ICS(FIN)

8/7/2019 ICS(FIN)

http://slidepdf.com/reader/full/icsfin 1/22

A PRESENTATION ON MUTUAL

FUNDSA

REPORT

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF

THE TWO YEAR POST GRADUATION MBA PROGRAMME

PREPARED BY:

8/7/2019 ICS(FIN)


INVESTMENT CONSULTANCY

SERVICES

Annual Turnover :- 32 Lakhs

Establishment Year :- 2005-06

Director :- Mr. Dinesh Shukla

8/7/2019 ICS(FIN)


Objective

� The basic purpose is to know about

the Mutual Fund Industry and to know

the behavior of the Indian Investors

regarding different investment tools .

8/7/2019 ICS(FIN)


Methodology

� Primary Data: - Personal interaction

with the respondents.� Secondary Data: - Information

through websites, books, fact sheets

of various fund houses etc.

8/7/2019 ICS(FIN)


SWOT ANALYSIS

8/7/2019 ICS(FIN)


Mutual Fund ??

� Form of trust that pools the funds of a whole

lot of investors to make more money byinvesting in an arr ay of financial instruments.

� Advantages of a MF

± Prof essional Management

± Diver sification

± Flexibility i n choice - selection, r edemption

± Low costs

± Tr ans par ency

8/7/2019 ICS(FIN)


8/7/2019 ICS(FIN)


Brief History

� 1964-UTI

� 1987- Public Sector bank s, Insur ance Companies

± SBI, Canbank, PNB LIC, GIC

� 1993- Private Sector

± Kothari Pioneer ( later merged with Fr anklin

Templeton), J P Morgan, Morgan Stanley, George

Soros and Ca pital International

8/7/2019 ICS(FIN)


Organization of a Mutual Fund

8/7/2019 ICS(FIN)


Regulations

� Governed by SEBI (Mutual Fund) R egulation 1996

± All MFs r egister ed with it, constituted as trusts ( under Indian Trusts Act, 1882)

� Bank oper ated MFs supervised by RBI too

� AMC r egister ed as Companies r egister ed under Companies Act, 1956

� SEBI- Very detailed guidelines for disclosur es in off er

document, off er period, investment guidelines etc. ± NAV to be declar ed everyday for open-ended, every week

for closed ended

± Disclose on we bsite, AMFI, news pa per s

± Half -yearly r esults, annual r e por ts

± Select Benchmark de pending on scheme and compar e

8/7/2019 ICS(FIN)


Terminologies «

� Asset Allocation ± Diver sifying investments in diff er ent assets such a s s tock s, bonds, r eal estate,

cash in order to optimize risk .

� Fund Manager ± The individual r es ponsible for making por tfolio decision for a mutual fund, in

line with fund¶s objective.

� Fund Offer Document ± Document with investment objectives, risk f actor s, ex penses summary, how to

invest etc.

� Dividend ± Profits given to the investor from time to time.

� Growth

± Profits ploughed back into scheme. This causes the NAV to rise.

8/7/2019 ICS(FIN)


Terminologies Contd«

� NAV

± Mark et value of assets of scheme minus its lia bilities.

� Per unit NAV = Net Asset Value

No. of Units Outstanding on Valuation date

� Entry Load/Front-End Load (0%) ± The commission charged at the time of buying the fund.

± To cover costs for selling, processing

� Exit Load/Back- End Load (0.25-2.25%) ± The commission or charge paid when an investor exits from a mutual fund. Imposed to discour age

withdr awals

± May r educe to zero as holding period incr eases.

� Sale Price/ Offer Price

± Price

you pay

to inv

estin

a sc

hem

e.M

ay includ

e a sal

eslo

ad

.(In

this

case

,sa

le

price

is h

ighe

r tha

n NAV)

� Re-Purchase Price/ Bid Price ± Price at which close-ended scheme r e purchases its units

� Redemption Price ± Price at which open-ended scheme

8/7/2019 ICS(FIN)


T ypes of Mutual Fund Schemes

� By Structur e ± Open-Ended ± anytime enter/exit

± Close-Ended Schemes ± listed on exchange, r edemption af ter period of scheme is over .

� By Investment Objective

± Equity (Growth) ± only in Stock s ± Long Term (3 year s or mor e)

± De bt (Income) ± only in Fixed Income Securities (3-10 months)

± Liquid/Money Mark et (including gilt) ± Shor t-term Money Mark et (Govt.)

± Balanced/Hybrid ± Stock s + Fixed Income Securities (1-3 year s)

� Other Schemes

± Tax Saving Schemes

± Special Schemes

� ULIP

8/7/2019 ICS(FIN)


8/7/2019 ICS(FIN)


Investment strategies

� Systematic Investment Plan (SIP)

± Invest a fixed sum every month. (6 months to 10 year s-

through post-dated cheques or Dir ect De bit f acilities)

± Fewer units when the shar e prices ar e high, and mor e units

when the shar e prices ar e low. Aver age cost price tends tof all below the aver age NAV.

� Systematic Transfer Plan (STP)

± Invest

in de b

tori

en

ted fund

and giv

ein

struc

tion

s to

tr

an

sf

er

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

� Systematic Withdrawal Plan (SWP)

8/7/2019 ICS(FIN)


8/7/2019 ICS(FIN)


Investing Checklist

� Dr aw up your asset allocation ± Financial goals & Time fr ame (Ar e you investing for r etir ement? A

child¶s education? Or for curr ent income? )

± Risk Taking Ca pacity

�Id

en

tify fund

s that

f all in

to your Buy Li

st

� Obtain and r ead the off er documents

� Match your objectives

± In terms of equity shar e and bond weightings, downside risk protection,tax benefits off er ed, dividend payout policy, sector focus

� Check out past performance ± Performance of various funds with similar objectives for at least 3-5

year s (managed well and provides consistent r eturns)

8/7/2019 ICS(FIN)


Checklist Contd«

� Think hard a bout investing in sector funds ± For r elatively aggr essive investor s

± Close touch with developments in sector, r eview por tfolio r egularly

� Look for `load' costs

± Management f ees, annual ex penses of the fund and sales loads

� Does the fund change fund manager s of ten?

� Look for size and cr edentials

± Asset size less than R s. 25 Cror es

� Diver sify, but not too much

� Invest r egularly, choose the S-I-P

± MF- an integr al par t of your savings and wealth- building plan.

8/7/2019 ICS(FIN)


Bu ying Mutual Funds

� Contacting the Asset Management Company dir ectly ± We b Site

± R equest for agent

� Agents/Brok er s ± Locate one on AMFI site

� Financial planner s ± Ba ja j Ca pital etc.

� Insur ance agents

� Bank s ± Net-Banking

± Phone-Banking

± ATMs

� Online Tr ading Account

± ICICI Dir ect

± Motilal Oswal, India bulls- Send agents

8/7/2019 ICS(FIN)


Keeping Track«

� Filling up an a pplication form and writing out a

cheque= end of the story« NO!

� Periodically evaluate performance of your funds

± Fact sheets and Newsletter s

± We bsites

± News

pa p

er

s

± Prof essional advisor

8/7/2019 ICS(FIN)


W arning Signals

� Fund's management changes

� Performance slips compar ed to similar funds.

� Fund's ex pense r atios climb

� Beta, a technical measur e of risk, also climbs.

� Inde pendent r ating services r educe their r atings of the

fund.

� It merges into another fund.

� Change in management style or a change in the

objective of the fund.

8/7/2019 ICS(FIN)


Documents

ICS(FIN)