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Table Of Content
Study of Mutual Fund In India Page No 1
Sr. No. CONTENTS PAGE NO.
1. Introduction 2
2. History Of Mutual Funds in India 5
3. Structure Of Mutual Fund 8
4. Pros & Cons of Investing in Mutual Fund 10
5. Types of Mutual Fund 16
6. Role Played By Mutual Funds In Financial Market 27
7. Mutual Fund Companies in India 29
8. Governance of Mutual Fund Industry 61
9. Investing in Mutual Fund: An Understanding Process 63
10. Mutual Fund Evaluation 79
11. Return on Investment of Mutual Fund 83
12. Performance Measurement Of Mutual Fund 86
13. Benchmarks & Performance Measure 92
14. Scope Of Study 97
15. Objective Of Study 98
16. Research Methodology 100
17. Data Analysis 101
18. Observation & Findings 108
19. Limitation Of Study 109
20. Recommendations 110
21. Conclusion 111
22. Bibliography 112
23. Annexure 113
24. Abbreviations 115
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INTRODUCTION
Different investment avenues are available to investors. Mutual funds also offer
good investment opportunities to the investors. Like all investments, they also
carry certain risks. But the Risk is comparatively low because of diversification of
portfolio. The investors should compare the risks and expected yields after
adjustment of tax on various instruments while taking investment decisions. The
investors may seek advice from experts and consultants including agents and
distributors of mutual funds schemes while making investment decisions.
MUTUAL FUNDS
Mutual funds are the financial intermediaries in the investment business. A Mutual
Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is invested by the fund manager
in different types of securities depending upon the objective of the scheme. These
could range from shares to debentures to money market instruments.
The income earned through these investments and the capital appreciation realized
by the scheme is shared by its unit holders in proportion to the number of units
owned by them. Thus a Mutual Fund is the most suitable investment for the
common man as it offers an opportunity to invest in a diversified, professionally
managed portfolio at a relatively low cost. The small savings of all the investors
are put together to increase the buying power and hire a professional manager to
invest and monitor the money. Each Mutual Fund scheme has a defined investment
objective and strategy.
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Mutual Funds-Investment Objectives:
Preservation of Capital & Liquidity--Achieved by investing in very short-term
bonds
Income--Achieved by investing in bonds
Balanced--Achieved by investing in bonds and stocks
Growth--Achieved by investing in stocks
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CHARACTERISTIC OF MUTUAL FUNDS
Mutual Fund units are actually owned by the investors who have pooled
their funds, that is they have ownership in their hands. Usually investments professionals & other service providers manage
mutual funds for which they earn a fee from the fund.
The funds that are collected from the investors are in turn invested in a
portfolio of marketable securities & the value of the portfolio is updated
every day.
The investors share is denominated in units. The value of the units
changes with the changes in the portfolios value, every day. The value
of one unit of investment is called Net Asset Value or NAV.
The investment portfolio of mutual fund is created according to the stated
investment objective of the fund
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HISTORY OF MUTUAL FUNDS
The concept of mutual fund is not new. Originating in USA and moving on to
the UK in the 1930s, this culture started in India only in 1960s with the
formation of Unit Trust of India in 1964, at the initiative of the Government of
India and Reserve Bank The history of mutual funds in India can be broadly
divided into four distinct phases as follows,
First Phase 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. Itwas set up by the Reserve Bank of India and functioned under the Regulatory
and administrative control of the Reserve Bank of India. In 1978 UTI was de-
linked from the RBI and the Industrial Development Bank of India (IDBI) took
over the regulatory and administrative control in place of RBI. The first scheme
launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6, 700
cores of assets under management.
Second Phase 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non- UTI, public sector mutual funds set up by public
sector banks and Life Insurance Corporation of India (LIC) and General
Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI
Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec
87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund
(Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC
established its mutual fund in June 1989 while GIC had set up its mutual fund
in December 1990.
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At the end of 1993, the mutual fund industry had assets under management of
Rs.47, 004 corers.
Third Phase 1993-2003 (Entry of Private Sector Funds)
With the entry of private sector funds in 1993, a new era started in the Indian
mutual fund industry, giving the Indian investors a wider choice of fund
families. Also, 1993 was the year in which the first Mutual Fund Regulations
came into being, under which all mutual funds, except UTI were to be
registered and governed. The erstwhile Kothari Pioneer (now merged with
Franklin Templeton) was the first private sector mutual fund registered in July1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more
comprehensive and revised Mutual Fund Regulations in 1996. The industry
now functions under the SEBI (Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign
mutual funds setting up funds in India and also the industry has witnessed
several mergers and acquisitions. As at the end of January 2003, there were 33
mutual funds with total assets of Rs. 1, 21,805 crores. The Unit Trust of India
with Rs.44, 541 crores of assets under management was way ahead of other
mutual funds.
Fourth Phase since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI
was bifurcated into two separate entities. One is the Specified Undertaking of
the Unit Trust of India with assets under management of Rs.29, 835 crores as at
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the end of January 2003, representing broadly, the assets of US 64 scheme,
assured return and certain other schemes. The Specified Undertaking of Unit
Trust of India, functioning under an administrator and under the rules framed
by Government of India and does not come under the purview of the Mutual
Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and
LIC. It is registered with SEBI and functions under the Mutual Fund
Regulations. With the bifurcation of the erstwhile UTI which had in March
2000 more than Rs.76, 000 crores of assets under management and with the
setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund
Regulations, and with recent mergers taking place among different private
sector funds, the mutual fund industry has entered its current phase of
consolidation and growth.
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Study of Mutual Fund In India Page No 8
STRUCTURE OF MUTUAL FUND
Sponsor
Company
Establishes MF as a trust
Register MF with SEBI
Floats MF FundsManages fund as per SEBIguide lineAMC agreement
MutualFund
Managedby a boardof trustee
AssetManageCompany
Hold Unit-holders fund in MFEnsures Compliance to SEBIEnters into agreement with AMC
Custodian Provides necessary custodianservices
Bankers Provide Banking Services
Registrars& TransferAgents
Provide Legistras Services &act as transfer agents
Approved
by boardof trustee
Appointed bytrustees
Appointed byAMC
Appointed byAMC
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A mutual fund comprises four separate entities, namely Sponsor, Mutual Fund
Trust, AMC and Custodian. The sponsor establishes the mutual fund and gets it
registered with SEBI. The mutual fund needs to be constituted in the form of a
trust and the instrument of the trust should be in the form of a deed registered
under the provision of the Indian Registration Act, 1908.
The sponsor is required to contribute at least 40% of the minimum net worth (Rs.
10 crore) of the asset management company. The board of trustees manages the
MF and the sponsor executes the trust deeds in favor of the trustees. It is the job of
the MF trustees to see that schemes floated and managed by the AMC appointed
by the trustees are in accordance with the trust deed and SEBI guidelines.
TRUSTEE
A Trustee is a Corporate Body governed by the provisions of Indian Trusts Act,
required to comply with the provisions of the Companies Act, 1956. It acts as
protector of the unit-holders' interests. It does not directly manage the portfolio of
securities but, appoints an Asset Management Company and ensures that the fund
is managed as per the defined objectives and in accordance with the trust deed and
SEBI regulations.
CUSTODIAN
A Custodian, registered with SEBI, is appointed by the board of Trustees for
safekeeping of securities or participating in any clearing system through approved
depository companies on behalf of the mutual fund and must fulfill its
responsibilities in accordance with its agreement with the mutual fund. Since
mutual funds are in the business of buying
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And selling of securities in large volumes, handling of such securities in terms of
physical delivery and safe- keeping is the responsibility of a Custodian.
SPONSOR
A Sponsor is any person who, acting alone or in combination with another body
corporate, establishes a mutual fund. The Sponsor, who is akin to the promoter of a
company, gets the fund registered with SEBI, forms a Trust and appoints a Board
of Trustees, will also generally appoint an Asset Management Company as fund
managers. The Sponsor, either directly or acting through the trustees, will also
appoint a Custodian to hold the fund assets. All these appointments are made inaccordance with SEBI regulations.
REGISTRAR/TRANSFER AGENT
Transfer agents are responsible for issuing & redeeming units of the mutual fund
and provide other related services such as preparation of transfer documents and
updating investor records.
Egg: Karvy Consultants, CAMS, etc.
ADVANTAGES OF INVESTING IN MUTUAL FUNDS
Professional Management
Mutual Funds are managed by investment mangers & are prearranged by
trustees & bound by the investment management agreement. AMCs are also
required to be adequately capitalized, & are closely synchronized by SEBI. An
AMC competing for the funds under management therefore brings in
significant professional proficiency & is bound by regulatory & trustees
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obligations. AMCs are bound by regulations which ensure that which trustees
are able to check the act of AMCs & there are a number of safeguards &
prudential regulations in the interest of investors. Investment mangers & funds
are also bound by the rules issued by AMFI, which cultivate professional
standards in the industry.
Diversification
Diversified investment improves risk-return profile of the portfolio. Small
investors may not have the amount of capital that would allow optimal
diversification. By offering a readymade diversified portfolio, mutual fundsenable investors to hold a diversified portfolio. Though investors can create
their own diversified portfolios, the costs of creating & monitoring such
portfolios can be high, apart from the fact that investors may lack the
professional expertise to manage such portfolio. Since the corpus of mutual
funds is substantially big as compared to individual investments, optimal
diversification becomes possible.
Convenience & Flexibility
Mutual funds possess features such as regular plan (i.e. one can invest in
installments), regular withdrawal plans, (also called systematic withdrawal
plans or SWP) & dividend reinvestment plan (also called systematic investment
plan or SI P). Because of these features, one can systematically invest or
withdraw funds according
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to ones needs & convenience. Mutual fund units are usually not issued in the
form of certificates, with minimum denomination. They are instead issued as
account statements, with the facility to hold units in fractions up to 4 decimal
points. It is also simper for investors to make additional investments, to
repurchase a part of their investments, to re-invest dividends to convert their
holdings in one fund into a holding in another & to alter the investment options
regarding their periodical dividends. These facilities make it possible for small
investors to regularly save a fixed amount in a mutual fund, & create saving
plans that suit their saving habits & financial goals. .
Reduction in risks
Mutual funds invest in an assortment of securities. This mean that all funds are
not invested in the same investment path. It is well known that risks & returns
of various investment options do not move uniformly with one another. If a
pharmacy company share is going down, debt markets may be moving up.
Therefore, holding a portfolio that is diversified across investment avenues is a
wise way to manage risk. When such a portfolio is liquid & marked to market,
it enables investors to evaluate the portfolio continuously & manage risks more
efficiently.
Reduction of transaction costs
The transactions of mutual funds are generally very large. These large volumes
attract lower brokerage commissions & other costs when compared to the
smaller volumes of the transactions entered into by individual investors. The
brokers quote a lower rate of commission due to two reasons. The first is the
competition for the institutional investors business. The second reason is that
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the overhead costs for executing a trade do not differ much for large & small
orders. Hence for a large order these costs spread over a larger volume,
enabling the broker to quote a lower commission rate. Mutual funds provide the
investors the advantage of economies of scale, by virtue of their size. Though
the individual investors payment may be small, the mutual fund itself is large
enough to be able to reduce the costs in its transactions. These benefits are
passed on to investor.
Liquidity
Most of the funds sold today are open-ended. That is, investors can sell theirexisting units, or buy new units, at any point of time, at prices that are related to
the NAV of the fund on the date of their transaction. This enables investors to
enjoy a high-level of liquidity on their investments. Since investors
continuously enter & exit funds, funds are actually able to provide liquidity to
investors, even if the underlying markets, in which the portfolio is invested,
may not have the liquidity that investor seeks. For example, the debt markets
are wholesale markets, where minimum trade lots, are Rs.25000 onwards.
However, investors in debt market funds can invest as little as Rs.500, &
withdraw the same at NAV related prices, at any time.
Choice of Schemes
Mutual funds generally offer a number of schemes to suite the requirements of
the investors. Thus the investors can choose between regular income schemes
& growth schemes, between schemes that invest in the money market & those
that invest in stock market. Some schemes provide value added services. For
example, automatic reinvestment schemes reinvest the distributed income
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automatically, thus making the management of funds easier. In case of direct
investment in securities, the reinvestment of income in the same proportion as
the assets held is very difficult & sometimes impossible. Funds that invest in
overseas market offer the additional advantage diversification, which may
otherwise not be feasible to lay investor. Mutual funds area allowed investing
in overseas markets through those schemes that are meant for overseas
investment or a part of domestic investment schemes. The schemes that are
invested in the overseas open- ended or close- ended. The fund
Should have the approval of the unit holder to invest in overseas markets if
there is no provision in the offer document. But MFs interested in investing
overseas must file an offer document with SEBI. The MFs must disclose the
fees & expenses involved to the unit holders.
Disadvantages of investing in Mutual Fund
No control over the costs
Funds usually have different kinds of fees that reduce the overall pay out. The
fees may be two types one is the shareholders fees that is in the form of
redemption & load fees & are paid by the shareholders. The other kind of fee is
the annual fund operating fee that is charged to the investors irrespective of the
performance of the mutual fund. Since investors do not directly monitor the
funds operations they cannot control the costs effectively.
No tailor made portfolios
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Mutual fund portfolios are created & marketed by AMCs into which investors
invest. They cannot create tailor made portfolios & therefore customized
products can be made.
Managing a portfolio of funds
As the number of mutual funds increases & to tailor a portfolio for himself, an
investor may be holding a portfolio of funds, with the costs of monitoring them
& using them, being incurred by him.
No-choice
The investor cannot choose the securities they want to invest in, or the
securities they want to sell.
Performance
The investors face the risk if the fund manager not performing well.
o If the fund managers compensation is linked to the funds performance he
may to be tempted to show good results in the short term, without paying
attention to the expected long- term performance of the fund. This would
harm the long-term interests of the investors. Another disadvantage of
investing in mutual fund is the management fees charged by the fund. It
reduces the returns available to the investors.
o Lastly, while investors in securities can decide the amount of earnings they
want to withdraw in a particular period, investors in mutual fund have no
such discretion as the amount of earnings that are to be paid out to the
investors in a particular year is decided by the mutual fund.
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TYPES OF MUTUAL FUNDS
Mutual fund schemes may be classified on the basis of its structure and its
investment objective.
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A) BY STRUCTURE:
A mutual fund scheme can be classified into open-ended scheme or close-ended
scheme depending on its maturity period.
a) Open-End Funds
An open-ended fund or scheme is one that is available for subscription and
repurchase on a continuous basis.
These schemes do not have a fixed maturity period. Investors can conveniently
buy and sell units at Net Asset Value (NAV) related prices, which are declared on
a daily basis.
The key feature of open-end schemes is liquidity.
In order to determine the value of a share in an open-end fund at any time, the Net
Asset Value is used.
Open-end funds also redeem, or buy back, shares from shareholders.
The reason why these funds are called "open-end" is because there is no limit to
the number of new shares that they can issue. New and existing shareholders may
add as much money to the fund as they want and the fund will simply issue new
shares to them.
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b)Closed-End Funds
A Close-Ended fund is open for subscription only during a specified period,
generally at the time of Initial Public Offer (IPO).
Investors can invest in the scheme at the time of the IPO and thereafter they can
buy or sell the units of the scheme on the stock exchanges where they are listed.
A closed-end fund has a stipulated maturity period which generally ranging from
3 to 5 years. In order to provide an exit route to the investors, some close-ended
funds give an option of selling back the units to the Mutual Fund through periodic
repurchase at NAV related prices.
SEBI Regulations stipulate that at least one of the two exit routes is provided to the
investor. Investor i.e. either repurchase facility or through listing on stock
exchanges. These mutual funds schemes disclose NAV generally on weekly basis
The price of a share in a closed-end fund is determined partially by the value of the
investments in the fund, and partially by the premium (or discount) placed on it bythe market.
B) BY INVESTMENT OBJECTIVE:
A scheme can also be classified as growth scheme, income scheme, or balanced
scheme considering its investment objective. Such schemes may be open-ended or
close-ended schemes as described earlier. Such schemes may be classified mainlyas follows:
a) Growth / Equity Oriented Scheme
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The aim of growth funds is to provide capital appreciation over the medium to
long- term.
Such schemes normally invest a major part of their corpus in equities.
Such funds have comparatively high risks. These schemes provide different
options to the investors like dividend option, capital appreciation, etc. and the
investors may choose an option depending on their preferences.
Growth schemes are good for investors having a long-term outlook seeking
appreciation over a period of time.
b) Debt Oriented Scheme
The aim of income funds is to provide regular and steady income to investors.
Such schemes generally invest in fixed income securities such as bonds, corporate
debentures, Government securities and money market instruments. Such funds are
less risky compared to equity schemes. These funds are not affected because of
fluctuations in equity markets. However, opportunities of capital appreciation arealso limited in such funds.
The NAVs of such funds are affected because of change in interest rates in the
country. If the interest rates fall, NAVs of such funds are likely to increase in the
short run and vice versa.
Income Funds are ideal for capital stability and regular income.
c) Balanced Fund
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The aim of balanced funds is to provide both growth and regular income as such
schemes invest both in equities and fixed income securities in the proportion
indicated in their offer documents.
They generally invest 40-60% in equity and debt instruments. These funds are also
affected because of fluctuations in share prices in the stock markets.
NAVs of such funds are likely to be less volatile compared to pure equity funds.
These are appropriate for investors looking for moderate growth. These are ideal
for investors looking for a combination of income and moderate growth.
d) Money Market or Liquid Fund
These funds are also income funds and their aim is to provide easy liquidity,
preservation of capital and moderate income.
These schemes invest exclusively in safer short-term instruments such as treasury
bills, certificates of deposit, commercial paper and inter-bank call money,
government securities, etc.
Returns on these schemes fluctuate much less compared to other funds. These are
ideal for Corporate and individual investors as a means to park their surplus funds
for short periods.
C) BY MARKET CAPITALISATION:
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Market capitalization: STOCK FUNDS are often grouped by the size of the
companies they invest in big, small or tiny. By size we mean a company's value on
the stock market: the number of shares it has outstanding multiplied by the share
price. This is known as market capitalization.
Big companies tend to be less riskythan small companies. But smaller companies
can often offer more growth potential. The best idea is probably to have a mix of
funds that gives an exposure to large-cap, midsize and small companies.
A fund's market capitalization will indicate whether the fund emphasizes the
stocks of blue-chip companies with large market capitalizations, emergingcompanies with small capitalizations, or something in between.
a) Large Cap Funds
Large cap funds invest their assets primarily in companies, which have a sizable
market capitalization.
Different fund houses define `Sizable' differently. This is usually mentioned in thefact sheets for the investor's benefit. For instance, Principal defined large caps as
companies with a market capitalization in excess of (Rs 750crores). Companies
below this threshold were categorized as mid/small caps.
Investing in large caps is a lower risk-lower return proposition (vis--vis mid cap
stocks). These stocks carry Embedded value means such companies have
diversified businesses. So even if one company or business unit does not perform,
it is negligible loss for the group. Eg. RIL, SBI etc.
Large-cap funds are less volatile than funds that invest in smaller companies.
Usually, that means we can expect smaller returns but stable returns.
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E.g.: Principal Large cap, Kotak 30, HDFC Top 200 Fund, Franklin India Blue-
chip Fund, HSBC Equity Fund for instance, invest predominantly in large caps.
b) Mid Cap Funds
These funds invest in companies that have a lower market capitalization than the
large caps. Definition of mid cap companies varies from fund house to fund house.
As with large caps, BSE (BSE Mid Cap 200) and S&P CNX (S&P CNX Mid Cap
200) have designed their own indices for mid cap stocks.
Investments in mid caps are a riskier proposition as compared to investments in
large cap funds. In fact, a mid cap stock could well graduate to a large cap over
the years giving the investor a significant return on his investment.
E.g.: Franklin India Prima Fund, Kotak Mid-Cap, Magnum Global Fund,
Sundaram SelectMid Cap fund are some examples of mid cap funds.
c) Small Cap Funds
Small cap funds invest in companies with a smaller market capitalization. Eg.
Sundaram SMILE. Investing in small cap funds is fraught with considerable risk.
Small cap companies in most cases are just evolving. Again, as with mid caps,
information on small caps is not easily available so these companies are under-
researched or maybe not researched at all. So we are contending with a relatively
unknown entity here.
However, the risk-return trade-off is much higher vis--vis large caps and mid
caps.
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The volatility of the fund often depends on the aggressiveness of the manager.
Aggressive small-cap managers will buy hot growth and technology companies,
taking high risks in hopes of high rewards. More conservative "value" managers
will look for companies that have been beaten down temporarily by the stock
market.
Currently this is a niche segment as there is no fund investing purely in small cap
stocks. Sundaram SMILE is probably the first small cap fund of its kind.
d) Multi/Flexi-Cap Funds
Just about every second mutual fund IPO these days is a multi/flexi cap fund.
The fund manager has the mandate to shift across market capitalizations depending
on the growth opportunity.
This is generally dictated by the market happenings i.e. which sector is driving
growth at a given time or which market segment (market capitalization) is
witnessing the latest rally.
But generally, there's a ceiling on how far the fund manager can go in a particular
market segment or sector. This helps in keeping the portfolio relatively diversified
and mitigate risks. In terms of risk-return trade-off, these funds are positioned
between large caps and mid caps. Some multi cap funds include - DSP ML
Opportunities, Tata Equity Opportunities, Principal Resurgent India Fund.
D) OTHER SCHEMES:
a) Tax Saving Schemes
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These schemes offer tax rebates to the investors under specific provisions of the
Indian Income Tax laws as the Government offers tax incentives for investment in
specified avenues.
Investments made in Equity Linked Savings Schemes (ELSS) and Pension
Schemes are allowed as deduction u/s 80c of the Income Tax Act, 1961.
The Act also provides opportunities to investors to save capital gains u/s 54EA and
54EB by investing in Mutual Funds. Typically returns for such schemes have been
found to be between 15-20%.
b) Index Funds
Index Funds replicate the portfolio of a particular index such as the BSE Sensitive
index, S&P NSE 50 index (Nifty), etc
These schemes invest in the securities in the same weightage comprising of an
index. For example, an Index fund which is trying to mirror the BSE-30 (Sensex)
will invest in only those 30 scripts that constitute this particular index.
NAVs of such schemes would rise or fall in accordance with the rise or fall in the
index, though not exactly by the same percentage due to some factors known as
"tracking error" in technical terms.
Necessary disclosures in this regard are made in the offer document of the mutual
fund scheme. Fund managing an index fund is usually called passive management
because all a fund manager has to do is to follow the index.
Volatility of such schemes is in sync with the index. A bull market could get you
as high as 40% returns over a period of one year. In a bad year (current year) it
could erode your principal by as much as 30%.
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c) Thematic Funds
Thematic Funds are those, which invest, exclusively in a specified sector. This
could be an industry or a group of industries or various segments such as 'A' Group
shares or initial public offerings. For example, Infrastructure Thematic fund shall
invest in companies like DLF, Ambuja cement etc., and not in Software Company
like Infosys.
Thematic Funds tend to have a very high risk-reward ratio and investors should be
careful of putting all their eggs in one basket.
Depending on the sector performance, returns vary on day to day basis. One year
returns can go as high as 50%.
RISK V/S. RETURN
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ROLE OF MUTUAL FUNDS IN FINANCIAL
MARKETS
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Mutual funds play a significant role in the development of the financial market &
this has been proved in the developed countries like United States, United
Kingdom & Japan. India is at its first stage of a revolution that has already peakedin United States. In United States, the asset base of mutual fund is much higher
than its bank deposits. In India, mutual funds assets are not even 10% of the bank
deposits, but this trend is only at the beginning. The mutual funds in India have
emerged as strong, financial intermediaries & are playing a very important role in
bringing stability to the financial system & efficiency to resource allocation.
Mutual funds help corporate in raising funds for their financial needs & provide an
avenue of investment t investors by parking their savings. This leads to overall
growth of the economy. The major chunk of the household savings in India, which
is earlier went back to bank deposit are now being taken by mutual funds. The
active involvement of mutual funds in promoting economic development can be
seen not only terms of their participation in the savings market but also in their
dominant presence in the money & the capital market. A developed financial
market is critical to build overall economic development & mutual funds play an
active role in promoting an active healthy market. Mutual funds increase liquidity
in the money market. The asset holding pattern of mutual fund in India indicates
the dominant role of mutual funds in the money & capital markets. The private
corporate sector in India is a deficit sector & the gap between demand & supply of
financial resources is met by funds raised through loans, advances & issuance of
securities. However, the buoyancy in the capital market has increased the relianceof the corporate sector has more than doubled. The changing pattern of corporate
financing indicates that the banking sector is loosing its prominence vis-a-vis the
other financial sector. Direct financing the corporate sector has substantially
increased after SEBI guidelines allowed the corporate sector reserves 20% of the
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public issues for Indian mutual funds. Mutual funds have also widened the private
placement market for corporate securities. Mutual funds have enabled the
corporate sector to raise capital at reduced costs & have opened an avenue for
alternate source of various financial segments like savings, capital market & the
corporate sector. As various tax incentives & benefits on mutual fund investments
are offered by the Government, their role in the mobilization of savings & the
development of the economy will assume more significance. They provide much
needed impetus to the money market & stock markets, in addition to direct &
indirect support to the corporate sector. Above all mutual funds have given a new
direction to the flow of personal savings & semi-urban areas to reap benefits ofstock market investments. Indian mutual funds are thus playing a very crucial
development role in allocating resources in the emerging market economy.
MUTUAL FUND COMPANIES IN INDIA
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UTI
Standard Chartered
Best Mutual Funds in India
Before knowing about the arguably best mutual funds in India, it is important to
know the factors that actually decide their fate in the market.
In order to get an actual ideal of the best performing mutual funds in the market,
one needs to track its current Net Asset Value or NAV. NAV stands for the latest
market value of the holdings of a fund that brings down the fund's liabilities, which
are generally indicated in terms of per share amount. On a daily basis, most of the
funds' NAV is decided. This is determined after the trade closes on certain
financial exchanges. The net asset value of the mutual funds is ascertained at the
end of the trading day. An increase in NAV signifies rise in the holdings of the
shareholder. The Fund Firm will then do the transaction on the shares along with
the sales fees. While open-ended net asset value of the mutual funds is issued
daily, the close-ended NAV of the mutual fund is released on a weekly basis.
You can calculate net asset value of the mutual fund easily. Track the latest market
value of the net assets of the fund and then subtract that by the number of
outstanding shares.
TOP MUTUAL FUNDS IN INDIA
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Here are some of the top mutual funds in India that are listed below:
Reliance Mutual Fund
HDFC Equity Fund
The DSP ML Tiger Fund
SBI Mutual Fund
Tata Company Mutual Fund
Reliance Mutual Fund
Reliance Mutual Fund (RMF) is one of Indias leading Mutual Funds, withAverage Assets Under Management (AAUM) of Rs. 1,15,753 Crores and an
investor count of over 75 Lakh folios. (AAUM and investor count as of February
2010) AAUM Source: http://www.amfiindia.com/
Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is
one of the fastest growing mutual funds in the country. RMF offers investors a
well-rounded portfolio of products to meet varying investor requirements and has
presence in 159 cities across the country. Reliance Mutual Fund constantly
endeavors to launch innovative products and customer service initiatives to
increase value to investors. "Reliance Mutual Fund schemes are managed by
Reliance Capital Asset Management Limited., a subsidiary of Reliance Capital
Limited, which holds 93.37% of the paid-up capital of RCAM, the balance paid up
capital being held by minority shareholders."
Reliance Capital Ltd. is one of Indias leading and fastest growing private sector
financial services companies, and ranks among the top 3 private sector financial
services and banking companies, in terms of net worth. Reliance Capital Ltd. has
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interests in asset management, life and general insurance, private equity and
proprietary investments, stock broking and other financial services.
Sponsor: Reliance Capital Limited
Trustee: Reliance Capital Trustee Co. Limited
Investment Manager: Reliance Capital Asset Management Limited
Statutory Details: The Sponsor, the Trustee and the Investment Manager are
incorporated under the Companies Act 1956.
Types of Investment Opportunities offered by Reliance:
Equity/Growth Schemes
The aim of growth funds is to provide capital appreciation over the medium to
long- term. Such schemes normally invest a major part of their corpus in equities.
Such funds have comparatively high risks. These schemes provide different
options to the investors like dividend option, capital appreciation, etc. and the
investors may choose an option depending on their preferences. The investors must
indicate the option in the application form. The mutual funds also allow the
investors to change the options at a later date. Growth schemes are good for
investors having a long-term outlook seeking appreciation over a period of time.
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The primary investment objective of the Scheme is to achieve long-term growth of capital by investment in equity and equity
related securities through a research based investment approach.
Scheme Information Document Fund ManagerAddenda KIM cum Application Form
Latest NAVs
Scheme Current NAV Nav Date
Dividend Plan 56.0002 18 Mar 2010
Growth Plan Bonus Option 72.4169 18 Mar 2010
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http://www.reliancemutual.com/CMT/Upload/OfferDocument/Reliance%20Growth%20Fund09.pdfhttp://www.reliancemutual.com/OurSchemes/EquityGrowthSchemes/Reliance%20Growth%20Fund.aspx#%23http://www.reliancemutual.com/Downloads/Addenda/Reliance%20Growth%20Fund.aspxhttp://www.reliancemutual.com/OurSchemes/EquityGrowthSchemes/Reliance%20Growth%20Fund.aspx#%23http://www.reliancemutual.com/CMT/Upload/OfferDocument/Reliance%20Growth%20Fund09.pdfhttp://www.reliancemutual.com/OurSchemes/EquityGrowthSchemes/Reliance%20Growth%20Fund.aspx#%23http://www.reliancemutual.com/Downloads/Addenda/Reliance%20Growth%20Fund.aspxhttp://www.reliancemutual.com/OurSchemes/EquityGrowthSchemes/Reliance%20Growth%20Fund.aspx#%23 -
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Growth Plan Growth Option 436.5663 18 Mar 2010
Institutional Plan - Bonus Plan 439.2867 18 Mar 2010
Institutional Plan - Dividend Plan 427.5073 18 Mar 2010
Institutional Plan - Growth Plan 439.2867 18 Mar 2010
Performance as on 26/02/2010Absolute Compounded Annualized
6 months 1 year 3 year 5 year Since Inception
Reliance Growth Fund - Retail Plan - Growth 14.23 112.69 15.18 28.28 29.50
BSE100 6.37 93.04 8.49 19.82 12.35
Past Performance may or may not be sustained in the future.
Aforesaid returns are Compounded annualized returns of Retail Plan - Growth Option. (Inception Date: 8th Oct 1995)
Calculations assume that all payouts during the period have been reinvested in the units of the scheme at the then prevailing NAV.
Product Features
Investment Objective :
The primary investment objective of the Scheme is to achieve long-term growth of capital by investment in equity and equity
related securities through a research based investment approach.
Asset Allocation:
InstrumentIndicative asset allocation
(% of total assets)Risk Profile
Maximum Minimum
Equity and Equity related Instruments 100% 65% High
Debt Instruments & Money Market Instruments 35% 0% Medium to Low
However, it may be understood that the above is only indicative. The above pattern may be altered by the Investment Manager in
line with the Investment Objective.
Fund Manager: Mr. Sunil Singhania
Plans Available: Retail Plan & Institutional Plan
Each of the above option will have Growth Plan & Dividend Plan as specified below
Growth Plan : Growth Option & Bonus Option
Dividend Plan : Dividend Pay-out Option & Dividend Reinvestment Option
Benchmark Index: BSE 100
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Minimum Application Amount
Retail Plan : Rs 5000 and in multiples of Re. 1 thereafter
Institutional Plan : Rs. 5 Crore in multiples of Re. 1 thereafter
Minimum additional purchase amount
Retail Plan : Rs 1000 and in multiples of Re. 1 thereafter
Institutional Plan : Rs. 1 Lakh in multiples of Re. 1 thereafter
Load Structure:
Entry Load Under both Retail and Institutional Plan NIL
In terms of SEBI circular no. SEBI/IMD/CIR No.4/ 168230/09 dated June 30, 2009, no entry
load will be charged by the Scheme to the investor effective August 1, 2009. Upfront
commission shall be paid directly by the investor to the AMFI registered Distributors based on
the investors' assessment of various factors including the service rendered by the distributor
Exit Load Retail Plan & Institutional Plan
If redeemed or switched out on or before completion of 1 year from the date of allotment of
units.
1%
If redeemed or switched out after the completion of 1 year from the date of allotment of units. Nil
Facilities Available:
Systematic Investment Plan Available
Systematic Transfer Plan Available
Systematic Withdrawal Plan Available
Reliance Salary AddVantage Available
Dividend Transfer Plan Available
Recurring Investment Plan for Corporate Employees Available
Trigger Facility Available
Online Transaction Available
Reliance SIP Insure Available
Reliance ATM card Available
Auto Debit & Electronic Clearing System Available
Applicable NAV :
Subscriptions/Purchases including switch - ins: In respect of valid applications received upto 3 p.m. by the Mutual Fund
alongwith a local cheque or a demand draft payable at par at the place where the application is received, the closing NAV of the
day on which application is received shall be applicable.
In respect of valid applications received after 3 p.m. by the Mutual Fund alongwith a local cheque or a demand draft payable at par
at the place where the application is received, the closing NAV of the next business day shall be applicable.
Redemptions including switch - outs: In respect of valid applications received upto 3 p.m. by the Mutual Fund, closing NAV of
the day of receipt of application, shall be applicable.
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In respect of valid applications received after 3 p.m. by the Mutual Fund, the closing NAV of the next business day shall be
applicable.
Disclaimer
Sponsor: Reliance Capital Limited. Trustee: Reliance Capital Trustee Co. Limited. Investment Manager: Reliance Capital
Asset Management Limited. Statutory Details: The Sponsor, the Trustee and the Investment Manager are incorporated under the
Companies Act 1956.
Debt/Income Schemes
The aim of income funds is to provide regular and steady income to investors.
Such schemes generally invest in fixed income securities such as bonds, corporatedebentures, Government securities and money market instruments. Such funds are
less risky compared to equity schemes. These funds are not affected because of
fluctuations in equity markets. However, opportunities of capital appreciation are
also limited in such funds. The NAVs of such funds are affected because of change
in interest rates in the country. If the interest rates fall, NAVs of such funds are
likely to increase in the short run and vice versa. However, long term investors
may not bother about these fluctuations.
A scheme that predominantly invests in State and Central Government Securities and Bonds giving a near zero credit risk option in
investment.
Scheme Information Document Addenda KIM cum Application Form
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Latest NAVs
Scheme Current NAV Nav Date
Institutional Dividend Plan 11.7626 18 Mar 2010
Institutional Growth Plan 11.7626 18 Mar 2010
Retail Dividend Plan 9.9812 18 Mar 2010
Retail Growth Plan 11.7536 18 Mar 2010
INSTITUTIONAL AUTOMATIC ANNUAL REINVEST OPTION 11.7626 18 Mar 2010
INSTITUTIONAL AUTOMATIC CAPITAL APPRECIATION PAYOUT OPTION 11.7626 18 Mar 2010
INSTITUTIONAL DEFINED MATURITY DATE OPTION 11.7626 18 Mar 2010
RETAIL AUTOMATIC ANNUAL REINVEST OPTION 11.7536 18 Mar 2010
RETAIL AUTOMATIC CAPITAL APPRECIATION PAYOUT OPTION 11.7536 18 Mar 2010
RETAIL DEFINED MATURITY DATE OPTION 11.7536 18 Mar 2010
Product Features
Investment Objective:
The primary investment objective of the scheme is to generate optimal credit risk free returns by investing in a portfolio of securities
issued and guaranteed by the Central Government and State Governments.
Asset Allocation:
InstrumentIndicative allocations
(% of total assets)Risk Profile
Maximum Minimum High/Medium/Low
Gilts 100 70 Low to Medium
Money Market Instruments 30 0 Low to Medium
Fund Manager: Prashant Pimple
Choice of Plans/Options:
The scheme offers Retail and Institutional Plan. Both these plans offer the following options:
Growth Plan
Dividend Plan:
o Dividend Pay-out Option
o
Dividend Reinvestment Option
PF option:
o Automatic Capital Appreciation Payout Option
o Defined Maturity Date Option
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o Automatic Annual Reinvest option
Benchmark Index: I Sec Li- Bex
Minimum Application Amount
o Retail Plan: Rs 10,000 per plan per option and in multiple of Re. 1 thereafter.
o Institutional Plan: Rs. 1 Crore per plan per option and in multiple of Re. 1 thereafter.
Minimum Additional Amount
o Retail Plan: Rs 1000 per plan per option and in multiple of Re. 1 thereafter.
o Institutional Plan: Rs. 1, 00,000 per plan per option and in multiple of Re. 1 thereafter.
Load Structure
Retail Plan & Institutional Plan:
o Entry Load - Nil
o Exit Load: - Nil
Pursuant to SEBI Circular No.SEBI/IMD/CIR No. 10/112153/07 dated December 31, 2007, with effect from January 4, 2008, no entry
load shall be charged in respect of direct applications received by Reliance Mutual Fund (RMF). Pursuant to SEBI circular
No.SEBI/IMD/CIR No. 14/120784/08 dated March 18, 2008, with effect from April 1, 2008, no entry load or exit load shall be charged
in respect of bonus units and of units allotted on reinvestment of dividend.
Performance as on 26.02.10
NAV Performance report as on 26/02/2010
Absolute Returns % CAGR % (Point to Point)
6 months 1 year 3 year 5 year Since Inception
Reliance G Sec Fund - Retail - Growth 0.96 1.86 N.A. N.A. 10.84
I-Sec Li-BEX 2.01 0.38 N.A. N.A. 15.50
Past Performance may or may not be sustained in the future.
Compounded annualized returns of Growth Option
Calculations assume that all payouts during the period have been reinvested in the units of the scheme at the then prevailing NAV.
Cut-off timings for income/debt oriented funds:
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For debt schemes: In respect of valid applications received upto 3 p.m. by the Mutual Fund along with a local cheque or a demand draft
payable at par at the place where the application is received, the closing NAV of the day on which the application is received shall be
applicable. In respect of valid applications received after 3 p.m. by the Mutual Fund along with a local cheque or a demand draft payable
at par at the place where the application is received, the closing NAV of the next business day shall be applicable.
(Business Day shall have the same meaning as working day, wherever used)
In respect of purchase of units in Income/ Debt oriented schemes (other than liquid fund schemes and plans) with amount equal to or
more than Rs. 1 crore, irrespective of the time of receipt of application, the closing NAV of the day on which the funds are available for
utilization shall be applicable.
Repurchase including Switch - out: In respect of valid applications received upto 3 p.m. by the Mutual Fund, same days closing NAV
shall be applicable. In respect of valid applications received after 3 p.m. by the Mutual Fund, the closing NAV of the next business day
shall be applicable.
Special Facilities:
Systematic Investment Plan (SIP) Available (only in Retail Plan)
Systematic Transfer Plan (STP) Available (only in Retail Plan)
Systematic Withdrawal Plan (SWP) Available (Both in Retail and Institutional Plan)
Dividend Transfer Plan (DTP) Available (Both in Retail and Institutional Plan)
Auto Debit and Electronic Clearing Service Available (Both in Retail and Institutional Plan)
Online Transactions Available (Both in Retail and Institutional Plan)
Disclaimer
Sponsor: Reliance Capital Limited Trustee: Reliance Capital Trustee Co. Limited Investment Manager: Reliance Capital Asset
Management Limited Statutory Details: The Sponsor, the Trustee and the Investment Manager are incorporated under the Companies
Act 1956.
Reliance Gilt Securities Fund (An Open-ended Govt. Securities Scheme): The primary investment objective of the scheme is to
generate optimal credit risk-free returns by investing in a portfolio of securities issued and guaranteed by the Central Government and
State Government.
Sector Specific Schemes
These are the funds/schemes which invest in the securities of only those sectors or
industries as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast
Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these
funds are dependent on the performance of the respective sectors/industries. While
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these funds may give higher returns, they are more risky compared to diversified
funds. Investors need to keep a watch on the performance of those
sectors/industries and must exit at an appropriate time. They may also seek advice
of an expert.
Exchange Traded Funds (ETFs)
Exchange Traded Funds (ETFs) are usually passively managed mutual fund
schemes tracking a benchmark index and reflect the performance of that index.
These schemes are listed on the stock exchange and therefore have the flexibility
of trading like a share on the stock exchange. It can also be looked as a security
that tracks an index, a commodity or a basket of assets like an index fund, but
trades like a stock on an exchange, thus experiencing price changes throughout the
day as it is bought and sold.
Fixed Maturity Plans (FMPs)
Fixed Maturity Plans (FMPs) are basically debt oriented investment schemes with
a pre-specified tenure offered by mutual funds. FMPs invest in a portfolio of debt
instruments whose maturity coincides with the maturity of the concerned FMP.
The primary objective of a FMP is to generate income while aiming to protect the
capital by investing in a portfolio of debt and money market securities. Since
FMPs are available with several maturity options, one can invest in the relevant
plan depending upon his investment horizon and the requirement of cash flows.
HDFC Asset Management Company Limited (AMC)
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HDFC Asset Management Company Ltd (AMC) was incorporated under the
Companies Act, 1956, on December 10, 1999, and was approved to act as an Asset
Management Company for the HDFC Mutual Fund by SEBI vide its letter dated
July 3, 2000.
The registered office of the AMC is situated at Ramon House, 3rd Floor, H.T.
Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai - 400 020.
In terms of the Investment Management Agreement, the Trustee has appointed theHDFC Asset Management Company Limited to manage the Mutual Fund. The
paid up capital of the AMC is Rs. 25.161 crore.
The present equity shareholding pattern of the AMC is as follows :
Zurich Insurance Company (ZIC), the Sponsor of Zurich India Mutual Fund,
following a review of its overall strategy, had decided to divest its AssetManagement business in India. The AMC had entered into an agreement with ZIC
to acquire the said business, subject to necessary regulatory approvals.
On obtaining the regulatory approvals, the following Schemes of Zurich India
Mutual Fund have migrated to HDFC Mutual Fund on June 19, 2003. These
Schemes have been renamed as follows:
*HDFC Sovereign Gilt Fund has been wound up in March 2006
The AMC is managing 24 open-ended schemes of the Mutual Fund viz. HDFC
Growth Fund (HGF), HDFC Balanced Fund (HBF), HDFC Income Fund (HIF),
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HDFC Liquid Fund (HLF), HDFC Long Term Advantage Fund (HLTAF), HDFC
Children's Gift Fund (HDFC CGF), HDFC Gilt Fund (HGILT), HDFC Short Term
Plan (HSTP), HDFC Index Fund, HDFC Floating Rate Income Fund (HFRIF),
HDFC Equity Fund (HEF), HDFC Top 200 Fund (HT200), HDFC Capital Builder
Fund (HCBF), HDFC TaxSaver (HTS), HDFC Prudence Fund (HPF), HDFC High
Interest Fund (HHIF), HDFC Cash Management Fund (HCMF), HDFC MF
Monthly Income Plan (HMIP), HDFC Core & Satellite Fund (HCSF), HDFC
Multiple Yield Fund (HMYF), HDFC Premier Multi-Cap Fund (HPMCF), HDFC
Multiple Yield Fund . Plan 2005 (HMYF-Plan 2005), HDFC Quarterly Interval
Fund (HQIF) and HDFC Arbitrage Fund (HAF).
The AMC is also managing 10 closed ended Schemes of the HDFC Mutual Fund
viz. HDFC Long Term Equity Fund, HDFC Mid-Cap Opportunities Fund, HDFC
Infrastructure Fund, HDFC Fixed Maturity Plans - Series V, HDFC Fixed Maturity
Plans - Series VII, HDFC Fixed Maturity Plans - Series VIII, HDFC Fixed
Maturity Plans - Series IX, HDFC Fixed Maturity Plans - Series X, HDFC Fixed
Maturity Plans - Series XI and HDFC Fixed Maturity Plans - Series XII.
The AMC is also providing portfolio management / advisory services and such
activities are not in conflict with the activities of the Mutual Fund. The AMC has
renewed its registration from SEBI vide Registration No. - PM / INP000000506
dated December 21, 2009 to act as a Portfolio Manager under the SEBI (Portfolio
Managers) Regulations, 1993. The Certificate of Registration is valid from January
1, 2010 to December 31, 2012.
Types of investment Opportunities offered by HDFC:
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HDFC Prudence Fund
Investment Objective
The investment objective of the Scheme is to provide periodic returns and capital appreciation over a long period of time, from a
judicious mix of equity and debt investments, with the aim to prevent/ minimise any capital erosion.
Basic Scheme Information
Nature of Scheme Open Ended Balanced Scheme
Inception Date February 01, 1994
Option/Plan Dividend Option,Growth Option. The Dividend Option offers Dividend Payout and
Reinvestment Facility.
Entry Load
(purchase / additional purchase / switch-in)
NIL
(With effect from August 1, 2009)
Exit Load
(as a % of the Applicable NAV)
In respect of each purchase / switchin of units, an Exit Load of 1.00% is
payable if Units are redeemed / switched-out within 1 year from the date of
allotment..
No Exit Load is payable if Units are redeemed / switched-out after 1 year from
the date of allotment.Minimum Application Amount For new investors :Rs.5000 and any amount thereafter.
For existing investors : Rs. 1000 and any amount thereafter.
Lock-In-Period Nil
Net Asset Value Periodicity Every Business Day.
Redemption Proceeds Normally dispatched within 3 Days
Tax Benefits
(As per present Laws)
Current Expense Ratio (#)
(Effective Date 22nd May 2009)
On the first 100 crores average weekly net assets 2.50%
On the next 300 crores average weekly net assets 2.25%
On the next 300 crores average weekly net assets 2.00%On the balance of the assets 1.75%
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HDFC Tax Saver (ELSS)
Investment Objective
The investment objective of the Scheme is to achieve long term growth of capital.
Basic Scheme Information
Nature of Scheme Open Ended Equity Linked Savings Scheme with a lock-in period of 3 years
Inception Date December 18, 1995
Option/Plan Dividend Option,Growth Option. The Dividend Option offers Dividend Payout and
Reinvestment Facility.
Entry Load
(purchase / additional purchase / switch-in)
NIL
(With effect from August 1, 2009)
Exit Load
(as a % of the Applicable NAV) No Exit Load shall be levied on bonus units and units allotted on dividend
reinvestment.
Minimum Application Amount For new & existing investors :Rs.500 and in multiples thereafter.
Lock-In-Period 3 Years from the date of allotment of the respective Units.
Net Asset Value Periodicity Every Business Day.
Redemption Proceeds Normally dispatched within 3 Business days(Subject to completion of Lock-in period)
Tax Benefits
(As per present Laws)
Current Expense Ratio (#)
(Effective Date 22nd May 2009)
On the first 100 crores average weekly net assets 2.50%
On the next 300 crores average weekly net assets 2.25%
On the next 300 crores average weekly net assets 2.00%
On the balance of the assets 1.75%
HDFC Gilt Fund - Short Term Plan
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Investment Objective
The primary objective of the Scheme is to generate credit riskfree returns through investments in sovereign securities issued by the
Central Government and/or a State Government.
Basic Scheme Information
Nature of Scheme Open Ended Income Scheme
Inception Date July 25, 2001
Option/Plan Dividend Option,Growth Option. The Dividend Option offers Dividend Payout and
Reinvestment Facility.
Entry Load
(purchase / additional purchase / switch-in)
NIL
(With effect from August 1, 2009)
Exit Load
(as a % of the Applicable NAV)
Nil
No Exit Load shall be levied on bonus units and units allotted on dividend
reinvestment.
Minimum Application Amount For new investors :Rs.5000 and any amount thereafter.
For existing investors : Rs. 1000 and any amount thereafter.
Lock-In-Period Nil
Net Asset Value Periodicity Every Business Day.
Redemption Proceeds Normally despatched within 3-4 Business Days
Tax Benefits
(As per present Laws)
Current Expense Ratio (#)
(Effective Date 22nd May 2009)
0.65%
DSP ML Asset Management Company
DSP BlackRock Investment Managers Pvt. Ltd. is the investment manager to DSP
BlackRock Mutual Fund.
The philosophy of DSP BlackRock Investment Managers Pvt. Ltd. has been
grounded in the belief that experienced investment professionals, using a
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disciplined process and sophisticated analytical tools, can consistently add value to
client portfolios.
DSP BlackRock Investment Managers Pvt. Ltd. takes a three dimensional
approach to the management of the organization, incorporating functional, product
and regional elements in support of clients' goals. The functional dimension looks
at the company's operations by specific task, such as portfolio management,
account management or operations. The product dimension brings together the
cross-disciplinary expertise critical to managing client assets in each class. Finally,
the regional aspect of the company's model recognizes the unique, geography-
specific needs of clients as well as the importance of local regulatory issues.
With our three-dimensional approach to managing the organization, we seek to:
Ensure consistency on a global basis;
Allow for the tailoring of products and services according to client or local
needs;
Promote teamwork among our employees worldwide; and
Facilitate operational integrity and efficiency
integrity and efficiency
Naganath - President & CIO
Anup Maheshwari - Exec. Vice President, Head Equities & Corporate
Strategy
Dhawal Dalal - Senior Vice President & Head Fixed Income Apoorva Shah - Exec. Vice President & Fund Manager
Pankaj Sharma - Exec. Vice President, Head of Business Development &
Risk Management
Ramamoorthy Rajagopal - Exec. Vice President, CAO
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Ajit Menon - Senior Vice President, Head of Sales
Types of Investment Opportunities offered by DSP ML:
Equity Schemes
Natural Resources & New Energy Fund
Micro Cap Fund
DSP Black rock Equity Fund
Top 100 Equity Fund
DSP Black Rock Opportunities Fund
DSP India T.I.G.E.R. Fund
Technology. Com. Fund
Small & Mid-Cap Fund
Tax Saver Fund
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Hybrid Schemes
Saving Manager Fund-Conservative, Moderate, Aggressive
Balanced Fund
An Open Ended income Scheme, seeking to generate an attractive return,
consistent with prudent risk, from a portfolio which is substantially constituted of
quality debt securities. The Scheme will also seek to generate capital appreciation
by investing a smaller portion of its corpus in equity and equity related securities
of the 100 largest corporate, by market capitalization, listed in India.
Plans Minimum Investment No Plans Regular Purchase Rs. 5,000 and
multiples of Re. 1/- thereafter.
SIP Rs. 1000 (Minimum 12
installments)Options Minimum Additional Purchase
Growth
Monthly Income Payment** (MIP)
Payout
Reinvest
Quarterly Income Payment (QIP)
Payout
Reinvest
Regular Rs.1000
Expense Ratio* Exit LoadPlan Ratio Plan % Load Holding Period
Regular 2.16% Regular 1%
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Investment Nil 12 months
Fixed Income Schemes
Liquidity Fund
Floating Rate Fund
Money Manager Fund
Treasury Bill fund
Short Term Fund
Bond Fund
Government Securities Fund
Strategic Bond Fund
The primary investment objective of the Scheme is to seek to generate capital
appreciation and provide long term growth opportunities by investing in equity and
equity related securities of companies domiciled in India whose predominant
economic activity is in the:-(a) discovery, development, production, or distributionof natural resources, viz., energy, mining etc; (b) alternative energy and energy
technology sectors, with emphasis given to renewable energy, automotive and on-
site power generation, energy storage and enabling energy technologies.
The Scheme will also invest a certain portion of its corpus in the equity and equity
related securities of companies domiciled overseas, which are principally engaged
in the discovery, development, production or distribution of natural resources and
alternative energy and/or the units/shares of BlackRock Global Funds New
Energy Fund, BlackRock Global Funds World Energy Fund and similar other
overseas mutual fund schemes. The secondary objective is to generate consistent
returns by investing in debt and money market securities.
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Plans Minimum Investment Regular
Institutional
Regular Rs. 5,000 and multiples of Re.
1/- thereafter
Institutional - Rs. 5 crore and multiples
of Re 1/- thereafter
SIP Rs. 1000 (min 12 installments)Options Minimum Additional Purchase
Growth
Dividend - Payout Reinvest
Regular Rs.1000
Institutional Rs.1000Expense Ratio* Exit LoadPlan Ratio Plan % Load Holding Period
Regular 2.01% Regular
(For Regular& SIP
Purchase)
1% < 12 monthsInstitutional 1.22% Nil
12months
Institutional 1% < 12 monthsNil 12months
Fund Of Fund Schemes
World Gold Fund
World Energy Fund
World Mining Fund
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SBI Mutual Fund
SBI Mutual Fund is Indias largest bank sponsored mutual fund and has an
enviable track record in judicious investments and consistent wealth
creation.
The fund traces its lineage to SBI - Indias largest banking enterprise. The
institution has grown immensely since its inception and today it is India's
largest bank, patronized by over 80% of the top corporate houses of the
country.
SBI Mutual Fund is a joint venture between the State Bank of India and
Socit Gnrale Asset Management, one of the worlds leading fund
management companies that manages over US$ 500 Billion worldwide.
In twenty years of operation, the fund has launched 38 schemes and
successfully redeemed fifteen of them. In the process it has rewarded its
investors handsomely with consistent returns.
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A total of over 5.8 million investors have reposed their faith in the wealth
generation expertise of the Mutual Fund.
Schemes of the Mutual fund have consistently outperformed benchmark
indices and have emerged as the preferred investment for millions of
investors and HNIs.
Today, the fund manages over Rs. 38,782 crores of assets and has a diverse
profile of investors actively parking their investments across 38 active
schemes.
The fund serves this vast family of investors by reaching out to them through
network of over 130 points of acceptance, 28 investor service centers, 46
investor service desks and 56 district organizers.
SBI Mutual is the first bank-sponsored fund to launch an offshore fund
Resurgent India Opportunities Fund.
Growth through innovation and stable investment policies is the SBI MF
credo
Types of Investment Opportunities Offered By SBI:
Equity Schemes
The investments of these schemes will predominantly be in the stock markets
and endeavor will be to provide investors the opportunity to benefit from the
higher returns which stock markets can provide. However they are also
exposed to the volatility and attendant risks of stock markets and hence
should be chosen only by such investors who have high risk taking
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capacities and are willing to think long term. Equity Funds include
diversified Equity Funds, Sectoral Funds and Index Funds. Diversified
Equity Funds invest in various stocks across different sectors while sectoral
funds which are specialized Equity Funds restrict their investments only to
shares of a particular sector and hence, are riskier than Diversified Equity
Funds. Index Funds invest passively only in the stocks of a particular index
and the performance of such funds move with the movements of the index.
Debt Schemes
Debt Funds invest only in debt instruments such as Corporate Bonds,
Government Securities and Money Market instruments either completely
avoiding any investments in the stock markets as in Income Funds or Gilt
Funds or having a small exposure to equities as in Monthly Income Plans or
Children's Plan. Hence they are safer than equity funds. At the same time the
expected returns from debt funds would be lower. Such investments are
advisable for the risk-averse investor and as a part of the investment
portfolio for other investors.
Balanced Schemes
Magnum Balanced Fund invest in a mix of equity and debt investments.
Hence they are less risky than equity funds, but at the same time provide
commensurately lower returns. They provide a good investment opportunity
to investors who do not wish to be completely exposed to equity markets,
but is looking for higher returns than those provided by debt funds.
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Exchange Traded Schemes
SBI Gold Exchange Traded Scheme
Tata Asset Management Company
Overview
At Tata Asset Management Company, we believe that your investment needs
depend on personal and financial goals. Identifying your financial goals is the key
to achieving the big things in your life, be it your child's education or a carefree
and comfortable retired life.
After identifying and defining your financial goals, you now need to plan for each
of them in an organised and a professional way. Investment experts around the
world advise instruments like equity funds and stocks for long-term (more than 5
years), income funds for medium-term and liquid funds for short-term needs.
The investment matrix here depicts the entire available variety of investment
options. Those at the top provide for a greater opportunity for long-term capital
growth while those at the bottom take care of current income and reasonable return
& liquidity. Tata Mutual Fund offers a wide range of funds for different
investment instruments designed to cater to your individual profile and life-stage.
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Types Of Investment Opportunities Offered By Tata:
Type of Scheme A 36 months close ended hybrid scheme.
Launch Date April 27, 2009
Fund Objective The primary objective of the scheme is to generate returns by investing
systematically in equity / equity related instruments.
Asset Allocation Scheme A:
During first twelve months from the date of allotment
Proportion** (% of Funds Available / Net Assets)
Instrument Minimum MaximumRisk
ProfileEquity & equity related
instruments0 100 High
Debt, Money Market andSecuritized Debt
Instruments*
0 100Low to
medium
After completion of twelve months till maturity
Proportion** (% of Funds Available / Net Assets)
Instrument Minimum MaximumRisk
Profile
Equity & equity relatedinstruments
65 100 High
Debt, Money Market and
Securitized Debt
Instruments*
0 35Low to
medium
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Type of Scheme An open-ended balanced fund
Launch Date August 30, 1995
Fund Objective The investment objective of the scheme is to provide income
distribution and / or medium to long term capital gains while at all
times emphasising the importance of capital appreciation.Fund Investment
Strategy
The scheme will invest in equity and equity related instruments as well
as in debt and money market instruments.
Asset Allocation
Instruments
Indicative
allocations**
( % of total assets)
Risk Profile
MinimumMaximum High/Medium/Low
Equity and Equity Related
Instruments75 65 High
Debt*, Money Market and
Cash35 25 Low to Medium
** At the time of investment.
Investment by the scheme in securitised debt, will not normally
exceed 50% of the debt investments in the scheme.
Investment in derivatives/ futures/ options may be done for hedging
and portfolio balancing.
Liquidity NAV calculation on all business days
Options Available Growth & Dividend
Minimum Application
AmountRs.5,000/- and in multiples of Re.1/- thereafter
Type of Scheme A 36 months close-ended hybrid fund.
Launch Date May 10, 2007
Fund Objective The primary Investment Objective of the scheme is to achieve a long
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term growth. The scheme seeks to achieve its investment objective by
investing systematically in Equity / Equity related instruments.
Asset Allocation - Year
1
Proportion** (% of Funds Available / Net Assets)
Instrument% of Funds
AvailableMinimum Maximum Risk Profile
Equity & equity related
instruments0 35 High
Debt, Money Market and
Securitized Instruments65 100
Low to
Medium
Asset Allocation - Year
2
Proportion** (% of Funds Available / Net Assets)
Instrument% of Funds
Available
Minimum Maximum Risk ProfileEquity & equity related
instruments30 70 High
Debt, Money Market and
Securitized Instruments30 70
Low to
Medium
Asset Allocation - Year
3
Proportion** (% of Funds Available / Net Assets)
Instrument% of Funds
Available
Minimum Maximum Risk Profile
Equity & equity related
instruments65 100 High
Debt, Money Market and
Securitized Instruments0 35
Low to
Medium
* Investment by the scheme in securitised debt will not normally
exceed 20% of net assets of the scheme
** At the time of investment
Options Available Dividend & Growth
Load Structure Entry Load - Nil.Exit Load - Nil *
* An early exit charge equivalent to the unamortised new fund offer
expenses will be recovered from the investor in case of redemption
before expiry of 3 years from the date of allotment
Minimum Application Rs.5,000/- & in multiples of Re.1/- thereafter.
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Amount
Debt Products
Type of Scheme An open-ended dedicated Government Securities Fund
Launch Date August 3, 1999
Fund Objective The investment objective of the Scheme will be to generate risk-free
return and thus provide medium to long term capital gains and income
distribution to its unitholders, while at all times emphasising the
importance of capital preservation.
Fund Investment
Strategy
The investments would be solely in sovereign securities issued by the
Central Government and/or State Government and/or any securityunconditionally guaranteed by the Government of India.
Asset Allocation 1) Regular Plan / High Investment Plan
Instruments
Indicative allocationsRisk Profile
(% of total assets)
Maximum Minimum High/Medium/Low
Government Securities 100 65 Low to Sovereign
Money Market Instruments 35 0 Low to Medium
2) Short Maturity Plan
Instruments
Indicative allocationsRisk Profile
(% of total assets)
Maximum Minimum High/Medium/Low
Government Securities 100 65 Low to Sovereign
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Money Market Instruments 35 0 Low to Medium
Liquidity Purchase and sale on all business days.
Options Available Regular Plan
Short Maturity Plan
High Investment Plan
Retirement Planning Series
Under each plan there is Dividend / Bonus and Growth options
NAV Calculation On all business days
Minimum Application
Amount
Rs.10,000/- & in multiples of Re.1/- for Regular & Short Maturity
Options .
Rs. 50,000/- & in multiples of Re.1/- for High Investment Plan &
Retirement Planning Series
GOVERNANCE OF MUTUAL FUND INDUSTRY
Securities & Exchange Board of India (SEBI) is the apex regulator of capital
markets. Issuance & trading of capital market instruments & the regulation of
primary regulator of mutual funds in India. SEBI has enacted the SEBI (Mutual
Funds) Regulations, 1996, which provides the scope of the regulation of mutual
funds in India. It is mandatory that mutual funds should be registered with SEBI.
The structure & the formation of mutual funds, appointment of key functionaries
& investors, investment restrictions, compliance & penalties are all defined under
SEBI Regulations. Mutual funds have to send a seven-year compliance reports to
SEBI. SEBI is also empowered to periodically inspect mutual fund organizations
to ensure compliance with SEBI regulations. SEBI also regulates other fund
constituents such as AMCs, trustees, custodians etc.
RBI is the monetary authority of the country & is also the regulator of the banking
system. Earlier bank sponsored mutual funds were under the dual regulatory
control of RBI & SEBI. Money market mutual funds which invested in short-term
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instruments were also regulated by the RBI. These provisions are no longer in
vogue. SEBI is the regulator of all mutual funds. The present position is that RBI
is involved with the mutual funds industry, only to limited extent of being the
regulator of the sponsors of bank-sponsored mutual funds. Specifically if the
sponsor has made any financial commitment to the investors of the mutual funds,
in the form of guaranteeing assured returns, such guarantees can no longer be
made without the prior approval of the RBI. RBI will review the financial
condition & capital adequacy of the sponsored bank, before permitting it to make
such guarantee.
RBI is the issuer of government securities & also the regulator of money market.
Mutual funds invest in these securities & are affected by the RBI stipulations on
the structure pricing & trading of these instruments. The finance ministry is the
supervisor of both RBI & SEBI. The ministry of finance is also the appellate
authority under SEBI regulations. Aggrieved parties can also make appeals to the
MOF on the SEBI rulings relating to mutual funds.
The AMC & the trustees company may be structured as limited companies, which
come under the regulatory purview of the Company Law Board (CLB). The
provisions of the Companies Act 1956 are applicable to these company forms of
organizations. The CLB is the apex regulatory authority for companies also the
appellate authority for all the issues relating to the Companies Act. Any
grievances against the AMC or the trustees company can be addressed to the CLB
for redressed. The Registrar of Companies overseas the compliance by the AMC &
trustee company, with the provisions of the Companies Act. Periodic reports &
annual accounts have to be filed by these companies with the ROC. The
Department of Company Affairs (DCA) is responsible for the
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Formulation & modification of the laws relating to companies including the Indian
Companies Act. The DCA also has the powers to prosecute directors for non-
compliance with provisions of the Act.
If a mutual fund has listed its scheme on stock exchanges, such listings are subject
to the listings regulations of stock exchanges. Mutual funds have to sign the listing