Escolar Documentos
Profissional Documentos
Cultura Documentos
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Growth of AUM
31 3 -1999 68,472 CRORES
31-03-2001
90587 CRORES
31-03-2004
139616 CRORES
30-11-2008
4,02,000 CRORES
31-12-2012
7,95,000 CRORES
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90,636
4.99
81,394
6.55
76,890
5.47
70,638
-0.20
53,311
4.62
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Load Fund / No-Load Funds : entry / front & exit / back load
Tax-exempt / Non-Tax exempt Funds
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ROI with Loads Amount invested = 11 + 0.22 = 11.22 Rs. Amount received = 12 0.12 = 11.88 Rs. Gain = 0.66 Rs. ROI = (0.66 x 100) /11.22 = 5.88%
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Charges varying with the holding period it is called Contingent Deferred Sales Charge (CDSC) and it may vary as shown under.
Redemption during the first five years from the date of purchase
First Year Second Year Third Year Fourth Year Fifth Year Maximum CDSC 4% Maximum CDSC 3% Maximum CDSC 2% Maximum CDSC 1% Nil
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Types of Funds
Money Market Funds Gilt Funds Debt Funds Equity Funds Hybrid Funds ETF Commodity Real estate
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Gilt Funds
Invest only in Government Securities of over 1 year maturity Risk and return low but higher than that of MMF No default risk but carry interest rate risk Fund values drop when interest rates go up & rise when interest rates go down Returns from 11 % to 14 %
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Other Funds
Commodity Funds
Real Estate Funds
:
:
Fund of Funds
Invest in commodity stocks Invest in stocks of real estate companies :Trade like a single stock on exchange Invest in other Mutual Fund Schemes
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Balanced Funds
Debt Funds Gilt Funds
Risk Low
MMMF
Low return
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High return
Investments plans
SIP SWP STP VIP
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Mutual Funds are Public Trusts under the Indian Trusts Act, 1882
Mutual Fund is a 3 tier structure:
Sponsor, Trustee and AMC
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All gains and losses of funds are shared by the unit holders
MF is a pass-through structure and it has tax implications
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2.
3. 4. 5. 6.
Trustees
Asset Management Company Custodian / Depository Participant R & T Agent Distributors
7.
Banker
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Role of Sponsor
Sponsor is a person who sets up a Mutual Fund Sponsor settles the Trust and executes Trust Deed Sponsor contributes to the initial capital of the Trust Sponsor appoints the Board of Trustees Sponsor appoints Asset Management Company Sponsor contributes minimum 40% of net worth of AMC
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Role of AMC
AMC is the Fund Manager for managing Mutual Fund Assets AMC floats different MF schemes
Obligations of AMC
Limit of 5% of aggregate purchase and sales of Securities under all its scheme per broker per quarter As far as possible AMC to avoid services of its sponsor. All Security transactions with a Sponsor and his associates to be disclosed Disclosure of transactions with a company which has invested more than 5% of NAV in any scheme
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OFFER DOCUMENT
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KIM
A abridged version of Offer Document A part of the Application Form To be in the format as prescribed by SEBI
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Offer Document
Offer Document prepared and issued by AMC Offer Document to be approved by Trustees Offer Document filed with SEBI with fees of Rs. 25000/ Modifications if any advised by SEBI within 21 days of its filing SEBI neither approves nor disapproves an OD Offer Document valid for 6 months for launching of scheme from the date of receipt of by AMC of SEBI letter containing observations. Thereafter fresh OD to be filled with SEBI
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Risk factors: Standard & Scheme Specific Legal & Regulatory Compliance Certificate Financial information on Schemes & Expenses for last 3 years Constitution of MF its Sponsors, Trustees, AMC & their functions Investment objectives & policies Management of Funds: Names of Fund Manager Offer related information: Minimum Subscription amount
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Charges in a MF
Mutual Funds can recover two types of Expenses a. Initial issue expenses b. Recurring Expenses Initial Issue Expenses
effective April 04 2006 allowed up to 6% for Close Ended Funds only Close Ended Funds cannot charge Entry Loads Open Ended Funds can recover initial expenses through Entry Load
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Asset Management Fees are not in addition to but a part of Recurring Expenses Asset Management fees are usually lower for Debt Funds as compared to Equity Funds and are disclosed in OD
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Investor existing before expiry of period of scheme will be charged unrecovered initial issue expenses
Conversion of close ended funds into open ended funds allowed only after recovery of unrecovered initial expenses Un-amortized portion added for NAV calculation as Other Asset but no AMC fee on this amount
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Investment by a Mutual Fund in ADRs / GDRs allowed Investment by a M.F. in Equities of listed overseas companies having share holding of at least 10% allowed Overall limit of U.S. $ 5 Billion for such overseas investment for entire M.F. industry Overall limit per M.F.
Not exceeding 10% of Net Assets subject to maximum USD 300 Million
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The above limit does not apply to Fund of Funds Securities are to be bought or sold only on delivery basis No short selling allowed Securities to be bought and sold for a relevant scheme. Purchases/Sales cannot be aggregated and allocated later
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A Mutual Fund can invest in listed securities of the sponsor / Sponsor Group Companies upto 25% of Net Assets of the Fund
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A Mutual fund can transfer Securities from one scheme to another scheme at market prices and on spot delivery basis Inter-scheme transfers allowed if objectives of both the schemes are same A Mutual fund can park its money in deposits of Scheduled Commercial Banks pending deployment into regular investments Borrowing by MFs restricted upto 20% of Net Assets for maximum 6 months for paying dividend/redeeming units Record of investment decisions to be maintained. A FOF cant invest in other FOF scheme
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Income Ratio =
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Regulators in India
SEBI is Capital Market Regulator with legal powers
SEBI regulates Mutual Funds. All Mutual Funds to be registered with SEBI
RBI is Money Market Regulator SEBI is regulator for Liquid Funds Investing in MM instruments
Regulators in India
DCA frames and modifies regulations relating to the companies DCA is a part of Company Law Board CLB is a part of Ministry of Law and Justice
Company Law Board carries out judicial proceedings for offences under Companies Act
Mutual Fund Trustees accountable to Public Trustees
SRO is an association of Market Participants Approval of SRO given by MOF All Stock Exchanges are SROs and are supervised by SEBI Close Ended Funds listed on SE observe listing Agreement Requirements of SEs
AMFI was incorporated in 1995 and is not an SRO Role of AMFI
To promote interest of MFs & Unit Holders To set ethical, commercial & professional standards To increase public awareness of MF industry
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