An old Axiom :

“It is not wise to put all eggs

into one basket”

……… was probably in the minds of

those who formed the first
mutual fund.
INVESTMENT
INVESTMENTOPPORTUNITIES
OPPORTUNITIESIN
IN MUTUAL
MUTUALFUNDS
FUNDS

Presented by:
Utkarsh Sethi
Neeru Rawat
 What is a Mutual Fund
 A Mutual Fund is a trust.
 Pools the savings of a number of investors.
 Share a common financial goal.
 A diversified portfolio of financial instruments.
 equities, debentures / bonds or other instruments.
 The fund is then deployed in investment
alternatives.
 Income is shared by unit holders.
 In proportion to their investment.
 Important characteristics of a
Mutual Fund
 The ownership is in the hands of the investors who have
pooled in their funds.

 It is managed by a team of investment professionals and

other service providers.

 The pool of funds is invested in a portfolio of marketable

investments.

 The investors share is denominated by ‘units’ whose value is

called as Net Asset Value (NAV) which changes everyday.

 The investment portfolio is created according to the stated

investment objectives of the fund.
1

Mutual Fund
Operation Flowchart

2
 Advantages of Mutual Funds to
Investors
 Portfolio diversification
 Professional Management
 Return Potential
 Reduction in Transaction costs
 Liquidity
 Convenience and Flexibility
 Transparency
 Safety – Well regulated by SEBI
 How are funds different in terms
of their risk profile?
Equity Funds High level of return but
has a high level of risk
as well

Debt Funds Returns comparatively

less risky than equity
funds

Liquid and Provide stable but low

Money Market level of return
Funds
TYPES OF MUTUAL FUNDS
SCHEMES
 INSTRUMENTS OF
INVESTMENT

 EQUITY
 CONVERTIBLE DEBENTURES
 FIXED INCOME SECURITIES
 SHORT TERM SECURITIES
Facilities Provided by Mutual Funds
to the Investors
 Systematic Investment Plan (SIP)
 Systematic Withdrawal Plan (SWP)
 Systematic Transfer Plan (STP)
 Dividend Transfer Plan (DTP)
 Auto debit facility and Electronic Clearing
Service (ECS)
 Switching
 AMFI Classification of MF
schemes

Growth & Income High Risk & High Return

Balanced Moderate Risk & Return

Liquid & Money Market Fixed Return

Gilt Zero Risk

ELSS Tax Saving

Fund of funds Additional diversification

 Wealth cycle for investors
Stage Financial needs
Accumulation stage Investing for long term identifed
  financial goals
Transition Stage Near term needs for funds as
  pre-specified needs draw closer
Reaping Stage Higher liquidity requirements
   
Long term investment of
Inter Generational
inheritance
transfer  
Sudden wealth surge Medium to long term
   
Investment preferences
Growth options and long term
products.High risk appetite
Liquid and medium term investments.
Lower risk appetite
Liquid and medium term investments.
Preference for income and debt products
Low liquidity needs.
Ability to take risk and invest for the long
term
Wealth preservation.
Preference for low risk products
 Risks involved in Mutual
Funds
 Market Risk
 Inflation Risk
 Credit Risk
 Investment Risk
 Liquidity Risk
 Restrictions
 ON INVESTMENT
 Invest only in marketable securities.
 Issue expenses shall not exceed 6% of the fund.
 MF cannot hold more than 10% of the paid up capital of a company.
 MF scheme can invest max. 10% of its NAV in a single company.
( Exception – Index and Sectoral funds).
 Debt funds - single issuer not more than 15% of NAV, can be relaxed to
20% with approval of trustees and AMC.
 Funds of 1 scheme can be invested in any other MF ( Max 5% of Net
Assets).
 No investment in unlisted associate company.

 ON BUSINESS ACTIVITIES
 No activity other than management of the scheme.
 Shall not act as trustee of any scheme.
 Shall not invest in any of the schemes floated by it unless disclosed in
the offer document.
 CONCLUSION
 Best option consider by the investors
when it comes to investing their money in
Mutual Funds.
 This industry is growing at a good pace.
 Money Invested in Mutual Funds is safe.
 Investors who are looking for very high
instant returns, mutual funds are not
recommended; they are meant for
investors committed to patient investing.
THANK YOU..!!