mutual fund training.pptx to learn mutul fund

Its all about mutual fund

1. I n v esting & MF - Bas i cs

2. Con t ents I n v e s t m e n t • W h y I n v e st • S ome K e y Conc e pts • Inf l at i on / I n t e r e st / P ow e r of Com p ound i ng / L i qu i d it y e tc • A ss e t A ll oca t i on Mod e l • R i sk vs R ew a r d • Di ff e r e nt I n v e stm e nt Op t i ons Mutual fund • Conc e pt • W h y M u t u a l Fu n d • Di ff e r e nt T yp e s of Funds • S ys t e m at i c I n v e stm e nt • T ax Be n e f i ts • T r an s ac ti on Cost • H y g i e ne F a c to r s

3. Co s t of L ivin g W h y I n v estm e nt? Goal s of Li f e H o w to achie v e?  O wn House  Ch ildren ’ s Educa t ion  D augh t e r ’ s Marriage  P ea c eful R e ti re m e n t  Lega c y for ne xt gen e r at i on  S a v e par t of t h e earn i ngs  Ma k e t he earn i ngs sweat t o exped it e reac hi ng t he goal I nv estmen t s a r e requ ire d because S a vings alone wil l not b e e n ough t o m e e t t he goals Cos t s of inf l a t ion I n v e s tme n t Am o u n t No m inal V alue a f t er 10 y e a r s R ea l V alue a f t e r 1 y e a r s Cash sto red at h o u s e R s . 100 Rs 1 R s . 6 1 .4 ( a t 5% i n f l a ti on) Inves t ed (6% ret u r n ) R s . 100 R s 179 R s . 1 1 ( a t 5% i n f l a ti on)

4. In f la t ion/ I nterest R ate at wh i ch the v a l ue of curr e ncy d e c r e as e s. M oney can' t b uy the same amount of g oo d s i n the futur e . A t 5% i nf l ati on, 1kg su g ar tha t co s ts 40 ru p e e s now w i l l cost 65 ru p e e s aft e r 10 y e a rs. R ate char g ed b y the l en d er to the borrower of mone y . R ate at wh i ch v a l ue of money i n v e s t e d i ncr e as e s. A t 8% i nte r e s t , 1 ,000 ru p e e s i n v e s t e d to d a y wil l v a l ue 2 2 ,000 ru p e e s after 10 y e a rs In f lation Interest

5. In f la t ion/ I nterest I llu s t r at i on Pre sen t V al u e Afte r 10 years (wi th o u t in v es t ing – k ep t idle in a l ocke r ) Va lu e a f te r 10 years ( w i t h inves t ing at 8%) Price o f 1 k g s u gar wit h i nf l at i o n 5 % R s. 4 R s. 6 5 Rs . 6 5 V al u e o f R s . 1 00 Rs . 100 Rs . 100 Rs . 216 Q u a n t i t y o f sugar th a t ca n be bo u ght 1000 / 4 = 25 kgs 1000 / 6 5 = 1 5 .4 kgs 2160 / 6 5 = 33 .2 kgs

6. P ower of C ompoundi n g Compoun d i nte r e s t i s the i nte r e s t on the Pr i nc i p al a l ong w i th a c cu m u l at e d i nt e r e st. M oney i n v e s t e d gi v es more money as i t g e t s com p ound e d – In t ere s t on in t ere s t T o un l e ash the p o we r o f c o m poun di ng I n v e s t e a r l y I n v e s t r e g u l ar l y I n v e s t for l on g - t e rm not the shor t - t e rm “ Compound i ng i n t ere s t i s the g r ea t e s t mathe m at i c al d i s c o ve r y of all t i m e ” - A lber t E i n s t ein

7. Ill u st r at i on R amu and Kr i shna s a v e Rs . 2 at the end of each y e a r . R amu i n v e s t e d i n a f i nanc ial i nstrum e nt tha t gi v es 1 % r eturns and Kr i shna d i dn't want to ta k e a n y r i sk and so he s a v ed h i s money i n s a v i ngs ban k tha t g i v es 3.5% r e turns. A f t e r 10 y e a rs Kr i shna r e a li zes the p ower of i n v e s tm e nt and s tarts to i n v e s t i nst e ad of s a v i ng. Mo n e y wit h R amu Mo n e y wit h K ris h na Af t er 10 y ea r s Rs. 3 , 18 , 800 Rs. 2 , 34 , 620 Money wit h R amu Money wit h K rish n a Af t er 20 y ea r s Rs. 11 , 45 , 500 Rs. 9 , 27 , 320 T o t al M one y I n v e s t ed Rs. 20 , 000 X 20 = Rs. 4 , 00 , 000 Rs. 20 , 000 X 20 = Rs. 4 , 00 , 000 T o t al Gain Rs. 7 , 45 , 500 Rs. 5 , 27 , 000

8. Ris k vs R e w ard P ot e nt i al returns i ncr e ase w i th an i ncr e ase i n the r i sk as s oc i at e d. L ow r eturn s on S a v i ngs Accounts as r i sk i s l o w . H i g h r eturn s from Stock M ar k e t s as r i sk i s h i gh. R i sk a p p e t i te chan g es w i th the a g e, sta g e of l i fe and other facto r s. A p e rs o n wh o i s y oung and sin g l e has more r i sk a p p e tit e . A p erson wh o has a fam i l y and i n m i dd l e a g es has l e s s r i sk a p p e t i t e . I n v e s tm e nt shou ld be ma d e bas e d on the r i sk a p p e t i te of the i n d i v i d ual.

9. As s et A llo c at i on Model/ P ort f olio • In a portfol i o , i n v e stm e nt s are made in tw o or m o r e as s e t s. • T o ac hi e v e a gi v en l e v el of ret u rns wi t h t he m ini mu m ri s k pos si ble . Asse t A llo c a t ion fo r di f fe r e n t in v e s t o rs F act o rs cons i d e r ed for A ss e t A ll oca t i on Goal I n v e s t o r ’ s Ri sk T ol e r an c e Ti m e Ho r i z on

10. Liquid i t y Th e ease a t which an a s s e t can b e so l d / e x c h anged w i thout a n y s i g n i f ic a n t d r o p i n i ts pr ice. T r ansacti o n c o s ts a r e h igher f o r L o w l i qu id Ass e ts c o m pa r ed t o H i gh L i qu id As s e ts. L i q ui d ity of the Asset E x amples T r ansaction C o s ts / B r o k e r a g e H i gh Mon e y , Ca s h in ha n d e t c L o w L o w R eal E s t a t e, Au t omob i l es e t c H i gh

11. Co s t s of T r ans a ct i on I n v e s tm e n t A v enue Ac q ui s it i on Co s t L i q ui d a t i o n Co s t S a vi n g s Accou n t No No G old No Y es ULI P s Y es (h i gh) Y es (h i gh) Mutual Fu n ds No Y es ( < 1 y ear) No (> 1 y ear) E quity Y es Y es R ea l E s ta t e Y es ( v e r y h igh) Y es ( v e r y h igh)

12. I n v estment Opti o ns A v ai l able Asse t Class R i s k L evel L iquidi t y P h y si c al Gold , R e a l e st a t e, C o mm od iti es e t c F i n a ncial F D s , P o st Office s a vings, i nsu r anc e / p r o v i den t /p e n s i o n funds, E qu i t y , Mutual F unds e t c Low S a vings Account, F . Ds, PP F s, P o st Office Sche m es e t c Med i um C o mpa n y D e p o s i t s , Mutual F unds, ULI P s, G o l d, Pr o pert i es e t c H i gh Stock Mark e t T r ad i ng, F o rex T r ad i ng e t c Low R eal Esta t e, Agri c u l t u r al Land, A utomo b il e s e t c Med i um Fi x ed D e p o s i t s , G o l d e t c H i gh M o ne y , C as h , Stocks, Mutual F unds

13. Superi o ri t y of Equi t y R eturns Ad v ant a g e s assoc i a t e d wi th E quity Investme nt Capit al Appre c ia t ion D ivid e nd Earn ings R isk d i l u t ion t hrough D i v er s i fi c ation L i qu i d i t y T ax Effi c i e n t (D ivid e nd and L on g -t erm Capit al ga i ns e x e m p t ed) Ov er a longe r t er m , equ i t y m ar k e t s are one of t h e be s t a v e n ue s for i n v e stm e n t as re t urns are hi gh

14. Ill u st r at i on * B ased o n las t 10 y ears a v era g e ; car r ie s cap it al r i sk I n v estm ent A v enue Ave r age growt h ra t e Amount I n veste d 10 y ear s a go Va l u e of t h e I n v estment now S av i n g s A c c o u n t 3 . 5 % R s. 10 , 000 R s. 14 , 106 F i xed D e pos i ts 6 . 25 % R s. 10 , 000 R s. 18 , 335 Mut u al F u n ds 12 % * R s. 10 , 000 R s. 31 , 060 S tock Mark e ts 15 % * R s. 10 , 000 R s. 40 , 455

15. St a g e of L i fe - I n v estment In s u r ance Sma ll S a vi ngs T w o Wh e el er H ome F ou r Wh e el er Schem es E q u i ty Mutual Fun d s Ch i l d E d u c a t i on Gold Mutual Fun d s Y ou n g Age E ar l y Middle A g e E ar l y Y oung Age Mi dd le Age Securi ty a g ai n s t Un c er t ai n ty T a x S a vi ng P l ans and E ar ly s t a g es of W ea l th B u i l d i ng W eal t h Bu i l d i ng R e t i r em e nt P l ann ing

16. Ris k of I ndividual I n v esting R obust Ana l ys i s not done I nd i v i dual I n ve stors h a v e th e Inab ilit y to D ive rs i f y S ubj e ct t o m i sund e rstand i ng r i sk and other costs r e l at e d t o th e i n ve stm e nt K nowl e dge of the updates and ne e d t o be a l e rt a l l th e t i me

17. Pit f al l s t o b e a v oided Bor r owing fo r Invest i ng In t er e st on borr o we d m on e y s h ou l d b e pa i d ba c k e v en duri n g econom i c do wntu rns whe n re t urns are lo w . E asy t ips o n in v e s t i ng Ev en experts ca n 't ti m e t he m ar k e t s pr o perl y . So s u ch e a sy t i p s s h ou l d b e a v oid e d b y i n d i vid u a l s. A v e r aging of Ass e ts B u ying of as s e t s whe n thei r v al u e i s con t i nuou s l y fal li ng s h ould b e a v oided. Not clearly Un d e r s t a n d the Investmen ts On e s h ould c l ear l y und e rs t and wher e thei r m oney i s go i ng. I n v e s t m e n t s s h ould b e made con s i deri n g personal preferen c e s .

18. What i s a Mutu a l Fund? Mechan i sm for po o li ng tog e the r s a v i ngs of l a r ge num be r of i n ve stors F o r Coll ect iv e I nv e s tme n t W i th the obj e c t i v e o f Ca p i t al App r ec ia t i on W h i le en s urin g Liq u id i t y

19. W h y Mutual F und? Profe s s i onal Manage m e n t Eas y Liq ui di t y R edu c ti on / Div ers i fi c a ti on of R i sk R e t urn P ot en ti al W e l l R egu l at e d - I n v e s t or Prote c ti on Low O pe r at i ng C os t s T ax B e ne fit

20. Di f ferent t ypes of S c hemes Investme nt O bject i v e O p e rational Classi f i c a t ion by G e ography • In c ome Sc h e m es • Gr o wt h Sc h e m e s • B a l an c ed S c h em es • T ax S a ving Sc h e m es • Se c t or F unds • Index F u nds • G il t F u nds • Money Mar k et F unds • O pen Ende d Sc h e m e s • Clos e d Ende d Sc h e m es • In t er v al S c h em es • D om e s ti c Sc h e m es • O f f s h o r e Sc h e m es

21. MF – Ris k vs R e w ard RET U RN R I SK Liq u i d Fu n ds S T De bt Fu n ds Gi lt Fu n ds De bt Fu n ds B al anced F u n ds In d e x Fu n ds E q u i ty Fu n ds Sec t o r al Fun ds

22. S ystema t i c I n v estmen t s M e thod of i nv est in g at re g ular int e r v als ov er a d efined tim e f r a m e. I n v estor i s a b l e t o g et more number of units i n the falling m a r k et and fewer unit whe n the p rice i s high. H e lp s the i n v estor t o sm o othen out the m a r k et fluctuations and the i n v estment wil l b e at a lo w cost ov er a p e r io d . R edu c es th e risk a ss o ci a te d with timin g the m a r k et.

23. T ax Benefi t s • In c ome di s t ribu t ed by t h e s c h em e not t axab l e in t he hands of t h e i n v e s t or • MF unit s e x e m pt e d fr o m W ea lth T ax and G i ft T ax Cap i ta l Gains Equ i t y Schem e s He l d f or more t han 12 m ont h s – ni l He ld for l e ss t han 12 m ont h s – 15% De b t Sch e m e s He l d f or more t han 12 m ont h s – 20% He ld for l e ss t han 12 m ont h s – 30%

24. T r ans a ct i on Co s ts Nil Cos t of ac q u i s i ti on Nil Cos t of ho l d i ng N i l (fo r > 1 y ear i n case of equ i t y and deb t s c he m e s ) 1% (fo r < 1 y ear hold i ng) Cos t of ex it F i nan c i al Advi sor ne eds t o b e pai d by t he i n v e s t or F air fee i s requ i red for qual i t y adv i ce Im p li cit Cost

25. H y gien e F ac t ors Mode of Hold i ng: Ca n b e i nd i vidual / join t / e ithe r or Prefe r able t o h a v e e ithe r or N e e d t o h a v e no m ine e ( e sp e c i ally wher e t he hold i ng i s i nd i vidua l ) Updati ng con t act de t ai l s as and when a change occ u rs Addre s s / ban k de t ai l s / m ob il e nu m be r / e - m ail i d He lp s in e li m i na t ing f r audu l e n t p r ac t i c e s Monit o r i ng i n v e s t m e n t at regu l ar in t er v als Goa l vs Ac t ual P erfo r m an c e vis a v i s ben c h m ark

26. Mutual Fund – E x ecuti o n ….. 1 Ho w d o I ma k e in v e stmen t in MF? D e c id e whi ch s c he m e t o i n v e s t in C on s ul t a F i nan c i al adv i sor t o c h oose a sc h e m e whi ch i s in li ne wi t h y our fi n an c i al goal, ri s k appet i t e & ti m e hori z on Some s c he m es ( l i k e EL S S) h a v e l ock in period ; al s o c h e c k ex i t l oad condi t i ons P AN N o & Bank de t ai l s are a mu s t t o i n v e s t in MF In ca s e of Mi c ro SI P , P AN requ i re m e n t i s w ai v ed Sub m i t t he app li ca t i on along wi t h c h eque at t he Enthrone solution Pvt. Ltd. I n v e s t m e n t can b e m ade through Enthrone solution Pvt. Ltd. Sampl e appl i ca t i on form & gu id e for f illi ng up a v ai l able in t he office O n un i t s al l ot m e n t, y ou wil l rec e i v e a s t at e m e n t of accou n t s s h owi ng un i t s al l ot t ed, v al u e and y our personal de t ai l s

27. Mutual Fund – E x ecuti o n ….. 2 Ho w d o I r e d e e m m y i nvestme n ts? D e c id e whi ch i n v e s t m e n t t o rede e m . T a k e t he he l p of F i nan c i a l Advi sor i f y ou h a v e u n it s in s ev e r al s c he m es on the appropria t e n ess of t h e ti m i ng and t ax i m pact In ca s e of s che m e s wi t h l ock in period , c h e c k whet he r t he l ock in per i od is ov er Sub m i t t he pa p er reque s t at t he Enthrone solution Pvt. Ltd. or to Advisor belong to Enthrone solution Pvt. Ltd. If the re i s a change in ban k de t ai l s, pl e ase t a k e care t o m e n ti on t he sa m e in t he reque s t . Y ou wil l rec e i v e t he p r oce e d s dire c tl y in y our ban k ac c ount or by c h equ e . Sta t e m e n t of Accou n t s refl e c t i ng t he unit s rede e m ed and revi s ed hold i ng wil l b e i s s u ed Sampl e t r an s ac t i on s l i p a v ai l able online one can download or can request to Enthrone solution Pvt. Ltd.

28. Mutual Fund – E x ecuti o n ….. 3 Can I mov e m y i nvestme n t fro m one s c h e m e t o anot h e r? Y e s , i f both t he s che m e s are fr o m t he sa m e F und House . In MF par l an c e, thi s i s ca ll ed swit c h ; T r an s ac t i on s l i p (can download from d ne eds t o b e fi ll ed up and s ub m i tt ed at Enthrone solution Pvt. Ltd. Txn Sli p s h ould con t ain t he source s c he m e , t arget s c he m e and v al u e pr o pos e d t o b e t r an s ferred If t he source s c he m e has l ock in cond iti on s , the y s h ould b e sa t i sf i ed

29. Othe r I n v estmen t s T o p r o vi d e ad eq u a t e o l d a g e in c ome. R ea so nabl e mar k e t ba s ed r e turns o v er the lon g t erm. Ex t en d i n g o l d a g e s e c uri ty c o v e r a g e t o all c i t i z en s. R egul a t ed b y G ov ernme n t of India ’ s P FR D A . N e w P en s ion S y s t em T o p r o vi d e a c o v er a g ai n s t the uncer t a i n t i es o f l i f e. R ea so nabl e mar k e t ba s ed r e turns o v er the lon g t erm . R e g ul a t ed b y G o v ernm e n t of India ’ s IR D A . Insu r ance Schemes

30. Selec t in g a F i nanc i al Advisor Understanding your n e e d s – Fi rst und e rs t and wha t y ou w ant out of a Fi nan ci al Advi so r . Di fferent i n v e s t o r s h a v e differe n t preferen c es – Ri sk T ol e r an c e, Ti m e Ho r i z on, R e t urn Expec t at i ons e t c Ta l k t o others – one of t h e be s t wa ys t o fi n d po t e nti al pla n ne rs i s by ask i ng o the rs. R efer r als are re c om m e n ded. Ha v e a me e ting – Its requ i red t o und e rs t and what i s on offer and what y ou w an t . C o mpen sa t i on – U n ders t and t he c h arges t hat y ou h a v e t o p a y . Quali t y adv i ce ca n not b e free. B e c om e c o mfortable – It m a y requ i re y ou to m e e t y our adv i sor m o r e often regard i ng v arious i n v e stm e nt s.

31. 5 Quest i ons t o b e a s k ed t o a F A Experi enc e ? It i s i m portant t o und e rs t and t he experi e n c e and expert i se of t h e F i nan c i al Advi so r . S er vi c e s ? Ki nd of servi c es and fi n an c i al pr o duc t s a v ai l able wi t h hi m . S ty l e? Ki nd of approach t he Advi sor ta k es t o w ards Ind i vid u al F ina n c i al P l an n ing. C o mpen sa t i on? Th e c h arges as s oc i at e d wi t h t he Advi c e / F i nan c i a l He l p . C o s t s/ Risks/Op t i ons / B e nc h mark s ? It i s e s s e n t i al t o know all t he cos t s and ri s ks as s oc i at e d wi t h t he i n v e s t m e n t . Al so und e rs t and how t o e v al u ate vi s - a - vis ben c h m arks – Se n s e x, F D r ate e t c.

32. C o n f i d e n t i al t o R e c i p ie n t S li d e 32 Thank you Santosh Kumar Singh 9163744799