BASIC OF MUTUAL FUND

WHAT IS A MUTUAL FUND ? A mutual fund is a pool of money collected from many investors and is collectively managed by an asset management company according to stated investment objectives.

HOW TO WORK MUTUAL FUND?

INVESTOR ▼ RETURN ► ◄ FUNDMANAGER ▲ SECURITIES

WHO CAN INVEST?  Resident Indian Individuals  Indian Companies  Trusts / charitable institutions  Banks  Insurance Companies  NRI  Partnership firms etc.

TYPE OF MUTUAL FUND  Open ended fund  No entry load pay in open ended fund. (w.e.f. 1 st Aug 09) Open ended fund’s NAV declare daily.  Close ended fund No entry load pay in close ended fund. Close ended fund’s NAV declare weekly.

TYPE OF FUNDS  Equity fund ( 65% equity & related securities & 35 % debt market)  Debt fund  Balance fund  Equities Linked Saving Scheme

WHY MUTUAL FUND NOT DIRECT EQUITY?  Stock markets are very sophisticated  Free pricing and liquidity  Time, knowledge and luck  Substantial capital for diversification

AFFORDABILITY  Provide an opportunity for a small investor.  Minimum invest 5000 in lumsum investment.  Minimum invest 500 in SIP.

VARIED CHOISE  Offer a Variety of schemes.  Meet the investment need of all investor.

NEED SPECIFIC  Short Term – Banks / Liquid fund  Medium Term – Debt or Deb related funds (1 to 3 years) - Mix of debt & Equity (3 to 5 years) - Eqity or equity related securities  Long Term - Equity Funds

TAX-BENEFIT  Income tax benefit  Dividend are tax exempt in investor’s hand  No TDS in case of redemption  Tax benefit available to investor under Sec 80c  80 to 100% diversified equity & 20% money market instrument

Investment Option & Features  OPTION Growth Dividend - Div.payout / re-invest  PLANS SIP - Systematic Investment Plan STP - Systematic Transfer Plan SWP - Systematic withdrawal Plan

LOAD CALCULATION  Entry Load paid at the time of entry Nav =10 Load= Nil Total Nav =10  Exit Load paid at the time of exit Nav =10 Load =1% (If the redemption before one year ) Nav decluding Load=10*1%=0.1 Total Nav = 9.9 (10-0.1)

NAV - COMPUTATION NAV = Net Asset of Scheme / No of unit outstanding

FOR DISTRIBUTORS  Companies, firms or individuals who sell mutual funds and receive an agreed commission from the Fund for their efforts.  Advisory  Service & Collect application (with Pan card)  Application send to AMC ( Assest Management Company )

THANKS “ MUTUAL FUND INVESTMENT IS SUBJECT TO MARKET RISK ”