|
|
|
|
|
|
 |
Why Invest in Mutual Funds
|
|
|
|
|
Types of Mutual Funds
|
|
|
|
|
Terminology |
|
|
|
|
|
 |
|
|
|
|
|
Mutual Fund is a pool of money received from the investors with a common objective.
Mutual Funds collect, invest and manage the collected funds professionally using
its expertise & experience in equity / debt / other instruments as pre-defined
objective to generate maximum return to pass back to investors.
|
|
|
|
Mutual funds issues units, representing investor's share in the total corpus of
the chosen scheme, to investors in accordance with quantum of money invested. The
investors in proportion to their investment share the profit / loss.
|
|
In Indian Capital Market, Mutual Funds industry registered spectacular growth in
recent years. 35 Fund Houses operate in India promoted by both Public and Private
sector financial institutions and offer more than 800 different schemes to investors
to fulfill their financial goals. In the year 2007 total Assets Under Management
(AUM) grew to Rs. 5,50,000 crores versus Rs.79,464 crores in 2003.
|
|
Portfolio Diversification: Mutual Funds invest money across a wide
cross-section of industries and sectors and thus the risk is reduced. Diversification
reduces the risk because all stocks may not move in the same direction in the same
proportion at the same time. Importantly, Investors can achieve this diversification
with a far less money than they can do on their own. i.e. he owns share in full
portfolio of a Mutual Fund scheme by investing just Rs.5000/- lump some Or SIP of
Rs.500/- per month.
|
Professional Management:
While risk cannot be eliminated, skillful management can minimize risk. Mutual Funds
help to reduce risk through professional experience & expertise in Investment
management. Selection of fundamentally sound securities and timing of the purchases
and sales help the Fund Managers to build a diversified portfolio that minimizes
risk and maximizes returns.
|
Transparency:
Mutual funds are registered with Securities and Exchange Board of India(SEBI), The
Prime Regulator of securities markets in INDIA, and function within the provisions
of strict regulations. Major aspects like Investment exposure, Expenses, Loads,
Transparency are also well defined and regulated by the SEBI to protect the interests
of investors and are accessible to the investors.
|
Range of choice:
Several schemes on bases of different Objectives, Risk profile and Time Horizon
are offered by Fund Houses to cater varying investment needs over a lifetime. Investor
may invest in the best suitable scheme to meet his financial goals. Verity of options
are available for Big investors to small investors to park their funds worth crores
of rupees to invest amount as small as Rs.100 per month.
|
Mutual funds combine the advantages of each of the investment products
Returns get adjusted for the market movements
|
Other Advantages:
Convenient : To invest just fill the form ,You receive an account statement showing
the numbers of units you hold. You can redeem units just signing repurchase request.
|
|
Low Costs: Due to its large volumes Mutual Funds enjoy benefits of low scale in
brokerage, custodial and other fees translate into lower costs for investors.
|
|
Liquidity: In open-ended schemes, one can get money back any time at NAV related
prices from the mutual funds itself. Even close-ended schemes now offers periodic
exit options.
|
|
Basis of Classification
|
- Risk- Sectoral funds are most risky; money market funds are least risky.
-
Tenor - Equity funds require a long investment horizon; liquid funds are for the
short term liquidity needs.
- Investment objective - Equity funds suit growth
objectives; debt funds suit income objectives.
|
|
|
Equity Fund
|
- Pre-dominantly invest in equity markets.
- Diversified portfolio of equity shares.
- Select set based on some criterion.
- Diversified equity funds
- Primary market funds
- Small stock funds
- Index funds
- Sectoral
funds
|
|
|
Debt Fund
|
- Predominantly invest in the debt markets.
- Diversified debt funds
- Select set based on some criterion
- Income funds or diversified debt funds
- Gilt funds
- Liquid and money
market funds
- Serial plans or fixed investment plans
|
|
|
Balanced Fund
|
- Investment in more than one asset class.
- Debt and equity in comparable proportions
- Pre-dominantly debt with some
exposure to equity
- Pre-dominantly equity with some exposure to debt
- Education plans and children's plans
|
|
|
By Structure
|
- Open-Ended Schemes: One can buy and sell units at Net Asset Value (NAV) related
prices at any time
- Close-Ended Schemes: One can buy and sell units on stipulated
time
|
|
|
By Investment Objective
|
- Growth Schemes: These schemes normally invest majority of their funds in equities.
-
Income Scheme: Generally invests in fixed income securities i.e Government Bonds,
Debentures etc.
- Balanced Schemes: They invest both in shares and fixed income
instruments.
- Tax saving (ELSS) Schemes: Investment in these schemes are eligible
for deduction from taxable income under section 80 of the income tax Act.
|
|
With over 15 years of professional expertise in Financial Services, we proudly facilitate
more than 100,000 clients both in depository & stock trades
|
|
Infrastructure supported with ongoing research for better solutions and a quest
to provide the very optimum mix of services to our client base.
|
- Single window services for Fixed Deposits Mutual Funds IPO Insurance Demat Accounts
Trading Accounts.
- Weekly Mutual Funds Performance Report with returns by different
ongoing schemes for different time horizon viz-a-viz returns generated by 2 prime
indices of India Sensex & Nifty, Asset Under Management (AUM) and prevailing
Net Asset Value (NAV).
- Information / Features of New Fund Offers and closing
date reminders.
- Soft copy of Application Forms / redemption / change related
documents by e-mail on request to enable to print, fill and to send back to us.
-
Get all services at your Doorstep.
- Dividend and record date alerts.
-
NAV information Current / Historical on demand.
- Regular Orientation / Training
Programs.
- Regular updation on the status of your investments (individual profit
/ loss statement).
- Complete research based advice on your current Mutual Fund
portfolio. Advise on investment and redemption as well.
- Services by AMFI certified
professionals.
- Quick query attendance / problem solving services.
- Time
to time Capital Market outlook to enable you to plan investments.
- In process
to provide Online IPO and Mutual Fund subscription facility.
- All co-ordination
services are extended to the Power of Attorney Holders in India investing on behalf
of NRIs i.e. all reports / information in physical form, Guidance, Forms dispatch,
Collection, Procurement, Acknowledge, Investment status updation, query attendance.
|
- Application form
- A self attested copy of PAN card ( for all) OR A copy of
Know Your Client (KYC) compliance acknowledge (In case of investment is Rs.50000/-
or more)
|
|
Know Your Client (KYC) |
|
Prevention of Money Laundering Act, 2002 (PMLA) came into effect from July 1, 2005
and W.E.F. February 1, 2008 Investors in Mutual Funds investing Rs. 50,000/- and
above are required to comply with Know Your Client (KYC) norms under the Prevention
of Money Laundering Act 2002 (PMLA) Applicants (including new / existing Unit holders)
will have to submit the following documents :
|
- KYC Application Form duly completed by each applicant including joint Unit holders
-
Documents evidencing Proof of Identity and Proof of Address
|
|
Upon receipt and verification of the above documents, a KYC acknowledgement will
be issued to each applicant. Investor(s) must note that KYC compliance is mandatory
at the time of submission of each subscription request with the designated Official
Points of Services. The KYC acknowledgement is presently being issued free of cost.
|
|
Net Asset Value (NAV): Net Asset Value is
the market value of the assets of the scheme minus its liabilities. The per unit
NAV is the net asset value of the scheme divided by the number of units outstanding
on the Valuation Date.
|
|
|
|
Sale Price: Is the price you pay when you
invest in a scheme. Also called Offer Price. It may include a sales load.
|
|
|
|
Repurchase Price: The price at which Mutual
Funds bye its units back. You get this price when you sell your units.
|
|
|
|
Entry Load:Is a charge collected by a scheme
when it sells the units.. Schemes that do not charge a load are called 'No Load'
schemes.
|
|
|
|
Exit Load:Is a charge collected by a scheme
when it buys back the units from the unit holders.
|
|
Prescribed Documents (PAN Mandatory)
|
|
For Individual Investors |
|
Proof of Identity : |
- Photocopy of PAN Card
- In case of Non Photo PAN Card in addition to copy
of PAN Card any one of the following : Driving License /Passport copy / Voter ID
/ Bank Photo Pass Book.
|
|
Proof of Address (any one of the following): |
- Latest Telephone Bill: Landline / Mobile (Not more than 3 months prior to the date
of application).
- Latest Electricity Bill (Not more than 3 months prior to the
date of application)
- Passport copy
- Latest Bank Passbook / Bank Account
Statement ( Not more than 3 months prior to the date of application)
- Latest
Demat Account statement (Not more than 3 months prior to the date of application)
-
Voter ID
- Driving License
- Ration Card
- Rent Agreement
|
|
Non individuals (PAN Mandatory)
|
|
Companies / Bodies Corporate (Certified copy of the following): |
- Certificate of incorporation.
- Memorandum & Articles of Association.
-
Resolution of the Board of Directors Authorizing investment in mutual funds.
-
Power of Attorney granted to its managers, officers or employees to transact business
on its behalf (Authorised Signatories List).
|
|
Units can only be held in the name of Karta on behalf of the HUF
|
|
Proof of Identity (any one of the following): |
- Copy of PAN Card of the HUF.
- Proof of address (HUF)
- Latest Bank
Passbook ( not more than 3 months prior to the date of application).
- Bank Account
Statement ( not more than 3 months prior to the date of application).
- Alternately,
any of the documents listed for proof of address for an individual can be provided
by the karta.
|
|
For Overseas Address of NRIs
|
|
Proof of Identity : |
- Photocopy of PAN Card
- In case of Non Photo PAN Card in addition to copy
of PAN Card any one of the following : Driving License /Passport copy / Voter ID
/ Bank Photo Pass Book
|
|
Proof of Address (any one of the following): |
- Latest Telephone Bill: Landline / Mobile (Not more than 3 months prior to the date
of application).
- Latest Electricity Bill (Not more than 3 months prior to the
date of application)
- Passport copy.
- Latest Bank Passbook / Bank Account
Statement ( Not more than 3 months prior to the date of application).
- Latest
Demat Account statement (Not more than 3 months prior to the date of application).
-
Voter ID.
- Driving License.
- Ration Card.
- Rent Agreement.
|
|
Overseas Bank Account Statement (not more than 3 months prior to the date of application).
|
|
Any other documents are any language other than English the same must be translated
to English and certified by Government Authority in country of residence or by Public
Notary. In case investors provide more than one address, proofs of both the addresses
need to be provided.
|
|
Partnership firms (Certified copy of the following): |
- Certificates of Registration, in case of registered Partnership Firms.
- Any
other officially valid documents in respect of holding a power of attorney to transact
(Authorised Signatories List and resolution / authority to invest).
|
|
Trusts, foundations, NGO Charitable Bodies, Clubs/Mutual Fund Schemes (Certified
copy of the following): |
- Certificate of Registration, in case of registered Trusts.
- Any other valid
documents in respect of holding a power of attorney to transact (Authorised Signatories
List and resolution / authority to invest)
- Offer Document of the Mutual Fund
Scheme.
|
|
|
|
|
|