For Internal Use Only / Not for Distribution to the Public

Introduction to Mutual Funds, its benefits and Regulatory structure

An Investor Education & Awareness Initiative By Franklin Templeton Mutual Fund

For Internal Use Only / Not for Distribution to the Public

• Pools of Investment

• Each Pool of money is called a Mutual Fund Scheme

• Mutual funds assist in Earning Income or Building Wealth

• Utilise the knowledge and experience of a professional fund

management team

• Benefit from the economies of scale

Mutual Funds

For Internal Use Only / Not for Distribution to the Public

• Easy to understand

• To earn income or build wealth

• Offer choice of various categories of schemes

• Access to ready investment portfolio and past track record

• For regular and disciplined investing

• Investment professionals

Why Should You Invest In Mutual Funds?

For Internal Use Only / Not for Distribution to the Public

• Status of a unit holder

• Unit certificates or statements of accounts

• Share in gains or loss in value of the mutual fund scheme

What Do You Get As A Mutual Fund Investor?

For Internal Use Only / Not for Distribution to the Public

• Diversification

• Professional management

• Lower entry level

• Economies of scale

• Flexible and Innovative Plans for Investors

• Liquidity

• Transparency

• Well regulated structure

Benefits Of Investing In Mutual Funds

For Internal Use Only / Not for Distribution to the Public

• Securities and Exchange Board of India

(SEBI) is the Regulatory Authority

• SEBI aims to protect the interest of the

investors. It has framed SEBI (Mutual Funds)

Regulations, 1996

Regulatory Structure Of Mutual Funds In India

For Internal Use Only / Not for Distribution to the Public

SEBI (Mutual Funds) Regulations, 1996

“Mutual fund” means a fund established in the form of a trust to raise monies

through the sale of units to the public or a section of the public under one or

more schemes for investing in securities including money market

instruments or gold or gold related instruments or real estate assets.

- Source: Sebi.gov.in

For Internal Use Only / Not for Distribution to the Public

• Mutual fund is established in the form of a Trust

• Mutual funds raise money through sale of units to the public

• Mutual fund schemes can invest in various securities

Key Features Of A Mutual Fund As Per Its Defined Structure

For Internal Use Only / Not for Distribution to the Public

Key Constituents Of A Mutual Fund

SPONSORS TRUST Asset

Management Company

For Internal Use Only / Not for Distribution to the Public

• Sponsors

• Trust

• Asset Management Company (AMC)

Key Constituents Of A Mutual Fund (Contd.)

For Internal Use Only / Not for Distribution to the Public

• An Industry Body created to promote the interest of mutual funds in India

• All AMCs in India are members of AMFI

• Maintain high professional and ethical standard

• AMFI has set up ‘AMFI Code of Ethics’

• AMFI Guidelines & Norms for Intermediaries (AGNI)

• AMFI recommends and promotes best business practices and code of conduct

• AMFI interacts with SEBI and represents the Indian mutual fund industry

Association Of Mutual Funds In India (AMFI)

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• Custodian

• Registrar and Transfer Agents (RTA)

• Auditors

• Fund Accountants

• Mutual Fund Distributors

• Collection Bankers

Other Service Providers In Mutual Fund Industry

For Internal Use Only / Not for Distribution to the Public

Key Points To Remember

• Mutual funds are established in the form of a Trust

• Mutual funds are collective investment vehicles

• Mutual funds assist investors in earning income and building

their wealth

• Mutual fund investors get a proportionate share in a mutual fund

scheme and are called unit holders

• Any Profit or Loss made by a mutual fund scheme is proportionately

shared by the unit holders

For Internal Use Only / Not for Distribution to the Public

Key Points To Remember

• Mutual funds offer several benefits

• SEBI is the regulatory authority for the Indian mutual fund industry

• SEBI aims to protect the interest of the investors

• Sponsors are the individuals or entity who initiate the process of

formation of a mutual fund

• Trustees of the mutual fund appoint the AMC

• AMFI is an Industry Body created to promote the interest of the

Mutual Fund Industry

For Internal Use Only / Not for Distribution to the Public

we now invite you to test your learning by taking up this simple quiz

(and win exciting prizes!)

Lets Do A Short Quiz!

14

For Internal Use Only / Not for Distribution to the Public

1) The Primary Role of a Mutual Fund is to____________________.

A. Regulate the capital markets

B. Assist investors in earning income or building their wealth

C. Collect money

D. None of the above

2) Mutual Funds are established in the form of a Trust

A. True B. False

3) Mutual Fund investors are called____________.

A. Regulators B. Fund Managers

C. Unit Holders D. Sponsors

Quick Quiz

15

For Internal Use Only / Not for Distribution to the Public

4) ________________approach SEBI for registration of a mutual fund.

A. Sponsors

B. AMCs

C. Trust

D. Unit Holders

5) An Industry Body created to promote the interest of the Mutual Fund Industry is

called______________

A. AMC

B. SEBI

C. Custodian

D. AMFI

Quick Quiz

16

For Internal Use Only / Not for Distribution to the Public

© 2014 Franklin Templeton Investments. All rights reserved.

Thank You For Participating!

17

For Internal Use Only / Not for Distribution to the Public

© 2014 Franklin Templeton Investments. All rights reserved.

Mutual Fund Investments Are Subject

To Market Risks, Read All Scheme

Related Documents Carefully.

18

For Internal Use Only / Not for Distribution to the Public

© 2014 Franklin Templeton Investments. All rights reserved.

FTI PPT 4:3 01/14

Franklin Templeton Asset Management (India) Pvt. Ltd.

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12th and 13th floor, Senapati Bapat Marg,

Elphinstone (W)

Mumbai 400013

Tel (91-22) 6751 9100

Fax (91-22) 6639 1281

www.franklintempletonindia.com

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