BASIC OF MUTUAL FUND
WHAT IS A MUTUAL FUND ? A mutual fund is a pool of money collected from many investors and is collectively managed by an asset management company according to stated investment objectives.
HOW TO WORK MUTUAL FUND?
INVESTOR ▼ RETURN ► ◄ FUNDMANAGER ▲ SECURITIES
WHO CAN INVEST? Resident Indian Individuals Indian Companies Trusts / charitable institutions Banks Insurance Companies NRI Partnership firms etc.
TYPE OF MUTUAL FUND Open ended fund No entry load pay in open ended fund. (w.e.f. 1 st Aug 09) Open ended fund’s NAV declare daily. Close ended fund No entry load pay in close ended fund. Close ended fund’s NAV declare weekly.
TYPE OF FUNDS Equity fund ( 65% equity & related securities & 35 % debt market) Debt fund Balance fund Equities Linked Saving Scheme
WHY MUTUAL FUND NOT DIRECT EQUITY? Stock markets are very sophisticated Free pricing and liquidity Time, knowledge and luck Substantial capital for diversification
AFFORDABILITY Provide an opportunity for a small investor. Minimum invest 5000 in lumsum investment. Minimum invest 500 in SIP.
VARIED CHOISE Offer a Variety of schemes. Meet the investment need of all investor.
NEED SPECIFIC Short Term – Banks / Liquid fund Medium Term – Debt or Deb related funds (1 to 3 years) - Mix of debt & Equity (3 to 5 years) - Eqity or equity related securities Long Term - Equity Funds
TAX-BENEFIT Income tax benefit Dividend are tax exempt in investor’s hand No TDS in case of redemption Tax benefit available to investor under Sec 80c 80 to 100% diversified equity & 20% money market instrument
Investment Option & Features OPTION Growth Dividend - Div.payout / re-invest PLANS SIP - Systematic Investment Plan STP - Systematic Transfer Plan SWP - Systematic withdrawal Plan
LOAD CALCULATION Entry Load paid at the time of entry Nav =10 Load= Nil Total Nav =10 Exit Load paid at the time of exit Nav =10 Load =1% (If the redemption before one year ) Nav decluding Load=10*1%=0.1 Total Nav = 9.9 (10-0.1)
NAV - COMPUTATION NAV = Net Asset of Scheme / No of unit outstanding
FOR DISTRIBUTORS Companies, firms or individuals who sell mutual funds and receive an agreed commission from the Fund for their efforts. Advisory Service & Collect application (with Pan card) Application send to AMC ( Assest Management Company )
THANKS “ MUTUAL FUND INVESTMENT IS SUBJECT TO MARKET RISK ”