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CONTENT
MEANING OF MUTUAL FUND WORKING REGULATORY BODY HISTORY TYPES ADVANTAGES DISVANTAGES SELECTION PROCEDURE HOW TO INVEST INVESTMENT MENU CARD SEBI REGULATION MANAGEMENT
MUTUAL FUND A mutual fund is the trust that pools the savings of a number of investors who share a common financial goal.
Securities Exchange Board of India (SEBI) is the regulatory body for all the mutual funds. All the mutual fund must get registered with SEBI.
BRIEF HISTORY
1964- UTI was established. 1987- entry of Public Sector banks. Canara bank (Canbank) SBI (magnum regular income) 1989- LIC (dhanraksha, dhanvridhi)
SCHEMES OF MF
TYPES
OWNERSHIP
SCHEMES OF OPERATION
PORTFOLIO
LOCATION
ACCORDING TO OWNERSHIP
OWNERSHIP
PUBLIC SECTOR
PRIVATE SECTOR
SCHEMES OF OPERATION
INTERVAL SCHEMES
PORTFOLIO
INCOME FUND GROWTH FUND BALANCED FUND
STOCK/EQUITY FUND
BOND FUND SPECIALISED FUND TAXATION FUND
ACCORDING TO LOCATION
LOCATION
DOMESTIC FUNDS
OFF-SHORE FUNDS
INVESTING CHECKLIST
Draw up your asset allocation
Financial goals & Time frame (Are you investing for retirement? A childs education? Or for current income? ) Risk Taking Capacity
CHECKLIST CONTD
Think hard about investing in sector funds
For relatively aggressive investors Close touch with developments in sector, review portfolio regularly
Mutual Funds
ULIP Direct Equity Gold Real Estate
Market Linked
Market Linked Market Linked Market Linked Market Linked
Step 1 Identify your investment needs 1. What are my investment objectives and needs? 2. How much risk am I willing to take? 3. What are my cash flow requirements?
SEBI REGULATION,1996
MANAGEMENT OF MUTUAL FUND Sponsor AMC (Asset Management Company) Custodian Trustee
Sponsor :Any person who alone or in combination with another body establish a mutual fund is called as sponsor
Trustee :Trustee is a person who holds the property of MF interest for the benefit of unit holders and includes a trustee company and directors of trustee company
AMC :The sponsor or the trustee shall appoint an AMC. The application for AMC has to be made in form D. Custodian:Custodian is a person who has been guaranteed is a certificate of registration to carry on the business of custodian of securities.
THE SPONSOR
Application and Fee Eligibility Criteria Grant of Certificate of Registration Service Fee
Net Asset as on 31st March (RS. Crores) Upto 500 500-1000 1000-3000 3000-5000 5000-10000 Above 10000 Services fee payable (rs. Lakhs) 2.50 3.50 4.50 5.50 6.50 7.50
THE TRUSTEES
Regulation 14: Trust deed to be registered under the Registration Act Regulation 15: Contents of trust deed Regulation 16: Disqualification from being appointed as trustees Regulation 17: Approval of the Board for appointment of trustees Regulation 18: Rights & obligations of the trustees
CUSTODIAN
Regulation 26: Appointment of custodian Regulation 27: Agreement with the custodian
ADVERTISEMENT CODE
An investment shall be truthful, fair, clear, and shall not contain a statement, promise or forecast which is untrue or misleading. The advertisement not to be designed in content and format or in print as to be likely to disguise the significance of any statement. The sales literature may contain only information.
SUMMING UP
A mutual fund represents a vehicle for collective investment. In India, the following entities are involved in a mutual fund operation the sponsor, the mutual fund, the trustees, the AMC, the custodian, and the registrars and transfer agents. A mutual fund scheme may be a close-ended or an open-ended scheme. Mutual funds invest in three broad categories of financial assets: stocks, bonds, and cash. The investments of a mutual fund are subject to certain regulations.
Mutual fund schemes are periodically evaluated by independent institutions. Mutual funds offer various options and value-added services to attract and retain customers. Mutual funds offer the advantages of diversification, professional management, liquidity, assured allotment, tax savings etc.