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markets
Managed by a professional
investor
Ownership of fund is mutual ,
beneficial & proportionate to
contributions
made by each investor
Asset Management
Company Ltd.
HDFC Asset mgt co.
Franklin Templeton asset
mgt(India) Pvt. ltd.
IDBI Asset mgt ltd.
UTI Asset mgt Co.
16-3
Disadvantages
1.Diversified portfolio of
investments
3.Easy Liquidity
Importance of Mutual
Funds
Objectives of Mutual
Funds
Current
income
Long-term
Growth
growth
and income
Balanced
2.Units can be purchased from MF 2.Units open for sale & purchase
during NFO period only
from MF at all times.
3.No. of units & unit capital
remains constant
No Load Funds
Investment Class
Objective
Risk
Time
Horizon
Equity Fund Growth Fund
High risk fund Long Term
Debt Fund Income Fund
Moderate Risk Medium Term
Money Market Fund
Low Risk Fund
Short Term
Hybrid Funds
Funds-Invest in stocks of
commodity companies
Real Estate Funds-Invest in stocks of
real estate companies
Exchange Traded Funds-Trade like a
single stock on the stock Exchange
Fund of Funds-Invest in other mutual
funds
funds.
These mutual funds invest in stocks,
bonds, and money markets.
These are very diversified mutual
funds. The stock portion of the fund
provides the potential for capital
appreciation, while the bond and
money market portion provide
income.
Open-End Investment
Companies
Investors
Closed-End Investment
Companies
Sell only the initial offering
Subsequent trades are done in a
secondary market, similar to the
common stock market
Have a limited number of shares
Purchase and selling price is determined
by
supply
and demand
that
are
investment performance
Tax efficiency
Fee structure
How particular fund fits into your
portfolio
Investment skills of fund managers
Load or No-Load funds
Closed-End or Open-End funds
Sources of Return
from Mutual Funds
Dividend
income
Capital gains distributions
Change in price/NAV
Trustee
Mutual
Fund is managed by a
Trustees
It is the responsibility of the Trustees
to protect the Interest of the
Investors/unit holders.
AMC , Custodian & Depository
Participant are accountable to
Trustees
Asset Management
Company
Trustees
registered only
Appointed by Trustees
Keeps record of unit holders account
Issues , redeems , transfers units of
mutual fund schemes.
Distributors
appointed by AMC
Role of AMFI
To promote interests of MFs & unit holders
Offer Document
company
Price of units
Opening , closing dates
Mandatory Statements
NAV
NAV
Investment
Objective
Equity
Capital
appreciation
High
Long Term
FI Bonds
Income
Low
Med-Long
Bank Deposits
Income
Low
Flexi-All times
PPF
Income
Low
Long Term
Life Insurance
Risk Cover
Low
Long Term
Gold
Inflation Hedge
Low
Long Term
Mutual Funds
Flexi-All Terms