Mutual ppt Saturday

8/8/2019 Mutual ppt Saturday

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` Mutual funds : an introduction

` Industry overview

` Current trends

` Challenges faced` Suggestions and solutions

` Marketing and sales of financial products


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Concept:-` Pool of savings by various investors sharing a

common financial goal.` The money is collected and invested in different type

of securities depending on the objective.` The income earned by these investments are shared

by its unit holders in to the number of units held bythem.

` Most suitable as an opportunity to invest in adiversified ,professionally managed basket at nominalcost.

` Have been a significant source of investment of govt.and corporate securities.


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Brief history &Structure:-` UTI- 1st mutual fund of India set up 1963.` Public sector banks and institutions allowed to set up

mutual funds in early 1990s.

` Policies formulated and regulated by SEBI forpromoters of all mutual funds (public/private/foreign).` Set up in the form of trusts having sponsors, trustees,AMC s and a custodian.

` Trustee holds the property for the benefit of the unit

holder.` AMCs manage the investment of funds in various

types of securities.


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` Custodian ,registered by SEBI holds the varioussecurities in its custody

` The trustee monitor the performance and complianceof SEBI regulations by the mutual fund.

` Performance of a particular scheme denoted byNAV(Net Asset Value)

` NAV is market value of securities held by the scheme.

` NAV = market value of securities of a scheme

Total number of unit of schemes


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According to maturity:-

` Open ended: available for subscription on continuousbasis.

` Close ended: has a stipulated maturity period.

According to investment objectives:-

` Growth/ equity oriented: capital appreciation over longterm, relatively high risk.

` Income/ debt oriented: aim to provide steady income,

usually in bonds and debentures, low risk` Balanced fund: growth & fixed income, moderate risk.


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` Money market of liquid fund: safer short term investmentlike treasury bills interbank call money etc.

` Gilt fund: exclusively in govt. securities with no default risk.

` Index funds: replicate portfolio of a particular index like

BSE, NSE etc.` Sector specific funds: as the name suggests invests in

securities of specific sectors.

` Tax saving schemes: offers TAX rebates to investors.

` Load & no load fund: load fund charges a percentage of

NAV for entry or exit no load whereas has no such charges.


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` Mutual fund industry undergoing a stage of transformation.

` Post recession recovery has seen some majorrestructuring in the industry.

` Strong GDP growth and rising number of HNI s provides a

huge potential of growth of investment.` Growth in assets under management is has been

witnessing 28% growth CAGR*.

` After the tumble of 08, the markets are showing a steadygrowth thereby indicating a bright future for the industry.

` The future of the mutual fund industry will be paved by theperformance by capital markets.


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-India

Global-


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Indias

AUM to

GDP

Share in

indian

household

savings


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COMPOSITION:-


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Customers

:-

` High ownership from institutional investors.

` Retail investors comprising 96 % in number terms and 37% in total AUM.

` Out of a population of1.15 bn only 42 million mutual fund accounts.

` Only 1.6% of people invest their saving into mutual funds.

Products:-

` Relatively in nascent stage and competing with government fixed return schemes.

` Open ended funds dominate the industry with around 98% share.

` New emerging product line like Exchange Trading fund, Capital protection and overseasfund.

Markets:-

` Major market shifting from metro and urban areas to tier 2 and tier 3 towns.

` Steady rise in contribution from small towns from 10% in 2005 to 20% in 2010

Distribution channels:-

` Independent financial advisors

` National and international banks` Broking dealers.


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` Low level of customer awareness

` Limited Focus on Increasing Retail

Penetration

` Limited Focus Beyond the Top 20 Cities

` Limited Innovation in Product Offerings

` Low financial literacy levels


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` Limited Flexibility in Fees and Pricing Structures.

` Limited Customer Engagement.

` Limited Focus of the Public Sector Network on

Distribution of Mutual funds.` Multiple Regulatory Frameworks Governing

Financial Services Sectors.

` Heavy reliance on institutional sales


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Key stakeholders in

the industry:


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` Creation of Mutual Fund Education Fund

` This Fund should be suitably ring-fenced andmanaged/administered by the industry association.

` Promoting customer awareness programmes on mutual

funds.` Effective and meaningful mass media campaigns.

` Financial planning awareness course in educationinstitutes.

` India post and PSU banks can help conducting customerawareness.

` Self help voluntary groups like investors assosiations.


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` Customer friendly products and product features.

` Allow investible surplus to be invested anytime inthe SIP.

` Introduction of simple products with higher returnswith less risk.

` Design women and children related needs.

` Focus on low income groups.

` Mutual fund investments through mobile telephoneand internet.

` Price flexibility.


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` The annual composite rate of growth is expected

13.4% during the rest of the decade.

` 2004 it was Rs.150537 crore and end of the 2010it would be Rs. 4090000 crore.

` Our saving rate is over 23%, highest in the world.

` SEBI allowing the MF's to launch commodity

mutual funds` Mutual fund can penetrate rurals like the Indian

insurance industry

Mutual ppt Saturday

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