Mutual funds pool money from many investors and invest it in stocks, bonds, and other securities. They are professionally managed collective investment schemes. In India, there are over 1000 mutual fund schemes from 44 companies with over Rs. 5 lakh crore in assets under management. Mutual funds have a sponsor, trustees to ensure rules are followed, and an asset management company that does the investing. They offer various types of funds across equity, debt, and hybrid categories for different investment needs and risk appetites.

2. What is Mutual Fund
INVESTORS
• Pool money from many investors
MUTUAL FUND
• Professionally Managed as collective investment
scheme
INVESTMENT
• Invest in stocks,bonds,short term money instruments &
other securities

3. Some Facts on Mutual Fund
Minimum
More than 5 lakh
Investment
crore assets size
Amount is Rs 500
More than 1000
44 Mutual fund
schemes of Mutual
companies in India
Fund

4. Structure In India
Structure of
Mutual Fund
Assets
Sponsor Trustee Management
Company(AMC)

5. Sponsor
• Who start of thinking Mutual Fund
• Approval from SEBI
• Enough experience in financial sector

6. Trustees
• Registered with SEBI
• Sponsor is not trust
• After registration trust is known as Mutual Fund
• Trustee role is not manage money, their job is to see
whether money is managed according to the regulations

7. Assets Management Companies
• AMC Approved by SEBI
• AMC charge fees for the services
• AMC must have 50% independent directors
• AMC follows the rules & regulation prescribed by SEBI
• Work according to Investment Management Agreement

8. Other Intermediaries
• Permission is must for buy/sell of securities by
Compliance fund manager
Officer • Compliance officer sign the due diligence
certificate in the offer document
• Safe keeping physical security & keep in eye on
Custodian corporate action
• Deliveries and receipt of units of an mutual fund
• Maintaining investors records
RTA • Convert physical to electronic form

9. NFO(New Fund Offering)
• Launch of new scheme is known as NFO
• Client fill the document known as Key
Information Memorandum(KIM)
• Distributer give both document to RTA

10. Fund Constituents
CUSTODIAN/
DEPOSITORY
DISBRITUBER Mutual
Fund RTA
BANK

11. Investor Rights And Obligation
• Investors have a right to receive the dividend
within 30 days of declaration.
• AMC must dispatch the redemption proceeds
within 10 working days of the request
• Receive audited annual reports within 6 months
from the financial year end.
• Investors can approach the investor relations
officer for grievance redressal

12. Types of Mutual Fund
Open ended Entry & Exit at
Schemes Open Market
Mutual Fund
Close ended Redeem by
Schemes fund itself

13. Equity Funds
• At least 65% of their Average Weekly Net Assets
Equity invested in Indian Equities.
• “If I take high risk, I may get high returns or I may
Mutual also incur losses”.
• Equity Funds can be classified on the basis of
market capitalization of the stocks they invest in –
Fund namely Large Cap Funds, Mid Cap Funds or Small
Cap Funds

14. Index Funds
• Index Funds invest in stocks comprising indices, such as the
Nifty 50, which is a broad based index comprising 50 stocks
Index
• This Fund will invest in stocks comprising the Nifty and in
Mutua the same proportion as in the index’.
l
• Index funds never attempt to beat the index returns, their
objective is always to mirror the index returns as closely as
Fund possible.

15. Diversified Large cap Index Fund
• Stock selection to the large cap stocks –
Diversified typically the top 100 or 200 stocks with
highest market capitalization and
liquidity
• These funds are actively managed funds
Large Cap unlike the index f unds which are
passively managed,
• Fund manager pores over data and
researches the company, the
Index Fund economy, analyses market trends, takes
into account government policies on
different sectors

16. Midcap Fund
Invest in Midcap Actively managed
Segment Midcap Funds
Investing in CNX
Midcap

17. Sectoral Fund
Stocks of Single
Sector
Relax of 10%
Investment in
single company
ETF(Exchange
Traded Funds)

18. Other Equity Schemes
Quant
Arbitrage Fund Multi cap fund
Fund
International Growth
P/E Ratio Fund
Equities Fund Schemes
ElSS (Equity
Linked Saving Fund of Funds
Schemes)

19. ETF (Exchange Traded Fund)
• Mutual fund units which investors buy/sell from the
stock exchange
• Prices are available on real time
• Huge reductions in marketing expenses and
commissions as the Authorized Participants are not
paid by the AMC
• Due to these lower expenses, the Tracking Error for
an ETF is usually low. Tracking Error is the acid test
for an index fund/ ETF.
• Globally there are ETFs on Silver, Gold, Indices
• Buying and selling ETFs requires the investor to have
demat and trading accounts.

21. Gold ETF’s
• Gold ETFs (G-ETFs) are a special type of ETF which
invests in Gold and Gold related securities
• Every time an investor buys 1 unit of G-ETFs, it is
similar to an equivalent quantity of Gold being
earmarked for him somewhere
• The investor need not worry about theft, locker charges,
quality of Gold or changes in fashion as he would be
holding Gold in paper form.
• The investor may also simply transfer the units to his
child’s demat account as well!
• The investor will not have to pay any wealth tax on his
holdings

22. Market Making as by Authorized
Participant
Authorized
Participants
AMC/Custodian Retail Investors

23. Entry & Exit Load
Major portion of the
Entry Load is used for
paying commissions to
Entry the distributor
No entry load in recent
times
Load
Contingent Deferred
Sales
Exit
Charge (CDSC)

24. Net Assets Value (NAV)
• Net Assets of a scheme is that figure which is
arrived at after deducting all scheme liabilities
from its asset.
• NAV is calculated by dividing the value of Net
Assets by the outstanding number of Units.

25. Expenses in Mutual Fund
Ratio of expenses incurred by
scheme to its average weekly
net assets
Expense Ratio
For e.g. net asset is 100 cr &
annual expenses is Rs 1 Cr then
expense ration is 1%
Expenses
Transaction Charges like
Brokerage,STT,Service tax,Cess
Portfolio Etc.
Turnover
It does not Impact Expenses
Ratio

26. Taxation
Mutual Fund
LTCG 20%
(More than 12
month)
STCG 15%
(Less than 12 month)

27. Plan of Mutual Fund
Dividend Profit is
Option distributed
Plan
Growth Profit is
Option Re-invested

28. Systematic Investment Plan (SIP)
Systematic Systematic
Investment Plan Transfer Plan
Systematic
Flexi SIP
Withdrawal Plan

29. Liquid Funds
Commercial
Paper, Certificate
of deposits,
Maturity Treasury Bills,
Money
Less than 1 Interest rate swap,
Market
Year Collateralized
Borrowing &
Lending
Obligations Etc.

30. Debt Funds
• Invest money in debt instruments such as short and long
term bonds, government securities, t-bills, corporate
paper, commercial paper, call money etc
• Objectives of a debt fund is usually preservation of
capital and generation of income
• Retail investors generally find it difficult to directly
participate in the debt markets.
• Investors can however participate in the debt markets
through debt mutual funds
• Debt paper is issued by Government, corporate and
financial institutions to meet funding requirements

31. Debt Fund
• Represents the amount of money taken as loan
Face • Face Value is Rs. 100, the borrower will take a loan of Rs.
Value 100 from the investor and give the paper to the investor
• Coupon represents the interest that the borrower will pay on
the Face Value
Coupon • The investor will earn a fixed income (8% on Rs.100 or Rs. 8
per year
• How long the borrower has taken a loan
• Example that the borrower has taken a Rs. 100 loan,
Maturity for a period of 10 years, and he has promised to pay
8% interest annually

32. Debt Fund Schemes
Fixed Maturity Capital Protection Gilt Fund
Plans Fund • Invest only in
• Money received by • Scheme invests some securities issued by
the scheme is used portion of investor’s the Government.
by the fund money in debt • Invests in
managers to buy debt instruments, with the Government
securities with objective of capital Securities, interest
maturities protection rate risk always
• Investors will get • No guarantee that at remains but no credit
lesser returns after all times the risk
they include the tax investor’s capital
liability. will be fully
protected.

33. Debt Fund Schemes
Balanced Fund MIP’s Child Benefit Plan
• Invest in debt as well • Objective of these • Capital protection and
as equity instruments. schemes is to provide steady appreciation as
These are also known regular income to the well. Parents can
as hybrid funds investor by paying invest in these
dividends schemes with a 5 – 15
• Investment in the debt year horizon
portion provides for
the monthly income
where investment in
the equities provides
for the extra return

34. Advantage of Mutual Fund
• Investor’s money is managed by professional fund managers
and the money is deployed in a diversified portfolio.
• Investors can enter / exit schemes anytime they want (at least
in open ended schemes).
• Investors will continue to get newer products and competition
will ensure that costs are kept at a minimum.
• Invest with the objective of getting capital appreciation or
regular dividends.
• Mutual Funds regularly provide investors with information
on the value of their investments
• Mutual Funds are registered with SEBI