1. MUTUAL FUNDSKAUSHIK RAJAPondicherry University - MBA

2. What is Mutual Fund A Mutual Fund is an investmenttool that allows small investorsaccess to a well-diversified portfolioof equities, bonds and othersecurities. 3. Why Mutual Fund Expertise DiversificationHISTORY The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank. 4. SegmentationTwo segments1) Do-it-yourself - PortfolioManagement [softwarethat improves tradeexecution, hiring skilledanalysts]2) Broker services [hiringclient service personneldedicated to supportingbroker inquiries, less inportfolio management ] 5. How companies promote theirproducts Certified Agents [Sale andDistribution] - Certificationfrom the National Instituteof Securities Market(NISM) by passing theircertification examinationNISM Series V-A : MutualFund DistributorsCertification Examination. Service Centres Company web portal Little promotion in printmedia 6. Outdoor advertising through large size BillBoards/Hoardings Retail Bank - the reputations of the banks werealso stated to have played a key role inpopularizing Mutual Fund 90% of the customers said that they wouldprefer to buy Mutual Fund Products from banksdue to existing personal relationship with banks. 7. Awards and Ratings CNBCTV 18 CRISIL ICRA Indian Credit Rating Agency 8. Thomson Reuters & Lipper NDTV Profit 9. Morning Star 10. SEBI Guidelines Refrain from using exaggerated or unwarranted claims, superlatives and opinions While advertising pay- out of dividends, it shall be disclosed that after the payment of the dividend 11. FORMS OF ADVERTISEMENTSTombstone Advertisement:A fund which is already launched and isin existence Allowed - Name of the mutualfund, Assets ManagementCompany, Scheme classification (i.e.income/growth etc.,), Logo ortrademark, Invitation to inquire forfurther information, Entry and exitloads. Prohibited - Performance of thefund, Promise of anyreturns, Comparisons and usage ofranking given by a third party. 12. Product Launch Advertisement:Launch and re-launch offunds/schemes Must Have Name of the Fund, theAsset Management Company, Schemeclassification (i.e. income/growth etc.,),Investment objective, Investorbenefits, general services offered,Logo, corporate symbol, if any, Riskfactors as stated in the offer document,Entry and exit loads applicable. Prohibited - Performance figures ofany of the previous schemes,comparisons with any otherfunds/schemes, and rank by anyranking agencies. 13. Advertisements through Hoardings / Posters Mutual Fund investments are subject to marketrisks, read the offer document carefully beforeinvesting. The above statement shall be displayed in blackletters of at least 8 inches height or covering10% of the display area, on white background. 14. Advertisements through Audio-VisualMedia Mutual Fund investmentsare subject to marketrisks, read the offerdocument carefully beforeinvesting Shall be displayed for atleast 2 seconds Covering at least 80% ofthe total screen space andaccompanied by a voice-over reiteration. 15. Why people dont invest inMutual Fund in General1) IgnoranceNine in ten people withincomes in India do notknow that mutual fundsexist.If people came to knowthen 1 in 5 people investin Mutual Fund2) Averse to risk taking 16. 3) AMCs anddistributors have alimited focusbeyond the top 20cities4) No distinctionbetween MutualFunds and directstock marketinvestments 17. 5)The Indian mutual fundindustry has largely beenproduct-led and not sufficientlycustomer focused.6)The industry has had alimited focus on innovation andnew product developmentProducts that cater specificallyto customer life stage needssuch as education, marriage,and housing are yet to findtheir way in the Indian market. 18. 7)Limited Focus of the PublicSector Network on Distribution ofMutual Funds.8)Regulation of Mutual Funds thanits competing products ULIPs which are deemed to becompeting products do not havethe mandatory PAN requirement. While the payment for investmentinto mutual funds can be madeonly through banking facilities, thepurchase of ULIPs can beundertaken through cash. 19. 9) Mutual fund industry in USspends $6 billion a year onadvertising. Mutual fund industry in Indiaspends around 200 crorerupees on advertising. Reason: Institutionalsegment comprises morethan 60 % AUM (AssetsUnder management) share 20. CASE STUDY:Fidelity Investments It was founded in 1946 and serves NorthAmerican investors. The companys largest equity mutual fund isContrafund, which has more than $68 billion inassets FILs offices include asset managementcompanies in 10 locations offices in 23 countries, employing more than4,000 people 21. Why FidelityAt Fidelity you are with a leader: Morningstar Highlyrated Funds No load, notransaction fees Guidance with freeportfolio planning 22. How It Works 23. Personalization Help Americans assess their financial situations and map out a savings plan based on their specific needs and goals. 24. Marketing Campaign - Turn Here The new campaign, created by Fidelitys internal advertising agency in partnership with Boston- based Arnold Worldwide 25. Fidelity Charitable Independent Publiccharity Since 1991, FidelityCharitable has helpeddonors support over150,000 non profitorganizationswith more than $12billion in grants. Fidelity Charitabledonors made morethan $1.3 billion in2011. 26. Reference www.piperjaffray.com/pdf/understandingmutualfundpricing.pdf http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1713940 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1474955 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1472156 http://papers.ssrn.com/paper.taf%3FABSTRACT_ID%3D239851 http://www.mutualfundsindia.com/ www.pwc.com/in/en/assets/pdfs/industries/towards-2015-141211.pdf www.mutualfundsummit.com/image/pdf/MF_09_Broch