All About Mutual Fund Complete Guide
What is Mutual Fund?
What- It is a legal common pool of money Money from- Investors bring the money to invest Investment in- Investment can be in Shares, Bonds, Real estate etc as per wish of investor Units- Investors get units of mutual fund , for their investment. Who Does Investment- Expert Fund Manager does all investments Who Appoints Fund Manager- Investors
What About Profits from Investment- All profits from investments are given back to investors
Process of Mutual Fund
Returns, post deducting expenses, are given to investors
Investors
Mutual Fund
Returns
Investment pool generates return
Pool Money and Create a Fund , called Mutual Fund
Investment
Fund Appoints a Fund Manager and Invest money
Advantages of Mutual Fund Stress -Managing direct investments in stocks or bonds can be really stressful as the markets are too volatile and it is very difficult for a layman investor to be patient with the swings in the prices of shares, etc Professional Expert Management- No need for investors to get involved in the fund management on day to day basis. Fund manager manages the complete money Diversification- Since mutual fund is pool of investment made by a group of investors, an expert fund manager can invest the money in a large choice of shares/ bonds or debentures etc. which reduces risk from one single asset. Small money can be invested - Often shares or bonds of large corporations, etc trades at a very high base rate and small investor can’t invest into it due to the low investment amount. But this becomes possible for a fund manager in case of a mutual fund Tax Benefits- In equity mutual funds, all returns are tax free if investments are held for more than 1 year. In ELSS (Equity Linked Saving Schemes), one can save taxes under section 80C of income tax act along with benefit of tax free returns. Liquidity- Investment in Mutual funds are very liquid. Open ended mutual funds can be bought and sold any time. Small investor can plan his investments as per his need in mutual funds.
Click Here for Detail
Get Right Portfolio Allocation
FREE Start Now Continue reading‌
Net Asset Value- NAV
NAV is the market value of each unit of mutual fund scheme , after deducting all charges and liabilities. NAV or Net Asset Value of a Mutual Fund is based on the market price of the securities held in the portfolio. It can calculated with following formula-
Market price of all investments +All other assets such as cash – Expenses- All liabilities ______________________________________________________________________ Total number of units outstanding for the scheme
Units of Mutual fund
ď ś Like Shares, Units are part of the ownership of a mutual fund scheme. Unit holders are investors of the fund. Total investment of a mutual fund scheme is divided into small units of a particular amount each ď ś Unit holders get voting rights and participate in the profits earned by Mutual fund , on the basis of proportion of units allotted to them .
Types of Mutual Funds
Tenor of Mutual Fund
Open Ended Mutual Fund
Close Ended Mutual Fund
In this scheme the investor can invest ( Buy) and redeem (Sell) mutual fund scheme at any time. There is no lock in period of investment
In this scheme the investor , once invested will not be able to redeem any time as per his or her wish. Mutual Fund will have a lock-in period before which Investor cannot redeem from the scheme.
Types of Mutual Fund Mutual Fund Equity Fund
Debt Fund
Hybrid Fund
Liquid Fund
Specialized Funds Commodity Fund
Diversified Fund Income Fund
Mid Cap fund
ETF
FMP Small Cap Fund
Short Term Funds
Sect oral Fund
Gilt Fund Tax Saving Fund
Index Fund
Balanced Fund Monthly Income Plan Dynamic Fund
Funds of Funds Arbitrage Funds Capital Protection Funds
Plan your Life Financial Goals
FREE Start Now
Continue reading‌
Major Categories of Mutual Fund
Equity Funds
Mutual funds With primary objective to invest in Shares and Stocks are called Equity Funds.
Debt Funds
Debt Funds invests in Govt. Bonds or securities, Corporate bonds & Other debt securities
Hybrid Funds
Funds with mix of Debt and Equity are hybrid funds. Their proportion change as per opportunities in the market.
Liquid Funds
Debt funds investing only in very short term securities like certificate of deposits, treasury bills, commercial papers and term deposits.
Commodity Funds
Mutual funds investing in commodities like Gold, silver etc are commodity funds
Types Equity Fund
Diversified Equity Funds
Mid Cap Equity Funds
Small Cap Equity Funds
Sectoral Equity Funds
Tax Saving Equity Funds
Index fund Equity Funds
Fund investing in equities without concentration on a particular sector or size of company. It can invest in any share as per wish of fund manager
Equity fund investing in share of mid sized listed company. Mid sized company can be of valuation between Rs 500 cr- Rs 2000 cr
Equity funds investing in shares of small sized listed company. Small sized company can be of valuation below Rs 500 cr
Funds investing in shares of a particular industry or sector. Example, Pharmacy funds invest only shares of pharmaceutical companies
These are diversified equity funds, where investor gets tax benefit u/s 80C of income tax act. These are also called ELSS( Equity Linked saving schemes)
Equity funds which match performance of specific stock market index like BSE Sensex, or NSE nifty. These are passive funds and invest with right proportion to shares in Index.
Types of debt funds
Income/ Bond Funds
Debt Funds invests in Govt. Bonds or securities, Corporate bonds & Other debt securities with long term maturity beyond 3 years. The offer long term returns and tracks returns of bonds and Govt. securities
FMP Funds
Close ended debt funds, with debt securities which have maturity similar to the closure of the fund. Post closure Mutual fund give back all money to investor. These fund generally offer an expected returns to investors
Short term Funds
Gilt Funds
Debt funds with less risk, invest in Debt securities, having maturity up to 1 to 3 years . These are generally preferred for short to medium term investments .
Mutual funds investing in all kind of Government securities. Primarily these funds invest in long term Govt. Securities with small component invested in short term securities.
Types of Hybrid Fund
Balanced Funds
Monthly income plan
Dynamic Fund/Asset Allocation Funds
Balanced Funds Invest in mix of Shares and Debt securities for higher return and minimum risk of capital erosion. Generally invest at least 65% of total funds in equity to get tax benefits of equity funds
Objective is to reward investors with regular income & moderate capital appreciation along with minimum risk of capital, though don’t guarantee any return. Generally invest 80% of funds in debt securities.
Funds with variable asset allocation strategy that has flexibility to switch from Equity to Debt or vice-a-versa , any time depending on the outlook of the market.
Exchange Traded Funds( ETF)
About
Exchange traded funds are index funds, which tracks the composition and performance of Equity, Commodity, or Debt indices, like BSE Sensex or NSE nifty . They are tradable on stock exchange like any other shares.
Tradable
ETFs unlike other mutual funds, are traded on stock exchange and tracks real time composition and performance of equity indices. One can buy and sell them any time during market hours of stock exchange and their price change as per index
Types of ETFs
1) Equity ETF- Invest in equity based Indices 2) Gold ETF- Invest in Gold as an asset class 3) Debt ETF- Invest in Debt indices
Popular ETFs
a) Goldman Sachs Nifty BeEs- This ETF tracks NSE nifty index b) Goldman Sachs Gold BeEs- This ETF tracks Gold Price on real time Other are Reliance banking ETFs, Motilal Midcap ETF
Funds of Funds ( FOF)
About
Funds of funds can invest across different mutual fund schemes available in market. A FOF can divide money, freely in Diversified equity fund, Small cap fund , Mid cap fund or debt funds, as per mandate of the fund.
Benefit
Investor who wishes to invest in multiple mutual funds with a small amount can invest in FOF .Fund manager can switch between debt funds & equity funds as per opportunity in the markets
Popular FOFs
a) Kotak Asset allocator fund b) Quantum equity fund of funds
Capital protection oriented funds
About
Close ended funds , offering near capital protection to investors, which invest maximum funds in Fixed income securities.Small portion is invested in shares or derivatives to give extra returns. Generally 85% goes in debt and 15% in equity
Benefit
a) Maturity is fixed and investor looking for a investment for time period can choose to invest in this. b) Offers near capital guarantee and also chance to get higher than FD interest return
Liquidity
• •
Capital Protection oriented funds are close ended However they are listed on stock exchanges
Investing Options
Growth Scheme
Dividend Option
In Growth scheme , all profits generated from buying and selling of the investments in the fund, gets accumulated. Profits get added to NAV of the mutual fund and investor looking to en-cash the profits can sell mutual fund units .
In Dividend scheme , all profits generated from buying and selling of the investments in the fund, gets accumulated and then at the wish of fund manager, gets distributed to all investors. There are two versions of this option-
This is best scheme , for investor looking for capital and profit accumulation over long period as profits are not distributed to investors.
a)
Dividend payout Option- Here dividends are actually paid to investors. b) Dividend Reinvestment option- Here dividends distributed are not handed to the investors, but invested back to the fund and investor is allotted more units of the fund for the dividend amount.
Right Approach
1
2
3
4
5
Right Portfolio
Buy/ Sell
Regular Monitoring
Risk Profiling
Financial Goals
Knowing-
Knowing-
Risk Capacity- How much Risk you can afford to take
All Financial Goals of the life
Investment Products right as per risk profile
With least Brokerage & Commission
Of Portfolio and Markets
The Inflation adjusted amount required to meet them
Portfolio efficient
With Nil hidden costs
Rebalance Investments when required
Risk Attitude- How much Risk you want to take
which
is
tax
Know right Investment Portfolio for your Profile
Start Now
Our Offer
Advisory Fees Rs. 365 Per Annum Customized advise only for you Regular Review and Rebalancing Unlimited Long Term Investment Advise Tax efficient portfolio design No Minimum investment Substantial Savings in Commission ( Optional)
Customized , unbiased Wealth Management
@Rs. 1 per day
Start Now
Complete Investment Planning
Wealth Creation Advice
Monthly Savings Advice
Tax Saving Investments
In case you want to invest Lump Sum
In case you want to invest On Monthly basis
In case you want to Make Tax Saving Investments
Portfolio Restructuring Advice
Goal Planning
Online Transaction
If you want to Restructure your portfolio
In case you want to Plan your Financial Goals
In case you want to Buy and Sell any product
Why AdviseSure
Simple & Easy
Our Simple and easy Personal Finance Tools & self-help process, ensures that you take Better control of your entire Finance in 7 Minutes , to your satisfaction.
Paperless Process
Invest and Manage Online , on a Single Click. No need to Fill boring Physical forms and storing statements. Manage Your Finance with easy and simple back office..
Multiproduct
We advice on almost all Financial Products except banking accounts. You can transact in all products through us. Our technology will ensure superior Experience
Cost Effective
We don't Push Products to our Customers Like Agents or Brokers, for commissions or brokerages. You can continue buying and selling with your current Broker or Agent. However you can also transact through us at substantial low Cost.
Online Access
You can manage your account from anywhere through multiple support points
AdviseSure Investment Advisors is India’s first only Advise platform where we help individual, managing personal finance. AdviseSure Investment Advisors is part of AdviseSure Ventures Private limited. AdviseSure Investment Advisors is a SEBI registered Investment Advisor and its associate/group company empanelled with AMFI as a distributor .You can execute transactions with your banker, stock broker or agent/ financial intermediary . We also offer transaction services through various associations, at a substantially lesser cost to our clients as compared to other financial intermediaries, so that you start your financial plan with AdviseSure Investment Advisors is a safe and secure platform. Our recommendations rely on historical data. Historical/ past performance is not a guarantee of future returns. The information and views presented here are prepared by AdviseSure Investment Advisors. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. This document is solely for the personal information of the recipient. The investments discussed or recommended here may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned here, investors may please note that neither AdviseSure Investment Advisors nor any person connected with any associated companies of AdviseSure Investment Advisors , accepts any liability arising from the use of this information and views mentioned here. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment.
AdviseSure Investment Advisors CORPORATE OFFICE : Level 8, Vibgyor Towers, G Block, C62,Bandra Kurla Complex, Mumbai 400 098, India -------------
Website : www.advisesure.com
Email: care@advisesure.com