money Market
Gilt
ELSS
GOLD ETFs
Other ETFs
FoFs
Stock Funds have become a mainstream product. Liquid Plus Funds and FMPs have seen aggressive inflows due to regulatory changes. New asset classes like ETFs and FoFs have emerged.
Indian Institute of Capital Markets
600000
549936
500000
-13 %
413365
400000
66 %
300000
323597
14 %
200000
101822
100000
122600
Total Assets Under Management as on March 2009 Rs 493286 crores Total No. of players - 36
Indian Institute of Capital Markets
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
235
230
200
182
In Millions
150
100
90
58
50
26 8.4
0
Bank A/cs
Credit Cards
Debit Cards
Mobile Subscribers
Note: Penetration of Mutual Funds is still low as compared to Banks and Insurance Companies.
Indian Institute of Capital Markets
Regulatory Aspects
Risk Management
Investments Checklists
Warning Signals
Expenses
What Mutual Funds are not? MFs are not MFs are not MFs are not MFs are not get rich quick investments risk free investment assured return investment a universal solution to all investment needs
Thank You