Save

Spend

What do you do
with your money?

Invest
What's wrong with
just saving?

Inflation
eats up your savings over time!
Solution?
Investing - the safeguard against inflation

Start Saving … Progress from ‘Saving’ Put money to work rather than
the earlier you start, the better to ‘Investing’ accumulating or keeping it idle

You work hard to earn money … Benefit from the

So, make the money work hard Power of Compounding
for you

A comprehensive financial plan can help you plan your investments efficiently
Why is Financial Planning important?

To reach financial goals faster & To enhance your standard of living To prepare for financial emergencies
in a disciplined manner
Saving and investing according to a Keeping aside a contingency fund can
Investing systematically can help you financial plan can help you live a protect your financial being during a
stay focused on the goal sustainable standard of living. crisis situation

To manage and save taxes efficiently To enjoy peace of mind

Financial planning helps you invest in tax-saving A financial plan manages your money efficiently
instruments which are aligned with your goals and and thereby helps you enjoy peace of mind.
asset allocation
Investing in the right asset can help create
wealth in the long term
Returns generated by investment in stock market over different tenures

Sensex (CAGR %)
18.0

16.0 15.5
15.0
14.4
14.0 12.8 12.7 12.7
11.9
12.0 11.3

10.0

8.0

6.0

4.0

2.0

0.0
5 10 15 20 25 30 35 40

Tenure (years)

Source: ACE MF | CAGR returns are as of 30 June 2023 | Returns are calculated in a way that the investment period for every tenure is ending on June 30, 2023. For example,
the investment period for five-years returns is 1 July 2018 to 30 June 2023; the investment period for ten-years is 1 July 2013 to 30 June 2023 and so on | Past performance
may or may not guarantee future performance
Determine
What are you
Investing for?

Goal based investing

Always invest in assets

with your specific financial
goal in mind
Make your
investments
work for you Fight inflation for you

Provide income when you need it

Your Investments Be accessible & usable in parts and portions

should
Grow in value and appreciate over time

Be realizable at fair value and low cost

Proper Asset allocation is the answer

Asset Allocation should match your financial planning/goals
Investment that can Investment that can
Grow in Value Generate Income

Property Gold Bonds NSC/KVP

Art Collection Equity Shares PPF Bank / Company

Mutual Funds
Deposits

Are you investing in the right assets?

What is a Mutual Fund?

A mutual fund is a financial vehicle (scheme) that collects Mutual Funds are managed by fund managers, who
money from many investors and invests it in securities such have the expertise in studying the financial markets.
as stocks, bonds, debentures etc.

Anybody with an investible surplus of as little as a few Mutual Fund investment gives the market returns and
hundred rupees can invest in Mutual Funds not assured returns

Investment in Mutual Funds is the most cost-efficient In the long term, market returns have the potential to
as it offers the lowest charge to the investor perform better than other assured return products

Assured returns is an interest or return on money invested by an investor at an agreed rate.

 Professional
Management

Why invest in Low Cost Transparency

Mutual Funds?
Risk
Diversification
Convenient
(Invest Small Liquidity
Amounts)

Well-Regulated
By SEBI
Structure of Mutual Fund at a glance …

Execute a Trust Deed to form a trust

Sponsor Trustee

Mutual Fund is established as a Trust under Indian Trust Act, 1882

Investment Management & Asset Management

Investors Mutual Fund
Day-to day Operations Company

Custodian

Agents/ Fund Registrar & Transfer

Bankers
Distributors Accountants Agency
Categorization of Mutual Fund Schemes
As per SEBI guidelines on Categorization and Rationalization of schemes issued in October 2017,
mutual fund schemes are classified as:

Equity Schemes Debt Schemes Hybrid Schemes

Solution Oriented Schemes – Other Schemes – Index Funds &

For Retirement and Children ETFs and Fund of Funds

• Under Equity category, Large, Mid and Small cap stocks have now been defined.

• Naming convention of the schemes, especially debt schemes, as per the risk level of underlying portfolio (e.g., Credit
Opportunity Fund is now called Credit Risk Fund)

• Balanced / Hybrid funds are further categorised into conservative hybrid fund, balanced hybrid fund and aggressive hybrid
fund etc
Equity Funds

Invest in equities and Seek growth in the long Suitable for investors with
equity related instruments term, can be volatile in higher risk appetite and
of companies the short term longer investment horizon
Equity Fund Categories

Dividend Yield Fund Value Fund Contra Fund

Predominantly invest in dividend yielding Value investment strategy, with at least Scheme follows contrarian investment
stocks, with at least 65% in stocks 65% in stocks strategy with at least 65% in stocks

Focused Fund Sectoral/ Thematic Fund ELSS

Focused on the number of stocks At least 80% investment in stocks of a At least 80% in stocks in accordance with
(maximum 30) with at least 65% in equity particular sector/ theme Equity Linked Saving Scheme, 2005,
& equity related instruments notified by Ministry of Finance
Debt schemes
Types of debt funds

* Dynamic Bond Fund and Gilt Funds are suitable across duration | # Duration of securities in Credit Risk Fund is strategic and not pre-determined
Debt Funds Categories

Long Duration Fund Dynamic Bond Corporate Bond Fund

Securities with Macaulay duration of Securities across duration Minimum 80% investment in corporate bonds
the portfolio greater than 7 years only in AA+ and above rated corporate bonds

Credit Risk Fund Banking and PSU Fund Gilt Fund

Minimum 65% investment in corporate bonds, Minimum 80% in Debt instruments of banks, Minimum 80% in G-secs, across maturity
only in AA and below rated corporate bonds Public Sector Undertakings, Public Financial
Institutions and Municipal Bonds

Gilt Fund with 10 year constant Duration Floater fund

Minimum 80% in G-secs, such that the Macaulay Minimum 65% in floating rate instruments (including fixed rate instruments
duration of the portfolio is equal to 10 years converted to floating rate exposures using swaps/ derivatives)
Hybrid schemes
Hybrid Funds
SEBI has classified Hybrid funds into 7 sub-categories as follows:

Conservative Hybrid Fund Balanced Hybrid Fund Aggressive Hybrid

• 10% to 25% investment in equity & equity
• 40% to 60% investment in equity &
Fund
related instruments; and
equity related instruments; and • 65% to 80% investment in equity &
• 75% to 90% in Debt instruments
• 40% to 60% in Debt instruments equity related instruments; and
• 20% to 35% in Debt instruments

Dynamic Asset Allocation Arbitrage Fund

or Balanced Advantage Multi Asset Allocation
• Arbitrage funds are hybrid
• Investment in equity/ debt that is managed • Investment in at least 3 asset classes mutual funds that generate
dynamically (0% to 100% in equity & equity with a minimum allocation of at least returns by using the strategy
related instruments; and 10% in each asset class of simultaneously buying and
• 0% to 100% in Debt instruments) selling of securities in
different markets to take
advantage of different prices.

Equity Savings
• Equity and equity related instruments (min.65%);
• Debt instruments (min.10%) and
• Derivatives (min. for hedging to be specified in the SID)
Solution Oriented & Other Schemes

Retirement Funds Children’s Funds

Lock-in for at least 5 years or till retirement Lock-in for at least 5 years or till the child
age whichever is earlier attains age of majority whichever is earlier

Index Funds/ ETFs Fund of Funds

Minimum 95% investment in securities of a (Overseas/ Domestic)
particular index
Minimum 95% investment in
securities of a particular index
 Mirrors a market index.

Includes securities as per index and in the same proportion/weightage

Index Funds
Passive fund management

Aims to offer returns and undertake risks similar to the of the index it tracks

Fees capped at: 1.5% (of the amount one invests annually)

Complete transparency in knowing the stocks in the portfolio

 Invests in pure physical gold bullion of 99.5% purity. May also
invest in gold related instruments approved by SEBI and Gold
Deposit Scheme of banks upto 20% of net assets

Each unit of Gold ETFs represents a defined weight in gold, typically one gram.
Gold
Exchange Traded Funds
The price of Gold ETF unit moves in line with the domestic price of gold.

Gold ETF are benchmarked against the price of gold.

Considered as non-equity mutual funds for the purpose of taxation

• Eligible for long-term capital gains benefits if held for 3 years
• No wealth tax is applicable on Units of Gold ETFs
 Fund of funds invest in the units of another mutual fund. Hence,
FoFs are also known as multi-manager funds
Fund of
Funds (FoF) The portfolio of a FoF scheme includes the units of different mutual fund
schemes the FOF invests in

The fund management cost includes expenses of FoF along with underlying
schemes.

Investing in an FoF helps diversify the portfolio and benefit from risk
diversification
Mutual Fund Scheme - Which one to buy?

…. a matter of
Risk Return Trade-Off

Equity Schemes Hybrid Schemes Debt Schemes Liquids Schemes

• Higher Returns • Moderate Returns • Low - Moderate Returns • Lower Returns
• Higher Risk • Moderate Risk • Low - Moderate Risk • Very Low Risk
Scheme Related Documents

KIM

Scheme Statement of Key Information

information Additional Memorandum
document (SID) Information (SAI) (KIM)
• It includes detailed information • SAI contains information related • KIM is a summarized version
that an investor should know to legal, tax, and general of the SID
before investing, like the aspects of a mutual fund. • It includes key/essential
investment objective, fees, • It is common for all schemes details that an investor must
asset allocation, etc. issued by a mutual fund. understand before investing.

• One must read & understand scheme related documents before investing in a mutual fund scheme.
Plans & Options
Growth Option & IDCW (Dividend) Option

Growth Option

Profits made by the

Suitable for investors
scheme are re-invested in This option can help avail
who do not require
the scheme and not paid the benefit of compounding
regular income
out to investors

Income Distribution cum Capital Withdrawal (IDCW) Option

Profits made by the

Suitable for investors Investors have to
scheme are either
who require a source pay a tax on the
re-invested or paid
of income dividend income
out to investors from
time to time
 SIP allows an investor to regularly invest a fixed
amount in a mutual fund scheme.

This is similar to the Recurring Deposit facility

Systematic provided by banks

Investment The advantages of investing through SIP are:

Plan (SIP
• Regular, disciplined investing

• Smaller installments

• Averaging the cost of one unit i.e., 'Rupee Cost

Averaging’

• No need to time the market!

SIP - How Rupee Cost Averaging helps

Month Amount Rising Market Falling Market Volatile Market

NAV (Rs) Units Allotted NAV (Rs) Units Allotted NAV (Rs) Units Allotted

1 10,000 10 1000.00 10 1000.00 10 1000.00

2 10,000 10.5 952.38 9.75 1025.64 10.5 952.38
3 10,000 12 833.33 9 1111.11 9 1111.11
4 10,000 14 714.29 7 1428.57 11 909.09
5 10,000 17 588.24 6.5 1538.46 13 769.23
6 10,000 18 555.56 6 1666.67 11.5 869.57
Total 60,000 81.50 4643.79 48.25 7770.45 65.00 5611.38
Avg. Purchase NAV 13.58 8.04 10.83
Avg. cost per unit 12.92 7.72 10.69
Put aside an amount regularly Rupee cost averaging Discipline is the key Control volatility

Note: The above example uses assumed figures and is for illustrative purposes only.
How to invest in
Mutual Funds
Modes of Investing

Online Mode
Physical Mode
(Traditional / Paper based )
How to withdraw your money?

Withdrawing your money from Mutual Fund scheme is called as Redemption or Repurchase.

You can withdraw full or partial amount or even a specific number of units.

Offline mode to redeem your Online mode to redeem your

mutual fund investments mutual fund investments

Submit the Redemption Request form to the Log-on to the ‘Online Transaction’
AMC or the Registrar's office. page of the desired Mutual Fund.

The form has to be signed by all unit holders. Select the Scheme and the
number of units (or the amount)
you wish to redeem and confirm
The proceeds from the redemption will be
your transaction.
credited to the first named unit holder's
bank account.
What is NAV?

Net Asset Value

The NAV indicates the price of one unit of a particular fund.

The formula of NAV is:

NAV = (Assets-Liabilities)/ Total number of outstanding shares

Mutual Fund NAVs are published daily on AMFI’s website, Mutual Fund Websites, leading
newspapers, etc.
Nomination

Nomination is a facility that enables an individual unit holder to nominate a

person, who can claim the units held by the unit holder or the redemption
proceeds thereof in the event of death the unit holder.

If the Units are held jointly by more than one person, all joint unit holders are
required to together nominate a person who gets the rights of the units, upon
the death of all joint unit holders.

W.e.f October 1, 2021, it is mandatory for investors subscribing to Mutual

Funds to register nomination / opt-out of nomination
Nomination once made can be changed subsequently any time and any
number of times.

It is mandatory for mutual fund unit holders to provide nomination. Failing to

do so might result in freezing of folios from debit.
Complaints Redressal Mechanism

Complaint to Mutual Fund

Contact the Investor Relations Officer of the Mutual Fund

Name and contact details of the Investor Relations Officer are available in the Scheme Information
Document and also on the website of the concerned mutual fund.
Taxation on
mutual funds
02. Taxation of Hybrid Mutual Funds
Taxation of a hybrid fund depends on whether it’s an equity-focused or debt-focused hybrid fund.

Type of Hybrid Fund Duration Capital gains Tax applicable

Less than 36 months Short term capital gains As per respective income tax slab

Conservative More than 36 months (acquired 20% with indexation benefit (subject to Surcharge, if
Long term capital gains
Hybrid Fund before 01st April, 2023) Applicable)
More than 36 months (acquired on
Short Term Capital Gains As per respective income tax slab
or after 01st April, 2023

Less than 36 months Short term capital gains As per respective income tax slab
Balanced
Hybrid Fund 20% with indexation benefit (subject to Surcharge, if
More than 36 months Long term capital gains
Applicable)

Less than 12 months Short term capital gains 15% (subject to Surcharge, if applicable)
Aggressive Gains up to Rs. 1 lakh exempted, anything above
Hybrid Fund
More than 12 months Long term capital gains that is taxed at 10% (subject to surcharge, if
applicable)

Dynamic Asset Less than 12 months Short term capital gains 15% (subject to Surcharge, if applicable)
Allocation or
Balanced Gains upto Rs. 1 lakh exempted, anything above
Advantage More than 12 months Long term capital gains that is taxed at 10% (subject to surcharge, if
applicable)
 Thank You

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.