MUTUAL FUNDS

ICICI Direct offers you a simple and convenient way to invest and manage your personal finance with over 2000 funds approximately. By offering you the choice of the various funds we partner with, we offer you the opportunity to diversify your portfolioICICI Direct offers an efficient way to investing The benefits of choosing ICICI Direct for your financial planning are:
Convenience - Provides a well diversified set of investment products under a single sign-on and completely paper-less investing experience Expertise - You can access some of the researched funds selected based on rigorous criterion Flexibility - You may select the fund that best suits your need

Pick the investment that is right for you

Since the process of selecting the right mutual fund may feel complex and tedious, our experts have researched the funds and using certain criterion have created a choice of funds. You may choose to invest in the choice of funds suggested by our experts or may build your own portfolio
Mutual Fund Investing

If you have an ICICI Direct account, login to your account and select the Mutual Fund selection If the Mutual Fund section is not enabled either you have not opted for the facility or may not be KYC (Know-Your-Customer) Compliant. KYC is mandatory for all investments in Mutual Fund as per the Securities and Exchange Board of India (SEBI). If you do not have an account with ICICI Direct, help us open your account and experience the world of online investing. Please click here for account opening.
Getting started

Our online service is ever evolving and offers you facilities like making a lump sum investment, redemption, switches within same funds, setting up systematic investment plans etc. You can start with as little as Rs.500 when you start a Systematic Investment Plan or Rs.5,000 if you are looking for a lump sum investment To know more on how SIP is beneficial and a disciplined investment approach, please click here.

Since their creation, mutual funds have been a popular investment vehicle for investors. Their simplicity along with other attributes provide great benefit to investors with limited knowledge, time or money. To help you decide whether mutual funds are best for you and your situation, we are going to look at some reasons why you might want to consider investing in mutual funds. (Know what you're getting into, check out Analyzing Mutual Fund Risk.) Diversification One rule of investing, for both large and small investors, is asset diversification. Diversification involves the mixing of investments within a portfolio and is used to manage risk. For example, by choosing to buy stocks in the retail sector and offsetting them with stocks in the industrial sector, you can reduce the impact of the performance of any one security on your entire portfolio. To achieve a truly diversified portfolio, you may have to buy stocks with different capitalizations from different industries and bonds with varying maturities from different issuers. For the individual investor, this can be quite costly. By purchasing mutual funds, you are provided with the immediate benefit of instant diversification and asset allocation without the large amounts of cash needed to create individual portfolios. One caveat, however, is that simply purchasing one mutual fund might not give you adequate diversification - check to see if the fund is sector or industry specific. For example, investing in an oil and energy mutual fund might spread your money over fifty companies, but if energy prices fall, your portfolio will likely suffer. (Learn how to protect yourself against loss, read Recession-Proof Mutual Funds.)

Watch: Mutual Funds

Economies of Scale The easiest way to understand economies of scale is by thinking about volume discounts; in many stores, the more of one product you buy, the cheaper that product becomes. For example, when you buy a dozen donuts, the price per donut is usually cheaper than buying a single one. This also occurs in the purchase and sale of securities. If you buy only one security at a time, the transaction fees will be relatively large. Mutual funds are able to take advantage of their buying and selling size and thereby reduce transaction costs for investors. When you buy a mutual fund, you are able to diversify without the numerous commission charges. Imagine if you had to buy the 10-20 stocks needed for diversification. The commission charges alone would eat up a good chunk of your savings. Add to this the fact that you would have to pay more transaction fees every time you wanted to modify your portfolio - as you can see the costs begin to add up. With mutual funds, you can make transactions on a much larger scale for less money. (For more on this, see Start Investing With Only $1,000.) Divisibility Many investors don't have the exact sums of money to buy round lots of securities. One to two hundred dollars is usually not enough to buy a round lot of a stock, especially after deducting commissions. Investors can purchase mutual funds in smaller denominations, ranging from $100 to $1,000 minimums. Smaller denominations of mutual funds provide mutual fund investors the ability to make periodic investments through monthly purchase plans while taking advantage of dollar-cost averaging. So, rather than having to wait until you have enough money to buy higher-cost investments, you can get in right away with mutual funds. This provides an additional advantage - liquidity. Liquidity Another advantage of mutual funds is the ability to get in and out with relative ease. In general, you are able to sell your mutual funds in a short period of time without there being much difference between the sale price and the most current market value. However, it is important to watch out for any fees associated with selling, including back-end load fees. Also, unlike stocks and exchange-traded funds (ETFs), which trade any time during market hours, mutual funds transact only once per day after the fund's net asset value (NAV) is calculated. (For related reading, see What is a mutual fund's NAV?) Professional Management When you buy a mutual fund, you are also choosing a professional money manager. This manager will use the money that you invest to buy and sell stocks that he or she has carefully researched. Therefore, rather than having to thoroughly research every investment before you decide to buy or sell, you have a mutual fund's money manager to handle it for you. (For more insight, see Does Your Investment Manager Measure Up? and Assess Your Investment Manager.) Conclusion As with any investment, there are risks involved in buying mutual funds. These investment vehicles can experience market fluctuations and sometimes provide returns below the overall market. Also, the advantages gained from mutual funds are not free: many of them carry loads, annual expense fees and penalties for early withdrawal. To learn about the other realities of mutual funds, see Disadvantages of Mutual Funds. Diversification: The best mutual funds design their portfolios so individual investments will react differently to the same economic conditions. For example, economic conditions like a rise in interest rates may cause certain securities in a diversified portfolio to decrease in value. Other securities in the portfolio will respond to the same economic conditions by increasing in value. When a portfolio is balanced in this way, the value of the overall portfolio should gradually increase over time, even if some securities lose value. Professional Management:Most mutual funds pay topflight professionals to manage their investments. These managers decide what securities the fund will buy and sell. Regulatory oversight: Mutual funds are subject to many government regulations that protect investors from fraud. Liquidity: It's easy to get your money out of a mutual fund. Write a check, make a call, and you've got the cash. Convenience: You can usually buy mutual fund shares by mail, phone, or over the Internet. Low cost: Mutual fund expenses are often no more than 1.5 percent of your investment. Expenses for Index Funds are less than that, because index funds are not actively managed. Instead, they automatically buy stock in companies that are listed on a specific index Transparency Flexibility Choice of schemes

Tax benefits Well regulated

What are features and benefits of Mutual Funds?

Posted by onlinemutualfund on 27 July 2010 Unlike most other financial products like provident fund, insurance and post office schemes, Top Mutual Funds not only provides convenience while investing money, but it also offers a variety of features that benefit investors. A few of most common features and benefits of top mutual funds are highlighted. Micro SIP/Chota SIP Feature of Mutual Fund Invest as low as Rs 100/- in Mutual Fund Companies Top Mutual Fund Companies offer its investors an option to invest extremely small amounts such as Rs 100/-, Rs 500/-, Rs 1000/- each month depending on individuals capacity into many of its mutual fund schemes. Benefits of Mutual Fund: Benefits of Mutual Fund are for people who want to invest small amounts. Daily Wage Workers, Rickshaw Taxi Drivers, Labourers who wish to invest into Mutual Funds. Flexibility of Dates Features of Mutual Fund Ease of investing on convenient dates Investor can invest in top Mutual Fund Scheme on their choice of dates. Many large Mutual Fund companies offer multiple dates for investing into its top performing mutual fund schemes. E.g Few dates would be 1st, 5th, 10th, 15th, 25th of each month. This makes regular investments on salary dates possible. Benefit of Mutual Funds: Benefits Salaried people who receive money at the end of the month and wish to invest in Mutual Funds. Timely Payments through ECS Feature of Mutual Funds Hassle free, Regular Payments to allow you to concentrate on other important things in life Investors in Mutual Funds need not worry about making timely payments each month through opting for ECS Payment Method. This ensures regular, hassle free, timely and correct monthly payments. Benefit of Mutual Fund: Feature is useful for people who are busy or travel a lot, as he does not have time to keep track of his monthly payments. Investing Through POA (Power of Attorney) Feature of MutualFund Investing without physical presence Investments in Mutual Funds can be done through Assignment of a Power of Attorney for effective financial planning. Army Personnel, Officers posted on-duty at far off places, owners/directors of limited companies, Non-Resident Indians, Resident Indian posted onsite/outside India can invest through the convenience of POA. Benefit of Mutual Fund: Your Financial Planning for familys benefit cannot be discontinued in your absence. Defense and Police Officers can appoint wife or family members to be POA and allow them to invest on your behalf. Top-up Facility for Mutual Funds Feature of Funds Happy with your fund performance, increase your payment amount Apart from regular payments investors can also invest via top-up facility. The amount of SIP can be increased at fixed intervals. The Top-up amount has to be in multiples of Rs 500/- depending upon fund. The frequency is fixed at Yearly and Half-Yearly Basis. Benefit of Mutual Fund: Received Huge Bonus Amount from your company in Middle of the Year, this amount can be parked in your existing Mutual Fund and Exchange Traded Fund (ETF)Account. Direct Credit of Dividend Payments Feature of MF No need to rush to bank to deposit the Dividend Cheque Asset Management Companies offer direct credit of dividend payment proceeds to investors bank accounts in order to ensure faster processing and timely credits of dividend amount. Benefit of Mutual Fund: Helpful for people having bank accounts in PSU banks. These banks have small branches with too many customers to manage. No need to stand in huge bank queues to deposit your dividend cheques, Mutual Fund cheque will be deposited directly into your bank account. Direct Credit of Redemption Payments Feature of Mutual Fund Get back your money quicker when you sell mutual fund units When a mutual fund is sold the money is directly credited to investors bank account to facilitate quick withdrawal of funds. Benefit of Mutual Fund: Useful for people having bank accounts in Large Private and Govt Banks. These banks have small branches with too many customers to handle. Avoid the need to stand in huge bank queues to deposit your redemption cheque, it will be deposited directly into your bank account. Trigger/SWP/AEP Plans Feature of Mutual Fund

Can fund book my profits for me? Sure In case price of investment goes up, investors can set automatic triggers to sell or transfer the portion of the increased value. This is to ensure that the profits are booked from increased valuation on their Mutual Fund Investment. E.g Trigger can be set to Sell/Transfer if the NAV appreciates by 12%, 20%, 50% and 100%. Benefit of Mutual Fund: Useful for investors who need discipline in their investing. This feature of Mutual Fund helps trader to book profits and eliminates the need to time the market to sell Mutual Fund Units. Register Multiple Bank Accounts Feature of Mutual Fund Can I have more than one registered bank account linked to my Fund Folio? Yes, you can. As a Mutual Fund investor you can register upto 5 different bank accounts in your folio. So in case if you have to close or transfer any one of the accounts the other can be utilised. Benefit of Mutual Fund: People who need to change their work location or move into new city but the old bank does not have AT-PAR Cheque clearing facility OR old bank does not have Core Banking enabled so cannot accept cheques drawn on different branch.

Advantages
What are the key advantages of mutual fund investing? Diversification Using mutual funds can help an investor diversify their portfolio with a minimum investment. When investing in a single fund, an investor is actually investing in numerous securities. Spreading your investment across a range of securities can help to reduce risk. A stock mutual fund, for example, invests in many stocks - hundreds or even thousands. This minimizes the risk attributed to a concentrated position. If a few securities in the mutual fund lose value or become worthless, the loss maybe offset by other securities that appreciate in value. Further diversification can be achieved by investing in multiple funds which invest in different sectors or categories. This helps to reduce the risk associated with a specific industry or category. Diversification may help to reduce risk but will never completely eliminate it. It is possible to lose all or part of your investment. Click here to see an example on constructing a diversified portfolio. Professional Management: Mutual funds are managed and supervised by investment professionals. As per the stated objectives set forth in the prospectus, along with prevailing market conditions and other factors, the mutual fund manager will decide when to buy or sell securities. This eliminates the investor of the difficult task of trying to time the market. Furthermore, mutual funds can eliminate the cost an investor would incur when proper due diligence is given to researching securities. This cost of managing numerous securities is dispersed among all the investors according to the amount of shares they own with a fraction of each dollar invested used to cover the expenses of the fund. What does this mean? Fund managers have more money to research more securities more in depth than the average investor. Convenience: With most mutual funds, buying and selling shares, changing distribution options, and obtaining information can be accomplished conveniently by telephone, by mail, or online. Although a fund's shareholder is relieved of the day-to-day tasks involved in researching, buying, and selling securities, an investor will still need to evaluate a mutual fund based on investment goals and risk tolerance before making a purchase decision. Investors should always read the prospectus carefully before investing in any mutual fund.

What is SIP in Mutual Fund

Regular visitors and clients of PersonalFN appreciate the importance of the systematic investment plan (SIP) route of investing in mutual funds. However it is surprising to note that it takes difficult times (read volatile markets) for the investing community at large, to appreciate the importance of such a handy facility. Simply put, investing via an SIP entails making regular investments (generally) in smaller denominations as opposed to making an one-time lump sum investment. The intention is to capitalise on the volatility in equity markets by lowering the average purchase cost. While few would dispute the utility that an SIP can offer, there is a flipside to the same as well. In this article, we discuss the pros and cons of SIP investing

Liquidity: Mutual fund shares are liquid and orders to buy or sell are placed during market hours. However, orders are not executed until the close of business when the NAV (Net Average Value) of the fund can be determined. Fees or commissions may or may not be applicable. Fees and commissions are determined by the specific fund and the institution that executes the order. Minimum Initial Investment: Most funds have a minimum initial purchase of $2,500 but some are as low as $1,000. If you purchase a mutual fund in an IRA, the minimum initial purchase requirement tends to be lower. You can buy some funds for as little as $50 per month if you agree to dollar-cost average, or invest a certain dollar amount each month or quarter.

Disadvantages
Risks and Costs: Changing market conditions can create fluctuations in the value of a mutual fund investment. There are fees and expenses associated with investing in mutual funds that do not usually occur when purchasing individual securities directly. As with any type of investment, there are drawbacks associated with mutual funds. No Guarantees. The value of your mutual fund investment, unlike a bank deposit, could fall and be worth less than the principle initially invested. And, while a money market fund seeks a stable share price, its yield fluctuates, unlike a certificate of deposit. In addition, mutual funds are not insured or guaranteed by an agency of the U.S. government. Bond funds, unlike purchasing a bond directly, will not re-pay the principle at a set point in time. The Diversification "Penalty." Diversification can help to reduce your risk of loss from holding a single security, but it limits your potential for a "home run" if a single security increases dramatically in value. Remember, too, that diversification does not protect you from an overall decline in the market. Costs. In some cases, the efficiencies of fund ownership are offset by a combination of sales commissions, 12b-1 fees, redemption fees, and operating expenses. If the fund is purchased in a taxable account, taxes may have to be paid on capital gains. Keep track of the cost basis of your initial purchase and new shares that are acquired by reinvesting distributions. It's important to compare the costs of funds you are considering. Always look at "net" returns when comparing fund performances. Net return is the bottom line; an investment's true return after all costs are deducted.

Prospectuses will not contain all the costs that affect the net return on your investment. This is why it is important to compare net returns whether or not the fund in a no-load or load fund.